ROCKLAND, Mass.--(BUSINESS WIRE)--Independent Bank Corp. (NASDAQ: INDB), parent of Rockland Trust Company, today announced 2016 second quarter net income of $20.4 million, or $0.77 per diluted share, as compared to $18.6 million, or $0.71 per diluted share, in the prior quarter. The first and second quarter net income contained items which the Company considers non-core, such as merger and acquisition expenses and loss on the extinguishment of debt. On an operating basis, net income for the second quarter was $20.5 million, or $0.78 on a diluted earnings per share basis, versus $19.1 million, or $0.72 per diluted share in the prior quarter, representing an increase of 7.5% and 8.3%, respectively.
“Rockland Trust had outstanding performance, by any measure, during the second quarter of 2016,” said Christopher Oddleifson, the President and Chief Executive Officer of Independent Bank Corp. and Rockland Trust. “Our strong growth in loans and core deposits, as well as noninterest income, led to increases in revenue and earnings. Rockland Trust's success is directly attributable to the efforts of my colleagues, who are steadfastly devoted to serving the needs of our customers and the communities we serve."
BALANCE SHEET
Total assets of $7.4 billion at June 30, 2016 increased by $229.6 million, or 3.2%, from the prior quarter and by $223.5 million, or 3.1%, as compared to the year ago period.
The commercial loan portfolio rose by $72.5 million, or 1.8% (7.3% annualized), over the prior quarter, driven by solid growth across all commercial sectors, including a 4.8% (19.2% annualized) increase in the commercial and industrial loan portfolio. This growth reflected strong origination volumes along with typical second quarter increases in line utilization. The small business loan portfolio continued its steady rise and is now 21.5% above the prior year level. In addition, the home equity loan portfolio continued to benefit from sustained marketing campaigns and a growing customer base, increasing by 1.4% (5.7% annualized) over the prior quarter. These factors combined to generate growth in total loans at June 30, 2016 of $85.0 million, or 1.5% (6.1% annualized), compared to the balance at March 31, 2016. Compared to the prior year period, total loans increased by $239.5 million, or 4.4%, to $5.7 billion.
Total deposit levels increased by $202.6 million, or 3.4%, compared to the prior quarter, driven by strong growth in all major core deposit categories. Core deposits rose by $215.8 million, or 16.3% on an annualized basis, from the prior quarter and represented 89.6% of total deposits at June 30, 2016. Total cost of deposits declined further to 18 basis points during the second quarter, further reflecting the Company’s success in growing its core deposit customer base. Compared to the prior year period, total deposits increased by $227.4 million, or 3.8%, to $6.2 billion.
The securities portfolio decreased by $7.4 million from the prior quarter to $829.3 million at June 30, 2016, due to paydowns and maturities, partially offset by $29.9 million in purchases, and comprised 11.2% of total assets of the Company at June 30, 2016.
Stockholders' equity at June 30, 2016 rose to $803.9 million, an increase of 2.0% from March 31, 2016 and 8.1% from the year ago period. The strong growth in capital led to a $0.62 increase, or 2.8%, in the Company’s tangible book value per share during the second quarter compared to the first quarter of 2016. The June 30, 2016 tangible book value per share of $22.52 represents a 11.4% increase above the prior year amount. The Company’s ratio of tangible common equity to tangible assets of 8.22% represents a decrease of 3 basis points from the prior quarter and an increase of 64 basis points from the same period a year ago.
NET INTEREST INCOME
Net interest income for the second quarter was $56.5 million, representing a $1.6 million, or 3.0%, increase over the prior quarter. The increase was attributable to higher earning asset levels and a higher net interest margin. During the second quarter, the Company’s net interest margin increased by eight basis points from the prior quarter to 3.47% and benefited from a five basis point increase from customer loan and security prepayment penalties and a two basis point increase from purchase accounting adjustments.
NONINTEREST INCOME
The Company recorded noninterest income of $21.1 million during the second quarter, which represents a $1.9 million, or 10.1%, increase from the prior quarter. Significant changes in noninterest income in the second quarter compared to the prior quarter included the following:
- Deposit account fees and interchange and ATM fees increased by $413,000, or 5.0%, mainly due to seasonal debit card usage.
- Investment management income increased by $731,000, or 14.6%, reflecting growth in assets under administration along with seasonal tax preparation fees during the second quarter. Assets under administration increased by 3.2% to $2.8 billion as of June 30, 2016.
- Mortgage banking income increased by $231,000, or 20.4%, due primarily to higher volume, partially offset by impairment on the Company's mortgage servicing asset.
- Loan level derivative income increased by $373,000, or 21.7%, due to strong customer demand in the quarter in light of the continued uncertain rate environment.
- Other noninterest income increased $219,000, or 10.5%, mainly due to an increase in commercial loan fees, largely from loans that have been paid off.
NONINTEREST EXPENSE
The Company recorded noninterest expense of $47.1 million during the second quarter, which represents a $664,000, or 1.4%, increase from the prior quarter. Significant changes in noninterest expense in the second quarter compared to the prior quarter included the following:
- Salaries and employee benefits decreased by $212,000, or 0.8%, due primarily to lower payroll taxes and stock compensation.
- Occupancy and equipment expenses decreased by $160,000, or 2.7%, mainly due to lower snow removal costs.
- Merger and acquisition costs of $206,000 for the quarter related to the pending acquisition of New England Bancorp, Inc., which is expected to close in the fourth quarter of 2016. This compared to $334,000 in the prior quarter.
- During the first quarter, the Company recognized a $437,000 loss in conjunction with its payoff of approximately $49.0 million in Federal Home Loan Bank borrowings during the first quarter of 2016. There was no such expense in the second quarter of 2016.
- Other noninterest expenses increased by $1.7 million, or 16.2%, driven primarily by higher provision for unfunded commitments, loan workout costs, consultant fees, mortgage operation expenses, other losses and charge-offs and card issuance fees.
The Company generated a return on average assets and a return on average common equity of 1.13% and 10.24%, respectively, in the second quarter, as compared to 1.04% and 9.52%, respectively, for the prior quarter.
ASSET QUALITY
Asset quality metrics remained strong during the second quarter with total net recoveries of $695,000, compared to net recoveries of $82,000 in the prior quarter. The provision for loan losses increased to $600,000 for the second quarter versus $525,000 in the first quarter of 2016 in conjunction with growth in the loan portfolio. Nonperforming loan levels in the second quarter were essentially flat at $25.6 million, and represent 0.45% of total loans at June 30, 2016, as compared to 0.46% at March 31, 2016. Total nonperforming assets increased modestly to $27.5 million at the end of the second quarter, from $27.2 million at the end of the prior quarter. Delinquency as a percentage of loans was 0.47% at June 30, 2016, a decrease of seven basis points from the prior quarter.
The allowance for loan losses was $57.7 million at June 30, 2016, as compared to $56.4 million at March 31, 2016. The Company’s allowance for loan losses as a percentage of loans was 1.02% and 1.01% as of June 30, 2016 and March 31, 2016, respectively.
CONFERENCE CALL INFORMATION
Christopher Oddleifson, Chief Executive Officer and Robert Cozzone, Chief Financial Officer will host a conference call to discuss second quarter earnings at 10:00 a.m. Eastern Time on Friday, July 22, 2016. Internet access to the call is available on the Company’s website at www.rocklandtrust.com or via telephonic access by dial-in at 1-888-336-7153 reference: INDB. A replay of the call will be available by calling 1-877-344-7529, Replay Conference Number: 10088412 and will available through August 5, 2016. Additionally, a webcast replay will be available until July 22, 2017.
ABOUT INDEPENDENT BANK CORP.
Independent Bank Corp. has approximately $7.4 billion in assets and is the holding company for Rockland Trust Company, a full-service commercial bank headquartered in Massachusetts. Rockland Trust offers a wide range of banking, investment, and insurance services to businesses and individuals through retail branches, commercial lending offices, investment management offices, and residential lending centers located in Eastern Massachusetts and Rhode Island, as well as through telephone banking, mobile banking, and the Internet. Rockland Trust is an FDIC Member and an Equal Housing Lender. To find out why Rockland Trust is the bank “Where Each Relationship Matters ®”, please visit www.rocklandtrust.com.
This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “believe,” “future,” “positioned,” “continued,” “will,” “would,” “potential,” or similar statements or variations of such terms. Actual results may differ from those contemplated by these forward-looking statements.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:
- a weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area;
- adverse changes in the local real estate market;
- adverse changes in asset quality including an unanticipated credit deterioration in our loan portfolio;
- acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;
- changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
- higher than expected tax expense, resulting from failure to comply with general tax laws, changes in tax laws, or failure to comply with requirements of the federal New Markets Tax Credit program;
- unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities;
- unexpected increased competition in the Company’s market area;
- unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;
- a deterioration in the conditions of the securities markets;
- a deterioration of the credit rating for U.S. long-term sovereign debt;
- our inability to adapt to changes in information technology;
- electronic fraudulent activity within the financial services industry, especially in the commercial banking sector;
- adverse changes in consumer spending and savings habits;
- the inability to realize expected revenue synergies from merger transactions in the amounts or in the timeframe anticipated;
- inability to retain customers and employees, including those of previous mergers;
- the effect of laws and regulations regarding the financial services industry including, but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act;
- changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to the Company’s business;
- changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;
- cyber security attacks or intrusions that could adversely impact our businesses; and
- other unexpected material adverse changes in our operations or earnings.
The Company wishes to caution readers not to place undue reliance on any forward-looking statements as the Company’s business and its forward-looking statements involve substantial known and unknown risks and uncertainties described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (“Risk Factors”). Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this release which modify or impact any of the forward-looking statements contained in this release will be deemed to modify or supersede such statements in this release. In addition to the information set forth in this press release, you should carefully consider the Risk Factors.
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information includes operating earnings and operating EPS, tangible book value per share and the tangible common equity ratio. Operating earnings and operating EPS exclude items that management believes are unrelated to its core banking business and will not have a material financial impact on operating results in future periods, such as gains or losses on the sales of securities, loss on extinguishment of debt, merger and acquisition expenses, and other items. The Company’s management uses operating earnings and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such excluded gains or losses.
Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets by common shares outstanding) and with the tangible common equity ratio (which is computed by dividing tangible common equity by tangible assets). The Company has included information on tangible book value per share and the tangible common equity ratio because management believes that investors may find it useful to have access to the same analytical tool used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.
These non-GAAP measures should not be viewed as a substitute for operating results determined in accordance with GAAP. An item which management deems to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating earnings, operating EPS, tangible book value per share and the tangible common equity ratio are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.
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INDEPENDENT BANK CORP. FINANCIAL SUMMARY |
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| CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||||
| (Unaudited dollars in thousands) |
% Change |
% Change |
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Jun 2016 vs. |
Jun 2016 vs. |
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June 30 2016 |
March 31 2016 |
June 30 2015 |
Mar 2016
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Jun 2015
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| Assets | |||||||||||||||||||||||
| Cash and due from banks | $ | 102,397 | $ | 83,345 | $ | 100,054 | 22.86 | % | 2.34 | % | |||||||||||||
| Interest-earning deposits with banks | 229,740 | 113,387 | 295,722 | 102.62 | % | (22.31 | )% | ||||||||||||||||
| Securities | |||||||||||||||||||||||
| Securities - trading | 799 | 763 | 489 | 4.72 | % | 63.39 | % | ||||||||||||||||
| Securities - available for sale | 389,824 | 378,227 | 375,001 | 3.07 | % | 3.95 | % | ||||||||||||||||
|
Securities - held to maturity |
438,656 | 457,641 | 428,339 | (4.15 | )% | 2.41 | % | ||||||||||||||||
| Total securities | 829,279 | 836,631 | 803,829 | (0.88 | )% | 3.17 | % | ||||||||||||||||
| Loans held for sale (at fair value) | 12,927 | 7,588 | 10,728 | 70.36 | % | 20.50 | % | ||||||||||||||||
| Loans | |||||||||||||||||||||||
| Commercial and industrial | 875,164 | 835,336 | 873,105 | 4.77 | % | 0.24 | % | ||||||||||||||||
| Commercial real estate | 2,727,143 | 2,711,857 | 2,630,062 | 0.56 | % | 3.69 | % | ||||||||||||||||
| Commercial construction | 367,559 | 357,867 | 278,692 | 2.71 | % | 31.89 | % | ||||||||||||||||
| Small business | 111,035 | 103,323 | 91,367 | 7.46 | % | 21.53 | % | ||||||||||||||||
| Total commercial | 4,080,901 | 4,008,383 | 3,873,226 | 1.81 | % | 5.36 | % | ||||||||||||||||
| Residential real estate | 628,348 | 631,888 | 653,370 | (0.56 | )% | (3.83 | )% | ||||||||||||||||
| Home equity - first position | 554,624 | 547,056 | 526,370 | 1.38 | % | 5.37 | % | ||||||||||||||||
| Home equity - subordinate positions | 393,952 | 388,255 | 364,523 | 1.47 | % | 8.07 | % | ||||||||||||||||
| Total consumer real estate | 1,576,924 | 1,567,199 | 1,544,263 | 0.62 | % | 2.11 | % | ||||||||||||||||
| Other consumer | 16,428 | 13,649 | 17,293 | 20.36 | % | (5.00 | )% | ||||||||||||||||
| Total loans | 5,674,253 | 5,589,231 | 5,434,782 | 1.52 | % | 4.41 | % | ||||||||||||||||
| Less: allowance for loan losses | (57,727 | ) | (56,432 | ) | (54,995 | ) | 2.29 | % | 4.97 | % | |||||||||||||
| Net loans | 5,616,526 | 5,532,799 | 5,379,787 | 1.51 | % | 4.40 | % | ||||||||||||||||
| Federal Home Loan Bank stock | 11,304 | 11,807 | 37,485 | (4.26 | )% | (69.84 | )% | ||||||||||||||||
| Bank premises and equipment, net | 76,173 | 76,692 | 74,143 | (0.68 | )% | 2.74 | % | ||||||||||||||||
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Goodwill and other intangibles |
211,526 | 212,218 | 214,331 | (0.33 | )% | (1.31 | )% | ||||||||||||||||
| Other assets | 328,994 | 314,801 | 279,239 | 4.51 | % | 17.82 | % | ||||||||||||||||
| Total assets | $ | 7,418,866 | $ | 7,189,268 | $ | 7,195,318 | 3.19 | % | 3.11 | % | |||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Demand deposits | $ | 1,908,986 | $ | 1,840,186 | $ | 1,832,971 | 3.74 | % | 4.15 | % | |||||||||||||
| Savings and interest checking accounts | 2,469,162 | 2,374,264 | 2,285,968 | 4.00 | % | 8.01 | % | ||||||||||||||||
| Money market | 1,175,669 | 1,123,600 | 1,125,888 | 4.63 | % | 4.42 | % | ||||||||||||||||
| Time certificates of deposit | 644,075 | 657,197 | 725,703 | (2.00 | )% | (11.25 | )% | ||||||||||||||||
| Total deposits | 6,197,892 | 5,995,247 | 5,970,530 | 3.38 | % | 3.81 | % | ||||||||||||||||
| Borrowings | |||||||||||||||||||||||
| Federal Home Loan Bank borrowings | 50,833 | 50,840 | 108,190 | (0.01 | )% | (53.02 | )% | ||||||||||||||||
| Customer repurchase agreements and other short-term borrowings | 139,716 | 134,568 | 119,439 | 3.83 | % | 16.98 | % | ||||||||||||||||
| Wholesale repurchase agreements | — | — | 50,000 | n/a | (100.00 | )% | |||||||||||||||||
| Junior subordinated debentures | 73,207 | 73,257 | 73,408 | (0.07 | )% | (0.27 | )% | ||||||||||||||||
| Subordinated debentures | 34,612 | 34,600 | 34,565 | 0.03 | % | 0.14 | % | ||||||||||||||||
| Total borrowings | 298,368 | 293,265 | 385,602 | 1.74 | % | (22.62 | )% | ||||||||||||||||
| Total deposits and borrowings | 6,496,260 | 6,288,512 | 6,356,132 | 3.30 | % | 2.20 | % | ||||||||||||||||
| Other liabilities | 118,709 | 112,609 | 95,869 | 5.42 | % | 23.82 | % | ||||||||||||||||
| Stockholders' equity | |||||||||||||||||||||||
| Common stock | 261 | 261 | 259 | — | % | 0.77 | % | ||||||||||||||||
| Additional paid in capital | 408,155 | 406,921 | 401,437 | 0.30 | % | 1.67 | % | ||||||||||||||||
| Retained earnings | 391,898 | 379,153 | 343,757 | 3.36 | % | 14.00 | % | ||||||||||||||||
| Accumulated other comprehensive income (loss), net of tax | 3,583 | 1,812 | (2,136 | ) | (97.74 | )% | 267.74 | % | |||||||||||||||
| Total stockholders' equity | 803,897 | 788,147 | 743,317 | 2.00 | % | 8.15 | % | ||||||||||||||||
| Total liabilities and stockholders' equity | $ | 7,418,866 | $ | 7,189,268 | $ | 7,195,318 | 3.19 | % | 3.11 | % | |||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||
| (Unaudited dollars in thousands, except per share data) | |||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||
| % Change | % Change | ||||||||||||||||||||||
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June 30 2016 |
March 31 2016 |
June 30 2015 |
Jun 2016 vs. | Jun 2016 vs. | |||||||||||||||||||
| Mar 2016 | Jun 2015 | ||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest on federal funds sold and short-term investments | $ | 169 | $ | 211 | $ | 60 | (19.91 | )% | 181.67 | % | |||||||||||||
| Interest and dividends on securities | 5,298 | 5,229 | 4,882 | 1.32 | % | 8.52 | % | ||||||||||||||||
| Interest and fees on loans | 55,636 | 54,269 | 54,016 | 2.52 | % | 3.00 | % | ||||||||||||||||
| Interest on loans held for sale | 57 | 32 | 58 | 78.13 | % | (1.72 | )% | ||||||||||||||||
| Total interest income | 61,160 | 59,741 | 59,016 | 2.38 | % | 3.63 | % | ||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Interest on deposits | 2,738 | 2,868 | 2,922 | (4.53 | )% | (6.30 | )% | ||||||||||||||||
| Interest on borrowings | 1,889 | 1,982 | 2,347 | (4.69 | )% | (19.51 | )% | ||||||||||||||||
| Total interest expense | 4,627 | 4,850 | 5,269 | (4.60 | )% | (12.18 | )% | ||||||||||||||||
| Net interest income | 56,533 | 54,891 | 53,747 | 2.99 | % | 5.18 | % | ||||||||||||||||
| Provision for loan losses | 600 | 525 | 700 | 14.29 | % | (14.29 | )% | ||||||||||||||||
| Net interest income after provision for loan losses | 55,933 | 54,366 | 53,047 | 2.88 | % | 5.44 | % | ||||||||||||||||
| Noninterest income | |||||||||||||||||||||||
| Deposit account fees | 4,471 | 4,470 | 4,465 | 0.02 | % | 0.13 | % | ||||||||||||||||
| Interchange and ATM fees | 4,136 | 3,724 | 3,767 | 11.06 | % | 9.80 | % | ||||||||||||||||
| Investment management | 5,734 | 5,003 | 5,528 | 14.61 | % | 3.73 | % | ||||||||||||||||
| Mortgage banking income | 1,363 | 1,132 | 1,226 | 20.41 | % | 11.17 | % | ||||||||||||||||
| Increase in cash surrender value of life insurance policies | 982 | 1,014 | 949 | (3.16 | )% | 3.48 | % | ||||||||||||||||
| Gain on sale of fixed income securities | — | — | 798 | n/a | (100.00 | )% | |||||||||||||||||
| Gain on sale of equity securities | 5 | — | 19 | 100.00 | % | (73.68 | )% | ||||||||||||||||
| Loan level derivative income | 2,095 | 1,722 | 1,430 | 21.66 | % | 46.50 | % | ||||||||||||||||
| Other noninterest income | 2,309 | 2,090 | 2,079 | 10.48 | % | 11.06 | % | ||||||||||||||||
| Total noninterest income | 21,095 | 19,155 | 20,261 | 10.13 | % | 4.12 | % | ||||||||||||||||
| Noninterest expenses | |||||||||||||||||||||||
| Salaries and employee benefits | 26,977 | 27,189 | 26,318 | (0.78 | )% | 2.50 | % | ||||||||||||||||
| Occupancy and equipment expenses | 5,667 | 5,827 | 5,672 | (2.75 | )% | (0.09 | )% | ||||||||||||||||
| Data processing and facilities management | 1,225 | 1,206 | 1,228 | 1.58 | % | (0.24 | )% | ||||||||||||||||
| FDIC assessment | 920 | 1,010 | 1,017 | (8.91 | )% | (9.54 | )% | ||||||||||||||||
| Merger and acquisition expense | 206 | 334 | 271 | (38.32 | )% | (23.99 | )% | ||||||||||||||||
| Loss on extinguishment of debt | — | 437 | — | (100.00 | )% | n/a | |||||||||||||||||
| Loss on sale of fixed income securities | — | — | 1,124 | n/a | (100.00 | )% | |||||||||||||||||
| Loss on sale of equity securities | 3 | 29 | 8 | (89.66 | )% | (62.50 | )% | ||||||||||||||||
| Other noninterest expenses | 12,148 | 10,450 | 13,006 | 16.25 | % | (6.60 | )% | ||||||||||||||||
| Total noninterest expenses | 47,146 | 46,482 | 48,644 | 1.43 | % | (3.08 | )% | ||||||||||||||||
| Income before income taxes | 29,882 | 27,039 | 24,664 | 10.51 | % | 21.16 | % | ||||||||||||||||
| Provision for income taxes | 9,508 | 8,428 | 7,213 | 12.81 | % | 31.82 | % | ||||||||||||||||
| Net Income | $ | 20,374 | $ | 18,611 | $ | 17,451 | 9.47 | % | 16.75 | % | |||||||||||||
| Basic earnings per share | $ | 0.77 | $ | 0.71 | $ | 0.67 | 8.45 | % | 14.93 | % | |||||||||||||
| Diluted earnings per share | $ | 0.77 | $ | 0.71 | $ | 0.67 | 8.45 | % | 14.93 | % | |||||||||||||
| Weighted average common shares (basic) | 26,304,129 | 26,275,323 | 26,149,593 | ||||||||||||||||||||
| Weighted average common shares (diluted) | 26,352,014 | 26,318,732 | 26,221,412 | ||||||||||||||||||||
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Performance ratios |
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| Net interest margin (FTE) | 3.47 | % | 3.39 | % | 3.43 | % | |||||||||||||||||
| Return on average assets | 1.13 | % | 1.04 | % | 1.00 | % | |||||||||||||||||
| Return on average common equity | 10.24 | % | 9.52 | % | 9.43 | % | |||||||||||||||||
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Reconciliation table - non-GAAP financial information |
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| Net income | $ | 20,374 | $ | 18,611 | $ | 17,451 | 9.47 | % | 16.75 | % | |||||||||||||
| Noninterest income components | |||||||||||||||||||||||
| Less - gain on sale of fixed income securities | — | — | (798 | ) | |||||||||||||||||||
| Noninterest expense components | |||||||||||||||||||||||
| Add - loss on extinguishment of debt | — | 437 | — | ||||||||||||||||||||
| Add - loss on sale of fixed income securities | — | — | 1,124 | ||||||||||||||||||||
| Add - merger and acquisition expenses | 206 | 334 | 271 | ||||||||||||||||||||
| Add - impairment on acquired facilities | — | — | 109 | ||||||||||||||||||||
| Total impact of noncore items | $ | 206 | $ | 771 | $ | 706 | |||||||||||||||||
| Less - tax benefit associated with noncore items | $ | (84 | ) | $ | (315 | ) | $ | (292 | ) | ||||||||||||||
| Net operating earnings | $ | 20,496 | $ | 19,067 | $ | 17,865 | 7.49 | % | 14.73 | % | |||||||||||||
| Diluted earnings per share, on an operating basis | $ | 0.78 | $ | 0.72 | $ | 0.68 | 8.33 | % | 14.71 | % | |||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
| (Unaudited dollars in thousands) | ||||||||||||||
| Six Months Ended | ||||||||||||||
| % Change | ||||||||||||||
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June 30 2016 |
June 30 2015 |
Jun 2016 vs. | ||||||||||||
| Jun 2015 | ||||||||||||||
| Interest income | ||||||||||||||
| Interest on federal funds sold and short-term investments | $ | 380 | $ | 91 | 317.58 | % | ||||||||
| Interest and dividends on securities | 10,527 | 9,543 | 10.31 | % | ||||||||||
| Interest and fees on loans | 109,905 | 105,704 | 3.97 | % | ||||||||||
| Interest on loans held for sale | 89 | 109 | (18.35 | )% | ||||||||||
|
Total interest income |
120,901 | 115,447 | 4.72 | % | ||||||||||
| Interest expense | ||||||||||||||
| Interest on deposits | 5,606 | 5,685 | (1.39 | )% | ||||||||||
| Interest on borrowings | 3,871 | 4,765 | (18.76 | )% | ||||||||||
| Total interest expense | 9,477 | 10,450 | (9.31 | )% | ||||||||||
| Net interest income | 111,424 | 104,997 | 6.12 | % | ||||||||||
| Provision for loan losses | 1,125 | 200 | 462.50 | % | ||||||||||
| Net interest income after provision for loan losses | 110,299 | 104,797 | 5.25 | % | ||||||||||
| Noninterest income | ||||||||||||||
| Deposit account fees | 8,941 | 8,631 | 3.59 | % | ||||||||||
| Interchange and ATM fees | 7,860 | 6,868 | 14.44 | % | ||||||||||
| Investment management | 10,737 | 10,635 | 0.96 | % | ||||||||||
| Mortgage banking income | 2,495 | 2,352 | 6.08 | % | ||||||||||
| Increase in cash surrender value of life insurance policies | 1,996 | 1,727 | 15.58 | % | ||||||||||
| Gain on sale of fixed income securities | — | 798 | (100.00 | )% | ||||||||||
| Gain on sale of equity securities | 5 | 19 | (73.68 | )% | ||||||||||
| Loan level derivative income | 3,817 | 1,848 | 106.55 | % | ||||||||||
| Other noninterest income | 4,399 | 3,939 | 11.68 | % | ||||||||||
| Total noninterest income | 40,250 | 36,817 | 9.32 | % | ||||||||||
| Noninterest expenses | ||||||||||||||
| Salaries and employee benefits | 54,166 | 51,606 | 4.96 | % | ||||||||||
| Occupancy and equipment expenses | 11,494 | 12,066 | (4.74 | )% | ||||||||||
| Data processing and facilities management | 2,431 | 2,350 | 3.45 | % | ||||||||||
| FDIC assessment | 1,930 | 1,973 | (2.18 | )% | ||||||||||
| Merger and acquisition expense | 540 | 10,501 | (94.86 | )% | ||||||||||
| Loss on extinguishment of debt | 437 | 122 | 258.20 | % | ||||||||||
| Loss on sale of fixed income securities | — | 1,124 | (100.00 | )% | ||||||||||
| Loss on sale of equity securities | 32 | 8 | 300.00 | % | ||||||||||
| Other noninterest expenses | 22,598 | 23,872 | (5.34 | )% | ||||||||||
| Total noninterest expenses | 93,628 | 103,622 | (9.64 | )% | ||||||||||
| Income before income taxes | 56,921 | 37,992 | 49.82 | % | ||||||||||
| Provision for income taxes | 17,936 | 11,082 | 61.85 | % | ||||||||||
| Net Income | $ | 38,985 | $ | 26,910 | 44.87 | % | ||||||||
| Basic earnings per share | $ | 1.48 | $ | 1.05 | 40.95 | % | ||||||||
| Diluted earnings per share | $ | 1.48 | $ | 1.05 | 40.95 | % | ||||||||
| Basic average shares | 26,289,726 | 25,558,016 | ||||||||||||
| Diluted average shares | 26,335,405 | 25,634,642 | ||||||||||||
|
Performance ratios |
||||||||||||||
| Net interest margin (FTE) | 3.43 | % | 3.47 | % | ||||||||||
| Return on average assets | 1.09 | % | 0.80 | % | ||||||||||
| Return on average common equity | 9.89 | % | 7.59 | % | ||||||||||
|
Reconciliation table - non-GAAP financial information |
||||||||||||||
| Net income | $ | 38,985 | $ | 26,910 | 44.87 | % | ||||||||
| Noninterest income components | ||||||||||||||
| Less - gain on sale of fixed income securities, net of tax | — | (798 | ) | |||||||||||
| Noninterest expense components | ||||||||||||||
| Add - loss on extinguishment of debt, net of tax | 437 | 122 | ||||||||||||
| Add - loss on sale of fixed income securities, net of tax | — | 1,124 | ||||||||||||
| Add - merger and acquisition expenses, net of tax | 540 | 10,501 | ||||||||||||
| Add - impairment on acquired facilities, net of tax | — | 109 | ||||||||||||
| Total impact of noncore items | $ | 977 | $ | 11,058 | ||||||||||
| Less - tax benefit associated with noncore items | $ | (400 | ) | $ | (4,285 | ) | ||||||||
| Net operating earnings | $ | 39,562 | $ | 33,683 | 17.45 | % | ||||||||
| Diluted earnings per share, on an operating basis | $ | 1.50 | $ | 1.30 | 15.38 | % | ||||||||
| RECONCILIATION TABLE - NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
| (Unaudited dollars in thousands) | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||
| % Change | % Change | ||||||||||||||||||||||||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
Jun 2016 vs. | Jun 2016 vs. |
June 30 2016 |
June 30 2015 |
Jun 2016 vs. | ||||||||||||||||||||||||||||||
| Mar 2016 | Jun 2015 | Jun 2015 | |||||||||||||||||||||||||||||||||||
| Noninterest income GAAP | $ | 21,095 | $ | 19,155 | $ | 20,261 | 10.13 | % | 4.12 | % | $ | 40,250 | $ | 36,817 | 9.32 | % | |||||||||||||||||||||
| Less - gain on sale of fixed income securities | — | — | 798 | n/a | (100.00 | )% | — | 798 | (100.00 | )% | |||||||||||||||||||||||||||
| Total noninterest income as adjusted | $ | 21,095 | $ | 19,155 | $ | 19,463 | 10.13 | % | 8.39 | % | $ | 40,250 | $ | 36,019 | 11.75 | % | |||||||||||||||||||||
| Noninterest expense GAAP | $ | 47,146 | $ | 46,482 | $ | 48,644 | 1.43 | % | (3.08 | )% | $ | 93,628 | $ | 103,622 | (9.64 | )% | |||||||||||||||||||||
| Less - loss on extinguishment of debt | — | 437 | — | (100.00 | )% | n/a | 437 | 122 | 258.20 | % | |||||||||||||||||||||||||||
| Less - loss on sale of fixed income securities | — | — | 1,124 | n/a | (100.00 | )% | — | 1,124 | (100.00 | )% | |||||||||||||||||||||||||||
| Less - merger and acquisition expenses | 206 | 334 | 271 | (38.32 | )% | (23.99 | )% | 540 | 10,501 | (94.86 | )% | ||||||||||||||||||||||||||
| Less - impairment on acquired facilities | — | — | 109 | n/a | (100.00 | )% | — | 109 | (100.00 | )% | |||||||||||||||||||||||||||
| Total noninterest expense as adjusted | $ | 46,940 | $ | 45,711 | $ | 47,140 | 2.69 | % | (0.42 | )% | $ | 92,651 | $ | 91,766 | 0.96 | % | |||||||||||||||||||||
|
ASSET QUALITY |
|||||||||||||||
| Nonperforming Assets At | |||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
|||||||||||||
| Nonperforming loans | |||||||||||||||
| Commercial & industrial loans | $ | 3,177 | $ | 3,195 | $ | 3,767 | |||||||||
| Commercial real estate loans | 8,220 | 8,027 | 6,824 | ||||||||||||
| Small business loans | 349 | 189 | 198 | ||||||||||||
| Residential real estate loans | 7,116 | 7,510 | 8,086 | ||||||||||||
| Home equity | 6,684 | 6,508 | 7,238 | ||||||||||||
| Other consumer | 82 | 70 | 37 | ||||||||||||
| Total nonperforming loans | $ | 25,628 | $ | 25,499 | $ | 26,150 | |||||||||
| Other real estate owned | 1,845 | 1,720 | 5,124 | ||||||||||||
| Total nonperforming assets | $ | 27,473 | $ | 27,219 | $ | 31,274 | |||||||||
| Nonperforming loans/gross loans | 0.45 | % | 0.46 | % | 0.48 | % | |||||||||
| Nonperforming assets/total assets | 0.37 | % | 0.38 | % | 0.43 | % | |||||||||
| Allowance for loan losses/nonperforming loans | 225.25 | % | 221.31 | % | 210.31 | % | |||||||||
| Gross loans/total deposits | 91.55 | % | 93.23 | % | 91.03 | % | |||||||||
| Allowance for loan losses/total loans | 1.02 | % | 1.01 | % | 1.01 | % | |||||||||
| Nonperforming Assets Reconciliation for the Three Months Ended | |||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
|||||||||||||
| Nonperforming assets beginning balance | $ | 27,219 | $ | 29,849 | $ | 40,348 | |||||||||
| New to nonperforming | 3,943 | 3,159 | 4,326 | ||||||||||||
| Loans charged-off | (576 | ) | (537 | ) | (1,099 | ) | |||||||||
| Loans paid-off | (1,955 | ) | (3,694 | ) | (4,264 | ) | |||||||||
| Loans transferred to other real estate owned/other assets | (291 | ) | (86 | ) | (629 | ) | |||||||||
| Loans restored to performing status | (1,058 | ) | (1,104 | ) | (2,566 | ) | |||||||||
| New to other real estate owned | 291 | 86 | 941 | ||||||||||||
| Sale of other real estate owned | (45 | ) | (638 | ) | (2,153 | ) | |||||||||
| Net capital improvements to other real estate owned | 31 | 113 | 100 | ||||||||||||
| Net change in nonaccrual securities | — | — | (3,723 | ) | |||||||||||
| Other | (86 | ) | 71 | (7 | ) | ||||||||||
| Nonperforming assets ending balance | $ | 27,473 | $ | 27,219 | $ | 31,274 | |||||||||
| Net Charge-Offs (Recoveries) | |||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
June 30 2016 |
June 30 2015 |
|||||||||||||||||||||
| Net charge-offs (recoveries) | |||||||||||||||||||||||||
| Commercial and industrial loans | $ | (647 | ) | $ | (136 | ) | $ | (29 | ) | $ | (783 | ) | $ | 153 | |||||||||||
| Commercial real estate loans | (198 | ) | (189 | ) | (102 | ) | (387 | ) | (646 | ) | |||||||||||||||
| Small business loans | (43 | ) | 42 | (19 | ) | (1 | ) | 64 | |||||||||||||||||
| Residential real estate loans | (43 | ) | 19 | 16 | (24 | ) | 156 | ||||||||||||||||||
| Home equity | 164 | 120 | 217 | 284 | 306 | ||||||||||||||||||||
| Other consumer | 72 | 62 | 137 | 134 | 272 | ||||||||||||||||||||
| Total net charge-offs (recoveries) | $ | (695 | ) | $ | (82 | ) | $ | 220 | $ | (777 | ) | $ | 305 | ||||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | (0.05 | )% | (0.01 | )% | 0.02 | % | (0.03 | )% | 0.01 | % | |||||||||||||||
| Troubled Debt Restructurings At | |||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
|||||||||||||
| Troubled debt restructurings on accrual status | $ | 28,319 | $ | 32,182 | $ | 36,750 | |||||||||
| Troubled debt restructurings on nonaccrual status | 5,121 | 4,368 | 5,623 | ||||||||||||
| Total troubled debt restructurings | $ | 33,440 | $ | 36,550 | $ | 42,373 | |||||||||
| FINANCIAL RATIOS & CAPITAL ADEQUACY | |||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
|||||||||||||
| Book value per common share | $ | 30.55 | $ | 29.97 | $ | 28.42 | |||||||||
| Tangible book value per share | $ | 22.52 | $ | 21.90 | $ | 20.22 | |||||||||
| Tangible common capital/tangible assets | 8.22 | % | 8.25 | % | 7.58 | % | |||||||||
| Common equity tier 1 capital ratio (1) | 10.63 | % | 10.64 | % | 10.20 | % | |||||||||
| Tier one leverage capital ratio (1) | 9.65 | % | 9.53 | % | 9.21 | % | |||||||||
|
(1) Estimated number for June 30, 2016. |
|||||||||||||||
| A reconciliation of Independent Bank Corp's. total stockholders' equity to tangible book value per share is as follows: | |||||||||||||||
|
June 30 2016 |
March 31 2016 |
June 30 2015 |
|||||||||||||
| Tangible common equity | |||||||||||||||
|
Stockholders' equity GAAP |
$ | 803,897 | $ | 788,147 | $ | 743,317 | |||||||||
| Less: Goodwill and other intangibles | 211,526 | 212,218 | 214,331 | ||||||||||||
| Tangible common equity | 592,371 | 575,929 | 528,986 | ||||||||||||
| Tangible assets | |||||||||||||||
|
Assets GAAP |
7,418,866 | 7,189,268 | 7,195,318 | ||||||||||||
| Less: Goodwill and other intangibles | 211,526 | 212,218 | 214,331 | ||||||||||||
| Tangible assets | $ | 7,207,340 | $ | 6,977,050 | $ | 6,980,987 | |||||||||
| Common Shares | 26,309,887 | 26,293,565 | 26,158,826 | ||||||||||||
| Tangible common equity ratio (tangible common equity/ tangible assets) | 8.22 | % | 8.25 | % | 7.58 | % | |||||||||
| Tangible book value per share (tangible common equity/common shares) | $ | 22.52 | $ | 21.90 | $ | 20.22 | |||||||||
|
INDEPENDENT BANK CORP. SUPPLEMENTAL FINANCIAL INFORMATION |
||||||||||||||||||||||||||||||||||||
| (Unaudited - dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2016 | March 31, 2016 | June 30, 2015 | ||||||||||||||||||||||||||||||||||
| Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||
| Average | Earned/ | Yield/ | Average | Earned/ | Yield/ | Average | Earned/ | Yield/ | ||||||||||||||||||||||||||||
| Balance | Paid | Rate | Balance | Paid | Rate | Balance | Paid | Rate | ||||||||||||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||||||||||||||
|
Interest-earning deposits with banks, |
$ | 135,766 | $ | 169 | 0.50 | % | $ | 164,563 | $ | 211 | 0.52 | % | $ | 97,274 | $ | 60 | 0.25 | % | ||||||||||||||||||
| Securities | ||||||||||||||||||||||||||||||||||||
| Securities - trading | 775 | — | — | % | 420 | — | — | % | 500 | — | — | % | ||||||||||||||||||||||||
| Securities - taxable investments | 826,382 | 5,269 | 2.56 | % | 831,170 | 5,197 | 2.51 | % | 787,023 | 4,852 | 2.47 | % | ||||||||||||||||||||||||
| Securities - nontaxable investments (1) | 4,397 | 44 | 4.02 | % | 4,894 | 49 | 4.03 | % | 5,044 | 47 | 3.74 | % | ||||||||||||||||||||||||
| Total securities | 831,554 | 5,313 | 2.57 | % | 836,484 | 5,246 | 2.52 | % | 792,567 | 4,899 | 2.48 | % | ||||||||||||||||||||||||
| Loans held for sale | 8,077 | 57 | 2.84 | % | 4,246 | 32 | 3.03 | % | 9,726 | 58 | 2.39 | % | ||||||||||||||||||||||||
| Loans | ||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 853,783 | 8,367 | 3.94 | % | 831,349 | 7,972 | 3.86 | % | 860,242 | 8,499 | 3.96 | % | ||||||||||||||||||||||||
| Commercial real estate (1) | 2,726,249 | 27,847 | 4.11 | % | 2,659,591 | 26,770 | 4.05 | % | 2,613,347 | 26,762 | 4.11 | % | ||||||||||||||||||||||||
| Commercial construction | 358,256 | 3,676 | 4.13 | % | 379,860 | 3,819 | 4.04 | % | 291,658 | 3,204 | 4.41 | % | ||||||||||||||||||||||||
| Small business | 106,272 | 1,432 | 5.42 | % | 99,012 | 1,332 | 5.41 | % | 88,884 | 1,219 | 5.50 | % | ||||||||||||||||||||||||
| Total commercial | 4,044,560 | 41,322 | 4.11 | % | 3,969,812 | 39,893 | 4.04 | % | 3,854,131 | 39,684 | 4.13 | % | ||||||||||||||||||||||||
| Residential real estate | 628,855 | 6,224 | 3.98 | % | 633,590 | 6,381 | 4.05 | % | 666,325 | 6,750 | 4.06 | % | ||||||||||||||||||||||||
| Home equity | 942,515 | 8,178 | 3.49 | % | 930,579 | 8,031 | 3.47 | % | 885,618 | 7,541 | 3.42 | % | ||||||||||||||||||||||||
| Total consumer real estate | 1,571,370 | 14,402 | 3.69 | % | 1,564,169 | 14,412 | 3.71 | % | 1,551,943 | 14,291 | 3.69 | % | ||||||||||||||||||||||||
| Other consumer | 13,815 | 297 | 8.65 | % | 14,396 | 336 | 9.39 | % | 18,016 | 399 | 8.88 | % | ||||||||||||||||||||||||
| Total loans | 5,629,745 | 56,021 | 4.00 | % | 5,548,377 | 54,641 | 3.96 | % | 5,424,090 | 54,374 | 4.02 | % | ||||||||||||||||||||||||
| Total interest-earning assets | $ | 6,605,142 | $ | 61,560 | 3.75 | % | $ | 6,553,670 | $ | 60,130 | 3.69 | % | $ | 6,323,657 | $ | 59,391 | 3.77 | % | ||||||||||||||||||
| Cash and due from banks | 91,198 | 85,792 | 91,479 | |||||||||||||||||||||||||||||||||
| Federal Home Loan Bank stock | 13,935 | 13,599 | 37,485 | |||||||||||||||||||||||||||||||||
| Other assets | 539,511 | 534,946 | 524,645 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 7,249,786 | $ | 7,188,007 | $ | 6,977,266 | ||||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||||||||||
| Savings and interest checking accounts | $ | 2,395,837 | $ | 777 | 0.13 | % | $ | 2,354,982 | $ | 883 | 0.15 | % | $ | 2,232,790 | $ | 883 | 0.16 | % | ||||||||||||||||||
| Money market | 1,146,928 | 712 | 0.25 | % | 1,128,446 | 701 | 0.25 | % | 1,113,748 | 742 | 0.27 | % | ||||||||||||||||||||||||
| Time deposits | 647,274 | 1,249 | 0.78 | % | 670,393 | 1,284 | 0.77 | % | 730,825 | 1,297 | 0.71 | % | ||||||||||||||||||||||||
| Total interest-bearing deposits | 4,190,039 | 2,738 | 0.26 | % | 4,153,821 | 2,868 | 0.28 | % | 4,077,363 | 2,922 | 0.29 | % | ||||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank borrowings | 59,657 | 394 | 2.66 | % | 80,991 | 490 | 2.43 | % | 117,557 | 565 | 1.93 | % | ||||||||||||||||||||||||
|
Customer repurchase agreements |
140,252 | 48 | 0.14 | % | 140,863 | 49 | 0.14 | % | 125,495 | 50 | 0.16 | % | ||||||||||||||||||||||||
| Wholesale repurchase agreements | — | — | — | % | — | — | — | % | 50,000 | 298 | 2.39 | % | ||||||||||||||||||||||||
| Junior subordinated debentures | 73,231 | 1,019 | 5.60 | % | 73,283 | 1,016 | 5.58 | % | 73,433 | 1,003 | 5.48 | % | ||||||||||||||||||||||||
| Subordinated debentures | 34,607 | 428 | 4.97 | % | 34,594 | 427 | 4.96 | % | 34,577 | 431 | 5.00 | % | ||||||||||||||||||||||||
| Total borrowings | 307,747 | 1,889 | 2.47 | % | 329,731 | 1,982 | 2.42 | % | 401,062 | 2,347 | 2.34 | % | ||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 4,497,786 | $ | 4,627 | 0.41 | % | $ | 4,483,552 | $ | 4,850 | 0.44 | % | $ | 4,478,425 | $ | 5,269 | 0.47 | % | ||||||||||||||||||
| Demand deposits | 1,846,550 | 1,811,873 | 1,653,485 | |||||||||||||||||||||||||||||||||
| Other liabilities | 105,607 | 106,281 | 102,901 | |||||||||||||||||||||||||||||||||
| Total liabilities | $ | 6,449,943 | $ | 6,401,706 | $ | 6,234,811 | ||||||||||||||||||||||||||||||
| Stockholders' equity | 799,843 | 786,301 | 742,455 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 7,249,786 | $ | 7,188,007 | $ | 6,977,266 | ||||||||||||||||||||||||||||||
| Net interest income | $ | 56,933 | $ | 55,280 | $ | 54,122 | ||||||||||||||||||||||||||||||
| Interest rate spread (2) | 3.34 | % | 3.25 | % | 3.30 | % | ||||||||||||||||||||||||||||||
|
Net interest margin (3) |
3.47 | % | 3.39 | % | 3.43 | % | ||||||||||||||||||||||||||||||
|
Supplemental Information |
||||||||||||||||||||||||||||||||||||
| Total deposits, including demand deposits | $ | 6,036,589 | $ | 5,965,694 | $ | 2,868 | $ | 5,730,848 | $ | 2,922 | ||||||||||||||||||||||||||
| Cost of total deposits | $ | 2,738 | 0.18 | % | 0.19 | % | 0.20 | % | ||||||||||||||||||||||||||||
| Total funding liabilities, including demand deposits | $ | 6,344,336 | $ | 6,295,425 | $ | 4,850 | $ | 6,131,910 | $ | 5,269 | ||||||||||||||||||||||||||
| Cost of total funding liabilities | 4,627 | 0.29 | % | 0.31 | % | 0.34 | % | |||||||||||||||||||||||||||||
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $400,000, $389,000, and $375,000 for the three months ended June 30, 2016, March 31, 2016, and June 30, 2015, respectively.
(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
| Six Months Ended | ||||||||||||||||||||||||
| June 30, 2016 | June 30, 2015 | |||||||||||||||||||||||
| Interest | Interest | |||||||||||||||||||||||
| Average | Earned/ | Yield/ | Average | Earned/ | Yield/ | |||||||||||||||||||
| Balance | Paid | Rate | Balance | Paid | Rate | |||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||||||
|
Interest earning deposits with banks, |
$ | 150,165 | $ | 380 | 0.51 | % | $ | 73,120 | $ | 91 | 0.25 | % | ||||||||||||
| Securities | ||||||||||||||||||||||||
| Securities - trading | 597 | — | — | % | 340 | — | — | % | ||||||||||||||||
| Securities - taxable investments | 828,776 | 10,466 | 2.54 | % | 766,248 | 9,479 | 2.49 | % | ||||||||||||||||
| Securities - nontaxable investments (1) | 4,646 | 93 | 4.03 | % | 5,313 | 99 | 3.76 | % | ||||||||||||||||
| Total securities | 834,019 | 10,559 | 2.55 | % | 771,901 | 9,578 | 2.50 | % | ||||||||||||||||
| Loans held for sale | 6,161 | 89 | 2.91 | % | 8,670 | 109 | 2.54 | % | ||||||||||||||||
| Loans | ||||||||||||||||||||||||
| Commercial and industrial | 842,566 | 16,339 | 3.90 | % | 857,865 | 16,707 | 3.93 | % | ||||||||||||||||
| Commercial real estate (1) | 2,692,921 | 54,617 | 4.08 | % | 2,534,427 | 52,481 | 4.18 | % | ||||||||||||||||
| Commercial construction | 369,058 | 7,495 | 4.08 | % | 285,886 | 6,104 | 4.31 | % | ||||||||||||||||
| Small business | 102,642 | 2,764 | 5.42 | % | 87,698 | 2,391 | 5.50 | % | ||||||||||||||||
| Total commercial | 4,007,187 | 81,215 | 4.08 | % | 3,765,876 | 77,683 | 4.16 | % | ||||||||||||||||
| Residential real estate | 631,222 | 12,605 | 4.02 | % | 634,583 | 12,962 | 4.12 | % | ||||||||||||||||
| Home equity | 936,547 | 16,209 | 3.48 | % | 877,697 | 14,960 | 3.44 | % | ||||||||||||||||
| Total consumer real estate | 1,567,769 | 28,814 | 3.70 | % | 1,512,280 | 27,922 | 3.72 | % | ||||||||||||||||
| Other consumer | 14,105 | 633 | 9.02 | % | 17,955 | 811 | 9.11 | % | ||||||||||||||||
| Total loans | 5,589,061 | 110,662 | 3.98 | % | 5,296,111 | 106,416 | 4.05 | % | ||||||||||||||||
| Total interest-earning assets | $ | 6,579,406 | $ | 121,690 | 3.72 | % | $ | 6,149,802 | $ | 116,194 | 3.81 | % | ||||||||||||
| Cash and due from banks | 88,495 | 103,161 | ||||||||||||||||||||||
| Federal Home Loan Bank stock | 13,767 | 36,287 | ||||||||||||||||||||||
| Other assets | 537,229 | 509,141 | ||||||||||||||||||||||
| Total assets | $ | 7,218,897 | $ | 6,798,391 | ||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||
| Savings and interest checking accounts | $ | 2,375,409 | $ | 1,660 | 0.14 | % | $ | 2,183,690 | $ | 1,744 | 0.16 | % | ||||||||||||
| Money market | 1,137,687 | 1,413 | 0.25 | % | 1,081,788 | 1,418 | 0.26 | % | ||||||||||||||||
| Time deposits | 658,834 | 2,533 | 0.77 | % | 710,292 | 2,523 | 0.72 | % | ||||||||||||||||
| Total interest-bearing deposits | 4,171,930 | 5,606 | 0.27 | % | 3,975,770 | 5,685 | 0.29 | % | ||||||||||||||||
| Borrowings | ||||||||||||||||||||||||
| Federal Home Loan Bank borrowings | 70,325 | 884 | 2.53 | % | 107,632 | 1,066 | 2.00 | % | ||||||||||||||||
|
Customer repurchase agreements and other |
140,557 | 97 | 0.14 | % | 132,129 | 113 | 0.17 | % | ||||||||||||||||
| Wholesale repurchase agreements | — | — | — | % | 50,000 | 584 | 2.36 | % | ||||||||||||||||
| Junior subordinated debentures | 73,257 | 2,035 | 5.59 | % | 73,458 | 1,996 | 5.48 | % | ||||||||||||||||
| Subordinated debentures | 34,600 | 855 | 4.97 | % | 42,874 | 1,006 | 4.73 | % | ||||||||||||||||
| Total borrowings | 318,739 | 3,871 | 2.44 | % | 406,093 | 4,765 | 2.37 | % | ||||||||||||||||
| Total interest-bearing liabilities | $ | 4,490,669 | $ | 9,477 | 0.42 | % | $ | 4,381,863 | $ | 10,450 | 0.48 | % | ||||||||||||
| Demand deposits | 1,829,212 | 1,595,523 | ||||||||||||||||||||||
| Other liabilities | 105,944 | 105,862 | ||||||||||||||||||||||
| Total liabilities | $ | 6,425,825 | $ | 6,083,248 | ||||||||||||||||||||
| Stockholders' equity | 793,072 | 715,143 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 7,218,897 | $ | 6,798,391 | ||||||||||||||||||||
| Net interest income | $ | 112,213 | $ | 105,744 | ||||||||||||||||||||
| Interest rate spread (2) | 3.30 | % | 3.33 | % | ||||||||||||||||||||
| Net interest margin (3) | 3.43 | % | 3.47 | % | ||||||||||||||||||||
| Supplemental Information | ||||||||||||||||||||||||
| Total deposits, including demand deposits | $ | 6,001,142 | $ | 5,606 | $ | 5,571,293 | $ | 5,685 | ||||||||||||||||
| Cost of total deposits | 0.19 | % | 0.21 | % | ||||||||||||||||||||
| Total funding liabilities, including demand deposits | $ | 6,319,881 | $ | 9,477 | $ | 5,977,386 | $ | 10,450 | ||||||||||||||||
| Cost of total funding liabilities | 0.30 | % | 0.35 | % | ||||||||||||||||||||
(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $789,000 and $747,000 for the six months ended June 30, 2016 and 2015, respectively.
(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
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Certain amounts in prior year financial statement have been reclassified to conform to the current year's presentation. |