|
|
|
(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
|
Exhibits.
|
|
Press release dated October 26, 2021.
|
|
Supplemental data to the Registrant's press release dated October 26, 2021.
|
|
Earnings conference call presentation.
|
INDEPENDENT BANK CORPORATION
|
|||||
(Registrant)
|
|||||
Date
|
October 26, 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
|
• |
Annualized return on average assets and on average equity of 1.40% and 15.93%, respectively;
|
• |
An increase in net interest income of 5.7% over the third quarter of 2020;
|
• |
Net gains on mortgage loans of $8.4 million and total mortgage loan origination volume of $453.8 million;
|
• |
Net growth in portfolio loans of $69.4 million (or 9.8% annualized);
|
• |
Continued strong asset quality metrics as evidenced by $1.5 million in net loan recoveries during the quarter as well as a low level of non-performing loans and non-performing
assets; and
|
• |
The payment of a 21 cent per share dividend on common stock on August 16, 2021.
|
• |
Increases in net income and diluted earnings per share of 28.6% and 30.7%, respectively;
|
• |
Annualized return on average assets and on average equity of 1.53% and 17.32%, respectively;
|
• |
Net gains on mortgage loans of $30.3 million and total mortgage loan origination volume of $1.44 billion;
|
• |
Net growth in portfolio loans of $150.3 million (or 7.4% annualized); and
|
• |
Net growth in deposits of $374.7 million (or 13.8% annualized).
|
• |
Changes in the fair value due to price of capitalized mortgage loan servicing rights (the “MSR Changes”) of $0.6 million ($0.02 per diluted share, after taxes) and $2.8 million ($0.10 per diluted
share, after taxes) for the three- and nine-months ended September 30, 2021, respectively, as compared to a negative $1.1 million ($0.04 per diluted share, after taxes) and a negative $9.9 million ($0.35 per diluted share, after taxes) for
the three- and nine-months ended September 30, 2020, respectively.
|
PPP – Round 1
|
||||||||||||||||||||||||
At or for the three months ended
|
9/30/2021
|
6/30/2021
|
9/30/2020
|
|||||||||||||||||||||
#
|
(000’s)
|
|
#
|
(000’s)
|
|
#
|
(000’s)
|
|
||||||||||||||||
Loans outstanding at period end
|
20
|
$
|
1,262
|
298
|
$
|
42,315
|
2,117
|
$
|
261,182
|
|||||||||||||||
Average loans outstanding
|
-
|
2,699
|
-
|
78,747
|
-
|
261,543
|
||||||||||||||||||
Cumulative forgiveness applications submitted
|
2,085
|
260,015
|
1,882
|
231,715
|
197
|
37,223
|
||||||||||||||||||
Cumulative forgiveness applications approved
|
2,082
|
259,613
|
1,870
|
229,429
|
-
|
-
|
||||||||||||||||||
Net fees accreted into interest income
|
-
|
381
|
-
|
981
|
-
|
1,321
|
||||||||||||||||||
Net unaccreted fees at period end
|
-
|
-
|
-
|
381
|
-
|
6,494
|
||||||||||||||||||
Average loan yield
|
-
|
11.51
|
%
|
-
|
5.98
|
%
|
-
|
3.04
|
%
|
PPP – Round 2
|
||||||||||||||||||||||||
At or for the three months ended
|
9/30/2021
|
6/30/2021
|
3/31/2021
|
|||||||||||||||||||||
#
|
(000’s)
|
|
#
|
(000’s)
|
#
|
(000’s)
|
||||||||||||||||||
Loans outstanding at period end
|
806
|
$
|
88,888
|
1,409
|
$
|
129,573
|
1,250
|
$
|
128,240
|
|||||||||||||||
Average loans outstanding
|
-
|
110,276
|
-
|
133,239
|
-
|
72,011
|
||||||||||||||||||
Cumulative forgiveness applications submitted
|
831
|
51,370
|
166
|
8,843
|
-
|
-
|
||||||||||||||||||
Cumulative forgiveness applications approved
|
810
|
50,535
|
164
|
8,828
|
-
|
-
|
||||||||||||||||||
Net fees accreted into interest income
|
-
|
2,249
|
-
|
832
|
-
|
229
|
||||||||||||||||||
Net unaccreted fees at period end
|
-
|
3,178
|
-
|
5,429
|
-
|
5,454
|
||||||||||||||||||
Average loan yield
|
-
|
9.17
|
%
|
-
|
3.50
|
%
|
-
|
2.25
|
%
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
9/30/2021
|
9/30/2020
|
9/30/2021
|
9/30/2020
|
|||||||||||||
Mortgage loan servicing, net:
|
(Dollars in thousands)
|
|||||||||||||||
Revenue, net
|
$
|
2,023
|
$
|
1,743
|
$
|
5,809
|
$
|
5,062
|
||||||||
Fair value change due to price
|
599
|
(1,089
|
)
|
2,813
|
(9,941
|
)
|
||||||||||
Fair value change due to pay-downs
|
(1,351
|
)
|
(1,298
|
)
|
(4,146
|
)
|
(4,087
|
)
|
||||||||
Total
|
$
|
1,271
|
$
|
(644
|
)
|
$
|
4,476
|
$
|
(8,966
|
)
|
9/30/2021
|
6/30/2021
|
% change vs. prior quarter
|
||||||||||||||||||||||||||||||
Loan Type
|
#
|
$ (000’s)
|
% of
portfolio
|
#
|
$ (000's)
|
% of
portfolio
|
#
|
$ | ||||||||||||||||||||||||
Commercial
|
-
|
$
|
-
|
0.0
|
%
|
-
|
$
|
-
|
0.0
|
%
|
none
|
none
|
||||||||||||||||||||
Mortgage
|
39
|
5,901
|
0.5
|
%
|
82
|
12,416
|
1.2
|
%
|
(52.4
|
)%
|
(52.5
|
)%
|
||||||||||||||||||||
Installment
|
7
|
109
|
0.0
|
%
|
18
|
327
|
0.1
|
%
|
(61.1
|
)%
|
(66.7
|
)%
|
||||||||||||||||||||
Total
|
46
|
$
|
6,010
|
0.2
|
%
|
100
|
$
|
12,743
|
0.5
|
%
|
(54.0
|
)%
|
(52.8
|
)%
|
||||||||||||||||||
Loans serviced for others
|
64
|
$
|
7,986
|
0.3
|
%
|
150
|
$
|
20,231
|
0.6
|
%
|
(57.3
|
)%
|
(60.5
|
)%
|
Loan Type
|
9/30/2021
|
12/31/2020
|
9/30/2020
|
|||||||||
(Dollars in thousands)
|
||||||||||||
Commercial
|
$
|
242
|
$
|
1,440
|
$
|
2,487
|
||||||
Mortgage
|
5,160
|
6,353
|
7,580
|
|||||||||
Installment
|
515
|
519
|
680
|
|||||||||
Subtotal
|
5,917
|
8,312
|
10,747
|
|||||||||
Less – government guaranteed loans
|
327
|
439
|
510
|
|||||||||
Total non-performing loans
|
$
|
5,590
|
$
|
7,873
|
$
|
10,237
|
||||||
Ratio of non-performing loans to total portfolio loans
|
0. 19
|
%
|
0.29
|
%
|
0.36
|
%
|
||||||
Ratio of non-performing assets to total assets
|
0.13
|
%
|
0.21
|
%
|
0.28
|
%
|
||||||
Ratio of the allowance for credit losses to non-performing loans
|
837.19
|
%
|
450.01
|
%
|
349.43
|
%
|
(1)
|
Excludes loans that are classified as “troubled debt restructured” that are still performing.
|
Regulatory Capital Ratios
|
9/30/2021
|
12/31/2020
|
Well Capitalized
Minimum
|
Tier 1 capital to average total assets
|
8.75%
|
8.81%
|
5.00%
|
Tier 1 common equity to risk-weighted assets
|
12.14%
|
12.81%
|
6.50%
|
Tier 1 capital to risk-weighted assets
|
12.14%
|
12.81%
|
8.00%
|
Total capital to risk-weighted assets
|
13.39%
|
14.06%
|
10.00%
|
September 30,
2021
|
December 31,
2020
|
|||||||
(unaudited)
|
||||||||
(In thousands, except share
amounts)
|
||||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
49,946
|
$
|
56,006
|
||||
Interest bearing deposits
|
75,675
|
62,699
|
||||||
Cash and Cash Equivalents
|
125,621
|
118,705
|
||||||
Securities available for sale
|
1,348,378
|
1,072,159
|
||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost
|
18,427
|
18,427
|
||||||
Loans held for sale, carried at fair value
|
78,731
|
92,434
|
||||||
Loans
|
||||||||
Commercial
|
1,222,802
|
1,242,415
|
||||||
Mortgage
|
1,100,992
|
1,015,926
|
||||||
Installment
|
560,184
|
475,337
|
||||||
Total Loans
|
2,883,978
|
2,733,678
|
||||||
Allowance for credit losses (1)
|
(46,799
|
)
|
(35,429
|
)
|
||||
Net Loans
|
2,837,179
|
2,698,249
|
||||||
Other real estate and repossessed assets
|
224
|
766
|
||||||
Property and equipment, net
|
36,623
|
36,127
|
||||||
Bank-owned life insurance
|
55,124
|
55,180
|
||||||
Capitalized mortgage loan servicing rights, carried at fair value
|
24,208
|
16,904
|
||||||
Other intangibles
|
3,579
|
4,306
|
||||||
Goodwill
|
28,300
|
28,300
|
||||||
Accrued income and other assets
|
65,946
|
62,456
|
||||||
Total Assets
|
$
|
4,622,340
|
$
|
4,204,013
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Deposits
|
||||||||
Non-interest bearing
|
$
|
1,297,096
|
$
|
1,153,473
|
||||
Savings and interest-bearing checking
|
1,803,763
|
1,526,465
|
||||||
Reciprocal
|
596,193
|
556,185
|
||||||
Time
|
312,085
|
287,402
|
||||||
Brokered time
|
2,931
|
113,830
|
||||||
Total Deposits
|
4,012,068
|
3,637,355
|
||||||
Other borrowings
|
30,007
|
30,012
|
||||||
Subordinated debt
|
39,338
|
39,281
|
||||||
Subordinated debentures
|
39,575
|
39,524
|
||||||
Accrued expenses and other liabilities
|
101,321
|
68,319
|
||||||
Total Liabilities
|
4,222,309
|
3,814,491
|
||||||
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: 21,321,092 shares at September 30, 2021 and 21,853,800
shares at December 31, 2020
|
326,390
|
339,353
|
||||||
Retained earnings
|
66,543
|
40,145
|
||||||
Accumulated other comprehensive income
|
7,098
|
10,024
|
||||||
Total Shareholders’ Equity
|
400,031
|
389,522
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
4,622,340
|
$
|
4,204,013
|
(1) |
Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
|||||||||||||||||
2021
|
2021
|
2020
|
2021
|
2020
|
||||||||||||||||
(unaudited)
|
||||||||||||||||||||
Interest Income
|
(In thousands, except per share amounts)
|
|||||||||||||||||||
Interest and fees on loans
|
$
|
30,132
|
$
|
28,091
|
$
|
30,393
|
$
|
86,328
|
$
|
92,020
|
||||||||||
Interest on securities available for sale
|
||||||||||||||||||||
Taxable
|
3,922
|
3,656
|
3,450
|
10,374
|
9,356
|
|||||||||||||||
Tax-exempt
|
1,597
|
1,544
|
954
|
4,525
|
2,137
|
|||||||||||||||
Other investments
|
204
|
208
|
237
|
629
|
854
|
|||||||||||||||
Total Interest Income
|
35,855
|
33,499
|
35,034
|
101,856
|
104,367
|
|||||||||||||||
Interest Expense
|
||||||||||||||||||||
Deposits
|
1,090
|
1,142
|
2,062
|
3,488
|
9,150
|
|||||||||||||||
Other borrowings and subordinated debt and debentures
|
962
|
964
|
1,006
|
2,888
|
2,598
|
|||||||||||||||
Total Interest Expense
|
2,052
|
2,106
|
3,068
|
6,376
|
11,748
|
|||||||||||||||
Net Interest Income
|
33,803
|
31,393
|
31,966
|
95,480
|
92,619
|
|||||||||||||||
Provision for credit losses (1)
|
(659
|
)
|
(1,425
|
)
|
975
|
(2,558
|
)
|
12,884
|
||||||||||||
Net Interest Income After Provision for Credit Losses
|
34,462
|
32,818
|
30,991
|
98,038
|
79,735
|
|||||||||||||||
Non-interest Income
|
||||||||||||||||||||
Interchange income
|
4,237
|
3,453
|
3,428
|
10,739
|
8,411
|
|||||||||||||||
Service charges on deposit accounts
|
2,944
|
2,318
|
2,085
|
7,178
|
6,299
|
|||||||||||||||
Net gains on assets
|
||||||||||||||||||||
Mortgage loans
|
8,361
|
9,091
|
20,205
|
30,280
|
46,687
|
|||||||||||||||
Securities available for sale
|
5
|
-
|
-
|
1,421
|
253
|
|||||||||||||||
Mortgage loan servicing, net
|
1,271
|
(1,962
|
)
|
(644
|
)
|
4,476
|
(8,966
|
)
|
||||||||||||
Other
|
2,877
|
1,871
|
1,937
|
6,778
|
5,698
|
|||||||||||||||
Total Non-interest Income
|
19,695
|
14,771
|
27,011
|
60,872
|
58,382
|
|||||||||||||||
Non-interest Expense
|
||||||||||||||||||||
Compensation and employee benefits
|
21,659
|
19,883
|
21,954
|
60,064
|
54,742
|
|||||||||||||||
Data processing
|
3,022
|
2,576
|
2,215
|
7,972
|
6,160
|
|||||||||||||||
Occupancy, net
|
2,082
|
2,153
|
2,199
|
6,578
|
6,818
|
|||||||||||||||
Interchange expense
|
1,202
|
1,201
|
831
|
3,351
|
2,416
|
|||||||||||||||
Furniture, fixtures and equipment
|
1,075
|
1,034
|
999
|
3,112
|
3,125
|
|||||||||||||||
Loan and collection
|
735
|
859
|
768
|
2,353
|
2,329
|
|||||||||||||||
Communications
|
683
|
777
|
806
|
2,341
|
2,409
|
|||||||||||||||
Conversion related expenses
|
275
|
1,143
|
643
|
1,636
|
1,045
|
|||||||||||||||
Legal and professional
|
513
|
522
|
566
|
1,534
|
1,427
|
|||||||||||||||
Advertising
|
666
|
164
|
589
|
1,319
|
1,636
|
|||||||||||||||
FDIC deposit insurance
|
346
|
307
|
411
|
983
|
1,211
|
|||||||||||||||
Correspondent bank service fees
|
77
|
115
|
101
|
292
|
294
|
|||||||||||||||
Branch closure costs
|
-
|
-
|
-
|
-
|
417
|
|||||||||||||||
Net (gains) losses on other real estate and repossessed assets
|
(28
|
)
|
6
|
46
|
(202
|
)
|
146
|
|||||||||||||
Other
|
2,205
|
1,796
|
1,513
|
5,736
|
5,531
|
|||||||||||||||
Total Non-interest Expense
|
34,512
|
32,536
|
33,641
|
97,069
|
89,706
|
|||||||||||||||
Income Before Income Tax
|
19,645
|
15,053
|
24,361
|
61,841
|
48,411
|
|||||||||||||||
Income tax expense
|
3,683
|
2,665
|
4,777
|
11,454
|
9,245
|
|||||||||||||||
Net Income
|
$
|
15,962
|
$
|
12,388
|
$
|
19,584
|
$
|
50,387
|
$
|
39,166
|
||||||||||
Net Income Per Common Share
|
||||||||||||||||||||
Basic
|
$
|
0.74
|
$
|
0.57
|
$
|
0.90
|
$
|
2.32
|
$
|
1.78
|
||||||||||
Diluted
|
$
|
0.73
|
$
|
0.56
|
$
|
0.89
|
$
|
2.30
|
$
|
1.76
|
(1) |
Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology.
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
December 31,
2020
|
September 30,
2020
|
||||||||||||||||
(unaudited)
|
||||||||||||||||||||
(Dollars in thousands except per share data)
|
||||||||||||||||||||
Three Months Ended
|
||||||||||||||||||||
Net interest income
|
$
|
33,803
|
$
|
31,393
|
$
|
30,284
|
$
|
30,993
|
$
|
31,966
|
||||||||||
Provision for credit losses (1)
|
(659
|
)
|
(1,425
|
)
|
(474
|
)
|
(421
|
)
|
975
|
|||||||||||
Non-interest income
|
19,695
|
14,771
|
26,406
|
22,363
|
27,011
|
|||||||||||||||
Non-interest expense
|
34,512
|
32,536
|
30,021
|
32,707
|
33,641
|
|||||||||||||||
Income before income tax
|
19,645
|
15,053
|
27,143
|
21,070
|
24,361
|
|||||||||||||||
Income tax expense
|
3,683
|
2,665
|
5,106
|
4,084
|
4,777
|
|||||||||||||||
Net income
|
$
|
15,962
|
$
|
12,388
|
$
|
22,037
|
$
|
16,986
|
$
|
19,584
|
||||||||||
Basic earnings per share
|
$
|
0.74
|
$
|
0.57
|
$
|
1.01
|
$
|
0.78
|
$
|
0.90
|
||||||||||
Diluted earnings per share
|
0.73
|
0.56
|
1.00
|
0.77
|
0.89
|
|||||||||||||||
Cash dividend per share
|
0.21
|
0.21
|
0.21
|
0.20
|
0.20
|
|||||||||||||||
Average shares outstanding
|
21,515,669
|
21,749,654
|
21,825,937
|
21,866,326
|
21,881,562
|
|||||||||||||||
Average diluted shares outstanding
|
21,726,346
|
21,966,829
|
22,058,503
|
22,112,829
|
22,114,692
|
|||||||||||||||
Performance Ratios
|
||||||||||||||||||||
Return on average assets
|
1.40
|
%
|
1.12
|
%
|
2.10
|
%
|
1.61
|
%
|
1.90
|
%
|
||||||||||
Return on average equity
|
15.93
|
12.78
|
23.51
|
17.82
|
21.36
|
|||||||||||||||
Efficiency ratio (2)
|
63.47
|
69.24
|
53.48
|
60.59
|
56.36
|
|||||||||||||||
As a Percent of Average Interest-Earning Assets (2)
|
||||||||||||||||||||
Interest income
|
3.37
|
%
|
3.22
|
%
|
3.27
|
%
|
3.57
|
%
|
3.62
|
%
|
||||||||||
Interest expense
|
0.19
|
0.20
|
0.22
|
0.45
|
0.31
|
|||||||||||||||
Net interest income
|
3.18
|
3.02
|
3.05
|
3.12
|
3.31
|
|||||||||||||||
Average Balances
|
||||||||||||||||||||
Loans
|
$
|
2,903,700
|
$
|
2,859,544
|
$
|
2,834,012
|
$
|
2,876,795
|
$
|
2,925,872
|
||||||||||
Securities available for sale
|
1,317,382
|
1,274,556
|
1,093,618
|
1,009,578
|
891,975
|
|||||||||||||||
Total earning assets
|
4,296,662
|
4,223,570
|
4,047,952
|
3,984,080
|
3,887,455
|
|||||||||||||||
Total assets
|
4,513,774
|
4,434,760
|
4,254,294
|
4,195,546
|
4,102,318
|
|||||||||||||||
Deposits
|
3,934,937
|
3,879,715
|
3,698,811
|
3,632,758
|
3,559,070
|
|||||||||||||||
Interest bearing liabilities
|
2,740,444
|
2,674,425
|
2,589,102
|
2,574,306
|
2,532,481
|
|||||||||||||||
Shareholders' equity
|
397,542
|
388,780
|
380,111
|
379,232
|
364,714
|
|||||||||||||||
End of Period
|
||||||||||||||||||||
Capital
|
||||||||||||||||||||
Tangible common equity ratio
|
8.02
|
%
|
8.21
|
%
|
8.08
|
%
|
8.56
|
%
|
8.23
|
%
|
||||||||||
Average equity to average assets
|
8.81
|
8.77
|
8.93
|
9.04
|
8.89
|
|||||||||||||||
Common shareholders' equity per share of common stock
|
$
|
18.76
|
$
|
18.30
|
$
|
17.79
|
$
|
17.82
|
$
|
17.05
|
||||||||||
Tangible common equity per share of common stock
|
17.27
|
16.82
|
16.30
|
16.33
|
15.55
|
|||||||||||||||
Total shares outstanding
|
21,321,092
|
21,632,912
|
21,773,734
|
21,853,800
|
21,885,368
|
|||||||||||||||
Selected Balances
|
||||||||||||||||||||
Loans
|
$
|
2,883,978
|
$
|
2,814,559
|
$
|
2,784,224
|
$
|
2,733,678
|
$
|
2,855,479
|
||||||||||
Securities available for sale
|
1,348,378
|
1,330,660
|
1,247,280
|
1,072,159
|
985,050
|
|||||||||||||||
Total earning assets
|
4,405,189
|
4,246,410
|
4,209,017
|
3,979,397
|
3,962,824
|
|||||||||||||||
Total assets
|
4,622,340
|
4,461,272
|
4,426,440
|
4,204,013
|
4,168,944
|
|||||||||||||||
Deposits
|
4,012,068
|
3,862,466
|
3,858,575
|
3,637,355
|
3,597,745
|
|||||||||||||||
Interest bearing liabilities
|
2,784,554
|
2,633,747
|
2,626,280
|
2,553,418
|
2,515,185
|
|||||||||||||||
Shareholders' equity
|
400,031
|
395,974
|
387,329
|
389,522
|
373,092
|
(1) |
Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology.
|
(2) |
Presented on a fully tax equivalent basis assuming a marginal tax rate of 21%.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net Interest Margin, Fully Taxable Equivalent ("FTE")
|
||||||||||||||||
Net interest income
|
$
|
33,803
|
$
|
31,966
|
$
|
95,480
|
$
|
92,619
|
||||||||
Add: taxable equivalent adjustment
|
492
|
258
|
1,374
|
602
|
||||||||||||
Net interest income - taxable equivalent
|
$
|
34,295
|
$
|
32,224
|
$
|
96,854
|
$
|
93,221
|
||||||||
Net interest margin (GAAP) (1)
|
3.13
|
%
|
3.28
|
%
|
3.04
|
%
|
3.40
|
%
|
||||||||
Net interest margin (FTE) (1)
|
3.18
|
%
|
3.31
|
%
|
3.09
|
%
|
3.42
|
%
|
(1) |
Annualized.
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
December 31,
2020
|
September 30,
2020 |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Common shareholders' equity
|
$
|
400,031
|
$
|
395,974
|
$
|
387,329
|
$
|
389,522
|
$
|
373,092
|
||||||||||
Less:
|
||||||||||||||||||||
Goodwill
|
28,300
|
28,300
|
28,300
|
28,300
|
28,300
|
|||||||||||||||
Other intangibles
|
3,579
|
3,821
|
4,063
|
4,306
|
4,561
|
|||||||||||||||
Tangible common equity
|
$
|
368,152
|
$
|
363,853
|
$
|
354,966
|
$
|
356,916
|
$
|
340,231
|
||||||||||
Total assets
|
$
|
4,622,340
|
$
|
4,461,272
|
$
|
4,426,440
|
$
|
4,204,013
|
$
|
4,168,944
|
||||||||||
Less:
|
||||||||||||||||||||
Goodwill
|
28,300
|
28,300
|
28,300
|
28,300
|
28,300
|
|||||||||||||||
Other intangibles
|
3,579
|
3,821
|
4,063
|
4,306
|
4,561
|
|||||||||||||||
Tangible assets
|
$
|
4,590,461
|
$
|
4,429,151
|
$
|
4,394,077
|
$
|
4,171,407
|
$
|
4,136,083
|
||||||||||
Common equity ratio
|
8.65
|
%
|
8.88
|
%
|
8.75
|
%
|
9.27
|
%
|
8.95
|
%
|
||||||||||
Tangible common equity ratio
|
8.02
|
%
|
8.21
|
%
|
8.08
|
%
|
8.56
|
%
|
8.23
|
%
|
||||||||||
Tangible Common Equity per Share of Common Stock:
|
||||||||||||||||||||
Common shareholders' equity
|
$
|
400,031
|
$
|
395,974
|
$
|
387,329
|
$
|
389,522
|
$
|
373,092
|
||||||||||
Tangible common equity
|
$
|
368,152
|
$
|
363,853
|
$
|
354,966
|
$
|
356,916
|
$
|
340,231
|
||||||||||
Shares of common stock outstanding (in thousands)
|
21,321
|
21,633
|
21,774
|
21,854
|
21,885
|
|||||||||||||||
Common shareholders' equity per share of common stock
|
$
|
18.76
|
$
|
18.30
|
$
|
17.79
|
$
|
17.82
|
$
|
17.05
|
||||||||||
Tangible common equity per share of common stock
|
$
|
17.27
|
$
|
16.82
|
$
|
16.30
|
$
|
16.33
|
$
|
15.55
|
Non-performing assets (1)
|
||||||||||||||||||||
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
December 31,
2020
|
September 30,
2020
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Non-accrual loans
|
$
|
5,917
|
$
|
5,531
|
$
|
7,548
|
$
|
8,312
|
$
|
10,481
|
||||||||||
Loans 90 days or more past due and still accruing interest
|
-
|
14
|
-
|
-
|
266
|
|||||||||||||||
Subtotal
|
5,917
|
5,545
|
7,548
|
8,312
|
10,747
|
|||||||||||||||
Less: Government guaranteed loans
|
327
|
427
|
459
|
439
|
510
|
|||||||||||||||
Total non-performing loans
|
5,590
|
5,118
|
7,089
|
7,873
|
10,237
|
|||||||||||||||
Other real estate and repossessed assets
|
224
|
296
|
346
|
766
|
1,487
|
|||||||||||||||
Total non-performing assets
|
$
|
5,814
|
$
|
5,414
|
$
|
7,435
|
$
|
8,639
|
$
|
11,724
|
||||||||||
As a percent of Portfolio Loans
|
||||||||||||||||||||
Non-performing loans
|
0.19
|
%
|
0.18
|
%
|
0.25
|
%
|
0.29
|
%
|
0.36
|
%
|
||||||||||
Allowance for credit losses
|
1.62
|
1.63
|
1.68
|
1.30
|
1.25
|
|||||||||||||||
Non-performing assets to total assets
|
0.13
|
0.12
|
0.17
|
0.21
|
0.28
|
|||||||||||||||
Allowance for credit losses as a percent of non-performing loans
|
837.19
|
897.34
|
659.54
|
450.01
|
349.43
|
(1) |
Excludes loans classified as "trouble debt restructured" that are not past due.
|
September 30, 2021
|
||||||||||||
Commercial
|
Retail (1)
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Performing TDR's
|
$
|
4,692
|
$
|
32,037
|
$
|
36,729
|
||||||
Non-performing TDR's (2)
|
-
|
1,198
|
(3)
|
|
1,198
|
|||||||
Total
|
$
|
4,692
|
$
|
33,235
|
$
|
37,927
|
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
|
(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.
|
Nine months ended
September 30,
|
||||||||||||||||
2021
|
2020
|
|||||||||||||||
Loans
|
Unfunded
Commitments |
Loans
|
Unfunded
Commitments |
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
35,429
|
$
|
1,805
|
$
|
26,148
|
$
|
1,542
|
||||||||
Additions (deductions)
|
||||||||||||||||
Impact of adoption of ASC 326
|
11,574
|
1,469
|
-
|
-
|
||||||||||||
Provision for credit losses (1)
|
(2,558
|
)
|
-
|
12,884
|
-
|
|||||||||||
Initial allowance on loans purchased with credit deterioration
|
134
|
-
|
-
|
-
|
||||||||||||
Recoveries credited to allowance
|
3,918
|
-
|
2,404
|
-
|
||||||||||||
Loans charged against the allowance
|
(1,698
|
)
|
-
|
(5,665
|
)
|
-
|
||||||||||
Additions included in non-interest expense
|
-
|
363
|
-
|
271
|
||||||||||||
Balance at end of period
|
$
|
46,799
|
$
|
3,637
|
$
|
35,771
|
$
|
1,813
|
||||||||
Net loans charged (recovered) against the allowance to average Portfolio Loans
|
(0.11
|
)%
|
0.16
|
%
|
(1) |
Beginning January 1, 2021, calculation is based on CECL methodology. Prior to January 1, 2021, calculation was based on the probable incurred loss methodology.
|
September 30,
2021
|
December 31,
2020
|
|||||||
(In thousands)
|
||||||||
Subordinated debt
|
$
|
39,338
|
$
|
39,281
|
||||
Subordinated debentures
|
39,575
|
39,524
|
||||||
Amount not qualifying as regulatory capital
|
(562
|
)
|
(505
|
)
|
||||
Amount qualifying as regulatory capital
|
78,351
|
78,300
|
||||||
Shareholders’ equity
|
||||||||
Common stock
|
326,390
|
339,353
|
||||||
Retained earnings
|
66,543
|
40,145
|
||||||
Accumulated other comprehensive income
|
7,098
|
10,024
|
||||||
Total shareholders’ equity
|
400,031
|
389,522
|
||||||
Total capitalization
|
$
|
478,382
|
$
|
467,822
|
Three months ended
|
Nine months ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
|||||||||||||||||
2021
|
2021
|
2020
|
2021
|
2020
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Interchange income
|
$
|
4,237
|
$
|
3,453
|
$
|
3,428
|
$
|
10,739
|
$
|
8,411
|
||||||||||
Service charges on deposit accounts
|
2,944
|
2,318
|
2,085
|
7,178
|
6,299
|
|||||||||||||||
Net gains on assets
|
||||||||||||||||||||
Mortgage loans
|
8,361
|
9,091
|
20,205
|
30,280
|
46,687
|
|||||||||||||||
Securities
|
5
|
-
|
-
|
1,421
|
253
|
|||||||||||||||
Mortgage loan servicing, net
|
1,271
|
(1,962
|
)
|
(644
|
)
|
4,476
|
(8,966
|
)
|
||||||||||||
Investment and insurance commissions
|
678
|
634
|
530
|
1,895
|
1,478
|
|||||||||||||||
Bank owned life insurance
|
145
|
127
|
215
|
411
|
750
|
|||||||||||||||
Other
|
2,054
|
1,110
|
1,192
|
4,472
|
3,470
|
|||||||||||||||
Total non-interest income
|
$
|
19,695
|
$
|
14,771
|
$
|
27,011
|
$
|
60,872
|
$
|
58,382
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Balance at beginning of period
|
$
|
22,431
|
$
|
13,773
|
$
|
16,904
|
$
|
19,171
|
||||||||
Originated servicing rights capitalized
|
2,529
|
4,017
|
8,637
|
10,260
|
||||||||||||
Change in fair value
|
(752
|
)
|
(2,387
|
)
|
(1,333
|
)
|
(14,028
|
)
|
||||||||
Balance at end of period
|
$
|
24,208
|
$
|
15,403
|
$
|
24,208
|
$
|
15,403
|
Three months ended
|
Nine months ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
|||||||||||||||||
2021
|
2021
|
2020
|
2021
|
2020
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Mortgage loans originated
|
$
|
453,752
|
$
|
473,742
|
$
|
536,502
|
$
|
1,436,497
|
$
|
1,318,206
|
||||||||||
Mortgage loans sold
|
279,235
|
306,789
|
417,092
|
963,442
|
1,058,400
|
|||||||||||||||
Net gains on mortgage loans
|
8,361
|
9,091
|
20,205
|
30,280
|
46,687
|
|||||||||||||||
Net gains as a percent of mortgage loans sold ("Loan Sales Margin")
|
2.99
|
%
|
2.96
|
%
|
4.84
|
%
|
3.14
|
%
|
4.41
|
%
|
||||||||||
Fair value adjustments included in the
|
||||||||||||||||||||
Loan Sales Margin
|
0.04
|
(0.08
|
)
|
0.50
|
(0.40
|
)
|
0.81
|
Three months ended
|
Nine months ended
|
|||||||||||||||||||
September 30,
|
June 30,
|
September 30,
|
September 30,
|
|||||||||||||||||
2021
|
2021
|
2020
|
2021
|
2020
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Compensation
|
$
|
11,507
|
$
|
11,136
|
$
|
10,294
|
$
|
32,764
|
$
|
30,665
|
||||||||||
Performance-based compensation
|
6,252
|
4,783
|
8,310
|
15,327
|
14,240
|
|||||||||||||||
Payroll taxes and employee benefits
|
3,900
|
3,964
|
3,350
|
11,973
|
9,837
|
|||||||||||||||
Compensation and employee benefits
|
21,659
|
19,883
|
21,954
|
60,064
|
54,742
|
|||||||||||||||
Data processing
|
3,022
|
2,576
|
2,215
|
7,972
|
6,160
|
|||||||||||||||
Occupancy, net
|
2,082
|
2,153
|
2,199
|
6,578
|
6,818
|
|||||||||||||||
Interchange expense
|
1,202
|
1,201
|
831
|
3,351
|
2,416
|
|||||||||||||||
Furniture, fixtures and equipment
|
1,075
|
1,034
|
999
|
3,112
|
3,125
|
|||||||||||||||
Loan and collection
|
735
|
859
|
768
|
2,353
|
2,329
|
|||||||||||||||
Communications
|
683
|
777
|
806
|
2,341
|
2,409
|
|||||||||||||||
Conversion related expenses
|
275
|
1,143
|
643
|
1,636
|
1,045
|
|||||||||||||||
Legal and professional
|
513
|
522
|
566
|
1,534
|
1,427
|
|||||||||||||||
Advertising
|
666
|
164
|
589
|
1,319
|
1,636
|
|||||||||||||||
FDIC deposit insurance
|
346
|
307
|
411
|
983
|
1,211
|
|||||||||||||||
Amortization of intangible assets
|
242
|
243
|
255
|
727
|
765
|
|||||||||||||||
Supplies
|
116
|
170
|
126
|
460
|
513
|
|||||||||||||||
Costs related to unfunded lending commitments
|
369
|
26
|
41
|
363
|
271
|
|||||||||||||||
Correspondent bank service fees
|
77
|
115
|
101
|
292
|
294
|
|||||||||||||||
Provision for loss reimbursement on sold loans
|
36
|
25
|
46
|
95
|
160
|
|||||||||||||||
Branch closure costs
|
-
|
-
|
-
|
-
|
417
|
|||||||||||||||
Net (gains) losses on other real estate and repossessed assets
|
(28
|
)
|
6
|
46
|
(202
|
)
|
146
|
|||||||||||||
Other
|
1,442
|
1,332
|
1,045
|
4,091
|
3,822
|
|||||||||||||||
Total non-interest expense
|
$
|
34,512
|
$
|
32,536
|
$
|
33,641
|
$
|
97,069
|
$
|
89,706
|
Three Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
|||||||||||||||||||||||
Average
Balance |
Interest
|
Rate (2)
|
Average
Balance |
Interest
|
Rate (2)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable loans
|
$
|
2,896,552
|
$
|
30,061
|
4.13
|
%
|
$
|
2,918,946
|
$
|
30,323
|
4.14
|
%
|
||||||||||||
Tax-exempt loans (1)
|
7,148
|
90
|
5.00
|
6,926
|
88
|
5.05
|
||||||||||||||||||
Taxable securities
|
951,445
|
3,922
|
1.65
|
733,977
|
3,450
|
1.88
|
||||||||||||||||||
Tax-exempt securities (1)
|
365,937
|
2,070
|
2.26
|
157,998
|
1,194
|
3.02
|
||||||||||||||||||
Interest bearing cash
|
57,153
|
23
|
0.16
|
51,181
|
14
|
0.11
|
||||||||||||||||||
Other investments
|
18,427
|
181
|
3.90
|
18,427
|
223
|
4.81
|
||||||||||||||||||
Interest Earning Assets
|
4,296,662
|
36,347
|
3.37
|
3,887,455
|
35,292
|
3.62
|
||||||||||||||||||
Cash and due from banks
|
57,151
|
52,676
|
||||||||||||||||||||||
Other assets, net
|
159,961
|
162,187
|
||||||||||||||||||||||
Total Assets
|
$
|
4,513,774
|
$
|
4,102,318
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest- bearing checking
|
$
|
2,317,142
|
695
|
0.12
|
$
|
1,922,971
|
686
|
0.14
|
||||||||||||||||
Time deposits
|
314,394
|
395
|
0.50
|
498,796
|
1,376
|
1.10
|
||||||||||||||||||
Other borrowings
|
108,908
|
962
|
3.50
|
110,714
|
1,006
|
3.61
|
||||||||||||||||||
Interest Bearing Liabilities
|
2,740,444
|
2,052
|
0.30
|
2,532,481
|
3,068
|
0.48
|
||||||||||||||||||
Non-interest bearing deposits
|
1,303,401
|
1,137,303
|
||||||||||||||||||||||
Other liabilities
|
72,387
|
67,820
|
||||||||||||||||||||||
Shareholders’ equity
|
397,542
|
364,714
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
4,513,774
|
$
|
4,102,318
|
||||||||||||||||||||
Net Interest Income
|
$
|
34,295
|
$
|
32,224
|
||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.18
|
%
|
3.31
|
%
|
(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
|
Nine Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
|||||||||||||||||||||||
Average
Balance |
Interest
|
Rate (2)
|
Average
Balance |
Interest
|
Rate (2)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Taxable loans
|
$
|
2,859,207
|
$
|
86,126
|
4.02
|
%
|
$
|
2,861,776
|
$
|
91,804
|
4.28
|
%
|
||||||||||||
Tax-exempt loans (1)
|
6,801
|
256
|
5.03
|
7,266
|
273
|
5.02
|
||||||||||||||||||
Taxable securities
|
881,465
|
10,374
|
1.57
|
579,704
|
9,356
|
2.15
|
||||||||||||||||||
Tax-exempt securities (1)
|
347,873
|
5,845
|
2.24
|
114,187
|
2,682
|
3.13
|
||||||||||||||||||
Interest bearing cash
|
76,533
|
74
|
0.13
|
52,265
|
160
|
0.41
|
||||||||||||||||||
Other investments
|
18,427
|
555
|
4.03
|
18,404
|
694
|
5.04
|
||||||||||||||||||
Interest Earning Assets
|
4,190,306
|
103,230
|
3.29
|
3,633,602
|
104,969
|
3.85
|
||||||||||||||||||
Cash and due from banks
|
55,883
|
49,345
|
||||||||||||||||||||||
Other assets, net
|
155,701
|
163,503
|
||||||||||||||||||||||
Total Assets
|
$
|
4,401,890
|
$
|
3,846,450
|
||||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Savings and interest- bearing checking
|
$
|
2,239,887
|
2,059
|
0.12
|
$
|
1,764,933
|
3,121
|
0.24
|
||||||||||||||||
Time deposits
|
319,792
|
1,429
|
0.60
|
529,248
|
6,029
|
1.52
|
||||||||||||||||||
Other borrowings
|
108,866
|
2,888
|
3.55
|
121,195
|
2,598
|
2.86
|
||||||||||||||||||
Interest Bearing Liabilities
|
2,668,545
|
6,376
|
0.32
|
2,415,376
|
11,748
|
0.65
|
||||||||||||||||||
Non-interest bearing deposits
|
1,279,006
|
1,016,286
|
||||||||||||||||||||||
Other liabilities
|
65,464
|
62,984
|
||||||||||||||||||||||
Shareholders’ equity
|
388,875
|
351,804
|
||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$
|
4,401,890
|
$
|
3,846,450
|
||||||||||||||||||||
Net Interest Income
|
$
|
96,854
|
$
|
93,221
|
||||||||||||||||||||
Net Interest Income as a Percent of Average Interest Earning Assets
|
3.09
|
%
|
3.42
|
%
|
(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
|
Total Commercial Loans
|
||||||||||||||||||||
Watch Credits
|
Percent of
Loan
|
|||||||||||||||||||
Loan Category
|
All Loans
|
Performing
|
Non-accrual
|
Total
|
Category in
Watch Credit
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Land
|
$
|
14,751
|
$
|
73
|
$
|
-
|
$
|
73
|
0.5
|
%
|
||||||||||
Land Development
|
11,912
|
33
|
-
|
33
|
0.3
|
|||||||||||||||
Construction
|
86,284
|
-
|
-
|
-
|
0.0
|
|||||||||||||||
Income Producing
|
376,010
|
1,964
|
-
|
1,964
|
0.5
|
|||||||||||||||
Owner Occupied
|
350,819
|
19,997
|
-
|
19,997
|
5.7
|
|||||||||||||||
Total Commercial Real Estate Loans
|
$
|
839,776
|
$
|
22,067
|
-
|
$
|
22,067
|
2.6
|
||||||||||||
Other Commercial Loans
|
$
|
383,026
|
$
|
4,488
|
189
|
$
|
4,677
|
1.2
|
||||||||||||
Total non-performing commercial loans
|
$
|
189
|
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
|
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