Executive Snapshot:
- Continued solid financial results:
- Key metrics for third quarter of 2017 results:
- Net income of $12.6 million in the third quarter of 2017, up 15.2% compared to $10.9 million in the third quarter of 2016
- Return on average assets (ROA) of 1.02% compared to 0.90% in the third quarter of 2016
- Return on average equity (ROE) of 11.06% compared to 10.05% in the third quarter of 2016
- Efficiency ratio of 52.79% compared to 54.11% in the third quarter of 2016 (Non-GAAP measure; see P. 15 for definition)
- Key metrics for third quarter of 2017 results:
- Asset quality remains solid:
- Nonperforming assets (NPAs) fell by $3.3 million compared to September 30, 2016
- NPAs to total assets improved to 0.56%, compared to 0.64% at September 30, 2016
- Quarterly net chargeoffs were equal to 0.07% of average loans on an annualized basis, compared to 0.10% for the third quarter of 2016
- Continued expansion of customer base:
- Focus on capitalizing on opportunities presented by expanded branch network
- Average deposits per branch grew $180 thousand to $28.9 million from September 30, 2016 to September 30, 2017
- Average core (non-maturity) deposits were $89.8million higher in the third quarter of 2017 compared to the third quarter of 2016, an increase of 3.0%.
- Loan portfolio reaches all-time high:
- Average loans were up $171 million for the third quarter of 2017 compared to third quarter of 2016
- At $3.58 billion as of September 30, 2017, loans reached an all-time high
TrustCo Announces 15% Increase in Third Quarter 2017 Net Income
GLENVILLE, N.Y., Oct. 23, 2017 (GLOBE NEWSWIRE) — TrustCo Bank Corp NY (TrustCo) (Nasdaq:TRST) today announced third quarter of 2017 net income of $12.6 million compared to $10.9 million for the third quarter of 2016, an increase of 15.2%.
Summary
Robert J. McCormick, President and Chief Executive Officer noted, “We are pleased to be able to report a 15% increase in net income in the third quarter of 2017 as compared to the third quarter of 2016. Solid revenue growth and expense control combined to produce a solid quarter, building on an encouraging first half of 2017. Our focus on traditional lending criteria and conservative balance sheet management has enabled us to produce consistent earnings, maintain strong liquidity and capital and allowed us to continue to grow our business and take advantage of changes in market and competitive conditions. In terms of our core business, we continue to add customer relationships, which ultimately drive future growth. We will continue to take advantage of opportunities as they are presented during the balance of 2017 and beyond.”
TrustCo saw continued solid loan growth in the third quarter of 2017 compared to the prior year, led by an increase in residential mortgages. Loan portfolio expansion was funded by a combination of utilizing a portion of our strong cash balances and by cash flow from investments. The continued shift toward loans helped offset the margin impact from continued comparatively low yields on cash and investments. The Federal Reserve decision to begin to raise the target Federal Funds rate has contributed to our results during 2017 as our cash position immediately repriced upward, and is likely to continue to do so in 2018 to the extent there are additional rate increases. While total average deposits were roughly flat in the third quarter of 2017 versus the prior year, core deposits were up $89.8 million over that time frame, contributing to a decline in our cost of funds. The gain in core deposits was led by demand deposits and low cost interest bearing checking deposits. TrustCo’s strong liquidity position continues to allow it to take advantage of opportunities as they arise.
Asset quality measures improved versus September 30, 2016, with nonperforming assets (NPAs) declining $3.3 million.
Details
Average loans were up $171.0 million or 5.1% in the third quarter of 2017 over the same period in 2016. Average residential loans, our primary lending focus, were up $216.4 million or 7.7% in the third quarter of 2017, over the same period in 2016. Overall loan growth was constrained by an $11.2 million decline in average commercial loans, which have become less attractive on a risk adjusted basis, and a $33.9 million decline in average outstandings on home equity lines of credit, as well as a small decline in installment loans. Average deposits were down $8.3 million or 0.2% for the third quarter of 2017 over the same period a year earlier. The decrease in deposits was the result of a $98.0 million decline in average time deposits as the company focused on less costly non-maturity deposits. Excluding time deposits, core deposit accounts, which consist of checking, savings and money market deposits, were up $89.8 million from the third quarter of 2016 to the third quarter of 2017. Within core, money market balances were up $835 thousand, checking balances were up $93.2 million (including interest bearing and non-interest bearing balances) and savings were down $4.2 million. Core deposits typically represent longer term customer relationships and are generally lower cost than time deposits. The cost of interest bearing deposits declined from 0.37% in the third quarter of 2016 to 0.34% in the third quarter of 2017. The cost of core deposits, including demand, declined from 0.14% to 0.13% over this same time frame. Mr. McCormick noted that, “The year-over-year growth of our loans and core deposit base reflect the long term strategic focus of the Company.”
For the third quarter of 2017, return on average assets and return on average equity were 1.02% and 11.06%, respectively, compared to 0.90% and 10.05% for the third quarter of 2016. Diluted earnings per share were $0.131 for the third quarter of 2017, compared to $0.114 for the third quarter of 2016. As previously discussed, some operating costs remain at elevated levels in response to regulatory requirements, however overall expense control remains a key area of focus. Total operating expenses increased by $477 thousand in the third quarter of 2017 as compared to the third quarter of 2016, with increases in compensation and several other categories partly offset by declines in ORE costs and several other categories. The modest increase in expenses was more than offset by a $2.6 million increase in revenue (net interest income plus non-interest income), which coupled with a slightly lower effective tax rate resulted in the bottom line improvement noted.
“While some banks have backed away from branches, a customer-friendly branch franchise continues to be the key to our long term plans. We continue to make good progress expanding loans and deposits throughout our entire branch network. We expect that trend to continue as the newer branches continue to mature.”
“At September 30, 2017, our average deposits per branch were $28.9 million, compared to $28.7 million a year earlier. We have always designed our branches to be smaller and more cost effective than those built by many of our competitors. We use open floor plans that help maximize the value of our branches. We remain mindful that fully achieving our goals for newer branches will take time and continued work. We believe success in growing customer relationships provides basic building blocks that will help drive profit growth for the coming years.”
Asset quality and loan loss reserve measures were generally consistent with June 30, 2017 metrics and generally improved versus September 30, 2016. Nonperforming loans (NPLs) were $24.6 million at September 30, 2017, compared to $26.0 million at September 30, 2016. NPLs were equal to 0.69% of total loans at September 30, 2017, compared to 0.77% at September 30, 2016. The coverage ratio, or allowance for loan losses to NPLs, was 179.3% at September 30, 2017, compared to 169.0% at September 30, 2016. Nonperforming assets (NPAs) were $27.5 million at September 30, 2017 compared to $30.8 million at September 30, 2016. The ratio of loan loss allowance to total loans was 1.23% as of September 30, 2017, compared to 1.30% at September 30, 2016 and reflects both the improvement in asset quality and economic conditions in our lending areas. The allowance for loan losses was $44.1 million at September 30, 2017 compared to $44.0 million at September 30, 2016. The provision for loan losses was $550 thousand for the third quarter of 2017, compared to $750 thousand in the third quarter of 2016. Net chargeoffs for the third quarter of 2017 decreased versus the third quarter of 2016, falling to $630 thousand from $864 thousand in the year earlier period. The annualized net chargeoff ratio was 0.07% for the third quarter of 2017, compared to 0.10% in the third quarter of 2016.
The net interest margin for the third quarter of 2017 was 3.26%, up 17 basis points versus the third quarter of 2016, as increases in short term interest rates led to significantly higher earnings on cash, while slightly better returns were also achieved in the investment portfolio. Loan yields did decline, but that was more than offset by higher volumes in terms of income. During the same period, the cost of interest bearing liabilities declined, reflecting TrustCo’s strong funding base.
For the first nine months of 2017, net income was $35.8 million, up 12.5% as compared to $31.8 million in the first nine months of 2016, or $0.372 and $0.333, respectively, per diluted share.
At September 30, 2017 the equity to asset ratio was 9.34%, compared to 9.05% at September 30, 2016. Book value per share at September 30, 2017 was $4.73 compared to $4.55 a year earlier.
TrustCo Bank Corp NY is a $4.9 billion savings and loan holding company and through its subsidiary, Trustco Bank, operated 144 offices in New York, New Jersey, Vermont, Massachusetts, and Florida at September 30, 2017.
In addition, the Bank’s Financial Services Department offers a full range of investment services, retirement planning and trust and estate administration services. The common shares of TrustCo are traded on the NASDAQ Global Select Market under the symbol TRST.
A conference call to discuss third quarter 2017 results will be held at 9:00 a.m. Eastern Time on October 24, 2017. Those wishing to participate in the call may dial toll-free 1-888-339-0764. International callers must dial 1-412-902-4195. Please ask to be joined into the TrustCo Bank Corp NY / TRST call. A replay of the call will be available for thirty days by dialing 1-877-344-7529 (1-412-317-0088 for international callers), Conference Number 10113238. The call will also be audio webcast at: http://services.choruscall.com/links/trst171024.html, and will be available for one year.
Safe Harbor Statement
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during 2017, the impact of Federal Reserve actions regarding interest rates and the growth of loans and deposits throughout our branch network, our ability to capitalize on economic changes in the areas in which we operate and the extent to which higher expenses to fulfill operating and regulatory requirements recur or diminish over time. Such forward-looking statements are subject to factors that could cause actual results to differ materially for TrustCo from those discussed. TrustCo wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect TrustCo’s actual results and could cause TrustCo’s actual financial performance to differ materially from that expressed in any forward-looking statement: our ability to continue to originate a significant volume of one-to-four family mortgage loans in our market areas; our ability to continue to maintain noninterest expense and other overhead costs at reasonable levels relative to income; our ability to comply with the supervisory agreement entered into with Trustco Bank’s regulator and potential regulatory actions if we fail to comply; restrictions or conditions imposed by our regulators on our operations that may make it more difficult for us to achieve our goals; the future earnings and capital levels of Trustco Bank and the continued ability of Trustco Bank under regulatory rules and the supervisory agreement to distribute capital to TrustCo, which could affect our ability to pay dividends; results of supervisory monitoring or examinations of Trustco Bank and TrustCo by our respective regulators; our ability to make accurate assumptions and judgments regarding the credit risks associated with lending and investing activities; the effect of changes in financial services laws and regulations and the impact of other governmental initiatives affecting the financial services industry; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board, inflation, interest rates, market and monetary fluctuations; adverse conditions on the securities markets that lead to impairment in the value of securities in our investment portfolio; changes in law and policy accompanying the new presidential administration and uncertainty or speculation pending the enactment of such changes; the perceived overall value of our products and services by users, including in comparison to competitors’ products and services and the willingness of current and prospective customers to substitute competitors’ products and services for our products and services; changes in consumer spending, borrowing and saving habits; technological changes and electronic, cyber, and physical security breaches; real estate and collateral values; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or PCAOB; changes in local market areas and general business and economic trends, as well as changes in consumer spending and saving habits; our success at managing the risks involved in the foregoing and managing our business; and other risks and uncertainties under the heading “Risk Factors” in our most recent annual report on Form 10-K and, if any, in our subsequent quarterly reports on Form 10-Q or other securities filings.
Contact:
Kevin T. Timmons
Vice President/Treasurer
(518) 381-3607
| TRUSTCO BANK CORP NY | ||||||||||||
| GLENVILLE, NY | ||||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| 09/30/17 | 06/30/17 | 09/30/16 | ||||||||||
| Summary of operations | ||||||||||||
| Net interest income (TE) | $ | 39,190 | 38,553 | 36,681 | ||||||||
| Provision for loan losses | 550 | 550 | 750 | |||||||||
| Net gain on securities transactions | – | – | – | |||||||||
| Noninterest income, excluding net gain on securities transactions | 4,854 | 4,504 | 4,729 | |||||||||
| Noninterest expense | 23,526 | 22,913 | 23,049 | |||||||||
| Net income | 12,596 | 12,240 | 10,930 | |||||||||
| Per common share | ||||||||||||
| Net income per share: | ||||||||||||
| – Basic | $ | 0.131 | 0.127 | 0.114 | ||||||||
| – Diluted | 0.131 | 0.127 | 0.114 | |||||||||
| Cash dividends | 0.066 | 0.066 | 0.066 | |||||||||
| Book value at period end | 4.73 | 4.66 | 4.55 | |||||||||
| Market price at period end | 8.90 | 7.75 | 7.09 | |||||||||
| At period end | ||||||||||||
| Full time equivalent employees | 815 | 813 | 790 | |||||||||
| Full service banking offices | 144 | 144 | 145 | |||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 1.02 | % | 1.00 | 0.90 | ||||||||
| Return on average equity | 11.06 | 11.05 | 10.05 | |||||||||
| Efficiency (1) | 52.79 | 53.33 | 54.11 | |||||||||
| Net interest spread (TE) | 3.21 | 3.15 | 3.03 | |||||||||
| Net interest margin (TE) | 3.26 | 3.21 | 3.09 | |||||||||
| Dividend payout ratio | 50.07 | 51.48 | 57.40 | |||||||||
| Capital ratio at period end | ||||||||||||
| Consolidated equity to assets | 9.34 | % | 9.09 | 9.05 | ||||||||
| Consolidated tangible equity to tangible assets (1) | 9.33 | % | 9.08 | 9.04 | ||||||||
| Asset quality analysis at period end | ||||||||||||
| Nonperforming loans to total loans | 0.69 | 0.70 | 0.77 | |||||||||
| Nonperforming assets to total assets | 0.56 | 0.57 | 0.64 | |||||||||
| Allowance for loan losses to total loans | 1.23 | 1.26 | 1.30 | |||||||||
| Coverage ratio (3) | 1.8x | 1.8 | 1.6 | |||||||||
| (1) Non-GAAP measure; please refer to Non-GAAP disclosures on Page 14 . | ||||||||||||
| (2) Calculated as allowance for loan losses divided by total nonperforming loans. | ||||||||||||
| TE = Taxable equivalent. | ||||||||||||
| FINANCIAL HIGHLIGHTS, Continued | ||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nine Months Ended | ||||||||||||
| 09/30/17 | 09/30/16 | |||||||||||
| Summary of operations | ||||||||||||
| Net interest income (TE) | $ | 115,152 | 109,188 | |||||||||
| Provision for loan losses | 1,700 | 2,350 | ||||||||||
| Net gain on securities transactions | – | 668 | ||||||||||
| Noninterest income, excluding net gain on securities transactions | 14,085 | 13,832 | ||||||||||
| Noninterest expense | 70,458 | 70,462 | ||||||||||
| Net income | 35,783 | 31,803 | ||||||||||
| Per common share | ||||||||||||
| Net income per share: | ||||||||||||
| – Basic | $ | 0.373 | 0.333 | |||||||||
| – Diluted | 0.372 | 0.333 | ||||||||||
| Cash dividends | 0.197 | 0.197 | ||||||||||
| Book value at period end | 4.73 | 4.55 | ||||||||||
| Market price at period end | 8.90 | 7.09 | ||||||||||
| Performance ratios | ||||||||||||
| Return on average assets | 0.98 | % | 0.89 | |||||||||
| Return on average equity | 10.77 | 9.97 | ||||||||||
| Efficiency (1) | 53.96 | 56.01 | ||||||||||
| Net interest spread (TE) | 3.14 | 3.04 | ||||||||||
| Net interest margin (TE) | 3.20 | 3.10 | ||||||||||
| Dividend payout ratio | 52.82 | 59.11 | ||||||||||
| (1) Non-GAAP measure; please refer to Non-GAAP disclosures on Page 14 . | ||||||||||||
| TE = Taxable equivalent. | ||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||
| Interest and dividend income: | ||||||||||||
| Interest and fees on loans | $ | 37,513 | 36,662 | 36,044 | 36,251 | 36,171 | ||||||
| Interest and dividends on securities available for sale: | ||||||||||||
| U. S. government sponsored enterprises | 465 | 607 | 595 | 422 | 408 | |||||||
| State and political subdivisions | 6 | 11 | 12 | 12 | 13 | |||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 1,815 | 1,944 | 1,958 | 1,849 | 1,829 | |||||||
| Corporate bonds | 153 | 154 | 151 | 149 | 97 | |||||||
| Small Business Administration-guaranteed participation securities | 380 | 394 | 415 | 430 | 445 | |||||||
| Mortgage-backed securities and collateralized mortgage obligations-commercial | 22 | 21 | 23 | 23 | 36 | |||||||
| Other securities | 4 | 4 | 4 | 4 | 4 | |||||||
| Total interest and dividends on securities available for sale | 2,845 | 3,135 | 3,158 | 2,889 | 2,832 | |||||||
| Interest on held to maturity securities: | ||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 276 | 296 | 316 | 331 | 347 | |||||||
| Corporate bonds | 102 | 154 | 154 | 153 | 156 | |||||||
| Total interest on held to maturity securities | 378 | 450 | 470 | 484 | 503 | |||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 125 | 134 | 134 | 133 | 131 | |||||||
| Interest on federal funds sold and other short-term investments | 1,927 | 1,727 | 1,246 | 865 | 866 | |||||||
| Total interest income | 42,788 | 42,108 | 41,052 | 40,622 | 40,503 | |||||||
| Interest expense: | ||||||||||||
| Interest on deposits: | ||||||||||||
| Interest-bearing checking | 113 | 134 | 124 | 123 | 120 | |||||||
| Savings | 435 | 435 | 430 | 436 | 504 | |||||||
| Money market deposit accounts | 469 | 468 | 466 | 459 | 463 | |||||||
| Time deposits | 2,247 | 2,181 | 2,283 | 2,406 | 2,468 | |||||||
| Interest on short-term borrowings | 345 | 349 | 349 | 291 | 281 | |||||||
| Total interest expense | 3,609 | 3,567 | 3,652 | 3,715 | 3,836 | |||||||
| Net interest income | 39,179 | 38,541 | 37,400 | 36,907 | 36,667 | |||||||
| Provision for loan losses | 550 | 550 | 600 | 600 | 750 | |||||||
| Net interest income after provision for loan losses | 38,629 | 37,991 | 36,800 | 36,307 | 35,917 | |||||||
| Noninterest income: | ||||||||||||
| Trustco Financial Services income | 1,844 | 1,425 | 1,858 | 1,422 | 1,347 | |||||||
| Fees for services to customers | 2,767 | 2,797 | 2,637 | 2,795 | 2,664 | |||||||
| Net gain on securities transactions | – | – | – | – | – | |||||||
| Other | 243 | 282 | 232 | 295 | 718 | |||||||
| Total noninterest income | 4,854 | 4,504 | 4,727 | 4,512 | 4,729 | |||||||
| Noninterest expenses: | ||||||||||||
| Salaries and employee benefits | 10,360 | 9,559 | 10,210 | 9,576 | 8,995 | |||||||
| Net occupancy expense | 4,027 | 4,267 | 4,109 | 4,185 | 3,887 | |||||||
| Equipment expense | 1,669 | 1,428 | 1,556 | 1,370 | 1,596 | |||||||
| Professional services | 1,679 | 1,963 | 1,928 | 1,997 | 1,959 | |||||||
| Outsourced services | 1,650 | 1,500 | 1,500 | 1,775 | 1,465 | |||||||
| Advertising expense | 699 | 607 | 713 | 727 | 489 | |||||||
| FDIC and other insurance | 1,018 | 1,012 | 1,047 | 901 | 1,127 | |||||||
| Other real estate (income) expense, net | 275 | (4 | ) | 499 | 721 | 895 | ||||||
| Other | 2,149 | 2,581 | 2,457 | 2,113 | 2,636 | |||||||
| Total noninterest expenses | 23,526 | 22,913 | 24,019 | 23,365 | 23,049 | |||||||
| Income before taxes | 19,957 | 19,582 | 17,508 | 17,454 | 17,597 | |||||||
| Income taxes | 7,361 | 7,342 | 6,561 | 6,656 | 6,667 | |||||||
| Net income | $ | 12,596 | 12,240 | 10,947 | 10,798 | 10,930 | ||||||
| Net income per common share: | ||||||||||||
| – Basic | $ | 0.131 | 0.127 | 0.114 | 0.113 | 0.114 | ||||||
| – Diluted | 0.131 | 0.127 | 0.114 | 0.113 | 0.114 | |||||||
| Average basic shares (in thousands) | 96,102 | 96,003 | 95,879 | 95,732 | 95,603 | |||||||
| Average diluted shares (in thousands) | 96,205 | 96,073 | 95,987 | 95,877 | 95,722 | |||||||
| Note: Taxable equivalent net interest income | $ | 39,190 | 38,553 | 37,413 | 36,921 | 36,681 | ||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nine Months Ended | ||||||||||||
| 9/30/2017 | 9/30/2016 | |||||||||||
| Interest and dividend income: | ||||||||||||
| Interest and fees on loans | $ | 110,219 | 107,428 | |||||||||
| Interest and dividends on securities available for sale: | ||||||||||||
| U. S. government sponsored enterprises | 1,667 | 1,067 | ||||||||||
| State and political subdivisions | 29 | 40 | ||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 5,717 | 6,114 | ||||||||||
| Corporate bonds | 458 | 97 | ||||||||||
| Small Business Administration-guaranteed participation securities | 1,189 | 1,371 | ||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-commercial | 66 | 110 | ||||||||||
| Other securities | 12 | 12 | ||||||||||
| Total interest and dividends on securities available for sale | 9,138 | 8,811 | ||||||||||
| Interest on held to maturity securities: | ||||||||||||
| Mortgage-backed securities-residential | 888 | 1,123 | ||||||||||
| Corporate bonds | 410 | 464 | ||||||||||
| Total interest on held to maturity securities | 1,298 | 1,587 | ||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 393 | 369 | ||||||||||
| Interest on federal funds sold and other short-term investments | 4,900 | 2,542 | ||||||||||
| Total interest income | 125,948 | 120,737 | ||||||||||
| Interest expense: | ||||||||||||
| Interest on deposits: | ||||||||||||
| Interest-bearing checking | 371 | 350 | ||||||||||
| Savings | 1,300 | 1,712 | ||||||||||
| Money market deposit accounts | 1,403 | 1,426 | ||||||||||
| Time deposits | 6,711 | 7,301 | ||||||||||
| Interest on short-term borrowings | 1,043 | 800 | ||||||||||
| Total interest expense | 10,828 | 11,589 | ||||||||||
| Net interest income | 115,120 | 109,148 | ||||||||||
| Provision for loan losses | 1,700 | 2,350 | ||||||||||
| Net interest income after provision for loan losses | 113,420 | 106,798 | ||||||||||
| Noninterest income: | ||||||||||||
| Trust department income | 5,127 | 4,464 | ||||||||||
| Fees for services to customers | 8,201 | 8,062 | ||||||||||
| Net gain on securities transactions | – | 668 | ||||||||||
| Other | 757 | 1,306 | ||||||||||
| Total noninterest income | 14,085 | 14,500 | ||||||||||
| Noninterest expenses: | ||||||||||||
| Salaries and employee benefits | 30,129 | 26,932 | ||||||||||
| Net occupancy expense | 12,403 | 11,893 | ||||||||||
| Equipment expense | 4,653 | 4,950 | ||||||||||
| Professional services | 5,570 | 6,203 | ||||||||||
| Outsourced services | 4,650 | 4,441 | ||||||||||
| Advertising expense | 2,019 | 1,788 | ||||||||||
| FDIC and other insurance | 3,077 | 5,066 | ||||||||||
| Other real estate expense, net | 770 | 1,837 | ||||||||||
| Other | 7,187 | 7,352 | ||||||||||
| Total noninterest expenses | 70,458 | 70,462 | ||||||||||
| Income before taxes | 57,047 | 50,836 | ||||||||||
| Income taxes | 21,264 | 19,033 | ||||||||||
| Net income | $ | 35,783 | 31,803 | |||||||||
| Net income per Common Share: | ||||||||||||
| – Basic | $ | 0.373 | 0.333 | |||||||||
| – Diluted | 0.372 | 0.333 | ||||||||||
| Average basic shares (thousands) | 95,997 | 95,486 | ||||||||||
| Average diluted shares (thousands) | 96,091 | 95,572 | ||||||||||
| Note: Taxable equivalent net interest income | $ | 115,152 | 109,188 | |||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||
| (dollars in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | ||||||||
| ASSETS: | ||||||||||||
| Cash and due from banks | $ | 41,598 | 43,783 | 41,352 | 48,719 | 42,296 | ||||||
| Federal funds sold and other short term investments | 582,599 | 663,360 | 641,839 | 658,555 | 622,132 | |||||||
| Total cash and cash equivalents | 624,197 | 707,143 | 683,191 | 707,274 | 664,428 | |||||||
| Securities available for sale: | ||||||||||||
| U. S. government sponsored enterprises | 123,658 | 128,386 | 162,341 | 117,266 | 116,327 | |||||||
| States and political subdivisions | 534 | 536 | 887 | 886 | 970 | |||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 335,530 | 352,591 | 357,683 | 372,308 | 400,575 | |||||||
| Small Business Administration-guaranteed participation securities | 69,818 | 72,858 | 75,429 | 78,499 | 84,687 | |||||||
| Mortgage-backed securities and collateralized mortgage obligations-commercial | 9,824 | 9,903 | 9,923 | 10,011 | 10,233 | |||||||
| Corporate bonds | 40,381 | 40,498 | 40,612 | 40,705 | 41,025 | |||||||
| Other securities | 685 | 685 | 685 | 685 | 685 | |||||||
| Total securities available for sale | 580,430 | 605,457 | 647,560 | 620,360 | 654,502 | |||||||
| Held to maturity securities: | ||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations-residential | 29,268 | 31,211 | 33,276 | 35,500 | 38,044 | |||||||
| Corporate bonds | 0 | 9,997 | 9,994 | 9,990 | 9,986 | |||||||
| Total held to maturity securities | 29,268 | 41,208 | 43,270 | 45,490 | 48,030 | |||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 8,779 | 9,723 | 9,579 | 9,579 | 9,579 | |||||||
| Loans: | ||||||||||||
| Commercial | 187,281 | 183,035 | 184,451 | 191,194 | 189,795 | |||||||
| Residential mortgage loans | 3,070,970 | 2,999,306 | 2,929,928 | 2,895,733 | 2,845,876 | |||||||
| Home equity line of credit | 311,753 | 316,674 | 326,280 | 334,841 | 343,445 | |||||||
| Installment loans | 8,278 | 8,458 | 8,277 | 8,818 | 8,515 | |||||||
| Loans, net of deferred net costs | 3,578,282 | 3,507,473 | 3,448,936 | 3,430,586 | 3,387,631 | |||||||
| Less: | ||||||||||||
| Allowance for loan losses | 44,082 | 44,162 | 44,048 | 43,890 | 43,950 | |||||||
| Net loans | 3,534,200 | 3,463,311 | 3,404,888 | 3,386,696 | 3,343,681 | |||||||
| Bank premises and equipment, net | 35,028 | 35,174 | 35,175 | 35,466 | 36,110 | |||||||
| Other assets | 58,373 | 58,466 | 63,080 | 63,941 | 56,519 | |||||||
| Total assets | $ | 4,870,275 | 4,920,482 | 4,886,743 | 4,868,806 | 4,812,849 | ||||||
| LIABILITIES: | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 397,623 | 390,120 | 373,930 | 377,755 | 380,090 | ||||||
| Interest-bearing checking | 862,067 | 871,004 | 838,936 | 815,534 | 785,118 | |||||||
| Savings accounts | 1,265,229 | 1,285,886 | 1,287,802 | 1,271,449 | 1,277,734 | |||||||
| Money market deposit accounts | 564,557 | 572,580 | 583,909 | 571,962 | 566,097 | |||||||
| Time deposits | 1,075,886 | 1,088,824 | 1,113,892 | 1,159,463 | 1,159,199 | |||||||
| Total deposits | 4,165,362 | 4,208,414 | 4,198,469 | 4,196,163 | 4,168,238 | |||||||
| Short-term borrowings | 216,508 | 233,621 | 220,946 | 209,406 | 179,204 | |||||||
| Accrued expenses and other liabilities | 33,477 | 31,081 | 28,628 | 30,551 | 29,799 | |||||||
| Total liabilities | 4,415,347 | 4,473,116 | 4,448,043 | 4,436,120 | 4,377,241 | |||||||
| SHAREHOLDERS’ EQUITY: | ||||||||||||
| Capital stock | 99,562 | 99,511 | 99,493 | 99,214 | 99,121 | |||||||
| Surplus | 172,712 | 172,603 | 172,628 | 171,425 | 171,093 | |||||||
| Undivided profits | 218,401 | 212,112 | 206,173 | 201,517 | 197,013 | |||||||
| Accumulated other comprehensive (loss) income, net of tax | (3,060 | ) | (3,593 | ) | (5,568 | ) | (6,251 | ) | 2,328 | |||
| Treasury stock at cost | (32,687 | ) | (33,267 | ) | (34,026 | ) | (33,219 | ) | (33,947 | ) | ||
| Total shareholders’ equity | 454,928 | 447,366 | 438,700 | 432,686 | 435,608 | |||||||
| Total liabilities and shareholders’ equity | $ | 4,870,275 | 4,920,482 | 4,886,743 | 4,868,806 | 4,812,849 | ||||||
| Outstanding shares (in thousands) | 96,108 | 96,015 | 95,917 | 95,780 | 95,614 | |||||||
| NONPERFORMING ASSETS | ||||||||||||
| (dollars in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nonperforming Assets | ||||||||||||
| 09/30/17 | 06/30/17 | 03/31/17 | 12/31/16 | 09/30/16 | ||||||||
| New York and other states* | ||||||||||||
| Loans in nonaccrual status: | ||||||||||||
| Commercial | $ | 1,696 | 1,711 | 1,858 | 1,843 | 2,366 | ||||||
| Real estate mortgage – 1 to 4 family | 20,926 | 20,639 | 22,772 | 21,198 | 21,678 | |||||||
| Installment | 30 | 25 | 41 | 48 | 70 | |||||||
| Total non-accrual loans | 22,652 | 22,375 | 24,671 | 23,089 | 24,114 | |||||||
| Other nonperforming real estate mortgages – 1 to 4 family | 40 | 41 | 41 | 42 | 44 | |||||||
| Total nonperforming loans | 22,692 | 22,416 | 24,712 | 23,131 | 24,158 | |||||||
| Other real estate owned | 2,879 | 3,585 | 3,191 | 4,268 | 4,768 | |||||||
| Total nonperforming assets | $ | 25,571 | 26,001 | 27,903 | 27,399 | 28,926 | ||||||
| Florida | ||||||||||||
| Loans in nonaccrual status: | ||||||||||||
| Commercial | $ | – | – | – | – | – | ||||||
| Real estate mortgage – 1 to 4 family | 1,895 | 2,112 | 1,712 | 1,929 | 1,844 | |||||||
| Installment | – | – | – | – | – | |||||||
| Total non-accrual loans | 1,895 | 2,112 | 1,712 | 1,929 | 1,844 | |||||||
| Other nonperforming real estate mortgages – 1 to 4 family | – | – | – | – | – | |||||||
| Total nonperforming loans | 1,895 | 2,112 | 1,712 | 1,929 | 1,844 | |||||||
| Other real estate owned | – | – | – | – | – | |||||||
| Total nonperforming assets | $ | 1,895 | 2,112 | 1,712 | 1,929 | 1,844 | ||||||
| Total | ||||||||||||
| Loans in nonaccrual status: | ||||||||||||
| Commercial | $ | 1,696 | 1,711 | 1,858 | 1,843 | 2,366 | ||||||
| Real estate mortgage – 1 to 4 family | 22,821 | 22,751 | 24,484 | 23,127 | 23,522 | |||||||
| Installment | 30 | 25 | 41 | 48 | 70 | |||||||
| Total non-accrual loans | 24,547 | 24,487 | 26,383 | 25,018 | 25,958 | |||||||
| Other nonperforming real estate mortgages – 1 to 4 family | 40 | 41 | 41 | 42 | 44 | |||||||
| Total nonperforming loans | 24,587 | 24,528 | 26,424 | 25,060 | 26,002 | |||||||
| Other real estate owned | 2,879 | 3,585 | 3,191 | 4,268 | 4,768 | |||||||
| Total nonperforming assets | $ | 27,466 | 28,113 | 29,615 | 29,328 | 30,770 | ||||||
| Quarterly Net Chargeoffs (Recoveries) | ||||||||||||
| 09/30/17 | 06/30/17 | 03/31/17 | 12/31/16 | 09/30/16 | ||||||||
| New York and other states* | ||||||||||||
| Commercial | $ | (2 | ) | – | 64 | (56 | ) | 353 | ||||
| Real estate mortgage – 1 to 4 family | 613 | 334 | 261 | 619 | 471 | |||||||
| Installment | 56 | 37 | 31 | 55 | 37 | |||||||
| Total net chargeoffs | $ | 667 | 371 | 356 | 618 | 861 | ||||||
| Florida | ||||||||||||
| Commercial | $ | – | – | – | – | – | ||||||
| Real estate mortgage – 1 to 4 family | (41 | ) | 52 | 84 | 23 | – | ||||||
| Installment | 4 | 13 | 2 | 19 | 3 | |||||||
| Total net chargeoffs | $ | (37 | ) | 65 | 86 | 42 | 3 | |||||
| Total | ||||||||||||
| Commercial | $ | (2 | ) | – | 64 | (56 | ) | 353 | ||||
| Real estate mortgage – 1 to 4 family | 572 | 386 | 345 | 642 | 471 | |||||||
| Installment | 60 | 50 | 33 | 74 | 40 | |||||||
| Total net chargeoffs | $ | 630 | 436 | 442 | 660 | 864 | ||||||
| Asset Quality Ratios | ||||||||||||
| 09/30/17 | 06/30/17 | 03/31/17 | 12/31/16 | 09/30/16 | ||||||||
| Total nonperforming loans(1) | $ | 24,587 | 24,528 | 26,424 | 25,060 | 26,002 | ||||||
| Total nonperforming assets(1) | 27,466 | 28,113 | 29,615 | 29,328 | 30,770 | |||||||
| Total net chargeoffs(2) | 630 | 436 | 442 | 660 | 864 | |||||||
| Allowance for loan losses(1) | 44,082 | 44,162 | 44,048 | 43,890 | 43,950 | |||||||
| Nonperforming loans to total loans | 0.69 | % | 0.70 | % | 0.77 | % | 0.73 | % | 0.77 | % | ||
| Nonperforming assets to total assets | 0.56 | % | 0.57 | % | 0.61 | % | 0.60 | % | 0.64 | % | ||
| Allowance for loan losses to total loans | 1.23 | % | 1.26 | % | 1.28 | % | 1.28 | % | 1.30 | % | ||
| Coverage ratio(1) | 179.3 | % | 180.0 | % | 166.7 | % | 175.1 | % | 169.0 | % | ||
| Annualized net chargeoffs to average loans(2) | 0.07 | % | 0.05 | % | 0.05 | % | 0.08 | % | 0.10 | % | ||
| Allowance for loan losses to annualized net chargeoffs(2) | 17.5x | 25.3x | 24.9x | 16.6x | 12.7x | |||||||
| * Includes New York, New Jersey, Vermont and Massachusetts. | ||||||||||||
| (1) At period-end | ||||||||||||
| (2) For the period ended | ||||||||||||
| DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY- | |||||||||||||||||
| INTEREST RATES AND INTEREST DIFFERENTIAL | |||||||||||||||||
| (dollars in thousands) | Three months ended | Three months ended | |||||||||||||||
| (Unaudited) | September 30, 2017 | September 30, 2016 | |||||||||||||||
| Average | Interest | Average | Average | Interest | Average | ||||||||||||
| Balance | Rate | Balance | Rate | ||||||||||||||
| Assets | |||||||||||||||||
| Securities available for sale: | |||||||||||||||||
| U. S. government sponsored enterprises | $ | 123,055 | 465 | 1.51 | % | $ | 109,488 | 408 | 1.49 | % | |||||||
| Mortgage backed securities and | |||||||||||||||||
| collateralized mortgage obligations-residential | 345,248 | 1,815 | 2.10 | 400,103 | 1,829 | 1.83 | |||||||||||
| State and political subdivisions | 522 | 11 | 8.43 | 953 | 20 | 8.39 | |||||||||||
| Corporate bonds | 42,528 | 153 | 1.44 | 27,161 | 97 | 1.43 | |||||||||||
| Small Business Administration-guaranteed participation securities | 72,204 | 380 | 2.11 | 85,305 | 445 | 2.09 | |||||||||||
| Mortgage backed securities and | |||||||||||||||||
| collateralized mortgage obligations-commercial | 9,918 | 22 | 0.89 | 10,247 | 36 | 1.41 | |||||||||||
| Other | 685 | 4 | 2.34 | 685 | 4 | 2.34 | |||||||||||
| Total securities available for sale | 594,160 | 2,850 | 1.92 | 633,942 | 2,839 | 1.79 | |||||||||||
| Federal funds sold and other | |||||||||||||||||
| short-term Investments | 621,878 | 1,927 | 1.24 | 683,777 | 866 | 0.50 | |||||||||||
| Held to maturity securities: | |||||||||||||||||
| Corporate bonds | 6,738 | 102 | 6.06 | 10,644 | 156 | 5.86 | |||||||||||
| Mortgage backed securities and | |||||||||||||||||
| collateralized mortgage obligations-residential | 30,161 | 276 | 3.66 | 39,307 | 347 | 3.53 | |||||||||||
| Total held to maturity securities | 36,899 | 378 | 4.10 | 49,951 | 503 | 4.03 | |||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,117 | 125 | 5.48 | 9,579 | 131 | 5.47 | |||||||||||
| Commercial loans | 183,867 | 2,482 | 5.40 | 195,115 | 2,597 | 5.32 | |||||||||||
| Residential mortgage loans | 3,035,745 | 31,600 | 4.16 | 2,819,343 | 30,175 | 4.28 | |||||||||||
| Home equity lines of credit | 312,812 | 3,237 | 4.14 | 346,744 | 3,211 | 3.70 | |||||||||||
| Installment loans | 8,096 | 200 | 9.88 | 8,331 | 195 | 9.36 | |||||||||||
| Loans, net of unearned income | 3,540,520 | 37,519 | 4.24 | 3,369,533 | 36,178 | 4.29 | |||||||||||
| Total interest earning assets | 4,802,574 | 42,799 | 3.56 | 4,746,782 | 40,517 | 3.41 | |||||||||||
| Allowance for loan losses | (44,284 | ) | (44,473 | ) | |||||||||||||
| Cash & non-interest earning assets | 127,004 | 137,462 | |||||||||||||||
| Total assets | $ | 4,885,294 | $ | 4,839,771 | |||||||||||||
| Liabilities and shareholders’ equity | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Interest bearing checking accounts | $ | 861,387 | 113 | 0.05 | % | $ | 780,058 | 120 | 0.06 | % | |||||||
| Money market accounts | 572,168 | 469 | 0.33 | 571,333 | 463 | 0.32 | |||||||||||
| Savings | 1,280,318 | 435 | 0.14 | 1,284,533 | 504 | 0.16 | |||||||||||
| Time deposits | 1,078,085 | 2,247 | 0.83 | 1,176,115 | 2,468 | 0.84 | |||||||||||
| Total interest bearing deposits | 3,791,958 | 3,264 | 0.34 | 3,812,039 | 3,555 | 0.37 | |||||||||||
| Short-term borrowings | 223,238 | 345 | 0.62 | 189,910 | 281 | 0.59 | |||||||||||
| Total interest bearing liabilities | 4,015,196 | 3,609 | 0.36 | 4,001,949 | 3,836 | 0.38 | |||||||||||
| Demand deposits | 389,286 | 377,455 | |||||||||||||||
| Other liabilities | 28,809 | 27,496 | |||||||||||||||
| Shareholders’ equity | 452,003 | 432,871 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,885,294 | $ | 4,839,771 | |||||||||||||
| Net interest income, tax equivalent | 39,190 | 36,681 | |||||||||||||||
| Net interest spread | 3.21 | % | 3.03 | % | |||||||||||||
| Net interest margin (net interest income | |||||||||||||||||
| to total interest earning assets) | 3.26 | % | 3.09 | % | |||||||||||||
| Tax equivalent adjustment | (11 | ) | (14 | ) | |||||||||||||
| Net interest income | 39,179 | 36,667 | |||||||||||||||
| DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY- | |||||||||||||||||
| INTEREST RATES AND INTEREST DIFFERENTIAL | |||||||||||||||||
| (dollars in thousands) | Nine Months ended | Nine Months ended | |||||||||||||||
| (Unaudited) | September 30, 2017 | September 30, 2016 | |||||||||||||||
| Average | Interest | Average | Average | Interest | Average | ||||||||||||
| Balance | Rate | Balance | Rate | ||||||||||||||
| Assets | |||||||||||||||||
| Securities available for sale: | |||||||||||||||||
| U. S. government sponsored enterprises | $ | 139,629 | 1,667 | 1.59 | % | $ | 97,281 | 1,067 | 1.46 | % | |||||||
| Mortgage backed securities and | |||||||||||||||||
| collateralized mortgage obligations-residential | 357,347 | 5,717 | 2.13 | 419,185 | 6,114 | 1.94 | |||||||||||
| State and political subdivisions | 736 | 41 | 7.43 | 1,007 | 60 | 7.94 | |||||||||||
| Corporate bonds | 42,272 | 458 | 1.44 | 9,120 | 97 | 1.42 | |||||||||||
| Small Business Administration-guaranteed participation securities | 75,429 | 1,189 | 2.10 | 87,896 | 1,371 | 2.08 | |||||||||||
| Mortgage backed securities and | |||||||||||||||||
| collateralized mortgage obligations-commercial | 10,003 | 66 | 0.88 | 10,320 | 110 | 1.42 | |||||||||||
| Other | 685 | 12 | 2.34 | 683 | 12 | 2.34 | |||||||||||
| Total securities available for sale | 626,101 | 9,150 | 1.95 | 625,492 | 8,831 | 1.88 | |||||||||||
| Federal funds sold and other | |||||||||||||||||
| short-term Investments | 635,450 | 4,900 | 1.03 | 675,948 | 2,542 | 0.50 | |||||||||||
| Held to maturity securities: | |||||||||||||||||
| Corporate bonds | 8,897 | 410 | 6.14 | 10,202 | 464 | 6.06 | |||||||||||
| Mortgage backed securities and | |||||||||||||||||
| collateralized mortgage obligations-residential | 32,202 | 888 | 3.68 | 42,192 | 1,123 | 3.55 | |||||||||||
| Total held to maturity securities | 41,099 | 1,298 | 4.21 | 52,394 | 1,587 | 4.04 | |||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 9,467 | 393 | 5.54 | 9,545 | 369 | 5.15 | |||||||||||
| Commercial loans | 184,932 | 7,313 | 5.27 | 198,461 | 7,777 | 5.22 | |||||||||||
| Residential mortgage loans | 2,969,363 | 92,910 | 4.17 | 2,768,579 | 89,523 | 4.31 | |||||||||||
| Home equity lines of credit | 321,276 | 9,453 | 3.92 | 353,461 | 9,569 | 3.61 | |||||||||||
| Installment loans | 8,117 | 563 | 9.25 | 8,435 | 579 | 9.15 | |||||||||||
| Loans, net of unearned income | 3,483,688 | 110,239 | 4.22 | 3,328,936 | 107,448 | 4.30 | |||||||||||
| Total interest earning assets | 4,795,805 | 125,980 | 3.50 | 4,692,315 | 120,777 | 3.43 | |||||||||||
| Allowance for loan losses | (44,317 | ) | (44,832 | ) | |||||||||||||
| Cash & non-interest earning assets | 129,384 | 136,584 | |||||||||||||||
| Total assets | $ | 4,880,872 | $ | 4,784,067 | |||||||||||||
| Liabilities and shareholders’ equity | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Interest bearing checking accounts | $ | 840,322 | 371 | 0.06 | % | $ | 758,314 | 350 | 0.06 | % | |||||||
| Money market accounts | 576,518 | 1,403 | 0.32 | 585,019 | 1,426 | 0.33 | |||||||||||
| Savings | 1,280,473 | 1,300 | 0.14 | 1,273,565 | 1,712 | 0.18 | |||||||||||
| Time deposits | 1,104,731 | 6,711 | 0.81 | 1,162,603 | 7,301 | 0.84 | |||||||||||
| Total interest bearing deposits | 3,802,044 | 9,785 | 0.34 | 3,779,501 | 10,789 | 0.38 | |||||||||||
| Short-term borrowings | 226,447 | 1,043 | 0.61 | 182,453 | 800 | 0.58 | |||||||||||
| Total interest bearing liabilities | 4,028,491 | 10,828 | 0.36 | 3,961,954 | 11,589 | 0.39 | |||||||||||
| Demand deposits | 380,216 | 368,852 | |||||||||||||||
| Other liabilities | 27,880 | 27,179 | |||||||||||||||
| Shareholders’ equity | 444,285 | 426,082 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,880,872 | $ | 4,784,067 | |||||||||||||
| Net interest income, tax equivalent | 115,152 | 109,188 | |||||||||||||||
| Net interest spread | 3.14 | % | 3.04 | % | |||||||||||||
| Net interest margin (net interest income | |||||||||||||||||
| to total interest earning assets) | 3.20 | % | 3.10 | % | |||||||||||||
| Tax equivalent adjustment | (32 | ) | (40 | ) | |||||||||||||
| Net interest income | 115,120 | 109,148 | |||||||||||||||
Non-GAAP Financial Measures Reconciliation
Tangible equity as a percentage of tangible assets at period end is a non-GAAP financial measure derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. We calculate the efficiency ratio by dividing total noninterest expenses as determined under GAAP, but excluding other real estate expense, net, by net interest income (fully taxable equivalent) and total noninterest income as determined under GAAP, but excluding net gains on the sale of nonperforming loans and securities and other non-routine items from this calculation. We believe that this provides a reasonable measure of primary banking expenses relative to primary banking revenue.
We believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our financial results. Our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share, efficiency ratio, net income and net income per share to the underlying GAAP numbers is set forth below.
| NON-GAAP FINANCIAL MEASURES RECONCILIATION | |||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||
| (Unaudited) | |||||||||||||
| 09/30/17 | 06/30/17 | 09/30/16 | |||||||||||
| Tangible Equity to Tangible Assets | |||||||||||||
| Total Assets | 4,870,275 | 4,920,482 | 4,812,849 | ||||||||||
| Less: Intangible assets | 553 | 553 | 553 | ||||||||||
| Tangible assets | 4,869,722 | 4,919,929 | 4,812,296 | ||||||||||
| Equity | $ | 454,928 | 447,366 | 435,608 | |||||||||
| Less: Intangible assets | 553 | 553 | 553 | ||||||||||
| Tangible equity | 454,375 | 446,813 | 435,055 | ||||||||||
| Tangible Equity to Tangible Assets | 9.33 | % | 9.08 | % | 9.04 | % | |||||||
| Equity to Assets | 9.34 | % | 9.09 | % | 9.05 | % | |||||||
| 3 Months Ended | Nine Months Ended | ||||||||||||
| Efficiency Ratio | 09/30/17 | 06/30/17 | 09/30/16 | 09/30/17 | 09/30/16 | ||||||||
| Net interest income | $ | 39,179 | 38,541 | 36,667 | 115,120 | 109,148 | |||||||
| Taxable equivalent adjustment | 11 | 12 | 14 | 32 | 40 | ||||||||
| Net interest income (fully taxable equivalent) | 39,190 | 38,553 | 36,681 | 115,152 | 109,188 | ||||||||
| Non-interest income | 4,854 | 4,504 | 4,729 | 14,085 | 14,500 | ||||||||
| Less: Net gain on sale of building | – | – | 469 | – | 469 | ||||||||
| Less: Net gain on sale of nonperforming loans | – | 84 | – | 84 | 24 | ||||||||
| Less: Net gain on securities | – | – | – | – | 668 | ||||||||
| Revenue used for efficiency ratio | 44,044 | 42,973 | 40,941 | 129,153 | 122,527 | ||||||||
| Total noninterest expense | 23,526 | 22,913 | 23,049 | 70,458 | 70,462 | ||||||||
| Less: Other real estate (income) expense, net | 275 | (4 | ) | 895 | 770 | 1,837 | |||||||
| Expense used for efficiency ratio | 23,251 | 22,917 | 22,154 | 69,688 | 68,625 | ||||||||
| Efficiency Ratio | 52.79 | % | 53.33 | % | 54.11 | % | 53.96 | % | 56.01 | % | |||