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| 8-K - FORM 8-K - C1 Financial, Inc. | v422312_8k.htm |
Exhibit 99.1
C1 Financial Reports 2015 Third Quarter Results
St. Petersburg, FL, October 15, 2015 - C1 Financial, Inc. (NYSE:BNK) today reported net income of $5.0 million, or $0.31 per diluted common share for the third quarter of 2015 (“3Q15”), compared to net income of $4.7 million, or $0.29 per diluted common share for the second quarter of 2015 (“2Q15”), a 5.5% increase in net income, and compared to net income of $2.6 million, or $0.18 per diluted common share for the third quarter of 2014 (“3Q14”), a 90.6% increase in net income.
MESSAGE FROM PRESIDENT & CHIEF EXECUTIVE OFFICER
Trevor Burgess, President & Chief Executive Officer of C1 Financial, Inc. stated, “We are excited by our strong results in the third quarter as we grow our earning assets and leverage our infrastructure. Our deposit growth in the third quarter will provide needed funding for the strong pipeline of new loan relationships as we head into the end of the year. C1 Labs technology has contributed to productivity gains that has allowed us to reduce our retail network headcount by approximately 10%, which should allow us to reach best in class levels of assets and revenue per employee over the long term.”
3Q15 showed several positive trends in our results:
| 1. | We originated $93 million in new loans in the quarter, resulting in C1 Bank originated loans outstanding up $49 million (+5%) from the prior quarter and $338 million (+45%) year-over-year. Loan originations year to date were $447 million, up $97 million (+28%) compared to last year. Overall loans outstanding (including acquired loans) were $1.390 billion at the end of 3Q15 (up 2% from the prior quarter and up 23% year-over-year). July and September were strong months for new originations while August was seasonally low, further affected by extensive rain that delayed many construction projects; |
| 2. | During the quarter, core deposits grew $44 million (+4.6%) compared to the prior quarter and reached $998 million. Core deposits were 78.9% of total deposits at the end of 3Q15, compared to 78.5% at the end of 2Q15. Noninterest-bearing deposits represented 26.6% of total deposits at the end of 3Q15, slightly higher than at the end of the previous quarter. Our cost of total deposits grew 2 basis points (“bps”) to 0.46% when compared to 2Q15, as this mix change took place late in the quarter; |
| 3. | Adjusted net interest margin (a non-GAAP measure which excludes the impact of purchase accounting accretion income) improved by 4 bps (from 4.60% for 2Q15 to 4.64% for 3Q15), reflecting another quarter of high loan fees (resulting primarily from management’s successful implementation and collection of loan prepayment related fees) and enhanced by the use of excess cash. On a GAAP basis, net interest margin was 4.75% for 3Q15, compared to 4.71% for 2Q15; |
| 4. | Net interest income was up $1.2 million when compared to 2Q15, driven mainly by an increase in average loan balances which improved the earning asset mix; |
| 5. | In 3Q15, sales of other real estate owned (“OREO”) reduced our OREO balance by $1.2 million. Including the decrease in nonperforming loans, total nonperforming assets declined $1.9 million when compared to the previous quarter. Our Texas Ratio (a non-GAAP measure) was 21.0% at the end of 3Q15, improved from 22.4% at the end of 2Q15; |
| 6. | C1 Bank originated nonperforming assets accounted for less than 5% of our total nonperforming assets (with C1 Bank originated nonperforming loans below 0.2% of C1 Bank originated loans outstanding). Our allowance for loan losses was 0.57% of total loans at the end of 3Q15 and 0.56% at the end of 2Q15; |
| 7. | Our headcount ended the quarter at 239, down from 247 at the end of 2Q15 as a result of a restructuring of our retail network staffing. Such restructuring was in part made possible because of technology based productivity innovation coming out of our C1 Labs group. |
ASSETS
Total assets at the end of 3Q15 were $1.712 billion, $34.7 million higher (+2.1%) than at the end of 2Q15, primarily funded by deposit growth ($48.4 million) net of a decline in Federal Home Loan Bank (“FHLB”) advances ($19 million).
LOANS
Total loans at the end of 3Q15 were $1.390 billion, up $28.8 million (+2.1%) from the end of 2Q15. Loan growth in 3Q15 was mainly driven by loan originations of $93.5 million and funding of unfunded commitments, partially offset by higher loan prepayments in the C1 Bank originated loan portfolio, and loans paying off in both the C1 Bank originated loan portfolio and in the acquired portfolio. The outstanding balance of C1 Bank originated loans grew $49.0 million (+4.7%) during 3Q15, while the outstanding balance of acquired loans decreased $20.2 million (-6.4%) to $295 million at the end of 3Q15. At the end of 3Q15, C1 Bank originated loans represented 79% of the loan portfolio, up from 77% at the end of 2Q15.
DEPOSITS
Total deposits at the end of 3Q15 were $1.264 billion, an increase of $48.4 million (+4.0%) from the end of 2Q15. Core deposits were $997.8 million, or 78.9% of total deposits at the end of 3Q15, compared to $954.1 million, or 78.5% of total deposits at the end of 2Q15. This positive shift in the average deposit mix took place later in the quarter and didn’t reflect in our cost of total deposits, which was up to 0.46% in 3Q15 from 0.44% in 2Q15. We are scheduled to open our new Ft. Lauderdale banking center location in November 2015.
ASSET QUALITY
Nonperforming assets totaled $43.3 million at the end of 3Q15, declining $1.9 million (-4.2%) when compared to the end of 2Q15. The decline in 3Q15 was driven primarily by a reduction of $1.2 million in OREO balances as we continued to sell properties. As a percentage of total assets, nonperforming assets decreased to 2.53% at the end of 3Q15 when compared to 2.69% at the end of 2Q15. Our Texas Ratio improved to 21.0% at the end of 3Q15 from 22.4% at the end of 2Q15. At the end of 3Q15, $2.0 million (less than 5.0%) of total nonperforming assets were related to loans originated by C1 Bank, compared to $340 thousand (less than 1%) at the end of 2Q15, the increase being primarily due to one loan relationship downgraded to nonperforming during the quarter.
Total recoveries of $418 thousand, net of charge-offs of $94 thousand, resulted in net recoveries of $324 thousand in 3Q15 (0.09% of total average loans on an annualized basis). Net recoveries reflected our continued effort to collect deficiencies and a lower level of charge-offs, and provided a $67 thousand reversal of provision for loan losses after covering the allowance for loan losses required for net loan growth.
Our allowance for loan losses at the end of 3Q15 was $7.9 million (representing 0.57% of total loans), compared to $7.7 million (representing 0.56% of total loans) at the end of 2Q15. On a non-GAAP basis (including remaining loan discount from acquired performing loans), the allowance plus discount amount totaled $10.8 million (representing 0.77% of total loans) at the end of 3Q15, compared to $10.7 million (representing 0.79% of total loans) at the end of 2Q15.
NET INTEREST INCOME AND MARGIN
Net interest income for 3Q15 totaled $18.0 million, up $1.2 million (+7.3%) from 2Q15, mainly driven by growth of our average loans balance which allowed for an improvement in our earning assets mix.
Net interest margin for 3Q15 increased 4 bps to 4.75% from 4.71% in 2Q15, mainly driven by a 5 bps higher yield on average earning assets as we redeployed lower-yielding cash investments into higher-yielding loans, partially offset by a shift in the average deposit mix (which resulted in a 2 bps increase in the cost of total deposits when compared to the previous quarter). Strong loan fees (driven primarily by prepayments) continued to enhance our yield on loans in the quarter. Adjusted net interest margin (which excludes the effect of purchase accounting) was 4.64% for 3Q15 and 4.60% in 2Q15.
Our excess cash (defined as our available cash above our target liquidity level – See explanation of non-GAAP financial measures) was $30.7 million at the end of 3Q15, while our average excess cash was $10.6 million for 3Q15 (down from $27.6 million in 2Q15), as we successfully deployed it into loans during the quarter.
NONINTEREST INCOME
Noninterest income for 3Q15 totaled $2.1 million, $2.2 million less when compared to 2Q15. The decrease was primarily due to a $2.6 million gain on the sale of land (included in gains on disposals of premises and equipment) in 2Q15 and a $505 thousand decline in gains on sales of loans (due to a lower volume of Small Business Administration (“SBA”) loans sold). Partially offsetting the reduction in noninterest income was a $670 thousand gain on the early redemption of long-term FHLB advances (included in other noninterest income) completed for asset-liability and liquidity management purposes, and a $129 thousand increase in gains on sales of OREO.
NONINTEREST EXPENSE & TAXES
Noninterest expense totaled $12.0 million in 3Q15, only $127 thousand more when compared to 2Q15. The increase was primarily due to higher professional fees of $164 thousand and loan collection expenses of $83 thousand (primarily due to activity relating to nonperforming assets), and OREO valuation allowance expense of $67 thousand. These higher expenses were mainly offset by lower advertising expenses of $180 thousand (primarily due to fewer promotional and seasonal activities).
Our income tax expense was $3.2 million for 3Q15 and $3.3 million for 2Q15. The effective tax rate for 3Q15 was 39.3%, which reflected the projected tax rate for 2015 that was updated in 3Q15. The effective tax rate for 2Q15 was 40.9%, which included a $163 thousand audit related tax adjustment.
EFFICIENCY
Our efficiency ratio was 59.4% in 3Q15, higher than the 56.0% in 2Q15 and substantially lower than the 71.3% in 3Q14. The unfavorable change in the efficiency ratio versus the prior quarter was impacted by the gain on sale of land during 2Q15. The improvement compared to same quarter last year was driven by strong revenue growth combined with controlled non-interest expense, as we leverage our existing infrastructure. We also closely track annualized revenue per employee and average assets per employee, as measures of efficiency. Annualized revenue per employee was $367 thousand in 3Q15, compared to $384 thousand in 2Q15 and $305 thousand in 3Q14, which reflected the impact of the gain on sale of land during 2Q15 and a substantial improvement year over year, while average assets per employee were $6.9 million in 3Q15, compared to $6.6 million in 2Q15 and $6.4 million in 3Q14, which reflected our efforts to grow our balance sheet and our headcount efficiency initiatives.
NET INCOME
Net income was $5.0 million for 3Q15, compared to $4.7 million for 2Q15. This corresponded to a return on average assets of 1.18% for both 3Q15 and 2Q15 and a return on average equity of 10.02% and 9.88% for 3Q15 and 2Q15, respectively.
CAPITAL
Our consolidated Tier 1 leverage ratio was 11.79% and total risk-based capital ratio was 14.04% as of the end of 3Q15, reflecting that we remained well capitalized under Interim Final Basel III rules. Additional capital ratios are presented in the financial tables.
OTHER EVENTS DURING 3Q15
On July 1, C1 Bank announced that Diane Morton joined its executive management team as EVP, Chief Human Capital Officer & General Counsel and Dustin Symes joined as EVP, Retail Lending Executive.
WEBCAST AND CONFERENCE CALL INFORMATION
C1 Financial, Inc. will host a webcast and conference call at 8:30 a.m. (ET) on October 16, 2015 to discuss third quarter 2015 results and other matters. To access the conference call, please dial 1-855-209-8212. The live webcast audio can be heard at http://services.choruscall.com/links/bnk151016. For those unable to participate in the webcast, it will be archived on C1 Financial’s website at investors.c1bank.com.
C1 Financial, Inc. Information
Our name expresses our ideals to put our Clients 1st and our Community 1st. We are focused on serving the needs of entrepreneurs, tailoring a wide range of relationship banking services to entrepreneurs and their families, including commercial loans and a full line of depository products. We are based in St. Petersburg, Florida and operate from 31 banking centers and one loan production office on the West Coast of Florida and in Miami-Dade and Orange Counties. As of December 31, 2014, we were the 18th largest bank headquartered in the state of Florida by assets and the 16th largest by equity, having grown both organically and through acquisitions, and we were the sixth fastest-growing bank in the country as measured by asset growth for the five-year period ending June 30, 2014. Additional information is available at www.c1bank.com.
Forward-Looking Statements
In addition to historical information, this earnings release contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or “may,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. There are a number of potential factors, risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These potential factors, risks and uncertainties are discussed in our Prospectus filed with the Securities and Exchange Commission on August 13, 2015.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this earnings release to conform our prior statements to actual results or revised expectations.
C1 Financial, Inc.
Consolidated Balance Sheets - Unaudited
(Dollars in thousands, except per share data)
| September 30, | June 30, | September 30, | ||||||||||
| 2015 | 2015 | 2014 | ||||||||||
| ASSETS | ||||||||||||
| Cash and cash equivalents | $ | 175,289 | $ | 165,200 | $ | 283,741 | ||||||
| Time deposits in other financial institutions | 247 | 247 | - | |||||||||
| Federal Home Loan Bank stock, at cost | 11,668 | 12,476 | 9,696 | |||||||||
| Loans receivable, net | 1,376,617 | 1,348,185 | 1,125,151 | |||||||||
| Premises and equipment, net | 63,613 | 63,576 | 63,592 | |||||||||
| Other real estate owned, net | 26,490 | 27,686 | 37,956 | |||||||||
| Bank-owned life insurance | 43,018 | 42,743 | 8,867 | |||||||||
| Accrued interest receivable | 4,269 | 3,953 | 3,131 | |||||||||
| Core deposit intangible | 754 | 824 | 1,074 | |||||||||
| Prepaid expenses | 4,778 | 4,983 | 5,961 | |||||||||
| Other assets | 5,740 | 7,933 | 8,876 | |||||||||
| Total assets | $ | 1,712,483 | $ | 1,677,806 | $ | 1,548,045 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Deposits | ||||||||||||
| Noninterest bearing | $ | 336,361 | $ | 322,173 | $ | 294,144 | ||||||
| Interest bearing | 928,019 | 893,815 | 870,820 | |||||||||
| Total deposits | 1,264,380 | 1,215,988 | 1,164,964 | |||||||||
| Federal Home Loan Bank advances | 242,000 | 261,000 | 189,000 | |||||||||
| Other borrowings | - | - | 3,000 | |||||||||
| Other liabilities | 6,543 | 6,263 | 5,785 | |||||||||
| Total liabilities | 1,512,923 | 1,483,251 | 1,362,749 | |||||||||
| Stockholders’ equity | ||||||||||||
| Common stock, par value $1.00; 100,000,000 shares authorized | 16,101 | 16,101 | 16,101 | |||||||||
| Additional paid-in capital | 148,122 | 148,122 | 148,122 | |||||||||
| Retained earnings | 35,337 | 30,332 | 21,073 | |||||||||
| Accumulated other comprehensive income | - | - | - | |||||||||
| Total stockholders’ equity | 199,560 | 194,555 | 185,296 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,712,483 | $ | 1,677,806 | $ | 1,548,045 | ||||||
| Period-end shares outstanding | 16,100,966 | 16,100,966 | 16,100,966 | |||||||||
| Book value per share | $ | 12.39 | $ | 12.08 | $ | 11.51 | ||||||
C1 Financial, Inc.
Consolidated Income Statements - Unaudited
(Dollars in thousands, except per share data)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| Interest income | ||||||||||||||||||||
| Loans, including fees | $ | 20,340 | $ | 18,899 | $ | 16,028 | $ | 56,803 | $ | 46,481 | ||||||||||
| Securities | 3 | 3 | 2 | 9 | 59 | |||||||||||||||
| Federal funds sold and other | 203 | 213 | 215 | 618 | 612 | |||||||||||||||
| Total interest income | 20,546 | 19,115 | 16,245 | 57,430 | 47,152 | |||||||||||||||
| Interest expense | ||||||||||||||||||||
| Savings and interest-bearing demand deposits | 654 | 631 | 546 | 1,887 | 1,572 | |||||||||||||||
| Time deposits | 795 | 677 | 953 | 2,256 | 2,919 | |||||||||||||||
| Federal Home Loan Bank advances | 1,057 | 996 | 709 | 2,861 | 1,852 | |||||||||||||||
| Other borrowings | - | - | 15 | - | 44 | |||||||||||||||
| Total interest expense | 2,506 | 2,304 | 2,223 | 7,004 | 6,387 | |||||||||||||||
| Net interest income | 18,040 | 16,811 | 14,022 | 50,426 | 40,765 | |||||||||||||||
| Provision (reversal of provision) for loan losses | (67 | ) | 1,276 | 207 | 1,400 | 4,815 | ||||||||||||||
| Net interest income after provision for loan losses | 18,107 | 15,535 | 13,815 | 49,026 | 35,950 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||
| Gains on sales of securities | - | - | - | - | 241 | |||||||||||||||
| Gains on sales of loans | 79 | 584 | 775 | 893 | 2,323 | |||||||||||||||
| Service charges and fees | 602 | 581 | 526 | 1,750 | 1,658 | |||||||||||||||
| Bargain purchase gain | - | - | 37 | - | 48 | |||||||||||||||
| Gains on sales of other real estate owned, net | 177 | 48 | 68 | 573 | 720 | |||||||||||||||
| Bank-owned life insurance | 276 | 258 | 41 | 626 | 118 | |||||||||||||||
| Mortgage banking fees | - | - | - | - | 47 | |||||||||||||||
| Gains (losses) on disposals of premises and equipment, net | - | 2,588 | (12 | ) | 2,590 | (12 | ) | |||||||||||||
| Other noninterest income | 980 | 276 | 362 | 1,619 | 1,041 | |||||||||||||||
| Total noninterest income | 2,114 | 4,335 | 1,797 | 8,051 | 6,184 | |||||||||||||||
| Noninterest expense | ||||||||||||||||||||
| Salaries and employee benefits | 5,276 | 5,229 | 4,777 | 15,722 | 13,526 | |||||||||||||||
| Occupancy expense | 1,388 | 1,360 | 1,138 | 3,960 | 3,310 | |||||||||||||||
| Furniture and equipment | 779 | 740 | 673 | 2,275 | 1,954 | |||||||||||||||
| Regulatory assessments | 349 | 390 | 362 | 1,100 | 1,067 | |||||||||||||||
| Network services and data processing | 1,075 | 1,080 | 1,033 | 3,239 | 2,824 | |||||||||||||||
| Printing and office supplies | 54 | 71 | 77 | 183 | 270 | |||||||||||||||
| Postage and delivery | 78 | 80 | 52 | 242 | 181 | |||||||||||||||
| Advertising and promotion | 873 | 1,053 | 812 | 2,752 | 2,634 | |||||||||||||||
| Other real estate owned related expense, net | 468 | 498 | 511 | 1,559 | 1,625 | |||||||||||||||
| Other real estate owned - valuation allowance expense | 102 | 35 | 45 | 168 | 609 | |||||||||||||||
| Amortization of intangible assets | 70 | 80 | 117 | 233 | 412 | |||||||||||||||
| Professional fees | 673 | 509 | 750 | 1,880 | 2,174 | |||||||||||||||
| Loan collection expenses | 86 | 3 | 140 | 173 | 463 | |||||||||||||||
| Other noninterest expense | 701 | 717 | 793 | 2,166 | 2,178 | |||||||||||||||
| Total noninterest expense | 11,972 | 11,845 | 11,280 | 35,652 | 33,227 | |||||||||||||||
| Income before income taxes | 8,249 | 8,025 | 4,332 | 21,425 | 8,907 | |||||||||||||||
| Income tax expense | 3,244 | 3,282 | 1,706 | 8,503 | 3,525 | |||||||||||||||
| Net Income | $ | 5,005 | $ | 4,743 | $ | 2,626 | $ | 12,922 | $ | 5,382 | ||||||||||
| Weighted average shares outstanding - basic | 16,100,966 | 16,100,966 | 14,572,140 | 16,100,966 | 13,442,318 | |||||||||||||||
| Weighted average shares outstanding - diluted | 16,100,966 | 16,100,966 | 14,572,140 | 16,100,966 | 13,442,318 | |||||||||||||||
| Basic net income per share | $ | 0.31 | $ | 0.29 | $ | 0.18 | $ | 0.80 | $ | 0.40 | ||||||||||
| Diluted net income per share | 0.31 | 0.29 | 0.18 | 0.80 | 0.40 | |||||||||||||||
C1 Financial, Inc.
Average Balance Sheets - Unaudited
(Dollars in thousands)
| For the Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2015 | June 30, 2015 | September 30, 2014 | ||||||||||||||||||||||||||||||||||
| Average
Balances (1) | Income/
Expense | Yields/
Rates | Average Balances (1) | Income/ Expense | Yields/ Rates | Average Balances (1) | Income/ Expense | Yields/ Rates | ||||||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||||||||||||||
| Loans receivable (2) | $ | 1,374,425 | $ | 20,340 | 5.87 | % | $ | 1,286,665 | $ | 18,899 | 5.89 | % | $ | 1,098,466 | $ | 16,028 | 5.79 | % | ||||||||||||||||||
| Securities available for sale and other securities | 250 | 3 | 4.56 | % | 250 | 3 | 4.56 | % | 250 | 2 | 4.56 | % | ||||||||||||||||||||||||
| Federal funds sold and balances at Federal Reserve Bank | 121,155 | 68 | 0.22 | % | 132,527 | 93 | 0.28 | % | 222,894 | 129 | 0.23 | % | ||||||||||||||||||||||||
| Time deposits in other financial institutions | 247 | - | 0.42 | % | 147 | - | 0.43 | % | - | - | 0.00 | % | ||||||||||||||||||||||||
| FHLB stock | 11,824 | 135 | 4.51 | % | 11,300 | 120 | 4.26 | % | 9,152 | 86 | 3.71 | % | ||||||||||||||||||||||||
| Total interest-earning assets | 1,507,901 | 20,546 | 5.41 | % | 1,430,889 | 19,115 | 5.36 | % | 1,330,762 | 16,245 | 4.84 | % | ||||||||||||||||||||||||
| Noninterest-earning assets | ||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 38,612 | 36,213 | 39,723 | |||||||||||||||||||||||||||||||||
| Other assets (3) | 141,149 | 148,366 | 123,182 | |||||||||||||||||||||||||||||||||
| Total noninterest-earning assets | 179,761 | 184,579 | 162,905 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 1,687,662 | $ | 1,615,468 | $ | 1,493,667 | ||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||
| Time | $ | 274,925 | 795 | 1.15 | % | $ | 235,998 | 677 | 1.15 | % | $ | 346,037 | 953 | 1.09 | % | |||||||||||||||||||||
| Money market | 443,152 | 490 | 0.44 | % | 440,430 | 476 | 0.43 | % | 354,146 | 390 | 0.44 | % | ||||||||||||||||||||||||
| Interest-bearing demand | 155,418 | 142 | 0.36 | % | 145,027 | 133 | 0.37 | % | 139,175 | 135 | 0.38 | % | ||||||||||||||||||||||||
| Savings | 38,921 | 22 | 0.22 | % | 39,039 | 22 | 0.22 | % | 38,130 | 21 | 0.22 | % | ||||||||||||||||||||||||
| Total interest-bearing deposits | 912,416 | 1,449 | 0.63 | % | 860,494 | 1,308 | 0.61 | % | 877,488 | 1,499 | 0.68 | % | ||||||||||||||||||||||||
| Other interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
| FHLB advances | 245,847 | 1,057 | 1.71 | % | 233,065 | 996 | 1.72 | % | 176,964 | 709 | 1.59 | % | ||||||||||||||||||||||||
| Other borrowings | - | - | 0.00 | % | - | - | 0.00 | % | 3,000 | 15 | 1.96 | % | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,158,263 | 2,506 | 0.86 | % | 1,093,559 | 2,304 | 0.85 | % | 1,057,452 | 2,223 | 0.83 | % | ||||||||||||||||||||||||
| Noninterest-bearing liabilities and stockholders' equity: | ||||||||||||||||||||||||||||||||||||
| Demand deposits | 325,044 | 324,831 | 270,328 | |||||||||||||||||||||||||||||||||
| Other liabilities | 6,127 | 4,467 | 4,954 | |||||||||||||||||||||||||||||||||
| Stockholders' equity | 198,228 | 192,611 | 160,933 | |||||||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities and stockholder's equity | 529,399 | 521,909 | 436,215 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,687,662 | $ | 1,615,468 | $ | 1,493,667 | ||||||||||||||||||||||||||||||
| Interest rate spread (taxable-equivalent basis) | 4.55 | % | 4.51 | % | 4.01 | % | ||||||||||||||||||||||||||||||
| Net interest income (taxable-equivalent basis) | $ | 18,040 | $ | 16,811 | $ | 14,022 | ||||||||||||||||||||||||||||||
| Net interest margin (taxable-equivalent basis) | 4.75 | % | 4.71 | % | 4.18 | % | ||||||||||||||||||||||||||||||
| Average interest-earning assets to interest-bearing liabilities | 130.2 | % | 130.8 | % | 125.8 | % | ||||||||||||||||||||||||||||||
| (1) | Calculated using daily averages. |
| (2) | Average loans are gross, including nonaccrual loans and overdrafts (net of deferred loan fees and before the allowance for loan losses). Interest on loans includes net deferred fees and costs, and other loan fees of $1.4 million, $1.2 million and $515 thousand in the three months ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively. |
| (3) | Other assets include bank-owned life insurance, tax lien certificates, OREO, fixed assets, interest receivable, prepaid expense and others. |
C1 Financial, Inc.
Average Balance Sheets - Unaudited
(Dollars in thousands)
| For the Nine Months Ended | ||||||||||||||||||||||||
| September 30, 2015 | September 30, 2014 | |||||||||||||||||||||||
| Average Balances (1) | Income/ Expense | Yields/ Rates | Average Balances (1) | Income/ Expense | Yields/ Rates | |||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||
| Loans receivable (2) | $ | 1,290,074 | $ | 56,803 | 5.89 | % | $ | 1,065,815 | $ | 46,481 | 5.83 | % | ||||||||||||
| Securities available for sale and other securities | 250 | 9 | 4.56 | % | 520 | 59 | 15.25 | % | ||||||||||||||||
| Federal funds sold and balances at Federal Reserve Bank | 139,866 | 259 | 0.25 | % | 195,850 | 355 | 0.24 | % | ||||||||||||||||
| Time deposits in other financial institutions | 132 | - | 0.44 | % | - | - | 0.00 | % | ||||||||||||||||
| FHLB stock | 11,048 | 359 | 4.35 | % | 8,554 | 257 | 4.01 | % | ||||||||||||||||
| Total interest-earning assets | 1,441,370 | 57,430 | 5.33 | % | 1,270,739 | 47,152 | 4.96 | % | ||||||||||||||||
| Noninterest-earning assets | ||||||||||||||||||||||||
| Cash and due from banks | 37,668 | 41,739 | ||||||||||||||||||||||
| Other assets (3) | 147,886 | 121,089 | ||||||||||||||||||||||
| Total noninterest-earning assets | 185,554 | 162,828 | ||||||||||||||||||||||
| Total assets | $ | 1,626,924 | $ | 1,433,567 | ||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Time | $ | 267,148 | 2,256 | 1.13 | % | $ | 359,436 | 2,919 | 1.09 | % | ||||||||||||||
| Money market | 431,168 | 1,411 | 0.44 | % | 342,898 | 1,103 | 0.43 | % | ||||||||||||||||
| Interest-bearing demand | 148,831 | 411 | 0.37 | % | 142,661 | 405 | 0.38 | % | ||||||||||||||||
| Savings | 38,917 | 65 | 0.22 | % | 38,344 | 64 | 0.22 | % | ||||||||||||||||
| Total interest-bearing deposits | 886,064 | 4,143 | 0.63 | % | 883,339 | 4,491 | 0.68 | % | ||||||||||||||||
| Other interest-bearing liabilities: | ||||||||||||||||||||||||
| FHLB advances | 225,483 | 2,861 | 1.70 | % | 162,499 | 1,852 | 1.52 | % | ||||||||||||||||
| Other borrowings | - | - | 0.00 | % | 3,000 | 44 | 1.96 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,111,547 | 7,004 | 0.84 | % | 1,048,838 | 6,387 | 0.81 | % | ||||||||||||||||
| Noninterest-bearing liabilities and stockholders' equity: | ||||||||||||||||||||||||
| Demand deposits | 317,078 | 236,666 | ||||||||||||||||||||||
| Other liabilities | 4,967 | 4,902 | ||||||||||||||||||||||
| Stockholders' equity | 193,332 | 143,161 | ||||||||||||||||||||||
| Total noninterest-bearing liabilities and stockholder's equity | 515,377 | 384,729 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,626,924 | $ | 1,433,567 | ||||||||||||||||||||
| Interest rate spread (taxable-equivalent basis) | 4.49 | % | 4.15 | % | ||||||||||||||||||||
| Net interest income (taxable-equivalent basis) | $ | 50,426 | $ | 40,765 | ||||||||||||||||||||
| Net interest margin (taxable-equivalent basis) | 4.68 | % | 4.29 | % | ||||||||||||||||||||
| Average interest-earning assets to interest-bearing liabilities | 129.7 | % | 121.2 | % | ||||||||||||||||||||
| (1) | Calculated using daily averages. |
| (2) | Average loans are gross, including nonaccrual loans and overdrafts (net of deferred loan fees and before the allowance for loan losses). Interest on loans includes net deferred fees and costs, and other loan fees of $3.5 million and $1.6 million in the nine months ended September 30, 2015 and September 30, 2014, respectively. |
| (3) | Other assets include bank-owned life insurance, tax lien certificates, OREO, fixed assets, interest receivable, prepaid expense and others. |
C1 Financial, Inc.
Selected Quarterly Financial Data - Unaudited
(In thousands, except per share and employee data)
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | ||||||||||||||||
| Statement of Income Data | ||||||||||||||||||||
| Interest income | $ | 20,546 | $ | 19,115 | $ | 17,769 | $ | 17,158 | $ | 16,245 | ||||||||||
| Interest expense | 2,506 | 2,304 | 2,194 | 2,239 | 2,223 | |||||||||||||||
| Net interest income | 18,040 | 16,811 | 15,575 | 14,919 | 14,022 | |||||||||||||||
| Provision (reversal of provision) for loan losses | (67 | ) | 1,276 | 191 | (1 | ) | 207 | |||||||||||||
| Bargain purchase gain | - | - | - | - | 37 | |||||||||||||||
| Total noninterest income | 2,114 | 4,335 | 1,602 | 1,554 | 1,797 | |||||||||||||||
| Total noninterest expense | 11,972 | 11,845 | 11,835 | 14,005 | 11,280 | |||||||||||||||
| Income before income taxes | 8,249 | 8,025 | 5,151 | 2,469 | 4,332 | |||||||||||||||
| Income tax expense | 3,244 | 3,282 | 1,977 | 1,127 | 1,706 | |||||||||||||||
| Net income | 5,005 | 4,743 | 3,174 | 1,342 | 2,626 | |||||||||||||||
| Selected Performance Metrics | ||||||||||||||||||||
| Return on average assets | 1.18 | % | 1.18 | % | 0.82 | % | 0.34 | % | 0.70 | % | ||||||||||
| Return on average equity | 10.02 | % | 9.88 | % | 6.81 | % | 2.84 | % | 6.47 | % | ||||||||||
| Efficiency ratio (1) | 59.4 | % | 56.0 | % | 68.9 | % | 85.0 | % | 71.3 | % | ||||||||||
| Full-time equivalent employees at period end | 239 | 247 | 244 | 238 | 246 | |||||||||||||||
| Revenue per average number of employees (1) | $ | 367 | $ | 384 | $ | 326 | $ | 307 | $ | 305 | ||||||||||
| Average assets per average number of employees (1) | 6,888 | 6,594 | 6,541 | 6,414 | 6,356 | |||||||||||||||
| Per Share Outstanding Data | ||||||||||||||||||||
| Net earnings per share | $ | 0.31 | $ | 0.29 | $ | 0.20 | $ | 0.08 | $ | 0.18 | ||||||||||
| Diluted net earnings per share | $ | 0.31 | $ | 0.29 | $ | 0.20 | $ | 0.08 | $ | 0.18 | ||||||||||
| Weighted average shares | 16,101 | 16,101 | 16,101 | 16,101 | 14,572 | |||||||||||||||
| Weighted average shares - diluted | 16,101 | 16,101 | 16,101 | 16,101 | 14,572 | |||||||||||||||
| Book value per share | $ | 12.39 | $ | 12.08 | $ | 11.79 | $ | 11.59 | $ | 11.51 | ||||||||||
| Tangible book value per share (1) | $ | 12.33 | $ | 12.02 | $ | 11.72 | $ | 11.51 | $ | 11.43 | ||||||||||
| Common shares outstanding at period end | 16,101 | 16,101 | 16,101 | 16,101 | 16,101 | |||||||||||||||
| Market value per share at period end | $ | 19.05 | $ | 19.38 | $ | 18.75 | $ | 18.29 | $ | 18.13 | ||||||||||
| Market range per share: | ||||||||||||||||||||
| High | 19.77 | 19.84 | 19.10 | 19.70 | 18.77 | |||||||||||||||
| Low | 17.66 | 17.81 | 16.25 | 15.98 | 16.66 | |||||||||||||||
| Balance Sheet Data | ||||||||||||||||||||
| Cash and cash equivalents | $ | 175,289 | $ | 165,200 | $ | 182,824 | $ | 185,703 | $ | 283,741 | ||||||||||
| Other securities (included in Other assets in consolidated balance sheet) | 250 | 250 | 250 | 250 | 250 | |||||||||||||||
| Total loans | 1,390,275 | 1,361,459 | 1,256,606 | 1,188,522 | 1,134,351 | |||||||||||||||
| Loans originated by C1 Bank (Nonacquired) | 1,095,247 | 1,046,227 | 925,511 | 840,275 | 757,529 | |||||||||||||||
| Loans not originated by C1 Bank (Acquired) | 295,028 | 315,232 | 331,095 | 348,247 | 376,822 | |||||||||||||||
| Net deferred loan fees | (5,726 | ) | (5,599 | ) | (4,881 | ) | (4,142 | ) | (3,759 | ) | ||||||||||
| Loans receivable, gross (2) | 1,384,549 | 1,355,860 | 1,251,725 | 1,184,380 | 1,130,592 | |||||||||||||||
| Allowance for loan losses | (7,932 | ) | (7,675 | ) | (5,787 | ) | (5,324 | ) | (5,441 | ) | ||||||||||
| Loans receivable, net | 1,376,617 | 1,348,185 | 1,245,938 | 1,179,056 | 1,125,151 | |||||||||||||||
| Total assets | 1,712,483 | 1,677,806 | 1,596,739 | 1,536,691 | 1,548,045 | |||||||||||||||
| Total interest-bearing deposits | 928,019 | 893,815 | 881,318 | 888,959 | 870,820 | |||||||||||||||
| Total deposits | 1,264,380 | 1,215,988 | 1,199,828 | 1,167,502 | 1,164,964 | |||||||||||||||
| Borrowings | 242,000 | 261,000 | 202,500 | 178,500 | 192,000 | |||||||||||||||
| Federal Home Loan Bank | 242,000 | 261,000 | 202,500 | 178,500 | 189,000 | |||||||||||||||
| Other | - | - | - | - | 3,000 | |||||||||||||||
| Total liabilities | 1,512,923 | 1,483,251 | 1,406,927 | 1,350,053 | 1,362,749 | |||||||||||||||
| Total stockholders’ equity | 199,560 | 194,555 | 189,812 | 186,638 | 185,296 | |||||||||||||||
| Tangible stockholders’ equity (1) | 198,557 | 193,482 | 188,659 | 185,402 | 183,973 | |||||||||||||||
| Selected Average Balance Sheet Data | ||||||||||||||||||||
| Loans receivable, gross (2) | $ | 1,374,425 | $ | 1,286,665 | $ | 1,207,295 | $ | 1,145,230 | $ | 1,098,466 | ||||||||||
| Securities available for sale and other securities | 250 | 250 | 250 | 250 | 250 | |||||||||||||||
| Earning assets | 1,507,901 | 1,430,889 | 1,383,959 | 1,395,052 | 1,330,762 | |||||||||||||||
| Total assets | 1,687,662 | 1,615,468 | 1,576,419 | 1,552,264 | 1,493,667 | |||||||||||||||
| Total interest-bearing deposits | 912,416 | 860,494 | 884,979 | 883,373 | 877,488 | |||||||||||||||
| Total deposits | 1,237,460 | 1,185,325 | 1,186,076 | 1,174,001 | 1,147,816 | |||||||||||||||
| Borrowings | 245,847 | 233,065 | 197,000 | 186,306 | 179,964 | |||||||||||||||
| Total stockholders’ equity | 198,228 | 192,611 | 189,054 | 187,270 | 160,933 | |||||||||||||||
| Yields Earned and Rates Paid | ||||||||||||||||||||
| Loans receivable, gross (2) | 5.87 | % | 5.89 | % | 5.90 | % | 5.84 | % | 5.79 | % | ||||||||||
| Adjusted loans receivable, gross (1),(3) | 5.77 | % | 5.79 | % | 5.76 | % | 5.65 | % | 5.65 | % | ||||||||||
| Securities available for sale and other securities | 4.56 | % | 4.56 | % | 4.56 | % | 4.56 | % | 4.56 | % | ||||||||||
| Earning assets | 5.41 | % | 5.36 | % | 5.21 | % | 4.88 | % | 4.84 | % | ||||||||||
| Total interest-bearing deposits | 0.63 | % | 0.61 | % | 0.64 | % | 0.66 | % | 0.68 | % | ||||||||||
| Total deposits | 0.46 | % | 0.44 | % | 0.47 | % | 0.50 | % | 0.52 | % | ||||||||||
| Adjusted total deposits (1),(4) | 0.46 | % | 0.45 | % | 0.48 | % | 0.50 | % | 0.53 | % | ||||||||||
| Borrowings | 1.71 | % | 1.72 | % | 1.66 | % | 1.63 | % | 1.59 | % | ||||||||||
| Total interest-bearing liabilities | 0.86 | % | 0.85 | % | 0.82 | % | 0.83 | % | 0.83 | % | ||||||||||
| Net interest margin (NIM) | 4.75 | % | 4.71 | % | 4.56 | % | 4.24 | % | 4.18 | % | ||||||||||
| Adjusted NIM (1),(5) | 4.64 | % | 4.60 | % | 4.41 | % | 4.05 | % | 4.03 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Total capital to risk-weighted assets (6) | 14.04 | % | 13.60 | % | 14.01 | % | 14.74 | % | 15.45 | % | ||||||||||
| Tier 1 capital to risk-weighted assets (6) | 13.51 | % | 13.08 | % | 13.59 | % | 14.33 | % | 14.96 | % | ||||||||||
| Common equity tier 1 capital to risk-weighted assets (6) | 13.51 | % | 13.08 | % | 13.59 | % | N/A | N/A | ||||||||||||
| Tier 1 leverage ratio (6) | 11.79 | % | 12.01 | % | 12.01 | % | 11.95 | % | 12.32 | % | ||||||||||
| Tangible Equity / Tangible Assets (1) | 11.60 | % | 11.54 | % | 11.82 | % | 12.07 | % | 11.89 | % | ||||||||||
| Equity / Assets | 11.65 | % | 11.60 | % | 11.89 | % | 12.15 | % | 11.97 | % | ||||||||||
| Average Equity / Average Assets | 11.75 | % | 11.92 | % | 11.99 | % | 12.06 | % | 10.77 | % |
| Asset Quality Data | ||||||||||||||||||||
| Nonacquired nonperforming assets | $ | 2,008 | $ | 340 | $ | 428 | $ | 487 | $ | 567 | ||||||||||
| Nonaccrual loans | 2,008 | 340 | 428 | 443 | 523 | |||||||||||||||
| Other real estate owned (OREO) | - | - | - | 44 | 44 | |||||||||||||||
| Nonacquired restructured loans (7) | - | - | - | - | - | |||||||||||||||
| Nonacquired nonperforming assets to nonacquired loans plus OREO | 0.18 | % | 0.03 | % | 0.05 | % | 0.06 | % | 0.07 | % | ||||||||||
| Acquired nonperforming assets | $ | 41,256 | $ | 44,804 | $ | 49,597 | $ | 55,323 | $ | 58,004 | ||||||||||
| Nonaccrual loans | 14,766 | 17,118 | 19,276 | 20,451 | 20,092 | |||||||||||||||
| OREO | 26,490 | 27,686 | 30,321 | 34,872 | 37,912 | |||||||||||||||
| Acquired restructured loans | 961 | 891 | 900 | 906 | 913 | |||||||||||||||
| Acquired nonperforming assets to acquired loans plus OREO | 12.83 | % | 13.07 | % | 13.72 | % | 14.44 | % | 13.99 | % | ||||||||||
| Total nonperforming assets | $ | 43,264 | $ | 45,144 | $ | 50,025 | $ | 55,810 | $ | 58,571 | ||||||||||
| Nonaccrual loans | 16,774 | 17,458 | 19,704 | 20,894 | 20,615 | |||||||||||||||
| OREO | 26,490 | 27,686 | 30,321 | 34,916 | 37,956 | |||||||||||||||
| Total restructured loans | 961 | 891 | 900 | 906 | 913 | |||||||||||||||
| Total nonperforming assets to total loans plus OREO | 3.05 | % | 3.25 | % | 3.89 | % | 4.56 | % | 5.00 | % | ||||||||||
| Net charge-offs (recoveries) | $ | (324 | ) | $ | (612 | ) | $ | (272 | ) | $ | 116 | $ | (641 | ) | ||||||
| Charge-offs | 94 | 69 | 4 | 552 | 157 | |||||||||||||||
| Recoveries | (418 | ) | (681 | ) | (276 | ) | (436 | ) | (798 | ) | ||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Total nonperforming loans to loans receivable | 1.21 | % | 1.28 | % | 1.57 | % | 1.76 | % | 1.82 | % | ||||||||||
| Total nonperforming assets to total assets | 2.53 | % | 2.69 | % | 3.13 | % | 3.63 | % | 3.78 | % | ||||||||||
| Allowance for loan losses to nonperforming loans | 47.29 | % | 43.96 | % | 29.37 | % | 25.48 | % | 26.39 | % | ||||||||||
| Annualized net charge-offs (recoveries) to total average loans | (0.09 | )% | (0.19 | )% | (0.09 | )% | 0.04 | % | (0.23 | )% | ||||||||||
| Annualized nonacquired net charge-offs (recoveries) to average nonacquired loans | (0.01 | )% | (0.14 | )% | (0.01 | )% | 0.02 | % | (0.08 | )% | ||||||||||
| Allowance for loan losses to total loans receivable | 0.57 | % | 0.56 | % | 0.46 | % | 0.45 | % | 0.48 | % | ||||||||||
| Allowance for loan losses to nonacquired loans | 0.72 | % | 0.73 | % | 0.63 | % | 0.63 | % | 0.72 | % | ||||||||||
| Texas ratio (8) | 21.0 | % | 22.4 | % | 25.7 | % | 29.3 | % | 30.9 | % |
| Loan Composition | ||||||||||||||||||||
| Nonacquired loans by type | ||||||||||||||||||||
| 1-4 family residential real estate | $ | 181,431 | $ | 146,192 | $ | 132,253 | $ | 123,421 | $ | 116,244 | ||||||||||
| Owner occupied commercial real estate | 154,748 | 136,789 | 139,780 | 124,067 | 107,530 | |||||||||||||||
| Nonowner occupied commercial real estate | 385,605 | 407,654 | 343,539 | 311,239 | 275,598 | |||||||||||||||
| Secured by farmland commercial real estate | 51,452 | 52,876 | 54,774 | 57,825 | 59,009 | |||||||||||||||
| Multifamily commercial real estate | 26,812 | 26,721 | 26,993 | 27,385 | 26,256 | |||||||||||||||
| Construction | 152,442 | 135,586 | 92,389 | 88,072 | 75,126 | |||||||||||||||
| Commercial | 63,972 | 63,190 | 57,683 | 58,809 | 58,450 | |||||||||||||||
| Consumer | 78,785 | 77,219 | 78,100 | 49,457 | 39,316 | |||||||||||||||
| Acquired loans by type | ||||||||||||||||||||
| 1-4 family residential real estate | $ | 85,807 | $ | 90,516 | $ | 96,758 | $ | 100,995 | $ | 105,083 | ||||||||||
| Owner occupied commercial real estate | 89,642 | 95,445 | 99,859 | 107,169 | 113,957 | |||||||||||||||
| Nonowner occupied commercial real estate | 76,579 | 83,227 | 86,089 | 88,363 | 95,549 | |||||||||||||||
| Secured by farmland commercial real estate | 1,907 | 1,941 | 1,977 | 2,013 | 3,242 | |||||||||||||||
| Multifamily commercial real estate | 4,924 | 5,040 | 5,140 | 5,516 | 5,941 | |||||||||||||||
| Construction | 16,381 | 16,985 | 18,738 | 19,364 | 20,069 | |||||||||||||||
| Commercial | 12,968 | 14,556 | 14,704 | 16,551 | 24,423 | |||||||||||||||
| Consumer | 6,820 | 7,522 | 7,830 | 8,276 | 8,558 | |||||||||||||||
| New loan originations (9) | $ | 93,459 | $ | 177,090 | $ | 176,356 | $ | 139,009 | $ | 141,436 | ||||||||||
| Unfunded commitments (includes loans, unused lines and standby letters of credit) | 210,389 | 237,877 | 245,051 | 189,049 | 181,224 | |||||||||||||||
| Deposit Composition | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 336,361 | $ | 322,173 | $ | 318,510 | $ | 278,543 | $ | 294,144 | ||||||||||
| Interest-bearing demand | 177,688 | 148,724 | 146,873 | 140,598 | 135,623 | |||||||||||||||
| Money market and savings | 483,745 | 483,157 | 460,933 | 435,105 | 398,000 | |||||||||||||||
| Retail time | 246,913 | 247,700 | 251,825 | 286,979 | 310,243 | |||||||||||||||
| Jumbo time (10) | 19,673 | 14,234 | 21,687 | 26,277 | 26,954 |
(1) See below for the Generally Accepted Accounting Principles (GAAP) reconciliation and explanation of non-GAAP financial measures.
(2) Total loans, net of deferred loan fees and before the allowance for loan losses. Yield on gross loans is calculated on a 365-day basis and may differ from regulatory “Uniform Bank Performance Report” (UBPR) yield, which annualizes quarterly data by a factor of 4 (Section II, UBPR User’s Guide).
(3) Adjusted yield earned on loans receivable excludes loan accretion from the acquired loan portfolio.
(4) Adjusted rate paid on total deposits excludes amortization of premium for acquired time deposits.
(5) Adjusted net interest margin excludes loan accretion from the acquired loan portfolio, and amortization of premiums for acquired time deposits and Federal Home Loan Bank advances.
(6) Ratios are calculated under Interim Final Basel III rules beginning in 1Q15. Ratios are calculated under Basel I rules prior to 1Q15.
(7) Restructured loans include accruing and nonaccrual troubled debt restructurings. Nonaccrual restructured loans are included in nonaccrual loans.
(8) Texas ratio is calculated as nonperforming assets divided by tangible stockholders’ equity plus allowance for loan losses.
(9) New loan originations represent new loan commitments during the periods presented.
(10) Jumbo time deposits are deposits over $250 thousand.
C1 Financial, Inc.
Generally Accepted Accounting Principles (GAAP) Reconciliation and
Explanation of Non-GAAP Financial Measures
(In thousands, except per share and employee data)
Some of the financial measures included in this earnings release are not measures of financial performance recognized by GAAP. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition and results of operations computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP measures that other companies use. The following tables provide a more detailed analysis of these non-GAAP financial measures.
| 3Q15 | 2Q15 | 1Q15 | 4Q14 | 3Q14 | ||||||||||||||||
| Loan loss reserves | ||||||||||||||||||||
| Allowance for loan losses | $ | 7,932 | $ | 7,675 | $ | 5,787 | $ | 5,324 | $ | 5,441 | ||||||||||
| Acquired performing loans discount | 2,830 | 3,047 | 3,242 | 3,532 | 3,811 | |||||||||||||||
| Total | $ | 10,762 | $ | 10,722 | $ | 9,029 | $ | 8,856 | $ | 9,252 | ||||||||||
| Loans receivable, gross | $ | 1,390,275 | $ | 1,361,459 | $ | 1,256,606 | $ | 1,188,522 | $ | 1,134,351 | ||||||||||
| Allowance for loan losses to total loans receivable | 0.57 | % | 0.56 | % | 0.46 | % | 0.45 | % | 0.48 | % | ||||||||||
| Allowance plus performing loans discount to total loans receivable | 0.77 | % | 0.79 | % | 0.72 | % | 0.75 | % | 0.82 | % | ||||||||||
| Efficiency ratio | ||||||||||||||||||||
| Noninterest expense | $ | 11,972 | $ | 11,845 | $ | 11,835 | $ | 14,005 | $ | 11,280 | ||||||||||
| Taxable-equivalent net interest income | $ | 18,040 | $ | 16,811 | $ | 15,575 | $ | 14,919 | $ | 14,022 | ||||||||||
| Noninterest income | $ | 2,114 | $ | 4,335 | $ | 1,602 | $ | 1,554 | $ | 1,797 | ||||||||||
| Gains on sales of securities | - | - | - | - | - | |||||||||||||||
| Adjusted noninterest income | $ | 2,114 | $ | 4,335 | $ | 1,602 | $ | 1,554 | $ | 1,797 | ||||||||||
| Efficiency ratio | 59.4 | % | 56.0 | % | 68.9 | % | 85.0 | % | 71.3 | % | ||||||||||
| Revenue and average assets per average number of employees | ||||||||||||||||||||
| Interest income | $ | 20,546 | $ | 19,115 | $ | 17,769 | $ | 17,158 | $ | 16,245 | ||||||||||
| Noninterest income | 2,114 | 4,335 | 1,602 | 1,554 | 1,797 | |||||||||||||||
| Total revenue | $ | 22,660 | $ | 23,450 | $ | 19,371 | $ | 18,712 | $ | 18,042 | ||||||||||
| Total revenue annualized | $ | 89,901 | $ | 94,058 | $ | 78,560 | $ | 74,238 | $ | 71,580 | ||||||||||
| Total average assets | $ | 1,687,662 | $ | 1,615,468 | $ | 1,576,419 | $ | 1,552,264 | $ | 1,493,667 | ||||||||||
| Average number of employees | 245 | 245 | 241 | 242 | 235 | |||||||||||||||
| Revenue per average number of employees | $ | 367 | $ | 384 | $ | 326 | $ | 307 | $ | 305 | ||||||||||
| Average assets per average number of employees | $ | 6,888 | $ | 6,594 | $ | 6,541 | $ | 6,414 | $ | 6,356 | ||||||||||
| Tangible stockholders' equity and Tangible book value per share | ||||||||||||||||||||
| Total stockholders' equity | $ | 199,560 | $ | 194,555 | $ | 189,812 | $ | 186,638 | $ | 185,296 | ||||||||||
| Less: Goodwill | (249 | ) | (249 | ) | (249 | ) | (249 | ) | (249 | ) | ||||||||||
| Other intangible assets | (754 | ) | (824 | ) | (904 | ) | (987 | ) | (1,074 | ) | ||||||||||
| Tangible stockholders' equity | $ | 198,557 | $ | 193,482 | $ | 188,659 | $ | 185,402 | $ | 183,973 | ||||||||||
| Common shares outstanding | 16,101 | 16,101 | 16,101 | 16,101 | 16,101 | |||||||||||||||
| Book value per share | $ | 12.39 | $ | 12.08 | $ | 11.79 | $ | 11.59 | $ | 11.51 | ||||||||||
| Tangible book value per share | 12.33 | 12.02 | 11.72 | 11.51 | 11.43 | |||||||||||||||
| Adjusted yield earned on loans | ||||||||||||||||||||
| Reported yield on loans | 5.87 | % | 5.89 | % | 5.90 | % | 5.84 | % | 5.79 | % | ||||||||||
| Effect of accretion income on acquired loans | (0.10 | )% | (0.10 | )% | (0.14 | )% | (0.19 | )% | (0.14 | )% | ||||||||||
| Adjusted yield on loans | 5.77 | % | 5.79 | % | 5.76 | % | 5.65 | % | 5.65 | % | ||||||||||
| Adjusted rate paid on total deposits | ||||||||||||||||||||
| Reported rate paid on total deposits | 0.46 | % | 0.44 | % | 0.47 | % | 0.50 | % | 0.52 | % | ||||||||||
| Effect of premium amortization on acquired deposits | 0.00 | % | 0.01 | % | 0.01 | % | 0.00 | % | 0.01 | % | ||||||||||
| Adjusted rate paid on total deposits | 0.46 | % | 0.45 | % | 0.48 | % | 0.50 | % | 0.53 | % | ||||||||||
| Adjusted net interest margin | ||||||||||||||||||||
| Reported net interest margin | 4.75 | % | 4.71 | % | 4.56 | % | 4.24 | % | 4.18 | % | ||||||||||
| Effect of accretion income on acquired loans | (0.09 | )% | (0.09 | )% | (0.12 | )% | (0.16 | )% | (0.11 | )% | ||||||||||
| Effect of premium amortization on acquired deposits and borrowings | (0.02 | )% | (0.02 | )% | (0.03 | )% | (0.03 | )% | (0.04 | )% | ||||||||||
| Adjusted net interest margin | 4.64 | % | 4.60 | % | 4.41 | % | 4.05 | % | 4.03 | % | ||||||||||
| Average excess cash | ||||||||||||||||||||
| Average total deposits | $ | 1,237,460 | $ | 1,185,325 | $ | 1,186,076 | $ | 1,174,001 | $ | 1,147,816 | ||||||||||
| Borrowings due in one year or less | 16,136 | 17,750 | 25,189 | 28,940 | 34,753 | |||||||||||||||
| Total base for liquidity | $ | 1,253,596 | $ | 1,203,075 | $ | 1,211,265 | $ | 1,202,941 | $ | 1,182,569 | ||||||||||
| Minimum liquidity level (10% of base) (a) | $ | 125,360 | $ | 120,308 | $ | 121,127 | $ | 120,294 | $ | 118,257 | ||||||||||
| Average cash and cash equivalents (b) | 159,767 | 168,740 | 204,588 | 271,827 | 262,617 | |||||||||||||||
| Cash above liquidity level (b)-(a) | 34,407 | 48,432 | 83,461 | 151,533 | 144,360 | |||||||||||||||
| Less estimated short-term deposits | (23,834 | ) | (20,823 | ) | (11,353 | ) | (24,421 | ) | (28,440 | ) | ||||||||||
| Average excess cash | $ | 10,573 | $ | 27,609 | $ | 72,108 | $ | 127,112 | $ | 115,920 | ||||||||||
| Tangible equity to tangible assets | ||||||||||||||||||||
| Total stockholders' equity | $ | 199,560 | $ | 194,555 | $ | 189,812 | $ | 186,638 | $ | 185,296 | ||||||||||
| Less: Goodwill | (249 | ) | (249 | ) | (249 | ) | (249 | ) | (249 | ) | ||||||||||
| Other intangible assets | (754 | ) | (824 | ) | (904 | ) | (987 | ) | (1,074 | ) | ||||||||||
| Tangible stockholders' equity | $ | 198,557 | $ | 193,482 | $ | 188,659 | $ | 185,402 | $ | 183,973 | ||||||||||
| Total assets | $ | 1,712,483 | $ | 1,677,806 | $ | 1,596,739 | $ | 1,536,691 | $ | 1,548,045 | ||||||||||
| Less: Goodwill | (249 | ) | (249 | ) | (249 | ) | (249 | ) | (249 | ) | ||||||||||
| Other intangible assets | (754 | ) | (824 | ) | (904 | ) | (987 | ) | (1,074 | ) | ||||||||||
| Tangible assets | $ | 1,711,480 | $ | 1,676,733 | $ | 1,595,586 | $ | 1,535,455 | $ | 1,546,722 | ||||||||||
| Equity/Assets | 11.65 | % | 11.60 | % | 11.89 | % | 12.15 | % | 11.97 | % | ||||||||||
| Tangible Equity/Tangible Assets | 11.60 | % | 11.54 | % | 11.82 | % | 12.07 | % | 11.89 | % |
Definitions of Non-GAAP financial measures
Allowance for loan losses plus performing loans discount to total loans receivable adds the remaining discount on acquired performing loans to the allowance for loan losses to determine the total reserves and loan discounts established against our loans. Our management believes that this metric provides useful information for investors to analyze the overall level of reserves in banks that have completed acquisitions with no allowance carryover.
Efficiency ratio is defined as total noninterest expense divided by the sum of taxable-equivalent net interest income and noninterest income. Noninterest income is adjusted for nonrecurring gains and losses on sales of securities. This ratio is important to investors looking for a measure of efficiency in the Company's productivity measured by the amount of revenue generated for each dollar spent.
Revenue per average number of employees is annualized total interest income and total noninterest income divided by the average number of employees during the period and measures the Company's productivity by calculating the average amount of revenue generated per employee. Average assets per average number of employees is average assets divided by the average number of employees during the period and measures the average value of assets per employee.
Tangible stockholders' equity is defined as total equity reduced by goodwill and other intangible assets. Tangible book value per share is tangible stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets. We have not considered loan servicing rights as an intangible asset for purposes of this calculation.
Adjusted yield earned on loans is our yield on loans after excluding loan accretion from our acquired loan portfolio. Our management uses this metric to better assess the impact of purchase accounting on yield on loans, as the effect of loan discounts accretion is expected to decrease as the acquired loans mature or roll off of our balance sheet.
Adjusted rate paid on total deposits is our cost of deposits after excluding amortization of premiums for acquired time deposits. Our management uses this metric to better assess the impact of purchase accounting on cost of deposits, as the effect of amortization of premiums related to deposits is expected to decrease as the acquired deposits mature or roll off of our balance sheet.
Adjusted net interest margin is net interest margin after excluding loan accretion from the acquired loan portfolio and amortization of premiums for acquired time deposits and Federal Home Loan Bank advances. Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discounts accretion and amortization of premiums related to deposits or borrowings is expected to decrease as the acquired loans and deposits mature or roll off of our balance sheet.
Average excess cash represents the cash and cash equivalents in excess of our minimum liquidity level (defined as 10% of average total deposits plus borrowings due in one year or less), minus Company estimated short-term deposits. In 2015, based on an historical analysis, we changed our methodology for estimating short-term deposits, which reduced the results beginning in 1Q15.
Tangible equity to tangible assets is defined as total equity reduced by goodwill and other intangible assets, divided by total assets reduced by goodwill and other intangible assets. This measure is important to investors interested in relative changes from period-to-period in total equity and total assets, each exclusive of changes in intangible assets. We have not considered loan servicing rights as an intangible asset for purposes of this calculation.