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| 8-K - 8-K EANINGS RELEASE Q2 2018 - Blue Hills Bancorp, Inc. | a2018q28-k.htm |
EXHIBIT 99.1
Blue Hills Bancorp, Inc. Reports Second Quarter Earnings
Quarterly Dividend Increased 33% to $0.20 per share
NORWOOD, Mass., July 25, 2018--(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 $6.5 million, or $0.26 per diluted share, for the second quarter of 2018 compared to net income of $6.6 million, or $0.27 per diluted share, for the first quarter of 2018 and net income of $3.9 million, or $0.16 per diluted share, for the second quarter of 2017. Net income on a non-GAAP basis was $6.1 million, or $0.25 per diluted share, for the second quarter of 2018 compared to net income on a non-GAAP basis of $5.9 million, or $0.24 per diluted share, for the first quarter of 2018 and net income on a non-GAAP basis of $3.3 million, or $0.14 per diluted share, for the second quarter of 2017 (see page 14 for a reconciliation of GAAP to non-GAAP measures).
For the six months ended June 30, 2018, net income was $13.0 million, or $0.52 per diluted share, compared to net income of $11.4 million, or $0.47 per diluted share for the six months ended June 30, 2017. Net income on a non-GAAP basis was $12.1 million, or $0.48 per diluted share, for the first six months of 2018 compared to net income on a non-GAAP basis of $5.9 million, or $0.25 per diluted share for the first six months of 2017 (see page 15 for a reconciliation of GAAP to non-GAAP measures).
The Company also announced that its Board of Directors voted to increase the regular quarterly cash dividend to $0.20 per share from $0.15 per share. The dividend will be payable on August 22, 2018 to stockholders of record as of August 8, 2018.
Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said, "The second quarter results continue to demonstrate the significant and ongoing progress we have made as the Bank reaches its four year anniversary as a public company. Our asset sensitive interest rate risk position has allowed us to absorb increases in deposit costs and still grow net interest margin over 20 basis points from the second quarter of 2017. In addition, since the second quarter of last year our core return on assets has increased over 70% to above 90 basis points while our focus on expense management has contributed to further improvement in our efficiency ratio, which has fallen to 62% excluding nonrecurring gains. Our business units continue to perform well in a highly competitive marketplace. Mortgage banking generated originations higher than a year ago and mortgage banking revenue exceeded $1 million in the second quarter. Commercial business loans grew 8% from the end of the first quarter and 18% from a year ago as we strive to create more balance with our strong commercial real estate lending business, while on the consumer banking side we have positioned our core funding capabilities to meet our quality growth operating strategy."
Parent continued, "Our capital deployment efforts continued with today's announcement of another increase to our quarterly dividend. In the current environment, banks must be flexible and able to adjust to rapidly changing industry and economic conditions. We are all proud of the franchise we have built and as we move forward in this environment, we feel that our franchise will continue to create incremental value for our shareholders."
BALANCE SHEET
Compared to March 31, 2018, total assets grew $72 million, or 3%, to $2.7 billion at June 30, 2018. The increase was mainly driven by a $57 million, or 3%, increase in loans to $2.3 billion at June 30, 2018. By category, the growth was due to a $52 million, or 5%, increase in residential mortgage loans, a $20 million, or 8%, increase in commercial business loans, and a $15 million, or 21%, increase in construction loans. These increases were partially offset by a $24 million, or 3% decrease in commercial real estate loans reflecting paydowns and very competitive market conditions.
Compared to June 30, 2017, total assets increased $227 million, or 9%. Loans drove the growth in total assets from June 30, 2017, increasing $196 million, or 9%. By category, the increase from June 30, 2017 was due to residential mortgage loans, which were up $95 million, or 11%; commercial real estate loans, which were up $68 million, or 9%; and commercial business loans, which were up $41 million, or 18%. Residential mortgage originations were $167 million in the second quarter of 2018 compared to $139 million in the second quarter of 2017 while commercial loans (real estate and non-real estate combined)
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added to the balance sheet were $97 million in the second quarter of 2018 compared to $137 million in the second quarter of 2017. The decline is due to a lower level of commercial real estate originations, partially offset by an increase in commercial business loan originations. The commercial real estate decline reflects a noticeable pick-up in competition with respect to loan terms and pricing during the first half of 2018.
Compared to March 31, 2018, deposits grew $34 million, or 2%, to $2.1 billion at June 30, 2018. The growth from the end of the first quarter was driven by a $38 million increase in total brokered deposits and a $21 million increase in certificates of deposit. These increases were partially offset by small declines in the other deposit account categories. In addition to the growth in deposits, short-term borrowings were up $45 million, or 69%, from March 31, 2018 while long-term debt fell $15 million, or 14%.
Compared to June 30, 2017, deposits grew $147 million, or 7%, and included growth in all customer segments (consumer, small business, commercial and municipal). By category, the growth came from certificates of deposit, which were up $163 million, total brokered deposits, which were up $47 million, and NOW and demand deposits, which were up $16 million. These increases were partially offset by a $46 million decline in money market deposits and a $33 million decline in regular savings deposits. Short-term borrowings increased $110 million from a year ago while long-term debt declined $40 million.
Stockholders’ equity was $400 million at June 30, 2018 compared to $395 million at March 31, 2018 and $397 million at June 30, 2017. The increases in both periods mainly reflect net income and share based compensation, partially offset by the payment of dividends.
NET INTEREST AND DIVIDEND INCOME
Reported net interest and dividend income was $19.0 million in the second quarter of 2018, up $624,000, or 3%, from the first quarter of 2018 and up $2.6 million, or 16%, from the second quarter of 2017. Reported net interest margin was 2.98% in the second quarter of 2018, up from 2.91% in the first quarter of 2018 and from 2.75% in the second quarter of 2017.
Net interest and dividend income on a fully taxable equivalent basis (FTE), a Non-GAAP measure, was also $19.0 million in the second quarter of 2018, up $626,000, or 3%, from $18.4 million in the first quarter of 2018, and up $2.5 million, from $16.5 million or 15%, from the second quarter of 2017. Net interest margin on a fully taxable equivalent basis (FTE), a Non-GAAP measure, was 2.99% in the second quarter of 2018 compared to 2.92% in the first quarter of 2018 and 2.76% in the second quarter of 2017. Purchase accounting accretion added $171,000, $200,000 and $181,000 to net interest and dividend income in the second quarter of 2018, first quarter of 2018, and second quarter of 2017, respectively. Purchase accounting accretion also added 3 basis points to net interest margin in all three quarters.
Net interest and dividend income (FTE) and net interest margin (FTE) benefited in both quarterly comparisons from higher floating rate loan yields related to the interest rate increases announced by the Federal Reserve Bank. There have been seven rate increases announced by the Fed since December 2015 totaling 175 basis points. The Company has maintained and continues to maintain an asset sensitive interest rate risk position, which has resulted in earning asset yields increasing at a faster pace than interest bearing liability costs. In addition, the improvement in net interest and dividend income (FTE) from the second quarter of 2017 was helped by loan growth. Average loans increased $163 million, or 8%, from the second quarter of 2017 due to higher levels of commercial real estate loans and residential mortgages.
NONINTEREST INCOME
Noninterest income was $3.6 million in the second quarter of 2018, down 266,000, or 7%, from the first quarter of 2018. The decline was due to the absence of a first quarter securities gain of $653,000, the absence of a first quarter gain of $271,000 from the sale of premises and equipment and a decline of $169,000 in miscellaneous income mainly reflecting lower income on Small Business Investment Company ("SBIC") investments. Partially offsetting these declines in the second quarter was a $452,000 unrealized gain on equity securities compared to an unrealized loss of $69,000 recorded in the first quarter and a $293,000, or 40%, increase in mortgage banking income. The Company also had increases of $67,000, or 19%, in deposit account fees and $63,000, or 16%, in interchange and ATM fees reflecting higher transaction volumes and pricing changes.
Compared to the second quarter of 2017, noninterest income declined $878,000, or 19%. This was mainly due to a $1.2 million decline in loan level derivative income, which is related to a lower volume of new commercial loan customer back-to-back interest rate swap contracts. The amount of revenue in the loan level derivative income category can be volatile since it is a
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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. Also contributing to the decline was the absence of a $928,000 gain recognized in the second quarter of last year on the sale of the Company's remaining available-for-sale debt securities portfolio. Partially offsetting the declines were an $866,000 increase in miscellaneous income due primarily to SBIC investments, a $452,000 unrealized gain on equity securities recognized in the second quarter of 2018, and increases of $81,000 in deposit account fees and $66,000 in interchange and ATM fees.
NONINTEREST EXPENSE
Noninterest expense was $13.7 million in the second quarter of 2018, down $180,000, or 1%, from the first quarter of 2018. Several categories of expenses had declines from last quarter and these declines were partially offset by an increase in advertising expense, which was at a low level in the first quarter. Compared to the second quarter of 2017, noninterest expense increased $325,000, or 2%. The increase was mainly driven by higher salaries and benefits expense which was up $600,000, or 8%. The growth in salaries and benefits expense was due, in part, to an increase in full time equivalent employees to 245 at June 30, 2018 from 230 at June 30, 2017 as well as merit increases.
INCOME TAXES
The effective income tax rate was 26.8% in the second quarter of 2018 and 25.6% in the first quarter of 2018. This is down from 39.9% in the second quarter of 2017. The lower effective tax rates in 2018 are mainly due to the Tax Act, which was enacted on December 22, 2017 and provided for a reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018.
ASSET QUALITY
The provision for loan losses reflects management’s assessment of risks inherent in the loan portfolio. The provision for loan losses was $101,000 in the second quarter of 2018 compared to a credit of $460,000 in the first quarter of 2018 and a provision of $1.1 million in the second quarter of 2017. The decline in the provision from 2017 reflects lower loan growth in 2018 coupled with the impact of the Company's continued migration from the use of historical loss rates based on national FDIC data to loss rates based on the Company's own experience.
The allowance for loan losses as a percentage of total loans was 0.89% at June 30, 2018 compared to 0.92% at March 31, 2018 and 0.97% at June 30, 2017. The Company had net loan charge-offs of $161,000 in the second quarter of 2018 compared to $232,000 in the first quarter of 2018 and $76,000 in the second quarter of 2017.
Nonperforming assets were $13.9 million at June 30, 2018 compared to $13.3 million at March 31, 2018 and $12.8 million at June 30, 2017. Nonperforming assets as a percentage of total assets were 0.51% at June 30, 2018 compared to 0.50% at March 31, 2018 and 0.51% at June 30, 2017.
ABOUT BLUE HILLS BANCORP
Blue Hills Bancorp, Inc., with corporate headquarters in Norwood, MA, had assets of $2.7 billion at June 30, 2018 and operates 11 retail 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
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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.
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 | ||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 vs. March 31, 2018 | June 30, 2018 vs. June 30, 2017 | |||||||||
Assets | |||||||||||||
Cash and due from banks | $ | 17,566 | $ | 18,194 | $ | 17,292 | (3.5 | )% | 1.6 | % | |||
Short term investments | 34,383 | 26,878 | 33,819 | 27.9 | % | 1.7 | % | ||||||
Total cash and cash equivalents | 51,949 | 45,072 | 51,111 | 15.3 | % | 1.6 | % | ||||||
Equity securities, at fair value | 5,331 | 9,651 | — | (44.8 | )% | — | % | ||||||
Securities available-for-sale, at fair value | — | — | 10,437 | — | % | (100.0 | )% | ||||||
Securities held-to-maturity, at amortized cost | 303,137 | 304,036 | 283,672 | (0.3 | )% | 6.9 | % | ||||||
Federal Home Loan Bank stock, at cost | 14,375 | 10,730 | 11,943 | 34.0 | % | 20.4 | % | ||||||
Loans held for sale | 10,005 | 5,865 | 6,789 | 70.6 | % | 47.4 | % | ||||||
Loans: | |||||||||||||
1-4 family residential | 989,598 | 938,030 | 895,015 | 5.5 | % | 10.6 | % | ||||||
Home equity | 72,813 | 75,737 | 84,615 | (3.9 | )% | (13.9 | )% | ||||||
Commercial real estate | 824,541 | 849,040 | 756,093 | (2.9 | )% | 9.1 | % | ||||||
Construction | 88,132 | 73,113 | 78,062 | 20.5 | % | 12.9 | % | ||||||
Total real estate loans | 1,975,084 | 1,935,920 | 1,813,785 | 2.0 | % | 8.9 | % | ||||||
Commercial business | 268,435 | 248,521 | 227,262 | 8.0 | % | 18.1 | % | ||||||
Consumer | 18,352 | 20,034 | 25,047 | (8.4 | )% | (26.7 | )% | ||||||
Total loans | 2,261,871 | 2,204,475 | 2,066,094 | 2.6 | % | 9.5 | % | ||||||
Allowance for loan losses | (20,125 | ) | (20,185 | ) | (19,917 | ) | (0.3 | )% | 1.0 | % | |||
Loans, net | 2,241,746 | 2,184,290 | 2,046,177 | 2.6 | % | 9.6 | % | ||||||
Premises and equipment, net | 20,192 | 20,685 | 22,004 | (2.4 | )% | (8.2 | )% | ||||||
Other real estate owned | 3,649 | 3,649 | 202 | — | % | NM | |||||||
Accrued interest receivable | 6,531 | 6,120 | 5,362 | 6.7 | % | 21.8 | % | ||||||
Goodwill and core deposit intangible | 9,438 | 9,566 | 10,091 | (1.3 | )% | (6.5 | )% | ||||||
Net deferred tax asset | 6,480 | 5,197 | 8,184 | 24.7 | % | (20.8 | )% | ||||||
Bank-owned life insurance | 33,610 | 33,354 | 32,533 | 0.8 | % | 3.3 | % | ||||||
Other assets | 34,719 | 30,936 | 25,404 | 12.2 | % | 36.7 | % | ||||||
Total assets | $ | 2,741,162 | $ | 2,669,151 | $ | 2,513,909 | 2.7 | % | 9.0 | % | |||
Liabilities and Stockholders' Equity | |||||||||||||
Deposits: | |||||||||||||
NOW and demand | $ | 375,934 | $ | 382,406 | $ | 359,877 | (1.7 | )% | 4.5 | % | |||
Regular savings | 213,205 | 216,894 | 246,484 | (1.7 | )% | (13.5 | )% | ||||||
Money market | 628,718 | 643,336 | 674,593 | (2.3 | )% | (6.8 | )% | ||||||
Certificates of deposit | 525,587 | 504,996 | 362,261 | 4.1 | % | 45.1 | % | ||||||
Brokered money market | 85,951 | 90,369 | 44,728 | (4.9 | )% | 92.2 | % | ||||||
Brokered certificates of deposit | 282,672 | 239,837 | 277,320 | 17.9 | % | 1.9 | % | ||||||
Total deposits | 2,112,067 | 2,077,838 | 1,965,263 | 1.6 | % | 7.5 | % | ||||||
Short-term borrowings | 110,000 | 65,000 | — | 69.2 | % | NM | |||||||
Long-term debt | 90,000 | 105,000 | 130,000 | (14.3 | )% | (30.8 | )% | ||||||
Other liabilities | 28,850 | 25,869 | 21,328 | 11.5 | % | 35.3 | % | ||||||
Total liabilities | 2,340,917 | 2,273,707 | 2,116,591 | 3.0 | % | 10.6 | % | ||||||
Common stock | 268 | 268 | 268 | — | % | — | % | ||||||
Additional paid-in capital | 258,225 | 256,470 | 252,495 | 0.7 | % | 2.3 | % | ||||||
Unearned compensation- ESOP | (19,357 | ) | (19,547 | ) | (20,117 | ) | (1.0 | )% | (3.8 | )% | |||
Retained earnings | 162,948 | 160,124 | 166,033 | 1.8 | % | (1.9 | )% | ||||||
Accumulated other comprehensive loss | (1,839 | ) | (1,871 | ) | (1,361 | ) | (1.7 | )% | 35.1 | % | |||
Total stockholders' equity | 400,245 | 395,444 | 397,318 | 1.2 | % | 0.7 | % | ||||||
Total liabilities and stockholders' equity | $ | 2,741,162 | $ | 2,669,151 | $ | 2,513,909 | 2.7 | % | 9.0 | % | |||
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Blue Hills Bancorp, Inc.
Consolidated Balance Sheet Trend
(Unaudited; dollars in thousands) | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | ||||||||||
Assets | |||||||||||||||
Cash and due from banks | $ | 17,566 | $ | 18,194 | $ | 16,149 | $ | 16,171 | $ | 17,292 | |||||
Short term investments | 34,383 | 26,878 | 30,018 | 22,192 | 33,819 | ||||||||||
Total cash and cash equivalents | 51,949 | 45,072 | 46,167 | 38,363 | 51,111 | ||||||||||
Equity securities, at fair value | 5,331 | 9,651 | — | — | — | ||||||||||
Securities available for sale, at fair value | — | — | 9,720 | 9,943 | 10,437 | ||||||||||
Securities held-to-maturity, at amortized cost | 303,137 | 304,036 | 303,716 | 302,833 | 283,672 | ||||||||||
Federal Home Loan Bank stock, at cost | 14,375 | 10,730 | 12,105 | 9,410 | 11,943 | ||||||||||
Loans held for sale | 10,005 | 5,865 | 8,992 | 12,268 | 6,789 | ||||||||||
Loans: | |||||||||||||||
1-4 family residential | 989,598 | 938,030 | 926,117 | 905,585 | 895,015 | ||||||||||
Home equity | 72,813 | 75,737 | 81,358 | 77,819 | 84,615 | ||||||||||
Commercial real estate | 824,541 | 849,040 | 833,978 | 751,209 | 756,093 | ||||||||||
Construction | 88,132 | 73,113 | 90,712 | 88,979 | 78,062 | ||||||||||
Total real estate loans | 1,975,084 | 1,935,920 | 1,932,165 | 1,823,592 | 1,813,785 | ||||||||||
Commercial business | 268,435 | 248,521 | 253,001 | 240,801 | 227,262 | ||||||||||
Consumer | 18,352 | 20,034 | 21,858 | 23,142 | 25,047 | ||||||||||
Total loans | 2,261,871 | 2,204,475 | 2,207,024 | 2,087,535 | 2,066,094 | ||||||||||
Allowance for loan losses | (20,125 | ) | (20,185 | ) | (20,877 | ) | (20,248 | ) | (19,917 | ) | |||||
Loans, net | 2,241,746 | 2,184,290 | 2,186,147 | 2,067,287 | 2,046,177 | ||||||||||
Premises and equipment, net | 20,192 | 20,685 | 21,573 | 21,850 | 22,004 | ||||||||||
Other real estate owned | 3,649 | 3,649 | — | 202 | 202 | ||||||||||
Accrued interest receivable | 6,531 | 6,120 | 6,438 | 5,802 | 5,362 | ||||||||||
Goodwill and core deposit intangible | 9,438 | 9,566 | 9,717 | 9,892 | 10,091 | ||||||||||
Net deferred tax asset | 6,480 | 5,197 | 6,000 | 9,295 | 8,184 | ||||||||||
Bank-owned life insurance | 33,610 | 33,354 | 33,078 | 32,800 | 32,533 | ||||||||||
Other assets | 34,719 | 30,936 | 24,867 | 25,471 | 25,404 | ||||||||||
Total assets | $ | 2,741,162 | $ | 2,669,151 | $ | 2,668,520 | $ | 2,545,416 | $ | 2,513,909 | |||||
Liabilities and Stockholders' Equity | |||||||||||||||
Deposits: | |||||||||||||||
NOW and demand | $ | 375,934 | $ | 382,406 | $ | 381,316 | $ | 376,864 | $ | 359,877 | |||||
Regular savings | 213,205 | 216,894 | 221,004 | 244,662 | 246,484 | ||||||||||
Money market | 628,718 | 643,336 | 646,603 | 666,388 | 674,593 | ||||||||||
Certificates of deposit | 525,587 | 504,996 | 448,382 | 420,765 | 362,261 | ||||||||||
Brokered money market | 85,951 | 90,369 | 92,798 | 41,768 | 44,728 | ||||||||||
Brokered certificates of deposit | 282,672 | 239,837 | 249,766 | 235,106 | 277,320 | ||||||||||
Total deposits | 2,112,067 | 2,077,838 | 2,039,869 | 1,985,553 | 1,965,263 | ||||||||||
Short-term borrowings | 110,000 | 65,000 | 100,000 | 20,000 | — | ||||||||||
Long-term debt | 90,000 | 105,000 | 105,000 | 110,000 | 130,000 | ||||||||||
Other liabilities | 28,850 | 25,869 | 25,845 | 30,829 | 21,328 | ||||||||||
Total liabilities | 2,340,917 | 2,273,707 | 2,270,714 | 2,146,382 | 2,116,591 | ||||||||||
Common stock | 268 | 268 | 268 | 268 | 268 | ||||||||||
Additional paid-in capital | 258,225 | 256,470 | 254,750 | 254,025 | 252,495 | ||||||||||
Unearned compensation- ESOP | (19,357 | ) | (19,547 | ) | (19,737 | ) | (19,927 | ) | (20,117 | ) | |||||
Retained earnings | 162,948 | 160,124 | 163,978 | 166,282 | 166,033 | ||||||||||
Accumulated other comprehensive loss | (1,839 | ) | (1,871 | ) | (1,453 | ) | (1,614 | ) | (1,361 | ) | |||||
Total stockholders' equity | 400,245 | 395,444 | 397,806 | 399,034 | 397,318 | ||||||||||
Total liabilities and stockholders' equity | $ | 2,741,162 | $ | 2,669,151 | $ | 2,668,520 | $ | 2,545,416 | $ | 2,513,909 | |||||
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Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income - Quarters
(Unaudited; dollars in thousands, except share data) | Quarters Ended | % Change | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 vs. March 31, 2018 | June 30, 2018 vs. June 30, 2017 | |||||||||
Interest and fees on loans | $ | 23,081 | $ | 21,809 | $ | 18,715 | 5.8 | % | 23.3 | % | |||
Interest on securities | 1,809 | 1,857 | 1,572 | (2.6 | )% | 15.1 | % | ||||||
Dividends | 195 | 204 | 193 | (4.4 | )% | 1.0 | % | ||||||
Other | 62 | 78 | 94 | (20.5 | )% | (34.0 | )% | ||||||
Total interest and dividend income | 25,147 | 23,948 | 20,574 | 5.0 | % | 22.2 | % | ||||||
Interest on deposits | 5,252 | 4,775 | 3,523 | 10.0 | % | 49.1 | % | ||||||
Interest on borrowings | 912 | 814 | 643 | 12.0 | % | 41.8 | % | ||||||
Total interest expense | 6,164 | 5,589 | 4,166 | 10.3 | % | 48.0 | % | ||||||
Net interest and dividend income | 18,983 | 18,359 | 16,408 | 3.4 | % | 15.7 | % | ||||||
Provision (credit) for loan losses | 101 | (460 | ) | 1,118 | (122.0 | )% | (91.0 | )% | |||||
Net interest and dividend income, after provision for loan losses | 18,882 | 18,819 | 15,290 | 0.3 | % | 23.5 | % | ||||||
Deposit account fees | 422 | 355 | 341 | 18.9 | % | 23.8 | % | ||||||
Interchange and ATM fees | 454 | 391 | 388 | 16.1 | % | 17.0 | % | ||||||
Mortgage banking | 1,033 | 740 | 1,219 | 39.6 | % | (15.3 | )% | ||||||
Loan level derivative fee income | 143 | 240 | 1,367 | (40.4 | )% | (89.5 | )% | ||||||
Unrealized gains (losses) on equity securities | 452 | (69 | ) | — | (755.1 | )% | NM | ||||||
Realized securities gains (losses), net | — | — | 928 | NM | (100.0 | )% | |||||||
Gain on exchange of investment in Northeast Retirement Services | — | 653 | — | (100.0 | )% | NM | |||||||
Bank-owned life insurance income | 256 | 276 | 261 | (7.2 | )% | (1.9 | )% | ||||||
Gain on sale of premises and equipment | — | 271 | — | (100.0 | )% | NM | |||||||
Miscellaneous | 872 | 1,041 | 6 | (16.2 | )% | 14,433.3 | % | ||||||
Total noninterest income | 3,632 | 3,898 | 4,510 | (6.8 | )% | (19.5 | )% | ||||||
Salaries and employee benefits | 8,264 | 8,382 | 7,664 | (1.4 | )% | 7.8 | % | ||||||
Occupancy and equipment | 2,050 | 2,083 | 2,030 | (1.6 | )% | 1.0 | % | ||||||
Data processing | 1,054 | 1,044 | 1,022 | 1.0 | % | 3.1 | % | ||||||
Professional fees | 450 | 453 | 526 | (0.7 | )% | (14.4 | )% | ||||||
Advertising | 499 | 304 | 489 | 64.1 | % | 2.0 | % | ||||||
FDIC deposit insurance | 230 | 233 | 223 | (1.3 | )% | 3.1 | % | ||||||
Directors' fees | 362 | 409 | 428 | (11.5 | )% | (15.4 | )% | ||||||
Amortization of core deposit intangible | 127 | 151 | 222 | (15.9 | )% | (42.8 | )% | ||||||
Other general and administrative | 655 | 812 | 762 | (19.3 | )% | (14.0 | )% | ||||||
Total noninterest expense | 13,691 | 13,871 | 13,366 | (1.3 | )% | 2.4 | % | ||||||
Income before income taxes | 8,823 | 8,846 | 6,434 | (0.3 | )% | 37.1 | % | ||||||
Provision for income taxes | 2,366 | 2,263 | 2,566 | 4.6 | % | (7.8 | )% | ||||||
Net income | $ | 6,457 | $ | 6,583 | $ | 3,868 | (1.9 | )% | 66.9 | % | |||
Earnings per common share: | |||||||||||||
Basic | $ | 0.27 | $ | 0.27 | $ | 0.16 | |||||||
Diluted | $ | 0.26 | $ | 0.27 | $ | 0.16 | |||||||
Weighted average shares outstanding: | |||||||||||||
Basic | 24,230,098 | 24,172,237 | 23,952,443 | ||||||||||
Diluted | 24,991,958 | 24,827,850 | 24,346,553 | ||||||||||
Regular dividends declared per share | $ | 0.15 | $ | 0.15 | $ | 0.05 | |||||||
Special dividends declared per share | $ | — | $ | 0.30 | $ | 0.20 | |||||||
7
Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income-Year to Date
(Unaudited; dollars in thousands, except share data) | Year to Date | |||||||
June 30, 2018 | June 30, 2017 | % Change | ||||||
Interest and fees on loans | $ | 44,890 | $ | 36,097 | 24.4 | % | ||
Interest on securities | 3,666 | 3,782 | (3.1 | )% | ||||
Dividends | 399 | 350 | 14.0 | % | ||||
Other | 140 | 126 | 11.1 | % | ||||
Total interest and dividend income | 49,095 | 40,355 | 21.7 | % | ||||
Interest on deposits | 10,027 | 6,777 | 48.0 | % | ||||
Interest on borrowings | 1,726 | 1,289 | 33.9 | % | ||||
Total interest expense | 11,753 | 8,066 | 45.7 | % | ||||
Net interest and dividend income | 37,342 | 32,289 | 15.6 | % | ||||
Provision (credit) for loan losses | (359 | ) | 1,175 | (130.6 | )% | |||
Net interest and dividend income, after provision for loan losses | 37,701 | 31,114 | 21.2 | % | ||||
Deposit account fees | 777 | 661 | 17.5 | % | ||||
Interchange and ATM fees | 845 | 736 | 14.8 | % | ||||
Mortgage banking | 1,773 | 1,959 | (9.5 | )% | ||||
Loan level derivative fee income | 383 | 1,531 | (75.0 | )% | ||||
Unrealized gains on equity securities | 383 | — | NM | |||||
Realized securities gains (losses), net | — | (94 | ) | (100.0 | )% | |||
Gain on exchange of investment in Northeast Retirement Services | 653 | 5,947 | (89.0 | )% | ||||
Bank-owned life insurance income | 532 | 518 | 2.7 | % | ||||
Gain on sale of premises and equipment | 271 | — | NM | |||||
Miscellaneous | 1,913 | 68 | 2,713.2 | % | ||||
Total noninterest income | 7,530 | 11,326 | (33.5 | )% | ||||
Salaries and employee benefits | 16,646 | 15,227 | 9.3 | % | ||||
Occupancy and equipment | 4,133 | 4,145 | (0.3 | )% | ||||
Data processing | 2,098 | 2,066 | 1.5 | % | ||||
Professional fees | 903 | 1,395 | (35.3 | )% | ||||
Advertising | 803 | 856 | (6.2 | )% | ||||
FDIC deposit insurance | 463 | 435 | 6.4 | % | ||||
Directors' fees | 771 | 802 | (3.9 | )% | ||||
Amortization of core deposit intangible | 278 | 469 | (40.7 | )% | ||||
Other general and administrative | 1,467 | 1,371 | 7.0 | % | ||||
Total noninterest expense | 27,562 | 26,766 | 3.0 | % | ||||
Income before income taxes | 17,669 | 15,674 | 12.7 | % | ||||
Provision for income taxes | 4,629 | 4,319 | 7.2 | % | ||||
Net income | $ | 13,040 | $ | 11,355 | 14.8 | % | ||
Earnings per common share: | ||||||||
Basic | $ | 0.54 | $ | 0.47 | ||||
Diluted | $ | 0.52 | $ | 0.47 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 24,201,328 | 23,932,044 | ||||||
Diluted | 24,910,065 | 24,311,222 | ||||||
Regular dividends declared per share | $ | 0.30 | $ | 0.10 | ||||
Special dividends declared per share | $ | 0.30 | $ | 0.20 | ||||
8
Blue Hills Bancorp Inc. | |||||||||||||||
Consolidated Statements of Net Income - Trend | |||||||||||||||
Quarters Ended | |||||||||||||||
(Unaudited; dollars in thousands, except share data) | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | |||||||||||
Interest and fees on loans | $ | 23,081 | $ | 21,809 | $ | 20,883 | $ | 19,721 | $ | 18,715 | |||||
Interest on securities | 1,809 | 1,857 | 1,763 | 1,565 | 1,572 | ||||||||||
Dividends | 195 | 204 | 189 | 194 | 193 | ||||||||||
Other | 62 | 78 | 40 | 65 | 94 | ||||||||||
Total interest and dividend income | 25,147 | 23,948 | 22,875 | 21,545 | 20,574 | ||||||||||
Interest on deposits | 5,252 | 4,775 | 4,349 | 4,089 | 3,523 | ||||||||||
Interest on borrowings | 912 | 814 | 732 | 502 | 643 | ||||||||||
Total interest expense | 6,164 | 5,589 | 5,081 | 4,591 | 4,166 | ||||||||||
Net interest and dividend income | 18,983 | 18,359 | 17,794 | 16,954 | 16,408 | ||||||||||
Provision (credit) for loan losses | 101 | (460 | ) | 681 | 242 | 1,118 | |||||||||
Net interest and dividend income, after provision for loan losses | 18,882 | 18,819 | 17,113 | 16,712 | 15,290 | ||||||||||
Deposit account fees | 422 | 355 | 372 | 385 | 341 | ||||||||||
Interchange and ATM fees | 454 | 391 | 418 | 455 | 388 | ||||||||||
Mortgage banking | 1,033 | 740 | 552 | 1,146 | 1,219 | ||||||||||
Loss on sale of purchased home equity portfolio | — | — | — | (118 | ) | — | |||||||||
Loan level derivative fee income | 143 | 240 | 1,105 | 156 | 1,367 | ||||||||||
Unrealized gains (losses) on equity securities | 452 | (69 | ) | — | — | — | |||||||||
Realized securities gains (losses), net | — | — | — | — | 928 | ||||||||||
Gain on exchange of investment in Northeast Retirement Services | — | 653 | — | — | — | ||||||||||
Bank-owned life insurance income | 256 | 276 | 277 | 268 | 261 | ||||||||||
Gain on sale of property plant and equipment | — | 271 | — | — | — | ||||||||||
Miscellaneous | 872 | 1,041 | 206 | 534 | 6 | ||||||||||
Total noninterest income | 3,632 | 3,898 | 2,930 | 2,826 | 4,510 | ||||||||||
Salaries and employee benefits | 8,264 | 8,382 | 7,755 | 7,979 | 7,664 | ||||||||||
Pension settlement charges | — | — | 317 | — | — | ||||||||||
Occupancy and equipment | 2,050 | 2,083 | 2,224 | 2,024 | 2,030 | ||||||||||
Data processing | 1,054 | 1,044 | 1,067 | 1,016 | 1,022 | ||||||||||
Professional fees | 450 | 453 | 540 | 340 | 526 | ||||||||||
Advertising | 499 | 304 | 503 | 563 | 489 | ||||||||||
FDIC deposit insurance | 230 | 233 | 220 | 226 | 223 | ||||||||||
Directors' fees | 362 | 409 | 382 | 382 | 428 | ||||||||||
Amortization of core deposit intangible | 127 | 151 | 175 | 199 | 222 | ||||||||||
Other general and administrative | 655 | 812 | 1,002 | 626 | 762 | ||||||||||
Total noninterest expense | 13,691 | 13,871 | 14,185 | 13,355 | 13,366 | ||||||||||
Income before income taxes | 8,823 | 8,846 | 5,858 | 6,183 | 6,434 | ||||||||||
Provision for income taxes | 2,366 | 2,263 | 4,565 | 2,342 | 2,566 | ||||||||||
Net income | $ | 6,457 | $ | 6,583 | $ | 1,293 | $ | 3,841 | $ | 3,868 | |||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.27 | $ | 0.27 | $ | 0.05 | $ | 0.16 | $ | 0.16 | |||||
Diluted | $ | 0.26 | $ | 0.27 | $ | 0.05 | $ | 0.16 | $ | 0.16 | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 24,230,098 | 24,172,237 | 24,104,329 | 23,973,116 | 23,952,443 | ||||||||||
Diluted | 24,991,958 | 24,827,850 | 24,795,366 | 24,510,092 | 24,346,553 | ||||||||||
Regular dividends declared per share | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.05 | |||||
Special dividends declared per share | $ | — | $ | 0.30 | $ | — | $ | — | $ | 0.20 | |||||
9
Blue Hills Bancorp Inc. | ||||||||||||||||||||||||||
Average Balances/Yields | ||||||||||||||||||||||||||
(Unaudited; dollars in thousands) | Quarters Ended | |||||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||||||||||||||||||||
Average balance | Interest | Yield/Cost | Average balance | Interest | Yield/Cost | Average balance | Interest | Yield/Cost | ||||||||||||||||||
Interest-earning assets | ||||||||||||||||||||||||||
Total loans (1) | $ | 2,209,618 | $ | 23,115 | 4.20 | % | $ | 2,207,895 | $ | 21,841 | 4.01 | % | $ | 2,046,288 | $ | 18,770 | 3.68 | % | ||||||||
Securities (1) | 311,183 | 1,832 | 2.36 | 313,212 | 1,902 | 2.46 | 309,909 | 1,621 | 2.10 | |||||||||||||||||
Other interest earning assets and FHLB stock | 28,181 | 234 | 3.33 | 33,533 | 237 | 2.87 | 36,768 | 243 | 2.65 | |||||||||||||||||
Total interest-earning assets | 2,548,982 | 25,181 | 3.96 | % | 2,554,640 | 23,980 | 3.81 | % | 2,392,965 | 20,634 | 3.46 | % | ||||||||||||||
Non-interest-earning assets | 103,295 | 96,629 | 102,750 | |||||||||||||||||||||||
Total assets | $ | 2,652,277 | $ | 2,651,269 | $ | 2,495,715 | ||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||
NOW | $ | 160,194 | $ | 16 | 0.04 | % | $ | 157,582 | $ | 16 | 0.04 | % | $ | 150,711 | $ | 17 | 0.05 | % | ||||||||
Regular savings | 214,116 | 156 | 0.29 | 219,834 | 165 | 0.30 | 255,255 | 208 | 0.33 | |||||||||||||||||
Money market | 721,329 | 2,066 | 1.15 | 742,035 | 1,972 | 1.08 | 688,600 | 1,669 | 0.97 | |||||||||||||||||
Certificates of deposit | 725,904 | 3,014 | 1.67 | 694,526 | 2,622 | 1.53 | 573,997 | 1,629 | 1.14 | |||||||||||||||||
Total interest-bearing deposits | 1,821,543 | 5,252 | 1.16 | 1,813,977 | 4,775 | 1.07 | 1,668,563 | 3,523 | 0.85 | |||||||||||||||||
Borrowings | 197,429 | 912 | 1.85 | 202,944 | 814 | 1.63 | 204,786 | 643 | 1.26 | |||||||||||||||||
Total interest-bearing liabilities | 2,018,972 | 6,164 | 1.22 | % | 2,016,921 | 5,589 | 1.12 | % | 1,873,349 | 4,166 | 0.89 | % | ||||||||||||||
Non-interest-bearing deposits | 207,888 | 208,561 | 189,180 | |||||||||||||||||||||||
Other non-interest-bearing liabilities | 25,349 | 26,063 | 33,664 | |||||||||||||||||||||||
Total liabilities | 2,252,209 | 2,251,545 | 2,096,193 | |||||||||||||||||||||||
Stockholders' equity | 400,068 | 399,724 | 399,522 | |||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 2,652,277 | $ | 2,651,269 | $ | 2,495,715 | ||||||||||||||||||||
Net interest and dividend income (FTE) | 19,017 | 18,391 | 16,468 | |||||||||||||||||||||||
Less: FTE adjustment | (34 | ) | (32 | ) | (60 | ) | ||||||||||||||||||||
Net interest and dividend income (GAAP) | $ | 18,983 | $ | 18,359 | $ | 16,408 | ||||||||||||||||||||
Net interest rate spread (FTE) | 2.74 | % | 2.69 | % | 2.57 | % | ||||||||||||||||||||
Net interest margin (FTE) | 2.99 | % | 2.92 | % | 2.76 | % | ||||||||||||||||||||
Total deposit cost | 1.04 | % | 0.96 | % | 0.76 | % | ||||||||||||||||||||
(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 21% for the three months ended June 30 and March 31, 2018. A statutory rate of 35% was used in the second quarter of 2017.
10
Blue Hills Bancorp Inc. | |||||||||||||||||
Average Balances/Yields | |||||||||||||||||
(Unaudited; dollars in thousands) | Year to Date | ||||||||||||||||
June 30, 2018 | June 30, 2017 | ||||||||||||||||
Average balance | Interest | Yield/Cost | Average balance | Interest | Yield/Cost | ||||||||||||
Interest-earning assets | |||||||||||||||||
Total loans (1) | $ | 2,208,761 | $ | 44,956 | 4.10 | % | $ | 2,002,710 | $ | 36,206 | 3.65 | % | |||||
Securities (1) | 312,192 | 3,734 | 2.41 | 352,212 | 3,861 | 2.21 | |||||||||||
Other interest earning assets and FHLB stock | 30,842 | 471 | 3.08 | 34,318 | 414 | 2.43 | |||||||||||
Total interest-earning assets | 2,551,795 | 49,161 | 3.88 | % | 2,389,240 | 40,481 | 3.42 | % | |||||||||
Non-interest-earning assets | 99,981 | 99,698 | |||||||||||||||
Total assets | $ | 2,651,776 | $ | 2,488,938 | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||
NOW | $ | 158,896 | $ | 32 | 0.04 | % | $ | 148,068 | $ | 33 | 0.04 | % | |||||
Regular savings | 216,959 | 321 | 0.30 | 258,896 | 426 | 0.33 | |||||||||||
Money market | 731,625 | 4,038 | 1.11 | 670,980 | 3,188 | 0.96 | |||||||||||
Certificates of deposit | 710,301 | 5,636 | 1.60 | 570,837 | 3,130 | 1.11 | |||||||||||
Total interest-bearing deposits | 1,817,781 | 10,027 | 1.11 | 1,648,781 | 6,777 | 0.83 | |||||||||||
Borrowings | 200,171 | 1,726 | 1.74 | 230,500 | 1,289 | 1.13 | |||||||||||
Total interest-bearing liabilities | 2,017,952 | 11,753 | 1.17 | % | 1,879,281 | 8,066 | 0.87 | % | |||||||||
Non-interest-bearing deposits | 208,223 | 186,366 | |||||||||||||||
Other non-interest-bearing liabilities | 25,704 | 27,385 | |||||||||||||||
Total liabilities | 2,251,879 | 2,093,032 | |||||||||||||||
Stockholders' equity | 399,897 | 395,906 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 2,651,776 | $ | 2,488,938 | |||||||||||||
Net interest and dividend income (FTE) | 37,408 | 32,415 | |||||||||||||||
Less: FTE adjustment | (66 | ) | (126 | ) | |||||||||||||
Net interest and dividend income (GAAP) | $ | 37,342 | $ | 32,289 | |||||||||||||
Net interest rate spread (FTE) | 2.71 | % | 2.55 | % | |||||||||||||
Net interest margin (FTE) | 2.96 | % | 2.74 | % | |||||||||||||
Total deposit cost | 1.00 | % | 0.74 | % | |||||||||||||
(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 21% in 2018. A statutory rate of 35% was used in 2017.
11
Blue Hills Bancorp, Inc. | |||||||||||||||
Average Balances - Trend | |||||||||||||||
(Unaudited; dollars in thousands) | Quarters Ended | ||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | |||||||||||
Interest-earning assets | |||||||||||||||
Total loans | $ | 2,209,618 | $ | 2,207,895 | $ | 2,178,388 | $ | 2,096,034 | $ | 2,046,288 | |||||
Securities | 311,183 | 313,212 | 312,313 | 301,484 | 309,909 | ||||||||||
Other interest earning assets and FHLB stock | 28,181 | 33,533 | 28,842 | 32,051 | 36,768 | ||||||||||
Total interest-earning assets | 2,548,982 | 2,554,640 | 2,519,543 | 2,429,569 | 2,392,965 | ||||||||||
Non-interest-earning assets | 103,295 | 96,629 | 96,781 | 101,188 | 102,750 | ||||||||||
Total assets | $ | 2,652,277 | $ | 2,651,269 | $ | 2,616,324 | $ | 2,530,757 | $ | 2,495,715 | |||||
Interest-bearing liabilities | |||||||||||||||
NOW | $ | 160,194 | $ | 157,582 | $ | 160,371 | $ | 153,224 | $ | 150,711 | |||||
Regular savings | 214,116 | 219,834 | 235,864 | 243,680 | 255,255 | ||||||||||
Money market | 721,329 | 742,035 | 718,489 | 708,748 | 688,600 | ||||||||||
Certificates of deposit | 725,904 | 694,526 | 653,573 | 653,339 | 573,997 | ||||||||||
Total interest-bearing deposits | 1,821,543 | 1,813,977 | 1,768,297 | 1,758,991 | 1,668,563 | ||||||||||
Borrowings | 197,429 | 202,944 | 202,255 | 133,788 | 204,786 | ||||||||||
Total interest-bearing liabilities | 2,018,972 | 2,016,921 | 1,970,552 | 1,892,779 | 1,873,349 | ||||||||||
Non-interest-bearing deposits | 207,888 | 208,561 | 220,167 | 213,459 | 189,180 | ||||||||||
Other non-interest-bearing liabilities | 25,349 | 26,063 | 23,602 | 23,603 | 33,664 | ||||||||||
Total liabilities | 2,252,209 | 2,251,545 | 2,214,321 | 2,129,841 | 2,096,193 | ||||||||||
Stockholders' equity | 400,068 | 399,724 | 402,003 | 400,916 | 399,522 | ||||||||||
Total liabilities and stockholders' equity | $ | 2,652,277 | $ | 2,651,269 | $ | 2,616,324 | $ | 2,530,757 | $ | 2,495,715 | |||||
12
Blue Hills Bancorp, Inc. | |||||
Yield Trend | |||||
(Unaudited) | Quarters Ended | ||||
June 30, | March 31, | December 31, | September 30, | June 30, | |
2018 | 2018 | 2017 | 2017 | 2017 | |
Interest-earning assets | |||||
Total loans (1) | 4.20% | 4.01% | 3.81% | 3.74% | 3.68% |
Securities (1) | 2.36% | 2.46% | 2.33% | 2.12% | 2.10% |
Other interest earning assets and FHLB stock | 3.33% | 2.87% | 2.15% | 2.66% | 2.65% |
Total interest-earning assets | 3.96% | 3.81% | 3.61% | 3.53% | 3.46% |
Interest-bearing liabilities | |||||
NOW | 0.04% | 0.04% | 0.04% | 0.04% | 0.05% |
Regular savings | 0.29% | 0.30% | 0.31% | 0.31% | 0.33% |
Money market | 1.15% | 1.08% | 1.01% | 0.99% | 0.97% |
Certificates of deposit | 1.67% | 1.53% | 1.41% | 1.28% | 1.14% |
Total interest-bearing deposits | 1.16% | 1.07% | 0.98% | 0.92% | 0.85% |
Borrowings | 1.85% | 1.63% | 1.44% | 1.49% | 1.26% |
Total interest-bearing liabilities | 1.22% | 1.12% | 1.02% | 0.96% | 0.89% |
Net interest rate spread (FTE) (1) | 2.74% | 2.69% | 2.59% | 2.57% | 2.57% |
Net interest margin (FTE) (1) | 2.99% | 2.92% | 2.81% | 2.78% | 2.76% |
Total deposit cost | 1.04% | 0.96% | 0.87% | 0.82% | 0.76% |
(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 21% for the three months ended June 30, 2018 and March 31, 2018. A statutory rate of 35% was used in 2017.
13
Blue Hills Bancorp Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Net Income | |||||||||||||||
(Unaudited; dollars in thousands, except share data) | Quarter Ended | ||||||||||||||
June 30, 2018 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 8,823 | $ | 2,366 | $ | 6,457 | $ | 0.26 | |||||||
Less unrealized gain on equity securities | (452 | ) | (121 | ) | (331 | ) | (0.01 | ) | |||||||
Non-GAAP basis | $ | 8,371 | $ | 2,245 | $ | 6,126 | $ | 0.25 | |||||||
Quarter Ended | |||||||||||||||
March 31, 2018 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 8,846 | $ | 2,263 | $ | 6,583 | $ | 0.27 | |||||||
Add unrealized loss on equity securities | 69 | 18 | 51 | — | |||||||||||
Less gain on exchange of investment in Northeast Retirement Service | (653 | ) | (169 | ) | (484 | ) | (0.02 | ) | |||||||
Less gain on sale of premises and equipment | (271 | ) | (70 | ) | (201 | ) | (0.01 | ) | |||||||
Non-GAAP basis | $ | 7,991 | $ | 2,042 | $ | 5,949 | $ | 0.24 | |||||||
Quarter Ended | |||||||||||||||
December 31, 2017 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 5,858 | $ | 4,565 | $ | 1,293 | $ | 0.05 | |||||||
Add pension settlement charges | 317 | 129 | 188 | 0.01 | |||||||||||
Add impact of tax reform on deferred tax asset valuation | — | (2,500 | ) | 2,500 | 0.10 | ||||||||||
Non-GAAP basis | $ | 6,175 | $ | 2,194 | $ | 3,981 | $ | 0.16 | |||||||
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 realized 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 | |||||||
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.
14
Blue Hills Bancorp Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Net Income | |||||||||||||||
(Unaudited; dollars in thousands, except share data) | Year to Date | ||||||||||||||
June 30, 2018 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 17,669 | $ | 4,629 | $ | 13,040 | $ | 0.52 | |||||||
Less unrealized gain on equity securities | (383 | ) | (103 | ) | (280 | ) | (0.01 | ) | |||||||
Less gain on exchange of investment in Northeast Retirement Service | (653 | ) | (169 | ) | (484 | ) | (0.02 | ) | |||||||
Less gain on sale of property, plant and equipment | (271 | ) | (70 | ) | (201 | ) | (0.01 | ) | |||||||
Non-GAAP basis | $ | 16,362 | $ | 4,287 | $ | 12,075 | $ | 0.48 | |||||||
Year to Date | |||||||||||||||
June 30, 2017 | |||||||||||||||
Income Before Income Taxes | Provision for Income Taxes | Net Income | Earnings per Common Share (diluted) | ||||||||||||
GAAP basis | $ | 15,674 | $ | 4,319 | $ | 11,355 | $ | 0.47 | |||||||
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 reversal of state tax valuation allowance | — | 1,697 | (1,697 | ) | (0.07 | ) | |||||||||
Non-GAAP basis | $ | 9,853 | $ | 3,928 | $ | 5,925 | $ | 0.25 | |||||||
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) | Quarters Ended | ||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | |||||||||||
Performance Ratios (annualized) | |||||||||||||||
Diluted EPS: | |||||||||||||||
GAAP | $ | 0.26 | $ | 0.27 | $ | 0.05 | $ | 0.16 | $ | 0.16 | |||||
Non-GAAP | $ | 0.25 | $ | 0.24 | $ | 0.16 | $ | 0.16 | $ | 0.14 | |||||
Return on average assets (ROAA): | |||||||||||||||
GAAP | 0.98 | % | 1.01 | % | 0.20 | % | 0.60 | % | 0.62 | % | |||||
Non-GAAP | 0.93 | % | 0.91 | % | 0.60 | % | 0.61 | % | 0.53 | % | |||||
Return on average equity (ROAE): | |||||||||||||||
GAAP | 6.47 | % | 6.68 | % | 1.28 | % | 3.80 | % | 3.88 | % | |||||
Non-GAAP | 6.14 | % | 6.04 | % | 3.93 | % | 3.87 | % | 3.29 | % | |||||
Return on average tangible common equity (ROATCE) (1) (3): | |||||||||||||||
GAAP | 6.63 | % | 6.84 | % | 1.31 | % | 3.90 | % | 3.99 | % | |||||
Non-GAAP | 6.29 | % | 6.19 | % | 4.03 | % | 3.97 | % | 3.37 | % | |||||
Efficiency ratio (2) (3): | |||||||||||||||
GAAP | 61 | % | 62 | % | 68 | % | 68 | % | 64 | % | |||||
Non-GAAP | 62 | % | 65 | % | 67 | % | 67 | % | 67 | % | |||||
(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 pages 14 for reconciliation of 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 | |||||
June 30, 2018 | June 30, 2017 | |||||
Performance Ratios (annualized) | ||||||
Diluted EPS | ||||||
GAAP | $ | 0.52 | $ | 0.47 | ||
Non-GAAP | 0.48 | 0.25 | ||||
Return on average assets (ROAA) | ||||||
GAAP | 0.99 | % | 0.92 | % | ||
Non-GAAP | 0.92 | % | 0.48 | % | ||
Return on average equity (ROAE) | ||||||
GAAP | 6.58 | % | 5.78 | % | ||
Non-GAAP | 6.09 | % | 3.02 | % | ||
Return on average tangible common equity (ROATCE) (1) (3) | ||||||
GAAP | 6.74 | % | 5.94 | % | ||
Non-GAAP | 6.24 | % | 3.10 | % | ||
Efficiency ratio (2) (3) | ||||||
GAAP | 61 | % | 61 | % | ||
Non-GAAP | 63 | % | 71 | % | ||
(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 Year Ended | |||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||
Asset Quality | |||||||||||||||
Non-performing Assets | $ | 13,898 | $ | 13,319 | $ | 12,779 | $ | 13,898 | $ | 12,779 | |||||
Non-performing Assets/ Total Assets | 0.51 | % | 0.50 | % | 0.51 | % | 0.51 | % | 0.51 | % | |||||
Allowance for Loan Losses/ Total Loans | 0.89 | % | 0.92 | % | 0.97 | % | 0.89 | % | 0.97 | % | |||||
Net Charge-offs (Recoveries) | $ | 161 | $ | 232 | $ | 76 | $ | 393 | $ | 8 | |||||
Annualized Net Charge-offs (Recoveries)/ Average Loans | 0.03 | % | 0.04 | % | 0.01 | % | 0.04 | % | — | % | |||||
Allowance for Loan Losses/ Nonperforming Loans | 196 | % | 209 | % | 158 | % | 196 | % | 158 | % | |||||
Capital/Other | |||||||||||||||
Common shares outstanding | 26,874,071 | 26,861,521 | 26,860,988 | ||||||||||||
Book value per share | $ | 14.90 | $ | 14.72 | $ | 14.79 | |||||||||
Tangible book value per share | $ | 14.54 | $ | 14.37 | $ | 14.42 | |||||||||
Tangible Common Equity/Tangible Assets (1) (2) | 14.31 | % | 14.51 | % | 15.47 | % | |||||||||
Full-time Equivalent Employees | 245 | 246 | 230 | ||||||||||||
(1) Tangible common equity equals total equity less goodwill and core deposit intangibles. Tangible assets equals total assets less goodwill and core deposit 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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