8-K
Beacon Financial Corp (BBT)
UNITED STATES
SECURITIES AND EXCHANGECOMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 30, 2025
BERKSHIRE
HILLS BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-15781 | 04-3510455 |
|---|---|---|
| (State or Other Jurisdiction)<br><br> <br>of Incorporation) | (Commission File No.) | (I.R.S. Employer<br><br> <br>Identification No.) |
| 60<br> State Street, Boston,<br> Massachusetts | 02109 | |
| --- | --- | |
| (Address of Principal Executive<br> Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(800
) 773-5601
, ext. 133773
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common<br> stock, par value $0.01 per share | BHLB | New<br> York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition |
|---|
On January 30, 2025, Berkshire Hills Bancorp, Inc. (the “Company”), the holding company for Berkshire Bank (the “Bank”), announced its financial results for the fourth quarter ended December 31, 2024. The news release containing the financial results is included as Exhibit 99.1 and shall not be deemed “filed” for any purpose.
The Company conducted a conference call/webcast on January 30, 2025, to discuss the financial results for the quarter and provide guidance about expected future results. A telephone replay of the call will be available through February 4, 2025. The webcast will be available on the Company’s website at ir.berkshirebank.com for an extended period of time.
| Item 7.01 | Regulation FD Disclosure |
|---|
The Company made available slides for a presentation that the Company utilized in connection with its conference call. A copy of the presentation can be found on the Company’s website at ir.berkshirebank.com.
| Item 9.01 | Financial Statements and Exhibits |
|---|
| (a) | Financial Statements of Businesses Acquired. Not applicable. | |
|---|---|---|
| (b) | Pro Forma Financial Information. Not applicable. | |
| (c) | Shell Company Transactions. Not applicable. | |
| (d) | Exhibits. | |
| Exhibit No. | Description | |
| 99.1 | News Release dated January 30, 2025 | |
| 104.1 | Cover Page for this Current Report on Form 8-K, formatted in Inline XBRL |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Berkshire Hills Bancorp, Inc. | ||
|---|---|---|
| DATE: January 30, 2025 | By: | /s/ Nitin J. Mhatre |
| Nitin J. Mhatre<br><br> <br>President and Chief Executive Officer |
3
Exhibit 99.1
BerkshireHills Reports Strong Fourth Quarter Operating Results
$0.46 GAAP EPS; $0.60 Operating EPS
| · | Operating<br> EPS growth of 3% quarter-over-quarter and 28% year-over-year; FY2024 Operating EPS of $2.22<br> up 4% year-over-year |
|---|---|
| · | Average<br> deposit growth of 3% and Average loan growth of 0.4% quarter-over-quarter; Loans to deposits<br> ratio improved further during the quarter |
| --- | --- |
| · | 0.52%<br> delinquent and non-performing loans to total loans, lowest in nearly two decades |
| --- | --- |
| · | 7.6%<br> return on tangible common equity; 9.9% operating return on tangible common equity |
| --- | --- |
| · | 13.0%<br> common equity Tier 1 ratio |
| --- | --- |
BOSTON, January 30, 2025 - Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported results for the fourth quarter of 2024. These results along with comparison periods are summarized below:
| ($ in millions, except per share data) | Three<br> Months Ended | Twelve<br> Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31,<br> 2024 | Sep. 30,<br> 2024 | Dec. 31,<br> 2023 | Dec. 31,<br> 2024 | Dec. 31,<br> 2023 | |||||||||||
| Net income (loss) | $ | 19.7 | $ | 37.5 | $ | (1.4 | ) | $ | 61.0 | $ | 69.6 | ||||
| Per share | 0.46 | 0.88 | (0.03 | ) | 1.43 | 1.60 | |||||||||
| Operating<br> earnings^1^ | 26.0 | 24.8 | 20.2 | 94.9 | 93.2 | ||||||||||
| Per share | 0.60 | 0.58 | 0.47 | 2.22 | 2.14 | ||||||||||
| Net interest income, non FTE | $ | 86.9 | $ | 88.1 | $ | 88.4 | $ | 351.6 | $ | 369.0 | |||||
| Net interest income, FTE | 88.8 | 90.1 | 90.4 | 359.6 | 376.9 | ||||||||||
| Net interest margin, FTE | 3.14 | % | 3.16 | % | 3.11 | % | 3.16 | % | 3.27 | % | |||||
| Non-interest income | 23.3 | 37.6 | (8.4 | ) | 48.4 | 42.8 | |||||||||
| Operating<br> non-interest income^1^ | 23.2 | 21.5 | 16.7 | 82.1 | 67.8 | ||||||||||
| Non-interest expense | $ | 77.6 | $ | 72.0 | $ | 79.0 | $ | 296.5 | $ | 301.5 | |||||
| Operating<br> non-interest expense^1^ | 71.0 | 72.3 | 75.3 | 287.0 | 295.2 | ||||||||||
| Efficiency<br> ratio^1^ | 62.4 | % | 63.7 | % | 67.8 | % | 63.9 | % | 63.9 | % | |||||
| Average balances | |||||||||||||||
| Loans | $ | 9,271 | $ | 9,233 | $ | 8,990 | $ | 9,176 | $ | 8,814 | |||||
| Deposits | 9,659 | 9,360 | 9,936 | 9,536 | 9,704 | ||||||||||
| Period-end balances | |||||||||||||||
| Loans | 9,385 | 9,212 | 9,040 | 9,385 | 9,040 | ||||||||||
| Deposits | 10,375 | 9,577 | 10,633 | 10,375 | 10,633 |
See non-GAAP financial measures and reconciliation to GAAP measures beginning on page 12.
1
Berkshire CEO Nitin Mhatre stated, “Berkshire continued its positive momentum and finished the year strong, highlighted by a year-over-year 28% increase in fourth quarter operating EPS and a 4% increase for full year operating EPS. This reflected the cumulative benefit of ongoing growth initiatives together with strategic optimization initiatives including the branch network sales and consolidations, and the sales of securities and targeted loan portfolios. Our results also benefited from strong credit discipline, rigorous expense management, investments in new client-facing bankers and enhancements to our digital platform and consumer product offerings. We achieved a 9.9% operating return on tangible common equity in the fourth quarter, and 9.6% for the full year, following a 10.1% result for the year 2023. Berkshire has been recognized by Newsweek as one of America’s Best Regional Banks for the third year in a row, and our positive impact in the community was recognized by the American Bankers Association.”
Mr. Mhatre continued, “In December we announced a definitive agreement with Brookline Bancorp, Inc. for a merger of equals to create a preeminent Northeast banking franchise positioned to deliver an exceptional client experience and create greater value for shareholders. We had a strong response from investors and successfully executed a capital raise of $100 million of common stock to support the merger, a reflection of confidence in our plans and accomplishments. I want to thank our teams for their continued dedication to transforming our franchise and for their service to our stakeholders as we work toward an exciting new chapter.”
Berkshire CFO Brett Brbovic added, “Quarter-over-quarter operating income increased 5% on higher fee revenue and lower operating expense. The efficiency ratio was 62.4%, an improvement over prior periods. We posted a solid 3% growth in average deposits improving our loans to deposits profile further. The 4Q24 net interest margin was 3.14%, down 2 basis points linked quarter and up 3 basis points year over year. Asset quality remained solid, and liquidity and capital strength improved. Tangible book value per share advanced 1% linked quarter and 9% year-over-year.”
| As of and For the Three Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31,<br> 2024 | Sept. 30,<br> 2024 | Dec. 31,<br> 2023 | ||||||||
| Asset Quality | ||||||||||
| Net loan charge-offs to average loans | 0.14 | % | 0.24 | % | 0.20 | % | ||||
| Non-performing loans to total loans | 0.26 | % | 0.26 | % | 0.24 | % | ||||
| Returns | ||||||||||
| Return on average assets | 0.68 | % | 1.28 | % | (0.05 | )% | ||||
| Operating<br> return on average assets^1^ | 0.90 | % | 0.85 | % | 0.68 | % | ||||
| Return<br> on tangible common equity^1^ | 7.59 | % | 14.83 | % | (0.24 | )% | ||||
| Operating<br> return on tangible common equity^1^ | 9.93 | % | 9.91 | % | 8.90 | % | ||||
| Capital Ratios^2^ | ||||||||||
| Tangible<br> common equity/tangible assets^1^ | 9.4 | % | 9.1 | % | 8.0 | % | ||||
| Tier 1 leverage | 11.0 | % | 9.9 | % | 9.6 | % | ||||
| Common equity Tier 1 | 13.0 | % | 11.9 | % | 12.0 | % | ||||
| Tier 1 risk-based | 13.2 | % | 12.2 | % | 12.3 | % | ||||
| Total risk-based | 15.4 | % | 14.4 | % | 14.4 | % |
See non-GAAP measures and reconciliation to GAAP beginning on page 12. All performance ratios are annualized and are based on average balance sheet amounts, where applicable.
Presented as estimated for December 31, 2024 and actual for the remaining periods.
2
Berkshire Hills Bancorp, Inc. (NYSE: BHLB) is the parent company of Berkshire Bank, a relationship-driven, community-focused bank with $12.3 billion in assets and 83 financial centers in New England and New York. Berkshire is headquartered in Boston and offers commercial, retail, wealth, and private banking solutions. Berkshire has a pending agreement to merge with Brookline Bancorp, Inc., a multi-bank holding company with $12 billion in assets and branches in Massachusetts, Rhode Island, and New York.
Q4 2024 Financial Highlights (comparisons are to the prior quarter unless otherwise noted).
Income Statement. Fourth quarter GAAP income was $20 million, or $0.46 per share. Operating earnings totaled $26 million, or $0.60 per share. GAAP results included $6.6 million in non-operating expenses related primarily to the pending merger. Operating earnings increased $1.2 million, or 5%, linked quarter primarily due to a $1.2 million decrease in operating non-interest expense. The fourth quarter was the first full quarter after the ten branch sale. Fourth quarter operating EPS increased 3% linked quarter and 28% year-over-year, reflecting full year organic growth, improved efficiency, and lower provision expense.
For the full year 2024, GAAP income was $61 million, or $1.43 per share, compared to $70 million, or $1.60 per share, in 2023. Full year 2024 operating income was $95 million, or $2.22 per share, increasing from $93 million, or $2.14 per share, in 2023. The increase in operating income included the benefit of decreases in credit loss provision expense and in operating expenses, offset by the impact of a lower net interest margin.
The fourth quarter efficiency ratio improved to 62.4% from 63.7% linked quarter.
Quarterly net interest income decreased linked quarter by $1.2 million to $87 million in 4Q24.
| • | The<br> net interest margin decreased 2 basis points to 3.14%. |
|---|---|
| o | The earning asset yield decreased 20 basis points. |
| --- | --- |
| • | The<br> loan yield decreased 23 basis points. |
| --- | --- |
| o | The cost of funds decreased 17 basis points. |
| --- | --- |
| • | The<br> cost of deposits decreased 12 basis points. |
| --- | --- |
| • | Provision<br> for credit losses totaled $6 million, increasing $0.5 million linked quarter. |
| --- | --- |
| o | Net loan charge-offs totaled $3.3 million, compared to $5.6 million<br> linked quarter. |
| --- | --- |
| o | The annualized loan net charge-off ratio was 0.14% for the quarter<br> and 0.16% for the year. |
| --- | --- |
| • | GAAP<br> and operating non-interest income was $23 million. |
| --- | --- |
| o | GAAP non-interest income decreased $14 million linked quarter due<br> to a $16 million branch sale gain recorded in the prior quarter. |
| --- | --- |
| o | Operating non-interest income increased $1.7 million linked quarter<br> due primarily to higher SBA loan sale gains. |
| --- | --- |
| • | Non-interest<br> expense totaled $78 million on a GAAP basis and $71 million on an operating basis. |
| --- | --- |
| o | GAAP non-interest expense increased $6 million linked quarter due<br> to merger expenses recorded in the fourth quarter. |
| --- | --- |
| o | Operating non-interest expense decreased $1.2 million linked quarter. |
| --- | --- |
| • | The<br> effective tax rate was 26% for the quarter and 23% for the year. |
| --- | --- |
| o | The tax rate on operating income was 21% for the quarter and 23% for<br> the year. |
| --- | --- |
3
Loans. Compared to the linked quarter, total loans increased $173 million, or 2% to $9.4 billion. For the year, total loans increased $489 million, or 5%, excluding $144 million in consumer and mortgage loans sold in the branch sale and other transactions.
| · | Commercial<br> real estate loans increased $107 million, or 2%, to $4.8 billion compared to the linked quarter. |
|---|---|
| · | Commercial<br> and industrial loans increased $52 million, or 4%, to $1.5 billion. |
| --- | --- |
| · | Residential<br> mortgage loans increased $13 million to $2.7 billion. |
| --- | --- |
| · | Consumer<br> loans increased $1 million to $374 million. |
| --- | --- |
| · | The quarter-end allowance for credit losses on loans was<br> unchanged linked quarter at 1.22% of total loans, and up from 1.17% at year-end 2023. |
| · | Non-performing loans to total loans was unchanged at 0.26%<br> for the quarter. |
| · | Delinquent and non-performing loans were 0.52% of total<br> loans, the lowest level in nearly two decades. |
Deposits. Compared to the linked quarter, total deposits increased $798 million to $10.4 billion. Total deposits excluding payroll and brokered deposits increased 3% linked quarter. For the year, total deposits increased $125 million, or 1%, excluding $383 million in deposits sold in the branch sale.
| · | Non-interest<br> bearing deposits increased linked quarter by $57 million, or 3%,to $2.3 billion. |
|---|---|
| · | Time<br> deposits increased linked quarter by $57 million, or 2%, to $2.6 billion. |
| --- | --- |
Equity. Total shareholders’ equity increased linked quarter by $97 million, or 9%, to $1.2 billion including a successful $100 million common stock issuance. For the year, equity increased by $155 million, or 15%. The ratio of tangible common equity to tangible assets measured 9.4% at period end.
Conference Call and Investor Presentation. Berkshire will conduct a conference call/webcast at 9:00 a.m. Eastern time on Thursday, January 30, 2025 to discuss results for the quarter and provide guidance about expected future results. Instructions for listening to the call may be found at the Company’s website at ir.berkshirebank.com. Additional materials relating to the call may also be accessed at this website. The call will be archived at the website and will be available for an extended period of time.
4
Forward Looking Statements: This document contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “remain,” “target” and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see the sections titled “Forward-Looking Statements” and “Risk Factors” in Berkshire’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC’s website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements.
INVESTOR CONTACT
Kevin Conn
Investor Relations
617.641.9206
kaconn@berkshirebank.com
MEDIA CONTACT
Gary Levante
Corporate Communications
413.447.1737
glevante@berkshirebank.com
5
SELECTED FINANCIAL HIGHLIGHTS (1)
| At or for the Quarters Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||||||
| 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||
| NOMINAL AND PER SHARE DATA | |||||||||||||||
| Net earnings/(loss) per common share, diluted | $ | 0.46 | $ | 0.88 | $ | 0.57 | $ | (0.47 | ) | $ | (0.03 | ) | |||
| Operating earnings per<br> common share, diluted (2)(3) | 0.60 | 0.58 | 0.55 | 0.49 | 0.47 | ||||||||||
| Net income/(loss), (thousands) | 19,657 | 37,509 | 24,025 | (20,188 | ) | (1,445 | ) | ||||||||
| Operating net income, (thousands) (2)(3) | 25,982 | 24,789 | 23,168 | 20,934 | 20,190 | ||||||||||
| Net interest income, (thousands) non FTE | 86,855 | 88,059 | 88,532 | 88,140 | 88,421 | ||||||||||
| Net interest income, FTE<br> (5) | 88,798 | 90,082 | 90,545 | 90,146 | 90,442 | ||||||||||
| Total common shares outstanding, end of period<br> (thousands) | 46,424 | 42,982 | 42,959 | 43,415 | 43,501 | ||||||||||
| Average diluted shares, (thousands) | 43,064 | 42,454 | 42,508 | 43,028 | 43,101 | ||||||||||
| Total book value per common share, end of period | 25.15 | 24.90 | 23.58 | 23.26 | 23.27 | ||||||||||
| Tangible book value per common share, end<br> of period (2)(3) | 24.82 | 24.53 | 23.18 | 22.84 | 22.82 | ||||||||||
| Dividends declared per common share | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | ||||||||||
| Dividend payout ratio<br> (7) | 39.40 | % | 20.63 | % | 32.74 | % | N/M | % | N/M | % | |||||
| PERFORMANCE RATIOS (4) | |||||||||||||||
| Return on equity | 7.18 | % | 14.29 | % | 9.49 | % | (7.93 | )% | (0.60 | )% | |||||
| Operating return on equity<br> (2)(3) | 9.49 | 9.44 | 9.15 | 8.23 | 8.36 | ||||||||||
| Return on tangible common<br> equity (2)(3) | 7.59 | 14.83 | 9.99 | (7.73 | ) | (0.24 | ) | ||||||||
| Operating return on tangible<br> common equity (2)(3) | 9.93 | 9.91 | 9.65 | 8.73 | 8.90 | ||||||||||
| Return on assets | 0.68 | 1.28 | 0.82 | (0.69 | ) | (0.05 | ) | ||||||||
| Operating return on assets<br> (2)(3) | 0.90 | 0.85 | 0.79 | 0.71 | 0.68 | ||||||||||
| Net interest margin, FTE<br> (5) | 3.14 | 3.16 | 3.20 | 3.15 | 3.11 | ||||||||||
| Efficiency ratio (3) | 62.43 | 63.74 | 63.40 | 66.26 | 67.77 | ||||||||||
| FINANCIAL DATA (in millions, end of period) | |||||||||||||||
| Total assets | $ | 12,273 | $ | 11,605 | $ | 12,219 | $ | 12,147 | $ | 12,431 | |||||
| Total earning assets | 11,523 | 10,922 | 11,510 | 11,430 | 11,705 | ||||||||||
| Total loans | 9,385 | 9,212 | 9,229 | 9,086 | 9,040 | ||||||||||
| Total funding liabilities | 10,813 | 10,285 | 10,907 | 10,826 | 11,140 | ||||||||||
| Total deposits | 10,375 | 9,577 | 9,621 | 9,883 | 10,633 | ||||||||||
| Loans/deposits (%) | 90 | % | 96 | % | 96 | % | 92 | % | 85 | % | |||||
| Total accumulated other comprehensive (loss) net of tax, end<br> of period | $ | (106 | ) | $ | (89 | ) | $ | (115 | ) | $ | (114 | ) | $ | (143 | ) |
| Total shareholders' equity | 1,167 | 1,070 | 1,013 | 1,010 | 1,012 | ||||||||||
| ASSET QUALITY | |||||||||||||||
| Allowance for credit losses, (millions) | $ | 115 | $ | 112 | $ | 112 | $ | 107 | $ | 105 | |||||
| Net charge-offs, (millions) | (3 | ) | (6 | ) | (2 | ) | (4 | ) | (4 | ) | |||||
| Net charge-offs (QTD annualized)/average loans | 0.14 | % | 0.24 | % | 0.07 | % | 0.18 | % | 0.20 | % | |||||
| Provision (benefit)/expense, (millions) | $ | 6 | $ | 6 | $ | 6 | $ | 6 | $ | 7 | |||||
| Non-performing assets, (millions) | 27 | 27 | 24 | 24 | 24 | ||||||||||
| Non-performing loans/total loans | 0.26 | % | 0.26 | % | 0.23 | % | 0.24 | % | 0.24 | % | |||||
| Allowance for credit losses/non-performing loans | 469 | 467 | 525 | 500 | 492 | ||||||||||
| Allowance for credit losses/total loans | 1.22 | 1.22 | 1.22 | 1.18 | 1.17 | ||||||||||
| CAPITAL RATIOS | |||||||||||||||
| Risk weighted assets, (millions)(6) | $ | 9,747 | $ | 9,651 | $ | 9,604 | $ | 9,615 | $ | 9,552 | |||||
| Common equity Tier 1 capital<br> to risk weighted assets (6) | 13.0 | % | 11.9 | % | 11.6 | % | 11.6 | % | 12.0 | % | |||||
| Tier 1 capital leverage<br> ratio (6) | 11.0 | 9.9 | 9.6 | 9.5 | 9.6 | ||||||||||
| Tangible common shareholders'<br> equity/tangible assets (3) | 9.4 | 9.1 | 8.2 | 8.2 | 8.0 | ||||||||||
| (1) | All financial tables presented are unaudited. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Reconciliations of non-GAAP financial measures, including<br> all references to operating and tangible amounts, appear on pages 13 and 14. | ||||||||||||||
| (3) | Non-GAAP financial measure. Operating measurements<br> are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions and restructuring<br> activities. See pages 13 and 14 for reconciliations of non-GAAP financial measures. | ||||||||||||||
| (4) | All performance ratios are annualized and are based<br> on average balance sheet amounts, where applicable. | ||||||||||||||
| (5) | Fully taxable equivalent considers the impact of tax<br> advantaged investment securities and loans. | ||||||||||||||
| (6) | Presented as projected for December 31, 2024 and actual<br> for the remaining periods. | ||||||||||||||
| (7) | Dividend payout ratio is based on dividends declared. |
6
CONSOLIDATED BALANCE SHEETS
| December 31, | September 30, | December 31, | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2024 | 2024 | 2023 | ||||||
| Assets | |||||||||
| Cash and due from banks | $ | 182,776 | $ | 134,056 | $ | 148,148 | |||
| Short-term investments | 945,633 | 435,911 | 1,055,096 | ||||||
| Total cash and cash equivalents | 1,128,409 | 569,967 | 1,203,244 | ||||||
| Trading securities, at fair value | 5,258 | 5,560 | 6,142 | ||||||
| Equity securities, at fair value | 655 | 13,278 | 13,029 | ||||||
| Securities available for sale, at fair value | 655,723 | 661,740 | 1,022,285 | ||||||
| Securities held to maturity, at amortized cost | 507,658 | 512,277 | 543,351 | ||||||
| Federal Home Loan Bank stock | 19,565 | 30,685 | 22,689 | ||||||
| Total securities | 1,188,859 | 1,223,540 | 1,607,496 | ||||||
| Less: Allowance for credit losses on investment securities | (64 | ) | (65 | ) | (68 | ) | |||
| Net securities | 1,188,795 | 1,223,475 | 1,607,428 | ||||||
| Loans held for sale | 3,076 | 50,634 | 2,237 | ||||||
| Commercial real estate loans | 4,848,824 | 4,741,689 | 4,527,012 | ||||||
| Commercial and industrial loans | 1,461,341 | 1,409,538 | 1,352,834 | ||||||
| Residential mortgages | 2,701,227 | 2,688,709 | 2,672,677 | ||||||
| Consumer loans | 373,602 | 372,386 | 487,163 | ||||||
| Total loans | 9,384,994 | 9,212,322 | 9,039,686 | ||||||
| Less: Allowance for credit losses on loans | (114,700 | ) | (112,047 | ) | (105,357 | ) | |||
| Net loans | 9,270,294 | 9,100,275 | 8,934,329 | ||||||
| Premises and equipment, net | 56,609 | 54,667 | 68,915 | ||||||
| Other intangible assets | 15,064 | 16,192 | 19,664 | ||||||
| Other assets | 604,231 | 582,422 | 584,066 | ||||||
| Assets held for sale | 6,930 | 6,930 | 10,938 | ||||||
| Total assets | $ | 12,273,408 | $ | 11,604,562 | $ | 12,430,821 | |||
| Liabilities and shareholders' equity | |||||||||
| Non-interest bearing deposits | $ | 2,324,879 | $ | 2,267,595 | $ | 2,469,164 | |||
| NOW and other deposits | 841,406 | 748,737 | 858,644 | ||||||
| Money market deposits | 3,610,521 | 3,042,712 | 3,565,516 | ||||||
| Savings deposits | 1,021,716 | 998,549 | 1,053,810 | ||||||
| Time deposits | 2,576,682 | 2,519,896 | 2,686,250 | ||||||
| Total deposits | 10,375,204 | 9,577,489 | 10,633,384 | ||||||
| Federal Home Loan Bank advances | 316,482 | 585,542 | 385,223 | ||||||
| Subordinated borrowings | 121,612 | 121,549 | 121,363 | ||||||
| Total borrowings | 438,094 | 707,091 | 506,586 | ||||||
| Other liabilities | 292,686 | 249,531 | 278,630 | ||||||
| Total liabilities | 11,105,984 | 10,534,111 | 11,418,600 | ||||||
| Common shareholders' equity | 1,167,424 | 1,070,451 | 1,012,221 | ||||||
| Total shareholders' equity | 1,167,424 | 1,070,451 | 1,012,221 | ||||||
| Total liabilities and shareholders' equity | $ | 12,273,408 | $ | 11,604,562 | $ | 12,430,821 |
7
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended | Years Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| (in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Interest income | $ | 150,555 | $ | 150,537 | $ | 613,938 | $ | 576,299 | ||||
| Interest expense | 63,700 | 62,116 | 262,352 | 207,252 | ||||||||
| Net interest income, non FTE | 86,855 | 88,421 | 351,586 | 369,047 | ||||||||
| Non-interest income | ||||||||||||
| Deposit related fees | 8,237 | 8,481 | 33,759 | 34,155 | ||||||||
| Loan related fees | 3,039 | 2,058 | 11,280 | 10,595 | ||||||||
| Gain on SBA loans | 4,635 | 2,382 | 12,648 | 10,334 | ||||||||
| Wealth management fees | 2,658 | 2,394 | 10,840 | 10,197 | ||||||||
| Fair value adjustments on securities | (352 | ) | 768 | 7 | 513 | |||||||
| Other | 4,943 | 591 | 13,576 | 2,045 | ||||||||
| Total non-interest income excluding gains and losses | 23,160 | 16,674 | 82,110 | 67,839 | ||||||||
| Gain on sale of business operations and assets, net | 193 | - | 16,241 | - | ||||||||
| (Loss) on sale of securities | (28 | ) | (25,057 | ) | (49,937 | ) | (25,057 | ) | ||||
| Total non-interest income | 23,325 | (8,383 | ) | 48,414 | 42,782 | |||||||
| Total net revenue | 110,180 | 80,038 | 400,000 | 411,829 | ||||||||
| Provision expense for credit losses | 6,000 | 7,000 | 23,999 | 31,999 | ||||||||
| Non-interest expense | ||||||||||||
| Compensation and benefits | 38,929 | 40,095 | 160,453 | 159,281 | ||||||||
| Occupancy and equipment | 7,334 | 8,553 | 31,469 | 35,718 | ||||||||
| Technology | 10,241 | 11,326 | 40,395 | 41,878 | ||||||||
| Professional services | 2,765 | 3,417 | 10,307 | 11,643 | ||||||||
| Regulatory expenses | 1,851 | 1,854 | 7,395 | 7,019 | ||||||||
| Amortization of intangible assets | 1,128 | 1,205 | 4,601 | 4,820 | ||||||||
| Marketing | 2,013 | 1,107 | 4,522 | 5,377 | ||||||||
| Merger, restructuring and other non-operating expenses | 6,557 | 3,669 | 9,493 | 6,261 | ||||||||
| Other expenses | 6,757 | 7,766 | 27,851 | 29,511 | ||||||||
| Total non-interest expense | 77,575 | 78,992 | 296,486 | 301,508 | ||||||||
| Total non-interest expense excluding non-operating expenses | 71,018 | 75,323 | 286,993 | 295,247 | ||||||||
| Income before income taxes | $ | 26,605 | $ | (5,954 | ) | $ | 79,515 | $ | 78,322 | |||
| Income tax expense | 6,948 | (4,509 | ) | 18,512 | 8,724 | |||||||
| Net income | $ | 19,657 | $ | (1,445 | ) | $ | 61,003 | $ | 69,598 | |||
| Basic earnings per common share | $ | 0.46 | $ | (0.03 | ) | $ | 1.44 | $ | 1.61 | |||
| Diluted earnings per common share | $ | 0.46 | $ | (0.03 | ) | $ | 1.43 | $ | 1.60 | |||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 42,661 | 42,852 | 42,508 | 43,288 | ||||||||
| Diluted | 43,064 | 43,101 | 42,761 | 43,504 |
8
CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend)
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | 2024 | 2024 | 2024 | 2024 | 2023 | ||||||||||
| Interest income | $ | 150,555 | $ | 157,268 | $ | 154,109 | $ | 152,006 | $ | 150,537 | |||||
| Interest expense | 63,700 | 69,209 | 65,577 | 63,866 | 62,116 | ||||||||||
| Net interest income, non FTE | 86,855 | 88,059 | 88,532 | 88,140 | 88,421 | ||||||||||
| Non-interest income | |||||||||||||||
| Deposit related fees | 8,237 | 8,656 | 8,561 | 8,305 | 8,481 | ||||||||||
| Loan related fees | 3,039 | 3,214 | 2,364 | 2,663 | 2,058 | ||||||||||
| Gain on SBA loans | 4,635 | 3,020 | 3,294 | 1,699 | 2,382 | ||||||||||
| Wealth management fees | 2,658 | 2,685 | 2,613 | 2,884 | 2,394 | ||||||||||
| Fair value adjustments on securities | (352 | ) | 516 | (42 | ) | (115 | ) | 768 | |||||||
| Other | 4,943 | 3,416 | 3,343 | 1,874 | 591 | ||||||||||
| Total non-interest income excluding gains and losses | 23,160 | 21,507 | 20,133 | 17,310 | 16,674 | ||||||||||
| Gain on sale of business operations and assets, net | 193 | 16,048 | - | - | - | ||||||||||
| Loss on sale of securities | (28 | ) | - | - | (49,909 | ) | (25,057 | ) | |||||||
| Total non-interest income | 23,325 | 37,555 | 20,133 | (32,599 | ) | (8,383 | ) | ||||||||
| Total net revenue | 110,180 | 125,614 | 108,665 | 55,541 | 80,038 | ||||||||||
| Provision expense for credit losses | 6,000 | 5,500 | 6,499 | 6,000 | 7,000 | ||||||||||
| Non-interest expense | |||||||||||||||
| Compensation and benefits | 38,929 | 40,663 | 40,126 | 40,735 | 40,095 | ||||||||||
| Occupancy and equipment | 7,334 | 7,373 | 8,064 | 8,698 | 8,553 | ||||||||||
| Technology | 10,241 | 10,014 | 10,236 | 9,904 | 11,326 | ||||||||||
| Professional services | 2,765 | 2,109 | 2,757 | 2,676 | 3,417 | ||||||||||
| Regulatory expenses | 1,851 | 1,851 | 1,848 | 1,845 | 1,854 | ||||||||||
| Amortization of intangible assets | 1,128 | 1,128 | 1,140 | 1,205 | 1,205 | ||||||||||
| Marketing | 2,013 | 861 | 532 | 1,116 | 1,107 | ||||||||||
| Merger, restructuring and other non-operating expenses | 6,557 | (297 | ) | (384 | ) | 3,617 | 3,669 | ||||||||
| Other expenses | 6,757 | 8,258 | 6,612 | 6,224 | 7,766 | ||||||||||
| Total non-interest expense | 77,575 | 71,960 | 70,931 | 76,020 | 78,992 | ||||||||||
| Total non-interest expense excluding non-operating expenses | 71,018 | 72,257 | 71,315 | 72,403 | 75,323 | ||||||||||
| Income/(loss) before income taxes | $ | 26,605 | $ | 48,154 | $ | 31,235 | $ | (26,479 | ) | $ | (5,954 | ) | |||
| Income tax expense/(benefit) | 6,948 | 10,645 | 7,210 | (6,291 | ) | (4,509 | ) | ||||||||
| Net income/(loss) | $ | 19,657 | $ | 37,509 | $ | 24,025 | $ | (20,188 | ) | $ | (1,445 | ) | |||
| Diluted earnings/(loss) per common share | $ | 0.46 | $ | 0.88 | $ | 0.57 | $ | (0.47 | ) | $ | (0.03 | ) | |||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 42,661 | 42,170 | 42,437 | 42,777 | 42,852 | ||||||||||
| Diluted | 43,064 | 42,454 | 42,508 | 43,028 | 43,101 |
9
AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS
| Quarters Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | September 30, 2024 | December 31, 2023 | |||||||||||||||||
| (in millions) | Average Balance | Interest (1) | Average Yield/Rate | Average Balance | Interest (1) | Average Yield/Rate | Average Balance | Interest (1) | Average Yield/Rate | ||||||||||
| Assets | |||||||||||||||||||
| Commercial real estate | $ | 4,772 | $ | 77 | 6.32 | % | $ | 4,717 | $ | 79 | 6.54 | % | $ | 4,469 | $ | 74 | 6.45 | % | |
| Commercial and industrial loans | 1,435 | 27 | 7.24 | 1,380 | 27 | 7.79 | 1,367 | 26 | 7.60 | ||||||||||
| Residential mortgages | 2,690 | 29 | 4.32 | 2,712 | 30 | 4.31 | 2,656 | 27 | 4.06 | ||||||||||
| Consumer loans | 374 | 6 | 6.29 | 424 | 8 | 7.43 | 498 | 9 | 7.31 | ||||||||||
| Total loans | 9,271 | 139 | 5.88 | 9,233 | 144 | 6.11 | 8,990 | 136 | 5.97 | ||||||||||
| Securities (2) | 1,347 | 9 | 2.66 | 1,340 | 8 | 2.49 | 2,080 | 12 | 2.40 | ||||||||||
| Short-term investments and loans held for sale | 466 | 5 | 4.25 | 563 | 7 | 4.98 | 350 | 4 | 4.22 | ||||||||||
| New York branch loans held for sale (3) | - | - | - | 31 | - | 5.44 | - | - | - | ||||||||||
| Total earning assets | 11,084 | 153 | 5.42 | 11,167 | 159 | 5.62 | 11,420 | 152 | 5.26 | ||||||||||
| Goodwill and other intangible assets | 15 | 17 | 20 | ||||||||||||||||
| Other assets | 497 | 511 | 422 | ||||||||||||||||
| Total assets | $ | 11,596 | $ | 11,695 | $ | 11,862 | |||||||||||||
| Liabilities and shareholders' equity | |||||||||||||||||||
| Non-interest-bearing demand deposits | $ | 2,293 | $ | - | - | % | $ | 2,250 | $ | - | - | % | $ | 2,488 | $ | - | - | % | |
| NOW and other | 764 | 3 | 1.44 | 743 | 3 | 1.54 | 833 | 3 | 1.38 | ||||||||||
| Money market | 3,046 | 23 | 3.02 | 2,935 | 25 | 3.35 | 2,995 | 23 | 3.08 | ||||||||||
| Savings | 1,003 | 3 | 1.09 | 1,002 | 3 | 1.17 | 1,062 | 2 | 0.90 | ||||||||||
| Time | 2,553 | 27 | 4.22 | 2,430 | 26 | 4.31 | 2,558 | 25 | 3.77 | ||||||||||
| Total deposits | 9,659 | 56 | 2.30 | 9,360 | 57 | 2.42 | 9,936 | 53 | 2.11 | ||||||||||
| Borrowings (4) | 602 | 8 | 5.20 | 782 | 11 | 5.44 | 668 | 9 | 5.45 | ||||||||||
| New York branch non-interest-bearing deposits held for sale (3) | - | - | - | 51 | - | - | - | - | - | ||||||||||
| New York branch interest-bearing deposits held for sale (3) | - | - | - | 207 | 1 | 2.87 | - | - | - | ||||||||||
| Total funding liabilities | 10,261 | 64 | 2.47 | 10,400 | 69 | 2.64 | 10,604 | 62 | 2.32 | ||||||||||
| Other liabilities | 240 | 245 | 292 | ||||||||||||||||
| Total liabilities | 10,501 | 10,645 | 10,896 | ||||||||||||||||
| Common shareholders' equity (5) | 1,095 | 1,050 | 966 | ||||||||||||||||
| Total shareholders' equity | 1,095 | 1,050 | 966 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 11,596 | $ | 11,695 | $ | 11,862 | |||||||||||||
| Net interest margin, FTE | 3.14 | 3.16 | 3.11 | ||||||||||||||||
| Supplementary data | |||||||||||||||||||
| Net Interest Income, non FTE | 86.855 | 88.059 | 88.421 | ||||||||||||||||
| FTE income adjustment | 1.943 | 2.023 | 2.021 | ||||||||||||||||
| Net Interest Income, FTE | 88.798 | 90.082 | 90.442 | ||||||||||||||||
| (1) | Interest<br>income and expense presented on a fully taxable equivalent basis. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (2) | Average<br>balances for securities available-for-sale are based on amortized cost. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (3) | New<br>York branch loans and deposits moved to held for sale on March 4, 2024. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (4) | Average<br>balances for borrowings includes the financing lease obligation which is presented under other liabilities on the consolidated balance<br>sheet. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (5) | Unrealized<br>gains and losses, net of tax, are included in average equity. Prior period balances and financial metrics have been updated to reflect<br>the current presentation. | ||||||||||||||||||
| --- | --- |
10
ASSETQUALITY ANALYSIS
| At<br> or for the Quarters Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
| (in thousands) | 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||||||
| NON-PERFORMING ASSETS | ||||||||||||||||||||
| Commercial real estate | $ | 10,393 | $ | 10,270 | $ | 5,976 | $ | 4,762 | $ | 4,453 | ||||||||||
| Commercial and industrial loans | 9,156 | 8,227 | 8,489 | 9,174 | 8,712 | |||||||||||||||
| Residential mortgages | 3,830 | 4,348 | 5,491 | 5,992 | 6,404 | |||||||||||||||
| Consumer loans | 1,068 | 1,124 | 1,392 | 1,526 | 1,838 | |||||||||||||||
| Total non-performing loans | 24,447 | 23,969 | 21,348 | 21,454 | 21,407 | |||||||||||||||
| Repossessed assets | 2,280 | 2,563 | 2,549 | 2,689 | 2,601 | |||||||||||||||
| Total non-performing assets | $ | 26,727 | $ | 26,532 | $ | 23,897 | $ | 24,143 | $ | 24,008 | ||||||||||
| Total non-performing loans/total loans | 0.26 | % | 0.26 | % | 0.23 | % | 0.24 | % | 0.24 | % | ||||||||||
| Total non-performing assets/total assets | 0.22 | % | 0.23 | % | 0.20 | % | 0.20 | % | 0.19 | % | ||||||||||
| PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS | ||||||||||||||||||||
| Balance at beginning of period | $ | 112,047 | $ | 112,167 | $ | 107,331 | $ | 105,357 | $ | 102,792 | ||||||||||
| Charged-off loans | (4,553 | ) | (7,091 | ) | (3,246 | ) | (5,636 | ) | (6,891 | ) | ||||||||||
| Recoveries on charged-off loans | 1,206 | 1,471 | 1,583 | 1,610 | 2,456 | |||||||||||||||
| Net loans charged-off | (3,347 | ) | (5,620 | ) | (1,663 | ) | (4,026 | ) | (4,435 | ) | ||||||||||
| Provision (benefit)/expense for loan credit losses | 6,000 | 5,500 | 6,499 | 6,000 | 7,000 | |||||||||||||||
| Balance at end of period | $ | 114,700 | $ | 112,047 | $ | 112,167 | $ | 107,331 | $ | 105,357 | ||||||||||
| Allowance for credit losses/total loans | 1.22 | % | 1.22 | % | 1.22 | % | 1.18 | % | 1.17 | % | ||||||||||
| Allowance for credit losses/non-performing loans | 469 | % | 467 | % | 525 | % | 500 | % | 492 | % | ||||||||||
| NET LOAN CHARGE-OFFS | ||||||||||||||||||||
| Commercial real estate | $ | (121 | ) | $ | (999 | ) | $ | 22 | $ | 292 | $ | 316 | ||||||||
| Commercial and industrial loans | (2,309 | ) | (1,009 | ) | (711 | ) | (1,772 | ) | (2,309 | ) | ||||||||||
| Residential mortgages | 552 | 273 | 316 | 98 | 55 | |||||||||||||||
| Home equity | 1 | 3 | 8 | 193 | 83 | |||||||||||||||
| Other consumer loans | (1,470 | ) | (3,888 | ) | (1,298 | ) | (2,837 | ) | (2,580 | ) | ||||||||||
| Total, net | $ | (3,347 | ) | $ | (5,620 | ) | $ | (1,663 | ) | $ | (4,026 | ) | $ | (4,435 | ) | |||||
| Net charge-offs (QTD annualized)/average loans | 0.14 | % | 0.24 | % | 0.07 | % | 0.18 | % | 0.20 | % | ||||||||||
| Net charge-offs (YTD annualized)/average loans | 0.16 | % | 0.16 | % | 0.13 | % | 0.18 | % | 0.26 | % | ||||||||||
| DELINQUENT AND NON-PERFORMING<br> LOANS | Balance | Percent<br><br> of Total<br><br> Loans | Balance | Percent<br> of <br><br> Total <br><br> Loans | Balance | Percent<br> of <br><br> Total<br><br> Loans | Balance | Percent<br> of <br><br> Total<br><br> Loans | Balance | Percent<br> of <br><br> Total<br><br> Loans | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 30-89 Days delinquent | $ | 17,591 | 0.19 | % | $ | 18,526 | 0.20 | % | $ | 18,494 | 0.20 | % | $ | 27,682 | 0.30 | % | $ | 22,140 | 0.24 | % |
| 90+ Days delinquent and still accruing | 6,417 | 0.07 | % | 6,280 | 0.07 | % | 11,672 | 0.13 | % | 5,882 | 0.06 | % | 5,537 | 0.06 | % | |||||
| Total accruing delinquent loans | 24,008 | 0.26 | % | 24,806 | 0.27 | % | 30,166 | 0.33 | % | 33,564 | 0.36 | % | 27,677 | 0.30 | % | |||||
| Non-performing loans | 24,447 | 0.26 | % | 23,969 | 0.26 | % | 21,348 | 0.23 | % | 21,454 | 0.24 | % | 21,407 | 0.24 | % | |||||
| Total delinquent and non-performing loans | $ | 48,455 | 0.52 | % | $ | 48,775 | 0.53 | % | $ | 51,514 | 0.56 | % | $ | 55,018 | 0.60 | % | $ | 49,084 | 0.54 | % |
11
NON-GAAP FINANCIAL MEASURES
This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP operating earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP operating earnings information set forth is not necessarily comparable to non- GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.
The Company utilizes the non-GAAP measure of operating earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include restructuring costs. Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch consolidations.
The Company also calculates operating earnings per share based on its measure of operating earnings and diluted common shares. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s performance. Adjustments in 2024 were primarily related to the pending merger, branch sales and consolidations, and loss on sale of securities. Adjustments in 2023 were primarily related to branch consolidations, severance charges related to a workforce reduction, and loss on sale of AFS securities.
Management believes that the computation of non-GAAP operating earnings and operating earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.
12
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA
| At or for the<br> Quarters Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||
| (in thousands) | 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||
| Total non-interest income | $ | 23,325 | $ | 37,555 | $ | 20,133 | $ | (32,599 | ) | $ | (8,383 | ) | ||||
| Adj: Net (gains) on sale of business operations and assets | (193 | ) | (16,048 | ) | - | - | - | |||||||||
| Adj: Loss on sale of securities | 28 | - | - | 49,909 | 25,057 | |||||||||||
| Total operating non-interest income (1) | $ | 23,160 | $ | 21,507 | $ | 20,133 | $ | 17,310 | $ | 16,674 | ||||||
| Total revenue | (A) | $ | 110,180 | $ | 125,614 | $ | 108,665 | $ | 55,541 | $ | 80,038 | |||||
| Adj: Net (gains) on sale of business operations and assets | (193 | ) | (16,048 | ) | - | - | - | |||||||||
| Adj: Loss on sale of securities | 28 | - | - | 49,909 | 25,057 | |||||||||||
| Total operating revenue (1) | (B) | $ | 110,015 | $ | 109,566 | $ | 108,665 | $ | 105,450 | $ | 105,095 | |||||
| Total non-interest expense | (C) | $ | 77,575 | $ | 71,960 | $ | 70,931 | $ | 76,020 | $ | 78,992 | |||||
| Adj: Merger, restructuring and other non-operating expenses | (6,557 | ) | 297 | 384 | (3,617 | ) | (3,669 | ) | ||||||||
| Operating non-interest expense (1) | (D) | $ | 71,018 | $ | 72,257 | $ | 71,315 | $ | 72,403 | $ | 75,323 | |||||
| Pre-tax, pre-provision net revenue (PPNR) | (A-C) | $ | 32,605 | $ | 53,654 | $ | 37,734 | $ | (20,479 | ) | $ | 1,046 | ||||
| Operating pre-tax, pre-provision net revenue (PPNR) (1) | (B-D) | 38,997 | 37,309 | 37,350 | 33,047 | 29,772 | ||||||||||
| Net income/(loss) | $ | 19,657 | $ | 37,509 | $ | 24,025 | $ | (20,188 | ) | $ | (1,445 | ) | ||||
| Adj: Net (gains) on sale of business operations and assets | (193 | ) | (16,048 | ) | - | - | - | |||||||||
| Adj: Loss on sale of securities | 28 | - | - | 49,909 | 25,057 | |||||||||||
| Adj: Merger, restructuring expense and other non-operating<br> expenses | 6,557 | (297 | ) | (384 | ) | 3,617 | 3,669 | |||||||||
| Adj: Income taxes (expense)/benefit | (67 | ) | 3,625 | (473 | ) | (12,404 | ) | (7,091 | ) | |||||||
| Total operating income (1) | (E) | $ | 25,982 | $ | 24,789 | $ | 23,168 | $ | 20,934 | $ | 20,190 | |||||
| (in millions, except per share data) | ||||||||||||||||
| Total average assets | (F) | $ | 11,596 | $ | 11,695 | $ | 11,692 | $ | 11,755 | $ | 11,862 | |||||
| Total average shareholders' equity | (G) | 1,095 | 1,050 | 1,013 | 1,018 | 966 | ||||||||||
| Total average tangible shareholders' equity (1) | (I) | 1,080 | 1,034 | 995 | 999 | 946 | ||||||||||
| Total accumulated other comprehensive (loss) net of tax, end<br> of period | (106 | ) | (89 | ) | (115 | ) | (114 | ) | (143 | ) | ||||||
| Total tangible shareholders' equity, end of period (1) | (K) | 1,152 | 1,054 | 996 | 991 | 993 | ||||||||||
| Total tangible assets, end of period (1) | (L) | 12,258 | 11,588 | 12,202 | 12,128 | 12,411 | ||||||||||
| Total<br> common shares outstanding, end of period (thousands) | (M) | 46,424 | 42,982 | 42,959 | 43,415 | 43,501 | ||||||||||
| Average<br> diluted shares outstanding (thousands) | (N) | 43,064 | 42,454 | 42,508 | 43,028 | 43,101 | ||||||||||
| Earnings/(loss) per common share, diluted (1) | $ | 0.46 | $ | 0.88 | $ | 0.57 | $ | (0.47 | ) | $ | (0.03 | ) | ||||
| Operating earnings per common share, diluted (1) | (E/N) | 0.60 | 0.58 | 0.55 | 0.49 | 0.47 | ||||||||||
| Tangible book value per common share, end of period (1) | (K/M) | 24.82 | 24.53 | 23.18 | 22.84 | 22.82 | ||||||||||
| Total tangible shareholders' equity/total tangible assets<br> (1) | (K/L) | 9.40 | 9.10 | 8.16 | 8.17 | 8.00 | ||||||||||
| Performance ratios (2) | ||||||||||||||||
| Return on equity | 7.18 | % | 14.29 | % | 9.49 | % | (7.93 | )% | (0.60 | )% | ||||||
| Operating return on equity (1) | (E/G) | 9.49 | 9.44 | 9.15 | 8.23 | 8.36 | ||||||||||
| Return on tangible common equity (1)(3) | 7.59 | 14.83 | 9.99 | (7.73 | ) | (0.24 | ) | |||||||||
| Operating return on tangible common equity (1)(3) | (E+Q)/(I) | 9.93 | 9.91 | 9.65 | 8.73 | 8.90 | ||||||||||
| Return on assets | 0.68 | 1.28 | 0.82 | (0.69 | ) | (0.05 | ) | |||||||||
| Operating return on assets (1) | (E/F) | 0.90 | 0.85 | 0.79 | 0.71 | 0.68 | ||||||||||
| Efficiency ratio (1)(6) | (D-Q)/(B+O+R) | 62.43 | 63.74 | 63.40 | 66.26 | 67.77 | ||||||||||
| Supplementary data (in thousands) | ||||||||||||||||
| Tax benefit on tax-credit investments (4) | (O) | N/M | N/M | N/M | N/M | $ | 2,252 | |||||||||
| Non-interest income tax-credit investments amortization (5) | (P) | N/M | N/M | N/M | N/M | (2,060 | ) | |||||||||
| Net income on tax-credit investments | (O+P) | N/M | N/M | N/M | N/M | 193 | ||||||||||
| Effective tax rate | 26.1 | % | 22.1 | % | 23.1 | % | 23.8 | % | 75.7 | % | ||||||
| Intangible amortization | (Q) | $ | 1,128 | $ | 1,128 | $ | 1,140 | $ | 1,205 | $ | 1,205 | |||||
| Fully taxable equivalent income adjustment | (R) | 1,943 | 2,023 | 2,013 | 2,006 | 2,021 | ||||||||||
| (1) | Non-GAAP<br> financial measure. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Ratios<br> are annualized and based on average balance sheet amounts, where applicable. Quarterly data<br> may not sum to year-to-date data due to rounding. | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | Amortization<br> of intangible assets is adjusted assuming a 27% marginal tax rate. | |||||||||||||||
| --- | --- | |||||||||||||||
| (4) | The<br> tax benefit is the direct reduction to the income tax provision due to tax credit investments. | |||||||||||||||
| --- | --- | |||||||||||||||
| (5) | The<br> non-interest income amortization is the reduction to the tax-advantaged investments and are<br> incurred as the tax credits are generated. | |||||||||||||||
| --- | --- | |||||||||||||||
| (6) | As<br> of January 1, 2024, the Company elected the proportional amortization method for certain<br> tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts. Excluding<br> the impact of tax credits in 2023, the efficiency ratio for the quarter ending December 31,<br> 2023 was 69.19%. | |||||||||||||||
| --- | --- |
13
RECONCILIATION OF NON-GAAPFINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED
| At or for the<br> Years Ended | |||||||
|---|---|---|---|---|---|---|---|
| December 31, | December 31, | ||||||
| (in thousands) | 2024 | 2023 | |||||
| Total non-interest income | $ | 48,414 | $ | 42,782 | |||
| Adj: Net (gains) on sale of business operations and assets | (16,241 | ) | - | ||||
| Adj: Loss on sale of securities | 49,937 | 25,057 | |||||
| Total operating non-interest income (1) | $ | 82,110 | $ | 67,839 | |||
| Total revenue | (A) | $ | 400,000 | $ | 411,829 | ||
| Adj: Net (gains) on sale of business operations and assets | (16,241 | ) | - | ||||
| Adj: Loss on sale of securities | 49,937 | 25,057 | |||||
| Total operating revenue (1) | (B) | $ | 433,696 | $ | 436,886 | ||
| Total non-interest expense | (C) | $ | 296,486 | $ | 301,508 | ||
| Less: Merger, restructuring and other non-operating expenses | (9,493 | ) | (6,261 | ) | |||
| Operating non-interest expense (1) | (D) | $ | 286,993 | $ | 295,247 | ||
| Pre-tax, pre-provision net revenue (PPNR) | (A-C) | $ | 103,514 | $ | 110,321 | ||
| Operating pre-tax, pre-provision net revenue (PPNR) (1) | (B-D) | 146,703 | 141,639 | ||||
| Net income | $ | 61,003 | $ | 69,598 | |||
| Adj: Net (gains) on sale of business operations and assets | (16,241 | ) | - | ||||
| Adj: Loss on sale of securities | 49,937 | 25,057 | |||||
| Adj: Merger, restructuring expense and other non-operating<br> expenses | 9,493 | 6,261 | |||||
| Adj: Income taxes (expense) | (9,319 | ) | (7,723 | ) | |||
| Total operating income (1) | (E) | $ | 94,873 | $ | 93,193 | ||
| (in millions, except per share data) | |||||||
| Total average assets | (F) | $ | 11,683 | $ | 11,838 | ||
| Total average shareholders' equity | (G) | 1,044 | 984 | ||||
| Total average tangible shareholders' equity (1) | (I) | 1,027 | 962 | ||||
| Total accumulated other comprehensive (loss) net of tax, end<br> of period | (106 | ) | (143 | ) | |||
| Total tangible shareholders' equity, end of period (1) | (K) | 1,152 | 993 | ||||
| Total tangible assets, end of period (1) | (L) | 12,258 | 12,411 | ||||
| Total<br> common shares outstanding, end of period (thousands) | (M) | 46,424 | 43,501 | ||||
| Average<br> diluted shares outstanding (thousands) | (N) | 42,761 | 43,504 | ||||
| Earnings per common share, diluted (1) | $ | 1.43 | $ | 1.60 | |||
| Operating earnings per common share, diluted (1) | (E/N) | 2.22 | 2.14 | ||||
| Tangible book value per common share, end of period (1) | (K/M) | 24.82 | 22.82 | ||||
| Total tangible shareholders' equity/total tangible assets<br> (1) | (K/L) | 9.40 | 8.00 | ||||
| Performance ratios (2) | |||||||
| Return on equity | 5.84 | % | 7.07 | % | |||
| Operating return on equity (1) | (E/G) | 9.09 | 9.47 | ||||
| Return on tangible common equity (1)(3) | 6.27 | 7.60 | |||||
| Operating return on tangible common equity (1)(3) | (E+Q)/(I) | 9.56 | 10.05 | ||||
| Return on assets | 0.52 | 0.59 | |||||
| Operating return on assets (1) | (E/F) | 0.81 | 0.79 | ||||
| Efficiency ratio (1)(6) | (D-Q)/(B+O+R) | 63.94 | 63.88 | ||||
| Net interest margin, FTE | 3.16 | 3.27 | |||||
| Supplementary data (in thousands) | |||||||
| Tax benefit on tax-credit investments (4) | (O) | N/M | $ | 9,863 | |||
| Non-interest income charge on tax-credit investments (5) | (P) | N/M | (8,018 | ) | |||
| Net income on tax-credit investments | (O+P) | N/M | 1,845 | ||||
| Intangible amortization | (Q) | $ | 4,601 | $ | 4,820 | ||
| Fully taxable equivalent income adjustment | (R) | 7,985 | 7,870 | ||||
| (1) | Non-GAAP<br> financial measure. | ||||||
| --- | --- | ||||||
| (2) | Ratios<br> are annualized and based on average balance sheet amounts, where applicable. Quarterly data<br> may not sum to year-to-date data due to rounding. | ||||||
| --- | --- | ||||||
| (3) | Amortization<br> of intangible assets is adjusted assuming a 27% marginal tax rate. | ||||||
| --- | --- | ||||||
| (4) | The<br> tax benefit is the direct reduction to the income tax provision due to tax credit investments. | ||||||
| --- | --- | ||||||
| (5) | The<br> non-interest income amortization is the reduction to the tax-advantaged investments and are<br> incurred as the tax credits are generated. | ||||||
| --- | --- | ||||||
| (6) | As<br> of January 1, 2024, the Company elected the proportional amortization method for certain<br> tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts. Excluding<br> the impact of tax credits in 2023, the efficiency ratio for the year ending December 31,<br> 2023 was 65.30%. | ||||||
| --- | --- |
14