Exhibit 99.1
NASDAQ: WASH
Contact: Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: July 23, 2018
FOR IMMEDIATE RELEASE
Washington Trust Reports Record Second Quarter 2018 Earnings
WESTERLY, R.I., July 23, 2018 (GLOBE NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced second quarter 2018 net income of $17.7 million, or $1.01 per diluted share, compared to net income of $16.2 million, or $0.93 per diluted share, reported for the first quarter of 2018.
“Washington Trust is pleased to report another strong performance, with record earnings and diluted earnings per share for the second quarter of 2018,” stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer. “Our continued profitability and solid financial metrics reflect the strength and stability of our corporation, as evidenced by our recent recognition by American Banker as one of the nation’s top performing mid-tier banks.”
Selected highlights for second quarter 2018 include:
| • | Profitability ratios were at their highest levels in over 15 years, with returns on average equity and average assets of 16.99% and 1.53%, respectively. |
| • | Total revenues (net interest income and noninterest income) were up by 3% on a linked quarter basis and amounted to $49.1 million, a record level for Washington Trust. |
| • | Total loans were up by $103 million, or 3%, from the end of the prior quarter and up by $290 million, or 9%, from a year ago. |
| • | Total deposits were up by $65 million, or 2%, from the end of the first quarter and up by $300 million, or 10%, from a year ago. |
| • | In June, Washington Trust declared a quarterly dividend of 43 cents per share. Year-to-date dividends declared amounted to 86 cents per share, an increase of 10 cents per share, or 13%, from the same period a year ago. |
Net Interest Income
Net interest income was $33.1 million for the second quarter of 2018, up by $1.3 million, or 4%, from the first quarter of 2018. Included in net interest income in the second quarter of 2018 was loan prepayment fee income of $483 thousand, compared to $46 thousand in the first quarter of 2018. The net interest margin was 3.05% for the second quarter, up by 2 basis points from the preceding quarter. Excluding the impact of loan prepayment fee income in each period, the net interest margin was 3.01%, down by 2 basis points from the preceding quarter.
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Washington Trust
July 23, 2018
Significant linked quarter changes included:
| • | Average interest-earning assets increased by $91 million, largely due to loan growth. The yield on interest-earning assets for the second quarter was 3.98%, up by 14 basis points from the preceding quarter. Excluding the impact of loan prepayment fee income in each period, the yield on interest-earning assets was 3.94%, up by 10 basis points from the preceding quarter. The yield benefited from increased market rates of interest. |
| • | Average interest-bearing liabilities increased by $100 million, reflecting increases in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances) and in-market time deposits. The cost of interest-bearing funds for the second quarter was 1.14%, up by 14 basis points from the preceding quarter, largely due to higher rates paid on promotional time certificates of deposit and wholesale funding liabilities. |
Noninterest Income
Noninterest income totaled $16.0 million for the second quarter of 2018, up by $250 thousand, or 2%, from the first quarter of 2018. Significant linked quarter changes included:
| • | Wealth management revenues were $9.6 million for the second quarter of 2018, down by $671 thousand, or 7%, on a linked quarter basis. Asset-based revenues were down by $819 thousand, or 8%, on a linked quarter basis. The decline in asset-based revenues was largely attributable to client outflows that commenced in the latter portion of the first quarter of 2018 and continued into the second quarter. These outflows were associated with the previously reported loss of certain client-facing personnel in the preceding quarter. The decline in asset-based revenues was partially offset by an increase of $148 thousand in transaction-based revenues, largely attributable to tax preparation revenue, which is generally concentrated in the second quarter. |
Wealth management assets under administration were $6.2 billion at June 30, 2018, down by $124 million, or 2%, from the balance at March 31, 2018, with $257 million of net client outflows, partially offset by $133 million of net investment appreciation and income.
| • | Mortgage banking revenues were $2.9 million for the second quarter of 2018, up by $103 thousand, or 4%, from the preceding quarter. Residential mortgage loans sold to the secondary market were $105 million in the second quarter, up by $8 million from the $97 million sold in the first quarter of 2018. |
| • | Loan related derivative income was $668 thousand for the second quarter of 2018, up by $527 thousand from the preceding quarter, due to higher volume of commercial borrower loan related derivative transactions occurring in the second quarter. |
Noninterest Expenses
Noninterest expenses totaled $26.3 million for the second quarter of 2018, down by $842 thousand, or 3%, from the first quarter. The linked quarter comparison of noninterest expenses was impacted by the following:
| • | As previously reported in the first quarter of 2018, one-time cash incentive bonuses of approximately $450 thousand were expensed and paid to non-executive employees as tax reform provided Washington Trust with an opportunity to further recognize and invest in our employees with special compensation enhancements. |
| • | In the second quarter of 2018, software system implementation expenses of $114 thousand were recognized, compared to $681 thousand recognized in the preceding quarter. These were classified as other expenses and primarily related to |
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Washington Trust
July 23, 2018
the conversion of our wealth management accounting system, which was completed in April 2018.
Excluding the aforementioned items, noninterest expenses were up by $175 thousand, or 1%, on a linked quarter basis. The linked quarter change included an increase in outsourced services and a decrease in equipment expenses, both of which were mainly due to the expansion of services provided by third party vendors.
Income tax expense totaled $4.7 million for the second quarter of 2018, up by $488 thousand from the preceding quarter, largely due to a higher level of pre-tax income. The effective tax rate for the second quarter of 2018 was 21.2%, compared to 20.8% for the preceding quarter. The linked quarter increase in the effective tax rate was due to a lower level of excess tax benefits on the settlement of share-based awards.
Investment Securities
The securities portfolio totaled $788 million at June 30, 2018, down by $12 million from the balance at March 31, 2018. The decline was due to routine principal pay-downs on mortgage-backed securities, calls and maturities of debt securities and a temporary decline in the fair value of available for sale securities. The overall decline was partially offset by purchases of debt securities in the second quarter totaling $21 million, with a weighted average yield of 3.58%. Investment securities represented 17% of total assets at June 30, 2018.
Loans
Total loans amounted to $3.5 billion at June 30, 2018, up by $103 million, or 3%, from the end of the first quarter. The residential real estate loan portfolio increased by $78 million, or 6%, from the balance at March 31, 2018 as origination volume was strong in the quarter. Residential real estate loans originated for retention in portfolio were $128 million during the second quarter of 2018, compared to $68 million in the preceding quarter. Total commercial loans increased by $30 million, or 2%, reflecting an increase of $28 million in the commercial and industrial ("C&I") portfolio, including approximately $22 million of completed commercial construction loans that were transferred to the C&I portfolio in the quarter. Second quarter commercial real estate loan originations and advances were essentially offset by approximately $52 million of payoffs and the transfer of the commercial construction loans to the C&I portfolio in the quarter. Total consumer loans declined by $4 million, or 1%, from the end of the first quarter.
Deposits and Borrowings
Total deposits amounted to $3.3 billion at June 30, 2018, up by $65 million, or 2%, from the end of the preceding quarter. Included in total deposits were wholesale brokered time deposits of $446 million, which increased by $41 million from the balance at March 31, 2018. Excluding the wholesale brokered time deposits, in-market deposits increased by $24 million from the end of the preceding quarter. We experienced growth in in-market time deposits resulting from a promotional campaign that began in April 2018 and we implemented a program in June 2018 to transition approximately $70 million of wealth management client assets, previously held in outside accounts, into insured interest-bearing demand deposits on Washington Trust's balance sheet. These increases were partially offset by a decline in money market and demand account balances, reflecting seasonal outflows of various institutional and governmental depositors based on their underlying business cycles.
Federal Home Loan Bank advances amounted to $901 million at June 30, 2018, up by $92 million from the balance at March 31, 2018 to fund asset growth.
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Washington Trust
July 23, 2018
Asset Quality
Total nonaccrual loans amounted to $11.7 million, or 0.34% of total loans, at June 30, 2018, up from $10.5 million, or 0.31% of total loans, at March 31, 2018. Total past due loans amounted to $16.7 million, or 0.48% of total loans, at June 30, 2018, down from $19.4 million, or 0.57% of total loans, at March 31, 2018.
Based on the assessment of loan and credit quality metrics, loss exposures and changes in the loan portfolio during the quarter, a loan loss provision totaling $400 thousand was recognized in the second quarter of 2018. There was no loan loss provision recognized in the preceding quarter. Net charge-offs were nominal in the second quarter of 2018, totaling $90 thousand, compared to $624 thousand in the preceding quarter. The allowance for loan losses amounted to $26.2 million, or 0.75% of total loans, at June 30, 2018, compared to $25.9 million, or 0.76% of total loans, at March 31, 2018.
Capital and Dividends
Total shareholders' equity was $422 million at June 30, 2018, up by $8.5 million from March 31, 2018, reflecting net income of $17.7 million, offset by $7.5 million in dividends declared and a $2.4 million reduction in the accumulated comprehensive income component of shareholders' equity primarily resulting from a decline in the fair value of available for sale securities.
Capital levels at June 30, 2018 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.61% at June 30, 2018, compared to 12.56% at March 31, 2018. Book value per share amounted to $24.40 at June 30, 2018, compared to $23.93 at March 31, 2018.
The Board of Directors declared a quarterly dividend of 43 cents per share for the quarter ended June 30, 2018. The dividend was paid on July 13, 2018 to shareholders of record on July 2, 2018.
Conference Call
Washington Trust will host a conference call to discuss its second quarter results, business highlights and outlook on Tuesday, July 24, 2018 at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-877-407-9208. An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13681368; the audio replay will be available through August 3, 2018. Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through September 30, 2018.
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Washington Trust
July 23, 2018
Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company. Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies. Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts. The Corporation’s common stock trades on NASDAQ under the symbol WASH. Investor information is available on the Corporation’s web site at http://ir.washtrust.com.
Forward-Looking Statements
This press release contains statements that are “forward-looking statements”. We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
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| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
| Assets: | |||||||||||||||
| Cash and due from banks | $132,068 | $85,680 | $79,853 | $128,580 | $117,608 | ||||||||||
| Short-term investments | 2,624 | 2,322 | 3,070 | 2,600 | 2,324 | ||||||||||
| Mortgage loans held for sale | 35,207 | 19,269 | 26,943 | 28,484 | 32,784 | ||||||||||
| Securities: | |||||||||||||||
| Available for sale, at fair value | 776,693 | 787,842 | 780,954 | 714,355 | 749,486 | ||||||||||
| Held to maturity, at amortized cost | 11,412 | 11,973 | 12,541 | 13,241 | 13,942 | ||||||||||
| Total securities | 788,105 | 799,815 | 793,495 | 727,596 | 763,428 | ||||||||||
| Federal Home Loan Bank stock, at cost | 46,281 | 41,127 | 40,517 | 42,173 | 44,640 | ||||||||||
| Loans: | |||||||||||||||
| Total loans | 3,490,230 | 3,387,406 | 3,374,071 | 3,323,078 | 3,200,100 | ||||||||||
| Less allowance for loan losses | 26,174 | 25,864 | 26,488 | 27,308 | 26,662 | ||||||||||
| Net loans | 3,464,056 | 3,361,542 | 3,347,583 | 3,295,770 | 3,173,438 | ||||||||||
| Premises and equipment, net | 28,377 | 28,316 | 28,333 | 28,591 | 28,508 | ||||||||||
| Investment in bank-owned life insurance | 79,319 | 73,782 | 73,267 | 72,729 | 72,183 | ||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,645 | 8,893 | 9,140 | 9,388 | 9,642 | ||||||||||
| Other assets | 88,651 | 81,671 | 63,740 | 69,410 | 67,065 | ||||||||||
| Total assets | $4,737,242 | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | ||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing deposits | $577,656 | $601,478 | $578,410 | $575,866 | $533,147 | ||||||||||
| Interest-bearing deposits | 2,743,955 | 2,654,956 | 2,664,297 | 2,581,215 | 2,488,042 | ||||||||||
| Total deposits | 3,321,611 | 3,256,434 | 3,242,707 | 3,157,081 | 3,021,189 | ||||||||||
| Federal Home Loan Bank advances | 901,053 | 808,677 | 791,356 | 814,045 | 869,733 | ||||||||||
| Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||
| Other liabilities | 70,326 | 65,453 | 59,822 | 61,195 | 55,884 | ||||||||||
| Total liabilities | 4,315,671 | 4,153,245 | 4,116,566 | 4,055,002 | 3,969,487 | ||||||||||
| Shareholders’ Equity: | |||||||||||||||
| Common stock | 1,080 | 1,079 | 1,077 | 1,076 | 1,076 | ||||||||||
| Paid-in capital | 118,883 | 118,172 | 117,961 | 117,189 | 116,484 | ||||||||||
| Retained earnings | 336,670 | 326,505 | 317,756 | 312,334 | 306,151 | ||||||||||
| Accumulated other comprehensive loss | (35,062 | ) | (32,675 | ) | (23,510 | ) | (16,371 | ) | (17,669 | ) | |||||
| Total shareholders’ equity | 421,571 | 413,081 | 413,284 | 414,228 | 406,042 | ||||||||||
| Total liabilities and shareholders’ equity | $4,737,242 | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | ||||||||||
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| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | ||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
| Interest income: | ||||||||||||||||||||||
| Interest and fees on loans | $37,101 | $34,578 | $33,459 | $32,509 | $31,642 | $71,679 | $61,994 | |||||||||||||||
| Taxable interest on securities | 5,358 | 5,118 | 4,719 | 4,655 | 4,844 | 10,476 | 9,553 | |||||||||||||||
| Nontaxable interest on securities | 20 | 23 | 24 | 41 | 72 | 43 | 184 | |||||||||||||||
| Dividends on Federal Home Loan Bank stock | 550 | 516 | 481 | 467 | 439 | 1,066 | 826 | |||||||||||||||
| Other interest income | 257 | 205 | 217 | 197 | 156 | 462 | 260 | |||||||||||||||
| Total interest and dividend income | 43,286 | 40,440 | 38,900 | 37,869 | 37,153 | 83,726 | 72,817 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||||
| Deposits | 5,254 | 4,422 | 4,136 | 3,835 | 3,591 | 9,676 | 7,093 | |||||||||||||||
| Federal Home Loan Bank advances | 4,707 | 3,983 | 3,708 | 3,816 | 3,509 | 8,690 | 6,853 | |||||||||||||||
| Junior subordinated debentures | 214 | 183 | 167 | 159 | 149 | 397 | 287 | |||||||||||||||
| Other interest expense | — | — | — | — | — | — | 1 | |||||||||||||||
| Total interest expense | 10,175 | 8,588 | 8,011 | 7,810 | 7,249 | 18,763 | 14,234 | |||||||||||||||
| Net interest income | 33,111 | 31,852 | 30,889 | 30,059 | 29,904 | 64,963 | 58,583 | |||||||||||||||
| Provision for loan losses | 400 | — | 200 | 1,300 | 700 | 400 | 1,100 | |||||||||||||||
| Net interest income after provision for loan losses | 32,711 | 31,852 | 30,689 | 28,759 | 29,204 | 64,563 | 57,483 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||||
| Wealth management revenues | 9,602 | 10,273 | 9,914 | 10,013 | 9,942 | 19,875 | 19,419 | |||||||||||||||
| Mortgage banking revenues | 2,941 | 2,838 | 3,097 | 3,036 | 2,919 | 5,779 | 5,259 | |||||||||||||||
| Service charges on deposit accounts | 903 | 863 | 946 | 942 | 901 | 1,766 | 1,784 | |||||||||||||||
| Card interchange fees | 961 | 847 | 904 | 894 | 902 | 1,808 | 1,704 | |||||||||||||||
| Income from bank-owned life insurance | 537 | 515 | 537 | 546 | 542 | 1,052 | 1,078 | |||||||||||||||
| Loan related derivative income | 668 | 141 | 470 | 1,452 | 1,144 | 809 | 1,292 | |||||||||||||||
| Other income | 381 | 266 | 342 | 400 | 456 | 647 | 780 | |||||||||||||||
| Total noninterest income | 15,993 | 15,743 | 16,210 | 17,283 | 16,806 | 31,736 | 31,316 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||
| Salaries and employee benefits | 17,304 | 17,772 | 17,194 | 17,362 | 17,418 | 35,076 | 34,335 | |||||||||||||||
| Net occupancy | 1,930 | 2,002 | 1,859 | 1,928 | 1,767 | 3,932 | 3,734 | |||||||||||||||
| Outsourced services | 2,350 | 1,873 | 1,960 | 1,793 | 1,710 | 4,223 | 3,167 | |||||||||||||||
| Equipment | 1,069 | 1,180 | 1,198 | 1,380 | 1,313 | 2,249 | 2,780 | |||||||||||||||
| Legal, audit and professional fees | 555 | 726 | 562 | 534 | 582 | 1,281 | 1,198 | |||||||||||||||
| FDIC deposit insurance costs | 422 | 404 | 389 | 308 | 469 | 826 | 950 | |||||||||||||||
| Advertising and promotion | 329 | 177 | 466 | 416 | 362 | 506 | 599 | |||||||||||||||
| Amortization of intangibles | 247 | 248 | 248 | 253 | 257 | 495 | 534 | |||||||||||||||
| Change in fair value of contingent consideration | — | — | (333 | ) | — | — | — | (310 | ) | |||||||||||||
| Other expenses | 2,082 | 2,748 | 2,211 | 2,780 | 2,428 | 4,830 | 4,605 | |||||||||||||||
| Total noninterest expense | 26,288 | 27,130 | 25,754 | 26,754 | 26,306 | 53,418 | 51,592 | |||||||||||||||
| Income before income taxes | 22,416 | 20,465 | 21,145 | 19,288 | 19,704 | 42,881 | 37,207 | |||||||||||||||
| Income tax expense | 4,742 | 4,254 | 13,163 | 6,326 | 6,505 | 8,996 | 12,226 | |||||||||||||||
| Net income | $17,674 | $16,211 | $7,982 | $12,962 | $13,199 | $33,885 | $24,981 | |||||||||||||||
| Net income available to common shareholders | $17,636 | $16,173 | $7,958 | $12,934 | $13,170 | $33,809 | $24,925 | |||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||
| Basic | 17,272 | 17,234 | 17,223 | 17,212 | 17,206 | 17,253 | 17,196 | |||||||||||||||
| Diluted | 17,387 | 17,345 | 17,349 | 17,318 | 17,316 | 17,384 | 17,312 | |||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||
| Basic | $1.02 | $0.94 | $0.46 | $0.75 | $0.77 | $1.96 | $1.45 | |||||||||||||||
| Diluted | $1.01 | $0.93 | $0.46 | $0.75 | $0.76 | $1.94 | $1.44 | |||||||||||||||
| Cash dividends declared per share | $0.43 | $0.43 | $0.39 | $0.39 | $0.38 | $0.86 | $0.76 | |||||||||||||||
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| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
| Share and Equity Related Data: | |||||||||||||||
| Book value per share | $24.40 | $23.93 | $23.99 | $24.06 | $23.59 | ||||||||||
Tangible book value per share - Non-GAAP (1) | $20.20 | $19.71 | $19.75 | $19.81 | $19.32 | ||||||||||
| Market value per share | $58.10 | $53.75 | $53.25 | $57.25 | $51.55 | ||||||||||
| Shares issued and outstanding at end of period | 17,278 | 17,262 | 17,227 | 17,214 | 17,210 | ||||||||||
| Capital Ratios (2): | |||||||||||||||
| Tier 1 risk-based capital | 11.84 | % | 11.78 | % | 11.65 | % | 11.69 | % | 11.92 | % | |||||
| Total risk-based capital | 12.61 | % | 12.56 | % | 12.45 | % | 12.53 | % | 12.78 | % | |||||
| Tier 1 leverage ratio | 8.87 | % | 8.84 | % | 8.79 | % | 8.83 | % | 8.78 | % | |||||
| Common equity tier 1 | 11.20 | % | 11.13 | % | 10.99 | % | 11.02 | % | 11.23 | % | |||||
| Balance Sheet Ratios: | |||||||||||||||
| Equity to assets | 8.90 | % | 9.05 | % | 9.12 | % | 9.27 | % | 9.28 | % | |||||
Tangible equity to tangible assets - Non-GAAP (1) | 7.48 | % | 7.57 | % | 7.63 | % | 7.76 | % | 7.73 | % | |||||
| Loans to deposits (3) | 105.3 | % | 103.8 | % | 104.1 | % | 105.3 | % | 106.1 | % | |||||
| For the Six Months Ended | |||||||||||||||
| For the Three Months Ended | |||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | |||||||||
| Performance Ratios (4): | |||||||||||||||
Net interest margin (5) | 3.05 | % | 3.03 | % | 2.95 | % | 2.93 | % | 2.97 | % | 3.04 | % | 2.92 | % | |
| Return on average assets (net income divided by average assets) | 1.53 | % | 1.45 | % | 0.71 | % | 1.17 | % | 1.22 | % | 1.49 | % | 1.16 | % | |
Return on average tangible assets - Non-GAAP (1) | 1.56 | % | 1.48 | % | 0.72 | % | 1.19 | % | 1.24 | % | 1.52 | % | 1.18 | % | |
| Return on average equity (net income available for common shareholders divided by average equity) | 16.99 | % | 15.96 | % | 7.56 | % | 12.43 | % | 13.07 | % | 16.48 | % | 12.54 | % | |
Return on average tangible equity - Non-GAAP (1) | 20.58 | % | 19.40 | % | 9.17 | % | 15.12 | % | 15.99 | % | 20.00 | % | 15.38 | % | |
Efficiency ratio (6) | 53.5 | % | 57.0 | % | 54.7 | % | 56.5 | % | 56.3 | % | 55.2 | % | 57.4 | % | |
| (1) | See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document. |
| (2) | Estimated for June 30, 2018 and actuals for the remaining periods. |
| (3) | Period-end balances of net loans and mortgage loans held as a percentage of total deposits. |
| (4) | Annualized based on the actual number of days in the period. |
| (5) | Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets. |
| (6) | Total noninterest expense as percentage of total revenues (net interest income and noninterest income). |
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| SELECTED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
| Wealth Management Results | ||||||||||||||||||||||
| Wealth Management Revenues: | ||||||||||||||||||||||
| Asset-based revenues | $9,136 | $9,955 | $9,686 | $9,791 | $9,401 | $19,091 | $18,648 | |||||||||||||||
| Transaction-based revenues | 466 | 318 | 228 | 222 | 541 | 784 | 771 | |||||||||||||||
| Total wealth management revenues | $9,602 | $10,273 | $9,914 | $10,013 | $9,942 | $19,875 | $19,419 | |||||||||||||||
| Assets Under Administration (AUA): | ||||||||||||||||||||||
| Balance at beginning of period | $6,343,720 | $6,714,637 | $6,587,899 | $6,403,501 | $6,243,301 | $6,714,637 | $6,063,293 | |||||||||||||||
| Net investment appreciation (depreciation) & income | 133,450 | (32,024 | ) | 163,681 | 270,549 | 162,924 | 101,426 | 383,347 | ||||||||||||||
| Net client asset flows | (257,015 | ) | (338,893 | ) | (36,943 | ) | (86,151 | ) | (2,724 | ) | (595,908 | ) | (43,139 | ) | ||||||||
| Balance at end of period | $6,220,155 | $6,343,720 | $6,714,637 | $6,587,899 | $6,403,501 | $6,220,155 | $6,403,501 | |||||||||||||||
| Percentage of AUA that are managed assets | 92% | 92% | 93% | 92% | 93% | 92% | 93% | |||||||||||||||
| Mortgage Banking Results | ||||||||||||||||||||||
| Mortgage Banking Revenues: | ||||||||||||||||||||||
| Gains & commissions on loan sales, net | $2,786 | $2,679 | $2,987 | $2,952 | $2,784 | $5,465 | $5,052 | |||||||||||||||
| Residential mortgage servicing fee income, net | 155 | 159 | 110 | 84 | 135 | 314 | 207 | |||||||||||||||
| Total mortgage banking revenues | $2,941 | $2,838 | $3,097 | $3,036 | $2,919 | $5,779 | $5,259 | |||||||||||||||
| Residential Mortgage Loan Originations: | ||||||||||||||||||||||
| Originations for retention in portfolio | $128,479 | $67,840 | $75,595 | $90,378 | $94,794 | $196,319 | $152,701 | |||||||||||||||
| Originations for sale to secondary market (1) | 122,693 | 87,720 | 143,834 | 143,112 | 144,491 | 210,413 | 246,932 | |||||||||||||||
| Total mortgage loan originations | $251,172 | $155,560 | $219,429 | $233,490 | $239,285 | $406,732 | $399,633 | |||||||||||||||
| Residential Mortgage Loans Sold: | ||||||||||||||||||||||
| Sold with servicing rights retained | $24,367 | $33,575 | $39,769 | $37,823 | $29,199 | $57,942 | $51,766 | |||||||||||||||
| Sold with servicing rights released (1) | 81,054 | 63,265 | 105,416 | 109,508 | 108,245 | 144,319 | 192,590 | |||||||||||||||
| Total mortgage loans sold | $105,421 | $96,840 | $145,185 | $147,331 | $137,444 | $202,261 | $244,356 | |||||||||||||||
| (1) | Also includes loans originated in a broker capacity. |
-9-
| END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
| Loans: | |||||||||||||||
| Commercial real estate (1) | $1,218,643 | $1,217,278 | $1,210,495 | $1,211,792 | $1,121,273 | ||||||||||
| Commercial & industrial | 632,029 | 603,830 | 612,334 | 588,324 | 577,116 | ||||||||||
| Total commercial | 1,850,672 | 1,821,108 | 1,822,829 | 1,800,116 | 1,698,389 | ||||||||||
| Residential real estate (2) | 1,327,418 | 1,249,890 | 1,227,248 | 1,195,537 | 1,168,105 | ||||||||||
| Home equity | 283,744 | 285,723 | 292,467 | 294,657 | 299,107 | ||||||||||
| Other | 28,396 | 30,685 | 31,527 | 32,768 | 34,499 | ||||||||||
| Total consumer | 312,140 | 316,408 | 323,994 | 327,425 | 333,606 | ||||||||||
| Total loans | $3,490,230 | $3,387,406 | $3,374,071 | $3,323,078 | $3,200,100 | ||||||||||
| (1) | Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property. |
| (2) | Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four- family residential properties. |
| June 30, 2018 | December 31, 2017 | ||||||||||
| Balance | % of Total | Balance | % of Total | ||||||||
| Commercial Real Estate Loans by Property Location: | |||||||||||
| Rhode Island | $346,215 | 28.4 | % | $360,834 | 29.8 | % | |||||
| Connecticut | 488,429 | 40.1 | 309,013 | 25.5 | |||||||
| Massachusetts | 300,353 | 24.6 | 461,230 | 38.1 | |||||||
| Subtotal | 1,134,997 | 93.1 | 1,131,077 | 93.4 | |||||||
| All other states | 83,646 | 6.9 | 79,418 | 6.6 | |||||||
| Total commercial real estate loans | $1,218,643 | 100.0 | % | $1,210,495 | 100.0 | % | |||||
| Residential Real Estate Loans by Property Location: | |||||||||||
| Rhode Island | $347,605 | 26.2 | % | $343,340 | 28.0 | % | |||||
| Connecticut | 145,949 | 11.0 | 140,843 | 11.5 | |||||||
| Massachusetts | 817,288 | 61.6 | 726,712 | 59.2 | |||||||
| Subtotal | 1,310,842 | 98.8 | 1,210,895 | 98.7 | |||||||
| All other states | 16,576 | 1.2 | 16,353 | 1.3 | |||||||
| Total residential real estate loans | $1,327,418 | 100.0 | % | $1,227,248 | 100.0 | % | |||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing demand deposits | $577,656 | $601,478 | $578,410 | $575,866 | $533,147 | ||||||||||
| Interest-bearing demand deposits | 136,640 | 83,249 | 82,728 | 45,407 | 54,666 | ||||||||||
| NOW accounts | 481,905 | 470,112 | 466,605 | 448,128 | 448,617 | ||||||||||
| Money market accounts | 604,954 | 693,748 | 731,345 | 716,827 | 666,047 | ||||||||||
| Savings accounts | 375,983 | 376,608 | 368,524 | 367,912 | 364,002 | ||||||||||
| Time deposits (in-market) | 698,286 | 625,965 | 617,368 | 587,166 | 553,783 | ||||||||||
| Wholesale brokered time deposits | 446,187 | 405,274 | 397,727 | 415,775 | 400,927 | ||||||||||
| Total deposits | $3,321,611 | $3,256,434 | $3,242,707 | $3,157,081 | $3,021,189 | ||||||||||
-10-
| CREDIT & ASSET QUALITY DATA | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
| Asset Quality Ratios: | |||||||||||||||
| Nonperforming assets to total assets | 0.32 | % | 0.30 | % | 0.34 | % | 0.44 | % | 0.49 | % | |||||
| Nonaccrual loans to total loans | 0.34 | % | 0.31 | % | 0.45 | % | 0.56 | % | 0.63 | % | |||||
| Total past due loans to total loans | 0.48 | % | 0.57 | % | 0.59 | % | 0.49 | % | 0.66 | % | |||||
| Allowance for loan losses to nonaccrual loans | 222.85 | % | 245.83 | % | 174.14 | % | 147.52 | % | 132.00 | % | |||||
| Allowance for loan losses to total loans | 0.75 | % | 0.76 | % | 0.79 | % | 0.82 | % | 0.83 | % | |||||
| Nonperforming Assets: | |||||||||||||||
| Commercial real estate | $— | $— | $4,954 | $5,887 | $6,422 | ||||||||||
| Commercial & industrial | 397 | 397 | 283 | 429 | 1,232 | ||||||||||
| Total commercial | 397 | 397 | 5,237 | 6,316 | 7,654 | ||||||||||
| Residential real estate | 10,206 | 9,340 | 9,414 | 11,699 | 11,815 | ||||||||||
| Home equity | 1,133 | 771 | 544 | 480 | 620 | ||||||||||
| Other consumer | 9 | 13 | 16 | 16 | 109 | ||||||||||
| Total consumer | 1,142 | 784 | 560 | 496 | 729 | ||||||||||
| Total nonaccrual loans | 11,745 | 10,521 | 15,211 | 18,511 | 20,198 | ||||||||||
| Other real estate owned | 3,206 | 3,206 | 131 | 1,038 | 1,342 | ||||||||||
| Total nonperforming assets | $14,951 | $13,727 | $15,342 | $19,549 | $21,540 | ||||||||||
| Past Due Loans (30 days or more past due): | |||||||||||||||
| Commercial real estate | $— | $— | $4,960 | $5,887 | $6,422 | ||||||||||
| Commercial & industrial | 2,851 | 3,295 | 4,076 | 455 | 4,009 | ||||||||||
| Total commercial | 2,851 | 3,295 | 9,036 | 6,342 | 10,431 | ||||||||||
| Residential real estate | 11,243 | 11,806 | 7,855 | 7,802 | 8,857 | ||||||||||
| Home equity | 2,585 | 4,235 | 3,141 | 2,268 | 1,806 | ||||||||||
| Other consumer | 16 | 22 | 43 | 35 | 26 | ||||||||||
| Total consumer | 2,601 | 4,257 | 3,184 | 2,303 | 1,832 | ||||||||||
| Total past due loans | $16,695 | $19,358 | $20,075 | $16,447 | $21,120 | ||||||||||
| Accruing loans 90 days or more past due | $— | $— | $— | $— | $— | ||||||||||
| Nonaccrual loans included in past due loans | $8,575 | $7,066 | $11,788 | $13,216 | $14,490 | ||||||||||
-11-
| CREDIT & ASSET QUALITY DATA | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
| Nonaccrual Loan Activity: | ||||||||||||||||||||||
| Balance at beginning of period | $10,521 | $15,211 | $18,511 | $20,198 | $22,127 | $15,211 | $22,058 | |||||||||||||||
| Additions to nonaccrual status | 2,457 | 1,210 | 462 | 1,969 | 1,946 | 3,667 | 4,084 | |||||||||||||||
| Loans returned to accruing status | (475 | ) | (344 | ) | (1,316 | ) | (1,411 | ) | (778 | ) | (819 | ) | (1,325 | ) | ||||||||
| Loans charged-off | (103 | ) | (690 | ) | (1,047 | ) | (694 | ) | (642 | ) | (793 | ) | (721 | ) | ||||||||
| Loans transferred to other real estate owned | — | (3,074 | ) | — | — | (98 | ) | (3,074 | ) | (576 | ) | |||||||||||
| Payments, payoffs and other changes | (655 | ) | (1,792 | ) | (1,399 | ) | (1,551 | ) | (2,357 | ) | (2,447 | ) | (3,322 | ) | ||||||||
| Balance at end of period | $11,745 | $10,521 | $15,211 | $18,511 | $20,198 | $11,745 | $20,198 | |||||||||||||||
| Allowance for Loan Losses: | ||||||||||||||||||||||
| Balance at beginning of period | $25,864 | $26,488 | $27,308 | $26,662 | $26,446 | $26,488 | $26,004 | |||||||||||||||
| Provision charged to earnings | 400 | — | 200 | 1,300 | 700 | 400 | 1,100 | |||||||||||||||
| Charge-offs | (103 | ) | (690 | ) | (1,047 | ) | (694 | ) | (642 | ) | (793 | ) | (721 | ) | ||||||||
| Recoveries | 13 | 66 | 27 | 40 | 158 | 79 | 279 | |||||||||||||||
| Balance at end of period | $26,174 | $25,864 | $26,488 | $27,308 | $26,662 | $26,174 | $26,662 | |||||||||||||||
| Net Loan Charge-Offs (Recoveries): | ||||||||||||||||||||||
| Commercial real estate | $— | $602 | $932 | $535 | $318 | $602 | $318 | |||||||||||||||
| Commercial & industrial | (3 | ) | (23 | ) | 43 | 114 | 115 | (26 | ) | 10 | ||||||||||||
| Total commercial | (3 | ) | 579 | 975 | 649 | 433 | 576 | 328 | ||||||||||||||
| Residential real estate | 5 | — | 32 | (1 | ) | 8 | 5 | 4 | ||||||||||||||
| Home equity | 73 | 28 | (2 | ) | (7 | ) | 12 | 101 | 55 | |||||||||||||
| Other consumer | 15 | 17 | 15 | 13 | 31 | 32 | 55 | |||||||||||||||
| Total consumer | 88 | 45 | 13 | 6 | 43 | 133 | 110 | |||||||||||||||
| Total | $90 | $624 | $1,020 | $654 | $484 | $714 | $442 | |||||||||||||||
| Net charge-offs to average loans (annualized) | 0.01 | % | 0.07 | % | 0.12 | % | 0.08 | % | 0.06 | % | 0.04 | % | 0.03 | % | ||||||||
-12-
The following table presents average balance and interest rate information. Tax-exempt income is converted to a FTE basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations. Nonaccrual and renegotiated loans, as well as interest recognized on these loans are included in amounts presented for loans. Certain previously reported amounts have been reclassified to conform to current year's presentation.
| CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | ||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||||||
| For the Three Months Ended | June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Cash, federal funds sold and short-term investments | $56,142 | $257 | 1.84 | % | $53,138 | $205 | 1.56 | % | $60,428 | $156 | 1.04 | % | ||||||||||||||
| Mortgage loans held for sale | $30,203 | $313 | 4.16 | $24,424 | $226 | 3.75 | $21,977 | $223 | 4.07 | |||||||||||||||||
| Taxable debt securities | 821,772 | 5,358 | 2.62 | 804,518 | 5,118 | 2.58 | 773,280 | 4,844 | 2.51 | |||||||||||||||||
| Nontaxable debt securities | 1,956 | 26 | 5.33 | 2,355 | 29 | 4.99 | 7,076 | 109 | 6.18 | |||||||||||||||||
| Total securities | 823,728 | 5,384 | 2.62 | 806,873 | 5,147 | 2.59 | 780,356 | 4,953 | 2.55 | |||||||||||||||||
| FHLB stock | 43,331 | 550 | 5.09 | 40,888 | 516 | 5.12 | 44,362 | 439 | 3.97 | |||||||||||||||||
| Commercial real estate | 1,225,926 | 13,463 | 4.40 | 1,218,702 | 12,346 | 4.11 | 1,162,002 | 11,032 | 3.81 | |||||||||||||||||
| Commercial & industrial | 622,141 | 7,569 | 4.88 | 608,784 | 6,823 | 4.55 | 576,312 | 6,607 | 4.60 | |||||||||||||||||
| Total commercial | 1,848,067 | $21,032 | 4.56 | 1,827,486 | $19,169 | 4.25 | 1,738,314 | $17,639 | 4.07 | |||||||||||||||||
| Residential real estate | 1,275,171 | 12,426 | 3.91 | 1,228,379 | 11,929 | 3.94 | 1,140,918 | 10,865 | 3.82 | |||||||||||||||||
| Home equity | 284,188 | 3,278 | 4.63 | 287,176 | 3,160 | 4.46 | 296,971 | 3,047 | 4.12 | |||||||||||||||||
| Other | 29,696 | 360 | 4.86 | 30,706 | 370 | 4.89 | 35,082 | 417 | 4.77 | |||||||||||||||||
| Total consumer | 313,884 | 3,638 | 4.65 | 317,882 | 3,530 | 4.50 | 332,053 | 3,464 | 4.18 | |||||||||||||||||
| Total loans | 3,437,122 | 37,096 | 4.33 | 3,373,747 | 34,628 | 4.16 | 3,211,285 | 31,968 | 3.99 | |||||||||||||||||
| Total interest-earning assets | 4,390,526 | 43,600 | 3.98 | 4,299,070 | 40,722 | 3.84 | 4,118,408 | 37,739 | 3.68 | |||||||||||||||||
| Noninterest-earning assets | 238,290 | 230,638 | 236,056 | |||||||||||||||||||||||
| Total assets | $4,628,816 | $4,529,708 | $4,354,464 | |||||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||||
| Interest-bearing demand deposits | $86,204 | $101 | 0.47 | % | $80,502 | $28 | 0.14 | % | $54,675 | ($8 | ) | (0.06 | )% | |||||||||||||
| NOW accounts | 460,712 | 57 | 0.05 | 449,298 | 54 | 0.05 | 437,282 | 57 | 0.05 | |||||||||||||||||
| Money market accounts | 664,127 | 960 | 0.58 | 718,664 | 880 | 0.50 | 711,711 | 640 | 0.36 | |||||||||||||||||
| Savings accounts | 375,690 | 57 | 0.06 | 368,012 | 57 | 0.06 | 361,545 | 52 | 0.06 | |||||||||||||||||
| Time deposits (in-market) | 662,969 | 2,265 | 1.37 | 617,878 | 1,820 | 1.19 | 559,442 | 1,460 | 1.05 | |||||||||||||||||
| Wholesale brokered time deposits | 430,118 | 1,814 | 1.69 | 409,243 | 1,583 | 1.57 | 392,734 | 1,390 | 1.42 | |||||||||||||||||
| Total interest-bearing deposits | 2,679,820 | 5,254 | 0.79 | 2,643,597 | 4,422 | 0.68 | 2,517,389 | 3,591 | 0.57 | |||||||||||||||||
| FHLB advances | 874,746 | 4,707 | 2.16 | 810,967 | 3,983 | 1.99 | 817,349 | 3,509 | 1.72 | |||||||||||||||||
| Junior subordinated debentures | 22,681 | 214 | 3.78 | 22,681 | 183 | 3.27 | 22,681 | 149 | 2.63 | |||||||||||||||||
| Other | — | — | — | — | — | — | 13 | — | — | |||||||||||||||||
| Total interest-bearing liabilities | 3,577,247 | 10,175 | 1.14 | 3,477,245 | 8,588 | 1.00 | 3,357,432 | 7,249 | 0.87 | |||||||||||||||||
| Noninterest-bearing demand deposits | 574,258 | 584,557 | 543,781 | |||||||||||||||||||||||
| Other liabilities | 60,878 | 56,951 | 49,013 | |||||||||||||||||||||||
| Shareholders' equity | 416,433 | 410,955 | 404,238 | |||||||||||||||||||||||
| Total liabilities and shareholders' equity | $4,628,816 | $4,529,708 | $4,354,464 | |||||||||||||||||||||||
| Net interest income (FTE) | $33,425 | $32,134 | $30,490 | |||||||||||||||||||||||
| Interest rate spread | 2.84 | % | 2.84 | % | 2.81 | % | ||||||||||||||||||||
| Net interest margin | 3.05 | % | 3.03 | % | 2.97 | % | ||||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Three Months Ended | Jun 30, 2018 | Mar 31, 2018 | Jun 30, 2017 | ||||||
| Commercial loans | $308 | $276 | $549 | ||||||
| Nontaxable debt securities | 6 | 6 | 37 | ||||||
| Total | $314 | $282 | $586 | ||||||
-13-
| CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | |||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||
| For the Six Months Ended | June 30, 2018 | June 30, 2017 | |||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||
| Assets: | |||||||||||||||||
| Cash, federal funds sold and short-term investments | $54,649 | $462 | 1.70 | % | $58,323 | $260 | 0.90 | % | |||||||||
| Mortgage loans for sale | 27,329 | 539 | 3.98 | 23,194 | 445 | 3.87 | |||||||||||
| Taxable debt securities | 813,193 | 10,476 | 2.60 | 764,666 | 9,553 | 2.52 | |||||||||||
| Nontaxable debt securities | 2,154 | 55 | 5.15 | 9,286 | 282 | 6.12 | |||||||||||
| Total securities | 815,347 | 10,531 | 2.60 | 773,952 | 9,835 | 2.56 | |||||||||||
| FHLB stock | 42,116 | 1,066 | 5.10 | 43,994 | 826 | 3.79 | |||||||||||
| Commercial real estate | 1,222,136 | 25,809 | 4.26 | 1,184,294 | 21,588 | 3.68 | |||||||||||
| Commercial & industrial | 615,698 | 14,392 | 4.71 | 575,162 | 12,765 | 4.48 | |||||||||||
| Total commercial | 1,837,834 | 40,201 | 4.41 | 1,759,456 | 34,353 | 3.94 | |||||||||||
| Residential real estate | 1,251,904 | 24,355 | 3.92 | 1,134,516 | 21,511 | 3.82 | |||||||||||
| Home equity | 285,684 | 6,439 | 4.55 | 297,481 | 5,924 | 4.02 | |||||||||||
| Other | 30,188 | 729 | 4.87 | 36,064 | 863 | 4.83 | |||||||||||
| Total consumer | 315,872 | 7,168 | 4.58 | 333,545 | 6,787 | 4.10 | |||||||||||
| Total loans | 3,405,610 | 71,724 | 4.25 | 3,227,517 | 62,651 | 3.91 | |||||||||||
| Total interest-earning assets | 4,345,051 | 84,322 | 3.91 | 4,126,980 | 74,017 | 3.62 | |||||||||||
| Noninterest-earning assets | 234,485 | 232,957 | |||||||||||||||
| Total assets | $4,579,536 | $4,359,937 | |||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||
| Interest-bearing demand deposits | $83,368 | $129 | 0.31 | % | $55,722 | $7 | 0.03 | % | |||||||||
| NOW accounts | 455,036 | 111 | 0.05 | 428,998 | 108 | 0.05 | |||||||||||
| Money market accounts | 691,245 | 1,840 | 0.54 | 732,988 | 1,239 | 0.34 | |||||||||||
| Savings accounts | 371,873 | 114 | 0.06 | 359,730 | 102 | 0.06 | |||||||||||
| Time deposits (in-market) | 640,548 | 4,085 | 1.29 | 557,161 | 2,878 | 1.04 | |||||||||||
| Wholesale brokered time deposits | 419,738 | 3,397 | 1.63 | 394,992 | 2,759 | 1.41 | |||||||||||
| Total interest-bearing deposits | 2,661,808 | 9,676 | 0.73 | 2,529,591 | 7,093 | 0.57 | |||||||||||
| FHLB advances | 843,033 | 8,690 | 2.08 | 824,442 | 6,853 | 1.68 | |||||||||||
| Junior subordinated debentures | 22,681 | 397 | 3.53 | 22,681 | 287 | 2.55 | |||||||||||
| Other | — | — | — | 20 | 1 | 10.08 | |||||||||||
| Total interest-bearing liabilities | 3,527,522 | 18,763 | 1.07 | 3,376,734 | 14,234 | 0.85 | |||||||||||
| Noninterest-bearing demand deposits | 579,379 | 535,544 | |||||||||||||||
| Other liabilities | 58,926 | 46,962 | |||||||||||||||
| Shareholders' equity | 413,709 | 400,697 | |||||||||||||||
| Total liabilities and shareholders' equity | $4,579,536 | $4,359,937 | |||||||||||||||
| Net interest income (FTE) | $65,559 | $59,783 | |||||||||||||||
| Interest rate spread | 2.84 | % | 2.77 | % | |||||||||||||
| Net interest margin | 3.04 | % | 2.92 | % | |||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Six Months Ended | Jun 30, 2018 | Jun 30, 2017 | ||||
| Commercial loans | $584 | $1,102 | ||||
| Nontaxable debt securities | 12 | 98 | ||||
| Total | $596 | $1,200 | ||||
-14-
| SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
| Tangible Book Value per Share: | |||||||||||||||
| Total shareholders' equity, as reported | $421,571 | $413,081 | $413,284 | $414,228 | $406,042 | ||||||||||
| Less: | |||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,645 | 8,893 | 9,140 | 9,388 | 9,642 | ||||||||||
| Total tangible shareholders' equity | $349,017 | $340,279 | $340,235 | $340,931 | $332,491 | ||||||||||
| Shares outstanding, as reported | 17,278 | 17,262 | 17,227 | 17,214 | 17,210 | ||||||||||
| Book value per share - GAAP | $24.40 | $23.93 | $23.99 | $24.06 | $23.59 | ||||||||||
| Tangible book value per share - Non-GAAP | $20.20 | $19.71 | $19.75 | $19.81 | $19.32 | ||||||||||
| Tangible Equity to Tangible Assets: | |||||||||||||||
| Total tangible shareholders' equity | $349,017 | $340,279 | $340,235 | $340,931 | $332,491 | ||||||||||
| Total assets, as reported | $4,737,242 | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | ||||||||||
| Less: | |||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,645 | 8,893 | 9,140 | 9,388 | 9,642 | ||||||||||
| Total tangible assets | $4,664,688 | $4,493,524 | $4,456,801 | $4,395,933 | $4,301,978 | ||||||||||
| Equity to assets - GAAP | 8.90 | % | 9.05 | % | 9.12 | % | 9.27 | % | 9.28 | % | |||||
| Tangible equity to tangible assets - Non-GAAP | 7.48 | % | 7.57 | % | 7.63 | % | 7.76 | % | 7.73 | % | |||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
| Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
| Return on Average Tangible Assets: | ||||||||||||||||||||||
| Net income, as reported | $17,674 | $16,211 | $7,982 | $12,962 | $13,199 | $33,885 | $24,981 | |||||||||||||||
| Total average assets, as reported | $4,628,816 | $4,529,708 | $4,473,340 | $4,401,536 | $4,354,464 | $4,579,536 | $4,359,937 | |||||||||||||||
| Less average balances of: | ||||||||||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,058 | 63,909 | 64,059 | |||||||||||||||
| Identifiable intangible assets, net | 8,766 | 9,014 | 9,261 | 9,511 | 9,767 | 8,889 | 9,896 | |||||||||||||||
| Total average tangible assets | $4,556,141 | $4,456,785 | $4,400,170 | $4,328,116 | $4,280,639 | $4,506,738 | $4,285,982 | |||||||||||||||
| Return on average assets - GAAP | 1.53 | % | 1.45 | % | 0.71 | % | 1.17 | % | 1.22 | % | 1.49 | % | 1.16 | % | ||||||||
| Return on average tangible assets - Non-GAAP | 1.56 | % | 1.48 | % | 0.72 | % | 1.19 | % | 1.24 | % | 1.52 | % | 1.18 | % | ||||||||
| Return on Average Tangible Equity: | ||||||||||||||||||||||
| Net income available to common shareholders, as reported | $17,636 | $16,173 | $7,958 | $12,934 | $13,170 | $33,809 | $24,925 | |||||||||||||||
| Total average equity, as reported | $416,433 | $410,955 | $417,568 | $412,862 | $404,238 | $413,709 | $400,697 | |||||||||||||||
| Less average balances of: | ||||||||||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,058 | 63,909 | 64,059 | |||||||||||||||
| Identifiable intangible assets, net | 8,766 | 9,014 | 9,261 | 9,511 | 9,767 | 8,889 | 9,896 | |||||||||||||||
| Total average tangible equity | $343,758 | $338,032 | $344,398 | $339,442 | $330,413 | $340,911 | $326,742 | |||||||||||||||
| Return on average equity - GAAP | 16.99 | % | 15.96 | % | 7.56 | % | 12.43 | % | 13.07 | % | 16.48 | % | 12.54 | % | ||||||||
| Return on average tangible equity - Non-GAAP | 20.58 | % | 19.40 | % | 9.17 | % | 15.12 | % | 15.99 | % | 20.00 | % | 15.38 | % | ||||||||
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