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Section 1: 425 (8-K)

csfl-8k_20171024.htm

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) October 24, 2017

 

CENTERSTATE BANK CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Florida

 

000-32017

 

59-3606741

(State or other jurisdiction
of incorporation)

 

(Commission
file number)

 

(IRS employer
identification no.)

 

1101 First Street South, Suite 202, Winter Haven, FL

 

33880

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code:   (863) 293-4710

Not Applicable

(Former name or former address, if changed since last report)

___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 


 

Item 2.02

 

Results of Operations and Financial Condition

 

On October 24, 2017, CenterState Bank Corporation (NASDAQ: CSFL) (the “Company”) issued a press release announcing certain financial results and additional information.  A copy of the press release is furnished with this Form 8-K. CenterState will host a conference call on  Wednesday, October 25, 2017 at 2:00pm (EST) to discuss its third quarter 2017 results. Investors may call in (toll free) by dialing (866) 393-0571 (passcode 95874051).

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

 

Some of the statements in this report constitute forward-looking statements, within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements related to future events, other future financial and operating performance, costs, revenues, economic conditions in our markets, loan performance, credit risks, collateral values and credit conditions, or business strategies, including expansion and acquisition activities and may be identified by terminology such as “may,” “will,” “should,” “expects,” “scheduled,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “potential,” or “continue” or the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should specifically consider the factors described throughout this report. We cannot assure you that future results, levels of activity, performance or goals will be achieved, and actual results may differ from those set forth in the forward looking statements.

 

Forward-looking statements, with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s our control, as well as beyond the control of Sunshine Bancorp, Inc. (“Sunshine”) and HCBF Holding Company, Inc. (“Harbor”), which the Company has proposed to acquire in separate transactions.  These forward looking statements, many of which, with respect to future business decisions and actions, are subject to change, and which may cause the actual results, performance or achievements of the Company or the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Examples of uncertainties and contingencies include, among other important factors, general economic and business conditions, expectations of and actual timing and amount of interest rate movements, including the slope and shape of the yield curve, which can have a significant impact on a financial services institution, market and monetary fluctuations, including fluctuations in mortgage markets,  responses to any or all of these conditions, the actions of the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and other regulators and agencies, including in connection with the regulatory approval process associated with the proposed mergers, pending, threatened, or possible future regulatory or judicial actions, proceedings or outcomes, changes in laws and regulations applicable to the Company, Sunshine and Harbor, the possibility that the proposed transactions will not close when expected or at all because required regulatory, or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, the possibility that the anticipated benefits of the transactions will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the companies, the possibility that the transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities, the Company’s, Sunshine’s and Harbor’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; and other factors that may affect future results of the Company, Sunshine and Harbor, both individually and as a combined entity. Additional factors that could cause results to differ materially from those contemplated by forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, and otherwise in our SEC reports and filings, in Sunshine’s Annual Report on Form 10-K for the year ended December 31, 2016 and in its other SEC reports and filings, and in Harbor’s final prospectus filed by HCBF with the SEC on June 21, 2017 related to its Registration Statement on Form S-4 filed with the SEC on April 20, 2017, as amended (File No. 333-217395)  under the title “Risk Factors,” and in its other SEC reports and filings. You should not expect us to update any forward-looking statements. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2016, and otherwise in our SEC reports and filings.

 


2

 


 

Important Other Information

Sunshine Bancorp, Inc.

 

In connection with the proposed merger of the Company with Sunshine, the Company has filed with the SEC a Registration Statement on Form S-4 (No. 333-220582) and a definitive Proxy Statement of Sunshine and a Prospectus of the Company, as well as other relevant documents concerning the proposed Sunshine transaction.  The proposed transaction is being submitted to Sunshine’s stockholders for their consideration. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. STOCKHOLDERS OF SUNSHINE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY DO AND WILL CONTAIN IMPORTANT INFORMATION. Stockholders can obtain a free copy of the definitive proxy statement/prospectus, as well as other filings containing information about the Company and Sunshine, without charge, at the SEC’s website (http://www.sec.gov). Copies of the definitive proxy statement/prospectus and the filings with the SEC that are incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to Corporate Secretary, CenterState Bank Corporation, 1101 First Street South, Winter Haven, FL 33880 or Corporate Secretary, Sunshine Bancorp, Inc. 102 West Baker Street, Plant City, FL 33563.  

 

Participants in the Solicitation


Sunshine and certain of its respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Sunshine transaction. Information regarding Sunshine’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 30, 2017, and certain of its Current Reports on Form 8-K.  Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the definitive proxy statement/prospectus and other relevant materials filed with the SEC, which may be obtained as described in the preceding paragraph.

 

HCBF Holding Company, Inc.

 

In connection with the proposed merger of the Company with Harbor, the Company has filed with the SEC a Registration Statement on Form S-4 (No. 333-220810) that includes a preliminary Joint Proxy Statement of  the Company and Harbor and a preliminary Prospectus of the Company, as well as other relevant documents concerning the proposed transaction.  The Company will file a definitive Joint Proxy Statement/ Prospectus under the Registration Statement in the future, along with certain additional documents concerning the proposed transaction. The proposed transaction involving the Company and Harbor will be submitted to the Company’s shareholders and Harbor’s stockholders for their consideration. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. SHAREHOLDERS OF THE COMPANY AND HARBOR ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY DO AND WILL CONTAIN IMPORTANT INFORMATION. Shareholders will be able to obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Company and Harbor, without charge, at the SEC’s website (http://www.sec.gov). Copies of the definitive joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to CenterState Bank Corporation, 1101 First Street South, Winter Haven, FL 33880 or Secretary, HCBF Holding Company, Inc., 200 S. Indian River Drive, Suite 101, Fort Pierce, FL 34950

 

Participants in the Solicitation

 

The Company and Harbor and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Harbor transaction. Information regarding the Company’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 2, 2017, and certain of its Current Reports on Form 8-K. Information regarding Harbor’s directors and executive officers is available in Harbor’s final prospectus filed by HCBF with the SEC on June 21, 2017 related to its Registration Statement on Form S-4 filed with the SEC on April 20, 2017, and certain of its Current Reports on Form 8-K. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. Free copies of this document, when it becomes available, may be obtained as described in the preceding paragraph.

 

 

3

 


 

Item 7.01

 

Regulation FD Disclosure

 

On October 19, 2017, the board of directors of the Company declared a quarterly cash dividend on its common stock of $0.06 per share.  The dividend is payable on December 29, 2017 to shareholders of record as of December 15, 2017.

 

 

Item 9.01

 

Financial Statements and Exhibits

 

 

 

 

 

 

(d)

Exhibits:

 

 

 

 

 

 

Exhibit 99.1

Press release dated October 24, 2017


4

 


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.  

 

 

 

CENTERSTATE BANK CORPORATION

 

 

 

 

By:

/s/ Jennifer L. Idell

 

 

Jennifer L. Idell

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

Date:  October 24, 2017

 

 

 

 

5

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

csfl-ex991_6.htm

Exhibit 99.1

 

 

 

 

 

FOR IMMEDIATE RELEASE

October 24, 2017

 

 

 

CenterState Bank Corporation Announces

Third Quarter 2017 Earnings Results

 

(all amounts are in thousands of dollars, except per share data, or unless otherwise noted)

 

WINTER HAVEN, FL. – October 24, 2017 - CenterState Bank Corporation (Nasdaq: CSFL) reported net income of $22,050, or diluted earnings per share of $0.36, for the third quarter of 2017, as compared to net income of $15,384, or diluted earnings per share of $0.32, for the third quarter of 2016.   Other highlights for the third quarter of 2017 include the following:

 

 

On August 12, 2017, the Company signed two separate definitive merger agreements to acquire HCBF Holding Company, Inc. (“Harbor) and Sunshine Bancorp, Inc. (“Sunshine”).   Upon completion of both mergers, the Company will become the largest community banking company headquartered in the state of Florida by assets, market capitalization, deposit market share and branch footprint(1).  On a pro forma basis, the resulting company is expected to have $10 billion in assets based on June 30, 2017 financial information.

 

 

On September 25, 2017, the Company announced its board of directors unanimously named Mark W. Thompson as President of its subsidiary bank, CenterState Bank, N.A.

 

 

On September 10 and 11, 2017, Hurricane Irma impacted the entire state of Florida which resulted in:

 

Temporary reduction in the Bank’s loan production of approximately $50 million from the previous two months

 

Additional loan loss provision by the Bank of approximately $750 thousand for potential credit losses

 

 

Net loan growth in the third quarter equaled 3% annualized (4.5% annualized excluding purchase credit impaired (“PCI”) loans).  Net loan growth for the nine months ended September 30, 2017 equaled 9% annualized, excluding loans acquired from the Company’s second quarter acquisitions of Platinum Bank Holding Company (“Platinum”) and Gateway Financial Holdings of Florida, Inc. (“Gateway”).  

 

 

Tax equivalent net interest margin (“NIM”) (Non-GAAP(2)) increased to 4.26% for the current quarter, compared to 4.12% for the third quarter of 2016. Cost of deposits during the current quarter equaled 0.23%.  Excluding the Gateway and Platinum deposit cost of 0.44%, cost of deposits equaled 0.18% during the current quarter compared to 0.18% in the third quarter of 2016.

 

 

 

Three Months Ended

 

 

September 30, 2017

 

June 30, 2017

 

September 30, 2016

 

 

 

 

Excluding

 

 

 

Excluding

 

 

 

Excluding

 

 

 

 

Merger

 

 

 

Merger

 

 

 

Merger

 

 

 

 

Related

 

 

 

Related

 

 

 

Related

 

 

As Reported

 

Expenses (3)

 

As Reported

 

Expenses (3)

 

As Reported

 

Expenses (3)

Net income

 

$22,050

 

$22,050

 

$15,233

 

$22,002

 

$15,384

 

$15,375

Return on average assets

 

1.29%

 

1.29%

 

0.95%

 

1.37%

 

1.22%

 

1.22%

Return on average tangible common equity (Non-GAAP)(2)

 

14.7%

 

14.7%

 

11.0%

 

15.7%

 

15.0%

 

15.0%

Earnings per share diluted

 

$0.36

 

$0.36

 

$0.26

 

$0.37

 

$0.32

 

$0.32

Efficiency ratio (Non-GAAP)(2)

 

55.2%

 

55.2%

 

68.9%

 

57.0%

 

58.7%

 

58.7%

 

 

 

Subsequent Event

 

On October 19, 2017, The board of directors of the Company declared a quarterly cash dividend on its common stock of $0.06 per share. The dividend is payable on December 29, 2017 to shareholders of record as of December 15, 2017.


 

(1)

Based on publicly available data on S&P Global Market Intelligence for companies with less than $20 billion in assets.

 

(2)

See reconciliation tables starting on page 8, Explanation of Certain Unaudited Non-GAAP Financial Measures.

 

(3)

Merger-related expenses represent direct severance, system terminations, and legal and professional fees that are not duplicative of current operations.  See reconciliation tables starting on page 8, Explanation of Certain Unaudited Non-GAAP Financial Measures.

 


Condensed Consolidated Income Statement (unaudited)

 

Condensed consolidated income statements (unaudited) are shown below for the periods indicated.  

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

Sept. 30, 2017

 

June 30, 2017

 

Mar. 31, 2017

 

Dec. 31, 2016

 

Sept. 30, 2016

 

Sept. 30, 2017

 

Sept. 30, 2016

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$59,122

 

$56,619

 

$44,249

 

$44,085

 

$41,445

 

$159,990

 

$119,540

Investment securities

 

7,048

 

7,289

 

6,203

 

5,531

 

5,746

 

20,540

 

17,298

Federal Funds sold and other

 

887

 

836

 

651

 

539

 

512

 

2,374

 

1,672

Total interest income

 

67,057

 

64,744

 

51,103

 

50,155

 

47,703

 

182,904

 

138,510

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

3,178

 

2,619

 

1,897

 

1,892

 

1,821

 

7,694

 

5,042

Securities sold under agreement to repurchase

 

80

 

47

 

30

 

23

 

25

 

157

 

80

Federal Funds purchased

 

866

 

728

 

537

 

393

 

240

 

2,131

 

761

Corporate debentures

 

347

 

333

 

318

 

313

 

298

 

998

 

836

Interest expense

 

4,471

 

3,727

 

2,782

 

2,621

 

2,384

 

10,980

 

6,719

Net interest income

 

62,586

 

61,017

 

48,321

 

47,534

 

45,319

 

171,924

 

131,791

Provision for loan losses

 

1,096

 

1,899

 

995

 

2,266

 

1,275

 

3,990

 

2,696

Net interest income after loan loss provision

 

61,490

 

59,118

 

47,326

 

45,268

 

44,044

 

167,934

 

129,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Correspondent banking and capital markets division income

 

7,213

 

8,062

 

6,449

 

8,091

 

7,528

 

21,724

 

25,594

Gain on sale of securities available for sale

 

 

 

 

 

13

 

 

13

FDIC- IA (negative accretion) (1)

 

 

 

 

 

 

 

(1,166)

FDIC- revenue (1)

 

 

 

 

 

 

 

96

Gain on early extinguishment of debt

 

 

 

 

 

 

 

308

All other non interest  income

 

9,528

 

8,912

 

8,053

 

9,065

 

8,140

 

26,493

 

22,368

Total non interest income

 

16,741

 

16,974

 

14,502

 

17,156

 

15,681

 

48,217

 

47,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Correspondent banking and capital markets division-expense

 

5,304

 

5,544

 

4,746

 

5,987

 

5,456

 

15,594

 

17,397

Credit related expenses

 

527

 

876

 

655

 

624

 

187

 

2,058

 

1,157

Merger related expenses

 

 

9,458

 

870

 

272

 

 

10,328

 

11,172

Termination of FDIC loss share agreements (1)

 

 

 

 

 

 

 

17,560

All other non interest  expense

 

38,791

 

38,931

 

31,772

 

31,301

 

30,752

 

109,494

 

89,011

Total non interest expense

 

44,622

 

54,809

 

38,043

 

38,184

 

36,395

 

137,474

 

136,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax

 

33,609

 

21,283

 

23,785

 

24,240

 

23,330

 

78,677

 

40,011

Income tax provision

 

11,559

 

6,050

 

7,185

 

8,213

 

7,946

 

24,794

 

13,697

Net income

 

$22,050

 

$15,233

 

$16,600

 

$16,027

 

$15,384

 

$53,883

 

$26,314

Net income allocated to common shares

 

$22,003

 

$15,200

 

$16,559

 

$15,970

 

$15,324

 

$53,762

 

$26,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - Basic

 

$0.37

 

$0.26

 

$0.33

 

$0.33

 

$0.32

 

$0.95

 

$0.55

Earnings per share - Diluted

 

$0.36

 

$0.26

 

$0.32

 

$0.33

 

$0.32

 

$0.94

 

$0.55

Dividends per share

 

$0.06

 

$0.06

 

$0.06

 

$0.04

 

$0.04

 

$0.18

 

$0.08

Average common shares outstanding (basic)

 

59,907

 

58,307

 

50,632

 

47,870

 

47,821

 

56,316

 

47,254

Average common shares outstanding (diluted)

 

61,115

 

59,370

 

51,408

 

48,800

 

48,603

 

57,330

 

47,955

Common shares outstanding at period end

 

60,053

 

60,003

 

51,126

 

48,147

 

48,017

 

60,053

 

48,017

Effective tax rate

 

34.39%

 

28.43%

 

30.21%

 

33.88%

 

34.06%

 

31.51%

 

34.23%

 

 

 

(1)

In February 2016, the Company terminated all existing loss share agreements with the FDIC.  As a result, the Company wrote off the remaining indemnification asset and the claw back liability, received cash from the FDIC, and recognized a net loss on the transaction of approximately $17,560 during the first quarter of 2016.


2

 


CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

 

Presented below are condensed consolidated balance sheets for the periods indicated.

 

 

 

 

Ending Balance

Condensed Consolidated Balance Sheets

 

Sept. 30, 2017

 

June 30, 2017

 

Mar. 31, 2017

 

Dec. 31, 2016

 

Sept. 30, 2016

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$119,233

 

$87,277

 

$65,114

 

$66,368

 

$37,460

Fed funds sold and Fed Res Bank deposits

 

182,996

 

211,037

 

214,369

 

109,286

 

161,406

Trading securities

 

2,973

 

1,934

 

 

12,383

 

2,166

Investment securities:

 

 

 

 

 

 

 

 

 

 

Available for sale

 

866,657

 

868,334

 

819,352

 

740,702

 

761,648

Held to maturity

 

237,874

 

238,798

 

243,812

 

250,543

 

263,692

Total investment securities

 

1,104,531

 

1,107,132

 

1,063,164

 

991,245

 

1,025,340

Loans held for sale

 

12,243

 

8,959

 

2,637

 

2,285

 

2,333

Loans:

 

 

 

 

 

 

 

 

 

 

Originated loans

 

2,756,847

 

2,610,859

 

2,397,021

 

2,250,631

 

2,069,272

Acquired loans

 

1,760,745

 

1,856,310

 

946,925

 

993,192

 

1,027,922

PCI loans

 

163,975

 

179,364

 

176,058

 

185,924

 

197,288

Total gross loans

 

4,681,567

 

4,646,533

 

3,520,004

 

3,429,747

 

3,294,482

Allowance for loan losses

 

(31,828)

 

(30,132)

 

(27,819)

 

(27,041)

 

(25,499)

Loans, net of allowance

 

4,649,739

 

4,616,401

 

3,492,185

 

3,402,706

 

3,268,983

Premises and equipment, net

 

141,605

 

140,820

 

115,400

 

114,815

 

114,567

Goodwill

 

257,683

 

257,683

 

106,028

 

106,028

 

105,492

Core deposit intangible

 

25,140

 

26,217

 

14,785

 

15,510

 

16,267

Bank owned life insurance

 

145,755

 

115,234

 

99,065

 

98,424

 

97,767

OREO

 

5,904

 

6,422

 

7,201

 

7,090

 

9,005

Deferred income tax asset, net

 

56,160

 

58,841

 

56,792

 

63,208

 

58,614

Other assets

 

118,899

 

129,522

 

92,256

 

89,211

 

115,112

Total Assets

 

$6,822,861

 

$6,767,479

 

$5,328,996

 

$5,078,559

 

$5,014,512

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

     Non-interest bearing

 

$1,915,662

 

$1,926,047

 

$1,585,963

 

$1,426,624

 

$1,406,030

     Interest bearing

 

996,861

 

990,242

 

893,945

 

917,004

 

814,123

Total checking accounts

 

2,912,523

 

2,916,289

 

2,479,908

 

2,343,628

 

2,220,153

Money market accounts

 

1,156,217

 

1,178,109

 

910,056

 

900,532

 

903,697

Savings deposits

 

511,286

 

519,964

 

384,202

 

362,947

 

352,547

Time deposits

 

845,444

 

861,093

 

522,957

 

545,437

 

579,537

Total deposits

 

$5,425,470

 

$5,475,455

 

$4,297,123

 

$4,152,544

 

$4,055,934

Federal funds purchased

 

335,531

 

256,611

 

268,377

 

261,986

 

258,329

Other borrowings

 

72,234

 

73,089

 

63,882

 

54,385

 

52,788

Other liabilities

 

80,004

 

72,066

 

65,213

 

57,187

 

94,690

Common stockholders’ equity

 

909,622

 

890,258

 

634,401

 

552,457

 

552,771

Total Liabilities and

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

$6,822,861

 

$6,767,479

 

$5,328,996

 

$5,078,559

 

$5,014,512

 

LOANS  

 

Total loans increased $35,034 during the quarter, for an annualized growth rate of approximately 3%.  Net loan growth for the nine months ended September 30, 2017 equaled 9% annualized, excluding loans acquired from second quarter acquisitions of Platinum and Gateway.  The loan to deposit ratio increased to 86% from 85% in the prior quarter, and from 81% in the same quarter in 2016. 

 

 

DEPOSITS

 

Total deposits decreased by $49,985, or approximately 4% on an annualized basis, during the current quarter. The decrease in deposits during the current quarter was mainly attributable to a temporary decline in balances of title companies and attorneys and seasonality.  Total checking account balances represent 54% of total deposits.    The overall cost of total deposits (i.e. includes non-interest bearing checking accounts) during the current quarter totaled 0.23%, compared to 0.20% in the previous quarter.  


3

 


SELECTED CONSOLIDATED FINANCIAL DATA

 

The table below summarizes selected financial data for the periods presented.

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

Sept. 30, 2017

 

June 30, 2017

 

Mar. 31, 2017

 

Dec. 31, 2016

 

Sept. 30, 2016

 

Sept. 30, 2017

 

Sept. 30, 2016

Selected financial data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

1.29%

 

0.95%

 

1.29%

 

1.25%

 

1.22%

 

1.17%

 

0.74%

Return on average equity (annualized)

 

9.71%

 

7.27%

 

10.92%

 

11.51%

 

11.21%

 

9.16%

 

6.70%

Return on average tangible equity (annualized) (Non-GAAP) (1)

 

14.68%

 

10.99%

 

14.06%

 

15.26%

 

14.95%

 

13.23%

 

12.80%

Efficiency ratio (tax equivalent) (Non-GAAP) (1)

 

55.2%

 

68.9%

 

59.3%

 

58.1%

 

58.7%

 

61.3%

 

65.6%

Dividend payout

 

16.7%

 

23.1%

 

18.8%

 

12.1%

 

12.5%

 

19.1%

 

21.8%

Loan / deposit ratio

 

86.3%

 

84.9%

 

81.9%

 

82.6%

 

81.2%

 

 

 

 

Stockholders’ equity (to total assets)

 

13.3%

 

13.2%

 

11.9%

 

10.9%

 

11.0%

 

 

 

 

Common equity per common share

 

$15.15

 

$14.84

 

$12.41

 

$11.47

 

$11.51

 

 

 

 

Tangible common equity per common share (Non-GAAP) (1)

 

$10.42

 

$10.09

 

$10.03

 

$8.93

 

$8.96

 

 

 

 

Common tangible equity (to total tangible assets) (Non-GAAP) (1)

 

9.6%

 

9.3%

 

9.8%

 

8.7%

 

8.8%

 

 

 

 

Tier 1 capital (to average assets)

 

9.9%

 

10.0%

 

10.4%

 

9.1%

 

9.0%

 

 

 

 

 

 

 

(1)

See reconciliation tables starting on page 8, Explanation of Certain Unaudited Non-GAAP Financial Measures.

 

NET INTEREST MARGIN (“NIM”)

 

The Company’s NIM decreased 12 basis points from 4.38% in the previous quarter to 4.26% during the current quarter due to a reduction in PCI loan accretion of 9 basis points (“bps”).  The tax equivalent yield on new loan production increased by 13 basis points from 4.31% in the prior quarter to 4.44% during the current quarter. 

 

The table below summarizes yields and costs by various interest earning asset and interest bearing liability account types for the current quarter, the previous calendar quarter and the same quarter last year.  

 

 

Three Months Ended

 

Sept. 30, 2017

 

June 30, 2017

 

Sept. 30, 2016

 

Average

 

Interest

 

Average

 

Average

 

Interest

 

Average

 

Average

 

Interest

 

Average

 

Balance

 

Inc/Exp

 

Rate

 

Balance

 

Inc/Exp

 

Rate

 

Balance

 

Inc/Exp

 

Rate

Loans (1)

$4,492,543

 

$52,254

 

4.61%

 

$4,235,557

 

$48,922

 

4.63%

 

$3,037,333

 

$34,071

 

4.46%

PCI loans

170,924

 

7,696

 

17.86%

 

181,207

 

8,559

 

18.95%

 

207,406

 

7,795

 

14.95%

Taxable securities

926,367

 

5,648

 

2.42%

 

939,090

 

5,961

 

2.55%

 

900,514

 

4,693

 

2.07%

Tax -exempt securities (1)

196,988

 

2,082

 

4.19%

 

194,316

 

1,975

 

4.08%

 

134,576

 

1,581

 

4.67%

Fed funds sold and other

177,254

 

887

 

1.99%

 

180,261

 

836

 

1.86%

 

187,906

 

512

 

1.08%

Tot. interest earning assets (1)

$5,964,076

 

$68,567

 

4.56%

 

$5,730,431

 

$66,253

 

4.64%

 

$4,467,735

 

$48,652

 

4.33%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest earnings assets

796,143

 

 

 

 

 

726,950

 

 

 

 

 

535,632

 

 

 

 

Total Assets

$6,760,219

 

 

 

 

 

$6,457,381

 

 

 

 

 

$5,003,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

$3,507,381

 

$3,178

 

0.36%

 

$3,324,382

 

$2,619

 

0.32%

 

$2,678,638

 

$1,821

 

0.27%

Fed funds purchased

257,967

 

819

 

1.26%

 

253,851

 

692

 

1.09%

 

181,037

 

238

 

0.52%

Other borrowings

61,149

 

127

 

0.82%

 

56,414

 

83

 

0.59%

 

28,847

 

27

 

0.37%

Corporate debentures

26,103

 

347

 

5.27%

 

26,045

 

333

 

5.13%

 

25,852

 

298

 

4.59%

Total interest bearing liabilities

$3,852,600

 

$4,471

 

0.46%

 

$3,660,692

 

$3,727

 

0.41%

 

$2,914,374

 

$2,384

 

0.33%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

1,926,070

 

 

 

 

 

1,891,968

 

 

 

 

 

1,445,140

 

 

 

 

All other liabilities

81,057

 

 

 

 

 

64,668

 

 

 

 

 

97,830

 

 

 

 

Shareholders' equity

900,492

 

 

 

 

 

840,053

 

 

 

 

 

546,023

 

 

 

 

Total liabilities and shareholders' equity

$6,760,219

 

 

 

 

 

$6,457,381

 

 

 

 

 

$5,003,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Spread (1)

 

 

 

 

4.10%

 

 

 

 

 

4.23%

 

 

 

 

 

4.00%

Net Interest Margin (1)

 

 

 

 

4.26%

 

 

 

 

 

4.38%

 

 

 

 

 

4.12%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Total Deposits

 

 

 

 

0.23%

 

 

 

 

 

0.20%

 

 

 

 

 

0.18%

 

 

(1)

Tax equivalent yield (Non-GAAP); see reconciliation tables starting on page 8, Explanation of Certain Unaudited Non-GAAP Financial Measures.

 

 

 

 

 

4

 


CREDIT QUALITY AND ALLOWANCE FOR LOAN LOSSES

 

Non-performing assets (“NPAs”) totaled $25,270 at September 30, 2017, compared to $26,469 at June 30, 2017.  The net decrease in NPAs resulted from decreases in nonaccrual loans and other real estate owned of $597 and $518, respectively.  NPAs as a percentage of total assets declined to 0.37% at September 30, 2017, compared to 0.39% at June 30, 2017.  

 

The table below summarizes selected credit quality data for the periods indicated.  

 

 

 

Ending Balance

 

 

 

 

Non-Performing Assets (1)

 

Sept. 30, 2017

 

June 30, 2017

 

Mar. 31, 2017

 

Dec. 31, 2016

 

Sept. 30, 2016

 

 

 

 

Non-accrual loans

 

19,319

 

$19,916

 

$17,569

 

$19,003

 

$19,704

 

 

 

 

Past due loans 90 days or more

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     and still accruing interest

 

 

 

 

 

 

 

 

 

Total non-performing loans (“NPLs”)

 

19,319

 

19,916

 

17,569

 

19,003

 

19,704

 

 

 

 

Other real estate owned (“OREO”)

 

5,904

 

6,422

 

7,201

 

7,090

 

9,005

 

 

 

 

Repossessed assets other than real estate

 

47

 

131

 

118

 

114

 

170

 

 

 

 

Total non-performing assets

 

$25,270

 

$26,469

 

$24,888

 

$26,207

 

$28,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

Asset Quality Ratios (1)

 

Sept. 30, 2017

 

June 30, 2017

 

Mar. 31, 2017

 

Dec. 31, 2016

 

Sept. 30, 2016

 

Sept. 30, 2017

 

Sept. 30, 2016

Non-performing loans as percentage of total loans

 

0.43%

 

0.45%

 

0.53%

 

0.59%

 

0.64%

 

 

 

 

Non-performing assets as percentage of total assets

 

0.37%

 

0.39%

 

0.47%

 

0.52%

 

0.58%

 

 

 

 

Non-performing assets as percentage of loans and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   OREO plus other repossessed assets

 

0.56%

 

0.59%

 

0.74%

 

0.81%

 

0.93%

 

 

 

 

Loans past due 30 thru 89 days and accruing interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    as a percentage of total loans

 

0.54%

 

0.27%

 

0.47%

 

0.58%

 

0.36%

 

 

 

 

Allowance for loan losses as percentage of NPLs

 

163%

 

149%

 

157%

 

140%

 

128%

 

 

 

 

Net (recoveries) charge-offs

 

($600)

 

($349)

 

$217

 

$724

 

($118)

 

($732)

 

($605)

Net (recoveries) charge-offs as a percentage of average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    loans for the period on an annualized basis

 

(0.05%)

 

(0.03%)

 

0.03%

 

0.09%

 

(0.02%)

 

(0.02%)

 

(0.03%)

 

 

(1)

Excludes PCI loans.

 

The allowance for loan losses (“ALLL") totaled $31,828 at September 30, 2017, compared to $30,132 at June 30, 2017, an increase of $1,696 due to loan loss provision expense of $1,096 and net recoveries of $600. The changes in the Company’s ALLL components between September 30, 2017 and June 30, 2017 are summarized in the table below (unaudited).

 

 

 

Sept. 30, 2017

 

 

June 30, 2017

 

 

Increase (Decrease)

 

 

Loan

 

ALLL

 

 

 

 

 

Loan

 

ALLL

 

 

 

 

 

Loan

 

ALLL

 

 

 

 

Balance

 

Balance

 

%

 

 

Balance

 

Balance

 

%

 

 

Balance

 

Balance

 

 

Originated loans

 

$

2,739,348

 

$

28,243

 

 

1.03

%

 

$

2,593,576

 

$

26,280

 

 

1.01

%

 

$

145,772

 

$

1,963

 

2 bps

Impaired originated loans

 

 

17,499

 

 

843

 

 

4.82

%

 

 

17,283

 

850

 

 

4.92

%

 

 

216

 

 

(7

)

(10) bps

Total originated loans

 

 

2,756,847

 

 

29,086

 

 

1.06

%

 

 

2,610,859

 

 

27,130

 

 

1.04

%

 

 

145,988

 

 

1,956

 

2 bps