Current quarter's core earnings were
“We continued to gain momentum this quarter in several critical areas, including growing core funding and maintaining a strong liquidity position. We also continued to uphold our credit quality through prudent risk management and our hands-on approach to working with our clients,” said
“As we move through the year, we remain focused on expanding client relationships through enhanced products, services and digital solutions and by delivering local and remarkable client service,” Schrider added.
First Quarter Highlights
- Total assets at
March 31, 2024 decreased by 1% to$13.9 billion compared to$14.0 billion atDecember 31, 2023 .
- Total loans remained level at
$11.4 billion as ofMarch 31, 2024 compared toDecember 31, 2023 . During the current quarter, we reduced our concentration in the investor commercial real estate segment by$106.5 million , while the AD&C portfolio increased$101.3 million . Total commercial business loans and lines and mortgage and consumer loan portfolios remained relatively unchanged during this period.
- Deposits increased
$230.7 million or 2% to$11.2 billion atMarch 31, 2024 compared to$11.0 billion atDecember 31, 2023 , as interest-bearing deposits increased$326.9 million , while noninterest-bearing deposits declined$96.2 million . Strong growth in the interest-bearing deposit categories was mainly experienced within savings accounts, which grew by$303.9 million compared to the linked quarter. Interest checking and money market accounts increased$64.5 million and$51.6 million , respectively, while time deposits decreased$93.0 million . The decline within noninterest-bearing deposit categories was driven by lower balances in commercial and small business checking accounts.
- The ratio of non-performing loans to total loans was 0.74% at
March 31, 2024 compared to 0.81% atDecember 31, 2023 and 0.41% atMarch 31, 2023 . The current quarter's reduction in non-performing loans was related to full payoffs of several non-accrual loans in combination with the movement of one investment commercial real estate loan from a non-accrual category to the other real estate owned. Net charge-offs for the current quarter totaled$1.1 million .
- Total borrowings declined
$353.4 million atMarch 31, 2024 compared to the previous quarter, due to the full payoff of$300.0 million in outstanding borrowings through theFederal Reserve Bank's Bank Term Funding Program and a$50.0 million reduction in FHLB advances.
- Net interest income for the first quarter of 2024 declined
$2.4 million or 3% compared to the previous quarter and$18.0 million or 18% compared to the first quarter of 2023. Compared to the previous quarter, the$0.4 million growth in interest income for the current quarter was more than offset by the$2.7 million increase in interest expense.
- The net interest margin was 2.41% for the first quarter of 2024 compared to 2.45% for the fourth quarter of 2023 and 2.99% for the first quarter of 2023. Overall, the rate of net interest margin contraction slowed down during the current quarter and we experienced a margin increase during the last month of the current quarter. Compared to the linked quarter, the rate paid on interest-bearing liabilities rose 10 basis points, while the yield on interest-earning assets increased 9 basis points.
- Provision for credit losses directly attributable to the funded loan portfolio was
$3.3 million for the current quarter compared to a credit of$2.6 million in the previous quarter and a credit of$18.9 million in the prior year quarter. The increase in the provision during the current quarter was attributable to the adjustments of risk factors applied to specific industries within the commercial real estate segment, partially offset by lower individual reserves, the result of several payoffs of non-accrual loans, and the reduced probability of an economic recession. In addition, during the current quarter, the reserve for unfunded commitments decreased by$0.9 million , a result of higher utilization rates on lines of credit.
- Non-interest income for the first quarter of 2024 increased by 11% or
$1.8 million compared to the linked quarter and grew by 15% or$2.4 million compared to the prior year quarter. The quarter-over-quarter increase was mainly driven by higher wealth management income, due to a 3% increase in assets under management and the overall favorable market performance, along with higher income from mortgage banking activities and other income, generated by increased credit-related fees.
- Non-interest expense for the first quarter of 2024 increased
$0.9 million or 1% compared to the fourth quarter of 2023 and$1.7 million or 3% compared to the prior year quarter. The quarterly increase in non-interest expense was primarily due to higher salaries and benefits as more employees were subject to employer-related payroll taxes during the current quarter as compared to the linked quarter, partially offset by lower professional fees and lower marketing expense.
- Return on average assets (“ROA”) for the quarter ended
March 31, 2024 was 0.58% and return on average tangible common equity (“ROTCE”) was 7.39% compared to 0.73% and 9.26%, respectively, for the fourth quarter of 2023 and 1.49% and 19.10%, respectively, for the first quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.63% and core ROTCE was 7.39% compared to 0.76% and 9.26%, respectively, for the previous quarter and 1.52% and 19.11%, respectively, for the first quarter of 2023.
- The GAAP efficiency ratio was 69.60% for the first quarter of 2024, compared to 68.33% for the fourth quarter of 2023 and 58.55% for the first quarter of 2023. The non-GAAP efficiency ratio was 66.73% for the first quarter of 2024 compared to 66.16% for the fourth quarter of 2023 and 56.87% for the prior year quarter. The increase in non-GAAP efficiency ratio (reflecting a decrease in efficiency) in the current quarter compared to the previous quarter and the first quarter of the prior year was the result of declines in net revenue from the prior periods coupled with the growth in non-interest expense.
Balance Sheet and Credit Quality
Total assets were
Deposits increased
Total borrowings declined by
The tangible common equity ratio increased to 8.86% of tangible assets at
At
Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. At
At
Income Statement Review
Quarterly Results
Net income was
Net interest income for the first quarter of 2024 decreased
The net interest margin was 2.41% for the first quarter of 2024 compared to 2.45% for the fourth quarter of 2023 and 2.99% for the first quarter of 2023. The contraction of the net interest margin slowed down during the current quarter as the rate paid on interest-bearing liabilities rose 10 basis points, while the yield on interest-earning assets increased 9 basis points. The rate and yield increases year-over-year were driven by the several federal funds rate increases that occurred over the preceding twelve months, competition for deposits in the market, and customer movement of excess funds out of noninterest-bearing accounts into higher yielding products. As compared to the prior year quarter, the yield on interest-earning assets increased 38 basis points while the rate paid on interest-bearing liabilities rose 115 basis points, resulting in net interest margin compression of 58 basis points. With respect to the current quarter, margin compression began to reverse itself as the net interest income and net interest margin increased during the last month of the current quarter.
The total provision for credit losses was
Non-interest income for the first quarter of 2024 increased by 11% or
Non-interest expense for the first quarter of 2024 increased
For the first quarter of 2024, the GAAP efficiency ratio was 69.60% compared to 68.33% for the fourth quarter of 2023 and 58.55% for the first quarter of 2023. The GAAP efficiency ratio rose from the prior year quarter primarily as a result of the 14% decrease in GAAP revenue in combination with the 3% increase in GAAP non-interest expense. The non-GAAP efficiency ratio was 66.73% for the current quarter as compared to 66.16% for the fourth quarter of 2023 and 56.87% for the first quarter of 2023. The increase in the non-GAAP efficiency ratio (reflecting a decrease in efficiency) from the first quarter of the prior year to the current year quarter was primarily the result of the 13% decline in non-GAAP revenue, while non-GAAP expenses increased 1%.
ROA for the quarter ended
Explanation of Non-GAAP Financial Measures
This news release contains financial information and performance measures determined by methods other than in accordance with generally accepted accounting principles in
- Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
- The non-GAAP efficiency ratio excludes amortization of intangible assets, investment securities gains/(losses), contingent payment expense, and includes tax-equivalent income.
- Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items, on a net of tax basis.
- Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.
These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the non-GAAP Reconciliation tables included with this release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.
Conference Call
The Company’s management will host a conference call to discuss its first quarter results today at
About
Category: Webcast
Source:
Code: SASR-E
For additional information or questions, please contact:
1-800-399-5919
Email: DSchrider@sandyspringbank.com
PMantua@sandyspringbank.com
Website: www.sandyspringbank.com
Media Contact:
301-570-8331
jschell@sandyspringbank.com
Forward-Looking Statements
Sandy Spring Bancorp’s forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of
FINANCIAL HIGHLIGHTS - UNAUDITED
Three Months Ended | |||||||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | % Change | ||||||||
Results of operations: | |||||||||||
Net interest income | $ | 79,343 | $ | 97,302 | (18 | )% | |||||
Provision/ (credit) for credit losses | 2,388 | (21,536 | ) | N/M | |||||||
Non-interest income | 18,367 | 15,951 | 15 | ||||||||
Non-interest expense | 68,006 | 66,305 | 3 | ||||||||
Income before income tax expense | 27,316 | 68,484 | (60 | ) | |||||||
Net income | 20,372 | 51,253 | (60 | ) | |||||||
Net income attributable to common shareholders | $ | 20,346 | $ | 51,084 | (60 | ) | |||||
Pre-tax pre-provision net income (1) | $ | 29,704 | $ | 46,948 | (37 | ) | |||||
Return on average assets | 0.58 | % | 1.49 | % | |||||||
Return on average common equity | 5.17 | % | 13.93 | % | |||||||
Return on average tangible common equity (1) | 7.39 | % | 19.10 | % | |||||||
Net interest margin | 2.41 | % | 2.99 | % | |||||||
Efficiency ratio - GAAP basis (2) | 69.60 | % | 58.55 | % | |||||||
Efficiency ratio - Non-GAAP basis (2) | 66.73 | % | 56.87 | % | |||||||
Per share data: | |||||||||||
Basic net income per common share | $ | 0.45 | $ | 1.14 | (61 | )% | |||||
Diluted net income per common share | $ | 0.45 | $ | 1.14 | (60 | ) | |||||
Weighted average diluted common shares | 45,086,471 | 44,872,582 | — | ||||||||
Dividends declared per share | $ | 0.34 | $ | 0.34 | — | ||||||
Book value per common share | $ | 35.37 | $ | 34.37 | 3 | ||||||
Tangible book value per common share (1) | $ | 26.61 | $ | 25.83 | 3 | ||||||
Outstanding common shares | 44,940,147 | 44,712,497 | 1 | ||||||||
Financial condition at period-end: | |||||||||||
Investment securities | $ | 1,405,490 | $ | 1,528,336 | (8 | )% | |||||
Loans | 11,364,284 | 11,395,241 | — | ||||||||
Assets | 13,888,133 | 14,129,007 | (2 | ) | |||||||
Deposits | 11,227,200 | 11,075,991 | 1 | ||||||||
Stockholders' equity | 1,589,364 | 1,536,865 | 3 | ||||||||
Capital ratios: | |||||||||||
Tier 1 leverage (3) | 9.56 | % | 9.44 | % | |||||||
Common equity tier 1 capital to risk-weighted assets (3) | 10.96 | % | 10.53 | % | |||||||
Tier 1 capital to risk-weighted assets (3) | 10.96 | % | 10.53 | % | |||||||
Total regulatory capital to risk-weighted assets (3) | 15.05 | % | 14.43 | % | |||||||
Tangible common equity to tangible assets (4) | 8.86 | % | 8.40 | % | |||||||
Average equity to average assets | 11.27 | % | 10.70 | % | |||||||
Credit quality ratios: | |||||||||||
Allowance for credit losses to loans | 1.08 | % | 1.03 | % | |||||||
Non-performing loans to total loans | 0.74 | % | 0.41 | % | |||||||
Non-performing assets to total assets | 0.63 | % | 0.34 | % | |||||||
Allowance for credit losses to non-performing loans | 145.78 | % | 248.93 | % | |||||||
Annualized net charge-offs/ (recoveries) to average loans (5) | 0.04 | % | (0.01 | )% |
N/M - not meaningful | |
(1) | Represents a non-GAAP measure. |
(2) | The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, and contingent payment expense from non-interest expense; and investment securities gains/ (losses) from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights. |
(3) | Estimated ratio at |
(4) | The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders' equity after deducting goodwill and other intangible assets. See the Reconciliation Table included with these Financial Highlights. |
(5) | Calculation utilizes average loans, excluding residential mortgage loans held-for-sale. |
RECONCILIATION TABLE - UNAUDITED (CONTINUED)
OPERATING EARNINGS - METRICS
Three Months Ended | ||||||||
(Dollars in thousands) | 2024 | 2023 | ||||||
Core earnings (non-GAAP): | ||||||||
Net income (GAAP) | $ | 20,372 | $ | 51,253 | ||||
Plus/ (less) non-GAAP adjustments (net of tax)(1): | ||||||||
Amortization of intangible assets | 1,544 | 973 | ||||||
Investment securities gains/ losses | — | — | ||||||
Contingent payment expense | — | 27 | ||||||
Core earnings (Non-GAAP) | $ | 21,916 | $ | 52,253 | ||||
Core earnings per diluted common share (non-GAAP): | ||||||||
Weighted average common shares outstanding - diluted (GAAP) | 45,086,471 | 44,872,582 | ||||||
Earnings per diluted common share (GAAP) | $ | 0.45 | $ | 1.14 | ||||
Core earnings per diluted common share (non-GAAP) | $ | 0.49 | $ | 1.16 | ||||
Core return on average assets (non-GAAP): | ||||||||
Average assets (GAAP) | $ | 14,061,935 | $ | 13,949,276 | ||||
Return on average assets (GAAP) | 0.58 | % | 1.49 | % | ||||
Core return on average assets (non-GAAP) | 0.63 | % | 1.52 | % | ||||
Return/ Core return on average tangible common equity (non-GAAP): | ||||||||
Net Income (GAAP) | $ | 20,372 | $ | 51,253 | ||||
Plus: Amortization of intangible assets (net of tax) | 1,544 | 973 | ||||||
Net income before amortization of intangible assets | $ | 21,916 | $ | 52,226 | ||||
Average total stockholders' equity (GAAP) | $ | 1,584,902 | $ | 1,491,929 | ||||
Average goodwill | (363,436 | ) | (363,436 | ) | ||||
Average other intangible assets, net | (29,260 | ) | (19,380 | ) | ||||
Average tangible common equity (non-GAAP) | $ | 1,192,206 | $ | 1,109,113 | ||||
Return on average tangible common equity (non-GAAP) | 7.39 | % | 19.10 | % | ||||
Core return on average tangible common equity (non-GAAP) | 7.39 | % | 19.11 | % |
(1) | Tax adjustments have been determined using the combined marginal federal and state rate of 25.37% and 25.47% for 2024 and 2023, respectively. |
RECONCILIATION TABLE - UNAUDITED
Three Months Ended | ||||||||
(Dollars in thousands) | 2024 | 2023 | ||||||
Pre-tax pre-provision net income: | ||||||||
Net income (GAAP) | $ | 20,372 | $ | 51,253 | ||||
Plus/ (less) non-GAAP adjustments: | ||||||||
Income tax expense | 6,944 | 17,231 | ||||||
Provision/ (credit) for credit losses | 2,388 | (21,536 | ) | |||||
Pre-tax pre-provision net income (non-GAAP) | $ | 29,704 | $ | 46,948 | ||||
Efficiency ratio (GAAP): | ||||||||
Non-interest expense | $ | 68,006 | $ | 66,305 | ||||
Net interest income plus non-interest income | $ | 97,710 | $ | 113,253 | ||||
Efficiency ratio (GAAP) | 69.60 | % | 58.55 | % | ||||
Efficiency ratio (Non-GAAP): | ||||||||
Non-interest expense | $ | 68,006 | $ | 66,305 | ||||
Less non-GAAP adjustments: | ||||||||
Amortization of intangible assets | 2,069 | 1,306 | ||||||
Contingent payment expense | — | 36 | ||||||
Non-interest expense - as adjusted | $ | 65,937 | $ | 64,963 | ||||
Net interest income plus non-interest income | $ | 97,710 | $ | 113,253 | ||||
Plus non-GAAP adjustment: | ||||||||
Tax-equivalent income | 1,099 | 970 | ||||||
Less/ (plus) non-GAAP adjustment: | ||||||||
Investment securities gains/ (losses) | — | — | ||||||
Net interest income plus non-interest income - as adjusted | $ | 98,809 | $ | 114,223 | ||||
Efficiency ratio (Non-GAAP) | 66.73 | % | 56.87 | % | ||||
Tangible common equity ratio: | ||||||||
Total stockholders' equity | $ | 1,589,364 | $ | 1,536,865 | ||||
(363,436 | ) | (363,436 | ) | |||||
Other intangible assets, net | (29,864 | ) | (18,549 | ) | ||||
Tangible common equity | $ | 1,196,064 | $ | 1,154,880 | ||||
Total assets | $ | 13,888,133 | $ | 14,129,007 | ||||
(363,436 | ) | (363,436 | ) | |||||
Other intangible assets, net | (29,864 | ) | (18,549 | ) | ||||
Tangible assets | $ | 13,494,833 | $ | 13,747,022 | ||||
Tangible common equity ratio | 8.86 | % | 8.40 | % | ||||
Outstanding common shares | 44,940,147 | 44,712,497 | ||||||
Tangible book value per common share | $ | 26.61 | $ | 25.83 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
(Dollars in thousands) | 2024 | 2023 | ||||||
Assets | ||||||||
Cash and due from banks | $ | 79,305 | $ | 82,257 | ||||
Federal funds sold | 243 | 245 | ||||||
Interest-bearing deposits with banks | 330,842 | 463,396 | ||||||
Cash and cash equivalents | 410,390 | 545,898 | ||||||
Residential mortgage loans held for sale (at fair value) | 16,627 | 10,836 | ||||||
Investments held-to-maturity (fair values of | 231,354 | 236,165 | ||||||
Investments available-for-sale (at fair value) | 1,100,741 | 1,102,681 | ||||||
Other investments, at cost | 73,395 | 75,607 | ||||||
Total loans | 11,364,284 | 11,366,989 | ||||||
Less: allowance for credit losses - loans | (123,096 | ) | (120,865 | ) | ||||
Net loans | 11,241,188 | 11,246,124 | ||||||
Premises and equipment, net | 59,843 | 59,490 | ||||||
Other real estate owned | 2,700 | — | ||||||
Accrued interest receivable | 47,152 | 46,583 | ||||||
363,436 | 363,436 | |||||||
Other intangible assets, net | 29,864 | 28,301 | ||||||
Other assets | 311,443 | 313,051 | ||||||
Total assets | $ | 13,888,133 | $ | 14,028,172 | ||||
Liabilities | ||||||||
Noninterest-bearing deposits | $ | 2,817,928 | $ | 2,914,161 | ||||
Interest-bearing deposits | 8,409,272 | 8,082,377 | ||||||
Total deposits | 11,227,200 | 10,996,538 | ||||||
Securities sold under retail repurchase agreements | 71,529 | 75,032 | ||||||
Federal funds purchased | — | — | ||||||
— | 300,000 | |||||||
Advances from FHLB | 500,000 | 550,000 | ||||||
Subordinated debt | 370,952 | 370,803 | ||||||
Total borrowings | 942,481 | 1,295,835 | ||||||
Accrued interest payable and other liabilities | 129,088 | 147,657 | ||||||
Total liabilities | 12,298,769 | 12,440,030 | ||||||
Stockholders' equity | ||||||||
Common stock -- par value | 44,940 | 44,914 | ||||||
Additional paid in capital | 743,850 | 742,243 | ||||||
Retained earnings | 903,377 | 898,316 | ||||||
Accumulated other comprehensive loss | (102,803 | ) | (97,331 | ) | ||||
Total stockholders' equity | 1,589,364 | 1,588,142 | ||||||
Total liabilities and stockholders' equity | $ | 13,888,133 | $ | 14,028,172 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months Ended | |||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | |||||
Interest income: | |||||||
Interest and fees on loans | $ | 150,635 | $ | 139,727 | |||
Interest on loans held for sale | 128 | 152 | |||||
Interest on deposits with banks | 6,786 | 2,686 | |||||
Interest and dividend income on investment securities: | |||||||
Taxable | 6,663 | 7,008 | |||||
Tax-advantaged | 1,797 | 1,770 | |||||
Interest on federal funds sold | 5 | 4 | |||||
Total interest income | 166,014 | 151,347 | |||||
Interest expense: | |||||||
Interest on deposits | 73,366 | 40,788 | |||||
Interest on retail repurchase agreements and federal funds purchased | 3,386 | 2,104 | |||||
Interest on advances from FHLB | 5,973 | 7,207 | |||||
Interest on subordinated debt | 3,946 | 3,946 | |||||
Total interest expense | 86,671 | 54,045 | |||||
Net interest income | 79,343 | 97,302 | |||||
Provision/ (credit) for credit losses | 2,388 | (21,536 | ) | ||||
Net interest income after provision/ (credit) for credit losses | 76,955 | 118,838 | |||||
Non-interest income: | |||||||
Investment securities gains/ (losses) | — | — | |||||
Service charges on deposit accounts | 2,817 | 2,388 | |||||
Mortgage banking activities | 1,374 | 1,245 | |||||
Wealth management income | 9,958 | 8,992 | |||||
Income from bank owned life insurance | 1,160 | 907 | |||||
Bank card fees | 413 | 418 | |||||
Other income | 2,645 | 2,001 | |||||
Total non-interest income | 18,367 | 15,951 | |||||
Non-interest expense: | |||||||
Salaries and employee benefits | 36,698 | 38,926 | |||||
Occupancy expense of premises | 4,816 | 4,847 | |||||
Equipment expenses | 3,963 | 4,117 | |||||
Marketing | 742 | 1,543 | |||||
Outside data services | 3,103 | 2,514 | |||||
2,911 | 2,138 | ||||||
Amortization of intangible assets | 2,069 | 1,306 | |||||
Professional fees and services | 4,880 | 3,684 | |||||
Other expenses | 8,824 | 7,230 | |||||
Total non-interest expense | 68,006 | 66,305 | |||||
Income before income tax expense | 27,316 | 68,484 | |||||
Income tax expense | 6,944 | 17,231 | |||||
Net income | $ | 20,372 | $ | 51,253 | |||
Net income per share amounts: | |||||||
Basic net income per common share | $ | 0.45 | $ | 1.14 | |||
Diluted net income per common share | $ | 0.45 | $ | 1.14 | |||
Dividends declared per share | $ | 0.34 | $ | 0.34 | |||
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2024 | 2023 | |||||||||||||||||||
(Dollars in thousands, except per share data) | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||
Profitability for the quarter: | ||||||||||||||||||||
Tax-equivalent interest income | $ | 167,113 | $ | 166,729 | $ | 163,479 | $ | 159,156 | $ | 152,317 | ||||||||||
Interest expense | 86,671 | 83,920 | 77,330 | 67,679 | 54,045 | |||||||||||||||
Tax-equivalent net interest income | 80,442 | 82,809 | 86,149 | 91,477 | 98,272 | |||||||||||||||
Tax-equivalent adjustment | 1,099 | 1,113 | 1,068 | 1,006 | 970 | |||||||||||||||
Provision/ (credit) for credit losses | 2,388 | (3,445 | ) | 2,365 | 5,055 | (21,536 | ) | |||||||||||||
Non-interest income | 18,367 | 16,560 | 17,391 | 17,176 | 15,951 | |||||||||||||||
Non-interest expense | 68,006 | 67,142 | 72,471 | 69,136 | 66,305 | |||||||||||||||
Income before income tax expense | 27,316 | 34,559 | 27,636 | 33,456 | 68,484 | |||||||||||||||
Income tax expense | 6,944 | 8,459 | 6,890 | 8,711 | 17,231 | |||||||||||||||
Net income | $ | 20,372 | $ | 26,100 | $ | 20,746 | $ | 24,745 | $ | 51,253 | ||||||||||
GAAP financial performance: | ||||||||||||||||||||
Return on average assets | 0.58 | % | 0.73 | % | 0.58 | % | 0.70 | % | 1.49 | % | ||||||||||
Return on average common equity | 5.17 | % | 6.70 | % | 5.35 | % | 6.46 | % | 13.93 | % | ||||||||||
Return on average tangible common equity | 7.39 | % | 9.26 | % | 7.42 | % | 8.93 | % | 19.10 | % | ||||||||||
Net interest margin | 2.41 | % | 2.45 | % | 2.55 | % | 2.73 | % | 2.99 | % | ||||||||||
Efficiency ratio - GAAP basis | 69.60 | % | 68.33 | % | 70.72 | % | 64.22 | % | 58.55 | % | ||||||||||
Non-GAAP financial performance: | ||||||||||||||||||||
Pre-tax pre-provision net income | $ | 29,704 | $ | 31,114 | $ | 30,001 | $ | 38,511 | $ | 46,948 | ||||||||||
Core after-tax earnings | $ | 21,916 | $ | 27,147 | $ | 27,766 | $ | 27,136 | $ | 52,253 | ||||||||||
Core return on average assets | 0.63 | % | 0.76 | % | 0.78 | % | 0.77 | % | 1.52 | % | ||||||||||
Core return on average common equity | 5.56 | % | 6.97 | % | 7.16 | % | 7.09 | % | 14.20 | % | ||||||||||
Core return on average tangible common equity | 7.39 | % | 9.26 | % | 9.51 | % | 9.43 | % | 19.11 | % | ||||||||||
Core earnings per diluted common share | $ | 0.49 | $ | 0.60 | $ | 0.62 | $ | 0.60 | $ | 1.16 | ||||||||||
Efficiency ratio - Non-GAAP basis | 66.73 | % | 66.16 | % | 60.91 | % | 60.68 | % | 56.87 | % | ||||||||||
Per share data: | ||||||||||||||||||||
Net income attributable to common shareholders | $ | 20,346 | $ | 26,066 | $ | 20,719 | $ | 24,712 | $ | 51,084 | ||||||||||
Basic net income per common share | $ | 0.45 | $ | 0.58 | $ | 0.46 | $ | 0.55 | $ | 1.14 | ||||||||||
Diluted net income per common share | $ | 0.45 | $ | 0.58 | $ | 0.46 | $ | 0.55 | $ | 1.14 | ||||||||||
Weighted average diluted common shares | 45,086,471 | 45,009,574 | 44,960,455 | 44,888,759 | 44,872,582 | |||||||||||||||
Dividends declared per share | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | ||||||||||
Non-interest income: | ||||||||||||||||||||
Securities gains/ (losses) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Service charges on deposit accounts | 2,817 | 2,749 | 2,704 | 2,606 | 2,388 | |||||||||||||||
Mortgage banking activities | 1,374 | 792 | 1,682 | 1,817 | 1,245 | |||||||||||||||
Wealth management income | 9,958 | 9,219 | 9,391 | 9,031 | 8,992 | |||||||||||||||
Income from bank owned life insurance | 1,160 | 1,207 | 845 | 1,251 | 907 | |||||||||||||||
Bank card fees | 413 | 454 | 450 | 447 | 418 | |||||||||||||||
Other income | 2,645 | 2,139 | 2,319 | 2,024 | 2,001 | |||||||||||||||
Total non-interest income | $ | 18,367 | $ | 16,560 | $ | 17,391 | $ | 17,176 | $ | 15,951 | ||||||||||
Non-interest expense: | ||||||||||||||||||||
Salaries and employee benefits | $ | 36,698 | $ | 35,482 | $ | 44,853 | $ | 40,931 | $ | 38,926 | ||||||||||
Occupancy expense of premises | 4,816 | 4,558 | 4,609 | 4,764 | 4,847 | |||||||||||||||
Equipment expenses | 3,963 | 3,987 | 3,811 | 3,760 | 4,117 | |||||||||||||||
Marketing | 742 | 1,242 | 729 | 1,589 | 1,543 | |||||||||||||||
Outside data services | 3,103 | 3,000 | 2,819 | 2,853 | 2,514 | |||||||||||||||
2,911 | 2,615 | 2,333 | 2,375 | 2,138 | ||||||||||||||||
Amortization of intangible assets | 2,069 | 1,403 | 1,245 | 1,269 | 1,306 | |||||||||||||||
Professional fees and services | 4,880 | 5,628 | 4,509 | 4,161 | 3,684 | |||||||||||||||
Other expenses | 8,824 | 9,227 | 7,563 | 7,434 | 7,230 | |||||||||||||||
Total non-interest expense | $ | 68,006 | $ | 67,142 | $ | 72,471 | $ | 69,136 | $ | 66,305 | ||||||||||
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2024 | 2023 | |||||||||||||||||||
(Dollars in thousands, except per share data) | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||
Balance sheets at quarter end: | ||||||||||||||||||||
Commercial investor real estate loans | $ | 4,997,879 | $ | 5,104,425 | $ | 5,137,694 | $ | 5,131,210 | $ | 5,167,456 | ||||||||||
Commercial owner-occupied real estate loans | 1,741,113 | 1,755,235 | 1,760,384 | 1,770,135 | 1,769,928 | |||||||||||||||
Commercial AD&C loans | 1,090,259 | 988,967 | 938,673 | 1,045,742 | 1,046,665 | |||||||||||||||
Commercial business loans | 1,509,592 | 1,504,880 | 1,454,709 | 1,423,614 | 1,437,478 | |||||||||||||||
Residential mortgage loans | 1,511,624 | 1,474,521 | 1,432,051 | 1,385,743 | 1,328,524 | |||||||||||||||
Residential construction loans | 97,685 | 121,419 | 160,345 | 190,690 | 223,456 | |||||||||||||||
Consumer loans | 416,132 | 417,542 | 416,436 | 422,505 | 421,734 | |||||||||||||||
Total loans | 11,364,284 | 11,366,989 | 11,300,292 | 11,369,639 | 11,395,241 | |||||||||||||||
Allowance for credit losses - loans | (123,096 | ) | (120,865 | ) | (123,360 | ) | (120,287 | ) | (117,613 | ) | ||||||||||
Loans held for sale | 16,627 | 10,836 | 19,235 | 21,476 | 16,262 | |||||||||||||||
Investment securities | 1,405,490 | 1,414,453 | 1,392,078 | 1,463,554 | 1,528,336 | |||||||||||||||
Total assets | 13,888,133 | 14,028,172 | 14,135,085 | 13,994,545 | 14,129,007 | |||||||||||||||
Noninterest-bearing demand deposits | 2,817,928 | 2,914,161 | 3,013,905 | 3,079,896 | 3,228,678 | |||||||||||||||
Total deposits | 11,227,200 | 10,996,538 | 11,151,012 | 10,958,922 | 11,075,991 | |||||||||||||||
Customer repurchase agreements | 71,529 | 75,032 | 66,581 | 74,510 | 47,627 | |||||||||||||||
Total stockholders' equity | 1,589,364 | 1,588,142 | 1,537,914 | 1,539,032 | 1,536,865 | |||||||||||||||
Quarterly average balance sheets: | ||||||||||||||||||||
Commercial investor real estate loans | $ | 5,057,334 | $ | 5,125,028 | $ | 5,125,459 | $ | 5,146,632 | $ | 5,136,204 | ||||||||||
Commercial owner-occupied real estate loans | 1,746,042 | 1,755,048 | 1,769,717 | 1,773,039 | 1,769,680 | |||||||||||||||
Commercial AD&C loans | 1,030,763 | 960,646 | 995,682 | 1,057,205 | 1,082,791 | |||||||||||||||
Commercial business loans | 1,508,336 | 1,433,035 | 1,442,518 | 1,441,489 | 1,444,588 | |||||||||||||||
Residential mortgage loans | 1,491,277 | 1,451,614 | 1,406,929 | 1,353,809 | 1,307,761 | |||||||||||||||
Residential construction loans | 110,456 | 142,325 | 174,204 | 211,590 | 223,313 | |||||||||||||||
Consumer loans | 417,539 | 419,299 | 421,189 | 423,306 | 424,122 | |||||||||||||||
Total loans | 11,361,747 | 11,286,995 | 11,335,698 | 11,407,070 | 11,388,459 | |||||||||||||||
Loans held for sale | 8,142 | 10,132 | 13,714 | 17,480 | 8,324 | |||||||||||||||
Investment securities | 1,536,127 | 1,544,173 | 1,589,342 | 1,639,324 | 1,679,593 | |||||||||||||||
Interest-earning assets | 13,411,810 | 13,462,583 | 13,444,117 | 13,423,589 | 13,316,165 | |||||||||||||||
Total assets | 14,061,935 | 14,090,423 | 14,086,342 | 14,094,653 | 13,949,276 | |||||||||||||||
Noninterest-bearing demand deposits | 2,730,295 | 2,958,254 | 3,041,101 | 3,137,971 | 3,480,433 | |||||||||||||||
Total deposits | 11,086,145 | 11,089,587 | 11,076,724 | 10,928,038 | 11,049,991 | |||||||||||||||
Customer repurchase agreements | 72,836 | 66,622 | 67,298 | 58,382 | 60,626 | |||||||||||||||
Total interest-bearing liabilities | 9,583,074 | 9,418,666 | 9,332,617 | 9,257,652 | 8,806,720 | |||||||||||||||
Total stockholders' equity | 1,584,902 | 1,546,312 | 1,538,553 | 1,535,465 | 1,491,929 | |||||||||||||||
Financial measures: | ||||||||||||||||||||
Average equity to average assets | 11.27 | % | 10.97 | % | 10.92 | % | 10.89 | % | 10.70 | % | ||||||||||
Average investment securities to average earning assets | 11.45 | % | 11.47 | % | 11.82 | % | 12.21 | % | 12.61 | % | ||||||||||
Average loans to average earning assets | 84.71 | % | 83.84 | % | 84.32 | % | 84.98 | % | 85.52 | % | ||||||||||
Loans to assets | 81.83 | % | 81.03 | % | 79.94 | % | 81.24 | % | 80.65 | % | ||||||||||
Loans to deposits | 101.22 | % | 103.37 | % | 101.34 | % | 103.75 | % | 102.88 | % | ||||||||||
Assets under management | $ | 6,165,509 | $ | 5,999,520 | $ | 5,536,499 | $ | 5,742,888 | $ | 5,477,560 | ||||||||||
Capital measures: | ||||||||||||||||||||
Tier 1 leverage (1) | 9.56 | % | 9.51 | % | 9.50 | % | 9.42 | % | 9.44 | % | ||||||||||
Common equity tier 1 capital to risk-weighted assets (1) | 10.96 | % | 10.90 | % | 10.83 | % | 10.65 | % | 10.53 | % | ||||||||||
Tier 1 capital to risk-weighted assets (1) | 10.96 | % | 10.90 | % | 10.83 | % | 10.65 | % | 10.53 | % | ||||||||||
Total regulatory capital to risk-weighted assets (1) | 15.05 | % | 14.92 | % | 14.85 | % | 14.60 | % | 14.43 | % | ||||||||||
Book value per common share | $ | 35.37 | $ | 35.36 | $ | 34.26 | $ | 34.31 | $ | 34.37 | ||||||||||
Outstanding common shares | 44,940,147 | 44,913,561 | 44,895,158 | 44,862,369 | 44,712,497 |
(1) | Estimated ratio at |
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
2024 | 2023 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||
Non-performing assets: | |||||||||||||||
Loans 90 days past due: | |||||||||||||||
Commercial real estate: | |||||||||||||||
Commercial investor real estate | $ | — | $ | — | $ | — | $ | — | $ | 215 | |||||
Commercial owner-occupied real estate | — | — | — | — | — | ||||||||||
Commercial AD&C | — | — | — | — | — | ||||||||||
Commercial business | 20 | 20 | 415 | 29 | 3,002 | ||||||||||
Residential real estate: | |||||||||||||||
Residential mortgage | 340 | 342 | — | 692 | 352 | ||||||||||
Residential construction | — | — | — | — | — | ||||||||||
Consumer | — | — | — | — | — | ||||||||||
Total loans 90 days past due | 360 | 362 | 415 | 721 | 3,569 | ||||||||||
Non-accrual loans: | |||||||||||||||
Commercial real estate: | |||||||||||||||
Commercial investor real estate | 55,579 | 58,658 | 20,108 | 20,381 | 15,451 | ||||||||||
Commercial owner-occupied real estate | 4,394 | 4,640 | 4,744 | 4,846 | 4,949 | ||||||||||
Commercial AD&C | 556 | 1,259 | 1,422 | 569 | — | ||||||||||
Commercial business | 7,164 | 10,051 | 9,671 | 9,393 | 9,443 | ||||||||||
Residential real estate: | |||||||||||||||
Residential mortgage | 11,835 | 12,332 | 10,766 | 10,153 | 8,935 | ||||||||||
Residential construction | 542 | 443 | 449 | — | — | ||||||||||
Consumer | 4,011 | 4,102 | 4,187 | 3,396 | 4,900 | ||||||||||
Total non-accrual loans | 84,081 | 91,485 | 51,347 | 48,738 | 43,678 | ||||||||||
Total non-performing loans | 84,441 | 91,847 | 51,762 | 49,459 | 47,247 | ||||||||||
Other real estate owned (OREO) | 2,700 | — | 261 | 611 | 645 | ||||||||||
Total non-performing assets | $ | 87,141 | $ | 91,847 | $ | 52,023 | $ | 50,070 | $ | 47,892 | |||||
For the Quarter Ended, | ||||||||||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
Analysis of non-accrual loan activity: | ||||||||||||||||||||
Balance at beginning of period | $ | 91,485 | $ | 51,347 | $ | 48,738 | $ | 43,678 | $ | 34,782 | ||||||||||
Non-accrual balances transferred to OREO | (2,700 | ) | — | — | — | — | ||||||||||||||
Non-accrual balances charged-off | (1,550 | ) | — | (183 | ) | (2,049 | ) | (126 | ) | |||||||||||
Net payments or draws | (4,017 | ) | (7,619 | ) | (1,545 | ) | (1,654 | ) | (10,212 | ) | ||||||||||
Loans placed on non-accrual | 1,490 | 47,920 | 4,967 | 9,276 | 19,714 | |||||||||||||||
Non-accrual loans brought current | (627 | ) | (163 | ) | (630 | ) | (513 | ) | (480 | ) | ||||||||||
Balance at end of period | $ | 84,081 | $ | 91,485 | $ | 51,347 | $ | 48,738 | $ | 43,678 | ||||||||||
Analysis of allowance for credit losses - loans: | ||||||||||||||||||||
Balance at beginning of period | $ | 120,865 | $ | 123,360 | $ | 120,287 | $ | 117,613 | $ | 136,242 | ||||||||||
Provision/ (credit) for credit losses - loans | 3,331 | (2,574 | ) | 3,171 | 4,454 | (18,945 | ) | |||||||||||||
Less loans charged-off, net of recoveries: | ||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||
Commercial investor real estate | (2 | ) | (3 | ) | (3 | ) | (14 | ) | (5 | ) | ||||||||||
Commercial owner-occupied real estate | (27 | ) | (27 | ) | (25 | ) | (27 | ) | (26 | ) | ||||||||||
Commercial AD&C | (283 | ) | — | — | — | — | ||||||||||||||
Commercial business | 1,550 | (105 | ) | 15 | 363 | (127 | ) | |||||||||||||
Residential real estate: | ||||||||||||||||||||
Residential mortgage | (6 | ) | (6 | ) | (4 | ) | 35 | 21 | ||||||||||||
Residential construction | — | — | — | — | — | |||||||||||||||
Consumer | (132 | ) | 62 | 115 | 1,423 | (179 | ) | |||||||||||||
Net charge-offs/ (recoveries) | 1,100 | (79 | ) | 98 | 1,780 | (316 | ) | |||||||||||||
Balance at the end of period | $ | 123,096 | $ | 120,865 | $ | 123,360 | $ | 120,287 | $ | 117,613 | ||||||||||
Asset quality ratios: | ||||||||||||||||||||
Non-performing loans to total loans | 0.74 | % | 0.81 | % | 0.46 | % | 0.44 | % | 0.41 | % | ||||||||||
Non-performing assets to total assets | 0.63 | % | 0.65 | % | 0.37 | % | 0.36 | % | 0.34 | % | ||||||||||
Allowance for credit losses to loans | 1.08 | % | 1.06 | % | 1.09 | % | 1.06 | % | 1.03 | % | ||||||||||
Allowance for credit losses to non-performing loans | 145.78 | % | 131.59 | % | 238.32 | % | 243.21 | % | 248.93 | % | ||||||||||
Annualized net charge-offs/ (recoveries) to average loans | 0.04 | % | — | % | — | % | 0.06 | % | (0.01 | )% | ||||||||||
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
Three Months Ended | ||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
(Dollars in thousands and tax-equivalent) | Average Balances | Interest (1) | Annualized Average Yield/Rate | Average Balances | Interest (1) | Annualized Average Yield/Rate | ||||||||||||||
Assets | ||||||||||||||||||||
Commercial investor real estate loans | $ | 5,057,334 | $ | 59,642 | 4.74 | % | $ | 5,136,204 | $ | 57,801 | 4.56 | % | ||||||||
Commercial owner-occupied real estate loans | 1,746,042 | 20,718 | 4.77 | 1,769,680 | 19,598 | 4.49 | ||||||||||||||
Commercial AD&C loans | 1,030,763 | 21,253 | 8.29 | 1,082,791 | 19,839 | 7.43 | ||||||||||||||
Commercial business loans | 1,508,336 | 26,061 | 6.95 | 1,444,588 | 22,200 | 6.23 | ||||||||||||||
Total commercial loans | 9,342,475 | 127,674 | 5.50 | 9,433,263 | 119,438 | 5.13 | ||||||||||||||
Residential mortgage loans | 1,491,277 | 13,805 | 3.70 | 1,307,761 | 11,418 | 3.49 | ||||||||||||||
Residential construction loans | 110,456 | 1,256 | 4.57 | 223,313 | 1,814 | 3.29 | ||||||||||||||
Consumer loans | 417,539 | 8,541 | 8.23 | 424,122 | 7,587 | 7.25 | ||||||||||||||
Total residential and consumer loans | 2,019,272 | 23,602 | 4.69 | 1,955,196 | 20,819 | 4.29 | ||||||||||||||
Total loans (2) | 11,361,747 | 151,276 | 5.35 | 11,388,459 | 140,257 | 4.99 | ||||||||||||||
Loans held for sale | 8,142 | 128 | 6.29 | 8,324 | 152 | 7.29 | ||||||||||||||
Taxable securities | 1,188,446 | 6,663 | 2.24 | 1,297,769 | 7,008 | 2.16 | ||||||||||||||
Tax-advantaged securities | 347,681 | 2,255 | 2.60 | 381,824 | 2,210 | 2.32 | ||||||||||||||
Total investment securities (3) | 1,536,127 | 8,918 | 2.32 | 1,679,593 | 9,218 | 2.20 | ||||||||||||||
Interest-bearing deposits with banks | 505,461 | 6,786 | 5.40 | 239,459 | 2,686 | 4.55 | ||||||||||||||
Federal funds sold | 333 | 5 | 5.50 | 330 | 4 | 4.69 | ||||||||||||||
Total interest-earning assets | 13,411,810 | 167,113 | 5.01 | 13,316,165 | 152,317 | 4.63 | ||||||||||||||
Less: allowance for credit losses - loans | (119,487 | ) | (136,899 | ) | ||||||||||||||||
Cash and due from banks | 82,667 | 95,057 | ||||||||||||||||||
Premises and equipment, net | 59,776 | 67,696 | ||||||||||||||||||
Other assets | 627,169 | 607,257 | ||||||||||||||||||
Total assets | $ | 14,061,935 | $ | 13,949,276 | ||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,476,961 | $ | 5,901 | 1.61 | % | $ | 1,381,858 | $ | 2,630 | 0.77 | % | ||||||||
Regular savings deposits | 1,444,713 | 12,880 | 3.59 | 505,364 | 363 | 0.29 | ||||||||||||||
Money market savings deposits | 2,731,291 | 24,646 | 3.63 | 3,299,794 | 21,338 | 2.62 | ||||||||||||||
Time deposits | 2,702,885 | 29,939 | 4.45 | 2,382,542 | 16,457 | 2.80 | ||||||||||||||
Total interest-bearing deposits | 8,355,850 | 73,366 | 3.53 | 7,569,558 | 40,788 | 2.19 | ||||||||||||||
Repurchase agreements | 72,836 | 394 | 2.17 | 60,626 | 21 | 0.14 | ||||||||||||||
Federal funds purchased and | 237,373 | 2,992 | 5.07 | 171,222 | 2,083 | 4.93 | ||||||||||||||
Advances from FHLB | 546,154 | 5,973 | 4.40 | 635,056 | 7,207 | 4.60 | ||||||||||||||
Subordinated debt | 370,861 | 3,946 | 4.26 | 370,258 | 3,946 | 4.26 | ||||||||||||||
Total borrowings | 1,227,224 | 13,305 | 4.36 | 1,237,162 | 13,257 | 4.35 | ||||||||||||||
Total interest-bearing liabilities | 9,583,074 | 86,671 | 3.64 | 8,806,720 | 54,045 | 2.49 | ||||||||||||||
Noninterest-bearing demand deposits | 2,730,295 | 3,480,433 | ||||||||||||||||||
Other liabilities | 163,664 | 170,194 | ||||||||||||||||||
Stockholders' equity | 1,584,902 | 1,491,929 | ||||||||||||||||||
Total liabilities and stockholders' equity | $ | 14,061,935 | $ | 13,949,276 | ||||||||||||||||
Tax-equivalent net interest income and spread | $ | 80,442 | 1.37 | % | $ | 98,272 | 2.14 | % | ||||||||||||
Less: tax-equivalent adjustment | 1,099 | 970 | ||||||||||||||||||
Net interest income | $ | 79,343 | $ | 97,302 | ||||||||||||||||
Interest income/earning assets | 5.01 | % | 4.63 | % | ||||||||||||||||
Interest expense/earning assets | 2.60 | 1.64 | ||||||||||||||||||
Net interest margin | 2.41 | % | 2.99 | % |
(1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.37% and 25.47% for 2024 and 2023, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to |
(2) | Non-accrual loans are included in the average balances. |
(3) | Available-for-sale investments are presented at amortized cost. |
Source:
2024 GlobeNewswire, Inc., source