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Amalgamated Bank Reports Fourth Quarter and Full Year 2019 Financial Results

Amalgamated Bank Reports Fourth Quarter and Full Year 2019 Financial Results
Amalgamated Bank Reports Fourth Quarter and Full Year 2019 Financial Results

NEW YORK, Jan. 31, 2020 (GLOBE NEWSWIRE) -- Amalgamated Bank (AMAL) (“Amalgamated”) today announced financial results for the fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Highlights

  • Net income of $12.0 million, or $0.37 per diluted share, as compared to $16.0 million, or $0.49 per diluted share, for the fourth quarter of 2018

  • Core net income (non-GAAP) of $12.6 million, or $0.39 per diluted share, as compared to $9.7 million, or $0.30 per diluted share, for the fourth quarter of 2018

  • Deposit growth of $318.6 million, or 29.5% annualized, compared to a balance of $4.3 billion on September 30, 2019

  • Growth in Property Assessed Clean Energy (“PACE”) assessments (in held-to-maturity securities) of $177.5 million, bringing our total PACE assessments to $263.8 million

  • Cost of deposits was 0.36%, as compared to 0.37% for the third quarter of 2019 and 0.27% for the fourth quarter of 2018

  • Net interest margin was 3.43%, compared to 3.50% for the third quarter of 2019 and 3.57% for the fourth quarter of 2018.

  • Tier 1 Leverage, Common Equity Tier 1, and Total Risk-Based capital ratios were 8.90%, 13.01%, and 14.01%, respectively, at December 31, 2019

  • Total nonperforming assets were $66.7 million, or 1.25% of total assets, as of December 31, 2019, compared to $71.6 million or 1.42% of total assets, at September 30, 2019 and $59.3 million, or 1.27% of total assets, at December 31, 2018

Full Year 2019 Highlights

  • Net income of $47.2 million, or $1.47 per diluted share, as compared to $44.7 million, or $1.46 per diluted share, for the full year of 2018

  • Core net income (non-GAAP) of $48.2 million, or $1.49 per diluted share, as compared to $41.6 million, or $1.37 per diluted share, for the full year of 2018

  • Deposit growth of $535.7 million, or 13.0%, compared to December 31, 2018

  • Loan growth of $228.1 million, or 7.1%, compared to December 31, 2018

  • Cost of deposits was 0.35%, compared to 0.26% for the full year of 2018

  • Net interest margin was 3.55%, compared to 3.56% for the full year of 2018

Keith Mestrich, President and Chief Executive Officer of Amalgamated Bank, commented, “We are pleased with our results highlighted by $318.6 million in deposit growth, or 29.5% annualized, and the addition of $177.5 million in PACE assessments for the fourth quarter which has contributed to our 13.6% growth in interest-earning assets for the full year of 2019. As we continued to focus on ‘sustainable’ investing, which we believe differentiates us in the market and aligns with our mission, we were able to deliver loan and securities growth above our expectations for the quarter and the year. This strong growth was also achieved despite our strategic decision to accelerate the reduction of our indirect C&I portfolio over the course of this year. Looking forward, we plan to continue to invest in our growth and we are excited with the opportunities that we see, including our planned market expansion as we execute on our de novo strategy with the goal of opening two offices in 2020 as well as exploring new product development. Lastly, we are very proud of the recognition that we received this past year as we build upon our reputation as America’s Socially Responsible Bank, including EuroMoney’s Award for Corporate Social Responsibility in North America award and Forbes Best Bank in California.”

Results of Operations, Quarter Ended December 31, 2019

Net income for the fourth quarter of 2019 was $12.0 million, or $0.37 per diluted share, compared to $13.2 million, or $0.41 per diluted share, for the third quarter of 2019 and $16.0 million, or $0.49 per diluted share, for the fourth quarter of 2018. The $4.0 million decrease in net income for the fourth quarter of 2019 compared to the like period in 2018, was primarily due to a $8.6 million increase in income tax expense (primarily due to a $7.6 million realization of a deferred tax asset in 2018), partially offset by a $2.0 million increase in net interest income, a $1.5 million reduction in non-interest expense and a $0.8 million decrease in provision for loan losses.

Core net income (non-GAAP) for the fourth quarter of 2019 was $12.6 million, or $0.39 per diluted share, compared to $13.3 million, or $0.41 per diluted share, for the third quarter of 2019 and $9.7 million, or $0.30 per diluted share, for the fourth quarter of 2018. Core earnings for the fourth quarter of 2019 excluded an aggregate of $1.1 million of expense related to branch closures and severance, $0.2 million in securities gains and the tax effect of such adjustments.

Net interest income was $42.3 million for the fourth quarter of 2019, compared to $41.8 million for the third quarter of 2019 and $40.2 million for the fourth quarter of 2018. The year-over-year increase was primarily attributable to an increase in average loans of $226.6 million, an increase in average securities of $201.2 million, a decrease in total borrowings of $128.9 million and a decrease in the yield on total borrowings of 0.39%, partially offset by an increase in interest bearing deposits of $116.7 million and an increase in the rate paid on interest bearing deposits of 0.20% and a decrease in the yield on interest earnings assets of 0.14%.

Net interest margin was 3.43% for the fourth quarter of 2019, a decrease of seven basis points from 3.50% in the third quarter of 2019 and a decrease of 14 basis points from 3.57% in the fourth quarter of 2018. The accretion of the loan mark from the loans we acquired in our New Resource Bank (“NRB”) acquisition contributed five basis points to our net interest margin in the fourth quarter of 2019.

Our provision for loan losses was $0.1 million in the fourth quarter of 2019, compared to a recovery of provision of $0.6 million in the third quarter of 2019 and a provision of $0.9 million for the fourth quarter of 2018. The provision expense in the fourth quarter of 2019 was primarily driven by an increase in specific reserves for our indirect C&I portfolio for one loan that was downgraded to non-accrual, partially offset by a release in allowance related to the classification of PACE assessment to held-to-maturity securities.

Non-interest income was $7.8 million in the fourth quarter of 2019 compared to $7.7 million in the third quarter of 2019, and $7.6 million in the fourth quarter of 2018. The $0.2 million increase in the fourth quarter of 2019, compared to the like period in 2018, was primarily driven by $0.2 million in gains from the sale of investment securities in the fourth quarter of 2019, compared to a $0.1 million loss on such sales in the fourth quarter of 2018 and a $0.2 million increase in service charges on deposits, partially offset by a $0.3 million decrease in Trust Department fees.

Non-interest expense for the fourth quarter of 2019 was $33.5 million, an increase of $1.6 million from $31.9 million in the third quarter of 2019, and a decrease of $1.5 million from $35.0 million in the fourth quarter of 2018. The linked quarter increase was primarily due a $0.7 million increase in occupancy and depreciation due to the acceleration of expenses related to plans for closing two branches in New York City in 2020, a $0.6 million increase in other expenses from a smaller off balance sheet credit reserve release as compared to the previous quarter, and a $0.3 million increase in compensation and employee benefits due to an increase in temporary workers for special projects, partially offset by a $0.3 million reduction in data processing expense due to vendor contract renegotiations.

We had a provision for income tax expense of $4.4 million for the fourth quarter of 2019, compared to $4.9 million for third quarter of 2019 and a recovery of $4.1 million for the fourth quarter of 2018 due to the realization of additional deferred tax assets. Our effective tax rate for the fourth quarter of 2019 was 27.0%, compared to 27.1% for the third quarter of 2019.

Total loans, net, at December 31, 2019 were $3.4 billion, a decrease of $28.3 million or 0.8% as compared to September 30, 2019 and an increase of $228.1 million, or 7.1%, as compared to $3.2 billion at December 31, 2018. Loans as of September 30, 2019 included $86.3 million of Property Assessed Clean Energy (“PACE”) assessments which have been classified as held-to-maturity securities at December 31, 2019.

Deposits at December 31, 2019 were $4.6 billion, an increase of $318.6 million, or 29.5% annualized, compared to $4.3 billion as of September 30, 2019, and an increase of $535.7 million, or 13.0%, as compared to $4.1 billion as of December 31, 2018. Deposits at December 31, 2018 included $326.7 million of short-term deposits from one customer that moved off of our balance sheet in January 2019. Deposits held by politically-active customers, such as campaigns, PACs and state and national party committees were $578.6 million as of December 31, 2019, an increase of $67.7 million, compared to $510.9 million as of September 30, 2019, and an increase of $396.7 million, compared to $181.9 million as of December 31, 2018. Noninterest-bearing deposits represented 46% of average deposits and 47% of ending deposits for the three months ended December 31, 2019, contributing to an average cost of deposits of 0.36% in the fourth quarter of 2019, a one basis point decrease from the linked quarter.

Results of Operations, Full Year Ended December 31, 2019

Net income for the year ended December 31, 2019 was $47.2 million, or $1.47 per diluted share, compared to $44.7 million, or $1.46 per diluted share, for the year ended December 31, 2018. The $2.5 million increase in net income for the year ended 2019 was primarily due to a $16.9 million increase in net interest income and a $0.9 million improvement in non interest income, partially offset by a $11.3 million increase in income tax expense (due to a $7.6 million realization of a deferred tax asset in 2018 and higher pre-tax income) and a $4.1 million increase in the provision for loan losses.

Core net income (non-GAAP) for the year ended December 31, 2019 was $48.2 million, or $1.49 per diluted share, compared to $41.6 million, or $1.37 per diluted share, for the year ended December 31, 2018. Core earnings for the year ended December 31, 2019 excluded an aggregate of $1.4 million of expense related to branch closures and severance, $0.1 million in securities gains and the tax effect of such adjustments.

Net interest income was $166.6 million for the year ended December 31, 2019, compared to $149.7 million for the year ended December 31, 2018. Net interest margin was 3.55% for the year ended December 31, 2019, compared to 3.56% for the same period in 2018, a decrease of one basis point. The increase in net interest income was primarily due to the $236.8 million increase in average loans, the $256.4 million increase in average securities and the 0.35% increase in the yield on securities, partially offset by the $239.5 million increase in interest bearing deposits and the 0.16% increase in the rate paid on those deposits.

Non-interest income for the year ended December 31, 2019 was $29.2 million, an increase of $0.9 million, compared to $28.3 million for the year ended December 31, 2018. The increase was primarily driven by a $0.5 million increase in other income due to a loss on the sale of loans in 2018, compared to a gain in 2019, a $0.4 million increase in service charges on deposit accounts and a $0.1 million gain on the sale of securities compared to a loss in 2018. These increases were partially offset by a $0.2 million decrease in Trust Department fees driven primarily by the runoff of one fund.

Non-interest expense for the year ended December 31, 2019 was $127.8 million, compared to $128.0 million for the year ended December 31, 2018. Increases in compensation and benefits costs of $2.9 million (due to increased wages and temporary workers) and occupancy and depreciation costs of $1.2 million (due to branch closure expenses) were partially offset by decreases in professional fees of $1.8 million (due to our initial public offering and NRB acquisition in 2018) and other expenses of $1.6 million (primarily from a lower FDIC expense and release of an off balance sheet provision).

Financial Condition

Total assets were $5.3 billion at December 31, 2019, compared to $4.7 billion at December 31, 2018. The increase of $639.8 million was primarily driven by the addition of $228.1 million in loans receivable, net and an increase in investment securities of $338.2 million.

Nonperforming assets totaled $66.7 million, or 1.25% of period end total assets, at December 31, 2019, an increase of $7.4 million, compared with $59.3 million, or 1.27% of period end total assets, at December 31, 2018. Nonaccrual loans totaled $31.0 million, or 0.90% of period end loans, at December 31, 2019, an increase of $7.2 million, compared with $23.9 million, or 0.74% of period end loans, at December 31, 2018. One indirect C&I loan that had previously been modified to a performing restructured loan was downgraded to non-accrual in the fourth quarter of 2019.

The allowance for loan losses decreased $3.3 million to $33.8 million at December 31, 2019 from $37.2 million at December 31, 2018, which was primarily driven by a decrease in specific reserves on C&I loans and improvement in historical loss factors, partially offset by allowance increases due to loan growth. At December 31, 2019, we had $65.4 million of impaired loans for which a specific allowance of $7.5 million was made, compared to $71.0 million of impaired loans at September 30, 2019 for which a specific allowance of $6.2 million was made. The ratio of allowance to total loans was 0.98% at December 31, 2019, 0.96% at September 30, 2019 and 1.15% at December 31, 2018.

Capital

As of December 31, 2019, our Tier 1 Leverage Capital Ratio was 8.90%, Common Equity Tier 1 Capital Ratio was 13.01%, and Total Risk-Based Capital Ratio was 14.01%, compared to 9.03%, 13.49%, and 14.55%, respectively, as of September 30, 2019. As of December 31, 2018, our Tier 1 Leverage, Common Equity Tier 1, and Total Risk-Based capital ratios were 8.88%, 13.22%, and 14.46%, respectively. Stockholders’ equity at December 31, 2019 was $490.5 million, compared to $439.4 million at December 31, 2018.

Our book value per share was $15.56 as of December 31, 2019 compared to $15.37 as of September 30, 2019 and $13.82 as of December 31, 2018. Our tangible book value per share was $14.93 as of December 31, 2019 compared to $14.74 as of September 30, 2019 and $13.16 as of December 31, 2018.

Conference Call

As previously announced, we will host a conference call today, January 31, 2020, at 10:00 am (Eastern Time) to discuss our fourth quarter and full year 2019 results. 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 Fourth Quarter and Full Year 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 13697882. The telephonic replay will be available until 11:59 pm (Eastern Time) on February 7, 2020.

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.

About Amalgamated Bank

Amalgamated Bank is a New York-based full-service commercial bank and a chartered trust company with a combined network of 13 branches in New York City, Washington D.C., and San Francisco. 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 December 31, 2019, our total assets were $5.3 billion, total net loans were $3.4 billion, and total deposits were $4.6 billion. Additionally, as of December 31, 2019, the trust business held $32.4 billion in assets under custody and $13.9 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,” “Core return on average assets,” “Core return on average tangible common equity,” and “Core efficiency ratio.”

Our management uses 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 the most comparable GAAP measures are set forth in the final pages of this release and also may be viewed on our website, amalgamatedbank.com.

Forward Looking Statements

Statements included in this release that are not historical in nature 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. The words “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “may” and “intend,” as well as other similar words and expressions of the future, are intended to identify forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. 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: (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) the inability of Amalgamated Bank to maintain the historical growth rate of its loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Amalgamated Bank’s asset management activities in improving, resolving or liquidating lower-quality assets; (vi) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Amalgamated Bank’s results, including as a result of compression to net interest margin; (vii) greater than anticipated adverse conditions in the national or local economies including in Amalgamated Bank’s core markets (viii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (ix) the results of regulatory examinations; (x) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (xi) a merger or acquisition; (xii) risks of expansion into new geographic or product markets; (xiii) any matter that would cause Amalgamated Bank to conclude that there was impairment of any asset, including intangible assets; (xiv) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives; (xv) risks associated with litigation, including the applicability of insurance coverage; (xvi) the risk of successful integration of the businesses Amalgamated Bank may acquire; (xvii) the vulnerability of Amalgamated Bank's network and online banking portals, and the systems of parties with whom Amalgamated Bank contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xviii) the possibility of increased compliance costs resulting from increased regulatory oversight as a result of Amalgamated Bank becoming a publicly traded company; (xix) volatile credit and financial markets both domestic and foreign; (xx) potential deterioration in real estate values; (xxi) the availability and access to capital and (xxii) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized. Additional factors which could affect the 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

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

2019

2019

2018

2019

2018

INTEREST AND DIVIDEND INCOME

Loans

$

35,202

$

35,768

$

34,620

$

139,995

$

129,904

Securities

11,426

10,542

9,251

44,197

31,576

Federal Home Loan Bank of New York stock

134

178

239

813

1,040

Interest-bearing deposits in banks

193

209

350

949

1,444

Total interest and dividend income

46,955

46,697

44,460

185,954

163,964

INTEREST EXPENSE

Deposits

4,065

3,952

2,713

14,461

9,573

Borrowed funds

640

988

1,542

4,856

4,646

Total interest expense

4,705

4,940

4,255

19,317

14,219

NET INTEREST INCOME

42,250

41,757

40,205

166,637

149,745

Provision for (recovery of) loan losses

83

(558

)

864

3,837

(260

)

Net interest income after provision for loan losses

42,167

42,315

39,341

162,800

150,005

NON-INTEREST INCOME

Trust Department fees

4,481

4,888

4,807

18,598

18,790

Service charges on deposit accounts

2,383

2,222

2,187

8,544

8,183

Bank-owned life insurance

405

415

430

1,649

1,667

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

218

(50

)

(139

)

83

(249

)

Gain (loss) on other real estate owned, net

-

-

-

(564

)

(494

)

Other

289

184

270

891

421

Total non-interest income

7,776

7,659

7,555

29,201

28,318

NON-INTEREST EXPENSE

Compensation and employee benefits, net

18,089

17,765

18,166

70,276

67,425

Occupancy and depreciation

5,007

4,298

4,247

17,721

16,481

Professional fees

3,248

3,120

2,825

11,934

13,688

Data processing

2,545

2,856

3,986

10,880

11,570

Office maintenance and depreciation

889

934

974

3,540

3,643

Amortization of intangible assets

344

344

389

1,374

969

Advertising and promotion

911

684

819

2,908

3,402

Other

2,457

1,885

3,619

9,194

10,825

Total non-interest expense

33,490

31,886

35,025

127,827

128,003

Income before income taxes

16,453

18,088

11,871

64,174

50,320

Income tax expense (benefit)

4,445

4,893

(4,113

)

16,972

5,666

Net income

12,008

13,195

15,984

47,202

44,654

Net income attributable to noncontrolling interests

-

-

-

-

-

Net income attributable to Amalgamated Bank and subsidiaries

$

12,008

$

13,195

$

15,984

$

47,202

$

44,654

Earnings per common share - basic (1)

$

0.38

$

0.41

$

0.50

$

1.49

$

1.47

Earnings per common share - diluted (1)

$

0.37

$

0.41

$

0.49

$

1.47

$

1.46



Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)



December 31,

December 31,

2019

2018

Assets

(Unaudited)

Cash and due from banks

$

7,596

$

10,510

Interest-bearing deposits in banks

114,942

70,335

Total cash and cash equivalents

122,538

80,845

Securities:

Available for sale, at fair value (amortized cost of $1,217,087 and $1,188,710, respectively)

1,224,770

1,175,170

Held-to-maturity (fair value of $292,837 and $4,105, respectively)

292,704

4,081

Loans held for sale, at fair value

-

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

3,472,614

3,247,831

Allowance for loan losses

(33,847

)

(37,195

)

Loans receivable, net

3,438,767

3,210,636

Accrued interest and dividends receivable

19,088

14,387

Premises and equipment, net

17,778

21,654

Bank-owned life insurance

80,714

79,149

Right-of-use lease asset

47,299

-

Deferred tax asset

31,441

39,697

Goodwill and other intangible assets

19,665

21,039

Other assets

30,574

38,831

Total assets

$

5,325,338

$

4,685,489

Liabilities

Deposits

$

4,640,982

$

4,105,306

Borrowed funds

75,000

92,875

Operating leases

62,404

-

Other liabilities

56,408

47,937

Total liabilities

4,834,794

4,246,118

Commitments and contingencies

-

-

Stockholders’ equity

Preferred Stock:

Class B - par value $100,000 per share; 77 shares authorized; 67 shares

issued and outstanding as of December 31, 2017

-

Common stock, par value $.01 per share (70,000,000 shares authorized; 31,523,442 and

31,771,585 shares issued and outstanding, respectively)

315

318

Additional paid-in capital

305,738

308,678

Retained earnings

181,132

142,231

Accumulated other comprehensive income (loss), net of income taxes

3,225

(11,990

)

Total Amalgamated Bank stockholders' equity

490,410

439,237

Noncontrolling interests

134

134

Total stockholders' equity

490,544

439,371

Total liabilities and stockholders’ equity

$

5,325,338

$

4,685,489


Select Financial Data

As of and for the Three Months Ended

As of and for the Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

2019

2019

2018

2019

2018

Selected Financial Ratios and Other Data (1)

Earnings per share

Basic

$

0.38

$

0.41

$

0.50

$

1.49

$

1.47

Diluted

0.37

0.41

0.49

1.47

1.46

Core Earnings per share (non-GAAP)

Basic

$

0.40

$

0.42

$

0.30

$

1.52

$

1.37

Diluted

0.39

0.41

0.30

1.49

1.37

Book value per common share

15.56

15.37

13.82

15.56

13.82

(excluding minority interest)

Tangible book value per share (non-GAAP)

14.93

14.74

13.16

14.93

13.16

Common shares outstanding

31,523,442

31,633,691

31,771,585

31,523,442

31,771,585

Weighted average common shares

31,529,014

31,809,083

31,771,585

31,733,195

30,368,673

outstanding, basic

Weighted average common shares

32,125,683

32,176,439

32,460,024

32,205,248

30,633,270

outstanding, diluted

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


Select Financial Data

Months Ended

Months Ended

December 31,

September 30,

December 31,

December 31,

2019

2019

2018

2019

2018

Selected Performance Metrics:

Return on average assets

0.93%

1.05%

1.35%

0.96%

1.01%

Core return on average assets (non-GAAP)

0.97%

1.06%

0.82%

0.98%

0.94%

Return on average equity

9.75%

10.86%

14.88%

10.03%

11.38%

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

10.68%

11.43%

9.50%

10.70%

11.06%

Loan yield

4.10%

4.22%

4.32%

4.27%

4.27%

Securities yield

3.28%

3.28%

3.14%

3.36%

3.01%

Deposit cost

0.36%

0.37%

0.27%

0.35%

0.26%

Net interest margin

3.43%

3.50%

3.57%

3.55%

3.56%

Efficiency ratio (1)

66.95%

64.53%

73.34%

65.27%

71.89%

Core efficiency ratio (non-GAAP) (1)

65.11%

64.26%

69.43%

64.57%

68.47%

Asset Quality Ratios:

Nonaccrual loans to total loans

0.90%

0.53%

0.74%

0.90%

0.74%

Nonperforming assets to total assets

1.25%

1.42%

1.27%

1.25%

1.27%

Allowance for loan losses to nonaccrual loans

109%

183%

156%

109%

156%

Allowance for loan losses to total loans

0.98%

0.96%

1.15%

0.98%

1.15%

Net charge-offs (recoveries) to average loans

-0.01%

-0.07%

0.01%

0.22%

-0.05%

Capital Ratios:

Tier 1 leverage capital ratio

8.90%

9.03%

8.88%

8.90%

8.88%

Tier 1 risk-based capital ratio

13.01%

13.49%

13.22%

13.01%

13.22%

Total risk-based capital ratio

14.01%

14.55%

14.46%

14.01%

14.46%

Common equity tier 1 capital ratio

13.01%

13.49%

13.22%

13.01%

13.22%

(1) Efficiency ratio is calculated by dividing total non-interest expense by the sum of net interest income and total non-interest income



Loan and Held-to-Maturity Securities Portfolio Composition

(In thousands)

At December 31, 2019

At September 30, 2019(1)

At December 31, 2018

Amount

% of total loans

Amount

% of total loans

Amount

% of total loans

Commercial portfolio:

Commercial and industrial

$

474,342

13.7

%

$

469,882

13.5

%

$

556,537

17.2

%

Multifamily mortgages

976,380

28.2

%

982,667

28.1

%

916,337

28.3

%

Commercial real estate mortgages

421,947

12.2

%

441,612

12.6

%

440,704

13.6

%

Construction and land development mortgages

62,271

1.8

%

59,309

1.7

%

46,178

1.4

%

Total commercial portfolio

1,934,940

55.9

%

1,953,470

55.9

%

1,959,756

60.5

%

Retail portfolio:

Residential real estate lending

1,366,473

39.4

%

1,369,616

39.2

%

1,110,410

34.2

%

Consumer and other

163,077

4.7

%

169,463

4.9

%

171,184

5.3

%

Total retail

1,529,550

44.1

%

1,539,079

44.1

%

1,281,594

39.5

%

Total loans

3,464,490

100.0

%

3,492,549

100.0

%

3,241,350

100.0

%

Net deferred loan origination fees (costs)

8,124

8,175

6,481

Allowance for loan losses

(33,847

)

(33,697

)

(37,195

)

Total loans, net

$

3,438,767

$

3,467,027

$

3,210,636

Held-to-maturity securities portfolio:

PACE assesments

$

263,805

90.1

%

$

-

0.0

%

$

-

0.0

%

Other securities

28,899

9.9

%

21,259

100.0

%

4,081

100.0

%

Total HTM securities

$

292,704

100.0

%

$

21,259

100.0

%

$

4,081

100.0

%

(1) Residential real estate lending balances at September 30, 2019 include $86.3 million in PACE assessments that are presented in held-to-maturity securities at December 31, 2019


Net Interest Income Analysis

Three Months Ended

Three Months Ended

December 31, 2019

September 30, 2019

(In thousands)

Average Balance

Income / Expense

Yield / Rate

Average Balance

Income / Expense

Yield / Rate

Average Balance

Income / Expense

Yield / Rate

Interest earning assets:

Interest-bearing deposits in banks

$

85,965

$

193

0.89%

$

72,143

$

209

1.15%

$

85,789

$

350

1.62%

Securities and FHLB stock

1,399,657

11,560

3.28%

1,294,930

10,720

3.28%

1,198,477

9,490

3.14%

Total loans, net (1)

3,406,806

35,202

4.10%

3,363,837

35,768

4.22%

3,180,168

34,620

4.32%

Total interest earning assets

4,892,428

46,955

3.81%

4,730,910null