ENGLEWOOD CLIFFS, N.J., July 27, 2017 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq:CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported net income of $7.7 million for the second quarter of 2017 compared with $11.9 million for the first quarter of 2017 and $10.9 million earned during the second quarter of 2016. Diluted earnings per share were $0.24 for the current quarter versus $0.37 earned in the first quarter of 2017 and $0.36 earned in the second quarter of 2016.
During the quarter we recorded a $9.7 million pretax expense due to further weakness in the valuation of NYC taxi medallions, thereby reducing the carrying value of our taxi medallion loan portfolio, which is predominantly corporate medallions, to $50.9 million. Excluding expense related to taxi medallion loan valuation and net securities gains, earnings per share increased to $0.42 for the second quarter of 2017, as compared with $0.38 for the first quarter of 2017 and $0.39 for the second quarter of 2016.
Frank Sorrentino, ConnectOne’s Chairman and CEO stated, “We are exceedingly pleased with our second quarter operating performance. Loans receivable increased by $190 million from the prior quarter-end and, consistent with our emphasis on diversifying our loan mix, commercial and industrial loans grew by $69 million, representing an annualized growth rate of 50.8% for this non-CRE segment. Overall loan growth since year-end 2016 has amounted to $286 million, or 16.4% annualized. Meanwhile, core deposit growth has also exhibited strong progress. For the current quarter, our total demand deposits (including both interest and noninterest-bearing) increased by $49 million, or 16.0% on an annualized basis. Additional deposit growth is expected through enhanced cash management service capabilities, expansion of our municipal and private-school relationships, and better utilization of our modern branch model which allows our staff to focus on sales. The Company remains focused on accelerating deposit growth so that it is commensurate with strong loan growth. On a GAAP basis, return on average assets was 0.69% and return on average tangible equity was 7.80%; however, when excluding the aforementioned taxi charge, the adjusted return on average assets and return on average tangible equity was 1.20% and 13.5%, respectively, reflecting strengthening underlying core performance. Meanwhile, our net interest margin widened by 5 basis points to 3.45% and the operating efficiency ratio improved to 41.6%, from 44.0% in the first quarter of 2017 due to seasonal factors and continued operational leverage. We expect our efficiency ratio to improve further in future quarters. Augmenting our efficiency and deposit gathering capabilities, we are proud to announce our new partnerships with Zelle, the consortium of the top 30 banks in the country to provide real-time payments, and with nCino, one of the most efficient and streamlined deposit and loan operating systems in the industry, which will continue to support our best-in-class efficiency metrics.”
Mr. Sorrentino commented further, “While we are disappointed that weakness in the taxi medallion sector has negatively impacted this quarter’s results, our taxi medallion exposure is now down to 1.3% of our loan portfolio; a level where, regardless of final resolution, no negative impact is expected on our strategic plans.”
Operating Results
Fully taxable equivalent net interest income for the second quarter of 2017 was $35.8 million, an increase of $1.9 million, or 5.5%, from the first quarter of 2017, resulting from an increase in average interest-earning assets of 2.8% and the widening of the net interest margin to 3.45% from 3.40%. Included in net interest income was accretion and amortization of purchase accounting adjustments of $0.3 million and $0.6 million during the second and first quarter of 2017, respectively. Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.42% in the second quarter of 2017, widening by 9 basis-points from the first quarter 2017 adjusted net interest margin of 3.33%. The increase in the adjusted net interest margin was primarily attributable to higher yields on loans and an improved asset-mix, partially offset by lower yields on securities and an increased cost in deposit funding.
Fully taxable equivalent net interest income for the second quarter of 2017 reflected an increase of $2.7 million, or 8.2%, from the second quarter of 2016, resulting from an increase in average interest-earning assets of 6.5% and the widening of the net interest margin by 5 basis-points to 3.45% from 3.40%. Included in net interest income was accretion and amortization of purchase accounting adjustments of $0.3 million and $1.2 million during the second quarter of 2017 and second quarter of 2016, respectively. Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.42% in the second quarter of 2017, widening by 14 basis-points from the second quarter of 2016 adjusted net interest margin of 3.28%. The increase in the adjusted net interest margin was primarily attributable to higher yields on loans and an improved asset-mix, partially offset by lower yields on securities and an increased cost in deposit funding.
Noninterest income totaled $1.4 million in the second quarter of 2017, $3.0 million in the first quarter of 2017 and $1.6 million in the second quarter of 2016. There were no net securities gains/(losses) during the second quarter of 2017. The first quarter of 2017 and the second quarter of 2016 included net securities gains of $1.6 million and $0.1 million, respectively. Excluding the securities gains, noninterest income remained flat when compared to the sequential quarter and the prior year second quarter. Noninterest income also includes bank owned life insurance and deposit, loan and other income.
Noninterest expenses totaled $25.3 million for the second quarter of 2017, up $7.1 million from $18.2 million for the first quarter of 2017 and up $10.9 million from $14.4 million for the second quarter of 2016. The increase from the sequential quarter was mainly attributable to an increase in the taxi medallion loans held-for-sale valuation allowance, which was $9.7 million in the current quarter and $2.6 million in the first quarter of 2017. In addition, decreases in occupancy and equipment expenses ($0.3 million) and other expenses ($0.2 million), partially offset by increases in salaries and employee benefits ($0.4 million), contributed to the overall increase in noninterest expenses from the first quarter of 2017. The increase from the prior year second quarter was mainly attributable to the valuation allowance of which there was none in the prior year’s period. In addition, increases in salaries and employee benefits ($0.9 million), FDIC insurance premiums ($0.2 million), data processing ($0.1 million), and other expense ($0.1 million), partially offset by a decrease in occupancy and equipment expenses ($0.2 million), contributed to the overall increase in noninterest expense from the second quarter of 2016. The increases over the prior year second quarter were the result of increased levels of business and staff resulting from organic growth.
Income tax expense was $2.1 million for the second quarter of 2017, compared to $4.9 million for the first quarter of 2017 and $5.0 million for the second quarter of 2016. Included in income tax expense for the second and first quarter of 2017 is a benefit of $47 thousand and $133 thousand, respectively, which resulted from the effect of implementing ASU 2016-09, which relates to the recognition of excess tax benefits in the income statement (formerly through equity) that result from employee share-based payment awards. The effective tax rate for the current quarter was 21.4% versus 31.5% for the prior-year quarter. Excluding any changes to the taxi medallion valuation allowance, the effective tax rate for 2017 is expected to be maintained in the low 30% range.
Asset Quality
The provision for loan losses increased to $1.5 million in the second quarter of 2017 from $1.1 million in the first quarter of 2017, and decreased from $3.8 million in the second quarter of 2016. The increase from the sequential quarter was largely attributable to higher loan growth. The decrease from the prior year quarter was largely attributable to decreases in specific reserves.
As of June 30, 2017, loans held-for-sale included loans secured by NYC taxi medallions, predominantly corporate medallions, totaling $50.9 million (net of a $12.3 million valuation allowance), compared to $65.6 million (with no valuation allowance) as of December 31, 2016. The decrease was primarily attributable to the aforementioned taxi medallion valuation allowance and a payoff of two corporate medallions for $1.1 million. The increase of the valuation allowance to $12.3 million compared to year-end 2016 was the result of reduced medallion lease revenues, lower transfer valuations as reported by the New York City Taxi and Limousine Commission, and uncertainty surrounding institutional investor interest in the NYC taxi business. The valuation allowance is based on a per medallion value of approximately $374,000 as of June 30, 2017, down from $450,000 as of March 31, 2017. The carrying value of taxi medallion loans at June 30, 2017 ($50.9 million) represents just 1.33% of total loans and 1.09% of total assets. Taxi medallion loans are on non-accrual status but are currently cash flowing in excess of $3 million on an annualized basis.
Nonperforming assets, which includes nonaccrual loans and other real estate owned, were $63.5 million at June 30, 2017, $69.4 million at December 31, 2016 and $23.9 million at June 30, 2016. Included in nonperforming assets were taxi medallion loans, totaling $48.9 million at June 30, 2017, $63.0 million at December 31, 2016 and $3.9 million at June 30, 2016. Nonperforming assets as a percentage of total assets were 1.36% at June 30, 2017, 1.57% at December 31, 2016, and 0.56% at June 30, 2016. Excluding the taxi medallion loans, nonaccrual loans increased to $14.1 million at June 30, 2017, from $5.7 million at December 31, 2016 and decreased from $18.0 million at June 30, 2016. Nonaccrual loans as a percentage of loans receivable, excluding taxi medallion loans, were 0.37% at June 30, 2017, 0.16% at December 31, 2016 and 0.55% at June 30, 2016.
Annualized net charge-offs were (0.01)% (a net recovery) for the first and second quarters of 2017 and 0.01% for the second quarter of 2016. The allowance for loan losses represented 0.76%, 0.74%, and 0.97% of loans receivable as of June 30, 2017, December 31, 2016 and June 30, 2016, respectively. The allowance for loan losses as a percentage of nonaccruals, excluding taxi medallion loans, was 202.1% as of June 30, 2017, 449.0% as of December 31, 2016 and 138.8% as of June 30, 2016.
Selected Balance Sheet Items
At June 30, 2017, the Company’s total assets were $4.7 billion, an increase of $255 million from December 31, 2016. Total loans (including loans held-for-sale) at June 30, 2017 were $3.8 billion, reflecting net loan growth (loan originations less pay-downs and pay-offs) of $259 million from December 31, 2016, primarily attributable to increases in multifamily ($202 million), other commercial real estate ($65 million), commercial and industrial ($56 million) and residential real estate ($19 million), offset by decreases in construction ($55 million) and loans held-for-sale ($27 million).
The Company’s stockholders’ equity was $546 million at June 30, 2017, an increase of $15.1 million from December 31, 2016. The increase in stockholders’ equity was primarily attributable to an increase of $14.7 million in retained earnings and approximately $1.0 million of equity issuance related to stock-based compensation, partially offset by an increase to accumulated other comprehensive loss of $0.4 million. As of June 30, 2017, the Company’s tangible common equity ratio and tangible book value per share were 8.77% and $12.42, respectively. As of December 31, 2016, the tangible common equity ratio and tangible book value per share were 8.93% and $11.96, respectively. Total goodwill and other intangible assets were approximately $149 million as of both June 30, 2017 and December 31, 2016.
Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP/adjusted financial measures including an adjusted net income available to common shareholders. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Reconciliations of non-GAAP/adjusted financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the accompanying tables.
Second Quarter 2017 Conference Call
Management will host a conference call and audio webcast at 10:00 a.m. ET on July 27, 2017 to review the Company's financial performance and operating results. The conference call dial-in number is 719-325-2353, access code 2896145. Please dial in at least five minutes before the start of the call to register. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the Company’s website ir.ConnectOneBank.com.
A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, July 27, 2017 and ending on Wednesday, August 2, 2017 by dialing 719-457-0820, access code 2896145. An online archive of the webcast will be available following the completion of the conference call at ir.ConnectOneBank.com.
About ConnectOne Bancorp, Inc.
ConnectOne is a New Jersey corporation and a registered bank holding company pursuant to the Bank Holding Company Act of 1956, as amended, and serves as the holding company for ConnectOne Bank ("the Bank"). The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005. The Bank operates from its headquarters located at 301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey, and through its 20 other banking offices.
For more information visit https://www.ConnectOneBank.com/.
Forward-Looking Statements
This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those factors set forth in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION | |||||||||||
| (dollars in thousands) | |||||||||||
| June 30, | December 31, | June 30, | |||||||||
| 2017 | 2016 | 2016 | |||||||||
| (unaudited) | (unaudited) | ||||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 54,305 | $ | 37,150 | $ | 35,850 | |||||
| Interest-bearing deposits with banks | 92,203 | 163,249 | 139,263 | ||||||||
| Cash and cash equivalents | 146,508 | 200,399 | 175,113 | ||||||||
| Investment securities: | |||||||||||
| Available-for-sale | 402,130 | 353,290 | 208,266 | ||||||||
| Held-to-maturity (fair value of $-0-, $-0-, $227,427) | - | - | 214,718 | ||||||||
| Loans held-for-sale (net of $12,325, $-0-, $-0- valuation allowance) | 51,124 | 78,005 | 360 | ||||||||
| Loans receivable | 3,761,572 | 3,475,832 | 3,375,620 | ||||||||
| Less: Allowance for loan losses | 28,401 | 25,744 | 32,763 | ||||||||
| Net loans receivable | 3,733,171 | 3,450,088 | 3,342,857 | ||||||||
| Investment in restricted stock, at cost | 32,152 | 24,310 | 25,210 | ||||||||
| Bank premises and equipment, net | 21,630 | 22,075 | 22,477 | ||||||||
| Accrued interest receivable | 13,194 | 12,965 | 12,726 | ||||||||
| Bank owned life insurance | 99,777 | 98,359 | 80,028 | ||||||||
| Other real estate owned | 580 | 626 | 2,029 | ||||||||
| Goodwill | 145,909 | 145,909 | 145,909 | ||||||||
| Core deposit intangibles | 2,702 | 3,088 | 3,474 | ||||||||
| Other assets | 32,403 | 37,234 | 29,747 | ||||||||
| Total assets | $ | 4,681,280 | $ | 4,426,348 | $ | 4,262,914 | |||||
| LIABILITIES | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing | $ | 695,522 | $ | 694,977 | $ | 648,664 | |||||
| Interest-bearing | 2,734,851 | 2,649,294 | 2,552,329 | ||||||||
| Total deposits | 3,430,373 | 3,344,271 | 3,200,993 | ||||||||
| Borrowings | 626,173 | 476,280 | 496,414 | ||||||||
| Subordinated debentures (net of $539, $621, $714 in debt issuance costs) | 54,616 | 54,534 | 54,441 | ||||||||
| Other liabilities | 23,945 | 20,231 | 26,652 | ||||||||
| Total liabilities | 4,135,107 | 3,895,316 | 3,778,500 | ||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||
| STOCKHOLDERS' EQUITY | |||||||||||
| Common stock | 412,546 | 412,726 | 374,287 | ||||||||
| Additional paid-in capital | 12,377 | 11,407 | 9,864 | ||||||||
| Retained earnings | 141,178 | 126,462 | 121,301 | ||||||||
| Treasury stock | (16,717 | ) | (16,717 | ) | (16,717 | ) | |||||
| Accumulated other comprehensive loss | (3,211 | ) | (2,846 | ) | (4,321 | ) | |||||
| Total stockholders' equity | 546,173 | 531,032 | 484,414 | ||||||||
| Total liabilities and stockholders' equity | $ | 4,681,280 | $ | 4,426,348 | $ | 4,262,914 | |||||
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| (dollars in thousands, except for per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| 06/30/17 | 06/30/16 | 06/30/17 | 06/30/16 | ||||||||||||
| Interest income | |||||||||||||||
| Interest and fees on loans | $ | 40,632 | $ | 36,561 | $ | 78,638 | $ | 71,578 | |||||||
| Interest and dividends on investment securities: | |||||||||||||||
| Taxable | 1,799 | 1,965 | 3,347 | 4,105 | |||||||||||
| Tax-exempt | 831 | 996 | 1,785 | 1,879 | |||||||||||
| Dividends | 290 | 370 | 620 | 722 | |||||||||||
| Interest on federal funds sold and other short-term investments | 139 | 146 | 385 | 280 | |||||||||||
| Total interest income | 43,691 | 40,038 | 84,775 | 78,564 | |||||||||||
| Interest expense | |||||||||||||||
| Deposits | 5,495 | 4,434 | 10,604 | 8,373 | |||||||||||
| Borrowings | 3,095 | 3,210 | 5,929 | 6,477 | |||||||||||
| Total interest expense | 8,590 | 7,644 | 16,533 | 14,850 | |||||||||||
| Net interest income | 35,101 | 32,394 | 68,242 | 63,714 | |||||||||||
| Provision for loan losses | 1,450 | 3,750 | 2,550 | 6,750 | |||||||||||
| Net interest income after provision for loan losses | 33,651 | 28,644 | 65,692 | 56,964 | |||||||||||
| Noninterest income | |||||||||||||||
| Annuities and insurance commissions | - | 32 | 39 | 72 | |||||||||||
| Income on bank owned life insurance | 714 | 616 | 1,417 | 1,228 | |||||||||||
| Net gains on sale of loans held-for-sale | 49 | 56 | 70 | 92 | |||||||||||
| Deposit, loan and other income | 659 | 763 | 1,302 | 1,277 | |||||||||||
| Net gains on sale of investment securities | - | 103 | 1,596 | 103 | |||||||||||
| Total noninterest income | 1,422 | 1,570 | 4,424 | 2,772 | |||||||||||
| Noninterest expenses | |||||||||||||||
| Salaries and employee benefits | 8,632 | 7,753 | 16,838 | 15,353 | |||||||||||
| Occupancy and equipment | 1,991 | 2,154 | 4,246 | 4,401 | |||||||||||
| FDIC insurance | 815 | 615 | 1,710 | 1,210 | |||||||||||
| Professional and consulting | 734 | 700 | 1,452 | 1,412 | |||||||||||
| Marketing and advertising | 289 | 250 | 545 | 523 | |||||||||||
| Data processing | 1,149 | 1,010 | 2,298 | 2,033 | |||||||||||
| Amortization of core deposit intangible | 193 | 217 | 386 | 434 | |||||||||||
| Increase in valuation allowance, loans held-for-sale | 9,725 | - | 12,325 | - | |||||||||||
| Other expenses | 1,775 | 1,653 | 3,752 | 3,339 | |||||||||||
| Total noninterest expenses | 25,303 | 14,352 | 43,552 | 28,705 | |||||||||||
| Income before income tax expense | 9,770 | 15,862 | 26,564 | 31,031 | |||||||||||
| Income tax expense | 2,087 | 5,003 | 7,001 | 9,781 | |||||||||||
| Net income | 7,683 | 10,859 | 19,563 | 21,250 | |||||||||||
| Less: Preferred stock dividends | - | - | - | 22 | |||||||||||
| Net income available to common stockholders | $ | 7,683 | $ | 10,859 | $ | 19,563 | $ | 21,228 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic | $ | 0.24 | $ | 0.36 | $ | 0.61 | $ | 0.71 | |||||||
| Diluted | 0.24 | 0.36 | 0.60 | 0.70 | |||||||||||
| Dividends per common share | $ | 0.075 | $ | 0.075 | $ | 0.150 | $ | 0.150 | |||||||
ConnectOne's management believes that the supplemental financial information, including non-GAAP measures, provided below is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies.
| CONNECTONE BANCORP, INC. | ||||||||||||||||||||
| SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
| (dollars in thousands, except share data) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||
| Total assets | $ | 4,681,280 | $ | 4,460,816 | $ | 4,426,348 | $ | 4,327,804 | $ | 4,262,914 | ||||||||||
| Loans receivable: | ||||||||||||||||||||
| Commercial | 610,442 | 541,690 | 554,065 | 644,430 | 630,425 | |||||||||||||||
| Commercial real estate-other | 1,218,995 | 1,192,074 | 1,154,154 | 1,139,641 | 1,104,214 | |||||||||||||||
| Commercial real estate-multifamily | 1,251,962 | 1,134,760 | 1,050,067 | 961,163 | 967,555 | |||||||||||||||
| Commercial construction | 431,049 | 460,611 | 486,228 | 471,109 | 443,277 | |||||||||||||||
| Residential | 251,108 | 242,883 | 232,547 | 229,401 | 230,497 | |||||||||||||||
| Consumer | 2,005 | 2,811 | 2,380 | 2,879 | 1,976 | |||||||||||||||
| Gross loans | 3,765,561 | 3,574,829 | 3,479,441 | 3,448,623 | 3,377,944 | |||||||||||||||
| Unearned net origination fees | (3,989 | ) | (3,166 | ) | (3,609 | ) | (3,147 | ) | (2,324 | ) | ||||||||||
| Loans receivable | 3,761,572 | 3,571,663 | 3,475,832 | 3,445,476 | 3,375,620 | |||||||||||||||
| Loans held-for-sale (net of valuation allowance) | 51,124 | 62,255 | 78,005 | 15,112 | 360 | |||||||||||||||
| Total loans | 3,812,696 | 3,633,918 | 3,553,837 | 3,460,588 | 3,375,980 | |||||||||||||||
| Securities available-for-sale | 402,130 | 352,476 | 353,290 | 338,459 | 208,266 | |||||||||||||||
| Securities held-to-maturity | - | - | - | - | 214,718 | |||||||||||||||
| Goodwill and other intangible assets | 148,611 | 148,804 | 148,997 | 149,190 | 149,383 | |||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | 695,522 | 671,183 | 694,977 | 655,683 | 648,664 | |||||||||||||||
| Interest-bearing demand | 572,438 | 547,934 | 563,740 | 531,500 | 523,742 | |||||||||||||||
| Savings | 189,862 | 188,790 | 205,551 | 207,717 | 210,040 | |||||||||||||||
| Money market | 990,223 | 977,357 | 911,867 | 866,710 | 866,643 | |||||||||||||||
| Time deposits | 982,328 | 970,213 | 968,136 | 1,007,339 | 951,904 | |||||||||||||||
| Total deposits | 3,430,373 | 3,355,477 | 3,344,271 | 3,268,949 | 3,200,993 | |||||||||||||||
| Borrowings | 626,173 | 491,226 | 476,280 | 481,337 | 496,414 | |||||||||||||||
| Subordinated debentures (net of issuance costs) | 54,616 | 54,575 | 54,534 | 54,490 | 54,441 | |||||||||||||||
| Total stockholders' equity | 546,173 | 540,277 | 531,032 | 499,588 | 484,414 | |||||||||||||||
| Quarterly Average Balances | ||||||||||||||||||||
| Total assets | $ | 4,495,573 | $ | 4,382,314 | $ | 4,349,961 | $ | 4,344,796 | $ | 4,212,307 | ||||||||||
| Loans receivable: | ||||||||||||||||||||
| Commercial | 603,733 | 557,347 | 644,263 | 632,892 | 626,902 | |||||||||||||||
| Commercial real estate (including multifamily) | 2,337,499 | 2,222,795 | 2,130,955 | 2,081,741 | 2,056,263 | |||||||||||||||
| Commercial construction | 451,038 | 466,455 | 479,342 | 462,399 | 418,769 | |||||||||||||||
| Residential | 246,864 | 237,418 | 229,738 | 229,953 | 231,553 | |||||||||||||||
| Consumer | 2,929 | 2,460 | 2,777 | 2,771 | 2,865 | |||||||||||||||
| Gross loans | 3,642,063 | 3,486,475 | 3,487,075 | 3,409,756 | 3,336,352 | |||||||||||||||
| Unearned net origination fees | (3,967 | ) | (3,304 | ) | (3,151 | ) | (2,956 | ) | (2,295 | ) | ||||||||||
| Loans receivable | 3,638,096 | 3,483,171 | 3,483,924 | 3,406,800 | 3,334,057 | |||||||||||||||
| Loans held-for-sale | 61,259 | 65,860 | 4,549 | 478 | 395 | |||||||||||||||
| Total loans | 3,699,355 | 3,549,031 | 3,488,473 | 3,407,278 | 3,334,452 | |||||||||||||||
| Securities available-for-sale | 391,965 | 367,940 | 351,809 | 269,895 | 202,103 | |||||||||||||||
| Securities held-to-maturity | - | - | - | 143,146 | 218,220 | |||||||||||||||
| Goodwill and other intangible assets | 148,737 | 148,930 | 149,123 | 149,317 | 149,525 | |||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing demand | 667,461 | 655,597 | 666,913 | 640,323 | 581,743 | |||||||||||||||
| Interest-bearing demand | 582,196 | 549,335 | 534,127 | 553,401 | 528,954 | |||||||||||||||
| Savings | 186,033 | 199,000 | 205,477 | 211,162 | 215,267 | |||||||||||||||
| Money market | 944,646 | 958,656 | 891,764 | 872,937 | 791,845 | |||||||||||||||
| Time deposits | 976,012 | 963,976 | 985,944 | 1,007,530 | 889,561 | |||||||||||||||
| Total deposits | 3,356,348 | 3,326,564 | 3,284,225 | 3,285,353 | 3,007,370 | |||||||||||||||
| Borrowings | 514,161 | 442,595 | 476,925 | 488,015 | 639,054 | |||||||||||||||
| Subordinated debentures | 55,155 | 55,155 | 55,155 | 55,155 | 55,155 | |||||||||||||||
| Total stockholders' equity | 549,748 | 539,544 | 511,663 | 495,141 | 483,519 | |||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Net interest income | $ | 35,101 | $ | 33,141 | $ | 33,407 | $ | 33,024 | $ | 32,394 | ||||||||||
| Provision for loan losses | 1,450 | 1,100 | 25,200 | 6,750 | 3,750 | |||||||||||||||
| Net interest income after provision for loan losses | 33,651 | 32,041 | 8,207 | 26,274 | 28,644 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||
| Annuity and insurance commissions | - | 39 | 51 | 68 | 32 | |||||||||||||||
| Income on bank owned life insurance | 714 | 703 | 715 | 615 | 616 | |||||||||||||||
| Net gains on sale of loans held-for-sale | 49 | 21 | 86 | 56 | 56 | |||||||||||||||
| Deposit, loan and other income | 659 | 643 | 721 | 706 | 763 | |||||||||||||||
| Net gains on sale of investment securities | - | 1,596 | - | 4,131 | 103 | |||||||||||||||
| Total noninterest income | 1,422 | 3,002 | 1,573 | 5,576 | 1,570 | |||||||||||||||
| Noninterest expenses | ||||||||||||||||||||
| Salaries and employee benefits | 8,632 | 8,206 | 7,888 | 7,791 | 7,753 | |||||||||||||||
| Occupancy and equipment | 1,991 | 2,255 | 2,122 | 2,049 | 2,154 | |||||||||||||||
| FDIC insurance | 815 | 895 | 985 | 745 | 615 | |||||||||||||||
| Professional and consulting | 734 | 718 | 901 | 667 | 700 | |||||||||||||||
| Marketing and advertising | 289 | 256 | 222 | 293 | 250 | |||||||||||||||
| Data processing | 1,149 | 1,149 | 1,106 | 1,002 | 1,010 | |||||||||||||||
| Amortization of core deposit intangible | 193 | 193 | 193 | 193 | 217 | |||||||||||||||
| Increase in valuation allowance, loans held-for-sale | 9,725 | 2,600 | - | - | - | |||||||||||||||
| Other expenses | 1,775 | 1,977 | 1,835 | 1,811 | 1,653 | |||||||||||||||
| Total noninterest expenses | 25,303 | 18,249 | 15,252 | 14,551 | 14,352 | |||||||||||||||
| Income (loss) before income tax expense | 9,770 | 16,794 | (5,472 | ) | 17,299 | 15,862 | ||||||||||||||
| Income tax expense (benefit) | 2,087 | 4,914 | (3,448 | ) | 5,443 | 5,003 | ||||||||||||||
| Net income (loss) available to common stockholders | $ | 7,683 | $ | 11,880 | $ | (2,024 | ) | $ | 11,856 | $ | 10,859 | |||||||||
| Reconciliation of GAAP Earnings to Earnings excluding Net Securities Gains and Expenses Related to the Taxi Medallion Portfolio | ||||||||||||||||||||
| Net income (loss) available to common stockholders | $ | 7,683 | $ | 11,880 | $ | (2,024 | ) | $ | 11,856 | $ | 10,859 | |||||||||
| Net gains on sales of securities (after taxes) | - | (1,093 | ) | - | (2,643 | ) | (66 | ) | ||||||||||||
| Provision related to taxi medallion loans (after taxes) | - | - | 14,196 | 2,958 | 1,035 | |||||||||||||||
| Increase in valuation allowance, loans held-for-sale (after taxes) | 5,719 | 1,538 | - | - | - | |||||||||||||||
| Net income available to common stockholders-adjusted | $ | 13,402 | $ | 12,325 | $ | 12,172 | $ | 12,171 | $ | 11,828 | ||||||||||
| Weighted average diluted shares outstanding | 32,255,770 | 32,192,643 | 30,729,359 | 30,401,684 | 30,340,376 | |||||||||||||||
| Diluted EPS (GAAP) | $ | 0.24 | $ | 0.37 | $ | (0.07 | ) | $ | 0.39 | $ | 0.36 | |||||||||
| Diluted EPS-adjusted (Non-GAAP) (1) | 0.42 | 0.38 | 0.40 | 0.40 | 0.39 | |||||||||||||||
| Return on Assets Measures | ||||||||||||||||||||
| Net income available to common stockholders-adjusted | $ | 13,402 | $ | 12,325 | $ | 12,172 | $ | 12,171 | $ | 11,828 | ||||||||||
| Average assets | $ | 4,495,573 | $ | 4,382,314 | $ | 4,349,961 | $ | 4,344,796 | $ | 4,212,307 | ||||||||||
| Less: average intangible assets | (148,737 | ) | (148,930 | ) | (149,123 | ) | (149,317 | ) | (149,525 | ) | ||||||||||
| Average tangible assets | $ | 4,346,836 | $ | 4,233,384 | $ | 4,200,838 | $ | 4,195,479 | $ | 4,062,782 | ||||||||||
| Return on avg. assets (GAAP) | 0.69 | % | 1.10 | % | -0.19 | % | 1.09 | % | 1.04 | % | ||||||||||
| Return on avg. assets-adjusted (non-GAAP) (2) | 1.20 | % | 1.14 | % | 1.11 | % | 1.11 | % | 1.13 | % | ||||||||||
| Return on avg. tangible assets (non-GAAP) (3) | 0.72 | % | 1.15 | % | -0.18 | % | 1.14 | % | 1.09 | % | ||||||||||
| Return on avg. tangible assets-adjusted (non-GAAP) (4) | 1.25 | % | 1.19 | % | 1.16 | % | 1.16 | % | 1.18 | % | ||||||||||
| _____ | ||||||||||||||||||||
| (1) Represents adjusted earnings available to common stockholders divided by weighted average diluted shares outstanding. | ||||||||||||||||||||
| (2) Adjusted net income divided by average assets. | ||||||||||||||||||||
| (3) Net income excluding amortization of intangible assets divided by average tangible assets. | ||||||||||||||||||||
| (4) Adjusted net income excluding amortization of intangible assets divided by average tangible assets. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Return on Equity Measures | ||||||||||||||||||||
| Net income available to common stockholders-adjusted | $ | 13,402 | $ | 12,325 | $ | 12,172 | $ | 12,171 | $ | 11,828 | ||||||||||
| Average common equity | $ | 549,748 | $ | 539,544 | $ | 511,663 | $ | 495,141 | $ | 483,519 | ||||||||||
| Less: average intangible assets | (148,737 | ) | (148,930 | ) | (149,123 | ) | (149,317 | ) | (149,525 | ) | ||||||||||
| Average tangible common equity | $ | 401,011 | $ | 390,614 | $ | 362,540 | $ | 345,824 | $ | 333,994 | ||||||||||
| Return on avg. common equity (GAAP) | 5.61 | % | 8.93 | % | -1.57 | % | 9.53 | % | 9.03 | % | ||||||||||
| Return on avg. common equity-adjusted (non-GAAP) (5) | 9.78 | % | 9.26 | % | 9.46 | % | 9.78 | % | 9.84 | % | ||||||||||
| Return on avg. tangible common equity (non-GAAP) (6) | 7.80 | % | 12.45 | % | -2.10 | % | 13.77 | % | 13.23 | % | ||||||||||
| Return on avg. tangible common equity-adjusted (non-GAAP) (7) | 13.52 | % | 12.91 | % | 13.48 | % | 14.13 | % | 14.24 | % | ||||||||||
| Efficiency Measures | ||||||||||||||||||||
| Total noninterest expenses | $ | 25,303 | $ | 18,249 | $ | 15,252 | $ | 14,551 | $ | 14,352 | ||||||||||
| Increase in valuation allowance, loans held-for-sale | (9,725 | ) | (2,600 | ) | - | - | - | |||||||||||||
| Foreclosed property expense | (71 | ) | (100 | ) | (81 | ) | (37 | ) | 10 | |||||||||||
| Operating noninterest expense | $ | 15,507 | $ | 15,549 | $ | 15,171 | $ | 14,514 | $ | 14,362 | ||||||||||
| Net interest income (tax equivalent basis) | $ | 35,839 | $ | 33,956 | $ | 34,120 | $ | 33,762 | $ | 33,112 | ||||||||||
| Noninterest income | 1,422 | 3,002 | 1,573 | 5,576 | 1,570 | |||||||||||||||
| Net gains on sales of investment securities | - | (1,596 | ) | - | (4,131 | ) | (103 | ) | ||||||||||||
| Operating revenue | $ | 37,261 | $ | 35,362 | $ | 35,693 | $ | 35,207 | $ | 34,579 | ||||||||||
| Operating efficiency ratio (non-GAAP) (8) | 41.6 | % | 44.0 | % | 42.5 | % | 41.2 | % | 41.5 | % | ||||||||||
| Net Interest Margin | ||||||||||||||||||||
| Average interest-earning assets | $ | 4,168,344 | $ | 4,053,324 | $ | 4,038,030 | $ | 4,041,020 | $ | 3,912,802 | ||||||||||
| Net interest income (tax equivalent basis) | $ | 35,839 | $ | 33,956 | $ | 34,120 | $ | 33,762 | $ | 33,112 | ||||||||||
| Impact of purchase accounting fair value marks | (316 | ) | (649 | ) | (960 | ) | (1,045 | ) | (1,245 | ) | ||||||||||
| Adjusted net interest income | $ | 35,523 | $ | 33,307 | $ | 33,160 | $ | 32,717 | $ | 31,867 | ||||||||||
| Net interest margin (GAAP) | 3.45 | % | 3.40 | % | 3.36 | % | 3.32 | % | 3.40 | % | ||||||||||
| Adjusted net interest margin (non-GAAP) (9) | 3.42 | % | 3.33 | % | 3.27 | % | 3.22 | % | 3.28 | % | ||||||||||
| _____ | ||||||||||||||||||||
| (5) Adjusted earnings available to common stockholders divided by average common equity. | ||||||||||||||||||||
| (6) Earnings available to common stockholders excluding amortization of intangibles assets divided by average tangible common equity. | ||||||||||||||||||||
| (7) Adjusted earnings available to common stockholders divided by average tangible common equity. | ||||||||||||||||||||
| (8) Operating noninterest expense divided by operating revenue. | ||||||||||||||||||||
| (9) Adjusted net interest income excluding amortization of intangibles assets divided by average interest-earning assets. | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| (dollars in thousands, except share data) | 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||||||
| Capital Ratios and Book Value per Share | ||||||||||||||||||||
| Common equity | $ | 546,173 | $ | 540,277 | $ | 531,032 | $ | 499,588 | $ | 484,414 | ||||||||||
| Less: intangible assets | (148,611 | ) | (148,804 | ) | (148,997 | ) | (149,190 | ) | (149,383 | ) | ||||||||||
| Tangible common equity | $ | 397,562 | $ | 391,473 | $ | 382,035 | $ | 350,398 | $ | 335,031 | ||||||||||
| Total assets | $ | 4,681,280 | $ | 4,460,816 | $ | 4,426,348 | $ | 4,327,804 | $ | 4,262,914 | ||||||||||
| Less: intangible assets | (148,611 | ) | (148,804 | ) | (148,997 | ) | (149,190 | ) | (149,383 | ) | ||||||||||
| Tangible assets | $ | 4,532,669 | $ | 4,312,012 | $ | 4,277,351 | $ | 4,178,614 | $ | 4,113,531 | ||||||||||
| Common shares outstanding | 32,015,317 | 32,004,471 | 31,944,403 | 30,197,318 | 30,197,318 | |||||||||||||||
| Common equity ratio (GAAP) | 11.67 | % | 12.11 | % | 12.00 | % | 11.54 | % | 11.36 | % | ||||||||||
| Tangible common equity ratio (non-GAAP) (10) | 8.77 | % | 9.08 | % | 8.93 | % | 8.39 | % | 8.14 | % | ||||||||||
| Regulatory capital ratios (Bancorp): | ||||||||||||||||||||
| Leverage ratio | 9.33 | % | 9.44 | % | 9.29 | % | 8.49 | % | 8.52 | % | ||||||||||
| Common equity Tier 1 risk-based ratio | 9.48 | % | 9.79 | % | 9.74 | % | 9.25 | % | 9.10 | % | ||||||||||
| Risk-based Tier 1 capital ratio | 9.60 | % | 9.92 | % | 9.87 | % | 9.38 | % | 9.23 | % | ||||||||||
| Risk-based total capital ratio | 11.46 | % | 11.83 | % | 11.78 | % | 11.69 | % | 11.44 | % | ||||||||||
| Regulatory capital ratios (Bank): | ||||||||||||||||||||
| Leverage ratio | 10.34 | % | 10.50 | % | 10.34 | % | 9.57 | % | 9.62 | % | ||||||||||
| Common equity Tier 1 risk-based ratio | 10.64 | % | 11.03 | % | 10.98 | % | 10.58 | % | 10.43 | % | ||||||||||
| Risk-based Tier 1 capital ratio | 10.64 | % | 11.03 | % | 10.98 | % | 10.58 | % | 10.43 | % | ||||||||||
| Risk-based total capital ratio | 11.32 | % | 11.70 | % | 11.63 | % | 11.57 | % | 11.30 | % | ||||||||||
| Book value per share (GAAP) | $ | 17.06 | $ | 16.88 | $ | 16.62 | $ | 16.54 | $ | 16.04 | ||||||||||
| Tangible book value per share (non-GAAP) (11) | 12.42 | 12.23 | 11.96 | 11.60 | 11.09 | |||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
| Net Charge-Off Detail | ||||||||||||||||||||
| Net loan charge-offs: | ||||||||||||||||||||
| Charge-offs | $ | 10 | $ | 72 | $ | 37,074 | $ | 1,910 | $ | 77 | ||||||||||
| Recoveries | (60 | ) | (129 | ) | (2 | ) | (12 | ) | (16 | ) | ||||||||||
| Net loan charge-offs | $ | (50 | ) | $ | (57 | ) | $ | 37,072 | $ | 1,898 | $ | 61 | ||||||||
| as a % of average total loans (annualized) | -0.01 | % | -0.01 | % | 4.23 | % | 0.22 | % | 0.01 | % | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Nonaccrual taxi medallion loans | $ | 48,884 | $ | 59,054 | $ | 63,044 | $ | 3,637 | $ | 3,882 | ||||||||||
| Nonaccrual loans, excluding taxi medallion loans | 14,055 | 12,790 | 5,734 | 7,856 | 18,029 | |||||||||||||||
| Other real estate owned | 580 | 580 | 626 | 626 | 2,029 | |||||||||||||||
| Total nonperforming assets | $ | 63,519 | $ | 72,424 | $ | 69,404 | $ | 12,119 | $ | 23,940 | ||||||||||
| Performing troubled debt restructurings | $ | 10,221 | $ | 10,005 | $ | 13,338 | $ | 105,338 | $ | 97,831 | ||||||||||
| Allowance for loan losses ("ALLL") | $ | 28,401 | $ | 26,901 | $ | 25,744 | $ | 37,615 | $ | 32,763 | ||||||||||
| ALLL, net of taxi specific reserves | 28,401 | 26,901 | 25,744 | 25,081 | 25,026 | |||||||||||||||
| Nonaccrual loans as a % of loans receivable, excluding taxi medallion loans | 0.37 | % | 0.36 | % | 0.16 | % | 0.24 | % | 0.55 | % | ||||||||||
| Nonperforming assets as a % of total assets | 1.36 | % | 1.62 | % | 1.57 | % | 0.28 | % | 0.56 | % | ||||||||||
| ALLL as a % of loans receivable | 0.76 | % | 0.75 | % | 0.74 | % | 1.09 | % | 0.97 | % | ||||||||||
| ALLL as a % of nonaccrual loans | 45.1 | % | 37.4 | % | 37.4 | % | 327.3 | % | 149.5 | % | ||||||||||
| ALLL (excluding taxi medallion specific reserves) as a % of nonaccrual loans (excluding taxi medallion loans) | 202.1 | % | 210.3 | % | 449.0 | % | 319.3 | % | 138.8 | % | ||||||||||
| ALLL (excluding taxi medallion specific reserves) as a % of loans receivable (excluding taxi medallion loans) | 0.76 | % | 0.75 | % | 0.74 | % | 0.75 | % | 0.76 | % | ||||||||||
| _____ | ||||||||||||||||||||
| (10) Tangible common equity divided by tangible assets. | ||||||||||||||||||||
| (11) Tangible common equity divided by common shares outstanding at period-end. | ||||||||||||||||||||
| CONNECTONE BANCORP, INC. | |||||||||||||||||||||||||||||||
| NET INTEREST MARGIN ANALYSIS | |||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||
| June 30, 2017 | March 31, 2017 | June 30, 2016 | |||||||||||||||||||||||||||||
| Average | Average | Average | |||||||||||||||||||||||||||||
| Interest-earning assets: | Balance | Interest | Rate (8) | Balance | Interest | Rate (8) | Balance | Interest | Rate (8) | ||||||||||||||||||||||
| Investment securities (1) (2) | $ | 390,462 | $ | 3,079 | 3.16 | % | $ | 366,473 | $ | 3,015 | 3.34 | % | $ | 418,270 | $ | 3,497 | 3.36 | % | |||||||||||||
| Loans receivable and loans held-for-sale (2) (3) (4) | 3,699,355 | 40,921 | 4.44 | 3,549,031 | 38,308 | 4.38 | 3,334,057 | 36,743 | 4.43 | ||||||||||||||||||||||
| Federal funds sold and interest- | |||||||||||||||||||||||||||||||
| bearing deposits with banks | 52,099 | 139 | 1.07 | 115,025 | 246 | 0.87 | 128,994 | 146 | 0.46 | ||||||||||||||||||||||
| Restricted investment in bank stock | 26,428 | 290 | 4.40 | 22,795 | 330 | 5.87 | 31,481 | 370 | 4.73 | ||||||||||||||||||||||
| Total interest-earning assets | 4,168,344 | 44,429 | 4.28 | 4,053,324 | 41,899 | 4.19 | 3,912,802 | 40,756 | 4.19 | ||||||||||||||||||||||
| Allowance for loan losses | (27,355 | ) | (26,215 | ) | (29,924 | ) | |||||||||||||||||||||||||
| Noninterest-earning assets | 354,584 | 355,205 | 329,429 | ||||||||||||||||||||||||||||
| Total assets | $ | 4,495,573 | $ | 4,382,314 | $ | 4,212,307 | |||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||
| Money market deposits | 944,646 | 1,609 | 0.68 | 958,656 | 1,515 | 0.64 | 791,845 | 992 | 0.50 | ||||||||||||||||||||||
| Savings deposits | 186,033 | 75 | 0.16 | 199,000 | 79 | 0.16 | 215,267 | 156 | 0.29 | ||||||||||||||||||||||
| Time deposits | 976,012 | 3,311 | 1.36 | 963,976 | 3,091 | 1.30 | 889,561 | 2,857 | 1.29 | ||||||||||||||||||||||
| Other interest-bearing deposits | 582,196 | 500 | 0.34 | 549,335 | 424 | 0.31 | 528,954 | 429 | 0.33 | ||||||||||||||||||||||
| Total interest-bearing deposits | 2,688,887 | 5,495 | 0.82 | 2,670,967 | 5,109 | 0.78 | 2,425,627 | 4,434 | 0.74 | ||||||||||||||||||||||
| Borrowings | 514,161 | 2,244 | 1.75 | 442,595 | 1,985 | 1.82 | 639,054 | 2,355 | 1.48 | ||||||||||||||||||||||
| Subordinated debentures (5) | 55,155 | 810 | 5.89 | 55,155 | 808 | 5.94 | 55,155 | 812 | 5.92 | ||||||||||||||||||||||
| Capital lease obligation | 2,720 | 41 | 6.05 | 2,752 | 41 | 6.04 | 2,844 | 43 | 6.08 | ||||||||||||||||||||||
| Total interest-bearing liabilities | 3,260,923 | 8,590 | 1.06 | 3,171,469 | 7,943 | 1.02 | 3,122,680 | 7,644 | 0.98 | ||||||||||||||||||||||
| Demand deposits | 667,461 | 655,597 | 581,743 | ||||||||||||||||||||||||||||
| Other liabilities | 17,441 | 15,705 | 24,365 | ||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 684,902 | 671,302 | 606,108 | ||||||||||||||||||||||||||||
| Stockholders' equity | 549,748 | 539,543 | 483,519 | ||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,495,573 | $ | 4,382,314 | $ | 4,212,307 | |||||||||||||||||||||||||
| Net interest income (tax equivalent basis) | 35,839 | 33,956 | 33,112 | ||||||||||||||||||||||||||||
| Net interest spread (6) | 3.22 | % | 3.17 | % | 3.21 | % | |||||||||||||||||||||||||
| Net interest margin (7) | 3.45 | % | 3.40 | % | 3.40 | % | |||||||||||||||||||||||||
| Tax equivalent adjustment | (738 | ) | (815 | ) | (718 | ) | |||||||||||||||||||||||||
| Net interest income | $ | 35,101 | $ | 33,141 | $ | 32,394 | |||||||||||||||||||||||||
| (1) Average balances are calculated on amortized cost. | |||||||||||||||||||||||||||||||
| (2) Interest income is presented on a tax equivalent basis using 35% federal tax rate. | |||||||||||||||||||||||||||||||
| (3) Includes loan fee income. | |||||||||||||||||||||||||||||||
| (4) Loans include nonaccrual loans. | |||||||||||||||||||||||||||||||
| (5) Does not reflect netting of debt issuance costs of $565, $580 and $714 for the three months ended June 30, 2017 March 31, 2017 and June 30, 2016, respectively. | |||||||||||||||||||||||||||||||
| (6) Represents difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities and is presented on a tax equivalent basis. | |||||||||||||||||||||||||||||||
| (7) Represents net interest income on a tax equivalent basis divided by average total interest-earning assets. | |||||||||||||||||||||||||||||||
| (8) Rates are annualized. | |||||||||||||||||||||||||||||||