EXHIBIT 99.1
Luther Burbank Corporation Reports 2018 First Quarter Earnings Per Common Share of $0.20
Quarterly Cash Dividend of $0.0575 Per Common Share Declared
SANTA ROSA, Calif., April 26, 2018 (GLOBE NEWSWIRE) -- Luther Burbank Corporation (NASDAQ:LBC) (the “Company”), the holding company for Luther Burbank Savings (the “Bank”), today reported net income available to common shareholders of $11.1 million, or $0.20 diluted earnings per common share (“EPS”), for the quarter ended March 31, 2018, compared to net income available to common shareholders of $12.3 million, or $0.29 EPS, for the quarter ended March 31, 2017. Pre-tax, pre-provision earnings and pro-forma EPS for the quarter ended March 31, 2018 were $16.8 million and $0.20, respectively, compared to $13.0 million and $0.18, respectively, for the same period last year.
Pre-tax, pre-provision earnings and pro-forma EPS, both non-GAAP financial measures, are presented because management believes these financial metrics provide stockholders with useful information for evaluating the profitability of the Company. In addition, management believes it enhances the comparability of the Company’s financial results by eliminating the tax differences associated with the Company’s change in tax status from an S-corporation to a C-corporation. The Company revoked its S-corporation status in December 2017. A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings and pro-forma EPS are provided in the tables below.
John G. Biggs, President and Chief Executive Officer, stated, “We are extremely pleased with our results in the first quarter after a successful initial public offering in December 2017. For the first time in our history, we’ve exceeded $6 billion in total assets fueled by strong growth in our loan and deposit portfolios. In addition to our 6% growth in assets since year-end 2017, net interest income increased by over 13% compared to the same period last year and our efficiency ratio improved to 47%, which is one of the best efficiency ratios amongst our industry peers.”
Mr. Biggs continued, “Looking forward, I’m excited for the opening of our new branch in Bellevue, WA in mid-2018, as well as the recent announcement regarding the expansion of our construction lending operations. These initiatives will further support our growth and financial objectives and will continue our expansion into key strategic markets.”
Board Declares Quarterly Cash Dividend of $0.0575 Per Share
On April 26, 2018, the Board of Directors of the Company declared a quarterly cash dividend of $0.0575 per common share. The dividend is payable on May 17, 2018 to shareholders of record as of May 7, 2018.
First Quarter Earnings Summary
Net interest income for the quarter ended March 31, 2018 totaled $30.5 million compared to $27.6 million for the previous quarter and $26.9 million for the same period last year. The increase in net interest income was primarily related to growth in the average balance of our loans outstanding compared to the previous quarter and the same period last year. Net interest margin for the quarter ended March 31, 2018 was 2.11%, compared to 2.05% for the previous quarter and 2.10% for the 2017 first quarter.
Noninterest Income
Noninterest income for the quarter ended March 31, 2018 totaled $1.0 million, compared to $1.5 million for the previous quarter and $882 thousand for the 2017 first quarter. The reduction of $469 thousand in noninterest income, or 31.4%, for the quarter ended March 31, 2018 compared to the linked quarter ended December 31, 2017, was attributable to a decrease of $341 thousand in other fee income related to mortgage servicing rights amortization. The increase of $143 thousand in noninterest income, or 16.2%, for the quarter ended March 31, 2018 compared to the quarter ended March 31, 2017, was primarily attributable to fair value losses incurred in connection with the discontinuation of our retail mortgage operations during the first quarter of 2017.
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2018 totaled $14.7 million compared to $13.2 million for the previous quarter and $14.7 million for the 2017 first quarter. The increase of $1.5 million, or 11.3%, for the quarter ended March 31, 2018 compared to the linked quarter ended December 31, 2017, was primarily attributable to an increase of $1.5 million in compensation and related benefits.
Balance Sheet Summary
Total assets at March 31, 2018 were $6.0 billion, an increase of $329.5 million from December 31, 2017. The increase was primarily due to a $284.9 million increase in loans and a $35.2 million increase in available for sale investment securities.
Loans
The multifamily residential (“MFR”) mortgage loan portfolio totaled $3.1 billion at March 31, 2018 compared to $2.9 billion at December 31, 2017 and represents 58.1% of the total loan portfolio. The yield on the MFR portfolio was 3.72% during the three months ended March 31, 2018, compared to 3.65% during the previous quarter and 3.45% during the same period last year. For the quarter ended March 31, 2018, MFR loan originations and the corresponding weighted average coupon totaled $241.8 million and 4.29%, respectively, compared to $410.2 million and 3.87%, respectively, for the same period last year. MFR loan originations were higher during the same period last year due to anticipated loan sales during 2017. Prepayment speeds within the MFR loan portfolio were 4.6% and 15.7% during the quarters ended March 31, 2018 and 2017, respectively.
The single family residential mortgage loan portfolio totaled $2.1 billion at March 31, 2018 and December 31, 2017 and represents 38.9% of the total loan portfolio. The yield on the SFR portfolio was 3.35% during the three months ended March 31, 2018, compared to 3.29% during the previous quarter and 3.22% during the same period last year. For the quarter ended March 31, 2018, residential loan originations and the corresponding weighted average coupon totaled $215.2 million and 4.29%, respectively, compared to $123.9 million and 3.96%, respectively, for the same period last year. The fluctuation in SFR originations was primarily attributable to an increase in customer demand experienced during the current quarter compared to the same period last year. Prepayment speeds within the SFR loan portfolio were 21.3% and 24.3% during the quarters ended March 31, 2018 and 2017, respectively.
Deposits
Deposits totaled $4.1 billion at March 31, 2018, an increase of $162.8 million from December 31, 2017. Retail deposits represented 89% of the growth, or $145.3 million, while wholesale deposits represented 11%, or $17.4 million. Our cost of deposits was 1.19% during the quarter ended March 31, 2018 compared to 1.15% during the prior quarter and 0.96% during the same period last year. The change in our cost of deposits was primarily related to increases in our time deposit portfolio, which rate increased to 1.44% during the current period due to competitive pressures.
Capital
Stockholders’ equity totaled $553.8 million, or 9.2% of total assets at March 31, 2018, an increase of $4.0 million from December 31, 2017, or an increase of 0.7%. Both the Bank’s and the Company’s capital levels continue to be significantly above the minimum levels required to be designated as “well-capitalized” for bank regulatory purposes. At March 31, 2018, Tier 1 leverage, Common Equity Tier 1 risk based, Tier 1 risk-based and Total risk-based capital ratios were 11.90%, 19.44%, 19.44% and 20.39%, respectively for the Bank, and 10.57%, 15.55%, 17.27% and 18.22%, respectively for the Company. At March 31, 2018, the Company’s tangible stockholders' equity ratio was 9.13%.
Asset Quality
Non-performing loans, totaled $7.0 million, or 0.13% of total loans, at March 31, 2018, compared to $7.0 million, or 0.14% of total loans, at December 31, 2017. There was not any real estate owned at March 31, 2018 or December 31, 2017. For the quarter ended March 31, 2018, a $1.5 million loan loss provision was recorded compared to a $1.3 million provision in the prior quarter and a $309 thousand provision recorded in the first quarter of 2017.
About Luther Burbank Corporation
Luther Burbank Corporation is a publicly owned company traded on the NASDAQ Capital Market under the symbol “LBC.” The Company is headquartered in Santa Rosa, California with total assets of $6.0 billion, total loans of $5.3 billion and total deposits of $4.1 billion as of March 31, 2018. It operates primarily through its wholly-owned subsidiary, Luther Burbank Savings, an FDIC insured, California-chartered bank. Luther Burbank Savings executes on its mission to improve the financial future of customers, employees and shareholders by providing personal banking and business banking services. It offers consumers a host of highly competitive depository and mortgage products coupled with personalized attention. Business customers benefit from boutique-quality service along with access to products which meet their unique financial needs from the convenience of online and mobile banking, robust cash management solutions, and high-yield liquidity management products to multifamily and commercial lending. Currently operating in California, Oregon and Washington, from nine branches in California and nine lending offices located throughout the market area, Luther Burbank Savings is an equal housing lender. For additional information, please visit lutherburbanksavings.com.
Cautionary Statements Regarding Forward-Looking Information
This communication contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our results of operations, financial condition and financial performance. All statements contained in this communication that are not clearly historical in nature are forward-looking, and the words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," “impact,” "intend," "seek," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases are generally intended to identify forward-looking statements. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Such factors include, without limitation, the “Risk Factors” referenced in our Registration Statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”). The risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic market areas; economic, market, operational, liquidity, credit and interest rate risks associated with our business; the occurrence of significant natural or man-made disasters, including fires, earthquakes, and terrorist acts; our management of risks inherent in our real estate loan portfolio, and the risk of a prolonged downturn in the real estate market; our ability to achieve organic loan and deposit growth and the composition of such growth; the fiscal position of the U.S federal government and the soundness of other financial institutions; changes in consumer spending and savings habits; technological and social media changes; the laws and regulations applicable to our business; increased competition in the financial services industry; changes in the level of our nonperforming assets and charge-offs; our involvement from time to time in legal proceedings and examination and remedial actions by regulators; the composition of our management team and our ability to attract and retain key personnel; material weaknesses in our internal control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems; and potential exposure to fraud, negligence, computer theft and cyber-crime. The Company can give no assurance that any goal or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including “pre-tax, pre-provision net earnings,” “efficiency ratio,” “return on average tangible equity,” “proforma net income,” “proforma ratios,” "net tangible book value per share," “tangible assets,” “tangible stockholders’ equity” and “tangible stockholders’ equity to tangible assets,” are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.
These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.
| | | | | | |
| CONSOLIDATED BALANCE SHEETS | | | | | |
| (Dollars in thousands) | | | | | |
| | March 31,
2018 (unaudited) | | March 31,
2017 (unaudited) | | December 31,
2017 |
| ASSETS | | | | | |
| Cash and cash equivalents | $ | 74,421 | | | $ | 75,719 | | | $ | 75,578 | |
| Available for sale investment securities, at fair value | 538,440 | | | 466,564 | | | 503,288 | |
| Held to maturity investment securities, at amortized cost | 12,237 | | | 7,267 | | | 6,921 | |
| Loans held-for-sale | — | | | 47,844 | | | — | |
| Loans held-for-investment | 5,326,409 | | | 4,729,359 | | | 5,041,547 | |
| Allowance for loan losses | (31,980 | ) | | (33,699 | ) | | (30,312 | ) |
| Accrued interest receivable | 16,137 | | | 13,174 | | | 14,901 | |
| Federal Home Loan Bank stock | 33,023 | | | 32,910 | | | 27,733 | |
| Premises and equipment, net | 21,862 | | | 23,785 | | | 22,452 | |
| Goodwill | 3,297 | | | 3,297 | | | 3,297 | |
| Prepaid expenses and other assets | 40,042 | | | 25,320 | | | 38,975 | |
| | | | | | |
| Total assets | $ | 6,033,888 | | | $ | 5,391,540 | | | $ | 5,704,380 | |
| | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | |
| Liabilities: | | | | | |
| Deposits | $ | 4,114,026 | | | $ | 3,620,642 | | | $ | 3,951,238 | |
| Federal Home Loan Bank advances | 1,158,153 | | | 1,157,480 | | | 989,260 | |
| Junior subordinated deferrable interest debentures | 61,857 | | | 61,857 | | | 61,857 | |
| Senior debt | 94,195 | | | 94,061 | | | 94,161 | |
| Accrued interest payable | 2,329 | | | 1,398 | | | 1,781 | |
| Other liabilities and accrued expenses | 49,577 | | | 48,595 | | | 56,338 | |
| | | | | | |
| Total liabilities | 5,480,137 | | | 4,984,033 | | | 5,154,635 | |
| | | | | | |
| Stockholders' equity: | | | | | |
| Common stock, no par value; 100,000,000 shares authorized; 56,561,055 and 56,422,662 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 455,251 | | | 2,262 | | | 454,287 | |
| Retained earnings | 105,750 | | | 410,143 | | | 102,459 | |
| Accumulated other comprehensive loss, net of taxes | (7,250 | ) | | (4,898 | ) | | (7,001 | ) |
| | | | | | |
| Total stockholders' equity | 553,751 | | | 407,507 | | | 549,745 | |
| | | | | | |
| Total liabilities and stockholders' equity | $ | 6,033,888 | | | $ | 5,391,540 | | | $ | 5,704,380 | |
| | | | | | |
| CONSOLIDATED INCOME STATEMENTS (UNAUDITED) | | | | |
| (Dollars in thousands except per share data) | | | | |
| | For the Three Months Ended |
| | March 31,
2018 | | March 31,
2017 | | December 31,
2017 |
| Interest income: | | | | | |
| Interest and fees on loans | $ | 46,563 | | | $ | 38,743 | | | $ | 42,477 | |
| Interest and dividends on investment securities | 2,718 | | | 1,653 | | | 2,146 | |
| Total interest income | 49,281 | | | 40,396 | | | 44,623 | |
| Interest expense: | | | | | |
| Interest on deposits | 11,932 | | | 8,314 | | | 11,285 | |
| Interest on FHLB advances | 4,820 | | | 3,275 | | | 3,760 | |
| Interest on junior subordinated deferrable interest debentures | 487 | | | 380 | | | 447 | |
| Interest on senior debt | 1,577 | | | 1,577 | | | 1,577 | |
| Total interest expense | 18,816 | | | 13,546 | | | 17,069 | |
| Net interest income before provision for loan losses | 30,465 | | | 26,850 | | | 27,554 | |
| Provision for loan losses | 1,500 | | | 309 | | | 1,250 | |
| Net interest income after provision for loan losses | 28,965 | | | 26,541 | | | 26,304 | |
| Noninterest income: | | | | | |
| Increase in cash surrender value of life insurance | 53 | | | 49 | | | 48 | |
| Net loss on sale of loans | — | | | (163 | ) | | — | |
| FHLB dividends | 594 | | | 633 | | | 696 | |
| Other income | 378 | | | 363 | | | 750 | |
| Total noninterest income | 1,025 | | | 882 | | | 1,494 | |
| Noninterest expense: | | | | | |
| Compensation and related benefits | 9,619 | | | 10,197 | | | 8,140 | |
| Deposit insurance premium | 432 | | | 398 | | | 404 | |
| Professional and regulatory fees | 398 | | | 185 | | | 582 | |
| Occupancy | 1,296 | | | 1,298 | | | 1,295 | |
| Depreciation and amortization | 714 | | | 735 | | | 724 | |
| Data processing | 788 | | | 790 | | | 789 | |
| Marketing | 213 | | | 179 | | | 298 | |
| Other expenses | 1,253 | | | 921 | | | 989 | |
| Total noninterest expense | 14,713 | | | 14,703 | | | 13,221 | |
| Income before provision for income taxes | 15,277 | | | 12,720 | | | 14,577 | |
| Provision for income taxes | 4,175 | | | 425 | | | (5,844 | ) |
| Net income | $ | 11,102 | | | $ | 12,295 | | | $ | 20,421 | |
| Basic earnings per common share | $ | 0.20 | | | $ | 0.29 | | | $ | 0.45 | |
| Diluted earnings per common share | $ | 0.20 | | | $ | 0.29 | | | $ | 0.45 | |
| Weighted average common shares outstanding - basic | 56,190,970 | | | 42,000,000 | | | 45,667,516 | |
| Weighted average common shares outstanding - diluted | 56,755,154 | | | 42,000,000 | | | 45,831,743 | |
| | | | | | | | | |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED) | | | | |
| (Dollars in thousands except per share data) | | | | |
| | As of or For the Three Months Ended |
| | March 31,
2018 | | March 31,
2017 | | December 31,
2017 |
| PERFORMANCE RATIOS | | | | | |
| Return on average: | | | | | |
| Assets | 0.76 | % | | 0.95 | % | | 1.50 | % |
| Stockholders' equity | 7.98 | % | | 12.01 | % | | 17.97 | % |
| Tangible stockholders' equity | 8.03 | % | | 12.11 | % | | 18.10 | % |
| Efficiency ratio | 46.72 | % | | 53.02 | % | | 45.51 | % |
| Noninterest expense to average assets | 1.01 | % | | 1.14 | % | | 0.97 | % |
| Loans to deposit ratio | 129.47 | % | | 131.94 | % | | 127.59 | % |
| Average stockholders' equity to average assets | 9.52 | % | | 7.92 | % | | 8.32 | % |
| Dividend payout ratio | 54.59 | % | | 79.71 | % | | 230.64 | % |
| PRO FORMA (1) | | | | | | | | | | | |
| Pro forma net income | $ | 11,102 | | | $ | 7,378 | | | $ | 8,455 | |
| Pro forma diluted earnings per share | $ | 0.20 | | | $ | 0.18 | | | $ | 0.18 | |
| Pro forma return on average: | | | | | | | | | | | |
| Assets | 0.76 | % | | 0.57 | % | | 0.62 | % |
| Stockholders' equity | 7.98 | % | | 7.21 | % | | 7.44 | % |
| Tangible stockholders' equity | 8.03 | % | | 7.27 | % | | 7.49 | % |
| YIELDS/ RATES | | | | | | | | | | | |
| Yield on loans | 3.61 | % | | 3.38 | % | | 3.53 | % |
| Yield on investments | 1.85 | % | | 1.32 | % | | 1.57 | % |
| Yield on interest earning assets | 3.42 | % | | 3.16 | % | | 3.31 | % |
| Cost of deposits | 1.19 | % | | 0.96 | % | | 1.15 | % |
| Cost of borrowings | 2.25 | % | | 1.69 | % | | 2.25 | % |
| Cost of interest bearing liabilities | 1.44 | % | | 1.15 | % | | 1.38 | % |
| Net interest spread | 1.98 | % | | 2.01 | % | | 1.93 | % |
| Net interest margin | 2.11 | % | | 2.10 | % | | 2.05 | % |
| CAPITAL | | | | | | | | | | | |
| Total equity to total assets | 9.18 | % | | 7.56 | % | | 9.64 | % |
| Tangible stockholders' equity to tangible assets | 9.13 | % | | 7.50 | % | | 9.58 | % |
| Book value per share | $ | 9.79 | | | $ | 9.70 | | | $ | 9.74 | |
| Tangible book value per share | $ | 9.73 | | | $ | 9.62 | | | $ | 9.68 | |
| Market value per share (period end) | $ | 12.01 | | | N/A | | | $ | 12.04 | |
| AVERAGE BALANCES | | | | | | | | | | | |
| Loans and loans held for sale | $ | 5,165,366 | | | $ | 4,578,372 | | | $ | 4,818,654 | |
| Earning assets | $ | 5,770,070 | | | $ | 5,111,903 | | | $ | 5,386,380 | |
| Total assets | $ | 5,848,751 | | | $ | 5,172,186 | | | $ | 5,461,226 | |
| Deposits | $ | 4,007,106 | | | $ | 3,467,449 | | | $ | 3,914,149 | |
| Total equity | $ | 556,661 | | | $ | 409,451 | | | $ | 454,635 | |
| Tangible equity | $ | 553,364 | | | $ | 406,154 | | | $ | 451,338 | |
| | | | | | |
| (1) See "Non-GAAP Reconciliation" table for reconciliation of Pro Forma Net Income and Ratios |
| | | | | | |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED) | | | | | |
| (Dollars in thousands) | | | | | |
| | As of or For the Three Months Ended |
| | March 31,
2018 | | March 31,
2017 | | December 31,
2017 |
| ASSET QUALITY | | | | | |
| Net recoveries | $ | 168 | | | $ | 92 | | | $ | 78 | |
| Nonperforming loans | $ | 6,961 | | | $ | 4,315 | | | $ | 7,037 | |
| Nonperforming assets | $ | 6,961 | | | $ | 4,315 | | | $ | 7,037 | |
| Allowance for loan losses | $ | 31,980 | | | $ | 33,699 | | | $ | 30,312 | |
| Annualized net recoveries to average loans | 0.01 | % | | 0.01 | % | | 0.01 | % |
| Nonperforming loans to total loans | 0.13 | % | | 0.09 | % | | 0.14 | % |
| Nonperforming assets to total assets | 0.12 | % | | 0.08 | % | | 0.12 | % |
| Allowance for loan losses to loans held-for-investment | 0.60 | % | | 0.71 | % | | 0.60 | % |
| Allowance for loan losses to nonperforming loans | 459.42 | % | | 780.97 | % | | 430.75 | % |
| LOAN COMPOSITION | | | | | |
| Multifamily residential | $ | 3,094,033 | | | $ | 2,908,147 | | | $ | 2,903,947 | |
| Single family residential | $ | 2,069,950 | | | $ | 1,756,633 | | | $ | 1,983,384 | |
| Commercial real estate | $ | 125,756 | | | $ | 69,843 | | | $ | 112,711 | |
| Construction and land | $ | 36,570 | | | $ | 42,530 | | | $ | 41,455 | |
| Non-mortgage | $ | 100 | | | $ | 50 | | | $ | 50 | |
| DEPOSIT COMPOSITION | | | | | |
| Non-interest bearing transaction accounts | $ | 28,843 | | | $ | 14,490 | | | $ | 30,899 | |
| Interest bearing transaction accounts | $ | 196,767 | | | $ | 197,729 | | | $ | 203,159 | |
| Money market deposit accounts | $ | 1,489,718 | | | $ | 1,571,721 | | | $ | 1,474,498 | |
| Time deposits | $ | 2,398,698 | | | $ | 1,836,702 | | | $ | 2,242,682 | |
| | | | | | | | | | | | |
| AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED) |
| (Dollars in thousands) | | | | | | | | | | | | |
| | | For the Three Months Ended March 31, |
| | | 2018 | | 2017 |
| | | Average Balance | | Interest Inc / Exp | | Average Yield/Rate | | Average Balance | | Interest Inc / Exp | | Average Yield/Rate |
| Interest-Earning Assets | | | | | | | | | | | | |
| Multifamily residential | | $ | 3,000,059 | | | $ | 27,930 | | | 3.72 | % | | $ | 2,724,910 | | | $ | 23,490 | | | 3.45 | % |
| Single family residential | | 2,009,329 | | | 16,806 | | | 3.35 | % | | 1,755,119 | | | 14,118 | | | 3.22 | % |
| Commercial | | 117,559 | | | 1,463 | | | 4.98 | % | | 60,953 | | | 784 | | | 5.14 | % |
| Construction, land and NM | | 38,419 | | | 364 | | | 3.79 | % | | 37,390 | | | 351 | | | 3.76 | % |
| Total Loans (1) | | 5,165,366 | | | 46,563 | | | 3.61 | % | | 4,578,372 | | | 38,743 | | | 3.38 | % |
| Securities available-for-sale | | 524,119 | | | 2,383 | | | 1.82 | % | | 455,096 | | | 1,465 | | | 1.29 | % |
| Securities held-to-maturity (2) | | 10,544 | | | 89 | | | 3.38 | % | | 7,452 | | | 59 | | | 3.17 | % |
| Cash and cash equivalents | | 70,041 | | | 246 | | | 1.40 | % | | 70,983 | | | 129 | | | 0.73 | % |
| Total interest-earning assets | | 5,770,070 | | | 49,281 | | | 3.42 | % | | 5,111,903 | | | 40,396 | | | 3.16 | % |
| Noninterest-earning assets (3) | | 78,681 | | | | | | | | 60,283 | | | | | | |
| Total assets | | $ | 5,848,751 | | | | | | | | $ | 5,172,186 | | | | | | |
| | | | | | | | | | | | | | | |
| Interest-Bearing Liabilities | | | | | | | | | | | | | | |
| Transaction accounts (4) | | $ | 224,674 | | | $ | 407 | | | 0.72 | % | | $ | 205,712 | | | $ | 350 | | | 0.68 | % |
| Money market demand accounts | | 1,507,614 | | | 3,314 | | | 0.88 | % | | 1,545,433 | | | 2,919 | | | 0.76 | % |
| Time deposits | | 2,274,818 | | | 8,211 | | | 1.44 | % | | 1,716,304 | | | 5,045 | | | 1.18 | % |
| Total deposits | | 4,007,106 | | | 11,932 | | | 1.19 | % | | 3,467,449 | | | 8,314 | | | 0.96 | % |
| FHLB advances | | 1,070,087 | | | 4,820 | | | 1.80 | % | | 1,084,904 | | | 3,275 | | | 1.21 | % |
| Senior debt | | 94,173 | | | 1,577 | | | 6.70 | % | | 94,037 | | | 1,577 | | | 6.71 | % |
| Junior subordinated debentures | | 61,857 | | | 487 | | | 3.15 | % | | 61,857 | | | 380 | | | 2.46 | % |
| Total interest-bearing liabilities | | 5,233,223 | | | 18,816 | | | 1.44 | % | | 4,708,247 | | | 13,546 | | | 1.15 | % |
| Noninterest-bearing liabilities | | 58,867 | | | | | | | | 54,488 | | | | | | |
| Total stockholders' equity | | 556,661 | | | | | | | | 409,451 | | | | | | |
| Total liabilities and stockholders' equity | | $ | 5,848,751 | | | | | | | | $ | 5,172,186 | | | | | | |
| | | | | | | | | | | | | | | |
| Net interest spread (5) | | | | | | 1.98 | % | | | | | | 2.01 | % |
| Net interest income/margin (6) | | | | $ | 30,465 | | | 2.11 | % | | | | $ | 26,850 | | | 2.10 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
(1) Loan balance includes portfolio real estate loans, real estate loans held for sale and $100 thousand or less in non-mortgage loans. Non-accrual loans are included in total loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. Net deferred loan cost amortization totals $2.3 million and $2.2 million for the three months ended March 31, 2018 and 2017, respectively.
(2) Securities held to maturity include obligations of states and political subdivisions of $281 thousand and $298 thousand as of March 31, 2018 and 2017, respectively. Yields are not calculated on a tax equivalent basis.
(3) Noninterest earning assets includes the allowance for loan losses.
(4) Transaction accounts include both interest and non-interest bearing deposits.
(5) Net interest spread is the average yield on total interest-earning assets minus the average rate on total interest-bearing liabilities.
(6) Net interest margin is net interest income divided by total interest-earning assets.
| | | | | | |
| NON-GAAP RECONCILIATION (UNAUDITED) | | | | | |
| (Dollars in thousands except per share data) | | | | |
| | For the Three Months Ended |
| | March 31,
2018 | | March 31,
2017 | | December 31,
2017 |
| Pre-tax, pre-provision net earnings | | | | | |
| Income before taxes | $ | 15,277 | | | $ | 12,720 | | | $ | 14,577 | |
| Plus: Provision for loan losses | 1,500 | | | 309 | | | 1,250 | |
| Pre-tax, pre-provision net earnings | $ | 16,777 | | | $ | 13,029 | | | $ | 15,827 | |
| Efficiency Ratio | | | | | |
| Noninterest expense (numerator) | $ | 14,713 | | | $ | 14,703 | | | $ | 13,221 | |
| | | | | | |
| Net interest income | 30,465 | | | 26,850 | | | 27,554 | |
| Noninterest income | 1,025 | | | 882 | | | 1,494 | |
| Operating revenue (denominator) | $ | 31,490 | | | $ | 27,732 | | | $ | 29,048 | |
| Efficiency ratio | 46.72 | % | | 53.02 | % | | 45.51 | % |
| Return on Average Tangible Equity | | | | | |
| Annualized net income (numerator) | $ | 44,408 | | | $ | 49,180 | | | $ | 81,684 | |
| | | | | | |
| Average stockholders' equity | $ | 556,661 | | | $ | 409,451 | | | $ | 454,635 | |
| Less: Average goodwill | (3,297 | ) | | (3,297 | ) | | (3,297 | ) |
| Average tangible stockholders' equity (denominator) | $ | 553,364 | | | $ | 406,154 | | | $ | 451,338 | |
| Return on Average Tangible Equity | 8.03 | % | | 12.11 | % | | 18.10 | % |
| Pro Forma Net Income | | | | | |
| Income before provision for income taxes | $ | 15,277 | | | $ | 12,720 | | | $ | 14,577 | |
| Pro forma provision for income taxes (1) | 4,175 | | | 5,342 | | | 6,122 | |
| Pro forma net income | $ | 11,102 | | | $ | 7,378 | | | $ | 8,455 | |
| Pro Forma Ratios | | | | | |
| Pro forma net income (numerator) | $ | 11,102 | | | $ | 7,378 | | | $ | 8,455 | |
| Weighted average common shares outstanding - diluted (denominator) | 56,755,154 | | | 42,000,000 | | | 45,831,743 | |
| Pro forma diluted earnings per share | $ | 0.20 | | | $ | 0.18 | | | $ | 0.18 | |
| | | | | | |
| Annualized pro forma net income (numerator) | $ | 44,408 | | | $ | 29,510 | | | $ | 33,819 | |
| | | | | | |
| Average assets (denominator) | $ | 5,848,751 | | | $ | 5,172,186 | | | $ | 5,461,226 | |
| Pro forma return on average assets | 0.76 | % | | 0.57 | % | | 0.62 | % |
| | | | | | |
| Average stockholders' equity (denominator) | $ | 556,661 | | | $ | 409,451 | | | $ | 454,635 | |
| Pro forma return on average stockholders' equity | 7.98 | % | | 7.21 | % | | 7.44 | % |
| | | | | | |
| Average tangible stockholders' equity (denominator) | $ | 553,364 | | | $ | 406,154 | | | $ | 451,338 | |
| Pro forma return on average stockholders' equity | 8.03 | % | | 7.27 | % | | 7.49 | % |
| | | | | | |
| (1) Prior to January 1, 2018, we calculate our pro forma net income, earnings per share, return on average assets, return on average equity and return on average tangible equity by adding back our franchise S Corporation tax to net income, and using a combined C Corporation effective tax rate for Federal and California income taxes of 42.0%. This calculation reflects only the change in our status as an S Corporation and does not give effect to any other transaction. For the three months ended March 31, 2018, our actual provision for income taxes is used for comparative purposes. |
| | | | | | |
| NON-GAAP RECONCILIATION | | | | | |
| (Dollars in thousands except per share data) | | | | |
| | As of March 31,
2018 (unaudited) | | As of March 31,
2017 (unaudited) | | As of December 31,
2017 |
| Net Tangible Book Value Per Share | | | | | |
| Total Assets | $ | 6,033,888 | | | $ | 5,391,540 | | | $ | 5,704,380 | |
| Less: Goodwill | (3,297 | ) | | (3,297 | ) | | (3,297 | ) |
| Less: Total Liabilities | (5,480,137 | ) | | (4,984,033 | ) | | (5,154,635 | ) |
| Net Tangible Book Value | $ | 550,454 | | | $ | 404,210 | | | $ | 546,448 | |
| Period end shares outstanding | 56,561,055 | | | 42,000,000 | | | 56,422,662 | |
| Net Tangible Book Value Per Share | $ | 9.73 | | | $ | 9.62 | | | $ | 9.68 | |
| Tangible Assets | | | | | |
| Total Assets | $ | 6,033,888 | | | $ | 5,391,540 | | | $ | 5,704,380 | |
| Less: Goodwill | (3,297 | ) | | (3,297 | ) | | (3,297 | ) |
| Tangible Assets | $ | 6,030,591 | | | $ | 5,388,243 | | | $ | 5,701,083 | |
| Tangible Stockholders' Equity | | | | | |
| Total Stockholders' Equity | $ | 553,751 | | | $ | 407,507 | | | $ | 549,745 | |
| Less: Goodwill | (3,297 | ) | | (3,297 | ) | | (3,297 | ) |
| Tangible Stockholders' Equity | $ | 550,454 | | | $ | 404,210 | | | $ | 546,448 | |
| Tangible Stockholders' Equity to Tangible Assets | | | | | |
| Tangible stockholders' equity (numerator) | $ | 550,454 | | | $ | 404,210 | | | $ | 546,448 | |
| Tangible assets (denominator) | 6,030,591 | | | 5,388,243 | | | 5,701,083 | |
| Tangible Stockholders' Equity to Tangible Assets | 9.13 | % | | 7.50 | % | | 9.58 | % |
| | |
| Contact: | Mark A. Severson |
| | Investor Relations |
| | 707-921-3655 |
| | investorrelations@lbsavings.com |
