HERITAGE FINANCIAL ANNOUNCES SECOND QUARTER 2024 RESULTS AND DECLARES REGULAR CASH DIVIDEND
Second Quarter 2024 Highlights
- Net income was
$14.2 million , or$0.41 per diluted share, for the second quarter compared to$5.7 million , or$0.16 per diluted share, for the first quarter. - The second quarter results include a loss on sale of securities of
$1.9 million , or$0.04 per diluted share. - Loans receivable increased
$104.5 million , or 2.4% (9.5% annualized), during the second quarter. - Net interest margin was 3.29% for the second quarter compared to 3.32% for the first quarter.
- Cost of total deposits was 1.34% for the second quarter compared to 1.19% for the first quarter.
- Noninterest expense to average total assets was 2.21% for the second quarter compared to 2.29% for the first quarter.
- Declared a regular cash dividend of
$0.23 per share onJuly 24, 2024 . - Announced CEO succession plan, with
Bryan McDonald named as President of and as Chief Executive Officer ofHeritage Financial Corporation Heritage Bank effectiveJuly 1, 2024 ;Jeff Deuel will continue as Chief Executive Officer ofHeritage Financial Corporation untilMay 6, 2025 .
In the second quarter of 2024, the Company incurred a pre-tax loss of
Financial Highlights
The following table provides financial highlights at the dates and for the periods indicated:
|
As of or for the Quarter Ended |
||||
|
|
|
|
|
|
|
(Dollars in thousands, except per share amounts) |
||||
Net income |
$ 14,159 |
|
$ 5,748 |
|
$ 16,846 |
Pre-tax, pre-provision income(1) |
$ 17,263 |
|
$ 8,260 |
|
$ 21,780 |
Diluted earnings per share |
$ 0.41 |
|
$ 0.16 |
|
$ 0.48 |
Return on average assets(2) |
0.80 % |
|
0.33 % |
|
0.95 % |
Pre-tax, pre-provision return on average assets(1)(2) |
0.98 % |
|
0.47 % |
|
1.22 % |
Return on average common equity(2) |
6.75 % |
|
2.73 % |
|
8.19 % |
Return on average tangible common equity(1)(2) |
9.74 % |
|
4.07 % |
|
12.04 % |
Adjusted return on average tangible common equity(1)(2) |
10.76 % |
|
9.34 % |
|
12.04 % |
Net interest margin(2) |
3.29 % |
|
3.32 % |
|
3.56 % |
Cost of total deposits(2) |
1.34 % |
|
1.19 % |
|
0.61 % |
Efficiency ratio |
69.4 % |
|
83.0 % |
|
65.5 % |
Adjusted efficiency ratio(1) |
67.1 % |
|
68.9 % |
|
65.5 % |
Noninterest expense to average total assets(2) |
2.21 % |
|
2.29 % |
|
2.32 % |
Total assets |
$ 7,059,857 |
|
$ 7,091,283 |
|
$ 7,115,410 |
Loans receivable, net |
$ 4,481,396 |
|
$ 4,378,429 |
|
$ 4,204,936 |
Total deposits |
$ 5,515,652 |
|
$ 5,532,327 |
|
$ 5,595,543 |
Loan to deposit ratio(3) |
82.2 % |
|
80.0 % |
|
76.0 % |
Book value per share |
$ 24.66 |
|
$ 24.43 |
|
$ 23.39 |
Tangible book value per share(1) |
$ 17.56 |
|
$ 17.36 |
|
$ 16.34 |
|
|
(1) |
Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" section for a reconciliation to the comparable GAAP financial measure. |
(2) |
Annualized. |
(3) |
Loans receivable divided by total deposits. |
Balance Sheet
Cash and cash equivalents decreased
Total investment securities decreased
The following table summarizes the composition of the Company's investment securities portfolio at the dates indicated:
|
|
|
|
|
Change |
||||||
|
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
$ |
|
% |
|
(Dollars in thousands) |
||||||||||
Investment securities available for sale, at fair value: |
|||||||||||
|
$ 12,474 |
|
0.8 % |
|
$ 13,417 |
|
0.8 % |
|
$ (943) |
|
(7.0) % |
Municipal securities |
69,720 |
|
4.2 |
|
71,955 |
|
4.2 |
|
(2,235) |
|
(3.1) |
Residential CMO and MBS |
446,468 |
|
26.9 |
|
476,742 |
|
27.5 |
|
(30,274) |
|
(6.4) |
Commercial CMO and MBS |
378,768 |
|
22.8 |
|
409,468 |
|
23.7 |
|
(30,700) |
|
(7.5) |
Corporate obligations |
11,384 |
|
0.7 |
|
11,191 |
|
0.6 |
|
193 |
|
1.7 |
Other asset-backed securities |
12,434 |
|
0.7 |
|
13,737 |
|
0.8 |
|
(1,303) |
|
(9.5) |
Total |
$ 931,248 |
|
56.1 % |
|
$ 996,510 |
|
57.6 % |
|
$ (65,262) |
|
(6.5) % |
Investment securities held to maturity, at amortized cost: |
|||||||||||
|
$ 151,146 |
|
9.1 % |
|
$ 151,110 |
|
8.7 % |
|
$ 36 |
|
— % |
Residential CMO and MBS |
256,742 |
|
15.5 |
|
262,359 |
|
15.2 |
|
(5,617) |
|
(2.1) |
Commercial CMO and MBS |
319,454 |
|
19.3 |
|
320,537 |
|
18.5 |
|
(1,083) |
|
(0.3) |
Total |
$ 727,342 |
|
43.9 % |
|
$ 734,006 |
|
42.4 % |
|
$ (6,664) |
|
(0.9) % |
|
|
|
|
|
|
|
|
|
|
|
|
Total investment securities |
$ 1,658,590 |
|
100.0 % |
|
$ 1,730,516 |
|
100.0 % |
|
$ (71,926) |
|
(4.2) % |
Loans receivable increased
Non-owner occupied CRE increased
The following table summarizes the Company's loans receivable, net at the dates indicated:
|
|
|
|
|
Change |
||||||
|
Balance |
|
% of |
|
Balance |
|
% of |
|
$ |
|
% |
|
(Dollars in thousands) |
||||||||||
Commercial business: |
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ 779,495 |
|
17.2 % |
|
$ 760,391 |
|
17.2 % |
|
$ 19,104 |
|
2.5 % |
Owner-occupied commercial real estate ("CRE") |
953,518 |
|
21.0 |
|
951,583 |
|
21.5 |
|
1,935 |
|
0.2 |
Non-owner occupied CRE |
1,759,605 |
|
38.8 |
|
1,702,665 |
|
38.4 |
|
56,940 |
|
3.3 |
Total commercial business |
3,492,618 |
|
77.0 |
|
3,414,639 |
|
77.1 |
|
77,979 |
|
2.3 |
Residential real estate |
413,358 |
|
9.1 |
|
386,357 |
|
8.7 |
|
27,001 |
|
7.0 |
Real estate construction and land development: |
|
|
|
|
|
|
|
|
|
|
|
Residential |
80,451 |
|
1.8 |
|
84,081 |
|
1.9 |
|
(3,630) |
|
(4.3) |
Commercial and multifamily |
378,695 |
|
8.4 |
|
372,532 |
|
8.4 |
|
6,163 |
|
1.7 |
Total real estate construction and land development |
459,146 |
|
10.2 |
|
456,613 |
|
10.3 |
|
2,533 |
|
0.6 |
Consumer |
167,493 |
|
3.7 |
|
170,556 |
|
3.9 |
|
(3,063) |
|
(1.8) |
Loans receivable |
4,532,615 |
|
100.0 % |
|
4,428,165 |
|
100.0 % |
|
104,450 |
|
2.4 |
Allowance for credit losses on loans |
(51,219) |
|
|
|
(49,736) |
|
|
|
(1,483) |
|
3.0 |
Loans receivable, net |
$ 4,481,396 |
|
|
|
$ 4,378,429 |
|
|
|
$ 102,967 |
|
2.4 % |
Total deposits decreased
The following table summarizes the Company's total deposits at the dates indicated:
|
|
|
|
|
Change |
||||||
|
Balance |
|
% of |
|
Balance |
|
% of |
|
$ |
|
% |
|
(Dollars in thousands) |
||||||||||
Noninterest demand deposits |
$ 1,599,367 |
|
29.0 % |
|
$ 1,637,111 |
|
29.5 % |
|
$ (37,744) |
|
(2.3) % |
Interest bearing demand deposits |
1,487,670 |
|
27.0 |
|
1,552,584 |
|
28.1 |
|
(64,914) |
|
(4.2) |
Money market accounts |
1,098,821 |
|
19.9 |
|
1,099,983 |
|
19.9 |
|
(1,162) |
|
(0.1) |
Savings accounts |
446,583 |
|
8.1 |
|
462,974 |
|
8.4 |
|
(16,391) |
|
(3.5) |
Total non-maturity deposits |
4,632,441 |
|
84.0 |
|
4,752,652 |
|
85.9 |
|
(120,211) |
|
(2.5) |
Certificates of deposit |
883,211 |
|
16.0 |
|
779,675 |
|
14.1 |
|
103,536 |
|
13.3 |
Total deposits |
$ 5,515,652 |
|
100.0 % |
|
$ 5,532,327 |
|
100.0 % |
|
$ (16,675) |
|
(0.3) % |
Total borrowings were
Total stockholders' equity increased
On
The following table summarizes the capital ratios for the Company at the dates indicated:
|
|
|
|
Stockholders' equity to total assets |
12.0 % |
|
12.0 % |
Tangible common equity to tangible assets (1) |
8.9 |
|
8.8 |
Common equity tier 1 capital ratio (2) |
12.6 |
|
12.6 |
Leverage ratio (2) |
10.1 |
|
10.0 |
Tier 1 capital ratio (2) |
13.0 |
|
13.0 |
Total capital ratio (2) |
13.9 |
|
13.9 |
|
|
(1) |
Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" section for a reconciliation to the comparable GAAP financial measure. |
(2) |
Current quarter ratios are estimates pending completion and filing of the Company's regulatory reports. |
Allowance for Credit Losses and Provision for Credit Losses
The allowance for credit losses ("ACL") on loans as a percentage of loans receivable was 1.13% at
During the second quarter of 2024, the Company recorded a
The following table provides detail on the changes in the ACL on loans and the ACL on unfunded commitments, and the related provision for (reversal of) credit losses for the periods indicated:
|
As of or for the Quarter Ended |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
ACL on |
|
ACL on |
|
Total |
|
ACL on |
|
ACL on |
|
Total |
|
ACL on |
|
ACL on |
|
Total |
|
(Dollars in thousands) |
||||||||||||||||
Balance, beginning of period |
|
|
$ 976 |
|
|
|
|
|
$ 1,288 |
|
|
|
|
|
$ 1,856 |
|
|
Provision for (reversal of) credit losses |
1,470 |
|
(202) |
|
1,268 |
|
1,704 |
|
(312) |
|
1,392 |
|
1,988 |
|
(79) |
|
1,909 |
Net recoveries (net charge-offs) |
13 |
|
— |
|
13 |
|
33 |
|
— |
— |
33 |
|
(49) |
|
— |
|
(49) |
Balance, end of period |
|
|
$ 774 |
|
|
|
|
|
$ 976 |
|
|
|
|
|
$ 1,777 |
|
|
Credit Quality
The percentage of classified loans to loans receivable increased to 1.8% at
The following table illustrates total loans by risk rating and their respective percentage of total loans at the dates indicated:
|
|
|
|
||||
|
Balance |
|
% of |
|
Balance |
|
% of Total |
|
(Dollars in thousands) |
||||||
Risk Rating: |
|
|
|
|
|
|
|
Pass |
$ 4,356,425 |
|
96.1 % |
|
$ 4,255,750 |
|
96.1 % |
Special Mention |
93,694 |
|
2.1 |
|
102,232 |
|
2.3 |
Substandard |
82,496 |
|
1.8 |
|
70,183 |
|
1.6 |
Total |
$ 4,532,615 |
|
100.0 % |
|
$ 4,428,165 |
|
100.0 % |
Nonaccrual loans to loans receivable were 0.08% and 0.11% at
|
Quarter Ended |
||||
|
|
|
|
|
|
|
(Dollars in thousands) |
||||
Balance, beginning of period |
$ 4,792 |
|
$ 4,468 |
|
$ 4,815 |
Additions |
549 |
|
593 |
|
— |
Net principal payments and transfers to accruing status |
(483) |
|
(269) |
|
(185) |
Payoffs |
(769) |
|
— |
|
— |
Charge-offs |
(263) |
|
— |
|
— |
Balance, end of period |
$ 3,826 |
|
$ 4,792 |
|
$ 4,630 |
Liquidity
Total liquidity sources available at
The following table summarizes the Company's available liquidity:
|
Quarter Ended |
||
|
|
|
|
|
(Dollars in thousands) |
||
On-balance sheet liquidity |
|
|
|
Cash and cash equivalents |
$ 113,757 |
|
$ 189,647 |
Unencumbered investment securities available for sale (1) |
926,822 |
|
708,378 |
Total on-balance sheet liquidity |
$ 1,040,579 |
|
$ 898,025 |
Off-balance sheet liquidity |
|
|
|
FRB borrowing availability |
$ 278,632 |
|
$ 71,300 |
FHLB borrowing availability (2) |
943,492 |
|
1,384,631 |
Fed funds line borrowing availability with correspondent banks |
145,000 |
|
145,000 |
Total off-balance sheet liquidity |
$ 1,367,124 |
|
$ 1,600,931 |
Total available liquidity |
$ 2,407,703 |
|
$ 2,498,956 |
|
|
(1) |
Investment securities available for sale at fair value. |
(2) |
Includes FHLB total borrowing availability of |
Net Interest Income and Net Interest Margin
Net interest income decreased
The cost of interest bearing deposits increased 19 basis points to 1.89% for the second quarter of 2024 from 1.70% for the first quarter of 2024. This increase was primarily due to customers transferring balances from non-maturity deposits to higher rate certificates of deposit.
The yield on interest earning assets increased 14 basis points to 4.93% for the second quarter of 2024, compared to 4.79% for the first quarter of 2024. The yield on loans receivable, net, increased 11 basis points to 5.52% during the second quarter of 2024 compared to 5.41% during the first quarter of 2024 due primarily to higher rates on new and renewed loans. The impact to loan yield from recoveries of interest and fees on loans classified as nonaccrual was three basis points during the second quarter of 2024, compared to no impact during the first quarter of 2024. The yield on taxable securities increased nine basis points to 3.38% during the second quarter of 2024 compared to 3.29% during the first quarter of 2024 due primarily to sales of lower yielding investments during the first and second quarters of 2024.
Net interest income decreased
The following table provides relevant net interest income information for the periods indicated:
|
Quarter Ended |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
Average Balance |
|
Interest Earned/ Paid |
|
Average |
|
Average Balance |
|
Interest Earned/ Paid |
|
Average |
|
Average Balance |
|
Interest Earned/ Paid |
|
Average |
|
(Dollars in thousands) |
||||||||||||||||
Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net (2)(3) |
|
|
|
|
5.52 % |
|
|
|
|
|
5.41 % |
|
|
|
|
|
5.19 % |
Taxable securities |
1,685,795 |
|
14,156 |
|
3.38 |
|
1,810,709 |
|
14,834 |
|
3.29 |
|
1,989,297 |
|
14,774 |
|
2.98 |
Nontaxable securities (3) |
18,812 |
|
165 |
|
3.53 |
|
21,302 |
|
181 |
|
3.42 |
|
71,803 |
|
520 |
|
2.90 |
Interest earning deposits |
121,539 |
|
1,653 |
|
5.47 |
|
108,733 |
|
1,476 |
|
5.46 |
|
90,754 |
|
1,154 |
|
5.10 |
Total interest earning assets |
6,241,936 |
|
76,582 |
|
4.93 % |
|
6,244,138 |
|
74,353 |
|
4.79 % |
|
6,297,410 |
|
70,071 |
|
4.46 % |
Noninterest earning assets |
864,855 |
|
|
|
|
|
848,314 |
|
|
|
|
|
845,455 |
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit |
$ 838,285 |
|
$ 9,128 |
|
4.38 % |
|
$ 733,816 |
|
$ 7,671 |
|
4.20 % |
|
$ 421,451 |
|
$ 2,483 |
|
2.36 % |
Savings accounts |
453,099 |
|
190 |
|
0.17 |
|
475,075 |
|
230 |
|
0.19 |
|
551,201 |
|
157 |
|
0.11 |
Interest bearing demand and money market accounts |
2,625,593 |
|
9,135 |
|
1.40 |
|
2,659,999 |
|
8,487 |
|
1.28 |
|
2,782,353 |
|
5,967 |
|
0.86 |
Total interest bearing deposits |
3,916,977 |
|
18,453 |
|
1.89 |
|
3,868,890 |
|
16,388 |
|
1.70 |
|
3,755,005 |
|
8,607 |
|
0.92 |
Junior subordinated debentures |
21,874 |
|
539 |
|
9.91 |
|
21,800 |
|
547 |
|
10.09 |
|
21,577 |
|
499 |
|
9.28 |
Securities sold under agreement to repurchase |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
39,755 |
|
63 |
|
0.64 |
Borrowings |
500,230 |
|
6,477 |
|
5.21 |
|
500,660 |
|
5,888 |
|
4.73 |
|
417,896 |
|
5,078 |
|
4.87 |
Total interest bearing liabilities |
4,439,081 |
|
25,469 |
|
2.31 % |
|
4,391,350 |
|
22,823 |
|
2.09 % |
|
4,234,233 |
|
14,247 |
|
1.35 % |
Noninterest demand deposits |
1,638,262 |
|
|
|
|
|
1,657,132 |
|
|
|
|
|
1,900,640 |
|
|
|
|
Other noninterest bearing liabilities |
186,010 |
|
|
|
|
|
197,023 |
|
|
|
|
|
183,250 |
|
|
|
|
Stockholders' equity |
843,438 |
|
|
|
|
|
846,947 |
|
|
|
|
|
824,742 |
|
|
|
|
Total liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income and spread |
|
|
|
|
2.62 % |
|
|
|
|
|
2.70 % |
|
|
|
|
|
3.11 % |
Net interest margin |
|
|
|
|
3.29 % |
|
|
|
|
|
3.32 % |
|
|
|
|
|
3.56 % |
|
|
(1) |
Annualized; average balances are calculated using daily balances. |
(2) |
Average loans receivable, net includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable, net includes the amortization of net deferred loan fees of |
(3) |
Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis. |
Noninterest Income
Noninterest income increased
Noninterest income decreased
The following table presents the key components of noninterest income and the change for the periods indicated:
|
Quarter Ended |
|
Quarter Over |
|
Prior Year Quarter Change |
||||||||
|
|
|
|
|
|
|
$ |
|
% |
|
$ |
|
% |
|
(Dollars in thousands) |
||||||||||||
Service charges and other fees |
$ 2,817 |
|
$ 2,788 |
|
$ 2,682 |
|
$ 29 |
|
1.0 % |
|
$ 135 |
|
5.0 % |
Card revenue |
1,930 |
|
1,839 |
|
2,123 |
|
91 |
|
4.9 |
|
(193) |
|
(9.1) |
Loss on sale of investment securities |
(1,921) |
|
(9,973) |
|
— |
|
8,052 |
|
(80.7) |
|
(1,921) |
|
(100.0) |
Gain on sale of loans, net |
— |
|
26 |
|
101 |
|
(26) |
|
(100.0) |
|
(101) |
|
(100.0) |
Interest rate swap fees |
52 |
|
— |
|
115 |
|
52 |
|
— |
|
(63) |
|
(54.8) |
Bank owned life insurance income |
931 |
|
920 |
|
837 |
|
11 |
|
1.2 |
|
94 |
|
11.2 |
Gain on sale of other assets, net |
49 |
|
— |
|
— |
|
49 |
|
— |
|
49 |
|
100.0 |
Other income |
1,388 |
|
1,500 |
|
1,423 |
|
(112) |
|
(7.5) |
|
(35) |
|
(2.5) |
Total noninterest income (loss) |
$ 5,246 |
|
$ (2,900) |
|
$ 7,281 |
|
$ 8,146 |
|
(280.9) % |
|
$ (2,035) |
|
(27.9) % |
Noninterest Expense
Noninterest expense decreased
Noninterest expense decreased
The following table presents the key components of noninterest expense and the change for the periods indicated:
|
Quarter Ended |
|
Quarter Over |
|
Prior Year |
||||||||
|
|
|
|
|
|
|
$ |
|
% |
|
$ |
|
% |
|
(Dollars in thousands) |
||||||||||||
Compensation and employee benefits |
$ 24,448 |
|
$ 25,476 |
|
$ 24,781 |
|
$ (1,028) |
|
(4.0) % |
|
$ (333) |
|
(1.3) % |
Occupancy and equipment |
4,765 |
|
4,932 |
|
4,666 |
|
(167) |
|
(3.4) |
|
99 |
|
2.1 |
Data processing |
3,785 |
|
3,537 |
|
4,500 |
|
248 |
|
7.0 |
|
(715) |
|
(15.9) |
Marketing |
244 |
|
211 |
|
441 |
|
33 |
|
15.6 |
|
(197) |
|
(44.7) |
Professional services |
795 |
|
567 |
|
751 |
|
228 |
|
40.2 |
|
44 |
|
5.9 |
State/municipal business and use taxes |
1,160 |
|
1,300 |
|
1,054 |
|
(140) |
|
(10.8) |
|
106 |
|
10.1 |
Federal deposit insurance premium |
812 |
|
795 |
|
797 |
|
17 |
|
2.1 |
|
15 |
|
1.9 |
Amortization of intangible assets |
421 |
|
421 |
|
623 |
|
— |
|
— |
|
(202) |
|
(32.4) |
Other expense |
2,666 |
|
3,131 |
|
3,712 |
|
(465) |
|
(14.9) |
|
(1,046) |
|
(28.2) |
Total noninterest expense |
$ 39,096 |
|
$ 40,370 |
|
$ 41,325 |
|
$ (1,274) |
|
(3.2) % |
|
$ (2,229) |
|
(5.4) % |
Income Tax Expense
Income tax expense increased
Income tax expense decreased during the second quarter of 2024 compared to the second quarter of 2023 due to lower pre-tax income during the second quarter of 2024. The effective tax rate declined due to lower pre-tax income which increased the impact of favorable permanent tax items such as tax-exempt investments, investments in bank owned life insurance and tax credits.
The following table presents the income tax expense and related metrics and the change for the periods indicated:
|
Quarter Ended |
|
Change |
||||||
|
|
|
|
|
|
|
Quarter Over |
Prior Year |
|
|
(Dollars in thousands) |
||||||||
Income before income taxes |
$ 15,995 |
|
$ 6,868 |
|
$ 19,871 |
|
$ 9,127 |
|
$ (3,876) |
Income tax expense |
$ 1,836 |
|
$ 1,120 |
|
$ 3,025 |
|
$ 716 |
|
$ (1,189) |
Effective income tax rate |
11.5 % |
|
16.3 % |
|
15.2 % |
|
(4.8) % |
|
(3.7) % |
Dividends
On
Earnings Conference Call
The Company will hold a telephone conference call to discuss this earnings release on
About
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause our actual results to differ materially from those described in the forward-looking statements include, but are not limited to, the following: changes in general economic conditions generally, and in the financial services industry, nationally or in our local market areas, other markets where our lending relationships, or other aspects of our business operations or financial markets including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth, or increased political instability due to acts of war or terrorism; changes in the interest rate environment, including prior increases in the
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) |
|||||
(Dollars in thousands, except shares) |
|||||
|
|||||
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash on hand and in banks |
$ 55,469 |
|
$ 52,947 |
|
$ 55,851 |
Interest earning deposits |
58,288 |
|
136,700 |
|
169,122 |
Cash and cash equivalents |
113,757 |
|
189,647 |
|
224,973 |
Investment securities available for sale, at fair value (amortized cost of |
931,248 |
|
996,510 |
|
1,134,353 |
Investment securities held to maturity, at amortized cost (fair value of |
727,342 |
|
734,006 |
|
739,442 |
Total investment securities |
1,658,590 |
|
1,730,516 |
|
1,873,795 |
Loans receivable |
4,532,615 |
|
4,428,165 |
|
4,335,627 |
Allowance for credit losses on loans |
(51,219) |
|
(49,736) |
|
(47,999) |
Loans receivable, net |
4,481,396 |
|
4,378,429 |
|
4,287,628 |
Premises and equipment, net |
73,218 |
|
74,092 |
|
74,899 |
|
22,303 |
|
4,303 |
|
4,186 |
Bank owned life insurance |
126,420 |
|
125,615 |
|
125,655 |
Accrued interest receivable |
19,855 |
|
19,898 |
|
19,518 |
Prepaid expenses and other assets |
319,428 |
|
323,472 |
|
318,571 |
Other intangible assets, net |
3,951 |
|
4,372 |
|
4,793 |
|
240,939 |
|
240,939 |
|
240,939 |
Total assets |
$ 7,059,857 |
|
$ 7,091,283 |
|
$ 7,174,957 |
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Non-interest bearing deposits |
$ 1,599,367 |
|
$ 1,637,111 |
|
$ 1,715,847 |
Interest bearing deposits |
3,916,285 |
|
3,895,216 |
|
3,884,025 |
Total deposits |
5,515,652 |
|
5,532,327 |
|
5,599,872 |
Borrowings |
500,000 |
|
500,000 |
|
500,000 |
Junior subordinated debentures |
21,912 |
|
21,838 |
|
21,765 |
Accrued expenses and other liabilities |
171,786 |
|
189,538 |
|
200,059 |
Total liabilities |
6,209,350 |
|
6,243,703 |
|
6,321,696 |
|
|
|
|
|
|
Common stock |
541,294 |
|
544,636 |
|
549,748 |
Retained earnings |
379,714 |
|
373,629 |
|
375,989 |
Accumulated other comprehensive loss, net |
(70,501) |
|
(70,685) |
|
(72,476) |
Total stockholders' equity |
850,507 |
|
847,580 |
|
853,261 |
Total liabilities and stockholders' equity |
$ 7,059,857 |
|
$ 7,091,283 |
|
$ 7,174,957 |
|
|
|
|
|
|
Shares outstanding |
34,496,197 |
|
34,689,843 |
|
34,906,233 |
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
|||||||||
(Dollars in thousands, except per share amounts) |
|||||||||
|
|||||||||
|
Quarter Ended |
|
Six Months Ended |
||||||
|
|
|
|
|
|
|
|
|
|
Interest Income |
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ 60,608 |
|
$ 57,862 |
|
$ 53,623 |
|
$ 118,470 |
|
$ 104,073 |
Taxable interest on investment securities |
14,156 |
|
14,834 |
|
14,774 |
|
28,990 |
|
29,431 |
Nontaxable interest on investment securities |
165 |
|
181 |
|
520 |
|
346 |
|
1,106 |
Interest on interest earning deposits |
1,653 |
|
1,476 |
|
1,154 |
|
3,129 |
|
2,126 |
Total interest income |
76,582 |
|
74,353 |
|
70,071 |
|
150,935 |
|
136,736 |
Interest Expense |
|
|
|
|
|
|
|
|
|
Deposits |
18,453 |
|
16,388 |
|
8,607 |
|
34,841 |
|
13,135 |
Junior subordinated debentures |
539 |
|
547 |
|
499 |
|
1,086 |
|
981 |
Securities sold under agreement to repurchase |
— |
|
— |
|
63 |
|
— |
|
110 |
Borrowings |
6,477 |
|
5,888 |
|
5,078 |
|
12,365 |
|
6,844 |
Total interest expense |
25,469 |
|
22,823 |
|
14,247 |
|
48,292 |
|
21,070 |
Net interest income |
51,113 |
|
51,530 |
|
55,824 |
|
102,643 |
|
115,666 |
Provision for credit losses |
1,268 |
|
1,392 |
|
1,909 |
|
2,660 |
|
3,734 |
Net interest income after provision for credit losses |
49,845 |
|
50,138 |
|
53,915 |
|
99,983 |
|
111,932 |
Noninterest Income |
|
|
|
|
|
|
|
|
|
Service charges and other fees |
2,817 |
|
2,788 |
|
2,682 |
|
5,605 |
|
5,306 |
Card revenue |
1,930 |
|
1,839 |
|
2,123 |
|
3,769 |
|
4,123 |
Loss on sale of investment securities, net |
(1,921) |
|
(9,973) |
|
— |
|
(11,894) |
|
(286) |
Gain on sale of loans, net |
— |
|
26 |
|
101 |
|
26 |
|
150 |
Interest rate swap fees |
52 |
|
— |
|
115 |
|
52 |
|
168 |
Bank owned life insurance income |
931 |
|
920 |
|
837 |
|
1,851 |
|
1,546 |
Gain on sale of other assets, net |
49 |
|
— |
|
— |
|
49 |
|
2 |
Other income |
1,388 |
|
1,500 |
|
1,423 |
|
2,888 |
|
4,530 |
Total noninterest income (loss) |
5,246 |
|
(2,900) |
|
7,281 |
|
2,346 |
|
15,539 |
Noninterest Expense |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
24,448 |
|
25,476 |
|
24,781 |
|
49,924 |
|
50,317 |
Occupancy and equipment |
4,765 |
|
4,932 |
|
4,666 |
|
9,697 |
|
9,558 |
Data processing |
3,785 |
|
3,537 |
|
4,500 |
|
7,322 |
|
8,842 |
Marketing |
244 |
|
211 |
|
441 |
|
455 |
|
843 |
Professional services |
795 |
|
567 |
|
751 |
|
1,362 |
|
1,379 |
State/municipal business and use taxes |
1,160 |
|
1,300 |
|
1,054 |
|
2,460 |
|
2,062 |
Federal deposit insurance premium |
812 |
|
795 |
|
797 |
|
1,607 |
|
1,647 |
Amortization of intangible assets |
421 |
|
421 |
|
623 |
|
842 |
|
1,246 |
Other expense |
2,666 |
|
3,131 |
|
3,712 |
|
5,797 |
|
7,036 |
Total noninterest expense |
39,096 |
|
40,370 |
|
41,325 |
|
79,466 |
|
82,930 |
Income before income taxes |
15,995 |
|
6,868 |
|
19,871 |
|
22,863 |
|
44,541 |
Income tax expense |
1,836 |
|
1,120 |
|
3,025 |
|
2,956 |
|
7,238 |
Net income |
$ 14,159 |
|
$ 5,748 |
|
$ 16,846 |
|
$ 19,907 |
|
$ 37,303 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ 0.41 |
|
$ 0.17 |
|
$ 0.48 |
|
$ 0.58 |
|
$ 1.06 |
Diluted earnings per share |
$ 0.41 |
|
$ 0.16 |
|
$ 0.48 |
|
$ 0.57 |
|
$ 1.06 |
Dividends declared per share |
$ 0.23 |
|
$ 0.23 |
|
$ 0.22 |
|
$ 0.46 |
|
$ 0.44 |
Average shares outstanding - basic |
34,609,900 |
|
34,825,471 |
|
35,058,155 |
|
34,717,685 |
|
35,083,133 |
Average shares outstanding - diluted |
34,919,395 |
|
35,227,138 |
|
35,126,590 |
|
35,127,407 |
|
35,348,268 |
|
|||||||||||
FINANCIAL STATISTICS (Unaudited) |
|||||||||||
(Dollars in thousands) |
|||||||||||
|
|||||||||||
Average Balances, Yields, and Rates Paid: |
|||||||||||
|
|||||||||||
|
Six Months Ended |
||||||||||
|
2024 |
|
2023 |
||||||||
|
Average Balance |
|
Interest Earned/ Paid |
|
Average |
|
Average Balance |
|
Interest Earned/ Paid |
|
Average |
Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net(2)(3) |
|
|
$ 118,470 |
|
5.46 % |
|
|
|
$ 104,073 |
|
5.13 % |
Taxable securities |
1,748,252 |
|
28,990 |
|
3.33 |
|
1,998,268 |
|
29,431 |
|
2.97 |
Nontaxable securities(3) |
20,057 |
|
346 |
|
3.47 |
|
77,317 |
|
1,106 |
|
2.88 |
Interest earning deposits |
115,136 |
|
3,129 |
|
5.47 |
|
87,086 |
|
2,126 |
|
4.92 |
Total interest earning assets |
6,243,037 |
|
150,935 |
|
4.86 % |
|
6,255,440 |
|
136,736 |
|
4.41 % |
Noninterest earning assets |
856,584 |
|
|
|
|
|
847,195 |
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit |
$ 786,050 |
|
|
|
4.30 % |
|
$ 386,026 |
|
$ 3,707 |
|
1.94 % |
Savings accounts |
464,087 |
|
420 |
|
0.18 |
|
576,046 |
|
299 |
|
0.10 |
Interest bearing demand and money market accounts |
2,642,796 |
|
17,622 |
|
1.34 |
|
2,805,645 |
|
9,129 |
|
0.66 |
Total interest bearing deposits |
3,892,933 |
|
34,841 |
|
1.80 |
|
3,767,717 |
|
13,135 |
|
0.70 |
Junior subordinated debentures |
21,837 |
|
1,086 |
|
10.00 |
|
21,539 |
|
981 |
|
9.18 |
Securities sold under agreement to repurchase |
— |
|
— |
|
— |
|
41,469 |
|
110 |
|
0.53 |
Borrowings |
500,445 |
|
12,365 |
|
4.97 |
|
282,502 |
|
6,844 |
|
4.89 |
Total interest bearing liabilities |
4,415,215 |
|
48,292 |
|
2.20 % |
|
4,113,227 |
|
21,070 |
|
1.03 % |
Noninterest demand deposits |
1,647,697 |
|
|
|
|
|
1,984,200 |
|
|
|
|
Other noninterest bearing liabilities |
191,516 |
|
|
|
|
|
186,553 |
|
|
|
|
Stockholders' equity |
845,193 |
|
|
|
|
|
818,655 |
|
|
|
|
Total liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
Net interest income and spread |
|
|
$ 102,643 |
|
2.66 % |
|
|
|
$ 115,666 |
|
3.38 % |
Net interest margin |
|
|
|
|
3.31 % |
|
|
|
|
|
3.73 % |
|
|
(1) |
Average balances are calculated using daily balances. |
(2) |
Average loans receivable, net includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable, net includes the amortization of net deferred loan fees of |
(3) |
Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis. |
|
|||||||||
FINANCIAL STATISTICS (Unaudited) |
|||||||||
(Dollars in thousands) |
|||||||||
|
|||||||||
Nonperforming Assets and Credit Quality Metrics: |
|||||||||
|
|||||||||
|
Quarter Ended |
|
Six Months Ended |
||||||
|
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses on Loans: |
|
|
|
|
|||||
Balance, beginning of period |
$ 49,736 |
|
$ 47,999 |
|
$ 44,469 |
|
$ 47,999 |
|
$ 42,986 |
Provision for credit losses on loans |
1,470 |
|
1,704 |
|
1,988 |
|
3,174 |
|
3,701 |
Charge-offs: |
|
|
|
|
|
|
|
|
|
Commercial business |
(312) |
|
(77) |
|
— |
|
(389) |
|
(161) |
Consumer |
(238) |
|
(123) |
|
(144) |
|
(361) |
|
(297) |
Total charge-offs |
(550) |
|
(200) |
|
(144) |
|
(750) |
|
(458) |
Recoveries: |
|
|
|
|
|
|
|
|
|
Commercial business |
518 |
|
217 |
|
38 |
|
735 |
|
89 |
Consumer |
45 |
|
16 |
|
57 |
|
61 |
|
90 |
Total recoveries |
563 |
|
233 |
|
95 |
|
796 |
|
179 |
Net recoveries (charge-offs) |
13 |
|
33 |
|
(49) |
|
46 |
|
(279) |
Balance, end of period |
$ 51,219 |
|
$ 49,736 |
|
$ 46,408 |
|
$ 51,219 |
|
$ 46,408 |
Net charge-offs (recoveries) on loans to average loans receivable, net(1) |
— % |
|
— % |
|
— % |
|
— % |
|
0.01 % |
|
|
(1) |
Annualized. |
|
|
|
|
|
|
Nonperforming Assets: |
|
|
|
|
|
Nonaccrual loans: |
|
|
|
|
|
Commercial business |
$ 3,826 |
|
$ 4,792 |
|
$ 4,468 |
Total nonaccrual loans |
3,826 |
|
4,792 |
|
4,468 |
Accruing loans past due 90 days or more |
4,296 |
|
2,628 |
|
1,293 |
Total nonperforming loans |
8,122 |
|
7,420 |
|
5,761 |
Other real estate owned |
— |
|
— |
|
— |
Nonperforming assets |
$ 8,122 |
|
$ 7,420 |
|
$ 5,761 |
|
|
|
|
|
|
ACL on loans to: |
|
|
|
|
|
Loans receivable |
1.13 % |
|
1.12 % |
|
1.11 % |
Nonaccrual loans |
1,338.71 % |
|
1,037.90 % |
|
1,074.28 % |
Nonaccrual loans to loans receivable |
0.08 % |
|
0.11 % |
|
0.10 % |
Nonperforming loans to loans receivable |
0.18 % |
|
0.17 % |
|
0.13 % |
Nonperforming assets to total assets |
0.12 % |
|
0.10 % |
|
0.08 % |
|
|||||||||
QUARTERLY FINANCIAL STATISTICS (Unaudited) |
|||||||||
(Dollars in thousands, except per share amounts) |
|||||||||
|
|||||||||
|
Quarter Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
Earnings: |
|
|
|
|
|
|
|
|
|
Net interest income |
$ 51,113 |
|
$ 51,530 |
|
$ 53,871 |
|
$ 55,618 |
|
$ 55,824 |
Provision for (reversal of) credit losses |
1,268 |
|
1,392 |
|
1,424 |
|
(878) |
|
1,909 |
Noninterest income (loss) |
5,246 |
|
(2,900) |
|
(3,147) |
|
6,271 |
|
7,281 |
Noninterest expense |
39,096 |
|
40,370 |
|
42,723 |
|
40,970 |
|
41,325 |
Net income |
14,159 |
|
5,748 |
|
6,233 |
|
18,219 |
|
16,846 |
Pre-tax, pre-provision net income (1) |
17,263 |
|
8,260 |
|
8,001 |
|
20,919 |
|
21,780 |
Basic earnings per share |
$ 0.41 |
|
$ 0.17 |
|
$ 0.18 |
|
$ 0.52 |
|
$ 0.48 |
Diluted earnings per share |
$ 0.41 |
|
$ 0.16 |
|
$ 0.18 |
|
$ 0.51 |
|
$ 0.48 |
Average Balances: |
|
|
|
|
|
|
|
|
|
Loans receivable, net (2) |
$ 4,415,790 |
|
$ 4,303,394 |
|
$ 4,233,743 |
|
$ 4,201,554 |
|
$ 4,145,556 |
Total investment securities |
1,704,607 |
|
1,832,011 |
|
1,861,587 |
|
1,992,303 |
|
2,061,100 |
Total interest earning assets |
6,241,936 |
|
6,244,138 |
|
6,269,805 |
|
6,363,043 |
|
6,297,410 |
Total assets |
7,106,791 |
|
7,092,452 |
|
7,140,876 |
|
7,212,732 |
|
7,142,865 |
Total interest bearing deposits |
3,916,977 |
|
3,868,890 |
|
3,849,067 |
|
3,841,148 |
|
3,755,005 |
Total noninterest demand deposits |
1,638,262 |
|
1,657,132 |
|
1,772,261 |
|
1,859,374 |
|
1,900,640 |
Stockholders' equity |
843,438 |
|
846,947 |
|
813,383 |
|
821,494 |
|
824,742 |
Financial Ratios: |
|
|
|
|
|
|
|
|
|
Return on average assets (3) |
0.80 % |
|
0.33 % |
|
0.35 % |
|
1.00 % |
|
0.95 % |
Pre-tax, pre-provision return on average assets (1)(3) |
0.98 |
|
0.47 |
|
0.44 |
|
1.15 |
|
1.22 |
Return on average common equity (3) |
6.75 |
|
2.73 |
|
3.04 |
|
8.80 |
|
8.19 |
Return on average tangible common equity (1)(3) |
9.74 |
|
4.07 |
|
4.69 |
|
12.90 |
|
12.04 |
Adjusted return on average tangible common equity (1)(3) |
10.76 |
|
9.34 |
|
10.21 |
|
13.62 |
|
12.04 |
Efficiency ratio |
69.4 |
|
83.0 |
|
84.2 |
|
66.2 |
|
65.5 |
Adjusted efficiency ratio |
67.1 |
|
68.9 |
|
70.4 |
|
64.8 |
|
65.5 |
Noninterest expense to average total assets (3) |
2.21 |
|
2.29 |
|
2.37 |
|
2.25 |
|
2.32 |
Net interest spread (3) |
2.62 |
|
2.70 |
|
2.84 |
|
2.95 |
|
3.11 |
Net interest margin (3) |
3.29 |
|
3.32 |
|
3.41 |
|
3.47 |
|
3.56 |
|
|
(1) |
Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" section for a reconciliation to the comparable GAAP financial measure. |
(2) |
Average loans receivable, net includes loans held for sale. |
(3) |
Annualized. |
|
|||||||||
QUARTERLY FINANCIAL STATISTICS (Unaudited) |
|||||||||
(Dollars in thousands, except per share amounts) |
|||||||||
|
|||||||||
|
As of or for the Quarter Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
Select Balance Sheet: |
|
|
|
|
|
|
|
|
|
Total assets |
$ 7,059,857 |
|
$ 7,091,283 |
|
$ 7,174,957 |
|
$ 7,150,588 |
|
$ 7,115,410 |
Loans receivable, net |
4,481,396 |
|
4,378,429 |
|
4,287,628 |
|
4,219,911 |
|
4,204,936 |
Total investment securities |
1,658,590 |
|
1,730,516 |
|
1,873,795 |
|
1,894,392 |
|
2,030,826 |
Total deposits |
5,515,652 |
|
5,532,327 |
|
5,599,872 |
|
5,635,187 |
|
5,595,543 |
Noninterest demand deposits |
1,599,367 |
|
1,637,111 |
|
1,715,847 |
|
1,789,293 |
|
1,857,492 |
Stockholders' equity |
850,507 |
|
847,580 |
|
853,261 |
|
813,546 |
|
819,733 |
Financial Measures: |
|
|
|
|
|
|
|
|
|
Book value per share |
$ 24.66 |
|
$ 24.43 |
|
$ 24.44 |
|
$ 23.31 |
|
$ 23.39 |
Tangible book value per share (1) |
17.56 |
|
17.36 |
|
17.40 |
|
16.25 |
|
16.34 |
Stockholders' equity to total assets |
12.0 % |
|
12.0 % |
|
11.9 % |
|
11.4 % |
|
11.5 % |
Tangible common equity to tangible assets (1) |
8.9 |
|
8.8 |
|
8.8 |
|
8.2 |
|
8.3 |
Loans to deposits ratio |
82.2 |
|
80.0 |
|
77.4 |
|
75.7 |
|
76.0 |
Regulatory Capital Ratios:(2) |
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital ratio |
12.6 % |
|
12.6 % |
|
12.9 % |
|
12.9 % |
|
12.8 % |
Leverage ratio |
10.1 |
|
10.0 |
|
10.0 |
|
9.9 |
|
9.9 |
Tier 1 capital ratio |
13.0 |
|
13.0 |
|
13.3 |
|
13.3 |
|
13.2 |
Total capital ratio |
13.9 |
|
13.9 |
|
14.1 |
|
14.1 |
|
14.1 |
Credit Quality Metrics: |
|
|
|
|
|
|
|
|
|
ACL on loans to: |
|
|
|
|
|
|
|
|
|
Loans receivable |
1.13 % |
|
1.12 % |
|
1.11 % |
|
1.10 % |
|
1.09 % |
Nonperforming loans |
1,338.7 |
|
1,037.9 |
|
1,074.3 |
|
1,531.7 |
|
1,002.3 |
Nonaccrual loans to loans receivable |
0.08 |
|
0.11 |
|
0.10 |
|
0.07 |
|
0.11 |
Nonperforming loans to loans receivable |
0.18 |
|
0.17 |
|
0.13 |
|
0.12 |
|
0.16 |
Nonperforming assets to total assets |
0.12 |
|
0.10 |
|
0.08 |
|
0.07 |
|
0.10 |
Net charge-offs (recoveries) on loans to average loans receivable, net(3) |
0.00 |
|
0.00 |
|
0.06 |
|
(0.11) |
|
0.00 |
Criticized Loans by Credit Quality Rating: |
|||||||||
Special mention |
$ 93,694 |
|
$ 102,232 |
|
$ 79,977 |
|
$ 72,152 |
|
$ 84,623 |
Substandard |
82,496 |
|
70,183 |
|
69,757 |
|
62,653 |
|
58,653 |
Other Metrics: |
|
|
|
|
|
|
|
|
|
Number of banking offices |
50 |
|
50 |
|
50 |
|
50 |
|
51 |
Deposits per branch |
$ 110,313 |
|
$ 110,647 |
|
$ 111,997 |
|
$ 112,704 |
|
$ 109,717 |
Average number of full-time equivalent employees |
748 |
|
765 |
|
803 |
|
821 |
|
813 |
Average assets per full-time equivalent employee |
9,501 |
|
9,271 |
|
8,893 |
|
8,785 |
|
8,786 |
|
|
(1) |
See Non-GAAP Financial Measures section herein. |
(2) |
Current quarter ratios are estimates pending completion and filing of the Company's regulatory reports. |
(3) |
Annualized. |
NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share amounts)
This earnings release contains certain financial measures not presented in accordance with Generally Accepted Accounting Principles ("GAAP") in addition to financial measures presented in accordance with GAAP. The Company has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company's capital, performance and asset quality reflected in the current quarter and comparable period results and to facilitate comparison of its performance with the performance of its peers. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for financial measures presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of the non-GAAP measures used in this earnings release to the comparable GAAP measures are presented below.
The Company considers the tangible common equity to tangible assets ratio and tangible book value per share to be useful measurements of the adequacy of the Company's capital levels.
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share: |
|||||||||
Total stockholders' equity (GAAP) |
$ 850,507 |
|
$ 847,580 |
|
$ 853,261 |
|
$ 813,546 |
|
$ 819,733 |
Exclude intangible assets |
(244,890) |
|
(245,311) |
|
(245,732) |
|
(246,325) |
|
(246,920) |
Tangible common equity (non-GAAP) |
$ 605,617 |
|
$ 602,269 |
|
$ 607,529 |
|
$ 567,221 |
|
$ 572,813 |
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
$ 7,059,857 |
|
$ 7,091,283 |
|
$ 7,174,957 |
|
$ 7,150,588 |
|
$ 7,115,410 |
Exclude intangible assets |
(244,890) |
|
(245,311) |
|
(245,732) |
|
(246,325) |
|
(246,920) |
Tangible assets (non-GAAP) |
$ 6,814,967 |
|
$ 6,845,972 |
|
$ 6,929,225 |
|
$ 6,904,263 |
|
$ 6,868,490 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity to total assets (GAAP) |
12.0 % |
|
12.0 % |
|
11.9 % |
|
11.4 % |
|
11.5 % |
Tangible common equity to tangible assets (non-GAAP) |
8.9 % |
|
8.8 % |
|
8.8 % |
|
8.2 % |
|
8.3 % |
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
34,496,197 |
|
34,689,843 |
|
34,906,233 |
|
34,901,076 |
|
35,047,800 |
|
|
|
|
|
|
|
|
|
|
Book value per share (GAAP) |
$ 24.66 |
|
$ 24.43 |
|
$ 24.44 |
|
$ 23.31 |
|
$ 23.39 |
Tangible book value per share (non-GAAP) |
$ 17.56 |
|
$ 17.36 |
|
$ 17.40 |
|
$ 16.25 |
|
$ 16.34 |
NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share amounts)
The Company considers the return on average tangible common equity ratio to be a useful measurement of the Company's ability to generate returns for its common shareholders. By removing the impact of intangible assets and their related amortization and tax effects, the performance of the Company's ongoing business operations can be evaluated. The Company believes that presenting an adjusted return on tangible common equity ratio, which excludes certain non-recurring items is useful in measuring performance of the Company's ongoing business operations by removing the volatility of these non-recurring items.
|
Quarter Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
Return on Average Tangible Common Equity, annualized: |
|||||||||
Net income (GAAP) |
$ 14,159 |
|
$ 5,748 |
|
$ 6,233 |
|
$ 18,219 |
|
$ 16,846 |
Add amortization of intangible assets |
421 |
|
421 |
|
593 |
|
595 |
|
623 |
Exclude tax effect of adjustment |
(88) |
|
(88) |
|
(125) |
|
(125) |
|
(131) |
Tangible net income (non-GAAP) |
$ 14,492 |
|
$ 6,081 |
|
$ 6,701 |
|
$ 18,689 |
|
$ 17,338 |
|
|
|
|
|
|
|
|
|
|
Tangible net income (non-GAAP) |
$ 14,492 |
|
$ 6,081 |
|
$ 6,701 |
|
$ 18,689 |
|
$ 17,338 |
Exclude loss on sale of investment securities, net |
1,921 |
|
9,973 |
|
10,005 |
|
1,940 |
|
— |
Exclude gain on sale of branch including related deposits, net |
— |
|
— |
|
— |
|
(610) |
|
— |
Exclude tax effect of adjustment |
(403) |
|
(2,094) |
|
(2,101) |
|
(279) |
|
— |
Adjusted tangible net income (non-GAAP) |
$ 16,010 |
|
$ 13,960 |
|
$ 14,605 |
|
$ 19,740 |
|
$ 17,338 |
|
|
|
|
|
|
|
|
|
|
Average stockholders' equity (GAAP) |
$ 843,438 |
|
$ 846,947 |
|
$ 813,383 |
|
$ 821,494 |
|
$ 824,742 |
Exclude average intangible assets |
(245,106) |
|
(245,536) |
|
(246,022) |
|
(246,663) |
|
(247,278) |
Average tangible common stockholders' equity (non-GAAP) |
$ 598,332 |
|
$ 601,411 |
|
$ 567,361 |
|
$ 574,831 |
|
$ 577,464 |
|
|
|
|
|
|
|
|
|
|
Return on average common equity, annualized (GAAP) |
6.75 % |
|
2.73 % |
|
3.04 % |
|
8.80 % |
|
8.19 % |
Return on average tangible common equity, annualized (non-GAAP) |
9.74 % |
|
4.07 % |
|
4.69 % |
|
12.90 % |
|
12.04 % |
Adjusted return on average tangible common equity, annualized (non-GAAP) |
10.76 % |
|
9.34 % |
|
10.21 % |
|
13.62 % |
|
12.04 % |
The Company believes that presenting pre-tax pre-provision income, which reflects its profitability before income taxes and provision for credit losses, and the pre-tax, pre-provision return on average assets are useful measurements in assessing its operating income and expenses by removing the volatility that may be associated with credit loss provisions.
|
Quarter Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
Pre-tax, Pre-provision Income and Pre-tax, Pre-provision Return on Average Assets, annualized: |
|||||||||
Net income (GAAP) |
$ 14,159 |
|
$ 5,748 |
|
$ 6,233 |
|
$ 18,219 |
|
$ 16,846 |
Add income tax expense |
1,836 |
|
1,120 |
|
344 |
|
3,578 |
|
3,025 |
Add (subtract) provision for (reversal of) credit losses |
1,268 |
|
1,392 |
|
1,424 |
|
(878) |
|
1,909 |
Pre-tax, pre-provision income (non-GAAP) |
$ 17,263 |
|
$ 8,260 |
|
$ 8,001 |
|
$ 20,919 |
|
$ 21,780 |
|
|
|
|
|
|
|
|
|
|
Average total assets (GAAP) |
$ 7,106,791 |
|
$ 7,092,452 |
|
$ 7,140,876 |
|
$ 7,212,732 |
|
$ 7,142,865 |
|
|
|
|
|
|
|
|
|
|
Return on average assets, annualized (GAAP) |
0.80 % |
|
0.33 % |
|
0.35 % |
|
1.00 % |
|
0.95 % |
Pre-tax, pre-provision return on average assets (non-GAAP) |
0.98 % |
|
0.47 % |
|
0.44 % |
|
1.15 % |
|
1.22 % |
The Company believes that presenting an adjusted efficiency ratio, which excludes certain non-recurring items is useful in measuring operating income and expenses by removing the volatility of these non-recurring items.
|
Quarter Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
Adjusted Efficiency Ratio : |
|||||||||
Total noninterest expense (GAAP) |
$ 39,096 |
|
$ 40,370 |
|
$ 42,723 |
|
$ 40,970 |
|
$ 41,325 |
Net interest income (GAAP) |
$ 51,113 |
|
$ 51,530 |
|
$ 53,871 |
|
$ 55,618 |
|
$ 55,824 |
|
|
|
|
|
|
|
|
|
|
Total noninterest income (GAAP) |
$ 5,246 |
|
$ (2,900) |
|
$ (3,147) |
|
$ 6,271 |
|
$ 7,281 |
Exclude (gain) loss on sale of investment securities, net |
1,921 |
|
9,973 |
|
10,005 |
|
1,940 |
|
— |
Exclude gain on sale of branch including related deposits, net |
— |
|
— |
|
— |
|
(610) |
|
— |
Adjusted total noninterest income (non-GAAP) |
$ 7,167 |
|
$ 7,073 |
|
$ 6,858 |
|
$ 7,601 |
|
$ 7,281 |
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (GAAP) |
69.4 % |
|
83.0 % |
|
84.2 % |
|
66.2 % |
|
65.5 % |
Adjusted efficiency ratio (non-GAAP) |
67.1 % |
|
68.9 % |
|
70.4 % |
|
64.8 % |
|
65.5 % |
View original content:https://www.prnewswire.com/news-releases/heritage-financial-announces-second-quarter-2024-results-and-declares-regular-cash-dividend-302206393.html
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