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| 8-K - 8-K EARNINGS RELEASE Q3 2017 - Blue Hills Bancorp, Inc. | a2017q38-k.htm |
EXHIBIT 99.1
Blue Hills Bancorp, Inc. Reports Third Quarter Earnings
NORWOOD, Mass., October 25, 2017--(GLOBE NEWSWIRE)- Blue Hills Bancorp, Inc. (the “Company” or "Blue Hills Bancorp") (NASDAQ: BHBK), the parent of Blue Hills Bank (the "Bank"), today announced net income of $3.8 million, or $0.16 per diluted share, for the third quarter of 2017 compared to net income of $3.9 million, or $0.16 per diluted share, for the second quarter of 2017 and net income of $1.6 million, or $0.07 per diluted share, for the third quarter of 2016. The third quarter of 2017 included a pre-tax loss of $118,000 ($73,000 after tax, or less than a penny per diluted share) from the sale of a purchased home equity loan portfolio while the second quarter of 2017 included a pre-tax gain of $928,000 ($595,000 after tax, or $0.02 per diluted share) from the sale of the Company's remaining available-for-sale debt securities portfolio. Excluding these items, net income was $3.9 million, or $0.16 per diluted share for the third quarter of 2017 on a non-GAAP basis and $3.3 million, or $0.14 per diluted share, for the second quarter of 2017 on a non-GAAP basis.
For the nine months ended September 30, 2017, net income was $15.2 million, or $0.62 per diluted share compared to $4.7 million, or $0.19 per diluted share, for the nine months ended September 30, 2016. Excluding nonrecurring items, net income for the nine months ended September 30, 2017 on a non-GAAP basis was $9.8 million or $0.40 per share (see page 15 for a reconciliation of GAAP to non-GAAP measures).
Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said, "A key theme for us this year has been improved operating leverage and for the first nine months of 2017 revenues, excluding securities gains and other nonrecurring items, have grown 20% from a year ago while noninterest expense has risen just 5% and has been flat in each of the last three quarters. While we will continue to invest in our businesses to lay the groundwork for future bottom line growth, we have the opportunity to generate continued operating leverage.”
Parent continued, “Adjusted net interest margin, which excludes volatile items, has improved in five straight quarters as our asset sensitive rate risk position has allowed us to benefit from the Fed’s rate hikes. Mortgage banking earnings are up over 50% from the prior year, commercial business loans are up over 40% from a year ago, and deposits at our Seaport Branch, which has been open for about a year, reached $85 million at the end of the third quarter. In September, we announced a tripling of our quarterly dividend to $0.15 per share, representing an over 90% payout of our second quarter earnings. Through dividend payments, buybacks and organic growth, we have brought our tangible common equity ratio down from approximately 24% three years ago to 15.35% at September 30, 2017 and we will continue to consider all options for further deployment of the remaining excess capital. We have come a long way during our three years as a public company and enter the next phase of our evolution to a full-service, diversified community bank with building momentum and optimism for what lies ahead.”
BALANCE SHEET
Compared to June 30, 2017, total assets grew $32 million, or 1%, to $2.5 billion at September 30, 2017. The increase was mainly driven by a $21 million, or 1%, increase in loans and a $19 million, or 7%, increase in held-to-maturity securities. The growth rate in loans during the third quarter was affected by (1) the sale of a $12 million home equity loan portfolio that had been purchased in 2012 and (2) timing issues related to loans that closed in October. Changes in individual loan categories compared to June 30, 2017 were relatively small with growth in commercial business, construction and residential mortgage loans more than offsetting declines in home equity, commercial real estate and consumer loans.
Compared to September 30, 2016, total assets increased $232 million, or 10%. Loans drove the growth in total assets in this comparison, increasing $328 million, or 19%. By category, the increase from September 30, 2016 was due to residential mortgage loans, which were up $159 million, or 21%; commercial real estate loans, which were up $91 million, or 14%; and commercial business loans, which were up $72 million, or 42%. Residential mortgage loan originations were $153 million in the third quarter of 2017 compared to $172 million in the third quarter of 2016 while commercial loans (real estate and non-real estate combined) added to the balance sheet were $64 million in the third quarter of 2017 compared to $82 million in the third quarter of 2016. The growth in loans from September 30, 2016 was partially offset by a $95 million, or 23%, decline in the combination of securities available for sale and held to maturity, primarily due to the sales of the mutual fund investment portfolio and the remaining available-for-sale debt securities portfolio in the first half of 2017.
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Compared to June 30, 2017, deposits grew $20 million, or 1%, to $2.0 billion at September 30, 2017; however, excluding brokered deposits, the increase was $65 million, or 4%. The growth excluding brokered deposits by customer segment was mainly due to increases in consumer and small business deposits while the growth by deposit category was primarily due to an increase in certificates of deposit. Borrowings were $130 million at September 30, 2017 and June 30, 2017.
Compared to September 30, 2016, deposits grew $304 million, or 18%, and included growth in all customer segments (consumer, small business, commercial and municipal). By category, the most significant increases were seen in money market deposits, which were up $148 million, certificates of deposit, which were up $82 million, and brokered certificates of deposit, which were up $65 million. Borrowings declined $79 million, as an $84 million decline in short-term borrowings was partially offset by a $5 million increase in long-term borrowings.
Stockholders’ equity was $399 million at September 30, 2017 compared to $397 million at June 30, 2017 and $390 million at September 30, 2016. The increase from a year ago was mainly due to net income over the past four quarters, which added $19 million to stockholders' equity, partially offset by share repurchases that took place in the fourth quarter of 2016 and dividends, including a special dividend of $0.20 per common share in the second quarter of 2017. There were no share repurchases in the first nine months of 2017.
NET INTEREST AND DIVIDEND INCOME
Reported net interest and dividend income was $17.0 million in the third quarter of 2017, up $546,000, or 3%, from $16.4 million in the second quarter of 2017 and up $2.5 million, or 17%, from $14.5 million in the third quarter of 2016. Reported net interest margin was 2.77% in the third quarter of 2017, up from 2.75% in the second quarter of 2017 and from 2.67% in the third quarter of 2016.
Net interest and dividend income on a fully taxable equivalent basis (referred to herein as "Reported net interest and dividend income (FTE)", a Non-GAAP measure) was $17.0 million in the third quarter of 2017, up $544,000, or 3%, from $16.5 million in the second quarter of 2017, and up $2.5 million, or 17%, from $14.6 million in the third quarter of 2016. Net interest margin on a fully taxable equivalent basis (referred to herein as "Reported net interest margin (FTE)", a Non-GAAP measure) improved to 2.78% in the third quarter of 2017 from 2.76% in the second quarter of 2017 and 2.68% in the third quarter of 2016.
The table shown below provides a reconciliation of reported to adjusted net interest and dividend income and margin for the last five quarters (referred to herein as "Adjusted net interest and dividend income (FTE)" and "Adjusted net interest margin (FTE)", which are Non-GAAP measures). Commentary which follows the table will focus on changes in Adjusted net interest and dividend income (FTE) and Adjusted net interest margin (FTE).
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(Unaudited, dollars in thousands) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||
Net Interest and Dividend Income | |||||||||||||||
Reported net interest and dividend income | $ | 16,954 | $ | 16,408 | $ | 15,881 | $ | 15,950 | $ | 14,495 | |||||
FTE adjustment | 58 | 60 | 66 | 78 | 65 | ||||||||||
Reported net interest and dividend income (FTE) | 17,012 | 16,468 | 15,947 | 16,028 | 14,560 | ||||||||||
Mutual fund dividends (2) | — | — | — | (844 | ) | (96 | ) | ||||||||
Purchase accounting accretion (2) | (103 | ) | (181 | ) | (107 | ) | (137 | ) | (115 | ) | |||||
Accelerated bond accretion on note redemptions | — | — | — | — | (193 | ) | |||||||||
Adjusted net interest and dividend income (FTE) (1) | $ | 16,909 | $ | 16,287 | $ | 15,840 | $ | 15,047 | $ | 14,156 | |||||
Net Interest Margin | |||||||||||||||
Reported net interest margin | 2.77 | % | 2.75 | % | 2.70 | % | 2.81 | % | 2.67 | % | |||||
FTE adjustment | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | ||||||||||
Reported net interest margin (FTE) | 2.78 | 2.76 | 2.71 | 2.82 | 2.68 | ||||||||||
Mutual fund dividends (2) | — | — | 0.03 | (0.10 | ) | 0.03 | |||||||||
Purchase accounting accretion (2) | (0.02 | ) | (0.03 | ) | (0.02 | ) | (0.03 | ) | (0.02 | ) | |||||
Accelerated bond accretion on note redemptions | — | — | — | — | (0.04 | ) | |||||||||
Adjusted net interest margin (FTE) (1) | 2.76 | % | 2.73 | % | 2.72 | % | 2.69 | % | 2.65 | % | |||||
(1) Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully taxable equivalent basis (FTE), using a federal statutory tax rate of 35% (a statutory tax rate of 34% was used prior to the fourth quarter of 2016). Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons. | |||||||||||||||
(2) In calculating the net interest margin impact of mutual fund dividends and purchase accounting accretion, average earning assets were adjusted to remove the average balances associated with each item. In quarters where mutual fund dividend income is low, the removal of the dividend and its related average balance has a positive impact on the adjusted net interest margin. Management believes this adjusted net interest margin is useful to investors because of the volatility or non-recurring nature of certain items from quarter to quarter. The Company sold its investments in mutual funds during the first quarter of 2017. | |||||||||||||||
Adjusted net interest and dividend income (FTE) increased $622,000, or 4%, to $16.9 million in the third quarter of 2017 from $16.3 million in the second quarter of 2017 and was up $2.8 million, or 19%, from $14.2 million in the third quarter of 2016. Adjusted net interest margin (FTE) improved to 2.76% in the third quarter of 2017 from 2.73% in the second quarter of 2017 and 2.65% in the third quarter of 2016. Adjusted net interest and dividend income (FTE) and adjusted net interest margin (FTE) benefited in both comparisons from higher floating rate loan yields related to the interest rate increases announced by the Federal Reserve Bank in June 2017, March 2017, and December 2016. The Company maintains an asset sensitive interest rate risk position. In addition, adjusted net interest and dividend income (FTE) was helped by loan growth, as average loans increased $50 million, or 2%, from the second quarter of this year and $370 million, or 21%, from the third quarter of last year. Compared to the second quarter of 2017, the increase was due to relatively small increases in several loan categories, while compared to the third quarter of 2016, average loan growth was mainly driven by higher levels of residential mortgages, commercial real estate loans, and commercial business loans. Partially offsetting the improvement in adjusted net interest and dividend income (FTE) from the third quarter of 2016, was a decline in average securities.
NONINTEREST INCOME
Noninterest income was $2.8 million in the third quarter of 2017, down from $4.5 million in the second quarter of 2017. The decline reflects (1) a $1.2 million drop in loan level derivative income, which is related to a lower volume of new commercial loan customer interest rate swap contracts. The amount of revenue in the loan level derivative income category can be volatile since it is a function of the amount of commercial loans that customers opt to convert from floating to fixed rate via interest rate swaps in any given quarter; (2) the absence of a $928,000 gain on the sale of the Company's remaining portfolio of available-for-sale debt securities recorded in the second quarter; and (3) a third quarter loss of $118,000 from the sale of the remaining $12 million of a home equity loan portfolio that had been purchased in 2012. These declines were partially offset by a $528,000 increase in miscellaneous income mainly reflecting income on CRA-qualified Small Business Investment Company ("SBIC") investments. Mortgage banking income exceeded $1 million in the second and third quarters, and continues to be a significant contributor to noninterest income.
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Compared to the third quarter of 2016, noninterest income declined $1.3 million, or 32%. This was mainly due to the absence of $562,000 of securities gains and $297,000 of bank-owned life insurance death benefit gains recorded in the year ago quarter and the $118,000 loss on the sale of home equity loans recorded in the current quarter. In addition, loan level derivative income declined by $614,000. These declines were partially offset by a $320,000 increase in miscellaneous income, mainly reflecting income on CRA-qualified SBIC investments.
NONINTEREST EXPENSE
Noninterest expense was $13.4 million in the third and second quarters of 2017 compared to $13.2 million in the third quarter of 2016. The $121,000, or 1%, increase from the third quarter of last year is mainly due to franchise growth, including the opening of the new Seaport branch in the fourth quarter of 2016, as well as the opening of new loan and mortgage production offices. The increases from franchise growth were partially offset by a lower level of professional fees.
ASSET QUALITY
The provision for loan losses reflects management’s assessment of risks inherent in the loan portfolio. The provision for loan losses was $242,000 in the third quarter of 2017 compared to $1.1 million in the second quarter of 2017 and $2.9 million in the third quarter of 2016. Loan growth and loan mix impact the level of provision needed each quarter and loan growth was lower in the third quarter of 2017 than in the second quarter. The provision for loan losses in the third quarter of 2016 included a $2.7 million provision related to problem loans associated with one commercial customer.
The allowance for loan losses as a percentage of total loans was 0.97% at September 30, 2017 and June 30, 2017, compared to 1.01% at September 30, 2016. The Company had net loan recoveries of $89,000 in the third quarter of 2017 compared to net loan charge-offs of $76,000 in the second quarter of 2017 and net loan charge-offs of $3.2 million in the third quarter of 2016. The third quarter of 2016 included $3.3 million of charge-offs related to problem loans associated with one commercial customer.
Nonperforming assets were $11.5 million at September 30, 2017 compared to $12.8 million at June 30, 2017 and $7.8 million at September 30, 2016. The decline in nonperforming assets from June 30, 2017 reflects a lower level of nonaccrual loans, mainly residential mortgages. The increase in nonperforming assets from the third quarter of last year was mainly due to loans secured by one income property that were placed back on nonaccrual in the first quarter of 2017. Nonperforming assets as a percentage of total assets was 0.45% at September 30, 2017 compared to 0.51% at June 30, 2017 and 0.34% at September 30, 2016.
ABOUT BLUE HILLS BANCORP
Blue Hills Bancorp, Inc., with corporate headquarters in Norwood, MA, had assets of $2.5 billion at September 30, 2017 and operates 11 branch offices in Boston, Dedham, Hyde Park, Milton, Nantucket, Norwood, West Roxbury, and Westwood, Massachusetts. Blue Hills Bank is a full service, community bank with its main office in Hyde Park, Massachusetts. The Bank's three branches in Nantucket, Massachusetts operate under the name, Nantucket Bank, a division of Blue Hills Bank. The Bank provides consumer, commercial and municipal deposit and loan products in Eastern Massachusetts through its branch network, loan production offices and eCommerce channels. The Bank offers commercial business and commercial real estate loans in addition to cash management services and commercial deposit accounts. The Bank also serves consumers through a full suite of consumer banking products including checking accounts, mortgage loans, equity lines of credit and traditional savings and certificate of deposit accounts. The Bank has invested substantially in online technology including online account opening and funding, online mortgage applications, online banking, mobile banking, bill pay and mobile deposits. Blue Hills Bank has been serving area residents for over 145 years. For more information about Blue Hills Bank, visit www.bluehillsbank.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, as well as other written communications made from time to time by the Company and its subsidiaries and oral communications made from time to time by authorized officers of the Company, may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the PSLRA). Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.
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The Company cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: our ability to implement successfully our business strategy, which includes significant asset and liability growth; changes that could adversely affect the business in which the Company and the Bank are engaged; prevailing economic and geopolitical conditions; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services. For additional information on some of the risks and important factors that could affect the Company’s future results and financial condition, see “Risk Factors” in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
Media and Investor Contact:
William Parent, 617-360-6520
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Blue Hills Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited; dollars in thousands) | % Change | ||||||||||||
September 30, 2017 | June 30, 2017 | September 30, 2016 | September 30, 2017 vs. June 30, 2017 | September 30, 2017 vs. September 30, 2016 | |||||||||
Assets | |||||||||||||
Cash and due from banks | $ | 16,171 | $ | 17,292 | $ | 15,490 | (6.5 | )% | 4.4 | % | |||
Short term investments | 22,192 | 33,819 | 21,512 | (34.4 | )% | 3.2 | % | ||||||
Total cash and cash equivalents | 38,363 | 51,111 | 37,002 | (24.9 | )% | 3.7 | % | ||||||
Securities available-for-sale, at fair value | 9,943 | 10,437 | 210,273 | (4.7 | )% | (95.3 | )% | ||||||
Securities held-to-maturity, at amortized cost | 302,833 | 283,672 | 197,863 | 6.8 | % | 53.1 | % | ||||||
Federal Home Loan Bank stock, at cost | 9,410 | 11,943 | 13,505 | (21.2 | )% | (30.3 | )% | ||||||
Loans held for sale | 12,268 | 6,789 | 2,134 | 80.7 | % | 474.9 | % | ||||||
Loans: | |||||||||||||
1-4 family residential | 905,585 | 895,015 | 746,366 | 1.2 | % | 21.3 | % | ||||||
Home equity | 77,819 | 84,615 | 80,604 | (8.0 | )% | (3.5 | )% | ||||||
Commercial real estate | 751,209 | 756,093 | 660,458 | (0.6 | )% | 13.7 | % | ||||||
Construction | 88,979 | 78,062 | 71,281 | 14.0 | % | 24.8 | % | ||||||
Total real estate loans | 1,823,592 | 1,813,785 | 1,558,709 | 0.5 | % | 17.0 | % | ||||||
Commercial business | 240,801 | 227,262 | 169,076 | 6.0 | % | 42.4 | % | ||||||
Consumer | 23,142 | 25,047 | 31,435 | (7.6 | )% | (26.4 | )% | ||||||
Total loans | 2,087,535 | 2,066,094 | 1,759,220 | 1.0 | % | 18.7 | % | ||||||
Allowance for loan losses | (20,248 | ) | (19,917 | ) | (17,730 | ) | 1.7 | % | 14.2 | % | |||
Loans, net | 2,067,287 | 2,046,177 | 1,741,490 | 1.0 | % | 18.7 | % | ||||||
Premises and equipment, net | 21,850 | 22,004 | 21,362 | (0.7 | )% | 2.3 | % | ||||||
Accrued interest receivable | 5,802 | 5,362 | 5,388 | 8.2 | % | 7.7 | % | ||||||
Goodwill and core deposit intangible | 9,892 | 10,091 | 10,831 | (2.0 | )% | (8.7 | )% | ||||||
Net deferred tax asset | 9,295 | 8,184 | 8,780 | 13.6 | % | 5.9 | % | ||||||
Bank-owned life insurance | 32,800 | 32,533 | 31,743 | 0.8 | % | 3.3 | % | ||||||
Other assets | 25,673 | 25,606 | 33,295 | 0.3 | % | (22.9 | )% | ||||||
Total assets | $ | 2,545,416 | $ | 2,513,909 | $ | 2,313,666 | 1.3 | % | 10.0 | % | |||
Liabilities and Stockholders' Equity | |||||||||||||
Deposits: | |||||||||||||
NOW and demand | $ | 376,864 | $ | 359,877 | $ | 337,225 | 4.7 | % | 11.8 | % | |||
Regular savings | 244,662 | 246,484 | 270,067 | (0.7 | )% | (9.4 | )% | ||||||
Money market | 666,388 | 674,593 | 518,360 | (1.2 | )% | 28.6 | % | ||||||
Certificates of deposit | 420,765 | 362,261 | 339,064 | 16.1 | % | 24.1 | % | ||||||
Brokered money market | 41,768 | 44,728 | 46,235 | (6.6 | )% | (9.7 | )% | ||||||
Brokered certificates of deposit | 235,106 | 277,320 | 170,506 | (15.2 | )% | 37.9 | % | ||||||
Total deposits | 1,985,553 | 1,965,263 | 1,681,457 | 1.0 | % | 18.1 | % | ||||||
Short-term borrowings | 20,000 | — | 103,700 | NM | (80.7 | )% | |||||||
Long-term debt | 110,000 | 130,000 | 105,000 | (15.4 | )% | 4.8 | % | ||||||
Other liabilities | 30,829 | 21,328 | 33,820 | 44.5 | % | (8.8 | )% | ||||||
Total liabilities | 2,146,382 | 2,116,591 | 1,923,977 | 1.4 | % | 11.6 | % | ||||||
Common stock | 259 | 259 | 261 | — | % | (0.8 | )% | ||||||
Additional paid-in capital | 254,034 | 252,504 | 251,341 | 0.6 | % | 1.1 | % | ||||||
Unearned compensation- ESOP | (19,927 | ) | (20,117 | ) | (20,686 | ) | (0.9 | )% | (3.7 | )% | |||
Retained earnings | 166,282 | 166,033 | 158,620 | 0.1 | % | 4.8 | % | ||||||
Accumulated other comprehensive income (loss) | (1,614 | ) | (1,361 | ) | 153 | 18.6 | % | (1,154.9 | )% | ||||
Total stockholders' equity | 399,034 | 397,318 | 389,689 | 0.4 | % | 2.4 | % | ||||||
Total liabilities and stockholders' equity | $ | 2,545,416 | $ | 2,513,909 | $ | 2,313,666 | 1.3 | % | 10.0 | % | |||
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Blue Hills Bancorp, Inc.
Consolidated Balance Sheet Trend
(Unaudited; dollars in thousands) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||
Assets | |||||||||||||||
Cash and due from banks | $ | 16,171 | $ | 17,292 | $ | 15,594 | $ | 14,752 | $ | 15,490 | |||||
Short term investments | 22,192 | 33,819 | 19,555 | 15,744 | 21,512 | ||||||||||
Total cash and cash equivalents | 38,363 | 51,111 | 35,149 | 30,496 | 37,002 | ||||||||||
Securities available-for-sale, at fair value | 9,943 | 10,437 | 173,834 | 204,836 | 210,273 | ||||||||||
Securities held-to-maturity, at amortized cost | 302,833 | 283,672 | 201,684 | 201,027 | 197,863 | ||||||||||
Federal Home Loan Bank stock, at cost | 9,410 | 11,943 | 14,828 | 13,352 | 13,505 | ||||||||||
Loans held for sale | 12,268 | 6,789 | 1,675 | 2,761 | 2,134 | ||||||||||
Loans: | |||||||||||||||
1-4 family residential | 905,585 | 895,015 | 896,951 | 854,478 | 746,366 | ||||||||||
Home equity | 77,819 | 84,615 | 80,427 | 79,132 | 80,604 | ||||||||||
Commercial real estate | 751,209 | 756,093 | 701,463 | 686,522 | 660,458 | ||||||||||
Construction | 88,979 | 78,062 | 70,855 | 75,950 | 71,281 | ||||||||||
Total real estate loans | 1,823,592 | 1,813,785 | 1,749,696 | 1,696,082 | 1,558,709 | ||||||||||
Commercial business | 240,801 | 227,262 | 210,328 | 205,832 | 169,076 | ||||||||||
Consumer | 23,142 | 25,047 | 27,325 | 29,707 | 31,435 | ||||||||||
Total loans | 2,087,535 | 2,066,094 | 1,987,349 | 1,931,621 | 1,759,220 | ||||||||||
Allowance for loan losses | (20,248 | ) | (19,917 | ) | (18,875 | ) | (18,750 | ) | (17,730 | ) | |||||
Loans, net | 2,067,287 | 2,046,177 | 1,968,474 | 1,912,871 | 1,741,490 | ||||||||||
Premises and equipment, net | 21,850 | 22,004 | 21,858 | 22,034 | 21,362 | ||||||||||
Accrued interest receivable | 5,802 | 5,362 | 5,994 | 6,057 | 5,388 | ||||||||||
Goodwill and core deposit intangible | 9,892 | 10,091 | 10,313 | 10,560 | 10,831 | ||||||||||
Net deferred tax asset | 9,295 | 8,184 | 8,751 | 10,146 | 8,780 | ||||||||||
Bank-owned life insurance | 32,800 | 32,533 | 32,271 | 32,015 | 31,743 | ||||||||||
Other assets | 25,673 | 25,606 | 21,779 | 23,537 | 33,295 | ||||||||||
Total assets | $ | 2,545,416 | $ | 2,513,909 | $ | 2,496,610 | $ | 2,469,692 | $ | 2,313,666 | |||||
Liabilities and Stockholders' Equity | |||||||||||||||
Deposits: | |||||||||||||||
NOW and demand | $ | 376,864 | $ | 359,877 | $ | 342,118 | $ | 331,508 | $ | 337,225 | |||||
Regular savings | 244,662 | 246,484 | 265,116 | 262,984 | 270,067 | ||||||||||
Money market | 666,388 | 674,593 | 622,852 | 573,204 | 518,360 | ||||||||||
Certificates of deposit | 420,765 | 362,261 | 348,042 | 340,114 | 339,064 | ||||||||||
Brokered money market | 41,768 | 44,728 | 50,129 | 53,357 | 46,235 | ||||||||||
Brokered certificates of deposit | 235,106 | 277,320 | 228,465 | 247,520 | 170,506 | ||||||||||
Total deposits | 1,985,553 | 1,965,263 | 1,856,722 | 1,808,687 | 1,681,457 | ||||||||||
Short-term borrowings | 20,000 | — | 118,000 | 146,000 | 103,700 | ||||||||||
Long-term debt | 110,000 | 130,000 | 105,000 | 105,000 | 105,000 | ||||||||||
Other liabilities | 30,829 | 21,328 | 19,944 | 23,098 | 33,820 | ||||||||||
Total liabilities | 2,146,382 | 2,116,591 | 2,099,666 | 2,082,785 | 1,923,977 | ||||||||||
Common stock | 259 | 259 | 259 | 259 | 261 | ||||||||||
Additional paid-in capital | 254,034 | 252,504 | 250,976 | 249,317 | 251,341 | ||||||||||
Unearned compensation- ESOP | (19,927 | ) | (20,117 | ) | (20,306 | ) | (20,496 | ) | (20,686 | ) | |||||
Retained earnings | 166,282 | 166,033 | 168,160 | 161,896 | 158,620 | ||||||||||
Accumulated other comprehensive income (loss) | (1,614 | ) | (1,361 | ) | (2,145 | ) | (4,069 | ) | 153 | ||||||
Total stockholders' equity | 399,034 | 397,318 | 396,944 | 386,907 | 389,689 | ||||||||||
Total liabilities and stockholders' equity | $ | 2,545,416 | $ | 2,513,909 | $ | 2,496,610 | $ | 2,469,692 | $ | 2,313,666 | |||||
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Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income - Quarters
(Unaudited; dollars in thousands, except share data) | Quarters Ended | % Change | |||||||||||
September 30, 2017 | June 30, 2017 | September 30, 2016 | September 30, 2017 vs. June 30, 2017 | September 30, 2017 vs. September 30, 2016 | |||||||||
Interest and fees on loans | $ | 19,721 | $ | 18,715 | $ | 15,113 | 5.4 | % | 30.5 | % | |||
Interest on securities | 1,565 | 1,572 | 2,238 | (0.4 | )% | (30.1 | )% | ||||||
Dividends | 194 | 193 | 312 | 0.5 | % | (37.8 | )% | ||||||
Other | 65 | 94 | 22 | (30.9 | )% | 195.5 | % | ||||||
Total interest and dividend income | 21,545 | 20,574 | 17,685 | 4.7 | % | 21.8 | % | ||||||
Interest on deposits | 4,089 | 3,523 | 2,732 | 16.1 | % | 49.7 | % | ||||||
Interest on borrowings | 502 | 643 | 458 | (21.9 | )% | 9.6 | % | ||||||
Total interest expense | 4,591 | 4,166 | 3,190 | 10.2 | % | 43.9 | % | ||||||
Net interest and dividend income | 16,954 | 16,408 | 14,495 | 3.3 | % | 17.0 | % | ||||||
Provision for loan losses | 242 | 1,118 | 2,872 | (78.4 | )% | (91.6 | )% | ||||||
Net interest and dividend income, after provision for loan losses | 16,712 | 15,290 | 11,623 | 9.3 | % | 43.8 | % | ||||||
Deposit account fees | 385 | 341 | 347 | 12.9 | % | 11.0 | % | ||||||
Interchange and ATM fees | 455 | 388 | 418 | 17.3 | % | 8.9 | % | ||||||
Mortgage banking | 1,146 | 1,219 | 1,262 | (6.0 | )% | (9.2 | )% | ||||||
Loss on sale of purchased home equity portfolio | (118 | ) | — | — | NM | NM | |||||||
Loan level derivative fee income | 156 | 1,367 | 770 | (88.6 | )% | (79.7 | )% | ||||||
Realized securities gains, net | — | 928 | 562 | (100.0 | )% | (100.0 | )% | ||||||
Bank-owned life insurance income | 268 | 261 | 262 | 2.7 | % | 2.3 | % | ||||||
Bank-owned life insurance death benefit gains | — | — | 297 | NM | NM | ||||||||
Miscellaneous | 534 | 6 | 214 | 8,800.0 | % | 149.5 | % | ||||||
Total noninterest income | 2,826 | 4,510 | 4,132 | (37.3 | )% | (31.6 | )% | ||||||
Salaries and employee benefits | 7,979 | 7,664 | 7,596 | 4.1 | % | 5.0 | % | ||||||
Occupancy and equipment | 2,024 | 2,030 | 1,807 | (0.3 | )% | 12.0 | % | ||||||
Data processing | 1,016 | 1,022 | 908 | (0.6 | )% | 11.9 | % | ||||||
Professional fees | 340 | 526 | 743 | (35.4 | )% | (54.2 | )% | ||||||
Advertising | 563 | 489 | 495 | 15.1 | % | 13.7 | % | ||||||
FDIC deposit insurance | 226 | 223 | 270 | 1.3 | % | (16.3 | )% | ||||||
Directors' fees | 382 | 428 | 344 | (10.7 | )% | 11.0 | % | ||||||
Amortization of core deposit intangible | 199 | 222 | 294 | (10.4 | )% | (32.3 | )% | ||||||
Other general and administrative | 626 | 762 | 777 | (17.8 | )% | (19.4 | )% | ||||||
Total noninterest expense | 13,355 | 13,366 | 13,234 | (0.1 | )% | 0.9 | % | ||||||
Income before income taxes | 6,183 | 6,434 | 2,521 | (3.9 | )% | 145.3 | % | ||||||
Provision for income taxes | 2,342 | 2,566 | 891 | (8.7 | )% | 162.9 | % | ||||||
Net income | $ | 3,841 | $ | 3,868 | $ | 1,630 | (0.7 | )% | 135.6 | % | |||
Earnings per common share: | |||||||||||||
Basic | $ | 0.16 | $ | 0.16 | $ | 0.07 | |||||||
Diluted | $ | 0.16 | $ | 0.16 | $ | 0.07 | |||||||
Weighted average shares outstanding: | |||||||||||||
Basic | 23,973,116 | 23,952,443 | 24,129,512 | ||||||||||
Diluted | 24,510,092 | 24,346,553 | 24,307,540 | ||||||||||
Dividends declared per share | $ | 0.15 | $ | 0.05 | $ | 0.03 | |||||||
Special dividends declared per share | $ | — | $ | 0.20 | $ | — | |||||||
8
Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income-Year to Date
(Unaudited; dollars in thousands, except share data) | Year to Date | |||||||
September 30, 2017 | September 30, 2016 | % Change | ||||||
Interest and fees on loans | $ | 55,818 | $ | 42,854 | 30.3 | % | ||
Interest on securities | 5,347 | 6,570 | (18.6 | )% | ||||
Dividends | 544 | 606 | (10.2 | )% | ||||
Other | 191 | 74 | 158.1 | % | ||||
Total interest and dividend income | 61,900 | 50,104 | 23.5 | % | ||||
Interest on deposits | 10,866 | 7,508 | 44.7 | % | ||||
Interest on borrowings | 1,791 | 1,584 | 13.1 | % | ||||
Total interest expense | 12,657 | 9,092 | 39.2 | % | ||||
Net interest and dividend income | 49,243 | 41,012 | 20.1 | % | ||||
Provision for loan losses | 1,417 | 3,958 | (64.2 | )% | ||||
Net interest and dividend income, after provision for loan losses | 47,826 | 37,054 | 29.1 | % | ||||
Deposit account fees | 1,046 | 971 | 7.7 | % | ||||
Interchange and ATM fees | 1,191 | 1,158 | 2.8 | % | ||||
Mortgage banking | 3,105 | 2,037 | 52.4 | % | ||||
Loss on sale of purchased home equity portfolio | (118 | ) | — | NM | ||||
Loan level derivative fee income | 1,687 | 1,731 | (2.5 | )% | ||||
Realized securities gains (losses), net | (94 | ) | 982 | (109.6 | )% | |||
Gain on exchange of investment in Northeast Retirement Services | 5,947 | — | NM | |||||
Bank-owned life insurance income | 786 | 776 | 1.3 | % | ||||
Bank-owned life insurance death benefit gains | — | 506 | NM | |||||
Miscellaneous | 602 | 159 | 278.6 | % | ||||
Total noninterest income | 14,152 | 8,320 | 70.1 | % | ||||
Salaries and employee benefits | 23,206 | 21,619 | 7.3 | % | ||||
Occupancy and equipment | 6,169 | 5,079 | 21.5 | % | ||||
Data processing | 3,082 | 2,472 | 24.7 | % | ||||
Professional fees | 1,735 | 1,902 | (8.8 | )% | ||||
Advertising | 1,419 | 1,746 | (18.7 | )% | ||||
FDIC deposit insurance | 661 | 968 | (31.7 | )% | ||||
Directors' fees | 1,184 | 1,081 | 9.5 | % | ||||
Amortization of core deposit intangible | 668 | 954 | (30.0 | )% | ||||
Other general and administrative | 1,997 | 2,416 | (17.3 | )% | ||||
Total noninterest expense | 40,121 | 38,237 | 4.9 | % | ||||
Income before income taxes | 21,857 | 7,137 | 206.2 | % | ||||
Provision for income taxes | 6,661 | 2,482 | 168.4 | % | ||||
Net income | $ | 15,196 | $ | 4,655 | 226.4 | % | ||
Earnings per common share: | ||||||||
Basic | $ | 0.63 | $ | 0.19 | ||||
Diluted | $ | 0.62 | $ | 0.19 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 23,945,885 | 24,585,570 | ||||||
Diluted | 24,377,662 | 24,708,559 | ||||||
Dividends declared per share | $ | 0.25 | $ | 0.08 | ||||
Special dividends declared per share | $ | 0.20 | $ | — | ||||
9
Blue Hills Bancorp Inc. | |||||||||||||||
Consolidated Statements of Net Income - Trend | |||||||||||||||
Quarters Ended | |||||||||||||||
(Unaudited; dollars in thousands, except share data) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||
2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||
Interest and fees on loans | $ | 19,721 | $ | 18,715 | $ | 17,382 | $ | 16,099 | $ | 15,113 | |||||
Interest on securities | 1,565 | 1,572 | 2,210 | 2,325 | 2,238 | ||||||||||
Dividends | 194 | 193 | 157 | 990 | 312 | ||||||||||
Other | 65 | 94 | 32 | 20 | 22 | ||||||||||
Total interest and dividend income | 21,545 | 20,574 | 19,781 | 19,434 | 17,685 | ||||||||||
Interest on deposits | 4,089 | 3,523 | 3,254 | 2,980 | 2,732 | ||||||||||
Interest on borrowings | 502 | 643 | 646 | 504 | 458 | ||||||||||
Total interest expense | 4,591 | 4,166 | 3,900 | 3,484 | 3,190 | ||||||||||
Net interest and dividend income | 16,954 | 16,408 | 15,881 | 15,950 | 14,495 | ||||||||||
Provision for loan losses | 242 | 1,118 | 57 | 927 | 2,872 | ||||||||||
Net interest and dividend income, after provision for loan losses | 16,712 | 15,290 | 15,824 | 15,023 | 11,623 | ||||||||||
Deposit account fees | 385 | 341 | 320 | 356 | 347 | ||||||||||
Interchange and ATM fees | 455 | 388 | 348 | 388 | 418 | ||||||||||
Mortgage banking | 1,146 | 1,219 | 740 | 436 | 1,262 | ||||||||||
Loss on sale of purchased home equity portfolio | (118 | ) | — | — | — | — | |||||||||
Loan level derivative fee income | 156 | 1,367 | 164 | 640 | 770 | ||||||||||
Realized securities gains (losses), net | — | 928 | (1,022 | ) | 298 | 562 | |||||||||
Gain on exchange of investment in Northeast Retirement Services | — | — | 5,947 | — | — | ||||||||||
Bank-owned life insurance income | 268 | 261 | 257 | 272 | 262 | ||||||||||
Bank-owned life insurance death benefit gains | — | — | — | — | 297 | ||||||||||
Miscellaneous | 534 | 6 | 62 | 1,417 | 214 | ||||||||||
Total noninterest income | 2,826 | 4,510 | 6,816 | 3,807 | 4,132 | ||||||||||
Salaries and employee benefits | 7,979 | 7,664 | 7,563 | 7,234 | 7,596 | ||||||||||
Occupancy and equipment | 2,024 | 2,030 | 2,115 | 2,291 | 1,807 | ||||||||||
Data processing | 1,016 | 1,022 | 1,044 | 988 | 908 | ||||||||||
Professional fees | 340 | 526 | 869 | 736 | 743 | ||||||||||
Advertising | 563 | 489 | 367 | 677 | 495 | ||||||||||
FDIC deposit insurance | 226 | 223 | 212 | 157 | 270 | ||||||||||
Directors' fees | 382 | 428 | 374 | 377 | 344 | ||||||||||
Amortization of core deposit intangible | 199 | 222 | 247 | 271 | 294 | ||||||||||
Other general and administrative | 626 | 762 | 609 | 778 | 777 | ||||||||||
Total noninterest expense | 13,355 | 13,366 | 13,400 | 13,509 | 13,234 | ||||||||||
Income before income taxes | 6,183 | 6,434 | 9,240 | 5,321 | 2,521 | ||||||||||
Provision for income taxes | 2,342 | 2,566 | 1,753 | 1,323 | 891 | ||||||||||
Net income | $ | 3,841 | $ | 3,868 | $ | 7,487 | $ | 3,998 | $ | 1,630 | |||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.16 | $ | 0.16 | $ | 0.31 | $ | 0.17 | $ | 0.07 | |||||
Diluted | $ | 0.16 | $ | 0.16 | $ | 0.31 | $ | 0.17 | $ | 0.07 | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 23,973,116 | 23,952,443 | 23,911,419 | 23,919,483 | 24,129,512 | ||||||||||
Diluted | 24,510,092 | 24,346,553 | 24,275,665 | 24,032,613 | 24,307,540 | ||||||||||
Dividends declared per share | $ | 0.15 | $ | 0.05 | $ | 0.05 | $ | 0.03 | $ | 0.03 | |||||
Special dividends declared per share | $ | — | $ | 0.20 | $ | — | $ | — | $ | — | |||||
10
Blue Hills Bancorp Inc. | ||||||||||||||||||||||||||
Average Balances/Yields | ||||||||||||||||||||||||||
(Unaudited; dollars in thousands) | Quarters Ended | |||||||||||||||||||||||||
September 30, 2017 | June 30, 2017 | September 30, 2016 | ||||||||||||||||||||||||
Average balance | Interest | Yield/Cost | Average balance | Interest | Yield/Cost | Average balance | Interest | Yield/Cost | ||||||||||||||||||
Interest-earning assets | ||||||||||||||||||||||||||
Total loans (1) | $ | 2,096,034 | $ | 19,779 | 3.74 | % | $ | 2,046,288 | $ | 18,770 | 3.68 | % | $ | 1,726,088 | $ | 15,166 | 3.50 | % | ||||||||
Securities (1) | 301,484 | 1,609 | 2.12 | 309,909 | 1,621 | 2.10 | 403,038 | 2,414 | 2.38 | |||||||||||||||||
Other interest earning assets and FHLB stock | 32,051 | 215 | 2.66 | 36,768 | 243 | 2.65 | 31,236 | 170 | 2.17 | |||||||||||||||||
Total interest-earning assets | 2,429,569 | 21,603 | 3.53 | % | 2,392,965 | 20,634 | 3.46 | % | 2,160,362 | 17,750 | 3.27 | % | ||||||||||||||
Non-interest-earning assets | 101,188 | 102,750 | 106,589 | |||||||||||||||||||||||
Total assets | $ | 2,530,757 | $ | 2,495,715 | $ | 2,266,951 | ||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||
NOW | $ | 153,224 | $ | 17 | 0.04 | % | $ | 150,711 | $ | 17 | 0.05 | % | $ | 140,273 | $ | 17 | 0.05 | % | ||||||||
Regular savings | 243,680 | 191 | 0.31 | 255,255 | 208 | 0.33 | 272,950 | 229 | 0.33 | |||||||||||||||||
Money market | 708,748 | 1,769 | 0.99 | 688,600 | 1,669 | 0.97 | 560,098 | 1,173 | 0.83 | |||||||||||||||||
Certificates of deposit | 653,339 | 2,112 | 1.28 | 573,997 | 1,629 | 1.14 | 471,040 | 1,313 | 1.11 | |||||||||||||||||
Total interest-bearing deposits | 1,758,991 | 4,089 | 0.92 | 1,668,563 | 3,523 | 0.85 | 1,444,361 | 2,732 | 0.75 | |||||||||||||||||
Borrowings | 133,788 | 502 | 1.49 | 204,786 | 643 | 1.26 | 224,660 | 458 | 0.81 | |||||||||||||||||
Total interest-bearing liabilities | 1,892,779 | 4,591 | 0.96 | % | 1,873,349 | 4,166 | 0.89 | % | 1,669,021 | 3,190 | 0.76 | % | ||||||||||||||
Non-interest-bearing deposits | 213,459 | 189,180 | 171,317 | |||||||||||||||||||||||
Other non-interest-bearing liabilities | 23,603 | 33,664 | 33,936 | |||||||||||||||||||||||
Total liabilities | 2,129,841 | 2,096,193 | 1,874,274 | |||||||||||||||||||||||
Stockholders' equity | 400,916 | 399,522 | 392,677 | |||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 2,530,757 | $ | 2,495,715 | $ | 2,266,951 | ||||||||||||||||||||
Net interest and dividend income (FTE) | 17,012 | 16,468 | 14,560 | |||||||||||||||||||||||
Less: FTE adjustment | (58 | ) | (60 | ) | (65 | ) | ||||||||||||||||||||
Net interest and dividend income (GAAP) | $ | 16,954 | $ | 16,408 | $ | 14,495 | ||||||||||||||||||||
Net interest rate spread (FTE) | 2.57 | % | 2.57 | % | 2.51 | % | ||||||||||||||||||||
Net interest margin (FTE) | 2.78 | % | 2.76 | % | 2.68 | % | ||||||||||||||||||||
Total deposit cost | 0.82 | % | 0.76 | % | 0.67 | % | ||||||||||||||||||||
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 35%. A statutory tax rate of 34% was used prior to the fourth quarter of 2016.
11
Blue Hills Bancorp Inc. | |||||||||||||||||
Average Balances/Yields | |||||||||||||||||
(Unaudited; dollars in thousands) | Year to Date | ||||||||||||||||
September 30, 2017 | September 30, 2016 | ||||||||||||||||
Average balance | Interest | Yield/Cost | Average balance | Interest | Yield/Cost | ||||||||||||
Interest-earning assets | |||||||||||||||||
Total loans (1) | $ | 2,034,160 | $ | 55,985 | 3.68 | % | $ | 1,643,829 | $ | 43,013 | 3.50 | % | |||||
Securities (1) | 335,117 | 5,470 | 2.18 | 417,526 | 6,862 | 2.20 | |||||||||||
Other interest earning assets and FHLB stock | 33,554 | 629 | 2.51 | 34,835 | 458 | 1.76 | |||||||||||
Total interest-earning assets | 2,402,831 | 62,084 | 3.45 | % | 2,096,190 | 50,333 | 3.21 | % | |||||||||
Non-interest-earning assets | 100,200 | 102,425 | |||||||||||||||
Total assets | $ | 2,503,031 | $ | 2,198,615 | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||
NOW | $ | 149,806 | $ | 50 | 0.04 | % | $ | 138,254 | $ | 49 | 0.05 | % | |||||
Regular savings | 253,768 | 617 | 0.33 | 278,624 | 713 | 0.34 | |||||||||||
Money market | 683,708 | 4,957 | 0.97 | 490,472 | 3,002 | 0.82 | |||||||||||
Certificates of deposit | 598,640 | 5,242 | 1.17 | 455,039 | 3,744 | 1.10 | |||||||||||
Total interest-bearing deposits | 1,685,922 | 10,866 | 0.86 | 1,362,389 | 7,508 | 0.74 | |||||||||||
Borrowings | 197,908 | 1,791 | 1.21 | 257,798 | 1,584 | 0.82 | |||||||||||
Total interest-bearing liabilities | 1,883,830 | 12,657 | 0.90 | % | 1,620,187 | 9,092 | 0.75 | % | |||||||||
Non-interest-bearing deposits | 195,496 | 154,877 | |||||||||||||||
Other non-interest-bearing liabilities | 26,110 | 29,324 | |||||||||||||||
Total liabilities | 2,105,436 | 1,804,388 | |||||||||||||||
Stockholders' equity | 397,595 | 394,227 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 2,503,031 | $ | 2,198,615 | |||||||||||||
Net interest and dividend income (FTE) | 49,427 | 41,241 | |||||||||||||||
Less: FTE adjustment | (184 | ) | (229 | ) | |||||||||||||
Net interest and dividend income (GAAP) | $ | 49,243 | $ | 41,012 | |||||||||||||
Net interest rate spread (FTE) | 2.55 | % | 2.46 | % | |||||||||||||
Net interest margin (FTE) | 2.75 | % | 2.63 | % | |||||||||||||
Total deposit cost | 0.77 | % | 0.66 | % | |||||||||||||
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 35%. A statutory tax rate of 34% was used for 2016.
12
Blue Hills Bancorp, Inc. | |||||||||||||||
Average Balances - Trend | |||||||||||||||
(Unaudited; dollars in thousands) | Quarters Ended | ||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||
Interest-earning assets | |||||||||||||||
Total loans | $ | 2,096,034 | $ | 2,046,288 | $ | 1,958,647 | $ | 1,823,046 | $ | 1,726,088 | |||||
Securities | 301,484 | 309,909 | 398,201 | 408,351 | 403,038 | ||||||||||
Other interest earning assets and FHLB stock | 32,051 | 36,768 | 31,842 | 29,235 | 31,236 | ||||||||||
Total interest-earning assets | 2,429,569 | 2,392,965 | 2,388,690 | 2,260,632 | 2,160,362 | ||||||||||
Non-interest-earning assets | 101,188 | 102,750 | 93,397 | 104,188 | 106,589 | ||||||||||
Total assets | $ | 2,530,757 | $ | 2,495,715 | $ | 2,482,087 | $ | 2,364,820 | $ | 2,266,951 | |||||
Interest-bearing liabilities | |||||||||||||||
NOW | $ | 153,224 | $ | 150,711 | $ | 145,396 | $ | 144,520 | $ | 140,273 | |||||
Regular savings | 243,680 | 255,255 | 262,578 | 265,589 | 272,950 | ||||||||||
Money market | 708,748 | 688,600 | 653,165 | 597,891 | 560,098 | ||||||||||
Certificates of deposit | 653,339 | 573,997 | 567,642 | 526,433 | 471,040 | ||||||||||
Total interest-bearing deposits | 1,758,991 | 1,668,563 | 1,628,781 | 1,534,433 | 1,444,361 | ||||||||||
Borrowings | 133,788 | 204,786 | 256,500 | 223,693 | 224,660 | ||||||||||
Total interest-bearing liabilities | 1,892,779 | 1,873,349 | 1,885,281 | 1,758,126 | 1,669,021 | ||||||||||
Non-interest-bearing deposits | 213,459 | 189,180 | 183,520 | 188,797 | 171,317 | ||||||||||
Other non-interest-bearing liabilities | 23,603 | 33,664 | 21,035 | 29,861 | 33,936 | ||||||||||
Total liabilities | 2,129,841 | 2,096,193 | 2,089,836 | 1,976,784 | 1,874,274 | ||||||||||
Stockholders' equity | 400,916 | 399,522 | 392,251 | 388,036 | 392,677 | ||||||||||
Total liabilities and stockholders' equity | $ | 2,530,757 | $ | 2,495,715 | $ | 2,482,087 | $ | 2,364,820 | $ | 2,266,951 | |||||
13
Blue Hills Bancorp, Inc. | |||||
Yield Trend | |||||
(Unaudited; dollars in thousands) | Quarters Ended | ||||
September 30, | June 30, | March 31, | December 31, | September 30, | |
2017 | 2017 | 2017 | 2016 | 2016 | |
Interest-earning assets | |||||
Total loans (1) | 3.74% | 3.68% | 3.61% | 3.53% | 3.50% |
Securities (1) | 2.12% | 2.10% | 2.28% | 3.12% | 2.38% |
Other interest earning assets and FHLB stock | 2.66% | 2.65% | 2.18% | 1.97% | 2.17% |
Total interest-earning assets | 3.53% | 3.46% | 3.37% | 3.43% | 3.27% |
Interest-bearing liabilities | |||||
NOW | 0.04% | 0.05% | 0.04% | 0.05% | 0.05% |
Regular savings | 0.31% | 0.33% | 0.34% | 0.34% | 0.33% |
Money market | 0.99% | 0.97% | 0.94% | 0.88% | 0.83% |
Certificates of deposit | 1.28% | 1.14% | 1.07% | 1.07% | 1.11% |
Total interest-bearing deposits | 0.92% | 0.85% | 0.81% | 0.77% | 0.75% |
Borrowings | 1.49% | 1.26% | 1.02% | 0.90% | 0.81% |
Total interest-bearing liabilities | 0.96% | 0.89% | 0.84% | 0.79% | 0.76% |
Net interest rate spread (FTE) (1) | 2.57% | 2.57% | 2.53% | 2.64% | 2.51% |
Net interest margin (FTE) (1) | 2.78% | 2.76% | 2.71% | 2.82% | 2.68% |
Total deposit cost | 0.82% | 0.76% | 0.73% | 0.69% | 0.67% |
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 35%. A statutory tax rate of 34% was used prior to the fourth quarter of 2016.
14
Blue Hills Bancorp Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Net Income | |||||||||||||||
(Unaudited; dollars in thousands, except share data) | Quarter Ended | ||||||||||||||
September 30, 2017 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 6,183 | $ | 2,342 | $ | 3,841 | $ | 0.16 | |||||||
Add loss on sale of purchased home equity portfolio | 118 | 45 | 73 | — | |||||||||||
Non-GAAP basis | $ | 6,301 | $ | 2,387 | $ | 3,914 | $ | 0.16 | |||||||
Quarter Ended | |||||||||||||||
June 30, 2017 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 6,434 | $ | 2,566 | $ | 3,868 | $ | 0.16 | |||||||
Less gain on sale of remaining available-for-sale debt securities portfolio | (928 | ) | (333 | ) | (595 | ) | (0.02 | ) | |||||||
Non-GAAP basis | $ | 5,506 | $ | 2,233 | $ | 3,273 | $ | 0.14 | |||||||
Quarter Ended | |||||||||||||||
March 31, 2017 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 9,240 | $ | 1,753 | $ | 7,487 | $ | 0.31 | |||||||
Less gain on exchange of investment in Northeast Retirement Services | (5,947 | ) | (2,133 | ) | (3,814 | ) | (0.16 | ) | |||||||
Add realized loss on sale of mutual funds | 1,054 | 378 | 676 | 0.03 | |||||||||||
Less reversal of state tax valuation allowance | — | 1,697 | (1,697 | ) | (0.07 | ) | |||||||||
Non-GAAP basis | $ | 4,347 | $ | 1,695 | $ | 2,652 | $ | 0.11 | |||||||
Year to Date | |||||||||||||||
September 30, 2017 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 21,857 | $ | 6,661 | $ | 15,196 | $ | 0.62 | |||||||
Less gain on exchange of investment in Northeast Retirement Services | (5,947 | ) | (2,133 | ) | (3,814 | ) | (0.16 | ) | |||||||
Less gain on sale of remaining available-for-sale debt securities portfolio | (928 | ) | (333 | ) | (595 | ) | (0.02 | ) | |||||||
Add realized loss on sale of mutual funds | 1,054 | 378 | 676 | 0.03 | |||||||||||
Add loss on sale of purchased home equity portfolio | 118 | 45 | 73 | — | |||||||||||
Less reversal of state tax valuation allowance | — | 1,697 | (1,697 | ) | (0.07 | ) | |||||||||
Non-GAAP basis | $ | 16,154 | $ | 6,315 | $ | 9,839 | $ | 0.40 | |||||||
The Company's management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company's operating results and any related trends that may be affecting the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.
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Blue Hills Bancorp, Inc. | |||||||||||||||
Selected Financial Highlights | |||||||||||||||
(Unaudited; dollars in thousands, except share data) | Quarters Ended | ||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||
Performance Ratios (annualized) | |||||||||||||||
Diluted EPS | |||||||||||||||
GAAP | $ | 0.16 | $ | 0.16 | $ | 0.31 | $ | 0.17 | $ | 0.07 | |||||
Non-GAAP | 0.16 | 0.14 | 0.11 | n/a | n/a | ||||||||||
Return on average assets (ROAA) | |||||||||||||||
GAAP | 0.60 | % | 0.62 | % | 1.22 | % | 0.67 | % | 0.29 | % | |||||
Non-GAAP | 0.61 | % | 0.53 | % | 0.43 | % | n/a | n/a | |||||||
Return on average equity (ROAE) | |||||||||||||||
GAAP | 3.80 | % | 3.88 | % | 7.74 | % | 4.10 | % | 1.65 | % | |||||
Non-GAAP | 3.87 | % | 3.29 | % | 2.74 | % | n/a | n/a | |||||||
Return on average tangible common equity (ROATCE) (1) (3) | |||||||||||||||
GAAP | 3.90 | % | 3.99 | % | 7.95 | % | 4.22 | % | 1.70 | % | |||||
Non-GAAP | 3.97 | % | 3.37 | % | 2.82 | % | n/a | n/a | |||||||
Efficiency ratio (2) (3) | |||||||||||||||
GAAP | 68 | % | 64 | % | 59 | % | 68 | % | 71 | % | |||||
Non-GAAP | 67 | % | 67 | % | 75 | % | n/a | n/a | |||||||
(1) Average tangible common equity equals average total equity less goodwill and intangibles.
(2) Efficiency ratio equals noninterest expense divided by net interest and dividend income and noninterest income
(3) ROATCE and the efficiency ratio are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. Management believes that these non-GAAP measures are meaningful because it is standard practice for companies in the banking industry to disclose these measures. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.
See page 15 for Non-GAAP financial measures.
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Blue Hills Bancorp, Inc. | ||||||
Selected Financial Highlights | ||||||
(Unaudited; dollars in thousands, except share data) | Year to Date | |||||
September 30, 2017 | September 30, 2016 | |||||
Performance Ratios (annualized) | ||||||
Diluted EPS | ||||||
GAAP | $ | 0.62 | $ | 0.19 | ||
Non-GAAP | 0.40 | n/a | ||||
Return on average assets (ROAA) | ||||||
GAAP | 0.81 | % | 0.28 | % | ||
Non-GAAP | 0.53 | % | n/a | |||
Return on average equity (ROAE) | ||||||
GAAP | 5.11 | % | 1.58 | % | ||
Non-GAAP | 3.31 | % | n/a | |||
Return on average tangible common equity (ROATCE) (1) (3) | ||||||
GAAP | 5.24 | % | 1.62 | % | ||
Non-GAAP | 3.40 | % | n/a | |||
Efficiency ratio (2) (3) | 63 | % | 78 | % | ||
GAAP | 70 | % | n/a | |||
Non-GAAP | ||||||
(1) Average tangible common equity equals average total equity less goodwill and intangibles.
(2)Efficiency ratio equals noninterest expense divided by net interest and dividend income and noninterest income
(3) ROATCE and the efficiency ratio are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. Management believes that these non-GAAP measures are meaningful because it is standard practice for companies in the banking industry to disclose these measures. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.
See page 15 for Non-GAAP financial measures.
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Blue Hills Bancorp, Inc. | ||||||||||||||||
Selected Financial Highlights | ||||||||||||||||
(Unaudited; dollars in thousands, except share data) | At or for the Quarters Ended | At or for the Nine Months Ended | ||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Asset Quality | ||||||||||||||||
Non-performing Assets | $ | 11,540 | $ | 12,779 | $ | 7,849 | $ | 11,540 | $ | 7,849 | ||||||
Non-performing Assets/ Total Assets | 0.45 | % | 0.51 | % | 0.34 | % | 0.45 | % | 0.34 | % | ||||||
Allowance for Loan Losses/ Total Loans | 0.97 | % | 0.97 | % | 1.01 | % | 0.97 | % | 1.01 | % | ||||||
Net Charge-offs (Recoveries) | $ | (89 | ) | $ | 76 | $ | 3,221 | $ | (81 | ) | $ | 3,330 | ||||
Annualized Net Charge-offs (Recoveries)/ Average Loans | (0.02 | )% | 0.01 | % | 0.74 | % | (0.01 | )% | 0.27 | % | ||||||
Allowance for Loan Losses/ Nonperforming Loans | 175 | % | 156 | % | 226 | % | 175 | % | 226 | % | ||||||
Capital/Other | ||||||||||||||||
Common shares outstanding | 26,869,088 | 26,860,988 | 26,996,942 | |||||||||||||
Book value per share | $ | 14.85 | $ | 14.79 | $ | 14.43 | ||||||||||
Tangible book value per share | $ | 14.48 | $ | 14.42 | $ | 14.03 | ||||||||||
Tangible Common Equity/Tangible Assets (1) (2) | 15.35 | % | 15.47 | % | 16.45 | % | ||||||||||
Full-time Equivalent Employees | 232 | 230 | 223 | |||||||||||||
(1) Tangible common equity equals total equity less goodwill and intangibles, Tangible assets equals total assets less goodwill and intangibles.
(2)Tangible common equity/tangible assets is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. Management believes that this non-GAAP measure is meaningful because it is standard practice for companies in the banking industry to disclose this measure. Therefore, management believes this measure provides useful information to investors by allowing them to make peer comparisons.
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