Exhibit 99.1
For further information:
Media Contact:
Amy Yuhn
312-564-1378
ayuhn@theprivatebank.com
Investor Relations Contact:
Jeanette O'Loughlin
312-564-6076
joloughlin@theprivatebank.com
PrivateBancorp Reports Third Quarter 2015 Earnings
Earnings per share of $0.57 for third quarter 2015, compared to $0.51 for third quarter 2014
and $0.58 for second quarter 2015
CHICAGO, October 13, 2015 - PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income of $45.3 million, or $0.57 per diluted share, for the third quarter 2015, compared to $40.5 million, or $0.51 per diluted share, for the third quarter 2014, and $46.4 million, or $0.58 per diluted share, for the second quarter 2015. For the nine months ended September 30, 2015, the Company had net income of $133.2 million, or $1.67 per diluted share, compared to $115.9 million, or $1.47 per diluted share, for the nine months ended September 30, 2014.
“Our third quarter results reflect our consistent execution as we continue to establish relationships with new clients and expand our banking business with existing clients,” said Larry D. Richman, President and Chief Executive Officer, PrivateBancorp, Inc. “We grew loans $536 million from the prior quarter, with a good mix of commercial and industrial and commercial real estate. We grew deposits from new and existing clients, and noninterest-bearing demand deposits increased 10 percent over the previous quarter.
“On a year-over-year basis, third quarter net revenue was up 10 percent to $163 million as our steady loan growth drove a 12 percent increase in net interest income,” Richman continued. “Net income increased 12 percent over third quarter 2014 to $45 million. Overall, I’m pleased with our performance this quarter and believe we are well positioned to finish the year strong.”
Third Quarter 2015 Highlights
| • | Total loans grew to $13.1 billion, up $1.5 billion, or 13 percent, from a year ago and up $536.0 million, or 4 percent, from June 30, 2015. Commercial loans represented 67 percent of total loans and commercial real estate and construction loans represented 27 percent of total loans at September 30, 2015. |
| • | Total deposits were $13.9 billion, increasing $1.0 billion, or 8 percent, from a year ago and $508.8 million, or 4 percent, from June 30, 2015. Noninterest-bearing demand deposits represented 29 percent of total deposits at September 30, 2015, compared to 26 percent a year ago. |
| • | Net revenue of $163.1 million benefited from growth in earning assets, increasing 10 percent from the third quarter 2014 and 3 percent from the second quarter 2015. |
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| • | Net interest margin was 3.23 percent, comparable to the third quarter 2014 and up from 3.17 percent for the second quarter 2015. The current quarter benefited from a higher level of loan fees and lower average cash equivalents compared to the sequential quarter. |
| • | The provision for loan and covered loan losses was $4.2 million, compared to $3.9 million for the third quarter 2014 and $2.1 million for the second quarter 2015. |
| • | Return on average assets was 1.09 percent and return on average common equity was 11.1 percent for the third quarter 2015. |
Operating Performance
Net interest income was $131.2 million in the third quarter 2015, an increase of 12 percent from the third quarter 2014 and 5 percent from the second quarter 2015, primarily reflecting growth in average loans. Average loan balances increased 13 percent from the third quarter 2014 and 3 percent from the second quarter 2015. Compared to the third quarter 2014, net interest income also benefited from interest savings largely related to the trust preferred securities redemption in the fourth quarter 2014.
Net interest margin was 3.23 percent in the third quarter 2015, comparable to the third quarter 2014, as the benefit from the trust preferred securities redemption offset the impact of lower loan yields. Compared to the second quarter 2015, net interest margin improved by six basis points. The current quarter benefited from a higher level of loan fees on a comparative basis, including one large fee from an early repayment that contributed three basis points to net interest margin. Excluding the impact of loan fees, loan yields remained relatively stable on a sequential basis. While loan pricing remains competitive in the current environment, the loan portfolio is largely indexed to short-term rates and benefited from a modest rise in one-month LIBOR. Lower average cash equivalents on a comparative basis also contributed three basis points to net interest margin. Deposits costs increased by two basis points, which was offset by an increase in average noninterest-bearing funds from the second quarter.
Noninterest income was $30.8 million in the third quarter 2015, compared to $30.7 million for the third quarter 2014 and $33.1 million for the second quarter 2015. Treasury management fees grew to $8.0 million in the third quarter 2015, up 16 percent from the third quarter 2014 and up 8 percent from the second quarter 2015. Continued success in cross-sell activities drove higher treasury management volume. Syndication fees declined to $4.4 million in the third quarter 2015, down from $6.8 million in the third quarter 2014 and $5.4 million in the second quarter 2015. Syndication fees will vary from quarter to quarter depending on the level and mix of loans originated and distributed.
Capital markets revenue of $3.1 million in the third quarter 2015 reflected a negative credit valuation adjustment (CVA) of $1.2 million. Excluding the CVA impact for all periods, capital markets revenue was $4.3 million in the third quarter 2015, up $1.6 million from the third quarter 2014 and comparable to the second quarter 2015. Compared to the third quarter 2014, the current quarter benefited from several larger interest rate derivative transactions, and foreign exchange revenues grew reflecting increased client penetration.
Assets under management and administration (AUMA) were $7.2 billion as of September 30, 2015, compared to $6.5 billion a year ago, benefiting from the continued focus on cross-selling asset management services to commercial and private wealth clients and ongoing client development. Compared to June 30, 2015, AUMA balances declined 4 percent primarily driven by market performance. Asset management revenue was $4.5 million in the third quarter 2015, compared to $4.2 million for the third quarter 2014 and $4.7 million for the second quarter 2015. Mortgage banking revenue improved 15 percent from the third quarter 2014 and declined 20 percent from the second quarter 2015 which benefited from a higher level of refinance activity.
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Expenses
Noninterest expense was $85.2 million for the third quarter 2015, compared to $77.8 million for the third quarter 2014 and $81.9 million for the second quarter 2015. The efficiency ratio was 52.2 percent for the third quarter 2015, compared to 52.5 percent for the third quarter 2014 and 51.6 percent for the second quarter 2015.
Salaries and benefits expense was comparable to the second quarter 2015 and increased $3.6 million from the third quarter 2014 due to annual salary adjustments made during the first quarter, additional hires made over the last year, and higher incentive compensation accruals. Other expenses increased by $1.8 million from the third quarter 2014 and $2.4 million from the second quarter 2015, primarily related to a higher provision for unfunded commitments.
Credit Quality
The allowance for loan losses as a percentage of total loans was 1.25 percent at September 30, 2015, comparable to June 30, 2015. The provision for loan losses was $4.2 million for the third quarter 2015, increasing $471,000 from the third quarter 2014 and $2.1 million from the second quarter 2015. The current quarter's provision for loan losses reflected loan growth, portfolio movement, and recoveries exceeding charge-offs. Net recoveries to average loans were 0.05 percent for the third quarter 2015, compared to net charge-offs to average loans of less than 0.01 percent for the third quarter 2014 and 0.05 percent for the second quarter 2015.
Nonperforming assets were 0.34 percent of total assets at September 30, 2015, down from 0.44 percent at June 30, 2015. At September 30, 2015, nonperforming loans were $44.0 million, declining from $56.6 million at June 30, 2015. OREO declined 15 percent during the current quarter to $12.8 million at September 30, 2015.
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 $16.9 billion at September 30, 2015, compared to $15.2 billion at September 30, 2014, and $16.2 billion at June 30, 2015. Total loans of $13.1 billion increased 13 percent from September 30, 2014, and 4 percent from June 30, 2015, driven by growth in commercial and industrial and commercial real estate loans. At September 30, 2015, total commercial loans (including owner-occupied commercial real estate) comprised 67 percent of total loans, and commercial real estate and construction loans represented 27 percent of total loans.
Total liabilities were $15.2 billion at September 30, 2015, compared to $13.8 billion at September 30, 2014, and $14.6 billion compared to June 30, 2015. Total deposits were $13.9 billion at September 30, 2015, increasing 8 percent from September 30, 2014, and 4 percent from June 30, 2015, driven primarily by higher noninterest-bearing demand deposit and money market account balances. Noninterest-bearing demand deposits represented 29 percent of total deposits at September 30, 2015, compared to 26 percent a year ago and 28 percent at June 30, 2015. The deposit base is predominately comprised of commercial client balances, including deposits from a variety of financial service businesses, which will fluctuate from time to time based on their business and liquidity needs. At September 30, 2015, the loan-to-deposit ratio was 94 percent, compared to 90 percent as of September 30, 2014, and 94 percent as of June 30, 2015.
Capital
As of September 30, 2015, the total risk-based capital ratio was 12.28 percent, the Tier 1 risk-based capital ratio was 10.39 percent, and the leverage ratio was 10.35 percent. The common equity Tier 1 ratio was 9.35 percent and the tangible common equity ratio was 9.23 percent at the end of the third quarter 2015.
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Quarterly Conference Call and Webcast Presentation
PrivateBancorp will host a conference call Tuesday, October 13, 2015, 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 #33786969. A live webcast of the call can be accessed at investor.theprivatebank.com. A rebroadcast will be available beginning approximately two hours after the call until midnight ET October 27, 2015, by calling (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) and entering passcode #33786969.
About PrivateBancorp, Inc.
PrivateBancorp, Inc., through its subsidiary The PrivateBank, 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 it serves. As of September 30, 2015, the Company had 35 offices in 12 states and $16.9 billion in assets. The Company’s 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 or affect demand for certain banking products and services; |
| • | unanticipated developments in pending or prospective loan transactions or greater-than-expected paydowns or payoffs of existing loans; |
| • | competitive pressures in the financial services industry relating to both pricing and loan structures, which may impact our growth rate due to increasing availability in the market of financing alternatives offering terms outside our risk tolerances; |
| • | unforeseen credit quality problems or changing economic conditions that could result in charge-offs greater than we have anticipated in our allowance for loan losses or changes in value of our investments; |
| • | an inability to attract sufficient or cost-effective sources of liquidity or funding as and when needed; |
| • | unanticipated losses of one or more large depositor relationships, or other significant deposit outflows; |
| • | loss of key personnel or an inability to recruit appropriate talent cost-effectively; |
| • | greater-than-anticipated costs to support the growth of our business, including investments in technology, process improvements or other infrastructure enhancements, or greater-than-anticipated compliance costs or regulatory burdens; or |
| • | failures or disruptions to, or compromises of, our data processing or other information or operational systems, including the potential impact of disruptions or security 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 Annual Report on Form 10-K for our fiscal year ended December 31, 2014, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, as well as those set forth in our subsequent periodic and current 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.
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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 of the non-U.S. GAAP financial measure 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 the Company's website at investor.theprivatebank.com.
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| Consolidated Income Statements | |||||||||||||||
| (Amounts in thousands, except per share data) | |||||||||||||||
| (Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Interest Income | |||||||||||||||
| Loans, including fees | $ | 132,106 | $ | 119,211 | $ | 380,455 | $ | 343,106 | |||||||
| Federal funds sold and interest-bearing deposits in banks | 168 | 142 | 674 | 423 | |||||||||||
| Securities: | |||||||||||||||
| Taxable | 13,599 | 13,370 | 40,696 | 40,250 | |||||||||||
| Exempt from Federal income taxes | 2,177 | 1,529 | 5,964 | 4,490 | |||||||||||
| Other interest income | 69 | 48 | 180 | 140 | |||||||||||
| Total interest income | 148,119 | 134,300 | 427,969 | 388,409 | |||||||||||
| Interest Expense | |||||||||||||||
| Interest-bearing demand deposits | 937 | 918 | 2,909 | 2,702 | |||||||||||
| Savings deposits and money market accounts | 5,119 | 4,173 | 14,682 | 12,234 | |||||||||||
| Time deposits | 5,782 | 5,723 | 17,151 | 15,563 | |||||||||||
| Short-term borrowings | 24 | 158 | 455 | 495 | |||||||||||
| Long-term debt | 5,048 | 6,570 | 14,948 | 19,554 | |||||||||||
| Total interest expense | 16,910 | 17,542 | 50,145 | 50,548 | |||||||||||
| Net interest income | 131,209 | 116,758 | 377,824 | 337,861 | |||||||||||
| Provision for loan and covered loan losses | 4,197 | 3,890 | 11,959 | 7,924 | |||||||||||
| Net interest income after provision for loan and covered loan losses | 127,012 | 112,868 | 365,865 | 329,937 | |||||||||||
| Non-interest Income | |||||||||||||||
| Asset management | 4,462 | 4,240 | 13,566 | 13,027 | |||||||||||
| Mortgage banking | 3,340 | 2,904 | 11,267 | 7,162 | |||||||||||
| Capital markets products | 3,098 | 3,253 | 12,189 | 12,342 | |||||||||||
| Treasury management | 8,010 | 6,935 | 22,758 | 20,210 | |||||||||||
| Loan, letter of credit and commitment fees | 5,670 | 4,970 | 15,690 | 14,410 | |||||||||||
| Syndication fees | 4,364 | 6,818 | 12,361 | 15,571 | |||||||||||
| Deposit service charges and fees and other income | 1,585 | 1,546 | 8,740 | 3,912 | |||||||||||
| Net securities gains | 260 | 3 | 793 | 530 | |||||||||||
| Total non-interest income | 30,789 | 30,669 | 97,364 | 87,164 | |||||||||||
| Non-interest Expense | |||||||||||||||
| Salaries and employee benefits | 50,019 | 46,421 | 152,400 | 135,446 | |||||||||||
| Net occupancy and equipment expense | 8,180 | 7,807 | 24,203 | 23,311 | |||||||||||
| Technology and related costs | 3,583 | 3,362 | 10,424 | 9,850 | |||||||||||
| Marketing | 3,682 | 3,752 | 11,926 | 9,754 | |||||||||||
| Professional services | 3,679 | 2,626 | 8,574 | 8,290 | |||||||||||
| Outsourced servicing costs | 1,786 | 1,736 | 5,500 | 5,050 | |||||||||||
| Net foreclosed property expenses | 1,080 | 1,631 | 2,993 | 7,225 | |||||||||||
| Postage, telephone, and delivery | 857 | 839 | 2,618 | 2,591 | |||||||||||
| Insurance | 3,667 | 3,077 | 10,328 | 8,996 | |||||||||||
| Loan and collection expense | 2,324 | 2,099 | 6,802 | 4,728 | |||||||||||
| Other expenses | 6,318 | 4,486 | 14,449 | 13,810 | |||||||||||
| Total non-interest expense | 85,175 | 77,836 | 250,217 | 229,051 | |||||||||||
| Income before income taxes | 72,626 | 65,701 | 213,012 | 188,050 | |||||||||||
| Income tax provision | 27,358 | 25,174 | 79,838 | 72,194 | |||||||||||
| Net income available to common stockholders | $ | 45,268 | $ | 40,527 | $ | 133,174 | $ | 115,856 | |||||||
| Per Common Share Data | |||||||||||||||
| Basic earnings per share | $ | 0.58 | $ | 0.52 | $ | 1.70 | $ | 1.48 | |||||||
| Diluted earnings per share | $ | 0.57 | $ | 0.51 | $ | 1.67 | $ | 1.47 | |||||||
| Cash dividends declared | $ | 0.01 | $ | 0.01 | $ | 0.03 | $ | 0.03 | |||||||
| Weighted-average common shares outstanding | 78,144 | 77,110 | 77,834 | 76,951 | |||||||||||
| Weighted-average diluted common shares outstanding | 79,401 | 77,934 | 79,027 | 77,721 | |||||||||||
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| Consolidated Income Statements | |||||||||||||||||||
| (Amounts in thousands, except per share data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Loans, including fees | $ | 132,106 | $ | 125,647 | $ | 122,702 | $ | 120,649 | $ | 119,211 | |||||||||
| Federal funds sold and interest-bearing deposits in banks | 168 | 245 | 261 | 347 | 142 | ||||||||||||||
| Securities: | |||||||||||||||||||
| Taxable | 13,599 | 13,541 | 13,556 | 13,250 | 13,370 | ||||||||||||||
| Exempt from Federal income taxes | 2,177 | 1,981 | 1,806 | 1,683 | 1,529 | ||||||||||||||
| Other interest income | 69 | 63 | 48 | 49 | 48 | ||||||||||||||
| Total interest income | 148,119 | 141,477 | 138,373 | 135,978 | 134,300 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Interest-bearing demand deposits | 937 | 966 | 1,006 | 1,026 | 918 | ||||||||||||||
| Savings deposits and money market accounts | 5,119 | 4,953 | 4,610 | 4,623 | 4,173 | ||||||||||||||
| Time deposits | 5,782 | 5,730 | 5,639 | 5,803 | 5,723 | ||||||||||||||
| Short-term borrowings | 24 | 234 | 197 | 143 | 158 | ||||||||||||||
| Long-term debt | 5,048 | 4,972 | 4,928 | 7,507 | 6,570 | ||||||||||||||
| Total interest expense | 16,910 | 16,855 | 16,380 | 19,102 | 17,542 | ||||||||||||||
| Net interest income | 131,209 | 124,622 | 121,993 | 116,876 | 116,758 | ||||||||||||||
| Provision for loan and covered loan losses | 4,197 | 2,116 | 5,646 | 4,120 | 3,890 | ||||||||||||||
| Net interest income after provision for loan and covered loan losses | 127,012 | 122,506 | 116,347 | 112,756 | 112,868 | ||||||||||||||
| Non-interest Income | |||||||||||||||||||
| Asset management | 4,462 | 4,741 | 4,363 | 4,241 | 4,240 | ||||||||||||||
| Mortgage banking | 3,340 | 4,152 | 3,775 | 3,083 | 2,904 | ||||||||||||||
| Capital markets products | 3,098 | 4,919 | 4,172 | 5,705 | 3,253 | ||||||||||||||
| Treasury management | 8,010 | 7,421 | 7,327 | 7,262 | 6,935 | ||||||||||||||
| Loan, letter of credit and commitment fees | 5,670 | 4,914 | 5,106 | 4,901 | 4,970 | ||||||||||||||
| Syndication fees | 4,364 | 5,375 | 2,622 | 3,943 | 6,818 | ||||||||||||||
| Deposit service charges and fees and other income | 1,585 | 1,538 | 5,617 | 1,291 | 1,546 | ||||||||||||||
| Net securities gains (losses) | 260 | (1 | ) | 534 | — | 3 | |||||||||||||
| Total non-interest income | 30,789 | 33,059 | 33,516 | 30,426 | 30,669 | ||||||||||||||
| Non-interest Expense | |||||||||||||||||||
| Salaries and employee benefits | 50,019 | 50,020 | 52,361 | 46,746 | 46,421 | ||||||||||||||
| Net occupancy and equipment expense | 8,180 | 8,159 | 7,864 | 7,947 | 7,807 | ||||||||||||||
| Technology and related costs | 3,583 | 3,420 | 3,421 | 3,431 | 3,362 | ||||||||||||||
| Marketing | 3,682 | 4,666 | 3,578 | 3,687 | 3,752 | ||||||||||||||
| Professional services | 3,679 | 2,585 | 2,310 | 3,471 | 2,626 | ||||||||||||||
| Outsourced servicing costs | 1,786 | 2,034 | 1,680 | 1,814 | 1,736 | ||||||||||||||
| Net foreclosed property expenses | 1,080 | 585 | 1,328 | 1,456 | 1,631 | ||||||||||||||
| Postage, telephone, and delivery | 857 | 899 | 862 | 809 | 839 | ||||||||||||||
| Insurance | 3,667 | 3,450 | 3,211 | 3,455 | 3,077 | ||||||||||||||
| Loan and collection expense | 2,324 | 2,210 | 2,268 | 2,037 | 2,099 | ||||||||||||||
| Other expenses | 6,318 | 3,869 | 4,262 | 8,172 | 4,486 | ||||||||||||||
| Total non-interest expense | 85,175 | 81,897 | 83,145 | 83,025 | 77,836 | ||||||||||||||
| Income before income taxes | 72,626 | 73,668 | 66,718 | 60,157 | 65,701 | ||||||||||||||
| Income tax provision | 27,358 | 27,246 | 25,234 | 22,934 | 25,174 | ||||||||||||||
| Net income available to common stockholders | $ | 45,268 | $ | 46,422 | $ | 41,484 | $ | 37,223 | $ | 40,527 | |||||||||
| Per Common Share Data | |||||||||||||||||||
| Basic earnings per share | $ | 0.58 | $ | 0.59 | $ | 0.53 | $ | 0.48 | $ | 0.52 | |||||||||
| Diluted earnings per share | $ | 0.57 | $ | 0.58 | $ | 0.52 | $ | 0.47 | $ | 0.51 | |||||||||
| Cash dividends declared | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||
| Weighted-average common shares outstanding | 78,144 | 77,942 | 77,407 | 77,173 | 77,110 | ||||||||||||||
| Weighted-average diluted common shares outstanding | 79,401 | 79,158 | 78,512 | 78,122 | 77,934 | ||||||||||||||
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| Consolidated Balance Sheets | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| 9/30/15 | 6/30/15 | 3/31/15 | 12/31/14 | 9/30/14 | |||||||||||||||
| Unaudited | Unaudited | Unaudited | Audited | Unaudited | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 145,477 | $ | 185,983 | $ | 158,431 | $ | 132,211 | $ | 181,248 | |||||||||
| Federal funds sold and interest-bearing deposits in banks | 231,600 | 192,531 | 799,953 | 292,341 | 416,071 | ||||||||||||||
| Loans held-for-sale | 76,225 | 54,263 | 89,461 | 115,161 | 57,748 | ||||||||||||||
| Securities available-for-sale, at fair value | 1,703,926 | 1,698,233 | 1,631,237 | 1,645,344 | 1,541,754 | ||||||||||||||
| Securities held-to-maturity, at amortized cost | 1,293,433 | 1,199,120 | 1,159,853 | 1,129,285 | 1,072,002 | ||||||||||||||
| Federal Home Loan Bank ("FHLB") stock | 30,740 | 25,854 | 28,556 | 28,666 | 28,666 | ||||||||||||||
| Loans – excluding covered assets, net of unearned fees | 13,079,314 | 12,543,281 | 12,170,484 | 11,892,219 | 11,547,587 | ||||||||||||||
| Allowance for loan losses | (162,868 | ) | (157,051 | ) | (156,610 | ) | (152,498 | ) | (150,135 | ) | |||||||||
| Loans, net of allowance for loan losses and unearned fees | 12,916,446 | 12,386,230 | 12,013,874 | 11,739,721 | 11,397,452 | ||||||||||||||
| Covered assets | 28,559 | 30,529 | 32,191 | 34,132 | 65,482 | ||||||||||||||
| Allowance for covered loan losses | (6,337 | ) | (6,332 | ) | (6,021 | ) | (5,191 | ) | (4,485 | ) | |||||||||
| Covered assets, net of allowance for covered loan losses | 22,222 | 24,197 | 26,170 | 28,941 | 60,997 | ||||||||||||||
| Other real estate owned, excluding covered assets | 12,760 | 15,084 | 15,625 | 17,416 | 17,293 | ||||||||||||||
| Premises, furniture, and equipment, net | 38,265 | 37,672 | 38,544 | 39,143 | 39,611 | ||||||||||||||
| Accrued interest receivable | 43,064 | 43,442 | 41,202 | 40,531 | 39,701 | ||||||||||||||
| Investment in bank owned life insurance | 56,292 | 55,926 | 55,561 | 55,207 | 54,849 | ||||||||||||||
| Goodwill | 94,041 | 94,041 | 94,041 | 94,041 | 94,041 | ||||||||||||||
| Other intangible assets | 4,008 | 4,586 | 5,230 | 5,885 | 6,627 | ||||||||||||||
| Derivative assets | 59,978 | 47,442 | 56,607 | 43,062 | 34,896 | ||||||||||||||
| Other assets | 166,128 | 161,291 | 147,003 | 196,427 | 147,512 | ||||||||||||||
| Total assets | $ | 16,894,605 | $ | 16,225,895 | $ | 16,361,348 | $ | 15,603,382 | $ | 15,190,468 | |||||||||
| Liabilities | |||||||||||||||||||
| Demand deposits: | |||||||||||||||||||
| Noninterest-bearing | $ | 4,068,816 | $ | 3,702,377 | $ | 3,936,181 | $ | 3,516,695 | $ | 3,342,862 | |||||||||
| Interest-bearing | 1,264,201 | 1,304,270 | 1,498,810 | 1,907,320 | 1,433,429 | ||||||||||||||
| Savings deposits and money market accounts | 6,249,485 | 5,992,288 | 6,156,331 | 5,171,025 | 5,368,866 | ||||||||||||||
| Time deposits | 2,315,237 | 2,390,001 | 2,510,406 | 2,494,928 | 2,704,047 | ||||||||||||||
| Total deposits | 13,897,739 | 13,388,936 | 14,101,728 | 13,089,968 | 12,849,204 | ||||||||||||||
| Deposits held-for-sale | — | — | — | 122,216 | 128,508 | ||||||||||||||
| Short-term borrowings | 514,121 | 434,695 | 258,788 | 432,385 | 6,563 | ||||||||||||||
| Long-term debt | 694,788 | 694,788 | 344,788 | 344,788 | 656,793 | ||||||||||||||
| Accrued interest payable | 6,509 | 7,543 | 7,004 | 6,948 | 6,987 | ||||||||||||||
| Derivative liabilities | 21,967 | 24,696 | 26,967 | 26,767 | 27,976 | ||||||||||||||
| Other liabilities | 111,482 | 90,441 | 82,644 | 98,631 | 79,128 | ||||||||||||||
| Total liabilities | 15,246,606 | 14,641,099 | 14,821,919 | 14,121,703 | 13,755,159 | ||||||||||||||
| Equity | |||||||||||||||||||
| Common stock: | |||||||||||||||||||
| Voting | 78,197 | 78,047 | 77,968 | 77,211 | 76,858 | ||||||||||||||
| Nonvoting | — | — | — | — | 285 | ||||||||||||||
| Treasury stock | (63 | ) | (29 | ) | (5,560 | ) | (53 | ) | (6 | ) | |||||||||
| Additional paid-in capital | 1,060,274 | 1,051,778 | 1,047,227 | 1,034,048 | 1,028,813 | ||||||||||||||
| Retained earnings | 480,342 | 435,872 | 390,247 | 349,556 | 313,123 | ||||||||||||||
| Accumulated other comprehensive income, net of tax | 29,249 | 19,128 | 29,547 | 20,917 | 16,236 | ||||||||||||||
| Total equity | 1,647,999 | 1,584,796 | 1,539,429 | 1,481,679 | 1,435,309 | ||||||||||||||
| Total liabilities and equity | $ | 16,894,605 | $ | 16,225,895 | $ | 16,361,348 | $ | 15,603,382 | $ | 15,190,468 | |||||||||
8
| Selected Financial Data | ||||||||||||||||||||
| (Amounts in thousands, except per share data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | ||||||||||||||||
| Selected Statement of Income Data: | ||||||||||||||||||||
| Net interest income | $ | 131,209 | $ | 124,622 | $ | 121,993 | $ | 116,876 | $ | 116,758 | ||||||||||
Net revenue (1)(2) | $ | 163,134 | $ | 158,717 | $ | 156,453 | $ | 148,180 | $ | 148,238 | ||||||||||
Operating profit (1)(2) | $ | 77,959 | $ | 76,820 | $ | 73,308 | $ | 65,155 | $ | 70,402 | ||||||||||
| Provision for loan and covered loan losses | $ | 4,197 | $ | 2,116 | $ | 5,646 | $ | 4,120 | $ | 3,890 | ||||||||||
| Income before income taxes | $ | 72,626 | $ | 73,668 | $ | 66,718 | $ | 60,157 | $ | 65,701 | ||||||||||
| Net income available to common stockholders | $ | 45,268 | $ | 46,422 | $ | 41,484 | $ | 37,223 | $ | 40,527 | ||||||||||
| Per Common Share Data: | ||||||||||||||||||||
| Basic earnings per share | $ | 0.58 | $ | 0.59 | $ | 0.53 | $ | 0.48 | $ | 0.52 | ||||||||||
| Diluted earnings per share | $ | 0.57 | $ | 0.58 | $ | 0.52 | $ | 0.47 | $ | 0.51 | ||||||||||
| Dividends declared | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
Book value (period end) (1) | $ | 20.90 | $ | 20.13 | $ | 19.61 | $ | 18.95 | $ | 18.37 | ||||||||||
Tangible book value (period end) (1)(2) | $ | 19.65 | $ | 18.88 | $ | 18.35 | $ | 17.67 | $ | 17.08 | ||||||||||
| Market value (period end) | $ | 38.33 | $ | 39.82 | $ | 35.17 | $ | 33.40 | $ | 29.91 | ||||||||||
| Book value multiple (period end) | 1.83 | x | 1.98 | x | 1.79 | x | 1.76 | x | 1.63 | x | ||||||||||
| Share Data: | ||||||||||||||||||||
| Weighted-average common shares outstanding | 78,144 | 77,942 | 77,407 | 77,173 | 77,110 | |||||||||||||||
| Weighted-average diluted common shares outstanding | 79,401 | 79,158 | 78,512 | 78,122 | 77,934 | |||||||||||||||
| Common shares issued (period end) | 78,865 | 78,718 | 78,654 | 78,180 | 78,121 | |||||||||||||||
| Common shares outstanding (period end) | 78,863 | 78,717 | 78,494 | 78,178 | 78,121 | |||||||||||||||
| Performance Ratio: | ||||||||||||||||||||
| Return on average common equity | 11.05 | % | 11.85 | % | 11.05 | % | 10.03 | % | 11.27 | % | ||||||||||
| Return on average assets | 1.09 | % | 1.15 | % | 1.07 | % | 0.95 | % | 1.09 | % | ||||||||||
Return on average tangible common equity (1)(2) | 11.85 | % | 12.75 | % | 11.94 | % | 10.89 | % | 12.27 | % | ||||||||||
Net interest margin (1)(2) | 3.23 | % | 3.17 | % | 3.21 | % | 3.07 | % | 3.23 | % | ||||||||||
Fee revenue as a percent of total revenue (1) | 18.88 | % | 20.97 | % | 21.28 | % | 20.66 | % | 20.80 | % | ||||||||||
| Non-interest income to average assets | 0.74 | % | 0.82 | % | 0.86 | % | 0.78 | % | 0.83 | % | ||||||||||
| Non-interest expense to average assets | 2.04 | % | 2.03 | % | 2.14 | % | 2.12 | % | 2.09 | % | ||||||||||
Net overhead ratio (1) | 1.30 | % | 1.21 | % | 1.27 | % | 1.35 | % | 1.27 | % | ||||||||||
Efficiency ratio (1)(2) | 52.21 | % | 51.60 | % | 53.14 | % | 56.03 | % | 52.51 | % | ||||||||||
| Balance Sheet Ratios: | ||||||||||||||||||||
Loans to deposits (period end) (3) | 94.11 | % | 93.68 | % | 86.30 | % | 90.85 | % | 89.87 | % | ||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 149.67 | % | 144.67 | % | 144.69 | % | 145.10 | % | 145.51 | % | ||||||||||
| Capital Ratios (period end): | ||||||||||||||||||||
Total risk-based capital (1) | 12.28 | % | 12.41 | % | 12.29 | % | 12.51 | % | 13.18 | % | ||||||||||
Tier 1 risk-based capital (1) | 10.39 | % | 10.49 | % | 10.34 | % | 10.49 | % | 11.12 | % | ||||||||||
Tier 1 leverage ratio (1) | 10.35 | % | 10.24 | % | 10.16 | % | 9.96 | % | 10.70 | % | ||||||||||
Common equity Tier 1 (1)(4) | 9.35 | % | 9.41 | % | 9.23 | % | 9.33 | % | 9.38 | % | ||||||||||
Tangible common equity to tangible assets (1)(2) | 9.23 | % | 9.22 | % | 8.86 | % | 8.91 | % | 8.84 | % | ||||||||||
| Total equity to total assets | 9.75 | % | 9.77 | % | 9.41 | % | 9.50 | % | 9.45 | % | ||||||||||
(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) | Effective January 1, 2015, the common equity Tier 1 ratio is a required regulatory capital measure and as presented for the 2015 periods is calculated in accordance with the new Basel III capital rules. For periods prior to January 1, 2015, this ratio was considered a non-U.S. GAAP financial measure and was calculated without giving effect to the final Basel III capital rules. Refer to "Non-U.S. GAAP Financial Measures" for a reconciliation from non-U.S. GAAP to U.S. GAAP for periods prior to 2015. |
9
| Selected Financial Data (continued) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Additional Selected Information: | |||||||||||||||||||
(Increase) decrease credit valuation adjustment on capital markets derivatives (1) | $ | (1,227 | ) | $ | 616 | $ | (805 | ) | $ | (216 | ) | $ | 486 | ||||||
| Salaries and employee benefits: | |||||||||||||||||||
| Salaries and wages | $ | 28,143 | $ | 27,461 | $ | 27,002 | $ | 26,521 | $ | 26,178 | |||||||||
| Share-based costs | 4,509 | 4,316 | 5,143 | 4,118 | 3,872 | ||||||||||||||
| Incentive compensation and commissions | 13,308 | 13,091 | 11,062 | 12,053 | 12,294 | ||||||||||||||
| Payroll taxes, insurance and retirement costs | 4,059 | 5,152 | 9,154 | 4,054 | 4,077 | ||||||||||||||
| Total salaries and employee benefits | $ | 50,019 | $ | 50,020 | $ | 52,361 | $ | 46,746 | $ | 46,421 | |||||||||
| Loan and collection expense: | |||||||||||||||||||
| Loan origination and servicing expense | $ | 1,522 | $ | 1,607 | $ | 1,626 | $ | 1,528 | $ | 1,528 | |||||||||
| Loan remediation expense | 802 | 603 | 642 | 509 | 571 | ||||||||||||||
| Total loan and collection expense | $ | 2,324 | $ | 2,210 | $ | 2,268 | $ | 2,037 | $ | 2,099 | |||||||||
| Assets under management and administration (AUMA): | |||||||||||||||||||
| Personal managed | $ | 1,839,829 | $ | 1,892,973 | $ | 1,897,644 | $ | 1,786,633 | $ | 1,796,901 | |||||||||
| Corporate and institutional managed | 1,800,522 | 1,883,166 | 1,826,215 | 1,347,299 | 1,364,624 | ||||||||||||||
| Total managed assets | 3,640,351 | 3,776,139 | 3,723,859 | 3,133,932 | 3,161,525 | ||||||||||||||
| Custody assets | 3,519,364 | 3,682,388 | 3,604,333 | 3,511,996 | 3,319,188 | ||||||||||||||
| Total AUMA | $ | 7,159,715 | $ | 7,458,527 | $ | 7,328,192 | $ | 6,645,928 | $ | 6,480,713 | |||||||||
| Basic and Diluted Earnings per Common Share | |||||||||||||||||||
| (Amounts in thousands, except per share data) | |||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Basic earnings per common share | |||||||||||||||||||
| Net income | $ | 45,268 | $ | 46,422 | $ | 41,484 | $ | 37,223 | $ | 40,527 | |||||||||
Net income allocated to participating stockholders (2) | (354 | ) | (366 | ) | (463 | ) | (470 | ) | (515 | ) | |||||||||
| Net income allocated to common stockholders | $ | 44,914 | $ | 46,056 | $ | 41,021 | $ | 36,753 | $ | 40,012 | |||||||||
| Weighted-average common shares outstanding | 78,144 | 77,942 | 77,407 | 77,173 | 77,110 | ||||||||||||||
| Basic earnings per common share | $ | 0.58 | $ | 0.59 | $ | 0.53 | $ | 0.48 | $ | 0.52 | |||||||||
| Diluted earnings per common share | |||||||||||||||||||
Diluted earnings applicable to common stockholders (3) | $ | 44,922 | $ | 46,059 | $ | 41,028 | $ | 36,758 | $ | 40,017 | |||||||||
| Weighted-average diluted common shares outstanding: | |||||||||||||||||||
| Weighted-average common shares outstanding | 78,144 | 77,942 | 77,407 | 77,173 | 77,110 | ||||||||||||||
| Dilutive effect of stock awards | 1,257 | 1,216 | 1,105 | 949 | 824 | ||||||||||||||
| Weighted-average diluted common shares outstanding | 79,401 | 79,158 | 78,512 | 78,122 | 77,934 | ||||||||||||||
| Diluted earnings per common share | $ | 0.57 | $ | 0.58 | $ | 0.52 | $ | 0.47 | $ | 0.51 | |||||||||
(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 stock units and certain restricted stock units and restricted stock awards). |
(3) | Net income 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. |
10
Loan Portfolio Composition (excluding covered assets (1)) | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||
| 9/30/15 | % of Total | 6/30/15 | % of Total | 3/31/15 | % of Total | 12/31/14 | % of Total | 9/30/14 | % of Total | |||||||||||||||||||||||||
| Unaudited | Unaudited | Unaudited | Audited | Unaudited | ||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 6,654,268 | 51 | % | $ | 6,397,736 | 51 | % | $ | 6,213,029 | 51 | % | $ | 5,996,070 | 50 | % | $ | 5,932,562 | 51 | % | ||||||||||||||
| Commercial - owner-occupied CRE | 2,017,733 | 16 | % | 2,048,489 | 16 | % | 1,977,601 | 16 | % | 1,892,564 | 16 | % | 1,843,199 | 16 | % | |||||||||||||||||||
| Total commercial | 8,672,001 | 67 | % | 8,446,225 | 67 | % | 8,190,630 | 67 | % | 7,888,634 | 66 | % | 7,775,761 | 67 | % | |||||||||||||||||||
| Commercial real estate | 2,545,143 | 19 | % | 2,432,608 | 19 | % | 2,411,359 | 20 | % | 2,323,616 | 20 | % | 2,233,018 | 19 | % | |||||||||||||||||||
| Commercial real estate - multi-family | 704,195 | 5 | % | 561,924 | 5 | % | 492,695 | 4 | % | 593,103 | 5 | % | 546,641 | 5 | % | |||||||||||||||||||
| Total commercial real estate | 3,249,338 | 24 | % | 2,994,532 | 24 | % | 2,904,054 | 24 | % | 2,916,719 | 25 | % | 2,779,659 | 24 | % | |||||||||||||||||||
| Construction | 412,688 | 3 | % | 371,096 | 3 | % | 357,258 | 3 | % | 381,102 | 3 | % | 307,066 | 3 | % | |||||||||||||||||||
| Residential real estate | 439,005 | 3 | % | 415,826 | 3 | % | 376,741 | 3 | % | 361,565 | 3 | % | 343,573 | 3 | % | |||||||||||||||||||
| Home equity | 133,122 | 1 | % | 137,461 | 1 | % | 138,734 | 1 | % | 142,177 | 1 | % | 141,159 | 1 | % | |||||||||||||||||||
| Personal | 173,160 | 2 | % | 178,141 | 2 | % | 203,067 | 2 | % | 202,022 | 2 | % | 200,369 | 2 | % | |||||||||||||||||||
| Total loans | $ | 13,079,314 | 100 | % | $ | 12,543,281 | 100 | % | $ | 12,170,484 | 100 | % | $ | 11,892,219 | 100 | % | $ | 11,547,587 | 100 | % | ||||||||||||||
Total new loans to new clients (2) | $ | 399,209 | $ | 344,356 | $ | 385,777 | $ | 451,896 | $ | 421,326 | ||||||||||||||||||||||||
(1) | Refer to Glossary of Terms for definition. |
(2) | Amounts are unaudited. |
11
| Commercial Loan Portfolio Composition by Industry Segment | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Classified pursuant to the North American Industrial Classification System standard industry descriptions and represents our client's primary business activity) | ||||||||||||||||||||
| September 30, 2015 | June 30, 2015 | December 31, 2014 | ||||||||||||||||||
| Amount | % of Total | Amount | % of Total | Amount | % of Total | |||||||||||||||
| Healthcare | $ | 1,808,455 | 21 | % | $ | 1,938,339 | 23 | % | $ | 1,787,092 | 23 | % | ||||||||
| Manufacturing | 1,877,842 | 22 | % | 1,835,288 | 22 | % | 1,746,328 | 22 | % | |||||||||||
| Finance and insurance | 1,162,536 | 14 | % | 873,846 | 10 | % | 779,146 | 10 | % | |||||||||||
| Wholesale trade | 669,580 | 8 | % | 690,011 | 8 | % | 685,247 | 9 | % | |||||||||||
| Real estate, rental and leasing | 553,032 | 6 | % | 569,449 | 7 | % | 549,467 | 7 | % | |||||||||||
| Administrative, support, waste management and remediation services | 502,759 | 6 | % | 522,696 | 6 | % | 505,939 | 6 | % | |||||||||||
| Professional, scientific and technical services | 552,313 | 6 | % | 519,084 | 6 | % | 447,483 | 6 | % | |||||||||||
| Architecture, engineering and construction | 281,918 | 3 | % | 287,209 | 4 | % | 288,527 | 4 | % | |||||||||||
| Retail | 286,593 | 3 | % | 269,041 | 3 | % | 277,393 | 3 | % | |||||||||||
All other (1) | 976,973 | 11 | % | 941,262 | 11 | % | 822,012 | 10 | % | |||||||||||
Total commercial (2) | $ | 8,672,001 | 100 | % | $ | 8,446,225 | 100 | % | $ | 7,888,634 | 100 | % | ||||||||
(1) | All other consists of numerous smaller balances across a variety of industries with no category greater than 3%. |
(2) | Includes owner-occupied commercial real estate of $2.0 billion at September 30, 2015 and June 30, 2015, and $1.9 billion at December 31, 2014. |
| Commercial Real Estate and Construction Loan Portfolio by Collateral Type | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| September 30, 2015 | June 30, 2015 | December 31, 2014 | ||||||||||||||||||
| Amount | % of Total | Amount | % of Total | Amount | % of Total | |||||||||||||||
| Commercial Real Estate | ||||||||||||||||||||
| Retail | $ | 735,868 | 23 | % | $ | 699,758 | 23 | % | $ | 608,102 | 21 | % | ||||||||
| Multi-family | 704,195 | 22 | % | 561,924 | 19 | % | 593,103 | 20 | % | |||||||||||
| Office | 503,343 | 15 | % | 517,519 | 17 | % | 543,657 | 19 | % | |||||||||||
| Healthcare | 383,929 | 12 | % | 304,834 | 10 | % | 361,476 | 12 | % | |||||||||||
| Industrial/warehouse | 311,745 | 9 | % | 295,531 | 10 | % | 264,976 | 9 | % | |||||||||||
| Land | 242,801 | 7 | % | 239,704 | 8 | % | 199,497 | 7 | % | |||||||||||
| Residential 1-4 family | 81,444 | 3 | % | 82,277 | 3 | % | 76,995 | 3 | % | |||||||||||
| Mixed use/other | 286,013 | 9 | % | 292,985 | 10 | % | 268,913 | 9 | % | |||||||||||
| Total commercial real estate | $ | 3,249,338 | 100 | % | $ | 2,994,532 | 100 | % | $ | 2,916,719 | 100 | % | ||||||||
| Construction | ||||||||||||||||||||
| Multi-family | $ | 115,516 | 28 | % | $ | 119,812 | 32 | % | 113,206 | 30 | % | |||||||||
| Retail | 85,607 | 21 | % | 79,784 | 21 | % | 100,086 | 26 | % | |||||||||||
| Industrial/warehouse | 32,585 | 8 | % | 49,809 | 13 | % | 43,779 | 11 | % | |||||||||||
| Residential 1-4 family | 30,527 | 7 | % | 32,087 | 9 | % | 32,419 | 9 | % | |||||||||||
| Healthcare | 35,262 | 9 | % | 27,624 | 8 | % | 22,382 | 6 | % | |||||||||||
| Office | 54,770 | 13 | % | 24,653 | 7 | % | 14,447 | 4 | % | |||||||||||
| Mixed use/other | 58,421 | 14 | % | 37,327 | 10 | % | 54,783 | 14 | % | |||||||||||
| Total construction | $ | 412,688 | 100 | % | $ | 371,096 | 100 | % | $ | 381,102 | 100 | % | ||||||||
12
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Credit Quality Key Ratios | |||||||||||||||||||
| Net (recoveries) charge-offs (annualized) to average loans | -0.05 | % | 0.05 | % | 0.05 | % | 0.05 | % | * | ||||||||||
| Nonperforming loans to total loans | 0.34 | % | 0.45 | % | 0.58 | % | 0.57 | % | 0.64 | % | |||||||||
| Nonperforming loans to total assets | 0.26 | % | 0.35 | % | 0.43 | % | 0.43 | % | 0.48 | % | |||||||||
| Nonperforming assets to total assets | 0.34 | % | 0.44 | % | 0.53 | % | 0.54 | % | 0.60 | % | |||||||||
| Allowance for loan losses to: | |||||||||||||||||||
| Total loans | 1.25 | % | 1.25 | % | 1.29 | % | 1.28 | % | 1.30 | % | |||||||||
| Nonperforming loans | 370 | % | 278 | % | 221 | % | 226 | % | 204 | % | |||||||||
| Nonperforming assets | |||||||||||||||||||
| Loans past due 90 days and accruing | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
| Nonaccrual loans | 43,982 | 56,574 | 71,018 | 67,544 | 73,429 | ||||||||||||||
| OREO | 12,760 | 15,084 | 15,625 | 17,416 | 17,293 | ||||||||||||||
| Total nonperforming assets | $ | 56,742 | $ | 71,658 | $ | 86,643 | $ | 84,960 | $ | 90,722 | |||||||||
| Restructured loans accruing interest | $ | 25,697 | $ | 36,686 | $ | 22,368 | $ | 22,745 | $ | 22,136 | |||||||||
| Loans past due and still accruing | |||||||||||||||||||
| 30-59 days | $ | 2,236 | $ | 2,151 | $ | 6,673 | $ | 7,696 | $ | 711 | |||||||||
| 60-89 days | 4,184 | 672 | 2,544 | 4,120 | 2,746 | ||||||||||||||
| Total loans past due and still accruing | $ | 6,420 | $ | 2,823 | $ | 9,217 | $ | 11,816 | $ | 3,457 | |||||||||
| Special mention loans | $ | 146,827 | $ | 132,441 | $ | 102,651 | $ | 100,989 | $ | 76,611 | |||||||||
| Potential problem loans | $ | 127,950 | $ | 137,757 | $ | 107,038 | $ | 87,442 | $ | 119,770 | |||||||||
| Nonperforming Loans Rollforward | |||||||||||||||||||
| Beginning balance | $ | 56,574 | $ | 71,018 | $ | 67,544 | $ | 73,429 | $ | 76,589 | |||||||||
| Additions: | |||||||||||||||||||
| New nonaccrual loans | 1,127 | 6,884 | 16,279 | 6,052 | 16,767 | ||||||||||||||
| Reductions: | |||||||||||||||||||
| Return to performing status | (998 | ) | — | (97 | ) | (439 | ) | — | |||||||||||
| Paydowns and payoffs, net of advances | (8,807 | ) | (15,800 | ) | (4,841 | ) | (457 | ) | (16,371 | ) | |||||||||
| Net sales | (1,990 | ) | (317 | ) | (2,407 | ) | (1,800 | ) | (1,053 | ) | |||||||||
| Transfer to OREO | (954 | ) | (1,996 | ) | (2,152 | ) | (6,177 | ) | (776 | ) | |||||||||
| Charge-offs | (970 | ) | (3,215 | ) | (3,308 | ) | (3,064 | ) | (1,727 | ) | |||||||||
| Total reductions | (13,719 | ) | (21,328 | ) | (12,805 | ) | (11,937 | ) | (19,927 | ) | |||||||||
| Balance at end of period | $ | 43,982 | $ | 56,574 | $ | 71,018 | $ | 67,544 | $ | 73,429 | |||||||||
(1) | Refer to Glossary of Terms for definition. |
| * | Less than 0.01%. |
13
Asset Quality (excluding covered assets (1)) | |||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Credit Quality Indicators | |||||||||||||||||||||||||||
| Special Mention Loans | % of Portfolio Loan Type | Potential Problem Loans | % of Portfolio Loan Type | Non-Performing Loans | % of Portfolio Loan Type | Total Loans | |||||||||||||||||||||
| September 30, 2015 | |||||||||||||||||||||||||||
| Commercial | $ | 139,622 | 1.6 | % | $ | 116,345 | 1.3 | % | $ | 18,370 | 0.2 | % | $ | 8,672,001 | |||||||||||||
| Commercial real estate | 77 | * | 2,687 | 0.1 | % | 12,041 | 0.4 | % | 3,249,338 | ||||||||||||||||||
| Construction | — | — | % | — | — | % | — | — | % | 412,688 | |||||||||||||||||
| Residential real estate | 6,029 | 1.4 | % | 151 | * | 4,272 | 1.0 | % | 439,005 | ||||||||||||||||||
| Home equity | 487 | 0.4 | % | 2,696 | 2.0 | % | 9,273 | 7.0 | % | 133,122 | |||||||||||||||||
| Personal | 612 | 0.4 | % | 6,071 | 3.5 | % | 26 | * | 173,160 | ||||||||||||||||||
| Total | $ | 146,827 | 1.1 | % | $ | 127,950 | 1.0 | % | $ | 43,982 | 0.3 | % | $ | 13,079,314 | |||||||||||||
| June 30, 2015 | |||||||||||||||||||||||||||
| Commercial | $ | 124,689 | 1.5 | % | $ | 125,948 | 1.5 | % | $ | 27,845 | 0.3 | % | $ | 8,446,225 | |||||||||||||
| Commercial real estate | 83 | * | 2,614 | 0.1 | % | 13,441 | 0.4 | % | 2,994,532 | ||||||||||||||||||
| Construction | — | — | % | — | — | % | — | — | % | 371,096 | |||||||||||||||||
| Residential real estate | 6,148 | 1.5 | % | 6,533 | 1.6 | % | 4,116 | 1.0 | % | 415,826 | |||||||||||||||||
| Home equity | 806 | 0.6 | % | 2,618 | 1.9 | % | 11,148 | 8.1 | % | 137,461 | |||||||||||||||||
| Personal | 715 | 0.4 | % | 44 | * | 24 | * | 178,141 | |||||||||||||||||||
| Total | $ | 132,441 | 1.1 | % | $ | 137,757 | 1.1 | % | $ | 56,574 | 0.5 | % | $ | 12,543,281 | |||||||||||||
Reserve for Unfunded Commitments (2) | |||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Balance at beginning of period | $ | 13,157 | $ | 12,650 | $ | 12,274 | $ | 9,844 | $ | 9,363 | |||||||||
| Provision for unfunded commitments | 2,048 | 507 | 376 | 2,514 | 481 | ||||||||||||||
| Recovery (charge-off) of unfunded commitments | 4 | — | — | (84 | ) | — | |||||||||||||
| Balance at end of period | $ | 15,209 | $ | 13,157 | $ | 12,650 | $ | 12,274 | $ | 9,844 | |||||||||
| Unfunded commitments, excluding covered assets, at period end | $ | 6,310,701 | $ | 6,135,242 | $ | 6,229,242 | $ | 6,041,301 | $ | 5,365,042 | |||||||||
(1) | Refer to Glossary of Terms for definition. |
(2) | Unfunded commitments include commitments to extend credit, standby letters of credit and commercial letters of credit. Unfunded commitments related to covered assets are excluded as they are covered under a loss sharing agreement with the FDIC. |
| * | Less than 0.1%. |
14
Allowance for Loan Losses (excluding covered assets (1)) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | |||||||||||||||
| Change in allowance for loan losses: | |||||||||||||||||||
| Balance at beginning of period | $ | 157,051 | $ | 156,610 | $ | 152,498 | $ | 150,135 | $ | 146,491 | |||||||||
| Loans charged-off: | |||||||||||||||||||
| Commercial | (661 | ) | (2,921 | ) | (2,202 | ) | (1,732 | ) | (227 | ) | |||||||||
| Commercial real estate | (175 | ) | (98 | ) | (887 | ) | (417 | ) | (1,133 | ) | |||||||||
| Construction | — | — | — | 1 | (7 | ) | |||||||||||||
| Residential real estate | (97 | ) | (194 | ) | (37 | ) | (847 | ) | (252 | ) | |||||||||
| Home equity | (85 | ) | — | (371 | ) | (130 | ) | (172 | ) | ||||||||||
| Personal | (6 | ) | (28 | ) | (10 | ) | (7 | ) | (8 | ) | |||||||||
| Total charge-offs | (1,024 | ) | (3,241 | ) | (3,507 | ) | (3,132 | ) | (1,799 | ) | |||||||||
| Recoveries on loans previously charged-off: | |||||||||||||||||||
| Commercial | 2,115 | 984 | 511 | 720 | 1,145 | ||||||||||||||
| Commercial real estate | 134 | 272 | 598 | 270 | 356 | ||||||||||||||
| Construction | 10 | 164 | 19 | 57 | 6 | ||||||||||||||
| Residential real estate | 198 | 47 | 57 | 231 | 9 | ||||||||||||||
| Home equity | 50 | 73 | 70 | 73 | 67 | ||||||||||||||
| Personal | 131 | 86 | 873 | 167 | 128 | ||||||||||||||
| Total recoveries | 2,638 | 1,626 | 2,128 | 1,518 | 1,711 | ||||||||||||||
| Net recoveries (charge-offs) | 1,614 | (1,615 | ) | (1,379 | ) | (1,614 | ) | (88 | ) | ||||||||||
| Provisions charged to operating expenses | 4,203 | 2,056 | 5,491 | 3,977 | 3,732 | ||||||||||||||
| Balance at end of period | $ | 162,868 | $ | 157,051 | $ | 156,610 | $ | 152,498 | $ | 150,135 | |||||||||
| Allocation of allowance for loan losses: | |||||||||||||||||||
| General allocated reserve: | |||||||||||||||||||
| Commercial | $ | 115,543 | $ | 110,255 | $ | 98,230 | $ | 91,975 | $ | 89,904 | |||||||||
| Commercial real estate | 24,836 | 26,108 | 29,405 | 29,397 | 27,164 | ||||||||||||||
| Construction | 4,397 | 3,816 | 4,026 | 4,290 | 4,029 | ||||||||||||||
| Residential real estate | 3,772 | 4,651 | 4,793 | 4,581 | 4,515 | ||||||||||||||
| Home equity | 2,713 | 2,750 | 2,296 | 3,069 | 3,025 | ||||||||||||||
| Personal | 2,535 | 2,003 | 2,224 | 2,559 | 2,517 | ||||||||||||||
| Total allocated | 153,796 | 149,583 | 140,974 | 135,871 | 131,154 | ||||||||||||||
| Specific reserve | 9,072 | 7,468 | 15,636 | 16,627 | 18,981 | ||||||||||||||
| Total | $ | 162,868 | $ | 157,051 | $ | 156,610 | $ | 152,498 | $ | 150,135 | |||||||||
| Allocation of reserve by a percent of total allowance for loan losses: | |||||||||||||||||||
| General allocated reserve: | |||||||||||||||||||
| Commercial | 70 | % | 70 | % | 63 | % | 60 | % | 59 | % | |||||||||
| Commercial real estate | 15 | % | 17 | % | 19 | % | 19 | % | 18 | % | |||||||||
| Construction | 3 | % | 2 | % | 3 | % | 3 | % | 3 | % | |||||||||
| Residential real estate | 2 | % | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||
| Home equity | 2 | % | 2 | % | 1 | % | 2 | % | 2 | % | |||||||||
| Personal | 2 | % | 1 | % | 1 | % | 2 | % | 2 | % | |||||||||
| Total allocated | 94 | % | 95 | % | 90 | % | 89 | % | 87 | % | |||||||||
| Specific reserve | 6 | % | 5 | % | 10 | % | 11 | % | 13 | % | |||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
| Allowance for loan losses to: | |||||||||||||||||||
| Total loans | 1.25 | % | 1.25 | % | 1.29 | % | 1.28 | % | 1.30 | % | |||||||||
| Nonperforming loans | 370 | % | 278 | % | 221 | % | 226 | % | 204 | % | |||||||||
(1) | Refer to Glossary of Terms for definition. |
15
| Deposits | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||
| 9/30/15 | % of Total | 6/30/15 | % of Total | 3/31/15 | % of Total | 12/31/14 | % of Total | 9/30/14 | % of Total | |||||||||||||||||||||||||
| Unaudited | Unaudited | Unaudited | Audited | Unaudited | ||||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 4,068,816 | 29 | % | $ | 3,702,377 | 28 | % | $ | 3,936,181 | 28 | % | $ | 3,516,695 | 27 | % | $ | 3,342,862 | 26 | % | ||||||||||||||
| Interest-bearing demand deposits | 1,264,201 | 9 | % | 1,304,270 | 10 | % | 1,498,810 | 11 | % | 1,907,320 | 15 | % | 1,433,429 | 11 | % | |||||||||||||||||||
| Savings deposits | 356,694 | 3 | % | 329,258 | 2 | % | 331,796 | 2 | % | 319,100 | 2 | % | 310,850 | 2 | % | |||||||||||||||||||
| Money market accounts | 5,892,791 | 42 | % | 5,663,030 | 42 | % | 5,824,535 | 41 | % | 4,851,925 | 37 | % | 5,058,016 | 39 | % | |||||||||||||||||||
| Time deposits | 2,315,237 | 17 | % | 2,390,001 | 18 | % | 2,510,406 | 18 | % | 2,494,928 | 19 | % | 2,704,047 | 22 | % | |||||||||||||||||||
| Total deposits | $ | 13,897,739 | 100 | % | $ | 13,388,936 | 100 | % | $ | 14,101,728 | 100 | % | $ | 13,089,968 | 100 | % | $ | 12,849,204 | 100 | % | ||||||||||||||
Total new deposits from new clients (1) | $ | 356,399 | $ | 251,361 | $ | 302,849 | $ | 330,000 | $ | 269,176 | ||||||||||||||||||||||||
(1) | Amounts are unaudited. |
| Brokered Deposit Composition | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| 9/30/15 | 6/30/15 | 3/31/15 | 12/31/14 | 9/30/14 | ||||||||||||||||
| Noninterest-bearing demand deposits | $ | 371,675 | $ | 231,193 | $ | 264,493 | $ | 107,564 | $ | 104,957 | ||||||||||
| Interest-bearing demand deposits | 266,133 | 304,876 | 323,094 | 641,466 | 415,953 | |||||||||||||||
| Money market accounts | 1,903,413 | 1,926,246 | 1,891,590 | 1,448,663 | 1,545,778 | |||||||||||||||
| Time deposits: | ||||||||||||||||||||
| Traditional | 576,859 | 624,137 | 673,944 | 564,116 | 663,393 | |||||||||||||||
CDARS (1) | 228,436 | 348,073 | 458,192 | 521,995 | 597,449 | |||||||||||||||
| Other | 87,463 | 90,438 | 87,732 | 82,714 | 101,408 | |||||||||||||||
| Total time deposits | 892,758 | 1,062,648 | 1,219,868 | 1,168,825 | 1,362,250 | |||||||||||||||
| Total brokered deposits | $ | 3,433,979 | $ | 3,524,963 | $ | 3,699,045 | $ | 3,366,518 | $ | 3,428,938 | ||||||||||
| Brokered deposits as a % of total deposits | 25 | % | 26 | % | 26 | % | 26 | % | 27 | % | ||||||||||
(1) | The CDARS® deposit program is a deposit services arrangement that effectively achieves FDIC deposit insurance for jumbo deposit relationships. |
16
| Net Interest Margin | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||
| September 30, 2015 | June 30, 2015 | September 30, 2014 | ||||||||||||||||||||||||||||||||
Average Balance | Interest (1) | Yield/ Rate | Average Balance | Interest (1) | Yield/ Rate | Average Balance | Interest (1) | Yield/ Rate | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||
| Federal funds sold and interest-bearing deposits in banks | $ | 270,278 | $ | 168 | 0.24 | % | $ | 393,761 | $ | 245 | 0.25 | % | $ | 230,829 | $ | 142 | 0.24 | % | ||||||||||||||||
| Securities: | ||||||||||||||||||||||||||||||||||
| Taxable | 2,440,779 | 13,599 | 2.23 | % | 2,396,003 | 13,541 | 2.26 | % | 2,272,066 | 13,370 | 2.35 | % | ||||||||||||||||||||||
Tax-exempt (2) | 424,003 | 3,313 | 3.13 | % | 383,514 | 3,017 | 3.15 | % | 291,172 | 2,340 | 3.22 | % | ||||||||||||||||||||||
| Total securities | 2,864,782 | 16,912 | 2.36 | % | 2,779,517 | 16,558 | 2.38 | % | 2,563,238 | 15,710 | 2.45 | % | ||||||||||||||||||||||
| FHLB stock | 25,907 | 69 | 1.04 | % | 26,415 | 63 | 0.94 | % | 28,666 | 48 | 0.65 | % | ||||||||||||||||||||||
| Loans, excluding covered assets: | ||||||||||||||||||||||||||||||||||
| Commercial | 8,561,067 | 92,139 | 4.21 | % | 8,426,836 | 88,317 | 4.15 | % | 7,751,264 | 85,516 | 4.32 | % | ||||||||||||||||||||||
| Commercial real estate | 3,108,679 | 29,039 | 3.66 | % | 2,916,389 | 27,019 | 3.67 | % | 2,556,825 | 23,447 | 3.59 | % | ||||||||||||||||||||||
| Construction | 442,331 | 4,493 | 3.97 | % | 392,676 | 4,036 | 4.07 | % | 380,876 | 3,856 | 3.96 | % | ||||||||||||||||||||||
| Residential | 446,783 | 3,959 | 3.54 | % | 415,942 | 3,541 | 3.40 | % | 362,297 | 3,240 | 3.58 | % | ||||||||||||||||||||||
| Personal and home equity | 301,449 | 2,237 | 2.94 | % | 320,661 | 2,457 | 3.07 | % | 340,163 | 2,520 | 2.94 | % | ||||||||||||||||||||||
Total loans, excluding covered assets (3) | 12,860,309 | 131,867 | 4.02 | % | 12,472,504 | 125,370 | 3.98 | % | 11,391,425 | 118,579 | 4.08 | % | ||||||||||||||||||||||
Covered assets (4) | 29,322 | 239 | 3.23 | % | 30,939 | 277 | 3.61 | % | 69,762 | 632 | 3.56 | % | ||||||||||||||||||||||
Total interest-earning assets (2) | 16,050,598 | $ | 149,255 | 3.65 | % | 15,703,136 | $ | 142,513 | 3.60 | % | 14,283,920 | $ | 135,111 | 3.72 | % | |||||||||||||||||||
| Cash and due from banks | 172,742 | 173,915 | 153,849 | |||||||||||||||||||||||||||||||
| Allowance for loan and covered loan losses | (167,173 | ) | (164,844 | ) | (156,632 | ) | ||||||||||||||||||||||||||||
| Other assets | 486,158 | 496,560 | 465,897 | |||||||||||||||||||||||||||||||
| Total assets | $ | 16,542,325 | $ | 16,208,767 | $ | 14,747,034 | ||||||||||||||||||||||||||||
Liabilities and Equity : | ||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,411,434 | $ | 937 | 0.26 | % | $ | 1,428,497 | $ | 966 | 0.27 | % | $ | 1,191,688 | $ | 918 | 0.31 | % | ||||||||||||||||
| Savings deposits | 342,568 | 370 | 0.43 | % | 330,092 | 322 | 0.39 | % | 286,807 | 215 | 0.30 | % | ||||||||||||||||||||||
| Money market accounts | 5,829,378 | 4,749 | 0.32 | % | 5,879,152 | 4,631 | 0.32 | % | 4,934,436 | 3,958 | 0.32 | % | ||||||||||||||||||||||
| Time deposits | 2,302,743 | 5,782 | 1.00 | % | 2,437,037 | 5,730 | 0.94 | % | 2,706,474 | 5,723 | 0.84 | % | ||||||||||||||||||||||
| Total interest-bearing deposits | 9,886,123 | 11,838 | 0.48 | % | 10,074,778 | 11,649 | 0.46 | % | 9,119,405 | 10,814 | 0.47 | % | ||||||||||||||||||||||
| Short-term and secured borrowings | 143,436 | 24 | 0.07 | % | 327,226 | 234 | 0.28 | % | 66,439 | 158 | 0.93 | % | ||||||||||||||||||||||
| Long-term debt | 694,788 | 5,048 | 2.89 | % | 452,480 | 4,972 | 4.39 | % | 630,706 | 6,570 | 4.16 | % | ||||||||||||||||||||||
| Total interest-bearing liabilities | 10,724,347 | 16,910 | 0.63 | % | 10,854,484 | 16,855 | 0.62 | % | 9,816,550 | 17,542 | 0.71 | % | ||||||||||||||||||||||
| Noninterest-bearing demand deposits | 4,039,259 | 3,637,010 | 3,381,787 | |||||||||||||||||||||||||||||||
| Other liabilities | 152,737 | 145,377 | 122,424 | |||||||||||||||||||||||||||||||
| Equity | 1,625,982 | 1,571,896 | 1,426,273 | |||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 16,542,325 | $ | 16,208,767 | $ | 14,747,034 | ||||||||||||||||||||||||||||
Net interest spread (2)(5) | 3.02 | % | 2.98 | % | 3.01 | % | ||||||||||||||||||||||||||||
| Contribution of noninterest-bearing sources of funds | 0.21 | % | 0.19 | % | 0.22 | % | ||||||||||||||||||||||||||||
Net interest income/margin (2)(5) | 132,345 | 3.23 | % | 125,658 | 3.17 | % | 117,569 | 3.23 | % | |||||||||||||||||||||||||
| Less: tax equivalent adjustment | 1,136 | 1,036 | 811 | |||||||||||||||||||||||||||||||
| Net interest income, as reported | $ | 131,209 | $ | 124,622 | $ | 116,758 | ||||||||||||||||||||||||||||
(1) | Interest income included $8.0 million, $6.3 million, and $7.7 million in loan fees for the three months ended September 30, 2015, June 30, 2015 and September 30, 2014, 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) | Includes loans held-for-sale and nonaccrual loans. Average loans on a nonaccrual basis for the recognition of interest income totaled $49.3 million, $63.7 million, and $76.9 million for the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, respectively. Interest foregone on impaired loans was estimated to be approximately $481,000, $613,000 and $763,000 for the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, respectively, calculated based on the average loan portfolio yield for the respective period. |
(4) | Covered interest-earning assets consist of loans acquired through a FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. |
(5) | Refer to Glossary of Terms for definition. |
17
| Net Interest Margin | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||
| 2015 | 2014 | ||||||||||||||||||||
| Average Balance | Interest (1) | Yield / Rate | Average Balance | Interest (1) | Yield / Rate | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Federal funds sold and interest-bearing deposits in banks | $ | 361,076 | $ | 674 | 0.25 | % | $ | 229,749 | $ | 423 | 0.24 | % | |||||||||
| Securities: | |||||||||||||||||||||
| Taxable | 2,400,121 | 40,696 | 2.26 | % | 2,267,303 | 40,250 | 2.37 | % | |||||||||||||
Tax-exempt (2) | 385,403 | 9,080 | 3.14 | % | 275,257 | 6,845 | 3.32 | % | |||||||||||||
| Total securities | 2,785,524 | 49,776 | 2.38 | % | 2,542,560 | 47,095 | 2.47 | % | |||||||||||||
| FHLB stock | 26,985 | 180 | 0.88 | % | 29,190 | 140 | 0.63 | % | |||||||||||||
| Loans, excluding covered assets: | |||||||||||||||||||||
| Commercial | 8,363,221 | 265,448 | 4.19 | % | 7,476,056 | 245,097 | 4.32 | % | |||||||||||||
| Commercial real estate | 2,971,554 | 83,643 | 3.71 | % | 2,505,395 | 67,588 | 3.56 | % | |||||||||||||
| Construction | 408,077 | 12,327 | 3.98 | % | 358,370 | 10,545 | 3.88 | % | |||||||||||||
| Residential | 416,499 | 10,987 | 3.52 | % | 353,999 | 9,819 | 3.70 | % | |||||||||||||
| Personal and home equity | 321,250 | 7,176 | 2.99 | % | 352,512 | 8,020 | 3.04 | % | |||||||||||||
Total loans, excluding covered assets (3) | 12,480,601 | 379,581 | 4.01 | % | 11,046,332 | 341,069 | 4.07 | % | |||||||||||||
Covered assets (4) | 31,008 | 874 | 3.77 | % | 83,188 | 2,037 | 3.24 | % | |||||||||||||
Total interest-earning assets (2) | 15,685,194 | $ | 431,085 | 3.62 | % | 13,931,019 | $ | 390,764 | 3.71 | % | |||||||||||
| Cash and due from banks | 172,667 | 149,605 | |||||||||||||||||||
| Allowance for loan and covered loan losses | (164,213 | ) | (162,056 | ) | |||||||||||||||||
| Other assets | 489,772 | 478,740 | |||||||||||||||||||
| Total assets | $ | 16,183,420 | $ | 14,397,308 | |||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,454,272 | $ | 2,909 | 0.27 | % | $ | 1,227,924 | $ | 2,702 | 0.29 | % | |||||||||
| Savings deposits | 332,820 | 1,004 | 0.40 | % | 285,678 | 605 | 0.28 | % | |||||||||||||
| Money market accounts | 5,749,974 | 13,678 | 0.32 | % | 4,848,405 | 11,629 | 0.32 | % | |||||||||||||
| Time deposits | 2,432,329 | 17,151 | 0.94 | % | 2,615,772 | 15,563 | 0.80 | % | |||||||||||||
| Total interest-bearing deposits | 9,969,395 | 34,742 | 0.47 | % | 8,977,779 | 30,499 | 0.45 | % | |||||||||||||
| Short-term and secured borrowings | 248,679 | 455 | 0.24 | % | 51,782 | 495 | 1.26 | % | |||||||||||||
| Long-term debt | 498,634 | 14,948 | 3.99 | % | 628,749 | 19,554 | 4.13 | % | |||||||||||||
| Total interest-bearing liabilities | 10,716,708 | 50,145 | 0.62 | % | 9,658,310 | 50,548 | 0.70 | % | |||||||||||||
| Noninterest-bearing demand deposits | 3,744,778 | 3,229,517 | |||||||||||||||||||
| Other liabilities | 148,128 | 129,059 | |||||||||||||||||||
| Equity | 1,573,806 | 1,380,422 | |||||||||||||||||||
| Total liabilities and equity | $ | 16,183,420 | $ | 14,397,308 | |||||||||||||||||
Net interest spread (2)(5) | 3.00 | % | 3.01 | % | |||||||||||||||||
| Contribution of noninterest-bearing sources of funds | 0.20 | % | 0.21 | % | |||||||||||||||||
Net interest income/margin (2)(5) | 380,940 | 3.20 | % | 340,216 | 3.22 | % | |||||||||||||||
| Less: tax-equivalent adjustment | 3,116 | 2,355 | |||||||||||||||||||
| Net interest income, as reported | $ | 377,824 | $ | 337,861 | |||||||||||||||||
(1) | Interest income included $21.7 million and $20.4 million in loan fees for the nine months ended September 30, 2015 and 2014, 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) | Includes loans held-for-sale and nonaccrual loans. Average loans on a nonaccrual basis for the recognition of interest income totaled $60.2 million and $85.6 million for the nine months ended September 30, 2015 and 2014, respectively. Interest foregone on impaired loans was estimated to be approximately $1.8 million and $2.5 million for the nine months ended September 30, 2015 and 2014, respectively, calculated based on the average loan portfolio yield for the respective period. |
(4) | Covered interest-earning assets consist of loans acquired through a FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset. |
(5) | Refer to Glossary of Terms for definition. |
18
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, adjusted net income, net interest margin, net revenue, operating profit, and efficiency ratio all on a fully taxable-equivalent basis, return on average tangible common equity, common equity Tier 1 ratio (prior to 2015), tangible common 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 may 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, tangible common 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 similar companies. However, because there are no standardized definitions for these ratios, our calculations may not be comparable with other companies. For the periods prior to January 1, 2015, the common equity Tier 1 ratio contained herein was calculated without giving effect to the final Basel III capital rules.
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.
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Non-U.S. GAAP Financial Measures
(Dollars in thousands)
(Unaudited)
The following table reconciles non-U.S. GAAP financial measures to U.S. GAAP.
| Three Months Ended | |||||||||||||||||||
| 2015 | 2014 | ||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
| Taxable-equivalent net interest income | |||||||||||||||||||
| U.S. GAAP net interest income | $ | 131,209 | $ | 124,622 | $ | 121,993 | $ | 116,876 | $ | 116,758 | |||||||||
| Taxable-equivalent adjustment | 1,136 | 1,036 | 944 | 878 | 811 | ||||||||||||||
Taxable-equivalent net interest income (a) | $ | 132,345 | $ | 125,658 | $ | 122,937 | $ | 117,754 | $ | 117,569 | |||||||||
Average Earning Assets (b) | $ | 16,050,598 | $ | 15,703,136 | $ | 15,293,533 | $ | 15,022,425 | $ | 14,283,920 | |||||||||
Net Interest Margin ((a) annualized) / (b) | 3.23 | % | 3.17 | % | 3.21 | % | 3.07 | % | 3.23 | % | |||||||||
| Net Revenue | |||||||||||||||||||
| Taxable-equivalent net interest income | $ | 132,345 | $ | 125,658 | $ | 122,937 | $ | 117,754 | $ | 117,569 | |||||||||
| U.S. GAAP non-interest income | 30,789 | 33,059 | 33,516 | 30,426 | 30,669 | ||||||||||||||
Net revenue (c) | $ | 163,134 | $ | 158,717 | $ | 156,453 | $ | 148,180 | $ | 148,238 | |||||||||
| Operating Profit | |||||||||||||||||||
| U.S. GAAP income before income taxes | $ | 72,626 | $ | 73,668 | $ | 66,718 | $ | 60,157 | $ | 65,701 | |||||||||
| Provision for loan and covered loan losses | 4,197 | 2,116 | 5,646 | 4,120 | 3,890 | ||||||||||||||
| Taxable-equivalent adjustment | 1,136 | 1,036 | 944 | 878 | 811 | ||||||||||||||
| Operating profit | $ | 77,959 | $ | 76,820 | $ | 73,308 | $ | 65,155 | $ | 70,402 | |||||||||
| Efficiency Ratio | |||||||||||||||||||
U.S. GAAP non-interest expense (d) | $ | 85,175 | $ | 81,897 | $ | 83,145 | $ | 83,025 | $ | 77,836 | |||||||||
| Net revenue | $ | 163,134 | $ | 158,717 | $ | 156,453 | $ | 148,180 | $ | 148,238 | |||||||||
Efficiency ratio (d) / (c) | 52.21 | % | 51.60 | % | 53.14 | % | 56.03 | % | 52.51 | % | |||||||||
| Adjusted Net Income | |||||||||||||||||||
| U.S. GAAP net income available to common stockholders | $ | 45,268 | $ | 46,422 | $ | 41,484 | $ | 37,223 | $ | 40,527 | |||||||||
| Amortization of intangibles, net of tax | 353 | 398 | 397 | 449 | 458 | ||||||||||||||
Adjusted net income (e) | $ | 45,621 | $ | 46,820 | $ | 41,881 | $ | 37,672 | $ | 40,985 | |||||||||
| Average Tangible Common Equity | |||||||||||||||||||
| U.S. GAAP average total equity | $ | 1,625,982 | $ | 1,571,896 | $ | 1,522,401 | $ | 1,472,111 | $ | 1,426,273 | |||||||||
| Less: average goodwill | 94,041 | 94,041 | 94,041 | 94,041 | 94,041 | ||||||||||||||
| Less: average other intangibles | 4,291 | 4,897 | 5,551 | 6,243 | 6,996 | ||||||||||||||
Average tangible common equity (f) | $ | 1,527,650 | $ | 1,472,958 | $ | 1,422,809 | $ | 1,371,827 | $ | 1,325,236 | |||||||||
Return on average tangible common equity ((e) annualized) / (f) | 11.85 | % | 12.75 | % | 11.94 | % | 10.89 | % | 12.27 | % | |||||||||
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Non-U.S. GAAP Financial Measures (continued)
(Dollars in thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||
| 2015 | 2014 | ||||||
| Taxable-equivalent net interest income | |||||||
| U.S. GAAP net interest income | $ | 377,824 | $ | 337,861 | |||
| Taxable-equivalent adjustment | 3,116 | 2,355 | |||||
Taxable-equivalent net interest income (a) | $ | 380,940 | $ | 340,216 | |||
Average Earning Assets (b) | $ | 15,685,194 | $ | 13,931,019 | |||
Net Interest Margin ((a) annualized) / (b) | 3.20 | % | 3.22 | % | |||
| Net Revenue | |||||||
| Taxable-equivalent net interest income | $ | 380,940 | $ | 340,216 | |||
| U.S. GAAP non-interest income | 97,364 | 87,164 | |||||
Net revenue (c) | $ | 478,304 | $ | 427,380 | |||
| Operating Profit | |||||||
| U.S. GAAP income before income taxes | $ | 213,012 | $ | 188,050 | |||
| Provision for loan and covered loan losses | 11,959 | 7,924 | |||||
| Taxable-equivalent adjustment | 3,116 | 2,355 | |||||
| Operating profit | $ | 228,087 | $ | 198,329 | |||
| Efficiency Ratio | |||||||
U.S. GAAP non-interest expense (d) | $ | 250,217 | $ | 229,051 | |||
| Net revenue | $ | 478,304 | $ | 427,380 | |||
Efficiency ratio (d) / (c) | 52.31 | % | 53.59 | % | |||
| Adjusted Net Income | |||||||
| U.S. GAAP net income available to common stockholders | $ | 133,174 | $ | 115,856 | |||
| Amortization of intangibles, net of tax | 1,148 | 1,374 | |||||
Adjusted net income (e) | $ | 134,322 | $ | 117,230 | |||
| Average Tangible Common Equity | |||||||
| U.S. GAAP average total equity | $ | 1,573,806 | $ | 1,380,422 | |||
| Less: average goodwill | 94,041 | 94,041 | |||||
| Less: average other intangibles | 4,908 | 7,745 | |||||
Average tangible common equity (f) | $ | 1,474,857 | $ | 1,278,636 | |||
Return on average tangible common equity ((e) annualized) / (f) | 12.18 | % | 12.29 | % | |||
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Non-U.S. GAAP Financial Measures (continued)
(Dollars in thousands)
(Unaudited)
| 2014 | |||||||||||||||||||
| December 31 | September 30 | ||||||||||||||||||
| Common Equity Tier 1 | |||||||||||||||||||
| U.S. GAAP total equity | $ | 1,481,679 | $ | 1,435,309 | |||||||||||||||
| Trust preferred securities | 169,788 | 244,793 | |||||||||||||||||
| Less: accumulated other comprehensive income, net of tax | 20,917 | 16,236 | |||||||||||||||||
| Less: goodwill | 94,041 | 94,041 | |||||||||||||||||
| Less: other intangibles | 5,885 | 6,627 | |||||||||||||||||
| Less: disallowed servicing rights | 44 | 42 | |||||||||||||||||
| Tier 1 risk-based capital | 1,530,580 | 1,563,156 | |||||||||||||||||
| Less: trust preferred securities | 169,788 | 244,793 | |||||||||||||||||
Common equity Tier 1 (g) | $ | 1,360,792 | $ | 1,318,363 | |||||||||||||||
| 2015 | 2014 | ||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||
| Tangible Common Equity | |||||||||||||||||||
| U.S. GAAP total equity | $ | 1,647,999 | $ | 1,584,796 | $ | 1,539,429 | $ | 1,481,679 | $ | 1,435,309 | |||||||||
| Less: goodwill | 94,041 | 94,041 | 94,041 | 94,041 | 94,041 | ||||||||||||||
| Less: other intangibles | 4,008 | 4,586 | 5,230 | 5,885 | 6,627 | ||||||||||||||
Tangible common equity (h) | $ | 1,549,950 | $ | 1,486,169 | $ | 1,440,158 | $ | 1,381,753 | $ | 1,334,641 | |||||||||
| Tangible Assets | |||||||||||||||||||
| U.S. GAAP total assets | $ | 16,894,605 | $ | 16,225,895 | $ | 16,361,348 | $ | 15,603,382 | $ | 15,190,468 | |||||||||
| Less: goodwill | 94,041 | 94,041 | 94,041 | 94,041 | 94,041 | ||||||||||||||
| Less: other intangibles | 4,008 | 4,586 | 5,230 | 5,885 | 6,627 | ||||||||||||||
Tangible assets (i) | $ | 16,796,556 | $ | 16,127,268 | $ | 16,262,077 | $ | 15,503,456 | $ | 15,089,800 | |||||||||
Risk-weighted Assets (j) | $ | 16,362,816 | $ | 15,706,019 | $ | 15,395,081 | $ | 14,592,655 | $ | 14,053,735 | |||||||||
Period-end Common Shares Outstanding (k) | 78,863 | 78,717 | 78,494 | 78,178 | 78,121 | ||||||||||||||
| Ratios: | |||||||||||||||||||
Common equity Tier 1 ratio (g) / (j) (1) | — | — | — | 9.33 | % | 9.38 | % | ||||||||||||
Tangible common equity to risk-weighted assets (h) / (j) | 9.47 | % | 9.46 | % | 9.35 | % | 9.47 | % | 9.50 | % | |||||||||
Tangible common equity to tangible assets (h) / (i) | 9.23 | % | 9.22 | % | 8.86 | % | 8.91 | % | 8.84 | % | |||||||||
Tangible book value (h) / (k) | $ | 19.65 | $ | 18.88 | $ | 18.35 | $ | 17.67 | $ | 17.08 | |||||||||
(1) Effective January 1, 2015, the common equity Tier 1 ratio became a required regulatory capital measure and is calculated in accordance with the new capital rules. For the periods prior to January 1, 2015, this ratio is considered a Non-GAAP measure and was calculated without giving effect to the final Basel III capital rules.
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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.
Common equity - Total equity less preferred stock.
Common equity Tier 1 - Tier 1 risk-based capital, as defined by the Board of Governors of the Federal Reserve System in effect as of the respective reporting periods, less preferred equity, less trust preferred securities, and less noncontrolling interests.
Common equity Tier 1 to risk-weighted assets ratio - Common equity Tier 1 divided by period-end risk-weighted assets as defined by the Board of Governors of the Federal Reserve System in effect as of the respective reporting periods.
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 circumstances warrant.
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 taxable-equivalent net interest income 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.
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.
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Glossary of Terms (continued)
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 to assets and off-balance sheet instruments determined in accordance with the applicable regulations of the Board of Governors of the Federal Reserve System in effect as of the respective reporting periods.
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 equity to risk-weighted assets ratio - Tier 1 risk-based capital divided by period-end risk-weighted assets as defined by the Board of Governors of the Federal Reserve System in effect as of the respective reporting periods.
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 securities; less goodwill and certain other intangible assets, 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 interests 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.
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