(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Exhibit 99.1 | ||||||||
Exhibit 99.2 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
HERITAGE FINANCIAL CORPORATION | ||||||||
Date: | ||||||||
April 25, 2024 | /S/ JEFFREY J. DEUEL | |||||||
Jeffrey J. Deuel | ||||||||
President and Chief Executive Officer | ||||||||
(Duly Authorized Officer) |
As of or for the Quarter Ended | |||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||
Net income | $ | 5,748 | $ | 6,233 | $ | 20,457 | |||||||||||
Pre-tax, pre-provision income(1) | $ | 8,260 | $ | 8,001 | $ | 26,495 | |||||||||||
Diluted earnings per share | $ | 0.16 | $ | 0.18 | $ | 0.58 | |||||||||||
Return on average assets(2) | 0.33 | % | 0.35 | % | 1.17 | % | |||||||||||
Pre-tax, pre-provision return on average assets(1)(2) | 0.47 | % | 0.44 | % | 1.52 | % | |||||||||||
Return on average common equity(2) | 2.73 | % | 3.04 | % | 10.21 | % | |||||||||||
Return on average tangible common equity(1)(2) | 4.07 | % | 4.69 | % | 15.05 | % | |||||||||||
Net interest margin(2) | 3.32 | % | 3.41 | % | 3.91 | % | |||||||||||
Cost of total deposits(2) | 1.19 | % | 1.01 | % | 0.31 | % | |||||||||||
Efficiency ratio | 83.0 | % | 84.2 | % | 61.1 | % | |||||||||||
Noninterest expense to average total assets(2) | 2.29 | % | 2.37 | % | 2.39 | % | |||||||||||
Total assets | $ | 7,091,283 | $ | 7,174,957 | $ | 7,236,806 | |||||||||||
Loans receivable, net | $ | 4,378,429 | $ | 4,287,628 | $ | 4,083,003 | |||||||||||
Total deposits | $ | 5,532,327 | $ | 5,599,872 | $ | 5,789,022 | |||||||||||
Loan to deposit ratio(3) | 80.0 | % | 77.4 | % | 71.3 | % | |||||||||||
Book value per share | $ | 24.43 | $ | 24.44 | $ | 23.53 | |||||||||||
Tangible book value per share(1) | $ | 17.36 | $ | 17.40 | $ | 16.48 |
March 31, 2024 | December 31, 2023 | $ Change in Carrying Value | |||||||||||||||||||||||||||||||||||||||
Amortized Cost | Net Unrealized Gain (Loss) | Fair Value | Amortized Cost | Net Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | 16,001 | $ | (2,584) | $ | 13,417 | $ | 16,047 | $ | (2,297) | $ | 13,750 | $ | (333) | |||||||||||||||||||||||||||
Municipal securities | 83,788 | (11,833) | 71,955 | 92,231 | (12,706) | 79,525 | (7,570) | ||||||||||||||||||||||||||||||||||
Residential CMO and MBS(1) | 519,152 | (42,410) | 476,742 | 555,518 | (43,469) | 512,049 | (35,307) | ||||||||||||||||||||||||||||||||||
Commercial CMO and MBS(1) | 443,537 | (34,069) | 409,468 | 538,910 | (34,652) | 504,258 | (94,790) | ||||||||||||||||||||||||||||||||||
Corporate obligations | 11,658 | (467) | 11,191 | 7,745 | (132) | 7,613 | 3,578 | ||||||||||||||||||||||||||||||||||
Other asset-backed securities | 13,653 | 84 | 13,737 | 17,336 | (178) | 17,158 | (3,421) | ||||||||||||||||||||||||||||||||||
Total | $ | 1,087,789 | $ | (91,279) | $ | 996,510 | $ | 1,227,787 | $ | (93,434) | $ | 1,134,353 | $ | (137,843) | |||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | $ Change in Carrying Value | |||||||||||||||||||||||||||||||||||||||
Amortized Cost | Net Unrecognized Loss | Fair Value | Amortized Cost | Net Unrecognized Loss | Fair Value | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Investment securities held to maturity: | |||||||||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | 151,110 | $ | (29,980) | $ | 121,130 | $ | 151,075 | $ | (27,701) | $ | 123,374 | $ | 35 | |||||||||||||||||||||||||||
Residential CMO and MBS(1) | 262,359 | (17,439) | 244,920 | 267,204 | (14,101) | 253,103 | (4,845) | ||||||||||||||||||||||||||||||||||
Commercial CMO and MBS(1) | 320,537 | (37,586) | 282,951 | 321,163 | (35,190) | 285,973 | (626) | ||||||||||||||||||||||||||||||||||
Total | $ | 734,006 | $ | (85,005) | $ | 649,001 | $ | 739,442 | $ | (76,992) | $ | 662,450 | $ | (5,436) | |||||||||||||||||||||||||||
Total investment securities | $ | 1,821,795 | $ | (176,284) | $ | 1,645,511 | $ | 1,967,229 | $ | (170,426) | $ | 1,796,803 |
March 31, 2024 | December 31, 2023 | Change | |||||||||||||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 760,391 | 17.2 | % | $ | 718,291 | 16.6 | % | $ | 42,100 | 5.9 | % | |||||||||||||||||||||||
Owner-occupied commercial real estate ("CRE") | 951,583 | 21.5 | 958,620 | 22.1 | (7,037) | (0.7) | |||||||||||||||||||||||||||||
Non-owner occupied CRE | 1,702,665 | 38.4 | 1,697,574 | 39.1 | 5,091 | 0.3 | |||||||||||||||||||||||||||||
Total commercial business | 3,414,639 | 77.1 | 3,374,485 | 77.8 | 40,154 | 1.2 | |||||||||||||||||||||||||||||
Residential real estate | 386,357 | 8.7 | 375,342 | 8.7 | 11,015 | 2.9 | |||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||
Residential | 84,081 | 1.9 | 78,610 | 1.8 | 5,471 | 7.0 | |||||||||||||||||||||||||||||
Commercial and multifamily | 372,532 | 8.4 | 335,819 | 7.7 | 36,713 | 10.9 | |||||||||||||||||||||||||||||
Total real estate construction and land development | 456,613 | 10.3 | 414,429 | 9.5 | 42,184 | 10.2 | |||||||||||||||||||||||||||||
Consumer | 170,556 | 3.9 | 171,371 | 4.0 | (815) | (0.5) | |||||||||||||||||||||||||||||
Loans receivable | 4,428,165 | 100.0 | % | 4,335,627 | 100.0 | % | 92,538 | 2.1 | |||||||||||||||||||||||||||
Allowance for credit losses on loans | (49,736) | (47,999) | (1,737) | 3.6 | |||||||||||||||||||||||||||||||
Loans receivable, net | $ | 4,378,429 | $ | 4,287,628 | $ | 90,801 | 2.1 | % |
March 31, 2024 | December 31, 2023 | Change | |||||||||||||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Noninterest demand deposits | $ | 1,637,111 | 29.5 | % | $ | 1,715,847 | 30.7 | % | $ | (78,736) | (4.6) | % | |||||||||||||||||||||||
Interest bearing demand deposits | 1,552,584 | 28.1 | 1,608,745 | 28.7 | (56,161) | (3.5) |
March 31, 2024 | December 31, 2023 | Change | |||||||||||||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Money market accounts | 1,099,983 | 19.9 | 1,094,351 | 19.5 | 5,632 | 0.5 | |||||||||||||||||||||||||||||
Savings accounts | 462,974 | 8.4 | 487,956 | 8.7 | (24,982) | (5.1) | |||||||||||||||||||||||||||||
Total non-maturity deposits | 4,752,652 | 85.9 | 4,906,899 | 87.6 | (154,247) | (3.1) | |||||||||||||||||||||||||||||
Certificates of deposit | 779,675 | 14.1 | 692,973 | 12.4 | 86,702 | 12.5 | |||||||||||||||||||||||||||||
Total deposits | $ | 5,532,327 | 100.0 | % | $ | 5,599,872 | 100.0 | % | $ | (67,545) | (1.2) | % |
March 31, 2024 | December 31, 2023 | Change | |||||||||||||||
Stockholders' equity to total assets | 12.0 | % | 11.9 | % | 0.1 | % | |||||||||||
Tangible common equity to tangible assets (1) | 8.8 | 8.8 | — | ||||||||||||||
Common equity tier 1 capital ratio (2) | 12.6 | 12.9 | (0.3) | ||||||||||||||
Leverage ratio (2) | 10.0 | 10.0 | — | ||||||||||||||
Tier 1 capital ratio (2) | 13.0 | 13.3 | (0.3) | ||||||||||||||
Total capital ratio (2) | 13.9 | 14.1 | (0.2) |
As of or for the Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
ACL on Loans | ACL on Unfunded | Total | ACL on Loans | ACL on Unfunded | Total | ACL on Loans | ACL on Unfunded | Total | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 47,999 | $ | 1,288 | $ | 49,287 | $ | 46,947 | $ | 1,534 | $ | 48,481 | $ | 42,986 | $ | 1,744 | $ | 44,730 | |||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | 1,704 | (312) | 1,392 | 1,670 | (246) | 1,424 | 1,713 | 112 | 1,825 | ||||||||||||||||||||||||||||||||||||||||||||
Net recoveries (net charge-offs) | 33 | — | 33 | (618) | — | — | (618) | (230) | — | (230) | |||||||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | 49,736 | $ | 976 | $ | 50,712 | $ | 47,999 | $ | 1,288 | $ | 49,287 | $ | 44,469 | $ | 1,856 | $ | 46,325 |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||
Pass | $ | 4,255,750 | 96.1 | % | $ | 4,185,893 | 96.6 | % | |||||||||||||||
Special Mention | 102,232 | 2.3 | 79,977 | 1.8 | |||||||||||||||||||
Substandard | 70,183 | 1.6 | 69,757 | 1.6 | |||||||||||||||||||
Total | $ | 4,428,165 | 100.0 | % | $ | 4,335,627 | 100.0 | % |
Quarter Ended | |||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance, beginning of period | $ | 4,468 | $ | 3,065 | $ | 5,906 | |||||||||||
Additions | 593 | 2,149 | 468 | ||||||||||||||
Net principal payments and transfers to accruing status | (269) | (333) | (909) | ||||||||||||||
Payoffs | — | (413) | (650) | ||||||||||||||
Balance, end of period | $ | 4,792 | $ | 4,468 | $ | 4,815 |
Quarter Ended | |||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in thousands) | |||||||||||
FRB borrowing availability | $ | 71,300 | $ | 319,492 | |||||||
FHLB borrowing availability(1) | 1,384,631 | 1,417,518 | |||||||||
Unencumbered investment securities available for sale(2) | 708,378 | 756,258 | |||||||||
Cash and cash equivalents | 189,647 | 224,973 | |||||||||
Fed funds line borrowing availability with correspondent banks | 145,000 | 145,000 | |||||||||
Total available liquidity | $ | 2,498,956 | $ | 2,863,241 |
Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Average Balance | Interest Earned/ Paid | Average Yield/ Rate (1) | Average Balance | Interest Earned/ Paid | Average Yield/ Rate (1) | Average Balance | Interest Earned/ Paid | Average Yield/ Rate (1) | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans receivable, net (2)(3) | $ | 4,303,394 | $ | 57,862 | 5.41 | % | $ | 4,233,743 | $ | 57,092 | 5.35 | % | $ | 4,039,395 | $ | 50,450 | 5.07 | % | |||||||||||||||||||||||||||||||||||
Taxable securities | 1,810,709 | 14,834 | 3.29 | 1,824,205 | 14,488 | 3.15 | 2,007,339 | 14,657 | 2.96 | ||||||||||||||||||||||||||||||||||||||||||||
Nontaxable securities (3) | 21,302 | 181 | 3.42 | 37,382 | 300 | 3.18 | 82,893 | 586 | 2.87 | ||||||||||||||||||||||||||||||||||||||||||||
Interest earning deposits | 108,733 | 1,476 | 5.46 | 174,475 | 2,382 | 5.42 | 83,376 | 972 | 4.73 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest earning assets | 6,244,138 | 74,353 | 4.79 | % | 6,269,805 | 74,262 | 4.70 | % | 6,213,003 | 66,665 | 4.35 | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest earning assets | 848,314 | 871,071 | 848,956 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 7,092,452 | $ | 7,140,876 | $ | 7,061,959 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Certificates of deposit | $ | 733,816 | $ | 7,671 | 4.20 | % | $ | 638,101 | $ | 6,261 | 3.89 | % | $ | 350,206 | $ | 1,224 | 1.42 | % | |||||||||||||||||||||||||||||||||||
Savings accounts | 475,075 | 230 | 0.19 | 497,484 | 231 | 0.18 | 601,166 | 142 | 0.10 | ||||||||||||||||||||||||||||||||||||||||||||
Interest bearing demand and money market accounts | 2,659,999 | 8,487 | 1.28 | 2,713,482 | 7,846 | 1.15 | 2,829,198 | 3,162 | 0.45 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 3,868,890 | 16,388 | 1.70 | 3,849,067 | 14,338 | 1.48 | 3,780,570 | 4,528 | 0.49 | ||||||||||||||||||||||||||||||||||||||||||||
Junior subordinated debentures | 21,800 | 547 | 10.09 | 21,729 | 553 | 10.10 | 21,501 | 482 | 9.09 | ||||||||||||||||||||||||||||||||||||||||||||
Securities sold under agreement to repurchase | — | — | — | 17,511 | 5 | 0.11 | 43,202 | 47 | 0.44 | ||||||||||||||||||||||||||||||||||||||||||||
Borrowings | 500,660 | 5,888 | 4.73 | 459,784 | 5,495 | 4.74 | 145,605 | 1,766 | 4.92 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 4,391,350 | 22,823 | 2.09 | % | 4,348,091 | 20,391 | 1.86 | % | 3,990,878 | 6,823 | 0.69 | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest demand deposits | 1,657,132 | 1,772,261 | 2,068,688 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other noninterest bearing liabilities | 197,023 | 207,141 | 189,893 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 846,947 | 813,383 | 812,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 7,092,452 | $ | 7,140,876 | $ | 7,061,959 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income and spread | $ | 51,530 | 2.70 | % | $ | 53,871 | 2.84 | % | $ | 59,842 | 3.66 | % | |||||||||||||||||||||||||||||||||||||||||
Net interest margin | 3.32 | % | 3.41 | % | 3.91 | % |
Quarter Ended | Quarter Over Quarter Change | Prior Year Quarter Change | |||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Service charges and other fees | $ | 2,788 | $ | 2,804 | $ | 2,624 | $ | (16) | (0.6) | % | $ | 164 | 6.3 | % | |||||||||||||||||||||||||||
Card revenue | 1,839 | 1,944 | 2,000 | (105) | (5.4) | (161) | (8.1) | ||||||||||||||||||||||||||||||||||
Loss on sale of investment securities | (9,973) | (10,005) | (286) | 32 | (0.3) | (9,687) | 3387.1 | ||||||||||||||||||||||||||||||||||
Gain on sale of loans, net | 26 | 36 | 49 | (10) | (27.8) | (23) | (46.9) | ||||||||||||||||||||||||||||||||||
Interest rate swap fees | — | — | 53 | — | — | (53) | (100.0) | ||||||||||||||||||||||||||||||||||
Bank owned life insurance income | 920 | 654 | 709 | 266 | 40.7 | 211 | 29.8 | ||||||||||||||||||||||||||||||||||
Gain on sale of other assets, net | — | — | 2 | — | — | (2) | (100.0) | ||||||||||||||||||||||||||||||||||
Other income | 1,500 | 1,420 | 3,107 | 80 | 5.6 | (1,607) | (51.7) | ||||||||||||||||||||||||||||||||||
Total noninterest income (loss) | $ | (2,900) | $ | (3,147) | $ | 8,258 | $ | 247 | (7.8) | % | $ | (11,158) | (135.1) | % |
Quarter Ended | Quarter Over Quarter Change | Prior Year Quarter Change | |||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Compensation and employee benefits | $ | 25,476 | $ | 24,758 | $ | 25,536 | $ | 718 | 2.9 | % | $ | (60) | (0.2) | % | |||||||||||||||||||||||||||
Occupancy and equipment | 4,932 | 4,784 | 4,892 | 148 | 3.1 | 40 | 0.8 | ||||||||||||||||||||||||||||||||||
Data processing | 3,537 | 4,863 | 4,342 | (1,326) | (27.3) | (805) | (18.5) | ||||||||||||||||||||||||||||||||||
Marketing | 211 | 698 | 402 | (487) | (69.8) | (191) | (47.5) | ||||||||||||||||||||||||||||||||||
Professional services | 567 | 2,266 | 628 | (1,699) | (75.0) | (61) | (9.7) | ||||||||||||||||||||||||||||||||||
State/municipal business and use taxes | 1,300 | 909 | 1,008 | 391 | 43.0 | 292 | 29.0 | ||||||||||||||||||||||||||||||||||
Federal deposit insurance premium | 795 | 847 | 850 | (52) | (6.1) | (55) | (6.5) | ||||||||||||||||||||||||||||||||||
Quarter Ended | Quarter Over Quarter Change | Prior Year Quarter Change | |||||||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 421 | 593 | 623 | (172) | (29.0) | (202) | (32.4) | ||||||||||||||||||||||||||||||||||
Other expense | 3,131 | 3,005 | 3,324 | 126 | 4.2 | (193) | (5.8) | ||||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 40,370 | $ | 42,723 | $ | 41,605 | $ | (2,353) | (5.5) | % | $ | (1,235) | (3.0) | % |
Quarter Ended | Change | ||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | Quarter Over Quarter | Prior Year Quarter | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Income before income taxes | $ | 6,868 | $ | 6,577 | $ | 24,670 | $ | 291 | $ | (17,802) | |||||||||||||||||||
Income tax expense | $ | 1,120 | $ | 344 | $ | 4,213 | $ | 776 | $ | (3,093) | |||||||||||||||||||
Effective income tax rate | 16.3 | % | 5.2 | % | 17.1 | % | 11.1 | % | (0.8) | % |
March 31, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Cash on hand and in banks | $ | 52,947 | $ | 55,851 | |||||||
Interest earning deposits | 136,700 | 169,122 | |||||||||
Cash and cash equivalents | 189,647 | 224,973 | |||||||||
Investment securities available for sale, at fair value (amortized cost of $1,087,789 and $1,227,787, respectively) | 996,510 | 1,134,353 | |||||||||
Investment securities held to maturity, at amortized cost (fair value of $649,001 and $662,450, respectively) | 734,006 | 739,442 | |||||||||
Total investment securities | 1,730,516 | 1,873,795 | |||||||||
Loans receivable | 4,428,165 | 4,335,627 | |||||||||
Allowance for credit losses on loans | (49,736) | (47,999) | |||||||||
Loans receivable, net | 4,378,429 | 4,287,628 | |||||||||
Premises and equipment, net | 74,092 | 74,899 | |||||||||
Federal Home Loan Bank stock, at cost | 4,303 | 4,186 | |||||||||
Bank owned life insurance | 125,615 | 125,655 | |||||||||
Accrued interest receivable | 19,898 | 19,518 | |||||||||
Prepaid expenses and other assets | 323,472 | 318,571 | |||||||||
Other intangible assets, net | 4,372 | 4,793 | |||||||||
Goodwill | 240,939 | 240,939 | |||||||||
Total assets | $ | 7,091,283 | $ | 7,174,957 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Non-interest bearing deposits | 1,637,111 | 1,715,847 | |||||||||
Interest bearing deposits | 3,895,216 | 3,884,025 | |||||||||
Total deposits | 5,532,327 | 5,599,872 | |||||||||
Borrowings | 500,000 | 500,000 | |||||||||
Junior subordinated debentures | 21,838 | 21,765 | |||||||||
Accrued expenses and other liabilities | 189,538 | 200,059 | |||||||||
Total liabilities | 6,243,703 | 6,321,696 | |||||||||
Common stock | 544,636 | 549,748 | |||||||||
Retained earnings | 373,629 | 375,989 | |||||||||
Accumulated other comprehensive loss, net | (70,685) | (72,476) | |||||||||
Total stockholders' equity | 847,580 | 853,261 | |||||||||
Total liabilities and stockholders' equity | $ | 7,091,283 | $ | 7,174,957 | |||||||
Shares outstanding | 34,689,843 | 34,906,233 |
Quarter Ended | |||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
Interest Income | |||||||||||||||||
Interest and fees on loans | $ | 57,862 | $ | 57,092 | $ | 50,450 | |||||||||||
Taxable interest on investment securities | 14,834 | 14,488 | 14,657 | ||||||||||||||
Nontaxable interest on investment securities | 181 | 300 | 586 | ||||||||||||||
Interest on interest earning deposits | 1,476 | 2,382 | 972 | ||||||||||||||
Total interest income | 74,353 | 74,262 | 66,665 | ||||||||||||||
Interest Expense | |||||||||||||||||
Deposits | 16,388 | 14,338 | 4,528 | ||||||||||||||
Junior subordinated debentures | 547 | 553 | 482 | ||||||||||||||
Securities sold under agreement to repurchase | — | 5 | 47 | ||||||||||||||
Borrowings | 5,888 | 5,495 | 1,766 | ||||||||||||||
Total interest expense | 22,823 | 20,391 | 6,823 | ||||||||||||||
Net interest income | 51,530 | 53,871 | 59,842 | ||||||||||||||
Provision for credit losses | 1,392 | 1,424 | 1,825 | ||||||||||||||
Net interest income after provision for credit losses | 50,138 | 52,447 | 58,017 | ||||||||||||||
Noninterest Income | |||||||||||||||||
Service charges and other fees | 2,788 | 2,804 | 2,624 | ||||||||||||||
Card revenue | 1,839 | 1,944 | 2,000 | ||||||||||||||
Loss on sale of investment securities, net | (9,973) | (10,005) | (286) | ||||||||||||||
Gain on sale of loans, net | 26 | 36 | 49 | ||||||||||||||
Interest rate swap fees | — | — | 53 | ||||||||||||||
Bank owned life insurance income | 920 | 654 | 709 | ||||||||||||||
Gain on sale of other assets, net | — | — | 2 | ||||||||||||||
Other income | 1,500 | 1,420 | 3,107 | ||||||||||||||
Total noninterest income (loss) | (2,900) | (3,147) | 8,258 | ||||||||||||||
Noninterest Expense | |||||||||||||||||
Compensation and employee benefits | 25,476 | 24,758 | 25,536 | ||||||||||||||
Occupancy and equipment | 4,932 | 4,784 | 4,892 | ||||||||||||||
Data processing | 3,537 | 4,863 | 4,342 | ||||||||||||||
Marketing | 211 | 698 | 402 | ||||||||||||||
Professional services | 567 | 2,266 | 628 | ||||||||||||||
State/municipal business and use taxes | 1,300 | 909 | 1,008 | ||||||||||||||
Federal deposit insurance premium | 795 | 847 | 850 | ||||||||||||||
Amortization of intangible assets | 421 | 593 | 623 | ||||||||||||||
Other expense | 3,131 | 3,005 | 3,324 | ||||||||||||||
Total noninterest expense | 40,370 | 42,723 | 41,605 | ||||||||||||||
Income before income taxes | 6,868 | 6,577 | 24,670 | ||||||||||||||
Income tax expense | 1,120 | 344 | 4,213 | ||||||||||||||
Net income | $ | 5,748 | $ | 6,233 | $ | 20,457 | |||||||||||
Basic earnings per share | $ | 0.17 | $ | 0.18 | $ | 0.58 | |||||||||||
Diluted earnings per share | $ | 0.16 | $ | 0.18 | $ | 0.58 | |||||||||||
Dividends declared per share | $ | 0.23 | $ | 0.22 | $ | 0.22 | |||||||||||
Average shares outstanding - basic | 34,825,471 | 34,902,029 | 35,108,390 | ||||||||||||||
Average shares outstanding - diluted | 35,227,138 | 35,084,635 | 35,445,340 |
Quarter Ended | |||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||
Allowance for Credit Losses on Loans: | |||||||||||||||||
Balance, beginning of period | $ | 47,999 | $ | 46,947 | $ | 42,986 | |||||||||||
Provision for credit losses on loans | 1,704 | 1,670 | 1,713 | ||||||||||||||
Charge-offs: | |||||||||||||||||
Commercial business | (77) | (543) | (161) | ||||||||||||||
Consumer | (123) | (166) | (153) | ||||||||||||||
Total charge-offs | (200) | (709) | (314) | ||||||||||||||
Recoveries: | |||||||||||||||||
Commercial business | 217 | 30 | 51 | ||||||||||||||
Consumer | 16 | 61 | 33 | ||||||||||||||
Total recoveries | 233 | 91 | 84 | ||||||||||||||
Net recoveries (charge-offs) | 33 | (618) | (230) | ||||||||||||||
Balance, end of period | $ | 49,736 | $ | 47,999 | $ | 44,469 | |||||||||||
Net charge-offs on loans to average loans receivable, net(1) | — | % | 0.06 | % | 0.02 | % |
March 31, 2024 | December 31, 2023 | ||||||||||
Nonperforming Assets: | |||||||||||
Nonaccrual loans: | |||||||||||
Commercial business | $ | 4,792 | $ | 4,468 | |||||||
Total nonaccrual loans | 4,792 | 4,468 | |||||||||
Accruing loans past due 90 days or more | 2,628 | 1,293 | |||||||||
Total nonperforming loans | 7,420 | 5,761 | |||||||||
Other real estate owned | — | — | |||||||||
Nonperforming assets | $ | 7,420 | $ | 5,761 | |||||||
ACL on loans to: | |||||||||||
Loans receivable | 1.12 | % | 1.11 | % | |||||||
Nonaccrual loans | 1,037.90 | % | 1,074.28 | % | |||||||
Nonaccrual loans to loans receivable | 0.11 | % | 0.10 | % | |||||||
Nonperforming loans to loans receivable | 0.17 | % | 0.13 | % | |||||||
Nonperforming assets to total assets | 0.10 | % | 0.08 | % |
Quarter Ended | |||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||
Earnings: | |||||||||||||||||||||||||||||
Net interest income | $ | 51,530 | $ | 53,871 | $ | 55,618 | $ | 55,824 | $ | 59,842 | |||||||||||||||||||
Provision for credit losses | 1,392 | 1,424 | (878) | 1,909 | 1,825 | ||||||||||||||||||||||||
Noninterest income (loss) | (2,900) | (3,147) | 6,271 | 7,281 | 8,258 | ||||||||||||||||||||||||
Noninterest expense | 40,370 | 42,723 | 40,970 | 41,325 | 41,605 | ||||||||||||||||||||||||
Net income | 5,748 | 6,233 | 18,219 | 16,846 | 20,457 | ||||||||||||||||||||||||
Pre-tax, pre-provision net income (3) | 8,260 | 8,001 | 20,919 | 21,780 | 26,495 | ||||||||||||||||||||||||
Basic earnings per share | $ | 0.17 | $ | 0.18 | $ | 0.52 | $ | 0.48 | $ | 0.58 | |||||||||||||||||||
Diluted earnings per share | $ | 0.16 | $ | 0.18 | $ | 0.51 | $ | 0.48 | $ | 0.58 | |||||||||||||||||||
Average Balances: | |||||||||||||||||||||||||||||
Loans receivable, net (1) | $ | 4,303,394 | $ | 4,233,743 | $ | 4,201,554 | $ | 4,145,556 | $ | 4,039,395 | |||||||||||||||||||
Total investment securities | 1,832,011 | 1,861,587 | 1,992,303 | 2,061,100 | 2,090,232 | ||||||||||||||||||||||||
Total interest earning assets | 6,244,138 | 6,269,805 | 6,363,043 | 6,297,410 | 6,213,003 | ||||||||||||||||||||||||
Total assets | 7,092,452 | 7,140,876 | 7,212,732 | 7,142,865 | 7,061,959 | ||||||||||||||||||||||||
Total interest bearing deposits | 3,868,890 | 3,849,067 | 3,841,148 | 3,755,005 | 3,780,570 | ||||||||||||||||||||||||
Total noninterest demand deposits | 1,657,132 | 1,772,261 | 1,859,374 | 1,900,640 | 2,068,688 | ||||||||||||||||||||||||
Stockholders' equity | 846,947 | 813,383 | 821,494 | 824,742 | 812,500 | ||||||||||||||||||||||||
Financial Ratios: | |||||||||||||||||||||||||||||
Return on average assets (2) | 0.33 | % | 0.35 | % | 1.00 | % | 0.95 | % | 1.17 | % | |||||||||||||||||||
Pre-tax, pre-provision return on average assets (2)(3) | 0.47 | 0.44 | 1.15 | 1.22 | 1.52 | ||||||||||||||||||||||||
Return on average common equity (2) | 2.73 | 3.04 | 8.80 | 8.19 | 10.21 | ||||||||||||||||||||||||
Return on average tangible common equity (2) (3) | 4.07 | 4.69 | 12.90 | 12.04 | 15.05 | ||||||||||||||||||||||||
Efficiency ratio | 83.0 | 84.2 | 66.2 | 65.5 | 61.1 | ||||||||||||||||||||||||
Noninterest expense to average total assets (2) | 2.29 | 2.37 | 2.25 | 2.32 | 2.39 | ||||||||||||||||||||||||
Net interest spread (2) | 2.70 | 2.84 | 2.95 | 3.11 | 3.66 | ||||||||||||||||||||||||
Net interest margin (2) | 3.32 | 3.41 | 3.47 | 3.56 | 3.91 |
As of or for the Quarter Ended | |||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||
Select Balance Sheet: | |||||||||||||||||||||||||||||
Total assets | $ | 7,091,283 | $ | 7,174,957 | $ | 7,150,588 | $ | 7,115,410 | $ | 7,236,806 | |||||||||||||||||||
Loans receivable, net | 4,378,429 | 4,287,628 | 4,219,911 | 4,204,936 | 4,083,003 | ||||||||||||||||||||||||
Total investment securities | 1,730,516 | 1,873,795 | 1,894,392 | 2,030,826 | 2,078,235 | ||||||||||||||||||||||||
Deposits | 5,532,327 | 5,599,872 | 5,635,187 | 5,595,543 | 5,789,022 | ||||||||||||||||||||||||
Noninterest demand deposits | 1,637,111 | 1,715,847 | 1,789,293 | 1,857,492 | 1,982,909 | ||||||||||||||||||||||||
Stockholders' equity | 847,580 | 853,261 | 813,546 | 819,733 | 826,082 | ||||||||||||||||||||||||
Financial Measures: | |||||||||||||||||||||||||||||
Book value per share | $ | 24.43 | $ | 24.44 | $ | 23.31 | $ | 23.39 | $ | 23.53 | |||||||||||||||||||
Tangible book value per share (1) | 17.36 | 17.40 | 16.25 | 16.34 | 16.48 | ||||||||||||||||||||||||
Stockholders' equity to total assets | 12.0 | % | 11.9 | % | 11.4 | % | 11.5 | % | 11.4 | % | |||||||||||||||||||
Tangible common equity to tangible assets (1) | 8.8 | 8.8 | 8.2 | 8.3 | 8.3 | ||||||||||||||||||||||||
Loans to deposits ratio | 80.0 | 77.4 | 75.7 | 76.0 | 71.3 | ||||||||||||||||||||||||
Regulatory Capital Ratios:(2) | |||||||||||||||||||||||||||||
Common equity tier 1 capital ratio | 12.6 | % | 12.9 | % | 12.9 | % | 12.8 | % | 12.9 | % | |||||||||||||||||||
Leverage ratio | 10.0 | 10.0 | 9.9 | 9.9 | 9.9 | ||||||||||||||||||||||||
Tier 1 capital ratio | 13.0 | 13.3 | 13.3 | 13.2 | 13.3 | ||||||||||||||||||||||||
Total capital ratio | 13.9 | 14.1 | 14.1 | 14.1 | 14.1 | ||||||||||||||||||||||||
Credit Quality Metrics: | |||||||||||||||||||||||||||||
ACL on loans to: | |||||||||||||||||||||||||||||
Loans receivable | 1.12 | % | 1.11 | % | 1.10 | % | 1.09 | % | 1.08 | % | |||||||||||||||||||
Nonperforming loans | 1,037.9 | 1,074.3 | 1,531.7 | 1,002.3 | 923.6 | ||||||||||||||||||||||||
Nonaccrual loans to loans receivable | 0.11 | 0.10 | 0.07 | 0.11 | 0.12 | ||||||||||||||||||||||||
Nonperforming loans to loans receivable | 0.17 | 0.13 | 0.12 | 0.16 | 0.17 | ||||||||||||||||||||||||
Nonperforming assets to total assets | 0.10 | 0.08 | 0.07 | 0.10 | 0.10 | ||||||||||||||||||||||||
Net charge-offs (recoveries) on loans to average loans receivable, net(3) | — | 0.06 | (0.11) | — | 0.02 | ||||||||||||||||||||||||
Criticized Loans by Credit Quality Rating: | |||||||||||||||||||||||||||||
Special mention | $ | 102,232 | $ | 79,977 | $ | 72,152 | $ | 84,623 | $ | 96,832 | |||||||||||||||||||
Substandard | 70,183 | 69,757 | 62,653 | 58,653 | 48,824 | ||||||||||||||||||||||||
Other Metrics: | |||||||||||||||||||||||||||||
Number of banking offices | 50 | 50 | 50 | 51 | 51 | ||||||||||||||||||||||||
Deposits per branch | $ | 110,647 | $ | 111,997 | $ | 112,704 | $ | 109,717 | $ | 113,510 | |||||||||||||||||||
Average number of full-time equivalent employees | 765 | 803 | 821 | 813 | 809 | ||||||||||||||||||||||||
Average assets per full-time equivalent employee | 9,271 | 8,893 | 8,785 | 8,786 | 8,729 |
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share: | |||||||||||||||||||||||||||||
Total stockholders' equity (GAAP) | $ | 847,580 | $ | 853,261 | $ | 813,546 | $ | 819,733 | $ | 826,082 | |||||||||||||||||||
Exclude intangible assets | (245,311) | (245,732) | (246,325) | (246,920) | (247,543) | ||||||||||||||||||||||||
Tangible common equity (non-GAAP) | $ | 602,269 | $ | 607,529 | $ | 567,221 | $ | 572,813 | $ | 578,539 | |||||||||||||||||||
Total assets (GAAP) | $ | 7,091,283 | $ | 7,174,957 | $ | 7,150,588 | $ | 7,115,410 | $ | 7,236,806 | |||||||||||||||||||
Exclude intangible assets | (245,311) | (245,732) | (246,325) | (246,920) | (247,543) | ||||||||||||||||||||||||
Tangible assets (non-GAAP) | $ | 6,845,972 | $ | 6,929,225 | $ | 6,904,263 | $ | 6,868,490 | $ | 6,989,263 | |||||||||||||||||||
Stockholders' equity to total assets (GAAP) | 12.0 | % | 11.9 | % | 11.4 | % | 11.5 | % | 11.4 | % | |||||||||||||||||||
Tangible common equity to tangible assets (non-GAAP) | 8.8 | % | 8.8 | % | 8.2 | % | 8.3 | % | 8.3 | % | |||||||||||||||||||
Shares outstanding | 34,689,843 | 34,906,233 | 34,901,076 | 35,047,800 | 35,108,120 | ||||||||||||||||||||||||
Book value per share (GAAP) | $ | 24.43 | $ | 24.44 | $ | 23.31 | $ | 23.39 | $ | 23.53 | |||||||||||||||||||
Tangible book value per share (non-GAAP) | $ | 17.36 | $ | 17.40 | $ | 16.25 | $ | 16.34 | $ | 16.48 |
Quarter Ended | |||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||
Return on Average Tangible Common Equity, annualized: | |||||||||||||||||||||||||||||
Net income (GAAP) | $ | 5,748 | $ | 6,233 | $ | 18,219 | $ | 16,846 | $ | 20,457 | |||||||||||||||||||
Add amortization of intangible assets | 421 | 593 | 595 | 623 | 623 | ||||||||||||||||||||||||
Exclude tax effect of adjustment | (88) | (125) | (125) | (131) | (131) | ||||||||||||||||||||||||
Tangible net income (non-GAAP) | $ | 6,081 | $ | 6,701 | $ | 18,689 | $ | 17,338 | $ | 20,949 | |||||||||||||||||||
Average stockholders' equity (GAAP) | $ | 846,947 | $ | 813,383 | $ | 821,494 | $ | 824,742 | $ | 812,500 | |||||||||||||||||||
Exclude average intangible assets | (245,536) | (246,022) | (246,663) | (247,278) | (247,922) | ||||||||||||||||||||||||
Average tangible common stockholders' equity (non-GAAP) | $ | 601,411 | $ | 567,361 | $ | 574,831 | $ | 577,464 | $ | 564,578 | |||||||||||||||||||
Return on average common equity, annualized (GAAP) | 2.73 | % | 3.04 | % | 8.80 | % | 8.19 | % | 10.21 | % | |||||||||||||||||||
Return on average tangible common equity, annualized (non-GAAP) | 4.07 | % | 4.69 | % | 12.90 | % | 12.04 | % | 15.05 | % |
Quarter Ended | |||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||||||||||||
Pre-tax, Pre-provision Income and Pre-tax, Pre-provision Return on Average Assets, annualized: | |||||||||||||||||||||||||||||
Net income (GAAP) | $ | 5,748 | $ | 6,233 | $ | 18,219 | $ | 16,846 | $ | 20,457 | |||||||||||||||||||
Add income tax expense | 1,120 | 344 | 3,578 | 3,025 | 4,213 | ||||||||||||||||||||||||
Add (subtract) provision for (reversal of) credit losses | 1,392 | 1,424 | (878) | 1,909 | 1,825 | ||||||||||||||||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 8,260 | $ | 8,001 | $ | 20,919 | $ | 21,780 | $ | 26,495 | |||||||||||||||||||
Average total assets (GAAP) | $ | 7,092,452 | $ | 7,140,876 | $ | 7,212,732 | $ | 7,142,865 | $ | 7,061,959 | |||||||||||||||||||
Return on average assets, annualized (GAAP) | 0.33 | % | 0.35 | % | 1.00 | % | 0.95 | % | 1.17 | % | |||||||||||||||||||
Pre-tax, pre-provision return on average assets (non-GAAP) | 0.47 | % | 0.44 | % | 1.15 | % | 1.22 | % | 1.52 | % |
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