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Amalgamated Bank Reports First Quarter 2019 Financial Results

NEW YORK, April 30, 2019 (GLOBE NEWSWIRE) -- Amalgamated Bank (AMAL) (“Amalgamated”) today announced financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Highlights

  • Net income of $10.8 million, or $0.33 per diluted share, compared to $7.7 million, or $0.27 per diluted share, for the first quarter of 2018

  • Core earnings (non-GAAP) of $10.7 million, or $0.33 per diluted share, compared to $7.9 million, or $0.28 per diluted share, for the first quarter of 2018

  • Deposit growth of $1.8 million, or 0.2% annualized, compared to a balance of $4.1 billion on December 31, 2018

    • Deposits at December 31, 2018 included $326.7 million of short term deposits that exited the bank on January 2, 2019, resulting in beginning year 2019 deposits of $3.8 billion

    • On an adjusted basis, excluding these short-term deposits we had deposit growth of $328.5 million, or 34.8% annualized, compared to $3.8 billion on January 2, 2019

  • Loan growth of $56.4 million, or 7.0% annualized, compared to a balance of $3.2 billion on December 31, 2018

  • Cost of deposits was 0.31%, compared to 0.27% for the fourth quarter of 2018 and 0.26% for the first quarter of 2018

  • Net interest margin was 3.65%, compared to 3.57% for the fourth quarter of 2018 and 3.43% for the first quarter of 2018

  • Tier 1 Leverage, Common Equity Tier 1, and Total Risk-Based capital ratios were 8.90%, 13.31%, and 14.33%, respectively, at March 31, 2019

  • Total nonperforming assets were $56.6 million or 1.15% of total assets as of March 31, 2019, compared to $59.3 million or 1.27% of total assets at December 31, 2018 and $56.0 million, or 1.35% of total assets at March 31, 2018

Keith Mestrich, President and Chief Executive Officer of Amalgamated Bank, commented, “I am quite pleased with our first quarter results as they clearly demonstrate the attractive position that Amalgamated Bank holds as we work to service the needs of values-based institutions and further our reputation as ‘America’s socially responsible bank.’ Signs of our continued success can be seen in our deposit franchise which experienced 34.8% adjusted annualized organic growth in the first quarter. This included an $89.0 million increase in political deposits as well as vibrant deposit growth across our customer categories of unions and their funds, non-profits and philanthropies. Importantly, our cost of funds remained relatively stable at 31 basis points and contributed to our strong profitability as our net interest margin increased to 3.65% in the first quarter of 2019 from 3.43% in the first quarter of 2018. Lastly, while our loan growth was modestly below our expectations, our acquisition of New Resource Bank (“NRB”) allowed us to continue to make very good progress expanding our loan origination capabilities into sustainable industries. We have seen a recovery in the purchased Commercial and Industrial (“C&I”) credit market and decided to sell a significant amount of that portfolio and have commitments to reduce that portfolio by approximately $127 million in the second quarter of 2019."

Results of Operations, Quarter Ended March 31, 2019

Net income for the first quarter of 2019 was $10.8 million, or $0.33 per diluted share, compared to $16.0 million, or $0.49 per diluted share, for the fourth quarter of 2018 and a net income of $7.7 million, or $0.27 per diluted share, for the first quarter of 2018. The $3.2 million increase in net income for the first quarter of 2019, compared to the first quarter of 2018, was primarily due to an $8.0 million increase in net interest income, partially offset by a $2.7 million increase in non-interest expense, a $1.3 million increase in our provision for loan losses, and a $1.2 million increase in our provision for income taxes.

Core earnings (non-GAAP) for the first quarter of 2019 were $10.7 million, or $0.33 per diluted share, compared to $9.7 million or $0.30 per diluted share, for the fourth quarter of 2018 and $7.9 million, or $0.28 per diluted share, for the first quarter of 2018. Core earnings for the fourth quarter of 2018 excluded $1.6 million of expense related to the NRB acquisition, a deferred tax asset realization of approximately $7.6 million, and other adjustments including the tax effect of such adjustments.

Net interest income was $40.8 million for the first quarter of 2019, compared to $40.2 million for the fourth quarter of 2018 and $32.8 million for the first quarter of 2018. The year-over-year increase was primarily attributable to an increase in average net loans of $375.3 million, an increase in the yield on average loans of 29 basis points, an increase in average securities of $275.6 million and an increase in the yield on average securities and FHLB stock of 54 basis points. These increases were partially offset by an increase in average interest bearing deposits of $441.8 million, an increase in the rate paid on interest bearing deposits of seven basis points, and an increase in the rate paid on FHLB borrowings of 101 basis points.

Net interest margin was 3.65% for the first quarter of 2019, an increase of eight basis points from 3.57% in the fourth quarter of 2018 and an increase of 22 basis points from 3.43% in the first quarter of 2018. The net interest margin in the fourth quarter of 2018 was also impacted by a one-time adjustment to write-off $0.8 million of accrued interest receivable from the fourth quarter of 2017. Without this adjustment, our net interest margin increased by one basis point from the fourth quarter of 2018.

Provisions for loan losses totaled an expense of $2.2 million in the first quarter of 2019 compared to $0.9 million in the fourth quarter of 2018 and $0.9 million for the first quarter of 2018. The provision expense in the first quarter of 2019 was primarily driven by an increase in our allowance for loan losses on two leveraged loans and increasing historical loss factors related to the charge-off activity. This increase in provision was partially offset by a release of an off-balance sheet provision of $0.6 million, which is reported through non-interest expense.

Non-interest income was $7.4 million in the first quarter of 2019 compared to $7.6 million in the fourth quarter of 2018, and $7.0 million in the first quarter of 2018. The $0.4 million, or 5.7%, increase in the first quarter of 2019, compared to the like period in 2018, was primarily due to higher gains on the sale of investment securities of $0.3 million in the first quarter of 2019 compared to a loss of $0.1 million in the first quarter of 2018 and modest increases in Trust Department fees, service charges on deposit accounts, and other income. These increases were partially offset by higher losses on other real estate owned resulting from the liquidation of residential real estate acquired as the result of foreclosure on delinquent residential mortgages.

Non-interest expense for the first quarter of 2019 was $31.4 million, a decrease of $3.6 million from $35.0 million in the fourth quarter of 2018, and an increase of $2.7 million from $28.8 million in the first quarter of 2018. The increase compared to the first quarter of 2018 was primarily due to a $2.1 million increase in compensation and employee benefits, a $0.4 million increase in data processing, a $0.4 million expense from the addition of amortization of the core deposit intangible from the NRB acquisition, partially offset by a $0.2 million reduction in other expenses driven primarily by the release of $0.6 million in off-balance sheet provision in the first quarter of 2019.

We had a provision for income tax expense of $3.7 million for the first quarter of 2019, compared to a credit of $4.1 million for fourth quarter of 2018 and provision of $2.5 million for the first quarter of 2018. Our effective tax rate for the first quarter of 2019 was 25.7%, compared to 24.7% for the first quarter of 2018.

Financial Condition

Total assets were $4.9 billion at March 31, 2019, compared to $4.7 billion at December 31, 2018. The increase of $229.0 million was driven primarily by a $72.7 million increase in investment securities, a $51.3 million increase in cash and cash equivalents, a $56.4 million increase in loans receivable, net and the addition of a $53.3 million “Right of use” asset as the result of adopting ASC 842 – Leases in the first quarter of 2019.

Total loans at March 31, 2019 were $3.3 billion, an increase of $56.4 million, or 7.0% annualized, compared to December 31, 2018, and an increase of $385.1 million, or 13.4%, as compared to $2.9 billion as of March 31, 2018. Loan growth in the first quarter of 2019 was primarily driven by a $93.3 million increase in residential first liens and property assessed clean energy (“PACE”) loans and offset by a strategic reduction in indirect C&I loans of $29.3 million, and a $12.2 million reduction in commercial real estate loans.

Deposits at March 31, 2019 were $4.1 billion, an increase of $1.8 million, or 0.2% annualized, as compared to $4.1 billion as of December 31, 2018, and an increase of $771.5 million, or 23.1%, compared to $3.3 billion as of March 31, 2018. December 31, 2018 deposits included $326.7 million of short term deposits that exited the bank on January 2, 2019, resulting in beginning year 2019 deposits of $3.8 billion. On an adjusted basis, excluding these short-term deposits, deposits increased $328.5 million or 34.8% annualized for the quarter. Deposits held by politically-active customers, such as campaigns, PACs and state and national party committees were $271.0 million as of March 31, 2019, an increase of $89.0 million compared to $181.9 million as of December 31, 2018, and a decrease of $50.4 million compared to $321.4 million as of March 31, 2018. Noninterest-bearing deposits represented 40.8% of average deposits and 41.6% of ending deposits for the three months ended March 31, 2019, contributing to an average cost of deposits of 0.31% in the first quarter of 2019, a four basis point increase from the linked quarter.

Nonperforming assets totaled $56.6 million, or 1.15% of period end total assets at March 31, 2019, a decrease of $2.7 million, compared with $59.3 million, or 1.27% of period end total assets at December 31, 2018. The decrease in nonperforming assets at March 31, 2019 compared to the year-ended December 31, 2018 was primarily driven by an $8.4 million charge-off related to one C&I loan partially offset by an increase of $7.2 million in loans 90 days past due and accruing related to delays in renewing loans from one borrower.

The allowance for loan losses decreased $5.8 million to $31.4 million at March 31, 2019 from $37.2 million at December 31, 2018, primarily due to the charge-off of one C&I loan that had a specific reserve of $8.1 million in the first quarter of 2019, partially offset by increases on the allowance for classified and criticized C&I loans. At March 31, 2019, we had $48.1 million of impaired loans for which a specific allowance of $1.5 million was made, compared to $58.3 million of impaired loans at December 31, 2018 for which a specific allowance of $9.6 million was made. The ratio of allowance to total loans was 0.95% at March 31, 2019 and 1.15% at December 31, 2018.

Capital

As of March 31, 2019, our Tier 1 Leverage Capital Ratio was 8.90%, Common Equity Tier 1 Capital Ratio was 13.31%, and Total Risk-Based Capital Ratio was 14.33%, compared to 8.88%, 13.22%, and 14.46%, respectively, as of December 31, 2018. As of March 31, 2018, our Tier 1 Leverage, Common Equity Tier 1, and Total Risk-Based capital ratios were 8.60%, 11.36%, and 12.83%, respectively. Stockholders’ equity at March 31, 2019 was $455.5 million, compared to $439.4 million at December 31, 2018.

Our tangible book value per share was $13.68 as of March 31, 2019 compared to $13.16 as of December 31, 2018 and $12.11 as of March 31, 2018.

Conference Call

As previously announced, Amalgamated Bank will host a conference call to discuss its first quarter 2019 results today, April 30, 2019 at 10:00am (Eastern Time). The conference call can be accessed by dialing 1-877-407-9716 (domestic) or 1-201-493-6779 (international) and asking for the Amalgamated Bank First Quarter 2019 Earnings Call. A telephonic replay will be available approximately three hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers 1-412-317-6671 and providing the access code 13689479. The telephonic replay will be available until 11:59 pm (Eastern Time) on May 7, 2019.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of our website at http://ir.amalgamatedbank.com/. The online replay will remain available for a limited time beginning immediately following the call.

The presentation materials for the call can be accessed on the investor relations section of our website at http://ir.amalgamatedbank.com/.

About Amalgamated Bank

Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of 14 branches in New York City, Washington D.C., and San Francisco, and a presence in Pasadena, CA and Boulder, CO. Amalgamated was formed in 1923 as Amalgamated Bank of New York by the Amalgamated Clothing Workers of America, one of the country's oldest labor unions. Amalgamated provides commercial banking and trust services nationally and offers a full range of products and services to both commercial and retail customers. Amalgamated is a proud member of the Global Alliance for Banking on Values and is a certified B Corporation®. As of March 31, 2019, our total assets were $4.9 billion, total net loans were $3.3 billion, and total deposits were $4.1 billion. Additionally, as of March 31, 2019, the trust business held $30.1 billion in assets under custody and $11.8 billion in assets under management.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures including, without limitation, “Core operating revenue,” “Core non-interest expense,” “Core earnings,” “Tangible common equity,” “Tangible book value,” “Core return on average assets,” “Core return on average tangible common equity,” and “Core efficiency ratio.”

Our management utilizes this information to compare our operating performance for 2019 versus certain periods in 2018 and to internally prepared projections. We believe these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of our operating performance. In addition, because intangible assets such as goodwill and other discrete items unrelated to our core business that are excluded vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our results to those of other companies.

The presentation of non-GAAP financial information, however, is not intended to be considered in isolation or as a substitute for GAAP financial measures. We strongly encourage readers to review the GAAP financial measures included in this release and not to place undue reliance upon any single financial measure. In addition, because non-GAAP financial measures are not standardized, it may not be possible to compare the non-GAAP financial measures presented in this release with other companies’ non-GAAP financial measures having the same or similar names. Reconciliations of non-GAAP financial disclosures to comparable GAAP measures found in this release are set forth in the final pages of this release and also may be viewed on our website, amalgamatedbank.com.

Terminology

Certain terms used in this release are defined as follows:

“Core operating revenue” is defined as total net interest income plus non-interest income excluding gains and losses on sales of securities and excluding other than temporary impairment charges (“OTTI”). We believe the most directly comparable GAAP financial measure is the total of net interest income and non-interest income.

“Core non-interest expense” is defined as total non-interest expense excluding costs related to bank acquisitions, our initial public offering and follow on costs, or restructuring/severance costs. We believe the most directly comparable GAAP financial measure is total non-interest expense.

“Core earnings” is defined as net income after tax excluding gains and losses on sales of securities and excluding OTTI, costs related to bank acquisitions, initial public offering and follow on costs, restructuring/severance, taxes on notable pre-tax items, deferred tax asset realization, and changes in tax laws. We believe the most directly comparable GAAP financial measure is net income.

“Tangible common equity” and “Tangible book value” and are defined as stockholders’ equity excluding, as applicable, minority interests, preferred stock, goodwill and core deposit intangibles. We believe that the most directly comparable GAAP financial measure is total stockholders’ equity.

“Core return on average assets” is defined as “Core earnings” divided by average total assets. We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average assets calculated by dividing net income by average total assets.

“Core return on average tangible common equity” is defined as “Core earnings” divided by “Average tangible common equity.” We believe the most directly comparable performance ratio derived from GAAP financial measures is return on average equity calculated by dividing net income by average total stockholders’ equity.

“Core efficiency ratio” is defined as “Core non-interest expense” divided by “Core operating revenue.” We believe the most directly comparable performance ratio derived from GAAP financial measures is an efficiency ratio calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income.

Forward Looking Statements

This press release may contain statements that are not historical in nature that are intended to be, and are hereby identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act, Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified by forward-looking language such as “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue” and “intend,” as well as other similar words and expressions of the future, and include, without limitation, our intentions to sell a portion of our indirect C&I portfolio. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, any or all of which could cause actual results to differ materially from the results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to risk associated with the sale of our C&I portfolio that may result in that sale failing to close. Additional factors which could affect any forward looking statements can be found in Amalgamated’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the FDIC and available on the FDIC's website at https://efr.fdic.gov/fcxweb/efr/index.html. Amalgamated Bank disclaims any obligation to update or revise any forward-looking statements contained in this release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

Media Contact:
Kaye Verville
The Levinson Group
kaye@mollylevinson.com
202-244-1785

Investor Contact:
Jamie Lillis
Solebury Trout
shareholderrelations@amalgamatedbank.com
800-895-4172


Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except for per share amount)

Three Months Ended

March 31,

December 31,

March 31,

2019

2018

2018

INTEREST AND DIVIDEND INCOME

Loans

$

35,296

$

34,620

$

29,173

Securities

9,875

9,251

6,243

Federal Home Loan Bank of New York stock

310

239

391

Interest-bearing deposits in banks

293

350

436

Total interest and dividend income

45,774

44,460

36,243

INTEREST EXPENSE

Deposits

2,946

2,713

2,089

Borrowed funds

2,055

1,542

1,353

Total interest expense

5,001

4,255

3,442

NET INTEREST INCOME

40,773

40,205

32,801

Provision for (recovery of) loan losses

2,186

864

851

Net interest income after provision for loan losses

38,587

39,341

31,950

NON-INTEREST INCOME

Trust Department fees

4,721

4,807

4,649

Service charges on deposit accounts

1,871

2,187

1,779

Bank-owned life insurance

420

430

404

Gain (loss) on sale of investment securities available for sale, net

292

(139

)

(101

)

Gain (loss) on other real estate owned, net

(249

)

19

(27

)

Other

362

251

311

Total non-interest income

7,417

7,555

7,015

NON-INTEREST EXPENSE

Compensation and employee benefits, net

17,430

18,166

15,376

Occupancy and depreciation

4,271

4,247

4,002

Professional fees

3,165

2,825

3,193

FDIC deposit insurance

491

406

554

Data processing

2,749

3,986

2,336

Office maintenance and depreciation

887

974

947

Amortization of intangible assets

389

389

-

Advertising and promotion

622

819

646

Other

1,444

3,213

1,734

Total non-interest expense

31,448

35,025

28,788

Income before income taxes

14,556

11,871

10,177

Income tax expense (benefit)

3,743

(4,113

)

2,516

Net income

10,813

15,984

7,661

Net income attributable to noncontrolling interests

-

-

-

Net income attributable to Amalgamated Bank and subsidiaries

$

10,813

$

15,984

$

7,661

Earnings per common share - basic (1)

$

0.34

$

0.50

$

0.27

Earnings per common share - diluted (1)

$

0.33

$

0.49

$

0.27

(1) effected for stock split that occurred on July 27, 2018


Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands)

March 31,

December 31,

2019

2018

Assets

(Unaudited)

Cash and due from banks

$

6,691

$

10,510

Interest-bearing deposits in banks

125,463

70,335

Total cash and cash equivalents

132,154

80,845

Securities:

Available for sale, at fair value (amortized cost of $1,246,843 and $1,188,710, respectively)

1,242,721

1,175,170

Held-to-maturity (fair value of $9,481 and $4,105, respectively)

9,317

4,081

Loans receivable, net of deferred loan origination costs (fees)

3,298,407

3,247,831

Allowance for loan losses

(31,392

)

(37,195

)

Loans receivable, net

3,267,015

3,210,636

Accrued interest and dividends receivable

14,872

14,387

Premises and equipment, net

20,743

21,654

Bank-owned life insurance

79,485

79,149

Right-of-use lease asset

53,306

-

Deferred tax asset

35,017

39,697

Goodwill and other intangible assets

20,650

21,039

Other assets

39,199

38,831

Total assets

$

4,914,479

$

4,685,489

Liabilities

Deposits

$

4,107,075

$

4,105,306

Borrowed funds

253,775

92,875

Operating leases

68,404

-

Other liabilities

29,746

47,937

Total liabilities

4,459,000

4,246,118

Commitments and contingencies

-

-

Stockholders’ equity

Common stock, par value $.01 per share (70,000,000 shares authorized; 31,771,585

shares issued and outstanding)

318

318

Additional paid-in capital

309,033

308,678

Retained earnings

151,138

142,231

Accumulated other comprehensive loss, net of income taxes

(5,144

)

(11,990

)

Total Amalgamated Bank stockholders' equity

455,345

439,237

Noncontrolling interests

134

134

Total stockholders' equity

455,479

439,371

Total liabilities and stockholders’ equity

$

4,914,479

$

4,685,489


Select Financial Data

As of and for the Three

Months Ended

March 31,

December 31,

March 31,

2019

2018

2018

Selected Financial Ratios and Other Data (1)

Earnings per share

Basic

$

0.34

$

0.50

$

0.27

Diluted

0.33

0.49

0.27

Core Earnings per share (non-GAAP)

Basic

$

0.34

$

0.30

$

0.28

Diluted

0.33

0.30

0.28

Book value per common share

14.33

13.82

12.35

(excluding minority interest)

Tangible book value per share (non-GAAP)

13.68

13.16

12.11

Common shares outstanding

31,771,585

31,771,585

28,060,984

Weighted average common shares

31,771,585

31,771,585

28,060,984

outstanding, basic

Weighted average common shares

32,321,585

32,460,024

28,060,984

outstanding, diluted

(1) Effected for stock split that occurred on July 27, 2018


Select Financial Data

As of and for the Three

Months Ended

March 31,

December 31,

March 31,

2019

2018

2018

Selected Performance Metrics:

Return on average assets

0.92%

1.35%

0.77%

Core return on average assets (non-GAAP)

0.90%

0.82%

0.79%

Return on average equity

9.82%

14.88%

8.96%

Core return on average tangible common equity (non-GAAP)

10.18%

9.50%

9.46%

Loan yield

4.44%

4.32%

4.15%

Securities yield

3.37%

3.14%

2.83%

Deposit cost

0.31%

0.27%

0.26%

Net interest margin

3.65%

3.57%

3.43%

Efficiency ratio

65.26%

73.33%

71.67%

Core efficiency ratio (non-GAAP)

65.41%

69.44%

71.48%

Asset Quality Ratios:

Nonaccrual loans to total loans

0.45%

0.74%

0.71%

Nonperforming assets to total assets

1.15%

1.27%

1.35%

Allowance for loan losses to nonaccrual loans

212%

156%

180%

Allowance for loan losses to total loans

0.95%

1.15%

1.26%

Net charge-offs (recoveries) to average loans

1.00%

0.01%

(0.02%)

Capital Ratios:

Tier 1 leverage capital ratio

8.90%

8.88%

8.60%

Tier 1 risk-based capital ratio

13.31%

13.22%

11.58%

Total risk-based capital ratio

14.33%

14.46%

12.83%

Common equity tier 1 capital ratio

13.31%

13.22%

11.36%


Loan Portfolio Composition

(In thousands)

At March 31, 2019

At December 31, 2018

At March 31, 2018

Amount

% of total loans

Amount

% of total loans

Amount

% of total loans

Commercial portfolio:

Commercial and industrial

$

527,200

16.0

%

$

556,537

17.2

%

$

666,827

22.9

%

Multifamily mortgages

921,588

28.0

%

916,337

28.3

%

892,773

30.6

%

Commercial real estate mortgages

428,534

13.0

%

440,704

13.6

%

338,064

11.6

%

Construction and land development mortgages

45,734

1.4

%

46,178

1.4

%

11,582

0.4

%

Total commercial portfolio

1,923,056

58.4

%

1,959,756

60.5

%

1,909,246

65.5

%

Retail portfolio:

Residential 1-4 family (1st mortgage)

1,176,551

35.8

%

1,083,204

33.4

%

890,027

30.5

%

Residential 1-4 family (2nd mortgage)

26,906

0.8

%

27,206

0.8

%

30,360

1.0

%

Consumer and other

164,412

5.0

%

171,184

5.3

%

88,040

3.0

%

Total retail

1,367,869

41.6

%

1,281,594

39.5

%

1,008,427

34.5

%

Total loans

3,290,925

100.0

%

3,241,350

100.0

%

2,917,673

100.0

%

Net deferred loan origination fees (costs)

7,482

6,481

1,618

Allowance for loan losses

(31,392

)

(37,195

)

(37,382

)

Total loans, net

$

3,267,015

$

3,210,636

$

2,881,909


Net Interest Income Analysis

Three Months Ended

Three Months Ended

Three Months Ended

March 31, 2019

December 31, 2018

March 31, 2018

(In thousands)

Average
Balance

Income / Expense

Yield /
Rate

Average
Balance

Income / Expense

Yield /
Rate

Average
Balance

Income / Expense

Yield /
Rate

null

Interest earning assets:

Interest-bearing deposits in banks

$

73,296

$

293

1.62

%

$

85,789

$

350

1.62

%

$

75,078

$

436

2.35

%

Securities and FHLB stock

1,225,700

10,185

3.37

%

1,198,477

9,490

3.14

%

950,143

6,633

2.83

%

Loans held for sale

2,818

-

-

-

-

-

-

-

-

Total loans, net (1)

3,224,604

35,296

4.44

%

3,180,168

34,620

4.32

%

2,849,310

29,174

4.15

%

Total interest earning assets

4,526,418

45,774

4.10

%

4,464,434

44,460

3.95

%

3,874,531

36,243

3.79

%

Non-interest earning assets:

Cash and due from banks

9,988

12,480

6,906

Other assets

251,468

203,321

173,339

Total assets

$

4,787,874

$

4,680,235

$

4,054,776

Interest bearing liabilities:

Savings, NOW and money market deposits

1,877,349

$

1,867

0.40

%

1,839,662

$

1,731

0.37

%

1,489,690

$

1,301

0.35

%

Time deposits

440,428

1,079

0.99

%

444,131

982

0.88

%

386,256

788

0.83

%

Total deposits

2,317,777

2,946

0.52

%

2,283,793

2,713

0.47

%

1,875,946

2,089

0.45

%

Federal Home Loan Bank advances

328,476

2,046

2.53

%

258,505

1,542

2.37

%

360,101

1,353

1.52

%

Other Borrowings

1,333

9

2.64

%

-

-

0.00

%

-

-

0.00

%

Total interest bearing liabilities

2,647,586

5,001

0.77

%

2,542,298

4,255

0.66

%

2,236,047

3,442

0.62

%

Non interest bearing liabilities:

Demand and transaction deposits

1,598,637

1,669,670

1,423,451

Other liabilities

95,187

41,976

48,352

Total liabilities

4,341,410

4,253,944

3,707,850

Stockholders' equity

446,464

426,291

346,926

Total liabiliites and stockholders' equity

$

4,787,874

$

4,680,235

$

4,054,776

Net interest income / interest rate spread

40,773

3.34

%

40,205

3.29

%

32,801

3.17

%

Net interest earning assets / net interest margin

$

1,878,832

3.65

%

$

1,922,136

3.57

%

$

1,638,484

3.43

%

(1) Amounts are net of deferred origination costs / (fees) and the allowance for loan losses


Deposit Portfolio Composition

Three Months Ended

(in thousands)

March 31, 2019

December 31, 2018

March 31, 2018

Non-interest bearing demand deposit accounts

$

1,709,921

$

1,565,503

$

1,455,428

NOW accounts

223,195

230,859

204,936

Savings accounts

342,713

335,254

309,751

Money market deposit accounts

1,377,130

1,548,699

984,092

Time deposits

439,135

424,991

381,358

Brokered CD

14,981

-

-

$

4,107,075

$

4,105,306

$

3,335,565


Three Months Ended

(in thousands)

March 31, 2019

December 31, 2018

March 31, 2018

Average
Amount

Weighted
Average Rate

Average
Amount

Weighted
Average Rate

Average
Amount

Weighted
Average Rate

Non-interest bearing demand deposit accounts

$

1,598,637

0.00

%

$

1,669,670

0.00

%

$

1,423,451

0.00

%

NOW accounts

224,686

0.45

%

206,107

0.45

%

206,625

0.29

%

Savings accounts

337,477

0.21

%

329,192

0.19

%

305,192

0.14

%

Money market deposit accounts

1,315,186

0.44

%

1,304,363

0.41

%

977,874

0.43

%

Time deposits

432,771

0.96

%

444,131

0.88

%

386,256

0.83

%

Brokered CD

7,657

2.93

%

-

-

-

-

$

3,916,414

0.31

%

$

3,953,463

0.27

%

$

3,299,398

0.26

%


Asset Quality

March 31,

December 31,

March 31,

(In thousands)

2019

2018

2018

Loans 90 days past due and accruing

$

7,157

$

-

$

488

Nonaccrual loans excluding held for sale loans and restructured loans

9,351

8,379

4,785

Nonaccrual loans held for sale

-

-

635

Restructured loans - nonaccrual

5,455

15,482

15,962

Restructured loans - accruing

33,441

34,457

32,891

Other real estate owned

1,057

844

1,098

Impaired securities

90

93

113

Total nonperforming assets

$

56,551

$

59,255

$

55,972

Nonaccrual loans:

Commercial and industrial

$

3,734

$

12,153

$

12,408

Multifamily

-

-

-

Commercial real estate

4,019

4,112

-

Construction and land development

-

-

-

Total commercial portfolio

7,753

16,265

12,408

Residential 1-4 family 1st mortgages

5,769

6,287

7,684

Residential 1-4 family 2nd mortgages

1,078

1,299

627

Consumer and other

206

10

28

Total retail portfolio

7,053

7,596

8,339

Total nonaccrual loans

$

14,806

$

23,861

$

20,747

Nonperforming assets to total assets

1.15

%

1.27

%

1.35

%

Nonaccrual assets to total assets

0.32

%

0.53

%

0.54

%

Nonaccrual loans to total loans

0.45

%

0.74

%

0.71

%

Allowance for loan losses to nonaccrual loans

212

%

156

%

180

%

Troubled debt restructurings:

TDRs included in nonaccrual loans

$

5,455

$

15,482

$

15,962

TDRs in compliance with modified terms

$

33,441

$

34,457

$

32,891


Reconciliation of GAAP to Non-GAAP Financial Measures
The information provided below presents a reconciliation of each of our non-GAAP financial measures to the most directly comparable GAAP financial measure.

For the Three

Months Ended

(in thousands)

March 31,

December 31,

March 31,

2019

2018

2018

Core operating revenue

Net interest income (GAAP)

$

40,773

$

40,205

$

32,801

Non interest income (GAAP)

7,417

7,555

7,015

Less: Securities loss, net and OTTI

(293

)

129

103

Core operating revenue (non-GAAP)

$

47,897

$

47,889

$

39,919

Core non-interest expenses

Non-interest expense (GAAP)

$

31,448

$

35,025

$

28,788

Less: Acquisition cost(1)

-

(1,633

)

(275

)

Less: Initial public offering and follow on cost (2)

-

120

-

Less: Severance (3)

(117

)

(257

)

23

Core non-interest expense (non-GAAP)

$

31,331

$

33,255

$

28,536

Core Earnings

Net Income (GAAP)

$

10,813

$

15,984

$

7,661

Add: Securities loss, net and OTTI

(293

)

129

103

Add: Acquisition cost(1)

-

1,633

275

Add: Initial public offering and follow on cost (2)

-

(120

)

-

Add: Severance (3)

117

257

(23

)

Less: Tax on notable items

45

(563

)

(88

)

Less: Deferred tax asset realization

-

(7,632

)

-

Core earnings (non-GAAP)

$

10,682

$

9,688

$

7,929

Tangible common equity

Stockholders Equity (GAAP)

$

455,480

$

439,371

$

346,586

Less: Minority Interest (GAAP)

(134

)

(134

)

(134

)

Less: Preferred Stock (GAAP)

-

-

(6,700

)

Less: Goodwill (GAAP)

(12,936

)

(12,936

)

-

Less: Core deposit intangible (GAAP)

(7,713

)

(8,102

)

-

Tangible common equity (non-GAAP)

$

434,697

$

418,199

$

339,752

Average tangible common equity

Average Stockholders Equity (GAAP)

$

446,464

$

426,290

$

346,927

Less: Minority Interest (GAAP)

(134

)

(134

)

(134

)

Less: Preferred Stock (GAAP)

-

-

(6,700

)

Less: Goodwill (GAAP)

(12,936

)

(12,936

)

-

Less: Core deposit intangible (GAAP)

(7,903

)

(8,291

)

-

Average tangible common equity (non-GAAP)

$

425,491

$

404,929

$

340,093

Core return on average assets

Core earnings (numerator) (non-GAAP)

10,682

9,688

7,929

Divided: Total average assets (denominator) (GAAP)

4,787,874

$

4,680,235

4,054,776

Core return on average assets (non-GAAP)

0.90

%

0.82

%

0.79

%

Core return on average tangible common equity

Core earnings (numerator) (non-GAAP)

10,682

9,688

7,929

Divided: Total average tangible common equity (denominator) (non-GAAP)

425,491

404,929

340,093

Core return on average tangible common equity (non-GAAP)

10.18

%

9.50

%

9.46

%

Core efficiency ratio

Core non-interest expense (numerator) (non-GAAP)

31,331

33,255

28,536

Core operating revenue (denominator) (non-GAAP)

47,897

47,889

39,919

Core efficiency ratio (non-GAAP)

65.41

%

69.44

%

71.48

%

(1) Expense related to New Resource Bank acquisition

(2) Costs related to first follow-on in November 2018

(3) Salary and COBRA reimbursement expense for positions eliminated