Green Bancorp, Inc. Reports Fourth Quarter and Full Year 2017 Financial Results
2017 Fourth Quarter Significant Items (GAAP)
- Fourth quarter 2017 net income totaled
$2.6 million , or$0.07 per diluted common share - Fourth quarter 2017 results were negatively impacted by the following:
$5.8 million in tax expense, or$0.16 per diluted common share, for the deferred tax asset write-off resulting from the 2017 Tax Cuts and Jobs Act$3.1 million in salaries and employee benefits expense, or$2 .0 million net of the related tax benefit, which represents$0.05 per diluted common share, for the accelerated vesting of certain performance options$3.2 million in provision for loan losses and$1.1 million in loss on held for sale loans related to the last two E&P relationships in the portfolio impacted EPS by$0.07 per diluted common share (net of tax)
- Total loans increased
$108.2 million , 14.0% annualized from Q3 2017 - Nonperforming assets decreased
$21.0 million to $71.6 million - Energy portfolio declined
$33.3 million to $53.0 million ; energy production loans represent only 0.63% and oil field services loans only 1.03% of total loans - Noninterest-bearing deposits increased
$118.9 million during Q4 2017 and now comprise 23.6% of total deposits
2017 Fourth Quarter Significant Items (Non-GAAP)
- Pre-tax, pre-provision operating return on average assets (annualized) was 2.01% for Q4 2017, representing the 3rd consecutive quarter over 2.00%
Results of Operations -Quarter Ended December 31, 2017 compared with Quarter Ended September 30, 2017
Net income for the quarter ended December 31, 2017 was
Net interest income before provision for loan losses for the quarter ended December 31, 2017 increased
Noninterest income for the quarter ended December 31, 2017 was
Noninterest expense for the quarter ended December 31, 2017 was
Total loans, which includes loans held for investment and loans held for sale, at December 31, 2017 were
Deposits at December 31, 2017 were
Asset Quality -Quarter Ended December 31, 2017 compared with Quarter Ended September 30, 2017
Nonperforming assets totaled
The allowance for loan losses was 0.98% of total loans held for investment at December 31, 2017, compared with 1.09% of total loans held for investment at September 30, 2017. At December 31, 2017, the Company’s allowance for loan losses to total loans held for investment, excluding acquired loans that are accounted for under ASC 310-20 and ASC 310-30 and their related allowance, was 1.12%. Further, the allowance for loan losses plus acquired loan net discount to total loans held for investment adjusted for acquired loan net discount was 1.11% as of December 31, 2017.
The Company recorded a provision for loan losses of
Net charge-offs were
Results of Operations –Twelve Months Ended
Net income for the twelve months ended December 31, 2017 was
Net interest income before provision for loan losses for the twelve months ended December 31, 2017 was
Noninterest income for the twelve months ended December 31, 2017 was
Noninterest expense for the twelve months ended December 31, 2017 was
Total loans, which includes loans held for investment and loans held for sale, at December 31, 2017 were
Deposits at December 31, 2017 were
Non-GAAP Financial Measures
Green Bancorp’s management uses certain non−GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically,
Conference Call
As previously announced,
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company's website at investors.greenbank.com. The online replay will remain available for a limited time beginning immediately following the call.
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Forward Looking Statement
The information presented herein and in other documents filed with or furnished to the
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.
Statements about the expected timing, completion and effects of the proposed transactions and all other statements in this release other than historical facts constitute forward-looking statements.
In addition to factors previously disclosed in Green Bancorp’s reports filed with the
Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
Financial Highlights
(Unaudited)
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Period End Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 140,681 | $ | 179,463 | $ | 134,995 | $ | 255,581 | $ | 389,007 | ||||||||||
Securities | 718,814 | 707,989 | 718,750 | 589,468 | 310,124 | |||||||||||||||
Other investments | 27,283 | 22,443 | 26,002 | 19,057 | 18,649 | |||||||||||||||
Loans held for sale | 7,156 | 17,673 | 18,030 | 17,350 | 23,989 | |||||||||||||||
Loans held for investment | 3,190,485 | 3,071,761 | 3,123,355 | 3,012,275 | 3,098,220 | |||||||||||||||
Total Loans | 3,197,641 | 3,089,434 | 3,141,385 | 3,029,625 | 3,122,209 | |||||||||||||||
Allowance for loan losses | (31,220 | ) | (33,480 | ) | (31,991 | ) | (31,936 | ) | (26,364 | ) | ||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles, net | 8,503 | 8,835 | 9,215 | 9,595 | 9,975 | |||||||||||||||
Real estate acquired through foreclosure | 802 | 802 | 921 | 1,356 | 5,220 | |||||||||||||||
Premises and equipment, net | 24,002 | 29,733 | 30,108 | 30,604 | 25,674 | |||||||||||||||
Other assets | 90,119 | 70,415 | 71,021 | 83,359 | 85,037 | |||||||||||||||
Total assets | $ | 4,261,916 | $ | 4,160,925 | $ | 4,185,697 | $ | 4,072,000 | $ | 4,024,822 | ||||||||||
Noninterest-bearing deposits | $ | 803,210 | $ | 684,329 | $ | 683,656 | $ | 705,480 | $ | 650,064 | ||||||||||
Interest-bearing transaction and savings deposits | 1,331,601 | 1,383,514 | 1,324,307 | 1,404,988 | 1,359,187 | |||||||||||||||
Certificates and other time deposits | 1,262,332 | 1,340,410 | 1,352,459 | 1,305,670 | 1,365,449 | |||||||||||||||
Total deposits | 3,397,143 | 3,408,253 | 3,360,422 | 3,416,138 | 3,374,700 | |||||||||||||||
Securities sold under agreements to repurchase | 5,173 | 5,867 | 5,221 | 4,316 | 3,493 | |||||||||||||||
Other borrowed funds | 325,000 | 215,000 | 305,000 | 150,000 | 150,000 | |||||||||||||||
Subordinated debentures and subordinated notes | 47,737 | 47,596 | 47,454 | 47,304 | 47,492 | |||||||||||||||
Other liabilities | 23,068 | 21,898 | 15,859 | 16,954 | 18,655 | |||||||||||||||
Total liabilities | 3,798,121 | 3,698,614 | 3,733,956 | 3,634,712 | 3,594,340 | |||||||||||||||
Shareholders' equity | 463,795 | 462,311 | 451,741 | 437,288 | 430,482 | |||||||||||||||
Total liabilities and equity | $ | 4,261,916 | $ | 4,160,925 | $ | 4,185,697 | $ | 4,072,000 | $ | 4,024,822 | ||||||||||
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Twelve Months Ended | |||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 | Dec 31, 2016 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Loans, including fees | $ | 39,870 | $ | 39,549 | $ | 38,476 | $ | 36,371 | $ | 36,469 | $ | 154,266 | $ | 149,422 | ||||||||||||||
Securities | 4,446 | 4,337 | 3,928 | 2,583 | 1,151 | 15,294 | 4,209 | |||||||||||||||||||||
Other investments | 241 | 221 | 197 | 188 | 184 | 847 | 761 | |||||||||||||||||||||
Deposits in financial institutions and fed funds sold | 671 | 432 | 331 | 409 | 522 | 1,843 | 1,152 | |||||||||||||||||||||
Total interest income | 45,228 | 44,539 | 42,932 | 39,551 | 38,326 | 172,250 | 155,544 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Transaction and savings deposits | 2,588 | 2,502 | 2,230 | 1,978 | 1,750 | 9,298 | 5,749 | |||||||||||||||||||||
Certificates and other time deposits | 4,017 | 4,042 | 3,786 | 3,607 | 3,766 | 15,452 | 14,022 | |||||||||||||||||||||
Subordinated debentures and subordinated notes | 1,065 | 1,059 | 1,051 | 1,041 | 456 | 4,216 | 1,182 | |||||||||||||||||||||
Other borrowed funds | 738 | 657 | 560 | 282 | 170 | 2,237 | 963 | |||||||||||||||||||||
Total interest expense | 8,408 | 8,260 | 7,627 | 6,908 | 6,142 | 31,203 | 21,916 | |||||||||||||||||||||
Net interest income | 36,820 | 36,279 | 35,305 | 32,643 | 32,184 | 141,047 | 133,628 | |||||||||||||||||||||
Provision for loan losses | 4,405 | 2,300 | 1,510 | 6,145 | 9,500 | 14,360 | 64,700 | |||||||||||||||||||||
Net interest income after provision for loan losses | 32,415 | 33,979 | 33,795 | 26,498 | 22,684 | 126,687 | 68,928 | |||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Customer service fees | 2,273 | 2,365 | 2,199 | 2,266 | 1,755 | 9,103 | 6,129 | |||||||||||||||||||||
Loan fees | 704 | 871 | 1,106 | 834 | 750 | 3,515 | 2,974 | |||||||||||||||||||||
(Loss) gain on sale of available-for-sale securities, net | — | (332 | ) | 294 | — | — | (38 | ) | — | |||||||||||||||||||
(Loss) gain on held for sale loans, net | (1,098 | ) | (1,294 | ) | 222 | (138 | ) | (1,445 | ) | (2,308 | ) | (1,404 | ) | |||||||||||||||
Gain on sale of guaranteed portion of loans, net | 1,648 | 1,302 | 878 | 1,927 | 379 | 5,755 | 3,343 | |||||||||||||||||||||
Other | 401 | 478 | 1,000 | 606 | 729 | 2,485 | 3,154 | |||||||||||||||||||||
Total noninterest income | 3,928 | 3,390 | 5,699 | 5,495 | 2,168 | 18,512 | 14,196 | |||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 14,996 | 12,487 | 12,653 | 12,406 | 11,804 | 52,542 | 47,169 | |||||||||||||||||||||
Occupancy | 2,069 | 2,080 | 2,048 | 1,997 | 2,060 | 8,194 | 8,319 | |||||||||||||||||||||
Professional and regulatory fees | 2,241 | 2,331 | 1,899 | 2,397 | 2,421 | 8,868 | 8,958 | |||||||||||||||||||||
Data processing | 981 | 924 | 995 | 908 | 1,023 | 3,808 | 3,859 | |||||||||||||||||||||
Software license and maintenance | 636 | 464 | 438 | 489 | 571 | 2,027 | 2,155 | |||||||||||||||||||||
Marketing | 259 | 154 | 163 | 199 | 232 | 775 | 1,114 | |||||||||||||||||||||
Loan related | 632 | 271 | 301 | 600 | 1,464 | 1,804 | 3,795 | |||||||||||||||||||||
Real estate acquired by foreclosure, net | 30 | 159 | 223 | 292 | 382 | 704 | 3,168 | |||||||||||||||||||||
Other | 1,738 | 1,197 | 891 | 1,551 | 996 | 5,377 | 5,961 | |||||||||||||||||||||
Total noninterest expense | 23,582 | 20,067 | 19,611 | 20,839 | 20,953 | 84,099 | 84,498 | |||||||||||||||||||||
Income (loss) before income taxes | 12,761 | 17,302 | 19,883 | 11,154 | 3,899 | 61,100 | (1,374 | ) | ||||||||||||||||||||
Provision (benefit) for income taxes | 10,142 | 5,895 | 6,985 | 3,942 | 1,355 | 26,964 | (402 | ) | ||||||||||||||||||||
Net income (loss) | $ | 2,619 | $ | 11,407 | $ | 12,898 | $ | 7,212 | $ | 2,544 | $ | 34,136 | $ | (972 | ) | |||||||||||||
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Twelve Months Ended | |||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 | Dec 31, 2016 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Per Share Data (Common Stock): | ||||||||||||||||||||||||||||
Basic earnings (loss) per common share | $ | 0.07 | $ | 0.31 | $ | 0.35 | $ | 0.19 | $ | 0.07 | $ | 0.92 | $ | (0.03 | ) | |||||||||||||
Diluted earnings (loss) per share | 0.07 | 0.31 | 0.35 | 0.19 | 0.07 | 0.92 | (0.03 | ) | ||||||||||||||||||||
Book value per common share | 12.50 | 12.46 | 12.20 | 11.81 | 11.64 | 12.50 | 11.64 | |||||||||||||||||||||
Tangible book value per common share (1) | 9.97 | 9.93 | 9.65 | 9.25 | 9.06 | 9.97 | 9.06 | |||||||||||||||||||||
Common Stock Data: | ||||||||||||||||||||||||||||
Shares outstanding at period end | 37,103 | 37,096 | 37,035 | 37,015 | 36,988 | 37,103 | 36,988 | |||||||||||||||||||||
Weighted average basic shares outstanding for the period | 37,103 | 37,056 | 37,023 | 36,990 | 36,731 | 37,043 | 36,677 | |||||||||||||||||||||
Weighted average diluted shares outstanding for the period | 37,393 | 37,332 | 37,264 | 37,238 | 36,937 | 37,297 | 36,677 | |||||||||||||||||||||
Selected Performance Metrics: | ||||||||||||||||||||||||||||
Return on average assets(2) | 0.25 | % | 1.10 | % | 1.26 | % | 0.73 | % | 0.25 | % | 0.83 | % | (0.03 | )% | ||||||||||||||
Pre-tax, pre-provision operating return on average assets(1)(2) | 2.01 | 2.04 | 2.09 | 1.76 | 1.49 | 1.97 | 1.68 | |||||||||||||||||||||
Return on average equity(2) | 2.23 | 9.90 | 11.62 | 6.71 | 2.37 | 7.57 | (0.22 | ) | ||||||||||||||||||||
Return on average tangible common equity(1)(2) | 3.02 | 12.74 | 15.04 | 8.88 | 3.35 | 9.84 | 0.02 | |||||||||||||||||||||
Efficiency ratio | 57.87 | 50.59 | 47.83 | 54.64 | 60.99 | 52.71 | 57.16 | |||||||||||||||||||||
Loans to deposits ratio | 93.92 | 90.13 | 92.95 | 88.18 | 91.81 | 93.92 | 91.81 | |||||||||||||||||||||
Noninterest expense to average assets(2) | 2.23 | 1.93 | 1.92 | 2.10 | 2.10 | 2.04 | 2.19 | |||||||||||||||||||||
Green Bancorp Capital Ratios: | ||||||||||||||||||||||||||||
Average shareholders’ equity to average total assets | 11.1 | % | 11.1 | % | 10.9 | % | 10.8 | % | 10.8 | % | 11.0 | % | 11.2 | % | ||||||||||||||
Tier 1 capital to average assets (leverage) | 9.5 | 9.5 | 9.3 | 9.1 | 9.1 | 9.5 | 9.1 | |||||||||||||||||||||
Common equity tier 1 capital | 10.5 | 10.6 | 10.1 | 10.0 | 9.7 | 10.5 | 9.7 | |||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 10.9 | 11.0 | 10.5 | 10.4 | 10.1 | 10.9 | 10.1 | |||||||||||||||||||||
Total capital to risk-weighted assets | 12.7 | 12.9 | 12.4 | 12.3 | 11.8 | 12.7 | 11.8 | |||||||||||||||||||||
Tangible common equity to tangible assets (1) | 8.9 | 9.1 | 8.7 | 8.6 | 8.5 | 8.9 | 8.5 | |||||||||||||||||||||
Green Bank Capital Ratios: | ||||||||||||||||||||||||||||
Tier 1 capital to average assets (leverage) | 10.1 | % | 10.1 | % | 9.6 | % | 9.1 | % | 9.0 | % | 10.1 | % | 9.0 | % | ||||||||||||||
Common equity tier 1 capital | 11.6 | 11.8 | 10.9 | 10.4 | 10.0 | 11.6 | 10.0 | |||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 11.6 | 11.8 | 10.9 | 10.4 | 10.0 | 11.6 | 10.0 | |||||||||||||||||||||
Total capital to risk-weighted assets | 12.4 | 12.6 | 11.7 | 11.2 | 10.8 | 12.4 | 10.8 |
(1) Refer to “Notes to Financial Highlights” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.
(2) Annualized ratio.
Financial Highlights
(Unaudited)
For the Quarter Ended | |||||||||||||||||||||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Interest-Earning Assets: | |||||||||||||||||||||||||||||||||
Loans | $ | 3,082,005 | $ | 39,870 | 5.13 | % | $ | 3,071,039 | $ | 39,549 | 5.11 | % | $ | 3,077,242 | $ | 36,469 | 4.71 | % | |||||||||||||||
Securities | 713,137 | 4,446 | 2.47 | 712,431 | 4,337 | 2.42 | 316,223 | 1,151 | 1.45 | ||||||||||||||||||||||||
Other investments | 23,359 | 241 | 4.09 | 26,009 | 221 | 3.37 | 18,627 | 184 | 3.93 | ||||||||||||||||||||||||
Interest earning deposits in financial institutions and federal funds sold | 197,454 | 671 | 1.35 | 134,868 | 432 | 1.27 | 356,367 | 522 | 0.58 | ||||||||||||||||||||||||
Total interest-earning assets | 4,015,955 | 45,228 | 4.47 | % | 3,944,347 | 44,539 | 4.48 | % | 3,768,459 | 38,326 | 4.05 | % | |||||||||||||||||||||
Allowance for loan losses | (33,708 | ) | (32,395 | ) | (34,994 | ) | |||||||||||||||||||||||||||
Noninterest-earning assets | 221,858 | 219,754 | 240,779 | ||||||||||||||||||||||||||||||
Total assets | $ | 4,204,105 | $ | 4,131,706 | $ | 3,974,244 | |||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 1,387,873 | $ | 2,588 | 0.74 | % | $ | 1,349,701 | $ | 2,502 | 0.74 | % | $ | 1,330,734 | $ | 1,750 | 0.52 | % | |||||||||||||||
Certificates and other time deposits | 1,290,277 | 4,017 | 1.24 | 1,343,732 | 4,042 | 1.19 | 1,382,930 | 3,766 | 1.08 | ||||||||||||||||||||||||
Securities sold under agreements to repurchase | 5,153 | 2 | 0.15 | 5,943 | 2 | 0.13 | 3,469 | — | — | ||||||||||||||||||||||||
Other borrowed funds | 237,989 | 736 | 1.23 | 227,936 | 655 | 1.14 | 150,000 | 170 | 0.45 | ||||||||||||||||||||||||
Subordinated debentures and subordinated notes | 47,673 | 1,065 | 8.86 | 47,531 | 1,059 | 8.84 | 22,400 | 456 | 8.10 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 2,968,965 | 8,408 | 1.12 | % | 2,974,843 | 8,260 | 1.10 | % | 2,889,533 | 6,142 | 0.85 | % | |||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 745,707 | 679,851 | 636,218 | ||||||||||||||||||||||||||||||
Other liabilities | 23,574 | 19,709 | 20,943 | ||||||||||||||||||||||||||||||
Total liabilities | 3,738,246 | 3,674,403 | 3,546,694 | ||||||||||||||||||||||||||||||
Shareholders’ equity | 465,859 | 457,303 | 427,550 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,204,105 | $ | 4,131,706 | $ | 3,974,244 | |||||||||||||||||||||||||||
Net interest rate spread | 3.35 | % | 3.38 | % | 3.20 | % | |||||||||||||||||||||||||||
Net interest income and margin(1) | $ | 36,820 | 3.64 | % | $ | 36,279 | 3.65 | % | $ | 32,184 | 3.40 | % |
(1) Net interest margin is equal to net interest income divided by interest-earning assets.
Financial Highlights
(Unaudited)
2017 | 2016 | |||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-Earning Assets: | ||||||||||||||||||||||
Loans | $ | 3,065,360 | $ | 154,266 | 5.03 | % | $ | 3,137,994 | $ | 149,422 | 4.76 | % | ||||||||||
Securities | 669,588 | 15,294 | 2.28 | 286,299 | 4,209 | 1.47 | ||||||||||||||||
Other investments | 22,823 | 847 | 3.71 | 21,052 | 761 | 3.61 | ||||||||||||||||
Interest earning deposits in financial institutions and federal funds sold | 160,810 | 1,843 | 1.15 | 211,950 | 1,152 | 0.54 | ||||||||||||||||
Total interest-earning assets | 3,918,581 | 172,250 | 4.40 | % | 3,657,295 | 155,544 | 4.25 | % | ||||||||||||||
Allowance for loan losses | (31,471 | ) | (39,417 | ) | ||||||||||||||||||
Noninterest-earning assets | 225,674 | 242,930 | ||||||||||||||||||||
Total assets | $ | 4,112,784 | $ | 3,860,808 | ||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 1,370,503 | $ | 9,298 | 0.68 | % | $ | 1,201,198 | $ | 5,749 | 0.48 | % | ||||||||||
Certificates and other time deposits | 1,317,180 | 15,452 | 1.17 | 1,389,834 | 14,022 | 1.01 | ||||||||||||||||
Securities sold under agreements to repurchase | 4,770 | 7 | 0.15 | 3,605 | 4 | 0.11 | ||||||||||||||||
Other borrowed funds | 211,407 | 2,230 | 1.05 | 186,453 | 959 | 0.51 | ||||||||||||||||
Subordinated debentures | 47,533 | 4,216 | 8.87 | 15,623 | 1,182 | 7.57 | ||||||||||||||||
Total interest-bearing liabilities | 2,951,393 | 31,203 | 1.06 | % | 2,796,713 | 21,916 | 0.78 | % | ||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing demand deposits | 690,786 | 611,388 | ||||||||||||||||||||
Other liabilities | 19,458 | 18,784 | ||||||||||||||||||||
Total liabilities | 3,661,637 | 3,426,885 | ||||||||||||||||||||
Shareholders’ equity | 451,147 | 433,923 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,112,784 | $ | 3,860,808 | ||||||||||||||||||
Net interest rate spread | 3.34 | % | 3.47 | % | ||||||||||||||||||
Net interest income and margin(1) | $ | 141,047 | 3.60 | % | $ | 133,628 | 3.65 | % |
(1) Net interest margin is equal to net interest income divided by interest-earning assets.
Financial Highlights
(Unaudited)
Yield Trend
For the Quarter Ended | |||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | |||||||||||
Average yield on interest-earning assets: | |||||||||||||||
Loans, including fees | 5.13 | % | 5.11 | % | 5.02 | % | 4.86 | % | 4.71 | % | |||||
Securities | 2.47 | 2.42 | 2.32 | 1.83 | 1.45 | ||||||||||
Other investments | 4.09 | 3.37 | 3.45 | 4.03 | 3.93 | ||||||||||
Interest-earning deposits in financial institutions and federal funds sold | 1.35 | 1.27 | 1.06 | 0.89 | 0.58 | ||||||||||
Total interest-earning assets | 4.47 | % | 4.48 | % | 4.42 | % | 4.21 | % | 4.05 | % | |||||
Average rate on interest-bearing liabilities: | |||||||||||||||
Interest-bearing transaction and savings | 0.74 | % | 0.74 | % | 0.66 | % | 0.58 | % | 0.52 | % | |||||
Certificates and other time deposits | 1.24 | 1.19 | 1.16 | 1.10 | 1.08 | ||||||||||
Other borrowed funds | 1.20 | 1.11 | 1.01 | 0.70 | 0.44 | ||||||||||
Subordinated debentures | 8.86 | 8.84 | 8.90 | 8.88 | 8.10 | ||||||||||
Total interest-bearing liabilities | 1.12 | % | 1.10 | % | 1.04 | % | 0.96 | % | 0.85 | % | |||||
Net interest rate spread | 3.35 | % | 3.38 | % | 3.38 | % | 3.25 | % | 3.20 | % | |||||
Net interest margin (1) | 3.64 | % | 3.65 | % | 3.63 | % | 3.47 | % | 3.40 | % |
(1) Net interest margin is equal to net interest income divided by interest-earning assets.
Supplemental Yield Trend
For the Quarter Ended | |||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | |||||||||||
Average yield on loans, excluding fees and discounts (2) | 4.74 | % | 4.69 | % | 4.59 | % | 4.42 | % | 4.29 | % | |||||
Average cost of interest-bearing deposits | 0.98 | 0.96 | 0.90 | 0.84 | 0.81 | ||||||||||
Average cost of total deposits, including noninterest-bearing | 0.77 | 0.77 | 0.72 | 0.68 | 0.66 |
(2) Average yield on loans, excluding fees and discounts, is equal to loan interest income divided by average loan principal.
Financial Highlights
(Unaudited)
Portfolio Composition
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Period End Balances | |||||||||||||||||||||||||||||||||||
Commercial & industrial | $ | 1,286,496 | 40.3 | % | $ | 1,148,850 | 37.4 | % | $ | 1,144,332 | 36.6 | % | $ | 1,012,982 | 33.6 | % | $ | 1,053,925 | 34.0 | % | |||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||
Owner occupied commercial | 415,230 | 13.0 | 408,398 | 13.3 | 407,317 | 13.0 | 415,595 | 13.8 | 394,210 | 12.7 | |||||||||||||||||||||||||
Commercial | 1,067,779 | 33.5 | 1,068,742 | 34.8 | 1,109,237 | 35.5 | 1,129,031 | 37.5 | 1,143,751 | 36.9 | |||||||||||||||||||||||||
Construction, land & land development | 164,952 | 5.2 | 193,856 | 6.3 | 201,992 | 6.5 | 201,946 | 6.7 | 249,704 | 8.1 | |||||||||||||||||||||||||
Residential mortgage | 238,580 | 7.5 | 235,089 | 7.7 | 239,834 | 7.7 | 241,839 | 8.0 | 245,191 | 7.9 | |||||||||||||||||||||||||
Consumer and Other | 17,448 | 0.5 | 16,826 | 0.5 | 20,643 | 0.7 | 10,882 | 0.4 | 11,439 | 0.4 | |||||||||||||||||||||||||
Total loans held for investment | $ | 3,190,485 | 100.0 | % | $ | 3,071,761 | 100.0 | % | $ | 3,123,355 | 100.0 | % | $ | 3,012,275 | 100.0 | % | $ | 3,098,220 | 100.0 | % | |||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 803,210 | 23.6 | % | $ | 684,329 | 20.1 | % | $ | 683,656 | 20.3 | % | $ | 705,480 | 20.7 | % | $ | 650,064 | 19.3 | % | |||||||||||||||
Interest-bearing transaction | 200,769 | 5.9 | 201,860 | 5.9 | 207,106 | 6.2 | 208,213 | 6.1 | 168,994 | 5.0 | |||||||||||||||||||||||||
Money market | 1,041,954 | 30.7 | 1,085,433 | 31.9 | 1,016,453 | 30.3 | 1,089,699 | 31.9 | 1,084,350 | 32.1 | |||||||||||||||||||||||||
Savings | 88,878 | 2.6 | 96,221 | 2.8 | 100,748 | 3.0 | 107,076 | 3.1 | 105,843 | 3.1 | |||||||||||||||||||||||||
Certificates and other time deposits | 1,262,332 | 37.2 | 1,340,410 | 39.3 | 1,352,459 | 40.2 | 1,305,670 | 38.2 | 1,365,449 | 40.5 | |||||||||||||||||||||||||
Total deposits | $ | 3,397,143 | 100.0 | % | $ | 3,408,253 | 100.0 | % | $ | 3,360,422 | 100.0 | % | $ | 3,416,138 | 100.0 | % | $ | 3,374,700 | 100.0 | % | |||||||||||||||
Loan to Deposit Ratio | 93.9 | % | 90.1 | % | 92.9 | % | 88.2 | % | 91.8 | % | |||||||||||||||||||||||||
Financial Highlights
(Unaudited)
Asset Quality
As of and for the Quarter Ended | For the Twelve Months Ended | ||||||||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 | Dec 31, 2016 | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
Nonperforming Assets: | |||||||||||||||||||||||||||||||||
Nonaccrual loans | $ | 47,892 | $ | 43,656 | $ | 43,257 | $ | 59,338 | $ | 66,673 | $ | 47,892 | $ | 66,673 | |||||||||||||||||||
Accruing loans 90 or more days past due | 375 | 4,828 | 2,651 | 5,500 | 1,169 | 375 | 1,169 | ||||||||||||||||||||||||||
Restructured loans—nonaccrual | 9,446 | 10,555 | 19,362 | 10,276 | 10,133 | 9,446 | 10,133 | ||||||||||||||||||||||||||
Restructured loans—accrual | 13,093 | 18,251 | 7,637 | 11,068 | 16,518 | 13,093 | 16,518 | ||||||||||||||||||||||||||
Total nonperforming loans held for investment | 70,806 | 77,290 | 72,907 | 86,182 | 94,493 | 70,806 | 94,493 | ||||||||||||||||||||||||||
Nonperforming loans held for sale | — | 14,552 | 1,700 | — | 6,598 | — | 6,598 | ||||||||||||||||||||||||||
Real estate acquired through foreclosure | 802 | 802 | 921 | 1,356 | 5,220 | 802 | 5,220 | ||||||||||||||||||||||||||
Total nonperforming assets | $ | 71,608 | $ | 92,644 |
$ | 75,528 |
$ | 87,538 |
$ | 106,311 |
$ | 71,608 | $ | 106,311 |
|||||||||||||||||||
Charge-offs: | |||||||||||||||||||||||||||||||||
Commercial and industrial | $ | (6,447 | ) | $ | (840 | ) | $ | (466 | ) | $ | (1,312 | ) | $ | (17,378 | ) | $ | (9,065 | ) | $ | (68,383 | ) | ||||||||||||
Owner occupied commercial real estate | (126 | ) | — | (961 | ) | — | (250 | ) | (1,087 | ) | (1,405 | ) | |||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | (492 | ) | |||||||||||||||||||||||||
Construction, land & land development | — | — | — | (95 | ) | (1,631 | ) | (95 | ) | (1,631 | ) | ||||||||||||||||||||||
Residential mortgage | (19 | ) | — | — | — | (30 | ) | (19 | ) | (548 | ) | ||||||||||||||||||||||
Other consumer | (112 | ) | (10 | ) | (126 | ) | (8 | ) | (15 | ) | (256 | ) | (126 | ) | |||||||||||||||||||
Total charge-offs | (6,704 | ) | (850 | ) | (1,553 | ) | (1,415 | ) | (19,304 | ) | (10,522 | ) | (72,585 | ) | |||||||||||||||||||
Recoveries: | |||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 6 | $ | 12 | $ | 73 | $ | 585 | $ | 206 | $ | 676 | $ | 1,000 | |||||||||||||||||||
Owner occupied commercial real estate | — | — | — | 4 | — | 4 | 17 | ||||||||||||||||||||||||||
Commercial real estate | 1 | 4 | 3 | — | — | 8 | — | ||||||||||||||||||||||||||
Construction, land & land development | 2 | 1 | — | 74 | 5 | 77 | 84 | ||||||||||||||||||||||||||
Residential mortgage | 27 | 21 | 16 | 57 | 33 | 121 | 155 | ||||||||||||||||||||||||||
Other consumer | 3 | 1 | 6 | 122 | 13 | 132 | 46 | ||||||||||||||||||||||||||
Total recoveries | 39 | 39 | 98 | 842 | 257 | 1,018 | 1,302 | ||||||||||||||||||||||||||
Net (charge-offs) recoveries | $ | (6,665 | ) | $ | (811 | ) | $ | (1,455 | ) | $ | (573 | ) | $ | (19,047 | ) | $ | (9,504 | ) | $ | (71,283 | ) | ||||||||||||
Allowance for loan losses at end of period | $ | 31,220 | $ | 33,480 | $ | 31,991 | $ | 31,936 | $ | 26,364 | $ | 31,220 | $ | 26,364 | |||||||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||||||||||||
Nonperforming assets to total assets | 1.68 | % | 2.23 | % | 1.80 | % | 2.15 | % | 2.64 | % | 1.68 | % | 2.64 | % | |||||||||||||||||||
Nonperforming loans to total loans held for investment | 2.22 | 2.52 | 2.33 | 2.86 | 3.05 | 2.22 | 3.05 | ||||||||||||||||||||||||||
Total classified assets to total regulatory capital | 28.61 | 32.21 | 28.70 | 38.00 | 39.09 | 28.61 | 39.09 | ||||||||||||||||||||||||||
Allowance for loan losses to total loans held for investment | 0.98 | 1.09 | 1.02 | 1.06 | 0.85 | 0.98 | 0.85 | ||||||||||||||||||||||||||
Net charge-offs (recoveries) to average loans outstanding | 0.22 | 0.03 | 0.05 | 0.02 | 0.63 | 0.31 | 2.28 | ||||||||||||||||||||||||||
Notes to Financial Highlights
(Unaudited)
We identify certain financial measures discussed in this release as being “non‑GAAP financial measures.” In accordance with the SEC’s rules, we classify a financial measure as being a non‑GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in
The non‑GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non‑GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non‑GAAP financial measures we have discussed in this release when comparing such non‑GAAP financial measures.
Tangible Book Value Per Common Share. Tangible book value is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value, the most directly comparable financial measure calculated in accordance with GAAP is our book value.
We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total shareholders’ equity | $ | 463,795 | $ | 462,311 | $ | 451,741 | $ | 437,288 | $ | 430,482 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles | 8,503 | 8,835 | 9,215 | 9,595 | 9,975 | |||||||||||||||
Tangible common equity | $ | 370,001 | $ | 368,185 | $ | 357,235 | $ | 342,402 | $ | 335,216 | ||||||||||
Common shares outstanding (1) | 37,103 | 37,096 | 37,035 | 37,015 | 36,988 | |||||||||||||||
Book value per common share (1) | $ | 12.50 | $ | 12.46 | $ | 12.20 | $ | 11.81 | $ | 11.64 | ||||||||||
Tangible book value per common share (1) | $ | 9.97 | $ | 9.93 | $ | 9.65 | $ | 9.25 | $ | 9.06 |
(1) Excludes the dilutive effect of common stock issuable upon exercise of outstanding stock options. The number of exercisable options outstanding was 754,110 as of Dec 31, 2017; 467,257 as of Sep 30, 2017; 465,281 as of Jun 30, 2017; 472,653 as of Mar 31, 2017; and 493,241 as of Dec 31, 2016.
Notes to Financial Highlights
(Unaudited)
Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders’ equity to total assets.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders’ equity and assets while not increasing our tangible common equity or tangible assets.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total shareholders’ equity | $ | 463,795 | $ | 462,311 | $ | 451,741 | $ | 437,288 | $ | 430,482 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles | 8,503 | 8,835 | 9,215 | 9,595 | 9,975 | |||||||||||||||
Tangible common equity | $ | 370,001 | $ | 368,185 | $ | 357,235 | $ | 342,402 | $ | 335,216 | ||||||||||
Tangible Assets | ||||||||||||||||||||
Total assets | $ | 4,261,916 | $ | 4,160,925 | $ | 4,185,697 | $ | 4,072,000 | $ | 4,024,822 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles | 8,503 | 8,835 | 9,215 | 9,595 | 9,975 | |||||||||||||||
Tangible assets | $ | 4,168,122 | $ | 4,066,799 | $ | 4,091,191 | $ | 3,977,114 | $ | 3,929,556 | ||||||||||
Tangible Common Equity to Tangible Assets | 8.88 | % | 9.05 | % | 8.73 | % | 8.61 | % | 8.53 | % | ||||||||||
Notes to Financial Highlights
(Unaudited)
Return on Average Tangible Common Equity. Return on average tangible common equity is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) average tangible common equity as average shareholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; (b) net income less the effect of intangible assets as net income plus amortization of core deposit intangibles, net of taxes; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of intangible assets. Goodwill and other intangible assets, including core deposit intangibles, have the effect of increasing total shareholders’ equity, while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions who may have higher balances in goodwill and other intangible assets than non-acquisitive institutions.
The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income excluding amortization of core deposit intangibles, net of tax to net income and presents our return on average tangible common equity:
As of and for the Quarter Ended | For the Twelve Months Ended | |||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 | Dec 31, 2016 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Net income (loss) adjusted for amortization of core deposit intangibles | ||||||||||||||||||||||||||||
Net income (loss) | $ | 2,619 | $ | 11,407 | $ | 12,898 | $ | 7,212 | $ | 2,544 | $ | 34,136 | $ | (972 | ) | |||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of core deposit intangibles | 330 | 380 | 380 | 380 | 382 | 1,472 | 1,587 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 116 | 133 | 133 | 133 | 134 | 515 | 555 | |||||||||||||||||||||
Net income (loss) adjusted for amortization of core deposit intangibles | $ | 2,833 | $ | 11,654 | $ | 13,145 | $ | 7,459 | $ | 2,792 | $ | 35,093 | $ | 60 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average shareholders’ equity | $ | 465,859 | $ | 457,303 | $ | 445,334 | $ | 435,695 | $ | 427,550 | $ | 451,147 | $ | 433,923 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Average goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||||||||
Average core deposit intangibles | 8,661 | 9,065 | 9,461 | 9,844 | 10,223 | 9,254 | 10,818 | |||||||||||||||||||||
Average tangible common equity | $ | 371,907 | $ | 362,947 | $ | 350,582 | $ | 340,560 | $ | 332,036 | $ | 356,602 | $ | 337,814 | ||||||||||||||
Return on Average Tangible Common Equity (Annualized) | 3.02 | % | 12.74 | % | 15.04 | % | 8.88 | % | 3.35 | % | 9.84 | % | 0.02 | % | ||||||||||||||
Notes to Financial Highlights
(Unaudited)
Allowance for Loan Losses less Allowance for Loan Losses on Acquired Loans to Total Loans Held for Investment excluding Acquired Loans. The allowance for loan losses less allowance for loan losses on acquired loans to total loans held for investment excluding acquired loans is a non‑GAAP measure used by management to evaluate the Company’s financial condition. Due to the application of purchase accounting, we use this non-GAAP ratio that excludes that impact of these items to evaluate our allowance for loan losses to total loans held for investment. We calculate: (a) total allowance for loan losses less allowance for loan losses on acquired loans as allowance for loan losses less the allowance for loan losses on acquired loans; (b) total loans held for investment excluding acquired loans as total loans held for investment less the carrying value of acquired loans accounted for under ASC topics 310-20 and 310-30; and (c) allowance for loan losses less allowance for loan losses on acquired loans to total loans held for investment excluding acquired loans as the allowance for loan losses less allowance for loan losses on acquired loans (as calculated in clause (a)) divided by total loans held for investment excluding acquired loans (as calculated in clause (b)). For allowance for loan losses less allowance for loan losses on acquired loans to total loans held for investment excluding acquired loans, the most directly comparable financial measure calculated in accordance with GAAP is allowance for loan losses to total loans held for investment.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in the allowance for loan losses less allowance for loan losses on acquired loans to total loans held for investment excluding acquired loans. The acquired loans may have a premium or discount associated with them that includes a potential credit loss component with similar characteristics to the allowance for loan losses. This measure reports the allowance for loan loss coverage to only those loans not accounted for pursuant to ASC topics 310-20 and 310-30 which may assist the investor in evaluating the allowance coverage of loans excluding acquired loans.
The following table reconciles, as of the dates set forth below, allowance for loan losses less allowance for loan losses on acquired loans to total loans held for investment excluding acquired loans:
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Allowance for loan losses less allowance for loan losses on acquired loans | ||||||||||||||||||||
Allowance for loan losses | $ | 31,220 | $ | 33,480 | $ | 31,991 | $ | 31,936 | $ | 26,364 | ||||||||||
Less: Allowance for loan losses on acquired loans | 1,242 | 1,326 | 1,462 | 2,825 | 2,509 | |||||||||||||||
Total allowance for loan losses less allowance for loan losses on acquired loans | $ | 29,978 | $ | 32,154 | $ | 30,529 | $ | 29,111 | $ | 23,855 | ||||||||||
Total loans held for investment excluding acquired loans | ||||||||||||||||||||
Total loans held for investment | $ | 3,190,485 | $ | 3,071,761 | $ | 3,123,355 | $ | 3,012,275 | $ | 3,098,220 | ||||||||||
Less: Carrying value of acquired loans accounted for under ASC Topics 310-20 and 310-30 | 513,994 | 586,522 | 646,601 | 730,064 | 796,292 | |||||||||||||||
Total loans held for investment excluding acquired loans | $ | 2,676,491 | $ | 2,485,239 | $ | 2,476,754 | $ | 2,282,211 | $ | 2,301,928 | ||||||||||
Allowance for loan losses less allowance for loan losses on acquired loans to total loans held for investment excluding acquired loans |
1.12 | % | 1.29 | % | 1.23 | % | 1.28 | % | 1.04 | % | ||||||||||
Notes to Financial Highlights
(Unaudited)
Allowance for Loan Losses plus Acquired Loan Net Discount to Total Loans Held for Investment adjusted for Acquired Loan Net Discount. Allowance for loan losses plus acquired loan net discount to total loans held of investment adjusted for acquired loan net discount is a non‑GAAP measure used by management to evaluate the Company’s financial condition. We calculate: (a) allowance for loan losses plus acquired loan net discount as allowance for loan losses plus acquired loan net discount, net of accumulated amortization; (b) total loans held for investment adjusted for acquired loan net discount as total loans held for investment plus acquired loan net discount, net of accumulated amortization; and (c) allowance for loan losses plus acquired loan net discount to total loans held for investment adjusted for acquired loan net discount as allowance for loan losses plus acquired loan net discount (as calculated in clause (a)) divided by total loans held for investment adjusted for acquired loan net discount (as calculated in clause (b)). For allowance for loan losses to total loans excluding acquired loans, the most directly comparable financial measure calculated in accordance with GAAP is allowance for loan losses to total loans.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in the allowance for loan losses plus the acquired loan net discount to total loans held for investment adjusted for the acquired loan net discount. This measure reports the combined allowance for loan loss and acquired loan net discount (or premium) as a percentage of loans held for investment inclusive of the acquired loan net discount (or premium) which may assist the investor in evaluating allowance coverage on loans inclusive of additional discount or premium resulting from purchase accounting adjustments.
The following table reconciles, as of the dates set forth below, allowance for loan losses plus acquired loans net discount to total loans adjusted for acquired loan net discount:
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Allowance for loan losses plus acquired loan net discount | ||||||||||||||||||||
Allowance for loan losses at end of period | $ | 31,220 | $ | 33,480 | $ | 31,991 | $ | 31,936 | $ | 26,364 | ||||||||||
Plus: Net discount on acquired loans | 4,371 | 5,112 | 6,240 | 7,314 | 9,937 | |||||||||||||||
Total allowance plus acquired loan net discount | $ | 35,591 | $ | 38,592 | $ | 38,231 | $ | 39,250 | $ | 36,301 | ||||||||||
Total loans held for investment adjusted for acquired loan net discount | ||||||||||||||||||||
Total loans held for investment | $ | 3,190,485 | $ | 3,071,761 | $ | 3,123,355 | $ | 3,012,275 | $ | 3,098,220 | ||||||||||
Plus: Net discount on acquired loans | 4,371 | 5,112 | 6,240 | 7,314 | 9,937 | |||||||||||||||
Total loans held for investment adjusted for acquired loan net discount | $ | 3,194,856 | $ | 3,076,873 | $ | 3,129,595 | $ | 3,019,589 | $ | 3,108,157 | ||||||||||
Allowance for loan losses plus acquired loan net discount loans to total loans held for investment adjusted for acquired loan net discount |
1.11 | % | 1.25 | % | 1.22 | % | 1.30 | % | 1.17 | % | ||||||||||
Green Bancorp, Inc.
Notes to Financial Highlights
(Unaudited)
Pre-tax, Pre-provision Operating Return on Average Assets. Pre-tax, pre-provision operating return on average assets is a non‑GAAP measure used by management to evaluate the Company’s financial performance. We calculate: (a) pre-tax, pre-provision operating return as net income (loss) plus provision (benefit) for income taxes, plus provision for loan losses, plus loss (gain) on sale of securities available-for-sale, net, plus loss (gain) on held for sale loans, net, plus stock based compensation expense for performance option vesting and (b) return (as described in clause (a)) divided by total average assets. For pre-tax, pre-provision operating return, the most directly comparable financial measure calculated in accordance with GAAP is net income and for pre-tax, pre-provision operating return on average assets is return on average assets.
We believe that this measure is important to many investors in the marketplace who are interested in understanding the operating performance of the company before provision for loan losses, which can vary from quarter to quarter, and income taxes.
The following table reconciles, as of the dates set forth below, pre-tax, pre-provision operating return on average assets:
For the Quarter Ended | For the Twelve Months Ended | |||||||||||||||||||||||||||
Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Dec 31, 2017 | Dec 31, 2016 | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Pre-Tax, Pre-Provision Operating Return | ||||||||||||||||||||||||||||
Net Income (loss) | $ | 2,619 | $ | 11,407 | $ | 12,898 | $ | 7,212 | $ | 2,544 | $ | 34,136 | $ | (972 | ) | |||||||||||||
Plus: Provision (benefit) for income taxes | 10,142 | 5,895 | 6,985 | 3,942 | 1,355 | 26,964 | (402 | ) | ||||||||||||||||||||
Plus: Provision for loan losses | 4,405 | 2,300 | 1,510 | 6,145 | 9,500 | 14,360 | 64,700 | |||||||||||||||||||||
Plus: Loss (gain) on sale of securities available-for-sale, net | — | 332 | (294 | ) | — | — | 38 | — | ||||||||||||||||||||
Plus: Loss (gain) on held for sale loans, net | 1,098 | 1,294 | 222 | 138 | 1,445 | 2,308 | 1,404 | |||||||||||||||||||||
Plus: Stock based compensation expense for performance option vesting |
3,051 | — | — | — | — | 3,051 | — | |||||||||||||||||||||
Total pre-tax, pre-provision operating return | $ | 21,315 | $ | 21,228 | $ | 21,321 | $ | 17,437 | $ | 14,844 | $ | 80,857 | $ | 64,730 | ||||||||||||||
Total Average Assets | $ | 4,204,105 | $ | 4,131,706 | $ | 4,096,386 | $ | 4,016,744 | $ | 3,974,244 | $ | 4,112,784 | $ | 3,860,808 | ||||||||||||||
Pre-Tax, Pre-Provision Operating Return on Average Assets (Annualized) |
2.01 | % | 2.04 | % | 2.09 | % | 1.76 | % | 1.49 | % | 1.97 | % | 1.68 | % | ||||||||||||||
Media Contact:
Mike Barone
713-275-8243
mbarone@greenbank.com
Investor Relations:
713-275-8220
investors@greenbank.com
Source: Green Bancorp, Inc.