IRVINE, Calif.--(BUSINESS WIRE)--Opus Bank ("Opus") (NASDAQ: “OPB”) announced today net income of $17.5 million, or $0.52 per diluted share, for the second quarter of 2015 compared with $11.1 million, or $0.34 per diluted share, for the first quarter of 2015 and $10.3 million, or $0.32 per diluted share, for the second quarter of 2014. Net income increased by 21% to $28.6 million for the six months ended June 30, 2015 from $23.5 million for the six months ended June 30, 2014. Total assets increased to a record $5.8 billion at June 30, 2015, driven by 35% loan growth and 46% deposit growth year over year. Additionally, Opus announced that its Board of Directors approved increasing its quarterly cash dividend by 43% to $0.10 per share payable on August 20, 2015 to common and preferred shareholders of record as of August 6, 2015.
Quarter and Year to Date 2015 Highlights
- Total revenues increased 30% to $63.1 million for the second quarter of 2015 compared to $48.5 million for the first quarter of 2015 and increased 51.7% compared to $41.6 million for the second quarter of 2014. Total revenues increased 34% to $111.5 million for the six months ended June 30, 2015 from $83.3 million during the six months ended June 30, 2014.
- Net interest income increased 22% to $55.0 million for the second quarter of 2015 compared to $45.2 million for the first quarter of 2015 and increased 47% from $37.5 million for the second quarter of 2014. During the second quarter of 2015, interest income from our originated loan portfolio increased by $3.2 million, or 8%, from the first quarter of 2015 and by $14.3 million, or 49%, from the second quarter of 2014. Interest income from the acquired loan portfolio increased to $16.9 million for the second quarter of 2015 from $10.6 million in the first quarter of 2015 and from $13.1 million for the second quarter of 2014. During the second quarter of 2015, we continued to opportunistically manage the acquired loan portfolio and recognized $10.1 million of accretion income from loans that closed through prepayment, foreclosure and sale, including the sale of $35.7 million of acquired loans that generated $8.2 million of accretion income. Net interest income increased 30% to $100.2 million for the six months ended June 30, 2015 from $77.2 million for the six months ended June 30, 2014.
- Noninterest income during the second quarter of 2015 increased to $8.1 million from $3.3 million in the first quarter of 2015 and $4.1 million in the second quarter of 2014. Noninterest income during the second quarter included $1.7 million in fees generated through our new Escrow and Exchange divisions, $779,000 of fee income from our Real Estate Capital Markets group and $856,000 of advisory fee income and net equity warrant valuation adjustments from our Merchant Banking division, which includes our broker-dealer subsidiary Opus Financial Partners. Noninterest income for the second quarter of 2015 also included a special dividend of $804,000 from the Federal Home Loan Bank ("FHLB"). Noninterest income increased to $11.4 million for the six months ended June 30, 2015 from $6.0 million for the six months ended June 30, 2014.
- Net interest margin increased 42 basis points to 4.29% for the second quarter of 2015 from 3.87% in the first quarter of 2015 and 4.04% in the second quarter of 2014. Contractual net interest margin, which excludes the impact of accretion and amortization of acquisition discounts and premiums, decreased eight basis points to 3.38% in the second quarter of 2015 from 3.46% in the first quarter of 2015 primarily due to day count, prepayment fees and decline in the acquired loan portfolio. Net interest margin decreased 34 basis points to 4.09% for the six months ended June 30, 2015 from 4.43% for the six months ended June 30, 2014 due to lower contribution from the acquired loan portfolio.
- New loan fundings totaled $543.8 million in the second quarter of 2015, an increase of 16% from $468.4 million in the first quarter of 2015 and an increase of 60% from $338.9 million in the second quarter of 2014. The weighted average rate on new loan fundings during the second quarter of 2015 was 4.34% compared to 4.55% during the first quarter of 2015 and 4.35% during the second quarter of 2014. Commercial and Specialty Banking divisions represented 47% of new loan fundings during the second quarter of 2015, continuing the strategic shift in the mix of loans that has resulted in 6 basis points expansion in the yield on our originated loan portfolio for the first six months of 2015 compared to the same period in 2014. Loan commitments of $598.9 million were originated during the second quarter of 2015, an increase of 14% from $526.6 million in the first quarter of 2015 and 38% from $433.5 million during the second quarter of 2014.
- Our originated loan portfolio grew by $332.9 million to $4.3 billion at June 30, 2015, an increase of 8% from March 31, 2015 and 48% from June 30, 2014. Total loans held-for-investment, which includes our acquired loan portfolio, increased by $272.0 million, or 6%, during the second quarter to a record $4.6 billion and increased by $1.2 billion, or 35%, from June 30, 2014.
- The loan origination pipeline at July 1, 2015 grew by 30% from April 1, 2015 and reflects the continued growth and maturation of our Commercial and Specialty Banking divisions, which comprised 58% of the pipeline on July 1, 2015.
- Total deposits grew $265.5 million, or 6%, during the second quarter to a record $4.6 billion at June 30, 2015. Noninterest bearing plus interest bearing demand deposits ("total demand deposits") increased by $226.4 million, or 16%, to $1.6 billion and comprised 35% of total deposits as of June 30, 2015, up from 32% at March 31, 2015. As of June 30, 2015, deposit balances associated with our Escrow and Exchange divisions totaled $521.1 million, an increase of $184.7 million from March 31, 2015. Deposits related to our Commercial and Specialty Banking divisions, including Escrow and Exchange, increased by $324.6 million during the second quarter of 2015, up 27% from March 31, 2015. Our cost of deposits declined five basis points from the first quarter of 2015 to 0.49% for the second quarter of 2015.
- Our loan-to-deposit ratio was unchanged from the prior quarter at 101% as of June 30, 2015.
- Our balance sheet is well positioned for rising interest rates as it continues to remain asset sensitive as of June 30, 2015. The mix, duration, repricing characteristics, amortization schedules and increased cash flows related to our loan and deposit portfolios result in positive outcomes under all our interest rate modeling scenarios.
- Our efficiency ratio improved to 45.3% for the second quarter of 2015 and 49.6% for the six months ended June 30, 2015 from 60.7% and 56.2% for the quarter and six months ended June 30, 2014, respectively. Noninterest expense to average assets decreased to 2.0% in the second quarter of 2015 compared to 2.1% during the first quarter of 2015 and 2.4% during the second quarter of 2014. Noninterest expense to average assets decreased to 2.0% for the six months ended June 30, 2015 from 2.3% for the six months ended June 30, 2014.
- Return on average tangible equity increased to 12.5% for the second quarter of 2015 as compared to 8.1% for the first quarter of 2015 and 8.2% for the second quarter of 2014. Return on average tangible equity was 10.3% for the six months ended June 30, 2015, unchanged from the same period in 2014. Return on average assets was 1.23% for the second quarter of 2015 compared to 0.85% for the first quarter of 2015 and 0.97% for the second quarter of 2014. Return on average assets was 1.05% for the six months ended June 30, 2015 as compared to 1.18% for the six months ended June 30, 2014.
- Asset quality continues to remain strong with nonperforming assets totaling $12.6 million, or 0.22%, of total assets at June 30, 2015 compared to $12.7 million, or 0.23%, at March 31, 2015 and $13.0 million, or 0.30%, at June 30, 2014. Provision expense for the second quarter of 2015 was $5.8 million compared to $3.6 million for the first quarter of 2015. The current quarter provision was driven by loan growth and changes in specific reserves and individual risk ratings. Our ratio of allowance for loan losses to total loans increased to 0.66% as of June 30, 2015 and our coverage ratio was 1.22%, which includes the $26.1 million remaining discount on the acquired loan portfolio.
- Our tangible book value per as-converted share at June 30, 2015 increased to $17.48 from $17.08 at March 31, 2015 and $16.49 at June 30, 2014.
Stephen H. Gordon, Founding Chairman, Chief Executive Officer and President of Opus Bank, stated, "We are proud of our second quarter results, which were driven by the continued growth and maturation of all divisions within Opus and the continued out-performance of our loan and deposit portfolios. This quarter experienced a significant increase in revenues from numerous spread and fee income sources and achieved continued improved efficiency, displaying Opus' meaningful scalability and client demand for our solutions-based approach and breadth of capabilities.” Gordon concluded, “Given where Opus was positioned at quarter-end and line of sight into our growth through the remainder of 2015 and into 2016, we are pleased to announce today that the Board of Directors has approved increasing our quarterly cash dividend by 43% to $0.10 per share, which reflects our strong capital position, asset quality, liquidity, increasing earnings power and return metrics, and confidence in our ability to execute our business strategy and growth plans.”
Net Interest Income
Net interest income was $55.0 million in the second quarter of 2015, an increase of 22% from $45.2 million in the first quarter of 2015 and 47% from $37.5 million in the second quarter of 2014. Interest income from originated loans increased by $3.2 million, or 8%, from the first quarter of 2015 and $14.3 million, or 49%, from the second quarter of 2014 due to our continued loan growth and success in strategically shifting our loan mix. Interest income from the acquired loan portfolio increased by $6.4 million from the prior quarter and $3.8 million from the prior year's second quarter due to higher accretion income from loans that closed through prepayment, foreclosure and sale, including the sale of $35.7 million of acquired loans that generated $8.2 million of accretion income. Interest expense was $6.1 million for the second quarter of 2015 compared to $6.0 million for the first quarter of 2015 and $4.7 million for the second quarter of 2014. The increase in interest expense was driven by growth of $312.7 million in average interest bearing deposits from March 31, 2015 and $1.2 billion from June 30, 2014.
Net interest income for the six months ended June 30, 2015 totaled $100.2 million, an increase of $22.9 million, or 30%, from $77.2 million for the six months ended June 30, 2014. Interest income for the six months ended June 30, 2015 totaled $112.3 million, an increase of $26.3 million, or 31%, from $86.0 million during the six months ended June 30, 2014 due to an increase of $29.7 million in interest income from the originated loan portfolio offset by a decrease of $5.0 million of interest income from the acquired loan portfolio. Interest expense for the six months ended June 30, 2015 totaled $12.1 million, an increase of $3.3 million, or 38%, from $8.8 million during the six months ended June 30, 2014 due to increased average deposit balances.
Net interest margin increased 42 basis points to 4.29% in the second quarter of 2015 from 3.87% in the first quarter of 2015 and increased 25 basis points from 4.04% in the second quarter of 2014. Total loan yield during the second quarter of 2015 increased to 5.42% from 4.90% in the first quarter of 2015 and 5.16% in the second quarter of 2014 due to higher balances of originated loans and higher accretion income received from the acquired loan portfolio. The yield on originated loans decreased 7 basis points to 4.28% during the second quarter of 2015 primarily due to day count and prepayment fees compared to the first quarter. Our cost of funds decreased to 0.50% during the second quarter of 2015 as compared to 0.55% during the first quarter of 2015 and 0.54% during the second quarter of 2014. Our cost of deposits decreased five basis points to 0.49% for the second quarter of 2015 as compared to 0.54% for the first quarter of 2015 and 0.53% for the second quarter of 2014. Accretion income from the acquired loan portfolio contributed 0.91% to the net interest margin during the second quarter of 2015 compared to 0.41% in the first quarter of 2015 and 0.63% in the second quarter of 2014.
Net interest margin decreased to 4.09% for the six months ended June 30, 2015 from 4.43% for the six months ended June 30, 2014. The yield on originated loans increased to 4.32% for the six months ended June 30, 2015 compared to 4.26% for the six months ended June 30, 2014. The yield on the acquired loan portfolio increased 163 basis points to 13.00% for the first six months of 2015 from the same period in 2014 but contributed 75 basis points less to net interest margin in 2015 due to the decline in the average balance of the acquired loan portfolio. Our cost of funds decreased to 0.53% for the six months ended June 30, 2015 from 0.54% for the six months ended June 30, 2014. Accretion income from the acquired loan portfolio contributed 0.67% and 0.99% to net interest margin during the six months ended June 30, 2015 and 2014, respectively.
Noninterest Income and Noninterest Expense
Noninterest income totaled $8.1 million in the second quarter of 2015 as compared to $3.3 million in the first quarter of 2015 and $4.1 million in the second quarter of 2014. Noninterest income totaled $11.4 million for the six months ended June 30, 2015 compared to $6.0 million for the six months ended June 30, 2014. Noninterest income during the second quarter of 2015 included $1.7 million in fees generated through our Escrow and Exchange divisions and $779,000 of fee income from our Real Estate Capital Markets group. Our Merchant Banking division, including our broker-dealer subsidiary Opus Financial Partners, generated $856,000 of revenue during the second quarter, which was comprised of $400,000 of advisory fee income and $456,000 of net equity warrant valuation adjustments. Additional net equity warrant valuation adjustments and gains of $450,000 were recorded during the current quarter on equity warrant assets from our other Commercial and Specialty Banking divisions. Noninterest income for the second quarter of 2015 also included a special dividend of $804,000 from the FHLB.
Noninterest expense totaled $28.6 million in the second quarter of 2015, an increase of 7% from $26.8 million in the first quarter of 2015 and 13% from $25.2 million in the second quarter of 2014. Noninterest expense for the six months ended June 30, 2015 was $55.3 million, an increase of 18% from $46.8 million for the six months ended June 30, 2014. The increase in noninterest expense from the prior quarter and prior year was primarily driven by higher compensation and benefits expenses mostly due to increases in our corporate incentive accruals as a result of our performance during the first six months of 2015.
Loans
Total loans held-for-investment, net of the allowance for loan losses, grew to $4.6 billion at June 30, 2015, an increase of 6% from $4.3 billion at March 31, 2015 and an increase of 35% from $3.4 billion at June 30, 2014.
Our originated loan portfolio totaled $4.3 billion as of June 30, 2015, an increase of 8% from $3.9 billion as of March 31, 2015 and 48% from $2.9 billion as of June 30, 2014. Our loan growth during the quarter was a result of $543.8 million of new loan fundings, including $289.9 million from Income Property Banking, $60.1 million from Commercial Banking, $52.5 million from Healthcare Banking, $45.0 million from Technology Banking, $42.4 million from Structured Finance, $33.7 million from Institutional Syndications and $16.8 million from Corporate Finance. Our Commercial and Specialty Banking divisions contributed 47% of new loan fundings during the second quarter of 2015 compared to 58% during the first quarter of 2015 and 31% during the second quarter of 2014. Loan commitments originated during the second quarter totaled $598.9 million as compared to $526.6 million during the first quarter of 2015 and $433.5 million during the second quarter of 2014. At June 30, 2015, our unfunded commitments on originated loans totaled $376.7 million. As of June 30, 2015, originated loans made up 92% of our total loan portfolio as compared to 90% as of March 31, 2015 and 84% as of June 30, 2014.
Our acquired loan portfolio totaled $364.6 million as of June 30, 2015, a decrease of 14% from $425.1 million at March 31, 2015 and 32% from $533.3 million at June 30, 2014. At June 30, 2015, unfunded commitments on acquired loans totaled $25.2 million.
Deposits and Borrowings
Deposits totaled $4.6 billion as of June 30, 2015, an increase of 6% from $4.3 billion as of March 31, 2015 and 46% from $3.2 billion as of June 30, 2014. Total demand deposits increased to 35% of total deposits at June 30, 2015 from 32% at March 31, 2015 and 25% at June 30, 2014. During the second quarter of 2015, demand deposits from our Escrow and Exchange divisions increased by $184.7 million, which brought the total deposit balances from these divisions to $521.1 million at a weighted average cost of 0.04%. Deposits related to our Commercial and Specialty Banking divisions, including Escrow and Exchange, increased by $324.6 million during the second quarter of 2015, up 27% from March 31, 2015. At June 30, 2015, business deposits represented 47% of total deposits, as compared to 43% at March 31, 2015 and 40% at June 30, 2014. Our loan-to-deposit ratio was 101% as of June 30, 2015, unchanged from the end of the prior quarter and down from 108% as of June 30, 2014.
FHLB advances totaled $365.0 million as of June 30, 2015, unchanged from $365.0 million as of March 31, 2015 and a decrease from $397.5 million at June 30, 2014.
Asset Quality
We recorded a provision for loan losses of $5.8 million in the second quarter of 2015 compared to provision expense of $3.6 million in the first quarter of 2015 and a provision recapture of $16,000 in the second quarter of 2014. Provision recapture on the acquired loan portfolio totaled $387,000 in the second quarter of 2015, $202,000 during the first quarter of 2015 and $1.4 million in the second quarter of 2014 due to continued improvement in expected cash flows and credit performance. A provision for loan losses of $6.2 million was recorded on the originated loan portfolio during the second quarter of 2015 compared to $3.8 million in the first quarter of 2015 and $1.4 in the second quarter of 2014. The provision for loan losses during the current quarter was comprised of $3.4 million for portfolio growth and changes in loss factors and $2.8 million for changes in specific reserves and individual risk ratings. We continue to experience strong asset quality as our loan portfolio continues to season, evidenced by the low balance of nonperforming asset and stable ratio of nonperforming assets to total assets of 0.22% as of June 30, 2015 compared to 0.23% at March 31, 2015 and 0.30% at June 30, 2014.
Our allowance for loan losses represented 0.66% of our total loan portfolio at June 30, 2015 as compared to 0.57% at March 31, 2015 and 0.50% at June 30, 2014. Our acquired loan portfolio has a remaining discount of $26.1 million at June 30, 2015. The coverage ratio for the total loan portfolio, which includes the remaining discount on the acquired loan portfolio, at June 30, 2015 was 1.22% compared to 1.45% at March 31, 2015 and 1.95% at June 30, 2014, declining as the originated loan portfolio continues to increase as a percentage of the total loan portfolio. Our allowance for loan losses on originated loans resulted in a coverage ratio of 0.67% at June 30, 2015, an increase from 0.57% at March 31, 2015 and 0.48% at June 30, 2014.
Capital
Our capital ratios continue to be strong and well in excess of bank regulatory requirements. Beginning in the first quarter of 2015, we calculated our capital ratios under the FDIC Regulatory Capital Interim Final Rule (Basel III). As of June 30, 2015, our Tier 1 leverage ratio was 9.98%, Common Equity Tier 1 ratio was 11.08% and total risk-based capital ratio was 12.92%, compared to 10.40%, 11.79% and 13.55% as of March 31, 2015. As of June 30, 2014 under Basel I rules, our Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios were 12.11%, 14.78% and 15.33%, respectively. Stockholders’ equity totaled $838.9 million as of June 30, 2015, an increase of 2% from $824.5 million as of March 31, 2015 and an increase of 8% from $775.4 million as of June 30, 2014 driven by strong quarterly net income. Our tangible book value per as converted common share increased to $17.48 as of June 30, 2015 from $17.08 as of March 31, 2015 and $16.49 at June 30, 2014.
Additionally, on July 23, 2015 the Board of Directors approved increasing our quarterly cash dividend by 43% to $0.10 per share payable on August 20, 2015 to common and preferred shareholders of record as of August 6, 2015.
Conference Call and Webcast Details
Date: Monday, July 27,
2015
Time: 7:00 a.m. PT (10:00 a.m. ET)
Phone Number: (855) 265-3237
Conference Id: 74560106
Webcast
URL: http://investor.opusbank.com/events.cfm
Analysts, investors, and the general public may listen to a discussion of Opus' second quarter earnings and performance and participate in the question/answer session by using the phone number listed above or through a live webcast of the conference available through a link on the investor relations page of Opus's website at: http://investor.opusbank.com/events.cfm. The webcast will include a slide presentation, enabling conference participants to experience the discussion with greater impact. It is recommended that participants dial into the conference call or log into the webcast approximately 10 minutes prior to the call.
Replay Information: For those who are not able to listen to the call, an archive of the call will be available beginning approximately 2 hours following the completion of the call. To listen to the call replay, dial (855) 859-2056, or for international callers dial (404) 537-3406. The access code for either replay number is 74560106. The call replay will be available through August 27, 2015.
About Opus Bank
Opus Bank is an FDIC insured California-chartered commercial bank with over $5.8 billion of total assets, $4.6 billion of total loans, and $4.6 billion in total deposits as of June 30, 2015. Opus Bank provides high-value, relationship-based banking products, services, and solutions to its clients through its Retail Bank, Commercial Bank, Merchant Bank, and Correspondent Bank. Opus Bank offers a suite of treasury and cash management and depository solutions and a wide range of loan products, including commercial business, healthcare, technology, multifamily residential, commercial real estate, and structured finance, and is an SBA preferred lender. Opus Bank offers commercial escrow services and facilitates 1031 exchange transactions through its Escrow and Exchange divisions. Opus Bank provides clients with financial and advisory services related to raising equity capital, targeted acquisition and divestiture strategies, general mergers and acquisitions, debt and equity financing, balance sheet restructuring, valuation, strategy, and performance improvement through its broker-dealer subsidiary, Opus Financial Partners. Opus Bank is an Equal Housing Lender. Opus Bank operates 57 client experience centers, including two in the Phoenix metropolitan area of Arizona, 33 in California and 22 in the Seattle/Puget Sound region in Washington. For additional information about Opus Bank, please visit our website: www.opusbank.com.
Forward Looking Statements
This release and the aforementioned conference call and webcast may include forward-looking statements related to the Opus’s plans, beliefs and goals, which involve certain risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competitive pressure in the banking industry; changes in the interest rate environment; the health of the economy, either nationally or regionally; the deterioration of credit quality, which would cause an increase in the provision for possible loan and lease losses; changes in the regulatory environment; changes in business conditions, particularly in California real estate; volatility of rate sensitive deposits; asset/liability matching risks and liquidity risks; and changes in the securities markets. For a discussion of these and other risks and uncertainties, see Opus's filings with the Federal Deposit Insurance Corporation, including, but not limited to, the risk factors in Opus's annual report on Form 10-K. These filings are available on the Investor Relations page of Opus's website at: investor.opusbank.com.
Opus undertakes no obligation to revise or publicly release any revision to these forward-looking statements.
| Consolidated Statements of Income | ||||||||||||||||||||||||
| (unaudited) | For the three months ended | For the six months ended | ||||||||||||||||||||||
| ($ in thousands, except per share | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||
| amounts) | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Interest income: | ||||||||||||||||||||||||
| Loans | $ | 60,097 | $ | 50,518 | $ | 42,015 | $ | 110,616 | $ | 85,913 | ||||||||||||||
| Investment securities | 686 | 492 | (7 | ) | 1,177 | (127 | ) | |||||||||||||||||
| Due from banks | 279 | 225 | 164 | 504 | 256 | |||||||||||||||||||
| Total interest income | 61,062 | 51,235 | 42,172 | 112,297 | 86,042 | |||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||
| Deposits | 5,487 | 5,447 | 4,095 | 10,933 | 7,744 | |||||||||||||||||||
| Federal Home Loan Bank advances | 597 | 597 | 579 | 1,195 | 1,059 | |||||||||||||||||||
| Total interest expense | 6,084 | 6,044 | 4,674 | 12,128 | 8,803 | |||||||||||||||||||
| Net interest income | 54,978 | 45,191 | 37,498 | 100,169 | 77,239 | |||||||||||||||||||
| Provision (recapture) for loan losses | 5,797 | 3,560 | (16 | ) | 9,357 | (214 | ) | |||||||||||||||||
|
Net interest income after provision (recapture) for loan losses |
49,181 | 41,631 | 37,514 | 90,812 | 77,453 | |||||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||
| Service charges on deposit accounts | 1,683 | 1,536 | 1,512 | 3,219 | 3,027 | |||||||||||||||||||
| (Loss) gain on sale of assets | (28 | ) | 134 | 109 | 106 | 74 | ||||||||||||||||||
| (Loss) gain from real estate owned, net | (261 | ) | 63 | 1,795 | (198 | ) | 559 | |||||||||||||||||
| Gain on sale of investment securities | 363 | — | — | 363 | — | |||||||||||||||||||
| Bank-owned life insurance, net | 689 | 715 | 219 | 1,404 | 439 | |||||||||||||||||||
| Escrow and exchange fees | 1,668 | — | — | 1,668 | — | |||||||||||||||||||
| Other income | 3,963 | 842 | 443 | 4,805 | 1,937 | |||||||||||||||||||
| Total noninterest income | 8,077 | 3,290 | 4,078 | 11,367 | 6,036 | |||||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||
| Compensation and benefits | 16,467 | 14,694 | 13,145 | 31,160 | 27,140 | |||||||||||||||||||
| Professional services | 1,774 | 1,966 | 1,427 | 3,740 | 1,454 | |||||||||||||||||||
| Occupancy expense | 2,950 | 2,766 | 2,790 | 5,716 | 5,622 | |||||||||||||||||||
| Depreciation and amortization | 1,383 | 1,325 | 1,339 | 2,709 | 2,672 | |||||||||||||||||||
| Deposit insurance and regulatory assessments | 859 | 772 | 609 | 1,630 | 1,241 | |||||||||||||||||||
| Insurance expense | 303 | 307 | 309 | 609 | 540 | |||||||||||||||||||
| Data processing | 862 | 817 | 724 | 1,679 | 1,482 | |||||||||||||||||||
| Software licenses and maintenance | 489 | 453 | 409 | 943 | 938 | |||||||||||||||||||
| Office services | 1,025 | 1,008 | 907 | 2,033 | 1,790 | |||||||||||||||||||
| Amortization of core deposit intangibles | 627 | 627 | 627 | 1,254 | 1,254 | |||||||||||||||||||
| Advertising and marketing | 227 | 238 | 647 | 465 | 945 | |||||||||||||||||||
| Litigation expense (recovery) | 25 | 250 | (240 | ) | 275 | (2,023 | ) | |||||||||||||||||
| Other expenses | 1,589 | 1,530 | 2,527 | 3,119 | 3,731 | |||||||||||||||||||
| Total noninterest expense | 28,580 | 26,753 | 25,220 | 55,332 | 46,786 | |||||||||||||||||||
| Income before income tax expense | 28,678 | 18,168 | 16,372 | 46,847 | 36,703 | |||||||||||||||||||
| Income tax expense | 11,194 | 7,092 | 6,096 | 18,286 | 13,180 | |||||||||||||||||||
| Net income | $ | 17,484 | $ | 11,076 | $ | 10,276 | $ | 28,561 | $ | 23,523 | ||||||||||||||
| Basic earnings per common share | $ | 0.54 | $ | 0.35 | $ | 0.33 | $ | 0.89 | $ | 0.79 | ||||||||||||||
| Diluted earnings per common share | 0.52 | 0.34 | 0.32 | 0.86 | 0.77 | |||||||||||||||||||
| Weighted average shares - basic | 28,684,002 | 28,154,150 | 26,880,953 | 28,420,540 | 25,003,075 | |||||||||||||||||||
| Weighted average shares - diluted | 33,537,721 | 32,857,377 | 31,891,723 | 33,203,785 | 30,556,466 | |||||||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| (unaudited) | As of | ||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||
| ($ in thousands, except share amounts) | 2015 | 2015 | 2014 | ||||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 31,742 | $ | 32,963 | $ | 46,313 | |||||||||
| Due from banks – interest-bearing | 424,046 | 382,318 | 203,068 | ||||||||||||
| Investment securities available-for-sale, at fair value | 234,766 | 254,104 | 188,986 | ||||||||||||
| Loans held-for-investment | 4,629,232 | 4,356,843 | 3,417,019 | ||||||||||||
| Less allowance for loan losses | (30,660 | ) | (24,878 | ) | (17,171 | ) | |||||||||
| Loans held-for-investment, net | 4,598,572 | 4,331,965 | 3,399,848 | ||||||||||||
| Real estate owned | 3,965 | 4,277 | 7,343 | ||||||||||||
| Premises and equipment, net | 33,979 | 34,180 | 35,758 | ||||||||||||
| Goodwill | 262,115 | 262,115 | 238,528 | ||||||||||||
| Core deposit intangible, net | 11,354 | 11,981 | 13,862 | ||||||||||||
| Deferred tax assets, net | 61,707 | 71,963 | 88,654 | ||||||||||||
| Cash surrender value of bank owned life insurance, net | 94,560 | 92,760 | 60,425 | ||||||||||||
| Accrued interest receivable | 15,531 | 15,552 | 12,459 | ||||||||||||
| Federal Home Loan Bank stock | 17,250 | 30,414 | 30,756 | ||||||||||||
| Other assets | 43,172 | 36,982 | 24,334 | ||||||||||||
| Total assets | $ | 5,832,759 | $ | 5,561,574 | $ | 4,350,334 | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing demand | $ | 803,082 | $ | 825,094 | $ | 544,131 | |||||||||
| Interest-bearing demand | 814,095 | 565,669 | 231,543 | ||||||||||||
| Money market and savings | 2,369,962 | 2,322,850 | 1,759,403 | ||||||||||||
| Time deposits | 604,263 | 612,263 | 618,045 | ||||||||||||
| Total deposits | 4,591,402 | 4,325,876 | 3,153,122 | ||||||||||||
| Federal Home Loan Bank advances | 365,000 | 365,000 | 397,500 | ||||||||||||
| Accrued interest payable | 354 | 345 | 416 | ||||||||||||
| Other liabilities | 37,059 | 45,842 | 23,876 | ||||||||||||
| Total liabilities | 4,993,815 | 4,737,063 | 3,574,914 | ||||||||||||
| Stockholders’ equity: | |||||||||||||||
| Preferred stock: | |||||||||||||||
| Authorized 200,000,000 shares; issued 72,411 and 72,411 and 72,411 shares, respectively | 68,768 | 68,768 | 68,768 | ||||||||||||
| Common stock, no par value per share: | |||||||||||||||
| Authorized 200,000,000 shares; issued 28,930,431 and 28,743,456 and 28,236,646 shares, respectively | 550,248 | 550,248 | 536,502 | ||||||||||||
| Additional paid-in capital | 44,947 | 43,659 | 38,333 | ||||||||||||
| Retained earnings | 179,559 | 164,337 | 134,666 | ||||||||||||
| Treasury stock, at cost; 207,784 and 144,127 and 136,179 shares, respectively | (4,838 | ) | (2,839 | ) | (2,604 | ) | |||||||||
| Accumulated other comprehensive income (loss) | 260 | 338 | (245 | ) | |||||||||||
| Total stockholders’ equity | 838,944 | 824,511 | 775,420 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,832,759 | $ | 5,561,574 | $ | 4,350,334 | |||||||||
| Selected Financial Data | ||||||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| (unaudited) | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Return on average assets | 1.23 | % | 0.85 | % | 0.97 | % | 1.05 | % | 1.18 | % | ||||||||||
| Return on average stockholders' equity | 8.42 | 5.56 | 5.47 | 7.02 | 6.63 | |||||||||||||||
| Return on average tangible equity (1) | 12.54 | 8.06 | 8.23 | 10.32 | 10.25 | |||||||||||||||
| Efficiency ratio (2) | 45.32 | 55.18 | 60.66 | 49.61 | 56.18 | |||||||||||||||
| Noninterest expense to average assets | 2.01 | 2.06 | 2.39 | 2.03 | 2.34 | |||||||||||||||
| Yield on interest-earning assets | 4.76 | 4.39 | 4.55 | 4.58 | 4.94 | |||||||||||||||
| Cost of deposits (3) | 0.49 | 0.54 | 0.53 | 0.52 | 0.53 | |||||||||||||||
| Cost of funds (4) | 0.50 | 0.55 | 0.54 | 0.53 | 0.54 | |||||||||||||||
| Net interest margin | 4.29 | 3.87 | 4.04 | 4.09 | 4.43 | |||||||||||||||
(1) See computation in "Non-GAAP Financial Measures" section.
(2) The efficiency ratio is calculated by dividing noninterest expense by the sum of net interest income before provision for loan losses and noninterest income.
(3) Calculated as interest expense on deposits divided by total average deposits.
(4) Calculated as total interest expense divided by average total deposits and FHLB advances.
| Capital Ratios | As of | |||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| (unaudited) |
2015 (2) |
2015 | 2014 | |||||||||
| (Under Basel III) (1) | (Under Basel I) (1) | |||||||||||
| Tier 1 leverage ratio | 9.98 | % | 10.40 | % | 12.11 | % | ||||||
| Tier 1 risk-based capital ratio | 12.21 | 12.91 | 14.78 | |||||||||
| Total risk-based capital ratio | 12.92 | 13.55 | 15.33 | |||||||||
| Common Equity Tier 1 ratio (3) | 11.08 | 11.79 | n/a | |||||||||
(1) The capital ratios beginning March 31, 2015 reflect the adoption of Basel III in effect beginning January 1, 2015 while ratios for the prior period represents the previous capital rules under Basel I.
(2) Ratios are preliminary until filing of our call report as of June 30, 2015.
(3) The Common Equity Tier 1 ratio is a new ratio required under Basel III and represents common equity, less goodwill and intangible assets net of any deferred tax liabilities, divided by risk-weighted assets.
| Loan Originations | ||||||||||||||||||||
| (unaudited) | For the three months ended | For the six months ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| ($ in thousands) | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Loans originated: | ||||||||||||||||||||
| Real estate mortgage loans: | ||||||||||||||||||||
| Single-family residential | $ | — | $ | — | $ | 3,838 | $ | — | $ | 29,092 | ||||||||||
| Multifamily residential | 219,988 | 145,831 | 186,190 | 365,819 | 415,388 | |||||||||||||||
| Commercial real estate | 134,734 | 73,495 | 69,918 | 208,229 | 153,764 | |||||||||||||||
| Construction and land loans | 2,604 | 2,245 | 446 | 4,849 | 1,500 | |||||||||||||||
| Commercial business loans | 186,448 | 246,046 | 76,320 | 432,494 | 185,763 | |||||||||||||||
| Small Business Administration loans | 60 | 826 | 1,481 | 886 | 3,637 | |||||||||||||||
| Consumer and other loans | — | — | 680 | — |
680 |
|||||||||||||||
| Total loan originations | $ | 543,834 | $ | 468,443 | $ | 338,873 | $ | 1,012,277 | $ | 789,824 | ||||||||||
| Composition of Loan Portfolio | As of | |||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||
| (unaudited) | 2015 | 2015 | 2014 | |||||||||||||||
| % of | % of | % of | ||||||||||||||||
| ($ in thousands) | Amount | Total loans | Amount | Total loans | Amount | Total loans | ||||||||||||
| Originated loans held-for-investment | ||||||||||||||||||
| Real estate mortgage loans: | ||||||||||||||||||
| Single-family residential | $ | 114,227 | 2.5 | % | $ | 119,610 | 2.7 | % | $ | 143,215 | 4.2 | % | ||||||
| Multifamily residential | 2,347,656 | 50.7 | 2,264,517 | 52.0 | 1,902,754 | 55.7 | ||||||||||||
| Commercial real estate | 896,659 | 19.4 | 795,634 | 18.3 | 492,379 | 14.4 | ||||||||||||
| Construction and land loans | 20,045 | 0.4 | 10,102 | 0.2 | 6,030 | 0.2 | ||||||||||||
| Commercial business loans | 857,442 | 18.5 | 712,658 | 16.4 | 314,956 | 9.2 | ||||||||||||
| Small Business Administration loans | 25,860 | 0.6 | 26,682 | 0.6 | 23,610 | 0.7 | ||||||||||||
| Consumer and other loans | 2,747 | 0.1 | 2,561 | 0.1 | 734 | 0.0 | ||||||||||||
| Total originated loans | 4,264,636 | 92.2 | 3,931,764 | 90.2 | 2,883,678 | 84.4 | ||||||||||||
| Acquired loans held-for-investment | ||||||||||||||||||
| Real estate mortgage loans: | ||||||||||||||||||
| Single-family residential | 85,476 | 1.8 | 122,693 | 2.8 | 145,133 | 4.2 | ||||||||||||
| Multifamily residential | 93,113 | 2.0 | 95,435 | 2.2 | 108,338 | 3.2 | ||||||||||||
| Commercial real estate | 94,459 | 2.1 | 100,794 | 2.3 | 135,320 | 4.0 | ||||||||||||
| Construction and land loans | 2,121 | 0.0 | 2,789 | 0.1 | 4,117 | 0.1 | ||||||||||||
| Commercial business loans | 24,876 | 0.5 | 25,908 | 0.6 | 31,168 | 0.9 | ||||||||||||
| Small Business Administration loans | 55,718 | 1.2 | 58,867 | 1.4 | 72,109 | 2.1 | ||||||||||||
| Consumer and other loans | 8,833 | 0.2 | 18,593 | 0.4 | 37,156 | 1.1 | ||||||||||||
| Total acquired loans | 364,596 | 7.8 | 425,079 | 9.8 | 533,341 | 15.6 | ||||||||||||
| Total gross loans | $ | 4,629,232 | 100.0 | % | $ | 4,356,843 | 100.0 | % | $ | 3,417,019 | 100.0 | % | ||||||
| Composition of Deposits | As of | |||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||
| (unaudited) | 2015 | 2015 | 2014 | |||||||||||||||
| % of | % of | % of | ||||||||||||||||
| ($ in thousands) | Amount | Total deposits | Amount | Total deposits | Amount | Total deposits | ||||||||||||
| Noninterest bearing | $ | 803,082 | 17.49 | % | $ | 825,094 | 19.07 | % | $ | 544,131 | 17.26 | % | ||||||
| Interest bearing demand | 814,095 | 17.73 | 565,669 | 13.08 | 231,543 | 7.34 | ||||||||||||
| Money market and savings | 2,369,962 | 51.62 | 2,322,850 | 53.70 | 1,759,403 | 55.80 | ||||||||||||
| Time deposits | 604,263 | 13.16 | 612,263 | 14.15 | 618,045 | 19.60 | ||||||||||||
| Total deposits | $ | 4,591,402 | 100.0 | % | $ | 4,325,876 | 100.0 | % | $ | 3,153,122 | 100.0 | % | ||||||
| Consolidated average balance sheet, interest, yield and rates | ||||||||||||||||||||||||||||
| For the three months ended | For the three months ended | For the three months ended | ||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||||||||||||
| (unaudited) | 2015 | 2015 | 2014 | |||||||||||||||||||||||||
| Average | Yields/ | Average | Yields/ | Average | Yields/ | |||||||||||||||||||||||
| ($ in thousands) | Balance | Interest | Rates | Balance | Interest | Rates | Balance | Interest | Rates | |||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||
| Due from banks | $ | 445,758 | $ | 279 | 0.25 | % | $ | 363,796 | $ | 225 | 0.25 | % | $ | 256,297 | $ | 164 | 0.26 | % | ||||||||||
| Investment securities | 254,617 | 686 | 1.08 | 193,651 | 492 | 1.03 | 198,111 | (7 | ) | (0.01 | ) | |||||||||||||||||
| Acquired loans | 400,551 | 16,930 | 16.95 | 452,620 | 10,555 | 9.46 | 551,951 | 13,110 | 9.53 | |||||||||||||||||||
| Originated Loans | 4,042,875 | 43,167 | 4.28 | 3,725,252 | 39,963 | 4.35 | 2,714,324 | 28,905 | 4.27 | |||||||||||||||||||
| Total loans | $ | 4,443,426 | $ | 60,097 | 5.42 | $ | 4,177,872 | $ | 50,518 | 4.90 | $ | 3,266,275 | $ | 42,015 | 5.16 | |||||||||||||
| Total interest-earning assets | $ | 5,143,801 | $ | 61,062 | 4.76 | $ | 4,735,319 | $ | 51,235 | 4.39 | $ | 3,720,683 | $ | 42,172 | 4.55 | |||||||||||||
| Noninterest-earning assets | 565,195 | 537,460 | 509,987 | |||||||||||||||||||||||||
| Total assets | $ | 5,708,996 | $ | 5,272,779 | $ | 4,230,670 | ||||||||||||||||||||||
| Liabilities and stockholders’ equity: | ||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 745,927 | $ | 343 | 0.18 | % | $ | 453,894 | $ | 282 | 0.25 | % | $ | 230,617 | $ | 65 | 0.11 | % | ||||||||||
| Money market and savings | 2,333,423 | 3,897 | 0.67 | 2,301,946 | 3,903 | 0.69 | 1,661,831 | 2,759 | 0.67 | |||||||||||||||||||
| Time deposits | 609,660 | 1,247 | 0.82 | 620,438 | 1,262 | 0.82 | 629,816 | 1,271 | 0.81 | |||||||||||||||||||
| Total interest bearing deposits | $ | 3,689,010 | $ | 5,487 | 0.60 | $ | 3,376,278 | $ | 5,447 | 0.65 | $ | 2,522,264 | $ | 4,095 | 0.65 | |||||||||||||
| FHLB advances | 365,000 | 597 | 0.66 | 375,333 | 597 | 0.65 | 354,835 | 579 | 0.65 | |||||||||||||||||||
|
Total interest-bearing
liabilities |
$ | 4,054,010 | $ | 6,084 | 0.60 | $ | 3,751,611 | $ | 6,044 | 0.65 | $ | 2,877,099 | $ | 4,674 | 0.65 | |||||||||||||
| Noninterest-bearing deposits | 785,516 | 691,095 | 581,232 | |||||||||||||||||||||||||
| Other liabilities | 36,554 | 21,497 | 18,903 | |||||||||||||||||||||||||
| Total liabilities | $ | 4,876,080 | $ | 4,464,203 | $ | 3,477,234 | ||||||||||||||||||||||
| Total stockholders’ equity | $ | 832,916 | $ | 808,576 | $ | 753,436 | ||||||||||||||||||||||
|
Total liabilities and stockholders’ equity |
$ | 5,708,996 | $ | 5,272,779 | $ | 4,230,670 | ||||||||||||||||||||||
| Net interest income | $ | 54,978 | $ | 45,191 | $ | 37,498 | ||||||||||||||||||||||
| Net interest spread (1) | 4.16 | % | 3.74 | % | 3.90 | % | ||||||||||||||||||||||
| Net interest margin (2) | 4.29 | % | 3.87 | % | 4.04 | % | ||||||||||||||||||||||
(1) Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities.
(2) Net interest margin is computed by dividing net interest income by total average interest-earning assets.
| Consolidated average balance sheet, interest, yield and rates | |||||||||||||||||||
| For the six months ended June 30, | |||||||||||||||||||
| (unaudited) | 2015 | 2014 | |||||||||||||||||
| Average | Yields/ | Average | Yields/ | ||||||||||||||||
| (In thousands) | Balance | Interest | Rates | Balance | Interest | Rates | |||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||
| Due from banks | $ | 405,003 | $ | 504 | 0.25 | % | $ | 201,604 | $ | 256 | 0.26 | % | |||||||
| Investment securities | 224,303 | 1,177 | 1.06 | 206,754 | (127 | ) | (0.12 | ) | |||||||||||
| Acquired loans | 426,442 | 27,486 | 13.00 | 576,779 | 32,508 | 11.37 | |||||||||||||
| Originated Loans | 3,884,941 | 83,130 | 4.32 | 2,529,671 | 53,405 | 4.26 | |||||||||||||
| Total loans | $ | 4,311,383 | $ | 110,616 | 5.17 | $ | 3,106,450 | $ | 85,913 | 5.58 | |||||||||
| Total interest-earning assets | $ | 4,940,689 | $ | 112,297 | 4.58 | $ | 3,514,808 | $ | 86,042 | 4.94 | |||||||||
| Noninterest-earning assets | 551,404 | 512,300 | |||||||||||||||||
| Total assets | $ | 5,492,093 | $ | 4,027,108 | |||||||||||||||
| Liabilities and stockholders’ equity: | |||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||
| Interest-bearing demand | $ | 600,717 | $ | 625 | 0.21 | % | $ | 231,735 | $ | 130 | 0.11 | % | |||||||
| Money market and savings | 2,317,771 | 7,799 | 0.68 | 1,552,340 | 5,022 | 0.65 | |||||||||||||
| Time deposits | 615,019 | 2,509 | 0.82 | 638,817 | 2,592 | 0.82 | |||||||||||||
| Total interest bearing deposits | $ | 3,533,507 | $ | 10,933 | 0.62 | $ | 2,422,892 | $ | 7,744 | 0.64 | |||||||||
| FHLB advances | 370,138 | 1,195 | 0.65 | 325,967 | 1,059 | 0.66 | |||||||||||||
| Total interest-bearing liabilities | $ | 3,903,645 | $ | 12,128 | 0.63 | $ | 2,748,859 | $ | 8,803 | 0.65 | |||||||||
| Noninterest-bearing deposits | 738,567 | 542,335 | |||||||||||||||||
| Other liabilities | 29,067 | 20,086 | |||||||||||||||||
| Total liabilities | $ | 4,671,279 | $ | 3,311,280 | |||||||||||||||
| Total stockholders’ equity | 820,813 | 715,828 | |||||||||||||||||
|
Total liabilities and stockholders’ equity |
$ | 5,492,092 | $ | 4,027,108 | |||||||||||||||
| Net interest income | $ | 100,169 | $ | 77,239 | |||||||||||||||
| Net interest spread (1) | 3.95 | % | 4.29 | % | |||||||||||||||
| Net interest margin (2) | 4.09 | % | 4.43 | % | |||||||||||||||
(1) Net interest spread represents the average yield on interest-earning assets less the average rate on interest-bearing liabilities.
(2) Net interest margin is computed by dividing net interest income by total average interest-earning assets.
| Asset Quality Information | ||||||||||||
| (unaudited) | As of | |||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| ($ in thousands) | 2015 | 2015 | 2014 | |||||||||
| Nonperforming assets | ||||||||||||
| Nonaccrual loans | $ | 8,624 | $ | 8,411 | $ | 5,665 | ||||||
| Real estate owned | 3,965 | 4,277 | 7,343 | |||||||||
| Total nonperforming assets | 12,589 | 12,688 | 13,008 | |||||||||
| Nonperforming assets to total assets | 0.22 | % | 0.23 | % | 0.30 | % | ||||||
| Accruing loans 90 days or more past due | $ | 814 | $ | 1,188 | $ | 3,437 | ||||||
| Accruing troubled debt restructured loans | 291 | 296 | 82 | |||||||||
| Allowance for loan losses - Originated loans | 28,512 | 22,342 | 13,813 | |||||||||
| Allowance for loan losses - Acquired loans | 2,148 | 2,536 | 3,358 | |||||||||
| Total allowance for loan losses | 30,660 | 24,878 | 17,171 | |||||||||
| Remaining acquisition discount on acquired loans | $ | 26,090 | $ | 39,031 | $ | 50,280 | ||||||
| Allowance for loan losses to non-accrual loans | 355.5 | % | 295.8 | % | 303.1 | % | ||||||
| Allowance for loan losses acquired loans to acquired loans | 0.59 | 0.60 | 0.63 | |||||||||
| Allowance for loan losses originated loans to originated loans | 0.67 | 0.57 | 0.48 | |||||||||
| Total allowance for loan losses to total loans | 0.66 | 0.57 | 0.50 | |||||||||
|
Allowance for loan losses and remaining acquisition discount on acquired loans to gross acquired loans (1) |
7.23 | 8.96 | 9.19 | |||||||||
|
Allowance for loan losses and remaining acquisition discount to total gross loans (1) |
1.22 | 1.45 | 1.95 | |||||||||
(1) Remaining acquisition discount is added back to acquired loans held for investment to calculate gross loans and added to allowance for loan losses to calculate the
coverage ratios.
Non-GAAP Financial Measures
Our accounting and reporting policies conform to generally accepted accounting principles in the United States ("GAAP"). We believe that the presentation of certain non-GAAP financial measures assists investors in assessing our financial results. These non-GAAP measures include our return on average tangible equity, net interest income excluding acquisition accounting and tangible book value per as converted common share. These non-GAAP measures should be taken together with the corresponding GAAP measures and ratios and should not be considered a substitute of the GAAP measures and ratios.
The following tables present a reconciliation of the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios:
| Non-GAAP return on average tangible equity | ||||||||||||||||||||
| (unaudited) | For the three months ended | For the six months ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| ($ in thousands) | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Average tangible equity: | ||||||||||||||||||||
| Average stockholders' equity | $ | 832,916 | $ | 808,576 | $ | 753,436 | $ | 820,813 | $ | 715,828 | ||||||||||
| Less: | ||||||||||||||||||||
| Average goodwill | 262,115 |
|
238,790 | 238,528 | 250,517 | 238,528 | ||||||||||||||
| Average core deposit intangibles | 11,680 | 12,334 | 14,236 | 12,005 | 14,566 | |||||||||||||||
| Average tangible equity | 559,121 | 557,452 | 500,672 | 558,291 | 462,734 | |||||||||||||||
| Net income | $ | 17,484 | $ | 11,076 | $ | 10,276 | $ | 28,561 | $ | 23,523 | ||||||||||
| Return on average stockholders' equity | 8.42 | % | 5.56 | % | 5.47 | % | 7.02 | % | 6.63 | % | ||||||||||
| Non-GAAP return on average tangible equity | 12.54 | 8.06 | 8.23 | 10.32 | 10.25 | |||||||||||||||
| Non-GAAP net interest margin | ||||||||||||||||||||
| (unaudited) | For the three months ended | For the six months ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| ($ in thousands) | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Net interest income | $ | 54,978 | $ | 45,191 | $ | 37,498 |
|
$ | 100,169 | $ | 77,239 | |||||||||
| Less: Accretion/amortization of acquisition discount/premium (1) | (11,356 | ) | (4,452 | ) | (5,339 | ) | (15,808 | ) | (16,202 | ) | ||||||||||
| Non-GAAP net interest income | 43,622 | 40,739 | 32,159 | 84,361 | 61,037 | |||||||||||||||
| Average interest earning assets | $ | 5,143,801 | $ | 4,735,319 | $ | 3,720,683 | $ | 4,940,689 | $ | 3,514,808 | ||||||||||
| Add: Average unamortized acquisition discounts | 37,488 | 42,453 | 54,563 | 39,553 | 59,799 | |||||||||||||||
| Non-GAAP average interest-earning assets | 5,181,289 | 4,777,772 | 3,775,246 | 4,980,242 | 3,574,607 | |||||||||||||||
| Net interest margin impact | 0.91 | % | 0.41 | % | 0.63 | % | 0.67 | % | 0.99 | % | ||||||||||
(1) Accretion income on acquired loans only includes interest income recognized in excess of what would be accrued under the contractual terms as a result of acquisition accounting and loan exits through full payoff or charge-off, foreclosure or sale.
| Non-GAAP tangible book value per as converted common share | |||||||||
| (unaudited) | As of | ||||||||
| June 30, | March 31, | June 30, | |||||||
| ($ In thousands, except share amounts) | 2015 | 2015 | 2014 | ||||||
| Tangible equity: | |||||||||
| Total stockholders' equity | $ | 838,944 | $ | 824,511 | $ | 775,420 | |||
| Less: | |||||||||
| Goodwill | 262,115 | 262,115 | 238,528 | ||||||
| Core deposit intangibles | 11,354 | 11,981 | 13,862 | ||||||
| Tangible equity | 565,475 | 550,415 | 523,030 | ||||||
| Shares of common stock outstanding | 28,722,647 | 28,599,329 | 28,100,467 | ||||||
|
Shares of common stock to be issued upon conversion of preferred stock |
3,620,550 | 3,620,550 | 3,620,550 | ||||||
|
Total as converted shares of common stock outstanding (1) |
32,343,197 | 32,219,879 | 31,721,017 | ||||||
| Book value per as converted common share | 25.94 | 25.59 | 24.44 | ||||||
| Tangible book value per as converted common share | 17.48 | 17.08 | 16.49 | ||||||
(1) Common stock outstanding includes additional shares of common stock that would be issued upon conversion of all outstanding shares of preferred stock to common stock and excludes shares issuable upon exercise of warrants and options.
