|
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
|
(Address of principal executive office)
|
(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(s)
|
Name of each exchange on which registered
|
|
Item 2.02. |
Results of Operations and Financial Condition
|
Item 9.01. |
Financial Statements and Exhibits
|
Press release dated January 28, 2021.
|
|
Supplemental data to the Registrant's press release dated January 28, 2021.
|
|
Earnings conference call presentation.
|
INDEPENDENT BANK CORPORATION
|
||||||
(Registrant)
|
Date
|
January 28, 2021
|
By
|
s/Gavin A. Mohr
|
||||
Gavin A. Mohr, Principal Financial Officer
|
For Release:
|
Immediately
|
Contact:
|
William B. Kessel, President and CEO, 616.447.3933
|
Gavin A. Mohr, Chief Financial Officer, 616.447.3929
|
• |
Increases in net income and diluted earnings per share of 22.4% and 26.2%, respectively, compared to 2019;
|
• |
Return on average assets and return on average equity of 1.61% and 17.82%, respectively, compared to 1.56% and 15.92%, respectively, in 2019;
|
• |
Net gains on mortgage loans of $15.9 million (up 148.5% over 2019) and total mortgage loan origination volume of $502.5 million;
|
• |
Deposit net growth of $39.6 million (or 1.1%);
|
• |
Continued strong asset quality metrics as evidenced by net loan recoveries during the quarter, a low level of non-performing loans and non-performing assets;
|
• |
COVID related forbearances declined to 0.83% of total loans; and
|
• |
The payment of a 20 cent per share dividend on common stock on November 16, 2020.
|
• |
Increases in net income and diluted earnings per share of 20.9% and 26.3%, respectively, compared to 2019;
|
• |
Return on average assets and return on average equity of 1.43% and 15.68 %, respectively, compared to 1.35% and 13.63%, respectively, in 2019;
|
• |
Net gains on mortgage loans of $62.6 million (up 213.1% over 2019) and total mortgage loan origination volume of $1.8 billion;
|
• |
Deposit net growth of $600.6 million (or 19.8 %); and
|
• |
Tangible common equity per share increased by 16% to $16.33 from $14.08.
|
• |
As a result of hedge de-designation the company realized an increase in interest expense of $1.6 million ($0.06 per diluted share, after tax) due to accelerated amortization of
deferred losses on certain derivative instruments. As cash flow hedges these losses were previously recorded in accumulated other comprehensive income (loss).
|
• |
Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of a negative $0.9 million ($0.03 per diluted share, after taxes) and a
negative $10.8 million ($0.39 per diluted share, after taxes) for the three-months and full-year ended December 31, 2020, respectively, as compared to a positive $0.6 million ($0.02 per diluted share, after taxes) and a negative $6.4 million
($0.22 per diluted share, after taxes) for the three-months and full year ended December 31, 2019, respectively.
|
• |
Approximately $1.54 million ($0.06 per diluted share, after taxes) and $3.0 million ($0.11 per diluted share, after taxes) of expenses related to the ongoing data processing
conversion and the completed bank branch closures (as described further below under “Operating Results”) for the three-months and full-year ended December 31, 2020, respectively.
|
• |
Customer Safety and Service Levels – From mid-March 2020 to mid-June 2020 we limited our branch lobbies to appointment only and kept drive-through windows open. In mid-June 2020 our
bank branch lobbies fully reopened. On November 13, 2020 we again limited our branch lobbies to appointment only in response to increasing COVID-19 cases in the State of Michigan. Branch lobbies were reopened January 4, 2021. With the
ability to use drive through service, ATMs or our electronic banking solutions there was minimal disruption to our customers.
|
• |
Employee Safety – For employees that are in our bank branches servicing our customers, we have expanded sick and vacation time. All non-branch employees either have the option or
are required to work remotely. We currently have approximately 38% of our total staff working remotely every day. We have installed “customer friendly” shields throughout our delivery network and have implemented a variety of other
protective processes to promote the safety of our employees and put both customers and staff at ease.
|
• |
Loan Forbearances – We have forbearance programs in place to proactively work with our customers who have experienced financial difficulty due to the COVID-19 pandemic. Totals for
these programs by loan type are presented in the table below under the caption “Asset Quality”. The level of these loans is down significantly after peaking in mid-June 2020, as many customers’ economic situations have improved, allowing them
to pay their loans current or return to their original payment terms.
|
• |
U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) – We built an effective process to manage the high volume of applications that we received. Customer
demand for this program was extraordinary. As of December 31, 2020, we had 1,483 PPP loans outstanding with a total balance of $169.8 million. The average balance of PPP loans in the fourth quarter of 2020 was $220.2 million with an average
yield of 6.91% (including the accretion of approximately $3.3 million of net of fees). At December 31, 2020, there was $3.2 million remaining unaccreted net fees related to PPP loans. These net fees are expected to be accreted into interest
income over the next 6 months, and the pace of such accretion will depend on payment activity (including loan forgiveness) within the PPP loan portfolio. As of December 31, 2020, 808 forgiveness applications (totaling $123.0 million) have
been submitted to the SBA with 751 (totaling $92.0 million) applications approved. We are currently taking applications for the second round of the Paycheck Protection Program.
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
12/31/2020
|
12/31/2019
|
12/31/2020
|
12/31/2019
|
|||||||||||||
Mortgage loan servicing, net:
|
(Dollars in thousands)
|
|||||||||||||||
Revenue, net
|
$
|
1,812
|
$
|
1,622
|
$
|
6,874
|
$
|
6,196
|
||||||||
Fair value change due to price
|
(892
|
)
|
628
|
(10,833
|
)
|
(6,408
|
)
|
|||||||||
Fair value change due to pay-downs
|
(1,304
|
)
|
(902
|
)
|
(5,391
|
)
|
(3,124
|
)
|
||||||||
Total
|
$
|
(384
|
)
|
$
|
1,348
|
$
|
(9,350
|
)
|
$
|
(3,336
|
)
|
12/31/20
|
9/30/20
|
% change vs. prior quarter
|
||||||||||||||||||||||||||||||
Loan Type
|
#
|
|
$(000’s)
|
|
% of portfolio
|
#
|
$ (000's)
|
% of portfolio
|
#
|
|
$ |
|||||||||||||||||||||
Loans serviced for others
|
288
|
$
|
42,897
|
1.4
|
%
|
416
|
$
|
66,279
|
2.3
|
%
|
(30.8
|
)%
|
(35.3
|
)%
|
||||||||||||||||||
Commercial
|
2
|
$
|
163
|
0.0
|
%
|
17
|
$
|
25,105
|
1.9
|
%
|
(88.2
|
%)
|
(99.4
|
%)
|
||||||||||||||||||
Mortgage
|
134
|
19,830
|
2.0
|
%
|
197
|
32,091
|
3.1
|
%
|
(32.0
|
)%
|
(38.2
|
)%
|
||||||||||||||||||||
Installment
|
48
|
1,412
|
0.3
|
%
|
97
|
2,631
|
0.5
|
%
|
(50.5
|
)%
|
(46.3
|
)%
|
||||||||||||||||||||
Total
|
184
|
$
|
21,405
|
0.8
|
%
|
311
|
$
|
59,827
|
2.1
|
%
|
(40.8
|
)%
|
(64.2
|
)%
|
Loan Type
|
12/31/2020
|
12/31/2019
|
12/31/2018
|
|||||||||
(Dollars in thousands)
|
||||||||||||
Commercial
|
$
|
1,440
|
$
|
1,377
|
$
|
2,220
|
||||||
Mortgage
|
6,353
|
7,996
|
6,033
|
|||||||||
Installment
|
519
|
805
|
781
|
|||||||||
Subtotal
|
8,312
|
10,178
|
9,034
|
|||||||||
Less – government guaranteed loans
|
439
|
646
|
460
|
|||||||||
Total non-performing loans
|
$
|
7,873
|
$
|
9,532
|
$
|
8,574
|
||||||
Ratio of non-performing loans to total portfolio loans
|
0.29
|
%
|
0.35
|
%
|
0.33
|
%
|
||||||
Ratio of non-performing assets to total assets
|
0.21
|
%
|
0.32
|
%
|
0.29
|
%
|
||||||
Ratio of the allowance for loan losses to non-performing loans
|
450.01
|
%
|
274.32
|
%
|
290.27
|
%
|
(1) |
Excludes loans that are classified as “troubled debt restructured” that are still performing.
|
Regulatory Capital Ratios
|
12/31/2020
|
12/31/2019
|
Well
Capitalized Minimum
|
|||||||||
Tier 1 capital to average total assets
|
8.81
|
%
|
9.49
|
%
|
5.00
|
%
|
||||||
Tier 1 common equity to risk-weighted assets
|
12.81
|
%
|
11.96
|
%
|
6.50
|
%
|
||||||
Tier 1 capital to risk-weighted assets
|
12.81
|
%
|
11.96
|
%
|
8.00
|
%
|
||||||
Total capital to risk-weighted assets
|
14.06
|
%
|
12.96
|
%
|
10.00
|
%
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(unaudited)
|
||||||||
(In thousands, except share
|
||||||||
amounts)
|
||||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
56,006
|
$
|
53,295
|
||||
Interest bearing deposits
|
62,699
|
12,009
|
||||||
Cash and Cash Equivalents
|
118,705
|
65,304
|
||||||
Interest bearing deposits - time
|
-
|
350
|
||||||
Securities available for sale
|
1,072,159
|
518,400
|
||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
18,427
|
18,359
|
||||||
Loans held for sale, carried at fair value
|
92,434
|
69,800
|
||||||
Loans
|
||||||||
Commercial
|
1,242,415
|
1,166,695
|
||||||
Mortgage
|
1,015,926
|
1,098,911
|
||||||
Installment
|
475,337
|
459,417
|
||||||
Total Loans
|
2,733,678
|
2,725,023
|
||||||
Allowance for loan losses
|
(35,429
|
)
|
(26,148
|
)
|
||||
Net Loans
|
2,698,249
|
2,698,875
|
||||||
Other real estate and repossessed assets
|
766
|
1,865
|
||||||
Property and equipment, net
|
36,127
|
38,411
|
||||||
Bank-owned life insurance
|
55,180
|
55,710
|
||||||
Capitalized mortgage loan servicing rights
|
16,904
|
19,171
|
||||||
Other intangibles
|
4,306
|
5,326
|
||||||
Goodwill
|
28,300
|
28,300
|
||||||
Accrued income and other assets
|
62,456
|
44,823
|
||||||
Total Assets
|
$
|
4,204,013
|
$
|
3,564,694
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Deposits
|
||||||||
Non-interest bearing
|
$
|
1,153,473
|
$
|
852,076
|
||||
Savings and interest-bearing checking
|
1,526,465
|
1,186,745
|
||||||
Reciprocal
|
556,185
|
431,027
|
||||||
Time
|
287,402
|
376,877
|
||||||
Brokered time
|
113,830
|
190,002
|
||||||
Total Deposits
|
3,637,355
|
3,036,727
|
||||||
Other borrowings
|
30,012
|
88,646
|
||||||
Subordinated debt
|
39,281
|
-
|
||||||
Subordinated debentures
|
39,524
|
39,456
|
||||||
Accrued expenses and other liabilities
|
68,319
|
49,696
|
||||||
Total Liabilities
|
3,814,491
|
3,214,525
|
||||||
Shareholders’ Equity
|
||||||||
Preferred stock, no par value, 200,000 shares authorized; none issued or outstanding
|
-
|
-
|
||||||
Common stock, no par value, 500,000,000 shares authorized; issued and outstanding: 21,853,800 shares at December 31, 2020
and 22,481,643 shares at December 31, 2019
|
339,353
|
352,344
|
||||||
Retained earnings
|
40,145
|
1,611
|
||||||
Accumulated other comprehensive income (loss)
|
10,024
|
(3,786
|
)
|
|||||
Total Shareholders’ Equity
|
389,522
|
350,169
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
4,204,013
|
$
|
3,564,694
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
(unaudited)
|
||||||||||||||||||||
Interest Income
|
(In thousands, except per share amounts)
|
|||||||||||||||||||
Interest and fees on loans
|
$
|
31,139
|
$
|
30,393
|
$
|
33,140
|
$
|
123,159
|
$
|
133,883
|
||||||||||
Interest on securities available for sale
|
||||||||||||||||||||
Taxable
|
3,299
|
3,450
|
3,031
|
12,655
|
11,842
|
|||||||||||||||
Tax-exempt
|
789
|
954
|
325
|
2,926
|
1,342
|
|||||||||||||||
Other investments
|
235
|
237
|
412
|
1,089
|
1,861
|
|||||||||||||||
Total Interest Income
|
35,462
|
35,034
|
36,908
|
139,829
|
148,928
|
|||||||||||||||
Interest Expense
|
||||||||||||||||||||
Deposits
|
3,516
|
2,062
|
5,487
|
12,666
|
23,425
|
|||||||||||||||
Other borrowings and subordinated debt and debentures
|
953
|
1,006
|
711
|
3,551
|
2,922
|
|||||||||||||||
Total Interest Expense
|
4,469
|
3,068
|
6,198
|
16,217
|
26,347
|
|||||||||||||||
Net Interest Income
|
30,993
|
31,966
|
30,710
|
123,612
|
122,581
|
|||||||||||||||
Provision for loan losses
|
(421
|
)
|
975
|
(221
|
)
|
12,463
|
824
|
|||||||||||||
Net Interest Income After Provision for Loan Losses
|
31,414
|
30,991
|
30,931
|
111,149
|
121,757
|
|||||||||||||||
Non-interest Income
|
||||||||||||||||||||
Service charges on deposit accounts
|
2,218
|
2,085
|
2,885
|
8,517
|
11,208
|
|||||||||||||||
Interchange income
|
2,819
|
3,428
|
2,553
|
11,230
|
10,297
|
|||||||||||||||
Net gains on assets
|
||||||||||||||||||||
Mortgage loans
|
15,873
|
20,205
|
6,388
|
62,560
|
19,978
|
|||||||||||||||
Securities available for sale
|
14
|
-
|
3
|
267
|
307
|
|||||||||||||||
Mortgage loan servicing, net
|
(384
|
)
|
(644
|
)
|
1,348
|
(9,350
|
)
|
(3,336
|
)
|
|||||||||||
Other
|
1,823
|
1,937
|
2,420
|
7,521
|
9,282
|
|||||||||||||||
Total Non-interest Income
|
22,363
|
27,011
|
15,597
|
80,745
|
47,736
|
|||||||||||||||
Non-interest Expense
|
||||||||||||||||||||
Compensation and employee benefits
|
20,039
|
21,954
|
18,546
|
74,781
|
67,501
|
|||||||||||||||
Occupancy, net
|
2,120
|
2,199
|
2,216
|
8,938
|
9,013
|
|||||||||||||||
Data processing
|
2,374
|
2,215
|
2,308
|
8,534
|
8,905
|
|||||||||||||||
Furniture, fixtures and equipment
|
964
|
999
|
1,055
|
4,089
|
4,113
|
|||||||||||||||
Interchange expense
|
926
|
831
|
883
|
3,342
|
3,215
|
|||||||||||||||
Communications
|
785
|
806
|
728
|
3,194
|
2,947
|
|||||||||||||||
Loan and collection
|
708
|
768
|
709
|
3,037
|
2,685
|
|||||||||||||||
Conversion related expenses
|
1,541
|
643
|
-
|
2,586
|
-
|
|||||||||||||||
Advertising
|
594
|
589
|
515
|
2,230
|
2,450
|
|||||||||||||||
Legal and professional
|
600
|
566
|
533
|
2,027
|
1,814
|
|||||||||||||||
FDIC deposit insurance
|
385
|
411
|
(38
|
)
|
1,596
|
685
|
||||||||||||||
Branch closure costs
|
-
|
-
|
417
|
-
|
||||||||||||||||
Correspondent bank service fees
|
101
|
101
|
111
|
395
|
411
|
|||||||||||||||
Net (gains) losses on other real estate and repossessed assets
|
(82
|
)
|
46
|
(63
|
)
|
64
|
(90
|
)
|
||||||||||||
Other
|
1,652
|
1,513
|
1,800
|
7,183
|
8,084
|
|||||||||||||||
Total Non-interest Expense
|
32,707
|
33,641
|
29,303
|
122,413
|
111,733
|
|||||||||||||||
Income Before Income Tax
|
21,070
|
24,361
|
17,225
|
69,481
|
57,760
|
|||||||||||||||
Income tax expense
|
4,084
|
4,777
|
3,346
|
13,329
|
11,325
|
|||||||||||||||
Net Income
|
$
|
16,986
|
$
|
19,584
|
$
|
13,879
|
$
|
56,152
|
$
|
46,435
|
||||||||||
Net Income Per Common Share
|
||||||||||||||||||||
Basic
|
$
|
0.78
|
$
|
0.90
|
$
|
0.62
|
$
|
2.56
|
$
|
2.03
|
||||||||||
Diluted
|
$
|
0.77
|
$
|
0.89
|
$
|
0.61
|
$
|
2.53
|
$
|
2.00
|
December 31,
2020
|
September 30,
2020
|
June 30,
2020
|
March 31,
2020
|
December 31,
2019
|
||||||||||||||||
(unaudited)
|
||||||||||||||||||||
(Dollars in thousands except per share data)
|
||||||||||||||||||||
Three Months Ended
|
||||||||||||||||||||
Net interest income
|
$
|
30,993
|
$
|
31,966
|
$
|
30,462
|
$
|
30,191
|
$
|
30,710
|
||||||||||
Provision for loan losses
|
(421
|
)
|
975
|
5,188
|
6,721
|
(221
|
)
|
|||||||||||||
Non-interest income
|
22,363
|
27,011
|
20,367
|
11,004
|
15,597
|
|||||||||||||||
Non-interest expense
|
32,707
|
33,641
|
27,346
|
28,719
|
29,303
|
|||||||||||||||
Income before income tax
|
21,070
|
24,361
|
18,295
|
5,755
|
17,225
|
|||||||||||||||
Income tax expense
|
4,084
|
4,777
|
3,523
|
945
|
3,346
|
|||||||||||||||
Net income
|
$
|
16,986
|
$
|
19,584
|
$
|
14,772
|
$
|
4,810
|
$
|
13,879
|
||||||||||
Basic earnings per share
|
$
|
0.78
|
$
|
0.90
|
$
|
0.67
|
$
|
0.22
|
$
|
0.62
|
||||||||||
Diluted earnings per share
|
0.77
|
0.89
|
0.67
|
0.21
|
0.61
|
|||||||||||||||
Cash dividend per share
|
0.20
|
0.20
|
0.20
|
0.20
|
0.18
|
|||||||||||||||
Average shares outstanding
|
21,866,326
|
21,881,562
|
21,890,761
|
22,271,412
|
22,481,551
|
|||||||||||||||
Average diluted shares outstanding
|
22,112,829
|
22,114,692
|
22,113,187
|
22,529,370
|
22,776,908
|
|||||||||||||||
Performance Ratios
|
||||||||||||||||||||
Return on average assets
|
1.61
|
%
|
1.90
|
%
|
1.54
|
%
|
0.54
|
%
|
1.56
|
%
|
||||||||||
Return on average equity
|
17.82
|
21.36
|
17.39
|
5.54
|
15.92
|
|||||||||||||||
Efficiency ratio (1)
|
60.59
|
56.36
|
53.07
|
69.32
|
62.56
|
|||||||||||||||
As a Percent of Average Interest-Earning Assets (1)
|
||||||||||||||||||||
Interest income
|
3.57
|
%
|
3.62
|
%
|
3.72
|
%
|
4.28
|
%
|
4.44
|
%
|
||||||||||
Interest expense
|
0.45
|
0.31
|
0.36
|
0.65
|
0.74
|
|||||||||||||||
Net interest income
|
3.12
|
3.31
|
3.36
|
3.63
|
3.70
|
|||||||||||||||
Average Balances
|
||||||||||||||||||||
Loans
|
$
|
2,876,795
|
$
|
2,925,872
|
$
|
2,913,857
|
$
|
2,766,770
|
$
|
2,776,037
|
||||||||||
Securities available for sale
|
1,009,578
|
891,975
|
660,126
|
527,395
|
488,016
|
|||||||||||||||
Total earning assets
|
3,984,080
|
3,887,455
|
3,659,614
|
3,350,948
|
3,320,828
|
|||||||||||||||
Total assets
|
4,195,546
|
4,102,318
|
3,868,408
|
3,565,829
|
3,529,744
|
|||||||||||||||
Deposits
|
3,632,758
|
3,559,070
|
3,303,302
|
3,066,298
|
3,040,099
|
|||||||||||||||
Interest bearing liabilities
|
2,574,306
|
2,532,481
|
2,402,361
|
2,309,995
|
2,251,928
|
|||||||||||||||
Shareholders' equity
|
379,232
|
364,714
|
341,606
|
348,963
|
345,910
|
|||||||||||||||
End of Period
|
||||||||||||||||||||
Capital
|
||||||||||||||||||||
Tangible common equity ratio
|
8.56
|
%
|
8.23
|
%
|
8.03
|
%
|
8.40
|
%
|
8.96
|
%
|
||||||||||
Average equity to average assets
|
9.04
|
8.89
|
8.83
|
9.79
|
9.80
|
|||||||||||||||
Common shareholders' equity per share of common stock
|
$
|
17.82
|
$
|
17.05
|
$
|
16.23
|
$
|
15.33
|
$
|
15.58
|
||||||||||
Tangible common equity per share of common stock
|
16.33
|
15.55
|
14.72
|
13.81
|
14.08
|
|||||||||||||||
Total shares outstanding
|
21,853,800
|
21,885,368
|
21,880,183
|
21,892,001
|
22,481,643
|
|||||||||||||||
Selected Balances
|
||||||||||||||||||||
Loans
|
$
|
2,733,678
|
$
|
2,855,479
|
$
|
2,866,663
|
$
|
2,718,115
|
$
|
2,725,023
|
||||||||||
Securities available for sale
|
1,072,159
|
985,050
|
856,280
|
594,284
|
518,400
|
|||||||||||||||
Total earning assets
|
3,979,397
|
3,962,824
|
3,833,523
|
3,416,845
|
3,343,941
|
|||||||||||||||
Total assets
|
4,204,013
|
4,168,944
|
4,043,315
|
3,632,387
|
3,564,694
|
|||||||||||||||
Deposits
|
3,637,355
|
3,597,745
|
3,485,125
|
3,083,564
|
3,036,727
|
|||||||||||||||
Interest bearing liabilities
|
2,553,418
|
2,515,185
|
2,456,193
|
2,350,056
|
2,312,753
|
|||||||||||||||
Shareholders' equity
|
389,522
|
373,092
|
355,123
|
335,618
|
350,169
|
(1)
|
Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net Interest Margin, Fully Taxable Equivalent ("FTE")
|
||||||||||||||||
Net interest income
|
$
|
30,993
|
$
|
30,710
|
$
|
123,612
|
$
|
122,581
|
||||||||
Add: taxable equivalent adjustment
|
221
|
104
|
823
|
423
|
||||||||||||
Net interest income - taxable equivalent
|
$
|
31,214
|
$
|
30,814
|
$
|
124,435
|
$
|
123,004
|
||||||||
Net interest margin (GAAP) (1)
|
3.10
|
%
|
3.68
|
%
|
3.32
|
%
|
3.79
|
%
|
||||||||
Net interest margin (FTE) (1)
|
3.12
|
%
|
3.70
|
%
|
3.34
|
%
|
3.80
|
%
|
(1)
|
Annualized for three months ended December 31, 2020 and 2019.
|
December 31,
2020
|
September 30,
2020
|
June 30,
2020
|
March 31,
2020
|
December 31,
2019
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Common shareholders' equity
|
$
|
389,522
|
$
|
373,092
|
$
|
355,123
|
$
|
335,618
|
$
|
350,169
|
||||||||||
Less:
|
||||||||||||||||||||
Goodwill
|
28,300
|
28,300
|
28,300
|
28,300
|
28,300
|
|||||||||||||||
Other intangibles
|
4,306
|
4,561
|
4,816
|
5,071
|
5,326
|
|||||||||||||||
Tangible common equity
|
$
|
356,916
|
$
|
340,231
|
$
|
322,007
|
$
|
302,247
|
$
|
316,543
|
||||||||||
Total assets
|
$
|
4,204,013
|
$
|
4,168,944
|
$
|
4,043,315
|
$
|
3,632,387
|
$
|
3,564,694
|
||||||||||
Less:
|
||||||||||||||||||||
Goodwill
|
28,300
|
28,300
|
28,300
|
28,300
|
28,300
|
|||||||||||||||
Other intangibles
|
4,306
|
4,561
|
4,816
|
5,071
|
5,326
|
|||||||||||||||
Tangible assets
|
$
|
4,171,407
|
$
|
4,136,083
|
$
|
4,010,199
|
$
|
3,599,016
|
$
|
3,531,068
|
||||||||||
Common equity ratio
|
9.27
|
%
|
8.95
|
%
|
8.78
|
%
|
9.24
|
%
|
9.82
|
%
|
||||||||||
Tangible common equity ratio
|
8.56
|
%
|
8.23
|
%
|
8.03
|
%
|
8.40
|
%
|
8.96
|
%
|
||||||||||
Tangible Common Equity per Share of Common Stock:
|
||||||||||||||||||||
Common shareholders' equity
|
$
|
389,522
|
$
|
373,092
|
$
|
355,123
|
$
|
335,618
|
$
|
350,169
|
||||||||||
Tangible common equity
|
$
|
356,916
|
$
|
340,231
|
$
|
322,007
|
$
|
302,247
|
$
|
316,543
|
||||||||||
Shares of common stock outstanding (in thousands)
|
21,854
|
21,885
|
21,880
|
21,892
|
22,482
|
|||||||||||||||
Common shareholders' equity per share of common stock
|
$
|
17.82
|
$
|
17.05
|
$
|
16.23
|
$
|
15.33
|
$
|
15.58
|
||||||||||
Tangible common equity per share of common stock
|
$
|
16.33
|
$
|
15.55
|
$
|
14.72
|
$
|
13.81
|
$
|
14.08
|
December 31,
2020
|
September 30,
2020
|
June 30,
2020
|
March 31,
2020
|
December 31,
2019
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Non-accrual loans
|
$
|
8,312
|
$
|
10,481
|
$
|
12,938
|
$
|
17,454
|
$
|
10,178
|
||||||||||
Loans 90 days or more past due and still accruing interest
|
-
|
266
|
5
|
-
|
-
|
|||||||||||||||
Subtotal
|
8,312
|
10,747
|
12,943
|
17,454
|
10,178
|
|||||||||||||||
Less: Government guaranteed loans
|
439
|
510
|
604
|
676
|
646
|
|||||||||||||||
Total non-performing loans
|
7,873
|
10,237
|
12,339
|
16,778
|
9,532
|
|||||||||||||||
Other real estate and repossessed assets
|
766
|
1,487
|
1,569
|
1,494
|
1,865
|
|||||||||||||||
Total non-performing assets
|
$
|
8,639
|
$
|
11,724
|
$
|
13,908
|
$
|
18,272
|
$
|
11,397
|
||||||||||
As a percent of Portfolio Loans
|
||||||||||||||||||||
Non-performing loans
|
0.29
|
%
|
0.36
|
%
|
0.43
|
%
|
0.62
|
%
|
0.35
|
%
|
||||||||||
Allowance for loan losses
|
1.30
|
1.25
|
1.20
|
1.20
|
0.96
|
|||||||||||||||
Non-performing assets to total assets
|
0.21
|
0.28
|
0.34
|
0.50
|
0.32
|
|||||||||||||||
Allowance for loan losses as a percent of non-performing loans
|
450.01
|
349.43
|
279.60
|
193.68
|
274.32
|
(1)
|
Excludes loans classified as "trouble debt restructured" that are not past due.
|
December 31, 2020
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDR's
|
$
|
7,956
|
$
|
36,385
|
$
|
44,341
|
||||||
Non-performing TDR's (2)
|
1,148
|
1,584
|
(3)
|
2,732
|
||||||||
Total
|
$
|
9,104
|
$
|
37,969
|
$
|
47,073
|
December 31, 2019
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDR's
|
$
|
7,974
|
$
|
39,601
|
$
|
47,575
|
||||||
Non-performing TDR's (2)
|
540
|
2,607
|
(3)
|
3,147
|
||||||||
Total
|
$
|
8,514
|
$
|
42,208
|
$
|
50,722
|
||||||
(1)
|
Retail loans include mortgage and installment loan segments.
|
(2)
|
Included in non-performing assets table above.
|
(3)
|
Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.
|
Twelve months ended
December 31,
|
||||||||||||||||
2020
|
2019
|
|||||||||||||||
Loans
|
Unfunded
Commitments
|
Loans
|
Unfunded
Commitments
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
26,148
|
$
|
1,542
|
$
|
24,888
|
$
|
1,296
|
||||||||
Additions (deductions)
|
||||||||||||||||
Provision for loan losses
|
12,463
|
-
|
824
|
-
|
||||||||||||
Recoveries credited to allowance
|
3,069
|
-
|
3,961
|
-
|
||||||||||||
Loans charged against the allowance
|
(6,251
|
)
|
-
|
(3,525
|
)
|
-
|
||||||||||
Additions included in non-interest expense
|
-
|
263
|
-
|
246
|
||||||||||||
Balance at end of period
|
$
|
35,429
|
$
|
1,805
|
$
|
26,148
|
$
|
1,542
|
||||||||
Net loans charged against the allowance to average Portfolio Loans
|
0.11
|
%
|
(0.02
|
)%
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(In thousands)
|
||||||||
Subordinated debt
|
$
|
39,281
|
$
|
-
|
||||
Subordinated debentures
|
39,524
|
39,456
|
||||||
Amount not qualifying as regulatory capital
|
(505
|
)
|
(1,224
|
)
|
||||
Amount qualifying as regulatory capital
|
78,300
|
38,232
|
||||||
Shareholders’ equity
|
||||||||
Common stock
|
339,353
|
352,344
|
||||||
Retained earnings
|
40,145
|
1,611
|
||||||
Accumulated other comprehensive income (loss)
|
10,024
|
(3,786
|
)
|
|||||
Total shareholders’ equity
|
389,522
|
350,169
|
||||||
Total capitalization
|
$
|
467,822
|
$
|
388,401
|
Three months ended
|
Twelve months ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Service charges on deposit accounts
|
$
|
2,218
|
$
|
2,085
|
$
|
2,885
|
$
|
8,517
|
$
|
11,208
|
||||||||||
Interchange income
|
2,819
|
3,428
|
2,553
|
$
|
11,230
|
$
|
10,297
|
|||||||||||||
Net gains on assets
|
||||||||||||||||||||
Mortgage loans
|
15,873
|
20,205
|
6,388
|
62,560
|
19,978
|
|||||||||||||||
Securities
|
14
|
-
|
3
|
267
|
307
|
|||||||||||||||
Mortgage loan servicing, net
|
(384
|
)
|
(644
|
)
|
1,348
|
(9,350
|
)
|
(3,336
|
)
|
|||||||||||
Investment and insurance commissions
|
493
|
530
|
461
|
1,971
|
1,658
|
|||||||||||||||
Bank owned life insurance
|
160
|
215
|
298
|
910
|
1,111
|
|||||||||||||||
Other
|
1,170
|
1,192
|
1,661
|
4,640
|
6,513
|
|||||||||||||||
Total non-interest income
|
$
|
22,363
|
$
|
27,011
|
$
|
15,597
|
$
|
80,745
|
$
|
47,736
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
15,403
|
$
|
16,906
|
$
|
19,171
|
$
|
21,400
|
||||||||
Originated servicing rights capitalized
|
3,697
|
2,539
|
13,957
|
7,303
|
||||||||||||
Change in fair value
|
(2,196
|
)
|
(274
|
)
|
(16,224
|
)
|
(9,532
|
)
|
||||||||
Balance at end of period
|
$
|
16,904
|
$
|
19,171
|
$
|
16,904
|
$
|
19,171
|
Three months ended
|
Twelve months ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Mortgage loans originated
|
$
|
502,491
|
$
|
536,502
|
$
|
302,520
|
$
|
1,820,697
|
$
|
1,011,141
|
||||||||||
Mortgage loans sold
|
388,631
|
417,092
|
248,691
|
1,447,031
|
738,910
|
|||||||||||||||
Net gains on mortgage loans
|
15,873
|
20,205
|
6,388
|
62,560
|
19,978
|
|||||||||||||||
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")
|
4.08
|
%
|
4.84
|
%
|
2.57
|
%
|
4.32
|
%
|
2.70
|
%
|
||||||||||
Fair value adjustments included in the Loan Sales Margin
|
(0.53
|
)
|
0.50
|
(0.38
|
)
|
0.47
|
0.22
|
Three months ended
|
Twelve months ended
|
|||||||||||||||||||
December 31,
|
September 30,
|
December 31,
|
December 31,
|
|||||||||||||||||
2020
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Compensation
|
$
|
10,852
|
$
|
10,294
|
$
|
10,726
|
$
|
41,517
|
$
|
41,719
|
||||||||||
Performance-based compensation
|
5,485
|
8,310
|
4,336
|
19,725
|
12,066
|
|||||||||||||||
Payroll taxes and employee benefits
|
3,702
|
3,350
|
3,484
|
13,539
|
13,716
|
|||||||||||||||
Compensation and employee benefits
|
20,039
|
21,954
|
18,546
|
74,781
|
67,501
|
|||||||||||||||
Occupancy, net
|
2,120
|
2,199
|
2,216
|
8,938
|
9,013
|
|||||||||||||||
Data processing
|
2,374
|
2,215
|
2,308
|
8,534
|
8,905
|
|||||||||||||||
Furniture, fixtures and equipment
|
964
|
999
|
1,055
|
4,089
|
4,113
|
|||||||||||||||
Interchange expense
|
926
|
831
|
883
|
3,342
|
3,215
|
|||||||||||||||
Communications
|
785
|
806
|
728
|
3,194
|
2,947
|
|||||||||||||||
Loan and collection
|
708
|
768
|
709
|
3,037
|
2,685
|
|||||||||||||||
Conversion related expenses
|
1,541
|
643
|
-
|
2,586
|
-
|
|||||||||||||||
Advertising
|
594
|
589
|
515
|
2,230
|
2,450
|
|||||||||||||||
Legal and professional fees
|
600
|
566
|
533
|
2,027
|
1,814
|
|||||||||||||||
FDIC deposit insurance
|
385
|
411
|
(38
|
)
|
1,596
|
685
|
||||||||||||||
Amortization of intangible assets
|
255
|
255
|
272
|
1,020
|
1,089
|
|||||||||||||||
Supplies
|
167
|
126
|
164
|
680
|
638
|
|||||||||||||||
Branch closure costs
|
-
|
-
|
417
|
|||||||||||||||||
Correspondent bank service fees
|
101
|
101
|
111
|
395
|
411
|
|||||||||||||||
Costs (recoveries) related to unfunded lending commitments
|
(8
|
)
|
41
|
(95
|
)
|
263
|
246
|
|||||||||||||
Provision for loss reimbursement on sold loans
|
40
|
46
|
50
|
200
|
229
|
|||||||||||||||
Net (gains) losses on other real estate and repossessed assets
|
(82
|
)
|
46
|
(63
|
)
|
64
|
(90
|
)
|
||||||||||||
Other
|
1,198
|
1,045
|
1,409
|
5,020
|
5,882
|
|||||||||||||||
Total non-interest expense
|
$
|
32,707
|
$
|
33,641
|
$
|
29,303
|
$
|
122,413
|
$
|
111,733
|
Three Months Ended
December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Balance
|
Interest
|
Rate (2)
|
Balance
|
Interest
|
Rate (2)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable loans
|
$
|
2,870,011
|
$
|
31,071
|
4.31
|
%
|
$
|
2,767,857
|
$
|
33,061
|
4.75
|
%
|
||||||||||||
Tax-exempt loans (1)
|
6,784
|
87
|
5.10
|
8,180
|
100
|
4.85
|
||||||||||||||||||
Taxable securities
|
803,322
|
3,299
|
1.64
|
437,087
|
3,031
|
2.77
|
||||||||||||||||||
Tax-exempt securities (1)
|
206,256
|
991
|
1.92
|
50,929
|
408
|
3.20
|
||||||||||||||||||
Interest bearing cash
|
79,280
|
24
|
0.12
|
38,416
|
163
|
1.68
|
||||||||||||||||||
Other investments
|
18,427
|
211
|
4.56
|
18,359
|
249
|
5.38
|
||||||||||||||||||
Interest Earning Assets
|
3,984,080
|
35,683
|
3.57
|
3,320,828
|
37,012
|
4.44
|
||||||||||||||||||
Cash and due from banks
|
51,497
|
48,095
|
||||||||||||||||||||||
Other assets, net
|
159,969
|
160,821
|
||||||||||||||||||||||
Total Assets
|
$
|
4,195,546
|
$
|
3,529,744
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest-bearing checking
|
$
|
1,988,438
|
761
|
0.15
|
$
|
1,547,860
|
2,441
|
0.63
|
||||||||||||||||
Time deposits
|
477,079
|
2,755
|
2.30
|
611,914
|
3,046
|
1.97
|
||||||||||||||||||
Other borrowings
|
108,789
|
953
|
3.48
|
92,154
|
711
|
3.06
|
||||||||||||||||||
Interest Bearing Liabilities
|
2,574,306
|
4,469
|
0.69
|
2,251,928
|
6,198
|
1.09
|
||||||||||||||||||
Non-interest bearing deposits
|
1,167,241
|
880,325
|
||||||||||||||||||||||
Other liabilities
|
74,767
|
51,581
|
||||||||||||||||||||||
Shareholders’ equity
|
379,232
|
345,910
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
4,195,546
|
$
|
3,529,744
|
||||||||||||||||||||
Net Interest Income
|
$
|
31,214
|
$
|
30,814
|
||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.12
|
%
|
3.70
|
%
|
(1)
|
Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
(2)
|
Annualized
|
Twelve Months Ended
December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
Average
|
Average
|
|||||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable loans
|
$
|
2,863,846
|
$
|
122,875
|
4.29
|
%
|
$
|
2,713,690
|
$
|
133,574
|
4.92
|
%
|
||||||||||||
Tax-exempt loans (1)
|
7,145
|
360
|
5.04
|
7,937
|
391
|
4.93
|
||||||||||||||||||
Taxable securities
|
635,914
|
12,655
|
1.99
|
397,598
|
11,842
|
2.98
|
||||||||||||||||||
Tax-exempt securities (1)
|
137,330
|
3,673
|
2.67
|
52,324
|
1,683
|
3.22
|
||||||||||||||||||
Interest bearing cash
|
59,056
|
184
|
0.31
|
48,023
|
818
|
1.70
|
||||||||||||||||||
Other investments
|
18,410
|
905
|
4.92
|
18,359
|
1,043
|
5.68
|
||||||||||||||||||
Interest Earning Assets
|
3,721,701
|
140,652
|
3.78
|
3,237,931
|
149,351
|
4.61
|
||||||||||||||||||
Cash and due from banks
|
49,886
|
37,575
|
||||||||||||||||||||||
Other assets, net
|
162,068
|
164,726
|
||||||||||||||||||||||
Total Assets
|
$
|
3,933,655
|
$
|
3,440,232
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest-bearing checking
|
$
|
1,821,115
|
3,882
|
0.21
|
$
|
1,453,061
|
10,228
|
0.70
|
||||||||||||||||
Time deposits
|
516,306
|
8,784
|
1.70
|
655,718
|
13,197
|
2.01
|
||||||||||||||||||
Other borrowings
|
117,904
|
3,551
|
3.01
|
77,254
|
2,922
|
3.78
|
||||||||||||||||||
Interest Bearing Liabilities
|
2,455,325
|
16,217
|
0.66
|
2,186,033
|
26,347
|
1.21
|
||||||||||||||||||
Non-interest bearing deposits
|
1,054,230
|
867,314
|
||||||||||||||||||||||
Other liabilities
|
65,943
|
46,153
|
||||||||||||||||||||||
Shareholders’ equity
|
358,157
|
340,732
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
3,933,655
|
$
|
3,440,232
|
||||||||||||||||||||
Net Interest Income
|
$
|
124,435
|
$
|
123,004
|
||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.34
|
%
|
3.80
|
%
|
(1)
|
Interest on tax-exempt loans and securities is presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
Total Commercial Loans
|
||||||||||||||||||||
Watch Credits
|
Percent of Loan
|
|||||||||||||||||||
Loan Category
|
All Loans
|
Performing
|
Non-accrual
|
Total
|
Category in Watch Credit
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Land
|
$
|
14,567
|
$
|
116
|
$
|
-
|
$
|
116
|
0.8
|
%
|
||||||||||
Land Development
|
12,176
|
36
|
-
|
36
|
0.3
|
|||||||||||||||
Construction
|
68,724
|
36
|
-
|
36
|
0.1
|
|||||||||||||||
Income Producing
|
358,603
|
3,699
|
-
|
3,699
|
1.0
|
|||||||||||||||
Owner Occupied
|
360,510
|
24,693
|
745
|
25,438
|
7.1
|
|||||||||||||||
Total Commercial Real Estate Loans
|
$
|
814,580
|
$
|
28,580
|
745
|
$
|
29,325
|
3.6
|
||||||||||||
Other Commercial Loans
|
$
|
427,835
|
$
|
16,059
|
695
|
$
|
16,754
|
3.9
|
||||||||||||
Total non-performing commercial loans
|
$
|
1,440
|
Total Commercial Loans
|
||||||||||||||||||||
Watch Credits
|
Percent of Loan
|
|||||||||||||||||||
Loan Category
|
All Loans
|
Performing
|
Non-accrual
|
Total
|
Category in
Watch Credit
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Land
|
$
|
11,235
|
$
|
275
|
$
|
735
|
$
|
1,010
|
9.0
|
%
|
||||||||||
Land Development
|
12,899
|
-
|
-
|
-
|
0.0
|
|||||||||||||||
Construction
|
97,463
|
-
|
-
|
-
|
0.0
|
|||||||||||||||
Income Producing
|
409,897
|
15,347
|
-
|
15,347
|
3.7
|
|||||||||||||||
Owner Occupied
|
323,694
|
35,485
|
295
|
35,780
|
11.1
|
|||||||||||||||
Total Commercial Real Estate Loans
|
$
|
855,188
|
$
|
51,107
|
1,030
|
$
|
52,137
|
6.1
|
||||||||||||
Other Commercial Loans
|
$
|
311,507
|
$
|
20,580
|
347
|
$
|
20,927
|
6.7
|
||||||||||||
Total non-performing commercial loans
|
$
|
1,377
|
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