The challenging operating environment created by the failures of
Highlights for the Quarter:
- Return of average assets was 2.32%
- Return on beginning equity of 23.18%
- Net interest margin was 4.58%
- Total deposits increased
$181 million or 13.4% annually for the quarter - Total loans increased
$61 million for the quarter - Efficiency ratio was 27.3%
- Quarter-end cash on hand was
$1.05 billion or 18.8% of total deposits - Total available liquidity to total deposits was 41.2%
- The allowance for credit losses to total loans increased to 1.40%
Li Yu, Chairman and CEO, commented, “We are delighted to report second quarter 2023 net income of
“The Bank’s uninsured deposits was 39.9% of total deposits at
“Loan growth for the second quarter of 2023 was
“Recently, the business media has been reporting on the exodus of businesses from the area of downtown
“Thanks to our very rate sensitive loan portfolio, Preferred Bank’s net interest income is quite resilient. Our tested formula of a strong margin and low overheard has produced consistently superior returns to our shareholders. To utilize some of our large cash base and excess capital, we have begun to buyback our stock. Total stock repurchased through
Results of Operations
Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was
Noninterest Income. For the second quarter of 2023, noninterest income was
Noninterest Expense. Total noninterest expense was
Income Taxes. The Bank recorded a provision for income taxes of
Balance Sheet Summary
Total gross loans at
Uninsured Deposits
As of
Balance Sheet Fair Market Values from
With so much focus recently on ASC Topic 825, Financial Instruments, formerly known as FASB 107, we felt it would be beneficial for shareholders to view the Bank’s disclosure in its recently filed Quarterly Report on Form 10-Q for
Fair Value Measurement Using | Carrying Amount | Estimated Fair Value | ||||||
(Dollars in thousands) | ||||||||
Assets: | ||||||||
Cash and cash equivalents | Level 1 | $ | 885,691 | $ | 885,691 | |||
Securities held-to-maturity | Level 2 | 22,155 | 20,563 | |||||
Securities available-for-sale | Level 2/3 | 367,492 | 367,492 | |||||
Loans receivable, net | Level 3 | 4,978,513 | 5,005,857 | |||||
Customers' liability on acceptances | Level 2 | 107 | 107 | |||||
Accrued interest receivable | Level 2/3 | 26,532 | 26,532 | |||||
Level 2 | 15,000 | N/A | ||||||
Liabilities: | ||||||||
Demand deposits and savings: | ||||||||
Noninterest-bearing | Level 2 | $ | 1,050,992 | $ | 1,050,992 | |||
Interest-bearing | Level 2 | 1,785,300 | 1,785,300 | |||||
Time deposits | Level 2 | 2,571,474 | 2,554,788 | |||||
Subordinated debt issuance | Level 2 | 148,055 | 171,858 | |||||
Acceptances Outstanding | Level 2 | 107 | 107 | |||||
Accrued interest payable | Level 2 | 4,529 | 4,529 | |||||
Liquidity
As of
Asset Quality
As of
Office
As a result of the pandemic and working from home, office occupancy has suffered and there has been a corresponding decline in the value of office properties, especially in city centers. As of
Medical Office | $ | 3,430 | |
Mixed Use (Office & Retail) | 168,643 | ||
Pure Office | 176,416 | ||
Reposition for Multi-Family | 105,522 | ||
Total | $ | 454,011 |
Substantially all of the office building loans are secured by properties located in more suburban areas. There are only
Allowance for Credit Losses
The provision for credit losses for the second quarter of 2023 was
Capitalization
As of
Conference Call and Webcast
A conference call with simultaneous webcast to discuss Preferred Bank’s second quarter 2023 financial results will be held tomorrow,
About
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank’s future financial and operating results, the Bank's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the
shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in
AT THE COMPANY: | AT FINANCIAL PROFILES: |
Executive Vice President Chief Financial Officer (213) 891-1188 | General Information (310) 622-8240 PFBC@finprofiles.com |
Financial Tables to Follow
Condensed Consolidated Statements of Operations | |||||||||||||||
(unaudited) | |||||||||||||||
(in thousands, except for net income per share and shares) | |||||||||||||||
For the Quarter Ended | |||||||||||||||
2023 | 2023 | 2022 | |||||||||||||
Interest income: | |||||||||||||||
Loans, including fees | $ | 102,220 | $ | 95,881 | $ | 58,541 | |||||||||
Investment securities | 15,919 | 12,979 | 3,972 | ||||||||||||
Fed funds sold | 272 | 224 | 46 | ||||||||||||
Total interest income | 118,411 | 109,084 | 62,559 | ||||||||||||
Interest expense: | |||||||||||||||
Interest-bearing demand | 16,406 | 17,038 | 2,448 | ||||||||||||
Savings | 47 | 39 | 20 | ||||||||||||
Time certificates | 25,436 | 16,593 | 2,342 | ||||||||||||
FHLB borrowings | 1,888 | 374 | - | ||||||||||||
Subordinated debt | 1,325 | 1,325 | 1,325 | ||||||||||||
Total interest expense | 45,102 | 35,369 | 6,135 | ||||||||||||
Net interest income | 73,309 | 73,715 | 56,424 | ||||||||||||
Provision for credit losses | 2,500 | 500 | 2,900 | ||||||||||||
Net interest income after provision for | |||||||||||||||
credit losses | 70,809 | 73,215 | 53,524 | ||||||||||||
Noninterest income: | |||||||||||||||
Fees & service charges on deposit accounts | 844 | 694 | 723 | ||||||||||||
Letters of credit fee income | 1,576 | 1,324 | 1,329 | ||||||||||||
BOLI income | 103 | 101 | 100 | ||||||||||||
Net loss on called and sale of investment securities | - | (4,117 | ) | - | |||||||||||
Net gain on sale of loans | 186 | 340 | - | ||||||||||||
Other income | 392 | 592 | 449 | ||||||||||||
Total noninterest income | 3,101 | (1,066 | ) | 2,601 | |||||||||||
Noninterest expense: | |||||||||||||||
Salary and employee benefits | 12,520 | 13,728 | 11,688 | ||||||||||||
Net occupancy expense | 1,476 | 1,474 | 1,441 | ||||||||||||
Business development and promotion expense | 200 | 105 | 176 | ||||||||||||
Professional services | 1,343 | 1,149 | 1,460 | ||||||||||||
Office supplies and equipment expense | 398 | 404 | 459 | ||||||||||||
Loss on sale of OREO, valuation allowance and related expense | 2,838 | 72 | 385 | ||||||||||||
Other | 2,077 | 1,968 | 1,531 | ||||||||||||
Total noninterest expense | 20,852 | 18,900 | 17,140 | ||||||||||||
Income before provision for income taxes | 53,058 | 53,249 | 38,985 | ||||||||||||
Income tax expense | 15,122 | 15,176 | 10,916 | ||||||||||||
Net income | $ | 37,936 | $ | 38,073 | $ | 28,069 | |||||||||
Dividend and earnings allocated to participating securities | - | - | - | ||||||||||||
Net income available to common shareholders | $ | 37,936 | $ | 38,073 | $ | 28,069 | |||||||||
Income per share available to common shareholders | |||||||||||||||
Basic | $ | 2.63 | $ | 2.64 | $ | 1.90 | |||||||||
Diluted | $ | 2.61 | $ | 2.61 | $ | 1.87 | |||||||||
Weighted-average common shares outstanding | |||||||||||||||
Basic | 14,419,959 | 14,430,606 | 14,792,298 | ||||||||||||
Diluted | 14,560,693 | 14,602,149 | 15,006,801 | ||||||||||||
Cash dividends per common share | $ | 0.55 | $ | 0.55 | $ | 0.43 | |||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||
(unaudited) | ||||||||||||||
(in thousands, except for net income per share and shares) | ||||||||||||||
For the Six Months Ended | ||||||||||||||
Change | ||||||||||||||
2023 | 2022 | % | ||||||||||||
Interest income: | ||||||||||||||
Loans, including fees | $ | 198,101 | $ | 110,660 | 79.0 | % | ||||||||
Investment securities | 28,898 | 6,858 | 321.4 | % | ||||||||||
Fed funds sold | 496 | 65 | 659.0 | % | ||||||||||
Total interest income | 227,495 | 117,583 | 93.5 | % | ||||||||||
Interest expense: | ||||||||||||||
Interest-bearing demand | 33,444 | 3,880 | 762.1 | % | ||||||||||
Savings | 86 | 39 | 120.0 | % | ||||||||||
Time certificates | 42,029 | 4,559 | 821.9 | % | ||||||||||
FHLB borrowings | 2,262 | - | 100.0 | % | ||||||||||
Subordinated debt | 2,650 | 2,650 | 0.0 | % | ||||||||||
Total interest expense | 80,471 | 11,127 | 623.2 | % | ||||||||||
Net interest income | 147,024 | 106,456 | 38.1 | % | ||||||||||
Provision for credit losses | 3,000 | 2,650 | 13.2 | % | ||||||||||
Net interest income after provision for credit losses | 144,024 | 103,806 | 38.7 | % | ||||||||||
Noninterest income: | ||||||||||||||
Fees & service charges on deposit accounts | 1,538 | 1,395 | 10.3 | % | ||||||||||
Letters of credit fee income | 2,900 | 2,261 | 28.3 | % | ||||||||||
BOLI income | 204 | 199 | 2.7 | % | ||||||||||
Net loss on called and sale of investment securities | (4,117 | ) | - | -100.0 | % | |||||||||
Net gain on sale of loans | 526 | - | 100.0 | % | ||||||||||
Other income | 984 | 1,012 | -2.8 | % | ||||||||||
Total noninterest income | 2,035 | 4,867 | -58.2 | % | ||||||||||
Noninterest expense: | ||||||||||||||
Salary and employee benefits | 26,248 | 23,328 | 12.5 | % | ||||||||||
Net occupancy expense | 2,950 | 2,863 | 3.0 | % | ||||||||||
Business development and promotion expense | 305 | 277 | 10.1 | % | ||||||||||
Professional services | 2,492 | 2,703 | -7.8 | % | ||||||||||
Office supplies and equipment expense | 802 | 948 | -15.4 | % | ||||||||||
Loss on sale of OREO, valuation allowance and related expense | 2,910 | 401 | 625.7 | % | ||||||||||
Other | 4,045 | 2,777 | 45.7 | % | ||||||||||
Total noninterest expense | 39,752 | 33,297 | 19.4 | % | ||||||||||
Income before provision for income taxes | 106,307 | 75,376 | 41.0 | % | ||||||||||
Income tax expense | 30,298 | 21,280 | 42.4 | % | ||||||||||
Net income | $ | 76,009 | $ | 54,096 | 40.5 | % | ||||||||
Dividend and earnings allocated to participating securities | $ | - | $ | (2 | ) | 100.0 | % | |||||||
Net income available to common shareholders | $ | 76,009 | $ | 54,094 | 40.5 | % | ||||||||
Income per share available to common shareholders | ||||||||||||||
Basic | $ | 5.27 | $ | 3.66 | 44.0 | % | ||||||||
Diluted | $ | 5.21 | $ | 3.61 | 44.4 | % | ||||||||
Weighted-average common shares outstanding | ||||||||||||||
Basic | 14,425,253 | 14,778,892 | -2.4 | % | ||||||||||
Diluted | 14,581,458 | 14,990,989 | -2.7 | % | ||||||||||
Dividends per share | $ | 1.10 | $ | 0.86 | 27.9 | % | ||||||||
Condensed Consolidated Statements of Financial Condition | |||||||||||
(unaudited) | |||||||||||
(in thousands) | |||||||||||
2023 | 2022 | ||||||||||
(Unaudited) | (Audited) | ||||||||||
Assets | |||||||||||
Cash and due from banks | $ | 1,029,745 | $ | 747,526 | |||||||
Fed funds sold | 20,000 | 20,000 | |||||||||
Cash and cash equivalents | 1,049,745 | 767,526 | |||||||||
Securities held to maturity, at amortized cost | 21,818 | 22,459 | |||||||||
Securities available-for-sale, at fair value | 352,548 | 428,295 | |||||||||
Loans | 5,118,511 | 5,074,793 | |||||||||
Less allowance for credit losses | (71,429 | ) | (68,472 | ) | |||||||
Less amortized deferred loan fees, net | (10,464 | ) | (9,939 | ) | |||||||
Loans, net | 5,036,618 | 4,996,382 | |||||||||
Loans held for sale, at lower of cost or fair value | 176 | - | |||||||||
Other real estate owned and repossessed assets | 16,728 | 21,990 | |||||||||
Customers' liability on acceptances | 448 | 1,731 | |||||||||
Bank furniture and fixtures, net | 8,890 | 8,999 | |||||||||
Bank-owned life insurance | 10,493 | 10,357 | |||||||||
Accrued interest receivable | 28,184 | 23,593 | |||||||||
Investment in affordable housing partnerships | 56,844 | 61,173 | |||||||||
15,000 | 15,000 | ||||||||||
Deferred tax assets | 45,326 | 43,218 | |||||||||
Operating lease right-of-use assets | 21,662 | 21,718 | |||||||||
Other assets | 3,462 | 2,917 | |||||||||
Total assets | $ | 6,667,942 | $ | 6,425,358 | |||||||
Liabilities and Shareholders' Equity | |||||||||||
Deposits: | |||||||||||
Non-interest bearing demand deposits | $ | 870,282 | $ | 1,192,091 | |||||||
Interest-bearing deposits: | 2,005,298 | 2,295,212 | |||||||||
Savings | 32,089 | 39,527 | |||||||||
Time certificates of | 1,244,128 | 1,138,727 | |||||||||
Other time certificates | 1,437,194 | 891,440 | |||||||||
Total deposits | 5,588,991 | 5,556,997 | |||||||||
Acceptances outstanding | 448 | 1,731 | |||||||||
Advances from | 150,000 | - | |||||||||
Subordinated debt issuance, net | 148,114 | 147,995 | |||||||||
Commitments to fund investment in affordable housing partnerships | 20,930 | 27,490 | |||||||||
Operating lease liabilities | 6,998 | 2,608 | |||||||||
Accrued interest payable | 20,110 | 20,949 | |||||||||
Other liabilities | 63,584 | 37,162 | |||||||||
Total liabilities | 5,999,175 | 5,794,932 | |||||||||
Shareholders' equity | 668,767 | 630,426 | |||||||||
Total liabilities and shareholders' equity | $ | 6,667,942 | $ | 6,425,358 | |||||||
Book value per common share | $ | 47.04 | $ | 43.91 | |||||||
Number of common shares outstanding | 14,216,862 | 14,358,145 |
Selected Consolidated Financial Information | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
(in thousands, except for ratios) | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||||||
Unaudited historical quarterly operations data: | |||||||||||||||||||
Interest income | $ | 118,411 | $ | 109,084 | $ | 98,379 | $ | 78,420 | $ | 62,559 | |||||||||
Interest expense | 45,102 | 35,369 | 24,267 | 11,630 | 6,135 | ||||||||||||||
Interest income before provision for credit losses | 73,309 | 73,715 | 74,112 | 66,790 | 56,424 | ||||||||||||||
Provision for credit losses | 2,500 | 500 | 2,000 | 2,700 | 2,900 | ||||||||||||||
Noninterest income | 3,101 | (1,066 | ) | 2,808 | 2,187 | 2,601 | |||||||||||||
Noninterest expense | 20,852 | 18,899 | 19,976 | 17,400 | 17,140 | ||||||||||||||
Income tax expense | 15,122 | 15,176 | 15,384 | 13,688 | 10,916 | ||||||||||||||
Net income | $ | 37,936 | $ | 38,074 | $ | 39,560 | $ | 35,189 | $ | 28,069 | |||||||||
Earnings per share | |||||||||||||||||||
Basic | $ | 2.63 | $ | 2.64 | $ | 2.76 | $ | 2.44 | $ | 1.90 | |||||||||
Diluted | $ | 2.61 | $ | 2.61 | $ | 2.71 | $ | 2.40 | $ | 1.87 | |||||||||
Ratios for the period: | |||||||||||||||||||
Return on average assets | 2.32 | % | 2.41 | % | 2.48 | % | 2.25 | % | 1.84 | % | |||||||||
Return on beginning equity | 23.18 | % | 24.49 | % | 26.58 | % | 23.60 | % | 18.91 | % | |||||||||
Net interest margin (Fully-taxable equivalent) | 4.58 | % | 4.77 | % | 4.75 | % | 4.37 | % | 3.77 | % | |||||||||
Noninterest expense to average assets | 1.28 | % | 1.20 | % | 1.25 | % | 1.11 | % | 1.12 | % | |||||||||
Efficiency ratio | 27.29 | % | 26.01 | % | 25.97 | % | 25.23 | % | 29.04 | % | |||||||||
Net charge-offs (recoveries) to average loans (annualized) | -0.00 | % | 0.00 | % | 0.00 | % | -0.19 | % | 0.00 | % | |||||||||
Ratios as of period end: | |||||||||||||||||||
Tier 1 leverage capital ratio | 10.61 | % | 10.63 | % | 10.30 | % | 9.95 | % | 9.92 | % | |||||||||
Common equity tier 1 risk-based capital ratio | 11.51 | % | 11.30 | % | 10.81 | % | 10.46 | % | 10.61 | % | |||||||||
Tier 1 risk-based capital ratio | 11.51 | % | 11.30 | % | 10.81 | % | 10.46 | % | 10.61 | % | |||||||||
Total risk-based capital ratio | 15.14 | % | 14.91 | % | 14.39 | % | 14.09 | % | 14.31 | % | |||||||||
Allowances for credit losses to loans at end of period | 1.40 | % | 1.36 | % | 1.35 | % | 1.33 | % | 1.25 | % | |||||||||
Allowance for credit losses to non-performing loans | 13.86x | 254.56x | 12.49x | 10.75x | 5.27x | ||||||||||||||
Average balances: | |||||||||||||||||||
Total securities | $ | 397,905 | $ | 442,852 | $ | 434,830 | $ | 410,649 | $ | 430,203 | |||||||||
Total loans | 5,044,004 | 5,012,862 | 4,981,561 | 4,908,870 | 4,777,353 | ||||||||||||||
Total earning assets | 6,432,950 | 6,276,630 | 6,193,330 | 6,076,616 | 6,008,024 | ||||||||||||||
Total assets | 6,558,651 | 6,400,849 | 6,328,017 | 6,215,184 | 6,133,703 | ||||||||||||||
Total time certificate of deposits | 2,617,872 | 2,209,370 | 1,872,239 | 1,749,257 | 1,810,886 | ||||||||||||||
Total interest bearing deposits | 4,549,519 | 4,451,299 | 4,287,287 | 3,973,105 | 3,982,888 | ||||||||||||||
Total deposits | 5,481,457 | 5,479,945 | 5,468,562 | 5,373,252 | 5,301,370 | ||||||||||||||
Total interest bearing liabilities | 4,847,596 | 4,630,982 | 4,435,245 | 4,121,005 | 4,130,729 | ||||||||||||||
Total equity | 677,306 | 650,963 | 613,729 | 598,188 | 606,260 | ||||||||||||||
Selected Consolidated Financial Information | |||||||||||
(unaudited) | |||||||||||
(in thousands, except for ratios) | |||||||||||
For the Six Months Ended | |||||||||||
2023 | 2022 | ||||||||||
Interest income | $ | 227,495 | $ | 117,583 | |||||||
Interest expense | 80,471 | 11,127 | |||||||||
Interest income before provision for credit losses | 147,024 | 106,456 | |||||||||
Provision for credit losses | 3,000 | 2,650 | |||||||||
Non-interest income | 2,035 | 4,867 | |||||||||
Non-interest expense | 39,752 | 33,297 | |||||||||
Income tax expense | 30,298 | 21,280 | |||||||||
Net income | $ | 76,009 | $ | 54,096 | |||||||
Earnings per share | |||||||||||
Basic | $ | 5.27 | $ | 3.66 | |||||||
Diluted | $ | 5.21 | $ | 3.61 | |||||||
Ratios for the period: | |||||||||||
Return on average assets | 2.37 | % | 1.78 | % | |||||||
Return on beginning equity | 24.31 | % | 18.59 | % | |||||||
Net interest margin (Fully-taxable equivalent) | 4.67 | % | 3.58 | % | |||||||
Non-interest expense to average assets | 1.24 | % | 1.09 | % | |||||||
Efficiency ratio | 26.67 | % | 29.91 | % | |||||||
Net charge-off (recoveries) to average loans | 0.00 | % | 0.05 | % | |||||||
Average balances: | |||||||||||
Total securities | $ | 420,254 | $ | 430,203 | |||||||
Total loans | 5,028,520 | 4,777,353 | |||||||||
Total earning assets | 6,355,222 | 6,007,841 | |||||||||
Total assets | 6,480,186 | 6,133,703 | |||||||||
Total time certificate of deposits | 2,414,750 | 1,810,886 | |||||||||
Total interest-bearing deposits | 4,501,301 | 3,982,888 | |||||||||
Total deposits | 5,480,705 | 5,301,370 | |||||||||
Total interest-bearing liabilities | 4,740,508 | 4,130,729 | |||||||||
Total equity | 664,207 | 606,260 | |||||||||
Selected Consolidated Financial Information | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
(in thousands, except for ratios) | ||||||||||||||||||||||||
As of | ||||||||||||||||||||||||
2023 | 2023 | 2022 | 2022 | 2022 | ||||||||||||||||||||
Unaudited quarterly statement of financial position data: | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,049,745 | $ | 885,691 | $ | 767,526 | $ | 749,484 | $ | 768,658 | ||||||||||||||
Securities held-to-maturity, at amortized cost | 21,818 | 22,155 | 22,459 | 12,442 | 12,784 | |||||||||||||||||||
Securities available-for-sale, at fair value | 352,548 | 367,492 | 428,295 | 377,534 | 400,597 | |||||||||||||||||||
Loans: | ||||||||||||||||||||||||
Real estate – Mortgage: | ||||||||||||||||||||||||
Real estate—Residential | $ | 631,795 | $ | 612,908 | $ | 609,292 | $ | 587,812 | $ | 581,412 | ||||||||||||||
Real estate—Commercial | 2,744,075 | 2,813,680 | 2,730,726 | 2,693,852 | 2,583,484 | |||||||||||||||||||
3,375,870 | 3,426,588 | 3,340,018 | 3,281,664 | 3,164,896 | ||||||||||||||||||||
Real estate – Construction: | ||||||||||||||||||||||||
186,239 | 175,286 | 193,027 | 179,955 | 168,420 | ||||||||||||||||||||
153,418 | 142,319 | 204,478 | 188,083 | 203,217 | ||||||||||||||||||||
Total real estate construction loans | 339,657 | 317,605 | 397,505 | 368,038 | 371,637 | |||||||||||||||||||
Commercial and industrial | 1,388,865 | 1,299,325 | 1,320,830 | 1,330,028 | 1,336,631 | |||||||||||||||||||
SBA | 4,426 | 7,306 | 11,339 | 8,067 | 22,186 | |||||||||||||||||||
Trade finance | 9,348 | 6,885 | 4,521 | 22,634 | 24,663 | |||||||||||||||||||
Consumer and others | 345 | 19 | 580 | 115 | 128 | |||||||||||||||||||
Gross loans | 5,118,511 | 5,057,728 | 5,074,793 | 5,010,546 | 4,920,141 | |||||||||||||||||||
Allowance for credit losses on loans | (71,429 | ) | (68,929 | ) | (68,472 | ) | (66,472 | ) | (61,396 | ) | ||||||||||||||
Net deferred loan fees | (10,464 | ) | (10,286 | ) | (9,939 | ) | (9,695 | ) | (9,525 | ) | ||||||||||||||
Net loans, excluding loans held for sale | $ | 5,036,618 | $ | 4,978,513 | $ | 4,996,382 | $ | 4,934,379 | $ | 4,849,220 | ||||||||||||||
Loans held for sale | $ | 176 | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
Net loans | $ | 5,036,794 | $ | 4,978,513 | $ | 4,996,382 | $ | 4,934,379 | $ | 4,849,220 | ||||||||||||||
Other real estate owned and repossessed assets | $ | 16,728 | $ | 18,628 | $ | 21,990 | $ | 26,075 | $ | 21,449 | ||||||||||||||
Investment in affordable housing partnerships | 56,844 | 59,009 | 61,173 | 62,745 | 54,874 | |||||||||||||||||||
15,000 | 15,000 | 15,000 | 15,000 | 15,000 | ||||||||||||||||||||
Other assets | 118,465 | 115,049 | 112,533 | 115,184 | 110,459 | |||||||||||||||||||
Total assets | $ | 6,667,942 | $ | 6,461,537 | $ | 6,425,358 | $ | 6,292,843 | $ | 6,233,041 | ||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Demand | $ | 870,282 | $ | 1,050,992 | $ | 1,192,091 | $ | 1,341,199 | $ | 1,385,934 | ||||||||||||||
Interest-bearing demand | 2,005,298 | 1,751,439 | 2,295,212 | 2,263,775 | 2,239,501 | |||||||||||||||||||
Savings | 32,089 | 33,861 | 39,527 | 38,151 | 39,784 | |||||||||||||||||||
Time certificates of | 1,244,128 | 1,329,720 | 1,138,727 | 971,378 | 870,376 | |||||||||||||||||||
Other time certificates | 1,437,194 | 1,241,754 | 891,440 | 841,173 | 872,357 | |||||||||||||||||||
Total deposits | $ | 5,588,991 | $ | 5,407,766 | $ | 5,556,997 | $ | 5,455,676 | $ | 5,407,952 | ||||||||||||||
Acceptances outstanding | $ | 448 | $ | 107 | $ | 1,731 | $ | 10,058 | $ | 11,053 | ||||||||||||||
Advance from | 150,000 | 150,000 | - | - | - | |||||||||||||||||||
Subordinated debt issuance, net | 148,114 | 148,055 | 147,995 | 147,936 | 147,877 | |||||||||||||||||||
Commitments to fund investment in affordable housing partnerships | 20,930 | 26,709 | 27,490 | 28,611 | 20,036 | |||||||||||||||||||
Other liabilities | 90,692 | 72,359 | 60,074 | 60,009 | 54,531 | |||||||||||||||||||
Total liabilities | $ | 5,999,175 | $ | 5,804,996 | $ | 5,794,287 | $ | 5,702,290 | $ | 5,641,449 | ||||||||||||||
Equity: | ||||||||||||||||||||||||
Net common stock, no par value | $ | 167,404 | $ | 181,208 | $ | 184,604 | $ | 180,324 | $ | 197,997 | ||||||||||||||
Retained earnings | 535,373 | 505,207 | 475,072 | 443,409 | 414,393 | |||||||||||||||||||
Accumulated other comprehensive income | (34,010 | ) | (29,874 | ) | (28,605 | ) | (33,180 | ) | (20,798 | ) | ||||||||||||||
Total shareholders' equity | $ | 668,767 | $ | 656,541 | $ | 631,071 | $ | 590,553 | $ | 591,592 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 6,667,942 | $ | 6,461,537 | $ | 6,425,358 | $ | 6,292,843 | $ | 6,233,041 | ||||||||||||||
Quarter-to-Date Average Balances, Yield And Rates | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Three months ended | Three months ended | Three months ended | ||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||
Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||
Average | Income or | Yield/ | Average | Income or | Yield/ | Average | Income or | Yield/ | ||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||
ASSETS | (Dollars in thousands) | |||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||
Loans (1,2) | $ | 5,044,517 | $ | 102,220 | 8.13 | % | $ | 5,013,740 | $ | 95,881 | 7.76 | % | $ | 4,777,353 | $ | 58,541 | 4.92 | % | ||||||||
Investment securities (3) | 397,905 | 3,709 | 3.74 | % | 442,852 | 3,994 | 3.66 | % | 430,203 | 2,370 | 2.21 | % | ||||||||||||||
Federal funds sold | 20,000 | 272 | 5.45 | % | 20,222 | 224 | 4.50 | % | 20,088 | 46 | 0.92 | % | ||||||||||||||
Other earning assets | 970,528 | 12,311 | 5.09 | % | 799,816 | 9,087 | 4.61 | % | 780,380 | 1,708 | 0.88 | % | ||||||||||||||
Total interest-earning assets | 6,432,950 | 118,512 | 7.39 | % | 6,276,630 | 109,186 | 7.05 | % | 6,008,024 | 62,665 | 4.18 | % | ||||||||||||||
Deferred loan fees, net | (10,417 | ) | (9,937 | ) | (9,084 | ) | ||||||||||||||||||||
Allowance for credit losses on loans | (68,956 | ) | (68,466 | ) | (58,568 | ) | ||||||||||||||||||||
Non-interest earning assets: | ||||||||||||||||||||||||||
Cash and due from banks | 12,712 | 11,527 | 11,363 | |||||||||||||||||||||||
Bank furniture and fixtures | 9,005 | 8,977 | 10,028 | |||||||||||||||||||||||
Right of use assets | 21,988 | 21,867 | 21,287 | |||||||||||||||||||||||
Other assets | 161,369 | 160,251 | 150,653 | |||||||||||||||||||||||
Total assets | $ | 6,558,651 | $ | 6,400,849 | $ | 6,133,703 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Interest-bearing demand and savings | $ | 1,931,647 | $ | 16,453 | 3.42 | % | $ | 2,241,929 | $ | 17,077 | 3.09 | % | $ | 2,172,002 | $ | 2,468 | 0.46 | % | ||||||||
TCD | 1,259,305 | 12,772 | 4.07 | % | 1,266,072 | 10,743 | 3.44 | % | 892,410 | 1,211 | 0.54 | % | ||||||||||||||
Other time certificates | 1,358,567 | 12,664 | 3.74 | % | 943,298 | 5,850 | 2.52 | % | 918,476 | 1,131 | 0.49 | % | ||||||||||||||
Total interest-bearing deposits | 4,549,519 | 41,889 | 3.69 | % | 4,451,299 | 33,670 | 3.07 | % | 3,982,888 | 4,810 | 0.48 | % | ||||||||||||||
Short-term borrowings | - | - | 0.00 | % | - | - | 0.00 | % | - | - | 0.00 | % | ||||||||||||||
Advance from Federal home loan bank | 150,000 | 1,888 | 5.05 | % | 31,667 | 374 | 4.78 | % | - | - | 0.00 | % | ||||||||||||||
Subordinated debt, net | 148,077 | 1,325 | 3.59 | % | 148,016 | 1,325 | 3.63 | % | 147,841 | 1,325 | 3.59 | % | ||||||||||||||
Total interest-bearing liabilities | 4,847,596 | 45,102 | 3.73 | % | 4,630,982 | 35,369 | 3.10 | % | 4,130,729 | 6,135 | 0.60 | % | ||||||||||||||
Non-interest bearing liabilities: | ||||||||||||||||||||||||||
Demand deposits | 931,938 | 1,028,646 | 1,318,482 | |||||||||||||||||||||||
Lease Liability | 20,708 | 20,993 | 21,602 | |||||||||||||||||||||||
Other liabilities | 81,103 | 69,265 | 56,630 | |||||||||||||||||||||||
Total liabilities | 5,881,345 | 5,749,886 | 5,527,443 | |||||||||||||||||||||||
Shareholders’ equity | 677,306 | 650,963 | 606,260 | |||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,558,651 | $ | 6,400,849 | $ | 6,133,703 | ||||||||||||||||||||
Net interest income | $ | 73,410 | $ | 73,817 | $ | 56,530 | ||||||||||||||||||||
Net interest spread | 3.66 | % | 3.96 | % | 3.59 | % | ||||||||||||||||||||
Net interest margin | 4.58 | % | 4.77 | % | 3.77 | % | ||||||||||||||||||||
Cost of Deposits: | ||||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 931,938 | $ | 1,028,646 | $ | 1,318,482 | ||||||||||||||||||||
Interest-bearing deposits | 4,549,519 | 41,889 | 3.69 | % | 4,451,299 | 33,670 | 3.07 | % | 3,982,888 | 4,810 | 0.48 | % | ||||||||||||||
Total Deposits | $ | 5,481,457 | $ | 41,889 | 3.07 | % | $ | 5,479,945 | $ | 33,670 | 2.49 | % | $ | 5,301,370 | $ | 4,810 | 0.36 | % | ||||||||
(1) | Includes non-accrual loans and loans held for sale | |||||||||||||||||||||||||
(2) | Net loan fee income of | |||||||||||||||||||||||||
(3) | Yields on securities have been adjusted to a tax-equivalent basis |
Year-to-Date Average Balances, Yield and Rates | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Six months ended | ||||||||||||||||||
2023 | 2022 | |||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||
Average | Income or | Yield/ | Average | Income or | Yield/ | |||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
ASSETS | (Dollars in thousands) | |||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans (1,2) | $ | 5,029,214 | $ | 198,101 | 7.94 | % | $ | 4,573,357 | $ | 110,660 | 4.88 | % | ||||||
Investment securities (3) | 420,254 | 7,703 | 3.70 | % | 442,981 | 4,594 | 2.09 | % | ||||||||||
Federal funds sold | 20,110 | 496 | 4.97 | % | 20,105 | 65 | 0.65 | % | ||||||||||
Other earning assets | 885,644 | 21,398 | 4.87 | % | 936,921 | 2,478 | 0.25 | % | ||||||||||
Total interest-earning assets | 6,355,222 | 227,698 | 7.23 | % | 5,973,364 | 117,797 | 3.98 | % | ||||||||||
Deferred loan fees, net | (10,178 | ) | (7,710 | ) | ||||||||||||||
Allowance for credit losses on loans | (68,713 | ) | (59,255 | ) | ||||||||||||||
Non-interest earning assets: | ||||||||||||||||||
Cash and due from banks | 11,920 | 11,474 | ||||||||||||||||
Bank furniture and fixtures | 8,991 | 10,233 | ||||||||||||||||
Right of use assets | 21,928 | 21,519 | ||||||||||||||||
Other assets | 161,016 | 139,550 | ||||||||||||||||
Total assets | $ | 6,480,186 | $ | 6,089,176 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Interest-bearing demand/ savings | $ | 2,086,551 | $ | 33,530 | 3.24 | % | $ | 2,125,241 | $ | 3,919 | 0.37 | % | ||||||
TCD | 1,262,670 | 23,515 | 3.76 | % | 910,689 | 2,238 | 0.50 | % | ||||||||||
Other time certificates | 1,152,080 | 18,514 | 3.24 | % | 929,419 | 2,320 | 0.50 | % | ||||||||||
Total interest-bearing deposits | 4,501,301 | 75,559 | 3.39 | % | 3,965,349 | 8,477 | 0.43 | % | ||||||||||
Advance from Federal home loan bank | 91,160 | 2,262 | 5.00 | % | - | - | 0.00 | % | ||||||||||
Subordinated debt, net | 148,047 | 2,650 | 3.61 | % | 147,812 | 2,650 | 3.62 | % | ||||||||||
Total interest-bearing liabilities | 4,740,508 | 80,471 | 3.42 | % | 4,113,161 | 11,127 | 0.55 | % | ||||||||||
Non-interest bearing liabilities: | ||||||||||||||||||
Demand deposits | 979,404 | 1,293,477 | ||||||||||||||||
Lease Liability | 20,850 | 22,030 | ||||||||||||||||
Other liabilities | 75,217 | 58,746 | ||||||||||||||||
Total liabilities | 5,815,979 | 5,487,414 | ||||||||||||||||
Shareholders’ equity | 664,207 | 601,762 | ||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,480,186 | $ | 6,089,176 | ||||||||||||||
Net interest income | $ | 147,227 | $ | 106,670 | ||||||||||||||
Net interest spread | 3.80 | % | 3.43 | % | ||||||||||||||
Net interest margin | 4.67 | % | 3.60 | % | ||||||||||||||
Cost of Deposits: | ||||||||||||||||||
Non-interest bearing demand deposits | $ | 979,404 | $ | 1,293,477 | ||||||||||||||
Interest-bearing deposits | 4,501,301 | 75,559 | 3.39 | % | 3,965,349 | 8,477 | 0.43 | % | ||||||||||
Total Deposits | $ | 5,480,705 | $ | 75,559 | 2.78 | % | $ | 5,258,826 | $ | 8,477 | 0.33 | % | ||||||
(1) | Includes non-accrual loans and loans held for sale | |||||||||||||||||
(2) | Net loan fee income of | |||||||||||||||||
(3) | Yields on securities have been adjusted to a tax-equivalent basis |
Loan and Credit Quality Information | |||||||||||||
Allowance For Credit Losses History | |||||||||||||
Six Months Ended | Year ended | ||||||||||||
(Dollars in 000's) | |||||||||||||
Allowance For Credit Losses | |||||||||||||
Balance at Beginning of Period | $ | 68,472 | $ | 59,969 | |||||||||
Charge-Offs | |||||||||||||
Commercial & Industrial | 44 | 1,222 | |||||||||||
- | 1 | ||||||||||||
Total Charge-Offs | 44 | 1,223 | |||||||||||
Recoveries | |||||||||||||
Commercial & Industrial | 1 | - | |||||||||||
- | 2,376 | ||||||||||||
Total Recoveries | 1 | 2,376 | |||||||||||
Net Charge-Offs (recoveries) | 43 | (1,153 | ) | ||||||||||
Provision for Credit Losses: | 3,000 | 7,350 | |||||||||||
Balance at End of Period | $ | 71,429 | $ | 68,472 | |||||||||
Average Loans Held for Investment | $ | 5,028,520 | $ | 4,760,815 | |||||||||
Loans Held for Investment at End of Period | $ | 5,118,511 | $ | 5,074,793 | |||||||||
Net Charge-Offs (recoveries) to Average Loans | 0.00 | % | -0.02 | % | |||||||||
Allowances for Credit Losses to Loans at End of Period | 1.40 | % | 1.35 | % | |||||||||
Source:
2023 GlobeNewswire, Inc., source