Exhibit 99.1
NASDAQ: WASH
Contact: Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: January 28, 2019
FOR IMMEDIATE RELEASE
Washington Trust Reports Record Full-Year 2018 Earnings and Reaches $5 Billion in Assets
WESTERLY, R.I., January 28, 2019 (GLOBE NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced fourth quarter 2018 net income of $17.0 million, or $0.98 per diluted share, compared to net income of $17.5 million, or $1.01 per diluted share, reported for the third quarter of 2018. Net income for the year ended December 31, 2018 totaled $68.4 million, or $3.93 per diluted share, compared to $45.9 million, or $2.64 per diluted share, reported for the prior year. Earnings in 2017 were reduced by a non-cash charge to write down net deferred tax assets by $6.2 million, or $0.36 per diluted share, due to the enactment of the Tax Cuts and Jobs Act, which included the reduction of the federal corporate income tax rate from 35% to 21% effective January 1, 2018.
“Washington Trust reported record full-year 2018 earnings, reached $5 billion in total assets and posted all-time high levels of total deposits and loans,” stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer. “These achievements are testaments to our continued success in growing our key business lines and expanding our presence throughout the region.”
Selected highlights for fourth quarter and full-year 2018 include:
| • | Returns on average equity and average assets for the fourth quarter were 15.61% and 1.40%, respectively. Full-year returns on average equity and average assets were at 16.20% and 1.46%, respectively. |
| • | Total loans were up by $124 million, or 3%, from the end of the prior quarter and up by $306 million, or 9%, from a year ago. |
| • | Total deposits were up by $110 million, or 3%, from the end of the preceding quarter and up by $281 million, or 9%, from a year ago. |
| • | In December, Washington Trust declared a quarterly dividend of 47 cents per share, representing a 4 cent per share, or 9%, increase over the preceding quarter. Full-year 2018 dividends declared amounted to $1.76 per share, representing an increase of 22 cents per share, or 14%, over last year. |
Net Interest Income
Net interest income was $33.9 million for the fourth quarter of 2018, up by $429 thousand, or 1%, from the third quarter of 2018. Income associated with loan payoffs and prepayment penalties in the fourth quarter of 2018 was $144 thousand, compared to $173 thousand in the prior quarter. The net interest margin was 2.95% for the fourth quarter, down by 4 basis points from 2.99% reported in the preceding quarter. Excluding income associated with loan payoffs and prepayment penalties, the net interest margin was 2.94% for the fourth quarter, down by 4 basis points from 2.98% reported in the preceding quarter.
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Washington Trust
January 28, 2019
Significant linked quarter changes included:
| • | Average interest-earning assets increased by $124 million, largely due to loan growth and purchases of securities that were made in the latter portion of the fourth quarter. The yield on interest-earning assets for the fourth quarter was 4.13%, up by 10 basis points from the preceding quarter. Excluding the impact of income associated with loan payoffs and prepayment penalties, the yield on interest-earning assets was 4.11%, up by 9 basis points from the preceding quarter. The yield benefited from increased market interest rates. |
| • | Average interest-bearing liabilities increased by $103 million, including increases of $66 million in average in-market deposits and $37 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances). The cost of interest-bearing liabilities for the fourth quarter was 1.45%, up by 17 basis points from the preceding quarter, reflecting higher rates paid on wholesale funding sources and promotional time certificates of deposit. The increase in the cost of funds also reflected competitive pricing on money market accounts and interest-bearing demand deposits. |
Noninterest Income
Noninterest income totaled $15.2 million for the fourth quarter of 2018, down modestly by $52 thousand from the third quarter of 2018. Significant linked quarter changes included:
| • | Wealth management revenues were $9.0 million for the fourth quarter of 2018, down by $442 thousand, or 5%, on a linked quarter basis. The decrease was concentrated in asset-based revenues. Wealth management assets under administration were $5.9 billion at December 31, 2018, down by $552 million, or 9%, from the balance at September 30, 2018. Both the decline in asset-based revenues and wealth management assets under administration were attributable to financial market declines during the quarter. |
| • | Mortgage banking revenues were $2.0 million for the fourth quarter of 2018, down by $646 thousand, or 25%, from the preceding quarter, largely due to a lower volume of loans sold and a lower sales yield on mortgage loans sold in the secondary market. |
| • | Loan related derivative income was $1.4 million for the fourth quarter of 2018, up by $1.1 million from the preceding quarter, due to a higher volume of commercial borrower loan related derivative transactions. |
Noninterest Expenses
Noninterest expenses totaled $26.7 million for the fourth quarter of 2018, up by $620 thousand, or 2%, from the third quarter of 2018. The linked quarter comparison of noninterest expenses was impacted by the following:
| • | Included in other expenses were $833 thousand and $197 thousand, respectively, of write-down valuation adjustments on other real estate owned in the fourth quarter and third quarter of 2018. |
| • | In the fourth quarter of 2018, a reduction to noninterest expenses of $187 thousand was recognized, resulting from a nontaxable adjustment in the fair value of a contingent consideration liability that was initially recorded upon the completion of a 2015 acquisition. |
| • | In the third quarter of 2018, a one-time third-party vendor credit of $300 thousand was recognized as a reduction to outsourced services expense. |
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Washington Trust
January 28, 2019
Excluding the impact of the aforementioned items, noninterest expenses for the fourth quarter of 2018 decreased by $129 thousand on a linked quarter basis.
Income tax expense totaled $4.5 million for the fourth quarter of 2018, down by $218 thousand from the preceding quarter. The effective tax rate for the fourth quarter of 2018 was 21.0%, compared to 21.3% for the preceding quarter. Based on current federal and applicable state income tax statutes, the Corporation currently expects its 2019 effective tax rate to be approximately 21.5%.
Investment Securities
The securities portfolio totaled $938 million at December 31, 2018, up by $115 million from the balance at September 30, 2018. The increase reflected purchases of debt securities in the fourth quarter totaling $124 million, with a weighted average yield of 3.85%, as well as an increase in the fair value of available for sale securities. These increases were partially offset by routine principal pay-downs on mortgage-backed securities and a called debt security. Investment securities represented 19% of total assets at December 31, 2018, compared to 17% of total assets at September 30, 2018.
Loans
Total loans amounted to $3.7 billion at December 31, 2018, up by $124 million, or 3%, from the end of the third quarter. Total commercial loans surpassed $2.0 billion at the end of 2018, increasing by $116 million, or 6%, in the fourth quarter, reflecting growth in the commercial real estate portfolio. The residential real estate loan portfolio increased by $11 million, or 1%, from the balance at September 30, 2018, while total consumer loans declined by $3 million, or 1%, from the end of the third quarter.
Total loans rose by $306 million, or 9%, from the balance at the end of 2017, with growth of $190 million, or 10%, in the commercial loan portfolio and $133 million, or 11%, in the residential loan portfolio.
Deposits and Borrowings
Total deposits amounted to $3.5 billion at December 31, 2018, up by $110 million, or 3%, from the end of the preceding quarter. Excluding the balances of wholesale brokered time deposits, total in-market deposits were up by $76 million, or 3%, largely due to growth in promotional time certificates of deposit.
Total deposits were up by $281 million, or 9%, from the balance at the end of 2017. Excluding the balances of wholesale brokered time deposits, total in-market deposits were up by $202 million, or 7%, in 2018.
Federal Home Loan Bank advances amounted to $951 million at December 31, 2018, up by $122 million from the balance at September 30, 2018, to fund balance sheet growth.
Asset Quality
Total nonaccrual loans amounted to $11.7 million, or 0.32% of total loans, at December 31, 2018, compared to $10.8 million, or 0.30% of total loans, at September 30, 2018. Total past due loans amounted to $13.6 million, or 0.37% of total loans, at December 31, 2018, compared to $13.5 million, or 0.38% of total loans, at September 30, 2018.
A loan loss provision totaling $800 thousand was recognized in the fourth quarter of 2018, compared to a loan loss provision of
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Washington Trust
January 28, 2019
$350 thousand recognized in the preceding quarter. These provisions were based on management's assessment of loss exposure, as well as loan loss allocations commensurate with growth and changes in the loan portfolio. Net charge-offs totaled $237 thousand in the fourth quarter compared to $15 thousand in the preceding quarter. The allowance for loan losses amounted to $27.1 million, or 0.74% of total loans, at December 31, 2018, compared to $26.5 million, or 0.75% of total loans, at September 30, 2018.
Capital and Dividends
Total shareholders' equity was $448 million at December 31, 2018, up by $20.3 million from September 30, 2018, including net income of $17.0 million, as well as an increase in the fair value of available for sale securities totaling $8.8 million and an increase of $2.4 million associated with the annual remeasurement of defined benefit pension plan obligations, both of which are net of tax and recognized in the accumulated other comprehensive income component of shareholders' equity. These increases were partially offset by $8.2 million in dividend declarations made in the quarter.
Capital levels at December 31, 2018 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.56% at December 31, 2018, compared to 12.77% at September 30, 2018. Book value per share amounted to $25.90 at December 31, 2018, compared to $24.75 at September 30, 2018.
The Board of Directors declared a quarterly dividend of 47 cents per share for the quarter ended December 31, 2018, an increase of 4 cents per share, or 9%, over the preceding quarter. The dividend was paid on January 11, 2019 to shareholders of record on January 2, 2019.
Conference Call
Washington Trust will host a conference call to discuss its fourth quarter results, business highlights and outlook on Tuesday, January 29, 2019 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 13686319; the audio replay will be available through February 8, 2019. 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 March 31, 2019.
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Washington Trust
January 28, 2019
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) | |||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
| Assets: | |||||||||||||||
| Cash and due from banks | $89,923 | $72,934 | $132,068 | $85,680 | $79,853 | ||||||||||
| Short-term investments | 3,552 | 2,917 | 2,624 | 2,322 | 3,070 | ||||||||||
| Mortgage loans held for sale | 20,996 | 22,571 | 35,207 | 19,269 | 26,943 | ||||||||||
| Securities: | |||||||||||||||
| Available for sale, at fair value | 927,810 | 812,647 | 776,693 | 787,842 | 780,954 | ||||||||||
| Held to maturity, at amortized cost | 10,415 | 10,863 | 11,412 | 11,973 | 12,541 | ||||||||||
| Total securities | 938,225 | 823,510 | 788,105 | 799,815 | 793,495 | ||||||||||
| Federal Home Loan Bank stock, at cost | 46,068 | 44,525 | 46,281 | 41,127 | 40,517 | ||||||||||
| Loans: | |||||||||||||||
| Total loans | 3,680,360 | 3,556,203 | 3,490,230 | 3,387,406 | 3,374,071 | ||||||||||
| Less allowance for loan losses | 27,072 | 26,509 | 26,174 | 25,864 | 26,488 | ||||||||||
| Net loans | 3,653,288 | 3,529,694 | 3,464,056 | 3,361,542 | 3,347,583 | ||||||||||
| Premises and equipment, net | 29,005 | 28,195 | 28,377 | 28,316 | 28,333 | ||||||||||
| Investment in bank-owned life insurance | 80,463 | 79,891 | 79,319 | 73,782 | 73,267 | ||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,162 | 8,400 | 8,645 | 8,893 | 9,140 | ||||||||||
| Other assets | 77,175 | 94,126 | 88,651 | 81,671 | 63,740 | ||||||||||
| Total assets | $5,010,766 | $4,770,672 | $4,737,242 | $4,566,326 | $4,529,850 | ||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing deposits | $603,216 | $611,829 | $577,656 | $601,478 | $578,410 | ||||||||||
| Interest-bearing deposits | 2,920,832 | 2,802,519 | 2,743,955 | 2,654,956 | 2,664,297 | ||||||||||
| Total deposits | 3,524,048 | 3,414,348 | 3,321,611 | 3,256,434 | 3,242,707 | ||||||||||
| Federal Home Loan Bank advances | 950,722 | 828,392 | 901,053 | 808,677 | 791,356 | ||||||||||
| Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||
| Other liabilities | 65,131 | 77,342 | 70,326 | 65,453 | 59,822 | ||||||||||
| Total liabilities | 4,562,582 | 4,342,763 | 4,315,671 | 4,153,245 | 4,116,566 | ||||||||||
| Shareholders’ Equity: | |||||||||||||||
| Common stock | 1,081 | 1,081 | 1,080 | 1,079 | 1,077 | ||||||||||
| Paid-in capital | 119,888 | 119,220 | 118,883 | 118,172 | 117,961 | ||||||||||
| Retained earnings | 355,524 | 346,685 | 336,670 | 326,505 | 317,756 | ||||||||||
| Accumulated other comprehensive loss | (28,309 | ) | (39,077 | ) | (35,062 | ) | (32,675 | ) | (23,510 | ) | |||||
| Total shareholders’ equity | 448,184 | 427,909 | 421,571 | 413,081 | 413,284 | ||||||||||
| Total liabilities and shareholders’ equity | $5,010,766 | $4,770,672 | $4,737,242 | $4,566,326 | $4,529,850 | ||||||||||
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| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | ||||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2017 | ||||||||||||||||
| Interest income: | ||||||||||||||||||||||
| Interest and fees on loans | $40,588 | $38,877 | $37,101 | $34,578 | $33,459 | $151,144 | $127,962 | |||||||||||||||
| Taxable interest on securities | 5,957 | 5,383 | 5,358 | 5,118 | 4,719 | 21,816 | 18,927 | |||||||||||||||
| Nontaxable interest on securities | 9 | 9 | 20 | 23 | 24 | 61 | 249 | |||||||||||||||
| Dividends on Federal Home Loan Bank stock | 669 | 634 | 550 | 516 | 481 | 2,369 | 1,774 | |||||||||||||||
| Other interest income | 294 | 261 | 257 | 205 | 217 | 1,017 | 674 | |||||||||||||||
| Total interest and dividend income | 47,517 | 45,164 | 43,286 | 40,440 | 38,900 | 176,407 | 149,586 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||||
| Deposits | 7,953 | 6,546 | 5,254 | 4,422 | 4,136 | 24,175 | 15,064 | |||||||||||||||
| Federal Home Loan Bank advances | 5,446 | 4,937 | 4,707 | 3,983 | 3,708 | 19,073 | 14,377 | |||||||||||||||
| Junior subordinated debentures | 240 | 232 | 214 | 183 | 167 | 869 | 613 | |||||||||||||||
| Other interest expense | — | — | — | — | — | — | 1 | |||||||||||||||
| Total interest expense | 13,639 | 11,715 | 10,175 | 8,588 | 8,011 | 44,117 | 30,055 | |||||||||||||||
| Net interest income | 33,878 | 33,449 | 33,111 | 31,852 | 30,889 | 132,290 | 119,531 | |||||||||||||||
| Provision for loan losses | 800 | 350 | 400 | — | 200 | 1,550 | 2,600 | |||||||||||||||
| Net interest income after provision for loan losses | 33,078 | 33,099 | 32,711 | 31,852 | 30,689 | 130,740 | 116,931 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||||
| Wealth management revenues | 9,012 | 9,454 | 9,602 | 10,273 | 9,914 | 38,341 | 39,346 | |||||||||||||||
| Mortgage banking revenues | 1,978 | 2,624 | 2,941 | 2,838 | 3,097 | 10,381 | 11,392 | |||||||||||||||
| Service charges on deposit accounts | 977 | 885 | 903 | 863 | 946 | 3,628 | 3,672 | |||||||||||||||
| Card interchange fees | 977 | 983 | 961 | 847 | 904 | 3,768 | 3,502 | |||||||||||||||
| Income from bank-owned life insurance | 572 | 572 | 537 | 515 | 537 | 2,196 | 2,161 | |||||||||||||||
| Loan related derivative income | 1,374 | 278 | 668 | 141 | 470 | 2,461 | 3,214 | |||||||||||||||
| Other income | 273 | 419 | 381 | 266 | 342 | 1,339 | 1,522 | |||||||||||||||
| Total noninterest income | 15,163 | 15,215 | 15,993 | 15,743 | 16,210 | 62,114 | 64,809 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||
| Salaries and employee benefits | 16,918 | 17,283 | 17,304 | 17,772 | 17,194 | 69,277 | 68,891 | |||||||||||||||
| Outsourced services | 2,510 | 1,951 | 2,350 | 1,873 | 1,960 | 8,684 | 6,920 | |||||||||||||||
| Net occupancy | 1,946 | 2,013 | 1,930 | 2,002 | 1,859 | 7,891 | 7,521 | |||||||||||||||
| Equipment | 983 | 1,080 | 1,069 | 1,180 | 1,198 | 4,312 | 5,358 | |||||||||||||||
| Legal, audit and professional fees | 587 | 559 | 555 | 726 | 562 | 2,427 | 2,294 | |||||||||||||||
| FDIC deposit insurance costs | 376 | 410 | 422 | 404 | 389 | 1,612 | 1,647 | |||||||||||||||
| Advertising and promotion | 460 | 440 | 329 | 177 | 466 | 1,406 | 1,481 | |||||||||||||||
| Amortization of intangibles | 239 | 245 | 247 | 248 | 248 | 979 | 1,035 | |||||||||||||||
| Change in fair value of contingent consideration | (187 | ) | — | — | — | (333 | ) | (187 | ) | (643 | ) | |||||||||||
| Other expenses | 2,850 | 2,081 | 2,082 | 2,748 | 2,211 | 9,761 | 9,596 | |||||||||||||||
| Total noninterest expense | 26,682 | 26,062 | 26,288 | 27,130 | 25,754 | 106,162 | 104,100 | |||||||||||||||
| Income before income taxes | 21,559 | 22,252 | 22,416 | 20,465 | 21,145 | 86,692 | 77,640 | |||||||||||||||
| Income tax expense | 4,523 | 4,741 | 4,742 | 4,254 | 13,163 | 18,260 | 31,715 | |||||||||||||||
| Net income | $17,036 | $17,511 | $17,674 | $16,211 | $7,982 | $68,432 | $45,925 | |||||||||||||||
| Net income available to common shareholders | $17,004 | $17,475 | $17,636 | $16,173 | $7,958 | $68,288 | $45,817 | |||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||
| Basic | 17,297 | 17,283 | 17,272 | 17,234 | 17,223 | 17,272 | 17,207 | |||||||||||||||
| Diluted | 17,385 | 17,382 | 17,387 | 17,345 | 17,349 | 17,391 | 17,338 | |||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||
| Basic | $0.98 | $1.01 | $1.02 | $0.94 | $0.46 | $3.95 | $2.66 | |||||||||||||||
| Diluted | $0.98 | $1.01 | $1.01 | $0.93 | $0.46 | $3.93 | $2.64 | |||||||||||||||
| Cash dividends declared per share | $0.47 | $0.43 | $0.43 | $0.43 | $0.39 | $1.76 | $1.54 | |||||||||||||||
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| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
| Share and Equity Related Data: | |||||||||||||||
| Book value per share | $25.90 | $24.75 | $24.40 | $23.93 | $23.99 | ||||||||||
Tangible book value per share - Non-GAAP (1) | $21.74 | $20.57 | $20.20 | $19.71 | $19.75 | ||||||||||
| Market value per share | $47.53 | $55.30 | $58.10 | $53.75 | $53.25 | ||||||||||
| Shares issued and outstanding at end of period | 17,302 | 17,290 | 17,278 | 17,262 | 17,227 | ||||||||||
| Capital Ratios (2): | |||||||||||||||
| Tier 1 risk-based capital | 11.81 | % | 12.00 | % | 11.84 | % | 11.78 | % | 11.65 | % | |||||
| Total risk-based capital | 12.56 | % | 12.77 | % | 12.61 | % | 12.56 | % | 12.45 | % | |||||
| Tier 1 leverage ratio | 8.89 | % | 8.91 | % | 8.87 | % | 8.84 | % | 8.79 | % | |||||
| Common equity tier 1 | 11.20 | % | 11.37 | % | 11.20 | % | 11.13 | % | 10.99 | % | |||||
| Balance Sheet Ratios: | |||||||||||||||
| Equity to assets | 8.94 | % | 8.97 | % | 8.90 | % | 9.05 | % | 9.12 | % | |||||
Tangible equity to tangible assets - Non-GAAP (1) | 7.62 | % | 7.57 | % | 7.48 | % | 7.57 | % | 7.63 | % | |||||
| Loans to deposits (3) | 104.3 | % | 104.0 | % | 105.3 | % | 103.8 | % | 104.1 | % | |||||
| For the Twelve Months Ended | |||||||||||||||
| For the Three Months Ended | |||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2017 | |||||||||
| Performance Ratios (4): | |||||||||||||||
Net interest margin (5) | 2.95 | % | 2.99 | % | 3.05 | % | 3.03 | % | 2.95 | % | 3.01 | % | 2.93 | % | |
| Return on average assets (net income divided by average assets) | 1.40 | % | 1.47 | % | 1.53 | % | 1.45 | % | 0.71 | % | 1.46 | % | 1.04 | % | |
Return on average tangible assets - Non-GAAP (1) | 1.42 | % | 1.49 | % | 1.56 | % | 1.48 | % | 0.72 | % | 1.48 | % | 1.06 | % | |
| Return on average equity (net income available for common shareholders divided by average equity) | 15.61 | % | 16.26 | % | 16.99 | % | 15.96 | % | 7.56 | % | 16.20 | % | 11.23 | % | |
Return on average tangible equity - Non-GAAP (1) | 18.75 | % | 19.59 | % | 20.58 | % | 19.40 | % | 9.17 | % | 19.57 | % | 13.70 | % | |
Efficiency ratio (6) | 54.4 | % | 53.6 | % | 53.5 | % | 57.0 | % | 54.7 | % | 54.6 | % | 56.5 | % | |
| (1) | See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document. |
| (2) | Estimated for December 31, 2018 and actuals for the remaining periods. |
| (3) | Period-end balances of net loans and mortgage loans held for sale 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 Twelve Months Ended | |||||||||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2017 | ||||||||||||||||
| Wealth Management Results | ||||||||||||||||||||||
| Wealth Management Revenues: | ||||||||||||||||||||||
| Asset-based revenues | $8,930 | $9,322 | $9,136 | $9,955 | $9,686 | $37,343 | $38,125 | |||||||||||||||
| Transaction-based revenues | 82 | 132 | 466 | 318 | 228 | 998 | 1,221 | |||||||||||||||
| Total wealth management revenues | $9,012 | $9,454 | $9,602 | $10,273 | $9,914 | $38,341 | $39,346 | |||||||||||||||
| Assets Under Administration (AUA): | ||||||||||||||||||||||
| Balance at beginning of period | $6,462,340 | $6,220,155 | $6,343,720 | $6,714,637 | $6,587,899 | $6,714,637 | $6,063,293 | |||||||||||||||
| Net investment (depreciation) appreciation & income | (534,847 | ) | 232,245 | 133,450 | (32,024 | ) | 163,681 | (201,176 | ) | 817,577 | ||||||||||||
| Net client asset flows | (16,679 | ) | 9,940 | (257,015 | ) | (338,893 | ) | (36,943 | ) | (602,647 | ) | (166,233 | ) | |||||||||
| Balance at end of period | $5,910,814 | $6,462,340 | $6,220,155 | $6,343,720 | $6,714,637 | $5,910,814 | $6,714,637 | |||||||||||||||
| Percentage of AUA that are managed assets | 90% | 91% | 92% | 92% | 93% | 90% | 93% | |||||||||||||||
| Mortgage Banking Results | ||||||||||||||||||||||
| Mortgage Banking Revenues: | ||||||||||||||||||||||
| Gains & commissions on loan sales, net (1) | $1,798 | $2,485 | $2,786 | $2,679 | $2,987 | $9,748 | $10,991 | |||||||||||||||
| Residential mortgage servicing fee income, net | 180 | 139 | 155 | 159 | 110 | 633 | 401 | |||||||||||||||
| Total mortgage banking revenues | $1,978 | $2,624 | $2,941 | $2,838 | $3,097 | $10,381 | $11,392 | |||||||||||||||
| Residential Mortgage Loan Originations: | ||||||||||||||||||||||
| Originations for retention in portfolio | $58,515 | $80,751 | $128,479 | $67,840 | $75,595 | $335,585 | $318,674 | |||||||||||||||
| Originations for sale to secondary market (2) | 96,792 | 119,832 | 122,693 | 87,720 | 143,834 | 427,037 | 533,878 | |||||||||||||||
| Total mortgage loan originations | $155,307 | $200,583 | $251,172 | $155,560 | $219,429 | $762,622 | $852,552 | |||||||||||||||
| Residential Mortgage Loans Sold: | ||||||||||||||||||||||
| Sold with servicing rights retained | $16,577 | $24,422 | $24,367 | $33,575 | $39,769 | $98,941 | $129,358 | |||||||||||||||
| Sold with servicing rights released (2) | 81,985 | 107,694 | 81,054 | 63,265 | 105,416 | 333,998 | 407,514 | |||||||||||||||
| Total mortgage loans sold | $98,562 | $132,116 | $105,421 | $96,840 | $145,185 | $432,939 | $536,872 | |||||||||||||||
| (1) | Includes gains on loan sales, commissions on loans originated for others, servicing right gains, fair value adjustments on loans held for sale, and fair value adjustments and gains on forward loan commitments. |
| (2) | Also includes loans originated in a broker capacity. |
-9-
| END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
| Loans: | |||||||||||||||
| Commercial real estate (1) | $1,392,408 | $1,240,350 | $1,218,643 | $1,217,278 | $1,210,495 | ||||||||||
| Commercial & industrial | 620,704 | 656,882 | 632,029 | 603,830 | 612,334 | ||||||||||
| Total commercial | 2,013,112 | 1,897,232 | 1,850,672 | 1,821,108 | 1,822,829 | ||||||||||
| Residential real estate (2) | 1,360,387 | 1,349,340 | 1,327,418 | 1,249,890 | 1,227,248 | ||||||||||
| Home equity | 280,626 | 282,331 | 283,744 | 285,723 | 292,467 | ||||||||||
| Other | 26,235 | 27,300 | 28,396 | 30,685 | 31,527 | ||||||||||
| Total consumer | 306,861 | 309,631 | 312,140 | 316,408 | 323,994 | ||||||||||
| Total loans | $3,680,360 | $3,556,203 | $3,490,230 | $3,387,406 | $3,374,071 | ||||||||||
| (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. |
| December 31, 2018 | December 31, 2017 | ||||||||||
| Balance | % of Total | Balance | % of Total | ||||||||
| Commercial Real Estate Loans by Property Location: | |||||||||||
| Rhode Island | $377,249 | 27 | % | $360,834 | 30 | % | |||||
| Connecticut | 570,116 | 41 | 461,230 | 38 | |||||||
| Massachusetts | 356,615 | 26 | 309,013 | 26 | |||||||
| Subtotal | 1,303,980 | 94 | 1,131,077 | 94 | |||||||
| All other states | 88,428 | 6 | 79,418 | 6 | |||||||
| Total commercial real estate loans | $1,392,408 | 100 | % | $1,210,495 | 100 | % | |||||
| Residential Real Estate Loans by Property Location: | |||||||||||
| Rhode Island | $352,141 | 26 | % | $343,340 | 28 | % | |||||
| Connecticut | 141,775 | 10 | 140,843 | 12 | |||||||
| Massachusetts | 849,435 | 63 | 726,712 | 59 | |||||||
| Subtotal | 1,343,351 | 99 | 1,210,895 | 99 | |||||||
| All other states | 17,036 | 1 | 16,353 | 1 | |||||||
| Total residential real estate loans | $1,360,387 | 100 | % | $1,227,248 | 100 | % | |||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing demand deposits | $603,216 | $611,829 | $577,656 | $601,478 | $578,410 | ||||||||||
| Interest-bearing demand deposits | 178,733 | 151,322 | 136,640 | 83,249 | 82,728 | ||||||||||
| NOW accounts | 466,568 | 468,578 | 481,905 | 470,112 | 466,605 | ||||||||||
| Money market accounts | 646,878 | 650,976 | 604,954 | 693,748 | 731,345 | ||||||||||
| Savings accounts | 373,545 | 372,425 | 375,983 | 376,608 | 368,524 | ||||||||||
| Time deposits (in-market) | 778,105 | 715,635 | 698,286 | 625,965 | 617,368 | ||||||||||
| In-market deposits | 3,047,045 | 2,970,765 | 2,875,424 | 2,851,160 | 2,844,980 | ||||||||||
| Wholesale brokered time deposits | 477,003 | 443,583 | 446,187 | 405,274 | 397,727 | ||||||||||
| Total deposits | $3,524,048 | $3,414,348 | $3,321,611 | $3,256,434 | $3,242,707 | ||||||||||
-10-
| CREDIT & ASSET QUALITY DATA | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
| Asset Quality Ratios: | |||||||||||||||
| Nonperforming assets to total assets | 0.28 | % | 0.29 | % | 0.32 | % | 0.30 | % | 0.34 | % | |||||
| Nonaccrual loans to total loans | 0.32 | % | 0.30 | % | 0.34 | % | 0.31 | % | 0.45 | % | |||||
| Total past due loans to total loans | 0.37 | % | 0.38 | % | 0.48 | % | 0.57 | % | 0.59 | % | |||||
| Allowance for loan losses to nonaccrual loans | 231.25 | % | 245.25 | % | 222.85 | % | 245.83 | % | 174.14 | % | |||||
| Allowance for loan losses to total loans | 0.74 | % | 0.75 | % | 0.75 | % | 0.76 | % | 0.79 | % | |||||
| Nonperforming Assets: | |||||||||||||||
| Commercial real estate | $925 | $— | $— | $— | $4,954 | ||||||||||
| Commercial & industrial | — | 122 | 397 | 397 | 283 | ||||||||||
| Total commercial | 925 | 122 | 397 | 397 | 5,237 | ||||||||||
| Residential real estate | 9,346 | 9,063 | 10,206 | 9,340 | 9,414 | ||||||||||
| Home equity | 1,436 | 1,624 | 1,133 | 771 | 544 | ||||||||||
| Other consumer | — | — | 9 | 13 | 16 | ||||||||||
| Total consumer | 1,436 | 1,624 | 1,142 | 784 | 560 | ||||||||||
| Total nonaccrual loans | 11,707 | 10,809 | 11,745 | 10,521 | 15,211 | ||||||||||
| Other real estate owned | 2,142 | 2,974 | 3,206 | 3,206 | 131 | ||||||||||
| Total nonperforming assets | $13,849 | $13,783 | $14,951 | $13,727 | $15,342 | ||||||||||
| Past Due Loans (30 days or more past due): | |||||||||||||||
| Commercial real estate | $1,080 | $931 | $— | $— | $4,960 | ||||||||||
| Commercial & industrial | — | 142 | 2,851 | 3,295 | 4,076 | ||||||||||
| Total commercial | 1,080 | 1,073 | 2,851 | 3,295 | 9,036 | ||||||||||
| Residential real estate | 10,520 | 9,398 | 11,243 | 11,806 | 7,855 | ||||||||||
| Home equity | 1,989 | 2,939 | 2,585 | 4,235 | 3,141 | ||||||||||
| Other consumer | 33 | 109 | 16 | 22 | 43 | ||||||||||
| Total consumer | 2,022 | 3,048 | 2,601 | 4,257 | 3,184 | ||||||||||
| Total past due loans | $13,622 | $13,519 | $16,695 | $19,358 | $20,075 | ||||||||||
| Accruing loans 90 days or more past due | $— | $— | $— | $— | $— | ||||||||||
| Nonaccrual loans included in past due loans | $8,613 | $6,425 | $8,575 | $7,066 | $11,788 | ||||||||||
-11-
| CREDIT & ASSET QUALITY DATA | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2017 | ||||||||||||||||
| Nonaccrual Loan Activity: | ||||||||||||||||||||||
| Balance at beginning of period | $10,809 | $11,745 | $10,521 | $15,211 | $18,511 | $15,211 | $22,058 | |||||||||||||||
| Additions to nonaccrual status | 2,918 | 2,179 | 2,457 | 1,210 | 462 | 8,764 | 6,515 | |||||||||||||||
| Loans returned to accruing status | (1,500 | ) | (361 | ) | (475 | ) | (344 | ) | (1,316 | ) | (2,680 | ) | (4,052 | ) | ||||||||
| Loans charged-off | (298 | ) | (96 | ) | (103 | ) | (690 | ) | (1,047 | ) | (1,187 | ) | (2,462 | ) | ||||||||
| Loans transferred to other real estate owned | — | — | — | (3,074 | ) | — | (3,074 | ) | (576 | ) | ||||||||||||
| Payments, payoffs and other changes | (222 | ) | (2,658 | ) | (655 | ) | (1,792 | ) | (1,399 | ) | (5,327 | ) | (6,272 | ) | ||||||||
| Balance at end of period | $11,707 | $10,809 | $11,745 | $10,521 | $15,211 | $11,707 | $15,211 | |||||||||||||||
| Allowance for Loan Losses: | ||||||||||||||||||||||
| Balance at beginning of period | $26,509 | $26,174 | $25,864 | $26,488 | $27,308 | $26,488 | $26,004 | |||||||||||||||
| Provision charged to earnings | 800 | 350 | 400 | — | 200 | 1,550 | 2,600 | |||||||||||||||
| Charge-offs | (298 | ) | (96 | ) | (103 | ) | (690 | ) | (1,047 | ) | (1,187 | ) | (2,462 | ) | ||||||||
| Recoveries | 61 | 81 | 13 | 66 | 27 | 221 | 346 | |||||||||||||||
| Balance at end of period | $27,072 | $26,509 | $26,174 | $25,864 | $26,488 | $27,072 | $26,488 | |||||||||||||||
| Net Loan Charge-Offs (Recoveries): | ||||||||||||||||||||||
| Commercial real estate | $— | $— | $— | $602 | $932 | $602 | $1,785 | |||||||||||||||
| Commercial & industrial | (13 | ) | (70 | ) | (3 | ) | (23 | ) | 43 | (109 | ) | 167 | ||||||||||
| Total commercial | (13 | ) | (70 | ) | (3 | ) | 579 | 975 | 493 | 1,952 | ||||||||||||
| Residential real estate | 156 | 68 | 5 | — | 32 | 229 | 35 | |||||||||||||||
| Home equity | 65 | (2 | ) | 73 | 28 | (2 | ) | 164 | 46 | |||||||||||||
| Other consumer | 29 | 19 | 15 | 17 | 15 | 80 | 83 | |||||||||||||||
| Total consumer | 94 | 17 | 88 | 45 | 13 | 244 | 129 | |||||||||||||||
| Total | $237 | $15 | $90 | $624 | $1,020 | $966 | $2,116 | |||||||||||||||
| Net charge-offs to average loans (annualized) | 0.03 | % | — | % | 0.01 | % | 0.07 | % | 0.12 | % | 0.03 | % | 0.06 | % | ||||||||
-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 | December 31, 2018 | September 30, 2018 | Quarter Change | |||||||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Cash, federal funds sold and short-term investments | $51,584 | $294 | 2.26 | % | $52,218 | $261 | 1.98 | % | ($634 | ) | $33 | 0.28 | % | |||||||||||||
| Mortgage loans held for sale | 24,178 | 289 | 4.74 | 34,571 | 384 | 4.41 | (10,393 | ) | (95 | ) | 0.33 | |||||||||||||||
| Taxable debt securities | 877,186 | 5,957 | 2.69 | 825,302 | 5,383 | 2.59 | 51,884 | 574 | 0.10 | |||||||||||||||||
| Nontaxable debt securities | 935 | 12 | 5.09 | 935 | 11 | 4.67 | — | 1 | 0.42 | |||||||||||||||||
| Total securities | 878,121 | 5,969 | 2.70 | 826,237 | 5,394 | 2.59 | 51,884 | 575 | 0.11 | |||||||||||||||||
| FHLB stock | 44,662 | 669 | 5.94 | 45,181 | 634 | 5.57 | (519 | ) | 35 | 0.37 | ||||||||||||||||
| Commercial real estate | 1,309,957 | 15,500 | 4.69 | 1,233,230 | 13,931 | 4.48 | 76,727 | 1,569 | 0.21 | |||||||||||||||||
| Commercial & industrial | 636,156 | 7,732 | 4.82 | 642,005 | 7,720 | 4.77 | (5,849 | ) | 12 | 0.05 | ||||||||||||||||
| Total commercial | 1,946,113 | 23,232 | 4.74 | 1,875,235 | 21,651 | 4.58 | 70,878 | 1,581 | 0.16 | |||||||||||||||||
| Residential real estate | 1,348,993 | 13,516 | 3.98 | 1,331,304 | 13,362 | 3.98 | 17,689 | 154 | — | |||||||||||||||||
| Home equity | 280,085 | 3,553 | 5.03 | 284,080 | 3,469 | 4.84 | (3,995 | ) | 84 | 0.19 | ||||||||||||||||
| Other | 26,679 | 329 | 4.89 | 27,635 | 344 | 4.94 | (956 | ) | (15 | ) | (0.05 | ) | ||||||||||||||
| Total consumer | 306,764 | 3,882 | 5.02 | 311,715 | 3,813 | 4.85 | (4,951 | ) | 69 | 0.17 | ||||||||||||||||
| Total loans | 3,601,870 | 40,630 | 4.48 | 3,518,254 | 38,826 | 4.38 | 83,616 | 1,804 | 0.10 | |||||||||||||||||
| Total interest-earning assets | 4,600,415 | 47,851 | 4.13 | 4,476,461 | 45,499 | 4.03 | 123,954 | 2,352 | 0.10 | |||||||||||||||||
| Noninterest-earning assets | 239,743 | 248,437 | (8,694 | ) | ||||||||||||||||||||||
| Total assets | $4,840,158 | $4,724,898 | $115,260 | |||||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||||
| Interest-bearing demand deposits | $148,840 | $636 | 1.70 | % | $134,632 | $465 | 1.37 | % | $14,208 | $171 | 0.33 | % | ||||||||||||||
| NOW accounts | 455,052 | 207 | 0.18 | 458,143 | 104 | 0.09 | (3,091 | ) | 103 | 0.09 | ||||||||||||||||
| Money market accounts | 649,535 | 1,449 | 0.89 | 631,570 | 1,104 | 0.69 | 17,965 | 345 | 0.20 | |||||||||||||||||
| Savings accounts | 369,787 | 60 | 0.06 | 375,528 | 60 | 0.06 | (5,741 | ) | — | — | ||||||||||||||||
| Time deposits (in-market) | 749,025 | 3,318 | 1.76 | 706,726 | 2,806 | 1.58 | 42,299 | 512 | 0.18 | |||||||||||||||||
| Total interest-bearing in-market deposits | 2,372,239 | 5,670 | 0.95 | 2,306,599 | 4,539 | 0.78 | 65,640 | 1,131 | 0.17 | |||||||||||||||||
| Wholesale brokered time deposits | 450,336 | 2,283 | 2.01 | 438,604 | 2,007 | 1.82 | 11,732 | 276 | 0.19 | |||||||||||||||||
| Total interest-bearing deposits | 2,822,575 | 7,953 | 1.12 | 2,745,203 | 6,546 | 0.95 | 77,372 | 1,407 | 0.17 | |||||||||||||||||
| FHLB advances | 878,250 | 5,446 | 2.46 | 852,904 | 4,937 | 2.30 | 25,346 | 509 | 0.16 | |||||||||||||||||
| Junior subordinated debentures | 22,681 | 240 | 4.20 | 22,681 | 232 | 4.06 | — | 8 | 0.14 | |||||||||||||||||
| Total interest-bearing liabilities | 3,723,506 | 13,639 | 1.45 | 3,620,788 | 11,715 | 1.28 | 102,718 | 1,924 | 0.17 | |||||||||||||||||
| Noninterest-bearing demand deposits | 615,392 | 612,597 | 2,795 | |||||||||||||||||||||||
| Other liabilities | 69,217 | 65,207 | 4,010 | |||||||||||||||||||||||
| Shareholders' equity | 432,043 | 426,306 | 5,737 | |||||||||||||||||||||||
| Total liabilities and shareholders' equity | $4,840,158 | $4,724,898 | $115,260 | |||||||||||||||||||||||
| Net interest income (FTE) | $34,212 | $33,784 | $428 | |||||||||||||||||||||||
| Interest rate spread | 2.68 | % | 2.75 | % | (0.07 | )% | ||||||||||||||||||||
| Net interest margin | 2.95 | % | 2.99 | % | (0.04 | )% | ||||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Three Months Ended | Dec 31, 2018 | Sep 30, 2018 | Quarter Change | ||||||
| Commercial loans | $331 | $333 | ($2 | ) | |||||
| Nontaxable debt securities | 3 | 2 | 1 | ||||||
| Total | $334 | $335 | ($1 | ) | |||||
-13-
| CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | ||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||||
| For the Twelve Months Ended | December 31, 2018 | December 31, 2017 | Change | |||||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Cash, federal funds sold and short-term investments | $53,264 | $1,017 | 1.91 | % | $60,033 | $674 | 1.12 | % | ($6,769 | ) | $343 | 0.79 | % | |||||||||||
| Mortgage loans for sale | 28,360 | 1,212 | 4.27 | 26,208 | 1,022 | 3.90 | 2,152 | 190 | 0.37 | |||||||||||||||
| Taxable debt securities | 832,374 | 21,816 | 2.62 | 759,304 | 18,927 | 2.49 | 73,070 | 2,889 | 0.13 | |||||||||||||||
| Nontaxable debt securities | 1,540 | 78 | 5.06 | 6,347 | 384 | 6.05 | (4,807 | ) | (306 | ) | (0.99 | ) | ||||||||||||
| Total securities | 833,914 | 21,894 | 2.63 | 765,651 | 19,311 | 2.52 | 68,263 | 2,583 | 0.11 | |||||||||||||||
| FHLB stock | 43,530 | 2,369 | 5.44 | 43,256 | 1,774 | 4.10 | 274 | 595 | 1.34 | |||||||||||||||
| Commercial real estate | 1,247,068 | 55,239 | 4.43 | 1,187,631 | 44,666 | 3.76 | 59,437 | 10,573 | 0.67 | |||||||||||||||
| Commercial & industrial | 627,485 | 29,845 | 4.76 | 584,647 | 26,347 | 4.51 | 42,838 | 3,498 | 0.25 | |||||||||||||||
| Total commercial | 1,874,553 | 85,084 | 4.54 | 1,772,278 | 71,013 | 4.01 | 102,275 | 14,071 | 0.53 | |||||||||||||||
| Residential real estate | 1,296,389 | 51,233 | 3.95 | 1,162,161 | 44,202 | 3.80 | 134,228 | 7,031 | 0.15 | |||||||||||||||
| Home equity | 283,868 | 13,461 | 4.74 | 296,285 | 12,280 | 4.14 | (12,417 | ) | 1,181 | 0.60 | ||||||||||||||
| Other | 28,661 | 1,402 | 4.89 | 34,498 | 1,667 | 4.83 | (5,837 | ) | (265 | ) | 0.06 | |||||||||||||
| Total consumer | 312,529 | 14,863 | 4.76 | 330,783 | 13,947 | 4.22 | (18,254 | ) | 916 | 0.54 | ||||||||||||||
| Total loans | 3,483,471 | 151,180 | 4.34 | 3,265,222 | 129,162 | 3.96 | 218,249 | 22,018 | 0.38 | |||||||||||||||
| Total interest-earning assets | 4,442,539 | 177,672 | 4.00 | 4,160,370 | 151,943 | 3.65 | 282,169 | 25,729 | 0.35 | |||||||||||||||
| Noninterest-earning assets | 239,327 | 238,636 | 691 | |||||||||||||||||||||
| Total assets | $4,681,866 | $4,399,006 | $282,860 | |||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
| Interest-bearing demand deposits | $112,792 | $1,231 | 1.09 | % | $55,534 | $62 | 0.11 | % | $57,258 | $1,169 | 0.98 | % | ||||||||||||
| NOW accounts | 455,823 | 422 | 0.09 | 437,277 | 218 | 0.05 | 18,546 | 204 | 0.04 | |||||||||||||||
| Money market accounts | 665,690 | 4,393 | 0.66 | 722,590 | 2,688 | 0.37 | (56,900 | ) | 1,705 | 0.29 | ||||||||||||||
| Savings accounts | 372,269 | 233 | 0.06 | 364,255 | 221 | 0.06 | 8,014 | 12 | — | |||||||||||||||
| Time deposits (in-market) | 684,571 | 10,208 | 1.49 | 571,733 | 6,208 | 1.09 | 112,838 | 4,000 | 0.40 | |||||||||||||||
| Total interest-bearing in-market deposits | 2,291,145 | 16,487 | 0.72 | 2,151,389 | 9,397 | 0.44 | 139,756 | 7,090 | 0.28 | |||||||||||||||
| Wholesale brokered time deposits | 432,205 | 7,688 | 1.78 | 392,894 | 5,667 | 1.44 | 39,311 | 2,021 | 0.34 | |||||||||||||||
| Total interest-bearing deposits | 2,723,350 | 24,175 | 0.89 | 2,544,283 | 15,064 | 0.59 | 179,067 | 9,111 | 0.30 | |||||||||||||||
| FHLB advances | 854,398 | 19,073 | 2.23 | 817,784 | 14,377 | 1.76 | 36,614 | 4,696 | 0.47 | |||||||||||||||
| Junior subordinated debentures | 22,681 | 869 | 3.83 | 22,681 | 613 | 2.70 | — | 256 | 1.13 | |||||||||||||||
| Other | — | — | — | 10 | 1 | 10.00 | (10 | ) | (1 | ) | (10.00 | ) | ||||||||||||
| Total interest-bearing liabilities | 3,600,429 | 44,117 | 1.23 | 3,384,758 | 30,055 | 0.89 | 215,671 | 14,062 | 0.34 | |||||||||||||||
| Noninterest-bearing demand deposits | 596,829 | 555,548 | 41,281 | |||||||||||||||||||||
| Other liabilities | 63,102 | 50,684 | 12,418 | |||||||||||||||||||||
| Shareholders' equity | 421,506 | 408,016 | 13,490 | |||||||||||||||||||||
| Total liabilities and shareholders' equity | $4,681,866 | $4,399,006 | $282,860 | |||||||||||||||||||||
| Net interest income (FTE) | $133,555 | $121,888 | $11,667 | |||||||||||||||||||||
| Interest rate spread | 2.77 | % | 2.76 | % | 0.01 | % | ||||||||||||||||||
| Net interest margin | 3.01 | % | 2.93 | % | 0.08 | % | ||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Twelve Months Ended | Dec 31, 2018 | Dec 31, 2017 | Change | ||||||
| Commercial loans | $1,248 | $2,222 | ($974 | ) | |||||
| Nontaxable debt securities | 17 | 135 | (118 | ) | |||||
| Total | $1,265 | $2,357 | ($1,092 | ) | |||||
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| SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
| Tangible Book Value per Share: | |||||||||||||||
| Total shareholders' equity, as reported | $448,184 | $427,909 | $421,571 | $413,081 | $413,284 | ||||||||||
| Less: | |||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,162 | 8,400 | 8,645 | 8,893 | 9,140 | ||||||||||
| Total tangible shareholders' equity | $376,113 | $355,600 | $349,017 | $340,279 | $340,235 | ||||||||||
| Shares outstanding, as reported | 17,302 | 17,290 | 17,278 | 17,262 | 17,227 | ||||||||||
| Book value per share - GAAP | $25.90 | $24.75 | $24.40 | $23.93 | $23.99 | ||||||||||
| Tangible book value per share - Non-GAAP | $21.74 | $20.57 | $20.20 | $19.71 | $19.75 | ||||||||||
| Tangible Equity to Tangible Assets: | |||||||||||||||
| Total tangible shareholders' equity | $376,113 | $355,600 | $349,017 | $340,279 | $340,235 | ||||||||||
| Total assets, as reported | $5,010,766 | $4,770,672 | $4,737,242 | $4,566,326 | $4,529,850 | ||||||||||
| Less: | |||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,162 | 8,400 | 8,645 | 8,893 | 9,140 | ||||||||||
| Total tangible assets | $4,938,695 | $4,698,363 | $4,664,688 | $4,493,524 | $4,456,801 | ||||||||||
| Equity to assets - GAAP | 8.94 | % | 8.97 | % | 8.90 | % | 9.05 | % | 9.12 | % | |||||
| Tangible equity to tangible assets - Non-GAAP | 7.62 | % | 7.57 | % | 7.48 | % | 7.57 | % | 7.63 | % | |||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||||
| Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Dec 31, 2018 | Dec 31, 2017 | ||||||||||||||||
| Return on Average Tangible Assets: | ||||||||||||||||||||||
| Net income, as reported | $17,036 | $17,511 | $17,674 | $16,211 | $7,982 | $68,432 | $45,925 | |||||||||||||||
| Total average assets, as reported | $4,840,158 | $4,724,898 | $4,628,816 | $4,529,708 | $4,473,340 | $4,681,866 | $4,399,006 | |||||||||||||||
| Less average balances of: | ||||||||||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,983 | |||||||||||||||
| Identifiable intangible assets, net | 8,278 | 8,519 | 8,766 | 9,014 | 9,261 | 8,642 | 9,639 | |||||||||||||||
| Total average tangible assets | $4,767,971 | $4,652,470 | $4,556,141 | $4,456,785 | $4,400,170 | $4,609,315 | $4,325,384 | |||||||||||||||
| Return on average assets - GAAP | 1.40 | % | 1.47 | % | 1.53 | % | 1.45 | % | 0.71 | % | 1.46 | % | 1.04 | % | ||||||||
| Return on average tangible assets - Non-GAAP | 1.42 | % | 1.49 | % | 1.56 | % | 1.48 | % | 0.72 | % | 1.48 | % | 1.06 | % | ||||||||
| Return on Average Tangible Equity: | ||||||||||||||||||||||
| Net income available to common shareholders, as reported | $17,004 | $17,475 | $17,636 | $16,173 | $7,958 | $68,288 | $45,817 | |||||||||||||||
| Total average equity, as reported | $432,043 | $426,306 | $416,433 | $410,955 | $417,568 | $421,506 | $408,016 | |||||||||||||||
| Less average balances of: | ||||||||||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,983 | |||||||||||||||
| Identifiable intangible assets, net | 8,278 | 8,519 | 8,766 | 9,014 | 9,261 | 8,642 | 9,639 | |||||||||||||||
| Total average tangible equity | $359,856 | $353,878 | $343,758 | $338,032 | $344,398 | $348,955 | $334,394 | |||||||||||||||
| Return on average equity - GAAP | 15.61 | % | 16.26 | % | 16.99 | % | 15.96 | % | 7.56 | % | 16.20 | % | 11.23 | % | ||||||||
| Return on average tangible equity - Non-GAAP | 18.75 | % | 19.59 | % | 20.58 | % | 19.40 | % | 9.17 | % | 19.57 | % | 13.70 | % | ||||||||
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