Exhibit 99.1
For further information:
Media Contact:
Amy Yuhn
312-564-1378
ayuhn@theprivatebank.com
Investor Relations Contact:
Sarah Lewensohn
312-564-3894
slewensohn@theprivatebank.com
PrivateBancorp Reports Fourth Quarter and Full Year 2013 Earnings
Earnings per share of $0.43 for fourth quarter 2013, up 65 percent from fourth quarter 2012
Earnings per share of $1.57 for full year 2013, up 78 percent from full year 2012
CHICAGO, January 16, 2014 - PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income available to common shareholders of $33.7 million or $0.43 per diluted share for the fourth quarter 2013, as compared to $20.0 million or $0.26 per diluted share for the fourth quarter 2012 and $33.1 million or $0.42 per diluted share for the third quarter 2013. For the year ended December 31, 2013, the Company had net income available to common shareholders of $122.9 million or $1.57 per diluted share, as compared to $64.5 million or $0.88 per diluted share for the year ended December 31, 2012.
“We finished the year with another strong quarter for PrivateBancorp,” said Larry D. Richman, President and Chief Executive Officer, PrivateBancorp, Inc. “Compared to the prior year, earnings per share increased 65 percent for the quarter and 78 percent for the year. We grew net loans $235 million and client deposits $321 million in the quarter. This growth, along with further reductions of credit costs, helped to drive net income to $34 million in the period.
“I am proud of what the team accomplished in 2013 and how that positions us for the future,” Richman continued. “Our 2013 net income nearly doubled and reflects continued client relationship development as well as our success in significantly improving asset quality, which drove credit costs lower for the year. Revenue grew to $538 million for the year despite ongoing pricing pressure in the competitive, low-rate environment. As we look ahead to 2014, our credit problems are largely behind us and we believe we can benefit from a strengthening economic environment. We will focus on consistent execution of our strategy, adding new commercial banking relationships and expanding those we have through cross-sell of our commercial, wealth management and personal banking services.”
Fourth Quarter 2013 Highlights
• | Net revenue was $136.0 million, an increase of $1.6 million as compared to third quarter 2013, benefiting from the growth in average loans and lower cost of funds. |
• | Total loans grew to $10.6 billion as of December 31, 2013, up 5 percent from a year ago and 2 percent from September 30, 2013. The increase in total loans reflected growth in commercial and industrial loans and commercial real estate and construction loans as compared to the third quarter 2013. |
• | Total deposits were $12.0 billion as of December 31, 2013, an increase of $181.1 million from September 30, 2013, with noninterest bearing demand deposit balances representing 26 percent of total deposits. |
• | Net interest margin was 3.18 percent, up 2 basis points from a year ago and stable as compared to third quarter 2013, benefiting in part from the repayment of $120 million of subordinated debt during the quarter. |
• | Nonperforming assets to total assets declined to 0.87 percent at December 31, 2013, as compared to 1.57 percent one year ago and 1.07 percent at September 30, 2013. Nonperforming loans were $94.2 million as of December 31, 2013, a decline of 32 percent from December 31, 2012 and 17 percent from September 30, 2013. In comparison to the third quarter 2013, a reduction in net charge-offs of $3.2 million contributed to the $2.9 million decline in provision for loan losses. |
• | Return on average common equity was 10.3 percent and return on average assets was 0.96 percent for the fourth quarter 2013. |
Operating Performance
Net revenue was $136.0 million in the fourth quarter 2013, an increase of 1 percent as compared to the fourth quarter 2012 and the third quarter 2013. The increase in net revenue was attributable to growth in net interest income from higher average loan balances and lower cost of funds. For the full year 2013, net revenue was $538.3 million, up 1 percent as compared to 2012, reflecting both increased net interest income from higher average loan balances and noninterest income.
Operating profit of $60.2 million in the fourth quarter 2013 was up 12 percent as compared to the fourth quarter 2012 and down 5 percent as compared to the third quarter 2013. The reduction in operating profit as compared to the third quarter 2013 was a result of increased noninterest expenses primarily related to increased employee expense and an increase in the provision for unfunded commitments. For the full year, operating profit was $235.0 million, up 14 percent as compared to 2012, and benefited primarily from lower costs associated with net foreclosed property expenses and a reduction of share-based compensation costs.
Net interest income was $108.5 million in the fourth quarter 2013, an increase of 3 percent as compared to the fourth quarter 2012 and 2 percent as compared to the third quarter 2013. The growth in net interest income over the prior quarter benefited from a 2 percent increase in average loan balances and the repayment of $120 million of long-term subordinated debt. For the full year 2013, net interest income was $421.1 million, as compared to net interest income of $419.9 million for full year 2012. Net interest margin was 3.18 percent in the fourth quarter 2013, as compared to 3.16 percent in the fourth quarter 2012 and 3.18 percent in the third quarter 2013. While one-month LIBOR declined in the fourth quarter, net interest margin benefited from the repayment of subordinated debt and higher yields on earning assets as compared to the prior quarter. The lending environment remains highly competitive and continues to put downward pressure on loan pricing.
Noninterest income was $26.7 million in the fourth quarter 2013, a decline of $2.7 million as compared to the fourth quarter 2012 and $1.0 million as compared to the third quarter 2013. Lower mortgage financing volume reduced noninterest income by $2.3 million as compared to the fourth quarter 2012 and $1.1 million as compared to the third quarter 2013. Syndication fees were comparable to the fourth quarter 2012, though declined by $2.2 million as compared to the third quarter 2013. The level of syndication activity may vary from quarter to quarter with syndication fees for third quarter 2013 a record amount.
Trust and investments income was $4.6 million, an increase of 9 percent from the fourth quarter 2012 and 1 percent from the third quarter 2013. Focused marketing efforts to add trust and investment clients in 2013 contributed to the 10 percent increase of assets under management and administration as compared to the prior year. Capital markets revenue of $5.7 million declined from $6.7 million in the fourth quarter 2012 and increased from $3.9 million in the third quarter 2013. Capital markets revenue excluding the impact of CVA was $5.1 million in the quarter, a decrease of $789,000 from the fourth quarter 2012 and an increase of $659,000 from the previous quarter. Fourth quarter 2013 capital markets revenue included an increase in foreign exchange activity as compared to the third quarter. Treasury management fees of $6.3 million grew 13 percent from the fourth quarter 2012 and 2 percent from the previous quarter, benefiting in part from new credit relationships.
For the full year 2013, noninterest income increased 3 percent to $114.0 million compared to $111.0 million for the full year 2012. In comparison to the prior year, syndication fees increased 48 percent benefiting from the Company’s loan origination capabilities combined with a broader product offering and strong market demand. Capital markets products revenue declined as client demand for interest rate management products shifted to lower revenue products and mortgage banking revenue decreased due to lower volumes primarily as a result of increasing mortgage rates.
Expenses
Noninterest expense was $75.8 million in the fourth quarter 2013, a decrease of 7 percent from the fourth quarter 2012 and an increase of 6 percent from third quarter 2013. The reduction of noninterest expense as compared to the fourth quarter 2012 reflected a decline of $6.0 million in expenses associated primarily with reduced net foreclosed property expense and share-based compensation costs offset by increased provision for unfunded commitments. The efficiency rate was 55.7 percent in the fourth quarter, as compared to 60.2 percent in fourth quarter 2012 and 53.0 percent in third quarter 2013.
As compared to the third quarter 2013, the increase of noninterest expense was comprised primarily of $1.2 million of additional variable performance-based compensation and a $1.0 million increase in provision for unfunded commitments offset by a $796,000 reduction in net foreclosed property expense. In the third quarter 2013, other expenses benefited from a $1.3 million reduction in the unfunded commitment reserve that was associated with a single credit.
Noninterest expense for the full year 2013 was $303.3 million, a decline of 7 percent from $327.1 million for 2012 with reductions in net foreclosed property expense, certain share-based compensation, insurance and loan and collection costs.
Credit Quality
In 2013, the Company significantly improved credit quality and reduced credit costs. Nonperforming assets were $122.8 million at December 31, 2013, a decline of 44 percent from December 31, 2012 and 17 percent from September 30, 2013 with the reduction attributable to continued sales of other real estate owned (“OREO”) and resolution of nonperforming loans. At year end, OREO was $28.5 million, a reduction of $53.3 million from December 31, 2012, and $6.8 million from September 30, 2013, as a result of ongoing dispositions of foreclosed property. Nonperforming loans were $94.2 million, compared to $138.8 million at December 31, 2012 and $113.3 million at September 30, 2013. Nonperforming assets to total assets were 0.87 percent at December 31, 2013, compared to 1.57 percent at December 31, 2012 and 1.07 percent at September 30, 2013.
As of December 31, 2013, the allowance for loan losses as a percent of total loans was 1.34 percent, down from 1.59 percent at December 31, 2012 and 1.40 percent at September 30, 2013. Net charge-offs were $7.3 million for the fourth quarter 2013, a decline of 59 percent as compared to the fourth quarter 2012 and 30 percent as compared to the third quarter 2013 and benefited from a higher level of loan recoveries. The provision for loan losses was $4.9 million for the fourth quarter 2013 as compared to $12.6 million for the fourth quarter 2012 and $7.8 million for third quarter 2013. On a full year basis, provision for loan loss expense was $31.2 million as compared to $70.9 million for the full year 2012 reflecting lower net charge-offs and a decline in reserve requirements for problem loans.
Credit quality results exclude covered assets acquired through an FDIC-assisted transaction that are subject to a loss sharing agreement.
Balance Sheet
Total assets were $14.1 billion at December 31, 2013, flat as compared to $14.1 billion at December 31, 2012, and up from $13.9 billion at September 30, 2013. Total loans of $10.6 billion grew $504.0 million or 5 percent from December 31, 2012 and $234.6 million or 2 percent from the previous quarter end, benefiting largely from net loan growth of commercial and industrial loans. In comparison to September 30, 2013, commercial real estate and construction loans increased as well despite continued payoffs of loans, many of which were replaced with permanent financing. At December 31, 2013, total commercial loans comprised 67 percent of total loans, up from 64 percent a year ago, and total commercial real estate and construction loans comprised 27 percent of total loans, down from 28 percent at December 31, 2012.
Total deposits were $12.0 billion at December 31, 2013, a decline of 1 percent as of December 31, 2012 and an increase of 2 percent as compared to September 30, 2013. At December 31, 2013, the loan to deposit ratio was 88.6 percent. Noninterest bearing demand deposits were $3.2 billion and comprised 26 percent of total deposits at December 31, 2013. On October 24, 2013, the $120.0 million balance of a
subordinated debt facility with a weighted average rate of 3.8 percent was repaid in full and replaced with lower cost liquidity.
The Company's investment securities portfolio was $2.5 billion at December 31, 2013, up 9 percent from December 31, 2012 and a relatively flat as compared to September 30, 2013. The securities portfolio is primarily composed of U.S. government agency backed mortgage securities, U.S. Treasuries, agency backed collateralized mortgage obligations, and investment grade municipal bonds.
Capital
As of December 31, 2013, the total risk-based capital ratio was 13.30 percent, the Tier 1 risk-based capital ratio was 11.08 percent, and the leverage ratio was 10.37 percent. The Tier 1 common capital ratio was 9.19 percent (without giving effect to the final Basel III capital rules adopted and issued by the Federal Reserve Board in July 2013) and tangible common equity ratio was 8.57 percent at the end of the fourth quarter 2013.
Quarterly Conference Call and Webcast Presentation
PrivateBancorp will host a conference call on Thursday, January 16, 2014, at 10 a.m. CT. The call may be accessed by telephone at (888) 782-9127 (U.S. and Canada) or (706) 634-5643 (International) and entering passcode #25250239. A live webcast of the call can be accessed on the Company website at: investor.theprivatebank.com by visiting the Investor Relations tab under the About Us section. A rebroadcast will be available beginning approximately two hours after the call until midnight on January 30, 2014, by calling (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) and entering passcode #25250239.
About PrivateBancorp, Inc.
PrivateBancorp, Inc., through its subsidiaries, delivers customized business and personal financial services to middle-market companies, as well as business owners, executives, entrepreneurs and families in all of the markets and communities we serve. As of December 31, 2013, the Company had 33 offices in 10 states and $14.1 billion in assets. The Company website is www.theprivatebank.com.
Forward-Looking Statements
Statements made in this press release that are not historical facts may constitute forward-looking statements within the meaning of federal securities laws. Our ability to predict results or the actual effects of future plans, strategies or events is inherently uncertain. Factors which could cause actual results to differ from those reflected in forward-looking statements include:
• | continued uncertainty regarding U.S. and global economic outlook that may impact market conditions and credit quality or prolong weakness in demand for loans or other banking products and services; |
• | unanticipated developments in pending or prospective loan transactions or greater than expected paydowns or payoffs of existing loans; |
• | unanticipated changes in interest rates; |
• | competitive trends in our markets; |
• | unforeseen credit quality problems that could result in charge-offs greater than we have anticipated in our allowance for loan losses; |
• | slower than anticipated dispositions of other real estate owned or declines in real estate values which may negatively impact net foreclosed property expense; |
• | lack of sufficient or cost-effective sources of liquidity or funding as and when needed; |
• | loss of key personnel or an inability to recruit and retain appropriate talent; |
• | potential impact of recently adopted capital rules; |
• | greater than anticipated impact on costs, revenues and offered products and services associated with the implementation of other regulatory changes; |
• | changes in monetary or fiscal policies of the U.S. Government and the potential impact from current debates related to the federal debt ceiling; or |
• | failures or disruptions to our data processing or other information or operational systems, including the potential impact of disruptions or breaches at our third party service providers. |
These factors should be considered in evaluating forward-looking statements and undue reliance should not be placed on our forward-looking statements. Readers should also consider the risks, assumptions and uncertainties set forth in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2012 as well as those set forth in our subsequent periodic reports filed with the SEC. Forward-looking statements speak only as of the date they are made and we assume no obligation to update any of these statements in light of new information, future events or otherwise unless required under the federal securities laws.
Non-U.S. GAAP Financial Measures
This press release contains both financial measures based on accounting principles generally accepted in the United States (U.S. GAAP) and non-U.S. GAAP based financial measures. We believe that presenting these non-U.S. GAAP financial measures will provide information useful to investors in understanding our underlying operational performance, our business, and performance trends and facilitates comparisons with the performance of others in the banking industry. If non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measure, as well as the reconciliation to the comparable U.S. GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with U.S. GAAP, nor are they necessarily comparable to non-U.S. GAAP performance measures that may be presented by other companies.
Editor's Note: Financial highlights attached. Full financial supplement available on Company's website at www.theprivatebank.com.
Consolidated Income Statements | |||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Unaudited | Unaudited | Unaudited | Audited | ||||||||||||
Interest Income | |||||||||||||||
Loans, including fees | $ | 110,723 | $ | 108,172 | $ | 433,829 | $ | 423,211 | |||||||
Federal funds sold and interest-bearing deposits in banks | 221 | 452 | 652 | 965 | |||||||||||
Securities: | |||||||||||||||
Taxable | 13,038 | 12,938 | 51,310 | 56,826 | |||||||||||
Exempt from Federal income taxes | 1,604 | 1,462 | 6,200 | 5,487 | |||||||||||
Other interest income | 34 | 168 | 247 | 547 | |||||||||||
Total interest income | 125,620 | 123,192 | 492,238 | 487,036 | |||||||||||
Interest Expense | |||||||||||||||
Interest-bearing demand deposits | 1,021 | 985 | 4,202 | 3,378 | |||||||||||
Savings deposits and money market accounts | 4,169 | 4,531 | 16,350 | 17,604 | |||||||||||
Brokered and time deposits | 5,062 | 5,561 | 20,161 | 21,832 | |||||||||||
Short-term and secured borrowings | 161 | 77 | 850 | 443 | |||||||||||
Long-term debt | 6,751 | 7,235 | 29,612 | 23,846 | |||||||||||
Total interest expense | 17,164 | 18,389 | 71,175 | 67,103 | |||||||||||
Net interest income | 108,456 | 104,803 | 421,063 | 419,933 | |||||||||||
Provision for loan and covered loan losses | 4,476 | 13,177 | 31,796 | 71,425 | |||||||||||
Net interest income after provision for loan and covered loan losses | 103,980 | 91,626 | 389,267 | 348,508 | |||||||||||
Non-interest Income | |||||||||||||||
Trust and Investments | 4,613 | 4,232 | 18,377 | 17,017 | |||||||||||
Mortgage banking | 1,858 | 4,197 | 12,172 | 13,460 | |||||||||||
Capital markets products | 5,720 | 6,744 | 20,728 | 25,958 | |||||||||||
Treasury management | 6,321 | 5,606 | 24,668 | 21,510 | |||||||||||
Loan, letter of credit and commitment fees | 4,474 | 4,671 | 17,217 | 18,173 | |||||||||||
Syndication fees | 2,153 | 2,231 | 13,447 | 9,107 | |||||||||||
Deposit service charges and fees and other income | 1,322 | 1,582 | 6,207 | 6,021 | |||||||||||
Net securities gains (losses) | 279 | 191 | 1,174 | (205 | ) | ||||||||||
Total non-interest income | 26,740 | 29,454 | 113,990 | 111,041 | |||||||||||
Non-interest Expense | |||||||||||||||
Salaries and employee benefits | 42,575 | 45,253 | 166,929 | 174,948 | |||||||||||
Net occupancy expense | 7,548 | 7,762 | 30,027 | 30,571 | |||||||||||
Technology and related costs | 3,443 | 3,249 | 13,726 | 13,250 | |||||||||||
Marketing | 3,592 | 2,448 | 12,590 | 10,311 | |||||||||||
Professional services | 2,393 | 1,998 | 8,539 | 8,353 | |||||||||||
Outsourced servicing costs | 1,612 | 1,814 | 6,817 | 7,419 | |||||||||||
Net foreclosed property expenses | 3,600 | 9,571 | 20,194 | 38,296 | |||||||||||
Postage, telephone, and delivery | 845 | 909 | 3,521 | 3,497 | |||||||||||
Insurance | 2,934 | 3,290 | 10,867 | 15,186 | |||||||||||
Loan and collection expense | 2,351 | 2,227 | 8,753 | 11,631 | |||||||||||
Other expenses | 4,934 | 2,794 | 21,351 | 13,670 | |||||||||||
Total non-interest expense | 75,827 | 81,315 | 303,314 | 327,132 | |||||||||||
Income before income taxes | 54,893 | 39,765 | 199,943 | 132,417 | |||||||||||
Income tax provision | 21,187 | 16,682 | 76,994 | 54,521 | |||||||||||
Net income | 33,706 | 23,083 | 122,949 | 77,896 | |||||||||||
Preferred stock dividends and discount accretion | — | 3,043 | — | 13,368 | |||||||||||
Net income available to common stockholders | $ | 33,706 | $ | 20,040 | $ | 122,949 | $ | 64,528 | |||||||
Per Common Share Data | |||||||||||||||
Basic earnings per share | $ | 0.43 | $ | 0.26 | $ | 1.58 | $ | 0.88 | |||||||
Diluted earnings per share | $ | 0.43 | $ | 0.26 | $ | 1.57 | $ | 0.88 | |||||||
Cash dividends declared | $ | 0.01 | $ | 0.01 | $ | 0.04 | $ | 0.04 | |||||||
Weighted-average common shares outstanding | 76,533 | 75,035 | 76,398 | 71,951 | |||||||||||
Weighted-average diluted common shares outstanding | 76,967 | 75,374 | 76,645 | 72,174 |
Consolidated Income Statements | |||||||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | |||||||||||||||
Interest Income | |||||||||||||||||||
Loans, including fees | $ | 110,723 | $ | 108,912 | $ | 107,407 | $ | 106,787 | $ | 108,172 | |||||||||
Federal funds sold and interest-bearing deposits in banks | 221 | 111 | 112 | 208 | 452 | ||||||||||||||
Securities: | |||||||||||||||||||
Taxable | 13,038 | 12,931 | 12,519 | 12,822 | 12,938 | ||||||||||||||
Exempt from Federal income taxes | 1,604 | 1,562 | 1,532 | 1,502 | 1,462 | ||||||||||||||
Other interest income | 34 | 61 | 62 | 90 | 168 | ||||||||||||||
Total interest income | 125,620 | 123,577 | 121,632 | 121,409 | 123,192 | ||||||||||||||
Interest Expense | |||||||||||||||||||
Interest-bearing demand deposits | 1,021 | 1,032 | 1,034 | 1,115 | 985 | ||||||||||||||
Savings deposits and money market accounts | 4,169 | 3,895 | 3,887 | 4,399 | 4,531 | ||||||||||||||
Brokered and time deposits | 5,062 | 5,014 | 4,956 | 5,129 | 5,561 | ||||||||||||||
Short-term and secured borrowings | 161 | 161 | 410 | 118 | 77 | ||||||||||||||
Long-term debt | 6,751 | 7,640 | 7,613 | 7,608 | 7,235 | ||||||||||||||
Total interest expense | 17,164 | 17,742 | 17,900 | 18,369 | 18,389 | ||||||||||||||
Net interest income | 108,456 | 105,835 | 103,732 | 103,040 | 104,803 | ||||||||||||||
Provision for loan and covered loan losses | 4,476 | 8,120 | 8,843 | 10,357 | 13,177 | ||||||||||||||
Net interest income after provision for loan and covered loan losses | 103,980 | 97,715 | 94,889 | 92,683 | 91,626 | ||||||||||||||
Non-interest Income | |||||||||||||||||||
Trust and Investments | 4,613 | 4,570 | 4,800 | 4,394 | 4,232 | ||||||||||||||
Mortgage banking | 1,858 | 2,946 | 3,198 | 4,170 | 4,197 | ||||||||||||||
Capital markets products | 5,720 | 3,921 | 6,048 | 5,039 | 6,744 | ||||||||||||||
Treasury management | 6,321 | 6,214 | 6,209 | 5,924 | 5,606 | ||||||||||||||
Loan, letter of credit and commitment fees | 4,474 | 4,384 | 4,282 | 4,077 | 4,671 | ||||||||||||||
Syndication fees | 2,153 | 4,322 | 3,140 | 3,832 | 2,231 | ||||||||||||||
Deposit service charges and fees and other income | 1,322 | 1,298 | 1,196 | 2,391 | 1,582 | ||||||||||||||
Net securities gains (losses) | 279 | 118 | 136 | 641 | 191 | ||||||||||||||
Total non-interest income | 26,740 | 27,773 | 29,009 | 30,468 | 29,454 | ||||||||||||||
Non-interest Expense | |||||||||||||||||||
Salaries and employee benefits | 42,575 | 41,360 | 39,854 | 43,140 | 45,253 | ||||||||||||||
Net occupancy expense | 7,548 | 7,558 | 7,387 | 7,534 | 7,762 | ||||||||||||||
Technology and related costs | 3,443 | 3,343 | 3,476 | 3,464 | 3,249 | ||||||||||||||
Marketing | 3,592 | 2,986 | 3,695 | 2,317 | 2,448 | ||||||||||||||
Professional services | 2,393 | 2,465 | 1,782 | 1,899 | 1,998 | ||||||||||||||
Outsourced servicing costs | 1,612 | 1,607 | 1,964 | 1,634 | 1,814 | ||||||||||||||
Net foreclosed property expenses | 3,600 | 4,396 | 5,555 | 6,643 | 9,571 | ||||||||||||||
Postage, telephone, and delivery | 845 | 852 | 981 | 843 | 909 | ||||||||||||||
Insurance | 2,934 | 2,590 | 2,804 | 2,539 | 3,290 | ||||||||||||||
Loan and collection expense | 2,351 | 1,345 | 2,280 | 2,777 | 2,227 | ||||||||||||||
Other expenses | 4,934 | 2,767 | 7,477 | 6,173 | 2,794 | ||||||||||||||
Total non-interest expense | 75,827 | 71,269 | 77,255 | 78,963 | 81,315 | ||||||||||||||
Income before income taxes | 54,893 | 54,219 | 46,643 | 44,188 | 39,765 | ||||||||||||||
Income tax provision | 21,187 | 21,161 | 17,728 | 16,918 | 16,682 | ||||||||||||||
Net income | 33,706 | 33,058 | 28,915 | 27,270 | 23,083 | ||||||||||||||
Preferred stock dividends and discount accretion | — | — | — | — | 3,043 | ||||||||||||||
Net income available to common stockholders | $ | 33,706 | $ | 33,058 | $ | 28,915 | $ | 27,270 | $ | 20,040 | |||||||||
Per Common Share Data | |||||||||||||||||||
Basic earnings per share | $ | 0.43 | $ | 0.42 | $ | 0.37 | $ | 0.35 | $ | 0.26 | |||||||||
Diluted earnings per share | $ | 0.43 | $ | 0.42 | $ | 0.37 | $ | 0.35 | $ | 0.26 | |||||||||
Cash dividends declared | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||
Weighted-average common shares outstanding | 76,533 | 76,494 | 76,415 | 76,143 | 75,035 | ||||||||||||||
Weighted-average diluted common shares outstanding | 76,967 | 76,819 | 76,581 | 76,203 | 75,374 |
Consolidated Balance Sheets | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
12/31/13 | 9/30/13 | 6/30/13 | 3/31/13 | 12/31/12 | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||||
Assets | |||||||||||||||||||
Cash and due from banks | $ | 133,518 | $ | 247,460 | $ | 150,683 | $ | 118,583 | $ | 234,308 | |||||||||
Federal funds sold and interest-bearing deposits in banks | 306,544 | 180,608 | 147,699 | 203,647 | 707,143 | ||||||||||||||
Loans held-for-sale | 26,816 | 27,644 | 34,803 | 38,091 | 49,696 | ||||||||||||||
Securities available-for-sale, at fair value | 1,602,476 | 1,611,022 | 1,580,179 | 1,457,433 | 1,451,160 | ||||||||||||||
Securities held-to-maturity, at amortized cost | 921,436 | 931,342 | 955,688 | 959,994 | 863,727 | ||||||||||||||
Federal Home Loan Bank ("FHLB") stock | 30,005 | 34,063 | 34,063 | 34,288 | 43,387 | ||||||||||||||
Loans – excluding covered assets, net of unearned fees | 10,644,021 | 10,409,443 | 10,094,636 | 10,033,803 | 10,139,982 | ||||||||||||||
Allowance for loan losses | (143,109 | ) | (145,513 | ) | (148,183 | ) | (153,992 | ) | (161,417 | ) | |||||||||
Loans, net of allowance for loan losses and unearned fees | 10,500,912 | 10,263,930 | 9,946,453 | 9,879,811 | 9,978,565 | ||||||||||||||
Covered assets | 112,746 | 140,083 | 158,326 | 176,855 | 194,216 | ||||||||||||||
Allowance for covered loan losses | (16,511 | ) | (21,653 | ) | (24,995 | ) | (24,089 | ) | (24,011 | ) | |||||||||
Covered assets, net of allowance for covered loan losses | 96,235 | 118,430 | 133,331 | 152,766 | 170,205 | ||||||||||||||
Other real estate owned, excluding covered assets | 28,548 | 35,310 | 57,134 | 73,857 | 81,880 | ||||||||||||||
Premises, furniture, and equipment, net | 39,704 | 36,445 | 37,025 | 38,373 | 39,508 | ||||||||||||||
Accrued interest receivable | 37,004 | 35,758 | 38,325 | 39,205 | 34,832 | ||||||||||||||
Investment in bank owned life insurance | 53,865 | 53,539 | 53,216 | 52,873 | 52,513 | ||||||||||||||
Goodwill | 94,041 | 94,484 | 94,496 | 94,509 | 94,521 | ||||||||||||||
Other intangible assets | 8,892 | 10,486 | 11,266 | 12,047 | 12,828 | ||||||||||||||
Derivative assets | 48,422 | 57,771 | 57,361 | 90,303 | 99,261 | ||||||||||||||
Other assets | 157,328 | 130,848 | 144,771 | 126,450 | 143,981 | ||||||||||||||
Total assets | $ | 14,085,746 | $ | 13,869,140 | $ | 13,476,493 | $ | 13,372,230 | $ | 14,057,515 | |||||||||
Liabilities | |||||||||||||||||||
Demand deposits: | |||||||||||||||||||
Noninterest-bearing | $ | 3,172,676 | $ | 3,106,986 | $ | 2,736,868 | $ | 2,756,879 | $ | 3,690,340 | |||||||||
Interest-bearing | 1,470,856 | 1,183,471 | 1,234,134 | 1,390,955 | 1,057,390 | ||||||||||||||
Savings deposits and money market accounts | 4,799,561 | 4,778,057 | 4,654,930 | 4,741,864 | 4,912,820 | ||||||||||||||
Brokered time deposits | 1,119,777 | 1,303,596 | 1,190,796 | 983,625 | 993,455 | ||||||||||||||
Time deposits | 1,450,771 | 1,460,446 | 1,491,604 | 1,518,980 | 1,519,629 | ||||||||||||||
Total deposits | 12,013,641 | 11,832,556 | 11,308,332 | 11,392,303 | 12,173,634 | ||||||||||||||
Short-term and secured borrowings | 8,400 | 131,400 | 308,700 | 107,775 | 5,000 | ||||||||||||||
Long-term debt | 627,793 | 499,793 | 499,793 | 499,793 | 499,793 | ||||||||||||||
Accrued interest payable | 6,326 | 6,042 | 5,963 | 6,787 | 7,141 | ||||||||||||||
Derivative liabilities | 48,890 | 55,933 | 62,014 | 84,370 | 93,276 | ||||||||||||||
Other liabilities | 78,792 | 69,728 | 58,651 | 49,137 | 71,505 | ||||||||||||||
Total liabilities | 12,783,842 | 12,595,452 | 12,243,453 | 12,140,165 | 12,850,349 | ||||||||||||||
Equity | |||||||||||||||||||
Common stock: | |||||||||||||||||||
Voting | 75,240 | 75,240 | 75,238 | 73,144 | 73,479 | ||||||||||||||
Nonvoting | 1,585 | 1,585 | 1,585 | 3,536 | 3,536 | ||||||||||||||
Treasury stock | (6,415 | ) | (7,303 | ) | (9,001 | ) | (9,631 | ) | (24,150 | ) | |||||||||
Additional paid-in capital | 1,022,023 | 1,019,143 | 1,016,615 | 1,014,443 | 1,026,438 | ||||||||||||||
Retained earnings | 199,627 | 166,700 | 134,423 | 106,288 | 79,799 | ||||||||||||||
Accumulated other comprehensive income, net of tax | 9,844 | 18,323 | 14,180 | 44,285 | 48,064 | ||||||||||||||
Total equity | 1,301,904 | 1,273,688 | 1,233,040 | 1,232,065 | 1,207,166 | ||||||||||||||
Total liabilities and equity | $ | 14,085,746 | $ | 13,869,140 | $ | 13,476,493 | $ | 13,372,230 | $ | 14,057,515 |
Selected Financial Data | ||||||||||||||||||||
(Amounts in thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | ||||||||||||||||
Selected Statement of Income Data: | ||||||||||||||||||||
Net interest income | $ | 108,456 | $ | 105,835 | $ | 103,732 | $ | 103,040 | $ | 104,803 | ||||||||||
Net revenue (1)(2) | $ | 136,036 | $ | 134,426 | $ | 133,546 | $ | 134,292 | $ | 135,022 | ||||||||||
Operating profit (1)(2) | $ | 60,209 | $ | 63,157 | $ | 56,291 | $ | 55,329 | $ | 53,707 | ||||||||||
Provision for loan and covered loan losses | $ | 4,476 | $ | 8,120 | $ | 8,843 | $ | 10,357 | $ | 13,177 | ||||||||||
Income before income taxes | $ | 54,893 | $ | 54,219 | $ | 46,643 | $ | 44,188 | $ | 39,765 | ||||||||||
Net income available to common stockholders | $ | 33,706 | $ | 33,058 | $ | 28,915 | $ | 27,270 | $ | 20,040 | ||||||||||
Per Common Share Data: | ||||||||||||||||||||
Basic earnings per share | $ | 0.43 | $ | 0.42 | $ | 0.37 | $ | 0.35 | $ | 0.26 | ||||||||||
Diluted earnings per share | $ | 0.43 | $ | 0.42 | $ | 0.37 | $ | 0.35 | $ | 0.26 | ||||||||||
Dividends declared | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
Book value (period end) (1) | $ | 16.75 | $ | 16.40 | $ | 15.88 | $ | 15.87 | $ | 15.65 | ||||||||||
Tangible book value (period end) (1)(2) | $ | 15.43 | $ | 15.05 | $ | 14.52 | $ | 14.49 | $ | 14.26 | ||||||||||
Market value (close) | $ | 28.93 | $ | 21.40 | $ | 21.22 | $ | 18.89 | $ | 15.32 | ||||||||||
Book value multiple | 1.73 | x | 1.31 | x | 1.34 | x | 1.19 | x | 0.98 | x | ||||||||||
Share Data: | ||||||||||||||||||||
Weighted-average common shares outstanding | 76,533 | 76,494 | 76,415 | 76,143 | 75,035 | |||||||||||||||
Weighted-average diluted common shares outstanding | 76,967 | 76,819 | 76,581 | 76,203 | 75,374 | |||||||||||||||
Common shares issued (period end) | 77,982 | 77,993 | 78,015 | 78,050 | 78,062 | |||||||||||||||
Common shares outstanding (period end) | 77,708 | 77,680 | 77,630 | 77,649 | 77,115 | |||||||||||||||
Performance Ratio: | ||||||||||||||||||||
Return on average assets | 0.96 | % | 0.96 | % | 0.86 | % | 0.81 | % | 0.67 | % | ||||||||||
Return on average common equity | 10.28 | % | 10.43 | % | 9.28 | % | 9.01 | % | 6.64 | % | ||||||||||
Return on average tangible common equity (1)(2) | 11.33 | % | 11.55 | % | 10.30 | % | 10.04 | % | 7.45 | % | ||||||||||
Net interest margin (1)(2) | 3.18 | % | 3.18 | % | 3.22 | % | 3.19 | % | 3.16 | % | ||||||||||
Fee revenue as a percent of total revenue (1) | 19.61 | % | 20.72 | % | 21.77 | % | 22.45 | % | 21.83 | % | ||||||||||
Non-interest income to average assets | 0.76 | % | 0.81 | % | 0.87 | % | 0.91 | % | 0.85 | % | ||||||||||
Non-interest expense to average assets | 2.16 | % | 2.07 | % | 2.31 | % | 2.35 | % | 2.35 | % | ||||||||||
Net overhead ratio (1) | 1.40 | % | 1.26 | % | 1.44 | % | 1.44 | % | 1.50 | % | ||||||||||
Efficiency ratio (1)(2) | 55.74 | % | 53.02 | % | 57.85 | % | 58.80 | % | 60.22 | % | ||||||||||
Balance Sheet Ratios: | ||||||||||||||||||||
Loans to deposits (period end) (3) | 88.60 | % | 87.97 | % | 89.27 | % | 88.08 | % | 83.29 | % | ||||||||||
Average interest-earning assets to average interest-bearing liabilities | 144.87 | % | 140.72 | % | 139.76 | % | 141.21 | % | 150.03 | % | ||||||||||
Capital Ratios (period end): | ||||||||||||||||||||
Total risk-based capital (1) | 13.30 | % | 13.48 | % | 13.70 | % | 13.58 | % | 13.17 | % | ||||||||||
Tier 1 risk-based capital (1) | 11.08 | % | 11.05 | % | 11.04 | % | 10.90 | % | 10.51 | % | ||||||||||
Tier 1 leverage ratio (1) | 10.37 | % | 10.32 | % | 10.25 | % | 9.86 | % | 9.56 | % | ||||||||||
Tier 1 common equity to risk-weighted assets (1)(2)(4) | 9.19 | % | 9.11 | % | 9.05 | % | 8.89 | % | 8.52 | % | ||||||||||
Tangible common equity to tangible assets (1)(2) | 8.57 | % | 8.49 | % | 8.43 | % | 8.48 | % | 7.88 | % | ||||||||||
Total equity to total assets | 9.24 | % | 9.18 | % | 9.15 | % | 9.21 | % | 8.59 | % |
(1) | Refer to Glossary of Terms for definition. |
(2) | This is a non-U.S. GAAP financial measure. Refer to "Non-U.S. GAAP Financial Measures" for a reconciliation from non-U.S. GAAP to U.S. GAAP. |
(3) | Excludes covered assets. Refer to Glossary of Terms for definition. |
(4) | Does not give effect to the final Basel III capital rules adopted and issued by the Federal Reserve Board in July 2013. |
Selected Financial Data (continued) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | |||||||||||||||
Additional Selected Information: | |||||||||||||||||||
Increase (decrease) credit valuation adjustment on capital markets derivatives (1) | $ | 619 | $ | (521 | ) | $ | 1,882 | $ | 246 | $ | 854 | ||||||||
Salaries and employee benefits: | |||||||||||||||||||
Salaries and wages | $ | 23,971 | $ | 23,639 | $ | 23,397 | $ | 24,015 | $ | 24,333 | |||||||||
Share-based costs | 3,316 | 3,261 | 3,236 | 2,863 | 5,665 | ||||||||||||||
Incentive compensation, retirement costs and other employee benefits | 15,288 | 14,460 | 13,221 | 16,262 | 15,255 | ||||||||||||||
Total salaries and employee benefits | $ | 42,575 | $ | 41,360 | $ | 39,854 | $ | 43,140 | $ | 45,253 | |||||||||
Provision for unfunded commitments | $ | 1,019 | $ | (1,346 | ) | $ | 467 | $ | 1,723 | $ | (867 | ) | |||||||
Assets under management and administration (AUMA) (1) | $ | 5,731,980 | $ | 5,570,614 | $ | 5,427,498 | $ | 5,515,199 | $ | 5,196,094 | |||||||||
Custody assets included in AUMA | $ | 2,506,291 | $ | 2,427,093 | $ | 2,351,163 | $ | 2,438,600 | $ | 2,345,410 |
Basic and Diluted Earnings per Common Share | |||||||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | |||||||||||||||
Basic | |||||||||||||||||||
Net income available to common stockholders | $ | 33,706 | $ | 33,058 | $ | 28,915 | $ | 27,270 | $ | 20,040 | |||||||||
Earnings allocated to participating stockholders (2) | (664 | ) | (655 | ) | (576 | ) | (538 | ) | (348 | ) | |||||||||
Earnings allocated to common stockholders | $ | 33,042 | $ | 32,403 | $ | 28,339 | $ | 26,732 | $ | 19,692 | |||||||||
Weighted-average common shares outstanding | 76,533 | 76,494 | 76,415 | 76,143 | 75,035 | ||||||||||||||
Basic earnings per common share | $ | 0.43 | $ | 0.42 | $ | 0.37 | $ | 0.35 | $ | 0.26 | |||||||||
Diluted | |||||||||||||||||||
Diluted earnings applicable to common stockholders (3) | $ | 33,046 | $ | 32,406 | $ | 28,340 | $ | 26,732 | $ | 19,692 | |||||||||
Weighted-average diluted common shares outstanding: | |||||||||||||||||||
Weighted-average common shares outstanding | 76,533 | 76,494 | 76,415 | 76,143 | 75,035 | ||||||||||||||
Dilutive effect of stock awards | 434 | 325 | 166 | 60 | 339 | ||||||||||||||
Weighted-average diluted common shares outstanding | $ | 76,967 | $ | 76,819 | $ | 76,581 | $ | 76,203 | $ | 75,374 | |||||||||
Diluted earnings per common share | $ | 0.43 | $ | 0.42 | $ | 0.37 | $ | 0.35 | $ | 0.26 |
(1) | Refer to Glossary of Terms for definition. |
(2) | Participating stockholders are those that hold certain share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents. Such shares or units are considered participating securities (i.e., the Company’s deferred and restricted stock units and nonvested restricted stock awards). |
(2) | Earnings allocated to common stockholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to common stockholders and participating securities for the purposes of calculating diluted earnings per share. |
Loan Composition (excluding covered assets (1)) | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||
12/31/13 | % of Total | 9/30/13 | % of Total | 6/30/13 | % of Total | 3/31/13 | % of Total | 12/31/12 | % of Total | |||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||||||||||||||||||||
Commercial and industrial | $ | 5,457,574 | 51 | % | $ | 5,384,222 | 52 | % | $ | 5,019,494 | 50 | % | $ | 4,951,951 | 49 | % | $ | 4,901,210 | 48 | % | ||||||||||||||
Commercial - owner-occupied CRE | 1,674,260 | 16 | % | 1,604,470 | 15 | % | 1,641,973 | 16 | % | 1,640,064 | 16 | % | 1,595,574 | 16 | % | |||||||||||||||||||
Total commercial | 7,131,834 | 67 | % | 6,988,692 | 67 | % | 6,661,467 | 66 | % | 6,592,015 | 65 | % | 6,496,784 | 64 | % | |||||||||||||||||||
Commercial real estate | 1,987,307 | 19 | % | 1,914,725 | 18 | % | 1,981,541 | 20 | % | 2,002,833 | 20 | % | 2,132,063 | 21 | % | |||||||||||||||||||
Commercial real estate - multi-family | 513,194 | 5 | % | 573,371 | 6 | % | 520,160 | 5 | % | 517,418 | 5 | % | 543,622 | 5 | % | |||||||||||||||||||
Total commercial real estate | 2,500,501 | 24 | % | 2,488,096 | 24 | % | 2,501,701 | 25 | % | 2,520,251 | 25 | % | 2,675,685 | 26 | % | |||||||||||||||||||
Construction | 293,387 | 3 | % | 237,440 | 3 | % | 211,976 | 2 | % | 174,077 | 2 | % | 190,496 | 2 | % | |||||||||||||||||||
Residential real estate | 341,868 | 3 | % | 346,619 | 3 | % | 347,629 | 3 | % | 368,569 | 4 | % | 373,580 | 4 | % | |||||||||||||||||||
Home equity | 149,732 | 1 | % | 148,058 | 1 | % | 159,958 | 2 | % | 162,035 | 2 | % | 167,760 | 2 | % | |||||||||||||||||||
Personal | 226,699 | 2 | % | 200,538 | 2 | % | 211,905 | 2 | % | 216,856 | 2 | % | 235,677 | 2 | % | |||||||||||||||||||
Total loans | $ | 10,644,021 | 100 | % | $ | 10,409,443 | 100 | % | $ | 10,094,636 | 100 | % | $ | 10,033,803 | 100 | % | $ | 10,139,982 | 100 | % |
(1) | Refer to Glossary of Terms for definition. |
Commercial Loans Composition by Industry Segment (excluding covered assets (1)) | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
(Classified pursuant to the North American Industrial Classification System standard industry descriptions and represents our client's primary business activity) | ||||||||||||||||||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
Amount | % of Total | Amount Non-performing | % Non-perform-ing(2) | Amount | % of Total | Amount Non-performing | % Non-perform-ing(2) | Amount | % of Total | |||||||||||||||||||||||||
Manufacturing | $ | 1,583,679 | 22 | % | $ | 278 | * | $ | 1,665,701 | 24 | % | $ | 199 | * | $ | 1,496,719 | 23 | % | ||||||||||||||||
Healthcare | 1,653,596 | 23 | % | 309 | * | 1,530,726 | 22 | % | 309 | * | 1,514,496 | 23 | % | |||||||||||||||||||||
Wholesale trade | 695,049 | 10 | % | 629 | * | 699,778 | 10 | % | 130 | * | 635,477 | 10 | % | |||||||||||||||||||||
Finance and insurance | 643,119 | 9 | % | 899 | * | 640,171 | 9 | % | 513 | * | 584,763 | 9 | % | |||||||||||||||||||||
Real estate, rental and leasing | 444,210 | 6 | % | 2,200 | * | 400,965 | 6 | % | 1,736 | * | 359,947 | 6 | % | |||||||||||||||||||||
Professional, scientific and technical services | 454,373 | 7 | % | 2,899 | 1 | % | 476,878 | 7 | % | 2,940 | 1 | % | 391,976 | 6 | % | |||||||||||||||||||
Administrative, support, waste management and remediation services | 449,777 | 6 | % | — | — | % | 402,113 | 6 | % | — | — | % | 426,960 | 7 | % | |||||||||||||||||||
Architecture, engineering and construction | 249,444 | 4 | % | 6,006 | 2 | % | 247,487 | 3 | % | 9,625 | 4 | % | 225,199 | 3 | % | |||||||||||||||||||
Retail | 223,541 | 3 | % | — | — | % | 185,369 | 3 | % | — | — | % | 166,678 | 3 | % | |||||||||||||||||||
All other (3) | 735,046 | 10 | % | 11,559 | 2 | % | 739,504 | 10 | % | 11,429 | 2 | % | 694,569 | 10 | % | |||||||||||||||||||
Total commercial (4) | $ | 7,131,834 | 100 | % | $ | 24,779 | * | $ | 6,988,692 | 100 | % | $ | 26,881 | * | $ | 6,496,784 | 100 | % |
Commercial Real Estate and Construction Loan Portfolio by Collateral Type | ||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
Amount | % of Total | Amount Non-performing | % Non-perform-ing(2) | Amount | % of Total | Amount Non-performing | % Non-perform-ing(2) | Amount | % of Total | |||||||||||||||||||||||||
Commercial Real Estate Portfolio | ||||||||||||||||||||||||||||||||||
Land | $ | 216,176 | 9 | % | $ | 20,154 | 9 | % | $ | 207,112 | 8 | % | $ | 36,188 | 17 | % | 240,503 | 9 | % | |||||||||||||||
Residential 1-4 family | 103,568 | 4 | % | 2,982 | 3 | % | 40,779 | 2 | % | 3,405 | 8 | % | 58,704 | 2 | % | |||||||||||||||||||
Multi-family | 513,194 | 20 | % | 7,015 | 1 | % | 573,371 | 23 | % | 2,633 | * | 543,622 | 20 | % | ||||||||||||||||||||
Industrial/warehouse | 271,230 | 11 | % | 7,916 | 3 | % | 256,826 | 10 | % | 9,035 | 4 | % | 272,535 | 10 | % | |||||||||||||||||||
Office | 470,790 | 19 | % | 1,726 | * | 485,162 | 20 | % | 4,519 | 1 | % | 566,834 | 21 | % | ||||||||||||||||||||
Retail | 490,955 | 19 | % | 1,565 | * | 483,548 | 19 | % | 3,356 | 1 | % | 472,024 | 18 | % | ||||||||||||||||||||
Healthcare | 167,226 | 7 | % | — | — | % | 217,407 | 9 | % | — | — | % | 205,318 | 8 | % | |||||||||||||||||||
Mixed use/other | 267,362 | 11 | % | 5,595 | 2 | % | 223,891 | 9 | % | 3,818 | 2 | % | 316,145 | 12 | % | |||||||||||||||||||
Total commercial real estate | $ | 2,500,501 | 100 | % | $ | 46,953 | 2 | % | $ | 2,488,096 | 100 | % | $ | 62,954 | 3 | % | $ | 2,675,685 | 100 | % | ||||||||||||||
Construction Portfolio | ||||||||||||||||||||||||||||||||||
Residential 1-4 family | $ | 20,960 | 7 | % | $ | — | — | % | $ | 13,014 | 5 | % | $ | — | — | % | 14,160 | 7 | % | |||||||||||||||
Multi-family | 58,131 | 20 | % | — | — | % | 39,173 | 17 | % | — | — | % | 36,129 | 19 | % | |||||||||||||||||||
Industrial/warehouse | 29,343 | 10 | % | — | — | % | 21,326 | 9 | % | — | — | % | 29,633 | 16 | % | |||||||||||||||||||
Office | 20,596 | 7 | % | — | — | % | 21,866 | 9 | % | — | — | % | 8,863 | 5 | % | |||||||||||||||||||
Retail | 83,640 | 28 | % | — | — | % | 85,096 | 36 | % | — | — | % | 37,457 | 20 | % | |||||||||||||||||||
Healthcare | 43,506 | 15 | % | — | — | % | 27,553 | 12 | % | — | — | % | 14,196 | 7 | % | |||||||||||||||||||
Mixed use/other | 37,211 | 13 | % | — | — | % | 29,412 | 12 | % | — | — | % | 50,058 | 26 | % | |||||||||||||||||||
Total construction | $ | 293,387 | 100 | % | $ | — | — | % | $ | 237,440 | 100 | % | $ | — | — | % | $ | 190,496 | 100 | % |
(1) | Refer to Glossary of Terms for definition. |
(2) | Calculated as nonperforming loans in the respective industry segment or collateral type divided by total loans of the corresponding industry segment or collateral type presented above. |
(3) | All other consists of numerous smaller balances across a variety of industries with no category greater than 3%. |
(4) | Includes owner-occupied commercial real estate of $1.7 billion at December 31, 2013 and $1.6 billion at September 30, 2013, and December 31, 2012, respectively. |
* | Less than 1%. |
Note: Certain reclassifications have been made to prior period amounts to conform with the current period presentation.
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | |||||||||||||||
Credit Quality Key Ratios | |||||||||||||||||||
Net charge-offs (annualized) to average loans | 0.28 | % | 0.40 | % | 0.56 | % | 0.70 | % | 0.73 | % | |||||||||
Nonperforming loans to total loans | 0.89 | % | 1.09 | % | 1.20 | % | 1.28 | % | 1.37 | % | |||||||||
Nonperforming loans to total assets | 0.67 | % | 0.82 | % | 0.90 | % | 0.96 | % | 0.99 | % | |||||||||
Nonperforming assets to total assets | 0.87 | % | 1.07 | % | 1.33 | % | 1.51 | % | 1.57 | % | |||||||||
Allowance for loan losses to: | |||||||||||||||||||
Total loans | 1.34 | % | 1.40 | % | 1.47 | % | 1.53 | % | 1.59 | % | |||||||||
Nonperforming loans | 152 | % | 128 | % | 122 | % | 120 | % | 116 | % | |||||||||
Nonperforming assets | |||||||||||||||||||
Loans past due 90 days and accruing | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Nonaccrual loans | 94,238 | 113,286 | 121,759 | 128,657 | 138,780 | ||||||||||||||
OREO | 28,548 | 35,310 | 57,134 | 73,857 | 81,880 | ||||||||||||||
Total nonperforming assets | $ | 122,786 | $ | 148,596 | $ | 178,893 | $ | 202,514 | $ | 220,660 | |||||||||
Restructured loans accruing interest | $ | 20,176 | $ | 32,343 | $ | 48,281 | $ | 46,591 | $ | 60,980 | |||||||||
Special mention loans | $ | 71,257 | $ | 67,518 | $ | 92,880 | $ | 106,446 | $ | 96,794 | |||||||||
Potential problem loans | $ | 101,772 | $ | 101,324 | $ | 97,196 | $ | 78,185 | $ | 107,876 | |||||||||
Nonperforming Loans Rollforward | |||||||||||||||||||
Beginning balance | $ | 113,286 | $ | 121,759 | $ | 128,657 | $ | 138,780 | $ | 179,895 | |||||||||
Additions: | |||||||||||||||||||
New nonaccrual loans | 20,082 | 25,642 | 26,190 | 31,331 | 28,527 | ||||||||||||||
Reductions: | |||||||||||||||||||
Return to performing status | (370 | ) | — | (2,288 | ) | — | (3,824 | ) | |||||||||||
Paydowns and payoffs, net of advances | (16,464 | ) | (12,205 | ) | (246 | ) | (885 | ) | (21,454 | ) | |||||||||
Net sales | (4,438 | ) | (1,119 | ) | (12,601 | ) | (12,809 | ) | (20,544 | ) | |||||||||
Transfer to OREO | (6,642 | ) | (1,036 | ) | (3,366 | ) | (6,266 | ) | (2,826 | ) | |||||||||
Transfer to loans held for sale | — | (7,359 | ) | — | (2,240 | ) | — | ||||||||||||
Charge-offs | (11,216 | ) | (12,396 | ) | (14,587 | ) | (19,254 | ) | (20,994 | ) | |||||||||
Total reductions | (39,130 | ) | (34,115 | ) | (33,088 | ) | (41,454 | ) | (69,642 | ) | |||||||||
Balance at end of period | $ | 94,238 | $ | 113,286 | $ | 121,759 | $ | 128,657 | $ | 138,780 | |||||||||
OREO Rollforward | |||||||||||||||||||
Beginning balance | $ | 35,310 | $ | 57,134 | $ | 73,857 | $ | 81,880 | $ | 97,833 | |||||||||
New foreclosed properties | 6,642 | 1,036 | 3,366 | 6,266 | 2,826 | ||||||||||||||
Valuation adjustments | (3,138 | ) | (5,734 | ) | (6,128 | ) | (4,458 | ) | (5,274 | ) | |||||||||
Disposals: | |||||||||||||||||||
Sales proceeds | (10,273 | ) | (18,902 | ) | (14,677 | ) | (9,067 | ) | (11,526 | ) | |||||||||
Net gain (loss) on sale | 7 | 1,776 | 716 | (764 | ) | (1,979 | ) | ||||||||||||
Balance at end of period | $ | 28,548 | $ | 35,310 | $ | 57,134 | $ | 73,857 | $ | 81,880 | |||||||||
Restructured Loans Accruing Interest Rollforward | |||||||||||||||||||
Beginning balance | $ | 32,343 | $ | 48,281 | $ | 46,591 | $ | 60,980 | $ | 58,431 | |||||||||
Additions: | |||||||||||||||||||
New restructured loans accruing interest | 950 | 1,408 | 4,219 | 458 | 6,552 | ||||||||||||||
Restructured loans returned to accruing status | 243 | — | — | — | 3,823 | ||||||||||||||
Reductions: | |||||||||||||||||||
Paydowns and payoffs, net of advances | (13,211 | ) | (15,368 | ) | (2,347 | ) | 36 | (3,995 | ) | ||||||||||
Transfers to nonperforming loans | (149 | ) | — | — | (14,883 | ) | (2,988 | ) | |||||||||||
Removal of restructured loan status | — | (1,978 | ) | (182 | ) | — | (843 | ) | |||||||||||
Balance at end of period | $ | 20,176 | $ | 32,343 | $ | 48,281 | $ | 46,591 | $ | 60,980 |
(1) | Refer to Glossary of Terms for definition. |
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Credit Quality Indicators (1) | |||||||||||||||||||||||||||
Special Mention Loans | % of Portfolio Loan Type | Potential Problem Loans | % of Portfolio Loan Type | Non-Performing Loans | % of Portfolio Loan Type | Total Loans | |||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Commercial | $ | 62,272 | 0.9 | % | $ | 87,391 | 1.2 | % | $ | 24,779 | 0.3 | % | $ | 7,131,834 | |||||||||||||
Commercial real estate | 1,016 | * | 4,489 | 0.2 | % | 46,953 | 1.9 | % | 2,500,501 | ||||||||||||||||||
Construction | — | — | % | — | — | % | — | — | % | 293,387 | |||||||||||||||||
Residential real estate | 4,898 | 1.4 | % | 7,177 | 2.1 | % | 9,976 | 2.9 | % | 341,868 | |||||||||||||||||
Home equity | 2,884 | 1.9 | % | 2,538 | 1.7 | % | 11,879 | 7.9 | % | 149,732 | |||||||||||||||||
Personal | 187 | 0.1 | % | 177 | 0.1 | % | 651 | 0.3 | % | 226,699 | |||||||||||||||||
Total | $ | 71,257 | 0.7 | % | $ | 101,772 | 1.0 | % | $ | 94,238 | 0.9 | % | $ | 10,644,021 | |||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||
Commercial | $ | 58,829 | 0.8 | % | $ | 81,704 | 1.2 | % | $ | 26,881 | 0.4 | % | $ | 6,988,692 | |||||||||||||
Commercial real estate | 518 | * | 9,198 | 0.4 | % | 62,954 | 2.5 | % | 2,488,096 | ||||||||||||||||||
Construction | — | — | % | — | — | % | — | — | % | 237,440 | |||||||||||||||||
Residential real estate | 5,945 | 1.7 | % | 6,412 | 1.8 | % | 11,237 | 3.2 | % | 346,619 | |||||||||||||||||
Home equity | 1,790 | 1.2 | % | 3,951 | 2.7 | % | 11,450 | 7.7 | % | 148,058 | |||||||||||||||||
Personal | 436 | 0.2 | % | 59 | * | 764 | 0.4 | % | 200,538 | ||||||||||||||||||
Total | $ | 67,518 | 0.6 | % | $ | 101,324 | 1.0 | % | $ | 113,286 | 1.1 | % | $ | 10,409,443 |
* | Less than 0.1%. |
Loan Portfolio Aging | |||||||||||||||||||||||
Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days Past Due and Accruing | Nonaccrual | Total Loans | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Loan balances: | |||||||||||||||||||||||
Commercial | $ | 7,106,900 | $ | 2 | $ | 153 | $ | — | $ | 24,779 | $ | 7,131,834 | |||||||||||
Commercial real estate | 2,447,441 | 5,946 | 161 | — | 46,953 | 2,500,501 | |||||||||||||||||
Construction | 293,387 | — | — | — | — | 293,387 | |||||||||||||||||
Residential real estate | 330,922 | 674 | 296 | — | 9,976 | 341,868 | |||||||||||||||||
Personal and home equity | 362,263 | 1,232 | 406 | — | 12,530 | 376,431 | |||||||||||||||||
Total loans | $ | 10,540,913 | $ | 7,854 | $ | 1,016 | $ | — | $ | 94,238 | $ | 10,644,021 | |||||||||||
% of loan balance: | |||||||||||||||||||||||
Commercial | 99.65 | % | * | * | — | % | 0.35 | % | 100.00 | % | |||||||||||||
Commercial real estate | 97.87 | % | 0.24 | % | 0.01 | % | — | % | 1.88 | % | 100.00 | % | |||||||||||
Construction | 100.00 | % | — | % | — | % | — | % | — | % | 100.00 | % | |||||||||||
Residential real estate | 96.79 | % | 0.20 | % | 0.09 | % | — | % | 2.92 | % | 100.00 | % | |||||||||||
Personal and home equity | 96.23 | % | 0.33 | % | 0.11 | % | — | % | 3.33 | % | 100.00 | % | |||||||||||
Total loans | 99.03 | % | 0.07 | % | 0.01 | % | — | % | 0.89 | % | 100.00 | % |
(1) | Refer to Glossary of Terms for definition. |
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | |||||||||||||||
Nonaccrual loans | |||||||||||||||||||
Commercial | $ | 24,779 | $ | 26,881 | $ | 47,782 | $ | 31,323 | $ | 41,913 | |||||||||
Commercial real estate | 46,953 | 62,954 | 45,759 | 63,643 | 68,554 | ||||||||||||||
Construction | — | — | — | 402 | 557 | ||||||||||||||
Residential real estate | 9,976 | 11,237 | 12,812 | 14,966 | 11,224 | ||||||||||||||
Personal and home equity | 12,530 | 12,214 | 15,406 | 18,323 | 16,532 | ||||||||||||||
Total | $ | 94,238 | $ | 113,286 | $ | 121,759 | $ | 128,657 | $ | 138,780 | |||||||||
Nonaccrual loans as a percent of total loan type: | |||||||||||||||||||
Commercial | 0.35 | % | 0.38 | % | 0.72 | % | 0.48 | % | 0.65 | % | |||||||||
Commercial real estate | 1.88 | % | 2.53 | % | 1.83 | % | 2.53 | % | 2.56 | % | |||||||||
Construction | — | % | — | % | — | % | 0.23 | % | 0.29 | % | |||||||||
Residential real estate | 2.92 | % | 3.24 | % | 3.69 | % | 4.06 | % | 3.00 | % | |||||||||
Personal and home equity | 3.33 | % | 3.50 | % | 4.14 | % | 4.84 | % | 4.10 | % | |||||||||
Total | 0.89 | % | 1.09 | % | 1.20 | % | 1.28 | % | 1.37 | % | |||||||||
Loans past due 60-89 days and still accruing: | |||||||||||||||||||
Commercial | $ | 153 | $ | 817 | $ | — | $ | 3,725 | $ | 1,365 | |||||||||
Commercial real estate | 161 | 1,475 | 2,887 | 2,365 | 5,278 | ||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Residential real estate | 296 | 209 | 129 | 485 | — | ||||||||||||||
Personal and home equity | 406 | 499 | — | 461 | 462 | ||||||||||||||
Total | $ | 1,016 | $ | 3,000 | $ | 3,016 | $ | 7,036 | $ | 7,105 | |||||||||
Loans past due 60-89 days and still accruing as a percent of total loan type: | |||||||||||||||||||
Commercial | * | 0.01 | % | — | % | 0.06 | % | 0.02 | % | ||||||||||
Commercial real estate | 0.01 | % | 0.06 | % | 0.12 | % | 0.09 | % | 0.20 | % | |||||||||
Construction | — | % | — | % | — | % | — | % | — | % | |||||||||
Residential real estate | 0.09 | % | 0.06 | % | 0.04 | % | 0.13 | % | — | % | |||||||||
Personal and home equity | 0.11 | % | 0.14 | % | — | % | 0.12 | % | 0.11 | % | |||||||||
Total | 0.01 | % | 0.03 | % | 0.03 | % | 0.07 | % | 0.07 | % | |||||||||
Loans past due 30-59 days and still accruing: | |||||||||||||||||||
Commercial | $ | 2 | $ | 642 | $ | 539 | $ | 5,647 | $ | 2,195 | |||||||||
Commercial real estate | 5,946 | 717 | 6,690 | 5,666 | 4,073 | ||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Residential real estate | 674 | — | 265 | 2,175 | 3,260 | ||||||||||||||
Personal and home equity | 1,232 | 2,243 | 256 | 647 | 1,837 | ||||||||||||||
Total | $ | 7,854 | $ | 3,602 | $ | 7,750 | $ | 14,135 | $ | 11,365 | |||||||||
Loans past due 30-59 days and still accruing as a percent of total loan type: | |||||||||||||||||||
Commercial | * | 0.01 | % | 0.01 | % | 0.09 | % | 0.03 | % | ||||||||||
Commercial real estate | 0.24 | % | 0.03 | % | 0.27 | % | 0.22 | % | 0.15 | % | |||||||||
Construction | — | % | — | % | — | % | — | % | — | % | |||||||||
Residential real estate | 0.20 | % | — | % | 0.08 | % | 0.59 | % | 0.87 | % | |||||||||
Personal and home equity | 0.33 | % | 0.64 | % | 0.07 | % | 0.17 | % | 0.46 | % | |||||||||
Total | 0.07 | % | 0.03 | % | 0.08 | % | 0.14 | % | 0.11 | % |
(1) | Refer to Glossary of Terms for definition. |
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Nonaccrual Loan Stratification | |||||||||||||||||||||||
$10.0 Million or More | $5.0 to $9.9 Million | $3.0 to $4.9 Million | $1.5 to $2.9 Million | Under $1.5 Million | Total | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Amount: | |||||||||||||||||||||||
Commercial | $ | — | $ | 9,393 | $ | 3,749 | $ | 5,150 | $ | 6,487 | $ | 24,779 | |||||||||||
Commercial real estate | — | 15,440 | 9,035 | 7,583 | 14,895 | 46,953 | |||||||||||||||||
Residential real estate | — | — | 3,438 | — | 6,538 | 9,976 | |||||||||||||||||
Personal and home equity | — | — | — | — | 12,530 | 12,530 | |||||||||||||||||
Total | $ | — | $ | 24,833 | $ | 16,222 | $ | 12,733 | $ | 40,450 | $ | 94,238 | |||||||||||
Number of borrowers: | |||||||||||||||||||||||
Commercial | — | 1 | 1 | 2 | 23 | 27 | |||||||||||||||||
Commercial real estate | — | 2 | 2 | 4 | 26 | 34 | |||||||||||||||||
Residential real estate | — | — | 1 | — | 30 | 31 | |||||||||||||||||
Personal and home equity | — | — | — | — | 46 | 46 | |||||||||||||||||
Total | — | 3 | 4 | 6 | 125 | 138 | |||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||
Amount: | |||||||||||||||||||||||
Commercial | $ | — | $ | 18,565 | $ | — | $ | 2,855 | $ | 5,461 | $ | 26,881 | |||||||||||
Commercial real estate | 24,590 | 5,788 | 8,935 | 6,674 | 16,967 | 62,954 | |||||||||||||||||
Residential real estate | — | — | 4,789 | — | 6,448 | 11,237 | |||||||||||||||||
Personal and home equity | — | — | — | — | 12,214 | 12,214 | |||||||||||||||||
Total | $ | 24,590 | $ | 24,353 | $ | 13,724 | $ | 9,529 | $ | 41,090 | $ | 113,286 | |||||||||||
Number of borrowers: | |||||||||||||||||||||||
Commercial | — | 2 | — | 1 | 26 | 29 | |||||||||||||||||
Commercial real estate | 2 | 1 | 2 | 3 | 32 | 40 | |||||||||||||||||
Residential real estate | — | — | 1 | — | 29 | 30 | |||||||||||||||||
Personal and home equity | — | — | — | — | 46 | 46 | |||||||||||||||||
Total | 2 | 3 | 3 | 4 | 133 | 145 |
(1) | Refer to Glossary of Terms for definition. |
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Restructured Loan Accruing Interest Stratification | |||||||||||||||||||||||
$10.0 Million or More | $5.0 to $9.9 Million | $3.0 to $4.9 Million | $1.5 to $2.9 Million | Under $1.5 Million | Total | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Amount: | |||||||||||||||||||||||
Commercial | $ | — | $ | 7,800 | $ | 7,134 | $ | 1,708 | $ | 392 | $ | 17,034 | |||||||||||
Commercial real estate | — | — | — | — | 1,551 | 1,551 | |||||||||||||||||
Personal and home equity | — | — | — | — | 1,591 | 1,591 | |||||||||||||||||
Total | $ | — | $ | 7,800 | $ | 7,134 | $ | 1,708 | $ | 3,534 | $ | 20,176 | |||||||||||
Number of borrowers: | |||||||||||||||||||||||
Commercial | — | 1 | 2 | 1 | 2 | 6 | |||||||||||||||||
Commercial real estate | — | — | — | — | 3 | 3 | |||||||||||||||||
Personal and home equity | — | — | — | — | 2 | 2 | |||||||||||||||||
Total | — | 1 | 2 | 1 | 7 | 11 | |||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||
Amount: | |||||||||||||||||||||||
Commercial | $ | 10,447 | $ | 13,830 | $ | 3,969 | $ | — | $ | 1,833 | $ | 30,079 | |||||||||||
Commercial real estate | — | — | — | — | 665 | 665 | |||||||||||||||||
Personal and home equity | — | — | — | — | 1,599 | 1,599 | |||||||||||||||||
Total | $ | 10,447 | $ | 13,830 | $ | 3,969 | $ | — | $ | 4,097 | $ | 32,343 | |||||||||||
Number of borrowers: | |||||||||||||||||||||||
Commercial | 1 | 2 | 1 | — | 3 | 7 | |||||||||||||||||
Commercial real estate | — | — | — | — | 2 | 2 | |||||||||||||||||
Personal and home equity | — | — | — | — | 2 | 2 | |||||||||||||||||
Total | 1 | 2 | 1 | — | 7 | 11 |
(1) | Refer to Glossary of Terms for definition. |
Foreclosed Real Estate (OREO), excluding covered assets (1) | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
OREO Properties by Type | ||||||||||||||||||||||||||||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||||||||||
Number of Properties | Amount | % of Total | Number of Properties | Amount | % of Total | Number of Properties | Amount | % of Total | ||||||||||||||||||||||||||
Single-family homes | 12 | $ | 3,405 | 12 | % | 14 | $ | 2,981 | 8 | % | 49 | $ | 6,238 | 8 | % | |||||||||||||||||||
Land parcels | 142 | 12,710 | 44 | % | 145 | 18,498 | 52 | % | 177 | 37,125 | 45 | % | ||||||||||||||||||||||
Multi-family | 1 | 175 | 1 | % | 1 | 201 | 1 | % | 4 | 7,458 | 9 | % | ||||||||||||||||||||||
Office/industrial | 20 | 11,301 | 40 | % | 22 | 13,009 | 37 | % | 39 | 28,038 | 34 | % | ||||||||||||||||||||||
Retail | 1 | 957 | 3 | % | 2 | 621 | 2 | % | 5 | 3,021 | 4 | % | ||||||||||||||||||||||
Total | 176 | $ | 28,548 | 100 | % | 184 | $ | 35,310 | 100 | % | 274 | $ | 81,880 | 100 | % | |||||||||||||||||||
OREO Property Type by Location | ||||||||||||||||||||||||||||||||||
Illinois | Iowa | Colorado | Wisconsin | South Eastern(2) | Mid Western(3) | Other | Total | |||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||||
Single-family homes | $ | 833 | — | $ | — | $ | 322 | $ | — | $ | 2,250 | $ | 3,405 | |||||||||||||||||||||
Land parcels | 10,048 | 184 | — | — | — | 2,478 | — | 12,710 | ||||||||||||||||||||||||||
Multi-family | 175 | — | — | — | — | — | — | 175 | ||||||||||||||||||||||||||
Office/industrial | 7,115 | 2,438 | — | 543 | 515 | 690 | — | 11,301 | ||||||||||||||||||||||||||
Retail | — | — | — | — | — | 957 | — | 957 | ||||||||||||||||||||||||||
Total | $ | 18,171 | $ | 2,622 | $ | — | $ | 865 | $ | 515 | $ | 6,375 | $ | — | $ | 28,548 | ||||||||||||||||||
% of Total | 64 | % | 9 | % | — | % | 3 | % | 2 | % | 22 | % | — | % | 100 | % | ||||||||||||||||||
September 30, 2013 | ||||||||||||||||||||||||||||||||||
Single-family homes | $ | 525 | — | $ | — | $ | 322 | $ | — | $ | 2,134 | $ | — | $ | 2,981 | |||||||||||||||||||
Land parcels | 14,789 | — | — | — | 1,030 | 2,679 | — | 18,498 | ||||||||||||||||||||||||||
Multi-family | 201 | — | — | — | — | — | — | 201 | ||||||||||||||||||||||||||
Office/industrial | 10,231 | — | — | 980 | 527 | 1,271 | — | 13,009 | ||||||||||||||||||||||||||
Retail | 552 | — | — | — | — | 69 | — | 621 | ||||||||||||||||||||||||||
Total | $ | 26,298 | $ | — | $ | — | $ | 1,302 | $ | 1,557 | $ | 6,153 | $ | — | $ | 35,310 | ||||||||||||||||||
% of Total | 75 | % | — | % | — | % | 4 | % | 4 | % | 17 | % | — | % | 100 | % | ||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||||||||||
Single-family homes | $ | 4,301 | — | $ | — | $ | — | $ | — | $ | 1,767 | $ | 170 | $ | 6,238 | |||||||||||||||||||
Land parcels | 22,722 | — | — | — | 10,446 | 3,957 | — | 37,125 | ||||||||||||||||||||||||||
Multi-family | 525 | — | 6,933 | — | — | — | — | 7,458 | ||||||||||||||||||||||||||
Office/industrial | 17,960 | — | — | 2,300 | 4,048 | 3,730 | — | 28,038 | ||||||||||||||||||||||||||
Retail | 2,428 | — | — | — | 593 | — | — | 3,021 | ||||||||||||||||||||||||||
Total | $ | 47,936 | $ | — | $ | 6,933 | $ | 2,300 | $ | 15,087 | $ | 9,454 | $ | 170 | $ | 81,880 | ||||||||||||||||||
% of Total | 59 | % | — | % | 8 | % | 3 | % | 18 | % | 12 | % | * | 100 | % |
(1) | Refer to Glossary of Terms for definition. |
(2) | Represents the southeastern states of Arkansas, Florida and Georgia. |
(3) | Represents the midwestern states of Kansas, Michigan, Missouri, Indiana, and Ohio. |
* | Less than 1%. |
Note: Certain reclassifications have been made to prior period amounts to conform with the current period presentation.
Allowance for Loan Losses (excluding covered assets (1)) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
4Q13 | 3Q13 | 2Q13 | 1Q13 | 4Q12 | |||||||||||||||
Change in allowance for loan losses: | |||||||||||||||||||
Balance at beginning of period | $ | 145,513 | $ | 148,183 | $ | 153,992 | $ | 161,417 | $ | 166,859 | |||||||||
Loans charged-off: | |||||||||||||||||||
Commercial | (1,536 | ) | (7,285 | ) | (2,372 | ) | (11,146 | ) | (10,388 | ) | |||||||||
Commercial real estate | (7,297 | ) | (1,706 | ) | (8,725 | ) | (7,566 | ) | (8,105 | ) | |||||||||
Construction | — | — | — | 70 | 30 | ||||||||||||||
Residential real estate | (1,887 | ) | (395 | ) | (783 | ) | (436 | ) | (621 | ) | |||||||||
Home equity | (591 | ) | (2,146 | ) | (334 | ) | (374 | ) | (1,640 | ) | |||||||||
Personal | (51 | ) | (893 | ) | (2,776 | ) | (5 | ) | (612 | ) | |||||||||
Total charge-offs | (11,362 | ) | (12,425 | ) | (14,990 | ) | (19,457 | ) | (21,336 | ) | |||||||||
Recoveries on loans previously charged-off: | |||||||||||||||||||
Commercial | 2,898 | 1,301 | 459 | 396 | 947 | ||||||||||||||
Commercial real estate | 302 | 366 | 141 | 1,364 | 2,133 | ||||||||||||||
Construction | 7 | 7 | 25 | 9 | 16 | ||||||||||||||
Residential real estate | 4 | 7 | 2 | 2 | 106 | ||||||||||||||
Home equity | 80 | 135 | 199 | 61 | 52 | ||||||||||||||
Personal | 757 | 142 | 46 | 52 | 43 | ||||||||||||||
Total recoveries | 4,048 | 1,958 | 872 | 1,884 | 3,297 | ||||||||||||||
Net charge-offs | (7,314 | ) | (10,467 | ) | (14,118 | ) | (17,573 | ) | (18,039 | ) | |||||||||
Provisions charged to operating expenses | 4,910 | 7,797 | 8,309 | 10,148 | 12,597 | ||||||||||||||
Balance at end of period | $ | 143,109 | $ | 145,513 | $ | 148,183 | $ | 153,992 | $ | 161,417 | |||||||||
Allocation of allowance for loan losses: | |||||||||||||||||||
General allocated reserve: | |||||||||||||||||||
Commercial | $ | 75,873 | $ | 74,734 | $ | 64,868 | $ | 57,280 | $ | 50,450 | |||||||||
Commercial real estate | 29,826 | 30,843 | 36,820 | 45,030 | 52,700 | ||||||||||||||
Construction | 3,338 | 3,314 | 2,626 | 2,011 | 2,317 | ||||||||||||||
Residential real estate | 5,143 | 4,254 | 4,945 | 5,800 | 5,700 | ||||||||||||||
Home equity | 3,262 | 2,952 | 3,070 | 3,700 | 4,000 | ||||||||||||||
Personal | 3,290 | 2,718 | 3,130 | 2,900 | 2,860 | ||||||||||||||
Total allocated | 120,732 | 118,815 | 115,459 | 116,721 | 118,027 | ||||||||||||||
Specific reserve | 22,377 | 26,698 | 32,724 | 37,271 | 43,390 | ||||||||||||||
Total | $ | 143,109 | $ | 145,513 | $ | 148,183 | $ | 153,992 | $ | 161,417 | |||||||||
Allocation of reserve by a percent of total allowance for loan losses: | |||||||||||||||||||
General allocated reserve: | |||||||||||||||||||
Commercial | 53 | % | 52 | % | 44 | % | 37 | % | 31 | % | |||||||||
Commercial real estate | 21 | % | 21 | % | 25 | % | 29 | % | 33 | % | |||||||||
Construction | 2 | % | 2 | % | 2 | % | 1 | % | 1 | % | |||||||||
Residential real estate | 4 | % | 3 | % | 3 | % | 4 | % | 4 | % | |||||||||
Home equity | 2 | % | 2 | % | 2 | % | 3 | % | 2 | % | |||||||||
Personal | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||
Total allocated | 84 | % | 82 | % | 78 | % | 76 | % | 73 | % | |||||||||
Specific reserve | 16 | % | 18 | % | 22 | % | 24 | % | 27 | % | |||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Allowance for loan losses to: | |||||||||||||||||||
Total loans | 1.34 | % | 1.40 | % | 1.47 | % | 1.53 | % | 1.59 | % | |||||||||
Nonperforming loans | 152 | % | 128 | % | 122 | % | 120 | % | 116 | % |
(1) | Refer to Glossary of Terms for definition. |
Deposits | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||
12/31/13 | % of Total | 9/30/13 | % of Total | 6/30/13 | % of Total | 3/31/13 | % of Total | 12/31/12 | % of Total | |||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||||||||||||||||||||
Noninterest-bearing deposits | $ | 3,172,676 | 26 | % | $ | 3,106,986 | 26 | % | $ | 2,736,868 | 24 | % | $ | 2,756,879 | 24 | % | $ | 3,690,340 | 30 | % | ||||||||||||||
Interest-bearing demand deposits | 1,470,856 | 12 | % | 1,183,471 | 10 | % | 1,234,134 | 11 | % | 1,390,955 | 12 | % | 1,057,390 | 9 | % | |||||||||||||||||||
Savings deposits | 284,482 | 2 | % | 260,822 | 2 | % | 245,133 | 2 | % | 245,762 | 2 | % | 310,188 | 3 | % | |||||||||||||||||||
Money market accounts | 4,515,079 | 38 | % | 4,517,235 | 38 | % | 4,409,797 | 39 | % | 4,496,102 | 40 | % | 4,602,632 | 38 | % | |||||||||||||||||||
Brokered time deposits: | ||||||||||||||||||||||||||||||||||
Traditional | 408,365 | 3 | % | 548,429 | 5 | % | 445,666 | 4 | % | 330,851 | 3 | % | 382,833 | 3 | % | |||||||||||||||||||
Client CDARS(1) | 711,412 | 7 | % | 755,167 | 7 | % | 695,130 | 6 | % | 652,774 | 6 | % | 610,622 | 5 | % | |||||||||||||||||||
Non-client CDARS(1) | — | — | % | — | — | % | 50,000 | 1 | % | — | — | % | — | — | % | |||||||||||||||||||
Total brokered time deposits | 1,119,777 | 10 | % | 1,303,596 | 12 | % | 1,190,796 | 11 | % | 983,625 | 9 | % | 993,455 | 8 | % | |||||||||||||||||||
Time deposits | 1,450,771 | 12 | % | 1,460,446 | 12 | % | 1,491,604 | 13 | % | 1,518,980 | 13 | % | 1,519,629 | 12 | % | |||||||||||||||||||
Total deposits | $ | 12,013,641 | 100 | % | $ | 11,832,556 | 100 | % | $ | 11,308,332 | 100 | % | $ | 11,392,303 | 100 | % | $ | 12,173,634 | 100 | % | ||||||||||||||
Client deposits(1) | $ | 11,605,276 | 97 | % | $ | 11,284,127 | 95 | % | $ | 10,812,666 | 95 | % | $ | 11,061,452 | 97 | % | $ | 11,790,801 | 97 | % |
(1) | Refer to Glossary of Terms for definition. |
Net Interest Margin | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Quarter Ended December 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Average Balance | Interest (1) | Yield / Rate | Average Balance | Interest (1) | Yield / Rate | ||||||||||||||||
Assets: | |||||||||||||||||||||
Federal funds sold and interest-bearing deposits in banks | $ | 352,247 | $ | 221 | 0.24 | % | $ | 709,369 | $ | 452 | 0.25 | % | |||||||||
Securities: | |||||||||||||||||||||
Taxable | 2,234,704 | 13,038 | 2.33 | % | 2,055,358 | 12,938 | 2.52 | % | |||||||||||||
Tax-exempt (2) | 267,966 | 2,444 | 3.65 | % | 205,525 | 2,227 | 4.33 | % | |||||||||||||
Total securities | 2,502,670 | 15,482 | 2.47 | % | 2,260,883 | 15,165 | 2.68 | % | |||||||||||||
FHLB stock | 30,269 | 34 | 0.43 | % | 43,387 | 168 | 1.51 | % | |||||||||||||
Loans, excluding covered assets: | |||||||||||||||||||||
Commercial | 7,023,617 | 78,550 | 4.38 | % | 6,266,388 | 71,128 | 4.44 | % | |||||||||||||
Commercial real estate | 2,468,364 | 22,738 | 3.60 | % | 2,684,361 | 26,586 | 3.88 | % | |||||||||||||
Construction | 263,992 | 2,691 | 3.99 | % | 185,804 | 1,803 | 3.80 | % | |||||||||||||
Residential | 357,996 | 3,324 | 3.71 | % | 401,581 | 4,037 | 4.02 | % | |||||||||||||
Personal and home equity | 358,003 | 2,871 | 3.18 | % | 389,235 | 3,300 | 3.37 | % | |||||||||||||
Total loans, excluding covered assets (3) | 10,471,972 | 110,174 | 4.12 | % | 9,927,369 | 106,854 | 4.22 | % | |||||||||||||
Covered assets (4) | 115,474 | 549 | 1.87 | % | 174,679 | 1,318 | 2.97 | % | |||||||||||||
Total interest-earning assets (2) | 13,472,632 | $ | 126,460 | 3.69 | % | 13,115,687 | $ | 123,957 | 3.71 | % | |||||||||||
Cash and due from banks | 151,792 | 146,990 | |||||||||||||||||||
Allowance for loan and covered loan losses | (168,901 | ) | (190,583 | ) | |||||||||||||||||
Other assets | 500,949 | 676,682 | |||||||||||||||||||
Total assets | $ | 13,956,472 | $ | 13,748,776 | |||||||||||||||||
Liabilities and Equity: | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,291,824 | $ | 1,021 | 0.31 | % | $ | 970,026 | $ | 985 | 0.40 | % | |||||||||
Savings deposits | 275,656 | 200 | 0.29 | % | 282,493 | 200 | 0.28 | % | |||||||||||||
Money market accounts | 4,643,505 | 3,969 | 0.34 | % | 4,382,023 | 4,331 | 0.39 | % | |||||||||||||
Time deposits | 1,473,248 | 3,805 | 1.02 | % | 1,507,824 | 4,139 | 1.09 | % | |||||||||||||
Brokered time deposits | 1,192,264 | 1,257 | 0.42 | % | 1,102,772 | 1,422 | 0.51 | % | |||||||||||||
Total interest-bearing deposits | 8,876,497 | 10,252 | 0.46 | % | 8,245,138 | 11,077 | 0.53 | % | |||||||||||||
Short-term and secured borrowings | 11,063 | 161 | 5.67 | % | 20,441 | 77 | 1.49 | % | |||||||||||||
Long-term debt | 412,467 | 6,751 | 6.53 | % | 476,695 | 7,235 | 6.00 | % | |||||||||||||
Total interest-bearing liabilities | 9,300,027 | $ | 17,164 | 0.73 | % | 8,742,274 | $ | 18,389 | 0.83 | % | |||||||||||
Noninterest-bearing demand deposits | 3,207,659 | 3,567,785 | |||||||||||||||||||
Other liabilities | 147,893 | 177,842 | |||||||||||||||||||
Equity | 1,300,893 | 1,260,875 | |||||||||||||||||||
Total liabilities and equity | $ | 13,956,472 | $ | 13,748,776 | |||||||||||||||||
Net interest spread (2)(5) | �� | 2.96 | % | 2.88 | % | ||||||||||||||||
Contribution of noninterest-bearing sources of funds | 0.22 | % | 0.28 | % | |||||||||||||||||
Net interest income/margin (2)(5) | 109,296 | 3.18 | % | 105,568 | 3.16 | % | |||||||||||||||
Less: tax-equivalent adjustment | 840 | 765 | |||||||||||||||||||
Net interest income, as reported | $ | 108,456 | $ | 104,803 |
(1) | Interest income included $7.1 million and $6.3 million in loan fees for the quarters ended December 31, 2013 and 2012, respectively. |
(2) | Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. This is a non-U.S. GAAP measure. |
(3) | Average loans on a nonaccrual basis for the recognition of interest income totaled $108.1 million and $164.8 million for the quarters ended December 31, 2013 and 2012, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $1.1 million and $1.7 million for the quarters ended December 31, 2013 and 2012, respectively, based on the average loan portfolio yield for the corresponding period. |
(4) | Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. |
(5) | Refer to Glossary of Terms for definition. |
Note: Prior period net interest margin computations were modified to conform with the current period presentation.
Net Interest Margin | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Quarter Ended December 31, | Quarter Ended September 30, | ||||||||||||||||||||
2013 | 2013 | ||||||||||||||||||||
Average Balance | Interest (1) | Yield / Rate | Average Balance | Interest (1) | Yield / Rate | ||||||||||||||||
Assets: | |||||||||||||||||||||
Federal funds sold and interest-bearing deposits in banks | $ | 352,247 | $ | 221 | 0.24 | % | $ | 178,213 | $ | 111 | 0.24 | % | |||||||||
Securities: | |||||||||||||||||||||
Taxable | 2,234,704 | 13,038 | 2.33 | % | 2,264,991 | 12,931 | 2.28 | % | |||||||||||||
Tax-exempt (2) | 267,966 | 2,444 | 3.65 | % | 254,662 | 2,380 | 3.74 | % | |||||||||||||
Total securities | 2,502,670 | 15,482 | 2.47 | % | 2,519,653 | 15,311 | 2.43 | % | |||||||||||||
FHLB stock | 30,269 | 34 | 0.43 | % | 34,063 | 61 | 0.71 | % | |||||||||||||
Loans, excluding covered assets: | |||||||||||||||||||||
Commercial | 7,023,617 | 78,550 | 4.38 | % | 6,834,597 | 75,429 | 4.32 | % | |||||||||||||
Commercial real estate | 2,468,364 | 22,738 | 3.60 | % | 2,503,758 | 23,467 | 3.67 | % | |||||||||||||
Construction | 263,992 | 2,691 | 3.99 | % | 224,671 | 2,304 | 4.01 | % | |||||||||||||
Residential | 357,996 | 3,324 | 3.71 | % | 362,708 | 3,473 | 3.83 | % | |||||||||||||
Personal and home equity | 358,003 | 2,871 | 3.18 | % | 362,293 | 2,938 | 3.22 | % | |||||||||||||
Total loans, excluding covered assets (3) | 10,471,972 | 110,174 | 4.12 | % | 10,288,027 | 107,611 | 4.10 | % | |||||||||||||
Covered assets (4) | 115,474 | 549 | 1.87 | % | 134,601 | 1,301 | 3.80 | % | |||||||||||||
Total interest-earning assets (2) | 13,472,632 | $ | 126,460 | 3.69 | % | 13,154,557 | $ | 124,395 | 3.71 | % | |||||||||||
Cash and due from banks | 151,792 | 149,953 | |||||||||||||||||||
Allowance for loan and covered loan losses | (168,901 | ) | (177,274 | ) | |||||||||||||||||
Other assets | 500,949 | 525,426 | |||||||||||||||||||
Total assets | $ | 13,956,472 | $ | 13,652,662 | |||||||||||||||||
Liabilities and Equity: | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,291,824 | $ | 1,021 | 0.31 | % | $ | 1,360,664 | $ | 1,032 | 0.30 | % | |||||||||
Savings deposits | 275,656 | 200 | 0.29 | % | 251,299 | 148 | 0.23 | % | |||||||||||||
Money market accounts | 4,643,505 | 3,969 | 0.34 | % | 4,369,938 | 3,747 | 0.34 | % | |||||||||||||
Time deposits | 1,473,248 | 3,805 | 1.02 | % | 1,491,652 | 3,814 | 1.01 | % | |||||||||||||
Brokered time deposits | 1,192,264 | 1,257 | 0.42 | % | 1,255,850 | 1,200 | 0.38 | % | |||||||||||||
Total interest-bearing deposits | 8,876,497 | 10,252 | 0.46 | % | 8,729,403 | 9,941 | 0.45 | % | |||||||||||||
Short-term and secured borrowings | 11,063 | 161 | 5.67 | % | 118,995 | 161 | 0.53 | % | |||||||||||||
Long-term debt | 412,467 | 6,751 | 6.53 | % | 499,793 | 7,640 | 6.08 | % | |||||||||||||
Total interest-bearing liabilities | 9,300,027 | $ | 17,164 | 0.73 | % | 9,348,191 | $ | 17,742 | 0.75 | % | |||||||||||
Noninterest-bearing demand deposits | 3,207,659 | 2,899,125 | |||||||||||||||||||
Other liabilities | 147,893 | 147,805 | |||||||||||||||||||
Equity | 1,300,893 | 1,257,541 | |||||||||||||||||||
Total liabilities and equity | $ | 13,956,472 | $ | 13,652,662 | |||||||||||||||||
Net interest spread (2)(5) | 2.96 | % | 2.96 | % | |||||||||||||||||
Contribution of noninterest-bearing sources of funds | 0.22 | % | 0.22 | % | |||||||||||||||||
Net interest income/margin (2)(5) | 109,296 | 3.18 | % | 106,653 | 3.18 | % | |||||||||||||||
Less: tax-equivalent adjustment | 840 | 818 | |||||||||||||||||||
Net interest income, as reported | $ | 108,456 | $ | 105,835 |
(1) | Interest income included $7.1 million and $5.9 million in loan fees for the quarters ended December 31, 2013 and September 30, 2013, respectively. |
(2) | Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. This is a non-U.S. GAAP measure. |
(3) | Average loans on a nonaccrual basis for the recognition of interest income totaled $108.1 million and $118.8 million for the quarters ended December 31, 2013 and September 30, 2013, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $1.1 million and $1.2 million for the quarters ended December 31, 2013 and September 30, 2013, respectively, based on the average loan portfolio yield for the corresponding period. |
(4) | Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. |
(5) | Refer to Glossary of Terms for definition. |
Net Interest Margin | |||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Average Balance | Interest (1) | Yield / Rate | Average Balance | Interest (1) | Yield / Rate | ||||||||||||||||
Assets: | |||||||||||||||||||||
Federal funds sold and interest-bearing deposits in banks | $ | 261,865 | $ | 652 | 0.25 | % | $ | 377,827 | $ | 965 | 0.26 | % | |||||||||
Securities: | |||||||||||||||||||||
Taxable | 2,189,426 | 51,310 | 2.34 | % | 2,064,893 | 56,826 | 2.75 | % | |||||||||||||
Tax-exempt (2) | 245,905 | 9,447 | 3.84 | % | 179,594 | 8,360 | 4.65 | % | |||||||||||||
Total securities | 2,435,331 | 60,757 | 2.49 | % | 2,244,487 | 65,186 | 2.90 | % | |||||||||||||
FHLB stock | 34,161 | 247 | 0.72 | % | 42,742 | 547 | 1.28 | % | |||||||||||||
Loans, excluding covered assets: | |||||||||||||||||||||
Commercial | 6,756,863 | 299,386 | 4.43 | % | 5,843,047 | 269,284 | 4.61 | % | |||||||||||||
Commercial real estate | 2,530,863 | 95,517 | 3.77 | % | 2,676,709 | 109,812 | 4.10 | % | |||||||||||||
Construction | 218,246 | 8,999 | 4.12 | % | 202,825 | 7,609 | 3.75 | % | |||||||||||||
Residential | 380,676 | 14,193 | 3.73 | % | 360,904 | 15,025 | 4.16 | % | |||||||||||||
Personal and home equity | 371,567 | 12,045 | 3.24 | % | 402,904 | 14,181 | 3.52 | % | |||||||||||||
Total loans, excluding covered assets (3) | 10,258,215 | 430,140 | 4.19 | % | 9,486,389 | 415,911 | 4.38 | % | |||||||||||||
Covered assets (4) | 139,898 | 3,689 | 2.64 | % | 218,500 | 7,300 | 3.34 | % | |||||||||||||
Total interest-earning assets (2) | 13,129,470 | $ | 495,485 | 3.77 | % | 12,369,945 | $ | 489,909 | 3.96 | % | |||||||||||
Cash and due from banks | 147,185 | 145,200 | |||||||||||||||||||
Allowance for loan and covered loan losses | (179,016 | ) | (208,577 | ) | |||||||||||||||||
Other assets | 562,321 | 699,159 | |||||||||||||||||||
Total assets | $ | 13,659,960 | $ | 13,005,727 | |||||||||||||||||
Liabilities and Equity: | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,292,146 | $ | 4,202 | 0.33 | % | $ | 829,686 | $ | 3,378 | 0.41 | % | |||||||||
Savings deposits | 262,022 | 639 | 0.24 | % | 238,171 | 680 | 0.29 | % | |||||||||||||
Money market accounts | 4,490,908 | 15,711 | 0.35 | % | 4,129,620 | 16,924 | 0.41 | % | |||||||||||||
Time deposits | 1,496,146 | 15,328 | 1.02 | % | 1,413,462 | 16,041 | 1.13 | % | |||||||||||||
Brokered time deposits | 1,151,155 | 4,833 | 0.42 | % | 1,176,131 | 5,791 | 0.49 | % | |||||||||||||
Total interest-bearing deposits | 8,692,377 | 40,713 | 0.47 | % | 7,787,070 | 42,814 | 0.55 | % | |||||||||||||
Short-term and secured borrowings | 98,844 | 850 | 0.86 | % | 142,720 | 443 | 0.31 | % | |||||||||||||
Long-term debt | 477,782 | 29,612 | 6.20 | % | 402,812 | 23,846 | 5.92 | % | |||||||||||||
Total interest-bearing liabilities | 9,269,003 | $ | 71,175 | 0.77 | % | 8,332,602 | $ | 67,103 | 0.81 | % | |||||||||||
Noninterest-bearing demand deposits | 2,982,471 | 3,186,562 | |||||||||||||||||||
Other liabilities | 149,237 | 170,442 | |||||||||||||||||||
Equity | 1,259,249 | 1,316,121 | |||||||||||||||||||
Total liabilities and equity | $ | 13,659,960 | $ | 13,005,727 | |||||||||||||||||
Net interest spread (2)(5) | 3.00 | % | 3.15 | % | |||||||||||||||||
Contribution of noninterest-bearing sources of funds | 0.23 | % | 0.27 | % | |||||||||||||||||
Net interest income/margin (2)(5) | 424,310 | 3.23 | % | 422,806 | 3.42 | % | |||||||||||||||
Less: tax-equivalent adjustment | 3,247 | 2,873 | |||||||||||||||||||
Net interest income, as reported | $ | 421,063 | $ | 419,933 |
(1) | Interest income included $24.4 million and $26.3 million in loan fees for the year ended December 31, 2013 and 2012, respectively. |
(2) | Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. This is a non-U.S. GAAP measure. |
(3) | Average loans on a nonaccrual basis for the recognition of interest income totaled $122.6 million and $212.2 million for the year ended December 31, 2013 and 2012, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $4.8 million and $8.9 million for the year ended December 31, 2013 and 2012, respectively, based on the average loan portfolio yield for the corresponding period. |
(4) | Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. |
(5) | Refer to Glossary of Terms for definition. |
Note: Prior period net interest margin computations were modified to conform with the current period presentation.
NON-U.S. GAAP FINANCIAL MEASURES
This press release contains both U.S. GAAP and non-U.S. GAAP based financial measures. These non-U.S. GAAP financial measures include net interest income, net interest margin, net revenue, operating profit, and efficiency ratio all on a fully taxable-equivalent basis, return on average tangible common equity, Tier 1 common equity to risk-weighted assets, tangible equity to tangible assets, tangible equity to risk-weighted assets, tangible common equity to tangible assets, and tangible book value. We believe that presenting these non-U.S. GAAP financial measures will provide information useful to investors in understanding our underlying operational performance, our business, and performance trends and facilitates comparisons with the performance of others in the banking industry.
We use net interest income on a taxable-equivalent basis in calculating various performance measures by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments assuming a 35% tax rate. Management believes this measure to be the preferred industry measurement of net interest income as it enhances comparability to net interest income arising from taxable and tax-exempt sources, and accordingly believes that providing this measure may be useful for peer comparison purposes.
In addition to capital ratios defined by banking regulators, we also consider various measures when evaluating capital utilization and adequacy, including return on average tangible common equity, Tier 1 common equity to risk-weighted assets, tangible equity to tangible assets, tangible equity to risk-weighted assets, tangible common equity to tangible assets, and tangible book value. These calculations are intended to complement the capital ratios defined by banking regulators for both absolute and comparative purposes. All of these measures exclude the ending balances of goodwill and other intangibles while certain of these ratios exclude preferred capital components. Because U.S. GAAP does not include capital ratio measures, we believe there are no comparable U.S. GAAP financial measures to these ratios. We believe these non-U.S. GAAP financial measures are relevant because they provide information that is helpful in assessing the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of our capitalization to other companies. However, because there are no standardized definitions for these ratios, our calculations may not be comparable with other companies, and this may affect the usefulness of these measures to investors. Calculations of the Tier 1 common equity to risk-weighted assets ratio contained herein exclude the effect of the final Basel III capital rules adopted and issued by the Federal Reserve Board in July 2013, which are effective January 1, 2014 with compliance required January 1, 2015.
Non-U.S. GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-U.S. GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation or as a substitute for analyses of results as reported under U.S. GAAP. As a result, we encourage readers to consider our Consolidated Financial Statements in their entirety and not to rely on any single financial measure.
Non-U.S. GAAP Financial Measures (continued)
(Amounts in thousands)
(Unaudited)
The following table reconciles non-U.S. GAAP financial measures to U.S. GAAP.
Quarters Ended | |||||||||||||||||||
2013 | 2012 | ||||||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||||
Taxable-equivalent net interest income | |||||||||||||||||||
U.S. GAAP net interest income | $ | 108,456 | $ | 105,835 | $ | 103,732 | $ | 103,040 | $ | 104,803 | |||||||||
Taxable-equivalent adjustment | 840 | 818 | 805 | 784 | 765 | ||||||||||||||
Taxable-equivalent net interest income (a) | $ | 109,296 | $ | 106,653 | $ | 104,537 | $ | 103,824 | $ | 105,568 | |||||||||
Average Earning Assets (b) | $ | 13,472,632 | $ | 13,154,557 | $ | 12,858,942 | $ | 13,026,571 | $ | 13,115,687 | |||||||||
Net Interest Margin ((a) annualized) / (b) | 3.18 | % | 3.18 | % | 3.22 | % | 3.19 | % | 3.16 | % | |||||||||
Net Revenue | |||||||||||||||||||
Taxable-equivalent net interest income (a) | $ | 109,296 | $ | 106,653 | $ | 104,537 | $ | 103,824 | $ | 105,568 | |||||||||
U.S. GAAP non-interest income | 26,740 | 27,773 | 29,009 | 30,468 | 29,454 | ||||||||||||||
Net revenue (c) | $ | 136,036 | $ | 134,426 | $ | 133,546 | $ | 134,292 | $ | 135,022 | |||||||||
Operating Profit | |||||||||||||||||||
U.S. GAAP income before income taxes | $ | 54,893 | $ | 54,219 | $ | 46,643 | $ | 44,188 | $ | 39,765 | |||||||||
Provision for loan and covered loan losses | 4,476 | 8,120 | 8,843 | 10,357 | 13,177 | ||||||||||||||
Taxable-equivalent adjustment | 840 | 818 | 805 | 784 | 765 | ||||||||||||||
Operating profit | $ | 60,209 | $ | 63,157 | $ | 56,291 | $ | 55,329 | $ | 53,707 | |||||||||
Efficiency Ratio | |||||||||||||||||||
U.S. GAAP non-interest expense (d) | $ | 75,827 | $ | 71,269 | $ | 77,255 | $ | 78,963 | $ | 81,315 | |||||||||
Net revenue | $ | 136,036 | $ | 134,426 | $ | 133,546 | $ | 134,292 | $ | 135,022 | |||||||||
Efficiency ratio (d) / (c) | 55.74 | % | 53.02 | % | 57.85 | % | 58.80 | % | 60.22 | % | |||||||||
Adjusted Net Income | |||||||||||||||||||
U.S. GAAP net income available to common stockholders | $ | 33,706 | $ | 33,058 | $ | 28,915 | $ | 27,270 | $ | 20,040 | |||||||||
Amortization of intangibles, net of tax | 471 | 472 | 473 | 473 | 411 | ||||||||||||||
Adjusted net income (e) | $ | 34,177 | $ | 33,530 | $ | 29,388 | $ | 27,743 | $ | 20,451 | |||||||||
Average Tangible Common Equity | |||||||||||||||||||
U.S. GAAP average total equity | $ | 1,300,893 | $ | 1,257,541 | $ | 1,250,141 | $ | 1,227,628 | $ | 1,260,875 | |||||||||
Less: average goodwill | 94,477 | 94,494 | 94,506 | 94,519 | 94,531 | ||||||||||||||
Less: average other intangibles | 10,074 | 10,865 | 11,644 | 12,426 | 13,152 | ||||||||||||||
Less: average preferred stock | — | — | — | — | 60,409 | ||||||||||||||
Average tangible common equity (f) | $ | 1,196,342 | $ | 1,152,182 | $ | 1,143,991 | $ | 1,120,683 | $ | 1,092,783 | |||||||||
Return on average tangible common equity ((e) annualized) / (f) | 11.33 | % | 11.55 | % | 10.30 | % | 10.04 | % | 7.45 | % |
Non-U.S. GAAP Financial Measures (continued)
(Amounts in thousands)
(Unaudited)
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Taxable-equivalent net interest income | |||||||
U.S. GAAP net interest income | $ | 421,063 | $ | 419,933 | |||
Taxable-equivalent adjustment | 3,247 | 2,873 | |||||
Taxable-equivalent net interest income (a) | $ | 424,310 | $ | 422,806 | |||
Average Earning Assets (b) | $ | 13,129,470 | $ | 12,369,945 | |||
Net Interest Margin (a) / (b) | 3.23 | % | 3.42 | % | |||
Net Revenue | |||||||
Taxable-equivalent net interest income (a) | $ | 424,310 | $ | 422,806 | |||
U.S. GAAP non-interest income | 113,990 | 111,041 | |||||
Net revenue (c) | $ | 538,300 | $ | 533,847 | |||
Operating Profit | |||||||
U.S. GAAP income before income taxes | $ | 199,943 | $ | 132,417 | |||
Provision for loan and covered loan losses | 31,796 | 71,425 | |||||
Taxable-equivalent adjustment | 3,247 | 2,873 | |||||
Operating profit | $ | 234,986 | $ | 206,715 | |||
Efficiency Ratio | |||||||
U.S. GAAP non-interest expense (d) | $ | 303,314 | $ | 327,132 | |||
Net revenue (c) | $ | 538,300 | $ | 533,847 | |||
Efficiency ratio (d) / (c) | 56.35 | % | 61.28 | % | |||
Adjusted Net Income | |||||||
U.S. GAAP net income available to common stockholders | $ | 122,949 | $ | 64,528 | |||
Amortization of intangibles, net of tax | 1,889 | 1,626 | |||||
Adjusted net income (e) | $ | 124,838 | $ | 66,154 | |||
Average Tangible Common Equity | |||||||
U.S. GAAP average total equity | $ | 1,259,249 | $ | 1,316,121 | |||
Less: average goodwill | 94,499 | 94,550 | |||||
Less: average other intangibles | 11,245 | 14,077 | |||||
Less: average preferred stock | — | 195,602 | |||||
Average tangible common equity (f) | $ | 1,153,505 | $ | 1,011,892 | |||
Return on average tangible common equity (e) / (f) | 10.82 | % | 6.54 | % |
Non-U.S. GAAP Financial Measures (continued)
(Amounts in thousands)
(Unaudited)
2013 | 2012 | ||||||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||||
Tier 1 Common Capital | |||||||||||||||||||
U.S. GAAP total equity | $ | 1,301,904 | $ | 1,273,688 | $ | 1,233,040 | $ | 1,232,065 | $ | 1,207,166 | |||||||||
Trust preferred securities | 244,793 | 244,793 | 244,793 | 244,793 | 244,793 | ||||||||||||||
Less: accumulated other comprehensive income, net of tax | 9,844 | 18,323 | 14,180 | 44,285 | 48,064 | ||||||||||||||
Less: goodwill | 94,041 | 94,484 | 94,496 | 94,509 | 94,521 | ||||||||||||||
Less: other intangibles | 8,892 | 10,486 | 11,266 | 12,047 | 12,828 | ||||||||||||||
Tier 1 risk-based capital | 1,433,920 | 1,395,188 | 1,357,891 | 1,326,017 | 1,296,546 | ||||||||||||||
Less: preferred stock | — | — | — | — | — | ||||||||||||||
Less: trust preferred securities | 244,793 | 244,793 | 244,793 | 244,793 | 244,793 | ||||||||||||||
Tier 1 common capital (e) | $ | 1,189,127 | $ | 1,150,395 | $ | 1,113,098 | $ | 1,081,224 | $ | 1,051,753 | |||||||||
Tangible Common Equity | |||||||||||||||||||
U.S. GAAP total equity | $ | 1,301,904 | $ | 1,273,688 | $ | 1,233,040 | $ | 1,232,065 | $ | 1,207,166 | |||||||||
Less: goodwill | 94,041 | 94,484 | 94,496 | 94,509 | 94,521 | ||||||||||||||
Less: other intangibles | 8,892 | 10,486 | 11,266 | 12,047 | 12,828 | ||||||||||||||
Tangible equity (f) | 1,198,971 | 1,168,718 | 1,127,278 | 1,125,509 | 1,099,817 | ||||||||||||||
Less: preferred stock | — | — | — | — | — | ||||||||||||||
Tangible common equity (g) | $ | 1,198,971 | $ | 1,168,718 | $ | 1,127,278 | $ | 1,125,509 | $ | 1,099,817 | |||||||||
Tangible Assets | |||||||||||||||||||
U.S. GAAP total assets | $ | 14,085,746 | $ | 13,869,140 | $ | 13,476,493 | $ | 13,372,230 | $ | 14,057,515 | |||||||||
Less: goodwill | 94,041 | 94,484 | 94,496 | 94,509 | 94,521 | ||||||||||||||
Less: other intangibles | 8,892 | 10,486 | 11,266 | 12,047 | 12,828 | ||||||||||||||
Tangible assets (h) | $ | 13,982,813 | $ | 13,764,170 | $ | 13,370,731 | $ | 13,265,674 | $ | 13,950,166 | |||||||||
Risk-weighted Assets (i) | $ | 12,938,576 | $ | 12,630,779 | $ | 12,294,375 | $ | 12,164,677 | $ | 12,337,398 | |||||||||
Period-end Common Shares Outstanding (j) | 77,708 | 77,680 | 77,630 | 77,649 | 77,115 | ||||||||||||||
Ratios: | |||||||||||||||||||
Tier 1 common equity to risk-weighted assets (e) / (i) | 9.19 | % | 9.11 | % | 9.05 | % | 8.89 | % | 8.52 | % | |||||||||
Tangible equity to tangible assets (f) / (h) | 8.57 | % | 8.49 | % | 8.43 | % | 8.48 | % | 7.88 | % | |||||||||
Tangible equity to risk-weighted assets (f) / (i) | 9.27 | % | 9.25 | % | 9.17 | % | 9.25 | % | 8.91 | % | |||||||||
Tangible common equity to tangible assets (g) / (h) | 8.57 | % | 8.49 | % | 8.43 | % | 8.48 | % | 7.88 | % | |||||||||
Tangible book value (g) / (j) | $ | 15.43 | $ | 15.05 | $ | 14.52 | $ | 14.49 | $ | 14.26 |
Glossary of Terms
Assets under management and administration (“AUMA”) - Assets held in trust where we serve as trustee or in accounts where we make investment decisions on behalf of clients. AUMA also includes non-managed assets we hold in custody for clients or for which we receive fees for advisory or brokerage services. We do not include these assets on our Consolidated Balance Sheets.
Book value - Total common equity divided by outstanding shares of common stock at end of period.
CDARS® deposit program - A deposit services arrangement that effectively achieves FDIC deposit insurance for jumbo deposit relationships. These deposits are classified as brokered time deposits for regulatory deposit purposes; however, we classify certain of these deposits as client CDARS® due to the source being our client relationships and are, therefore, not traditional ‘brokered’ time deposits. We also participate in a non-client CDARS® program that is more like a traditional brokered time deposit program.
Client deposits - Total deposits, net of traditional brokered time deposits and non-client CDARS®.
Common equity - Total equity less preferred stock.
Covered assets - Assets acquired through an FDIC-assisted transaction that are subject to a loss share agreement and are presented separately on the Consolidated Balance Sheets.
Credit quality indicators - We have adopted an internal risk rating policy in which each loan is rated for credit quality with a numerical rating of 1 through 8. Loans rated 5 and better (1-5 ratings, inclusive) are credits that exhibit acceptable financial performance, cash flow, and leverage. We attempt to mitigate risk by loan structure, collateral, monitoring, and other credit risk management controls. Credits rated 6 are performing in accordance with contractual terms but are considered "special mention" as these credits demonstrate potential weakness that if left unresolved, may result in deterioration in the Company’s credit position and/or the repayment prospects for the credit. Borrowers rated special mention may exhibit adverse operating trends, high leverage, tight liquidity or other credit concerns. Loans rated 7 may be classified as either accruing ("potential problem") or nonaccrual ("nonperforming"). Potential problem loans, like special mention, are loans that are performing in accordance with contractual terms, but for which management has some level of concern (greater than that of special mention loans) about the ability of the borrowers to meet existing repayment terms in future periods. These loans continue to accrue interest but the ultimate collection of these loans in full is questionable due to the same conditions that characterize a 6-rated credit. These credits may also have somewhat increased risk profiles as a result of the current net worth and/or paying capacity of the obligor or guarantors or the value of the collateral pledged. These loans generally have a well-defined weakness that may jeopardize collection of the debt and are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not resolved. Although these loans are generally identified as potential problem loans and require additional attention by management, they may never become nonperforming. Nonperforming loans include nonaccrual loans risk rated 7 or 8 and have all the weaknesses inherent in a 7-rated potential problem loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently-existing facts, conditions and values, highly questionable and improbable. Special mention, potential problem and nonperforming loans are reviewed at a minimum on a quarterly basis, while all other rated credits over a certain dollar threshold, depending on loan type, are reviewed annually or more frequently as the situation warrants.
Credit valuation adjustment ("CVA") - An adjustment may need to be incorporated into the valuation of derivative instruments for nonperformance risk to include the counterparty’s credit risk and the Company’s own credit risk. This adjustment is referred to as the CVA. The CVA represents the credit component of fair value with regard to both client-based trades and the related matched trades with interbank dealer counterparties.
Efficiency ratio - Total non-interest expense divided by the sum of net interest income on a tax-equivalent basis and non-interest income. This is a non-U.S. GAAP financial measure.
Fee revenue as percent of total revenue ratio - Total non-interest income less net securities gains (losses) divided by the sum of net interest income and non-interest income less net securities gains (losses).
U.S. GAAP - Accounting principles generally accepted in the United States of America.
Net interest margin - Expressed as a percentage, net interest margin is a ratio computed as annualized taxable-equivalent net interest income divided by average interest-earning assets. The annualization of net interest income for the quarterly yield takes into consideration the interest payment convention at the product level. This is a non-U.S. GAAP financial measure.
Glossary of Terms (continued)
Net interest spread - The difference between the average yield earned on interest-earning assets on a taxable-equivalent basis and the average rate paid for interest-bearing liabilities.
Net overhead ratio - Total non-interest expense less non-interest income divided by average total assets.
Net revenue - The sum of taxable equivalent net interest income and non-interest income. This is a non-U.S. GAAP financial measure.
Non-U.S. GAAP - Certain financial measures within this document that are not formally defined by U.S. GAAP or codified in the federal banking regulations. A reconciliation of these non-U.S. GAAP financial measures may be found on the previous pages.
Operating profit - The sum of U.S. GAAP income before income taxes, provision for loan and covered loan losses and taxable-equivalent adjustment. This is a non-U.S. GAAP financial measure.
Return on average tangible common equity - Annualized net income available to common stockholders, adjusted for tax-affected amortization of intangibles, divided by average tangible common equity. Average tangible common equity equals average total equity less average goodwill, average intangible assets, and average preferred stock. This is a non-U.S. GAAP financial measure.
Risk-weighted assets - Computed by the assignment of specific risk-weights (as currently defined by the Board of Governors of the Federal Reserve System without giving effect to the final Basel III capital rules adopted and issued by the Federal Reserve Board in July 2013, which are effective January 1, 2014 with compliance required January 1, 2015) to assets and off-balance sheet instruments.
Tangible book value - Total common equity less goodwill and other intangibles divided by outstanding shares of common stock at end of period. This is a non-U.S. GAAP financial measure.
Tangible common equity to tangible assets ratio - Tangible common equity divided by tangible assets, where tangible common equity equals total equity less preferred stock, goodwill and other intangible assets and tangible assets equals total assets less goodwill and other intangible assets. This is a non-U.S. GAAP financial measure.
Taxable-equivalent net interest income - The interest income earned on certain assets is completely or partially exempt from Federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on other taxable investments. This adjustment is not permitted under U.S. GAAP on the Consolidated Income Statement.
Tier 1 common capital - Tier 1 risk-based capital, less preferred equity, less trust preferred capital securities, and less noncontrolling interests, as calculated under currently effective requirements and without giving effect to the final Basel III capital rules recently adopted and issued by the Federal Reserve Board in July 2013.
Tier 1 equity to risk-weighted assets ratio - Tier 1 common capital divided by period-end risk-weighted assets. This is a non-U.S. GAAP financial measure and for purposes of our presentation we calculate risk-weighted assets under currently effective requirements and not under the final Basel III capital rules adopted and issued by the Federal Reserve Board in July 2013, which are effective January 1, 2014 with compliance required January 1, 2015.
Tier 1 leverage ratio - Tier 1 risk-based capital divided by adjusted average total assets.
Tier 1 risk-based capital - Total equity, plus trust preferred capital securities, plus certain noncontrolling interests that are held by others; less goodwill and certain other intangible assets, less equity investments in nonfinancial companies, less ineligible servicing assets, less disallowed deferred tax assets and less net unrealized holding gains (losses) on available-for-sale equity securities, available-for-sale debt securities, and cash flow hedge derivatives.
Tier 1 risk-based capital ratio - Tier 1 risk-based capital divided by period-end risk-weighted assets.
Total risk-based capital - Tier 1 risk-based capital plus qualifying subordinated debt, other noncontrolling interest not qualified as Tier 1, eligible gains on available-for-sale equity securities and the allowance for loan and lease losses, subject to certain limitations.
Total risk-based capital ratio - Total risk-based capital divided by period-end risk-weighted assets.