First Business Financial Services, Inc. (the "Company" or "First
Business") (NASDAQ:FBIZ), the parent company of First Business
Bank, First Business Bank - Milwaukee and Alterra Bank (“Alterra”),
today reported second quarter results led by strong revenue growth,
tempered by an increase in loan loss provision.
Highlights for the quarter ended June 30, 2016 include:
- Net income for the second quarter of 2016 totaled $3.7
million, compared to $3.9 million earned in the second quarter
of 2015.
- Diluted earnings per common share measured $0.43 for the
second quarter of 2016, compared to $0.45 for the second
quarter of 2015.
- Annualized return on average assets and annualized return on
average equity measured 0.81% and 9.43%, respectively, for the
second quarter of 2016, compared to 0.93% and 10.73%, respectively,
for the second quarter of 2015.
- Top line revenue, consisting of net interest income and
non-interest income, increased 18% year-over-year to a record $21.6
million. Non-interest income as a percentage of top line revenue
measured 27%, exceeding the Company’s 25% target for the first
time.
- Positive operating leverage, the percentage change in operating
revenue greater than the percentage change in operating expenses,
improved the efficiency ratio to 61.49%, compared to 65.28% for the
second quarter of 2015.
- Period-end loans and leases receivable grew for the seventeenth
consecutive quarter to $1.452 billion, up $20.9 million from
December 31, 2015.
- Net interest margin measured 3.59% for the second quarter of
2016, compared to 3.61% for the second quarter of 2015.
- Provision for loan and lease losses for the second quarter of
2016 was $2.8 million, compared to $520,000 for the second quarter
of 2015.
- Non-performing assets as a percent of total assets measured
1.33% at period end, compared to 1.09% at March 31, 2016 and
1.35% at December 31, 2015.
“We are pleased that First Business’s strong fundamentals,
diversified revenue streams and positive operating leverage enabled
us to grow capital, non-interest income, net interest income and
loans to record levels,” said Corey Chambas, President and Chief
Executive Officer. “Despite the quarter’s uncharacteristic credit
challenges, we firmly believe in the credit process that has served
us well over the past 25 years. The new credit issues this quarter,
which we believe are not systemic, are situations which we have
thoroughly reviewed and we have made changes to processes which
should prevent similar issues on a go forward basis.”
Results of Operations
Net interest income of $15.7 million increased 1.3%
compared to the linked quarter and 10.9% compared to the second
quarter of 2015. Linked quarter growth was primarily due to an
increase in prepayment fees collected in lieu of interest from
certain conventional and asset-based loan payoffs during the
quarter, which more than offset a linked quarter moderate decline
in average loan yields. Compared to the second quarter of 2015, net
interest income benefited from an increase in loan prepayment fees
as well as a $141.5 million, or 10.7%, increase in average loan and
lease balances.
Net interest margin was 3.59% for the first and second quarters
of 2016 and 3.61% in the second quarter of 2015. Second quarter
2016 net interest margin included seven basis points related to the
net accretion/amortization of purchase accounting adjustments,
while the linked quarter and second quarter 2015 margin included
eight and 14 basis points, respectively. Excluding the net
accretion/amortization of the purchase accounting adjustments,
second quarter 2016 net interest margin of 3.52% improved by one
basis point from the linked quarter, principally due to higher
prepayment fees collected in lieu of interest, partially offset by
a temporary increase in cash balances held at the Federal Reserve.
Similarly, the net interest margin excluding the net
accretion/amortization of purchase accounting adjustments in the
second quarter of 2016 improved by five basis points compared to
the second quarter of 2015.
Due to the uncertain nature of prepayments on acquired loans,
management acknowledges the net accretion/amortization of purchase
accounting adjustments may be a source of volatility in future
quarters but generally with a declining effect on net interest
margin. As of June 30, 2016, $606,000 and $195,000 of purchase
accounting discounts and premiums, respectively, remain
outstanding. Excluding purchase accounting, management expects to
maintain a stable net interest margin driven by appropriate pricing
and its ability to mitigate interest rate risk through the
Company’s unique wholesale funding model. Net interest margin may
also experience occasional volatility due to events such as loan
fees collected in lieu of interest, the collection of interest on
loans previously in non-accrual or the accumulation of significant
short-term deposit inflows.
Non-interest income of $5.8 million for the second quarter of
2016 amounted to 27.0% of top line revenue, exceeding the Company’s
25% target set in October 2015. Non-interest income increased 26.8%
from the first quarter of 2016 and 41.1% from the second quarter of
2015. The linked quarter increase primarily reflects stronger than
expected gains from SBA loan sales, which benefited from the
expansion of the Company’s SBA lending platform into its Wisconsin
markets. An increase in loan fees and income from trust and
investment services also drove linked quarter growth. The same
factors contributed to improved performance compared to the prior
year quarter. Gains on the sale of SBA loans totaled an unusually
high $2.1 million in the second quarter of 2016, which represented
growth of 153.1% from $842,000 earned in the second quarter of
2015. Trust and investment services income totaled $1.3 million,
increasing $65,000, or 5.1%, compared to the same quarter in the
prior year. Existing client relationships and business development
efforts remained strong as trust assets under management and
administration measured $1.134 billion at June 30, 2016 compared to
$1.107 billion at March 31, 2016 and $998.0 million at June 30,
2015.
Non-interest expense for the second quarter of 2016 was $13.5
million, increasing 6.0% compared to the linked quarter and 12.4%
compared to the second quarter of 2015. Other expenses grew
$692,000, or 72.3%, for the second quarter of 2016 compared to
$957,000 in the linked quarter. The increase included $425,000 in
loan related expenses principally due to the volume of due
diligence on new and existing business. In addition, other expenses
increased $168,000, compared to the linked quarter, as the
Company’s estimated share of income from an investment in a limited
partnership was less than the share of income recognized in the
first quarter of 2016.
The increase in total non-interest expense year-over-year
primarily reflects the Company’s ongoing investment in talent, with
$1.5 million in higher compensation costs driven by a 23% increase
in full-time equivalent employees to 270 at June 30, 2016 from
219 at June 30, 2015. We expect to continue to
opportunistically invest in talent to support our strategic growth
efforts, both in the form of additional business development and
operational staff. Elevated computer software costs related to
expanded use of cloud-based applications and an increase in tax
credit investment amortization were partially offset by a decline
in professional fees of $521,000 year-over-year, in line with
expectations.
The Company achieved positive operating leverage for the second
quarter of 2016, resulting in an efficiency ratio of 61.49%,
compared to 62.44% for the linked quarter and 65.28% for the second
quarter of 2015. Management expects the efficiency ratio to trend
towards the Company’s long-term objective of 60%, reflecting
revenue growth and operating efficiencies achieved through previous
and ongoing investments.
In the second quarter of 2016, the Company recorded provision
for loan and lease losses totaling $2.8 million, compared to
$525,000 in the linked quarter and $520,000 in the second quarter
of 2015. Second quarter 2016 provision primarily reflected a $2.2
million increase in new specific reserves and net charge-offs
related to two loan relationships and an $816,000 increase in
specific reserves related to one energy sector loan, which was
previously identified as impaired in the fourth quarter of 2015.
The above increases were tempered by improvements in underlying
credit metrics in the remaining loan and lease portfolio.
Net charge-offs of $1.3 million represented an annualized 0.35%
of average loans and leases for the second quarter of 2016.
Annualized net charge-offs measured 0.04% and 0.00% of average
loans and leases in the linked quarter and second quarter of 2015,
respectively. Net charge-offs of $1.4 million represented an
annualized 0.20% of average loans and leases for the six months
ended June 30, 2016, compared to $334,000 and 0.05% for the
six months ended June 30, 2015.
The effective tax rate was 30.5% in the second quarter of 2016,
compared to 34.2% in the linked quarter and 33.7% in the second
quarter of 2015. The effective tax rate was 32.6% for the six
months ended June 30, 2016, compared to 33.9% for the six months
ended June 30, 2015.
Balance Sheet
Period-end loans and leases grew for the seventeenth consecutive
quarter, reaching $1.452 billion at June 30, 2016. Loans and leases
increased $3.2 million, or 0.2%, from March 31, 2016
and $102.5 million, or 7.6%, from June 30, 2015. On an
average basis, loans and leases of $1.460 billion increased by
$141.5 million, or 10.7%, compared to the second quarter of
2015. Loan growth was slower than typically generated in a second
quarter period, primarily due to elevated payoffs in the
asset-based lending business.
Period-end in-market deposits - consisting of all transaction
accounts, money market accounts and non-wholesale deposits -
increased to $1.131 billion, or 70.3% of total deposits, at June
30, 2016. Period-end wholesale deposits were $477.1 million at June
30, 2016, consisting of brokered certificates of deposit and
deposits gathered through internet deposit listing services of
$397.1 million and $80.0 million, respectively. In order to reduce
interest-rate risk, the Company uses wholesale deposits to
efficiently match-fund fixed rate loans. Over time, management
expects to maintain a ratio of in-market deposits to total deposits
in line with the Company's recent historical range of 60%-70%.
Asset Quality
Management continues to believe the Company’s credit culture is
a core competency which differentiates First Business from other
banks. However, in the second quarter, deterioration in certain
credits had an impact on the Company’s loan loss provision and
non-performing asset levels at June 30, 2016. Management took
measures in the second quarter to determine the cause of the credit
losses and isolated the issues. Subsequently, management has
modified reporting structures and reinforced policies and
procedures to ensure future lending meets the high standards long
established within the First Business franchise.
Non-performing assets totaled $24.2 million at June 30, 2016,
increasing by $4.7 million, or 24.0%, compared to $19.5 million at
March 31, 2016 and increasing by $7.2 million, or 42.1%, compared
to $17.1 million at June 30, 2015. As a percent of total assets,
non-performing assets measured 1.33% at June 30, 2016, compared to
1.09% and 1.01% at the end of the linked quarter and year-ago
quarter, respectively.
While non-performing assets increased, criticized assets
decreased $8.3 million, or 23.3%, to $27.3 million at June 30,
2016, compared to $35.6 million at the end of the linked
quarter.
As of June 30, 2016, the Company’s direct exposure to the energy
sector was $7.1 million, or 0.49% of total gross loans and leases,
with no remaining unfunded commitments. This reflects a decrease of
$558,000, or 7.3%, compared to linked quarter entirely due to
payments received. The associated reserve for loan and lease losses
related to this portfolio was increased to 20.43% at June 30, 2016,
compared to 8.25% at March 31, 2016. Of this population, $5.7
million was considered non-performing as of June 30, 2016. After
considering specific reserves, management believes the portfolio is
adequately collateralized as of the end of the reporting
period.
Capital Strength
The Company's earnings continue to generate capital, and its
capital ratios are expected to exceed the highest required
regulatory benchmark levels. As of June 30, 2016, total capital to
risk-weighted assets was 11.44%, tier 1 capital to risk-weighted
assets was 9.08%, tier 1 leverage capital to adjusted assets was
8.63% and common equity tier 1 capital to risk-weighted assets was
8.50%.
Quarterly Dividend
As previously announced, during the second quarter of 2016 the
Company's Board of Directors declared a regular quarterly dividend
of $0.12 per share. The dividend was paid on May 27,
2016 to shareholders of record at the close of business on May
13, 2016. Measured against second quarter 2016 diluted
earnings per share of $0.43, the dividend represents what the
Company believes is a sustainable 28% payout ratio. The
Board of Directors routinely considers dividend declarations as
part of its normal course of business.
About First Business Financial Services, Inc.
First Business Financial Services, Inc. (NASDAQ:FBIZ) is a
Wisconsin-based bank holding company focused on the unique needs of
businesses, business executives, and high net worth individuals.
First Business offers commercial banking, specialty finance, and
private wealth management solutions, and because of its niche
focus, is able to provide its clients with unmatched expertise,
accessibility, and responsiveness. For additional information,
visit www.firstbusiness.com or call 608-238-8008.
This release may include forward-looking statements as defined
in the Private Securities Litigation Reform Act of 1995, which
reflect First Business’s current views with respect to future
events and financial performance. Forward-looking statements are
not based on historical information, but rather are related to
future operations, strategies, financial results or other
developments. Forward-looking statements are based on management’s
expectations as well as certain assumptions and estimates made by,
and information available to, management at the time the statements
are made. Those statements are based on general assumptions and are
subject to various risks, uncertainties and other factors that may
cause actual results to differ materially from the views, beliefs
and projections expressed in such statements. Such statements are
subject to risks and uncertainties, including among other
things:
- Competitive pressures among depository and other financial
institutions nationally and in our markets.
- Adverse changes in the economy or business conditions, either
nationally or in our markets.
- Increases in defaults by borrowers and other
delinquencies.
- Our inability to manage growth effectively, including the
successful expansion of our customer support, administrative
infrastructure and internal management systems.
- Fluctuations in interest rates and market prices.
- The consequences of continued bank acquisitions and mergers in
our market areas, resulting in fewer but much larger and
financially stronger competitors.
- Changes in legislative or regulatory requirements applicable to
us and our subsidiaries.
- Changes in tax requirements, including tax rate changes, new
tax laws and revised tax law interpretations.
- System failure or breaches of our network security, including
with respect to our internet banking activities.
For further information about the factors that could affect the
Company’s future results, please see the Company’s 2015 annual
report on Form 10-K, quarterly reports on Form 10-Q and other
filings with the Securities and Exchange Commission.
SELECTED FINANCIAL CONDITION DATA
(Unaudited) |
|
As of |
(in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
131,611 |
|
|
$ |
104,854 |
|
|
$ |
113,564 |
|
|
$ |
122,671 |
|
|
$ |
88,848 |
|
Securities available-for-sale, at
fair value |
|
137,692 |
|
|
140,823 |
|
|
140,548 |
|
|
143,729 |
|
|
146,342 |
|
Securities held-to-maturity, at
amortized cost |
|
36,167 |
|
|
36,485 |
|
|
37,282 |
|
|
38,364 |
|
|
39,428 |
|
Loans held for sale |
|
5,548 |
|
|
1,697 |
|
|
2,702 |
|
|
2,910 |
|
|
1,274 |
|
Loans and leases receivable |
|
1,451,815 |
|
|
1,448,586 |
|
|
1,430,965 |
|
|
1,377,172 |
|
|
1,349,290 |
|
Allowance for loan and lease
losses |
|
(18,154 |
) |
|
(16,684 |
) |
|
(16,316 |
) |
|
(15,359 |
) |
|
(15,199 |
) |
Loans and leases, net |
|
1,433,661 |
|
|
1,431,902 |
|
|
1,414,649 |
|
|
1,361,813 |
|
|
1,334,091 |
|
Premises and equipment, net |
|
3,969 |
|
|
3,868 |
|
|
3,954 |
|
|
3,889 |
|
|
3,998 |
|
Foreclosed properties |
|
1,548 |
|
|
1,677 |
|
|
1,677 |
|
|
1,632 |
|
|
1,854 |
|
Cash surrender value of bank-owned
life insurance |
|
28,784 |
|
|
28,541 |
|
|
28,298 |
|
|
28,029 |
|
|
27,785 |
|
Investment in Federal Home Loan
Bank and Federal Reserve Bank stock, at cost |
|
2,163 |
|
|
2,734 |
|
|
2,843 |
|
|
2,843 |
|
|
2,891 |
|
Goodwill and other intangible
assets |
|
12,923 |
|
|
12,606 |
|
|
12,493 |
|
|
12,244 |
|
|
12,133 |
|
Accrued interest receivable and
other assets |
|
25,003 |
|
|
24,945 |
|
|
24,071 |
|
|
25,203 |
|
|
24,074 |
|
Total assets |
|
$ |
1,819,069 |
|
|
$ |
1,790,132 |
|
|
$ |
1,782,081 |
|
|
$ |
1,743,327 |
|
|
$ |
1,682,718 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
In-market deposits |
|
$ |
1,130,890 |
|
|
$ |
1,105,633 |
|
|
$ |
1,089,748 |
|
|
$ |
1,062,753 |
|
|
$ |
1,026,588 |
|
Wholesale deposits |
|
477,054 |
|
|
475,955 |
|
|
487,483 |
|
|
476,617 |
|
|
444,480 |
|
Total deposits |
|
1,607,944 |
|
|
1,581,588 |
|
|
1,577,231 |
|
|
1,539,370 |
|
|
1,471,068 |
|
Federal Home Loan Bank and other
borrowings |
|
33,570 |
|
|
35,011 |
|
|
34,740 |
|
|
35,856 |
|
|
46,887 |
|
Junior subordinated notes |
|
9,997 |
|
|
9,993 |
|
|
9,990 |
|
|
9,987 |
|
|
9,983 |
|
Accrued interest payable and other
liabilities |
|
9,164 |
|
|
8,341 |
|
|
9,288 |
|
|
10,147 |
|
|
10,493 |
|
Total liabilities |
|
1,660,675 |
|
|
1,634,933 |
|
|
1,631,249 |
|
|
1,595,360 |
|
|
1,538,431 |
|
Total stockholders’ equity |
|
158,394 |
|
|
155,199 |
|
|
150,832 |
|
|
147,967 |
|
|
144,287 |
|
Total liabilities and
stockholders’ equity |
|
$ |
1,819,069 |
|
|
$ |
1,790,132 |
|
|
$ |
1,782,081 |
|
|
$ |
1,743,327 |
|
|
$ |
1,682,718 |
|
STATEMENTS OF INCOME
(Unaudited) |
|
As of and for the Three Months
Ended |
|
As of and for the Six Months
Ended |
(Dollars in thousands, except per share
amounts) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
Total interest
income |
|
$ |
19,555 |
|
|
$ |
19,343 |
|
|
$ |
18,600 |
|
|
$ |
18,135 |
|
|
$ |
17,520 |
|
|
$ |
38,898 |
|
|
$ |
35,736 |
|
Total interest
expense |
|
3,814 |
|
|
3,804 |
|
|
3,688 |
|
|
3,525 |
|
|
3,332 |
|
|
7,619 |
|
|
6,618 |
|
Net interest income |
|
15,741 |
|
|
15,539 |
|
|
14,912 |
|
|
14,610 |
|
|
14,188 |
|
|
31,279 |
|
|
29,118 |
|
Provision for loan and
lease losses |
|
2,762 |
|
|
525 |
|
|
1,895 |
|
|
287 |
|
|
520 |
|
|
3,287 |
|
|
1,204 |
|
Net interest income after provision
for loan and lease losses |
|
12,979 |
|
|
15,014 |
|
|
13,017 |
|
|
14,323 |
|
|
13,668 |
|
|
27,992 |
|
|
27,914 |
|
Trust and investment
services fee income |
|
1,344 |
|
|
1,273 |
|
|
1,217 |
|
|
1,251 |
|
|
1,279 |
|
|
2,618 |
|
|
2,486 |
|
Gain on sale of SBA
loans |
|
2,131 |
|
|
1,376 |
|
|
1,725 |
|
|
927 |
|
|
842 |
|
|
3,506 |
|
|
1,347 |
|
Gain on sale of
residential mortgage loans |
|
198 |
|
|
145 |
|
|
115 |
|
|
244 |
|
|
222 |
|
|
342 |
|
|
370 |
|
Service charges on
deposits |
|
733 |
|
|
742 |
|
|
718 |
|
|
705 |
|
|
693 |
|
|
1,475 |
|
|
1,389 |
|
Loan fees |
|
676 |
|
|
609 |
|
|
700 |
|
|
486 |
|
|
499 |
|
|
1,285 |
|
|
1,001 |
|
Other |
|
741 |
|
|
449 |
|
|
460 |
|
|
489 |
|
|
591 |
|
|
1,190 |
|
|
1,381 |
|
Total non-interest income |
|
5,823 |
|
|
4,594 |
|
|
4,935 |
|
|
4,102 |
|
|
4,126 |
|
|
10,416 |
|
|
7,974 |
|
Compensation |
|
8,447 |
|
|
8,370 |
|
|
6,945 |
|
|
7,320 |
|
|
6,924 |
|
|
16,818 |
|
|
14,278 |
|
Occupancy |
|
500 |
|
|
508 |
|
|
501 |
|
|
486 |
|
|
486 |
|
|
1,008 |
|
|
986 |
|
Professional fees |
|
961 |
|
|
861 |
|
|
1,121 |
|
|
1,268 |
|
|
1,482 |
|
|
1,822 |
|
|
2,393 |
|
Data processing |
|
697 |
|
|
651 |
|
|
606 |
|
|
587 |
|
|
655 |
|
|
1,348 |
|
|
1,185 |
|
Marketing |
|
448 |
|
|
734 |
|
|
549 |
|
|
693 |
|
|
701 |
|
|
1,182 |
|
|
1,343 |
|
Equipment |
|
341 |
|
|
280 |
|
|
316 |
|
|
308 |
|
|
298 |
|
|
621 |
|
|
606 |
|
FDIC Insurance |
|
254 |
|
|
291 |
|
|
227 |
|
|
260 |
|
|
220 |
|
|
545 |
|
|
433 |
|
Net collateral
liquidation costs |
|
68 |
|
|
47 |
|
|
70 |
|
|
22 |
|
|
78 |
|
|
114 |
|
|
380 |
|
Net loss (gain) on
foreclosed properties |
|
93 |
|
|
— |
|
|
7 |
|
|
(163 |
) |
|
1 |
|
|
93 |
|
|
(15 |
) |
Merger-related
costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
33 |
|
|
— |
|
|
111 |
|
Other |
|
1,649 |
|
|
957 |
|
|
1,342 |
|
|
1,203 |
|
|
1,096 |
|
|
2,605 |
|
|
2,006 |
|
Total non-interest expense |
|
13,458 |
|
|
12,699 |
|
|
11,684 |
|
|
11,984 |
|
|
11,974 |
|
|
26,156 |
|
|
23,706 |
|
Income before tax
expense |
|
5,344 |
|
|
6,909 |
|
|
6,268 |
|
|
6,441 |
|
|
5,820 |
|
|
12,252 |
|
|
12,182 |
|
Income tax expense |
|
1,628 |
|
|
2,362 |
|
|
2,185 |
|
|
2,060 |
|
|
1,962 |
|
|
3,990 |
|
|
4,132 |
|
Net income |
|
$ |
3,716 |
|
|
$ |
4,547 |
|
|
$ |
4,083 |
|
|
$ |
4,381 |
|
|
$ |
3,858 |
|
|
$ |
8,262 |
|
|
$ |
8,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings |
|
$ |
0.43 |
|
|
$ |
0.52 |
|
|
$ |
0.47 |
|
|
$ |
0.50 |
|
|
$ |
0.45 |
|
|
$ |
0.95 |
|
|
$ |
0.93 |
|
Diluted earnings |
|
0.43 |
|
|
0.52 |
|
|
0.47 |
|
|
0.50 |
|
|
0.45 |
|
|
0.95 |
|
|
0.93 |
|
Dividends declared |
|
0.12 |
|
|
0.12 |
|
|
0.11 |
|
|
0.11 |
|
|
0.11 |
|
|
0.24 |
|
|
0.22 |
|
Book value |
|
18.20 |
|
|
17.84 |
|
|
17.34 |
|
|
17.01 |
|
|
16.64 |
|
|
18.20 |
|
|
16.64 |
|
Tangible book
value |
|
16.71 |
|
|
16.39 |
|
|
15.90 |
|
|
15.60 |
|
|
15.24 |
|
|
16.71 |
|
|
15.24 |
|
Weighted-average common
shares outstanding(1) |
|
8,566,718 |
|
|
8,565,050 |
|
|
8,558,810 |
|
|
8,546,563 |
|
|
8,523,418 |
|
|
8,565,933 |
|
|
8,522,436 |
|
Weighted-average diluted
common shares outstanding(1) |
|
8,566,718 |
|
|
8,565,050 |
|
|
8,558,810 |
|
|
8,546,563 |
|
|
8,523,418 |
|
|
8,565,933 |
|
|
8,523,557 |
|
|
(1 |
) |
Excluding participating
securities |
NET INTEREST INCOME ANALYSIS
(Unaudited) |
|
For the Three Months Ended |
(Dollars in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
June 30, 2015 |
|
|
Averagebalance |
|
Interest |
|
Averageyield/rate(4) |
|
Average balance |
|
Interest |
|
Averageyield/rate(4) |
|
Averagebalance |
|
Interest |
|
Averageyield/rate(4) |
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
and other mortgage loans(1) |
|
$ |
933,681 |
|
|
$ |
10,980 |
|
|
4.70 |
% |
|
$ |
922,859 |
|
|
$ |
10,730 |
|
|
4.65 |
% |
|
$ |
824,250 |
|
|
$ |
9,672 |
|
|
4.69 |
% |
Commercial and
industrial loans(1) |
|
469,888 |
|
|
7,100 |
|
|
6.04 |
% |
|
470,503 |
|
|
7,082 |
|
|
6.02 |
% |
|
439,986 |
|
|
6,408 |
|
|
5.83 |
% |
Direct financing
leases(1) |
|
30,977 |
|
|
355 |
|
|
4.58 |
% |
|
30,845 |
|
|
343 |
|
|
4.45 |
% |
|
29,631 |
|
|
342 |
|
|
4.62 |
% |
Consumer and other
loans(1) |
|
25,675 |
|
|
266 |
|
|
4.14 |
% |
|
27,427 |
|
|
289 |
|
|
4.21 |
% |
|
24,888 |
|
|
258 |
|
|
4.15 |
% |
Total loans and leases
receivable(1) |
|
1,460,221 |
|
|
18,701 |
|
|
5.12 |
% |
|
1,451,634 |
|
|
18,444 |
|
|
5.08 |
% |
|
1,318,755 |
|
|
16,680 |
|
|
5.06 |
% |
Mortgage-related
securities(2) |
|
142,443 |
|
|
556 |
|
|
1.56 |
% |
|
144,899 |
|
|
599 |
|
|
1.65 |
% |
|
156,137 |
|
|
632 |
|
|
1.62 |
% |
Other investment
securities(3) |
|
32,169 |
|
|
126 |
|
|
1.57 |
% |
|
31,326 |
|
|
123 |
|
|
1.57 |
% |
|
28,912 |
|
|
116 |
|
|
1.60 |
% |
FHLB and FRB stock |
|
2,485 |
|
|
19 |
|
|
3.06 |
% |
|
2,802 |
|
|
21 |
|
|
2.92 |
% |
|
2,926 |
|
|
20 |
|
|
2.73 |
% |
Short-term
investments |
|
117,180 |
|
|
153 |
|
|
0.52 |
% |
|
101,420 |
|
|
156 |
|
|
0.62 |
% |
|
66,035 |
|
|
72 |
|
|
0.44 |
% |
Total interest-earning assets |
|
1,754,498 |
|
|
19,555 |
|
|
4.46 |
% |
|
1,732,081 |
|
|
19,343 |
|
|
4.47 |
% |
|
1,572,765 |
|
|
17,520 |
|
|
4.46 |
% |
Non-interest-earning
assets |
|
70,947 |
|
|
|
|
|
|
88,361 |
|
|
|
|
|
|
92,619 |
|
|
|
|
|
Total assets |
|
$ |
1,825,445 |
|
|
|
|
|
|
$ |
1,820,442 |
|
|
|
|
|
|
$ |
1,665,384 |
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
accounts |
|
$ |
147,095 |
|
|
71 |
|
|
0.19 |
% |
|
$ |
162,793 |
|
|
88 |
|
|
0.22 |
% |
|
$ |
105,582 |
|
|
63 |
|
|
0.24 |
% |
Money market |
|
674,015 |
|
|
868 |
|
|
0.52 |
% |
|
646,362 |
|
|
828 |
|
|
0.51 |
% |
|
605,195 |
|
|
841 |
|
|
0.56 |
% |
Certificates of
deposit |
|
65,619 |
|
|
144 |
|
|
0.88 |
% |
|
73,163 |
|
|
151 |
|
|
0.83 |
% |
|
111,192 |
|
|
219 |
|
|
0.79 |
% |
Wholesale deposits |
|
471,707 |
|
|
1,955 |
|
|
1.66 |
% |
|
497,274 |
|
|
1,986 |
|
|
1.60 |
% |
|
428,080 |
|
|
1,470 |
|
|
1.37 |
% |
Total interest-bearing
deposits |
|
1,358,436 |
|
|
3,038 |
|
|
0.89 |
% |
|
1,379,592 |
|
|
3,053 |
|
|
0.89 |
% |
|
1,250,049 |
|
|
2,593 |
|
|
0.83 |
% |
FHLB advances |
|
14,338 |
|
|
31 |
|
|
0.86 |
% |
|
7,537 |
|
|
19 |
|
|
1.01 |
% |
|
22,749 |
|
|
31 |
|
|
0.55 |
% |
Other borrowings |
|
28,510 |
|
|
468 |
|
|
6.57 |
% |
|
27,006 |
|
|
455 |
|
|
6.74 |
% |
|
25,032 |
|
|
430 |
|
|
6.87 |
% |
Junior subordinated
notes |
|
9,995 |
|
|
278 |
|
|
11.13 |
% |
|
9,991 |
|
|
277 |
|
|
11.09 |
% |
|
9,981 |
|
|
278 |
|
|
11.14 |
% |
Total interest-bearing
liabilities |
|
1,411,279 |
|
|
3,815 |
|
|
1.08 |
% |
|
1,424,126 |
|
|
3,804 |
|
|
1.07 |
% |
|
1,307,811 |
|
|
3,332 |
|
|
1.02 |
% |
Non-interest-bearing
demand deposit accounts |
|
246,604 |
|
|
|
|
|
|
228,294 |
|
|
|
|
|
|
205,508 |
|
|
|
|
|
Other
non-interest-bearing liabilities |
|
9,944 |
|
|
|
|
|
|
12,337 |
|
|
|
|
|
|
8,252 |
|
|
|
|
|
Total liabilities |
|
1,667,827 |
|
|
|
|
|
|
1,664,757 |
|
|
|
|
|
|
1,521,571 |
|
|
|
|
|
Stockholders’
equity |
|
157,618 |
|
|
|
|
|
|
155,685 |
|
|
|
|
|
|
143,813 |
|
|
|
|
|
Total liabilities and stockholders’
equity |
|
$ |
1,825,445 |
|
|
|
|
|
|
$ |
1,820,442 |
|
|
|
|
|
|
$ |
1,665,384 |
|
|
|
|
|
Net interest
income |
|
|
|
$ |
15,740 |
|
|
|
|
|
|
$ |
15,539 |
|
|
|
|
|
|
$ |
14,188 |
|
|
|
Interest rate
spread |
|
|
|
|
|
3.38 |
% |
|
|
|
|
|
3.40 |
% |
|
|
|
|
|
3.44 |
% |
Net interest-earning
assets |
|
$ |
343,219 |
|
|
|
|
|
|
$ |
307,955 |
|
|
|
|
|
|
$ |
264,954 |
|
|
|
|
|
Net interest
margin |
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
3.61 |
% |
|
(1 |
) |
The average balances of
loans and leases include non-performing loans and leases and loans
held for sale. Interest income related to non-performing loans and
leases is recognized when collected. Interest income includes net
loan fees collected in lieu of interest. |
|
(2 |
) |
Includes amortized cost
basis of assets available for sale and held to maturity. |
|
(3 |
) |
Yields on tax-exempt
municipal obligations are not presented on a tax-equivalent basis
in this table. |
|
(4 |
) |
Represents annualized
yields/rates. |
NET INTEREST INCOME ANALYSIS
(CONTINUED)
(Unaudited) |
|
For the Six Months Ended |
(Dollars in
thousands) |
|
June 30, 2016 |
|
June 30, 2015 |
|
|
Averagebalance |
|
Interest |
|
Averageyield/rate(4) |
|
Averagebalance |
|
Interest |
|
Averageyield/rate(4) |
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
and other mortgage loans(1) |
|
$ |
928,270 |
|
|
$ |
21,710 |
|
|
4.68 |
% |
|
$ |
819,617 |
|
|
$ |
19,541 |
|
|
4.77 |
% |
Commercial and
industrial loans(1) |
|
470,196 |
|
|
14,183 |
|
|
6.03 |
% |
|
433,379 |
|
|
13,232 |
|
|
6.11 |
% |
Direct financing
leases(1) |
|
30,911 |
|
|
698 |
|
|
4.52 |
% |
|
31,183 |
|
|
725 |
|
|
4.65 |
% |
Consumer and other
loans(1) |
|
26,551 |
|
|
554 |
|
|
4.17 |
% |
|
24,501 |
|
|
507 |
|
|
4.14 |
% |
Total loans and leases
receivable(1) |
|
1,455,928 |
|
|
37,145 |
|
|
5.10 |
% |
|
1,308,680 |
|
|
34,005 |
|
|
5.20 |
% |
Mortgage-related
securities(2) |
|
143,671 |
|
|
1,154 |
|
|
1.61 |
% |
|
155,735 |
|
|
1,294 |
|
|
1.66 |
% |
Other investment
securities(3) |
|
31,748 |
|
|
250 |
|
|
1.57 |
% |
|
28,594 |
|
|
230 |
|
|
1.61 |
% |
FHLB and FRB stock |
|
2,643 |
|
|
40 |
|
|
3.03 |
% |
|
2,763 |
|
|
38 |
|
|
2.75 |
% |
Short-term
investments |
|
109,300 |
|
|
309 |
|
|
0.57 |
% |
|
79,410 |
|
|
169 |
|
|
0.43 |
% |
Total interest-earning assets |
|
1,743,290 |
|
|
38,898 |
|
|
4.46 |
% |
|
1,575,182 |
|
|
35,736 |
|
|
4.54 |
% |
Non-interest-earning
assets |
|
79,657 |
|
|
|
|
|
|
94,002 |
|
|
|
|
|
Total assets |
|
$ |
1,822,947 |
|
|
|
|
|
|
$ |
1,669,184 |
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
accounts |
|
$ |
154,944 |
|
|
160 |
|
|
0.21 |
% |
|
$ |
106,442 |
|
|
121 |
|
|
0.23 |
% |
Money market |
|
660,189 |
|
|
1,696 |
|
|
0.51 |
% |
|
615,485 |
|
|
1,694 |
|
|
0.55 |
% |
Certificates of
deposit |
|
69,391 |
|
|
294 |
|
|
0.83 |
% |
|
117,748 |
|
|
439 |
|
|
0.75 |
% |
Wholesale deposits |
|
484,491 |
|
|
3,941 |
|
|
1.63 |
% |
|
426,136 |
|
|
2,908 |
|
|
1.36 |
% |
Total interest-bearing
deposits |
|
1,369,015 |
|
|
6,091 |
|
|
0.89 |
% |
|
1,265,811 |
|
|
5,162 |
|
|
0.82 |
% |
FHLB advances |
|
10,937 |
|
|
50 |
|
|
0.92 |
% |
|
16,095 |
|
|
55 |
|
|
0.68 |
% |
Other borrowings |
|
27,758 |
|
|
923 |
|
|
6.65 |
% |
|
24,312 |
|
|
849 |
|
|
6.98 |
% |
Junior subordinated
notes |
|
9,993 |
|
|
555 |
|
|
11.11 |
% |
|
9,979 |
|
|
552 |
|
|
11.06 |
% |
Total interest-bearing
liabilities |
|
1,417,703 |
|
|
7,619 |
|
|
1.07 |
% |
|
1,316,197 |
|
|
6,618 |
|
|
1.01 |
% |
Non-interest-bearing
demand deposit accounts |
|
237,449 |
|
|
|
|
|
|
202,905 |
|
|
|
|
|
Other
non-interest-bearing liabilities |
|
11,140 |
|
|
|
|
|
|
8,202 |
|
|
|
|
|
Total liabilities |
|
1,666,292 |
|
|
|
|
|
|
1,527,304 |
|
|
|
|
|
Stockholders’
equity |
|
156,655 |
|
|
|
|
|
|
141,880 |
|
|
|
|
|
Total liabilities and stockholders’
equity |
|
$ |
1,822,947 |
|
|
|
|
|
|
$ |
1,669,184 |
|
|
|
|
|
Net interest
income |
|
|
|
$ |
31,279 |
|
|
|
|
|
|
$ |
29,118 |
|
|
|
Interest rate
spread |
|
|
|
|
|
3.39 |
% |
|
|
|
|
|
3.53 |
% |
Net interest-earning
assets |
|
$ |
325,587 |
|
|
|
|
|
|
$ |
258,985 |
|
|
|
|
|
Net interest
margin |
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
3.70 |
% |
|
(1 |
) |
The average balances of
loans and leases include non-performing loans and leases and loans
held for sale. Interest income related to non-performing loans and
leases is recognized when collected. Interest income includes net
loan fees collected in lieu of interest. |
|
(2 |
) |
Includes amortized cost
basis of assets available for sale and held to maturity. |
|
(3 |
) |
Yields on tax-exempt
municipal obligations are not presented on a tax-equivalent basis
in this table. |
|
(4 |
) |
Represents annualized
yields/rates. |
SELECTED FINANCIAL TRENDS
PERFORMANCE RATIOS
|
|
For the Three Months Ended |
|
For the Six Months Ended |
(Unaudited) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
Return on average
assets (annualized) |
|
0.81 |
% |
|
1.00 |
% |
|
0.93 |
% |
|
1.02 |
% |
|
0.93 |
% |
|
0.91 |
% |
|
0.96 |
% |
Return on average
equity (annualized) |
|
9.43 |
% |
|
11.68 |
% |
|
10.85 |
% |
|
11.93 |
% |
|
10.73 |
% |
|
10.55 |
% |
|
11.35 |
% |
Efficiency ratio |
|
61.49 |
% |
|
62.44 |
% |
|
58.75 |
% |
|
64.82 |
% |
|
65.28 |
% |
|
61.95 |
% |
|
63.85 |
% |
Interest rate
spread |
|
3.38 |
% |
|
3.40 |
% |
|
3.43 |
% |
|
3.44 |
% |
|
3.44 |
% |
|
3.39 |
% |
|
3.53 |
% |
Net interest
margin |
|
3.59 |
% |
|
3.59 |
% |
|
3.63 |
% |
|
3.61 |
% |
|
3.61 |
% |
|
3.59 |
% |
|
3.70 |
% |
Average
interest-earning assets to average interest-bearing
liabilities |
|
124.32 |
% |
|
121.62 |
% |
|
120.98 |
% |
|
120.05 |
% |
|
120.26 |
% |
|
122.97 |
% |
|
119.68 |
% |
ASSET QUALITY RATIOS
(Unaudited) |
|
As of |
(Dollars in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
Non-performing loans
and leases |
|
$ |
22,680 |
|
|
$ |
17,861 |
|
|
$ |
22,298 |
|
|
$ |
9,707 |
|
|
$ |
15,198 |
|
Foreclosed properties,
net |
|
1,548 |
|
|
1,677 |
|
|
1,677 |
|
|
1,632 |
|
|
1,854 |
|
Total non-performing assets |
|
24,228 |
|
|
19,538 |
|
|
23,975 |
|
|
11,339 |
|
|
17,052 |
|
Performing troubled
debt restructurings |
|
788 |
|
|
1,628 |
|
|
1,735 |
|
|
7,852 |
|
|
1,944 |
|
Total impaired assets |
|
$ |
25,016 |
|
|
$ |
21,166 |
|
|
$ |
25,710 |
|
|
$ |
19,191 |
|
|
$ |
18,996 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans
and leases as a percent of total gross loans and leases |
|
1.56 |
% |
|
1.23 |
% |
|
1.56 |
% |
|
0.70 |
% |
|
1.13 |
% |
Non-performing assets
as a percent of total gross loans and leases plus foreclosed
properties |
|
1.67 |
% |
|
1.35 |
% |
|
1.67 |
% |
|
0.82 |
% |
|
1.26 |
% |
Non-performing assets
as a percent of total assets |
|
1.33 |
% |
|
1.09 |
% |
|
1.35 |
% |
|
0.65 |
% |
|
1.01 |
% |
Allowance for loan and
lease losses as a percent of total gross loans and leases |
|
1.25 |
% |
|
1.15 |
% |
|
1.14 |
% |
|
1.12 |
% |
|
1.13 |
% |
Allowance for loan and
lease losses as a percent of non-performing loans |
|
80.04 |
% |
|
93.41 |
% |
|
73.17 |
% |
|
158.23 |
% |
|
100.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
Criticized assets: |
|
|
|
|
|
|
|
|
|
|
Special mention |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Substandard |
|
25,723 |
|
|
33,875 |
|
|
26,797 |
|
|
11,144 |
|
|
10,633 |
|
Doubtful |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Foreclosed properties, net |
|
1,548 |
|
|
1,677 |
|
|
1,677 |
|
|
1,632 |
|
|
1,854 |
|
Total criticized assets |
|
$ |
27,271 |
|
|
$ |
35,552 |
|
|
$ |
28,474 |
|
|
$ |
12,776 |
|
|
$ |
12,487 |
|
Criticized assets to
total assets |
|
1.50 |
% |
|
1.99 |
% |
|
1.60 |
% |
|
0.73 |
% |
|
0.74 |
% |
NET CHARGE-OFFS (RECOVERIES)
(Unaudited) |
|
For the Three Months Ended |
|
For the Six Months Ended |
(Dollars in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
Charge-offs |
|
$ |
1,350 |
|
|
$ |
244 |
|
|
$ |
967 |
|
|
$ |
138 |
|
|
$ |
84 |
|
|
$ |
1,594 |
|
|
$ |
408 |
|
Recoveries |
|
(58 |
) |
|
(87 |
) |
|
(29 |
) |
|
(11 |
) |
|
(69 |
) |
|
(145 |
) |
|
(74 |
) |
Net charge-offs |
|
$ |
1,292 |
|
|
$ |
157 |
|
|
$ |
938 |
|
|
$ |
127 |
|
|
$ |
15 |
|
|
$ |
1,449 |
|
|
$ |
334 |
|
Net charge-offs as a
percent of average gross loans and leases (annualized) |
|
0.35 |
% |
|
0.04 |
% |
|
0.27 |
% |
|
0.04 |
% |
|
— |
% |
|
0.20 |
% |
|
0.05 |
% |
CAPITAL RATIOS
|
|
As of and for the Three Months
Ended |
(Unaudited) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
Total capital to
risk-weighted assets |
|
11.44 |
% |
|
11.24 |
% |
|
11.11 |
% |
|
11.29 |
% |
|
11.11 |
% |
Tier I capital to
risk-weighted assets |
|
9.08 |
% |
|
8.96 |
% |
|
8.81 |
% |
|
8.95 |
% |
|
8.78 |
% |
Common equity tier I
capital to risk-weighted assets |
|
8.50 |
% |
|
8.37 |
% |
|
8.22 |
% |
|
8.34 |
% |
|
8.16 |
% |
Tier I capital to
adjusted assets |
|
8.63 |
% |
|
8.44 |
% |
|
8.63 |
% |
|
8.59 |
% |
|
8.66 |
% |
Tangible common equity
to tangible assets |
|
8.05 |
% |
|
8.02 |
% |
|
7.81 |
% |
|
7.84 |
% |
|
7.91 |
% |
SELECTED OTHER INFORMATION
Loan and Lease Receivable Composition
|
|
As of |
(Unaudited) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
Commercial real
estate |
|
|
|
|
|
|
|
|
|
|
Commercial real estate
- owner occupied |
|
$ |
167,936 |
|
|
$ |
174,286 |
|
|
$ |
176,322 |
|
|
$ |
168,695 |
|
|
$ |
169,768 |
|
Commercial real estate
- non-owner occupied |
|
502,378 |
|
|
441,539 |
|
|
436,901 |
|
|
416,421 |
|
|
400,018 |
|
Construction |
|
88,339 |
|
|
117,825 |
|
|
100,625 |
|
|
99,497 |
|
|
82,285 |
|
Land development |
|
60,599 |
|
|
61,953 |
|
|
59,779 |
|
|
58,154 |
|
|
58,033 |
|
Multi-family |
|
73,239 |
|
|
84,004 |
|
|
80,254 |
|
|
90,514 |
|
|
86,912 |
|
1-4 family |
|
47,289 |
|
|
50,923 |
|
|
50,304 |
|
|
44,169 |
|
|
46,760 |
|
Total commercial real estate |
|
939,780 |
|
|
930,530 |
|
|
904,185 |
|
|
877,450 |
|
|
843,776 |
|
Commercial and
industrial |
|
456,297 |
|
|
461,573 |
|
|
472,193 |
|
|
449,204 |
|
|
454,230 |
|
Direct
financing leases, net |
|
30,698 |
|
|
31,617 |
|
|
31,093 |
|
|
28,958 |
|
|
28,723 |
|
Consumer and
other |
|
|
|
|
|
|
|
|
|
|
Home equity and second
mortgages |
|
7,372 |
|
|
7,366 |
|
|
8,237 |
|
|
8,908 |
|
|
9,161 |
|
Other |
|
18,743 |
|
|
18,510 |
|
|
16,319 |
|
|
13,809 |
|
|
14,547 |
|
Total consumer and other |
|
26,115 |
|
|
25,876 |
|
|
24,556 |
|
|
22,717 |
|
|
23,708 |
|
Total gross loans and
leases receivable |
|
1,452,890 |
|
|
1,449,596 |
|
|
1,432,027 |
|
|
1,378,329 |
|
|
1,350,437 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease
losses |
|
18,154 |
|
|
16,684 |
|
|
16,316 |
|
|
15,359 |
|
|
15,199 |
|
Deferred loan fees |
|
1,075 |
|
|
1,010 |
|
|
1,062 |
|
|
1,157 |
|
|
1,147 |
|
Loans and leases
receivable, net |
|
$ |
1,433,661 |
|
|
$ |
1,431,902 |
|
|
$ |
1,414,649 |
|
|
$ |
1,361,813 |
|
|
$ |
1,334,091 |
|
SELECTED OTHER INFORMATION (CONTINUED)
Deposit Composition
|
|
As of |
(Unaudited) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
transaction accounts |
|
$ |
243,370 |
|
|
$ |
236,662 |
|
|
$ |
231,199 |
|
|
$ |
222,497 |
|
|
$ |
221,064 |
|
Interest-bearing
transaction accounts |
|
151,865 |
|
|
154,351 |
|
|
165,921 |
|
|
155,814 |
|
|
107,318 |
|
Money market
accounts |
|
671,420 |
|
|
646,336 |
|
|
612,642 |
|
|
591,190 |
|
|
588,240 |
|
Certificates of
deposit |
|
64,235 |
|
|
68,284 |
|
|
79,986 |
|
|
93,252 |
|
|
109,966 |
|
Wholesale deposits |
|
477,054 |
|
|
475,955 |
|
|
487,483 |
|
|
476,617 |
|
|
444,480 |
|
Total deposits |
|
$ |
1,607,944 |
|
|
$ |
1,581,588 |
|
|
$ |
1,577,231 |
|
|
$ |
1,539,370 |
|
|
$ |
1,471,068 |
|
Trust Assets
(Unaudited) |
|
As of |
(in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
Trust assets under
management |
|
$ |
906,239 |
|
|
$ |
896,414 |
|
|
$ |
817,926 |
|
|
$ |
791,150 |
|
|
$ |
800,615 |
|
Trust assets under
administration |
|
227,864 |
|
|
210,357 |
|
|
203,181 |
|
|
187,495 |
|
|
197,343 |
|
Total trust assets |
|
$ |
1,134,103 |
|
|
$ |
1,106,771 |
|
|
$ |
1,021,107 |
|
|
$ |
978,645 |
|
|
$ |
997,958 |
|
NON-GAAP RECONCILIATIONS
Certain financial information provided in this release is
determined by methods other than in accordance with generally
accepted accounting principles (United States) (“GAAP”).
Although the Company believes that these non-GAAP financial
measures provide a greater understanding of its business, these
measures are not necessarily comparable to similar measures that
may be presented by other companies.
TANGIBLE BOOK VALUE
“Tangible book value per share” is a non-GAAP measure
representing tangible common equity divided by total common shares
outstanding. “Tangible common equity” itself is a non-GAAP
measure representing common stockholders’ equity reduced by
intangible assets, if any. The Company’s management believes
that this measure is important to many investors in the marketplace
who are interested in period-to-period changes in book value per
common share exclusive of changes in intangible assets. The
information provided below reconciles tangible book value per share
and tangible common equity to their most comparable GAAP
measures.
(Unaudited) |
|
As of |
(Dollars in
thousands, except per share amounts) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
Common stockholders’
equity |
|
$ |
158,394 |
|
|
$ |
155,199 |
|
|
$ |
150,832 |
|
|
$ |
147,967 |
|
|
$ |
144,287 |
|
Goodwill and other
intangible assets |
|
(12,923 |
) |
|
(12,606 |
) |
|
(12,493 |
) |
|
(12,244 |
) |
|
(12,133 |
) |
Tangible common
equity |
|
$ |
145,471 |
|
|
$ |
142,593 |
|
|
$ |
138,339 |
|
|
$ |
135,723 |
|
|
$ |
132,154 |
|
Common shares
outstanding |
|
8,703,942 |
|
|
8,700,172 |
|
|
8,699,410 |
|
|
8,698,755 |
|
|
8,669,836 |
|
Book value per
share |
|
$ |
18.20 |
|
|
$ |
17.84 |
|
|
$ |
17.34 |
|
|
$ |
17.01 |
|
|
$ |
16.64 |
|
Tangible book value per
share |
|
16.71 |
|
|
16.39 |
|
|
15.90 |
|
|
15.60 |
|
|
15.24 |
|
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
‘‘Tangible common equity to tangible assets’’ is defined as the
ratio of common stockholders’ equity reduced by intangible assets,
if any, divided by total assets reduced by intangible assets, if
any. The Company’s management believes that this measure is
important to many investors in the marketplace who are interested
in the relative changes from period to period in common equity and
total assets, each exclusive of changes in intangible assets.
The information below reconciles tangible common equity and
tangible assets to their most comparable GAAP measures.
(Unaudited) |
|
As of |
(Dollars in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
Common stockholders’
equity |
|
$ |
158,394 |
|
|
$ |
155,199 |
|
|
$ |
150,832 |
|
|
$ |
147,967 |
|
|
$ |
144,287 |
|
Goodwill and other
intangible assets |
|
(12,923 |
) |
|
(12,606 |
) |
|
(12,493 |
) |
|
(12,244 |
) |
|
(12,133 |
) |
Tangible common
equity |
|
$ |
145,471 |
|
|
$ |
142,593 |
|
|
$ |
138,339 |
|
|
$ |
135,723 |
|
|
$ |
132,154 |
|
Total assets |
|
$ |
1,819,069 |
|
|
$ |
1,790,132 |
|
|
$ |
1,782,081 |
|
|
$ |
1,743,327 |
|
|
$ |
1,682,718 |
|
Goodwill and other
intangible assets |
|
(12,923 |
) |
|
(12,606 |
) |
|
(12,493 |
) |
|
(12,244 |
) |
|
(12,133 |
) |
Tangible assets |
|
$ |
1,806,146 |
|
|
$ |
1,777,526 |
|
|
$ |
1,769,588 |
|
|
$ |
1,731,083 |
|
|
$ |
1,670,585 |
|
Tangible common equity
to tangible assets |
|
8.05 |
% |
|
8.02 |
% |
|
7.82 |
% |
|
7.84 |
% |
|
7.91 |
% |
EFFICIENCY RATIO
“Efficiency ratio” is a non-GAAP measure representing
non-interest expense excluding the effects of losses or gains on
foreclosed properties, other discrete items that are unrelated to
the Company’s primary business activities and amortization of other
intangible assets, if any, divided by operating revenue, which is
equal to net interest income plus non-interest income less realized
gains or losses on securities, if any. In the judgment of the
Company’s management, the adjustments made to non-interest expense
and operating revenue allow investors and analysts to better assess
the Company’s operating expenses in relation to its core operating
revenue by removing the volatility that is associated with certain
one-time items and other discrete items that are unrelated to its
business. The information provided below reconciles the
efficiency ratio to its most comparable GAAP measure.
(Unaudited) |
|
For the Three Months Ended |
|
For the Six Months Ended |
(Dollars in
thousands) |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
September 30, 2015 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
Total non-interest
expense |
|
$ |
13,458 |
|
|
$ |
12,699 |
|
|
$ |
11,684 |
|
|
$ |
11,984 |
|
|
$ |
11,974 |
|
|
$ |
26,156 |
|
|
$ |
23,706 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (gain) on foreclosed
properties |
|
93 |
|
|
— |
|
|
7 |
|
|
(163 |
) |
|
1 |
|
|
93 |
|
|
(15 |
) |
Amortization of other intangible
assets |
|
16 |
|
|
16 |
|
|
17 |
|
|
18 |
|
|
18 |
|
|
32 |
|
|
36 |
|
Amortization of tax credit
investments |
|
94 |
|
|
112 |
|
|
— |
|
|
— |
|
|
— |
|
|
206 |
|
|
— |
|
Total operating
expense |
|
$ |
13,255 |
|
|
$ |
12,571 |
|
|
$ |
11,660 |
|
|
$ |
12,129 |
|
|
$ |
11,955 |
|
|
$ |
25,825 |
|
|
$ |
23,685 |
|
Net interest
income |
|
$ |
15,741 |
|
|
$ |
15,539 |
|
|
$ |
14,912 |
|
|
$ |
14,610 |
|
|
$ |
14,188 |
|
|
$ |
31,279 |
|
|
$ |
29,118 |
|
Total non-interest
income |
|
5,823 |
|
|
4,594 |
|
|
4,935 |
|
|
4,102 |
|
|
4,126 |
|
|
10,416 |
|
|
7,974 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of securities |
|
7 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7 |
|
|
— |
|
Total operating
revenue |
|
$ |
21,557 |
|
|
$ |
20,133 |
|
|
$ |
19,847 |
|
|
$ |
18,712 |
|
|
$ |
18,314 |
|
|
$ |
41,688 |
|
|
$ |
37,092 |
|
Efficiency ratio |
|
61.49 |
% |
|
62.44 |
% |
|
58.75 |
% |
|
64.82 |
% |
|
65.28 |
% |
|
61.95 |
% |
|
63.85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
First Business Financial Services, Inc.
Edward G. Sloane, Jr.
Chief Financial Officer
608-232-5970
esloane@firstbusiness.com
First Business Financial... (NASDAQ:FBIZ)
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Von Jun 2024 bis Jul 2024
First Business Financial... (NASDAQ:FBIZ)
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Von Jul 2023 bis Jul 2024