Exhibit 99.1
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Cadence Bancorporation reports
SECOND QUARTER 2020 FINANCIAL RESULTS
HOUSTON (July 22, 2020) – Cadence Bancorporation (NYSE: CADE) (“Cadence”) today announced a net loss for the quarter ended June 30, 2020 of ($56.1) million or ($0.45) per share, compared to net income of $48.3 million or $0.37 per share for the quarter ended June 30, 2019, and a net loss of ($399.3) million or ($3.15) per share for the quarter ended March 31, 2020. Adjusted net (loss) income(1), excluding non-routine income and expenses(2) (and the goodwill impairment charge for first quarter 2020), was ($56.9) million or ($0.45) per share for the second quarter of 2020, compared to $51.3 million or $0.40 per share for the quarter ended June 30, 2019 and compared to $12.5 million or $0.10 per share for the quarter ended March 31, 2020.
“The challenge and uncertainty of the second quarter in many ways brought out the best in Cadence and I am proud of how our team operated and served our customers through it all. Our pre-provision results continue to showcase a key strength of our operations, highlighted by our increased net interest income and continued expense management. That noted, clearly the credit backdrop is very challenging, as our portfolio has been meaningfully impacted by the COVID-19 pandemic and related economic shutdown. This quarter, we again spent a great deal of time critically reviewing our portfolios to ensure we are fully reflecting the realities of the environment. While the trajectory of the pandemic and its impact on the economy remain uncertain, we are very confident that our risk management and robust capital position will allow Cadence to exit this crisis in a strong position,” stated Paul B. Murphy, Jr., Chairman and Chief Executive Officer of Cadence Bancorporation.
Second Quarter 2020 Highlights:
Second quarter 2020 highlights (compared to the linked quarter where applicable) are as follows:
| • | Adjusted pre-tax pre-provision net revenue(1) for the second quarter of 2020 remained consistent at $95.0 million, a decrease of $1.1 million or 1.2% compared to the second quarter of 2019 and an increase of $2.0 million or 2.1% compared to the first quarter of 2020. As a percent of average assets, adjusted pre-tax pre-prevision net revenue was 2.06%, 2.18%, and 2.11% for the second quarter of 2020, second quarter of 2019 and first quarter of 2020, respectively. |
| • | We originated $1.0 billion of loans under the Paycheck Protection Program (“PPP”) during the second quarter of 2020. These PPP loans are 100% federally guaranteed and were fully funded by core deposits. |
| • | Total deposits increased $1.6 billion as non-interest bearing deposits increased $1.3 billion to 32% of total deposits. At the same time, we aggressively managed funding costs, with total deposit costs at 0.46%, representing a decline of 50 basis points from prior quarter. |
| • | Our tax equivalent net interest margin (“NIM”) remained notable at 3.51%, in spite of the impact of lower interest rates, lower yielding PPP loans and securities, and lower accretion income on acquired loans. The gain on our collar transaction and our deposit cost management continue to provide a strong foundation to our NIM. |
| • | Adjusted expenses (see Table 10) declined by $5.1 million and we realized an adjusted efficiency ratio(1) of 47.9%, down from 49.9%. |
| • | The provision for credit losses for the second quarter 2020 was $158.8 million compared to $83.4 million in the linked quarter reflecting degradation of economic forecasts, depressed energy markets and COVID-19 driven stress. As of June 30, 2020, our Allowance for Credit Losses (“ACL”) was 2.71% of total loans, up from 1.83% at March 31, 2020. Excluding PPP loans, our ACL was 2.93% at June 30, 2020. |
| • | Capital remained very strong with our Common Equity Tier 1 capital ratio increasing to 11.7% and total risk weighted capital increasing to 14.3%, providing a robust capital base well-positioned for the current environment. |
| • | Annualized returns on average assets and tangible common equity for the second quarter of 2020 were (1.22%) and (10.56%), respectively, compared to 1.10% and 12.23%, respectively, for the second quarter of 2019 and (9.08%) and 3.86%, respectively, for the first quarter of 2020. |
| • | Adjusted annualized returns on average assets(1) and adjusted tangible common equity(1) for the second quarter of 2020 were (1.24%) and (10.73%), respectively, compared to 1.17% and 12.96%, respectively, for the second quarter of 2019 and 0.28% and 3.62%, respectively, for the first quarter of 2020. |
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Balance Sheet:
Total assets were $18.9 billion as of June 30, 2020, an increase of $1.4 billion or 7.7% from June 30, 2019, and an increase of $1.6 billion or 9.4% from March 31, 2020 driven by the issuance of PPP loans and meaningful growth in deposits impacted by fiscal stimulus during the second quarter.
Cash and Cash Equivalents at June 30, 2020 totaled $1.9 billion as compared to $0.8 billion at June 30, 2019 and compared to $0.6 billion at March 31, 2020. The $1.3 billion increase in the second quarter of 2020 resulted from the increase of $1.6 billion in deposits during this quarter.
Loans at June 30, 2020 totaled $13.7 billion as compared to $13.6 billion at June 30, 2019, an increase of $71.2 million or 0.5%. Loans increased $306.9 million or 2.3% from $13.4 billion at March 31, 2020. The linked quarter increase included the origination of $1.0 billion in PPP loans, offset by approximately $693 million of net loan paydowns and payoffs. The declines were driven by reductions in the C&I segment, including paydowns of defensive draws taken in March, and strategic declines in the restaurant, energy and leveraged loan sectors as we work to reduce select exposures.
Investment Securities at June 30, 2020 totaled $2.7 billion or 14.1% of total assets as compared to $1.7 billion or 9.6% of total assets at June 30, 2019, an increase of $976.6 million or 58.0%. Investment securities for the second quarter of 2020 increased $199.8 million from $2.5 billion, or 14.3% of total assets at March 31, 2020. The increase in securities from both the prior year and linked quarter is a result of substantial growth in deposits and lower loan originations outside of the PPP loans. Securities acquired during the second quarter include primarily investment grade municipal bonds and agency-backed mortgages.
Goodwill at June 30, 2020 totaled $43.1 million, down from $483.2 million at June 30, 2019 and unchanged from March 31, 2020. As previously reported, the Company recorded a $443.7 million ($412.9 million, after-tax), non-cash goodwill impairment charge in the first quarter of 2020. The remaining goodwill at June 30, 2020 relates to our registered investment advisory subsidiary and trust division.
Total Deposits at June 30, 2020 were $16.1 billion, an increase of $1.6 billion or 10.9% from both the June 30, 2019 and March 31, 2020 levels. Second quarter 2020 core deposits increased by 11.3% as a result of customers maintaining additional liquidity in the current environment and broader impacts of fiscal stimulus. Non-interest bearing deposits increased to $5.2 billion at June 30, 2020 or 32.5% of total deposits, up from $3.3 billion or 22.8% at June 30, 2019 and up from $4.0 billion or 27.3% of total deposits at March 31, 2020.
Shareholders’ equity was $2.0 billion at June 30, 2020, a decrease of $380.6 million or 15.7% from June 30, 2019, and a decrease of $68.1 million or 3.2% from March 31, 2020. The linked quarter decrease included the quarterly net loss of $56.1 million, $6.3 million in cash dividends, and a decrease of $7.2 million in other comprehensive income which was largely driven by a decrease in the realized gain on the interest rate collar as amounts were recognized in interest income. The year over year decrease was impacted by the goodwill impairment in the first quarter of 2020.
Tangible common shareholders’ equity(1) was $1.9 billion at June 30, 2020, an increase of $77.7 million or 4.2% from June 30, 2019 and a decrease of $62.6 million or 3.2% from March 31, 2020. The linked quarter decrease resulted from the same factors noted above.
| • | Total shareholders’ equity to total assets and tangible equity to tangible assets were 10.8% and 10.2%, respectively, at June 30, 2020 compared to 13.9% and 10.8% at June 30, 2019, and 12.3% and 11.5% at March 31, 2020, respectively. |
| • | Tangible book value per share(1) was $15.15 as of June 30, 2020, an increase of $0.94 or 6.6% from $14.21 as of June 30, 2019 and a decrease of $0.50 or 3.2% from $15.65 as of March 31, 2020. |
| • | Total outstanding shares at June 30, 2020 were 125.9 million. |
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Tangible common equity to tangible assets was 10.2% at June 30, 2020, and quarter end capital ratios remained robust and other than the leverage ratio, increased during the quarter due to lower risk weighted assets.
| | 6/30/2020 | | 3/31/2020 | | 6/30/2019 |
Common equity Tier 1 capital | | 11.7% | | 11.4% | | 10.9% |
Tier 1 leverage capital | | 9.5% | | 10.1% | | 10.3% |
Tier 1 risk-based capital | | 11.7% | | 11.4% | | 10.9% |
Total risk-based capital | | 14.3% | | 13.8% | | 12.9% |
Asset Quality:
Credit quality metrics during the second quarter of 2020 reflected worsening economic factors as a result of COVID-19 and depressed energy prices, along with associated increased stress of certain borrowers, predominantly in the Restaurant and Energy categories.
| • | Net charge-offs for the second quarter of 2020 were $32.6 million or 0.94% annualized of average loans compared to $18.6 million or 0.54% annualized and $32.5 million or 0.99% annualized for the quarters ended June 30, 2019 and March 31, 2020, respectively. The current quarter charge-offs included $14.2 million in Energy, $13.4 million in General C&I and $4 million in Restaurant sectors. |
| • | Provision for credit losses for the second quarter of 2020 was $158.8 million as compared to $28.9 million for the second quarter of 2019 and $83.4 million for the first quarter of 2020. The current quarter’s provision was significantly impacted by an economic forecast that was adversely affected by the COVID-19 pandemic and depressed oil prices, as well as associated net credit migration within certain portfolios. Our calculation for the ACL used the baseline scenario provided by a nationally recognized service, as adjusted for qualitative and environmental factors. |
| • | The ACL was $370.9 million or 2.71% of total loans as of June 30, 2020, as compared to $115.3 million or 0.85% of total loans as of June 30, 2019, and $245.2 million or 1.83% of total loans as of March 31, 2020. |
| • | Loans 30-89 days past due were 0.19% of total loans at June 30, 2020, compared to 0.16% at June 30, 2019 and 0.19% at March 31, 2020. |
| • | Accruing loans 90 days or more past due were 0.02% of total loans at June 30, 2020, compared to 0.23% at June 30, 2019 and 0.01% at March 31, 2020. |
| • | NPL as a percent of total loans were 1.64% at June 30, 2020, compared to 0.80% at June 30, 2019 and 1.19% at March 31, 2020. NPL totaled $224.4 million, $108.8 million and $159.7 million as of June 30, 2019 and March 31, 2020, respectively. |
| • | The ACL to total nonperforming loans (“NPL”) was 165.3% as of June 30, 2020, as compared to 106.1% as of June 30, 2019, and 153.6% as of March 31, 2020. |
| • | Total criticized loans (see Table 6) at June 30, 2020 were $1.0 billion or 7.37% of total loans as compared to $408.5 million or 3.00% at June 30, 2019 and $665.7 million or 4.97% at March 31, 2020. The linked quarter increase included net downgrades predominantly in Restaurant and Energy and to a lesser extent CRE credits, partially mitigated by net reductions in general C&I credits. |
Total Revenue:
Total operating revenue(1) for the second quarter of 2020 was $184.7 million, down $7.8 million or 4.1% from the same period in 2019 and down $3.9 million or 2.1% from the linked quarter.
Net interest income Net interest income for the second quarter of 2020 was $154.7 million, a decrease of $6.1 million or 3.8% from the same period in 2019 and an increase of $1.2 million or 0.8% from the first quarter of 2020. The linked quarter increase resulted primarily from the ability of our lower deposit costs and hedging income to more than offset the impact of declines in LIBOR on our loan portfolio. Loan interest income, excluding accretion and PPP loans, declined $23.8 million during the quarter, and was more than offset by $16.6 million in lower deposit interest expense and $9.8 million in additional hedge income.
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| • | We aggressively lowered our interest rates on deposits resulting in a 52% reduction in costs of total deposits to 0.46% for the quarter compared to 0.96% for the linked quarter. Additionally, noninterest-bearing deposits as a percent of total deposits increased significantly to 32.5% from 27.3% in the prior quarter. Total interest-bearing liabilities declined by 61 basis points to 0.78% from 1.39% in the first quarter of 2020. |
| • | Hedge income and collar gain recognition for the second quarter of 2020 was $17.7 million as compared to $7.9 million for the first quarter of 2020. |
| • | Accretion on acquired loans totaled $7.6 million for the second quarter of 2020, adding 17 basis points to the NIM as compared to $9.8 million and 23 basis point for the first quarter of 2020. |
| • | Our NIM for the second quarter of 2020 was 3.51% as compared to 3.97% for the second quarter of 2019 and 3.80% for the first quarter of 2020. |
PPP loans averaged $664 million in the second quarter at a yield of 2.38%, and along with cash in deposits associated with these loans, negatively impacted our second quarter NIM by 11 basis points. In addition to the impact of PPP loans, the second quarter 2020 NIM declined 8 basis points due to lower LIBOR and earning asset mix shifts, 6 basis points due to lower accretion, and 4 basis points due to excess liquidity as a result of fiscal stimulus and customer behavior. Specifically, the NIM change during the quarter included:
| | |
Quarterly Change
| $ MM | NIM |
1Q 2020 Net Interest Income | $153.8 | 3.80% |
Loans (ex PPP & accretion) | (23.8) | -0.70% |
Deposits | 16.6 | 0.43% |
Hedge Income | 9.8 | 0.23% |
Accretion | (2.2) | -0.06% |
Securities | (1.8) | -0.05% |
Cash | (1.5) | -0.04% |
Borrowings | 0.2 | 0.01% |
NIM before PPP loans & cash* | $151.1 | 3.62% |
PPP Loans & associated cash | 4.0 | -0.11% |
2Q 2020 Net Interest Margin | $155.1 | 3.51% |
*Calculated by removing the quarterly average balance of PPP loans and income, as well as the
quarterly average balance of cash associated with unused PPP funds.
Noninterest income for the second quarter of 2020 was $30.0 million, a decrease of $1.8 million or 5.6% from the same period of 2019 and a decrease of $5.1 million or 14.6% from the linked quarter. Adjusted noninterest income(1) for the second quarter of 2020 was $27.7 million, a decrease of $3.6 million or 11.5% from the second quarter of 2019, and a decrease of $4.4 million or 13.8% from the linked quarter.
| • | The linked quarter results reflected slowed business activity as a result of COVID-19, including decreases in credit related fees, service charges on deposits, and $1.8 million in net writedowns on alternative investments. These impacts were partially offset by increases in investment advisory revenue and mortgage banking income given the robust related markets. |
| • | Noninterest income as a percent of total revenue for the second quarter of 2020 was 16.2% as compared to 16.5% for the second quarter of 2019 and 18.6% for the linked quarter. |
Noninterest expense (excluding goodwill impairment charge for first quarter 2020) for the second quarter of 2020 was $88.6 million, a decrease of $11.9 million or 11.8% from the same period in 2019 and a decrease of $5.3 million or 5.7% from the linked quarter. Adjusted noninterest expense(1), which excludes the impact of non-routine items(2), was $87.4 million, down $8.6 million or 8.9% from the second quarter of 2019 and down $5.1 million or 5.6% from the first quarter of 2020. Cadence has consistently demonstrated the ability to effectively manage expense levels in various economic
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environments, evidenced with the expense and efficiency declines this quarter. The linked quarter decrease in noninterest expenses (excluding the goodwill impairment charge) resulted from:
| • | Decrease of $1.6 million in personnel costs driven by reductions in regular compensation and employment taxes; |
| • | $1.3 million less in merger related expenses; |
| • | Decrease of $3.6 million in other expenses including: $0.8 million in special asset expenses; $0.7 million in travel expenses; $0.5 million in ATM and debit card expenses; and $0.5 million in operational losses; and |
| • | Partially offset by an increase of $1.5 million in FDIC insurance assessment. |
Adjusted efficiency ratio(1) for the second quarter of 2020 was 47.9%, improving from the linked quarter ratio of 49.9% with lower expenses and decreased from the prior year’s second quarter ratio of 50.0%.
Taxes:
The effective tax rate for the second quarter of 2020 was 10.6% compared to 7.7% for the linked quarter and 23.3% for the second quarter of 2019.
Dividend:
On July 21, 2020, the board of directors of Cadence Bancorporation approved a quarterly cash dividend in the amount of $0.05 per share of outstanding common stock, representing an annualized dividend of $0.20 per share. The dividend will be paid on August 7, 2020 to holders of record of Cadence’s Class A common stock on July 31, 2020.
Supplementary Financial Tables (Unaudited):
Supplementary financial tables (unaudited) are included in this release following the customary disclosure information.
Second Quarter 2020 Earnings Conference Call:
Cadence Bancorporation executive management will host a conference call to discuss second quarter 2020 results on Wednesday, July 22, 2020, at 7:30 a.m. CT / 8:30 a.m. ET. Slides to be presented by management on the conference call can be viewed by visiting www.cadencebancorporation.com and selecting “Events & Presentations” then “Presentations”.
Conference Call Access:
To access the conference call, please dial one of the following numbers approximately 10-15 minutes prior to the start time to allow time for registration and use the Elite Entry Number provided below.
Dial in (toll free): | 1-888-317-6003 |
International dial in: | 1-412-317-6061 |
Canada (toll free): | 1-866-284-3684 |
Participant Elite Entry Number: | 2169431 |
For those unable to participate in the live presentation, a replay will be available through August 5, 2020. To access the replay, please use the following numbers:
US Toll Free: | 1-877-344-7529 |
International Toll: | 1-412-317-0088 |
Canada Toll Free: | 1-855-669-9658 |
Replay Access Code: | 10145370 |
(1) | Considered a non-GAAP financial measure. See Table 10 “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure. |
(2) | See Table 10 for a detail of non-routine income and expenses. |
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Webcast Access:
The call and corresponding presentation slides will be webcast live on the home page of the Company’s website: www.cadencebancorporation.com.
About Cadence Bancorporation:
Cadence Bancorporation (NYSE: CADE), headquartered in Houston, Texas, is a regional financial holding company with $18.9 billion in total assets as of June 30, 2020. Its wholly owned subsidiary, Cadence Bank, N.A., operates 98 branch locations in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas, and provides corporations, middle-market companies, small businesses and consumers with a full range of innovative banking and financial solutions. Services and products include commercial and business banking, treasury management, specialized lending, asset-based lending, commercial real estate, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, payroll and insurance services, consumer banking, consumer loans, mortgages, home equity lines and loans, and credit cards. Clients have access to leading-edge online and mobile solutions, interactive teller machines, and more than 55,000 ATMs. The Cadence team of 1,800 associates is committed to exceeding customer expectations and helping their clients succeed financially.
Cautionary Statement Regarding Forward-Looking Information
This communication contains 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. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. 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-3 filed with the Securities and Exchange Commission (the “SEC”) on May 21, 2018, and our Registration Statement on Form S-4 filed with the SEC on July 20, 2018, other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, 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; deteriorating asset quality and higher loan charge-offs; the laws and regulations applicable to our business; our ability to achieve organic loan and deposit growth and the composition of such growth; increased competition in the financial services industry, nationally, regionally or locally; our ability to maintain our historical earnings trends; our ability to raise additional capital to implement our business plan; material weaknesses in our internal
control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems or third-party servicers; the composition of our management team and our ability to attract and retain key personnel; the fiscal position of the U.S. federal government and the soundness of other financial institutions; the composition of our loan portfolio, including the identity of our borrowers and the concentration of loans in energy-related industries and in our specialized industries; the portion of our loan portfolio that is comprised of participations and shared national credits; the amount of nonperforming and classified assets we hold; the extent of the impact of the COVID-19 pandemic on us and our customers, counterparties, employees, and third-party service providers, and the impacts to our business, financial position, results of operations, and prospects; the impact on our financial
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Exhibit 99.1
condition, results of operations, financial disclosures, and future business strategies related to the implementation of FASB Accounting Standards Update 2016-13, Financial Instruments – Credit Losses, commonly referred to as CECL. Cadence can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this communication, and Cadence 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 applicable law.
About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including “efficiency ratio,” “adjusted efficiency ratio,” “adjusted noninterest expenses,” “adjusted operating revenue,” “tangible common equity ratio,” “tangible book value per share” and “return on average tangible common equity”, “adjusted return on average tangible common equity”, “adjusted return on average assets”, “adjusted diluted earnings per share”, and “pre-tax, pre-provision net revenue” 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 these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis.
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 (Table 10).
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Contact Information
Cadence Bancorporation
Media contact:
Danielle Kernell
713-871-4051
danielle.kernell@cadencebank.com
Investor relations contact:
Valerie Toalson
713-871-4103 or 800-698-7878
vtoalson@cadencebancorporation.com
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Table 1 – Selected Financial Data
| | As of and for the Three Months Ended | |
(In thousands, except share and per share data) | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Statement of Operations Data | | | | | | | | | | | | | | | | | | | | |
Interest income | | $ | 177,175 | | | $ | 192,754 | | | $ | 207,620 | | | $ | 213,149 | | | $ | 217,124 | |
Interest expense | | | 22,461 | | | | 39,286 | | | | 46,709 | | | | 52,962 | | | | 56,337 | |
Net interest income | | | 154,714 | | | | 153,468 | | | | 160,911 | | | | 160,187 | | | | 160,787 | |
Provision for credit losses | | | 158,811 | | | | 83,429 | | | | 27,126 | | | | 43,764 | | | | 28,927 | |
Net interest income after provision | | | (4,097 | ) | | | 70,039 | | | | 133,785 | | | | 116,423 | | | | 131,860 | |
Noninterest income | | | 29,950 | | | | 35,069 | | | | 33,898 | | | | 34,642 | | | | 31,722 | |
Noninterest expense (1) | | | 88,620 | | | | 537,653 | | | | 100,519 | | | | 94,283 | | | | 100,529 | |
(Loss) income before income taxes | | | (62,767 | ) | | | (432,545 | ) | | | 67,164 | | | | 56,782 | | | | 63,053 | |
Income tax (benefit) expense | | | (6,653 | ) | | | (33,234 | ) | | | 15,738 | | | | 12,796 | | | | 14,707 | |
Net (loss) income | | $ | (56,114 | ) | | $ | (399,311 | ) | | $ | 51,426 | | | $ | 43,986 | | | $ | 48,346 | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | | | | | |
Basic | | | 125,924,652 | | | | 126,630,446 | | | | 127,953,742 | | | | 128,457,491 | | | | 128,791,933 | |
Diluted | | | 125,924,652 | | | | 126,630,446 | | | | 128,003,089 | | | | 128,515,274 | | | | 129,035,553 | |
(Loss) earnings per share | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | (0.45 | ) | | $ | (3.15 | ) | | $ | 0.40 | | | $ | 0.34 | | | $ | 0.37 | |
Diluted | | | (0.45 | ) | | | (3.15 | ) | | | 0.40 | | | | 0.34 | | | | 0.37 | |
Period-End Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 1,899,369 | | | $ | 609,351 | | | $ | 988,764 | | | $ | 1,061,102 | | | $ | 766,259 | |
Investment securities | | | 2,661,433 | | | | 2,461,644 | | | | 2,368,592 | | | | 1,705,325 | | | | 1,684,847 | |
Total loans, net of unearned income | | | 13,699,097 | | | | 13,392,191 | | | | 12,983,655 | | | | 13,637,042 | | | | 13,627,934 | |
Allowance for credit losses | | | 370,901 | | | | 245,246 | | | | 119,643 | | | | 127,773 | | | | 115,345 | |
Total assets | | | 18,857,753 | | | | 17,237,918 | | | | 17,800,229 | | | | 17,855,946 | | | | 17,504,005 | |
Total deposits | | | 16,069,282 | | | | 14,489,505 | | | | 14,742,794 | | | | 14,789,712 | | | | 14,487,821 | |
Noninterest-bearing deposits | | | 5,220,109 | | | | 3,959,721 | | | | 3,833,704 | | | | 3,602,861 | | | | 3,296,652 | |
Interest-bearing deposits | | | 10,849,173 | | | | 10,529,784 | | | | 10,909,090 | | | | 11,186,851 | | | | 11,191,169 | |
Borrowings and subordinated debentures | | | 372,222 | | | | 372,440 | | | | 372,173 | | | | 371,892 | | | | 376,240 | |
Total shareholders’ equity | | | 2,045,480 | | | | 2,113,543 | | | | 2,460,846 | | | | 2,475,944 | | | | 2,426,072 | |
Average Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |
Investment securities | | $ | 2,487,467 | | | $ | 2,397,275 | | | $ | 2,003,339 | | | $ | 1,650,902 | | | $ | 1,716,550 | |
Total loans, net of unearned income | | | 13,884,220 | | | | 13,161,371 | | | | 13,423,435 | | | | 13,719,286 | | | | 13,921,873 | |
Allowance for credit losses | | | 267,464 | | | | 201,785 | | | | 132,975 | | | | 119,873 | | | | 106,656 | |
Total assets | | | 18,500,600 | | | | 17,694,018 | | | | 17,843,383 | | | | 17,621,163 | | | | 17,653,511 | |
Total deposits | | | 15,774,787 | | | | 14,574,614 | | | | 14,749,327 | | | | 14,539,420 | | | | 14,645,110 | |
Noninterest-bearing deposits | | | 4,587,673 | | | | 3,658,612 | | | | 3,648,874 | | | | 3,456,807 | | | | 3,281,383 | |
Interest-bearing deposits | | | 11,187,115 | | | | 10,916,002 | | | | 11,100,454 | | | | 11,082,613 | | | | 11,363,727 | |
Borrowings and subordinated debentures | | | 372,547 | | | | 439,698 | | | | 374,179 | | | | 381,257 | | | | 441,619 | |
Total shareholders’ equity | | | 2,118,796 | | | | 2,446,810 | | | | 2,471,398 | | | | 2,447,189 | | | | 2,331,855 | |
| (1) | For the quarter ended March 31, 2020, includes the non-cash goodwill impairment charge of $443.7 million, $412.9 million after-tax. |
9
Table 1 (Continued) – Selected Financial Data
| | As of and for the Three Months Ended | |
(In thousands, except share and per share data) | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Per Share Data: | | | | | | | | | | | | | | | | | | | | |
Book value | | $ | 16.24 | | | $ | 16.79 | | | $ | 19.29 | | | $ | 19.32 | | | $ | 18.84 | |
Tangible book value (1) | | | 15.15 | | | | 15.65 | | | | 14.65 | | | | 14.66 | | | | 14.21 | |
Cash dividends declared | | | 0.050 | | | | 0.175 | | | | 0.175 | | | | 0.175 | | | | 0.175 | |
Dividend payout ratio | | | (11.11 | )% | | | (5.56 | )% | | | 43.75 | % | | | 51.47 | % | | | 47.30 | % |
Performance Ratios: | | | | | | | | | | | | | | | | | | | | |
Return on average common equity (2) | | | (10.65 | )% | | | (65.64 | )% | | | 8.26 | % | | | 7.13 | % | | | 8.32 | % |
Return on average tangible common equity (1) (2) | | | (10.56 | ) | | | 3.86 | | | | 11.82 | | | | 10.43 | | | | 12.23 | |
Return on average assets (2) | | | (1.22 | ) | | | (9.08 | ) | | | 1.14 | | | | 0.99 | | | | 1.10 | |
Net interest margin (2) | | | 3.51 | | | | 3.80 | | | | 3.89 | | | | 3.94 | | | | 3.97 | |
Efficiency ratio (1) | | | 47.99 | | | | 285.17 | | | | 51.60 | | | | 48.39 | | | | 52.22 | |
Adjusted efficiency ratio (1) | | | 47.93 | | | | 49.88 | | | | 50.91 | | | | 48.07 | | | | 49.97 | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | |
Total NPA to total loans, OREO, and other NPA | | | 1.74 | % | | | 1.31 | % | | | 0.97 | % | | | 0.84 | % | | | 0.85 | % |
Total nonperforming loans ("NPL") to total loans | | | 1.64 | | | | 1.19 | | | | 0.92 | | | | 0.79 | | | | 0.80 | |
Total ACL to total loans | | | 2.71 | | | | 1.83 | | | | 0.92 | | | | 0.94 | | | | 0.85 | |
ACL to total NPL | | | 165.30 | | | | 153.61 | | | | 100.07 | | | | 118.17 | | | | 106.08 | |
Net charge-offs to average loans (2) | | | 0.94 | | | | 0.99 | | | | 1.04 | | | | 0.91 | | | | 0.54 | |
Capital Ratios: | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity to assets | | | 10.8 | % | | | 12.3 | % | | | 13.8 | % | | | 13.9 | % | | | 13.9 | % |
Tangible common equity to tangible assets (1) | | | 10.2 | | | | 11.5 | | | | 10.9 | | | | 10.9 | | | | 10.8 | |
Common equity Tier 1 capital | | | 11.7 | | | | 11.4 | | | | 11.5 | | | | 11.0 | | | | 10.9 | |
Tier 1 leverage capital (3) | | | 9.5 | | | | 10.1 | | | | 10.3 | | | | 10.3 | | | | 10.3 | |
Tier 1 risk-based capital (3) | | | 11.7 | | | | 11.4 | | | | 11.5 | | | | 11.0 | | | | 10.9 | |
Total risk-based capital (3) | | | 14.3 | | | | 13.8 | | | | 13.7 | | | | 13.1 | | | | 12.9 | |
_____________________ | | | | | | | | | | | | | | | | | | | | |
| (1) | Considered a non-GAAP financial measure. See Table 10 "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure. |
| (3) | Current quarter regulatory capital ratios are estimates. |
10
Table 2 – Average Balances/Yield/Rates
| | For the Three Months Ended June 30, | | |
| | 2020 | | | | 2019 | | |
| | Average | | | Income/ | | | Yield/ | | | | Average | | | Income/ | | | Yield/ | | |
(In thousands) | | Balance | | | Expense | | | Rate | | | | Balance | | | Expense | | | Rate | | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans, net of unearned income (1) | | | | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans | | $ | 11,173,408 | | | $ | 125,922 | | | | 4.53 | | % | | $ | 10,044,825 | | | $ | 135,946 | | | | 5.43 | | % |
ANCI portfolio | | | 2,512,163 | | | | 32,967 | | | | 5.28 | | | | | 3,586,344 | | | | 55,266 | | | | 6.18 | | |
PCD portfolio (3) | | | 198,649 | | | | 3,965 | | | | 8.03 | | | | | 290,704 | | | | 10,799 | | | | 14.90 | | |
Total loans | | | 13,884,220 | | | | 162,854 | | | | 4.72 | | | | | 13,921,873 | | | | 202,011 | | | | 5.82 | | |
Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 2,269,017 | | | | 12,207 | | | | 2.16 | | | | | 1,500,971 | | | | 10,298 | | | | 2.75 | | |
Tax-exempt (2) | | | 218,450 | | | | 1,948 | | | | 3.59 | | | | | 215,579 | | | | 2,061 | | | | 3.83 | | |
Total investment securities | | | 2,487,467 | | | | 14,155 | | | | 2.29 | | | | | 1,716,550 | | | | 12,359 | | | | 2.89 | | |
Federal funds sold and short-term investments | | | 1,342,779 | | | | 328 | | | | 0.10 | | | | | 597,988 | | | | 2,667 | | | | 1.79 | | |
Other investments | | | 77,337 | | | | 247 | | | | 1.28 | | | | | 67,124 | | | | 520 | | | | 3.11 | | |
Total interest-earning assets | | | 17,791,803 | | | | 177,584 | | | | 4.01 | | | | | 16,303,535 | | | | 217,557 | | | | 5.35 | | |
Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 176,716 | | | | | | | | | | | | | 111,337 | | | | | | | | | | |
Premises and equipment | | | 127,413 | | | | | | | | | | | | | 128,067 | | | | | | | | | | |
Accrued interest and other assets | | | 672,132 | | | | | | | | | | | | | 1,217,228 | | | | | | | | | | |
Allowance for credit losses | | | (267,464 | ) | | | | | | | | | | | | (106,656 | ) | | | | | | | | | |
Total assets | | $ | 18,500,600 | | | | | | | | | | | | $ | 17,653,511 | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | $ | 8,368,151 | | | $ | 7,511 | | | | 0.36 | | % | | $ | 7,732,568 | | | $ | 30,195 | | | | 1.57 | | % |
Savings deposits | | | 291,874 | | | | 179 | | | | 0.25 | | | | | 251,270 | | | | 245 | | | | 0.39 | | |
Time deposits | | | 2,527,090 | | | | 10,451 | | | | 1.66 | | | | | 3,379,889 | | | | 20,298 | | | | 2.41 | | |
Total interest-bearing deposits | | | 11,187,115 | | | | 18,141 | | | | 0.65 | | | | | 11,363,727 | | | | 50,738 | | | | 1.79 | | |
Other borrowings | | | 149,973 | | | | 937 | | | | 2.51 | | | | | 300,897 | | | | 3,051 | | | | 4.07 | | |
Subordinated debentures | | | 222,574 | | | | 3,383 | | | | 6.11 | | | | | 140,722 | | | | 2,548 | | | | 7.26 | | |
Total interest-bearing liabilities | | | 11,559,662 | | | | 22,461 | | | | 0.78 | | | | | 11,805,346 | | | | 56,337 | | | | 1.91 | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | 4,587,673 | | | | | | | | | | | | | 3,281,383 | | | | | | | | | | |
Accrued interest and other liabilities | | | 234,469 | | | | | | | | | | | | | 234,927 | | | | | | | | | | |
Total liabilities | | | 16,381,804 | | | | | | | | | | | | | 15,321,656 | | | | | | | | | | |
Shareholders' equity | | | 2,118,796 | | | | | | | | | | | | | 2,331,855 | | | | | | | | | | |
Total liabilities and shareholders' equity | | $ | 18,500,600 | | | | | | | | | | | | $ | 17,653,511 | | | | | | | | | | |
Net interest income/net interest spread | | | | | | | 155,123 | | | | 3.23 | | % | | | | | | | 161,220 | | | | 3.45 | | % |
Net yield on earning assets/net interest margin | | | | | | | | | | | 3.51 | | % | | | | | | | | | | | 3.97 | | % |
Taxable equivalent adjustment: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investment securities | | | | | | | (409 | ) | | | | | | | | | | | | (433 | ) | | | | | |
Net interest income | | | | | | $ | 154,714 | | | | | | | | | | | | $ | 160,787 | | | | | | |
_____________________ | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Nonaccrual loans are included in loans, net of unearned income. No adjustment has been made for these loans in the calculation of yields. |
| (2) | Interest income and yields are presented on a fully taxable equivalent basis using an income tax rate of 21%. |
| (3) | Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans. |
11
Table 2 (Continued) – Average Balances/Yield/Rates
| | For the Three Months Ended June 30, 2020 | | | | For the Three Months Ended March 31, 2020 | | |
| | Average | | | Income/ | | | Yield/ | | | | Average | | | Income/ | | | Yield/ | | |
(In thousands) | | Balance | | | Expense | | | Rate | | | | Balance | | | Expense | | | Rate | | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans, net of unearned income (1) | | | | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans | | $ | 11,173,408 | | | $ | 125,922 | | | | 4.53 | | % | | $ | 10,213,846 | | | $ | 129,402 | | | | 5.10 | | % |
ANCI portfolio | | | 2,512,163 | | | | 32,967 | | | | 5.28 | | | | | 2,731,240 | | | | 40,650 | | | | 5.99 | | |
PCD portfolio (3) | | | 198,649 | | | | 3,965 | | | | 8.03 | | | | | 216,285 | | | | 5,082 | | | | 9.45 | | |
Total loans | | | 13,884,219 | | | | 162,854 | | | | 4.72 | | | | | 13,161,371 | | | | 175,134 | | | | 5.35 | | |
Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 2,269,017 | | | | 12,207 | | | | 2.16 | | | | | 2,198,528 | | | | 14,015 | | | | 2.56 | | |
Tax-exempt (2) | | | 218,450 | | | | 1,948 | | | | 3.59 | | | | | 198,747 | | | | 1,807 | | | | 3.66 | | |
Total investment securities | | | 2,487,467 | | | | 14,155 | | | | 2.29 | | | | | 2,397,275 | | | | 15,822 | | | | 2.65 | | |
Federal funds sold and short-term investments | | | 1,342,779 | | | | 328 | | | | 0.10 | | | | | 628,885 | | | | 1,783 | | | | 1.14 | | |
Other investments | | | 77,337 | | | | 247 | | | | 1.28 | | | | | 80,173 | | | | 394 | | | | 1.98 | | |
Total interest-earning assets | | | 17,791,802 | | | | 177,584 | | | | 4.01 | | | | | 16,267,704 | | | | 193,133 | | | | 4.77 | | |
Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | | 176,716 | | | | | | | | | | | | | 250,804 | | | | | | | | | | |
Premises and equipment | | | 127,413 | | | | | | | | | | | | | 127,812 | | | | | | | | | | |
Accrued interest and other assets | | | 672,132 | | | | | | | | | | | | | 1,249,483 | | | | | | | | | | |
Allowance for credit losses | | | (267,464 | ) | | | | | | | | | | | | (201,785 | ) | | | | | | | | | |
Total assets | | $ | 18,500,599 | | | | | | | | | | | | $ | 17,694,018 | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | $ | 8,368,151 | | | $ | 7,511 | | | | 0.36 | | % | | $ | 8,121,641 | | | $ | 21,667 | | | | 1.07 | | % |
Savings deposits | | | 291,874 | | | | 179 | | | | 0.25 | | | | | 272,444 | | | | 317 | | | | 0.47 | | |
Time deposits | | | 2,527,090 | | | | 10,451 | | | | 1.66 | | | | | 2,521,917 | | | | 12,744 | | | | 2.03 | | |
Total interest-bearing deposits | | | 11,187,115 | | | | 18,141 | | | | 0.65 | | | | | 10,916,002 | | | | 34,728 | | | | 1.28 | | |
Other borrowings | | | 149,973 | | | | 937 | | | | 2.51 | | | | | 217,363 | | | | 1,108 | | | | 2.05 | | |
Subordinated debentures | | | 222,574 | | | | 3,383 | | | | 6.11 | | | | | 222,335 | | | | 3,450 | | | | 6.24 | | |
Total interest-bearing liabilities | | | 11,559,662 | | | | 22,461 | | | | 0.78 | | | | | 11,355,700 | | | | 39,286 | | | | 1.39 | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | | 4,587,673 | | | | | | | | | | | | | 3,658,612 | | | | | | | | | | |
Accrued interest and other liabilities | | | 234,469 | | | | | | | | | | | | | 232,896 | | | | | | | | | | |
Total liabilities | | | 16,381,804 | | | | | | | | | | | | | 15,247,208 | | | | | | | | | | |
Stockholders' equity | | | 2,118,796 | | | | | | | | | | | | | 2,446,810 | | | | | | | | | | |
Total liabilities and stockholders' equity | | $ | 18,500,600 | | | | | | | | | | | | $ | 17,694,018 | | | | | | | | | | |
Net interest income/net interest spread | | | | | | | 155,123 | | | | 3.23 | | % | | | | | | | 153,847 | | | | 3.38 | | % |
Net yield on earning assets/net interest margin | | | | | | | | | | | 3.51 | | % | | | | | | | | | | | 3.80 | | % |
Taxable equivalent adjustment: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investment securities | | | | | | | (409 | ) | | | | | | | | | | | | (379 | ) | | | | | |
Net interest income | | | | | | $ | 154,714 | | | | | | | | | | | | $ | 153,468 | | | | | | |
_____________________ | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Nonaccrual loans are included in loans, net of unearned income. No adjustment has been made for these loans in the calculation of yields. |
| (2) | Interest income and yields are presented on a fully taxable equivalent basis using an income tax rate of 21%. |
| (3) | Prior to the adoption of CECL on January 1, 2020, these loans were referred to as ACI loans, but with the adoption of CECL they are referred to as PCD loans. |
12
Table 3 – Loan Interest Income Detail
| | Year-To-Date | | | For the Three Months Ended | |
(In thousands) | | June 30, 2020 | | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Interest Income Detail | | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans | | $ | 255,324 | | | $ | 125,922 | | | $ | 129,402 | | | $ | 134,450 | | | $ | 136,333 | | | $ | 135,946 | |
ANCI loans: interest income | | | 59,205 | | | | 26,264 | | | | 32,940 | | | | 37,637 | | | | 43,133 | | | | 49,095 | |
ANCI loans: accretion | | | 14,413 | | | | 6,703 | | | | 7,710 | | | | 8,610 | | | | 10,951 | | | | 6,171 | |
PCD loans: interest income (1) | | | 6,150 | | | | 3,111 | | | | 3,039 | | | | 3,839 | | | | 3,406 | | | | 2,781 | |
PCD loans: accretion (1) | | | 2,897 | | | | 854 | | | | 2,043 | | | | 6,018 | | | | 4,147 | | | | 8,017 | |
Total loan interest income | | $ | 337,988 | | | $ | 162,854 | | | $ | 175,134 | | | $ | 190,554 | | | $ | 197,970 | | | $ | 202,011 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Yields | | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans | | | 4.80 | | % | | 4.53 | | % | | 5.10 | | % | | 5.25 | | % | | 5.31 | | % | | 5.43 | |
ANCI loans without discount accretion | | | 4.54 | | | | 4.20 | | | | 4.85 | | | | 4.95 | | | | 5.23 | | | | 5.49 | |
ANCI loans discount accretion | | | 1.11 | | | | 1.08 | | | | 1.14 | | | | 1.13 | | | | 1.33 | | | | 0.69 | |
PCD loans without discount accretion | | | 5.96 | | | | 6.30 | | | | 5.65 | | | | 6.20 | | | | 5.23 | | | | 3.84 | |
PCD loans discount accretion | | | 2.81 | | | | 1.73 | | | | 3.80 | | | | 9.73 | | | | 6.37 | | | | 11.06 | |
Total loan yield | | | 5.03 | | % | | 4.72 | | % | | 5.35 | | % | | 5.63 | | % | | 5.72 | | % | | 5.82 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Prior quarter PCD amounts have been revised to be comparable to the current quarter presentation. Interest income for PCD loans represents contractual interest. |
Table 4 – Allowance for Credit Losses (“ACL”) (1)
| | For the Three Months Ended | |
(In thousands) | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Balance at beginning of period | | $ | 245,246 | | | $ | 119,643 | | | $ | 127,773 | | | $ | 115,345 | | | $ | 105,038 | |
Cumulative effect of the adoption of CECL (2) | | | — | | | | 75,850 | | | | — | | | | — | | | | — | |
Charge-offs | | | (33,452 | ) | | | (33,098 | ) | | | (35,432 | ) | | | (31,650 | ) | | | (18,981 | ) |
Recoveries | | | 901 | | | | 613 | | | | 176 | | | | 314 | | | | 361 | |
Net charge-offs | | | (32,551 | ) | | | (32,485 | ) | | | (35,256 | ) | | | (31,336 | ) | | | (18,620 | ) |
Provision for loan losses | | | 158,206 | | | | 82,238 | | | | 27,126 | | | | 43,764 | | | | 28,927 | |
Balance at end of period | | $ | 370,901 | | | $ | 245,246 | | | $ | 119,643 | | | $ | 127,773 | | | $ | 115,345 | |
| | | | | | | | | | | | | | | | | | | | |
| (1) | This table represents the activity in the ACL for funded loans. |
| (2) | The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (“CECL”), on January 1, 2020 and recorded this cumulative effect adjustment as a result of accounting change. |
13
Table 5 – ACL Activity by Segment
| | For the Three Months Ended June 30, 2020 | |
(In thousands) | | Commercial and Industrial | | | Commercial Real Estate | | | Consumer | | | Total Allowance for Credit Losses | | | Reserve for Unfunded Commitments (1) | | | Total | |
As of March 31, 2020 | | $ | 154,585 | | | $ | 53,418 | | | $ | 37,243 | | | $ | 245,246 | | | $ | 3,222 | | | $ | 248,468 | |
Provision for credit losses | | | 95,325 | | | | 59,359 | | | | 3,522 | | | | 158,206 | | | | 605 | | | | 158,811 | |
Charge-offs | | | (32,816 | ) | | | (327 | ) | | | (309 | ) | | | (33,452 | ) | | | — | | | | (33,452 | ) |
Recoveries | | | 702 | | | | 30 | | | | 169 | | | | 901 | | | | — | | | | 901 | |
As of June 30, 2020 | | $ | 217,796 | | | $ | 112,480 | | | $ | 40,625 | | | $ | 370,901 | | | $ | 3,827 | | | $ | 374,728 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Six Months Ended June 30, 2020 | |
(In thousands) | | Commercial and Industrial | | | Commercial Real Estate | | | Consumer | | | Total Allowance for Credit Losses | | | Reserve for Unfunded Commitments (1) | | | Total | |
As of December 31, 2019 | | $ | 89,796 | | | $ | 15,319 | | | $ | 14,528 | | | $ | 119,643 | | | $ | 1,699 | | | $ | 121,342 | |
Cumulative effect of the adoption of CECL | | | 32,951 | | | | 20,599 | | | | 22,300 | | | | 75,850 | | | | 332 | | | | 76,182 | |
As of January 1, 2020 | | | 122,747 | | | | 35,918 | | | | 36,828 | | | | 195,493 | | | | 2,031 | | | | 197,524 | |
Provision for credit losses | | | 159,008 | | | | 77,158 | | | | 4,278 | | | | 240,444 | | | | 1,796 | | | | 242,240 | |
Charge-offs | | | (64,803 | ) | | | (806 | ) | | | (941 | ) | | | (66,550 | ) | | | — | | | | (66,550 | ) |
Recoveries | | | 844 | | | | 210 | | | | 460 | | | | 1,514 | | | | — | | | | 1,514 | |
As of June 30, 2020 | | $ | 217,796 | | | $ | 112,480 | | | $ | 40,625 | | | $ | 370,901 | | | $ | 3,827 | | | $ | 374,728 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | The reserve for unfunded commitments is recorded in other liabilities in the consolidated balance sheets |
Table 6 – Criticized Loans by Segment
| | As of June 30, 2020 | |
(Amortized cost in thousands) | | Special Mention | | | Substandard | | | Doubtful | | | Total Criticized | |
Commercial and Industrial | | | | | | | | | | | | | | | | |
General C&I | | $ | 45,512 | | | $ | 146,333 | | | $ | 10,237 | | | $ | 202,082 | |
Energy | | | 155,735 | | | | 114,080 | | | | 10,747 | | | | 280,562 | |
Restaurant | | | 171,722 | | | | 158,596 | | | | 7,596 | | | | 337,914 | |
Healthcare | | | 18,250 | | | | 47,398 | | | | — | | | | 65,648 | |
Total commercial and industrial | | | 391,219 | | | | 466,407 | | | | 28,580 | | | | 886,206 | |
Commercial Real Estate | | | | | | | | | | | | | | | | |
Industrial, retail, and other | | | 60,819 | | | | 40,351 | | | | 534 | | | | 101,704 | |
Multifamily | | | 91 | | | | 714 | | | | — | | | | 805 | |
Office | | | 346 | | | | 1,005 | | | | — | | | | 1,351 | |
Total commercial real estate | | | 61,256 | | | | 42,070 | | | | 534 | | | | 103,860 | |
Consumer | | | | | | | | | | | | | | | | |
Residential | | | — | | | | 19,172 | | | | — | | | | 19,172 | |
Other | | | — | | | | 39 | | | | — | | | | 39 | |
Total consumer | | | — | | | | 19,211 | | | | — | | | | 19,211 | |
Total | | $ | 452,475 | | | $ | 527,688 | | | $ | 29,114 | | | $ | 1,009,277 | |
| | | | | | | | | | | | | | | | |
14
| | As of March 31, 2020 | |
(Recorded investment in thousands) | | Special Mention | | | Substandard | | | Doubtful | | | Total Criticized | |
Commercial and Industrial | | | | | | | | | | | | | | | | |
General C&I | | $ | 64,326 | | | $ | 208,452 | | | $ | 7,130 | | | $ | 279,908 | |
Energy sector | | | 111,261 | | | | 43,326 | | | | 5,915 | | | | 160,502 | |
Restaurant industry | | | 43,916 | | | | 63,608 | | | | 6,396 | | | | 113,920 | |
Healthcare | | | 35,604 | | | | 3,122 | | | | — | | | | 38,726 | |
Total commercial and industrial | | | 255,107 | | | | 318,508 | | | | 19,441 | | | | 593,056 | |
Commercial Real Estate | | | | | | | | | | | | | | | | |
Industrial, retail, and other | | | 30,158 | | | | 14,241 | | | | — | | | | 44,399 | |
Multifamily | | | 1,219 | | | | — | | | | — | | | | 1,219 | |
Office | | | 327 | | | | 9,907 | | | | — | | | | 10,234 | |
Total commercial real estate | | | 31,704 | | | | 24,148 | | | | — | | | | 55,852 | |
Consumer | | | | | | | | | | | | | | | | |
Residential real estate | | | — | | | | 16,760 | | | | — | | | | 16,760 | |
Other | | | — | | | | 8 | | | | — | | | | 8 | |
Total consumer | | | — | | | | 16,768 | | | | — | | | | 16,768 | |
Total | | $ | 286,811 | | | $ | 359,424 | | | $ | 19,441 | | | $ | 665,676 | |
| | | | | | | | | | | | | | | | |
Table 7 – Nonperforming Assets
| | As of | |
| | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Nonperforming loans (1) | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 182,839 | | | $ | 136,712 | | | $ | 106,803 | | | $ | 92,643 | | | $ | 103,379 | |
Commercial real estate | | | 25,261 | | | | 8,133 | | | | 1,127 | | | | 6,855 | | | | — | |
Consumer | | | 16,284 | | | | 14,808 | | | | 7,289 | | | | 5,294 | | | | 2,942 | |
Small business (2) | | | — | | | | — | | | | 4,337 | | | | 3,334 | | | | 2,434 | |
Total nonperforming loans ("NPL") | | | 224,384 | | | | 159,653 | | | | 119,556 | | | | 108,126 | | | | 108,755 | |
Foreclosed OREO and other NPA | | | 13,949 | | | | 15,679 | | | | 5,958 | | | | 6,731 | | | | 7,712 | |
Total nonperforming assets | | $ | 238,333 | | | $ | 175,332 | | | $ | 125,514 | | | $ | 114,857 | | | $ | 116,467 | |
NPL as a percentage of total loans | | | 1.64 | % | | | 1.19 | % | | | 0.92 | % | | | 0.79 | % | | | 0.80 | % |
NPA as a percentage of loans plus OREO/other | | | 1.74 | % | | | 1.31 | % | | | 0.97 | % | | | 0.84 | % | | | 0.85 | % |
NPA as a percentage of total assets | | | 1.26 | % | | | 0.99 | % | | | 0.71 | % | | | 0.64 | % | | | 0.67 | % |
Total accruing loans 90 days or more past due | | $ | 3,123 | | | $ | 1,999 | | | $ | 23,364 | | | $ | 24,487 | | | $ | 31,374 | |
(1) | Amounts are not comparable due to our adoption of CECL on January 1, 2020. Prior to this date, pools of individual ACI loans were excluded because they continued to earn interest income from the accretable yield at the pool level. With the adoption of CECL, the pools were discontinued, and performance is based on contractual terms for individual loans. Additionally, prior to January 1, 2020, the we used recorded investment in this table. With the adoption of CECL we now use amortized cost. |
(2) | Upon the adoption of CECL, small business loans are included in commercial and industrial and commercial real estate loans. |
15
Table 8 – Noninterest Income
| | For the Three Months Ended | |
(In thousands) | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | | | June 30, 2019 | |
Noninterest Income | | | | | | | | | | | | | | | | | | | | | | |
Investment advisory revenue | | $ | 6,505 | | | $ | 5,605 | | | $ | 6,920 | | | $ | 6,532 | | | | | $ | 5,797 | |
Trust services revenue | | | 4,092 | | | | 4,815 | | | | 4,713 | | | | 4,440 | | | | | | 4,578 | |
Service charges on deposit accounts | | | 4,852 | | | | 6,416 | | | | 5,181 | | | | 5,462 | | | | | | 4,730 | |
Credit-related fees | | | 4,401 | | | | 5,983 | | | | 5,094 | | | | 5,960 | | | | | | 5,341 | |
Bankcard fees | | | 1,716 | | | | 1,958 | | | | 1,933 | | | | 2,061 | | | | | | 2,279 | |
Payroll processing revenue | | | 1,143 | | | | 1,367 | | | | 1,373 | | | | 1,196 | | | | | | 1,161 | |
SBA income | | | 1,335 | | | | 1,908 | | | | 2,153 | | | | 2,216 | | | | | | 1,415 | |
Other service fees | | | 1,528 | | | | 1,912 | | | | 1,701 | | | | 1,700 | | | | | | 1,907 | |
Securities gains, net | | | 2,286 | | | | 2,994 | | | | 317 | | | | 775 | | | | | | 938 | |
Other | | | 2,092 | | | | 2,111 | | | | 4,513 | | | | 4,300 | | | | | | 3,576 | |
Total noninterest income | | $ | 29,950 | | | $ | 35,069 | | | $ | 33,898 | | | $ | 34,642 | | | | | $ | 31,722 | |
| | | | | | | | | | | | | | | | | | | | | | |
Table 9 – Noninterest Expenses
| | For the Three Months Ended | |
(In thousands) | | June 30, 2020 | | | March 31, 2020 | | | September 30, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Noninterest Expenses | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | $ | 47,158 | | | $ | 48,807 | | | $ | 54,840 | | | $ | 51,904 | | | $ | 53,660 | |
Premises and equipment | | | 10,634 | | | | 10,808 | | | | 11,618 | | | | 10,913 | | | | 11,148 | |
Merger related expenses | | | — | | | | 1,282 | | | | 925 | | | | 1,010 | | | | 4,562 | |
Intangible asset amortization | | | 5,472 | | | | 5,592 | | | | 5,876 | | | | 6,025 | | | | 5,888 | |
Data processing | | | 3,084 | | | | 3,352 | | | | 3,343 | | | | 3,641 | | | | 3,435 | |
Software amortization | | | 4,036 | | | | 3,547 | | | | 3,427 | | | | 3,406 | | | | 3,184 | |
Consulting and professional fees | | | 3,009 | | | | 2,707 | | | | 3,552 | | | | 2,621 | | | | 1,899 | |
Loan related expenses | | | 735 | | | | 760 | | | | 654 | | | | (921 | ) | | | 1,740 | |
FDIC insurance | | | 3,939 | | | | 2,436 | | | | 1,245 | | | | 527 | | | | 1,870 | |
Communications | | | 1,002 | | | | 1,156 | | | | 1,236 | | | | 1,425 | | | | 1,457 | |
Advertising and public relations | | | 920 | | | | 1,464 | | | | 1,764 | | | | 1,368 | | | | 1,104 | |
Legal expenses | | | 579 | | | | 411 | | | | 306 | | | | 500 | | | | 645 | |
Other | | | 8,052 | | | | 11,636 | | | | 11,732 | | | | 11,864 | | | | 9,938 | |
Noninterest expenses excluding goodwill impairment charge | | | 88,620 | | | | 93,958 | | | | 100,519 | | | | 94,283 | | | | 100,529 | |
Goodwill impairment charge | | | — | | | | 443,695 | | | | — | | | | — | | | | — | |
Total noninterest expenses | | $ | 88,620 | | | $ | 537,653 | | | $ | 100,519 | | | $ | 94,283 | | | $ | 100,529 | |
| | | | | | | | | | | | | | | | | | | | |
16
Table 10 – Reconciliation of Non-GAAP Financial Measures
| | As of and for the Three Months Ended | |
(In thousands, except share and per share data) | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Efficiency ratio | | | | | | | | | | | | | | | | | | | | |
Noninterest expenses (numerator) | | $ | 88,620 | | | $ | 537,653 | | | $ | 100,519 | | | $ | 94,283 | | | $ | 100,529 | |
Net interest income | | $ | 154,714 | | | $ | 153,468 | | | $ | 160,911 | | | $ | 160,187 | | | $ | 160,787 | |
Noninterest income | | | 29,950 | | | | 35,069 | | | | 33,898 | | | | 34,642 | | | | 31,722 | |
Operating revenue (denominator) | | $ | 184,664 | | | $ | 188,537 | | | $ | 194,809 | | | $ | 194,829 | | | $ | 192,509 | |
Efficiency ratio | | | 47.99 | % | | | 285.17 | % | | | 51.60 | % | | | 48.39 | % | | | 52.22 | % |
Adjusted efficiency ratio | | | | | | | | | | | | | | | | | | | | |
Noninterest expenses | | $ | 88,620 | | | $ | 537,653 | | | $ | 100,519 | | | $ | 94,283 | | | $ | 100,529 | |
Less: non-cash goodwill impairment charge | | | — | | | | 443,695 | | | | — | | | | — | | | | — | |
Less: merger related expenses | | | — | | | | 1,282 | | | | 925 | | | | 1,010 | | | | 4,562 | |
Less: pension plan termination expense | | | — | | | | — | | | | 1,225 | | | | — | | | | — | |
Less: expenses related to COVID-19 pandemic | | | 1,205 | | | | 122 | | | | — | | | | — | | | | — | |
Less: other non-routine expenses(1) | | | — | | | | — | | | | — | | | | — | | | | — | |
Adjusted noninterest expenses (numerator) | | $ | 87,415 | | | $ | 92,554 | | | $ | 98,369 | | | $ | 93,273 | | | $ | 95,967 | |
Net interest income | | $ | 154,714 | | | $ | 153,468 | | | $ | 160,911 | | | $ | 160,187 | | | $ | 160,787 | |
Noninterest income | | | 29,950 | | | | 35,069 | | | | 33,898 | | | | 34,642 | | | | 31,722 | |
Plus: revaluation of receivable from sale of insurance assets | | | — | | | | — | | | | — | | | | — | | | | 2,000 | |
Less: gain on sale of acquired loans | | | — | | | | — | | | | 1,263 | | | | — | | | | 1,514 | |
Less: securities gains, net | | | 2,286 | | | | 2,994 | | | | 317 | | | | 775 | | | | 938 | |
Adjusted noninterest income | | | 27,664 | | | | 32,075 | | | | 32,318 | | | | 33,867 | | | | 31,270 | |
Adjusted operating revenue (denominator) | | $ | 182,378 | | | $ | 185,543 | | | $ | 193,229 | | | $ | 194,054 | | | $ | 192,057 | |
Adjusted efficiency ratio | | | 47.93 | % | | | 49.88 | % | | | 50.91 | % | | | 48.07 | % | | | 49.97 | % |
Tangible common equity ratio | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | $ | 2,045,480 | | | $ | 2,113,543 | | | $ | 2,460,846 | | | $ | 2,475,944 | | | $ | 2,426,072 | |
Less: goodwill and other intangible assets, net | | | (137,318 | ) | | | (142,782 | ) | | | (590,949 | ) | | | (597,488 | ) | | | (595,605 | ) |
Tangible common shareholders’ equity | | | 1,908,162 | | | | 1,970,761 | | | | 1,869,897 | | | | 1,878,456 | | | | 1,830,467 | |
Total assets | | | 18,857,753 | | | | 17,237,918 | | | | 17,800,229 | | | | 17,855,946 | | | | 17,504,005 | |
Less: goodwill and other intangible assets, net | | | (137,318 | ) | | | (142,782 | ) | | | (590,949 | ) | | | (597,488 | ) | | | (595,605 | ) |
Tangible assets | | $ | 18,720,435 | | | $ | 17,095,136 | | | $ | 17,209,280 | | | $ | 17,258,458 | | | $ | 16,908,400 | |
Tangible common equity ratio | | | 10.19 | % | | | 11.53 | % | | | 10.87 | % | | | 10.88 | % | | | 10.83 | % |
Tangible book value per share | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | $ | 2,045,480 | | | $ | 2,113,543 | | | $ | 2,460,846 | | | $ | 2,475,944 | | | $ | 2,426,072 | |
Less: goodwill and other intangible assets, net | | | (137,318 | ) | | | (142,782 | ) | | | (590,949 | ) | | | (597,488 | ) | | | (595,605 | ) |
Tangible common shareholders’ equity | | $ | 1,908,162 | | | $ | 1,970,761 | | | $ | 1,869,897 | | | $ | 1,878,456 | | | $ | 1,830,467 | |
Common shares outstanding | | | 125,930,741 | | | | 125,897,827 | | | | 127,597,569 | | | | 128,173,765 | | | | 128,798,549 | |
Tangible book value per share | | $ | 15.15 | | | $ | 15.65 | | | $ | 14.65 | | | $ | 14.66 | | | $ | 14.21 | |
| | | | | | | | | | | | | | | | | | | | |
17
Table 10 (Continued) – Reconciliation of Non-GAAP Measures
| | As of and for the Three Months Ended | |
(In thousands, except share and per share data) | | June 30, 2020 | | | March 31, 2020 | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | |
Return on average tangible common equity | | | | | | | | | | | | | | | | | | | | |
Average common equity | | $ | 2,118,796 | | | $ | 2,446,810 | | | $ | 2,471,398 | | | $ | 2,447,189 | | | $ | 2,331,855 | |
Less: average intangible assets | | | (140,847 | ) | | | (584,513 | ) | | | (595,439 | ) | | | (598,602 | ) | | | (597,772 | ) |
Average tangible common shareholders’ equity | | $ | 1,977,949 | | | $ | 1,862,297 | | | $ | 1,875,959 | | | $ | 1,848,587 | | | $ | 1,734,083 | |
Net (loss) income | | $ | (56,114 | ) | | $ | (399,311 | ) | | $ | 51,426 | | | $ | 43,986 | | | $ | 48,346 | |
Plus: non-cash goodwill impairment charge, net of tax | | | — | | | | 412,918 | | | | — | | | | — | | | | — | |
Plus: intangible asset amortization, net of tax | | | 4,174 | | | | 4,261 | | | | 4,477 | | | | 4,620 | | | | 4,515 | |
Tangible net income | | $ | (51,940 | ) | | $ | 17,868 | | | $ | 55,903 | | | $ | 48,606 | | | $ | 52,861 | |
Return on average tangible common equity(1) | | | (10.56 | )% | | | 3.86 | % | | | 11.82 | % | | | 10.43 | % | | | 12.23 | % |
Adjusted return on average tangible common equity | | | | | | | | | | | | | | | | | | | | |
Average tangible common shareholders’ equity | | $ | 1,977,949 | | | $ | 1,862,297 | | | $ | 1,875,959 | | | $ | 1,848,587 | | | $ | 1,734,083 | |
Tangible net income | | $ | (51,940 | ) | | $ | 17,868 | | | $ | 55,903 | | | $ | 48,606 | | | $ | 52,861 | |
Non-routine items: | | | | | | | | | | | | | | | | | | | | |
Plus: merger related expenses | | | — | | | | 1,282 | | | | 925 | | | | 1,010 | | | | 4,562 | |
Plus: pension plan termination expense | | | — | | | | — | | | | 1,225 | | | | — | | | | — | |
Plus: expenses related to COVID-19 pandemic | | | 1,205 | | | | 122 | | | | — | | | | — | | | | — | |
Plus: revaluation of receivable from sale of insurance assets | | | — | | | | — | | | | — | | | | — | | | | 2,000 | |
Less: gain on sale of acquired loans | | | — | | | | — | | | | 1,263 | | | | — | | | | 1,514 | |
Less: securities gains (losses), net | | | 2,286 | | | | 2,994 | | | | 317 | | | | 775 | | | | 938 | |
Less: income tax effect of tax deductible non-routine items | | | (256 | ) | | | (464 | ) | | | 48 | | | | 55 | | | | 958 | |
Total non-routine items, after tax | | | (825 | ) | | | (1,126 | ) | | | 522 | | | | 180 | | | | 3,152 | |
Adjusted tangible net income | | $ | (52,765 | ) | | $ | 16,742 | | | $ | 56,425 | | | $ | 48,786 | | | $ | 56,012 | |
Adjusted return on average tangible common equity(1) | | | (10.73 | )% | | | 3.62 | % | | | 11.93 | % | | | 10.47 | % | | | 12.96 | % |
Adjusted return on average assets | | | | | | | | | | | | | | | | | | | | |
Average assets | | $ | 18,500,600 | | | $ | 17,694,018 | | | $ | 17,843,383 | | | $ | 17,621,163 | | | $ | 17,653,511 | |
Net (loss) income | | $ | (56,114 | ) | | $ | (399,311 | ) | | $ | 51,426 | | | $ | 43,986 | | | $ | 48,346 | |
Return on average assets | | | (1.22 | )% | | | (9.08 | )% | | | 1.14 | % | | | 0.99 | % | | | 1.10 | % |
Net (loss) income | | $ | (56,114 | ) | | $ | (399,311 | ) | | $ | 51,426 | | | $ | 43,986 | | | $ | 48,346 | |
Plus: non-cash goodwill impairment charge, net of tax | | | — | | | | 412,918 | | | | — | | | | — | | | | — | |
Total non-routine items, after tax | | | (825 | ) | | | (1,126 | ) | | | 522 | | | | 180 | | | | 3,152 | |
Adjusted net income | | $ | (56,939 | ) | | $ | 12,481 | | | $ | 51,948 | | | $ | 44,166 | | | $ | 51,497 | |
Adjusted return on average assets(1) | | | (1.24 | )% | | | 0.28 | % | | | 1.16 | % | | | 0.99 | % | | | 1.17 | % |
Adjusted diluted earnings per share | | | | | | | | | | | | | | | | | | | | |
Diluted weighted average common shares outstanding | | | 125,924,652 | | | | 126,630,446 | | | | 128,003,089 | | | | 128,515,274 | | | | 129,035,553 | |
Net income allocated to common stock | | $ | (56,114 | ) | | $ | (399,311 | ) | | $ | 51,248 | | | $ | 43,849 | | | $ | 48,176 | |
Plus: non-cash goodwill impairment, net of tax | | | — | | | | 412,918 | | | | — | | | | — | | | | — | |
Total non-routine items, after tax | | | (825 | ) | | | (1,126 | ) | | | 522 | | | | 180 | | | | 3,152 | |
Adjusted net income allocated to common stock | | $ | (56,939 | ) | | $ | 12,481 | | | $ | 51,770 | | | $ | 44,029 | | | $ | 51,328 | |
Adjusted diluted earnings per share | | $ | (0.45 | ) | | $ | 0.10 | | | $ | 0.40 | | | $ | 0.34 | | | $ | 0.40 | |
Adjusted pre-tax, pre-provision net revenue | | | | | | | | | | | | | | | | | | | | |
Income before taxes | | $ | (62,767 | ) | | $ | (432,545 | ) | | $ | 67,164 | | | $ | 56,782 | | | $ | 63,053 | |
Plus: Provision for credit losses | | | 158,811 | | | | 83,429 | | | | 27,126 | | | | 43,764 | | | | 28,927 | |
Plus: non-cash goodwill impairment | | | — | | | | 443,695 | | | | — | | | | — | | | | — | |
Plus: Total non-routine items before taxes | | | (1,081 | ) | | | (1,590 | ) | | | 570 | | | | 235 | | | | 4,110 | |
Adjusted pre-tax, pre-provision net revenue | | $ | 94,963 | | | $ | 92,989 | | | $ | 94,860 | | | $ | 100,781 | | | $ | 96,090 | |
| | | | | | | | | | | | | | | | | | | | |
18
