Washington | 001-35424 | 91-0186600 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
[ ] | 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)) |
[ ] | Emerging growth Company |
[ ] | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 12(a) of the Exchange Act. |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
Exhibit 99.1 | |
Exhibit 99.2 |
HomeStreet, Inc. | |||
By: | /s/ Mark R. Ruh | ||
Mark R. Ruh | |||
Executive Vice President and Chief Financial Officer | |||
• | Record net income of $42.1 million in our Commercial and Consumer Banking segment |
• | Tax Cuts and Jobs Act legislation enacted in December 2017 resulted in the recognition of a one-time, non-cash tax benefit of $23.3 million for 2017; 2018 estimated consolidated effective tax rate between 21% and 22% |
• | Loans held for investment grew to $4.53 billion, an increase of $680.2 million, or 18%, from $3.85 billion at year-end 2016 |
• | Four new retail deposit branches - three de novo branches and one acquired |
• | Annualized return on average shareholders' equity was 10.20% for the year ended December 31, 2017 compared with 10.27% for the year ended December 31, 2016 |
▪ | Annualized return on average shareholders' equity was 19.90% for the fourth quarter of 2017 compared with 8.10% for the third quarter of 2017 and 1.49% for the fourth quarter of 2016 |
▪ | Annualized return on average shareholders' equity(1) excluding the Tax Cuts and Jobs Act legislation ("Tax Reform Act")-related benefit, restructuring-related and acquisition-related expenses, net of tax, was 7.17% for the year ended December 31, 2017 compared with 11.09% for the year ended December 31, 2016 |
▪ | Annualized return on average shareholders' equity(1) excluding Tax Reform Act-related benefit, restructuring-related and acquisition-related expenses, net of tax, was 6.54% for the fourth quarter of 2017 compared with 9.71% in the third quarter of 2017 and 1.67% for the fourth quarter of 2016 |
▪ | Average interest-earning assets of $6.27 billion for the fourth quarter of 2017 increased $171.5 million, or 3%, from $6.10 billion for the third quarter of 2017 and increased $558.4 million, or 10%, from $5.71 billion for the fourth quarter of 2016. |
▪ | Net interest income was $194.4 million for the year ended December 31, 2017 compared with $180.0 million for the year ended December 31, 2016 |
▪ | Net interest income was $51.1 million for the fourth quarter of 2017 compared with $50.8 million for the third quarter of 2017 and $48.1 million for the fourth quarter of 2016 |
▪ | Noninterest income was $312.2 million for the year ended December 31, 2017 compared with $359.2 million for the year ended December 31, 2016 |
▪ | Noninterest income was $72.8 million for the fourth quarter of 2017 compared with $83.9 million for the third quarter of 2017 and $73.2 million for the fourth quarter of 2016 |
◦ | Commercial and Consumer Banking |
• | Segment net income of $42.1 million for the year ended December 31, 2017 compared with $30.8 million for the year ended December 31, 2016 |
• | Segment core net income(1) of $46.6 million for the year ended December 31, 2017 compared with $35.4 million for the year ended December 31, 2016 |
▪ | Segment net income of $9.4 million for the current quarter compared with $14.0 million for the third quarter of 2017 and $12.0 million for the fourth quarter of 2016 |
▪ | Segment core net income(1) of $13.6 million for the current quarter compared with $14.2 million for the third quarter of 2017 and $12.3 million for the fourth quarter of 2016 |
▪ | Net interest income of $174.5 million for the year ended December 31, 2017 compared with $154.0 million for the year ended December 31, 2016 |
▪ | Net interest income of $45.9 million for the current quarter compared with $45.3 million for the third quarter of 2017 and $40.6 million for the fourth quarter of 2016 |
▪ | Noninterest income of $42.4 million for the year ended December 31, 2017 compared with $35.7 million for the year ended December 31, 2016 |
▪ | Noninterest income of $12.7 million for the current quarter compared with $12.0 million for the third quarter of 2017 and $13.1 million for the fourth quarter of 2016 |
▪ | Deposits of $4.76 billion at December 31, 2017 increased $90.5 million, or 2%, from September 30, 2017 and increased $331.3 million, or 7% from December 31, 2016 |
▪ | Nonperforming assets were $15.7 million, or 0.23% of total assets at December 31, 2017, compared to $18.8 million, or 0.28% of total assets at September 30, 2017 and $25.8 million, or 0.41% of total assets at December 31, 2016 |
▪ | Past due loans excluding those with U.S. government credit support were $16.2 million, or 0.37% of total such loans at December 31, 2017, compared to $18.4 million, or 0.44% of total such loans at September 30, 2017 and $21.6 million, or 0.58% of total such loans at December 31, 2016. |
◦ | Mortgage Banking |
▪ | Segment net income was $26.9 million for the year ended December 31, 2017 compared with net income of $27.4 million for the year ended December 31, 2016 |
▪ | Segment core net income(1) was $1.8 million for the year ended December 31, 2017 compared with core net income(1) of $27.4 million for the year ended December 31, 2016. |
▪ | Segment net income was $25.6 million for the current quarter compared with net loss of $123 thousand for the third quarter of 2017 and net loss of $9.8 million for the fourth quarter of 2016 |
▪ | Segment core net loss(1) was $2.1 million for the current quarter compared with core net income of $2.4 million for the third quarter of 2017 and core net loss of $9.8 million for the fourth quarter of 2016 |
▪ | Noninterest income of $269.8 million for the year ended December 31, 2017 compared with $323.5 million for the year ended December 31, 2016 |
▪ | Noninterest income of $60.1 million for the current quarter compared with $71.9 million for the third quarter of 2017 and $60.1 million for the fourth quarter of 2016 |
▪ | Single family mortgage interest rate lock commitments were $1.53 billion for the fourth quarter of 2017, down 18% from $1.87 billion for the third quarter of 2017 and down 13% from $1.77 billion for the fourth quarter of 2016. |
▪ | Single family mortgage closed loan volume was $1.89 billion for the fourth quarter of 2017, down 7% from $2.03 billion for the third quarter of 2017 and down 25% from $2.51 billion for the fourth quarter of 2016 |
▪ | The composite margin decreased to 329 basis points for the fourth quarter of 2017 from 342 basis points for the third quarter of 2017 and 334 basis points for the fourth quarter of 2016 |
▪ | The portfolio of single family loans serviced for others increased to $22.63 billion at December 31, 2017, up 3% from $21.89 billion at September 30, 2017 and up 16% from $19.49 billion at December 31, 2016 |
Contact: | Investor Relations: | |
HomeStreet, Inc. | ||
Gerhard Erdelji (206) 515-4039 | ||
Gerhard.Erdelji@HomeStreet.com | ||
http://ir.homestreet.com |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(dollars in thousands, except share data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Income statement data (for the period ended): | ||||||||||||||||||||||||||||
Net interest income | $ | 51,079 | $ | 50,840 | $ | 46,868 | $ | 45,651 | $ | 48,074 | $ | 194,438 | $ | 180,049 | ||||||||||||||
Provision for credit losses | — | 250 | 500 | — | 350 | 750 | 4,100 | |||||||||||||||||||||
Noninterest income | 72,801 | 83,884 | 81,008 | 74,461 | 73,221 | 312,154 | 359,150 | |||||||||||||||||||||
Noninterest expense | 106,838 | 114,697 | 111,244 | 106,874 | 117,539 | 439,653 | 444,322 | |||||||||||||||||||||
Restructuring-related expenses (included in noninterest expense) | (260 | ) | 3,877 | 103 | — | — | 3,720 | — | ||||||||||||||||||||
Acquisition-related expenses (included in noninterest expense) | 72 | 353 | 177 | — | 401 | 602 | 7,136 | |||||||||||||||||||||
Income before income taxes | 17,042 | 19,777 | 16,132 | 13,238 | 3,406 | 66,189 | 90,777 | |||||||||||||||||||||
Income tax (benefit) expense | (17,873 | ) | 5,938 | 4,923 | 4,255 | 1,112 | (2,757 | ) | 32,626 | |||||||||||||||||||
Net income | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | $ | 2,294 | $ | 68,946 | $ | 58,151 | ||||||||||||||
Basic income per common share | $ | 1.30 | $ | 0.51 | $ | 0.42 | $ | 0.33 | $ | 0.09 | $ | 2.57 | $ | 2.36 | ||||||||||||||
Diluted income per common share | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | $ | 0.09 | $ | 2.54 | $ | 2.34 | ||||||||||||||
Common shares outstanding | 26,888,288 | 26,884,402 | 26,874,871 | 26,862,744 | 26,800,183 | 26,888,288 | 26,800,183 | |||||||||||||||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||||||||||
Basic | 26,887,611 | 26,883,392 | 26,866,230 | 26,821,396 | 25,267,909 | 26,864,657 | 24,615,990 | |||||||||||||||||||||
Diluted | 27,136,977 | 27,089,040 | 27,084,608 | 27,057,449 | 25,588,691 | 27,092,019 | 24,843,683 | |||||||||||||||||||||
Shareholders' equity per share | $ | 26.20 | $ | 24.98 | $ | 24.40 | $ | 23.86 | $ | 23.48 | $ | 26.20 | $ | 23.48 | ||||||||||||||
Tangible book value per share (1) | $ | 25.09 | $ | 23.86 | $ | 23.30 | $ | 22.73 | $ | 22.33 | $ | 25.09 | $ | 22.33 | ||||||||||||||
Financial position (at period end): | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 72,718 | $ | 55,050 | $ | 54,447 | $ | 61,492 | $ | 53,932 | $ | 72,718 | $ | 53,932 | ||||||||||||||
Investment securities | 904,304 | 919,459 | 936,522 | 1,185,654 | 1,043,851 | 904,304 | 1,043,851 | |||||||||||||||||||||
Loans held for sale | 610,902 | 851,126 | 784,556 | 537,959 | 714,559 | 610,902 | 714,559 | |||||||||||||||||||||
Loans held for investment, net | 4,506,466 | 4,313,225 | 4,156,424 | 3,957,959 | 3,819,027 | 4,506,466 | 3,819,027 | |||||||||||||||||||||
Loan servicing rights | 284,653 | 268,072 | 258,222 | 257,421 | 245,860 | 284,653 | 245,860 | |||||||||||||||||||||
Other real estate owned | 664 | 3,704 | 4,597 | 5,646 | 5,243 | 664 | 5,243 | |||||||||||||||||||||
Total assets | 6,742,041 | 6,796,346 | 6,586,557 | 6,401,143 | 6,243,700 | 6,742,041 | 6,243,700 | |||||||||||||||||||||
Deposits | 4,760,952 | 4,670,486 | 4,747,771 | 4,595,809 | 4,429,701 | 4,760,952 | 4,429,701 | |||||||||||||||||||||
Federal Home Loan Bank advances | 979,201 | 1,135,245 | 867,290 | 862,335 | 868,379 | 979,201 | 868,379 | |||||||||||||||||||||
Shareholders’ equity | $ | 704,380 | $ | 671,469 | $ | 655,841 | $ | 640,919 | $ | 629,284 | $ | 704,380 | $ | 629,284 | ||||||||||||||
Financial position (averages): | ||||||||||||||||||||||||||||
Investment securities | $ | 929,995 | $ | 925,545 | $ | 1,089,552 | $ | 1,153,248 | $ | 962,504 | $ | 1,023,702 | $ | 834,671 | ||||||||||||||
Loans held for investment | 4,429,777 | 4,242,795 | 4,119,825 | 3,914,537 | 3,823,253 | 4,178,326 | 3,668,263 | |||||||||||||||||||||
Total interest-earning assets | 6,269,600 | 6,098,054 | 5,837,917 | 5,782,061 | 5,711,154 | 5,998,521 | 5,307,118 | |||||||||||||||||||||
Total interest-bearing deposits | 3,581,911 | 3,622,606 | 3,652,036 | 3,496,190 | 3,413,311 | 3,588,515 | 3,145,137 | |||||||||||||||||||||
Federal Home Loan Bank advances | 1,264,893 | 1,034,634 | 872,019 | 975,914 | 938,342 | 1,037,650 | 942,593 | |||||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 8,828 | 272 | 4,804 | 978 | 951 | 3,732 | 803 | |||||||||||||||||||||
Total interest-bearing liabilities | 4,980,926 | 4,783,142 | 4,654,064 | 4,598,243 | 4,477,732 | 4,755,221 | 4,189,582 | |||||||||||||||||||||
Shareholders’ equity | $ | 701,849 | $ | 683,186 | $ | 668,377 | $ | 649,439 | $ | 616,497 | $ | 675,877 | $ | 566,148 | ||||||||||||||
Other data: | ||||||||||||||||||||||||||||
Full-time equivalent employees (ending) | 2,419 | 2,463 | 2,542 | 2,581 | 2,552 | 2,419 | 2,552 |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(dollars in thousands, except share data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Financial performance: | ||||||||||||||||||||||||||||
Return on average shareholders’ equity(2) | 19.90 | % | 8.10 | % | 6.71 | % | 5.53 | % | 1.49 | % | 10.20 | % | 10.27 | % | ||||||||||||||
Return on average shareholders’ equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax)(1)(2) | 6.54 | % | 9.71 | % | 6.82 | % | 5.53 | % | 1.67 | % | 7.17 | % | 11.09 | % | ||||||||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax) (1) | 6.83 | % | 10.15 | % | 7.14 | % | 5.81 | % | 1.74 | % | 7.50 | % | 11.68 | % | ||||||||||||||
Return on average assets | 2.03 | % | 0.83 | % | 0.70 | % | 0.57 | % | 0.15 | % | 1.05 | % | 1.01 | % | ||||||||||||||
Return on average assets, excluding income tax reform-related benefit, restructuring-related and acquisition-related expenses (net of tax)(1) | 0.67 | % | 0.99 | % | 0.71 | % | 0.57 | % | 0.16 | % | 0.73 | % | 1.09 | % | ||||||||||||||
Net interest margin (3) | 3.33 | % | 3.40 | % | 3.29 | % | 3.23 | % | 3.42 | % | 3.31 | % | 3.45 | % | ||||||||||||||
Efficiency ratio (4) | 86.24 | % | 85.13 | % | 86.99 | % | 88.98 | % | 96.90 | % | 86.79 | % | 82.40 | % | ||||||||||||||
Core efficiency ratio (1)(5) | 86.39 | % | 82.00 | % | 86.77 | % | 88.98 | % | 96.57 | % | 85.93 | % | 81.08 | % | ||||||||||||||
Asset quality: | ||||||||||||||||||||||||||||
Allowance for credit losses | $ | 39,116 | $ | 38,195 | $ | 37,470 | $ | 36,042 | $ | 35,264 | $ | 39,116 | $ | 35,264 | ||||||||||||||
Allowance for loan losses/total loans(6) | 0.83 | % | 0.85 | % | 0.86 | % | 0.87 | % | 0.88 | % | 0.83 | % | 0.88 | % | ||||||||||||||
Allowance for loan losses/nonaccrual loans | 251.63 | % | 245.02 | % | 233.50 | % | 185.99 | % | 165.52 | % | 251.63 | % | 165.52 | % | ||||||||||||||
Total nonaccrual loans(7)(8) | $ | 15,041 | $ | 15,123 | $ | 15,476 | $ | 18,676 | $ | 20,542 | $ | 15,041 | $ | 20,542 | ||||||||||||||
Nonaccrual loans/total loans | 0.33 | % | 0.35 | % | 0.37 | % | 0.47 | % | 0.53 | % | 0.33 | % | 0.53 | % | ||||||||||||||
Other real estate owned | $ | 664 | $ | 3,704 | $ | 4,597 | $ | 5,646 | $ | 5,243 | $ | 664 | $ | 5,243 | ||||||||||||||
Total nonperforming assets(8) | $ | 15,705 | $ | 18,827 | $ | 20,073 | $ | 24,322 | $ | 25,785 | $ | 15,705 | $ | 25,785 | ||||||||||||||
Nonperforming assets/total assets | 0.23 | % | 0.28 | % | 0.30 | % | 0.38 | % | 0.41 | % | 0.23 | % | 0.41 | % | ||||||||||||||
Net (recoveries) charge offs | $ | (921 | ) | $ | (475 | ) | $ | (928 | ) | $ | (778 | ) | $ | 319 | $ | (3,102 | ) | $ | (505 | ) |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(dollars in thousands, except share data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | December 31, 2017 | December 31, 2016 | |||||||||||||||||||||
Regulatory capital ratios for the Bank: | ||||||||||||||||||||||||||||
Tier 1 leverage capital (to average assets) | 9.67 | % | (9) | 9.86 | % | 10.13 | % | 9.98 | % | 10.26 | % | 9.67 | % | (9) | 10.26 | % | ||||||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 13.27 | % | (9) | 12.88 | % | 13.23 | % | 13.25 | % | 13.92 | % | 13.27 | % | (9) | 13.92 | % | ||||||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 13.27 | % | (9) | 12.88 | % | 13.23 | % | 13.25 | % | 13.92 | % | 13.27 | % | (9) | 13.92 | % | ||||||||||||
Total risk-based capital (to risk-weighted assets) | 14.07 | % | (9) | 13.65 | % | 14.01 | % | 14.02 | % | 14.69 | % | 14.07 | % | (9) | 14.69 | % | ||||||||||||
Risk-weighted assets | $ | 4,895,426 | $ | 5,014,437 | $ | 4,814,330 | $ | 4,680,840 | $ | 4,569,227 | $ | 4,895,426 | $ | 4,569,227 | ||||||||||||||
Regulatory capital ratios for the Company: | ||||||||||||||||||||||||||||
Tier 1 leverage capital (to average assets) | 9.12 | % | (9) | 9.33 | % | 9.55 | % | 9.45 | % | 9.78 | % | 9.12 | % | (9) | 9.78 | % | ||||||||||||
Tier 1 common equity risk-based capital (to risk-weighted assets) | 9.90 | % | (9) | 9.77 | % | 10.01 | % | 9.96 | % | 10.54 | % | 9.90 | % | (9) | 10.54 | % | ||||||||||||
Tier 1 risk-based capital (to risk-weighted assets) | 10.96 | % | (9) | 10.81 | % | 11.10 | % | 11.07 | % | 11.66 | % | 10.96 | % | (9) | 11.66 | % | ||||||||||||
Total risk-based capital (to risk-weighted assets) | 11.66 | % | (9) | 11.48 | % | 11.79 | % | 11.74 | % | 12.34 | % | 11.66 | % | (9) | 12.34 | % | ||||||||||||
Risk-weighted assets | $ | 5,608,583 | $ | 5,678,249 | $ | 5,434,895 | $ | 5,331,674 | $ | 5,221,455 | $ | 5,608,583 | $ | 5,221,455 |
(1) | Tangible equity ratios, tangible book value per share of common stock, return on average shareholders' equity, return on average assets and core efficiency ratios are non-GAAP financial measures. For additional information on these ratios and for corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures in this earnings release. |
(2) | Net earnings available to common shareholders excluding acquisition-related expenses (net of tax) divided by average shareholders’ equity. |
(3) | Net interest income divided by total average interest-earning assets on a tax equivalent basis. |
(4) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(5) | Noninterest expense divided by total net revenue (net interest income and noninterest income), adjusted for acquisition-related items. |
(6) | Includes loans acquired with bank acquisitions. Excluding acquired loans, allowance for loan losses /total loans was 0.90%, 0.93%, 0.95%, 0.97% and 1.00% at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
(7) | Generally, loans are placed on nonaccrual status when they are 90 or more days past due, unless payment is insured by the FHA or guaranteed by the VA. |
(8) | Includes $1.9 million, $1.4 million, $732 thousand, $750 thousand and $1.9 million of nonperforming loans guaranteed by the SBA at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
(9) | Regulatory capital ratios at December 31, 2017 are preliminary. |
Three Months Ended December 31, | % | Year Ended December 31, | % | |||||||||||||||||||
(in thousands, except share data) | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||
Interest income: | ||||||||||||||||||||||
Loans | $ | 58,112 | $ | 50,919 | 14 | % | $ | 215,363 | $ | 190,667 | 13 | % | ||||||||||
Investment securities | 5,438 | 5,863 | (7 | ) | 21,753 | 18,394 | 18 | |||||||||||||||
Other | 136 | 80 | 70 | 567 | 476 | 19 | ||||||||||||||||
63,686 | 56,862 | 12 | 237,683 | 209,537 | 13 | |||||||||||||||||
Interest expense: | ||||||||||||||||||||||
Deposits | 6,402 | 5,629 | 14 | 23,912 | 19,009 | 26 | ||||||||||||||||
Federal Home Loan Bank advances | 4,415 | 1,544 | 186 | 12,589 | 6,030 | 109 | ||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | — | 2 | (100 | ) | 5 | 4 | 25 | |||||||||||||||
Long-term debt | 1,554 | 1,469 | 6 | 6,067 | 4,043 | 50 | ||||||||||||||||
Other | 236 | 144 | 64 | 672 | 402 | 67 | ||||||||||||||||
12,607 | 8,788 | 43 | 43,245 | 29,488 | 47 | |||||||||||||||||
Net interest income | 51,079 | 48,074 | 6 | 194,438 | 180,049 | 8 | ||||||||||||||||
Provision for credit losses | — | 350 | (100 | ) | 750 | 4,100 | (82 | ) | ||||||||||||||
Net interest income after provision for credit losses | 51,079 | 47,724 | 7 | 193,688 | 175,949 | 10 | ||||||||||||||||
Noninterest income: | ||||||||||||||||||||||
Net gain on loan origination and sale activities | 58,677 | 67,820 | (13 | ) | 255,876 | 307,313 | (17 | ) | ||||||||||||||
Loan servicing income (loss) | 9,099 | (271 | ) | (3,458 | ) | 35,384 | 33,059 | 7 | ||||||||||||||
(Loss) income from WMS Series LLC | (159 | ) | (141 | ) | 13 | 598 | 2,333 | (74 | ) | |||||||||||||
Depositor and other retail banking fees | 1,915 | 1,799 | 6 | 7,221 | 6,790 | 6 | ||||||||||||||||
Insurance agency commissions | 472 | 414 | 14 | 1,904 | 1,619 | 18 | ||||||||||||||||
(Loss) gain on sale of investment securities available for sale | (399 | ) | 2,394 | (117 | ) | 489 | 2,539 | (81 | ) | |||||||||||||
Other | 3,196 | 1,206 | 165 | 10,682 | 5,497 | 94 | ||||||||||||||||
72,801 | 73,221 | (1 | ) | 312,154 | 359,150 | (13 | ) | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||||
Salaries and related costs | 70,798 | 81,739 | (13 | ) | 293,870 | 303,354 | (3 | ) | ||||||||||||||
General and administrative | 15,889 | 15,996 | (1 | ) | 65,036 | 63,206 | 3 | |||||||||||||||
Amortization of core deposit intangibles | 233 | 530 | (56 | ) | 1,710 | 2,166 | (21 | ) | ||||||||||||||
Legal | 748 | 180 | 316 | 1,410 | 1,867 | (24 | ) | |||||||||||||||
Consulting | 724 | 719 | 1 | 3,467 | 4,958 | (30 | ) | |||||||||||||||
Federal Deposit Insurance Corporation assessments | 967 | 995 | (3 | ) | 3,279 | 3,414 | (4 | ) | ||||||||||||||
Occupancy | 8,788 | 8,122 | 8 | 38,268 | 30,530 | 25 | ||||||||||||||||
Information services | 8,563 | 9,206 | (7 | ) | 33,143 | 33,063 | — | |||||||||||||||
Net cost (benefit) from operation and sale of other real estate owned | 128 | 52 | 146 | (530 | ) | 1,764 | (130 | ) | ||||||||||||||
106,838 | 117,539 | (9 | ) | 439,653 | 444,322 | (1 | ) | |||||||||||||||
Income before income taxes | 17,042 | 3,406 | 400 | 66,189 | 90,777 | (27 | ) | |||||||||||||||
Income tax (benefit) expense | (17,873 | ) | 1,112 | (1,707 | ) | (2,757 | ) | 32,626 | (108 | ) | ||||||||||||
NET INCOME | $ | 34,915 | $ | 2,294 | 1,422 | $ | 68,946 | $ | 58,151 | 19 | ||||||||||||
Basic income per share | $ | 1.30 | $ | 0.09 | 1,344 | $ | 2.57 | $ | 2.36 | 9 | ||||||||||||
Diluted income per share | $ | 1.29 | $ | 0.09 | 1,333 | $ | 2.54 | $ | 2.34 | 9 | ||||||||||||
Basic weighted average number of shares outstanding | 26,887,611 | 25,267,909 | 6 | 26,864,657 | 24,615,990 | 9 | ||||||||||||||||
Diluted weighted average number of shares outstanding | 27,136,977 | 25,588,691 | 6 | 27,092,019 | 24,843,683 | 9 |
Quarter Ended | ||||||||||||||||||||
(in thousands, except share data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Interest income: | ||||||||||||||||||||
Loans | $ | 58,112 | $ | 56,547 | $ | 51,198 | $ | 49,506 | $ | 50,919 | ||||||||||
Investment securities | 5,438 | 5,264 | 5,419 | 5,632 | 5,863 | |||||||||||||||
Other | 136 | 170 | 125 | 136 | 80 | |||||||||||||||
63,686 | 61,981 | 56,742 | 55,274 | 56,862 | ||||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 6,402 | 6,020 | 5,867 | 5,623 | 5,629 | |||||||||||||||
Federal Home Loan Bank advances | 4,415 | 3,405 | 2,368 | 2,401 | 1,544 | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | — | — | 5 | — | 2 | |||||||||||||||
Long-term debt | 1,554 | 1,520 | 1,514 | 1,479 | 1,469 | |||||||||||||||
Other | 236 | 196 | 120 | 120 | 144 | |||||||||||||||
12,607 | 11,141 | 9,874 | 9,623 | 8,788 | ||||||||||||||||
Net interest income | 51,079 | 50,840 | 46,868 | 45,651 | 48,074 | |||||||||||||||
Provision for credit losses | — | 250 | 500 | — | 350 | |||||||||||||||
Net interest income after provision for credit losses | 51,079 | 50,590 | 46,368 | 45,651 | 47,724 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Net gain on loan origination and sale activities | 58,677 | 71,010 | 65,908 | 60,281 | 67,820 | |||||||||||||||
Loan servicing income (loss) | 9,099 | 8,282 | 8,764 | 9,239 | (271 | ) | ||||||||||||||
(Loss) income from WMS Series LLC | (159 | ) | 166 | 406 | 185 | (141 | ) | |||||||||||||
Depositor and other retail banking fees | 1,915 | 1,839 | 1,811 | 1,656 | 1,799 | |||||||||||||||
Insurance agency commissions | 472 | 535 | 501 | 396 | 414 | |||||||||||||||
(Loss) gain on sale of investment securities available for sale | (399 | ) | 331 | 551 | 6 | 2,394 | ||||||||||||||
Other | 3,196 | 1,721 | 3,067 | 2,698 | 1,206 | |||||||||||||||
72,801 | 83,884 | 81,008 | 74,461 | 73,221 | ||||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and related costs | 70,798 | 75,374 | 76,390 | 71,308 | 81,739 | |||||||||||||||
General and administrative | 15,889 | 16,147 | 15,872 | 17,128 | 15,996 | |||||||||||||||
Amortization of core deposit intangibles | 233 | 470 | 493 | 514 | 530 | |||||||||||||||
Legal | 748 | 352 | 150 | 160 | 180 | |||||||||||||||
Consulting | 724 | 914 | 771 | 1,058 | 719 | |||||||||||||||
Federal Deposit Insurance Corporation assessments | 967 | 791 | 697 | 824 | 995 | |||||||||||||||
Occupancy | 8,788 | 12,391 | (1 | ) | 8,880 | 8,209 | 8,122 | |||||||||||||
Information services | 8,563 | 8,760 | 8,172 | 7,648 | 9,206 | |||||||||||||||
Net cost (benefit) from operation and sale of other real estate owned | 128 | (502 | ) | (181 | ) | 25 | 52 | |||||||||||||
106,838 | 114,697 | 111,244 | 106,874 | 117,539 | ||||||||||||||||
Income before income taxes | 17,042 | 19,777 | 16,132 | 13,238 | 3,406 | |||||||||||||||
Income tax (benefit) expense | (17,873 | ) | 5,938 | 4,923 | 4,255 | 1,112 | ||||||||||||||
NET INCOME | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | $ | 2,294 | ||||||||||
Basic income per share | $ | 1.30 | $ | 0.51 | $ | 0.42 | $ | 0.33 | $ | 0.09 | ||||||||||
Diluted income per share | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | $ | 0.09 | ||||||||||
Basic weighted average number of shares outstanding | 26,887,611 | 26,883,392 | 26,866,230 | 26,821,396 | 25,267,909 | |||||||||||||||
Diluted weighted average number of shares outstanding | 27,136,977 | 27,089,040 | 27,084,608 | 27,057,449 | 25,588,691 |
(1) | Third quarter occupancy expense includes approximately $3 million of a pretax charge related to the Mortgage Banking restructuring plan. |
(in thousands, except share data) | Dec. 31, 2017 | Dec. 31, 2016 | % Change | ||||||||
Assets: | |||||||||||
Cash and cash equivalents (including interest-earning instruments of $32,262 and $34,615) | $ | 72,718 | $ | 53,932 | 35 | % | |||||
Investment securities (includes $846,268 and $993,990 carried at fair value) | 904,304 | 1,043,851 | (13 | ) | |||||||
Loans held for sale (includes $577,313 and $656,334 carried at fair value) | 610,902 | 714,559 | (15 | ) | |||||||
Loans held for investment (net of allowance for loan losses of $37,847 and $34,001; includes $5,477 and $17,988 carried at fair value) | 4,506,466 | 3,819,027 | 18 | ||||||||
Mortgage servicing rights (includes $258,560 and $226,113 carried at fair value) | 284,653 | 245,860 | 16 | ||||||||
Other real estate owned | 664 | 5,243 | (87 | ) | |||||||
Federal Home Loan Bank stock, at cost | 46,639 | 40,347 | 16 | ||||||||
Premises and equipment, net | 104,654 | 77,636 | 35 | ||||||||
Goodwill | 22,564 | 22,175 | 2 | ||||||||
Other assets | 188,477 | 221,070 | (15 | ) | |||||||
Total assets | $ | 6,742,041 | $ | 6,243,700 | 8 | ||||||
Liabilities and shareholders’ equity: | |||||||||||
Liabilities: | |||||||||||
Deposits | $ | 4,760,952 | $ | 4,429,701 | 7 | ||||||
Federal Home Loan Bank advances | 979,201 | 868,379 | 13 | ||||||||
Accounts payable and other liabilities | 172,234 | 191,189 | (10 | ) | |||||||
Long-term debt | 125,274 | 125,147 | — | ||||||||
Total liabilities | 6,037,661 | 5,614,416 | 8 | ||||||||
Commitments and contingencies | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred stock, no par value | |||||||||||
Authorized 10,000 shares | |||||||||||
Issued and outstanding, 0 shares and 0 shares | — | — | — | ||||||||
Common stock, no par value | |||||||||||
Authorized 160,000,000 shares | |||||||||||
Issued and outstanding, 26,888,288 shares and 26,800,183 shares | 511 | 511 | — | ||||||||
Additional paid-in capital | 339,009 | 336,149 | 1 | ||||||||
Retained earnings | 371,982 | 303,036 | 23 | ||||||||
Accumulated other comprehensive loss | (7,122 | ) | (10,412 | ) | (32 | ) | |||||
Total shareholders’ equity | 704,380 | 629,284 | 12 | ||||||||
Total liabilities and shareholders’ equity | $ | 6,742,041 | $ | 6,243,700 | 8 |
(in thousands, except share data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 72,718 | $ | 55,050 | $ | 54,447 | $ | 61,492 | $ | 53,932 | ||||||||||
Investment securities | 904,304 | 919,459 | 936,522 | 1,185,654 | 1,043,851 | |||||||||||||||
Loans held for sale | 610,902 | 851,126 | 784,556 | 537,959 | 714,559 | |||||||||||||||
Loans held for investment, net | 4,506,466 | 4,313,225 | 4,156,424 | 3,957,959 | 3,819,027 | |||||||||||||||
Mortgage servicing rights | 284,653 | 268,072 | 258,222 | 257,421 | 245,860 | |||||||||||||||
Other real estate owned | 664 | 3,704 | 4,597 | 5,646 | 5,243 | |||||||||||||||
Federal Home Loan Bank stock, at cost | 46,639 | 52,486 | 41,769 | 41,656 | 40,347 | |||||||||||||||
Premises and equipment, net | 104,654 | 104,389 | 101,797 | 97,349 | 77,636 | |||||||||||||||
Goodwill | 22,564 | 22,564 | 22,175 | 22,175 | 22,175 | |||||||||||||||
Other assets | 188,477 | 206,271 | 226,048 | 233,832 | 221,070 | |||||||||||||||
Total assets | $ | 6,742,041 | $ | 6,796,346 | $ | 6,586,557 | $ | 6,401,143 | $ | 6,243,700 | ||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | $ | 4,760,952 | $ | 4,670,486 | $ | 4,747,771 | $ | 4,595,809 | $ | 4,429,701 | ||||||||||
Federal Home Loan Bank advances | 979,201 | 1,135,245 | 867,290 | 862,335 | 868,379 | |||||||||||||||
Accounts payable and other liabilities | 172,234 | 193,866 | 190,421 | 176,891 | 191,189 | |||||||||||||||
Long-term debt | 125,274 | 125,280 | 125,234 | 125,189 | 125,147 | |||||||||||||||
Total liabilities | 6,037,661 | 6,124,877 | 5,930,716 | 5,760,224 | 5,614,416 | |||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Preferred stock, no par value | ||||||||||||||||||||
Authorized 10,000 shares | — | — | — | — | — | |||||||||||||||
Common stock, no par value | ||||||||||||||||||||
Authorized 160,000,000 shares | 511 | 511 | 511 | 511 | 511 | |||||||||||||||
Additional paid-in capital | 339,009 | 338,283 | 337,515 | 336,875 | 336,149 | |||||||||||||||
Retained earnings | 371,982 | 337,067 | 323,228 | 312,019 | 303,036 | |||||||||||||||
Accumulated other comprehensive loss | (7,122 | ) | (4,392 | ) | (5,413 | ) | (8,486 | ) | (10,412 | ) | ||||||||||
Total shareholders’ equity | 704,380 | 671,469 | 655,841 | 640,919 | 629,284 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,742,041 | $ | 6,796,346 | $ | 6,586,557 | $ | 6,401,143 | $ | 6,243,700 |
Quarter Ended December 31, | ||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||
(in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | ||||||||||||||||
Assets: | ||||||||||||||||||||||
Interest-earning assets: (1) | ||||||||||||||||||||||
Cash and cash equivalents | $ | 74,697 | $ | 136 | 0.72 | % | $ | 43,145 | $ | 79 | 0.73 | % | ||||||||||
Investment securities | 929,995 | 6,459 | 2.78 | % | 962,504 | 6,806 | 2.82 | % | ||||||||||||||
Loans held for sale | 835,131 | 8,473 | 4.05 | % | 882,252 | 8,329 | 3.78 | % | ||||||||||||||
Loans held for investment | 4,429,777 | 49,925 | 4.47 | % | 3,823,253 | 42,620 | 4.43 | % | ||||||||||||||
Total interest-earning assets | 6,269,600 | 64,993 | 4.12 | % | 5,711,154 | 57,834 | 4.03 | % | ||||||||||||||
Noninterest-earning assets (2) | 618,512 | 535,092 | ||||||||||||||||||||
Total assets | $ | 6,888,112 | $ | 6,246,246 | ||||||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||
Interest-bearing demand accounts | $ | 474,804 | $ | 484 | 0.40 | % | $ | 458,058 | $ | 485 | 0.42 | % | ||||||||||
Savings accounts | 300,203 | 246 | 0.33 | % | 301,477 | 259 | 0.34 | % | ||||||||||||||
Money market accounts | 1,586,999 | 2,332 | 0.58 | % | 1,553,197 | 2,323 | 0.60 | % | ||||||||||||||
Certificate accounts | 1,219,905 | 3,544 | 1.15 | % | 1,100,579 | 2,706 | 0.98 | % | ||||||||||||||
Total interest-bearing deposits | 3,581,911 | 6,606 | 0.73 | % | 3,413,311 | 5,773 | 0.67 | % | ||||||||||||||
Federal Home Loan Bank advances | 1,264,893 | 4,416 | 1.38 | % | 938,342 | 1,544 | 0.65 | % | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 8,828 | 30 | 1.37 | % | 951 | 2 | 0.73 | % | ||||||||||||||
Long-term debt | 125,294 | 1,554 | 4.92 | % | 125,128 | 1,469 | 4.67 | % | ||||||||||||||
Total interest-bearing liabilities | 4,980,926 | 12,606 | 1.00 | % | 4,477,732 | 8,788 | 0.78 | % | ||||||||||||||
Noninterest-bearing liabilities | 1,205,337 | 1,152,017 | ||||||||||||||||||||
Total liabilities | 6,186,263 | 5,629,749 | ||||||||||||||||||||
Shareholders’ equity | 701,849 | 616,497 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,888,112 | $ | 6,246,246 | ||||||||||||||||||
Net interest income (3) | $ | 52,387 | $ | 49,046 | ||||||||||||||||||
Net interest spread | 3.12 | % | 3.25 | % | ||||||||||||||||||
Impact of noninterest-bearing sources | 0.21 | % | 0.17 | % | ||||||||||||||||||
Net interest margin | 3.33 | % | 3.42 | % |
(1) | The average balances of nonaccrual assets and related income, if any, are included in their respective categories. |
(2) | Includes loan balances that have been foreclosed and are now reclassified to other real estate owned. |
(3) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $1.3 million and $972 thousand for the quarters ended December 31, 2017 and December 31, 2016, respectively. The estimated federal statutory tax rate was 35% for the periods presented. |
Year Ended December 31, | ||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||
(in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | ||||||||||||||||
Assets: | ||||||||||||||||||||||
Interest-earning assets: (1) | ||||||||||||||||||||||
Cash and cash equivalents | $ | 85,430 | $ | 567 | 0.67 | % | $ | 39,962 | $ | 254 | 0.63 | % | ||||||||||
Investment securities | 1,023,702 | 25,810 | 2.54 | % | 834,671 | 21,611 | 2.57 | % | ||||||||||||||
Loans held for sale | 711,063 | 28,732 | 4.05 | % | 764,222 | 28,581 | 3.76 | % | ||||||||||||||
Loans held for investment | 4,178,326 | 187,281 | 4.46 | % | 3,668,263 | 162,206 | 4.40 | % | ||||||||||||||
Total interest-earning assets | 5,998,521 | 242,390 | 4.03 | % | 5,307,118 | 212,652 | 4.00 | % | ||||||||||||||
Noninterest-earning assets (2) | 591,561 | 470,021 | ||||||||||||||||||||
Total assets | $ | 6,590,082 | $ | 5,777,139 | ||||||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||
Interest-bearing demand accounts | $ | 477,635 | $ | 1,964 | 0.41 | % | $ | 450,838 | $ | 1,950 | 0.43 | % | ||||||||||
Savings accounts | 306,151 | 1,013 | 0.33 | % | 299,502 | 1,029 | 0.34 | % | ||||||||||||||
Money market accounts | 1,579,115 | 8,533 | 0.54 | % | 1,370,256 | 7,344 | 0.53 | % | ||||||||||||||
Certificate accounts | 1,225,614 | 13,028 | 1.06 | % | 1,024,541 | 9,086 | 0.88 | % | ||||||||||||||
Total interest-bearing deposits | 3,588,515 | 24,538 | 0.68 | % | 3,145,137 | 19,409 | 0.61 | % | ||||||||||||||
Federal Home Loan Bank advances | 1,037,650 | 12,589 | 1.19 | % | 942,593 | 6,030 | 0.64 | % | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 3,732 | 48 | 1.20 | % | 803 | 6 | 0.40 | % | ||||||||||||||
Long-term debt | 125,228 | 6,067 | 4.83 | % | 101,049 | 4,043 | 3.73 | % | ||||||||||||||
Other borrowing | 96 | 3 | 0.89 | % | — | — | — | % | ||||||||||||||
Total interest-bearing liabilities | 4,755,221 | 43,245 | 0.91 | % | 4,189,582 | 29,488 | 0.70 | % | ||||||||||||||
Noninterest-bearing liabilities | 1,158,984 | 1,021,409 | ||||||||||||||||||||
Total liabilities | 5,914,205 | 5,210,991 | ||||||||||||||||||||
Shareholders’ equity | 675,877 | 566,148 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,590,082 | $ | 5,777,139 | ||||||||||||||||||
Net interest income (3) | $ | 199,145 | $ | 183,164 | ||||||||||||||||||
Net interest spread | 3.12 | % | 3.30 | % | ||||||||||||||||||
Impact of noninterest-bearing sources | 0.19 | % | 0.15 | % | ||||||||||||||||||
Net interest margin | 3.31 | % | 3.45 | % |
(1) | The average balances of nonaccrual assets and related income, if any, are included in their respective categories. |
(2) | Includes loan balances that have been foreclosed and are now reclassified to other real estate owned. |
(3) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on certain loans and securities of $4.7 million and $3.1 million for the years ended December 31, 2017 and December 31, 2016, respectively. The estimated federal statutory tax rate was 35% for the periods presented. |
Quarter Ended | Year Ended | ||||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||||||||
Net interest income | $ | 45,876 | $ | 45,314 | $ | 42,448 | $ | 40,904 | $ | 40,637 | $ | 174,542 | $ | 154,015 | |||||||||||||||
Provision for credit losses | — | 250 | 500 | — | 350 | 750 | 4,100 | ||||||||||||||||||||||
Noninterest income | 12,697 | 11,962 | 8,276 | 9,425 | 13,087 | 42,360 | 35,682 | ||||||||||||||||||||||
Noninterest expense | 38,716 | 37,160 | 36,631 | 36,470 | 35,482 | 148,977 | 138,385 | ||||||||||||||||||||||
Income before income taxes | 19,857 | 19,866 | 13,593 | 13,859 | 17,892 | 67,175 | 47,212 | ||||||||||||||||||||||
Income tax expense | 10,496 | 5,904 | 4,147 | 4,567 | 5,846 | 25,114 | 16,412 | ||||||||||||||||||||||
Net income | $ | 9,361 | $ | 13,962 | $ | 9,446 | $ | 9,292 | $ | 12,046 | $ | 42,061 | $ | 30,800 | |||||||||||||||
Net income, excluding income tax reform-related expense and acquisition-related expenses (net of tax)(1) | $ | 13,568 | $ | 14,191 | $ | 9,561 | $ | 9,292 | $ | 12,307 | $ | 46,612 | $ | 35,438 | |||||||||||||||
Efficiency ratio (2) | 66.10 | % | 64.88 | % | 72.22 | % | 72.46 | % | 66.04 | % | 68.68 | % | 72.95 | % | |||||||||||||||
Core efficiency ratio (1)(3) | 65.98 | % | 64.26 | % | 71.87 | % | 72.46 | % | 65.30 | % | 68.41 | % | 69.19 | % | |||||||||||||||
Full-time equivalent employees (ending) | 1,068 | 1,071 | 1,055 | 1,022 | 998 | 1,068 | 998 | ||||||||||||||||||||||
Production volumes for sale to the secondary market: | |||||||||||||||||||||||||||||
Loan originations | |||||||||||||||||||||||||||||
Multifamily DUS ® (4) | $ | 115,419 | $ | 109,994 | $ | 58,343 | $ | 57,552 | $ | 94,725 | $ | 341,308 | $ | 325,851 | |||||||||||||||
SBA | $ | 7,351 | $ | 18,734 | $ | 6,126 | $ | 6,798 | $ | 3,008 | $ | 39,009 | $ | 13,730 | |||||||||||||||
Loans sold | |||||||||||||||||||||||||||||
Multifamily DUS ® (4) | $ | 132,848 | $ | 102,075 | $ | 35,312 | $ | 76,849 | $ | 85,594 | $ | 347,084 | $ | 301,442 | |||||||||||||||
SBA | $ | 4,356 | $ | 11,318 | $ | 3,532 | $ | 7,635 | $ | 3,864 | $ | 26,841 | $ | 17,308 | |||||||||||||||
CRE Non-DUS (5) | $ | 180,810 | $ | 114,175 | $ | 21,163 | $ | 5,551 | (6) | $ | 71,136 | (7) | $ | 321,699 | $ | 150,903 | (7) | ||||||||||||
Net gain on loan origination and sale activities: | |||||||||||||||||||||||||||||
Multifamily DUS ® (4) | $ | 4,425 | $ | 4,152 | $ | 1,273 | $ | 3,360 | $ | 3,518 | $ | 13,210 | $ | 11,397 | |||||||||||||||
SBA | 465 | 1,056 | 316 | 602 | 328 | 2,439 | 1,414 | ||||||||||||||||||||||
CRE Non-DUS (5) | 2,446 | 1,789 | 143 | — | 2,903 | (8) | 4,378 | 4,059 | (8) | ||||||||||||||||||||
$ | 7,336 | $ | 6,997 | $ | 1,732 | $ | 3,962 | $ | 6,749 | $ | 20,027 | $ | 16,870 |
(1) | Commercial and Consumer Banking segment net income and core efficiency ratios, excluding tax reform-related expense and acquisition-related items, is a non-GAAP financial disclosure. The Company uses this non-GAAP financial measure to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. For corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures beginning on page 33 of this earnings release. |
(2) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(3) | Noninterest expense divided by total net revenue (net interest income and noninterest income), excluding acquisition-related items. |
(4) | Fannie Mae Multifamily Delegated Underwriting and Servicing Program (“DUS"®) is a registered trademark of Fannie Mae. |
(5) | Loans originated as Held for Investment. |
(6) | Balance represents termination of participation agreement. |
(7) | Includes $67.0 million of single family portfolio loan sales in 2016. |
(8) | Includes $2.8 million net gain on sale of single family portfolio loan during the fourth quarter of 2016. |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Commercial | ||||||||||||||||||||
Multifamily DUS ® | $ | 1,311,399 | $ | 1,213,459 | $ | 1,135,722 | $ | 1,140,414 | $ | 1,108,040 | ||||||||||
Other | 79,797 | 78,674 | 75,336 | 73,832 | 69,323 | |||||||||||||||
Total commercial loans serviced for others | $ | 1,391,196 | $ | 1,292,133 | $ | 1,211,058 | $ | 1,214,246 | $ | 1,177,363 |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Servicing income, net: | ||||||||||||||||||||||||||||
Servicing fees and other | $ | 2,081 | $ | 1,690 | $ | 1,652 | $ | 1,840 | $ | 1,402 | $ | 7,263 | $ | 8,495 | ||||||||||||||
Amortization of capitalized MSRs | (1,429 | ) | (811 | ) | (761 | ) | (931 | ) | (689 | ) | (3,932 | ) | (2,635 | ) | ||||||||||||||
Commercial loan servicing income | $ | 652 | $ | 879 | $ | 891 | $ | 909 | $ | 713 | $ | 3,331 | $ | 5,860 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Beginning balance | $ | 23,966 | $ | 21,600 | $ | 21,424 | $ | 19,747 | $ | 17,591 | ||||||||||
Originations | 3,193 | 3,177 | 937 | 2,608 | 2,845 | |||||||||||||||
Amortization | (1,066 | ) | (811 | ) | (761 | ) | (931 | ) | (689 | ) | ||||||||||
Ending balance | $ | 26,093 | $ | 23,966 | $ | 21,600 | $ | 21,424 | $ | 19,747 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.97 | % | 1.96 | % | 1.89 | % | 1.86 | % | 1.77 | % | ||||||||||
MSR servicing fee multiple (1) | 4.12 | 4.02 | 3.95 | 3.94 | 3.84 | |||||||||||||||
Weighted-average note rate (loans serviced for others) | 4.36 | % | 4.41 | % | 4.42 | % | 4.45 | % | 4.52 | % | ||||||||||
Weighted-average servicing fee (loans serviced for others) | 0.48 | % | 0.49 | % | 0.48 | % | 0.47 | % | 0.46 | % |
(1) | Represents the ratio of MSR carrying value to related loans serviced for others divided by the weighted-average servicing fee for loans serviced for others. |
(in thousands, except for duration data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Available for sale: | ||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Residential | $ | 130,090 | $ | 152,362 | $ | 150,935 | $ | 174,060 | $ | 177,074 | ||||||||||
Commercial | 23,694 | 20,214 | 23,381 | 29,476 | 25,536 | |||||||||||||||
Municipal bonds | 388,452 | 369,278 | 372,729 | 619,934 | 467,673 | |||||||||||||||
Collateralized mortgage obligations: | ||||||||||||||||||||
Residential | 160,424 | 184,936 | 184,695 | 182,037 | 191,201 | |||||||||||||||
Commercial | 98,569 | 86,817 | 76,230 | 69,144 | 70,764 | |||||||||||||||
Corporate debt securities | 24,737 | 28,731 | 30,218 | 51,075 | 51,122 | |||||||||||||||
U.S. Treasury Securities | 10,652 | 10,750 | 10,740 | 10,663 | 10,620 | |||||||||||||||
Agency Debentures | 9,650 | 9,763 | 35,338 | — | — | |||||||||||||||
Total available for sale | $ | 846,268 | $ | 862,851 | $ | 884,266 | $ | 1,136,389 | $ | 993,990 | ||||||||||
Held to maturity | 58,036 | 56,608 | 52,256 | 49,265 | 49,861 | |||||||||||||||
$ | 904,304 | $ | 919,459 | $ | 936,522 | $ | 1,185,654 | $ | 1,043,851 | |||||||||||
Weighted average duration in years | ||||||||||||||||||||
Available for sale | 5.7 | 4.9 | 4.6 | 3.6 | 4.2 |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Single family (1) | $ | 1,381,366 | $ | 1,269,484 | $ | 1,148,229 | $ | 1,100,215 | $ | 1,083,822 | ||||||||||
Home equity and other | 453,489 | 436,755 | 414,506 | 380,869 | 359,874 | |||||||||||||||
Total consumer | 1,834,855 | 1,706,239 | 1,562,735 | 1,481,084 | 1,443,696 | |||||||||||||||
Commercial real estate loans | ||||||||||||||||||||
Non-owner occupied commercial real estate | 622,782 | 651,048 | 617,382 | 599,590 | 588,672 | |||||||||||||||
Multifamily | 728,037 | 747,171 | 780,602 | 748,333 | 674,219 | |||||||||||||||
Construction/land development | 687,631 | 653,132 | 648,672 | 611,150 | 636,320 | |||||||||||||||
Total commercial real estate | 2,038,450 | 2,051,351 | 2,046,656 | 1,959,073 | 1,899,211 | |||||||||||||||
Commercial and industrial loans | ||||||||||||||||||||
Owner occupied commercial real estate | 391,613 | 335,373 | 324,740 | 323,262 | 282,891 | |||||||||||||||
Commercial business | 264,709 | 245,859 | 248,908 | 222,761 | 223,653 | |||||||||||||||
Total commercial and industrial loans | 656,322 | 581,232 | 573,648 | 546,023 | 506,544 | |||||||||||||||
Total loans before allowance, net deferred loan fees and costs | 4,529,627 | 4,338,822 | 4,183,039 | 3,986,180 | 3,849,451 | |||||||||||||||
Net deferred loan fees and costs | 14,686 | 11,458 | 9,521 | 6,514 | 3,577 | |||||||||||||||
4,544,313 | 4,350,280 | 4,192,560 | 3,992,694 | 3,853,028 | ||||||||||||||||
Allowance for loan losses | (37,847 | ) | (37,055 | ) | (36,136 | ) | (34,735 | ) | (34,001 | ) | ||||||||||
$ | 4,506,466 | $ | 4,313,225 | $ | 4,156,424 | $ | 3,957,959 | $ | 3,819,027 |
(1) | Includes $5.5 million, $5.5 million, $5.1 million, $19.0 million and $18.0 million of single family loans that are carried at fair value at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Loans - beginning balance | $ | 4,338,822 | $ | 4,183,039 | $ | 3,986,180 | $ | 3,849,451 | $ | 3,796,179 | ||||||||||
Originations | 478,535 | 515,351 | 508,263 | 355,684 | 425,499 | |||||||||||||||
Purchases and advances | 339,314 | 196,275 | 228,753 | 186,178 | 159,226 | |||||||||||||||
Payoffs, paydowns, sales and other | (626,791 | ) | (555,611 | ) | (540,019 | ) | (404,385 | ) | (530,223 | ) | ||||||||||
Charge-offs and transfers to OREO | (253 | ) | (232 | ) | (138 | ) | (748 | ) | (1,230 | ) | ||||||||||
Loans - ending balance | $ | 4,529,627 | $ | 4,338,822 | $ | 4,183,039 | $ | 3,986,180 | $ | 3,849,451 | ||||||||||
Net change - loans outstanding | $ | 190,805 | $ | 155,783 | $ | 196,859 | $ | 136,729 | $ | 53,272 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Beginning balance | $ | 38,195 | $ | 37,470 | $ | 36,042 | $ | 35,264 | $ | 35,233 | ||||||||||
Provision for credit losses | — | 250 | 500 | — | 350 | |||||||||||||||
Recoveries, net of (charge-offs) | 921 | 475 | 928 | 778 | (319 | ) | ||||||||||||||
Ending balance | $ | 39,116 | $ | 38,195 | $ | 37,470 | $ | 36,042 | $ | 35,264 | ||||||||||
Components: | ||||||||||||||||||||
Allowance for loan losses | $ | 37,847 | $ | 37,055 | $ | 36,136 | $ | 34,735 | $ | 34,001 | ||||||||||
Allowance for unfunded commitments | 1,269 | 1,140 | 1,334 | 1,307 | 1,263 | |||||||||||||||
Allowance for credit losses | $ | 39,116 | $ | 38,195 | $ | 37,470 | $ | 36,042 | $ | 35,264 | ||||||||||
Allowance as a % of loans held for investment(1) (2) | 0.83 | % | 0.85 | % | 0.86 | % | 0.87 | % | 0.88 | % | ||||||||||
Allowance as a % of nonaccrual loans | 251.63 | % | 245.02 | % | 233.50 | % | 185.99 | % | 165.52 | % |
(1) | Includes loans acquired with bank acquisitions. Excluding acquired loans, allowance for loan losses/total loans was 0.90%, 0.93%, 0.95%, 0.97% and 1.00% at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
(2) | In this calculation, loans held for investment includes loans that are carried at fair value. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Beginning balance | $ | 18,827 | $ | 20,073 | $ | 24,322 | $ | 25,785 | $ | 32,361 | ||||||||||
Additions | 1,425 | 2,231 | 1,009 | 5,481 | 3,137 | |||||||||||||||
Reductions: | ||||||||||||||||||||
Gross charge-offs | (234 | ) | (18 | ) | (103 | ) | (45 | ) | (826 | ) | ||||||||||
OREO sales | (3,014 | ) | (860 | ) | (1,162 | ) | (622 | ) | (2,001 | ) | ||||||||||
OREO writedowns and other adjustments | (26 | ) | (33 | ) | — | — | — | |||||||||||||
Principal paydowns, payoff advances, equity adjustments | (406 | ) | (2,045 | ) | (1,541 | ) | (3,759 | ) | (5,700 | ) | ||||||||||
Transferred back to accrual status | (867 | ) | (521 | ) | (2,452 | ) | (2,518 | ) | (1,186 | ) | ||||||||||
Total reductions | (4,547 | ) | (3,477 | ) | (5,258 | ) | (6,944 | ) | (9,713 | ) | ||||||||||
Net reductions | (3,122 | ) | (1,246 | ) | (4,249 | ) | (1,463 | ) | (6,576 | ) | ||||||||||
Ending balance(1) | $ | 15,705 | $ | 18,827 | $ | 20,073 | $ | 24,322 | $ | 25,785 |
(1) | Includes $1.9 million, $1.4 million, $732 thousand, $750 thousand and $1.9 million of nonperforming loans guaranteed by the SBA at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Nonaccrual loans | $ | 15,041 | $ | 15,123 | $ | 15,476 | $ | 18,676 | $ | 20,542 | ||||||||||
Other real estate owned | 664 | 3,704 | 4,597 | 5,646 | 5,243 | |||||||||||||||
Total nonperforming assets(1) | $ | 15,705 | $ | 18,827 | $ | 20,073 | $ | 24,322 | $ | 25,785 | ||||||||||
Nonaccrual loans as a % of total loans | 0.33 | % | 0.35 | % | 0.37 | % | 0.47 | % | 0.53 | % | ||||||||||
Nonperforming assets as a % of total assets | 0.23 | % | 0.28 | % | 0.30 | % | 0.38 | % | 0.41 | % |
(1) | Includes $1.9 million, $1.4 million, $732 thousand, $750 thousand and $1.9 million of nonperforming loans guaranteed by the SBA at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
(in thousands) | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total loans | ||||||||||||||||||
December 31, 2017 | ||||||||||||||||||||||||
Total loans held for investment | $ | 12,261 | $ | 4,457 | $ | 52,212 | $ | 68,930 | $ | 4,460,697 | $ | 4,529,627 | ||||||||||||
Less: FHA/VA loans(1) | 9,431 | 4,267 | 37,171 | 50,869 | 65,586 | 116,455 | ||||||||||||||||||
Less: guaranteed portion of SBA loans(2) | — | — | 1,856 | 1,856 | 6,136 | 7,992 | ||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 2,830 | $ | 190 | $ | 13,185 | $ | 16,205 | $ | 4,388,975 | $ | 4,405,180 | ||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.06 | % | — | % | 0.30 | % | 0.37 | % | 99.63 | % | 100.00 | % | ||||||||||||
December 31, 2016 | ||||||||||||||||||||||||
Total loans held for investment | $ | 4,834 | $ | 6,106 | $ | 61,388 | $ | 72,328 | $ | 3,777,123 | $ | 3,849,451 | ||||||||||||
Less: FHA/VA loans(1) | 3,773 | 4,219 | 40,846 | 48,838 | 55,393 | 104,231 | ||||||||||||||||||
Less: guaranteed portion of SBA loans(2) | — | — | 1,935 | 1,935 | 5,652 | 7,587 | ||||||||||||||||||
Total loans, excluding FHA/VA and guaranteed portion of SBA loans | $ | 1,061 | $ | 1,887 | $ | 18,607 | $ | 21,555 | $ | 3,716,078 | $ | 3,737,633 | ||||||||||||
As a % of total loans, excluding FHA/VA and guaranteed portion of SBA loans | 0.03 | % | 0.05 | % | 0.50 | % | 0.58 | % | 99.42 | % | 100.00 | % |
(1) | Represents loans whose repayments are insured by the FHA or guaranteed by the VA. |
(2) | Represents that portion of loans whose repayments are guaranteed by the SBA. |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Accrual (1) | $ | 73,023 | $ | 77,762 | $ | 81,886 | $ | 81,555 | $ | 76,581 | ||||||||||
Nonaccrual | 2,549 | 2,781 | 3,511 | 3,162 | 4,874 | |||||||||||||||
Total TDRs | $ | 75,572 | $ | 80,543 | $ | 85,397 | $ | 84,717 | $ | 81,455 |
(1) | Includes single family consumer loan balances insured by the FHA or guaranteed by the VA of $46.7 million, $45.5 million, $41.8 million, $39.7 million and $35.1 million at December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Recorded investment of re-defaults(1) | $ | 891 | $ | 1,743 | $ | 1,382 | $ | 270 | $ | 653 |
(1) | Represents TDRs that have defaulted in the current period within 12 months of their modification date. Defaulted TDRs are reported in the table above based on a payment default definition of 60 days past due for the consumer loans portfolio segment and 90 days past due for the commercial loans portfolio segment. |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Deposits by Product: | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | $ | 579,504 | $ | 587,994 | $ | 572,734 | $ | 581,101 | $ | 537,651 | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 461,349 | 528,679 | 541,592 | 514,271 | 468,812 | |||||||||||||||
Statement savings accounts due on demand | 293,858 | 308,217 | 311,202 | 310,813 | 301,361 | |||||||||||||||
Money market accounts due on demand | 1,834,154 | 1,563,921 | 1,587,741 | 1,579,957 | 1,603,141 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 2,589,361 | 2,400,817 | 2,440,535 | 2,405,041 | 2,373,314 | |||||||||||||||
Total transaction and savings deposits | 3,168,865 | 2,988,811 | 3,013,269 | 2,986,142 | 2,910,965 | |||||||||||||||
Certificates of deposit | 1,190,689 | 1,182,244 | 1,291,935 | 1,211,507 | 1,091,558 | |||||||||||||||
Noninterest-bearing accounts - other | 401,398 | 499,431 | 442,567 | 398,160 | 427,178 | |||||||||||||||
Total deposits | $ | 4,760,952 | $ | 4,670,486 | $ | 4,747,771 | $ | 4,595,809 | $ | 4,429,701 | ||||||||||
Percent of total deposits: | ||||||||||||||||||||
Noninterest-bearing accounts - checking and savings | 12.2 | % | 12.6 | % | 12.1 | % | 12.6 | % | 12.1 | % | ||||||||||
Interest-bearing transaction and savings deposits: | ||||||||||||||||||||
NOW accounts | 9.7 | 11.3 | 11.4 | 11.2 | 10.6 | |||||||||||||||
Statement savings accounts, due on demand | 6.2 | 6.6 | 6.6 | 6.8 | 6.8 | |||||||||||||||
Money market accounts, due on demand | 38.5 | 33.5 | 33.4 | 34.4 | 36.2 | |||||||||||||||
Total interest-bearing transaction and savings deposits | 54.4 | 51.4 | 51.4 | 52.4 | 53.6 | |||||||||||||||
Total transaction and savings deposits | 66.6 | 64.0 | 63.5 | 65.0 | 65.7 | |||||||||||||||
Certificates of deposit | 25.0 | 25.3 | 27.2 | 26.4 | 24.6 | |||||||||||||||
Noninterest-bearing accounts - other | 8.4 | 10.7 | 9.3 | 8.6 | 9.7 | |||||||||||||||
Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended | Year Ended | ||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||||||
Net interest income | $ | 5,203 | $ | 5,526 | $ | 4,420 | $ | 4,747 | $ | 7,437 | $ | 19,896 | $ | 26,034 | |||||||||||||
Noninterest income | 60,104 | 71,922 | 72,732 | 65,036 | 60,134 | 269,794 | 323,468 | ||||||||||||||||||||
Noninterest expense | 68,122 | 77,537 | 74,613 | 70,404 | 82,057 | 290,676 | 305,937 | ||||||||||||||||||||
(Loss) income before income taxes | (2,815 | ) | (89 | ) | 2,539 | (621 | ) | (14,486 | ) | (986 | ) | 43,565 | |||||||||||||||
Income tax (benefit) expense | (28,369 | ) | 34 | 776 | (312 | ) | (4,734 | ) | (27,871 | ) | 16,214 | ||||||||||||||||
Net income (loss) | $ | 25,554 | $ | (123 | ) | $ | 1,763 | $ | (309 | ) | $ | (9,752 | ) | $ | 26,885 | $ | 27,351 | ||||||||||
Net (loss) income, excluding income tax reform-related benefit and restructuring-related expenses (1) | $ | (2,101 | ) | $ | 2,397 | $ | 1,830 | $ | (309 | ) | $ | (9,752 | ) | $ | 1,817 | $ | 27,351 | ||||||||||
Efficiency ratio (2) | 104.31 | % | 100.11 | % | 96.71 | % | 100.89 | % | 121.44 | % | 100.34 | % | 87.54 | % | |||||||||||||
Core efficiency ratio (1)(3) | 104.71 | % | 95.11 | % | 96.58 | % | 100.89 | % | 121.44 | % | 99.06 | % | 87.54 | % | |||||||||||||
Full-time equivalent employees (ending) | 1,351 | 1,392 | 1,487 | 1,558 | 1,554 | 1,351 | 1,554 | ||||||||||||||||||||
Production volumes for sale to the secondary market: | |||||||||||||||||||||||||||
Single family mortgage closed loan volume (4)(5) | $ | 1,887,290 | $ | 2,034,715 | $ | 2,011,127 | $ | 1,621,053 | $ | 2,514,657 | $ | 7,554,185 | $ | 8,997,347 | |||||||||||||
Single family mortgage interest rate lock commitments | $ | 1,534,783 | $ | 1,872,645 | $ | 1,950,427 | $ | 1,622,622 | $ | 1,765,942 | $ | 6,980,477 | $ | 8,620,976 | |||||||||||||
Single family mortgage loans sold(4) | $ | 2,004,583 | $ | 1,956,129 | $ | 1,808,500 | $ | 1,739,737 | $ | 2,651,022 | $ | 7,508,949 | $ | 8,785,412 |
(1) | Mortgage Banking segment net income and core efficiency ratios, excluding tax reform- related benefits, and restructuring-related items, is a non-GAAP financial disclosure. The Company uses this non-GAAP financial measure to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. For corresponding reconciliations to GAAP financial measures, see Non-GAAP Financial Measures beginning on page 33 of this earnings release. |
(2) | Noninterest expense divided by total net revenue (net interest income and noninterest income). |
(3) | Noninterest expense divided by total net revenue (net interest income and noninterest income), excluding tax reform-related benefits and restructuring related charges. |
(4) | Includes loans originated by WMS Series LLC and purchased by HomeStreet and brokered loans where HomeStreet receives fee income but does not fund the loan on its balance sheet or sell it into the secondary market. |
(5) | Represents single family mortgage production volume designated for sale to the secondary market during each respective period. |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Gain on loan origination and sale activities:(1) | ||||||||||||||||||||||||||||
Single family: | ||||||||||||||||||||||||||||
Servicing value and secondary market gains(2) | $ | 44,479 | $ | 56,657 | $ | 57,353 | $ | 50,538 | $ | 52,719 | $ | 209,027 | $ | 260,477 | ||||||||||||||
Loan origination fees | 6,862 | 7,356 | 6,823 | 5,781 | 8,352 | 26,822 | 29,966 | |||||||||||||||||||||
Total mortgage banking gain on loan origination and sale activities(1) | $ | 51,341 | $ | 64,013 | $ | 64,176 | $ | 56,319 | $ | 61,071 | $ | 235,849 | $ | 290,443 | ||||||||||||||
Composite Margin (in basis points): | ||||||||||||||||||||||||||||
Servicing value and secondary market gains / interest rate lock commitments(3) | 290 | 303 | 294 | 312 | 299 | 300 | 302 | |||||||||||||||||||||
Loan origination fees / retail mortgage originations(4) | 39 | 39 | 37 | 37 | 35 | 38 | 36 | |||||||||||||||||||||
Composite Margin | 329 | 342 | 331 | 349 | 334 | 338 | 338 |
(1) | Excludes inter-segment activities. |
(2) | Comprised of gains and losses on interest rate lock commitments (which considers the value of servicing), single family loans held for sale, forward sale commitments used to economically hedge secondary market activities, and the estimated fair value of the repurchase or indemnity obligation recognized on new loan sales. |
(3) | Servicing value and secondary marketing gains have been aggregated and are stated as a percentage of interest rate lock commitments. |
(4) | Loan origination fees are stated as a percentage of mortgage originations from the retail channel and excludes mortgage loans purchased from WMS Series LLC. |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Servicing income, net: | ||||||||||||||||||||||||||||
Servicing fees and other | $ | 15,475 | $ | 14,790 | $ | 14,325 | $ | 14,339 | $ | 12,792 | $ | 58,929 | $ | 48,040 | ||||||||||||||
Changes in fair value of single family MSRs due to amortization (1) | (8,855 | ) | (9,167 | ) | (8,909 | ) | (8,520 | ) | (9,365 | ) | (35,451 | ) | (33,305 | ) | ||||||||||||||
6,620 | 5,623 | 5,416 | 5,819 | 3,427 | 23,478 | 14,735 | ||||||||||||||||||||||
Risk management, single family MSRs: | ||||||||||||||||||||||||||||
Changes in fair value of MSR due to changes in model inputs and/or assumptions (2) | 4,155 | (1,027 | ) | (6,417 | ) | 2,132 | 57,379 | (1,157 | ) | 20,025 | ||||||||||||||||||
Net (loss) gain from derivatives economically hedging MSR | (2,328 | ) | 2,807 | 8,874 | 379 | (61,790 | ) | 9,732 | (4,680 | ) | ||||||||||||||||||
1,827 | 1,780 | 2,457 | 2,511 | (4,411 | ) | 8,575 | 15,345 | |||||||||||||||||||||
Mortgage Banking servicing income (loss) | $ | 8,447 | $ | 7,403 | $ | 7,873 | $ | 8,330 | $ | (984 | ) | $ | 32,053 | $ | 30,080 |
(1) | Represents changes due to collection/realization of expected cash flows and curtailments. |
(2) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Single family | ||||||||||||||||||||
U.S. government and agency | $ | 22,123,710 | $ | 21,378,395 | $ | 20,574,300 | $ | 19,760,612 | $ | 18,931,835 | ||||||||||
Other | 507,437 | 513,858 | 530,308 | 542,557 | 556,621 | |||||||||||||||
Total single family loans serviced for others | $ | 22,631,147 | $ | 21,892,253 | $ | 21,104,608 | $ | 20,303,169 | $ | 19,488,456 |
Quarter Ended | ||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |||||||||||||||
Beginning balance | $ | 244,106 | $ | 236,621 | $ | 235,997 | $ | 226,113 | $ | 149,910 | ||||||||||
Additions and amortization: | ||||||||||||||||||||
Originations | 19,154 | 17,679 | 15,748 | 15,918 | 27,796 | |||||||||||||||
Purchases | — | — | 211 | 354 | 393 | |||||||||||||||
Changes due to amortization (1) | (8,855 | ) | (9,167 | ) | (8,909 | ) | (8,520 | ) | (9,365 | ) | ||||||||||
Net additions and amortization | 10,299 | 8,512 | 7,050 | 7,752 | 18,824 | |||||||||||||||
Changes in fair value due to changes in model inputs and/or assumptions (2) | 4,155 | (1,027 | ) | (6,426 | ) | 2,132 | 57,379 | |||||||||||||
Ending balance | $ | 258,560 | $ | 244,106 | $ | 236,621 | $ | 235,997 | $ | 226,113 | ||||||||||
Ratio of MSR carrying value to related loans serviced for others | 1.14 | % | 1.12 | % | 1.12 | % | 1.16 | % | 1.16 | % | ||||||||||
MSR servicing fee multiple (3) | 4.05 | 3.96 | 3.97 | 4.11 | 4.08 | |||||||||||||||
Weighted-average note rate (loans serviced for others) | 4.00 | % | 3.99 | % | 3.98 | % | 3.96 | % | 3.95 | % | ||||||||||
Weighted-average servicing fee (loans serviced for others) | 0.28 | % | 0.28 | % | 0.28 | % | 0.28 | % | 0.28 | % |
(1) | Represents changes due to collection/realization of expected cash flows and curtailments. |
(2) | Principally reflects changes in model assumptions, including prepayment speed assumptions, which are primarily affected by changes in mortgage interest rates. |
(3) | Represents the ratio of MSR carrying value to related loans serviced for others divided by the weighted-average servicing fee for loans serviced for others. |
Quarter Ended | Year Ended | ||||||||||||||||||||||||||
(dollars in thousands, except share data) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||||||
Shareholders' equity | $ | 704,380 | $ | 671,469 | $ | 655,841 | $ | 640,919 | $ | 629,284 | $ | 704,380 | $ | 629,284 | |||||||||||||
Less: Goodwill and other intangibles | (29,661 | ) | (29,893 | ) | (29,783 | ) | (30,275 | ) | (30,789 | ) | (29,661 | ) | (30,789 | ) | |||||||||||||
Tangible shareholders' equity | $ | 674,719 | $ | 641,576 | $ | 626,058 | $ | 610,644 | $ | 598,495 | $ | 674,719 | $ | 598,495 | |||||||||||||
Common shares outstanding | 26,888,288 | 26,884,402 | 26,874,871 | 26,862,744 | 26,800,183 | 26,888,288 | 26,800,183 | ||||||||||||||||||||
Book value per share | $ | 26.20 | $ | 24.98 | $ | 24.40 | $ | 23.86 | $ | 23.48 | $ | 26.20 | $ | 23.48 | |||||||||||||
Impact of goodwill and other intangibles | (1.11 | ) | (1.12 | ) | (1.10 | ) | (1.13 | ) | (1.15 | ) | (1.11 | ) | (1.15 | ) | |||||||||||||
Tangible book value per share | $ | 25.09 | $ | 23.86 | $ | 23.30 | $ | 22.73 | $ | 22.33 | $ | 25.09 | $ | 22.33 | |||||||||||||
Average shareholders' equity | $ | 701,849 | $ | 683,186 | $ | 668,377 | $ | 649,439 | $ | 616,497 | $ | 675,877 | $ | 566,148 | |||||||||||||
Less: Average goodwill and other intangibles | (29,898 | ) | (29,722 | ) | (30,104 | ) | (30,611 | ) | (29,943 | ) | (30,081 | ) | (28,580 | ) | |||||||||||||
Average tangible shareholders' equity | $ | 671,951 | $ | 653,464 | $ | 638,273 | $ | 618,828 | $ | 586,554 | $ | 645,796 | $ | 537,568 | |||||||||||||
Return on average shareholders’ equity | 19.90 | % | 8.10 | % | 6.71 | % | 5.53 | % | 1.49 | % | 10.20 | % | 10.27 | % | |||||||||||||
Impact of goodwill and other intangibles | 0.88 | % | 0.37 | % | 0.31 | % | 0.28 | % | 0.07 | % | 0.48 | % | 0.55 | % | |||||||||||||
Return on average tangible shareholders' equity | 20.78 | % | 8.47 | % | 7.02 | % | 5.81 | % | 1.56 | % | 10.68 | % | 10.82 | % | |||||||||||||
Return on average shareholders' equity | 19.90 | % | 8.10 | % | 6.71 | % | 5.53 | % | 1.49 | % | 10.20 | % | 10.27 | % | |||||||||||||
Impact of tax reform-related benefit | (13.29 | )% | — | % | — | % | — | % | — | % | (3.45 | )% | — | % | |||||||||||||
Impact of restructuring-related expenses (net of tax) | (0.10 | )% | 1.49 | % | 0.04 | % | — | % | — | % | 0.36 | % | — | % | |||||||||||||
Impact of acquisition-related expenses (net of tax) | 0.03 | % | 0.12 | % | 0.07 | % | — | % | 0.18 | % | 0.06 | % | 0.82 | % | |||||||||||||
Return on average shareholders' equity, excluding tax reform-related, restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 6.54 | % | 9.71 | % | 6.82 | % | 5.53 | % | 1.67 | % | 7.17 | % | 11.09 | % | |||||||||||||
Return on average assets | 2.03 | % | 0.83 | % | 0.70 | % | 0.57 | % | 0.15 | % | 1.05 | % | 1.01 | % | |||||||||||||
Impact of tax reform-related benefit | (1.35 | )% | — | % | — | % | — | % | — | % | (0.35 | )% | — | % | |||||||||||||
Impact of restructuring-related expenses (net of tax) | (0.01 | )% | 0.15 | % | — | % | — | % | — | % | 0.04 | % | — | % | |||||||||||||
Impact of acquisition-related expenses (net of tax) | — | % | 0.01 | % | 0.01 | % | — | % | 0.01 | % | (0.01 | )% | 0.08 | % | |||||||||||||
Return on average assets, excluding tax reform-related benefit, restructuring-related (net of tax) and acquisition-related expenses (net of tax) | 0.67 | % | 0.99 | % | 0.71 | % | 0.57 | % | 0.16 | % | 0.73 | % | 1.09 | % |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Consolidated results: | ||||||||||||||||||||||||||||
Net income | $ | 34,915 | $ | 13,839 | $ | 11,209 | $ | 8,983 | $ | 2,294 | $ | 68,946 | $ | 58,151 | ||||||||||||||
Impact of income tax reform-related benefit | (23,326 | ) | — | — | — | — | (23,326 | ) | — | |||||||||||||||||||
Impact of restructuring-related expenses (net of tax) | (169 | ) | 2,520 | 67 | — | — | 2,418 | — | ||||||||||||||||||||
Impact of acquisition-related expenses (net of tax) | 47 | 229 | 115 | — | 261 | 391 | 4,638 | |||||||||||||||||||||
Net income, excluding income tax reform-related benefit, restructuring (net of tax) and acquisition-related expenses (net of tax) | $ | 11,467 | $ | 16,588 | $ | 11,391 | $ | 8,983 | $ | 2,555 | $ | 48,429 | $ | 62,789 | ||||||||||||||
Net interest income | $ | 51,079 | $ | 50,840 | $ | 46,868 | $ | 45,651 | $ | 48,074 | $ | 194,438 | $ | 180,049 | ||||||||||||||
Noninterest income | 72,801 | 83,884 | 81,008 | 74,461 | 73,221 | 312,154 | 359,150 | |||||||||||||||||||||
Noninterest expense | $ | 106,838 | $ | 114,697 | $ | 111,244 | $ | 106,874 | $ | 117,539 | $ | 439,653 | $ | 444,322 | ||||||||||||||
Impact of restructuring-related expenses | 260 | (3,877 | ) | (103 | ) | — | — | (3,720 | ) | — | ||||||||||||||||||
Impact of acquisition-related expenses | (72 | ) | (353 | ) | (177 | ) | — | (401 | ) | (602 | ) | (7,136 | ) | |||||||||||||||
Noninterest expense, excluding restructuring and acquisition-related expenses | $ | 107,026 | $ | 110,467 | $ | 110,964 | $ | 106,874 | $ | 117,138 | $ | 435,331 | $ | 437,186 | ||||||||||||||
Efficiency ratio | 86.24 | % | 85.13 | % | 86.99 | % | 88.98 | % | 96.90 | % | 86.79 | % | 82.40 | % | ||||||||||||||
Impact of restructuring-related expenses | 0.21 | % | (2.87 | )% | (0.08 | )% | — | % | — | % | (0.73 | )% | — | % | ||||||||||||||
Impact of acquisition-related expenses | (0.06 | )% | (0.26 | )% | (0.14 | )% | — | % | (0.33 | )% | (0.13 | )% | (1.32 | )% | ||||||||||||||
Core efficiency ratio, excluding restructuring and acquisition-related expenses | 86.39 | % | 82.00 | % | 86.77 | % | 88.98 | % | 96.57 | % | 85.93 | % | 81.08 | % | ||||||||||||||
Diluted earnings per common share | $ | 1.29 | $ | 0.51 | $ | 0.41 | $ | 0.33 | $ | 0.09 | $ | 2.54 | $ | 2.34 | ||||||||||||||
Impact of income tax reform-related benefit | (0.86 | ) | — | — | — | — | (0.86 | ) | — | |||||||||||||||||||
Impact of restructuring-related expenses (net of tax) | (0.01 | ) | 0.09 | — | — | — | 0.09 | — | ||||||||||||||||||||
Impact of acquisition-related expenses (net of tax) | — | 0.01 | 0.01 | — | 0.01 | 0.02 | 0.19 | |||||||||||||||||||||
Diluted earnings per common share, excluding income tax reform-related benefit, restructuring (net of tax) and acquisition-related expenses (net of tax) | $ | 0.42 | $ | 0.61 | $ | 0.42 | $ | 0.33 | $ | 0.10 | $ | 1.79 | $ | 2.53 | ||||||||||||||
Return on average tangible shareholders' equity | 20.78 | % | 8.47 | % | 7.02 | % | 5.81 | % | 1.56 | % | 10.68 | % | 10.82 | % | ||||||||||||||
Impact of income tax reform-related benefit | (13.89 | )% | — | % | — | % | — | % | — | % | (3.61 | )% | — | % | ||||||||||||||
Impact of restructuring-related expenses (net of tax) | (0.10 | )% | 1.54 | % | 0.05 | % | — | % | — | % | 0.37 | % | — | % | ||||||||||||||
Impact of acquisition-related expenses (net of tax) | 0.04 | % | 0.14 | % | 0.07 | % | — | % | 0.18 | % | 0.06 | % | 0.86 | % | ||||||||||||||
Return on average tangible shareholders' equity, excluding income tax reform-related benefit, restructuring (net of tax) and acquisition-related expenses (net of tax) | 6.83 | % | 10.15 | % | 7.14 | % | 5.81 | % | 1.74 | % | 7.50 | % | 11.68 | % |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Commercial and Consumer Banking segment results: | ||||||||||||||||||||||||||||
Net income | $ | 9,361 | $ | 13,962 | $ | 9,446 | $ | 9,292 | $ | 12,046 | $ | 42,061 | $ | 30,800 | ||||||||||||||
Impact of income tax reform-related tax expense | 4,160 | — | — | — | — | 4,160 | — | |||||||||||||||||||||
Impact of acquisition-related expenses (net of tax) | 47 | 229 | 115 | — | 261 | 391 | 4,638 | |||||||||||||||||||||
Net income, excluding income tax reform-related expense and acquisition-related expenses (net of tax) | $ | 13,568 | $ | 14,191 | $ | 9,561 | $ | 9,292 | $ | 12,307 | $ | 46,612 | $ | 35,438 | ||||||||||||||
Net interest income | $ | 45,876 | $ | 45,314 | $ | 42,448 | $ | 40,904 | $ | 40,637 | $ | 174,542 | $ | 154,015 | ||||||||||||||
Noninterest income | $ | 12,697 | $ | 11,962 | $ | 8,276 | $ | 9,425 | $ | 13,087 | $ | 42,360 | $ | 35,682 | ||||||||||||||
Noninterest expense | $ | 38,716 | $ | 37,160 | $ | 36,631 | $ | 36,470 | $ | 35,482 | $ | 148,977 | $ | 138,385 | ||||||||||||||
Impact of acquisition-related expenses | (72 | ) | (353 | ) | (177 | ) | — | (401 | ) | (602 | ) | (7,136 | ) | |||||||||||||||
Noninterest expense, excluding acquisition-related expenses | $ | 38,644 | $ | 36,807 | $ | 36,454 | $ | 36,470 | $ | 35,081 | $ | 148,375 | $ | 131,249 | ||||||||||||||
Efficiency ratio | 66.10 | % | 64.88 | % | 72.22 | % | 72.46 | % | 66.04 | % | 68.68 | % | 72.95 | % | ||||||||||||||
Impact of acquisition-related expenses | (0.12 | )% | (0.62 | )% | (0.35 | )% | — | % | (0.74 | )% | (0.27 | )% | (3.76 | )% | ||||||||||||||
Core efficiency ratio, excluding acquisition-related expenses | 65.98 | % | 64.26 | % | 71.87 | % | 72.46 | % | 65.30 | % | 68.41 | % | 69.19 | % |
Quarter Ended | Year Ended | |||||||||||||||||||||||||||
(in thousands) | Dec. 31, 2017 | Sept. 30, 2017 | June 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||||||||||||||||
Mortgage Banking segment results: | ||||||||||||||||||||||||||||
Net income | $ | 25,554 | $ | (123 | ) | $ | 1,763 | $ | (309 | ) | $ | (9,752 | ) | $ | 26,885 | $ | 27,351 | |||||||||||
Impact of income tax reform-related tax benefit | (27,486 | ) | — | — | — | — | (27,486 | ) | — | |||||||||||||||||||
Impact of restructuring-related expenses (net of tax) | (169 | ) | 2,520 | 67 | — | — | 2,418 | — | ||||||||||||||||||||
Net (loss) income, excluding income tax reform-related benefit and restructuring-related expenses (net of tax) | $ | (2,101 | ) | $ | 2,397 | $ | 1,830 | $ | (309 | ) | $ | (9,752 | ) | $ | 1,817 | $ | 27,351 | |||||||||||
Net interest income | $ | 5,203 | $ | 5,526 | $ | 4,420 | $ | 4,747 | $ | 7,437 | $ | 19,896 | $ | 26,034 | ||||||||||||||
Noninterest income | $ | 60,104 | $ | 71,922 | $ | 72,732 | $ | 65,036 | $ | 60,134 | $ | 269,794 | $ | 323,468 | ||||||||||||||
Noninterest expense | $ | 68,122 | $ | 77,537 | $ | 74,613 | $ | 70,404 | $ | 82,057 | $ | 290,676 | $ | 305,937 | ||||||||||||||
Impact of restructuring-related expenses | $ | 260 | $ | (3,877 | ) | $ | (103 | ) | $ | — | $ | — | $ | (3,720 | ) | $ | — | |||||||||||
Noninterest expense, excluding restructuring-related expenses | $ | 68,382 | $ | 73,660 | $ | 74,510 | $ | 70,404 | $ | 82,057 | $ | 286,956 | $ | 305,937 | ||||||||||||||
Efficiency ratio | 104.31 | % | 100.11 | % | 96.71 | % | 100.89 | % | 121.44 | % | 100.34 | % | 87.54 | % | ||||||||||||||
Impact of restructuring-related expenses | 0.40 | % | (5.00 | )% | (0.13 | )% | — | % | — | % | (1.28 | )% | — | % | ||||||||||||||
Core efficiency ratio, excluding restructuring-related expenses | 104.71 | % | 95.11 | % | 96.58 | % | 100.89 | % | 121.44 | % | 99.06 | % | 87.54 | % |
• | Record net income of $42.1 million in our Commercial and Consumer Banking segment |
• | Tax Cuts and Jobs Act legislation enacted in December 2017 resulted in the recognition of a one-time, non-cash tax benefit of $23.3 million for 2017; 2018 estimated consolidated effective tax rate between 21% and 22% |
• | Loans held for investment grew to $4.53 billion, an increase of $680.2 million, or 18%, from $3.85 billion at year-end 2016 |
• | Four new retail deposit branches - three de novo branches and one acquired |
Contact: | Investor Relations: | |
HomeStreet, Inc. | ||
Gerhard Erdelji (206) 515-4039 | ||
Gerhard.Erdelji@HomeStreet.com | ||
http://ir.homestreet.com |
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