C1 FINANCIAL INC ST. PETERSBURG, Fla., Oct. 15, 2015 /PRNewswire/ -- C1 Financial, Inc. (NYSE: BNK) today reported net income of $5.0 million, or $0.31 per diluted common share for the third quarter of 2015 ("3Q15"), compared to net income of $4.7 million, or $0.29 per diluted common share for the second quarter of 2015 ("2Q15"), a 5.5% increase in net income, and compared to net income of $2.6 million, or $0.18 per diluted common share for the third quarter of 2014 ("3Q14"), a 90.6% increase in net income.
MESSAGE FROM PRESIDENT & CHIEF EXECUTIVE OFFICER
Trevor Burgess, President & Chief Executive Officer of C1 Financial, Inc. stated, "We are excited by our strong results in the third quarter as we grow our earning assets and leverage our infrastructure. Our deposit growth in the third quarter will provide needed funding for the strong pipeline of new loan relationships as we head into the end of the year. C1 Labs technology has contributed to productivity gains that has allowed us to reduce our retail network headcount by approximately 10%, which should allow us to reach best in class levels of assets and revenue per employee over the long term."
3Q15 showed several positive trends in our results:
1. We originated $93 million in new loans in the quarter, resulting in C1
Bank originated loans outstanding up $49 million (+5%) from the prior
quarter and $338 million (+45%) year-over-year. Loan originations year to
date were $447 million, up $97 million (+28%) compared to last year.
Overall loans outstanding (including acquired loans) were $1.390 billion
at the end of 3Q15 (up 2% from the prior quarter and up 23%
year-over-year). July and September were strong months for new
originations while August was seasonally low, further affected by
extensive rain that delayed many construction projects;
2. During the quarter, core deposits grew $44 million (+4.6%) compared to
the prior quarter and reached $998 million. Core deposits were 78.9% of
total deposits at the end of 3Q15, compared to 78.5% at the end of 2Q15.
Noninterest-bearing deposits represented 26.6% of total deposits at the
end of 3Q15, slightly higher than at the end of the previous quarter. Our
cost of total deposits grew 2 basis points ("bps") to 0.46% when compared
to 2Q15, as this mix change took place late in the quarter;
3. Adjusted net interest margin (a non-GAAP measure which excludes the
impact of purchase accounting accretion income) improved by 4 bps (from
4.60% for 2Q15 to 4.64% for 3Q15), reflecting another quarter of high
loan fees (resulting primarily from management's successful
implementation and collection of loan prepayment related fees) and
enhanced by the use of excess cash. On a GAAP basis, net interest margin
was 4.75% for 3Q15, compared to 4.71% for 2Q15;
4. Net interest income was up $1.2 million when compared to 2Q15, driven
mainly by an increase in average loan balances which improved the earning
asset mix;
5. In 3Q15, sales of other real estate owned ("OREO") reduced our OREO
balance by $1.2 million. Including the decrease in nonperforming loans,
total nonperforming assets declined $1.9 million when compared to the
previous quarter. Our Texas Ratio (a non-GAAP measure) was 21.0% at the
end of 3Q15, improved from 22.4% at the end of 2Q15;
6. C1 Bank originated nonperforming assets accounted for less than 5% of our
total nonperforming assets (with C1 Bank originated nonperforming loans
below 0.2% of C1 Bank originated loans outstanding). Our allowance for
loan losses was 0.57% of total loans at the end of 3Q15 and 0.56% at the
end of 2Q15;
7. Our headcount ended the quarter at 239, down from 247 at the end of 2Q15
as a result of a restructuring of our retail network staffing. Such
restructuring was in part made possible because of technology based
productivity innovation coming out of our C1 Labs group.
ASSETS
Total assets at the end of 3Q15 were $1.712 billion, $34.7 million higher (+2.1%) than at the end of 2Q15, primarily funded by deposit growth ($48.4 million) net of a decline in Federal Home Loan Bank ("FHLB") advances ($19 million).
LOANS
Total loans at the end of 3Q15 were $1.390 billion, up $28.8 million (+2.1%) from the end of 2Q15. Loan growth in 3Q15 was mainly driven by loan originations of $93.5 million and funding of unfunded commitments, partially offset by higher loan prepayments in the C1 Bank originated loan portfolio, and loans paying off in both the C1 Bank originated loan portfolio and in the acquired portfolio. The outstanding balance of C1 Bank originated loans grew $49.0 million (+4.7%) during 3Q15, while the outstanding balance of acquired loans decreased $20.2 million (-6.4%) to $295 million at the end of 3Q15. At the end of 3Q15, C1 Bank originated loans represented 79% of the loan portfolio, up from 77% at the end of 2Q15.
DEPOSITS
Total deposits at the end of 3Q15 were $1.264 billion, an increase of $48.4 million (+4.0%) from the end of 2Q15. Core deposits were $997.8 million, or 78.9% of total deposits at the end of 3Q15, compared to $954.1 million, or 78.5% of total deposits at the end of 2Q15. This positive shift in the average deposit mix took place later in the quarter and didn't reflect in our cost of total deposits, which was up to 0.46% in 3Q15 from 0.44% in 2Q15. We are scheduled to open our new Ft. Lauderdale banking center location in November 2015.
ASSET QUALITY
Nonperforming assets totaled $43.3 million at the end of 3Q15, declining $1.9 million (-4.2%) when compared to the end of 2Q15. The decline in 3Q15 was driven primarily by a reduction of $1.2 million in OREO balances as we continued to sell properties. As a percentage of total assets, nonperforming assets decreased to 2.53% at the end of 3Q15 when compared to 2.69% at the end of 2Q15. Our Texas Ratio improved to 21.0% at the end of 3Q15 from 22.4% at the end of 2Q15. At the end of 3Q15, $2.0 million (less than 5.0%) of total nonperforming assets were related to loans originated by C1 Bank, compared to $340 thousand (less than 1%) at the end of 2Q15, the increase being primarily due to one loan relationship downgraded to nonperforming during the quarter.
Total recoveries of $418 thousand, net of charge-offs of $94 thousand, resulted in net recoveries of $324 thousand in 3Q15 (0.09% of total average loans on an annualized basis). Net recoveries reflected our continued effort to collect deficiencies and a lower level of charge-offs, and provided a $67 thousand reversal of provision for loan losses after covering the allowance for loan losses required for net loan growth.
Our allowance for loan losses at the end of 3Q15 was $7.9 million (representing 0.57% of total loans), compared to $7.7 million (representing 0.56% of total loans) at the end of 2Q15. On a non-GAAP basis (including remaining loan discount from acquired performing loans), the allowance plus discount amount totaled $10.8 million (representing 0.77% of total loans) at the end of 3Q15, compared to $10.7 million (representing 0.79% of total loans) at the end of 2Q15.
NET INTEREST INCOME AND MARGIN
Net interest income for 3Q15 totaled $18.0 million, up $1.2 million (+7.3%) from 2Q15, mainly driven by growth of our average loans balance which allowed for an improvement in our earning assets mix.
Net interest margin for 3Q15 increased 4 bps to 4.75% from 4.71% in 2Q15, mainly driven by a 5 bps higher yield on average earning assets as we redeployed lower-yielding cash investments into higher-yielding loans, partially offset by a shift in the average deposit mix (which resulted in a 2 bps increase in the cost of total deposits when compared to the previous quarter). Strong loan fees (driven primarily by prepayments) continued to enhance our yield on loans in the quarter. Adjusted net interest margin (which excludes the effect of purchase accounting) was 4.64% for 3Q15 and 4.60% in 2Q15.
Our excess cash (defined as our available cash above our target liquidity level - See explanation of non-GAAP financial measures) was $30.7 million at the end of 3Q15, while our average excess cash was $10.6 million for 3Q15 (down from $27.6 million in 2Q15), as we successfully deployed it into loans during the quarter.
NONINTEREST INCOME
Noninterest income for 3Q15 totaled $2.1 million, $2.2 million less when compared to 2Q15. The decrease was primarily due to a $2.6 million gain on the sale of land (included in gains on disposals of premises and equipment) in 2Q15 and a $505 thousand decline in gains on sales of loans (due to a lower volume of Small Business Administration ("SBA") loans sold). Partially offsetting the reduction in noninterest income was a $670 thousand gain on the early redemption of long-term FHLB advances (included in other noninterest income) completed for asset-liability and liquidity management purposes, and a $129 thousand increase in gains on sales of OREO.
NONINTEREST EXPENSE & TAXES
Noninterest expense totaled $12.0 million in 3Q15, only $127 thousand more when compared to 2Q15. The increase was primarily due to higher professional fees of $164 thousand and loan collection expenses of $83 thousand (primarily due to activity relating to nonperforming assets), and OREO valuation allowance expense of $67 thousand. These higher expenses were mainly offset by lower advertising expenses of $180 thousand (primarily due to fewer promotional and seasonal activities).
Our income tax expense was $3.2 million for 3Q15 and $3.3 million for 2Q15. The effective tax rate for 3Q15 was 39.3%, which reflected the projected tax rate for 2015 that was updated in 3Q15. The effective tax rate for 2Q15 was 40.9%, which included a $163 thousand audit related tax adjustment.
EFFICIENCY
Our efficiency ratio was 59.4% in 3Q15, higher than the 56.0% in 2Q15 and substantially lower than the 71.3% in 3Q14. The unfavorable change in the efficiency ratio versus the prior quarter was impacted by the gain on sale of land during 2Q15. The improvement compared to same quarter last year was driven by strong revenue growth combined with controlled non-interest expense, as we leverage our existing infrastructure. We also closely track annualized revenue per employee and average assets per employee, as measures of efficiency. Annualized revenue per employee was $367 thousand in 3Q15, compared to $384 thousand in 2Q15 and $305 thousand in 3Q14, which reflected the impact of the gain on sale of land during 2Q15 and a substantial improvement year over year, while average assets per employee were $6.9 million in 3Q15, compared to $6.6 million in 2Q15 and $6.4 million in 3Q14, which reflected our efforts to grow our balance sheet and our headcount efficiency initiatives.
NET INCOME
Net income was $5.0 million for 3Q15, compared to $4.7 million for 2Q15. This corresponded to a return on average assets of 1.18% for both 3Q15 and 2Q15 and a return on average equity of 10.02% and 9.88% for 3Q15 and 2Q15, respectively.
CAPITAL
Our consolidated Tier 1 leverage ratio was 11.79% and total risk-based capital ratio was 14.04% as of the end of 3Q15, reflecting that we remained well capitalized under Interim Final Basel III rules. Additional capital ratios are presented in the financial tables.
OTHER EVENTS DURING 3Q15
On July 1, C1 Bank announced that Diane Morton joined its executive management team as EVP, Chief Human Capital Officer & General Counsel and Dustin Symes joined as EVP, Retail Lending Executive.
WEBCAST AND CONFERENCE CALL INFORMATION
C1 Financial, Inc. will host a webcast and conference call at 8:30 a.m. (ET) on October 16, 2015 to discuss third quarter 2015 results and other matters. To access the conference call, please dial 1-855-209-8212. The live webcast audio can be heard at http://services.choruscall.com/links/bnk151016. For those unable to participate in the webcast, it will be archived on C1 Financial's website at investors.c1bank.com.
C1 Financial, Inc. Information
Our name expresses our ideals to put our Clients 1(st) and our Community 1(st). We are focused on serving the needs of entrepreneurs, tailoring a wide range of relationship banking services to entrepreneurs and their families, including commercial loans and a full line of depository products. We are based in St. Petersburg, Florida and operate from 31 banking centers and one loan production office on the West Coast of Florida and in Miami-Dade and Orange Counties. As of December 31, 2014, we were the 18(th) largest bank headquartered in the state of Florida by assets and the 16(th) largest by equity, having grown both organically and through acquisitions, and we were the sixth fastest-growing bank in the country as measured by asset growth for the five-year period ending June 30, 2014. Additional information is available at www.c1bank.com.
Forward-Looking Statements
In addition to historical information, this earnings release contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management's expectations. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or "may," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. There are a number of potential factors, risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These potential factors, risks and uncertainties are discussed in our Prospectus filed with the Securities and Exchange Commission on August 13, 2015.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this earnings release to conform our prior statements to actual results or revised expectations.
C1 Financial, Inc.
Consolidated Balance Sheets - Unaudited
(Dollars in thousands, except per share data)
September 30, June 30, September 30,
2015 2015 2014
---- ---- ----
ASSETS
Cash and cash equivalents $175,289 $165,200 $283,741
Time deposits in other financial
institutions 247 247 -
Federal Home Loan Bank stock, at cost 11,668 12,476 9,696
Loans receivable, net 1,376,617 1,348,185 1,125,151
Premises and equipment, net 63,613 63,576 63,592
Other real estate owned, net 26,490 27,686 37,956
Bank-owned life insurance 43,018 42,743 8,867
Accrued interest receivable 4,269 3,953 3,131
Core deposit intangible 754 824 1,074
Prepaid expenses 4,778 4,983 5,961
Other assets 5,740 7,933 8,876
----- ----- -----
Total assets $1,712,483 $1,677,806 $1,548,045
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest bearing $336,361 $322,173 $294,144
Interest bearing 928,019 893,815 870,820
------- ------- -------
Total deposits 1,264,380 1,215,988 1,164,964
Federal Home Loan Bank advances 242,000 261,000 189,000
Other borrowings - - 3,000
Other liabilities 6,543 6,263 5,785
----- ----- -----
Total liabilities 1,512,923 1,483,251 1,362,749
--------- --------- ---------
Stockholders' equity
Common stock, par value $1.00;
100,000,000
shares authorized 16,101 16,101 16,101
Additional paid-in capital 148,122 148,122 148,122
Retained earnings 35,337 30,332 21,073
Accumulated other comprehensive income - - -
--- --- ---
Total stockholders' equity 199,560 194,555 185,296
------- ------- -------
Total liabilities and stockholders'
equity $1,712,483 $1,677,806 $1,548,045
========== ========== ==========
Period-end shares outstanding 16,100,966 16,100,966 16,100,966
Book value per share $12.39 $12.08 $11.51
C1 Financial, Inc.
Consolidated Income Statements - Unaudited
(Dollars in thousands, except per share data)
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
September 30, June 30, September 30, September 30, September 30,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
Interest income
Loans, including fees $20,340 $18,899 $16,028 $56,803 $46,481
Securities 3 3 2 9 59
Federal funds sold and other 203 213 215 618 612
--- --- --- --- ---
Total interest income 20,546 19,115 16,245 57,430 47,152
------ ------ ------ ------ ------
Interest expense
Savings and interest-bearing
demand deposits 654 631 546 1,887 1,572
Time deposits 795 677 953 2,256 2,919
Federal Home Loan Bank advances 1,057 996 709 2,861 1,852
Other borrowings - - 15 - 44
--- --- --- --- ---
Total interest expense 2,506 2,304 2,223 7,004 6,387
----- ----- ----- ----- -----
Net interest income 18,040 16,811 14,022 50,426 40,765
Provision (reversal of provision)
for loan losses (67) 1,276 207 1,400 4,815
--- ----- --- ----- -----
Net interest income after provision
for loan losses 18,107 15,535 13,815 49,026 35,950
------ ------ ------ ------ ------
Noninterest income
Gains on sales of securities - - - - 241
Gains on sales of loans 79 584 775 893 2,323
Service charges and fees 602 581 526 1,750 1,658
Bargain purchase gain - - 37 - 48
Gains on sales of other real estate
owned, net 177 48 68 573 720
Bank-owned life insurance 276 258 41 626 118
Mortgage banking fees - - - - 47
Gains (losses) on disposals of
premises and equipment, net - 2,588 (12) 2,590 (12)
Other noninterest income 980 276 362 1,619 1,041
--- --- --- ----- -----
Total noninterest income 2,114 4,335 1,797 8,051 6,184
----- ----- ----- ----- -----
Noninterest expense
Salaries and employee benefits 5,276 5,229 4,777 15,722 13,526
Occupancy expense 1,388 1,360 1,138 3,960 3,310
Furniture and equipment 779 740 673 2,275 1,954
Regulatory assessments 349 390 362 1,100 1,067
Network services and data
processing 1,075 1,080 1,033 3,239 2,824
Printing and office supplies 54 71 77 183 270
Postage and delivery 78 80 52 242 181
Advertising and promotion 873 1,053 812 2,752 2,634
Other real estate owned related
expense, net 468 498 511 1,559 1,625
Other real estate owned -valuation
allowance expense 102 35 45 168 609
Amortization of intangible assets 70 80 117 233 412
Professional fees 673 509 750 1,880 2,174
Loan collection expenses 86 3 140 173 463
Other noninterest expense 701 717 793 2,166 2,178
--- --- --- ----- -----
Total noninterest expense 11,972 11,845 11,280 35,652 33,227
------ ------ ------ ------ ------
Income before income taxes 8,249 8,025 4,332 21,425 8,907
Income tax expense 3,244 3,282 1,706 8,503 3,525
----- ----- ----- ----- -----
Net Income $5,005 $4,743 $2,626 $12,922 $5,382
====== ====== ====== ======= ======
Weighted average shares outstanding
-basic 16,100,966 16,100,966 14,572,140 16,100,966 13,442,318
Weighted average shares outstanding
-diluted 16,100,966 16,100,966 14,572,140 16,100,966 13,442,318
Basic net income per share $0.31 $0.29 $0.18 $0.80 $0.40
Diluted net income per share 0.31 0.29 0.18 0.80 0.40
C1 Financial, Inc.
Average Balance Sheets - Unaudited
(Dollars in thousands)
For the Three Months Ended
--------------------------
September 30, 2015 June 30, 2015 September 30, 2014
------------------ ------------- ------------------
Average Balances (1) Income/ Expense Yields/ Rates Average Balances (1) Income/ Expense Yields/ Rates Average Balances (1) Income/ Expense Yields/ Rates
------------------- --------------- ------------- ------------------- --------------- ------------- ------------------- --------------- -------------
Interest-earning assets
Loans receivable (2) $1,374,425 $20,340 5.87% $1,286,665 $18,899 5.89% $1,098,466 $16,028 5.79%
Securities available for sale and other
securities 250 3 4.56% 250 3 4.56% 250 2 4.56%
Federal funds sold and balances at
Federal Reserve Bank 121,155 68 0.22% 132,527 93 0.28% 222,894 129 0.23%
Time deposits in other financial
institutions 247 - 0.42% 147 - 0.43% - - 0.00%
FHLB stock 11,824 135 4.51% 11,300 120 4.26% 9,152 86 3.71%
------ --- ------ --- ----- ---
Total interest-earning assets 1,507,901 20,546 5.41% 1,430,889 19,115 5.36% 1,330,762 16,245 4.84%
--------- ------ --------- ------ --------- ------
Noninterest-earning assets
Cash and due from banks 38,612 36,213 39,723
Other assets (3) 141,149 148,366 123,182
------- ------- -------
Total noninterest-earning assets 179,761 184,579 162,905
------- ------- -------
Total assets $1,687,662 $1,615,468 $1,493,667
========== ========== ==========
Interest-bearing liabilities
Interest-bearing deposits:
Time $274,925 795 1.15% $235,998 677 1.15% $346,037 953 1.09%
Money market 443,152 490 0.44% 440,430 476 0.43% 354,146 390 0.44%
Interest-bearing demand 155,418 142 0.36% 145,027 133 0.37% 139,175 135 0.38%
Savings 38,921 22 0.22% 39,039 22 0.22% 38,130 21 0.22%
------ --- ------ --- ------ ---
Total interest-bearing deposits 912,416 1,449 0.63% 860,494 1,308 0.61% 877,488 1,499 0.68%
Other interest-bearing liabilities:
FHLB advances 245,847 1,057 1.71% 233,065 996 1.72% 176,964 709 1.59%
Other borrowings - - 0.00% - - 0.00% 3,000 15 1.96%
--- --- --- --- ----- ---
Total interest-bearing liabilities 1,158,263 2,506 0.86% 1,093,559 2,304 0.85% 1,057,452 2,223 0.83%
--------- ----- --------- ----- --------- -----
Noninterest-bearing liabilities and
stockholders' equity:
Demand deposits 325,044 324,831 270,328
Other liabilities 6,127 4,467 4,954
Stockholders' equity 198,228 192,611 160,933
------- ------- -------
Total noninterest-bearing liabilities
and stockholder's equity 529,399 521,909 436,215
------- ------- -------
Total liabilities and stockholders'
equity $1,687,662 $1,615,468 $1,493,667
========== ========== ==========
Interest rate spread (taxable-equivalent
basis) 4.55% 4.51% 4.01%
Net interest income (taxable-equivalent
basis) $18,040 $16,811 $14,022
======= ======= =======
Net interest margin (taxable-equivalent
basis) 4.75% 4.71% 4.18%
Average interest-earning assets to
interest-bearing liabilities 130.2% 130.8% 125.8%
(1) Calculated using daily averages.
(2) Average loans are gross, including nonaccrual loans and overdrafts (net of deferred loan fees and before the allowance for loan losses). Interest on loans includes net deferred fees and costs, and other loan fees of $1.4 million, $1.2 million and $515 thousand in the three months ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively.
(3) Other assets include bank-owned life insurance, tax lien certificates, OREO, fixed assets, interest receivable, prepaid expense and others.
C1 Financial, Inc.
Average Balance Sheets - Unaudited
(Dollars in thousands)
For the Nine Months Ended
-------------------------
September 30, 2015 September 30, 2014
------------------ ------------------
Average Balances (1) Income/ Expense Yields/ Rates Average Balances (1) Income/ Expense Yields/ Rates
------------------- --------------- ------------- ------------------- --------------- -------------
Interest-earning assets
Loans receivable (2) $1,290,074 $56,803 5.89% $1,065,815 $46,481 5.83%
Securities available for sale
and other securities 250 9 4.56% 520 59 15.25%
Federal funds sold and balances
at Federal Reserve Bank 139,866 259 0.25% 195,850 355 0.24%
Time deposits in other financial
institutions 132 - 0.44% - - 0.00%
FHLB stock 11,048 359 4.35% 8,554 257 4.01%
------ --- ----- ---
Total interest-earning assets 1,441,370 57,430 5.33% 1,270,739 47,152 4.96%
--------- ------ --------- ------
Noninterest-earning assets
Cash and due from banks 37,668 41,739
Other assets (3) 147,886 121,089
------- -------
Total noninterest-earning assets 185,554 162,828
------- -------
Total assets $1,626,924 $1,433,567
========== ==========
Interest-bearing liabilities
Interest-bearing deposits:
Time $267,148 2,256 1.13% $359,436 2,919 1.09%
Money market 431,168 1,411 0.44% 342,898 1,103 0.43%
Interest-bearing demand 148,831 411 0.37% 142,661 405 0.38%
Savings 38,917 65 0.22% 38,344 64 0.22%
------ --- ------ ---
Total interest-bearing deposits 886,064 4,143 0.63% 883,339 4,491 0.68%
Other interest-bearing
liabilities:
FHLB advances 225,483 2,861 1.70% 162,499 1,852 1.52%
Other borrowings - - 0.00% 3,000 44 1.96%
--- --- ----- ---
Total interest-bearing
liabilities 1,111,547 7,004 0.84% 1,048,838 6,387 0.81%
--------- ----- --------- -----
Noninterest-bearing liabilities
and stockholders' equity:
Demand deposits 317,078 236,666
Other liabilities 4,967 4,902
Stockholders' equity 193,332 143,161
------- -------
Total noninterest-bearing
liabilities and stockholder's
equity 515,377 384,729
------- -------
Total liabilities and
stockholders' equity $1,626,924 $1,433,567
========== ==========
Interest rate spread (taxable-
equivalent basis) 4.49% 4.15%
Net interest income (taxable-
equivalent basis) $50,426 $40,765
======= =======
Net interest margin (taxable-
equivalent basis) 4.68% 4.29%
Average interest-earning assets
to interest-bearing
liabilities 129.7% 121.2%
(1) Calculated using daily averages.
(2) Average loans are gross, including nonaccrual loans and overdrafts (net of deferred loan fees and before the allowance for loan losses). Interest on loans includes net deferred fees and costs, and other loan fees of $3.5 million and $1.6 million in the nine months ended September 30, 2015 and September 30, 2014,
respectively.
(3) Other assets include bank-owned life insurance, tax lien certificates, OREO, fixed assets, interest receivable, prepaid expense and others.
C1 Financial, Inc.
Selected Quarterly Financial Data - Unaudited
(In thousands, except per share and employee data)
3Q15 2Q15 1Q15 4Q14 3Q14
---- ---- ---- ---- ----
Statement of Income Data
Interest income $20,546 $19,115 $17,769 $17,158 $16,245
Interest expense 2,506 2,304 2,194 2,239 2,223
Net interest income 18,040 16,811 15,575 14,919 14,022
Provision (reversal of provision) for loan losses (67) 1,276 191 (1) 207
Bargain purchase gain - - - - 37
Total noninterest income 2,114 4,335 1,602 1,554 1,797
Total noninterest expense 11,972 11,845 11,835 14,005 11,280
Income before income taxes 8,249 8,025 5,151 2,469 4,332
Income tax expense 3,244 3,282 1,977 1,127 1,706
Net income 5,005 4,743 3,174 1,342 2,626
Selected Performance Metrics
Return on average assets 1.18% 1.18% 0.82% 0.34% 0.70%
Return on average equity 10.02% 9.88% 6.81% 2.84% 6.47%
Efficiency ratio (1) 59.4% 56.0% 68.9% 85.0% 71.3%
Full-time equivalent employees at period end 239 247 244 238 246
Revenue per average number of employees (1) $367 $384 $326 $307 $305
Average assets per average number of employees (1) 6,888 6,594 6,541 6,414 6,356
Per Share Outstanding Data
Net earnings per share $0.31 $0.29 $0.20 $0.08 $0.18
Diluted net earnings per share $0.31 $0.29 $0.20 $0.08 $0.18
Weighted average shares 16,101 16,101 16,101 16,101 14,572
Weighted average shares - diluted 16,101 16,101 16,101 16,101 14,572
Book value per share $12.39 $12.08 $11.79 $11.59 $11.51
Tangible book value per share (1) $12.33 $12.02 $11.72 $11.51 $11.43
Common shares outstanding at period end 16,101 16,101 16,101 16,101 16,101
Market value per share at period end $19.05 $19.38 $18.75 $18.29 $18.13
Market range per share:
High 19.77 19.84 19.10 19.70 18.77
Low 17.66 17.81 16.25 15.98 16.66
Balance Sheet Data
Cash and cash equivalents $175,289 $165,200 $182,824 $185,703 $283,741
Other securities (included in Other assets in consolidated balance
sheet) 250 250 250 250 250
Total loans 1,390,275 1,361,459 1,256,606 1,188,522 1,134,351
Loans originated by C1 Bank (Nonacquired) 1,095,247 1,046,227 925,511 840,275 757,529
Loans not originated by C1 Bank (Acquired) 295,028 315,232 331,095 348,247 376,822
Net deferred loan fees (5,726) (5,599) (4,881) (4,142) (3,759)
Loans receivable, gross (2) 1,384,549 1,355,860 1,251,725 1,184,380 1,130,592
Allowance for loan losses (7,932) (7,675) (5,787) (5,324) (5,441)
Loans receivable, net 1,376,617 1,348,185 1,245,938 1,179,056 1,125,151
Total assets 1,712,483 1,677,806 1,596,739 1,536,691 1,548,045
Total interest-bearing deposits 928,019 893,815 881,318 888,959 870,820
Total deposits 1,264,380 1,215,988 1,199,828 1,167,502 1,164,964
Borrowings 242,000 261,000 202,500 178,500 192,000
Federal Home Loan Bank 242,000 261,000 202,500 178,500 189,000
Other - - - - 3,000
Total liabilities 1,512,923 1,483,251 1,406,927 1,350,053 1,362,749
Total stockholders' equity 199,560 194,555 189,812 186,638 185,296
Tangible stockholders' equity (1) 198,557 193,482 188,659 185,402 183,973
Selected Average Balance Sheet Data
Loans receivable, gross (2) $1,374,425 $1,286,665 $1,207,295 $1,145,230 $1,098,466
Securities available for sale and other securities 250 250 250 250 250
Earning assets 1,507,901 1,430,889 1,383,959 1,395,052 1,330,762
Total assets 1,687,662 1,615,468 1,576,419 1,552,264 1,493,667
Total interest-bearing deposits 912,416 860,494 884,979 883,373 877,488
Total deposits 1,237,460 1,185,325 1,186,076 1,174,001 1,147,816
Borrowings 245,847 233,065 197,000 186,306 179,964
Total stockholders' equity 198,228 192,611 189,054 187,270 160,933
Yields Earned and Rates Paid
Loans receivable, gross (2) 5.87% 5.89% 5.90% 5.84% 5.79%
Adjusted loans receivable, gross (1),(3) 5.77% 5.79% 5.76% 5.65% 5.65%
Securities available for sale and other securities 4.56% 4.56% 4.56% 4.56% 4.56%
Earning assets 5.41% 5.36% 5.21% 4.88% 4.84%
Total interest-bearing deposits 0.63% 0.61% 0.64% 0.66% 0.68%
Total deposits 0.46% 0.44% 0.47% 0.50% 0.52%
Adjusted total deposits (1),(4) 0.46% 0.45% 0.48% 0.50% 0.53%
Borrowings 1.71% 1.72% 1.66% 1.63% 1.59%
Total interest-bearing liabilities 0.86% 0.85% 0.82% 0.83% 0.83%
Net interest margin (NIM) 4.75% 4.71% 4.56% 4.24% 4.18%
Adjusted NIM (1),(5) 4.64% 4.60% 4.41% 4.05% 4.03%
Capital Ratios
Total capital to risk-weighted assets (6) 14.04% 13.60% 14.01% 14.74% 15.45%
Tier 1 capital to risk-weighted assets (6) 13.51% 13.08% 13.59% 14.33% 14.96%
Common equity tier 1 capital to risk-weighted assets (6) 13.51% 13.08% 13.59% N/A N/A
Tier 1 leverage ratio (6) 11.79% 12.01% 12.01% 11.95% 12.32%
Tangible Equity / Tangible Assets (1) 11.60% 11.54% 11.82% 12.07% 11.89%
Equity / Assets 11.65% 11.60% 11.89% 12.15% 11.97%
Average Equity / Average Assets 11.75% 11.92% 11.99% 12.06% 10.77%
Asset Quality Data
Nonacquired nonperforming assets $2,008 $340 $428 $487 $567
Nonaccrual loans 2,008 340 428 443 523
Other real estate owned (OREO) - - - 44 44
Nonacquired restructured loans (7) - - - - -
Nonacquired nonperforming assets to nonacquired loans plus OREO 0.18% 0.03% 0.05% 0.06% 0.07%
Acquired nonperforming assets $41,256 $44,804 $49,597 $55,323 $58,004
Nonaccrual loans 14,766 17,118 19,276 20,451 20,092
OREO 26,490 27,686 30,321 34,872 37,912
Acquired restructured loans 961 891 900 906 913
Acquired nonperforming assets to acquired loans plus OREO 12.83% 13.07% 13.72% 14.44% 13.99%
Total nonperforming assets $43,264 $45,144 $50,025 $55,810 $58,571
Nonaccrual loans 16,774 17,458 19,704 20,894 20,615
OREO 26,490 27,686 30,321 34,916 37,956
Total restructured loans 961 891 900 906 913
Total nonperforming assets to total loans plus OREO 3.05% 3.25% 3.89% 4.56% 5.00%
Net charge-offs (recoveries) $(324) $(612) $(272) $116 $(641)
Charge-offs 94 69 4 552 157
Recoveries (418) (681) (276) (436) (798)
Asset Quality Ratios
Total nonperforming loans to loans receivable 1.21% 1.28% 1.57% 1.76% 1.82%
Total nonperforming assets to total assets 2.53% 2.69% 3.13% 3.63% 3.78%
Allowance for loan losses to nonperforming loans 47.29% 43.96% 29.37% 25.48% 26.39%
Annualized net charge-offs (recoveries) to total average loans (0.09)% (0.19)% (0.09)% 0.04% (0.23)%
Annualized nonacquired net charge-offs (recoveries) to average
nonacquired loans (0.01)% (0.14)% (0.01)% 0.02% (0.08)%
Allowance for loan losses to total loans receivable 0.57% 0.56% 0.46% 0.45% 0.48%
Allowance for loan losses to nonacquired loans 0.72% 0.73% 0.63% 0.63% 0.72%
Texas ratio (8) 21.0% 22.4% 25.7% 29.3% 30.9%
Loan Composition
Nonacquired loans by type
1-4 family residential real estate $181,431 $146,192 $132,253 $123,421 $116,244
Owner occupied commercial real estate 154,748 136,789 139,780 124,067 107,530
Nonowner occupied commercial real estate 385,605 407,654 343,539 311,239 275,598
Secured by farmland commercial real estate 51,452 52,876 54,774 57,825 59,009
Multifamily commercial real estate 26,812 26,721 26,993 27,385 26,256
Construction 152,442 135,586 92,389 88,072 75,126
Commercial 63,972 63,190 57,683 58,809 58,450
Consumer 78,785 77,219 78,100 49,457 39,316
Acquired loans by type
1-4 family residential real estate $85,807 $90,516 $96,758 $100,995 $105,083
Owner occupied commercial real estate 89,642 95,445 99,859 107,169 113,957
Nonowner occupied commercial real estate 76,579 83,227 86,089 88,363 95,549
Secured by farmland commercial real estate 1,907 1,941 1,977 2,013 3,242
Multifamily commercial real estate 4,924 5,040 5,140 5,516 5,941
Construction 16,381 16,985 18,738 19,364 20,069
Commercial 12,968 14,556 14,704 16,551 24,423
Consumer 6,820 7,522 7,830 8,276 8,558
New loan originations (9) $93,459 $177,090 $176,356 $139,009 $141,436
Unfunded commitments (includes loans, unused lines and standby
letters of credit) 210,389 237,877 245,051 189,049 181,224
Deposit Composition
Noninterest-bearing demand $336,361 $322,173 $318,510 $278,543 $294,144
Interest-bearing demand 177,688 148,724 146,873 140,598 135,623
Money market and savings 483,745 483,157 460,933 435,105 398,000
Retail time 246,913 247,700 251,825 286,979 310,243
Jumbo time (10) 19,673 14,234 21,687 26,277 26,954
(1) See below for the Generally Accepted Accounting Principles (GAAP) reconciliation and explanation of non-GAAP financial measures.
(2) Total loans, net of deferred loan fees and before the allowance for loan losses. Yield on gross loans is calculated on a 365-day basis and may differ from regulatory "Uniform Bank Performance Report" (UBPR) yield, which annualizes quarterly data by a factor of 4 (Section II, UBPR User's Guide).
(3) Adjusted yield earned on loans receivable excludes loan accretion from the acquired loan portfolio.
(4) Adjusted rate paid on total deposits excludes amortization of premium for acquired time deposits.
(5) Adjusted net interest margin excludes loan accretion from the acquired loan portfolio, and amortization of premiums for acquired time deposits and Federal Home Loan Bank advances.
(6) Ratios are calculated under Interim Final Basel III rules beginning in 1Q15. Ratios are calculated under Basel I rules prior to 1Q15.
(7) Restructured loans include accruing and nonaccrual troubled debt restructurings. Nonaccrual restructured loans are included in nonaccrual loans.
(8) Texas ratio is calculated as nonperforming assets divided by tangible stockholders' equity plus allowance for loan losses.
(9) New loan originations represent new loan commitments during the periods presented.
(10) Jumbo time deposits are deposits over $250 thousand.
C1 Financial, Inc.
Generally Accepted Accounting Principles (GAAP) Reconciliation and
Explanation of Non-GAAP Financial Measures
(In thousands, except per share and employee data)
Some of the financial measures included in this earnings release are not measures of financial performance recognized by GAAP. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition and results of operations computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP measures that other companies use. The following tables provide a more detailed analysis of these non-GAAP financial measures.
3Q15 2Q15 1Q15 4Q14 3Q14
---- ---- ---- ---- ----
Loan loss reserves
------------------
Allowance for loan
losses $7,932 $7,675 $5,787 $5,324 $5,441
Acquired performing
loans discount 2,830 3,047 3,242 3,532 3,811
----- ----- ----- ----- -----
Total $10,762 $10,722 $9,029 $8,856 $9,252
======= ======= ====== ====== ======
Loans receivable,
gross $1,390,275 $1,361,459 $1,256,606 $1,188,522 $1,134,351
Allowance for loan
losses to total
loans receivable 0.57% 0.56% 0.46% 0.45% 0.48%
Allowance plus
performing loans
discount to total
loans receivable 0.77% 0.79% 0.72% 0.75% 0.82%
Efficiency ratio
----------------
Noninterest expense $11,972 $11,845 $11,835 $14,005 $11,280
======= ======= ======= =======
Taxable-equivalent
net interest income $18,040 $16,811 $15,575 $14,919 $14,022
======= ======= ======= ======= =======
Noninterest income $2,114 $4,335 $1,602 $1,554 $1,797
Gains on sales of
securities - - - - -
--- --- --- --- ---
Adjusted noninterest
income $2,114 $4,335 $1,602 $1,554 $1,797
====== ====== ====== ====== ======
Efficiency ratio 59.4% 56.0% 68.9% 85.0% 71.3%
Revenue and average
assets per average
number of employees
--------------------
Interest income $20,546 $19,115 $17,769 $17,158 $16,245
Noninterest income 2,114 4,335 1,602 1,554 1,797
----- ----- ----- ----- -----
Total revenue $22,660 $23,450 $19,371 $18,712 $18,042
======= ======= ======= ======= =======
Total revenue
annualized $89,901 $94,058 $78,560 $74,238 $71,580
Total average assets $1,687,662 $1,615,468 $1,576,419 $1,552,264 $1,493,667
Average number of
employees 245 245 241 242 235
Revenue per average
number of employees $367 $384 $326 $307 $305
Average assets per
average number of
employees $6,888 $6,594 $6,541 $6,414 $6,356
Tangible
stockholders' equity
and Tangible book
value per share
---------------------
Total stockholders'
equity $199,560 $194,555 $189,812 $186,638 $185,296
Less: Goodwill (249) (249) (249) (249) (249)
Other intangible
assets (754) (824) (904) (987) (1,074)
---- ---- ---- ---- ------
Tangible
stockholders' equity $198,557 $193,482 $188,659 $185,402 $183,973
======== ======== ======== ======== ========
Common shares
outstanding 16,101 16,101 16,101 16,101 16,101
Book value per share $12.39 $12.08 $11.79 $11.59 $11.51
Tangible book value
per share 12.33 12.02 11.72 11.51 11.43
Adjusted yield earned
on loans
---------------------
Reported yield on
loans 5.87% 5.89% 5.90% 5.84% 5.79%
Effect of accretion
income on acquired
loans (0.10)% (0.10)% (0.14)% (0.19)% (0.14)%
------ ------ ------ ------ ------
Adjusted yield on
loans 5.77% 5.79% 5.76% 5.65% 5.65%
==== ==== ==== ==== ====
Adjusted rate paid on
total deposits
---------------------
Reported rate paid on
total deposits 0.46% 0.44% 0.47% 0.50% 0.52%
Effect of premium
amortization on
acquired deposits 0.00% 0.01% 0.01% 0.00% 0.01%
---- ---- ---- ---- ----
Adjusted rate paid on
total deposits 0.46% 0.45% 0.48% 0.50% 0.53%
==== ==== ==== ==== ====
Adjusted net interest
margin
---------------------
Reported net interest
margin 4.75% 4.71% 4.56% 4.24% 4.18%
Effect of accretion
income on acquired
loans (0.09)% (0.09)% (0.12)% (0.16)% (0.11)%
Effect of premium
amortization on
acquired deposits
and borrowings (0.02)% (0.02)% (0.03)% (0.03)% (0.04)%
------ ------ ------ ------ ------
Adjusted net interest
margin 4.64% 4.60% 4.41% 4.05% 4.03%
==== ==== ==== ==== ====
Average excess cash
-------------------
Average total
deposits $1,237,460 $1,185,325 $1,186,076 $1,174,001 $1,147,816
Borrowings due in one
year or less 16,136 17,750 25,189 28,940 34,753
------ ------ ------ ------ ------
Total base for
liquidity $1,253,596 $1,203,075 $1,211,265 $1,202,941 $1,182,569
========== ========== ========== ========== ==========
Minimum liquidity
level (10% of base)
(a) $125,360 $120,308 $121,127 $120,294 $118,257
Average cash and cash
equivalents (b) 159,767 168,740 204,588 271,827 262,617
------- ------- ------- ------- -------
Cash above liquidity
level (b)-(a) 34,407 48,432 83,461 151,533 144,360
Less estimated short-
term deposits (23,834) (20,823) (11,353) (24,421) (28,440)
------- ------- ------- ------- -------
Average excess cash $10,573 $27,609 $72,108 $127,112 $115,920
======= ======= ======= ======== ========
Tangible equity to
tangible assets
------------------
Total stockholders'
equity $199,560 $194,555 $189,812 $186,638 $185,296
Less: Goodwill (249) (249) (249) (249) (249)
Other intangible
assets (754) (824) (904) (987) (1,074)
---- ---- ---- ---- ------
Tangible
stockholders' equity $198,557 $193,482 $188,659 $185,402 $183,973
======== ======== ======== ======== ========
Total assets $1,712,483 $1,677,806 $1,596,739 $1,536,691 $1,548,045
Less: Goodwill (249) (249) (249) (249) (249)
Other intangible
assets (754) (824) (904) (987) (1,074)
---- ---- ---- ---- ------
Tangible assets $1,711,480 $1,676,733 $1,595,586 $1,535,455 $1,546,722
========== ========== ========== ========== ==========
Equity/Assets 11.65% 11.60% 11.89% 12.15% 11.97%
Tangible Equity/
Tangible Assets 11.60% 11.54% 11.82% 12.07% 11.89%
Definitions of Non-GAAP financial measures
Allowance for loan losses plus performing loans discount to total loans receivable adds the remaining discount on acquired performing loans to the allowance for loan losses to determine the total reserves and loan discounts established against our loans. Our management believes that this metric provides useful information for investors to analyze the overall level of reserves in banks that have completed acquisitions with no allowance carryover.
Efficiency ratio is defined as total noninterest expense divided by the sum of taxable-equivalent net interest income and noninterest income. Noninterest income is adjusted for nonrecurring gains and losses on sales of securities. This ratio is important to investors looking for a measure of efficiency in the Company's productivity measured by the amount of revenue generated for each dollar spent.
Revenue per average number of employees is annualized total interest income and total noninterest income divided by the average number of employees during the period and measures the Company's productivity by calculating the average amount of revenue generated per employee. Average assets per average number of employees is average assets divided by the average number of employees during the period and measures the average value of assets per employee.
Tangible stockholders' equity is defined as total equity reduced by goodwill and other intangible assets. Tangible book value per share is tangible stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets. We have not considered loan servicing rights as an intangible asset for purposes of this calculation.
Adjusted yield earned on loans is our yield on loans after excluding loan accretion from our acquired loan portfolio. Our management uses this metric to better assess the impact of purchase accounting on yield on loans, as the effect of loan discounts accretion is expected to decrease as the acquired loans mature or roll off of our balance sheet.
Adjusted rate paid on total deposits is our cost of deposits after excluding amortization of premiums for acquired time deposits. Our management uses this metric to better assess the impact of purchase accounting on cost of deposits, as the effect of amortization of premiums related to deposits is expected to decrease as the acquired deposits mature or roll off of our balance sheet.
Adjusted net interest margin is net interest margin after excluding loan accretion from the acquired loan portfolio and amortization of premiums for acquired time deposits and Federal Home Loan Bank advances. Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discounts accretion and amortization of premiums related to deposits or borrowings is expected to decrease as the acquired loans and deposits mature or roll off of our balance sheet.
Average excess cash represents the cash and cash equivalents in excess of our minimum liquidity level (defined as 10% of average total deposits plus borrowings due in one year or less), minus Company estimated short-term deposits. In 2015, based on an historical analysis, we changed our methodology for estimating short-term deposits, which reduced the results beginning in 1Q15.
Tangible equity to tangible assets is defined as total equity reduced by goodwill and other intangible assets, divided by total assets reduced by goodwill and other intangible assets. This measure is important to investors interested in relative changes from period-to-period in total equity and total assets, each exclusive of changes in intangible assets. We have not considered loan servicing rights as an intangible asset for purposes of this calculation.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/c1-financial-reports-2015-third-quarter-results-300160488.html
SOURCE C1 Financial, Inc.
