COLUMBIA, S.C.–(BUSINESS WIRE)–South State Corporation (NASDAQ: SSB) today released its unaudited
results of operations and other financial information for the
three-month period ended March 31, 2019. Highlights for the first
quarter of 2019 include the following:
- GAAP diluted EPS improvement of 8.7% compared to last year
- Adjusted diluted EPS declined by 9.4% compared to last year
- Loan growth totaled $128.3 million, or 4.7% annualized for the quarter
-
Deposit growth totaled $272.0 million, or 9.5% annualized for the
quarter, with 58% of the growth from noninterest bearing deposits -
Noninterest expense decreased by $15.2 million, or 13.4%, compared to
last year -
Adjusted noninterest expense declined by $5.0 million, or 5.0%,
compared to last year -
Asset quality remains strong as net charge-offs on non-acquired loans
totaled 2 basis points annualized, or $493,000, during the first
quarter of 2019 -
Non-performing assets to total assets were 0.27%, and remain at
historically low level - Repurchased 500,000 common shares in Q1 2019 for $33.3 million
-
Tangible book value per share improved 9% annualized to $37.15 per
share, and the dividend increased $0.05 per share, or 15.2%, compared
to last year
During the first quarter of 2019, South State positioned the balance
sheet for future growth, and took other actions to improve profitability
and include the following:
- Secured longer-term funding of $500.0 million over 4 to 5 year period;
-
Increased on-hand liquidity by approximately $600.0 million in order
to fund future loan / securities growth; -
With the current environment, plan to continue the systematic
repurchase of common shares of the Company; and -
Identified annual cost saving initiatives of approximately $13.0
million (pre-tax), and expect to recognize $10.0 million in 2019,
which includes the previously announced branch consolidations of $2.5
million annualized cost savings; allowing for limited growth in
noninterest expense.
“The first quarter marked a positive start to the year,” said Robert R.
Hill, Jr., CEO of South State Corporation. “South State experienced
solid loan and deposit growth, exhibited good expense control, and
positioned the balance sheet to accommodate further loan growth. We also
continue to utilize our capital position to enhance shareholder value
through increased dividends and common stock repurchases. Additionally,
during the past few weeks we moved into a new headquarters in Richmond,
Virginia and opened the first of two new offices in Raleigh, North
Carolina. Both of these markets demonstrated strong results in the first
quarter. Finally, we added 13 new bankers to our sales team and
experienced further adoption of our digital platform.”
Quarterly Cash Dividend and Common Stock Repurchase Plan
The Board of Directors of South State Corporation declared a quarterly
cash dividend on April 25, 2019, of $0.40 per share payable on its
common stock. This per share amount is higher by $0.02 per share, or
5.3%, compared to last quarter and $0.06 per share, or 17.6%, higher
than the same quarter one year ago. The dividend will be payable on May
17, 2019 to shareholders of record as of May 10, 2019.
As previously announced, the Board of Directors of South State
Corporation announced the authorization for the repurchase of up to
1,000,000 common shares of the Company’s common stock (the “Repurchase
Program”). During the first quarter of 2019, the Company bought back
500,000 shares during the first week of February at an average price of
$66.53 per share, or $33.3 million. This results in an estimated
increase in diluted EPS annually of approximately $0.08 per share. The
Company intends to remain active in repurchasing shares and will seek
authorization for additional share repurchases given the current
environment and the Company’s capital strategy. The Company is not
obligated to repurchase any such shares under the Repurchase Program,
but any such purchases will be executed in open market transactions at
prevailing market prices, in privately negotiated transactions, or by
other means in accordance with federal securities laws. Repurchases
under any approved Repurchase Program must be executed within one year
or would require additional Federal Reserve approval.
In addition, as a part of the company’s capital strategy, the Company
intends to continue managing capital within the established long-term
range of 8% to 9% of tangible common equity to tangible assets; and the
dividend payout range for shareholders has been adjusted to 30% to 35%
annually, from the historical range of 25% to 30%.
Branch consolidation and other cost initiatives – 2019
In mid-January 2019, the Company scheduled the close of 13 branch
locations during 2019. Most are scheduled for the second quarter of
2019. In addition, certain cost reduction initiatives began during the
first quarter of 2019. The expected cost associated with these closures
and cost initiatives has been estimated to be approximately $3.2
million, and primarily includes personnel, facilities and equipment
cost. The annual savings of these closures and cost initiatives is
expected to be $13.0 million, and the impact on 2019 is anticipated to
be approximately $10.0 million.
|
First Quarter 2019 Financial Performance |
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| Three Months Ended | |||||||||||||||||||||
| (Dollars in thousands, except per share data) | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | ||||||||||||||||
| INCOME STATEMENT | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||
| Interest income | |||||||||||||||||||||
| Loans, including fees (8) | $ | 131,834 | $ | 132,541 | $ | 132,043 | $ | 129,852 | $ | 127,041 | |||||||||||
|
Investment securities, federal funds sold and securities purchased |
11,556 | 11,327 | 11,517 | 11,880 | 11,007 | ||||||||||||||||
| Total interest income | 143,390 | 143,868 | 143,560 | 141,732 | 138,048 | ||||||||||||||||
| Interest expense | |||||||||||||||||||||
| Deposits | 16,645 | 15,310 | 13,220 | 10,009 | 6,913 | ||||||||||||||||
|
Federal funds purchased, securities sold under agreements to |
3,478 | 2,166 | 2,051 | 2,161 | 2,162 | ||||||||||||||||
| Total interest expense | 20,123 | 17,476 | 15,271 | 12,170 | 9,075 | ||||||||||||||||
| Net interest income | 123,267 | 126,392 | 128,289 | 129,562 | 128,973 | ||||||||||||||||
| Provision for loan losses | 1,488 | 3,734 | 3,117 | 4,478 | 2,454 | ||||||||||||||||
| Net interest income after provision for loan losses | 121,779 | 122,658 | 125,172 | 125,084 | 126,519 | ||||||||||||||||
| Noninterest income* | 32,058 | 35,642 | 32,027 | 37,525 | 40,555 | ||||||||||||||||
| Pre-tax operating expense* | 97,125 | 96,664 | 95,818 | 96,410 | 102,167 | ||||||||||||||||
| Branch consolid./acquisition and merger expense | 1,114 | — | 4,476 | 14,096 | 11,296 | ||||||||||||||||
| Total noninterest expense | 98,239 | 96,664 | 100,294 | 110,506 | 113,463 | ||||||||||||||||
| Income before provision for income taxes | 55,598 | 61,636 | 56,905 | 52,103 | 53,611 | ||||||||||||||||
| Provision for income taxes, includes deferred tax revaluation | 11,231 | 12,632 | 9,823 | 11,644 | 11,285 | ||||||||||||||||
| Net income | $ | 44,367 | $ | 49,004 | $ | 47,082 | $ | 40,459 | $ | 42,326 | |||||||||||
| Adjusted net income (non-GAAP) (3) | |||||||||||||||||||||
| Net income (GAAP) | $ | 44,367 | $ | 49,004 | $ | 47,082 | $ | 40,459 | $ | 42,326 | |||||||||||
| Securities losses (gains), net of tax | (432 | ) | 2 | 9 | 505 | — | |||||||||||||||
| Provision for income taxes, deferred tax revaluation | — | — | (1,602 | ) | 613 | — | |||||||||||||||
| FHLB prepayment penalty | 107 | — | — | — | — | ||||||||||||||||
| Branch consolid./acquisition and merger expense, net of tax | 782 | – | 3,577 | 11,112 | 8,918 | ||||||||||||||||
| Adjusted net income (non-GAAP) | $ | 44,824 | $ | 49,006 | $ | 49,066 | $ | 52,689 | $ | 51,244 | |||||||||||
| Basic earnings per common share | $ | 1.25 | $ | 1.36 | $ | 1.28 | $ | 1.10 | $ | 1.15 | |||||||||||
| Diluted earnings per common share | $ | 1.25 | $ | 1.35 | $ | 1.28 | $ | 1.09 | $ | 1.15 | |||||||||||
| Adjusted net income per common share – Basic (non-GAAP) (3) | $ | 1.26 | $ | 1.36 | $ | 1.34 | $ | 1.44 | $ | 1.40 | |||||||||||
| Adjusted net income per common share – Diluted (non-GAAP) (3) | $ | 1.26 | $ | 1.35 | $ | 1.33 | $ | 1.43 | $ | 1.39 | |||||||||||
| Dividends per common share | $ | 0.38 | $ | 0.36 | $ | 0.35 | $ | 0.34 | $ | 0.33 | |||||||||||
| Basic weighted-average common shares outstanding | 35,445,087 | 36,154,922 | 36,645,181 | 36,676,887 | 36,646,198 | ||||||||||||||||
| Diluted weighted-average common shares outstanding | 35,618,705 | 36,364,873 | 36,893,496 | 36,928,981 | 36,899,068 | ||||||||||||||||
| Effective tax rate | 20.20 | % | 20.49 | % | 17.26 | % | 22.35 | % | 21.05 | % | |||||||||||
|
* These lines include a reclassification of network costs |
|||||||||||||||||||||
The Company reported consolidated net income of $44.4 million, or $1.25
per diluted common share for the three-months ended March 31, 2019, a
$4.6 million decrease, or $0.10 per share decline in EPS compared to the
fourth quarter of 2018. Compared to the first quarter of 2018, net
income totaled $42.3 million, or $1.15 per diluted common share.
Weighted average diluted shares declined by 746,000, from the fourth
quarter of 2018, due to the continuation of the Company buying back
shares under the Repurchase Program, which improved first quarter
diluted EPS by $0.03 per diluted share. Net interest income was down
$3.1 million compared to the fourth quarter of 2018 on $478,000 lower
interest income and $2.6 million higher interest expense. The interest
income decline was primarily the result of acquired loan interest income
declining more than the increase in non-acquired loan interest income.
Overall acquired loan accretion declined by $525,000 in the first
quarter of 2019 compared to the fourth quarter of 2018. The increase in
interest expense was due to the continued competition within our markets
for deposits and an increase in borrowings from the FHLB. The Company’s
cost of interest-bearing liabilities was 0.89% for the first quarter of
2019, an increase of 0.11% from the fourth quarter of 2018. Compared to
the first quarter of 2018, cost of funds increased by 0.48% which was
primarily the result of rising interest rates and competition within our
markets. The total provision for loan losses decreased $2.2 million
compared to the fourth quarter of 2018. Valuation allowance impairment
(release) related to acquired loans was $13,000 compared to $710,000
impairment in the fourth quarter of 2018. Several pools, in the fourth
quarter of 2018, within the acquired credit impaired loan portfolio
resulted in declining estimated cash flows and larger impairment. The
provision for loan losses related to acquired non-credit impaired loans
was lower by $406,000 compared to the fourth quarter of 2018. The
provision for loan losses on non-acquired loans was $1.1 million lower
compared to the fourth quarter of 2018 due primarily to continuation of
strong asset quality indicators and low net charge offs. Noninterest
income decreased by $3.6 million resulting primarily from declines in
each revenue category, except for net securities gains totaling $541,000
in the first quarter of 2019. Noninterest expense was higher by $1.6
million due to $980,000 in branch consolidation and other cost
initiatives and $134,000 in an FHLB prepayment penalty (no merger and
conversion related charges incurred in 4Q 2018). Absent the branch
consolidation expense, cost initiative expense and the FHLB prepayment
penalty, our noninterest expense increased by $461,000, which can be
attributed to an increase in other expense related to passive investment
losses on tax advantaged investments. All other variances in noninterest
expense offset.
Income Tax Expense
During the first quarter of 2019, our effective income tax rate declined
to 20.20% from 20.49% in the fourth quarter of 2018 and from 21.05% in
the first quarter of 2018. The primary factor in the lower effective tax
rate compared to the fourth quarter of 2018 was due to a reduction in
pre-tax book income, while the reduction in the rate compared to the
first quarter of 2018 was due primarily to an increase in federal tax
credits available, offset partially by an increase in pre-tax book
income.
|
Balance Sheet and Capital |
|||||||||||||||||||||||||||
| (dollars in thousands, except per share and share data) | Ending Balance | ||||||||||||||||||||||||||
| Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||||||||||
| BALANCE SHEET | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 949,591 | $ | 408,983 | $ | 307,309 | $ | 396,849 | $ | 644,504 | |||||||||||||||||
| Investment securities: | |||||||||||||||||||||||||||
| Securities held to maturity | – | – | 500 | 499 | 1,274 | ||||||||||||||||||||||
| Securities available for sale, at fair value | 1,466,249 | 1,517,067 | 1,551,281 | 1,577,999 | 1,640,837 | ||||||||||||||||||||||
| Other investments | 40,624 | 25,604 | 19,229 | 19,229 | 23,479 | ||||||||||||||||||||||
| Total investment securities | 1,506,873 | 1,542,671 | 1,571,010 | 1,597,727 | 1,665,590 | ||||||||||||||||||||||
| Loans held for sale | 33,297 | 22,925 | 33,752 | 36,968 | 42,690 | ||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||||||
| Acquired credit impaired | 452,258 | 485,119 | 512,633 | 551,979 | 597,274 | ||||||||||||||||||||||
| Acquired non-credit impaired | 2,378,737 | 2,594,826 | 2,786,102 | 3,076,424 | 3,274,938 | ||||||||||||||||||||||
| Non-acquired | 8,310,613 | 7,933,286 | 7,606,478 | 7,197,539 | 6,762,512 | ||||||||||||||||||||||
| Less allowance for non-acquired loan losses | (52,008 | ) | (51,194 | ) | (49,869 | ) | (47,874 | ) | (45,203 | ) | |||||||||||||||||
| Loans, net | 11,089,600 | 10,962,037 | 10,855,344 | 10,778,068 | 10,589,521 | ||||||||||||||||||||||
| Other real estate owned (“OREO”) | 11,297 | 11,410 | 12,119 | 17,222 | 11,073 | ||||||||||||||||||||||
| Premises and equipment, net | 322,553 | 241,076 | 241,909 | 245,288 | 253,605 | ||||||||||||||||||||||
| Bank owned life insurance | 230,629 | 230,105 | 229,075 | 227,588 | 226,222 | ||||||||||||||||||||||
| Deferred tax asset | 31,884 | 37,128 | 47,943 | 48,853 | 46,736 | ||||||||||||||||||||||
| Mortgage servicing rights | 32,415 | 34,727 | 36,056 | 35,107 | 34,196 | ||||||||||||||||||||||
| Core deposit and other intangibles | 59,619 | 62,900 | 66,437 | 69,975 | 70,376 | ||||||||||||||||||||||
| Goodwill | 1,002,900 | 1,002,900 | 1,002,900 | 1,002,722 | 999,592 | ||||||||||||||||||||||
| Other assets | 136,229 | 119,466 | 118,361 | 110,121 | 105,004 | ||||||||||||||||||||||
| Total assets | $ | 15,406,887 | $ | 14,676,328 | $ | 14,522,215 | $ | 14,566,488 | $ | 14,689,109 | |||||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||
| Noninterest-bearing | $ | 3,219,864 | $ | 3,061,769 | $ | 3,157,478 | $ | 3,152,828 | $ | 3,120,818 | |||||||||||||||||
| Interest-bearing | 8,699,107 | 8,585,164 | 8,456,397 | 8,485,461 | 8,542,280 | ||||||||||||||||||||||
| Total deposits | 11,918,971 | 11,646,933 | 11,613,875 | 11,638,289 | 11,663,098 | ||||||||||||||||||||||
|
Federal funds purchased and securities sold under agreements to |
276,891 | 270,649 | 279,698 | 331,969 | 357,574 | ||||||||||||||||||||||
| Other borrowings | 616,250 | 266,084 | 115,919 | 115,754 | 215,589 | ||||||||||||||||||||||
| Other liabilities | 218,298 | 126,366 | 144,584 | 132,109 | 130,269 | ||||||||||||||||||||||
| Total liabilities | 13,030,410 | 12,310,032 | 12,154,076 | 12,218,121 | 12,366,530 | ||||||||||||||||||||||
| Shareholders’ equity: | |||||||||||||||||||||||||||
| Preferred stock – $.01 par value; authorized 10,000,000 shares | — | — | — | — | — | ||||||||||||||||||||||
| Common stock – $2.50 par value; authorized 80,000,000 shares | 88,421 | 89,574 | 91,808 | 92,064 | 91,958 | ||||||||||||||||||||||
| Surplus | 1,719,396 | 1,750,495 | 1,805,685 | 1,811,446 | 1,807,989 | ||||||||||||||||||||||
| Retained earnings | 582,034 | 551,108 | 515,155 | 480,928 | 452,982 | ||||||||||||||||||||||
| Accumulated other comprehensive loss | (13,374 | ) | (24,881 | ) | (44,509 | ) | (36,071 | ) | (30,350 | ) | |||||||||||||||||
| Total shareholders’ equity | 2,376,477 | 2,366,296 | 2,368,139 | 2,348,367 | 2,322,579 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 15,406,887 | $ | 14,676,328 | $ | 14,522,215 | $ | 14,566,488 | $ | 14,689,109 | |||||||||||||||||
| Common shares issued and outstanding | 35,368,521 | 35,829,549 | 36,723,238 | 36,825,556 | 36,783,438 | ||||||||||||||||||||||
At March 31, 2019, the Company’s total assets were $15.4 billion, an
increase of $730.6 million, from December 31, 2018, and an increase of
$717.8 million, or 4.9%, from March 31, 2018. During the first quarter
of 2019, changes in the balance sheet include the following:
-
Net loan growth totaled $128.3 million, or 4.7% annualized.
Non-acquired loans increased by $377.3 million or 19.3% annualized and
acquired loans decreased by $249.0 million, or 32.7% annualized. -
Sold 25,000 shares of Class B VISA common stock recognizing a gain of
$3.5 million (11,500 shares remain). -
Sold $134.5 million of investment securities with an average yield of
2.10%; and purchased $122.8 million of investment securities with an
average yield of 3.14%. The sold securities resulted in a loss
totaling approximately $3.0 million. -
Executed two 90-day FHLB advances of $350.0 million and $150.0 million
each with a cash flow hedge, effectively locking in four and five year
funding, respectively, at 2.44% and 2.21%. $150.0 million of the
proceeds from the advances retired an existing FHLB advance, and the
remainder will be utilized to increase the size of the investment
portfolio and support future loan growth. - Deposit growth totaled $272.0 million, or 9.5% annualized.
-
Repurchased 500,000 common shares totaling $33.3 million under current
Repurchase Program. -
These actions resulted in cash and cash equivalents increasing by
$540.6 million from December 31, 2018.
The Company’s book value per common share increased to $67.19 per share
at March 31, 2019, compared to $66.04 at December 31, 2018 and $63.14 at
March 31, 2018. Total equity (capital) increased by $10.2 million due to
the improvement in the unrealized loss position of available for sale
securities at March 31, 2019. The shares of common stock repurchased
under the Repurchase Program and the dividend paid to the shareholders
was offset by the net income recorded during the first quarter of 2019.
Tangible book value (“TBV”) per common share increased by $0.85 per
share to $37.15 at March 31, 2019, compared to $36.30 at December 31,
2018, and increased by $3.10 per share, or 9.1%, from $34.05 at March
31, 2018. The quarterly increase of $0.85 per share in tangible book
value was the result of (1) earnings per share, excluding amortization
of intangibles, of $1.32, offset by the dividend paid to shareholders of
$0.38 per share; (2) an increase from the change in AOCI of $0.33 per
share; (3) the increase from the impact of share-based compensation and
employee stock purchases of $0.03 per share; and (4) a net decrease of
$0.45 per share due primarily to the buyback of 500,000 shares of common
stock.
“The Company took advantage of the balance sheet optionality and
increased liquidity to allow for both loan and securities growth,” said
John C. Pollok, Chief Financial Officer. “In addition, we will continue
to (1) focus on our capital management opportunities, and (2) focus on
expense management initiatives identified that should allow for limited
expense growth.”
|
Performance and Capital Ratios |
|||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||||||||||
| PERFORMANCE RATIOS | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||||||||
| Return on average assets (annualized) | 1.21 | % | 1.33 | % | 1.28 | % | 1.12 | % | 1.19 | % | |||||||||||||||||
| Adjusted return on average assets (annualized) (non-GAAP) (3) | 1.23 | % | 1.33 | % | 1.33 | % | 1.45 | % | 1.44 | % | |||||||||||||||||
| Return on average equity (annualized) | 7.61 | % | 8.24 | % | 7.89 | % | 6.96 | % | 7.41 | % | |||||||||||||||||
| Adjusted return on average equity (annualized) (non-GAAP) (3) | 7.69 | % | 8.24 | % | 8.23 | % | 9.06 | % | 8.98 | % | |||||||||||||||||
| Return on average tangible common equity (annualized) (non-GAAP) (7) | 14.66 | % | 15.91 | % | 15.29 | % | 13.79 | % | 14.69 | % | |||||||||||||||||
|
Adjusted return on average tangible common equity (annualized) (non-GAAP) (3) (7) |
14.80 | % | 15.91 | % | 15.90 | % | 17.68 | % | 17.60 | % | |||||||||||||||||
| Efficiency ratio (tax equivalent) | 63.24 | % | 59.43 | % | 62.31 | % | 65.63 | % | 66.67 | % | |||||||||||||||||
| Adjusted efficiency ratio (non-GAAP) (9) | 62.52 | % | 59.43 | % | 59.53 | % | 57.26 | % | 60.04 | % | |||||||||||||||||
| Dividend payout ratio (2) | 30.29 | % | 26.63 | % | 27.30 | % | 30.93 | % | 28.68 | % | |||||||||||||||||
| Book value per common share | $ | 67.19 | $ | 66.04 | $ | 64.49 | $ | 63.77 | $ | 63.14 | |||||||||||||||||
| Tangible common equity per common share (non-GAAP) (7) | $ | 37.15 | $ | 36.30 | $ | 35.37 | $ | 34.64 | $ | 34.05 | |||||||||||||||||
| CAPITAL RATIOS | |||||||||||||||||||||||||||
| Equity-to-assets | 15.42 | % | 16.12 | % | 16.31 | % | 16.12 | % | 15.81 | % | |||||||||||||||||
| Tangible equity-to-tangible assets (non-GAAP) (7) | 9.16 | % | 9.56 | % | 9.65 | % | 9.45 | % | 9.20 | % | |||||||||||||||||
| Tier 1 common equity (6) | 11.8 | % | 12.1 | % | 12.3 | % | 12.0 | % | 11.8 | % | |||||||||||||||||
| Tier 1 leverage (6) | 10.5 | % | 10.6 | % | 10.8 | % | 10.6 | % | 10.5 | % | |||||||||||||||||
| Tier 1 risk-based capital (6) | 12.8 | % | 13.1 | % | 13.3 | % | 13.0 | % | 12.8 | % | |||||||||||||||||
| Total risk-based capital (6) | 13.3 | % | 13.6 | % | 13.8 | % | 13.5 | % | 13.3 | % | |||||||||||||||||
| OTHER DATA | |||||||||||||||||||||||||||
| Number of branches | 168 | 168 | 168 | 169 | 179 | ||||||||||||||||||||||
| Number of employees (full-time equivalent basis) | 2,589 | 2,602 | 2,640 | 2,654 | 2,700 | ||||||||||||||||||||||
|
Asset Quality |
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| Ending Balance | |||||||||||||||||||||||||||
| Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||||||||||
| (Dollars in thousands) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||||||||
| NONPERFORMING ASSETS: | |||||||||||||||||||||||||||
| Non-acquired | |||||||||||||||||||||||||||
| Non-acquired nonperforming loans | $ | 15,910 | $ | 15,018 | $ | 15,315 | $ | 14,870 | $ | 14,307 | |||||||||||||||||
| Non-acquired OREO and other nonperforming assets | 4,070 | 4,037 | 3,229 | 8,179 | 2,363 | ||||||||||||||||||||||
| Total non-acquired nonperforming assets | 19,980 | 19,055 | 18,544 | 23,049 | 16,670 | ||||||||||||||||||||||
| Acquired | |||||||||||||||||||||||||||
| Acquired nonperforming loans | 14,558 | 13,651 | 10,800 | 9,590 | 8,233 | ||||||||||||||||||||||
| Acquired OREO and other nonperforming assets | 7,782 | 7,755 | 9,302 | 9,527 | 9,139 | ||||||||||||||||||||||
| Total acquired nonperforming assets | 22,340 | 21,406 | 20,102 | 19,117 | 17,372 | ||||||||||||||||||||||
| Total nonperforming assets | $ | 42,320 | $ | 40,461 | $ | 38,646 | $ | 42,166 | $ | 34,042 | |||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||
| Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | |||||||||||||||||||||||
| 2019 | 2018 | 2018 | 2018 | 2018 | |||||||||||||||||||||||
| ASSET QUALITY RATIOS: | |||||||||||||||||||||||||||
|
Allowance for non-acquired loan losses as a percentage of |
0.63 | % | 0.65 | % | 0.66 | % | 0.67 | % | 0.67 | % | |||||||||||||||||
|
Allowance for non-acquired loan losses as a percentage of |
326.89 | % | 340.88 | % | 325.62 | % | 321.95 | % | 315.95 | % | |||||||||||||||||
|
Net charge-offs on non-acquired loans as a percentage of average |
0.02 | % | 0.06 | % | 0.07 | % | 0.01 | % | 0.02 | % | |||||||||||||||||
|
Net charge-offs on acquired non-credit impaired loans as a |
0.03 | % | 0.09 | % | 0.01 | % | 0.14 | % | 0.02 | % | |||||||||||||||||
|
Total nonperforming assets as a percentage of total assets |
0.27 | % | 0.28 | % | 0.27 | % | 0.29 | % | 0.23 | % | |||||||||||||||||
| Excluding Acquired Assets | |||||||||||||||||||||||||||
| NPLs as a percentage of period end non-acquired loans (1) | 0.19 | % | 0.19 | % | 0.20 | % | 0.21 | % | 0.21 | % | |||||||||||||||||
|
Total nonperforming assets as a percentage of total non-acquired |
0.24 | % | 0.24 | % | 0.24 | % | 0.32 | % | 0.25 | % | |||||||||||||||||
|
Total nonperforming assets as a percentage of total assets (5) |
0.13 | % | 0.13 | % | 0.13 | % | 0.16 | % | 0.11 | % | |||||||||||||||||
Total nonperforming assets increased by $1.9 million to $42.3 million,
representing 0.27% of total assets, a decrease of 1 basis point compared
to December 31, 2018. The decrease was the result of an increase in
total assets of $730.6 million during the quarter. Non-performing
acquired non-credit impaired loans increased $907,000, and total $14.6
million. Legacy non-performing loans increased by $892,000 during the
first quarter of 2019 to $15.9 million at March 31, 2019. The allowance
for loan losses as a percentage of non-acquired nonaccrual loans was
327% at March 31, 2019, down from 341% in the fourth quarter of 2018,
and up from 316% at March 31, 2018.
At March 31, 2019, the allowance for non-acquired loan losses was $52.0
million, or 0.63%, of non-acquired period-end loans and $51.2 million,
or 0.65%, at December 31, 2018, and $45.2 million, or 0.67% at March 31,
2018. Net charge-offs within the non-acquired portfolio were $493,000,
or 0.02% annualized, in the first quarter of 2019, compared to $1.1
million, or 0.06% annualized, in the fourth quarter of 2018. First
quarter 2018 net charge-offs totaled $367,000, or 0.02% annualized. Net
charge-offs (recoveries) related to the non-acquired loan portfolio were
($235,000) during the first quarter of 2019. The remaining net
charge-offs were from overdraft and ready reserve accounts and totaled
$728,000.
During the first quarter of 2019, the provision for loan losses totaled
$1.3 million for the non-acquired loan portfolio compared to $2.5
million in the fourth quarter of 2018, and $2.1 million in the first
quarter of 2018.
Net charge offs related to “acquired non-credit impaired loans” were
$168,000, or 0.03% annualized, in the first quarter of 2019; and the
Company recorded a provision for loan losses, accordingly. Net
charge-offs in the fourth quarter of 2018 totaled $574,000, or 0.09%
annualized, and in the first quarter of 2018, net charge-offs totaled
$169,000, or 0.02% annualized. The charge off level within the acquired
non-credit impaired portfolio remains as expected.
During the first quarter of 2019, the Company recorded a net impairment
of $13,000 within the acquired credit impaired loan pools compared to
$710,000 impairment in the fourth quarter of 2018. During the first
quarter of 2018, the Company recorded net impairment of $163,000.
Total OREO remained relatively consistent from the end of 2018 and
declined to $11.3 million at March 31, 2019, down from $11.4 million at
December 31, 2018.
|
Net Interest Income and Margin |
||||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| March 31, 2019 | December 31, 2018 | March 31, 2018 | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||||||||||||||||
| YIELD ANALYSIS | Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||||
| Interest-Earning Assets: | ||||||||||||||||||||||||||||||||||||||
| Federal funds sold, reverse repo, and time deposits | $ | 248,620 | $ | 1,463 | 2.39 | % | $ | 172,849 | $ | 1,032 | 2.37 | % | $ | 165,752 | $ | 660 | 1.61 | % | ||||||||||||||||||||
| Investment securities (taxable) | 1,327,336 | 8,597 | 2.63 | % | 1,358,978 | 8,838 | 2.58 | % | 1,453,480 | 8,788 | 2.45 | % | ||||||||||||||||||||||||||
| Investment securities (tax-exempt) | 187,732 | 1,496 | 3.23 | % | 188,666 | 1,457 | 3.06 | % | 212,719 | 1,559 | 2.97 | % | ||||||||||||||||||||||||||
| Loans held for sale | 19,308 | 214 | 4.49 | % | 24,820 | 291 | 4.65 | % | 32,517 | 307 | 3.83 | % | ||||||||||||||||||||||||||
| Loans | 11,023,005 | 131,620 | 4.84 | % | 10,928,294 | 132,250 | 4.80 | % | 10,604,506 | 126,734 | 4.85 | % | ||||||||||||||||||||||||||
| Total interest-earning assets | 12,806,001 | 143,390 | 4.54 | % | 12,673,607 | 143,868 | 4.50 | % | 12,468,974 | 138,048 | 4.49 | % | ||||||||||||||||||||||||||
| Noninterest-earning assets | 2,006,898 | 1,924,666 | 1,960,659 | |||||||||||||||||||||||||||||||||||
| Total Assets | $ | 14,812,899 | $ | 14,598,273 | $ | 14,429,633 | ||||||||||||||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Transaction and money market accounts | $ | 5,429,375 | $ | 9,340 | 0.70 | % | $ | 5,310,048 | $ | 8,498 | 0.63 | % | $ | 5,221,974 | $ | 2,893 | 0.22 | % | ||||||||||||||||||||
| Savings deposits | 1,379,688 | 1,256 | 0.37 | % | 1,416,227 | 1,324 | 0.37 | % | 1,443,868 | 674 | 0.19 | % | ||||||||||||||||||||||||||
| Certificates and other time deposits | 1,773,365 | 6,049 | 1.38 | % | 1,804,939 | 5,488 | 1.21 | % | 1,758,223 | 3,346 | 0.77 | % | ||||||||||||||||||||||||||
| Federal funds purchased and repurchase agreements | 284,350 | 753 | 1.07 | % | 273,994 | 660 | 0.96 | % | 343,974 | 454 | 0.54 | % | ||||||||||||||||||||||||||
| Other borrowings | 301,696 | 2,725 | 3.66 | % | 122,676 | 1,506 | 4.87 | % | 225,496 | 1,708 | 3.07 | % | ||||||||||||||||||||||||||
| Total interest-bearing liabilities | 9,168,474 | 20,123 | 0.89 | % | 8,927,884 | 17,476 | 0.78 | % | 8,993,535 | 9,075 | 0.41 | % | ||||||||||||||||||||||||||
| Noninterest-bearing liabilities | 3,280,126 | 3,310,416 | 3,120,746 | |||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 2,364,299 | 2,359,973 | 2,315,352 | |||||||||||||||||||||||||||||||||||
| Total Non-IBL and shareholders’ equity | 5,644,425 | 5,670,389 | 5,436,098 | |||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 14,812,899 | $ | 14,598,273 | $ | 14,429,633 | ||||||||||||||||||||||||||||||||
| Net interest income and margin (NON-TAX EQUIV.) | $ | 123,267 | 3.90 | % | $ | 126,392 | 3.96 | % | $ | 128,973 | 4.19 | % | ||||||||||||||||||||||||||
| Net interest margin (TAX EQUIVALENT) | 3.92 | % | 3.98 | % | 4.22 | % | ||||||||||||||||||||||||||||||||
| Overall Cost of Funds (including demand deposits) | 0.67 | % | 0.57 | % | 0.31 | % | ||||||||||||||||||||||||||||||||
Contacts
Media Contact:
Kellee McGahey (843) 529-5574
Analyst Contact:
Jim Mabry (843) 529-5593
