Commonwealth Business Bank ("CBB" or the "Bank") CWBB today announced net income of $3.6 million for the first quarter of 2017, compared to $3.4 million for the prior quarter and $3.1 million for the first quarter of 2016. Diluted earnings per share were $0.38 for the first quarter of 2017, compared to $0.37 for the preceding quarter and $0.34 for the year ago quarter.
"Our first quarter financial performance reflects our efforts to grow our balance sheet and that we are well-positioned should interest rates rise or remain flat," said Joanne Kim, President and CEO. "In order to expand our deposit customer base to support growth, we relocated our Dallas branch to a new customer accessible facility which will house our full-service branch and SBA Region II administrative offices, and we will be opening a branch in each of the Dallas and Los Angeles markets in the second quarter," added Ms. Kim.
RESULTS OF OPERATIONS
| Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | |||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | |||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||
| Net income | $ | 3,559 | $ | 3,440 | 3.5 | % | $ | 3,103 | 14.7 | % | |||||||||
| Net income per diluted common share | $ | 0.38 | $ | 0.37 | 2.7 | % | $ | 0.34 | ¹ | 11.8 | % | ||||||||
| Return on average assets | 1.60 | % | 1.53 | % | 4.6 | % | 1.62 | % | (1.2 | %) | |||||||||
| Return on average equity | 13.85 | % | 13.58 | % | 2.0 | % | 13.53 | % | 2.4 | % | |||||||||
| Noninterest income/average assets | 1.40 | % | 1.33 | % | 5.3 | % | 1.52 | % | (7.9 | %) | |||||||||
| Pre-tax, pre-provision earnings/average assets | 2.69 | % | 2.58 | % | 4.3 | % | 2.98 | % | (9.7 | %) | |||||||||
| Noninterest expense/average assets | 2.67 | % | 2.57 | % | 3.9 | % | 2.89 | % | (7.6 | %) | |||||||||
| Efficiency ratio | 49.79 | % | 49.93 | % | (0.3 | %) | 49.24 | % | 1.1 | % | |||||||||
| Net interest margin² | 4.14 | % | 3.94 | % | 5.1 | % | 4.46 | % | (7.2 | %) | |||||||||
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¹ Restated for 10% stock dividend to shareholders of record on May 16, 2016 |
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² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate |
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Net Interest Income and Net Interest Margin
Net interest income was $8.8 million for the first quarter of 2017, an increase of $207,000, or 2.4%, compared to $8.6 million for the prior quarter and an increase of $477,000, or 5.7%, compared to $8.3 million for the same quarter last year. The quarter-over-quarter increase was primarily due to a $243,000 increase in interest earned on loans and a $146,000 increase in interest earned on investment securities, which were partially offset by a $47,000 decrease in interest earned on deposits at the Federal Reserve Bank ("FRB") and other banks, a $108,000 decrease in dividend income, and a $21,000 increase in interest expense on deposits. The quarter-over-quarter increase in interest earned on loans was due to a $27.4 million increase in the average balance of loans and a 4 basis point increase in the yield on loans to 5.33% from 5.29%. The year-over-year quarterly increase was primarily due to a $292,000 increase in interest earned on loans and a $314,000 increase in interest earned on investment securities, which were partially offset by a $149,000 increase in interest expense on deposits. The year-over-year quarterly increase in interest earned on loans was primarily due to a $76.5 million increase in the average balance of loans, which was partially offset by a 38 basis point decrease in yield on loans to 5.33% from 5.71%.
The reported yield on our loan portfolio is impacted by a number of factors, including changes in the average contractual interest rate earned on the portfolio and the amount of discount accretion on SBA loans. The following table reconciles the contractual yield on our loan portfolio to the reported loan yields for the periods indicated.
| Three Months Ended | ||||||||||||||||||||||
| March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||||
| Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||
| Contractual yield | $ | 9,159 | 4.98 | % | $ | 8,705 | 4.82 | % | $ | 8,554 | 5.14 | % | ||||||||||
| SBA discount accretion | 688 | 0.37 | % | 792 | 0.44 | % | 751 | 0.45 | % | |||||||||||||
| Prepayment penalties & late fees | 77 | 0.05 | % | 140 | 0.08 | % | 200 | 0.12 | % | |||||||||||||
| Amortization of the net deferred costs | (137 | ) | (0.07 | %) | (93 | ) | (0.05 | %) | (10 | ) | - | |||||||||||
| Interest recognized on nonaccrual loans | - | - | - | - | - | - | ||||||||||||||||
| As reported yield on loans | $ | 9,787 | 5.33 | % | $ | 9,544 | 5.29 | % | $ | 9,495 | 5.71 | % | ||||||||||
The net interest margin was 4.14% for the current quarter, an increase of 20 basis points from 3.94% in the prior quarter and a decrease of 32 basis points from 4.46% in the year ago quarter. The quarter-over-quarter increase was primarily due to a 22 basis point increase in the yield on interest-earning assets to 4.85% from 4.63% for the prior quarter, which was partially offset by a 2 basis point increase in our cost of funds to 0.78% from 0.76% for the prior quarter. The year-over-year quarterly decrease was primarily due to a 35-basis point decrease in the yield on interest-earning assets from 5.20% in the year ago quarter, which was partially offset by a 4 basis point decrease in our cost of funds from 0.82% for the same period last year. The quarter-over-quarter increase in our cost of funds was due to a 2 basis point increase in the Bank's cost of deposits to 0.77% in the current quarter from 0.75% in the prior quarter and the year-over-year quarterly decrease in our cost of funds was due to a 4 basis point decrease in our cost of deposits from 0.81% in the same quarter last year.
Provision for Loan Losses
The Bank recorded no provision for loan losses for both in the first quarter of 2017 and the prior quarter and recorded a $400,000 provision for loan losses in the year ago quarter. There was no provision for loan losses in current quarter primarily due to reduced historical loss factors used in the allowance for loan loss calculations at March 31, 2017.
Noninterest Income
For the current quarter, noninterest income totaled $3.1 million, an increase of $100,000, or 3.3%, and an increase of $188,000, or 6.4%, from $3.0 million and $2.9 million in the prior and year ago quarters, respectively. The quarter-over-quarter increase was primarily due to a $30,000 increase in service charges on deposits, a $50,000 increase in SBA loan servicing fee income, a $55,000 increase in other income, and a $130,000 increase in gains on sales of OREO, which were partially offset by a $150,000 decrease in gains on sales of SBA loans. The quarter-over-quarter decrease in gains on sales of SBA loans was primarily due to a decrease in the amount of SBA loans sold, which was partially offset by an increase in the average premium received on the loans sold. The year-over-year quarterly increase was primarily due to a $129,000 increase in service charges on deposits, a $235,000 increase in SBA loan servicing fee income, a $58,000 increase in other income, and a $103,000 increase in gains on sales of OREO, which were partially offset by $346,000 decrease in gains on sales of SBA loans. The year-over-year decrease in gains on sales of SBA loans was primarily due to a decrease in the amount of SBA loans sold and a decrease in the average premium received on the loans sold.
As the following table indicates, during the first quarter of 2017, the Bank sold $27.8 million of SBA loans, compared to $31.2 million in the preceding quarter and $31.4 million in the same quarter last year. The quarterly average premium on sales of SBA loans for the current quarter was 9.24% compared to 9.17% in the prior quarter and 9.88% in the year ago quarter. The amount of SBA loan sales varies based on the volume of loans we originate, our liquidity needs and market conditions.
| Three Months Ended | ||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | ||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| SBA loans held-for-sale at beginning of the quarter | $ | 18,096 | $ | 11,525 | 57.0 | % | $ | 17,809 | 1.6 | % | ||||||||
| SBA loans originated/transferred from held-for- | ||||||||||||||||||
| investment during the quarter | 43,019 | 37,833 | 13.7 | % | 23,276 | 84.8 | % | |||||||||||
| SBA loans sold during the quarter | (27,774 | ) | (31,190 | ) | (11.0 | %) | (31,409 | ) | (11.6 | %) | ||||||||
| SBA loans principal payment, net of advance | (88 | ) | (72 | ) | 22.2 | % | (74 | ) | 18.9 | % | ||||||||
| SBA loans held-for-sale at end of the quarter | $ | 33,253 | $ | 18,096 | 83.8 | % | $ | 9,602 | 246.3 | % | ||||||||
| Gain on sale of SBA loans | $ | 1,978 | $ | 2,128 | (7.0 | %) | $ | 2,324 | (14.9 | %) | ||||||||
| Premium on sale (weighted average) | 9.24 | % | 9.17 | % | 0.8 | % | 9.88 | % | (6.5 | %) | ||||||||
| SBA loan production | $ | 57,579 |
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$ | 46,405 | 24.1 | % | $ | 41,334 | 39.3 | % | |||||||
Noninterest Expense
Noninterest expense for the first quarter of 2017 was $5.9 million, an increase of $136,000, or 2.3%, from $5.8 million in the prior quarter and an increase of $392,000, or 7.1%, from $5.5 million in the year ago quarter. The quarter-over-quarter increase was primarily due to a $253,000 increase in salaries and employee benefits, which were partially offset by a $33,000 decrease in marketing expense, and a $126,000 decrease in other expense. The year-over-year quarterly increase was primarily due to a $237,000 increase in salaries and employee benefits, a $72,000 increase in occupancy and equipment, a $45,000 increase in professional expense, and an $87,000 increase in other expense, which were partially offset by a $131,000 decrease in data processing expense. The decrease in data processing expense was due to the absence of core system conversion costs incurred during the year ago quarter. The year-over-year quarterly increase in salaries and employee benefits was primarily due to a 14 person increase in the average number of full time equivalent employees ("FTEs") to 144 during the current quarter from 130 during the year ago quarter.
| At or for the Three Months Ended | ||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | ||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| Salaries and benefits | $ | 4,015 | $ | 3,762 | 6.7 | % | $ | 3,778 | 6.3 | % | ||||||||
| FTE at end of period | 147 | 139 | 5.8 | % | 132 | 11.4 | % | |||||||||||
| Average FTE during the period | 144 | 138 | 4.3 | % | 130 | 10.8 | % | |||||||||||
| Salaries and benefit/average FTE¹ | $ | 113 | $ | 108 | 4.6 | % | $ | 117 | (3.4 | %) | ||||||||
| Salaries and benefit/average assets¹ | 1.81 | % | 1.67 | % | 8.4 | % | 1.97 | % | (8.1 | %) | ||||||||
| Noninterest expense/average assets¹ | 2.67 | % | 2.57 | % | 3.9 | % | 2.89 | % | (7.6 | %) | ||||||||
| 1 Annualized | ||||||||||||||||||
Income Tax Expense
The income tax expense was $2.4 million for the quarter, or an effective tax rate of 40.50%, compared to $2.4 million, or an effective tax rate of 40.80%, for the prior quarter and $2.2 million, or an effective tax rate of 41.55%, for the year ago quarter.
Pre-Tax, Pre-Provision Income
For the first quarter of 2017, the Bank's pre-tax, pre-provision ("PTPP") income was $6.0 million, an increase of $171,000, or 2.9%, from $5.8 million for the prior quarter and an increase of $273,000, or 4.8%, from $5.7 million for the same quarter a year ago. Annualized PTPP income to average assets increased to 2.69% for the current quarter, compared to 2.58% for the prior quarter and decreased from 2.98% for the year ago quarter.
| Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | |||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| PTPP income | $ | 5,982 | $ | 5,811 | 2.9 | % | $ | 5,709 | 4.8 | % | |||||||||
| Average assets | $ | 901,145 | $ | 897,315 | 0.4 | % | $ | 770,840 | 16.9 | % | |||||||||
| Annualized PTPP/average assets | 2.69 | % | 2.58 | % | 4.3 | % | 2.98 | % | (9.7 | %) | |||||||||
| PTPP, excluding gain on sale of SBA loans | $ | 4,004 | $ | 3,683 | 8.7 | % | $ | 3,385 | 18.3 | % | |||||||||
BALANCE SHEET
At March 31, 2017, the Bank had total assets of $922.0 million, an increase of $8.8 million, or 1.0%, from $913.2 million at December 31, 2016 and an increase of $117.0 million, or 14.5%, from $805.0 million at March 31, 2016. Earning assets totaled $889.2 million at March 31, 2017, an increase of $4.0 million, or 0.5%, from $885.2 million at December 31, 2016, and an increase of $105.0 million, or 13.4%, from $784.2 million at March 31, 2016.
| March 31, | December 31, | % | March 31, | % | |||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | |||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||
| Assets | $ | 921,965 | $ | 913,194 | 1.0 | % | $ | 805,001 | 14.5 | % | |||||||||
| Earning assets | 889,190 | 885,167 | 0.5 | % | 784,150 | 13.4 | % | ||||||||||||
| Interest-earning deposits at FRB and other banks | 52,086 | 90,060 | (42.2 | %) | 106,899 | (51.3 | %) | ||||||||||||
| Investment securities | 73,412 | 75,232 | (2.4 | %) | 4,304 | 1605.7 | % | ||||||||||||
| Loans held-for-sale | 33,253 | 18,096 | 83.8 | % | 9,602 | 246.3 | % | ||||||||||||
| Loans receivable | 724,786 | 696,142 | 4.1 | % | 658,478 | 10.1 | % | ||||||||||||
| Deposits | 799,833 | 795,104 | 0.6 | % | 695,954 | 14.9 | % | ||||||||||||
| Tangible common equity/total assets | 11.48 | % | 11.17 | % | 2.8 | % | 11.62 | % | (1.2 | %) | |||||||||
| Tangible common equity per common share | $ | 11.63 | $ | 11.22 | 3.7 | % | $ | 10.44 | ¹ | 11.4 | % | ||||||||
| ¹ Restated for 10% stock dividend to shareholders of record on May 16, 2016 | |||||||||||||||||||
Interest-earning Deposits at the FRB and Other Banks
Interest-earning deposits at the FRB and other banks totaled $52.1 million at the current quarter-end, a decrease of $38.0 million, or 42.2%, compared to $90.1 million at the end of the prior quarter, and a decrease of $54.8 million, or 51.3%, compared to $106.9 million at the end of the year ago quarter.
Investment Securities
Investment securities totaled $73.4 million at the current quarter-end, a decrease of $1.8 million, or 2.4%, compared to $75.2 million at the end of the prior quarter, and an increase of $69.1 million compared to $4.3 million at the end of the year ago quarter. The year-over-year increase in investment securities was due to investing the Bank's excess liquidity into higher yielding investment securities.
Loans Receivable
The following table details loans by type at the dates indicated:
| March 31, | December 31, | % | March 31, | % | ||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| Construction | $ | 12,302 | $ | 12,252 | 0.4 | % | $ | 10,820 | 13.7 | % | ||||||||
| Commercial real estate | 581,697 | 563,970 | 3.1 | % | 507,294 | 14.7 | % | |||||||||||
| Commercial and industrial | 126,204 | 114,319 | 10.4 | % | 136,911 | (7.8 | %) | |||||||||||
| Consumer | 2,845 | 3,998 | (28.8 | %) | 2,082 | 36.7 | % | |||||||||||
| Gross loans | 723,049 | 694,539 | 4.1 | % | 657,107 | 10.0 | % | |||||||||||
| Net deferred loan costs | 1,737 | 1,603 | 8.4 | % | 1,371 | 26.7 | % | |||||||||||
| Gross loans, net | $ | 724,786 | $ | 696,142 | 4.1 | % | $ | 658,478 | 10.1 | % | ||||||||
| Loans held-for-sale | $ | 33,253 | $ | 18,096 | 83.8 | % | $ | 9,602 | 246.3 | % | ||||||||
| Gross loans, net, including loans held-for-sale | $ | 758,039 | $ | 714,238 | 6.1 | % | $ | 668,080 | 13.5 | % | ||||||||
| Loan-to-deposit (LTD) ratio: | 90.6 | % | 87.6 | % | 3.5 | % | 94.6 | % | (4.2 | %) | ||||||||
| LTD ratio including loans held-for-sale | 94.8 | % | 89.8 | % | 5.5 | % | 96.0 | % | (1.3 | %) | ||||||||
At March 31, 2017, gross loans, net, including loans held-for-sale were $758.0 million, an increase of $43.8 million, or 6.1%, from $714.2 million at December 31, 2016 and an increase of $90.0 million, or 13.5%, from $668.1 million at March 31, 2016. During the first quarter of 2017, total new loan production, including revolving lines of credit, was $111.2 million, compared to $69.5 million for the prior quarter and $82.9 million for the same quarter last year.
During the first quarter of 2017, $21.0 million of loans paid off compared to $17.1 million in the prior quarter and $30.5 million in year ago quarter. During the current quarter, we sold $27.8 million of SBA loans, compared to sales of $31.2 million in the prior quarter and sales of $31.4 million in the year ago quarter. In the current quarter, the Bank did not sell any non-SBA loans compared to $5.5 million in prior quarter and none in the year ago quarter.
Deposits
The following table details deposits by category at the dates indicated:
| March 31, 2017 | December 31, 2016 | % | March 31, 2016 | % | |||||||||||||||||||||||
| Balance | % | Balance | % | Change | Balance | % | Change | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 196,796 | 24.6 | % | $ | 197,210 | 24.8 | % | (0.2 | %) | $ | 156,022 | 22.4 | % | 26.1 | % | |||||||||||
| Money market & NOW | 168,206 | 21.0 | % | 169,309 | 21.3 | % | (0.7 | %) | 138,977 | 20.0 | % | 21.0 | % | ||||||||||||||
| Savings | 12,132 | 1.5 | % | 12,990 | 1.6 | % | (6.6 | %) | 9,277 | 1.3 | % | 30.8 | % | ||||||||||||||
| Time deposits | 422,699 | 52.8 | % | 415,595 | 52.3 | % | 1.7 | % | 391,678 | 56.3 | % | 7.9 | % | ||||||||||||||
| Total Deposits | $ | 799,833 | 100.0 | % | $ | 795,104 | 100.0 | % | 0.6 | % | $ | 695,954 | 100.0 | % | 14.9 | % | |||||||||||
| Cost of deposits | 0.77 | % | 0.75 | % | 0.81 | % | |||||||||||||||||||||
Total deposits were $799.8 million at the end of the current quarter, an increase of $4.7 million, or 0.6%, compared to $795.1 million at the end of the prior quarter and an increase of $103.9 million, or 14.9%, compared to $696.0 million at the end of the year ago quarter. Noninterest-bearing deposits decreased $414,000, or 0.2%, to $196.8 million at the end of the current quarter from $197.2 million at the end of the prior quarter and increased $40.8 million, or 26.1%, compared to $156.0 million at the end of the year ago quarter. Noninterest-bearing deposits to total deposits were 24.6%, 24.8% and 22.4% at the end of the current, prior and year ago quarters, respectively.
ASSET QUALITY
| March 31, | December 31, | % | March 31, | % | |||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
|
Delinquent Loans:¹ |
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| Loans 30-89 days past due | $ | 1,609 | $ | 309 | 420.7 | % | $ | 2,270 | (29.1 | %) | |||||||||
| 90 days or more past due and still accruing | - | - | - | - | - | ||||||||||||||
| Nonaccrual loans | 3,158 | 3,084 | 2.4 | % | 1,895 | 66.6 | % | ||||||||||||
| Delinquent loans | $ | 4,767 | $ | 3,393 | 40.5 | % | $ | 4,165 | 14.5 | % | |||||||||
|
Nonperforming Assets: |
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| 90 days or more past due and still accruing | $ | - | $ | - | - | $ | - | - | |||||||||||
| Nonaccrual loans ¹ | 3,158 | 3,084 | 2.4 | % | 1,895 | 66.6 | % | ||||||||||||
| Nonperforming loans | 3,158 | 3,084 | 2.4 | % | 1,895 | 66.6 | % | ||||||||||||
| Other real estate owned | - | 1,155 | (100.0 | %) | 1,155 | (100.0 | %) | ||||||||||||
| Nonperforming assets | $ | 3,158 | $ | 4,239 | (25.5 | %) | $ | 3,050 | 3.5 | % | |||||||||
| Nonaccrual loans to gross loans excluding LHFS | 0.44 | % | 0.44 | % | - | 0.29 | % | 51.7 | % | ||||||||||
| Nonperforming loans to gross loans excluding LHFS | 0.44 | % | 0.44 | % | - | 0.29 | % | 51.7 | % | ||||||||||
| Nonperforming assets to total assets | 0.34 | % | 0.46 | % | (26.1 | %) | 0.38 | % | (10.5 | %) | |||||||||
| Texas Ratio² | 2.77 | % | 3.84 | % | (27.9 | %) | 2.97 | % | (6.7 | %) | |||||||||
|
Classified Loans: ¹ |
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| Substandard | $ | 8,103 | $ | 8,125 | (0.3 | %) | $ | 8,346 | (2.9 | %) | |||||||||
| Doubtful | - | - | - | - | - | ||||||||||||||
| Loss | - | - | - | - | - | ||||||||||||||
| Classified loans | $ | 8,103 | $ | 8,125 | (0.3 | %) | $ | 8,346 | (2.9 | %) | |||||||||
| Classified assets to total assets | 0.88 | % | 0.89 | % | (1.1 | %) | 1.04 | % | (15.4 | %) | |||||||||
| Classified assets to Tier 1 and ALLL | 7.10 | % | 7.35 | % | (3.4 | %) | 8.14 | % | (12.8 | %) | |||||||||
|
Performing TDR loans: |
$ | 3,740 | $ | 3,806 | (1.7 | %) | $ | 4,282 | (12.7 | %) | |||||||||
|
Allowance for Loan Losses Items: |
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| Balance at beginning of period | $ | 8,456 | $ | 12,438 | (32.0 | %) | $ | 8,546 | (1.1 | %) | |||||||||
| Provision for loan losses | - | - | - | 400 | (100.0 | %) | |||||||||||||
| Charge-offs | 83 | 4,010 | (97.9 | %) | 18 | 361.1 | % | ||||||||||||
| Recoveries | 26 | 28 | (7.1 | %) | 98 | (73.5 | %) | ||||||||||||
| Balance at the end of period | $ | 8,399 | $ | 8,456 | (0.7 | %) | $ | 9,026 | (6.9 | %) | |||||||||
| ALLL to gross loans (exc. LHFS) | 1.16 | % | 1.21 | % | (4.1 | %) | 1.37 | % | (15.3 | %) | |||||||||
| ALLL to nonperforming loans | 265.96 | % | 274.19 | % | (3.0 | %) | 476.31 | % | (44.2 | %) | |||||||||
|
1 Net of SBA guaranteed balance |
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2 Nonperforming assets divided by tangible common equity and ALLL |
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Loans 30 to 89 days past due and on accrual status at the end of the current quarter were $1.6 million, an increase of $1.3 million from $309,000 at the end of the prior quarter, and a decrease of $661,000 from $2.3 million at the end of the same quarter last year. The quarter-over-quarter increase in loans 30 to 89 days past due was primarily due to one $922,000 loan on which we received all past due payments subsequent to quarter end. There were no loans 90 days or more past due and still accruing at the end of the current, prior and year ago quarters. Nonaccrual loans increased $74,000 to $3.2 million, or 0.44% of gross loans excluding loans held-for-sale, at the end of the current quarter from $3.1 million, or 0.44% of gross loans excluding loans held-for-sale, at the end of the prior quarter and increased $1.3 million from $1.9 million, or 0.29% of gross loans excluding loans held-for-sale, at the end of the year ago quarter.
Nonperforming loans at March 31, 2017 were $3.2 million, or 0.44% of gross loans excluding loans held-for-sale, a decrease of $74,000 compared to $3.1 million, or 0.44% of gross loans excluding loans held-for-sale, at the end of the prior quarter and an increase of $1.3 million from $1.9 million, or 0.29% of gross loans excluding loans held-for-sale, at the end of the same quarter last year.
The Bank did not have any other real estate owned at March 31, 2017, a decrease of $1.2 million compared to $1.2 million at the end of the prior and the year ago quarters.
Nonperforming assets at the end of current quarter were $3.2 million, or 0.34% of total assets, a decrease of $1.1 million compared to $4.2 million, or 0.46% of total assets, at December 31, 2016 and an increase of $108,000 from $3.1 million, or 0.38% of total assets, at March 31, 2016. The quarter-over-quarter decrease in nonperforming assets was due to the sale of a $1.2 million OREO.
The allowance for loan losses at March 31, 2017 was $8.4 million, or 1.16% of gross loans excluding loans held-for-sale, compared to $8.5 million, or 1.21% of gross loans excluding loans held-for-sale, at December 31, 2016, and $9.0 million, or 1.37% of gross loans excluding loans held-for-sale, at the end of the year ago quarter. The allowance for loan losses to nonperforming loans was 265.96%, 274.19%, and 476.31% at March 31, 2017, December 31, 2016, and March 31, 2016, respectively.
CAPITAL
At March 31, 2017, the Bank continued to exceed all regulatory capital requirements to be classified as a "well-capitalized" institution and maintained a capital conservation buffer in excess of the minimum required to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments. The minimum capital conservation buffer requirement was 1.250% and 0.625% in 2017 and 2016, respectively. The capital conservation buffer is calculated as the smallest excess of a bank's common equity tier 1, tier 1 risk-based and total risk-based capital ratios over the regulatory "adequately" capitalized minimum ratios of 4.50%, 6.00% and 8.00%, respectively. The minimum capital conservation buffer will increase an additional 0.625% at the beginning of 2018 and 2019, reaching the fully phased-in minimum of 2.500% in 2019. When the capital conservation buffer is fully phased-in in 2019, banks will be required to maintain common equity tier 1, tier 1 risk-based and total risk-based capital ratios that are at least 50 basis points greater than the well-capitalized minimums to avoid the aforementioned limitations on capital distributions. The Bank's regulatory capital ratios and capital conservation buffer at the dates indicated are summarized below:
| CBB Capital Ratios | ||||||||||||||||||
| Well-Capitalized | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||
| Minimum | 2017 | 2016 | 2016 | 2016 | 2016 | |||||||||||||
| Leverage ratio | 5.00 | % | 11.75 | % | 11.40 | % | 11.68 | % | 11.93 | % | 12.09 | % | ||||||
| Common equity tier 1 capital ratio | 6.50 | % | 13.58 | % | 13.70 | % | 13.25 | % | 13.17 | % | 13.61 | % | ||||||
| Tier 1 risk-based capital ratio | 8.00 | % | 13.58 | % | 13.70 | % | 13.25 | % | 13.17 | % | 13.61 | % | ||||||
| Total risk-based capital ratio | 10.00 | % | 14.76 | % | 14.95 | % | 14.51 | % | 14.42 | % | 14.87 | % | ||||||
| Capital Conservation Buffer | ||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||||
| Minimum required capital conservation buffer | 1.250 | % | 0.625 | % | 0.625 | % | 0.625 | % | 0.625 | % | ||||||||
| CBB capital conservation buffer | 6.764 | % | 6.953 | % | 6.512 | % | 6.424 | % | 6.870 | % | ||||||||
ABOUT COMMONWEALTH BUSINESS BANK ("CBB BANK")
Commonwealth Business Bank is a full-service commercial bank also doing business as "CBB Bank," and specializes in small-to medium-sized businesses. CBB has six full service branches in Los Angeles, Orange, and Dallas Counties and five loan production offices in Texas, Georgia, Colorado, and Washington.
For additional information, please visit CBB's website at www.cbb-bank.com.
NON-GAAP FINANCIAL MEASURES
CBB may use certain non-GAAP financial measures to provide meaningful supplemental information regarding CBB's operational performance and to enhance investors' overall understanding of such financial performance. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under the GAAP.
FORWARD-LOOKING STATEMENTS
This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to, fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which Commonwealth Business Bank is conducting its operations, including the real estate market in California, and other factors beyond Commonwealth Business Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. Commonwealth Business Bank undertakes no obligation to revise these forward-looking statements publicly to reflect subsequent events or circumstances.
| BALANCE SHEET (Unaudited) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | |||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 13,977 | $ | 9,127 | 53.1 | % | $ | 6,307 | 121.6 | % | |||||||||
| Interest-earning deposits at the FRB and other banks | 52,086 | 90,060 | (42.2 | %) | 106,899 | (51.3 | %) | ||||||||||||
| Investment securities | 73,412 | 75,232 | (2.4 | %) | 4,304 | 1605.7 | % | ||||||||||||
| Loans held-for-sale, at the lower of cost or fair value | 33,253 | 18,096 | 83.8 | % | 9,602 | 246.3 | % | ||||||||||||
| Loans | 724,786 | 696,142 | 4.1 | % | 658,478 | 10.1 | % | ||||||||||||
| Allowance for loan losses | (8,399 | ) | (8,456 | ) | (0.7 | %) | (9,026 | ) | (6.9 | %) | |||||||||
| Loans receivable, net | 716,387 | 687,686 | 4.2 | % | 649,452 | 10.3 | % | ||||||||||||
| FHLB, FRB & PCBB stocks | 5,653 | 5,637 | 0.3 | % | 4,867 | 16.1 | % | ||||||||||||
| Other assets | 27,197 | 27,356 | (0.6 | %) | 23,570 | 15.4 | % | ||||||||||||
| TOTAL ASSETS | $ | 921,965 | $ | 913,194 | 1.0 | % | $ | 805,001 | 14.5 | % | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Noninterest-bearing | $ | 196,796 | $ | 197,210 | (0.2 | %) | $ | 156,022 | 26.1 | % | |||||||||
| Interest-bearing | 603,037 | 597,894 | 0.9 | % | 539,932 | 11.7 | % | ||||||||||||
| Total deposits | 799,833 | 795,104 | 0.6 | % | 695,954 | 14.9 | % | ||||||||||||
| FHLB advances | 10,000 | 10,000 | - | 10,000 | - | ||||||||||||||
| Other liabilities | 6,333 | 6,051 | 4.7 | % | 5,496 | 15.2 | % | ||||||||||||
| Total liabilities | 816,166 | 811,155 | 0.6 | % | 711,450 | 14.7 | % | ||||||||||||
| Stockholders' Equity | 105,799 | 102,039 | 3.7 | % | 93,551 | 13.1 | % | ||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 921,965 | $ | 913,194 | 1.0 | % | $ | 805,001 | 14.5 | % | |||||||||
| STATEMENT OF INCOME (Unaudited) | |||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | |||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | |||||||||||||||
| Interest income | $ | 10,330 | $ | 10,096 | 2.3 | % | $ | 9,698 | 6.5 | % | |||||||||
| Interest expense | 1,527 | 1,500 | 1.8 | % | 1,372 | 11.3 | % | ||||||||||||
| Net interest income | 8,803 | 8,596 | 2.4 | % | 8,326 | 5.7 | % | ||||||||||||
| Provision for loan losses | - | - | - | 400 | (100.0 | %) | |||||||||||||
| Net interest income after provision for loan losses | 8,803 | 8,596 | 2.4 | % | 7,926 | 11.1 | % | ||||||||||||
| Gain on sale of loans | 1,978 | 2,128 | (7.0 | %) | 2,324 | (14.9 | %) | ||||||||||||
| Gain (loss) on sale of OREO | 103 | (27 | ) | 281.5 | % | - | 100.0 | % | |||||||||||
| Service charges and other income | 1,029 | 909 | 13.2 | % | 598 | 72.1 | % | ||||||||||||
| Noninterest income | 3,110 | 3,010 | 3.3 | % | 2,922 | 6.4 | % | ||||||||||||
| Salaries and employee benefits | 4,015 | 3,762 | 6.7 | % | 3,778 | 6.3 | % | ||||||||||||
| Occupancy and equipment | 571 | 548 | 4.2 | % | 499 | 14.4 | % | ||||||||||||
| Other expenses | 1,345 | 1,485 | (9.4 | %) | 1,262 | 6.6 | % | ||||||||||||
| Noninterest expense | 5,931 | 5,795 | 2.3 | % | 5,539 | 7.1 | % | ||||||||||||
| Income before income tax expense | 5,982 | 5,811 | 2.9 | % | 5,309 | 12.7 | % | ||||||||||||
| Income tax expense | 2,423 | 2,371 | 2.2 | % | 2,206 | 9.8 | % | ||||||||||||
| Net income | $ | 3,559 | $ | 3,440 | 3.5 | % | $ | 3,103 | 14.7 | % | |||||||||
| PTPP | $ | 5,982 | $ | 5,811 | 2.9 | % | $ | 5,709 | 4.8 | % | |||||||||
| PTPP excluding gain on sale of SBA loans | $ | 4,004 | $ | 3,683 | 8.7 | % | $ | 3,385 | 18.3 | % | |||||||||
| Outstanding number of shares | 9,095,159 | 9,095,159 | - | 8,964,813 | ¹ | 1.5 | % | ||||||||||||
| Weighted average shares for basic EPS | 9,095,159 | 9,094,949 | 0.0 | % | 8,948,344 | ¹ | 1.6 | % | |||||||||||
| Weighted average shares for diluted EPS | 9,427,311 | 9,328,776 | 1.1 | % | 9,190,191 | ¹ | 2.6 | % | |||||||||||
| Basic EPS | $ | 0.39 | $ | 0.38 | 2.6 | % | $ | 0.35 | ¹ | 11.4 | % | ||||||||
| Diluted EPS | $ | 0.38 | $ | 0.37 | 2.7 | % | $ | 0.34 | ¹ | 11.8 | % | ||||||||
|
1 Restated for 10% stock dividend to shareholders of record on May 16, 2016 |
|||||||||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | % | March 31, | % | ||||||||||||||||
| 2017 | 2016 | Change | 2016 | Change | ||||||||||||||||
|
Performance Ratios: |
||||||||||||||||||||
| Return on average assets | 1.60 | % | 1.53 | % | 4.6 | % | 1.62 | % | (1.2 | %) | ||||||||||
| Return on average equity | 13.85 | % | 13.58 | % | 2.0 | % | 13.53 | % | 2.4 | % | ||||||||||
| Net interest margin | 4.14 | % | 3.94 | % | 5.1 | % | 4.46 | % | (7.2 | %) | ||||||||||
| Cost of funds | 0.78 | % | 0.76 | % | 2.6 | % | 0.82 | % | (4.9 | %) | ||||||||||
| Efficiency ratio | 49.79 | % | 49.93 | % | (0.3 | %) | 49.24 | % | 1.1 | % | ||||||||||
|
Capital Ratios: |
||||||||||||||||||||
| Core capital (leverage) ratio | 11.75 | % | 11.40 | % | 3.1 | % | 12.09 | % | (2.8 | %) | ||||||||||
| Common equity tier 1 risk-based capital ratio | 13.58 | % | 13.70 | % | (0.9 | %) | 13.61 | % | (0.2 | %) | ||||||||||
| Tier 1 risk-based capital ratio | 13.58 | % | 13.70 | % | (0.9 | %) | 13.61 | % | (0.2 | %) | ||||||||||
| Total risk-based capital ratio | 14.76 | % | 14.95 | % | (1.3 | %) | 14.87 | % | (0.7 | %) | ||||||||||
| Minimum required capital conservation buffer | 1.250 | % | 0.625 | % | 100.0 | % | 0.625 | % | 100.0 | % | ||||||||||
| CBB Capital conservation buffer | 6.764 | % | 6.953 | % | (2.7 | %) | 6.870 | % | (1.5 | %) | ||||||||||
| Tangible common equity / total assets | 11.48 | % | 11.17 | % | 2.8 | % | 11.62 | % | (1.2 | %) | ||||||||||
| Tangible common equity per share | $ | 11.63 | $ | 11.22 | 3.7 | % | $ | 10.44 | ² | 11.4 | % | |||||||||
|
Selected Average Balances: |
||||||||||||||||||||
| Gross loans, net ¹ | $ | 745,243 | $ | 717,883 | 3.8 | % | $ | 668,788 | 11.4 | % | ||||||||||
| Total investment securities | 74,526 | 47,409 | 57.2 | % | 4,339 | 1617.6 | % | |||||||||||||
| Interest-earning assets | 871,044 | 871,973 | (0.1 | %) | 750,262 | 16.1 | % | |||||||||||||
| Total assets | 901,145 | 897,315 | 0.4 | % | 770,840 | 16.9 | % | |||||||||||||
| Noninterest-bearing deposits | 178,540 | 183,238 | (2.6 | %) | 134,277 | 33.0 | % | |||||||||||||
| Total deposits | 777,047 | 779,080 | (0.3 | %) | 662,248 | 17.3 | % | |||||||||||||
| Interest-bearing liabilities | 612,063 | 605,842 | 1.0 | % | 537,971 | 13.8 | % | |||||||||||||
| Stockholders' equity | 104,214 | 100,739 | 3.4 | % | 92,217 | 13.0 | % | |||||||||||||
|
1 Includes loans held-for-sale |
||||||||||||||||||||
|
2 Restated for 10% stock dividend to shareholders of record on May 16, 2016 |
||||||||||||||||||||
| SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) | |||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||||||||
| 2017 | 2016 | 2016 | 2016 | 2016 | |||||||||||||||||
|
Allowance for Loan Losses |
|||||||||||||||||||||
| Balance at beginning of period | $ | 8,456 | $ | 12,438 | $ | 9,321 | $ | 9,026 | $ | 8,546 | |||||||||||
| Provision for loan losses | - | - | 3,100 | 400 | 400 | ||||||||||||||||
| Charge-offs | 83 | 4,010 | 3 | 166 | 18 | ||||||||||||||||
| Recoveries | 26 | 28 | 20 | 61 | 98 | ||||||||||||||||
| Balance at the end of period | $ | 8,399 | $ | 8,456 | $ | 12,438 | $ | 9,321 | $ | 9,026 | |||||||||||
|
Nonperforming Assets:¹ |
|||||||||||||||||||||
| Over 90 days still accruing | $ | - | $ | - | $ | 126 | $ | - | $ | - | |||||||||||
| Nonaccrual loans | 3,158 | 3,084 | 6,965 | 3,279 | 1,895 | ||||||||||||||||
| Total nonperforming loans | 3,158 | 3,084 | 7,091 | 3,279 | 1,895 | ||||||||||||||||
| Other real estate owned | - | 1,155 | 1,403 | 1,155 | 1,155 | ||||||||||||||||
| Total nonperforming assets | $ | 3,158 | $ | 4,239 | $ | 8,494 | $ | 4,434 | $ | 3,050 | |||||||||||
|
Classified Loans:¹ |
|||||||||||||||||||||
| Substandard | $ | 8,103 | $ | 8,125 | $ | 12,111 | $ | 9,783 | $ | 8,346 | |||||||||||
| Doubtful | - | - | - | - | - | ||||||||||||||||
| Loss | - | - | - | - | - | ||||||||||||||||
| Total classified loans | $ | 8,103 | $ | 8,125 | $ | 12,111 | $ | 9,783 | $ | 8,346 | |||||||||||
|
Performing TDR loans: |
$ | 3,740 | $ | 3,806 | $ | 3,898 | $ | 3,930 | $ | 4,282 | |||||||||||
|
Delinquent Loans:¹ |
|||||||||||||||||||||
| Loans 30-89 days past due | $ | 1,609 | $ | 309 | $ | 576 | $ | 354 | $ | 2,270 | |||||||||||
| 90 days or more past due and still accruing | - | - | 126 | - | - | ||||||||||||||||
| Nonaccrual | 3,158 | 3,084 | 6,965 | 3,279 | 1,895 | ||||||||||||||||
| Total delinquent loans | $ | 4,767 | $ | 3,393 | $ | 7,667 | $ | 3,633 | $ | 4,165 | |||||||||||
|
Asset Quality Ratios: |
|||||||||||||||||||||
| Net charge-offs to average gross loans ² | 0.03 | % | 2.21 | % | (0.01 | %) | 0.06 | % | (0.05 | %) | |||||||||||
| Nonaccrual loans to gross loans | 0.44 | % | 0.44 | % | 0.99 | % | 0.47 | % | 0.29 | % | |||||||||||
| Nonperforming assets to total assets | 0.34 | % | 0.46 | % | 0.95 | % | 0.54 | % | 0.38 | % | |||||||||||
| Classified assets to total assets | 0.88 | % | 0.89 | % | 1.36 | % | 1.19 | % | 1.04 | % | |||||||||||
| Classified assets to Tier 1 and ALLL | 7.10 | % | 7.35 | % | 10.87 | % | 9.20 | % | 8.14 | % | |||||||||||
| Nonperforming loans to gross loans (exc. LHFS) | 0.44 | % | 0.44 | % | 1.01 | % | 0.47 | % | 0.29 | % | |||||||||||
| ALLL to gross loans (exc. LHFS) | 1.16 | % | 1.21 | % | 1.77 | % | 1.33 | % | 1.37 | % | |||||||||||
| ALLL to nonaccrual loans | 265.96 | % | 274.19 | % | 178.58 | % | 284.26 | % | 476.31 | % | |||||||||||
| ALLL to nonperforming loans | 265.96 | % | 274.19 | % | 175.41 | % | 284.26 | % | 476.31 | % | |||||||||||
| ALLL to nonperforming assets | 265.96 | % | 199.48 | % | 146.43 | % | 210.22 | % | 295.93 | % | |||||||||||
| Texas ratio ³ | 2.77 | % | 3.84 | % | 7.42 | % | 4.17 | % | 2.97 | % | |||||||||||
| 1 Net of SBA guaranteed balance | |||||||||||||||||||||
| 2 Includes loans held-for-sale | |||||||||||||||||||||
| 3 Nonperforming assets divided by tangible common equity and ALLL | |||||||||||||||||||||
| MARGIN ANALYSIS (Unaudited) | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||
| March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||||||||||||
| Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | ||||||||||||||||||||||
| INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||
| Loans ¹ | $ | 745,243 | $ | 9,787 | 5.33 | % | $ | 717,883 | $ | 9,544 | 5.29 | % | $ | 668,788 | $ | 9,495 | 5.71 | % | ||||||||||||
| Investment securities² | 74,526 | 415 | 2.26 | % | 47,409 | 233 | 1.96 | % | 4,339 | 21 | 1.95 | % | ||||||||||||||||||
| Interest-earning at the FRB and other banks | 45,635 | 93 | 0.83 | % | 101,075 | 140 | 0.55 | % | 72,283 | 92 | 0.51 | % | ||||||||||||||||||
| Other earning assets | 5,640 | 115 | 8.27 | % | 5,606 | 223 | 15.83 | % | 4,852 | 90 | 7.46 | % | ||||||||||||||||||
| Total interest-earning assets ² | 871,044 | 10,410 | 4.85 | % | 871,973 | 10,140 | 4.63 | % | 750,262 | 9,698 | 5.20 | % | ||||||||||||||||||
| NONINTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||
| Cash and due from banks | 11,028 | 11,762 | 7,348 | |||||||||||||||||||||||||||
| Other noninterest-earning assets | 27,531 | 25,808 | 21,814 | |||||||||||||||||||||||||||
|
Total noninterest-earning assets |
38,559 | 37,570 | 29,162 | |||||||||||||||||||||||||||
| Less: Allowance for loan losses | (8,458 | ) | (12,228 | ) | (8,584 | ) | ||||||||||||||||||||||||
| TOTAL ASSETS | $ | 901,145 | $ | 897,315 | $ | 770,840 | ||||||||||||||||||||||||
| INTEREST-BEARING DEPOSITS | ||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 2,195 | $ | 1 | 0.15 | % | $ | 1,865 | $ | 1 | 0.15 | % | $ | 1,235 | $ | - | 0.15 | % | ||||||||||||
| Money market | 171,055 | 378 | 0.90 | % | 167,465 | 371 | 0.88 | % | 134,966 | 294 | 0.88 | % | ||||||||||||||||||
| Savings | 12,819 | 53 | 1.68 | % | 12,775 | 51 | 1.59 | % | 8,892 | 36 | 1.63 | % | ||||||||||||||||||
| Time deposits | 412,438 | 1,048 | 1.03 | % | 413,737 | 1,036 | 1.00 | % | 382,878 | 1,001 | 1.05 | % | ||||||||||||||||||
| Total interest-bearing deposits | 598,507 | 1,480 | 1.00 | % | 595,842 | 1,459 | 0.97 | % | 527,971 | 1,331 | 1.01 | % | ||||||||||||||||||
| Borrowings | 13,556 | 47 | 1.41 | % | 10,000 | 41 | 1.63 | % | 10,000 | 41 | 1.65 | % | ||||||||||||||||||
| Total interest-bearing liabilities | 612,063 | 1,527 | 1.01 | % | 605,842 | 1,500 | 0.98 | % | 537,971 | 1,372 | 1.03 | % | ||||||||||||||||||
| Noninterest-bearing deposits | 178,540 | 183,238 | 134,277 | |||||||||||||||||||||||||||
| Other liabilities | 6,328 | 7,496 | 6,375 | |||||||||||||||||||||||||||
| Stockholders' equity | 104,214 | 100,739 | 92,217 | |||||||||||||||||||||||||||
|
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ | 901,145 | $ | 897,315 | $ | 770,840 | ||||||||||||||||||||||||
| Net interest income | $ | 8,883 | $ | 8,640 | $ | 8,326 | ||||||||||||||||||||||||
| Cost of deposits | 0.77 | % | 0.75 | % | 0.81 | % | ||||||||||||||||||||||||
| Cost of funds | 0.78 | % | 0.76 | % | 0.82 | % | ||||||||||||||||||||||||
| Net interest spread | 3.84 | % | 3.65 | % | 4.17 | % | ||||||||||||||||||||||||
| Net interest margin² | 4.14 | % | 3.94 | % | 4.46 | % | ||||||||||||||||||||||||
| 1 Includes loans-held-for-sale | ||||||||||||||||||||||||||||||
|
2 Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate |
||||||||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170418005079/en/
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