CenterState Bank Corporation Announces Fourth Quarter 2019 Results
(all amounts are in thousands, except per share data, or unless otherwise noted)
WINTER HAVEN, Fla., Jan. 27, 2020 /PRNewswire/ -- CenterState Bank Corporation (Nasdaq: CSFL) (the "Company" or "CenterState") announced fourth quarter 2019 results. Highlights for the period ended December 31, 2019 and selected performance metrics are set forth below.
- Returns and Capital Management:
- Return on Average Common Equity: 9.8% in the fourth quarter 2019 compared to 7.6% in the previous quarter; Return on Tangible Average Common Equity ("ROTCE") (non-GAAP(1)) and adjusted ROTCE (non-GAAP(1)) of 18.8% and 19.1%, respectively, for the fourth quarter 2019 compared to 14.6% and 17.8%, respectively, for the previous quarter
- Book Value per Share: increased to $23.14 per share compared to $20.60 at December 31, 2018; tangible book value per share (non-GAAP(1)) increased to $12.76 per share, an 11.0% increase compared to December 31, 2018, during a year in which the company repurchased 4.6% of its shares and closed its acquisition of National Commerce Corporation; tangible equity to tangible assets (non-GAAP(1)) ended the year at 10.1%
- Approval of Dividend Increase and Share Repurchase Plan: as announced on January 16, 2020, the Company's Board approved a 27.3% increase in its quarterly dividend to $0.14 per share and a repurchase authorization of up to 6.5 million shares
- Net Income Growth:
- Diluted Earnings per Share ("EPS"): $0.56 in the fourth quarter 2019 compared to $0.43 in the previous quarter; adjusted EPS (non-GAAP(1)) of $0.57 in the fourth quarter 2019 compared to $0.53 in the previous quarter
- Return on Average Assets ("ROAA"): ROAA and adjusted ROAA (non-GAAP(1)) of 1.63% and 1.66%, respectively, for the fourth quarter 2019 compared to 1.27% and 1.57%, respectively, for the previous quarter
- Efficiency Ratio (Non-GAAP(1)): 54.3% reported, 52.1% adjusted for the fourth quarter 2019 compared to 62.3% and 51.9% in the previous quarter
- Revenue Growth(2):
- Revenue: $208.3 million in the fourth quarter 2019, an increase of $4.8 million or 2.4%, from the previous quarter
- Net Interest Margin, tax equivalent ("NIM") (Non-GAAP(1)): NIM increased 6 bps to 4.25%; excluding all loan accretion, core NIM declined 0.06% from the previous quarter
- Reduction in Deposit Costs: cost of deposits declined to 0.67% during the fourth quarter, a 0.07% decline from the prior quarter
- Non-interest income(3): 1.15% of average assets for the current quarter and 1.05% for the year, exceeding the Company's 1.0% target in spite of the Durbin impact beginning in the 2019 third quarter
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
|
Reported | Adjusted (4) |
Reported | Adjusted (4) |
Reported | Adjusted (4) |
Reported | Adjusted (4) | ||||||||||||||
Net income | $71,132 | $72,231 | $50,651 | $51,913 | $225,396 | $256,220 | $156,435 | $182,571 | |||||||||||||
Return on average assets | 1.63% | 1.66% | 1.64% | 1.68% | 1.42% | 1.61% | 1.43% | 1.67% | |||||||||||||
Return on average tangible equity (Non-GAAP)(1) | 18.8% | 19.1% | 19.8% | 20.2% | 16.2% | 18.4% | 17.7% | 20.5% | |||||||||||||
Earnings per share diluted | $0.56 | $0.57 | $0.52 | $0.54 | $1.87 | $2.13 | $1.76 | $2.06 | |||||||||||||
Efficiency ratio, tax equivalent (Non-GAAP)(1) | 54.3% | 52.1% | 53.4% | 50.3% | 59.3% | 51.9% | 60.0% | 51.4% | |||||||||||||
(1) | See reconciliation tables starting on page 9, Explanation of Certain Unaudited Non-GAAP Financial Measures. |
(2) | Revenue is defined as net interest income plus non-interest income. |
(3) | Non-interest income excludes gain or loss on sale of available for sale securities. |
(4) | Performance metrics presented above are adjusted for gain or loss on sale of available for sale securities, merger-related expenses, deferred tax asset write down, gain on sale of deposits and amortization of intangible assets, which for the three and twelve months ended December 31, 2019, represent direct severance, system terminations, and legal and professional fees, that are not duplicative of current operations, and other items. See reconciliation tables starting on page 9, Explanation of Certain Unaudited Non-GAAP Financial Measures. |
Condensed Consolidated Income Statement (unaudited) | |||||||||||||||
Condensed consolidated income statements (unaudited) are shown below for the periods indicated. | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |||||||||
Interest income | |||||||||||||||
Loans | $167,685 | $166,479 | $167,676 | $116,285 | $116,754 | $618,125 | $405,881 | ||||||||
Investment securities | 13,404 | 13,472 | 14,453 | 14,002 | 13,516 | 55,331 | 49,122 | ||||||||
Federal Funds sold and other | 2,783 | 3,974 | 3,124 | 1,995 | 1,911 | 11,876 | 5,629 | ||||||||
Total interest income | 183,872 | 183,925 | 185,253 | 132,282 | 132,181 | 685,332 | 460,632 | ||||||||
Interest expense | |||||||||||||||
Deposits | 22,276 | 24,463 | 23,037 | 13,323 | 12,360 | 83,099 | 33,260 | ||||||||
Securities sold under agreement to repurchase | 278 | 293 | 299 | 236 | 203 | 1,106 | 632 | ||||||||
Other borrowed funds | 2,880 | 3,680 | 2,679 | 3,978 | 3,289 | 13,217 | 11,445 | ||||||||
Corporate debentures | 513 | 542 | 557 | 570 | 647 | 2,182 | 2,213 | ||||||||
Interest expense | 25,947 | 28,978 | 26,572 | 18,107 | 16,499 | 99,604 | 47,550 | ||||||||
Net interest income | 157,925 | 154,947 | 158,681 | 114,175 | 115,682 | 585,728 | 413,082 | ||||||||
Provision for loan losses | 3,048 | 3,692 | 2,792 | 1,053 | 2,100 | 10,585 | 8,283 | ||||||||
Net interest income after loan loss provision | 154,877 | 151,255 | 155,889 | 113,122 | 113,582 | 575,143 | 404,799 | ||||||||
Gain (loss) on sale of securities available for sale | 13 | — | (5) | 17 | — | 25 | (22) | ||||||||
Gain on sale of deposits | — | — | — | — | — | — | 611 | ||||||||
All other non-interest income | 50,316 | 48,488 | 37,948 | 29,283 | 32,396 | 166,035 | 104,538 | ||||||||
Total non-interest income | 50,329 | 48,488 | 37,943 | 29,300 | 32,396 | 166,060 | 105,127 | ||||||||
Merger related expenses | 159 | 16,994 | 15,739 | 6,365 | 1,668 | 39,257 | 34,912 | ||||||||
All other non-interest expense | 113,250 | 110,042 | 106,250 | 78,108 | 77,852 | 407,650 | 277,555 | ||||||||
Total non-interest expense | 113,409 | 127,036 | 121,989 | 84,473 | 79,520 | 446,907 | 312,467 | ||||||||
Income before income tax | 91,797 | 72,707 | 71,843 | 57,949 | 66,458 | 294,296 | 197,459 | ||||||||
Income tax provision | 20,665 | 17,006 | 16,721 | 13,306 | 15,807 | 67,698 | 41,024 | ||||||||
Net income before earnings attributable to noncontrolling interest | 71,132 | 55,701 | 55,122 | 44,643 | 50,651 | 226,598 | 156,435 | ||||||||
Earnings attributable to noncontrolling interest | — | 603 | 599 | — | — | 1,202 | — | ||||||||
Net income | $71,132 | $55,098 | $54,523 | $44,643 | $50,651 | $225,396 | $156,435 | ||||||||
Net income attributable to CenterState Bank Corporation | $71,109 | $55,077 | $54,502 | $44,620 | $50,619 | $225,308 | $156,319 | ||||||||
Earnings per share - Basic | $0.57 | $0.43 | $0.42 | $0.47 | $0.53 | $1.88 | $1.78 | ||||||||
Earnings per share - Diluted | $0.56 | $0.43 | $0.42 | $0.46 | $0.52 | $1.87 | $1.76 | ||||||||
Dividends per share | $0.11 | $0.11 | $0.11 | $0.11 | $0.10 | $0.44 | $0.40 | ||||||||
Average common shares outstanding (basic) | 125,147 | 127,840 | 129,848 | 95,741 | 95,603 | 119,747 | 87,641 | ||||||||
Average common shares outstanding (diluted) | 126,082 | 128,739 | 130,768 | 96,501 | 96,450 | 120,604 | 88,759 | ||||||||
Common shares outstanding at period end | 125,174 | 126,037 | 129,006 | 95,913 | 95,680 | 125,174 | 95,680 | ||||||||
Effective tax rate | 22.51% | 23.59% | 23.47% | 22.96% | 23.78% | 23.10% | 20.78% | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||||
Presented below are condensed consolidated balance sheets for the periods indicated. | ||||||||||
Ending Balance | ||||||||||
Condensed Consolidated Balance Sheets | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||
Assets | ||||||||||
Cash and due from banks | $326,168 | $598,808 | $399,952 | $256,580 | $135,352 | |||||
Fed funds sold and Fed Reserve Bank deposits | 163,890 | 238,470 | 437,386 | 339,223 | 231,981 | |||||
Trading securities | 4,987 | 4,273 | 651 | — | 1,737 | |||||
Investment securities: | ||||||||||
Available for sale | 1,886,724 | 1,779,956 | 1,792,757 | 1,701,396 | 1,727,348 | |||||
Held to maturity | 202,903 | 207,209 | 210,756 | 214,240 | 216,833 | |||||
Total investment securities | 2,089,627 | 1,987,165 | 2,003,513 | 1,915,636 | 1,944,181 | |||||
Loans held for sale | 142,801 | 125,182 | 95,108 | 49,474 | 40,399 | |||||
Loans: | ||||||||||
Originated loans | 5,922,879 | 5,494,738 | 4,888,357 | 4,349,627 | 4,108,656 | |||||
Acquired loans | 5,925,596 | 6,278,686 | 6,667,101 | 3,850,312 | 4,072,877 | |||||
Purchased Credit Impaired ("PCI") loans | 135,468 | 142,982 | 157,303 | 149,456 | 158,971 | |||||
Total gross loans | 11,983,943 | 11,916,406 | 11,712,761 | 8,349,395 | 8,340,504 | |||||
Allowance for loan losses | (40,655) | (41,991) | (40,653) | (40,052) | (39,770) | |||||
Loans, net of allowance | 11,943,288 | 11,874,415 | 11,672,108 | 8,309,343 | 8,300,734 | |||||
Premises, equipment and right of use assets, net | 328,869 | 327,977 | 324,974 | 248,625 | 227,454 | |||||
Goodwill | 1,204,417 | 1,204,417 | 1,204,417 | 802,880 | 802,880 | |||||
Core deposit intangible | 91,157 | 95,175 | 99,200 | 63,511 | 66,225 | |||||
Bank owned life insurance | 330,155 | 328,736 | 326,689 | 269,144 | 267,820 | |||||
OREO | 5,092 | 6,558 | 5,881 | 5,981 | 2,909 | |||||
Deferred income tax asset, net | 28,786 | 37,921 | 44,637 | 38,030 | 51,462 | |||||
Other assets | 482,788 | 591,279 | 422,081 | 289,210 | 264,454 | |||||
Total Assets | $17,142,025 | $17,420,376 | $17,036,597 | $12,587,637 | $12,337,588 | |||||
Liabilities and Equity | ||||||||||
Deposits: | ||||||||||
Non-interest bearing | $3,929,183 | $4,081,078 | $3,990,883 | $3,152,251 | $2,923,640 | |||||
Interest bearing | 2,613,933 | 2,430,149 | 2,493,870 | 1,813,028 | 1,811,006 | |||||
Total checking accounts | 6,543,116 | 6,511,227 | 6,484,753 | 4,965,279 | 4,734,646 | |||||
Money market accounts | 3,525,571 | 3,648,449 | 3,569,025 | 2,156,667 | 2,216,571 | |||||
Savings deposits | 811,150 | 780,052 | 725,124 | 703,949 | 704,159 | |||||
Time deposits | 2,256,555 | 2,423,335 | 2,433,183 | 1,921,130 | 1,821,960 | |||||
Total deposits | 13,136,392 | 13,363,063 | 13,212,085 | 9,747,025 | 9,477,336 | |||||
Federal funds purchased | 379,193 | 259,077 | 276,963 | 303,017 | 294,360 | |||||
Other borrowings | 325,484 | 423,662 | 310,595 | 302,534 | 451,187 | |||||
Other liabilities | 404,238 | 516,872 | 346,442 | 207,509 | 143,361 | |||||
Stockholders' equity: | ||||||||||
Common stockholders' equity | 2,896,718 | 2,857,702 | 2,878,377 | 2,027,552 | 1,971,344 | |||||
Noncontrolling interest | — | — | 12,135 | — | — | |||||
Total equity | 2,896,718 | 2,857,702 | 2,890,512 | 2,027,552 | 1,971,344 | |||||
Total Liabilities and Equity | $17,142,025 | $17,420,376 | $17,036,597 | $12,587,637 | $12,337,588 | |||||
SELECTED CONSOLIDATED FINANCIAL DATA | |||||||||||||||
The table below summarizes selected financial data for the periods presented. | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||
Selected financial data | |||||||||||||||
Return on average assets (annualized) | 1.63% | 1.27% | 1.30% | 1.47% | 1.64% | 1.42% | 1.43% | ||||||||
Adjusted return on average assets (annualized) (Non-GAAP) (1) | 1.66% | 1.57% | 1.59% | 1.63% | 1.68% | 1.61% | 1.67% | ||||||||
Return on average common equity (annualized) | 9.80% | 7.56% | 7.63% | 9.05% | 10.38% | 8.47% | 9.41% | ||||||||
Adjusted return on average common equity (annualized) (Non-GAAP) (1) | 9.95% | 9.34% | 9.31% | 10.03% | 10.64% | 9.63% | 10.98% | ||||||||
Return on average tangible equity (annualized) (Non-GAAP) (1) | 18.77% | 14.61% | 14.95% | 16.80% | 19.78% | 16.25% | 17.68% | ||||||||
Adjusted return on average tangible equity (annualized) (Non-GAAP) (1) | 19.05% | 17.85% | 18.04% | 18.54% | 20.25% | 18.36% | 20.49% | ||||||||
Efficiency ratio (tax equivalent) (Non-GAAP) (1) | 54.3% | 62.3% | 61.9% | 58.7% | 53.4% | 59.3% | 60.0% | ||||||||
Adjusted efficiency ratio, tax equivalent (Non-GAAP) (1) | 52.1% | 51.9% | 51.7% | 52.3% | 50.3% | 51.9% | 51.4% | ||||||||
Dividend payout | 19.6% | 25.6% | 26.2% | 23.9% | 19.2% | 23.5% | 22.7% | ||||||||
Loan / deposit ratio | 91.2% | 89.2% | 88.7% | 85.7% | 88.0% | ||||||||||
Common stockholders' equity (to total assets) | 16.9% | 16.4% | 16.9% | 16.1% | 16.0% | ||||||||||
Common equity per common share | $23.14 | $22.67 | $22.31 | $21.14 | $20.60 | ||||||||||
Common tangible equity per common share (Non-GAAP) (1) | $12.76 | $12.32 | $12.17 | $12.08 | $11.49 | ||||||||||
Common tangible equity (to total tangible assets) (Non-GAAP) (1) | 10.1% | 9.6% | 10.0% | 9.9% | 9.6% | ||||||||||
Tier 1 capital (to average assets) | 9.7% | 9.5% | 9.9% | 10.3% | 10.1% | ||||||||||
(1) | See reconciliation tables starting on page 9, Explanation of Certain Unaudited Non-GAAP Financial Measures. |
ESTIMATED IMPACT OF ADOPTION OF CURRENT EXPECTED CREDIT LOSSES ("CECL")
The Company continues to evaluate the impact of the adoption of CECL. Based on the most recent analysis, the Company expects the Allowance for Loan Losses ("ALLL") as a percentage of total loans to increase in the range of 50 bps to 70 bps, as a result of the adoption of CECL. This increase includes the reclassification of the credit mark on Purchased Credit Deteriorated ("PCD") loans from loan discount to Allowance for Credit Losses ("ACL"). In addition, the Company estimates a reserve for potential losses on unfunded commitments to be in the range of $5 to $10 million, which will be recorded as a liability. Based on these ranges, the impact to retained earnings, net of deferred taxes, for the increase in ACL, reserve for the unfunded commitments and expected credit losses on debt securities is estimated to be in the range of $35 to $60 million, resulting in a range of 20 bps to 35 bps reduction in tangible common equity as a percentage of total tangible assets. The estimates on the potential impact of the adoption of CECL on the Company's financial statements are based on ongoing analyses, current expectations and forecasted economic conditions. These estimates are contingent upon continued refinement of assumptions, methodologies and judgments, which the Company will finalize in the first quarter 2020.
LOAN PORTFOLIO | ||||||||||
The table below summarizes the Company's loan portfolio over the most recent five-quarter ends. | ||||||||||
Ending Balance | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||||
Real estate loans | ||||||||||
Residential | $2,558,339 | $2,530,119 | $2,536,324 | $1,818,228 | $1,760,918 | |||||
Commercial | 6,406,684 | 6,297,425 | 6,153,379 | 4,481,375 | 4,541,434 | |||||
Land, development and construction loans | 1,004,578 | 1,061,701 | 1,057,532 | 658,373 | 642,590 | |||||
Total real estate loans | 9,969,601 | 9,889,245 | 9,747,235 | 6,957,976 | 6,944,942 | |||||
Commercial loans | 1,762,416 | 1,772,266 | 1,714,121 | 1,181,628 | 1,188,974 | |||||
Consumer and other loans | 247,407 | 250,225 | 247,049 | 206,754 | 203,895 | |||||
Total loans before unearned fees and costs | 11,979,424 | 11,911,736 | 11,708,405 | 8,346,358 | 8,337,811 | |||||
Unearned fees and costs | 4,519 | 4,670 | 4,356 | 3,037 | 2,693 | |||||
Total Loans | $11,983,943 | $11,916,406 | $11,712,761 | $8,349,395 | $8,340,504 | |||||
DEPOSITS | ||||||||||
Ending Balance | ||||||||||
Deposit mix | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |||||
Checking accounts | ||||||||||
Non-interest bearing | $3,929,183 | $4,081,078 | $3,990,883 | $3,152,251 | $2,923,640 | |||||
Interest bearing | 2,613,933 | 2,430,149 | 2,493,870 | 1,813,028 | 1,811,006 | |||||
Savings deposits | 811,150 | 780,052 | 725,124 | 703,949 | 704,159 | |||||
Money market accounts | 3,525,571 | 3,648,449 | 3,569,025 | 2,156,667 | 2,216,571 | |||||
Time deposits | 2,256,555 | 2,423,335 | 2,433,183 | 1,921,130 | 1,821,960 | |||||
Total deposits | $13,136,392 | $13,363,063 | $13,212,085 | $9,747,025 | $9,477,336 | |||||
Non time deposits as percentage of total deposits | 83% | 82% | 82% | 80% | 81% | |||||
Time deposits as percentage of total deposits | 17% | 18% | 18% | 20% | 19% | |||||
Total deposits | 100% | 100% | 100% | 100% | 100% | |||||
NET INTEREST MARGIN
The Company's NIM increased 6 bps from 4.19% in the previous quarter to 4.25% during the current quarter, primarily as a result of higher accretion income due to an increase in payoffs on acquired loans and a decline in the cost of interest bearing liabilities due to Federal Reserve rate cuts and a reduction in LIBOR rates. The tax equivalent yield on the originated loan portfolio decreased by 24 bps from the prior quarter to 4.85%. The tax equivalent yield on the securities portfolio decreased by 7 bps from 2.74% in the prior quarter to 2.67% during the current quarter. The total decrease in yield for the tax equivalent originated loan and securities, however, was offset by an increase in fourth quarter 2019 loan accretion to $18,093, which increased NIM by 48 bps, as compared with the previous quarter's $13,569, which increased NIM by 36 bps. The NIM was positively impacted by a 71 bps decrease in the cost of federal funds purchased as well as a 7 bps decrease in the cost of total deposits, a result of the Company's focus on reducing the cost of rate-sensitive deposits.
The table below summarizes yields and costs by various interest earning asset and interest bearing liability account types for the current quarter, the previous calendar quarter and the same quarter last year.
Three Months Ended | ||||||||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||
Average Balance | Interest Inc/Exp | Average Rate | Average Balance | Interest Inc/Exp | Average Rate | Average Balance | Interest Inc/Exp | Average Rate | ||||||||||||
Originated loans (1) | $5,819,393 | $71,101 | 4.85% | $5,301,936 | $67,989 | 5.09% | $3,997,730 | $48,036 | 4.77% | |||||||||||
Acquired loans (1) | 6,115,107 | 88,716 | 5.76% | 6,482,939 | 91,127 | 5.58% | 4,170,721 | 59,720 | 5.68% | |||||||||||
PCI loans | 138,584 | 8,224 | 23.54% | 147,099 | 7,652 | 20.64% | 162,813 | 9,448 | 23.02% | |||||||||||
Taxable securities | 1,803,467 | 11,664 | 2.57% | 1,759,629 | 11,741 | 2.65% | 1,665,809 | 11,833 | 2.82% | |||||||||||
Tax-exempt securities (1) | 221,438 | 1,948 | 3.49% | 220,026 | 1,933 | 3.49% | 216,936 | 1,964 | 3.59% | |||||||||||
Fed funds sold and other | 681,768 | 2,783 | 1.62% | 790,635 | 3,974 | 1.99% | 343,049 | 1,911 | 2.21% | |||||||||||
Total interest earning assets (1) | $14,779,757 | $184,436 | 4.95% | $14,702,264 | $184,416 | 4.98% | $10,557,058 | $132,912 | 4.99% | |||||||||||
Non-interest earnings assets | 2,531,319 | 2,490,042 | 1,681,312 | |||||||||||||||||
Total assets | $17,311,076 | $17,192,306 | $12,238,370 | |||||||||||||||||
Interest bearing deposits | $9,207,290 | $22,275 | 0.96% | $9,166,386 | $24,464 | 1.06% | $6,456,452 | $12,360 | 0.76% | |||||||||||
Fed funds purchased | 304,489 | 1,330 | 1.73% | 289,821 | 1,781 | 2.44% | 235,696 | 1,499 | 2.52% | |||||||||||
Other borrowings | 310,436 | 1,829 | 2.34% | 367,481 | 2,191 | 2.37% | 326,337 | 1,993 | 2.42% | |||||||||||
Corporate debentures | 32,711 | 513 | 6.22% | 32,622 | 542 | 6.59% | 39,816 | 647 | 6.45% | |||||||||||
Total interest bearing liabilities | $9,854,926 | $25,947 | 1.04% | $9,856,310 | $28,978 | 1.17% | $7,058,301 | $16,499 | 0.93% | |||||||||||
Non-interest bearing deposits | 4,081,634 | 4,004,554 | 3,091,289 | |||||||||||||||||
All other liabilities | 494,914 | 429,109 | 153,628 | |||||||||||||||||
Total equity | 2,879,602 | 2,902,333 | 1,935,152 | |||||||||||||||||
Total liabilities and equity | $17,311,076 | $17,192,306 | $12,238,370 | |||||||||||||||||
Net Interest Spread (1) | 3.91% | 3.81% | 4.06% | |||||||||||||||||
Net Interest Margin (1) | 4.25% | 4.19% | 4.37% | |||||||||||||||||
Cost of Total Deposits | 0.67% | 0.74% | 0.51% | |||||||||||||||||
(1) | Tax equivalent yield (Non-GAAP); see reconciliation tables starting on page 9, Explanation of Certain Unaudited Non-GAAP Financial Measures. |
The table below summarizes accretion income for the periods presented.
Three Months Ended | Twelve Months | |||||||||||||
Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||
PCI accretion | $5,908 | $5,418 | $5,248 | $7,904 | $7,187 | $24,478 | $26,381 | |||||||
Non-PCI accretion | 12,185 | 8,151 | 10,335 | 4,951 | 6,177 | 35,622 | 22,390 | |||||||
Total loan accretion | $18,093 | $13,569 | $15,583 | $12,855 | $13,364 | $60,100 | $48,771 | |||||||
The table below compares the unpaid principal balance and the carrying balance (book balance) of the Company's total Acquired and PCI loans at December 31, 2019.
Principal Balance | Carrying Balance | Total Loan Discount |
Percentage | ||||||
Acquired Loans | $5,977,548 | $5,925,596 | ($51,952) | 0.9% | |||||
PCI loans | 196,409 | 135,468 | (60,941) | (1) | 31.0% | ||||
Total purchased loans | $6,173,957 | $6,061,064 | ($112,893) | 1.8% |
(1) | Represents a credit discount of $18,109 and a non-credit discount of $42,832. |
NON-INTEREST INCOME
Non-interest income increased $1,841 to $50,329 during the current quarter compared to $48,488 in the previous quarter. The increase is mainly attributable to an increase in correspondent banking revenue due to higher interest rate swap revenue in the correspondent banking division and an increase in SBA revenue, offset by approximately $841 decrease in merchant card related fees primarily due to the impact of the Durbin Amendment. The table below summarizes the Company's non-interest income for the periods indicated.
Condensed Consolidated Non-Interest Income (unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||
Correspondent banking revenue | $23,346 | $21,018 | $11,534 | $9,000 | $9,893 | $64,898 | $33,388 | ||||||||
Mortgage banking revenue | 9,113 | 9,444 | 6,803 | 4,193 | 4,204 | 29,553 | 12,610 | ||||||||
SBA revenue | 1,785 | 1,411 | 1,252 | 688 | 497 | 5,136 | 3,532 | ||||||||
Wealth management related revenue | 878 | 801 | 875 | 607 | 725 | 3,161 | 2,657 | ||||||||
Service charges on deposit accounts | 7,993 | 7,990 | 7,507 | 6,678 | 7,349 | 30,168 | 22,831 | ||||||||
Debit, prepaid, ATM and merchant card related fees | 3,082 | 3,923 | 6,376 | 5,018 | 5,149 | 18,399 | 16,243 | ||||||||
Other non-interest income | 4,119 | 3,901 | 3,601 | 3,099 | 4,579 | 14,720 | 13,277 | ||||||||
Subtotal | $50,316 | $48,488 | $37,948 | $29,283 | $32,396 | $166,035 | $104,538 | ||||||||
Gain (loss) on sale of securities available for sale | 13 | — | (5) | 17 | — | 25 | (22) | ||||||||
Gain on sale of deposits | — | — | — | — | — | — | 611 | ||||||||
Total Non-Interest Income | $50,329 | $48,488 | $37,943 | $29,300 | $32,396 | $166,060 | $105,127 | ||||||||
Note: | Certain prior period amounts have been reclassified to conform to the current period presentation format. |
NON-INTEREST EXPENSES
Excluding merger-related expenses, non-interest expense increased $3,208 in the fourth quarter to $113,250 compared to the previous quarter, primarily driven by higher compensation expense associated with performance in the correspondent banking division and the Company's overall performance, higher professional fees and an overall higher intangible and fixed assets related expenses. The table below summarizes the Company's non-interest expense for the periods indicated.
Condensed Consolidated Non-Interest Expense (unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Dec. 31, 2019 | Dec. 31, 2018 | |||||||||
Salaries, wages and employee benefits | $72,973 | $71,352 | $67,516 | $48,393 | $48,044 | $260,234 | $172,318 | ||||||||
Occupancy expense | 7,267 | 7,729 | 7,752 | 5,602 | 5,633 | 28,350 | 20,897 | ||||||||
Depreciation of premises and equipment | 4,151 | 3,887 | 3,550 | 2,850 | 2,752 | 14,438 | 9,788 | ||||||||
Marketing expenses | 1,958 | 1,765 | 1,797 | 2,020 | 1,903 | 7,540 | 6,235 | ||||||||
Data processing expenses | 5,242 | 5,182 | 5,525 | 3,656 | 3,621 | 19,605 | 14,308 | ||||||||
Legal, auditing and other professional fees | 2,958 | 2,364 | 2,106 | 1,442 | 2,599 | 8,870 | 6,163 | ||||||||
Bank regulatory related expenses | 723 | 635 | 2,074 | 1,616 | 1,299 | 5,048 | 4,885 | ||||||||
Debit, ATM and merchant card related expenses | 1,362 | 1,382 | 1,304 | 1,453 | 1,657 | 5,501 | 4,253 | ||||||||
Credit related expenses | 879 | 795 | 760 | 729 | 165 | 3,163 | 1,502 | ||||||||
Amortization of intangibles | 4,552 | 4,229 | 4,435 | 2,814 | 2,989 | 16,030 | 10,018 | ||||||||
Impairment on bank property held for sale | 808 | 506 | 315 | 107 | 80 | 1,736 | 2,667 | ||||||||
Other expenses | 10,377 | 10,216 | 9,116 | 7,426 | 7,110 | 37,135 | 24,521 | ||||||||
Subtotal | $113,250 | $110,042 | $106,250 | $78,108 | $77,852 | $407,650 | $277,555 | ||||||||
Merger-related expenses | 159 | 16,994 | 15,739 | 6,365 | 1,668 | 39,257 | 34,912 | ||||||||
Total Non-Interest Expense | $113,409 | $127,036 | $121,989 | $84,473 | $79,520 | $446,907 | $312,467 | ||||||||
Note: | Certain prior period amounts have been reclassified to conform to the current period presentation format. |
CREDIT QUALITY AND ALLOWANCE FOR LOAN LOSSES
Non-performing assets ("NPAs") totaled $43,870 at December 31, 2019, compared to $46,337 at September 30, 2019. NPAs as a percentage of total assets decreased to 0.26% at December 31, 2019, compared to 0.27% at September 30, 2019 and compared to 0.22% at December 31, 2018.
The table below summarizes selected credit quality data for the periods indicated.
Ending Balance | |||||||||||||||
Non-Performing Assets (1) | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||||||||
Non-accrual loans | $36,916 | $39,048 | $26,334 | $35,181 | $23,567 | ||||||||||
Past due loans 90 days or more and still accruing interest |
1,692 |
473 |
— |
— |
— | ||||||||||
Total non-performing loans ("NPLs") | 38,608 | 39,521 | 26,334 | 35,181 | 23,567 | ||||||||||
Other real estate owned ("OREO") | 5,092 | 6,558 | 5,881 | 5,981 | 2,909 | ||||||||||
Repossessed assets other than real estate | 170 | 258 | 236 | 313 | 350 | ||||||||||
Total non-performing assets | $43,870 | $46,337 | $32,451 | $41,475 | $26,826 | ||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Asset Quality Ratios (1) | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | ||||||||
Non-performing loans as percentage of total loans | 0.33% | 0.34% | 0.23% | 0.43% | 0.29% | ||||||||||
Non-performing assets as percentage of total assets | 0.26% | 0.27% | 0.19% | 0.33% | 0.22% | ||||||||||
Non-performing assets as percentage of loans and OREO plus other repossessed assets |
0.37% |
0.39% |
0.28% |
0.51% |
0.33% | ||||||||||
Loans past due 30 thru 89 days and accruing interest as a percentage of total loans | 0.48% |
0.52% |
0.44% |
0.42% |
0.45% | ||||||||||
Allowance for loan losses as percentage of NPLs | 105% | 106% | 154% | 113% | 168% | ||||||||||
Net charge-offs | $4,384 | $2,354 | $2,191 | $771 | $1,131 | $9,700 | $1,403 | ||||||||
Net charge-offs as a percentage of average loans for the period on an annualized basis |
0.15% |
0.08% |
0.08% |
0.04% |
0.05% |
0.09% |
0.02% | ||||||||
(1) | Excludes PCI loans. |
The ALLL totaled $40,655 at December 31, 2019, compared to $41,991 at September 30, 2019, a decrease of $1,336 due to loan loss provision expense of $3,048 and net charge-offs of $4,384. Of the fourth quarter charge-offs, $2,010 represented specific reserve allocations that had been identified and reserved in prior periods. The changes in the Company's ALLL components between December 31 and September 30, 2019 are summarized in the table below (unaudited).
December 31, 2019 | September 30, 2019 | Increase (Decrease) | ||||||||||
Loan Balance | ALLL Balance |
% | Loan Balance | ALLL Balance | % | Loan Balance | ALLL Balance | |||||
Originated loans | $5,907,801 | $37,151 | 0.63% | $5,479,813 | $36,921 | 0.67% | $427,988 | $230 | (4) bps | |||
Impaired originated loans | 15,078 | 842 | 5.58% | 14,925 | 1,204 | 8.07% | 153 | (362) | (249) bps | |||
Total originated loans | 5,922,879 | 37,993 | 0.64% | 5,494,738 | 38,125 | 0.69% | 428,141 | (132) | (5) bps | |||
Acquired loans (1) | 5,914,534 | 1,400 | 0.02% | 6,263,910 | 1,538 | 0.02% | (349,376) | (138) | – bps | |||
Impaired acquired loans (2) | 11,062 | 1,036 | 9.37% | 14,776 | 2,095 | 14.18% | (3,714) | (1,059) | (481) bps | |||
Total acquired loans | 5,925,596 | 2,436 | 0.04% | 6,278,686 | 3,633 | 0.06% | (353,090) | (1,197) | (2) bps | |||
Total non-PCI loans | 11,848,475 | 40,429 | 11,773,424 | 41,758 | 75,051 | (1,329) | ||||||
PCI loans | 135,468 | 226 | 142,982 | 233 | (7,514) | (7) | ||||||
Total loans | $11,983,943 | $40,655 | $11,916,406 | $41,991 | $67,537 | $(1,336) | ||||||
(1) | Performing acquired loans recorded at estimated fair value on the related acquisition dates. The total net unamortized fair value adjustment at December 31, 2019 was approximately $51,855 or 0.87% of the aggregate outstanding related loan balances. |
(2) | These are loans that were acquired as performing loans that subsequently became impaired. |
EXPLANATION OF CERTAIN UNAUDITED NON-GAAP FINANCIAL MEASURES
This press release contains financial information determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP"), including adjusted net income, adjusted net income per share diluted, adjusted return on average assets, adjusted return on average equity, return on average tangible equity, adjusted return on average tangible equity, adjusted efficiency ratio, adjusted non-interest income, adjusted non-interest expense, adjusted net-interest income, tangible common equity, tangible common equity to tangible assets, common tangible equity per common share, tax equivalent yields on loans, securities and earning assets, and tax equivalent net interest spread and margin, which we refer to "Non-GAAP financial measures." The tables below provide reconciliations between these Non-GAAP measures and net income, interest income, net interest income and tax equivalent basis interest income and net interest income, return on average assets, return on average equity, the efficiency ratio, total stockholders' equity and tangible common equity, as applicable.
Management uses these Non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and enhance investors' understanding of the Company's core business and performance without the impact of merger-related expenses. Accordingly, management believes it is appropriate to exclude merger-related expenses because those costs are specific to each acquisition, vary based upon the size, complexity and other specifics of each acquisition, and are not indicative of the costs to operate the Company's core business.
Non-GAAP measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. The Company provides reconciliations between GAAP and these Non-GAAP measures. These disclosures should not be considered an alternative to GAAP.
Reconciliation of GAAP to non-GAAP Measures (unaudited): | |||||||||||||||
Three months ended | Twelve Months Ended | ||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |||||||||
Adjusted net income (Non-GAAP) | |||||||||||||||
Net income (GAAP) | $71,132 | $55,098 | $54,523 | $44,643 | $50,651 | $225,396 | $156,435 | ||||||||
(Gain) loss on sale of securities available for sale, net of tax | (10) | — | 4 | (13) | — | (19) | 17 | ||||||||
Gain on sale of deposits, net of tax | — | — | — | — | — | — | (465) | ||||||||
Merger-related expenses, net of tax | 122 | 12,939 | 11,962 | 4,833 | 1,262 | 29,856 | 26,584 | ||||||||
Deferred tax asset write down | 987 | — | — | — | — | 987 | — | ||||||||
Adjusted net income (Non-GAAP) | $72,231 | $68,037 | $66,489 | $49,463 | $51,913 | $256,220 | $182,571 | ||||||||
Adjusted net income per share - Diluted | |||||||||||||||
Earnings per share - Diluted (GAAP) | $0.56 | $0.43 | $0.42 | $0.46 | $0.52 | $1.87 | $1.76 | ||||||||
Effect to adjust for gain on sale of deposits, net of tax | — | — | — | — | — | — | (0.01) | ||||||||
Effect to adjust for merger-related expenses, net of tax | — | 0.10 | 0.09 | 0.05 | 0.02 | 0.25 | 0.31 | ||||||||
Effect to adjust for deferred tax asset write down | 0.01 | — | — | — | — | 0.01 | — | ||||||||
Adjusted net income per share - Diluted (Non-GAAP) | $0.57 | $0.53 | $0.51 | $0.51 | $0.54 | $2.13 | $2.06 | ||||||||
Adjusted return on average assets (Non-GAAP) | |||||||||||||||
Return on average assets (GAAP) | 1.63% | 1.27% | 1.30% | 1.47% | 1.64% | 1.42% | 1.43% | ||||||||
Effect to adjust for merger-related expenses, net of tax | — | 0.30% | 0.29% | 0.16% | 0.04% | 0.18% | 0.24% | ||||||||
Effect to adjust for deferred tax asset write down | 0.03% | — | — | — | — | 0.01% | — | ||||||||
Adjusted return on average assets (Non-GAAP) | 1.66% | 1.57% | 1.59% | 1.63% | 1.68% | 1.61% | 1.67% | ||||||||
Explanation of Certain Unaudited Non-GAAP Financial Measures (continued) | |||||||||||||||
Three months ended | Twelve Months Ended | ||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |||||||||
Adjusted return on average equity (Non-GAAP) | |||||||||||||||
Return on average equity (GAAP) | 9.80% | 7.56% | 7.63% | 9.05% | 10.38% | 8.47% | 9.41% | ||||||||
Effect to adjust for gain on sale of deposits, net of tax | — | — | — | — | — | — | (0.03%) | ||||||||
Effect to adjust for merger and acquisition related expenses, net of tax | 0.02% | 1.78% | 1.68% | 0.98% | 0.26% | 1.12% | 1.60% | ||||||||
Effect to adjust for deferred tax asset write down | 0.13% | — | — | — | — | 0.04% | — | ||||||||
Adjusted return on average equity (Non-GAAP) | 9.95% | 9.34% | 9.31% | 10.03% | 10.64% | 9.63% | 10.98% | ||||||||
Return on average tangible equity (non-GAAP) | |||||||||||||||
Net income (GAAP) | $71,132 | $55,098 | $54,523 | $44,643 | $50,651 | $225,396 | $156,435 | ||||||||
Amortization of intangibles, net of tax | 3,491 | 3,220 | 3,371 | 2,136 | 2,278 | 12,221 | 7,937 | ||||||||
Adjusted net income for average tangible equity (Non-GAAP) | $74,623 | $58,318 | $57,894 | $46,779 | $52,929 | $237,617 | $164,372 | ||||||||
Average stockholders' equity (GAAP) | $2,879,606 | $2,902,333 | $2,876,244 | $2,000,411 | $1,935,152 | $2,667,709 | $1,662,815 | ||||||||
Average noncontrolling interest | — | (11,723) | (11,844) | — | — | (5,909) | — | ||||||||
Average goodwill | (1,204,417) | (1,204,417) | (1,203,052) | (802,880) | (802,880) | (1,105,068) | (673,115) | ||||||||
Average core deposit intangible | (93,355) | (97,483) | (103,369) | (65,116) | (67,648) | (89,929) | (58,463) | ||||||||
Average other intangibles | (4,644) | (4,682) | (4,602) | (2,934) | (2,947) | (4,222) | (1,504) | ||||||||
Average tangible equity (Non-GAAP) | $1,577,190 | $1,584,028 | $1,553,377 | $1,129,481 | $1,061,677 | $1,462,581 | $929,733 | ||||||||
Return on average tangible equity (annualized) (Non-GAAP) | 18.77% | 14.61% | 14.95% | 16.80% | 19.78% | 16.25% | 17.68% | ||||||||
Adjusted return on average tangible equity (non-GAAP) | |||||||||||||||
Return on average tangible equity (Non-GAAP) | 18.77% | 14.61% | 14.95% | 16.80% | 19.78% | 16.25% | 17.68% | ||||||||
Effect to adjust for gain on sale of deposits, net of tax | — | — | — | — | — | — | (0.05%) | ||||||||
Effect to adjust for merger-related expenses, net of tax | 0.03% | 3.24% | 3.09% | 1.74% | 0.47% | 2.04% | 2.86% | ||||||||
Effect to adjust for deferred tax asset write down | 0.25% | — | — | — | — | 0.07% | — | ||||||||
Adjusted return on average tangible equity (Non-GAAP) | 19.05% | 17.85% | 18.04% | 18.54% | 20.25% | 18.36% | 20.49% | ||||||||
Efficiency ratio (tax equivalent) (Non-GAAP) | |||||||||||||||
Non-interest income (GAAP) | $50,329 | $48,488 | $37,943 | $29,300 | $32,396 | $166,060 | $105,127 | ||||||||
Gain on sale of deposits | — | — | — | — | — | — | (611) | ||||||||
Adjusted non-interest income (Non-GAAP) | $50,329 | $48,488 | $37,943 | $29,300 | $32,396 | $166,060 | $104,516 | ||||||||
Net interest income before provision (GAAP) | $157,925 | $154,947 | $158,681 | $114,175 | $115,682 | $585,728 | $413,082 | ||||||||
Total tax equivalent adjustment | 564 | 491 | 495 | 547 | 731 | 2,063 | 2,521 | ||||||||
Adjusted net interest income (Non-GAAP) | $158,489 | $155,438 | $159,176 | $114,722 | $116,413 | $587,791 | $415,603 | ||||||||
Non-interest expense (GAAP) | $113,409 | $127,036 | $121,989 | $84,473 | $79,520 | $446,907 | $312,467 | ||||||||
Amortization of intangibles | (4,552) | (4,229) | (4,435) | (2,814) | (2,989) | (16,030) | (10,018) | ||||||||
Merger and acquisition related expenses | (159) | (16,994) | (15,739) | (6,365) | (1,668) | (39,257) | (34,912) | ||||||||
Adjusted non-interest expense (Non-GAAP) | $108,698 | $105,813 | $101,815 | $75,294 | $74,863 | $391,620 | $267,537 | ||||||||
Efficiency ratio (tax equivalent) (Non-GAAP) | 54.3% | 62.3% | 61.9% | 58.7% | 53.4% | 59.3% | 60.0% | ||||||||
Adjusted efficiency ratio, tax equivalent (Non-GAAP) | 52.1% | 51.9% | 51.7% | 52.3% | 50.3% | 51.9% | 51.4% | ||||||||
Explanation of Certain Unaudited Non-GAAP Financial Measures (continued) | ||||||||||
Ending Balance | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||||
Tangible common equity (Non-GAAP) | ||||||||||
Total common stockholders' equity (GAAP) | $2,896,718 | $2,857,702 | $2,878,377 | $2,027,552 | $1,971,344 | |||||
Goodwill | (1,204,417) | (1,204,417) | (1,204,417) | (802,880) | (802,880) | |||||
Core deposit intangible | (91,157) | (95,175) | (99,200) | (63,511) | (66,225) | |||||
Other intangibles | (4,507) | (4,700) | (4,620) | (2,996) | (2,953) | |||||
Common tangible equity (Non-GAAP) | $1,596,637 | $1,553,410 | $1,570,140 | $1,158,165 | $1,099,286 | |||||
Total assets (GAAP) | $17,142,025 | $17,420,376 | $17,036,597 | $12,587,637 | $12,337,588 | |||||
Goodwill | (1,204,417) | (1,204,417) | (1,204,417) | (802,880) | (802,880) | |||||
Core deposit intangible | (91,157) | (95,175) | (99,200) | (63,511) | (66,225) | |||||
Other intangibles | (4,507) | (4,700) | (4,620) | (2,996) | (2,953) | |||||
Total tangible assets (Non-GAAP) | $15,841,944 | $16,116,084 | $15,728,360 | $11,718,250 | $11,465,530 | |||||
Common tangible equity to tangible assets (Non-GAAP) | 10.1% | 9.6% | 10.0% | 9.9% | 9.6% | |||||
Common tangible equity per common share (Non-GAAP) | $12.76 | $12.32 | $12.17 | $12.08 | $11.49 | |||||
Three months ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | ||||||||
Tax equivalent yields (Non-GAAP) | ||||||||||
Originated loans | $70,784 | $67,723 | $47,624 | |||||||
Acquired loans | 88,677 | 91,104 | 59,682 | |||||||
PCI loans | 8,224 | 7,652 | 9,448 | |||||||
Taxable securities | 11,665 | 11,740 | 11,834 | |||||||
Tax-exempt securities | 1,739 | 1,732 | 1,682 | |||||||
Fed funds sold and other | 2,783 | 3,974 | 1,911 | |||||||
Interest income (GAAP) | $183,872 | $183,925 | $132,181 | |||||||
Tax equivalent adjustment for originated loans | 316 | 266 | 411 | |||||||
Tax equivalent adjustment for acquired loans | 39 | 23 | 38 | |||||||
Tax equivalent adjustment for tax-exempt securities | 209 | 202 | 282 | |||||||
Tax equivalent adjustments | 564 | 491 | 731 | |||||||
Interest income (tax equivalent) (Non-GAAP) | $184,436 | $184,416 | $132,912 | |||||||
Net interest income (GAAP) | $157,925 | $154,947 | $115,682 | |||||||
Tax equivalent adjustments | 564 | 491 | 731 | |||||||
Net interest income (tax equivalent) (Non-GAAP) | $158,489 | $155,438 | $116,413 | |||||||
Yield on originated loans | 4.83% | 5.07% | 4.73% | |||||||
Effect from tax equivalent adjustment | 0.02% | 0.02% | 0.04% | |||||||
Yield on originated loans - tax equivalent (Non-GAAP) | 4.85% | 5.09% | 4.77% | |||||||
Yield on acquired loans | 5.76% | 5.58% | 5.68% | |||||||
Effect from tax equivalent adjustment | — | — | — | |||||||
Yield on acquired loans - tax equivalent (Non-GAAP) | 5.76% | 5.58% | 5.68% | |||||||
Yield on tax exempted securities | 3.12% | 3.12% | 3.07% | |||||||
Effect from tax equivalent adjustment | 0.37% | 0.37% | 0.52% | |||||||
Yield on tax exempted securities - tax equivalent (Non-GAAP) | 3.49% | 3.49% | 3.59% | |||||||
Yield on interest earning assets (GAAP) | 4.94% | 4.96% | 4.96% | |||||||
Effect from tax equivalent adjustments | 0.01% | 0.02% | 0.03% | |||||||
Yield on interest earning assets - tax equivalent (Non-GAAP) | 4.95% | 4.98% | 4.99% | |||||||
Net interest spread (GAAP) | 3.90% | 3.79% | 4.03% | |||||||
Effect for tax equivalent adjustments | 0.01% | 0.02% | 0.03% | |||||||
Net interest spread (Non-GAAP) | 3.91% | 3.81% | 4.06% | |||||||
Net interest margin (GAAP) | 4.24% | 4.18% | 4.35% | |||||||
Effect from tax equivalent adjustments | 0.01% | 0.01% | 0.02% | |||||||
Net interest margin - tax equivalent (Non-GAAP) | 4.25% | 4.19% | 4.37% | |||||||
Net interest margin - tax equivalent (Non-GAAP) | 4.25% | 4.19% | 4.37% | |||||||
Effect of loan accretion | (0.48%) | (0.36%) | (0.50%) | |||||||
Net interest margin excluding loan accretion (Non-GAAP) | 3.77% | 3.83% | 3.87% | |||||||
About CenterState Bank Corporation
CenterState operates as one of the leading Southeastern regional bank franchises headquartered in the state of Florida. Both CenterState and its nationally chartered bank subsidiary, CenterState Bank, N.A. (the "Bank"), are based in Winter Haven, Florida, between Orlando and Tampa. With over $17 billion in assets, the Bank provides traditional retail, commercial, mortgage, wealth management and SBA services throughout its Florida, Georgia and Alabama branch network and customer relationships in neighboring states. The Bank also has a national footprint, serving clients coast to coast through its correspondent banking division.
For additional information contact John C. Corbett (CEO), Stephen D. Young (COO) or William E. Matthews (CFO) at 863-293-4710.
Forward Looking Statements
Information in this press release, other than statements of historical facts, may constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, CenterState's plans, objectives, expectations and intentions, and other statements that are not historical facts. Forward-looking statements may be identified by terminology such as "may," "will," "should," "scheduled," "plans," "intends," "anticipates," "expects," "believes," estimates," "potential," or "continue" or negative of such terms or other comparable terminology. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance or achievements of CenterState to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others, the impact on failing to implement our business strategy, including our growth and acquisition strategy, including the merger with NCOM and its integration; the ability to successfully integrate our acquisitions, including that of NCOM; additional capital requirements due to our growth plans; the impact of an increase in our asset size to over $10 billion; the risks of changes in interest rates and the level and composition of deposits; loan demand, the credit and other risks in our loan portfolio and the values of loan collateral; the impact of us not being able to manage our risk; the impact on a loss of management or other experienced employees; the impact if we failed to maintain our culture and attract and retain skilled people; the risk of changes in technology and customer preferences; the impact of any material failure or breach in our infrastructure or the infrastructure of third parties on which we rely including as a result of cyber-attacks; or material regulatory liability in areas such as BSA or consumer protection; or other areas of legal or other liability as a result of law suits, other legal proceedings, or information-gathering requests, investigations and other proceedings by government and self-regulatory agencies, reputational risks from such failures or liabilities or other events; legislative and regulatory changes; general competitive, political, legal, economic and market conditions and developments; financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; weather, natural disasters and other catastrophic events that may or may not be caused by climate change; and other factors discussed in our filings with the Securities and Exchange Commission under the Exchange Act. Additional factors that could cause results to differ materially from those contemplated by forward-looking statements can be found in CenterState's Annual Report on Form 10-K for the year ended December 31, 2018, and otherwise in our SEC reports and filings, which are available in the "Investor Relations" section of CenterState's website, http://www.centerstatebanks.com. Forward-looking statements speak only as of the date they are made. You should not expect us to update any forward-looking statements.
SOURCE CenterState Bank Corporation
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