MYFW - First Western Financial Inc News Story
$25.88 -0.4 -1.6%
Last Trade - 09/04/21
| Market Cap | £150.2m |
| Enterprise Value | £166.2m |
| Revenue | £71.0m |
| Position in Universe | 4517th / 6827 |
First Western Reports Third Quarter 2020 Financial Results
Thu 22nd October, 2020 9:15pm
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Third Quarter 2020 Summary
* Net income available to common shareholders of $9.6 million in Q3 2020,
compared to $8.7 million in Q2 2020 and $2.4 million in Q3 2019
* Diluted EPS of $1.20 in Q3 2020, compared to $1.10 in Q2 2020 and $0.30 in
Q3 2019
* Gross revenue((1)) of $31.0 million in Q3 2020, compared to $26.2 million in
Q2 2020 and $16.6 million in Q3 2019
* Net interest margin, including the impact of Paycheck Protection Program
(“PPP”) loans, remained relatively flat at 3.07% in Q3 2020, compared with
3.10% in Q2 2020 and 2.95% Q3 2019
* Total assets of $1.97 billion, up 9.0% from Q2 2020 and 55.1% from Q3 2019
* Total deposits of $1.56 billion, up 11.1% from Q2 2020 and 41.0% from Q3
2019
* Gross loans of $1.51 billion, up 5.9% from Q2 2020 and 62.5% from Q3 2019
* Loans under active COVID-19 loan modification agreements declined 62.3% from
$176.9 million in Q2 2020, to $66.7 million in Q3 2020
((1)) Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.
DENVER, Oct. 22, 2020 (GLOBE NEWSWIRE) -- First Western Financial, Inc.,
(“First Western” or the “Company”) (NASDAQ: MYFW), today reported
financial results for the third quarter ended September 30, 2020.
Net income available to common shareholders was $9.6 million, or $1.20 per
diluted share, for the third quarter of 2020. This compares to $8.7 million,
or $1.10 per diluted share, for the second quarter of 2020, and $2.4 million,
or $0.30 per diluted share, for the third quarter of 2019.
Scott C. Wylie, CEO of First Western, commented, “We are very pleased to
deliver another record quarter of earnings driven by strong growth in both net
interest income and non-interest income, while our asset quality continues to
remain healthy despite the ongoing COVID-19 pandemic. The investments we have
made in banking talent and technology over the past few years are having the
impact that we expected, resulting in the consistent acquisition of new
clients, strong balance sheet growth, improving operating leverage, and
greater earnings power.
“With the addition of a number of experienced bankers through our branch
purchase consummated in May 2020, we have accelerated our commercial banking
initiative and are successfully attracting new commercial relationships.
During the third quarter, we generated loan growth of 5.9% and deposit growth
of 11.1%, largely due to growth in commercial banking relationships. As a
result, we continue to see a shift in our loan mix towards commercial loans,
while our deposit mix reflects the inflow of low-cost transaction deposits
with non-interest bearing deposits now accounting for approximately 30% of our
total deposits.
“We continue to have a strong business development pipeline in both our
commercial banking and residential mortgage areas. We expect our mortgage
activity to continue providing a significant earnings contribution in the
near-term, while the balance sheet growth, strong net interest margin and
improving operating leverage resulting from the expansion of our commercial
client roster we believe is creating a sustainable path to consistently
generating strong returns over the longer-term. As we continue to gain scale
through organic growth, expansion and additional strategic acquisitions, we
believe that our model will establish First Western as a high performing
financial institution and create significant value for our shareholders in the
future,” said Mr. Wylie.
For the Three Months Ended
September 30, June 30, September 30,
(Dollars in thousands, except per share data) 2020 2020 2019
Earnings Summary
Net interest income $ 12,918 $ 10,796 $ 7,940
Less: provision for loan losses 1,496 2,124 100
Total non-interest income 18,032 15,427 8,788
Total non-interest expense 16,632 12,644 ((1)) 13,442
Income before income taxes 12,822 11,455 3,186
Income tax expense 3,192 2,759 780
Net income available to common shareholders 9,630 8,696 2,406
Adjusted net income available to common shareholders ((2)) 9,630 8,941 2,855
Basic earnings per common share 1.22 1.10 0.30
Adjusted basic earnings per common share ((2)) 1.22 1.13 0.35
Diluted earnings per common share 1.20 1.10 0.30
Adjusted diluted earnings per common share ((2)) $ 1.20 $ 1.13 $ 0.35
Return on average assets (annualized) 2.06 % 2.25 % 0.80 %
Adjusted return on average assets (annualized) ((2)) 2.06 2.32 0.95
Return on average shareholders' equity (annualized) 26.43 25.44 7.74
Adjusted return on average shareholders' equity (annualized) ((2)) 26.43 26.16 9.19
Return on tangible common equity (annualized) ((2)) 31.49 31.02 9.39
Adjusted return on tangible common equity (annualized) ((2)) 31.49 31.89 11.15
Net interest margin 3.07 3.10 2.95
Efficiency ratio ((2)) 53.40 % 48.07 % 80.62 %
((1)) Includes non-recurring acquisition related expenses of $0.3 million for
the three months ended June 30, 2020.
((2) )Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.
Operating Results for the Third Quarter 2020
Revenue
Gross revenue( (1)) was $31.0 million for the third quarter of 2020, compared
to $26.2 million for the second quarter of 2020. The increase in revenue was
driven by a $2.6 million increase in non-interest income, primarily due to
higher mortgage segment activity, as well as a $2.1 million increase in net
interest income.
((1) )Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.
Relative to the third quarter of 2019, gross revenue increased $14.3 million
from $16.6 million, or 86.3%. The increase in revenue was primarily due to
higher mortgage segment activity, as well as a $5.0 million increase in net
interest income.
Net Interest Income
Net interest income for the third quarter of 2020 was $12.9 million, an
increase of 19.7% from $10.8 million in the second quarter of 2020. The
increase in net interest income was driven primarily by a $194.1 million, or
15.3% increase in average loan balances attributed to organic growth as well
as a relatively stable net interest margin, which was partially impacted by an
increase of $0.4 million in accretion of the credit mark from acquired loans.
Relative to the third quarter of 2019, net interest income increased 62.7%
from $7.9 million. The year-over-year increase in net interest income was due
primarily to growth in average loans including the impact of PPP loans and the
branch acquisition.
Net Interest Margin
Net interest margin for the third quarter of 2020 decreased slightly to 3.07%
from 3.10% in the second quarter of 2020. The decrease was primarily driven by
a 15 basis point decline in the yield on earning assets. On a net basis, the
PPP program negatively impacted net interest margin by 31 basis points which
was offset by an increase of 15 basis points relating to the impact of
purchase accretion from the branch acquisition completed in the second quarter
2020.
Relative to the third quarter of 2019, the net interest margin increased from
2.95%, primarily due to a 100 basis point decline in cost of deposits
partially offset by an 83 basis point reduction in average yields on interest
earning assets.
Non-interest Income
Non-interest income for the third quarter of 2020 was $18.0 million, an
increase of 16.9% from $15.4 million in the second quarter of 2020. The
increase was attributable to higher net gain on mortgage loans as a result of
record volume of mortgages locked and originated in the quarter. The Company
originated $376.3 million of mortgage loans for sale during the quarter
compared to $344.3 million the previous quarter, an increase of $32.0 million.
Relative to the third quarter of 2019, non-interest income increased 105.2%
from $8.8 million. The increase was attributable to higher net gain on
mortgage loans.
Non-interest Expense
Non-interest expense for the third quarter of 2020 was $16.6 million, an
increase of 31.5% from $12.6 million for the second quarter of 2020. The
increase was primarily attributable to the second quarter deferral of $2.9
million in loan origination expenses related to PPP loans, resulting in higher
salaries and employee benefits expense in the current quarter, as well as the
full quarter impact of the personnel added through the branch purchase and an
increase in incentive compensation accruals correlating with the increase in
revenues and earnings.
Non-interest expense increased 23.7% from $13.4 million in the third quarter
of 2019. The increase was primarily due to higher salaries and employee
benefits expense resulting from the personnel added through the branch
purchase and an increase in incentive compensation accruals correlating with
the increase in revenues and earnings.
The Company’s efficiency ratio was 53.4% in the third quarter of 2020,
compared with 48.1% in the second quarter of 2020 and 80.6% in the third
quarter of 2019.
Income Taxes
The Company recorded income tax expense of $3.2 million for the third quarter
of 2020, representing an effective tax rate of 24.9%, compared to 24.1% for
the second quarter of 2020. The increase in effective tax rate in the third
quarter of 2020 was primarily attributable to adjustments related to the
vesting of restricted stock award.
Loan Portfolio
Total loans, including mortgage loans held for sale, were $1.60 billion at
September 30, 2020, an increase of $103.6 million from the end of the prior
quarter, and an increase of $603.8 million from September 30, 2019.
Total loans held for investment, were $1.51 billion at September 30, 2020, an
increase of 5.9% from $1.42 billion at June 30, 2020, and an increase of 63.1%
from $924.4 million at September 30, 2019. The increase in total loans held
for investment from June 30, 2020 was primarily due to growth in the 1-4
family residential, commercial real estate, and construction portfolios.
PPP loans were $206.1 million at September 30, 2020, an increase of 0.8% from
$204.6 million at June 30, 2020. As of October 16, 2020, the Company has
submitted loan forgiveness applications for $85.2 million and received $2.1
million from the Small Business Administration.
Deposits
Total deposits were $1.56 billion at September 30, 2020, compared to $1.41
billion at June 30, 2020, and $1.11 billion at September 30, 2019. The
increase in total deposits from June 30, 2020 was attributable to an increase
in money market, time, negotiable order of withdrawal and non-interest bearing
deposits.
Average total deposits for the third quarter of 2020 increased $420.6 million,
or 40.4%, from the third quarter of 2019 and $153.6 million, or 11.7%, from
the second quarter 2020.
Borrowings
Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $222.1
million at September 30, 2020, compared to $222.3 million at June 30, 2020, a
decrease of $0.2 million from the end of the prior quarter, and an increase of
$212.1 million from September 30, 2019. The increase from September 30, 2019
is attributable to participation in the Paycheck Protection Program Loan
Facility from the Federal Reserve in the amount of $204.1 million. Borrowing
from this facility is expected to match the balances of the PPP loans.
Assets Under Management
Total assets under management increased by $378.8 million during the third
quarter to $6.13 billion at September 30, 2020, compared to $5.75 billion at
June 30, 2020, and $6.12 billion at September 30, 2019. The increase was
primarily attributable to customer contributions to existing accounts and
improving market conditions.
Credit Quality
Non-performing assets totaled $10.4 million, or 0.53% of total assets, at
September 30, 2020, compared with $12.1 million, or 0.67% of total assets, at
June 30, 2020. The decline in non-performing assets is due to continued pay
downs on outstanding balances.
As a result of the COVID-19 pandemic, a loan modification program was designed
and implemented to assist our clients experiencing financial stress resulting
from the economic impacts caused by the global pandemic. The Company offered
loan extensions, temporary payment moratoriums, and financial covenant waivers
for commercial and consumer borrowers impacted by the pandemic who had a pass
risk rating and had not been delinquent over 30 days on payments in the last
two years.
At September 30, 2020, the Company has active loan modification agreements on
forty-four loans across multiple industries in the amount of $66.7 million,
representing a decline of 62.3% from $176.9 million, at June 30, 2020.
COVID-19 loan modification agreements represented 4.43% of total loans, at
September 30, 2020, compared with 12.42% of total loans, at June 30, 2020.
Most of the temporary payment moratoriums were for a period of 180 days or
less and the Company is recognizing interest income on these loans.
The Company continues to meet regularly with clients who could be more highly
impacted by the COVID-19 pandemic. The Company receives and reviews current
financial data and cash flow forecasts from borrowers with loan modification
agreements. As of September 30, 2020, loans which were granted modifications
and the modification term has ended have returned to performing status.
The Company recorded a provision for loan losses of $1.5 million in the third
quarter of 2020, primarily due to the growth in the loan portfolio and the
increased economic uncertainty resulting from the pandemic. The Company has
increased loan level reviews and portfolio monitoring to thoroughly assess how
its clients are being impacted by the current environment.
Capital
At September 30, 2020, First Western (“Consolidated”) and First Western
Trust Bank (“Bank”) exceeded the minimum capital levels required by their
respective regulators. At September 30, 2020, the Bank was classified as
“well capitalized,” as summarized in the following table:
September 30,
2020
Consolidated Capital
Tier 1 capital to risk-weighted assets 9.88 %
Common Equity Tier 1 (CET1) to risk-weighted assets 9.88
Total capital to risk-weighted assets 12.03
Tier 1 capital to average assets 7.52
Bank Capital
Tier 1 capital to risk-weighted assets 10.28
Common Equity Tier 1 (CET1) to risk-weighted assets 10.28
Total capital to risk-weighted assets 11.26
Tier 1 capital to average assets 7.81 %
Book value per common share increased 19.4% from $15.75 at September 30, 2019
to $18.81 at September 30, 2020, and was up 7.1% from $17.56 at June 30, 2020.
Tangible book value per common share( (1)) increased 19.9% from $12.83 at
September 30, 2019 to $15.38 at September 30, 2020, and was up 8.8% from
$14.13 at June 30, 2020.
((1) )Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.
Conference Call, Webcast and Slide Presentation
The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00
p.m. ET on Friday, October 23, 2020. The call can be accessed via telephone at
877-405-1628. A recorded replay will be accessible through October 30, 2020 by
dialing 855-859-2056; passcode 6479834.
A slide presentation relating to the third quarter 2020 results will be
accessible prior to the scheduled conference call. The slide presentation and
webcast of the conference call can be accessed on the Events and Presentations
page of the Company’s investor relations website at
https://myfw.gcs-web.com.
About First Western
First Western is a financial services holding company headquartered in Denver,
Colorado, with operations in Colorado, Arizona, Wyoming and California. First
Western and its subsidiaries provide a fully integrated suite of wealth
management services on a private trust bank platform, which includes a
comprehensive selection of deposit, loan, trust, wealth planning and
investment management products and services. First Western’s common stock is
traded on the Nasdaq Global Select Market under the symbol “MYFW.” For
more information, please visit www.myfw.com.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures
of financial performance recognized in accordance with generally accepted
accounting principles in the United States (“GAAP”). These non-GAAP
financial measures include “Tangible Common Equity,” “Tangible Common
Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency
Ratio,” “Gross Revenue,” “Allowance to Bank Originated Loans Excluding
PPP,” “Adjusted Net Income Available to Common Shareholders,”
“Adjusted Basic Earnings Per Share,” “Adjusted Diluted Earnings Per
Share,” “Adjusted Return on Average Assets,” “Adjusted Return on
Average Shareholders’ Equity,” and “Adjusted Return on Tangible Common
Equity”. The Company believes these non-GAAP financial measures provide both
management and investors a more complete understanding of the Company’s
financial position and performance. These non-GAAP financial measures are
supplemental and are not a substitute for any analysis based on GAAP financial
measures. Not all companies use the same calculation of these measures;
therefore, this presentation may not be comparable to other similarly titled
measures as presented by other companies. Reconciliation of non-GAAP financial
measures, to GAAP financial measures are provided at the end of this press
release.
Forward-Looking Statements
Statements in this news release regarding our expectations and beliefs about
our future financial performance and financial condition, as well as trends in
our business and markets are “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements often include words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “project,”
“outlook,” or words of similar meaning, or future or conditional verbs
such as “will,” “would,” “should,” “opportunity,” “could,”
or “may.” The forward-looking statements in this news release are based on
current information and on assumptions that we make about future events and
circumstances that are subject to a number of risks and uncertainties that are
often difficult to predict and beyond our control. As a result of those risks
and uncertainties, our actual financial results in the future could differ,
possibly materially, from those expressed in or implied by the forward-looking
statements contained in this news release and could cause us to make changes
to our future plans. Those risks and uncertainties include, without
limitation, the COVID-19 pandemic and its effects; integration risks in
connection with acquisitions; the risk of geographic concentration in
Colorado, Arizona, Wyoming and California; the risk of changes in the economy
affecting real estate values and liquidity; the risk in our ability to
continue to originate residential real estate loans and sell such loans; risks
specific to commercial loans and borrowers; the risk of claims and litigation
pertaining to our fiduciary responsibilities; the risk of competition for
investment managers and professionals; the risk of fluctuation in the value of
our investment securities; the risk of changes in interest rates; and the risk
of the adequacy of our allowance for loan losses and the risk in our ability
to maintain a strong core deposit base or other low-cost funding sources.
Additional information regarding these and other risks and uncertainties to
which our business and future financial performance are subject is contained
in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange
Commission (“SEC”) on March 12, 2020 (“Form 10-K”), and other
documents we file with the SEC from time to time. We urge readers of this news
release to review the “Risk Factors” section our Form 10-K and any updates
to those risk factors set forth in our subsequent Quarterly Reports on Form
10-Q, Current Reports on Form 8-K, and our other filings with the SEC. Also,
our actual financial results in the future may differ from those currently
expected due to additional risks and uncertainties of which we are not
currently aware or which we do not currently view as, but in the future may
become, material to our business or operating results. Due to these and other
possible uncertainties and risks, readers are cautioned not to place undue
reliance on the forward-looking statements contained in this news release,
which speak only as of today’s date, or to make predictions based solely on
historical financial performance. Any forward-looking statement speaks only as
of the date on which it is made, and we do not undertake any obligation to
update or review any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required by law.
Contacts:
Financial Profiles, Inc.
Tony Rossi
310-622-8221
MYFW@finprofiles.com
IR@myfw.com
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
Three Months Ended
September 30, June 30, September 30,
(Dollars in thousands, except per share amounts) 2020 2020 2019
Interest and dividend income:
Loans, including fees $ 14,138 $ 12,202 $ 10,672
Investment securities 173 224 312
Federal funds sold and other 99 44 489
Total interest and dividend income 14,410 12,470 11,473
Interest expense:
Deposits 1,067 1,319 3,363
Other borrowed funds 425 355 170
Total interest expense 1,492 1,674 3,533
Net interest income 12,918 10,796 7,940
Less: provision for loan losses 1,496 2,124 100
Net interest income, after provision for loan losses 11,422 8,672 7,840
Non-interest income:
Trust and investment management fees 4,814 4,609 4,824
Net gain on mortgage loans 12,304 10,173 3,291
Bank fees 340 221 283
Risk management and insurance fees 483 333 176
Net gain on sale of securities — — 119
Income on company-owned life insurance 91 91 95
Total non-interest income 18,032 15,427 8,788
Total income before non-interest expense 29,454 24,099 16,628
Non-interest expense:
Salaries and employee benefits 10,212 6,690 8,504
Occupancy and equipment 1,619 1,515 1,388
Professional services 1,288 1,231 745
Technology and information systems 1,032 993 961
Data processing 1,038 1,037 854
Marketing 395 253 272
Amortization of other intangible assets 4 38 52
Provision on other real estate owned 100 — —
Other 944 887 666
Total non-interest expense 16,632 12,644 13,442
Income before income taxes 12,822 11,455 3,186
Income tax expense 3,192 2,759 780
Net income available to common shareholders $ 9,630 $ 8,696 $ 2,406
Earnings per common share:
Basic $ 1.22 $ 1.10 $ 0.30
Diluted $ 1.20 $ 1.10 $ 0.30
September 30, June 30, September 30,
2020 2020 2019
(Dollars in thousands)
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 2,867 $ 4,404 $ 3,828
Interest-bearing deposits in other financial institutions 247,491 187,272 142,348
Total cash and cash equivalents 250,358 191,676 146,176
Available-for-sale securities, at fair value 40,654 47,018 61,491
Correspondent bank stock, at cost 1,295 1,295 582
Mortgage loans held for sale 89,872 69,604 69,231
Loans, net of allowance of $11,845, $10,354 and $7,675 1,494,231 1,412,086 918,911
Premises and equipment, net 5,116 5,201 5,483
Accrued interest receivable 6,730 5,108 2,968
Accounts receivable 4,821 4,616 4,978
Other receivables 1,497 1,543 865
Other real estate owned, net 558 658 658
Goodwill 24,191 24,191 19,686
Other intangible assets, net 72 76 36
Deferred tax assets, net 6,405 6,035 4,765
Company-owned life insurance 15,359 15,268 14,993
Other assets 28,738 23,141 17,549
Assets held for sale 3,000 3,010 3,553
Total assets $ 1,972,897 $ 1,810,526 $ 1,271,925
LIABILITIES
Deposits:
Noninterest-bearing $ 472,963 $ 398,063 $ 231,535
Interest-bearing 1,090,709 1,008,869 877,369
Total deposits 1,563,672 1,406,932 1,108,904
Borrowings:
Federal Home Loan Bank Topeka and Federal Reserve borrowings 222,075 222,313 10,000
Subordinated notes 14,447 14,444 6,560
Accrued interest payable 347 205 356
Other liabilities 22,639 27,080 20,262
Liabilities held for sale 141 135 111
Total liabilities 1,823,321 1,671,109 1,146,193
SHAREHOLDERS’ EQUITY
Total shareholders’ equity 149,576 139,417 125,732
Total liabilities and shareholders’ equity $ 1,972,897 $ 1,810,526 $ 1,271,925
September 30, June 30, September 30,
(Dollars in thousands) 2020 2020 2019
Loan Portfolio
Cash, Securities and Other $ 371,481 $ 371,111 $ 146,622
Construction and Development 105,717 74,793 42,059
1-4 Family Residential 446,959 418,409 366,238
Non-Owner Occupied CRE 243,564 229,150 138,753
Owner Occupied CRE 154,138 117,426 119,497
Commercial and Industrial 185,625 213,271 111,187
Total loans held for investment 1,507,484 1,424,160 924,356
Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net (1,408 ) (1,720 ) 2,230
Gross loans $ 1,506,076 $ 1,422,440 $ 926,586
Total mortgage loans held for sale $ 89,872 $ 69,604 $ 69,231
Deposit Portfolio
Money market deposit accounts $ 805,634 $ 759,997 $ 620,434
Time deposits 177,391 152,897 170,457
Negotiable order of withdrawal accounts 101,708 88,560 83,022
Savings accounts 5,976 7,415 3,456
Total interest-bearing deposits 1,090,709 1,008,869 877,369
Noninterest-bearing accounts 472,963 398,063 231,535
Total deposits $ 1,563,672 $ 1,406,932 $ 1,108,904
As of and for the Three Months Ended
September 30, June 30, September 30,
(Dollars in thousands) 2020 2020 2019
Average Balance Sheets
Assets
Interest-earning assets:
Interest-bearing deposits in other financial institutions $ 178,756 $ 76,463 $ 88,782
Available-for-sale securities 40,528 48,614 51,368
Loans 1,462,872 1,268,797 937,260
Interest-earning assets 1,682,156 1,393,874 1,077,410
Mortgage loans held for sale 94,714 68,212 52,546
Total interest-earning assets, plus mortgage loans held for sale 1,776,870 1,462,086 1,129,956
Allowance for loan losses (10,965 ) (8,694 ) (7,584 )
Noninterest-earning assets 101,874 89,817 81,171
Total assets $ 1,867,779 $ 1,543,209 $ 1,203,543
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits $ 1,045,321 $ 929,805 $ 826,490
Federal Home Loan Bank Topeka and Federal Reserve borrowings 222,225 64,067 10,567
Subordinated notes 14,445 14,445 6,560
Total interest-bearing liabilities 1,281,991 1,008,317 843,617
Noninterest-bearing liabilities:
Noninterest-bearing deposits 417,502 379,374 215,721
Other liabilities 22,564 18,815 19,881
Total noninterest-bearing liabilities 440,066 398,189 235,602
Total shareholders’ equity 145,722 136,703 124,324
Total liabilities and shareholders’ equity $ 1,867,779 $ 1,543,209 $ 1,203,543
Yields (annualized)
Interest-bearing deposits in other financial institutions 0.22 % 0.23 % 2.20 %
Available-for-sale securities 1.71 1.84 2.43
Loans 3.87 3.85 4.55
Interest-earning assets 3.43 3.58 4.26
Mortgage loans held for sale 2.72 3.23 3.46
Total interest-earning assets, plus mortgage loans held for sale 3.39 3.56 4.22
Interest-bearing deposits 0.41 0.57 1.63
Federal Home Loan Bank Topeka and Federal Reserve borrowings 0.37 0.81 1.93
Subordinated notes 6.12 6.26 7.26
Total interest-bearing liabilities 0.47 0.66 1.68
Net interest margin 3.07 3.10 2.95
Net interest rate spread 2.96 % 2.92 % 2.58 %
As of and for the Three Months Ended
September 30, June 30, September 30,
(Dollars in thousands, except share and per share amounts) 2020 2020 2019
Asset Quality
Non-performing loans $ 9,881 $ 11,454 $ 13,980
Non-performing assets 10,439 12,112 14,638
Net charge-offs $ 5 $ 12 $ —
Non-performing loans to total loans 0.66 % 0.81 % 1.51 %
Non-performing assets to total assets 0.53 0.67 1.15
Allowance for loan losses to non-performing loans 119.88 90.40 54.90
Allowance for loan losses to total loans 0.79 0.73 0.83
Allowance for loan losses to bank originated loans excluding PPP ((1)) 1.00 0.93 0.83
Net charge-offs to average loans — % ((2)) — % ((2)) — %
Assets Under Management $ 6,131,179 $ 5,752,353 $ 6,116,510
Market Data
Book value per share at period end $ 18.81 $ 17.56 $ 15.75
Tangible book value per common share ((1)) $ 15.38 $ 14.13 $ 12.83
Weighted average outstanding shares, basic 7,911,871 7,890,337 7,890,959
Weighted average outstanding shares, diluted 8,019,007 7,928,518 7,914,959
Shares outstanding at period end 7,951,749 7,939,024 7,983,866
Consolidated Capital
Tier 1 capital to risk-weighted assets 9.88 % 9.67 % 11.73 %
Common Equity Tier 1 (CET1) to risk-weighted assets 9.88 9.67 11.73
Total capital to risk-weighted assets 12.03 11.84 13.36
Tier 1 capital to average assets 7.52 8.30 8.76
Bank Capital
Tier 1 capital to risk-weighted assets 10.28 10.12 10.98
Common Equity Tier 1 (CET1) to risk-weighted assets 10.28 10.12 10.98
Total capital to risk-weighted assets 11.26 11.05 11.87
Tier 1 capital to average assets 7.81 % 8.63 % 8.19 %
((1)) Represents a Non-GAAP financial measure. See “Reconciliation of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.
((2)) Calculation results in an immaterial amount.
Reconciliations of Non-GAAP Financial Measures
As of and for the Three Months Ended
September 30, June 30, September 30,
(Dollars in thousands, except share and per share amounts) 2020 2020 2019
Tangible Common
Total shareholders' equity $ 149,576 $ 139,417 $ 125,732
Less: goodwill 24,191 24,191 19,686
Less: intangibles held for sale 3,000 3,000 ((1)) 3,553
Less: other intangibles, net 72 76 36
Tangible common equity $ 122,313 $ 112,150 $ 102,457
Common shares outstanding, end of period 7,951,749 7,939,024 7,983,866
Tangible common book value per share $ 15.38 $ 14.13 $ 12.83
Net income available to common shareholders $ 9,630 $ 8,696 $ 2,406
Return on tangible common equity (annualized) 31.49 % 31.02 % 9.39 %
Efficiency
Non-interest expense $ 16,632 $ 12,644 $ 13,442
Less: amortization 4 38 52
Less: provision on other real estate owned 100 — —
Adjusted non-interest expense $ 16,528 $ 12,606 $ 13,390
Net interest income $ 12,918 $ 10,796 $ 7,940
Non-interest income 18,032 15,427 8,788
Less: net gain on sale of securities — — 119
Total income $ 30,950 $ 26,223 $ 16,609
Efficiency ratio 53.40 % 48.07 % 80.62 %
Gross Revenue
Total income before non-interest expense $ 29,454 $ 24,099 $ 16,628
Less: net gain on sale of securities — — 119
Plus: provision for loan losses 1,496 2,124 100
Gross revenue $ 30,950 $ 26,223 $ 16,609
Allowance to Bank Originated Loans Excluding PPP
Total loans $ 1,507,484 $ 1,424,160 $ 924,356
Less: loans acquired 124,689 123,786 —
Less: bank originated PPP loans 193,213 191,676 —
Bank originated loans excluding PPP $ 1,189,582 $ 1,108,698 $ 924,356
Allowance for loan losses $ 11,845 $ 10,354 $ 7,675
Allowance for loan losses to bank originated loans excluding PPP 1.00 % 0.93 % 0.83 %
((1)) Represents only the intangible portion of assets held for sale
As of and for the Three Months Ended
September 30, June 30, September 30,
(Dollars in thousands, except share and per share data) 2020 2020 2019
Adjusted Net Income Available to Common Shareholders
Net income available to common shareholders $ 9,630 $ 8,696 $ 2,406
Plus: expenses related to branch purchase and assumption agreement — 323 —
Plus: EMC performance related earn-out payouts — — 466
Plus: expenses related to sale of L.A. fixed income team — — 140
Less: income tax impact — 78 157
Adjusted net income available to shareholders $ 9,630 $ 8,941 $ 2,855
Adjusted Basic Earnings Per Share
Basic earnings per share $ 1.22 $ 1.10 $ 0.30
Plus: expenses related to branch purchase and assumption agreement — 0.03 —
Plus: EMC performance related earn-out payouts — — 0.04
Plus: expenses related to sale of L.A. fixed income team — — 0.01
Adjusted basic earnings per share $ 1.22 $ 1.13 $ 0.35
Adjusted Diluted Earnings Per Share
Diluted earnings per share $ 1.20 $ 1.10 $ 0.30
Plus: expenses related to branch purchase and assumption agreement — 0.03 —
Plus: EMC performance related earn-out payouts — — 0.04
Plus: expenses related to sale of L.A. fixed income team — — 0.01
Adjusted diluted earnings per share $ 1.20 $ 1.13 $ 0.35
Adjusted Return on Average Assets (annualized)
Return on average assets 2.06 % 2.25 % 0.80 %
Plus: expenses related to branch purchase and assumption agreement — 0.07 —
Plus: EMC performance related earn-out payouts — — 0.12
Plus: expenses related to sale of L.A. fixed income team — — 0.03
Adjusted return on average assets 2.06 % 2.32 % 0.95 %
Adjusted Return on Average Shareholders' Equity (annualized)
Return on average shareholders' equity 26.43 % 25.44 % 7.74 %
Plus: expenses related to branch purchase and assumption agreement — 0.72 —
Plus: EMC performance related earn-out payouts — — 1.13
Plus: expenses related to sale of L.A. fixed income team — — 0.32
Adjusted return on average shareholders' equity 26.43 % 26.16 % 9.19 %
Adjusted Return on Tangible Common Equity (annualized)
Return on tangible common equity 31.49 % 31.02 % 9.39 %
Plus: expenses related to branch purchase and assumption agreement — 0.87 —
Plus: EMC performance related earn-out payouts — — 1.37
Plus: expenses related to sale of L.A. fixed income team — — 0.39
Adjusted return on tangible common equity 31.49 % 31.89 % 11.15 %
(https://www.globenewswire.com/NewsRoom/AttachmentNg/80292151-ffab-4c1f-81dd-2c0bc66e8142)
GlobeNewswire, Inc. 2020
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