Exhibit 99(a)
 | News Release |
(518) 377-3311 Fax: (518) 381-3668
Subsidiary: | Trustco Bank | NASDAQ -- TRST |
Contact: | Kevin T. Timmons |
| Vice President/Treasurer | |
| (518) 381-3607 |
TrustCo Announces Second Quarter 2015 Earnings;
Core Net Income Up 5%
Executive Snapshot:
| · | Continued strong financial results: |
| o | Core net income for second quarter 2015 compared to the same period in 2014: |
| § | Core net income up 4.9%; |
| § | Core diluted EPS up 3.7%; |
| o | GAAP earnings for the second quarter of 2015 compared to the same period in 2014: |
| § | Net income down 9.2% |
| § | Diluted EPS down 9.6% |
| § | Return on average assets (ROA) of 0.91% |
| § | Return on average equity (ROE) of 10.66% |
| § | Efficiency ratio of 54.71% |
| · | Asset quality improvement: |
| o | Asset quality measures continued to improve compared to both the second quarter of 2014 and for the first quarter of 2015 |
| o | Nonperforming assets (NPAs) fell by $10.6 million when compared to June 30, 2014. |
| o | NPAs to total assets improved from 1.07% to 0.81% when compared to June 30, 2014. |
| o | Quarterly net chargeoffs at lowest level since the fourth quarter of 2008 |
| · | Continued expansion of customer base: |
| o | Focus on capitalizing on opportunities presented by expanded branch network |
| o | Average deposits per branch grew $942 thousand from June 30, 2014 to June 30, 2015 on a same store basis |
| o | Average core deposits grew $93 million for the second quarter of 2015 compared to the second quarter of 2014 |
| · | Loan portfolio reaches all-time high: |
| o | Average loans were up $252 million for the second quarter of 2015 compared to second quarter of 2014 |
| o | At $3.24 billion at June 30, 2015, loans reached an all-time historic high |
Note: See non-GAAP financial measures reconciliation on pages 14-15 for information on core income and earnings per share
Page | 1
FOR IMMEDIATE RELEASE:
TrustCo Announces Second Quarter 2015 Earnings;
Core Net Income Up 5%
Glenville, New York – July 21, 2015
TrustCo Bank Corp NY (TrustCo, Nasdaq: TRST) today announced that second quarter of 2015 core net income rose 4.9% to $10.7 million compared to $10.2 million for the second quarter of 2014. Second quarter 2014 results included a gain of $2.4 million on the previously disclosed sale of owned real estate that added $1.6 million to reported after-tax earnings. On a GAAP basis, second quarter 2014 net income was $11.8 million compared to $10.7 million in 2015.
Robert J. McCormick, President and Chief Executive Officer noted, “Our core results for the second quarter of 2015 build off of the solid results of the first quarter. In addition to core net income growth, we continued to add customer relationships which ultimately positions our business well for the future. Our highly liquid balance sheet continues to allow us to fund our loan growth without having to overpay for deposits. We look forward to the second half of 2015 with optimism. We will continue taking advantage of opportunities as they are presented.”
TrustCo saw continued strong loan growth in the second quarter of 2015. Loan portfolio expansion was funded by utilization of a portion of the Bank’s large cash position. Growth in core deposits was used to offset declines in higher cost certificates of deposit and cash management accounts, which are significantly more costly than core deposits. The continued shift toward loans helped offset the margin impact from continued comparatively low yields on cash and investments. TrustCo’s strong liquidity position continues to allow the Company to take advantage of opportunities when interest rate conditions change.
Mr. McCormick also noted, “We are encouraged by the continued economic improvements in our market areas. We are pleased with the continued improvement in our asset quality during both the second quarter and over the last year. Our long-term focus on traditional lending criteria and conservative balance sheet management has enabled us to maintain strong liquidity and capital and report continued profit improvements. As a result, we have been able to focus on conducting business, which has put us in a position to take advantage of changes in market and competitive conditions.”
For the second quarter of 2015, return on average assets and return on average equity were 0.91% and 10.66%, respectively, compared to 1.03% and 12.50% for the second quarter of 2014, all on a reported GAAP basis. Reported GAAP diluted earnings per share were $0.113 for the second quarter of 2015, compared to $0.125 for the second quarter of 2014. Higher levels of assets and shareholders’ equity as well as the $2.4 million gain noted earlier contributed to the decline in return on average assets and equity. Core diluted net income per share was $0.112 for the second quarter of 2015 compared to $0.108 for the second quarter of 2014. The reconciliation between core and GAAP earnings is shown in the table at the back of this release.
Page | 2
For the first six months of 2015, core diluted net income per share was $0.225, compared to $0.213 for the first six months of 2014. On a GAAP basis, diluted earnings per share were $0.225, compared to $0.241 over the same time periods. GAAP return on average assets and equity were 0.92% and 10.78% for the first six months of 2015, compared to 1.01% and 12.30% for the first six months of 2014.
Average loans were up $252.5 million or 8.5% in the second quarter of 2015, over the same period in 2014. Average deposits were up $138.8 million or 3.5% for the second quarter of 2015 over the same period a year earlier. Most of the increase in deposits came from core deposit accounts. Average core deposits increased $92.8 million from the second quarter of 2014 to the second quarter of 2015. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. Mr. McCormick noted that, “The year-over-year growth of our loans and core deposit base reflect the long term strategic focus of the Company.
While some banks have backed away from branches, a customer friendly branch franchise continues to be the key to our long term plans. We opened one new office during the second quarter, in Orlando, Florida and now have a 50 branch network covering Central Florida. We continue to make significant progress expanding loans and deposits throughout our entire branch network. We expect that trend to continue as the newer branches continue to mature.
At June 30, 2015, our average branch size was $28.3 million. On a same store basis, our average deposits per branch grew by $942 thousand from June 30, 2014 to June 30, 2015. We have always designed our branches to be smaller and more cost effective than those built by many of our competitors. We use open floor plans that help maximize the value of our branches. We remain mindful that fully achieving our goals for newer branches will take time and continued work. We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”
Asset quality and the allowance for loan losses coverage of nonperforming loans (NPLs) improved from both June 30, 2014 and March 31, 2015 to June 30, 2015. NPLs declined to $32.5 million at June 30, 2015, compared to $40.9 million at June 30, 2014 and $33.5 million at March 31, 2015. NPLs were equal to 1.00% of total loans at June 30, 2015, compared to 1.36% a year earlier and 1.05% at March 31, 2015. The coverage ratio, or allowance for loan losses to NPLs, was 140.3% at June 30, 2015, compared to 137.2% at March 31, 2015 and 114.7% at June 30, 2014. Nonperforming assets (NPAs) declined to $38.6 million from $40.4 million at March 31, 2015 and $49.2 million at June 30, 2014. Overall, virtually every asset quality indicator improved during the second quarter of 2015 relative to the first quarter of 2015 and the second quarter of 2014. The ratio of loan loss allowance to total loans was 1.41% as of June 30, 2015, compared to 1.44% at March 31, 2015 and to 1.56% at June 30, 2014 and reflects both the improvement in asset quality and economic conditions in our lending areas. The allowance for loan losses was $45.6 million at June 30, 2015 compared to $45.9 million at March 31, 2015 and $46.9 million at June 30, 2014.
The net interest margin for the second quarter of 2015 was 3.07% compared to 3.08% in the first quarter of 2015 and 3.16% in the second quarter of 2014.
At June 30, 2015 the tangible equity ratio was 8.48% compared to 8.44% at March 31, 2015 and 8.38% at June 30, 2014. Tangible book value per share at June 30, 2015 was $4.23 compared to $4.06 a year earlier.
Trustco Bank entered into an agreement with its primary regulator, the Office of the Comptroller of the Currency (OCC), on July 21, 2015. The agreement calls for the Bank to take various actions in areas such as compliance, corporate governance, audit, capital planning including dividends, and strategic planning, among others. The agreement followed the completion of the OCC’s regularly scheduled exam of the Bank. Since the completion of the examination, the Bank has been working to address the issues raised. The Bank’s board of directors and management are committed to taking the necessary actions to fully address the provisions of the agreement and believe they have made significant progress towards that goal. Implementing the necessary action plans is expected to add annualized expenses of between $2.5 and $5.0 million.
Page | 3
TrustCo Bank Corp NY is a $4.7 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 146 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at June 30, 2015.
In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.
A conference call to discuss second quarter 2015 results will be held at 9:00 a.m. Eastern Time on July 22, 2015. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10069090. The call will also be audio webcast at: http://services.choruscall.com/links/trst150722.html, and will be available for one year.
Note: See non-GAAP financial measures reconciliation on pages 14-15 for information on core income and earnings per share
Safe Harbor Statement
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2015 and for the growth of loans and deposits throughout our branch network and our ability to capitalize on economic changes in the areas in which we operate. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to comply with the supervisory agreement entered into with Trustco Bank’s regulator and potential regulatory actions if we fail to comply; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement to distribute capital to TrustCo, which could affect our ability to pay dividends; results of examinations of Trustco Bank and TrustCo by our respective regulators; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2014, as amended, and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.
Page | 4
TRUSTCO BANK CORP NY
GLENVILLE, NY
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||
| 06/30/15 | 03/31/15 | 06/30/14 | ||||||||||
| Summary of operations | ||||||||||||
| Net interest income (TE) | $ | 35,690 | 35,185 | 35,513 | ||||||||
| Provision for loan losses | 800 | 800 | 1,500 | |||||||||
| Net securities transactions | - | 249 | - | |||||||||
| Noninterest income, excluding net securities transactions | 4,454 | 4,374 | 4,505 | |||||||||
| Noninterest expense | 22,131 | 21,857 | 19,437 | |||||||||
| Net income | 10,727 | 10,715 | 11,808 | |||||||||
| Per common share | ||||||||||||
| Net income per share: | ||||||||||||
| - Basic | $ | 0.113 | 0.113 | 0.125 | ||||||||
| - Diluted | 0.113 | 0.113 | 0.125 | |||||||||
| Cash dividends | 0.066 | 0.066 | 0.066 | |||||||||
| Tangible Book value at period end | 4.23 | 4.21 | 4.06 | |||||||||
| Market price at period end | 7.03 | 6.88 | 6.68 | |||||||||
| At period end | ||||||||||||
| Full time equivalent employees | 760 | 747 | 747 | |||||||||
| Full service banking offices | 146 | 145 | 141 | |||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 0.91 | % | 0.93 | 1.03 | ||||||||
| Return on average equity | 10.66 | 10.91 | 12.50 | |||||||||
| Efficiency (1) | 54.71 | 54.18 | 53.00 | |||||||||
| Net interest spread (TE) | 3.01 | 3.02 | 3.11 | |||||||||
| Net interest margin (TE) | 3.07 | 3.08 | 3.16 | |||||||||
| Dividend payout ratio | 58.15 | 58.12 | 52.62 | |||||||||
| Capital ratio at period end | ||||||||||||
| Consolidated tangible equity to tangible assets (2) | 8.48 | 8.44 | 8.38 | |||||||||
| Asset quality analysis at period end | ||||||||||||
| Nonperforming loans to total loans | 1.00 | 1.05 | 1.36 | |||||||||
| Nonperforming assets to total assets | 0.81 | 0.85 | 1.07 | |||||||||
| Allowance for loan losses to total loans | 1.41 | 1.44 | 1.56 | |||||||||
| Coverage ratio (3) | 1.4x | 1.4 | 1.1 | |||||||||
| (1) | Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions, the net gain on sale of building, and the net sale of nonperforming loans). |
| (2) | The tangible equity ratio excludes $553 of intangibles from both equity and assets. |
| (3) | Calculated as allowance for loan losses divided by total nonperforming loans. |
TE = Taxable equivalent.
Page | 5
FINANCIAL HIGHLIGHTS, Continued
(dollars in thousands, except per share data)
(Unaudited)
| Six Months Ended | ||||||||
| 06/30/15 | 06/30/14 | |||||||
| Summary of operations | ||||||||
| Net interest income (TE) | $ | 70,875 | 70,214 | |||||
| Provision for loan losses | 1,600 | 3,000 | ||||||
| Net securities transactions | 249 | 6 | ||||||
| Noninterest income | 8,828 | 10,258 | ||||||
| Noninterest expense | 43,988 | 40,238 | ||||||
| Net income | 21,442 | 22,819 | ||||||
| Per common share | ||||||||
| Net income per share: | ||||||||
| - Basic | $ | 0.226 | 0.241 | |||||
| - Diluted | 0.225 | 0.241 | ||||||
| Cash dividends | 0.131 | 0.131 | ||||||
| Tangible Book value at period end | 4.23 | 4.06 | ||||||
| Market price at period end | 7.03 | 6.68 | ||||||
| Performance ratios | ||||||||
| Return on average assets | 0.92 | % | 1.01 | |||||
| Return on average equity | 10.78 | 12.30 | ||||||
| Efficiency (1) | 54.45 | 52.15 | ||||||
| Net interest spread (TE) | 3.02 | 3.09 | ||||||
| Net interest margin (TE) | 3.08 | 3.15 | ||||||
| Dividend payout ratio | 58.14 | 54.42 | ||||||
| (1) | Calculated as noninterest expense (excluding ORE income/expense) divided by taxable equivalent net interest income plus noninterest income (excluding net securities transactions, the net gain on sale of building, and the net sale of nonperforming loans). |
TE = Taxable equivalent.
Page | 6
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | ||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Interest and fees on loans | $ | 35,343 | 34,983 | 35,051 | 34,421 | 33,614 | ||||||||||||||
| Interest and dividends on securities available for sale: | ||||||||||||||||||||
| U. S. government sponsored enterprises | 366 | 212 | 233 | 297 | 381 | |||||||||||||||
| State and political subdivisions | 23 | 25 | 29 | 38 | 44 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 2,276 | 2,393 | 2,733 | 3,040 | 3,299 | |||||||||||||||
| Corporate bonds | - | 1 | 2 | 2 | 2 | |||||||||||||||
| Small Business Administration-guaranteed participation securities | 503 | 522 | 524 | 535 | 539 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-commercial | 38 | 37 | 37 | 38 | 38 | |||||||||||||||
| Other securities | 4 | 4 | 4 | 4 | 4 | |||||||||||||||
| Total interest and dividends on securities available for sale | 3,210 | 3,194 | 3,562 | 3,954 | 4,307 | |||||||||||||||
| Interest on held to maturity securities: | ||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 480 | 478 | 512 | 545 | 577 | |||||||||||||||
| Corporate bonds | 154 | 154 | 154 | 153 | 154 | |||||||||||||||
| Total interest on held to maturity securities | 634 | 632 | 666 | 698 | 731 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 118 | 116 | 123 | 127 | 128 | |||||||||||||||
| Interest on federal funds sold and other short-term investments | 423 | 400 | 363 | 374 | 376 | |||||||||||||||
| Total interest income | 39,728 | 39,325 | 39,765 | 39,574 | 39,156 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Interest on deposits: | ||||||||||||||||||||
| Interest-bearing checking | 111 | 105 | 98 | 94 | 89 | |||||||||||||||
| Savings | 599 | 658 | 663 | 644 | 592 | |||||||||||||||
| Money market deposit accounts | 547 | 617 | 634 | 648 | 618 | |||||||||||||||
| Time deposits | 2,500 | 2,434 | 2,366 | 2,213 | 2,035 | |||||||||||||||
| Interest on short-term borrowings | 300 | 346 | 335 | 327 | 342 | |||||||||||||||
| Total interest expense | 4,057 | 4,160 | 4,096 | 3,926 | 3,676 | |||||||||||||||
| Net interest income | 35,671 | 35,165 | 35,669 | 35,648 | 35,480 | |||||||||||||||
| Provision for loan losses | 800 | 800 | 1,000 | 1,100 | 1,500 | |||||||||||||||
| Net interest income after provision for loan losses | 34,871 | 34,365 | 34,669 | 34,548 | 33,980 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Trustco Financial Services income | 1,478 | 1,653 | 1,451 | 1,471 | 1,405 | |||||||||||||||
| Fees for services to customers | 2,691 | 2,524 | 2,753 | 2,838 | 2,732 | |||||||||||||||
| Net gain on securities transactions | - | 249 | 335 | 376 | - | |||||||||||||||
| Other | 285 | 197 | 213 | 205 | 368 | |||||||||||||||
| Total noninterest income | 4,454 | 4,623 | 4,752 | 4,890 | 4,505 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 8,164 | 8,481 | 9,003 | 8,272 | 8,012 | |||||||||||||||
| Net occupancy expense | 3,878 | 4,108 | 3,869 | 4,013 | 4,110 | |||||||||||||||
| Equipment expense | 1,803 | 1,942 | 1,919 | 1,725 | 1,823 | |||||||||||||||
| Professional services | 2,066 | 1,507 | 1,536 | 1,547 | 1,438 | |||||||||||||||
| Outsourced services | 1,425 | 1,425 | 1,225 | 1,375 | 1,425 | |||||||||||||||
| Advertising expense | 733 | 600 | 602 | 629 | 657 | |||||||||||||||
| FDIC and other insurance | 1,017 | 1,065 | 949 | 1,054 | 1,000 | |||||||||||||||
| Other real estate expense (income), net | 201 | 424 | 841 | 1,001 | (1,688 | ) | ||||||||||||||
| Other | 2,844 | 2,305 | 2,296 | 2,576 | 2,660 | |||||||||||||||
| Total noninterest expenses | 22,131 | 21,857 | 22,240 | 22,192 | 19,437 | |||||||||||||||
| Income before taxes | 17,194 | 17,131 | 17,181 | 17,246 | 19,048 | |||||||||||||||
| Income taxes | 6,467 | 6,416 | 6,521 | 6,532 | 7,240 | |||||||||||||||
| Net income | $ | 10,727 | 10,715 | 10,660 | 10,714 | 11,808 | ||||||||||||||
| Net income per common share: | ||||||||||||||||||||
| - Basic | $ | 0.113 | 0.113 | 0.113 | 0.113 | 0.125 | ||||||||||||||
| - Diluted | 0.113 | 0.113 | 0.112 | 0.113 | 0.125 | |||||||||||||||
| Average basic shares (in thousands) | 95,056 | 94,947 | 94,681 | 94,628 | 94,559 | |||||||||||||||
| Average diluted shares (in thousands) | 95,190 | 95,074 | 94,813 | 94,752 | 94,675 | |||||||||||||||
| Note: Taxable equivalent net interest income | $ | 35,690 | 35,185 | 35,693 | 35,676 | 35,513 | ||||||||||||||
Page | 7
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(Unaudited)
| Six Months Ended | ||||||||
| 6/30/2015 | 6/30/2014 | |||||||
| Interest and dividend income: | ||||||||
| Interest and fees on loans | $ | 70,326 | 66,488 | |||||
| Interest and dividends on securities available for sale: | ||||||||
| U. S. government sponsored enterprises | 578 | 887 | ||||||
| State and political subdivisions | 48 | 112 | ||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 4,669 | 6,377 | ||||||
| Corporate bonds | 1 | 61 | ||||||
| Small Business Administration-guaranteed participation securities | 1,025 | 1,095 | ||||||
| Mortgage-backed securities and collateralized mortgage obligations-commercial | 75 | 76 | ||||||
| Other securities | 8 | 8 | ||||||
| Total interest and dividends on securities available for sale | 6,404 | 8,616 | ||||||
| Interest on held to maturity securities: | ||||||||
| Mortgage-backed securities-residential | 958 | 1,202 | ||||||
| Corporate bonds | 308 | 308 | ||||||
| Total interest on held to maturity securities | 1,266 | 1,510 | ||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 234 | 261 | ||||||
| Interest on federal funds sold and other short-term investments | 823 | 727 | ||||||
| Total interest income | 79,053 | 77,602 | ||||||
| Interest expense: | ||||||||
| Interest on deposits: | ||||||||
| Interest-bearing checking | 216 | 173 | ||||||
| Savings | 1,257 | 1,355 | ||||||
| Money market deposit accounts | 1,164 | 1,217 | ||||||
| Time deposits | 4,934 | 3,986 | ||||||
| Interest on short-term borrowings | 646 | 735 | ||||||
| Total interest expense | 8,217 | 7,466 | ||||||
| Net interest income | 70,836 | 70,136 | ||||||
| Provision for loan losses | 1,600 | 3,000 | ||||||
| Net interest income after provision for loan losses | 69,236 | 67,136 | ||||||
| Noninterest income: | ||||||||
| Trust department income | 3,131 | 2,915 | ||||||
| Fees for services to customers | 5,215 | 5,253 | ||||||
| Net gain on securities transactions | 249 | 6 | ||||||
| Other | 482 | 2,090 | ||||||
| Total noninterest income | 9,077 | 10,264 | ||||||
| Noninterest expenses: | ||||||||
| Salaries and employee benefits | 16,645 | 15,604 | ||||||
| Net occupancy expense | 7,986 | 8,369 | ||||||
| Equipment expense | 3,745 | 3,575 | ||||||
| Professional services | 3,573 | 2,724 | ||||||
| Outsourced services | 2,850 | 2,750 | ||||||
| Advertising expense | 1,333 | 1,256 | ||||||
| FDIC and other insurance | 2,082 | 1,904 | ||||||
| Other real estate (income) expense, net | 625 | (833 | ) | |||||
| Other | 5,149 | 4,889 | ||||||
| Total noninterest expenses | 43,988 | 40,238 | ||||||
| Income before taxes | 34,325 | 37,162 | ||||||
| Income taxes | 12,883 | 14,343 | ||||||
| Net income | $ | 21,442 | 22,819 | |||||
| Net income per Common Share: | ||||||||
| - Basic | $ | 0.226 | 0.241 | |||||
| - Diluted | 0.225 | 0.241 | ||||||
| Average basic shares (thousands) | 95,002 | 94,536 | ||||||
| Average diluted shares (thousands) | 95,132 | 94,658 | ||||||
| Note: Taxable equivalent net interest income | $ | 70,875 | 70,214 | |||||
Page | 8
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
| 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | ||||||||||||||||
| ASSETS: | ||||||||||||||||||||
| Cash and due from banks | $ | 37,574 | 44,853 | 43,505 | 43,724 | 48,034 | ||||||||||||||
| Federal funds sold and other short term investments | 641,011 | 705,273 | 627,943 | 586,931 | 573,514 | |||||||||||||||
| Total cash and cash equivalents | 678,585 | 750,126 | 671,448 | 630,655 | 621,548 | |||||||||||||||
| Securities available for sale: | ||||||||||||||||||||
| U. S. government sponsored enterprises | 152,082 | 108,248 | 77,800 | 83,087 | 103,340 | |||||||||||||||
| States and political subdivisions | 1,969 | 1,974 | 2,271 | 2,769 | 3,921 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 429,205 | 445,273 | 483,560 | 523,779 | 589,517 | |||||||||||||||
| Corporate bonds | - | 1,500 | 1,500 | 1,401 | 1,402 | |||||||||||||||
| Small Business Administration-guaranteed participation securities | 95,323 | 98,668 | 100,496 | 100,491 | 102,367 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-commercial | 10,399 | 10,503 | 10,447 | 10,417 | 10,544 | |||||||||||||||
| Other securities | 685 | 685 | 685 | 679 | 679 | |||||||||||||||
| Total securities available for sale | 689,663 | 666,851 | 676,759 | 722,623 | 811,770 | |||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 53,576 | 57,296 | 60,986 | 64,223 | 67,974 | |||||||||||||||
| Corporate bonds | 9,967 | 9,964 | 9,960 | 9,956 | 9,952 | |||||||||||||||
| Total held to maturity securities | 63,543 | 67,260 | 70,946 | 74,179 | 77,926 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,480 | 9,228 | 9,228 | 9,228 | 10,951 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | 209,399 | 212,145 | 223,382 | 219,825 | 222,655 | |||||||||||||||
| Residential mortgage loans | 2,669,929 | 2,620,925 | 2,575,222 | 2,510,151 | 2,437,500 | |||||||||||||||
| Home equity line of credit | 354,946 | 352,552 | 352,134 | 346,496 | 339,897 | |||||||||||||||
| Installment loans | 8,674 | 8,003 | 7,594 | 6,557 | 6,098 | |||||||||||||||
| Loans, net of deferred fees and costs | 3,242,948 | 3,193,625 | 3,158,332 | 3,083,029 | 3,006,150 | |||||||||||||||
| Less: | ||||||||||||||||||||
| Allowance for loan losses | 45,571 | 45,944 | 46,327 | 46,512 | 46,935 | |||||||||||||||
| Net loans | 3,197,377 | 3,147,681 | 3,112,005 | 3,036,517 | 2,959,215 | |||||||||||||||
| Bank premises and equipment, net | 38,100 | 38,812 | 38,565 | 37,455 | 36,658 | |||||||||||||||
| Other assets | 64,589 | 60,698 | 65,488 | 71,609 | 71,061 | |||||||||||||||
| Total assets | $ | 4,741,337 | 4,740,656 | 4,644,439 | 4,582,266 | 4,589,129 | ||||||||||||||
| LIABILITIES: | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 355,783 | 347,315 | 331,425 | 327,527 | 324,277 | ||||||||||||||
| Interest-bearing checking | 713,001 | 696,137 | 682,210 | 646,862 | 643,473 | |||||||||||||||
| Savings accounts | 1,250,154 | 1,237,115 | 1,216,831 | 1,215,087 | 1,233,347 | |||||||||||||||
| Money market deposit accounts | 633,239 | 640,368 | 638,542 | 655,646 | 651,367 | |||||||||||||||
| Time deposits | 1,185,264 | 1,196,233 | 1,163,233 | 1,139,919 | 1,142,723 | |||||||||||||||
| Total deposits | 4,137,441 | 4,117,168 | 4,032,241 | 3,985,041 | 3,995,187 | |||||||||||||||
| Short-term borrowings | 170,750 | 194,738 | 189,116 | 179,957 | 181,516 | |||||||||||||||
| Accrued expenses and other liabilities | 30,687 | 28,274 | 29,638 | 27,781 | 27,409 | |||||||||||||||
| Total liabilities | 4,338,878 | 4,340,180 | 4,250,995 | 4,192,779 | 4,204,112 | |||||||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||||||||
| Capital stock | 98,964 | 98,964 | 98,945 | 98,942 | 98,927 | |||||||||||||||
| Surplus | 171,988 | 172,237 | 172,353 | 172,598 | 172,769 | |||||||||||||||
| Undivided profits | 175,721 | 171,232 | 166,745 | 162,326 | 157,832 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax | (5,927 | ) | (2,687 | ) | (4,509 | ) | (3,508 | ) | (2,611 | ) | ||||||||||
| Treasury stock at cost | (38,287 | ) | (39,270 | ) | (40,090 | ) | (40,871 | ) | (41,900 | ) | ||||||||||
| Total shareholders' equity | 402,459 | 400,476 | 393,444 | 389,487 | 385,017 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,741,337 | 4,740,656 | 4,644,439 | 4,582,266 | 4,589,129 | ||||||||||||||
| Outstanding shares (in thousands) | 95,056 | 94,956 | 94,857 | 94,785 | 94,665 | |||||||||||||||
Page | 9
NONPERFORMING ASSETS
(dollars in thousands)
(Unaudited)
| Nonperforming Assets | ||||||||||||||||||||
| 06/30/15 | 03/31/15 | 12/31/14 | 09/30/14 | 06/30/14 | ||||||||||||||||
| New York and other states* | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 3,263 | 2,489 | 3,835 | 4,226 | 5,132 | ||||||||||||||
| Real estate mortgage - 1 to 4 family | 27,366 | 28,215 | 27,221 | 29,736 | 31,433 | |||||||||||||||
| Installment | 79 | 77 | 77 | 95 | 87 | |||||||||||||||
| Total non-accrual loans | 30,708 | 30,781 | 31,133 | 34,057 | 36,652 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | 74 | 75 | 125 | 155 | 159 | |||||||||||||||
| Total nonperforming loans | 30,782 | 30,856 | 31,258 | 34,212 | 36,811 | |||||||||||||||
| Other real estate owned | 5,833 | 6,288 | 5,533 | 5,238 | 3,930 | |||||||||||||||
| Total nonperforming assets | $ | 36,615 | 37,144 | 36,791 | 39,450 | 40,741 | ||||||||||||||
| Florida | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | - | - | - | 517 | 517 | ||||||||||||||
| Real estate mortgage - 1 to 4 family | 1,678 | 2,608 | 2,740 | 2,395 | 3,578 | |||||||||||||||
| Installment | 10 | 20 | 13 | 1 | 1 | |||||||||||||||
| Total non-accrual loans | 1,688 | 2,628 | 2,753 | 2,913 | 4,096 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | - | - | - | - | - | |||||||||||||||
| Total nonperforming loans | 1,688 | 2,628 | 2,753 | 2,913 | 4,096 | |||||||||||||||
| Other real estate owned | 275 | 670 | 908 | 1,188 | 4,365 | |||||||||||||||
| Total nonperforming assets | $ | 1,963 | 3,298 | 3,661 | 4,101 | 8,461 | ||||||||||||||
| Total | ||||||||||||||||||||
| Loans in nonaccrual status: | ||||||||||||||||||||
| Commercial | $ | 3,263 | 2,489 | 3,835 | 4,743 | 5,649 | ||||||||||||||
| Real estate mortgage - 1 to 4 family | 29,044 | 30,823 | 29,961 | 32,131 | 35,011 | |||||||||||||||
| Installment | 89 | 97 | 90 | 96 | 88 | |||||||||||||||
| Total non-accrual loans | 32,396 | 33,409 | 33,886 | 36,970 | 40,748 | |||||||||||||||
| Other nonperforming real estate mortgages - 1 to 4 family | 74 | 75 | 125 | 155 | 159 | |||||||||||||||
| Total nonperforming loans | 32,470 | 33,484 | 34,011 | 37,125 | 40,907 | |||||||||||||||
| Other real estate owned | 6,108 | 6,958 | 6,441 | 6,426 | 8,295 | |||||||||||||||
| Total nonperforming assets | $ | 38,578 | 40,442 | 40,452 | 43,551 | 49,202 | ||||||||||||||
| Quarterly Net Chargeoffs (Recoveries) | ||||||||||||||||||||
| 06/30/15 | 03/31/15 | 12/31/14 | 09/30/14 | 06/30/14 | ||||||||||||||||
| New York and other states* | ||||||||||||||||||||
| Commercial | $ | 50 | 34 | (16 | ) | 124 | 13 | |||||||||||||
| Real estate mortgage - 1 to 4 family | 933 | 1,004 | 1,591 | 1,105 | 1,496 | |||||||||||||||
| Installment | 24 | 37 | 48 | 57 | 24 | |||||||||||||||
| Total net chargeoffs | $ | 1,007 | 1,075 | 1,623 | 1,286 | 1,533 | ||||||||||||||
| Florida | ||||||||||||||||||||
| Commercial | $ | (1 | ) | (1 | ) | (476 | ) | (1 | ) | (2 | ) | |||||||||
| Real estate mortgage - 1 to 4 family | 167 | 109 | 37 | 242 | 59 | |||||||||||||||
| Installment | - | - | 1 | (4 | ) | 10 | ||||||||||||||
| Total net chargeoffs | $ | 166 | 108 | (438 | ) | 237 | 67 | |||||||||||||
| Total | ||||||||||||||||||||
| Commercial | $ | 49 | 33 | (492 | ) | 123 | 11 | |||||||||||||
| Real estate mortgage - 1 to 4 family | 1,100 | 1,113 | 1,628 | 1,347 | 1,555 | |||||||||||||||
| Installment | 24 | 37 | 49 | 53 | 34 | |||||||||||||||
| Total net chargeoffs | $ | 1,173 | 1,183 | 1,185 | 1,523 | 1,600 | ||||||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| 06/30/15 | 03/31/15 | 12/31/14 | 09/30/14 | 06/30/14 | ||||||||||||||||
| Total nonperforming loans(1) | $ | 32,470 | 33,484 | 34,011 | 37,125 | 40,907 | ||||||||||||||
| Total nonperforming assets(1) | 38,578 | 40,442 | 40,452 | 43,551 | 49,202 | |||||||||||||||
| Total net chargeoffs(2) | 1,173 | 1,183 | 1,185 | 2,179 | 1,600 | |||||||||||||||
| Allowance for loan losses(1) | 45,571 | 45,944 | 46,327 | 46,512 | 46,935 | |||||||||||||||
| Nonperforming loans to total loans | 1.00 | % | 1.05 | % | 1.08 | % | 1.20 | % | 1.36 | % | ||||||||||
| Nonperforming assets to total assets | 0.81 | % | 0.85 | % | 0.87 | % | 0.95 | % | 1.07 | % | ||||||||||
| Allowance for loan losses to total loans | 1.41 | % | 1.44 | % | 1.47 | % | 1.51 | % | 1.56 | % | ||||||||||
| Coverage ratio(1) | 140.3 | % | 137.2 | % | 136.2 | % | 125.3 | % | 114.7 | % | ||||||||||
| Annualized net chargeoffs to average loans(2) | 0.15 | % | 0.15 | % | 0.15 | % | 0.29 | % | 0.22 | % | ||||||||||
| Allowance for loan losses to annualized net chargeoffs(2) | 9.7 | x | 9.6 | x | 9.8 | x | 5.3 | x | 7.3 | x | ||||||||||
* Includes New York, New Jersey, Vermont and Massachusetts.
| (1) | At period-end |
| (2) | For the period ended |
Page | 10
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-
INTEREST RATES AND INTEREST DIFFERENTIAL
| (dollars in thousands) | Three months ended | Three months ended | ||||||||||||||||||||||
| (Unaudited) | June 30, 2015 | June 30, 2014 | ||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | |||||||||||||||||||
| Balance | Rate | Balance | Rate | |||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Securities available for sale: | ||||||||||||||||||||||||
| U. S. government sponsored enterprises | $ | 114,279 | 366 | 1.28 | % | $ | 110,783 | 381 | 1.38 | % | ||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations-residential | 441,754 | 2,276 | 2.06 | 589,334 | 3,299 | 2.24 | ||||||||||||||||||
| State and political subdivisions | 1,939 | 36 | 7.36 | 3,823 | 70 | 7.32 | ||||||||||||||||||
| Corporate bonds | 956 | - | 0.00 | 1,403 | 2 | 0.48 | ||||||||||||||||||
| Small Business Administration-guaranteed participation securities | 98,894 | 503 | 2.03 | 108,072 | 539 | 1.99 | ||||||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations-commercial | 10,600 | 38 | 1.41 | 10,871 | 38 | 1.40 | ||||||||||||||||||
| Other | 685 | 4 | 2.34 | 665 | 4 | 2.41 | ||||||||||||||||||
| Total securities available for sale | 669,107 | 3,223 | 1.93 | 824,951 | 4,333 | 2.10 | ||||||||||||||||||
| Federal funds sold and other short-term Investments | 683,110 | 423 | 0.25 | 606,809 | 376 | 0.25 | ||||||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||||||
| Corporate bonds | 9,965 | 154 | 6.17 | 9,950 | 154 | 6.18 | ||||||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations-residential | 55,509 | 480 | 3.46 | 70,377 | 577 | 3.28 | ||||||||||||||||||
| Total held to maturity securities | 65,474 | 634 | 3.87 | 80,327 | 731 | 3.64 | ||||||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,466 | 118 | 4.99 | 10,937 | 128 | 4.68 | ||||||||||||||||||
| Commercial loans | 210,424 | 2,710 | 5.15 | 221,819 | 2,842 | 5.12 | ||||||||||||||||||
| Residential mortgage loans | 2,648,320 | 29,371 | 4.44 | 2,401,020 | 27,548 | 4.59 | ||||||||||||||||||
| Home equity lines of credit | 354,053 | 3,092 | 3.50 | 339,884 | 3,064 | 3.62 | ||||||||||||||||||
| Installment loans | 8,226 | 176 | 8.60 | 5,827 | 167 | 11.47 | ||||||||||||||||||
| Loans, net of unearned income | 3,221,023 | 35,349 | 4.39 | 2,968,550 | 33,621 | 4.53 | ||||||||||||||||||
| Total interest earning assets | 4,648,180 | 39,747 | 3.42 | 4,491,574 | 39,189 | 3.49 | ||||||||||||||||||
| Allowance for loan losses | (46,190 | ) | (47,389 | ) | ||||||||||||||||||||
| Cash & non-interest earning assets | 137,329 | 135,326 | ||||||||||||||||||||||
| Total assets | $ | 4,739,319 | $ | 4,579,511 | ||||||||||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Interest bearing checking accounts | $ | 706,767 | 111 | 0.06 | % | $ | 632,266 | 89 | 0.06 | % | ||||||||||||||
| Money market accounts | 635,347 | 547 | 0.35 | 655,009 | 618 | 0.38 | ||||||||||||||||||
| Savings | 1,249,865 | 599 | 0.19 | 1,240,158 | 592 | 0.19 | ||||||||||||||||||
| Time deposits | 1,190,234 | 2,500 | 0.84 | 1,144,165 | 2,035 | 0.71 | ||||||||||||||||||
| Total interest bearing deposits | 3,782,213 | 3,757 | 0.40 | 3,671,598 | 3,334 | 0.36 | ||||||||||||||||||
| Short-term borrowings | 182,829 | 300 | 0.66 | 189,802 | 342 | 0.72 | ||||||||||||||||||
| Total interest bearing liabilities | 3,965,042 | 4,057 | 0.41 | 3,861,400 | 3,676 | 0.38 | ||||||||||||||||||
| Demand deposits | 344,982 | 316,759 | ||||||||||||||||||||||
| Other liabilities | 25,591 | 22,325 | ||||||||||||||||||||||
| Shareholders' equity | 403,704 | 379,027 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,739,319 | $ | 4,579,511 | ||||||||||||||||||||
| Net interest income, tax equivalent | 35,690 | 35,513 | ||||||||||||||||||||||
| Net interest spread | 3.01 | % | 3.11 | % | ||||||||||||||||||||
| Net interest margin (net interest income to total interest earning assets) | 3.07 | % | 3.16 | % | ||||||||||||||||||||
| Tax equivalent adjustment | (19 | ) | (33 | ) | ||||||||||||||||||||
| Net interest income | 35,671 | 35,480 | ||||||||||||||||||||||
Page | 11
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY-
INTEREST RATES AND INTEREST DIFFERENTIAL
| (dollars in thousands) | Six months ended | Six months ended | ||||||||||||||||||||||
| (Unaudited) | June 30, 2015 | June 30, 2014 | ||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | |||||||||||||||||||
| Balance | Rate | Balance | Rate | |||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Securities available for sale: | ||||||||||||||||||||||||
| U. S. government sponsored enterprises | $ | 96,172 | 578 | 1.20 | % | $ | 139,907 | 887 | 1.27 | % | ||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations-residential | 459,980 | 4,669 | 2.03 | 567,700 | 6,377 | 2.25 | ||||||||||||||||||
| State and political subdivisions | 2,015 | 74 | 7.31 | 4,971 | 175 | 7.04 | ||||||||||||||||||
| Corporate bonds | 1,226 | 1 | 0.16 | 4,956 | 61 | 2.47 | ||||||||||||||||||
| Small Business Administration-guaranteed participation securities | 100,270 | 1,025 | 2.05 | 109,079 | 1,095 | 2.01 | ||||||||||||||||||
| Mortgage backed securities and | ||||||||||||||||||||||||
| collateralized mortgage obligations-commercial | 10,635 | 75 | 1.41 | 10,904 | 76 | 1.39 | ||||||||||||||||||
| Other | 685 | 8 | 2.34 | 662 | 8 | 2.42 | ||||||||||||||||||
| Total securities available for sale | 670,983 | 6,430 | 1.92 | 838,179 | 8,679 | 2.07 | ||||||||||||||||||
| Federal funds sold and other short-term Investments | 668,269 | 823 | 0.25 | 591,167 | 727 | 0.25 | ||||||||||||||||||
| Held to maturity securities: | ||||||||||||||||||||||||
| Corporate bonds | 9,964 | 308 | 6.17 | 9,948 | 308 | 6.18 | ||||||||||||||||||
| Mortgage backed securities and collateralized mortgage obligations-residential | 57,419 | 958 | 3.34 | 72,340 | 1,202 | 3.32 | ||||||||||||||||||
| Total held to maturity securities | 67,383 | 1,266 | 3.76 | 82,288 | 1,510 | 3.67 | ||||||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,348 | 234 | 5.01 | 10,720 | 261 | 4.87 | ||||||||||||||||||
| Commercial loans | 214,713 | 5,506 | 5.13 | 222,074 | 5,639 | 5.08 | ||||||||||||||||||
| Residential mortgage loans | 2,621,417 | 58,329 | 4.46 | 2,378,199 | 54,530 | 4.59 | ||||||||||||||||||
| Home equity lines of credit | 353,161 | 6,153 | 3.51 | 340,281 | 6,000 | 3.56 | ||||||||||||||||||
| Installment loans | 8,011 | 351 | 8.84 | 5,712 | 334 | 11.78 | ||||||||||||||||||
| Loans, net of unearned income | 3,197,302 | 70,339 | 4.41 | 2,946,266 | 66,503 | 4.52 | ||||||||||||||||||
| Total interest earning assets | 4,613,285 | 79,092 | 3.44 | 4,468,620 | 77,680 | 3.48 | ||||||||||||||||||
| Allowance for loan losses | (46,392 | ) | (47,802 | ) | ||||||||||||||||||||
| Cash & non-interest earning assets | 138,319 | 132,906 | ||||||||||||||||||||||
| Total assets | $ | 4,705,212 | $ | 4,553,724 | ||||||||||||||||||||
| Liabilities and shareholders' equity | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Interest bearing checking accounts | $ | 692,445 | 216 | 0.06 | % | $ | 619,076 | 173 | 0.06 | % | ||||||||||||||
| Money market accounts | 636,596 | 1,164 | 0.37 | 650,828 | 1,217 | 0.38 | ||||||||||||||||||
| Savings | 1,239,737 | 1,257 | 0.20 | 1,232,803 | 1,355 | 0.22 | ||||||||||||||||||
| Time deposits | 1,185,363 | 4,934 | 0.84 | 1,142,001 | 3,986 | 0.70 | ||||||||||||||||||
| Total interest bearing deposits | 3,754,141 | 7,571 | 0.41 | 3,644,708 | 6,731 | 0.37 | ||||||||||||||||||
| Short-term borrowings | 187,560 | 646 | 0.69 | 195,954 | 735 | 0.76 | ||||||||||||||||||
| Total interest bearing liabilities | 3,941,701 | 8,217 | 0.42 | 3,840,662 | 7,466 | 0.39 | ||||||||||||||||||
| Demand deposits | 336,741 | 316,386 | ||||||||||||||||||||||
| Other liabilities | 25,817 | 22,499 | ||||||||||||||||||||||
| Shareholders' equity | 400,953 | 374,177 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,705,212 | $ | 4,553,724 | ||||||||||||||||||||
| Net interest income, tax equivalent | 70,875 | 70,214 | ||||||||||||||||||||||
| Net interest spread | 3.02 | % | 3.09 | % | ||||||||||||||||||||
| Net interest margin (net interest incometo total interest earning assets) | 3.08 | % | 3.15 | % | ||||||||||||||||||||
| Tax equivalent adjustment | (39 | ) | (78 | ) | ||||||||||||||||||||
| Net interest income | 70,836 | 70,136 | ||||||||||||||||||||||
Page | 12
Non-GAAP Financial Measures Reconciliation
Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of a building, nonperforming loans and securities from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.
Core net income (“core earnings”) and core net income (“core earnings”) per share are non-GAAP financial measures derived from GAAP-based amounts. We calculate core earnings by excluding the net after-tax gain on the sale of the proposed Florida operations building during the first quarter of 2014, the net after-tax gain on an significant sale of an ORE property in the second quarter of 2014 and net after-tax gains on the sale of non-performing loans in both the second quarter of 2014 and the second quarter of 2015 from net income and from net income per share. We believe that this provides a reasonable measure of core net income (earnings).
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial position, results and ratios. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.
Page | 13
NON-GAAP FINANCIAL MEASURES RECONCILIATION
| (dollars in thousands, except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| 06/30/15 | 03/31/15 | 06/30/14 | ||||||||||
| Tangible Book Value Per Share | ||||||||||||
| Equity | $ | 402,459 | 400,476 | 385,017 | ||||||||
| Less: Intangible assets | 553 | 553 | 553 | |||||||||
| Tangible equity | 401,906 | 399,923 | 384,464 | |||||||||
| Shares outstanding | 95,056 | 94,956 | 94,665 | |||||||||
| Tangible book value per share | 4.23 | 4.21 | 4.06 | |||||||||
| Book value per share | 4.23 | 4.22 | 4.07 | |||||||||
| Tangible Equity to Tangible Assets | ||||||||||||
| Total Assets | 4,741,337 | 4,740,656 | 4,589,129 | |||||||||
| Less: Intangible assets | 553 | 553 | 553 | |||||||||
| Tangible assets | 4,740,784 | 4,740,103 | 4,588,576 | |||||||||
| Tangible Equity to Tangible Assets | 8.48 | % | 8.44 | % | 8.38 | % | ||||||
| Equity to Assets | 8.49 | % | 8.45 | % | 8.39 | % | ||||||
| 3 Months Ended | 6 Months Ended | |||||||||||||||||||
| Efficiency Ratio | 06/30/15 | 03/31/15 | 06/30/14 | 06/30/15 | 06/30/14 | |||||||||||||||
| Net interest income | $ | 35,671 | 35,165 | 35,480 | 70,836 | 70,136 | ||||||||||||||
| Taxable equivalent adjustment | 19 | 20 | 33 | 39 | 78 | |||||||||||||||
| Net interest income (fully taxable equivalent) | 35,690 | 35,185 | 35,513 | 70,875 | 70,214 | |||||||||||||||
| Non-interest income | 4,454 | 4,623 | 4,505 | 9,077 | 10,264 | |||||||||||||||
| Less: Net gain on sale of building and nonperforming loans | 60 | - | 163 | 60 | 1,719 | |||||||||||||||
| Less: Net gain on securities | - | 249 | - | 249 | 6 | |||||||||||||||
| Revenue used for efficiency ratio | 40,084 | 39,559 | 39,855 | 79,643 | 78,753 | |||||||||||||||
| Total noninterest expense | 22,131 | 21,857 | 19,437 | 43,988 | 40,238 | |||||||||||||||
| Less: Other real estate expense, net | 201 | 424 | (1,688 | ) | 625 | (833 | ) | |||||||||||||
| Expense used for efficiency ratio | 21,930 | 21,433 | 21,125 | 43,363 | 41,071 | |||||||||||||||
| Efficiency Ratio | 54.71 | % | 54.18 | % | 53.00 | % | 54.45 | % | 52.15 | % | ||||||||||
| 3 Months Ended | 6 Months Ended | |||||||||||||||||||
| Core Net Income | 06/30/15 | 03/31/15 | 06/30/14 | 06/30/15 | 06/30/14 | |||||||||||||||
| Net income | $ | 10,727 | 10,715 | 11,808 | 21,442 | 22,819 | ||||||||||||||
| Less: Gain on sale of building, nonperforming loans, and significant ORE gain, net of tax | 37 | - | 1,618 | 37 | 2,684 | |||||||||||||||
| Core net income | 10,690 | 10,715 | 10,190 | 21,405 | 20,135 | |||||||||||||||
| Average basic shares outstanding (in thousands) | 95,056 | 94,947 | 94,559 | 95,002 | 94,536 | |||||||||||||||
| Average diluted shares outstanding (in thousands) | 95,190 | 95,074 | 94,675 | 95,132 | 94,658 | |||||||||||||||
| Net income per common share: | ||||||||||||||||||||
| - Basic | $ | 0.113 | 0.113 | 0.125 | 0.226 | 0.241 | ||||||||||||||
| - Diluted | 0.113 | 0.113 | 0.125 | 0.225 | 0.241 | |||||||||||||||
| Core net income per common share: | ||||||||||||||||||||
| - Basic | $ | 0.112 | 0.113 | 0.108 | 0.225 | 0.213 | ||||||||||||||
| - Diluted | 0.112 | 0.113 | 0.108 | 0.225 | 0.213 | |||||||||||||||
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