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8-K - FORM 8-K - S&T BANCORP INCd617680d8k.htm

Exhibit 99.1

 

LOGO

 

FOR IMMEDIATE RELEASE    Contact: Mark Kochvar
October 29, 2013    Chief Financial Officer
   800 Philadelphia Street
   Indiana, PA 15701
   (724) 465-4826
   mark.kochvar@stbank.net
   www.stbancorp.com

S&T Bancorp, Inc. Announces Third Quarter

Earnings and Declares an Increased Dividend

Indiana, PennsylvaniaOctober 29, 2013 – S&T Bancorp, Inc. (S&T) (NASDAQ: STBA) has announced its third quarter earnings. Net income for the third quarter of 2013 was $12.2 million, or $0.41 per diluted share, compared to the second quarter of 2013 net income of $14.1 million, or $0.47 per diluted share, and the third quarter of 2012 net income of $12.6 million, or $0.43 per diluted share.

Third Quarter Highlights

 

    Total average loans increased $57.5 million, or 1.7%, from the prior quarter.

 

    Net interest income increased $0.7 million and net interest margin (FTE) was stable at 3.50%.

 

    Asset quality continued to improve with a decrease in nonperforming assets (NPAs) of $1.4 million, or 3.7%, from the prior quarter and $30.7 million, or 45%, from the third quarter of 2012.

 

    S&T’s Board of Directors approved a 6.7% increase in the quarterly cash dividend to $0.16 per share.

“Our quarterly results reflect another strong quarter of performance with solid loan growth, continued asset quality improvement and an increase in net interest income,” said Todd Brice, president and chief executive officer of S&T. “We are also pleased to announce the increase in our quarterly cash dividend which is a reflection of S&T’s strong earnings and capital position.”

 

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S&T Earnings Release –2

S&T Bancorp, Inc. Announces Third Quarter

Earnings and Declares an Increased Dividend

(continued)

 

Net Interest Income

Net interest income increased $0.7 million, or 2.0%, to $35.3 million compared to $34.6 million in the prior quarter. Net interest margin on a fully taxable equivalent basis (FTE) decreased one basis point to 3.50% compared to 3.51% in the second quarter of 2013. Both net interest income and net interest margin (FTE) were positively impacted by an improvement in funding costs during the third quarter of 2013. The improvement in funding costs was primarily due to the repayment of $45.0 million of subordinated debt late in the second quarter of 2013 which was replaced with lower costing short-term borrowings. Additionally, maturities of higher costing certificates of deposits shifted to lower costing deposits. Interest income remained unchanged as the positive impact from a $50.8 million increase in average earning assets was offset by a decrease in the earning asset rate of 7 basis points to 3.82% compared to 3.89% in the prior quarter.

Asset Quality

Asset quality continues to improve. Total nonperforming loans (NPLs) were $36.4 million, or 1.04%, of total loans at September 30, 2013, which represents a 3.9% decrease from $37.9 million, or 1.10%, of total loans at June 30, 2013. Special mention and substandard loans also decreased $46.4 million, or 17%, to $222.3 million from $268.7 million at June 30, 2013. Net charge-offs for the third quarter of 2013 were $1.5 million compared to net charge-offs of $0.9 million in the second quarter of 2013. The provision for loan losses was $3.4 million in the third quarter of 2013 compared to $1.0 million in the second quarter of 2013 primarily due to an increase of $3.1 million in specific reserves. The allowance for loan losses (ALL) increased slightly to $48.0 million, or 1.37% of total loans, compared to $46.1 million, or 1.34% of total loans, at June 30, 2013.

 

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S&T Earnings Release –3

S&T Bancorp, Inc. Announces Third Quarter

Earnings and Declares an Increased Dividend

(continued)

 

Noninterest Income and Expense

Noninterest income decreased $0.4 million to $12.5 million compared to $12.9 million in the second quarter of 2013. Mortgage banking income decreased $0.6 million primarily due to the increase in interest rates that occurred in the second quarter of 2013. Debit and credit card fees decreased $0.4 million due to a decrease in merchant revenue. Service charges on deposit accounts increased $0.3 million due to changes in certain deposits fees implemented late in the second quarter of 2013. Other income increased $0.4 million primarily related to interest rate swap fees from our commercial customers.

Noninterest expense decreased $0.4 million, or 1.6%, to $27.9 million compared to $28.4 million in the second quarter of 2013. There were no significant changes to expense categories from the prior quarter. The third quarter results reflect the benefit of expense control initiatives implemented in the first half of 2013.

Financial Condition

Total assets increased to $4.6 billion at September 30, 2013 compared to $4.5 billion at June 30, 2013 and $4.4 billion at September 30, 2012. Loan growth was strong during the quarter with an increase of $68.1 million, or 2.0%, in total portfolio loans. Commercial loans grew $52.3 million, or 2.1%, during the quarter, due to strong growth in the commercial real estate portfolio. Consumer loans increased $15.8 million during the quarter with the majority of the growth in residential mortgages of $13.7 million, or 3.0%. Total deposit balances increased $45.6 million, or 1.2%, compared to June 30, 2013. The deposit mix improved with an increase in demand deposit accounts of $53.8 million, or 4.3%, from June 30, 2013. S&T’s risk-based capital ratios are down slightly this quarter as loan and commitment growth outpaced increased capital from retained earnings. All capital ratios remain significantly above the well-capitalized thresholds of federal bank regulatory agencies.

 

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S&T Earnings Release –4

S&T Bancorp, Inc. Announces Third Quarter

Earnings and Declares an Increased Dividend

(continued)

 

Dividend

The Board of Directors of S&T declared a $0.16 per share cash dividend at its regular meeting held October 28, 2013, representing a 6.7% increase over the prior quarter cash dividend of $0.15 per share. The dividend is payable on November 29, 2013 to shareholders of record on November 15, 2013.

Conference Call

S&T will host its third quarter 2013 earnings conference call live over the Internet at 1:00 p.m. ET on Tuesday, October 29, 2013. To access the webcast, go to S&T’s webpage at www.stbancorp.com and click on “Events & Presentations.” Select “3rd Quarter 2013 Conference Call” and follow the instructions.

About S&T Bancorp, Inc.

Headquartered in Indiana, PA, S&T operates offices within Allegheny, Armstrong, Blair, Butler, Cambria, Clarion, Clearfield, Indiana, Jefferson, Washington and Westmoreland counties as well as a loan production office in northeast Ohio. With assets of $4.6 billion, S&T stock trades on the NASDAQ Global Select Market System under the symbol STBA. For more information, visit www.stbancorp.com.

This information may contain forward-looking statements regarding future financial performance which are not historical facts and which involve risks and uncertainties. Actual results and performance could differ materially from those anticipated by these forward-looking statements. Factors that could cause such a difference include, but are not limited to, general economic conditions, change in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values and competition. In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), S&T management uses and this press release contains or references, certain non-GAAP financial measures, such as net interest income on a fully taxable equivalent basis. S&T believes these non-GAAP financial measures provide information useful to investors in understanding our underlying operational performance and our business and performance trends as they facilitate comparisons with the performance of others in the financial services industry. Although S&T believes that these non-GAAP financial measures enhance investors’ understanding of S&T’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. A reconciliation of these non-GAAP

 

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S&T Earnings Release –5

S&T Bancorp, Inc. Announces Third Quarter

Earnings and Declares an Increased Dividend

(continued)

 

financial measures is presented in the attached selected financial data spreadsheet. This information should be read in conjunction with the audited financial statements and analysis as presented in the Annual Report on Form 10-K for S&T Bancorp, Inc. and subsidiaries.

 

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S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

   S&T Earnings Release –6

 

     2013     2013     2012  
(in thousands, except per share data)    Third
Quarter
    Second
Quarter
    Third
Quarter
 

INTEREST INCOME

      

Loans, including fees

   $ 35,733      $ 35,765      $ 36,121   

Investment securities:

      

Taxable

     1,889        1,879        1,829   

Tax-exempt

     865        815        788   

Dividends

     94        94        82   
  

 

 

   

 

 

   

 

 

 

Total Interest Income

     38,581        38,553        38,820   
  

 

 

   

 

 

   

 

 

 

INTEREST EXPENSE

      

Deposits

     2,717        2,951        3,958   

Borrowings and junior subordinated debt securities

     590        1,006        1,067   
  

 

 

   

 

 

   

 

 

 

Total Interest Expense

     3,307        3,957        5,025   
  

 

 

   

 

 

   

 

 

 

NET INTEREST INCOME

     35,274        34,596        33,795   

Provision for loan losses

     3,419        1,023        2,305   
  

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     31,855        33,573        31,490   
  

 

 

   

 

 

   

 

 

 

NONINTEREST INCOME

      

Securities gains, net

     3        —          2,170   

Service charges on deposit accounts

     2,801        2,495        2,567   

Debit and credit card fees

     2,764        3,150        2,966   

Wealth management fees

     2,747        2,820        2,397   

Insurance fees

     1,738        1,643        1,731   

Mortgage banking

     265        911        797   

Other

     2,224        1,848        2,118   
  

 

 

   

 

 

   

 

 

 

Total Noninterest Income

     12,542        12,867        14,746   
  

 

 

   

 

 

   

 

 

 

NONINTEREST EXPENSE

      

Salaries and employee benefits

     14,910        14,725        14,819   

Data processing

     2,137        2,137        2,012   

Net occupancy

     1,910        1,958        1,978   

Furniture and equipment

     1,084        1,230        1,414   

Other taxes

     1,039        915        982   

Professional services and legal

     996        1,171        1,440   

FDIC assessment

     629        707        838   

Marketing

     607        793        759   

Other

     4,631        4,750        6,776   
  

 

 

   

 

 

   

 

 

 

Total Noninterest Expense

     27,943        28,386        31,018   
  

 

 

   

 

 

   

 

 

 

Income Before Taxes

     16,454        18,054        15,218   

Provision for income taxes

     4,207        3,951        2,623   
  

 

 

   

 

 

   

 

 

 

Net Income

   $ 12,247      $ 14,103      $ 12,595   
  

 

 

   

 

 

   

 

 

 

Per Share Data:

      

Shares outstanding at end of period

     29,738,305        29,738,305        29,733,592   

Average shares outstanding - diluted

     29,685,600        29,677,876        29,277,232   

Average shares outstanding - two-class method

     29,738,305        29,729,012        29,360,990   

Diluted earnings per share (1)

   $ 0.41      $ 0.47      $ 0.43   

Dividends declared per share

   $ 0.15      $ 0.15      $ 0.15   

Dividend yield (annualized)

     2.48     3.06     3.41

Dividends paid to net income

     36.42     31.61     34.47

Book value

   $ 18.68      $ 18.39      $ 17.97   

Tangible book value (2)

   $ 12.63      $ 12.33      $ 11.86   

Market value

   $ 24.22      $ 19.60      $ 17.61   

Profitability Ratios (Annualized)

      

Return on average assets

     1.07     1.26     1.15

Return on average tangible assets (3)

     1.12     1.31     1.19

Return on average shareholders’ equity

     8.86     10.36     9.56

Return on average tangible shareholders’ equity (4)

     13.19     15.47     14.52

Efficiency ratio (FTE) (5)

     56.97     58.37     65.31


S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

   S&T Earnings Release –7

 

     For the Nine Months Ended September 30,  
(in thousands, except per share data)    2013     2012  

INTEREST INCOME

    

Loans, including fees

   $ 106,543      $ 109,054   

Investment securities:

    

Taxable

     5,631        5,660   

Tax-exempt

     2,513        2,319   

Dividends

     290        297   
  

 

 

   

 

 

 

Total Interest Income

     114,977        117,330   
  

 

 

   

 

 

 

INTEREST EXPENSE

    

Deposits

     8,870        13,184   

Borrowings and junior subordinated debt securities

     2,568        3,211   
  

 

 

   

 

 

 

Total Interest Expense

     11,438        16,395   
  

 

 

   

 

 

 

NET INTEREST INCOME

     103,539        100,935   

Provision for loan losses

     6,749        18,600   
  

 

 

   

 

 

 

Net interest income after provision for loan losses

     96,790        82,335   
  

 

 

   

 

 

 

NONINTEREST INCOME

    

Securities gains, net

     5        3,016   

Debit and credit card fees

     8,365        8,472   

Wealth management fees

     8,143        7,393   

Service charges on deposit accounts

     7,744        7,407   

Insurance fees

     5,156        4,941   

Mortgage banking

     1,658        2,174   

Gain on sale of merchant card servicing business

     3,093        —     

Other

     6,051        6,944   
  

 

 

   

 

 

 

Total Noninterest Income

     40,215        40,347   
  

 

 

   

 

 

 

NONINTEREST EXPENSE

    

Salaries and employee benefits

     45,701        45,933   

Data processing

     6,938        7,448   

Net occupancy

     6,037        5,594   

Furniture and equipment

     3,623        3,861   

Professional services and legal

     3,141        4,548   

Other taxes

     2,953        2,533   

FDIC assessment

     2,112        2,164   

Marketing

     2,088        2,156   

Other

     15,352        18,909   
  

 

 

   

 

 

 

Total Noninterest Expense

     87,945        93,146   
  

 

 

   

 

 

 

Income Before Taxes

     49,060        29,536   

Provision for income taxes

     10,380        4,861   
  

 

 

   

 

 

 

Net Income

   $ 38,680      $ 24,675   
  

 

 

   

 

 

 

Per Share Data:

    

Average shares outstanding - diluted

     29,679,778        28,774,196   

Average shares outstanding - two-class method

     29,732,371        28,865,822   

Diluted earnings per share (1)

   $ 1.30      $ 0.85   

Dividends declared per share

   $ 0.45      $ 0.45   

Dividends paid to net income

     34.59     52.27

Profitability Ratios (Annualized)

    

Return on average assets

     1.15     0.77

Return on average tangible assets (3)

     1.20     0.80

Return on average shareholders’ equity

     9.49     6.46

Return on average tangible shareholders’ equity (4)

     14.19     9.88

Efficiency ratio (FTE) (5)

     59.69     65.76


S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

   S&T Earnings Release –8

 

     2013     2013     2012  
(in thousands)    Third
Quarter
    Second
Quarter
    Third
Quarter
 

ASSETS

      

Cash and due from banks, including interest-bearing deposits

   $ 234,928      $ 247,432      $ 347,076   

Securities available-for-sale, at fair value

     488,162        479,821        414,644   

Loans held for sale

     3,695        3,185        3,188   

Commercial loans:

      

Commercial real estate

     1,567,814        1,501,491        1,438,526   

Commercial and industrial

     827,699        826,696        748,569   

Construction

     152,206        167,225        157,717   
  

 

 

   

 

 

   

 

 

 

Total commercial loans

     2,547,719        2,495,412        2,344,812   

Consumer loans:

      

Residential mortgage

     477,141        463,446        409,967   

Home equity

     413,097        413,585        447,123   

Installment and other consumer

     69,043        67,983        75,157   

Construction

     4,335        2,807        2,098   
  

 

 

   

 

 

   

 

 

 

Total consumer loans

     963,616        947,821        934,345   
  

 

 

   

 

 

   

 

 

 

Total portfolio loans

     3,511,335        3,443,233        3,279,157   

Allowance for loan losses

     (47,983     (46,105     (46,279
  

 

 

   

 

 

   

 

 

 

Total portfolio loans, net

     3,463,352        3,397,128        3,232,878   

Goodwill

     175,820        175,820        175,733   

Other assets

     222,171        225,373        248,739   
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 4,588,128      $ 4,528,759      $ 4,422,258   
  

 

 

   

 

 

   

 

 

 

LIABILITIES

      

Deposits:

      

Noninterest-bearing demand

   $ 974,262      $ 947,747      $ 928,000   

Interest-bearing demand

     324,291        297,028        321,785   

Money market

     308,445        329,065        316,673   

Savings

     1,039,115        1,003,705        949,521   

Certificates of deposit

     1,048,090        1,071,083        1,078,427   
  

 

 

   

 

 

   

 

 

 

Total Deposits

     3,694,203        3,648,628        3,594,406   

Securities sold under repurchase agreements

     33,290        74,151        49,261   

Short-term borrowings

     175,000        125,000        25,000   

Long-term borrowings

     22,390        22,965        40,669   

Junior subordinated debt securities

     45,619        45,619        90,619   

Other liabilities

     62,198        65,544        88,061   
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     4,032,700        3,981,907        3,888,016   

SHAREHOLDERS’ EQUITY

      

Total Shareholders’ Equity

     555,428        546,852        534,242   
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 4,588,128      $ 4,528,759      $ 4,422,258   
  

 

 

   

 

 

   

 

 

 

Capitalization Ratios

      

Shareholders’ equity / assets

     12.11     12.08     12.08

Tangible common equity / tangible assets (6)

     8.52     8.43     8.32

Tier 1 leverage ratio

     9.61     9.54     9.27

Risk-based capital - tier 1

     12.26     12.28     12.01

Risk-based capital - total

     14.27     14.30     15.45


S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

   S&T Earnings Release –9

 

     2013            2013            2012         

(in thousands)

Net Interest Margin (FTE) (QTD Averages)(7)

   Third
Quarter
           Second
Quarter
           Third
Quarter
        

ASSETS

               

Loans

   $ 3,476,914         4.16   $ 3,419,393         4.28   $ 3,226,219         4.52

Taxable investment securities

     378,678         1.98     365,799         2.04     289,519         2.36

Tax-exempt investment securities

     108,982         4.88     106,194         4.73     97,624         4.97

Federal Home Loan Bank and other restricted stock

     13,910         0.83     12,420         0.31     17,738         0.10

Interest-bearing deposits with banks

     162,381         0.27     186,265         0.28     329,985         0.28
  

 

 

      

 

 

      

 

 

    

Total Interest-earning Assets

     4,140,865         3.82     4,090,071         3.89     3,961,085         4.00

Noninterest-earning assets

     391,001           400,592           411,528      
  

 

 

      

 

 

      

 

 

    

Total Assets

   $ 4,531,866         $ 4,490,663         $ 4,372,613      
  

 

 

      

 

 

      

 

 

    

LIABILITIES AND SHAREHOLDERS’ EQUITY

               

Interest-bearing demand

   $ 311,369         0.02   $ 303,461         0.02   $ 314,013         0.04

Money market

     323,671         0.14     327,733         0.14     321,312         0.17

Savings

     1,019,647         0.15     1,001,258         0.18     931,680         0.28

Certificates of deposit

     1,050,954         0.83     1,047,868         0.91     1,079,894         1.15

Securities sold under repurchase agreements

     59,390         0.09     67,461         0.13     54,090         0.18

Short-term borrowings

     127,174         0.28     71,429         0.25     40,699         0.29

Long-term borrowings

     22,625         3.01     23,196         3.05     34,892         3.18

Junior subordinated debt securities

     45,619         2.72     82,817         3.70     90,619         3.20
  

 

 

      

 

 

      

 

 

    

Total Interest-bearing Liabilities

     2,960,449         0.44     2,925,223         0.54     2,867,199         0.70

Noninterest-bearing demand

     955,337           946,862           903,949      

Other liabilities

     67,639           72,370           77,354      

Shareholders’ equity

     548,441           546,208           524,111      
  

 

 

      

 

 

      

 

 

    

Total Liabilities and Shareholders’ Equity

   $ 4,531,866         $ 4,490,663         $ 4,372,613      
  

 

 

      

 

 

      

 

 

    

Net Interest Margin

        3.50        3.51        3.50

 

     For the Nine Months Ended September 30,         

Net Interest Margin (FTE) (YTD Averages)(7)

   2013            2012         

ASSETS

          

Loans

   $ 3,418,571         4.25   $ 3,188,500         4.64

Taxable investment securities

     366,025         2.04     280,781         2.62

Tax-exempt investment securities

     108,556         4.75     91,930         5.18

Federal Home Loan Bank and other restricted stock

     13,582         0.56     18,584         0.14

Interest-bearing deposits with banks

     186,248         0.26     297,410         0.24
  

 

 

      

 

 

    

Total Interest-earning Assets

     4,092,982         3.87     3,877,205         4.15

Noninterest-earning assets

     397,563           403,034      
  

 

 

      

 

 

    

Total Assets

   $ 4,490,545         $ 4,280,239      
  

 

 

      

 

 

    

LIABILITIES AND SHAREHOLDERS’ EQUITY

          

Interest-bearing demand

   $ 308,335         0.02   $ 303,550         0.05

Money market

     329,830         0.14     299,242         0.17

Savings

     998,410         0.18     883,629         0.26

Certificates of deposit

     1,047,351         0.91     1,119,692         1.30

Securities sold under repurchase agreements

     63,382         0.13     47,377         0.16

Short-term borrowings

     86,813         0.26     62,315         0.26

Long-term borrowings

     25,077         3.09     33,678         3.28

Junior subordinated debt securities

     72,853         3.23     90,619         3.24
  

 

 

      

 

 

    

Total Interest-bearing Liabilities

     2,932,051         0.52     2,840,102         0.77

Noninterest-bearing demand

     942,610           859,446      

Other liabilities

     70,829           70,732      

Shareholders’ equity

     545,055           509,959      
  

 

 

      

 

 

    

Total Liabilities and Shareholders’ Equity

   $ 4,490,545         $ 4,280,239      
  

 

 

      

 

 

    

Net Interest Margin

        3.50        3.58


S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

   S&T Earnings Release –10

 

     2013            2013            2012         
(in thousands)    Third
Quarter
           Second
Quarter
           Third
Quarter
        

Nonaccrual Loans (NPL)

               

Commercial loans:

        % NPL           % NPL           % NPL   
     

 

 

      

 

 

      

 

 

 

Commercial real estate

   $ 16,479         1.05   $ 20,732         1.38   $ 32,828         2.28

Commercial and industrial

     3,897         0.47     5,204         0.63     6,851         0.92

Construction

     9,684         6.36     4,775         2.86     14,411         9.14
  

 

 

      

 

 

      

 

 

    

Total Nonaccrual Commercial Loans

     30,060         1.18     30,711         1.23     54,090         2.31

Consumer loans:

               

Residential mortgage

     3,021         0.63     3,465         0.75     7,584         1.85

Home equity

     3,291         0.80     3,674         0.89     3,994         0.89

Installment and other consumer

     27         0.04     33         0.05     49         0.07

Construction

     —           —          —           —          399         19.02
  

 

 

      

 

 

      

 

 

    

Total Nonaccrual Consumer Loans

     6,339         0.66     7,172         0.76     12,026         1.29
  

 

 

      

 

 

      

 

 

    

Total Nonaccrual Loans

   $ 36,399         1.04   $ 37,883         1.10   $ 66,116         2.02
  

 

 

      

 

 

      

 

 

    

 

     2013     2013     2012  
     Third
Quarter
    Second
Quarter
    Third
Quarter
 

Asset Quality Data

      

Nonaccrual loans

   $ 36,399      $ 37,883      $ 66,116   

Assets acquired through foreclosure or repossession

     460        408        1,468   

Nonperforming assets

     36,859        38,291        67,584   

Troubled debt restructurings (nonaccruing)

     20,394        16,064        23,414   

Troubled debt restructurings (accruing)

     35,624        40,940        37,110   

Total troubled debt restructurings

     56,018        57,004        60,524   

Nonaccrual loans / loans

     1.04     1.10     2.01

Nonperforming assets / loans plus OREO

     1.05     1.11     2.06

Allowance for loan losses / loans

     1.37     1.34     1.41

Allowance for loan losses / nonaccrual loans

     132     122     70

Net loan charge-offs

     1,541        854        2,715   

Net loan charge-offs (annualized) / average loans

     0.18     0.10     0.33

 

     For the Nine Months Ended September 30,  
     2013     2012  

Asset Quality Data

    

Net loan charge-offs

     5,250        21,162   

Net loan charge-offs (annualized) / average loans

     0.21     0.89


S&T Bancorp, Inc.

Consolidated Selected Financial Data

Unaudited

   S&T Earnings Release –11

 

         2013     2013     2012  
         Third
Quarter
    Second
Quarter
    Third
Quarter
 

Definitions and Reconciliation of GAAP to Non-GAAP Financial Measures:

      
(1)  

Diluted earnings per share under the two-class method is determined on the net income reported on the income statement less earnings allocated to participating securities.

      
(2)  

Tangible Book Value

      
 

Book value (GAAP basis)

   $ 18.68      $ 18.39      $ 17.97   
 

Effect of excluding intangible assets

     (6.05     (6.06     (6.11
    

 

 

   

 

 

   

 

 

 
 

Tangible book value

   $ 12.63      $ 12.33      $ 11.86   
(3)  

Return on Average Tangible Assets

      
 

Return on average assets (GAAP basis)

     1.07     1.26     1.15
 

Effect of excluding intangible assets

     0.05     0.05     0.04
    

 

 

   

 

 

   

 

 

 
 

Return on average tangible assets

     1.12     1.31     1.19
(4)  

Return on Average Tangible Shareholders’ Equity

      
 

Return on average shareholders’ equity (GAAP basis)

     8.86     10.36     9.56
 

Effect of excluding intangible assets

     4.33     5.11     4.96
    

 

 

   

 

 

   

 

 

 
 

Return on average tangible shareholders’ equity

     13.19     15.47     14.52
(5)  

Noninterest expense divided by noninterest income plus net interest income, on a fully taxable equivalent (FTE) basis.

      
(6)  

Tangible Common Equity / Tangible Assets

      
 

Shareholders’ equity / assets (GAAP basis)

     12.11     12.08     12.08
 

Effect of excluding intangible assets

     (3.59 )%      (3.65 )%      (3.76 )% 
    

 

 

   

 

 

   

 

 

 
 

Tangible common equity / tangible assets

     8.52     8.43     8.32
(7)  

Interest Income Rate (FTE)

      
 

Interest income (annualized) rate (GAAP basis)

     3.70     3.78     3.89
 

Taxable equivalent adjustment

     0.12     0.11     0.11
    

 

 

   

 

 

   

 

 

 
 

Interest income rate (FTE)

     3.82     3.89     4.00
 

Net Interest Margin Rate (FTE)

      
 

Net interest margin rate (GAAP basis)

     3.38     3.40     3.38
 

Taxable equivalent adjustment

     0.12     0.11     0.12
    

 

 

   

 

 

   

 

 

 
 

Net interest margin rate (FTE)

     3.50     3.51     3.50

 

         For the Nine Months Ended September 30,  
         2013     2012  
(3)  

Return on Average Tangible Assets

    
 

Return on average assets (GAAP basis)

     1.15     0.77
 

Effect of excluding intangible assets

     0.05     0.03
    

 

 

   

 

 

 
 

Return on average tangible assets

     1.20     0.80
(4)  

Return on Average Tangible Shareholders’ Equity

    
 

Return on average shareholders’ equity (GAAP basis)

     9.49     6.46
 

Effect of excluding intangible assets

     4.70     3.42
    

 

 

   

 

 

 
 

Return on average tangible shareholders’ equity

     14.19     9.88
(7)  

Interest Income Rate (FTE)

    
 

Interest income (annualized) rate (GAAP basis)

     3.76     4.03
 

Taxable equivalent adjustment

     0.11     0.12
    

 

 

   

 

 

 
 

Interest income rate (FTE)

     3.87     4.15
 

Net Interest Margin Rate (FTE)

    
 

Net interest margin rate (GAAP basis)

     3.38     3.47
 

Taxable equivalent adjustment

     0.12     0.11
    

 

 

   

 

 

 
 

Net interest margin rate (FTE)

     3.50     3.58