EXHIBIT 99
MB Financial, Inc.
800 West Madison Street
Chicago, Illinois 60607
(888) 422-6562
NASDAQ: MBFI
PRESS RELEASE
For Information at MB Financial, Inc. contact:
Jill York - Vice President and Chief Financial Officer
E-Mail: jyork@mbfinancial.com
FOR IMMEDIATE RELEASE
MB FINANCIAL, INC. REPORTS FIRST QUARTER NET INCOME OF $24.9 MILLION
AND RETURN ON ASSETS OF 1.07%
CHICAGO, April 22, 2013 – MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A., today announced 2013 first quarter net income of $24.9 million.
"I'm pleased with our strong start to 2013. Our key fee initiatives, especially leasing revenues, continued to deliver and credit costs remained very low. Revenue from our key fee initiatives increased 53% compared to the first quarter of 2012," stated Mitchell Feiger, President and Chief Executive Officer of the Company.
Net income, net income available to common stockholders and fully diluted earnings per share increased in the first quarter of 2013 compared to the fourth and first quarters of 2012 as follows (note that all linked quarter change percentages presented here and throughout this release are not annualized):
|
| | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | Change from 4Q12 to 1Q13 | | 1Q12 | | Change from 1Q12 to 1Q13 |
| (dollars in thousands, except per share data) | | |
| | |
| | | | | | |
| Net income | | $ | 24,906 |
| | $ | 24,012 |
| | +3.7 | % | | $ | 21,086 |
| | +18.1 | % |
| Net income available to common stockholders | | 24,906 |
| | 24,012 |
| | +3.7 | % | | 17,817 |
| | +39.8 | % |
| Fully diluted earnings per share | | 0.46 |
| | 0.44 |
| | +4.5 | % | | 0.33 |
| | +39.4 | % |
Key items are as follows:
Overall Fee Income Growth Continues:
| |
| • | Revenues from key fee initiatives increased 7.8% compared to the fourth quarter of 2012, as a result of the 31.0% increase in leasing revenues to $16.3 million. This increase was primarily driven by the addition of Celtic Leasing Corp. ("Celtic"), our recently acquired leasing subsidiary, which contributed $6.0 million in leasing revenues to our first quarter 2013 results. |
| |
| • | Revenues from key fee initiatives increased 52.5% compared to the first quarter of 2012, primarily as a result of the 133.7% increase in leasing revenues. Capital markets and international banking service fees and card fees increased 57.8% and 31.7%, respectively, compared to the first quarter of 2012. |
| |
| • | Core non-interest income to total revenues ratio was 34.6% in the first quarter compared to 34.2% in the prior quarter and 26.5% in the first quarter of 2012. |
Net Interest Margin Stable Compared to Prior Quarter:
| |
| • | Fully taxable equivalent net interest margin was 3.59% for the first quarter of 2013 compared to 3.57% for the prior quarter and 3.87% for the first quarter of 2012. The change from the first quarter of 2012 was due to average yields on interest earning assets declining more than average rates paid on interest bearing liabilities. |
| |
| • | Net interest income declined compared to the prior quarter primarily due to two fewer days in the first quarter of 2013 compared to the fourth quarter of 2012. Compared to the first quarter of 2012, net interest income declined due to lower average interest earning asset balances (as a result of a decrease in covered loans) as well as a decline in net interest margin. |
Non-Performing Loans and Non-Performing Assets Decreased During the Quarter:
|
| | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | Change from 4Q12 to 1Q13 | | 1Q12 | | Change from 1Q12 to 1Q13 |
| (dollars in thousands) | | |
| | |
| | |
| | |
| | |
| Non-performing loans to total loans | | 2.00 | % | | 2.03 | % | | -0.03 | % | | 2.15 | % | | -0.15 | % |
| Non-performing assets to total assets | | 1.56 |
| | 1.62 |
| | -0.06 |
| | 1.94 |
| | -0.38 |
|
| Net loan charge-offs (recoveries) to average loans (annualized) | | 0.25 |
| | (0.17 | ) | | +0.42 |
| | 0.40 |
| | -0.15 |
|
| |
| • | Provision for credit losses was zero in the quarter, aided by low migrations to nonperforming status and by recoveries. |
Improvement in Return on Assets and Return on Equity During the Quarter:
| |
| • | Our annualized return on average assets, annualized return on average common equity and annualized cash return on average tangible common equity improved compared to the fourth and first quarters of 2012: |
|
| | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | Change from 4Q12 to 1Q13 | | 1Q12 | | Change from 1Q12 to 1Q13 |
| Annualized return on average assets | | 1.07 | % | | 1.01 | % | | +0.06 | % | | 0.87 | % | | +0.20 | % |
| Annualized return on average common equity | | 7.89 |
| | 7.55 |
| | +0.34 |
| | 5.94 |
| | +1.95 |
|
| Annualized cash return on average tangible common equity | | 12.53 |
| | 11.47 |
| | +1.06 |
| | 9.36 |
| | +3.17 |
|
RESULTS OF OPERATIONS
First Quarter Results
Net Interest Income
Net interest income on a fully tax equivalent basis decreased $1.6 million from the fourth quarter of 2012. The decrease from the fourth quarter of 2012 to the first quarter of 2013 was due primarily to two fewer days in the first quarter. Our net interest margin, on a fully tax equivalent basis increased to 3.59% for the first quarter of 2013 compared to 3.57% for the fourth quarter of 2012.
Net interest income on a fully tax equivalent basis decreased $8.6 million from the first quarter of 2012. The decrease from the first quarter of 2012 to the first quarter of 2013 was due to lower average earning asset balances (as a result of a decrease in covered loans) as well as a decline in net interest margin. Our net interest margin, on a fully tax equivalent basis, declined to 3.59% for the first quarter of 2013 compared to 3.87% for the first quarter of 2012. The decrease in the margin was due to average yields on interest earning assets declining more than average rates paid on interest bearing liabilities.
See the supplemental net interest margin tables for further detail.
Non-interest Income (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Core non-interest income: | | | | | | | | | | |
| Key fee initiatives: | | | | | | | | | | |
| Capital markets and international banking service fees | | $ | 808 |
| | $ | 2,386 |
| | $ | 1,400 |
| | $ | 788 |
| | $ | 512 |
|
| Commercial deposit and treasury management fees | | 5,966 |
| | 6,095 |
| | 5,860 |
| | 5,784 |
| | 5,897 |
|
| Lease financing, net | | 16,263 |
| | 12,419 |
| | 9,671 |
| | 7,334 |
| | 6,958 |
|
| Trust and asset management fees | | 4,494 |
| | 4,623 |
| | 4,428 |
| | 4,535 |
| | 4,404 |
|
| Card fees | | 2,695 |
| | 2,505 |
| | 2,388 |
| | 2,429 |
| | 2,046 |
|
| Total key fee initiatives | | 30,226 |
| | 28,028 |
| | 23,747 |
| | 20,870 |
| | 19,817 |
|
| | | | | | | | | | | |
| Loan service fees | | 1,011 |
| | 2,436 |
| | 1,075 |
| | 1,267 |
| | 1,067 |
|
| Consumer and other deposit service fees | | 3,246 |
| | 3,655 |
| | 3,786 |
| | 3,534 |
| | 3,453 |
|
| Brokerage fees | | 1,157 |
| | 1,088 |
| | 1,185 |
| | 1,264 |
| | 1,255 |
|
| Increase in cash surrender value of life insurance | | 844 |
| | 893 |
| | 890 |
| | 870 |
| | 917 |
|
| Accretion of FDIC indemnification asset | | 143 |
| | 154 |
| | 204 |
| | 222 |
| | 475 |
|
| Net gain on sale of loans | | 639 |
| | 822 |
| | 575 |
| | 554 |
| | 374 |
|
| Other operating income | | 955 |
| | 1,325 |
| | 405 |
| | 958 |
| | 1,604 |
|
| Total core non-interest income | | 38,221 |
| | 38,401 |
| | 31,867 |
| | 29,539 |
| | 28,962 |
|
| | | | | | | | | | | |
| Non-core non-interest income: (1) | | | | | | | | | | |
| Net (loss) gain on investment securities | | (1 | ) | | 311 |
| | 281 |
| | (34 | ) | | (3 | ) |
| Net loss on sale of other assets | | — |
| | (905 | ) | | (12 | ) | | (8 | ) | | (17 | ) |
| Net loss recognized on other real estate owned (A) | | (319 | ) | | (1,848 | ) | | (4,151 | ) | | (4,156 | ) | | (4,348 | ) |
| Net (loss) gain recognized on other real estate owned related to FDIC transactions (A) | | (11 | ) | | 222 |
| | 213 |
| | (1,285 | ) | | (2,241 | ) |
| Increase (decrease) in market value of assets held in trust for deferred compensation (B) | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Total non-core non-interest income | | 152 |
| | (2,116 | ) | | (3,314 | ) | | (5,632 | ) | | (6,108 | ) |
| | | | | | | | | | | |
| Total non-interest income | | $ | 38,373 |
| | $ | 36,285 |
| | $ | 28,553 |
| | $ | 23,907 |
| | $ | 22,854 |
|
| |
| (1) | Letter denotes the corresponding line items where these non-core non-interest income items reside in the consolidated statements of income as follows: A – Net loss recognized on other real estate owned, B – Other operating income. |
Core non-interest income for the first quarter of 2013 was consistent with the fourth quarter of 2012.
| |
| • | Net lease financing income increased primarily as a result of the acquisition of Celtic at the end of 2012 and the continued very strong performance from our LaSalle leasing subsidiary. Remarketing gains and fees from the sale of equipment maintenance contracts can fluctuate from quarter to quarter. |
| |
| • | Card fee income increased primarily due to fees earned on debit and credit cards. |
| |
| • | Capital markets and international banking service fees decreased primarily due to a decrease in merger and acquisition advisory fees, as well as a decrease in interest rate swap fees, which can fluctuate based on loan volumes. |
| |
| • | Loan service fees decreased due to a decrease in prepayment fees. |
| |
| • | Consumer and other deposit service fees decreased as a result of lower NSF fees. |
Core non-interest income for the first quarter of 2013 rose 32.0% compared to the first quarter of 2012.
| |
| • | Net lease financing income increased as a result of the increase in remarketing gains and fees from the sale of equipment maintenance contracts, as well as the impact on leasing revenues attributable to Celtic. |
| |
| • | Card fee income increased primarily due to fees earned on prepaid, debit and credit cards. |
| |
| • | Capital markets and international banking service fees increased primarily due to an increase in loan placement and interest rate swap fees. |
Non-core non-interest income for the first quarter of 2013 compared to the fourth and first quarters of 2012 was primarily impacted by lower losses recognized on other real estate owned ("OREO").
Non-interest Expense (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Core non-interest expense: | | | | | | | | | | |
| Salaries and employee benefits | | $ | 43,031 |
| | $ | 42,934 |
| | $ | 41,728 |
| | $ | 40,295 |
| | $ | 39,928 |
|
| Occupancy and equipment expense | | 9,404 |
| | 8,774 |
| | 8,274 |
| | 9,188 |
| | 9,570 |
|
| Computer services and telecommunication expense | | 3,887 |
| | 4,160 |
| | 3,777 |
| | 3,909 |
| | 3,653 |
|
| Advertising and marketing expense | | 2,103 |
| | 2,335 |
| | 1,936 |
| | 1,839 |
| | 2,073 |
|
| Professional and legal expense | | 1,295 |
| | 1,640 |
| | 1,554 |
| | 1,503 |
| | 1,413 |
|
| Other intangible amortization expense | | 1,544 |
| | 1,251 |
| | 1,251 |
| | 1,251 |
| | 1,257 |
|
| Other real estate expense, net | | 139 |
| | 449 |
| | 874 |
| | 424 |
| | 1,243 |
|
| Other operating expenses | | 9,213 |
| | 8,027 |
| | 7,976 |
| | 8,574 |
| | 7,693 |
|
| Total core non-interest expense | | 70,616 |
| | 69,570 |
| | 67,370 |
| | 66,983 |
| | 66,830 |
|
| | | | | | | | | | | |
| Non-core non-interest expense: (1) | | | | | | | | | | |
| Branch impairment charges | | — |
| | 1,432 |
| | 758 |
| | — |
| | — |
|
| Prepayment fees on interest bearing liabilities | | — |
| | — |
| | 12,682 |
| | — |
| | — |
|
| Increase (decrease) in market value of assets held in trust for deferred compensation (A) | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Total non-core non-interest expense | | 483 |
| | 1,536 |
| | 13,795 |
| | (149 | ) | | 501 |
|
| | | | | | | | | | | |
| Total non-interest expense | | $ | 71,099 |
| | $ | 71,106 |
| | $ | 81,165 |
| | $ | 66,834 |
| | $ | 67,331 |
|
| |
| (1) | Letters denote the corresponding line items where these non-core non-interest expense items reside in the consolidated statements of income as follows: A – Salaries and employee benefits. |
Core non-interest expense, which included a full quarter of Celtic's operating expenses, increased by $1.0 million (+1.5%) from the fourth quarter of 2012 to the first quarter of 2013.
| |
| • | Other operating expenses were higher as a result of an increase in the clawback liability related to our loss share agreements with the FDIC. |
| |
| • | Occupancy and equipment expense increased due to higher property taxes and building maintenance expense partially offset by a decrease in depreciation expense. |
| |
| • | Other intangible amortization expense increased due to the Celtic acquisition. |
| |
| • | Professional and legal expense decreased due to less collection activity. |
| |
| • | Other real estate expense decreased due to lower construction costs and higher real estate tax refunds received. |
Core non-interest expense increased by $3.8 million (+5.7%) from the first quarter of 2012 to the first quarter of 2013.
| |
| • | Salaries and employee benefits increased due to annual salary increases, the impact of Celtic and an increase in incentives and commissions on higher lease revenues. |
| |
| • | Other operating expenses were higher as a result of an increase in the clawback liability related to our loss share agreements with the FDIC recorded during the first quarter of 2013. |
| |
| • | Other intangible amortization expense increased due to the Celtic acquisition. |
| |
| • | Other real estate expense decreased due to fewer OREO properties. |
Non-core non-interest expense decreased from the prior quarter as we did not incur any branch impairment charges in the first quarter of 2013, while in the fourth quarter of 2012, we incurred $1.4 million in branch impairment charges.
LOAN PORTFOLIO
The following table sets forth the composition of the loan portfolio (excluding loans held for sale) as of the dates indicated (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| | | Amount | | % of Total | | Amount | | % of Total | | Amount | | % of Total | | Amount | | % of Total | | Amount | | % of Total |
| Commercial related credits: | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Commercial loans | | $ | 1,207,638 |
| | 21 | % | | $ | 1,220,472 |
| | 21 | % | | $ | 1,073,981 |
| | 19 | % | | $ | 1,079,436 |
| | 19 | % | | $ | 1,040,340 |
| | 18 | % |
| Commercial loans collateralized by assignment of lease payments (lease loans) | | 1,347,666 |
| | 24 | % | | 1,303,020 |
| | 23 | % | | 1,219,361 |
| | 22 | % | | 1,221,199 |
| | 21 | % | | 1,209,942 |
| | 21 | % |
| Commercial real estate | | 1,743,329 |
| | 30 | % | | 1,761,832 |
| | 30 | % | | 1,770,261 |
| | 31 | % | | 1,794,777 |
| | 31 | % | | 1,877,380 |
| | 32 | % |
| Construction real estate | | 101,581 |
| | 2 | % | | 110,261 |
| | 2 | % | | 149,872 |
| | 3 | % | | 150,665 |
| | 3 | % | | 128,040 |
| | 2 | % |
| Total commercial related credits | | 4,400,214 |
| | 77 | % | | 4,395,585 |
| | 76 | % | | 4,213,475 |
| | 75 | % | | 4,246,077 |
| | 74 | % | | 4,255,702 |
| | 73 | % |
| Other loans: | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Residential real estate | | 312,804 |
| | 5 | % | | 314,359 |
| | 5 | % | | 308,866 |
| | 5 | % | | 313,137 |
| | 5 | % | | 309,644 |
| | 5 | % |
| Indirect vehicle | | 220,739 |
| | 4 | % | | 208,633 |
| | 4 | % | | 206,973 |
| | 3 | % | | 198,848 |
| | 3 | % | | 186,736 |
| | 3 | % |
| Home equity | | 291,190 |
| | 5 | % | | 305,186 |
| | 5 | % | | 314,718 |
| | 6 | % | | 323,234 |
| | 6 | % | | 327,450 |
| | 6 | % |
| Consumer loans | | 81,932 |
| | 2 | % | | 93,317 |
| | 2 | % | | 84,651 |
| | 2 | % | | 89,115 |
| | 2 | % | | 89,705 |
| | 2 | % |
| Total other loans | | 906,665 |
| | 16 | % | | 921,495 |
| | 16 | % | | 915,208 |
| | 16 | % | | 924,334 |
| | 16 | % | | 913,535 |
| | 16 | % |
| Gross loans excluding covered loans | | 5,306,879 |
| | 93 | % | | 5,317,080 |
| | 92 | % | | 5,128,683 |
| | 91 | % | | 5,170,411 |
| | 90 | % | | 5,169,237 |
| | 89 | % |
| Covered loans (1) | | 400,789 |
| | 7 | % | | 449,850 |
| | 8 | % | | 496,162 |
| | 9 | % | | 552,838 |
| | 10 | % | | 620,528 |
| | 11 | % |
| Total loans | | $ | 5,707,668 |
| | 100 | % | | $ | 5,766,930 |
| | 100 | % | | $ | 5,624,845 |
| | 100 | % | | $ | 5,723,249 |
| | 100 | % | | $ | 5,789,765 |
| | 100 | % |
| |
| (1) | Covered loans refer to loans we acquired in FDIC-assisted transactions that are subject to loss-sharing agreements with the FDIC. |
Our loan portfolio mix improved over the past twelve months from the standpoint of lowering our real estate-related exposure, as commercial and lease loan balances increased by 13.6% while commercial real estate and construction loan balances decreased by 8.0%.
ASSET QUALITY
The following table presents a summary of classified assets (excluding loans held for sale, credit-impaired loans and OREO that were acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Non-performing loans: | | |
| | |
| | |
| | |
| | |
|
| Non-accrual loans (1) | | $ | 108,765 |
| | $ | 115,387 |
| | $ | 104,813 |
| | $ | 113,077 |
| | $ | 124,011 |
|
| Loans 90 days or more past due, still accruing interest (2) | | 5,193 |
| | 1,599 |
| | 470 |
| | 453 |
| | 679 |
|
| Total non-performing loans | | 113,958 |
| | 116,986 |
| | 105,283 |
| | 113,530 |
| | 124,690 |
|
| OREO | | 31,462 |
| | 36,977 |
| | 42,427 |
| | 49,690 |
| | 63,077 |
|
| Repossessed assets | | 757 |
| | 773 |
| | 113 |
| | 60 |
| | 81 |
|
| Total non-performing assets | | 146,177 |
| | 154,736 |
| | 147,823 |
| | 163,280 |
| | 187,848 |
|
| Potential problem loans (3) | | 115,451 |
| | 111,553 |
| | 134,289 |
| | 141,066 |
| | 159,440 |
|
| Total classified assets | | $ | 261,628 |
| | $ | 266,289 |
| | $ | 282,112 |
| | $ | 304,346 |
| | $ | 347,288 |
|
| | | | | | | | | | | |
| Total allowance for loan losses | | $ | 121,802 |
| | $ | 124,204 |
| | $ | 121,182 |
| | $ | 121,756 |
| | $ | 125,431 |
|
| Accruing restructured loans (4) | | $ | 21,881 |
| | $ | 21,256 |
| | $ | 17,929 |
| | $ | 16,536 |
| | $ | 24,145 |
|
| Total non-performing loans to total loans | | 2.00 | % | | 2.03 | % | | 1.87 | % | | 1.98 | % | | 2.15 | % |
| Total non-performing assets to total assets | | 1.56 | % | | 1.62 | % | | 1.56 | % | | 1.72 | % | | 1.94 | % |
| Allowance for loan losses to non-performing loans | | 106.88 | % | | 106.17 | % | | 115.10 | % | | 107.25 | % | | 100.59 | % |
| |
| (1) | Includes $27.2 million, $28.4 million, $27.1 million, $32.7 million and $34.7 million of restructured loans on non-accrual status at March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012, and March 31, 2012, respectively. |
| |
| (2) | Approximately $3.5 million of loans 90 days or more past due, still accruing interest as of March 31, 2013 were paid off in April 2013. |
| |
| (3) | We define potential problem loans as performing loans rated substandard that do not meet the definition of a non-performing loan (See “Asset Quality” section above for non-performing loans). Potential problem loans carry a higher probability of default and require additional attention by management. |
| |
| (4) | Accruing restructured loans consists primarily of residential real estate and home equity loans that have been modified and are performing in accordance with those modified terms as of the dates indicated. |
The following table presents data related to non-performing loans by category (excluding loans held for sale and credit-impaired loans that were acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Commercial and lease | | $ | 22,247 |
| | $ | 25,517 |
| | $ | 22,648 |
| | $ | 24,402 |
| | $ | 34,471 |
|
| Commercial real estate | | 57,604 |
| | 59,508 |
| | 55,387 |
| | 62,512 |
| | 70,939 |
|
| Construction real estate | | 1,025 |
| | 1,028 |
| | 1,225 |
| | 1,470 |
| | 1,553 |
|
| Consumer related | | 33,082 |
| | 30,933 |
| | 26,023 |
| | 25,146 |
| | 17,727 |
|
| Total non-performing loans | | $ | 113,958 |
| | $ | 116,986 |
| | $ | 105,283 |
| | $ | 113,530 |
| | $ | 124,690 |
|
Consumer related non-performing loans increased compared to December 31, 2012 and a year ago primarily due to an increase in home equity and residential non-performing loans.
The following table represents a summary of OREO (excluding OREO related to assets acquired in FDIC-assisted transactions) as of the dates indicated (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Balance at the beginning of quarter | | $ | 36,977 |
| | $ | 42,427 |
| | $ | 49,690 |
| | $ | 63,077 |
| | $ | 78,452 |
|
| Transfers in at fair value less estimated costs to sell | | 711 |
| | 1,811 |
| | 63 |
| | 910 |
| | 1,751 |
|
| Capitalized OREO costs | | — |
| | 505 |
| | 978 |
| | 967 |
| | 359 |
|
| Fair value adjustments | | (349 | ) | | (1,982 | ) | | (4,648 | ) | | (4,507 | ) | | (4,764 | ) |
| Net gains on sales of OREO | | 30 |
| | 134 |
| | 497 |
| | 351 |
| | 416 |
|
| Cash received upon disposition | | (5,907 | ) | | (5,918 | ) | | (4,153 | ) | | (11,108 | ) | | (13,137 | ) |
| Balance at the end of quarter | | $ | 31,462 |
| | $ | 36,977 |
| | $ | 42,427 |
| | $ | 49,690 |
| | $ | 63,077 |
|
Below is a reconciliation of the activity in our allowance for credit and loan losses for the periods indicated (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Allowance for credit losses, balance at the beginning of period | | $ | 128,279 |
| | $ | 124,926 |
| | $ | 128,840 |
| | $ | 133,255 |
| | $ | 135,975 |
|
| Provision for credit losses | | — |
| | 1,000 |
| | (13,000 | ) | | — |
| | 3,100 |
|
| Charge-offs: | | | | | | | | | | |
| Commercial loans | | 911 |
| | 343 |
| | 75 |
| | 1,451 |
| | 539 |
|
| Commercial loans collateralized by assignment of lease payments (lease loans) | | — |
| | 1 |
| | — |
| | 1,720 |
| | — |
|
| Commercial real estate loans | | 1,917 |
| | 2,965 |
| | 2,994 |
| | 2,415 |
| | 3,003 |
|
| Construction real estate | | 962 |
| | 56 |
| | 71 |
| | 444 |
| | 3,436 |
|
| Residential real estate | | 82 |
| | 1,068 |
| | 474 |
| | 1,108 |
| | 294 |
|
| Indirect vehicle | | 729 |
| | 623 |
| | 433 |
| | 488 |
| | 715 |
|
| Home equity | | 787 |
| | 1,394 |
| | 1,209 |
| | 876 |
| | 1,072 |
|
| Consumer loans | | 565 |
| | 485 |
| | 332 |
| | 274 |
| | 258 |
|
| Total charge-offs | | 5,953 |
| | 6,935 |
| | 5,588 |
| | 8,776 |
| | 9,317 |
|
| Recoveries: | | | | | | | | | | |
| Commercial loans | | 452 |
| | 745 |
| | 306 |
| | 386 |
| | 2,038 |
|
| Commercial loans collateralized by assignment of lease payments (lease loans) | | 144 |
| | 6,260 |
| | 111 |
| | 93 |
| | 256 |
|
| Commercial real estate loans | | 740 |
| | 871 |
| | 12,893 |
| | 3,061 |
| | 162 |
|
| Construction real estate | | 214 |
| | 561 |
| | 752 |
| | 141 |
| | 565 |
|
| Residential real estate | | 276 |
| | 271 |
| | 8 |
| | 188 |
| | 34 |
|
| Indirect vehicle | | 415 |
| | 261 |
| | 224 |
| | 300 |
| | 311 |
|
| Home equity | | 114 |
| | 248 |
| | 303 |
| | 100 |
| | 20 |
|
| Consumer loans | | 52 |
| | 71 |
| | 77 |
| | 92 |
| | 111 |
|
| Total recoveries | | 2,407 |
| | 9,288 |
| | 14,674 |
| | 4,361 |
| | 3,497 |
|
| Total net charge-offs (recoveries) | | 3,546 |
| | (2,353 | ) | | (9,086 | ) | | 4,415 |
| | 5,820 |
|
| Allowance for credit losses | | 124,733 |
| | 128,279 |
| | 124,926 |
| | 128,840 |
| | 133,255 |
|
| Allowance for unfunded credit commitments | | (2,931 | ) | | (4,075 | ) | | (3,744 | ) | | (7,084 | ) | | (7,824 | ) |
| Allowance for loan losses | | $ | 121,802 |
| | $ | 124,204 |
| | $ | 121,182 |
| | $ | 121,756 |
| | $ | 125,431 |
|
| | | | | | | | | | | |
| Total loans, excluding loans held for sale | | $ | 5,707,668 |
| | $ | 5,766,930 |
| | $ | 5,624,845 |
| | $ | 5,723,249 |
| | $ | 5,789,765 |
|
| Average loans, excluding loans held for sale | | $ | 5,668,359 |
| | $ | 5,604,837 |
| | $ | 5,630,232 |
| | $ | 5,712,630 |
| | $ | 5,802,037 |
|
| Ratio of allowance for loan losses to total loans, excluding loans held for sale | | 2.13 | % | | 2.15 | % | | 2.15 | % | | 2.13 | % | | 2.17 | % |
| Net loan charge-offs (recoveries) to average loans, excluding loans held for sale (annualized) | | 0.25 | % | | (0.17 | )% | | (0.64 | )% | | 0.31 | % | | 0.40 | % |
The following table presents the three elements of our allowance for loan losses (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Commercial related loans: | | | | | | | | | | |
| General reserve | | $ | 92,527 |
| | $ | 91,745 |
| | $ | 95,586 |
| | $ | 93,904 |
| | $ | 98,673 |
|
| Specific reserve | | 12,043 |
| | 13,231 |
| | 11,300 |
| | 13,674 |
| | 13,734 |
|
| Consumer related reserve | | 17,232 |
| | 19,228 |
| | 14,296 |
| | 14,178 |
| | 13,024 |
|
| Total allowance for loan losses | | $ | 121,802 |
| | $ | 124,204 |
| | $ | 121,182 |
| | $ | 121,756 |
| | $ | 125,431 |
|
Although management believes that adequate loan loss allowances have been established, actual losses are dependent upon future events and, as such, further additions to the level of loan loss allowances may become necessary.
INVESTMENT SECURITIES
The following table sets forth, by type, the fair value and amortized cost of our investment securities, excluding FHLB and FRB stock, as well as the unrealized gain of our investment securities available for sale (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Securities available for sale: | | | | | | | | | | |
| Fair value | | | | | | | | | | |
| Government sponsored agencies and enterprises | | $ | 40,949 |
| | $ | 41,315 |
| | $ | 42,187 |
| | $ | 42,175 |
| | $ | 42,070 |
|
| States and political subdivisions | | 719,761 |
| | 725,019 |
| | 668,966 |
| | 629,173 |
| | 581,720 |
|
| Mortgage-backed securities | | 842,605 |
| | 993,328 |
| | 1,075,962 |
| | 1,035,473 |
| | 1,193,248 |
|
| Corporate bonds | | 197,675 |
| | 96,674 |
| | 16,626 |
| | 5,569 |
| | 5,686 |
|
| Equity securities | | 11,179 |
| | 11,835 |
| | 11,231 |
| | 11,081 |
| | 10,887 |
|
| Total fair value | | $ | 1,812,169 |
| | $ | 1,868,171 |
| | $ | 1,814,972 |
| | $ | 1,723,471 |
| | $ | 1,833,611 |
|
| | | | | | | | | | | |
| Amortized cost | | | | | | | | | | |
| Government sponsored agencies and enterprises | | $ | 38,478 |
| | $ | 38,605 |
| | $ | 39,233 |
| | $ | 39,366 |
| | $ | 39,503 |
|
| States and political subdivisions | | 680,978 |
| | 679,991 |
| | 620,489 |
| | 589,654 |
| | 547,262 |
|
| Mortgage-backed securities | | 827,384 |
| | 981,513 |
| | 1,060,665 |
| | 1,014,186 |
| | 1,168,340 |
|
| Corporate bonds | | 197,162 |
| | 97,014 |
| | 16,617 |
| | 5,569 |
| | 5,686 |
|
| Equity securities | | 10,820 |
| | 11,398 |
| | 10,644 |
| | 10,584 |
| | 10,520 |
|
| Total amortized cost | | $ | 1,754,822 |
| | $ | 1,808,521 |
| | $ | 1,747,648 |
| | $ | 1,659,359 |
| | $ | 1,771,311 |
|
| | | | | | | | | | | |
| Unrealized gain | | | | | | | | | | |
| Government sponsored agencies and enterprises | | $ | 2,471 |
| | $ | 2,710 |
| | $ | 2,954 |
| | $ | 2,809 |
| | $ | 2,567 |
|
| States and political subdivisions | | 38,783 |
| | 45,028 |
| | 48,477 |
| | 39,519 |
| | 34,458 |
|
| Mortgage-backed securities | | 15,221 |
| | 11,815 |
| | 15,297 |
| | 21,287 |
| | 24,908 |
|
| Corporate bonds | | 513 |
| | (340 | ) | | 9 |
| | — |
| | — |
|
| Equity securities | | 359 |
| | 437 |
| | 587 |
| | 497 |
| | 367 |
|
| Total unrealized gain | | $ | 57,347 |
| | $ | 59,650 |
| | $ | 67,324 |
| | $ | 64,112 |
| | $ | 62,300 |
|
| | | | | | | | | | | |
| Securities held to maturity, at cost: | | | | | | | | | | |
| States and political subdivisions | | $ | 262,310 |
| | $ | 237,563 |
| | $ | 238,211 |
| | $ | 238,869 |
| | $ | 239,526 |
|
| Mortgage-backed securities | | 255,475 |
| | 255,858 |
| | 257,640 |
| | 258,931 |
| | 259,241 |
|
| Total amortized cost | | $ | 517,785 |
| | $ | 493,421 |
| | $ | 495,851 |
| | $ | 497,800 |
| | $ | 498,767 |
|
We do not have any meaningful direct or indirect holdings of subprime residential mortgage loans, home equity lines of credit, or any Fannie Mae or Freddie Mac preferred or common equity securities in our investment securities portfolio. Additionally, more than 95% of our mortgage-backed securities are agency guaranteed.
DEPOSIT MIX
The following table shows the composition of deposits as of the dates indicated (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| | | Amount | | % of Total | | Amount | | % of Total | | Amount | | % of Total | | Amount | | % of Total | | Amount | | % of Total |
| Low cost deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | $ | 2,067,310 |
| | 28 | % | | $ | 2,164,547 |
| | 29 | % | | $ | 2,011,542 |
| | 27 | % | | $ | 1,946,468 |
| | 26 | % | | $ | 1,874,028 |
| | 25 | % |
| Money market and NOW accounts | | 2,778,916 |
| | 37 | % | | 2,747,273 |
| | 36 | % | | 2,682,608 |
| | 36 | % | | 2,564,493 |
| | 34 | % | | 2,702,636 |
| | 35 | % |
| Savings accounts | | 833,251 |
| | 11 | % | | 811,333 |
| | 11 | % | | 797,741 |
| | 10 | % | | 790,350 |
| | 11 | % | | 786,357 |
| | 10 | % |
| Total low cost deposits | | 5,679,477 |
| | 76 | % | | 5,723,153 |
| | 76 | % | | 5,491,891 |
| | 73 | % | | 5,301,311 |
| | 71 | % | | 5,363,021 |
| | 70 | % |
| Certificates of deposit: | | | | | | | | | | | | | | | | | | | | |
| Certificates of deposit | | 1,478,039 |
| | 20 | % | | 1,525,366 |
| | 20 | % | | 1,632,370 |
| | 22 | % | | 1,718,266 |
| | 23 | % | | 1,820,266 |
| | 24 | % |
| Brokered deposit accounts | | 294,390 |
| | 4 | % | | 294,178 |
| | 4 | % | | 355,086 |
| | 5 | % | | 451,132 |
| | 6 | % | | 451,415 |
| | 6 | % |
| Total certificates of deposit | | 1,772,429 |
| | 24 | % | | 1,819,544 |
| | 24 | % | | 1,987,456 |
| | 27 | % | | 2,169,398 |
| | 29 | % | | 2,271,681 |
| | 30 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | $ | 7,451,906 |
| | 100 | % | | $ | 7,542,697 |
| | 100 | % | | $ | 7,479,347 |
| | 100 | % | | $ | 7,470,709 |
| | 100 | % | | $ | 7,634,702 |
| | 100 | % |
Our deposit mix improved over the past twelve months as low cost deposits increased by 5.9% and comprised 76% of total deposits at March 31, 2013 compared to 70% at March 31, 2012 driven by noninterest bearing deposit inflows.
CAPITAL
Tangible book value per common share increased to $15.57 at March 31, 2013 compared to $14.81 a year ago primarily due to retained net income. Our regulatory capital ratios remain strong and MB Financial Bank, N.A. was categorized as “well capitalized” at March 31, 2013 under the Prompt Corrective Action (“PCA”) provisions.
FORWARD-LOOKING STATEMENTS
When used in this press release and in reports filed with or furnished to the Securities and Exchange Commission, in other press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These statements may relate to our future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial items. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.
Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) expected revenues, cost savings, synergies and other benefits from our merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (2) the possibility that the expected benefits of the FDIC-assisted and other transactions we previously completed will not be realized; (3) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses, which could necessitate additional provisions for loan losses, resulting both from loans we originate and loans we acquire from other financial institutions; (4) results of examinations by the Office of Comptroller of Currency, the Board of Governors of the Federal Reserve System and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loan losses or write-down assets; (5) competitive pressures among depository institutions; (6) interest rate movements and their impact on customer behavior and net interest margin; (7) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (8) fluctuations in real estate values; (9) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (10) our ability to realize the residual values of our direct finance, leveraged, and operating leases; (11) our ability to access cost-effective funding; (12) changes in financial markets; (13) changes in economic conditions in general and in the Chicago metropolitan area in particular; (14) the costs, effects and outcomes of litigation; (15) new legislation or regulatory changes, including but not limited to the Dodd-Frank Act and regulations adopted thereunder, any changes in capital requirements pursuant to the Dodd-Frank Act and the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (16) changes in accounting principles, policies or guidelines; (17) our future acquisitions of other depository institutions or lines of business; and (18) future goodwill impairment due to changes in our business, changes in market conditions, or other factors.
We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statement is made.
TABLES TO FOLLOW
MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
As of the dates indicated
(Dollars in thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| ASSETS | | |
| | |
| | |
| | |
| | |
|
| Cash and due from banks | | $ | 131,146 |
| | $ | 176,010 |
| | $ | 129,326 |
| | $ | 132,737 |
| | $ | 128,411 |
|
| Interest earning deposits with banks | | 108,885 |
| | 111,533 |
| | 327,301 |
| | 304,075 |
| | 272,553 |
|
| Total cash and cash equivalents | | 240,031 |
| | 287,543 |
| | 456,627 |
| | 436,812 |
| | 400,964 |
|
| Investment securities: | | | | | | | | | | |
| Securities available for sale, at fair value | | 1,812,169 |
| | 1,868,171 |
| | 1,814,972 |
| | 1,723,471 |
| | 1,833,611 |
|
| Securities held to maturity, at amortized cost | | 517,785 |
| | 493,421 |
| | 495,851 |
| | 497,800 |
| | 498,767 |
|
| Non-marketable securities - FHLB and FRB Stock | | 52,434 |
| | 55,385 |
| | 57,653 |
| | 61,462 |
| | 65,541 |
|
| Total investment securities | | 2,382,388 |
| | 2,416,977 |
| | 2,368,476 |
| | 2,282,733 |
| | 2,397,919 |
|
| Loans held for sale | | 3,030 |
| | 7,492 |
| | 7,221 |
| | 2,290 |
| | 3,364 |
|
| Loans: | | | | | | | | | | |
| Total loans, excluding covered loans | | 5,306,879 |
| | 5,317,080 |
| | 5,128,683 |
| | 5,170,411 |
| | 5,169,237 |
|
| Covered loans | | 400,789 |
| | 449,850 |
| | 496,162 |
| | 552,838 |
| | 620,528 |
|
| Total loans | | 5,707,668 |
| | 5,766,930 |
| | 5,624,845 |
| | 5,723,249 |
| | 5,789,765 |
|
| Less: Allowance for loan losses | | 121,802 |
| | 124,204 |
| | 121,182 |
| | 121,756 |
| | 125,431 |
|
| Net loans | | 5,585,866 |
| | 5,642,726 |
| | 5,503,663 |
| | 5,601,493 |
| | 5,664,334 |
|
| Lease investments, net | | 117,744 |
| | 129,823 |
| | 113,180 |
| | 111,122 |
| | 124,748 |
|
| Premises and equipment, net | | 219,662 |
| | 221,533 |
| | 214,301 |
| | 214,935 |
| | 212,589 |
|
| Cash surrender value of life insurance | | 129,723 |
| | 128,879 |
| | 127,985 |
| | 127,096 |
| | 126,226 |
|
| Goodwill | | 423,369 |
| | 423,369 |
| | 387,069 |
| | 387,069 |
| | 387,069 |
|
| Other intangibles | | 27,968 |
| | 29,512 |
| | 25,735 |
| | 26,986 |
| | 28,237 |
|
| Other real estate owned, net | | 31,462 |
| | 36,977 |
| | 42,427 |
| | 49,690 |
| | 63,077 |
|
| Other real estate owned related to FDIC transactions | | 20,011 |
| | 22,478 |
| | 32,607 |
| | 43,807 |
| | 53,703 |
|
| FDIC indemnification asset | | 29,197 |
| | 39,345 |
| | 36,311 |
| | 56,637 |
| | 72,161 |
|
| Other assets | | 175,379 |
| | 185,151 |
| | 147,943 |
| | 148,896 |
| | 137,209 |
|
| Total assets | | $ | 9,385,830 |
| | $ | 9,571,805 |
| | $ | 9,463,545 |
| | $ | 9,489,566 |
| | $ | 9,671,600 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| | |
| | |
| | |
| | |
|
| Liabilities | | |
| | |
| | |
| | |
| | |
|
| Deposits: | | |
| | |
| | |
| | |
| | |
|
| Noninterest bearing | | $ | 2,067,310 |
| | $ | 2,164,547 |
| | $ | 2,011,542 |
| | $ | 1,946,468 |
| | $ | 1,874,028 |
|
| Interest bearing | | 5,384,596 |
| | 5,378,150 |
| | 5,467,805 |
| | 5,524,241 |
| | 5,760,674 |
|
| Total deposits | | 7,451,906 |
| | 7,542,697 |
| | 7,479,347 |
| | 7,470,709 |
| | 7,634,702 |
|
| Short-term borrowings | | 224,379 |
| | 220,602 |
| | 289,613 |
| | 261,729 |
| | 269,691 |
|
| Long-term borrowings | | 64,019 |
| | 116,050 |
| | 118,798 |
| | 221,100 |
| | 256,456 |
|
| Junior subordinated notes issued to capital trusts | | 152,065 |
| | 152,065 |
| | 152,065 |
| | 158,521 |
| | 158,530 |
|
| Accrued expenses and other liabilities | | 198,658 |
| | 264,621 |
| | 162,892 |
| | 139,756 |
| | 136,791 |
|
| Total liabilities | | 8,091,027 |
| | 8,296,035 |
| | 8,202,715 |
| | 8,251,815 |
| | 8,456,170 |
|
| Stockholders' Equity | | | | | | | | | | |
| Common stock | | 550 |
| | 550 |
| | 550 |
| | 549 |
| | 549 |
|
| Additional paid-in capital | | 734,057 |
| | 732,771 |
| | 731,679 |
| | 732,297 |
| | 732,613 |
|
| Retained earnings | | 527,332 |
| | 507,933 |
| | 489,426 |
| | 466,812 |
| | 445,233 |
|
| Accumulated other comprehensive income | | 34,928 |
| | 36,326 |
| | 40,985 |
| | 39,035 |
| | 37,935 |
|
| Treasury stock | | (3,529 | ) | | (3,293 | ) | | (3,304 | ) | | (3,353 | ) | | (3,326 | ) |
| Controlling interest stockholders' equity | | 1,293,338 |
| | 1,274,287 |
| | 1,259,336 |
| | 1,235,340 |
| | 1,213,004 |
|
| Noncontrolling interest | | 1,465 |
| | 1,483 |
| | 1,494 |
| | 2,411 |
| | 2,426 |
|
| Total stockholders' equity | | 1,294,803 |
| | 1,275,770 |
| | 1,260,830 |
| | 1,237,751 |
| | 1,215,430 |
|
| Total liabilities and stockholders' equity | | $ | 9,385,830 |
| | $ | 9,571,805 |
| | $ | 9,463,545 |
| | $ | 9,489,566 |
| | $ | 9,671,600 |
|
MB FINANCIAL, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data) (Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Interest income: | | | | | | | | | | |
| Loans | | $ | 60,793 |
| | $ | 63,328 |
| | $ | 67,482 |
| | $ | 69,250 |
| | $ | 71,648 |
|
| Investment securities: | | | | | | | | | | |
| Taxable | | 6,140 |
| | 6,371 |
| | 7,287 |
| | 8,882 |
| | 10,884 |
|
| Nontaxable | | 8,060 |
| | 7,687 |
| | 7,582 |
| | 7,303 |
| | 6,739 |
|
| Other interest earning accounts | | 135 |
| | 228 |
| | 312 |
| | 158 |
| | 169 |
|
| Total interest income | | 75,128 |
| | 77,614 |
| | 82,663 |
| | 85,593 |
| | 89,440 |
|
| Interest expense: | |
| | | | | | | | |
| Deposits | | 5,709 |
| | 6,066 |
| | 7,374 |
| | 8,058 |
| | 8,760 |
|
| Short-term borrowings | | 167 |
| | 294 |
| | 342 |
| | 362 |
| | 206 |
|
| Long-term borrowings and junior subordinated notes | | 1,567 |
| | 1,738 |
| | 2,872 |
| | 3,069 |
| | 3,381 |
|
| Total interest expense | | 7,443 |
| | 8,098 |
| | 10,588 |
| | 11,489 |
| | 12,347 |
|
| Net interest income | | 67,685 |
| | 69,516 |
| | 72,075 |
| | 74,104 |
| | 77,093 |
|
| Provision for credit losses | | — |
| | 1,000 |
| | (13,000 | ) | | — |
| | 3,100 |
|
| Net interest income after provision for credit losses | | 67,685 |
| | 68,516 |
| | 85,075 |
| | 74,104 |
| | 73,993 |
|
| Non-interest income: | |
|
| | |
| | |
| | |
| | |
|
| Capital markets and international banking service fees | | 808 |
| | 2,386 |
| | 1,400 |
| | 788 |
| | 512 |
|
| Commercial deposit and treasury management fees | | 5,966 |
| | 6,095 |
| | 5,860 |
| | 5,784 |
| | 5,897 |
|
| Lease financing, net | | 16,263 |
| | 12,419 |
| | 9,671 |
| | 7,334 |
| | 6,958 |
|
| Trust and asset management fees | | 4,494 |
| | 4,623 |
| | 4,428 |
| | 4,535 |
| | 4,404 |
|
| Card fees | | 2,695 |
| | 2,505 |
| | 2,388 |
| | 2,429 |
| | 2,046 |
|
| Loan service fees | | 1,011 |
| | 2,436 |
| | 1,075 |
| | 1,267 |
| | 1,067 |
|
| Consumer and other deposit service fees | | 3,246 |
| | 3,655 |
| | 3,786 |
| | 3,534 |
| | 3,453 |
|
| Brokerage fees | | 1,157 |
| | 1,088 |
| | 1,185 |
| | 1,264 |
| | 1,255 |
|
| Net (loss) gain on securities available for sale | | (1 | ) | | 311 |
| | 281 |
| | (34 | ) | | (3 | ) |
| Increase in cash surrender value of life insurance | | 844 |
| | 893 |
| | 890 |
| | 870 |
| | 917 |
|
| Net loss on sale of assets | | — |
| | (905 | ) | | (12 | ) | | (8 | ) | | (17 | ) |
| Accretion of FDIC indemnification asset | | 143 |
| | 154 |
| | 204 |
| | 222 |
| | 475 |
|
| Net loss recognized on other real estate owned | | (330 | ) | | (1,626 | ) | | (3,938 | ) | | (5,441 | ) | | (6,589 | ) |
| Net gain on sale of loans | | 639 |
| | 822 |
| | 575 |
| | 554 |
| | 374 |
|
| Other operating income | | 1,438 |
| | 1,429 |
| | 760 |
| | 809 |
| | 2,105 |
|
| Total non-interest income | | 38,373 |
| | 36,285 |
| | 28,553 |
| | 23,907 |
| | 22,854 |
|
| Non-interest expense: | | | | |
| | |
| | |
| | |
|
| Salaries and employee benefits | | 43,514 |
| | 43,038 |
| | 42,083 |
| | 40,146 |
| | 40,429 |
|
| Occupancy and equipment expense | | 9,404 |
| | 8,774 |
| | 8,274 |
| | 9,188 |
| | 9,570 |
|
| Computer services and telecommunication expense | | 3,887 |
| | 4,160 |
| | 3,777 |
| | 3,909 |
| | 3,653 |
|
| Advertising and marketing expense | | 2,103 |
| | 2,335 |
| | 1,936 |
| | 1,839 |
| | 2,073 |
|
| Professional and legal expense | | 1,295 |
| | 1,640 |
| | 1,554 |
| | 1,503 |
| | 1,413 |
|
| Other intangible amortization expense | | 1,544 |
| | 1,251 |
| | 1,251 |
| | 1,251 |
| | 1,257 |
|
| Branch impairment charges | | — |
| | 1,432 |
| | 758 |
| | — |
| | — |
|
| Other real estate expense, net | | 139 |
| | 449 |
| | 874 |
| | 424 |
| | 1,243 |
|
| Prepayment fees on interest bearing liabilities | | — |
| | — |
| | 12,682 |
| | — |
| | — |
|
| Other operating expenses | | 9,213 |
| | 8,027 |
| | 7,976 |
| | 8,574 |
| | 7,693 |
|
| Total non-interest expense | | 71,099 |
| | 71,106 |
| | 81,165 |
| | 66,834 |
| | 67,331 |
|
| Income before income taxes | | 34,959 |
| | 33,695 |
| | 32,463 |
| | 31,177 |
| | 29,516 |
|
| Income tax expense | | 10,053 |
| | 9,683 |
| | 9,330 |
| | 9,034 |
| | 8,430 |
|
| Net income | | 24,906 |
| | 24,012 |
| | 23,133 |
| | 22,143 |
| | 21,086 |
|
| Dividends and discount accretion on preferred shares | | — |
| | — |
| | — |
| | — |
| | 3,269 |
|
| Net income available to common stockholders | | $ | 24,906 |
| | $ | 24,012 |
| | $ | 23,133 |
| | $ | 22,143 |
| | $ | 17,817 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Common share data: | | | | | | | | | | |
| Basic earnings per common share | | $ | 0.46 |
| | $ | 0.44 |
| | $ | 0.43 |
| | $ | 0.41 |
| | $ | 0.33 |
|
| | | | | | | | | | | |
| Diluted earnings per common share | | 0.46 |
| | 0.44 |
| | 0.42 |
| | 0.41 |
| | 0.33 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for basic earnings per common share | | 54,411,806 |
| | 54,401,504 |
| | 54,346,827 |
| | 54,174,717 |
| | 54,155,856 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for diluted earnings per common share | | 54,736,644 |
| | 54,597,737 |
| | 54,556,517 |
| | 54,448,709 |
| | 54,411,916 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Selected Financial Data: | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Performance Ratios: | | | | | | | | | | |
| Annualized return on average assets | | 1.07 | % | | 1.01 | % | | 0.97 | % | | 0.94 | % | | 0.87 | % |
| Annualized return on average equity | | 7.89 |
| | 7.55 |
| | 7.38 |
| | 7.28 |
| | 5.94 |
|
Annualized cash return on average tangible equity(1) | | 12.53 |
| | 11.47 |
| | 11.29 |
| | 11.28 |
| | 9.36 |
|
| Net interest rate spread | | 3.44 |
| | 3.41 |
| | 3.48 |
| | 3.65 |
| | 3.67 |
|
Cost of funds(2) | | 0.38 |
| | 0.40 |
| | 0.52 |
| | 0.57 |
| | 0.60 |
|
Efficiency ratio(3) | | 63.10 |
| | 61.16 |
| | 61.43 |
| | 61.36 |
| | 60.04 |
|
Annualized net non-interest expense to average assets(4) | | 1.37 |
| | 1.29 |
| | 1.46 |
| | 1.57 |
| | 1.54 |
|
Core non-interest income to revenues (5) | | 34.56 |
| | 34.18 |
| | 29.49 |
| | 27.49 |
| | 26.46 |
|
| Net interest margin | | 3.32 |
| | 3.31 |
| | 3.42 |
| | 3.59 |
| | 3.64 |
|
| Tax equivalent effect | | 0.27 |
| | 0.26 |
| | 0.25 |
| | 0.24 |
| | 0.23 |
|
Net interest margin - fully tax equivalent basis(6) | | 3.59 |
| | 3.57 |
| | 3.67 |
| | 3.83 |
| | 3.87 |
|
| Asset Quality Ratios: | | | | | | | | | | |
Non-performing loans(7) to total loans | | 2.00 | % | | 2.03 | % | | 1.87 | % | | 1.98 | % | | 2.15 | % |
Non-performing assets(7) to total assets | | 1.56 |
| | 1.62 |
| | 1.56 |
| | 1.72 |
| | 1.94 |
|
Allowance for loan losses to non-performing loans(7) | | 106.88 |
| | 106.17 |
| | 115.10 |
| | 107.25 |
| | 100.59 |
|
| Allowance for loan losses to total loans | | 2.13 |
| | 2.15 |
| | 2.15 |
| | 2.13 |
| | 2.17 |
|
| Net loan charge-offs (recoveries) to average loans (annualized) | | 0.25 |
| | (0.17 | ) | | (0.64 | ) | | 0.31 |
| | 0.40 |
|
| Capital Ratios: | | | | | | | | | | |
Tangible equity to tangible assets(8) | | 9.54 | % | | 9.13 | % | | 9.46 | % | | 9.17 | % | | 8.74 | % |
Tangible common equity to risk weighted assets(9) | | 13.29 |
| | 13.07 |
| | 14.16 |
| | 13.67 |
| | 13.17 |
|
Book value per common share(10) | | $ | 23.63 |
| | $ | 23.29 |
| | $ | 23.01 |
| | $ | 22.64 |
| | $ | 22.23 |
|
| Less: goodwill and other intangible assets, net of benefit, per common share | | 8.06 |
| | 8.08 |
| | 7.37 |
| | 7.40 |
| | 7.42 |
|
Tangible book value per common share(11) | | $ | 15.57 |
| | $ | 15.21 |
| | $ | 15.64 |
| | $ | 15.24 |
| | $ | 14.81 |
|
| | | | | | | | | | | |
| Total capital (to risk-weighted assets) | | 16.22 | % | | 16.62 | % | | 17.91 | % | | 17.53 | % | | 17.10 | % |
| Tier 1 capital (to risk-weighted assets) | | 14.96 |
| | 14.73 |
| | 15.83 |
| | 15.45 |
| | 15.02 |
|
| Tier 1 capital (to average assets) | | 10.74 |
| | 10.50 |
| | 10.60 |
| | 10.46 |
| | 9.99 |
|
| Tier 1 common capital (to risk-weighted assets) | | 12.66 |
| | 12.42 |
| | 13.39 |
| | 12.93 |
| | 12.54 |
|
| |
| (1) | Net cash flow available to common stockholders (net income available to common stockholders, plus other intangibles amortization expense, net of tax benefit) divided by average tangible equity (average equity less average goodwill and average other intangibles, net of tax benefit). |
| |
| (2) | Equals total interest expense divided by the sum of average interest bearing liabilities and noninterest bearing deposits. |
| |
| (3) | Equals total non-interest expense excluding non-core items divided by the sum of net interest income on a fully tax equivalent basis, total non-interest income less non-core items, and tax equivalent adjustment on the increase in cash surrender value of life insurance. |
| |
| (4) | Equals total non-interest expense excluding non-core items less total non-interest income excluding non-core items, and including tax equivalent adjustment on the increase in cash surrender value of life insurance divided by average assets. |
| |
| (5) | Equals total non-interest income excluding non-core items and tax equivalent adjustment on the increase in cash surrender value of life insurance divided by the sum of net interest income on a fully tax equivalent basis, total non-interest income less non-core items, and tax equivalent adjustment on the increase in cash surrender value of life insurance. |
| |
| (6) | Represents net interest income, on a fully tax equivalent basis assuming a 35% tax rate, as a percentage of average interest earning assets. |
| |
| (7) | Non-performing loans excludes purchased credit-impaired loans and loans held for sale. Non-performing assets excludes purchased credit-impaired loans, loans held for sale, and other real estate owned related to FDIC transactions. |
| |
| (8) | Equals total ending stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total assets less goodwill and other intangibles, net of tax benefit. |
| |
| (9) | Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total risk-weighted assets. |
| |
| (10) | Equals total ending stockholders’ equity divided by common shares outstanding. |
| |
| (11) | Equals total ending stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by common shares outstanding. |
NON-GAAP FINANCIAL INFORMATION
This press release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). These measures include core non-interest income, core non-interest income to revenues (with non-core items excluded from both core non-interest income and revenues), core non-interest expense, non-core non-interest income and non-core non-interest expense, net interest income on a fully tax equivalent basis, net interest margin on a fully tax equivalent basis, efficiency ratio and the ratio of annualized net non-interest expense to average assets with net gains and losses on investment securities, net losses on sale of other assets, net losses on other real estate owned, and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the non-interest income components of these ratios, prepayment fees on interest bearing liabilities, impairment charges and increase (decrease) in market value of assets held in trust for deferred compensation excluded from the non-interest expense components of these ratios, with tax equivalent adjustment for tax-exempt interest income and increase in cash surrender value of life insurance, as applicable; ratios of tangible equity to tangible assets, tangible common equity to risk-weighted assets and Tier 1 common capital to risk-weighted assets; tangible book value per common share; and annualized cash return on average tangible common equity. Our management uses these non-GAAP measures, together with the related GAAP measures, in its analysis of our performance and in making business decisions. Management also uses these measures for peer comparisons.
Management believes that core and non-core non-interest income and non-interest expense are useful in assessing our core operating performance and in understanding the primary drivers of our non-interest income and non-interest expense when comparing periods.
The tax equivalent adjustment to net interest income, net interest margin, tax-exempt interest income and increase in cash surrender value of life insurance recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a 35% tax rate. Management believes that it is a standard practice in the banking industry to present net interest income and net interest margin on a fully tax equivalent basis, and accordingly believes that providing these measures may be useful for peer comparison purposes. For the same reasons, management believes the tax equivalent adjustments to tax-exempt interest income and increase in cash surrender value of life insurance are useful.
Management also believes that by excluding net gains and losses on investment securities, net losses on sale of other assets, net losses on other real estate owned and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest income components, and excluding prepayment fees on interest bearing liabilities, impairment changes and increase (decrease) in market value of assets held in trust for deferred compensation from the non-interest expense components, of the efficiency ratio and the ratio of annualized net non-interest expense to average assets, these ratios better reflect our core operating performance, as the excluded items do not pertain to our core business operations and their exclusion makes these ratios more meaningful when comparing our operating results from period to period.
In addition, management believes that presenting the ratio of Tier 1 common equity to risk-weighted assets is useful for assessing our capital strength and for peer comparison purposes. The other measures exclude the acquisition-related goodwill and other intangible assets, net of tax benefit, in determining tangible assets, tangible equity, tangible common equity and average tangible common equity and exclude other intangible amortization expense, net of tax benefit, in determining net cash flow available to common stockholders. Management believes the presentation of these other financial measures excluding the impact of such items provides useful supplemental information that is helpful in understanding our financial results, as they provide a method to assess management’s success in utilizing our tangible capital as well as our capital strength. Management also believes that providing measures that exclude balances of acquisition-related goodwill and other intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that these are standard financial measures used in the banking industry to evaluate performance.
The non-GAAP disclosures contained herein should not be viewed as substitutes for the results determined to be in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
A reconciliation of net interest margin on a fully tax equivalent basis to net interest margin is contained in the tables under “Net Interest Margin.” A reconciliation of tangible book value per common share to book value per common share is contained in the “Selected Financial Ratios” table. Reconciliations of core and non-core non-interest income and non-interest expense to non-interest income and non-interest expense are contained in the tables under “Results of Operations—First Quarter Results.”
The following table presents a reconciliation of tangible equity to equity (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Stockholders' equity - as reported | | $ | 1,294,803 |
| | $ | 1,275,770 |
| | $ | 1,260,830 |
| | $ | 1,237,751 |
| | $ | 1,215,430 |
|
| Less: goodwill | | 423,369 |
| | 423,369 |
| | 387,069 |
| | 387,069 |
| | 387,069 |
|
| Less: other intangible assets, net of tax benefit | | 18,179 |
| | 19,183 |
| | 16,728 |
| | 17,541 |
| | 18,354 |
|
| Tangible equity | | $ | 853,255 |
| | $ | 833,218 |
| | $ | 857,033 |
| | $ | 833,141 |
| | $ | 810,007 |
|
The following table presents a reconciliation of tangible assets to total assets (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Total assets - as reported | | $ | 9,385,830 |
| | $ | 9,571,805 |
| | $ | 9,463,545 |
| | $ | 9,489,566 |
| | $ | 9,671,600 |
|
| Less: goodwill | | 423,369 |
| | 423,369 |
| | 387,069 |
| | 387,069 |
| | 387,069 |
|
| Less: other intangible assets, net of tax benefit | | 18,179 |
| | 19,183 |
| | 16,728 |
| | 17,541 |
| | 18,354 |
|
| Tangible assets | | $ | 8,944,282 |
| | $ | 9,129,253 |
| | $ | 9,059,748 |
| | $ | 9,084,956 |
| | $ | 9,266,177 |
|
The following table presents a reconciliation of average tangible equity to average common stockholders’ equity (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Average common stockholders' equity - as reported | | $ | 1,280,921 |
| | $ | 1,264,772 |
| | $ | 1,247,846 |
| | $ | 1,223,667 |
| | $ | 1,206,364 |
|
| Less: average goodwill | | 423,369 |
| | 387,464 |
| | 387,069 |
| | 387,069 |
| | 387,069 |
|
| Less: average other intangible assets, net of tax benefit | | 18,611 |
| | 16,238 |
| | 17,018 |
| | 17,903 |
| | 18,721 |
|
| Average tangible common equity | | $ | 838,941 |
| | $ | 861,070 |
| | $ | 843,759 |
| | $ | 818,695 |
| | $ | 800,574 |
|
The following table presents a reconciliation of net cash flow available to common stockholders to net income available to common stockholders (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Net income available to common stockholders - as reported | | $ | 24,906 |
| | $ | 24,012 |
| | $ | 23,133 |
| | $ | 22,143 |
| | $ | 17,817 |
|
| | | Add: other intangible amortization expense, net of tax benefit | | 1,004 |
| | 813 |
| | 813 |
| | 813 |
| | 817 |
|
| Net cash flow available to common stockholders | | $ | 25,910 |
| | $ | 24,825 |
| | $ | 23,946 |
| | $ | 22,956 |
| | $ | 18,634 |
|
The following table presents a reconciliation of Tier 1 common capital to Tier 1 capital (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2013 | | 12/31/2012 | | 9/30/2012 | | 6/30/2012 | | 3/31/2012 |
| Tier 1 capital - as reported | | $ | 960,803 |
| | $ | 939,087 |
| | $ | 958,123 |
| | $ | 941,888 |
| | $ | 925,089 |
|
| Less: qualifying trust preferred securities | | 147,500 |
| | 147,500 |
| | 147,500 |
| | 153,500 |
| | 153,500 |
|
| Tier 1 common capital | | $ | 813,303 |
| | $ | 791,587 |
| | $ | 810,623 |
| | $ | 788,388 |
| | $ | 771,589 |
|
Efficiency Ratio Calculation (Dollars in Thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Non-interest expense | | $ | 71,099 |
| | $ | 71,106 |
| | $ | 81,165 |
| | $ | 66,834 |
| | $ | 67,331 |
|
| Adjustment for prepayment fees on interest bearing liabilities | | — |
| | — |
| | 12,682 |
| | — |
| | — |
|
| Adjustment for impairment charges | | — |
| | 1,432 |
| | 758 |
| | — |
| | — |
|
| Adjustment for increase (decrease) in market value of assets held in trust for deferred compensation | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Non-interest expense - as adjusted | | $ | 70,616 |
| | $ | 69,570 |
| | $ | 67,370 |
| | $ | 66,983 |
| | $ | 66,830 |
|
| | | | | | | | | | | |
| Net interest income | | $ | 67,685 |
| | $ | 69,516 |
| | $ | 72,075 |
| | $ | 74,104 |
| | $ | 77,093 |
|
| Tax equivalent adjustment | | 5,555 |
| | 5,360 |
| | 5,256 |
| | 5,057 |
| | 4,756 |
|
| Net interest income on a fully tax equivalent basis | | 73,240 |
| | 74,876 |
| | 77,331 |
| | 79,161 |
| | 81,849 |
|
| Tax equivalent adjustment on the increase in cash surrender value of life insurance | | 454 |
| | 481 |
| | 479 |
| | 468 |
| | 494 |
|
| Plus non-interest income | | 38,373 |
| | 36,285 |
| | 28,553 |
| | 23,907 |
| | 22,854 |
|
| Less net loss on other real estate owned | | (330 | ) | | (1,626 | ) | | (3,938 | ) | | (5,441 | ) | | (6,589 | ) |
| Less net (loss) gain on investment securities | | (1 | ) | | 311 |
| | 281 |
| | (34 | ) | | (3 | ) |
| Less net loss on sale of other assets | | — |
| | (905 | ) | | (12 | ) | | (8 | ) | | (17 | ) |
| Less increase (decrease) in market value of assets held in trust for deferred compensation | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Net interest income plus non-interest income - as adjusted | | $ | 111,915 |
| | $ | 113,758 |
| | $ | 109,677 |
| | $ | 109,168 |
| | $ | 111,305 |
|
| | | | | | | | | | | |
| Efficiency ratio | | 63.10 | % | | 61.16 | % | | 61.43 | % | | 61.36 | % | | 60.04 | % |
| Efficiency ratio (without adjustments) | | 67.04 | % | | 67.21 | % | | 80.66 | % | | 68.19 | % | | 67.37 | % |
Annualized Net Non-interest Expense to Average Assets Calculation (Dollars in Thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Non-interest expense | | $ | 71,099 |
| | $ | 71,106 |
| | $ | 81,165 |
| | $ | 66,834 |
| | $ | 67,331 |
|
| Adjustment for prepayment fees on interest bearing liabilities | | — |
| | — |
| | 12,682 |
| | — |
| | — |
|
| Adjustment for impairment charges | | — |
| | 1,432 |
| | 758 |
| | — |
| | — |
|
| Adjustment for increase (decrease) in market value of assets held in trust for deferred compensation | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Non-interest expense - as adjusted | | 70,616 |
| | 69,570 |
| | 67,370 |
| | 66,983 |
| | 66,830 |
|
| | | | | | | | | | | |
| Non-interest income | | 38,373 |
| | 36,285 |
| | 28,553 |
| | 23,907 |
| | 22,854 |
|
| Less net losses on other real estate owned | | (330 | ) | | (1,626 | ) | | (3,938 | ) | | (5,441 | ) | | (6,589 | ) |
| Less net (loss) gain on investment securities | | (1 | ) | | 311 |
| | 281 |
| | (34 | ) | | (3 | ) |
| Less net loss on sale of other assets | | — |
| | (905 | ) | | (12 | ) | | (8 | ) | | (17 | ) |
| Less increase (decrease) in market value of assets held in trust for deferred compensation | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Non-interest income - as adjusted | | 38,221 |
| | 38,401 |
| | 31,867 |
| | 29,539 |
| | 28,962 |
|
| Less tax equivalent adjustment on the increase in cash surrender value of life insurance | | 454 |
| | 481 |
| | 479 |
| | 468 |
| | 494 |
|
| Net non-interest expense | | $ | 31,941 |
| | $ | 30,688 |
| | $ | 35,024 |
| | $ | 36,976 |
| | $ | 37,374 |
|
| | | | | | | | | | | |
| Average assets | | $ | 9,449,588 |
| | $ | 9,461,895 |
| | $ | 9,516,159 |
| | $ | 9,478,480 |
| | $ | 9,736,702 |
|
| | | | | | | | | | | |
| Annualized net non-interest expense to average assets | | 1.37 | % | | 1.29 | % | | 1.46 | % | | 1.57 | % | | 1.54 | % |
| | | | | | | | | | | |
| Annualized net non-interest expense to average assets (without adjustments) | | 1.40 | % | | 1.46 | % | | 2.20 | % | | 1.82 | % | | 1.84 | % |
Core Non-interest Income to Revenues Ratio Calculation (Dollars in Thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 4Q12 | | 3Q12 | | 2Q12 | | 1Q12 |
| Non-interest income | | $ | 38,373 |
| | $ | 36,285 |
| | $ | 28,553 |
| | $ | 23,907 |
| | $ | 22,854 |
|
| Less net losses on other real estate owned | | (330 | ) | | (1,626 | ) | | (3,938 | ) | | (5,441 | ) | | (6,589 | ) |
| Less net (loss) gain on investment securities | | (1 | ) | | 311 |
| | 281 |
| | (34 | ) | | (3 | ) |
| Less net loss on sale of other assets | | — |
| | (905 | ) | | (12 | ) | | (8 | ) | | (17 | ) |
| Less increase (decrease) in market value of assets held in trust for deferred compensation | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Plus tax equivalent adjustment on the increase in cash surrender value of life insurance | | 454 |
| | 481 |
| | 479 |
| | 468 |
| | 494 |
|
| Non-interest income - as adjusted | | $ | 38,675 |
| | $ | 38,882 |
| | $ | 32,346 |
| | $ | 30,007 |
| | $ | 29,456 |
|
| | | | | | | | | | | |
| Net interest income | | $ | 67,685 |
| | $ | 69,516 |
| | $ | 72,075 |
| | $ | 74,104 |
| | $ | 77,093 |
|
| Tax equivalent adjustment | | 5,555 |
| | 5,360 |
| | 5,256 |
| | 5,057 |
| | 4,756 |
|
| Net interest income on a fully tax equivalent basis | | 73,240 |
| | 74,876 |
| | 77,331 |
| | 79,161 |
| | 81,849 |
|
| Tax equivalent adjustment on the increase in cash surrender value of life insurance | | 454 |
| | 481 |
| | 479 |
| | 468 |
| | 494 |
|
| Plus non-interest income | | 38,373 |
| | 36,285 |
| | 28,553 |
| | 23,907 |
| | 22,854 |
|
| Less net loss on other real estate owned | | (330 | ) | | (1,626 | ) | | (3,938 | ) | | (5,441 | ) | | (6,589 | ) |
| Less net (loss) gain on investment securities | | (1 | ) | | 311 |
| | 281 |
| | (34 | ) | | (3 | ) |
| Less net loss on sale of other assets | | — |
| | (905 | ) | | (12 | ) | | (8 | ) | | (17 | ) |
| Less increase (decrease) in market value of assets held in trust for deferred compensation | | 483 |
| | 104 |
| | 355 |
| | (149 | ) | | 501 |
|
| Total revenue - as adjusted and on a fully tax equivalent basis | | $ | 111,915 |
| | $ | 113,758 |
| | $ | 109,677 |
| | $ | 109,168 |
| | $ | 111,305 |
|
| | | | | | | | | | | |
| Total revenue - unadjusted | | $ | 106,058 |
| | $ | 105,801 |
| | $ | 100,628 |
| | $ | 98,011 |
| | $ | 99,947 |
|
| | | | | | | | | | | |
| Core non-interest income to revenues ratio | | 34.56 | % | | 34.18 | % | | 29.49 | % | | 27.49 | % | | 26.46 | % |
| | | | | | | | | | | |
| Core non-interest income to revenues ratio (without adjustments) | | 36.18 | % | | 34.30 | % | | 28.37 | % | | 24.39 | % | | 22.87 | % |
NET INTEREST MARGIN
The following table presents, for the periods indicated, the total dollar amount of interest income from average interest earning assets and the resultant yields, as well as the interest expense on average interest bearing liabilities, and the resultant costs, expressed both in dollars and rates (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 1Q13 | | 1Q12 | | 4Q12 |
| | | Average Balance | | Interest | | Yield/ Rate | | Average Balance | | Interest | | Yield/ Rate | | Average Balance | | Interest | | Yield/ Rate |
| Interest Earning Assets: | | |
| | |
| | | | |
| | |
| | |
| | |
| | |
| | |
|
| Loans (1) (2) (3): | | |
| | |
| | | | |
| | |
| | |
| | |
| | |
| | |
|
| Commercial related credits | | |
| | |
| | | | |
| | |
| | |
| | |
| | |
| | |
|
| Commercial | | $ | 1,205,903 |
| | $ | 12,559 |
| | 4.17 | % | | $ | 1,062,246 |
| | 12,774 |
| | 4.76 | % | | $ | 1,117,323 |
| | $ | 12,711 |
| | 4.45 | % |
| Commercial loans collateralized by assignment of lease payments | | 1,300,818 |
| | 12,799 |
| | 3.94 | % | | 1,176,901 |
| | 13,757 |
| | 4.68 | % | | 1,204,431 |
| | 12,797 |
| | 4.25 | % |
| Real estate commercial | | 1,735,082 |
| | 20,744 |
| | 4.78 | % | | 1,863,892 |
| | 23,906 |
| | 5.07 | % | | 1,766,332 |
| | 21,636 |
| | 4.79 | % |
| Real estate construction | | 113,573 |
| | 1,120 |
| | 3.94 | % | | 145,728 |
| | 1,540 |
| | 4.18 | % | | 146,717 |
| | 1,614 |
| | 4.30 | % |
| Total commercial related credits | | 4,355,376 |
| | 47,222 |
| | 4.34 | % | | 4,248,767 |
| | 51,977 |
| | 4.84 | % | | 4,234,803 |
| | 48,758 |
| | 4.51 | % |
| Other loans | | | | | | | | | | | | | | | | | | |
| Real estate residential | | 312,748 |
| | 3,285 |
| | 4.20 | % | | 313,602 |
| | 3,650 |
| | 4.66 | % | | 312,189 |
| | 3,417 |
| | 4.38 | % |
| Home equity | | 298,061 |
| | 3,190 |
| | 4.34 | % | | 332,909 |
| | 3,670 |
| | 4.43 | % | | 308,854 |
| | 3,336 |
| | 4.30 | % |
| Indirect | | 212,153 |
| | 3,022 |
| | 5.78 | % | | 186,359 |
| | 2,935 |
| | 6.33 | % | | 207,429 |
| | 3,061 |
| | 5.87 | % |
| Consumer loans | | 70,364 |
| | 607 |
| | 3.50 | % | | 69,747 |
| | 529 |
| | 3.05 | % | | 69,554 |
| | 623 |
| | 3.56 | % |
| Total other loans | | 893,326 |
| | 10,104 |
| | 4.59 | % | | 902,617 |
| | 10,784 |
| | 4.81 | % | | 898,026 |
| | 10,437 |
| | 4.62 | % |
| Total loans, excluding covered loans | | 5,248,702 |
| | 57,326 |
| | 4.43 | % | | 5,151,384 |
| | 62,761 |
| | 4.90 | % | | 5,132,829 |
| | 59,195 |
| | 4.59 | % |
| Covered loans | | 424,688 |
| | 4,682 |
| | 4.47 | % | | 652,146 |
| | 10,014 |
| | 6.18 | % | | 479,011 |
| | 5,354 |
| | 4.45 | % |
| Total loans | | 5,673,390 |
| | 62,008 |
| | 4.43 | % | | 5,803,530 |
| | 72,775 |
| | 5.04 | % | | 5,611,840 |
| | 64,549 |
| | 4.58 | % |
| Taxable investment securities | | 1,484,300 |
| | 6,140 |
| | 1.65 | % | | 1,702,766 |
| | 10,884 |
| | 2.56 | % | | 1,508,774 |
| | 6,371 |
| | 1.69 | % |
| Investment securities exempt from federal income taxes (3) | | 911,742 |
| | 12,400 |
| | 5.44 | % | | 742,568 |
| | 10,368 |
| | 5.58 | % | | 865,653 |
| | 11,826 |
| | 5.46 | % |
| Other interest earning deposits | | 197,057 |
| | 135 |
| | 0.28 | % | | 258,351 |
| | 169 |
| | 0.26 | % | | 361,371 |
| | 228 |
| | 0.25 | % |
| Total interest earning assets | | $ | 8,266,489 |
| | $ | 80,683 |
| | 3.96 | % | | $ | 8,507,215 |
| | $ | 94,196 |
| | 4.45 | % | | $ | 8,347,638 |
| | $ | 82,974 |
| | 3.95 | % |
| Non-interest earning assets | | 1,183,099 |
| | | | | | 1,229,487 |
| | | | | | 1,114,257 |
| | | | |
| Total assets | | $ | 9,449,588 |
| | | | | | $ | 9,736,702 |
| | | | | | $ | 9,461,895 |
| | | | |
| Interest Bearing Liabilities: | | |
| | |
| | | | |
| | |
| | |
| | |
| | |
| | |
| Core funding: | | |
| | |
| | | | |
| | |
| | |
| | |
| | |
| | |
| Money market and NOW accounts | | $ | 2,737,494 |
| | $ | 927 |
| | 0.14 | % | | $ | 2,649,671 |
| | $ | 1,207 |
| | 0.18 | % | | $ | 2,726,718 |
| | $ | 1,007 |
| | 0.15 | % |
| Savings accounts | | 822,214 |
| | 136 |
| | 0.07 | % | | 772,335 |
| | 248 |
| | 0.13 | % | | 804,158 |
| | 144 |
| | 0.07 | % |
| Certificates of deposit | | 1,512,600 |
| | 2,397 |
| | 0.66 | % | | 1,892,328 |
| | 3,883 |
| | 0.86 | % | | 1,570,147 |
| | 2,562 |
| | 0.67 | % |
| Customer repurchase agreements | | 181,658 |
| | 98 |
| | 0.22 | % | | 203,003 |
| | 134 |
| | 0.27 | % | | 233,532 |
| | 147 |
| | 0.25 | % |
| Total core funding | | 5,253,966 |
| | 3,558 |
| | 0.27 | % | | 5,517,337 |
| | 5,472 |
| | 0.40 | % | | 5,334,555 |
| | 3,860 |
| | 0.29 | % |
| Wholesale funding: | | | | | | | | | | | | | | | | | | |
| Brokered accounts (includes fee expense) | | 294,295 |
| | 2,249 |
| | 3.10 | % | | 439,890 |
| | 3,422 |
| | 3.13 | % | | 302,565 |
| | 2,353 |
| | 3.09 | % |
| Other borrowings | | 259,135 |
| | 1,636 |
| | 2.53 | % | | 429,231 |
| | 3,453 |
| | 3.18 | % | | 286,952 |
| | 1,885 |
| | 2.57 | % |
| Total wholesale funding | | 553,430 |
| | 3,885 |
| | 2.52 | % | | 869,121 |
| | 6,875 |
| | 2.76 | % | | 589,517 |
| | 4,238 |
| | 2.49 | % |
| Total interest bearing liabilities | | $ | 5,807,396 |
| | $ | 7,443 |
| | 0.52 | % | | $ | 6,386,458 |
| | $ | 12,347 |
| | 0.78 | % | | $ | 5,924,072 |
| | $ | 8,098 |
| | 0.54 | % |
| Non-interest bearing deposits | | 2,145,058 |
| | | | | | 1,851,211 |
| | | | | | 2,119,632 |
| | | | |
| Other non-interest bearing liabilities | | 216,213 |
| | | | | | 136,412 |
| | | | | | 153,419 |
| | | | |
| Stockholders' equity | | 1,280,921 |
| | | | | | 1,362,621 |
| | | | | | 1,264,772 |
| | | | |
| Total liabilities and stockholders' equity | | $ | 9,449,588 |
| | | | | | $ | 9,736,702 |
| | | | | | $ | 9,461,895 |
| | | | |
| Net interest income/interest rate spread (4) | | | | $ | 73,240 |
| | 3.44 | % | | | | $ | 81,849 |
| | 3.67 | % | | | | $ | 74,876 |
| | 3.41 | % |
| Taxable equivalent adjustment | | | | 5,555 |
| | | | | | 4,756 |
| | | | | | 5,360 |
| | |
| Net interest income, as reported | | | | $ | 67,685 |
| | | | | | $ | 77,093 |
| | | | | | $ | 69,516 |
| | |
| Net interest margin (5) | | | | | | 3.32 | % | | | | | | 3.64 | % | | | | | | 3.31 | % |
| Tax equivalent effect | | | | | | 0.27 | % | | | | | | 0.23 | % | | | | | | 0.26 | % |
| Net interest margin on a fully tax equivalent basis (5) | | | | | | 3.59 | % | | | | | | 3.87 | % | | | | | | 3.57 | % |
| |
| (1) | Non-accrual loans are included in average loans. |
| |
| (2) | Interest income includes amortization of deferred loan origination fees of $981 thousand, $877 thousand, and $1.0 million for the three months ended March 31, 2013, March 31, 2012, and December 31, 2012, respectively. |
| |
| (3) | Non-taxable loan and investment income is presented on a fully tax equivalent basis assuming a 35% tax rate. |
| |
| (4) | Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis. |
| |
| (5) | Net interest margin represents net interest income as a percentage of average interest earning assets. |
