Washington Trust Reports Third Quarter 2018 Earnings
WESTERLY, R.I., Oct. 22, 2018 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq: WASH), parent company of The Washington Trust Company, today announced third quarter 2018 net income of $17.5 million, or $1.01 per diluted share, compared to net income of $17.7 million, or $1.01 per diluted share, reported for the second quarter of 2018.
“Washington Trust’s third quarter results reflect another solid operating performance, led by good deposit growth, healthy loan production, and increased wealth management asset generation,” stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer.
Selected highlights for third quarter 2018 include:
- Profitability ratios remained strong, with returns on average equity and average assets of 16.26% and 1.47%, respectively.
- Total loans were up by $66 million, or 2%, from the end of the prior quarter and up by $233 million, or 7%, from a year ago.
- Total deposits were up by $93 million, or 3%, from the end of the preceding quarter and up by $257 million, or 8%, from a year ago.
- In September, Washington Trust declared a quarterly dividend of 43 cents per share. Year-to-date dividends declared amounted to $1.29 per share, an increase of 14 cents per share, or 12%, from the same period a year ago.
Net Interest IncomeNet interest income was $33.4 million for the third quarter of 2018, up by $338 thousand, or 1%, from the second quarter of 2018. Income associated with loan payoffs and prepayment penalties in the third quarter of 2018 was $173 thousand, compared to $483 thousand in the prior quarter. The net interest margin was 2.99% for the third quarter, down by 6 basis points from the preceding quarter. Excluding income associated with loan payoffs and prepayment penalties, the net interest margin was 2.98% for the third quarter, down by 3 basis points from the preceding quarter.
Significant linked quarter changes included:
- Average interest-earning assets increased by $86 million, largely due to loan growth. The yield on interest-earning assets for the third quarter was 4.03%, up by 5 basis points from the preceding quarter. Excluding the impact of income associated with loan payoffs and prepayment penalties, the yield on interest-earning assets was 4.02%, up by 8 basis points from the preceding quarter. The yield benefited from increased market rates of interest.
- Average non-interest bearing demand deposits increased by $38 million, largely due to the recapture of second quarter seasonal outflows. Average interest-bearing liabilities increased by $44 million, reflecting an increase of $57 million in average in-market deposits, partially offset by a decline of $13 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances). The cost of interest-bearing liabilities for the third quarter was 1.28%, up by 14 basis points from the preceding quarter, largely due to higher rates paid on promotional time certificates of deposit and interest-bearing demand deposits. The increase in the rate paid on interest-bearing demand deposits was primarily attributable to a program implemented in June 2018 that transitioned wealth management client assets, previously held in outside accounts, into insured deposits on Washington Trust's balance sheet.
Noninterest IncomeNoninterest income totaled $15.2 million for the third quarter of 2018, down by $778 thousand, or 5%, from the second quarter of 2018. Significant linked quarter changes included:
- Wealth management revenues were $9.5 million for the third quarter of 2018, down by $148 thousand, or 2%, on a linked quarter basis. This included a decrease of $334 thousand in transaction-based revenues, partially offset by an increase of $186 thousand, or 2%, in asset-based revenues. The linked quarter decrease in transaction-based revenues was largely attributable to tax preparation fee revenue, which is generally recognized in the second quarter.Wealth management assets under administration were $6.5 billion at September 30, 2018, up by $242 million, or 4%, from the balance at June 30, 2018, with $232 million of net investment appreciation and income and $10 million of net client inflows.
- Mortgage banking revenues were $2.6 million for the third quarter of 2018, down by $317 thousand, or 11%, from the preceding quarter. While third quarter results benefited from relatively higher volume of loans sold and sales yield, this was offset by a decrease in fair value adjustments on mortgage loan commitments and loans held for sale. The decrease in fair value adjustments reflected a decline in the mortgage pipeline and corresponding loan commitment balances as of September 30, 2018.
- Loan related derivative income was $278 thousand for the third quarter of 2018, down by $390 thousand from the preceding quarter, due to lower transaction volume of commercial borrower loan related derivatives.
Noninterest ExpensesNoninterest expenses totaled $26.1 million for the third quarter of 2018, down by $226 thousand, or 1%, from the second quarter of 2018. The linked quarter comparison of noninterest expenses was impacted by the following:
- Included in other expenses in the second quarter of 2018 were software system implementation expenses of $114 thousand primarily related to the conversion of our wealth management accounting system, which was completed in April 2018.
- In the third quarter of 2018, a one-time third-party vendor credit of $300 thousand was recognized as a reduction to outsourced services expense in the third quarter.
Excluding the impact of the aforementioned items, noninterest expenses for the third quarter of 2018 were up by $188 thousand or 1%, largely due to an increase in foreclosed property costs.
Income tax expense totaled $4.7 million for the third quarter of 2018, essentially unchanged from the preceding quarter. The effective tax rate for the third quarter of 2018 was 21.3%, compared to 21.2% for the preceding quarter.
Investment SecuritiesThe securities portfolio totaled $824 million at September 30, 2018, up by $35 million from the balance at June 30, 2018. The increase reflected purchases of debt securities in the third quarter totaling $65 million, with a weighted average yield of 3.46%. These purchases were partially offset by routine principal pay-downs on mortgage-backed securities and a temporary decline in the fair value of available for sale securities. Investment securities represented 17% of total assets at September 30, 2018.
LoansTotal loans amounted to $3.6 billion at September 30, 2018, up by $66 million, or 2%, from the end of the second quarter. Total commercial loans increased by $47 million, or 3%, reflecting an increase of $25 million in the commercial and industrial ("C&I") portfolio and an increase of $22 million in the commercial real estate portfolio. The residential real estate loan portfolio increased by $22 million, or 2%, from the balance at June 30, 2018, while total consumer loans declined by $3 million, or 1%, from the end of the second quarter.
Deposits and BorrowingsTotal deposits amounted to $3.4 billion at September 30, 2018, up by $93 million, or 3%, from the end of the preceding quarter. The increases reflected seasonal inflows of various institutional and governmental depositors based on their underlying business cycles, as well as growth in time certificates of deposit resulting from a promotional campaign that began in April 2018.
Federal Home Loan Bank advances amounted to $828 million at September 30, 2018, down by $73 million from the balance at June 30, 2018, due to growth in deposits.
Asset QualityTotal nonaccrual loans amounted to $10.8 million, or 0.30% of total loans, at September 30, 2018, down from $11.7 million, or 0.34% of total loans, at June 30, 2018. Total past due loans amounted to $13.5 million, or 0.38% of total loans, at September 30, 2018, down from $16.7 million, or 0.48% of total loans, at June 30, 2018.
Based on management's assessment of loan and credit quality metrics, loss exposures and changes in the loan portfolio during the quarter, a loan loss provision totaling $350 thousand was recognized in the third quarter of 2018, compared to a loan loss provision of $400 thousand recognized in the preceding quarter. Net charge-offs were nominal in both the third and second quarter of 2018, totaling $15 thousand and $90 thousand, respectively. The allowance for loan losses amounted to $26.5 million, or 0.75% of total loans, at September 30, 2018, compared to $26.2 million, or 0.75% of total loans, at June 30, 2018.
Capital and DividendsTotal shareholders' equity was $428 million at September 30, 2018, up by $6.3 million from June 30, 2018, reflecting net income of $17.5 million, partially offset by $7.5 million in dividends declared and a $4.0 million reduction in the accumulated comprehensive income component of shareholders' equity primarily due to a temporary decline in the fair value of available for sale securities.
Capital levels at September 30, 2018 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.77% at September 30, 2018, compared to 12.61% at June 30, 2018. Book value per share amounted to $24.75 at September 30, 2018, compared to $24.40 at June 30, 2018.
The Board of Directors declared a quarterly dividend of 43 cents per share for the quarter ended September 30, 2018. The dividend was paid on October 12, 2018 to shareholders of record on October 1, 2018.
Conference CallWashington Trust will host a conference call to discuss its third quarter results, business highlights and outlook on Tuesday, October 23, 2018 at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-877-407-9208. An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13683640; the audio replay will be available through October 30, 2018. Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through December 31, 2018.
BackgroundWashington Trust Bancorp, Inc. is the parent of The Washington Trust Company. Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies. Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts. The Corporation’s common stock trades on NASDAQ under the symbol WASH. Investor information is available on the Corporation’s web site at http://ir.washtrust.com.
Forward-Looking StatementsThis press release contains statements that are “forward-looking statements”. We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Supplemental Information - Explanation of Non-GAAP Financial MeasuresIn addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Assets: | |||||||||||||||
| Cash and due from banks | $ | 72,934 | $ | 132,068 | $ | 85,680 | $ | 79,853 | $ | 128,580 | |||||
| Short-term investments | 2,917 | 2,624 | 2,322 | 3,070 | 2,600 | ||||||||||
| Mortgage loans held for sale | 22,571 | 35,207 | 19,269 | 26,943 | 28,484 | ||||||||||
| Securities: | |||||||||||||||
| Available for sale, at fair value | 812,647 | 776,693 | 787,842 | 780,954 | 714,355 | ||||||||||
| Held to maturity, at amortized cost | 10,863 | 11,412 | 11,973 | 12,541 | 13,241 | ||||||||||
| Total securities | 823,510 | 788,105 | 799,815 | 793,495 | 727,596 | ||||||||||
| Federal Home Loan Bank stock, at cost | 44,525 | 46,281 | 41,127 | 40,517 | 42,173 | ||||||||||
| Loans: | |||||||||||||||
| Total loans | 3,556,203 | 3,490,230 | 3,387,406 | 3,374,071 | 3,323,078 | ||||||||||
| Less allowance for loan losses | 26,509 | 26,174 | 25,864 | 26,488 | 27,308 | ||||||||||
| Net loans | 3,529,694 | 3,464,056 | 3,361,542 | 3,347,583 | 3,295,770 | ||||||||||
| Premises and equipment, net | 28,195 | 28,377 | 28,316 | 28,333 | 28,591 | ||||||||||
| Investment in bank-owned life insurance | 79,891 | 79,319 | 73,782 | 73,267 | 72,729 | ||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,400 | 8,645 | 8,893 | 9,140 | 9,388 | ||||||||||
| Other assets | 94,126 | 88,651 | 81,671 | 63,740 | 69,410 | ||||||||||
| Total assets | $ | 4,770,672 | $ | 4,737,242 | $ | 4,566,326 | $ | 4,529,850 | $ | 4,469,230 | |||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing deposits | $ | 611,829 | $ | 577,656 | $ | 601,478 | $ | 578,410 | $ | 575,866 | |||||
| Interest-bearing deposits | 2,802,519 | 2,743,955 | 2,654,956 | 2,664,297 | 2,581,215 | ||||||||||
| Total deposits | 3,414,348 | 3,321,611 | 3,256,434 | 3,242,707 | 3,157,081 | ||||||||||
| Federal Home Loan Bank advances | 828,392 | 901,053 | 808,677 | 791,356 | 814,045 | ||||||||||
| Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||
| Other liabilities | 77,342 | 70,326 | 65,453 | 59,822 | 61,195 | ||||||||||
| Total liabilities | 4,342,763 | 4,315,671 | 4,153,245 | 4,116,566 | 4,055,002 | ||||||||||
| Shareholders’ Equity: | |||||||||||||||
| Common stock | 1,081 | 1,080 | 1,079 | 1,077 | 1,076 | ||||||||||
| Paid-in capital | 119,220 | 118,883 | 118,172 | 117,961 | 117,189 | ||||||||||
| Retained earnings | 346,685 | 336,670 | 326,505 | 317,756 | 312,334 | ||||||||||
| Accumulated other comprehensive loss | (39,077 | ) | (35,062 | ) | (32,675 | ) | (23,510 | ) | (16,371 | ) | |||||
| Total shareholders’ equity | 427,909 | 421,571 | 413,081 | 413,284 | 414,228 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 4,770,672 | $ | 4,737,242 | $ | 4,566,326 | $ | 4,529,850 | $ | 4,469,230 | |||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | ||||||||||||||||||||||
| For the Three Months Ended | For the Nine MonthsEnded | |||||||||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | ||||||||||||||||
| Interest income: | ||||||||||||||||||||||
| Interest and fees on loans | $ | 38,877 | $ | 37,101 | $ | 34,578 | $ | 33,459 | $ | 32,509 | $ | 110,556 | $ | 94,503 | ||||||||
| Taxable interest on securities | 5,383 | 5,358 | 5,118 | 4,719 | 4,655 | 15,859 | 14,208 | |||||||||||||||
| Nontaxable interest on securities | 9 | 20 | 23 | 24 | 41 | 52 | 225 | |||||||||||||||
| Dividends on Federal Home Loan Bank stock | 634 | 550 | 516 | 481 | 467 | 1,700 | 1,293 | |||||||||||||||
| Other interest income | 261 | 257 | 205 | 217 | 197 | 723 | 457 | |||||||||||||||
| Total interest and dividend income | 45,164 | 43,286 | 40,440 | 38,900 | 37,869 | 128,890 | 110,686 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||||
| Deposits | 6,546 | 5,254 | 4,422 | 4,136 | 3,835 | 16,222 | 10,928 | |||||||||||||||
| Federal Home Loan Bank advances | 4,937 | 4,707 | 3,983 | 3,708 | 3,816 | 13,627 | 10,669 | |||||||||||||||
| Junior subordinated debentures | 232 | 214 | 183 | 167 | 159 | 629 | 446 | |||||||||||||||
| Other interest expense | — | — | — | — | — | — | 1 | |||||||||||||||
| Total interest expense | 11,715 | 10,175 | 8,588 | 8,011 | 7,810 | 30,478 | 22,044 | |||||||||||||||
| Net interest income | 33,449 | 33,111 | 31,852 | 30,889 | 30,059 | 98,412 | 88,642 | |||||||||||||||
| Provision for loan losses | 350 | 400 | — | 200 | 1,300 | 750 | 2,400 | |||||||||||||||
| Net interest income after provision for loan losses | 33,099 | 32,711 | 31,852 | 30,689 | 28,759 | 97,662 | 86,242 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||||
| Wealth management revenues | 9,454 | 9,602 | 10,273 | 9,914 | 10,013 | 29,329 | 29,432 | |||||||||||||||
| Mortgage banking revenues | 2,624 | 2,941 | 2,838 | 3,097 | 3,036 | 8,403 | 8,295 | |||||||||||||||
| Service charges on deposit accounts | 885 | 903 | 863 | 946 | 942 | 2,651 | 2,726 | |||||||||||||||
| Card interchange fees | 983 | 961 | 847 | 904 | 894 | 2,791 | 2,598 | |||||||||||||||
| Income from bank-owned life insurance | 572 | 537 | 515 | 537 | 546 | 1,624 | 1,624 | |||||||||||||||
| Loan related derivative income | 278 | 668 | 141 | 470 | 1,452 | 1,087 | 2,744 | |||||||||||||||
| Other income | 419 | 381 | 266 | 342 | 400 | 1,066 | 1,180 | |||||||||||||||
| Total noninterest income | 15,215 | 15,993 | 15,743 | 16,210 | 17,283 | 46,951 | 48,599 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||
| Salaries and employee benefits | 17,283 | 17,304 | 17,772 | 17,194 | 17,362 | 52,359 | 51,697 | |||||||||||||||
| Net occupancy | 2,013 | 1,930 | 2,002 | 1,859 | 1,928 | 5,945 | 5,662 | |||||||||||||||
| Outsourced services | 1,951 | 2,350 | 1,873 | 1,960 | 1,793 | 6,174 | 4,960 | |||||||||||||||
| Equipment | 1,080 | 1,069 | 1,180 | 1,198 | 1,380 | 3,329 | 4,160 | |||||||||||||||
| Legal, audit and professional fees | 559 | 555 | 726 | 562 | 534 | 1,840 | 1,732 | |||||||||||||||
| FDIC deposit insurance costs | 410 | 422 | 404 | 389 | 308 | 1,236 | 1,258 | |||||||||||||||
| Advertising and promotion | 440 | 329 | 177 | 466 | 416 | 946 | 1,015 | |||||||||||||||
| Amortization of intangibles | 245 | 247 | 248 | 248 | 253 | 740 | 787 | |||||||||||||||
| Change in fair value of contingent consideration | — | — | — | (333 | ) | — | — | (310 | ) | |||||||||||||
| Other expenses | 2,081 | 2,082 | 2,748 | 2,211 | 2,780 | 6,911 | 7,385 | |||||||||||||||
| Total noninterest expense | 26,062 | 26,288 | 27,130 | 25,754 | 26,754 | 79,480 | 78,346 | |||||||||||||||
| Income before income taxes | 22,252 | 22,416 | 20,465 | 21,145 | 19,288 | 65,133 | 56,495 | |||||||||||||||
| Income tax expense | 4,741 | 4,742 | 4,254 | 13,163 | 6,326 | 13,737 | 18,552 | |||||||||||||||
| Net income | $ | 17,511 | $ | 17,674 | $ | 16,211 | $ | 7,982 | $ | 12,962 | $ | 51,396 | $ | 37,943 | ||||||||
| Net income available to common shareholders | $ | 17,475 | $ | 17,636 | $ | 16,173 | $ | 7,958 | $ | 12,934 | $ | 51,284 | $ | 37,859 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||
| Basic | 17,283 | 17,272 | 17,234 | 17,223 | 17,212 | 17,263 | 17,201 | |||||||||||||||
| Diluted | 17,382 | 17,387 | 17,345 | 17,349 | 17,318 | 17,392 | 17,320 | |||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||
| Basic | $ | 1.01 | $ | 1.02 | $ | 0.94 | $ | 0.46 | $ | 0.75 | $ | 2.97 | $ | 2.20 | ||||||||
| Diluted | $ | 1.01 | $ | 1.01 | $ | 0.93 | $ | 0.46 | $ | 0.75 | $ | 2.95 | $ | 2.19 | ||||||||
| Cash dividends declared per share | $ | 0.43 | $ | 0.43 | $ | 0.43 | $ | 0.39 | $ | 0.39 | $ | 1.29 | $ | 1.15 | ||||||||
| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Share and Equity Related Data: | |||||||||||||||
| Book value per share | $ | 24.75 | $ | 24.40 | $ | 23.93 | $ | 23.99 | $ | 24.06 | |||||
| Tangible book value per share - Non-GAAP (1) | $ | 20.57 | $ | 20.20 | $ | 19.71 | $ | 19.75 | $ | 19.81 | |||||
| Market value per share | $ | 55.30 | $ | 58.10 | $ | 53.75 | $ | 53.25 | $ | 57.25 | |||||
| Shares issued and outstanding at end of period | 17,290 | 17,278 | 17,262 | 17,227 | 17,214 | ||||||||||
| Capital Ratios (2): | |||||||||||||||
| Tier 1 risk-based capital | 12.00 | % | 11.84 | % | 11.78 | % | 11.65 | % | 11.69 | % | |||||
| Total risk-based capital | 12.77 | % | 12.61 | % | 12.56 | % | 12.45 | % | 12.53 | % | |||||
| Tier 1 leverage ratio | 8.91 | % | 8.87 | % | 8.84 | % | 8.79 | % | 8.83 | % | |||||
| Common equity tier 1 | 11.37 | % | 11.20 | % | 11.13 | % | 10.99 | % | 11.02 | % | |||||
| Balance Sheet Ratios: | |||||||||||||||
| Equity to assets | 8.97 | % | 8.90 | % | 9.05 | % | 9.12 | % | 9.27 | % | |||||
| Tangible equity to tangible assets - Non-GAAP (1) | 7.57 | % | 7.48 | % | 7.57 | % | 7.63 | % | 7.76 | % | |||||
| Loans to deposits (3) | 104.0 | % | 105.3 | % | 103.8 | % | 104.1 | % | 105.3 | % | |||||
| For the Nine MonthsEnded | |||||||||||||||
| For the Three Months Ended | |||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | |||||||||
| Performance Ratios (4): | |||||||||||||||
| Net interest margin (5) | 2.99 | % | 3.05 | % | 3.03 | % | 2.95 | % | 2.93 | % | 3.03 | % | 2.92 | % | |
| Return on average assets (net income divided by average assets) | 1.47 | % | 1.53 | % | 1.45 | % | 0.71 | % | 1.17 | % | 1.48 | % | 1.16 | % | |
| Return on average tangible assets - Non-GAAP (1) | 1.49 | % | 1.56 | % | 1.48 | % | 0.72 | % | 1.19 | % | 1.51 | % | 1.18 | % | |
| Return on average equity (net income available for common shareholders divided by average equity) | 16.26 | % | 16.99 | % | 15.96 | % | 7.56 | % | 12.43 | % | 16.41 | % | 12.50 | % | |
| Return on average tangible equity - Non-GAAP (1) | 19.59 | % | 20.58 | % | 19.40 | % | 9.17 | % | 15.12 | % | 19.86 | % | 15.29 | % | |
| Efficiency ratio (6) | 53.6 | % | 53.5 | % | 57.0 | % | 54.7 | % | 56.5 | % | 54.7 | % | 57.1 | % | |
- See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.
- Estimated for September 30, 2018 and actuals for the remaining periods.
- Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits.
- Annualized based on the actual number of days in the period.
- Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets.
- Total noninterest expense as percentage of total revenues (net interest income and noninterest income).
| SELECTED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||
| For the Three Months Ended | For the Nine MonthsEnded | |||||||||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | ||||||||||||||||
| Wealth Management Results | ||||||||||||||||||||||
| Wealth Management Revenues: | ||||||||||||||||||||||
| Asset-based revenues | $ | 9,322 | $ | 9,136 | $ | 9,955 | $ | 9,686 | $ | 9,791 | $ | 28,413 | $ | 28,439 | ||||||||
| Transaction-based revenues | 132 | 466 | 318 | 228 | 222 | 916 | 993 | |||||||||||||||
| Total wealth management revenues | $ | 9,454 | $ | 9,602 | $ | 10,273 | $ | 9,914 | $ | 10,013 | $ | 29,329 | $ | 29,432 | ||||||||
| Assets Under Administration (AUA): | ||||||||||||||||||||||
| Balance at beginning of period | $ | 6,220,155 | $ | 6,343,720 | $ | 6,714,637 | $ | 6,587,899 | $ | 6,403,501 | $ | 6,714,637 | $ | 6,063,293 | ||||||||
| Net investment appreciation (depreciation) & income | 232,245 | 133,450 | (32,024 | ) | 163,681 | 270,549 | 333,671 | 653,896 | ||||||||||||||
| Net client asset flows | 9,940 | (257,015 | ) | (338,893 | ) | (36,943 | ) | (86,151 | ) | (585,968 | ) | (129,290 | ) | |||||||||
| Balance at end of period | $ | 6,462,340 | $ | 6,220,155 | $ | 6,343,720 | $ | 6,714,637 | $ | 6,587,899 | $ | 6,462,340 | $ | 6,587,899 | ||||||||
| Percentage of AUA that are managed assets | 91 | % | 92 | % | 92 | % | 93 | % | 92 | % | 91 | % | 92 | % | ||||||||
| Mortgage Banking Results | ||||||||||||||||||||||
| Mortgage Banking Revenues: | ||||||||||||||||||||||
| Gains & commissions on loan sales, net (1) | $ | 2,485 | $ | 2,786 | $ | 2,679 | $ | 2,987 | $ | 2,952 | $ | 7,950 | $ | 8,004 | ||||||||
| Residential mortgage servicing fee income, net | 139 | 155 | 159 | 110 | 84 | 453 | 291 | |||||||||||||||
| Total mortgage banking revenues | $ | 2,624 | $ | 2,941 | $ | 2,838 | $ | 3,097 | $ | 3,036 | $ | 8,403 | $ | 8,295 | ||||||||
| Residential Mortgage Loan Originations: | ||||||||||||||||||||||
| Originations for retention in portfolio | $ | 94,866 | $ | 128,479 | $ | 67,840 | $ | 75,595 | $ | 90,378 | $ | 291,185 | $ | 243,079 | ||||||||
| Originations for sale to secondary market (2) | 119,832 | 122,693 | 87,720 | 143,834 | 143,112 | 330,245 | 390,044 | |||||||||||||||
| Total mortgage loan originations | $ | 214,698 | $ | 251,172 | $ | 155,560 | $ | 219,429 | $ | 233,490 | $ | 621,430 | $ | 633,123 | ||||||||
| Residential Mortgage Loans Sold: | ||||||||||||||||||||||
| Sold with servicing rights retained | $ | 24,422 | $ | 24,367 | $ | 33,575 | $ | 39,769 | $ | 37,823 | $ | 82,634 | $ | 89,589 | ||||||||
| Sold with servicing rights released (2) | 107,724 | 81,054 | 63,265 | 105,416 | 109,508 | 252,043 | 302,098 | |||||||||||||||
| Total mortgage loans sold | $ | 132,146 | $ | 105,421 | $ | 96,840 | $ | 145,185 | $ | 147,331 | $ | 334,677 | $ | 391,687 | ||||||||
- Includes gains on loan sales, commissions on loans originated for others, servicing right gains, fair value adjustments on loans held for sale, and fair value adjustments and gains on forward loan commitments.
- Also includes loans originated in a broker capacity.
| END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Loans: | |||||||||||||||
| Commercial real estate (1) | $ | 1,240,350 | $ | 1,218,643 | $ | 1,217,278 | $ | 1,210,495 | $ | 1,211,792 | |||||
| Commercial & industrial | 656,882 | 632,029 | 603,830 | 612,334 | 588,324 | ||||||||||
| Total commercial | 1,897,232 | 1,850,672 | 1,821,108 | 1,822,829 | 1,800,116 | ||||||||||
| Residential real estate (2) | 1,349,340 | 1,327,418 | 1,249,890 | 1,227,248 | 1,195,537 | ||||||||||
| Home equity | 282,331 | 283,744 | 285,723 | 292,467 | 294,657 | ||||||||||
| Other | 27,300 | 28,396 | 30,685 | 31,527 | 32,768 | ||||||||||
| Total consumer | 309,631 | 312,140 | 316,408 | 323,994 | 327,425 | ||||||||||
| Total loans | $ | 3,556,203 | $ | 3,490,230 | $ | 3,387,406 | $ | 3,374,071 | $ | 3,323,078 | |||||
- Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.
- Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four-family residential properties.
| September 30, 2018 | December 31, 2017 | ||||||||||
| Balance | % of Total | Balance | % of Total | ||||||||
| Commercial Real Estate Loans by Property Location: | |||||||||||
| Rhode Island | $ | 352,297 | 28.4 | % | $ | 360,834 | 29.8 | % | |||
| Connecticut | 499,996 | 40.3 | 461,230 | 38.1 | |||||||
| Massachusetts | 299,082 | 24.1 | 309,013 | 25.5 | |||||||
| Subtotal | 1,151,375 | 92.8 | 1,131,077 | 93.4 | |||||||
| All other states | 88,975 | 7.2 | 79,418 | 6.6 | |||||||
| Total commercial real estate loans | $ | 1,240,350 | 100.0 | % | $ | 1,210,495 | 100.0 | % | |||
| Residential Real Estate Loans by Property Location: | |||||||||||
| Rhode Island | $ | 347,657 | 25.8 | % | $ | 343,340 | 28.0 | % | |||
| Connecticut | 145,962 | 10.8 | 140,843 | 11.5 | |||||||
| Massachusetts | 838,628 | 62.1 | 726,712 | 59.2 | |||||||
| Subtotal | 1,332,247 | 98.7 | 1,210,895 | 98.7 | |||||||
| All other states | 17,093 | 1.3 | 16,353 | 1.3 | |||||||
| Total residential real estate loans | $ | 1,349,340 | 100.0 | % | $ | 1,227,248 | 100.0 | % | |||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing demand deposits | $ | 611,829 | $ | 577,656 | $ | 601,478 | $ | 578,410 | $ | 575,866 | |||||
| Interest-bearing demand deposits | 151,322 | 136,640 | 83,249 | 82,728 | 45,407 | ||||||||||
| NOW accounts | 468,578 | 481,905 | 470,112 | 466,605 | 448,128 | ||||||||||
| Money market accounts | 650,976 | 604,954 | 693,748 | 731,345 | 716,827 | ||||||||||
| Savings accounts | 372,425 | 375,983 | 376,608 | 368,524 | 367,912 | ||||||||||
| Time deposits (in-market) | 715,635 | 698,286 | 625,965 | 617,368 | 587,166 | ||||||||||
| In-market deposits | 2,970,765 | 2,875,424 | 2,851,160 | 2,844,980 | 2,741,306 | ||||||||||
| Wholesale brokered time deposits | 443,583 | 446,187 | 405,274 | 397,727 | 415,775 | ||||||||||
| Total deposits | $ | 3,414,348 | $ | 3,321,611 | $ | 3,256,434 | $ | 3,242,707 | $ | 3,157,081 | |||||
| CREDIT & ASSET QUALITY DATA | |||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Asset Quality Ratios: | |||||||||||||||
| Nonperforming assets to total assets | 0.29 | % | 0.32 | % | 0.30 | % | 0.34 | % | 0.44 | % | |||||
| Nonaccrual loans to total loans | 0.30 | % | 0.34 | % | 0.31 | % | 0.45 | % | 0.56 | % | |||||
| Total past due loans to total loans | 0.38 | % | 0.48 | % | 0.57 | % | 0.59 | % | 0.49 | % | |||||
| Allowance for loan losses to nonaccrual loans | 245.25 | % | 222.85 | % | 245.83 | % | 174.14 | % | 147.52 | % | |||||
| Allowance for loan losses to total loans | 0.75 | % | 0.75 | % | 0.76 | % | 0.79 | % | 0.82 | % | |||||
| Nonperforming Assets: | |||||||||||||||
| Commercial real estate | $ | — | $ | — | $ | — | $ | 4,954 | $ | 5,887 | |||||
| Commercial & industrial | 122 | 397 | 397 | 283 | 429 | ||||||||||
| Total commercial | 122 | 397 | 397 | 5,237 | 6,316 | ||||||||||
| Residential real estate | 9,063 | 10,206 | 9,340 | 9,414 | 11,699 | ||||||||||
| Home equity | 1,624 | 1,133 | 771 | 544 | 480 | ||||||||||
| Other consumer | — | 9 | 13 | 16 | 16 | ||||||||||
| Total consumer | 1,624 | 1,142 | 784 | 560 | 496 | ||||||||||
| Total nonaccrual loans | 10,809 | 11,745 | 10,521 | 15,211 | 18,511 | ||||||||||
| Other real estate owned | 2,974 | 3,206 | 3,206 | 131 | 1,038 | ||||||||||
| Total nonperforming assets | $ | 13,783 | $ | 14,951 | $ | 13,727 | $ | 15,342 | $ | 19,549 | |||||
| Past Due Loans (30 days or more past due): | |||||||||||||||
| Commercial real estate | $ | 931 | $ | — | $ | — | $ | 4,960 | $ | 5,887 | |||||
| Commercial & industrial | 142 | 2,851 | 3,295 | 4,076 | 455 | ||||||||||
| Total commercial | 1,073 | 2,851 | 3,295 | 9,036 | 6,342 | ||||||||||
| Residential real estate | 9,398 | 11,243 | 11,806 | 7,855 | 7,802 | ||||||||||
| Home equity | 2,939 | 2,585 | 4,235 | 3,141 | 2,268 | ||||||||||
| Other consumer | 109 | 16 | 22 | 43 | 35 | ||||||||||
| Total consumer | 3,048 | 2,601 | 4,257 | 3,184 | 2,303 | ||||||||||
| Total past due loans | $ | 13,519 | $ | 16,695 | $ | 19,358 | $ | 20,075 | $ | 16,447 | |||||
| Accruing loans 90 days or more past due | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| Nonaccrual loans included in past due loans | $ | 6,425 | $ | 8,575 | $ | 7,066 | $ | 11,788 | $ | 13,216 | |||||
| CREDIT & ASSET QUALITY DATA | ||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||
| For the Three Months Ended | For the Nine MonthsEnded | |||||||||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | ||||||||||||||||
| Nonaccrual Loan Activity: | ||||||||||||||||||||||
| Balance at beginning of period | $ | 11,745 | $ | 10,521 | $ | 15,211 | $ | 18,511 | $ | 20,198 | $ | 15,211 | $ | 22,058 | ||||||||
| Additions to nonaccrual status | 2,179 | 2,457 | 1,210 | 462 | 1,969 | 5,846 | 6,053 | |||||||||||||||
| Loans returned to accruing status | (361 | ) | (475 | ) | (344 | ) | (1,316 | ) | (1,411 | ) | (1,180 | ) | (2,736 | ) | ||||||||
| Loans charged-off | (96 | ) | (103 | ) | (690 | ) | (1,047 | ) | (694 | ) | (889 | ) | (1,415 | ) | ||||||||
| Loans transferred to other real estate owned | — | — | (3,074 | ) | — | — | (3,074 | ) | (576 | ) | ||||||||||||
| Payments, payoffs and other changes | (2,658 | ) | (655 | ) | (1,792 | ) | (1,399 | ) | (1,551 | ) | (5,105 | ) | (4,873 | ) | ||||||||
| Balance at end of period | $ | 10,809 | $ | 11,745 | $ | 10,521 | $ | 15,211 | $ | 18,511 | $ | 10,809 | $ | 18,511 | ||||||||
| Allowance for Loan Losses: | ||||||||||||||||||||||
| Balance at beginning of period | $ | 26,174 | $ | 25,864 | $ | 26,488 | $ | 27,308 | $ | 26,662 | $ | 26,488 | $ | 26,004 | ||||||||
| Provision charged to earnings | 350 | 400 | — | 200 | 1,300 | 750 | 2,400 | |||||||||||||||
| Charge-offs | (96 | ) | (103 | ) | (690 | ) | (1,047 | ) | (694 | ) | (889 | ) | (1,415 | ) | ||||||||
| Recoveries | 81 | 13 | 66 | 27 | 40 | 160 | 319 | |||||||||||||||
| Balance at end of period | $ | 26,509 | $ | 26,174 | $ | 25,864 | $ | 26,488 | $ | 27,308 | $ | 26,509 | $ | 27,308 | ||||||||
| Net Loan Charge-Offs (Recoveries): | ||||||||||||||||||||||
| Commercial real estate | $ | — | $ | — | $ | 602 | $ | 932 | $ | 535 | $ | 602 | $ | 853 | ||||||||
| Commercial & industrial | (70 | ) | (3 | ) | (23 | ) | 43 | 114 | (96 | ) | 124 | |||||||||||
| Total commercial | (70 | ) | (3 | ) | 579 | 975 | 649 | 506 | 977 | |||||||||||||
| Residential real estate | 68 | 5 | — | 32 | (1 | ) | 73 | 3 | ||||||||||||||
| Home equity | (2 | ) | 73 | 28 | (2 | ) | (7 | ) | 99 | 48 | ||||||||||||
| Other consumer | 19 | 15 | 17 | 15 | 13 | 51 | 68 | |||||||||||||||
| Total consumer | 17 | 88 | 45 | 13 | 6 | 150 | 116 | |||||||||||||||
| Total | $ | 15 | $ | 90 | $ | 624 | $ | 1,020 | $ | 654 | $ | 729 | $ | 1,096 | ||||||||
| Net charge-offs to average loans (annualized) | — | % | 0.01 | % | 0.07 | % | 0.12 | % | 0.08 | % | 0.03 | % | 0.04 | % | ||||||||
The following table presents average balance and interest rate information. Tax-exempt income is converted to a FTE basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations. Nonaccrual and renegotiated loans, as well as interest recognized on these loans are included in amounts presented for loans. Certain previously reported amounts have been reclassified to conform to current year's presentation.
| CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | |||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||
| For the Three Months Ended | September 30, 2018 | June 30, 2018 | Quarter Change | ||||||||||||||||||||
| AverageBalance | Interest | Yield/Rate | AverageBalance | Interest | Yield/Rate | AverageBalance | Interest | Yield/ Rate | |||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash, federal funds sold and short-term investments | $52,218 | $261 | 1.98 | % | $56,142 | $257 | 1.84 | % | ($3,924 | ) | $4 | 0.14 | % | ||||||||||
| Mortgage loans held for sale | 34,571 | 384 | 4.41 | 30,203 | 313 | 4.16 | 4,368 | 71 | 0.25 | ||||||||||||||
| Taxable debt securities | 825,302 | 5,383 | 2.59 | 821,772 | 5,358 | 2.62 | 3,530 | 25 | (0.03 | ) | |||||||||||||
| Nontaxable debt securities | 935 | 11 | 4.67 | 1,956 | 26 | 5.33 | (1,021 | ) | (15 | ) | (0.66 | ) | |||||||||||
| Total securities | 826,237 | 5,394 | 2.59 | 823,728 | 5,384 | 2.62 | 2,509 | 10 | (0.03 | ) | |||||||||||||
| FHLB stock | 45,181 | 634 | 5.57 | 43,331 | 550 | 5.09 | 1,850 | 84 | 0.48 | ||||||||||||||
| Commercial real estate | 1,233,230 | 13,931 | 4.48 | 1,225,926 | 13,463 | 4.40 | 7,304 | 468 | 0.08 | ||||||||||||||
| Commercial & industrial | 642,005 | 7,720 | 4.77 | 622,141 | 7,569 | 4.88 | 19,864 | 151 | (0.11 | ) | |||||||||||||
| Total commercial | 1,875,235 | $21,651 | 4.58 | 1,848,067 | $21,032 | 4.56 | 27,168 | $619 | 0.02 | ||||||||||||||
| Residential real estate | 1,331,304 | 13,362 | 3.98 | 1,275,171 | 12,426 | 3.91 | 56,133 | 936 | 0.07 | ||||||||||||||
| Home equity | 284,080 | 3,469 | 4.84 | 284,188 | 3,278 | 4.63 | (108 | ) | 191 | 0.21 | |||||||||||||
| Other | 27,635 | 344 | 4.94 | 29,696 | 360 | 4.86 | (2,061 | ) | (16 | ) | 0.08 | ||||||||||||
| Total consumer | 311,715 | 3,813 | 4.85 | 313,884 | 3,638 | 4.65 | (2,169 | ) | 175 | 0.20 | |||||||||||||
| Total loans | 3,518,254 | 38,826 | 4.38 | 3,437,122 | 37,096 | 4.33 | 81,132 | 1,730 | 0.05 | ||||||||||||||
| Total interest-earning assets | 4,476,461 | 45,499 | 4.03 | 4,390,526 | 43,600 | 3.98 | 85,935 | 1,899 | 0.05 | ||||||||||||||
| Noninterest-earning assets | 248,437 | 238,290 | 10,147 | ||||||||||||||||||||
| Total assets | $4,724,898 | $4,628,816 | $96,082 | ||||||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||||
| Interest-bearing demand deposits | $134,632 | $465 | 1.37 | % | $86,204 | $101 | 0.47 | % | $48,428 | $364 | 0.90 | % | |||||||||||
| NOW accounts | 458,143 | 104 | 0.09 | 460,712 | 57 | 0.05 | (2,569 | ) | 47 | 0.04 | |||||||||||||
| Money market accounts | 631,570 | 1,104 | 0.69 | 664,127 | 960 | 0.58 | (32,557 | ) | 144 | 0.11 | |||||||||||||
| Savings accounts | 375,528 | 60 | 0.06 | 375,690 | 57 | 0.06 | (162 | ) | 3 | — | |||||||||||||
| Time deposits (in-market) | 706,726 | 2,806 | 1.58 | 662,969 | 2,265 | 1.37 | 43,757 | 541 | 0.21 | ||||||||||||||
| Total interest-bearing in-market deposits | 2,306,599 | 4,539 | 0.78 | 2,249,702 | 3,440 | 0.61 | 56,897 | 1,099 | 0.17 | ||||||||||||||
| Wholesale brokered time deposits | 438,604 | 2,007 | 1.82 | 430,118 | 1,814 | 1.69 | 8,486 | 193 | 0.13 | ||||||||||||||
| Total interest-bearing deposits | 2,745,203 | 6,546 | 0.95 | 2,679,820 | 5,254 | 0.79 | 65,383 | 1,292 | 0.16 | ||||||||||||||
| FHLB advances | 852,904 | 4,937 | 2.30 | 874,746 | 4,707 | 2.16 | (21,842 | ) | 230 | 0.14 | |||||||||||||
| Junior subordinated debentures | 22,681 | 232 | 4.06 | 22,681 | 214 | 3.78 | — | 18 | 0.28 | ||||||||||||||
| Total interest-bearing liabilities | 3,620,788 | 11,715 | 1.28 | 3,577,247 | 10,175 | 1.14 | 43,541 | 1,540 | 0.14 | ||||||||||||||
| Noninterest-bearing demand deposits | 612,597 | 574,258 | 38,339 | ||||||||||||||||||||
| Other liabilities | 65,207 | 60,878 | 4,329 | ||||||||||||||||||||
| Shareholders' equity | 426,306 | 416,433 | 9,873 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $4,724,898 | $4,628,816 | $96,082 | ||||||||||||||||||||
| Net interest income (FTE) | $33,784 | $33,425 | $359 | ||||||||||||||||||||
| Interest rate spread | 2.75 | % | 2.84 | % | (0.09 | )% | |||||||||||||||||
| Net interest margin | 2.99 | % | 3.05 | % | (0.06 | )% | |||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Three Months Ended | Sep 30,2018 | Jun 30,2018 | QuarterChange | |||||||||
| Commercial loans | $ | 333 | $ | 308 | $ | 25 | ||||||
| Nontaxable debt securities | 2 | 6 | (4 | ) | ||||||||
| Total | $ | 335 | $ | 314 | $ | 21 | ||||||
| CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | ||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||
| For the Nine Months Ended | September 30, 2018 | September 30, 2017 | Change | |||||||||||||||||
| AverageBalance | Interest | Yield/Rate | AverageBalance | Interest | Yield/ Rate | AverageBalance | Interest | Yield/ Rate | ||||||||||||
| Assets: | ||||||||||||||||||||
| Cash, federal funds sold and short-term investments | $53,828 | $723 | 1.80 | % | $59,357 | $457 | 1.03 | % | ($5,529 | ) | $266 | 0.77 | % | |||||||
| Mortgage loans for sale | 29,770 | 923 | 4.15 | 25,090 | 734 | 3.91 | 4,680 | 189 | 0.24 | |||||||||||
| Taxable debt securities | 817,274 | 15,859 | 2.59 | 760,308 | 14,208 | 2.50 | 56,966 | 1,651 | 0.09 | |||||||||||
| Nontaxable debt securities | 1,743 | 65 | 4.99 | 7,602 | 347 | 6.10 | (5,859 | ) | (282 | ) | (1.11 | ) | ||||||||
| Total securities | 819,017 | 15,924 | 2.60 | 767,910 | 14,555 | 2.53 | 51,107 | 1,369 | 0.07 | |||||||||||
| FHLB stock | 43,149 | 1,700 | 5.27 | 44,015 | 1,293 | 3.93 | (866 | ) | 407 | 1.34 | ||||||||||
| Commercial real estate | 1,225,875 | 39,740 | 4.33 | 1,175,302 | 32,824 | 3.73 | 50,573 | 6,916 | 0.60 | |||||||||||
| Commercial & industrial | 624,563 | 22,113 | 4.73 | 581,514 | 19,448 | 4.47 | 43,049 | 2,665 | 0.26 | |||||||||||
| Total commercial | 1,850,438 | 61,853 | 4.47 | 1,756,816 | 52,272 | 3.98 | 93,622 | 9,581 | 0.49 | |||||||||||
| Residential real estate | 1,278,662 | 37,717 | 3.94 | 1,150,473 | 32,763 | 3.81 | 128,189 | 4,954 | 0.13 | |||||||||||
| Home equity | 285,143 | 9,908 | 4.65 | 297,079 | 9,120 | 4.10 | (11,936 | ) | 788 | 0.55 | ||||||||||
| Other | 29,328 | 1,073 | 4.89 | 35,166 | 1,271 | 4.83 | (5,838 | ) | (198 | ) | 0.06 | |||||||||
| Total consumer | 314,471 | 10,981 | 4.67 | 332,245 | 10,391 | 4.18 | (17,774 | ) | 590 | 0.49 | ||||||||||
| Total loans | 3,443,571 | 110,551 | 4.29 | 3,239,534 | 95,426 | 3.94 | 204,037 | 15,125 | 0.35 | |||||||||||
| Total interest-earning assets | 4,389,335 | 129,821 | 3.95 | 4,135,906 | 112,465 | 3.64 | 253,429 | 17,356 | 0.31 | |||||||||||
| Noninterest-earning assets | 239,187 | 238,050 | 1,137 | |||||||||||||||||
| Total assets | $4,628,522 | $4,373,956 | $254,566 | |||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||
| Interest-bearing demand deposits | $100,644 | $595 | 0.79 | % | $52,564 | $37 | 0.09 | % | $48,080 | $558 | 0.70 | % | ||||||||
| NOW accounts | 456,083 | 215 | 0.06 | 433,435 | 176 | 0.05 | 22,648 | 39 | 0.01 | |||||||||||
| Money market accounts | 671,135 | 2,944 | 0.59 | 715,386 | 1,881 | 0.35 | (44,251 | ) | 1,063 | 0.24 | ||||||||||
| Savings accounts | 373,105 | 173 | 0.06 | 361,904 | 158 | 0.06 | 11,201 | 15 | — | |||||||||||
| Time deposits (in-market) | 662,850 | 6,890 | 1.39 | 559,938 | 4,443 | 1.06 | 102,912 | 2,447 | 0.33 | |||||||||||
| Total interest-bearing in-market deposits | 2,263,817 | 10,817 | 0.64 | 2,123,227 | 6,695 | 0.42 | 140,590 | 4,122 | 0.22 | |||||||||||
| Wholesale brokered time deposits | 426,096 | 5,405 | 1.70 | 398,349 | 4,233 | 1.42 | 27,747 | 1,172 | 0.28 | |||||||||||
| Total interest-bearing deposits | 2,689,913 | 16,222 | 0.81 | 2,521,576 | 10,928 | 0.58 | 168,337 | 5,294 | 0.23 | |||||||||||
| FHLB advances | 846,359 | 13,627 | 2.15 | 828,775 | 10,669 | 1.72 | 17,584 | 2,958 | 0.43 | |||||||||||
| Junior subordinated debentures | 22,681 | 629 | 3.71 | 22,681 | 446 | 2.63 | — | 183 | 1.08 | |||||||||||
| Other | — | — | — | 13 | 1 | 10.28 | (13 | ) | (1 | ) | (10.28 | ) | ||||||||
| Total interest-bearing liabilities | 3,558,953 | 30,478 | 1.14 | 3,373,045 | 22,044 | 0.87 | 185,908 | 8,434 | 0.27 | |||||||||||
| Noninterest-bearing demand deposits | 590,573 | 546,393 | 44,180 | |||||||||||||||||
| Other liabilities | 61,042 | 49,721 | 11,321 | |||||||||||||||||
| Shareholders' equity | 417,954 | 404,797 | 13,157 | |||||||||||||||||
| Total liabilities and shareholders' equity | $4,628,522 | $4,373,956 | $254,566 | |||||||||||||||||
| Net interest income (FTE) | $99,343 | $90,421 | $8,922 | |||||||||||||||||
| Interest rate spread | 2.81 | % | 2.77 | % | 0.04 | % | ||||||||||||||
| Net interest margin | 3.03 | % | 2.92 | % | 0.11 | % | ||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Nine Months Ended | Sep 30,2018 | Sep 30,2017 | Change | |||||
| Commercial loans | $918 | $1,657 | ($739 | ) | ||||
| Nontaxable debt securities | 13 | 122 | (109 | ) | ||||
| Total | $931 | $1,779 | ($848 | ) | ||||
| SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Tangible Book Value per Share: | |||||||||||||||
| Total shareholders' equity, as reported | $ | 427,909 | $ | 421,571 | $ | 413,081 | $ | 413,284 | $ | 414,228 | |||||
| Less: | |||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,400 | 8,645 | 8,893 | 9,140 | 9,388 | ||||||||||
| Total tangible shareholders' equity | $ | 355,600 | $ | 349,017 | $ | 340,279 | $ | 340,235 | $ | 340,931 | |||||
| Shares outstanding, as reported | 17,290 | 17,278 | 17,262 | 17,227 | 17,214 | ||||||||||
| Book value per share - GAAP | $ | 24.75 | $ | 24.40 | $ | 23.93 | $ | 23.99 | $ | 24.06 | |||||
| Tangible book value per share - Non-GAAP | $ | 20.57 | $ | 20.20 | $ | 19.71 | $ | 19.75 | $ | 19.81 | |||||
| Tangible Equity to Tangible Assets: | |||||||||||||||
| Total tangible shareholders' equity | $ | 355,600 | $ | 349,017 | $ | 340,279 | $ | 340,235 | $ | 340,931 | |||||
| Total assets, as reported | $ | 4,770,672 | $ | 4,737,242 | $ | 4,566,326 | $ | 4,529,850 | $ | 4,469,230 | |||||
| Less: | |||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
| Identifiable intangible assets, net | 8,400 | 8,645 | 8,893 | 9,140 | 9,388 | ||||||||||
| Total tangible assets | $ | 4,698,363 | $ | 4,664,688 | $ | 4,493,524 | $ | 4,456,801 | $ | 4,395,933 | |||||
| Equity to assets - GAAP | 8.97 | % | 8.90 | % | 9.05 | % | 9.12 | % | 9.27 | % | |||||
| Tangible equity to tangible assets - Non-GAAP | 7.57 | % | 7.48 | % | 7.57 | % | 7.63 | % | 7.76 | % | |||||
| For the Three Months Ended | For the Nine MonthsEnded | |||||||||||||||||||||
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | ||||||||||||||||
| Return on Average Tangible Assets: | ||||||||||||||||||||||
| Net income, as reported | $ | 17,511 | $ | 17,674 | $ | 16,211 | $ | 7,982 | $ | 12,962 | $ | 51,396 | $ | 37,943 | ||||||||
| Total average assets, as reported | $ | 4,724,898 | $ | 4,628,816 | $ | 4,529,708 | $ | 4,473,340 | $ | 4,401,536 | $ | 4,628,522 | $ | 4,373,956 | ||||||||
| Less average balances of: | ||||||||||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 64,008 | |||||||||||||||
| Identifiable intangible assets, net | 8,519 | 8,766 | 9,014 | 9,261 | 9,511 | 8,764 | 9,766 | |||||||||||||||
| Total average tangible assets | $ | 4,652,470 | $ | 4,556,141 | $ | 4,456,785 | $ | 4,400,170 | $ | 4,328,116 | $ | 4,555,849 | $ | 4,300,182 | ||||||||
| Return on average assets - GAAP | 1.47 | % | 1.53 | % | 1.45 | % | 0.71 | % | 1.17 | % | 1.48 | % | 1.16 | % | ||||||||
| Return on average tangible assets - Non-GAAP | 1.49 | % | 1.56 | % | 1.48 | % | 0.72 | % | 1.19 | % | 1.51 | % | 1.18 | % | ||||||||
| Return on Average Tangible Equity: | ||||||||||||||||||||||
| Net income available to common shareholders, as reported | $ | 17,475 | $ | 17,636 | $ | 16,173 | $ | 7,958 | $ | 12,934 | $ | 51,284 | $ | 37,859 | ||||||||
| Total average equity, as reported | $ | 426,306 | $ | 416,433 | $ | 410,955 | $ | 417,568 | $ | 412,862 | $ | 417,954 | $ | 404,797 | ||||||||
| Less average balances of: | ||||||||||||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 64,008 | |||||||||||||||
| Identifiable intangible assets, net | 8,519 | 8,766 | 9,014 | 9,261 | 9,511 | 8,764 | 9,766 | |||||||||||||||
| Total average tangible equity | $ | 353,878 | $ | 343,758 | $ | 338,032 | $ | 344,398 | $ | 339,442 | $ | 345,281 | $ | 331,023 | ||||||||
| Return on average equity - GAAP | 16.26 | % | 16.99 | % | 15.96 | % | 7.56 | % | 12.43 | % | 16.41 | % | 12.50 | % | ||||||||
| Return on average tangible equity - Non-GAAP | 19.59 | % | 20.58 | % | 19.40 | % | 9.17 | % | 15.12 | % | 19.86 | % | 15.29 | % | ||||||||
Contact: Elizabeth B. EckelSenior Vice President, MarketingTelephone: (401) 348-1309E-mail: [email protected]
