☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware | 47-1308512 | |||||||
(State or other jurisdiction of
incorporation or organization) |
(IRS Employer
Identification Number) |
|||||||
225 South Main Avenue | 57104 | |||||||
Sioux Falls, | South Dakota | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, $0.01 par value per share
|
GWB | New York Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||||||||||
Smaller reporting company | ☐ | Emerging growth company | ☐ |
(Unaudited) | |||||||||||
December 31, 2020 | September 30, 2020 | ||||||||||
Assets | |||||||||||
Cash and due from banks | $ | 228,050 | $ | 150,085 | |||||||
Interest-bearing bank deposits | 833,746 | 282,802 | |||||||||
Cash and cash equivalents | 1,061,796 | 432,887 | |||||||||
Securities available for sale | 2,059,615 | 1,774,626 | |||||||||
Loans, net of unearned discounts and deferred fees, including $611,588 and $655,185 of loans at fair value under the fair value option at December 31, 2020 and September 30, 2020, respectively; and $11,638 and $12,371 of loans held for sale at December 31, 2020 and September 30, 2020, respectively
|
9,517,876 | 10,076,142 | |||||||||
Allowance for credit losses ¹ | (308,794) | (149,887) | |||||||||
Net loans | 9,209,082 | 9,926,255 | |||||||||
Premises and equipment, including $600 of property held for sale at both December 31, 2020 and September 30, 2020
|
119,362 | 119,054 | |||||||||
Accrued interest receivable | 47,598 | 54,658 | |||||||||
Other repossessed property | 18,086 | 20,034 | |||||||||
Cash surrender value of life insurance policies | 31,873 | 31,658 | |||||||||
Net deferred tax assets | 91,704 | 47,709 | |||||||||
Other assets | 175,267 | 197,558 | |||||||||
Total assets | $ | 12,814,383 | $ | 12,604,439 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Noninterest-bearing | $ | 2,858,455 | $ | 2,586,743 | |||||||
Interest-bearing | 8,514,863 | 8,422,036 | |||||||||
Total deposits | 11,373,318 | 11,008,779 | |||||||||
Securities sold under agreements to repurchase | 80,355 | 65,506 | |||||||||
FHLB advances and other borrowings | 120,000 | 195,000 | |||||||||
Subordinated debentures and subordinated notes payable | 108,866 | 108,832 | |||||||||
Accrued expenses and other liabilities | 63,343 | 63,389 | |||||||||
Total liabilities | 11,745,882 | 11,441,506 | |||||||||
Stockholders’ equity | |||||||||||
Common stock, $0.01 par value, authorized 500,000,000 shares; 55,105,105 shares issued and outstanding at December 31, 2020 and 55,014,189 shares issued and outstanding at September 30, 2020
|
550 | 550 | |||||||||
Additional paid-in capital | 1,184,281 | 1,183,647 | |||||||||
Retained earnings | (148,769) | (57,169) | |||||||||
Accumulated other comprehensive income | 32,439 | 35,905 | |||||||||
Total stockholders' equity | 1,068,501 | 1,162,933 | |||||||||
Total liabilities and stockholders' equity | $ | 12,814,383 | $ | 12,604,439 | |||||||
1 Prior to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, on October 1, 2020, this line represented the allowance for loan and lease losses under the incurred loss model.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Loans | $ | 107,323 | $ | 119,431 | |||||||||||||||||||
Investment securities | 8,119 | 11,498 | |||||||||||||||||||||
Federal funds sold and other | 155 | 608 | |||||||||||||||||||||
Total interest income | 115,597 | 131,537 | |||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Deposits | 5,992 | 21,940 | |||||||||||||||||||||
FHLB advances and other borrowings | 880 | 3,113 | |||||||||||||||||||||
Subordinated debentures and subordinated notes payable | 817 | 1,311 | |||||||||||||||||||||
Total interest expense | 7,689 | 26,364 | |||||||||||||||||||||
Net interest income | 107,908 | 105,173 | |||||||||||||||||||||
Provision for credit losses ¹ | 11,899 | 8,103 | |||||||||||||||||||||
Net interest income after provision for credit losses | 96,009 | 97,070 | |||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Service charges and other fees | 9,624 | 11,409 | |||||||||||||||||||||
Wealth management fees | 3,029 | 2,964 | |||||||||||||||||||||
Mortgage banking income, net | 4,090 | 1,612 | |||||||||||||||||||||
Net gain on sale of securities and other assets | 248 | — | |||||||||||||||||||||
Derivative interest expense | (3,393) | (890) | |||||||||||||||||||||
Change in fair value of FVO loans and related derivatives | (1,672) | (2,124) | |||||||||||||||||||||
Other derivative income | 898 | 1,597 | |||||||||||||||||||||
Other | 1,324 | 1,165 | |||||||||||||||||||||
Total noninterest income | 14,148 | 15,733 | |||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||
Salaries and employee benefits | 37,554 | 35,905 | |||||||||||||||||||||
Data processing and communication | 6,226 | 5,773 | |||||||||||||||||||||
Occupancy and equipment | 5,213 | 5,093 | |||||||||||||||||||||
Professional fees | 3,915 | 3,764 | |||||||||||||||||||||
Advertising | 556 | 865 | |||||||||||||||||||||
Net loss on repossessed property and other related expenses | 345 | 342 | |||||||||||||||||||||
Other | 3,640 | 5,188 | |||||||||||||||||||||
Total noninterest expense | 57,449 | 56,930 | |||||||||||||||||||||
Income before income taxes | 52,708 | 55,873 | |||||||||||||||||||||
Provision for income taxes | 11,389 | 12,599 | |||||||||||||||||||||
Net income | $ | 41,319 | $ | 43,274 | |||||||||||||||||||
Basic earnings per common share | |||||||||||||||||||||||
Weighted average common shares outstanding | 55,119,909 | 56,377,631 | |||||||||||||||||||||
Basic earnings per share | $ | 0.75 | $ | 0.77 | |||||||||||||||||||
Diluted earnings per common share | |||||||||||||||||||||||
Weighted average diluted common shares outstanding | 55,247,343 | 56,457,967 | |||||||||||||||||||||
Diluted earnings per share | $ | 0.75 | $ | 0.77 | |||||||||||||||||||
Dividends per share | |||||||||||||||||||||||
Dividends paid | $ | 550 | $ | 16,885 | |||||||||||||||||||
Dividends per share | $ | 0.01 | $ | 0.30 | |||||||||||||||||||
1 For the three months ended December 31, 2020, this line includes a $(0.1) million (reversal of) provision for unfunded commitments reserve. For the three months ended December 31, 2019, provision for unfunded commitments reserve of $0.2 million was recorded in other noninterest expense in the consolidated income statement.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Net income | $ | 41,319 | $ | 43,274 | |||||||||||||||||||
Other comprehensive loss, net of tax | |||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||
Net unrealized holding loss arising during the period | (4,352) | (8,160) | |||||||||||||||||||||
Reclassification adjustment for net gain realized in net income | (248) | — | |||||||||||||||||||||
Income tax benefit | 1,134 | 2,010 | |||||||||||||||||||||
Other comprehensive loss, net of tax | (3,466) | (6,150) | |||||||||||||||||||||
Comprehensive income | $ | 37,853 | $ | 37,124 | |||||||||||||||||||
Comprehensive Income (Loss) | Common Stock Par Value |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated Other Comprehensive Income | Total | ||||||||||||||||||||||||||||||
Balance, October 1, 2019 | $ | 563 | $ | 1,228,714 | $ | 657,475 | $ | 13,497 | $ | 1,900,249 | |||||||||||||||||||||||||
Net income | $ | 43,274 | — | — | 43,274 | — | 43,274 | ||||||||||||||||||||||||||||
Other comprehensive (loss), net of tax | (6,150) | — | — | — | (6,150) | (6,150) | |||||||||||||||||||||||||||||
Total comprehensive income | $ | 37,124 | |||||||||||||||||||||||||||||||||
Cumulative effect adjustment related to ASU adoption ¹ | — | — | (182) | — | (182) | ||||||||||||||||||||||||||||||
Stock-based compensation, net of tax | — | 363 | — | — | 363 | ||||||||||||||||||||||||||||||
Cash dividends: | |||||||||||||||||||||||||||||||||||
Common stock, $0.30 per share
|
— | — | (16,885) | — | (16,885) | ||||||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | 563 | $ | 1,229,077 | $ | 683,682 | $ | 7,347 | $ | 1,920,669 | |||||||||||||||||||||||||
Balance, October 1, 2020 | $ | 550 | $ | 1,183,647 | $ | (57,169) | $ | 35,905 | $ | 1,162,933 | |||||||||||||||||||||||||
Net income | $ | 41,319 | — | — | 41,319 | — | 41,319 | ||||||||||||||||||||||||||||
Other comprehensive (loss), net of tax | (3,466) | — | — | — | (3,466) | (3,466) | |||||||||||||||||||||||||||||
Total comprehensive income | $ | 37,853 | |||||||||||||||||||||||||||||||||
Cumulative effect adjustment related to ASU adoption ² | — | — | (132,919) | — | (132,919) | ||||||||||||||||||||||||||||||
Stock-based compensation, net of tax | — | 1,184 | — | — | 1,184 | ||||||||||||||||||||||||||||||
Cash dividends: | |||||||||||||||||||||||||||||||||||
Common stock, $0.01 per share
|
— | (550) | — | — | (550) | ||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 550 | $ | 1,184,281 | $ | (148,769) | $ | 32,439 | $ | 1,068,501 | |||||||||||||||||||||||||
¹ Cumulative effect adjustment related to the Company's adoption of ASU 2016-02 and subsequent related ASUs on October 1, 2019.
|
|||||||||||||||||||||||||||||||||||
2 Cumulative effect adjustment related to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, on October 1, 2020. For additional information, see Note 2, "New Accounting Pronouncements".
|
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities | |||||||||||
Net income | $ | 41,319 | $ | 43,274 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 4,778 | 3,947 | |||||||||
Amortization of FDIC indemnification asset | — | 251 | |||||||||
Net gain on sale of other assets | (605) | — | |||||||||
Net gain on sale of loans | (4,330) | (1,814) | |||||||||
Provision for credit losses ¹ | 11,899 | 8,103 | |||||||||
Provision for loan servicing rights loss | — | 1 | |||||||||
Stock-based compensation | 1,184 | 363 | |||||||||
Originations of residential real estate loans held for sale | (132,118) | (105,185) | |||||||||
Proceeds from sales of residential real estate loans held for sale | 137,182 | 108,816 | |||||||||
Proceeds from sale of other assets | 348 | — | |||||||||
Net deferred income taxes | 11 | (6,626) | |||||||||
Changes in: | |||||||||||
Accrued interest receivable | 7,060 | 3,722 | |||||||||
Other assets | 21,358 | (71) | |||||||||
Accrued interest payable and other liabilities | 510 | 23,674 | |||||||||
Net cash provided by operating activities | 88,596 | 78,455 | |||||||||
Investing activities | |||||||||||
Purchase of securities available for sale | (487,816) | (247,934) | |||||||||
Proceeds from sales of securities available for sale | — | — | |||||||||
Proceeds from maturities of securities available for sale | 195,585 | 117,333 | |||||||||
Net decrease in loans | 528,843 | 65,253 | |||||||||
Payment of covered losses from FDIC indemnification claims | — | (4) | |||||||||
Purchase of premises and equipment | (2,110) | (2,033) | |||||||||
Proceeds from sale of repossessed property | 2,313 | 4,569 | |||||||||
Purchase of FHLB stock | (10) | (29,687) | |||||||||
Proceeds from redemption of FHLB stock | 127 | 20,342 | |||||||||
Net cash paid in business acquisition | — | (4,711) | |||||||||
Net cash provided by (used in) investing activities | 236,932 | (76,872) | |||||||||
Financing activities | |||||||||||
Net increase (decrease) in deposits | 364,561 | (211,780) | |||||||||
Net increase (decrease) in securities sold under agreements to repurchase and other short-term borrowings | 14,849 | (2,703) | |||||||||
Proceeds from FHLB advances and other long-term borrowings | — | 250,000 | |||||||||
Repayments on FHLB advances and other long-term borrowings | (75,000) | (15,000) | |||||||||
Taxes paid related to net share settlement of equity awards | (479) | (1,268) | |||||||||
Dividends paid | (550) | (16,885) | |||||||||
Net cash provided by financing activities | 303,381 | 2,364 | |||||||||
Net increase in cash and cash equivalents | 628,909 | 3,947 | |||||||||
Cash and cash equivalents, beginning of period | 432,887 | 243,474 | |||||||||
Cash and cash equivalents, end of period | $ | 1,061,796 | $ | 247,421 | |||||||
Supplemental disclosure of cash flow information | |||||||||||
Cash payments for interest | $ | 8,741 | $ | 26,959 | |||||||
Cash (receipts from) payments for income taxes | $ | (47) | $ | 232 | |||||||
Supplemental disclosure of noncash investing and financing activities | |||||||||||
Loans transferred to repossessed properties | $ | — | $ | (7,295) | |||||||
1 For the three months ended December 31, 2020, this line includes a $0.1 million (reversal of) provision for unfunded commitments reserve.
|
Credit Quality
Risk Rating Effective After October 1, 2020 |
Credit Quality Indicators | ||||
Pass | Commercial loans within this category are not adversely rated, current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes there is a low likelihood of loss related to loans in this category. | ||||
Special Mention | Commercial loans within this category have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company's credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant an adverse classification. | ||||
Substandard | Commercial loans within this category are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loans in this category are assigned a workout loan officer to closely monitor the relationship. | ||||
Doubtful | Commercial loans within this category are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future. |
Reported Balance September 30,
2020 |
Reclassifications ¹ | Unamortized Discounts, Unearned Net Deferred Fees and Net Loans in Process Included in Amortized Cost ² |
Adjusted Balance September 30,
2020 |
Adoption of ASU 2016-13, as amended ³ | Adjusted Balance October 1, 2020 | ||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Construction and development | n/a ⁴ | $ | 512,539 | $ | (2,895) | $ | 509,644 | $ | — | $ | 509,644 | ||||||||||||||||||||||||
Owner-occupied CRE | n/a ⁴ | 1,420,061 | (2,667) | 1,417,394 | 36 | 1,417,430 | |||||||||||||||||||||||||||||
Non-owner-occupied CRE | n/a ⁴ | 2,902,612 | (8,232) | 2,894,380 | 1,497 | 2,895,877 | |||||||||||||||||||||||||||||
Multifamily residential real estate | n/a ⁴ | 536,828 | (2,845) | 533,983 | (8) | 533,975 | |||||||||||||||||||||||||||||
Total commercial real estate | 5,274,941 | (5,274,941) | — | — | — | — | |||||||||||||||||||||||||||||
Agriculture | 1,724,350 | — | (1,654) | 1,722,696 | 55 | 1,722,751 | |||||||||||||||||||||||||||||
Commercial non-real estate | 2,181,656 | — | (16,618) | 2,165,038 | (85) | 2,164,953 | |||||||||||||||||||||||||||||
Residential real estate | 830,102 | (97,099) | (2,191) | 730,812 | 23 | 730,835 | |||||||||||||||||||||||||||||
Consumer and other | — | 100,553 | 1,642 | 102,195 | (20) | 102,175 | |||||||||||||||||||||||||||||
Consumer | 63,206 | (63,206) | — | — | — | — | |||||||||||||||||||||||||||||
Other | 37,347 | (37,347) | — | — | — | — | |||||||||||||||||||||||||||||
Ending balance | 10,111,602 | — | (35,460) | 10,076,142 | 1,498 | 10,077,640 | |||||||||||||||||||||||||||||
Less: Unamortized discount
on acquired loans |
(8,215) | — | 8,215 | — | — | — | |||||||||||||||||||||||||||||
Unearned net deferred fees and
costs and net loans in process |
(27,245) | — | 27,245 | — | — | — | |||||||||||||||||||||||||||||
Total | $ | 10,076,142 | $ | — | $ | — | $ | 10,076,142 | $ | 1,498 | $ | 10,077,640 | |||||||||||||||||||||||
Allowance: | |||||||||||||||||||||||||||||||||||
Construction and development | n/a ⁴ | $ | (7,012) | $ | — | $ | (7,012) | $ | (11,963) | $ | (18,975) | ||||||||||||||||||||||||
Owner-occupied CRE | n/a ⁴ | (20,530) | — | (20,530) | (4,298) | (24,828) | |||||||||||||||||||||||||||||
Non-owner-occupied CRE | n/a ⁴ | (50,965) | — | (50,965) | (98,986) | (149,951) | |||||||||||||||||||||||||||||
Multifamily residential real estate | n/a ⁴ | (6,726) | — | (6,726) | (2,681) | (9,407) | |||||||||||||||||||||||||||||
Total commercial real estate | (84,496) | 84,496 | — | — | — | — | |||||||||||||||||||||||||||||
Agriculture | (27,018) | — | — | (27,018) | (24,360) | (51,378) | |||||||||||||||||||||||||||||
Commercial non-real estate | (27,599) | — | — | (27,599) | (32,938) | (60,537) | |||||||||||||||||||||||||||||
Residential real estate | (8,202) | 737 | — | (7,465) | (2,595) | (10,060) | |||||||||||||||||||||||||||||
Consumer and other | (2,572) | — | — | (2,572) | 532 | (2,040) | |||||||||||||||||||||||||||||
Total | $ | (149,887) | $ | — | $ | — | $ | (149,887) | $ | (177,289) | $ | (327,176) | |||||||||||||||||||||||
1 Reclassifications made from reported loan and related allowance segments to align with the eight loan portfolio segments established for adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, to estimate credit losses.
|
|||||||||||||||||||||||||||||||||||
2 Unamortized discount on acquired loans, unearned net deferred fees and costs and net loans in process to related were assigned to appropriate loan portfolio segment to present loan categories at amortized cost.
|
|||||||||||||||||||||||||||||||||||
3 Discounts on previously acquired loans and Day 1 impact of adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, were transferred to allowance for credit losses as a part of CECL adoption.
|
|||||||||||||||||||||||||||||||||||
4 Balance for this segment is included in total commercial real estate for September 30, 2020.
|
Amortized
Cost |
Gross Unrealized Gains | Gross Unrealized Losses |
Estimated
Fair Value |
||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||
U.S. Treasury securities | $ | 24,991 | $ | 23 | $ | — | $ | 25,014 | |||||||||||||||
U.S. Agency securities | 24,975 | — | (272) | 24,703 | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Government National Mortgage Association | 424,756 | 10,220 | (102) | 434,874 | |||||||||||||||||||
Federal Home Loan Mortgage Corporation | 769,254 | 17,187 | (65) | 786,376 | |||||||||||||||||||
Federal National Mortgage Association | 455,651 | 7,301 | (206) | 462,746 | |||||||||||||||||||
Small Business Assistance Program | 264,798 | 7,829 | (192) | 272,435 | |||||||||||||||||||
States and political subdivision securities | 51,120 | 1,297 | — | 52,417 | |||||||||||||||||||
Other | 1,006 | 44 | — | 1,050 | |||||||||||||||||||
Total | $ | 2,016,551 | $ | 43,901 | $ | (837) | $ | 2,059,615 |
Amortized
Cost |
Gross Unrealized Gains | Gross Unrealized Losses |
Estimated
Fair Value |
||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||||||
U.S. Treasury securities | $ | 49,924 | $ | 228 | $ | — | $ | 50,152 | |||||||||||||||
U.S. Agency securities | 24,974 | 86 | — | 25,060 | |||||||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
Government National Mortgage Association | 485,689 | 11,481 | (43) | 497,127 | |||||||||||||||||||
Federal Home Loan Mortgage Corporation | 578,650 | 18,919 | (9) | 597,560 | |||||||||||||||||||
Federal National Mortgage Association | 287,842 | 7,788 | (16) | 295,614 | |||||||||||||||||||
Small Business Assistance Program | 244,653 | 7,884 | (58) | 252,479 | |||||||||||||||||||
States and political subdivision securities | 54,224 | 1,356 | — | 55,580 | |||||||||||||||||||
Other | 1,006 | 48 | — | 1,054 | |||||||||||||||||||
Total | $ | 1,726,962 | $ | 47,790 | $ | (126) | $ | 1,774,626 |
December 31, 2020 | September 30, 2020 | ||||||||||||||||
Amortized
Cost |
Estimated
Fair Value |
Amortized
Cost |
Estimated
Fair Value |
||||||||||||||
(dollars in thousands) | |||||||||||||||||
Due in one year or less | $ | 42,973 | $ | 43,103 | $ | 67,131 | $ | 67,456 | |||||||||
Due after one year through five years | 48,047 | 48,499 | 51,779 | 52,694 | |||||||||||||
Due after five years through ten years | 10,066 | 10,532 | 10,212 | 10,642 | |||||||||||||
Due after ten years | — | — | — | — | |||||||||||||
101,086 | 102,134 | 129,122 | 130,792 | ||||||||||||||
Mortgage-backed securities | 1,914,459 | 1,956,431 | 1,596,834 | 1,642,780 | |||||||||||||
Securities without contractual maturities | 1,006 | 1,050 | 1,006 | 1,054 | |||||||||||||
Total | $ | 2,016,551 | $ | 2,059,615 | $ | 1,726,962 | $ | 1,774,626 |
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||
Estimated
Fair Value |
Unrealized
Losses |
Estimated
Fair Value |
Unrealized
Losses |
Estimated
Fair Value |
Unrealized
Losses |
|||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
As of December 31, 2020 | ||||||||||||||||||||||||||
U.S. Agency securities | $ | 24,703 | $ | (272) | $ | — | $ | — | $ | 24,703 | $ | (272) | ||||||||||||||
Mortgage-backed securities | 146,799 | (553) | 8,388 | (12) | 155,187 | (565) | ||||||||||||||||||||
Total | $ | 171,502 | $ | (825) | $ | 8,388 | $ | (12) | $ | 179,890 | $ | (837) |
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||
Estimated
Fair Value |
Unrealized
Losses |
Estimated
Fair Value |
Unrealized
Losses |
Estimated
Fair Value |
Unrealized
Losses |
|||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||||||||
U.S. Agency securities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Mortgage-backed securities | 71,547 | (103) | 27,897 | (23) | 99,444 | (126) | ||||||||||||||||||||
Total | $ | 71,547 | $ | (103) | $ | 27,897 | $ | (23) | $ | 99,444 | $ | (126) |
As of December 31, 2020 | Current or Less Than 30 Days Past Due | 30-89 Days Past Due | Nonaccrual | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Construction and development | $ | 468,025 | $ | 180 | $ | 14,257 | $ | 482,462 | |||||||||||||||||||||
Owner-occupied CRE | 1,286,830 | 411 | 16,776 | 1,304,017 | |||||||||||||||||||||||||
Non-owner-occupied CRE | 2,346,904 | 16,097 | 36,765 | 2,399,766 | |||||||||||||||||||||||||
Multifamily residential real estate | 472,675 | 439 | — | 473,114 | |||||||||||||||||||||||||
Total commercial real estate | 4,574,434 | 17,127 | 67,798 | 4,659,359 | |||||||||||||||||||||||||
Agriculture | 1,322,075 | 12,319 | 185,633 | 1,520,027 | |||||||||||||||||||||||||
Commercial non-real estate | 1,909,610 | 3,210 | 17,497 | 1,930,317 | |||||||||||||||||||||||||
Residential real estate | 698,146 | 3,166 | 6,774 | 708,086 | |||||||||||||||||||||||||
Consumer and other | 88,228 | 152 | 70 | 88,450 | |||||||||||||||||||||||||
Total | $ | 8,592,493 | $ | 35,974 | $ | 277,772 | $ | 8,906,239 |
Current or Less Than 30 Days Past Due | 30-89 Days Past Due | Nonaccrual | Total | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||||||
Commercial real estate | $ | 4,790,963 | $ | 8,894 | $ | 73,146 | $ | 4,873,003 | |||||||||||||||
Agriculture | 1,317,377 | 60,020 | 217,642 | 1,595,039 | |||||||||||||||||||
Commercial non-real estate | 2,021,308 | 3,512 | 26,843 | 2,051,663 | |||||||||||||||||||
Residential real estate | 821,154 | 2,459 | 4,441 | 828,054 | |||||||||||||||||||
Consumer and other | 100,319 | 45 | 74 | 100,438 | |||||||||||||||||||
Ending balance | $ | 9,051,121 | $ | 74,930 | $ | 322,146 | $ | 9,448,197 |
Term loans | |||||||||||||||||||||||||||||
Fiscal Year to Date | Fiscal Year | ||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | Revolving Loans |
Revolving Loans
Converted to Term Loans |
Total | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Construction and development | |||||||||||||||||||||||||||||
Pass | $ | 86,339 | $ | 160,884 | $ | 108,053 | $ | 30,830 | $ | 2,570 | $ | 824 | $ | 63,584 | $ | — | $ | 453,084 | |||||||||||
Special Mention | 3,686 | — | 200 | — | — | — | — | — | 3,886 | ||||||||||||||||||||
Substandard | 11,322 | 33 | — | 12,746 | — | — | 1,364 | — | 25,465 | ||||||||||||||||||||
Doubtful | — | — | 27 | — | — | — | — | — | 27 | ||||||||||||||||||||
Total construction and development | $ | 101,347 | $ | 160,917 | $ | 108,280 | $ | 43,576 | $ | 2,570 | $ | 824 | $ | 64,948 | $ | — | $ | 482,462 | |||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Pass | $ | 104,322 | $ | 372,920 | $ | 227,194 | $ | 117,287 | $ | 164,280 | $ | 185,366 | $ | 51,397 | $ | 59 | $ | 1,222,825 | |||||||||||
Special Mention | 465 | 1,853 | 2,170 | 6,651 | 8,481 | 8,032 | 332 | — | 27,984 | ||||||||||||||||||||
Substandard | 4,358 | 4,609 | 4,643 | 18,257 | 11,704 | 6,447 | — | — | 50,018 | ||||||||||||||||||||
Doubtful | — | — | 3,190 | — | — | — | — | — | 3,190 | ||||||||||||||||||||
Total owner-occupied CRE | $ | 109,145 | $ | 379,382 | $ | 237,197 | $ | 142,195 | $ | 184,465 | $ | 199,845 | $ | 51,729 | $ | 59 | $ | 1,304,017 | |||||||||||
Non-owner-occupied CRE | |||||||||||||||||||||||||||||
Pass | $ | 161,105 | $ | 423,025 | $ | 360,220 | $ | 348,757 | $ | 382,487 | $ | 334,667 | $ | 44,898 | $ | — | $ | 2,055,159 | |||||||||||
Special Mention | 18,991 | 1,555 | 35,322 | 77,164 | 15,448 | 16,874 | — | — | 165,354 | ||||||||||||||||||||
Substandard | 14,418 | 64,261 | 15,527 | 41,830 | — | 7,758 | 35,459 | — | 179,253 | ||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Total non-owner-occupied CRE | $ | 194,514 | $ | 488,841 | $ | 411,069 | $ | 467,751 | $ | 397,935 | $ | 359,299 | $ | 80,357 | $ | — | $ | 2,399,766 | |||||||||||
Multifamily residential real estate | |||||||||||||||||||||||||||||
Pass | $ | 72,043 | $ | 100,793 | $ | 102,328 | $ | 71,541 | $ | 16,889 | $ | 56,216 | $ | 248 | $ | — | $ | 420,058 | |||||||||||
Special Mention | 256 | — | 2,629 | 20,686 | 46 | 107 | 21,200 | — | 44,924 | ||||||||||||||||||||
Substandard | — | 7,311 | — | — | 487 | 334 | — | — | 8,132 | ||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Total multifamily residential real estate | $ | 72,299 | $ | 108,104 | $ | 104,957 | $ | 92,227 | $ | 17,422 | $ | 56,657 | $ | 21,448 | $ | — | $ | 473,114 | |||||||||||
Total commercial real estate | |||||||||||||||||||||||||||||
Pass | $ | 423,809 | $ | 1,057,622 | $ | 797,795 | $ | 568,415 | $ | 566,226 | $ | 577,073 | $ | 160,127 | $ | 59 | $ | 4,151,126 | |||||||||||
Special Mention | 23,398 | 3,408 | 40,321 | 104,501 | 23,975 | 25,013 | 21,532 | — | 242,148 | ||||||||||||||||||||
Substandard | 30,098 | 76,214 | 20,170 | 72,833 | 12,191 | 14,539 | 36,823 | — | 262,868 | ||||||||||||||||||||
Doubtful | — | — | 3,217 | — | — | — | — | — | 3,217 | ||||||||||||||||||||
Total commercial real estate | $ | 477,305 | $ | 1,137,244 | $ | 861,503 | $ | 745,749 | $ | 602,392 | $ | 616,625 | $ | 218,482 | $ | 59 | $ | 4,659,359 |
Term loans | |||||||||||||||||||||||||||||
Fiscal Year to Date | Fiscal Year | ||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | Revolving Loans |
Revolving Loans
Converted to Term Loans |
Total | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Agriculture | |||||||||||||||||||||||||||||
Pass | $ | 56,160 | $ | 222,029 | $ | 105,591 | $ | 85,249 | $ | 82,726 | $ | 62,253 | $ | 460,060 | $ | — | $ | 1,074,068 | |||||||||||
Special Mention | 21,040 | 29,166 | 7,402 | 13,400 | 23,817 | 4,511 | 49,451 | — | 148,787 | ||||||||||||||||||||
Substandard | 11,412 | 36,842 | 15,034 | 41,653 | 39,723 | 8,121 | 114,838 | — | 267,623 | ||||||||||||||||||||
Doubtful | 1,595 | 49 | 754 | 22,230 | 1,446 | — | 3,475 | — | 29,549 | ||||||||||||||||||||
Total agriculture | $ | 90,207 | $ | 288,086 | $ | 128,781 | $ | 162,532 | $ | 147,712 | $ | 74,885 | $ | 627,824 | $ | — | $ | 1,520,027 | |||||||||||
Commercial non-real estate | |||||||||||||||||||||||||||||
Pass | $ | 28,084 | $ | 827,457 | $ | 195,666 | $ | 63,526 | $ | 52,661 | $ | 43,956 | $ | 573,735 | $ | 8 | $ | 1,785,093 | |||||||||||
Special Mention | 6,500 | 21,521 | 2,812 | 1,714 | 2,576 | 864 | 19,391 | — | 55,378 | ||||||||||||||||||||
Substandard | 7,950 | 20,120 | 12,992 | 4,561 | 255 | 1,395 | 32,619 | — | 79,892 | ||||||||||||||||||||
Doubtful | — | 390 | 52 | 84 | — | 4,269 | 5,159 | — | 9,954 | ||||||||||||||||||||
Total commercial non-real estate | $ | 42,534 | $ | 869,488 | $ | 211,522 | $ | 69,885 | $ | 55,492 | $ | 50,484 | $ | 630,904 | $ | 8 | $ | 1,930,317 | |||||||||||
Residential real estate ¹ | |||||||||||||||||||||||||||||
Pass | $ | 48,697 | $ | 213,698 | $ | 86,203 | $ | 52,442 | $ | 31,231 | $ | 119,770 | $ | 138,017 | $ | 282 | $ | 690,340 | |||||||||||
Special Mention | 297 | 825 | 341 | 303 | 304 | 998 | 220 | — | 3,288 | ||||||||||||||||||||
Substandard | 279 | 1,545 | 2,828 | 1,363 | 421 | 6,083 | 1,937 | — | 14,456 | ||||||||||||||||||||
Doubtful | — | — | — | — | — | 2 | — | — | 2 | ||||||||||||||||||||
Total residential real estate | $ | 49,273 | $ | 216,068 | $ | 89,372 | $ | 54,108 | $ | 31,956 | $ | 126,853 | $ | 140,174 | $ | 282 | $ | 708,086 | |||||||||||
Consumer and other ¹ | |||||||||||||||||||||||||||||
Pass | $ | 31,451 | $ | 22,536 | $ | 16,856 | $ | 2,898 | $ | 1,220 | $ | 1,370 | $ | 12,058 | $ | — | $ | 88,389 | |||||||||||
Special Mention | 9 | — | — | — | — | 12 | 3 | — | 24 | ||||||||||||||||||||
Substandard | 6 | 6 | 18 | 2 | 10 | 8 | 35 | — | 85 | ||||||||||||||||||||
Doubtful | — | — | — | 1 | — | — | — | — | 1 | ||||||||||||||||||||
Total consumer and other | $ | 31,466 | $ | 22,542 | $ | 16,874 | $ | 2,901 | $ | 1,230 | $ | 1,390 | $ | 12,096 | $ | — | $ | 88,499 | |||||||||||
Total loans | |||||||||||||||||||||||||||||
Pass | $ | 588,201 | $ | 2,343,342 | $ | 1,202,111 | $ | 772,530 | $ | 734,064 | $ | 804,422 | $ | 1,343,997 | $ | 349 | $ | 7,789,016 | |||||||||||
Special Mention | 51,244 | 54,920 | 50,876 | 119,918 | 50,672 | 31,398 | 90,597 | — | 449,625 | ||||||||||||||||||||
Substandard | 49,745 | 134,727 | 51,042 | 120,412 | 52,600 | 30,146 | 186,252 | — | 624,924 | ||||||||||||||||||||
Doubtful | 1,595 | 439 | 4,023 | 22,315 | 1,446 | 4,271 | 8,634 | — | 42,723 | ||||||||||||||||||||
Total loans | $ | 690,785 | $ | 2,533,428 | $ | 1,308,052 | $ | 1,035,175 | $ | 838,782 | $ | 870,237 | $ | 1,629,480 | $ | 349 | $ | 8,906,288 | |||||||||||
1 The Company generally does not risk rate residential real estate or consumer and other loans unless a default event such as a bankruptcy or extended nonperformance takes place. Alternatively, standard credit scoring systems are used to assess credit risks of residential real estate and consumer and other loans.
|
September 30, 2020 | |||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance for Credit Losses | |||||||||
Impaired loans: | (dollars in thousands) | ||||||||||
With an allowance for credit losses recorded: | |||||||||||
Commercial real estate | $ | 111,121 | $ | 114,034 | $ | 25,087 | |||||
Agriculture | 53,052 | 55,145 | 8,151 | ||||||||
Commercial non-real estate | 39,821 | 47,571 | 7,822 | ||||||||
Residential real estate | 5,670 | 6,314 | 1,903 | ||||||||
Consumer and other | 98 | 109 | 30 | ||||||||
Total impaired loans with an allowance for credit losses recorded | 209,762 | 223,173 | 42,993 | ||||||||
With no allowance for credit losses recorded: | |||||||||||
Commercial real estate | 121,380 | 161,211 | — | ||||||||
Agriculture | 308,734 | 332,272 | — | ||||||||
Commercial non-real estate | 66,542 | 75,365 | — | ||||||||
Residential real estate | 6,543 | 8,818 | — | ||||||||
Consumer and other | — | 108 | — | ||||||||
Total impaired loans with no allowance for credit losses recorded | 503,199 | 577,774 | — | ||||||||
Total impaired loans | $ | 712,961 | $ | 800,947 | $ | 42,993 |
Three Months Ended December 31, 2019 | ||||||||
Average Recorded Investment | Interest Income Recognized While on Impaired Status | |||||||
(dollars in thousands) | ||||||||
Commercial real estate | $ | 73,422 | $ | 2,379 | ||||
Agriculture | 360,397 | 8,517 | ||||||
Commercial non-real estate | 72,389 | 2,870 | ||||||
Residential real estate | 9,013 | 266 | ||||||
Consumer | 179 | 1 | ||||||
Total | $ | 515,400 | $ | 14,033 |
Three Months Ended December 31, 2019 | |||||
(dollars in thousands) | |||||
Balance, beginning of period | $ | 26,047 | |||
Accretion | (1,940) | ||||
Reclassification (to) from nonaccretable difference | (2,977) | ||||
Balance, end of period | $ | 21,130 |
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Recorded Investment | Recorded Investment | ||||||||||||||||||||||
Number | Pre-Modification | Post-Modification | Number | Pre-Modification | Post-Modification | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Construction and development | — | $ | — | $ | — | n/a ¹ | n/a ¹ | n/a ¹ | |||||||||||||||
Owner-occupied CRE | — | — | — | n/a ¹ | n/a ¹ | n/a ¹ | |||||||||||||||||
Non-owner-occupied CRE | — | — | — | n/a ¹ | n/a ¹ | n/a ¹ | |||||||||||||||||
Multifamily residential real estate | — | — | — | n/a ¹ | n/a ¹ | n/a ¹ | |||||||||||||||||
Total commercial real estate | — | — | — | 1 | 2,216 | 2,216 | |||||||||||||||||
Agriculture | 3 | 2,776 | 2,776 | 10 | 1,455 | 1,455 | |||||||||||||||||
Commercial non-real estate | 1 | 748 | 748 | 2 | 830 | 830 | |||||||||||||||||
Residential real estate | — | — | — | — | — | — | |||||||||||||||||
Consumer and other | — | — | — | — | — | — | |||||||||||||||||
Total nonaccruing | 4 | $ | 3,524 | $ | 3,524 | 13 | $ | 4,501 | $ | 4,501 | |||||||||||||
Change in recorded investment due to principal paydown at time of modification | — | $ | — | $ | — | — | $ | — | $ | — | |||||||||||||
Change in recorded investment due to chargeoffs at time of modification | — | — | — | — | — | — | |||||||||||||||||
1 Balance for this segment is included in total commercial real estate for September 30, 2020.
|
Three Months Ended December 31, 2020 | Adjusted balance September 30, 2020 ¹ | Adoption of ASU 2016-13, as amended | Adjusted beginning balance, October 1, 2020 | Charge-offs | Recoveries | (Reversal of) provision for credit losses on loans | Ending balance, December 31, 2020 | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Construction and development | $ | 7,012 | $ | 11,963 | $ | 18,975 | $ | (27) | $ | 268 | $ | (502) | $ | 18,714 | |||||||||||||||||||||||||||
Owner-occupied CRE | 20,530 | 4,298 | 24,828 | — | — | 258 | 25,086 | ||||||||||||||||||||||||||||||||||
Non-owner-occupied CRE | 50,965 | 98,986 | 149,951 | (28,269) | 61 | (992) | 120,751 | ||||||||||||||||||||||||||||||||||
Multifamily residential real estate | 6,726 | 2,681 | 9,407 | — | — | 366 | 9,773 | ||||||||||||||||||||||||||||||||||
Total commercial real estate | 85,233 | 117,928 | 203,161 | (28,296) | 329 | (870) | 174,324 | ||||||||||||||||||||||||||||||||||
Agriculture | 27,018 | 24,360 | 51,378 | (2,144) | 1,734 | (3,989) | 46,979 | ||||||||||||||||||||||||||||||||||
Commercial non-real estate | 27,599 | 32,938 | 60,537 | (2,043) | 245 | 17,216 | 75,955 | ||||||||||||||||||||||||||||||||||
Residential real estate | 7,465 | 2,595 | 10,060 | (96) | 32 | (324) | 9,672 | ||||||||||||||||||||||||||||||||||
Consumer and other | 2,572 | (532) | 2,040 | (232) | 113 | (57) | 1,864 | ||||||||||||||||||||||||||||||||||
Total | $ | 149,887 | $ | 177,289 | $ | 327,176 | $ | (32,811) | $ | 2,453 | $ | 11,976 | $ | 308,794 | |||||||||||||||||||||||||||
1 At September 30, 2020, the allowance balances were reclassified to align with the eight loan portfolio segments established for adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs. For additional information, see Note 2.
|
Three Months Ended December 31, 2019 | Beginning balance, October 1, 2019 | Charge-offs | Recoveries | Provision for credit losses on loans | Impairment (improvement) of ASC 310-30 loans | Ending balance, December 31, 2019 | |||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 16,827 | $ | (37) | $ | 120 | $ | 572 | $ | (20) | $ | 17,462 | |||||||||||||||||||||||
Agriculture | 30,819 | (4,606) | 103 | 5,978 | (265) | 32,029 | |||||||||||||||||||||||||||||
Commercial non-real estate | 17,567 | (1,481) | 112 | 1,191 | — | 17,389 | |||||||||||||||||||||||||||||
Residential real estate | 4,095 | (169) | 164 | 192 | 338 | 4,620 | |||||||||||||||||||||||||||||
Consumer and other | 1,466 | (373) | 71 | 117 | — | 1,281 | |||||||||||||||||||||||||||||
Total | $ | 70,774 | $ | (6,666) | $ | 570 | $ | 8,050 | $ | 53 | $ | 72,781 |
December 31, 2020 | September 30, 2020 | ||||||||||||||||||||||
Notional Amount |
Gross Asset
Fair Value |
Gross Liability
Fair Value |
Notional Amount |
Gross Asset
Fair Value |
Gross Liability
Fair Value |
||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate swaps - FVO loan portfolio | |||||||||||||||||||||||
Financial institution counterparties | $ | 562,359 | $ | — | $ | (54,568) | $ | 592,241 | $ | — | $ | (62,587) | |||||||||||
Interest rate swaps - Other | |||||||||||||||||||||||
Financial institution counterparties | 708,872 | — | (1,516) | 641,189 | — | (1,672) | |||||||||||||||||
Customer counterparties | 708,872 | 74,495 | — | 641,189 | 83,533 | — | |||||||||||||||||
Interest rate caps | |||||||||||||||||||||||
Financial institution counterparties | 26,538 | 2 | — | 20,538 | 2 | — | |||||||||||||||||
Customer counterparties | 26,538 | — | (2) | 20,538 | — | (2) | |||||||||||||||||
Risk participation agreements | 82,111 | — | (22) | 80,681 | — | (32) | |||||||||||||||||
Mortgage loan commitments | 79,738 | 322 | — | 92,278 | — | (96) | |||||||||||||||||
Mortgage loan forward sale contracts | 80,441 | — | (322) | 94,084 | 96 | — | |||||||||||||||||
Total | $ | 2,275,469 | $ | 74,819 | $ | (56,430) | $ | 2,182,738 | $ | 83,631 | $ | (64,389) |
Amount of (Loss) Gain Recognized in Consolidated Statements of Income | ||||||||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||||||||||
Location of (Loss) Gain Recognized in Consolidated Statements of Income | 2020 | 2019 | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||
Interest rate swaps - FVO loan portfolio | Derivative interest expense | $ | (3,393) | $ | (890) | |||||||||||||||||||||
Interest rate swaps - FVO loan portfolio | Change in fair value of FVO loans and related derivatives | 8,570 | 12,809 | |||||||||||||||||||||||
Interest rate swaps and other derivatives | Other derivative income | 898 | 1,597 | |||||||||||||||||||||||
Mortgage loan commitments | Other derivative income | (418) | 28 | |||||||||||||||||||||||
Mortgage loan forward sale contracts | Other derivative income | 418 | (28) |
Core Deposit Intangible | Customer Relationships Intangible |
Other
Intangible |
Total | ||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||||||||
Gross carrying amount | $ | 7,339 | $ | 3,172 | $ | 538 | $ | 11,049 | |||||||||||||||||||||
Accumulated amortization | (4,499) | (305) | (341) | (5,145) | |||||||||||||||||||||||||
Net intangible assets | $ | 2,840 | $ | 2,867 | $ | 197 | $ | 5,904 | |||||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||||||||||||
Gross carrying amount | $ | 7,339 | $ | 3,172 | $ | 538 | $ | 11,049 | |||||||||||||||||||||
Accumulated amortization | (4,316) | (244) | (325) | (4,885) | |||||||||||||||||||||||||
Net intangible assets | $ | 3,023 | $ | 2,928 | $ | 213 | $ | 6,164 |
Fiscal year | Amount | ||||
(dollars in thousands) | |||||
Remaining in 2021 | $ | 754 | |||
2022 | 929 | ||||
2023 | 831 | ||||
2024 | 742 | ||||
2025 | 683 | ||||
2026 and thereafter | 1,965 | ||||
Total | $ | 5,904 |
December 31, 2020 | September 30, 2020 | ||||||||||
(dollars in thousands) | |||||||||||
ROU asset | $ | 21,264 | $ | 22,709 | |||||||
Total lease liability | 22,586 | 24,114 | |||||||||
Weighted average remaining lease term | 6.21 years | 6.29 years | |||||||||
Weighted average discount rate ¹ | 1.82 | % | 1.83 | % | |||||||
1 The Company uses its incremental borrowing rate to calculate the present value of lease payments when the interest rate implicit in the lease is not disclosed.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||||||||
Operating cash flows paid for operating leases | $ | 1,482 | $ | 1,410 | |||||||||||||||||||
Right-of-use assets obtained in exchange for lease liabilities: | |||||||||||||||||||||||
Operating leases | $ | 987 | $ | 624 |
Fiscal year | Amount | ||||
(dollars in thousands) | |||||
Remaining in 2021 | $ | 4,383 | |||
2022 | 4,701 | ||||
2023 | 4,149 | ||||
2024 | 3,410 | ||||
2025 | 2,469 | ||||
2026 and thereafter | 5,395 | ||||
Total undiscounted lease payments | 24,507 | ||||
Less: Amounts representing interest | (1,921) | ||||
Lease liability | $ | 22,586 |
December 31, 2020 | |||||||||||||||||||||||||||||
Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||
Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Repurchase agreements | |||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 80,355 | $ | — | $ | — | $ | — | $ | 80,355 | |||||||||||||||||||
Total repurchase agreements | $ | 80,355 | $ | — | $ | — | $ | — | $ | 80,355 |
September 30, 2020 | |||||||||||||||||||||||||||||
Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||
Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater than 90 Days | Total | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Repurchase agreements | |||||||||||||||||||||||||||||
Mortgage-backed securities | $ | 65,506 | $ | — | $ | — | $ | — | $ | 65,506 | |||||||||||||||||||
Total repurchase agreements | $ | 65,506 | $ | — | $ | — | $ | — | $ | 65,506 |
Fiscal year | Amount | ||||
(dollars in thousands) | |||||
Remaining in 2021 | $ | — | |||
2022 | 30,000 | ||||
2023 | 30,000 | ||||
2024 | 60,000 | ||||
2025 | — | ||||
2026 and thereafter | — | ||||
Total | $ | 120,000 |
December 31, 2020 | September 30, 2020 | ||||||||||||||||
Common
Shares |
Weighted-Average Grant Date Fair Value |
Common
Shares |
Weighted-Average Grant Date Fair Value | ||||||||||||||
Restricted Shares | |||||||||||||||||
Restricted shares, beginning of fiscal year | 249,180 | $ | 32.89 | 190,805 | $ | 37.20 | |||||||||||
Granted | 152,028 | 17.30 | 147,282 | 30.68 | |||||||||||||
Vested | (79,093) | 36.28 | (84,316) | 38.60 | |||||||||||||
Forfeited | (2,017) | 28.89 | (4,591) | 36.18 | |||||||||||||
Canceled | — | — | — | — | |||||||||||||
Restricted shares, end of period | 320,098 | $ | 24.67 | 249,180 | $ | 32.89 | |||||||||||
Vested, but not issuable at end of period | 87,324 | $ | 29.32 | 62,992 | $ | 33.98 | |||||||||||
Performance Shares | |||||||||||||||||
Performance shares, beginning of fiscal year | 175,740 | $ | 33.56 | 173,332 | $ | 38.50 | |||||||||||
Granted | 115,885 | 17.26 | 62,278 | 40.15 | |||||||||||||
Vested | (25,452) | 41.07 | (54,861) | 39.43 | |||||||||||||
Forfeited | (11,904) | 39.04 | (5,009) | 37.90 | |||||||||||||
Canceled | — | — | — | — | |||||||||||||
Performance shares, end of period | 254,269 | $ | 25.12 | 175,740 | $ | 33.56 | |||||||||||
Vested, but not issuable at end of period | 5,612 | $ | 18.00 | 5,612 | $ | 18.00 |
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||
U.S. Treasury securities | $ | 25,014 | $ | 25,014 | $ | — | $ | — | |||||||||||||||
U.S. Agency securities | 24,703 | 24,703 | — | — | |||||||||||||||||||
Mortgage-backed securities | 1,956,431 | — | 1,956,431 | — | |||||||||||||||||||
States and political subdivision securities | 52,417 | — | 48,751 | 3,666 | |||||||||||||||||||
Other | 1,050 | — | 1,050 | — | |||||||||||||||||||
Total securities available for sale | $ | 2,059,615 | $ | 49,717 | $ | 2,006,232 | $ | 3,666 | |||||||||||||||
Derivatives-assets | $ | 88,261 | $ | — | $ | 88,261 | $ | — | |||||||||||||||
Derivatives-liabilities | 324 | — | 324 | — | |||||||||||||||||||
Fair value loans | 611,588 | — | 611,588 | — | |||||||||||||||||||
Loan servicing rights | 1,063 | — | — | 1,063 |
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||||||
U.S. Treasury securities | $ | 50,152 | $ | 50,152 | $ | — | $ | — | |||||||||||||||
U.S. Agency securities | 25,060 | 25,060 | — | — | |||||||||||||||||||
Mortgage-backed securities | 1,642,780 | — | 1,642,780 | — | |||||||||||||||||||
States and political subdivision securities | 55,580 | — | 51,783 | 3,797 | |||||||||||||||||||
Other | 1,054 | — | 1,054 | — | |||||||||||||||||||
Total securities available for sale | $ | 1,774,626 | $ | 75,212 | $ | 1,695,617 | $ | 3,797 | |||||||||||||||
Derivatives-assets | $ | 98,380 | $ | — | $ | 98,380 | $ | — | |||||||||||||||
Derivatives-liabilities | 98 | — | 98 | — | |||||||||||||||||||
Fair value loans | 655,185 | — | 655,185 | — | |||||||||||||||||||
Loan servicing rights | 1,303 | — | — | 1,303 |
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||
Other repossessed property | $ | 8,594 | $ | — | $ | — | $ | 8,594 | |||||||||||||||
Impaired loans | 275,334 | — | — | 275,334 | |||||||||||||||||||
Mortgage loans held for sale, at lower of cost or fair value | 11,638 | — | 11,638 | — | |||||||||||||||||||
Property held for sale | 600 | — | — | 600 | |||||||||||||||||||
As of September 30, 2020 | |||||||||||||||||||||||
Other repossessed property | $ | 17,991 | $ | — | $ | — | $ | 17,991 | |||||||||||||||
Impaired loans | 669,968 | — | — | 669,968 | |||||||||||||||||||
Mortgage loans held for sale, at lower of cost or fair value | 12,371 | — | 12,371 | — | |||||||||||||||||||
Property held for sale | 600 | — | — | 600 |
Fair Value of Assets / (Liabilities) at December 31, 2020 |
Valuation
Technique(s) |
Unobservable
Input |
Range |
Weighted
Average |
|||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
Other repossessed property | $ | 8,594 | Appraisal value | Collateral specific adjustment | N/A | N/A | |||||||||||||||||||||||
Impaired loans | 275,334 | Appraisal value | Collateral specific adjustment | N/A | N/A | ||||||||||||||||||||||||
Property held for sale | 600 | Appraisal value | Collateral specific adjustment | N/A | N/A |
December 31, 2020 | September 30, 2020 | ||||||||||||||||||||||
Level in Fair Value Hierarchy | Carrying Amount |
Fair
Value |
Carrying Amount |
Fair
Value |
|||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 1,061,796 | $ | 1,061,796 | $ | 432,887 | $ | 432,887 | ||||||||||||||
Loans, net, excluding fair valued loans, loans held for sale and impaired loans ¹ | Level 3 | 8,619,316 | 8,623,172 | 8,738,617 | 8,768,314 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Time deposits | Level 2 | 1,078,580 | 1,082,378 | 1,282,978 | 1,287,814 | ||||||||||||||||||
FHLB advances and other borrowings | Level 2 | 120,000 | 129,077 | 195,000 | 204,715 | ||||||||||||||||||
Securities sold under repurchase agreements | Level 2 | 80,355 | 80,355 | 65,506 | 65,506 | ||||||||||||||||||
Subordinated debentures and subordinated notes payable | Level 2 | 108,866 | 93,213 | 108,832 | 96,424 | ||||||||||||||||||
1 Includes $29.2 million and $29.0 million of net deferred loan fees at December 31, 2020 and September 30, 2020, respectively, of which carrying value approximates fair value.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||||||
Net income | $ | 41,319 | $ | 43,274 | |||||||||||||||||||
Weighted average common shares outstanding | 55,119,909 | 56,377,631 | |||||||||||||||||||||
Dilutive effect of stock based compensation | 127,434 | 80,336 | |||||||||||||||||||||
Weighted average common shares outstanding for diluted earnings per share calculation | 55,247,343 | 56,457,967 | |||||||||||||||||||||
Basic earnings per share | $ | 0.75 | $ | 0.77 | |||||||||||||||||||
Diluted earnings per share | $ | 0.75 | $ | 0.77 |
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands, except share and per share amounts) | |||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||
Interest income (FTE) | $ | 117,195 | $ | 133,060 | |||||||||||||||||||
Interest expense | 7,689 | 26,364 | |||||||||||||||||||||
Noninterest income | 14,148 | 15,733 | |||||||||||||||||||||
Noninterest expense | 57,449 | 56,930 | |||||||||||||||||||||
Provision for credit losses ³ | 11,899 | 8,103 | |||||||||||||||||||||
Net income | 41,319 | 43,274 | |||||||||||||||||||||
Common shares outstanding | 55,105,105 | 56,382,915 | |||||||||||||||||||||
Weighted average diluted common shares outstanding | 55,247,343 | 56,457,967 | |||||||||||||||||||||
Earnings per common share - diluted | $ | 0.75 | $ | 0.77 | |||||||||||||||||||
Adjusted earnings per common share - diluted ¹ | 0.75 | 0.77 | |||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||
Net interest margin (FTE) ¹ ² | 3.63 | % | 3.68 | % | |||||||||||||||||||
Adjusted net interest margin (FTE) ¹ ² | 3.52 | % | 3.65 | % | |||||||||||||||||||
Return on average total assets ² | 1.30 | % | 1.34 | % | |||||||||||||||||||
Return on average common equity ² | 15.2 | % | 9.0 | % | |||||||||||||||||||
Return on average tangible common equity ¹ ² | 15.3 | % | 15.0 | % | |||||||||||||||||||
Efficiency ratio ¹ | 46.2 | % | 46.2 | % | |||||||||||||||||||
1 This is a non-GAAP financial measure we believe is helpful to interpreting our financial results. For more information on this non-GAAP financial measure, including a reconciliation to the most directly comparable GAAP financial measure, see "—Non-GAAP Financial Measures" section.
|
|||||||||||||||||||||||
2 Annualized for all partial-year periods.
|
|||||||||||||||||||||||
3 Prior to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, on October 1, 2020, this line represented the provision for loan and lease losses under the incurred model.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Net interest income: | |||||||||||||||||||||||
Total interest income (FTE) | $ | 117,195 | $ | 133,060 | |||||||||||||||||||
Less: Total interest expense | 7,689 | 26,364 | |||||||||||||||||||||
Net interest income (FTE) | $ | 109,506 | $ | 106,696 | |||||||||||||||||||
Net interest margin (FTE) and adjusted net interest margin (FTE) ¹ | |||||||||||||||||||||||
Average interest-earning assets | $ | 11,965,555 | $ | 11,543,610 | |||||||||||||||||||
Average interest-bearing liabilities | 11,436,823 | 10,804,123 | |||||||||||||||||||||
Net interest margin (FTE) | 3.63 | % | 3.68 | % | |||||||||||||||||||
Adjusted net interest margin (FTE) ¹ | 3.52 | % | 3.65 | % | |||||||||||||||||||
1 This is a non-GAAP financial measure we believe is helpful to interpreting our financial results. For more information on this non-GAAP financial measure, including a reconciliation to the most directly comparable GAAP financial measure, see "—Non-GAAP Financial Measures" section.
|
Three Months Ended | |||||||||||||||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
Average Balance | Interest (FTE) | Yield / Cost ¹ | Average Balance | Interest (FTE) | Yield / Cost ¹ | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Interest-bearing bank deposits ² | $ | 492,105 | $ | 155 | 0.12 | % | $ | 32,803 | $ | 608 | 7.37 | % | |||||||||||
Investment securities | 1,905,771 | 8,119 | 1.69 | % | 1,904,350 | 11,498 | 2.40 | % | |||||||||||||||
Non-ASC 310-30 loans, net ³ | 9,567,679 | 108,921 | 4.52 | % | 9,554,161 | 119,232 | 4.96 | % | |||||||||||||||
ASC 310-30 loans, net ⁴ | — | — | — | % | 52,296 | 1,722 | 13.10 | % | |||||||||||||||
Loans, net | 9,567,679 | 108,921 | 4.52 | % | 9,606,457 | 120,954 | 5.01 | % | |||||||||||||||
Total interest-earning assets | 11,965,555 | 117,195 | 3.89 | % | 11,543,610 | 133,060 | 4.59 | % | |||||||||||||||
Noninterest-earning assets | 614,946 | 1,267,983 | |||||||||||||||||||||
Total assets | $ | 12,580,501 | $ | 117,195 | 3.70 | % | $ | 12,811,593 | $ | 133,060 | 4.13 | % | |||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||
Noninterest-bearing deposits | $ | 2,664,117 | $ | 1,977,084 | |||||||||||||||||||
Interest-bearing deposits | 7,278,073 | $ | 3,966 | 0.22 | % | 6,306,861 | $ | 13,373 | 0.84 | % | |||||||||||||
Time deposits | 1,187,148 | 2,026 | 0.68 | % | 1,847,954 | 8,567 | 1.84 | % | |||||||||||||||
Total deposits | 11,129,338 | 5,992 | 0.21 | % | 10,131,899 | 21,940 | 0.86 | % | |||||||||||||||
Securities sold under agreements to repurchase | 78,639 | 18 | 0.09 | % | 66,527 | 31 | 0.19 | % | |||||||||||||||
FHLB advances and other borrowings | 120,000 | 862 | 2.85 | % | 497,034 | 3,082 | 2.47 | % | |||||||||||||||
Subordinated debentures and subordinated notes payable | 108,846 | 817 | 2.98 | % | 108,663 | 1,311 | 4.80 | % | |||||||||||||||
Total borrowings | 307,485 | 1,697 | 2.19 | % | 672,224 | 4,424 | 2.62 | % | |||||||||||||||
Total interest-bearing liabilities | 11,436,823 | $ | 7,689 | 0.27 | % | 10,804,123 | $ | 26,364 | 0.97 | % | |||||||||||||
Noninterest-bearing liabilities | 61,601 | 98,951 | |||||||||||||||||||||
Stockholders' equity | 1,082,077 | 1,908,519 | |||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 12,580,501 | $ | 12,811,593 | |||||||||||||||||||
Net interest spread | 3.43 | % | 3.16 | % | |||||||||||||||||||
Net interest income and net interest margin (FTE) | $ | 109,506 | 3.63 | % | $ | 106,696 | 3.68 | % | |||||||||||||||
Less: Tax equivalent adjustment | 1,598 | 1,523 | |||||||||||||||||||||
Net interest income and net interest margin - ties to Statements of Comprehensive Income | $ | 107,908 | 3.58 | % | $ | 105,173 | 3.62 | % | |||||||||||||||
¹ Annualized for all partial-year periods. | |||||||||||||||||||||||
2 Interest income includes nominal and $0.4 million for the first quarter of fiscal years 2021 and 2020, respectively, resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets.
|
|||||||||||||||||||||||
3 Interest income includes $0.0 million and $0.6 million for the first quarter of fiscal years 2021 and 2020, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.
|
|||||||||||||||||||||||
4 Beginning in the first quarter of fiscal year 2021, ASC 310-30 loans began being reported with non-ASC 310-30 loans. Upon adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, discounts on ASC 310-30 loans related to noncredit factors accreted to interest income were immaterial.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||
Loans (FTE) | $ | 108,921 | $ | 120,954 | |||||||||||||||||||
Investment securities | 8,119 | 11,498 | |||||||||||||||||||||
Federal funds sold and other | 155 | 608 | |||||||||||||||||||||
Total interest income (FTE) | 117,195 | 133,060 | |||||||||||||||||||||
Less: Tax equivalent adjustment | 1,598 | 1,523 | |||||||||||||||||||||
Total interest income (GAAP) | $ | 115,597 | $ | 131,537 |
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Deposits | $ | 5,992 | $ | 21,940 | |||||||||||||||||||
FHLB advances and other borrowings | 880 | 3,113 | |||||||||||||||||||||
Subordinated debentures and subordinated notes payable | 817 | 1,311 | |||||||||||||||||||||
Total interest expense | $ | 7,689 | $ | 26,364 |
Current Quarter vs Comparable Quarter | |||||||||||||||||||||||
Volume | Rate | Total | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Increase (decrease) in interest income: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 693 | $ | (1,146) | $ | (453) | |||||||||||||||||
Investment securities | 9 | (3,388) | (3,379) | ||||||||||||||||||||
Loans | (652) | (11,381) | (12,033) | ||||||||||||||||||||
Total increase (decrease) | 50 | (15,915) | (15,865) | ||||||||||||||||||||
Increase (decrease) in interest expense: | |||||||||||||||||||||||
Interest-bearing deposits | 1,796 | (11,203) | (9,407) | ||||||||||||||||||||
Time deposits | (2,364) | (4,177) | (6,541) | ||||||||||||||||||||
Securities sold under agreements to repurchase | 5 | (18) | (13) | ||||||||||||||||||||
FHLB advances and other borrowings | (2,644) | 424 | (2,220) | ||||||||||||||||||||
Subordinated debentures and subordinated notes payable | 3 | (497) | (494) | ||||||||||||||||||||
Total decrease | (3,204) | (15,471) | (18,675) | ||||||||||||||||||||
Increase (decrease) in net interest income (FTE) | $ | 3,254 | $ | (444) | $ | 2,810 |
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Provision for credit losses, non-ASC 310-30 loans * | $ | 11,976 | $ | 8,050 | |||||||||||||||||||
Decrease in provision for unfunded commitments reserve | (77) | — | |||||||||||||||||||||
Impairment in loan and lease losses, ASC 310-30 loans | — | 53 | |||||||||||||||||||||
Provision for credit losses, total | $ | 11,899 | $ | 8,103 | |||||||||||||||||||
* As presented above, the non-ASC 310-30 loan portfolio includes originated loans, other than loans for which we have elected the fair value option, and loans we acquired that we did not determine were acquired with deteriorated credit quality. Upon adoption of CECL, ASC 310-30 loans and related activity began being reported with non-ASC 310-30 loans.
|
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Service charges and other fees | $ | 9,624 | $ | 11,409 | |||||||||||||||||||
Wealth management fees | 3,029 | 2,964 | |||||||||||||||||||||
Mortgage banking income, net | 4,090 | 1,612 | |||||||||||||||||||||
Net gain on sale of securities and other assets | 248 | — | |||||||||||||||||||||
Other | 1,324 | 1,165 | |||||||||||||||||||||
Subtotal, service and product fees | 18,315 | 17,150 | |||||||||||||||||||||
Derivative interest expense | (3,393) | (890) | |||||||||||||||||||||
Change in fair value of FVO loans and related derivatives | (1,672) | (2,124) | |||||||||||||||||||||
Other derivative income (loss) | 898 | 1,597 | |||||||||||||||||||||
Subtotal, changes in fair value for loans at fair value and derivatives | (4,167) | (1,417) | |||||||||||||||||||||
Total noninterest income | $ | 14,148 | $ | 15,733 |
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||
Salaries and employee benefits | $ | 37,554 | $ | 35,905 | |||||||||||||||||||
Data processing and communication | 6,226 | 5,773 | |||||||||||||||||||||
Occupancy and equipment | 5,213 | 5,093 | |||||||||||||||||||||
Professional fees | 3,915 | 3,764 | |||||||||||||||||||||
Advertising | 556 | 865 | |||||||||||||||||||||
Net loss on repossessed property and other related expenses | 345 | 342 | |||||||||||||||||||||
Other | 3,640 | 5,188 | |||||||||||||||||||||
Total noninterest expense | $ | 57,449 | $ | 56,930 |
As of December 31,
2020 |
As of September 30,
2020 |
||||||||||
(dollars in thousands) | |||||||||||
Balance Sheet and Other Information: | |||||||||||
Total assets | $ | 12,814,383 | $ | 12,604,439 | |||||||
Loans ¹ | 9,517,876 | 10,076,142 | |||||||||
Allowance for credit losses ⁴ | 308,794 | 149,887 | |||||||||
Deposits | 11,373,318 | 11,008,779 | |||||||||
Stockholders' equity | 1,068,501 | 1,162,933 | |||||||||
Tangible common equity ² | 1,062,597 | 1,156,769 | |||||||||
Tier 1 capital ratio | 12.7 | % | 11.8 | % | |||||||
Total capital ratio | 14.3 | % | 13.3 | % | |||||||
Tier 1 leverage ratio | 9.7 | % | 9.4 | % | |||||||
Common equity tier 1 ratio | 12.0 | % | 11.0 | % | |||||||
Tangible common equity / tangible assets ² | 8.3 | % | 9.2 | % | |||||||
Book value per share - GAAP | $ | 19.39 | $ | 21.14 | |||||||
Tangible book value per share ² | $ | 19.28 | $ | 21.03 | |||||||
Nonaccrual loans / total loans | 3.07 | % | 3.22 | % | |||||||
Net charge-offs (recoveries) / average total loans ³ | 1.22 | % | 0.40 | % | |||||||
Allowance for credit losses ⁴ / total loans | 3.24 | % | 1.49 | % | |||||||
1 Loans include unpaid principal balance net of unamortized discount on acquired loans and unearned net deferred fees and costs and net loans in process.
|
|||||||||||
2 This is a non-GAAP financial measure we believe is helpful to interpreting our financial results. For more information on this non-GAAP financial measure, including a reconciliation to the most directly comparable GAAP financial measure, see "—Non-GAAP Financial Measures" section.
|
|||||||||||
3 Annualized for partial-year periods, except for September 30, 2020, which was for the twelve month period.
|
|||||||||||
4 Prior to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, on October 1, 2020, this line represented the allowance for loan and lease losses under the incurred loss model.
|
December 31, 2020 | |||||
(dollars in thousands) | |||||
Construction and development | $ | 482,462 | |||
Owner-occupied CRE | 1,411,558 | ||||
Non-owner-occupied CRE | 2,660,682 | ||||
Multifamily residential real estate | 476,159 | ||||
Total commercial real estate | 5,030,861 | ||||
Agriculture real estate | 773,379 | ||||
Agriculture operating loans | 862,573 | ||||
Total agriculture | 1,635,952 | ||||
Commercial non-real estate | 2,054,478 | ||||
Home equity lines of credit | 133,081 | ||||
Closed-end first lien | 545,499 | ||||
Closed-end junior lien | 29,506 | ||||
Total residential real estate | 708,086 | ||||
Consumer and other | 88,499 | ||||
Total | $ | 9,517,876 |
December 31, 2020 | |||||||||||||||||||||||
1 Year or Less | >1 Through 5 Years | >5 Years | Total | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Maturity distribution: | |||||||||||||||||||||||
Construction and development | $ | 319,141 | $ | 121,963 | $ | 41,358 | $ | 482,462 | |||||||||||||||
Owner-occupied CRE | 1,304,756 | 64,114 | 42,688 | 1,411,558 | |||||||||||||||||||
Non-owner-occupied CRE | 2,330,443 | 167,544 | 162,695 | 2,660,682 | |||||||||||||||||||
Multifamily residential real estate | 435,253 | 24,169 | 16,737 | 476,159 | |||||||||||||||||||
Total commercial real estate | 4,389,593 | 377,790 | 263,478 | 5,030,861 | |||||||||||||||||||
Agriculture | 1,588,991 | 29,860 | 17,101 | 1,635,952 | |||||||||||||||||||
Commercial non-real estate | 1,926,093 | 85,060 | 43,325 | 2,054,478 | |||||||||||||||||||
Residential real estate | 603,546 | 69,209 | 35,331 | 708,086 | |||||||||||||||||||
Consumer and other | 73,630 | 13,780 | 1,089 | 88,499 | |||||||||||||||||||
Total | $ | 8,581,853 | $ | 575,699 | $ | 360,324 | $ | 9,517,876 |
December 31, 2020 | |||||||||||||||||
Fixed | Variable | Total | |||||||||||||||
(dollars in thousands) | |||||||||||||||||
Maturity distribution: | |||||||||||||||||
Construction and development | $ | 35,291 | $ | 128,030 | $ | 163,321 | |||||||||||
Owner-occupied CRE | 59,744 | 47,058 | 106,802 | ||||||||||||||
Non-owner-occupied CRE | 126,202 | 204,037 | 330,239 | ||||||||||||||
Multifamily residential real estate | 5,416 | 35,490 | 40,906 | ||||||||||||||
Total commercial real estate | 226,653 | 414,615 | 641,268 | ||||||||||||||
Agriculture | 13,956 | 33,005 | 46,961 | ||||||||||||||
Commercial non-real estate | 60,814 | 67,571 | 128,385 | ||||||||||||||
Residential real estate | 47,229 | 57,311 | 104,540 | ||||||||||||||
Consumer and other | 768 | 14,101 | 14,869 | ||||||||||||||
Total | $ | 349,420 | $ | 586,603 | $ | 936,023 |
Three Months Ended December 31, 2020 | |||||||||||
(dollars in thousands) | |||||||||||
Balance, beginning of period | $ | 20,034 | |||||||||
Additions to other repossessed property | — | ||||||||||
Valuation adjustments and other | (8) | ||||||||||
Sales | (1,940) | ||||||||||
Balance, end of period | $ | 18,086 |
December 31,
2020 |
September 30,
2020 |
||||||||||
(dollars in thousands) | |||||||||||
U.S. Treasury securities | $ | 24,991 | $ | 49,924 | |||||||
U.S. Agency securities | 24,975 | 24,974 | |||||||||
Mortgage-backed securities: | |||||||||||
Government National Mortgage Association | 424,756 | 485,689 | |||||||||
Federal Home Loan Mortgage Corporation | 769,254 | 578,650 | |||||||||
Federal National Mortgage Association | 455,651 | 287,842 | |||||||||
Small Business Assistance Program | 264,798 | 244,653 | |||||||||
States and political subdivision securities | 51,120 | 54,224 | |||||||||
Other | 1,006 | 1,006 | |||||||||
Total | $ | 2,016,551 | $ | 1,726,962 |
December 31, 2020 | September 30, 2020 | ||||||||||||||||
Amount | Weighted Avg. Cost | Amount | Weighted Avg. Cost | ||||||||||||||
(dollars in thousands) | |||||||||||||||||
Noninterest-bearing demand | $ | 2,858,455 | — | % | $ | 2,586,743 | — | % | |||||||||
Interest-bearing demand | 7,436,283 | 0.21 | % | 7,139,058 | 0.26 | % | |||||||||||
Time deposits, greater than $250,000 | 283,635 | 0.97 | % | 352,913 | 1.12 | % | |||||||||||
Time deposits, less than or equal to $250,000 | 794,945 | 0.54 | % | 930,065 | 0.75 | % | |||||||||||
Total | $ | 11,373,318 | 0.20 | % | $ | 11,008,779 | 0.27 | % |
December 31,
2020 |
September 30,
2020 |
||||||||||
(dollars in thousands) | |||||||||||
South Dakota | $ | 2,961,862 | $ | 2,839,891 | |||||||
Iowa / Missouri | 3,446,114 | 3,184,321 | |||||||||
Nebraska / Kansas | 2,819,476 | 2,833,921 | |||||||||
Arizona | 601,376 | 590,567 | |||||||||
Colorado | 1,319,271 | 1,300,351 | |||||||||
North Dakota / Minnesota | 28,479 | 30,228 | |||||||||
Specialized Assets | 11,947 | — | |||||||||
Corporate and Other | 184,793 | 229,500 | |||||||||
Total deposits | $ | 11,373,318 | $ | 11,008,779 |
December 31, 2020 | |||||||||||
Greater than $250,000 | Less than or equal to $250,000 | ||||||||||
(dollars in thousands) | |||||||||||
Remaining maturity: | |||||||||||
Three months or less | $ | 76,140 | $ | 238,532 | |||||||
Over three through six months | 79,412 | 185,450 | |||||||||
Over six through twelve months | 71,696 | 223,606 | |||||||||
Over twelve months | 56,387 | 147,357 | |||||||||
Total | $ | 283,635 | $ | 794,945 | |||||||
Percent of total deposits | 2.5 | % | 7.0 | % |
At and for the Three Months Ended December 31, 2020 | At and for the Fiscal Year Ended September 30, 2020 | ||||||||||
(dollars in thousands) | |||||||||||
Short-term borrowings: | |||||||||||
Securities sold under agreements to repurchase | $ | 80,355 | $ | 65,506 | |||||||
Other short-term borrowings | — | 75,000 | |||||||||
Total short-term borrowings | $ | 80,355 | $ | 140,506 | |||||||
Maximum amount outstanding at any month-end during the period | $ | 80,355 | $ | 539,809 | |||||||
Average amount outstanding during the period | 78,640 | 218,340 | |||||||||
Weighted average rate for the period | 0.09 | % | 0.75 | % | |||||||
Weighted average rate as of date indicated | 0.09 | % | 0.09 | % |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
Less Than 1 Year | 1 to 2 Years | 2 to 5 Years | >5 Years | Not Determined | Total | ||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||
Contractual Obligations: | |||||||||||||||||||||||||||||||||||
Customer deposits | $ | 848,202 | $ | 147,652 | $ | 54,507 | $ | 1,585 | $ | 10,321,372 | $ | 11,373,318 | |||||||||||||||||||||||
Securities sold under agreement to repurchase | 80,355 | — | — | — | — | 80,355 | |||||||||||||||||||||||||||||
FHLB advances and other borrowings | — | 30,000 | 90,000 | — | — | 120,000 | |||||||||||||||||||||||||||||
Subordinated debentures | — | — | — | 75,920 | — | 75,920 | |||||||||||||||||||||||||||||
Subordinated notes payable | — | — | 35,000 | — | — | 35,000 | |||||||||||||||||||||||||||||
Accrued interest payable | 4,035 | — | — | — | — | 4,035 | |||||||||||||||||||||||||||||
Interest on FHLB advances | 3,372 | 3,156 | 3,111 | — | — | 9,639 | |||||||||||||||||||||||||||||
Interest on subordinated debentures | 1,852 | 1,852 | 5,557 | 16,275 | — | 25,536 | |||||||||||||||||||||||||||||
Interest on subordinated notes payable | 1,180 | 1,180 | 3,097 | — | — | 5,457 | |||||||||||||||||||||||||||||
Other Commitments: | |||||||||||||||||||||||||||||||||||
Commitments to extend credit—non-credit card | $ | 1,471,544 | $ | 181,417 | $ | 241,291 | $ | 154,769 | $ | — | $ | 2,049,021 | |||||||||||||||||||||||
Commitments to extend credit—credit card | 129,447 | — | — | — | — | 129,447 | |||||||||||||||||||||||||||||
Letters of credit | 52,760 | — | — | — | — | 52,760 |
December 31,
2020 |
September 30,
2020 |
||||||||||
(dollars in thousands) | |||||||||||
Commitments to extend credit | $ | 2,178,468 | $ | 2,138,138 | |||||||
Letters of credit | 52,760 | 65,707 | |||||||||
Total | $ | 2,231,228 | $ | 2,203,845 |
At or for the three months ended: | ||||||||||||||||||||||||||
December 31,
2020 |
September 30,
2020 |
June 30,
2020 |
March 31,
2020 |
December 31,
2019 |
||||||||||||||||||||||
(Dollars in thousands except share and per share amounts)
|
||||||||||||||||||||||||||
Adjusted net income and adjusted earnings per common share: | ||||||||||||||||||||||||||
Net income (loss) - GAAP | $ | 41,319 | $ | 11,136 | $ | 5,400 | $ | (740,618) | $ | 43,274 | ||||||||||||||||
Add: COVID-19 related impairment of goodwill and certain intangible assets, net of tax | — | — | — | 713,013 | — | |||||||||||||||||||||
Add: COVID-19 impact on credit and other related charges, net of tax | — | — | — | 56,685 | — | |||||||||||||||||||||
Adjusted net income | $ | 41,319 | $ | 11,136 | $ | 5,400 | $ | 29,080 | $ | 43,274 | ||||||||||||||||
Weighted average diluted common shares outstanding | 55,247,343 | 55,164,548 | 55,145,619 | 55,906,002 | 56,457,967 | |||||||||||||||||||||
Earnings per common share - diluted | $ | 0.75 | $ | 0.20 | $ | 0.10 | $ | (13.25) | $ | 0.77 | ||||||||||||||||
Adjusted earnings per common share - diluted | $ | 0.75 | $ | 0.20 | $ | 0.10 | $ | 0.52 | $ | 0.77 | ||||||||||||||||
Pre-tax pre-provision income ("PTPP"): | ||||||||||||||||||||||||||
Income (loss) before income taxes - GAAP | $ | 52,708 | $ | 10,279 | $ | 5,878 | $ | (778,348) | $ | 55,873 | ||||||||||||||||
Add: Provision for credit losses - GAAP | 11,899 | 16,853 | 21,641 | 71,795 | 8,103 | |||||||||||||||||||||
Add: Change in fair value of FVO loans and related derivatives - GAAP | 1,672 | 24,648 | 25,001 | 10,533 | 2,124 | |||||||||||||||||||||
Add: Goodwill impairment - GAAP | — | — | — | 742,352 | — | |||||||||||||||||||||
Pre-tax pre-provision income | $ | 66,279 | $ | 51,780 | $ | 52,520 | $ | 46,332 | $ | 66,100 | ||||||||||||||||
At or for the three months ended: | ||||||||||||||||||||||||||
December 31,
2020 |
September 30,
2020 |
June 30,
2020 |
March 31,
2020 |
December 31,
2019 |
||||||||||||||||||||||
(Dollars in thousands except share and per share amounts)
|
||||||||||||||||||||||||||
Tangible common equity and tangible common equity to tangible assets: | ||||||||||||||||||||||||||
Total stockholders' equity | $ | 1,068,501 | $ | 1,162,933 | $ | 1,160,644 | $ | 1,153,464 | $ | 1,920,669 | ||||||||||||||||
Less: Goodwill and other intangible assets | 5,904 | 6,164 | 6,425 | 6,703 | 749,481 | |||||||||||||||||||||
Tangible common equity | $ | 1,062,597 | $ | 1,156,769 | $ | 1,154,219 | $ | 1,146,761 | $ | 1,171,188 | ||||||||||||||||
Total assets | $ | 12,814,383 | $ | 12,604,439 | $ | 12,934,328 | $ | 12,387,808 | $ | 12,851,665 | ||||||||||||||||
Less: Goodwill and other intangible assets | 5,904 | 6,164 | 6,425 | 6,703 | 749,481 | |||||||||||||||||||||
Tangible assets | $ | 12,808,479 | $ | 12,598,275 | $ | 12,927,903 | $ | 12,381,105 | $ | 12,102,184 | ||||||||||||||||
Tangible common equity to tangible assets | 8.3 | % | 9.2 | % | 8.9 | % | 9.3 | % | 9.7 | % | ||||||||||||||||
Tangible book value per share: | ||||||||||||||||||||||||||
Total stockholders' equity | $ | 1,068,501 | $ | 1,162,933 | $ | 1,160,644 | $ | 1,153,464 | $ | 1,920,669 | ||||||||||||||||
Less: Goodwill and other intangible assets | 5,904 | 6,164 | 6,425 | 6,703 | 749,481 | |||||||||||||||||||||
Tangible common equity | $ | 1,062,597 | $ | 1,156,769 | $ | 1,154,219 | $ | 1,146,761 | $ | 1,171,188 | ||||||||||||||||
Common shares outstanding | 55,105,105 | 55,014,189 | 55,014,047 | 55,013,928 | 56,382,915 | |||||||||||||||||||||
Book value per share - GAAP | $ | 19.39 | $ | 21.14 | $ | 21.10 | $ | 20.97 | $ | 34.06 | ||||||||||||||||
Tangible book value per share | $ | 19.28 | $ | 21.03 | $ | 20.98 | $ | 20.84 | $ | 20.77 |
Estimated Increase (Decrease) in Annualized Adjusted Net Interest Income for the Quarter Ended December 31, 2020 | |||||||||||
Change in Market Interest Rates as of December 31, 2020 | Twelve Months Ending December 31, 2021 | Twelve Months Ending December 31, 2022 | |||||||||
Immediate Shifts | |||||||||||
+400 basis points | 13.60 | % | 21.30 | % | |||||||
+300 basis points | 10.30 | % | 16.40 | % | |||||||
+200 basis points | 7.00 | % | 11.30 | % | |||||||
+100 basis points | 3.70 | % | 6.10 | % | |||||||
-100 basis points | (3.50) | % | (8.10) | % | |||||||
Gradual Shifts | |||||||||||
+400 basis points | 3.20 | % | |||||||||
+300 basis points | 2.50 | % | |||||||||
+200 basis points | 1.90 | % | |||||||||
+100 basis points | 1.30 | % | |||||||||
-100 basis points | (1.20) | % | |||||||||
Exhibit Number | Description | ||||
11.1 | Statement regarding Computation of Per Share Earnings (included as Note 15 to the registrant's unaudited consolidated financial statements) | ||||
31.1**
|
Rule 13a-14(a) Certification of Chief Executive Officer of Great Western Bancorp, Inc. in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
31.2**
|
Rule 13a-14(a) Certification of Chief Financial Officer of Great Western Bancorp, Inc. in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
32.1**
|
Section 1350 Certification of Chief Executive Officer of Great Western Bancorp, Inc. in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
32.2**
|
Section 1350 Certification of Chief Financial Officer of Great Western Bancorp, Inc. in accordance with Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
101.INS*** | XBRL Instance Document | ||||
101.SCH*** | XBRL Taxonomy Extension Schema Document | ||||
101.CAL*** | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF*** | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB*** | XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE*** | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
** Filed herewith | |||||
*** Furnished, not filed | |||||
Great Western Bancorp, Inc.
|
||||||||
Date: February 9, 2021 | By: |
/s/ Peter Chapman
|
||||||
Name: |
Peter Chapman
|
|||||||
Title: |
Chief Financial Officer and Executive Vice President
(Principal Financial Officer and Authorized Officer) |
Great Western Bancorp, Inc.
|
||||||||
Date: January 27, 2021 | By: | /s/ Mark Borrecco | ||||||
Name: | Mark Borrecco | |||||||
Title: | President and Chief Executive Officer |
Great Western Bancorp, Inc.
|
||||||||
Date: January 27, 2021 | By: | /s/ Peter Chapman | ||||||
Name: | Peter Chapman | |||||||
Title: | Chief Financial Officer and Executive Vice President |
Great Western Bancorp, Inc.
|
||||||||
Date: January 27, 2021 | By: | /s/ Mark Borrecco | ||||||
Name: | Mark Borrecco | |||||||
Title: | President and Chief Executive Officer |
Great Western Bancorp, Inc.
|
||||||||
Date: January 27, 2021 | By: | /s/ Peter Chapman | ||||||
Name: | Peter Chapman | |||||||
Title: | Chief Financial Officer and Executive Vice President |