Third Quarter 2023 Highlights
- Net income for the third quarter of 2023 of
$8.5 million , up from$8.3 million (1) (as adjusted) in the prior quarter and up from$6.4 million in the third quarter of 2022. Net income for the third quarter of 2023 represents a return on average assets of 1.68% and a return on average tangible common equity of 19.74% - Diluted earnings per share for the third quarter of 2023 of
$1.47 , up from$1.43 (1) (as adjusted) in the prior quarter and up from$1.12 in the third quarter of 2022 - Loans held-for-investment (“HFI”) totaled
$1.76 billion as ofSeptember 30, 2023 , an increase of$47.1 million or 2.7% fromJune 30, 2023 and$176.6 million or 11.1% fromDecember 31, 2022 - Provision for credit losses for the third quarter of 2023 of
$0.5 million , compared to net reversal of$7.1 million for the prior quarter and a provision of$1.3 million for the third quarter of 2022. The provision for the third quarter of 2023 primarily relates to a$1.25 million specific reserve for a loan placed on nonaccrual status during the quarter, partially offset by a$520 thousand release of reserve for unfunded commitments that was reclassified from noninterest expense - Total deposits were
$1.77 billion as ofSeptember 30, 2023 , an increase of$70.5 million or 4.1% fromJune 30, 2023 .Federal Home Loan Bank advances increased by$16.0 million as a consequence of funding loan growth. Core deposits were$1.52 billion as ofSeptember 30, 2023 , a decrease of$12.3 million or 0.8% fromJune 30, 2023 - As of
September 30, 2023 , total available liquidity was$1.5 billion or 179% of uninsured deposits, net of collateralized and fiduciary deposit accounts. Total available liquidity is comprised of$274 million of on-balance sheet liquidity (cash and investment securities) and$1.2 billion of unused borrowing capacity - Net interest margin was 4.67% for the third quarter of 2023, as compared to 4.73% for the prior quarter and 4.99% for the third quarter of 2022
- Total cost of deposits was 1.92% for the third quarter of 2023, an increase from 1.59% for the prior quarter and 0.27% in the third quarter of 2022. The spot rate for total deposits was 2.18% as of
September 30, 2023 , compared to 1.67% atJune 30, 2023 . Total cost of funding sources was 2.12% for the third quarter of 2023, an increase from 1.82% in the prior quarter and 0.36% in the third quarter of 2022 - Tangible book value per share was
$30.20 as ofSeptember 30, 2023 , an increase of$1.38 sinceJune 30, 2023 as a result of strong earnings. Tangible book value per share increased 28.6% year-over-year
Sowers added, “We look at this market as an opportunity for
“The Company continues to exhibit successful customer acquisition activity despite a challenging interest rate environment. Additionally, the Company continues to invest in people and infrastructure, including strong risk management, needed to support the continued growth of the CalPrivate franchise,” said
STATEMENT OF INCOME
Net Interest Income
Net interest income for the third quarter of 2023 totaled
Net Interest Margin
Net interest margin for the third quarter of 2023 was 4.67% compared to 4.73% for the prior quarter and 4.99% in the third quarter of 2022. The 6 basis point decrease in net interest margin from the prior quarter was due primarily to higher rates paid on funding sources, partially offset by higher rates on new loan originations and variable rate loans and investment securities. The yield on earning assets was 6.60% for the third quarter of 2023 compared with 6.40% for the prior quarter and the cost of interest-bearing liabilities was 3.24% for the third quarter of 2023 compared to 2.90% in the prior quarter. The cost of total deposits was 1.92% for the third quarter of 2023 compared to 1.59% in the prior quarter. The cost of core deposits, which excludes brokered deposits, was 1.49% in the third quarter of 2023 compared to 1.24% in the prior quarter.
Provision for Credit Losses
The provision for credit losses for the third quarter of 2023 was
Noninterest Income
Noninterest income was
Noninterest Expense
Noninterest expense was
The Company remains committed to making investments in the business, including technology, marketing, and staffing. Inflationary pressures and low unemployment continue to have an impact on rising wages as well as increased costs related to third party service providers, which we proactively monitor and manage.
Provision for Income Tax Expense
Provision for income tax expense was
STATEMENT OF FINANCIAL CONDITION
As of
Asset Quality
As of
As of
Capital Ratios (2)
The Bank’s capital ratios were in excess of the levels established for “well capitalized” institutions and are as follows:
Tier I leverage ratio | 9.98% | 9.75% |
Tier I risk-based capital ratio | 11.03% | 10.77% |
Total risk-based capital ratio | 12.28% | 12.02% |
(2) | ||
About
CalPrivate Bank’s website is www.calprivate.bank.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures in addition to results presented in accordance with GAAP, including adjusted income before provision for income taxes, adjusted net income, adjusted diluted earnings per share (“Adjusted EPS”), efficiency ratio, adjusted efficiency ratio, pretax pre-provision net revenue, average tangible common equity, adjusted return on average assets, return on average tangible common equity and adjusted return on average tangible common equity. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's results of operations and financial condition and to enhance investors’ overall understanding of such results of operations and financial condition, permit investors to effectively analyze financial trends of our business activities, and enhance comparability with peers across the financial services sector. These non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP and should be read in conjunction with the Company’s GAAP financial information. A reconciliation of the most comparable GAAP financial measures to non-GAAP financial measures is included in the accompanying financial tables.
Investor Relations Contacts
President and Chief Executive Officer
(424) 303-4894
Executive Vice President and Chief Financial Officer
(206) 293-3669
Safe Harbor Paragraph
This communication contains expressions of expectations, both implied and explicit, that are “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We caution you that a number of important factors could cause actual results to differ materially from those in the forward-looking statements, especially given the current turmoil in the banking and financial markets. These factors include the effects of depositors withdrawing funds unexpectedly, counterparties being unable to provide liquidity sources that we believe should be available, loan losses, economic conditions and competition in the geographic and business areas in which
CONSOLIDATED BALANCE SHEET (Unaudited) (Dollars in thousands) | ||||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 20,013 | $ | 23,273 | $ | 13,506 | ||||||
Interest-bearing deposits in other financial institutions | 20,508 | 27,566 | 44,776 | |||||||||
Interest-bearing deposits at | 157,807 | 85,020 | 43,891 | |||||||||
Total cash and due from banks | 198,328 | 135,859 | 102,173 | |||||||||
Interest-bearing time deposits with other institutions | 1,500 | 7,661 | 6,157 | |||||||||
Investment securities available for sale | 86,648 | 94,574 | 107,332 | |||||||||
Loans held for sale | 4,071 | 1,982 | 7,789 | |||||||||
Total loans held-for-investment | 1,764,846 | 1,717,705 | 1,487,098 | |||||||||
Allowance for loan losses | (23,789 | ) | (22,588 | ) | (19,092 | ) | ||||||
Loans held-for-investment, net of allowance | 1,741,057 | 1,695,117 | 1,468,006 | |||||||||
8,915 | 8,915 | 7,020 | ||||||||||
Right of use asset | 2,827 | 2,525 | 2,669 | |||||||||
Premises and equipment, net | 1,447 | 1,539 | 2,040 | |||||||||
Servicing assets, net | 2,449 | 2,875 | 3,502 | |||||||||
Accrued interest receivable | 6,877 | 6,118 | 4,262 | |||||||||
Other assets | 20,100 | 19,572 | 15,951 | |||||||||
Total assets | $ | 2,074,219 | $ | 1,976,737 | $ | 1,726,901 | ||||||
Liabilities and Shareholders' Equity | ||||||||||||
Liabilities | ||||||||||||
Noninterest bearing | $ | 595,023 | $ | 657,980 | $ | 763,227 | ||||||
Interest Bearing | 1,174,664 | 1,041,192 | 767,371 | |||||||||
Total deposits | 1,769,687 | 1,699,172 | 1,530,598 | |||||||||
FHLB borrowings | 82,000 | 66,000 | 30,000 | |||||||||
Other borrowings | 17,959 | 17,958 | 17,952 | |||||||||
Accrued interest payable and other liabilities | 29,894 | 26,396 | 13,417 | |||||||||
Total liabilities | 1,899,540 | 1,809,526 | 1,591,967 | |||||||||
Shareholders' equity | ||||||||||||
Common stock | 73,416 | 73,379 | 71,671 | |||||||||
Additional paid-in capital | 3,584 | 3,405 | 3,568 | |||||||||
Retained earnings | 108,757 | 100,281 | 70,386 | |||||||||
Accumulated other comprehensive (loss) income, net | (11,078 | ) | (9,854 | ) | (10,691 | ) | ||||||
Total shareholders' equity | 174,679 | 167,211 | 134,934 | |||||||||
Total liabilities and shareholders' equity | $ | 2,074,219 | $ | 1,976,737 | $ | 1,726,901 | ||||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share amounts) | ||||||||||||||||||||
For the three months ended | Year to Date | |||||||||||||||||||
Interest Income | ||||||||||||||||||||
Loans | $ | 30,568 | $ | 28,270 | $ | 21,028 | $ | 85,066 | $ | 56,205 | ||||||||||
Investment securities | 562 | 560 | 578 | 1,702 | 1,550 | |||||||||||||||
Deposits in other financial institutions | 1,748 | 1,933 | 372 | 4,831 | 711 | |||||||||||||||
Total interest income | 32,878 | 30,763 | 21,978 | 91,599 | 58,466 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 8,210 | 6,581 | 1,011 | 19,715 | 1,748 | |||||||||||||||
Borrowings | 1,413 | 1,474 | 364 | 3,753 | 991 | |||||||||||||||
Total interest expense | 9,623 | 8,055 | 1,375 | 23,468 | 2,739 | |||||||||||||||
Net interest income | 23,255 | 22,708 | 20,603 | 68,131 | 55,727 | |||||||||||||||
Provision (reversal) for credit losses | 471 | (7,149 | ) | 1,316 | (6,605 | ) | 2,118 | |||||||||||||
Net interest income after provision for credit losses | 22,784 | 29,857 | 19,287 | 74,736 | 53,609 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts | 313 | 310 | 306 | 971 | 887 | |||||||||||||||
Net gain on sale of loans | 466 | 171 | 647 | 1,111 | 3,886 | |||||||||||||||
Other noninterest income | 380 | 573 | 452 | 1,596 | 1,184 | |||||||||||||||
Total noninterest income | 1,159 | 1,054 | 1,405 | 3,678 | 5,957 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Compensation and employee benefits | 7,512 | 7,189 | 7,261 | 22,731 | 21,948 | |||||||||||||||
Occupancy and equipment | 781 | 795 | 756 | 2,382 | 2,287 | |||||||||||||||
Data processing | 1,064 | 878 | 993 | 2,886 | 2,469 | |||||||||||||||
Professional services | 564 | (836 | ) | 1,493 | 166 | 4,243 | ||||||||||||||
Other expenses | 1,922 | 776 | 1,224 | 4,037 | 4,222 | |||||||||||||||
Total noninterest expense | 11,843 | 8,802 | 11,727 | 32,202 | 35,169 | |||||||||||||||
Income before provision for income taxes | 12,100 | 22,109 | 8,965 | 46,212 | 24,397 | |||||||||||||||
Provision for income taxes | 3,611 | 6,575 | 2,614 | 13,215 | 7,131 | |||||||||||||||
Net income | $ | 8,489 | $ | 15,534 | $ | 6,351 | $ | 32,997 | $ | 17,266 | ||||||||||
Net income available to common shareholders | $ | 8,422 | $ | 15,407 | $ | 6,306 | $ | 32,763 | $ | 17,115 | ||||||||||
Earnings per share | ||||||||||||||||||||
Basic earnings per share | $ | 1.49 | $ | 2.72 | $ | 1.14 | $ | 5.81 | $ | 3.08 | ||||||||||
Diluted earnings per share | $ | 1.47 | $ | 2.69 | $ | 1.12 | $ | 5.75 | $ | 3.03 | ||||||||||
Average shares outstanding | 5,658,340 | 5,654,435 | 5,549,480 | 5,640,764 | 5,559,122 | |||||||||||||||
Diluted average shares outstanding | 5,709,994 | 5,726,522 | 5,640,841 | 5,697,911 | 5,657,117 | |||||||||||||||
Consolidated average balance sheet, interest, yield and rates (Unaudited) (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
For the three months ended | ||||||||||||||||||||||||||||||||||||
Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | ||||||||||||||||||||||||||||
Interest-Earnings Assets | ||||||||||||||||||||||||||||||||||||
Deposits in other financial institutions | $ | 130,583 | $ | 1,748 | 5.31 | % | $ | 140,939 | $ | 1,933 | 5.50 | % | $ | 77,353 | $ | 372 | 1.91 | % | ||||||||||||||||||
Investment securities | 101,313 | 562 | 2.22 | % | 110,332 | 560 | 2.03 | % | 122,184 | 578 | 1.89 | % | ||||||||||||||||||||||||
Loans, including LHFS | 1,745,113 | 30,568 | 6.95 | % | 1,675,790 | 28,270 | 6.77 | % | 1,438,489 | 21,028 | 5.80 | % | ||||||||||||||||||||||||
Total interest-earning assets | 1,977,009 | 32,878 | 6.60 | % | 1,927,061 | 30,763 | 6.40 | % | 1,638,026 | 21,978 | 5.32 | % | ||||||||||||||||||||||||
Noninterest-earning assets | 28,188 | 32,741 | 27,465 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 2,005,197 | $ | 1,959,802 | $ | 1,665,491 | ||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||||||||||||||
Interest bearing DDA, excluding brokered | 99,243 | 402 | 1.61 | % | 99,334 | 364 | 1.47 | % | 92,769 | 166 | 0.71 | % | ||||||||||||||||||||||||
Savings & MMA, excluding brokered | 657,453 | 4,248 | 2.56 | % | 645,219 | 3,570 | 2.22 | % | 533,902 | 602 | 0.45 | % | ||||||||||||||||||||||||
Time deposits, excluding brokered | 114,437 | 933 | 3.23 | % | 101,241 | 719 | 2.85 | % | 68,832 | 144 | 0.83 | % | ||||||||||||||||||||||||
Total deposits, excluding brokered | 871,133 | 5,583 | 2.54 | % | 845,794 | 4,653 | 2.21 | % | 695,503 | 912 | 0.52 | % | ||||||||||||||||||||||||
Total brokered deposits | 202,644 | 2,627 | 5.14 | % | 155,577 | 1,928 | 4.97 | % | 16,069 | 99 | 2.44 | % | ||||||||||||||||||||||||
Total Interest-Bearing Deposits | 1,073,777 | 8,210 | 3.03 | % | 1,001,371 | 6,581 | 2.64 | % | 711,572 | 1,011 | 0.56 | % | ||||||||||||||||||||||||
FHLB advances | 87,190 | 1,142 | 5.20 | % | 96,626 | 1,202 | 4.99 | % | 15,299 | 92 | 2.39 | % | ||||||||||||||||||||||||
Other borrowings | 17,958 | 271 | 5.99 | % | 17,971 | 272 | 6.07 | % | 17,951 | 272 | 6.06 | % | ||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 1,178,925 | 9,623 | 3.24 | % | 1,115,968 | 8,055 | 2.90 | % | 33,250 | 364 | 4.34 | % | ||||||||||||||||||||||||
Noninterest-bearing deposits | 625,115 | 655,169 | - | 771,167 | ||||||||||||||||||||||||||||||||
Total Funding Sources | 1,804,040 | 9,623 | 2.12 | % | 1,771,137 | 8,055 | 1.82 | % | 1,515,989 | 1,375 | 0.36 | % | ||||||||||||||||||||||||
Noninterest-bearing liabilities | 27,810 | 26,492 | 4,775 | |||||||||||||||||||||||||||||||||
Shareholders' equity | 173,347 | 162,173 | 144,727 | |||||||||||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 2,005,197 | $ | 1,959,802 | $ | 1,665,491 | ||||||||||||||||||||||||||||||
Net interest income/spread | $ | 23,255 | 4.48 | % | $ | 22,708 | 4.58 | % | $ | 20,603 | 4.96 | % | ||||||||||||||||||||||||
Net interest margin | 4.67 | % | 4.73 | % | 4.99 | % | ||||||||||||||||||||||||||||||
Consolidated average balance sheet, interest, yield and rates (Unaudited) (Dollars in thousands) | ||||||||||||||||||||||||
Year to Date | ||||||||||||||||||||||||
Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | |||||||||||||||||||
Interest-Earnings Assets: | ||||||||||||||||||||||||
Deposits in other financial institutions | $ | 131,621 | $ | 4,831 | 4.91 | % | $ | 97,946 | $ | 711 | 0.97 | % | ||||||||||||
Investment securities | 108,071 | 1,702 | 2.10 | % | 119,042 | 1,550 | 1.74 | % | ||||||||||||||||
Loans | 1,673,254 | 85,066 | 6.80 | % | 1,349,382 | 56,205 | 5.57 | % | ||||||||||||||||
Total interest-earning assets | 1,912,946 | 91,599 | 6.40 | % | 1,566,370 | 58,466 | 4.99 | % | ||||||||||||||||
Noninterest-earning assets | 28,581 | 25,751 | ||||||||||||||||||||||
Total Assets | $ | 1,941,527 | $ | 1,592,121 | ||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||
Interest bearing DDA, excluding brokered | 99,734 | 1,109 | 1.49 | % | 86,388 | 235 | 0.36 | % | ||||||||||||||||
Savings & MMA, excluding brokered | 640,803 | 10,196 | 2.13 | % | 507,675 | 1,004 | 0.26 | % | ||||||||||||||||
Time deposits, excluding brokered | 99,685 | 2,108 | 2.83 | % | 68,182 | 371 | 0.73 | % | ||||||||||||||||
Total deposits, excluding brokered | 840,222 | 13,413 | 2.13 | % | 662,245 | 1,610 | 0.33 | % | ||||||||||||||||
Total brokered deposits | 170,256 | 6,302 | 4.95 | % | 15,364 | 138 | 1.20 | % | ||||||||||||||||
Total Interest-Bearing Deposits | 1,010,478 | 19,715 | 2.61 | % | 677,609 | 1,748 | 0.34 | % | ||||||||||||||||
FHLB advances | 77,651 | 2,938 | 5.06 | % | 11,786 | 175 | 1.99 | % | ||||||||||||||||
Other borrowings | 17,969 | 815 | 6.06 | % | 17,949 | 816 | 6.08 | % | ||||||||||||||||
Total Interest-Bearing Liabilities | 1,106,098 | 23,468 | 2.84 | % | 29,735 | 991 | 4.46 | % | ||||||||||||||||
Noninterest-bearing deposits | 649,863 | 737,578 | ||||||||||||||||||||||
Total Funding Sources | 1,755,961 | 23,468 | 1.79 | % | 1,444,921 | 2,739 | 0.25 | % | ||||||||||||||||
Noninterest-bearing liabilities | 24,718 | 12,955 | ||||||||||||||||||||||
Shareholders' equity | 160,848 | 134,245 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 1,941,527 | $ | 1,592,121 | ||||||||||||||||||||
Net interest income/spread | $ | 68,131 | 4.61 | % | $ | 55,727 | 4.74 | % | ||||||||||||||||
Net interest margin | 4.76 | % | 4.76 | % | ||||||||||||||||||||
Condensed Balance Sheets (Unaudited) (Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 198,328 | $ | 135,859 | $ | 211,812 | $ | 128,642 | $ | 102,173 | ||||||||||
Interest-bearing time deposits with other institutions | 1,500 | 7,661 | 7,661 | 7,923 | 6,157 | |||||||||||||||
Investment securities | 86,648 | 94,574 | 103,790 | 104,652 | 107,332 | |||||||||||||||
Loans held for sale | 4,071 | 1,982 | 465 | 7,061 | 7,789 | |||||||||||||||
Total loans held-for-investment | 1,764,846 | 1,717,705 | 1,623,028 | 1,588,248 | 1,487,098 | |||||||||||||||
Allowance for loan losses | (23,789 | ) | (22,588 | ) | (21,135 | ) | (19,152 | ) | (19,092 | ) | ||||||||||
Loans held-for-investment, net of allowance | 1,741,057 | 1,695,117 | 1,601,893 | 1,569,096 | 1,468,006 | |||||||||||||||
Right of use asset | 2,827 | 2,525 | 2,889 | 3,265 | 2,669 | |||||||||||||||
Premises and equipment, net | 1,447 | 1,539 | 1,744 | 1,742 | 2,040 | |||||||||||||||
Other assets and interest receivable | 38,341 | 37,480 | 36,374 | 32,499 | 30,735 | |||||||||||||||
Total assets | $ | 2,074,219 | $ | 1,976,737 | $ | 1,966,628 | $ | 1,854,880 | $ | 1,726,901 | ||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Noninterest Bearing | $ | 595,023 | $ | 657,980 | $ | 639,664 | $ | 691,392 | $ | 763,227 | ||||||||||
Interest Bearing | 1,174,664 | 1,041,192 | 944,102 | 983,730 | 767,371 | |||||||||||||||
Total Deposits | 1,769,687 | 1,699,172 | 1,583,766 | 1,675,122 | 1,530,598 | |||||||||||||||
Borrowings | 99,959 | 83,958 | 209,956 | 17,954 | 47,952 | |||||||||||||||
Accrued interest payable and other liabilities | 29,894 | 26,396 | 20,592 | 18,480 | 13,417 | |||||||||||||||
Total liabilities | 1,899,540 | 1,809,526 | 1,814,314 | 1,711,556 | 1,591,967 | |||||||||||||||
Shareholders' equity | ||||||||||||||||||||
Common stock | 73,416 | 73,379 | 73,254 | 72,221 | 71,671 | |||||||||||||||
Additional paid-in capital | 3,584 | 3,405 | 3,289 | 3,353 | 3,568 | |||||||||||||||
Retained earnings | 108,757 | 100,281 | 84,751 | 77,810 | 70,386 | |||||||||||||||
Accumulated other comprehensive (loss) income | (11,078 | ) | (9,854 | ) | (8,980 | ) | (10,060 | ) | (10,691 | ) | ||||||||||
Total shareholders' equity | 174,679 | 167,211 | 152,314 | 143,324 | 134,934 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 2,074,219 | $ | 1,976,737 | $ | 1,966,628 | $ | 1,854,880 | $ | 1,726,901 | ||||||||||
Book value per common share | $ | 30.63 | $ | 29.32 | $ | 26.83 | $ | 25.60 | $ | 24.12 | ||||||||||
Tangible book value per common share (1) | $ | 30.20 | $ | 28.82 | $ | 26.30 | $ | 25.06 | $ | 23.49 | ||||||||||
Shares outstanding | 5,703,350 | 5,702,637 | 5,676,017 | 5,599,025 | 5,594,380 | |||||||||||||||
(1) Non-GAAP measure. See GAAP to non-GAAP Reconciliation table. | ||||||||||||||||||||
Condensed Statements of Income (Unaudited) (Dollars in thousands, except per share amounts) | |||||||||||||||||||
For the three months ended | |||||||||||||||||||
Interest income | $ | 32,878 | $ | 30,763 | $ | 27,958 | $ | 26,065 | $ | 21,978 | |||||||||
Interest expense | 9,623 | 8,055 | 5,790 | 3,469 | 1,375 | ||||||||||||||
Net interest income | 23,255 | 22,708 | 22,168 | 22,596 | 20,603 | ||||||||||||||
Provision (reversal) for credit losses | 471 | (7,149 | ) | 73 | 60 | 1,316 | |||||||||||||
Net interest income after provision for credit losses | 22,784 | 29,857 | 22,095 | 22,536 | 19,287 | ||||||||||||||
Noninterest income | 1,159 | 1,054 | 1,465 | 1,084 | 1,405 | ||||||||||||||
Compensation and employee benefits | 7,512 | 7,189 | 8,030 | 8,482 | 7,261 | ||||||||||||||
Occupancy and equipment | 781 | 795 | 806 | 820 | 756 | ||||||||||||||
Data processing | 1,064 | 878 | 944 | 942 | 993 | ||||||||||||||
Professional services | 564 | (836 | ) | 438 | 1,018 | 1,493 | |||||||||||||
Other expenses | 1,922 | 776 | 1,339 | 1,813 | 1,224 | ||||||||||||||
Total noninterest expense | 11,843 | 8,802 | 11,557 | 13,075 | 11,727 | ||||||||||||||
Income before provision for income taxes | 12,100 | 22,109 | 12,003 | 10,545 | 8,965 | ||||||||||||||
Income taxes | 3,611 | 6,575 | 3,029 | 3,102 | 2,614 | ||||||||||||||
Net income | $ | 8,489 | $ | 15,534 | $ | 8,974 | $ | 7,443 | $ | 6,351 | |||||||||
Net income available to common shareholders | $ | 8,422 | $ | 15,407 | $ | 8,923 | $ | 7,394 | $ | 6,306 | |||||||||
Earnings per share | |||||||||||||||||||
Basic earnings per share | $ | 1.49 | $ | 2.72 | $ | 1.59 | $ | 1.33 | $ | 1.13 | |||||||||
Diluted earnings per share | $ | 1.47 | $ | 2.69 | $ | 1.57 | $ | 1.31 | $ | 1.12 | |||||||||
Average shares outstanding | 5,658,340 | 5,654,435 | 5,608,193 | 5,551,376 | 5,549,480 | ||||||||||||||
Diluted average shares outstanding | 5,709,994 | 5,726,522 | 5,673,394 | 5,645,355 | 5,640,841 |
Performance Ratios | |||||||||||||||||||
ROAA | 1.68 | % | 3.18 | % | 1.96 | % | 1.68 | % | 1.51 | % | |||||||||
ROAE | 19.43 | % | 38.42 | % | 24.80 | % | 20.89 | % | 17.41 | % | |||||||||
ROATCE (1) | 19.74 | % | 39.14 | % | 25.32 | % | 21.41 | % | 17.84 | % | |||||||||
Net interest margin | 4.67 | % | 4.73 | % | 4.90 | % | 5.17 | % | 4.99 | % | |||||||||
Net interest spread | 4.48 | % | 4.58 | % | 4.80 | % | 5.11 | % | 4.96 | % | |||||||||
Efficiency ratio (1) | 48.51 | % | 37.04 | % | 48.90 | % | 55.22 | % | 53.29 | % | |||||||||
Noninterest expense / average assets | 2.34 | % | 1.80 | % | 2.52 | % | 2.95 | % | 2.79 | % | |||||||||
(1) Non-GAAP measure. See GAAP to non-GAAP Reconciliation table. | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Selected Quarterly Average Balances | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
For the three months ended | ||||||||||||||||||||
Total assets | $ | 2,005,197 | $ | 1,959,802 | $ | 1,857,994 | $ | 1,759,204 | $ | 1,665,491 | ||||||||||
Earning assets | $ | 1,977,009 | $ | 1,927,061 | $ | 1,833,089 | $ | 1,733,577 | $ | 1,638,026 | ||||||||||
Total loans, including loans held for sale | $ | 1,745,113 | $ | 1,675,790 | $ | 1,597,236 | $ | 1,527,863 | $ | 1,438,489 | ||||||||||
Total deposits | $ | 1,698,892 | $ | 1,656,540 | $ | 1,624,777 | $ | 1,574,002 | $ | 1,482,739 | ||||||||||
Total shareholders' equity | $ | 173,347 | $ | 162,173 | $ | 146,778 | $ | 141,330 | $ | 144,727 |
Loan Balances by Type | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Real estate - investor owned | $ | 495,450 | $ | 481,518 | $ | 472,315 | $ | 476,404 | $ | 403,950 | ||||||||||
Real estate - owner occupied | 495,909 | 468,234 | 418,788 | 394,365 | 382,689 | |||||||||||||||
Real estate - multifamily | 159,447 | 150,003 | 141,783 | 130,901 | 136,841 | |||||||||||||||
Real estate - single family | 116,197 | 119,762 | 121,760 | 118,502 | 107,728 | |||||||||||||||
Commercial business | 435,183 | 421,717 | 401,277 | 405,919 | 394,369 | |||||||||||||||
Land and construction | 59,591 | 73,665 | 64,571 | 56,153 | 55,418 | |||||||||||||||
Consumer | 3,069 | 2,806 | 2,534 | 6,004 | 6,103 | |||||||||||||||
Total loans held for investment | $ | 1,764,846 | $ | 1,717,705 | $ | 1,623,028 | $ | 1,588,248 | $ | 1,487,098 |
Deposits by Type | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Noninterest-bearing DDA | $ | 595,023 | $ | 657,980 | $ | 639,664 | $ | 691,392 | $ | 763,227 | ||||||||||
Interest-bearing DDA, excluding brokered | 108,508 | 101,064 | 99,988 | 109,130 | 95,677 | |||||||||||||||
Savings & MMA, excluding brokered | 696,499 | 670,195 | 637,031 | 614,991 | 576,395 | |||||||||||||||
Time deposits, excluding brokered | 122,622 | 105,757 | 77,052 | 54,887 | 56,341 | |||||||||||||||
Total deposits, excluding brokered | 1,522,652 | 1,534,996 | 1,453,735 | 1,470,400 | 1,491,640 | |||||||||||||||
Total brokered deposits | 247,035 | 164,176 | 130,031 | 204,722 | 38,958 | |||||||||||||||
Total deposits | $ | 1,769,687 | $ | 1,699,172 | $ | 1,583,766 | $ | 1,675,122 | $ | 1,530,598 | ||||||||||
(Unaudited) | ||||||||||||||||||||
Rollforward of Allowance for Credit Losses | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
For the three months ended | ||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Beginning balance | $ | 22,588 | $ | 21,135 | $ | 19,152 | $ | 19,092 | $ | 17,776 | ||||||||||
Impact of CECL adoption | - | - | 1,910 | - | - | |||||||||||||||
Provision for loan losses | 1,194 | (7,149 | ) | 73 | 60 | 1,316 | ||||||||||||||
Net (charge-offs) recoveries | 7 | 8,602 | - | - | - | |||||||||||||||
Ending balance | 23,789 | 22,588 | 21,135 | 19,152 | 19,092 | |||||||||||||||
Reserve for unfunded commitments (1) | 1,969 | 2,172 | 2,802 | 1,718 | 1,674 | |||||||||||||||
Total allowance for credit losses | $ | 25,758 | $ | 24,760 | $ | 23,937 | $ | 20,870 | $ | 20,766 | ||||||||||
(1) Includes | ||||||||||||||||||||
Asset Quality | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Total loans held-for-investment | $ | 1,764,846 | $ | 1,717,705 | $ | 1,623,028 | $ | 1,588,248 | $ | 1,487,098 | ||||||||||
Allowance for loan losses | $ | (23,789 | ) | $ | (22,588 | ) | $ | (21,135 | ) | $ | (19,152 | ) | $ | (19,092 | ) | |||||
30-89 day past due loans and still accruing | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
90+ day past due loans and still accruing | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Nonaccrual loans | $ | 5,105 | $ | 3,354 | $ | 4,384 | $ | 3,880 | $ | 4,593 | ||||||||||
NPAs / Assets | 0.25 | % | 0.17 | % | 0.22 | % | 0.21 | % | 0.27 | % | ||||||||||
NPLs / Total loans held-for-investment & OREO | 0.29 | % | 0.20 | % | 0.27 | % | 0.24 | % | 0.31 | % | ||||||||||
Net quarterly charge-offs (recoveries) | $ | (7 | ) | $ | (8,602 | ) | $ | - | $ | - | $ | - | ||||||||
Net charge-offs (recoveries) /avg loans (annualized) | 0.00 | % | (2.05 | )% | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Allowance for loan losses to loans HFI | 1.35 | % | 1.32 | % | 1.30 | % | 1.21 | % | 1.28 | % | ||||||||||
Allowance for loan losses to nonaccrual loans | 465.99 | % | 673.46 | % | 482.09 | % | 493.61 | % | 415.68 | % | ||||||||||
(Unaudited) | ||||||||||||||||||||
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: adjusted income before provision for income taxes, adjusted net income and adjusted EPS. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures. | ||||||||||||||||||||
GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
For the three months ended | Year to Date | |||||||||||||||||||
Adjusted income before provision for income taxes | ||||||||||||||||||||
Income before provision for income taxes | $ | 12,100 | $ | 22,109 | $ | 8,965 | $ | 46,212 | $ | 24,397 | ||||||||||
ANI recovery (1) | - | (7,708 | ) | - | (7,708 | ) | - | |||||||||||||
Settlement of legal fees related to ANI litigation (2) | - | (1,635 | ) | - | (1,635 | ) | - | |||||||||||||
Recovery of principal and interest on a loan acquired with credit deterioration as part of a business combination (3) | - | (986 | ) | - | (986 | ) | - | |||||||||||||
Adjusted income before provision for income taxes (non-GAAP) | $ | 12,100 | $ | 11,780 | $ | 8,965 | $ | 35,883 | $ | 24,397 | ||||||||||
Adjusted net income | ||||||||||||||||||||
Net income | $ | 8,489 | $ | 15,534 | $ | 6,351 | $ | 32,997 | $ | 17,266 | ||||||||||
ANI recovery, net of tax (1)(4) | - | (5,430 | ) | - | (5,430 | ) | - | |||||||||||||
Settlement of legal fees related to ANI litigation, net of tax (2)(4) | - | (1,152 | ) | - | (1,152 | ) | - | |||||||||||||
Recovery of principal and interest on a loan acquired with credit deterioration as part of a business combination, net of tax(3)(4) | - | (694 | ) | - | (694 | ) | - | |||||||||||||
Adjusted net income (non-GAAP) | $ | 8,489 | $ | 8,258 | $ | 6,351 | $ | 25,721 | $ | 17,266 | ||||||||||
Adjusted diluted earnings per share ("Adjusted EPS") | ||||||||||||||||||||
Diluted earnings per share | $ | 1.47 | $ | 2.69 | $ | 1.12 | $ | 5.75 | $ | 3.03 | ||||||||||
ANI recovery, net of tax (1)(4) | - | (0.94 | ) | - | (0.94 | ) | - | |||||||||||||
Settlement of legal fees related to ANI litigation, net of tax (2)(4) | - | (0.20 | ) | - | (0.20 | ) | - | |||||||||||||
Recovery of principal and interest on a loan previously acquired with credit deterioration as part of a business combination, net of tax(3)(4) | - | (0.12 | ) | - | (0.12 | ) | - | |||||||||||||
Adjusted EPS (non-GAAP) | $ | 1.47 | $ | 1.43 | $ | 1.12 | $ | 4.49 | $ | 3.03 | ||||||||||
Diluted average shares outstanding | 5,709,994 | 5,726,522 | 5,640,841 | 5,697,911 | 5,657,117 | |||||||||||||||
(1) In the second quarter of 2023, the Company reached a settlement with the Receiver for ANI Investments and | ||||||||||||||||||||
(2) In the second quarter of 2023, in conjunction with the resolution of the ANI litigation, the Company was reimbursed | ||||||||||||||||||||
(3) In the second quarter of 2023, the Company received | ||||||||||||||||||||
(4) Net of tax effect of 29.6%, which is comprised of 21.0% for the statutory Federal tax rate plus 8.6% for state franchise taxes, net of Federal benefits. | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: efficiency ratio, adjusted efficiency ratio, pretax pre-provision net revenue, average tangible common equity, adjusted return on average assets, return on average tangible common equity and adjusted return on average tangible common equity. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures. | ||||||||||||||||||||
GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
For the three months ended | ||||||||||||||||||||
Efficiency Ratio | ||||||||||||||||||||
Noninterest expense | $ | 11,843 | $ | 8,802 | $ | 11,557 | $ | 13,075 | $ | 11,727 | ||||||||||
Net interest income | 23,255 | 22,708 | 22,168 | 22,596 | 20,603 | |||||||||||||||
Noninterest income | 1,159 | 1,054 | 1,465 | 1,084 | 1,405 | |||||||||||||||
Total net interest income and noninterest income | 24,414 | 23,762 | 23,633 | 23,680 | 22,008 | |||||||||||||||
Efficiency ratio (non-GAAP) | 48.51 | % | 37.04 | % | 48.90 | % | 55.22 | % | 53.29 | % | ||||||||||
Adjusted Efficiency Ratio | ||||||||||||||||||||
Noninterest expense | $ | 11,843 | $ | 8,802 | $ | 11,557 | $ | 13,075 | $ | 11,727 | ||||||||||
Settlement of legal fees related to ANI litigation | - | 1,635 | - | - | - | |||||||||||||||
Adjusted noninterest expense (non-GAAP) | 11,843 | 10,437 | 11,557 | 13,075 | 11,727 | |||||||||||||||
Total net interest income and noninterest income | 24,414 | 23,762 | 23,633 | 23,680 | 22,008 | |||||||||||||||
Recovery of interest on a loan acquired with credit deterioration as part of a business combination | - | (84 | ) | - | - | - | ||||||||||||||
Adjusted total net interest income and noninterest income (non-GAAP) | 24,414 | 23,678 | 23,633 | 23,680 | 22,008 | |||||||||||||||
Adjusted Efficiency ratio (non-GAAP) | 48.51 | % | 44.08 | % | 48.90 | % | 55.22 | % | 53.29 | % | ||||||||||
Pretax pre-provision net revenue | ||||||||||||||||||||
Net interest income | $ | 23,255 | $ | 22,708 | $ | 22,168 | $ | 22,596 | $ | 20,603 | ||||||||||
Noninterest income | 1,159 | 1,054 | 1,465 | 1,084 | 1,405 | |||||||||||||||
Total net interest income and noninterest income | 24,414 | 23,762 | 23,633 | 23,680 | 22,008 | |||||||||||||||
Less: Noninterest expense | 11,843 | 8,802 | 11,557 | 13,075 | 11,727 | |||||||||||||||
Pretax pre-provision net revenue (non-GAAP) | $ | 12,571 | $ | 14,960 | $ | 12,076 | $ | 10,605 | $ | 10,281 | ||||||||||
Return and Adjusted Return on Average Assets, Average Equity, Average Tangible Equity | ||||||||||||||||||||
Net income | $ | 8,489 | $ | 15,534 | $ | 8,974 | $ | 7,443 | $ | 6,351 | ||||||||||
Adjusted net income (non-GAAP) (1) | 8,489 | 8,258 | 8,974 | 7,443 | 6,351 | |||||||||||||||
Average assets | 2,005,197 | 1,959,802 | 1,857,994 | 1,759,204 | 1,665,491 | |||||||||||||||
Average shareholders' equity | 173,347 | 162,173 | 146,778 | 141,330 | 144,727 | |||||||||||||||
Less: Average intangible assets | 2,709 | 2,975 | 3,026 | 3,385 | 3,599 | |||||||||||||||
Average tangible common equity (non-GAAP) | 170,638 | 159,198 | 143,752 | 137,945 | 141,128 | |||||||||||||||
Return on average assets | 1.68 | % | 3.18 | % | 1.96 | % | 1.68 | % | 1.51 | % | ||||||||||
Adjusted return on average assets (non-GAAP) (1) | 1.68 | % | 1.69 | % | 1.96 | % | 1.68 | % | 1.51 | % | ||||||||||
Return on average equity | 19.43 | % | 38.42 | % | 24.80 | % | 20.89 | % | 17.41 | % | ||||||||||
Adjusted return on average equity (non-GAAP) (1) | 19.43 | % | 20.42 | % | 24.80 | % | 20.89 | % | 17.41 | % | ||||||||||
Return on average tangible common equity (non-GAAP) | 19.74 | % | 39.14 | % | 25.32 | % | 21.41 | % | 17.85 | % | ||||||||||
Adjusted return on average tangible common equity (non-GAAP) (1) | 19.74 | % | 20.81 | % | 25.32 | % | 21.41 | % | 17.85 | % | ||||||||||
Tangible book value per share | ||||||||||||||||||||
Total equity | 174,679 | 167,211 | 152,314 | 143,324 | 134,934 | |||||||||||||||
Less: Total intangible assets | 2,449 | 2,875 | 3,057 | 3,007 | 3,502 | |||||||||||||||
Total tangible equity | 172,230 | 164,336 | 149,257 | 140,317 | 131,432 | |||||||||||||||
Shares outstanding | 5,703,350 | 5,702,637 | 5,676,017 | 5,599,025 | 5,594,380 | |||||||||||||||
Tangible book value per share (non-GAAP) | $ | 30.20 | $ | 28.82 | $ | 26.30 | $ | 25.06 | $ | 23.49 | ||||||||||
(1) A reconciliation of net income to adjusted net income is provided on page 13. | ||||||||||||||||||||
(Unaudited) | ||||||||
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: efficiency ratio, adjusted efficiency ratio, pretax pre-provision net revenue, average tangible common equity, adjusted return on average assets, return on average tangible common equity and adjusted return on average tangible common equity. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures. | ||||||||
GAAP to Non-GAAP Reconciliation | ||||||||
(Dollars in thousands) | ||||||||
Year to Date | ||||||||
Efficiency Ratio | ||||||||
Noninterest expense | $ | 32,202 | $ | 35,169 | ||||
Net interest income | 68,131 | 55,727 | ||||||
Noninterest income | 3,678 | 5,957 | ||||||
Total net interest income and noninterest income | 71,809 | 61,684 | ||||||
Efficiency ratio (non-GAAP) | 44.84 | % | 57.01 | % | ||||
Adjusted Efficiency Ratio | ||||||||
Noninterest expense | $ | 32,202 | $ | 35,169 | ||||
Settlement of legal fees related to ANI litigation | 1,635 | - | ||||||
Adjusted noninterest expense (non-GAAP) | 33,837 | 35,169 | ||||||
Total net interest income and noninterest income | 71,809 | 61,684 | ||||||
Recovery of interest on a loan acquired with credit deterioration as part of a business combination | (84 | ) | - | |||||
Adjusted total net interest income and noninterest income (non-GAAP) | 71,725 | 61,684 | ||||||
Adjusted Efficiency ratio (non-GAAP) | 47.18 | % | 57.01 | % | ||||
Pretax pre-provision net revenue | ||||||||
Net interest income | $ | 68,131 | $ | 55,727 | ||||
Noninterest income | 3,678 | 5,957 | ||||||
Total net interest income and noninterest income | 71,809 | 61,684 | ||||||
Less: Noninterest expense | 32,202 | 35,169 | ||||||
Pretax pre-provision net revenue (non-GAAP) | $ | 39,607 | $ | 26,515 | ||||
Return and Adjusted Return on Average Assets, Average Equity, Average Tangible Equity | ||||||||
Net income | $ | 32,997 | $ | 17,266 | ||||
Adjusted net income (non-GAAP) (1) | 25,721 | 17,266 | ||||||
Average assets | 1,941,527 | 1,592,121 | ||||||
Average shareholders' equity | 160,848 | 134,245 | ||||||
Less: Average intangible assets | 2,879 | 2,903 | ||||||
Average tangible common equity | 157,969 | 131,342 | ||||||
Return on average assets | 2.27 | % | 1.45 | % | ||||
Adjusted return on average assets (non-GAAP) (1) | 1.77 | % | 1.45 | % | ||||
Return on average equity | 27.43 | % | 17.20 | % | ||||
Adjusted return on average equity (non-GAAP) (1) | 21.38 | % | 17.20 | % | ||||
Return on average tangible common equity (non-GAAP) | 27.93 | % | 17.58 | % | ||||
Adjusted return on average tangible common equity (non-GAAP) (1) | 21.77 | % | 17.58 | % | ||||
(1) A reconciliation of net income to adjusted net income is provided on page 13. |
Source:
2023 GlobeNewswire, Inc., source