Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT
Kristine D. Brenner
Director of Investor Relations
(810) 257-2506
kristine.brenner@citizensbanking.com
Citizens Republic Bancorp Reports Third Quarter Earnings
| • | Net income attributable to common shareholders was $27 million, or $0.68 per share for the third quarter, which includes a $13 million income tax benefit |
| • | Earnings were driven by net interest margin improvement, solid core banking fee income and continued control of expenses |
| • | Total portfolio loans increased for the first time in three years driven by 13% growth in commercial and industrial (“C&I”) loans over last quarter |
| • | Positive credit trends continue |
FLINT, MICHIGAN, October 27, 2011 —Citizens Republic Bancorp, Inc. (Nasdaq: CRBC) announced net income attributable to common shareholders of $27.2 million, or $0.68 per diluted share for the three months ended September 30, 2011, compared to $18.5 million, or $0.46 per diluted share for last quarter. Citizens recorded a net loss attributable to common shareholders of $67.9 million, or $1.72 per diluted share for the third quarter of last year. For the first nine months of this year, Citizens recorded a net loss attributable to common shareholders of $28.7 million, or $0.73 per diluted share, compared to $202.9 million, or $5.15 per diluted share for the same period of 2010. All prior year shares outstanding and per share calculations have been adjusted to reflect the 1 for 10 reverse stock split that became effective July 1, 2011.
“We are very pleased to report another quarter of solid profitability. Our profits this quarter were driven by loan growth, maintaining fee income, continued expense management and margin expansion. Results over the past two quarters reflect our continued success in executing our strategies,” commented Cathleen Nash, president and chief executive officer.
Balance Sheet
Total assets at September 30, 2011 were $9.6 billion, an increase of $104.6 million or 1% from last quarter. Total portfolio loans were $5.7 billion, a modest increase over last quarter. Portfolio loan growth outpaced runoff for the first quarter in three years.
Core deposits, which exclude all time deposits, totaled $5.2 billion at September 30, 2011, an increase of $222.5 million or 4% from last quarter, primarily a result of seasonal increases in public funds deposits. Core deposits were up $269.9 million or 5% over September 30 of last year, reflecting our focus on generating and growing core deposit relationships. Time deposits decreased $127.3 million, or 5% from last quarter and $830.9 million or 26% from September 30 of last year, continuing the trend following our strategic focus on reducing high cost single service and brokered time deposits.
Other interest-bearing liabilities, which include federal funds purchased and securities sold under agreements to repurchase, other short-term borrowings, and long-term debt, totaled $896.9 million at September 30, 2011, a decrease of $28.1 million or 3% from the end of last quarter and a decrease of $331.5 million or 27% from September 30 of last year, as the result of a reduction in wholesale funding.
Capital
Citizens continues to maintain a strong capital position, and its regulatory capital ratios are above “well-capitalized” standards, as evidenced by the following key capital ratios.
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Capital Ratios
| Regulatory Minimum for “Well- Capitalized” | September 30, 2011 | June 30, 2011 | September 30, 2010 | Excess Capital over Minimum (in thousands) | ||||||||||||||||
Leverage ratio | 5.00 | % | 8.21 | % | 7.83 | % | 8.50 | % | $ | 296,202 | ||||||||||
Tier 1 capital ratio | 6.00 | 12.81 | 12.43 | 12.41 | 402,750 | |||||||||||||||
Total capital ratio | 10.00 | 14.14 | 13.77 | 13.80 | 245,070 | |||||||||||||||
Tier 1 common equity (non-GAAP) | 6.77 | 6.36 | 7.50 | |||||||||||||||||
Tangible equity to tangible assets (non-GAAP) | 7.36 | 7.12 | 8.03 | |||||||||||||||||
Tangible common equity to tangible assets (non-GAAP) | 4.31 | 4.05 | 5.34 | |||||||||||||||||
Net Interest Income and Margin
Net interest margin increased to 3.63% in the third quarter, up 7 basis points from last quarter and 31 basis points from the third quarter of last year. These increases were due to declining deposit costs, reductions in high-cost funding, lower levels of non-performing assets, and a reduction in excess cash and money market investments. Year to date, net interest margin increased 30 basis points over last year as a result of the same factors.
Net interest income was $78.8 million for the third quarter, an increase of $1.2 million from last quarter due to the higher net interest margin. Net interest income decreased $2.7 million from the third quarter of last year due to a reduction in average earning assets, which was partially offset by higher net interest margin.
Credit Quality
Citizens’ positive credit trends continued this quarter. Credit quality continues to benefit from the emphasis we have placed on improving the risk characteristics in our portfolios.
| • | Total delinquencies decreased to $49.6 million at the end of the quarter, representing 0.87% of portfolio loans. |
| • | Nonperforming assets declined to $149.1 million, representing a 2% decrease from the end of last quarter and a decrease of 66% from September 30 of last year. |
| • | Net charge-offs decreased to $33.4 million, compared to $35.4 million last quarter and $87.4 million in the third quarter of last year. More than half of this quarters’ charge-offs were related to moving non-performing residential mortgage loans to held for sale. |
| • | The provision for loan losses was $17.5 million in the third quarter, compared with $17.6 million last quarter and $89.6 million in the third quarter of last year. |
| • | The allowance for loan losses was $190.4 million or 169% of nonperforming portfolio loans |
Noninterest Income and Expense
Noninterest income was $24.4 million for the third quarter, an increase of $1.1 million or 5% from last quarter. The increase over the second quarter benefited primarily from a seasonal increase in service charges and gains from investment securities and loans held for sale. Compared to the third quarter last year, noninterest income decreased $1.5 million or 6% primarily due to credit and market valuation adjustments recorded in other income partially offset by gains on loans held for sale.
Noninterest expense was $65.4 million for the third quarter, a decrease of $4.0 million or 6% from last quarter. The decrease was primarily a result of lower than expected third quarter FDIC premiums, lower salary expense and credit costs. Compared to the third quarter of last year, noninterest expense decreased $9.3 million or 12%, reflecting Citizens’ continued focus on improving efficiencies through better vendor management, and reductions in credit costs, salaries expense, and FDIC insurance.
The income tax benefit for the third quarter of 2011 was $12.6 million, compared with a benefit of $10.3 million for the second quarter of 2011 and a tax expense of $5.6 million for the third quarter of 2010. The income tax benefit in the third quarter of 2011 was largely due to Citizens recording a receivable as a result of a revocation of a tax election.
Conference Call
Citizens’ senior management will review the quarter’s results in a conference call at10:00 a.m. ET on Friday, October 28, 2011.A live audio webcast is available on Citizens’ investor relations page at www.citizensbanking.com or by calling (800) 862-9098 (conference ID: Citizens Republic). To listen to the conference call, please connect approximately 10 minutes prior to the scheduled conference time.
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A recording will be available approximately two hours after the completion of the conference call at www.citizensbanking.com, where it will be archived for 90 days.
Use of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this release includes non-GAAP financial measures such as tangible equity to tangible assets ratio, tangible common equity to tangible assets ratio, Tier 1 common equity ratio, pre-tax pre-provision profit, net interest margin, and the efficiency ratio. Citizens believes these non-GAAP financial measures provide additional information that is useful to investors in understanding the underlying performance of Citizens, its business, and performance trends and such measures help facilitate performance comparisons with others in the banking industry. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Readers should be aware of these limitations and should be cautious as to their use of such measures. To mitigate these limitations, Citizens has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety to ensure that Citizens’ performance is properly reflected to facilitate consistent period-to-period comparisons. Although Citizens believes the above non-GAAP financial measures disclosed in this release enhance investors’ understanding of its business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures. See our related Form 8-K for further discussion regarding these non-GAAP financial measures.
Corporate Profile
Citizens Republic Bancorp, Inc. is a diversified financial services company providing a wide range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens serves communities in Michigan, Ohio, and Wisconsin with 219 offices and 249 ATMs. Citizens is the largest bank holding company headquartered in Michigan with roots dating back to 1871 and is the 57th largest bank holding company headquartered in the United States. More information about Citizens is available at www.citizensbanking.com.
Safe Harbor Statement
Discussions and statements in this release that are not statements of historical fact, including without limitation, statements that include terms such as “will,” “may,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” and “plan,” and statements regarding Citizens’ future financial and operating results, plans, objectives, expectations and intentions, are forward-looking statements that involve risks and uncertainties, many of which are beyond Citizens’ control or are subject to change. No forward-looking statement is a guarantee of future performance and actual results could differ materially.
Factors that could cause or contribute to actual results differing materially from Citizens’ expectations include the risks and uncertainties detailed from time to time in Citizens’ annual and quarterly filings with the SEC, which are available at the SEC’s web site www.sec.gov. Other factors not currently anticipated may also materially and adversely affect Citizens’ results of operations, cash flows, financial position and prospects. There can be no assurance that future results will meet expectations. While Citizens believes that the forward-looking statements in this release are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. Citizens does not undertake, and expressly disclaims, any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
Discontinued Operations
As a result of the sale of Citizens’ wholly-owned subsidiary, F&M Bank - Iowa, during the second quarter of 2010, the financial condition and operating results for this subsidiary have been segregated from the financial condition and operating results of Citizens’ continuing operations throughout this release and, as such, are presented as a discontinued operation. While all prior periods have been revised retrospectively to align with this treatment, these changes do not affect Citizens’ reported consolidated financial condition or net income for any of the prior periods.
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Consolidated Balance Sheets (Unaudited)
Citizens Republic Bancorp, Inc.
| (in thousands) | September 30, 2011 | June 30, 2011 | September 30, 2010 | |||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 147,418 | $ | 145,126 | $ | 142,025 | ||||||
Money market investments | 283,018 | 176,847 | 530,169 | |||||||||
Investment Securities: | ||||||||||||
Securities available for sale, at fair value | 1,307,977 | 1,368,530 | 2,258,452 | |||||||||
Securities held to maturity, at amortized cost (fair value of $1,491,048, $1,489,461 and $118,155, respectively) | 1,454,873 | 1,482,787 | 112,029 | |||||||||
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Total investment securities | 2,762,850 | 2,851,317 | 2,370,481 | |||||||||
FHLB and Federal Reserve stock | 123,696 | 125,635 | 157,304 | |||||||||
Portfolio loans: | ||||||||||||
Commercial and industrial | 1,531,492 | 1,349,803 | 1,657,383 | |||||||||
Commercial real estate | 1,643,901 | 1,722,242 | 2,503,685 | |||||||||
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Total commercial | 3,175,393 | 3,072,045 | 4,161,068 | |||||||||
Residential mortgage | 654,561 | 708,164 | 800,521 | |||||||||
Direct consumer | 954,831 | 978,319 | 1,091,704 | |||||||||
Indirect consumer | 887,542 | 869,109 | 834,712 | |||||||||
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Total portfolio loans | 5,672,327 | 5,627,637 | 6,888,005 | |||||||||
Less: Allowance for loan losses | (190,354 | ) | (206,292 | ) | (324,046 | ) | ||||||
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Net portfolio loans | 5,481,973 | 5,421,345 | 6,563,959 | |||||||||
Loans held for sale | 30,221 | 19,515 | 52,191 | |||||||||
Premises and equipment | 98,954 | 100,596 | 106,272 | |||||||||
Goodwill | 318,150 | 318,150 | 318,150 | |||||||||
Other intangible assets | 8,116 | 8,848 | 11,306 | |||||||||
Bank owned life insurance | 219,248 | 218,854 | 218,056 | |||||||||
Other assets | 126,544 | 109,397 | 168,991 | |||||||||
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Total assets | $ | 9,600,188 | $ | 9,495,630 | $ | 10,638,904 | ||||||
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Liabilities | ||||||||||||
Noninterest-bearing deposits | $ | 1,621,451 | $ | 1,486,970 | $ | 1,297,579 | ||||||
Interest-bearing demand deposits | 945,458 | 917,522 | 947,126 | |||||||||
Savings deposits | 2,652,267 | 2,592,176 | 2,704,589 | |||||||||
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Core deposits | 5,219,176 | 4,996,668 | 4,949,294 | |||||||||
Time deposits | 2,320,728 | 2,448,035 | 3,151,652 | |||||||||
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Total deposits | 7,539,904 | 7,444,703 | 8,100,946 | |||||||||
Federal funds purchased and securities sold under agreements to repurchase | 40,599 | 43,244 | 42,334 | |||||||||
Other short-term borrowings | 640 | 680 | 710 | |||||||||
Other liabilities | 154,232 | 146,169 | 152,531 | |||||||||
Long-term debt | 855,670 | 881,112 | 1,185,322 | |||||||||
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Total liabilities | 8,591,045 | 8,515,908 | 9,481,843 | |||||||||
Shareholders’ Equity | ||||||||||||
Preferred stock - no par value | 283,360 | 281,642 | 276,676 | |||||||||
Common stock - no par value | 1,433,765 | 1,433,094 | 1,431,314 | |||||||||
Retained deficit | (706,907 | ) | (734,091 | ) | (566,543 | ) | ||||||
Accumulated other comprehensive (loss) income | (1,075 | ) | (923 | ) | 15,614 | |||||||
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Total shareholders’ equity | 1,009,143 | 979,722 | 1,157,061 | |||||||||
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Total liabilities and shareholders’ equity | $ | 9,600,188 | $ | 9,495,630 | $ | 10,638,904 | ||||||
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Consolidated Statements of Operations (Unaudited)
Citizens Republic Bancorp, Inc.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 77,212 | $ | 96,080 | $ | 235,600 | $ | 298,802 | ||||||||
Interest and dividends on investment securities: | ||||||||||||||||
Taxable | 20,508 | 18,082 | 60,664 | 54,943 | ||||||||||||
Tax-exempt | 2,613 | 3,514 | 8,412 | 12,731 | ||||||||||||
Dividends on FHLB and Federal Reserve stock | 974 | 735 | 3,143 | 2,763 | ||||||||||||
Money market investments | 168 | 350 | 670 | 1,181 | ||||||||||||
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Total interest income | 101,475 | 118,761 | 308,489 | 370,420 | ||||||||||||
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Interest Expense | ||||||||||||||||
Deposits | 13,528 | 23,518 | 44,945 | 78,939 | ||||||||||||
Short-term borrowings | 20 | 20 | 57 | 61 | ||||||||||||
Long-term debt | 9,086 | 13,665 | 28,426 | 44,087 | ||||||||||||
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Total interest expense | 22,634 | 37,203 | 73,428 | 123,087 | ||||||||||||
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Net Interest Income | 78,841 | 81,558 | 235,061 | 247,333 | ||||||||||||
Provision for loan losses | 17,481 | 89,617 | 123,801 | 261,586 | ||||||||||||
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Net interest income (loss) after provision for loan losses | 61,360 | (8,059 | ) | 111,260 | (14,253 | ) | ||||||||||
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Noninterest Income | ||||||||||||||||
Service charges on deposit accounts | 10,362 | 10,609 | 29,544 | 30,264 | ||||||||||||
Trust fees | 3,622 | 3,837 | 11,356 | 11,468 | ||||||||||||
Mortgage and other loan income | 2,089 | 2,590 | 6,915 | 7,377 | ||||||||||||
Brokerage and investment fees | 1,188 | 1,060 | 3,829 | 3,315 | ||||||||||||
ATM network user fees | 1,993 | 1,864 | 5,674 | 5,232 | ||||||||||||
Bankcard fees | 2,482 | 2,261 | 7,188 | 6,534 | ||||||||||||
Net gains (losses) on loans held for sale | 1,952 | (1,441 | ) | 2,025 | (17,548 | ) | ||||||||||
Investment securities gains (losses) | 3 | — | (1,373 | ) | 14,067 | |||||||||||
Other income | 736 | 5,176 | 5,737 | 9,922 | ||||||||||||
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Total noninterest income | 24,427 | 25,956 | 70,895 | 70,631 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 30,280 | 32,740 | 92,563 | 94,090 | ||||||||||||
Occupancy | 6,125 | 6,529 | 19,734 | 20,129 | ||||||||||||
Professional services | 2,394 | 2,737 | 7,020 | 7,605 | ||||||||||||
Equipment | 2,918 | 3,076 | 8,811 | 9,127 | ||||||||||||
Data processing services | 3,823 | 4,702 | 12,422 | 14,098 | ||||||||||||
Advertising and public relations | 2,179 | 1,605 | 4,550 | 5,018 | ||||||||||||
Postage and delivery | 1,142 | 1,187 | 3,378 | 3,496 | ||||||||||||
Other loan expenses | 3,941 | 4,355 | 12,510 | 14,880 | ||||||||||||
Losses on other real estate (ORE) | 1,210 | 1,967 | 11,687 | 12,508 | ||||||||||||
ORE expenses | 529 | 1,327 | 3,326 | 3,317 | ||||||||||||
Intangible asset amortization | 732 | 908 | 2,338 | 3,072 | ||||||||||||
Other expense | 10,138 | 13,607 | 38,172 | 42,513 | ||||||||||||
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Total noninterest expense | 65,411 | 74,740 | 216,511 | 229,853 | ||||||||||||
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Income (Loss) from Continuing Operations Before Income Taxes | 20,376 | (56,843 | ) | (34,356 | ) | (173,475 | ) | |||||||||
Income tax (benefit) provision from continuing operations | (12,568 | ) | 5,628 | (22,779 | ) | 9,475 | ||||||||||
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Income (Loss) from Continuing Operations | 32,944 | (62,471 | ) | (11,577 | ) | (182,950 | ) | |||||||||
Discontinued operations: | ||||||||||||||||
Loss from discontinued operations (net of income tax) | — | — | — | (3,822 | ) | |||||||||||
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Net Income (Loss) | 32,944 | (62,471 | ) | (11,577 | ) | (186,772 | ) | |||||||||
Dividend on redeemable preferred stock | (5,761 | ) | (5,451 | ) | (17,088 | ) | (16,139 | ) | ||||||||
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Net Income (Loss) Attributable to Common Shareholders | $ | 27,183 | $ | (67,922 | ) | $ | (28,665 | ) | $ | (202,911 | ) | |||||
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Income (Loss) Per Share from Continuing Operations | ||||||||||||||||
Basic | $ | 0.68 | $ | (1.72 | ) | $ | (0.73 | ) | $ | (5.05 | ) | |||||
Diluted | 0.68 | (1.72 | ) | (0.73 | ) | (5.05 | ) | |||||||||
Loss Per Share from Discontinued Operations | ||||||||||||||||
Basic | $ | — | $ | — | $ | — | $ | (0.10 | ) | |||||||
Diluted | — | — | — | (0.10 | ) | |||||||||||
Net Income (Loss) Per Common Share: | ||||||||||||||||
Basic | $ | 0.68 | $ | (1.72 | ) | $ | (0.73 | ) | $ | (5.15 | ) | |||||
Diluted | 0.68 | (1.72 | ) | (0.73 | ) | (5.15 | ) | |||||||||
Average Common Shares Outstanding: | ||||||||||||||||
Basic | 39,433 | 39,402 | 39,418 | 39,388 | ||||||||||||
Diluted | 39,433 | 39,402 | 39,418 | 39,388 | ||||||||||||
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Selected Quarterly Information (Unaudited)
| Three Months Ended | ||||||||||||||||||||
(in thousands, except per share amounts) | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||
Summary of Operations | ||||||||||||||||||||
Net interest income | $ | 78,841 | $ | 77,606 | $ | 78,614 | $ | 81,731 | $ | 81,558 | ||||||||||
Provision for loan losses | 17,481 | 17,596 | 88,724 | 131,296 | 89,617 | |||||||||||||||
Noninterest income(1) | 24,427 | 23,325 | 23,143 | 24,028 | 25,956 | |||||||||||||||
Noninterest expense | 65,411 | 69,444 | 81,656 | 77,234 | 74,740 | |||||||||||||||
Income tax (benefit) provision from continuing operations | (12,568 | ) | (10,266 | ) | 55 | 3,383 | 5,628 | |||||||||||||
Net income (loss) | 32,944 | 24,157 | (68,678 | ) | (106,154 | ) | (62,471 | ) | ||||||||||||
Net income (loss) attributable to common shareholders(2) | 27,183 | 18,456 | (74,305 | ) | (111,699 | ) | (67,922 | ) | ||||||||||||
Taxable equivalent adjustment | 1,827 | 1,884 | 2,102 | 2,247 | 2,372 | |||||||||||||||
Per Common Share Data(3) | ||||||||||||||||||||
Net income (loss): | ||||||||||||||||||||
Basic | $ | 0.68 | $ | 0.46 | $ | (1.89 | ) | $ | (2.83 | ) | $ | (1.72 | ) | |||||||
Diluted | 0.68 | 0.46 | (1.89 | ) | (2.83 | ) | (1.72 | ) | ||||||||||||
Common book value | 18.03 | 17.34 | 16.73 | 18.47 | 22.17 | |||||||||||||||
Tangible book value (non-GAAP) | 16.96 | 16.22 | 15.53 | 17.20 | 20.84 | |||||||||||||||
Tangible common book value (non-GAAP) | 9.92 | 9.22 | 8.49 | 10.19 | 13.87 | |||||||||||||||
Shares outstanding, end of period (000)(4) | 40,256 | 40,252 | 39,778 | 39,717 | 39,707 | |||||||||||||||
At Period End | ||||||||||||||||||||
Assets | $ | 9,600,188 | $ | 9,495,630 | $ | 9,724,113 | $ | 9,965,645 | $ | 10,638,904 | ||||||||||
Earning assets | 8,824,183 | 8,755,838 | 9,009,704 | 9,302,825 | 9,931,806 | |||||||||||||||
Portfolio loans | 5,672,327 | 5,627,637 | 5,704,198 | 6,216,602 | 6,888,005 | |||||||||||||||
Allowance for loan losses | 190,354 | 206,292 | 224,117 | 296,031 | 324,046 | |||||||||||||||
Deposits | 7,539,904 | 7,444,703 | 7,691,505 | 7,726,834 | 8,100,946 | |||||||||||||||
Long-term debt | 855,670 | 881,112 | 906,629 | 1,032,689 | 1,185,322 | |||||||||||||||
Shareholders’ equity | 1,009,143 | 979,722 | 945,401 | 1,011,731 | 1,157,061 | |||||||||||||||
Average for the Quarter | ||||||||||||||||||||
Assets | $ | 9,596,275 | $ | 9,664,939 | $ | 9,898,921 | $ | 10,468,318 | $ | 10,803,242 | ||||||||||
Earning assets | 8,856,072 | 8,942,348 | 9,231,042 | 9,768,828 | 10,064,818 | |||||||||||||||
Portfolio loans | 5,663,058 | 5,668,752 | 6,051,407 | 6,682,474 | 7,059,144 | |||||||||||||||
Allowance for loan losses | 206,119 | 223,922 | 295,232 | 323,742 | 321,865 | |||||||||||||||
Deposits | 7,546,615 | 7,605,707 | 7,729,960 | 7,964,849 | 8,197,765 | |||||||||||||||
Long-term debt | 862,479 | 905,902 | 971,076 | 1,159,760 | 1,202,901 | |||||||||||||||
Shareholders’ equity | 991,602 | 963,932 | 1,002,290 | 1,145,198 | 1,215,087 | |||||||||||||||
Financial Ratios (annualized)(5) | ||||||||||||||||||||
Return on average assets | 1.36 | % | 1.00 | % | (2.81 | )% | (4.02 | )% | (2.29 | )% | ||||||||||
Return on average shareholders’ equity | 13.18 | 10.05 | (27.79 | ) | (36.78 | ) | (20.40 | ) | ||||||||||||
Average shareholders’ equity / average assets | 10.33 | 9.97 | 10.13 | 10.94 | 11.25 | |||||||||||||||
Net interest margin (FTE)(6) | 3.63 | 3.56 | 3.53 | 3.42 | 3.32 | |||||||||||||||
Efficiency ratio (non-GAAP)(7) | 62.24 | 66.90 | 78.33 | 71.39 | 68.02 | |||||||||||||||
Allowance for loan losses as a percent of portfolio loans | 3.36 | 3.67 | 3.93 | 4.76 | 4.70 | |||||||||||||||
Allowance for loan losses as a percent of nonperforming loans | 169.43 | 166.83 | 165.56 | 134.39 | 88.98 | |||||||||||||||
Allowance for loan losses as a percent of nonperforming assets | 127.63 | 135.65 | 119.18 | 103.30 | 73.10 | |||||||||||||||
Nonperforming loans as a percent of portfolio loans | 1.98 | 2.20 | 2.37 | 3.54 | 5.29 | |||||||||||||||
Nonperforming assets as a percent of portfolio loans plus ORAA(8) | 2.61 | 2.68 | 3.26 | 4.55 | 6.35 | |||||||||||||||
Nonperforming assets as a percent of total assets | 1.55 | 1.60 | 1.93 | 2.88 | 4.17 | |||||||||||||||
Net loans charged off as a percent of average portfolio loans (annualized) | 2.34 | 2.51 | 10.77 | 9.46 | 4.91 | |||||||||||||||
Leverage ratio | 8.21 | 7.83 | 7.39 | 7.71 | 8.50 | |||||||||||||||
Tier 1 capital ratio | 12.81 | 12.43 | 11.90 | 12.11 | 12.41 | |||||||||||||||
Total capital ratio | 14.14 | 13.77 | 13.24 | 13.51 | 13.80 | |||||||||||||||
| (1) | Noninterest income includes a loss on investment securities of $1.0 million in the second quarter of 2011. |
| (2) | Net income (loss) attributable to common shareholders includes a non-cash dividend to preferred shareholders of $5.8 million, $5.7 million and $5.6 million in the third, second and first quarters of 2011 and $5.5 million and $5.4 million in the fourth and third quarters of 2010. |
| (3) | Per common share data, as well as number of shares, were adjusted to reflect the 1 for 10 reverse stock split effective 7/1/11. |
| (4) | Includes participating shares which are restricted stock units and restricted shares. |
| (5) | Financial ratios are based upon continuing operations. |
| (6) | Net interest margin is presented on an annual basis, includes taxable equivalent adjustments to interest income and is based on a tax rate of 35%. |
| (7) | The efficiency ratio measures how efficiently a bank spends its revenues. The formula is: (noninterest expense - goodwill impairment)/(net interest income + taxable equivalent adjustment + total noninterest income - investment securities gains (losses)). |
| (8) | Other real estate assets acquired (“ORAA”) include loans held for sale. |
6
Loan Portfolios
(in thousands) | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||
Land hold | $ | 6,818 | $ | 7,426 | $ | 17,273 | $ | 28,259 | $ | 37,106 | ||||||||||
Land development | 22,232 | 22,507 | 22,744 | 34,800 | 73,813 | |||||||||||||||
Construction | 5,410 | 8,111 | 23,297 | 103,687 | 155,382 | |||||||||||||||
Income producing | 975,262 | 1,019,551 | 1,038,674 | 1,170,982 | 1,382,261 | |||||||||||||||
Owner-occupied | 634,179 | 664,647 | 692,296 | 783,007 | 855,123 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total commercial real estate | 1,643,901 | 1,722,242 | 1,794,284 | 2,120,735 | 2,503,685 | |||||||||||||||
Commercial and industrial | 1,531,492 | 1,349,803 | 1,353,167 | 1,474,227 | 1,657,383 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total commercial | 3,175,393 | 3,072,045 | 3,147,451 | 3,594,962 | 4,161,068 | |||||||||||||||
Residential mortgage | 654,561 | 708,164 | 727,304 | 756,245 | 800,521 | |||||||||||||||
Direct consumer | 954,831 | 978,319 | 1,006,424 | 1,045,530 | 1,091,704 | |||||||||||||||
Indirect consumer | 887,542 | 869,109 | 823,019 | 819,865 | 834,712 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total consumer | 2,496,934 | 2,555,592 | 2,556,747 | 2,621,640 | 2,726,937 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total portfolio loans | $ | 5,672,327 | $ | 5,627,637 | $ | 5,704,198 | $ | 6,216,602 | $ | 6,888,005 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Delinquency Rates By Loan Portfolio
| September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||||||||||||||||||||
30 to 89 days past due (in thousands) | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | ||||||||||||||||||||||||||||||
Land hold | $ | — | — | % | $ | 571 | 7.69 | % | $ | 509 | 2.95 | % | $ | 2,233 | 7.90 | % | $ | 28 | 0.08 | % | ||||||||||||||||||||
Land development | 216 | 0.97 | — | — | — | — | 216 | 0.62 | 4,456 | 6.04 | ||||||||||||||||||||||||||||||
Construction | — | — | 1,722 | 21.23 | — | — | 464 | 0.45 | 2,382 | 1.53 | ||||||||||||||||||||||||||||||
Income producing | 3,325 | 0.34 | 1,597 | 0.16 | 4,817 | 0.46 | 20,643 | 1.76 | 35,232 | 2.55 | ||||||||||||||||||||||||||||||
Owner-occupied | 5,817 | 0.92 | 6,524 | 0.98 | 1,981 | 0.29 | 14,705 | 1.88 | 18,302 | 2.14 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total commercial real estate | 9,358 | 0.57 | 10,414 | 0.60 | 7,307 | 0.41 | 38,261 | 1.80 | 60,400 | 2.41 | ||||||||||||||||||||||||||||||
Commercial and industrial | 2,594 | 0.17 | 3,637 | 0.27 | 6,177 | 0.46 | 9,058 | 0.61 | 23,762 | 1.43 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total commercial | 11,952 | 0.38 | 14,051 | 0.46 | 13,484 | 0.43 | 47,319 | 1.32 | 84,162 | 2.02 | ||||||||||||||||||||||||||||||
Residential mortgage | 9,079 | 1.39 | 11,564 | 1.63 | 10,279 | 1.41 | 15,389 | 2.03 | 14,592 | 1.82 | ||||||||||||||||||||||||||||||
Direct consumer | 18,629 | 1.95 | 20,393 | 2.08 | 17,210 | 1.71 | 22,379 | 2.14 | 20,479 | 1.88 | ||||||||||||||||||||||||||||||
Indirect consumer | 9,898 | 1.12 | 10,681 | 1.23 | 10,187 | 1.24 | 13,287 | 1.62 | 12,216 | 1.46 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total consumer | 37,606 | 1.51 | 42,638 | 1.67 | 37,676 | 1.47 | 51,055 | 1.95 | 47,287 | 1.73 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total delinquent loans | $ | 49,558 | 0.87 | $ | 56,689 | 1.01 | $ | 51,160 | 0.90 | $ | 98,374 | 1.58 | $ | 131,449 | 1.91 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
7
Nonperforming Assets
| September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||||||||||||||||||||
(in thousands) | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | $ | % of Portfolio | ||||||||||||||||||||||||||||||
Land hold | $ | 167 | 2.45 | % | $ | 167 | 2.25 | % | $ | 1,154 | 6.68 | % | $ | 3,250 | 11.50 | % | $ | 5,616 | 15.13 | % | ||||||||||||||||||||
Land development | 12 | 0.05 | 379 | 1.68 | 78 | 0.35 | 3,070 | 8.82 | 15,975 | 21.64 | ||||||||||||||||||||||||||||||
Construction | 257 | 4.76 | 559 | 6.89 | 395 | 1.70 | 7,472 | 7.21 | 27,431 | 17.65 | ||||||||||||||||||||||||||||||
Income producing | 23,227 | 2.38 | 20,180 | 1.98 | 28,250 | 2.72 | 62,021 | 5.30 | 147,715 | 10.69 | ||||||||||||||||||||||||||||||
Owner-occupied | 27,540 | 4.34 | 21,169 | 3.18 | 21,738 | 3.14 | 42,826 | 5.47 | 63,293 | 7.40 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total commercial real estate | 51,203 | 3.11 | 42,454 | 2.47 | 51,615 | 2.88 | 118,639 | 5.59 | 260,030 | 10.39 | ||||||||||||||||||||||||||||||
Commercial and industrial | 18,536 | 1.21 | 20,995 | 1.56 | 25,785 | 1.91 | 57,752 | 3.92 | 61,470 | 3.71 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total nonaccruing commercial | 69,739 | 2.20 | 63,449 | 2.07 | 77,400 | 2.46 | 176,391 | 4.91 | 321,500 | 7.73 | ||||||||||||||||||||||||||||||
Residential mortgage | 13,074 | 2.00 | 30,693 | 4.33 | 30,385 | 4.18 | 22,076 | 2.92 | 16,851 | 2.11 | ||||||||||||||||||||||||||||||
Direct consumer | 14,704 | 1.54 | 13,944 | 1.43 | 13,043 | 1.30 | 12,562 | 1.20 | 15,546 | 1.42 | ||||||||||||||||||||||||||||||
Indirect consumer | 1,256 | 0.14 | 1,281 | 0.15 | 1,169 | 0.14 | 1,279 | 0.16 | 1,694 | 0.20 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total nonaccruing consumer | 29,034 | 1.16 | 45,918 | 1.80 | 44,597 | 1.74 | 35,917 | 1.37 | 34,091 | 1.25 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total nonaccruing loans | 98,773 | 1.74 | 109,367 | 1.94 | 121,997 | 2.14 | 212,308 | 3.42 | 355,591 | 5.16 | ||||||||||||||||||||||||||||||
Loans 90+ days still accruing | 1,368 | 0.02 | 1,604 | 0.03 | 660 | 0.01 | 1,573 | 0.03 | 1,643 | 0.02 | ||||||||||||||||||||||||||||||
Restructured loans still accruing | 12,206 | 0.22 | 12,682 | 0.23 | 12,714 | 0.22 | 6,392 | 0.10 | 6,961 | 0.10 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total nonperforming portfolio loans | 112,347 | 1.98 | 123,653 | 2.20 | 135,371 | 2.37 | 220,273 | 3.54 | 364,195 | 5.29 | ||||||||||||||||||||||||||||||
Nonperforming held for sale | 20,134 | 11,395 | 30,359 | 24,073 | 38,351 | |||||||||||||||||||||||||||||||||||
Other repossessed assets acquired | 16,665 | 17,032 | 22,227 | 42,216 | 40,735 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total nonperforming assets | $ | 149,146 | $ | 152,080 | $ | 187,957 | $ | 286,562 | $ | 443,281 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Commercial inflows | $ | 23,901 | $ | 24,370 | $ | 29,486 | $ | 110,877 | $ | 95,611 | ||||||||||||||||||||||||||||||
Commercial outflows | (17,611 | ) | (38,321 | ) | (128,477 | ) | (255,986 | ) | (101,545 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net change | $ | 6,290 | $ | (13,951 | ) | $ | (98,991 | ) | $ | (145,109 | ) | $ | (5,934 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Net Charge-Offs
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||
| September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||||||||||||||||||||
(in thousands) | $ | % of Portfolio* | $ | % of Portfolio* | $ | % of Portfolio* | $ | % of Portfolio* | $ | % of Portfolio* | ||||||||||||||||||||||||||||||
Land hold | $ | — | — | % | $ | 4,719 | N/M | % | $ | 4,942 | N/M | % | $ | 5,238 | 73.54 | % | $ | 308 | 3.30 | % | ||||||||||||||||||||
Land development | 43 | 0.76 | 38 | 0.68 | 4,439 | 79.15 | 19,652 | N/M | 8,985 | 48.29 | ||||||||||||||||||||||||||||||
Construction | (5 | ) | (0.34 | ) | (1 | ) | (0.04 | ) | 5,578 | 97.09 | 10,046 | 38.44 | 433 | 1.10 | ||||||||||||||||||||||||||
Income producing | 3,156 | 1.28 | 8,228 | 3.24 | 77,589 | 30.30 | 64,159 | 21.74 | 30,835 | 8.85 | ||||||||||||||||||||||||||||||
Owner-occupied | 2,129 | 1.33 | 3,149 | 1.90 | 25,260 | 14.80 | 18,078 | 9.16 | 4,770 | 2.21 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total commercial real estate | 5,323 | 1.28 | 16,133 | 3.76 | 117,808 | 26.63 | 117,173 | 21.92 | 45,331 | 7.18 | ||||||||||||||||||||||||||||||
Commercial and industrial | 1,225 | 0.32 | 7,176 | 2.13 | 32,013 | 9.59 | 26,055 | 7.01 | 6,734 | 1.62 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total commercial | 6,548 | 0.82 | 23,309 | 3.04 | 149,821 | 19.30 | 143,228 | 15.81 | 52,065 | 4.97 | ||||||||||||||||||||||||||||||
Residential mortgage | 18,364 | 11.13 | 4,431 | 2.51 | 3,400 | 1.90 | 6,099 | 3.20 | 23,338 | 11.57 | ||||||||||||||||||||||||||||||
Direct consumer | 5,710 | 2.37 | 5,605 | 2.30 | 5,496 | 2.21 | 7,114 | 2.70 | 9,804 | 3.56 | ||||||||||||||||||||||||||||||
Indirect consumer | 2,797 | 1.25 | 2,076 | 0.96 | 1,921 | 0.95 | 2,870 | 1.39 | 2,205 | 1.05 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total consumer | 26,871 | 4.27 | 12,112 | 1.90 | 10,817 | 1.72 | 16,083 | 2.43 | 35,347 | 5.14 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Total net charge-offs | $ | 33,419 | 2.34 | $ | 35,421 | 2.51 | $ | 160,638 | 10.77 | $ | 159,311 | 9.46 | $ | 87,412 | 4.91 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
* Represents an annualized rate. | ||||||||||||||||||||||||||||||||||||||||
8
Allocation of the Allowance for Loan Losses (ALLL)(1)
| September 30, 2011 | June 30, 2011 | September 30, 2010 | ||||||||||||||||||||||
(in thousands) | ALLL | Related NPL(2) | ALLL | Related NPL(2) | ALLL | Related NPL(2) | ||||||||||||||||||
Specific allocated allowance: | ||||||||||||||||||||||||
Commercial and industrial | $ | 99 | $ | 11,653 | $ | 169 | $ | 13,382 | $ | 11,210 | $ | 44,322 | ||||||||||||
Commercial real estate | 6,148 | 41,799 | 3,706 | 33,573 | 48,673 | 230,706 | ||||||||||||||||||
Residential mortgage | 2,540 | 11,701 | 2,388 | 12,126 | 857 | 3,790 | ||||||||||||||||||
Direct Consumer | 184 | 1,624 | 184 | 1,653 | 114 | 1,087 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total specific allocated allowance | 8,971 | 66,777 | 6,447 | 60,734 | 60,854 | 279,905 | ||||||||||||||||||
Risk allocated allowance: | ||||||||||||||||||||||||
Commercial and industrial | 23,944 | 8,748 | 30,382 | 9,719 | 46,024 | 18,791 | ||||||||||||||||||
Commercial real estate (CRE) | 67,091 | 17,854 | 76,921 | 17,369 | 116,156 | 31,814 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total commercial | 91,035 | 26,602 | 107,303 | 27,088 | 162,180 | 50,605 | ||||||||||||||||||
Residential mortgage | 34,877 | 2,384 | 41,537 | 19,981 | 47,309 | 15,616 | ||||||||||||||||||
Direct Consumer | 37,682 | 15,328 | 32,504 | 14,569 | 31,202 | 16,375 | ||||||||||||||||||
Indirect Consumer | 13,789 | 1,256 | 15,501 | 1,281 | 17,399 | 1,694 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total risk allocated allowance | 177,383 | 45,570 | 196,845 | 62,919 | 258,090 | 84,290 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allocated allowance | 186,354 | 112,347 | 203,292 | 123,653 | 318,944 | 364,195 | ||||||||||||||||||
General valuation allowances | 4,000 | — | 3,000 | — | 5,102 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total allowance | $ | 190,354 | $ | 112,347 | $ | 206,292 | $ | 123,653 | $ | 324,046 | $ | 364,195 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| (1) | The allocation of the allowance for loan losses in the above table is based upon ranges of estimates and is not intended to imply either limitations on the usage of the allowance or precision of the specific amounts. Citizens does not view the allowance for loan losses as being divisible among the various categories of loans. The entire allowance is available to absorb any future losses without regard to the category or categories in which the charged-off loans are classified. |
| (2) | Related NPL amounts in risk allocated allowances include restructured loans and still accruing and loans 90+ days past due and still accruing but classified as nonperforming. |
Summary of Loan Loss Experience
| Three Months Ended | ||||||||||||||||||||
(in thousands) | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||
Allowance for loan losses - beginning of period | $ | 206,292 | $ | 224,117 | $ | 296,031 | $ | 324,046 | $ | 321,841 | ||||||||||
Provision for loan losses | 17,481 | 17,596 | 88,724 | 131,296 | 89,617 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial and industrial | 994 | 4,016 | 29,712 | 24,634 | 6,083 | |||||||||||||||
Small business | 1,132 | 3,853 | 4,078 | 2,747 | 2,061 | |||||||||||||||
Commercial real estate | 5,860 | 16,371 | 118,721 | 119,986 | 45,910 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total commercial | 7,986 | 24,240 | 152,511 | 147,367 | 54,054 | |||||||||||||||
Residential mortgage | 18,369 | 4,659 | 3,403 | 6,141 | 23,353 | |||||||||||||||
Direct consumer | 6,398 | 6,522 | 6,468 | 7,701 | 10,256 | |||||||||||||||
Indirect consumer | 3,430 | 2,639 | 2,472 | 3,647 | 2,808 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total charge-offs | 36,183 | 38,060 | 164,854 | 164,856 | 90,471 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Recoveries: | ||||||||||||||||||||
Commercial and industrial | 721 | 524 | 1,603 | 1,017 | 1,321 | |||||||||||||||
Small business | 180 | 169 | 174 | 309 | 89 | |||||||||||||||
Commercial real estate | 537 | 238 | 913 | 2,813 | 579 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total commercial | 1,438 | 931 | 2,690 | 4,139 | 1,989 | |||||||||||||||
Residential mortgage | 5 | 228 | 3 | 42 | 15 | |||||||||||||||
Direct consumer | 688 | 917 | 972 | 587 | 452 | |||||||||||||||
Indirect consumer | 633 | 563 | 551 | 777 | 603 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total recoveries | 2,764 | 2,639 | 4,216 | 5,545 | 3,059 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net charge-offs | 33,419 | 35,421 | 160,638 | 159,311 | 87,412 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Allowance for loan losses - end of period | $ | 190,354 | $ | 206,292 | $ | 224,117 | $ | 296,031 | $ | 324,046 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
9
Non-GAAP Reconciliation
(in thousands) | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||
Efficiency Ratio (non-GAAP) | ||||||||||||||||||||
Net interest income (A) | $ | 78,841 | $ | 77,606 | $ | 78,614 | $ | 81,731 | $ | 81,558 | ||||||||||
Taxable equivalent adjustment (B) | 1,827 | 1,884 | 2,102 | 2,247 | 2,372 | |||||||||||||||
Investment securities gain (losses) (C) | 3 | (993 | ) | (383 | ) | (171 | ) | — | ||||||||||||
Noninterest income (D) | 24,427 | 23,325 | 23,143 | 24,028 | 25,956 | |||||||||||||||
Noninterest expense (E) | 65,411 | 69,444 | 81,656 | 77,234 | 74,740 | |||||||||||||||
Efficiency ratio: E/(A+B-C+D) (non-GAAP) | 62.24 | % | 66.90 | % | 78.33 | % | 71.39 | % | 68.02 | % | ||||||||||
Tangible Common Equity to Tangible Assets (non-GAAP) | ||||||||||||||||||||
Total assets | $ | 9,600,188 | $ | 9,495,630 | $ | 9,724,113 | $ | 9,965,645 | $ | 10,638,904 | ||||||||||
Goodwill | (318,150 | ) | (318,150 | ) | (318,150 | ) | (318,150 | ) | (318,150 | ) | ||||||||||
Other intangible assets | (8,116 | ) | (8,848 | ) | (9,626 | ) | (10,454 | ) | (11,306 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tangible assets (non-GAAP) | $ | 9,273,922 | $ | 9,168,632 | $ | 9,396,337 | $ | 9,637,041 | $ | 10,309,448 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total shareholders’ equity | $ | 1,009,143 | $ | 979,722 | $ | 945,401 | $ | 1,011,731 | $ | 1,157,061 | ||||||||||
Goodwill | (318,150 | ) | (318,150 | ) | (318,150 | ) | (318,150 | ) | (318,150 | ) | ||||||||||
Other intangible assets | (8,116 | ) | (8,848 | ) | (9,626 | ) | (10,454 | ) | (11,306 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tangible equity (non-GAAP) | $ | 682,877 | $ | 652,724 | $ | 617,625 | $ | 683,127 | $ | 827,605 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tangible equity | $ | 682,877 | $ | 652,724 | $ | 617,625 | $ | 683,127 | $ | 827,605 | ||||||||||
Preferred stock | (283,360 | ) | (281,642 | ) | (279,955 | ) | (278,300 | ) | (276,676 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tangible common equity (non-GAAP) | $ | 399,517 | $ | 371,082 | $ | 337,670 | $ | 404,827 | $ | 550,929 | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Tier 1 Common Equity (non-GAAP) | ||||||||||||||||||||
Total shareholders’ equity | $ | 1,009,143 | $ | 979,722 | $ | 945,401 | $ | 1,011,731 | $ | 1,157,061 | ||||||||||
Qualifying capital securities | 73,667 | 73,667 | 73,667 | 73,667 | 73,667 | |||||||||||||||
Goodwill | (318,150 | ) | (318,150 | ) | (318,150 | ) | (318,150 | ) | (318,150 | ) | ||||||||||
Accumulated other comprehensive loss (income) | 1,075 | 923 | 14,278 | 20,156 | (15,614 | ) | ||||||||||||||
Other intangible assets | (8,116 | ) | (8,848 | ) | (9,626 | ) | (10,454 | ) | (11,306 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tier 1 capital (regulatory) | $ | 757,619 | $ | 727,314 | $ | 705,570 | $ | 776,950 | $ | 885,658 | ||||||||||
|
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|
|
|
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|
| |||||||||||
Tier 1 capital (regulatory) | $ | 757,619 | $ | 727,314 | $ | 705,570 | $ | 776,950 | $ | 885,658 | ||||||||||
Qualifying capital securities | (73,667 | ) | (73,667 | ) | (73,667 | ) | (73,667 | ) | (73,667 | ) | ||||||||||
Preferred stock | (283,360 | ) | (281,642 | ) | (279,955 | ) | (278,300 | ) | (276,676 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Tier 1 common equity (non-GAAP) | $ | 400,592 | $ | 372,005 | $ | 351,948 | $ | 424,983 | $ | 535,315 | ||||||||||
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|
|
|
|
|
|
|
| |||||||||||
Net risk-weighted assets (regulatory) | $ | 5,912,527 | $ | 5,850,177 | $ | 5,929,802 | $ | 6,416,792 | $ | 7,132,719 | ||||||||||
Equity to assets | 10.51 | % | 10.32 | % | 9.72 | % | 10.15 | % | 10.88 | % | ||||||||||
Tier 1 common equity (non-GAAP) | 6.77 | 6.36 | 5.93 | 6.62 | 7.50 | |||||||||||||||
Tangible equity to tangible assets (non-GAAP) | 7.36 | 7.12 | 6.57 | 7.09 | 8.03 | |||||||||||||||
Tangible common equity to tangible assets (non-GAAP) | 4.31 | 4.05 | 3.59 | 4.20 | 5.34 | |||||||||||||||
10
Pre-tax pre-provision profit (non-GAAP)
| Three Months Ended | ||||||||||||||||||||
(in thousands) | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||
Income (loss) from continuing operations | $ | 32,944 | $ | 24,157 | $ | (68,678 | ) | $ | (106,154 | ) | $ | (62,471 | ) | |||||||
Income tax (benefit) provision from continuing operations | (12,568 | ) | (10,266 | ) | 55 | 3,383 | 5,628 | |||||||||||||
Provision for loan losses | 17,481 | 17,596 | 88,724 | 131,296 | 89,617 | |||||||||||||||
Net (gains) losses on loans held for sale | (1,952 | ) | (1,179 | ) | 1,106 | 3,069 | 1,441 | |||||||||||||
Investment securities (gains) losses | (3 | ) | 993 | 383 | 171 | — | ||||||||||||||
Losses on other real estate (ORE) | 1,210 | 1,355 | 9,122 | 930 | 1,967 | |||||||||||||||
Fair-value adjustment on bank owned life insurance(1) | 385 | 48 | (100 | ) | (105 | ) | (159 | ) | ||||||||||||
Fair-value adjustment on swaps(1) | 268 | 77 | 114 | (535 | ) | 202 | ||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Pre-tax pre-provision profit (non-GAAP) | $ | 37,765 | $ | 32,781 | $ | 30,726 | $ | 32,055 | $ | 36,225 | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
| (1) | Fair-value adjustment amounts contained in line item “Other income” on Consolidated Statements of Operations |
Noninterest Income and Noninterest Expense
| Three Months Ended | ||||||||||||||||||||
(in thousands ) | September 30, 2011 | June 30, 2011 | March 31, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||
Service charges on deposit accounts | $ | 10,362 | $ | 9,753 | $ | 9,429 | $ | 10,072 | $ | 10,609 | ||||||||||
Trust fees | 3,622 | 3,811 | 3,923 | 4,135 | 3,837 | |||||||||||||||
Mortgage and other loan income | 2,089 | 1,883 | 2,942 | 3,109 | 2,590 | |||||||||||||||
Brokerage and investment fees | 1,188 | 1,533 | 1,108 | 1,264 | 1,060 | |||||||||||||||
ATM network user fees | 1,993 | 1,926 | 1,755 | 1,825 | 1,864 | |||||||||||||||
Bankcard fees | 2,482 | 2,468 | 2,238 | 2,325 | 2,261 | |||||||||||||||
Net gains (losses) on loans held for sale | 1,952 | 1,179 | (1,106 | ) | (3,069 | ) | (1,441 | ) | ||||||||||||
Investment securities gains (losses) | 3 | (993 | ) | (383 | ) | (171 | ) | — | ||||||||||||
Other income | 736 | 1,765 | 3,237 | 4,538 | 5,176 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total noninterest income | $ | 24,427 | $ | 23,325 | $ | 23,143 | $ | 24,028 | $ | 25,956 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Salaries and employee benefits | $ | 30,280 | $ | 31,265 | $ | 31,018 | $ | 32,294 | $ | 32,740 | ||||||||||
Occupancy | 6,125 | 6,047 | 7,562 | 6,834 | 6,529 | |||||||||||||||
Professional services | 2,394 | 2,407 | 2,219 | 2,945 | 2,737 | |||||||||||||||
Equipment | 2,918 | 2,841 | 3,052 | 3,355 | 3,076 | |||||||||||||||
Data processing services | 3,823 | 4,247 | 4,352 | 4,636 | 4,702 | |||||||||||||||
Advertising and public relations | 2,179 | 1,802 | 569 | 1,512 | 1,605 | |||||||||||||||
Postage and delivery | 1,142 | 1,120 | 1,116 | 1,075 | 1,187 | |||||||||||||||
Other loan expenses | 3,941 | 3,314 | 5,255 | 5,431 | 4,355 | |||||||||||||||
Losses on other real estate (ORE) | 1,210 | 1,355 | 9,122 | 930 | 1,967 | |||||||||||||||
ORE expenses | 529 | 1,029 | 1,768 | 1,653 | 1,327 | |||||||||||||||
Intangible asset amortization | 732 | 778 | 828 | 851 | 908 | |||||||||||||||
Other expense | 10,138 | 13,239 | 14,795 | 15,718 | 13,607 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total noninterest expense | $ | 65,411 | $ | 69,444 | $ | 81,656 | $ | 77,234 | $ | 74,740 | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
11
Average Balances, Yields and Rates
| Three Months Ended | ||||||||||||||||||||||||
| September 30, 2011 | June 30, 2011 | September 30, 2010 | ||||||||||||||||||||||
(in thousands) | Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | ||||||||||||||||||
Earning Assets | ||||||||||||||||||||||||
Money market investments | $ | 270,422 | 0.25 | % | $ | 403,380 | 0.25 | % | $ | 560,792 | 0.25 | % | ||||||||||||
Investment securities: | ||||||||||||||||||||||||
Taxable | 2,536,944 | 3.23 | 2,443,792 | 3.36 | 1,911,268 | 3.78 | ||||||||||||||||||
Tax-exempt | 242,494 | 6.63 | 254,797 | 6.55 | 321,256 | 6.73 | ||||||||||||||||||
FHLB and Federal Reserve stock | 123,906 | 3.13 | 137,433 | 3.04 | 157,304 | 1.86 | ||||||||||||||||||
Portfolio loans: | ||||||||||||||||||||||||
Commercial and industrial | 1,440,968 | 5.24 | 1,348,499 | 5.38 | 1,685,249 | 4.70 | ||||||||||||||||||
Commercial real estate | 1,678,996 | 5.07 | 1,766,070 | 5.04 | 2,595,787 | 5.34 | ||||||||||||||||||
Residential mortgage | 693,494 | 4.45 | 719,336 | 4.80 | 839,455 | 4.89 | ||||||||||||||||||
Direct consumer | 967,443 | 6.00 | 990,764 | 6.06 | 1,112,768 | 6.03 | ||||||||||||||||||
Indirect consumer | 882,157 | 6.56 | 844,083 | 6.68 | 825,885 | 6.82 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total portfolio loans | 5,663,058 | 5.43 | 5,668,752 | 5.51 | 7,059,144 | 5.42 | ||||||||||||||||||
Loans held for sale | 19,248 | 4.44 | 34,194 | 1.72 | 55,054 | 2.14 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total earning assets | 8,856,072 | 4.64 | 8,942,348 | 4.67 | 10,064,818 | 4.79 | ||||||||||||||||||
Nonearning Assets | ||||||||||||||||||||||||
Cash and due from banks | 147,044 | 138,728 | 154,119 | |||||||||||||||||||||
Bank premises and equipment | 99,835 | 101,352 | 106,503 | |||||||||||||||||||||
Investment security fair value adjustment | 46,558 | 53,822 | 65,693 | |||||||||||||||||||||
Other nonearning assets | 652,885 | 652,611 | 733,974 | |||||||||||||||||||||
Allowance for loan losses | (206,119 | ) | (223,922 | ) | (321,865 | ) | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total assets | $ | 9,596,275 | $ | 9,664,939 | $ | 10,803,242 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 976,637 | 0.21 | $ | 947,220 | 0.23 | $ | 975,588 | 0.26 | |||||||||||||||
Savings deposits | 2,648,640 | 0.33 | 2,621,616 | 0.37 | 2,591,083 | 0.63 | ||||||||||||||||||
Time deposits | 2,380,333 | 1.80 | 2,562,463 | 1.89 | 3,318,137 | 2.24 | ||||||||||||||||||
Short-term borrowings | 43,445 | 0.18 | 41,340 | 0.18 | 36,888 | 0.22 | ||||||||||||||||||
Long-term debt | 862,479 | 4.19 | 905,902 | 4.23 | 1,202,901 | 4.51 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total interest-bearing liabilities | 6,911,534 | 1.30 | 7,078,541 | 1.40 | 8,124,597 | 1.82 | ||||||||||||||||||
Noninterest-Bearing Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||
Noninterest-bearing demand | 1,541,005 | 1,474,408 | 1,312,957 | |||||||||||||||||||||
Other liabilities | 152,134 | 148,058 | 150,601 | |||||||||||||||||||||
Shareholders’ equity | 991,602 | 963,932 | 1,215,087 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 9,596,275 | $ | 9,664,939 | $ | 10,803,242 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Interest Spread | 3.34 | % | 3.27 | % | 2.97 | % | ||||||||||||||||||
Contribution of noninterest bearing sources of funds | 0.29 | 0.29 | 0.35 | |||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Net Interest Margin | 3.63 | % | 3.56 | % | 3.32 | % | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
12
Average Balances, Yields and Rates
Nine Months Ended September 30, | ||||||||||||||||
| 2011 | 2010 | |||||||||||||||
(in thousands) | Average Balance | Average Rate | Average Balance | Average Rate | ||||||||||||
Earning Assets | ||||||||||||||||
Money market investments | $ | 362,983 | 0.25 | % | $ | 636,608 | 0.25 | % | ||||||||
Investment securities: | ||||||||||||||||
Taxable | 2,432,220 | 3.33 | 1,842,089 | 3.98 | ||||||||||||
Tax-exempt | 258,524 | 6.67 | 388,018 | 6.73 | ||||||||||||
FHLB and Federal Reserve stock | 134,998 | 3.11 | 156,337 | 2.36 | ||||||||||||
Portfolio loans: | ||||||||||||||||
Commercial and industrial | 1,404,081 | 5.07 | 1,777,721 | 4.84 | ||||||||||||
Commercial real estate | 1,828,800 | 5.14 | 2,702,625 | 5.29 | ||||||||||||
Residential mortgage | 718,039 | 4.68 | 897,468 | 5.10 | ||||||||||||
Direct consumer | 994,185 | 6.06 | 1,155,622 | 6.06 | ||||||||||||
Indirect consumer | 847,878 | 6.68 | 808,412 | 6.83 | ||||||||||||
|
|
|
| |||||||||||||
Total portfolio loans | 5,792,983 | 5.44 | 7,341,848 | 5.45 | ||||||||||||
Loans held for sale | 26,739 | 3.65 | 77,696 | 1.78 | ||||||||||||
|
|
|
| |||||||||||||
Total earning assets | 9,008,447 | 4.66 | 10,442,596 | 4.85 | ||||||||||||
Nonearning Assets | ||||||||||||||||
Cash and due from banks | 143,254 | 168,855 | ||||||||||||||
Bank premises and equipment | 101,846 | 108,013 | ||||||||||||||
Investment security fair value adjustment | 44,256 | 51,330 | ||||||||||||||
Other nonearning assets | 662,565 | 731,006 | ||||||||||||||
Assets of discontinued operations | — | 145,217 | ||||||||||||||
Allowance for loan losses | (241,431 | ) | (326,552 | ) | ||||||||||||
|
|
|
| |||||||||||||
Total assets | $ | 9,718,937 | $ | 11,320,465 | ||||||||||||
|
|
|
| |||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||
Deposits: | ||||||||||||||||
Interest-bearing demand deposits | $ | 958,634 | 0.22 | $ | 1,031,670 | 0.28 | ||||||||||
Savings deposits | 2,633,255 | 0.37 | 2,538,733 | 0.66 | ||||||||||||
Time deposits | 2,564,001 | 1.88 | 3,529,895 | 2.43 | ||||||||||||
Short-term borrowings | 41,999 | 0.18 | 35,110 | 0.23 | ||||||||||||
Long-term debt | 912,755 | 4.16 | 1,321,642 | 4.46 | ||||||||||||
|
|
|
| |||||||||||||
Total interest-bearing liabilities | 7,110,644 | 1.38 | 8,457,050 | 1.95 | ||||||||||||
Noninterest-Bearing Liabilities and Shareholders’ Equity | ||||||||||||||||
Noninterest-bearing demand | 1,470,866 | 1,289,423 | ||||||||||||||
Other liabilities | 151,525 | 143,214 | ||||||||||||||
Liabilities of discontinued operations | — | 172,273 | ||||||||||||||
Shareholders’ equity | 985,902 | 1,258,505 | ||||||||||||||
|
|
|
| |||||||||||||
Total liabilities and shareholders’ equity | $ | 9,718,937 | $ | 11,320,465 | ||||||||||||
|
|
|
| |||||||||||||
Interest Spread | 3.28 | % | 2.90 | % | ||||||||||||
Contribution of noninterest bearing sources of funds | 0.29 | 0.37 | ||||||||||||||
|
|
|
| |||||||||||||
Net Interest Margin | 3.57 | % | 3.27 | % | ||||||||||||
|
|
|
| |||||||||||||
13