- New loan fundings from our Commercial Banking division were $130 million for the fourth quarter of 2019, an increase from $99 million in the prior quarter
- Average deposits increased $165 million, or 3%, from the prior quarter
- Efficiency ratio was 61.3% for the fourth quarter of 2019
- Nonperforming assets to total assets was 0.07% as of December 31, 2019
- Credit improvement resulted in a negative provision for loan losses of $2.7 million for the fourth quarter
Opus Bank ("Opus") (Nasdaq: OPB) announced today net income of $20.3 million, or $0.53 per diluted share, for the fourth quarter of 2019, compared to net income of $22.0 million, or $0.57 per diluted share, for the third quarter of 2019. Net income for the year ended December 31, 2019 was $61.8 million, or $1.62 per diluted share, compared to net income of $30.9 million, or $0.81 per diluted share, for the year ended December 31, 2018. Net income during the fourth quarter of 2019 included a negative provision for loan losses of $2.7 million, compared to a negative provision for loan losses of $7.7 million in the prior quarter. Net income during the fourth quarter of 2019 also included a pre-tax gain of $851,000 on the sale of a bank operations building, which positively impacted earnings by $0.02 per diluted share.
Additionally, Opus announced today that its Board of Directors has approved the payment of a quarterly cash dividend of $0.11 per common share payable on February 20, 2020 to common stockholders of record as of February 6, 2020, and a common-equivalent payment to its Series A Preferred stockholders.
Earnings Summary |
|
|
|
|
|
| ||||||
(unaudited) |
|
|
|
|
|
| ||||||
|
| For the three months ended | ||||||||||
($ in thousands, except per share data) |
| December 31, 2019 |
| September 30, 2019 |
| December 31, 2018 | ||||||
Net income |
| $ | 20,289 |
|
| $ | 21,998 |
|
| $ | (6,861 | ) |
Earnings per diluted share |
|
| 0.53 |
|
|
| 0.57 |
|
|
| (0.20 | ) |
Return on average assets ("ROAA") |
|
| 1.02 | % |
|
| 1.13 | % |
|
| (0.38 | %) |
Return on average stockholders' equity |
|
| 7.37 | % |
|
| 8.12 | % |
|
| (2.61 | %) |
Return on average tangible common equity1 ("ROATCE") |
|
| 11.54 | % |
|
| 12.88 | % |
|
| (4.24 | %) |
Efficiency ratio1 |
|
| 61.30 | % |
|
| 61.82 | % |
|
| 81.49 | % |
|
|
|
|
|
|
| ||||||
Adjusted Earnings1 |
|
|
|
|
|
| ||||||
Adjusted net income |
| $ | 19,553 |
|
| $ | 22,280 |
|
| $ | 10,167 |
|
Adjusted earnings per diluted share |
|
| 0.51 |
|
|
| 0.58 |
|
|
| 0.27 |
|
Adjusted return on average assets |
|
| 0.98 | % |
|
| 1.14 | % |
|
| 0.56 | % |
Adjusted return on average stockholders' equity |
|
| 7.10 | % |
|
| 8.23 | % |
|
| 3.87 | % |
Adjusted return on average tangible common equity |
|
| 11.12 | % |
|
| 13.04 | % |
|
| 6.28 | % |
Adjusted efficiency ratio |
|
| 61.17 | % |
|
| 61.63 | % |
|
| 65.03 | % |
|
|
|
|
|
|
| ||||||
[1] See reconciliation of non-GAAP financial measures to corresponding GAAP measures on pages 14-16. |
Paul W. Taylor, President and Chief Executive Officer of Opus Bank, stated, "The steps we took during 2019 to reduce expenses and improve Opus’ profitability are beginning to yield positive results, as we reported fourth quarter 2019 earnings per diluted share of $0.53, an ROAA of 1.02% and an efficiency ratio of 61.3%. Noninterest expense decreased 1% from the prior quarter, while continued credit quality improvement resulted in a negative provision for loan losses of $2.7 million for the fourth quarter of 2019."
Mr. Taylor continued, “Our Commercial Banking division increased quarterly loan fundings in the fourth quarter to $130 million, up from $99 million last quarter, and we anticipate continued progress in growing our commercial loan and deposit portfolios. I am confident that profitability and growth will continue to improve in 2020.”
Loans
Average loans decreased $37.3 million, or 0.6%, compared to the prior quarter to $5.8 billion for the fourth quarter of 2019, and increased $620.2 million, or 12.0%, compared to $5.2 billion for the fourth quarter of 2018. On a period-end basis, loans increased $98.6 million, or 1.7%, compared to the prior quarter to $5.9 billion as of December 31, 2019, and increased $735.3 million, or 14.2%, compared to December 31, 2018. The decrease in the average balance of loans compared to the third quarter of 2019 was primarily driven by the timing of new loan fundings, which occurred later in the fourth quarter of 2019.
Loan Balance Roll Forward |
|
|
|
| ||||||||||||||||
(unaudited) | Three Months Ended | |||||||||||||||||||
($ in millions) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
|
|
|
|
|
| |||||||||||||||
Beginning loan balance | $ | 5,802.0 |
| $ | 5,789.0 |
| $ | 5,461.5 |
| $ | 5,165.2 |
| $ | 5,159.9 |
| |||||
New loan fundings |
| 409.5 |
|
| 406.1 |
|
| 703.6 |
|
| 538.0 |
|
| 412.3 |
| |||||
Loan payoffs |
| (271.7 | ) |
| (300.0 | ) |
| (192.8 | ) |
| (173.7 | ) |
| (265.3 | ) | |||||
Other1 |
| (39.3 | ) |
| (93.1 | ) |
| (183.3 | ) |
| (68.0 | ) |
| (141.7 | ) | |||||
Ending loan balance | $ | 5,900.5 |
| $ | 5,802.0 |
| $ | 5,789.0 |
| $ | 5,461.5 |
| $ | 5,165.2 |
| |||||
|
|
|
|
|
| |||||||||||||||
[1] Includes amortization, planned exits, charge-offs, and transfers to held-for-sale |
New loan fundings in the fourth quarter of 2019 totaled $409.5 million, an increase of $3.4 million, or 0.8%, from the third quarter of 2019 and a decrease of $2.8 million, or 0.7%, from the fourth quarter of 2018. New loan fundings for the year ended December 31, 2019 totaled $2.1 billion, compared to $1.6 billion for the year ended December 31, 2018. Our Commercial Banking division funded $129.9 million of new loans during the fourth quarter of 2019 and $405.0 million during the year ended December 31, 2019. Loan growth during the fourth quarter of 2019 was also impacted by loan payoffs of $271.7 million, compared to payoffs of $300.0 million in the third quarter of 2019 and $265.3 million in the fourth quarter of 2018.
Investment Securities
The average balance of investment securities decreased $21.4 million, or 2.0%, during the fourth quarter of 2019 to $1.0 billion compared to the prior quarter, and decreased $57.8 million, or 5.4%, compared to the fourth quarter of 2018. On a period-end basis, investment securities increased $29.3 million, or 2.9%, from the prior quarter to $1.0 billion as of December 31, 2019, and decreased $42.0 million, or 3.9%, compared to December 31, 2018. The decrease in the average balance of investment securities compared to the third quarter of 2019 was primarily driven by the timing of sales that took place at the end of the third quarter, offset by the purchase of $65.0 million of investment securities during the fourth quarter of 2019.
Deposits and Borrowings
Average deposits increased $164.8 million, or 2.6%, during the fourth quarter of 2019 to $6.4 billion compared to the prior quarter, and increased $385.3 million, or 6.4%, compared to the fourth quarter of 2018. Deposit growth during the fourth quarter of 2019 was primarily driven by an increase of $73.5 million, or 2.9%, in average interest-bearing demand and an increase of $113.1 million, or 5.5%, in average money market and savings deposits, primarily driven by our Commercial Banking division and PENSCO. The average balance of noninterest-bearing demand deposits increased $6.1 million, or 0.8%, compared to the prior quarter, while the average balance of certificates of deposit decreased $27.8 million, or 3.2%. Noninterest-bearing demand deposits measured 11.9% of total deposits as of December 31, 2019, compared to 12.2% of total deposits as of September 30, 2019.
Our loan to deposit ratio measured 91.2% as of December 31, 2019, compared to 92.5% as of September 30, 2019 and 86.8% as of December 31, 2018.
The average balance of Federal Home Loan Bank (FHLB) advances decreased 8.2% in the fourth quarter of 2019 to $200.0 million, compared to $217.9 million in the third quarter of 2019, and increased from $33,000 in the fourth quarter of 2018.
Net Interest Income (Fully Taxable-Equivalent)
Net interest income was $50.1 million for the fourth quarter of 2019, compared to $50.0 million and $50.8 million in the third quarter of 2019 and fourth quarter of 2018, respectively. Interest income from loans decreased 3.1% to $60.2 million for the fourth quarter of 2019, compared to $62.1 million for the third quarter of 2019, driven primarily by the difference in rate between new loan fundings and loan payoffs, the impact of loan repricing during the quarter, lower average loan balances, and a lower net benefit from prepayments. Interest income from investment securities and interest-earning cash increased 11.9% to $9.4 million for the fourth quarter of 2019, driven primarily by higher average cash balances and lower premium amortization compared to the prior quarter.
Interest expense decreased 4.9% to $19.5 million for the fourth quarter of 2019, compared to $20.5 million for the third quarter of 2019, and increased 39.4% compared to $14.0 million for the fourth quarter of 2018. The decrease in interest expense from the prior quarter was driven primarily by a 5.2% decrease in interest expense on deposits to $16.3 million for the fourth quarter of 2019, due to a 9 basis point lower average rate on interest-bearing deposits that was partially offset by higher average balances of deposits. Interest expense on FHLB advances decreased 8.8% compared to the prior quarter to $1.2 million for the fourth quarter of 2019, due to lower average balances.
Net Interest Margin (Fully Taxable-Equivalent)
Net interest margin (NIM) decreased six basis points to 2.76% in the fourth quarter of 2019 from 2.82% in the third quarter of 2019, and decreased 31 basis points from 3.07% in the fourth quarter of 2018, as the current interest rate environment continues to impact our NIM. The linked-quarter change was primarily driven by an 11 basis point decrease in the yield on loans to 4.13%, partially offset by a nine basis point decrease in our cost of interest-bearing deposits to 1.15%.
Noninterest Income
Noninterest income increased 6.1% to $13.9 million in the fourth quarter of 2019, compared to $13.1 million in the third quarter of 2019, and increased 309.9% compared to $3.4 million in the fourth quarter of 2018. Noninterest income during the fourth quarter of 2019 included an $851,000 gain on the sale of assets related to the disposition of a bank operations building during the quarter. On an adjusted basis, excluding the above mentioned gain and $220,000 in gains on the sale of securities, loans, and other assets during the third quarter of 2019, noninterest income increased $162,000, or 1.3%, from the prior quarter. Noninterest income during the fourth quarter of 2019 also included $7.3 million of trust administrative fees, $1.5 million from escrow and exchange fees, and $1.4 million of treasury management and deposit account fees. Noninterest income during the fourth quarter of 2018 included a $9.9 million loss on the sale of investment securities related to the repositioning of our securities portfolio.
Noninterest Expense
Noninterest expense decreased 1.0% to $39.7 million for the fourth quarter of 2019, compared to $40.1 million for the third quarter of 2019, and decreased 26.1% compared to $53.7 million for the fourth quarter of 2018. During the fourth quarter of 2019, we utilized $461,000 of the FDIC small bank assessment credit, compared to $692,000 in the third quarter of 2019. Noninterest expense during the fourth quarter of 2018 included $10.5 million of expenses related to restructuring charges and a cost reduction initiative.
Our efficiency ratio for the fourth quarter of 2019 was 61.3%, or 61.2% on an adjusted basis, compared to 61.8% for the third quarter of 2019, or 61.6% on an adjusted basis.
Income Tax Expense
We recorded an income tax expense of $6.2 million in the fourth quarter of 2019, compared to an income tax expense of $8.3 million in the third quarter of 2019, and an income tax benefit of $654,000 in the fourth quarter of 2018. Our effective tax rate for the fourth quarter of 2019 was 23.3%, compared to 27.3% for the third quarter of 2019.
Asset Quality
Total nonperforming assets decreased 19.5% to $6.0 million as of December 31, 2019, compared to $7.4 million as of September 30, 2019 and $28.0 million as of December 31, 2018. Our ratio of nonperforming assets to total assets decreased to 0.07% as of December 31, 2019, compared to 0.10% and 0.39% as of September 30, 2019 and December 31, 2018, respectively. Total criticized loans decreased $27.9 million, or 27.5%, to $73.5 million as of December 31, 2019, compared to $101.4 million as of September 30, 2019. Classified loans decreased $35.2 million in the fourth quarter of 2019, while special mention loans increased $7.3 million from the prior quarter.
Our allowance for loan losses was $40.8 million, or 0.69% of our total loan portfolio, as of December 31, 2019, compared to $45.2 million, or 0.78% of total loans, as of September 30, 2019 and $54.7 million, or 1.06% of total loans, as of December 31, 2018. Net charge-offs during the fourth quarter of 2019 were $1.6 million, or 0.11% of average loans annualized, compared to net charge-offs of $4.9 million, or 0.33% of average loans annualized, for the third quarter of 2019, and $12.0 million, or 0.92% of average loans annualized, for the fourth quarter of 2018.
The ratio of the allowance for loan losses to total nonperforming assets was 683.7% as of December 31, 2019, compared to 608.6% as of September 30, 2019 and 195.1% as of December 31, 2018.
We recorded a negative provision for loan losses of $2.7 million in the fourth quarter of 2019, compared to a negative provision for loan losses of $7.7 million in the third quarter of 2019 and a provision expense of $7.7 million in the fourth quarter of 2018. The negative provision expense during the fourth quarter of 2019 was primarily driven by loan exits, partially offset by net charge-offs and new loan production.
Capital
As of December 31, 2019, Opus exceeded all minimum regulatory capital requirements under Basel III and was considered to be a "well-capitalized" financial institution, as summarized in the table below:
Capital Ratios |
| As of |
| Well-Capitalized | ||||
(unaudited) |
| December 31, |
| September 30, |
| December 31, |
| |
Tier 1 leverage ratio |
| 9.70% |
| 9.70% |
| 9.69% |
| 5.00% |
Common Equity Tier 1 ratio |
| 11.68% |
| 11.71% |
| 11.40% |
| 6.50% |
Tier 1 risk-based capital ratio |
| 12.17% |
| 12.20% |
| 11.92% |
| 8.00% |
Total risk-based capital ratio |
| 15.08% |
| 15.26% |
| 15.29% |
| 10.00% |
Tangible equity to tangible assets ratio |
| 9.62% |
| 9.67% |
| 9.84% |
| NA |
Tangible common equity to tangible assets ratio |
| 9.24% |
| 9.28% |
| 9.41% |
| NA |
|
|
|
|
|
|
|
|
|
[1] Regulatory capital ratios are preliminary until filing of our December 31, 2019 FDIC call report. |
Stockholders’ equity totaled $1.1 billion as of December 31, 2019 and increased $16.1 million and $58.3 million compared to September 30, 2019 and December 31, 2018, respectively. Our tangible book value per common share increased $0.44 to $19.38 as of December 31, 2019, compared to $18.94 as of September 30, 2019, and increased $1.61 compared to $17.77 as of December 31, 2018.
Conference Call and Webcast Details
Date: Monday, January 27, 2020
Time: 8:00 a.m. PT (11:00 a.m. ET)
Phone Number: (888) 317-6016
Conference ID: 9367183
Webcast URL: https://services.choruscall.com/links/opb200127.html
Analysts, investors, and the general public may listen to a discussion of Opus’ fourth quarter 2019 and annual performance by using the phone number or webcast link listed above. It is recommended that participants dial into the conference call or log into the webcast approximately 10 minutes prior to the call.
Replay Information: For those who are not able to listen to the conference call, an archive recording will be available beginning approximately one hour following the completion of the call. To listen to the call replay, dial (877) 344-7529, or for international callers dial (412) 317-0088. The access code for either replay number is 10137350. The call replay will be available through February 27, 2020.
About Opus Bank
Opus Bank is an FDIC insured California-chartered commercial bank with $8.0 billion of total assets, $5.9 billion of total loans, and $6.5 billion in total deposits as of December 31, 2019. Opus Bank provides commercial and retail banking products and solutions to its clients in western markets from its headquarters in Irvine, California and through 46 banking offices, including 28 in California, 16 in the Seattle/Puget Sound region in Washington, one in the Phoenix metropolitan area of Arizona and one in Portland, Oregon. Opus Bank offers a suite of treasury and cash management and depository solutions, and a wide range of loan products, including commercial, healthcare, media and entertainment, corporate finance, multifamily residential, commercial real estate and structured finance, and is an SBA preferred lender. Opus Bank offers commercial escrow services and facilitates 1031 Exchange transactions through its Escrow and Exchange divisions. Additionally, Opus Bank’s wholly-owned subsidiary, PENSCO Trust Company, has approximately $14 billion of custodial IRA assets and approximately 46,000 client accounts, which are comprised of self-directed investors, financial institutions, capital raisers and financial advisors. Opus Bank is an Equal Housing Lender. For additional information about Opus Bank, please visit our website: www.opusbank.com.
Forward Looking Statements
This release and the aforementioned conference call and webcast includes forward-looking statements related to Opus’ plans, beliefs and goals. Forward-looking statements are neither historical facts nor assurances of future performance. Opus generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this release and the aforementioned conference call and webcast are based on the historical performance of Opus and its subsidiaries or on its current plans, beliefs, estimates, expectations and goals, including without limitation: our expectations of continued progress in growing our commercial loan and deposit portfolios and our belief that profitability and growth will improve in 2020. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity that could cause actual results to differ materially from those indicated by the forward-looking statements, including, without limitation: market and economic conditions, changes in interest rates, our liquidity position, the management of our growth, the risks associated with our loan portfolio, risks that our expected efficiencies and savings from our expense reduction initiatives will be less than anticipated, local economic conditions affecting retail and commercial real estate, our geographic concentration in the western region of the United States, competition within the industry, dependence on key personnel, government legislation and regulation, the risks associated with any future acquisitions, the effect of natural disasters, risks related to our technology and information systems, and the management of our operating expenses, including the effectiveness of certain strategic cost reduction initiatives. For a discussion of these and other risks and uncertainties, see Opus' filings with the Federal Deposit Insurance Corporation, including, but not limited to, the risk factors in Opus' Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation on February 28, 2019, as such risk factors may be amended, supplemented or superseded from time to time by other reports Opus files with the Federal Deposit Insurance Corporation. If one or more of these or other risks or uncertainties materialize, or if Opus’ underlying assumptions prove to be incorrect, Opus’ actual results may vary materially from those indicated in these statements. These filings are available on the Investor Relations page of Opus' website at: investor.opusbank.com.
Opus undertakes no obligation to revise or publicly release any revision to these forward-looking statements, whether as a result of new information, future developments or otherwise.
Consolidated Statement of Income |
|
|
| |||||||||||||||||
(unaudited) | Three Months Ended | Year Ended | ||||||||||||||||||
($ in thousands, except per share amounts) | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
Interest income: |
|
|
|
|
| |||||||||||||||
Loans | $ | 59,694 |
| $ | 61,655 |
| $ | 55,701 |
| $ | 239,513 |
| $ | 218,255 |
| |||||
Investment securities |
| 7,726 |
|
| 7,471 |
|
| 6,931 |
|
| 32,134 |
|
| 22,353 |
| |||||
Due from banks |
| 1,637 |
|
| 900 |
|
| 1,758 |
|
| 5,308 |
|
| 6,148 |
| |||||
Total interest income |
| 69,057 |
|
| 70,026 |
|
| 64,390 |
|
| 276,955 |
|
| 246,756 |
| |||||
Interest expense: |
|
|
|
|
| |||||||||||||||
Deposits |
| 16,334 |
|
| 17,225 |
|
| 12,038 |
|
| 63,346 |
|
| 38,163 |
| |||||
Federal Home Loan Bank advances |
| 1,200 |
|
| 1,316 |
| — |
| 5,437 |
|
| 374 |
| |||||||
Subordinated debt |
| 1,923 |
|
| 1,923 |
|
| 1,923 |
|
| 7,690 |
|
| 7,690 |
| |||||
Total interest expense |
| 19,457 |
|
| 20,464 |
|
| 13,961 |
|
| 76,473 |
|
| 46,227 |
| |||||
Net interest income |
| 49,600 |
|
| 49,562 |
|
| 50,429 |
|
| 200,482 |
|
| 200,529 |
| |||||
Provision (negative provision) for loan losses |
| (2,685 | ) |
| (7,698 | ) |
| 7,659 |
|
| (4,905 | ) |
| 19,601 |
| |||||
Net interest income after provision |
| 52,285 |
|
| 57,260 |
|
| 42,770 |
|
| 205,387 |
|
| 180,928 |
| |||||
Noninterest income: |
|
|
|
|
| |||||||||||||||
Fees and service charges on deposit |
| 1,441 |
|
| 1,483 |
|
| 1,615 |
|
| 5,868 |
|
| 6,855 |
| |||||
Escrow and exchange fees |
| 1,545 |
|
| 1,623 |
|
| 1,422 |
|
| 6,027 |
|
| 5,829 |
| |||||
Trust administrative fees |
| 7,308 |
|
| 7,244 |
|
| 6,800 |
|
| 28,065 |
|
| 27,503 |
| |||||
Gain (loss) on sale of loans | — |
| 218 |
|
| 147 |
|
| 52 |
|
| (22 | ) | |||||||
Gain (loss) on sale of assets |
| 851 |
|
| 1 |
|
| (137 | ) |
| 852 |
|
| (137 | ) | |||||
Gain from OREO and other repossessed assets | — | — | — | — |
| 203 |
| |||||||||||||
Gain (loss) on sale of securities | — |
| 1 |
|
| (9,892 | ) |
| 120 |
|
| (9,710 | ) | |||||||
Bank-owned life insurance, net |
| 1,252 |
|
| 1,014 |
|
| 958 |
|
| 4,239 |
|
| 4,104 |
| |||||
Other income |
| 1,465 |
|
| 1,485 |
|
| 2,469 |
|
| 4,803 |
|
| 6,454 |
| |||||
Total noninterest income |
| 13,862 |
|
| 13,069 |
|
| 3,382 |
|
| 50,026 |
|
| 41,079 |
| |||||
Noninterest expense: |
|
|
|
|
| |||||||||||||||
Compensation and benefits |
| 23,557 |
|
| 23,316 |
|
| 33,042 |
|
| 102,843 |
|
| 111,325 |
| |||||
Professional services |
| 2,048 |
|
| 2,101 |
|
| 5,045 |
|
| 7,465 |
|
| 11,869 |
| |||||
Occupancy expense |
| 3,917 |
|
| 3,835 |
|
| 4,023 |
|
| 15,163 |
|
| 15,545 |
| |||||
Depreciation and amortization |
| 1,712 |
|
| 1,713 |
|
| 1,700 |
|
| 6,961 |
|
| 6,714 |
| |||||
Deposit insurance and regulatory assessments |
| 60 |
|
| 122 |
|
| 914 |
|
| 1,474 |
|
| 3,981 |
| |||||
Insurance expense |
| 341 |
|
| 334 |
|
| 317 |
|
| 1,354 |
|
| 1,327 |
| |||||
Data processing |
| 1,043 |
|
| 948 |
|
| 815 |
|
| 3,612 |
|
| 1,803 |
| |||||
Software licenses and maintenance |
| 1,253 |
|
| 1,197 |
|
| 1,293 |
|
| 4,969 |
|
| 4,939 |
| |||||
Office services |
| 1,641 |
|
| 1,720 |
|
| 1,821 |
|
| 6,679 |
|
| 7,189 |
| |||||
Amortization of other intangible assets |
| 1,009 |
|
| 1,211 |
|
| 1,437 |
|
| 5,050 |
|
| 5,875 |
| |||||
Advertising and marketing |
| 897 |
|
| 838 |
|
| 824 |
|
| 3,292 |
|
| 3,533 |
| |||||
Other expenses |
| 2,200 |
|
| 2,737 |
|
| 2,436 |
|
| 12,616 |
|
| 10,450 |
| |||||
Total noninterest expense |
| 39,678 |
|
| 40,072 |
|
| 53,667 |
|
| 171,478 |
|
| 184,550 |
| |||||
Income (loss) before income tax |
| 26,469 |
|
| 30,257 |
|
| (7,515 | ) |
| 83,935 |
|
| 37,457 |
| |||||
Income tax expense (benefit) |
| 6,180 |
|
| 8,259 |
|
| (654 | ) |
| 22,101 |
|
| 6,539 |
| |||||
Net income (loss) | $ | 20,289 |
| $ | 21,998 |
| $ | (6,861 | ) | $ | 61,834 |
| $ | 30,918 |
| |||||
Basic earnings (loss) per common share | $ | 0.54 |
| $ | 0.58 |
| $ | (0.20 | ) | $ | 1.64 |
| $ | 0.82 |
| |||||
Diluted earnings (loss) per common share |
| 0.53 |
|
| 0.57 |
|
| (0.20 | ) |
| 1.62 |
|
| 0.81 |
| |||||
Weighted average shares - basic |
| 36,324,267 |
|
| 36,282,166 |
|
| 36,059,713 |
|
| 36,262,559 |
|
| 36,028,025 |
| |||||
Weighted average shares - diluted |
| 38,299,878 |
|
| 38,230,784 |
|
| 36,059,713 |
|
| 38,242,481 |
|
| 38,270,650 |
|
Consolidated Balance Sheets |
|
|
| |||||||||
(unaudited) | As of | |||||||||||
($ in thousands, except share amounts) | December 31, | September 30, | December 31, | |||||||||
|
| |||||||||||
Assets |
|
|
| |||||||||
Cash and due from banks | $ | 30,451 |
| $ | 43,295 |
| $ | 39,860 |
| |||
Due from banks – interest-bearing |
| 317,190 |
|
| 243,051 |
|
| 214,776 |
| |||
Investment securities available-for-sale, at fair value |
| 1,039,596 |
|
| 1,010,253 |
|
| 1,081,546 |
| |||
Loans |
| 5,900,520 |
|
| 5,801,956 |
|
| 5,165,210 |
| |||
Less allowance for loan losses |
| (40,844 | ) |
| (45,156 | ) |
| (54,664 | ) | |||
Loans, net |
| 5,859,676 |
|
| 5,756,800 |
|
| 5,110,546 |
| |||
Premises and equipment, net |
| 21,339 |
|
| 23,811 |
|
| 23,863 |
| |||
Goodwill |
| 331,832 |
|
| 331,832 |
|
| 331,832 |
| |||
Other intangible assets, net |
| 33,875 |
|
| 34,884 |
|
| 38,926 |
| |||
Deferred tax assets, net |
| 8,107 |
|
| 1,595 |
|
| 24,171 |
| |||
Cash surrender value of bank owned life insurance, net |
| 190,435 |
|
| 157,382 |
|
| 154,271 |
| |||
Accrued interest receivable |
| 25,690 |
|
| 25,109 |
|
| 23,260 |
| |||
Federal Home Loan Bank stock |
| 17,250 |
|
| 17,250 |
|
| 17,250 |
| |||
Other assets |
| 116,959 |
|
| 126,081 |
|
| 120,602 |
| |||
Total assets | $ | 7,992,400 |
| $ | 7,771,343 |
| $ | 7,180,903 |
| |||
Liabilities and Stockholders’ Equity |
|
|
| |||||||||
Deposits: |
|
|
| |||||||||
Noninterest-bearing demand | $ | 768,936 |
| $ | 763,038 |
| $ | 771,141 |
| |||
Interest-bearing demand |
| 2,680,793 |
|
| 2,516,614 |
|
| 2,507,605 |
| |||
Money market and savings |
| 2,196,603 |
|
| 2,129,341 |
|
| 1,995,684 |
| |||
Time deposits |
| 827,261 |
|
| 860,808 |
|
| 677,458 |
| |||
Total deposits |
| 6,473,593 |
|
| 6,269,801 |
|
| 5,951,888 |
| |||
Federal Home Loan Bank advances |
| 200,000 |
|
| 200,000 |
| — | |||||
Subordinated debt, net |
| 133,275 |
|
| 133,209 |
|
| 133,010 |
| |||
Accrued interest payable |
| 4,175 |
|
| 2,408 |
|
| 4,032 |
| |||
Other liabilities |
| 82,210 |
|
| 82,882 |
|
| 51,160 |
| |||
Total liabilities |
| 6,893,253 |
|
| 6,688,300 |
|
| 6,140,090 |
| |||
Stockholders’ equity: |
|
|
| |||||||||
Preferred stock: |
|
|
| |||||||||
Authorized 200,000,000 shares; issued 31,111 and 31,111 and 31,111 shares, respectively |
| 29,110 |
|
| 29,110 |
|
| 29,110 |
| |||
Common stock, no par value per share: |
|
|
| |||||||||
Authorized 200,000,000 shares; issued 37,571,545 and 37,394,513 and 36,637,870 shares, respectively |
| 700,220 |
|
| 700,220 |
|
| 700,220 |
| |||
Additional paid-in capital |
| 87,702 |
|
| 83,966 |
|
| 69,954 |
| |||
Retained earnings |
| 305,399 |
|
| 289,303 |
|
| 260,304 |
| |||
Treasury stock, at cost; 1,223,930 and 1,107,915 and 577,495 shares, respectively |
| (29,611 | ) |
| (26,638 | ) |
| (14,983 | ) | |||
Accumulated other comprehensive income (loss) |
| 6,327 |
|
| 7,082 |
|
| (3,792 | ) | |||
Total stockholders’ equity |
| 1,099,147 |
|
| 1,083,043 |
|
| 1,040,813 |
| |||
Total liabilities and stockholders’ equity | $ | 7,992,400 |
| $ | 7,771,343 |
| $ | 7,180,903 |
|
Selected Financial Data |
|
|
|
|
|
|
|
|
|
| |||||
|
| As of or for the three months ended |
| As of or for the year ended | |||||||||||
(unaudited) |
| December 31, |
| September 30, |
| December 31, |
| December 31, |
| December 31, | |||||
Yield on interest-earning assets 1 |
| 3.83 | % |
| 3.97 | % |
| 3.92 | % |
| 3.99 | % |
| 3.79 | % |
Net interest margin 1 |
| 2.76 |
|
| 2.82 |
|
| 3.07 |
|
| 2.90 |
|
| 3.08 |
|
Cost of deposits 2 |
| 1.01 |
|
| 1.09 |
|
| 0.79 |
|
| 1.02 |
|
| 0.64 |
|
Cost of funds 3 |
| 1.14 |
|
| 1.23 |
|
| 0.90 |
|
| 1.17 |
|
| 0.75 |
|
Noninterest expense to average assets |
| 1.99 |
|
| 2.05 |
|
| 2.93 |
|
| 2.23 |
|
| 2.54 |
|
Loans to deposits |
| 91.15 |
|
| 92.54 |
|
| 86.78 |
|
| 91.15 |
|
| 86.78 |
|
- Yield on interest-earning assets and net interest margin are presented on a tax equivalent basis using the federal effective tax rate.
- Calculated as interest expense on deposits divided by total average deposits.
- Calculated as total interest expense divided by average total deposits, FHLB advances, and subordinated debt.
Loan Fundings |
|
|
|
|
| ||||||||||||
(unaudited) | Three Months Ended | Year Ended | |||||||||||||||
($ in thousands) | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
Real estate mortgage loans: |
|
|
|
|
| ||||||||||||
Multifamily residential | $ | 216,651 | $ | 256,235 | $ |
|
| 252,315 | $ | 1,469,521 | $ | 924,629 | |||||
Commercial real estate |
| 88,139 |
| 74,159 |
| 66,931 |
| 284,610 |
| 203,017 | |||||||
Construction and land loans |
| 4,154 |
| 6,670 |
| 5,622 |
| 24,367 |
| 28,538 | |||||||
Commercial business loans |
| 93,939 |
| 66,744 |
| 87,390 |
| 266,287 |
| 427,636 | |||||||
Small Business Administration loans |
| 6,594 |
| 2,269 |
| 43 |
| 12,341 |
| 12,040 | |||||||
Total loan fundings | $ | 409,477 | $ | 406,077 | $ |
| 412,301 | $ | 2,057,126 | $ | 1,595,860 |
Composition of Loan Portfolio | As of | |||||||||||||||||
(unaudited) | December 31, | September 30, | December 31, | |||||||||||||||
($ in thousands) | Amount | % of | Amount | % of | Amount | % of | ||||||||||||
Real estate mortgage loans: |
|
|
|
|
|
| ||||||||||||
Single-family residential | $ | 49,949 | 0.9 | % | $ | 51,361 | 0.9 | % | $ | 61,913 | 1.2 | % | ||||||
Multifamily residential |
| 3,784,461 | 64.1 |
|
| 3,699,824 | 63.8 |
|
| 2,931,397 | 56.7 |
| ||||||
Commercial real estate: |
|
|
|
|
|
| ||||||||||||
Owner occupied |
| 279,744 | 4.7 |
|
| 279,262 | 4.8 |
|
| 164,988 | 3.2 |
| ||||||
Non-owner occupied |
| 792,824 | 13.4 |
|
| 829,718 | 14.3 |
|
| 899,375 | 17.4 |
| ||||||
Construction and land loans |
| 55,739 | 0.9 |
|
| 51,714 | 0.9 |
|
| 70,557 | 1.4 |
| ||||||
Commercial business loans |
| 901,006 | 15.3 |
|
| 856,364 | 14.7 |
|
| 992,743 | 19.2 |
| ||||||
Small Business Administration loans |
| 33,641 | 0.6 |
|
| 29,958 | 0.5 |
|
| 39,811 | 0.8 |
| ||||||
Consumer and other loans |
| 3,156 | 0.1 |
|
| 3,755 | 0.1 |
|
| 4,426 | 0.1 |
| ||||||
Total loans | $ | 5,900,520 | 100.0 | % | $ | 5,801,956 | 100.0 | % | $ | 5,165,210 | 100.0 | % |
Consolidated average balance sheet, interest, yield and rates |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
| For the three months ended |
| For the three months ended |
| For the three months ended | |||||||||||||||||||||||||||
(unaudited) |
| 2019 |
| 2019 |
| 2018 | |||||||||||||||||||||||||||
($ in thousands) |
| Average |
| Interest (1) |
| Yields/ |
| Average |
| Interest (1) |
| Yields/ |
| Average |
| Interest (1) |
| Yields/ | |||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Due from banks |
| $ | 406,763 |
|
| $ | 1,637 |
|
| 1.60 | % |
| $ | 180,479 |
|
| $ | 900 |
|
| 1.98 | % |
| $ | 319,456 |
|
| $ | 1,758 |
|
| 2.18 | % |
Investment securities |
| 1,022,444 |
|
| 7,726 |
|
| 3.00 |
|
| 1,043,830 |
| 7,471 |
|
| 2.84 |
|
| 1,080,262 |
|
| 6,931 |
|
| 2.55 |
| |||||||
Loans |
| $ | 5,779,765 |
|
| $ | 60,167 |
|
| 4.13 |
|
| $ | 5,817,041 |
|
| $ | 62,109 |
|
| 4.24 |
|
| $ | 5,159,541 |
|
| $ | 56,102 |
|
| 4.31 |
|
Total interest-earning assets |
| 7,208,972 |
|
| $ | 69,530 |
|
| 3.83 |
|
| 7,041,350 |
| $ | 70,480 |
|
| 3.97 |
|
| 6,559,259 |
|
| $ | 64,791 |
|
| 3.92 |
| ||||
Noninterest-earning assets |
| 711,169 |
|
|
|
|
|
| 710,047 |
|
|
|
|
|
| 699,059 |
|
|
|
|
| ||||||||||||
Total assets |
| $ | 7,920,141 |
|
|
|
|
|
| $ | 7,751,397 |
|
|
|
|
|
| $ | 7,258,318 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Liabilities and stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest-bearing demand |
| $ | 2,630,401 |
|
| $ | 3,005 |
|
| 0.45 | % |
| $ | 2,556,920 |
|
| $ | 3,333 |
|
| 0.52 | % |
| $ | 2,509,049 |
|
| $ | 2,520 |
|
| 0.40 | % |
Money market and savings |
| 2,177,402 |
|
| 8,540 |
|
| 1.56 |
|
| 2,064,316 |
|
| 8,843 |
|
| 1.70 |
|
| 2,030,476 |
|
| 6,232 |
|
| 1.22 |
| ||||||
Time deposits |
| 842,160 |
|
| 4,789 |
|
| 2.26 |
|
| 869,974 |
|
| 5,049 |
|
| 2.30 |
|
| 668,984 |
|
| 3,286 |
|
| 1.95 |
| ||||||
Total interest-bearing deposits |
| $ | 5,649,963 |
|
| $ | 16,334 |
|
| 1.15 |
|
| $ | 5,491,210 |
|
| $ | 17,224 |
|
| 1.24 |
|
| $ | 5,208,509 |
|
| $ | 12,038 |
|
| 0.92 |
|
Subordinated debt |
| 133,236 |
|
| 1,923 |
|
| 5.72 |
|
| 133,168 |
|
| 1,923 |
|
| 5.73 |
|
| 132,976 |
|
| 1,923 |
|
| 5.74 |
| ||||||
FHLB advances |
| 200,033 |
|
| 1,200 |
|
| 2.38 |
|
| 217,935 |
|
| 1,316 |
|
| 2.40 |
|
| 33 |
|
| — |
|
| 2.62 |
| ||||||
Total interest-bearing liabilities |
| $ | 5,983,232 |
|
| $ | 19,457 |
|
| 1.29 |
|
| $ | 5,842,313 |
|
| $ | 20,463 |
|
| 1.39 |
|
| $ | 5,341,518 |
|
| $ | 13,961 |
|
| 1.04 |
|
Noninterest-bearing deposits |
| 760,361 |
|
|
|
|
|
| 754,284 |
|
|
|
|
| 816,516 |
|
|
|
|
| |||||||||||||
Other liabilities |
| 83,688 |
|
|
|
|
|
| 80,365 |
|
|
|
|
|
| 57,731 |
|
|
|
|
| ||||||||||||
Total liabilities |
| $ | 6,827,281 |
|
|
|
|
|
| $ | 6,676,961 |
|
|
|
|
|
| $ | 6,215,764 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total stockholders’ equity |
| $ | 1,092,860 |
|
|
|
|
|
| $ | 1,074,436 |
|
|
|
|
|
| $ | 1,042,554 |
|
|
|
|
| |||||||||
Total liabilities and stockholders’ equity |
| $ | 7,920,141 |
|
|
|
|
|
| $ | 7,751,397 |
|
|
|
|
|
| $ | 7,258,318 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net interest spread (2) |
|
|
|
|
| 2.54 | % |
|
|
|
|
| 2.58 | % |
|
|
|
|
| 2.88 | % | ||||||||||||
Net interest income and margin, tax equivalent (3,4) |
|
|
| $ | 50,073 |
|
| 2.76 | % |
|
|
| $ | 50,017 |
|
| 2.82 | % |
|
|
| $ | 50,830 |
|
| 3.07 | % | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Reconciliation of tax equivalent net interest income to reported net interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Tax equivalent adjustment |
|
|
| (473) |
|
|
|
|
|
| (454) |
|
|
|
|
|
| (401) |
|
|
| ||||||||||||
Net interest income, as reported |
|
|
| $ | 49,600 |
|
|
|
|
|
| $ | 49,563 |
|
|
|
|
|
| $ | 50,429 |
|
|
|
- Interest income is presented on a taxable equivalent basis using the federal effective tax rate.
- Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities.
- Net interest margin is computed by dividing net interest income by total average interest-earning assets.
- Net interest margin, tax equivalent has been adjusted to a taxable equivalent basis using the federal effective tax rate.
Consolidated average balance sheet, interest, yield and rates |
|
| ||||||||||||||||||
|
| |||||||||||||||||||
| For the year ended December 31, | |||||||||||||||||||
(unaudited) | 2019 | 2018 | ||||||||||||||||||
($ In thousands) | Average | Interest (1) | Yields/ | Average | Interest (1) | Yields/ | ||||||||||||||
Assets: |
|
|
|
|
|
| ||||||||||||||
Interest-earning assets |
|
|
|
|
|
| ||||||||||||||
Due from banks | $ | 269,202 | $ | 5,308 |
| 1.97 | % | $ | 323,780 | $ | 6,148 |
| 1.90 | % | ||||||
Investment securities |
| 1,061,822 |
| 32,134 |
| 3.03 |
|
| 1,066,317 |
| 22,353 |
| 2.10 |
| ||||||
Loans |
| 5,653,861 |
| 241,248 |
| 4.27 |
|
| 5,160,529 |
| 219,649 |
| 4.26 |
| ||||||
Total interest-earning assets | $ | 6,984,885 | $ | 278,690 |
| 3.99 |
| $ | 6,550,626 | $ | 248,150 |
| 3.79 |
| ||||||
Noninterest-earning assets |
| 715,256 |
|
|
| 707,658 |
|
| ||||||||||||
Total assets | $ | 7,700,141 |
|
| $ | 7,258,284 |
|
| ||||||||||||
|
|
|
|
|
|
| ||||||||||||||
Liabilities and stockholders’ equity: |
|
|
|
|
|
| ||||||||||||||
Interest-bearing deposits |
|
|
|
|
|
| ||||||||||||||
Interest-bearing demand | $ | 2,534,596 | $ | 12,349 |
| 0.49 | % | $ | 2,521,073 | $ | 7,877 |
| 0.31 | % | ||||||
Money market and savings |
| 2,068,606 |
| 32,494 |
| 1.57 |
|
| 2,114,774 |
| 21,713 |
| 1.03 |
| ||||||
Time deposits |
| 827,527 |
| 18,503 |
| 2.24 |
|
| 523,511 |
| 8,573 |
| 1.64 |
| ||||||
Total interest bearing deposits | $ | 5,430,729 | $ | 63,346 |
| 1.17 |
| $ | 5,159,358 | $ | 38,163 |
| 0.74 |
| ||||||
Subordinated debt |
| 133,138 |
| 7,690 |
| 5.78 |
|
| 132,877 |
| 7,690 |
| 5.79 |
| ||||||
FHLB advances |
| 223,159 |
| 5,437 |
| 2.44 |
|
| 21,296 |
| 374 |
| 1.76 |
| ||||||
Total interest-bearing liabilities | $ | 5,787,026 | $ | 76,473 |
| 1.32 |
| $ | 5,313,531 | $ | 46,227 |
| 0.87 |
| ||||||
Noninterest-bearing deposits |
| 761,277 |
|
|
| 837,869 |
|
| ||||||||||||
Other liabilities |
| 82,559 |
|
|
| 73,204 |
|
| ||||||||||||
Total liabilities | $ | 6,630,862 |
|
| $ | 6,224,604 |
|
| ||||||||||||
|
|
|
|
|
|
| ||||||||||||||
Total stockholders’ equity |
| 1,069,279 |
|
|
| 1,033,680 |
|
| ||||||||||||
Total liabilities and stockholders’ equity | $ | 7,700,141 |
|
| $ | 7,258,284 |
|
| ||||||||||||
|
|
|
|
|
|
| ||||||||||||||
Net interest spread (2) |
|
| 2.67 | % |
|
| 2.92 | % | ||||||||||||
Net interest income and margin, tax equivalent (3,4) |
| $ | 202,217 |
| 2.90 | % |
| $ | 201,923 |
| 3.08 | % | ||||||||
|
|
|
|
|
|
| ||||||||||||||
Reconciliation of tax equivalent net interest income to reported net interest income |
|
|
|
|
|
| ||||||||||||||
Tax equivalent adjustment |
|
| (1,735 | ) |
|
|
| (1,394 | ) |
| ||||||||||
Net interest income, as reported |
| $ | 200,482 |
|
|
| $ | 200,529 |
|
|
- Interest income is presented on a taxable equivalent basis using the federal effective tax rate.
- Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities.
- Net interest margin is computed by dividing net interest income by total average interest-earning assets.
- Net interest margin, tax equivalent has been adjusted to a taxable equivalent basis using the federal effective tax rate.
Allowance for Loan Losses |
|
|
|
|
| ||||||||||||||||||||
(unaudited) |
|
|
|
|
| ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||
($ in thousands) | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||
Allowance for loan losses - balance at beginning of period | $ |
| 45,156 |
| $ |
| 57,724 |
| $ |
| 59,029 |
| $ |
| 54,664 |
| $ |
| 75,930 |
| |||||
Provision (negative provision) for loan losses |
| (2,685 | ) |
| (7,698 | ) |
| 7,659 |
|
| (4,905 | ) |
| 19,601 |
| ||||||||||
Charge-offs |
| (1,772 | ) |
| (5,923 | ) |
| (14,565 | ) |
| (12,775 | ) |
| (51,251 | ) | ||||||||||
Recoveries |
| 145 |
|
| 1,053 |
|
| 2,541 |
|
| 3,860 |
|
| 10,384 |
| ||||||||||
Total net charge-offs |
| (1,627 | ) |
| (4,870 | ) |
| (12,024 | ) |
| (8,915 | ) |
| (40,867 | ) | ||||||||||
Allowance for loan losses - balance at end of period | $ |
| 40,844 |
| $ |
| 45,156 |
| $ |
| 54,664 |
| $ |
| 40,844 |
| $ |
| 54,664 |
|
Asset Quality Information |
|
|
| |||||||||
(unaudited) | As of and for the quarter ended | |||||||||||
($ in thousands) | December 31, | September 30, | December 31, | |||||||||
Nonperforming assets |
|
|
| |||||||||
Nonaccrual loans | $ | 5,974 |
| $ | 7,420 |
| $ | 28,016 |
| |||
OREO and other repossessed assets | — | — | — | |||||||||
Total nonperforming assets | $ | 5,974 |
| $ | 7,420 |
| $ | 28,016 |
| |||
|
|
|
| |||||||||
Loans 30 - 89 days past due | $ | 4,490 |
| $ | 1,941 |
| $ | 2,634 |
| |||
Accruing loans 90 days or more past due | — | — |
| 485 |
| |||||||
|
|
|
| |||||||||
Nonperforming loans to total loans |
| 0.10 | % |
| 0.13 | % |
| 0.54 | % | |||
Nonperforming assets to total assets |
| 0.07 |
|
| 0.10 |
|
| 0.39 |
| |||
Loans 30-89 days past due to total loans |
| 0.08 |
|
| 0.03 |
|
| 0.05 |
| |||
Allowance for loan losses to total loans |
| 0.69 |
|
| 0.78 |
|
| 1.06 |
| |||
Allowance for loan losses to nonaccrual loans |
| 683.70 |
|
| 608.57 |
|
| 195.12 |
| |||
Net charge-offs to average loans (annualized) |
| 0.11 |
|
| 0.33 |
|
| 0.92 |
|
Risk Rating by Loan Product |
|
|
|
|
| ||||||||||||||
(Unaudited) |
|
|
|
|
|
| |||||||||||||
($ in thousands) | Pass | Special | Classified | Total Loans | Nonaccrual | Total | |||||||||||||
As of December 31, 2019 |
|
|
|
|
|
|
| ||||||||||||
Real estate mortgage loans: |
|
|
|
|
|
|
| ||||||||||||
Single-family residential | $ | 49,442 | $ | 69 | $ | 438 | $ | 49,949 | $ | 215 | $ | 114 | |||||||
Multifamily residential |
| 3,783,589 | — |
| 872 |
| 3,784,461 | — |
| 14,191 | |||||||||
Commercial real estate |
| 1,052,918 |
| 12,753 |
| 6,897 |
| 1,072,568 |
| 2,409 |
| 6,598 | |||||||
Construction and land loans |
| 36,983 |
| 18,756 | — |
| 55,739 | — |
| 602 | |||||||||
Commercial business loans |
| 874,118 |
| 8,471 |
| 18,417 |
| 901,006 | — |
| 18,799 | ||||||||
Small Business Administration loans |
| 27,525 |
| 154 |
| 5,962 |
| 33,641 |
| 2,842 |
| 538 | |||||||
Consumer and other loans |
| 2,489 |
| 53 |
| 614 |
| 3,156 |
| 508 |
| 2 | |||||||
Total loans | $ | 5,827,064 | $ |
| 40,256 | $ | 33,200 | $ | 5,900,520 | $ | 5,974 | $ | 40,844 | ||||||
|
|
|
|
|
|
|
| ||||||||||||
As of September 30, 2019 |
|
|
|
|
|
|
| ||||||||||||
Real estate mortgage loans: |
|
|
|
|
|
|
| ||||||||||||
Single-family residential | $ | 50,840 | $ |
| 70 | $ | 451 | $ | 51,361 | $ | 217 | $ | 120 | ||||||
Multifamily residential |
| 3,698,947 | — |
| 877 |
| 3,699,824 | — |
| 13,418 | |||||||||
Commercial real estate |
| 1,062,001 |
| 8,414 |
| 38,565 |
| 1,108,980 |
| 2,423 |
| 9,806 | |||||||
Construction and land loans |
| 33,980 |
| 17,734 | — |
| 51,714 | — |
| 574 | |||||||||
Commercial business loans |
| 829,574 |
| 6,577 |
| 20,213 |
| 856,364 | — |
| 19,935 | ||||||||
Small Business Administration loans |
| 22,147 |
| 156 |
| 7,655 |
| 29,958 |
| 4,290 |
| 1,299 | |||||||
Consumer and other loans |
| 3,100 |
| 55 |
| 600 |
| 3,755 |
| 490 |
| 4 | |||||||
Total loans | $ | 5,700,589 | $ |
| 33,006 | $ | 68,361 | $ | 5,801,956 | $ | 7,420 | $ | 45,156 | ||||||
|
|
|
|
|
|
|
| ||||||||||||
As of December 31, 2018 |
|
|
|
|
|
|
| ||||||||||||
Real estate mortgage loans: |
|
|
|
|
|
|
| ||||||||||||
Single-family residential | $ | 61,471 | $ |
| 76 | $ | 366 | $ | 61,913 | $ | — | $ | 178 | ||||||
Multifamily residential |
| 2,929,173 |
| 120 |
| 2,104 |
| 2,931,397 | — |
| 10,236 | ||||||||
Commercial real estate |
| 1,007,274 |
| 9,904 |
| 47,185 |
| 1,064,363 |
| 2,462 |
| 10,663 | |||||||
Construction and land loans |
| 57,100 |
| 13,457 | — |
| 70,557 | — |
| 698 | |||||||||
Commercial business loans |
| 927,437 |
| 17,455 |
| 47,851 |
| 992,743 |
| 18,039 |
| 32,545 | |||||||
Small Business Administration loans |
| 28,727 |
| 161 |
| 10,923 |
| 39,811 |
| 6,973 |
| 336 | |||||||
Consumer and other loans |
| 3,696 |
| 58 |
| 672 |
| 4,426 |
| 542 |
| 8 | |||||||
Total loans | $ | 5,014,878 | $ |
| 41,231 | $ | 109,101 | $ | 5,165,210 | $ | 28,016 | $ | 54,664 |
Non-GAAP Financial Measures
Our accounting and reporting policies conform to generally accepted accounting principles in the United States ("GAAP"). We believe that the presentation of certain non-GAAP financial measures assists investors in evaluating our financial results. These non-GAAP measures include our net income, earnings per diluted share, return on average assets, return on average stockholders' equity, return on average tangible common equity, efficiency ratio, tangible book value per common share, and tangible common equity ratio. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures. The following tables present a reconciliation of the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios:
Non-GAAP tangible book value per common share |
| ||||||||
(unaudited) | As of | ||||||||
($ in thousands, except share amounts) | December 31, | September 30, | December 31, | ||||||
Tangible equity: |
|
|
| ||||||
Total stockholders' equity | $ | 1,099,147 | $ | 1,083,043 | $ | 1,040,813 | |||
Less: |
|
|
| ||||||
Preferred stock |
| 29,110 |
| 29,110 |
| 29,110 | |||
Common equity |
| 1,070,037 |
| 1,053,933 |
| 1,011,703 | |||
Less: |
|
|
| ||||||
Goodwill |
| 331,832 |
| 331,832 |
| 331,832 | |||
Other intangible assets, net |
| 33,875 |
| 34,884 |
| 38,926 | |||
Tangible common equity |
| 704,330 |
| 687,217 |
| 640,945 | |||
Shares of common stock outstanding |
| 36,347,615 |
| 36,286,598 |
| 36,060,375 | |||
|
|
|
| ||||||
Book value per common share | $ | 29.44 | $ | 29.04 | $ | 28.06 | |||
Tangible book value per common share |
| 19.38 |
| 18.94 |
| 17.77 |
Non-GAAP tangible common equity ratio | ||||||||||||
(unaudited) |
| As of | ||||||||||
($ In thousands) |
| December 31, |
| September 30, |
| December 31, | ||||||
Total assets |
| $ | 7,992,400 |
|
| $ | 7,771,343 |
|
| $ | 7,180,903 |
|
Less: |
|
|
|
|
|
| ||||||
Goodwill |
|
| 331,832 |
|
|
| 331,832 |
|
|
| 331,832 |
|
Other intangible assets, net |
|
| 33,875 |
|
|
| 34,884 |
|
|
| 38,926 |
|
Tangible assets |
|
| 7,626,693 |
|
|
| 7,404,627 |
|
|
| 6,810,145 |
|
|
|
|
|
|
|
| ||||||
Total stockholders' equity |
|
| 1,099,147 |
|
|
| 1,083,043 |
|
|
| 1,040,813 |
|
Less: |
|
|
|
|
|
| ||||||
Goodwill |
|
| 331,832 |
|
|
| 331,832 |
|
|
| 331,832 |
|
Other intangible assets, net |
|
| 33,875 |
|
|
| 34,884 |
|
|
| 38,926 |
|
Tangible equity |
|
| 733,440 |
|
|
| 716,327 |
|
|
| 670,055 |
|
Less: preferred stock |
|
| 29,110 |
|
|
| 29,110 |
|
|
| 29,110 |
|
Tangible common equity |
| $ | 704,330 |
|
| $ | 687,217 |
|
| $ | 640,945 |
|
|
|
|
|
|
|
| ||||||
Total stockholders' equity to total assets |
|
| 13.75 | % |
|
| 13.94 | % |
|
| 14.49 | % |
Tangible equity to tangible assets ratio |
|
| 9.62 | % |
|
| 9.67 | % |
|
| 9.84 | % |
|
|
|
|
|
|
| ||||||
Total common equity to total assets |
|
| 13.39 | % |
|
| 13.56 | % |
|
| 14.09 | % |
Tangible common equity to tangible assets ratio |
|
| 9.24 | % |
|
| 9.28 | % |
|
| 9.41 | % |
Non-GAAP Financial Measures |
|
|
|
|
| |||||||||||||||
(unaudited) | For the three months ended | For the year ended | ||||||||||||||||||
($ in thousands) | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
Net income | $ | 20,289 |
| $ | 21,998 |
| $ | (6,861 | ) | $ | 61,834 |
| $ | 30,918 |
| |||||
Adjustments to noninterest income: |
|
|
|
|
| |||||||||||||||
Impairment | — | — | — |
| 489 |
| — | |||||||||||||
(Gains) and losses on sales of securities, loans, and other repossessed assets |
| (851 | ) |
| (220 | ) |
| 9,882 |
|
| (1,024 | ) |
| 9,667 |
| |||||
Adjustments to noninterest expense: |
|
|
|
|
| |||||||||||||||
Strategic actions |
| 81 |
|
| 119 |
|
| 10,547 |
|
| 5,000 |
|
| 12,845 |
| |||||
Litigation (recovery) | — | — | — |
| 1,431 |
|
| (2,734 | ) | |||||||||||
Pre-tax adjustments |
| (770 | ) |
| (101 | ) |
| 20,429 |
|
| 5,896 |
|
| 19,778 |
| |||||
Tax effect |
| 34 |
|
| 383 |
|
| (3,401 | ) |
| (273 | ) |
| (6,103 | ) | |||||
Tax-effected adjustments (1) |
| (736 | ) |
| 282 |
|
| 17,028 |
|
| 5,623 |
|
| 13,675 |
| |||||
Adjusted net income | $ | 19,553 |
| $ | 22,280 |
| $ | 10,167 |
| $ | 67,457 |
| $ | 44,593 |
| |||||
|
|
|
|
|
| |||||||||||||||
Average assets | $ | 7,920,141 |
| $ | 7,751,397 |
| $ | 7,258,318 |
| $ | 7,700,141 |
| $ | 7,258,284 |
| |||||
Average stockholders' equity |
| 1,092,860 |
|
| 1,074,436 |
|
| 1,042,554 |
|
| 1,069,279 |
|
| 1,033,680 |
| |||||
Less: |
|
|
|
|
| |||||||||||||||
Average preferred stock |
| 29,110 |
|
| 29,110 |
|
| 29,110 |
|
| 29,110 |
|
| 29,110 |
| |||||
Average goodwill |
| 331,832 |
|
| 331,832 |
|
| 331,832 |
|
| 331,832 |
|
| 331,832 |
| |||||
Average other intangible assets |
| 34,467 |
|
| 35,639 |
|
| 39,663 |
|
| 36,312 |
|
| 41,859 |
| |||||
Average tangible common equity | $ | 697,451 |
| $ | 677,855 |
| $ | 641,949 |
| $ | 672,025 |
| $ | 630,879 |
| |||||
|
|
|
|
|
| |||||||||||||||
Earnings per diluted share | $ | 0.53 |
| $ | 0.57 |
| $ | (0.20 | ) | $ | 1.62 |
| $ | 0.81 |
| |||||
Adjusted earnings per diluted share |
| 0.51 |
|
| 0.58 |
|
| 0.27 |
|
| 1.76 |
|
| 1.18 |
| |||||
|
|
|
|
|
| |||||||||||||||
Return on average assets |
| 1.02 | % |
| 1.13 | % |
| (0.38 | )% |
| 0.80 | % |
| 0.43 | % | |||||
Adjusted return on average assets |
| 0.98 |
|
| 1.14 |
|
| 0.56 |
|
| 0.88 |
|
| 0.61 |
| |||||
|
|
|
|
|
| |||||||||||||||
Return on average stockholders' equity |
| 7.37 |
|
| 8.12 |
|
| (2.61 | ) |
| 5.78 |
|
| 2.99 |
| |||||
Adjusted return on average stockholders' equity |
| 7.10 |
|
| 8.23 |
|
| 3.87 |
|
| 6.31 |
|
| 4.31 |
| |||||
|
|
|
|
|
| |||||||||||||||
Return on average tangible common equity |
| 11.54 |
|
| 12.88 |
|
| (4.24 | ) |
| 9.20 |
|
| 4.90 |
| |||||
Adjusted return on average tangible common equity |
| 11.12 |
|
| 13.04 |
|
| 6.28 |
|
| 10.04 |
|
| 7.07 |
| |||||
|
|
|
|
|
| |||||||||||||||
Efficiency ratio (2) |
| 61.30 |
|
| 61.82 |
|
| 81.49 |
|
| 66.25 |
|
| 70.72 |
| |||||
Adjusted efficiency ratio |
| 61.17 |
|
| 61.63 |
|
| 65.03 |
|
| 63.56 |
|
| 66.71 |
|
- The tax effect of adjustments was computed using the combined federal and state marginal tax rate of 23.9%, 26.1%, 21.3%, 24.9% and 22.1% for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018 and the year ended December 31, 2019 and December 31, 2018, respectively, adjusted for the tax effect of nondeductible strategic action expenses.
- The efficiency ratio equals noninterest expense adjusted to exclude the amortization of other intangible assets divided by the sum of tax-equivalent net interest income and noninterest income adjusted to exclude the gains and losses on the sale of investment securities, loans, and other repossessed assets.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200127005143/en/
Kevin L. Thompson
EVP, Chief Financial Officer
949-251-8196
Brett G. Villaume
SVP, Director of Investor Relations
949-224-8866