Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TAYLOR CAPITAL GROUP INC | tayc2012q3earningsrelase.htm |
| EX-99.2 - POWERPOINT PRESENTATION - TAYLOR CAPITAL GROUP INC | a3q2012final10162012.htm |
Investor Relations and Media Contact: | |
Tom Decker | |
(847) 653-7399 | |
Taylor Capital Reports Net Income of
$16.7 Million for the Third Quarter of 2012
Net income up 18% driven primarily by strong mortgage results
CHICAGO, IL - October 17, 2012 - Taylor Capital Group, Inc. (the “Company”) (NASDAQ: TAYC), the parent company of Cole Taylor Bank (the “Bank”), today reported results for the third quarter of 2012.
Net income for the third quarter of 2012 was $16.7 million, compared to $14.2 million for the second quarter of 2012. Net income applicable to common stockholders was $15.0 million, or $0.49 per diluted share, for the third quarter of 2012, compared to $12.5 million, or $0.41 per diluted share, for the second quarter of 2012. Net income included a $3.7 million pre-tax expense for the early extinguishment of debt costs related to prepaying our $60.0 million of 10% subordinated notes.
Net income for the nine months ended September 30, 2012 was $40.4 million, compared to $8.8 million for the nine months ended September 30, 2011. Net income applicable to common stockholders was $35.2 million, or $1.15 per diluted share, for the nine months ended September 30, 2012, compared to $1.4 million, or $0.07 per diluted share, for the nine months ended September 30, 2011.
“Third quarter pre-tax, pre-provision operating earnings reached a record $32.8 million resulting from another tremendous effort put forth by all facets of our company,” said Mark A. Hoppe, President and Chief Executive Officer of Taylor Capital Group. “These results reflect the ongoing success of our decisions to diversify revenue and to strengthen our core lines of business. Cole Taylor Mortgage, our mortgage division, continues to be a strong driver of our results and is capitalizing on this low interest rate environment with record revenue. Cole Taylor Business Capital, our asset based lending division, hit an important milestone in the quarter reaching $1.0 billion in loan commitments. Commercial and industrial loans outstanding grew nearly 4% in the quarter as we attracted a number of new customers and our clients' increased utilization of their working capital loans. We are pleased that our recent initiatives to enter the equipment financing business, to expand our activities in southeast Wisconsin and to grow our mortgage origination volume through additional retail offices are showing positive results.”
Hoppe added, “From a funding and liquidity perspective there were also improvements as core deposits increased over 18% during the quarter, and the Bank prepaid its $60.0 million of 10% subordinated notes. Going forward, both of these developments will improve the bottom line. At the same time, we have not lost focus on our goal of improving asset quality as nonperforming loans to total loans declined and our allowance for loan losses to nonperforming loans is over 128%. Overall, we are well positioned to increase stockholder value by continuing to deliver on our strategic objectives of income diversification, disciplined growth and strengthened asset quality.”
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THIRD QUARTER 2012 HIGHLIGHTS
Reported earnings per diluted share of $0.49 in the third quarter of 2012, up from $0.41 per diluted share in the second quarter of 2012
• | Revenue(1) increased to a record $84.4 million for the third quarter of 2012, up $19.2 million or 29.4% from the second quarter of 2012 |
• | Net interest margin on a tax equivalent basis declined by two basis points to 3.21% for the third quarter of 2012 from 3.23% for the second quarter of 2012 |
• | Mortgage banking revenue increased to $40.7 million, up $17.7 million or 77.0% over the second quarter of 2012 |
• | Commercial and industrial loans grew $54.9 million or 3.7% from the second quarter of 2012 |
• | $60.0 million of 10% subordinated notes originally due in 2016 was prepaid which resulted in a non-recurring, non-cash charge of $3.7 million associated with the unamortized discount and original issuance costs |
• | Period end core deposits (excluding time and brokered deposits) grew by $380.9 million in the third quarter of 2012 to $2.44 billion |
• | The Company's Tier I Risk Based Capital ratio was 12.29%, while its Total Risk Based Capital ratio was 14.41% and its Tier I Capital to Average Assets leverage ratio was 9.43% as of September 30, 2012 |
Credit quality indicators continued to improve, including a 16.2% reduction in nonperforming loans compared to the second quarter
• | Nonperforming loans were $62.1 million and 1.77% of total loans at September 30, 2012, down from $74.1 million and 2.29% of total loans at June 30, 2012 |
• | At September 30, 2012, commercial criticized and classified loans(2) totaled $114.7 million, down from $139.9 million at June 30, 2012 |
• | The allowance for loan losses as a percent of nonperforming loans was 128.30% at September 30, 2012, compared to 117.39% at June 30, 2012 |
• | Credit costs(3), however, were $1.5 million for the third quarter of 2012, up from $928,000 for the second quarter of 2012 |
THIRD QUARTER 2012 PERFORMANCE OVERVIEW
Results of Operations
Net income for the third quarter of 2012 was $16.7 million, compared to net income of $14.2 million for the second quarter of 2012. Net income applicable to common stockholders was $15.0 million, or $0.49 per diluted share, for the third quarter of 2012, compared to net income applicable to common stockholders of $12.5 million, or $0.41 per diluted share, for the second quarter of 2012.
Income before income taxes was $27.6 million for the third quarter of 2012, compared to income before income taxes of $24.2 million for the second quarter of 2012, an increase of 14.3%. The improvement from the second quarter of 2012 primarily was led by increased mortgage banking revenue, partially offset by an increase in performance-based incentive compensation expense. The third quarter of 2012 also included $3.7 million of early extinguishment of debt costs, compared to $3.0 million of such costs in the second quarter. The prepayment of the Bank's $60 million subordinated notes originally due in 2016, which resulted in the early extinguishment of debt costs this quarter, was completed as part of an ongoing effort to lower overall funding costs.
Pre-tax, Pre-provision Operating Earnings(4)
Pre-tax, pre-provision operating earnings totaled $32.8 million for the third quarter of 2012, compared to $25.1 million for the second quarter of 2012, a 30.7% increase.
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Revenue
Revenue totaled $84.4 million for the third quarter of 2012, compared to $65.2 million for the second quarter of 2012, a 29.4% increase primarily due to a $17.7 million increase in mortgage banking revenue.
Net interest income was $37.2 million for the third quarter of 2012, compared to $36.4 million for the second quarter of 2012. The tax equivalent net interest margin was down two basis points, from 3.23% for the second quarter of 2012 to 3.21% for the third quarter of 2012, primarily as a result of lower yields on commercial loans.
Noninterest income, excluding investment security gains and losses, was $47.3 million for the third quarter of 2012, compared to $28.9 million for the second quarter of 2012. The increase was primarily due to a $17.7 million increase in mortgage banking revenue. The increase in mortgage banking revenue, from $23.0 million in the second quarter of 2012 to $40.7 million in the third quarter of 2012, was primarily a result of increased margins on mortgage originations and sales in the secondary market and a 44.3% increase in mortgage originations in the third quarter. Mortgage originations were $1.38 billion in the third quarter of 2012, up from $960.1 million in the second quarter of 2012.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and early extinguishment of debt expense, was $51.6 million for the third quarter of 2012, compared to $40.2 million for the second quarter of 2012. The increase was primarily the result of an increase in performance-based incentive compensation expense and salary costs related to additional headcount primarily at Cole Taylor Mortgage.
Credit Quality
Loan Portfolio Performance and Credit Quality
Credit quality continued its steady pace of improvement in the third quarter. Total commercial criticized and classified loans declined $25.2 million to $114.7 million at September 30, 2012, compared to $139.9 million at June 30, 2012.
Nonperforming loans declined to $62.1 million at September 30, 2012, compared to $74.1 million at June 30, 2012, primarily due to charge-offs, other resolutions and a low rate of loans migrating to nonperforming status.
Other real estate owned (“OREO”) and repossessed assets decreased by $3.7 million to $28.9 million at September 30, 2012, compared to $32.6 million at June 30, 2012, primarily due to sales.
Nonperforming assets were $91.0 million at September 30, 2012, compared to $106.7 million at June 30, 2012. Nonperforming assets to total assets were 1.77% at September 30, 2012, compared to 2.22% at June 30, 2012.
Allowance and Provision for Loan Losses
The allowance for loan losses was $79.7 million at September 30, 2012, down from $87.0 million at June 30, 2012, as credit quality trends continued to improve, demonstrated by declines in nonperforming loans and commercial criticized and classified loans. The decline in the allowance for loan losses resulted primarily from charge-offs of loans. The allowance for loan losses as a percent of nonperforming loans was 128.30% at September 30, 2012, compared to 117.39% at June 30, 2012. The provision for loan losses was $900,000 for the third quarter of 2012, compared to $100,000 for the second quarter of 2012.
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Balance Sheet
Assets
Total assets at September 30, 2012 were $5.14 billion, compared to $4.80 billion at June 30, 2012.
Cash and cash equivalents increased $53.6 million in the third quarter to $159.0 million as of September 30, 2012, primarily due to an inflow of retail customer deposits at quarter end.
Investment securities were $1.21 billion at September 30, 2012, compared to $1.24 billion at June 30, 2012.
Net loans at September 30, 2012, excluding loans held for sale, were $3.01 billion, compared to $2.89 billion at June 30, 2012. Commercial and Industrial loans plus commercial owner-occupied were $1.98 billion at September 30, 2012, compared to $1.91 billion at June 30, 2012. The increase of $63.0 million was primarily due to new customers and our clients' increased utilization of their working capital loans. Consumer-oriented loans were $415.3 million at September 30, 2012, up from $379.2 million at June 30, 2012. This increase was primarily the result of certain mortgages originated by Cole Taylor Mortgage being retained.
Loans held for sale were $422.6 million at September 30, 2012, compared to $255.7 million at June 30, 2012. The increase in loans held for sale is a result of continued growth in mortgage originations in the third quarter of 2012 and the timing of loan sales.
Mortgage servicing rights increased $18.4 million in the third quarter to $53.2 million as of September 30, 2012, primarily due to an increase in the unpaid principal balance of loans serviced to $6.24 billion as of September 30, 2012.
Other assets increased $24.1 million in the third quarter to $186.8 million as of September 30, 2012, primarily due to an increase in fair value of mortgage derivatives.
Liabilities and Stockholders' Equity
Total liabilities at September 30, 2012 were $4.69 billion, as compared to $4.36 billion at June 30, 2012.
Total deposits were $3.56 billion at September 30, 2012, compared to $3.18 billion at June 30, 2012. The increase was primarily due to an increase in noninterest-bearing deposits associated with on-going deposit raising efforts.
Average total deposits for the third quarter of 2012 increased by $122.0 million compared to the second quarter of 2012, primarily due to an increase in noninterest-bearing deposits. Average deposits, excluding time and brokered deposits, grew by $192.1 million or 9.6% from the second quarter of 2012.
Borrowings decreased $87.5 million in the third quarter to $1.01 billion as of September 30, 2012, primarily due to the early prepayment of the $60.0 million of 10% subordinated notes.
Total stockholders' equity increased from $436.4 million at June 30, 2012 to $447.6 million at September 30, 2012, primarily due to an increase in net income available to common stockholders in the third quarter of 2012 and an increase in other comprehensive income due to unrealized gains on available-for-sale securities, partially offset by the repurchase of certain outstanding warrants previously held by the US Treasury.
Capital
At September 30, 2012, the Company's Tier I Risk Based Capital ratio was 12.29%, while its Total Risk Based Capital ratio was 14.41% and its Tier I Capital to Average Assets leverage ratio was 9.43%.
Each of these Company ratios exceeded the regulatory requirements for well-capitalized banks of 6.00% for the Tier I Risk Based Capital ratio, 10.00% for the Total Risk Based Capital ratio and 5.00% for the Tier I Capital to Average Assets leverage ratio.
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Conference Call and Slide Presentation
A conference call hosted by Taylor Capital Group President & CEO Mark A. Hoppe will be held on Wednesday, October 17, 2012 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Investors, news media and others may access the call by telephone at 877-883-0383 (toll-free) or 412-902-6506 and entering the code 7826140. Participants are encouraged to dial into the call approximately 10 minutes prior to the start time.
This call is being webcast and can be accessed via a live Internet audio broadcast at Taylor Capital Group's website at www.taylorcapitalgroup.com.
Taylor Capital Group will post presentation slides on its website to be addressed by management during the call. The slides will be available for download on the Company's Investor Relations web page at www.taylorcapitalgroup.com.
A replay of the conference call will be made available after approximately 1:00 p.m. Central Time (2:00 p.m. Eastern Time) on October 17, 2012 through November 16, 2012, and the instructions for accessing the replay will be available on the Company's website during that period.
Accompanying Financial Statements and Tables
This press release is accompanied by the following unaudited financial information:
• | Condensed Consolidated Balance Sheets |
• | Consolidated Statements of Income |
• | Summary of Key Quarterly Financial Data |
• | Summary of Key Year-to-Date Financial Data |
• | Summary of Key Period-End Financial Data |
• | Composition of Loan Portfolio |
• | Credit Quality |
• | Loan Portfolio Aging |
• | Funding Liabilities |
• | Reconciliation of U.S. GAAP Financial Measures |
About Taylor Capital Group, Inc. (NASDAQ: TAYC)
Taylor Capital Group, Inc. is the holding company of Cole Taylor Bank, a commercial bank headquartered in Chicago with assets of $5.1 billion as of September 30, 2012. Cole Taylor specializes in serving the banking needs of closely held businesses and the people who own and manage them. Through its national businesses, Cole Taylor Business Capital, Cole Taylor Equipment Finance and Cole Taylor Mortgage, the Bank also provides asset based lending, commercial equipment leasing and residential mortgage lending through a growing network of offices throughout the United States. Cole Taylor is a member of the FDIC and is an Equal Housing Lender.
Endnotes:
(1) Revenue is defined as net interest income plus noninterest income adjusted by investment securities gains and losses, derivative termination fees and impairment of investment securities.
(2) Commercial criticized and classified loans (special mention, substandard, and nonaccrual loans) in commercial and industrial, commercial real estate, residential construction and land, and commercial construction and land, excludes consumer loans.
(3) Credit costs are defined as provision for loan losses plus nonperforming asset expense.
(4) Schedules reconciling earnings in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) to the non-GAAP measurement of pre-tax, pre-provision operating earnings and revenue are provided in the attached tables.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including “may,” “might”, “contemplate”, “plan”, “prudent”, “potential”, “should”, “will,” “expect,” “anticipate,” “believe,” “intend,” “could” and “estimate” and similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of risks,
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uncertainties and other factors that could cause our actual results, performance, prospects or opportunities in 2012 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors include, without limitation:
• | Our business may be adversely affected by the highly regulated environment in which we operate. |
• | Competition from financial institutions and other financial services providers may adversely affect our growth and profitability. |
• | Our business is subject to the conditions of the local economy in which we operate and continued weakness in the local economy and the real estate markets may adversely affect us. |
• | Our business is subject to domestic and to a lesser extent, international economic conditions and other factors, many of which are beyond our control and could adversely affect our business. |
• | The preparation of our consolidated financial statements requires us to make estimates and judgments, which are subject to an inherent degree of uncertainty and which may differ from actual results. |
• | Our allowance for loan losses may prove to be insufficient to absorb losses in our loan portfolio. |
• | Our residential mortgage loan repurchase reserve for losses could be insufficient. |
• | We are subject to interest rate risk, including interest rate fluctuations that could reduce our profitability. |
• | Certain hedging strategies that we use to manage investment in mortgage servicing rights may be ineffective to offset any adverse changes in the fair value of these assets due to changes in interest rates and market liquidity. |
• | Our residential mortgage lending profitability could be significantly reduced if we are not able to originate and resell a high volume of mortgage loans. |
• | We have counterparty risk and therefore we may be adversely affected by the soundness of other financial institutions. |
• | We are subject to certain operational risks, including, but not limited to, data processing system failures and errors and customer or employee fraud. Our controls and procedures may fail or be circumvented. |
• | We are dependent upon outside third parties for processing and handling of our records and data. |
• | System failure or breaches of our network security, including with respect to our internet banking activities, could subject us to increased operating costs as well as litigation and other liabilities. |
• | We are subject to lending concentration risks. |
• | We may not be able to access sufficient and cost-effective sources of liquidity. |
• | We are subject to liquidity risk, including unanticipated deposit volatility. |
• | The recent repeal of federal prohibitions on payment of interest on business demand deposits could increase our interest expense. |
• | Changes in our credit ratings could increase our financing costs or make it more difficult for us to obtain funding or capital on commercially acceptable terms. |
• | We are a bank holding company and our sources of funds are limited. |
• | Our business strategy is dependent on our continued ability to attract, develop and retain highly qualified and experienced personnel in senior management and customer relationship positions. |
• | Our reputation could be damaged by negative publicity. |
• | New lines of business or new products and services may subject us to certain additional risks. |
• | We may experience difficulties in managing our future growth. |
• | We, and our subsidiaries, are subject to changes in federal and state tax laws and changes in interpretation of existing laws. |
• | Regulatory requirements (including rules recently jointly proposed by the federal bank regulatory agencies to implement Basel III,) growth plans or operating results may require us to raise additional capital, which may not be available on favorable terms or at all. |
• | We have not paid a dividend on our common stock since the second quarter of 2008. In addition, regulatory restrictions and liquidity constraints at the holding company level could impair our ability to make distributions on our outstanding securities. |
For further information about these and other risks, uncertainties and factors, please review the disclosure included in the section captioned "Risk Factors” in our December 31, 2011 Annual Report on Form 10-K filed
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with the SEC on March 9, 2012 as updated by our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings we have made with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements or risk factors, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited) Sept. 30, 2012 | (Unaudited) June 30, 2012 | Dec. 31, 2011 | |||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 159,007 | $ | 105,386 | $ | 121,164 | |||||
Investment securities | 1,212,139 | 1,240,405 | 1,279,676 | ||||||||
Loans held for sale | 422,621 | 255,693 | 185,984 | ||||||||
Loans, net of allowance for loan losses of $79,667 at September 30, 2012, $86,992 at June 30, 2012 and $103,744 at December 31, 2011 | 3,006,026 | 2,894,835 | 2,824,555 | ||||||||
Premises, leasehold improvements and equipment, net | 15,516 | 15,472 | 14,882 | ||||||||
Investment in Federal Home Loan Bank and Federal Reserve Bank stock | 52,813 | 55,186 | 56,781 | ||||||||
Mortgage servicing rights | 53,218 | 34,843 | 8,742 | ||||||||
Other real estate and repossessed assets, net | 28,859 | 32,627 | 35,622 | ||||||||
Other assets | 186,776 | 162,654 | 158,404 | ||||||||
Total assets | $ | 5,136,975 | $ | 4,797,101 | $ | 4,685,810 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Deposits: | |||||||||||
Noninterest-bearing | $ | 1,274,610 | $ | 971,818 | $ | 802,480 | |||||
Interest-bearing | 2,284,072 | 2,212,792 | 2,320,731 | ||||||||
Total deposits | 3,558,682 | 3,184,610 | 3,123,211 | ||||||||
Accrued interest, taxes and other liabilities | 120,404 | 78,247 | 61,183 | ||||||||
Short-term borrowings | 870,434 | 901,138 | 768,133 | ||||||||
Long-term borrowings | 20,000 | 20,000 | 147,500 | ||||||||
Junior subordinated debentures | 86,607 | 86,607 | 86,607 | ||||||||
Subordinated notes, net | 33,274 | 90,091 | 89,648 | ||||||||
Total liabilities | 4,689,401 | 4,360,693 | 4,276,282 | ||||||||
Stockholders' equity: | |||||||||||
Preferred stock, Series B | 103,359 | 102,913 | 102,042 | ||||||||
Preferred stock, Series D | — | — | 4 | ||||||||
Preferred stock, Series G | — | — | 9 | ||||||||
Nonvoting preferred stock | 13 | 13 | — | ||||||||
Common stock | 301 | 299 | 297 | ||||||||
Surplus | 414,899 | 424,700 | 423,674 | ||||||||
Accumulated deficit | (83,230 | ) | (98,222 | ) | (118,426 | ) | |||||
Accumulated other comprehensive income, net | 41,817 | 36,290 | 31,513 | ||||||||
Treasury stock | (29,585 | ) | (29,585 | ) | (29,585 | ) | |||||
Total stockholders' equity | 447,574 | 436,408 | 409,528 | ||||||||
Total liabilities and stockholders' equity | $ | 5,136,975 | $ | 4,797,101 | $ | 4,685,810 | |||||
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CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | |||||||||||||||
Interest income: | |||||||||||||||||||
Interest and fees on loans | $ | 36,561 | $ | 35,422 | $ | 35,204 | $ | 107,266 | $ | 104,912 | |||||||||
Interest and dividends on investment securities: | |||||||||||||||||||
Taxable | 8,897 | 9,889 | 11,391 | 29,104 | 34,596 | ||||||||||||||
Tax-exempt | 733 | 691 | 700 | 2,087 | 2,197 | ||||||||||||||
Interest on cash equivalents | 1 | 3 | 4 | 7 | 10 | ||||||||||||||
Total interest income | 46,192 | 46,005 | 47,299 | 138,464 | 141,715 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 4,399 | 4,938 | 6,505 | 14,748 | 23,157 | ||||||||||||||
Short-term borrowings | 564 | 629 | 784 | 1,756 | 2,296 | ||||||||||||||
Long-term borrowings | 32 | 69 | 1,342 | 601 | 5,288 | ||||||||||||||
Junior subordinated debentures | 1,466 | 1,464 | 1,445 | 4,402 | 4,334 | ||||||||||||||
Subordinated notes | 2,535 | 2,527 | 2,505 | 7,581 | 7,492 | ||||||||||||||
Total interest expense | 8,996 | 9,627 | 12,581 | 29,088 | 42,567 | ||||||||||||||
Net interest income | 37,196 | 36,378 | 34,718 | 109,376 | 99,148 | ||||||||||||||
Provision for loan losses | 900 | 100 | 16,240 | 8,350 | 38,303 | ||||||||||||||
Net interest income after provision for loan losses | 36,296 | 36,278 | 18,478 | 101,026 | 60,845 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Service charges | 3,423 | 3,355 | 2,897 | 10,069 | 8,483 | ||||||||||||||
Mortgage banking revenue | 40,676 | 23,014 | 7,571 | 81,220 | 11,331 | ||||||||||||||
Gain on sales of investment securities | — | 3,020 | 4,938 | 3,976 | 4,938 | ||||||||||||||
Other derivative income | 1,790 | 815 | 2,735 | 3,166 | 3,682 | ||||||||||||||
Other noninterest income | 1,361 | 1,685 | 1,291 | 4,654 | 4,270 | ||||||||||||||
Total noninterest income | 47,250 | 31,889 | 19,432 | 103,085 | 32,704 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Salaries and employee benefits | 37,024 | 28,278 | 15,462 | 88,939 | 45,334 | ||||||||||||||
Occupancy of premises, furniture and equipment | 3,246 | 2,922 | 2,707 | 8,958 | 8,200 | ||||||||||||||
Nonperforming asset expense | 613 | 828 | (1,648 | ) | 2,135 | 3,642 | |||||||||||||
Early extinguishment of debt | 3,670 | 2,987 | 3,444 | 7,658 | 3,444 | ||||||||||||||
FDIC assessment | 1,766 | 1,497 | 1,626 | 4,965 | 5,073 | ||||||||||||||
Legal fees, net | 1,020 | 757 | 1,081 | 2,633 | 2,901 | ||||||||||||||
Other noninterest expense | 8,560 | 6,717 | 5,480 | 21,165 | 15,953 | ||||||||||||||
Total noninterest expense | 55,899 | 43,986 | 28,152 | 136,453 | 84,547 | ||||||||||||||
Income before income taxes | 27,647 | 24,181 | 9,758 | 67,658 | 9,002 | ||||||||||||||
Income tax expense (benefit) | 10,898 | 9,956 | (42 | ) | 27,215 | 207 | |||||||||||||
Net income | 16,749 | 14,225 | 9,800 | 40,443 | 8,795 | ||||||||||||||
Preferred dividends and discounts | (1,757 | ) | (1,748 | ) | (2,477 | ) | (5,247 | ) | (7,411 | ) | |||||||||
Net income applicable to common stockholders | $ | 14,992 | $ | 12,477 | $ | 7,323 | $ | 35,196 | $ | 1,384 | |||||||||
Basic income per common share | $ | 0.50 | $ | 0.42 | $ | 0.35 | $ | 1.18 | $ | 0.07 | |||||||||
Diluted income per common share | 0.49 | 0.41 | 0.35 | 1.15 | 0.07 | ||||||||||||||
Weighted-average common shares outstanding | 28,430,871 | 28,158,304 | 19,920,269 | 28,220,962 | 19,066,380 | ||||||||||||||
Weighted-average diluted common shares outstanding | 28,931,235 | 29,093,447 | 20,018,919 | 28,989,066 | 19,349,603 | ||||||||||||||
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SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(dollars in thousands)
Unaudited
2012 | 2011 | ||||||||||||||||||
Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | |||||||||||||||
Condensed Income Data: | |||||||||||||||||||
Net interest income | $ | 37,196 | $ | 36,378 | $ | 35,802 | $ | 35,266 | $ | 34,718 | |||||||||
Provision for loan losses | 900 | 100 | 7,350 | 10,955 | 16,240 | ||||||||||||||
Total noninterest income | 47,250 | 31,889 | 23,946 | 16,538 | 19,432 | ||||||||||||||
Total noninterest expense | 55,899 | 43,986 | 36,568 | 31,846 | 28,152 | ||||||||||||||
Income before income taxes | 27,647 | 24,181 | 15,830 | 9,003 | 9,758 | ||||||||||||||
Income tax expense (benefit) | 10,898 | 9,956 | 6,361 | (73,317 | ) | (42 | ) | ||||||||||||
Net income | 16,749 | 14,225 | 9,469 | 82,320 | 9,800 | ||||||||||||||
Preferred dividends and discounts | (1,757 | ) | (1,748 | ) | (1,742 | ) | (1,734 | ) | (2,477 | ) | |||||||||
Net income applicable to common stockholders | $ | 14,992 | $ | 12,477 | $ | 7,727 | $ | 80,586 | $ | 7,323 | |||||||||
Non-GAAP Measures of Performance (1) | |||||||||||||||||||
Revenue | $ | 84,446 | $ | 65,247 | $ | 58,917 | $ | 51,988 | $ | 50,108 | |||||||||
Pre-tax, pre-provision operating earnings | 32,830 | 25,076 | 24,044 | 21,764 | 23,752 | ||||||||||||||
Per Share Data: | |||||||||||||||||||
Basic earnings per common share | $ | 0.50 | $ | 0.42 | $ | 0.26 | $ | 3.20 | $ | 0.35 | |||||||||
Diluted earnings per common share | 0.49 | 0.41 | 0.26 | 3.20 | 0.35 | ||||||||||||||
Tangible book value per common share | 11.97 | 11.66 | 11.06 | 10.84 | 7.37 | ||||||||||||||
Weighted average common shares-basic | 28,430,871 | 28,158,304 | 28,071,406 | 20,684,652 | 19,920,269 | ||||||||||||||
Weighted average common shares-diluted | 28,931,235 | 29,093,447 | 28,622,798 | 20,709,071 | 20,018,919 | ||||||||||||||
Common shares outstanding-end of period | 28,756,717 | 28,602,394 | 28,428,015 | 28,360,076 | 20,312,842 | ||||||||||||||
Performance Ratios (annualized): | |||||||||||||||||||
Return on average assets | 1.33 | % | 1.17 | % | 0.81 | % | 7.26 | % | 0.89 | % | |||||||||
Return on average equity | 15.19 | % | 13.64 | % | 9.32 | % | 112.63 | % | 15.30 | % | |||||||||
Efficiency ratio (2) | 66.19 | % | 67.41 | % | 62.07 | % | 61.26 | % | 56.18 | % | |||||||||
Average Balance Sheet Data (3): | |||||||||||||||||||
Total assets | $ | 5,026,706 | $ | 4,867,810 | $ | 4,660,021 | $ | 4,533,916 | $ | 4,411,811 | |||||||||
Investments | 1,230,953 | 1,292,129 | 1,281,445 | 1,299,059 | 1,361,630 | ||||||||||||||
Cash equivalents | 304 | 709 | 960 | 1,651 | 2,049 | ||||||||||||||
Loans | 3,440,849 | 3,277,111 | 3,129,222 | 3,066,629 | 2,936,781 | ||||||||||||||
Total interest-earning assets | 4,672,106 | 4,569,949 | 4,411,627 | 4,367,339 | 4,300,460 | ||||||||||||||
Interest-bearing deposits | 2,193,790 | 2,260,395 | 2,286,294 | 2,365,451 | 2,276,657 | ||||||||||||||
Borrowings | 1,224,884 | 1,214,391 | 1,151,240 | 1,080,583 | 1,177,136 | ||||||||||||||
Total interest-bearing liabilities | 3,418,674 | 3,474,786 | 3,437,534 | 3,446,034 | 3,453,793 | ||||||||||||||
Noninterest-bearing deposits | 1,081,568 | 892,945 | 753,995 | 738,371 | 646,946 | ||||||||||||||
Total stockholders' equity | 441,133 | 417,261 | 406,559 | 292,356 | 256,264 | ||||||||||||||
Tax Equivalent Net Interest Margin: | |||||||||||||||||||
Net interest income as stated | $ | 37,196 | $ | 36,378 | $ | 35,802 | $ | 35,266 | $ | 34,718 | |||||||||
Add: Tax equivalent adjust. - investment (4) | 395 | 372 | 357 | 365 | 377 | ||||||||||||||
Tax equivalent adjust - loans (4) | 30 | 32 | 32 | 32 | 33 | ||||||||||||||
Tax equivalent net interest income | $ | 37,621 | $ | 36,782 | $ | 36,191 | $ | 35,663 | $ | 35,128 | |||||||||
Net interest margin without tax adjust. | 3.17 | % | 3.20 | % | 3.26 | % | 3.21 | % | 3.21 | % | |||||||||
Net interest margin - tax equivalent (4) | 3.21 | % | 3.23 | % | 3.29 | % | 3.25 | % | 3.25 | % | |||||||||
Yield on earning assets without tax adjust. | 3.94 | % | 4.04 | % | 4.21 | % | 4.22 | % | 4.37 | % | |||||||||
Yield on earning assets - tax equivalent (4) | 3.98 | % | 4.08 | % | 4.25 | % | 4.26 | % | 4.41 | % | |||||||||
Yield on interest-bearing liabilities | 1.05 | % | 1.11 | % | 1.22 | % | 1.28 | % | 1.45 | % | |||||||||
Net interest spread without tax adjust. | 2.89 | % | 2.93 | % | 2.99 | % | 2.94 | % | 2.93 | % | |||||||||
Net interest spread - tax equivalent (4) | 2.93 | % | 2.97 | % | 3.02 | % | 2.98 | % | 2.97 | % | |||||||||
Footnotes:
(1) | Refer to Reconciliation of U.S. GAAP Financial Measures for a reconciliation to GAAP. |
(2) | Efficiency ratio is determined by dividing noninterest expense by an amount equal to net interest income plus noninterest income, adjusted for gains or losses from investment securities. |
(3) | Average balances are daily averages. |
(4) | Adjustment reflects tax-exempt interest income on an equivalent before-tax basis assuming a tax rate of 35.0% |
10
SUMARY OF KEY YEAR-TO-DATE FINANCIAL DATA
(dollars in thousands)
Unaudited
Year to Date | ||||||||
September 30, | ||||||||
2012 | 2011 | |||||||
Condensed Income Data: | ||||||||
Net interest income | $ | 109,376 | $ | 99,148 | ||||
Provision for loan losses | 8,350 | 38,303 | ||||||
Total noninterest income | 103,085 | 32,704 | ||||||
Total noninterest expense | 136,453 | 84,547 | ||||||
Income before income taxes | 67,658 | 9,002 | ||||||
Income tax expense | 27,215 | 207 | ||||||
Net income | 40,443 | 8,795 | ||||||
Preferred dividends and discounts | (5,247 | ) | (7,411 | ) | ||||
Net income applicable to common stockholders | $ | 35,196 | $ | 1,384 | ||||
Non-GAAP Measures of Performance (1) | ||||||||
Revenue | $ | 208,610 | $ | 128,191 | ||||
Pre-tax, pre-provision operating earnings | 81,950 | 50,730 | ||||||
Per Share Data: | ||||||||
Basic income per common share | $ | 1.18 | $ | 0.07 | ||||
Diluted income per common share | 1.15 | 0.07 | ||||||
Tangible book value per common share | 11.97 | 7.37 | ||||||
Weighted average common shares-basic | 28,220,962 | 19,066,380 | ||||||
Weighted average common shares-diluted | 28,989,066 | 19,349,603 | ||||||
Shares outstanding-end of period | 28,756,717 | 20,312,842 | ||||||
Performance Ratios (annualized): | ||||||||
Return on average assets | 1.11 | % | 0.27 | % | ||||
Return on average equity | 12.78 | % | 5.03 | % | ||||
Efficiency ratio (2) | 65.41 | % | 65.95 | % | ||||
Average Balance Sheet Data (3): | ||||||||
Total assets | $ | 4,852,152 | $ | 4,377,602 | ||||
Investments | 1,268,040 | 1,364,138 | ||||||
Cash equivalents | 657 | 1,542 | ||||||
Loans | 3,282,972 | 2,913,306 | ||||||
Total interest-earning assets | 4,551,669 | 4,278,986 | ||||||
Interest-bearing deposits | 2,246,633 | 2,376,405 | ||||||
Borrowings | 1,196,942 | 1,093,137 | ||||||
Total interest-bearing liabilities | 3,443,575 | 3,469,542 | ||||||
Noninterest-bearing deposits | 910,131 | 621,127 | ||||||
Total stockholders' equity | 421,722 | 233,156 | ||||||
Tax Equivalent Net Interest Margin: | ||||||||
Net interest income as stated | $ | 109,376 | $ | 99,148 | ||||
Add: Tax equivalent adjust. - investment (4) | 1,124 | 1,182 | ||||||
Tax equivalent adjust - loans (4) | 94 | 104 | ||||||
Tax equivalent net interest income | $ | 110,594 | $ | 100,434 | ||||
Net interest margin without tax adjust. | 3.21 | % | 3.10 | % | ||||
Net interest margin - tax equivalent (4) | 3.24 | % | 3.14 | % | ||||
Yield on earning assets without tax adjust. | 4.06 | % | 4.42 | % | ||||
Yield on earning assets - tax equivalent (4) | 4.10 | % | 4.46 | % | ||||
Yield on interest-bearing liabilities | 1.13 | % | 1.64 | % | ||||
Net interest spread - without tax adjust. | 2.93 | % | 2.78 | % | ||||
Net interest spread - tax equivalent (4) | 2.97 | % | 2.82 | % | ||||
Footnotes:
(1) | Refer to Reconciliation of U.S. GAAP Financial Measures for a reconciliation to GAAP. |
(2) | Efficiency ratio is determined by dividing noninterest expense by an amount equal to net interest income plus noninterest income, adjusted for gains or losses from investment securities. |
(3) | Average balances are daily averages. |
(4) | Adjustment reflects tax-exempt interest income on an equivalent before-tax basis assuming a tax rate of 35.0% |
11
SUMMARY OF KEY PERIOD-END FINANCIAL DATA
(dollars in thousands)
Unaudited
Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | |||||||||||||||
Condensed Balance Sheet Data: | |||||||||||||||||||
Investment securities | $ | 1,212,139 | $ | 1,240,405 | $ | 1,299,572 | $ | 1,279,676 | $ | 1,309,579 | |||||||||
Loans | 3,508,314 | 3,237,520 | 3,113,837 | 3,114,283 | 3,022,128 | ||||||||||||||
Allowance for loan losses | 79,667 | 86,992 | 93,509 | 103,744 | 105,805 | ||||||||||||||
Total assets | 5,136,975 | 4,797,101 | 4,695,069 | 4,685,810 | 4,503,234 | ||||||||||||||
Total deposits | 3,558,682 | 3,184,610 | 2,989,639 | 3,123,211 | 2,926,281 | ||||||||||||||
Total borrowings | 1,010,315 | 1,097,836 | 1,186,115 | 1,091,888 | 1,229,298 | ||||||||||||||
Total stockholders' equity | 447,574 | 436,408 | 416,766 | 409,528 | 288,930 | ||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||
Nonperforming loans | $ | 62,096 | $ | 74,104 | $ | 93,498 | $ | 103,061 | $ | 121,534 | |||||||||
Nonperforming assets | 90,955 | 106,731 | 130,439 | 138,683 | 150,771 | ||||||||||||||
Allowance for loan losses to total loans (excluding loans held for sale) | 2.58 | % | 2.92 | % | 3.22 | % | 3.54 | % | 3.68 | % | |||||||||
Allowance for loan losses to nonperforming loans | 128.30 | % | 117.39 | % | 100.01 | % | 100.66 | % | 87.06 | % | |||||||||
Nonperforming assets to total loans plus repossessed property | 2.57 | % | 3.26 | % | 4.14 | % | 4.40 | % | 4.94 | % | |||||||||
Capital Resources (Taylor Capital Group, Inc.): | |||||||||||||||||||
Total Capital (to Risk Weighted Assets) | 14.41 | % | 16.03 | % | 15.46 | % | 14.72 | % | 13.63 | % | |||||||||
Tier I Capital (to Risk Weighted Assets) | 12.29 | % | 12.59 | % | 11.95 | % | 11.22 | % | 10.08 | % | |||||||||
Leverage (to average assets) | 9.43 | % | 9.41 | % | 9.08 | % | 8.84 | % | 7.83 | % | |||||||||
Total Capital | $ | 553,977 | $ | 579,618 | $ | 541,423 | $ | 517,706 | $ | 467,400 | |||||||||
Tier I Capital | 472,221 | 455,144 | 418,460 | 394,630 | 345,567 | ||||||||||||||
12
COMPOSITION OF LOAN PORTFOLIO (unaudited)
(dollars in thousands)
The following table presents the composition of the Company's loan portfolio as of the dates indicated:
September 30, 2012 | June 30, 2012 | December 31, 2011 | |||||||||||||||||||
Loans: | Balance | Percent of Gross Loans | Balance | Percent of Gross Loans | Balance | Percent of Gross Loans | |||||||||||||||
Commercial and industrial | $ | 1,537,316 | 49.8 | % | $ | 1,482,427 | 49.7 | % | $ | 1,426,221 | 48.8 | % | |||||||||
Commercial real estate secured | 979,004 | 31.7 | 975,680 | 32.7 | 1,037,976 | 35.4 | |||||||||||||||
Residential construction & land | 47,184 | 1.5 | 54,447 | 1.9 | 64,824 | 2.2 | |||||||||||||||
Commercial construction & land | 95,618 | 3.1 | 90,090 | 3.0 | 99,021 | 3.4 | |||||||||||||||
Lease receivables | 11,979 | 0.4 | — | — | — | — | |||||||||||||||
Total commercial loans | 2,671,101 | 86.5 | 2,602,644 | 87.3 | 2,628,042 | 89.8 | |||||||||||||||
Consumer-oriented loans | 415,334 | 13.5 | 379,183 | 12.7 | 300,257 | 10.2 | |||||||||||||||
Gross loans | 3,086,435 | 100.0 | % | 2,981,827 | 100.0 | % | 2,928,299 | 100.0 | % | ||||||||||||
Less: Unearned discount | (742 | ) | — | — | |||||||||||||||||
Total loans | 3,085,693 | 2,981,827 | 2,928,299 | ||||||||||||||||||
Less: Loan loss allowance | (79,667 | ) | (86,992 | ) | (103,744 | ) | |||||||||||||||
Net loans | $ | 3,006,026 | $ | 2,894,835 | $ | 2,824,555 | |||||||||||||||
Loans Held for Sale | $ | 422,621 | $ | 255,693 | $ | 185,984 | |||||||||||||||
The following table provides details of the Company's commercial real estate portfolio:
September 30, 2012 | June 30, 2012 | December 31, 2011 | |||||||||||||||||||
Commercial real estate secured: | Balance | Percent of Total | Balance | Percent of Total | Balance | Percent of Total | |||||||||||||||
Commercial non-owner occupied: | |||||||||||||||||||||
Retail strip centers or malls | $ | 116,461 | 11.9 | % | $ | 124,150 | 12.7 | % | $ | 143,052 | 13.8 | % | |||||||||
Office/mixed use property | 115,193 | 11.8 | 117,048 | 12.0 | 113,429 | 10.9 | |||||||||||||||
Commercial properties | 101,428 | 10.4 | 121,155 | 12.4 | 129,921 | 12.5 | |||||||||||||||
Specialized – other | 77,996 | 7.9 | 70,096 | 7.2 | 80,971 | 7.8 | |||||||||||||||
Other commercial properties | 25,771 | 2.6 | 18,937 | 2.0 | 40,270 | 3.9 | |||||||||||||||
Subtotal commercial non-owner occupied | 436,849 | 44.6 | 451,386 | 46.3 | 507,643 | 48.9 | |||||||||||||||
Commercial owner-occupied | 437,796 | 44.7 | 429,643 | 44.0 | 446,259 | 43.0 | |||||||||||||||
Multi-family properties | 104,359 | 10.7 | 94,651 | 9.7 | 84,074 | 8.1 | |||||||||||||||
Total commercial real estate secured | $ | 979,004 | 100.0 | % | $ | 975,680 | 100.0 | % | $ | 1,037,976 | 100.0 | % | |||||||||
13
CREDIT QUALITY (unaudited)
(dollars in thousands)
At or for the Three Months Ended | ||||||||||||
Sept. 30, 2012 | June 30, 2012 | Dec. 31, 2011 | ||||||||||
Nonperforming Assets: | ||||||||||||
Loans contractually past due 90 days or more but still accruing interest | $ | — | $ | — | $ | — | ||||||
Nonaccrual loans: | ||||||||||||
Commercial and industrial | 19,712 | 20,193 | 42,909 | |||||||||
Commercial real estate secured | 23,684 | 30,264 | 35,159 | |||||||||
Residential construction and land | 4,595 | 7,003 | 7,810 | |||||||||
Commercial construction and land | 4,194 | 6,679 | 5,279 | |||||||||
Consumer | 9,911 | 9,965 | 11,904 | |||||||||
Total nonaccrual loans | 62,096 | 74,104 | 103,061 | |||||||||
Total nonperforming loans | 62,096 | 74,104 | 103,061 | |||||||||
Other real estate owned and repossessed assets | 28,859 | 32,627 | 35,622 | |||||||||
Total nonperforming assets | $ | 90,955 | $ | 106,731 | $ | 138,683 | ||||||
Other Credit Quality Information: | ||||||||||||
Commercial criticized and classified loans (1) | ||||||||||||
Special mention | $ | 41,621 | $ | 46,839 | $ | 42,697 | ||||||
Substandard | 20,861 | 28,876 | 48,716 | |||||||||
Nonaccrual | 52,185 | 64,138 | 91,157 | |||||||||
Total commercial criticized and classified loans | $ | 114,667 | $ | 139,853 | $ | 182,570 | ||||||
Loans contractually past due 30 through 89 days and still accruing | $ | 5,808 | $ | 5,841 | $ | 7,409 | ||||||
Performing restructured loans | 17,394 | 13,937 | 14,176 | |||||||||
Recorded balance of impaired loans | 71,671 | 79,490 | 108,535 | |||||||||
Allowance for loan losses related to impaired loans | 11,748 | 17,462 | 32,044 | |||||||||
Allowance for Loan Losses Summary: | ||||||||||||
Allowance at beginning of period | $ | 86,992 | $ | 93,509 | $ | 105,805 | ||||||
Charge-offs, net of recoveries: | ||||||||||||
Commercial and commercial real estate | (5,288 | ) | (2,584 | ) | (10,898 | ) | ||||||
Real estate – construction and land | (2,353 | ) | (3,184 | ) | (1,498 | ) | ||||||
Consumer | (584 | ) | (849 | ) | (620 | ) | ||||||
Total net charge-offs | (8,225 | ) | (6,617 | ) | (13,016 | ) | ||||||
Provision for loan losses | 900 | 100 | 10,955 | |||||||||
Allowance at end of period | $ | 79,667 | $ | 86,992 | $ | 103,744 | ||||||
Key Credit Ratios: | ||||||||||||
Nonperforming loans to total loans | 1.77 | % | 2.29 | % | 3.31 | % | ||||||
Nonperforming assets to total loans plus repossessed property | 2.57 | % | 3.26 | % | 4.40 | % | ||||||
Nonperforming assets to total assets | 1.77 | % | 2.22 | % | 2.96 | % | ||||||
Annualized net charge-offs to average total loans | 1.32 | % | 1.51 | % | 2.37 | % | ||||||
Allowance to total loans at end of period (excluding loans held for sale) | 2.58 | % | 2.92 | % | 3.54 | % | ||||||
Allowance to nonperforming loans | 128.30 | % | 117.39 | % | 100.66 | % | ||||||
30 – 89 days past due to total loans | 0.17 | % | 0.18 | % | 0.24 | % | ||||||
(1) | Commercial criticized and classified loans excludes consumer loans. |
14
LOAN PORTFOLIO AGING (unaudited)
(dollars in thousands)
As of September 30, 2012 | |||||||||||||||||||||||||||
30-89 Days Past Due | >90 Days Past Due and Still Accruing | Nonaccrual | Current | Total Loans | % of Total Loans | Allowance for Loan Loss Allocation | |||||||||||||||||||||
Commercial and industrial | $ | — | $ | — | $ | 19,712 | $ | 1,517,604 | $ | 1,537,316 | 50 | % | $ | 36,358 | |||||||||||||
Commercial real estate secured: | |||||||||||||||||||||||||||
Commercial non-owner occupied: | |||||||||||||||||||||||||||
Retail strip centers or malls | — | — | 5,582 | 110,879 | 116,461 | 4 | % | 3,103 | |||||||||||||||||||
Office/mixed use property | — | — | 2,526 | 112,667 | 115,193 | 4 | % | 2,188 | |||||||||||||||||||
Commercial properties | — | — | 397 | 101,031 | 101,428 | 3 | % | 2,183 | |||||||||||||||||||
Specialized – other | — | — | 4,175 | 73,821 | 77,996 | 2 | % | 1,310 | |||||||||||||||||||
Other commercial properties | — | — | 207 | 25,564 | 25,771 | 1 | % | 487 | |||||||||||||||||||
Subtotal commercial non-owner occupied | — | — | 12,887 | 423,962 | 436,849 | 14 | % | 9,271 | |||||||||||||||||||
Commercial owner-occupied | — | — | 3,628 | 434,168 | 437,796 | 14 | % | 8,448 | |||||||||||||||||||
Multi-family properties | — | — | 7,169 | 97,190 | 104,359 | 4 | % | 2,926 | |||||||||||||||||||
Total commercial real estate secured | — | — | 23,684 | 955,320 | 979,004 | 32 | % | 20,645 | |||||||||||||||||||
Residential construction & land: | |||||||||||||||||||||||||||
Residential construction | — | — | 4,595 | 26,856 | 31,451 | 1 | % | 3,666 | |||||||||||||||||||
Land | — | — | — | 15,733 | 15,733 | 1 | % | 2,148 | |||||||||||||||||||
Total residential construction and land | — | — | 4,595 | 42,589 | 47,184 | 2 | % | 5,814 | |||||||||||||||||||
Commercial construction and land | — | — | 4,194 | 91,424 | 95,618 | 3 | % | 5,738 | |||||||||||||||||||
Lease receivables | — | — | — | 11,237 | 11,237 | — | % | 67 | |||||||||||||||||||
Total commercial loans | — | — | 52,185 | 2,618,174 | 2,670,359 | 87 | % | 68,622 | |||||||||||||||||||
Consumer loans | 5,808 | — | 9,911 | 399,615 | 415,334 | 13 | % | 11,045 | |||||||||||||||||||
Total loans | $ | 5,808 | $ | — | $ | 62,096 | $ | 3,017,789 | $ | 3,085,693 | 100 | % | $ | 79,667 | |||||||||||||
15
FUNDING LIABILITIES (unaudited)
(dollars in thousands)
The following table presents the distribution of the Company’s average deposit account balances for the periods indicated:
For the Quarter Ended | ||||||||||||||||||||
September 30, 2012 | June 30, 2012 | September 30, 2011 | ||||||||||||||||||
Average Balance | Percent of Deposits | Average Balance | Percent of Deposits | Average Balance | Percent of Deposits | |||||||||||||||
Noninterest-bearing deposits | $ | 1,081,568 | 33.0 | % | $ | 892,945 | 28.3 | % | $ | 646,946 | 22.1 | % | ||||||||
Interest-bearing deposits: | ||||||||||||||||||||
NOW accounts | 376,980 | 11.5 | 371,188 | 11.8 | 252,123 | 8.6 | ||||||||||||||
Savings deposits | 39,690 | 1.2 | 39,603 | 1.2 | 38,818 | 1.3 | ||||||||||||||
Money market accounts | 700,357 | 21.4 | 702,775 | 22.3 | 609,256 | 20.9 | ||||||||||||||
Brokered money market deposits | 32,365 | 1.0 | 18,386 | 0.6 | — | — | ||||||||||||||
Certificates of deposit | 560,962 | 17.1 | 596,784 | 18.9 | 734,302 | 25.1 | ||||||||||||||
Brokered certificates of deposit | 255,219 | 7.8 | 325,952 | 10.3 | 441,273 | 15.1 | ||||||||||||||
CDARS time deposits | 206,674 | 6.3 | 174,613 | 5.6 | 142,552 | 4.9 | ||||||||||||||
Public time deposits | 21,543 | 0.7 | 31,094 | 1.0 | 58,333 | 2.0 | ||||||||||||||
Total interest-bearing deposits | 2,193,790 | 67.0 | 2,260,395 | 71.7 | 2,276,657 | 77.9 | ||||||||||||||
Total deposits | $ | 3,275,358 | 100.0 | % | $ | 3,153,340 | 100.0 | % | $ | 2,923,603 | 100.0 | % | ||||||||
The following table sets forth the period end balances of total deposits as of each of the dates indicated below.
Sept. 30, 2012 | June 30, 2012 | Dec. 31, 2011 | ||||||||||
Noninterest-bearing deposits | $ | 1,274,610 | $ | 971,818 | $ | 802,480 | ||||||
Interest-bearing deposits: | ||||||||||||
NOW accounts | 417,774 | 339,156 | 324,877 | |||||||||
Savings accounts | 39,426 | 39,770 | 38,370 | |||||||||
Money market accounts | 710,562 | 710,754 | 657,500 | |||||||||
Brokered money market deposits | 17,229 | 48,016 | — | |||||||||
Certificates of deposit | 600,682 | 570,557 | 694,712 | |||||||||
Brokered certificates of deposit | 230,802 | 301,748 | 407,068 | |||||||||
CDARS time deposits | 241,001 | 181,371 | 144,118 | |||||||||
Public time deposits | 26,596 | 21,420 | 54,086 | |||||||||
Total interest-bearing deposits | 2,284,072 | 2,212,792 | 2,320,731 | |||||||||
Total deposits | $ | 3,558,682 | $ | 3,184,610 | $ | 3,123,211 | ||||||
16
RECONCILIATION OF U.S. GAAP FINANCIAL MEASURES (unaudited)
(dollars in thousands)
The following, as of the dates indicated, reconciles the income before income taxes to pre-tax, pre-provision operating earnings.
For the Three Months Ended | ||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | ||||||||||||||||
Income before income taxes | $ | 27,647 | $ | 24,181 | $ | 15,830 | $ | 9,003 | $ | 9,758 | ||||||||||
Add back (subtract): | ||||||||||||||||||||
Credit costs: | ||||||||||||||||||||
Provision for loan losses | 900 | 100 | 7,350 | 10,955 | 16,240 | |||||||||||||||
Nonperforming asset expense | 613 | 828 | 694 | 1,622 | (1,648 | ) | ||||||||||||||
Credit costs subtotal | 1,513 | 928 | 8,044 | 12,577 | 14,592 | |||||||||||||||
Other: | ||||||||||||||||||||
Gain on sales of investment securities | — | (3,020 | ) | (956 | ) | (6 | ) | (4,938 | ) | |||||||||||
Derivative termination fees | — | — | — | — | 896 | |||||||||||||||
Early extinguishment of debt | 3,670 | 2,987 | 1,001 | — | 3,444 | |||||||||||||||
Impairment of investment securities | — | — | 125 | 190 | — | |||||||||||||||
Other subtotal | 25,076 | (33 | ) | 170 | 184 | (598 | ) | |||||||||||||
Pre-tax, pre-provision operating earnings | $ | 32,830 | $ | 25,076 | $ | 24,044 | $ | 21,764 | $ | 23,752 | ||||||||||
The following, as of the dates indicated, details the components of revenue.
For the Three Months Ended | ||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | ||||||||||||||||
Net interest income | $ | 37,196 | $ | 36,378 | $ | 35,802 | $ | 35,266 | $ | 34,718 | ||||||||||
Noninterest income | 47,250 | 31,889 | 23,946 | 16,538 | 19,432 | |||||||||||||||
Add back (subtract): | ||||||||||||||||||||
Gain on sales of investment securities | — | (3,020 | ) | (956 | ) | (6 | ) | (4,938 | ) | |||||||||||
Derivative termination fees | — | — | — | — | 896 | |||||||||||||||
Impairment of investment securities | — | — | 125 | 190 | — | |||||||||||||||
Revenue | $ | 84,446 | $ | 65,247 | $ | 58,917 | $ | 51,988 | $ | 50,108 | ||||||||||
The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practice within the banking industry. Management uses certain non-GAAP financial measures to evaluate the Company’s financial performance and has provided the non-GAAP measures of pre-tax, pre-provision operating earnings and of revenue. In the pre-tax, pre-provision operating earnings non-GAAP financial measure, the provision for loan losses, nonperforming asset expense and certain non-recurring items, such as gains and losses on investment securities, derivative termination fees, early extinguishment of debt and impairment of investment securities are excluded from the determination of operating results. The non-GAAP measure of revenue is calculated as the sum of net interest income and noninterest income adjusted by investment securities gains and losses, derivative termination fees and impairment of investment securities. Management believes that these measures are useful because they provide a more comparable basis for evaluating financial performance from period to period.
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