CHICAGO, July 17, 2014 /PRNewswire/ -- Taylor Capital
Group, Inc. (the "Company") (NASDAQ: TAYC), the parent company of
Cole Taylor Bank (the "Bank"), today
reported results for the second quarter of 2014.
Net income for the quarter was $9.4
million, compared to $9.9
million for the first quarter of 2014. Net income applicable
to common stockholders for the quarter was $7.4 million, or $0.24 per diluted share, compared to $9.9 million, or $0.32 per diluted share, for the first quarter of
2014.
The results for the second quarter of 2014 included certain
penalties assessed on Cole Taylor
Bank by the Federal Reserve Board and the Illinois
Department of Financial and Professional Regulation, related to a
recently disclosed regulatory matter, the expense associated with
recognizing the fair value of a standby commitment related to the
same matter, expenses related to the pending merger with MB
Financial, Inc. ("MB Financial") and certain costs related to other
strategic initiatives. These items taken together totaled
approximately $8.8 million
pre-tax. By comparison, net income for the first quarter of
2014 included merger and other strategic initiative expense
totaling $0.7 million pre-tax.
The following table compares selected additional financial
information for the periods indicated:
(dollars in
millions)
|
2Q14
|
|
1Q14
|
|
Change
from
1Q14
to
2Q14
|
|
2Q13
|
|
Change
from
2Q13
to
2Q14
|
Total commercial
loans (period-end)
|
$3,419.4
|
|
$3,370.4
|
|
1.5%
|
|
$3,000.2
|
|
14.0%
|
Average total
deposits
|
$3,945.8
|
|
$3,837.9
|
|
2.8%
|
|
$3,690.2
|
|
6.9%
|
Net interest
income
|
$44.1
|
|
$43.9
|
|
0.5%
|
|
$41.1
|
|
7.3%
|
Net interest
margin
|
3.41%
|
|
3.49%
|
|
-8 bps
|
|
3.16%
|
|
25 bps
|
Mortgage banking
revenue
|
$32.2
|
|
$23.1
|
|
39.4%
|
|
$38.5
|
|
(16.4)%
|
Loan loss
provision
|
$1.5
|
|
$2.6
|
|
(42.3)%
|
|
$0.7
|
|
114.3%
|
Net income
|
$9.4
|
|
$9.9
|
|
(5.1)%
|
|
$15.6
|
|
(39.7)%
|
Normalized net income
(1)
|
$16.7
|
|
$10.3
|
|
62.1%
|
|
$19.0
|
|
(12.1)%
|
|
(1) The Normalized
net income non-GAAP measure is equal to net income adjusted for
gains and losses on investment securities, fines and penalties,
fair value of standby commitment, merger and other strategic
initiative expense and early extinguishment of debt. These are
items which management has deemed to be outside the normal course
of business operations.
|
"I am very proud of our results for the second quarter," said
Mark A. Hoppe, President and Chief
Executive Officer of the Company. "We have a terrific team
that is consistently able to focus on our most important asset -
our clients. While there were several significant items this
quarter, after normalizing for those our core results were
exceptionally strong and continue to demonstrate the value of our
well-developed diversification strategy. Cole Taylor Mortgage
had an excellent quarter delivering significant growth in
origination volume and income, as well as in servicing
income. The strong bottom line results from the mortgage unit
further demonstrate its ability to capitalize on changing market
conditions. The Banking segment generated annualized
commercial loan growth of 6%, led by our national asset-based
lending and equipment finance lines of business. Our ongoing
focus on credit quality continues as nonperforming assets declined
for the third consecutive quarter and are at the lowest level since
the end of 2007.
"The Federal Reserve Board recently approved the application
relating to our proposed merger with MB Financial, Inc.," Hoppe
continued. "While the transaction remains subject to the
approval of the Office of the Comptroller of the Currency, and
other customary closing conditions, we are excited about this
important step forward and the bright future for our combined
organization. I am especially grateful for the support that
we've received from our customers and shareholders during this
transition and for the dedication my colleagues have shown in
providing our customers with the best possible service."
SECOND QUARTER 2014 HIGHLIGHTS - COMPARISON TO FIRST QUARTER
2014
- Total commercial loans grew $49.1
million, or 1.5%, from March 31,
2014
- Mortgage banking revenue was $32.2
million for the second quarter of 2014, up 39.4% from
$23.1 million for the first quarter
of 2014
- Mortgage origination volume was $1.35
billion for the second quarter of 2014, up from $1.05 billion for the first quarter of 2014
- Pre-tax, pre-provision operating earnings(1) were $19.3 million for
the second quarter of 2014, up 4.3% from $18.5 million for the first quarter of 2014
- As of June 30, 2014, the
Company's Tier I Risk Based Capital ratio was 11.38%, its Total
Risk Based Capital ratio was 12.64% and its Tier I Capital to
Average Assets leverage ratio was 9.67%
Second quarter 2014 credit quality indicators as compared to
first quarter of 2014
- Nonperforming loans were $72.7
million and 1.97% of total loans at June 30, 2014, as compared to $72.9 million and 2.00% of total loans at
March 31, 2014
- At June 30, 2014, commercial
criticized and classified loans(2)
totaled $210.9 million, compared to
$184.6 million at March 31, 2014
- Other real estate owned ("OREO") and repossessed assets were
$7.3 million at June 30, 2014, down 27.0% from $10.0 million at March 31,
2014
- The allowance for loan losses as a percent of nonperforming
loans was 112.3% at June 30, 2014,
compared to 113.6% at March 31,
2014
- Credit costs(3) were $848,000 for the second quarter of 2014, down
69.7% from $2.8 million for the first
quarter of 2014
SECOND QUARTER 2014 - COMPARISON TO SECOND QUARTER
2013
- Total commercial loans increased to $3.42 billion at June 30,
2014, up $419.2 million, or
14.0%, from June 30, 2013
- Net interest margin increased to 3.41% for the second quarter
of 2014 from 3.16% for the second quarter of 2013
- Mortgage origination volume was $1.35
billion for the second quarter of 2014, as compared to
$1.87 billion for the second quarter
of 2013
SECOND QUARTER 2014 PERFORMANCE OVERVIEW
Results of Operations - Comparisons to first quarter
2014
Net income for the second quarter of 2014 was $9.4 million, compared to $9.9 million for the first quarter of 2014, a
decrease of 5.1%. Net income applicable to common
stockholders for the second quarter of 2014 was $7.4 million, compared to $9.9 million for the first quarter of 2014.
Income before income taxes was $18.4
million for the second quarter of 2014, compared to
$15.8 million for the first quarter
of 2014, an increase of 16.5%.
Pre-tax, pre-provision operating earnings were $19.3 million for the second quarter of 2014,
compared to $18.5 million for the
first quarter of 2014, an increase of 4.3%.
Revenue(4)
Revenue totaled $83.0 million for
the second quarter of 2014, compared to $72.9 million for the first quarter of 2014, an
increase of 13.9%.
Net interest income was $44.1
million for the second quarter of 2014, as compared to
$43.9 million for the first quarter
of 2014. The increase in net interest income of $220,000 was primarily the result of an increase
in mortgage loans held for sale for the quarter due to increased
origination volume.
Noninterest income, excluding investment security gains and
losses, was $38.9 million for the
second quarter of 2014, compared to $29.1
million for the first quarter of 2014, an increase of
33.7%. The increase in noninterest income, was primarily due
to a $9.2 million increase in
mortgage banking revenue due to a $7.3
million increase in origination income as both mortgage
origination volume and gain on sale margins improved. In
addition servicing revenue increased $1.9
million primarily due to an increase in the servicing
portfolio at Cole Taylor Mortgage.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense, was
$63.7 million for the second quarter
of 2014, compared to $54.4 million
for the first quarter of 2014, an increase of $9.3 million, or 17.1%. The increase in
noninterest expense was primarily due to $5.6 million of penalties and the fair value of a
standby commitment, both related to a recently disclosed regulatory
matter, a $3.3 million increase in
performance-related incentive compensation as a result of improved
performance and a $2.6 million charge
for a fixed asset abandonment. Partially offsetting these
increases was a $2.5 million
reduction in servicing-related expense and a $1.8 million decrease in employee taxes.
Servicing-related expense decreased due to a reduction in the fees
paid to a third party servicer as most loans are now serviced
in-house. The prior quarter also included approximately
$1.1 million of certain one-time
costs associated with transferring the bulk of Cole Taylor
Mortgage's loan servicing portfolio to an in-house platform.
Employee taxes decreased in the second quarter of 2014 primarily
due to seasonality as certain employment tax expenses are typically
higher in the first quarter of each year.
Preferred Dividends
Dividends on the Series A Preferred stock were $2.0 million in the second quarter of 2014 as
compared to zero dividend expense in the first quarter of
2014. As required by the Series A Preferred stock and in
connection with the repurchase and redemption of the Series B
Preferred stock in 2013, the $2.0
million quarterly dividend on the Series A Preferred stock,
which would have otherwise been recorded in the first quarter of
2014, was instead declared and recorded in the fourth quarter of
2013.
Results of Operations - Comparisons to Second Quarter
2013
Net income for the second quarter of 2014 was $9.4 million, compared to $15.6 million for the second quarter of
2013. Net income applicable to common stockholders for the
second quarter of 2014 was $7.4
million, compared to $11.8
million for the second quarter of 2013, a decrease of
37.3%.
Income before income taxes was $18.4
million for the second quarter of 2014, compared to
$26.2 million for the second quarter
of 2013, a decrease of 29.8%.
Pre-tax, pre-provision operating earnings totaled $19.3 million for the second quarter of 2014,
compared to $31.1 million for the
second quarter of 2013, a decrease of 37.9%.
Revenue
Revenue totaled $83.0 million for
the second quarter of 2014, compared to $87.2 million for the second quarter of 2013, a
decrease of 4.8%.
Net interest income was $44.1
million for the second quarter of 2014, as compared to
$41.1 million for the second quarter
of 2013, an increase of 7.3%. The increase in net interest
income was the result of the combination of a $1.9 million reduction in interest expense and a
$1.1 million increase in interest
income. Interest expense decreased due to lower rates paid on
deposit balances and the early retirement of the Company's 8%
subordinated notes in June 2013. The increase in interest
income was primarily due to growth in the commercial loan
portfolio.
Noninterest income, excluding investment security gains and
losses, was $38.9 million for the
second quarter of 2014, compared to $46.1
million for the second quarter of 2013, a decrease of
15.6%. The decrease was primarily due to a net $6.3 million decrease in mortgage banking
revenue. Mortgage loan origination income decreased
$10.8 million primarily due to a
reduction in mortgage loan origination volume. Total mortgage
originations were $1.35 billion in
the second quarter of 2014, as compared to $1.87 billion in the second quarter of
2013. Partially offsetting this decrease was a $4.5 million increase in net mortgage servicing
income as the mortgage servicing book increased from $12.74 billion at June 30,
2013 to $20.88 billion at
June 30, 2014 due to retention of
mortgage servicing rights ("MSRs") on loans originated by Cole
Taylor Mortgage and purchases of other MSRs.
Noninterest Expense
Noninterest expense, excluding nonperforming asset expense and
early extinguishment of debt expense, was $63.7 million for the second quarter of 2014,
compared to $56.1 million for the
second quarter of 2013, an increase of 13.5%. The increase in
noninterest expense was primarily due to $5.6 million of penalties and the fair value of a
standby commitment related to a recent regulatory matter and a
$2.6 million charge for a fixed asset
abandonment.
Credit Quality
Loan Portfolio Performance and Credit Quality
Nonperforming loans were $72.7
million at June 30, 2014, as
compared to $72.9 million at
March 31, 2014 and $69.5 million at June
30, 2013.
OREO and repossessed assets were $7.3
million at June 30, 2014, as
compared to $10.0 million at
March 31, 2014 and $19.8 million at June
30, 2013. The decrease in OREO and repossessed assets
in the second quarter of 2014 was primarily due to sales as the
Company continues to actively manage the resolution process.
Total nonperforming assets were $80.0
million at June 30, 2014, down
from $82.9 million at March 31, 2014 and $89.3
million at June 30,
2013. Nonperforming assets to total assets were 1.34% at
June 30, 2014, down from 1.47% at
March 31, 2014 and 1.51% at
June 30, 2013.
Total commercial criticized and classified loans were
$210.9 million at June 30, 2014, as compared to $184.6 million at March
31, 2014 and $134.2 million at
June 30, 2013. The increase in
criticized and classified loans from March
31, 2014 was largely attributable to the net migration of
certain asset-based lending loans into the special mention
category. Total loans outstanding for the asset-based lending
portfolio were $728.1 million as of
June 30, 2014 as compared to
$698.6 million as of March 31, 2014 and $647.2
million as of June 30,
2013. To date, the asset-based lending portfolio has
experienced only one credit-related loss since its inception in
2008.
Allowance and Provision for Loan Losses
The allowance for loan losses was $81.7
million at June 30, 2014, down
from $82.9 million at March 31, 2014 and $83.6
million at June 30,
2013. The allowance for loan losses as a percent of
nonperforming loans was 112.34% at June 30,
2014, as compared to 113.65% at March
31, 2014 and 120.19% at June 30,
2013.
The provision for loan losses was $1.5
million for the second quarter of 2014, compared to
$2.6 million for the first quarter of
2014 and $700,000 for the second
quarter of 2013. The decrease of $1.1
million in the second quarter of 2014 as compared to the
first quarter of 2014 was primarily the result of a $1.2 million decrease in the general reserve as
our historical loss assessment factors have decreased based on our
more recent and improved charge-off experience.
Balance Sheet
Assets
Total assets at June 30, 2014 were
$5.96 billion, up from $5.65 billion at March 31,
2014.
Cash and cash equivalents were $136.4
million as of June 30, 2014,
down 1.6% from $138.6 million as of
March 31, 2014.
Investment securities were $1.09
billion at June 30, 2014, down
0.6% from $1.10 billion at
March 31, 2014.
Loans held for sale were $697.2
million at June 30, 2014, an
increase of $261.1 million from
March 31, 2014, primarily due to
increased mortgage origination volume by Cole Taylor Mortgage in
the second quarter of 2014, particularly in June, relative to the
first quarter and the timing of loan sales near the end of the
quarter.
Net loans at June 30, 2014 were
$3.61 billion, as compared to
$3.57 billion at March 31, 2014. Commercial and industrial
loans were $2.00 billion at
June 30, 2014, as compared to
$1.94 billion at March 31, 2014, an increase of 3.1%, with second
quarter growth largely attributable to the Company's national
lending platforms. Commercial real estate secured loans were
$1.08 billion at June 30, 2014, down slightly from $1.11 billion at March
31, 2014. Commercial construction and land loans were
$134.5 million at June 30, 2014, up from $132.7 million at March
31, 2014. Lease receivables were $157.0 million at June 30,
2014, up $13.9 million, or
9.7%, from March 31, 2014, primarily
as a result of new leases sourced by the Company's recently
expanded direct sales channel. Consumer loans, which consist
primarily of residential mortgages, were $288.3 million at June 30,
2014, down $6.3 million from
March 31, 2014, due to the continued
planned reduction of the home equity line of credit portfolio.
Investment in Federal Home Loan Bank ("FHLB") and Federal
Reserve Bank stock was $61.6 million
as of June 30, 2014, as compared to
$49.6 million as of March 31, 2014. The increase of
$12.0 million in these investments
was due to the increase in the Bank's use of short term FHLB
borrowings.
The MSR asset was $227.7 million
as of June 30, 2014, essentially
unchanged from March 31, 2014.
The unpaid principal balance of loans serviced was $20.88 billion as of June
30, 2014, up 3.7% from March
31, 2014. The Company invests in MSRs and retains
servicing on most mortgage loans originated as part of its strategy
to diversify the revenue streams of Cole Taylor Mortgage.
Liabilities and Stockholders' Equity
Total liabilities at June 30, 2014
were $5.46 billion, as compared to
$5.17 billion at March 31, 2014.
Total deposits were $4.0 billion
at June 30, 2014, compared to
$3.95 billion at March 31, 2014, an increase of 1.2%. Total
deposits increased in the second quarter primarily due to a planned
increase in time deposits for liquidity management purposes.
Total time deposits increased $101.2
million to $1.31 billion at
June 30, 2014. Partially
offsetting this increase, money market deposits decreased
$73.6 million to $616.9 million at June 30,
2014.
Average total deposits for the second quarter of 2014 increased
2.8% to $3.95 billion from
$3.84 billion in the first quarter of
2014, primarily due to an increase in time deposits.
Short-term borrowings increased $233.1
million in the second quarter to $1.28 billion as of June
30, 2014, primarily to fund the growth in loans held for
sale.
Total stockholders' equity increased $16.7 million from $482.6
million at March 31, 2014 to
$499.3 million at June 30, 2014, primarily due to retaining the net
income available to common stockholders earned in the second
quarter and a $9.1 million increase
in accumulated other comprehensive income resulting from an
increase in the market value of available for sale securities.
Capital
At June 30, 2014, the Company's
Tier I Risk Based Capital ratio was 11.38%, while its Total Risk
Based Capital ratio was 12.64% and its Tier I Capital to Average
Assets leverage ratio was 9.67%.
Each of these Company ratios exceeded the regulatory
requirements for well-capitalized banks of 6.00% for the Tier I
Risk Based Capital ratio, 10.00% for the Total Risk Based Capital
ratio and 5.00% for the Tier I Capital to Average Assets leverage
ratio.
Accompanying Financial Statements and Tables
This press release is accompanied by the following unaudited
financial information:
- Condensed Consolidated Balance Sheets
- Consolidated Statements of Income
- Summary of Key Quarterly Financial Data
- Summary of Key Year-to-Date Financial Data
- Summary of Key Period-End Financial Data
- Composition of Loan Portfolio
- Credit Quality
- Loan Portfolio Aging
- Funding Liabilities
- Summary of Quarterly Segment Financial Data
- Reconciliation of U.S. GAAP Financial Measures
About Taylor Capital Group, Inc. (NASDAQ: TAYC)
Taylor Capital Group, Inc. is the holding company of
Cole Taylor Bank, a commercial bank
headquartered in Chicago with
assets of $6.0 billion as of
June 30, 2014. For more than 80
years, Cole Taylor Bank has been
successfully meeting the banking needs of closely-held companies
and the people who own and manage them by focusing on a
relationship-based approach to business. Through its national
businesses, Cole Taylor provides a
full range of financial services, including asset based lending,
commercial equipment financing, and residential mortgage
lending.
Endnotes:
(1) Schedules reconciling earnings in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP") to the non-GAAP
measurement of revenue, pre-tax, pre-provision operating earnings
and normalized net income are provided in the attached tables.
(2) Commercial criticized and classified loans are defined
as special mention, substandard, and nonaccrual loans in commercial
and industrial, commercial real estate, residential construction
and land, and commercial construction and land, excluding consumer
loans.
(3) Credit costs are defined as provision for loan losses
plus nonperforming asset expense.
(4) Revenue is defined as net interest income plus
noninterest income less investment securities gains and losses and
impairment of investment securities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that
reflect our current expectations and projections about our future
results, performance, prospects and opportunities. We have tried to
identify these forward-looking statements by using words including
"may," "might," "contemplate," "plan," "predict," "potential,"
"should," "will," "expect," "anticipate," "believe," "intend,"
"could," "estimate" and similar expressions. These forward-looking
statements are based on information currently available to us and
are subject to a number of risks, uncertainties and other factors
that could cause our actual results, performance, prospects or
opportunities in 2014 and beyond to differ materially from those
expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors include, without
limitation:
- The Agreement and Plan of Merger (the "Merger Agreement") with
MB Financial may be terminated in accordance with its terms, and
the merger contemplated thereby may not be completed.
- Termination of the Merger Agreement could negatively impact
us.
- We may be subject to business uncertainties and contractual
restrictions while the merger is pending.
- We and MB Financial have entered into a stipulation of
settlement with the plaintiffs to settle two stockholder actions
previously filed against us, our board of directors and MB
Financial challenging the merger and the plaintiffs have moved for
preliminary court approval of the settlement. It is possible that
additional suits may be filed in the future. If the settlement of
these existing suits is not approved by the court or is otherwise
voided, an adverse ruling in these or any similar future lawsuits
may prevent the merger from being completed or from being completed
within the expected timeframe.
- The Merger Agreement limits our ability to pursue an
alternative acquisition proposal and requires us to pay a
termination fee of $20 million under
limited circumstances relating to alternative acquisition
proposals.
- We may be materially and adversely affected by the highly
regulated environment in which we operate.
- Dependence on our mortgage business may increase volatility in
our consolidated revenues and earnings and our residential mortgage
lending profitability could be significantly reduced if we are not
able to originate and sell mortgage loans at profitable
margins.
- Changes in interest rates may change the value of our MSR
portfolio which may increase the volatility of our earnings.
- Certain hedging strategies that we use to manage investment in
MSRs, mortgage loans held for sale and interest rate lock
commitments may be ineffective to offset any adverse changes in the
fair value of these assets due to changes in interest rates and
market liquidity.
- Our mortgage loan repurchase reserve for losses could be
insufficient.
- A significant increase in certain loan balances associated with
our mortgage business may result in liquidity risk related to the
funding of these loans.
- We are subject to certain operational risks, including, but not
limited to, data processing system failures and errors and customer
or employee fraud. Our controls and procedures may fail or be
circumvented.
- We are dependent on outside third parties for processing and
handling of our records and data.
- System failure or breaches of our network security, including
with respect to our internet banking activities, could subject us
to increased operating costs as well as litigation and other
liabilities.
- We may not be able to access sufficient and cost-effective
sources of liquidity.
- We are subject to liquidity risk, including unanticipated
deposit volatility.
- Changes in certain credit ratings related to us or our credit
could increase our financing costs or make it more difficult for us
to obtain funding or capital on commercially acceptable terms.
- As a bank holding company, our sources of funds are
limited.
- We are subject to interest rate risk, including interest rate
fluctuations that could have a material adverse effect on us.
- Competition from financial institutions and other financial
services providers may adversely affect our growth and
profitability and have a material adverse effect on us.
- Our business is subject to the conditions of the economies in
which we operate and weakness in those economies and the real
estate markets may materially and adversely affect us.
- Our business is subject to domestic and to a lesser extent,
international economic conditions and other factors, many of which
are beyond our control and could materially and adversely affect
us.
- The preparation of our consolidated financial statements
requires us to make estimates and judgments, including the use of
models, which are subject to an inherent degree of uncertainty and
which may differ from actual results.
- We must manage credit risk and if we are unable to do so, our
allowance for loan losses may prove to be insufficient to absorb
losses in our loan portfolio, which could have a material adverse
effect on us.
- We have counterparty risk and therefore we may be materially
and adversely affected by the soundness of other financial
institutions.
- We are subject to lending concentration risks.
- We are subject to mortgage asset concentration risks.
- Our business strategy is dependent on our continued ability to
attract, develop and retain highly qualified and experienced
personnel in senior management and customer relationship
positions.
- Our reputation could be damaged by negative publicity.
- New and less mature lines of business, new products and
services or new customer relationships may subject us to certain
additional risks.
- We may experience difficulties in managing our future
growth.
- We and our subsidiaries are subject to changes in federal and
state tax laws and changes in interpretation of existing laws.
- Regulatory requirements adopted by the U.S. federal bank
regulatory agencies to implement Basel III, growth plans or
operating results may require us to raise additional capital, which
may not be available on favorable terms or at all.
- We have not paid a dividend on our common stock since the
second quarter of 2008. In addition, regulatory restrictions and
liquidity constraints at the holding company level could impair our
ability to make distributions on our outstanding securities.
For further information about these and other risks,
uncertainties and factors, please review the disclosure included in
the section captioned "Risk Factors" in our December 31, 2013 Annual Report on Form 10-K
filed with the Securities and Exchange Commission ("SEC") on
March 7, 2014, current Reports on
Form 8-K and other filings we have made with the SEC. You should
not place undue reliance on any forward-looking statements. We
undertake no obligation to publicly update or revise any
forward-looking statements or risk factors, whether as a result of
new information, future events, changed circumstances or any other
reason after the date of this press release.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in
thousands)
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
136,377
|
|
|
$
|
138,569
|
|
|
$
|
90,817
|
|
Investment
securities
|
1,093,079
|
|
|
1,100,056
|
|
|
1,120,731
|
|
Loans held for
sale
|
697,155
|
|
|
436,086
|
|
|
473,890
|
|
Loans, net of
allowance for loan losses of $81,687 at June 30, 2014, $82,891 at
March 31, 2014 and $81,864 at December 31, 2013
|
3,611,316
|
|
|
3,568,122
|
|
|
3,566,511
|
|
Premises, leasehold
improvements and equipment, net
|
27,996
|
|
|
26,350
|
|
|
26,919
|
|
Investment in Federal
Home Loan Bank and Federal Reserve Bank stock
|
61,617
|
|
|
49,617
|
|
|
64,612
|
|
Mortgage servicing
rights
|
227,730
|
|
|
227,695
|
|
|
216,111
|
|
Other real estate and
repossessed assets, net
|
7,259
|
|
|
9,950
|
|
|
10,049
|
|
Other
assets
|
100,526
|
|
|
96,573
|
|
|
116,178
|
|
Total
assets
|
$
|
5,963,055
|
|
|
$
|
5,653,018
|
|
|
$
|
5,685,818
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
1,113,886
|
|
|
$
|
1,068,207
|
|
|
$
|
1,048,946
|
|
Interest-bearing
|
2,885,654
|
|
|
2,885,178
|
|
|
2,602,037
|
|
Total
deposits
|
3,999,540
|
|
|
3,953,385
|
|
|
3,650,983
|
|
Accrued interest,
taxes and other liabilities
|
101,429
|
|
|
87,369
|
|
|
105,350
|
|
Short-term
borrowings
|
1,276,184
|
|
|
1,043,097
|
|
|
1,378,327
|
|
Junior subordinated
debentures
|
86,607
|
|
|
86,607
|
|
|
86,607
|
|
Total
liabilities
|
5,463,760
|
|
|
5,170,458
|
|
|
5,221,267
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred stock,
Series A
|
100,000
|
|
|
100,000
|
|
|
100,000
|
|
Nonvoting preferred
stock
|
13
|
|
|
13
|
|
|
13
|
|
Common
stock
|
307
|
|
|
308
|
|
|
307
|
|
Surplus
|
418,169
|
|
|
417,984
|
|
|
417,429
|
|
Accumulated
deficit
|
(74)
|
|
|
(7,486)
|
|
|
(17,430)
|
|
Accumulated other
comprehensive income (loss), net
|
10,465
|
|
|
1,326
|
|
|
(6,183)
|
|
Treasury
stock
|
(29,585)
|
|
|
(29,585)
|
|
|
(29,585)
|
|
Total stockholders'
equity
|
499,295
|
|
|
482,560
|
|
|
464,551
|
|
Total liabilities and
stockholders' equity
|
$
|
5,963,055
|
|
|
$
|
5,653,018
|
|
|
$
|
5,685,818
|
|
CONSOLIDATED
STATEMENTS OF INCOME (unaudited)
|
(dollars in
thousands, except per share data)
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
Jun.
30, 2014
|
|
Mar.
31, 2014
|
|
Jun.
30, 2013
|
|
Jun.
30, 2014
|
|
Jun.
30, 2013
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
40,356
|
|
|
$
|
39,811
|
|
|
$
|
37,499
|
|
|
$
|
80,167
|
|
|
$
|
75,128
|
|
Interest and dividends
on investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
6,259
|
|
|
6,486
|
|
|
8,398
|
|
|
12,745
|
|
|
17,015
|
|
Tax-exempt
|
2,497
|
|
|
2,545
|
|
|
2,077
|
|
|
5,042
|
|
|
3,504
|
|
Interest on cash
equivalents
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Total interest
income
|
49,113
|
|
|
48,842
|
|
|
47,975
|
|
|
97,955
|
|
|
95,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
3,218
|
|
|
3,169
|
|
|
4,213
|
|
|
6,387
|
|
|
8,477
|
|
Short-term
borrowings
|
382
|
|
|
382
|
|
|
473
|
|
|
764
|
|
|
893
|
|
Junior subordinated
debentures
|
1,439
|
|
|
1,437
|
|
|
1,444
|
|
|
2,876
|
|
|
2,887
|
|
Subordinated
notes
|
—
|
|
|
—
|
|
|
763
|
|
|
—
|
|
|
1,627
|
|
Total interest
expense
|
5,039
|
|
|
4,988
|
|
|
6,893
|
|
|
10,027
|
|
|
13,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
44,074
|
|
|
43,854
|
|
|
41,082
|
|
|
87,928
|
|
|
81,765
|
|
Provision for loan
losses
|
1,500
|
|
|
2,600
|
|
|
700
|
|
|
4,100
|
|
|
1,000
|
|
Net interest income
after provision for loan losses
|
42,574
|
|
|
41,254
|
|
|
40,382
|
|
|
83,828
|
|
|
80,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges
|
3,588
|
|
|
3,620
|
|
|
3,505
|
|
|
7,208
|
|
|
6,996
|
|
Mortgage banking
revenue
|
32,241
|
|
|
23,057
|
|
|
38,533
|
|
|
55,298
|
|
|
70,563
|
|
Gain on sales of
investment securities, net
|
—
|
|
|
35
|
|
|
6
|
|
|
35
|
|
|
7
|
|
Other derivative
income (loss)
|
840
|
|
|
(31)
|
|
|
1,704
|
|
|
809
|
|
|
3,264
|
|
Letter of credit and
other loan fees
|
1,369
|
|
|
1,254
|
|
|
1,074
|
|
|
2,623
|
|
|
2,165
|
|
Other noninterest
income
|
909
|
|
|
1,163
|
|
|
1,279
|
|
|
2,072
|
|
|
2,825
|
|
Total noninterest
income
|
38,947
|
|
|
29,098
|
|
|
46,101
|
|
|
68,045
|
|
|
85,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
36,168
|
|
|
34,655
|
|
|
37,322
|
|
|
70,823
|
|
|
71,350
|
|
Occupancy of premises,
furniture and equipment
|
4,084
|
|
|
3,957
|
|
|
3,519
|
|
|
8,041
|
|
|
6,824
|
|
Nonperforming asset
expense
|
(652)
|
|
|
166
|
|
|
(1,198)
|
|
|
(486)
|
|
|
(639)
|
|
Early extinguishment
of debt
|
—
|
|
|
—
|
|
|
5,380
|
|
|
—
|
|
|
5,380
|
|
FDIC
assessment
|
2,163
|
|
|
1,862
|
|
|
1,759
|
|
|
4,025
|
|
|
3,783
|
|
Legal fees,
net
|
1,147
|
|
|
1,010
|
|
|
1,117
|
|
|
2,157
|
|
|
1,975
|
|
Loan expense,
net
|
2,825
|
|
|
2,189
|
|
|
2,895
|
|
|
5,014
|
|
|
5,266
|
|
Outside
services
|
1,227
|
|
|
3,559
|
|
|
2,818
|
|
|
4,786
|
|
|
5,314
|
|
Computer
processing
|
1,929
|
|
|
1,768
|
|
|
1,047
|
|
|
3,697
|
|
|
2,013
|
|
Fines and
penalties
|
4,110
|
|
|
—
|
|
|
—
|
|
|
4,110
|
|
|
—
|
|
Other noninterest
expense
|
10,079
|
|
|
5,397
|
|
|
5,612
|
|
|
15,476
|
|
|
10,760
|
|
Total noninterest
expense
|
63,080
|
|
|
54,563
|
|
|
60,271
|
|
|
117,643
|
|
|
112,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
18,441
|
|
|
15,789
|
|
|
26,212
|
|
|
34,230
|
|
|
54,559
|
|
Income tax
expense
|
9,029
|
|
|
5,845
|
|
|
10,595
|
|
|
14,874
|
|
|
21,685
|
|
Net income
|
9,412
|
|
|
9,944
|
|
|
15,617
|
|
|
19,356
|
|
|
32,874
|
|
Preferred dividends
and discounts
|
(2,000)
|
|
|
—
|
|
|
(3,780)
|
|
|
(2,000)
|
|
|
(7,441)
|
|
Net income applicable
to common stockholders
|
$
|
7,412
|
|
|
$
|
9,944
|
|
|
$
|
11,837
|
|
|
$
|
17,356
|
|
|
$
|
25,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
common share
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.39
|
|
|
$
|
0.57
|
|
|
$
|
0.84
|
|
Diluted income per
common share
|
0.24
|
|
|
0.32
|
|
|
0.39
|
|
|
0.56
|
|
|
0.83
|
|
Weighted-average
common shares outstanding
|
29,178,214
|
|
|
29,075,072
|
|
|
28,687,406
|
|
|
29,126,928
|
|
|
28,641,738
|
|
Weighted-average
diluted common shares outstanding
|
29,364,567
|
|
|
29,323,756
|
|
|
28,995,753
|
|
|
29,345,162
|
|
|
28,977,242
|
|
SUMMARY OF KEY
QUARTERLY FINANCIAL DATA
|
(dollars in
thousands)
|
Unaudited
|
|
|
2014
|
|
2013
|
|
Second
Quarter
|
|
First
Quarter
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
Condensed Income
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
44,074
|
|
|
$
|
43,854
|
|
|
$
|
45,204
|
|
|
$
|
46,027
|
|
|
$
|
41,082
|
|
Provision for loan
losses
|
1,500
|
|
|
2,600
|
|
|
1,100
|
|
|
300
|
|
|
700
|
|
Total noninterest
income
|
38,947
|
|
|
29,098
|
|
|
39,640
|
|
|
32,472
|
|
|
46,101
|
|
Total noninterest
expense
|
63,080
|
|
|
54,563
|
|
|
62,079
|
|
|
54,542
|
|
|
60,271
|
|
Income before income
taxes
|
18,441
|
|
|
15,789
|
|
|
21,665
|
|
|
23,657
|
|
|
26,212
|
|
Income tax
expense
|
9,029
|
|
|
5,845
|
|
|
6,701
|
|
|
9,488
|
|
|
10,595
|
|
Net income
|
9,412
|
|
|
9,944
|
|
|
14,964
|
|
|
14,169
|
|
|
15,617
|
|
Preferred dividends
and discounts
|
(2,000)
|
|
|
—
|
|
|
(4,876)
|
|
|
(3,583)
|
|
|
(3,780)
|
|
Net income applicable
to common stockholders
|
$
|
7,412
|
|
|
$
|
9,944
|
|
|
$
|
10,088
|
|
|
$
|
10,586
|
|
|
$
|
11,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
of Performance: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
83,021
|
|
|
$
|
72,917
|
|
|
$
|
78,953
|
|
|
$
|
78,438
|
|
|
$
|
87,177
|
|
Pre-tax,
pre-provision operating earnings
|
19,289
|
|
|
18,520
|
|
|
19,120
|
|
|
23,060
|
|
|
31,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
common share
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
$
|
0.39
|
|
Diluted income per
common share
|
0.24
|
|
|
0.32
|
|
|
0.33
|
|
|
0.34
|
|
|
0.39
|
|
Tangible book value
per common share
|
13.60
|
|
|
13.02
|
|
|
12.43
|
|
|
12.47
|
|
|
12.22
|
|
Weighted average
common shares-basic
|
29,178,214
|
|
|
29,075,072
|
|
|
29,004,826
|
|
|
28,936,361
|
|
|
28,687,406
|
|
Weighted average
common shares-diluted
|
29,364,567
|
|
|
29,323,756
|
|
|
29,266,098
|
|
|
29,176,070
|
|
|
28,995,753
|
|
Common shares
outstanding-end of period
|
29,365,677
|
|
|
29,370,998
|
|
|
29,329,530
|
|
|
29,333,540
|
|
|
29,098,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios
(annualized):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.66
|
%
|
|
0.71
|
%
|
|
1.03
|
%
|
|
0.96
|
%
|
|
1.09
|
%
|
Return on average
common equity
|
7.48
|
%
|
|
10.44
|
%
|
|
10.84
|
%
|
|
11.69
|
%
|
|
12.66
|
%
|
Efficiency ratio
(2)
|
75.98
|
%
|
|
74.83
|
%
|
|
78.63
|
%
|
|
69.54
|
%
|
|
69.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balance
Sheet Data: (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
5,709,507
|
|
|
$
|
5,599,140
|
|
|
$
|
5,827,825
|
|
|
$
|
5,893,140
|
|
|
$
|
5,747,219
|
|
Investments
|
1,159,347
|
|
|
1,187,563
|
|
|
1,368,550
|
|
|
1,491,554
|
|
|
1,472,316
|
|
Cash
equivalents
|
351
|
|
|
98
|
|
|
160
|
|
|
541
|
|
|
237
|
|
Loans held for
sale
|
511,568
|
|
|
420,815
|
|
|
463,756
|
|
|
626,043
|
|
|
634,327
|
|
Loans
|
3,663,717
|
|
|
3,624,226
|
|
|
3,633,969
|
|
|
3,442,999
|
|
|
3,254,918
|
|
Total
interest-earning assets
|
5,334,983
|
|
|
5,232,702
|
|
|
5,466,435
|
|
|
5,561,137
|
|
|
5,361,798
|
|
Interest-bearing
deposits
|
2,870,174
|
|
|
2,826,405
|
|
|
2,786,288
|
|
|
2,767,265
|
|
|
2,494,537
|
|
Borrowings
|
1,184,424
|
|
|
1,185,596
|
|
|
1,330,934
|
|
|
1,425,545
|
|
|
1,397,300
|
|
Total
interest-bearing liabilities
|
4,054,598
|
|
|
4,012,001
|
|
|
4,117,222
|
|
|
4,192,810
|
|
|
3,891,837
|
|
Noninterest-bearing
deposits
|
1,075,637
|
|
|
1,011,485
|
|
|
1,081,148
|
|
|
1,061,917
|
|
|
1,195,709
|
|
Total stockholders'
equity
|
496,509
|
|
|
480,873
|
|
|
526,313
|
|
|
545,391
|
|
|
578,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
as stated
|
$
|
44,074
|
|
|
$
|
43,854
|
|
|
$
|
45,204
|
|
|
$
|
46,027
|
|
|
$
|
41,082
|
|
Add: Tax
equivalent adjust. - investment (4)
|
1,345
|
|
|
1,370
|
|
|
1,548
|
|
|
1,522
|
|
|
1,119
|
|
Tax equivalent adjust. - loans (4)
|
8
|
|
|
13
|
|
|
26
|
|
|
27
|
|
|
29
|
|
Tax equivalent net
interest income
|
$
|
45,427
|
|
|
$
|
45,237
|
|
|
$
|
46,778
|
|
|
$
|
47,576
|
|
|
$
|
42,230
|
|
Net interest margin
without tax adjustment
|
3.31
|
%
|
|
3.38
|
%
|
|
3.29
|
%
|
|
3.29
|
%
|
|
3.07
|
%
|
Net interest margin -
tax equivalent (4)
|
3.41
|
%
|
|
3.49
|
%
|
|
3.41
|
%
|
|
3.41
|
%
|
|
3.16
|
%
|
Yield on earning
assets without tax adjustment
|
3.69
|
%
|
|
3.77
|
%
|
|
3.67
|
%
|
|
3.70
|
%
|
|
3.59
|
%
|
Yield on earning
assets - tax equivalent (4)
|
3.79
|
%
|
|
3.87
|
%
|
|
3.79
|
%
|
|
3.81
|
%
|
|
3.67
|
%
|
Yield on
interest-bearing liabilities
|
0.50
|
%
|
|
0.50
|
%
|
|
0.50
|
%
|
|
0.53
|
%
|
|
0.71
|
%
|
Net interest spread
without tax adjustment
|
3.19
|
%
|
|
3.27
|
%
|
|
3.17
|
%
|
|
3.17
|
%
|
|
2.88
|
%
|
Net interest spread -
tax equivalent (4)
|
3.29
|
%
|
|
3.37
|
%
|
|
3.29
|
%
|
|
3.28
|
%
|
|
2.96
|
%
|
Footnotes:
|
|
(1)
|
Refer to
Reconciliation of U.S. GAAP Financial Measures for a reconciliation
to GAAP.
|
(2)
|
Efficiency ratio is
determined by dividing noninterest expense by an amount equal to
net interest income plus noninterest income, adjusted for gains or
losses from investment securities.
|
(3)
|
Average
balances are daily averages.
|
(4)
|
Adjustment reflects
tax-exempt interest income on an equivalent before-tax basis
assuming a tax rate of 35.0%
|
SUMMARY OF KEY
YEAR-TO-DATE FINANCIAL DATA
|
(dollars in
thousands)
|
Unaudited
|
|
|
|
For the Six Months
Ended
June 30,
|
|
|
2014
|
|
|
2013
|
|
Condensed Income
Data:
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
87,928
|
|
|
$
|
81,765
|
|
Provision for loan
losses
|
|
4,100
|
|
|
1,000
|
|
Total noninterest
income
|
|
68,045
|
|
|
85,820
|
|
Total noninterest
expense
|
|
117,643
|
|
|
112,026
|
|
Income before income
taxes
|
|
34,230
|
|
|
54,559
|
|
Income tax
expense
|
|
14,874
|
|
|
21,685
|
|
Net income
|
|
19,356
|
|
|
32,874
|
|
Preferred dividends
and discounts
|
|
(2,000)
|
|
|
(7,441)
|
|
Net income applicable
to common stockholders
|
|
$
|
17,356
|
|
|
$
|
25,433
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
of Performance: (1)
|
|
|
|
|
|
|
Revenue
|
|
$
|
155,938
|
|
|
$
|
167,578
|
|
Pre-tax,
pre-provision operating earnings
|
|
37,809
|
|
|
60,293
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
Basic income per
common share
|
|
$
|
0.57
|
|
|
$
|
0.84
|
|
Diluted income per
common share
|
|
0.56
|
|
|
0.83
|
|
Tangible book value
per common share
|
|
13.60
|
|
|
12.22
|
|
Weighted average
common shares-basic
|
|
29,126,928
|
|
|
28,641,738
|
|
Weighted average
common shares-diluted
|
|
29,345,162
|
|
|
28,977,242
|
|
Common shares
outstanding-end of period
|
|
29,365,677
|
|
|
29,098,639
|
|
|
|
|
|
|
|
|
Performance Ratios
(Annualized):
|
|
|
|
|
|
|
Return on average
assets
|
|
0.68
|
%
|
|
1.15
|
%
|
Return on average
common equity
|
|
8.93
|
%
|
|
13.73
|
%
|
Efficiency ratio
(2)
|
|
75.44
|
%
|
|
66.85
|
%
|
|
|
|
|
|
|
|
Average Balance
Sheet Data: (3)
|
|
|
|
|
|
|
Total
assets
|
|
$
|
5,654,627
|
|
|
$
|
5,694,995
|
|
Investments
|
|
1,173,377
|
|
|
1,416,575
|
|
Cash
equivalents
|
|
225
|
|
|
395
|
|
Loans held for
sale
|
|
466,442
|
|
|
662,573
|
|
Loans
|
|
3,644,079
|
|
|
3,216,480
|
|
Total
interest-earning assets
|
|
5,284,123
|
|
|
5,296,023
|
|
Interest-bearing
deposits
|
|
2,848,408
|
|
|
2,459,847
|
|
Borrowings
|
|
1,185,007
|
|
|
1,309,129
|
|
Total
interest-bearing liabilities
|
|
4,033,415
|
|
|
3,768,976
|
|
Noninterest-bearing
deposits
|
|
1,043,738
|
|
|
1,264,451
|
|
Total stockholders'
equity
|
|
488,734
|
|
|
574,418
|
|
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Margin:
|
|
|
|
|
|
|
Net interest income
as stated
|
|
$
|
87,928
|
|
|
$
|
81,765
|
|
Add: Tax
equivalent adjust. - investment (4)
|
|
2,715
|
|
|
1,888
|
|
Tax equivalent adjust. - loans (4)
|
|
21
|
|
|
58
|
|
Tax equivalent net
interest income
|
|
$
|
90,664
|
|
|
$
|
83,711
|
|
Net interest margin
without tax adjust.
|
|
3.35
|
%
|
|
3.10
|
%
|
Net interest margin -
tax equivalent (4)
|
|
3.45
|
%
|
|
3.18
|
%
|
Yield on earning
assets without tax adjust.
|
|
3.73
|
%
|
|
3.63
|
%
|
Yield on earning
assets - tax equivalent (4)
|
|
3.83
|
%
|
|
3.70
|
%
|
Yield on
interest-bearing liabilities
|
|
0.50
|
%
|
|
0.74
|
%
|
Net interest spread -
without tax adjust.
|
|
3.23
|
%
|
|
2.89
|
%
|
Net interest spread -
tax equivalent (4)
|
|
3.33
|
%
|
|
2.96
|
%
|
Footnotes:
|
|
(1)
|
Refer to
Reconciliation of U.S. GAAP Financial Measures for a reconciliation
to GAAP.
|
(2)
|
Efficiency ratio is
determined by dividing noninterest expense by an amount equal to
net interest income plus noninterest income, adjusted for gains or
losses from investment securities.
|
(3)
|
Average balances are
daily averages.
|
(4)
|
Adjustment reflects
tax-exempt interest income on an equivalent before-tax basis
assuming a tax rate of 35.0%
|
SUMMARY OF KEY
PERIOD-END FINANCIAL DATA
|
(dollars in
thousands)
|
Unaudited
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
Condensed Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
$
|
1,093,079
|
|
|
$
|
1,100,056
|
|
|
$
|
1,120,731
|
|
|
$
|
1,420,906
|
|
|
$
|
1,434,326
|
|
Loans held for
sale
|
697,155
|
|
|
436,086
|
|
|
473,890
|
|
|
498,276
|
|
|
693,937
|
|
Loans
|
3,693,003
|
|
|
3,651,013
|
|
|
3,648,375
|
|
|
3,628,658
|
|
|
3,302,548
|
|
Allowance for loan
losses
|
81,687
|
|
|
82,891
|
|
|
81,864
|
|
|
85,013
|
|
|
83,576
|
|
Total
assets
|
5,963,055
|
|
|
5,653,018
|
|
|
5,685,818
|
|
|
6,014,694
|
|
|
5,901,370
|
|
Total
deposits
|
3,999,540
|
|
|
3,953,385
|
|
|
3,650,983
|
|
|
3,697,196
|
|
|
3,692,426
|
|
Total
borrowings
|
1,362,791
|
|
|
1,129,704
|
|
|
1,464,934
|
|
|
1,652,258
|
|
|
1,515,462
|
|
Total stockholders'
equity
|
499,295
|
|
|
482,560
|
|
|
464,551
|
|
|
544,719
|
|
|
560,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
$
|
72,716
|
|
|
$
|
72,936
|
|
|
$
|
81,825
|
|
|
$
|
86,045
|
|
|
$
|
69,539
|
|
Nonperforming
assets
|
79,975
|
|
|
82,886
|
|
|
91,874
|
|
|
100,434
|
|
|
89,333
|
|
Allowance for loan
losses to total loans
|
2.21
|
%
|
|
2.27
|
%
|
|
2.24
|
%
|
|
2.34
|
%
|
|
2.53
|
%
|
Allowance for loan
losses to nonperforming loans
|
112.34
|
%
|
|
113.65
|
%
|
|
100.05
|
%
|
|
98.80
|
%
|
|
120.19
|
%
|
Nonperforming assets
to total loans plus repossessed property
|
2.16
|
%
|
|
2.26
|
%
|
|
2.51
|
%
|
|
2.76
|
%
|
|
2.69
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Resources
(Taylor Capital Group, Inc.):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital (to
Risk Weighted Assets)
|
12.64
|
%
|
|
12.93
|
%
|
|
12.65
|
%
|
|
14.15
|
%
|
|
15.22
|
%
|
Tier I Capital (to
Risk Weighted Assets)
|
11.38
|
%
|
|
11.67
|
%
|
|
11.40
|
%
|
|
12.89
|
%
|
|
13.96
|
%
|
Leverage (to average
assets)
|
9.67
|
%
|
|
9.73
|
%
|
|
9.18
|
%
|
|
10.30
|
%
|
|
10.87
|
%
|
Total
Capital
|
$
|
610,735
|
|
|
$
|
600,876
|
|
|
$
|
591,908
|
|
|
$
|
663,917
|
|
|
$
|
679,379
|
|
Tier I
Capital
|
550,057
|
|
|
542,464
|
|
|
533,123
|
|
|
604,920
|
|
|
623,221
|
|
COMPOSITION OF LOAN
PORTFOLIO (unaudited)
|
(dollars in
thousands)
|
|
The following table presents
the composition of the Company's loan portfolio as of the dates
indicated:
|
|
|
|
June 30,
2014
|
|
March 31,
2014
|
|
December 31,
2013
|
Loans
|
|
Balance
|
|
Percent
of
Gross
Loans
|
|
Balance
|
|
Percent
of
Gross
Loans
|
|
Balance
|
|
Percent
of
Gross
Loans
|
Commercial and
industrial
|
|
$
|
1,997,356
|
|
|
53.9
|
%
|
|
$
|
1,940,095
|
|
|
53.0
|
%
|
|
$
|
1,935,377
|
|
|
52.9
|
%
|
Commercial real
estate secured
|
|
1,084,034
|
|
|
29.2
|
|
|
1,109,042
|
|
|
30.3
|
|
|
1,124,227
|
|
|
30.7
|
|
Residential
construction and land
|
|
46,565
|
|
|
1.3
|
|
|
45,417
|
|
|
1.2
|
|
|
46,079
|
|
|
1.3
|
|
Commercial
construction and land
|
|
134,521
|
|
|
3.6
|
|
|
132,729
|
|
|
3.6
|
|
|
121,682
|
|
|
3.3
|
|
Lease
receivables
|
|
156,968
|
|
|
4.2
|
|
|
143,091
|
|
|
3.9
|
|
|
132,013
|
|
|
3.6
|
|
Total commercial
loans
|
|
3,419,444
|
|
|
92.2
|
|
|
3,370,374
|
|
|
92.0
|
|
|
3,359,378
|
|
|
91.8
|
|
Consumer
|
|
288,256
|
|
|
7.8
|
|
|
294,546
|
|
|
8.0
|
|
|
301,377
|
|
|
8.2
|
|
Gross loans
|
|
3,707,700
|
|
|
100.0
|
%
|
|
3,664,920
|
|
|
100.0
|
%
|
|
3,660,755
|
|
|
100.0
|
%
|
Less: Unearned
discount
|
|
(14,697)
|
|
|
|
|
|
(13,907)
|
|
|
|
|
|
(12,380)
|
|
|
|
|
Total loans
|
|
3,693,003
|
|
|
|
|
|
3,651,013
|
|
|
|
|
|
3,648,375
|
|
|
|
|
Less: Loan loss
allowance
|
|
(81,687)
|
|
|
|
|
|
(82,891)
|
|
|
|
|
|
(81,864)
|
|
|
|
|
Net loans
|
|
$
|
3,611,316
|
|
|
|
|
|
$
|
3,568,122
|
|
|
|
|
|
$
|
3,566,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans Held for
Sale
|
|
$
|
697,155
|
|
|
|
|
|
$
|
436,086
|
|
|
|
|
|
$
|
473,890
|
|
|
|
|
The following table provides
details of the Company's commercial real estate
portfolio:
|
|
|
|
June 30,
2014
|
|
March 31,
2014
|
|
December 31,
2013
|
Commercial real
estate secured:
|
|
Balance
|
|
Percent
of
Total
|
|
Balance
|
|
Percent
of
Total
|
|
Balance
|
|
Percent
of
Total
|
Commercial non-owner
occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail strip centers
or malls
|
|
$
|
79,747
|
|
|
7.4
|
%
|
|
$
|
95,371
|
|
|
8.6
|
%
|
|
$
|
102,195
|
|
|
9.1
|
%
|
Office/mixed use
property
|
|
156,048
|
|
|
14.4
|
|
|
146,822
|
|
|
13.2
|
|
|
126,662
|
|
|
11.3
|
|
Commercial
properties
|
|
124,067
|
|
|
11.4
|
|
|
123,796
|
|
|
11.2
|
|
|
126,608
|
|
|
11.3
|
|
Specialized –
other
|
|
92,401
|
|
|
8.5
|
|
|
102,014
|
|
|
9.2
|
|
|
101,813
|
|
|
9.1
|
|
Other commercial
properties
|
|
23,421
|
|
|
2.2
|
|
|
18,639
|
|
|
1.7
|
|
|
25,483
|
|
|
2.3
|
|
Farmland
|
|
2,198
|
|
|
0.2
|
|
|
2,227
|
|
|
0.2
|
|
|
2,256
|
|
|
0.2
|
|
Subtotal commercial
non-owner occupied
|
|
477,882
|
|
|
44.1
|
|
|
488,869
|
|
|
44.1
|
|
|
485,017
|
|
|
43.3
|
|
Commercial
owner-occupied
|
|
476,392
|
|
|
43.9
|
|
|
491,413
|
|
|
44.3
|
|
|
513,126
|
|
|
45.5
|
|
Multi-family
properties
|
|
129,760
|
|
|
12.0
|
|
|
128,760
|
|
|
11.6
|
|
|
126,084
|
|
|
11.2
|
|
Total commercial real
estate secured
|
|
$
|
1,084,034
|
|
|
100.0
|
%
|
|
$
|
1,109,042
|
|
|
100.0
|
%
|
|
$
|
1,124,227
|
|
|
100.0
|
%
|
CREDIT QUALITY
(unaudited)
|
(dollars in
thousands)
|
|
|
|
At or for the
Three Months Ended
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
Nonperforming
Assets:
|
|
|
|
|
|
|
|
|
|
Loans contractually
past due 90 days or more but still accruing interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Nonaccrual
loans:
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
|
$
|
18,008
|
|
|
$
|
17,841
|
|
|
$
|
15,879
|
|
Commercial real estate
secured
|
|
24,937
|
|
|
26,589
|
|
|
37,474
|
|
Residential
construction and land
|
|
—
|
|
|
—
|
|
|
—
|
|
Commercial
construction and land
|
|
22,550
|
|
|
22,550
|
|
|
22,550
|
|
Consumer
|
|
7,221
|
|
|
5,956
|
|
|
5,922
|
|
Total nonaccrual
loans
|
|
72,716
|
|
|
72,936
|
|
|
81,825
|
|
Total nonperforming
loans
|
|
72,716
|
|
|
72,936
|
|
|
81,825
|
|
Other real estate
owned and repossessed assets
|
|
7,259
|
|
|
9,950
|
|
|
10,049
|
|
Total nonperforming
assets
|
|
$
|
79,975
|
|
|
$
|
82,886
|
|
|
$
|
91,874
|
|
|
|
|
|
|
|
|
|
|
|
Other Credit
Quality Information:
|
|
|
|
|
|
|
|
|
|
Commercial criticized
and classified loans (1)
|
|
|
|
|
|
|
|
|
|
Special
mention
|
|
$
|
102,619
|
|
|
$
|
70,227
|
|
|
$
|
73,093
|
|
Substandard
|
|
42,748
|
|
|
47,368
|
|
|
39,012
|
|
Nonaccrual
|
|
65,495
|
|
|
66,980
|
|
|
75,903
|
|
Total commercial
criticized and classified loans
|
|
$
|
210,862
|
|
|
$
|
184,575
|
|
|
$
|
188,008
|
|
Loans contractually
past due 30 – 89 days and still accruing
|
|
$
|
8,270
|
|
|
$
|
8,035
|
|
|
$
|
5,189
|
|
Performing
restructured loans
|
|
28,235
|
|
|
35,605
|
|
|
20,736
|
|
Recorded balance of
impaired loans
|
|
93,793
|
|
|
106,066
|
|
|
96,451
|
|
Allowance for loan
losses related to impaired loans
|
|
18,571
|
|
|
18,049
|
|
|
13,687
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses Summary:
|
|
|
|
|
|
|
|
|
|
Allowance at
beginning of period
|
|
$
|
82,891
|
|
|
$
|
81,864
|
|
|
$
|
85,013
|
|
(Charge-offs), net of
recoveries:
|
|
|
|
|
|
|
|
|
|
Commercial and
commercial real estate
|
|
(2,396)
|
|
|
(1,819)
|
|
|
(1,713)
|
|
Real estate –
construction and land
|
|
20
|
|
|
426
|
|
|
(2,232)
|
|
Consumer
|
|
(328)
|
|
|
(180)
|
|
|
(304)
|
|
Total net
charge-offs
|
|
(2,704)
|
|
|
(1,573)
|
|
|
(4,249)
|
|
Provision for loan
losses
|
|
1,500
|
|
|
2,600
|
|
|
1,100
|
|
Allowance at end of
period
|
|
$
|
81,687
|
|
|
$
|
82,891
|
|
|
$
|
81,864
|
|
|
|
|
|
|
|
|
|
|
|
Key Credit
Ratios:
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
to total loans
|
|
1.97
|
%
|
|
2.00
|
%
|
|
2.24
|
%
|
Nonperforming assets
to total loans plus repossessed property
|
|
2.16
|
%
|
|
2.26
|
%
|
|
2.51
|
%
|
Nonperforming assets
to total assets
|
|
1.34
|
%
|
|
1.47
|
%
|
|
1.62
|
%
|
Annualized net
charge-offs to average total loans
|
|
0.30
|
%
|
|
0.17
|
%
|
|
0.47
|
%
|
Allowance to total
loans at end of period
|
|
2.21
|
%
|
|
2.27
|
%
|
|
2.24
|
%
|
Allowance to
nonperforming loans
|
|
112.34
|
%
|
|
113.65
|
%
|
|
100.05
|
%
|
30 – 89 days past due
to total loans
|
|
0.22
|
%
|
|
0.22
|
%
|
|
0.14
|
%
|
(1)
|
Commercial criticized
and classified loans excludes consumer loans.
|
LOAN PORTFOLIO AGING
(unaudited)
|
(dollars in
thousands)
|
|
|
|
As of June 30,
2014
|
|
|
30-89
Days
Past Due
|
|
>90
Days
Past Due
and Still
Accruing
|
|
Nonaccrual
|
|
Current
|
|
Total
Loans
|
|
% of
Total
Loans
|
|
Allowance for
Loan Loss
Allocation
|
Commercial and
industrial
|
|
$
|
3,150
|
|
|
$
|
—
|
|
|
$
|
18,008
|
|
|
$
|
1,976,198
|
|
|
$
|
1,997,356
|
|
|
54
|
%
|
|
$
|
42,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate secured:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial non-owner
occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail strip centers
or malls
|
|
1,500
|
|
|
—
|
|
|
13,213
|
|
|
65,034
|
|
|
79,747
|
|
|
2
|
%
|
|
2,232
|
|
Office/mixed use
property
|
|
105
|
|
|
—
|
|
|
302
|
|
|
155,641
|
|
|
156,048
|
|
|
4
|
%
|
|
2,472
|
|
Commercial
properties
|
|
—
|
|
|
—
|
|
|
380
|
|
|
123,687
|
|
|
124,067
|
|
|
3
|
%
|
|
3,005
|
|
Specialized –
other
|
|
—
|
|
|
—
|
|
|
4,528
|
|
|
87,873
|
|
|
92,401
|
|
|
3
|
%
|
|
1,295
|
|
Other commercial
properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,421
|
|
|
23,421
|
|
|
1
|
%
|
|
325
|
|
Farmland
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,198
|
|
|
2,198
|
|
|
—
|
%
|
|
31
|
|
Subtotal commercial
non-owner occupied
|
|
1,605
|
|
|
—
|
|
|
18,423
|
|
|
457,854
|
|
|
477,882
|
|
|
13
|
%
|
|
9,360
|
|
Commercial
owner-occupied
|
|
—
|
|
|
—
|
|
|
6,353
|
|
|
470,039
|
|
|
476,392
|
|
|
13
|
%
|
|
7,931
|
|
Multi-family
properties
|
|
203
|
|
|
—
|
|
|
161
|
|
|
129,396
|
|
|
129,760
|
|
|
4
|
%
|
|
2,041
|
|
Total commercial real
estate secured
|
|
1,808
|
|
|
—
|
|
|
24,937
|
|
|
1,057,289
|
|
|
1,084,034
|
|
|
30
|
%
|
|
19,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
construction and land:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,567
|
|
|
32,567
|
|
|
1
|
%
|
|
2,354
|
|
Land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,998
|
|
|
13,998
|
|
|
—
|
%
|
|
1,090
|
|
Total residential
construction and land
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,565
|
|
|
46,565
|
|
|
1
|
%
|
|
3,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land
|
|
—
|
|
|
—
|
|
|
22,550
|
|
|
111,971
|
|
|
134,521
|
|
|
4
|
%
|
|
8,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease receivables,
net of unearned discount
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142,271
|
|
|
142,271
|
|
|
4
|
%
|
|
854
|
|
Total commercial
loans
|
|
4,958
|
|
|
—
|
|
|
65,495
|
|
|
3,334,294
|
|
|
3,404,747
|
|
|
93
|
%
|
|
74,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
|
3,312
|
|
|
—
|
|
|
7,221
|
|
|
277,723
|
|
|
288,256
|
|
|
7
|
%
|
|
7,100
|
|
Total loans
|
|
$
|
8,270
|
|
|
$
|
—
|
|
|
$
|
72,716
|
|
|
$
|
3,612,017
|
|
|
$
|
3,693,003
|
|
|
100
|
%
|
|
$
|
81,687
|
|
FUNDING LIABILITIES
(unaudited)
|
(dollars in
thousands)
|
|
The following table presents
the distribution of the Company's average deposit account balances
for the periods indicated:
|
|
|
For the Three
Months Ended
|
|
June 30,
2014
|
|
March 31,
2014
|
|
June 30,
2013
|
|
Average
Balance
|
|
Percent
of
Deposits
|
|
Average
Balance
|
|
Percent
of
Deposits
|
|
Average
Balance
|
|
Percent
of
Deposits
|
Noninterest-bearing
deposits
|
$
|
1,075,637
|
|
|
27.3
|
%
|
|
$
|
1,011,485
|
|
|
26.4
|
%
|
|
$
|
1,195,709
|
|
|
32.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial interest
checking
|
378,228
|
|
|
9.6
|
|
|
377,103
|
|
|
9.8
|
|
|
159,627
|
|
|
4.3
|
|
NOW
accounts
|
548,627
|
|
|
13.9
|
|
|
555,784
|
|
|
14.5
|
|
|
674,375
|
|
|
18.3
|
|
Savings
deposits
|
41,408
|
|
|
1.0
|
|
|
40,600
|
|
|
1.1
|
|
|
40,920
|
|
|
1.1
|
|
Money market
accounts
|
635,176
|
|
|
16.1
|
|
|
694,531
|
|
|
18.1
|
|
|
768,425
|
|
|
20.8
|
|
Brokered money market
deposits
|
3,790
|
|
|
0.1
|
|
|
9,085
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
Certificates of
deposit
|
519,660
|
|
|
13.2
|
|
|
476,370
|
|
|
12.4
|
|
|
550,454
|
|
|
14.9
|
|
Brokered certificates
of deposit
|
382,430
|
|
|
9.7
|
|
|
290,749
|
|
|
7.6
|
|
|
162,299
|
|
|
4.4
|
|
CDARS time
deposits
|
297,058
|
|
|
7.5
|
|
|
334,262
|
|
|
8.7
|
|
|
127,802
|
|
|
3.5
|
|
Public time
deposits
|
63,797
|
|
|
1.6
|
|
|
47,921
|
|
|
1.2
|
|
|
10,635
|
|
|
0.3
|
|
Total
interest-bearing deposits
|
2,870,174
|
|
|
72.7
|
|
|
2,826,405
|
|
|
73.6
|
|
|
2,494,537
|
|
|
67.6
|
|
Total
deposits
|
$
|
3,945,811
|
|
|
100.0
|
%
|
|
$
|
3,837,890
|
|
|
100.0
|
%
|
|
$
|
3,690,246
|
|
|
100.0
|
%
|
The following table sets
forth the period-end balances of total deposits as of each of the
dates indicated below.
|
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
Noninterest-bearing
deposits
|
|
$
|
1,113,886
|
|
|
$
|
1,068,207
|
|
|
$
|
1,048,946
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
Commercial interest
checking
|
|
373,533
|
|
|
373,467
|
|
|
377,631
|
|
NOW
accounts
|
|
545,817
|
|
|
572,259
|
|
|
566,269
|
|
Savings
accounts
|
|
40,485
|
|
|
41,229
|
|
|
40,357
|
|
Money market
accounts
|
|
603,134
|
|
|
684,358
|
|
|
698,302
|
|
Brokered money market
deposits
|
|
13,743
|
|
|
6,081
|
|
|
51,124
|
|
Certificates of
deposit
|
|
517,645
|
|
|
507,239
|
|
|
472,222
|
|
Brokered certificates
of deposit
|
|
415,272
|
|
|
428,502
|
|
|
203,715
|
|
CDARS time
deposits
|
|
298,837
|
|
|
214,479
|
|
|
142,835
|
|
Public time
deposits
|
|
77,188
|
|
|
57,564
|
|
|
49,582
|
|
Total interest-bearing
deposits
|
|
2,885,654
|
|
|
2,885,178
|
|
|
2,602,037
|
|
Total
deposits
|
|
$
|
3,999,540
|
|
|
$
|
3,953,385
|
|
|
$
|
3,650,983
|
|
SUMMARY OF QUARTERLY
SEGMENT FINANCIAL DATA (unaudited)
|
(dollars in
thousands)
|
|
|
|
For the Three
Months Ended
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
|
BANKING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
40,041
|
|
|
$
|
40,528
|
|
|
$
|
40,975
|
|
|
$
|
40,780
|
|
|
$
|
37,175
|
|
|
Provision for loan
losses
|
|
1,505
|
|
|
2,603
|
|
|
1,210
|
|
|
233
|
|
|
946
|
|
|
Total noninterest
income
|
|
6,664
|
|
|
6,001
|
|
|
12,428
|
|
|
7,284
|
|
|
7,528
|
|
|
Total noninterest
expense
|
|
26,317
|
|
|
25,947
|
|
|
28,363
|
|
|
23,473
|
|
|
25,770
|
|
|
Income before income
taxes
|
|
18,883
|
|
|
17,979
|
|
|
23,830
|
|
|
24,358
|
|
|
17,987
|
|
|
Income tax
expense
|
|
7,458
|
|
|
7,102
|
|
|
9,413
|
|
|
9,621
|
|
|
7,105
|
|
|
Net income
|
|
$
|
11,425
|
|
|
$
|
10,877
|
|
|
$
|
14,417
|
|
|
$
|
14,737
|
|
|
$
|
10,882
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
|
MORTGAGE
BANKING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
5,443
|
|
|
$
|
4,735
|
|
|
$
|
5,517
|
|
|
$
|
6,499
|
|
|
$
|
5,742
|
|
|
Provision for loan
losses
|
|
(5)
|
|
|
(3)
|
|
|
(110)
|
|
|
67
|
|
|
(246)
|
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan origination
income
|
|
18,591
|
|
|
11,292
|
|
|
13,943
|
|
|
17,249
|
|
|
29,355
|
|
|
Net servicing
income
|
|
13,650
|
|
|
11,763
|
|
|
13,226
|
|
|
7,896
|
|
|
9,176
|
|
|
Total noninterest
income
|
|
32,241
|
|
|
23,055
|
|
|
27,169
|
|
|
25,145
|
|
|
38,531
|
|
|
Total noninterest
expense
|
|
32,459
|
|
|
27,943
|
|
|
29,222
|
|
|
29,063
|
|
|
29,086
|
|
|
Income (loss) before
income taxes
|
|
5,230
|
|
|
(150)
|
|
|
3,574
|
|
|
2,514
|
|
|
15,433
|
|
|
Income tax expense
(benefit)
|
|
1,918
|
|
|
(278)
|
|
|
1,033
|
|
|
(19)
|
|
|
4,928
|
|
|
Net income
|
|
$
|
3,312
|
|
|
$
|
128
|
|
|
$
|
2,541
|
|
|
$
|
2,533
|
|
|
$
|
10,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination
Volume
|
|
$
|
1,346,150
|
|
|
$
|
1,052,106
|
|
|
$
|
1,169,098
|
|
|
$
|
1,596,431
|
|
|
$
|
1,874,248
|
|
|
Refinance
%
|
|
31
|
%
|
|
41
|
%
|
|
40
|
%
|
|
37
|
%
|
|
62
|
%
|
|
Purchase %
|
|
69
|
%
|
|
59
|
%
|
|
60
|
%
|
|
63
|
%
|
|
38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-End
Balances
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
|
Mortgage servicing
book
|
|
$
|
20,881,040
|
|
|
$
|
20,136,044
|
|
|
$
|
18,496,230
|
|
|
$
|
16,431,269
|
|
|
$
|
12,740,176
|
|
|
Mortgage servicing
rights
|
|
227,730
|
|
|
227,695
|
|
|
216,111
|
|
|
184,237
|
|
|
145,729
|
|
|
The Company has identified two operating segments for purposes
of financial reporting: Banking and Mortgage Banking. The
Banking operating segment includes commercial banking, asset-based
lending, equipment finance, retail banking and all other functions
that support those units. The Mortgage Banking operating
segment originates mortgage loans for sale to investors and for the
Company's portfolio through its retail and third party
channels. This segment also services mortgage loans for
various investors and for loans owned by the Company. Segment
results are presented based on our management accounting
practices. The information presented in our segment reporting
is based on internal allocations, which involve management judgment
and is subject to periodic adjustments and enhancements. In
addition, the Company utilizes an Other category that includes
subordinated debt expense, certain parent company activities,
expenses related to the pending merger with MB Financial, and
residual income tax expense or benefit.
RECONCILIATION OF
U.S. GAAP FINANCIAL MEASURES (unaudited)
|
(dollars in
thousands)
|
|
The following reconciles the
income before income taxes to pre-tax, pre-provision operating
earnings for the periods indicated.
|
|
|
|
For the Three
Months Ended
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
|
Income before income
taxes
|
|
$
|
18,441
|
|
|
$
|
15,789
|
|
|
$
|
21,665
|
|
|
$
|
23,657
|
|
|
$
|
26,212
|
|
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
loan losses
|
|
1,500
|
|
|
2,600
|
|
|
1,100
|
|
|
300
|
|
|
700
|
|
|
Nonperforming
asset expense
|
|
(652)
|
|
|
166
|
|
|
2,246
|
|
|
(836)
|
|
|
(1,198)
|
|
|
Credit costs
subtotal
|
|
848
|
|
|
2,766
|
|
|
3,346
|
|
|
(536)
|
|
|
(498)
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales
of investment securities
|
|
—
|
|
|
(35)
|
|
|
(5,891)
|
|
|
(61)
|
|
|
(6)
|
|
|
Early
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,380
|
|
|
Other
subtotal
|
|
—
|
|
|
(35)
|
|
|
(5,891)
|
|
|
(61)
|
|
|
5,374
|
|
|
Pre-tax,
pre-provision operating earnings
|
|
$
|
19,289
|
|
|
$
|
18,520
|
|
|
$
|
19,120
|
|
|
$
|
23,060
|
|
|
$
|
31,088
|
|
|
|
The following details the
components of revenue for the periods indicated.
|
|
|
|
For the Three
Months Ended
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
|
Net interest
income
|
|
$
|
44,074
|
|
|
$
|
43,854
|
|
|
$
|
45,204
|
|
|
$
|
46,027
|
|
|
$
|
41,082
|
|
|
Noninterest
income
|
|
38,947
|
|
|
29,098
|
|
|
39,640
|
|
|
32,472
|
|
|
46,101
|
|
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of
investment securities
|
|
—
|
|
|
(35)
|
|
|
(5,891)
|
|
|
(61)
|
|
|
(6)
|
|
|
Revenue
|
|
$
|
83,021
|
|
|
$
|
72,917
|
|
|
$
|
78,953
|
|
|
$
|
78,438
|
|
|
$
|
87,177
|
|
|
|
The following details the
components of normalized net income for the periods
indicated.
|
|
|
|
For the Three
Months Ended
|
|
|
Jun. 30,
2014
|
|
Mar. 31,
2014
|
|
Dec. 31,
2013
|
|
Sep. 30,
2013
|
|
Jun. 30,
2013
|
|
Net income
|
|
$
|
9,412
|
|
|
$
|
9,944
|
|
|
$
|
14,964
|
|
|
$
|
14,169
|
|
|
$
|
15,617
|
|
|
Normalizing items
(after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of
investment securities
|
|
—
|
|
|
(22)
|
|
|
(3,652)
|
|
|
(38)
|
|
|
(4)
|
|
|
Fines and
penalties
|
|
4,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of standby
commitment
|
|
1,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger and other
strategic initiative expense
|
|
1,980
|
|
|
418
|
|
|
2,786
|
|
|
1,243
|
|
|
22
|
|
|
Early extinguishment
of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,336
|
|
|
Normalized net
income
|
|
$
|
16,660
|
|
|
$
|
10,340
|
|
|
$
|
14,098
|
|
|
$
|
15,374
|
|
|
$
|
18,971
|
|
|
The Company's accounting and reporting policies conform to U.S.
generally accepted accounting principles ("GAAP") and general
practice within the banking industry. Management uses certain
non-GAAP financial measures to evaluate the Company's financial
performance and has provided the non-GAAP measures of pre-tax,
pre-provision operating earnings, revenue and normalized net
income. Management believes that these measures are useful
because they provide a more comparable basis for evaluating
financial performance from period to period. In the pre-tax,
pre-provision operating earnings non-GAAP financial measure, the
provision for loan losses, nonperforming asset expense and certain
non-recurring items, such as gains and losses on investment
securities and early extinguishment of debt are excluded from the
determination of operating results. The non-GAAP measure of
revenue is calculated as the sum of net interest income and
noninterest income adjusted by investment securities gains and
losses. The normalized net income non-GAAP measure is equal
to net income adjusted for gains and losses on investment
securities, fines and penalties, fair value of standby commitment,
merger and other strategic initiative expense and early
extinguishment of debt. These are items which management has
deemed to be outside the normal course of business operations.
SOURCE Taylor Capital Group, Inc.