First Business Financial Services, Inc. (the “Company” or “First
Business”) (NASDAQ:FBIZ) reported first quarter 2018 results, which
included the highest first quarter loan growth in Company history
and robust net interest margin. Continued decline in non-performing
assets was highlighted by a $6.4 million, or 24%, decrease in
non-performing loans from the linked quarter, marking the lowest
level since the first quarter of 2016.
Summary results for the quarter ended
March 31, 2018 include:
- Net income totaled $3.6 million, compared to $4.0 million in
the linked quarter and $3.4 million in the first quarter of
2017.
- Diluted earnings per common share measured $0.42, compared to
$0.46 and $0.39 for the linked and prior year quarters,
respectively.
- Annualized return on average assets and annualized return on
average equity measured 0.78% and 8.88%, respectively, for the
first quarter of 2018, compared to 0.91% and 9.57% for the linked
quarter and 0.77% and 8.31% for the first quarter of 2017.
- Net interest margin was 3.65%, compared to 3.63% in the linked
quarter and 3.51% for the first quarter of 2017.
- Trust and investment services fee income totaled a record $1.9
million, increasing 9.1% from the linked quarter and 16.5% from the
first quarter of 2017.
- Top line revenue, the sum of net interest income and
non-interest income, increased 10.5% to $20.9 million from the
linked quarter and 10.1% from the first quarter of 2017.
- Provision for loan and lease losses was $2.5 million, compared
to $473,000 for the linked quarter and $572,000 for the first
quarter of 2017. This increase was primarily related to charge-offs
of $2.7 million associated with three legacy SBA loan relationships
that were previously identified as impaired.
- Small Business Administration (“SBA”) recourse provision was a
net benefit of $295,000, compared to expense of $145,000 for the
linked quarter and expense of $6,000 for the first quarter of
2017.
- The Company’s efficiency ratio measured 67.45%, compared to
63.23% for the linked quarter and 70.85% for the first quarter of
2017.
- Record period-end gross loans and leases receivable of $1.563
billion grew 16.5% annualized during the first quarter and
increased 5.6% from March 31, 2017.
- Non-performing assets decreased to $21.5 million at
March 31, 2018 from $27.5 million and $39.0 million at
December 31, 2017 and March 31, 2017, respectively.
“Building on First Business’s positive momentum
heading into the first quarter, we are off to a strong start to
2018,” said Corey Chambas, President and Chief Executive Officer.
“We achieved record first quarter loan growth, demonstrating the
abilities of new and longstanding members of our business
development team and the execution of our strategy. Combined with
our high performing wealth management business, which again
delivered record levels of fee income and assets under management,
we believe our early 2018 performance exhibits the strength of our
differentiated approach to business banking.” Chambas added,
“This strong loan and fee income activity drove double digit top
line revenue growth, allowing us to absorb charge-offs and
significantly reduce our level of non-performing loans again this
quarter.”
Results of Operations
Net interest income was $16.2 million in the first
quarter of 2018, compared to $15.4 million in the linked quarter
and $14.9 million in the first quarter of 2017. The increase
compared to the linked and prior year quarters can be attributed to
both positive interest-earning asset volume and rate variances.
Average interest-earning assets increased $81.7 million and $79.3
million compared to the linked and prior year quarters,
respectively. This increase was predominantly driven by strong loan
growth that began late in the fourth quarter of 2017 and continued
in the first quarter of 2018. On an average basis, gross loans and
leases of $1.545 billion increased by $78.2 million, or 21.3%
annualized, compared to the linked quarter and increased by $89.5
million, or 6.1%, compared to the first quarter of 2017. The yield
on average interest-earning assets improved to 4.67%, up six
basis points from the linked quarter and 32 basis points from the
prior year quarter. The yield on average interest-earning assets
increased at a greater rate than the rate paid on average
interest-bearing liabilities as the Company continued to manage
deposit rate increases. The Company’s current asset-sensitive
balance sheet also benefited from the Federal Open Market
Committee’s decision to increase the targeted federal funds rate in
December 2017 and March 2018. Fees collected in lieu of interest
during the periods of comparison were relatively flat and not a
material driver of the net interest margin improvement.
Average total deposit costs for the first quarter
of 2018 increased to 0.80%, compared to 0.79% in the linked quarter
and 0.71% in the prior year quarter. Similarly, the Company’s cost
of total bank funding increased to 0.93% for the first quarter of
2018, compared to 0.88% in the linked quarter and 0.72% in the
prior year quarter. Total bank funding is defined as total deposits
plus Federal Home Loan Bank (“FHLB”) advances. Management believes
an increase in average total deposit costs will continue as the
Company looks to effectively grow deposits amid intense competition
and continued expectation of a rising rate environment.
Net interest margin measured 3.65% for the first
quarter of 2018, compared to 3.63% in the linked quarter and 3.51%
in the first quarter of 2017. The aforementioned increases to the
targeted federal funds rate and disciplined deposit pricing amid a
rising rate environment were the key contributors to the Company’s
success in maintaining a solid net interest margin in recent
quarters. The collection of interest on loans previously in
non-accrual status, prepayment fees, and the accumulation of
significant short-term deposit inflows are, and will continue to
be, expected sources of volatility to quarterly net interest income
and net interest margin. Management expects the successful
continuation of its strategies will allow the Company to maintain a
net interest margin at or above its target of 3.50%.
The Company recorded provision for loan and lease
losses totaling $2.5 million in the first quarter of 2018, compared
to $473,000 in the linked quarter and $572,000 in the first quarter
of 2017. Provision for the first quarter of 2018 primarily
reflected net charge-offs in excess of previously established
specific reserves and an increase to the general reserve
commensurate with loan growth. Current quarter net charge-offs of
$2.6 million were primarily related to three legacy SBA loan
relationships that were previously identified as impaired.
Non-interest income totaled $4.7 million, or 22.4%
of total revenue, in the first quarter of 2018, compared to $3.5
million, or 18.7% of total revenue, in the linked quarter and $4.1
million, or 21.4% of total revenue, in the prior year quarter.
Non-interest income in the fourth quarter of 2017 was reduced by
the sale of certain securities at a net loss of $409,000 late in
December 2017, ahead of the 2018 reduction in corporate tax rates.
Excluding the securities loss, non-interest income increased
compared to the linked quarter principally due to the continued
success of the Company’s trust and investment business, increased
commercial loan swap fee income and the gradual expansion of the
Company’s SBA lending business. The increase in non-interest income
compared to the prior year quarter was driven by trust fee income
and commercial loan swap fee income.
Record trust and investment services fee income
continued to boost revenues and remained the Company’s largest
source of non-interest income. Trust and investment services fee
income totaled $1.9 million in the first quarter of 2018,
increasing $159,000, or 9.1%, and $269,000, or 16.5%, compared to
the linked and prior year quarters, respectively. Existing client
relationships and business development efforts remained strong as
trust assets under management and administration reached a record
$1.579 billion at March 31, 2018, up $42.7 million, or 11.1%
annualized, from the prior quarter and $275.3 million, or 21.1%,
from March 31, 2017.
Gains on sale of SBA loans
totaled $269,000 in the first quarter of 2018, compared
to $90,000 in the linked quarter and $360,000 in the first quarter
of 2017.
“We are pleased to see an increase in SBA gains in
the first quarter,” Chambas commented. “While the level of gains
has not yet returned to our desired levels, we are confident in our
near-term pipeline and encouraged by the activity we are seeing
from our expanded team of experienced SBA lenders. We recently
hired three more SBA business development officers in Wisconsin,
and now, in conjunction with the production talent already added in
2017, we believe we have the necessary producers in place to
achieve our profitability goals throughout 2018 and beyond.”
The linked quarter comparison additionally
reflected a $591,000 increase in swap fee income resulting from
commercial loan swap transactions in which the Company offers the
client a floating rate loan and interest rate swap and then offsets
the interest rate risk through an interest rate swap with a
counter-party dealer. Although management believes additional
demand for these types of opportunities will continue in 2018 due
to the market’s assumptions of a rising interest rate environment,
swap fee income may be a source of non-interest income
volatility.
Non-interest expense was $13.9 million for the
first quarter of 2018, compared to $14.9 million for the linked
quarter and $13.6 million in the first quarter of 2017. During the
fourth quarter of 2017, the Company recognized significant
non-operating items including $2.3 million in nonrecurring expense
due to impairment of a federal historic tax credit investment,
which corresponded with the recognition of $3.0 million in tax
credits during the quarter, as well as $199,000 in final
deconversion costs related to Alterra Bank’s core banking
system.
Operating expense, as defined in the Efficiency
Ratio table included in the Non-GAAP Reconciliations at the end of
this release, totaled $14.1 million in the first quarter of 2018,
$12.2 million in the linked quarter and $13.4 million in the first
quarter of 2017.
First quarter 2018 compensation expense increased
by $2.1 million and $388,000 compared to the linked
quarter and prior year quarter, respectively, primarily due to
annual merit increases and return to normalized accruals for the
Company’s annual bonus and profit sharing plans following a
$615,000 reduction to performance-related compensation accruals in
the fourth quarter of 2017. Growth in compensation expense from the
previous year reflects annual merit increases as well as the
addition of several new producers across multiple business lines,
including commercial lending, SBA lending, equipment finance and
wealth management. Management expects to continue strategically
investing in talent as opportunities are presented in 2018 and
beyond.
In the first quarter of 2018, the Company recorded
a net benefit of $295,000 in SBA recourse provision for estimated
losses in the outstanding guaranteed portion of SBA loans sold,
down from a net expense of $145,000 and $6,000 recorded in the
linked and prior year quarters, respectively. The current quarter
benefit was primarily due to limited actual losses incurred during
the past two quarters in connection with sold SBA loans, reducing
the loss rate applied to the outstanding sold portfolio. The total
recourse reserve balance was $2.5 million, or 2.6% of total sold
SBA loans outstanding at March 31, 2018. Changes to SBA
recourse reserves may be a source of non-interest expense
volatility in future quarters, though the magnitude of this
volatility should diminish over time.
The Company’s first quarter 2018 efficiency ratio
was 67.45%, compared to 63.23% for the linked quarter and 70.85%
for the first quarter of 2017. The lower fourth quarter 2017
efficiency ratio was primarily due to a reduction in the Company’s
annual bonus and profit sharing plans commensurate with
performance. Over time, the Company intends to achieve its target
efficiency ratio range of 58-62% through proactive expense
management and revenue growth efforts. These efforts include the
recently completed charter consolidation and core conversion, an
expected normalization of loan workout and remediation costs based
on the completion of SBA platform enhancements, as well as
long-term revenue initiatives, such as efforts to increase
sustainable SBA lending production and to increase commercial
banking market share, particularly in our less mature markets, by
continuing to invest in production talent.
The effective tax rate for the first quarter of
2018 was 18.7%, compared to 29.5% in the first quarter of 2017. The
lower effective tax rate reflects the reduction to the corporate
federal income tax rate from 35% to 21% effective January 1, 2018.
No significant discrete items were recognized during the first
quarter of 2018.
Balance Sheet
Period-end gross loans and leases receivable
totaled $1.563 billion at March 31, 2018, increasing $61.9 million,
or 16.5% annualized, from December 31, 2017 and increasing $82.5
million, or 5.6%, from March 31, 2017.
“The first quarter 2018 increase in loans of nearly
$62 million is the highest first quarter growth in the history of
the Company and the second highest quarter ever,” commented
Chambas. “We experienced loan and lease growth across all segments
and expect to build on this momentum moving forward.” Chambas
added, “While we do not expect to sustain a 16.5% annualized growth
rate for the year, we are pleased with the strength of our
pipelines across the organization.”
Period-end in-market deposits, which consist of all
transaction accounts, money market accounts and non-wholesale
deposits, totaled $1.079 billion, or 65.1% of total bank funding at
March 31, 2018, compared to $1.086 billion, or 68.9%, at December
31, 2017 and $1.104 billion, or 69.5%, at March 31, 2017.
Period-end wholesale bank funds were $577.1 million at March 31,
2018, including brokered certificates of deposit of $282.1 million,
deposits gathered through internet deposit listing services of
$10.5 million and FHLB advances of $284.5 million. Consistent with
the Company’s longstanding funding strategy to manage risk and use
the most efficient and cost effective source of wholesale funds,
management continued to replace maturing wholesale deposits with
fixed rate FHLB advances at various terms to meet its balance sheet
management needs. Management intends to maintain a ratio of
in-market deposits to total bank funding sources in line with the
Company's target range of 60%-70%.
Asset Quality
Total non-performing assets were $21.5 million at
March 31, 2018, decreasing by $5.9 million, or 21.6%, compared to
$27.5 million at December 31, 2017, and decreasing by $17.5
million, or 44.8%, compared to $39.0 million at March 31, 2017. The
decrease from the linked quarter reflects the full payoff of the
previously disclosed $2.8 million asset-based loan that was moved
to impaired status during the second quarter of 2017, as well as
$2.6 million of net charge-offs primarily related to three legacy
SBA loan relationships that were previously identified as impaired.
No significant credits migrated to non-performing status during the
quarter. As a percent of total assets, non-performing assets
measured 1.15% at March 31, 2018, compared to 1.53% and 2.17% at
the end of the linked quarter and first quarter of 2017,
respectively.
Capital Strength
The Company's capital ratios continued to exceed
the highest required regulatory benchmark levels. As of March 31,
2018, total capital to risk-weighted assets was 11.78%, tier 1
capital to risk-weighted assets was 9.33%, tier 1 leverage capital
to adjusted average assets was 9.26% and common equity tier 1
capital to risk-weighted assets was 8.79%. In addition, as of March
31, 2018, tangible common equity to tangible assets was 8.52%.
Quarterly Dividend
As previously announced, during the first quarter
of 2018, the Company's Board of Directors declared a regular
quarterly dividend of $0.14 per share. The dividend was paid on
February 15, 2018 to stockholders of record at the close of
business on February 5, 2018. Measured against first quarter 2018
diluted earnings per share of $0.42, the dividend represents a
33.3% 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 ability to manage growth effectively, including the
successful expansion of our client support, administrative
infrastructure and internal management systems.
- Fluctuations in interest rates and market prices.
- The consequences of continued bank acquisitions and mergers in
our markets, 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.
- Fraud, including client and system failure or breaches of our
network security, including our internet banking activities.
- Failure to comply with the applicable SBA regulations in order
to maintain the eligibility of the guaranteed portion of SBA
loans.
For further information about the factors that could affect the
Company’s future results, please see the Company’s annual report on
Form 10-K for the year ended December 31, 2017 and other filings
with the Securities and Exchange Commission.
|
|
|
CONTACT: |
|
First Business
Financial Services, Inc. |
|
|
Edward G. Sloane,
Jr. |
|
|
Chief Financial
Officer |
|
|
608-232-5970 |
|
|
esloane@firstbusiness.com |
|
|
|
|
|
|
SELECTED
FINANCIAL CONDITION DATA |
|
|
|
|
|
(Unaudited) |
|
As of |
(in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
61,322 |
|
|
$ |
52,539 |
|
|
$ |
73,196 |
|
|
$ |
63,745 |
|
|
$ |
60,899 |
|
Securities
available-for-sale, at fair value |
|
127,961 |
|
|
126,005 |
|
|
131,130 |
|
|
136,834 |
|
|
147,058 |
|
Securities
held-to-maturity, at amortized cost |
|
41,885 |
|
|
37,778 |
|
|
38,873 |
|
|
37,806 |
|
|
38,485 |
|
Loans held for
sale |
|
3,429 |
|
|
2,194 |
|
|
— |
|
|
3,491 |
|
|
3,924 |
|
Loans and leases
receivable |
|
1,563,490 |
|
|
1,501,595 |
|
|
1,466,713 |
|
|
1,458,175 |
|
|
1,480,971 |
|
Allowance for loan and
lease losses |
|
(18,638 |
) |
|
(18,763 |
) |
|
(19,923 |
) |
|
(21,677 |
) |
|
(21,666 |
) |
Loans and
leases receivable, net |
|
1,544,852 |
|
|
1,482,832 |
|
|
1,446,790 |
|
|
1,436,498 |
|
|
1,459,305 |
|
Premises and equipment,
net |
|
3,247 |
|
|
3,156 |
|
|
3,048 |
|
|
2,930 |
|
|
3,955 |
|
Foreclosed
properties |
|
1,484 |
|
|
1,069 |
|
|
2,585 |
|
|
2,585 |
|
|
1,472 |
|
Bank-owned life
insurance |
|
40,614 |
|
|
40,323 |
|
|
39,988 |
|
|
39,674 |
|
|
39,358 |
|
Federal Home Loan Bank
and Federal Reserve Bank stock, at cost |
|
8,650 |
|
|
5,670 |
|
|
5,083 |
|
|
2,815 |
|
|
4,782 |
|
Goodwill and other
intangible assets |
|
12,579 |
|
|
12,652 |
|
|
12,735 |
|
|
12,760 |
|
|
12,774 |
|
Accrued interest
receivable and other assets |
|
32,194 |
|
|
29,848 |
|
|
32,228 |
|
|
29,790 |
|
|
28,578 |
|
Total
assets |
|
$ |
1,878,217 |
|
|
$ |
1,794,066 |
|
|
$ |
1,785,656 |
|
|
$ |
1,768,928 |
|
|
$ |
1,800,590 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
In-market deposits |
|
$ |
1,078,605 |
|
|
$ |
1,086,346 |
|
|
$ |
1,090,524 |
|
|
$ |
1,120,205 |
|
|
$ |
1,104,281 |
|
Wholesale deposits |
|
292,553 |
|
|
307,985 |
|
|
333,200 |
|
|
354,393 |
|
|
388,433 |
|
Total
deposits |
|
1,371,158 |
|
|
1,394,331 |
|
|
1,423,724 |
|
|
1,474,598 |
|
|
1,492,714 |
|
Federal Home Loan Bank
advances and other borrowings |
|
308,912 |
|
|
207,898 |
|
|
167,884 |
|
|
106,395 |
|
|
121,841 |
|
Junior subordinated
notes |
|
10,022 |
|
|
10,019 |
|
|
10,015 |
|
|
10,012 |
|
|
10,008 |
|
Accrued interest
payable and other liabilities |
|
16,645 |
|
|
12,540 |
|
|
17,252 |
|
|
12,689 |
|
|
11,893 |
|
Total
liabilities |
|
1,706,737 |
|
|
1,624,788 |
|
|
1,618,875 |
|
|
1,603,694 |
|
|
1,636,456 |
|
Total
stockholders’ equity |
|
171,480 |
|
|
169,278 |
|
|
166,781 |
|
|
165,234 |
|
|
164,134 |
|
Total
liabilities and stockholders’ equity |
|
$ |
1,878,217 |
|
|
$ |
1,794,066 |
|
|
$ |
1,785,656 |
|
|
$ |
1,768,928 |
|
|
$ |
1,800,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF
INCOME |
|
|
|
|
|
(Unaudited) |
|
As of and for the Three Months
Ended |
(Dollars in
thousands, except per share amounts) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Total interest
income |
|
$ |
20,722 |
|
|
$ |
19,504 |
|
|
$ |
18,634 |
|
|
$ |
19,225 |
|
|
$ |
18,447 |
|
Total interest
expense |
|
4,520 |
|
|
4,146 |
|
|
3,751 |
|
|
3,746 |
|
|
3,559 |
|
Net
interest income |
|
16,202 |
|
|
15,358 |
|
|
14,883 |
|
|
15,479 |
|
|
14,888 |
|
Provision for loan and
lease losses |
|
2,476 |
|
|
473 |
|
|
1,471 |
|
|
3,656 |
|
|
572 |
|
Net
interest income after provision for loan and lease losses |
|
13,726 |
|
|
14,885 |
|
|
13,412 |
|
|
11,823 |
|
|
14,316 |
|
Trust and investment
service fees |
|
1,898 |
|
|
1,739 |
|
|
1,653 |
|
|
1,648 |
|
|
1,629 |
|
Gain on sale of SBA
loans |
|
269 |
|
|
90 |
|
|
606 |
|
|
535 |
|
|
360 |
|
Service charges on
deposits |
|
784 |
|
|
727 |
|
|
756 |
|
|
766 |
|
|
765 |
|
Loan fees |
|
527 |
|
|
463 |
|
|
391 |
|
|
675 |
|
|
458 |
|
Net (loss) gain on sale
of securities |
|
— |
|
|
(409 |
) |
|
5 |
|
|
1 |
|
|
— |
|
Swap fees |
|
633 |
|
|
42 |
|
|
418 |
|
|
250 |
|
|
199 |
|
Other non-interest
income |
|
556 |
|
|
873 |
|
|
510 |
|
|
863 |
|
|
652 |
|
Total
non-interest income |
|
4,667 |
|
|
3,525 |
|
|
4,339 |
|
|
4,738 |
|
|
4,063 |
|
Compensation |
|
9,071 |
|
|
6,953 |
|
|
7,645 |
|
|
8,382 |
|
|
8,683 |
|
Occupancy |
|
529 |
|
|
567 |
|
|
527 |
|
|
519 |
|
|
475 |
|
Professional fees |
|
1,035 |
|
|
1,017 |
|
|
995 |
|
|
1,041 |
|
|
1,010 |
|
Data processing |
|
611 |
|
|
891 |
|
|
592 |
|
|
635 |
|
|
584 |
|
Marketing |
|
333 |
|
|
563 |
|
|
594 |
|
|
582 |
|
|
370 |
|
Equipment |
|
343 |
|
|
342 |
|
|
285 |
|
|
300 |
|
|
283 |
|
Computer software |
|
742 |
|
|
686 |
|
|
715 |
|
|
639 |
|
|
683 |
|
FDIC insurance |
|
299 |
|
|
307 |
|
|
320 |
|
|
381 |
|
|
380 |
|
Collateral liquidation
costs |
|
1 |
|
|
273 |
|
|
371 |
|
|
77 |
|
|
92 |
|
Net gain on foreclosed
properties |
|
— |
|
|
(143 |
) |
|
— |
|
|
— |
|
|
— |
|
Impairment of tax
credit investments |
|
113 |
|
|
2,447 |
|
|
112 |
|
|
112 |
|
|
113 |
|
SBA recourse (benefit)
provision |
|
(295 |
) |
|
145 |
|
|
1,315 |
|
|
774 |
|
|
6 |
|
Other non-interest
expense |
|
1,125 |
|
|
811 |
|
|
760 |
|
|
779 |
|
|
881 |
|
Total
non-interest expense |
|
13,907 |
|
|
14,859 |
|
|
14,231 |
|
|
14,221 |
|
|
13,560 |
|
Income before income
tax expense (benefit) |
|
4,486 |
|
|
3,551 |
|
|
3,520 |
|
|
2,340 |
|
|
4,819 |
|
Income tax expense
(benefit) |
|
837 |
|
|
(486 |
) |
|
936 |
|
|
454 |
|
|
1,422 |
|
Net income |
|
$ |
3,649 |
|
|
$ |
4,037 |
|
|
$ |
2,584 |
|
|
$ |
1,886 |
|
|
$ |
3,397 |
|
|
|
|
|
|
|
|
|
|
|
|
Per common share: |
|
|
|
|
|
|
|
|
|
|
Basic earnings |
|
$ |
0.42 |
|
|
$ |
0.46 |
|
|
$ |
0.30 |
|
|
$ |
0.22 |
|
|
$ |
0.39 |
|
Diluted earnings |
|
0.42 |
|
|
0.46 |
|
|
0.30 |
|
|
0.22 |
|
|
0.39 |
|
Dividends declared |
|
0.14 |
|
|
0.13 |
|
|
0.13 |
|
|
0.13 |
|
|
0.13 |
|
Book value |
|
19.57 |
|
|
19.32 |
|
|
19.04 |
|
|
18.96 |
|
|
18.83 |
|
Tangible book
value |
|
18.13 |
|
|
17.87 |
|
|
17.59 |
|
|
17.49 |
|
|
17.36 |
|
Weighted-average common
shares outstanding(1) |
|
8,633,278 |
|
|
8,631,554 |
|
|
8,621,311 |
|
|
8,601,379 |
|
|
8,600,620 |
|
Weighted-average
diluted common shares outstanding(1) |
|
8,633,278 |
|
|
8,631,554 |
|
|
8,621,311 |
|
|
8,601,379 |
|
|
8,600,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excluding participating securities.
|
|
|
|
|
|
NET INTEREST
INCOME ANALYSIS |
|
|
|
|
|
(Unaudited) |
|
For the Three Months Ended |
(Dollars in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
March 31, 2017 |
|
|
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) |
|
$ |
1,046,751 |
|
|
$ |
12,341 |
|
|
4.72 |
% |
|
$ |
973,929 |
|
|
$ |
11,591 |
|
|
4.76 |
% |
|
$ |
946,110 |
|
|
$ |
10,318 |
|
|
4.36 |
% |
Commercial and
industrial loans(1) |
|
439,491 |
|
|
6,702 |
|
|
6.10 |
% |
|
437,804 |
|
|
6,303 |
|
|
5.76 |
% |
|
451,552 |
|
|
6,595 |
|
|
5.84 |
% |
Direct financing
leases(1) |
|
29,871 |
|
|
303 |
|
|
4.06 |
% |
|
28,476 |
|
|
299 |
|
|
4.20 |
% |
|
30,123 |
|
|
323 |
|
|
4.29 |
% |
Consumer and other
loans(1) |
|
29,361 |
|
|
315 |
|
|
4.29 |
% |
|
27,110 |
|
|
274 |
|
|
4.04 |
% |
|
28,202 |
|
|
286 |
|
|
4.06 |
% |
Total loans and leases
receivable(1) |
|
1,545,474 |
|
|
19,661 |
|
|
5.09 |
% |
|
1,467,319 |
|
|
18,467 |
|
|
5.03 |
% |
|
1,455,987 |
|
|
17,522 |
|
|
4.81 |
% |
Mortgage-related
securities(2) |
|
128,061 |
|
|
687 |
|
|
2.15 |
% |
|
132,067 |
|
|
621 |
|
|
1.88 |
% |
|
145,804 |
|
|
618 |
|
|
1.70 |
% |
Other investment
securities(3) |
|
36,392 |
|
|
169 |
|
|
1.86 |
% |
|
35,956 |
|
|
202 |
|
|
2.25 |
% |
|
38,554 |
|
|
161 |
|
|
1.67 |
% |
FHLB and FRB stock |
|
6,717 |
|
|
49 |
|
|
2.92 |
% |
|
5,572 |
|
|
30 |
|
|
2.15 |
% |
|
3,150 |
|
|
24 |
|
|
3.05 |
% |
Short-term
investments |
|
57,291 |
|
|
156 |
|
|
1.09 |
% |
|
51,303 |
|
|
184 |
|
|
1.43 |
% |
|
51,136 |
|
|
122 |
|
|
0.95 |
% |
Total
interest-earning assets |
|
1,773,935 |
|
|
20,722 |
|
|
4.67 |
% |
|
1,692,217 |
|
|
19,504 |
|
|
4.61 |
% |
|
1,694,631 |
|
|
18,447 |
|
|
4.35 |
% |
Non-interest-earning
assets |
|
88,750 |
|
|
|
|
|
|
|
91,361 |
|
|
|
|
|
|
|
80,254 |
|
|
|
|
|
|
Total assets |
|
$ |
1,862,685 |
|
|
|
|
|
|
|
$ |
1,783,578 |
|
|
|
|
|
|
|
$ |
1,774,885 |
|
|
|
|
|
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction
accounts |
|
$ |
297,730 |
|
|
408 |
|
|
0.55 |
% |
|
$ |
241,421 |
|
|
450 |
|
|
0.75 |
% |
|
$ |
192,297 |
|
|
232 |
|
|
0.48 |
% |
Money market |
|
514,837 |
|
|
851 |
|
|
0.66 |
% |
|
529,195 |
|
|
727 |
|
|
0.55 |
% |
|
627,188 |
|
|
660 |
|
|
0.42 |
% |
Certificates of
deposit |
|
80,904 |
|
|
239 |
|
|
1.18 |
% |
|
58,977 |
|
|
154 |
|
|
1.04 |
% |
|
55,393 |
|
|
132 |
|
|
0.95 |
% |
Wholesale deposits |
|
300,855 |
|
|
1,332 |
|
|
1.77 |
% |
|
325,000 |
|
|
1,435 |
|
|
1.77 |
% |
|
400,672 |
|
|
1,649 |
|
|
1.65 |
% |
Total
interest-bearing deposits |
|
1,194,326 |
|
|
2,830 |
|
|
0.95 |
% |
|
1,154,593 |
|
|
2,766 |
|
|
0.96 |
% |
|
1,275,550 |
|
|
2,673 |
|
|
0.84 |
% |
FHLB advances |
|
217,517 |
|
|
1,003 |
|
|
1.84 |
% |
|
168,451 |
|
|
689 |
|
|
1.64 |
% |
|
60,703 |
|
|
154 |
|
|
1.01 |
% |
Other borrowings |
|
24,403 |
|
|
413 |
|
|
6.77 |
% |
|
24,389 |
|
|
411 |
|
|
6.74 |
% |
|
25,921 |
|
|
458 |
|
|
7.07 |
% |
Junior subordinated
notes |
|
10,020 |
|
|
274 |
|
|
10.94 |
% |
|
10,016 |
|
|
280 |
|
|
11.18 |
% |
|
10,006 |
|
|
274 |
|
|
10.97 |
% |
Total
interest-bearing liabilities |
|
1,446,266 |
|
|
4,520 |
|
|
1.25 |
% |
|
1,357,449 |
|
|
4,146 |
|
|
1.22 |
% |
|
1,372,180 |
|
|
3,559 |
|
|
1.04 |
% |
Non-interest-bearing
demand deposit accounts |
|
228,557 |
|
|
|
|
|
|
|
238,846 |
|
|
|
|
|
|
|
228,015 |
|
|
|
|
|
|
Other
non-interest-bearing liabilities |
|
23,553 |
|
|
|
|
|
|
|
18,632 |
|
|
|
|
|
|
|
11,223 |
|
|
|
|
|
|
Total
liabilities |
|
1,698,376 |
|
|
|
|
|
|
|
1,614,927 |
|
|
|
|
|
|
|
1,611,418 |
|
|
|
|
|
|
Stockholders’
equity |
|
164,309 |
|
|
|
|
|
|
|
168,651 |
|
|
|
|
|
|
|
163,467 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
|
$ |
1,862,685 |
|
|
|
|
|
|
|
$ |
1,783,578 |
|
|
|
|
|
|
|
$ |
1,774,885 |
|
|
|
|
|
|
Net interest
income |
|
|
|
$ |
16,202 |
|
|
|
|
|
|
|
$ |
15,358 |
|
|
|
|
|
|
|
$ |
14,888 |
|
|
|
|
Interest rate
spread |
|
|
|
|
|
3.42 |
% |
|
|
|
|
|
3.39 |
% |
|
|
|
|
|
3.31 |
% |
Net interest-earning
assets |
|
$ |
327,669 |
|
|
|
|
|
|
|
$ |
334,768 |
|
|
|
|
|
|
|
$ |
322,451 |
|
|
|
|
|
|
Net interest
margin |
|
|
|
|
|
3.65 |
% |
|
|
|
|
|
3.63 |
% |
|
|
|
|
|
3.51 |
% |
(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.
|
|
|
|
|
|
PERFORMANCE
RATIOS |
|
|
|
|
For the Three Months Ended |
(Unaudited) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Return on average
assets (annualized) |
|
0.78 |
% |
|
0.91 |
% |
|
0.58 |
% |
|
0.42 |
% |
|
0.77 |
% |
Return on average
equity (annualized) |
|
8.88 |
% |
|
9.57 |
% |
|
6.22 |
% |
|
4.50 |
% |
|
8.31 |
% |
Efficiency ratio |
|
67.45 |
% |
|
63.23 |
% |
|
66.56 |
% |
|
65.39 |
% |
|
70.85 |
% |
Interest rate
spread |
|
3.42 |
% |
|
3.39 |
% |
|
3.32 |
% |
|
3.43 |
% |
|
3.31 |
% |
Net interest
margin |
|
3.65 |
% |
|
3.63 |
% |
|
3.52 |
% |
|
3.64 |
% |
|
3.51 |
% |
Average
interest-earning assets to average interest-bearing
liabilities |
|
122.66 |
% |
|
124.66 |
% |
|
123.39 |
% |
|
123.99 |
% |
|
123.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS |
|
|
|
|
|
(Unaudited) |
|
As of |
(Dollars in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Non-performing loans
and leases |
|
$ |
20,030 |
|
|
$ |
26,389 |
|
|
$ |
33,232 |
|
|
$ |
37,162 |
|
|
$ |
37,519 |
|
Foreclosed
properties |
|
1,484 |
|
|
1,069 |
|
|
2,585 |
|
|
2,585 |
|
|
1,472 |
|
Total
non-performing assets |
|
21,514 |
|
|
27,458 |
|
|
35,817 |
|
|
39,747 |
|
|
38,991 |
|
Performing troubled
debt restructurings |
|
261 |
|
|
332 |
|
|
275 |
|
|
702 |
|
|
702 |
|
Total
impaired assets |
|
$ |
21,775 |
|
|
$ |
27,790 |
|
|
$ |
36,092 |
|
|
$ |
40,449 |
|
|
$ |
39,693 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans
and leases as a percent of total gross loans and leases |
|
1.28 |
% |
|
1.76 |
% |
|
2.26 |
% |
|
2.55 |
% |
|
2.53 |
% |
Non-performing assets
as a percent of total gross loans and leases plus foreclosed
properties |
|
1.37 |
% |
|
1.83 |
% |
|
2.44 |
% |
|
2.72 |
% |
|
2.63 |
% |
Non-performing assets
as a percent of total assets |
|
1.15 |
% |
|
1.53 |
% |
|
2.01 |
% |
|
2.25 |
% |
|
2.17 |
% |
Allowance for loan and
lease losses as a percent of total gross loans and leases |
|
1.19 |
% |
|
1.25 |
% |
|
1.36 |
% |
|
1.49 |
% |
|
1.46 |
% |
Allowance for loan and
lease losses as a percent of non-performing loans and leases |
|
93.05 |
% |
|
71.10 |
% |
|
59.95 |
% |
|
58.33 |
% |
|
57.75 |
% |
|
|
|
|
|
|
|
|
|
|
|
Criticized assets: |
|
|
|
|
|
|
|
|
|
|
Substandard |
|
$ |
30,622 |
|
|
$ |
32,687 |
|
|
$ |
36,747 |
|
|
$ |
39,011 |
|
|
$ |
46,299 |
|
Doubtful |
|
— |
|
|
4,692 |
|
|
5,055 |
|
|
6,658 |
|
|
— |
|
Foreclosed properties |
|
1,484 |
|
|
1,069 |
|
|
2,585 |
|
|
2,585 |
|
|
1,472 |
|
Total
criticized assets |
|
$ |
32,106 |
|
|
$ |
38,448 |
|
|
$ |
44,387 |
|
|
$ |
48,254 |
|
|
$ |
47,771 |
|
Criticized assets to
total assets |
|
1.71 |
% |
|
2.14 |
% |
|
2.49 |
% |
|
2.73 |
% |
|
2.65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHARGE-OFFS
(RECOVERIES) |
|
|
|
|
|
(Unaudited) |
|
For the Three Months Ended |
(Dollars in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Charge-offs |
|
$ |
2,685 |
|
|
$ |
1,643 |
|
|
$ |
3,230 |
|
|
$ |
3,757 |
|
|
$ |
209 |
|
Recoveries |
|
(84 |
) |
|
(11 |
) |
|
(5 |
) |
|
(112 |
) |
|
(391 |
) |
Net charge-offs
(recoveries) |
|
$ |
2,601 |
|
|
$ |
1,632 |
|
|
$ |
3,225 |
|
|
$ |
3,645 |
|
|
$ |
(182 |
) |
Net charge-offs
(recoveries) as a percent of average gross loans and leases
(annualized) |
|
0.67 |
% |
|
0.44 |
% |
|
0.88 |
% |
|
0.99 |
% |
|
(0.05 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS |
|
|
|
|
As of and for the Three Months
Ended |
(Unaudited) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Total capital to
risk-weighted assets |
|
11.78 |
% |
|
11.98 |
% |
|
11.91 |
% |
|
11.91 |
% |
|
11.55 |
% |
Tier I capital to
risk-weighted assets |
|
9.33 |
% |
|
9.45 |
% |
|
9.43 |
% |
|
9.33 |
% |
|
9.16 |
% |
Common equity tier I
capital to risk-weighted assets |
|
8.79 |
% |
|
8.89 |
% |
|
8.86 |
% |
|
8.77 |
% |
|
8.60 |
% |
Tier I capital to
adjusted assets |
|
9.26 |
% |
|
9.54 |
% |
|
9.39 |
% |
|
9.28 |
% |
|
9.26 |
% |
Tangible common equity
to tangible assets |
|
8.52 |
% |
|
8.79 |
% |
|
8.69 |
% |
|
8.68 |
% |
|
8.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOAN AND LEASE
RECEIVABLE COMPOSITION |
|
|
|
|
|
(Unaudited) |
|
As of |
(in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Commercial real
estate: |
|
|
|
|
|
|
|
|
|
|
Commercial real estate - owner occupied |
|
$ |
197,268 |
|
|
$ |
200,387 |
|
|
$ |
182,755 |
|
|
$ |
183,161 |
|
|
$ |
183,016 |
|
Commercial real estate - non-owner occupied |
|
484,151 |
|
|
470,236 |
|
|
461,586 |
|
|
468,778 |
|
|
492,366 |
|
Land
development |
|
46,379 |
|
|
40,154 |
|
|
41,499 |
|
|
46,500 |
|
|
52,663 |
|
Construction |
|
156,020 |
|
|
125,157 |
|
|
115,660 |
|
|
104,515 |
|
|
91,343 |
|
Multi-family |
|
136,098 |
|
|
136,978 |
|
|
125,080 |
|
|
124,488 |
|
|
107,669 |
|
1-4
family |
|
41,866 |
|
|
44,976 |
|
|
40,173 |
|
|
38,922 |
|
|
40,036 |
|
Total
commercial real estate |
|
1,061,782 |
|
|
1,017,888 |
|
|
966,753 |
|
|
966,364 |
|
|
967,093 |
|
Commercial and
industrial |
|
443,005 |
|
|
429,002 |
|
|
447,223 |
|
|
437,955 |
|
|
458,778 |
|
Direct financing
leases, net |
|
31,387 |
|
|
30,787 |
|
|
28,868 |
|
|
29,216 |
|
|
29,330 |
|
Consumer and
other: |
|
|
|
|
|
|
|
|
|
|
Home
equity and second mortgages |
|
8,270 |
|
|
7,262 |
|
|
7,776 |
|
|
7,973 |
|
|
8,237 |
|
Other |
|
20,717 |
|
|
18,099 |
|
|
17,447 |
|
|
17,976 |
|
|
18,859 |
|
Total
consumer and other |
|
28,987 |
|
|
25,361 |
|
|
25,223 |
|
|
25,949 |
|
|
27,096 |
|
Total
gross loans and leases receivable |
|
1,565,161 |
|
|
1,503,038 |
|
|
1,468,067 |
|
|
1,459,484 |
|
|
1,482,297 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Allowance
for loan and lease losses |
|
18,638 |
|
|
18,763 |
|
|
19,923 |
|
|
21,677 |
|
|
21,666 |
|
Deferred
loan fees |
|
1,671 |
|
|
1,443 |
|
|
1,354 |
|
|
1,309 |
|
|
1,326 |
|
Loans and
leases receivable, net |
|
$ |
1,544,852 |
|
|
$ |
1,482,832 |
|
|
$ |
1,446,790 |
|
|
$ |
1,436,498 |
|
|
$ |
1,459,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
COMPOSITION |
|
|
|
|
|
(Unaudited) |
|
As of |
(in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Non-interest-bearing
transaction accounts |
|
$ |
240,422 |
|
|
$ |
277,445 |
|
|
$ |
253,320 |
|
|
$ |
241,577 |
|
|
$ |
227,947 |
|
Interest-bearing
transaction accounts |
|
262,766 |
|
|
217,625 |
|
|
251,355 |
|
|
231,074 |
|
|
205,912 |
|
Money market
accounts |
|
498,310 |
|
|
515,077 |
|
|
527,705 |
|
|
593,487 |
|
|
616,557 |
|
Certificates of
deposit |
|
77,107 |
|
|
76,199 |
|
|
58,144 |
|
|
54,067 |
|
|
53,865 |
|
Wholesale deposits |
|
292,553 |
|
|
307,985 |
|
|
333,200 |
|
|
354,393 |
|
|
388,433 |
|
Total
deposits |
|
$ |
1,371,158 |
|
|
$ |
1,394,331 |
|
|
$ |
1,423,724 |
|
|
$ |
1,474,598 |
|
|
$ |
1,492,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUST ASSETS
COMPOSITION |
|
|
|
|
|
(Unaudited) |
|
As of |
(in
thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Trust assets under
management |
|
$ |
1,393,654 |
|
|
$ |
1,350,025 |
|
|
$ |
1,240,014 |
|
|
$ |
1,164,433 |
|
|
$ |
1,126,835 |
|
Trust assets under
administration |
|
185,463 |
|
|
186,383 |
|
|
176,472 |
|
|
173,931 |
|
|
176,976 |
|
Total
trust assets |
|
$ |
1,579,117 |
|
|
$ |
1,536,408 |
|
|
$ |
1,416,486 |
|
|
$ |
1,338,364 |
|
|
$ |
1,303,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
March 31, 2018 |
|
December 31, 2017 |
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
Common stockholders’
equity |
|
$ |
171,480 |
|
|
$ |
169,278 |
|
|
$ |
166,781 |
|
|
$ |
165,234 |
|
|
$ |
164,134 |
|
Goodwill and other
intangible assets |
|
(12,579 |
) |
|
(12,652 |
) |
|
(12,735 |
) |
|
(12,760 |
) |
|
(12,774 |
) |
Tangible common
equity |
|
$ |
158,901 |
|
|
$ |
156,626 |
|
|
$ |
154,046 |
|
|
$ |
152,474 |
|
|
$ |
151,360 |
|
Common shares
outstanding |
|
8,764,420 |
|
|
8,763,539 |
|
|
8,758,923 |
|
|
8,716,018 |
|
|
8,718,307 |
|
Book value per
share |
|
$ |
19.57 |
|
|
$ |
19.32 |
|
|
$ |
19.04 |
|
|
$ |
18.96 |
|
|
$ |
18.83 |
|
Tangible book value per
share |
|
18.13 |
|
|
17.87 |
|
|
17.59 |
|
|
17.49 |
|
|
17.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
March 31,2018 |
|
December 31,2017 |
|
September 30,2017 |
|
June 30,2017 |
|
March 31,2017 |
Common stockholders’
equity |
|
$ |
171,480 |
|
|
$ |
169,278 |
|
|
$ |
166,781 |
|
|
$ |
165,234 |
|
|
$ |
164,134 |
|
Goodwill and other
intangible assets |
|
(12,579 |
) |
|
(12,652 |
) |
|
(12,735 |
) |
|
(12,760 |
) |
|
(12,774 |
) |
Tangible common
equity |
|
$ |
158,901 |
|
|
$ |
156,626 |
|
|
$ |
154,046 |
|
|
$ |
152,474 |
|
|
$ |
151,360 |
|
Total assets |
|
$ |
1,878,217 |
|
|
$ |
1,794,066 |
|
|
$ |
1,785,656 |
|
|
$ |
1,768,928 |
|
|
$ |
1,800,590 |
|
Goodwill and other
intangible assets |
|
(12,579 |
) |
|
(12,652 |
) |
|
(12,735 |
) |
|
(12,760 |
) |
|
(12,774 |
) |
Tangible assets |
|
$ |
1,865,638 |
|
|
$ |
1,781,414 |
|
|
$ |
1,772,921 |
|
|
$ |
1,756,168 |
|
|
$ |
1,787,816 |
|
Tangible common equity
to tangible assets |
|
8.52 |
% |
|
8.79 |
% |
|
8.69 |
% |
|
8.68 |
% |
|
8.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFICIENCY RATIO
“Efficiency ratio” is a non-GAAP measure representing
non-interest expense excluding the effects of the SBA recourse
provision, impairment of tax credit investments, losses or gains on
foreclosed properties, amortization of other intangible assets and
other discrete items, 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.
The information provided below reconciles the efficiency ratio to
its most comparable GAAP measure.
|
|
|
(Unaudited) |
|
For the Three Months Ended |
(Dollars in
thousands) |
|
March 31,2018 |
|
December 31,2017 |
|
September 30,2017 |
|
June 30,2017 |
|
March 31,2017 |
Total non-interest
expense |
|
$ |
13,907 |
|
|
$ |
14,859 |
|
|
$ |
14,231 |
|
|
$ |
14,221 |
|
|
$ |
13,560 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Net gain
on foreclosed properties |
|
— |
|
|
(143 |
) |
|
— |
|
|
— |
|
|
— |
|
Amortization of other intangible assets |
|
12 |
|
|
13 |
|
|
14 |
|
|
14 |
|
|
14 |
|
SBA
recourse (benefit) provision |
|
(295 |
) |
|
145 |
|
|
1,315 |
|
|
774 |
|
|
6 |
|
Impairment of tax credit investments |
|
113 |
|
|
2,447 |
|
|
112 |
|
|
112 |
|
|
113 |
|
Deconversion fees |
|
— |
|
|
199 |
|
|
— |
|
|
101 |
|
|
— |
|
Total operating
expense |
|
$ |
14,077 |
|
|
$ |
12,198 |
|
|
$ |
12,790 |
|
|
$ |
13,220 |
|
|
$ |
13,427 |
|
Net interest
income |
|
$ |
16,202 |
|
|
$ |
15,358 |
|
|
$ |
14,883 |
|
|
$ |
15,479 |
|
|
$ |
14,888 |
|
Total non-interest
income |
|
4,667 |
|
|
3,525 |
|
|
4,339 |
|
|
4,738 |
|
|
4,063 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Net
(loss) gain on sale of securities |
|
— |
|
|
(409 |
) |
|
5 |
|
|
1 |
|
|
— |
|
Total operating
revenue |
|
$ |
20,869 |
|
|
$ |
19,292 |
|
|
$ |
19,217 |
|
|
$ |
20,216 |
|
|
$ |
18,951 |
|
Efficiency ratio |
|
67.45 |
% |
|
63.23 |
% |
|
66.56 |
% |
|
65.39 |
% |
|
70.85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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