Reconciliation: Return on Tangible Equity Reconciliation: Return on Tangible Equity Return on average tangible equity is a non-GAAP-based financial measure calculated using non-GAAP- based amounts. The most directly comparable measure is return on average equity which is calculated using GAAP-based amounts. We calculate return on average tangible equity by excluding the balance of intangible assets and their related amortization expense from our calculation of return on average equity. Management uses the return on average tangible equity in order to review our core operating results. Management believes that this is a better measure of our performance. In addition, this is consistent with the treatment by bank regulatory agencies, which excludes goodwill and other intangible assets from the calculation of risk-based capital ratios. A reconciliation of return on average equity to return on average tangible equity is set forth below. (dollars in thousands) 2012 2011 1Q2013 1Q2012 Net income $141,172 $54,905 $42,399 $23,473 Amortization of intangibles, net of taxes at 35% 8,141 5,658 2,124 1,789 Net tangible income (numerator) $149,313 $60,563 $44,523 $25,262 Shareholders’ equity $2,511,604 $2,055,717 $2,614,319 $2,348,326 Goodwill and other intangible assets (1,270,053) (1,048,014) (1,312,662) (1,132,344) Tangible common equity (denominator) $1,241,551 $1,007,703 $1,301,657 $1,215,982 Return on equity (GAAP basis) 5.62% 2.67% 6.58% 4.02% Effect of goodwill and other intangibles 6.41% 3.34% 7.29% 4.34% Return on Average Tangible Equity 12.03% 6.01% 13.87% 8.36% 28 |
