Attached files
| file | filename |
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| 8-K - 8-K - TAYLOR CAPITAL GROUP INC | tayc2013q1earningsrelase.htm |
| EX-99.2 - POWERPOINT PRESENTATION - TAYLOR CAPITAL GROUP INC | a1q13presentationfinal.htm |
Investor Relations and Media Contact: | |
Berry Allen | |
(847) 653-7375 | |
Taylor Capital Group Reports Net Income of
$17.3 Million for the First Quarter of 2013
CHICAGO, IL - April 19, 2013 - Taylor Capital Group, Inc. (the “Company”) (NASDAQ: TAYC), the parent company of Cole Taylor Bank (the “Bank”), today reported results for the first quarter of 2013.
Net income for the quarter was $17.3 million, compared to $21.5 million for the fourth quarter of 2012. Net income applicable to common stockholders for the quarter was $13.6 million, or $0.44 per diluted share, compared to $19.7 million, or $0.65 per diluted share, for the fourth quarter of 2012.
"Our results for the first quarter of 2013 reflect the continued successful execution of our diversification strategy,” said Mark A. Hoppe, President and Chief Executive Officer of the Company. “Commercial loans grew by 10% over the past twelve months in extremely competitive markets. Our national equipment financing business, which we launched last summer, has grown to more than $100 million in loans and leases outstanding and recently opened two new offices. Asset based lending grew by $23 million during the quarter and we have grown our commercial real estate loans, as expected, with selective reentry into that market after repositioning our real estate portfolio over the last few years.”
“Overall, we are very pleased with the results for the first quarter as our pre-tax, pre-provision operating earnings of $29.2 million and our nearly 15% return on common equity are both among the highest in the last five years,” Hoppe continued. “While our results this quarter were clearly impacted by the decrease in mortgage banking revenue, it was not a surprise that the historically high mortgage origination margins seen in the second half of last year would not be sustained. Nevertheless, we are confident about the long term prospects for our mortgage business and continue to invest having recently expanded to originate loans in 41 states. Meanwhile, we remain disciplined in our balanced and focused approach on credit quality. We have a great middle market customer base, which provides a solid foundation to continue growing in spite of a competitive market. In conclusion, we are excited about our opportunities for future growth and believe our strong capital ratios, experienced team of bankers and diversified business lines position us extremely well for the future.”
FIRST QUARTER 2013 HIGHLIGHTS - COMPARISON TO FOURTH QUARTER 2012
Reported earnings per diluted share of $0.44 in the first quarter of 2013, down from $0.65 per diluted share in the fourth quarter of 2012
• | Revenue(1) was $80.4 million for the first quarter of 2013, down $10.6 million or 11.6% from the fourth quarter of 2012 |
• | Net interest margin on a tax equivalent basis declined by 10 basis points to 3.18% for the first quarter of 2013 from 3.28% for the fourth quarter of 2012 |
• | Mortgage banking revenue was $32.0 million for the first quarter of 2013, down $12.3 million or 27.7% from the fourth quarter of 2012 |
• | Total commercial loans grew $60.4 million or 2.2% from December 31, 2012 |
• | Period end core deposits (excluding time and brokered deposits) grew by $390.5 million or 15.4% in the first quarter of 2013 |
• | The Company's Tier I Risk Based Capital ratio was 14.45%, while its Total Risk Based Capital ratio was 16.50% and its Tier I Capital to Average Assets leverage ratio was 10.91% as of March 31, 2013 |
• | Return on Average Common Equity was 14.82% for the first quarter of 2013 |
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Credit quality indicators were mixed as compared to the fourth quarter of 2012
• | Nonperforming loans were $71.4 million and 2.22% of total loans at March 31, 2013, up from $59.5 million and 1.88% of total loans at December 31, 2012 |
• | At March 31, 2013, commercial criticized and classified loans(2) totaled $138.5 million, up from $131.6 million at December 31, 2012 |
• | The allowance for loan losses as a percent of nonperforming loans was 115.05% at March 31, 2013, compared to 138.05% at December 31, 2012 |
• | Credit costs(3), however, were $0.9 million for the first quarter of 2013, down from $4.0 million for the fourth quarter of 2012 |
FIRST QUARTER 2013 - COMPARISON TO FIRST QUARTER 2012
Reported earnings per diluted share of $0.44 in the first quarter of 2013, up from $0.26 per diluted share in the first quarter of 2012
• | Revenue increased to $80.4 million for the first quarter of 2013, up $21.5 million or 36.5% from the first quarter of 2012 |
• | Pre-tax, pre-provision operating earnings(4) increased to $29.2 million for the first quarter of 2013, up $5.2 million or 21.5% as compared to the first quarter of 2012 |
• | Total commercial loans increased to $2.82 billion at March 31, 2013, up $257.5 million or 10.1% from March 31, 2012 |
• | Core deposits grew to $2.93 billion at March 31, 2013 up $1.10 billion or 60.4% from March 31, 2012 |
• | Mortgage origination volume was $1.91 billion for the first quarter of 2013, up $1.0 billion or 113% from the first quarter of 2012 |
• | At March 31, 2013, commercial criticized and classified loans totaled $138.5 million, down from $161.0 million at March 31, 2012 |
• | Return on Average Common Equity was 14.82% for the first quarter of 2013 up from 10.15% for the first quarter of 2012 |
FIRST QUARTER 2013 PERFORMANCE OVERVIEW
Results of Operations - Comparisons to Fourth Quarter 2012
Net income for the first quarter of 2013 was $17.3 million, compared to net income of $21.5 million for the fourth quarter of 2012, a decrease of 19.5%. Net income applicable to common stockholders was $13.6 million, or $0.44 per diluted share, for the first quarter of 2013, compared to net income applicable to common stockholders of $19.7 million, or $0.65 per diluted share, for the fourth quarter of 2012.
Income before income taxes was $28.3 million for the first quarter of 2013, compared to $36.0 million for the fourth quarter of 2012, a decrease of 21.4%.
Pre-tax, pre-provision operating earnings totaled $29.2 million for the first quarter of 2013, compared to $38.6 million for the fourth quarter of 2012, a decrease of 24.4%.
Revenue
Revenue totaled $80.4 million for the first quarter of 2013, compared to $91.0 million for the fourth quarter of 2012, a decrease of 11.6%.
Net interest income was $40.7 million for the first quarter of 2013, essentially flat as compared to $40.5 million for the fourth quarter of 2012. The slight increase in net interest income was due to an increase in investment securities and lower deposit funding costs partially offset by lower yields on commercial loans. The tax equivalent net interest margin was down 10 basis points, from 3.28% for the fourth quarter of 2012 to 3.18% for the first quarter of 2013, primarily as a result of lower yields on commercial loans. Yields on commercial loans decreased in the quarter due to competitive pricing pressure on new loans and changes in the mix of the portfolio.
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Noninterest income, excluding investment security gains and losses, was $39.7 million for the first quarter of 2013, compared to $50.5 million for the fourth quarter of 2012 a decrease of 21.4%. The decrease was primarily due to a $12.3 million decrease in mortgage banking revenue, partially offset by increased customer swap fees and other derivative income. The decrease in mortgage banking revenue, from $44.3 million in the fourth quarter of 2012 to $32.0 million in the first quarter of 2013, was primarily the result of decreased margins from their historically high levels on mortgage originations and sales in the secondary market and a 2.0% decline in mortgage origination volume in the first quarter. Mortgage originations were $1.91 billion in the first quarter of 2013, down from $1.95 billion in the fourth quarter of 2012.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and early extinguishment of debt expense, was $51.2 million for the first quarter of 2013, compared to $52.4 million for the fourth quarter of 2012, a decrease of 2.3%. The decrease of $1.2 million was primarily the result of a net $2.0 million decrease in salaries and employee benefits comprised of a $4.9 million decrease in performance-based incentive compensation expense partially offset by a $2.9 million increase in salary and benefits costs. The increase in salary and benefits cost is primarily related to an increase in headcount at Cole Taylor Mortgage and the seasonal impact of certain payroll taxes. The additional employees at Cole Taylor Mortgage were mostly in the retail origination channels as we continue to invest in the growth of those channels and the diversification of our business.
Results of Operations - Comparisons to First Quarter 2012
Net income for the first quarter of 2013 was $17.3 million, compared to net income of $9.5 million for the first quarter of 2012, an increase of 82.1%. Net income applicable to common stockholders was $13.6 million, or $0.44 per diluted share, for the first quarter of 2013, compared to net income applicable to common stockholders of $7.7 million, or $0.26 per diluted share, for the first quarter of 2012.
Income before income taxes was $28.3 million for the first quarter of 2013, compared to $15.8 million for the first quarter of 2012, an increase of 79.1%.
Pre-tax, pre-provision operating earnings totaled $29.2 million for the first quarter of 2013, as compared to $24.0 million in the first quarter of 2012, an increase of 21.7%.
Revenue
Revenue totaled $80.4 million for the first quarter of 2013, compared to $58.9 million in the first quarter of 2012, an increase of 36.5%.
Net interest income was $40.7 million for the first quarter of 2013, compared to $35.8 million for the first quarter of 2012, an increase of 13.7%. The increase was primarily due to growth in loan balances, lower deposit funding costs and the repayment of the Bank's $60 million of 10% subordinated notes.
Noninterest income, excluding investment security gains and losses, was $39.7 million for the first quarter of 2013, compared to $23.1 million for the first quarter of 2012, an increase of 71.9%. The increase was primarily due to a $14.5 million increase in mortgage banking revenue. The increase in mortgage banking revenue was in both originations and servicing. Mortgage loan origination income increased $10.1 million in the period as mortgage loan origination volume increased 113.2% to $1.91 billion. Net mortgage servicing revenue increased $4.3 million in the period as we increased the mortgage servicing book which also assists in diversification from the mortgage origination channel revenue.
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Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and early extinguishment of debt expense, was $51.2 million for the first quarter of 2013, compared to $34.9 million in the first quarter of 2012, an increase of 46.7%. The increase of $16.3 million is primarily due to a $10.4 million increase in salaries and employee benefits due to total headcount growth as a result of increased loan origination volumes at Cole Taylor Mortgage.
Credit Quality
Loan Portfolio Performance and Credit Quality
Total commercial criticized and classified loans were $138.5 million at March 31, 2013, compared to $131.6 million at December 31, 2012 and $161.0 million at March 31, 2012. Despite the increase in commercial criticized and classified loans this quarter, which was primarily due to a limited number of relationships, the overall trend in migration into these categories is down over the last twelve months. In addition, consistent with disclosures in our 2012 Form 10-K, migrations of loans through commercial and criticized status this quarter was expected to have a nominal impact on the allowance for loan losses. The allowance for loan losses decreased $41,000, and the provision for loan losses was $300,000.
Nonperforming loans were $71.4 million at March 31, 2013, compared to $59.5 million at December 31, 2012, and $93.5 million at March 31, 2012. The overall decrease in nonperforming loans compared to March 31, 2012 is reflective of the continued focus to strengthen credit quality combined with an active resolution process.
Other real estate owned (“OREO”) and repossessed assets were $27.2 million at March 31, 2013, compared to $24.3 million at December 31, 2012 and $36.9 million at March 31, 2012. The increase in OREO assets compared to the prior quarter was due to net additions into OREO exceeding reductions from sales.
Total nonperforming assets were $98.6 million at March 31, 2013, compared to $83.8 million at December 31, 2012 and $130.4 million at March 31, 2012. Nonperforming assets to total assets were 1.71% at March 31, 2013, compared to 1.44% at December 31, 2012 and 2.78% at March 31, 2012. While the ratio of nonperforming assets to total assets was up 27 basis points from December 31, 2012, it was down over 100 basis points from March 31, 2012.
Allowance and Provision for Loan Losses
The allowance for loan losses was $82.2 million at both March 31, 2013 and December 31, 2012 and $93.5 million at March 31, 2012. The allowance for loan losses as a percent of nonperforming loans was 115.05% at March 31, 2013, as compared to 138.05% at December 31, 2012 and 100.01% at March 31, 2012.
The provision for loan losses was $300,000 for the first quarter of 2013, compared to $1.2 million for the fourth quarter of 2012 and $7.4 million in the first quarter of 2012. The decrease in the loan loss provision reflects volume and mix changes in the loan portfolio and a low level of net charge-offs.
Balance Sheet
Assets
Total assets at March 31, 2013 were $5.77 billion, compared to $5.80 billion at December 31, 2012.
Investment securities were $1.43 billion at March 31, 2013, compared to $1.27 billion at December 31, 2012. The increase of $162.2 million was primarily related to an increase in certain tax exempt investment securities with attractive tax equivalent yields.
Loans held for sale were $668.9 million at March 31, 2013 down $269.4 million from December 31, 2012. The decrease is primarily the result of the timing of mortgage loan sales at the end of last year combined with slightly lower mortgage origination volume this quarter.
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Net loans at March 31, 2013 were $3.14 billion, up $54.5 million from $3.09 billion at December 31, 2012. Commercial and Industrial loans were $1.58 billion at March 31, 2013, down $13.3 million from $1.59 billion at December 31, 2012. Commercial real estate secured loans were $1.01 billion at March 31, 2013 up $47.3 million from December 31, 2012 as several new customer relationships were established primarily in the commercial owner-occupied area. Commercial construction loans were $121.2 million at March 31, 2013, an increase of $17.5 million from $103.7 million at December 31, 2012. In 2012, we largely completed the repositioning of the commercial real estate loan portfolio and are selectively reentering certain commercial real estate and construction markets. Consumer loans were $411.9 million at March 31, 2013 down $4.7 million from December 31, 2012.
Mortgage servicing rights increased $27.7 million in the first quarter to $106.6 million as of March 31, 2013. As part of our strategy to diversify the revenue streams for Cole Taylor Mortgage, we continue to invest in mortgage servicing and retain servicing of most mortgage loans we originate. The unpaid principal balance of loans serviced was $10.51 billion as of March 31, 2013.
Liabilities and Stockholders' Equity
Total liabilities at March 31, 2013 were $5.20 billion, as compared to $5.24 billion at December 31, 2012.
Total deposits were $3.79 billion at March 31, 2013, compared to $3.53 billion at December 31, 2012. The increase was primarily due to an increase in both noninterest-bearing deposits and interest-bearing NOW accounts associated with on-going deposit raising efforts and the seasonal timing of certain public fund deposits.
Average total deposits for the first quarter of 2013 increased by $218.6 million or 6.2% to $3.76 billion as compared to the fourth quarter of 2012, primarily due to the previously mentioned increase in core deposits partially offset by the continued decline in time deposits.
Short term borrowings decreased $326.4 million in the first quarter to $1.14 billion as of March 31, 2013, due to reduced funding needs primarily as a result of a reduction in the held for sale loan portfolio.
Total stockholders' equity increased from $559.6 million at December 31, 2012 to $573.3 million at March 31, 2013, primarily due to retaining net income available to common stockholders in the first quarter of 2013 partially offset by a decrease in accumulated other comprehensive income due to a reduction in the fair market value on available-for-sale securities.
Capital
At March 31, 2013, the Company's Tier I Risk Based Capital ratio was 14.45%, while its Total Risk Based Capital ratio was 16.50% and its Tier I Capital to Average Assets leverage ratio was 10.91%.
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.
Conference Call and Slide Presentation
A conference call hosted by Taylor Capital Group President & CEO Mark A. Hoppe will be held on Friday, April 19, 2013 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.
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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 April 19, 2013 through May 20, 2013 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 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 $5.8 billion as of March 31, 2013. Cole Taylor specializes in serving the banking needs of closely held businesses and the people who own and manage them. With its national businesses, the Bank also provides asset-based lending, residential mortgage lending and commercial equipment leasing 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 less investment securities gains and losses 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, excluding 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 revenue and pre-tax, pre-provision operating earnings 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, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities in 2013 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:
• | We may be materially and adversely affected by the highly regulated environment in which we operate. |
• | Increasing dependence on our mortgage business may increase volatility in our consolidated revenues and earnings, and our residential mortgage lending profitability could be significantly reduced if we are not able to originate and sell mortgage loans at profitable margins. |
• | Changes in interest rates may change the value of our mortgage servicing rights ("MSRs") portfolio, which may increase the volatility of our earnings. |
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• | Certain hedging strategies that we use to manage investment in MSRs, mortgage loans held for sale and interest rate lock commitments 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 mortgage loan repurchase reserve for losses could be insufficient. |
• | A significant increase in certain loan balances associated with our mortgage business may result in liquidity risk related to the funding of these loans. |
• | We are subject to interest rate risk, including interest rate fluctuations that could have a material adverse effect on us. |
• | Competition from financial institutions and other financial services providers may adversely affect our growth and profitability and have a material adverse effect on us. |
• | Our business is subject to the conditions of the economies in which we operate and continued weakness in those economies and the real estate markets may materially and 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 materially and adversely affect us. |
• | The preparation of our consolidated financial statements requires us to make estimates and judgments, including the use of models, which are subject to an inherent degree of uncertainty and which may differ from actual results. |
• | We must manage credit risk and, if we are unable to do so, our allowance for loan losses may prove to be insufficient to absorb losses in our loan portfolio, which could have a material adverse effect on us. |
• | 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 repeal of federal prohibitions on payment of interest on business demand deposits could increase our interest expense and have a material adverse effect on us. |
• | Changes in certain ratings related to us or our credit could increase our financing costs or make it more difficult for us to obtain funding or capital on commercially acceptable terms. |
• | As a bank holding company, our sources of funds are limited. |
• | 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 have counterparty risk and therefore we may be materially and adversely affected by the soundness of other financial institutions. |
• | We are subject to lending concentration risks. |
• | We are subject to mortgage asset concentration risks. |
• | 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, new products and services or new customer relationships 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 jointly proposed (and subsequently indefinitely delayed) by the U.S. 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. |
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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, 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 8, 2013, Current Reports on Form 8-K and other filings we have made with the SEC. 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) | |||||||
March 31, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 135,880 | $ | 166,385 | |||
Investment securities | 1,429,971 | 1,267,757 | |||||
Loans held for sale | 668,937 | 938,379 | |||||
Loans, net of allowance for loan losses of $82,150 at March 31, 2013 and $82,191 at December 31, 2012 | 3,140,644 | 3,086,112 | |||||
Premises, leasehold improvements and equipment, net | 19,193 | 16,062 | |||||
Investment in Federal Home Loan Bank and Federal Reserve Bank stock | 64,976 | 74,950 | |||||
Mortgage servicing rights | 106,576 | 78,917 | |||||
Other real estate and repossessed assets, net | 27,218 | 24,259 | |||||
Other assets | 177,037 | 149,589 | |||||
Total assets | $ | 5,770,432 | $ | 5,802,410 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 1,326,483 | $ | 1,179,724 | |||
Interest-bearing | 2,467,911 | 2,348,618 | |||||
Total deposits | 3,794,394 | 3,528,342 | |||||
Accrued interest, taxes and other liabilities | 146,053 | 131,473 | |||||
Short-term borrowings | 1,136,586 | 1,463,019 | |||||
Long-term borrowings | — | — | |||||
Junior subordinated debentures | 86,607 | 86,607 | |||||
Subordinated notes, net | 33,460 | 33,366 | |||||
Total liabilities | 5,197,100 | 5,242,807 | |||||
Stockholders' equity: | |||||||
Preferred stock, Series A | 100,000 | 100,000 | |||||
Preferred stock, Series B | 104,275 | 103,813 | |||||
Nonvoting preferred stock | 13 | 13 | |||||
Common stock | 304 | 302 | |||||
Surplus | 415,975 | 412,391 | |||||
Accumulated deficit | (49,941 | ) | (63,537 | ) | |||
Accumulated other comprehensive income, net | 32,291 | 36,206 | |||||
Treasury stock | (29,585 | ) | (29,585 | ) | |||
Total stockholders' equity | 573,332 | 559,603 | |||||
Total liabilities and stockholders' equity | $ | 5,770,432 | $ | 5,802,410 | |||
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CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended | |||||||||||
March 31, 2013 | Dec 31, 2012 | March 31, 2012 | |||||||||
Interest income: | |||||||||||
Interest and fees on loans | $ | 37,629 | $ | 38,696 | $ | 35,283 | |||||
Interest and dividends on investment securities: | |||||||||||
Taxable | 8,617 | 7,974 | 10,318 | ||||||||
Tax-exempt | 1,427 | 1,013 | 663 | ||||||||
Interest on cash equivalents | 1 | 1 | 3 | ||||||||
Total interest income | 47,674 | 47,684 | 46,267 | ||||||||
Interest expense: | |||||||||||
Deposits | 4,264 | 4,352 | 5,411 | ||||||||
Short-term borrowings | 420 | 492 | 563 | ||||||||
Long-term borrowings | — | 11 | 500 | ||||||||
Junior subordinated debentures | 1,443 | 1,457 | 1,472 | ||||||||
Subordinated notes | 864 | 862 | 2,519 | ||||||||
Total interest expense | 6,991 | 7,174 | 10,465 | ||||||||
Net interest income | 40,683 | 40,510 | 35,802 | ||||||||
Provision for loan losses | 300 | 1,200 | 7,350 | ||||||||
Net interest income after provision for loan losses | 40,383 | 39,310 | 28,452 | ||||||||
Noninterest income: | |||||||||||
Service charges | 3,491 | 3,461 | 3,291 | ||||||||
Mortgage banking revenue | 32,030 | 44,285 | 17,530 | ||||||||
Gain on sales of investment securities | 1 | 1,488 | 956 | ||||||||
Other derivative income | 1,560 | 1,156 | 561 | ||||||||
Other noninterest income | 2,637 | 1,572 | 1,608 | ||||||||
Total noninterest income | 39,719 | 51,962 | 23,946 | ||||||||
Noninterest expense: | |||||||||||
Salaries and employee benefits | 34,028 | 35,991 | 23,637 | ||||||||
Occupancy of premises, furniture and equipment | 3,305 | 3,426 | 2,790 | ||||||||
Nonperforming asset expense | 559 | 2,816 | 694 | ||||||||
Early extinguishment of debt | — | 63 | 1,001 | ||||||||
FDIC assessment | 2,024 | 1,830 | 1,702 | ||||||||
Legal fees, net | 858 | 780 | 856 | ||||||||
Loan expense, net | 2,371 | 2,410 | 1,118 | ||||||||
Outside services | 2,496 | 1,545 | 579 | ||||||||
Other noninterest expense | 6,114 | 6,423 | 4,191 | ||||||||
Total noninterest expense | 51,755 | 55,284 | 36,568 | ||||||||
Income before income taxes | 28,347 | 35,988 | 15,830 | ||||||||
Income tax expense | 11,090 | 14,530 | 6,361 | ||||||||
Net income | 17,257 | 21,458 | 9,469 | ||||||||
Preferred dividends and discounts | (3,661 | ) | (1,765 | ) | (1,742 | ) | |||||
Net income applicable to common stockholders | $ | 13,596 | $ | 19,693 | $ | 7,727 | |||||
Basic income per common share | $ | 0.45 | $ | 0.66 | $ | 0.26 | |||||
Diluted income per common share | 0.44 | 0.65 | 0.26 | ||||||||
Weighted-average common shares outstanding | 28,598,194 | 28,515,040 | 28,071,406 | ||||||||
Weighted-average diluted common shares outstanding | 28,962,425 | 28,895,719 | 28,622,798 | ||||||||
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SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(dollars in thousands)
Unaudited
2013 | 2012 | ||||||||||||||||||
First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||
Condensed Income Data: | |||||||||||||||||||
Net interest income | $ | 40,683 | $ | 40,510 | $ | 37,196 | $ | 36,378 | $ | 35,802 | |||||||||
Provision for loan losses | 300 | 1,200 | 900 | 100 | 7,350 | ||||||||||||||
Total noninterest income | 39,719 | 51,962 | 47,250 | 31,889 | 23,946 | ||||||||||||||
Total noninterest expense | 51,755 | 55,284 | 55,899 | 43,986 | 36,568 | ||||||||||||||
Income before income taxes | 28,347 | 35,988 | 27,647 | 24,181 | 15,830 | ||||||||||||||
Income tax expense | 11,090 | 14,530 | 10,898 | 9,956 | 6,361 | ||||||||||||||
Net income | 17,257 | 21,458 | 16,749 | 14,225 | 9,469 | ||||||||||||||
Preferred dividends and discounts | (3,661 | ) | (1,765 | ) | (1,757 | ) | (1,748 | ) | (1,742 | ) | |||||||||
Net income applicable to common stockholders | $ | 13,596 | $ | 19,693 | $ | 14,992 | $ | 12,477 | $ | 7,727 | |||||||||
Non-GAAP Measures of Performance: (1) | |||||||||||||||||||
Revenue | $ | 80,401 | $ | 90,984 | $ | 84,446 | $ | 65,247 | $ | 58,917 | |||||||||
Pre-tax, pre-provision operating earnings | 29,205 | 38,579 | 32,830 | 25,076 | 24,044 | ||||||||||||||
Per Share Data: | |||||||||||||||||||
Basic earnings per common share | $ | 0.45 | $ | 0.66 | $ | 0.50 | $ | 0.42 | $ | 0.26 | |||||||||
Diluted earnings per common share | 0.44 | 0.65 | 0.49 | 0.41 | 0.26 | ||||||||||||||
Tangible book value per common share | 12.69 | 12.36 | 11.97 | 11.66 | 11.06 | ||||||||||||||
Weighted average common shares-basic | 28,598,194 | 28,515,040 | 28,430,871 | 28,158,304 | 28,071,406 | ||||||||||||||
Weighted average common shares-diluted | 28,962,425 | 28,895,719 | 28,931,235 | 29,093,447 | 28,622,798 | ||||||||||||||
Common shares outstanding-end of period | 29,088,735 | 28,792,042 | 28,756,717 | 28,602,394 | 28,428,015 | ||||||||||||||
Performance Ratios (annualized): | |||||||||||||||||||
Return on average assets | 1.22 | % | 1.59 | % | 1.33 | % | 1.17 | % | 0.81 | % | |||||||||
Return on average common equity | 14.82 | % | 22.40 | % | 17.62 | % | 15.86 | % | 10.15 | % | |||||||||
Efficiency ratio (2) | 64.37 | % | 60.76 | % | 66.19 | % | 67.41 | % | 62.07 | % | |||||||||
Average Balance Sheet Data: (3) | |||||||||||||||||||
Total assets | $ | 5,642,192 | $ | 5,389,566 | $ | 5,026,706 | $ | 4,867,810 | $ | 4,660,021 | |||||||||
Investments | 1,360,213 | 1,213,422 | 1,230,953 | 1,292,129 | 1,281,445 | ||||||||||||||
Cash equivalents | 555 | 985 | 304 | 709 | 960 | ||||||||||||||
Loans held for sale | 715,502 | 689,787 | 443,287 | 329,878 | 192,037 | ||||||||||||||
Loans | 3,177,836 | 3,090,248 | 2,997,562 | 2,947,233 | 2,937,185 | ||||||||||||||
Total interest-earning assets | 5,254,106 | 4,994,442 | 4,672,106 | 4,569,949 | 4,411,627 | ||||||||||||||
Interest-bearing deposits | 2,424,772 | 2,282,290 | 2,193,790 | 2,260,395 | 2,286,294 | ||||||||||||||
Borrowings | 1,219,977 | 1,241,905 | 1,224,884 | 1,214,391 | 1,151,240 | ||||||||||||||
Total interest-bearing liabilities | 3,644,749 | 3,524,195 | 3,418,674 | 3,474,786 | 3,437,534 | ||||||||||||||
Noninterest-bearing deposits | 1,333,958 | 1,257,811 | 1,081,568 | 892,945 | 753,995 | ||||||||||||||
Total stockholders' equity | 570,652 | 500,727 | 441,133 | 417,261 | 406,559 | ||||||||||||||
Tax Equivalent Net Interest Margin: | |||||||||||||||||||
Net interest income as stated | $ | 40,683 | $ | 40,510 | $ | 37,196 | $ | 36,378 | $ | 35,802 | |||||||||
Add: Tax equivalent adjust. - investment (4) | 769 | 545 | 395 | 372 | 357 | ||||||||||||||
Tax equivalent adjust - loans (4) | 29 | 30 | 30 | 32 | 32 | ||||||||||||||
Tax equivalent net interest income | $ | 41,481 | $ | 41,085 | $ | 37,621 | $ | 36,782 | $ | 36,191 | |||||||||
Net interest margin without tax adjust. | 3.12 | % | 3.23 | % | 3.17 | % | 3.20 | % | 3.26 | % | |||||||||
Net interest margin - tax equivalent (4) | 3.18 | % | 3.28 | % | 3.21 | % | 3.23 | % | 3.29 | % | |||||||||
Yield on earning assets without tax adjust. | 3.66 | % | 3.81 | % | 3.94 | % | 4.04 | % | 4.21 | % | |||||||||
Yield on earning assets - tax equivalent (4) | 3.72 | % | 3.85 | % | 3.98 | % | 4.08 | % | 4.25 | % | |||||||||
Yield on interest-bearing liabilities | 0.78 | % | 0.81 | % | 1.05 | % | 1.11 | % | 1.22 | % | |||||||||
Net interest spread without tax adjust. | 2.88 | % | 3.00 | % | 2.89 | % | 2.93 | % | 2.99 | % | |||||||||
Net interest spread - tax equivalent (4) | 2.94 | % | 3.04 | % | 2.93 | % | 2.97 | % | 3.02 | % | |||||||||
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
March 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||||||
Condensed Balance Sheet Data: | |||||||||||||||||||||||
Investment securities | $ | 1,429,971 | $ | 1,267,757 | $ | 1,212,139 | $ | 1,240,405 | $ | 1,299,572 | $ | 1,279,676 | |||||||||||
Loans held for sale | 668,937 | 938,379 | 422,621 | 255,693 | 210,040 | 185,984 | |||||||||||||||||
Loans | 3,222,794 | 3,168,303 | 3,085,693 | 2,981,827 | 2,903,797 | 2,928,299 | |||||||||||||||||
Allowance for loan losses | 82,150 | 82,191 | 79,667 | 86,992 | 93,509 | 103,744 | |||||||||||||||||
Total assets | 5,770,432 | 5,802,410 | 5,136,975 | 4,797,101 | 4,695,069 | 4,685,810 | |||||||||||||||||
Total deposits | 3,794,394 | 3,528,342 | 3,558,682 | 3,184,610 | 2,989,639 | 3,123,211 | |||||||||||||||||
Total borrowings | 1,256,653 | 1,582,992 | 1,010,315 | 1,097,836 | 1,186,115 | 1,091,888 | |||||||||||||||||
Total stockholders' equity | 573,332 | 559,603 | 447,574 | 436,408 | 416,766 | 409,528 | |||||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||
Nonperforming loans | $ | 71,404 | $ | 59,537 | $ | 62,096 | $ | 74,104 | $ | 93,498 | $ | 103,061 | |||||||||||
Nonperforming assets | 98,622 | 83,796 | 90,955 | 106,731 | 130,439 | 138,683 | |||||||||||||||||
Allowance for loan losses to total loans (excluding loans held for sale) | 2.55 | % | 2.59 | % | 2.58 | % | 2.92 | % | 3.22 | % | 3.54 | % | |||||||||||
Allowance for loan losses to nonperforming loans | 115.05 | % | 138.05 | % | 128.30 | % | 117.39 | % | 100.01 | % | 100.66 | % | |||||||||||
Nonperforming assets to total loans plus repossessed property (1) | 3.03 | % | 2.62 | % | 2.92 | % | 3.54 | % | 4.44 | % | 4.68 | % | |||||||||||
Capital Resources (Taylor Capital Group, Inc.): | |||||||||||||||||||||||
Total Capital (to Risk Weighted Assets) | 16.50 | % | 16.27 | % | 14.41 | % | 16.03 | % | 15.46 | % | 14.72 | % | |||||||||||
Tier I Capital (to Risk Weighted Assets) | 14.45 | % | 14.21 | % | 12.29 | % | 12.59 | % | 11.95 | % | 11.22 | % | |||||||||||
Leverage (to average assets) | 10.91 | % | 11.14 | % | 9.43 | % | 9.41 | % | 9.08 | % | 8.84 | % | |||||||||||
Total Capital | $ | 701,381 | $ | 685,998 | $ | 553,977 | $ | 579,618 | $ | 541,423 | $ | 517,706 | |||||||||||
Tier I Capital | 614,382 | 599,504 | 472,221 | 455,144 | 418,460 | 394,630 | |||||||||||||||||
(1) During the fourth quarter of 2012, the Company revised it methodology for calculating this metric to exclude loans held for sale from total loans. Prior period ratios have been adjusted to reflect this change.
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:
March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||||||||||||
Loans | Balance | Percent of Gross Loans | Balance | Percent of Gross Loans | Balance | Percent of Gross Loans | |||||||||||||||
Commercial and industrial | $ | 1,577,241 | 48.8 | % | $ | 1,590,587 | 50.1 | % | $ | 1,437,379 | 49.5 | % | |||||||||
Commercial real estate secured | 1,013,252 | 31.4 | 965,978 | 30.4 | 963,300 | 33.2 | |||||||||||||||
Residential construction and land | 40,620 | 1.3 | 45,903 | 1.5 | 56,780 | 2.0 | |||||||||||||||
Commercial construction and land | 121,212 | 3.7 | 103,715 | 3.3 | 102,404 | 3.5 | |||||||||||||||
Lease receivables | 65,028 | 2.0 | 50,803 | 1.6 | — | — | |||||||||||||||
Total commercial loans | 2,817,353 | 87.2 | 2,756,986 | 86.9 | 2,559,863 | 88.2 | |||||||||||||||
Consumer | 411,905 | 12.8 | 416,635 | 13.1 | 343,934 | 11.8 | |||||||||||||||
Gross loans | 3,229,258 | 100.0 | % | 3,173,621 | 100.0 | % | 2,903,797 | 100.0 | % | ||||||||||||
Less: Unearned discount | (6,464 | ) | (5,318 | ) | — | ||||||||||||||||
Total loans | 3,222,794 | 3,168,303 | 2,903,797 | ||||||||||||||||||
Less: Loan loss allowance | (82,150 | ) | (82,191 | ) | (93,509 | ) | |||||||||||||||
Net loans | $ | 3,140,644 | $ | 3,086,112 | $ | 2,810,288 | |||||||||||||||
Loans Held for Sale | $ | 668,937 | $ | 938,379 | $ | 210,040 | |||||||||||||||
The following table provides details of the Company's commercial real estate portfolio:
March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||||||||||||
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 | $ | 107,861 | 10.6 | % | $ | 109,266 | 11.3 | % | $ | 127,795 | 13.2 | % | |||||||||
Office/mixed use property | 124,542 | 12.2 | 113,216 | 11.7 | 111,647 | 11.6 | |||||||||||||||
Commercial properties | 107,642 | 10.6 | 111,852 | 11.6 | 120,143 | 12.5 | |||||||||||||||
Specialized – other | 70,271 | 6.9 | 69,827 | 7.2 | 76,845 | 8.0 | |||||||||||||||
Other commercial properties | 27,140 | 2.4 | 28,870 | 3.0 | 20,228 | 2.1 | |||||||||||||||
Subtotal commercial non-owner occupied | 437,456 | 43.2 | 433,031 | 44.8 | 456,658 | 47.4 | |||||||||||||||
Commercial owner-occupied | 463,166 | 45.7 | 425,723 | 44.1 | 425,004 | 44.1 | |||||||||||||||
Multi-family properties | 112,630 | 11.1 | 107,224 | 11.1 | 81,638 | 8.5 | |||||||||||||||
Total commercial real estate secured | $ | 1,013,252 | 100.0 | % | $ | 965,978 | 100.0 | % | $ | 963,300 | 100.0 | % | |||||||||
13
CREDIT QUALITY (unaudited)
(dollars in thousands)
At or for the Three Months Ended | ||||||||||||
March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||||
Nonperforming Assets: | ||||||||||||
Loans contractually past due 90 days or more but still accruing interest | $ | — | $ | — | $ | — | ||||||
Nonaccrual loans: | ||||||||||||
Commercial and industrial | 16,010 | 16,705 | 21,076 | |||||||||
Commercial real estate secured | 23,096 | 14,530 | 30,185 | |||||||||
Residential construction and land | 742 | 4,495 | 7,113 | |||||||||
Commercial construction and land | 26,375 | 15,220 | 26,046 | |||||||||
Consumer | 5,181 | 8,587 | 9,078 | |||||||||
Total nonaccrual loans | 71,404 | 59,537 | 93,498 | |||||||||
Total nonperforming loans | 71,404 | 59,537 | 93,498 | |||||||||
Other real estate owned and repossessed assets | 27,218 | 24,259 | 36,941 | |||||||||
Total nonperforming assets | $ | 98,622 | $ | 83,796 | $ | 130,439 | ||||||
Other Credit Quality Information: | ||||||||||||
Commercial criticized and classified loans (1) | ||||||||||||
Special mention | $ | 49,644 | $ | 58,025 | $ | 51,428 | ||||||
Substandard | 22,649 | 22,608 | 25,200 | |||||||||
Nonaccrual | 66,223 | 50,950 | 84,420 | |||||||||
Total commercial criticized and classified loans | $ | 138,516 | $ | 131,583 | $ | 161,048 | ||||||
Loans contractually past due 30 – 89 days and still accruing | $ | 4,293 | $ | 6,111 | $ | 6,274 | ||||||
Performing restructured loans | 22,739 | 17,456 | 14,828 | |||||||||
Recorded balance of impaired loans | 90,113 | 70,343 | 99,286 | |||||||||
Allowance for loan losses related to impaired loans | 13,670 | 12,057 | 22,470 | |||||||||
Allowance for Loan Losses Summary: | ||||||||||||
Allowance at beginning of period | $ | 82,191 | $ | 79,667 | $ | 103,744 | ||||||
(Charge-offs), net of recoveries: | ||||||||||||
Commercial and commercial real estate | 114 | 1,793 | (15,346 | ) | ||||||||
Real estate – construction and land | 174 | 125 | (1,197 | ) | ||||||||
Consumer | (629 | ) | (594 | ) | (1,042 | ) | ||||||
Total net (charge-offs) recoveries | (341 | ) | 1,324 | (17,585 | ) | |||||||
Provision for loan losses | 300 | 1,200 | 7,350 | |||||||||
Allowance at end of period | $ | 82,150 | $ | 82,191 | $ | 93,509 | ||||||
Key Credit Ratios: | ||||||||||||
Nonperforming loans to total loans (2) | 2.22 | % | 1.88 | % | 3.22 | % | ||||||
Nonperforming assets to total loans plus repossessed property (2) | 3.03 | % | 2.62 | % | 4.44 | % | ||||||
Nonperforming assets to total assets | 1.71 | % | 1.44 | % | 2.78 | % | ||||||
Annualized net charge-offs (recoveries) to average total loans (2) | 0.04 | % | (0.17 | )% | 2.39 | % | ||||||
Allowance to total loans at end of period (excluding loans held for sale) | 2.55 | % | 2.59 | % | 3.22 | % | ||||||
Allowance to nonperforming loans | 115.05 | % | 138.05 | % | 100.01 | % | ||||||
30 – 89 days past due to total loans (2) | 0.13 | % | 0.19 | % | 0.22 | % | ||||||
(1) | Commercial criticized and classified loans excludes consumer loans. |
(2) | During the fourth quarter 2012, the Company revised its methodology for calculating these metrics to exclude loans held for sale from total loans. Prior period ratios have been adjusted to reflect this change. |
14
LOAN PORTFOLIO AGING (unaudited)
(dollars in thousands)
As of March 31, 2013 | |||||||||||||||||||||||||||
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 | $ | — | $ | — | $ | 16,010 | $ | 1,561,231 | $ | 1,577,241 | 49 | % | $ | 36,459 | |||||||||||||
Commercial real estate secured: | |||||||||||||||||||||||||||
Commercial non-owner occupied: | |||||||||||||||||||||||||||
Retail strip centers or malls | — | — | 16,034 | 91,827 | 107,861 | 3 | % | 3,017 | |||||||||||||||||||
Office/mixed use property | — | — | 1,677 | 122,865 | 124,542 | 4 | % | 2,473 | |||||||||||||||||||
Commercial properties | — | — | 427 | 107,215 | 107,642 | 4 | % | 2,198 | |||||||||||||||||||
Specialized – other | — | — | — | 70,271 | 70,271 | 2 | % | 1,251 | |||||||||||||||||||
Other commercial properties | — | — | — | 27,140 | 27,140 | 1 | % | 483 | |||||||||||||||||||
Subtotal commercial non-owner occupied | — | — | 18,138 | 419,318 | 437,456 | 14 | % | 9,422 | |||||||||||||||||||
Commercial owner-occupied | — | — | 966 | 462,200 | 463,166 | 14 | % | 8,952 | |||||||||||||||||||
Multi-family properties | — | — | 3,992 | 108,638 | 112,630 | 3 | % | 2,671 | |||||||||||||||||||
Total commercial real estate secured | — | — | 23,096 | 990,156 | 1,013,252 | 31 | % | 21,045 | |||||||||||||||||||
Residential construction and land: | |||||||||||||||||||||||||||
Residential construction | — | — | 742 | 23,628 | 24,370 | 1 | % | 3,423 | |||||||||||||||||||
Land | — | — | — | 16,250 | 16,250 | — | % | 2,355 | |||||||||||||||||||
Total residential construction and land | — | — | 742 | 39,878 | 40,620 | 1 | % | 5,778 | |||||||||||||||||||
Commercial construction and land | — | — | 26,375 | 94,837 | 121,212 | 4 | % | 11,185 | |||||||||||||||||||
Lease receivables, net of unearned discount | — | — | — | 58,564 | 58,564 | 2 | % | 351 | |||||||||||||||||||
Total commercial loans | — | — | 66,223 | 2,744,666 | 2,810,889 | 87 | % | 74,818 | |||||||||||||||||||
Consumer loans | 4,293 | — | 5,181 | 402,431 | 411,905 | 13 | % | 7,332 | |||||||||||||||||||
Total loans | $ | 4,293 | $ | — | $ | 71,404 | $ | 3,147,097 | $ | 3,222,794 | 100 | % | $ | 82,150 | |||||||||||||
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 | ||||||||||||||||||||
March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||||||||||||
Average Balance | Percent of Deposits | Average Balance | Percent of Deposits | Average Balance | Percent of Deposits | |||||||||||||||
Noninterest-bearing deposits | $ | 1,333,958 | 35.5 | % | $ | 1,257,811 | 35.5 | % | $ | 753,995 | 24.8 | % | ||||||||
Interest-bearing deposits: | ||||||||||||||||||||
NOW accounts | 717,410 | 19.1 | 460,187 | 13.0 | 348,723 | 11.5 | ||||||||||||||
Savings deposits | 40,255 | 1.1 | 39,874 | 1.1 | 39,107 | 1.3 | ||||||||||||||
Money market accounts | 746,542 | 19.9 | 743,479 | 21.0 | 670,496 | 22.1 | ||||||||||||||
Brokered money market deposits | 11,942 | 0.3 | 24,036 | 0.7 | — | — | ||||||||||||||
Certificates of deposit | 550,430 | 14.6 | 568,549 | 16.1 | 673,361 | 22.1 | ||||||||||||||
Brokered certificates of deposit | 181,740 | 4.8 | 215,189 | 6.1 | 372,835 | 12.2 | ||||||||||||||
CDARS time deposits | 162,662 | 4.3 | 211,865 | 6.0 | 133,869 | 4.4 | ||||||||||||||
Public time deposits | 13,791 | 0.4 | 19,111 | 0.5 | 47,903 | 1.6 | ||||||||||||||
Total interest-bearing deposits | 2,424,772 | 64.5 | 2,282,290 | 64.5 | 2,286,294 | 75.2 | ||||||||||||||
Total deposits | $ | 3,758,730 | 100.0 | % | $ | 3,540,101 | 100.0 | % | $ | 3,040,289 | 100.0 | % | ||||||||
The following table sets forth the period end balances of total deposits as of each of the dates indicated below.
March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||||||
Noninterest-bearing deposits | $ | 1,326,483 | $ | 1,179,724 | $ | 702,723 | ||||||
Interest-bearing deposits: | ||||||||||||
NOW accounts | 819,101 | 573,133 | 392,659 | |||||||||
Savings accounts | 40,646 | 39,915 | 39,630 | |||||||||
Money market accounts | 741,818 | 744,791 | 689,912 | |||||||||
Brokered money market deposits | — | 27,840 | — | |||||||||
Certificates of deposit | 548,767 | 561,998 | 637,773 | |||||||||
Brokered certificates of deposit | 171,320 | 199,604 | 339,037 | |||||||||
CDARS time deposits | 135,630 | 186,187 | 148,396 | |||||||||
Public time deposits | 10,629 | 15,150 | 39,509 | |||||||||
Total interest-bearing deposits | 2,467,911 | 2,348,618 | 2,286,916 | |||||||||
Total deposits | $ | 3,794,394 | $ | 3,528,342 | $ | 2,989,639 | ||||||
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 | |||||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||||
Income before income taxes | $ | 28,347 | $ | 35,988 | $ | 27,647 | $ | 24,181 | $ | 15,830 | |||||||||||
Add back (subtract): | |||||||||||||||||||||
Credit costs: | |||||||||||||||||||||
Provision for loan losses | 300 | 1,200 | 900 | 100 | 7,350 | ||||||||||||||||
Nonperforming asset expense | 559 | 2,816 | 613 | 828 | 694 | ||||||||||||||||
Credit costs subtotal | 859 | 4,016 | 1,513 | 928 | 8,044 | ||||||||||||||||
Other: | |||||||||||||||||||||
Gain on sales of investment securities | (1 | ) | (1,488 | ) | — | (3,020 | ) | (956 | ) | ||||||||||||
Early extinguishment of debt | — | 63 | 3,670 | 2,987 | 1,001 | ||||||||||||||||
Impairment of investment securities | — | — | — | — | 125 | ||||||||||||||||
Other subtotal | (1 | ) | (1,425 | ) | 3,670 | (33 | ) | 170 | |||||||||||||
Pre-tax, pre-provision operating earnings | $ | 29,205 | $ | 38,579 | $ | 32,830 | $ | 25,076 | $ | 24,044 | |||||||||||
The following, as of the dates indicated, details the components of revenue.
For the Three Months Ended | |||||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||||
Net interest income | $ | 40,683 | $ | 40,510 | $ | 37,196 | $ | 36,378 | $ | 35,802 | |||||||||||
Noninterest income | 39,719 | 51,962 | 47,250 | 31,889 | 23,946 | ||||||||||||||||
Add back (subtract): | |||||||||||||||||||||
Gain on sales of investment securities | (1 | ) | (1,488 | ) | — | (3,020 | ) | (956 | ) | ||||||||||||
Impairment of investment securities | — | — | — | — | 125 | ||||||||||||||||
Revenue | $ | 80,401 | $ | 90,984 | $ | 84,446 | $ | 65,247 | $ | 58,917 | |||||||||||
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, 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 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.
17