ENGLEWOOD CLIFFS, N.J., Jan. 25, 2018 (GLOBE NEWSWIRE) -- ConnectOne Bancorp, Inc. (Nasdaq:CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported net income of $10.6 million for the fourth quarter of 2017 compared with $13.1 million for the third quarter of 2017 and a $2.0 million loss during the fourth quarter of 2016. Diluted earnings per share were $0.33 for the current quarter versus $0.41 earned in the third quarter of 2017 and a $0.07 loss in the fourth quarter of 2016.
Adjusted net income amounted to $16.3 million, or $0.51 earnings per share, for the fourth quarter of 2017; $14.9 million, or $0.46 earnings per share, for the third quarter of 2017; and $12.2 million, or $0.40 earnings per share, for the fourth quarter of 2016. The fourth quarter 2017 adjusted net income excludes an estimated $5.6 million deferred tax asset (“DTA”) valuation charge related to the Tax Cuts & Jobs Act of 2017 (“Tax Act”). Adjusted net income also excludes taxi medallion after-tax charges of $0.2 million for the fourth quarter 2017, $1.8 million for the third quarter of 2017, and $14.2 million for the fourth quarter 2016.
Frank Sorrentino, ConnectOne’s Chairman and Chief Executive Officer stated, “We are proud to announce that ConnectOne achieved another important milestone, crossing over the $5 billion mark in total assets. Driven by organic growth, this reflects a 20.0% year-over-year increase in loans receivable, net of loan sales. For the fourth quarter, on an annualized basis, average total deposits grew by 19.6%, essentially matching our loan growth. Deposit pricing competition continues to be fierce; however, we have largely offset the increase in funding costs with higher yields on loans combined with strong growth in noninterest-bearing demand deposits. Our fourth quarter 2017 adjusted net interest margin, which excludes purchase accounting accretable yield, remained essentially flat on a sequential basis at 3.42%. Meanwhile, tax reform resulted in an estimated DTA write-down of $5.6 million recorded in the fourth quarter of 2017, but will positively impact our earnings in 2018 through a significantly lower effective tax rate. Excluding the DTA charge for the fourth quarter of 2017, return on average assets exceeded 1.30% and return on tangible common equity exceeded 15%, both record performance metrics for the Company. We also continue to make significant strides in improving our commercial real estate (“CRE”) concentration metrics. The drivers, which have reduced the metric by approximately 60 percentage points, include continued momentum in non-CRE loan growth capabilities, the sale of approximately $50 million of non-relationship multifamily loans (which resulted in a gain on sale of approximately $550 thousand), and the previously announced $75 million subordinated debt offering completed in early January 2018.”
Mr. Sorrentino added, “We enter 2018 sharply focused on our strategic priorities and are well-positioned to continue to improve our performance and increase our competitive advantage. I am confident we will continue to attract additional bankers and support staff to our organization and will continue to invest in our infrastructure. Our enhanced capabilities and new technologies, coupled with growth in our teams, will serve all our clients well in the coming year.”
Operating Results
Fully taxable equivalent net interest income for the fourth quarter of 2017 was $40.7 million, an increase of $2.8 million, or 7.4%, from the third quarter of 2017, resulting from an increase in average interest-earning assets of 5.1% and the widening of the net interest margin to 3.51% from 3.44%. Included in net interest income was accretion and amortization of purchase accounting adjustments of $1.0 million and $0.3 million during the fourth and third quarters of 2017, respectively, with the increase resulting from accelerated purchase accounting income accretion. Excluding purchase accounting adjustments, the adjusted net interest margin was 3.42% in the fourth quarter of 2017, widening by 1 basis-point from the third quarter 2017 adjusted net interest margin of 3.41%. The increase in net interest margin was primarily attributable to higher yields on loans largely offset by increased deposit funding costs.
Fully taxable equivalent net interest income for the fourth quarter of 2017 increased by $6.6 million, or 19.4%, from the fourth quarter of 2016, resulting from an increase in average interest-earning assets of 14.0% and the widening of the net interest margin by 15 basis-points to 3.51% from 3.36%. Included in net interest income was accretion and amortization of purchase accounting adjustments of $1.0 million during the fourth quarter of 2017 and 2016. Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.42% in the fourth quarter of 2017, widening by 15 basis-points from the fourth quarter of 2016 adjusted net interest margin of 3.27%. The increase in the adjusted net interest margin was primarily attributable to a lower volume of cash balances resulting in an improved asset-mix, partially offset by increases in deposit funding costs, as well as lower yields on securities.
Noninterest income totaled $2.0 million in the fourth quarter of 2017, $1.8 million in the third quarter of 2017 and $1.6 million in the fourth quarter of 2016. The most recent quarter included a $0.5 million gain on sale of non-relationship multifamily loans, and the third quarter 2017 included a $0.3 million bank owned life insurance death benefit.
Noninterest expenses totaled $16.6 million for the fourth quarter of 2017, a decrease of $2.0 million from $18.6 million for the third quarter of 2017 and an increase of $1.3 million from $15.3 million for the fourth quarter of 2016. The decrease from the prior sequential quarter was mainly attributable to the valuation allowance adjustment on taxi medallion loans held-for-sale, which declined to $0.3 million in the current quarter from $3.0 million in the third quarter of 2017, offset by increases salaries and employee benefits, primarily bonus accruals for non-executives ($0.5 million) and other expenses ($0.2 million). The increase in noninterest expenses from the prior year fourth quarter was mainly attributable to increases in salaries and employee benefits ($1.5 million) and a valuation allowance adjustment on taxi medallion loans held-for-sale ($0.3 million), offset by decreases in FDIC insurance expense ($0.1 million), professional and consulting ($0.2 million) and occupancy and equipment expenses ($0.2 million). The increases over the prior year fourth quarter were the result of increased levels of business and staff resulting from organic growth.
Income tax expense was $12.7 million for the fourth quarter of 2017, compared to $5.6 million for the third quarter of 2017 and a $3.4 million benefit for the fourth quarter of 2016. Included in income tax expense for the fourth quarter of 2017 is an estimated $5.6 million DTA valuation charge related to the Tax Act. In addition, there was an approximately $0.2 million income tax benefit recorded during the fourth quarter of 2017, which resulted from the effect of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. At the present time, the Bank is projecting a 2018 effective tax rate of approximately 22%.
Asset Quality
The provision for loan losses was $2.0 million in the fourth quarter of 2017, $1.5 million in the third quarter of 2017 and $25.2 million in the fourth quarter of 2016. The increase from the prior sequential quarter was largely attributable to higher loan growth. The prior year quarter included $24.0 of provision for loan losses related to the taxi medallion loan portfolio.
During the fourth quarter of 2017, the Bank’s entire taxi medallion loan portfolio was transferred back to loans held-for-investment from the held-for-sale designation. As of December 31, 2017, the loans secured by NYC taxi medallions, predominantly corporate medallions, had a carrying value of $46.8 million, compared to $65.6 million as of December 31, 2016. The decrease was primarily attributable to valuation adjustments related to reduced medallion lease revenues, lower transfer valuations as reported by the New York City Taxi and Limousine Commission, and overall weakness in the NYC taxi industry. As of December 31, 2017, the medallion loans had a per medallion carrying value of $343,000, compared to $348,000 as of September 30, 2017.
Nonperforming assets, which includes nonaccrual loans and other real estate owned, were $66.2 million at December 31, 2017, $61.2 million at September 30, 2017 and $69.4 million at December 31, 2016. Included in nonperforming assets were taxi medallion loans totaling $46.8 million at December 31, 2017, $47.4 million at September 30, 2017 and $63.0 million at December 31, 2016. Nonperforming assets as a percentage of total assets were 1.29% at December 31, 2017, 1.26% at September 30, 2017 and 1.57% at December 31, 2016.
Excluding the taxi medallion loans, nonaccrual loans were $18.8 million at December 31, 2017, $13.8 million at September 30, 2017 and $5.7 million at December 31, 2016. The increase in nonaccruals from the prior sequential quarter is primarily attributable to one, well-secured, commercial real estate loan that was added to nonaccrual during the quarter, offset by two nonaccrual loans that were paid-off without loss or charge-off. Excluding taxi medallion loans, nonaccrual loans as a percentage of loans receivable were 0.46% at December 31, 2017, 0.35% at September 30, 2017 and 0.16% at December 31, 2016.
The net charge-off ratio was 0.01% for the fourth quarter of 2017, 0.00% for the third quarter of 2017 and 4.23% for the fourth quarter of 2016. The allowance for loan losses represented 0.76%, 0.77%, and 0.74% of loans receivable as of December 31, 2017, September 30, 2017 and December 31, 2016, respectively. The allowance for loan losses as a percentage of nonaccrual loans, excluding taxi medallion loans, was 168.4% as of December 31, 2017, 217.2% as of September 30, 2017and 449.0% as of December 31, 2016.
Selected Balance Sheet Items
At December 31, 2017, the Company’s total assets were $5.1 billion, an increase of $682 million from December 31, 2016. Loans receivable at December 31, 2017 were $4.2 billion, reflecting net loan growth (loan originations less pay-downs and pay-offs) of $696 million (includes $47 million of taxi medallion loans transferred back to loans held-for-investment) from December 31, 2016, primarily attributable to increases in multifamily ($353 million), commercial and industrial ($228 million, including the aforementioned transfer of $47 million of taxi medallion loans), other commercial real estate ($78 million), and residential real estate ($39 million), offset by a slight decrease in construction ($3 million).
The Company’s stockholders’ equity was $565 million at December 31, 2017, an increase of $34 million from December 31, 2016. The increase in stockholders’ equity was primarily attributable to an increase of $34 million in retained earnings and approximately $2 million of equity issuance related to stock-based compensation, offset by increases in other comprehensive losses of $1 million. As of December 31, 2017, the Company’s tangible common equity ratio and tangible book value per share were 8.41% and $13.01, 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 $148 million and $149 million as of December 31, 2017 and December 31, 2016, respectively.
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.
Fourth Quarter 2017 Conference Call
Management will host a conference call and audio webcast at 10:00 a.m. ET on January 25, 2018 to review the Company's financial performance and operating results. The conference call dial-in number is 719-457-2620, access code 1979139. 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 "Shareholders" link on the Company's website www.ConnectOneBank.com or at http://ir.connectonebank.com.
A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, January 25, 2018 and ending on Thursday, February 1, 2018 by dialing 719-457-0820, access code 1979139. An online archive of the webcast will be available following the completion of the conference call at www.ConnectOneBank.com or at http://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 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.
Investor Contact:
William S. Burns
Executive VP & CFO
201.816.4474; bburns@cnob.com
Media Contact:
Jake Ciorciari, MWWPR
646.376.7042; jciorciari@mww.com
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION | |||||||
| (in thousands) | |||||||
| December 31, | December 31, | ||||||
| 2017 | 2016 | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 52,565 | $ | 37,150 | |||
| Interest-bearing deposits with banks | 97,017 | 163,249 | |||||
| Cash and cash equivalents | 149,582 | 200,399 | |||||
| Securities available-for-sale | 435,284 | 353,290 | |||||
| Loans held-for-sale | 24,845 | 78,005 | |||||
| Loans receivable | 4,171,456 | 3,475,832 | |||||
| Less: Allowance for loan losses | 31,748 | 25,744 | |||||
| Net loans receivable | 4,139,708 | 3,450,088 | |||||
| Investment in restricted stock, at cost | 33,497 | 24,310 | |||||
| Bank premises and equipment, net | 21,659 | 22,075 | |||||
| Accrued interest receivable | 15,470 | 12,965 | |||||
| Bank owned life insurance | 111,311 | 98,359 | |||||
| Other real estate owned | 538 | 626 | |||||
| Goodwill | 145,909 | 145,909 | |||||
| Core deposit intangibles | 2,364 | 3,088 | |||||
| Other assets | 28,275 | 37,234 | |||||
| Total assets | $ | 5,108,442 | $ | 4,426,348 | |||
| LIABILITIES | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ | 776,843 | $ | 694,977 | |||
| Interest-bearing | 3,018,285 | 2,649,294 | |||||
| Total deposits | 3,795,128 | 3,344,271 | |||||
| Borrowings | 670,077 | 476,280 | |||||
| Subordinated debentures (net of $456 and $621 in debt issuance costs) | 54,699 | 54,534 | |||||
| Other liabilities | 23,101 | 20,231 | |||||
| Total liabilities | 4,543,005 | 3,895,316 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| STOCKHOLDERS' EQUITY | |||||||
| Common stock | 412,546 | 412,726 | |||||
| Additional paid-in capital | 13,602 | 11,407 | |||||
| Retained earnings | 160,025 | 126,462 | |||||
| Treasury stock | (16,717 | ) | (16,717 | ) | |||
| Accumulated other comprehensive loss | (4,019 | ) | (2,846 | ) | |||
| Total stockholders' equity | 565,437 | 531,032 | |||||
| Total liabilities and stockholders' equity | $ | 5,108,442 | $ | 4,426,348 | |||
| CONNECTONE BANCORP, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| (in thousands, except for per share data) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| 12/31/17 | 12/31/16 | 12/31/17 | 12/31/16 | |||||||||
| Interest income | ||||||||||||
| Interest and fees on loans | $ | 46,945 | $ | 38,600 | $ | 168,824 | $ | 147,982 | ||||
| Interest and dividends on investment securities: | ||||||||||||
| Taxable | 1,757 | 1,389 | 6,799 | 7,266 | ||||||||
| Tax-exempt | 914 | 959 | 3,569 | 3,827 | ||||||||
| Dividends | 439 | 336 | 1,421 | 1,410 | ||||||||
| Interest on federal funds sold and other short-term investments | 156 | 215 | 711 | 756 | ||||||||
| Total interest income | 50,211 | 41,499 | 181,324 | 161,241 | ||||||||
| Interest expense | ||||||||||||
| Deposits | 6,953 | 5,135 | 23,670 | 18,667 | ||||||||
| Borrowings | 3,450 | 2,957 | 12,585 | 12,429 | ||||||||
| Total interest expense | 10,403 | 8,092 | 36,255 | 31,096 | ||||||||
| Net interest income | 39,808 | 33,407 | 145,069 | 130,145 | ||||||||
| Provision for loan losses | 2,000 | 25,200 | 6,000 | 38,700 | ||||||||
| Net interest income after provision for loan losses | 37,808 | 8,207 | 139,069 | 91,445 | ||||||||
| Noninterest income | ||||||||||||
| Annuities and insurance commissions | - | 51 | 39 | 191 | ||||||||
| Income on bank owned life insurance | 779 | 715 | 3,181 | 2,559 | ||||||||
| Net gains on sale of loans held-for-sale | 588 | 86 | 708 | 232 | ||||||||
| Deposit, loan and other income | 657 | 721 | 2,680 | 2,704 | ||||||||
| Net gains on sale of investment securities | - | - | 1,596 | 4,234 | ||||||||
| Total noninterest income | 2,024 | 1,573 | 8,204 | 9,920 | ||||||||
| Noninterest expenses | ||||||||||||
| Salaries and employee benefits | 9,418 | 7,888 | 35,128 | 31,030 | ||||||||
| Occupancy and equipment | 1,948 | 2,122 | 8,163 | 8,571 | ||||||||
| FDIC insurance | 935 | 985 | 3,485 | 2,940 | ||||||||
| Professional and consulting | 671 | 901 | 2,863 | 2,979 | ||||||||
| Marketing and advertising | 226 | 222 | 996 | 1,040 | ||||||||
| Data processing | 1,069 | 1,106 | 4,543 | 4,141 | ||||||||
| Amortization of core deposit intangible | 169 | 193 | 724 | 820 | ||||||||
| Increase in valuation allowance, loans held-for-sale | 267 | - | 15,592 | - | ||||||||
| Other expenses | 1,863 | 1,835 | 7,265 | 6,986 | ||||||||
| Total noninterest expenses | 16,566 | 15,252 | 78,759 | 58,507 | ||||||||
| Income before income tax expense | 23,266 | (5,472 | ) | 68,514 | 42,858 | |||||||
| Income tax expense | 12,686 | (3,448 | ) | 25,294 | 11,776 | |||||||
| Net income | 10,580 | (2,024 | ) | 43,220 | 31,082 | |||||||
| Less: Preferred stock dividends | - | - | - | 22 | ||||||||
| Net income available to common stockholders | $ | 10,580 | $ | (2,024 | ) | $ | 43,220 | $ | 31,060 | |||
| Earnings per common share: | ||||||||||||
| Basic | $ | 0.33 | $ | (0.07 | ) | $ | 1.35 | $ | 1.02 | |||
| Diluted | 0.33 | (0.07 | ) | 1.34 | 1.01 | |||||||
| Dividends per common share | $ | 0.075 | $ | 0.075 | $ | 0.300 | $ | 0.300 | ||||
| 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 | |||||||||||||||||||||
| As of | |||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||
| Selected Financial Data | (dollars in thousands) | ||||||||||||||||||||
| Total assets | $ | 5,108,442 | $ | 4,844,755 | $ | 4,681,280 | $ | 4,460,816 | $ | 4,426,348 | |||||||||||
| Loans receivable: | |||||||||||||||||||||
| Commercial | 781,698 | 641,613 | 610,442 | 541,690 | 554,065 | ||||||||||||||||
| Commercial real estate | 1,232,037 | 1,254,720 | 1,218,995 | 1,192,074 | 1,154,154 | ||||||||||||||||
| Multifamily | 1,403,256 | 1,330,485 | 1,251,962 | 1,134,760 | 1,050,067 | ||||||||||||||||
| Commercial construction | 483,216 | 399,453 | 431,049 | 460,611 | 486,228 | ||||||||||||||||
| Residential | 271,795 | 264,244 | 251,108 | 242,883 | 232,547 | ||||||||||||||||
| Consumer | 2,808 | 1,912 | 2,005 | 2,811 | 2,380 | ||||||||||||||||
| Gross loans | 4,174,810 | 3,892,427 | 3,765,561 | 3,574,829 | 3,479,441 | ||||||||||||||||
| Unearned net origination fees | (3,354 | ) | (3,138 | ) | (3,989 | ) | (3,166 | ) | (3,609 | ) | |||||||||||
| Loans receivable | 4,171,456 | 3,889,289 | 3,761,572 | 3,571,663 | 3,475,832 | ||||||||||||||||
| Loans held-for-sale (net of valuation allowance) | 24,845 | 89,386 | 51,124 | 62,255 | 78,005 | ||||||||||||||||
| Total loans | $ | 4,196,301 | $ | 3,978,675 | $ | 3,812,696 | $ | 3,633,918 | $ | 3,553,837 | |||||||||||
| Securities available-for-sale | $ | 435,284 | $ | 400,516 | $ | 402,130 | $ | 352,476 | $ | 353,290 | |||||||||||
| Goodwill and other intangible assets | 148,273 | 148,442 | 148,611 | 148,804 | 148,997 | ||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Noninterest-bearing demand | 776,843 | 719,582 | 695,522 | 671,183 | 694,977 | ||||||||||||||||
| Other interest-bearing deposits | 1,838,316 | 1,825,828 | 1,752,523 | 1,714,081 | 1,681,158 | ||||||||||||||||
| Time deposits | 1,179,969 | 1,078,359 | 982,328 | 970,213 | 968,136 | ||||||||||||||||
| Total deposits | $ | 3,795,128 | $ | 3,623,769 | $ | 3,430,373 | $ | 3,355,477 | $ | 3,344,271 | |||||||||||
| Borrowings | $ | 670,077 | $ | 585,124 | $ | 626,173 | $ | 491,226 | $ | 476,280 | |||||||||||
| Subordinated debentures (net of issuance costs) | 54,699 | 54,657 | 54,616 | 54,575 | 54,534 | ||||||||||||||||
| Total stockholders' equity | 565,437 | 557,691 | 546,173 | 540,277 | 531,032 | ||||||||||||||||
| Quarterly Average Balances | |||||||||||||||||||||
| Total assets | $ | 4,917,032 | $ | 4,714,012 | $ | 4,495,573 | $ | 4,382,314 | $ | 4,349,961 | |||||||||||
| Loans receivable: | |||||||||||||||||||||
| Commercial | 761,147 | 671,525 | 603,733 | 557,347 | 644,263 | ||||||||||||||||
| Commercial real estate (including multifamily) | 2,566,959 | 2,502,846 | 2,337,499 | 2,222,795 | 2,130,955 | ||||||||||||||||
| Commercial construction | 439,629 | 418,439 | 451,038 | 466,455 | 479,342 | ||||||||||||||||
| Residential | 268,047 | 255,755 | 246,864 | 237,418 | 229,738 | ||||||||||||||||
| Consumer | 3,849 | 2,555 | 2,929 | 2,460 | 2,777 | ||||||||||||||||
| Gross loans | 4,039,631 | 3,851,120 | 3,642,063 | 3,486,475 | 3,487,075 | ||||||||||||||||
| Unearned net origination fees | (3,485 | ) | (3,724 | ) | (3,967 | ) | (3,304 | ) | (3,151 | ) | |||||||||||
| Loans receivable | 4,036,146 | 3,847,396 | 3,638,096 | 3,483,171 | 3,483,924 | ||||||||||||||||
| Loans held-for-sale | 57,812 | 51,008 | 61,259 | 65,860 | 4,549 | ||||||||||||||||
| Total loans | $ | 4,093,958 | $ | 3,898,404 | $ | 3,699,355 | $ | 3,549,031 | $ | 3,488,473 | |||||||||||
| Securities available-for-sale | 417,560 | 398,635 | 391,965 | 367,940 | 351,809 | ||||||||||||||||
| Goodwill and other intangible assets | 148,383 | 148,553 | 148,737 | 148,930 | 149,123 | ||||||||||||||||
| Deposits: | |||||||||||||||||||||
| Noninterest-bearing demand | 712,391 | 688,707 | 667,461 | 655,597 | 666,913 | ||||||||||||||||
| Other interest-bearing deposits | 1,855,688 | 1,816,162 | 1,712,875 | 1,706,991 | 1,631,368 | ||||||||||||||||
| Time deposits | 1,114,670 | 1,005,997 | 976,012 | 963,976 | 985,944 | ||||||||||||||||
| Total deposits | $ | 3,682,749 | $ | 3,510,866 | $ | 3,356,348 | $ | 3,326,564 | $ | 3,284,225 | |||||||||||
| Borrowings | $ | 588,260 | $ | 570,711 | $ | 514,161 | $ | 442,595 | $ | 476,925 | |||||||||||
| Subordinated debentures | 55,155 | 55,155 | 55,155 | 55,155 | 55,155 | ||||||||||||||||
| Total stockholders' equity | 567,308 | 556,620 | 549,748 | 539,544 | 511,663 | ||||||||||||||||
| Three Months Ended | |||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||
| (dollars in thousands, except for per share data) | |||||||||||||||||||||
| Net interest income | $ | 39,808 | $ | 37,019 | $ | 35,101 | $ | 33,141 | $ | 33,407 | |||||||||||
| Provision for loan losses | 2,000 | 1,450 | 1,450 | 1,100 | 25,200 | ||||||||||||||||
| Net interest income after provision for loan losses | 37,808 | 35,569 | 33,651 | 32,041 | 8,207 | ||||||||||||||||
| Noninterest income | |||||||||||||||||||||
| Annuity and insurance commissions | - | - | - | 39 | 51 | ||||||||||||||||
| Income on bank owned life insurance | 779 | 985 | 714 | 703 | 715 | ||||||||||||||||
| Net gains on sale of loans held-for-sale | 588 | 50 | 49 | 21 | 86 | ||||||||||||||||
| Deposit, loan and other income | 657 | 721 | 659 | 643 | 721 | ||||||||||||||||
| Net gains on sale of investment securities | - | - | - | 1,596 | - | ||||||||||||||||
| Total noninterest income | 2,024 | 1,756 | 1,422 | 3,002 | 1,573 | ||||||||||||||||
| Noninterest expenses | |||||||||||||||||||||
| Salaries and employee benefits | 9,418 | 8,872 | 8,632 | 8,206 | 7,888 | ||||||||||||||||
| Occupancy and equipment | 1,948 | 1,969 | 1,991 | 2,255 | 2,122 | ||||||||||||||||
| FDIC insurance | 935 | 840 | 815 | 895 | 985 | ||||||||||||||||
| Professional and consulting | 671 | 740 | 734 | 718 | 901 | ||||||||||||||||
| Marketing and advertising | 226 | 225 | 289 | 256 | 222 | ||||||||||||||||
| Data processing | 1,069 | 1,176 | 1,149 | 1,149 | 1,106 | ||||||||||||||||
| Amortization of core deposit intangible | 169 | 169 | 193 | 193 | 193 | ||||||||||||||||
| Increase in valuation allowance, loans held-for-sale | 267 | 3,000 | 9,725 | 2,600 | - | ||||||||||||||||
| Other expenses | 1,863 | 1,650 | 1,775 | 1,977 | 1,835 | ||||||||||||||||
| Total noninterest expenses | 16,566 | 18,641 | 25,303 | 18,249 | 15,252 | ||||||||||||||||
| Income (loss) before income tax expense | 23,266 | 18,684 | 9,770 | 16,794 | (5,472 | ) | |||||||||||||||
| Income tax expense (benefit) | 12,686 | 5,607 | 2,087 | 4,914 | (3,448 | ) | |||||||||||||||
| Net income (loss) available to common stockholders | $ | 10,580 | $ | 13,077 | $ | 7,683 | $ | 11,880 | $ | (2,024 | ) | ||||||||||
| Reconciliation of GAAP Earnings to Earnings Excluding the Following Items: | |||||||||||||||||||||
| Net income (loss) available to common stockholders | $ | 10,580 | $ | 13,077 | $ | 7,683 | $ | 11,880 | $ | (2,024 | ) | ||||||||||
| Deferred tax asset valuation charge | 5,574 | - | - | - | - | ||||||||||||||||
| Net gains on sales of securities (after taxes) | - | - | - | (1,093 | ) | - | |||||||||||||||
| Provision related to taxi medallion loans (after taxes) | - | - | - | - | 14,196 | ||||||||||||||||
| Increase in valuation allowance, loans held-for-sale (after taxes) | 182 | 1,776 | 5,719 | 1,538 | - | ||||||||||||||||
| Net income available to common stockholders-adjusted | $ | 16,336 | $ | 14,853 | $ | 13,402 | $ | 12,325 | $ | 12,172 | |||||||||||
| Weighted average diluted shares outstanding | 32,252,759 | 32,182,016 | 32,255,770 | 32,192,643 | 30,729,359 | ||||||||||||||||
| Diluted EPS (GAAP) | $ | 0.33 | $ | 0.41 | $ | 0.24 | $ | 0.37 | $ | (0.07 | ) | ||||||||||
| Diluted EPS-adjusted (non-GAAP) (1) | 0.51 | 0.46 | 0.42 | 0.38 | 0.40 | ||||||||||||||||
| Return on Assets Measures | |||||||||||||||||||||
| Net income available to common stockholders-adjusted | $ | 16,336 | $ | 14,853 | $ | 13,402 | $ | 12,325 | $ | 12,172 | |||||||||||
| Average assets | $ | 4,917,032 | $ | 4,714,012 | $ | 4,495,573 | $ | 4,382,314 | $ | 4,349,961 | |||||||||||
| Less: average intangible assets | (148,383 | ) | (148,553 | ) | (148,737 | ) | (148,930 | ) | (149,123 | ) | |||||||||||
| Average tangible assets | $ | 4,768,649 | $ | 4,565,459 | $ | 4,346,836 | $ | 4,233,384 | $ | 4,200,838 | |||||||||||
| Return on avg. assets (GAAP) | 0.85 | % | 1.10 | % | 0.69 | % | 1.10 | % | (0.19 | ) | % | ||||||||||
| Return on avg. assets-adjusted (non-GAAP) (2) | 1.32 | 1.25 | 1.20 | 1.14 | 1.11 | ||||||||||||||||
| Return on avg. tangible assets (non-GAAP) (3) | 0.89 | 1.15 | 0.72 | 1.15 | (0.18 | ) | |||||||||||||||
| Return on avg. tangible assets-adjusted (non-GAAP) (4) | 1.37 | 1.30 | 1.25 | 1.19 | 1.16 | ||||||||||||||||
| ________________________ | |||||||||||||||||||||
| (1) Adjusted net income available to common stockholders divided by weighted average diluted shares outstanding. | |||||||||||||||||||||
| (2) Adjusted net income available to common stockholders divided by average assets. | |||||||||||||||||||||
| (3) Net income available to common stockholders excluding amortization of intangible assets divided by average tangible assets. | |||||||||||||||||||||
| (4) Adjusted net income available to common stockholders excluding amortization of intangible assets divided by average tangible assets. | |||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||
| Return on Equity Measures | (dollars in thousands) | ||||||||||||||||||||
| Net income available to common stockholders-adjusted | $ | 16,336 | $ | 14,853 | $ | 13,402 | $ | 12,325 | $ | 12,172 | |||||||||||
| Average common equity | $ | 567,308 | $ | 556,620 | $ | 549,748 | $ | 539,544 | $ | 511,663 | |||||||||||
| Less: average intangible assets | (148,383 | ) | (148,553 | ) | (148,737 | ) | (148,930 | ) | (149,123 | ) | |||||||||||
| Average tangible common equity | $ | 418,925 | $ | 408,067 | $ | 401,011 | $ | 390,614 | $ | 362,540 | |||||||||||
| Return on avg. common equity (GAAP) | 7.40 | % | 9.32 | % | 5.61 | % | 8.93 | % | (1.57 | ) | % | ||||||||||
| Return on avg. common equity-adjusted (non-GAAP) (5) | 11.42 | 10.59 | 9.78 | 9.26 | 9.46 | ||||||||||||||||
| Return on avg. tangible common equity (non-GAAP) (6) | 10.11 | 12.81 | 7.80 | 12.45 | (2.10 | ) | |||||||||||||||
| Return on avg. tangible common equity-adjusted (non-GAAP) (7) | 15.57 | 14.54 | 13.52 | 12.91 | 13.48 | ||||||||||||||||
| Efficiency Measures | |||||||||||||||||||||
| Total noninterest expenses | $ | 16,566 | $ | 18,641 | $ | 25,303 | $ | 18,249 | $ | 15,252 | |||||||||||
| Increase in valuation allowance, loans held-for-sale | (267 | ) | (3,000 | ) | (9,725 | ) | (2,600 | ) | - | ||||||||||||
| Foreclosed property expense | (32 | ) | (46 | ) | (71 | ) | (100 | ) | (81 | ) | |||||||||||
| Operating noninterest expense | $ | 16,267 | $ | 15,595 | $ | 15,507 | $ | 15,549 | $ | 15,171 | |||||||||||
| Net interest income (tax equivalent basis) | $ | 40,744 | $ | 37,929 | $ | 35,839 | $ | 33,956 | $ | 34,120 | |||||||||||
| Noninterest income | 2,024 | 1,756 | 1,422 | 3,002 | 1,573 | ||||||||||||||||
| Net gains on sales of investment securities | - | - | - | (1,596 | ) | - | |||||||||||||||
| Operating revenue | $ | 42,768 | $ | 39,685 | $ | 37,261 | $ | 35,362 | $ | 35,693 | |||||||||||
| Operating efficiency ratio (non-GAAP) (8) | 38.0 | % | 39.3 | % | 41.6 | % | 44.0 | % | 42.5 | % | |||||||||||
| Net Interest Margin | |||||||||||||||||||||
| Average interest-earning assets | $ | 4,603,659 | $ | 4,378,537 | $ | 4,168,344 | $ | 4,053,324 | $ | 4,038,030 | |||||||||||
| Net interest income (tax equivalent basis) | $ | 40,744 | $ | 37,929 | $ | 35,839 | $ | 33,956 | $ | 34,120 | |||||||||||
| Impact of purchase accounting fair value marks | (1,026 | ) | (317 | ) | (316 | ) | (649 | ) | (960 | ) | |||||||||||
| Adjusted net interest income | $ | 39,718 | $ | 37,612 | $ | 35,523 | $ | 33,307 | $ | 33,160 | |||||||||||
| Net interest margin (GAAP) | 3.51 | % | 3.44 | % | 3.45 | % | 3.40 | % | 3.36 | % | |||||||||||
| Adjusted net interest margin (non-GAAP) (9) | 3.42 | 3.41 | 3.42 | 3.33 | 3.27 | ||||||||||||||||
| _____________________ | |||||||||||||||||||||
| (5) Adjusted net income available to common stockholders divided by average common equity. | |||||||||||||||||||||
| (6) Net income available to common stockholders excluding amortization of intangibles assets divided by average tangible common equity. | |||||||||||||||||||||
| (7) Adjusted net income available to common stockholders divided by average tangible common equity. | |||||||||||||||||||||
| (8) Operating noninterest expense divided by operating revenue. | |||||||||||||||||||||
| (9) Adjusted net interest income divided by average interest-earning assets. | |||||||||||||||||||||
| As of | |||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | Mar. 31, | Dec. 31, | |||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||
| Capital Ratios and Book Value per Share | (dollars in thousands, except for per share data) | ||||||||||||||||||||
| Common equity | $ | 565,437 | $ | 557,691 | $ | 546,173 | $ | 540,277 | $ | 531,032 | |||||||||||
| Less: intangible assets | (148,273 | ) | (148,442 | ) | (148,611 | ) | (148,804 | ) | (148,997 | ) | |||||||||||
| Tangible common equity | $ | 417,164 | $ | 409,249 | $ | 397,562 | $ | 391,473 | $ | 382,035 | |||||||||||
| Total assets | $ | 5,108,442 | $ | 4,844,755 | $ | 4,681,280 | $ | 4,460,816 | $ | 4,426,348 | |||||||||||
| Less: intangible assets | (148,273 | ) | (148,442 | ) | (148,611 | ) | (148,804 | ) | (148,997 | ) | |||||||||||
| Tangible assets | $ | 4,960,169 | $ | 4,696,313 | $ | 4,532,669 | $ | 4,312,012 | $ | 4,277,351 | |||||||||||
| Common shares outstanding | 32,071,860 | 32,015,317 | 32,015,317 | 32,004,471 | 31,944,403 | ||||||||||||||||
| Common equity ratio (GAAP) | 11.07 | % | 11.51 | % | 11.67 | % | 12.11 | % | 12.00 | % | |||||||||||
| Tangible common equity ratio (non-GAAP) (10) | 8.41 | 8.71 | 8.77 | 9.08 | 8.93 | ||||||||||||||||
| Regulatory capital ratios (Bancorp): | |||||||||||||||||||||
| Leverage ratio | 8.92 | % | 9.13 | % | 9.33 | % | 9.44 | % | 9.29 | % | |||||||||||
| Common equity tier 1 risk-based ratio | 9.15 | 9.40 | 9.48 | 9.79 | 9.74 | ||||||||||||||||
| Risk-based tier 1 capital ratio | 9.26 | 9.52 | 9.60 | 9.92 | 9.87 | ||||||||||||||||
| Risk-based total capital ratio | 11.04 | 11.34 | 11.46 | 11.83 | 11.78 | ||||||||||||||||
| Regulatory capital ratios (Bank): | |||||||||||||||||||||
| Leverage ratio | 9.84 | % | 10.11 | % | 10.34 | % | 10.50 | % | 10.34 | % | |||||||||||
| Common equity tier 1 risk-based ratio | 10.21 | 10.54 | 10.64 | 11.03 | 10.98 | ||||||||||||||||
| Risk-based tier 1 capital ratio | 10.21 | 10.54 | 10.64 | 11.03 | 10.98 | ||||||||||||||||
| Risk-based total capital ratio | 10.90 | 11.22 | 11.32 | 11.70 | 11.63 | ||||||||||||||||
| Book value per share (GAAP) | $ | 17.63 | $ | 17.42 | $ | 17.06 | $ | 16.88 | $ | 16.62 | |||||||||||
| Tangible book value per share (non-GAAP) (11) | 13.01 | 12.78 | 12.42 | 12.23 | 11.96 | ||||||||||||||||
| Net Loan Charge-offs Detail | |||||||||||||||||||||
| Net loan charge-offs (recoveries): | |||||||||||||||||||||
| Charge-offs | $ | 156 | $ | - | $ | 10 | $ | 72 | $ | 37,074 | |||||||||||
| Recoveries | (34 | ) | (20 | ) | (60 | ) | (129 | ) | (2 | ) | |||||||||||
| Net loan charge-offs | $ | 122 | $ | (20 | ) | $ | (50 | ) | $ | (57 | ) | $ | 37,072 | ||||||||
| Net loan charge-offs as a % of average total loans (annualized) | 0.01 | % | (0.00 | ) | % | (0.01 | ) | % | (0.01 | ) | % | 4.23 | % | ||||||||
| Asset Quality | |||||||||||||||||||||
| Nonaccrual taxi medallion loans | $ | 46,765 | $ | 47,430 | $ | 48,884 | $ | 59,054 | $ | 63,044 | |||||||||||
| Nonaccrual loans (excluding taxi medallion loans) | 18,848 | 13,755 | 14,055 | 12,790 | 5,734 | ||||||||||||||||
| Other real estate owned | 538 | - | 580 | 580 | 626 | ||||||||||||||||
| Total nonperforming assets | $ | 66,151 | $ | 61,185 | $ | 63,519 | $ | 72,424 | $ | 69,404 | |||||||||||
| Performing troubled debt restructurings | $ | 14,920 | $ | 12,749 | $ | 10,221 | $ | 10,005 | $ | 13,338 | |||||||||||
| Allowance for loan losses ("ALLL") | $ | 31,748 | $ | 29,870 | $ | 28,401 | $ | 26,901 | $ | 25,744 | |||||||||||
| Nonaccrual loans as a % of loans receivable (excluding taxi medallion loans) | 0.46 | % | 0.35 | % | 0.37 | % | 0.36 | % | 0.16 | % | |||||||||||
| Nonperforming assets as a % of total assets | 1.29 | 1.26 | 1.36 | 1.62 | 1.57 | ||||||||||||||||
| ALLL as a % of loans receivable | 0.76 | 0.77 | 0.76 | 0.75 | 0.74 | ||||||||||||||||
| ALLL as a % of nonaccrual loans | 48.4 | 48.8 | 45.1 | 37.4 | 37.4 | ||||||||||||||||
| ALLL (excluding taxi medallion loans specific reserves) as a % of nonaccrual loans (excluding taxi medallion loans) | 168.4 | 217.2 | 202.1 | 210.3 | 449.0 | ||||||||||||||||
| Loans receivable | $ | 4,171,456 | $ | 3,889,289 | $ | 3,761,572 | $ | 3,571,663 | $ | 3,475,832 | |||||||||||
| Less: taxi medallion loans | (46,765 | ) | - | - | - | - | |||||||||||||||
| Loans receivable (excluding taxi medallion loans) | $ | 4,124,691 | $ | 3,889,289 | $ | 3,761,572 | $ | 3,571,663 | $ | 3,475,832 | |||||||||||
| Loans held-for-sale, taxi medallion loans | $ | - | $ | 47,430 | $ | 50,891 | $ | 61,319 | $ | 65,596 | |||||||||||
| _____________________ | |||||||||||||||||||||
| (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 | |||||||||||||||||||||||||||||
| December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||||
| Average | Average | Average | |||||||||||||||||||||||||||
| Interest-earning assets: | Balance | Interest | Rate (8) | Balance | Interest | Rate (8) | Balance | Interest | Rate (8) | ||||||||||||||||||||
| Investment securities (1) (2) | $ | 417,954 | $ | 3,162 | 3.00 | % | $ | 397,077 | $ | 3,033 | 3.03 | % | $ | 346,377 | $ | 2,864 | 3.29 | % | |||||||||||
| Total loans (2) (3) (4) | 4,093,958 | 47,389 | 4.59 | 3,898,404 | 43,683 | 4.45 | 3,488,473 | 38,797 | 4.42 | ||||||||||||||||||||
| Federal funds sold and interest- | |||||||||||||||||||||||||||||
| bearing deposits with banks | 61,933 | 156 | 1.00 | 53,820 | 170 | 1.25 | 178,845 | 215 | 0.48 | ||||||||||||||||||||
| Restricted investment in bank stock | 29,814 | 440 | 5.86 | 29,236 | 362 | 4.91 | 24,335 | 336 | 5.49 | ||||||||||||||||||||
| Total interest-earning assets | 4,603,659 | 51,147 | 4.41 | 4,378,537 | 47,248 | 4.28 | 4,038,030 | 42,212 | 4.16 | ||||||||||||||||||||
| Allowance for loan losses | (30,478 | ) | (28,999 | ) | (38,932 | ) | |||||||||||||||||||||||
| Noninterest-earning assets | 343,851 | 364,474 | 350,863 | ||||||||||||||||||||||||||
| Total assets | $ | 4,917,032 | $ | 4,714,012 | $ | 4,349,961 | |||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||
| Time deposits | 1,114,670 | 4,172 | 1.48 | 1,005,997 | 3,593 | 1.42 | 985,944 | 3,199 | 1.29 | ||||||||||||||||||||
| Other interest-bearing deposits | 1,855,688 | 2,780 | 0.59 | 1,816,162 | 2,520 | 0.55 | 1,631,368 | 1,936 | 0.47 | ||||||||||||||||||||
| Total interest-bearing deposits | 2,970,358 | 6,952 | 0.93 | 2,822,159 | 6,113 | 0.86 | 2,617,312 | 5,135 | 0.78 | ||||||||||||||||||||
| Borrowings | 588,260 | 2,597 | 1.75 | 570,711 | 2,353 | 1.64 | 476,925 | 2,105 | 1.76 | ||||||||||||||||||||
| Subordinated debentures (5) | 55,155 | 814 | 5.86 | 55,155 | 813 | 5.85 | 55,155 | 810 | 5.84 | ||||||||||||||||||||
| Capital lease obligation | 2,655 | 40 | 5.98 | 2,688 | 40 | 5.90 | 2,783 | 42 | 6.00 | ||||||||||||||||||||
| Total interest-bearing liabilities | 3,616,428 | 10,403 | 1.14 | 3,450,713 | 9,319 | 1.07 | 3,152,175 | 8,092 | 1.02 | ||||||||||||||||||||
| Noninterest-bearing demand deposits | 712,391 | 688,707 | 666,913 | ||||||||||||||||||||||||||
| Other liabilities | 20,905 | 17,972 | 19,210 | ||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 733,296 | 706,679 | 686,123 | ||||||||||||||||||||||||||
| Stockholders' equity | 567,308 | 556,620 | 511,663 | ||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,917,032 | $ | 4,714,012 | $ | 4,349,961 | |||||||||||||||||||||||
| Net interest income (tax equivalent basis) | 40,744 | 37,929 | 34,120 | ||||||||||||||||||||||||||
| Net interest spread (6) | 3.27 | % | 3.21 | % | 3.14 | % | |||||||||||||||||||||||
| Net interest margin (7) | 3.51 | % | 3.44 | % | 3.36 | % | |||||||||||||||||||||||
| Tax equivalent adjustment | (936 | ) | (910 | ) | (713 | ) | |||||||||||||||||||||||
| Net interest income | $ | 39,808 | $ | 37,019 | $ | 33,407 | |||||||||||||||||||||||
| (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 $483, $525 and $649 for the three months ended December 31, 2017 September 30, 2017 and December 31, 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. | |||||||||||||||||||||||||||||