Community Bank System Reports Third Quarter 2018 Results
Community Bank System, Inc. (NYSE:CBU) reported third quarter 2018 net
income of $43.1 million and fully diluted earnings per share of $0.83.
This compares to $35.2 million of net income or $0.68 per share for the
third quarter of 2017. The $0.15, or 22.1%, increase in earnings per
share was attributable to higher net interest income, higher noninterest
revenues and a lower effective tax rate, offset in part by higher
operating expenses and an increase in fully-diluted shares outstanding.
Excluding unrealized gains on equity securities, loss on debt
extinguishment and acquisition expenses, third quarter 2018 fully
diluted operating earnings per share of $0.81 increased $0.12 per share,
or 17.4%, as compared to the third quarter of 2017 fully diluted
operating earnings per share of $0.69.
On a linked quarter basis, fully-diluted earnings per share decreased
$0.03, or 3.5%, from $0.86 in the second quarter of 2018. An increase in
non-banking fee revenues and a modest decrease in operating expenses
were offset by a decrease in net interest income, lower banking-related
noninterest revenues due entirely to a $0.05 per share impact of Durbin
amendment reductions in debit interchange fees and higher income tax
expense.
Third Quarter 2018 Performance Highlights:
- Operating EPS of $0.81 up 17.4% over the third quarter of 2017
- Deposit funding costs of 0.13%
- Annualized net loan charge-offs of 0.11%
- Return on assets of 1.61%
- Return on tangible equity of 19.1%
-
Non-banking noninterest revenues up 14.9% over the third quarter of
2017 -
Dividend increase of $0.04 or 11.8%, the 26th consecutive
year of increase
"Our solid third quarter and year-to-date operating results were again
driven by productive loan origination activity in our business and
consumer lending portfolios, a continuation of exceptional credit
quality, disciplined expense management and continued growth in our
non-interest income generation," said President and Chief Executive
Officer Mark E. Tryniski. "We continued to successfully handle the
blocking and tackling that is necessary to produce solid and consistent
results in our markets. Our cost of funds has increased by only three
basis points over the past 12 months while our earning asset yields have
increased by 10 basis points during that same span. We continue to
demonstrate a consistent commitment to sound underwriting processes as
evidenced by a nonperforming loans ratio of 0.40% at quarter end and net
charge-offs to average loans of just 0.11% for the third quarter. Our
focus on continuing to grow our non-interest income sources produced
noninterest revenues of $55.8 million, or nearly 40% of total revenue,
for the quarter. The strength of our financial position was illustrated
by our Board's decision to increase our quarterly cash dividend by
$0.04, or nearly 12%, to $0.38 per share. Clearly, the payment of a
meaningful and growing dividend remains an important component of our
commitment to provide consistent and favorable long-term returns to our
shareholders. We remain well positioned for a strong finish to 2018 by
continuing to focus on the activities which create value for our
shareholders."
Total revenues for the third quarter of 2018 were $142.0 million, an
increase of $4.7 million, or 3.4%, over the third quarter of 2017. The
Company recorded a $1.8 million, or 2.1%, increase in net interest
income and a $2.9 million, or 5.4%, increase in noninterest revenues.
The increase in net interest income was due to a 20 basis point increase
in the yield on loans, offset in part by a decrease in average earning
assets, lower investment securities yields and slightly higher funding
costs. The increase in noninterest revenues was due to organic revenue
growth in our employee benefit services business, as well as acquired
and organic growth in our wealth management and insurance businesses.
This was partially offset by lower banking business noninterest
revenues. Deposit service fees decreased $2.3 million, or 12.4%, due
primarily to a $3.4 million, or $0.05 per share, impact of Durbin
amendment mandated debit interchange price restrictions.
On a linked quarter basis, total revenues decreased $1.4 million, or
1.0%. Net interest income was down $0.6 million, or 0.7%, and
noninterest revenues were down $0.8 million, or 1.4%. Banking-related
noninterest revenues were down $2.0 million, while non-banking
noninterest revenues were up $1.3 million. During the third quarter of
2018, the Company recorded $0.7 million in unrealized gains on equity
securities and $0.3 million in loss on extinguishment of trust preferred
debt associated with the accelerated amortization of debt issuance
costs. Other banking noninterest revenues were down $2.5 million due to
the aforementioned decrease in debit interchange fees. Insurance and
wealth management revenues were up $0.5 million and employee benefits
services revenues were up $0.7 million.
The Company recorded a $2.2 million provision for loan losses in the
third quarter 2018. This compares to a $2.3 million provision for loan
losses recorded in the third quarter of 2017 and $2.4 million in the
second quarter of 2018. The non-performing loan to total loans ratio was
0.40% at the end of the third quarter of 2018, as compared to 0.37% at
the end of the third quarter of 2017 and 0.47% at the end of the linked
second quarter of 2018.
Total operating expenses for the third quarter of 2018 were $85.2
million. This compares to $83.8 million in total operating expenses
recorded in the third quarter of 2017. The increase in total operating
expenses is primarily reflective of merit and incentive-based increases
in salaries and employee benefits and increased occupancy and equipment
expense, offset by a decrease in amortization of intangible assets.
Excluding acquisition expenses, operating expenses increased $2.9
million, or 3.4%, compared to the third quarter of 2017. During the
third quarter of 2018, the Company recovered $0.8 million of vendor
contract termination charges that were recorded in acquisition expenses
during the second quarter of 2017. This compared to $0.6 million of
acquisition expenses recorded in the third quarter of 2017.
On a linked quarter basis, total operating expenses of $85.2 million
decreased $0.9 million, or 1.0%, from the previous quarter's level.
Salaries and employee benefits expense decreased $1.3 million between
the linked quarters and acquisition expenses decreased $0.9 million due
to the aforementioned recovery of vendor contract termination charges,
while occupancy and equipment and other expenses increased compared to
the linked quarter. Excluding acquisition expenses, operating expenses
were consistent with the linked quarter.
The Company generated net interest income of $86.2 million during the
third quarter of 2018. This represents an increase of $1.8 million, or
2.1%, compared to the third quarter of 2017. Interest income on loans
was up $2.8 million or 4.0%, while interest income on investments,
including cash equivalents, was down $0.3 million or 1.8%. Interest
expense increased $0.6 million, or 15.0%, as deposit and borrowing costs
increased. Net interest margin increased seven basis points, from 3.64%
in the third quarter of 2017 to 3.71% in the third quarter of 2018.
Earning asset yields increased 10 basis points, from 3.81% in the third
quarter of 2017 to 3.91% in the third quarter of 2018. Average loan
yields increased 20 basis points from 4.37% to 4.57% over the same
periods due largely to an increase in market interest rates, including
four 25 basis point increases in the Prime rate. Conversely, investment
yields, including cash equivalents, decreased 14 basis points, from
2.68% to 2.54% between comparable quarterly periods as higher yielding
investment securities matured and were not replaced with securities with
similar yields. In addition, the tax-equivalent yield on non-taxable
municipal securities and loans decreased due to the decrease in the
statutory Federal corporate tax rate between the periods. The Company's
cost of funds increased three basis points, from 0.18% in the third
quarter of 2017 to 0.21% in the third quarter of 2018. The Company's
cost of deposits also remained low at 0.13% during the third quarter of
2018, versus 0.10% in the third quarter of 2017.
Net interest income decreased $0.6 million, or 0.7%, on a linked quarter
basis. Interest income on loans was up $1.1 million due primarily to a
$39.1 million increase in average loans outstanding. Interest income on
investment securities, including cash equivalents, was down $1.2 million
due to both a decrease in average outstanding balances and a decrease in
the average yield on the portfolio. Net interest margin decreased two
basis points from 3.73% in the second quarter of 2018 to 3.71% in the
third quarter. The yield on earning assets remained flat between the
linked quarters at 3.91%, while the total cost of funds increased two
basis points from 0.19% in the second quarter to 0.21% in the third
quarter. During the second quarter, the Company's net interest margin
benefited from receipt of a $0.5 million Federal Reserve Bank
semi-annual dividend payment and $0.5 million of acquired impaired loan
accretion, which were not present in the third quarter results.
The Company generated $14.4 million of wealth management and insurance
services revenues in the third quarter of 2018. This represents a $2.4
million, or 19.8%, increase over the third quarter 2017 revenues of
$12.1 million. Between the third quarter of 2017 and the third quarter
of 2018, the Company acquired four small insurance and wealth management
practices contributing to revenue growth. Employee benefit services
revenues of $23.3 million, increased $2.5 million, or 12.0%, from the
third quarter of 2017. These results were attributable to organic
increases in plan asset and participant levels. On a linked quarter
basis, wealth management and insurance services revenues were up $0.5
million and employee benefits services revenues were up $0.7 million.
The effective tax rate for the third quarter of 2018 was 21.0%, down
from 31.2% in the third quarter of last year. The decrease in the
effective tax rate was largely attributable to the application of the
lower federal tax rate due to the Tax Cuts and Jobs Act passed in the
fourth quarter of 2017. The effective tax rate for the second quarter of
2018 was 18.7%. During the second quarter, the Company experienced
higher levels of stock option exercise activity, resulting in an income
tax benefit of $1.2 million, as compared to a $0.3 million benefit in
the third quarter of 2018.
The Company also provides supplemental reporting of its results on a
"net adjusted" or "tangible" basis, from which it excludes the after-tax
effect of amortization of core deposit and other intangible assets (and
the related goodwill, core deposit intangible and other intangible asset
balances, net of applicable deferred tax amounts), accretion on
non-impaired purchased loans, acquisition expenses, the unrealized
gain(loss) on equity securities, loss on debt extinguishment and the
one-time benefit from the revaluation of net deferred tax liabilities.
The amounts for such items are presented in the tables that accompany
this release. Although "adjusted net income" as defined by the Company
is a non-GAAP measure, the Company's management believes this
information helps investors understand the effect of certain activities
in its reported results. Diluted adjusted net earnings per share were
$0.84 in the third quarter of 2018, compared to $0.73 in the third
quarter of 2017, or a 15.1% increase.
Financial Position
Average earning assets were down $122.2 million, or 1.3%, on a linked
quarter basis, from $9.45 billion during the second quarter of 2018 to
$9.33 billion during the third quarter of 2018. Average loan balances
were $6.29 billion for the third quarter, up 0.6% over the second
quarter. Average deposit balances were down $155.5 million, or 1.8%,
from second quarter levels, due largely to a seasonal outflow of
municipal deposits and increased utilization of the Company's off
balance sheet mutual fund sweep product. Ending deposits were also down
$50.2 million or 0.6%. Average borrowings in the third quarter of 2018
of $393.5 million, were down slightly from the second quarter average of
$397.1 million. During the third quarter, the Company redeemed $25.2
million of subordinated debt and associated preferred securities,
experienced a decline in average repurchase agreement balances of $51.1
million as seasonally expected and increased its average overnight
borrowings by $64.2 million, as compared to the linked second quarter.
Ending loans at September 30, 2018 were $6.30 billion. This was up $62.9
million, or 1.0%, from the end of the second quarter and $44.1 million,
or 0.7%, from the end of the fourth quarter of 2017. During the third
quarter, outstanding balances in our business lending, consumer
mortgage, consumer indirect and consumer direct portfolios increased,
while home equity balances decreased. The business lending portfolio
increased $19.0 million, or 0.8%, during the quarter. Ending loans in
the municipal sector of our business loan portfolio increased $43.1
million from the end of the second quarter, consistent with the fiscal
cycle of our municipal customers. Growth in the consumer loan portfolios
was consistent with seasonal expectations. On a combined basis, the
consumer loan portfolios were up $43.9 million or 1.1%.
The carrying value of investment securities totaled $2.95 billion at
September 30, 2018, down $35.3 million, or 1.2%, from the end of the
linked second quarter of 2018 and down $133.3 million or 4.3% from the
fourth quarter of 2017. The net unrealized loss in this portfolio was
$52.8 million at September 30, 2018 and $32.7 million at June 30, 2018.
These compare to a net unrealized gain of $23.9 million at December 31,
2017. The portfolio transitioned from a net unrealized gain position in
December 2017 to a net unrealized loss position during 2018 due to an
increase in market interest rates. The effective duration of the
portfolio was 3.5 years at the end of the third quarter.
Shareholders' equity of $1.67 billion at September 30, 2018 was $75.1
million, or 4.7%, higher than September 30, 2017. The Company's net
tangible equity to net tangible assets ratio was 9.13% at September 30,
2018, up from 8.36% a year earlier and 9.00% at the end of the second
quarter of 2018. The Company's Tier 1 leverage ratio was 10.72% at the
end of the third quarter, up from 9.54% a year earlier. These results
are primarily due to strong earnings generation and capital retention
over the last four quarters.
As previously announced in December 2017, the Company's Board of
Directors approved a stock repurchase program authorizing the repurchase
of up to 2.5 million shares of the Company's common stock during a
twelve-month period starting January 1, 2018. Such repurchases may be
made at the discretion of the Company's senior management based on
market conditions and other relevant factors and will be acquired
through open market or privately negotiated transactions as permitted
under Rule 10b-18 of the Securities Exchange Act of 1934 and other
applicable legal requirements. There were no shares repurchased pursuant
to the program in the third quarter of 2018.
Asset Quality
The Company's asset quality metrics continue to illustrate the long-term
effectiveness of the Company's disciplined risk management and
underwriting standards. Total net charge-offs were $1.7 million for the
third quarter, compared to $1.8 million for the third quarter of 2017
and $0.9 million for the second quarter of 2018. Net charge-offs as an
annualized percentage of average loans equaled 0.11% in both the third
quarter of 2018 and the third quarter of 2017, versus 0.06% in the
second quarter of 2018. Nonperforming loans as a percentage of total
loans at September 30, 2018 were 0.40%, compared to 0.47% at June 30,
2018 and 0.37% at September 30, 2017. The total loan delinquency ratio
of 0.93% at the end of the third quarter was four basis points higher
than the level at June 30, 2018, and 12 basis points lower than the
1.05% ratio one year earlier. The third quarter provision for loan
losses of $2.2 million was $0.1 million lower than the third quarter of
2017, and $0.2 million lower than the second quarter of 2018. The
allowance for loan losses to nonperforming loans was 201% at September
30, 2018, compared with 169% and 205% at the end of the second quarter
of 2018 and third quarter of 2017, respectively.
Dividend Increase
During the third quarter of 2018, the Company declared a quarterly cash
dividend of $0.38 per share on its common stock, a $0.04 or 11.8%
increase from the $0.34 dividend declared in the third quarter of 2017,
which represents an annualized yield of 2.62% based upon the $58.10
closing price of the Company's stock on October 19, 2018. The four cent
increase declared in the third quarter of 2018 marked the 26th
consecutive year of dividend increases for the Company. "The dividend
increase is supported by growing earnings and cash flow results that are
expected to further strengthen the Company's capital accumulation and
dividend capacity into the future," said Mark E. Tryniski, President and
Chief Executive Officer.
Conference Call Scheduled
Company management will conduct an investor call at 11:00 a.m. (ET)
today, October 22, 2018, to discuss third quarter 2018 results. The
conference call can be accessed at 866-548-2699 (323-994-2131 if outside
United States and Canada) using the conference ID code 7938797.
Investors may also listen live via the Internet at: http://www.webcaster4.com/Webcast/Page/995/27591.
This earnings release, including supporting financial tables, is
available within the press releases section of the Company's investor
relations website at: http://ir.communitybanksystem.com.
An archived webcast of the earnings call will be available on this site
for one full year.
Community Bank System, Inc. operates more than 230 customer facilities
across Upstate New York, Northeastern Pennsylvania, Vermont, and Western
Massachusetts through its banking subsidiary, Community Bank, N.A. With
assets of over $10.6 billion, the DeWitt, N.Y. headquartered company is
among the country's 150 largest financial institutions. In addition to a
full range of retail, business, and municipal banking services, the
Company offers comprehensive financial planning, insurance and wealth
management services through its' Community Bank Wealth Management Group
and OneGroup NY, Inc. operating subsidiaries. The Company's Benefit
Plans Administrative Services, Inc. subsidiary is a leading provider of
employee benefits administration, trust services, collective investment
fund administration and actuarial consulting services to customers on a
national scale. Community Bank System, Inc. is listed on the New York
Stock Exchange and the Company's stock trades under the symbol CBU. For
more information about Community Bank visit www.communitybankna.com
or http://ir.communitybanksystem.com.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The
following factors, among others, could cause the actual results of CBU's
operations to differ materially from CBU's expectations: the successful
integration of operations of its acquisitions; competition; changes in
economic conditions, interest rates and financial markets; changes in
legislation or regulatory requirements; and the timing for receiving
regulatory approvals and completing pending transactions. These
statements are based on the current beliefs and expectations of CBU's
management and CBU does not assume any duty to update forward-looking
statements.
|
Summary of Financial Data |
|||||||||||||
|
(Dollars in thousands, except per share data) |
|||||||||||||
| Quarter Ended | Year-to-Date | ||||||||||||
|
September 30, |
September 30, |
September 30, |
September 30, |
||||||||||
| Earnings | |||||||||||||
| Loan income | $72,256 | $69,498 | $212,849 | $184,233 | |||||||||
| Investment income | 18,647 | 18,989 | 57,463 | 55,634 | |||||||||
| Total interest income | 90,903 | 88,487 | 270,312 | 239,867 | |||||||||
| Interest expense | 4,705 | 4,092 | 12,644 | 10,169 | |||||||||
| Net interest income | 86,198 | 84,395 | 257,668 | 229,698 | |||||||||
| Provision for loan losses | 2,215 | 2,314 | 8,342 | 5,603 | |||||||||
| Net interest income after provision for loan losses | 83,983 | 82,081 | 249,326 | 224,095 | |||||||||
| Deposit service fees | 16,127 | 18,419 | 54,268 | 49,781 | |||||||||
| Revenues from mortgage banking and other banking services | 1,536 | 1,704 | 3,942 | 4,270 | |||||||||
| Wealth management and insurance services | 14,438 | 12,051 | 42,414 | 35,814 | |||||||||
| Employee benefit services | 23,265 | 20,767 | 68,813 | 58,618 | |||||||||
| Gain on sale of investments | 0 | 0 | 0 | 2 | |||||||||
| Unrealized gain on equity securities | 743 | 0 | 722 | 0 | |||||||||
| Loss on debt extinguishment | (318) | 0 | (318) | 0 | |||||||||
| Total noninterest revenues | 55,791 | 52,941 | 169,841 | 148,485 | |||||||||
| Salaries and employee benefits | 51,062 | 48,426 | 155,323 | 137,897 | |||||||||
| Occupancy and equipment | 9,770 | 9,106 | 29,738 | 25,939 | |||||||||
| Amortization of intangible assets | 4,427 | 4,949 | 13,780 | 11,980 | |||||||||
| Acquisition expenses | (832) | 580 | (769) | 25,192 | |||||||||
| Other | 20,806 | 20,715 | 59,604 | 59,222 | |||||||||
| Total operating expenses | 85,233 | 83,776 | 257,676 | 260,230 | |||||||||
| Income before income taxes | 54,541 | 51,246 | 161,491 | 112,350 | |||||||||
| Income taxes | 11,435 | 16,003 | 33,673 | 33,659 | |||||||||
| Net income | $43,106 | $35,243 | $127,818 | $78,691 | |||||||||
| Basic earnings per share | $0.84 | $0.69 | $2.49 | $1.62 | |||||||||
| Diluted earnings per share | $0.83 | $0.68 | $2.46 | $1.60 | |||||||||
|
Summary of Financial Data |
||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
| Earnings | ||||||||||||||||
| Loan income | $72,256 | $71,152 | $69,441 | $69,716 | $69,498 | |||||||||||
| Investment income | 18,647 | 19,853 | 18,963 | 19,872 | 18,989 | |||||||||||
| Total interest income | 90,903 | 91,005 | 88,404 | 89,588 | 88,487 | |||||||||||
| Interest expense | 4,705 | 4,159 | 3,780 | 3,611 | 4,092 | |||||||||||
| Net interest income | 86,198 | 86,846 | 84,624 | 85,977 | 84,395 | |||||||||||
| Provision for loan losses | 2,215 | 2,448 | 3,679 | 5,381 | 2,314 | |||||||||||
| Net interest income after provision for loan losses | 83,983 | 84,398 | 80,945 | 80,596 | 82,081 | |||||||||||
| Deposit service fees | 16,127 | 18,964 | 19,177 | 18,115 | 18,419 | |||||||||||
| Revenues from mortgage banking and other banking services | 1,536 | 1,163 | 1,243 | 1,196 | 1,704 | |||||||||||
| Wealth management and insurance services | 14,438 | 13,911 | 14,065 | 12,415 | 12,051 | |||||||||||
| Employee benefit services | 23,265 | 22,542 | 23,006 | 22,212 | 20,767 | |||||||||||
| Unrealized gain(loss) on equity securities | 743 | (21) | 0 | 0 | 0 | |||||||||||
| Loss on debt extinguishment | (318) | 0 | 0 | 0 | 0 | |||||||||||
| Total noninterest revenues | 55,791 | 56,559 | 57,491 | 53,938 | 52,941 | |||||||||||
| Salaries and employee benefits | 51,062 | 52,402 | 51,859 | 49,006 | 48,426 | |||||||||||
| Occupancy and equipment | 9,770 | 9,437 | 10,531 | 9,622 | 9,106 | |||||||||||
| Amortization of intangible assets | 4,427 | 4,555 | 4,798 | 4,961 | 4,949 | |||||||||||
| Acquisition expenses | (832) | 71 | (8) | 794 | 580 | |||||||||||
| Other | 20,806 | 19,647 | 19,151 | 22,536 | 20,715 | |||||||||||
| Total operating expenses | 85,233 | 86,112 | 86,331 | 86,919 | 83,776 | |||||||||||
| Income before income taxes | 54,541 | 54,845 | 52,105 | 47,615 | 51,246 | |||||||||||
| Income taxes | 11,435 | 10,239 | 11,999 | (24,411) | 16,003 | |||||||||||
| Net income | $43,106 | $44,606 | $40,106 | $72,026 | $35,243 | |||||||||||
| Basic earnings per share | $0.84 | $0.87 | $0.78 | $1.41 | $0.69 | |||||||||||
| Diluted earnings per share | $0.83 | $0.86 | $0.78 | $1.40 | $0.68 | |||||||||||
| Profitability | ||||||||||||||||
| Return on assets | 1.61% | 1.66% | 1.52% | 2.66% | 1.29% | |||||||||||
| Return on equity | 10.28% | 10.91% | 10.00% | 17.88% | 8.81% | |||||||||||
| Return on tangible equity(2) | 19.06% | 20.58% | 19.11% | 34.11% | 16.74% | |||||||||||
| Noninterest revenues/operating revenues (FTE) (1) | 39.4% | 39.7% | 40.7% | 38.4% | 38.4% | |||||||||||
| Efficiency ratio | 58.0% | 57.2% | 57.8% | 57.8% | 56.8% | |||||||||||
| Components of Net Interest Margin (FTE) | ||||||||||||||||
| Loan yield | 4.57% | 4.58% | 4.53% | 4.43% | 4.37% | |||||||||||
| Cash equivalents yield | 1.60% | 1.73% | 1.54% | 1.19% | 1.09% | |||||||||||
| Investment yield | 2.55% | 2.65% | 2.60% | 2.81% | 2.69% | |||||||||||
| Earning asset yield | 3.91% | 3.91% | 3.87% | 3.89% | 3.81% | |||||||||||
| Interest-bearing deposit rate | 0.18% | 0.15% | 0.14% | 0.14% | 0.14% | |||||||||||
| Borrowing rate | 1.96% | 1.80% | 1.48% | 1.32% | 1.44% | |||||||||||
| Cost of all interest-bearing funds | 0.29% | 0.25% | 0.23% | 0.22% | 0.24% | |||||||||||
| Cost of funds (includes DDA) | 0.21% | 0.19% | 0.17% | 0.16% | 0.18% | |||||||||||
| Net interest margin (FTE) | 3.71% | 3.73% | 3.71% | 3.74% | 3.64% | |||||||||||
| Fully tax-equivalent adjustment | $1,071 | $1,094 | $1,118 | $2,375 | $2,381 | |||||||||||
|
Summary of Financial Data |
||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
| Average Balances | ||||||||||||||||
| Loans | $6,289,868 | $6,250,739 | $6,237,824 | $6,274,679 | $6,343,468 | |||||||||||
| Cash equivalents | 26,832 | 170,745 | 90,406 | 34,223 | 26,986 | |||||||||||
| Taxable investment securities | 2,574,116 | 2,575,962 | 2,583,446 | 2,572,703 | 2,571,459 | |||||||||||
| Nontaxable investment securities | 441,719 | 457,254 | 468,773 | 491,578 | 511,182 | |||||||||||
| Total interest-earning assets | 9,332,535 | 9,454,700 | 9,380,449 | 9,373,183 | 9,453,095 | |||||||||||
| Total assets | 10,619,872 | 10,752,203 | 10,715,529 | 10,757,836 | 10,862,613 | |||||||||||
| Interest-bearing deposits | 6,077,581 | 6,282,098 | 6,219,052 | 6,206,663 | 6,230,591 | |||||||||||
| Borrowings | 393,483 | 397,101 | 453,114 | 449,377 | 541,036 | |||||||||||
| Total interest-bearing liabilities | 6,471,064 | 6,679,199 | 6,672,166 | 6,656,040 | 6,771,627 | |||||||||||
| Noninterest-bearing deposits | 2,336,778 | 2,287,722 | 2,268,778 | 2,307,155 | 2,307,205 | |||||||||||
| Shareholders' equity | 1,664,234 | 1,640,076 | 1,625,951 | 1,598,056 | 1,587,279 | |||||||||||
| Balance Sheet Data | ||||||||||||||||
| Cash and cash equivalents | $256,838 | $250,154 | $543,899 | $221,038 | $241,480 | |||||||||||
| Investment securities | 2,948,057 | 2,983,352 | 3,032,642 | 3,081,379 | 3,125,218 | |||||||||||
| Loans: | ||||||||||||||||
| Business lending | 2,403,624 | 2,384,629 | 2,426,086 | 2,424,223 | 2,458,981 | |||||||||||
| Consumer mortgage | 2,220,022 | 2,210,051 | 2,211,882 | 2,220,298 | 2,206,527 | |||||||||||
| Consumer indirect | 1,098,943 | 1,063,679 | 1,008,198 | 1,011,978 | 1,034,716 | |||||||||||
| Home equity | 393,950 | 398,433 | 407,832 | 420,329 | 424,598 | |||||||||||
| Consumer direct | 184,349 | 181,217 | 173,032 | 179,929 | 183,898 | |||||||||||
| Total loans | 6,300,888 | 6,238,009 | 6,227,030 | 6,256,757 | 6,308,720 | |||||||||||
| Allowance for loan losses | 50,133 | 49,618 | 48,103 | 47,583 | 47,983 | |||||||||||
| Intangible assets, net | 811,700 | 816,127 | 820,584 | 825,088 | 824,355 | |||||||||||
| Other assets | 392,217 | 395,070 | 390,503 | 409,519 | 398,428 | |||||||||||
| Total assets | 10,659,567 | 10,633,094 | 10,966,555 | 10,746,198 | 10,850,218 | |||||||||||
| Deposits: | ||||||||||||||||
| Noninterest-bearing | 2,346,932 | 2,332,745 | 2,372,824 | 2,293,057 | 2,310,954 | |||||||||||
| Non-maturity interest-bearing | 5,366,488 | 5,439,101 | 5,642,109 | 5,377,059 | 5,495,377 | |||||||||||
| Time | 750,401 | 742,147 | 756,159 | 774,304 | 799,659 | |||||||||||
| Total deposits | 8,463,821 | 8,513,993 | 8,771,092 | 8,444,420 | 8,605,990 | |||||||||||
| Borrowings | 276,559 | 183,785 | 281,744 | 363,082 | 314,289 | |||||||||||
| Subordinated debt held by unconsolidated subsidiary trusts | 97,939 | 122,826 | 122,820 | 122,814 | 122,808 | |||||||||||
| Accrued interest and other liabilities | 152,903 | 155,531 | 159,433 | 180,567 | 213,886 | |||||||||||
| Total liabilities | 8,991,222 | 8,976,135 | 9,335,089 | 9,110,883 | 9,256,973 | |||||||||||
| Shareholders' equity | 1,668,345 | 1,656,959 | 1,631,466 | 1,635,315 | 1,593,245 | |||||||||||
| Total liabilities and shareholders' equity | 10,659,567 | 10,633,094 | 10,966,555 | 10,746,198 | 10,850,218 | |||||||||||
| Capital | ||||||||||||||||
| Tier 1 leverage ratio | 10.72% | 10.53% | 10.19% | 10.00% | 9.54% | |||||||||||
| Tangible equity/net tangible assets (2) | 9.13% | 9.00% | 8.42% | 8.61% | 8.36% | |||||||||||
| Diluted weighted average common shares O/S | 52,086 | 51,939 | 51,677 | 51,569 | 51,526 | |||||||||||
| Period end common shares outstanding | 51,137 | 51,086 | 50,884 | 50,696 | 50,587 | |||||||||||
| Cash dividends declared per common share | $0.38 | $0.34 | $0.34 | $0.34 | $0.34 | |||||||||||
| Book value | $32.63 | $32.43 | $32.06 | $32.26 | $31.50 | |||||||||||
| Tangible book value(2) | $17.67 | $17.39 | $16.88 | $16.94 | $16.70 | |||||||||||
| Common stock price (end of period) | $61.07 | $59.07 | $53.56 | $53.75 | $55.25 | |||||||||||
|
Summary of Financial Data |
||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
| Asset Quality | ||||||||||||||||
| Nonaccrual loans | $21,982 | $22,807 | $23,239 | $24,740 | $21,510 | |||||||||||
| Accruing loans 90+ days delinquent | 2,951 | 6,532 | 6,425 | 2,706 | 1,861 | |||||||||||
| Total nonperforming loans | 24,933 | 29,339 | 29,664 | 27,446 | 23,371 | |||||||||||
| Other real estate owned (OREO) | 1,142 | 1,310 | 1,865 | 1,915 | 1,873 | |||||||||||
| Total nonperforming assets | 26,075 | 30,649 | 31,529 | 29,361 | 25,244 | |||||||||||
| Net charge-offs | 1,700 | 933 | 3,159 | 5,781 | 1,782 | |||||||||||
| Allowance for loan losses/loans outstanding | 0.80% | 0.80% | 0.77% | 0.76% | 0.76% | |||||||||||
| Nonperforming loans/loans outstanding | 0.40% | 0.47% | 0.48% | 0.44% | 0.37% | |||||||||||
| Allowance for loan losses/nonperforming loans | 201% | 169% | 162% | 173% | 205% | |||||||||||
| Net charge-offs/average loans | 0.11% | 0.06% | 0.21% | 0.37% | 0.11% | |||||||||||
| Delinquent loans/ending loans | 0.93% | 0.89% | 1.01% | 1.10% | 1.05% | |||||||||||
| Loan loss provision/net charge-offs | 130% | 262% | 116% | 93% | 130% | |||||||||||
| Nonperforming assets/total assets | 0.24% | 0.29% | 0.29% | 0.27% | 0.23% | |||||||||||
| Asset Quality (excluding loans acquired since 1/1/09) | ||||||||||||||||
| Nonaccrual loans | $14,684 | $14,644 | $15,161 | $16,020 | $15,069 | |||||||||||
| Accruing loans 90+ days delinquent | 2,688 | 6,243 | 5,894 | 2,502 | 1,589 | |||||||||||
| Total nonperforming loans | 17,372 | 20,887 | 21,055 | 18,522 | 16,658 | |||||||||||
| Other real estate owned (OREO) | 859 | 1,025 | 1,336 | 1,221 | 1,257 | |||||||||||
| Total nonperforming assets | 18,231 | 21,912 | 22,391 | 19,743 | 17,915 | |||||||||||
| Net charge-offs | 1,533 | 552 | 1,800 | 2,279 | 1,624 | |||||||||||
| Allowance for loan losses/loans outstanding | 0.96% | 0.98% | 0.97% | 0.98% | 1.00% | |||||||||||
| Nonperforming loans/loans outstanding | 0.35% | 0.43% | 0.45% | 0.40% | 0.36% | |||||||||||
| Allowance for loan losses/nonperforming loans | 274% | 225% | 216% | 244% | 276% | |||||||||||
| Net charge-offs/average loans | 0.12% | 0.05% | 0.16% | 0.20% | 0.14% | |||||||||||
| Delinquent loans/ending loans | 0.97% | 0.91% | 1.01% | 1.12% | 1.16% | |||||||||||
| Loan loss provision/net charge-offs | 138% | 364% | 122% | 67% | 125% | |||||||||||
| Nonperforming assets/total assets | 0.20% | 0.24% | 0.24% | 0.22% | 0.20% | |||||||||||
|
Summary of Financial Data |
||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
| Quarterly GAAP to Non-GAAP Reconciliations | ||||||||||||||||
| Income statement data | ||||||||||||||||
| Net income | ||||||||||||||||
| Net income (GAAP) | $43,106 | $44,606 | $40,106 | $72,026 | $35,243 | |||||||||||
| Acquisition expenses | (832) | 71 | (8) | 794 | 580 | |||||||||||
| Tax effect of acquisition expenses | 174 | (13) | 2 | (227) | (181) | |||||||||||
| Tax Cuts and Jobs Act deferred tax impact | 0 | 0 | 0 | (38,010) | 0 | |||||||||||
| Subtotal (non-GAAP) | 42,448 | 44,664 | 40,100 | 34,583 | 35,642 | |||||||||||
| Unrealized (gain)loss on equity securities | (743) | 21 | 0 | 0 | 0 | |||||||||||
| Tax effect of unrealized (gain)loss on equity securities | 156 | (4) | 0 | 0 | 0 | |||||||||||
| Subtotal (non-GAAP) | 41,861 | 44,681 | 40,100 | 34,583 | 35,642 | |||||||||||
| Loss on debt extinguishment | 318 | 0 | 0 | 0 | 0 | |||||||||||
| Tax effect of loss on debt extinguishment | (67) | 0 | 0 | 0 | 0 | |||||||||||
| Subtotal (non-GAAP) | 42,112 | 44,681 | 40,100 | 34,583 | 35,642 | |||||||||||
| Amortization of intangibles | 4,427 | 4,555 | 4,798 | 4,961 | 4,949 | |||||||||||
| Tax effect of amortization of intangibles | (928) | (850) | (1,105) | (1,417) | (1,545) | |||||||||||
| Subtotal (non-GAAP) | 45,611 | 48,386 | 43,793 | 38,127 | 39,046 | |||||||||||
| Acquired non-impaired loan accretion | (1,980) | (2,040) | (2,063) | (1,930) | (1,879) | |||||||||||
| Tax effect of acquired non-impaired loan accretion | 415 | 381 | 475 | 551 | 587 | |||||||||||
| Adjusted net income (non-GAAP) | $44,046 | $46,727 | $42,205 | $36,748 | $37,754 | |||||||||||
| Return on average assets | ||||||||||||||||
| Adjusted net income (non-GAAP) | $44,046 | $46,727 | $42,205 | $36,748 | $37,754 | |||||||||||
| Average total assets | 10,619,872 | 10,752,203 | 10,715,529 | 10,757,836 | 10,862,613 | |||||||||||
| Adjusted return on average assets | 1.65% | 1.74% | 1.60% | 1.36% | 1.38% | |||||||||||
| Return on average equity | ||||||||||||||||
| Adjusted net income (non-GAAP) | $44,046 | $46,727 | $42,205 | $36,748 | $37,754 | |||||||||||
| Average total equity | 1,664,234 | 1,640,076 | 1,625,951 | 1,598,056 | 1,587,279 | |||||||||||
| Adjusted return on average equity | 10.50% | 11.43% | 10.53% | 9.12% | 9.44% | |||||||||||
| Earnings per common share | ||||||||||||||||
| Diluted earnings per share (GAAP) | $0.83 | $0.86 | $0.78 | $1.40 | $0.68 | |||||||||||
| Acquisition expenses | (0.02) | 0.00 | 0.00 | 0.02 | 0.01 | |||||||||||
| Tax effect of acquisition expenses | 0.00 | 0.00 | 0.00 | (0.01) | 0.00 | |||||||||||
| Tax Cuts and Jobs Act deferred tax impact | 0.00 | 0.00 | 0.00 | (0.74) | 0.00 | |||||||||||
| Subtotal (non-GAAP) | 0.81 | 0.86 | 0.78 | 0.67 | 0.69 | |||||||||||
| Unrealized (gain)loss on equity securities | (0.01) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Tax effect of unrealized (gain)loss on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Subtotal (non-GAAP) | 0.80 | 0.86 | 0.78 | 0.67 | 0.69 | |||||||||||
| Loss on debt extinguishment | 0.01 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Tax effect of loss on debt extinguishment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Subtotal (non-GAAP) | 0.81 | 0.86 | 0.78 | 0.67 | 0.69 | |||||||||||
| Amortization of intangibles | 0.08 | 0.09 | 0.09 | 0.10 | 0.10 | |||||||||||
| Tax effect of amortization of intangibles | (0.02) | (0.02) | (0.02) | (0.03) | (0.03) | |||||||||||
| Subtotal (non-GAAP) | 0.87 | 0.93 | 0.85 | 0.74 | 0.76 | |||||||||||
| Acquired non-impaired loan accretion | (0.04) | (0.04) | (0.04) | (0.04) | (0.04) | |||||||||||
| Tax effect of acquired non-impaired loan accretion | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||
| Diluted adjusted net earnings per share (non-GAAP) | 0.84 | 0.90 | 0.82 | 0.71 | 0.73 | |||||||||||
|
Summary of Financial Data |
||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | ||||||||||||
| Quarterly GAAP to Non-GAAP Reconciliations | ||||||||||||||||
| Income statement data (continued) | ||||||||||||||||
| Noninterest operating expenses | ||||||||||||||||
| Noninterest expenses (GAAP) | $85,233 | $86,112 | $86,331 | $86,919 | $83,776 | |||||||||||
| Amortization of intangibles | (4,427) | (4,555) | (4,798) | (4,961) | (4,949) | |||||||||||
| Acquisition expenses | 832 | (71) | 8 | (794) | (580) | |||||||||||
| Total adjusted noninterest expenses (non-GAAP) | $81,638 | $81,486 | $81,541 | $81,164 | $78,247 | |||||||||||
| Efficiency ratio | ||||||||||||||||
| Adjusted noninterest expenses (non-GAAP) - numerator | $81,638 | $81,486 | $81,541 | $81,164 | $78,247 | |||||||||||
| Tax-equivalent net interest income | 87,269 | 87,940 | 85,742 | 88,352 | 86,776 | |||||||||||
| Noninterest revenues | 55,791 | 56,559 | 57,491 | 53,938 | 52,941 | |||||||||||
| Acquired non-impaired loan accretion | (1,980) | (2,040) | (2,063) | (1,930) | (1,879) | |||||||||||
| Unrealized (gain)loss on equity securities | (743) | 21 | 0 | 0 | 0 | |||||||||||
| Loss on debt extinguishment | 318 | 0 | 0 | 0 | 0 | |||||||||||
| Operating revenues (non-GAAP) - denominator | 140,655 | 142,480 | 141,170 | 140,360 | 137,838 | |||||||||||
| Efficiency ratio (non-GAAP) | 58.0% | 57.2% | 57.8% | 57.8% | 56.8% | |||||||||||
| Balance sheet data | ||||||||||||||||
| Total assets | ||||||||||||||||
| Total assets (GAAP) | $10,659,567 | $10,633,094 | $10,966,555 | $10,746,198 | $10,850,218 | |||||||||||
| Intangible assets | (811,700) | (816,127) | (820,584) | (825,088) | (824,355) | |||||||||||
| Deferred taxes on intangible assets | 46,882 | 47,334 | 47,904 | 48,419 | 75,820 | |||||||||||
| Total tangible assets (non-GAAP) | 9,894,749 | 9,864,301 | 10,193,875 | 9,969,529 | 10,101,683 | |||||||||||
| Total common equity | ||||||||||||||||
| Shareholders' Equity (GAAP) | 1,668,345 | 1,656,959 | 1,631,466 | 1,635,315 | 1,593,245 | |||||||||||
| Intangible assets | (811,700) | (816,127) | (820,584) | (825,088) | (824,355) | |||||||||||
| Deferred taxes on intangible assets | 46,882 | 47,334 | 47,904 | 48,419 | 75,820 | |||||||||||
| Total tangible common equity (non-GAAP) | 903,527 | 888,166 | 858,786 | 858,646 | 844,710 | |||||||||||
| Net tangible equity-to-assets ratio at quarter end | ||||||||||||||||
| Total tangible common equity (non-GAAP) - numerator | $903,527 | $888,166 | $858,786 | $858,646 | $844,710 | |||||||||||
| Total tangible assets (non-GAAP) - denominator | 9,894,749 | 9,864,301 | 10,193,875 | 9,969,529 | 10,101,683 | |||||||||||
| Net tangible equity-to-assets ratio at quarter end (non-GAAP) | 9.13% | 9.00% | 8.42% | 8.61% | 8.36% | |||||||||||
|
(1) Excludes unrealized gains and losses on equity securities and loss on debt extinguishment. |
||||||||||||||||
|
(2) Includes deferred tax liabilities related to certain intangible assets. |
||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181022005225/en/
