ASHEVILLE, N.C., Jan. 27, 2022 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the second quarter of fiscal 2022 and approval of its quarterly dividend.
For the quarter ended December 31, 2021 compared to the corresponding quarter in the previous year:
- net income was $11.1 million, compared to $9.5 million;
- diluted earnings per share ("EPS") was $0.68, compared to $0.57;
- annualized return on assets ("ROA") was 1.24%, compared to 1.03%;
- annualized return on equity ("ROE") was 11.02%, compared to 9.41%;
- provision for credit losses was a net benefit of $2.5 million, compared to a net benefit of $3.0 million;
- noninterest income was $10.2 million compared to $9.3 million;
- 299,397 shares of Company common stock were repurchased during the quarter at an average price of $29.96 per share;
- net commercial loan growth, excluding U.S. Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") loans, was $41.9 million, or 8.6% annualized compared to a decline of $44.6 million, or 9.8% annualized, in the prior year; and
- quarterly cash dividends increased $0.01 per share, or 12.5%, to $0.09 per share, totaling $1.4 million.
For the six months ended December 31, 2021 compared to the previous year:
- net income was $21.6 million, compared to $15.2 million;
- diluted earnings per share ("EPS") was $1.33, compared to $0.92;
- annualized return on assets ("ROA") was 1.21%, compared to 0.83%;
- annualized return on equity ("ROE") was 10.78%, compared to 7.58%;
- provision for credit losses was a net benefit of $4.0 million, compared to a net benefit of $2.1 million;
- noninterest income was $20.5 million compared to $18.0 million;
- 675,832 shares of Company common stock were repurchased during the six months at an average price of $28.71 per share; and
- net commercial loan growth, excluding PPP loans, was $78.9 million, or 8.2% annualized compared to a decline of $11.0 million, or 1.2% annualized in the prior year.
The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.09 per common share payable on March 3, 2022 to shareholders of record as of the close of business on February 17, 2022.
“We continue to be encouraged by the positive trends within our commercial loan portfolio, both in terms of the volume of originations and the performance of the portfolio,” said Dana Stonestreet, Chairman and Chief Executive Officer. “Our commercial portfolio continues to grow at an annual rate in the mid- to high-single digits which we've maintained for several years. While the main driver of this growth has been our equipment finance portfolio, all commercial lines of business have experienced growth over the past year. In addition, the levels of nonperforming and classified credits remain at historically low levels. As a reflection of both the strong credit quality of our loan portfolio and a continued improvement in forecasted economic conditions, we were again able to release reserves this quarter recording a $2.5 million benefit for credit losses. Going forward we will continue to focus on the asset origination capacity of all of our lines of business, while maintaining the credit culture that has supported our growth in recent years.”
Comparison of Results of Operations for the Three Months Ended December 31, 2021 and 2020
Net interest income increased by $1.1 million, or 4.0%, to $27.2 million for the quarter ended December 31, 2021, compared to $26.1 million for the comparative quarter in fiscal 2021. Interest and dividend income decreased by $1.7 million, or 5.5%, primarily driven by lower average balances on interest-earning assets combined with lower loan yields. This decrease was offset by a $2.7 million, or 67.3% decrease in interest expense. Average interest-earning assets decreased $139.2 million, or 4.1%, to $3.3 billion for the quarter ended December 31, 2021. The main drivers of the change were decreases of $103.5 million, or 24.8%, in the average balance of commercial paper and deposits in other banks and $11.9 million, or 8.9%, in debt securities available for sale as the Company continues to use excess liquidity to reduce borrowings, which declined by $417.8 million, or 88.0%, when compared to the prior period. Net interest margin (on a fully taxable-equivalent basis) for the three months ended December 31, 2021 increased to 3.33% from 3.07% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.
Total interest and dividend income decreased $1.7 million, or 5.5%, for the quarter ended December 31, 2021 as compared to the same quarter last year, which was primarily a result of a $1.4 million, or 5.0%, decrease in loan interest income, and a $146,000, or 23.8%, decrease in interest income from commercial paper and deposits in other banks. The lower interest income in each category was mainly driven by the overall decrease in average balances as discussed above, in addition to declines in the average yields on loans of 19 basis points, from 4.02% to 3.83%, and debt securities available for sale of 16 basis points, from 1.50% to 1.34%. Loan interest income for the quarter included the amortization of $286,000 of PPP loan origination fees, a decline of $202,000 when compared to the $488,000 recognized in the prior period. The overall average yield on interest-earning assets decreased 5 basis points to 3.49% for the current quarter compared to 3.54% in the same quarter last year primarily due to the change in mix of interest-earning assets, as excess liquidity was used to repay long-term borrowings and reduce short-term interest-earning assets with lower yields.
Total interest expense decreased $2.7 million, or 67.3%, for the quarter ended December 31, 2021 compared to the same period last year. The decrease was driven by a $1.7 million, or 99.1%, decrease in interest expense on borrowings as discussed above and a $1.0 million, or 44.4%, decrease in interest expense on deposits. The average balance of total deposits increased by $296.8 million, or 10.8%, with noninterest-bearing deposits and interest-bearing deposits increasing $212.8 million and $84.0 million, respectively. The increase in interest-bearing deposits was driven by a $149.5 million, or 17.6% increase in money market accounts, partially offset by a $132.5 million, or 23.0%, decrease in certificates of deposit. As stated above, average borrowings for the quarter ended December 31, 2021 decreased $417.8 million, or 88.0%, along with a 130 basis point decrease in the average cost of borrowings compared to the same period last year. The increase in average deposits (interest and noninterest-bearing) was due to successful deposit gathering campaigns and the effect of government stimulus. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 37 basis points to 0.22% for the current quarter compared to 0.59% in the same quarter last year.
Noninterest income increased $0.9 million, or 8.9%, to $10.2 million for the quarter ended December 31, 2021 from $9.3 million for the same period in the previous year. This change was primarily due to a $369,000, or 27.3%, increase in operating lease income, a $236,000, or 41.5%, increase in loan income and fees, and a $197,000, or 5.3%, increase in gain on sale of loans. The increase in operating lease income was driven by increases in loan originations and higher outstanding lease balances during the period. The increase in loan income and fees was largely a result of transitioning SBA loan servicing processes in-house, which began July 1, 2021. During the quarter ended December 31, 2021, $86.9 million of residential mortgage loans originated for sale were sold with gains of $2.2 million compared to $108.9 million sold and gains of $2.8 million in the corresponding period in the prior year. There were $12.6 million of sales of the guaranteed portion of SBA commercial loans with gains of $1.3 million in the current quarter compared to $9.3 million sold and gains of $778,000 million for the same period last year. The Company sold $24.8 million of home equity lines of credit (HELOC) during the quarter for a gain of $159,000 compared to $23.2 million sold and gains of $158,000 in the corresponding period last year. Lastly, $11.5 million of indirect auto finance loans were sold in the current quarter out of the held for investment portfolio for a gain of $205,000. No such sales occurred in the same period in the prior year.
Noninterest expense decreased $534,000, or 2.0%, for the quarter ended December 31, 2021 as compared to the same period last year, which was primarily a result of a decrease of $828,000, or 5.3%, in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period partially offset by an increase of $505,000, or 154.4%, in marketing and advertising expense driven by reduced media advertising in the prior period as a result of the pandemic.
For the quarter ended December 31, 2021, the Company's income tax expense increased $269,000, or 10.4%, to $2.9 million from $2.6 million as a result of higher taxable income. The effective tax rates for the quarters ended December 31, 2021 and 2020 were 20.5% and 21.5%, respectively.
Comparison of Results of Operations for the Six Months Ended December 31, 2021 and 2020
Net interest income increased by $3.2 million, or 6.3%, to $54.9 million for the six months ended December 31, 2021, compared to the same period last year. Interest and dividend income decreased by $2.8 million, or 4.6%, primarily driven by lower average balances on interest-earning assets combined with lower loan yields. This decrease was offset by a $6.1 million, or 67.5%, decrease in interest expense. Average interest-earning assets decreased $163.4 million, or 4.8%, to $3.3 billion for the six months ended December 31, 2021. The biggest reason for the change was a decrease of $125.0 million, or 29.7%, in commercial paper and deposits in other banks, as the Company used excess liquidity to reduce borrowings, where the average balance declined from $475.0 million to $56.4 million. Net interest margin (on a fully taxable-equivalent basis) for the six months ended December 31, 2021 increased to 3.37% from 3.02% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.
Total interest and dividend income decreased $2.8 million, or 4.6%, for the six months ended December 31, 2021 as compared to the same period last year, which was primarily a result of a $2.1 million, or 3.7%, decrease in loan interest income and a $696,000, or 46.6%, decrease in interest income from commercial paper and deposits in other banks. The lower interest income in each category was mainly driven by the decrease in average balances as discussed above. In addition, average loan yields decreased 10 basis points to 3.90% for the quarter ended December 31, 2021 from 4.00% in the corresponding quarter last year, average yields on debt securities available for sale decreased 28 basis points to 1.43% from 1.71%, and average yields on commercial paper and deposits in other banks decreased 16 basis points to 0.54% from 0.70%. Loan interest income for the six months included the amortization of $710,000 of PPP loan origination fees, a decline of $32,000 when compared to the $742,000 recognized in the prior period. The overall average yield on interest-earning assets increased one basis point to 3.55% for the six months compared to 3.54% in the same period last year primarily due to the use of excess liquidity to repay long-term borrowings.
Total interest expense decreased $6.1 million, or 67.5%, for the six months ended December 31, 2021 compared to the same period last year. The decrease was driven by a $3.3 million, or 98.8%, decrease in interest expense on borrowings as discussed above and a $2.7 million, or 48.6%, decrease in interest expense on deposits. The average balance of total deposits increased by $272.2 million, or 9.9%, with noninterest-bearing deposits and interest-bearing deposits increasing $215.4 million and $56.8 million, respectively. The increase in interest-bearing deposits was driven by a $62.9 million, or 11.0%, increase in interest-bearing checking accounts and $156.5 million, or 18.7%, increase in money market accounts, partially offset by a $182.2 million, or 28.8%, decrease in certificates of deposit. As stated above average borrowings for the six months ended December 31, 2021 decreased $418.6 million, or 88.1%, along with a 126 basis point decrease in the average cost of borrowings compared to the same period last year. The increase in average deposits (interest and noninterest-bearing) was due to successful deposit gathering campaigns and the effect of government stimulus. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 40 basis points to 0.25% for the six months compared to 0.65% in the same period last year.
Noninterest income increased $2.5 million, or 14.2%, to $20.5 million for the six months ended December 31, 2021 from $18.0 million for the same period in the previous year. This change was due to a $910,000, or 12.9%, increase in the gain on sale of loans, a $741,000, or 71.0%, increase in loan income and fees, a $583,000, or 21.8%, increase in operating lease income, and a $372,000, or 8.2%, increase in service charges and fees on deposit accounts. During the six months ended December 31, 2021, $150.7 million of residential mortgage loans originated for sale were sold with gains of $4.3 million compared to $190.7 million sold and gains of $5.0 million in the corresponding period in the prior year. There were $27.0 million of sales of the guaranteed portion of SBA commercial loans with gains of $3.1 million in the six months compared to $24.5 million sold and gains of $1.8 million for the same period last year. The Company sold $72.2 million of HELOCs during the six months ended December 31, 2021 for a gain of $426,000 compared to $42.1 million sold and gains of $258,000 in the corresponding period last year. Lastly, $11.5 million of indirect auto finance loans were sold out of the held for investment portfolio during the current period for a gain of $205,000. No such sales occurred in the same period in the prior year. The $741,000, or 71.0%, increase in loan income and fees was primarily a result of $536,000 in additional loan servicing fees as a result of bringing the Company's SBA loan servicing process in-house, which began July 1, 2021, and $279,000 in additional prepayment fee income from our equipment finance line of business. The increase in operating lease income was primarily driven by increases in loan originations and higher outstanding lease balances during the period. Lastly, the increase in service charges on deposit accounts was the result of a $290,000 increase in interchange income driven by higher debit card usage.
Noninterest expense decreased $518,000, or 1.0%, for the six months ended December 31, 2021 as compared to the same period last year, which was primarily a result of a decrease of $755,000, or 2.4%, in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period and a reduction of core deposit amortization expense of $282,000, or 64.1%, partially offset by an increase of $885,000, or 135.7%, in marketing and advertising expense driven by reduced media advertising in the prior period as a result of the pandemic.
For the six months ended December 31, 2021, the Company's income tax expense increased $1.8 million, or 44.6%, to $5.8 million from $4.0 million as a result of higher taxable income. The effective tax rates for the six months ended December 31, 2021 and 2020 were 21.3% and 21.0%, respectively.
Balance Sheet Review
Total assets and liabilities decreased by $21.9 million and $27.1 million to $3.5 billion and $3.1 billion, respectively, at December 31, 2021 as compared to June 30, 2021. The decrease in assets was primarily driven by a combined decrease of $56.9 million, or 23.0%, in cash and cash equivalents, certificates of deposit in other banks, and debt securities available for sale, and a $37.2 million, or 1.4%, decrease in loans receivable as the Company redirected its excess liquidity to continue paying down borrowings during the period. These decreases were partially offset by a $64.6 million, or 34.1%, increase in commercial paper and a $8.5 million, or 9.1%, increase in loans held for sale.
Total loans decreased $37.2 million, or 1.4%, to $2.7 billion at December 31, 2021 from the balance at June 30, 2021. The decrease was driven by PPP forgiveness of $27.6 million and an $88.5 million, or 11.6%, decrease in retail consumer loans primarily resulting from a reduction in one-to-four family loans and indirect auto finance loans, partially as a result of the sale of $11.5 million of these loans in November 2021. This decrease was partially offset by a $78.9 million, or 4.1%, increase in commercial loans (excluding PPP loans) as the Company continues its focus on the growth of this loan segment.
Stockholders' equity increased $5.2 million, or 1.3%, to $401.7 million at December 31, 2021 as compared to June 30, 2021. Activity within stockholders' equity included $21.6 million in net income, $4.8 million in stock-based compensation expense, stock repurchases of $19.4 million, and $2.7 million in cash dividends declared. As of December 31, 2021, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements.
Asset Quality
The allowance for credit losses on loans was $30.9 million, or 1.15%, of total loans at December 31, 2021 compared to $35.5 million, or 1.30%, of total loans at June 30, 2021. The overall decrease was driven by lower expected credit losses estimated by management based on an improving economic outlook.
The provision for credit losses was a net benefit of $4.0 million for the six months ended December 31, 2021, compared to a net benefit of $2.1 million for the corresponding period in fiscal year 2021. Net loan charge-offs totaled $760,000 for the six months ended December 31, 2021, compared to $637,000 for the same period last year. Net charge-offs as a percentage of average loans were 0.05% for the six months ended December 31, 2021 compared to 0.04% for the corresponding period last year.
Nonperforming assets decreased by $6.6 million, or 51.4%, to $6.2 million, or 0.18%, of total assets at December 31, 2021 compared to $12.8 million, or 0.36% of total assets at June 30, 2021. The significant decrease from June 30, 2021 was primarily a result of the payoff of two commercial real estate loan relationships totaling $5.1 million in the prior quarter. Nonperforming assets included $6.2 million in nonaccruing loans and $45,000 in REO at December 31, 2021, compared to $12.6 million and $188,000 in nonaccruing loans and REO, respectively, at June 30, 2021. Nonperforming loans to total loans was 0.23% at December 31, 2021 and 0.46% at June 30, 2021.
As of December 31, 2021, the Company had $652,000 in loans with full principal and interest payment deferrals related to COVID-19 compared to $107,000 at June 30, 2021. Substantially all loans placed on full payment deferral during the pandemic have come out of deferral and borrowers are either making regular loan payments or interest-only payments. As of December 31, 2021, the Company had $15.6 million in commercial loan deferrals on interest-only payments compared to $78.9 million at June 30, 2021.
The ratio of classified assets to total assets decreased to 0.65% at December 31, 2021 from 0.76% at June 30, 2021. Classified assets decreased $3.8 million, or 14.2%, to $22.9 million at December 31, 2021 compared to $26.7 million at June 30, 2021 primarily due to the payoff of two commercial real estate loan relationships discussed above. The Company's overall asset quality metrics continue to demonstrate its commitment to growing and maintaining a loan portfolio with a moderate risk profile; however, the Company will remain diligent in its monitoring of the portfolio during these uncertain times.
About HomeTrust Bancshares, Inc.
HomeTrust Bancshares, Inc. is the holding company for the Bank. As of December 31, 2021, the Company had assets of $3.5 billion. The Bank, founded in 1926, is a North Carolina state chartered, community-focused financial institution committed to providing value added relationship banking with over 30 locations as well as online/mobile channels. Locations include: North Carolina (including the Asheville metropolitan area, the "Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of the Company's control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements include: the effect of the COVID-19 pandemic, including on the Company's credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in HomeTrust's latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed with or furnished to the Securities and Exchange Commission - which are available on their website at www.htb.com and on the SEC's website at www.sec.gov. These risks could cause the Company's actual results for fiscal 2022 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, the Company and could negatively affect its operating and stock performance. Any of the forward-looking statements that the Company makes in this press release or the documents they file with or furnish to the SEC are based upon management's beliefs and assumptions at the time they are made and may turn out to be wrong because of inaccurate assumptions they might make, because of the factors described above or because of other factors that they cannot foresee. The Company does not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
WEBSITE: WWW.HTB.COM
Consolidated Balance Sheets (Unaudited)
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | June 30, 2021(1) | March 31, 2021 | December 31, 2020 | ||||||||||||||
| Assets | |||||||||||||||||||
| Cash | $ | 20,586 | $ | 22,431 | $ | 22,312 | $ | 24,621 | $ | 27,365 | |||||||||
| Interest-bearing deposits | 14,240 | 20,142 | 28,678 | 139,474 | 198,979 | ||||||||||||||
| Cash and cash equivalents | 34,826 | 42,573 | 50,990 | 164,095 | 226,344 | ||||||||||||||
| Commercial paper | 254,157 | 196,652 | 189,596 | 238,445 | 183,778 | ||||||||||||||
| Certificates of deposit in other banks | 34,002 | 35,495 | 40,122 | 42,015 | 48,637 | ||||||||||||||
| Debt securities available for sale, at fair value | 121,851 | 124,576 | 156,459 | 162,417 | 153,540 | ||||||||||||||
| Other investments, at cost | 22,117 | 20,891 | 23,710 | 28,899 | 39,572 | ||||||||||||||
| Loans held for sale | 102,070 | 105,161 | 93,539 | 86,708 | 118,439 | ||||||||||||||
| Total loans, net of deferred loan fees and costs | 2,696,072 | 2,719,642 | 2,733,267 | 2,690,153 | 2,678,624 | ||||||||||||||
| Allowance for credit losses - loans | (30,933 | ) | (34,406 | ) | (35,468 | ) | (36,059 | ) | (39,844 | ) | |||||||||
| Loans, net | 2,665,139 | 2,685,236 | 2,697,799 | 2,654,094 | 2,638,780 | ||||||||||||||
| Premises and equipment, net | 69,461 | 68,568 | 70,909 | 70,886 | 70,104 | ||||||||||||||
| Accrued interest receivable | 8,200 | 8,429 | 7,933 | 8,271 | 9,796 | ||||||||||||||
| Real estate owned ("REO") | 45 | 45 | 188 | 143 | 252 | ||||||||||||||
| Deferred income taxes, net | 12,019 | 15,722 | 16,901 | 16,889 | 18,626 | ||||||||||||||
| Bank owned life insurance ("BOLI") | 94,209 | 93,679 | 93,108 | 93,877 | 93,326 | ||||||||||||||
| Goodwill | 25,638 | 25,638 | 25,638 | 25,638 | 25,638 | ||||||||||||||
| Core deposit intangibles, net | 185 | 250 | 343 | 473 | 638 | ||||||||||||||
| Other assets | 58,900 | 58,445 | 57,488 | 55,763 | 52,501 | ||||||||||||||
| Total assets | $ | 3,502,819 | $ | 3,481,360 | $ | 3,524,723 | $ | 3,648,613 | $ | 3,679,971 | |||||||||
| Liabilities and stockholders' equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits | $ | 2,998,691 | $ | 2,987,284 | $ | 2,955,541 | $ | 2,908,478 | $ | 2,743,269 | |||||||||
| Borrowings | 48,000 | 40,000 | 115,000 | 275,000 | 475,000 | ||||||||||||||
| Other liabilities | 54,382 | 57,565 | 57,663 | 58,683 | 56,978 | ||||||||||||||
| Total liabilities | 3,101,073 | 3,084,849 | 3,128,204 | 3,242,161 | 3,275,247 | ||||||||||||||
| Stockholders' equity | |||||||||||||||||||
| Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding | — | — | — | — | — | ||||||||||||||
| Common stock, $0.01 par value, 60,000,000 shares authorized (2) | 163 | 163 | 167 | 167 | 168 | ||||||||||||||
| Additional paid in capital | 147,552 | 151,425 | 160,582 | 162,010 | 166,352 | ||||||||||||||
| Retained earnings | 258,986 | 249,331 | 240,075 | 248,767 | 242,182 | ||||||||||||||
| Unearned Employee Stock Ownership Plan ("ESOP") shares | (5,555 | ) | (5,687 | ) | (5,819 | ) | (5,951 | ) | (6,083 | ) | |||||||||
| Accumulated other comprehensive income | 600 | 1,279 | 1,514 | 1,459 | 2,105 | ||||||||||||||
| Total stockholders' equity | 401,746 | 396,511 | 396,519 | 406,452 | 404,724 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,502,819 | $ | 3,481,360 | $ | 3,524,723 | $ | 3,648,613 | $ | 3,679,971 | |||||||||
| (1) | Derived from audited financial statements. | ||||||||
| (2) | Shares of common stock issued and outstanding were 16,303,461 at December 31, 2021; 16,307,658 at September 30, 2021; 16,636,483 at June 30, 2021; 16,655,347 at March 31, 2021; and 16,791,027 at December 31, 2020. | ||||||||
Consolidated Statements of Income (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||||||||||
| Interest and dividend income | |||||||||||||||||||
| Loans | $ | 26,929 | $ | 27,895 | $ | 28,343 | $ | 54,824 | $ | 56,935 | |||||||||
| Commercial paper and interest-bearing deposits | 468 | 331 | 614 | $ | 799 | 1,495 | |||||||||||||
| Debt securities available for sale | 411 | 524 | 504 | 935 | 1,032 | ||||||||||||||
| Other investments | 680 | 555 | 696 | 1,235 | 1,144 | ||||||||||||||
| Total interest and dividend income | 28,488 | 29,305 | 30,157 | 57,793 | 60,606 | ||||||||||||||
| Interest expense | |||||||||||||||||||
| Deposits | 1,305 | 1,572 | 2,347 | 2,877 | 5,600 | ||||||||||||||
| Borrowings | 15 | 26 | 1,688 | 41 | 3,375 | ||||||||||||||
| Total interest expense | 1,320 | 1,598 | 4,035 | 2,918 | 8,975 | ||||||||||||||
| Net interest income | 27,168 | 27,707 | 26,122 | 54,875 | 51,631 | ||||||||||||||
| Provision (benefit) for credit losses | (2,500 | ) | (1,460 | ) | (3,030 | ) | (3,960 | ) | (2,080 | ) | |||||||||
| Net interest income after provision (benefit) for credit losses | 29,668 | 29,167 | 29,152 | 58,835 | 53,711 | ||||||||||||||
| Noninterest income | |||||||||||||||||||
| Service charges and fees on deposit accounts | 2,513 | 2,372 | 2,416 | 4,885 | 4,513 | ||||||||||||||
| Loan income and fees | 805 | 979 | 569 | 1,784 | 1,043 | ||||||||||||||
| Gain on sale of loans held for sale | 3,901 | 4,057 | 3,704 | 7,958 | 7,048 | ||||||||||||||
| BOLI income | 490 | 518 | 511 | 1,008 | 1,043 | ||||||||||||||
| Operating lease income | 1,718 | 1,540 | 1,349 | 3,258 | 2,675 | ||||||||||||||
| Other | 753 | 886 | 795 | 1,639 | 1,661 | ||||||||||||||
| Total noninterest income | 10,180 | 10,352 | 9,344 | 20,532 | 17,983 | ||||||||||||||
| Noninterest expense | |||||||||||||||||||
| Salaries and employee benefits | 14,872 | 15,280 | 15,700 | 30,152 | 30,907 | ||||||||||||||
| Occupancy expense, net | 2,401 | 2,317 | 2,261 | 4,718 | 4,554 | ||||||||||||||
| Computer services | 2,369 | 2,324 | 2,220 | 4,693 | 4,527 | ||||||||||||||
| Telephone, postage, and supplies | 735 | 712 | 871 | 1,447 | 1,533 | ||||||||||||||
| Marketing and advertising | 832 | 705 | 327 | 1,537 | 652 | ||||||||||||||
| Deposit insurance premiums | 302 | 566 | 487 | 868 | 998 | ||||||||||||||
| Gain on sale of REO | — | (3 | ) | — | (3 | ) | (35 | ) | |||||||||||
| REO related expense | 116 | 145 | 165 | 261 | 413 | ||||||||||||||
| Core deposit intangible amortization | 65 | 93 | 202 | 158 | 440 | ||||||||||||||
| Other | 4,217 | 3,877 | 4,210 | 8,094 | 8,454 | ||||||||||||||
| Total noninterest expense | 25,909 | 26,016 | 26,443 | 51,925 | 52,443 | ||||||||||||||
| Net income before income taxes | 13,939 | 13,503 | 12,053 | 27,442 | 19,251 | ||||||||||||||
| Income tax expense | 2,861 | 2,976 | 2,592 | 5,837 | 4,037 | ||||||||||||||
| Net income | $ | 11,078 | $ | 10,527 | $ | 9,461 | $ | 21,605 | $ | 15,214 | |||||||||
Per Share Data
| Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, 2021 | September 30, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||||
| Net income per common share:(1) | |||||||||||||||
| Basic | $ | 0.70 | $ | 0.66 | $ | 0.58 | $ | 1.36 | $ | 0.93 | |||||
| Diluted | $ | 0.68 | $ | 0.65 | $ | 0.57 | $ | 1.33 | $ | 0.92 | |||||
| Average shares outstanding: | |||||||||||||||
| Basic | 15,632,283 | 15,761,247 | 16,202,844 | 15,696,765 | 16,216,917 | ||||||||||
| Diluted | 15,989,606 | 16,146,611 | 16,563,359 | 16,057,607 | 16,514,831 | ||||||||||
| Book value per share at end of period | $ | 24.64 | $ | 24.31 | $ | 24.10 | $ | 24.64 | $ | 24.10 | |||||
| Tangible book value per share at end of period (2) | $ | 23.06 | $ | 22.73 | $ | 22.55 | $ | 23.06 | $ | 22.55 | |||||
| Cash dividends declared per common share | $ | 0.09 | $ | 0.08 | $ | 0.08 | $ | 0.17 | $ | 0.15 | |||||
| Total shares outstanding at end of period | 16,303,461 | 16,307,658 | 16,791,027 | 16,303,461 | 16,791,027 | ||||||||||
| (1) | Basic and diluted net income per common share have been prepared in accordance with the two-class method. | ||||||||
| (2) | See Non-GAAP reconciliation tables below for adjustments. | ||||||||
Selected Financial Ratios and Other Data
| Three Months Ended | Six Months Ended | ||||||||||||||
| December 31, 2021 | September 30, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||||
| Performance ratios: (1) | |||||||||||||||
| Return on assets (ratio of net income to average total assets) | 1.24 | % | 1.20 | % | 1.03 | % | 1.21 | % | 0.83 | % | |||||
| Return on equity (ratio of net income to average equity) | 11.02 | 10.62 | 9.41 | 10.78 | 7.58 | ||||||||||
| Tax equivalent yield on earning assets(2) | 3.49 | 3.61 | 3.54 | 3.55 | 3.54 | ||||||||||
| Rate paid on interest-bearing liabilities | 0.22 | 0.27 | 0.59 | 0.25 | 0.65 | ||||||||||
| Tax equivalent average interest rate spread (2) | 3.27 | 3.34 | 2.95 | 3.30 | 2.89 | ||||||||||
| Tax equivalent net interest margin(2) (3) | 3.33 | 3.41 | 3.07 | 3.37 | 3.02 | ||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 139.06 | 137.94 | 126.99 | 138.50 | 126.09 | ||||||||||
| Operating expense to average total assets | 2.91 | 2.96 | 2.88 | 2.92 | 2.85 | ||||||||||
| Efficiency ratio | 69.37 | 68.36 | 74.56 | 68.86 | 75.33 | ||||||||||
| Efficiency ratio - adjusted (4) | 68.81 | 67.80 | 73.92 | 68.30 | 74.67 | ||||||||||
| (1) | Ratios are annualized where appropriate. | ||||||||
| (2) | The weighted average rate for municipal leases is adjusted for a 24% combined federal and state tax rate since the interest from these leases is tax exempt. | ||||||||
| (3) | Net interest income divided by average interest-earning assets. | ||||||||
| (4) | See Non-GAAP reconciliation tables below for adjustments. | ||||||||
| Three Months Ended | ||||||||||||||
| December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||
| Asset quality ratios: | ||||||||||||||
| Nonperforming assets to total assets(1) | 0.18 | % | 0.19 | % | 0.36 | % | 0.37 | % | 0.40 | % | ||||
| Nonperforming loans to total loans(1) | 0.23 | 0.25 | 0.46 | 0.49 | 0.54 | |||||||||
| Total classified assets to total assets | 0.65 | 0.65 | 0.76 | 0.76 | 0.74 | |||||||||
| Allowance for credit losses to nonperforming loans(1) | 500.70 | 510.63 | 281.38 | 272.64 | 274.05 | |||||||||
| Allowance for credit losses to total loans | 1.15 | 1.27 | 1.30 | 1.34 | 1.49 | |||||||||
| Allowance for credit losses to total gross loans excluding PPP loans(2) | 1.16 | 1.28 | 1.32 | 1.38 | 1.52 | |||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.15 | (0.04 | ) | (0.04 | ) | (0.03 | ) | (0.01 | ) | |||||
| Capital ratios: | ||||||||||||||
| Equity to total assets at end of period | 11.47 | % | 11.39 | % | 11.25 | % | 11.14 | % | 11.00 | % | ||||
| Tangible equity to total tangible assets(2) | 10.81 | 10.73 | 10.59 | 10.50 | 10.36 | |||||||||
| Average equity to average assets | 11.28 | 11.27 | 11.06 | 10.79 | 10.95 | |||||||||
| (1) | Nonperforming assets include nonaccruing loans, consisting of certain restructured loans, and REO. There were no accruing loans more than 90 days past due at the dates indicated. At December 31, 2021, there were $919,000 of restructured loans included in nonaccruing loans and $2.4 million, or 39.4% of nonaccruing loans were current on their loan payments. | ||||||||
| (2) | See Non-GAAP reconciliation tables below for adjustments. | ||||||||
Average Balance Sheet Data
| Three Months Ended | |||||||||||||||||||
| (Dollars in thousands) | December 31, 2021 | December 31, 2020 | |||||||||||||||||
| Average Balance Outstanding | Interest Earned/ Paid(2) | Yield/ Rate(2) | Average Balance Outstanding | Interest Earned/ Paid(2) | Yield/ Rate(2) | ||||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Loans receivable(1) | $ | 2,819,262 | $ | 27,236 | 3.83 | % | $ | 2,826,133 | $ | 28,648 | 4.02 | % | |||||||
| Commercial paper and deposits in other banks | 313,882 | 468 | 0.59 | % | 417,401 | 614 | 0.58 | % | |||||||||||
| Debt securities available for sale | 121,987 | 411 | 1.34 | % | 133,856 | 504 | 1.50 | % | |||||||||||
| Other interest-earning assets(3) | 22,327 | 680 | 12.09 | % | 39,290 | 696 | 7.03 | % | |||||||||||
| Total interest-earning assets | 3,277,458 | 28,795 | 3.49 | % | 3,416,680 | 30,462 | 3.54 | % | |||||||||||
| Other assets | 259,591 | 257,572 | |||||||||||||||||
| Total assets | $ | 3,537,049 | $ | 3,674,252 | |||||||||||||||
| Liabilities and equity: | |||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||
| Interest-bearing checking accounts | 635,268 | 331 | 0.21 | % | 584,530 | 353 | 0.24 | % | |||||||||||
| Money market accounts | 998,297 | 349 | 0.14 | % | 848,760 | 414 | 0.19 | % | |||||||||||
| Savings accounts | 222,464 | 40 | 0.07 | % | 206,205 | 38 | 0.07 | % | |||||||||||
| Certificate accounts | 443,546 | 585 | 0.52 | % | 576,078 | 1,542 | 1.06 | % | |||||||||||
| Total interest-bearing deposits | 2,299,575 | 1,305 | 0.23 | % | 2,215,573 | 2,347 | 0.42 | % | |||||||||||
| Borrowings | 57,248 | 15 | 0.11 | % | 475,000 | 1,688 | 1.41 | % | |||||||||||
| Total interest-bearing liabilities | 2,356,823 | 1,320 | 0.22 | % | 2,690,573 | 4,035 | 0.59 | % | |||||||||||
| Noninterest-bearing deposits | 736,271 | 523,488 | |||||||||||||||||
| Other liabilities | 44,974 | 57,813 | |||||||||||||||||
| Total liabilities | 3,138,068 | 3,271,874 | |||||||||||||||||
| Stockholders' equity | 398,981 | 402,378 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,537,049 | $ | 3,674,252 | |||||||||||||||
| Net earning assets | $ | 920,635 | $ | 726,107 | |||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 139.06 | % | 126.99 | % | |||||||||||||||
| Tax-equivalent: | |||||||||||||||||||
| Net interest income | $ | 27,475 | $ | 26,427 | |||||||||||||||
| Interest rate spread | 3.27 | % | 2.95 | % | |||||||||||||||
| Net interest margin(4) | 3.33 | % | 3.07 | % | |||||||||||||||
| Non-tax-equivalent: | |||||||||||||||||||
| Net interest income | $ | 27,168 | $ | 26,122 | |||||||||||||||
| Interest rate spread | 3.23 | % | 2.91 | % | |||||||||||||||
| Net interest margin(4) | 3.29 | % | 3.03 | % | |||||||||||||||
| (1) | The average loans receivable balances include loans held for sale and nonaccruing loans. | ||||||||
| (2) | Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $307 and $305 for the three months ended December 31, 2021 and 2020, respectively, calculated based on a combined federal and state tax rate of 24%. | ||||||||
| (3) | The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments. | ||||||||
| (4) | Net interest income divided by average interest-earning assets. | ||||||||
| Six Months Ended | |||||||||||||||||||
| (Dollars in thousands) | December 31, 2021 | December 31, 2020 | |||||||||||||||||
| Average Balance Outstanding | Interest Earned/ Paid(2) | Yield/ Rate(2) | Average Balance Outstanding | Interest Earned/ Paid(2) | Yield/ Rate(2) | ||||||||||||||
| Assets: | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Loans receivable(1) | $ | 2,819,482 | $ | 55,441 | 3.90 | % | $ | 2,850,783 | $ | 57,550 | 4.00 | % | |||||||
| Commercial paper and deposits in other banks | 295,746 | 799 | 0.54 | % | 420,785 | 1,495 | 0.70 | % | |||||||||||
| Debt securities available for sale | 130,143 | 935 | 1.43 | % | 120,062 | 1,032 | 1.71 | % | |||||||||||
| Other interest-earning assets(3) | 22,020 | 1,235 | 11.13 | % | 39,118 | 1,144 | 5.80 | % | |||||||||||
| Total interest-earning assets | 3,267,391 | 58,410 | 3.55 | % | 3,430,748 | 61,221 | 3.54 | % | |||||||||||
| Other assets | 260,288 | 254,610 | |||||||||||||||||
| Total assets | $ | 3,527,679 | $ | 3,685,358 | |||||||||||||||
| Liabilities and equity: | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Interest-bearing checking accounts | 635,362 | 728 | 0.23 | % | 572,505 | 750 | 0.26 | % | |||||||||||
| Money market accounts | 993,643 | 716 | 0.14 | % | 837,153 | 964 | 0.23 | % | |||||||||||
| Savings accounts | 223,061 | 81 | 0.07 | % | 203,374 | 75 | 0.07 | % | |||||||||||
| Certificate accounts | 450,706 | 1,352 | 0.60 | % | 632,894 | 3,811 | 1.19 | % | |||||||||||
| Total interest-bearing deposits | 2,302,772 | 2,877 | 0.25 | % | 2,245,926 | 5,600 | 0.49 | % | |||||||||||
| Borrowings | 56,356 | 41 | 0.15 | % | 475,000 | 3,375 | 1.41 | % | |||||||||||
| Total interest-bearing liabilities | 2,359,128 | 2,918 | 0.25 | % | 2,720,926 | 8,975 | 0.65 | % | |||||||||||
| Noninterest-bearing deposits | 722,432 | 507,087 | |||||||||||||||||
| Other liabilities | 48,393 | 55,699 | |||||||||||||||||
| Total liabilities | 3,129,953 | 3,283,712 | |||||||||||||||||
| Stockholders' equity | 397,726 | 401,646 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,527,679 | $ | 3,685,358 | |||||||||||||||
| Net earning assets | $ | 908,263 | $ | 709,822 | |||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 138.50 | % | 126.09 | % | |||||||||||||||
| Tax-equivalent: | |||||||||||||||||||
| Net interest income | $ | 55,492 | $ | 52,246 | |||||||||||||||
| Interest rate spread | 3.30 | % | 2.89 | % | |||||||||||||||
| Net interest margin(4) | 3.37 | % | 3.02 | % | |||||||||||||||
| Non-tax-equivalent: | |||||||||||||||||||
| Net interest income | $ | 54,875 | $ | 51,631 | |||||||||||||||
| Interest rate spread | 3.26 | % | 2.85 | % | |||||||||||||||
| Net interest margin(4) | 3.33 | % | 2.99 | % | |||||||||||||||
| (1) | The average loans receivable balances include loans held for sale and nonaccruing loans. | ||||||||
| (2) | Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $617 and $615 for the six months ended December 31, 2021 and 2020, respectively, calculated based on a combined federal and state tax rate of 24%. | ||||||||
| (3) | The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments. | ||||||||
| (4) | Net interest income divided by average interest-earning assets. | ||||||||
Loans
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||
| Commercial loans: | |||||||||||||||||||
| Commercial real estate | $ | 1,113,330 | $ | 1,132,764 | $ | 1,142,276 | $ | 1,088,178 | $ | 1,056,971 | |||||||||
| Construction and development | 226,439 | 187,900 | 179,427 | 162,820 | 172,892 | ||||||||||||||
| Commercial and industrial | 162,396 | 153,612 | 141,341 | 140,579 | 138,761 | ||||||||||||||
| Equipment finance | 367,008 | 341,995 | 317,920 | 291,950 | 272,761 | ||||||||||||||
| Municipal leases | 131,078 | 142,100 | 140,421 | 129,141 | 128,549 | ||||||||||||||
| PPP loans | 19,044 | 28,762 | 46,650 | 73,090 | 64,845 | ||||||||||||||
| Total commercial loans | 2,019,295 | 1,987,133 | 1,968,035 | 1,885,758 | 1,834,779 | ||||||||||||||
| Retail consumer loans | |||||||||||||||||||
| One-to-four family | 356,850 | 384,901 | 406,549 | 430,001 | 452,421 | ||||||||||||||
| HELOCs - originated | 128,189 | 129,791 | 130,225 | 131,867 | 125,397 | ||||||||||||||
| HELOCs - purchased | 30,795 | 33,943 | 38,976 | 46,086 | 58,640 | ||||||||||||||
| Construction and land/lots | 69,253 | 69,835 | 66,027 | 68,118 | 75,108 | ||||||||||||||
| Indirect auto finance | 84,581 | 106,184 | 115,093 | 119,656 | 122,947 | ||||||||||||||
| Consumer | 7,109 | 7,855 | 8,362 | 8,667 | 9,332 | ||||||||||||||
| Total retail consumer loans | 676,777 | 732,509 | 765,232 | 804,395 | 843,845 | ||||||||||||||
| Total loans, net of deferred loan fees and costs | 2,696,072 | 2,719,642 | 2,733,267 | 2,690,153 | 2,678,624 | ||||||||||||||
| Allowance for credit losses - loans | (30,933 | ) | (34,406 | ) | (35,468 | ) | (36,059 | ) | (39,844 | ) | |||||||||
| Loans, net | $ | 2,665,139 | $ | 2,685,236 | $ | 2,697,799 | $ | 2,654,094 | $ | 2,638,780 | |||||||||
Deposits
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | |||||||||
| Core deposits: | ||||||||||||||
| Noninterest-bearing accounts | $ | 677,159 | $ | 711,764 | $ | 636,414 | $ | 528,711 | $ | 469,998 | ||||
| NOW accounts | 644,343 | 621,675 | 644,958 | 727,240 | 654,960 | |||||||||
| Money market accounts | 1,010,901 | 987,650 | 975,001 | 927,519 | 882,366 | |||||||||
| Savings accounts | 224,474 | 220,614 | 226,391 | 221,537 | 209,699 | |||||||||
| Total core deposits | 2,556,877 | 2,541,703 | 2,482,764 | 2,405,007 | 2,217,023 | |||||||||
| Certificates of deposit | 441,814 | 445,581 | 472,777 | 503,471 | 526,246 | |||||||||
| Total deposits | $ | 2,998,691 | $ | 2,987,284 | $ | 2,955,541 | $ | 2,908,478 | $ | 2,743,269 | ||||
Non-GAAP Reconciliations
In addition to results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP"), this earnings release contains certain non-GAAP financial measures, which include: the efficiency ratio; tangible book value; tangible book value per share; tangible equity to tangible assets ratio; and the ratio of the allowance for credit losses to total loans excluding PPP loans. The Company believes these non-GAAP financial measures and ratios as presented are useful for both investors and management to understand the effects of certain items and provide an alternative view of its performance over time and in comparison to its competitors. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Set forth below is a reconciliation to GAAP of the Company's efficiency ratio:
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||||||||
| Noninterest expense | $ | 25,909 | $ | 26,016 | $ | 26,443 | $ | 51,925 | $ | 52,443 | ||||||||||
| Net interest income | $ | 27,168 | $ | 27,707 | $ | 26,122 | $ | 54,875 | $ | 51,631 | ||||||||||
| Plus: noninterest income | 10,180 | 10,352 | 9,344 | 20,532 | 17,983 | |||||||||||||||
| Plus: tax equivalent adjustment | 307 | 310 | 305 | 617 | 615 | |||||||||||||||
| Net interest income plus noninterest income – adjusted | $ | 37,655 | $ | 38,369 | $ | 35,771 | $ | 76,024 | $ | 70,229 | ||||||||||
| Efficiency ratio | 69.37 | % | 68.36 | % | 74.56 | % | 68.86 | % | 75.33 | % | ||||||||||
| Efficiency ratio - adjusted | 68.81 | % | 67.80 | % | 73.92 | % | 68.30 | % | 74.67 | % | ||||||||||
Set forth below is a reconciliation to GAAP of tangible book value and tangible book value per share:
| (Dollars in thousands, except per share data) | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||
| Total stockholders' equity | $ | 401,746 | $ | 396,511 | $ | 396,519 | $ | 406,452 | $ | 404,724 | |||||
| Less: goodwill, core deposit intangibles, net of taxes | 25,780 | 25,830 | 25,902 | 26,002 | 26,130 | ||||||||||
| Tangible book value | $ | 375,966 | $ | 370,681 | $ | 370,617 | $ | 380,450 | $ | 378,594 | |||||
| Common shares outstanding | 16,303,461 | 16,307,658 | 16,636,483 | 16,655,347 | 16,791,027 | ||||||||||
| Tangible book value per share | $ | 23.06 | $ | 22.73 | $ | 22.28 | $ | 22.84 | $ | 22.55 | |||||
| Book value per share | $ | 24.64 | $ | 24.31 | $ | 23.83 | $ | 24.40 | $ | 24.10 | |||||
Set forth below is a reconciliation to GAAP of tangible equity to tangible assets:
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | |||||||||||||||
| Tangible equity(1) | $ | 375,966 | $ | 370,681 | $ | 370,617 | $ | 380,450 | $ | 378,594 | ||||||||||
| Total assets | 3,502,819 | 3,481,360 | 3,524,723 | 3,648,613 | 3,679,971 | |||||||||||||||
| Less: goodwill, core deposit intangibles, net of taxes | 25,780 | 25,830 | 25,902 | 26,002 | 26,130 | |||||||||||||||
| Total tangible assets | $ | 3,477,039 | $ | 3,455,530 | $ | 3,498,821 | $ | 3,622,611 | $ | 3,653,841 | ||||||||||
| Tangible equity to tangible assets | 10.81 | % | 10.73 | % | 10.59 | % | 10.50 | % | 10.36 | % | ||||||||||
_________________________________
(1) Tangible equity (or tangible book value) is equal to total stockholders' equity less goodwill and core deposit intangibles, net of related deferred tax liabilities.
Set forth below is a reconciliation to GAAP of the allowance for credit losses to total loans and the allowance for credit losses as adjusted to exclude PPP loans:
| (Dollars in thousands) | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | |||||||||||||||
| Total gross loans receivable | $ | 2,696,072 | $ | 2,719,642 | $ | 2,733,267 | $ | 2,690,153 | $ | 2,678,624 | ||||||||||
| Less: PPP loans | 19,044 | 28,762 | 46,650 | 73,090 | 64,845 | |||||||||||||||
| Adjusted loans | $ | 2,677,028 | $ | 2,690,880 | $ | 2,686,617 | $ | 2,617,063 | $ | 2,613,779 | ||||||||||
| Allowance for credit losses | $ | 30,933 | $ | 34,406 | $ | 35,468 | $ | 36,059 | $ | 39,844 | ||||||||||
| Allowance for credit losses / Adjusted loans | 1.16 | % | 1.28 | % | 1.32 | % | 1.38 | % | 1.52 | % | ||||||||||
