Veritex Holdings, Inc. Reports Fourth Quarter and Record Year-End 2018 Results, Initiates Dividend and Announces Stock Buyback Program
Fourth Quarter 2018 Financial Highlights:
- Diluted EPS was
$0.40 and diluted operating EPS was$0.47 for the fourth quarter of 2018
- Total loans increased
$110.8 million , or 18.12% annualized during the fourth quarter of 2018
- NIM expanded to 3.82%1 for the fourth quarter 2018 compared to 3.73%1 for the third quarter of 2018 excluding cash collections in excess of expected cash flows on purchased credit impaired ("PCI") loans
- Announced initiation of a regular quarterly cash dividend of
$0.125
- Announced stock buyback program to purchase up to
$50.0 million during 2019 of our outstanding common stock
Veritex | Green | |||||||||||||||
Q4 2018 | Q3 2018 | Q4 2018 | Q3 2018 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
GAAP | ||||||||||||||||
Net income available to common stockholders | $ | 9,825 | $ | 8,935 | $ | 15,327 | $ | 15,597 | ||||||||
Diluted EPS | 0.40 | 0.36 | 0.41 | 0.41 | ||||||||||||
Return on average assets2 | 1.20 | % | 1.10 | % | 1.37 | % | 1.42 | % | ||||||||
Efficiency ratio | 54.27 | 57.58 | 50.52 | 53.64 | ||||||||||||
Net loan growth2, 4 | 18.12 | 4.40 | 4.06 | 17.83 | ||||||||||||
Book value per common share | $ | 21.88 | $ | 21.38 | $ | 13.66 | $ | 13.12 | ||||||||
Non-GAAP3 | ||||||||||||||||
Operating net income available to common stockholders | $ | 11,457 | $ | 10,401 | $ | 16,559 | $ | 18,552 | ||||||||
Diluted operating EPS | 0.47 | 0.42 | 0.44 | 0.49 | ||||||||||||
Operating return on average assets2 | 1.40 | % | 1.28 | % | 1.49 | % | 1.69 | % | ||||||||
Operating efficiency ratio | 50.65 | 49.09 | 47.77 | 47.07 | ||||||||||||
Return on average tangible common equity2 | 12.12 | 11.41 | 15.20 | 16.01 | ||||||||||||
Operating return on average tangible common equity2 | 13.99 | 13.14 | 16.40 | 19.00 | ||||||||||||
Tangible book value per common share | $ | 14.57 | $ | 14.02 | $ | 11.18 | $ | 10.63 |
1 Excludes
2 Annualized ratio.
3 Refer to "Reconciliation of Non-GAAP Financial Measures" after the financial highlights of
4 Loan growth for Green includes
"2018 has been another transformational year for the Company and with the consummation of the merger with Green on
Discussion of
Result of Operations for the Three Months Ended
Net Interest Income
For the three months ended
Net interest income before provision for loan losses increased by
Noninterest Income
Noninterest income for the three months ended
Compared to the three months ended
Noninterest Expense
Noninterest expense was
Compared to the three months ended
Financial Condition
Total loans were
Total deposits were
Asset Quality
Allowance for loan losses as a percentage of loans was 0.75%, 0.73% and 0.57% of total loans held for investment at December 31, 2018, September 30, 2018 and December 31, 2017, respectively. The allowance for loan losses as a percentage of total loans for each of the three quarters ended was determined by an evaluation of the qualitative factors around the nature, volume and mix of the loan portfolio. The increase at
Nonperforming assets totaled
Discussion of Green Q4 Results
Result of Operations for the Three Months Ended
Net Interest Income
For the three months ended
Compared to the three months ended
Noninterest Income
Noninterest income for the three months ended
Noninterest income for the three months ended
Noninterest Expense
Noninterest expense was
Compared to the three months ended
Financial Condition
Total loans were
Total deposits were
Asset Quality
Allowance for loan losses as a percentage of loans was 0.98%, 1.05% and 0.98% of total loans held for investment at December 31, 2018, September 30, 2018 and December 31, 2017, respectively. The allowance for loan losses as a percentage of total loans for each of the three quarters ended was determined by loss migration analysis and a review of the qualitative factors and specific reserves for impaired loans. A provision for loan losses of
Nonperforming assets totaled
Dividend Information
On
Non-GAAP Financial Measures
The Company’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Specifically, the Company reviews and reports tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, operating earnings, pre-tax, pre-provision operating earnings, diluted operating earnings per share, operating return on average assets, operating return on average tangible common equity and operating efficiency ratio. The Company has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for both
Conference Call
The Company will host an investor conference call to review the results on
The call and corresponding presentation slides will be webcast live on the home page of the Company's website, www.veritexbank.com. An audio replay will be available one hour after the conclusion of the call at (855) 859-2056, Conference #6808679. This replay, as well as the webcast, will be available until
About
Headquartered in
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on various facts and derived utilizing assumptions and current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements include, without limitation, statements relating to the impact
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars and shares in thousands) | ||||||||||||||||||||||||||||
Per Share Data (Common Stock): | ||||||||||||||||||||||||||||
Basic EPS | $ | 0.41 | $ | 0.37 | $ | 0.42 | $ | 0.43 | $ | 0.14 | $ | 1.63 | $ | 0.82 | ||||||||||||||
Diluted EPS | 0.40 | 0.36 | 0.42 | 0.42 | 0.14 | 1.60 | 0.80 | |||||||||||||||||||||
Book value per common share | 21.88 | 21.38 | 21.03 | 20.60 | 20.28 | 21.88 | 20.28 | |||||||||||||||||||||
Tangible book value per common share1 | 14.57 | 14.02 | 13.63 | 13.14 | 12.75 | 14.57 | 12.75 | |||||||||||||||||||||
Common Stock Data: | ||||||||||||||||||||||||||||
Shares outstanding at period end | 24,251 | 24,192 | 24,181 | 24,149 | 24,110 | 24,251 | 24,110 | |||||||||||||||||||||
Weighted average basic shares outstanding for the period | 24,224 | 24,176 | 24,148 | 24,120 | 23,124 | 24,169 | 18,404 | |||||||||||||||||||||
Weighted average diluted shares outstanding for the period | 24,532 | 24,613 | 24,546 | 24,539 | 23,524 | 24,590 | 18,810 | |||||||||||||||||||||
Summary Performance Ratios: | ||||||||||||||||||||||||||||
Return on average assets2 | 1.20 | % | 1.10 | % | 1.34 | % | 1.41 | % | 0.48 | % | 1.26 | % | 0.76 | % | ||||||||||||||
Pre-tax, pre-provision operating return on average assets1, 2 | 1.95 | 1.98 | 2.03 | 2.14 | 2.07 | 2.02 | 1.81 | |||||||||||||||||||||
Return on average equity2 | 7.44 | 6.88 | 8.11 | 8.55 | 2.78 | 7.73 | 4.54 | |||||||||||||||||||||
Return on average tangible common equity1, 2 | 12.12 | 11.41 | 13.53 | 14.70 | 4.93 | 12.89 | 6.27 | |||||||||||||||||||||
Efficiency ratio | 54.27 | 57.58 | 53.51 | 54.28 | 53.60 | 54.92 | 56.24 | |||||||||||||||||||||
Selected Performance Metrics - Operating: | ||||||||||||||||||||||||||||
Diluted operating EPS1 | $ | 0.47 | $ | 0.42 | $ | 0.46 | $ | 0.50 | $ | 0.31 | $ | 1.84 | $ | 1.08 | ||||||||||||||
Operating return on average assets1, 2 | 1.40 | % | 1.28 | % | 1.47 | % | 1.65 | % | 1.09 | % | 1.45 | % | 1.03 | % | ||||||||||||||
Operating return on average tangible common equity1, 2 | 13.99 | 13.14 | 14.82 | 16.99 | 10.26 | 14.68 | 8.32 | |||||||||||||||||||||
Operating efficiency ratio1 | 50.65 | 49.09 | 48.67 | 49.94 | 49.98 | 49.60 | 52.70 | |||||||||||||||||||||
Veritex Holdings, Inc. Capital Ratios: | ||||||||||||||||||||||||||||
Average stockholders' equity to average total assets | 16.14 | % | 15.92 | % | 16.48 | % | 16.48 | % | 17.26 | % | 16.25 | % | 16.81 | % | ||||||||||||||
Tier 1 capital to average assets (leverage) | 12.04 | 11.74 | 12.08 | 11.84 | 12.92 | 12.04 | 12.92 | |||||||||||||||||||||
Common equity tier 1 capital | 11.80 | 12.02 | 12.17 | 12.04 | 12.03 | 11.80 | 12.03 | |||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 12.18 | 12.43 | 12.60 | 12.48 | 12.48 | 12.18 | 12.48 | |||||||||||||||||||||
Total capital to risk-weighted assets | 12.98 | 13.22 | 13.31 | 13.17 | 13.16 | 12.98 | 13.16 | |||||||||||||||||||||
Tangible common equity to tangible assets1 | 11.66 | 10.95 | 11.15 | 11.01 | 11.12 | 11.66 | 11.12 | |||||||||||||||||||||
Veritex Bank Capital Ratios: | ||||||||||||||||||||||||||||
Tier 1 capital to average assets (leverage) | 10.87 | % | 10.53 | % | 10.70 | % | 10.39 | % | 11.28 | % | 10.87 | % | 11.28 | % | ||||||||||||||
Common equity tier 1 capital | 11.01 | % | 11.13 | % | 11.16 | % | 10.94 | % | 10.88 | % | 11.01 | % | 10.88 | % | ||||||||||||||
Tier 1 capital to risk-weighted assets | 11.01 | % | 11.13 | % | 11.16 | % | 10.94 | % | 10.88 | % | 11.01 | % | 10.88 | % | ||||||||||||||
Total capital to risk-weighted assets | 11.64 | % | 11.75 | % | 11.70 | % | 11.45 | % | 11.37 | % | 11.64 | % | 11.37 | % |
1 Refer to "Reconciliation of Non-GAAP Financial Measures" after the financial highlights of
2 Annualized ratio.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Period End Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 84,449 | $ | 261,790 | $ | 146,740 | $ | 195,194 | $ | 149,044 | ||||||||||
Investment securities | 262,695 | 256,237 | 252,187 | 243,164 | 228,117 | |||||||||||||||
Loans held for sale | 1,258 | 1,425 | 453 | 893 | 841 | |||||||||||||||
Loans held for investment | 2,555,494 | 2,444,499 | 2,418,886 | 2,316,065 | 2,233,490 | |||||||||||||||
Total Loans | 2,556,752 | 2,445,924 | 2,419,339 | 2,316,958 | 2,234,331 | |||||||||||||||
Allowance for loan losses | (19,255 | ) | (17,909 | ) | (14,842 | ) | (13,401 | ) | (12,808 | ) | ||||||||||
Accrued interest receivable | 8,828 | 8,291 | 8,137 | 7,127 | 7,676 | |||||||||||||||
Bank-owned life insurance | 22,064 | 21,915 | 21,767 | 21,620 | 21,476 | |||||||||||||||
Bank premises, furniture and equipment, net | 78,409 | 77,346 | 76,348 | 76,045 | 75,251 | |||||||||||||||
Non-marketable equity securities | 22,822 | 27,417 | 27,086 | 20,806 | 13,732 | |||||||||||||||
Investment in unconsolidated subsidiary | 352 | 352 | 352 | 352 | 352 | |||||||||||||||
Other real estate owned | — | — | — | 10 | 449 | |||||||||||||||
Intangible assets, net | 15,896 | 16,603 | 17,482 | 18,372 | 20,441 | |||||||||||||||
Goodwill | 161,447 | 161,447 | 161,447 | 161,685 | 159,452 | |||||||||||||||
Other assets | 14,091 | 16,433 | 15,831 | 13,634 | 14,518 | |||||||||||||||
Branch assets held for sale | — | — | 1,753 | 1,753 | 33,552 | |||||||||||||||
Total assets | $ | 3,208,550 | $ | 3,275,846 | $ | 3,133,627 | $ | 3,063,319 | $ | 2,945,583 | ||||||||||
Noninterest-bearing deposits | $ | 626,283 | $ | 661,754 | $ | 611,315 | $ | 597,236 | $ | 612,830 | ||||||||||
Interest-bearing transaction and savings deposits | 1,313,161 | 1,346,264 | 1,252,774 | 1,354,757 | 1,200,487 | |||||||||||||||
Certificates and other time deposits | 682,984 | 648,236 | 626,329 | 541,801 | 465,313 | |||||||||||||||
Total deposits | 2,622,428 | 2,656,254 | 2,490,418 | 2,493,794 | 2,278,630 | |||||||||||||||
Accounts payable and accrued expenses | 5,413 | 6,875 | 4,130 | 3,862 | 5,098 | |||||||||||||||
Accrued interest payable and other liabilities | 5,361 | 5,759 | 5,856 | 3,412 | 5,446 | |||||||||||||||
Advances from Federal Home Loan Bank | 28,019 | 73,055 | 108,092 | 48,128 | 71,164 | |||||||||||||||
Subordinated debentures and subordinated notes | 16,691 | 16,691 | 16,690 | 16,690 | 16,689 | |||||||||||||||
Other borrowings | — | — | — | — | 15,000 | |||||||||||||||
Branch liabilities held for sale | — | — | — | — | 64,627 | |||||||||||||||
Total liabilities | 2,677,912 | 2,758,634 | 2,625,186 | 2,565,886 | 2,456,654 | |||||||||||||||
Stockholders’ equity | 530,638 | 517,212 | 508,441 | 497,433 | 488,929 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,208,550 | $ | 3,275,846 | $ | 3,133,627 | $ | 3,063,319 | $ | 2,945,583 | ||||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Loans, including fees | $ | 35,028 | $ | 35,074 | $ | 32,291 | $ | 32,067 | $ | 28,182 | $ | 134,460 | $ | 73,795 | ||||||||||||||
Investment securities | 1,908 | 1,722 | 1,647 | 1,328 | 1,211 | 6,605 | 3,462 | |||||||||||||||||||||
Deposits in other banks | 833 | 1,016 | 613 | 687 | 500 | 3,149 | 2,287 | |||||||||||||||||||||
Other investments | 5 | 6 | 4 | 5 | 4 | 20 | 8 | |||||||||||||||||||||
Total interest income | 37,774 | 37,818 | 34,555 | 34,087 | 29,897 | 144,234 | 79,552 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Transaction and savings deposits | 5,412 | 4,694 | 4,204 | 3,289 | 2,397 | 17,599 | 8,981 | |||||||||||||||||||||
Certificates and other time deposits | 3,394 | 3,068 | 2,248 | 1,004 | 1,280 | 9,714 | 897 | |||||||||||||||||||||
Advances from FHLB | 377 | 630 | 234 | 460 | 213 | 1,701 | 531 | |||||||||||||||||||||
Subordinated debentures and subordinated notes | 304 | 250 | 245 | 232 | 257 | 1,031 | 635 | |||||||||||||||||||||
Total interest expense | 9,487 | 8,642 | 6,931 | 4,985 | 4,147 | 30,045 | 11,044 | |||||||||||||||||||||
Net interest income | 28,287 | 29,176 | 27,624 | 29,102 | 25,750 | 114,189 | 68,508 | |||||||||||||||||||||
Provision for loan losses | 1,364 | 3,057 | 1,504 | 678 | 2,529 | 6,603 | 5,114 | |||||||||||||||||||||
Net interest income after provision for loan losses | 26,923 | 26,119 | 26,120 | 28,424 | 23,221 | 107,586 | 63,394 | |||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Service charges and fees on deposit accounts | 832 | 809 | 846 | 933 | 769 | 3,420 | 2,502 | |||||||||||||||||||||
Loan fees | 387 | 410 | 261 | 274 | 206 | 1,332 | 657 | |||||||||||||||||||||
(Loss) gain on sales of investment securities, net | (42 | ) | (34 | ) | 4 | 8 | 17 | (64 | ) | 222 | ||||||||||||||||||
Gain on sales of loans and other assets owned | 1,789 | 270 | 416 | 581 | 882 | 3,056 | 3,141 | |||||||||||||||||||||
Rental income | 310 | 414 | 452 | 478 | 139 | 1,654 | 139 | |||||||||||||||||||||
Other | 751 | 641 | 613 | 507 | 285 | 2,512 | 915 | |||||||||||||||||||||
Total noninterest income | 4,027 | 2,510 | 2,592 | 2,781 | 2,298 | 11,910 | 7,576 | |||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 8,278 | 7,394 | 7,657 | 7,809 | 7,357 | 31,138 | 20,828 | |||||||||||||||||||||
Occupancy and equipment | 2,412 | 2,890 | 2,143 | 3,234 | 1,996 | 10,679 | 5,618 | |||||||||||||||||||||
Professional and regulatory fees | 1,889 | 1,893 | 1,528 | 1,972 | 811 | 7,282 | 4,158 | |||||||||||||||||||||
Data processing and software expense | 888 | 697 | 689 | 746 | 766 | 3,020 | 2,217 | |||||||||||||||||||||
Marketing | 570 | 306 | 446 | 461 | 388 | 1,783 | 1,293 | |||||||||||||||||||||
Amortization of intangibles | 835 | 798 | 856 | 978 | 551 | 3,467 | 964 | |||||||||||||||||||||
Telephone and communications | 223 | 236 | 414 | 426 | 282 | 1,299 | 720 | |||||||||||||||||||||
Merger and acquisition expenses | 1,150 | 2,692 | 1,043 | 335 | 1,018 | 5,220 | 2,691 | |||||||||||||||||||||
Other | 1,293 | 1,340 | 1,393 | 1,345 | 1,866 | 5,371 | 4,300 | |||||||||||||||||||||
Total noninterest expense | 17,538 | 18,246 | 16,169 | 17,306 | 15,035 | 69,259 | 42,789 | |||||||||||||||||||||
Net income from operations | 13,412 | 10,383 | 12,543 | 13,899 | 10,484 | 50,237 | 28,181 | |||||||||||||||||||||
Income tax expense | 3,587 | 1,448 | 2,350 | 3,511 | 7,227 | 10,896 | 13,029 | |||||||||||||||||||||
Net income | 9,825 | 8,935 | 10,193 | 10,388 | 3,257 | 39,341 | 15,152 | |||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | 42 | |||||||||||||||||||||
Net income available to common stockholders | $ | 9,825 | $ | 8,935 | $ | 10,193 | $ | 10,388 | $ | 3,257 | $ | 39,341 | $ | 15,110 | ||||||||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
For the Quarter Ended | |||||||||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Loans1 | $ | 2,502,084 | $ | 35,028 | 5.55 | % | $ | 2,432,095 | $ | 35,074 | 5.72 | % | $ | 2,030,587 | $ | 28,182 | 5.51 | % | |||||||||||||||
Investment securities | 263,182 | 1,908 | 2.88 | 254,242 | 1,722 | 2.69 | 233,244 | 1,211 | 2.06 | ||||||||||||||||||||||||
Interest-earning deposits in financial institutions | 136,879 | 833 | 2.41 | 203,750 | 1,016 | 1.98 | 145,099 | 500 | 1.37 | ||||||||||||||||||||||||
Other investments | 352 | 5 | 5.64 | 352 | 6 | 6.76 | 352 | 4 | 4.51 | ||||||||||||||||||||||||
Total interest-earning assets | 2,902,497 | 37,774 | 5.16 | 2,890,439 | 37,818 | 5.19 | 2,409,282 | 29,897 | 4.92 | ||||||||||||||||||||||||
Allowance for loan losses | (18,338 | ) | (16,160 | ) | (10,658 | ) | |||||||||||||||||||||||||||
Noninterest-earning assets | 359,009 | 358,935 | 292,664 | ||||||||||||||||||||||||||||||
Total assets | $ | 3,243,168 | $ | 3,233,214 | $ | 2,691,288 | |||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 1,337,901 | 5,412 | 1.60 | % | $ | 1,278,798 | $ | 4,694 | 1.46 | % | $ | 1,091,711 | 2,397 | 0.87 | % | |||||||||||||||||
Certificates and other time deposits | 655,776 | 3,394 | 2.05 | 655,034 | 3,068 | 1.86 | 478,239 | 1,280 | 1.06 | ||||||||||||||||||||||||
Advances from FHLB | 52,436 | 377 | 2.85 | 120,114 | 630 | 2.08 | 74,589 | 213 | 1.13 | ||||||||||||||||||||||||
Subordinated debentures and subordinated notes | 16,691 | 304 | 7.23 | 16,690 | 250 | 5.94 | 25,398 | 257 | 4.01 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 2,062,804 | 9,487 | 1.82 | 2,070,636 | 8,642 | 1.66 | 1,669,937 | 4,147 | 0.98 | ||||||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 643,958 | 635,952 | 542,918 | ||||||||||||||||||||||||||||||
Other liabilities | 12,816 | 11,750 | 13,819 | ||||||||||||||||||||||||||||||
Total liabilities | 2,719,578 | 2,718,338 | 2,226,674 | ||||||||||||||||||||||||||||||
Stockholders’ equity | 523,590 | 514,876 | 464,614 | ||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,243,168 | $ | 3,233,214 | $ | 2,691,288 | |||||||||||||||||||||||||||
Net interest rate spread2 | 3.34 | % | 3.53 | % | 3.94 | % | |||||||||||||||||||||||||||
Net interest income and margin3 | $ | 28,287 | 3.87 | % | $ | 29,176 | 4.00 | % | $ | 25,750 | 4.24 | % |
1 Includes average outstanding balances of loans held for sale of
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
For the Year Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans1 | $ | 2,382,946 | $ | 134,460 | 5.64 | % | $ | 1,441,295 | $ | 73,795 | 5.12 | % | ||||||||||
Investment securities | 247,163 | 6,605 | 2.67 | % | 170,253 | 3,462 | 2.03 | % | ||||||||||||||
Interest-earning deposits in financial institutions | 160,402 | 3,149 | 1.96 | % | 202,314 | 2,287 | 1.13 | % | ||||||||||||||
Other investments | 340 | 20 | 5.88 | % | 202 | 8 | 3.96 | % | ||||||||||||||
Total interest-earning assets | 2,790,851 | 144,234 | 5.17 | % | 1,814,064 | 79,552 | 4.39 | % | ||||||||||||||
Allowance for loan losses | (15,324 | ) | (9,567 | ) | ||||||||||||||||||
Noninterest-earning assets | 356,901 | 176,471 | ||||||||||||||||||||
Total assets | $ | 3,132,428 | $ | 1,980,968 | ||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand and savings deposits | $ | 1,277,186 | 17,599 | 1.38 | % | $ | 871,212 | 8,981 | 1.03 | % | ||||||||||||
Certificates and other time deposits | 608,041 | 9,714 | 1.60 | % | 279,821 | 897 | 0.32 | % | ||||||||||||||
Advances from FHLB | 87,366 | 1,701 | 1.95 | % | 51,196 | 531 | 1.04 | % | ||||||||||||||
Subordinated debentures and subordinated notes | 16,748 | 1,031 | 6.16 | % | 13,878 | 635 | 4.58 | % | ||||||||||||||
Total interest-bearing liabilities | 1,989,341 | 30,045 | 1.51 | % | 1,216,107 | 11,044 | 0.91 | % | ||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing deposits | 621,613 | 425,124 | ||||||||||||||||||||
Other liabilities | 12,456 | 6,802 | ||||||||||||||||||||
Total liabilities | 2,623,410 | 1,648,033 | ||||||||||||||||||||
Stockholders’ equity | 509,018 | 332,935 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,132,428 | $ | 1,980,968 | ||||||||||||||||||
Net interest rate spread2 | 3.66 | % | 3.48 | % | ||||||||||||||||||
Net interest income and margin3 | $ | 114,189 | 4.09 | % | $ | 68,508 | 3.77 | % |
1 Includes average outstanding balances of loans held for sale of
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
Yield Trend
For the Quarter Ended | |||||||||||||||
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
|||||||||||
Average yield on interest-earning assets: | |||||||||||||||
Total loans1 | 5.55 | % | 5.72 | % | 5.55 | % | 5.75 | % | 5.51 | % | |||||
Securities available for sale | 2.88 | 2.69 | 2.66 | 2.43 | 2.06 | ||||||||||
Interest-bearing deposits in other banks | 2.41 | 1.98 | 1.80 | 1.70 | 1.37 | ||||||||||
Investment in unconsolidated subsidiary | 5.64 | 6.76 | 4.91 | 6.20 | 4.51 | ||||||||||
Total interest-earning assets | 5.16 | % | 5.19 | % | 5.10 | % | 5.22 | % | 4.92 | % | |||||
Average rate on interest-bearing liabilities: | |||||||||||||||
Interest-bearing demand and savings deposits | 1.60 | % | 1.46 | % | 1.33 | % | 1.10 | % | 0.87 | % | |||||
Certificates and other time deposits | 2.05 | 1.86 | 1.52 | 0.77 | 1.06 | ||||||||||
Advances from FHLB | 2.85 | 2.08 | 1.57 | 1.59 | 1.13 | ||||||||||
Subordinated debentures and subordinated notes | 7.23 | 5.94 | 5.89 | 5.56 | 4.01 | ||||||||||
Total interest-bearing liabilities | 1.82 | % | 1.66 | % | 1.43 | % | 1.08 | % | 0.98 | % | |||||
Net interest rate spread2 | 3.34 | % | 3.53 | % | 3.67 | % | 4.14 | % | 3.94 | % | |||||
Net interest margin3 | 3.87 | % | 4.00 | % | 4.07 | % | 4.46 | % | 4.24 | % |
1 Includes average outstanding balances of loans held for sale of
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by average interest-earning assets.
Supplemental Yield Trend
For the Quarter Ended | |||||||||||||||
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
|||||||||||
Average cost of interest-bearing deposits | 1.75 | % | 1.59 | % | 1.39 | % | 1.00 | % | 0.93 | % | |||||
Average costs of total deposits, including noninterest-bearing | 1.32 | 1.20 | 1.05 | 0.74 | 0.69 | ||||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
Portfolio Composition
For the Quarter Ended | |||||||||||||||||||||||||||||||||||
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
|||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Loans held for investment: | |||||||||||||||||||||||||||||||||||
Commercial | $ | 760,772 | 29.8 | % | $ | 723,140 | 29.6 | % | $ | 691,718 | 28.6 | % | $ | 672,820 | 29.0 | % | $ | 684,551 | 30.6 | % | |||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||
Owner occupied commercial | 321,279 | 12.6 | 313,287 | 12.8 | 285,139 | 11.8 | 306,787 | 13.3 | 312,284 | 14.0 | |||||||||||||||||||||||||
Commercial | 781,753 | 30.6 | 755,801 | 30.9 | 730,324 | 30.2 | 648,754 | 28.0 | 597,008 | 26.7 | |||||||||||||||||||||||||
Construction and land | 324,863 | 12.7 | 294,143 | 12.0 | 300,262 | 12.4 | 301,023 | 13.0 | 277,825 | 12.4 | |||||||||||||||||||||||||
Farmland | 10,528 | 0.4 | 10,853 | 0.5 | 10,815 | 0.5 | 9,366 | 0.4 | 9,385 | 0.4 | |||||||||||||||||||||||||
1-4 family residential | 297,917 | 11.6 | 289,808 | 11.9 | 283,486 | 11.7 | 246,806 | 10.7 | 236,542 | 10.6 | |||||||||||||||||||||||||
Multi-family residential | 51,285 | 2.0 | 50,317 | 2.0 | 109,621 | 4.5 | 122,482 | 5.3 | 106,275 | 4.8 | |||||||||||||||||||||||||
Consumer | 7,112 | 0.3 | 7,166 | 0.3 | 7,543 | 0.3 | 8,051 | 0.3 | 9,648 | 0.5 | |||||||||||||||||||||||||
Total loans held for investment1 | $ | 2,555,509 | 100 | % | $ | 2,444,515 | 100 | % | $ | 2,418,908 | 100 | % | $ | 2,316,089 | 100 | % | $ | 2,233,518 | 100 | % | |||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 626,283 | 23.8 | % | $ | 661,754 | 24.9 | % | $ | 611,315 | 24.5 | % | $ | 597,236 | 24.0 | % | $ | 612,830 | 27.0 | % | |||||||||||||||
Interest-bearing transaction | 146,969 | 5.6 | 144,328 | 5.4 | 143,561 | 5.8 | 156,174 | 6.3 | 187,516 | 8.2 | |||||||||||||||||||||||||
Money market | 1,133,045 | 43.2 | 1,168,262 | 44.0 | 1,074,048 | 42.5 | 1,165,773 | 46.1 | 960,149 | 42.1 | |||||||||||||||||||||||||
Savings | 33,147 | 1.3 | 33,674 | 1.3 | 35,165 | 1.4 | 32,810 | 1.3 | 52,822 | 2.3 | |||||||||||||||||||||||||
Certificates and other time deposits | 682,984 | 26.1 | 648,236 | 24.4 | 626,329 | 25.8 | 541,801 | 22.3 | 465,313 | 20.4 | |||||||||||||||||||||||||
Total deposits | $ | 2,622,428 | 100 | % | $ | 2,656,254 | 100 | % | $ | 2,490,418 | 100 | % | $ | 2,493,794 | 100 | % | $ | 2,278,630 | 100 | % | |||||||||||||||
Loan to Deposit Ratio | 97.4 | % | 92.0 | % | 97.1 | % | 92.9 | % | 98.0 | % |
1 Total loans held for investment does not includes deferred fees of
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Financial Highlights
(Unaudited)
Asset Quality
For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
|||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Nonperforming Assets: | |||||||||||||||||||||||||||
Nonaccrual loans | $ | 24,745 | $ | 21,822 | $ | 4,252 | $ | 3,438 | $ | 465 | $ | 24,745 | $ | 465 | |||||||||||||
Accruing loans 90 or more days past due | — | 4,302 | 613 | 374 | 18 | — | 18 | ||||||||||||||||||||
Total nonperforming loans held for investment | 24,745 | 26,124 | 4,865 | 3,812 | 483 | 24,745 | 483 | ||||||||||||||||||||
Other real estate owned | — | — | — | 10 | 449 | — | 449 | ||||||||||||||||||||
Total nonperforming assets | $ | 24,745 | $ | 26,124 | $ | 4,865 | $ | 3,822 | $ | 932 | $ | 24,745 | $ | 932 | |||||||||||||
Charge-offs: | |||||||||||||||||||||||||||
Residential | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (11 | ) | ||||||||||||
Commercial | (26 | ) | — | (77 | ) | (72 | ) | (218 | ) | (175 | ) | (828 | ) | ||||||||||||||
Consumer | — | — | — | (22 | ) | — | (22 | ) | — | ||||||||||||||||||
Total charge-offs | (26 | ) | — | (77 | ) | (94 | ) | (218 | ) | (197 | ) | (839 | ) | ||||||||||||||
Recoveries: | |||||||||||||||||||||||||||
Commercial | 7 | 10 | 15 | 9 | 4 | 41 | 9 | ||||||||||||||||||||
Total recoveries | 7 | 10 | 15 | 9 | 4 | 41 | 9 | ||||||||||||||||||||
Net charge-offs | $ | (19 | ) | $ | 10 | $ | (62 | ) | $ | (85 | ) | $ | (214 | ) | $ | (156 | ) | $ | (830 | ) | |||||||
Allowance for loan losses at end of period | $ | 19,255 | $ | 17,909 | $ | 14,842 | $ | 13,401 | $ | 12,808 | $ | 19,255 | $ | 12,808 | |||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||||||
Nonperforming assets to total assets | 0.77 | % | 0.80 | % | 0.16 | % | 0.12 | % | 0.03 | % | 0.77 | % | 0.03 | % | |||||||||||||
Nonperforming loans to total loans held for investment | 0.97 | 1.07 | 0.20 | 0.16 | 0.02 | 0.97 | 0.02 | ||||||||||||||||||||
Allowance for loan losses to total loans held for investment | 0.75 | 0.73 | 0.61 | 0.58 | 0.57 | 0.75 | 0.57 | ||||||||||||||||||||
Net charge-offs to average loans outstanding | — | — | — | — | 0.01 | 0.01 | 0.06 | ||||||||||||||||||||
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
We identify certain financial measures discussed in this earnings release as being “non GAAP financial measures.” In accordance with
The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non GAAP financial measures.
Tangible Book Value Per Common Share. Tangible book value is a non-GAAP measure generally used by financial analysts and
investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as stockholders’ equity less goodwill and intangible assets, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per common share.
We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
For the Quarter Ended | ||||||||||||||||||||
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total stockholders' equity | $ | 530,638 | $ | 517,212 | $ | 508,441 | $ | 497,433 | $ | 488,929 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (161,447 | ) | (161,447 | ) | (161,447 | ) | (161,685 | ) | (159,452 | ) | ||||||||||
Intangible assets1 | (15,896 | ) | (16,603 | ) | (17,482 | ) | (18,372 | ) | (22,165 | ) | ||||||||||
Tangible common equity | $ | 353,295 | $ | 339,162 | $ | 329,512 | $ | 317,376 | $ | 307,312 | ||||||||||
Common shares outstanding | 24,251 | 24,192 | 24,181 | 24,149 | 24,110 | |||||||||||||||
Book value per common share | $ | 21.88 | $ | 21.38 | $ | 21.03 | $ | 20.60 | $ | 20.28 | ||||||||||
Tangible book value per common share | $ | 14.57 | $ | 14.02 | $ | 13.63 | $ | 13.14 | $ | 12.75 |
1 Intangible assets includes branch intangible assets held for sale of
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as stockholders’ equity, less goodwill and intangible assets, net of accumulated amortization; (b) tangible assets as total assets less goodwill and intangible assets, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.
We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:
For the Quarter Ended | ||||||||||||||||||||
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total stockholders' equity | $ | 530,638 | $ | 517,212 | $ | 508,441 | $ | 497,433 | $ | 488,929 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (161,447 | ) | (161,447 | ) | (161,447 | ) | (161,685 | ) | (159,452 | ) | ||||||||||
Intangible assets1 | (15,896 | ) | (16,603 | ) | (17,482 | ) | (18,372 | ) | (22,165 | ) | ||||||||||
Tangible common equity | $ | 353,295 | $ | 339,162 | $ | 329,512 | $ | 317,376 | $ | 307,312 | ||||||||||
Tangible Assets | ||||||||||||||||||||
Total assets | $ | 3,208,550 | $ | 3,275,846 | $ | 3,133,627 | $ | 3,063,319 | $ | 2,945,583 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (161,447 | ) | (161,447 | ) | (161,447 | ) | (161,685 | ) | (159,452 | ) | ||||||||||
Intangible assets1 | (15,896 | ) | (16,603 | ) | (17,482 | ) | (18,372 | ) | (22,165 | ) | ||||||||||
Tangible Assets | $ | 3,031,207 | $ | 3,097,796 | $ | 2,954,698 | $ | 2,883,262 | $ | 2,763,966 | ||||||||||
Tangible Common Equity to Tangible Assets | 11.66 | % | 10.95 | % | 11.15 | % | 11.01 | % | 11.12 | % |
1 Intangible assets includes branch intangible assets held for sale of
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) return as net income less the effect of intangible assets as net income, plus amortization of intangibles, net of taxes; (b) average tangible common equity as average stockholders’ equity less average goodwill and average intangible assets, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of intangible assets. Goodwill and other intangible assets have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions who may have higher balances in goodwill and other intangible assets than non-acquisitive institutions.
The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders excluding amortization of intangibles, net of tax to net income and presents our return on average tangible common equity:
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Net income available for common stockholders adjusted for amortization of core deposit intangibles | ||||||||||||||||||||||||||||
Net income | $ | 9,825 | $ | 8,935 | $ | 10,193 | $ | 10,388 | $ | 3,257 | $ | 39,341 | $ | 15,110 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of intangibles | 945 | 935 | 975 | 1,205 | 685 | 4,060 | 1,270 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 204 | 196 | 206 | 253 | 134 | 859 | 445 | |||||||||||||||||||||
Net income available for common stockholders adjusted for amortization of intangibles | $ | 10,566 | $ | 9,674 | $ | 10,962 | $ | 11,340 | $ | 3,808 | $ | 42,542 | $ | 15,935 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average stockholders' equity | $ | 523,590 | $ | 514,876 | $ | 504,328 | $ | 492,869 | $ | 464,614 | $ | 509,018 | $ | 332,935 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Average goodwill | (161,447 | ) | (161,447 | ) | (161,433 | ) | (159,272 | ) | (144,042 | ) | (160,907 | ) | (73,656 | ) | ||||||||||||||
Average intangible assets1 | (16,254 | ) | (17,107 | ) | (17,984 | ) | (20,734 | ) | (14,240 | ) | (18,005 | ) | (5,311 | ) | ||||||||||||||
Average tangible common equity | $ | 345,889 | $ | 336,322 | $ | 324,911 | $ | 312,863 | $ | 306,332 | $ | 330,106 | $ | 253,968 | ||||||||||||||
Return on Average Tangible Common Equity (Annualized) | 12.12 | % | 11.41 | % | 13.53 | % | 14.70 | % | 4.93 | % | 12.89 | % | 6.27 | % |
1 Intangible assets includes branch intangible assets held for sale for the quarter ended
VERITEX HOLDINGS, INC. AND SUBSIDIARY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings and pre-tax, pre-provision operating earnings are non GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income available to common stockholders plus loss on sale of securities available-for-sale, net, less gain on sale of disposed branch assets, plus lease exit costs, net, plus branch closure expenses, plus one-time issuance of shares to all employees, plus merger and acquisition expenses, less tax impact of adjustments, plus re-measurement of deferred tax assets as a result of the reduction in the corporate income tax rate under the Tax Cuts and Jobs Act, plus other corporate development discrete tax items. We calculate (b) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision for loan losses. We calculate (c) diluted operating earnings per share as operating earnings as described in clause (a) divided by weight average diluted shares outstanding. We calculate (d) operating return on average tangible common equity as operating earnings as described in clause (a) divided by average tangible common equity. (average stockholders' equity less average goodwill and average intangible assets, net of accumulated amortization.) We calculate (e) operating efficiency ratio as non-interest expense plus adjustments to operating non-interest expense divided by (i) non-interest income plus adjustments to operating non-interest income plus (ii) net interest income.
We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the company and provide meaningful comparisons to its peers.
The following tables reconcile, as of the dates set forth below, operating earnings and pre-tax, pre-provision operating earnings and related metrics:
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Operating Earnings1 | ||||||||||||||||||||||||||||
Net Income available to common stockholders | $ | 9,825 | $ | 8,935 | $ | 10,193 | $ | 10,388 | $ | 3,257 | $ | 39,341 | $ | 15,110 | ||||||||||||||
Plus: Loss on sale of securities available for sale, net | 42 | — | — | — | — | 42 | — | |||||||||||||||||||||
Les: Gain on sale of disposed branch assets | — | — | — | (388 | ) | — | (388 | ) | — | |||||||||||||||||||
Plus: Lease exit costs, net2 | — | — | — | 1,071 | — | 1,071 | — | |||||||||||||||||||||
Plus: Branch closure expenses | — | — | — | 172 | — | 172 | — | |||||||||||||||||||||
Plus: One-time issuance of shares to all employees | — | — | 421 | — | — | 421 | — | |||||||||||||||||||||
Plus: Merger and acquisition expenses | 1,150 | 2,692 | 1,043 | 335 | 1,018 | 5,220 | 2,691 | |||||||||||||||||||||
Operating pre-tax income | 11,017 | 11,627 | 11,657 | 11,578 | 4,275 | 45,879 | 17,801 | |||||||||||||||||||||
Less: Tax impact of adjustments3 | (440 | ) | 538 | 293 | 242 | 356 | 633 | 942 | ||||||||||||||||||||
Plus: Tax Act re-measurement | — | (688 | ) | (127 | ) | 820 | 3,051 | 5 | 3,051 | |||||||||||||||||||
Plus: Other M&A discrete tax items | — | — | — | — | 398 | — | 398 | |||||||||||||||||||||
Net operating earnings | $ | 11,457 | $ | 10,401 | $ | 11,237 | $ | 12,156 | $ | 7,368 | $ | 45,251 | $ | 20,308 | ||||||||||||||
Weighted average diluted shares outstanding | 24,532 | 24,613 | 24,546 | 24,539 | 23,524 | 24,590 | 18,810 | |||||||||||||||||||||
Diluted EPS | $ | 0.40 | $ | 0.36 | $ | 0.42 | $ | 0.42 | $ | 0.14 | $ | 1.60 | $ | 0.80 | ||||||||||||||
Diluted operating EPS | 0.47 | 0.42 | 0.46 | 0.50 | 0.31 | 1.84 | 1.08 |
1 The Company previously adjusted operating income by excluding the impact of income recognized on acquired loans. The Company no longer includes this adjustment in order to align with industry peers for comparability purposes.
2 Lease exit costs, net for the three months ended
3 During the fourth quarter, the Company initiated a transaction cost study which to through
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Pre-Tax, Pre-Provision Operating Earnings | ||||||||||||||||||||||||||||
Net Income available to common stockholders | $ | 9,825 | $ | 8,935 | $ | 10,193 | $ | 10,388 | $ | 3,257 | $ | 39,341 | $ | 15,110 | ||||||||||||||
Plus: Provision for income taxes | 3,587 | 1,448 | 2,350 | 3,511 | 7,227 | 10,896 | 13,029 | |||||||||||||||||||||
Pus: Provision for loan losses | 1,364 | 3,057 | 1,504 | 678 | 2,529 | 6,603 | 5,114 | |||||||||||||||||||||
Plus: Loss on sale of securities available for sale, net | 42 | — | — | — | — | 42 | — | |||||||||||||||||||||
Plus: Loss (gain) on sale of disposed branch assets | — | — | — | (388 | ) | — | (388 | ) | — | |||||||||||||||||||
Plus: Lease exit costs, net1 | — | — | — | 1,071 | — | 1,071 | — | |||||||||||||||||||||
Plus: Branch closure expenses | — | — | — | 172 | — | 172 | — | |||||||||||||||||||||
Plus: One-time issuance of shares to all employees | — | — | 421 | — | — | 421 | — | |||||||||||||||||||||
Plus: Merger and acquisition expenses | 1,150 | 2,692 | 1,043 | 335 | 1,018 | 5,220 | 2,691 | |||||||||||||||||||||
Net pre-tax, pre-provision operating earnings | $ | 15,968 | $ | 16,132 | $ | 15,511 | $ | 15,767 | $ | 14,031 | $ | 63,311 | $ | 35,944 | ||||||||||||||
Total average assets | $ | 3,243,168 | $ | 3,233,214 | $ | 3,059,456 | $ | 2,989,974 | $ | 2,691,288 | $ | 3,132,428 | $ | 1,980,968 | ||||||||||||||
Pre-tax, pre-provision operating return on average assets2 | 1.95 | % | 1.98 | % | 2.03 | % | 2.14 | % | 2.07 | % | 2.02 | % | 1.81 | % | ||||||||||||||
Average Total Assets | $ | 3,243,168 | $ | 3,233,214 | $ | 3,059,456 | $ | 2,989,974 | $ | 2,691,288 | $ | 3,132,428 | $ | 1,980,968 | ||||||||||||||
Return on average assets2 | 1.20 | % | 1.10 | % | 1.34 | % | 1.41 | % | 0.48 | % | 1.26 | % | 0.76 | % | ||||||||||||||
Operating return on average assets2 | 1.40 | 1.28 | 1.47 | 1.65 | 1.09 | 1.45 | 1.03 | |||||||||||||||||||||
Operating earnings adjusted for amortization of intangibles | ||||||||||||||||||||||||||||
Net operating earnings | $ | 11,457 | $ | 10,401 | $ | 11,237 | $ | 12,156 | $ | 7,368 | $ | 45,251 | $ | 20,308 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of intangibles | 945 | 935 | 975 | 1,205 | 685 | 4,060 | 1,270 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 204 | 196 | 206 | 253 | 134 | 859 | 445 | |||||||||||||||||||||
Operating earnings adjusted for amortization of intangibles | $ | 12,198 | $ | 11,140 | $ | 12,006 | $ | 13,108 | $ | 7,919 | $ | 48,452 | $ | 21,133 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average stockholders' equity | $ | 523,590 | $ | 514,876 | $ | 504,328 | $ | 492,869 | $ | 464,614 | $ | 509,018 | $ | 332,935 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Average goodwill | (161,447 | ) | (161,447 | ) | (161,433 | ) | (159,272 | ) | (144,042 | ) | (160,907 | ) | (73,656 | ) | ||||||||||||||
Average intangibles assets | (16,254 | ) | (17,107 | ) | (17,984 | ) | (20,734 | ) | (14,240 | ) | (18,005 | ) | (5,311 | ) | ||||||||||||||
Average tangible common equity | $ | 345,889 | $ | 336,322 | $ | 324,911 | $ | 312,863 | $ | 306,332 | $ | 330,106 | $ | 253,968 | ||||||||||||||
Operating Return on average tangible common equity2 | 13.99 | % | 13.14 | % | 14.82 | % | 16.99 | % | 10.26 | % | 14.68 | % | 8.32 | % | ||||||||||||||
Efficiency ratio | 54.27 | % | 57.58 | % | 53.51 | % | 54.28 | % | 53.60 | % | 54.92 | % | 56.24 | % | ||||||||||||||
Operating efficiency ratio | 50.65 | % | 49.09 | % | 48.67 | % | 49.94 | % | 49.98 | % | 49.60 | % | 52.70 | % |
1 Lease exit costs, net for the three months ended
2 Annualized ratio.
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Per Share Data (Common Stock): | ||||||||||||||||||||||||||||
Basic earnings per common share | $ | 0.41 | $ | 0.42 | $ | 0.44 | $ | 0.25 | $ | 0.07 | $ | 1.52 | $ | 0.92 | ||||||||||||||
Diluted earnings per share | 0.41 | 0.41 | 0.44 | 0.25 | 0.07 | 1.50 | 0.92 | |||||||||||||||||||||
Book value per common share | 13.66 | 13.12 | 12.86 | 12.62 | 12.50 | 13.66 | 12.50 | |||||||||||||||||||||
Tangible book value per common share1 | 11.18 | 10.63 | 10.36 | 10.10 | 9.97 | 11.18 | 9.97 | |||||||||||||||||||||
Common Stock Data: | ||||||||||||||||||||||||||||
Shares outstanding at period end | 37,384 | 37,368 | 37,289 | 37,163 | 37,103 | 37,384 | 37,103 | |||||||||||||||||||||
Weighted average basic shares outstanding for the period | 37,375 | 37,339 | 37,274 | 37,341 | 37,103 | 37,288 | 37,043 | |||||||||||||||||||||
Weighted average diluted shares outstanding for the period | 37,767 | 37,726 | 37,646 | 37,586 | 37,393 | 37,681 | 37,297 | |||||||||||||||||||||
Selected Performance Metrics: | ||||||||||||||||||||||||||||
Return on average assets2 | 1.37 | % | 1.42 | % | 1.54 | % | 0.90 | % | 0.25 | % | 1.32 | % | 0.83 | % | ||||||||||||||
Pre-tax, pre-provision operating return on average assets(1)(2) | 2.10 | 2.17 | 2.15 | 2.10 | 2.01 | 2.11 | 1.97 | |||||||||||||||||||||
Return on average equity2 | 12.20 | 12.75 | 13.96 | 8.15 | 2.23 | 11.80 | 7.57 | |||||||||||||||||||||
Return on average tangible common equity1, 2 | 15.20 | 16.01 | 17.65 | 10.47 | 3.02 | 14.88 | 9.84 | |||||||||||||||||||||
Efficiency ratio | 50.52 | 53.64 | 50.05 | 50.81 | 57.87 | 51.26 | 52.71 | |||||||||||||||||||||
Loans to deposits ratio | 95.55 | 98.50 | 94.05 | 90.81 | 93.92 | 95.55 | 93.92 | |||||||||||||||||||||
Net interest margin | 3.82 | 3.78 | 3.94 | 3.87 | 3.64 | 3.85 | 3.60 | |||||||||||||||||||||
Noninterest expense to average assets2 | 2.03 | 2.20 | 2.13 | 2.13 | 2.23 | 2.12 | 2.04 | |||||||||||||||||||||
Selected Performance Metrics - Operating: | ||||||||||||||||||||||||||||
Diluted operating earnings per share | $ | 0.44 | $ | 0.49 | $ | 0.44 | $ | 0.26 | $ | 0.14 | $ | 1.61 | $ | 1.01 | ||||||||||||||
Operating return on average assets2 | 1.49 | % | 1.69 | % | 1.56 | % | 0.93 | % | 0.50 | % | 1.41 | % | 0.92 | % | ||||||||||||||
Operating return on average tangible common equity2 | 16.40 | 19.00 | 17.88 | 10.81 | 5.90 | 15.97 | 10.82 | |||||||||||||||||||||
Operating efficiency ratio | 47.77 | 47.07 | 49.45 | 49.90 | 47.69 | 48.95 | 49.32 | |||||||||||||||||||||
Green Bancorp Capital Ratios: | ||||||||||||||||||||||||||||
Average shareholders’ equity to average total assets | 11.3 | % | 11.1 | % | 11.1 | % | 11.1 | % | 11.1 | % | 11.1 | % | 11.0 | % | ||||||||||||||
Tier 1 capital to average assets (leverage) | 10.2 | 10.1 | 10.0 | 9.8 | 9.5 | 10.2 | 9.5 | |||||||||||||||||||||
Common equity tier 1 capital | 11.2 | 10.9 | 10.9 | 10.9 | 10.5 | 11.2 | 10.5 | |||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 11.6 | 11.2 | 11.3 | 11.2 | 10.9 | 11.6 | 10.9 | |||||||||||||||||||||
Total capital to risk-weighted assets | 13.3 | 13.1 | 13.2 | 13.3 | 12.7 | 13.3 | 12.7 | |||||||||||||||||||||
Tangible common equity to tangible assets1 | 9.7 | 9.2 | 9.0 | 9.1 | 8.9 | 9.7 | 8.9 | |||||||||||||||||||||
Green Bank Capital Ratios: | ||||||||||||||||||||||||||||
Tier 1 capital to average assets (leverage) | 10.8 | % | 10.7 | % | 10.6 | % | 10.4 | % | 10.1 | % | 10.8 | % | 10.1 | % | ||||||||||||||
Common equity tier 1 capital | 12.3 | 12.0 | 12.0 | 12.0 | 11.6 | 12.3 | 11.6 | |||||||||||||||||||||
Tier 1 capital to risk-weighted assets | 12.3 | 12.0 | 12.0 | 12.0 | 11.6 | 12.3 | 11.6 | |||||||||||||||||||||
Total capital to risk-weighted assets | 13.1 | 12.9 | 13.0 | 13.0 | 12.4 | 13.1 | 12.4 |
1 Refer to "Reconciliation of Non-GAAP Financial Measures" after the financial highlights of
2 Annualized ratio.
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Period End Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 112,720 | $ | 141,090 | $ | 231,251 | $ | 142,144 | $ | 140,681 | ||||||||||
Securities | 661,714 | 673,089 | 699,863 | 729,146 | 718,814 | |||||||||||||||
Other investments | 40,953 | 44,775 | 42,962 | 38,157 | 27,283 | |||||||||||||||
Loans held for sale | 9,360 | 7,627 | 4,992 | 7,461 | 7,156 | |||||||||||||||
Loans held for investment | 3,311,967 | 3,363,354 | 3,222,108 | 3,136,336 | 3,190,485 | |||||||||||||||
Total Loans | 3,321,327 | 3,370,981 | 3,227,100 | 3,143,797 | 3,197,641 | |||||||||||||||
Allowance for loan losses | (32,534 | ) | (35,186 | ) | (35,086 | ) | (38,233 | ) | (31,220 | ) | ||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles, net | 7,307 | 7,584 | 7,881 | 8,187 | 8,503 | |||||||||||||||
Real estate acquired through foreclosure | 609 | 2,532 | 802 | 802 | 802 | |||||||||||||||
Premises and equipment, net | 28,580 | 28,873 | 29,178 | 23,694 | 24,002 | |||||||||||||||
Bank owned life insurance | 56,841 | 56,457 | 56,066 | 55,682 | 55,302 | |||||||||||||||
Other assets | 38,377 | 44,388 | 46,369 | 36,580 | 34,817 | |||||||||||||||
Branch assets held for sale | 84,568 | — | — | — | — | |||||||||||||||
Total assets | $ | 4,405,753 | $ | 4,419,874 | $ | 4,391,677 | $ | 4,225,247 | $ | 4,261,916 | ||||||||||
Noninterest-bearing deposits | $ | 825,365 | $ | 833,827 | $ | 824,753 | $ | 849,297 | $ | 803,210 | ||||||||||
Interest-bearing transaction and savings deposits | 1,300,825 | 1,221,640 | 1,281,255 | 1,337,973 | 1,331,601 | |||||||||||||||
Certificates and other time deposits | 1,340,159 | 1,359,005 | 1,320,042 | 1,266,457 | 1,262,332 | |||||||||||||||
Total deposits | 3,466,349 | 3,414,472 | 3,426,050 | 3,453,727 | 3,397,143 | |||||||||||||||
Securities sold under agreements to repurchase | 3,226 | 3,502 | 4,141 | 4,948 | 5,173 | |||||||||||||||
Advances from Federal Home Loan Bank | 300,000 | 437,000 | 412,000 | 230,000 | 325,000 | |||||||||||||||
Subordinated debentures and subordinated notes | 48,302 | 48,161 | 48,019 | 47,878 | 47,737 | |||||||||||||||
Other liabilities | 25,004 | 26,535 | 21,974 | 19,816 | 23,068 | |||||||||||||||
Branch liabilities held for sale | 52,293 | — | — | — | — | |||||||||||||||
Total liabilities | 3,895,174 | 3,929,670 | 3,912,184 | 3,756,369 | 3,798,121 | |||||||||||||||
Shareholders' equity | 510,579 | 490,204 | 479,493 | 468,878 | 463,795 | |||||||||||||||
Total liabilities and equity | $ | 4,405,753 | $ | 4,419,874 | $ | 4,391,677 | $ | 4,225,247 | $ | 4,261,916 | ||||||||||
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
For the Quarter Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||
Loans, including fees | $ | 48,903 | $ | 46,612 | $ | 44,479 | $ | 41,799 | $ | 39,870 | $ | 181,793 | $ | 154,266 | ||||||||||||||
Securities | 4,353 | 4,277 | 4,734 | 4,558 | 4,446 | 17,922 | 15,294 | |||||||||||||||||||||
Other investments | 398 | 360 | 341 | 300 | 241 | 1,399 | 847 | |||||||||||||||||||||
Deposits in financial institutions and fed funds sold | 872 | 651 | 659 | 493 | 671 | 2,675 | 1,843 | |||||||||||||||||||||
Total interest income | 54,526 | 51,900 | 50,213 | 47,150 | 45,228 | 203,789 | 172,250 | |||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||
Transaction and savings deposits | 4,455 | 3,393 | 3,023 | 2,464 | 2,588 | 13,335 | 9,298 | |||||||||||||||||||||
Certificates and other time deposits | 6,403 | 5,671 | 4,712 | 4,071 | 4,017 | 20,857 | 15,452 | |||||||||||||||||||||
Subordinated debentures and subordinated notes | 1,124 | 1,120 | 1,109 | 1,079 | 1,065 | 4,432 | 4,216 | |||||||||||||||||||||
Other borrowed funds | 2,098 | 2,197 | 1,608 | 1,294 | 738 | 7,197 | 2,237 | |||||||||||||||||||||
Total interest expense | 14,080 | 12,381 | 10,452 | 8,908 | 8,408 | 45,821 | 31,203 | |||||||||||||||||||||
Net interest income | 40,446 | 39,519 | 39,761 | 38,242 | 36,820 | 157,968 | 141,047 | |||||||||||||||||||||
Provision for loan losses | 2,420 | 320 | 1,897 | 9,663 | 4,405 | 14,300 | 14,360 | |||||||||||||||||||||
Net interest income after provision for loan losses | 38,026 | 39,199 | 37,864 | 28,579 | 32,415 | 143,668 | 126,687 | |||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||||
Customer service fees | 2,855 | 2,874 | 2,578 | 2,395 | 2,273 | 10,702 | 9,103 | |||||||||||||||||||||
Loan fees | 622 | 942 | 996 | 833 | 704 | 3,393 | 3,515 | |||||||||||||||||||||
(Loss) gain on sale of available-for-sale securities, net | — | — | 66 | — | — | 66 | (38 | ) | ||||||||||||||||||||
Loss on held for sale loans, net | — | — | — | — | (1,098 | ) | — | (2,308 | ) | |||||||||||||||||||
Gain on sale of guaranteed portion of loans, net | 81 | 705 | 1,112 | 941 | 1,648 | 2,839 | 5,755 | |||||||||||||||||||||
Other | 855 | 952 | 733 | 989 | 401 | 3,529 | 2,485 | |||||||||||||||||||||
Total noninterest income | 4,413 | 5,473 | 5,485 | 5,158 | 3,928 | 20,529 | 18,512 | |||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 14,216 | 13,729 | 13,640 | 13,601 | 14,996 | 55,186 | 52,542 | |||||||||||||||||||||
Occupancy | 2,126 | 2,068 | 2,263 | 2,077 | 2,069 | 8,534 | 8,194 | |||||||||||||||||||||
Professional and regulatory fees | 1,054 | 1,359 | 2,172 | 2,261 | 2,241 | 6,846 | 8,868 | |||||||||||||||||||||
Data processing | 1,002 | 923 | 1,029 | 972 | 981 | 3,926 | 3,808 | |||||||||||||||||||||
Software license and maintenance | 643 | 732 | 703 | 716 | 636 | 2,794 | 2,027 | |||||||||||||||||||||
Marketing | 278 | 354 | 257 | 176 | 259 | 1,065 | 775 | |||||||||||||||||||||
Loan related | 187 | 587 | 467 | 47 | 632 | 1,288 | 1,804 | |||||||||||||||||||||
Real estate acquired by foreclosure, net | 128 | (5 | ) | 4 | 12 | 30 | 139 | 704 | ||||||||||||||||||||
Merger and acquisition expenses | 1,232 | 2,955 | — | — | — | 4,187 | — | |||||||||||||||||||||
Other | 1,797 | 1,430 | 2,110 | 2,191 | 1,738 | 7,528 | 5,377 | |||||||||||||||||||||
Total noninterest expense | 22,663 | 24,132 | 22,645 | 22,053 | 23,582 | 91,493 | 84,099 | |||||||||||||||||||||
Income before income taxes | 19,776 | 20,540 | 20,704 | 11,684 | 12,761 | 72,704 | 61,100 | |||||||||||||||||||||
Provision for income taxes | 4,449 | 4,943 | 4,283 | 2,322 | 10,142 | 15,997 | 26,964 | |||||||||||||||||||||
Net income | $ | 15,327 | $ | 15,597 | $ | 16,421 | $ | 9,362 | $ | 2,619 | $ | 56,707 | $ | 34,136 | ||||||||||||||
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
For the Quarter Ended | |||||||||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Interest-Earning Assets: | |||||||||||||||||||||||||||||||||
Loans1 | $ | 3,346,657 | $ | 48,903 | 5.80 | % | $ | 3,288,748 | $ | 46,612 | 5.62 | % | $ | 3,082,005 | $ | 39,870 | 5.13 | % | |||||||||||||||
Securities | 663,210 | 4,353 | 2.60 | 689,930 | 4,277 | 2.46 | 713,137 | 4,446 | 2.47 | ||||||||||||||||||||||||
Other investments | 44,531 | 398 | 3.55 | 43,655 | 360 | 3.27 | 23,359 | 241 | 4.09 | ||||||||||||||||||||||||
Interest earning deposits in financial institutions and federal funds sold | 151,026 | 872 | 2.29 | 126,021 | 651 | 2.05 | 197,454 | 671 | 1.35 | ||||||||||||||||||||||||
Total interest-earning assets | 4,205,424 | 54,526 | 5.14 | % | 4,148,354 | 51,900 | 4.96 | % | 4,015,955 | 45,228 | 4.47 | % | |||||||||||||||||||||
Allowance for loan losses | (35,191 | ) | (36,003 | ) | (33,708 | ) | |||||||||||||||||||||||||||
Noninterest-earning assets1 | 253,037 | 247,893 | 221,858 | ||||||||||||||||||||||||||||||
Total assets | $ | 4,423,270 | $ | 4,360,244 | $ | 4,204,105 | |||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest-bearing demand and savings deposits1 | $ | 1,310,165 | $ | 4,455 | 1.35 | % | $ | 1,236,585 | $ | 3,393 | 1.09 | % | $ | 1,387,873 | $ | 2,588 | 0.74 | % | |||||||||||||||
Certificates and other time deposits1 | 1,363,898 | 6,403 | 1.86 | 1,345,168 | 5,671 | 1.67 | 1,290,277 | 4,017 | 1.24 | ||||||||||||||||||||||||
Other borrowed funds | 348,232 | 2,098 | 2.39 | 390,225 | 2,197 | 2.23 | 243,142 | 738 | 1.20 | ||||||||||||||||||||||||
Subordinated debentures and subordinated notes | 48,239 | 1,124 | 9.24 | 48,096 | 1,120 | 9.24 | 47,673 | 1,065 | 8.86 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 3,070,534 | 14,080 | 1.82 | % | 3,020,074 | 12,381 | 1.63 | % | 2,968,965 | 8,408 | 1.12 | % | |||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits1 | 827,271 | 830,040 | 745,707 | ||||||||||||||||||||||||||||||
Other liabilities1 | 26,944 | 24,753 | 23,574 | ||||||||||||||||||||||||||||||
Total liabilities | 3,924,749 | 3,874,867 | 3,738,246 | ||||||||||||||||||||||||||||||
Shareholders’ equity | 498,521 | 485,377 | 465,859 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,423,270 | $ | 4,360,244 | $ | 4,204,105 | |||||||||||||||||||||||||||
Net interest rate spread 2 | 3.32 | % | 3.33 | % | 3.35 | % | |||||||||||||||||||||||||||
Net interest income and margin3 | $ | 40,446 | 3.82 | % | $ | 39,519 | 3.78 | % | $ | 36,820 | 3.64 | % |
1 Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing demand and saving deposits, certificates and other time deposits, noninterest-bearing demand deposits and other liabilities.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by interest-earning assets.
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
2018 | 2017 | |||||||||||||||||||||
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
Average Outstanding Balance |
Interest Earned/ Interest Paid |
Average Yield/ Rate |
|||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-Earning Assets: | ||||||||||||||||||||||
Loans1 | $ | 3,231,133 | $ | 181,793 | 5.63 | % | $ | 3,065,360 | $ | 154,266 | 5.03 | % | ||||||||||
Securities | 696,499 | 17,922 | 2.57 | 669,588 | 15,294 | 2.28 | ||||||||||||||||
Other investments | 40,053 | 1,399 | 3.49 | 22,823 | 847 | 3.71 | ||||||||||||||||
Interest earning deposits in financial institutions and federal funds sold | 135,161 | 2,675 | 1.98 | 160,810 | 1,843 | 1.15 | ||||||||||||||||
Total interest-earning assets | 4,102,846 | 203,789 | 4.97 | % | 3,918,581 | 172,250 | 4.40 | % | ||||||||||||||
Allowance for loan losses | (35,084 | ) | (31,471 | ) | ||||||||||||||||||
Noninterest-earning assets1 | 243,242 | 225,674 | ||||||||||||||||||||
Total assets | $ | 4,311,004 | $ | 4,112,784 | ||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing demand and savings deposits1 | $ | 1,284,569 | $ | 13,335 | 1.04 | % | $ | 1,370,503 | $ | 9,298 | 0.68 | % | ||||||||||
Certificates and other time deposits1 | 1,316,548 | 20,857 | 1.58 | 1,317,180 | 15,452 | 1.17 | ||||||||||||||||
Other borrowed funds | 343,569 | 7,197 | 2.09 | 216,177 | 2,237 | 1.03 | ||||||||||||||||
Subordinated debentures and subordinated notes | 48,028 | 4,432 | 9.23 | 47,533 | 4,216 | 8.87 | ||||||||||||||||
Total interest-bearing liabilities | 2,992,714 | 45,821 | 1.53 | % | 2,951,393 | 31,203 | 1.06 | % | ||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||
Noninterest-bearing demand deposits1 | 814,309 | 690,786 | ||||||||||||||||||||
Other liabilities1 | 23,412 | 19,458 | ||||||||||||||||||||
Total liabilities | 3,830,435 | 3,661,637 | ||||||||||||||||||||
Shareholders’ equity | 480,569 | 451,147 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,311,004 | $ | 4,112,784 | ||||||||||||||||||
Net interest rate spread1 | 3.44 | % | 3.34 | % | ||||||||||||||||||
Net interest income and margin2 | $ | 157,968 | 3.85 | % | $ | 141,047 | 3.60 | % |
1 Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing demand and saving deposits, certificates and other time deposits, noninterest-bearing demand deposits and other liabilities.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by interest-earning assets.
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
Yield Trend
For the Quarter Ended | |||||||||||||||
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
Average yield on interest-earning assets: | |||||||||||||||
Loans, including fees1 | 5.80 | % | 5.62 | % | 5.65 | % | 5.42 | % | 5.13 | % | |||||
Securities | 2.60 | 2.46 | 2.66 | 2.57 | 2.47 | ||||||||||
Other investments | 3.55 | 3.27 | 3.45 | 3.78 | 4.09 | ||||||||||
Interest-earning deposits in financial institutions and federal funds sold | 2.29 | 2.05 | 1.90 | 1.61 | 1.35 | ||||||||||
Total interest-earning assets | 5.14 | % | 4.96 | % | 4.97 | % | 4.77 | % | 4.47 | % | |||||
Average rate on interest-bearing liabilities: | |||||||||||||||
Interest-bearing transaction and savings1 | 1.35 | % | 1.09 | % | 0.94 | % | 0.77 | % | 0.74 | % | |||||
Certificates and other time deposits1 | 1.86 | 1.67 | 1.46 | 1.31 | 1.24 | ||||||||||
Other borrowed funds | 2.39 | 2.23 | 2.05 | 1.64 | 1.20 | ||||||||||
Subordinated debentures and subordinated notes | 9.24 | 9.24 | 9.28 | 9.15 | 8.86 | ||||||||||
Total interest-bearing liabilities | 1.82 | % | 1.63 | % | 1.42 | % | 1.23 | % | 1.12 | % | |||||
Net interest rate spread2 | 3.32 | % | 3.33 | % | 3.55 | % | 3.54 | % | 3.35 | % | |||||
Net interest margin3 | 3.82 | % | 3.78 | % | 3.94 | % | 3.87 | % | 3.64 | % |
1 Includes average outstanding balances of branch assets and liabilities held for sale in total loans, noninterest-bearing assets, interest-bearing demand and saving deposits, certificates and other time deposits, noninterest-bearing demand deposits and other liabilities.
2 Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
3 Net interest margin is equal to net interest income divided by interest-earning assets.
Supplemental Yield Trend
For the Quarter Ended | |||||||||||||||
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||
Average cost of interest-bearing deposits | 1.61 | % | 1.39 | % | 1.20 | % | 1.03 | % | 0.98 | % | |||||
Average cost of total deposits, including noninterest-bearing | 1.23 | 1.05 | 0.91 | 0.79 | 0.77 | ||||||||||
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
Portfolio Composition
For the Quarter Ended | |||||||||||||||||||||||||||||||||||
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Loans held for investment: | |||||||||||||||||||||||||||||||||||
Commercial & industrial | $ | 1,137,251 | 34.4 | % | $ | 1,142,733 | 34.0 | % | $ | 1,070,420 | 33.2 | % | $ | 1,038,715 | 33.1 | % | $ | 1,066,266 | 33.4 | % | |||||||||||||||
Mortgage warehouse | 211,709 | 6.4 | 236,307 | 7.0 | 244,041 | 7.6 | 185,849 | 5.9 | 220,230 | 6.9 | |||||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||||||
Owner occupied commercial | 426,777 | 12.9 | 435,667 | 13.0 | 436,153 | 13.5 | 435,366 | 13.9 | 415,230 | 13.0 | |||||||||||||||||||||||||
Commercial | 1,130,472 | 34.1 | 1,133,427 | 33.6 | 1,092,036 | 33.9 | 1,068,832 | 34.2 | 1,067,779 | 33.5 | |||||||||||||||||||||||||
Construction, land & land development | 136,004 | 4.1 | 153,257 | 4.6 | 130,533 | 4.1 | 148,732 | 4.7 | 164,952 | 5.2 | |||||||||||||||||||||||||
Residential mortgage | 255,611 | 7.7 | 249,046 | 7.4 | 235,192 | 7.3 | 242,529 | 7.7 | 238,580 | 7.5 | |||||||||||||||||||||||||
Consumer and Other | 14,143 | 0.4 | 12,917 | 0.4 | 13,733 | 0.4 | 16,313 | 0.5 | 17,448 | 0.5 | |||||||||||||||||||||||||
Total loans held for investment | $ | 3,311,967 | 100.0 | % | $ | 3,363,354 | 100.0 | % | $ | 3,222,108 | 100.0 | % | $ | 3,136,336 | 100.0 | % | $ | 3,190,485 | 100.0 | % | |||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 825,365 | 23.8 | % | $ | 833,827 | 24.4 | % | $ | 824,753 | 24.1 | % | $ | 849,297 | 24.6 | % | $ | 803,210 | 23.6 | % | |||||||||||||||
Interest-bearing transaction | 232,894 | 6.7 | 229,686 | 6.7 | 234,653 | 6.8 | 248,680 | 7.2 | 200,769 | 5.9 | |||||||||||||||||||||||||
Money market | 999,601 | 28.8 | 921,268 | 27.0 | 969,606 | 28.4 | 1,004,174 | 29.0 | 1,041,954 | 30.7 | |||||||||||||||||||||||||
Savings | 68,330 | 2.0 | 70,686 | 2.1 | 76,996 | 2.2 | 85,119 | 2.5 | 88,878 | 2.6 | |||||||||||||||||||||||||
Certificates and other time deposits | 1,340,159 | 38.7 | 1,359,005 | 39.8 | 1,320,042 | 38.5 | 1,266,457 | 36.7 | 1,262,332 | 37.2 | |||||||||||||||||||||||||
Total deposits | $ | 3,466,349 | 100.0 | % | $ | 3,414,472 | 100.0 | % | $ | 3,426,050 | 100.0 | % | $ | 3,453,727 | 100.0 | % | $ | 3,397,143 | 100.0 | % | |||||||||||||||
Loan to Deposit Ratio | 95.5 | % | 98.5 | % | 94.0 | % | 90.8 | % | 93.9 | % | |||||||||||||||||||||||||
GREEN BANCORP, INC.
Financial Highlights
(Unaudited)
Asset Quality
As of and for the Quarter Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Nonperforming Assets: | ||||||||||||||||||||||||||||
Nonaccrual loans | $ | 54,055 | $ | 60,211 | $ | 52,885 | $ | 55,565 | $ | 47,892 | $ | 54,055 | $ | 47,892 | ||||||||||||||
Accruing loans 90 or more days past due | 1,417 | 4,825 | 907 | 5,412 | 375 | 1,417 | 375 | |||||||||||||||||||||
Restructured loans—nonaccrual | 1,880 | 1,910 | 1,944 | 9,298 | 9,446 | 1,880 | 9,446 | |||||||||||||||||||||
Restructured loans—accrual | 2,955 | 3,009 | 3,055 | 13,623 | 13,093 | 2,955 | 13,093 | |||||||||||||||||||||
Total nonperforming loans held for investment | 60,307 | 69,955 | 58,791 | 83,898 | 70,806 | 60,307 | 70,806 | |||||||||||||||||||||
Real estate acquired through foreclosure and repossessed assets | 653 | 2,532 | 802 | 802 | 802 | 609 | 802 | |||||||||||||||||||||
Total nonperforming assets | $ | 60,960 | $ | 72,487 | $ | 59,593 | $ | 84,700 | $ | 71,608 | $ | 60,916 | $ | 71,608 | ||||||||||||||
Charge-offs: | ||||||||||||||||||||||||||||
Commercial and industrial | $ | (5,374 | ) | $ | (179 | ) | $ | (5,300 | ) | $ | (2,699 | ) | $ | (6,447 | ) | $ | (13,552 | ) | $ | (9,065 | ) | |||||||
Owner occupied commercial real estate | — | — | — | — | (126 | ) | — | (1,087 | ) | |||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | — | |||||||||||||||||||||
Construction, land & land development | — | — | — | — | — | — | (95 | ) | ||||||||||||||||||||
Residential mortgage | — | — | — | — | (19 | ) | — | (19 | ) | |||||||||||||||||||
Other consumer | (55 | ) | (113 | ) | (52 | ) | (24 | ) | (112 | ) | (244 | ) | (256 | ) | ||||||||||||||
Total charge-offs | (5,429 | ) | (292 | ) | (5,352 | ) | (2,723 | ) | (6,704 | ) | (13,796 | ) | (10,522 | ) | ||||||||||||||
Recoveries: | ||||||||||||||||||||||||||||
Commercial and industrial | $ | 117 | $ | 4 | $ | 4 | $ | 8 | $ | 6 | $ | 133 | $ | 676 | ||||||||||||||
Owner occupied commercial real estate | — | — | — | — | — | — | 4 | |||||||||||||||||||||
Commercial real estate | 1 | 2 | 5 | 2 | 1 | 10 | 8 | |||||||||||||||||||||
Construction, land & land development | — | — | — | — | 2 | — | 77 | |||||||||||||||||||||
Residential mortgage | 9 | 42 | 290 | 15 | 27 | 356 | 121 | |||||||||||||||||||||
Other consumer | 230 | 24 | 9 | 48 | 3 | 311 | 132 | |||||||||||||||||||||
Total recoveries | 357 | 72 | 308 | 73 | 39 | 810 | 1,018 | |||||||||||||||||||||
Net (charge-offs) recoveries | $ | (5,072 | ) | $ | (220 | ) | $ | (5,044 | ) | $ | (2,650 | ) | $ | (6,665 | ) | $ | (12,986 | ) | $ | (9,504 | ) | |||||||
Allowance for loan losses at end of period | $ | 32,534 | $ | 35,186 | $ | 35,086 | $ | 38,233 | $ | 31,220 | $ | 32,534 | $ | 31,220 | ||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||||||||||
Nonperforming assets to total assets | 1.38 | % | 1.64 | % | 1.36 | % | 2.00 | % | 1.68 | % | 1.38 | % | 1.68 | % | ||||||||||||||
Nonperforming loans to total loans held for investment | 1.82 | 2.08 | 1.82 | 2.68 | 2.22 | 1.82 | 2.22 | |||||||||||||||||||||
Allowance for loan losses to total loans held for investment | 0.98 | 1.05 | 1.09 | 1.22 | 0.98 | 0.98 | 0.98 | |||||||||||||||||||||
Net charge-offs (recoveries) to average loans outstanding | 0.15 | 0.01 | 0.16 | 0.08 | 0.22 | 0.40 | 0.31 | |||||||||||||||||||||
GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Tangible Book Value Per Common Share. Tangible book value is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Green calculates: (a) tangible common equity as stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of shares of common stock outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is our book value per common share.
Green believes that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total shareholders’ equity | $ | 510,579 | $ | 490,204 | $ | 479,493 | $ | 468,878 | $ | 463,795 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles | 7,307 | 7,584 | 7,881 | 8,187 | 8,503 | |||||||||||||||
Tangible common equity | $ | 417,981 | $ | 397,329 | $ | 386,321 | $ | 375,400 | $ | 370,001 | ||||||||||
Common shares outstanding1 | 37,384 | 37,368 | 37,289 | 37,163 | 37,103 | |||||||||||||||
Book value per common share1 | $ | 13.66 | $ | 13.12 | $ | 12.86 | $ | 12.62 | $ | 12.50 | ||||||||||
Tangible book value per common share1 | $ | 11.18 | $ | 10.63 | $ | 10.36 | $ | 10.10 | $ | 9.97 |
1 Excludes the dilutive effect of common stock issuable upon exercise of outstanding stock options. The number of exercisable options outstanding was 659,125 as of
GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Green calculates: (a) tangible common equity as shareholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets, less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders’ equity to total assets.
Green believes that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders’ equity and assets while not increasing Green's tangible common equity or tangible assets.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets and presents Green's tangible common equity to tangible assets:
Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Tangible Common Equity | ||||||||||||||||||||
Total shareholders’ equity | $ | 510,579 | $ | 490,204 | $ | 479,493 | $ | 468,878 | $ | 463,795 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||
Core deposit intangibles | 7,307 | 7,584 | 7,881 | 8,187 | 8,503 | |||||||||||||||
Tangible common equity | $ | 417,981 | $ | 397,329 | $ | 386,321 | $ | 375,400 | $ | 370,001 | ||||||||||
Tangible Assets | ||||||||||||||||||||
Total assets | $ | 4,405,753 | $ | 4,419,874 | $ | 4,391,677 | $ | 4,225,247 | $ | 4,261,916 | ||||||||||
Less Adjustments: | ||||||||||||||||||||
Goodwill | (85,291 | ) | (85,291 | ) | (85,291 | ) | (85,291 | ) | (85,291 | ) | ||||||||||
Core deposit intangibles | (7,307 | ) | (7,584 | ) | (7,881 | ) | (8,187 | ) | (8,503 | ) | ||||||||||
Tangible assets | $ | 4,313,155 | $ | 4,326,999 | $ | 4,298,505 | $ | 4,131,769 | $ | 4,168,122 | ||||||||||
Tangible Common Equity to Tangible Assets | 9.69 | % | 9.18 | % | 8.99 | % | 9.09 | % | 8.88 | % | ||||||||||
GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Return on Average Tangible Common Equity. Return on average tangible common equity is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Green calculates: (a) return as net income less the effect of intangible assets as net income, less amortization of core deposit intangibles, net of taxes; (b) average tangible common equity as average shareholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
Green believes that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of intangible assets. Goodwill and other intangible assets, including core deposit intangibles, have the effect of increasing total shareholders’ equity, while not increasing Green's tangible common equity. This measure is particularly relevant to acquisitive institutions who may have higher balances in goodwill and other intangible assets than non-acquisitive institutions.
The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income excluding amortization of core deposit intangibles, net of tax to net income and presents Green's return on average tangible common equity:
As of and for the Quarter Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Net income adjusted for amortization of core deposit intangibles | ||||||||||||||||||||||||||||
Net income | $ | 15,327 | $ | 15,597 | $ | 16,421 | $ | 9,362 | $ | 2,619 | $ | 56,707 | $ | 34,136 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of core deposit intangibles | 277 | 297 | 306 | 316 | 330 | 1,196 | 1,472 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 59 | 62 | 64 | 66 | 116 | 251 | 515 | |||||||||||||||||||||
Net income adjusted for amortization of core deposit intangibles | $ | 15,545 | $ | 15,832 | $ | 16,663 | $ | 9,612 | $ | 2,833 | $ | 57,652 | $ | 35,093 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average shareholders’ equity | $ | 498,521 | $ | 485,377 | $ | 471,958 | $ | 466,015 | $ | 465,859 | $ | 480,569 | $ | 451,147 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Average goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||||||||
Average core deposit intangibles | 7,440 | 7,726 | 8,029 | 8,343 | 8,661 | 7,881 | 9,254 | |||||||||||||||||||||
Average tangible common equity | $ | 405,790 | $ | 392,360 | $ | 378,638 | $ | 372,381 | $ | 371,907 | $ | 387,397 | $ | 356,602 | ||||||||||||||
Return on Average Tangible Common Equity (Annualized) | 15.20 | % | 16.01 | % | 17.65 | % | 10.47 | % | 3.02 | % | 14.88 | % | 9.84 | % | ||||||||||||||
GREEN BANCORP, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings and pre-tax, pre-provision operating earnings are non-GAAP measures used by management to evaluate the Company’s financial performance. Green calculates (a) operating earnings as net income (loss) plus loss (gain) on sale of securities available-for-sale, net, plus loss (gain) on held for sale loans, net, plus stock based compensation expense for performance option vesting, plus shelf and secondary offering expenses. Green calculates (b) pre-tax, pre-provision operating earnings as (a) operating earnings plus provision (benefit) for income taxes, plus provision for loan losses. Green calculates (c) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. Green calculates (d) operating return on average tangible common equity as operating earnings as described in clause (a) divided by average tangible common equity (average tangible common equity as average stockholders' equity less average goodwill and average intangible assets, net of accumulated amortization). Green calculates operating efficiency ratio as non-interest expense plus adjustments to operating non-interest expense divided by (i) non-interest income plus adjustments to operating non-interest income plus (ii) net interest income.
Green believes that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the company and provide meaningful comparisons to its peers.
The following tables reconcile, as of the dates set forth below, operating earnings and pre-tax, pre-provision operating earnings and related metrics:
For the Quarter Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Operating Earnings | ||||||||||||||||||||||||||||
Net Income | $ | 15,327 | $ | 15,597 | $ | 16,421 | $ | 9,362 | $ | 2,619 | 56,707 | 34,136 | ||||||||||||||||
Plus: Loss (gain) on sale of securities available-for-sale, net | — | — | (66 | ) | — | — | (66 | ) | 38 | |||||||||||||||||||
Plus: Loss on held for sale loans, net | — | — | — | — | 1,098 | — | 2,308 | |||||||||||||||||||||
Plus: Stock based compensation expense for performance option vesting | — | — | — | — | 3,051 | — | 3,051 | |||||||||||||||||||||
Plus: Shelf and secondary offering expenses | — | — | 337 | 397 | — | — | — | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | — | — | $ | 57 | 83 | 1,452 | $ | (14 | ) | $ | 1,889 | |||||||||||||||||
Plus: Non-deductible merger and acquisition expenses | 1,232 | 2,955 | — | — | — | 4,187 | — | |||||||||||||||||||||
Net operating earnings | $ | 16,559 | $ | 18,552 | $ | 16,635 | $ | 9,676 | $ | 5,316 | $ | 60,842 | $ | 37,644 | ||||||||||||||
Weighted average diluted shares outstanding | 37,767 | 37,726 | 37,646 | 37,586 | 37,393 | 37,681 | 37,297 | |||||||||||||||||||||
Diluted earnings per share | $ | 0.41 | $ | 0.41 | $ | 0.44 | $ | 0.25 | $ | 0.07 | 1.50 | 0.92 | ||||||||||||||||
Diluted operating earnings per share | 0.44 | 0.49 | 0.44 | 0.26 | 0.14 | 1.61 | 1.01 | |||||||||||||||||||||
Pre-Tax, Pre-Provision Operating Earnings | ||||||||||||||||||||||||||||
Net Income | $ | 15,327 | $ | 15,597 | $ | 16,421 | $ | 9,362 | $ | 2,619 | $ | 56,707 | $ | 34,136 | ||||||||||||||
Plus: Provision for income taxes | 4,449 | 4,943 | 4,283 | 2,322 | 10,142 | 15,997 | 26,964 | |||||||||||||||||||||
Plus: Provision for loan losses | 2,420 | 320 | 1,897 | 9,663 | 4,405 | 14,300 | 14,360 | |||||||||||||||||||||
Plus: Loss (gain) on sale of securities available-for-sale, net | — | — | (66 | ) | — | — | (66 | ) | 38 | |||||||||||||||||||
Plus: Loss on held for sale loans, net | — | — | — | — | 1,098 | — | 2,308 | |||||||||||||||||||||
Plus: Stock based compensation expense for performance option vesting | — | — | — | — | 3,051 | — | 3,051 | |||||||||||||||||||||
Plus: Shelf and secondary offering expenses | — | — | 337 | 397 | — | — | — | |||||||||||||||||||||
Plus: Merger and acquisition expenses | 1,232 | 2,955 | — | — | — | 4,187 | — | |||||||||||||||||||||
Net pre-tax, pre-provision operating earnings | $ | 23,428 | $ | 23,815 | $ | 22,872 | $ | 21,744 | $ | 21,315 | $ | 91,125 | $ | 80,857 | ||||||||||||||
For the Quarter Ended | For the Twelve Months Ended |
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Dec 31, 2018 |
Sep 30, 2018 |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 31, 2017 |
Dec 31, 2018 |
Dec 31, 2017 |
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(Dollars in thousands) | ||||||||||||||||||||||||||||
Total average assets | $ | 4,423,270 | $ | 4,360,244 | $ | 4,253,357 | $ | 4,204,200 | $ | 4,204,105 | $ | 4,311,004 | $ | 4,112,784 | ||||||||||||||
Pre-tax, pre-provision operating return on average assets (annualized) | 2.10 | % | 2.17 | % | 2.15 | % | 2.10 | % | 2.01 | % | 2.11 | % | 1.97 | % | ||||||||||||||
Average Total Assets | $ | 4,423,270 | $ | 4,360,244 | $ | 4,253,357 | $ | 4,204,200 | $ | 4,204,105 | 4,311,004 | 4,112,784 | ||||||||||||||||
Return on average assets1 | 1.37 | % | 1.42 | % | 1.54 | % | 0.90 | % | 0.25 | % | 1.32 | % | 0.83 | % | ||||||||||||||
Operating return on average assets1 | 1.49 | % | 1.69 | % | 1.56 | % | 0.93 | % | 0.50 | % | 1.41 | % | 0.92 | % | ||||||||||||||
Operating earnings adjusted for amortization of core deposit intangibles | ||||||||||||||||||||||||||||
Operating earnings | $ | 16,559 | $ | 18,552 | $ | 16,635 | $ | 9,676 | $ | 5,316 | $ | 60,842 | $ | 37,644 | ||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Plus: Amortization of core deposit intangibles | 277 | 297 | 306 | 316 | 330 | 1,196 | 1,472 | |||||||||||||||||||||
Less: Tax benefit at the statutory rate | 58 | 62 | 64 | 66 | 116 | 184 | 515 | |||||||||||||||||||||
Operating earnings adjusted for amortization of core deposit intangibles | $ | 16,778 | $ | 18,787 | $ | 16,877 | $ | 9,926 | $ | 5,530 | $ | 61,854 | $ | 38,601 | ||||||||||||||
Average Tangible Common Equity | ||||||||||||||||||||||||||||
Total average shareholders’ equity | $ | 498,521 | $ | 485,377 | $ | 471,958 | $ | 466,015 | $ | 465,859 | 480,569 | 451,147 | ||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Average goodwill | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | 85,291 | |||||||||||||||||||||
Average core deposit intangibles | 7,440 | 7,726 | 8,029 | 8,343 | 8,661 | 7,881 | 9,254 | |||||||||||||||||||||
Average tangible common equity | $ | 405,790 | $ | 392,360 | $ | 378,638 | $ | 372,381 | $ | 371,907 | $ | 387,397 | $ | 356,602 | ||||||||||||||
Operating return on average tangible common equity1 | 16.40 | % | 19.00 | % | 17.88 | % | 10.81 | % | 5.90 | % | 15.97 | % | 10.82 | % | ||||||||||||||
Efficiency ratio | 50.52 | % | 53.64 | % | 50.05 | % | 50.81 | % | 57.87 | % | 51.26 | % | 52.71 | % | ||||||||||||||
Operating efficiency ratio | 47.77 | % | 47.07 | % | 49.45 | % | 49.90 | % | 47.69 | % | 48.95 | % | 49.32 | % |
1 Annualized ratio.
Media Contact:LaVonda Renfro 972-349-6200 lrenfro@veritexbank.com Investor Relations:Susan Caudle 972-349-6132 scaudle@veritexbank.com