Exhibit No. | Description | |
99.1 | Press Release of Sterling Bancorp, dated October 23, 2018 |
DATE: October 23, 2018 | By:/s/ Luis Massiani |
Exhibit Number | Description | |
99.1 |
FOR IMMEDIATE RELEASE | STERLING BANCORP CONTACT: |
October 23, 2018 | Luis Massiani, SEVP & Chief Financial Officer |
845.369.8040 | |
http://www.sterlingbancorp.com |
($ in thousands except per share amounts) | GAAP / As Reported | Non-GAAP / As Adjusted1 | |||||||||||||||||||
9/30/2017 | 9/30/2018 | Change % / bps | 9/30/2017 | 9/30/2018 | Change % / bps | ||||||||||||||||
Total revenue2 | $ | 134,061 | $ | 268,094 | 100.0 | % | $ | 138,681 | $ | 272,202 | 96.3 | % | |||||||||
Net income available to common | 44,852 | 117,657 | 162.3 | 47,865 | 114,273 | 138.7 | |||||||||||||||
Diluted EPS available to common | 0.33 | 0.52 | 57.6 | 0.35 | 0.51 | 45.7 | |||||||||||||||
Net interest margin3 | 3.29 | % | 3.48 | % | 19 | 3.42 | % | 3.54 | % | 12 | |||||||||||
Return on average tangible common equity | 14.86 | 18.63 | 377 | 15.85 | 18.09 | 224 | |||||||||||||||
Return on average tangible assets | 1.19 | 1.59 | 40 | 1.27 | 1.55 | 28 | |||||||||||||||
Operating efficiency ratio4 | 46.7 | 41.7 | (500 | ) | 40.6 | 38.9 | (170 | ) |
▪ | Net income available to common stockholders of $117.7 million (as reported) and $114.3 million (as adjusted). |
▪ | Total portfolio loans, gross were $20.5 billion and total deposits were $21.5 billion at September 30, 2018. |
▪ | Total commercial loans of $15.8 billion at September 30, 2018; growth of 12.5% since the merger with Astoria Financial Corporation (“Astoria Merger”). |
▪ | Operating efficiency ratio of 41.7% (as reported) and 38.9% (as adjusted). |
▪ | Operating leverage ratio of 2.7x relative to the same quarter a year ago. |
▪ | Tangible book value per common share1 of $11.33 at September 30, 2018; growth of 26.6% over the prior year. |
($ in thousands except per share amounts) | GAAP / As Reported | Non-GAAP / As Adjusted1 | |||||||||||||||||||
6/30/2018 | 9/30/2018 | Change % / bps | 6/30/2018 | 9/30/2018 | Change % / bps | ||||||||||||||||
Total revenue2 | $ | 284,084 | $ | 268,094 | (5.6 | )% | $ | 276,806 | $ | 272,202 | (1.7 | )% | |||||||||
Net income available to common | 112,245 | 117,657 | 4.8 | 112,868 | 114,273 | 1.2 | |||||||||||||||
Diluted EPS available to common | 0.50 | 0.52 | 4.0 | 0.50 | 0.51 | 2.0 | |||||||||||||||
Net interest margin3 | 3.56 | % | 3.48 | % | (8 | ) | 3.62 | % | 3.54 | % | (8 | ) | |||||||||
Return on average tangible common equity | 18.68 | 18.63 | (5 | ) | 18.79 | 18.09 | (70 | ) | |||||||||||||
Return on average tangible assets | 1.54 | 1.59 | 5 | 1.55 | 1.55 | — | |||||||||||||||
Operating efficiency ratio4 | 44.0 | 41.7 | (230 | ) | 38.3 | 38.9 | 60 |
▪ | Loan portfolio continues to transition; growth in average commercial loan balances of $330.8 million over linked quarter. |
▪ | Adjusted operating expenses were $105.9 million1; represents an annualized run-rate of $420.2 million. |
▪ | Total deposit growth of $490.2 million; cost of total deposits increased thirteen basis points to 0.68%. |
▪ | Consolidated eight financial centers and one back-office location in the third quarter. |
▪ | Completed full integration of Astoria’s legacy deposit systems. |
($ in thousands) | For the three months ended | Change % / bps | |||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | Y-o-Y | Linked Qtr | |||||||||||||
Interest and dividend income | $ | 145,692 | $ | 304,906 | $ | 309,025 | 112.1 | % | 1.4 | % | |||||||
Interest expense | 25,619 | 58,690 | 65,076 | 154.0 | 10.9 | ||||||||||||
Net interest income | $ | 120,073 | $ | 246,216 | $ | 243,949 | 103.2 | (0.9 | ) | ||||||||
Accretion income on acquired loans | $ | 3,397 | $ | 28,010 | $ | 26,574 | 682.3 | % | (5.1 | )% | |||||||
Yield on loans | 4.67 | % | 5.01 | % | 5.01 | % | 34 | — | |||||||||
Tax equivalent yield on investment securities | 2.87 | 2.88 | 2.87 | — | (1 | ) | |||||||||||
Tax equivalent yield on interest earning assets | 4.12 | 4.47 | 4.47 | 35 | — | ||||||||||||
Cost of total deposits | 0.50 | 0.55 | 0.68 | 18 | 13 | ||||||||||||
Cost of interest bearing deposits | 0.69 | 0.68 | 0.84 | 15 | 16 | ||||||||||||
Cost of borrowings | 1.75 | 2.23 | 2.29 | 54 | 6 | ||||||||||||
Cost of interest bearing liabilities | 0.97 | 1.06 | 1.17 | 20 | 11 | ||||||||||||
Tax equivalent net interest margin5 | 3.42 | 3.62 | 3.54 | 12 | (8 | ) | |||||||||||
Average loans, including loans held for sale | $ | 10,186,414 | $ | 20,339,964 | $ | 20,386,994 | 100.1 | % | 0.2 | % | |||||||
Average investment securities | 3,916,076 | 6,751,528 | 6,774,712 | 73.0 | 0.3 | ||||||||||||
Average total interest earning assets | 14,471,120 | 27,757,380 | 27,799,933 | 92.1 | 0.2 | ||||||||||||
Average deposits and mortgage escrow | 10,691,006 | 20,768,669 | 21,115,354 | 97.5 | 1.7 |
▪ | The yield on loans was 5.01% compared to 4.67% for the three months ended September 30, 2017. The increase in yield on loans was mainly due to an increase in accretion income on acquired loans, which was $26.6 million in the third quarter of 2018 compared to $3.4 million in the third quarter of 2017. |
▪ | Average commercial loans, which includes all commercial and industrial loans, commercial real estate (including multi-family) and acquisition development and construction loans, were $15.5 billion compared to $9.2 billion in the third quarter of 2017, an increase of $6.3 billion or 68.1%. |
▪ | The tax equivalent yield on investment securities was unchanged at 2.87%. The tax equivalent adjustment assumed a 35% federal tax rate in 2017 compared to 21% in 2018. Average tax exempt securities balances grew to $2.6 billion for the quarter ended September 30, 2018, compared to $1.4 billion in the third quarter of 2017. Average investment securities were $6.8 billion, or 24.4%, of average total interest earning assets for the third quarter of 2018 compared to $3.9 billion, or 27.1%, of average earning assets for the third quarter of 2017. |
▪ | The tax equivalent yield on interest earning assets increased 35 basis points between the periods to 4.47%, mainly due to higher accretion income on acquired loans, as described above. |
▪ | The cost of total deposits was 68 basis points and the cost of borrowings was 2.29%, compared to 50 basis points and 1.75%, respectively, for the same period a year ago. The increase was mainly due to increases in market rates of interest. The cost of total deposits has also been impacted by the competitive environment in the Greater New York metropolitan area, as higher interest rates are required to attract and retain higher balance commercial and consumer deposits. |
▪ | The total cost of interest bearing liabilities increased 20 basis points to 1.17% for the third quarter of 2018 compared to 0.97% for the third quarter of 2017. The increase was mainly due to an increase in market interest rates, which increased the cost of wholesale, brokered and certificates of deposit between the periods. Year-to-date, the change in the total cost of deposits relative to the change in the Federal Funds rate was equal to 24%. Excluding the impact of brokered deposits and municipal deposits, the change was equal to 15%. |
▪ | The yield on loans was 5.01%, unchanged from the linked quarter. Accretion income on acquired loans was $26.6 million in the third quarter of 2018, a decrease of $1.4 million relative to the linked quarter. Yield on loans was also impacted by a decrease of $1.4 million in loan prepayment penalties. |
▪ | The average balance of total portfolio loans increased $47.0 million. This included an increase of $330.8 million in the balance of commercial loans, which was offset by decreases of $269.7 million in the balance of residential mortgage loans and $14.1 million of consumer loans. Commercial loan growth was mainly due to originations generated by our commercial banking teams. |
▪ | The tax equivalent yield on investment securities decreased one basis points to 2.87% in the third quarter of 2018, mainly due to a change in mix of securities. In the third quarter, the average balance of taxable securities increased $63.0 million and the average balance of tax exempt securities declined $39.8 million. |
▪ | The tax equivalent yield on interest earning assets was unchanged between the third quarter of 2018 and the linked quarter and was 4.47%. |
▪ | The cost of total deposits increased 13 basis points to 68 basis points in the quarter and the total cost of borrowings increased to 2.29% compared to 2.23% in the linked quarter, mainly due to the factors discussed above. |
▪ | Average interest bearing deposits increased by $132.5 million and average borrowings decreased $379.8 million relative to the linked quarter. Total interest expense increased by $6.4 million over the linked quarter. |
($ in thousands) | For the three months ended | Change % | |||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | Y-o-Y | Linked Qtr | |||||||||||||
Total non-interest income | $ | 13,988 | $ | 37,868 | $ | 24,145 | 72.6 | % | (36.2 | )% | |||||||
Net (loss) on sale of securities | (21 | ) | (425 | ) | (56 | ) | 166.7 | (86.8 | ) | ||||||||
Net gain on sale of fixed assets | — | 11,797 | — | — | (100.0 | ) | |||||||||||
Adjusted non-interest income | $ | 14,009 | $ | 26,496 | $ | 24,201 | 72.8 | (8.7 | ) |
($ in thousands) | For the three months ended | Change % / bps | |||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | Y-o-Y | Linked Qtr | |||||||||||||
Compensation and benefits | $ | 31,727 | $ | 56,159 | $ | 54,823 | 72.8 | % | (2.4 | )% | |||||||
Stock-based compensation plans | 1,969 | 3,336 | 3,115 | 58.2 | (6.6 | ) | |||||||||||
Occupancy and office operations | 8,583 | 17,939 | 16,558 | 92.9 | (7.7 | ) | |||||||||||
Information technology | 2,512 | 9,997 | 10,699 | 325.9 | 7.0 | ||||||||||||
Amortization of intangible assets | 2,166 | 5,865 | 5,865 | 170.8 | — | ||||||||||||
FDIC insurance and regulatory assessments | 2,310 | 5,495 | 6,043 | 161.6 | 10.0 | ||||||||||||
Other real estate owned, (“OREO”) net | 894 | (226 | ) | 1,497 | 67.4 | (762.4 | ) | ||||||||||
Merger-related expenses | 4,109 | — | — | (100.0 | ) | — | |||||||||||
Charge for asset write-downs, systems integration, retention and severance | — | 13,132 | — | NM | (100.0 | ) | |||||||||||
Other expenses | 8,347 | 13,231 | 13,173 | 57.8 | (0.4 | ) | |||||||||||
Total non-interest expense | $ | 62,617 | $ | 124,928 | $ | 111,773 | 78.5 | (10.5 | ) | ||||||||
Full time equivalent employees (“FTEs”) at period end | 992 | 2,037 | 1,959 | 97.5 | (3.8 | ) | |||||||||||
Financial centers at period end | 40 | 121 | 113 | 182.5 | (6.6 | ) | |||||||||||
Operating efficiency ratio, as reported6 | 46.7 | % | 44.0 | % | 41.7 | % | 500 | 230 | |||||||||
Operating efficiency ratio, as adjusted6 | 40.6 | 38.3 | 38.9 | 170 | (60 | ) | |||||||||||
6 See a reconciliation of this non-GAAP financial measure beginning on page 18. |
▪ | Compensation and benefits increased $23.1 million between the periods. Total FTEs increased to 1,959 from 992, which was mainly due to the Astoria Merger and the continued hiring of commercial bankers and risk management personnel. |
▪ | Occupancy and office operations increased $8.0 million mainly due to the financial centers and other locations acquired in the Astoria Merger. |
▪ | Information technology expense increased $8.2 million between the periods. The increase is mainly due to the Astoria Merger. We anticipate this expense will decrease in future periods as we completed the full integration of Astoria’s legacy deposit systems in the third quarter of 2018. |
▪ | Amortization of intangible assets increased $3.7 million. The increase is mainly due to the amortization of the core deposit intangible asset that was recorded in the Astoria Merger. |
▪ | FDIC insurance and regulatory assessments increased $3.7 million to $6.0 million in the third quarter of 2018, compared to $2.3 million for the third quarter of 2017. This was mainly due to growth in our total assets. |
▪ | OREO, net increased $603 thousand to $1.5 million in the third quarter of 2018, compared to $894 thousand for the third quarter of 2017. In the third quarter of 2018, OREO, net included taxes of $617 thousand and maintenance and operating costs of $791 thousand. In the year earlier period, OREO, net was mainly incurred for taxes and property write-downs. |
▪ | Other expenses increased $4.8 million, mainly due to the Astoria Merger, and included communications expense, professional fees, operational losses, advertising and other. |
▪ | Compensation and benefits declined $1.3 million and was $54.8 million in the third quarter of 2018 compared to $56.2 million in the linked quarter. Total FTEs declined to 1,959 at September 30, 2018 from 2,037 at June 30, 2018 as we continue to integrate Astoria’s personnel and operations. |
▪ | Occupancy and office operations decreased $1.4 million mainly due to continued consolidation of financial centers. |
▪ | Information technology expense increased $702 thousand in the third quarter of 2018 compared to the linked quarter. We anticipate a reduction in information technology expense of approximately $1.5 million per quarter as cost savings from the Astoria legacy deposit systems conversion are realized. |
▪ | OREO, net was $1.5 million in the third quarter of 2018 compared to income of $226 thousand in the linked quarter, which included net gain on sale of OREO of $811 thousand. |
($ in thousands) | As of | Change % / bps | |||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | Y-o-Y | Linked Qtr | |||||||||||||
Total assets | $ | 16,780,097 | $ | 31,463,077 | $ | 31,261,265 | 86.3 | % | (0.6 | )% | |||||||
Total portfolio loans, gross | 10,493,535 | 20,674,493 | 20,533,214 | 95.7 | (0.7 | ) | |||||||||||
Commercial & industrial (“C&I”) loans | 4,841,664 | 6,288,683 | 6,244,030 | 29.0 | (0.7 | ) | |||||||||||
Commercial real estate loans (including multi-family) | 4,473,245 | 9,160,760 | 9,284,657 | 107.6 | 1.4 | ||||||||||||
Acquisition, development and construction loans | 236,456 | 236,915 | 265,676 | 12.4 | 12.1 | ||||||||||||
Total commercial loans | 9,551,365 | 15,686,358 | 15,794,363 | 65.4 | 0.7 | ||||||||||||
Residential mortgage loans | 684,093 | 4,652,501 | 4,421,520 | 546.3 | (5.0 | ) | |||||||||||
Total deposits | 11,043,438 | 20,965,889 | 21,456,057 | 94.3 | 2.3 | ||||||||||||
Core deposits 8 | 9,753,052 | 19,870,947 | 20,448,343 | 109.7 | 2.9 | ||||||||||||
Investment securities | 4,515,650 | 6,789,246 | 6,685,972 | 48.1 | (1.5 | ) | |||||||||||
Total borrowings | 3,453,783 | 5,537,537 | 4,825,855 | 39.7 | (12.9 | ) | |||||||||||
Loans to deposits | 95.0 | % | 98.6 | % | 95.7 | % | 70 | (290 | ) | ||||||||
Core deposits to total deposits | 88.3 | 94.8 | 95.3 | 700 | 50 | ||||||||||||
Investment securities to total assets | 26.9 | 21.6 | 21.4 | (550 | ) | (20 | ) |
▪ | C&I loans (which include traditional C&I, asset-based lending, payroll finance, warehouse lending, factored receivables, equipment financing and public sector finance loans) represented 30.4%, commercial real estate loans (which include multi-family loans) represented 45.2%, consumer and residential mortgage loans combined represented 23.1%, and acquisition, development and construction loans represented 1.3% of the total loan portfolio. Loan growth in the year-over-year period was mainly a result of the Astoria Merger, originations by our commercial banking teams and the Advantage Funding acquisition. Linked quarter comparisons are discussed below. |
▪ | Total commercial loans, which include all C&I loans, commercial real estate (including multi-family) and acquisition, development and construction loans, increased by $108.0 million in the linked quarter. Excluding loans acquired in the Astoria Merger, commercial loans increased by $1.8 billion in the past twelve months. |
▪ | Residential mortgage loans were $4.4 billion at September 30, 2018, compared to $4.7 billion at June 30, 2018. The decline was mainly due to repayments of loans acquired in the Astoria Merger. |
▪ | Total deposits at September 30, 2018 increased $490.2 million compared to June 30, 2018, and increased $10.4 billion over September 30, 2017. We assumed $9.0 billion of deposits in the Astoria Merger. The remaining increase in deposits was mainly due to growth in commercial deposits, certificates of deposit and municipal deposits, which reach their peak in the third quarter. |
▪ | Core deposits at September 30, 2018 increased $577.4 million compared to June 30, 2018. Core deposits increased $10.7 billion over September 30, 2017. |
▪ | Municipal deposits at September 30, 2018 were $2.0 billion, an increase of $367.2 million relative to June 30, 2018. |
▪ | Investment securities increased by $103.3 million relative to June 30, 2018, and represented 21.4% of total assets at September 30, 2018. |
($ in thousands) | For the three months ended | Change % / bps | |||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | Y-o-Y | Linked Qtr | |||||||||||||
Provision for loan losses | $ | 5,000 | $ | 13,000 | $ | 9,500 | 90.0 | % | (26.9 | )% | |||||||
Net charge-offs | 3,023 | 9,066 | 4,161 | 37.6 | (54.1 | ) | |||||||||||
Allowance for loan losses | 72,128 | 86,026 | 91,365 | 26.7 | 6.2 | ||||||||||||
Non-performing loans | 69,452 | 190,975 | 185,222 | 166.7 | (3.0 | ) | |||||||||||
Loans 30 to 89 days past due | 21,491 | 73,441 | 50,084 | 133.0 | (31.8 | ) | |||||||||||
Annualized net charge-offs to average loans | 0.12 | % | 0.18 | % | 0.08 | % | (4 | ) | (10 | ) | |||||||
Allowance for loan losses to total loans | 0.69 | 0.42 | 0.44 | (25 | ) | 2 | |||||||||||
Allowance for loan losses to non-performing loans | 103.9 | 45.0 | 49.3 | (5,460 | ) | 430 |
($ in thousands, except share and per share data) | As of | Change % / bps | |||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | Y-o-Y | Three months | |||||||||||||
Total stockholders’ equity | $ | 1,971,480 | $ | 4,352,735 | $ | 4,438,303 | 125.1 | % | 2.0 | % | |||||||
Preferred stock | — | 138,828 | 138,627 | NM | (0.1 | ) | |||||||||||
Goodwill and intangible assets | 756,290 | 1,754,418 | 1,745,181 | 130.8 | (0.5 | ) | |||||||||||
Tangible common stockholders’ equity | $ | 1,215,190 | $ | 2,459,489 | $ | 2,554,495 | 110.2 | 3.9 | |||||||||
Common shares outstanding | 135,807,544 | 225,470,254 | 225,446,089 | 66.0 | — | ||||||||||||
Book value per common share | $ | 14.52 | $ | 18.69 | $ | 19.07 | 31.3 | 2.0 | |||||||||
Tangible book value per common share 9 | 8.95 | 10.91 | 11.33 | 26.6 | 3.8 | ||||||||||||
Tangible common equity to tangible assets 9 | 7.58 | % | 8.28 | % | 8.65 | % | 107 | 37 | |||||||||
Estimated Tier 1 leverage ratio - Company | 8.42 | 9.32 | 9.68 | 126 | 36 | ||||||||||||
Estimated Tier 1 leverage ratio - Bank | 8.54 | 9.84 | 10.10 | 156 | 26 | ||||||||||||
9 See a reconciliation of non-GAAP financial measures beginning on page 18. |
9/30/2017 | 12/31/2017 | 9/30/2018 | |||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 407,203 | $ | 479,906 | $ | 533,984 | |||||
Investment securities | 4,515,650 | 6,474,561 | 6,685,972 | ||||||||
Loans held for sale | — | 5,246 | 31,042 | ||||||||
Portfolio loans: | |||||||||||
Commercial and industrial (“C&I”) | 4,841,664 | 5,306,821 | 6,244,030 | ||||||||
Commercial real estate (including multi-family) | 4,473,245 | 8,998,419 | 9,284,657 | ||||||||
Acquisition, development and construction | 236,456 | 282,792 | 265,676 | ||||||||
Residential mortgage | 684,093 | 5,054,732 | 4,421,520 | ||||||||
Consumer | 258,077 | 366,219 | 317,331 | ||||||||
Total portfolio loans, gross | 10,493,535 | 20,008,983 | 20,533,214 | ||||||||
Allowance for loan losses | (72,128 | ) | (77,907 | ) | (91,365 | ) | |||||
Total portfolio loans, net | 10,421,407 | 19,931,076 | 20,441,849 | ||||||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stock, at cost | 191,276 | 284,112 | 351,455 | ||||||||
Accrued interest receivable | 57,561 | 94,098 | 109,377 | ||||||||
Premises and equipment, net | 56,378 | 321,722 | 289,794 | ||||||||
Goodwill | 696,600 | 1,579,891 | 1,609,772 | ||||||||
Other intangibles | 59,690 | 153,191 | 135,409 | ||||||||
Bank owned life insurance | 204,281 | 651,638 | 660,279 | ||||||||
Other real estate owned | 11,697 | 27,095 | 22,735 | ||||||||
Other assets | 158,354 | 357,005 | 389,597 | ||||||||
Total assets | $ | 16,780,097 | $ | 30,359,541 | $ | 31,261,265 | |||||
Liabilities: | |||||||||||
Deposits | $ | 11,043,438 | $ | 20,538,204 | $ | 21,456,057 | |||||
FHLB borrowings | 3,016,000 | 4,510,123 | 4,429,110 | ||||||||
Other borrowings | 188,403 | 30,162 | 22,888 | ||||||||
Senior notes | 76,719 | 278,209 | 200,972 | ||||||||
Subordinated notes | 172,661 | 172,716 | 172,885 | ||||||||
Mortgage escrow funds | 19,148 | 122,641 | 96,952 | ||||||||
Other liabilities | 292,248 | 467,308 | 444,098 | ||||||||
Total liabilities | 14,808,617 | 26,119,363 | 26,822,962 | ||||||||
Stockholders’ equity: | |||||||||||
Preferred stock | — | 139,220 | 138,627 | ||||||||
Common stock | 1,411 | 2,299 | 2,299 | ||||||||
Additional paid-in capital | 1,590,752 | 3,780,908 | 3,773,164 | ||||||||
Treasury stock | (59,674 | ) | (58,039 | ) | (51,973 | ) | |||||
Retained earnings | 452,650 | 401,956 | 694,861 | ||||||||
Accumulated other comprehensive (loss) | (13,659 | ) | (26,166 | ) | (118,675 | ) | |||||
Total stockholders’ equity | 1,971,480 | 4,240,178 | 4,438,303 | ||||||||
Total liabilities and stockholders’ equity | $ | 16,780,097 | $ | 30,359,541 | $ | 31,261,265 | |||||
Shares of common stock outstanding at period end | 135,807,544 | 224,782,694 | 225,446,089 | ||||||||
Book value per common share | $ | 14.52 | $ | 18.24 | $ | 19.07 | |||||
Tangible book value per common share1 | 8.95 | 10.53 | 11.33 | ||||||||
1 See reconciliation of non-GAAP financial measures beginning on page 18. |
For the Quarter Ended | For the Nine Months Ended | ||||||||||||||||||
9/30/2017 | 6/30/2018 | 9/30/2018 | 9/30/2017 | 9/30/2018 | |||||||||||||||
Interest and dividend income: | |||||||||||||||||||
Loans and loan fees | $ | 119,898 | $ | 254,253 | $ | 257,211 | $ | 336,308 | $ | 746,079 | |||||||||
Securities taxable | 15,141 | 29,031 | 29,765 | 40,536 | 85,856 | ||||||||||||||
Securities non-taxable | 8,542 | 15,403 | 15,244 | 23,951 | 45,959 | ||||||||||||||
Other earning assets | 2,111 | 6,219 | 6,805 | 5,160 | 17,382 | ||||||||||||||
Total interest and dividend income | 145,692 | 304,906 | 309,025 | 405,955 | 895,276 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 13,392 | 28,464 | 35,974 | 33,805 | 88,645 | ||||||||||||||
Borrowings | 12,227 | 30,226 | 29,102 | 30,029 | 82,098 | ||||||||||||||
Total interest expense | 25,619 | 58,690 | 65,076 | 63,834 | 170,743 | ||||||||||||||
Net interest income | 120,073 | 246,216 | 243,949 | 342,121 | 724,533 | ||||||||||||||
Provision for loan losses | 5,000 | 13,000 | 9,500 | 14,000 | 35,500 | ||||||||||||||
Net interest income after provision for loan losses | 115,073 | 233,216 | 234,449 | 328,121 | 689,033 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Deposit fees and service charges | 3,309 | 6,985 | 6,333 | 9,893 | 20,319 | ||||||||||||||
Accounts receivable management / factoring commissions and other related fees | 4,764 | 5,337 | 5,595 | 12,670 | 16,292 | ||||||||||||||
Bank owned life insurance | 1,320 | 4,243 | 3,733 | 4,342 | 11,591 | ||||||||||||||
Loan commissions and fees | 2,819 | 4,566 | 4,142 | 8,643 | 12,114 | ||||||||||||||
Investment management fees | 271 | 2,121 | 1,943 | 825 | 5,889 | ||||||||||||||
Net (loss) on sale of securities | (21 | ) | (425 | ) | (56 | ) | (274 | ) | (5,902 | ) | |||||||||
Gain on sale of fixed assets | 1 | 11,797 | — | 1 | 11,800 | ||||||||||||||
Other | 1,525 | 3,244 | 2,455 | 4,342 | 8,617 | ||||||||||||||
Total non-interest income | 13,988 | 37,868 | 24,145 | 40,442 | 80,720 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Compensation and benefits | 31,727 | 56,159 | 54,823 | 93,893 | 165,662 | ||||||||||||||
Stock-based compensation plans | 1,969 | 3,336 | 3,115 | 5,602 | 9,304 | ||||||||||||||
Occupancy and office operations | 8,583 | 17,939 | 16,558 | 25,550 | 51,956 | ||||||||||||||
Information technology | 2,512 | 9,997 | 10,699 | 7,402 | 32,412 | ||||||||||||||
Amortization of intangible assets | 2,166 | 5,865 | 5,865 | 6,582 | 17,782 | ||||||||||||||
FDIC insurance and regulatory assessments | 2,310 | 5,495 | 6,043 | 6,232 | 16,885 | ||||||||||||||
Other real estate owned, net | 894 | (226 | ) | 1,497 | 2,682 | 1,635 | |||||||||||||
Merger-related expenses | 4,109 | — | — | 9,002 | — | ||||||||||||||
Charge for asset write-downs, systems integration, retention and severance | — | 13,132 | — | 603 | 13,132 | ||||||||||||||
Other | 8,347 | 13,231 | 13,173 | 25,076 | 39,680 | ||||||||||||||
Total non-interest expense | 62,617 | 124,928 | 111,773 | 182,624 | 348,448 | ||||||||||||||
Income before income tax expense | 66,444 | 146,156 | 146,821 | 185,939 | 421,305 | ||||||||||||||
Income tax expense | 21,592 | 31,915 | 27,171 | 59,620 | 88,542 | ||||||||||||||
Net income | 44,852 | 114,241 | 119,650 | 126,319 | 332,763 | ||||||||||||||
Preferred stock dividend | — | 1,996 | 1,993 | — | 5,988 | ||||||||||||||
Net income available to common stockholders | $ | 44,852 | $ | 112,245 | $ | 117,657 | $ | 126,319 | $ | 326,775 | |||||||||
Weighted average common shares: | |||||||||||||||||||
Basic | 135,346,791 | 225,084,232 | 225,088,511 | 135,276,634 | 224,969,121 | ||||||||||||||
Diluted | 135,950,160 | 225,621,856 | 225,622,895 | 135,895,513 | 225,504,463 | ||||||||||||||
Earnings per common share: | |||||||||||||||||||
Basic earnings per share | $ | 0.33 | $ | 0.50 | $ | 0.52 | $ | 0.93 | $ | 1.45 | |||||||||
Diluted earnings per share | 0.33 | 0.50 | 0.52 | 0.93 | 1.45 | ||||||||||||||
Dividends declared per share | 0.07 | 0.07 | 0.07 | 0.21 | 0.21 |
As of and for the Quarter Ended | |||||||||||||||||||
End of Period | 9/30/2017 | 12/31/2017 | 3/31/2018 | 6/30/2018 | 9/30/2018 | ||||||||||||||
Total assets | $ | 16,780,097 | $ | 30,359,541 | $ | 30,468,780 | $ | 31,463,077 | $ | 31,261,265 | |||||||||
Tangible assets 1 | 16,023,807 | 28,626,459 | 28,741,750 | 29,708,659 | 29,516,084 | ||||||||||||||
Securities available for sale | 2,579,076 | 3,612,072 | 3,760,338 | 3,929,386 | 3,843,244 | ||||||||||||||
Securities held to maturity | 1,936,574 | 2,862,489 | 2,874,948 | 2,859,860 | 2,842,728 | ||||||||||||||
Portfolio loans | 10,493,535 | 20,008,983 | 19,939,245 | 20,674,493 | 20,533,214 | ||||||||||||||
Goodwill | 696,600 | 1,579,891 | 1,579,891 | 1,613,144 | 1,609,772 | ||||||||||||||
Other intangibles | 59,690 | 153,191 | 147,139 | 141,274 | 135,409 | ||||||||||||||
Deposits | 11,043,438 | 20,538,204 | 20,623,233 | 20,965,889 | 21,456,057 | ||||||||||||||
Municipal deposits (included above) | 1,751,012 | 1,585,076 | 1,775,472 | 1,652,733 | 2,019,893 | ||||||||||||||
Borrowings | 3,453,783 | 4,991,210 | 4,927,594 | 5,537,537 | 4,825,855 | ||||||||||||||
Stockholders’ equity | 1,971,480 | 4,240,178 | 4,273,755 | 4,352,735 | 4,438,303 | ||||||||||||||
Tangible common equity 1 | 1,215,190 | 2,367,876 | 2,407,700 | 2,459,489 | 2,554,495 | ||||||||||||||
Quarterly Average Balances | |||||||||||||||||||
Total assets | 15,661,514 | 29,277,502 | 30,018,289 | 30,994,904 | 31,036,026 | ||||||||||||||
Tangible assets 1 | 14,904,016 | 27,567,351 | 28,287,337 | 29,237,608 | 29,283,093 | ||||||||||||||
Loans, gross: | |||||||||||||||||||
Commercial real estate (includes multi-family) | 4,443,142 | 8,839,256 | 9,028,849 | 9,100,098 | 9,170,117 | ||||||||||||||
Acquisition, development and construction | 229,242 | 246,141 | 267,638 | 247,500 | 252,710 | ||||||||||||||
Commercial and industrial: | |||||||||||||||||||
Traditional commercial and industrial | 1,631,436 | 1,911,450 | 1,933,323 | 2,026,313 | 2,037,195 | ||||||||||||||
Asset-based lending2 | 740,037 | 781,732 | 781,392 | 778,708 | 820,060 | ||||||||||||||
Payroll finance2 | 229,522 | 250,673 | 229,920 | 219,545 | 223,636 | ||||||||||||||
Warehouse lending2 | 607,994 | 564,593 | 495,133 | 731,385 | 857,280 | ||||||||||||||
Factored receivables2 | 191,749 | 224,966 | 217,865 | 224,159 | 220,808 | ||||||||||||||
Equipment financing2 | 687,254 | 677,271 | 689,493 | 1,140,803 | 1,158,945 | ||||||||||||||
Public sector finance2 | 476,525 | 480,800 | 653,344 | 725,675 | 784,260 | ||||||||||||||
Total commercial and industrial | 4,564,517 | 4,891,485 | 5,000,470 | 5,846,588 | 6,102,184 | ||||||||||||||
Residential mortgage | 686,820 | 5,168,622 | 4,977,191 | 4,801,595 | 4,531,922 | ||||||||||||||
Consumer | 262,693 | 372,981 | 361,752 | 344,183 | 330,061 | ||||||||||||||
Loans, total3 | 10,186,414 | 19,518,485 | 19,635,900 | 20,339,964 | 20,386,994 | ||||||||||||||
Securities (taxable) | 2,483,718 | 3,840,147 | 3,997,542 | 4,130,949 | 4,193,910 | ||||||||||||||
Securities (non-taxable) | 1,432,358 | 2,086,677 | 2,604,633 | 2,620,579 | 2,580,802 | ||||||||||||||
Other interest earning assets | 368,630 | 598,439 | 595,847 | 665,888 | 638,227 | ||||||||||||||
Total earning assets | 14,471,120 | 26,043,748 | 26,833,922 | 27,757,380 | 27,799,933 | ||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing demand | 3,042,392 | 4,043,213 | 3,971,079 | 3,960,683 | 4,174,908 | ||||||||||||||
Interest bearing demand | 2,298,645 | 3,862,461 | 3,941,749 | 4,024,972 | 4,286,278 | ||||||||||||||
Savings (including mortgage escrow funds) | 825,620 | 2,871,885 | 2,917,624 | 2,916,755 | 2,678,662 | ||||||||||||||
Money market | 3,889,780 | 7,324,196 | 7,393,335 | 7,337,904 | 7,404,208 | ||||||||||||||
Certificates of deposit | 634,569 | 2,382,102 | 2,464,360 | 2,528,355 | 2,571,298 | ||||||||||||||
Total deposits and mortgage escrow | 10,691,006 | 20,483,857 | 20,688,147 | 20,768,669 | 21,115,354 | ||||||||||||||
Borrowings | 2,779,143 | 4,121,605 | 4,597,903 | 5,432,582 | 5,052,752 | ||||||||||||||
Stockholders’ equity | 1,955,252 | 4,235,739 | 4,243,897 | 4,305,928 | 4,397,823 | ||||||||||||||
Tangible common equity 1 | 1,197,754 | 2,386,245 | 2,373,794 | 2,409,674 | 2,506,198 | ||||||||||||||
1 See a reconciliation of non-GAAP financial measures beginning on page 18. | |||||||||||||||||||
2 Asset-based lending, payroll finance, warehouse lending, factored receivables, equipment finance and public sector finance comprise our commercial finance loan portfolio. | |||||||||||||||||||
3 Includes loans held for sale, but excludes allowance for loan losses. |
As of and for the Quarter Ended | |||||||||||||||||||
Per Common Share Data | 9/30/2017 | 12/31/2017 | 3/31/2018 | 6/30/2018 | 9/30/2018 | ||||||||||||||
Basic earnings (loss) per share | $ | 0.33 | $ | (0.16 | ) | $ | 0.43 | $ | 0.50 | $ | 0.52 | ||||||||
Diluted earnings (loss) per share | 0.33 | (0.16 | ) | 0.43 | 0.50 | 0.52 | |||||||||||||
Adjusted diluted earnings per share, non-GAAP 1 | 0.35 | 0.39 | 0.45 | 0.50 | 0.51 | ||||||||||||||
Dividends declared per common share | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 | ||||||||||||||
Book value per share | 14.52 | 18.24 | 18.34 | 18.69 | 19.07 | ||||||||||||||
Tangible book value per share1 | 8.95 | 10.53 | 10.68 | 10.91 | 11.33 | ||||||||||||||
Shares of common stock o/s | 135,807,544 | 224,782,694 | 225,466,266 | 225,470,254 | 225,446,089 | ||||||||||||||
Basic weighted average common shares o/s | 135,346,791 | 223,501,073 | 224,730,686 | 225,084,232 | 225,088,511 | ||||||||||||||
Diluted weighted average common shares o/s | 135,950,160 | 224,055,991 | 225,264,147 | 225,621,856 | 225,622,895 | ||||||||||||||
Performance Ratios (annualized) | |||||||||||||||||||
Return on average assets | 1.14 | % | (0.48 | )% | 1.31 | % | 1.45 | % | 1.50 | % | |||||||||
Return on average equity | 9.10 | (3.30 | ) | 9.26 | 10.46 | 10.61 | |||||||||||||
Return on average tangible assets | 1.19 | (0.51 | ) | 1.39 | 1.54 | 1.59 | |||||||||||||
Return on average tangible common equity | 14.86 | (5.87 | ) | 16.55 | 18.68 | 18.63 | |||||||||||||
Return on average tangible assets, adjusted 1 | 1.27 | 1.25 | 1.45 | 1.55 | 1.55 | ||||||||||||||
Return on avg. tangible common equity, adjusted 1 | 15.85 | 14.49 | 17.24 | 18.79 | 18.09 | ||||||||||||||
Operating efficiency ratio, as adjusted 1 | 40.6 | 41.4 | 40.3 | 38.3 | 38.9 | ||||||||||||||
Analysis of Net Interest Income | |||||||||||||||||||
Accretion income on acquired loans | $ | 3,397 | $ | 33,726 | $ | 30,340 | $ | 28,010 | $ | 26,574 | |||||||||
Yield on loans | 4.67 | % | 4.77 | % | 4.85 | % | 5.01 | % | 5.01 | % | |||||||||
Yield on investment securities - tax equivalent 2 | 2.87 | 3.03 | 2.85 | 2.88 | 2.87 | ||||||||||||||
Yield on interest earning assets - tax equivalent 2 | 4.12 | 4.32 | 4.31 | 4.47 | 4.47 | ||||||||||||||
Cost of interest bearing deposits | 0.69 | 0.54 | 0.59 | 0.68 | 0.84 | ||||||||||||||
Cost of total deposits | 0.50 | 0.43 | 0.47 | 0.55 | 0.68 | ||||||||||||||
Cost of borrowings | 1.75 | 1.94 | 2.01 | 2.23 | 2.29 | ||||||||||||||
Cost of interest bearing liabilities | 0.97 | 0.82 | 0.89 | 1.06 | 1.17 | ||||||||||||||
Net interest rate spread - tax equivalent basis 2 | 3.15 | 3.50 | 3.42 | 3.41 | 3.30 | ||||||||||||||
Net interest margin - GAAP basis | 3.29 | 3.57 | 3.54 | 3.56 | 3.48 | ||||||||||||||
Net interest margin - tax equivalent basis 2 | 3.42 | 3.67 | 3.60 | 3.62 | 3.54 | ||||||||||||||
Capital | |||||||||||||||||||
Tier 1 leverage ratio - Company 3 | 8.42 | % | 9.39 | % | 9.39 | % | 9.32 | % | 9.68 | % | |||||||||
Tier 1 leverage ratio - Bank only 3 | 8.54 | 10.10 | 10.00 | 9.84 | 10.10 | ||||||||||||||
Tier 1 risk-based capital ratio - Bank only 3 | 10.42 | 12.10 | 14.23 | 13.71 | 14.04 | ||||||||||||||
Total risk-based capital ratio - Bank only 3 | 12.42 | 13.20 | 15.51 | 14.94 | 15.30 | ||||||||||||||
Tangible equity to tangible assets - Company 1 | 7.58 | 8.27 | 8.38 | 8.28 | 8.65 | ||||||||||||||
Condensed Five Quarter Income Statement | |||||||||||||||||||
Interest and dividend income | $ | 145,692 | $ | 276,495 | $ | 281,346 | $ | 304,906 | $ | 309,025 | |||||||||
Interest expense | 25,619 | 42,471 | 46,976 | 58,690 | 65,076 | ||||||||||||||
Net interest income | 120,073 | 234,024 | 234,370 | 246,216 | 243,949 | ||||||||||||||
Provision for loan losses | 5,000 | 12,000 | 13,000 | 13,000 | 9,500 | ||||||||||||||
Net interest income after provision for loan losses | 115,073 | 222,024 | 221,370 | 233,216 | 234,449 | ||||||||||||||
Non-interest income | 13,988 | 23,762 | 18,707 | 37,868 | 24,145 | ||||||||||||||
Non-interest expense | 62,617 | 250,746 | 111,749 | 124,928 | 111,773 | ||||||||||||||
Income (loss) before income tax expense | 66,444 | (4,960 | ) | 128,328 | 146,156 | 146,821 | |||||||||||||
Income tax expense | 21,592 | 28,319 | 29,456 | 31,915 | 27,171 | ||||||||||||||
Net income (loss) | $ | 44,852 | $ | (33,279 | ) | $ | 98,872 | $ | 114,241 | $ | 119,650 | ||||||||
1 See a reconciliation of non-GAAP financial measures beginning on page 18. | |||||||||||||||||||
2 Tax equivalent basis represents interest income earned on tax exempt securities divided by the applicable Federal tax rate of 35% in 2017 and 21% in 2018. | |||||||||||||||||||
3 Regulatory capital amounts and ratios are preliminary estimates pending filing of the Company’s and Bank’s regulatory reports. |
As of and for the Quarter Ended | |||||||||||||||||||
Allowance for Loan Losses Roll Forward | 9/30/2017 | 12/31/2017 | 3/31/2018 | 6/30/2018 | 9/30/2018 | ||||||||||||||
Balance, beginning of period | $ | 70,151 | $ | 72,128 | $ | 77,907 | $ | 82,092 | $ | 86,026 | |||||||||
Provision for loan losses | 5,000 | 12,000 | 13,000 | 13,000 | 9,500 | ||||||||||||||
Loan charge-offs1: | |||||||||||||||||||
Traditional commercial & industrial | (68 | ) | (4,570 | ) | (3,572 | ) | (1,831 | ) | (3,415 | ) | |||||||||
Payroll finance | (188 | ) | — | — | (314 | ) | (2 | ) | |||||||||||
Factored receivables | (564 | ) | (110 | ) | (3 | ) | (160 | ) | (18 | ) | |||||||||
Equipment financing | (741 | ) | (1,343 | ) | (4,199 | ) | (2,477 | ) | (829 | ) | |||||||||
Commercial real estate | (1,345 | ) | (7 | ) | (1,353 | ) | (3,166 | ) | (359 | ) | |||||||||
Multi-family | — | — | — | — | (168 | ) | |||||||||||||
Acquisition development & construction | (5 | ) | — | — | (721 | ) | — | ||||||||||||
Residential mortgage | (389 | ) | (193 | ) | (39 | ) | (544 | ) | (114 | ) | |||||||||
Consumer | (156 | ) | (408 | ) | (125 | ) | (491 | ) | (458 | ) | |||||||||
Total charge offs | (3,456 | ) | (6,631 | ) | (9,291 | ) | (9,704 | ) | (5,363 | ) | |||||||||
Recoveries of loans previously charged-off1: | |||||||||||||||||||
Traditional commercial & industrial | 316 | 164 | 214 | 225 | 235 | ||||||||||||||
Asset-based lending | 1 | — | — | 9 | — | ||||||||||||||
Payroll finance | 1 | 5 | 22 | 7 | 5 | ||||||||||||||
Factored receivables | 5 | — | 3 | 2 | 2 | ||||||||||||||
Equipment financing | 45 | 56 | 72 | 190 | 85 | ||||||||||||||
Commercial real estate | 17 | 46 | 16 | 74 | 612 | ||||||||||||||
Multi-family | — | — | 3 | — | 4 | ||||||||||||||
Residential mortgage | — | 2 | 15 | 34 | 5 | ||||||||||||||
Consumer | 48 | 137 | 131 | 97 | 254 | ||||||||||||||
Total recoveries | 433 | 410 | 476 | 638 | 1,202 | ||||||||||||||
Net loan charge-offs | (3,023 | ) | (6,221 | ) | (8,815 | ) | (9,066 | ) | (4,161 | ) | |||||||||
Balance, end of period | $ | 72,128 | $ | 77,907 | $ | 82,092 | $ | 86,026 | $ | 91,365 | |||||||||
Asset Quality Data and Ratios | |||||||||||||||||||
Non-performing loans (“NPLs”) non-accrual | $ | 69,060 | $ | 186,357 | $ | 181,745 | $ | 178,626 | $ | 177,876 | |||||||||
NPLs still accruing | 392 | 856 | 301 | 12,349 | 7,346 | ||||||||||||||
Total NPLs | 69,452 | 187,213 | 182,046 | 190,975 | 185,222 | ||||||||||||||
Other real estate owned | 11,697 | 27,095 | 24,493 | 20,264 | 22,735 | ||||||||||||||
Non-performing assets (“NPAs”) | $ | 81,149 | $ | 214,308 | $ | 206,539 | $ | 211,239 | $ | 207,957 | |||||||||
Loans 30 to 89 days past due | $ | 21,491 | $ | 53,533 | $ | 59,818 | $ | 73,441 | $ | 50,084 | |||||||||
Net charge-offs as a % of average loans (annualized) | 0.12 | % | 0.13 | % | 0.18 | % | 0.18 | % | 0.08 | % | |||||||||
NPLs as a % of total loans | 0.66 | 0.94 | 0.91 | 0.92 | 0.90 | ||||||||||||||
NPAs as a % of total assets | 0.48 | 0.71 | 0.68 | 0.67 | 0.67 | ||||||||||||||
Allowance for loan losses as a % of NPLs | 103.9 | 41.6 | 45.1 | 45.0 | 49.3 | ||||||||||||||
Allowance for loan losses as a % of total loans | 0.69 | 0.39 | 0.41 | 0.42 | 0.44 | ||||||||||||||
Special mention loans | $ | 117,984 | $ | 136,558 | $ | 101,904 | $ | 119,718 | $ | 88,472 | |||||||||
Substandard loans | 104,205 | 232,491 | 245,910 | 251,840 | 280,358 | ||||||||||||||
Doubtful loans | 795 | 764 | 968 | 856 | 2,219 | ||||||||||||||
1 There were no charge-offs or recoveries on warehouse lending or public sector finance loans during the periods presented. There were no charge-offs of asset-based lending loans during the periods presented. There were no acquisition development and construction recoveries during the periods presented. | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||
June 30, 2018 | September 30, 2018 | ||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Traditional C&I and commercial finance loans | $ | 5,846,588 | $ | 78,004 | 5.35 | % | $ | 6,102,184 | $ | 81,296 | 5.29 | % | |||||||||
Commercial real estate (includes multi-family) | 9,100,098 | 107,930 | 4.76 | 9,170,117 | 107,292 | 4.64 | |||||||||||||||
Acquisition, development and construction | 247,500 | 3,430 | 5.56 | 252,710 | 4,115 | 6.46 | |||||||||||||||
Commercial loans | 15,194,186 | 189,364 | 5.00 | 15,525,011 | 192,703 | 4.92 | |||||||||||||||
Consumer loans | 344,183 | 5,114 | 5.96 | 330,061 | 4,651 | 5.59 | |||||||||||||||
Residential mortgage loans | 4,801,595 | 59,775 | 4.98 | 4,531,922 | 59,857 | 5.28 | |||||||||||||||
Total gross loans 1 | 20,339,964 | 254,253 | 5.01 | 20,386,994 | 257,211 | 5.01 | |||||||||||||||
Securities taxable | 4,130,949 | 29,031 | 2.82 | 4,193,910 | 29,765 | 2.82 | |||||||||||||||
Securities non-taxable | 2,620,579 | 19,497 | 2.98 | 2,580,802 | 19,296 | 2.99 | |||||||||||||||
Interest earning deposits | 292,862 | 784 | 1.07 | 278,450 | 1,038 | 1.48 | |||||||||||||||
FHLB and Federal Reserve Bank Stock | 373,026 | 5,435 | 5.84 | 359,777 | 5,767 | 6.36 | |||||||||||||||
Total securities and other earning assets | 7,417,416 | 54,747 | 2.96 | 7,412,939 | 55,866 | 2.99 | |||||||||||||||
Total interest earning assets | 27,757,380 | 309,000 | 4.47 | 27,799,933 | 313,077 | 4.47 | |||||||||||||||
Non-interest earning assets | 3,237,524 | 3,236,093 | |||||||||||||||||||
Total assets | $ | 30,994,904 | $ | 31,036,026 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Demand and savings 2 deposits | $ | 6,941,727 | $ | 8,400 | 0.49 | % | $ | 6,964,940 | $ | 11,368 | 0.65 | % | |||||||||
Money market deposits | 7,337,904 | 12,869 | 0.70 | 7,404,208 | 16,547 | 0.89 | |||||||||||||||
Certificates of deposit | 2,528,355 | 7,195 | 1.14 | 2,571,298 | 8,059 | 1.24 | |||||||||||||||
Total interest bearing deposits | 16,807,986 | 28,464 | 0.68 | 16,940,446 | 35,974 | 0.84 | |||||||||||||||
Senior notes | 278,128 | 2,787 | 4.01 | 201,894 | 1,619 | 3.21 | |||||||||||||||
Other borrowings | 4,981,663 | 25,086 | 2.02 | 4,678,011 | 25,129 | 2.13 | |||||||||||||||
Subordinated notes | 172,791 | 2,353 | 5.45 | 172,847 | 2,354 | 5.45 | |||||||||||||||
Total borrowings | 5,432,582 | 30,226 | 2.23 | 5,052,752 | 29,102 | 2.29 | |||||||||||||||
Total interest bearing liabilities | 22,240,568 | 58,690 | 1.06 | 21,993,198 | 65,076 | 1.17 | |||||||||||||||
Non-interest bearing deposits | 3,960,683 | 4,174,908 | |||||||||||||||||||
Other non-interest bearing liabilities | 487,725 | 470,097 | |||||||||||||||||||
Total liabilities | 26,688,976 | 26,638,203 | |||||||||||||||||||
Stockholders’ equity | 4,305,928 | 4,397,823 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 30,994,904 | $ | 31,036,026 | |||||||||||||||||
Net interest rate spread 3 | 3.41 | % | 3.30 | % | |||||||||||||||||
Net interest earning assets 4 | $ | 5,516,812 | $ | 5,806,735 | |||||||||||||||||
Net interest margin - tax equivalent | 250,310 | 3.62 | % | 248,001 | 3.54 | % | |||||||||||||||
Less tax equivalent adjustment | (4,094 | ) | (4,052 | ) | |||||||||||||||||
Net interest income | $ | 246,216 | $ | 243,949 | |||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 124.8 | % | 126.4 | % |
For the Quarter Ended | |||||||||||||||||||||
September 30, 2017 | September 30, 2018 | ||||||||||||||||||||
Average balance | Interest | Yield/Rate | Average balance | Interest | Yield/Rate | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Traditional C&I and commercial finance loans | $ | 4,564,517 | $ | 58,395 | 5.08 | % | $ | 6,102,184 | $ | 81,296 | 5.29 | % | |||||||||
Commercial real estate (includes multi-family) | 4,443,142 | 47,336 | 4.23 | 9,170,117 | 107,292 | 4.64 | |||||||||||||||
Acquisition, development and construction | 229,242 | 4,197 | 7.26 | 252,710 | 4,115 | 6.46 | |||||||||||||||
Commercial loans | 9,236,901 | 109,928 | 4.72 | 15,525,011 | 192,703 | 4.92 | |||||||||||||||
Consumer loans | 262,693 | 2,891 | 4.37 | 330,061 | 4,651 | 5.59 | |||||||||||||||
Residential mortgage loans | 686,820 | 7,079 | 4.12 | 4,531,922 | 59,857 | 5.28 | |||||||||||||||
Total gross loans 1 | 10,186,414 | 119,898 | 4.67 | 20,386,994 | 257,211 | 5.01 | |||||||||||||||
Securities taxable | 2,483,718 | 15,141 | 2.42 | 4,193,910 | 29,765 | 2.82 | |||||||||||||||
Securities non-taxable | 1,432,358 | 13,141 | 3.67 | 2,580,802 | 19,296 | 2.99 | |||||||||||||||
Interest earning deposits | 202,650 | 462 | 0.90 | 278,450 | 1,038 | 1.48 | |||||||||||||||
FHLB and Federal Reserve Bank stock | 165,980 | 1,649 | 3.94 | 359,777 | 5,767 | 6.36 | |||||||||||||||
Total securities and other earning assets | 4,284,706 | 30,393 | 2.81 | 7,412,939 | 55,866 | 2.99 | |||||||||||||||
Total interest earning assets | 14,471,120 | 150,291 | 4.12 | 27,799,933 | 313,077 | 4.47 | |||||||||||||||
Non-interest earning assets | 1,190,394 | 3,236,093 | |||||||||||||||||||
Total assets | $ | 15,661,514 | $ | 31,036,026 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Demand and savings 2 deposits | $ | 3,124,265 | $ | 4,626 | 0.59 | $ | 6,964,940 | $ | 11,368 | 0.65 | |||||||||||
Money market deposits | 3,889,780 | 6,897 | 0.70 | 7,404,208 | 16,547 | 0.89 | |||||||||||||||
Certificates of deposit | 634,569 | 1,869 | 1.17 | 2,571,298 | 8,059 | 1.24 | |||||||||||||||
Total interest bearing deposits | 7,648,614 | 13,392 | 0.69 | 16,940,446 | 35,974 | 0.84 | |||||||||||||||
Senior notes | 76,664 | 1,143 | 5.92 | 201,894 | 1,619 | 3.21 | |||||||||||||||
Other borrowings | 2,529,854 | 8,733 | 1.37 | 4,678,011 | 25,129 | 2.13 | |||||||||||||||
Subordinated notes | 172,625 | 2,351 | 5.45 | 172,847 | 2,354 | 5.45 | |||||||||||||||
Total borrowings | 2,779,143 | 12,227 | 1.75 | 5,052,752 | 29,102 | 2.29 | |||||||||||||||
Total interest bearing liabilities | 10,427,757 | 25,619 | 0.97 | 21,993,198 | 65,076 | 1.17 | |||||||||||||||
Non-interest bearing deposits | 3,042,392 | 4,174,908 | |||||||||||||||||||
Other non-interest bearing liabilities | 236,113 | 470,097 | |||||||||||||||||||
Total liabilities | 13,706,262 | 26,638,203 | |||||||||||||||||||
Stockholders’ equity | 1,955,252 | 4,397,823 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 15,661,514 | $ | 31,036,026 | |||||||||||||||||
Net interest rate spread 3 | 3.15 | % | 3.30 | % | |||||||||||||||||
Net interest earning assets 4 | $ | 4,043,363 | $ | 5,806,735 | |||||||||||||||||
Net interest margin - tax equivalent | 124,672 | 3.42 | % | 248,001 | 3.54 | % | |||||||||||||||
Less tax equivalent adjustment | (4,599 | ) | (4,052 | ) | |||||||||||||||||
Net interest income | $ | 120,073 | $ | 243,949 | |||||||||||||||||
Ratio of interest earning assets to interest bearing liabilities | 138.8 | % | 126.4 | % |
The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 21. | |||||||||||||||||||
As of or for the Quarter Ended | |||||||||||||||||||
9/30/2017 | 12/31/2017 | 3/31/2018 | 6/30/2018 | 9/30/2018 | |||||||||||||||
The following table shows the reconciliation of stockholders’ equity to tangible common equity and the tangible common equity ratio1: | |||||||||||||||||||
Total assets | $ | 16,780,097 | $ | 30,359,541 | $ | 30,468,780 | $ | 31,463,077 | $ | 31,261,265 | |||||||||
Goodwill and other intangibles | (756,290 | ) | (1,733,082 | ) | (1,727,030 | ) | (1,754,418 | ) | (1,745,181 | ) | |||||||||
Tangible assets | 16,023,807 | 28,626,459 | 28,741,750 | 29,708,659 | 29,516,084 | ||||||||||||||
Stockholders’ equity | 1,971,480 | 4,240,178 | 4,273,755 | 4,352,735 | 4,438,303 | ||||||||||||||
Preferred stock | — | (139,220 | ) | (139,025 | ) | (138,828 | ) | (138,627 | ) | ||||||||||
Goodwill and other intangibles | (756,290 | ) | (1,733,082 | ) | (1,727,030 | ) | (1,754,418 | ) | (1,745,181 | ) | |||||||||
Tangible common stockholders’ equity | 1,215,190 | 2,367,876 | 2,407,700 | 2,459,489 | 2,554,495 | ||||||||||||||
Common stock outstanding at period end | 135,807,544 | 224,782,694 | 225,466,266 | 225,470,254 | 225,446,089 | ||||||||||||||
Common stockholders’ equity as a % of total assets | 11.75 | % | 13.51 | % | 13.57 | % | 13.39 | % | 13.75 | % | |||||||||
Book value per common share | $ | 14.52 | $ | 18.24 | $ | 18.34 | $ | 18.69 | $ | 19.07 | |||||||||
Tangible common equity as a % of tangible assets | 7.58 | % | 8.27 | % | 8.38 | % | 8.28 | % | 8.65 | % | |||||||||
Tangible book value per common share | $ | 8.95 | $ | 10.53 | $ | 10.68 | $ | 10.91 | $ | 11.33 | |||||||||
The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity2: | |||||||||||||||||||
Average stockholders’ equity | $ | 1,955,252 | $ | 4,235,739 | $ | 4,243,897 | $ | 4,305,928 | $ | 4,397,823 | |||||||||
Average preferred stock | — | (139,343 | ) | (139,151 | ) | (138,958 | ) | (138,692 | ) | ||||||||||
Average goodwill and other intangibles | (757,498 | ) | (1,710,151 | ) | (1,730,952 | ) | (1,757,296 | ) | (1,752,933 | ) | |||||||||
Average tangible common stockholders’ equity | 1,197,754 | 2,386,245 | 2,373,794 | 2,409,674 | 2,506,198 | ||||||||||||||
Net income (loss) available to common | 44,852 | (35,281 | ) | 96,873 | 112,245 | 117,657 | |||||||||||||
Net income (loss), if annualized | 177,945 | (139,974 | ) | 392,874 | 450,213 | 466,791 | |||||||||||||
Reported return on avg tangible common equity | 14.86 | % | (5.87 | )% | 16.55 | % | 18.68 | % | 18.63 | % | |||||||||
Adjusted net income (see reconciliation on page 19) | $ | 47,865 | $ | 87,171 | $ | 100,880 | $ | 112,868 | $ | 114,273 | |||||||||
Annualized adjusted net income | 189,899 | 345,841 | 409,124 | 452,712 | 453,366 | ||||||||||||||
Adjusted return on average tangible common equity | 15.85 | % | 14.49 | % | 17.24 | % | 18.79 | % | 18.09 | % | |||||||||
The following table shows the reconciliation of reported return on average tangible assets and adjusted return on average tangible assets3: | |||||||||||||||||||
Average assets | $ | 15,661,514 | $ | 29,277,502 | $ | 30,018,289 | $ | 30,994,904 | $ | 31,036,026 | |||||||||
Average goodwill and other intangibles | (757,498 | ) | (1,710,151 | ) | (1,730,952 | ) | (1,757,296 | ) | (1,752,933 | ) | |||||||||
Average tangible assets | 14,904,016 | 27,567,351 | 28,287,337 | 29,237,608 | 29,283,093 | ||||||||||||||
Net income (loss) available to common | 44,852 | (35,281 | ) | 96,873 | 112,245 | 117,657 | |||||||||||||
Net income (loss), if annualized | 177,945 | (139,974 | ) | 392,874 | 450,213 | 466,791 | |||||||||||||
Reported return on average tangible assets | 1.19 | % | (0.51 | )% | 1.39 | % | 1.54 | % | 1.59 | % | |||||||||
Adjusted net income (see reconciliation on page 19) | $ | 47,865 | $ | 87,171 | $ | 100,880 | $ | 112,868 | $ | 114,273 | |||||||||
Annualized adjusted net income | 189,899 | 345,841 | 409,124 | 452,712 | 453,366 | ||||||||||||||
Adjusted return on average tangible assets | 1.27 | % | 1.25 | % | 1.45 | % | 1.55 | % | 1.55 | % | |||||||||
The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 21. | ||||||||||||||||||||
As of and for the Quarter Ended | ||||||||||||||||||||
9/30/2017 | 12/31/2017 | 3/31/2018 | 6/30/2018 | 9/30/2018 | ||||||||||||||||
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio4: | ||||||||||||||||||||
Net interest income | $ | 120,073 | $ | 234,024 | $ | 234,370 | $ | 246,216 | $ | 243,949 | ||||||||||
Non-interest income | 13,988 | 23,762 | 18,707 | 37,868 | 24,145 | |||||||||||||||
Total net revenue | 134,061 | 257,786 | 253,077 | 284,084 | 268,094 | |||||||||||||||
Tax equivalent adjustment on securities | 4,599 | 7,158 | 4,070 | 4,094 | 4,052 | |||||||||||||||
Net loss on sale of securities | 21 | 70 | 5,421 | 425 | 56 | |||||||||||||||
Net (gain) on sale of Lake Success facility | — | — | — | (11,797 | ) | — | ||||||||||||||
Adjusted total net revenue | 138,681 | 265,014 | 262,568 | 276,806 | 272,202 | |||||||||||||||
Non-interest expense | 62,617 | 250,746 | 111,749 | 124,928 | 111,773 | |||||||||||||||
Merger-related expense | (4,109 | ) | (30,230 | ) | — | — | — | |||||||||||||
Charge for asset write-downs, systems integration, retention and severance | — | (104,506 | ) | — | (13,132 | ) | — | |||||||||||||
Amortization of intangible assets | (2,166 | ) | (6,426 | ) | (6,052 | ) | (5,865 | ) | (5,865 | ) | ||||||||||
Adjusted non-interest expense | 56,342 | 109,584 | 105,697 | 105,931 | 105,908 | |||||||||||||||
Reported operating efficiency ratio | 46.7 | % | 97.3 | % | 44.2 | % | 44.0 | % | 41.7 | % | ||||||||||
Adjusted operating efficiency ratio | 40.6 | 41.4 | 40.3 | 38.3 | 38.9 | |||||||||||||||
The following table shows the reconciliation of reported net income (GAAP) and adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share5: | ||||||||||||||||||||
Income (loss) before income tax expense | $ | 66,444 | $ | (4,960 | ) | $ | 128,328 | $ | 146,156 | $ | 146,821 | |||||||||
Income tax expense | 21,592 | 28,319 | 29,456 | 31,915 | 27,171 | |||||||||||||||
Net income (loss) (GAAP) | 44,852 | (33,279 | ) | 98,872 | 114,241 | 119,650 | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Net loss on sale of securities | 21 | 70 | 5,421 | 425 | 56 | |||||||||||||||
Net (gain) on sale of Lake Success facility | — | — | — | (11,797 | ) | — | ||||||||||||||
Merger-related expense | 4,109 | 30,230 | — | — | — | |||||||||||||||
Charge for asset write-downs, systems integration, retention and severance | — | 104,506 | — | 13,132 | — | |||||||||||||||
Amortization of non-compete agreements and acquired customer list intangible assets | 333 | 333 | 295 | 295 | 295 | |||||||||||||||
Total pre-tax adjustments | 4,463 | 135,139 | 5,716 | 2,055 | 351 | |||||||||||||||
Adjusted pre-tax income | 70,907 | 130,179 | 134,044 | 148,211 | 147,172 | |||||||||||||||
Adjusted income tax expense | (23,042 | ) | (41,006 | ) | (31,165 | ) | (33,347 | ) | (30,906 | ) | ||||||||||
Adjusted net income (non-GAAP) | 47,865 | 89,173 | 102,879 | 114,864 | 116,266 | |||||||||||||||
Preferred stock dividend | — | 2,002 | 1,999 | 1,996 | 1,993 | |||||||||||||||
Adjusted net income available to common stockholders (non-GAAP) | $ | 47,865 | $ | 87,171 | $ | 100,880 | $ | 112,868 | $ | 114,273 | ||||||||||
Weighted average diluted shares | 135,950,160 | 224,055,991 | 225,264,147 | 225,621,856 | 225,622,895 | |||||||||||||||
Reported diluted EPS (GAAP) | $ | 0.33 | $ | (0.16 | ) | $ | 0.43 | $ | 0.50 | $ | 0.52 | |||||||||
Adjusted diluted EPS (non-GAAP) | 0.35 | 0.39 | 0.45 | 0.50 | 0.51 |
The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend beginning on page 21. | ||||||||
For the Nine Months Ended September 30, | ||||||||
2017 | 2018 | |||||||
The following table shows the reconciliation of reported net income (GAAP) and earnings per share to adjusted net income available to common stockholders (non-GAAP) and adjusted diluted earnings per share (non-GAAP)5: | ||||||||
Income before income tax expense | $ | 185,939 | $ | 421,305 | ||||
Income tax expense | 59,620 | 88,542 | ||||||
Net income (GAAP) | 126,319 | 332,763 | ||||||
Adjustments: | ||||||||
Net loss on sale of securities | 274 | 5,902 | ||||||
Net (gain) on sale of fixed assets | (1 | ) | (11,800 | ) | ||||
Merger-related expense | 9,002 | — | ||||||
Charge for asset write-downs, systems integration, retention and severance | 603 | 13,132 | ||||||
Amortization of non-compete agreements and acquired customer list intangible assets | 1,080 | 883 | ||||||
Total pre-tax adjustments | 10,958 | 8,117 | ||||||
Adjusted pre-tax income | 196,897 | 429,422 | ||||||
Adjusted income tax expense | (63,181 | ) | (90,179 | ) | ||||
Adjusted net income (non-GAAP) | $ | 133,716 | $ | 339,243 | ||||
Preferred stock dividend | — | 5,988 | ||||||
Adjusted net income available to common stockholders (non-GAAP) | $ | 133,716 | $ | 333,255 | ||||
Weighted average diluted shares | 135,895,513 | 225,504,463 | ||||||
Diluted EPS as reported (GAAP) | $ | 0.93 | $ | 1.45 | ||||
Adjusted diluted EPS (non-GAAP) | 0.98 | 1.48 |
The Company provides supplemental reporting of non-GAAP/adjusted financial measures as management believes this information is useful to investors. See legend below. | ||||||||
For the Nine Months Ended September 30, | ||||||||
2017 | 2018 | |||||||
The following table shows the reconciliation of reported return on average tangible common equity and adjusted return on average tangible common equity2: | ||||||||
Average stockholders’ equity | $ | 1,913,072 | $ | 4,316,455 | ||||
Average preferred stock | — | (139,054 | ) | |||||
Average goodwill and other intangibles | (759,790 | ) | (1,747,141 | ) | ||||
Average tangible common stockholders’ equity | 1,153,282 | 2,430,260 | ||||||
Net income available to common stockholders | $ | 126,319 | $ | 326,775 | ||||
Net income available to common stockholders, if annualized | 168,888 | 436,897 | ||||||
Reported return on average tangible common equity | 14.64 | % | 17.98 | % | ||||
Adjusted net income available to common stockholders (see reconciliation on page #SectionPage#) | $ | 133,716 | $ | 333,255 | ||||
Adjusted net income available to common stockholders, if annualized | 178,778 | 445,561 | ||||||
Adjusted return on average tangible common equity | 15.50 | % | 18.33 | % | ||||
The following table shows the reconciliation of reported return on avg tangible assets and adjusted return on avg tangible assets3: | ||||||||
Average assets | $ | 14,802,911 | $ | 30,686,808 | ||||
Average goodwill and other intangibles | (759,790 | ) | (1,747,141 | ) | ||||
Average tangible assets | 14,043,121 | 28,939,667 | ||||||
Net income available to common stockholders | 126,319 | 326,775 | ||||||
Net income available to common stockholders, if annualized | 168,888 | 436,897 | ||||||
Reported return on average tangible assets | 1.20 | % | 1.51 | % | ||||
Adjusted net income available to common stockholders (see reconciliation on page 20) | $ | 133,716 | $ | 333,255 | ||||
Adjusted net income available to common stockholders, if annualized | 178,778 | 445,561 | ||||||
Adjusted return on average tangible assets | 1.27 | % | 1.54 | % | ||||
The following table shows the reconciliation of the reported operating efficiency ratio and adjusted operating efficiency ratio4: | ||||||||
Net interest income | $ | 342,121 | $ | 724,533 | ||||
Non-interest income | 40,442 | 80,720 | ||||||
Total net revenues | 382,563 | 805,253 | ||||||
Tax equivalent adjustment on securities | 12,896 | 12,217 | ||||||
Net loss on sale of securities | 274 | 5,902 | ||||||
Net (gain) on sale of Lake Success facility | (1 | ) | (11,800 | ) | ||||
Adjusted total net revenue | 395,732 | 811,572 | ||||||
Non-interest expense | 182,624 | 348,448 | ||||||
Merger-related expense | (9,002 | ) | — | |||||
Charge for asset write-downs, retention and severance | (603 | ) | (13,132 | ) | ||||
Amortization of intangible assets | (6,582 | ) | (17,782 | ) | ||||
Adjusted non-interest expense | $ | 166,437 | $ | 317,534 | ||||
Reported operating efficiency ratio | 47.7 | % | 43.3 | % | ||||
Adjusted operating efficiency ratio | 42.1 | % | 39.1 | % |