Market Overview

People's Utah Bancorp Reports Second Quarter Results and Announces Increased Quarterly Dividend Payment

Share:

Second Quarter Highlights

  • Total deposits grew $321 million, or 21.96%, to $1.78 billion year-over-year
  • Loans held for investment grew $491 million, or 40.83%, to $1.69 billion year-over-year
  • Net interest margin widened 55 bps to 5.26% year-over-year
  • Earnings per diluted share increased 57.14% to $0.55 year-over-year
  • Return on average assets improved to 1.93% for the second quarter of 2018
  • Return on average equity improved to 15.60% for the second quarter of 2018

AMERICAN FORK, Utah, July 26, 2018 (GLOBE NEWSWIRE) -- People's Utah Bancorp (the "Company" or "PUB") (NASDAQ:PUB) reported net income of $10.5 million for the second quarter of 2018 compared with $9.0 million for the first quarter of 2018, and $6.5 million for the second quarter of 2017.  Diluted earnings per common share were $0.55 for the second quarter of 2018 compared with $0.48 for the first quarter of 2018, and $0.35 for the second quarter of 2017.  For the six months ended June 30, 2018 net income was $19.5 million, or $1.03 per diluted common share, compared with $13.0 million, or $0.71 per diluted common share, for the same period a year earlier.   

The Company has excluded non-recurring items including gains or losses on sale of investment securities; costs related to the acquisition of the Utah branches of Banner Bank and the merger of Town & Country Bank incurred in both 2017 and 2018; and higher income tax expense related to the one-time write-down of its deferred income tax assets recorded in 2017 to derive non-GAAP financial information related to the Company's core operations.  The Company believes this non-GAAP(NG) financial information is useful in understanding the Company's core financial performance.

Net income from core operations was $10.2 million, or $0.54 per diluted common share, for the second quarter of 2018 compared with $9.3 million, or $0.49 per diluted common share, for the first quarter of 2018 and $6.6 million, or $0.36 per diluted common share, for the second quarter of 2017(NG).  For the six months ended June 30, 2018 net income from core operations was $19.5 million, or $1.03 per diluted common share, compared with $13.1 million, or $0.72 per diluted common share, for the same period a year earlier(NG).

Return on average assets was 1.93% for the second quarter of 2018 compared with 1.70% for first quarter of 2018, and 1.53% for the second quarter of 2017.  Return on average assets from core operations for the second quarter 2018 was 1.88% compared with 1.75% for the first quarter of 2018, and 1.56% for the second quarter of 2017(NG)

Return on average equity was 15.60% for the second quarter of 2018 compared with 13.96% for the first quarter of 2018, and 10.91% for the second quarter of 2017.  Return on average equity from core operations was 15.22% for the second quarter of 2018 compared with 14.38% for the first quarter of 2018, and 11.10% for the second quarter of 2017(NG)

The Board of Directors declared a quarterly dividend payment of $0.11 per common share, a 10%, or $0.01 per common share increase from the prior quarter. The dividend will be payable on August 13, 2018 to shareholders of record on August 6, 2018. The dividend payout ratio for earnings for the quarter ended June 30, 2018 was 19.65%.  This continues the over 50-year history of paying dividends by the Company.

"We're pleased with our second quarter financial performance.  We experienced widening net interest margins and strong growth from a year ago both organically and through our acquisition transactions," said Len Williams, President and Chief Executive Officer.  "We continue to be focused on growing our business organically and diversifying our loan portfolio.  We're also focused on expanding our core deposit base, particularly from commercial relationships.  We are experiencing greater deposit pricing pressure and expect that our cost of funds will increase, consistent with our competitors, in the near term.  The economic outlook for the Utah market continues to be strong, which provides us further opportunities to grow our organization.  We continue to evaluate potential acquisition opportunities throughout the Intermountain West."

Net Interest Income and Margin

Net interest income grew 42.17%, or $8.0 million, to $27.0 million for the second quarter of 2018 compared with $19.0 million for the second quarter of 2017.  The increase is primarily the result of average interest-earning assets growing 27.45%, or $443 million, and yields on interest-earning assets increasing 70 basis points for the same comparable periods to 5.60% for the second quarter of 2018. Higher yields on interest-earning assets was primarily the result of yields on loans increasing 23 basis points to 6.34% for the same comparable periods and the percentage of average loans to average interest-earning assets increasing to 83.24% for the second quarter of 2018 compared with 72.91% for the second quarter of 2017.

Total cost of interest-bearing liabilities increased 27 basis points to 0.57% for the second quarter of 2018 and is the result of a $116 million increase in short-term borrowing at a borrowing rate of 2.01% during the second quarter of 2018, and the cost of interest-bearing deposits increasing 11 basis points to 0.40% for the second quarter of 2018 compared with the same period a year earlier.  The Company expects the increase in cost of interest-bearing deposits to accelerate over the next several quarters as financial institutions increase their competitive deposit pricing.

Net interest margins increased 55 basis points to 5.26% for the second quarter of 2018 compared with the same period a year earlier.  Acquisition accounting adjustments, including the accretion of loan discounts and amortization of certificate of deposits premiums, added 16 basis points to the net interest margin in the second quarter of 2018.

Provision for Loan Losses

Provision for loan losses was $1.5 million for the second quarter of 2018 compared with $0.9 million for the second quarter of 2017. The increase in provision for loan losses is due primarily to the increase in allowance for loan losses to loans held for investment, excluding specific reserves, and a $0.3 million increase in specific reserves on classified loans.  The Company incurred net recoveries of $0.1 million in the second quarter of 2018 compared with net charge-offs of $0.3 million in the second quarter of 2017. 

Noninterest Income

Noninterest income was $4.1 million for the second quarter of 2018 compared with $3.8 million the same period a year ago.   The increase was primarily due to gain on sale of securities, an increase in card processing fees and service charges on deposit accounts, offset by lower mortgage banking income.

Noninterest Expense

Noninterest expense was $15.8 million for the second quarter of 2018 compared with $11.8 million for the second quarter of 2017.  Noninterest expense for the second quarter of 2018 increased as a result of $2.4 million of higher salaries and employee benefits primarily from the addition of employees retained from the acquisition of the Utah branches of Banner Bank and the merger of Town & Country Bank, $0.3 million of higher occupancy, equipment and depreciation costs associated with the net increase of five branches from these transactions, and $0.4 million in higher data processing costs associated with an increase in total accounts from both organic growth and acquisition transactions.

The Company's efficiency ratio was 50.97% for the second quarter of 2018 compared with 51.88% for the second quarter of 2017.  The Company's efficiency ratio from core operations was 51.52% for the second quarter of 2018 compared with 51.11% for the second quarter of 2017(NG).

Income Tax Provision

Income tax expense was $3.3 million for the second quarter of 2018 compared with $3.6 million for the second quarter of 2017.  The effective tax rate for the second quarter of 2018 was 23.85% compared with 35.56% for the same period a year earlier.  The lower effective tax rate in 2018 compared with 2017 is the result of the reduction in the federal corporate tax rate to a flat rate of 21%, the reduction of the Utah state corporate tax rate to 4.95% as well as tax benefits related to tax-deductible stock compensation expense.

Loans and Credit Quality

Loans held for investment increased $491 million, or 40.83%, to $1.69 billion at June 30, 2018 compared with $1.20 billion at June 30, 2017.  Average loans grew $536 million, or 45.51%, to $1.71 billion for the quarter ended June 30, 2018 compared with $1.18 billion for the quarter ended June 30, 2017.  The increase in loans held for investment was both the result of organic growth as well as loans purchased with the acquisition of the Utah branches of Banner Bank and the merger of Town & Country Bank.

Non-performing loans were $8.6 million at June 30, 2018 compared with $7.6 million at June 30, 2017.  Non-performing loans to total loans declined to 0.51% at June 30, 2018 compared with 0.64% at June 30, 2017.  Non-performing assets were $8.6 million at June 30, 2018 compared with $8.1 million at June 30, 2017.  Non-performing assets to total assets declined to 0.40% at June 30, 2018 compared with 0.47% at June 30, 2017.  The allowance for loan losses to loans held for investment was 1.32% at June 30, 2018 compared with 1.44% at June 30, 2017.  In accordance with acquisition accounting, loans acquired from the Utah branches of Banner Bank and Town & Country Bank were recorded at their estimated fair value, which resulted in a net discount to the loans' contractual amounts, a portion of which reflects a discount for possible credit losses. Credit discounts are included in the determination of fair value, and as a result, no allowance for loan and lease losses is recorded for acquired loans at the acquisition date.  The discount recorded on the acquired loans is not reflected in the allowance for loan losses or related allowance coverage ratios.  Remaining discounts on acquired loans was $9.7 million at June 30, 2018.

Deposits and Liabilities

Total deposits increased $321 million, or 21.96%, to $1.78 billion at June 30, 2018 compared with $1.46 billion at June 30, 2017.  The increase in total deposits was the result of both organic growth as well as the assumption of deposits from the Utah branches of Banner Bank and Town & Country Bank. Non-interest bearing deposits were 36.28% of total deposits as of June 30, 2018 compared with 31.89% as of June 30, 2017.

Shareholders' Equity

Shareholders' equity increased by $31.7 million to $272 million at June 30, 2018 compared with $240 million at June 30, 2017. The increase resulted primarily from the exchange of Town & Country shares for 466,546 PUB common shares, and from net income earned during the intervening periods, net of cash dividends paid to shareholders.

Conference Call and Webcast

Management will conduct a live conference call and webcast for investors, analysts and the public relating to the Company's results for the second quarter of 2018 at 12:00 p.m. Eastern time on Friday, July 27, 2018. The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to join to the call by telephone at 888-317-6003 (international calls 412-317-6061) and the participant entry number is 0501934. Please dial in 10-15 minutes early so the name and company information can be collected prior to the start of the conference.  To participate in the webcast, log on to:

http://services.choruscall.com/links/pub180727.html.

If you are unable to participate during the live webcast, the call will be archived on our website www.peoplesutah.com or at the same URL above until August 27, 2018. Forward-looking and other material information may be discussed on this conference call.

Forward-Looking Statements

Statements in this release that are based on information other than historical data or that express the Company's expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company's expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management's views as of any subsequent date.

Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: (i) market and economic conditions; (ii) capital sufficiency; (iii) operational, liquidity, interest rate and credit risks; (iv) deterioration of asset quality; (v) achieving loan and deposit growth; (vi) increased competition; (vii) adequacy of reserves; (viii) investments in new branches and new business opportunities; and (ix) changes in the regulatory or legal environment; as well as other factors discussed in the section titled "Risk Factors," in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive. The Company does not intend, or undertake any obligation to publicly update these forward-looking statements.

About People's Utah Bancorp

People's Utah Bancorp is the holding company for People's Intermountain Bank.  People's Intermountain Bank is a full-service community bank providing loans, deposit and cash management services to individuals and businesses. The Company offers its clients direct access to decision makers, unparalleled responsiveness, seasoned relationship managers, and technology solutions. People's Intermountain Bank has 26 locations in three banking divisions, Bank of American Fork, Lewiston State Bank, and People's Town & Country Bank; a leasing division, GrowthFunding Equipment Finance; and a mortgage division, People's Intermountain Bank Mortgage. The Company has been serving communities in Utah and southern Idaho for more than 100 years. More information about PUB is available at www.peoplesutah.com.

Investor Relations Contact:

Mark K. Olson
Executive Vice President and Chief Financial Officer
1 East Main Street
American Fork UT 84003
investorrelations@peoplesutah.com
Phone: 801-642-3998

PEOPLE'S UTAH BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

             
     Three Months Ended     Six Months Ended  
(Dollars in thousands, except share   June 30,     March 31,     June 30,     June 30,     June 30,  
 and per share data)   2018     2018     2017     2018     2017  
Interest income                                        
Interest and fees on loans   $ 27,073     $ 25,783     $ 17,923     $ 52,856     $ 34,767  
Interest and dividends on investments     1,683       1,656       1,802       3,339       3,507  
Total interest income     28,756       27,439       19,725       56,195       38,274  
Interest expense     1,778       1,495       749       3,273       1,515  
Net interest income     26,978       25,944       18,976       52,922       36,759  
Provision for loan losses     1,475       2,050       900       3,525       1,100  
Net interest income after provision for loan losses     25,503       23,894       18,076       49,397       35,659  
Non-interest income                                        
Service charges on deposit accounts     704       673       578       1,377       1,114  
Card processing     799       723       692       1,522       1,287  
Mortgage banking     1,505       1,638       1,960       3,143       3,939  
Net gain (loss) on sale of investment securities     333       2       1       335       (10 )
Other operating     725       682       606       1,407       1,099  
Total non-interest income     4,066       3,718       3,837       7,784       7,429  
Non-interest expense                                        
Salaries and employee benefits     10,196       10,423       7,762       20,619       15,729  
Occupancy, equipment and depreciation     1,411       1,543       1,088       2,954       2,205  
Data processing     1,063       870       661       1,933       1,336  
FDIC premiums     299       329       130       628       256  
Marketing and advertising     321       446       349       767       611  
Acquisition-related costs     1       349       175       350       175  
Other     2,532       2,088       1,670       4,620       3,437  
Total non-interest expense     15,823       16,048       11,835       31,871       23,749  
Income before income tax expense     13,746       11,564       10,078       25,310       19,339  
Income tax expense     3,279       2,560       3,584       5,839       6,324  
Net income   $ 10,467     $ 9,004     $ 6,494     $ 19,471     $ 13,015  
                                         
Earnings per common share:                                        
Basic   $ 0.56     $ 0.48     $ 0.36     $ 1.04     $ 0.73  
Diluted   $ 0.55     $ 0.48     $ 0.35     $ 1.03     $ 0.71  
                                         
Weighted average common shares outstanding:                                        
Basic     18,679,908       18,598,436       17,937,926       18,639,397       17,911,125  
Diluted     18,989,176       18,937,637       18,351,531       18,963,549       18,334,028  
                                         


PEOPLE'S UTAH BANCORP

UNAUDITED CONSOLIDATED BALANCE SHEETS

                         
    June 30,     March 31,     December 31,     June 30,  
(Dollars in thousands, except share data)   2018     2018     2017     2017  
ASSETS                                
Cash and due from banks   $ 33,484     $ 32,267     $ 36,235     $ 28,315  
Interest-bearing deposits     17,930       9,268       13,158       26,027  
Federal funds sold     908       338       1,634       3,093  
Total cash and cash equivalents     52,322       41,873       51,027       57,435  
Investment securities:                                
Available for sale, at fair value     236,699       249,534       263,056       325,172  
Held to maturity, at historical cost     67,922       73,888       74,654       77,394  
Total investment securities     304,621       323,422       337,710       402,566  
Non-marketable equity securities     6,151       5,711       3,706       1,959  
Loans held for sale     11,058       10,618       10,871       7,655  
Loans:                                
Loans held for investment     1,691,959       1,687,530       1,627,444       1,201,391  
Allowance for loan losses     (22,308 )     (20,731 )     (18,303 )     (17,271 )
Total loans held for investment, net     1,669,651       1,666,799       1,609,141       1,184,120  
Premises and equipment, net     29,335       29,734       30,399       23,551  
Goodwill     25,673       25,344       26,008       -  
Bank-owned life insurance     26,120       25,964       23,566       19,970  
Deferred income tax assets     10,764       10,005       8,827       9,845  
Accrued interest receivable     7,658       7,616       7,594       5,616  
Other intangibles     3,633       3,744       3,854       533  
Other real estate owned     -       -       994       468  
Other assets     14,784       12,608       9,832       4,657  
Total assets   $ 2,161,770     $ 2,163,438     $ 2,123,529     $ 1,718,375  
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                
Deposits:                                
Non-interest bearing deposits   $ 646,574     $ 664,438     $ 641,124     $ 465,988  
Interest-bearing deposits     1,135,366       1,141,887       1,173,508       995,064  
Total deposits     1,781,940       1,806,325       1,814,632       1,461,052  
Short-term borrowings     90,000       79,000       40,000       3,302  
Accrued interest payable     369       354       353       269  
Other liabilities     17,862       13,960       11,126       13,850  
Total liabilities     1,890,171       1,899,639       1,866,111       1,478,473  
                                 
Shareholders' equity:                                
Preferred shares, $0.01 par value     -       -       -       -  
Common shares, $0.01 par value     187       187       185       179  
Additional paid-in capital     85,620       85,430       84,532       69,623  
Retained earnings     190,735       182,136       174,804       170,840  
Accumulated other comprehensive loss     (4,943 )     (3,954 )     (2,103 )     (740 )
Total shareholders' equity     271,599       263,799       257,418       239,902  
Total liabilities and shareholders' equity   $ 2,161,770     $ 2,163,438     $ 2,123,529     $ 1,718,375  
                                 
Common shares outstanding     18,683,883       18,674,232       18,511,797       17,948,347  
                                 

PEOPLE'S UTAH BANCORP
SUMMARY FINANCIAL INFORMATION

       
    June 30,     March 31,     December 31,     June 30,  
(Dollars in thousands, except share data)   2018     2018     2017     2017  
Selected Balance Sheet Information:                                
Book value per share   $ 14.54     $ 14.13     $ 13.91     $ 13.37  
Tangible book value per share   $ 12.97     $ 12.57     $ 12.29     $ 13.34  
Non-performing loans to total loans     0.51 %     0.44 %     0.18 %     0.64 %
Non-performing assets to total assets     0.40 %     0.34 %     0.18 %     0.47 %
Allowance for loan losses to loans held for investment     1.32 %     1.23 %     1.12 %     1.44 %
Loans to Deposits     94.32 %     92.86 %     89.27 %     81.57 %
                                 
Asset Quality Data:                                
Non-performing loans   $ 8,649     $ 7,398     $ 2,899     $ 7,611  
Non-performing assets     8,649       7,398       3,893       8,079  
                                 
Capital Ratios:                                
Tier 1 leverage capital (1)     11.48 %     11.26 %     11.46 %     14.15 %
Total risk-based capital (1)     15.22 %     14.71 %     14.67 %     19.82 %
Average equity to average assets     12.36 %     12.20 %     13.58 %     14.06 %
Tangible common equity to tangible assets (3)     11.36 %     11.00 %     10.87 %     13.93 %


    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
    2018     2018     2017     2018     2017  
Selected Financial Information:                                        
Basic earnings per share   $ 0.56     $ 0.48     $ 0.36     $ 1.04     $ 0.73  
Diluted earnings per share   $ 0.55     $ 0.48     $ 0.35     $ 1.03     $ 0.71  
Net interest margin (2)     5.26 %     5.22 %     4.71 %     5.24 %     4.63 %
Efficiency ratio     50.97 %     54.10 %     51.88 %     52.50 %     53.75 %
Non-interest income to average assets     0.75 %     0.70 %     0.91 %     0.73 %     0.89 %
Non-interest expense to average assets     2.91 %     3.04 %     2.79 %     2.97 %     2.85 %
Return on average assets     1.93 %     1.70 %     1.53 %     1.82 %     1.56 %
Return on average equity     15.60 %     13.96 %     10.91 %     14.79 %     11.14 %
Net charge-offs / (recoveries)     (102 )     (378 )     273       (480 )     544  
Annualized net charge-offs / (recoveries) to average loans     -0.02 %     -0.09 %     0.09 %     -0.06 %     0.09 %

________________________________
(1)       Tier 1 leverage capital and Total risk-based capital as of June 30, 2018 are estimates.
(2)       Net interest margin is defined as net interest income divided by average earning assets.
(3)       Represents the sum of total shareholders' equity less intangible assets all divided by the sum of total assets less intangible assets. Intangible assets were $29,306,000, $29,088,000 and $533,000 at June 30, 2018, March 31, 2018 and June 30, 2017, respectively.

PEOPLE'S UTAH BANCORP
SELECTED AVERAGE BALANCES AND YIELDS

       
     Three Months Ended  
    June 30, 2018     June 30, 2017  
            Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/  
(Dollars in thousands, except footnotes)   Balance     Expense     Rate     Balance     Expense     Rate  
ASSETS                                                
Interest-earning deposits in other banks and federal funds sold   $ 15,533     $ 64       1.65 %   $ 21,594     $ 56       1.04 %
Securities: (1)                                                
Taxable securities     241,724       1,193       1.98 %     319,878       1,309       1.64 %
Non-taxable securities (2)     79,949       369       1.85 %     93,686       432       1.85 %
Total securities     321,673       1,562       1.95 %     413,564       1,741       1.69 %
Loans (3)                                                
Real estate term     903,637       12,860       5.71 %     620,616       8,567       5.54 %
Construction and land development     368,823       7,303       7.94 %     238,412       4,659       7.84 %
Commercial and industrial     317,629       5,281       6.67 %     218,937       3,273       6.00 %
Residential and home equity     105,219       1,380       5.26 %     81,765       1,157       5.68 %
Consumer and other     17,940       249       5.58 %     17,672       267       6.05 %
Total loans     1,713,248       27,073       6.34 %     1,177,402       17,923       6.11 %
                                                 
Non-marketable equity securities     7,671       58       3.04 %     2,307       4       0.78 %
Total interest-earning assets     2,058,125     $ 28,757       5.60 %     1,614,867     $ 19,724       4.90 %
Allowance for loan losses     (21,073 )                     (16,658 )                
Non-interest earning assets     140,723                       100,457                  
Total average assets   $ 2,177,775                     $ 1,698,666                  
LIABILITIES AND SHAREHOLDERS' EQUITY                                                
Interest-bearing deposits:                                                
Demand and savings accounts   $ 733,223     $ 492       0.27 %   $ 660,564     $ 438       0.27 %
Money market accounts     207,663       177       0.34 %     168,021       73       0.17 %
Certificates of deposit     185,936       468       1.01 %     151,976       210       0.55 %
Total interest-bearing deposits     1,126,822       1,137       0.40 %     980,561       721       0.29 %
Short-term borrowings     128,288       642       2.01 %     12,428       27       0.89 %
Total interest-bearing liabilities     1,255,110     $ 1,779       0.57 %     992,989     $ 748       0.30 %
Non-interest bearing deposits     642,063                       454,235                  
Total funding     1,897,173     $ 1,779       0.38 %     1,447,224     $ 748       0.21 %
Other non-interest bearing liabilities     11,433                       12,677                  
Shareholders' equity     269,169                       238,765                  
Total average liabilities and shareholders' equity   $ 2,177,775                     $ 1,698,666                  
Net interest income           $ 26,978                     $ 18,976          
Interest rate spread                     5.04 %                     4.60 %
Net interest margin                     5.26 %                     4.71 %

________________________________
(1)     Excludes average unrealized gains (losses) of $(6.4) million and $(786,000) for the three months ended June 30, 2018 and 2017, respectively.
(2)    Does not include tax effect on tax-exempt investment security income of $123,000 and $233,000 for the three months ended June 30, 2018 and 2017, respectively.
(3)     Loan interest income includes loan fees of $1.7 million and $1.6 million for the three months ended June 30, 2018 and 2017, respectively.

PEOPLE'S UTAH BANCORP
SELECTED AVERAGE BALANCES AND YIELDS

       
     Six Months Ended  
    June 30, 2018     June 30, 2017  
            Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/  
(Dollars in thousands, except footnotes)   Balance     Expense     Rate     Balance     Expense     Rate  
ASSETS                                                
Interest-earning deposits in other banks and federal funds sold   $ 14,501     $ 109       1.51 %   $ 31,168     $ 135       0.87 %
Securities: (1)                                                
Taxable securities     247,078       2,406       1.96 %     317,342       2,510       1.59 %
Non-taxable securities (2)     81,226       751       1.86 %     92,930       854       1.85 %
Total securities     328,304       3,157       1.94 %     410,272       3,364          
Loans (3)                                                
Real estate term     879,444       25,024       5.74 %     604,327       16,575       5.53 %
Construction and land development     367,787       14,178       7.77 %     237,330       9,060       7.70 %
Commercial and industrial     315,838       10,371       6.62 %     214,774       6,489       6.09 %
Residential and home equity     106,060       2,716       5.16 %     82,481       2,131       5.21 %
Consumer and other     18,893       567       6.05 %     17,749       512       5.82 %
Total loans     1,688,022       52,856       6.31 %     1,156,661       34,767       6.06 %
                                                 
Non-marketable equity securities     6,894       73       2.15 %     2,070       8       0.77 %
Total interest-earning assets     2,037,721     $ 56,195       5.56 %     1,600,171     $ 38,274       4.82 %
Allowance for loan losses     (19,901 )                     (16,713 )                
Non-interest earning assets     142,940                       99,498                  
Total average assets   $ 2,160,760                     $ 1,682,956                  
LIABILITIES AND SHAREHOLDERS' EQUITY                                                
Interest-bearing deposits:                                                
Demand and savings accounts   $ 725,774     $ 943       0.26 %   $ 660,026     $ 876       0.27 %
Money market accounts     215,946       333       0.31 %     171,221       178       0.21 %
Certificates of deposit     192,705       927       0.97 %     154,131       432       0.56 %
Total interest-bearing deposits     1,134,425       2,203       0.39 %     985,378       1,486       0.30 %
Short-term borrowings     114,498       1,070       1.88 %     7,856       29       0.74 %
Total interest-bearing liabilities     1,248,923     $ 3,273       0.53 %     993,234     $ 1,515       0.31 %
Non-interest bearing deposits     635,503                       442,861                  
Total funding     1,884,426     $ 3,273       0.35 %     1,436,095     $ 1,515       0.21 %
Other non-interest bearing liabilities     10,925                       11,326                  
Shareholders' equity     265,409                       235,535                  
Total average liabilities and shareholders' equity   $ 2,160,760                     $ 1,682,956                  
Net interest income           $ 52,922                     $ 36,759          
Interest rate spread                     5.03 %                     4.52 %
Net interest margin                     5.24 %                     4.63 %

________________________________
(1)     Excludes average unrealized gains (losses) of $(5.3) million and $(1.2) million for the six months ended June 30, 2018 and 2017, respectively.
(2)    Does not include tax effect on tax-exempt investment security income of $250,000 and $460,000 for the six months ended June 30, 2018 and 2017, respectively.
(3)     Loan interest income includes loan fees of $3.3 million and $3.0 million for the six months ended June 30, 2018 and 2017, respectively.

PEOPLE'S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION

                                         
(NG) Non-GAAP Financial Measures                                        
In addition to financial results presented in accordance with generally accepted accounting principles ("GAAP"),  
this press release contains certain non-GAAP financial measures.  Management has presented these non-GAAP  
financial measures because it believes that they provide useful and comparative information to assess trends in  
core operations and facilitate the comparison of our financial performance with the performance of our peers.  
(Dollars in thousands)   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Revenue from Core Operations   2018     2018     2017     2018     2017  
Net interest income (GAAP)   $ 26,978     $ 25,944     $ 18,976     $ 52,922     $ 36,759  
Total non-interest income     4,066       3,718       3,837       7,784       7,429  
Total GAAP revenues     31,044       29,662       22,813       60,706       44,188  
Exclude net (gain) loss on sale of investment securities     (333 )     -       -       (333 )     -  
Revenue from core operations (non-GAAP)   $ 30,711     $ 29,662     $ 22,813     $ 60,373     $ 44,188  
                                         
    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Non-interest Income from Core Operations   2018     2018     2017     2018     2017  
Total non-interest income (GAAP)   $ 4,066     $ 3,718     $ 3,837     $ 7,784     $ 7,429  
Exclude net (gain) loss on sale of investment securities     (333 )     -       -       (333 )     -  
Non-interest income from core operations (non-GAAP)   $ 3,733     $ 3,718     $ 3,837     $ 7,451     $ 7,429  
                                         
    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Non-interest Expense from Core Operations   2018     2018     2017     2018     2017  
Total non-interest expense (GAAP)   $ 15,823     $ 16,048     $ 11,835     $ 31,871     $ 23,749  
Exclude acquisition-related costs     (1 )     (349 )     (175 )     (350 )     (175 )
Non-interest expense from core operations (non-GAAP)   $ 15,822     $ 15,699     $ 11,660     $ 31,521     $ 23,574  
                                         
    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Net Income from Core Operations   2018     2018     2017     2018     2017  
Net income (GAAP)   $ 10,467     $ 9,004     $ 6,494     $ 19,471     $ 13,015  
Exclude net (gain) loss on sale of investment securities     (333 )     -       -       (333 )     -  
Exclude acquisition-related costs     1       349       175       350       175  
Exclude tax related benefit     79       (77 )     (62 )     (4 )     (57 )
Write down of deferred income tax assets (DTA)     -       -       -       -       -  
Net income (non-GAAP)   $ 10,214     $ 9,276     $ 6,607     $ 19,484     $ 13,133  
                                         

PEOPLE'S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION

   
(NG) Non-GAAP Financial Measures (continued)  
(Dollars in thousands)   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Acquisition Accounting Impact on Net Interest Margin   2018     2018     2017     2018     2017  
Net interest income (GAAP)   $ 26,978     $ 25,944     $ 18,976     $ 52,922     $ 36,759  
Exclude discount accretion (premium amortization) on purchased loans     (777 )     (1,167 )     (8 )     (1,944 )     (18 )
Exclude premium amortization on acquired certificates of deposit ("CD")     (35 )     (35 )     (69 )     (70 )     (137 )
Net interest income before acquisition accounting impact (Non-GAAP)   $ 26,166     $ 24,742     $ 18,899     $ 50,908     $ 36,604  
                                         
Average earning assets (GAAP)   $ 2,058,125     $ 2,017,090     $ 1,614,867     $ 2,037,721     $ 1,600,171  
Exclude average net loan discount on acquired loans     10,146       11,924       866       11,030       866  
Average earning assets before acquired loan discount (Non-GAAP)   $ 2,068,271     $ 2,029,014     $ 1,615,733     $ 2,048,751     $ 1,601,037  
                                         
Net interest margin ("NIM") (GAAP)     5.26 %     5.22 %     4.71 %     5.24 %     4.63 %
Exclude impact on NIM from discount accretion     -0.15 %     -0.23 %     0.00 %     -0.19 %     0.00 %
Exclude impact on NIM from CD premium amortization     -0.01 %     -0.01 %     -0.02 %     -0.01 %     -0.02 %
Net interest margin before acquisition accounting adjustments (Non-GAAP)     5.10 %     4.98 %     4.69 %     5.04 %     4.61 %
                                         

PEOPLE'S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION

   
(NG) Non-GAAP Financial Measures (continued)  
(Dollars in thousands)   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Additional Non-GAAP Financial Information   2018     2018     2017     2018     2017  
                                         
Diluted earning per share (GAAP)   $ 0.55     $ 0.48     $ 0.35     $ 1.03     $ 0.71  
Diluted earning per share (non-GAAP)   $ 0.54     $ 0.49     $ 0.36     $ 1.03     $ 0.72  
                                         
Efficiency ratio (GAAP)     50.97 %     54.10 %     51.88 %     52.50 %     53.75 %
Efficiency ratio (non-GAAP)     51.52 %     52.93 %     51.11 %     52.21 %     53.35 %
                                         
Non-interest income to average assets (GAAP)     0.75 %     0.70 %     0.91 %     0.73 %     0.89 %
Non-interest income to average assets (non-GAAP)     0.69 %     0.70 %     0.91 %     0.70 %     0.89 %
                                         
Non-interest expense to average assets (GAAP)     2.91 %     3.04 %     2.79 %     2.97 %     2.85 %
Non-interest expense to average assets (non-GAAP)     2.91 %     2.97 %     2.75 %     2.94 %     2.83 %
                                         
Return on average assets (GAAP)     1.93 %     1.70 %     1.53 %     1.82 %     1.56 %
Return on average assets (non-GAAP)     1.88 %     1.75 %     1.56 %     1.82 %     1.58 %
                                         
Return on average equity (GAAP)     15.60 %     13.96 %     10.91 %     14.79 %     11.17 %
Return on average equity (non-GAAP)     15.22 %     14.38 %     11.10 %     14.80 %     11.27 %

 

Primary Logo

View Comments and Join the Discussion!