DALLAS, Oct. 28, 2015 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (NASDAQ:TBK) today announced earnings and operating results for the third quarter of 2015.
"I am pleased that our third quarter results demonstrate performance in line with our strategic plan," said Aaron P. Graft, Chief Executive Officer, Triumph Bancorp, Inc.
As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled "Metrics and Non-GAAP Financial Reconciliation" at the end of this document.
Third Quarter Highlights
- For the third quarter of 2015, net income was $5.9 million and net income available to common stockholders was $5.7 million, compared to net income of $4.7 million and net income available to common stockholders of $4.5 million for the quarter ended June 30, 2015. The results for the quarter ended September 30, 2015 include a net benefit of $1.7 million recorded to increase the bargain purchase gain realized on the acquisition of Doral Money, Inc. ("DMI"), bringing the gain on this transaction to $14.2 million.
- Fully diluted earnings per share were $0.32 for the quarter ended September 30, 2015, compared to $0.25 for the quarter ended June 30, 2015. Excluding the impact of third quarter 2015 measurement period adjustments to the bargain purchase gain associated with the DMI acquisition, adjusted fully diluted earnings per share were $0.22 for the quarter ended September 30, 2015.
- For the quarter ended September 30, 2015, our annualized return on average common equity and return on average assets were 9.00% and 1.50%, respectively, compared to an annualized return on average common equity and return on average assets of 7.27% and 1.23%, respectively, for the quarter ended June 30, 2015. Our ratio of tangible common stockholders' equity to tangible assets was 14.50% as of September 30, 2015.
- Total loans held for investment increased $32.6 million, or 2.8%, during the third quarter of 2015, and have increased $179.4 million, or 17.8%, during the nine months ended September 30, 2015.
- Net interest margin ("NIM") was 6.45% for the quarter ended September 30, 2015 and 6.59% for the nine months ended September 30, 2015.
Balance Sheet
Total loans held for investment were $1.185 billion at September 30, 2015, an increase of $32.6 million or 2.8% during the third quarter. This increase was primarily due to continued organic growth in our commercial finance loan portfolio, which consists of factored receivables, asset based and equipment loans originated under our Triumph Commercial Finance brand, and healthcare asset based loans originated under our Triumph Healthcare Finance brand. Our commercial finance loan portfolio totaled $497.8 million as of September 30, 2015, an increase of $30.1 million or 6.4% in the third quarter of 2015.
Total deposits were $1.200 billion at September 30, 2015, an increase of $10.8 million or 0.9% for the third quarter of 2015. Non-interest-bearing deposits accounted for 14% of total deposits and non-time deposits accounted for 47% of total deposits. The average cost of our total funds was 0.64% for the quarter ended September 30, 2015 compared to 0.63% for the quarter ended June 30, 2015, on an annualized basis.
Net Interest Income
We earned net interest income for the quarter ended September 30, 2015 of $23.2 million compared to $24.6 million for the quarter ended June 30, 2015. Yields on loans for the quarter ended September 30, 2015 were down 115 bps to 8.34% (7.96% adjusted to exclude loan discount accretion) compared to 9.49% (8.96% adjusted to exclude loan discount accretion) for the quarter ended June 30, 2015. NIM decreased 75 bps to 6.45% for the quarter ended September 30, 2015 from 7.20% for the quarter ended June 30, 2015. NIM adjusted to exclude loan discount accretion was 6.14% for the quarter ended September 30, 2015 compared to 6.78% for the quarter ended June 30, 2015. As previously reported, the higher NIM levels for the prior quarter ended June 30, 2015 were impacted by $2.3 million of delinquent interest and fees received in conjunction with the resolution and restructuring of two specific loans.
Asset Quality
Non-performing Assets ("NPAs") improved 14 bps from June 30, 2015 to September 30, 2015 to 1.12% of total assets, and our ratio of past due to total loans improved to 2.14%. We experienced net charge-offs of $0.1 million for the quarter ended September 30, 2015 compared to net charge-offs of $0.4 million for the quarter ended June 30, 2015. Our provision for loan losses was $0.2 million for the quarter ended September 30, 2015 compared to $2.5 million for the quarter ended June 30, 2015. From June 30, 2015 to September 30, 2015, our allowance for loan and lease losses ("ALLL") remained relatively stable from $11.5 million or 0.99% of total loans to $11.5 million or 0.97% of total loans.
Non-interest Income and Expense
We earned non-interest income for the quarter ended September 30, 2015 of $6.3 million (or $4.6 million excluding the DMI bargain purchase adjustment) compared to $4.8 million for the quarter ended June 30, 2015. Non-interest income for the quarter ended September 30, 2015 included $1.7 million of asset management fees earned by our asset management subsidiary, Triumph Capital Advisors.
For the quarter ended September 30, 2015, non-interest expense totaled $20.5 million, compared to $19.6 million for the quarter ended June 30, 2015.
Conference Call Information
Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 8:30 a.m. Central Time on Thursday, October 29, 2015.
To participate in the live conference call, please dial 1 (855) 779-1042 (U.S. and Canada) and enter Conference ID # 60864808. A simultaneous audio-only webcast may be accessed via our website at www.triumphbancorp.com through the Investor Relations, Webcasts and Presentations links, or through a direct link here at http://edge.media-server.com/m/p/2kqvb5n3/lan/en. An archive of this conference call will subsequently be available at this same location on our website.
About Triumph
Headquartered in Dallas, Texas, Triumph Bancorp, Inc. (NASDAQ:TBK) is a financial holding company with a diversified line of community banking, commercial finance and asset management activities. www.triumphbancorp.com
Forward-Looking Statements
This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "could," "may," "will," "should," "seeks," "likely," "intends," "plans," "pro forma," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: our limited operating history as an integrated company; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market area; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses and any future acquisitions; changes in management personnel; interest rate risk; concentration of our factoring services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve non-performing assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; risks related to our asset management business; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the obligations associated with being a public company; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; increases in our capital requirements; and risk retention requirements under the Dodd-Frank Act.
While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 6, 2015.
Non-GAAP Financial Measures
This press release includes certain Non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided at the end of this press release.
The following table sets forth key metrics used by Triumph to monitor its operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.
| As of and for the Three Months Ended | |||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| 2015 | 2015 | 2015 | 2014 | 2014 | |
| Financial Highlights (Dollars in thousands): | |||||
| Total assets | $ 1,581,463 | $ 1,529,259 | $ 1,472,743 | $ 1,447,898 | $ 1,347,798 |
| Loans held for investment | $ 1,185,301 | $ 1,152,679 | $ 1,011,446 | $ 1,005,878 | $ 977,139 |
| Deposits | $ 1,200,036 | $ 1,189,259 | $ 1,173,679 | $ 1,165,229 | $ 1,105,624 |
| Net income available to common stockholders | $ 5,732 | $ 4,457 | $ 13,852 | $ 2,021 | $ 9,495 |
| Performance Ratios - Annualized: | |||||
| Return on average assets | 1.50% | 1.23% | 3.93% | 0.78% | 3.01% |
| Return on average common equity (1) | 9.00% | 7.27% | 23.95% | 4.30% | 26.84% |
| Return on average tangible common equity (1) | 10.20% | 8.28% | 27.38% | 5.11% | 34.26% |
| Return on average total equity | 8.96% | 7.30% | 23.31% | 5.02% | 23.16% |
| Yield on loans | 8.34% | 9.49% | 8.50% | 8.98% | 8.66% |
| Adjusted yield on loans (1) | 7.96% | 8.96% | 8.04% | 8.29% | 8.03% |
| Cost of interest bearing deposits | 0.69% | 0.65% | 0.64% | 0.61% | 0.56% |
| Cost of total deposits | 0.59% | 0.56% | 0.55% | 0.52% | 0.48% |
| Cost of total funds | 0.64% | 0.63% | 0.63% | 0.65% | 0.59% |
| Net interest margin (1) | 6.45% | 7.20% | 6.11% | 6.58% | 6.69% |
| Adjusted net interest margin (1) | 6.14% | 6.78% | 5.76% | 6.05% | 6.19% |
| Net non-interest expense to average assets (1) | 4.04% | 3.95% | 4.18% | 4.44% | 4.48% |
| Efficiency ratio (1) | 73.85% | 66.75% | 79.70% | 78.58% | 78.29% |
| Asset Quality:(2) | |||||
| Past due to total loans | 2.14% | 2.33% | 2.91% | 2.57% | 2.61% |
| Non-performing loans to total loans | 0.97% | 1.12% | 1.66% | 1.66% | 1.80% |
| Non-performing assets to total assets | 1.12% | 1.26% | 1.62% | 1.73% | 2.05% |
| ALLL to non-performing loans | 100.00% | 88.51% | 55.28% | 53.02% | 41.68% |
| ALLL to total loans | 0.97% | 0.99% | 0.92% | 0.88% | 0.75% |
| Net charge-offs to average loans | 0.01% | 0.03% | 0.02% | 0.03% | 0.03% |
| Capital:(3) | |||||
| Tier 1 capital to average assets | 16.87% | 17.01% | 17.35% | 15.92% | 12.20% |
| Tier 1 capital to risk-weighted assets | 19.34% | 19.16% | 20.72% | 19.56% | 14.59% |
| Common equity tier 1 capital to risk-weighted assets | 17.18% | 16.98% | 18.33% | N/A | N/A |
| Total capital to risk-weighted assets | 20.21% | 20.04% | 21.51% | 20.35% | 15.27% |
| Total equity to total assets | 16.69% | 16.84% | 17.16% | 16.40% | 13.05% |
| Total stockholders' equity to total assets | 16.69% | 16.84% | 17.16% | 16.40% | 11.12% |
| Tangible common stockholders' equity to tangible assets | 14.50% | 14.51% | 14.75% | 14.00% | 8.38% |
| Per Share Amounts: | |||||
| Book value per share | $ 14.09 | $ 13.73 | $ 13.52 | $ 12.68 | $ 14.18 |
| Tangible book value per share (1) | $ 12.48 | $ 12.06 | $ 11.84 | $ 11.06 | $ 11.17 |
| Basic earnings per common share | $ 0.32 | $ 0.25 | $ 0.78 | $ 0.14 | $ 0.96 |
| Diluted earnings per common share | $ 0.32 | $ 0.25 | $ 0.76 | $ 0.14 | $ 0.91 |
| Shares outstanding end of period | 18,040,072 | 18,041,072 | 17,963,783 | 17,963,783 | 9,886,778 |
Unaudited consolidated balance sheet as of:
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| ASSETS | |||||
| Total cash and cash equivalents | $ 115,783 | $ 99,714 | $ 178,442 | $ 160,888 | $ 75,625 |
| Securities - available for sale | 156,820 | 158,693 | 161,360 | 162,024 | 165,489 |
| Securities - held to maturity | 747 | 746 | 746 | 745 | 745 |
| Loans held for sale | 2,174 | 4,096 | 3,401 | 3,288 | 7,295 |
| Loans held for investment | 1,185,301 | 1,152,679 | 1,011,446 | 1,005,878 | 977,139 |
| Allowance for loan and lease losses | (11,544) | (11,462) | (9,286) | (8,843) | (7,320) |
| Loans, net | 1,173,757 | 1,141,217 | 1,002,160 | 997,035 | 969,819 |
| FHLB and FRB stock | 7,992 | 5,707 | 4,466 | 4,903 | 5,826 |
| Premises and equipment, net | 21,807 | 21,677 | 21,716 | 21,933 | 21,744 |
| Other real estate owned ("OREO"), net | 6,201 | 6,322 | 6,991 | 8,423 | 10,019 |
| Goodwill and intangible assets, net | 28,995 | 30,174 | 30,211 | 29,057 | 29,783 |
| Bank-owned life insurance | 29,406 | 29,295 | 29,193 | 29,083 | 28,955 |
| Deferred tax asset, net | 15,838 | 15,582 | 14,983 | 15,956 | 16,523 |
| Other assets | 21,943 | 16,036 | 19,074 | 14,563 | 15,975 |
| Total assets | $ 1,581,463 | $ 1,529,259 | $ 1,472,743 | $ 1,447,898 | $ 1,347,798 |
| LIABILITIES | |||||
| Non-interest bearing deposits | $ 167,931 | $ 164,560 | $ 167,538 | $ 179,848 | $ 154,750 |
| Interest bearing deposits | 1,032,105 | 1,024,699 | 1,006,141 | 985,381 | 950,874 |
| Total deposits | 1,200,036 | 1,189,259 | 1,173,679 | 1,165,229 | 1,105,624 |
| Customer repurchase agreements | 15,584 | 13,011 | 8,666 | 9,282 | 15,644 |
| Federal Home Loan Bank advances | 61,000 | 19,000 | — | 3,000 | — |
| Senior secured note | — | — | — | — | 11,630 |
| Junior subordinated debentures | 24,620 | 24,553 | 24,487 | 24,423 | 24,359 |
| Other liabilities | 16,304 | 25,957 | 13,234 | 8,455 | 14,713 |
| Total liabilities | 1,317,544 | 1,271,780 | 1,220,066 | 1,210,389 | 1,171,970 |
| EQUITY | |||||
| Preferred stock series A | 4,550 | 4,550 | 4,550 | 4,550 | 4,550 |
| Preferred stock series B | 5,196 | 5,196 | 5,196 | 5,196 | 5,196 |
| Common stock | 181 | 181 | 180 | 180 | 99 |
| Additional paid-in-capital | 193,465 | 192,605 | 191,745 | 191,049 | 105,304 |
| Treasury stock, at cost | (184) | (170) | (161) | (161) | (68) |
| Retained earnings | 59,785 | 54,053 | 49,596 | 35,744 | 34,014 |
| Accumulated other comprehensive income | 926 | 1,064 | 1,571 | 951 | 836 |
| Total stockholders' equity | 263,919 | 257,479 | 252,677 | 237,509 | 149,931 |
| Noncontrolling interests | — | — | — | — | 25,897 |
| Total equity | 263,919 | 257,479 | 252,677 | 237,509 | 175,828 |
| Total liabilities and equity | $ 1,581,463 | $ 1,529,259 | $ 1,472,743 | $ 1,447,898 | $ 1,347,798 |
Unaudited consolidated statement of income for the three months ended:
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| Interest income: | |||||
| Loans, including fees | $ 15,716 | $ 17,158 | $ 13,239 | $ 14,138 | $ 13,706 |
| Factored receivables, including fees | 8,829 | 8,654 | 7,509 | 8,367 | 7,681 |
| Taxable securities | 649 | 659 | 678 | 644 | 666 |
| Tax exempt securities | 17 | 16 | 12 | 14 | 15 |
| Cash deposits | 92 | 110 | 141 | 117 | 50 |
| Total interest income | 25,303 | 26,597 | 21,579 | 23,280 | 22,118 |
| Interest expense: | |||||
| Deposits | 1,764 | 1,667 | 1,570 | 1,498 | 1,289 |
| Senior secured note | — | — | — | 173 | 134 |
| Junior subordinated debentures | 283 | 278 | 272 | 276 | 276 |
| Other borrowings | 25 | 7 | 12 | 4 | 24 |
| Total interest expense | 2,072 | 1,952 | 1,854 | 1,951 | 1,723 |
| Net interest income | 23,231 | 24,645 | 19,725 | 21,329 | 20,395 |
| Provision for loan losses | 165 | 2,541 | 645 | 1,811 | 1,375 |
| Net interest income after provision for loan losses | 23,066 | 22,104 | 19,080 | 19,518 | 19,020 |
| Non-interest income: | |||||
| Service charges on deposits | 710 | 666 | 612 | 647 | 811 |
| Card income | 574 | 578 | 523 | 516 | 544 |
| Net OREO gains/(losses) and valuation adjustments | (58) | 52 | 26 | (242) | (11) |
| Net gains on sale of securities | 15 | 242 | — | 62 | 10 |
| Net gains on sale of loans | 363 | 491 | 542 | 437 | 484 |
| Fee income | 542 | 502 | 422 | 553 | 448 |
| Gain on branch sale | — | — | — | — | 12,619 |
| Bargain purchase gain | 1,708 | — | 12,509 | — | — |
| Asset management fees | 1,744 | 1,274 | 958 | 486 | 374 |
| Other | 700 | 964 | 1,067 | 1,262 | 525 |
| Total non-interest income | 6,298 | 4,769 | 16,659 | 3,721 | 15,804 |
| Non-interest expense: | |||||
| Salaries and employee benefits | 12,416 | 12,042 | 13,269 | 12,752 | 11,032 |
| Occupancy, furniture and equipment | 1,575 | 1,555 | 1,572 | 1,429 | 1,319 |
| FDIC insurance and other regulatory assessments | 252 | 271 | 263 | 221 | 280 |
| Professional fees | 1,344 | 852 | 1,327 | 1,146 | 1,043 |
| Amortization of intangible assets | 1,179 | 895 | 764 | 727 | 746 |
| Advertising and promotion | 618 | 526 | 543 | 366 | 1,102 |
| Communications and technology | 951 | 927 | 886 | 961 | 954 |
| Other | 2,210 | 2,567 | 2,159 | 2,083 | 1,985 |
| Total non-interest expense | 20,545 | 19,635 | 20,783 | 19,685 | 18,461 |
| Net income before income tax | 8,819 | 7,238 | 14,956 | 3,554 | 16,363 |
| Income tax expense | 2,891 | 2,586 | 912 | 747 | 6,089 |
| Net income | $ 5,928 | $ 4,652 | $ 14,044 | $ 2,807 | $ 10,274 |
| Effect of noncontrolling interests and preferred shares | (196) | (195) | (192) | (786) | (779) |
| Net income available to common stockholders | $ 5,732 | $ 4,457 | $ 13,852 | $ 2,021 | $ 9,495 |
Loans held for investment summarized as of:
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| Commercial real estate | $ 247,175 | $ 234,090 | $ 236,659 | $ 249,164 | $ 261,836 |
| Construction, land development, land | 52,446 | 46,743 | 52,203 | 42,914 | 45,996 |
| 1-4 family residential properties | 77,043 | 75,588 | 73,605 | 78,738 | 80,419 |
| Farmland | 25,784 | 25,701 | 24,805 | 22,496 | 20,059 |
| Commercial | 468,055 | 454,161 | 371,614 | 364,567 | 340,316 |
| Factored receivables | 201,803 | 199,716 | 171,452 | 180,910 | 169,112 |
| Consumer | 10,632 | 10,993 | 11,201 | 11,941 | 12,527 |
| Mortgage warehouse | 102,363 | 105,687 | 69,907 | 55,148 | 46,874 |
| Total loans | $ 1,185,301 | $ 1,152,679 | $ 1,011,446 | $ 1,005,878 | $ 977,139 |
A portion of our total loan portfolio consists of commercial finance products offered on a nationwide basis, as further summarized below:
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| Equipment* | $ 143,483 | $ 138,018 | $ 118,273 | $ 106,354 | $ 94,460 |
| Asset based lending (General)* | 85,641 | 64,836 | 36,511 | 46,388 | 50,046 |
| Asset based lending (Healthcare)* | 66,832 | 65,083 | 59,572 | 41,770 | 40,885 |
| Factored receivables | 201,803 | 199,716 | 171,452 | 180,910 | 169,112 |
| Commercial finance | $ 497,759 | $ 467,653 | $ 385,808 | $ 375,422 | $ 354,503 |
| Total loans held for investment | $ 1,185,301 | $ 1,152,679 | $ 1,011,446 | $ 1,005,878 | $ 977,139 |
| Commercial finance as a % of total | 42% | 41% | 38% | 37% | 36% |
| Community banking as a % of total | 58% | 59% | 62% | 63% | 64% |
* Denotes equipment loans offered under our Triumph Commercial Finance brand, general asset based loans offered under our Triumph Commercial Finance brand and healthcare asset based loan products offered under our Triumph Healthcare Finance brand.
Deposits summarized as of:
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| Non-interest bearing demand | $ 167,931 | $ 164,560 | $ 167,538 | $ 179,848 | $ 154,750 |
| Interest bearing demand | 206,603 | 228,909 | 231,718 | 236,525 | 209,491 |
| Individual retirement accounts | 58,619 | 56,285 | 55,773 | 55,034 | 54,378 |
| Money market | 117,888 | 116,019 | 120,001 | 117,514 | 125,371 |
| Savings | 72,244 | 73,016 | 74,236 | 70,407 | 72,012 |
| Certificates of deposit | 526,732 | 500,451 | 474,413 | 455,901 | 439,603 |
| Brokered deposits | 50,019 | 50,019 | 50,000 | 50,000 | 50,019 |
| Total deposits | $ 1,200,036 | $ 1,189,259 | $ 1,173,679 | $ 1,165,229 | $ 1,105,624 |
Net interest margin summarized for the three months ended:
| September 30, 2015 | June 30, 2015 | |||||
| Average | Average | Average | Average | |||
| (Dollars in thousands) | Balance | Interest | Rate | Balance | Interest | Rate |
| Interest earning assets: | ||||||
| Interest earning cash balances | $ 96,566 | $ 92 | 0.38% | $ 119,969 | $ 110 | 0.37% |
| Taxable securities | 154,254 | 598 | 1.54% | 153,073 | 609 | 1.60% |
| Tax exempt securities | 2,554 | 17 | 2.64% | 3,643 | 16 | 1.76% |
| FHLB and FRB stock | 6,959 | 51 | 2.91% | 5,288 | 50 | 3.79% |
| Loans | 1,167,670 | 24,545 | 8.34% | 1,090,472 | 25,812 | 9.49% |
| Total interest earning assets | $ 1,428,003 | $ 25,303 | 7.03% | $ 1,372,445 | $ 26,597 | 7.77% |
| Non-interest earning assets: | ||||||
| Other assets | 137,695 | 138,600 | ||||
| Total assets | $ 1,565,698 | $ 1,511,045 | ||||
| Interest bearing liabilities: | ||||||
| Deposits: | ||||||
| Interest bearing demand | $ 211,823 | $ 32 | 0.06% | $ 239,033 | $ 36 | 0.06% |
| Individual retirement accounts | 57,227 | 177 | 1.23% | 55,778 | 168 | 1.21% |
| Money market | 116,375 | 66 | 0.23% | 116,517 | 66 | 0.23% |
| Savings | 72,617 | 9 | 0.05% | 74,088 | 9 | 0.05% |
| Certificates of deposit | 509,224 | 1,354 | 1.05% | 485,533 | 1,263 | 1.04% |
| Brokered deposits | 50,002 | 126 | 1.00% | 50,002 | 125 | 1.00% |
| Total deposits | 1,017,268 | 1,764 | 0.69% | 1,020,951 | 1,667 | 0.65% |
| Junior subordinated debentures | 24,580 | 283 | 4.57% | 24,513 | 278 | 4.55% |
| Short-term borrowings | 69,778 | 25 | 0.14% | 28,862 | 7 | 0.10% |
| Total interest bearing liabilities | $ 1,111,626 | $ 2,072 | 0.74% | $ 1,074,326 | $ 1,952 | 0.73% |
| Non-interest bearing liabilities and equity: | ||||||
| Non-interest bearing demand deposits | 171,887 | 170,240 | ||||
| Other liabilities | 19,841 | 10,825 | ||||
| Total equity | 262,344 | 255,654 | ||||
| Total liabilities and equity | $ 1,565,698 | $ 1,511,045 | ||||
| Net interest income | $ 23,231 | $ 24,645 | ||||
| Interest spread | 6.29% | 7.04% | ||||
| Net interest margin | 6.45% | 7.20% | ||||
Metrics and non-GAAP financial reconciliation:
| As of and for the Three Months Ended | |||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |
| (Dollars in thousands, except per share amounts) | 2015 | 2015 | 2015 | 2014 | 2014 |
| Net income | $ 5,928 | $ 4,652 | $ 14,044 | $ 2,807 | $ 10,274 |
| Less: gain on branch sale, net of tax | — | — | — | — | 7,892 |
| Less: bargain purchase gain, non-taxable | 1,708 | — | 12,509 | — | — |
| Add: merger and acquisition expenses, net of tax | — | — | 158 | — | — |
| Add: incremental bonus related to acquisition, net of tax | — | — | 1,138 | — | — |
| Less: escrow recovery from Doral Healthcare Finance, net of tax | — | — | 195 | — | — |
| Adjusted net income | $ 4,220 | $ 4,652 | $ 2,636 | $ 2,807 | $ 2,382 |
| Effect of noncontrolling interests and preferred shares | (196) | (195) | (192) | (786) | (779) |
| Adjusted net income available to common stockholders | $ 4,024 | $ 4,457 | $ 2,444 | $ 2,021 | $ 1,603 |
| Weighted average shares outstanding - diluted | 18,587,821 | 17,813,825 | 18,428,663 | 14,261,717 | 10,602,155 |
| Less: adjusted effects of assumed Preferred Stock conversion | 676,351 | — | 676,351 | — | 676,351 |
| Adjusted weighted average shares outstanding - diluted | 17,911,470 | 17,813,825 | 17,752,312 | 14,261,717 | 9,925,804 |
| Adjusted diluted earnings per common share | $ 0.22 | $ 0.25 | $ 0.14 | $ 0.14 | $ 0.16 |
| Average common equity | $ 252,599 | N/A | $ 234,555 | N/A | N/A |
| Less: average contribution impact of DMI transaction | 1,708 | N/A | 3,549 | N/A | N/A |
| Adjusted average common equity | 250,891 | N/A | 231,006 | N/A | N/A |
| Adjusted return on average common equity | 6.36% | N/A | 4.29% | N/A | N/A |
| Average total assets | $ 1,565,698 | N/A | $ 1,449,791 | N/A | N/A |
| Less: average contribution impact of DMI transaction | 1,708 | N/A | 3,549 | N/A | N/A |
| Adjusted average total assets | 1,563,990 | N/A | 1,446,242 | N/A | N/A |
| Adjusted return on average total assets | 1.07% | N/A | 0.74% | N/A | N/A |
| Net income available to common stockholders | $ 5,732 | $ 4,457 | $ 13,852 | $ 2,021 | $ 9,495 |
| Average tangible common equity | 222,884 | 215,846 | 205,204 | 156,888 | 109,944 |
| Return on average tangible common equity | 10.20% | 8.28% | 27.38% | 5.11% | 34.26% |
| Efficiency ratio: | |||||
| Net interest income | $ 23,231 | $ 24,645 | $ 19,725 | $ 21,329 | $ 20,395 |
| Non-interest income | 6,298 | 4,769 | 16,659 | 3,721 | 15,804 |
| Operating revenue | 29,529 | 29,414 | 36,384 | 25,050 | 36,199 |
| Less: gain on branch sale | — | — | — | — | 12,619 |
| Less: bargain purchase gain | 1,708 | — | 12,509 | — | — |
| Less: escrow recovery from Doral Healthcare Finance | — | — | 300 | — | — |
| Adjusted operating revenue | $ 27,821 | $ 29,414 | $ 23,575 | $ 25,050 | $ 23,580 |
| Total non-interest expenses | $ 20,545 | $ 19,635 | $ 20,783 | $ 19,685 | $ 18,461 |
| Less: merger and acquisition expenses | — | — | 243 | — | — |
| Less: incremental bonus related to acquisition | — | — | 1,750 | — | — |
| Adjusted non-interest expenses | $ 20,545 | $ 19,635 | $ 18,790 | $ 19,685 | $ 18,461 |
| Efficiency ratio | 73.85% | 66.75% | 79.70% | 78.58% | 78.29% |
| Net non-interest expense to average assets ratio: | |||||
| Total non-interest expenses | $ 20,545 | $ 19,635 | $ 20,783 | $ 19,685 | $ 18,461 |
| Less: merger and acquisition expenses | — | — | 243 | — | — |
| Less: incremental bonus related to acquisition | — | — | 1,750 | — | — |
| Adjusted non-interest expense | $ 20,545 | $ 19,635 | $ 18,790 | $ 19,685 | $ 18,461 |
| Total non-interest income | $ 6,298 | $ 4,769 | $ 16,659 | $ 3,721 | $ 15,804 |
| Less: bargain purchase gain | 1,708 | — | 12,509 | — | — |
| Less: gain on branch sale | — | — | — | — | 12,619 |
| Less: escrow recovery from Doral Healthcare Finance | — | — | 300 | — | — |
| Adjusted non-interest income | $ 4,590 | $ 4,769 | $ 3,850 | $ 3,721 | $ 3,185 |
| Adjusted net non-interest expenses | $ 15,955 | $ 14,866 | $ 14,940 | $ 15,964 | $ 15,276 |
| Average total assets | $ 1,565,698 | $ 1,511,045 | $ 1,449,791 | $ 1,427,475 | $ 1,354,207 |
| Net non-interest expense to average assets ratio | 4.04% | 3.95% | 4.18% | 4.44% | 4.48% |
| Reported yield on loans | 8.34% | 9.49% | 8.50% | 8.98% | 8.66% |
| Effect of accretion income on acquired loans | (0.38%) | (0.53%) | (0.46%) | (0.69%) | (0.63%) |
| Adjusted yield on loans | 7.96% | 8.96% | 8.04% | 8.29% | 8.03% |
| Reported net interest margin | 6.45% | 7.20% | 6.11% | 6.58% | 6.69% |
| Effect of accretion income on acquired loans | (0.31%) | (0.42%) | (0.35%) | (0.53%) | (0.50%) |
| Adjusted net interest margin | 6.14% | 6.78% | 5.76% | 6.05% | 6.19% |
| Total stockholders' equity | $ 263,919 | $ 257,479 | $ 252,677 | $ 237,509 | $ 149,931 |
| Less: Preferred stock liquidation preference | 9,746 | 9,746 | 9,746 | 9,746 | 9,746 |
| Total common stockholders' equity | 254,173 | 247,733 | 242,931 | 227,763 | 140,185 |
| Less: Goodwill and other intangibles | 28,995 | 30,174 | 30,211 | 29,057 | 29,783 |
| Tangible common stockholders' equity | $ 225,178 | $ 217,559 | $ 212,720 | $ 198,706 | $ 110,402 |
| Common shares outstanding | 18,040,072 | 18,041,072 | 17,963,783 | 17,963,783 | 9,886,778 |
| Tangible book value per share | $ 12.48 | $ 12.06 | $ 11.84 | $ 11.06 | $ 11.17 |
| Total assets at end of period | $ 1,581,463 | $ 1,529,259 | $ 1,472,743 | $ 1,447,898 | $ 1,347,798 |
| Less: Goodwill and other intangibles | 28,995 | 30,174 | 30,211 | 29,057 | 29,783 |
| Adjusted total assets at period end | $ 1,552,468 | $ 1,499,085 | $ 1,442,532 | $ 1,418,841 | $ 1,318,015 |
| Tangible common stockholders' equity ratio | 14.50% | 14.51% | 14.75% | 14.00% | 8.38% |
1) The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. The non-GAAP measures used by the Company include the following:
- "Common stockholders' equity" is defined as total stockholders' equity at end of period less the liquidation preference value of the preferred stock.
- "Adjusted diluted earnings per common share" is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding. Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business. Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.
- "Adjusted average common equity" is defined as average common equity less the average contribution impact of acquisitions.
- "Adjusted average total assets" is defined as average total assets less the average contribution impact of acquisitions.
- "Adjusted return on average common equity" is defined as adjusted net income available to common stockholders divided by adjusted average common equity.
- "Adjusted return on average total assets" is defined as adjusted net income available to common stockholders divided by adjusted average total assets.
- "Net interest margin" is defined as net interest income divided by average interest-earning assets.
- "Tangible common stockholders' equity" is common stockholders' equity less goodwill and other intangible assets.
- "Total tangible assets" is defined as total assets less goodwill and other intangible assets.
- "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
- "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
- "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
- "Efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
- "Net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. This metric is used by our management to better assess our operating efficiency.
- "Adjusted yield on loans" is our yield on loans after excluding loan accretion from our acquired loan portfolio. Our management uses this metric to better assess the impact of purchase accounting on our yield on loans, as the effect of loan discount accretion is expected to decrease as the acquired loans roll off of our balance sheet.
- "Adjusted net interest margin" is net interest margin after excluding loan accretion from the acquired loan portfolio. Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discount accretion is expected to decrease as the acquired loans mature or roll off of our balance sheet.
2) Asset quality ratios exclude loans held for sale.
3) Current quarter ratios are preliminary and, beginning January 1, 2015, are calculated under the requirements of Basel III.