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 and six-month period ended June 30, 2019. The Company reported consolidated net income of $41.5 million, or $1.17 per diluted common share for the three months ended June 30, 2019, a $2.9 million decrease, or $0.07 per share decline in EPS, compared to the first quarter of 2019. Adjusted consolidated net income (non-GAAP) was $49.4 million, or $1.40 per diluted common share for the three months ended June 30, 2019, a $4.6 million increase, or $0.15 per share increase in adjusted diluted EPS, compared to the first quarter of 2019.
“The strength of our culture and team provides a great platform to build banking relationships,” said Robert R. Hill, Jr., CEO of South State Corporation. “This was apparent this quarter, as all lines of business performed well. This foundation and the investments made the past few years are helping drive performance consistent with our long term performance targets. As we enter the second half of the year, I am optimistic regarding South State’s ability to drive additional growth.”
Focus on Long-Term Results
We communicated several long-term goals at our Investor Day held in December 2018 and we remain committed to those objectives while adhering to our core operating philosophy of soundness, profitability, and growth. These included loan growth, expense control, capital management, and dividend payout that will result in return on average tangible common equity (non-GAAP) of 16% to 18%.
Operating Leverage
This quarter reflected an increase of $5.6 million, or 17%, in noninterest income from the first quarter of 2019, and was driven by all four lines of business. Net interest income growth of $3.9 million was supported by an increase in average loan balances of $134.9 million, an increase in the investment securities portfolio and in short term investments. In addition, noninterest bearing deposits grew by $162.3 million on average, during the second quarter.
Noninterest expense increased by $11.2 million compared to 1Q 2019, and adjusted (non-GAAP) noninterest expense increased by $678,000 compared to 1Q 2019, an annualized increase of 2.8%, resulting in modest growth in adjusted noninterest expenses. We have completed a significant portion of our announced cost saves and believe these will contribute to further incremental operating leverage improvement over time.
Soundness
Asset quality remains strong with annualized net charge offs on non-acquired loans of 0.02% annualized. Total past due loans across all portfolios were 0.44% of total loans, and total nonperforming assets were 0.26% of total assets as of June 30, 2019. Overall, net charge-offs and OREO losses (from write downs and disposals) remain at very low levels and totaled $2.7 million for the first six months of 2019, and $1.9 million for the second quarter of 2019.
We continue to take advantage of our balance sheet strength and optionality. During the second quarter of 2019, we remained active in repurchasing company common stock and bought 641,200 shares at an average price of $73.13 per share, or $46.9 million. Tangible equity to tangible assets equaled 8.99%, dropping below 9% for the first time since March of 2017. In June of 2019, the Company’s Board of Directors authorized a new Repurchase Program of 2,000,000 shares, and there were 1,859,000 shares available for repurchase under this new plan as of June 30, 2019. At June 30 ,2019, outstanding common shares totaled 34,735,587, and the Company has acquired 594,400 shares thus far in the third quarter of 2019, at an average price of $75.08 per share, or $44.6 million.
The Company’s Board of Directors voted to increase the common stock dividend this quarter by $0.03 to $0.43 per share, which is a 7.5% increase compared to last quarter, and an $0.08 per share increase, or 22.9%, compared to the same quarter one year ago. The dividend will be payable on August 16, 2019 to shareholders of record as of August 9, 2019.
Branch consolidation and other cost initiatives – 2019
In mid-January 2019, the Company scheduled the closure of 13 branch locations during 2019. All but one of those locations was closed during the second quarter of 2019. In addition, certain cost reduction initiatives began during the first quarter of 2019. The cost incurred with these closures and cost initiatives totals $3.1 million for the first six months, with $2.1 million in the second quarter of 2019. The annual savings of these closures and cost initiatives is expected to be $13.0 million, and the net impact on 2019 anticipated to be approximately $10.0 million. In the second quarter of 2019, the Company recognized approximately $2.5 million in cost saves, and expect to realize another $6.4 million in the third and fourth quarter of 2019.
Pension plan termination – 2Q 2019
During the second quarter of 2019, the Company recorded the impact of the termination of the pension plan. The pre-tax, non-cash charge totaled $9.5 million. $7.7 million was recorded in accumulated other comprehensive loss (AOCL) and was reclassified from equity into the income statement, and the remaining charge of $1.8 million was from the net pension plan asset. This action supports the Company’s long-term focus on managing noninterest expense to 0% to 3% growth annually.
Second Quarter 2019 Financial Performance
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||||||
| (Dollars in thousands, except per share data) |
June 30, |
|
Mar. 31, |
|
Dec. 31, |
|
Sept. 30, |
|
June 30, |
|
June 30, |
||||||||||||||||
| INCOME STATEMENT |
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
| Interest income | |||||||||||||||||||||||||||
| Loans, including fees (8) |
$ |
135,388 |
|
$ |
131,834 |
|
$ |
132,541 |
|
$ |
132,043 |
|
$ |
129,852 |
|
$ |
267,222 |
|
$ |
256,893 |
|
||||||
| Investment securities, federal funds sold and securities purchased under agreements to resell |
|
14,594 |
|
|
|
11,556 |
|
|
|
11,327 |
|
|
|
11,517 |
|
|
|
11,880 |
|
|
|
26,150 |
|
|
|
22,887 |
|
| Total interest income |
|
149,982 |
|
|
143,390 |
|
|
143,868 |
|
|
143,560 |
|
|
141,732 |
|
|
293,372 |
|
|
279,780 |
|
||||||
| Interest expense | |||||||||||||||||||||||||||
| Deposits |
|
17,393 |
|
|
16,645 |
|
|
15,310 |
|
|
13,220 |
|
|
10,009 |
|
|
34,038 |
|
|
16,922 |
|
||||||
| Federal funds purchased, securities sold under agreements to repurchase, and other borrowings |
|
5,410 |
|
|
|
3,478 |
|
|
|
2,166 |
|
|
|
2,051 |
|
|
|
2,161 |
|
|
|
8,888 |
|
|
|
4,323 |
|
| Total interest expense |
|
22,803 |
|
|
20,123 |
|
|
17,476 |
|
|
15,271 |
|
|
12,170 |
|
|
42,926 |
|
|
21,245 |
|
||||||
| Net interest income |
|
127,179 |
|
|
123,267 |
|
|
126,392 |
|
|
128,289 |
|
|
129,562 |
|
|
250,446 |
|
|
258,535 |
|
||||||
| Provision for loan losses |
|
3,704 |
|
|
1,488 |
|
|
3,734 |
|
|
3,117 |
|
|
4,478 |
|
|
5,192 |
|
|
6,932 |
|
||||||
| Net interest income after provision for loan losses |
|
123,475 |
|
|
121,779 |
|
|
122,658 |
|
|
125,172 |
|
|
125,084 |
|
|
245,254 |
|
|
251,603 |
|
||||||
| Noninterest income |
|
37,618 |
|
|
32,058 |
|
|
35,642 |
|
|
32,027 |
|
|
37,525 |
|
|
69,676 |
|
|
78,080 |
|
||||||
| Pre-tax operating expense |
|
107,329 |
|
|
97,125 |
|
|
96,664 |
|
|
95,818 |
|
|
96,410 |
|
|
204,588 |
|
|
198,577 |
|
||||||
| Branch consolid./acquisition and merger expense |
|
2,078 |
|
|
1,114 |
|
|
— |
|
|
4,476 |
|
|
14,096 |
|
|
3,058 |
|
|
25,392 |
|
||||||
| Total noninterest expense |
|
109,407 |
|
|
98,239 |
|
|
96,664 |
|
|
100,294 |
|
|
110,506 |
|
|
207,646 |
|
|
223,969 |
|
||||||
| Income before provision for income taxes |
|
51,686 |
|
|
55,598 |
|
|
61,636 |
|
|
56,905 |
|
|
52,103 |
|
|
107,284 |
|
|
105,714 |
|
||||||
| Provision for income taxes, includes deferred tax revaluation |
|
10,226 |
|
|
11,231 |
|
|
12,632 |
|
|
9,823 |
|
|
11,644 |
|
|
21,457 |
|
|
22,929 |
|
||||||
| Net income |
$ |
41,460 |
|
$ |
44,367 |
|
$ |
49,004 |
|
$ |
47,082 |
|
$ |
40,459 |
|
$ |
85,827 |
|
$ |
82,785 |
|
||||||
| Adjusted net income (non-GAAP) (3) | |||||||||||||||||||||||||||
| Net income (GAAP) |
$ |
41,460 |
|
$ |
44,367 |
|
$ |
49,004 |
|
$ |
47,082 |
|
$ |
40,459 |
|
$ |
85,827 |
|
$ |
82,785 |
|
||||||
| Securities losses (gains), net of tax |
|
(1,371 |
) |
|
(432 |
) |
|
2 |
|
|
9 |
|
|
505 |
|
|
(1,803 |
) |
|
505 |
|
||||||
| Provision for income taxes, deferred tax revaluation |
|
— |
|
|
— |
|
|
— |
|
|
(1,602 |
) |
|
613 |
|
|
— |
|
|
613 |
|
||||||
| FHLB prepayment penalty |
|
— |
|
|
107 |
|
|
— |
|
|
— |
|
|
— |
|
|
107 |
|
|
— |
|
||||||
| Pension plan termination expense, net of tax |
|
7,641 |
|
|
7,641 |
|
|
— |
|
||||||||||||||||||
| Branch consolid./acquisition and merger expense, net of tax |
|
1,667 |
|
|
782 |
|
|
— |
|
|
3,577 |
|
|
11,112 |
|
|
2,449 |
|
|
20,030 |
|
||||||
| Adjusted net income (non-GAAP) |
$ |
49,397 |
|
$ |
44,824 |
|
$ |
49,006 |
|
$ |
49,066 |
|
$ |
52,689 |
|
$ |
94,221 |
|
$ |
103,933 |
|
||||||
| Basic earnings per common share |
$ |
1.18 |
|
$ |
1.25 |
|
$ |
1.36 |
|
$ |
1.28 |
|
$ |
1.10 |
|
$ |
2.43 |
|
$ |
2.25 |
|
||||||
| Diluted earnings per common share |
$ |
1.17 |
|
$ |
1.25 |
|
$ |
1.35 |
|
$ |
1.28 |
|
$ |
1.09 |
|
$ |
2.42 |
|
$ |
2.24 |
|
||||||
| Adjusted net income per common share – Basic (non-GAAP) (3) |
$ |
1.41 |
|
$ |
1.26 |
|
$ |
1.36 |
|
$ |
1.34 |
|
$ |
1.44 |
|
$ |
2.67 |
|
$ |
2.84 |
|
||||||
| Adjusted net income per common share – Diluted (non-GAAP) (3) |
$ |
1.40 |
|
$ |
1.26 |
|
$ |
1.35 |
|
$ |
1.33 |
|
$ |
1.43 |
|
$ |
2.66 |
|
$ |
2.82 |
|
||||||
| Dividends per common share |
$ |
0.40 |
|
$ |
0.38 |
|
$ |
0.36 |
|
$ |
0.35 |
|
$ |
0.34 |
|
$ |
0.78 |
|
$ |
0.67 |
|
||||||
| Basic weighted-average common shares outstanding |
|
35,089,129 |
|
|
35,445,087 |
|
|
36,154,922 |
|
|
36,645,181 |
|
|
36,676,887 |
|
|
35,268,574 |
|
|
36,656,689 |
|
||||||
| Diluted weighted-average common shares outstanding |
|
35,299,747 |
|
|
35,618,705 |
|
|
36,364,873 |
|
|
36,893,496 |
|
|
36,928,981 |
|
|
35,461,383 |
|
|
36,909,739 |
|
||||||
| Effective tax rate |
|
19.78 |
% |
|
20.20 |
% |
|
20.49 |
% |
|
17.26 |
% |
|
22.35 |
% |
|
20.00 |
% |
|
21.69 |
% |
||||||
The Company reported consolidated net income of $41.5 million, or $1.17 per diluted common share for the three-months ended June 30, 2019, a $2.9 million decrease, or $0.08 per share decline in EPS compared to the first quarter of 2019. Compared to the second quarter of 2018, net income totaled $40.5 million, or $1.09 per diluted common share. Weighted average diluted shares declined by 319,000, from the first quarter of 2019, due to the continuation of the Company repurchasing common shares under the prior and new Repurchase Programs, which improved second quarter diluted EPS by $0.01 per diluted share. Net interest income increased by $3.9 million compared to the first quarter of 2019 on $6.6 million higher in interest income and $2.7 million higher interest expense. Interest income increased from the loan portfolio (excluding loans held for sale) by $3.4 million, from the securities portfolio by $1.1 million, and from federal funds sold by $2.0 million. These increases were offset partially by an increase of $2.7 million in interest expense with $2.0 million in other borrowings and $460,000 in time deposits. The second quarter of 2019 reflects an additional $200 million FHLB advance with a cash flow hedge, effectively locking in five-year funding at 1.89%. This advance and related hedge was identical to the two transactions executed in March of 2019 totaling $500 million. The funding cost of these FHLB advances and the related hedges total 2.06%, including the positive impact of the estimated dividend over time, and have a weighted average maturity of 4.3 years. The Company’s cost of interest-bearing liabilities was 0.95% for the second quarter of 2019, an increase of 0.06% from the first quarter of 2019. Compared to the second quarter of 2018, our overall cost of funds increased by 0.31% which was primarily the result of rising interest rates and competition within our markets. The total provision for loan losses increased $2.2 million compared to the first quarter of 2019. Valuation allowance impairment related to acquired loans was $251,000 compared to $13,000 in the first quarter of 2019. The provision for loan losses related to acquired non-credit impaired loans was higher by $1.3 million compared to the first quarter of 2019. This increase was related to two loans that totaled $1.3 million in charge offs for 2Q 2019. The provision for loan losses on non-acquired loans was $2.0 million, $727,000 higher than first quarter of 2019, and exceeded net charge-offs by $1.6 million. Noninterest income increased by $5.6 million resulting primarily from increases in all categories, except acquired loan recoveries. Excluding securities gains, noninterest income increased by $4.4 million in the second quarter of 2019. Noninterest expense was higher by $11.2 million due to the pension plan termination cost of $9.5 million and $1.1 million increase in branch consolidation expense and other cost initiatives. Adjusted noninterest expense (non-GAAP) increased by $678,000 in 2Q 2019 compared to 1Q 2019, with the largest portion of the increase in professional fees.
Income Tax Expense
During the second quarter of 2019, our effective income tax rate declined to 19.78% from 20.20% in the first quarter of 2019 and from 22.35% in the second quarter of 2018. The primary factor in the lower effective tax rate compared to the first quarter of 2019 was lower pre-tax book income. Compared to the second quarter of 2018, the lower effective tax rate was attributable to an increase in federal tax credits available and the absence of the tax expense related to the revaluation of deferred taxes.
Balance Sheet and Capital
| (dollars in thousands, except per share and share data) |
Ending Balance |
||||||||||||||||||||||
|
June 30, |
|
Mar. 31, |
|
Dec. 31, |
|
Sept. 30, |
|
June 30, |
|||||||||||||||
| BALANCE SHEET |
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents |
$ |
851,971 |
|
$ |
949,591 |
|
$ |
408,983 |
|
$ |
307,309 |
|
$ |
396,849 |
|
||||||||
| Investment securities: | |||||||||||||||||||||||
| Securities held to maturity |
|
— |
|
|
— |
|
|
— |
|
|
500 |
|
|
499 |
|
||||||||
| Securities available for sale, at fair value |
|
1,717,276 |
|
|
1,466,249 |
|
|
1,517,067 |
|
|
1,551,281 |
|
|
1,577,999 |
|
||||||||
| Other investments |
|
49,124 |
|
|
40,624 |
|
|
25,604 |
|
|
19,229 |
|
|
19,229 |
|
||||||||
| Total investment securities |
|
1,766,400 |
|
|
1,506,873 |
|
|
1,542,671 |
|
|
1,571,010 |
|
|
1,597,727 |
|
||||||||
| Loans held for sale |
|
47,796 |
|
|
33,297 |
|
|
22,925 |
|
|
33,752 |
|
|
36,968 |
|
||||||||
| Loans: | |||||||||||||||||||||||
| Acquired credit impaired |
|
419,961 |
|
|
452,258 |
|
|
485,119 |
|
|
512,633 |
|
|
551,979 |
|
||||||||
| Acquired non-credit impaired |
|
2,180,281 |
|
|
2,378,737 |
|
|
2,594,826 |
|
|
2,786,102 |
|
|
3,076,424 |
|
||||||||
| Non-acquired |
|
8,621,327 |
|
|
8,310,613 |
|
|
7,933,286 |
|
|
7,606,478 |
|
|
7,197,539 |
|
||||||||
| Less allowance for non-acquired loan losses |
|
(53,590 |
) |
|
(52,008 |
) |
|
(51,194 |
) |
|
(49,869 |
) |
|
(47,874 |
) |
||||||||
| Loans, net |
|
11,167,979 |
|
|
11,089,600 |
|
|
10,962,037 |
|
|
10,855,344 |
|
|
10,778,068 |
|
||||||||
| Other real estate owned (“OREO”) |
|
14,506 |
|
|
11,297 |
|
|
11,410 |
|
|
12,119 |
|
|
17,222 |
|
||||||||
| Premises and equipment, net |
|
321,348 |
|
|
322,553 |
|
|
241,076 |
|
|
241,909 |
|
|
245,288 |
|
||||||||
| Bank owned life insurance |
|
231,708 |
|
|
230,629 |
|
|
230,105 |
|
|
229,075 |
|
|
227,588 |
|
||||||||
| Deferred tax asset |
|
28,240 |
|
|
31,884 |
|
|
37,128 |
|
|
47,943 |
|
|
48,853 |
|
||||||||
| Mortgage servicing rights |
|
30,332 |
|
|
32,415 |
|
|
34,727 |
|
|
36,056 |
|
|
35,107 |
|
||||||||
| Core deposit and other intangibles |
|
56,351 |
|
|
59,619 |
|
|
62,900 |
|
|
66,437 |
|
|
69,975 |
|
||||||||
| Goodwill |
|
1,002,900 |
|
|
1,002,900 |
|
|
1,002,900 |
|
|
1,002,900 |
|
|
1,002,722 |
|
||||||||
| Other assets |
|
163,806 |
|
|
136,229 |
|
|
119,466 |
|
|
118,361 |
|
|
110,121 |
|
||||||||
| Total assets |
$ |
15,683,337 |
|
$ |
15,406,887 |
|
$ |
14,676,328 |
|
$ |
14,522,215 |
|
$ |
14,566,488 |
|
||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||
| Noninterest-bearing |
$ |
3,255,906 |
|
$ |
3,219,864 |
|
$ |
3,061,769 |
|
$ |
3,157,478 |
|
$ |
3,152,828 |
|
||||||||
| Interest-bearing |
|
8,666,374 |
|
|
8,699,107 |
|
|
8,585,164 |
|
|
8,456,397 |
|
|
8,485,461 |
|
||||||||
| Total deposits |
|
11,922,280 |
|
|
11,918,971 |
|
|
11,646,933 |
|
|
11,613,875 |
|
|
11,638,289 |
|
||||||||
| Federal funds purchased and securities sold under agreements to repurchase |
|
298,029 |
|
|
276,891 |
|
|
270,649 |
|
|
279,698 |
|
|
331,969 |
|
||||||||
| Other borrowings |
|
816,414 |
|
|
616,250 |
|
|
266,084 |
|
|
115,919 |
|
|
115,754 |
|
||||||||
| Other liabilities |
|
272,636 |
|
|
218,298 |
|
|
126,366 |
|
|
144,584 |
|
|
132,109 |
|
||||||||
| Total liabilities |
|
13,309,359 |
|
|
13,030,410 |
|
|
12,310,032 |
|
|
12,154,076 |
|
|
12,218,121 |
|
||||||||
| Shareholders’ equity: | |||||||||||||||||||||||
| Preferred stock – $.01 par value; authorized 10,000,000 shares |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||||
| Common stock – $2.50 par value; authorized 80,000,000 shares |
|
86,839 |
|
|
88,421 |
|
|
89,574 |
|
|
91,808 |
|
|
92,064 |
|
||||||||
| Surplus |
|
1,676,229 |
|
|
1,719,396 |
|
|
1,750,495 |
|
|
1,805,685 |
|
|
1,811,446 |
|
||||||||
| Retained earnings |
|
609,444 |
|
|
582,034 |
|
|
551,108 |
|
|
515,155 |
|
|
480,928 |
|
||||||||
| Accumulated other comprehensive income (loss) |
|
1,466 |
|
|
(13,374 |
) |
|
(24,881 |
) |
|
(44,509 |
) |
|
(36,071 |
) |
||||||||
| Total shareholders’ equity |
|
2,373,978 |
|
|
2,376,477 |
|
|
2,366,296 |
|
|
2,368,139 |
|
|
2,348,367 |
|
||||||||
| Total liabilities and shareholders’ equity |
$ |
15,683,337 |
|
$ |
15,406,887 |
|
$ |
14,676,328 |
|
$ |
14,522,215 |
|
$ |
14,566,488 |
|
||||||||
| Common shares issued and outstanding |
|
34,735,587 |
|
|
35,368,521 |
|
|
35,829,549 |
|
|
36,723,238 |
|
|
36,825,556 |
|
||||||||
At June 30, 2019, the Company’s total assets were $15.7 billion, an increase of $1.0 billion from December 31, 2018, and an increase of $1.1 billion, or 7.7%, from June 30, 2018. During the second quarter of 2019, changes in the balance sheet include the following:
- Net loan growth totaled $80.1 million, or 2.9% annualized. Non-acquired loans increased by $310.7 million or 15.0% annualized and acquired loans decreased by $230.6 million, or 32.6% annualized.
- Sold 11,400 shares of Class B VISA common stock recognized a gain of $1.8 million.
- Executed one 90-day FHLB advance of $200.0 million with a cash flow hedge, effectively locking in five year funding at 1.89%, as we continued to add leverage within the balance sheet to support future loan growth and increase the size of the investment portfolio.
- Non-interest bearing deposits grew by $36.0 million, or 4.5% annualized.
- Repurchased 641,200 common shares totaling $46.9 million.
The Company’s book value per common share increased to $68.34 per share at June 30, 2019, compared to $67.19 at March 31, 2019 and $63.77 at June 30, 2018. Total equity (capital) decreased by $2.5 million due to the shares of common stock repurchased during the second quarter. The decrease from the repurchased stock of $46.9 million was mostly offset by an improvement in the unrealized gain position of available for sale securities at June 30, 2019, and net income earned, net of the dividend paid, of $27.4 million, during the quarter. Tangible book value (“TBV”) per common share increased by $0.70 per share to $37.85 at June 30, 2019, compared to $37.15 at March 31, 2019, and increased by $3.21 per share, or 9.3%, from $34.64 at June 30, 2018. The quarterly increase of $0.70 per share in tangible book value was the result of (1) earnings per share, excluding amortization of intangibles, of $1.27, offset by the dividend paid to shareholders of $0.40 per share; (2) an increase from the change in AOCI of $0.43 per share; (3) the increase from the impact of share-based compensation and employee stock purchases of $0.06 per share; and (4) a net decrease of $0.66 per share due primarily to the buyback of common stock.
“Sound credit quality continues to be a strength of the company, as many of our credit metrics continued to improve,” said John C. Pollok, Chief Financial Officer. “South State experienced nice improvement during the second quarter in total revenue, in both net interest income and noninterest income, and good control of adjusted noninterest expense, all resulting in an adjusted return on average tangible equity of 15.79%, which approaches our long-term goal of 16% to 18%.”
Performance and Capital Ratios
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||||||||||
|
June 30, |
|
Mar. 31, |
|
Dec. 31, |
|
Sept. 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||||||||||||||||
| PERFORMANCE RATIOS |
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||||||||
| Return on average assets (annualized) |
|
1.08 |
% |
|
1.21 |
% |
|
1.33 |
% |
|
1.28 |
% |
|
1.12 |
% |
1.14 |
% |
1.15 |
% |
||||||||||||
| Adjusted return on average assets (annualized) (non-GAAP) (3) |
|
1.28 |
% |
|
1.23 |
% |
|
1.33 |
% |
|
1.33 |
% |
|
1.45 |
% |
1.26 |
% |
1.45 |
% |
||||||||||||
| Return on average equity (annualized) |
|
6.98 |
% |
|
7.61 |
% |
|
8.24 |
% |
|
7.89 |
% |
|
6.96 |
% |
7.29 |
% |
7.18 |
% |
||||||||||||
| Adjusted return on average equity (annualized) (non-GAAP) (3) |
|
8.32 |
% |
|
7.69 |
% |
|
8.24 |
% |
|
8.23 |
% |
|
9.06 |
% |
8.00 |
% |
9.02 |
% |
||||||||||||
| Return on average tangible common equity (annualized) (non-GAAP) (7) |
|
13.38 |
% |
|
14.66 |
% |
|
15.91 |
% |
|
15.29 |
% |
|
13.79 |
% |
14.01 |
% |
14.23 |
% |
||||||||||||
| Adjusted return on average tangible common equity (annualized) (non-GAAP) (3) (7) |
|
15.79 |
% |
|
14.80 |
% |
|
15.91 |
% |
|
15.90 |
% |
|
17.68 |
% |
15.30 |
% |
17.64 |
% |
||||||||||||
| Efficiency ratio (tax equivalent) |
|
66.87 |
% |
|
63.24 |
% |
|
59.43 |
% |
|
62.31 |
% |
|
65.63 |
% |
65.10 |
% |
66.16 |
% |
||||||||||||
| Adjusted efficiency ratio (non-GAAP) (9) |
|
59.78 |
% |
|
62.52 |
% |
|
59.43 |
% |
|
59.53 |
% |
|
57.26 |
% |
61.12 |
% |
58.65 |
% |
||||||||||||
| Dividend payout ratio (2) |
|
33.89 |
% |
|
30.29 |
% |
|
26.63 |
% |
|
27.30 |
% |
|
30.93 |
% |
32.03 |
% |
29.78 |
% |
||||||||||||
| Book value per common share |
$ |
68.34 |
|
$ |
67.19 |
|
$ |
66.04 |
|
$ |
64.49 |
|
$ |
63.77 |
|
||||||||||||||||
| Tangible common equity per common share (non-GAAP) (7) |
$ |
37.85 |
|
$ |
37.15 |
|
$ |
36.30 |
|
$ |
35.37 |
|
$ |
34.64 |
|
||||||||||||||||
| CAPITAL RATIOS | |||||||||||||||||||||||||||||||
| Equity-to-assets |
|
15.14 |
% |
|
15.42 |
% |
|
16.12 |
% |
|
16.31 |
% |
|
16.12 |
% |
||||||||||||||||
| Tangible equity-to-tangible assets (non-GAAP) (7) |
|
8.99 |
% |
|
9.16 |
% |
|
9.56 |
% |
|
9.65 |
% |
|
9.45 |
% |
||||||||||||||||
| Tier 1 common equity (6) |
|
11.6 |
% |
|
11.8 |
% |
|
12.1 |
% |
|
12.3 |
% |
|
12.0 |
% |
||||||||||||||||
| Tier 1 leverage (6) |
|
10.0 |
% |
|
10.5 |
% |
|
10.6 |
% |
|
10.8 |
% |
|
10.6 |
% |
||||||||||||||||
| Tier 1 risk-based capital (6) |
|
12.6 |
% |
|
12.8 |
% |
|
13.1 |
% |
|
13.3 |
% |
|
13.0 |
% |
||||||||||||||||
| Total risk-based capital (6) |
|
13.1 |
% |
|
13.3 |
% |
|
13.6 |
% |
|
13.8 |
% |
|
13.5 |
% |
||||||||||||||||
| OTHER DATA | |||||||||||||||||||||||||||||||
| Number of branches |
|
156 |
|
|
168 |
|
|
168 |
|
|
168 |
|
|
169 |
|
||||||||||||||||
| Number of employees (full-time equivalent basis) |
|
2,544 |
|
|
2,589 |
|
|
2,602 |
|
|
2,640 |
|
|
2,654 |
|
||||||||||||||||
Asset Quality
|
Ending Balance |
|||||||||||||||||||||||||||||||||||||
|
June 30, |
|
Mar. 31, |
|
Dec. 31, |
|
Sept. 30, |
|
June 30, |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
||||||||||||||||||
| NONPERFORMING ASSETS: | |||||||||||||||||||||||||||||||||||||
| Non-acquired | |||||||||||||||||||||||||||||||||||||
| Non-acquired nonperforming loans |
$ |
15,605 |
|
$ |
15,910 |
|
$ |
15,018 |
|
$ |
15,315 |
|
$ |
14,870 |
|
||||||||||||||||||||||
| Non-acquired OREO and other nonperforming assets |
|
4,374 |
|
|
4,070 |
|
|
4,037 |
|
|
3,229 |
|
|
8,179 |
|
||||||||||||||||||||||
| Total non-acquired nonperforming assets |
|
19,979 |
|
|
19,980 |
|
|
19,055 |
|
|
18,544 |
|
|
23,049 |
|
||||||||||||||||||||||
| Acquired | |||||||||||||||||||||||||||||||||||||
| Acquired nonperforming loans |
|
9,985 |
|
|
14,558 |
|
|
13,651 |
|
|
10,800 |
|
|
9,590 |
|
||||||||||||||||||||||
| Acquired OREO and other nonperforming assets |
|
10,412 |
|
|
7,782 |
|
|
7,755 |
|
|
9,302 |
|
|
9,527 |
|
||||||||||||||||||||||
| Total acquired nonperforming assets |
|
20,397 |
|
|
22,340 |
|
|
21,406 |
|
|
20,102 |
|
|
19,117 |
|
||||||||||||||||||||||
| Total nonperforming assets |
$ |
40,376 |
|
$ |
42,320 |
|
$ |
40,461 |
|
$ |
38,646 |
|
$ |
42,166 |
|
||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||||||||||||||||
|
June 30, |
|
Mar. 31, |
|
Dec. 31, |
|
Sept. 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|||||||||||||||||||||||||
|
|
2019 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
|
2019 |
|
2018 |
|||||||||||||||
| ASSET QUALITY RATIOS: | |||||||||||||||||||||||||||||||||||||
| Allowance for non-acquired loan losses as a | |||||||||||||||||||||||||||||||||||||
| percentage of non-acquired loans (1) |
|
0.62 |
% |
|
0.63 |
% |
|
0.65 |
% |
|
0.66 |
% |
|
0.67 |
% |
0.62 |
% |
0.67 |
% |
||||||||||||||||||
| Allowance for non-acquired loan losses as a percentage of non-acquired nonperforming loans |
|
343.42 |
% |
|
|
326.89 |
% |
|
|
340.88 |
% |
|
|
325.62 |
% |
|
|
321.95 |
% |
|
343.22 |
% |
|
321.95 |
% |
||||||||||||
| Net charge-offs on non-acquired loans as a percentage of average non-acquired loans (annualized) (1) |
|
0.02 |
% |
|
|
0.02 |
% |
|
|
0.06 |
% |
|
|
0.07 |
% |
|
|
0.01 |
% |
|
0.02 |
% |
|
0.02 |
% |
||||||||||||
| Net charge-offs on acquired non-credit impaired loans as a percentage of average acquired non-credit impaired loans (annualized) (1) |
|
0.25 |
% |
|
|
0.03 |
% |
|
|
0.09 |
% |
|
|
0.01 |
% |
|
|
0.14 |
% |
|
0.14 |
% |
|
0.08 |
% |
||||||||||||
| Total nonperforming assets as a percentage of total assets |
|
0.26 |
% |
|
|
0.27 |
% |
|
|
0.28 |
% |
|
|
0.27 |
% |
|
|
0.29 |
% |
|
|
|
|
||||||||||||||
| Excluding Acquired Assets | |||||||||||||||||||||||||||||||||||||
| NPLs as a percentage of period end non-acquired loans (1) |
|
0.18 |
% |
|
0.19 |
% |
|
0.19 |
% |
|
0.20 |
% |
|
0.21 |
% |
||||||||||||||||||||||
| Total nonperforming assets as a percentage of total non-acquired loans and repossessed assets (1) (4) |
|
0.23 |
% |
|
|
0.24 |
% |
|
|
0.24 |
% |
|
|
0.24 |
% |
|
|
0.32 |
% |
||||||||||||||||||
| Total nonperforming assets as a percentage of total assets (5) |
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.16 |
% |
||||||||||||||||||
Total nonperforming assets decreased by $1.9 million to $40.4 million, representing 0.26% of total assets, a decrease of 1 basis point compared to March 31, 2019. Non-performing acquired non-credit impaired loans decreased by $4.6 million and totaled $10.0 million. Legacy non-performing loans decreased by $305,000 during the second quarter of 2019 to $15.6 million at June 30, 2019. The allowance for loan losses as a percentage of non-acquired nonaccrual loans was 343% at June 30, 2019, up from 327% in the first quarter of 2019, and up from 322% at June 30, 2018.
At June 30, 2019, the allowance for non-acquired loan losses was $53.6 million, or 0.62%, of non-acquired period-end loans and $52.0 million, or 0.63%, at March 31, 2019, and $47.9 million, or 0.67% at June 30, 2018. Net charge-offs within the non-acquired portfolio were $452,000, or 0.02% annualized, in the second quarter of 2019, compared to $493,000, or 0.02% annualized, in the first quarter of 2019. Second quarter 2018 net charge-offs totaled $189,000, or 0.01% annualized. Net charge-offs (recoveries) related to the non-acquired loan portfolio were ($292,000) during the second quarter of 2019. The remaining net charge-offs were from overdraft and ready reserve accounts and totaled $744,000.
During the second quarter of 2019, the provision for loan losses totaled $2.
Contacts
Media Contact:
Kellee McGahey (843) 529-5574
Analyst Contact:
Jim Mabry (843) 529-5593
