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 twelve-month period ended December 31, 2019.
The Company reported consolidated net income of $1.45 per diluted common share for the three months ended December 31, 2019, compared to $1.35 per diluted common share for the three months ended December 31, 2018. For the year ended December 31, 2019, net income totaled $5.36 per diluted common share, compared to $4.86 per diluted common share, an increase of 10.3%.
Adjusted net income (non-GAAP) totaled $1.48 per diluted share for the three months ended December 31, 2019, compared to $1.35 per diluted share one year ago. For the year ended December 31, 2019, adjusted net income (non-GAAP) totaled $5.63 per diluted share, compared to $5.50 per diluted share, an increase of 2.4%.
Soundness
Balance sheet strength and optionality remains a core commitment. Asset quality was exceptional with net charge-offs on non-acquired loans at 0.06% in the fourth quarter of 2019 and 0.04% for fiscal year 2019. Capital levels were strong and tangible book value increased by 7.8% in 2019. We preserved the integrity of our balance sheet while repurchasing over 2.1 million shares, or ~6%, of the company’s outstanding common stock during 2019.
Profitability
The company enacted several initiatives in 2019 to improve our operating leverage including closing thirteen branches, termination of the pension plan, and began the process of implementing a new commercial loan system. Expenses decreased in FY19 by $16.3 million (GAAP) and $0.6 million (adjusted – non-GAAP), a decrease of 3.9% and 0.2%, respectively. We remain focused on controlling expense growth and recently announced additional branch optimization plans for 2020.
Loan / Deposit Growth
During 2019, we invested in expansion of our branch presence in Raleigh, NC, and opened a new market headquarters in Richmond, VA. We continue to recruit talent from large institutions and benefit from our deep and dense footprint in vibrant economic markets. Net loan growth was 3.2% in 2019 fueled by 9% growth in C&I loans. Overall deposits grew by 4.6% to over $12.1 billion, and we added ~4,500 transaction accounts during the year.
Quarterly Cash Dividend
The Company’s Board of Directors voted to increase the common stock dividend this quarter by $0.01 to $0.47 per share, which is a 2.2% increase compared to last quarter, and a $0.09 per share increase, or 23.7%, compared to the same quarter one year ago. The dividend will be payable on February 14, 2020 to shareholders of record as of February 7, 2020. This dividend represents the 8th consecutive quarterly increase in the cash dividend paid to the shareholders of SSB.
Fourth Quarter 2019 Financial Performance
|
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
Dec. 31, |
Dec. 31, |
|||||||||||||||||||||
| INCOME STATEMENT |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||||
| Interest income | |||||||||||||||||||||||||||
| Loans, including fees (8) |
$ |
132,615 |
|
$ |
134,953 |
|
$ |
135,388 |
|
$ |
131,834 |
|
$ |
132,541 |
|
$ |
534,790 |
|
$ |
521,478 |
|
||||||
| Investment securities, federal funds sold and securities | |||||||||||||||||||||||||||
| purchased under agreements to resell |
|
14,839 |
|
|
15,048 |
|
|
14,594 |
|
|
11,556 |
|
|
11,327 |
|
|
56,037 |
|
|
45,730 |
|
||||||
| Total interest income |
|
147,454 |
|
|
150,001 |
|
|
149,982 |
|
|
143,390 |
|
|
143,868 |
|
|
590,827 |
|
|
567,208 |
|
||||||
| Interest expense | |||||||||||||||||||||||||||
| Deposits |
|
15,227 |
|
|
16,655 |
|
|
17,393 |
|
|
16,645 |
|
|
15,310 |
|
|
65,920 |
|
|
45,452 |
|
||||||
| Federal funds purchased, securities sold under agreements | |||||||||||||||||||||||||||
| to repurchase, and other borrowings |
|
5,771 |
|
|
5,973 |
|
|
5,410 |
|
|
3,478 |
|
|
2,166 |
|
|
20,632 |
|
|
8,540 |
|
||||||
| Total interest expense |
|
20,998 |
|
|
22,628 |
|
|
22,803 |
|
|
20,123 |
|
|
17,476 |
|
|
86,552 |
|
|
53,992 |
|
||||||
| Net interest income |
|
126,456 |
|
|
127,373 |
|
|
127,179 |
|
|
123,267 |
|
|
126,392 |
|
|
504,275 |
|
|
513,216 |
|
||||||
| Provision for loan losses |
|
3,557 |
|
|
4,028 |
|
|
3,704 |
|
|
1,488 |
|
|
3,734 |
|
|
12,777 |
|
|
13,783 |
|
||||||
| Net interest income after provision for loan losses |
|
122,899 |
|
|
123,345 |
|
|
123,475 |
|
|
121,779 |
|
|
122,658 |
|
|
491,498 |
|
|
499,433 |
|
||||||
| Noninterest income |
|
36,307 |
|
|
37,582 |
|
|
37,618 |
|
|
32,058 |
|
|
35,642 |
|
|
143,565 |
|
|
145,749 |
|
||||||
| Pre-tax operating expense |
|
99,134 |
|
|
96,364 |
|
|
97,803 |
|
|
97,125 |
|
|
96,664 |
|
|
400,086 |
|
|
391,059 |
|
||||||
| Branch consolid./acquisition and merger expense |
|
1,494 |
|
|
— |
|
|
2,078 |
|
|
1,114 |
|
|
— |
|
|
4,552 |
|
|
29,868 |
|
||||||
| Pension plan termination expense |
|
— |
|
|
— |
|
|
9,526 |
|
|
— |
|
|
— |
|
|
— |
|
|
4,539 |
|
||||||
| Total noninterest expense |
|
100,628 |
|
|
96,364 |
|
|
109,407 |
|
|
98,239 |
|
|
96,664 |
|
|
404,638 |
|
|
420,927 |
|
||||||
| Income before provision for income taxes |
|
58,578 |
|
|
64,563 |
|
|
51,686 |
|
|
55,598 |
|
|
61,636 |
|
|
230,425 |
|
|
224,255 |
|
||||||
| Provision for income taxes |
|
9,487 |
|
|
12,998 |
|
|
10,226 |
|
|
11,231 |
|
|
12,632 |
|
|
43,942 |
|
|
45,384 |
|
||||||
| Net income |
$ |
49,091 |
|
$ |
51,565 |
|
$ |
41,460 |
|
$ |
44,367 |
|
$ |
49,004 |
|
$ |
186,483 |
|
$ |
178,871 |
|
||||||
| Adjusted net income (non-GAAP) (3) | |||||||||||||||||||||||||||
| Net income (GAAP) |
$ |
49,091 |
|
$ |
51,565 |
|
$ |
41,460 |
|
$ |
44,367 |
|
$ |
49,004 |
|
$ |
186,483 |
|
$ |
178,871 |
|
||||||
| Securities losses (gains), net of tax |
|
(20 |
) |
|
(349 |
) |
|
(1,371 |
) |
|
(432 |
) |
|
2 |
|
|
(2,173 |
) |
|
520 |
|
||||||
| Provision for income taxes, deferred tax revaluation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(990 |
) |
||||||
| 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 |
|
1,252 |
|
|
– |
|
|
1,667 |
|
|
782 |
|
|
— |
|
|
3,701 |
|
|
23,692 |
|
||||||
| Adjusted net income (non-GAAP) |
$ |
50,323 |
|
$ |
51,216 |
|
$ |
49,397 |
|
$ |
44,824 |
|
$ |
49,006 |
|
$ |
195,759 |
|
$ |
202,093 |
|
||||||
| Basic earnings per common share |
$ |
1.46 |
|
$ |
1.51 |
|
$ |
1.18 |
|
$ |
1.25 |
|
$ |
1.36 |
|
$ |
5.40 |
|
$ |
4.90 |
|
||||||
| Diluted earnings per common share |
$ |
1.45 |
|
$ |
1.50 |
|
$ |
1.17 |
|
$ |
1.25 |
|
$ |
1.35 |
|
$ |
5.36 |
|
$ |
4.86 |
|
||||||
| Adjusted net income per common share – Basic (non-GAAP) (3) |
$ |
1.49 |
|
$ |
1.50 |
|
$ |
1.41 |
|
$ |
1.26 |
|
$ |
1.36 |
|
$ |
5.66 |
|
$ |
5.53 |
|
||||||
| Adjusted net income per common share – Diluted (non-GAAP) (3) |
$ |
1.48 |
|
$ |
1.49 |
|
$ |
1.40 |
|
$ |
1.26 |
|
$ |
1.35 |
|
$ |
5.63 |
|
$ |
5.50 |
|
||||||
| Dividends per common share |
$ |
0.46 |
|
$ |
0.43 |
|
$ |
0.40 |
|
$ |
0.38 |
|
$ |
0.36 |
|
$ |
1.67 |
|
$ |
1.38 |
|
||||||
| Basic weighted-average common shares outstanding |
|
33,677,851 |
|
|
34,056,771 |
|
|
35,089,129 |
|
|
35,445,087 |
|
|
36,154,922 |
|
|
34,560,544 |
|
|
36,530,112 |
|
||||||
| Diluted weighted-average common shares outstanding |
|
33,964,216 |
|
|
34,300,206 |
|
|
35,299,747 |
|
|
35,618,705 |
|
|
36,364,873 |
|
|
34,797,444 |
|
|
36,775,632 |
|
||||||
| Effective tax rate |
|
16.20 |
% |
|
20.13 |
% |
|
19.78 |
% |
|
20.20 |
% |
|
20.49 |
% |
|
19.07 |
% |
|
20.24 |
% |
||||||
The Company reported consolidated net income of $49.1 million, or $1.45 per diluted common share for the three-months ended December 31, 2019, a decrease of $2.5 million, or 4.8% from the third quarter of 2019. Diluted EPS was $1.50 in the third quarter of 2019, or $51.6 million. Compared to the fourth quarter of 2018, Diluted EPS improved $0.10, due to the decline in weighted average diluted share count of 2.4 million shares. The decline in weighted-average diluted shares resulted from the continuation of the Company repurchasing common shares over the past year. Net interest income decreased by $917,000 compared to the third quarter of 2019 on lower interest income, offset partially by lower expense. The provision for loan losses decreased by $471,000, with the nonacquired provision for loan losses increasing $978,000 compared to third quarter of 2019; while the acquired loan loss provision declined by $1.4 million. Noninterest income was down $1.3 million compared to third quarter of 2019 to $36.3 million in the fourth quarter of 2019. Excluding securities gains, noninterest income decreased by $862,000 in the fourth quarter of 2019. Noninterest expense was higher in the fourth quarter of 2019 compared to the third quarter of 2019 by $4.3 million due primarily to higher FDIC assessment cost of $1.1 million, higher branch consolidation cost of $1.5 million, and higher business development and staff related cost of $887,000. The Company received a $760,000 credit on its FDIC assessment in 4Q 2019, which was lower than the credit received in 3Q 2019 of $1.6 million. The efficiency ratio and adjusted efficiency ratio were 61.6% and 60.7% in 4Q 2019, respectively, compared to 58.4% for both in the third quarter of 2019.
Income Tax Expense
During the fourth quarter of 2019, our effective income tax rate decreased to 16.20% from 20.13% in the third quarter of 2019 and from 20.49% in the fourth quarter of 2018. The primary factor in the lower effective tax rate in the fourth quarter of 2019 was the recognition of additional income tax credits received, specifically one credit totaling approximately $2.4 million. During 2019, the Company has increased its investment in qualified affordable housing projects and other tax advantaged opportunities by approximately $39.4 million, resulting in the additional tax credits available to assist in lowering the effective tax rate in 2019 compared to 2018. In addition, pre-tax income was lower in the fourth quarter of 2019 by approximately $6.0 million than in the third quarter of 2019, further lowering the effective rate for the quarter. Compared to the fourth quarter of 2018, the lower effective rate was the result of additional federal tax credits discussed above and lower pre-tax income.
Current Expected Credit Losses (“CECL”) – update
Consistent with our prior estimates, the current estimate of our allowance for credit losses (ACL) with the adoption of ASU 2016-13 (CECL) is expected to be between $105.0 and $120.0 million, including the liability for unfunded commitments. The increase in the ACL is driven by the acquired non-credit impaired loan portfolio (ANCI), the non-acquired loan portfolio, and reserve on unfunded commitments. The total increase will range between $43.0 million and $58.0 million (pre-tax) from the allowance for loan losses and reserve on unfunded commitments recorded at December 31, 2019. The estimated decline in equity, net of tax, will range from $33.5 million to $45.2 million. Our loan portfolio is segregated into 10 loan segments (models) that use a 24-month forecast period and a 12-month reversion period. Based upon the estimates described above, our tangible common equity ratio will reduce by 20 – 30 basis points. The estimates of the initial impact from the adoption of CECL were based upon our current analysis, composition, characteristics and quality of our loan portfolio, as well as assumptions, management judgments, and forecasted economic conditions, and are subject to continued review and refinement during the first quarter of 2020.
Balance Sheet and Capital
| (dollars in thousands, except per share and share data) |
Ending Balance |
||||||||||||||||||
|
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
Dec. 31, |
|||||||||||||||
| BALANCE SHEET |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
||||
| Assets | |||||||||||||||||||
| Cash and cash equivalents |
$ |
688,704 |
|
$ |
719,194 |
|
$ |
851,971 |
|
$ |
949,591 |
|
$ |
408,983 |
|
||||
| Investment securities: | |||||||||||||||||||
| Securities available for sale, at fair value |
|
1,956,047 |
|
|
1,813,134 |
|
|
1,717,276 |
|
|
1,466,249 |
|
|
1,517,067 |
|
||||
| Other investments |
|
49,124 |
|
|
49,124 |
|
|
49,124 |
|
|
40,624 |
|
|
25,604 |
|
||||
| Total investment securities |
|
2,005,171 |
|
|
1,862,258 |
|
|
1,766,400 |
|
|
1,506,873 |
|
|
1,542,671 |
|
||||
| Loans held for sale |
|
59,363 |
|
|
87,393 |
|
|
47,796 |
|
|
33,297 |
|
|
22,925 |
|
||||
| Loans: | |||||||||||||||||||
| Acquired credit impaired |
|
356,782 |
|
|
390,714 |
|
|
419,961 |
|
|
452,258 |
|
|
485,119 |
|
||||
| Acquired non-credit impaired |
|
1,760,427 |
|
|
1,965,603 |
|
|
2,180,281 |
|
|
2,378,737 |
|
|
2,594,826 |
|
||||
| Non-acquired |
|
9,252,831 |
|
|
8,928,512 |
|
|
8,621,327 |
|
|
8,310,613 |
|
|
7,933,286 |
|
||||
| Less allowance for non-acquired loan losses |
|
(56,927 |
) |
|
(54,937 |
) |
|
(53,590 |
) |
|
(52,008 |
) |
|
(51,194 |
) |
||||
| Loans, net |
|
11,313,113 |
|
|
11,229,892 |
|
|
11,167,979 |
|
|
11,089,600 |
|
|
10,962,037 |
|
||||
| Other real estate owned (“OREO”) |
|
11,964 |
|
|
13,415 |
|
|
14,506 |
|
|
11,297 |
|
|
11,410 |
|
||||
| Premises and equipment, net |
|
317,321 |
|
|
323,506 |
|
|
321,348 |
|
|
322,553 |
|
|
241,076 |
|
||||
| Bank owned life insurance |
|
234,567 |
|
|
233,206 |
|
|
231,708 |
|
|
230,629 |
|
|
230,105 |
|
||||
| Deferred tax asset |
|
31,316 |
|
|
27,844 |
|
|
28,240 |
|
|
31,884 |
|
|
37,128 |
|
||||
| Mortgage servicing rights |
|
30,525 |
|
|
28,674 |
|
|
30,332 |
|
|
32,415 |
|
|
34,727 |
|
||||
| Core deposit and other intangibles |
|
49,816 |
|
|
53,083 |
|
|
56,351 |
|
|
59,619 |
|
|
62,900 |
|
||||
| Goodwill |
|
1,002,900 |
|
|
1,002,900 |
|
|
1,002,900 |
|
|
1,002,900 |
|
|
1,002,900 |
|
||||
| Other assets |
|
176,332 |
|
|
170,717 |
|
|
163,806 |
|
|
136,229 |
|
|
119,466 |
|
||||
| Total assets |
$ |
15,921,092 |
|
$ |
15,752,082 |
|
$ |
15,683,337 |
|
$ |
15,406,887 |
|
$ |
14,676,328 |
|
||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing |
$ |
3,245,306 |
|
$ |
3,307,532 |
|
$ |
3,255,906 |
|
$ |
3,219,864 |
|
$ |
3,061,769 |
|
||||
| Interest-bearing |
$ |
8,931,790 |
|
|
8,716,255 |
|
|
8,666,374 |
|
|
8,699,107 |
|
|
8,585,164 |
|
||||
| Total deposits |
|
12,177,096 |
|
|
12,023,787 |
|
|
11,922,280 |
|
|
11,918,971 |
|
|
11,646,933 |
|
||||
| Federal funds purchased and securities | |||||||||||||||||||
| sold under agreements to repurchase |
|
298,741 |
|
|
269,072 |
|
|
298,029 |
|
|
276,891 |
|
|
270,649 |
|
||||
| Other borrowings |
|
815,936 |
|
|
815,771 |
|
|
816,414 |
|
|
616,250 |
|
|
266,084 |
|
||||
| Other liabilities |
|
256,306 |
|
|
292,496 |
|
|
272,636 |
|
|
218,298 |
|
|
126,366 |
|
||||
| Total liabilities |
|
13,548,079 |
|
|
13,401,126 |
|
|
13,309,359 |
|
|
13,030,410 |
|
|
12,310,032 |
|
||||
| Shareholders’ equity: | |||||||||||||||||||
| Preferred stock – $.01 par value; authorized 10,000,000 shares |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
| Common stock – $2.50 par value; authorized 80,000,000 shares |
|
84,361 |
|
|
84,757 |
|
|
86,839 |
|
|
88,421 |
|
|
89,574 |
|
||||
| Surplus |
|
1,607,740 |
|
|
1,617,004 |
|
|
1,676,229 |
|
|
1,719,396 |
|
|
1,750,495 |
|
||||
| Retained earnings |
|
679,895 |
|
|
646,325 |
|
|
609,444 |
|
|
582,034 |
|
|
551,108 |
|
||||
| Accumulated other comprehensive income (loss) |
|
1,017 |
|
|
2,870 |
|
|
1,466 |
|
|
(13,374 |
) |
|
(24,881 |
) |
||||
| Total shareholders’ equity |
|
2,373,013 |
|
|
2,350,956 |
|
|
2,373,978 |
|
|
2,376,477 |
|
|
2,366,296 |
|
||||
| Total liabilities and shareholders’ equity |
$ |
15,921,092 |
|
$ |
15,752,082 |
|
$ |
15,683,337 |
|
$ |
15,406,887 |
|
$ |
14,676,328 |
|
||||
| Common shares issued and outstanding |
|
33,744,385 |
|
|
33,902,726 |
|
|
34,735,587 |
|
|
35,368,521 |
|
|
35,829,549 |
|
||||
At December 31, 2019, the Company’s total assets were $15.9 billion, an increase of $1.2 billion from December 31, 2018, and an increase of 8.5%. During the fourth quarter of 2019, changes in the balance sheet include the following:
- Net loan growth totaled $85.2 million, or 3.0% annualized. Non-acquired loans increased by $324.3 million or 14.4% annualized, and acquired loans decreased by $239.1 million, or 40.3% annualized.
- Investment securities portfolio grew by $142.9 million to $2.0 billion, representing 12.6% of total assets.
- Non-interest bearing deposits declined by $62.2 million, or 7.5% annualized.
- Interest bearing deposits grew by $215.5 million, or 9.8% annualized.
- Equity increased by $22.1 million as the Company only repurchased 165,000 common shares totaling $12.4 million, and at an average price of $74.88 per share.
The Company’s book value per common share increased to $70.32 per share at December 31, 2019, compared to $69.34 at September 30, 2019 and $66.04 at December 31, 2018. Total equity (capital) increased by $22.1 million due to net income totaling $49.1 million, offset by the dividend paid of $15.5 million during the fourth quarter of 2019. Tangible book value (“TBV”) per common share increased by $0.93 per share to $39.13 at December 31, 2019, compared to $38.20 at September 30, 2019, and increased by $2.83 per share, or 7.8%, from $36.30 at December 31, 2018.
Performance and Capital Ratios
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||
| PERFORMANCE RATIOS |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
2019 |
|
2018 |
|
||||||
| Return on average assets (annualized) |
|
1.23 |
% |
|
1.31 |
% |
|
1.08 |
% |
|
1.21 |
% |
|
1.33 |
% |
1.21 |
% |
1.23 |
% |
||||||
| Adjusted return on average assets (annualized) (non-GAAP) (3) |
|
1.26 |
% |
|
1.30 |
% |
|
1.28 |
% |
|
1.23 |
% |
|
1.33 |
% |
1.27 |
% |
1.39 |
% |
||||||
| Return on average equity (annualized) |
|
8.26 |
% |
|
8.70 |
% |
|
6.98 |
% |
|
7.61 |
% |
|
8.24 |
% |
7.89 |
% |
7.63 |
% |
||||||
| Adjusted return on average equity (annualized) (non-GAAP) (3) |
|
8.47 |
% |
|
8.64 |
% |
|
8.32 |
% |
|
7.69 |
% |
|
8.24 |
% |
8.28 |
% |
8.62 |
% |
||||||
| Return on average tangible common equity (annualized) (non-GAAP) (7) |
|
15.79 |
% |
|
16.62 |
% |
|
13.38 |
% |
|
14.66 |
% |
|
15.91 |
% |
15.11 |
% |
14.93 |
% |
||||||
| Adjusted return on average tangible common equity (annualized) (non-GAAP) (3) (7) |
|
16.17 |
% |
|
16.51 |
% |
|
15.79 |
% |
|
14.80 |
% |
|
15.91 |
% |
15.82 |
% |
16.76 |
% |
||||||
| Efficiency ratio (tax equivalent) |
|
61.64 |
% |
|
58.40 |
% |
|
66.87 |
% |
|
63.24 |
% |
|
59.43 |
% |
62.52 |
% |
63.57 |
% |
||||||
| Adjusted efficiency ratio (non-GAAP) (9) |
|
60.73 |
% |
|
58.40 |
% |
|
59.78 |
% |
|
62.52 |
% |
|
59.43 |
% |
60.33 |
% |
59.06 |
% |
||||||
| Dividend payout ratio (2) |
|
31.62 |
% |
|
28.48 |
% |
|
33.89 |
% |
|
30.29 |
% |
|
26.63 |
% |
30.94 |
% |
28.27 |
% |
||||||
| Book value per common share |
$ |
70.32 |
|
$ |
69.34 |
|
$ |
68.34 |
|
$ |
67.19 |
|
$ |
66.04 |
|
||||||||||
| Tangible common equity per common share (non-GAAP) (7) |
$ |
39.13 |
|
$ |
38.20 |
|
$ |
37.85 |
|
$ |
37.15 |
|
$ |
36.30 |
|
||||||||||
| CAPITAL RATIOS | |||||||||||||||||||||||||
| Equity-to-assets |
|
14.90 |
% |
|
14.92 |
% |
|
15.14 |
% |
|
15.42 |
% |
|
16.12 |
% |
||||||||||
| Tangible equity-to-tangible assets (non-GAAP) (7) |
|
8.88 |
% |
|
8.81 |
% |
|
8.99 |
% |
|
9.16 |
% |
|
9.56 |
% |
||||||||||
| Tier 1 common equity (6) |
|
11.3 |
% |
|
11.2 |
% |
|
11.6 |
% |
|
11.9 |
% |
|
12.1 |
% |
||||||||||
| Tier 1 leverage (6) |
|
9.7 |
% |
|
9.7 |
% |
|
10.0 |
% |
|
10.5 |
% |
|
10.7 |
% |
||||||||||
| Tier 1 risk-based capital (6) |
|
12.3 |
% |
|
12.2 |
% |
|
12.6 |
% |
|
12.9 |
% |
|
13.1 |
% |
||||||||||
| Total risk-based capital (6) |
|
12.8 |
% |
|
12.7 |
% |
|
13.1 |
% |
|
13.4 |
% |
|
13.6 |
% |
||||||||||
| OTHER DATA | |||||||||||||||||||||||||
| Number of branches |
|
155 |
|
|
157 |
|
|
156 |
|
|
168 |
|
|
168 |
|
||||||||||
| Number of employees (full-time equivalent basis) |
|
2,547 |
|
|
2,544 |
|
|
2,544 |
|
|
2,589 |
|
|
2,602 |
|
||||||||||
Asset Quality
| Ending Balance | |||||||||||||||||||||||||
| Dec. 31, | Sept 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||||||||||
| (Dollars in thousands) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
||||||||||
| NONPERFORMING ASSETS: | |||||||||||||||||||||||||
| Non-acquired | |||||||||||||||||||||||||
| Non-acquired nonperforming loans |
$ |
22,816 |
|
$ |
19,187 |
|
$ |
15,605 |
|
$ |
15,910 |
|
$ |
15,018 |
|
||||||||||
| Non-acquired OREO and other nonperforming assets |
|
3,705 |
|
|
3,724 |
|
|
4,374 |
|
|
4,070 |
|
|
4,037 |
|
||||||||||
| Total non-acquired nonperforming assets |
|
26,521 |
|
|
22,911 |
|
|
19,979 |
|
|
19,980 |
|
|
19,055 |
|
||||||||||
| Acquired | |||||||||||||||||||||||||
| Acquired nonperforming loans |
|
11,114 |
|
|
9,596 |
|
|
9,985 |
|
|
14,558 |
|
|
13,651 |
|
||||||||||
| Acquired OREO and other nonperforming assets |
|
8,579 |
|
|
9,938 |
|
|
10,412 |
|
|
7,782 |
|
|
7,755 |
|
||||||||||
| Total acquired nonperforming assets |
|
19,693 |
|
|
19,534 |
|
|
20,397 |
|
|
22,340 |
|
|
21,406 |
|
||||||||||
| Total nonperforming assets |
$ |
46,214 |
|
$ |
42,445 |
|
$ |
40,376 |
|
$ |
42,320 |
|
$ |
40,461 |
|
||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||
| Dec. 31, | Sept 30, | June 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
2019 |
|
2018 |
|
|||||||
| ASSET QUALITY RATIOS: | |||||||||||||||||||||||||
| Allowance for non-acquired loan losses as a | |||||||||||||||||||||||||
| percentage of non-acquired loans (1) |
|
0.62 |
% |
|
0.62 |
% |
|
0.62 |
% |
|
0.63 |
% |
|
0.65 |
% |
0.62 |
% |
0.65 |
% |
||||||
| Allowance for non-acquired loan losses as a | |||||||||||||||||||||||||
| percentage of non-acquired nonperforming loans |
|
249.50 |
% |
|
286.32 |
% |
|
343.42 |
% |
|
326.89 |
% |
|
340.88 |
% |
249.50 |
% |
340.88 |
% |
||||||
| Net charge-offs on non-acquired loans as a percentage of | |||||||||||||||||||||||||
| average non-acquired loans (annualized) (1) |
|
0.06 |
% |
|
0.05 |
% |
|
0.02 |
% |
|
0.02 |
% |
|
0.06 |
% |
0.04 |
% |
0.04 |
% |
||||||
| Net charge-offs on acquired non-credit impaired loans as a percentage | |||||||||||||||||||||||||
| of average acquired non-credit impaired loans (annualized) (1) |
|
-0.01 |
% |
|
0.15 |
% |
|
0.25 |
% |
|
0.03 |
% |
|
0.09 |
% |
0.11 |
% |
0.06 |
% |
||||||
| Total nonperforming assets as a percentage | |||||||||||||||||||||||||
| of total assets |
|
0.29 |
% |
|
0.27 |
% |
|
0.26 |
% |
|
0.27 |
% |
|
0.28 |
% |
||||||||||
| Excluding Acquired Assets | |||||||||||||||||||||||||
| NPLs as a percentage of period end non-acquired loans (1) |
|
0.25 |
% |
|
0.21 |
% |
|
0.18 |
% |
|
0.19 |
% |
|
0.19 |
% |
||||||||||
| Total nonperforming assets as a percentage of | |||||||||||||||||||||||||
| total non-acquired loans and repossessed assets (1) (4) |
|
0.29 |
% |
|
0.26 |
% |
|
0.23 |
% |
|
0.24 |
% |
|
0.24 |
% |
||||||||||
| Total nonperforming assets as a percentage | |||||||||||||||||||||||||
| of total assets (5) |
|
0.17 |
% |
|
0.15 |
% |
|
0.13 |
% |
|
0.13 |
% |
|
0.13 |
% |
||||||||||
Total nonperforming assets increased by $3.8 million to $46.2 million, representing 0.29% of total assets, an increase of 2 basis points compared to September 30, 2019. Non-performing acquired non-credit impaired loans increased by $1.5 million and totaled $11.1 million. Legacy non-performing loans increased by $3.6 million during the fourth quarter of 2019 to $22.8 million at December 31, 2019. The allowance for loan losses as a percentage of non-acquired nonaccrual loans was 250% at December 31, 2019, down from 286% in the third quarter of 2019, and down from 341% at December 31, 2018.
At December 31, 2019, the allowance for non-acquired loan losses was $56.9 million, or 0.62%, of non-acquired period-end loans and $54.9 million, or 0.62%, at September 30, 2019, and $51.2 million, or 0.65% at December 31, 2018. Net charge-offs within the non-acquired portfolio were $1.5 million, or 0.06% annualized, in the fourth quarter of 2019, compared to $1.1 million, or 0.05% annualized, in the third of 2019. Fourth quarter 2018 net charge-offs totaled $1.1 million, or 0.06% annualized. Net charge-offs (recoveries) related to the non-acquired loan portfolio totaled $348,000 during the fourth quarter of 2019 and ($188,000) for the twelve months ended December 31, 2019. The remaining net charge-offs were from overdraft and ready reserve accounts and totaled $1.1 million, for the fourth quarter of 2019, and, for the twelve months ended December 31, 2019, totaled $3.7 million.
During the fourth quarter of 2019, the provision for loan losses totaled $3.5 million for the non-acquired loan portfolio compared to $2.5 million in the third quarter of 2019, and $2.5 million in the fourth quarter of 2018.
Net charge offs (recoveries) related to “acquired non-credit impaired loans” were ($36,000), or -0.01% annualized, in the fourth quarter of 2019; and the Company recorded a “negative” provision for loan losses, accordingly. Net charge-offs in the third quarter of 2019 totaled $760,000, or 0.15% annualized, and in the fourth quarter of 2018, net charge-offs totaled $574,000, or 0.09% annualized.
During the fourth quarter of 2019, the Company recorded net impairment of $134,000 within the acquired credit impaired loan pools compared to $786,000 in the third quarter of 2019. During the fourth quarter of 2018, the Company recorded net impairment of $710,000.
Total OREO decreased during the fourth quarter with the disposition of property from both the nonacquired and acquired OREO assets. The decline totaled $1.5 million with a balance of $12.0 million at December 31, 2019. The OREO balance at December 31, 2018 was $11.4 million.
Net Interest Income and Margin
| Three Months Ended | ||||||||||||||||||||||||||
| December 31, 2019 | September 30, 2019 | December 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 |
$ |
573,957 |
$ |
2,337 |
1.62 |
% |
$ |
491,627 |
$ |
2,676 |
2.16 |
% |
$ |
172,849 |
$ |
1,032 |
2.37 |
% |
||||||||
| Investment securities (taxable) |
|
1,713,050 |
|
11,016 |
2.55 |
% |
|
1,638,461 |
|
10,785 |
2.61 |
% |
|
1,358,978 |
|
8,838 |
2.58 |
% |
||||||||
| Investment securities (tax-exempt) |
|
176,261 |
|
1,486 |
3.34 |
% |
|
181,434 |
|
1,587 |
3.47 |
% |
|
188,666 |
|
1,457 |
3.06 |
% |
||||||||
| Loans held for sale |
|
73,541 |
|
664 |
3.58 |
% |
|
58,829 |
|
541 |
3.65 |
% |
|
24,820 |
|
291 |
4.65 |
% |
||||||||
| Loans |
|
11,297,402 |
|
131,951 |
4.63 |
% |
|
11,225,593 |
|
134,412 |
4.75 |
% |
|
10,928,294 |
|
132,250 |
4.80 |
% |
||||||||
| Total interest-earning assets |
|
13,834,211 |
|
147,454 |
4.23 |
% |
|
13,595,944 |
|
150,001 |
4.38 |
% |
|
12,673,607 |
|
143,868 |
4.50 |
% |
||||||||
| Noninterest-earning assets |
|
2,024,648 |
|
2,014,172 |
|
1,924,666 |
||||||||||||||||||||
| Total Assets |
$ |
15,858,859 |
$ |
15,610,116 |
$ |
14,598,273 |
||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||||
| Transaction and money market accounts |
$ |
5,768,724 |
$ |
8,010 |
0.55 |
% |
$ |
5,581,057 |
$ |
8,932 |
0.63 |
% |
$ |
5,310,048 |
$ |
8,498 |
0.63 |
% |
||||||||
| Savings deposits |
|
1,313,991 |
|
769 |
0.23 |
% |
|
1,323,377 |
|
1,027 |
0.31 |
% |
|
1,416,227 |
|
1,324 |
0.37 |
% |
||||||||
| Certificates and other time deposits |
|
1,684,633 |
|
6,448 |
1.52 |
% |
|
1,730,567 |
|
6,696 |
1.54 |
% |
|
1,804,939 |
|
5,488 |
1.21 |
% |
||||||||
| Federal funds purchased and repurchase agreements |
|
290,287 |
|
590 |
0.81 |
% |
|
272,900 |
|
612 |
0.89 |
% |
|
273,994 |
|
660 |
0.96 |
% |
||||||||
| Other borrowings |
|
815,847 |
|
5,181 |
2.52 |
% |
|
816,188 |
|
5,361 |
2.61 |
% |
|
122,676 |
|
1,506 |
4.87 |
% |
||||||||
| Total interest-bearing liabilities |
|
9,873,482 |
|
20,998 |
0.84 |
% |
|
9,724,089 |
|
22,628 |
0.92 |
% |
|
8,927,884 |
|
17,476 |
0.78 |
% |
||||||||
| Noninterest-bearing liabilities |
|
3,628,741 |
|
3,534,873 |
|
3,310,416 |
||||||||||||||||||||
| Shareholders’ equity |
|
2,356,636 |
|
2,351,154 |
|
2,359,973 |
||||||||||||||||||||
| Total Non-IBL and shareholders’ equity |
|
5,985,377 |
|
5,886,027 |
|
5,670,389 |
||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ |
15,858,859 |
$ |
15,610,116 |
$ |
14,598,273 |
||||||||||||||||||||
| Net interest income and margin (NON-TAX EQUIV.) |
$ |
126,456 |
3.63 |
% |
$ |
127,373 |
3.72 |
% |
$ |
126,392 |
3.96 |
% |
||||||||||||||
| Net interest margin (TAX EQUIVALENT) |
3.64 |
% |
3.73 |
% |
3.98 |
% |
||||||||||||||||||||
| Overall Cost of Funds (including demand deposits) |
0.63 |
% |
0.69 |
% |
0.57 |
% |
||||||||||||||||||||
Contacts
Media Contact:
Jackie Smith (803) 231-3486
Analyst Contact:
Jim Mabry (843) 529-5593
