Exhibit 99.1
For further information:
Media Contact:
Amy Yuhn
312-564-1378
ayuhn@theprivatebank.com
Investor Relations Contact:
Beth Coronelli
312-564-6052
bcoronelli@theprivatebank.com
For Immediate Release
PrivateBancorp Reports First Quarter 2011 Results
Net income of $0.10 per share; Commercial middle market strategy continues to reshape business
CHICAGO, April 26, 2011 – PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income available to common shareholders of $7.5 million, or $0.10 per diluted share, for the first quarter 2011, compared to a net loss available to common shareholders of $24.3 million, or $0.35 per diluted share, for the first quarter 2010, and net income available to common shareholders of $8.5 million, or $0.12 per diluted share for the fourth quarter 2010.
“Today we reported our third-consecutive profitable quarter and our core business is performing well, with 26 percent growth in operating profit compared to a year ago,” said Larry D. Richman, President & Chief Executive Officer, PrivateBancorp, Inc. “We have increased total commercial loans by 18 percent from first quarter 2010 and decreased commercial real estate and construction loans by 15 percent as we continue to reshape our portfolio. We are making steady progress in improving our overall credit quality as demonstrated by our ongoing reduction in non-performing loans. I am pleased by our success in attracting new clients as well as expanding existing relationships, as this contributes to our improving bottom line results.”
First Quarter Results
| • | Net revenue increased 11 percent to $127.0 million, compared to $114.3 million for the first quarter of 2010, and decreased 7 percent from $136.1 million in the fourth quarter 2010, which included $9.3 million of securities gains. |
| • | Operating profit increased 26 percent to $51.6 million, compared to $40.9 million for the first quarter of 2010 and was down $2.3 million from $53.9 million in fourth quarter 2010. |
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| • | Net interest margin increased to 3.46 percent for the first quarter 2011, compared to 3.33 percent in the first and fourth quarters of 2010. Net interest income increased to $102.6 million in the first quarter. |
| • | Non-performing assets at quarter-end were down slightly from year-end to $450.7 million. Non-performing loans decreased $8.9 million and other real estate owned (OREO) increased $5.0 million. The allowance for loan losses declined to $218.2 million at quarter-end, or 2.41 percent of total loans. |
| • | Total loans at March 31, 2011, were $9.0 billion, up nearly 2 percent from a year ago and relatively flat compared to year-end. Commercial and industrial loans now comprise 56 percent of the loan portfolio. |
| • | First quarter 2011 results included a $2.8 million, or $0.04 per share, positive one-time adjustment related to the revaluation of the deferred tax asset as a result of the increase in the Illinois corporate tax rate. |
Operating Performance
The ongoing transformation to serve the commercial middle market has driven improved revenue and operating profit as the Company has added new clients, expanded relationships with existing clients through cross-sell and exited less profitable relationships that are no longer consistent with its strategy. The net interest margin has increased 13 basis points over the first and fourth quarters of 2010, benefiting from the effect of lower cost of funds and the changing loan mix. With a continued emphasis on building client relationships, there was steady growth in treasury management income, higher trust and investment fees and increased syndication revenues, offset by lower capital markets activity in the first quarter.
Net revenue was $127.0 million in the first quarter 2011, compared to $114.3 million in the first quarter 2010 and $136.1 million in the fourth quarter 2010. Operating profit was $51.6 million in the first quarter 2011, compared to $40.9 million in the first quarter 2010 and $53.9 million in the fourth quarter 2010. The fourth quarter 2010 results included net securities gains of $9.3 million, compared to $367,000 of net securities gains in the first quarter 2011 and $29,000 in the first quarter of 2010.
Net interest income was $102.6 million for the first quarter 2011, compared to $98.3 million for the first quarter 2010 and $100.3 million in the fourth quarter 2010. Net interest margin increased to 3.46 percent for the first quarter 2011, up from 3.33 percent in both the first quarter 2010 and the fourth quarter 2010. Excluding covered asset accretion, the net interest margin was 3.41 percent for the first quarter 2011, compared to 3.08 percent in the first quarter 2010 and 3.28 percent in the fourth quarter 2010.
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Non-interest income was $23.6 million in the first quarter 2011, compared to $15.1 million in the first quarter 2010 and $34.9 million in the fourth quarter 2010. Treasury management income was up 32 percent from the first quarter 2010 and 3 percent from the fourth quarter 2010, with increased volumes and strong demand deposit levels. Trust and investment fee income increased 5 percent from first quarter 2010 and was up 2 percent from the fourth quarter 2010, reflecting client acquisition. Capital markets revenue, including the credit valuation adjustment, was $4.5 million in the first quarter, up from $278,000 in the first quarter 2010, and down from $6.8 million in the fourth quarter 2010. Capital markets demand, which was higher in the fourth quarter 2010, fluctuates depending on clients’ interest rate outlook. Loan and credit-related fees in the first quarter increased to $5.9 million, with growth in syndication revenue.
Mortgage banking income was $1.4 million for the first quarter 2011, compared to $2.1 million for the first quarter 2010 and $3.5 million for the fourth quarter 2010. First quarter mortgage origination volumes were down from 2010 levels due to prevailing market conditions.
Expenses
Non-interest expense decreased 8 percent in first quarter 2011, as compared to fourth quarter 2010, primarily due to a lower loan and collection expense, provision for unfunded commitments, deposit insurance costs, and professional fees. Non-interest expense was $75.3 million in the first quarter 2011, compared to $73.4 million in the first quarter 2010 and $82.1 million in the fourth quarter 2010.
Income tax expense for the quarter ended March 31, 2011, includes a positive one-time adjustment of $2.8 million relating to the revaluation of the Company’s deferred tax asset. The revaluation was the result of an increase in the Illinois corporate income tax rate that became effective during the quarter.
The efficiency ratio improved to 59.3 percent in the first quarter 2011, compared to 64.2 percent in the first quarter 2010 and 60.4 percent in the fourth quarter 2010.
Credit Quality
Ongoing portfolio management and workout efforts continued to drive improvement in overall credit quality. Special mention loans were down from the fourth quarter. Non-performing assets and non-performing loans declined as non-performing loan inflows were again less than the prior quarter. Consistent with moving problem loans through the workout process, OREO and restructured loans increased in the quarter. The decline in OREO and loan sales compared to the fourth quarter reflects the timing of resolution activity.
The first quarter 2011 provision for loan losses was $36.7 million, excluding covered loan provision, compared to $72.1 million in the first quarter 2010 and $34.5 million in the fourth quarter
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2010. The allowance for loan losses as a percentage of total loans was 2.41 percent at March 31, 2011, compared to 2.66 percent at March 31, 2010, and 2.44 percent at December 31, 2010. The allowance for loan losses as a percentage of non-performing loans was 61 percent at March 31, 2011, compared to 62 percent at March 31, 2010, and 61 percent at December 31, 2010.
Net charge-offs were $41.3 million for the quarter ended March 31, 2011, compared to $56.9 million for the first quarter 2010 and $35.1 million for the fourth quarter 2010.
Non-performing assets totaled $450.7 million at March 31, 2011, compared to $442.0 million at March 31, 2010, and $454.6 million at December 31, 2010. Non-performing assets to total assets were 3.61 percent at March 31, 2011, compared to 3.46 percent at March 31, 2010, and 3.65 percent at December 31, 2010. Non-performing loans were $356.9 million at quarter-end, compared to $381.2 million at the end of first quarter 2010, and $365.9 million at year-end 2010. OREO totaled $93.8 million at March 31, 2011, compared to $60.8 million at March 31, 2010, and $88.7 million at year-end 2010.
Restructured loans accruing interest were $100.9 million at the end of first quarter 2011, compared to $3.8 million at the end of the first quarter 2010 and $87.6 million at the end of fourth quarter 2010. The Company continues to utilize loan restructuring to maximize economic recovery.
Credit quality results exclude $364.4 million in covered assets as of the end of the first quarter, referring to certain assets acquired through an FDIC-assisted transaction that are subject to a loss-sharing agreement, compared to $468.9 million in the first quarter 2010 and $397.2 million in the fourth quarter 2010.
Balance Sheet
The Company continued to reshape the portfolio as commercial and industrial loans increased 18 percent from first quarter 2010 and commercial real estate and construction balances decreased 15 percent. This trend continued in the first quarter 2011 with a $157.3 million increase from the fourth quarter in commercial and industrial loans, and a $183.7 million decrease in commercial real estate and construction loans. Commercial and industrial loans now comprise 56 percent of the total portfolio, compared to 48 percent a year ago. Total loans were relatively flat from year-end with $210.5 million in loans from new relationships offset by payoffs, paydowns, charge-offs and loan sales.
Total loans were $9.0 billion at quarter-end, compared to $8.9 billion at March 31, 2010 and $9.1 billion at December 31, 2010. Total assets were $12.5 billion at March 31, 2011, compared to $12.8 billion at March 31, 2010, and $12.5 billion at December 31, 2010.
Total deposits were $10.6 billion at March 31, 2011, compared to $10.6 billion at March 31, 2010, and $10.5 billion at December 31, 2010. Client deposits were $10.0 billion at the end of the first quarter 2011, compared to $9.9 billion at the end of first quarter 2010 and at December 31, 2010.
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Client deposits at March 31, 2011, included $2.4 billion in non-interest bearing deposits. Overall cost of funds has benefited from favorable changes in the deposit mix, improved pricing and the increase of demand deposits.
The Company’s investment securities portfolio was $1.9 billion at March 31, 2011, compared to $1.8 billion at March 31, 2010, and $1.9 billion at December 31, 2010. Net unrealized gains were $30.5 million, compared to $53.7 million at the end of the first quarter 2010 and $32.0 million at the end of the fourth quarter 2010. The securities portfolio is primarily composed of U.S. government agency backed mortgage pools, agency collateralized mortgage obligations, and investment grade municipal bonds.
Federal funds sold and other short-term investments, primarily cash on deposit with the Federal Reserve, were $621.2 million at the end of the first quarter 2011, compared to $1.1 billion at the end of first quarter 2010 and $541.3 million in the fourth quarter 2010. These levels fluctuate based on the anticipated liquidity needs of our commercial clients.
Capital
As of March 31, 2011, the Company’s total risk-based capital ratio was 14.55 percent, the Tier 1 risk-based capital ratio was 12.41 percent, and the leverage ratio was 10.91 percent. Tier 1 common capital ratio was 7.97 percent and tangible common equity ratio was 7.17 percent at the end of the first quarter 2011.
Quarterly Conference Call and Webcast Presentation
PrivateBancorp will host a conference call on Tuesday, April 26, 2011, 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 #54077150. A live webcast of the call can be accessed on the Company website at www.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 April 30, 2011, by calling (800) 642-1687 (U.S. and Canada) or (706) 645-9291 (International) and entering passcode #54077150.
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 March 31, 2011, the Company had 34 offices in 10 states and $12.5 billion in assets. The Company website is www.theprivatebank.com.
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Forward-Looking Statements
Statements contained 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, but are not limited to: unforeseen credit quality problems or further deterioration in asset quality that could result in charge-offs greater than we have anticipated in our allowance for loan losses; adverse developments impacting one or more large credits; the extent of further deterioration in commercial real estate values in our market areas, particularly in Chicago; difficulties in resolving problem credits or slower than anticipated dispositions of OREO which may result in increased losses or significantly higher credit costs; slower than anticipated economic recovery or further deterioration in economic conditions; weakness in the commercial and industrial sector; unanticipated withdrawals of significant client deposits; lack of sufficient or cost-effective sources of liquidity or funding; the terms and availability of capital when and to the extent necessary or required to repay TARP or otherwise; loss of key personnel or an inability to recruit and retain appropriate talent; potential for significant charges if our deferred tax or goodwill assets suffer impairment; unanticipated changes in interest rates or significant tightening of credit spreads; competitive pricing pressures; uncertainty regarding implications of the Dodd-Frank Act and the rules and regulations to be adopted in connection with implementation of the legislation, including evolving regulatory capital standards; other legislative, regulatory or accounting changes affecting financial services companies and/or the products and services offered by financial services companies; uncertainties related to potential costs associated with pending litigation; or failures or disruptions to our data processing or other information or operational systems. These factors should be considered in evaluating forward-looking statements and undue reliance should not be placed on our forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company assumes no obligation to update publicly any of these statements in light of future events unless required under the federal securities laws.
Non-GAAP Measures
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures. The Company believes that these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the Company, its business, and performance trends and facilitates comparisons with the performance of others in the banking industry. If non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable 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 GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Editor’s Note: Financial highlights attached.
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Quarterly Consolidated Income Statements
Unaudited
(Amounts in thousands except per share data) |  |
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Interest Income | ||||||||||||||||||||
Loans, including fees | $ | 105,647 | $ | 105,375 | $ | 105,608 | $ | 112,839 | $ | 111,062 | ||||||||||
Federal funds sold and other short-term investments | 336 | 366 | 376 | 664 | 544 | |||||||||||||||
Securities: | ||||||||||||||||||||
Taxable | 15,390 | 15,453 | 16,996 | 16,417 | 15,450 | |||||||||||||||
Exempt from Federal income taxes | 1,486 | 1,644 | 1,661 | 1,752 | 1,718 | |||||||||||||||
Total interest income | 122,859 | 122,838 | 124,641 | 131,672 | 128,774 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Interest-bearing demand deposits | 642 | 702 | 675 | 805 | 966 | |||||||||||||||
Savings deposits and money market accounts | 6,662 | 7,437 | 8,512 | 9,368 | 9,114 | |||||||||||||||
Brokered and time deposits | 6,692 | 7,367 | 8,130 | 9,537 | 11,424 | |||||||||||||||
Short-term borrowings | 827 | 962 | 1,297 | 1,383 | 1,446 | |||||||||||||||
Long-term debt | 5,483 | 6,023 | 7,068 | 7,247 | 7,505 | |||||||||||||||
Total interest expense | 20,306 | 22,491 | 25,682 | 28,340 | 30,455 | |||||||||||||||
Net interest income | 102,553 | 100,347 | 98,959 | 103,332 | 98,319 | |||||||||||||||
Provision for loan and covered loan losses | 37,578 | 35,166 | 41,435 | 45,392 | 72,548 | |||||||||||||||
Net interest income after provision for loan and covered loan losses | 64,975 | 65,181 | 57,524 | 57,940 | 25,771 | |||||||||||||||
Non-interest Income | ||||||||||||||||||||
Trust and investments | 4,662 | 4,574 | 4,306 | 4,836 | 4,424 | |||||||||||||||
Mortgage banking | 1,402 | 3,479 | 2,790 | 1,797 | 2,121 | |||||||||||||||
Capital markets products | 4,489 | 6,791 | 3,104 | 4,113 | 278 | |||||||||||||||
Treasury management | 4,751 | 4,625 | 4,406 | 4,281 | 3,608 | |||||||||||||||
Loan and credit related fees | 5,898 | 4,710 | 4,234 | 4,128 | 3,453 | |||||||||||||||
Other income, service charges, and fees | 2,058 | 1,377 | 1,491 | 983 | 1,155 | |||||||||||||||
Net securities gains (losses) | 367 | 9,309 | 3,029 | (185 | ) | 29 | ||||||||||||||
Total non-interest income | 23,627 | 34,865 | 23,360 | 19,953 | 15,068 | |||||||||||||||
Non-interest Expense | ||||||||||||||||||||
Salaries and employee benefits | 38,557 | 38,577 | 34,412 | 37,485 | 39,389 | |||||||||||||||
Net occupancy expense | 7,532 | 7,385 | 7,508 | 7,747 | 7,295 | |||||||||||||||
Technology and related costs | 2,661 | 2,447 | 2,310 | 2,424 | 3,043 | |||||||||||||||
Marketing | 1,943 | 1,997 | 2,039 | 2,363 | 2,102 | |||||||||||||||
Professional services | 2,334 | 3,020 | 2,708 | 3,000 | 4,203 | |||||||||||||||
Outsourced servicing costs | 2,154 | 1,950 | 2,038 | 2,298 | 1,521 | |||||||||||||||
Net foreclosed property expenses | 6,306 | 7,028 | 3,075 | 3,686 | 1,403 | |||||||||||||||
Postage, telephone, and delivery | 888 | 1,049 | 779 | 866 | 965 | |||||||||||||||
Insurance | 7,340 | 8,348 | 7,113 | 5,654 | 5,419 | |||||||||||||||
Loan and collection expense | 2,553 | 4,029 | 3,405 | 4,610 | 2,579 | |||||||||||||||
Other expenses | 3,081 | 6,318 | 2,690 | 5,869 | 5,452 | |||||||||||||||
Total non-interest expense | 75,349 | 82,148 | 68,077 | 76,002 | 73,371 | |||||||||||||||
Income (loss) before income taxes | 13,253 | 17,898 | 12,807 | 1,891 | (32,532 | ) | ||||||||||||||
Income tax provision (benefit) | 2,279 | 5,919 | 4,786 | (766 | ) | (11,676 | ) | |||||||||||||
Net income (loss) | 10,974 | 11,979 | 8,021 | 2,657 | (20,856 | ) | ||||||||||||||
Net income (loss) attributable to noncontrolling interests | 72 | 67 | 71 | 76 | 70 | |||||||||||||||
Net income (loss) attributable to controlling interests | 10,902 | 11,912 | 7,950 | 2,581 | (20,926 | ) | ||||||||||||||
Preferred stock dividends and discount accretion | 3,415 | 3,409 | 3,405 | 3,399 | 3,394 | |||||||||||||||
Net income (loss) available to common stockholders | $ | 7,487 | $ | 8,503 | $ | 4,545 | $ | (818 | ) | $ | (24,320 | ) | ||||||||
Per Common Share Data | ||||||||||||||||||||
Basic | $ | 0.10 | $ | 0.12 | $ | 0.06 | $ | (0.01 | ) | $ | (0.35 | ) | ||||||||
Diluted | $ | 0.10 | $ | 0.12 | $ | 0.06 | $ | (0.01 | ) | $ | (0.35 | ) | ||||||||
Common dividends per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
Weighted-average shares outstanding | 70,347 | 70,098 | 70,067 | 69,995 | 69,933 | |||||||||||||||
Weighted-average diluted shares outstanding | 70,670 | 70,135 | 70,097 | 69,995 | 69,933 | |||||||||||||||
Note 1: Due to the net loss available to common stockholders reported for the first and second quarters 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.
Note 2: Certain reclassifications have been made to prior period financial statements to place them on a basis comparable with the current period financial statements.
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Consolidated Balance Sheets
(Dollars in thousands) | |
| 03/31/11 | 12/31/10 | 09/30/10 | 06/30/10 | 03/31/10 | ||||||||||||||||
| unaudited | audited | unaudited | unaudited | unaudited | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 181,738 | $ | 112,772 | $ | 144,298 | $ | 111,997 | $ | 107,618 | ||||||||||
Fed funds sold and other short-term investments | 621,206 | 541,316 | 532,637 | 769,803 | 1,146,814 | |||||||||||||||
Loans held for sale | 22,611 | 30,758 | 44,271 | 20,762 | 16,224 | |||||||||||||||
Securities available-for-sale, at fair value | 1,892,304 | 1,881,786 | 2,033,527 | 2,029,962 | 1,769,138 | |||||||||||||||
Non-marketable equity investments | 23,490 | 23,537 | 25,587 | 33,825 | 29,475 | |||||||||||||||
Loans - excluding covered assets, net of unearned fees | 9,037,067 | 9,114,357 | 8,992,129 | 8,851,439 | 8,898,228 | |||||||||||||||
Allowance for loan losses | (218,237 | ) | (222,821 | ) | (223,392 | ) | (232,411 | ) | (236,851 | ) | ||||||||||
Loans, net of allowance for loan losses and unearned fees | 8,818,830 | 8,891,536 | 8,768,737 | 8,619,028 | 8,661,377 | |||||||||||||||
Covered assets | 364,372 | 397,210 | 419,865 | 434,828 | 468,939 | |||||||||||||||
Allowance for covered loan losses | (19,738 | ) | (15,334 | ) | (12,174 | ) | (5,176 | ) | (5,176 | ) | ||||||||||
Covered assets, net of allowance for covered loan losses | 344,634 | 381,876 | 407,691 | 429,652 | 463,763 | |||||||||||||||
Other real estate owned | 93,770 | 88,728 | 90,944 | 68,693 | 60,755 | |||||||||||||||
Premises, furniture, and equipment, net | 39,019 | 40,975 | 42,347 | 40,599 | 41,350 | |||||||||||||||
Accrued interest receivable | 33,960 | 33,854 | 34,697 | 35,278 | 34,766 | |||||||||||||||
Investment in bank owned life insurance | 49,799 | 49,408 | 48,950 | 48,521 | 48,101 | |||||||||||||||
Goodwill | 94,609 | 94,621 | 94,633 | 94,646 | 94,658 | |||||||||||||||
Other intangible assets | 16,464 | 16,840 | 17,242 | 17,655 | 18,070 | |||||||||||||||
Derivative assets | 87,273 | 100,250 | 128,891 | 113,493 | 85,152 | |||||||||||||||
Other assets | 177,735 | 177,364 | 169,513 | 177,126 | 202,975 | |||||||||||||||
Total assets | $ | 12,497,442 | $ | 12,465,621 | $ | 12,583,965 | $ | 12,611,040 | $ | 12,780,236 | ||||||||||
Liabilities | ||||||||||||||||||||
Demand deposits: | ||||||||||||||||||||
Non-interest-bearing | $ | 2,438,709 | $ | 2,253,661 | $ | 2,173,419 | $ | 2,090,222 | $ | 1,886,427 | ||||||||||
Interest-bearing | 540,215 | 616,761 | 614,049 | 738,631 | 714,700 | |||||||||||||||
Savings deposits and money market accounts | 4,831,253 | 4,821,823 | 5,039,970 | 5,066,653 | 4,691,170 | |||||||||||||||
Brokered deposits | 1,467,196 | 1,450,827 | 1,241,366 | 1,236,589 | 1,831,306 | |||||||||||||||
Time deposits | 1,348,603 | 1,392,357 | 1,461,668 | 1,437,204 | 1,498,322 | |||||||||||||||
Total deposits | 10,625,976 | 10,535,429 | 10,530,472 | 10,569,299 | 10,621,925 | |||||||||||||||
Short-term borrowings | 88,468 | 118,561 | 179,651 | 164,069 | 241,293 | |||||||||||||||
Long-term debt | 409,793 | 414,793 | 439,566 | 473,720 | 498,874 | |||||||||||||||
Accrued interest payable | 5,529 | 5,968 | 7,603 | 7,727 | 10,357 | |||||||||||||||
Derivative liabilities | 88,351 | 102,018 | 132,594 | 116,599 | 86,873 | |||||||||||||||
Other liabilities | 41,193 | 60,942 | 48,940 | 43,534 | 100,687 | |||||||||||||||
Total liabilities | 11,259,310 | 11,237,711 | 11,338,826 | 11,374,948 | 11,560,009 | |||||||||||||||
Equity | ||||||||||||||||||||
Preferred stock | 239,270 | 238,903 | 238,542 | 238,185 | 237,833 | |||||||||||||||
Common stock | 71,036 | 70,972 | 70,657 | 70,630 | 70,500 | |||||||||||||||
Treasury stock | (20,312 | ) | (20,054 | ) | (19,023 | ) | (19,003 | ) | (18,595 | ) | ||||||||||
Additional paid-in capital | 959,135 | 954,977 | 950,721 | 946,981 | 944,095 | |||||||||||||||
Accumulated deficit | (30,223 | ) | (36,999 | ) | (44,784 | ) | (48,638 | ) | (47,112 | ) | ||||||||||
Accumulated other comprehensive income, net of tax | 19,121 | 20,078 | 48,776 | 47,758 | 33,403 | |||||||||||||||
Total stockholders’ equity | 1,238,027 | 1,227,877 | 1,244,889 | 1,235,913 | 1,220,124 | |||||||||||||||
Noncontrolling interests | 105 | 33 | 250 | 179 | 103 | |||||||||||||||
Total equity | 1,238,132 | 1,227,910 | 1,245,139 | 1,236,092 | 1,220,227 | |||||||||||||||
Total liabilities and equity | $ | 12,497,442 | $ | 12,465,621 | $ | 12,583,965 | $ | 12,611,040 | $ | 12,780,236 | ||||||||||
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Selected Financial Data
Unaudited
(Amounts in thousands except per share data) | |
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Selected Statement of Income Data: | ||||||||||||||||||||
Net interest income | $ | 102,553 | $ | 100,347 | $ | 98,959 | $ | 103,332 | $ | 98,319 | ||||||||||
Net revenue(1) (2) | $ | 126,970 | $ | 136,088 | $ | 123,210 | $ | 124,209 | $ | 114,273 | ||||||||||
Operating profit(1) (2) | $ | 51,621 | $ | 53,940 | $ | 55,133 | $ | 48,207 | $ | 40,902 | ||||||||||
Income (loss) before taxes | $ | 13,253 | $ | 17,898 | $ | 12,807 | $ | 1,891 | $ | (32,532 | ) | |||||||||
Net income (loss) available to common stockholders | $ | 7,487 | $ | 8,503 | $ | 4,545 | $ | (818 | ) | $ | (24,320 | ) | ||||||||
Per Common Share Data: | ||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.10 | $ | 0.12 | $ | 0.06 | $ | (0.01 | ) | $ | (0.35 | ) | ||||||||
Diluted earnings (loss) per share (3) | $ | 0.10 | $ | 0.12 | $ | 0.06 | $ | (0.01 | ) | $ | (0.35 | ) | ||||||||
Dividends | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
Book value (period end)(1) | $ | 13.98 | $ | 13.87 | $ | 14.10 | $ | 13.98 | $ | 13.77 | ||||||||||
Tangible book value (period end)(1) (2) | $ | 12.43 | $ | 12.30 | $ | 12.53 | $ | 12.40 | $ | 12.19 | ||||||||||
Market value (close) | $ | 15.29 | $ | 14.38 | $ | 11.39 | $ | 11.08 | $ | 13.70 | ||||||||||
Book value multiple | 1.09 | x | 1.04 | x | 0.81 | x | 0.79 | x | 0.99 | x | ||||||||||
Share Data: | ||||||||||||||||||||
Weighted average common shares outstanding | 70,347 | 70,098 | 70,067 | 69,995 | 69,933 | |||||||||||||||
Diluted average common shares outstanding(3) | 70,670 | 70,135 | 70,097 | 69,995 | 69,933 | |||||||||||||||
Common shares issued (at period end) | 72,096 | 71,979 | 71,964 | 71,978 | 71,877 | |||||||||||||||
Common shares outstanding (at period end) | 71,428 | 71,327 | 71,386 | 71,403 | 71,333 | |||||||||||||||
Performance Ratios: | ||||||||||||||||||||
Return on average assets | 0.35 | % | 0.38 | % | 0.25 | % | 0.08 | % | -0.68 | % | ||||||||||
Return on average common equity | 3.03 | % | 3.31 | % | 1.77 | % | -0.33 | % | -9.86 | % | ||||||||||
Net interest margin - tax-equivalent(1) (2) | 3.46 | % | 3.33 | % | 3.28 | % | 3.39 | % | 3.33 | % | ||||||||||
Covered asset accretion contribution to net interest margin | 0.05 | % | 0.05 | % | 0.03 | % | 0.28 | % | 0.25 | % | ||||||||||
Net interest margin, excluding impact of covered asset accretion | 3.41 | % | 3.28 | % | 3.25 | % | 3.11 | % | 3.08 | % | ||||||||||
Fee revenue as a percent of total revenue (1) | 18.49 | % | 20.30 | % | 17.04 | % | 16.31 | % | 13.27 | % | ||||||||||
Non-interest income to average assets | 0.77 | % | 1.11 | % | 0.74 | % | 0.63 | % | 0.49 | % | ||||||||||
Non-interest expense to average assets | 2.44 | % | 2.61 | % | 2.16 | % | 2.39 | % | 2.39 | % | ||||||||||
Net overhead ratio(1) | 1.68 | % | 1.50 | % | 1.42 | % | 1.76 | % | 1.90 | % | ||||||||||
Efficiency ratio (1) (2) | 59.34 | % | 60.36 | % | 55.25 | % | 61.19 | % | 64.21 | % | ||||||||||
Selected Information: | ||||||||||||||||||||
Assets under management and administration(1) | $ | 4,313,843 | $ | 4,271,602 | $ | 4,023,821 | $ | 3,746,934 | $ | 3,983,066 | ||||||||||
Credit valuation adjustment(1) | $ | 817 | $ | 1,826 | $ | (830 | ) | $ | (1,271 | ) | $ | (1,333 | ) | |||||||
Balance Sheet Ratios: | ||||||||||||||||||||
Loans to Deposits (period end) (4) | 85.05 | % | 86.51 | % | 85.39 | % | 83.75 | % | 83.77 | % | ||||||||||
Average interest-earning assets to average interest-bearing liabilities | 134.88 | % | 134.76 | % | 133.96 | % | 130.58 | % | 129.96 | % | ||||||||||
Capital Ratios (period end): | ||||||||||||||||||||
Total risk-based(1) | 14.55 | % | 14.18 | % | 14.40 | % | 14.83 | % | 14.91 | % | ||||||||||
Tier 1 risk-based(1) | 12.41 | % | 12.06 | % | 12.25 | % | 12.43 | % | 12.49 | % | ||||||||||
Leverage (1) | 10.91 | % | 10.78 | % | 10.71 | % | 10.39 | % | 10.57 | % | ||||||||||
Tier 1 common capital(1) (2) | 7.97 | % | 7.69 | % | 7.79 | % | 7.86 | % | 7.86 | % | ||||||||||
Tangible common equity to tangible assets(1) (2) | 7.17 | % | 7.10 | % | 7.17 | % | 7.09 | % | 6.87 | % | ||||||||||
Total equity to total assets | 9.91 | % | 9.85 | % | 9.89 | % | 9.80 | % | 9.55 | % | ||||||||||
| (1) | Refer to Glossary of Terms for definition. |
| (2) | This is a non-U.S. GAAP measure, refer to Non-U.S. GAAP Measures for a reconciliation from non-U.S. GAAP to U.S. GAAP. |
| (3) | For the first and second quarters 2010, diluted shares are equal to basic shares due to the net loss. The calculation of diluted earnings per share for those periods results in anti-dilution. |
| (4) | Excludes covered assets. Refer to Glossary of Terms for definition. |
Note: Prior period net interest margin computations were modified to conform with the current period presentation.
9
Loan Composition (excluding covered assets(1))
(Dollars in thousands) | |
| 03/31/11 | % of Total | 12/31/10 | % of Total | 09/30/10 | % of Total | 06/30/10 | % of Total | 03/31/10 | % of Total | |||||||||||||||||||||||||||||||
| unaudited | audited | unaudited | unaudited | unaudited | ||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 4,079,874 | 45 | % | $ | 4,015,257 | 44 | % | $ | 3,850,498 | 43 | % | $ | 3,564,504 | 40 | % | $ | 3,504,531 | 39 | % | ||||||||||||||||||||
Commercial - owner-occupied CRE | 990,342 | 11 | % | 897,620 | 10 | % | 774,678 | 9 | % | 790,629 | 9 | % | 783,671 | 9 | % | |||||||||||||||||||||||||
Total commercial | 5,070,216 | 56 | % | 4,912,877 | 54 | % | 4,625,176 | 52 | % | 4,355,133 | 49 | % | 4,288,202 | 48 | % | |||||||||||||||||||||||||
Commercial real estate | 2,289,259 | 25 | % | 2,400,923 | 26 | % | 2,534,600 | 28 | % | 2,604,977 | 30 | % | 2,657,357 | 30 | % | |||||||||||||||||||||||||
Commercial real estate - multi-family | 451,685 | 5 | % | 457,246 | 5 | % | 471,989 | 5 | % | 502,708 | 6 | % | 520,186 | 6 | % | |||||||||||||||||||||||||
Total commercial real estate | 2,740,944 | 30 | % | 2,858,169 | 31 | % | 3,006,589 | 33 | % | 3,107,685 | 36 | % | 3,177,543 | 36 | % | |||||||||||||||||||||||||
Construction | 464,253 | 5 | % | 530,733 | 6 | % | 556,960 | 6 | % | 571,437 | 7 | % | 600,226 | 7 | % | |||||||||||||||||||||||||
Residential real estate | 314,082 | 4 | % | 319,146 | 4 | % | 324,434 | 4 | % | 309,001 | 3 | % | 316,012 | 4 | % | |||||||||||||||||||||||||
Home equity | 188,900 | 2 | % | 197,179 | 2 | % | 197,977 | 2 | % | 203,053 | 2 | % | 212,421 | 2 | % | |||||||||||||||||||||||||
Personal | 258,672 | 3 | % | 296,253 | 3 | % | 280,993 | 3 | % | 305,130 | 3 | % | 303,824 | 3 | % | |||||||||||||||||||||||||
Total loans | $ | 9,037,067 | 100 | % | $ | 9,114,357 | 100 | % | $ | 8,992,129 | 100 | % | $ | 8,851,439 | 100 | % | $ | 8,898,228 | 100 | % | ||||||||||||||||||||
Commercial Real Estate and Construction Loans Portfolio by Collateral Type
Unaudited
| 03/31/11 | 12/31/10 | |||||||||||||||
| Amount | % of Total | Amount | % of Total | |||||||||||||
Commercial Real Estate Portfolio | ||||||||||||||||
Land | $ | 297,373 | 11 | % | $ | 311,464 | 11 | % | ||||||||
Residential 1-4 family | 136,632 | 5 | % | 139,689 | 5 | % | ||||||||||
Multi-family | 451,685 | 16 | % | 457,246 | 16 | % | ||||||||||
Industrial/warehouse | 384,127 | 14 | % | 391,694 | 14 | % | ||||||||||
Office | 525,013 | 19 | % | 531,193 | 18 | % | ||||||||||
Retail | 420,766 | 15 | % | 450,135 | 16 | % | ||||||||||
Health care | 79,854 | 3 | % | 114,545 | 4 | % | ||||||||||
Mixed use/other | 445,494 | 17 | % | 462,203 | 16 | % | ||||||||||
Total commercial real estate | $ | 2,740,944 | 100 | % | $ | 2,858,169 | 100 | % | ||||||||
Construction Portfolio | ||||||||||||||||
Land | $ | 51,681 | 11 | % | $ | 46,036 | 9 | % | ||||||||
Residential 1-4 family | 24,588 | 5 | % | 30,698 | 6 | % | ||||||||||
Multi-family | 77,117 | 17 | % | 77,685 | 15 | % | ||||||||||
Industrial/warehouse | 34,505 | 7 | % | 34,703 | 7 | % | ||||||||||
Office | 83,629 | 18 | % | 92,369 | 17 | % | ||||||||||
Retail | 78,155 | 17 | % | 92,268 | 17 | % | ||||||||||
Mixed use/other | 114,578 | 25 | % | 156,974 | 29 | % | ||||||||||
Total construction | $ | 464,253 | 100 | % | $ | 530,733 | 100 | % | ||||||||
| (1) | Refer to Glossary of Terms for definition. |
10
Asset Quality (excluding covered assets(1))
Unaudited
(Dollars in thousands) | |
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Credit Quality Key Ratios | ||||||||||||||||||||
Net charge-offs to average loans | 1.83 | % | 1.54 | % | 2.17 | % | 2.24 | % | 2.55 | % | ||||||||||
Total nonperforming loans to total loans | 3.95 | % | 4.01 | % | 4.13 | % | 4.18 | % | 4.28 | % | ||||||||||
Total nonperforming assets to total assets | 3.61 | % | 3.65 | % | 3.67 | % | 3.48 | % | 3.46 | % | ||||||||||
Nonaccrual loans to: | ||||||||||||||||||||
total loans | 3.95 | % | 4.01 | % | 4.13 | % | 4.18 | % | 4.28 | % | ||||||||||
total assets | 2.86 | % | 2.94 | % | 2.95 | % | 2.94 | % | 2.98 | % | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
total loans | 2.41 | % | 2.44 | % | 2.48 | % | 2.63 | % | 2.66 | % | ||||||||||
nonperforming loans | 61 | % | 61 | % | 60 | % | 63 | % | 62 | % | ||||||||||
nonaccrual loans | 61 | % | 61 | % | 60 | % | 63 | % | 62 | % | ||||||||||
Nonperforming assets | ||||||||||||||||||||
Loans past due 90 days and accruing | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Nonaccrual loans | 356,932 | 365,880 | 371,156 | 370,179 | 381,207 | |||||||||||||||
OREO | 93,770 | 88,728 | 90,944 | 68,693 | 60,755 | |||||||||||||||
Total nonperforming assets | $ | 450,702 | $ | 454,608 | $ | 462,100 | $ | 438,872 | $ | 441,962 | ||||||||||
Restructured loans accruing interest | $ | 100,895 | $ | 87,576 | $ | 53,397 | $ | 4,030 | $ | 3,840 | ||||||||||
Nonperforming Loans Rollforward | ||||||||||||||||||||
Beginning balance | $ | 365,880 | $ | 371,156 | $ | 370,179 | $ | 381,207 | $ | 395,447 | ||||||||||
Additions: | ||||||||||||||||||||
New nonaccrual loans | 95,275 | 108,526 | 123,557 | 130,400 | 84,919 | |||||||||||||||
Reductions: | ||||||||||||||||||||
Return to performing status | (11,059 | ) | (6,564 | ) | (5,969 | ) | (17,984 | ) | (12,383 | ) | ||||||||||
Paydowns and payoffs, net | (16,301 | ) | (18,852 | ) | (18,208 | ) | (33,733 | ) | (5,708 | ) | ||||||||||
Net sales | (11,288 | ) | (10,595 | ) | (3,200 | ) | (8,043 | ) | — | |||||||||||
Transfer to OREO | (23,655 | ) | (39,795 | ) | (44,979 | ) | (31,480 | ) | (23,996 | ) | ||||||||||
Charge-offs, net | (41,920 | ) | (37,996 | ) | (50,224 | ) | (50,188 | ) | (57,072 | ) | ||||||||||
Total reductions | (104,223 | ) | (113,802 | ) | (122,580 | ) | (141,428 | ) | (99,159 | ) | ||||||||||
Balance at end of period | $ | 356,932 | $ | 365,880 | $ | 371,156 | $ | 370,179 | $ | 381,207 | ||||||||||
OREO Rollforward | ||||||||||||||||||||
Beginning balance | $ | 88,728 | $ | 90,944 | $ | 68,693 | $ | 60,755 | $ | 41,497 | ||||||||||
New foreclosed property | 23,661 | 40,178 | 44,979 | 31,688 | 24,135 | |||||||||||||||
Valuation adjustments | (4,762 | ) | (1,994 | ) | (1,385 | ) | (2,108 | ) | (1,101 | ) | ||||||||||
Disposals: | ||||||||||||||||||||
Sales proceeds | (12,277 | ) | (40,076 | ) | (20,277 | ) | (21,514 | ) | (3,942 | ) | ||||||||||
Net (loss) gain on sale | (1,580 | ) | (324 | ) | (1,066 | ) | (128 | ) | 166 | |||||||||||
Balance at end of period | $ | 93,770 | $ | 88,728 | $ | 90,944 | $ | 68,693 | $ | 60,755 | ||||||||||
Restructured Loans Accruing Interest Rollforward | ||||||||||||||||||||
Beginning balance | $ | 87,576 | $ | 53,397 | $ | 4,030 | $ | 3,840 | $ | — | ||||||||||
Additions: | ||||||||||||||||||||
New restructured loans accruing interest | 19,328 | 45,582 | 49,404 | — | 3,840 | |||||||||||||||
Advances | — | 1,215 | — | 190 | — | |||||||||||||||
Reductions: | ||||||||||||||||||||
Paydowns and payoffs | (1,535 | ) | (181 | ) | (37 | ) | — | — | ||||||||||||
Move to nonperforming loans | (4,474 | ) | (12,437 | ) | — | — | — | |||||||||||||
Balance at end of period | $ | 100,895 | $ | 87,576 | $ | 53,397 | $ | 4,030 | $ | 3,840 | ||||||||||
| (1) | Refer to Glossary of Terms for definition. |
11
Asset Quality (excluding covered assets(1))
Unaudited
(Dollars in thousands) | |
Credit Quality Indicators
| Special Mention | % of Loan Type | Potential Problem Loans | % of Loan Type | Non- Performing Loans | % of Loan Type | Total Loans | ||||||||||||||||||||||
As of March 31, 2011 | ||||||||||||||||||||||||||||
Transformational | ||||||||||||||||||||||||||||
Commercial | $ | 29,991 | 0.7 | % | $ | 150,452 | 3.4 | % | $ | 58,013 | 1.3 | % | $ | 4,471,032 | ||||||||||||||
Commercial real estate | 84,403 | 6.7 | % | 121,080 | 9.7 | % | 7,272 | 0.6 | % | 1,253,286 | ||||||||||||||||||
Construction | 21,611 | 6.8 | % | 21,774 | 6.9 | % | 15,308 | 4.8 | % | 317,317 | ||||||||||||||||||
Residential real estate | 1,219 | 1.2 | % | 5,723 | 5.7 | % | 272 | 0.3 | % | 100,137 | ||||||||||||||||||
Home equity | — | — | 346 | 1.1 | % | — | — | 31,390 | ||||||||||||||||||||
Personal | — | — | 934 | 0.7 | % | — | — | 125,599 | ||||||||||||||||||||
Total transformational | $ | 137,224 | 2.2 | % | $ | 300,309 | 4.8 | % | $ | 80,865 | 1.3 | % | $ | 6,298,761 | ||||||||||||||
Legacy | ||||||||||||||||||||||||||||
Commercial | $ | 28,107 | 4.7 | % | $ | 34,719 | 5.8 | % | $ | 20,018 | 3.3 | % | $ | 599,184 | ||||||||||||||
Commercial real estate | 81,614 | 5.5 | % | 152,548 | 10.3 | % | 184,062 | 12.4 | % | 1,487,658 | ||||||||||||||||||
Construction | 15,453 | 10.5 | % | 10,378 | 7.1 | % | 26,335 | 17.9 | % | 146,936 | ||||||||||||||||||
Residential real estate | 8,917 | 4.2 | % | 9,469 | 4.4 | % | 16,597 | 7.8 | % | 213,945 | ||||||||||||||||||
Home equity | 3,121 | 2.0 | % | 8,410 | 5.3 | % | 11,397 | 7.2 | % | 157,510 | ||||||||||||||||||
Personal | 1,083 | 0.8 | % | 2,311 | 1.7 | % | 17,658 | 13.3 | % | 133,073 | ||||||||||||||||||
Total legacy | $ | 138,295 | 5.1 | % | $ | 217,835 | 8.0 | % | $ | 276,067 | 10.1 | % | $ | 2,738,306 | ||||||||||||||
Total | $ | 275,519 | 3.0 | % | $ | 518,144 | 5.7 | % | $ | 356,932 | 3.9 | % | $ | 9,037,067 | ||||||||||||||
As of December 31, 2010 | ||||||||||||||||||||||||||||
Transformational | ||||||||||||||||||||||||||||
Commercial | $ | 85,039 | 2.0 | % | $ | 121,816 | 2.8 | % | $ | 51,097 | 1.2 | % | $ | 4,280,467 | ||||||||||||||
Commercial real estate | 87,495 | 6.8 | % | 125,497 | 9.7 | % | 10,309 | 0.8 | % | 1,295,380 | ||||||||||||||||||
Construction | 37,590 | 11.7 | % | 21,774 | 6.8 | % | 105 | * | 320,151 | |||||||||||||||||||
Residential real estate | 1,214 | 1.4 | % | 5,888 | 6.8 | % | 35 | * | 86,473 | |||||||||||||||||||
Home equity | — | — | 346 | 1.2 | % | — | — | 28,356 | ||||||||||||||||||||
Personal | — | — | 1,280 | 1.0 | % | — | — | 132,813 | ||||||||||||||||||||
Total transformational | $ | 211,338 | 3.4 | % | $ | 276,601 | 4.5 | % | $ | 61,546 | 1.0 | % | $ | 6,143,640 | ||||||||||||||
Legacy | ||||||||||||||||||||||||||||
Commercial | $ | 26,891 | 4.3 | % | $ | 52,013 | 8.2 | % | $ | 31,049 | 4.9 | % | $ | 632,410 | ||||||||||||||
Commercial real estate | 115,577 | 7.4 | % | 134,545 | 8.6 | % | 192,415 | 12.3 | % | 1,562,789 | ||||||||||||||||||
Construction | 30,325 | 14.4 | % | 23,345 | 11.1 | % | 33,298 | 15.8 | % | 210,582 | ||||||||||||||||||
Residential real estate | 8,748 | 3.8 | % | 9,213 | 4.0 | % | 14,806 | 6.4 | % | 232,673 | ||||||||||||||||||
Home equity | 3,757 | 2.2 | % | 10,926 | 6.5 | % | 8,195 | 4.9 | % | 168,823 | ||||||||||||||||||
Personal | 2,198 | 1.3 | % | 947 | 0.6 | % | 24,571 | 15.0 | % | 163,440 | ||||||||||||||||||
Total legacy | $ | 187,496 | 6.3 | % | $ | 230,989 | 7.8 | % | $ | 304,334 | 10.2 | % | $ | 2,970,717 | ||||||||||||||
Total | $ | 398,834 | 4.4 | % | $ | 507,590 | 5.6 | % | $ | 365,880 | 4.0 | % | $ | 9,114,357 | ||||||||||||||
| (1) | Refer to Glossary of Terms for definition. |
| * | Less than 0.1%. |
12
Asset Quality (excluding covered assets(1))
Unaudited
(Dollars in thousands) | |
Nonaccrual Loans Stratification
| $5.0 Million or More | $3.0 to $4.9 Million | $1.5 to $2.9 Million | Under $1.5 Million | Total | ||||||||||||||||
As of March 31, 2011 | ||||||||||||||||||||
Amount: | ||||||||||||||||||||
Commercial | $ | 51,468 | $ | 7,950 | $ | 5,113 | $ | 13,500 | $ | 78,031 | ||||||||||
Commercial real estate | 75,416 | 28,384 | 38,306 | 49,228 | 191,334 | |||||||||||||||
Construction | 20,397 | 4,551 | 8,654 | 8,041 | 41,643 | |||||||||||||||
Residential real estate | — | 7,789 | — | 9,080 | 16,869 | |||||||||||||||
Personal and home equity | 11,049 | — | 3,766 | 14,240 | 29,055 | |||||||||||||||
Total | $ | 158,330 | $ | 48,674 | $ | 55,839 | $ | 94,089 | $ | 356,932 | ||||||||||
Number of borrowers: | ||||||||||||||||||||
Commercial | 4 | 2 | 2 | 43 | 51 | |||||||||||||||
Commercial real estate | 10 | 7 | 18 | 85 | 120 | |||||||||||||||
Construction | 2 | 1 | 4 | 13 | 20 | |||||||||||||||
Residential real estate | — | 2 | — | 16 | 18 | |||||||||||||||
Personal and home equity | 1 | — | 2 | 35 | 38 | |||||||||||||||
Total | 17 | 12 | 26 | 192 | 247 | |||||||||||||||
As of December 31, 2010 | ||||||||||||||||||||
Amount: | ||||||||||||||||||||
Commercial | $ | 50,300 | $ | 8,420 | $ | 7,861 | $ | 15,565 | $ | 82,146 | ||||||||||
Commercial real estate | 61,718 | 52,856 | 33,912 | 54,238 | 202,724 | |||||||||||||||
Construction | 11,733 | 4,434 | 8,383 | 8,853 | 33,403 | |||||||||||||||
Residential real estate | — | 4,790 | — | 10,051 | 14,841 | |||||||||||||||
Personal and home equity | 15,491 | 4,419 | 1,932 | 10,924 | 32,766 | |||||||||||||||
Total | $ | 139,242 | $ | 74,919 | $ | 52,088 | $ | 99,631 | $ | 365,880 | ||||||||||
Number of borrowers: | ||||||||||||||||||||
Commercial | 4 | 2 | 3 | 50 | 59 | |||||||||||||||
Commercial real estate | 9 | 13 | 16 | 92 | 130 | |||||||||||||||
Construction | 2 | 1 | 4 | 14 | 21 | |||||||||||||||
Residential real estate | — | 1 | — | 17 | 18 | |||||||||||||||
Personal and home equity | 1 | 1 | 1 | 28 | 31 | |||||||||||||||
Total | 16 | 18 | 24 | 201 | 259 | |||||||||||||||
Restructured Loans Accruing Interest Stratification
| ||||||||||||||||||||
| $5.0 Million or More | $3.0 to $4.9 Million | $1.5 to $2.9 Million | Under $1.5 Million | Total | ||||||||||||||||
As of March 31, 2011 | ||||||||||||||||||||
Amount: | ||||||||||||||||||||
Commercial | $ | 5,265 | $ | 3,342 | $ | 1,774 | $ | 4,669 | $ | 15,050 | ||||||||||
Commercial real estate | 41,479 | 10,048 | 8,724 | 7,169 | 67,420 | |||||||||||||||
Construction | — | 3,094 | — | — | 3,094 | |||||||||||||||
Residential real estate | — | — | — | 796 | 796 | |||||||||||||||
Personal and home equity | 12,984 | — | — | 1,551 | 14,535 | |||||||||||||||
Total | $ | 59,728 | $ | 16,484 | $ | 10,498 | $ | 14,185 | $ | 100,895 | ||||||||||
Number of borrowers: | ||||||||||||||||||||
Commercial | 1 | 1 | 1 | 10 | 13 | |||||||||||||||
Commercial real estate | 3 | 3 | 4 | 10 | 20 | |||||||||||||||
Construction | — | 1 | — | — | 1 | |||||||||||||||
Residential real estate | — | — | — | 1 | 1 | |||||||||||||||
Personal and home equity | 1 | — | — | 4 | 5 | |||||||||||||||
Total | 5 | 5 | 5 | 25 | 40 | |||||||||||||||
As of December 31, 2010 | ||||||||||||||||||||
Amount: | ||||||||||||||||||||
Commercial | $ | — | $ | — | $ | 4,553 | $ | 3,464 | $ | 8,017 | ||||||||||
Commercial real estate | 41,659 | 7,064 | 4,662 | 6,634 | 60,019 | |||||||||||||||
Construction | — | 3,112 | — | 1,236 | 4,348 | |||||||||||||||
Residential real estate | — | — | — | 798 | 798 | |||||||||||||||
Personal and home equity | 13,114 | — | — | 1,280 | 14,394 | |||||||||||||||
Total | $ | 54,773 | $ | 10,176 | $ | 9,215 | $ | 13,412 | $ | 87,576 | ||||||||||
Number of borrowers: | ||||||||||||||||||||
Commercial | — | — | 2 | 7 | 9 | |||||||||||||||
Commercial real estate | 3 | 2 | 2 | 9 | 16 | |||||||||||||||
Construction | — | 1 | — | 1 | 2 | |||||||||||||||
Residential real estate | — | — | — | 1 | 1 | |||||||||||||||
Personal and home equity | 1 | — | — | 1 | 2 | |||||||||||||||
Total | 4 | 3 | 4 | 19 | 30 | |||||||||||||||
| (1) | Refer to Glossary of Terms for definition. |
13
Loan Portfolio Aging (excluding covered assets(1))
Unaudited
(Dollars in thousands) | |
| Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days Past Due and Accruing | Nonaccrual | Total Loans | |||||||||||||||||||
As of March 31, 2011 | ||||||||||||||||||||||||
Loan balances: | ||||||||||||||||||||||||
Commercial | $ | 4,988,049 | $ | 3,997 | $ | 139 | $ | — | $ | 78,031 | $ | 5,070,216 | ||||||||||||
Commercial real estate | 2,519,419 | 23,409 | 6,782 | — | 191,334 | 2,740,944 | ||||||||||||||||||
Construction | 417,775 | 4,835 | — | — | 41,643 | 464,253 | ||||||||||||||||||
Residential real estate | 296,064 | 753 | 396 | — | 16,869 | 314,082 | ||||||||||||||||||
Personal and home equity | 413,661 | 1,921 | 2,935 | — | 29,055 | 447,572 | ||||||||||||||||||
Total loans | $ | 8,634,968 | $ | 34,915 | $ | 10,252 | $ | — | $ | 356,932 | $ | 9,037,067 | ||||||||||||
Aging as a percent of loan balance: |
| |||||||||||||||||||||||
Commercial | 98.38 | % | 0.08 | % | — | — | 1.54 | % | 100.00 | % | ||||||||||||||
Commercial real estate | 91.92 | % | 0.85 | % | 0.25 | % | — | 6.98 | % | 100.00 | % | |||||||||||||
Construction | 89.99 | % | 1.04 | % | — | — | 8.97 | % | 100.00 | % | ||||||||||||||
Residential real estate | 94.26 | % | 0.24 | % | 0.13 | % | — | 5.37 | % | 100.00 | % | |||||||||||||
Personal and home equity | 92.42 | % | 0.43 | % | 0.66 | % | — | 6.49 | % | 100.00 | % | |||||||||||||
Total loans | 95.55 | % | 0.39 | % | 0.11 | % | — | 3.95 | % | 100.00 | % | |||||||||||||
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Nonaccrual loans: |
| |||||||||||||||||||
Commercial | $ | 78,031 | $ | 82,146 | $ | 87,800 | $ | 90,364 | $ | 68,509 | ||||||||||
Commercial real estate | 191,334 | 202,724 | 213,975 | 214,365 | 212,758 | |||||||||||||||
Construction | 41,643 | 33,403 | 33,589 | 37,859 | 59,335 | |||||||||||||||
Residential real estate | 16,869 | 14,841 | 9,101 | 9,717 | 16,776 | |||||||||||||||
Personal and home equity | 29,055 | 32,766 | 26,691 | 17,874 | 23,829 | |||||||||||||||
Total | $ | 356,932 | $ | 365,880 | $ | 371,156 | $ | 370,179 | $ | 381,207 | ||||||||||
Nonaccrual loans as a percent of total loan type: |
| |||||||||||||||||||
Commercial | 1.54 | % | 1.67 | % | 1.90 | % | 2.07 | % | 1.60 | % | ||||||||||
Commercial real estate | 6.98 | % | 7.09 | % | 7.12 | % | 6.90 | % | 6.70 | % | ||||||||||
Construction | 8.97 | % | 6.29 | % | 6.03 | % | 6.63 | % | 9.89 | % | ||||||||||
Residential real estate | 5.37 | % | 4.65 | % | 2.81 | % | 3.14 | % | 5.31 | % | ||||||||||
Personal and home equity | 6.49 | % | 6.64 | % | 5.57 | % | 3.52 | % | 4.62 | % | ||||||||||
Total | 3.95 | % | 4.01 | % | 4.13 | % | 4.18 | % | 4.28 | % | ||||||||||
Loans past due 60-89 days and still accruing: |
| |||||||||||||||||||
Commercial | $ | 139 | $ | 759 | $ | 435 | $ | 3,620 | $ | 4,245 | ||||||||||
Commercial real estate | 6,782 | 12,346 | 8,864 | 14,884 | 35,454 | |||||||||||||||
Construction | — | 1,895 | 6,200 | — | 6,400 | |||||||||||||||
Residential real estate | 396 | 4,098 | 2,767 | 1,347 | 170 | |||||||||||||||
Personal and home equity | 2,935 | 4,033 | 1,104 | 1,147 | 2,112 | |||||||||||||||
Total | $ | 10,252 | $ | 23,131 | $ | 19,370 | $ | 20,998 | $ | 48,381 | ||||||||||
Loans past due 60-89 days and still accruing as a percent of total loan type: |
| |||||||||||||||||||
Commercial | — | 0.02 | % | 0.01 | % | 0.08 | % | 0.10 | % | |||||||||||
Commercial real estate | 0.25 | % | 0.43 | % | 0.29 | % | 0.48 | % | 1.12 | % | ||||||||||
Construction | — | 0.36 | % | 1.11 | % | — | 1.07 | % | ||||||||||||
Residential real estate | 0.13 | % | 1.28 | % | 0.85 | % | 0.44 | % | 0.05 | % | ||||||||||
Personal and home equity | 0.66 | % | 0.80 | % | 0.23 | % | 0.23 | % | 0.41 | % | ||||||||||
Total | 0.11 | % | 0.27 | % | 0.22 | % | 0.24 | % | 0.54 | % | ||||||||||
Loans past due 30-59 days and still accruing: | ||||||||||||||||||||
Commercial | $ | 3,997 | $ | 1,024 | $ | 2,772 | $ | 2,741 | $ | 11,641 | ||||||||||
Commercial real estate | 23,409 | 10,264 | 18,869 | 26,073 | 36,740 | |||||||||||||||
Construction | 4,835 | — | 3,327 | 258 | 3,252 | |||||||||||||||
Residential real estate | 753 | 180 | 1,174 | — | 6,656 | |||||||||||||||
Personal and home equity | 1,921 | 14,098 | 2,188 | 2,065 | 2,189 | |||||||||||||||
Total | $ | 34,915 | $ | 25,566 | $ | 28,330 | $ | 31,137 | $ | 60,478 | ||||||||||
Loans past due 30-59 days and still accruing as a percent of total loan type: |
| |||||||||||||||||||
Commercial | 0.08 | % | 0.02 | % | 0.06 | % | 0.06 | % | 0.27 | % | ||||||||||
Commercial real estate | 0.85 | % | 0.36 | % | 0.63 | % | 0.84 | % | 1.16 | % | ||||||||||
Construction | 1.04 | % | — | 0.60 | % | 0.05 | % | 0.54 | % | |||||||||||
Residential real estate | 0.24 | % | 0.06 | % | 0.36 | % | — | 2.11 | % | |||||||||||
Personal and home equity | 0.43 | % | 2.86 | % | 0.46 | % | 0.41 | % | 0.42 | % | ||||||||||
Total | 0.39 | % | 0.28 | % | 0.32 | % | 0.35 | % | 0.68 | % | ||||||||||
| (1) | Refer to Glossary of Terms for definition. |
14
Foreclosed Real Estate (OREO), excluding covered assets(1)
Unaudited
(Dollars in thousands) | |
OREO Properties by Type
| March 31, 2011 | December 31, 2010 | |||||||||||||||
| Number of Properties | Amount | Number of Properties | Amount | |||||||||||||
Single family homes | 24 | $ | 18,219 | 24 | $ | 21,534 | ||||||||||
Land parcels | 322 | 37,079 | 320 | 34,122 | ||||||||||||
Multi-family | 13 | 8,464 | 14 | 6,061 | ||||||||||||
Office/industrial | 24 | 25,544 | 20 | 26,511 | ||||||||||||
Retail | 4 | 4,464 | 1 | 500 | ||||||||||||
Total | 387 | $ | 93,770 | 379 | $ | 88,728 | ||||||||||
OREO Property Location
| Illinois | Georgia | Michigan | South Eastern(2) | Other | Total | |||||||||||||||||||
March 31, 2011 | ||||||||||||||||||||||||
Single family homes | $ | 16,054 | $ | 139 | $ | 1,954 | $ | — | $ | 72 | $ | 18,219 | ||||||||||||
Land parcels | 12,325 | 5,706 | 4,531 | 10,396 | 4,121 | 37,079 | ||||||||||||||||||
Multi-family | 5,854 | — | 2,610 | — | — | 8,464 | ||||||||||||||||||
Office/industrial | 14,613 | 1,044 | 2,193 | 3,864 | 3,830 | 25,544 | ||||||||||||||||||
Retail | 1,259 | 892 | 2,313 | — | — | 4,464 | ||||||||||||||||||
Total | $ | 50,105 | $ | 7,781 | $ | 13,601 | $ | 14,260 | $ | 8,023 | $ | 93,770 | ||||||||||||
December 31, 2010 | ||||||||||||||||||||||||
Single family homes | $ | 14,943 | $ | 139 | $ | 6,194 | $ | — | $ | 258 | $ | 21,534 | ||||||||||||
Land parcels | 10,874 | 4,772 | 3,626 | 10,396 | 4,454 | 34,122 | ||||||||||||||||||
Multi-family | 5,166 | — | 895 | — | — | 6,061 | ||||||||||||||||||
Office/industrial | 13,505 | 1,104 | 3,787 | 4,573 | 3,542 | 26,511 | ||||||||||||||||||
Retail | 500 | — | — | — | — | 500 | ||||||||||||||||||
Total | $ | 44,988 | $ | 6,015 | $ | 14,502 | $ | 14,969 | $ | 8,254 | $ | 88,728 | ||||||||||||
| (1) | Refer to Glossary of Terms for definition. |
| (2) | Represents the southeastern states of Arkansas and Florida. |
15
Allowance for Loan Losses (excluding covered assets(1))
Unaudited
(Dollars in thousands) | |
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Change in allowance for loan losses: | ||||||||||||||||||||
Balance at beginning of period | $ | 222,821 | $ | 223,392 | $ | 232,411 | $ | 236,851 | $ | 221,688 | ||||||||||
Loans charged-off: | ||||||||||||||||||||
Commercial | $ | (4,200 | ) | $ | (3,050 | ) | $ | (2,541 | ) | $ | (8,440 | ) | $ | (18,129 | ) | |||||
Commercial real estate | (29,409 | ) | (21,909 | ) | (31,809 | ) | (24,956 | ) | (21,793 | ) | ||||||||||
Construction | (62 | ) | (1,709 | ) | (4,882 | ) | (10,644 | ) | (10,264 | ) | ||||||||||
Residential real estate | (386 | ) | (544 | ) | (1,715 | ) | (886 | ) | (1,590 | ) | ||||||||||
Home equity | (1,447 | ) | (1,234 | ) | (736 | ) | (651 | ) | (1,087 | ) | ||||||||||
Personal | (6,787 | ) | (8,602 | ) | (8,939 | ) | (6,346 | ) | (4,584 | ) | ||||||||||
Total charge-offs | (42,291 | ) | (37,048 | ) | (50,622 | ) | (51,923 | ) | (57,447 | ) | ||||||||||
Recoveries on loans previously charged-off: | ||||||||||||||||||||
Commercial | $ | 465 | $ | 1,243 | $ | 730 | $ | 664 | $ | 330 | ||||||||||
Commercial real estate | 272 | 75 | 304 | 896 | 53 | |||||||||||||||
Construction | 97 | 274 | 131 | 444 | 134 | |||||||||||||||
Residential real estate | 2 | 12 | 4 | 11 | 6 | |||||||||||||||
Home equity | 10 | 79 | 9 | 3 | 4 | |||||||||||||||
Personal | 155 | 259 | 394 | 73 | 17 | |||||||||||||||
Total recoveries | 1,001 | 1,942 | 1,572 | 2,091 | 544 | |||||||||||||||
Net charge-offs | (41,290 | ) | (35,106 | ) | (49,050 | ) | (49,832 | ) | (56,903 | ) | ||||||||||
Provisions charged to operating expense | 36,706 | 34,535 | 40,031 | 45,392 | 72,066 | |||||||||||||||
Balance at end of period | $ | 218,237 | $ | 222,821 | $ | 223,392 | $ | 232,411 | $ | 236,851 | ||||||||||
Allocation of allowance for loan losses: | ||||||||||||||||||||
General allocated reserve: | ||||||||||||||||||||
Commercial | $ | 50,250 | $ | 52,100 | $ | 50,863 | $ | 55,408 | $ | 55,324 | ||||||||||
Commercial real estate | 75,500 | 72,850 | 75,701 | 76,193 | 77,698 | |||||||||||||||
Construction | 12,900 | 16,000 | 17,048 | 17,869 | 18,479 | |||||||||||||||
Residential real estate | 4,425 | 4,275 | 3,842 | 3,999 | 3,658 | |||||||||||||||
Home equity | 3,425 | 3,150 | 2,312 | 2,552 | 2,664 | |||||||||||||||
Personal | 3,325 | 3,475 | 4,910 | 5,602 | 5,909 | |||||||||||||||
Total allocated | $ | 149,825 | $ | 151,850 | $ | 154,676 | $ | 161,623 | $ | 163,732 | ||||||||||
Specific reserve | 68,412 | 70,971 | 68,716 | 70,788 | 73,119 | |||||||||||||||
Unallocated reserve | — | — | — | — | — | |||||||||||||||
Total | $ | 218,237 | $ | 222,821 | $ | 223,392 | $ | 232,411 | $ | 236,851 | ||||||||||
Allocation of reserve by a percent of total allowance for loan losses: |
| |||||||||||||||||||
General allocated reserve: | ||||||||||||||||||||
Commercial | 23 | % | 23 | % | 23 | % | 24 | % | 23 | % | ||||||||||
Commercial real estate | 35 | % | 33 | % | 34 | % | 33 | % | 33 | % | ||||||||||
Construction | 6 | % | 7 | % | 8 | % | 8 | % | 8 | % | ||||||||||
Residential real estate | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | ||||||||||
Home equity | 2 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||
Personal | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | ||||||||||
Total allocated | 70 | % | 68 | % | 70 | % | 70 | % | 69 | % | ||||||||||
Specific reserve | 30 | % | 32 | % | 30 | % | 30 | % | 31 | % | ||||||||||
Unallocated reserve | — | — | — | — | — | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
total loans | 2.41 | % | 2.44 | % | 2.48 | % | 2.63 | % | 2.66 | % | ||||||||||
nonperforming loans | 61 | % | 61 | % | 60 | % | 63 | % | 62 | % | ||||||||||
nonaccrual loans | 61 | % | 61 | % | 60 | % | 63 | % | 62 | % | ||||||||||
| (1) | Refer to Glossary of Terms for definition. |
16
Deposits
(Dollars in thousands) | |
| 03/31/11 | % of Total | 12/31/10 | % of Total | 09/30/10 | % of Total | 06/30/10 | % of Total | 03/31/10 | % of Total | |||||||||||||||||||||||||||||||
| unaudited | audited | unaudited | unaudited | unaudited | ||||||||||||||||||||||||||||||||||||
Non-interest bearing deposits | $ | 2,438,709 | 23 | % | $ | 2,253,661 | 21 | % | $ | 2,173,419 | 20 | % | $ | 2,090,222 | 20 | % | $ | 1,886,427 | 18 | % | ||||||||||||||||||||
Interest-bearing deposits | 540,215 | 5 | % | 616,761 | 6 | % | 614,049 | 6 | % | 738,631 | 7 | % | 714,700 | 7 | % | |||||||||||||||||||||||||
Savings deposits | 203,550 | 2 | % | 190,685 | 2 | % | 178,533 | 2 | % | 170,087 | 1 | % | 163,613 | 1 | % | |||||||||||||||||||||||||
Money market accounts | 4,627,703 | 44 | % | 4,631,138 | 44 | % | 4,861,437 | 46 | % | 4,896,566 | 46 | % | 4,527,557 | 43 | % | |||||||||||||||||||||||||
Brokered deposits: | ||||||||||||||||||||||||||||||||||||||||
Traditional | 455,473 | 4 | % | 329,107 | 3 | % | 150,183 | 1 | % | 103,774 | 1 | % | 294,346 | 3 | % | |||||||||||||||||||||||||
Client CDARS (1) | 888,676 | 8 | % | 852,458 | 8 | % | 828,508 | 8 | % | 1,013,115 | 10 | % | 1,129,471 | 10 | % | |||||||||||||||||||||||||
Non-client CDARS (1) | 123,047 | 1 | % | 269,262 | 3 | % | 262,675 | 3 | % | 119,700 | 1 | % | 407,489 | 4 | % | |||||||||||||||||||||||||
Total brokered deposits | 1,467,196 | 13 | % | 1,450,827 | 14 | % | 1,241,366 | 12 | % | 1,236,589 | 12 | % | 1,831,306 | 17 | % | |||||||||||||||||||||||||
Time deposits | 1,348,603 | 13 | % | 1,392,357 | 13 | % | 1,461,668 | 14 | % | 1,437,204 | 14 | % | 1,498,322 | 14 | % | |||||||||||||||||||||||||
Total deposits | $ | 10,625,976 | 100 | % | $ | 10,535,429 | 100 | % | $ | 10,530,472 | 100 | % | $ | 10,569,299 | 100 | % | $ | 10,621,925 | 100 | % | ||||||||||||||||||||
Client deposits(1) | $ | 10,047,456 | 95 | % | $ | 9,937,060 | 94 | % | $ | 10,117,614 | 96 | % | $ | 10,345,825 | 98 | % | $ | 9,920,090 | 93 | % | ||||||||||||||||||||
| (1) | Refer to Glossary of Terms for definition. |
17
| Net Interest Margin | | |
Unaudited | ||
(Dollars in thousands) |
| Three Months Ended March 31, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
| Average Balance | Interest(1) | Rate | Average Balance | Interest(1) | Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Fed funds sold and other short-term investments | $ | 517,641 | $ | 336 | 0.26 | % | $ | 757,463 | $ | 544 | 0.29 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 1,734,347 | 15,390 | 3.55 | % | 1,456,165 | 15,450 | 4.24 | % | ||||||||||||||||
Tax-exempt(2) | 149,260 | 2,276 | 6.10 | % | 161,507 | 2,604 | 6.45 | % | ||||||||||||||||
Total securities | 1,883,607 | 17,666 | 3.75 | % | 1,617,672 | 18,054 | 4.46 | % | ||||||||||||||||
Loans, excluding covered assets: | ||||||||||||||||||||||||
Commercial | 5,021,733 | 57,746 | 4.60 | % | 4,327,508 | 49,813 | 4.60 | % | ||||||||||||||||
Commercial real estate | 2,842,014 | 29,929 | 4.21 | % | 3,089,518 | 33,558 | 4.34 | % | ||||||||||||||||
Construction | 516,609 | 4,885 | 3.78 | % | 760,782 | 5,887 | 3.10 | % | ||||||||||||||||
Residential | 329,050 | 3,785 | 4.60 | % | 334,000 | 4,250 | 5.09 | % | ||||||||||||||||
Personal and home equity | 466,719 | 4,065 | 3.53 | % | 521,029 | 4,822 | 3.75 | % | ||||||||||||||||
Total loans, excluding covered assets(3) | 9,176,125 | 100,410 | 4.38 | % | 9,032,837 | 98,330 | 4.36 | % | ||||||||||||||||
Total interest-earning assets before covered assets (2) | 11,577,373 | 118,412 | 4.09 | % | 11,407,972 | 116,928 | 4.10 | % | ||||||||||||||||
Covered assets(4) | 353,378 | 5,237 | 5.94 | % | 481,566 | 12,732 | 10.60 | % | ||||||||||||||||
Total interest-earning assets (2) | $ | 11,930,751 | $ | 123,649 | 4.15 | % | $ | 11,889,538 | $ | 129,660 | 4.37 | % | ||||||||||||
Cash and due from banks | 171,007 | 181,539 | ||||||||||||||||||||||
Allowance for loan and covered loan losses | (250,067 | ) | (241,814 | ) | ||||||||||||||||||||
Other assets | 656,053 | 614,154 | ||||||||||||||||||||||
Total assets | $ | 12,507,744 | $ | 12,443,417 | ||||||||||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 599,357 | $ | 642 | 0.43 | % | $ | 720,381 | $ | 966 | 0.54 | % | ||||||||||||
Savings deposits | 197,501 | 200 | 0.41 | % | 150,357 | 286 | 0.77 | % | ||||||||||||||||
Money market accounts | 4,664,227 | 6,462 | 0.56 | % | 4,228,146 | 8,828 | 0.85 | % | ||||||||||||||||
Time deposits | 1,379,197 | 4,518 | 1.33 | % | 1,645,788 | 6,221 | 1.53 | % | ||||||||||||||||
Brokered deposits | 1,478,171 | 2,174 | 0.66 | % | 1,637,891 | 5,203 | 1.29 | % | ||||||||||||||||
Total interest-bearing deposits | 8,318,453 | 13,996 | 0.68 | % | 8,382,563 | 21,504 | 1.04 | % | ||||||||||||||||
Short term borrowings | 114,957 | 827 | 2.88 | % | 240,926 | 1,446 | 2.40 | % | ||||||||||||||||
Long term debt | 411,960 | 5,483 | 5.32 | % | 525,342 | 7,505 | 5.71 | % | ||||||||||||||||
Total interest-bearing liabilities | 8,845,370 | 20,306 | 0.93 | % | 9,148,831 | 30,455 | 1.34 | % | ||||||||||||||||
Non-interest bearing demand deposits | 2,264,100 | 1,902,720 | ||||||||||||||||||||||
Other liabilities | 157,634 | 153,550 | ||||||||||||||||||||||
Equity | 1,240,640 | 1,238,316 | ||||||||||||||||||||||
Total liabilities and equity | $ | 12,507,744 | $ | 12,443,417 | ||||||||||||||||||||
Net interest spread(5) | 3.22 | % | 3.02 | % | ||||||||||||||||||||
Effect of non interest-bearing funds | 0.24 | % | 0.31 | % | ||||||||||||||||||||
Net interest income/margin(2) (5) (6) | $ | 103,343 | 3.46 | % | $ | 99,205 | 3.33 | % | ||||||||||||||||
| (1) | Interest income included $6.9 million and $6.2 million in loan fees for the three months ended March 31, 2011 and 2010, 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, refer to Non-U.S. GAAP Measures for a reconciliation of the effect of the tax-equivalent adjustment. |
| (3) | Average loans on a nonaccrual basis for the recognition of interest income totaled $377.3 million and $409.3 million at March 31, 2011 and 2010, respectively, and are included in loans for purposes of this analysis. Interest foregone on impaired loans was estimated to be approximately $4.0 million and $4.5 million for the three months ended March 31, 2011 and 2010, respectively, and was based on the average loan portfolio yield for the respective 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. |
| (6) | For the three months ended March 31, 2011 and 2010, accretion related to covered assets contributed to net interest margin by 5 and 25 basis points, respectively. |
Note: Prior period net interest margin computations were modified to conform with the current period presentation.
18
Net Interest Margin
Unaudited
(Dollars in thousands) | |
| Three Months Ended March 31, | Three Months Ended December 31, | |||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
| Average Balance | Interest(1) | Rate | Average Balance | Interest(1) | Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Fed funds sold and other short-term investments | $ | 517,641 | $ | 336 | 0.26 | % | $ | 570,264 | $ | 366 | 0.25 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 1,734,347 | 15,390 | 3.55 | % | 1,718,338 | 15,453 | 3.60 | % | ||||||||||||||||
Tax-exempt(2) | 149,260 | 2,276 | 6.10 | % | 164,241 | 2,520 | 6.14 | % | ||||||||||||||||
Total securities | 1,883,607 | 17,666 | 3.75 | % | 1,882,579 | 17,973 | 3.82 | % | ||||||||||||||||
Loans, excluding covered assets: | ||||||||||||||||||||||||
Commercial | 5,021,733 | 57,746 | 4.60 | % | 4,699,681 | 53,922 | 4.49 | % | ||||||||||||||||
Commercial real estate | 2,842,014 | 29,929 | 4.21 | % | 2,966,730 | 31,960 | 4.22 | % | ||||||||||||||||
Construction | 516,609 | 4,885 | 3.78 | % | 549,967 | 5,261 | 3.74 | % | ||||||||||||||||
Residential | 329,050 | 3,785 | 4.60 | % | 366,637 | 4,239 | 4.62 | % | ||||||||||||||||
Personal and home equity | 466,719 | 4,065 | 3.53 | % | 495,845 | 4,482 | 3.59 | % | ||||||||||||||||
Total loans, excluding covered assets(3) | 9,176,125 | 100,410 | 4.38 | % | 9,078,860 | 99,864 | 4.31 | % | ||||||||||||||||
Total interest-earning assets before covered assets (2) | 11,577,373 | 118,412 | 4.09 | % | 11,531,703 | 118,203 | 4.03 | % | ||||||||||||||||
Covered assets(4) | 353,378 | 5,237 | 5.94 | % | 387,146 | 5,511 | 5.57 | % | ||||||||||||||||
Total interest-earning assets (2) | $ | 11,930,751 | $ | 123,649 | 4.15 | % | $ | 11,918,849 | $ | 123,714 | 4.08 | % | ||||||||||||
Cash and due from banks | 171,007 | 143,504 | ||||||||||||||||||||||
Allowance for loan and covered loan losses | (250,067 | ) | (240,720 | ) | ||||||||||||||||||||
Other assets | 656,053 | 692,026 | ||||||||||||||||||||||
Total assets | $ | 12,507,744 | $ | 12,513,659 | ||||||||||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 599,357 | $ | 642 | 0.43 | % | $ | 696,877 | $ | 702 | 0.40 | % | ||||||||||||
Savings deposits | 197,501 | 200 | 0.41 | % | 184,704 | 206 | 0.44 | % | ||||||||||||||||
Money market accounts | 4,664,227 | 6,462 | 0.56 | % | 4,812,571 | 7,231 | 0.60 | % | ||||||||||||||||
Time deposits | 1,379,197 | 4,518 | 1.33 | % | 1,427,904 | 4,954 | 1.38 | % | ||||||||||||||||
Brokered deposits | 1,478,171 | 2,174 | 0.66 | % | 1,165,207 | 2,413 | 0.82 | % | ||||||||||||||||
Total interest-bearing deposits | 8,318,453 | 13,996 | 0.68 | % | 8,287,263 | 15,506 | 0.74 | % | ||||||||||||||||
Short term borrowings | 114,957 | 827 | 2.88 | % | 124,716 | 962 | 3.02 | % | ||||||||||||||||
Long term debt | 411,960 | 5,483 | 5.32 | % | 432,264 | 6,023 | 5.53 | % | ||||||||||||||||
Total interest-bearing liabilities | 8,845,370 | 20,306 | 0.93 | % | 8,844,243 | 22,491 | 1.01 | % | ||||||||||||||||
Non-interest bearing demand deposits | 2,264,100 | 2,224,807 | ||||||||||||||||||||||
Other liabilities | 157,634 | 185,437 | ||||||||||||||||||||||
Equity | 1,240,640 | 1,259,172 | ||||||||||||||||||||||
Total liabilities and equity | $ | 12,507,744 | $ | 12,513,659 | ||||||||||||||||||||
Net interest spread(5) | 3.22 | % | 3.07 | % | ||||||||||||||||||||
Effect of non interest-bearing funds | 0.24 | % | 0.26 | % | ||||||||||||||||||||
Net interest income/margin(2) (5) (6) | $ | 103,343 | 3.46 | % | $ | 101,223 | 3.33 | % | ||||||||||||||||
| (1) | Interest income included $6.9 million and $6.1 million in loan fees for the three months ended March 31, 2011 and December 31, 2010, 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, refer to Non-U.S. GAAP Measures for a reconciliation of the effect of the tax-equivalent adjustment. |
| (3) | Average loans on a nonaccrual basis for the recognition of interest income totaled $377.3 million and $389.1 million at March 31, 2011 and December 31, 2010, respectively, and are included in loans for purposes of this analysis. Interest foregone on impaired loans was estimated to be approximately $4.0 million and $4.2 million for the three months ended March 31, 2011 and December 31, 2010, respectively, and was based on the average loan portfolio yield for the respective 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. |
| (6) | For the quarters ended March 31, 2011 and December 31, 2010, accretion related to covered assets contributed to net interest margin by 5 basis points, respectively. |
Note: Prior period net interest margin computations were modified to conform with the current period presentation.
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| Non-U.S. GAAP Measures | | |
Unaudited | ||
(Amounts in thousands except per share data) |
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. These non-U.S. GAAP measures include net interest income, net interest margin, net revenue, operating profit and efficiency ratio all on a fully taxable-equivalent basis; tier 1 common capital, tangible book value, and tangible common equity to tangible assets. 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.
We also consider various measures when evaluating capital utilization and adequacy, including tier 1 common capital, tangible book value, and tangible common equity ratio, in addition to capital ratios defined by banking regulators. These calculations are intended to complement the capital ratios defined by banking regulators for both absolute and comparative purposes. Certain of these measures exclude the ending balances of goodwill and other intangibles and/or 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 measures are relevant because they reflect 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 the usefulness of these measures to investors may be limited.
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. The following table reconciles Non-U.S. GAAP financial measures to U.S. GAAP:
| Quarters Ending | ||||||||||||||||||||
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Taxable-equivalent interest income | ||||||||||||||||||||
U.S. GAAP net interest income | $ | 102,553 | $ | 100,347 | $ | 98,959 | $ | 103,332 | $ | 98,319 | ||||||||||
Taxable-equivalent adjustment | 790 | 876 | 891 | 924 | 886 | |||||||||||||||
Taxable-equivalent net interest income(a) | $ | 103,343 | $ | 101,223 | $ | 99,850 | $ | 104,256 | $ | 99,205 | ||||||||||
Average Earning Assets(b) | $ | 11,930,751 | $ | 11,918,849 | $ | 11,938,905 | $ | 12,182,872 | $ | 11,889,538 | ||||||||||
Net Interest Margin((a) annualized) / (b) | 3.46 | % | 3.33 | % | 3.28 | % | 3.39 | % | 3.33 | % | ||||||||||
Net Revenue | ||||||||||||||||||||
Taxable-equivalent net interest income(a) | $ | 103,343 | $ | 101,223 | $ | 99,850 | $ | 104,256 | $ | 99,205 | ||||||||||
U.S. GAAP non-interest income | 23,627 | 34,865 | 23,360 | 19,953 | 15,068 | |||||||||||||||
Net revenue | $ | 126,970 | $ | 136,088 | $ | 123,210 | $ | 124,209 | $ | 114,273 | ||||||||||
Operating Profit | ||||||||||||||||||||
Taxable-equivalent net interest income(a) | $ | 103,343 | $ | 101,223 | $ | 99,850 | $ | 104,256 | $ | 99,205 | ||||||||||
U.S. GAAP non-interest income | 23,627 | 34,865 | 23,360 | 19,953 | 15,068 | |||||||||||||||
Less: U.S. GAAP non-interest expense | 75,349 | 82,148 | 68,077 | 76,002 | 73,371 | |||||||||||||||
Operating profit | $ | 51,621 | $ | 53,940 | $ | 55,133 | $ | 48,207 | $ | 40,902 | ||||||||||
Efficiency Ratio | ||||||||||||||||||||
U.S. GAAP non-interest expense(c) | $ | 75,349 | $ | 82,148 | $ | 68,077 | $ | 76,002 | $ | 73,371 | ||||||||||
Taxable-equivalent net interest income(a) | $ | 103,343 | $ | 101,223 | $ | 99,850 | $ | 104,256 | $ | 99,205 | ||||||||||
U.S. GAAP non-interest income | 23,627 | 34,865 | 23,360 | 19,953 | 15,068 | |||||||||||||||
Net revenue(d) | $ | 126,970 | $ | 136,088 | $ | 123,210 | $ | 124,209 | $ | 114,273 | ||||||||||
Efficiency ratio(c ) / (d) | 59.34 | % | 60.36 | % | 55.25 | % | 61.19 | % | 64.21 | % | ||||||||||
Note: Prior period net interest margin computations were modified to conform with the current period presentation.
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| Non-U.S. GAAP Measures (continued) | | |
Unaudited | ||
(Amounts in thousands except per share data) |
| Quarters Ending | ||||||||||||||||||||
| 1Q11 | 4Q10 | 3Q10 | 2Q10 | 1Q10 | ||||||||||||||||
Tier 1 Common Capital | ||||||||||||||||||||
U.S. GAAP total equity | $ | 1,238,132 | $ | 1,227,910 | $ | 1,245,139 | $ | 1,236,092 | $ | 1,220,227 | ||||||||||
Trust preferred securities | 244,793 | 244,793 | 244,793 | 244,793 | 244,793 | |||||||||||||||
Less: unrealized gains on available-for-sale securities | 19,121 | 20,078 | 48,776 | 47,758 | 33,403 | |||||||||||||||
Less: disallowed deferred tax assets | — | 5,377 | — | 6,360 | 17,267 | |||||||||||||||
Less: goodwill | 94,609 | 94,621 | 94,633 | 94,646 | 94,658 | |||||||||||||||
Less: other intangibles | 16,464 | 16,840 | 17,242 | 17,655 | 18,070 | |||||||||||||||
Tier 1 risk-based capital | 1,352,731 | 1,335,787 | 1,329,281 | 1,314,466 | 1,301,622 | |||||||||||||||
Less: preferred stock | 239,270 | 238,903 | 238,542 | 238,185 | 237,833 | |||||||||||||||
Less: trust preferred securities | 244,793 | 244,793 | 244,793 | 244,793 | 244,793 | |||||||||||||||
Less: noncontrolling interests | 105 | 33 | 250 | 179 | 103 | |||||||||||||||
Tier 1 common capital(e) | $ | 868,563 | $ | 852,058 | $ | 845,696 | $ | 831,309 | $ | 818,893 | ||||||||||
Tangible Common Equity | ||||||||||||||||||||
U.S. GAAP total equity | $ | 1,238,132 | $ | 1,227,910 | $ | 1,245,139 | $ | 1,236,092 | $ | 1,220,227 | ||||||||||
Less: goodwill | 94,609 | 94,621 | 94,633 | 94,646 | 94,658 | |||||||||||||||
Less: other intangibles | 16,464 | 16,840 | 17,242 | 17,655 | 18,070 | |||||||||||||||
Less: preferred stock | 239,270 | 238,903 | 238,542 | 238,185 | 237,833 | |||||||||||||||
Tangible common equity(f) | $ | 887,789 | $ | 877,546 | $ | 894,722 | $ | 885,606 | $ | 869,666 | ||||||||||
Tangible Assets | ||||||||||||||||||||
U.S. GAAP total assets | $ | 12,497,442 | $ | 12,465,621 | $ | 12,583,965 | $ | 12,611,040 | $ | 12,780,236 | ||||||||||
Less: goodwill | 94,609 | 94,621 | 94,633 | 94,646 | 94,658 | |||||||||||||||
Less: other intangibles | 16,464 | 16,840 | 17,242 | 17,655 | 18,070 | |||||||||||||||
Tangible assets(g) | $ | 12,386,369 | $ | 12,354,160 | $ | 12,472,090 | $ | 12,498,739 | $ | 12,667,508 | ||||||||||
Period-end Shares Outstanding(h) | 71,428 | 71,327 | 71,386 | 71,403 | 71,333 | |||||||||||||||
Risk-weighted Assets(i) | $ | 10,903,625 | $ | 11,080,051 | $ | 10,850,399 | $ | 10,571,135 | $ | 10,417,704 | ||||||||||
Ratios: | ||||||||||||||||||||
Tier 1 common capital(e) / (i) | 7.97 | % | 7.69 | % | 7.79 | % | 7.86 | % | 7.86 | % | ||||||||||
Tangible book value(f) / (h) | $ | 12.43 | $ | 12.30 | $ | 12.53 | $ | 12.40 | $ | 12.19 | ||||||||||
Tangible common equity to tangible assets(f) / (g) | 7.17 | % | 7.10 | % | 7.17 | % | 7.09 | % | 6.87 | % | ||||||||||
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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.
CDARS® deposit program - is a deposit services arrangement that effectively achieves FDIC deposit insurance for jumbo deposit relationships. These deposits are classified as brokered deposits for regulatory deposit purposes; however, we classify these deposits as client CDARS® due to the source being our existing and new client relationships and are, therefore, not traditional ‘brokered’ deposits. We also participate in a non-client CDARS® program that is more like a traditional brokered deposit program in that our relationship is with the underlying depositor.
Client deposits - Total deposits less brokered deposits plus client CDARSTM.
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 - The Company has 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. If any risk exists, we attempt to mitigate by structure, collateral, monitoring, or other meaningful controls. Credits rated 6 are considered special mention as these credits demonstrate potential weakness and 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. Potential problem loans have a risk rating of 7 and are considered inadequately protected by the current net worth and paying capacity of the obligor, the collateral pledged, or guarantors. These loans generally have a well defined weakness or weaknesses that may jeopardize liquidation of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not resolved. 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 minimum on a quarterly basis, while all other rated credits are reviewed 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 acquisition related gains, net securities gains (losses), and early extinguishment of debt divided by the sum of net interest income and non-interest income less acquisition related gains, net securities gains (losses) and early extinguishment of debt.
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 earning assets. 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.
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 measures may be found on the previous page.
Operating profit - The sum of taxable equivalent net interest income and non-interest income, less non-interest expense. This is a non-U.S. GAAP financial measure.
Risk-weighted assets - Computed by the assignment of specific risk-weights (as defined by the Board of Governors of the Federal Reserve System) 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.
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Glossary of Terms (continued)
Taxable-equivalent 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.
Tier 1 common capital ratio - Tier 1 common capital divided by period-end risk-weighted 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 losses on available for sale equity securities. Net unrealized holding gains on available-for-sale equity securities, net unrealized holding gains (losses) on available for sale debt securities and net unrealized holding gains (losses) on cash flow hedge derivatives are excluded from total equity for Tier 1 capital purposes.
Tier 1 risk-based capital ratio - Tier 1 risk-based capital divided by period-end risk-weighted assets.
Leverage ratio - Tier 1 risk-based capital divided by adjusted average total 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.
Transformational and legacy portfolios - We aggregate loans by originating line of business for reserve purposes because of observable similarities in the performance experience of loans underwritten by the business units. Loans originated by the business units that existed prior to the strategic changes in 2007 are considered “legacy” loans. Loans originated by a business unit that was established in connection with or following the business transformation plan are considered “transformational” loans. Renewals or restructurings of legacy loans may continue to be evaluated as legacy loans depending on the structure or defining characteristics of the new transaction. The Company has implemented a line of business model that has reorganized the legacy business units so that after 2009, all new loan originations are considered transformational.
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