(NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the
“Company”), the parent company of Horizon Bank (the “Bank”),
announced its unaudited financial results for the three and nine
months ended September 30, 2024.
Net income for the three months ended
September 30, 2024 was $18.2 million, or $0.41 per diluted
share, compared to net income of $14.1 million, or $0.32, for the
second quarter of 2024 and compared to net income of $16.2 million,
or $0.37 per diluted share, for the third quarter of 2023.
Net income for the nine months ended
September 30, 2024 was $46.3 million, or $1.05 per diluted
share, compared to net income of $53.2 million, or $1.21, for the
nine months ended September 30, 2023.
Third Quarter 2024
Highlights
- Net interest income increased for
the fourth consecutive quarter to $46.9 million, compared to $45.3
million in the linked quarter of 2024. Net interest margin, on a
fully taxable equivalent ("FTE") basis1, expanded for the fourth
consecutive quarter to 2.66%, compared to 2.64% in the linked
quarter of 2024.
- Total loans held for investment
("HFI") were $4.8 billion at September 30, 2024, relatively
unchanged from June 30, 2024 balances. However, consistent
with the Company's stated growth strategy, the commercial portfolio
showed continued organic growth momentum during the quarter, which
was offset with planned run-off of lower-yielding indirect auto
loans in the consumer loan portfolio.
- Positive deposit growth of 1.7%
during the quarter, to $5.7 billion at period end. The quarter was
highlighted by stable non-interest bearing deposit balances and
growth in core relationship consumer and commercial
portfolios.
- Credit quality remains strong, with
annualized net charge offs of 0.03% of average loans during the
third quarter. Non-performing assets to total assets of 0.32%
remains well within expected ranges, with no material change in the
loss outlook. Provision for loan losses of $1.0 million reflects
continued positive credit performance.
“Horizon continues to execute well on its key
strategic initiatives of consistently improving our operating
performance through a more productive balance sheet, growth in
non-interest income and continued disciplined in our operating
model. As a result, we are optimistic on the positive momentum of
the franchise through year-end 2024 and into 2025. During the
quarter, our commercial team was able to deliver another quarter of
quality loan growth, even coming off a strong end to the second
quarter. The strength of Horizon's core deposit franchise showed
solid performance, and our credit metrics remain well managed.
These efforts led to a third consecutive quarter of sequential
growth in pre-tax pre-provision income," President and Chief
Executive Officer Thomas M. Prame said. "Importantly, we continue
our efforts to optimize our business model, and are pleased to
announce the repositioning of a portion of our securities portfolio
and the intended sale of our mortgage warehouse business during the
fourth quarter. These shareholder accretive actions are expected to
yield sustainable improvement in the profitability of our business
that will be evident in the fourth quarter, and positively impact
Horizon's financial performance in 2025."
_________________________1 Non-GAAP financial
metric. See non-GAAP reconciliation included herein for the most
directly comparable GAAP measure.
Accretive Fourth Quarter 2024 Strategic
Actions
Horizon announced strategic actions taking place
in the fourth quarter of 2024, which are designed to simplify its
business, strengthen the balance sheet and improve long-term
structural profitability. In October, the Company completed the
repositioning of about $325 million of available-for-sale
securities. Additionally, the Company has signed a letter of intent
to sell its mortgage warehouse business, which is expected to
generate a gain-on-sale. Details on these actions, the use of
proceeds, and the expected financial impact are available in the
Company's third quarter 2024 investor presentation published at
investor.horizonbank.com.
|
Financial Highlights |
(Dollars in Thousands Except Share and Per Share Data and Ratios,
Unaudited) |
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Income statement: |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
46,910 |
|
|
$ |
45,279 |
|
|
$ |
43,288 |
|
|
$ |
42,257 |
|
|
$ |
42,090 |
|
Credit loss expense |
|
1,044 |
|
|
|
2,369 |
|
|
|
805 |
|
|
|
1,274 |
|
|
|
263 |
|
Non-interest income |
|
11,511 |
|
|
|
10,485 |
|
|
|
9,929 |
|
|
|
(20,449 |
) |
|
|
11,830 |
|
Non-interest expense |
|
39,272 |
|
|
|
37,522 |
|
|
|
37,107 |
|
|
|
39,330 |
|
|
|
36,168 |
|
Income tax expense |
|
(75 |
) |
|
|
1,733 |
|
|
|
1,314 |
|
|
|
6,419 |
|
|
|
1,284 |
|
Net income |
$ |
18,180 |
|
|
$ |
14,140 |
|
|
$ |
13,991 |
|
|
$ |
(25,215 |
) |
|
$ |
16,205 |
|
|
|
|
|
|
|
|
|
|
|
Per share data: |
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.42 |
|
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
(0.58 |
) |
|
$ |
0.37 |
|
Diluted earnings per share |
|
0.41 |
|
|
|
0.32 |
|
|
|
0.32 |
|
|
|
(0.58 |
) |
|
|
0.37 |
|
Cash dividends declared per common share |
|
0.16 |
|
|
|
0.16 |
|
|
|
0.16 |
|
|
|
0.16 |
|
|
|
0.16 |
|
Book value per common share |
|
17.27 |
|
|
|
16.62 |
|
|
|
16.49 |
|
|
|
16.47 |
|
|
|
15.89 |
|
Market value - high |
|
16.57 |
|
|
|
12.74 |
|
|
|
14.44 |
|
|
|
14.65 |
|
|
|
12.68 |
|
Market value - low |
|
11.89 |
|
|
|
11.29 |
|
|
|
11.75 |
|
|
|
9.33 |
|
|
|
9.90 |
|
Weighted average shares outstanding - Basic |
|
43,712,059 |
|
|
|
43,712,059 |
|
|
|
43,663,610 |
|
|
|
43,649,585 |
|
|
|
43,646,609 |
|
Weighted average shares outstanding - Diluted |
|
44,112,321 |
|
|
|
43,987,187 |
|
|
|
43,874,036 |
|
|
|
43,649,585 |
|
|
|
43,796,069 |
|
Common shares outstanding (end of period) |
|
43,712,059 |
|
|
|
43,712,059 |
|
|
|
43,726,380 |
|
|
|
43,652,063 |
|
|
|
43,648,501 |
|
|
|
|
|
|
|
|
|
|
|
Key ratios: |
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.92 |
% |
|
|
0.73 |
% |
|
|
0.72 |
% |
|
(1.27) % |
|
|
0.81 |
% |
Return on average stockholders' equity |
|
9.80 |
|
|
|
7.83 |
|
|
|
7.76 |
|
|
|
(14.23 |
) |
|
|
8.99 |
|
Total equity to total assets |
|
9.52 |
|
|
|
9.18 |
|
|
|
9.18 |
|
|
|
9.06 |
|
|
|
8.71 |
|
Total loans to deposit ratio |
|
83.92 |
|
|
|
85.70 |
|
|
|
82.78 |
|
|
|
78.01 |
|
|
|
76.52 |
|
Allowance for credit losses to HFI loans |
|
1.10 |
|
|
|
1.08 |
|
|
|
1.09 |
|
|
|
1.13 |
|
|
|
1.14 |
|
Annualized net charge-offs of average total loans(1) |
|
0.03 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.07 |
|
|
|
0.07 |
|
Efficiency ratio |
|
67.22 |
|
|
|
67.29 |
|
|
|
69.73 |
|
|
|
180.35 |
|
|
|
67.08 |
|
|
|
|
|
|
|
|
|
|
|
Key metrics (Non-GAAP)(2)
: |
|
|
|
|
|
|
|
|
|
Net FTE interest margin |
|
2.66 |
% |
|
|
2.64 |
% |
|
|
2.50 |
% |
|
|
2.43 |
% |
|
|
2.41 |
% |
Return on average tangible common equity |
|
12.65 |
|
|
|
10.18 |
|
|
|
10.11 |
|
|
|
(18.76 |
) |
|
|
11.79 |
|
Tangible common equity to tangible assets |
|
7.58 |
|
|
|
7.22 |
|
|
|
7.20 |
|
|
|
7.08 |
|
|
|
6.72 |
|
Tangible book value per common share |
$ |
13.46 |
|
|
$ |
12.80 |
|
|
$ |
12.65 |
|
|
$ |
12.60 |
|
|
$ |
12.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average total loans includes loans held for investment and held
for sale. |
(2) Non-GAAP financial metrics. See non-GAAP reconciliation
included herein for the most directly comparable GAAP
measures. |
|
Income Statement Highlights
Net Interest Income
Net interest income was $46.9 million in the
third quarter of 2024, compared to $45.3 million in the second
quarter of 2024, driven by net growth in average interest earning
assets of $117.5 million and continued net FTE interest margin
expansion during the quarter. Horizon’s net FTE interest margin1
was 2.66% for the third quarter of 2024, compared to 2.64% for the
second quarter of 2024, attributable to the favorable mix shift in
average interest earning assets toward higher-yielding loans and in
the average funding mix toward lower-cost deposit balances.
Interest accretion from the fair value of acquired loans did not
contribute significantly to the third quarter net interest income,
or net FTE interest margin.
Provision for Credit Losses
During the third quarter of 2024, the Company
recorded a provision for credit losses of $1.0 million. This
compares to a provision for credit losses of $2.4 million during
the second quarter of 2024, and $0.3 million during the third
quarter of 2023. The decrease in the provision for credit losses
during the third quarter of 2024 when compared with the second
quarter of 2024 was primarily attributable to less total loan
growth in the current quarter relative to the prior quarter.
For the third quarter of 2024, the allowance for
credit losses included net charge-offs of $0.4 million, or an
annualized 0.03% of average loans outstanding, compared to net
charge-offs of $0.6 million, or an annualized 0.05% of average
loans outstanding for the second quarter of 2024, and net
charge-offs of $0.7 million, or an annualized 0.07% of average
loans outstanding, in the third quarter of 2023.
The Company’s allowance for credit losses as a
percentage of period-end loans HFI was 1.10% at September 30,
2024, compared to 1.08% at June 30, 2024 and 1.14% at
September 30, 2023.
Non-Interest Income
For the Quarter Ended |
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(Dollars in Thousands) |
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Non-interest Income |
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
$ |
3,320 |
|
|
$ |
3,130 |
|
|
$ |
3,214 |
|
|
$ |
3,092 |
|
|
$ |
3,086 |
|
Wire transfer fees |
|
123 |
|
|
|
113 |
|
|
|
101 |
|
|
|
103 |
|
|
|
120 |
|
Interchange fees |
|
3,511 |
|
|
|
3,826 |
|
|
|
3,109 |
|
|
|
3,224 |
|
|
|
3,186 |
|
Fiduciary activities |
|
1,394 |
|
|
|
1,372 |
|
|
|
1,315 |
|
|
|
1,352 |
|
|
|
1,206 |
|
Gains (losses) on sale of investment securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(31,572 |
) |
|
|
— |
|
Gain on sale of mortgage loans |
|
1,622 |
|
|
|
896 |
|
|
|
626 |
|
|
|
951 |
|
|
|
1,582 |
|
Mortgage servicing income net of impairment |
|
412 |
|
|
|
450 |
|
|
|
439 |
|
|
|
724 |
|
|
|
631 |
|
Increase in cash value of bank owned life insurance |
|
349 |
|
|
|
318 |
|
|
|
298 |
|
|
|
658 |
|
|
|
1,055 |
|
Other income |
|
780 |
|
|
|
380 |
|
|
|
827 |
|
|
|
1,019 |
|
|
|
964 |
|
Total non-interest income |
$ |
11,511 |
|
|
$ |
10,485 |
|
|
$ |
9,929 |
|
|
$ |
(20,449 |
) |
|
$ |
11,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest income was $11.5 million in
the third quarter of 2024, compared to $10.5 million in the second
quarter of 2024, due primarily to higher realized gains on sale of
mortgage loans and increased other income.
_________________________1 Non-GAAP financial
metric. See non-GAAP reconciliation included herein for the most
directly comparable GAAP measure.
Non-Interest Expense
For the Quarter Ended |
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(Dollars in Thousands) |
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Non-interest Expense |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
$ |
21,829 |
|
|
$ |
20,583 |
|
|
$ |
20,268 |
|
|
$ |
21,877 |
|
|
$ |
20,058 |
|
Net occupancy expenses |
|
3,207 |
|
|
|
3,192 |
|
|
|
3,546 |
|
|
|
3,260 |
|
|
|
3,283 |
|
Data processing |
|
2,977 |
|
|
|
2,579 |
|
|
|
2,464 |
|
|
|
2,942 |
|
|
|
2,999 |
|
Professional fees |
|
676 |
|
|
|
714 |
|
|
|
607 |
|
|
|
772 |
|
|
|
707 |
|
Outside services and consultants |
|
3,677 |
|
|
|
3,058 |
|
|
|
3,359 |
|
|
|
2,394 |
|
|
|
2,316 |
|
Loan expense |
|
1,034 |
|
|
|
1,038 |
|
|
|
719 |
|
|
|
1,345 |
|
|
|
1,120 |
|
FDIC insurance expense |
|
1,204 |
|
|
|
1,315 |
|
|
|
1,320 |
|
|
|
1,200 |
|
|
|
1,300 |
|
Core deposit intangible amortization |
|
844 |
|
|
|
844 |
|
|
|
872 |
|
|
|
903 |
|
|
|
903 |
|
Other losses |
|
297 |
|
|
|
515 |
|
|
|
16 |
|
|
|
508 |
|
|
|
188 |
|
Other expense |
|
3,527 |
|
|
|
3,684 |
|
|
|
3,936 |
|
|
|
4,129 |
|
|
|
3,294 |
|
Total non-interest expense |
$ |
39,272 |
|
|
$ |
37,522 |
|
|
$ |
37,107 |
|
|
$ |
39,330 |
|
|
$ |
36,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest expense was $39.3 million in
the third quarter of 2024, compared with $37.5 million in the
second quarter of 2024. The increase in non-interest expense during
the third quarter of 2024 was primarily driven by a $1.2 million
increase in salaries and employee benefits expense, which is
partially attributable to a legacy benefits program expense, and a
$0.6 million increase in outside services and consultants expense
related to strategic initiatives.
Income Taxes
Horizon's effective tax rate was -0.4% for the
third quarter of 2024, as compared to 10.9% for the second quarter
of 2024. The decrease in the effective tax rate during the third
quarter was primarily due to an increase in net realizable tax
credits for the current year, which reduced the Company's estimated
annual effective tax rate.
Balance Sheet
Total assets increased by $14.9 million, or
0.2%, to $7.93 billion as of September 30, 2024, from $7.91
billion as of June 30, 2024. The increase in total assets is
primarily due to increases in federal funds sold of $79.5 million,
or 230.6%, to $113.9 million as of September 30, 2024,
compared to $34.5 million as of June 30, 2024. The increase in
federal funds sold during the period was partially offset by a
decrease in other assets of $46.6 million, or 28.1%, to $119.0
million as of September 30, 2024, from $165.7 million as of
June 30, 2024.
Total investment securities remained unchanged,
at $2.4 billion as of September 30, 2024, compared to
June 30, 2024, as the positive market impact to available for
sale securities was offset by normal pay-downs and maturities.
There were no purchases of investment securities during the third
quarter of 2024.
Total loans HFI and loans held for sale were
relatively consistent at $4.8 billion as of September 30, 2024
compared to $4.8 billion as of June 30, 2024, as growth in
commercial loans of $9.5 million were offset by a decline in
consumer loans of $43.3 million.
Total deposit balances increased by $96.9
million, or 1.7%, to $5.7 billion as of September 30, 2024
when compared to balances as of June 30, 2024. Non-interest
bearing deposit balances were essentially unchanged during the
quarter.
Total borrowings decreased by $86.4 million, or
7.0%, to $1.1 billion as of September 30, 2024, primarily
related to the repayment of a portion of Federal Home Loan Bank
advances, when compared to balances as of June 30, 2024.
Capital
The following table presents the consolidated
regulatory capital ratios of the Company for the previous three
quarters:
For the Quarter Ended |
September 30, |
|
June 30, |
|
March 31, |
December 31, |
|
2024* |
|
2024 |
|
2024** |
2023** |
Consolidated Capital Ratios |
|
|
|
|
|
|
Total capital (to risk-weighted assets) |
|
13.52 |
% |
|
|
13.41 |
% |
|
|
13.75 |
% |
|
14.04 |
% |
Tier 1 capital (to risk-weighted assets) |
|
11.70 |
% |
|
|
11.59 |
% |
|
|
11.89 |
% |
|
12.13 |
% |
Common equity tier 1 capital (to risk-weighted assets) |
|
10.74 |
% |
|
|
10.63 |
% |
|
|
10.89 |
% |
|
11.11 |
% |
Tier 1 capital (to average assets) |
|
9.01 |
% |
|
|
9.02 |
% |
|
|
8.91 |
% |
|
8.61 |
% |
*Preliminary estimate - may be subject to change |
|
**Prior periods were previously revised (see disclosure in Form
10-Q for the quarterly period ending June 30, 2024) |
|
|
|
As of September 30, 2024, the ratio of
total stockholders’ equity to total assets is 9.52%. Book value per
common share was $17.27, increasing $0.65 during the third quarter
of 2024.
Tangible common equity1 totaled $588.5
million at September 30, 2024, and the ratio of tangible
common equity to tangible assets1 was 7.58% at September 30,
2024, up from 7.22% at June 30, 2024. Tangible book value,
which excludes intangible assets from total equity, per common
share1 was $13.46, increasing $0.66 during the third quarter of
2024.
Credit Quality
As of September 30, 2024, total non-accrual
loans increased by $5.3 million, or 29.0%, from June 30, 2024,
to 0.49% of total loans HFI. Total non-performing assets increased
$5.1 million, or 25.0%, to $25.6 million, compared to $20.5 million
as of June 30, 2024. The ratio of non-performing assets to
total assets increased to 0.32% compared to 0.26% as of
June 30, 2024.
As of September 30, 2024, net charge-offs
decreased by $0.2 million to $0.4 million, compared to $0.6 million
as of June 30, 2024 and remain just 0.03% annualized of
average loans.
_________________________1 Non-GAAP financial
metric. See non-GAAP reconciliation included herein for the most
directly comparable GAAP measure.
Earnings Conference Call
As previously announced, Horizon will host a
conference call to review its third quarter financial results and
operating performance.
Participants may access the live conference call
on October 24, 2024 at 7:30 a.m. CT (8:30 a.m. ET) by dialing
833-974-2379 from the United States, 866-450-4696 from Canada or
1-412-317-5772 from international locations and requesting the
“Horizon Bancorp Call.” Participants are asked to dial in
approximately 10 minutes prior to the call.
A telephone replay of the call will be available
approximately one hour after the end of the conference through
November 1, 2024. The replay may be accessed by dialing
877-344-7529 from the United States, 855-669-9658 from Canada or
1–412–317-0088 from other international locations, and entering the
access code 9847279.
About Horizon Bancorp, Inc.
Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the
$7.9 billion-asset commercial bank holding company for Horizon
Bank, which serves customers across diverse and economically
attractive Midwestern markets through convenient digital and
virtual tools, as well as its Indiana and Michigan branches.
Horizon's retail offerings include prime residential and other
secured consumer lending to in-market customers, as well as a range
of personal banking and wealth management solutions. Horizon also
provides a comprehensive array of in-market business banking and
treasury management services, as well as equipment financing
solutions for customers regionally and nationally, with commercial
lending representing over half of total loans. More information on
Horizon, headquartered in Northwest Indiana's Michigan City, is
available at horizonbank.com and investor.horizonbank.com.
Use of Non-GAAP Financial
Measures
Certain information set forth in this press
release refers to financial measures determined by methods other
than in accordance with GAAP. Specifically, we have included
non-GAAP financial measures relating to net income, diluted
earnings per share, pre-tax, pre-provision net income, net interest
margin, tangible stockholders’ equity and tangible book value per
share, efficiency ratio, the return on average assets, the return
on average common equity, and return on average tangible equity. In
each case, we have identified special circumstances that we
consider to be non-recurring and have excluded them. We believe
that this shows the impact of such events as acquisition-related
purchase accounting adjustments and swap termination fees, among
others we have identified in our reconciliations. Horizon believes
these non-GAAP financial measures are helpful to investors and
provide a greater understanding of our business and financial
results without giving effect to the purchase accounting impacts
and one-time costs of acquisitions and non–recurring items. These
measures are not necessarily comparable to similar measures that
may be presented by other companies and should not be considered in
isolation or as a substitute for the related GAAP measure. See the
tables and other information below and contained elsewhere in this
press release for reconciliations of the non-GAAP information
identified herein and its most comparable GAAP measures.
Forward Looking Statements
This press release may contain forward–looking
statements regarding the financial performance, business prospects,
growth and operating strategies of Horizon Bancorp, Inc. and its
affiliates (collectively, “Horizon”). For these statements, Horizon
claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. Statements in this press release should be considered
in conjunction with the other information available about Horizon,
including the information in the filings we make with the
Securities and Exchange Commission (the “SEC”). Forward-looking
statements provide current expectations or forecasts of future
events and are not guarantees of future performance. The
forward-looking statements are based on management’s expectations
and are subject to a number of risks and uncertainties. We have
tried, wherever possible, to identify such statements by using
words such as “anticipate,” “estimate,” “project,” “intend,”
“plan,” “believe,” “will” and similar expressions in connection
with any discussion of future operating or financial
performance.
Although management believes that the
expectations reflected in such forward-looking statements are
reasonable, actual results may differ materially from those
expressed or implied in such statements. Risks and uncertainties
that could cause actual results to differ materially include:
current financial conditions within the banking industry; changes
in the level and volatility of interest rates, changes in spreads
on earning assets and changes in interest bearing liabilities;
increased interest rate sensitivity; the aggregate effects of
elevated inflation levels in recent years; loss of key Horizon
personnel; increases in disintermediation; potential loss of fee
income, including interchange fees, as new and emerging alternative
payment platforms take a greater market share of the payment
systems; estimates of fair value of certain of Horizon’s assets and
liabilities; changes in prepayment speeds, loan originations,
credit losses, market values, collateral securing loans and other
assets; changes in sources of liquidity; macroeconomic conditions
and their impact on Horizon and its customers; legislative and
regulatory actions and reforms; changes in accounting policies or
procedures as may be adopted and required by regulatory agencies;
litigation, regulatory enforcement, and legal compliance risk and
costs; rapid technological developments and changes; cyber
terrorism and data security breaches; the rising costs of
cybersecurity; the ability of the U.S. federal government to manage
federal debt limits; climate change and social justice initiatives;
the inability to realize cost savings or revenues or to effectively
implement integration plans and other consequences associated with
mergers, acquisitions, and divestitures; acts of terrorism, war and
global conflicts, such as the Russia and Ukraine conflict and the
Israel and Hamas conflict; and supply chain disruptions and delays.
These and additional factors that could cause actual results to
differ materially from those expressed in the forward-looking
statements are discussed in Horizon’s reports (such as the Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current
Reports on Form 8-K) filed with the SEC and available at the SEC’s
website (www.sec.gov). Undue reliance should not be placed on the
forward–looking statements, which speak only as of the date hereof.
Horizon does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions that
may be made to update any forward-looking statement to reflect the
events or circumstances after the date on which the forward–looking
statement is made, or reflect the occurrence of unanticipated
events, except to the extent required by law.
|
|
|
Condensed Consolidated Statements of Income |
|
(Dollars in Thousands Except Per Share Data, Unaudited) |
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2024 |
|
2023 |
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable |
$ |
75,488 |
|
|
$ |
71,880 |
|
|
$ |
66,954 |
|
|
$ |
65,583 |
|
|
$ |
63,003 |
|
|
$ |
214,322 |
|
|
$ |
178,961 |
|
Investment securities - taxable |
|
8,133 |
|
|
|
7,986 |
|
|
|
7,362 |
|
|
|
8,157 |
|
|
|
8,788 |
|
|
|
23,481 |
|
|
|
26,253 |
|
Investment securities - tax-exempt |
|
6,310 |
|
|
|
6,377 |
|
|
|
6,451 |
|
|
|
6,767 |
|
|
|
7,002 |
|
|
|
19,138 |
|
|
|
21,617 |
|
Other |
|
957 |
|
|
|
738 |
|
|
|
4,497 |
|
|
|
3,007 |
|
|
|
1,332 |
|
|
|
6,192 |
|
|
|
1,960 |
|
Total interest income |
|
90,888 |
|
|
|
86,981 |
|
|
|
85,264 |
|
|
|
83,514 |
|
|
|
80,125 |
|
|
|
263,133 |
|
|
|
228,791 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
30,787 |
|
|
|
28,447 |
|
|
|
27,990 |
|
|
|
27,376 |
|
|
|
24,704 |
|
|
|
87,224 |
|
|
|
58,481 |
|
Borrowed funds |
|
11,131 |
|
|
|
11,213 |
|
|
|
11,930 |
|
|
|
11,765 |
|
|
|
11,224 |
|
|
|
34,274 |
|
|
|
30,713 |
|
Subordinated notes |
|
830 |
|
|
|
829 |
|
|
|
831 |
|
|
|
870 |
|
|
|
880 |
|
|
|
2,490 |
|
|
|
2,641 |
|
Junior subordinated debentures issued to capital trusts |
|
1,230 |
|
|
|
1,213 |
|
|
|
1,225 |
|
|
|
1,246 |
|
|
|
1,227 |
|
|
|
3,668 |
|
|
|
3,469 |
|
Total interest expense |
|
43,978 |
|
|
|
41,702 |
|
|
|
41,976 |
|
|
|
41,257 |
|
|
|
38,035 |
|
|
|
127,656 |
|
|
|
95,304 |
|
Net Interest Income |
|
46,910 |
|
|
|
45,279 |
|
|
|
43,288 |
|
|
|
42,257 |
|
|
|
42,090 |
|
|
|
135,477 |
|
|
|
133,487 |
|
Provision for loan losses |
|
1,044 |
|
|
|
2,369 |
|
|
|
805 |
|
|
|
1,274 |
|
|
|
263 |
|
|
|
4,218 |
|
|
|
1,185 |
|
Net Interest Income after Provision for Loan
Losses |
|
45,866 |
|
|
|
42,910 |
|
|
|
42,483 |
|
|
|
40,983 |
|
|
|
41,827 |
|
|
|
131,259 |
|
|
|
132,302 |
|
Non-interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
3,320 |
|
|
|
3,130 |
|
|
|
3,214 |
|
|
|
3,092 |
|
|
|
3,086 |
|
|
|
9,664 |
|
|
|
9,135 |
|
Wire transfer fees |
|
123 |
|
|
|
113 |
|
|
|
101 |
|
|
|
103 |
|
|
|
120 |
|
|
|
337 |
|
|
|
345 |
|
Interchange fees |
|
3,511 |
|
|
|
3,826 |
|
|
|
3,109 |
|
|
|
3,224 |
|
|
|
3,186 |
|
|
|
10,446 |
|
|
|
9,637 |
|
Fiduciary activities |
|
1,394 |
|
|
|
1,372 |
|
|
|
1,315 |
|
|
|
1,352 |
|
|
|
1,206 |
|
|
|
4,081 |
|
|
|
3,728 |
|
Gains (losses) on sale of investment securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(31,572 |
) |
|
|
— |
|
|
|
— |
|
|
|
(480 |
) |
Gain on sale of mortgage loans |
|
1,622 |
|
|
|
896 |
|
|
|
626 |
|
|
|
951 |
|
|
|
1,582 |
|
|
|
3,144 |
|
|
|
3,372 |
|
Mortgage servicing income net of impairment |
|
412 |
|
|
|
450 |
|
|
|
439 |
|
|
|
724 |
|
|
|
631 |
|
|
|
1,301 |
|
|
|
1,984 |
|
Increase in cash value of bank owned life insurance |
|
349 |
|
|
|
318 |
|
|
|
298 |
|
|
|
658 |
|
|
|
1,055 |
|
|
|
965 |
|
|
|
3,051 |
|
Other income |
|
780 |
|
|
|
380 |
|
|
|
827 |
|
|
|
1,019 |
|
|
|
964 |
|
|
|
1,987 |
|
|
|
1,675 |
|
Total non-interest income |
|
11,511 |
|
|
|
10,485 |
|
|
|
9,929 |
|
|
|
(20,449 |
) |
|
|
11,830 |
|
|
|
31,925 |
|
|
|
32,447 |
|
Non-interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
21,829 |
|
|
|
20,583 |
|
|
|
20,268 |
|
|
|
21,877 |
|
|
|
20,058 |
|
|
|
62,680 |
|
|
|
58,932 |
|
Net occupancy expenses |
|
3,207 |
|
|
|
3,192 |
|
|
|
3,546 |
|
|
|
3,260 |
|
|
|
3,283 |
|
|
|
9,945 |
|
|
|
10,095 |
|
Data processing |
|
2,977 |
|
|
|
2,579 |
|
|
|
2,464 |
|
|
|
2,942 |
|
|
|
2,999 |
|
|
|
8,020 |
|
|
|
8,684 |
|
Professional fees |
|
676 |
|
|
|
714 |
|
|
|
607 |
|
|
|
772 |
|
|
|
707 |
|
|
|
1,997 |
|
|
|
1,873 |
|
Outside services and consultants |
|
3,677 |
|
|
|
3,058 |
|
|
|
3,359 |
|
|
|
2,394 |
|
|
|
2,316 |
|
|
|
10,094 |
|
|
|
7,548 |
|
Loan expense |
|
1,034 |
|
|
|
1,038 |
|
|
|
719 |
|
|
|
1,345 |
|
|
|
1,120 |
|
|
|
2,791 |
|
|
|
3,635 |
|
FDIC insurance expense |
|
1,204 |
|
|
|
1,315 |
|
|
|
1,320 |
|
|
|
1,200 |
|
|
|
1,300 |
|
|
|
3,839 |
|
|
|
2,680 |
|
Core deposit intangible amortization |
|
844 |
|
|
|
844 |
|
|
|
872 |
|
|
|
903 |
|
|
|
903 |
|
|
|
2,560 |
|
|
|
2,709 |
|
Other losses |
|
297 |
|
|
|
515 |
|
|
|
16 |
|
|
|
508 |
|
|
|
188 |
|
|
|
828 |
|
|
|
543 |
|
Other expense |
|
3,527 |
|
|
|
3,684 |
|
|
|
3,936 |
|
|
|
4,129 |
|
|
|
3,294 |
|
|
|
11,147 |
|
|
|
10,255 |
|
Total non-interest expense |
|
39,272 |
|
|
|
37,522 |
|
|
|
37,107 |
|
|
|
39,330 |
|
|
|
36,168 |
|
|
|
113,901 |
|
|
|
106,954 |
|
Income /(Loss) Before Income Taxes |
|
18,105 |
|
|
|
15,873 |
|
|
|
15,305 |
|
|
|
(18,796 |
) |
|
|
17,489 |
|
|
|
49,283 |
|
|
|
57,795 |
|
Income tax expense |
|
(75 |
) |
|
|
1,733 |
|
|
|
1,314 |
|
|
|
6,419 |
|
|
|
1,284 |
|
|
|
2,972 |
|
|
|
4,599 |
|
Net Income /(Loss) |
$ |
18,180 |
|
|
$ |
14,140 |
|
|
$ |
13,991 |
|
|
$ |
(25,215 |
) |
|
$ |
16,205 |
|
|
$ |
46,311 |
|
|
$ |
53,196 |
|
Basic Earnings /(Loss) Per Share |
$ |
0.42 |
|
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
(0.58 |
) |
|
$ |
0.37 |
|
|
$ |
1.06 |
|
|
$ |
1.22 |
|
Diluted Earnings/(Loss) Per Share |
|
0.41 |
|
|
|
0.32 |
|
|
|
0.32 |
|
|
|
(0.58 |
) |
|
|
0.37 |
|
|
|
1.05 |
|
|
|
1.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
|
(Dollars in Thousands) |
|
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
Assets |
|
|
|
|
|
|
|
|
|
Interest earning assets |
|
|
|
|
|
|
|
|
|
Federal funds sold |
$ |
113,912 |
|
|
$ |
34,453 |
|
|
$ |
161,704 |
|
|
$ |
401,672 |
|
|
$ |
71,576 |
|
Interest earning deposits |
|
12,107 |
|
|
|
4,957 |
|
|
|
9,178 |
|
|
|
12,071 |
|
|
|
4,718 |
|
Interest earning time deposits |
|
735 |
|
|
|
1,715 |
|
|
|
1,715 |
|
|
|
2,205 |
|
|
|
2,207 |
|
Federal Home Loan Bank stock |
|
53,826 |
|
|
|
53,826 |
|
|
|
53,826 |
|
|
|
34,509 |
|
|
|
34,509 |
|
Investment securities, available for sale |
|
541,170 |
|
|
|
527,054 |
|
|
|
535,319 |
|
|
|
547,251 |
|
|
|
865,168 |
|
Investment securities, held to maturity |
|
1,888,379 |
|
|
|
1,904,281 |
|
|
|
1,925,725 |
|
|
|
1,945,638 |
|
|
|
1,966,483 |
|
Loans held for sale |
|
2,069 |
|
|
|
2,440 |
|
|
|
922 |
|
|
|
1,418 |
|
|
|
2,828 |
|
Gross loans held for investment (HFI) |
|
4,803,996 |
|
|
|
4,822,840 |
|
|
|
4,618,175 |
|
|
|
4,417,630 |
|
|
|
4,359,002 |
|
Total Interest earning assets |
|
7,416,194 |
|
|
|
7,351,566 |
|
|
|
7,306,564 |
|
|
|
7,362,394 |
|
|
|
7,306,491 |
|
Non-interest earning assets |
|
|
|
|
|
|
|
|
|
Allowance for credit losses |
|
(52,881 |
) |
|
|
(52,215 |
) |
|
|
(50,387 |
) |
|
|
(50,029 |
) |
|
|
(49,699 |
) |
Cash |
|
108,815 |
|
|
|
106,691 |
|
|
|
100,206 |
|
|
|
112,772 |
|
|
|
98,843 |
|
Cash value of life insurance |
|
37,115 |
|
|
|
36,773 |
|
|
|
36,455 |
|
|
|
36,157 |
|
|
|
149,212 |
|
Other assets |
|
119,026 |
|
|
|
165,656 |
|
|
|
160,593 |
|
|
|
177,061 |
|
|
|
152,280 |
|
Goodwill |
|
155,211 |
|
|
|
155,211 |
|
|
|
155,211 |
|
|
|
155,211 |
|
|
|
155,211 |
|
Other intangible assets |
|
11,067 |
|
|
|
11,910 |
|
|
|
12,754 |
|
|
|
13,626 |
|
|
|
14,530 |
|
Premises and equipment, net |
|
93,544 |
|
|
|
93,695 |
|
|
|
94,303 |
|
|
|
94,583 |
|
|
|
94,716 |
|
Interest receivable |
|
39,366 |
|
|
|
43,240 |
|
|
|
40,008 |
|
|
|
38,710 |
|
|
|
37,850 |
|
Total non-interest earning assets |
|
511,263 |
|
|
|
560,961 |
|
|
|
549,143 |
|
|
|
578,091 |
|
|
|
652,943 |
|
Total assets |
$ |
7,927,457 |
|
|
$ |
7,912,527 |
|
|
$ |
7,855,707 |
|
|
$ |
7,940,485 |
|
|
$ |
7,959,434 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Savings and money market deposits |
$ |
3,420,827 |
|
|
$ |
3,364,726 |
|
|
$ |
3,350,673 |
|
|
$ |
3,369,149 |
|
|
$ |
3,322,788 |
|
Time deposits |
|
1,220,653 |
|
|
|
1,178,389 |
|
|
|
1,136,121 |
|
|
|
1,179,739 |
|
|
|
1,250,606 |
|
Borrowings |
|
1,142,744 |
|
|
|
1,229,165 |
|
|
|
1,219,812 |
|
|
|
1,217,020 |
|
|
|
1,214,016 |
|
Repurchase agreements |
|
122,399 |
|
|
|
128,169 |
|
|
|
139,309 |
|
|
|
136,030 |
|
|
|
142,494 |
|
Subordinated notes |
|
55,703 |
|
|
|
55,668 |
|
|
|
55,634 |
|
|
|
55,543 |
|
|
|
59,007 |
|
Junior subordinated debentures issued to capital trusts |
|
57,423 |
|
|
|
57,369 |
|
|
|
57,315 |
|
|
|
57,258 |
|
|
|
57,201 |
|
Total interest earning liabilities |
|
6,019,749 |
|
|
|
6,013,486 |
|
|
|
5,958,864 |
|
|
|
6,014,739 |
|
|
|
6,046,112 |
|
Non-interest bearing deposits |
|
1,085,535 |
|
|
|
1,087,040 |
|
|
|
1,093,076 |
|
|
|
1,116,005 |
|
|
|
1,126,703 |
|
Interest payable |
|
11,400 |
|
|
|
11,240 |
|
|
|
7,853 |
|
|
|
22,249 |
|
|
|
16,281 |
|
Other liabilities |
|
55,951 |
|
|
|
74,096 |
|
|
|
74,664 |
|
|
|
68,680 |
|
|
|
76,969 |
|
Total liabilities |
|
7,172,635 |
|
|
|
7,185,862 |
|
|
|
7,134,457 |
|
|
|
7,221,673 |
|
|
|
7,266,065 |
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
358,453 |
|
|
|
357,673 |
|
|
|
356,599 |
|
|
|
356,400 |
|
|
|
355,478 |
|
Retained earnings |
|
454,050 |
|
|
|
442,977 |
|
|
|
435,927 |
|
|
|
429,021 |
|
|
|
461,325 |
|
Accumulated other comprehensive income (loss) |
|
(57,681 |
) |
|
|
(73,985 |
) |
|
|
(71,276 |
) |
|
|
(66,609 |
) |
|
|
(123,434 |
) |
Total stockholders’ equity |
|
754,822 |
|
|
|
726,665 |
|
|
|
721,250 |
|
|
|
718,812 |
|
|
|
693,369 |
|
Total liabilities and stockholders’ equity |
$ |
7,927,457 |
|
|
$ |
7,912,527 |
|
|
$ |
7,855,707 |
|
|
$ |
7,940,485 |
|
|
$ |
7,959,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and Deposits |
|
|
|
|
|
(Dollars in Thousands, Unaudited) |
|
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
% Change |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
Q3'24 vs Q2'24 |
|
Q3'24 vs Q3'23 |
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
$ |
2,105,459 |
|
|
$ |
2,117,772 |
|
|
$ |
1,984,723 |
|
|
$ |
1,962,097 |
|
|
$ |
1,916,056 |
|
|
|
(1 |
)% |
|
|
10 |
% |
Commercial & Industrial |
|
808,600 |
|
|
|
786,788 |
|
|
|
765,043 |
|
|
|
712,863 |
|
|
|
673,188 |
|
|
|
3 |
% |
|
|
20 |
% |
Total commercial |
|
2,914,059 |
|
|
|
2,904,560 |
|
|
|
2,749,766 |
|
|
|
2,674,960 |
|
|
|
2,589,244 |
|
|
|
— |
% |
|
|
13 |
% |
Residential Real estate |
|
801,356 |
|
|
|
797,956 |
|
|
|
782,071 |
|
|
|
681,136 |
|
|
|
675,399 |
|
|
|
— |
% |
|
|
19 |
% |
Mortgage warehouse |
|
80,437 |
|
|
|
68,917 |
|
|
|
56,548 |
|
|
|
45,078 |
|
|
|
65,923 |
|
|
|
17 |
% |
|
|
22 |
% |
Consumer |
|
1,008,144 |
|
|
|
1,051,407 |
|
|
|
1,029,790 |
|
|
|
1,016,456 |
|
|
|
1,028,436 |
|
|
|
(4 |
)% |
|
|
(2 |
)% |
Total loans held for investment |
|
4,803,996 |
|
|
|
4,822,840 |
|
|
|
4,618,175 |
|
|
|
4,417,630 |
|
|
|
4,359,002 |
|
|
|
— |
% |
|
|
10 |
% |
Loans held for sale |
|
2,069 |
|
|
|
2,440 |
|
|
|
922 |
|
|
|
1,418 |
|
|
|
2,828 |
|
|
|
(15 |
)% |
|
|
(27 |
)% |
Total loans |
$ |
4,806,065 |
|
|
$ |
4,825,280 |
|
|
$ |
4,619,097 |
|
|
$ |
4,419,048 |
|
|
$ |
4,361,830 |
|
|
|
— |
% |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings and money market deposits |
$ |
3,420,827 |
|
|
$ |
3,364,726 |
|
|
$ |
3,350,673 |
|
|
$ |
3,369,149 |
|
|
$ |
3,322,788 |
|
|
|
2 |
% |
|
|
3 |
% |
Time deposits |
|
1,220,653 |
|
|
|
1,178,389 |
|
|
|
1,136,121 |
|
|
|
1,179,739 |
|
|
|
1,250,606 |
|
|
|
4 |
% |
|
|
(2 |
)% |
Total Interest bearing deposits |
|
4,641,480 |
|
|
|
4,543,115 |
|
|
|
4,486,794 |
|
|
|
4,548,888 |
|
|
|
4,573,394 |
|
|
|
2 |
% |
|
|
1 |
% |
Non-interest bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
1,085,535 |
|
|
|
1,087,040 |
|
|
|
1,093,076 |
|
|
|
1,116,005 |
|
|
|
1,126,703 |
|
|
|
— |
% |
|
|
(4 |
)% |
Total deposits |
$ |
5,727,015 |
|
|
$ |
5,630,155 |
|
|
$ |
5,579,870 |
|
|
$ |
5,664,893 |
|
|
$ |
5,700,097 |
|
|
|
2 |
% |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balance Sheet |
|
(Dollars in Thousands, Unaudited) |
|
Three Months Ended |
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
|
Average Balance |
Interest(4) |
Average
Rate(4) |
|
Average Balance |
Interest(4) |
Average
Rate(4) |
|
Average Balance |
Interest(4) |
Average
Rate(4) |
Assets |
Interest earning assets |
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold |
$ |
64,743 |
|
$ |
860 |
|
|
5.28 |
% |
|
$ |
47,805 |
|
$ |
645 |
|
|
5.43 |
% |
|
$ |
92,305 |
|
$ |
1,247 |
|
|
5.36 |
% |
Interest earning deposits |
|
8,781 |
|
|
97 |
|
|
4.39 |
% |
|
|
7,662 |
|
|
93 |
|
|
4.88 |
% |
|
|
8,018 |
|
|
85 |
|
|
4.21 |
% |
Federal Home Loan Bank stock |
|
53,826 |
|
|
1,607 |
|
|
11.88 |
% |
|
|
53,827 |
|
|
1,521 |
|
|
11.36 |
% |
|
|
34,509 |
|
|
618 |
|
|
7.10 |
% |
Investment securities - taxable (1) |
|
1,301,830 |
|
|
6,526 |
|
|
1.99 |
% |
|
|
1,309,305 |
|
|
6,465 |
|
|
1.99 |
% |
|
|
1,650,081 |
|
|
8,170 |
|
|
1.96 |
% |
Investment securities - non-taxable (1) |
|
1,125,295 |
|
|
7,987 |
|
|
2.82 |
% |
|
|
1,132,065 |
|
|
8,072 |
|
|
2.87 |
% |
|
|
1,220,998 |
|
|
8,863 |
|
|
2.88 |
% |
Total investment securities |
|
2,427,125 |
|
|
14,513 |
|
|
2.38 |
% |
|
|
2,441,370 |
|
|
14,537 |
|
|
2.39 |
% |
|
|
2,871,079 |
|
|
17,033 |
|
|
2.35 |
% |
Loans receivable (2) (3) |
|
4,775,788 |
|
|
75,828 |
|
|
6.32 |
% |
|
|
4,662,124 |
|
|
72,208 |
|
|
6.23 |
% |
|
|
4,280,700 |
|
|
63,254 |
|
|
5.89 |
% |
Total interest earning assets |
$ |
7,330,263 |
|
$ |
92,905 |
|
|
5.04 |
% |
|
$ |
7,212,788 |
|
$ |
89,004 |
|
|
4.96 |
% |
|
$ |
7,286,611 |
|
$ |
82,237 |
|
|
4.59 |
% |
Non-interest earning assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
108,609 |
|
|
|
|
$ |
108,319 |
|
|
|
|
$ |
100,331 |
|
|
|
Allowance for credit losses |
|
(52,111 |
) |
|
|
|
|
(50,334 |
) |
|
|
|
|
(49,705 |
) |
|
|
Other assets |
|
471,259 |
|
|
|
|
|
508,555 |
|
|
|
|
|
587,514 |
|
|
|
Total average assets |
$ |
7,858,020 |
|
|
|
|
$ |
7,779,328 |
|
|
|
|
$ |
7,924,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
Interest bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits |
$ |
3,386,177 |
|
$ |
18,185 |
|
|
2.14 |
% |
|
$ |
3,334,490 |
|
$ |
16,814 |
|
|
2.03 |
% |
|
$ |
3,267,594 |
|
$ |
12,661 |
|
|
1.54 |
% |
Time deposits |
|
1,189,148 |
|
|
12,602 |
|
|
4.22 |
% |
|
|
1,134,590 |
|
|
11,633 |
|
|
4.12 |
% |
|
|
1,271,104 |
|
|
12,043 |
|
|
3.76 |
% |
Borrowings |
|
1,149,952 |
|
|
10,221 |
|
|
3.54 |
% |
|
|
1,184,172 |
|
|
10,278 |
|
|
3.49 |
% |
|
|
1,180,452 |
|
|
10,399 |
|
|
3.50 |
% |
Repurchase agreements |
|
123,524 |
|
|
910 |
|
|
2.93 |
% |
|
|
125,144 |
|
|
935 |
|
|
3.00 |
% |
|
|
136,784 |
|
|
825 |
|
|
2.39 |
% |
Subordinated notes |
|
55,681 |
|
|
830 |
|
|
5.93 |
% |
|
|
55,647 |
|
|
829 |
|
|
5.99 |
% |
|
|
58,983 |
|
|
880 |
|
|
5.92 |
% |
Junior subordinated debentures issued to capital trusts |
|
57,389 |
|
|
1,230 |
|
|
8.53 |
% |
|
|
57,335 |
|
|
1,213 |
|
|
8.51 |
% |
|
|
57,166 |
|
|
1,227 |
|
|
8.52 |
% |
Total interest bearing liabilities |
$ |
5,961,871 |
|
$ |
43,978 |
|
|
2.93 |
% |
|
$ |
5,891,378 |
|
$ |
41,702 |
|
|
2.85 |
% |
|
$ |
5,972,083 |
|
$ |
38,035 |
|
|
2.53 |
% |
Non-interest bearing liabilities |
Demand deposits |
$ |
1,083,214 |
|
|
|
|
$ |
1,080,676 |
|
|
|
|
$ |
1,159,241 |
|
|
|
Accrued interest payable and other liabilities |
|
74,563 |
|
|
|
|
|
80,942 |
|
|
|
|
|
77,942 |
|
|
|
Stockholders' equity |
|
738,372 |
|
|
|
|
|
726,332 |
|
|
|
|
|
715,485 |
|
|
|
Total average liabilities and stockholders' equity |
$ |
7,858,020 |
|
|
|
|
$ |
7,779,328 |
|
|
|
|
$ |
7,924,751 |
|
|
|
Net FTE interest income (non-GAAP) (5) |
|
$ |
48,927 |
|
|
|
|
$ |
47,302 |
|
|
|
|
$ |
44,202 |
|
|
Less FTE adjustments (4) |
|
|
2,017 |
|
|
|
|
|
2,023 |
|
|
|
|
|
2,112 |
|
|
Net Interest Income |
|
$ |
46,910 |
|
|
|
|
$ |
45,279 |
|
|
|
|
$ |
42,090 |
|
|
Net FTE interest margin (Non-GAAP) (4)(5) |
|
|
|
2.66 |
% |
|
|
|
|
2.64 |
% |
|
|
|
|
2.41 |
% |
|
(1) Securities balances represent daily average balances for the
fair value of securities. The average rate is calculated based on
the daily average balance for the amortized cost of
securities. |
(2) Includes fees on loans held for sale and held for investment.
The inclusion of loan fees does not have a material effect on the
average interest rate. |
(3) Non-accruing loans for the purpose of the computation above are
included in the daily average loan amounts outstanding. Loan totals
are shown net of unearned income and deferred loan fees. |
(4) Management believes fully taxable equivalent, or FTE, interest
income is useful to investors in evaluating the Company's
performance as a comparison of the returns between a tax-free
investment and a taxable alternative. The Company adjusts interest
income and average rates for tax-exempt loans and securities to an
FTE basis utilizing a 21% tax rate |
(5) Non-GAAP financial metric. See non-GAAP reconciliation included
herein for the most directly comparable GAAP measure. |
|
|
Credit Quality |
|
|
|
|
|
(Dollars in Thousands Except Ratios,
Unaudited) |
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
% Change |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
3Q24 vs 2Q24 |
|
3Q24 vs 3Q23 |
Non-accrual loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
6,830 |
|
|
$ |
4,321 |
|
|
$ |
5,493 |
|
|
$ |
7,362 |
|
|
$ |
6,919 |
|
|
|
58 |
% |
|
|
(1 |
)% |
Residential Real estate |
|
9,529 |
|
|
|
8,489 |
|
|
|
8,725 |
|
|
|
8,058 |
|
|
|
7,644 |
|
|
|
12 |
% |
|
|
25 |
% |
Mortgage warehouse |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
— |
% |
Consumer |
|
7,208 |
|
|
|
5,453 |
|
|
|
4,835 |
|
|
|
4,290 |
|
|
|
4,493 |
|
|
|
32 |
% |
|
|
60 |
% |
Total non-accrual loans |
|
23,567 |
|
|
|
18,263 |
|
|
|
19,053 |
|
|
|
19,710 |
|
|
|
19,056 |
|
|
|
29 |
% |
|
|
24 |
% |
90 days and greater delinquent - accruing interest |
|
819 |
|
|
|
1,039 |
|
|
|
108 |
|
|
|
559 |
|
|
|
392 |
|
|
|
(21 |
)% |
|
|
109 |
% |
Total non-performing loans |
|
24,386 |
|
|
|
19,302 |
|
|
|
19,161 |
|
|
|
20,269 |
|
|
|
19,448 |
|
|
|
26 |
% |
|
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
1,158 |
|
|
$ |
1,111 |
|
|
$ |
1,124 |
|
|
$ |
1,124 |
|
|
$ |
1,287 |
|
|
|
4 |
% |
|
|
(10 |
)% |
Residential Real estate |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
182 |
|
|
|
32 |
|
|
|
— |
% |
|
|
(100 |
)% |
Mortgage warehouse |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
— |
% |
Consumer |
|
36 |
|
|
|
57 |
|
|
|
50 |
|
|
|
205 |
|
|
|
72 |
|
|
|
(37 |
)% |
|
|
(50 |
)% |
Total other real estate owned |
$ |
1,194 |
|
|
$ |
1,168 |
|
|
$ |
1,174 |
|
|
$ |
1,511 |
|
|
$ |
1,391 |
|
|
|
2 |
% |
|
|
(14 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing assets |
$ |
25,580 |
|
|
$ |
20,470 |
|
|
$ |
20,335 |
|
|
$ |
21,780 |
|
|
$ |
20,839 |
|
|
|
25 |
% |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing 30 to 89 days past due loans |
$ |
18,087 |
|
|
$ |
19,785 |
|
|
$ |
15,154 |
|
|
$ |
16,595 |
|
|
$ |
13,089 |
|
|
|
(9 |
)% |
|
|
38 |
% |
Substandard loans |
|
59,775 |
|
|
|
51,221 |
|
|
|
47,469 |
|
|
|
49,526 |
|
|
|
47,563 |
|
|
|
17 |
% |
|
|
26 |
% |
Net charge-offs (recoveries) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
(55 |
) |
|
|
57 |
|
|
|
(57 |
) |
|
|
233 |
|
|
|
142 |
|
|
|
(196 |
)% |
|
|
(139 |
)% |
Residential Real estate |
|
(9 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
21 |
|
|
|
(39 |
) |
|
|
(125 |
)% |
|
|
77 |
% |
Mortgage warehouse |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
— |
% |
Consumer |
|
439 |
|
|
|
534 |
|
|
|
488 |
|
|
|
531 |
|
|
|
619 |
|
|
|
(18 |
)% |
|
|
(29 |
)% |
Total net charge-offs |
|
375 |
|
|
|
587 |
|
|
|
426 |
|
|
|
785 |
|
|
|
722 |
|
|
|
(36 |
)% |
|
|
(48 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
32,854 |
|
|
|
31,941 |
|
|
|
30,514 |
|
|
|
29,736 |
|
|
|
29,472 |
|
|
|
3 |
% |
|
|
11 |
% |
Residential Real estate |
|
2,675 |
|
|
|
2,588 |
|
|
|
2,655 |
|
|
|
2,503 |
|
|
|
2,794 |
|
|
|
3 |
% |
|
|
(4 |
)% |
Mortgage warehouse |
|
862 |
|
|
|
736 |
|
|
|
659 |
|
|
|
481 |
|
|
|
714 |
|
|
|
17 |
% |
|
|
21 |
% |
Consumer |
|
16,490 |
|
|
|
16,950 |
|
|
|
16,559 |
|
|
|
17,309 |
|
|
|
16,719 |
|
|
|
(3 |
)% |
|
|
(1 |
)% |
Total allowance for credit losses |
$ |
52,881 |
|
|
$ |
52,215 |
|
|
$ |
50,387 |
|
|
$ |
50,029 |
|
|
$ |
49,699 |
|
|
|
1 |
% |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit quality ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans to HFI loans |
|
0.49 |
% |
|
|
0.38 |
% |
|
|
0.41 |
% |
|
|
0.45 |
% |
|
|
0.44 |
% |
|
|
|
|
Non-performing assets to total assets |
|
0.32 |
% |
|
|
0.26 |
% |
|
|
0.26 |
% |
|
|
0.27 |
% |
|
|
0.26 |
% |
|
|
|
|
Annualized net charge-offs of average total loans |
|
0.03 |
% |
|
|
0.05 |
% |
|
|
0.04 |
% |
|
|
0.07 |
% |
|
|
0.07 |
% |
|
|
|
|
Allowance for credit losses to HFI loans |
|
1.10 |
% |
|
|
1.08 |
% |
|
|
1.09 |
% |
|
|
1.13 |
% |
|
|
1.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non–GAAP Reconciliation of Net Fully-Taxable Equivalent
("FTE") Interest Margin |
(Dollars in Thousands, Unaudited) |
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Interest income (GAAP) |
(A) |
$ |
90,888 |
|
|
$ |
86,981 |
|
|
$ |
85,264 |
|
|
$ |
83,514 |
|
|
$ |
80,125 |
|
Taxable-equivalent adjustment: |
|
|
|
|
|
|
|
|
|
|
Investment securities - tax exempt (1) |
|
|
1,677 |
|
|
|
1,695 |
|
|
|
1,715 |
|
|
|
1,799 |
|
|
|
1,861 |
|
Loan receivable (2) |
|
|
340 |
|
|
|
328 |
|
|
|
353 |
|
|
|
314 |
|
|
|
251 |
|
Interest income (non-GAAP) |
(B) |
|
92,905 |
|
|
|
89,004 |
|
|
|
87,332 |
|
|
|
85,627 |
|
|
|
82,237 |
|
Interest expense (GAAP) |
(C) |
|
43,978 |
|
|
|
41,702 |
|
|
|
41,976 |
|
|
|
41,257 |
|
|
|
38,035 |
|
Net interest income (GAAP) |
(D) =(A) - (C) |
|
46,910 |
|
|
|
45,279 |
|
|
|
43,288 |
|
|
|
42,257 |
|
|
|
42,090 |
|
Net FTE interest income (non-GAAP) |
(E) = (B) - (C) |
|
48,927 |
|
|
|
47,302 |
|
|
|
45,356 |
|
|
|
44,370 |
|
|
|
44,202 |
|
Average interest earning assets |
(F) |
|
7,330,263 |
|
|
|
7,212,788 |
|
|
|
7,293,559 |
|
|
|
7,239,034 |
|
|
|
7,286,611 |
|
Net FTE interest margin (non-GAAP) |
(G) = (E*) / (F) |
|
2.66 |
% |
|
|
2.64 |
% |
|
|
2.50 |
% |
|
|
2.43 |
% |
|
|
2.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) The following represents municipal securities interest income
for investment securities classified as available-for-sale and
held-to-maturity |
(2) The following represents municipal loan interest income for
loan receivables classified as held for sale and held for
investment |
*Annualized |
|
Non–GAAP Reconciliation of Return on Average Tangible
Common Equity |
(Dollars in Thousands, Unaudited) |
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) (GAAP) |
(A) |
$ |
18,180 |
|
|
$ |
14,140 |
|
|
$ |
13,991 |
|
|
$ |
(25,215 |
) |
|
$ |
16,205 |
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders' equity |
(B) |
|
738,372 |
|
|
|
726,332 |
|
|
|
725,083 |
|
|
|
702,793 |
|
|
|
715,485 |
|
Average intangible assets |
(C) |
|
166,819 |
|
|
|
167,659 |
|
|
|
168,519 |
|
|
|
169,401 |
|
|
|
170,301 |
|
Average tangible equity (Non-GAAP) |
(D) = (B) - (C) |
$ |
571,553 |
|
|
$ |
558,673 |
|
|
$ |
556,564 |
|
|
$ |
533,392 |
|
|
$ |
545,184 |
|
Return on average tangible common equity ("ROACE") (non-GAAP) |
(E) = (A*) / (D) |
|
12.65 |
% |
|
|
10.18 |
% |
|
|
10.11 |
% |
|
(18.76 |
)% |
|
|
11.79 |
% |
*Annualized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non–GAAP Reconciliation of Tangible Common Equity to
Tangible Assets |
(Dollars in Thousands, Unaudited) |
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Total stockholders' equity (GAAP) |
(A) |
$ |
754,822 |
|
|
$ |
726,665 |
|
|
$ |
721,250 |
|
|
$ |
718,812 |
|
|
$ |
693,369 |
|
Intangible assets (end of period) |
(B) |
|
166,278 |
|
|
|
167,121 |
|
|
|
167,965 |
|
|
|
168,837 |
|
|
|
169,741 |
|
Total tangible common equity (non-GAAP) |
(C) = (A) - (B) |
$ |
588,544 |
|
|
$ |
559,544 |
|
|
$ |
553,285 |
|
|
$ |
549,975 |
|
|
$ |
523,628 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
(D) |
|
7,927,457 |
|
|
|
7,912,527 |
|
|
|
7,855,707 |
|
|
|
7,940,485 |
|
|
|
7,959,434 |
|
Intangible assets (end of period) |
(B) |
|
166,278 |
|
|
|
167,121 |
|
|
|
167,965 |
|
|
|
168,837 |
|
|
|
169,741 |
|
Total tangible assets (non-GAAP) |
(E) = (D) - (B) |
$ |
7,761,179 |
|
|
$ |
7,745,406 |
|
|
$ |
7,687,742 |
|
|
$ |
7,771,648 |
|
|
$ |
7,789,693 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets (Non-GAAP) |
(G) = (C) / (E) |
|
7.58 |
% |
|
|
7.22 |
% |
|
|
7.20 |
% |
|
|
7.08 |
% |
|
|
6.72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non–GAAP Reconciliation of Tangible Book Value Per
Share |
(Dollars in Thousands, Unaudited) |
|
|
Three Months Ended |
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
Total stockholders' equity (GAAP) |
(A) |
$ |
754,822 |
|
|
$ |
726,665 |
|
|
$ |
721,250 |
|
|
$ |
718,812 |
|
|
$ |
693,369 |
|
Intangible assets (end of period) |
(B) |
|
166,278 |
|
|
|
167,121 |
|
|
|
167,965 |
|
|
|
168,837 |
|
|
|
169,741 |
|
Total tangible common equity (non-GAAP) |
(C) = (A) - (B) |
$ |
588,544 |
|
|
$ |
559,544 |
|
|
$ |
553,285 |
|
|
$ |
549,975 |
|
|
$ |
523,628 |
|
Common shares outstanding |
(D) |
|
43,712,059 |
|
|
|
43,712,059 |
|
|
|
43,726,380 |
|
|
|
43,652,063 |
|
|
|
43,648,501 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per common share (non-GAAP) |
(E) = (C) / (D) |
$ |
13.46 |
|
|
$ |
12.80 |
|
|
$ |
12.65 |
|
|
$ |
12.60 |
|
|
$ |
12.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
John R. Stewart, CFA |
|
EVP, Chief
Financial Officer |
Phone: |
(219)
814–5833 |
Fax: |
(219)
874–9280 |
Date: |
October 23,
2024 |
|
|
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