UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
WASHINGTON TRUST BANCORP, INC. |
Rhode Island | 001-32991 | 05-0404671 | ||
(State or other jurisdiction of | (Commission File Number) | (IRS Employer Identification No.) | ||
incorporation) |
23 Broad Street | ||||
Westerly, Rhode Island | 02891 | |||
(Address of Principal Executive Offices) | (Zip Code) |
(401) 348-1200 |
(Registrant's telephone number, including area code) |
N/A |
(Former name or address, if changed from last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition |
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the |
Exchange Act. o |
(d) | Exhibits. | |||
Exhibit No. | Exhibit | |||
Press release dated April 20, 2018* | ||||
*Filed herewith |
WASHINGTON TRUST BANCORP, INC. | ||||
Date: | April 20, 2018 | By: | /s/ Ronald S. Ohsberg | |
Ronald S. Ohsberg | ||||
Senior Executive Vice President, Chief Financial Officer and Treasurer |
• | Returns on average equity and average assets were 15.96% and 1.45%, respectively. |
• | Net interest income amounted to an all-time quarterly high of $31.9 million. |
• | Consistent with improvement in asset quality metrics and changes in the loan portfolio and loss exposure, no loan loss provision was necessary in the quarter. |
• | In March, Washington Trust declared a quarterly dividend of 43 cents per share, representing a 4 cent per share, or 10%, increase over the preceding quarter. |
• | Average interest-earning assets increased by $66 million, reflecting additions to the securities portfolio and loan growth. The yield on interest-earning assets for the first quarter was 3.84%, up by 14 basis points from the preceding quarter. The yield benefited from increased market rates of interest. |
• | Average interest-bearing liabilities increased by $58 million, reflecting increases in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances). The cost of interest-bearing funds for the first quarter was 1.00%, up by 7 basis points from the preceding quarter, largely due to higher rates on wholesale funding liabilities. |
• | Wealth management revenues were $10.3 million for the first quarter of 2018, up by $359 thousand, or 4% on a linked quarter basis, largely due to an increase in asset-based revenues. |
• | Mortgage banking revenues were $2.8 million for the first quarter of 2018, down by $259 thousand, or 8%, from the preceding quarter. These results reflect a decrease in the volume of loans sold, partially offset by a $565 thousand increase in fair value adjustments on mortgage loan commitments and loans held for sale, as well as a higher sales yield. The increase in fair value adjustments was associated with the commencement of a portfolio-based economic hedging program. Prior to January 2018, Washington Trust economically hedged mortgage loan commitments only on a loan by loan basis. |
• | Loan related derivative income was $141 thousand for the first quarter of 2018, down by $329 thousand from the preceding quarter, due to a lower volume of commercial borrower loan related derivative transactions. |
• | In the fourth quarter of 2017, a reduction to noninterest expenses of $333 thousand was recognized resulting from a nontaxable downward adjustment in the fair value of a contingent consideration liability that was initially recorded upon the completion of a 2015 acquisition. |
• | In the fourth quarter of 2017, the receipt of a $325 thousand settlement of a claim against another bank related to a previously disclosed dispute was recognized as a reduction to other expenses. |
• | In the first quarter of 2018, software system implementation expenses of $681 thousand were recognized, an increase of $435 thousand from the amount recognized in the preceding quarter. These were classified as other expenses and primarily relate to the conversion of our wealth management accounting system, which was completed in April 2018. |
• | In the first quarter of 2018, as previously announced, one-time cash incentive bonuses of approximately $450 thousand were expensed and paid as part of Washington Trust's employee compensation enhancements that were made in response to the reduction in corporate taxes from the Tax Act. |
Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||
Assets: | |||||||||||||||
Cash and due from banks | $85,680 | $79,853 | $128,580 | $117,608 | $111,941 | ||||||||||
Short-term investments | 2,322 | 3,070 | 2,600 | 2,324 | 2,039 | ||||||||||
Mortgage loans held for sale | 19,269 | 26,943 | 28,484 | 32,784 | 25,414 | ||||||||||
Securities: | |||||||||||||||
Available for sale, at fair value | 787,842 | 780,954 | 714,355 | 749,486 | 754,720 | ||||||||||
Held to maturity, at amortized cost | 11,973 | 12,541 | 13,241 | 13,942 | 14,721 | ||||||||||
Total securities | 799,815 | 793,495 | 727,596 | 763,428 | 769,441 | ||||||||||
Federal Home Loan Bank stock, at cost | 41,127 | 40,517 | 42,173 | 44,640 | 43,714 | ||||||||||
Loans: | |||||||||||||||
Total loans | 3,387,406 | 3,374,071 | 3,323,078 | 3,200,100 | 3,224,860 | ||||||||||
Less allowance for loan losses | 25,864 | 26,488 | 27,308 | 26,662 | 26,446 | ||||||||||
Net loans | 3,361,542 | 3,347,583 | 3,295,770 | 3,173,438 | 3,198,414 | ||||||||||
Premises and equipment, net | 28,316 | 28,333 | 28,591 | 28,508 | 28,853 | ||||||||||
Investment in bank-owned life insurance | 73,782 | 73,267 | 72,729 | 72,183 | 71,642 | ||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,059 | ||||||||||
Identifiable intangible assets, net | 8,893 | 9,140 | 9,388 | 9,642 | 9,898 | ||||||||||
Other assets | 81,671 | 63,740 | 69,410 | 67,065 | 63,348 | ||||||||||
Total assets | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | $4,388,763 | ||||||||||
Liabilities: | |||||||||||||||
Deposits: | |||||||||||||||
Noninterest-bearing deposits | $601,478 | $578,410 | $575,866 | $533,147 | $534,792 | ||||||||||
Interest-bearing deposits | 2,654,956 | 2,664,297 | 2,581,215 | 2,488,042 | 2,580,779 | ||||||||||
Total deposits | 3,256,434 | 3,242,707 | 3,157,081 | 3,021,189 | 3,115,571 | ||||||||||
Federal Home Loan Bank advances | 808,677 | 791,356 | 814,045 | 869,733 | 798,741 | ||||||||||
Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||
Other liabilities | 65,453 | 59,822 | 61,195 | 55,884 | 53,985 | ||||||||||
Total liabilities | 4,153,245 | 4,116,566 | 4,055,002 | 3,969,487 | 3,990,978 | ||||||||||
Shareholders’ Equity: | |||||||||||||||
Common stock | 1,079 | 1,077 | 1,076 | 1,076 | 1,075 | ||||||||||
Paid-in capital | 118,172 | 117,961 | 117,189 | 116,484 | 116,200 | ||||||||||
Retained earnings | 326,505 | 317,756 | 312,334 | 306,151 | 299,555 | ||||||||||
Accumulated other comprehensive loss | (32,675 | ) | (23,510 | ) | (16,371 | ) | (17,669 | ) | (19,045 | ) | |||||
Total shareholders’ equity | 413,081 | 413,284 | 414,228 | 406,042 | 397,785 | ||||||||||
Total liabilities and shareholders’ equity | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | $4,388,763 |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
For the Three Months Ended | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans | $34,578 | $33,459 | $32,509 | $31,642 | $30,352 | ||||||||||
Taxable interest on securities | 5,118 | 4,719 | 4,655 | 4,844 | 4,709 | ||||||||||
Nontaxable interest on securities | 23 | 24 | 41 | 72 | 112 | ||||||||||
Dividends on Federal Home Loan Bank stock | 516 | 481 | 467 | 439 | 387 | ||||||||||
Other interest income | 205 | 217 | 197 | 156 | 104 | ||||||||||
Total interest and dividend income | 40,440 | 38,900 | 37,869 | 37,153 | 35,664 | ||||||||||
Interest expense: | |||||||||||||||
Deposits | 4,422 | 4,136 | 3,835 | 3,591 | 3,502 | ||||||||||
Federal Home Loan Bank advances | 3,983 | 3,708 | 3,816 | 3,509 | 3,344 | ||||||||||
Junior subordinated debentures | 183 | 167 | 159 | 149 | 138 | ||||||||||
Other interest expense | — | — | — | — | 1 | ||||||||||
Total interest expense | 8,588 | 8,011 | 7,810 | 7,249 | 6,985 | ||||||||||
Net interest income | 31,852 | 30,889 | 30,059 | 29,904 | 28,679 | ||||||||||
Provision for loan losses | — | 200 | 1,300 | 700 | 400 | ||||||||||
Net interest income after provision for loan losses | 31,852 | 30,689 | 28,759 | 29,204 | 28,279 | ||||||||||
Noninterest income: | |||||||||||||||
Wealth management revenues | 10,273 | 9,914 | 10,013 | 9,942 | 9,477 | ||||||||||
Mortgage banking revenues | 2,838 | 3,097 | 3,036 | 2,919 | 2,340 | ||||||||||
Service charges on deposit accounts | 863 | 946 | 942 | 901 | 883 | ||||||||||
Card interchange fees | 847 | 904 | 894 | 902 | 802 | ||||||||||
Income from bank-owned life insurance | 515 | 537 | 546 | 542 | 536 | ||||||||||
Loan related derivative income | 141 | 470 | 1,452 | 1,144 | 148 | ||||||||||
Other income | 266 | 342 | 400 | 456 | 324 | ||||||||||
Total noninterest income | 15,743 | 16,210 | 17,283 | 16,806 | 14,510 | ||||||||||
Noninterest expense: | |||||||||||||||
Salaries and employee benefits | 17,772 | 17,194 | 17,362 | 17,418 | 16,917 | ||||||||||
Net occupancy | 2,002 | 1,859 | 1,928 | 1,767 | 1,967 | ||||||||||
Outsourced services | 1,873 | 1,960 | 1,793 | 1,710 | 1,457 | ||||||||||
Equipment | 1,180 | 1,198 | 1,380 | 1,313 | 1,467 | ||||||||||
Legal, audit and professional fees | 726 | 562 | 534 | 582 | 616 | ||||||||||
FDIC deposit insurance costs | 404 | 389 | 308 | 469 | 481 | ||||||||||
Advertising and promotion | 177 | 466 | 416 | 362 | 237 | ||||||||||
Amortization of intangibles | 248 | 248 | 253 | 257 | 277 | ||||||||||
Change in fair value of contingent consideration | — | (333 | ) | — | — | (310 | ) | ||||||||
Other expenses | 2,748 | 2,211 | 2,780 | 2,428 | 2,177 | ||||||||||
Total noninterest expense | 27,130 | 25,754 | 26,754 | 26,306 | 25,286 | ||||||||||
Income before income taxes | 20,465 | 21,145 | 19,288 | 19,704 | 17,503 | ||||||||||
Income tax expense | 4,254 | 13,163 | 6,326 | 6,505 | 5,721 | ||||||||||
Net income | $16,211 | $7,982 | $12,962 | $13,199 | $11,782 | ||||||||||
Net income available to common shareholders | $16,173 | $7,958 | $12,934 | $13,170 | $11,755 | ||||||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 17,234 | 17,223 | 17,212 | 17,206 | 17,186 | ||||||||||
Diluted | 17,345 | 17,349 | 17,318 | 17,316 | 17,293 | ||||||||||
Earnings per common share: | |||||||||||||||
Basic | $0.94 | $0.46 | $0.75 | $0.77 | $0.68 | ||||||||||
Diluted | $0.93 | $0.46 | $0.75 | $0.76 | $0.68 | ||||||||||
Cash dividends declared per share | $0.43 | $0.39 | $0.39 | $0.38 | $0.38 |
SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
(Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||
Share and Equity Related Data: | |||||||||||||||
Book value per share | $23.93 | $23.99 | $24.06 | $23.59 | $23.14 | ||||||||||
Tangible book value per share - Non-GAAP (1) | $19.71 | $19.75 | $19.81 | $19.32 | $18.83 | ||||||||||
Market value per share | $53.75 | $53.25 | $57.25 | $51.55 | $49.30 | ||||||||||
Shares issued and outstanding at end of period | 17,262 | 17,227 | 17,214 | 17,210 | 17,193 | ||||||||||
Capital Ratios: | |||||||||||||||
Tier 1 risk-based capital | 11.78% (i) | 11.65 | % | 11.69 | % | 11.92 | % | 11.54 | % | ||||||
Total risk-based capital | 12.56% (i) | 12.45 | % | 12.53 | % | 12.78 | % | 12.38 | % | ||||||
Tier 1 leverage ratio | 8.84% (i) | 8.79 | % | 8.83 | % | 8.78 | % | 8.58 | % | ||||||
Common equity tier 1 | 11.13% (i) | 10.99 | % | 11.02 | % | 11.23 | % | 10.86 | % | ||||||
Equity to assets | 9.05 | % | 9.12 | % | 9.27 | % | 9.28 | % | 9.06 | % | |||||
Tangible equity to tangible assets - Non-GAAP (1) | 7.57 | % | 7.63 | % | 7.76 | % | 7.73 | % | 7.51 | % | |||||
(i) - estimated |
For the Three Months Ended | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||
Performance Ratios (2): | ||||||||||
Net interest margin (3) | 3.03 | % | 2.95 | % | 2.93 | % | 2.97 | % | 2.87 | % |
Return on average assets (net income divided by average assets) | 1.45 | % | 0.71 | % | 1.17 | % | 1.22 | % | 1.09 | % |
Return on average tangible assets - Non-GAAP (1) | 1.48 | % | 0.72 | % | 1.19 | % | 1.24 | % | 1.11 | % |
Return on average equity (net income available for common shareholders divided by average equity) | 15.96 | % | 7.56 | % | 12.43 | % | 13.07 | % | 12.00 | % |
Return on average tangible equity - Non-GAAP (1) | 19.40 | % | 9.17 | % | 15.12 | % | 15.99 | % | 14.76 | % |
(1) | See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document. |
(2) | Annualized based on the actual number of days in the period. |
(3) | Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets. |
SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
For the Three Months Ended | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||||
Wealth Management Results | |||||||||||||||
Wealth Management Revenues: | |||||||||||||||
Asset-based revenues | 9,955 | 9,686 | 9,791 | 9,401 | 9,247 | ||||||||||
Transaction-based revenues | 318 | 228 | 222 | 541 | 230 | ||||||||||
Total wealth management revenues | $10,273 | $9,914 | $10,013 | $9,942 | $9,477 | ||||||||||
Assets Under Administration: | |||||||||||||||
Balance at beginning of period | $6,714,637 | $6,587,899 | $6,403,501 | $6,243,301 | $6,063,293 | ||||||||||
Net investment appreciation (depreciation) & income | (32,024 | ) | 163,681 | 270,549 | 162,924 | 220,423 | |||||||||
Net client asset flows | (338,893 | ) | (36,943 | ) | (86,151 | ) | (2,724 | ) | (40,415 | ) | |||||
Balance at end of period | $6,343,720 | $6,714,637 | $6,587,899 | $6,403,501 | $6,243,301 | ||||||||||
Percentage of assets under administration that are managed assets | 92 | % | 93 | % | 92 | % | 93 | % | 93 | % | |||||
Mortgage Banking Results | |||||||||||||||
Mortgage Banking Revenues: | |||||||||||||||
Gains & commissions on loan sales, net | $2,679 | $2,987 | $2,952 | $2,784 | $2,268 | ||||||||||
Residential mortgage servicing fee income, net | 159 | 110 | 84 | 135 | 72 | ||||||||||
Total mortgage banking revenues | $2,838 | $3,097 | $3,036 | $2,919 | $2,340 | ||||||||||
Residential Mortgage Loan Originations: | |||||||||||||||
Originations for retention in portfolio | $67,840 | $75,595 | $90,378 | $94,794 | $57,907 | ||||||||||
Originations for sale to secondary market (1) | 87,720 | 143,834 | 143,112 | 144,491 | 102,441 | ||||||||||
Total mortgage loan originations | $155,560 | $219,429 | $233,490 | $239,285 | $160,348 | ||||||||||
Residential Mortgage Loans Sold: | |||||||||||||||
Sold with servicing rights retained | $33,575 | $39,769 | $37,823 | $29,199 | $22,567 | ||||||||||
Sold with servicing rights released (1) | 63,265 | 105,416 | 109,508 | 108,245 | 84,345 | ||||||||||
Total mortgage loans sold | $96,840 | $145,185 | $147,331 | $137,444 | $106,912 |
(1) | Also includes loans originated in a broker capacity. |
END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||
Loans: | |||||||||||||||
Commercial real estate (1) | $1,217,278 | $1,210,495 | $1,211,792 | $1,121,273 | $1,200,489 | ||||||||||
Commercial & industrial | 603,830 | 612,334 | 588,324 | 577,116 | 562,010 | ||||||||||
Total commercial | 1,821,108 | 1,822,829 | 1,800,116 | 1,698,389 | 1,762,499 | ||||||||||
Residential real estate (2) | 1,249,890 | 1,227,248 | 1,195,537 | 1,168,105 | 1,131,210 | ||||||||||
Home equity | 285,723 | 292,467 | 294,657 | 299,107 | 294,745 | ||||||||||
Other | 30,685 | 31,527 | 32,768 | 34,499 | 36,406 | ||||||||||
Total consumer | 316,408 | 323,994 | 327,425 | 333,606 | 331,151 | ||||||||||
Total loans | $3,387,406 | $3,374,071 | $3,323,078 | $3,200,100 | $3,224,860 |
(1) | Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property. |
(2) | Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four- family residential properties. |
March 31, 2018 | December 31, 2017 | ||||||||||
Balance | % of Total | Balance | % of Total | ||||||||
Commercial Real Estate Loans by Property Location: | |||||||||||
Rhode Island | $367,643 | 30.2 | % | $360,834 | 31.6 | % | |||||
Connecticut | 460,338 | 37.8 | 309,013 | 27.0 | |||||||
Massachusetts | 306,590 | 25.2 | 461,230 | 40.3 | |||||||
Subtotal | 1,134,571 | 93.2 | 1,131,077 | 98.9 | |||||||
All other states | 82,707 | 6.8 | 12,561 | 1.1 | |||||||
Total commercial real estate loans | $1,217,278 | 100.0 | % | $1,143,638 | 100.0 | % | |||||
Residential Real Estate Loans by Property Location: | |||||||||||
Rhode Island | $340,727 | 27.3 | % | $343,340 | 28.0 | % | |||||
Connecticut | 141,511 | 11.3 | 140,843 | 11.5 | |||||||
Massachusetts | 751,175 | 60.1 | 726,712 | 59.2 | |||||||
Subtotal | 1,233,413 | 98.7 | 1,210,895 | 98.7 | |||||||
All other states | 16,477 | 1.3 | 16,353 | 1.3 | |||||||
Total residential real estate loans | $1,249,890 | 100.0 | % | $1,227,248 | 100.0 | % |
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||
Deposits: | |||||||||||||||
Non-interest bearing demand deposits | $601,478 | $578,410 | $575,866 | $533,147 | $534,792 | ||||||||||
Interest-bearing demand deposits | 83,249 | 82,728 | 45,407 | 54,666 | 62,182 | ||||||||||
NOW accounts | 470,112 | 466,605 | 448,128 | 448,617 | 454,344 | ||||||||||
Money market accounts | 693,748 | 731,345 | 716,827 | 666,047 | 762,233 | ||||||||||
Savings accounts | 376,608 | 368,524 | 367,912 | 364,002 | 362,281 | ||||||||||
Time deposits (in-market) | 625,965 | 617,368 | 587,166 | 553,783 | 557,312 | ||||||||||
Wholesale brokered time deposits | 405,274 | 397,727 | 415,775 | 400,927 | 382,427 | ||||||||||
Total deposits | $3,256,434 | $3,242,707 | $3,157,081 | $3,021,189 | $3,115,571 |
CREDIT & ASSET QUALITY DATA | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||
Asset Quality Ratios: | |||||||||||||||
Nonperforming assets to total assets | 0.30 | % | 0.34 | % | 0.44 | % | 0.49 | % | 0.54 | % | |||||
Nonaccrual loans to total loans | 0.31 | % | 0.45 | % | 0.56 | % | 0.63 | % | 0.69 | % | |||||
Total past due loans to total loans | 0.57 | % | 0.59 | % | 0.49 | % | 0.66 | % | 0.65 | % | |||||
Allowance for loan losses to nonaccrual loans | 245.83 | % | 174.14 | % | 147.52 | % | 132.00 | % | 119.52 | % | |||||
Allowance for loan losses to total loans | 0.76 | % | 0.79 | % | 0.82 | % | 0.83 | % | 0.82 | % | |||||
Nonperforming Assets: | |||||||||||||||
Commercial real estate | $— | $4,954 | $5,887 | $6,422 | $7,809 | ||||||||||
Commercial & industrial | 397 | 283 | 429 | 1,232 | 1,129 | ||||||||||
Total commercial | 397 | 5,237 | 6,316 | 7,654 | 8,938 | ||||||||||
Residential real estate | 9,340 | 9,414 | 11,699 | 11,815 | 12,253 | ||||||||||
Home equity | 771 | 544 | 480 | 620 | 821 | ||||||||||
Other consumer | 13 | 16 | 16 | 109 | 115 | ||||||||||
Total consumer | 784 | 560 | 496 | 729 | 936 | ||||||||||
Total nonaccrual loans | 10,521 | 15,211 | 18,511 | 20,198 | 22,127 | ||||||||||
Other real estate owned | 3,206 | 131 | 1,038 | 1,342 | 1,410 | ||||||||||
Total nonperforming assets | $13,727 | $15,342 | $19,549 | $21,540 | $23,537 | ||||||||||
Past Due Loans (30 days or more past due): | |||||||||||||||
Commercial real estate | $— | $4,960 | $5,887 | $6,422 | $7,806 | ||||||||||
Commercial & industrial | 3,295 | 4,076 | 455 | 4,009 | 1,046 | ||||||||||
Total commercial | 3,295 | 9,036 | 6,342 | 10,431 | 8,852 | ||||||||||
Residential real estate | 11,806 | 7,855 | 7,802 | 8,857 | 10,533 | ||||||||||
Home equity | 4,235 | 3,141 | 2,268 | 1,806 | 1,422 | ||||||||||
Other consumer | 22 | 43 | 35 | 26 | 125 | ||||||||||
Total consumer | 4,257 | 3,184 | 2,303 | 1,832 | 1,547 | ||||||||||
Total past due loans | $19,358 | $20,075 | $16,447 | $21,120 | $20,932 | ||||||||||
Accruing loans 90 days or more past due | $— | $— | $— | $— | $— | ||||||||||
Nonaccrual loans included in past due loans | $7,066 | $11,788 | $13,216 | $14,490 | $18,081 |
CREDIT & ASSET QUALITY DATA | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
For the Three Months Ended | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||||
Nonaccrual Loan Activity: | |||||||||||||||
Balance at beginning of period | $15,211 | $18,511 | $20,198 | $22,127 | $22,058 | ||||||||||
Additions to nonaccrual status | 1,210 | 462 | 1,969 | 1,946 | 2,138 | ||||||||||
Loans returned to accruing status | (344 | ) | (1,316 | ) | (1,411 | ) | (778 | ) | (547 | ) | |||||
Loans charged-off | (690 | ) | (1,047 | ) | (694 | ) | (642 | ) | (79 | ) | |||||
Loans transferred to other real estate owned | (3,074 | ) | — | — | (98 | ) | (478 | ) | |||||||
Payments, payoffs and other changes | (1,792 | ) | (1,399 | ) | (1,551 | ) | (2,357 | ) | (965 | ) | |||||
Balance at end of period | $10,521 | $15,211 | $18,511 | $20,198 | $22,127 | ||||||||||
Allowance for Loan Losses: | |||||||||||||||
Balance at beginning of period | $26,488 | $27,308 | $26,662 | $26,446 | $26,004 | ||||||||||
Provision charged to earnings | — | 200 | 1,300 | 700 | 400 | ||||||||||
Charge-offs | (690 | ) | (1,047 | ) | (694 | ) | (642 | ) | (79 | ) | |||||
Recoveries | 66 | 27 | 40 | 158 | 121 | ||||||||||
Balance at end of period | $25,864 | $26,488 | $27,308 | $26,662 | $26,446 | ||||||||||
Net Loan Charge-Offs (Recoveries): | |||||||||||||||
Commercial real estate | $602 | $932 | $535 | $318 | $— | ||||||||||
Commercial & industrial | (23 | ) | 43 | 114 | 115 | (105 | ) | ||||||||
Total commercial | 579 | 975 | 649 | 433 | (105 | ) | |||||||||
Residential real estate | — | 32 | (1 | ) | 8 | (4 | ) | ||||||||
Home equity | 28 | (2 | ) | (7 | ) | 12 | 43 | ||||||||
Other consumer | 17 | 15 | 13 | 31 | 24 | ||||||||||
Total consumer | 45 | 13 | 6 | 43 | 67 | ||||||||||
Total | $624 | $1,020 | $654 | $484 | ($42 | ) | |||||||||
Net charge-offs to average loans (annualized) | 0.07 | % | 0.12 | % | 0.08 | % | 0.06 | % | (0.01 | %) |
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | |||||||||||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||||||||||
For the Three Months Ended | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||
Assets: | |||||||||||||||||||||||
Cash, federal funds sold and short-term investments | $53,138 | $205 | 1.56 | $62,040 | $217 | 1.39 | $56,195 | $104 | 0.75 | ||||||||||||||
Mortgage loans held for sale | $24,424 | $226 | 3.75 | $29,525 | $288 | 3.87 | $24,424 | $222 | 3.69 | ||||||||||||||
Taxable debt securities | 804,518 | 5,118 | 2.58 | 756,322 | 4,719 | 2.48 | 755,955 | 4,709 | 2.53 | ||||||||||||||
Nontaxable debt securities | 2,355 | 29 | 4.99 | 2,625 | 38 | 5.74 | 11,521 | 173 | 6.09 | ||||||||||||||
Total securities | 806,873 | 5,147 | 2.59 | 758,947 | 4,757 | 2.49 | 767,476 | 4,882 | 2.58 | ||||||||||||||
FHLB stock | 40,888 | 516 | 5.12 | 41,003 | 481 | 4.65 | 43,622 | 387 | 3.60 | ||||||||||||||
Commercial real estate | 1,218,702 | 12,346 | 4.11 | 1,219,370 | 11,843 | 3.85 | 1,207,032 | 10,557 | 3.55 | ||||||||||||||
Commercial & industrial | 608,784 | 6,823 | 4.55 | 598,790 | 6,897 | 4.57 | 573,801 | 6,157 | 4.35 | ||||||||||||||
Total commercial | 1,827,486 | $19,169 | 4.25 | 1,818,160 | $18,740 | 4.09 | 1,780,833 | $16,714 | 3.81 | ||||||||||||||
Residential real estate | 1,228,379 | 11,929 | 3.94 | 1,196,844 | 11,439 | 3.79 | 1,128,044 | 10,646 | 3.83 | ||||||||||||||
Home equity | 287,176 | 3,160 | 4.46 | 293,896 | 3,160 | 4.27 | 297,965 | 2,877 | 3.92 | ||||||||||||||
Other | 30,706 | 370 | 4.89 | 32,549 | 396 | 4.83 | 37,089 | 446 | 4.88 | ||||||||||||||
Total consumer | 317,882 | 3,530 | 4.50 | 326,445 | 3,556 | 4.32 | 335,054 | 3,323 | 4.02 | ||||||||||||||
Total loans | 3,373,747 | 34,628 | 4.16 | 3,341,449 | 33,735 | 4.01 | 3,243,931 | 30,683 | 3.84 | ||||||||||||||
Total interest-earning assets | 4,299,070 | 40,722 | 3.84 | 4,232,964 | 39,478 | 3.70 | 4,135,648 | 36,278 | 3.56 | ||||||||||||||
Noninterest-earning assets | 230,638 | 240,376 | 229,823 | ||||||||||||||||||||
Total assets | $4,529,708 | $4,473,340 | $4,365,471 | ||||||||||||||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||||
Interest-bearing demand deposits | $80,502 | $28 | 0.14 | $64,344 | $25 | 0.15 | $56,782 | $15 | 0.11 | ||||||||||||||
NOW accounts | 449,298 | 54 | 0.05 | 448,677 | 42 | 0.04 | 420,622 | 50 | 0.05 | ||||||||||||||
Money market accounts | 718,664 | 880 | 0.50 | 743,966 | 807 | 0.43 | 754,501 | 599 | 0.32 | ||||||||||||||
Savings accounts | 368,012 | 57 | 0.06 | 371,236 | 63 | 0.07 | 357,894 | 51 | 0.06 | ||||||||||||||
Time deposits (in-market) | 617,878 | 1,820 | 1.19 | 606,732 | 1,765 | 1.15 | 554,855 | 1,418 | 1.04 | ||||||||||||||
Wholesale brokered time deposits | 409,243 | 1,583 | 1.57 | 376,709 | 1,434 | 1.51 | 397,274 | 1,369 | 1.40 | ||||||||||||||
Total interest-bearing deposits | 2,643,597 | 4,422 | 0.68 | 2,611,664 | 4,136 | 0.63 | 2,541,928 | 3,502 | 0.56 | ||||||||||||||
FHLB advances | 810,967 | 3,983 | 1.99 | 785,169 | 3,708 | 1.87 | 831,614 | 3,344 | 1.63 | ||||||||||||||
Junior subordinated debentures | 22,681 | 183 | 3.27 | 22,681 | 167 | 2.92 | 22,681 | 138 | 2.47 | ||||||||||||||
Other | — | — | — | — | — | — | 27 | 1 | 15.02 | ||||||||||||||
Total interest-bearing liabilities | 3,477,245 | 8,588 | 1.00 | 3,419,514 | 8,011 | 0.93 | 3,396,250 | 6,985 | 0.83 | ||||||||||||||
Noninterest-bearing demand deposits | 584,557 | 582,714 | 527,215 | ||||||||||||||||||||
Other liabilities | 56,951 | 53,544 | 44,889 | ||||||||||||||||||||
Shareholders' equity | 410,955 | 417,568 | 397,117 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $4,529,708 | $4,473,340 | $4,365,471 | ||||||||||||||||||||
Net interest income (FTE) | $32,134 | $31,467 | $29,293 | ||||||||||||||||||||
Interest rate spread | 2.84 | 2.77 | 2.73 | ||||||||||||||||||||
Net interest margin | 3.03 | 2.95 | 2.87 |
For the Three Months Ended | Mar 31, 2018 | Dec 31, 2017 | Mar 31, 2017 | ||||||
Commercial loans | $276 | $564 | $553 | ||||||
Nontaxable debt securities | 6 | 14 | 61 | ||||||
Total | $282 | $578 | $614 |
SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||
(Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | |||||||||||
Tangible Book Value per Share: | |||||||||||||||
Total shareholders' equity, as reported | $413,081 | $413,284 | $414,228 | $406,042 | $397,785 | ||||||||||
Less: | |||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,059 | ||||||||||
Identifiable intangible assets, net | 8,893 | 9,140 | 9,388 | 9,642 | 9,898 | ||||||||||
Total tangible shareholders' equity | $340,279 | $340,235 | $340,931 | $332,491 | $323,828 | ||||||||||
Shares outstanding, as reported | 17,262 | 17,227 | 17,214 | 17,210 | 17,193 | ||||||||||
Book value per share - GAAP | $23.93 | $23.99 | $24.06 | $23.59 | $23.14 | ||||||||||
Tangible book value per share - Non-GAAP | $19.71 | $19.75 | $19.81 | $19.32 | $18.83 | ||||||||||
Tangible Equity to Tangible Assets: | |||||||||||||||
Total tangible shareholders' equity | $340,279 | $340,235 | $340,931 | $332,491 | $323,828 | ||||||||||
Total assets, as reported | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | $4,388,763 | ||||||||||
Less: | |||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,059 | ||||||||||
Identifiable intangible assets, net | 8,893 | 9,140 | 9,388 | 9,642 | 9,898 | ||||||||||
Total tangible assets | $4,493,524 | $4,456,801 | $4,395,933 | $4,301,978 | $4,314,806 | ||||||||||
Equity to assets - GAAP | 9.05 | % | 9.12 | % | 9.27 | % | 9.28 | % | 9.06 | % | |||||
Tangible equity to tangible assets - Non-GAAP | 7.57 | % | 7.63 | % | 7.76 | % | 7.73 | % | 7.51 | % |
For the Three Months Ended | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||||
Return on Average Tangible Assets: | |||||||||||||||
Net income, as reported | $16,211 | $7,982 | $12,962 | $13,199 | $11,782 | ||||||||||
Total average assets, as reported | $4,529,708 | $4,473,340 | $4,401,536 | $4,354,464 | $4,365,471 | ||||||||||
Less average balances of: | |||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 64,058 | 64,059 | ||||||||||
Identifiable intangible assets, net | 9,014 | 9,261 | 9,511 | 9,767 | 10,027 | ||||||||||
Total average tangible assets | $4,456,785 | $4,400,170 | $4,328,116 | $4,280,639 | $4,291,385 | ||||||||||
Return on average assets - GAAP | 1.45 | % | 0.71 | % | 1.17 | % | 1.22 | % | 1.09 | % | |||||
Return on average tangible assets - Non-GAAP | 1.48 | % | 0.72 | % | 1.19 | % | 1.24 | % | 1.11 | % | |||||
Return on Average Tangible Equity: | |||||||||||||||
Net income available to common shareholders, as reported | $16,173 | $7,958 | $12,934 | $13,170 | $11,755 | ||||||||||
Total average equity, as reported | $410,955 | $417,568 | $412,862 | $404,238 | $397,117 | ||||||||||
Less average balances of: | |||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 64,058 | 64,059 | ||||||||||
Identifiable intangible assets, net | 9,014 | 9,261 | 9,511 | 9,767 | 10,027 | ||||||||||
Total average tangible equity | $338,032 | $344,398 | $339,442 | $330,413 | $323,031 | ||||||||||
Return on average equity - GAAP | 15.96 | % | 7.56 | % | 12.43 | % | 13.07 | % | 12.00 | % | |||||
Return on average tangible equity - Non-GAAP | 19.40 | % | 9.17 | % | 15.12 | % | 15.99 | % | 14.76 | % |
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