FCB Financial Holdings, Inc. (NYSE:FCB) (the "Company") today reported third quarter 2018 net income of $43.5 million, or $0.89 per share on a fully diluted basis, and adjusted net income of $47.3 million, or $0.97 per share on a fully diluted basis. Net income rose 35% year-over-year and pre-tax income increased by 23% to $56.9 million. Adjusted net income rose 38% year-over-year and adjusted net income per diluted share rose 31%. This resulted in a ROA of 142 basis points and an adjusted ROA of 155 basis points.

  • Fully tax equivalent net revenue of $102.6 million;
  • Reported and Adjusted EPS of $0.89 and $0.97 per share, respectively, on a fully diluted basis;
  • New loan portfolio grew sequentially at an annualized rate of 20%;
  • New loan fundings of $491.0 million during the quarter;
  • Deposits grew sequentially at an annualized rate of 12%;
  • Reported and Adjusted Efficiency ratio of 41.4% and 37.3%, respectively;
  • Reported and Adjusted ROA of 142 and 155 basis points, respectively; and
  • Tangible book value per share was $26.29.

The Company views certain non-operating items, including, but not limited to, merger related and restructuring charges, gain/(loss) on investment securities and their corresponding tax effect, as adjustments to net income. Non-operating adjustments for the third quarter of 2018 primarily relate to merger related expenses associated with the pending merger with Synovus Financial Corp (“Synovus”). Non-operating adjustments include $3 million of transaction related expenses for our pending merger, $332 thousand of data processing and $292 thousand of other operating expense, as well as $184 thousand loss on investment securities. Additionally, the Company expects its 2018 annual GAAP tax rate to be between 20-23%.

The reconciliation of non-GAAP measures (including adjusted net income, adjusted efficiency ratio, adjusted ROA, tangible book value and tangible book value per share), which the Company believes facilitates the assessment of its banking operations and peer comparability, is included in tabular form at the end of this release.

Kent Ellert, Chief Executive Officer and President of FCB Financial Holdings, Inc., commented, “The third quarter of 2018 marks 23 consecutive quarters of improving core operating results. We are once again pleased with our results this quarter as we continued our organic momentum with over $400 million of loan growth and nearly $300 million of deposit growth. Our organic growth and customer centric approach continues to differentiate us in the market as Florida’s largest community banking company.”

Loan Portfolio and Composition

During the quarter, the total loan portfolio, gross of the allowance for loan losses, grew by $395.2 million to $9.3 billion as of September 30, 2018, an increase of 4.4% from $8.9 billion as of June 30, 2018, and 24% from $7.5 billion as of September 30, 2017.

The Bank’s new loan portfolio totaled $8.6 billion as of September 30, 2018, an increase of 5% from $8.2 billion as of June 30, 2018 and 20% from $7.2 billion as of September 30, 2017. Loan growth during the quarter was a result of $491.0 million of organic new loan fundings, consisting of $240.5 million of commercial and industrial, $204.3 million of commercial real estate and $46.2 million of residential and consumer. As of quarter end, the total syndicated portfolio continues to represent only 3% of total loans. As of September 30, 2018, new loans made up 93% of the total loan portfolio as compared to 92% and 96% as of June 30, 2018 and September 30, 2017, respectively.

The Bank’s acquired loan portfolio totaled $687.4 million as of September 30, 2018, a decrease of 2% from $702.4 million as of June 30, 2018 and an increase of 106% from $333.7 million as of September 30, 2017. The increase as compared to 2017 was driven by the acquisition of Floridian Community Bank in March 2018. As of September 30, 2018, acquired loans made up 7% of our total loan portfolio as compared to 8% and 4% as of June 30, 2018 and September 30, 2017, respectively.

Asset Quality

The provision for loan losses of $2.2 million recorded for the third quarter of 2018 includes a $2.3 million provision for new loans and a recoupment of valuation allowance of $56 thousand for the acquired loan portfolio. The provision for new loans served to increase the related allowance to $50.1 million, or 0.58% of the $8.6 billion in new loans outstanding. The nonperforming new loan ratio as of September 30, 2018 was 0.09%.

Deposits and Borrowings

Deposits totaled $10.2 billion as of September 30, 2018, an increase of 3% from $9.9 billion as of June 30, 2018 and an increase of 25% from $8.1 billion as of September 30, 2017. Demand deposits represent 27% of total deposits as of September 30, 2018 as compared to 31% as of June 30, 2018 and September 30, 2017, respectively. The cost of deposits was 136 basis points for the quarter, representing a 15 basis point increase from the second quarter of 2018 and a 48 basis point increase from the third quarter of 2017. The primary driver of the increase over the periods is attributable to the Federal Reserve rate hikes in June and December 2017 and March, June and September 2018.

Net Interest Margin and Net Interest Income

The net interest margin for the third quarter of 2018 was 3.18%, a decrease of 7 basis points from the second quarter of 2018 and an increase of one basis point from the third quarter of 2017. The decrease from the second quarter of 2018 was primarily due to the 14 basis point increase in cost of interest-bearing liabilities and 33 basis point decrease in yield on acquired loans partially offset by the 9 basis point increase in yield on new loans.

Net interest income totaled $92.6 million in the third quarter of 2018, an increase of 2% from $90.8 million in the second quarter of 2018 and an increase of 22% from $75.8 million in the third quarter of 2017. Interest income totaled $129.0 million for the third quarter of 2018, an increase of 5% from $122.6 million in the second quarter of 2018 and an increase of 33% from $96.8 million in the third quarter of 2017. Interest income from new loans increased by $6.3 million, or 7%, from the second quarter of 2018 due to yield expansion and continued growth in the new loan portfolio. Interest income on acquired loans decreased by $880 thousand, or 8%, from the second quarter due to attrition of the acquired loan portfolio. Interest expense was $36.4 million for the third quarter of 2018, an increase of 15% from $31.7 million in the second quarter of 2018 and an increase of 73% from $21.0 million in the third quarter of 2017. The increase from the second quarter of 2018 was a result of a 14 basis point increase on cost of interest-bearing liabilities associated with increased time deposit duration as well as the impact of the June and September 2018 Federal Reserve rate hikes on deposit costs.

Noninterest Income and Noninterest Expense

Noninterest income totaled $8.8 million for the third quarter of 2018 as compared to $8.0 million for the second quarter of 2018 and $8.4 million for the third quarter of 2017. The primary components of noninterest income for the quarter were loan and other fees, bank-owned life insurance income and service charges and fee income of $5.0 million, $1.4 million and $1.3 million, respectively.

Noninterest expense totaled $42.3 million for the third quarter of 2018, an increase of 3% from $40.9 million in the second quarter of 2018 and an increase of 20% from $35.2 million in the third quarter of 2017. Non-operating adjustments for the third quarter of 2018 primarily relate to merger related expenses associated with the pending acquisition by Synovus and the acquisition of Floridian Community that was completed on March 1, 2018. Non-operating adjustments include $3 million of transaction related expenses for our pending merger, $332 thousand of data processing and $292 thousand of other operating expense.

Financial Position

Capital ratios continue to be strong and well in excess of regulatory requirements. Our tangible common equity, Tier 1 leverage, and total risk-based capital ratios were 10.0%, 10.4% and 12.2% for the third quarter of 2018 respectively, compared to 9.9%, 10.3% and 12.1% for the second quarter of 2018, respectively. Stockholders’ equity totaled $1.38 billion as of September 30, 2018, an increase of 3% from $1.34 billion as of June 30, 2018 due to net income of $43.5 million and an increase of $2.9 million of additional paid-in capital partially offset by an increase in accumulated other comprehensive loss of $5.8 million. The Company did not repurchase common stock during the quarter. Tangible book value per common share is $26.29 as of September 30, 2018.

Conference Call

Considering the pending merger with Synovus, the Company will not be hosting a conference call to discuss earnings.

Forward-Looking Statements

This release may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, strategies, predictions, forecasts, objectives or assumptions of future events or performance are not historical facts and may be forward-looking. These statements include, but are not limited to, the expected completion date, financial benefits and other effects of the proposed merger of FCB and Synovus. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “expects,” “can,” “could,” “may,” “predicts,” “potential,” “opportunity,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “seeks,” “intends” and similar words or phrases. Accordingly, these statements involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual strategies, actions or results to differ materially from those expressed in them, and are not guarantees of timing, future results or other events or performance. Because forward-looking statements are necessarily only estimates of future strategies, actions or results, based on management’s current expectations, assumptions and estimates on the date hereof, and there can be no assurance that actual strategies, actions or results will not differ materially from expectations, readers are cautioned not to place undue reliance on such statements. Factors that may cause such a difference include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate any definitive merger agreement between Synovus and FCB; the outcome of any legal proceedings that may be instituted against Synovus or FCB; the ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by Synovus and FCB shareholders on the expected terms and schedule, including the risk that regulatory approvals required for the merger are not obtained or are obtained subject to conditions that are not anticipated; delay in closing the merger; difficulties and delays in integrating the FCB business or fully realizing cost savings and other benefits; the reaction to the transaction of the companies’ customers, employees and counterparties; customer disintermediation; inflation; expected synergies, cost savings and other financial benefits of the proposed transaction might not be realized within the expected timeframes or might be less than projected; the requisite shareholder and regulatory approvals for the proposed transaction might not be obtained; credit and interest rate risks associated with FCB’s respective businesses, customers, borrowings, repayment, investment, and deposit practices; general economic conditions, either nationally or in the market areas in which FCB operates or anticipates doing business, are less favorable than expected; new regulatory or legal requirements or obligations; and other risks; certain risks and important factors that could affect FCB’s future results are identified in its Annual Report on Form 10-K for the year ended December 31, 2017 and other reports filed with the SEC, including among other things under the heading “Risk Factors” in such Annual Report on Form 10-K. Any forward-looking statement speaks only as of the date on which it is made, and FCB undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise.

Important Additional Information and Where to Find It

This communication is being made in respect of the proposed merger transaction between Synovus and FCB. In connection with the proposed merger, Synovus filed with the SEC a Registration Statement on Form S-4 that will include the Joint Proxy Statement of Synovus and FCB and a Prospectus of Synovus, as well as other relevant documents regarding the proposed transaction. A definitive Joint Proxy Statement/Prospectus will also be sent to Synovus shareholders and FCB stockholders. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

A free copy of the Joint Proxy Statement/Prospectus, as well as other filings containing information about Synovus and FCB, may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Synovus at http://investor.synovus.com/Docs or from FCB by accessing FCB’s website at FloridaCommunityBank.com. Copies of the Joint Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to Synovus Investor Relations at Investor Relations, Synovus Financial Corp., 1111 Bay Avenue, Suite 500, P.O. Box 120, Columbus, GA 31901, by calling (888) SYNOVUS, or by sending an e-mail to steveadams@synovus.com or to FCB Investor Relations at Investor Relations, FCB Financial Holdings, Inc., 2500 Weston Road, Suite 300, Weston, Florida 33331, by calling (305) 668-5420 or by sending an e-mail to IR@fcb1923.com.

Synovus and FCB and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the respective shareholders of Synovus and FCB in respect of the transaction described in the Joint Proxy Statement/Prospectus. Information regarding Synovus’s directors and executive officers is contained in Synovus’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated March 16, 2018, which are filed with the SEC. Information regarding FCB’s directors and executive officers is contained in FCB’s Annual Report on Form 10-K for the year ended December 31, 2017 and its Proxy Statement on Schedule 14A, dated April 4, 2018, which are filed with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Joint Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

Use of Non-GAAP Financial Measures

Adjusted net income, adjusted efficiency ratio, adjusted return-on-assets ("adjusted ROA"), tangible book value and tangible book value per share are each non-GAAP financial measures used in this release. A reconciliation to what we believe to be the most directly comparable GAAP financial measures - net income in the case of adjusted net income and adjusted ROA, total net interest income, total noninterest income and total noninterest expense in the case of adjusted efficiency ratio, and total shareholders' equity in the case of tangible book value and tangible book value per share - appears in tabular form at the end of this release. The Company believes each of adjusted net income, adjusted efficiency ratio, and adjusted ROA is useful for both investors and management to understand the effects of certain noninterest items and provides additional perspective on the Company’s performance over time and in comparison to the Company's competitors. Neither Adjusted net income nor Adjusted ROA should be viewed as a substitute for net income, nor should Adjusted efficiency ratio be viewed as a substitute for total net interest income, total noninterest income and total noninterest expense. The Company believes that tangible book value and tangible book value per share are useful for both investors and management, among other things, as these are measures commonly used by financial institutions, regulators and investors to measure the capital adequacy of financial institutions. The Company believes these measures facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. These measures should not be viewed as a substitute for total stockholders' equity.

These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for financial results and analyses of results reported under GAAP, and should be read in conjunction with the Company’s financial statements prepared in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

About FCB Financial Holdings, Inc.

FCB Financial Holdings, Inc. (NYSE: FCB) is the largest community banking company and the second largest Florida-based independent bank, and among the most highly capitalized banks in the state. Recently, FCB was ranked #8 among Forbes’ “Best Banks in America,” marking the second consecutive year FCB was included among the publication’s top 10 leading U.S. banks. FCB was also awarded a five-star rating from Bauer Financial™, FCB assets are more than $12 billion, with capital ratios that exceed regulatory standards. Since its founding in 2010, FCB has been steadfast in its commitment to delivering personalized service, innovation, and products and services equal to those offered by the national banks. Similarly, FCB recognizes the importance of community, fostering a corporate culture that promotes employee volunteerism at all levels, while supporting community-based programs and partnerships that help promote greater financial independence and improved quality of life for families. FCB serves individuals, businesses and communities across the state with 51 full-service banking centers from east to west, and from Daytona Beach to Miami-Dade. For more information, visit FloridaCommunityBank.com. Equal Housing Lender, Member FDIC.

FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements Of Income
(Unaudited)
           
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017 2017
(Dollars in thousands, except share and per share data)
 
Interest income:
Interest and fees on loans $ 104,137 $ 98,749 $ 87,466 $ 80,830 $ 76,465
Interest and dividends on investment securities 24,425 23,443 20,854 20,479 20,215
Other interest income   448     367   237     181     136  
Total interest income   129,010     122,559   108,557     101,490     96,816  
Interest expense:
Interest on deposits 33,300 28,448 23,649 19,789 17,134
Interest on borrowings   3,072     3,292   2,725     3,587     3,901  
Total interest expense   36,372     31,740   26,374     23,376     21,035  
Net interest income 92,638 90,819 82,183 78,114 75,781
Provision for loan losses   2,220     1,505   2,076     2,786     2,871  
Net interest income after provision for loan losses   90,418     89,314   80,107     75,328     72,910  
Noninterest income:
Service charges and fees 1,266 1,183 1,054 978 941
Loan and other fees 5,043 3,318 4,900 3,041 2,831
Bank-owned life insurance income 1,439 1,422 1,367 1,397 1,422
Income from resolution of acquired assets 202 327 74 425 466
Gain (loss) on sales of other real estate owned (70 ) 8 105 (55 ) (143 )
Gain (loss) on investment securities (184 ) 116 (1,404 ) 211 690
Other noninterest income   1,068     1,580   1,127     1,734     2,218  
Total noninterest income   8,764     7,954   7,223     7,731     8,425  
Noninterest expense:
Salaries and employee benefits 23,023 23,732 21,945 21,987 20,860
Occupancy and equipment expenses 4,012 4,302 3,558 3,447 3,283
Loan and other real estate related expenses 545 1,294 1,111 371 837
Professional services 3,929 1,141 2,265 1,690 1,390
Data processing and network 3,911 4,017 3,566 3,113 3,397
Regulatory assessments and insurance 2,564 2,196 2,497 2,280 2,330
Amortization of intangibles 371 370 294 255 256
Other operating expenses   3,973     3,874   3,925     2,976     2,886  
Total noninterest expense   42,328     40,926   39,161     36,119     35,239  
Income before income tax expense 56,854 56,342 48,169 46,940 46,096
Income tax expense   13,374     13,608   8,070     27,976     13,936  
Net income $ 43,480   $ 42,734 $ 40,099   $ 18,964   $ 32,160  
 
Earnings per share:
Basic $ 0.93 $ 0.92 $ 0.89 $ 0.43 $ 0.74
Diluted $ 0.89 $ 0.87 $ 0.84 $ 0.41 $ 0.70
 
Weighted average shares outstanding:
Basic 46,693,707 46,660,992 45,239,988 43,797,291 43,333,947
Diluted 48,804,871 48,979,864 47,579,309 46,565,439 46,189,468
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
           
September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017   2017  
(Dollars in thousands)
Assets:
Cash and due from banks $ 76,633 $ 93,226 $ 63,640 $ 60,787 $ 62,695
Interest-earning deposits in other banks 123,876 195,050 85,385 55,134 49,732
Investment securities:
Available for sale securities, at fair value 2,346,718 2,409,326 2,269,046 2,120,803 2,102,711
Federal Home Loan Bank and other bank stock, at cost   65,847     66,414     58,184     56,881     61,838  
Total investment securities   2,412,565     2,475,740     2,327,230     2,177,684     2,164,549  
Loans held for sale 980 2,323 4,167 12,736 13,503
Loans:
New loans 8,629,402 8,219,145 7,976,251 7,661,385 7,164,480
Acquired loans 687,406 702,428 728,141 316,399 333,725
Allowance for loan losses   (53,148 )   (50,570 )   (49,213 )   (47,145 )   (44,291 )
Loans, net   9,263,660     8,871,003     8,655,179     7,930,639     7,453,914  
Premises and equipment, net 42,645 42,075 39,424 36,144 35,741
Other real estate owned 10,534 11,159 14,072 14,906 17,599
Goodwill and other intangible assets 146,742 147,113 147,738 84,872 85,127
Deferred tax assets, net 40,743 38,914 34,933 27,043 51,521
Bank-owned life insurance 215,421 213,982 212,925 201,069 199,672
Other assets   99,557     101,714     77,420     76,065     95,279  
Total assets $ 12,433,356   $ 12,192,299   $ 11,662,113   $ 10,677,079   $ 10,229,332  
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Transaction accounts:
Noninterest-bearing $ 1,577,741 $ 1,530,718 $ 1,478,837 $ 1,236,685 $ 1,242,562
Interest-bearing   4,225,178     4,642,679     4,770,265     4,830,525     4,486,085  
Total transaction accounts 5,802,919 6,173,397 6,249,102 6,067,210 5,728,647
Time deposits   4,353,196     3,684,788     3,237,174     2,606,717     2,377,446  
Total deposits 10,156,115 9,858,185 9,486,276 8,673,927 8,106,093
Borrowings 825,558 860,377 753,921 749,113 874,222
Other liabilities   74,197     136,806     117,774     74,867     92,944  
Total liabilities   11,055,870     10,855,368     10,357,971     9,497,907     9,073,259  
Stockholders' Equity:
Class A common stock 50 49 49 47 46
Additional paid-in capital 1,040,358 1,037,437 1,034,687 933,960 924,462
Retained earnings 439,233 395,752 353,019 313,645 294,681
Accumulated other comprehensive income (loss) (24,782 ) (18,934 ) (6,240 ) 8,893 14,257
Treasury stock, at cost   (77,373 )   (77,373 )   (77,373 )   (77,373 )   (77,373 )
Total stockholders' equity   1,377,486     1,336,931     1,304,142     1,179,172     1,156,073  
Total liabilities and stockholders' equity $ 12,433,356   $ 12,192,299   $ 11,662,113   $ 10,677,079   $ 10,229,332  
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Key Metrics
(Unaudited)
  Three Months Ended
September 30,   June 30,   March 31,   December 31, September 30,
2018 2018 2018 2017 2017
Performance Ratios:
Interest rate spread 2.81 % 2.90 % 2.87 % 2.85 % 2.90 %
Net interest margin 3.18 % 3.25 % 3.18 % 3.13 % 3.17 %
Return on average assets 1.42 % 1.46 % 1.48 % 0.72 % 1.28 %
Return on average equity 12.71 % 12.98 % 13.24 % 6.41 % 11.21 %
Efficiency ratio (company level) 41.38 % 41.06 % 43.47 % 41.78 % 41.54 %
Average interest-earning assets to average interest-bearing liabilities 125.66 % 125.24 % 124.25 % 125.00 % 124.57 %
Loans receivable to deposits 91.74 % 90.50 % 91.76 % 91.97 % 92.50 %
Yield on interest-earning assets 4.37 % 4.32 % 4.14 % 4.02 % 3.99 %
Cost of interest-bearing liabilities 1.56 % 1.42 % 1.27 % 1.17 % 1.09 %
Asset and Credit Quality Ratios - Total loans:
Nonperforming loans to loans receivable 0.24 % 0.21 % 0.19 % 0.21 % 0.28 %
Nonperforming assets to total assets 0.27 % 0.24 % 0.26 % 0.29 % 0.38 %
ALL to nonperforming assets 161.20 % 169.85 % 161.18 % 150.41 % 114.60 %
ALL to total gross loans 0.57 % 0.57 % 0.57 % 0.59 % 0.59 %
Asset and Credit Quality Ratios - New Loans:
Nonperforming new loans to new loans receivable 0.09 % 0.06 % 0.04 % 0.04 % 0.05 %
New loan ALL to total gross new loans 0.58 % 0.58 % 0.58 % 0.58 % 0.57 %
Asset and Credit Quality Ratios - Acquired Loans:
Nonperforming acquired loans to acquired loans receivable 2.20 % 1.99 % 1.83 % 4.15 % 5.23 %
Acquired loan ALL to total gross acquired loans 0.44 % 0.39 % 0.42 % 0.95 % 1.01 %
Capital Ratios (Company):
Average equity to average total assets 11.2 % 11.2 % 11.2 % 11.3 % 11.4 %
Tangible average equity to tangible average assets (1) 10.1 % 10.1 % 10.3 % 10.6 % 10.6 %
Tangible common equity ratio (1) 10.0 % 9.9 % 10.0 % 10.3 % 10.6 %
Tier 1 leverage ratio 10.4 % 10.3 % 10.7 % 10.5 % 10.6 %
Tier 1 risk-based capital ratio 11.7 % 11.6 % 11.6 % 11.9 % 12.2 %
Total risk-based capital ratio 12.2 % 12.1 % 12.2 % 12.4 % 12.7 %
Capital Ratios (Bank):
Average equity to average total assets 10.2 % 10.0 % 10.0 % 10.1 % 10.2 %
Tangible common equity ratio 9.1 % 9.0 % 9.1 % 9.0 % 9.3 %
Tier 1 leverage ratio 9.5 % 9.4 % 9.7 % 9.2 % 9.4 %
Tier 1 risk-based capital ratio 10.7 % 10.6 % 10.5 % 10.4 % 10.8 %
Total risk-based capital ratio 11.2 % 11.1 % 11.1 % 11.0 % 11.4 %
 
(1) See Reconciliation of Non-GAAP Financial Measures - Tangible Book Value Per Share
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Loan Composition
(Unaudited)
         
As of
September 30, June 30, March 31, December 31, September 30,
  2018   2018   2018   2017   2017
(Dollars in thousands)
New Loans:
Commercial real estate $ 2,528,748 $ 2,361,475 $ 2,168,606 $ 2,103,788 $ 1,934,246
Owner-occupied commercial real estate 1,134,793 1,119,816 1,074,076 987,781 933,439
1-4 single family residential 2,245,139 2,226,835 2,232,791 2,185,362 2,126,006
Construction, land and development 754,972 708,497 732,551 684,462 682,354
Home equity loans and lines of credit   59,729   60,888   61,856   59,636   52,945
Total real estate loans $ 6,723,381 $ 6,477,511 $ 6,269,880 $ 6,021,029 $ 5,728,990
Commercial and industrial 1,902,045 1,737,485 1,701,651 1,634,372 1,431,445
Consumer   3,976   4,149   4,720   5,984   4,045
Total new loans $ 8,629,402 $ 8,219,145 $ 7,976,251 $ 7,661,385 $ 7,164,480
 
Acquired ASC 310-30 Loans:
Commercial real estate $ 133,778 $ 137,591 $ 138,853 $ 104,335 $ 111,416
1-4 single family residential 32,240 33,532 35,264 27,513 28,044
Construction, land and development 28,590 29,860 31,188 13,167 13,791
Home equity loans and lines of credit   -   -   202   -   -
Total real estate loans $ 194,608 $ 200,983 $ 205,507 $ 145,015 $ 153,251
Commercial and industrial 19,503 19,972 22,434 12,631 13,145
Consumer   1,259   1,289   1,373   1,423   1,447
Total acquired ASC 310-30 loans $ 215,370 $ 222,244 $ 229,314 $ 159,069 $ 167,843
 
Acquired Non-ASC 310-30 Loans:
Commercial real estate $ 104,364 $ 106,523 $ 111,294 $ 37,736 $ 37,896
Owner-occupied commercial real estate 81,408 79,203 82,534 16,100 18,097
1-4 single family residential 148,659 155,792 164,188 57,695 60,374
Construction, land and development 36,881 33,121 32,413 5,889 5,890
Home equity loans and lines of credit   40,131   42,000   42,435   34,589   38,007
Total real estate loans $ 411,443 $ 416,639 $ 432,864 $ 152,009 $ 160,264
Commercial and industrial 46,643 47,307 47,760 5,062 5,284
Consumer   13,950   16,238   18,203   259   334
Total Acquired Non-ASC 310-30 Loans   472,036   480,184   498,827   157,330   165,882
Total loans $ 9,316,808 $ 8,921,573 $ 8,704,392 $ 7,977,784 $ 7,498,205
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Deposit Composition
(Unaudited)
           
As of
September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017 2017
(Dollars in thousands)
 
Noninterest-bearing demand deposits $ 1,577,741 $ 1,530,718 $ 1,478,837 $ 1,236,685 $ 1,242,562
Interest-bearing demand deposits 1,207,859 1,498,421 1,375,820 1,454,097 1,232,116
Interest-bearing NOW accounts 410,226 440,896 474,737 363,191 368,796
Savings and money market accounts 2,607,093 2,703,362 2,919,708 3,013,237 2,885,173
Time deposits   4,353,196   3,684,788   3,237,174   2,606,717   2,377,446
Total deposits $ 10,156,115 $ 9,858,185 $ 9,486,276 $ 8,673,927 $ 8,106,093
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Quarterly Average Balances and Yields
(Unaudited)
           
Three Months Ended Three Months Ended
September 30,   June 30,
2018 2018
Average Interest/ Annualized Average Interest/ Annualized
Balance (1) Expense (2) Yield/Rate(3) Balance (1) Expense (2) Yield/Rate(3)
(Dollars in thousands)
Interest-earning assets:
Interest-earning deposits in other banks $ 92,937 $ 448 1.91 % $ 76,323 $ 367 1.93 %
New loans (4) 8,344,858 93,862 4.40 % 8,036,916 87,594 4.31 %
Acquired loans (4)(5) 691,785 10,275 5.94 % 711,663 11,155 6.27 %
Investment securities   2,438,498   24,425 3.92 %   2,396,679   23,443 3.87 %
Total interest-earning assets   11,568,078   129,010 4.37 %   11,221,581   122,559 4.32 %
Non-earning assets:
Noninterest-earning assets   552,311   539,358
Total assets $ 12,120,389 $ 11,760,939
Interest-bearing liabilities:
Interest-bearing demand deposits $ 1,290,691 $ 4,093 1.26 % $ 1,356,018 $ 4,107 1.21 %
Interest-bearing NOW accounts 419,712 1,252 1.18 % 474,313 1,253 1.06 %
Savings and money market accounts 2,636,801 9,249 1.39 % 2,761,374 8,647 1.26 %
Time deposits (6) 3,895,326 18,706 1.91 % 3,425,429 14,441 1.69 %
FHLB advances and other borrowings (6)   963,607   3,072 1.25 %   943,033   3,292 1.38 %
Total interest-bearing liabilities $ 9,206,137 $ 36,372 1.56 % $ 8,960,167 $ 31,740 1.42 %
Noninterest-bearing liabilities and

shareholders' equity:

Noninterest-bearing demand deposits $ 1,482,827 $ 1,415,899
Other liabilities 74,606 64,627
Stockholders' equity   1,356,819   1,320,246
Total liabilities and stockholders' equity $ 12,120,389   $ 11,760,939  
Net interest income $ 92,638   $ 90,819  
Net interest spread 2.81 % 2.90 %
Net interest margin 3.18 % 3.25 %
 
(1) Average balances presented are derived from daily average balances.
(2) Interest income is presented on an actual basis and does not include taxable equivalent adjustments.
(3) Average rates are presented on an annualized basis.
(4) Includes loans on nonaccrual status.
(5) Net of allowance for loan losses.
(6) Interest expense includes the impact from premium amortization.
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Quarterly Average Balances and Yields
(Unaudited)
           
Three Months Ended September 30,
2018 2017
Average Interest/ Annualized Average Interest/ Annualized
Balance (1)   Expense (2)   Yield/Rate(3)   Balance (1)   Expense (2)   Yield/Rate(3)
(Dollars in thousands)
Interest-earning assets:
Interest-earning deposits in other banks $ 92,937 $ 448 1.91 % $ 39,646 $ 136 1.36 %
New loans (4) 8,344,858 93,862 4.40 % 6,982,158 69,709 3.91 %
Acquired loans (4)(5) 691,785 10,275 5.94 % 341,056 6,756 7.92 %
Investment securities   2,438,498   24,425 3.92 %   2,134,162   20,215 3.71 %
Total interest-earning assets   11,568,078   129,010 4.37 %   9,497,022   96,816 3.99 %
Non-earning assets:
Noninterest-earning assets   552,311   473,981
Total assets $ 12,120,389 $ 9,971,003
Interest-bearing liabilities:
Interest-bearing demand deposits $ 1,290,691 $ 4,093 1.26 % $ 1,147,669 $ 2,694 0.93 %
Interest-bearing NOW accounts 419,712 1,252 1.18 % 398,322 763 0.76 %
Savings and money market accounts 2,636,801 9,249 1.39 % 2,885,716 6,901 0.95 %
Time deposits (6) 3,895,326 18,706 1.91 % 2,161,905 6,776 1.24 %
FHLB advances and other borrowings (6)   963,607   3,072 1.25 %   1,030,437   3,901 1.48 %
Total interest-bearing liabilities $ 9,206,137 $ 36,372 1.56 % $ 7,624,049 $ 21,035 1.09 %
Noninterest-bearing liabilities and

shareholders' equity:

Noninterest-bearing demand deposits $ 1,482,827 $ 1,149,981
Other liabilities 74,606 59,139
Stockholders' equity   1,356,819   1,137,834
Total liabilities and stockholders' equity $ 12,120,389   $ 9,971,003  
Net interest income $ 92,638   $ 75,781  
Net interest spread 2.81 % 2.90 %
Net interest margin 3.18 % 3.17 %
 
(1) Average balances presented are derived from daily average balances.
(2) Interest income is presented on an actual basis and does not include taxable equivalent adjustments.
(3) Average rates are presented on an annualized basis.
(4) Includes loans on nonaccrual status.
(5) Net of allowance for loan losses.
(6) Interest expense includes the impact from premium amortization.
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Average Balances and Yields
(Unaudited)
                     
Nine months ended September 30,
2018 2017
Average Interest/ Annualized Average Interest/ Annualized
Balance (1)   Expense (2)   Yield/Rate (3)   Balance (1)   Expense (2)   Yield/Rate (3)
(Dollars in thousands)
Interest-earning assets:
Interest-earning deposits in other banks $ 76,772 $ 1,052 1.83 % $ 41,592 $ 344 1.11 %
New loans (4) 8,047,963 261,799 4.29 % 6,675,685 192,975 3.81 %
Acquired loans (4)(5) 620,564 28,553 6.13 % 354,928 21,595 8.11 %
Investment securities   2,347,762   68,722 3.86 %   2,048,977   57,697 3.71 %
Total interest-earning assets   11,093,061   360,126 4.28 %   9,121,182   272,611 3.95 %
Non-earning assets:
Noninterest-earning assets   525,758   471,602
Total assets $ 11,618,819 $ 9,592,784
Interest-bearing liabilities:
Interest-bearing demand deposits $ 1,352,846 $ 12,041 1.19 % $ 1,078,718 $ 6,694 0.83 %
Interest-bearing NOW accounts 446,679 3,483 1.04 % 407,504 1,874 0.61 %
Savings and money market accounts 2,796,710 26,264 1.26 % 2,916,855 18,874 0.87 %
Time deposits (6) 3,385,615 43,609 1.72 % 2,106,550 18,835 1.20 %
FHLB advances and other borrowings (6)   887,321   9,089 1.35 %   900,523   8,996 1.32 %
Total interest-bearing liabilities $ 8,869,171 $ 94,486 1.42 % $ 7,410,150 $ 55,273 1.00 %
Noninterest-bearing liabilities and

shareholders' equity:

Noninterest-bearing demand deposits $ 1,384,722 $ 1,056,011
Other liabilities 62,634 46,430
Stockholders' equity   1,302,292   1,080,193
Total liabilities and stockholders' equity $ 11,618,819   $ 9,592,784  
Net interest income $ 265,640   $ 217,338  
Net interest spread 2.86 % 2.95 %
Net interest margin 3.20 % 3.19 %
 
(1) Average balances presented are derived from daily average balances.
(2) Interest income is presented on an actual basis and does not include taxable equivalent adjustments.
(3) Average rates are presented on an annualized basis.
(4) Includes loans on nonaccrual status.
(5) Net of allowance for loan losses.
(6) Interest expense includes the impact from premium amortization.
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures - Adjusted Net Income
(Unaudited)
                         
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017 2017
(Dollars in thousands)
 
Net Income $ 43,480 $   42,734 $   40,099 $   18,964 $   32,160
 
Pre-tax Adjustments:
Noninterest income:
Less: Gain (loss) on investment securities (184 ) 116 (1,404 ) 211 690
Noninterest expense:
Salaries and employee benefits 36 2,031 826 115 51
Occupancy and equipment - 436 3 - -
Loan and other real estate related expenses - - - - -
Professional services 3,000 9 911 148 -
Data processing and network fees 332 4 539 - -
Regulatory assessments and insurance - - - - -
Amortization of intangibles - - - - -
Other operating expenses 292 207 277 65 125
Taxes:
Tax Effect of adjustments (1)   19       646       (3,398 )     16,212       2,541  
Adjusted Net Income $ 47,343   $   45,951   $   40,661   $   35,293   $   34,187  
 
Average assets $ 12,120,389 $ 11,760,939 $ 10,962,404 $ 10,382,043 $ 9,971,003
ROA (2) 1.42 % 1.46 % 1.48 % 0.72 % 1.28 %
Adjusted ROA (3) 1.55 % 1.57 % 1.50 % 1.35 % 1.36 %
 
(1) Tax effected at marginal income tax rate of 25% except for non tax deductible and discreet items. Adjusted tax rate 25% for full-year 2017 and 20-23% for full-year 2018.
(2) Return on assets: Annualized net income / average assets
(3) Adjusted return on assets: Annualized adjusted net income / average assets
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures - Adjusted Efficiency Ratio
(Unaudited)
 
Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017 2017
(Dollars in thousands)
 
Reported: Net interest income $ 92,638 $ 90,819 $ 82,183 $ 78,114 $ 75,781
FTE adjustment   554     543     479     1,245     1,357  
Adjusted net interest income $ 93,192   $ 91,362   $ 82,662   $ 79,359   $ 77,138  
 
Reported: Noninterest income $ 8,764 $ 7,954 $ 7,223 $ 7,731 $ 8,425
FTE adjustment 480 474 456 879 894
Less: Gain (loss) on investment securities   (184 )   116     (1,404 )   211     690  
Adjusted noninterest income $ 9,428   $ 8,312   $ 9,083   $ 8,399   $ 8,629  
Reported: Noninterest expense $ 42,328 $ 40,926 $ 39,161 $ 36,119 $ 35,239
Less:
Salaries and employee benefits 36 2,031 826 115 51
Occupancy and equipment - 436 3 - -
Loan and other real estate related expenses - - - - -
Professional services 3,000 9 911 148 -
Data processing and network fees 332 4 539 - -
Regulatory assessments and insurance - - - - -
Amortization of intangibles - - - - -
Other operating expenses   292     207     277     65     125  
Adjusted noninterest expense $ 38,668   $ 38,239   $ 36,605   $ 35,791   $ 35,063  
Efficiency ratio (1) 41.38 % 41.06 % 43.47 % 41.78 % 41.54 %
Adjusted efficiency ratio (2) 37.32 % 37.99 % 39.58 % 40.49 % 40.58 %
 
(1) Efficiency ratio: Noninterest expense less amortization of intangibles / (noninterest income + net interest income)
(2) Adjusted efficiency ratio: Adjusted noninterest expense less amortization of intangibles / (adjusted noninterest income + adjusted net interest income)
FCB FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures - Tangible Book Value Per Share
(Unaudited)
     
September 30, June 30, March 31, December 31, September 30,
2018 2018 2018 2017 2017
(Dollars in thousands, except share and per share data)
 
Total assets $ 12,433,356 $ 12,192,299 $ 11,662,113 $ 10,677,079 $ 10,229,332
Less:
Goodwill and other intangible assets 146,742 147,113 147,738 84,872 85,127
Tangible assets $ 12,286,614 $ 12,045,186 $ 11,514,375 $ 10,592,207 $ 10,144,205
Total stockholders' equity $ 1,377,486 $ 1,336,931 $ 1,304,142 $ 1,179,172 $ 1,156,073
Less:
Goodwill and other intangible assets 146,742 147,113 147,738 84,872 85,127
Tangible stockholders' equity $ 1,230,744 $ 1,189,818 $ 1,156,404 $ 1,094,300 $ 1,070,946
Shares outstanding 46,809,305 46,765,902 46,620,627 44,380,580 43,728,302
Tangible book value per share $ 26.29 $ 25.44 $ 24.80 $ 24.66 $ 24.49
Average assets $ 12,120,389 $ 11,760,939 $ 10,962,404 $ 10,382,043 $ 9,971,003
Average equity 1,356,819 1,320,246 1,228,400 1,173,488 1,137,834
Average goodwill and other intangible assets 146,934 147,525 105,988 84,996 85,257
Tangible average equity to tangible average assets 10.1% 10.1% 10.3% 10.6% 10.6%
Tangible common equity ratio 10.0% 9.9% 10.0% 10.3% 10.6%