Full Year 2019 Highlights
- Net income of $57.0 million, or $1.48 per diluted share
- Return on average assets improved to 1.08% for 2019
- Net interest margin of 4.47% for 2019
- Efficiency ratio improved to 61.09% for 2019 compared to 65.15% for 2018
- Originated loans and leases increased $597.9 million, or 26.7%, from December 31, 2018
Fourth Quarter 2019 Highlights
- Net income of $15.9 million, or $0.41 per diluted share
- Return on average assets of 1.16%
- Net interest margin of 4.32%
- Efficiency ratio of 60.93% for the fourth quarter of 2019
- Originated loans and leases increased $67.5 million, or 2.4%, from September 30, 2019
- Initiated cash dividend of $0.03 per share to common stockholders for the quarter and approved share repurchase program
CHICAGO–(BUSINESS WIRE)–Byline Bancorp, Inc. (the “Company” or “Byline”)(NYSE: BY), the parent company of Byline Bank (the “Bank”), today reported net income of $15.9 million, or $0.41 per diluted share, for the fourth quarter of 2019, compared with net income of $15.3 million, or $0.39 per diluted share, for the third quarter of 2019, and net income of $17.1 million, or $0.46 per diluted share, for the fourth quarter of 2018. The Company’s financial results include certain costs associated with its integration of First Evanston Bancorp, Inc. and its bank subsidiary First Bank & Trust, and its acquisition and integration of Oak Park River Forest Bankshares, Inc. (“Oak Park River Forest”) and its bank subsidiary Community Bank of Oak Park River Forest. Excluding these merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, adjusted net income1 was $16.1 million, or $0.42 per adjusted diluted share1, for the fourth quarter of 2019, compared with $16.2 million, or $0.41 per adjusted diluted share, for the third quarter of 2019, and $18.1 million, or $0.49 per adjusted diluted share, for the fourth quarter of 2018. A reconciliation of adjusted net income and adjusted diluted earnings per share to net income and diluted earnings per share, respectively, according to accounting principles generally accepted in the United States of America (“GAAP”) is provided in the financial tables at the end of this release.
Alberto J. Paracchini, President and Chief Executive Officer of Byline, commented, “Our fourth quarter performance completed another strong year for the Byline franchise. In 2019, we completed another accretive acquisition with the addition of Oak Park River Forest Bankshares, capitalized on disruption in the Chicago marketplace to add significant new banking talent to our organization, and continued to attract new commercial clients to the Bank. As we moved through the year, we also made steady progress on improving our deposit mix and better managing our funding costs. Our improving profitability enabled us to initiate a cash dividend in the fourth quarter and deliver additional value to our shareholders. With the strong foundation we have built and our unique positioning in the Chicago market, we believe we have good opportunities to continue enhancing the value of our franchise in the coming years.”
|
1 |
Represents a non-GAAP financial measure. See “Reconciliation of non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure. |
STATEMENTS OF OPERATIONS
Net Interest Income
The following table presents net interest income for the periods indicated:
|
|
|
Three Months Ended |
|
|
Year Ended |
||||||||||||||||||||||
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|||||||
|
(dollars in thousands) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|||||||
|
INTEREST AND DIVIDEND INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans and leases |
|
$ |
58,203 |
|
|
$ |
63,391 |
|
|
$ |
59,524 |
|
|
$ |
54,383 |
|
|
$ |
56,646 |
|
|
$ |
235,501 |
|
|
$ |
184,972 |
|
Interest on taxable securities |
|
|
6,683 |
|
|
|
6,554 |
|
|
|
6,237 |
|
|
|
5,759 |
|
|
|
5,334 |
|
|
|
25,233 |
|
|
|
19,037 |
|
Interest on tax-exempt securities |
|
|
529 |
|
|
|
486 |
|
|
|
428 |
|
|
|
343 |
|
|
|
355 |
|
|
|
1,786 |
|
|
|
1,095 |
|
Other interest and dividend income |
|
|
500 |
|
|
|
598 |
|
|
|
571 |
|
|
|
625 |
|
|
|
560 |
|
|
|
2,294 |
|
|
|
1,847 |
|
Total interest and dividend income |
|
|
65,915 |
|
|
|
71,029 |
|
|
|
66,760 |
|
|
|
61,110 |
|
|
|
62,895 |
|
|
|
264,814 |
|
|
|
206,951 |
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
9,325 |
|
|
|
9,618 |
|
|
|
9,306 |
|
|
|
8,076 |
|
|
|
7,115 |
|
|
|
36,325 |
|
|
|
19,329 |
|
Federal Home Loan Bank advances |
|
|
1,917 |
|
|
|
2,771 |
|
|
|
2,174 |
|
|
|
2,099 |
|
|
|
1,719 |
|
|
|
8,961 |
|
|
|
6,160 |
|
Subordinated debentures and other borrowings |
|
|
759 |
|
|
|
802 |
|
|
|
832 |
|
|
|
850 |
|
|
|
800 |
|
|
|
3,243 |
|
|
|
2,857 |
|
Total interest expense |
|
|
12,001 |
|
|
|
13,191 |
|
|
|
12,312 |
|
|
|
11,025 |
|
|
|
9,634 |
|
|
|
48,529 |
|
|
|
28,346 |
|
Net interest income |
|
$ |
53,914 |
|
|
$ |
57,838 |
|
|
$ |
54,448 |
|
|
$ |
50,085 |
|
|
$ |
53,261 |
|
|
$ |
216,285 |
|
|
$ |
178,605 |
The following table presents the quarter-to-date schedule of average interest-earning assets and average interest-bearing liabilities for the periods indicated:
|
|
|
For the Three Months Ended |
||||||||||||||||||||
|
|
|
December 31, 2019 |
|
September 30, 2019 |
||||||||||||||||||
|
(dollars in thousands) |
|
Average Balance(5) |
|
Interest Inc / Exp |
|
Average Yield / Rate |
|
Average Balance(5) |
|
Interest Inc / Exp |
|
Average Yield / Rate |
||||||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
38,624 |
|
|
$ |
220 |
|
|
2.25 |
% |
|
$ |
34,225 |
|
|
$ |
253 |
|
|
2.93 |
% |
|
Loans and leases(1) |
|
|
3,807,731 |
|
|
|
58,203 |
|
|
6.06 |
% |
|
|
3,860,770 |
|
|
|
63,391 |
|
|
6.51 |
% |
|
Taxable securities |
|
|
1,025,975 |
|
|
|
6,963 |
|
|
2.69 |
% |
|
|
996,750 |
|
|
|
6,899 |
|
|
2.75 |
% |
|
Tax-exempt securities(2) |
|
|
84,640 |
|
|
|
529 |
|
|
2.48 |
% |
|
|
76,161 |
|
|
|
486 |
|
|
2.53 |
% |
|
Total interest-earning assets |
|
$ |
4,956,970 |
|
|
$ |
65,915 |
|
|
5.28 |
% |
|
$ |
4,967,906 |
|
|
$ |
71,029 |
|
|
5.67 |
% |
|
Allowance for loan and lease losses |
|
|
(32,688 |
) |
|
|
|
|
|
|
|
|
(32,246 |
) |
|
|
|
|
|
|
||
|
All other assets |
|
|
502,764 |
|
|
|
|
|
|
|
|
|
500,102 |
|
|
|
|
|
|
|
||
|
TOTAL ASSETS |
|
$ |
5,427,046 |
|
|
|
|
|
|
|
|
$ |
5,435,762 |
|
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest checking |
|
$ |
399,065 |
|
|
$ |
612 |
|
|
0.61 |
% |
|
$ |
358,185 |
|
|
$ |
524 |
|
|
0.58 |
% |
|
Money market accounts |
|
|
790,565 |
|
|
|
1,945 |
|
|
0.98 |
% |
|
|
735,724 |
|
|
|
1,917 |
|
|
1.03 |
% |
|
Savings |
|
|
474,394 |
|
|
|
63 |
|
|
0.05 |
% |
|
|
475,417 |
|
|
|
114 |
|
|
0.10 |
% |
|
Time deposits |
|
|
1,231,641 |
|
|
|
6,705 |
|
|
2.16 |
% |
|
|
1,270,050 |
|
|
|
7,063 |
|
|
2.21 |
% |
|
Total interest-bearing deposits |
|
|
2,895,665 |
|
|
|
9,325 |
|
|
1.28 |
% |
|
|
2,839,376 |
|
|
|
9,618 |
|
|
1.34 |
% |
|
Federal Home Loan Bank advances |
|
|
371,730 |
|
|
|
1,917 |
|
|
2.05 |
% |
|
|
530,055 |
|
|
|
2,771 |
|
|
2.07 |
% |
|
Other borrowed funds |
|
|
80,039 |
|
|
|
759 |
|
|
3.76 |
% |
|
|
70,080 |
|
|
|
802 |
|
|
4.54 |
% |
|
Total borrowings |
|
|
451,769 |
|
|
|
2,676 |
|
|
2.35 |
% |
|
|
600,135 |
|
|
|
3,573 |
|
|
2.36 |
% |
|
Total interest-bearing liabilities |
|
$ |
3,347,434 |
|
|
$ |
12,001 |
|
|
1.42 |
% |
|
$ |
3,439,511 |
|
|
$ |
13,191 |
|
|
1.52 |
% |
|
Non-interest-bearing demand deposits |
|
|
1,288,960 |
|
|
|
|
|
|
|
|
|
1,223,556 |
|
|
|
|
|
|
|
||
|
Other liabilities |
|
|
44,907 |
|
|
|
|
|
|
|
|
|
42,914 |
|
|
|
|
|
|
|
||
|
Total stockholders’ equity |
|
|
745,745 |
|
|
|
|
|
|
|
|
|
729,781 |
|
|
|
|
|
|
|
||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
5,427,046 |
|
|
|
|
|
|
|
|
$ |
5,435,762 |
|
|
|
|
|
|
|
||
|
Net interest spread(3) |
|
|
|
|
|
|
|
|
3.86 |
% |
|
|
|
|
|
|
|
|
4.15 |
% |
||
|
Net interest income |
|
|
|
|
$ |
53,914 |
|
|
|
|
|
|
|
$ |
57,838 |
|
|
|
||||
|
Net interest margin(4) |
|
|
|
|
|
|
|
|
4.32 |
% |
|
|
|
|
|
|
|
|
4.62 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net loan accretion impact on margin |
|
|
|
|
$ |
5,418 |
|
|
0.43 |
% |
|
|
|
|
$ |
7,703 |
|
|
0.62 |
% |
||
|
(1) |
Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances. |
||
|
(2) |
Interest income and rates exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality. |
||
|
(3) |
Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities. |
||
|
(4) |
Represents net interest income (annualized) divided by total average earning assets. |
||
|
(5) |
Average balances are average daily balances. |
Net interest income for the fourth quarter of 2019 was $53.9 million, a decrease of $3.9 million, or 6.8%, from $57.8 million for the third quarter of 2019.
The decrease in net interest income was primarily due to:
- A decrease of $5.2 million in interest and fees on loans and leases, mainly due to a $2.3 million decrease in accretion income on acquired loans and lower average yields on loans as a result of decreases in short-term rates in September and October 2019.
Partially offset by:
- A decrease of $854,000 in interest expense on Federal Home Loan Bank advances, mostly due to a decrease in average advances during the quarter as average lower-cost deposits grew; and
- A decrease of $293,000 in interest expense on deposits, as a result of lower average time deposit balances and cost attributable to maturities of higher-rate time deposits.
Net interest margin for the fourth quarter of 2019 was 4.32%, a decrease of 30 basis points compared to 4.62% for the third quarter of 2019. Total net accretion income on acquired loans contributed 43 basis points to the net interest margin for the fourth quarter of 2019 compared to 62 basis points for the third quarter of 2019, a decrease of 19 basis points. The net interest margin decrease during the fourth quarter of 2019 was primarily driven by decreased loan and lease yields largely resulting from decreased loan accretion income and decreases in short-term rates.
The average cost of total deposits was 0.88% for the fourth quarter of 2019, a decrease of six basis points compared to the third quarter of 2019, mainly due to a favorable change in deposit mix and a lower average cost of time deposits. Average non-interest-bearing demand deposits, money market accounts, and interest-bearing checking accounts grew by $65.4 million, $54.8 million, and $40.9 million, respectively, while average time deposits decreased by $38.4 million.
Provision for Loan and Lease Losses
The provision for loan and lease losses was $4.4 million for the fourth quarter of 2019, a decrease of $1.5 million compared to $5.9 million for the third quarter of 2019. The fourth quarter included allocations of $3.2 million for originated loans and leases, $524,000 for acquired non-impaired loans, and $694,000 for acquired impaired loans. The provision during the fourth quarter of 2019 for originated loans reflects growth in that portfolio, particularly the unguaranteed portion of government guaranteed loans.
Non-interest Income
The following table presents the components of non-interest income for the periods indicated:
|
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||||||||||||||
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|||||||
|
(dollars in thousands) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
|
NON-INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees and service charges on deposits |
|
$ |
1,635 |
|
|
$ |
1,612 |
|
|
$ |
1,441 |
|
|
$ |
1,770 |
|
|
$ |
1,852 |
|
|
$ |
6,458 |
|
|
$ |
6,445 |
|
|
Loan servicing revenue |
|
|
2,834 |
|
|
|
2,692 |
|
|
|
2,630 |
|
|
|
2,539 |
|
|
|
2,667 |
|
|
|
10,695 |
|
|
|
10,272 |
|
|
Loan servicing asset revaluation |
|
|
(2,545 |
) |
|
|
(1,610 |
) |
|
|
(1,223 |
) |
|
|
(1,261 |
) |
|
|
(2,862 |
) |
|
|
(6,639 |
) |
|
|
(9,269 |
) |
|
ATM and interchange fees |
|
|
1,150 |
|
|
|
973 |
|
|
|
945 |
|
|
|
717 |
|
|
|
1,010 |
|
|
|
3,785 |
|
|
|
4,313 |
|
|
Net gains on sales of securities available-for-sale |
|
|
— |
|
|
|
178 |
|
|
|
973 |
|
|
|
— |
|
|
|
160 |
|
|
|
1,151 |
|
|
|
164 |
|
|
Change in fair value of equity securities, net |
|
|
381 |
|
|
|
(15 |
) |
|
|
551 |
|
|
|
499 |
|
|
|
— |
|
|
|
1,416 |
|
|
|
— |
|
|
Net gains on sales of loans |
|
|
8,735 |
|
|
|
9,405 |
|
|
|
7,472 |
|
|
|
6,233 |
|
|
|
9,337 |
|
|
|
31,845 |
|
|
|
31,551 |
|
|
Wealth management and trust income |
|
|
704 |
|
|
|
653 |
|
|
|
626 |
|
|
|
595 |
|
|
|
679 |
|
|
|
2,578 |
|
|
|
1,545 |
|
|
Other non-interest income |
|
|
1,622 |
|
|
|
918 |
|
|
|
768 |
|
|
|
896 |
|
|
|
1,447 |
|
|
|
4,204 |
|
|
|
5,505 |
|
|
Total non-interest income |
|
$ |
14,516 |
|
|
$ |
14,806 |
|
|
$ |
14,183 |
|
|
$ |
11,988 |
|
|
$ |
14,290 |
|
|
$ |
55,493 |
|
|
$ |
50,526 |
|
Non-interest income for the fourth quarter of 2019 was $14.5 million, a decrease of $290,000, or 2.0%, compared to $14.8 million for the third quarter of 2019.
The decrease in total non-interest income was primarily due to:
- An increase of $935,000 in loan servicing asset revaluation, reflecting an unfavorable change in fair value of the servicing asset as a result of increased prepayments and discount rates; and
- A decrease of $670,000 in net gains on sales of loans, mainly due to a decrease in average premium on sales of government guaranteed loans.
Partially offset by:
- An increase of $704,000 in other non-interest income, mostly due to a favorable swap valuation adjustment and increased swap activity; and
- An increase in the change in fair value of equity securities, net, of $396,000 due to an increase in the fair value of those securities.
During the fourth quarter of 2019, the Company sold $101.5 million of U.S. government guaranteed loans compared to $93.3 million during the third quarter of 2019. The increase in sales is principally due to the timing of loans closed becoming fully funded.
Non-interest Expense
The following table presents the components of non-interest expense for the periods indicated:
|
|
|
Three Months Ended |
|
|
Year Ended |
||||||||||||||||||||||
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|||||||
|
(dollars in thousands) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|||||||
|
NON-INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
$ |
24,228 |
|
|
$ |
24,537 |
|
|
$ |
23,652 |
|
|
$ |
22,892 |
|
|
$ |
21,548 |
|
|
$ |
95,309 |
|
|
$ |
80,382 |
|
Occupancy expense, net |
|
|
4,306 |
|
|
|
3,745 |
|
|
|
4,337 |
|
|
|
4,280 |
|
|
|
4,027 |
|
|
|
16,668 |
|
|
|
15,829 |
|
Equipment expense |
|
|
935 |
|
|
|
767 |
|
|
|
732 |
|
|
|
669 |
|
|
|
641 |
|
|
|
3,103 |
|
|
|
2,419 |
|
Loan and lease related expenses |
|
|
2,648 |
|
|
|
1,949 |
|
|
|
1,841 |
|
|
|
1,577 |
|
|
|
2,223 |
|
|
|
8,015 |
|
|
|
6,109 |
|
Legal, audit and other professional fees |
|
|
2,340 |
|
|
|
4,066 |
|
|
|
2,981 |
|
|
|
2,066 |
|
|
|
2,746 |
|
|
|
11,453 |
|
|
|
11,373 |
|
Data processing |
|
|
2,678 |
|
|
|
4,062 |
|
|
|
3,849 |
|
|
|
3,144 |
|
|
|
2,846 |
|
|
|
13,733 |
|
|
|
18,242 |
|
Net loss (gain) recognized on other real estate owned and other related expenses |
|
|
122 |
|
|
|
95 |
|
|
|
252 |
|
|
|
196 |
|
|
|
48 |
|
|
|
665 |
|
|
|
235 |
|
Regulatory assessments |
|
|
157 |
|
|
|
228 |
|
|
|
371 |
|
|
|
(59 |
) |
|
|
462 |
|
|
|
697 |
|
|
|
1,744 |
|
Other intangible assets amortization expense |
|
|
2,003 |
|
|
|
2,003 |
|
|
|
1,959 |
|
|
|
1,773 |
|
|
|
1,834 |
|
|
|
7,738 |
|
|
|
5,629 |
|
Advertising and promotions |
|
|
1,114 |
|
|
|
843 |
|
|
|
732 |
|
|
|
709 |
|
|
|
590 |
|
|
|
3,398 |
|
|
|
1,723 |
|
Telecommunications |
|
|
488 |
|
|
|
474 |
|
|
|
537 |
|
|
|
464 |
|
|
|
391 |
|
|
|
1,963 |
|
|
|
1,710 |
|
Other non-interest expense |
|
|
2,675 |
|
|
|
2,679 |
|
|
|
2,711 |
|
|
|
2,968 |
|
|
|
2,732 |
|
|
|
11,033 |
|
|
|
9,501 |
|
Total non-interest expense |
|
$ |
43,694 |
|
|
$ |
45,448 |
|
|
$ |
43,954 |
|
|
$ |
40,679 |
|
|
$ |
40,088 |
|
|
$ |
173,775 |
|
|
$ |
154,896 |
Non-interest expense for the fourth quarter of 2019 was $43.7 million, a decrease of $1.8 million, or 3.9%, from $45.4 million for the third quarter of 2019.
The decrease in total non-interest expense was primarily due to:
- A decrease of $1.7 million in legal, audit and other professional fees, as the prior quarter reflected $1.5 million of non-recurring professional services costs;
- A decrease of $1.4 million in data processing expense, mostly due to expenses associated with our Oak Park River Forest core system conversion during the prior quarter; and
- A decrease of $309,000 in salaries and employee benefits, as the prior quarter included acquisition related salary and employee benefit costs.
Partially offset by:
- An increase of $699,000 in loan and lease related expenses due to higher loan expenses on government guaranteed loans;
- An increase of $561,000 in occupancy expense, net, largely due to a favorable accrual adjustment to property tax expense in the prior quarter as well as an increase in rental expense related to office expansion; and
- An increase of $271,000 in advertising and promotions expense due to additional media advertisement during the quarter.
The Company’s efficiency ratio was 60.93% for the fourth quarter of 2019, compared with 59.81% for the third quarter of 2019. Excluding merger-related expenses, core system conversion expenses, and impairment charges on assets held for sale, the Company’s adjusted efficiency ratio1 was 60.51% for the fourth quarter of 2019, compared with 58.17% for the third quarter of 2019.
|
(1) |
Represents a non-GAAP financial measure. See “Reconciliation of non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure. |
INCOME TAXES
The Company recorded income tax expense of $4.5 million during the fourth quarter of 2019, an effective tax rate of 22.1%, compared to $5.9 million during the third quarter of 2019, an effective tax rate of 27.9%. The decrease in the effective tax rate was due to tax benefits recorded as a result of the recognition of tax assets associated with other real estate owned.
STATEMENTS OF FINANCIAL CONDITION
Total assets were $5.5 billion at December 31, 2019, an increase of $83.5 million compared to $5.4 billion at September 30, 2019, and an increase of $579.2 million compared to $4.9 billion at December 31, 2018.
The current quarter increase was primarily due to:
- An increase in securities of $154.7 million, reflecting purchases of mortgage-backed securities during the quarter;
- An increase in loans held for sale of $4.6 million, largely due to the timing of loan originations during the quarter; and
- An increase in other real estate owned of $3.4 million due to the volume of transfers in exceeding sales.
Partially offset by:
- A decrease in loans and leases of $45.4 million, mostly due to a decrease of $112.9 million in our acquired loan portfolio, partially offset by an increase of $67.5 million in our originated loan portfolio; and
- A decrease in cash and cash equivalents of $28.1 million due to the redeployment of cash into earning assets.
The following table shows our allocation of the originated, acquired impaired, and acquired non-impaired loans and leases at the dates indicated:
|
|
|
December 31, 2019 |
|
September 30, 2019 |
|
December 31, 2018 |
||||||||||||||||||
|
(dollars in thousands) |
|
Amount |
|
% of Total |
|
Amount |
|
% of Total |
|
Amount |
|
% of Total |
||||||||||||
|
Originated loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial real estate |
|
$ |
792,263 |
|
|
|
20.9 |
% |
|
$ |
772,559 |
|
|
|
20.2 |
% |
|
$ |
652,234 |
|
|
|
18.6 |
% |
|
Residential real estate |
|
|
483,072 |
|
|
|
12.8 |
% |
|
|
497,839 |
|
|
|
13.0 |
% |
|
|
466,309 |
|
|
|
13.3 |
% |
|
Construction, land development, and other land |
|
|
235,794 |
|
|
|
6.2 |
% |
|
|
236,780 |
|
|
|
6.2 |
% |
|
|
144,128 |
|
|
|
4.1 |
% |
|
Commercial and industrial |
|
|
1,160,996 |
|
|
|
30.7 |
% |
|
|
1,096,400 |
|
|
|
28.6 |
% |
|
|
803,508 |
|
|
|
22.9 |
% |
|
Installment and other |
|
|
5,372 |
|
|
|
0.1 |
% |
|
|
7,818 |
|
|
|
0.2 |
% |
|
|
11,718 |
|
|
|
0.3 |
% |
|
Leasing financing receivables |
|
|
158,155 |
|
|
|
4.2 |
% |
|
|
156,758 |
|
|
|
4.1 |
% |
|
|
159,901 |
|
|
|
4.6 |
% |
|
Total originated loans and leases |
|
$ |
2,835,652 |
|
|
|
74.9 |
% |
|
$ |
2,768,154 |
|
|
|
72.3 |
% |
|
$ |
2,237,798 |
|
|
|
63.8 |
% |
|
Acquired impaired loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial real estate |
|
$ |
135,914 |
|
|
|
3.6 |
% |
|
$ |
142,435 |
|
|
|
3.7 |
% |
|
$ |
146,808 |
|
|
|
4.2 |
% |
|
Residential real estate |
|
|
100,223 |
|
|
|
2.7 |
% |
|
|
109,409 |
|
|
|
2.9 |
% |
|
|
113,934 |
|
|
|
3.3 |
% |
|
Construction, land development, and other land |
|
|
5,373 |
|
|
|
0.1 |
% |
|
|
4,562 |
|
|
|
0.1 |
% |
|
|
3,779 |
|
|
|
0.1 |
% |
|
Commercial and industrial |
|
|
16,909 |
|
|
|
0.4 |
% |
|
|
18,349 |
|
|
|
0.5 |
% |
|
|
12,617 |
|
|
|
0.4 |
% |
|
Installment and other |
|
|
249 |
|
|
|
0.0 |
% |
|
|
267 |
|
|
|
0.0 |
% |
|
|
404 |
|
|
|
0.0 |
% |
|
Total acquired impaired loans |
|
$ |
258,668 |
|
|
|
6.8 |
% |
|
$ |
275,022 |
|
|
|
7.2 |
% |
|
$ |
277,542 |
|
|
|
8.0 |
% |
|
Acquired non-impaired loans and leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial real estate |
|
$ |
348,365 |
|
|
|
9.2 |
% |
|
$ |
391,294 |
|
|
|
10.2 |
% |
|
$ |
462,565 |
|
|
|
13.2 |
% |
|
Residential real estate |
|
|
128,527 |
|
|
|
3.4 |
% |
|
|
141,855 |
|
|
|
3.7 |
% |
|
|
124,659 |
|
|
|
3.6 |
% |
|
Construction, land development, and other land |
|
|
37,490 |
|
|
|
1.0 |
% |
|
|
39,657 |
|
|
|
1.0 |
% |
|
|
37,442 |
|
|
|
1.1 |
% |
|
Commercial and industrial |
|
|
153,660 |
|
|
|
4.1 |
% |
|
|
187,413 |
|
|
|
4.9 |
% |
|
|
328,672 |
|
|
|
9.4 |
% |
|
Installment and other |
|
|
944 |
|
|
|
0.0 |
% |
|
|
1,269 |
|
|
|
0.0 |
% |
|
|
1,596 |
|
|
|
0.0 |
% |
|
Leasing financing receivables |
|
|
22,355 |
|
|
|
0.6 |
% |
|
|
26,426 |
|
|
|
0.7 |
% |
|
|
31,352 |
|
|
|
0.9 |
% |
|
Total acquired non-impaired loans and leases |
|
$ |
691,341 |
|
|
|
18.3 |
% |
|
$ |
787,914 |
|
|
|
20.5 |
% |
|
$ |
986,286 |
|
|
|
28.2 |
% |
|
Total loans and leases |
|
$ |
3,785,661 |
|
|
|
100.0 |
% |
|
$ |
3,831,090 |
|
|
|
100.0 |
% |
|
$ |
3,501,626 |
|
|
|
100.0 |
% |
|
Allowance for loan and lease losses |
|
|
(31,936 |
) |
|
|
|
|
|
(31,585 |
) |
|
|
|
|
|
(25,201 |
) |
|
|
|
|||
|
Total loans and leases, net of allowance for loan and lease losses |
|
$ |
3,753,725 |
|
|
|
|
|
$ |
3,799,505 |
|
|
|
|
|
$ |
3,476,425 |
|
|
|
|
|||
ASSET QUALITY
Non-Performing Assets
The following table sets forth the amounts of non-performing loans and leases (excluding acquired impaired), non-performing assets, and other real estate owned at the dates indicated:
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|||||
|
(dollars in thousands) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|||||
|
Non-performing assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans and leases |
|
$ |
36,272 |
|
|
$ |
39,529 |
|
|
$ |
34,027 |
|
|
$ |
28,539 |
|
|
$ |
25,834 |
|
|
Past due loans and leases 90 days or more and still accruing interest |
|
|
— |
|
|
|
— |
|
|
|
996 |
|
|
|
— |
|
|
|
— |
|
|
Accruing troubled debt restructured loans |
|
|
1,771 |
|
|
|
2,204 |
|
|
|
1,529 |
|
|
|
1,921 |
|
|
|
1,813 |
|
|
Total non-performing loans and leases |
|
|
38,043 |
|
|
|
41,733 |
|
|
|
36,552 |
|
|
|
30,460 |
|
|
|
27,647 |
|
|
Other real estate owned |
|
|
9,896 |
|
|
|
6,502 |
|
|
|
6,531 |
|
|
|
4,595 |
|
|
|
5,041 |
|
|
Total non-performing assets |
|
$ |
47,939 |
|
|
$ |
48,235 |
|
|
$ |
43,083 |
|
|
$ |
35,055 |
|
|
$ |
32,688 |
|
|
Total non-performing loans and leases as a percentage of total loans and leases |
|
|
1.00 |
% |
|
|
1.09 |
% |
|
|
0.95 |
% |
|
|
0.85 |
% |
|
|
0.79 |
% |
|
Total non-performing assets as a percentage of total assets |
|
|
0.87 |
% |
|
|
0.89 |
% |
|
|
0.80 |
% |
|
|
0.70 |
% |
|
|
0.66 |
% |
|
Allowance for loan and lease losses as a percentage of non-performing loans and leases |
|
|
83.95 |
% |
|
|
75.68 |
% |
|
|
85.17 |
% |
|
|
88.99 |
% |
|
|
91.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets guaranteed by U.S. government: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans guaranteed |
|
$ |
4,232 |
|
|
$ |
4,167 |
|
|
$ |
4,723 |
|
|
$ |
5,070 |
|
|
$ |
4,245 |
|
|
Past due loans 90 days or more and still accruing interest guaranteed |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Accruing troubled debt restructured loans guaranteed |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
381 |
|
|
Total non-performing loans guaranteed |
|
$ |
4,232 |
|
|
$ |
4,167 |
|
|
$ |
4,723 |
|
|
$ |
5,070 |
|
|
$ |
4,626 |
|
|
Total non-performing loans and leases not guaranteed as a percentage of total loans and leases |
|
|
0.89 |
% |
|
|
0.98 |
% |
|
|
0.82 |
% |
|
|
0.71 |
% |
|
|
0.66 |
% |
|
Total non-performing assets not guaranteed as a percentage of total assets |
|
|
0.79 |
% |
|
|
0.81 |
% |
|
|
0.71 |
% |
|
|
0.60 |
% |
|
|
0.57 |
% |
Variances in non-performing assets:
- Non-performing loans and leases were $38.0 million at December 31, 2019, a decrease of $3.6 million from $41.7 million at September 30, 2019, principally due to loan resolutions; and
- Other real estate owned was $9.9 million at December 31, 2019, an increase of $3.4 million from $6.5 million at September 30, 2019 due to higher volume of transfers from loans exceeding sales.
U.S. government guaranteed balances of non-performing loans were consistent at $4.2 million at December 31, 2019 and September 30, 2019.
Allowance for Loan and Lease Losses
The following table presents the balance and activity within the allowance for loan and lease losses for the periods indicated:
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
December 31, |
|
December 31, |
||||||||||||||
|
(dollars in thousands) |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||||
|
Allowance for loan and lease losses, beginning of period |
|
$ |
31,585 |
|
|
$ |
31,132 |
|
|
$ |
27,106 |
|
|
$ |
25,201 |
|
|
$ |
23,424 |
|
|
$ |
25,201 |
|
|
$ |
16,706 |
|
|
Provision for loan and lease losses |
|
|
4,387 |
|
|
|
5,931 |
|
|
|
6,391 |
|
|
|
3,999 |
|
|
|
3,882 |
|
|
|
20,708 |
|
|
|
18,795 |
|
|
Net charge-offs of loans and leases |
|
|
(4,036 |
) |
|
|
(5,478 |
) |
|
|
(2,365 |
) |
|
|
(2,094 |
) |
|
|
(2,105 |
) |
|
|
(13,973 |
) |
|
|
(10,300 |
) |
|
Allowance for loan and lease losses, end of period |
|
$ |
31,936 |
|
|
$ |
31,585 |
|
|
$ |
31,132 |
|
|
$ |
27,106 |
|
|
$ |
25,201 |
|
|
$ |
31,936 |
|
|
$ |
25,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Allowance for loan and lease losses to period end total loans and leases held for investment |
|
|
0.84 |
% |
|
|
0.82 |
% |
|
|
0.81 |
% |
|
|
0.76 |
% |
|
|
0.72 |
% |
|
|
0.84 |
% |
|
|
0.72 |
% |
|
Net charge-offs (annualized) to average loans and leases outstanding during the period |
|
|
0.42 |
% |
|
|
0.56 |
% |
|
|
0.25 |
% |
|
|
0.24 |
% |
|
|
0.24 |
% |
|
|
0.37 |
% |
|
|
0.35 |
% |
|
Provision for loan and lease losses to net charge-offs during the period |
|
1.09x |
|
1.08x |
|
2.70x |
|
1.91x |
|
1.84x |
|
|
1.48x |
|
1.82x |
|||||||||||||
The allowance for loan and lease losses as a percentage of total loans and leases held for investment increased to 0.
Contacts
Investors:
Tony Rossi
Financial Profiles, Inc.
310-622-8221
[email protected]
Media:
Erin O’Neill
Director of Marketing
Byline Bank
773-475-2901
[email protected]
