EXHIBIT 99
![]() | 1Q17 |
MB FINANCIAL, INC. REPORTS FIRST QUARTER 2017 NET INCOME OF $54.5 MILLION
CHICAGO, April 27, 2017 – MB Financial, Inc. (NASDAQ: MBFI), the holding company for MB Financial Bank, N.A., today announced first quarter 2017 net income of $54.5 million compared to $47.2 million last quarter and $39.1 million in the first quarter a year ago. Diluted earnings per common share were $0.62 in the first quarter of 2017 compared to $0.53 last quarter and $0.50 in the first quarter a year ago.
"Our company’s operating performance was solid in the first quarter," stated Mitchell Feiger, President and Chief Executive Officer of MB Financial, Inc. "We remain focused on making the investments necessary to build a high performing diversified bank. That strategy helped to grow loans by 6% annualized, as consumer and residential mortgage loans led the increase. While commercial-related loan growth was minimal in the quarter, our commercial-related loan pipeline is strong."
Mr. Feiger added, "While deposit balances declined slightly in the quarter reflecting normal first quarter activity, deposit costs increased only one basis point demonstrating the high quality deposit base we’ve worked hard to build. Generally, upward deposit pricing pressure has been modest, though that could change if industry liquidity tightens or wholesale interest rates rise further.
I was particularly pleased with the eight basis point improvement in our net interest margin. The increase was driven by better loan yields and asset mix, offset by an adverse change in liability mix.
As a result of an increased net interest margin, very low credit costs and good expense control, diluted operating earnings grew to 60 cents per share, an increase of 1.7% over last quarter and 11.1% over the first quarter of 2016. In addition, our return on tangible common equity increased to 15.27% and our return on average assets to 1.16%."
Operating Earnings (in thousands, except per share data) |
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Net income - as reported | $ | 54,537 | $ | 47,191 | $ | 44,419 | $ | 43,412 | $ | 39,114 | ||||||||||
Non-core items, net of tax (1) | (1,358 | ) | 4,656 | 7,496 | 1,451 | 2,758 | ||||||||||||||
Operating earnings | 53,179 | 51,847 | 51,915 | 44,863 | 41,872 | |||||||||||||||
Dividends on preferred shares | 2,003 | 2,005 | 2,004 | 2,000 | 2,000 | |||||||||||||||
Operating earnings available to common stockholders | $ | 51,176 | $ | 49,842 | $ | 49,911 | $ | 42,863 | $ | 39,872 | ||||||||||
Diluted earnings per common share - as reported | $ | 0.62 | $ | 0.53 | $ | 0.54 | $ | 0.56 | $ | 0.50 | ||||||||||
Diluted operating earnings per common share | $ | 0.60 | $ | 0.59 | $ | 0.63 | $ | 0.58 | $ | 0.54 |
(1) | Non-core items represent the difference between non-core non-interest income and non-core non-interest expense net of tax. |
See "Non-GAAP Financial Information" section for details on non-core items.
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Key Items (compared to 4Q16) |
Operating Earnings
• | Operating earnings increased 2.6% (+10.4% annualized) to $53.2 million compared to $51.8 million in the prior quarter. |
• | Diluted operating earnings per common share were $0.60 compared to $0.59 in the prior quarter. |
Loans
• | Loans increased by $189.7 million (+1.5%, or +6.0% annualized) to $13.0 billion led by growth in residential real estate loans. |
• | Average yield on loans, excluding accretion on loans acquired in bank mergers, increased to 4.01% from 3.92% in the prior quarter. |
Deposits
• | Low cost deposits decreased by $168.3 million in the quarter (-1.4%, or -5.6% annualized) to $11.9 billion due to a decrease in mortgage escrow account balances, sale of our Philadelphia branch and seasonal deposit declines. |
• | Average cost of deposits (interest bearing and non-interest bearing deposits) increased one basis point to 0.22%. |
Net interest margin
• | Net interest margin on a fully tax equivalent basis, excluding accretion on loans acquired in bank mergers, increased by eight basis points to 3.55% from the prior quarter due to the impact of the December interest rate increase on loans and a favorable shift in the mix of interest earning assets partly offset by a higher average cost of borrowings and an unfavorable shift in liabilities (a higher percentage of borrowings). |
• | Average interest earning assets decreased by $246.5 million mostly due to the decrease in loans held for sale and taxable investment securities. |
• | Average cost of funds increased five basis points to 0.33%. |
Operating Segments (compared to 4Q16) |
Banking
• | Operating earnings were $45.6 million compared to $43.8 million in the prior quarter. |
• | Operating earnings for the quarter were positively impacted by $2.7 million of tax benefit recorded on stock-based compensation during the quarter compared to $849 thousand in the prior quarter, an increase of $1.9 million. |
Leasing
• | Operating earnings were $5.9 million compared to $6.8 million in the prior quarter. |
• | Prior quarter was positively impacted by a $1.8 million negative provision for credit losses due to improvement of a potential problem loan. |
Mortgage Banking
• | Operating earnings were $1.7 million compared to $1.2 million in the prior quarter. |
• | The increase in operating earnings was the result of higher mortgage servicing revenue and lower non-interest expense partly offset by a decline in mortgage origination revenue. |
Operating Segments |
The Company's operations consist of three reportable operating segments: Banking, Leasing and Mortgage Banking. Our Banking Segment generates revenues primarily from its lending, deposit gathering and fee business activities. Our Leasing Segment generates revenues through lease originations and related services. Our Mortgage Banking Segment originates residential mortgage loans for sale to investors through its retail and third party origination channels as well as residential mortgage loans held in our loan portfolio. The Mortgage Banking Segment also services residential mortgage loans owned by investors and the Company. The financial information below was adjusted for funds transfer pricing and internal allocations of certain expenses and excludes non-core non-interest income and expense.
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Banking Segment
The following table summarizes certain financial information for the Banking Segment for the periods presented (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | |||||||||||||||
Net interest income | $ | 131,449 | $ | 133,688 | $ | 119,685 | $ | 112,152 | $ | 109,608 | |||||||||
Provision for credit losses | 3,527 | 4,193 | 4,394 | 2,995 | 7,001 | ||||||||||||||
Net interest income after provision for credit losses | 127,922 | 129,495 | 115,291 | 109,157 | 102,607 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Lease financing revenue, net | 1,545 | 1,050 | 890 | 789 | 679 | ||||||||||||||
Commercial deposit and treasury management fees | 14,689 | 14,237 | 12,957 | 11,548 | 11,878 | ||||||||||||||
Trust and asset management fees | 8,520 | 8,442 | 8,244 | 8,236 | 7,950 | ||||||||||||||
Card fees | 4,566 | 4,340 | 4,161 | 4,045 | 3,525 | ||||||||||||||
Capital markets and international banking service fees | 3,253 | 4,021 | 3,313 | 2,771 | 3,227 | ||||||||||||||
Other non-interest income | 9,306 | 9,314 | 10,252 | 8,544 | 7,789 | ||||||||||||||
Total non-interest income | 41,879 | 41,404 | 39,817 | 35,933 | 35,048 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits expense: | |||||||||||||||||||
Salaries | 42,120 | 42,797 | 38,575 | 35,951 | 34,527 | ||||||||||||||
Commissions | 1,107 | 1,090 | 1,172 | 1,424 | 1,396 | ||||||||||||||
Bonus and stock-based compensation | 10,619 | 9,535 | 10,553 | 10,852 | 6,476 | ||||||||||||||
Other salaries and benefits (1) | 13,705 | 13,920 | 13,657 | 11,987 | 11,003 | ||||||||||||||
Total salaries and employee benefits expense | 67,551 | 67,342 | 63,957 | 60,214 | 53,402 | ||||||||||||||
Occupancy and equipment expense | 12,117 | 12,765 | 11,724 | 10,561 | 10,430 | ||||||||||||||
Computer services and telecommunication expense | 7,514 | 8,813 | 7,418 | 6,945 | 6,446 | ||||||||||||||
Professional and legal expense | 1,600 | 1,281 | 1,566 | 2,385 | 1,486 | ||||||||||||||
Other operating expenses | 18,255 | 17,430 | 16,467 | 16,587 | 15,570 | ||||||||||||||
Total non-interest expense | 107,037 | 107,631 | 101,132 | 96,692 | 87,334 | ||||||||||||||
Income before income taxes | 62,764 | 63,268 | 53,976 | 48,398 | 50,321 | ||||||||||||||
Income tax expense | 17,168 | 19,422 | 16,287 | 14,353 | 14,927 | ||||||||||||||
Net income | $ | 45,596 | $ | 43,846 | $ | 37,689 | $ | 34,045 | $ | 35,394 | |||||||||
Total assets (period end) | $ | 16,009,339 | $ | 16,368,881 | $ | 16,453,379 | $ | 13,296,238 | $ | 13,235,848 |
(1) | Includes health insurance, payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses. |
Net income from our Banking Segment for the first quarter of 2017 increased $1.8 million compared to the prior quarter.
• | Net interest income decreased due to two fewer days during the quarter. |
• | Provision for credit losses decreased reflecting stable credit quality as well as net recoveries for the quarter. We continue to provide for credit losses for loans acquired in bank mergers reflecting the transfer from acquired to renewed status. |
• | Non-interest income was consistent with the prior quarter. Commercial deposit and treasury management fees increased due to additional fees paid by existing customers, and card fees increased as a result of promotional debit card income during the quarter. Lease financing revenue, which includes revenue related to investments in joint venture lease pools, increased in the quarter due to higher earnings from these lease pools. These increases were offset by a decrease in capital markets and international banking service fees mainly due to lower M&A advisory and swap fees. |
• | Non-interest expense decreased mostly as a result of lower computer services and telecommunication expense driven by lower systems expense. This decrease was partially offset by higher bonus and stock-based compensation expense. |
• | Income tax expense was lower as a result of $2.7 million of tax benefit recorded for the vesting of restricted shares and exercises of stock options compared to $849 thousand in the prior quarter. The tax expense or benefit related to the vesting of restricted shares and exercises of stock options can fluctuate from period to period based on activity and the stock price of our common shares. |
• | Total assets decreased due to the transfer of previously acquired residential real estate loans to the Mortgage Banking Segment. |
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Leasing Segment
The following table summarizes certain financial information for the Leasing Segment for the periods presented (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | |||||||||||||||
Net interest income | $ | 2,269 | $ | 2,413 | $ | 2,168 | $ | 2,411 | $ | 2,423 | |||||||||
Provision for credit losses | (135 | ) | (1,750 | ) | 1,964 | (356 | ) | 437 | |||||||||||
Net interest income after provision for credit losses | 2,404 | 4,163 | 204 | 2,767 | 1,986 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Lease financing revenue, net | 20,253 | 19,005 | 17,974 | 14,919 | 18,367 | ||||||||||||||
Other non-interest income | 1,173 | 754 | 785 | 786 | 839 | ||||||||||||||
Total non-interest income | 21,426 | 19,759 | 18,759 | 15,705 | 19,206 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits expense: | |||||||||||||||||||
Salaries | 4,810 | 4,811 | 4,550 | 4,242 | 3,810 | ||||||||||||||
Commissions | 2,572 | 1,038 | 1,597 | 1,274 | 2,958 | ||||||||||||||
Bonus and stock-based compensation | 955 | 1,516 | 950 | 829 | 872 | ||||||||||||||
Other salaries and benefits (1) | 1,581 | 1,317 | 1,310 | 1,262 | 1,443 | ||||||||||||||
Total salaries and employee benefits expense | 9,918 | 8,682 | 8,407 | 7,607 | 9,083 | ||||||||||||||
Occupancy and equipment expense | 944 | 929 | 966 | 947 | 895 | ||||||||||||||
Computer services and telecommunication expense | 458 | 483 | 432 | 431 | 363 | ||||||||||||||
Professional and legal expense | 399 | 652 | 802 | 414 | 409 | ||||||||||||||
Other operating expenses | 2,088 | 1,714 | 1,997 | 1,716 | 1,447 | ||||||||||||||
Total non-interest expense | 13,807 | 12,460 | 12,604 | 11,115 | 12,197 | ||||||||||||||
Income before income taxes | 10,023 | 11,462 | 6,359 | 7,357 | 8,995 | ||||||||||||||
Income tax expense | 4,119 | 4,653 | 2,484 | 2,879 | 3,509 | ||||||||||||||
Net income | $ | 5,904 | $ | 6,809 | $ | 3,875 | $ | 4,478 | $ | 5,486 | |||||||||
Total assets (period end) | $ | 1,173,558 | $ | 1,224,169 | $ | 1,126,847 | $ | 1,081,723 | $ | 1,045,117 |
(1) | Includes health insurance, payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses. |
Net income from our Leasing Segment for the first quarter of 2017 decreased $905 thousand compared to the prior quarter.
• | Prior quarter included a $1.8 million negative provision for credit losses due to improvement of a potential problem loan. |
• | Lease financing revenue increased as a result of higher promotional income and residual gains partly offset by the decrease in fees from the sale of third-party equipment maintenance contracts. |
• | Non-interest expense increased due to higher commissions expense as a result of greater lease financing revenue and lower indirect capitalized costs. Bonus and stock-based compensation was higher in the prior quarter as a result of strong performance in 2016. |
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Mortgage Banking Segment
The following table summarizes certain financial information for the Mortgage Banking Segment for the periods presented (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | |||||||||||||||
Net interest income | $ | 9,325 | $ | 9,113 | $ | 8,918 | $ | 8,039 | $ | 7,273 | |||||||||
Provision for credit losses | 342 | 179 | 191 | 190 | 125 | ||||||||||||||
Net interest income after provision for credit losses | 8,983 | 8,934 | 8,727 | 7,849 | 7,148 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Mortgage origination revenue | 21,465 | 29,317 | 39,962 | 31,417 | 16,894 | ||||||||||||||
Mortgage servicing revenue | 6,314 | 2,960 | 9,133 | 8,198 | 10,588 | ||||||||||||||
Other non-interest income | — | — | — | — | (3 | ) | |||||||||||||
Total non-interest income | 27,779 | 32,277 | 49,095 | 39,615 | 27,479 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits expense: | |||||||||||||||||||
Salaries | 11,881 | 12,945 | 12,958 | 12,088 | 11,450 | ||||||||||||||
Commissions | 4,932 | 8,178 | 8,554 | 7,226 | 5,016 | ||||||||||||||
Bonus and stock-based compensation | 716 | 1,116 | 1,477 | 1,190 | 1,309 | ||||||||||||||
Other salaries and benefits (1) | 4,978 | 5,786 | 6,730 | 5,875 | 5,242 | ||||||||||||||
Total salaries and employee benefits expense | 22,507 | 28,025 | 29,719 | 26,379 | 23,017 | ||||||||||||||
Occupancy and equipment expense | 1,979 | 1,900 | 1,972 | 1,899 | 1,935 | ||||||||||||||
Computer services and telecommunication expense | 1,663 | 1,910 | 1,881 | 1,890 | 1,941 | ||||||||||||||
Professional and legal expense | 595 | 418 | 411 | 421 | 597 | ||||||||||||||
Other operating expenses | 7,238 | 6,971 | 6,587 | 6,309 | 5,484 | ||||||||||||||
Total non-interest expense | 33,982 | 39,224 | 40,570 | 36,898 | 32,974 | ||||||||||||||
Income before income taxes | 2,780 | 1,987 | 17,252 | 10,566 | 1,653 | ||||||||||||||
Income tax expense | 1,101 | 795 | 6,901 | 4,226 | 661 | ||||||||||||||
Net income | $ | 1,679 | $ | 1,192 | $ | 10,351 | $ | 6,340 | $ | 992 | |||||||||
Total assets (period end) | $ | 1,963,165 | $ | 1,709,267 | $ | 1,761,656 | $ | 1,617,829 | $ | 1,294,688 |
(1) | Includes health insurance, payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses. |
Net income from our Mortgage Banking Segment for the first quarter of 2017 increased $487 thousand compared to the prior quarter.
• | Lower mortgage origination volume and lower gain on sale margin caused a decrease in mortgage origination revenue. |
• | Mortgage servicing revenue increased due to higher servicing revenue and a lower decrease in the fair value of the mortgage servicing asset net of the related economic hedge activity. |
• | Non-interest expense decreased mostly due to lower salaries and employee benefits expense. Salaries expense decreased as a result of a decline in the number of full time equivalent employees. Commissions expense decreased due to lower mortgage origination volume. |
• | Computer services and telecommunication expense decreased due to lower systems expense. |
• | Total assets increased due to the transfer of previously acquired residential real estate loans from the Banking Segment and loan growth partially offset by a decrease in loans held for sale. |
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FORWARD-LOOKING STATEMENTS
When used in this document and in reports filed with or furnished to the Securities and Exchange Commission (the "SEC"), in 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 the MB Financial-American Chartered merger might not be realized within the expected 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 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 originated loans and loans acquired from other financial institutions; (3) competitive pressures among depository institutions; (4) interest rate movements and their impact on customer behavior, net interest margin and the value of our mortgage servicing rights; (5) the possibility that our mortgage banking business may experience increased volatility in its revenues and earnings and the possibility that the profitability of our mortgage banking business could be significantly reduced if we are unable to originate and sell mortgage loans at profitable margins or if changes in interest rates negatively impact the value of our mortgage servicing rights; (6) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (9) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (10) our ability to realize the residual values of its direct finance, leveraged and operating leases; (11) the 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 Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and regulations adopted thereunder, changes in capital requirements pursuant to the Dodd-Frank Act, changes in the interpretation and/or application of laws and regulations by regulatory authorities, 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
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CONSOLIDATED BALANCE SHEETS (Unaudited) |
(Dollars in thousands) | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 368,078 | $ | 364,783 | $ | 351,009 | $ | 303,037 | $ | 271,732 | ||||||||||
Interest earning deposits with banks | 102,328 | 98,686 | 125,250 | 123,086 | 113,785 | |||||||||||||||
Total cash and cash equivalents | 470,406 | 463,469 | 476,259 | 426,123 | 385,517 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
Securities available for sale, at fair value | 1,657,950 | 1,696,195 | 1,859,356 | 1,477,395 | 1,532,844 | |||||||||||||||
Securities held to maturity, at amortized cost | 1,056,008 | 1,069,750 | 1,115,262 | 1,151,415 | 1,191,910 | |||||||||||||||
Non-marketable securities - FHLB and FRB Stock | 144,427 | 143,276 | 146,209 | 130,232 | 121,750 | |||||||||||||||
Total investment securities | 2,858,385 | 2,909,221 | 3,120,827 | 2,759,042 | 2,846,504 | |||||||||||||||
Loans held for sale | 493,261 | 716,883 | 899,412 | 843,379 | 632,196 | |||||||||||||||
Loans: | ||||||||||||||||||||
Total loans, excluding purchased credit-impaired loans | 12,789,667 | 12,605,726 | 12,379,358 | 10,061,076 | 9,820,903 | |||||||||||||||
Purchased credit-impaired loans | 168,814 | 163,077 | 161,338 | 136,811 | 140,445 | |||||||||||||||
Total loans | 12,958,481 | 12,768,803 | 12,540,696 | 10,197,887 | 9,961,348 | |||||||||||||||
Less: Allowance for loan and lease losses | 144,170 | 139,366 | 139,528 | 135,614 | 134,493 | |||||||||||||||
Net loans | 12,814,311 | 12,629,437 | 12,401,168 | 10,062,273 | 9,826,855 | |||||||||||||||
Lease investments, net | 315,523 | 311,327 | 277,647 | 233,320 | 216,046 | |||||||||||||||
Premises and equipment, net | 290,767 | 293,910 | 283,112 | 243,319 | 238,578 | |||||||||||||||
Cash surrender value of life insurance | 202,233 | 200,945 | 199,628 | 138,657 | 137,807 | |||||||||||||||
Goodwill | 999,925 | 1,001,038 | 993,799 | 725,039 | 725,068 | |||||||||||||||
Other intangibles | 60,869 | 62,959 | 65,395 | 41,569 | 43,186 | |||||||||||||||
Mortgage servicing rights, at fair value | 251,498 | 238,011 | 154,730 | 134,969 | 145,800 | |||||||||||||||
Other real estate owned, net | 14,706 | 26,279 | 33,105 | 27,663 | 28,309 | |||||||||||||||
Other real estate owned related to FDIC transactions | 3,864 | 5,006 | 5,177 | 8,356 | 10,397 | |||||||||||||||
Other assets | 370,314 | 443,832 | 431,623 | 352,081 | 339,390 | |||||||||||||||
Total assets | $ | 19,146,062 | $ | 19,302,317 | $ | 19,341,882 | $ | 15,995,790 | $ | 15,575,653 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non-interest bearing | $ | 6,211,173 | $ | 6,408,169 | $ | 6,410,334 | $ | 4,775,364 | $ | 4,667,410 | ||||||||||
Interest bearing | 7,788,210 | 7,702,279 | 7,868,932 | 6,660,732 | 6,866,416 | |||||||||||||||
Total deposits | 13,999,383 | 14,110,448 | 14,279,266 | 11,436,096 | 11,533,826 | |||||||||||||||
Short-term borrowings | 1,550,628 | 1,569,288 | 1,496,319 | 1,246,994 | 884,101 | |||||||||||||||
Long-term borrowings | 315,618 | 311,790 | 311,645 | 518,545 | 439,615 | |||||||||||||||
Junior subordinated notes issued to capital trusts | 210,769 | 210,668 | 209,159 | 185,925 | 185,820 | |||||||||||||||
Accrued expenses and other liabilities | 453,236 | 520,914 | 482,085 | 451,695 | 409,406 | |||||||||||||||
Total liabilities | 16,529,634 | 16,723,108 | 16,778,474 | 13,839,255 | 13,452,768 | |||||||||||||||
Stockholders' Equity | ||||||||||||||||||||
Preferred stock | 115,572 | 115,572 | 116,507 | 115,280 | 115,280 | |||||||||||||||
Common stock | 857 | 856 | 855 | 757 | 756 | |||||||||||||||
Additional paid-in capital | 1,675,956 | 1,678,826 | 1,674,341 | 1,288,777 | 1,284,438 | |||||||||||||||
Retained earnings | 875,295 | 838,892 | 809,769 | 783,468 | 756,272 | |||||||||||||||
Accumulated other comprehensive income | 8,415 | 5,190 | 23,763 | 28,731 | 24,687 | |||||||||||||||
Treasury stock | (59,667 | ) | (60,384 | ) | (62,084 | ) | (60,732 | ) | (59,863 | ) | ||||||||||
Controlling interest stockholders' equity | 2,616,428 | 2,578,952 | 2,563,151 | 2,156,281 | 2,121,570 | |||||||||||||||
Noncontrolling interest | — | 257 | 257 | 254 | 1,315 | |||||||||||||||
Total stockholders' equity | 2,616,428 | 2,579,209 | 2,563,408 | 2,156,535 | 2,122,885 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 19,146,062 | $ | 19,302,317 | $ | 19,341,882 | $ | 15,995,790 | $ | 15,575,653 |
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
(Dollars in thousands, except per share data) | 1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | |||||||||||||||
Interest income: | ||||||||||||||||||||
Loans: | ||||||||||||||||||||
Taxable | $ | 133,737 | $ | 134,048 | $ | 118,675 | $ | 110,231 | $ | 104,923 | ||||||||||
Nontaxable | 2,880 | 2,947 | 2,846 | 2,741 | 2,586 | |||||||||||||||
Investment securities: | ||||||||||||||||||||
Taxable | 9,122 | 9,362 | 8,844 | 7,799 | 9,566 | |||||||||||||||
Nontaxable | 9,973 | 10,220 | 10,382 | 10,644 | 10,776 | |||||||||||||||
Other interest earning accounts | 199 | 157 | 164 | 125 | 141 | |||||||||||||||
Total interest income | 155,911 | 156,734 | 140,911 | 131,540 | 127,992 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 7,475 | 7,324 | 6,681 | 5,952 | 5,622 | |||||||||||||||
Short-term borrowings | 2,380 | 1,472 | 1,092 | 910 | 721 | |||||||||||||||
Long-term borrowings and junior subordinated notes | 3,013 | 2,724 | 2,367 | 2,076 | 2,345 | |||||||||||||||
Total interest expense | 12,868 | 11,520 | 10,140 | 8,938 | 8,688 | |||||||||||||||
Net interest income | 143,043 | 145,214 | 130,771 | 122,602 | 119,304 | |||||||||||||||
Provision for credit losses | 3,734 | 2,622 | 6,549 | 2,829 | 7,563 | |||||||||||||||
Net interest income after provision for credit losses | 139,309 | 142,592 | 124,222 | 119,773 | 111,741 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Mortgage banking revenue | 27,779 | 32,277 | 49,095 | 39,615 | 27,482 | |||||||||||||||
Lease financing revenue, net | 21,418 | 19,868 | 18,864 | 15,708 | 19,046 | |||||||||||||||
Commercial deposit and treasury management fees | 14,689 | 14,237 | 12,957 | 11,548 | 11,878 | |||||||||||||||
Trust and asset management fees | 8,520 | 8,442 | 8,244 | 8,236 | 7,950 | |||||||||||||||
Card fees | 4,566 | 4,340 | 4,161 | 4,045 | 3,525 | |||||||||||||||
Capital markets and international banking service fees | 3,253 | 4,021 | 3,313 | 2,771 | 3,227 | |||||||||||||||
Consumer and other deposit service fees | 3,363 | 3,563 | 3,559 | 3,161 | 3,025 | |||||||||||||||
Brokerage fees | 1,125 | 887 | 1,294 | 1,315 | 1,158 | |||||||||||||||
Loan service fees | 1,969 | 1,952 | 1,792 | 1,961 | 1,752 | |||||||||||||||
Increase in cash surrender value of life insurance | 1,288 | 1,316 | 1,055 | 850 | 854 | |||||||||||||||
Net gain on investment securities | 231 | 178 | — | 269 | — | |||||||||||||||
Net (loss) gain on disposal of other assets | (123 | ) | (749 | ) | 5 | (2 | ) | (48 | ) | |||||||||||
Other operating income | 3,695 | 2,491 | 4,048 | 2,523 | 1,844 | |||||||||||||||
Total non-interest income | 91,773 | 92,823 | 108,387 | 92,000 | 81,693 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||
Salaries and employee benefits expense | 101,551 | 108,428 | 111,478 | 95,004 | 85,591 | |||||||||||||||
Occupancy and equipment expense | 15,044 | 15,689 | 14,766 | 13,415 | 13,260 | |||||||||||||||
Computer services and telecommunication expense | 9,440 | 11,800 | 12,836 | 9,777 | 9,055 | |||||||||||||||
Advertising and marketing expense | 3,161 | 3,045 | 3,084 | 2,964 | 2,878 | |||||||||||||||
Professional and legal expense | 2,691 | 2,509 | 4,460 | 3,321 | 2,589 | |||||||||||||||
Other intangible amortization expense | 2,091 | 2,388 | 1,674 | 1,617 | 1,626 | |||||||||||||||
Branch exit and facilities impairment charges | (682 | ) | — | (2,908 | ) | 155 | 44 | |||||||||||||
Net loss (gain) recognized on other real estate owned and other related expense | 844 | (790 | ) | (721 | ) | 258 | (346 | ) | ||||||||||||
Other operating expenses | 21,525 | 22,691 | 25,716 | 21,395 | 21,103 | |||||||||||||||
Total non-interest expense | 155,665 | 165,760 | 170,385 | 147,906 | 135,800 | |||||||||||||||
Income before income taxes | 75,417 | 69,655 | 62,224 | 63,867 | 57,634 | |||||||||||||||
Income tax expense | 20,880 | 22,464 | 17,805 | 20,455 | 18,520 | |||||||||||||||
Net income | 54,537 | 47,191 | 44,419 | 43,412 | 39,114 | |||||||||||||||
Dividends on preferred shares | 2,003 | 2,005 | 2,004 | 2,000 | 2,000 | |||||||||||||||
Net income available to common stockholders | $ | 52,534 | $ | 45,186 | $ | 42,415 | $ | 41,412 | $ | 37,114 |
8
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Common share data: | ||||||||||||||||||||
Basic earnings per common share | $ | 0.63 | $ | 0.54 | $ | 0.55 | $ | 0.56 | $ | 0.51 | ||||||||||
Diluted earnings per common share | 0.62 | 0.53 | 0.54 | 0.56 | 0.50 | |||||||||||||||
Weighted average common shares outstanding for basic earnings per common share | 83,662,430 | 83,484,899 | 77,506,885 | 73,475,258 | 73,330,731 | |||||||||||||||
Weighted average common shares outstanding for diluted earnings per common share | 84,778,130 | 84,674,181 | 78,683,170 | 74,180,374 | 73,966,935 | |||||||||||||||
Common shares outstanding (at end of period) | 83,832,648 | 83,725,269 | 83,555,257 | 73,740,348 | 73,639,487 |
SELECTED FINANCIAL DATA |
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Annualized return on average assets | 1.16 | % | 0.98 | % | 1.02 | % | 1.11 | % | 1.02 | % | ||||||||||
Annualized operating return on average assets (1) | 1.13 | 1.07 | 1.20 | 1.15 | 1.09 | |||||||||||||||
Annualized return on average common equity | 8.62 | 7.36 | 7.67 | 8.27 | 7.52 | |||||||||||||||
Annualized operating return on average common equity (1) | 8.39 | 8.12 | 9.02 | 8.56 | 8.08 | |||||||||||||||
Annualized cash return on average tangible common equity (2) | 15.27 | 13.22 | 12.99 | 13.53 | 12.47 | |||||||||||||||
Annualized cash operating return on average tangible common equity (3) | 14.88 | 14.54 | 15.23 | 13.99 | 13.37 | |||||||||||||||
Net interest rate spread | 3.52 | 3.48 | 3.50 | 3.64 | 3.63 | |||||||||||||||
Cost of funds (4) | 0.33 | 0.28 | 0.28 | 0.27 | 0.27 | |||||||||||||||
Efficiency ratio (5) | 63.99 | 64.62 | 62.69 | 65.32 | 63.49 | |||||||||||||||
Annualized net non-interest expense to average assets (6) | 1.35 | 1.35 | 1.06 | 1.35 | 1.31 | |||||||||||||||
Core non-interest income to revenues (7) | 37.87 | 38.15 | 43.98 | 41.40 | 39.38 | |||||||||||||||
Net interest margin | 3.57 | 3.50 | 3.49 | 3.60 | 3.57 | |||||||||||||||
Tax equivalent effect | 0.17 | 0.17 | 0.19 | 0.21 | 0.22 | |||||||||||||||
Net interest margin - fully tax equivalent basis (8) | 3.74 | 3.67 | 3.68 | 3.81 | 3.79 | |||||||||||||||
Net interest margin - fully tax equivalent basis excluding acquisition accounting discount accretion on bank merger loans (9) | 3.55 | 3.47 | 3.50 | 3.57 | 3.55 | |||||||||||||||
Loans to deposits | 92.56 | 90.49 | 87.82 | 89.17 | 86.37 | |||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Non-performing loans (10) to total loans | 0.38 | % | 0.46 | % | 0.43 | % | 0.73 | % | 0.95 | % | ||||||||||
Non-performing assets (10) to total assets | 0.34 | 0.45 | 0.45 | 0.64 | 0.79 | |||||||||||||||
Allowance for loan and lease losses to non-performing loans (10) | 293.02 | 234.81 | 258.82 | 181.46 | 142.00 | |||||||||||||||
Allowance for loan and lease losses to total loans | 1.11 | 1.09 | 1.11 | 1.33 | 1.35 | |||||||||||||||
Net loan (recoveries) charge-offs to average loans, excluding loans held for sale (annualized) | (0.03 | ) | 0.10 | 0.09 | 0.09 | 0.06 | ||||||||||||||
Capital Ratios: | ||||||||||||||||||||
Tangible equity to tangible assets (11) | 8.71 | % | 8.42 | % | 8.34 | % | 9.21 | % | 9.24 | % | ||||||||||
Tangible common equity to tangible assets (12) | 8.07 | 7.79 | 7.71 | 8.46 | 8.46 | |||||||||||||||
Tangible common equity to risk weighted assets (13) | 9.07 | 8.80 | 8.83 | 9.75 | 9.54 | |||||||||||||||
Total capital (to risk-weighted assets) (14) | 11.80 | 11.63 | 11.66 | 12.81 | 12.65 | |||||||||||||||
Tier 1 capital (to risk-weighted assets) (14) | 9.54 | 9.40 | 9.40 | 11.77 | 11.60 | |||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) (14) | 8.84 | 8.72 | 8.71 | 9.52 | 9.33 | |||||||||||||||
Tier 1 capital (to average assets) (14) | 8.58 | 8.38 | 9.29 | 10.41 | 10.38 | |||||||||||||||
Per Share Data: | ||||||||||||||||||||
Book value per common share (15) | $ | 29.83 | $ | 29.43 | $ | 29.28 | $ | 27.68 | $ | 27.26 | ||||||||||
Less: goodwill and other intangible assets, net of tax benefit, per common share | 12.40 | 12.45 | 12.40 | 10.20 | 10.22 | |||||||||||||||
Tangible book value per common share (16) | $ | 17.43 | $ | 16.98 | $ | 16.88 | $ | 17.48 | $ | 17.04 | ||||||||||
Cash dividends per common share | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.17 |
(1) | Annualized operating return on average assets is computed by dividing annualized operating earnings by average total assets. Annualized operating return on average common equity is computed by dividing annualized operating earnings by average common equity. Operating earnings is defined as net income as reported less non-core items, net of tax. |
9
(2) | Annualized cash return on average tangible common equity is computed by dividing net cash flow available to common stockholders (net income available to common stockholders, plus other intangibles amortization expense, net of tax benefit) by average tangible common equity (average common stockholders' equity less average goodwill and average other intangibles, net of tax benefit). |
(3) | Annualized cash operating return on average tangible common equity is computed by dividing annualized cash operating earnings (operating earnings plus other intangibles amortization expense, net of tax benefit, less dividends on preferred shares) by average tangible common equity. Operating earnings is defined as net income as reported less non-core items, net of tax. |
(4) | Equals total interest expense divided by the sum of average interest bearing liabilities and noninterest bearing deposits. |
(5) | 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. |
(6) | 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. |
(7) | 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. |
(8) | Represents net interest income on a fully tax equivalent basis assuming a 35% tax rate, as a percentage of average interest earning assets. |
(9) | Represents net interest income on a fully tax equivalent basis assuming a 35% tax rate, excluding acquisition accounting discount accretion on bank merger loans as a percentage of average interest earning assets. |
(10) | 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. |
(11) | 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. |
(12) | Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by total assets less goodwill and other intangibles, net of tax benefit. |
(13) | Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by risk-weighted assets. Current quarter risk-weighted assets are estimated. |
(14) | Current quarter ratios are estimated. |
(15) | Equals total ending common stockholders’ equity divided by common shares outstanding. |
(16) | Equals total ending common stockholders’ equity less goodwill and other intangibles, net of tax benefit, divided by common shares outstanding. |
BALANCE SHEET DETAILS TO FOLLOW
10
INVESTMENT SECURITIES |
The following table sets forth, by type, the carrying value of our investment securities, excluding FHLB and FRB stock, as well as the unrealized gain, net of our investment securities available for sale as of the dates indicated (in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Securities available for sale: | ||||||||||||||||||||
Fair value | ||||||||||||||||||||
Government sponsored agencies and enterprises | $ | 23,330 | $ | 23,415 | $ | 53,968 | $ | 54,457 | $ | 64,762 | ||||||||||
States and political subdivisions | 389,109 | 391,365 | 410,737 | 400,948 | 398,024 | |||||||||||||||
Mortgage-backed securities | 1,056,529 | 1,076,692 | 1,173,330 | 785,367 | 834,559 | |||||||||||||||
Corporate bonds | 178,097 | 193,895 | 210,193 | 225,525 | 224,530 | |||||||||||||||
Equity securities | 10,885 | 10,828 | 11,128 | 11,098 | 10,969 | |||||||||||||||
Total fair value | $ | 1,657,950 | $ | 1,696,195 | $ | 1,859,356 | $ | 1,477,395 | $ | 1,532,844 | ||||||||||
Unrealized gain, net | ||||||||||||||||||||
Government sponsored agencies and enterprises | $ | 126 | $ | 148 | $ | 512 | $ | 783 | $ | 1,162 | ||||||||||
States and political subdivisions | 17,780 | 14,824 | 27,696 | 31,132 | 27,018 | |||||||||||||||
Mortgage-backed securities | (2,412 | ) | (4,001 | ) | 12,534 | 16,258 | 13,734 | |||||||||||||
Corporate bonds | 762 | 731 | 1,253 | 795 | (1,127 | ) | ||||||||||||||
Equity securities | (172 | ) | (172 | ) | 196 | 226 | 155 | |||||||||||||
Total unrealized gain, net | $ | 16,084 | $ | 11,530 | $ | 42,191 | $ | 49,194 | $ | 40,942 | ||||||||||
Securities held to maturity, at amortized cost: | ||||||||||||||||||||
States and political subdivisions | $ | 910,336 | $ | 910,608 | $ | 939,491 | $ | 960,784 | $ | 986,340 | ||||||||||
Mortgage-backed securities | 145,672 | 159,142 | 175,771 | 190,631 | 205,570 | |||||||||||||||
Total amortized cost | $ | 1,056,008 | $ | 1,069,750 | $ | 1,115,262 | $ | 1,151,415 | $ | 1,191,910 |
11
LOAN PORTFOLIO |
The following table sets forth the composition of the loan portfolio (excluding loans held for sale) based on period end balances as of the dates indicated (dollars in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||
Commercial-related loans: | |||||||||||||||||||||||||||||||||||
Commercial | $ | 4,364,122 | 34 | % | $ | 4,346,506 | 34 | % | $ | 4,385,812 | 35 | % | $ | 3,561,500 | 35 | % | $ | 3,509,604 | 36 | % | |||||||||||||||
Commercial loans collateralized by assignment of lease payments (lease loans) | 2,008,601 | 16 | 2,002,976 | 16 | 1,873,380 | 15 | 1,794,465 | 18 | 1,774,104 | 18 | |||||||||||||||||||||||||
Commercial real estate | 3,734,171 | 29 | 3,788,016 | 29 | 3,794,801 | 30 | 2,827,720 | 28 | 2,831,814 | 28 | |||||||||||||||||||||||||
Construction real estate | 554,942 | 4 | 518,562 | 4 | 451,023 | 4 | 357,807 | 3 | 310,278 | 3 | |||||||||||||||||||||||||
Total commercial-related loans | 10,661,836 | 83 | 10,656,060 | 83 | 10,505,016 | 84 | 8,541,492 | 84 | 8,425,800 | 85 | |||||||||||||||||||||||||
Other loans: | |||||||||||||||||||||||||||||||||||
Residential real estate | 1,227,218 | 9 | 1,060,828 | 8 | 998,827 | 8 | 753,707 | 7 | 677,791 | 7 | |||||||||||||||||||||||||
Indirect vehicle | 573,792 | 4 | 541,680 | 4 | 522,271 | 4 | 491,480 | 5 | 432,915 | 4 | |||||||||||||||||||||||||
Home equity | 246,805 | 2 | 266,377 | 2 | 275,288 | 2 | 198,622 | 2 | 207,079 | 2 | |||||||||||||||||||||||||
Consumer | 80,016 | 1 | 80,781 | 1 | 77,956 | 1 | 75,775 | 1 | 77,318 | 1 | |||||||||||||||||||||||||
Total other loans | 2,127,831 | 16 | 1,949,666 | 15 | 1,874,342 | 15 | 1,519,584 | 15 | 1,395,103 | 14 | |||||||||||||||||||||||||
Total loans, excluding purchased credit-impaired loans | 12,789,667 | 99 | 12,605,726 | 98 | 12,379,358 | 99 | 10,061,076 | 99 | 9,820,903 | 99 | |||||||||||||||||||||||||
Purchased credit-impaired loans | 168,814 | 1 | 163,077 | 2 | 161,338 | 1 | 136,811 | 1 | 140,445 | 1 | |||||||||||||||||||||||||
Total loans | $ | 12,958,481 | 100 | % | $ | 12,768,803 | 100 | % | $ | 12,540,696 | 100 | % | $ | 10,197,887 | 100 | % | $ | 9,961,348 | 100 | % | |||||||||||||||
Change from prior quarter | +1.5 | % | +1.8 | % | +23.0 | % | +2.4 | % | +1.7 | % | |||||||||||||||||||||||||
Change from same quarter one year ago | +30.1 | % | +30.4 | % | +33.6 | % | +12.1 | % | +11.7 | % |
The following table sets forth the composition of the loan portfolio (excluding loans held for sale) based on quarterly average balances for the periods indicated (dollars in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | |||||||||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||
Commercial-related loans: | |||||||||||||||||||||||||||||||||||
Commercial | $ | 4,269,545 | 34 | % | $ | 4,274,398 | 35 | % | $ | 3,850,588 | 35 | % | $ | 3,522,641 | 35 | % | $ | 3,531,441 | 36 | % | |||||||||||||||
Commercial loans collateralized by assignment of lease payments (lease loans) | 1,938,564 | 15 | 1,896,486 | 15 | 1,825,505 | 16 | 1,777,763 | 18 | 1,754,558 | 18 | |||||||||||||||||||||||||
Commercial real estate | 3,742,505 | 30 | 3,775,599 | 30 | 3,183,131 | 29 | 2,821,516 | 28 | 2,734,148 | 28 | |||||||||||||||||||||||||
Construction real estate | 554,612 | 4 | 486,861 | 4 | 397,480 | 4 | 351,079 | 3 | 276,797 | 3 | |||||||||||||||||||||||||
Total commercial-related loans | 10,505,226 | 83 | 10,433,344 | 84 | 9,256,704 | 84 | 8,472,999 | 84 | 8,296,944 | 85 | |||||||||||||||||||||||||
Other loans: | |||||||||||||||||||||||||||||||||||
Residential real estate | 1,133,927 | 9 | 1,031,152 | 8 | 862,393 | 7 | 710,384 | 7 | 640,231 | 7 | |||||||||||||||||||||||||
Indirect vehicle | 552,669 | 4 | 532,782 | 4 | 507,772 | 5 | 462,053 | 5 | 404,473 | 4 | |||||||||||||||||||||||||
Home equity | 253,654 | 2 | 273,694 | 2 | 231,399 | 2 | 202,228 | 2 | 210,678 | 2 | |||||||||||||||||||||||||
Consumer | 81,564 | 1 | 80,113 | 1 | 77,451 | 1 | 78,108 | 1 | 80,569 | 1 | |||||||||||||||||||||||||
Total other loans | 2,021,814 | 16 | 1,917,741 | 15 | 1,679,015 | 15 | 1,452,773 | 15 | 1,335,951 | 14 | |||||||||||||||||||||||||
Total loans, excluding purchased credit-impaired loans | 12,527,040 | 99 | 12,351,085 | 99 | 10,935,719 | 99 | 9,925,772 | 99 | 9,632,895 | 99 | |||||||||||||||||||||||||
Purchased credit-impaired loans | 156,058 | 1 | 152,509 | 1 | 135,548 | 1 | 136,415 | 1 | 139,451 | 1 | |||||||||||||||||||||||||
Total loans | $ | 12,683,098 | 100 | % | $ | 12,503,594 | 100 | % | $ | 11,071,267 | 100 | % | $ | 10,062,187 | 100 | % | $ | 9,772,346 | 100 | % | |||||||||||||||
Change from prior quarter | +1.4 | % | +12.9 | % | +10.0 | % | +3.0 | % | +2.5 | % | |||||||||||||||||||||||||
Change from same quarter one year ago | +29.8 | % | +31.1 | % | +20.5 | % | +12.2 | % | +9.9 | % |
12
ASSET QUALITY |
The following table presents a summary of criticized assets (excluding loans held for sale and excluding other real estate owned acquired as part of our FDIC-assisted transactions) as of the dates indicated (dollars in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Non-performing loans: | ||||||||||||||||||||
Non-accrual loans (1) | $ | 47,042 | $ | 48,974 | $ | 52,135 | $ | 67,544 | $ | 93,602 | ||||||||||
Loans 90 days or more past due, still accruing interest | 2,159 | 10,378 | 1,774 | 7,190 | 1,112 | |||||||||||||||
Total non-performing loans | 49,201 | 59,352 | 53,909 | 74,734 | 94,714 | |||||||||||||||
Other real estate owned | 14,706 | 26,279 | 33,105 | 27,663 | 28,309 | |||||||||||||||
Repossessed assets | 477 | 322 | 453 | 459 | 187 | |||||||||||||||
Total non-performing assets | $ | 64,384 | $ | 85,953 | $ | 87,467 | $ | 102,856 | $ | 123,210 | ||||||||||
Potential problem loans (2) | $ | 153,779 | $ | 144,544 | $ | 111,594 | $ | 99,782 | $ | 110,193 | ||||||||||
Purchased credit-impaired loans (3) | $ | 168,814 | $ | 163,077 | $ | 161,338 | $ | 136,811 | $ | 140,445 | ||||||||||
Total non-performing, potential problem and purchased credit-impaired loans | $ | 371,794 | $ | 366,973 | $ | 326,841 | $ | 311,327 | $ | 345,352 | ||||||||||
Total allowance for loan and lease losses | $ | 144,170 | $ | 139,366 | $ | 139,528 | $ | 135,614 | $ | 134,493 | ||||||||||
Accruing restructured loans (4) | 31,384 | 32,687 | 28,561 | 26,715 | 27,269 | |||||||||||||||
Total non-performing loans to total loans | 0.38 | % | 0.46 | % | 0.43 | % | 0.73 | % | 0.95 | % | ||||||||||
Total non-performing assets to total assets | 0.34 | 0.45 | 0.45 | 0.64 | 0.79 | |||||||||||||||
Allowance for loan and lease losses to non-performing loans | 293.02 | 234.81 | 258.82 | 181.46 | 142.00 |
(1) | Includes $20.7 million, $27.1 million, $23.4 million, $28.9 million and $24.0 million of restructured loans on non-accrual status at March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively. |
(2) | We define potential problem loans as loans rated substandard that do not meet the definition of a non-performing loan. Potential problem loans carry a higher probability of default and require additional attention by management. |
(3) | Includes $68.8 million, $66.1 million, $60.1 million, $54.1 million and $50.4 million of Government National Mortgage Association ("GNMA") loans that have been repurchased at March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively. |
(4) | Accruing restructured loans consist of 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 purchased credit-impaired loans that were previously acquired as part of our FDIC-assisted transactions and bank mergers) as of the dates indicated (in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Commercial and lease | $ | 8,739 | $ | 15,189 | $ | 14,898 | $ | 29,509 | $ | 28,590 | ||||||||||
Commercial real estate | 8,719 | 11,767 | 4,655 | 7,163 | 27,786 | |||||||||||||||
Consumer-related | 31,743 | 32,396 | 34,356 | 38,062 | 38,338 | |||||||||||||||
Total non-performing loans | $ | 49,201 | $ | 59,352 | $ | 53,909 | $ | 74,734 | $ | 94,714 |
13
Below is a reconciliation of the activity in our allowance for credit and loan and lease losses for the periods indicated (dollars in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Allowance for credit losses, balance at the beginning of period | $ | 141,842 | $ | 142,399 | $ | 138,333 | $ | 137,732 | $ | 131,508 | ||||||||||
Provision for credit losses | 3,734 | 2,622 | 6,549 | 2,829 | 7,563 | |||||||||||||||
Charge-offs | 3,373 | 6,442 | 4,157 | 6,424 | 3,588 | |||||||||||||||
Recoveries | 4,295 | 3,263 | 1,674 | 4,196 | 2,249 | |||||||||||||||
Net (recoveries) charge-offs | (922 | ) | 3,179 | 2,483 | 2,228 | 1,339 | ||||||||||||||
Allowance for credit losses | 146,498 | 141,842 | 142,399 | 138,333 | 137,732 | |||||||||||||||
Allowance for unfunded credit commitments | (2,328 | ) | (2,476 | ) | (2,871 | ) | (2,719 | ) | (3,239 | ) | ||||||||||
Allowance for loan and lease losses | $ | 144,170 | $ | 139,366 | $ | 139,528 | $ | 135,614 | $ | 134,493 | ||||||||||
Total loans, excluding loans held for sale | $ | 12,958,481 | $ | 12,768,803 | $ | 12,540,696 | $ | 10,197,887 | $ | 9,961,348 | ||||||||||
Average loans, excluding loans held for sale | 12,683,098 | 12,503,594 | 11,071,267 | 10,062,187 | 9,772,346 | |||||||||||||||
Allowance for loan and lease losses to total loans, excluding loans held for sale | 1.11 | % | 1.09 | % | 1.11 | % | 1.33 | % | 1.35 | % | ||||||||||
Net loan (recoveries) charge-offs to average loans, excluding loans held for sale (annualized) | (0.03 | ) | 0.10 | 0.09 | 0.09 | 0.06 |
The following table presents the three elements of the Company's allowance for loan and lease losses as of the dates indicated (dollars in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Commercial related loans: | ||||||||||||||||||||
General reserve | $ | 125,370 | $ | 120,221 | $ | 112,653 | $ | 108,972 | $ | 98,001 | ||||||||||
Specific reserve | 1,272 | 3,243 | 9,698 | 12,205 | 20,995 | |||||||||||||||
Consumer related reserve | 17,528 | 15,902 | 17,177 | 14,437 | 15,497 | |||||||||||||||
Total allowance for loan and lease losses | $ | 144,170 | $ | 139,366 | $ | 139,528 | $ | 135,614 | $ | 134,493 |
Changes in the acquisition accounting discount for purchased credit-impaired ("PCI") and non-purchased credit-impaired ("Non-PCI") loans acquired in bank mergers were as follows for the three months ended March 31, 2017 (in thousands):
Non-Accretable Discount - PCI Loans | Accretable Discount - PCI Loans | Accretable Discount - Non-PCI Loans | Total | |||||||||||||
Balance at beginning of period | $ | 27,617 | $ | 16,050 | $ | 36,598 | $ | 80,265 | ||||||||
Purchases (1) | (1,687 | ) | 43 | (202 | ) | (1,846 | ) | |||||||||
Charge-offs | (5,172 | ) | — | — | (5,172 | ) | ||||||||||
Accretion | — | (2,188 | ) | (4,970 | ) | (7,158 | ) | |||||||||
Transfer (2) | (1,006 | ) | 1,006 | — | — | |||||||||||
Balance at end of period | $ | 19,752 | $ | 14,911 | $ | 31,426 | $ | 66,089 |
(1) | The acquisition accounting discount for loans acquired in the American Chartered merger was revised compared to previously reported balances. The change is reflected in this line. |
(2) | The transfer from non-accretable discount on purchased credit-impaired loans to accretable discount was due to better than expected cash flows on several pools of purchased credit-impaired loans. |
14
DEPOSIT MIX |
The following table shows the composition of deposits based on period end balances as of the dates indicated (dollars in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||
Low cost deposits: | |||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | $ | 6,211,173 | 44 | % | $ | 6,408,169 | 46 | % | $ | 6,410,334 | 45 | % | $ | 4,775,364 | 42 | % | $ | 4,667,410 | 40 | % | |||||||||||||||
Money market, NOW and interest bearing deposits | 4,580,773 | 33 | 4,543,004 | 32 | 4,660,407 | 33 | 3,771,111 | 33 | 4,048,054 | 35 | |||||||||||||||||||||||||
Savings deposits | 1,126,879 | 8 | 1,135,992 | 8 | 1,147,900 | 8 | 1,021,845 | 9 | 991,300 | 9 | |||||||||||||||||||||||||
Total low cost deposits | 11,918,825 | 85 | 12,087,165 | 86 | 12,218,641 | 86 | 9,568,320 | 84 | 9,706,764 | 84 | |||||||||||||||||||||||||
Certificates of deposit: | |||||||||||||||||||||||||||||||||||
Certificates of deposit | 1,261,228 | 9 | 1,225,102 | 9 | 1,298,186 | 9 | 1,220,562 | 11 | 1,255,457 | 11 | |||||||||||||||||||||||||
Brokered certificates of deposit | 819,330 | 6 | 798,181 | 5 | 762,439 | 5 | 647,214 | 5 | 571,605 | 5 | |||||||||||||||||||||||||
Total certificates of deposit | 2,080,558 | 15 | 2,023,283 | 14 | 2,060,625 | 14 | 1,867,776 | 16 | 1,827,062 | 16 | |||||||||||||||||||||||||
Total deposits | $ | 13,999,383 | 100 | % | $ | 14,110,448 | 100 | % | $ | 14,279,266 | 100 | % | $ | 11,436,096 | 100 | % | $ | 11,533,826 | 100 | % | |||||||||||||||
Change from prior quarter | -0.8 | % | -1.2 | % | +24.9 | % | -0.8 | % | +0.2 | % | |||||||||||||||||||||||||
Change from same quarter one year ago | +21.4 | % | +22.6 | % | +26.9 | % | +5.3 | % | +4.7 | % |
The following table shows the composition of deposits based on quarterly average balances for the periods indicated (dollars in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | |||||||||||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||
Low cost deposits: | |||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | $ | 6,209,402 | 45 | % | $ | 6,454,025 | 45 | % | $ | 5,524,043 | 43 | % | $ | 4,806,692 | 42 | % | $ | 4,606,008 | 40 | % | |||||||||||||||
Money market, NOW and interest bearing deposits | 4,529,402 | 33 | 4,628,698 | 33 | 4,161,913 | 33 | 3,836,134 | 33 | 4,109,150 | 36 | |||||||||||||||||||||||||
Savings deposits | 1,131,757 | 8 | 1,140,926 | 8 | 1,080,609 | 8 | 1,006,902 | 9 | 984,019 | 9 | |||||||||||||||||||||||||
Total low cost deposits | 11,870,561 | 86 | 12,223,649 | 86 | 10,766,565 | 84 | 9,649,728 | 84 | 9,699,177 | 85 | |||||||||||||||||||||||||
Certificates of deposit: | |||||||||||||||||||||||||||||||||||
Certificates of deposit | 1,245,152 | 9 | 1,263,675 | 9 | 1,257,959 | 10 | 1,237,198 | 11 | 1,237,971 | 11 | |||||||||||||||||||||||||
Brokered certificates of deposit | 815,473 | 5 | 779,411 | 5 | 702,030 | 6 | 598,702 | 5 | 534,910 | 4 | |||||||||||||||||||||||||
Total certificates of deposit | 2,060,625 | 14 | 2,043,086 | 14 | 1,959,989 | 16 | 1,835,900 | 16 | 1,772,881 | 15 | |||||||||||||||||||||||||
Total deposits | $ | 13,931,186 | 100 | % | $ | 14,266,735 | 100 | % | $ | 12,726,554 | 100 | % | $ | 11,485,628 | 100 | % | $ | 11,472,058 | 100 | % | |||||||||||||||
Change from prior quarter | -2.4 | % | +12.1 | % | +10.8 | % | +0.1 | % | -0.5 | % | |||||||||||||||||||||||||
Change from same quarter one year ago | +21.4 | % | +23.7 | % | +13.2 | % | +5.4 | % | +4.4 | % |
STATEMENT OF OPERATIONS DETAILS TO FOLLOW
15
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):
1Q17 | 4Q16 | 1Q16 | ||||||||||||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||||||||||||||||
Interest Earning Assets: | ||||||||||||||||||||||||||||||||||
Loans held for sale | $ | 565,128 | $ | 5,033 | 3.56 | % | $ | 859,254 | $ | 7,100 | 3.31 | % | $ | 661,021 | $ | 5,966 | 3.61 | % | ||||||||||||||||
Loans (1) (2) (3): | ||||||||||||||||||||||||||||||||||
Commercial-related loans: | ||||||||||||||||||||||||||||||||||
Commercial | 4,269,545 | 45,755 | 4.29 | 4,274,398 | 45,255 | 4.14 | 3,531,441 | 37,357 | 4.18 | |||||||||||||||||||||||||
Commercial loans collateralized by assignment of lease payments (lease loans) | 1,938,564 | 17,781 | 3.67 | 1,896,486 | 17,275 | 3.64 | 1,754,558 | 16,577 | 3.78 | |||||||||||||||||||||||||
Commercial real estate | 3,742,505 | 40,500 | 4.33 | 3,775,599 | 41,508 | 4.30 | 2,734,148 | 28,039 | 4.06 | |||||||||||||||||||||||||
Construction real estate | 554,612 | 5,569 | 4.02 | 486,861 | 4,592 | 3.69 | 276,797 | 2,902 | 4.15 | |||||||||||||||||||||||||
Total commercial-related loans | 10,505,226 | 109,605 | 4.17 | 10,433,344 | 108,630 | 4.07 | 8,296,944 | 84,875 | 4.05 | |||||||||||||||||||||||||
Other loans: | ||||||||||||||||||||||||||||||||||
Residential real estate | 1,133,927 | 9,441 | 3.33 | 1,031,152 | 8,522 | 3.31 | 640,231 | 5,695 | 3.56 | |||||||||||||||||||||||||
Home equity | 253,654 | 2,502 | 4.00 | 273,694 | 2,651 | 3.85 | 210,678 | 2,033 | 3.88 | |||||||||||||||||||||||||
Indirect | 552,669 | 6,111 | 4.48 | 532,782 | 6,198 | 4.63 | 404,473 | 4,758 | 4.73 | |||||||||||||||||||||||||
Consumer | 81,564 | 800 | 3.98 | 80,113 | 776 | 3.86 | 80,569 | 794 | 3.97 | |||||||||||||||||||||||||
Total other loans | 2,021,814 | 18,854 | 3.78 | 1,917,741 | 18,147 | 3.76 | 1,335,951 | 13,280 | 4.00 | |||||||||||||||||||||||||
Total loans, excluding purchased credit-impaired loans | 12,527,040 | 128,459 | 4.16 | 12,351,085 | 126,777 | 4.08 | 9,632,895 | 98,155 | 4.10 | |||||||||||||||||||||||||
Purchased credit-impaired loans | 156,058 | 4,675 | 12.15 | 152,509 | 4,704 | 12.27 | 139,451 | 4,780 | 13.75 | |||||||||||||||||||||||||
Total loans | 12,683,098 | 133,134 | 4.26 | 12,503,594 | 131,481 | 4.18 | 9,772,346 | 102,935 | 4.24 | |||||||||||||||||||||||||
Taxable investment securities | 1,593,209 | 9,122 | 2.29 | 1,721,537 | 9,362 | 2.18 | 1,524,583 | 9,566 | 2.51 | |||||||||||||||||||||||||
Investment securities exempt from federal income taxes (3) | 1,278,150 | 15,344 | 4.80 | 1,304,931 | 15,724 | 4.82 | 1,362,468 | 16,579 | 4.87 | |||||||||||||||||||||||||
Federal funds sold | 38 | 0 | 1.23 | 36 | 0 | 1.00 | 42 | 0 | 1.00 | |||||||||||||||||||||||||
Other interest earning deposits | 130,553 | 199 | 0.62 | 107,311 | 157 | 0.58 | 113,748 | 141 | 0.50 | |||||||||||||||||||||||||
Total interest earning assets | $ | 16,250,176 | $ | 162,832 | 4.06 | % | $ | 16,496,663 | $ | 163,824 | 3.95 | % | $ | 13,434,208 | $ | 135,187 | 4.05 | % | ||||||||||||||||
Non-interest earning assets | 2,752,806 | 2,696,084 | 2,053,357 | |||||||||||||||||||||||||||||||
Total assets | $ | 19,002,982 | $ | 19,192,747 | $ | 15,487,565 | ||||||||||||||||||||||||||||
Interest Bearing Liabilities: | ||||||||||||||||||||||||||||||||||
Core funding: | ||||||||||||||||||||||||||||||||||
Money market, NOW and interest bearing deposits | $ | 4,529,402 | $ | 2,622 | 0.23 | % | $ | 4,628,698 | $ | 2,593 | 0.22 | % | $ | 4,109,150 | $ | 2,086 | 0.20 | % | ||||||||||||||||
Savings deposits | 1,131,757 | 255 | 0.09 | 1,140,926 | 273 | 0.10 | 984,019 | 159 | 0.06 | |||||||||||||||||||||||||
Certificates of deposit | 1,245,152 | 1,690 | 0.55 | 1,263,675 | 1,728 | 0.54 | 1,237,971 | 1,413 | 0.46 | |||||||||||||||||||||||||
Customer repurchase agreements | 198,977 | 100 | 0.20 | 247,273 | 129 | 0.21 | 190,114 | 94 | 0.20 | |||||||||||||||||||||||||
Total core funding | 7,105,288 | 4,667 | 0.27 | 7,280,572 | 4,723 | 0.26 | 6,521,254 | 3,752 | 0.23 | |||||||||||||||||||||||||
Wholesale funding: | ||||||||||||||||||||||||||||||||||
Brokered certificates of deposit (includes fee expense) | 815,473 | 2,908 | 1.45 | 779,411 | 2,730 | 1.39 | 534,910 | 1,964 | 1.48 | |||||||||||||||||||||||||
Other borrowings | 1,819,393 | 5,293 | 1.16 | 1,638,605 | 4,067 | 0.97 | 1,327,274 | 2,972 | 0.89 | |||||||||||||||||||||||||
Total wholesale funding | 2,634,866 | 8,201 | 1.26 | 2,418,016 | 6,797 | 1.12 | 1,862,184 | 4,936 | 1.07 | |||||||||||||||||||||||||
Total interest bearing liabilities | $ | 9,740,154 | $ | 12,868 | 0.54 | % | $ | 9,698,588 | $ | 11,520 | 0.47 | % | $ | 8,383,438 | $ | 8,688 | 0.42 | % | ||||||||||||||||
Non-interest bearing deposits | 6,209,402 | 6,454,025 | 4,606,008 | |||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 465,083 | 482,449 | 398,460 | |||||||||||||||||||||||||||||||
Stockholders' equity | 2,588,343 | 2,557,685 | 2,099,659 | |||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 19,002,982 | $ | 19,192,747 | $ | 15,487,565 | ||||||||||||||||||||||||||||
Net interest income/interest rate spread (4) | $ | 149,964 | 3.52 | % | $ | 152,304 | 3.48 | % | $ | 126,499 | 3.63 | % | ||||||||||||||||||||||
Taxable equivalent adjustment | 6,921 | 7,090 | 7,195 | |||||||||||||||||||||||||||||||
Net interest income, as reported | $ | 143,043 | $ | 145,214 | $ | 119,304 | ||||||||||||||||||||||||||||
Net interest margin (5) | 3.57 | % | 3.50 | % | 3.57 | % | ||||||||||||||||||||||||||||
Tax equivalent effect | 0.17 | % | 0.17 | % | 0.22 | % | ||||||||||||||||||||||||||||
Net interest margin on a fully tax equivalent basis (5) | 3.74 | % | 3.67 | % | 3.79 | % |
(1) | Non-accrual loans are included in average loans. |
(2) | Interest income includes amortization of deferred loan origination fees and costs. |
(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. |
16
The tables below reflect the impact the acquisition accounting loan discount accretion on acquired loans had on the loan yield and net interest margin on a fully tax equivalent basis for the periods indicated (dollars in thousands):
1Q17 | 4Q16 | 1Q16 | |||||||||||||||||||||||||||||||
Average Balance | Interest | Yield | Average Balance | Interest | Yield | Average Balance | Interest | Yield | |||||||||||||||||||||||||
Loan yield excluding acquisition accounting discount accretion on bank merger loans: | |||||||||||||||||||||||||||||||||
Total loans, as reported | $ | 12,683,098 | $ | 133,134 | 4.26 | % | $ | 12,503,594 | $ | 131,481 | 4.18 | % | $ | 9,772,346 | $ | 102,935 | 4.24 | % | |||||||||||||||
Less acquisition accounting discount accretion on non-PCI loans | (38,442 | ) | 4,970 | (42,978 | ) | 4,854 | (32,293 | ) | 4,950 | ||||||||||||||||||||||||
Less acquisition accounting discount accretion on PCI loans | (33,811 | ) | 2,188 | (34,360 | ) | 2,709 | (25,696 | ) | 2,403 | ||||||||||||||||||||||||
Total loans, excluding acquisition accounting discount accretion on bank merger loans | $ | 12,755,351 | $ | 125,976 | 4.01 | % | $ | 12,580,932 | $ | 123,918 | 3.92 | % | $ | 9,830,335 | $ | 95,582 | 3.91 | % | |||||||||||||||
Net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on bank merger loans: | |||||||||||||||||||||||||||||||||
Total interest earning assets, as reported | $ | 16,250,176 | $ | 149,964 | 3.74 | % | $ | 16,496,663 | $ | 152,304 | 3.67 | % | $ | 13,434,208 | $ | 126,499 | 3.79 | % | |||||||||||||||
Less acquisition accounting discount accretion on non-PCI loans | (38,442 | ) | 4,970 | (42,978 | ) | 4,854 | (32,293 | ) | 4,950 | ||||||||||||||||||||||||
Less acquisition accounting discount accretion on PCI loans | (33,811 | ) | 2,188 | (34,360 | ) | 2,709 | (25,696 | ) | 2,403 | ||||||||||||||||||||||||
Total interest earning assets/net interest margin on a fully tax equivalent basis, excluding acquisition accounting discount accretion on bank merger loans | $ | 16,322,429 | $ | 142,806 | 3.55 | % | $ | 16,574,001 | $ | 144,741 | 3.47 | % | $ | 13,492,197 | $ | 119,146 | 3.55 | % |
NON-INTEREST INCOME |
The following table presents non-interest income (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Core non-interest income: | ||||||||||||||||||||
Key fee initiatives: | ||||||||||||||||||||
Mortgage banking revenue | $ | 27,779 | $ | 32,277 | $ | 49,095 | $ | 39,615 | $ | 27,482 | ||||||||||
Lease financing revenue, net | 21,418 | 19,868 | 18,864 | 15,708 | 19,046 | |||||||||||||||
Commercial deposit and treasury management fees | 14,689 | 14,237 | 12,957 | 11,548 | 11,878 | |||||||||||||||
Trust and asset management fees | 8,520 | 8,442 | 8,244 | 8,236 | 7,950 | |||||||||||||||
Card fees | 4,566 | 4,340 | 4,161 | 4,045 | 3,525 | |||||||||||||||
Capital markets and international banking service fees | 3,253 | 4,021 | 3,313 | 2,771 | 3,227 | |||||||||||||||
Total key fee initiatives | 80,225 | 83,185 | 96,634 | 81,923 | 73,108 | |||||||||||||||
Consumer and other deposit service fees | 3,363 | 3,563 | 3,559 | 3,161 | 3,025 | |||||||||||||||
Brokerage fees | 1,125 | 887 | 1,294 | 1,315 | 1,158 | |||||||||||||||
Loan service fees | 1,969 | 1,952 | 1,792 | 1,961 | 1,752 | |||||||||||||||
Increase in cash surrender value of life insurance | 1,288 | 1,316 | 1,055 | 850 | 854 | |||||||||||||||
Other operating income | 2,734 | 2,350 | 3,337 | 2,043 | 1,836 | |||||||||||||||
Total core non-interest income | 90,704 | 93,253 | 107,671 | 91,253 | 81,733 | |||||||||||||||
Non-core non-interest income: | ||||||||||||||||||||
Net gain on investment securities | 231 | 178 | — | 269 | — | |||||||||||||||
Net (loss) gain on disposal of other assets | (123 | ) | (749 | ) | 5 | (2 | ) | (48 | ) | |||||||||||
Increase in market value of assets held in trust for deferred compensation (1) | 961 | 141 | 711 | 480 | 8 | |||||||||||||||
Total non-core non-interest income | 1,069 | (430 | ) | 716 | 747 | (40 | ) | |||||||||||||
Total non-interest income | $ | 91,773 | $ | 92,823 | $ | 108,387 | $ | 92,000 | $ | 81,693 |
(1) | Resides in other operating income in the consolidated statements of operations. |
17
NON-INTEREST EXPENSE |
The following table presents non-interest expense (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Core non-interest expense: (1) | ||||||||||||||||||||
Salaries and employee benefits expense: | ||||||||||||||||||||
Salaries | $ | 58,811 | $ | 60,553 | $ | 56,083 | $ | 52,281 | $ | 49,787 | ||||||||||
Commissions | 8,611 | 10,306 | 11,323 | 9,924 | 9,370 | |||||||||||||||
Bonus and stock-based compensation | 12,290 | 12,167 | 12,980 | 12,871 | 8,657 | |||||||||||||||
Health and accident insurance | 6,623 | 5,951 | 6,377 | 6,079 | 5,599 | |||||||||||||||
Other salaries and benefits (2) | 13,641 | 15,072 | 15,320 | 13,045 | 12,089 | |||||||||||||||
Total salaries and employee benefits expense | 99,976 | 104,049 | 102,083 | 94,200 | 85,502 | |||||||||||||||
Occupancy and equipment expense | 15,040 | 15,594 | 14,662 | 13,407 | 13,260 | |||||||||||||||
Computer services and telecommunication expense | 9,255 | 11,019 | 9,731 | 9,266 | 8,750 | |||||||||||||||
Advertising and marketing expense | 3,161 | 3,039 | 3,031 | 2,923 | 2,855 | |||||||||||||||
Professional and legal expense | 2,594 | 2,351 | 2,779 | 3,220 | 2,492 | |||||||||||||||
Other intangible amortization expense | 2,091 | 2,388 | 1,674 | 1,617 | 1,626 | |||||||||||||||
Net loss (gain) recognized on other real estate owned (A) | 607 | (982 | ) | (908 | ) | 15 | (483 | ) | ||||||||||||
Other real estate expense, net (A) | 237 | 192 | 187 | 243 | 137 | |||||||||||||||
Other operating expenses | 21,485 | 21,478 | 21,067 | 19,814 | 18,366 | |||||||||||||||
Total core non-interest expense | 154,446 | 159,128 | 154,306 | 144,705 | 132,505 | |||||||||||||||
Non-core non-interest expense: (1) | ||||||||||||||||||||
Merger related and repositioning expenses (B) | 258 | 6,491 | 11,368 | 2,566 | 3,287 | |||||||||||||||
Branch exit and facilities impairment charges | — | — | — | 155 | — | |||||||||||||||
Contribution to MB Financial Charitable Foundation (C) | — | — | 4,000 | — | — | |||||||||||||||
Increase in market value of assets held in trust for deferred compensation (D) | 961 | 141 | 711 | 480 | 8 | |||||||||||||||
Total non-core non-interest expense | 1,219 | 6,632 | 16,079 | 3,201 | 3,295 | |||||||||||||||
Total non-interest expense | $ | 155,665 | $ | 165,760 | $ | 170,385 | $ | 147,906 | $ | 135,800 |
(1) | Letters denote the corresponding line items where these non-core non-interest expense items reside in the consolidated statements of operations as follows: A – Net loss (gain) recognized on other real estate owned and other expense, B – See merger related and repositioning expenses table below, C – Other operating expenses, and D – Salaries and employee benefits. |
(2) | Includes payroll taxes, 401(k) and profit sharing contributions, overtime and temporary help expenses. |
The following table presents the detail of the merger related and repositioning expenses (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Merger related and repositioning expenses (1): | ||||||||||||||||||||
Salaries and employee benefits expense | $ | 614 | $ | 4,238 | $ | 8,684 | $ | 324 | $ | 81 | ||||||||||
Occupancy and equipment expense | 4 | 95 | 104 | 8 | — | |||||||||||||||
Computer services and telecommunication expense | 185 | 781 | 3,105 | 511 | 305 | |||||||||||||||
Advertising and marketing expense | — | 6 | 53 | 41 | 23 | |||||||||||||||
Professional and legal expense | 97 | 158 | 1,681 | 101 | 97 | |||||||||||||||
Branch exit and facilities impairment charges (2) | (682 | ) | — | (2,908 | ) | — | 44 | |||||||||||||
Contingent consideration expense - Celtic acquisition (3) | — | 1,000 | — | — | 2,703 | |||||||||||||||
Other operating expenses | 40 | 213 | 649 | 1,581 | 34 | |||||||||||||||
Total merger related and repositioning expenses | $ | 258 | $ | 6,491 | $ | 11,368 | $ | 2,566 | $ | 3,287 |
(1) | Primarily includes costs incurred in connection with the American Chartered merger. |
(2) | Includes a gain on the sale of a branch in the first quarter of 2017 and a reversal of an exit cost due to a favorable lease termination in the third quarter of 2016 on a branch acquired through the Taylor Capital merger. |
(3) | Includes an increase in our contingent consideration accrual for our acquisition of Celtic Leasing Corp. as a result of stronger lease residual performance than previously estimated. Resides in other operating expenses in the consolidated statements of operations. |
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MORTGAGE BANKING SEGMENT DATA |
The following table presents additional information regarding the Mortgage Banking Segment (dollars in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Mortgage origination revenue: | ||||||||||||||||||||
Gain on sale revenue, net (A) | $ | 15,607 | $ | 23,576 | $ | 35,190 | $ | 27,032 | $ | 14,299 | ||||||||||
Origination fees | 5,858 | 5,741 | 4,772 | 4,385 | 2,595 | |||||||||||||||
Total mortgage origination revenue | $ | 21,465 | $ | 29,317 | $ | 39,962 | $ | 31,417 | $ | 16,894 | ||||||||||
Mortgage servicing revenue: | ||||||||||||||||||||
Servicing fees | $ | 13,735 | $ | 12,610 | $ | 12,022 | $ | 11,418 | $ | 10,525 | ||||||||||
Amortization/prepayment of mortgage servicing rights (1) | (6,743 | ) | (8,777 | ) | (8,551 | ) | (7,790 | ) | (5,313 | ) | ||||||||||
Fair value changes of mortgage servicing rights | 4,083 | 65,006 | 9,853 | (19,035 | ) | (29,178 | ) | |||||||||||||
Economic hedge activity, net | (4,761 | ) | (65,879 | ) | (4,191 | ) | 23,605 | 34,554 | ||||||||||||
Fair value changes of mortgage servicing rights net of economic hedge activity | (678 | ) | (873 | ) | 5,662 | 4,570 | 5,376 | |||||||||||||
Total mortgage servicing revenue | $ | 6,314 | $ | 2,960 | $ | 9,133 | $ | 8,198 | $ | 10,588 | ||||||||||
Mortgage servicing rights, at fair value: | ||||||||||||||||||||
Beginning balance | $ | 238,011 | $ | 154,730 | $ | 134,969 | $ | 145,800 | $ | 168,162 | ||||||||||
Originations/purchases | 16,147 | 27,052 | 18,459 | 15,994 | 12,129 | |||||||||||||||
Amortization/prepayment (1) | (6,743 | ) | (8,777 | ) | (8,551 | ) | (7,790 | ) | (5,313 | ) | ||||||||||
Fair value changes | 4,083 | 65,006 | 9,853 | (19,035 | ) | (29,178 | ) | |||||||||||||
Ending balance | $ | 251,498 | $ | 238,011 | $ | 154,730 | $ | 134,969 | $ | 145,800 | ||||||||||
Mortgage servicing book (unpaid principal balance of loans serviced for others) | $ | 20,450,217 | $ | 19,683,073 | $ | 18,477,648 | $ | 17,739,626 | $ | 16,911,325 | ||||||||||
Mortgage servicing rights valuation | 1.23 | % | 1.21 | % | 0.84 | % | 0.76 | % | 0.86 | % | ||||||||||
Loans funded: | ||||||||||||||||||||
For sale | $ | 1,073,357 | $ | 1,933,208 | $ | 1,853,146 | $ | 1,594,632 | $ | 1,244,985 | ||||||||||
For investment | 212,745 | 121,198 | 123,228 | 114,412 | 83,819 | |||||||||||||||
Loans funded by purpose: | ||||||||||||||||||||
Refinance | 41 | % | 56 | % | 48 | % | 42 | % | 49 | % | ||||||||||
Purchase | 59 | 44 | 52 | 58 | 51 | |||||||||||||||
Loans funded by channel: | ||||||||||||||||||||
Retail | 23 | % | 21 | % | 22 | % | 23 | % | 19 | % | ||||||||||
Third party | 77 | 79 | 78 | 77 | 81 | |||||||||||||||
Originated for sale mortgage volume (2) (B) | $ | 1,061,173 | $ | 1,419,871 | $ | 2,055,919 | $ | 1,712,602 | $ | 1,364,869 | ||||||||||
Gain on sale margin (A)/(B) | 1.47 | % | 1.66 | % | 1.71 | % | 1.58 | % | 1.05 | % |
(1) | Changes due to collection or realization of expected cash flows. |
(2) | Includes change in mortgage rate lock commitments expected to close, change in loans held for sale and loans sold to investors during the period. |
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NON-GAAP FINANCIAL INFORMATION |
This document 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 operating earnings, 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, net interest margin on a fully tax equivalent basis excluding acquisition accounting discount accretion on bank mergers loans, efficiency ratio and the ratio of annualized net non-interest expense to average assets with net gains on investment securities, net gains and losses on disposal of other assets and increase in market value of assets held in trust for deferred compensation excluded from the non-interest income components of these ratios and branch exit and facilities impairment charges, merger related and repositioning expenses, increase in market value of assets held in trust for deferred compensation and contribution to MB Financial Charitable Foundation 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 tangible assets and tangible common equity to risk-weighted assets; tangible book value per common share; annualized operating return on average assets, annualized operating return on average common equity, annualized cash return on average tangible common equity and annualized cash operating 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 operating earnings, core and non-core non-interest income and core and non-core 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.
Management believes that operating earnings adjusted for merger related and repositioning expenses is a useful measure because it excludes expenses that can significantly fluctuate from acquisition to acquisition. In addition, management believes that excluding these expenses provides investors and analysts a measure to better understand the Company's primary operations when comparing the periods presented in the earnings release.
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 that 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 on investment securities, net gains and losses on disposal of other assets and increase in market value of assets held in trust for deferred compensation from the non-interest income components, and excluding branch exit and facilities impairment charges, merger related and repositioning expenses, increase in market value of assets held in trust for deferred compensation and contribution to MB Financial Charitable Foundation 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.
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.
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Reconciliations of net interest margin on a fully tax equivalent basis to net interest margin and net interest margin on a fully tax equivalent basis excluding acquisition accounting discount accretion on bank merger loans to net interest margin are 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 Data” 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 “Non-interest Income” and “Non-interest Expense.”
The following table presents a reconciliation of tangible equity to stockholders' equity (in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Stockholders' equity - as reported | $ | 2,616,428 | $ | 2,579,209 | $ | 2,563,408 | $ | 2,156,535 | $ | 2,122,885 | ||||||||||
Less goodwill | 999,925 | 1,001,038 | 993,799 | 725,039 | 725,068 | |||||||||||||||
Less other intangible assets, net of tax benefit | 39,565 | 40,923 | 42,507 | 27,020 | 28,071 | |||||||||||||||
Tangible equity | $ | 1,576,938 | $ | 1,537,248 | $ | 1,527,102 | $ | 1,404,476 | $ | 1,369,746 |
The following table presents a reconciliation of tangible assets to total assets (in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Total assets - as reported | $ | 19,146,062 | $ | 19,302,317 | $ | 19,341,882 | $ | 15,995,790 | $ | 15,575,653 | ||||||||||
Less goodwill | 999,925 | 1,001,038 | 993,799 | 725,039 | 725,068 | |||||||||||||||
Less other intangible assets, net of tax benefit | 39,565 | 40,923 | 42,507 | 27,020 | 28,071 | |||||||||||||||
Tangible assets | $ | 18,106,572 | $ | 18,260,356 | $ | 18,305,576 | $ | 15,243,731 | $ | 14,822,514 |
The following table presents a reconciliation of tangible common equity to common stockholders' equity (in thousands):
3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||||
Common stockholders' equity - as reported | $ | 2,500,856 | $ | 2,463,637 | $ | 2,446,901 | $ | 2,041,255 | $ | 2,007,605 | ||||||||||
Less goodwill | 999,925 | 1,001,038 | 993,799 | 725,039 | 725,068 | |||||||||||||||
Less other intangible assets, net of tax benefit | 39,565 | 40,923 | 42,507 | 27,020 | 28,071 | |||||||||||||||
Tangible common equity | $ | 1,461,366 | $ | 1,421,676 | $ | 1,410,595 | $ | 1,289,196 | $ | 1,254,466 |
The following table presents a reconciliation of average tangible equity to average common stockholders’ equity (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Average common stockholders' equity - as reported | $ | 2,472,771 | $ | 2,441,809 | $ | 2,201,095 | $ | 2,014,822 | $ | 1,984,379 | ||||||||||
Less average goodwill | 1,001,005 | 994,053 | 835,894 | 725,011 | 725,070 | |||||||||||||||
Less average other intangible assets, net of tax benefit | 40,052 | 41,471 | 32,744 | 27,437 | 28,511 | |||||||||||||||
Average tangible common equity | $ | 1,431,714 | $ | 1,406,285 | $ | 1,332,457 | $ | 1,262,374 | $ | 1,230,798 |
The following table presents a reconciliation of net cash flow available to common stockholders to net income available to common stockholders (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Net income available to common stockholders - as reported | $ | 52,534 | $ | 45,186 | $ | 42,415 | $ | 41,412 | $ | 37,114 | ||||||||||
Plus other intangible amortization expense, net of tax benefit | 1,359 | 1,552 | 1,088 | 1,051 | 1,057 | |||||||||||||||
Net cash flow available to common stockholders | $ | 53,893 | $ | 46,738 | $ | 43,503 | $ | 42,463 | $ | 38,171 |
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The following table presents a reconciliation of net income to operating earnings (in thousands):
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Net income - as reported | $ | 54,537 | $ | 47,191 | $ | 44,419 | $ | 43,412 | $ | 39,114 | ||||||||||
Less non-core items: | ||||||||||||||||||||
Net gain on investment securities | 231 | 178 | — | 269 | — | |||||||||||||||
Net (loss) gain on disposal of other assets | (123 | ) | (749 | ) | 5 | (2 | ) | (48 | ) | |||||||||||
Increase in market value of assets held in trust for deferred compensation - other operating income | 961 | 141 | 711 | 480 | 8 | |||||||||||||||
Merger related and repositioning expenses | (258 | ) | (6,491 | ) | (11,368 | ) | (2,566 | ) | (3,287 | ) | ||||||||||
Branch exit and facilities impairment charges | — | — | — | (155 | ) | — | ||||||||||||||
Contribution to MB Financial Charitable Foundation | — | — | (4,000 | ) | — | — | ||||||||||||||
Increase in market value of assets held in trust for deferred compensation - other operating expense | (961 | ) | (141 | ) | (711 | ) | (480 | ) | (8 | ) | ||||||||||
Total non-core items | (150 | ) | (7,062 | ) | (15,363 | ) | (2,454 | ) | (3,335 | ) | ||||||||||
Income tax expense on non-core items (1) | (1,508 | ) | (2,406 | ) | (6,074 | ) | (1,003 | ) | (577 | ) | ||||||||||
Income tax benefit resulting from early adoption of new stock-based compensation guidance | — | — | (1,793 | ) | — | — | ||||||||||||||
Non-core items, net of tax | 1,358 | (4,656 | ) | (7,496 | ) | (1,451 | ) | (2,758 | ) | |||||||||||
Operating earnings | 53,179 | 51,847 | 51,915 | 44,863 | 41,872 | |||||||||||||||
Dividends on preferred shares | 2,003 | 2,005 | 2,004 | 2,000 | 2,000 | |||||||||||||||
Operating earnings available to common stockholders | $ | 51,176 | $ | 49,842 | $ | 49,911 | $ | 42,863 | $ | 39,872 | ||||||||||
Diluted operating earnings per common share | $ | 0.60 | $ | 0.59 | $ | 0.63 | $ | 0.58 | $ | 0.54 | ||||||||||
Weighted average common shares outstanding for diluted operating earnings per common share | 84,778,130 | 84,674,181 | 78,683,170 | 74,180,374 | 73,966,935 |
(1) | The first quarter of 2017 includes a reversal of a tax liability no longer needed related to one of our acquired entities. |
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Efficiency Ratio Calculation (Dollars in Thousands)
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Non-interest expense | $ | 155,665 | $ | 165,760 | $ | 170,385 | $ | 147,906 | $ | 135,800 | ||||||||||
Less merger related and repositioning expenses | 258 | 6,491 | 11,368 | 2,566 | 3,287 | |||||||||||||||
Less branch exit and facilities impairment charges | — | — | — | 155 | — | |||||||||||||||
Less contribution to MB Financial Charitable Foundation | — | — | 4,000 | — | — | |||||||||||||||
Less increase in market value of assets held in trust for deferred compensation | 961 | 141 | 711 | 480 | 8 | |||||||||||||||
Non-interest expense - as adjusted | $ | 154,446 | $ | 159,128 | $ | 154,306 | $ | 144,705 | $ | 132,505 | ||||||||||
Net interest income | $ | 143,043 | $ | 145,214 | $ | 130,771 | $ | 122,602 | $ | 119,304 | ||||||||||
Tax equivalent adjustment | 6,921 | 7,090 | 7,122 | 7,208 | 7,195 | |||||||||||||||
Net interest income on a fully tax equivalent basis | 149,964 | 152,304 | 137,893 | 129,810 | 126,499 | |||||||||||||||
Plus non-interest income | 91,773 | 92,823 | 108,387 | 92,000 | 81,693 | |||||||||||||||
Plus tax equivalent adjustment on the increase in cash surrender value of life insurance | 694 | 709 | 568 | 458 | 460 | |||||||||||||||
Less net gain on investment securities | 231 | 178 | — | 269 | — | |||||||||||||||
Less net (loss) gain on disposal of other assets | (123 | ) | (749 | ) | 5 | (2 | ) | (48 | ) | |||||||||||
Less increase in market value of assets held in trust for deferred compensation | 961 | 141 | 711 | 480 | 8 | |||||||||||||||
Non-interest income - as adjusted | 91,398 | 93,962 | 108,239 | 91,711 | 82,193 | |||||||||||||||
Total revenue - as adjusted and on a fully tax equivalent basis | $ | 241,362 | $ | 246,266 | $ | 246,132 | $ | 221,521 | $ | 208,692 | ||||||||||
Efficiency ratio | 63.99 | % | 64.62 | % | 62.69 | % | 65.32 | % | 63.49 | % | ||||||||||
Efficiency ratio (without adjustments) | 66.29 | % | 69.64 | % | 71.24 | % | 68.92 | % | 67.56 | % |
Annualized Net Non-interest Expense to Average Assets Calculation (Dollars in Thousands)
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Non-interest expense - as adjusted | $ | 154,446 | $ | 159,128 | $ | 154,306 | $ | 144,705 | $ | 132,505 | ||||||||||
Less non-interest income - as adjusted | 91,398 | 93,962 | 108,239 | 91,711 | 82,193 | |||||||||||||||
Net non-interest expense - as adjusted | $ | 63,048 | $ | 65,166 | $ | 46,067 | $ | 52,994 | $ | 50,312 | ||||||||||
Average assets | $ | 19,002,982 | $ | 19,192,747 | $ | 17,248,431 | $ | 15,740,658 | $ | 15,487,565 | ||||||||||
Annualized net non-interest expense to average assets | 1.35 | % | 1.35 | % | 1.06 | % | 1.35 | % | 1.31 | % | ||||||||||
Annualized net non-interest expense to average assets (without adjustments) | 1.36 | % | 1.51 | % | 1.43 | % | 1.43 | % | 1.41 | % |
Core Non-interest Income to Revenues Ratio Calculation (Dollars in Thousands)
1Q17 | 4Q16 | 3Q16 | 2Q16 | 1Q16 | ||||||||||||||||
Non-interest income - as adjusted | $ | 91,398 | $ | 93,962 | $ | 108,239 | $ | 91,711 | $ | 82,193 | ||||||||||
Total revenue - as adjusted and on a fully tax equivalent basis | $ | 241,362 | $ | 246,266 | $ | 246,132 | $ | 221,521 | $ | 208,692 | ||||||||||
Core non-interest income to revenues ratio | 37.87 | % | 38.15 | % | 43.98 | % | 41.40 | % | 39.38 | % | ||||||||||
Non-interest income to revenues ratio (without adjustments) | 39.08 | % | 39.00 | % | 45.32 | % | 42.87 | % | 40.64 | % |
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