- Loans increased 6.0% and deposits increased 2.4% in the second
quarter
- Continued improvements in credit quality; Nonperforming assets
to total assets ratio decreased three basis points to 0.27%
- Executed a cost reduction initiative during the second quarter
to improve efficiency
Opus Bank ("Opus") (NASDAQ: “OPB”) announced today net income of
$8.7 million, or $0.23 per diluted share, for the second quarter of
2019, compared to net income of $10.9 million, or $0.28 per diluted
share, for the first quarter of 2019. Net income during the second
quarter of 2019 included $4.9 million of expenses related to our
cost reduction initiative and certain other strategic actions, of
which $4.3 million was severance expense, as well as an increase in
our effective tax rate of approximately seven percentage points
that was driven by the cost reduction initiative. Together, these
items impacted earnings by $0.12 per diluted share.
Additionally, Opus announced today that its Board of Directors
has approved the payment of a quarterly cash dividend of $0.11 per
common share payable on August 22, 2019 to common stockholders of
record as of August 8, 2019, and a common-equivalent payment to its
Series A Preferred stockholders.
Earnings Summary
(unaudited)
For the three months ended
($ in thousands, except per share
data)
June 30, 2019
March 31, 2019
June 30, 2018
Net income
$
8,686
$
10,861
$
15,464
Earnings per diluted share
0.23
0.28
0.40
Return on average assets
0.45
%
0.60
%
0.86
%
Return on average stockholders' equity
3.29
%
4.19
%
6.03
%
Return on average tangible common
equity1
5.28
%
6.76
%
9.93
%
Efficiency ratio
71.32
%
70.61
%
66.29
%
Adjusted Earnings1
Adjusted net income
$
13,308
$
12,305
$
15,367
Adjusted earnings per diluted share
0.35
0.32
0.40
Adjusted return on average assets
0.68
%
0.68
%
0.85
%
Adjusted return on average stockholders'
equity
5.04
%
4.75
%
6.00
%
Adjusted return on average tangible common
equity
8.08
%
7.66
%
9.87
%
Adjusted efficiency ratio
63.55
%
67.93
%
65.95
%
[1] See reconciliation of non-GAAP
financial measures to corresponding GAAP measures on pages
16-17.
Paul W. Taylor, President and Chief Executive Officer of Opus
Bank, stated, "Our earnings performance in the second quarter
included earnings per diluted share of $0.23, or adjusted EPS of
$0.35, driven by strong loan growth from our multifamily lending
division, solid deposit growth, and positive contributions from
PENSCO and our Escrow and Exchange divisions. Additionally, credit
quality continued to improve, with Enterprise Value loans
decreasing 39% from the prior quarter to $64.5 million as of June
30th and nonperforming assets down to just 0.27% of total
assets.”
Mr. Taylor continued, “As demonstrated by our lower net interest
margin this period, we continue to navigate through a challenging
interest rate environment, with a flattening yield curve that is
plaguing the banking industry. Yet, we have recognized
opportunities to increase interest income and offset the impact of
rising funding costs, while also focusing on managing our
noninterest expenses. During the second quarter, we restructured
our expense base, which resulted in charges for severance and
higher income tax expenses during the quarter. We expect these
actions to improve our efficiency and result in greater
profitability in future quarters.”
Loans
Loans increased $327.5 million, or 6%, to $5.8 billion as of
June 30, 2019, from $5.5 billion as of March 31, 2019, and
increased $716.6 million, or 14%, from $5.1 billion as of June 30,
2018. The increase in loans during the second quarter of 2019 was
driven by new loan fundings of $703.6 million, partially offset by
loan payoffs of $238.7 million, which included planned exits of
$45.9 million. Additionally, during the second quarter, we
transferred $79.1 million of multifamily loans to held-for-sale,
which are anticipated to be sold during the third quarter of
2019.
Loan Balance Roll Forward
(unaudited)
Three Months Ended
($ in millions)
June 30, 2019
March 31, 2019
December 31, 2018
September 30, 2018
June 30, 2018
Beginning loan balance
$
5,461.5
$
5,165.2
$
5,159.9
$
5,072.4
$
5,229.0
New loan fundings
703.6
538.0
412.3
435.7
295.6
Loan payoffs
(192.8
)
(173.7
)
(265.3
)
(197.4
)
(299.5
)
Transfers to HFS
(79.1
)
—
—
—
—
Planned exits
(45.9
)
(22.5
)
(59.2
)
(60.6
)
(58.5
)
Other1
(58.3
)
(45.5
)
(82.5
)
(90.2
)
(94.2
)
Ending loan balance
$
5,789.0
$
5,461.5
$
5,165.2
$
5,159.9
$
5,072.4
[1] Includes normal amortization,
paydowns, charge-offs, and loan sales that were not planned
exits
New loan fundings in the second quarter of 2019 totaled $703.6
million, an increase of $165.6 million, or 31%, from the first
quarter of 2019 and an increase of $408.0 million, or 138%, from
the second quarter of 2018. The growth in new loan fundings
compared to the prior quarter and year-ago period was primarily
driven by multifamily loan originations, as favorable market
conditions and strong demand from borrowers continued in the second
quarter. Quarterly loan payoffs in the second quarter were $192.8
million, excluding planned loan exits, compared to $173.7 million
in the first quarter of 2019 and $299.5 million in the second
quarter of 2018.
Loan commitments originated during the second quarter of 2019
totaled $763.3 million, compared to $550.3 million during the first
quarter of 2019 and $306.5 million during the second quarter of
2018. Unfunded commitments on loans totaled $405.5 million as of
June 30, 2019.
Investment Securities
Investment securities totaled $1.1 billion as of June 30, 2019,
a decrease of $42.8 million, or 4%, compared to March 31, 2019, and
an increase of $27.2 million, or 3%, compared to June 30, 2018. The
decrease in investment securities compared to the first quarter was
primarily driven by accelerated amortization from pay downs on the
underlying loans.
Deposits and Borrowings
Deposits increased $146.6 million, or 2%, to $6.2 billion as of
June 30, 2019, from $6.1 billion as of March 31, 2019, and
increased $289.2 million, or 5%, from $5.9 billion as of June 30,
2018. Deposit growth during the second quarter of 2019 was
primarily driven by interest-bearing demand deposits generated by
our Escrow and Exchange, Fiduciary, and Municipal Banking
divisions, which increased $180.5 million, or 8%, compared to the
prior quarter. Certificates of deposit increased $81.0 million, or
10%, from the prior quarter. Noninterest-bearing demand deposits
decreased 6% from the prior quarter and measured 12% of total
deposits as of June 30, 2019. The average balance of deposits in
the second quarter of 2019 increased $224.9 million compared to the
prior quarter, as deposit inflows occurred earlier in the
period.
Our loan to deposit ratio was 93% as of June 30, 2019, compared
to 90% as of March 31, 2019 and 85% as of June 30, 2018.
Federal Home Loan Bank (FHLB) advances increased to $350.0
million as of June 30, 2019, compared to $330.0 million as of March
31, 2019, and no outstanding balance as of June 30, 2018. The
average balance of FHLB advances during the second quarter of 2019
was $351.9 million, compared to $122.0 million in the first quarter
of 2019 and $69.1 million in the second quarter of 2018.
Net Interest Income
Net interest income decreased 1% to $50.5 million for the second
quarter of 2019, compared to $50.8 million for the first quarter of
2019, and increased 2.0% compared to $49.5 million for the second
quarter of 2018. Interest income from loans increased 7% to $61.2
million for the second quarter of 2019, compared to $57.0 million
for the first quarter of 2019, driven primarily by a 9% increase in
the average balance of loans, while interest expense increased 27%
to $20.4 million for the second quarter of 2019, compared to $16.1
million for the first quarter of 2019. The increase in interest
expense during the second quarter of 2019 was driven by increased
balances and a higher rate of interest-bearing deposits, a change
in the mix of deposits to higher-cost deposit categories, and
higher average balances of FHLB advances.
Net Interest Margin
The current interest rate environment and flattening yield curve
continue to negatively impact our net interest margin (NIM).
Taxable equivalent NIM decreased 27 basis points to 2.88% in the
second quarter of 2019 from 3.15% in the first quarter of 2019, and
decreased 19 basis points from 3.07% in the second quarter of 2018.
The linked-quarter change was primarily driven by an 18 basis point
increase in the cost of funds from the prior quarter to 1.23% and a
nine basis point decrease in the yield on interest earning assets
to 4.04%. Our cost of deposits increased 14 basis points during the
second quarter of 2019 to 1.06%, primarily due to higher rates paid
on money market and time deposits, as competitive pricing pressure
in our western markets remained elevated. Other factors that
contributed to the decrease in NIM in the second quarter of 2019
included a six-basis-point decrease in the yield on investment
securities and one additional day in the second quarter compared to
the first quarter of 2019, which negatively impacted NIM by four
basis points.
Noninterest Income
Noninterest income increased 8% to $12.0 million in the second
quarter of 2019 from $11.1 million in the first quarter of 2019,
and decreased 7% from $12.9 in the second quarter of 2018. The
increase in noninterest income compared to the prior quarter was
driven by growth in trust administrative fees from PENSCO, our
alternative asset IRA custodian subsidiary, escrow and exchange
fees, deposit service charges, and other income. Other income in
the first quarter of 2019 included an impairment charge on a sublet
property of $489,000 primarily related to the exiting of Opus
Financial Partners, the company's broker-dealer, as a line of
business. Excluding this item, noninterest income increased 4% in
the second quarter of 2019 compared to the prior quarter.
Noninterest Expense
Noninterest expense increased 2% to $46.3 million in the second
quarter of 2019, compared to $45.4 million in the first quarter of
2019, and increased 7.4% compared to $43.1 million in the second
quarter of 2018. On an adjusted basis after giving effect to
expenses described in the paragraph below, noninterest expense
decreased 6% in the second quarter of 2019, primarily due to lower
compensation and benefits expense and a reduction in legal fees
from the prior quarter. Our efficiency ratio for the second quarter
of 2019 was 71.3%, or 63.5% on an adjusted basis, compared to 70.6%
for the first quarter of 2019, or 67.9% on an adjusted basis.
During the second quarter of 2019 we executed a cost reduction
initiative that included a reduction in workforce that generated
severance expense of $4.3 million. Additionally, other strategic
action related expenses totaled $583,000 during the second quarter,
which together with severance expense increased total noninterest
expense by $4.9 million. Noninterest expense during the first
quarter of 2019 included a $1.4 million expense related to a legal
settlement.
Income Tax Expense
We recorded an income tax expense of $4.2 million in the second
quarter of 2019, compared to an income tax expense of $3.4 million
in the first quarter of 2019 and an income tax expense of $4.1 in
the second quarter of 2018. Our effective tax rate for the second
quarter of 2019 was 32.7%, compared to 24.0% for the first quarter
of 2019 and 20.8% for the second quarter of 2018. The increase in
our effective tax rate during the second quarter of 2019 was
primarily driven by certain severance payments associated with the
cost reduction initiative, which resulted in annual compensation
that exceeded the deductible threshold under Internal Revenue Code
Section 162(m). These actions increased our effective tax rate by
approximately seven percentage points.
Asset Quality
Total nonperforming assets decreased 9% to $21.2 million as of
June 30, 2019, compared to $23.3 million as of March 31, 2019, and
decreased 47% compared to $40.0 million as of June 30, 2018. Our
ratio of nonperforming assets to total assets measured 0.27% as of
June 30, 2019, compared to 0.30% and 0.56% as of March 31, 2019 and
June 30, 2018, respectively. Total criticized loans decreased $14.6
million, or 10%, to $137.9 million as of June 30, 2019, compared to
$152.5 million as of March 31, 2019. Classified loans decreased
$16.1 million in the second quarter of 2019, while special mention
loans increased $1.5 million. Total Enterprise Value loans
decreased $40.5 million, or 39%, during the second quarter of 2019
and totaled $64.5 million as of June 30, 2019.
Our allowance for loan losses was $57.7 million, or 1.00% of
loans, as of June 30, 2019, compared to $58.5 million, or 1.07% of
loans, as of March 31, 2019, and $59.2 million, or 1.17% of loans,
as of June 30, 2018. Net charge-offs during the second quarter of
2019 were $4.0 million, or 0.28% of average loans annualized,
compared to net recoveries of $1.6 million, or (0.12)% of average
loans annualized, for the first quarter of 2019, and $8.4 million,
or 0.66% of average loans annualized, for the second quarter of
2018. The ratio of the allowance for loan losses to total
nonaccrual loans was 273% as of June 30, 2019, compared to 251% as
of March 31, 2019 and 148% as of June 30, 2018.
We recorded a provision expense for loan losses of $3.3 million
in the second quarter of 2019, compared to a provision expense of
$2.2 million in the first quarter of 2019 and a negative provision
of $213,000 in the second quarter of 2018. The provision expense
during the second quarter of 2019 was primarily driven by net
charge-offs, net loan growth, and risk rating migration, partially
offset by planned loan exits.
Capital
As of June 30, 2019, Opus exceeded all regulatory capital
requirements under Basel III and was considered to be a
"well-capitalized" financial institution, as summarized in the
table below:
Capital Ratios
As of
Well-Capitalized Regulatory
Requirements
(unaudited)
June 30, 2019¹
March 31, 2019
June 30, 2018
Tier 1 leverage ratio
9.30
%
9.86
%
9.85
%
5.00
%
Common Equity Tier 1 ratio
11.07
11.10
11.80
6.50
Tier 1 risk-based capital ratio
11.56
11.59
12.33
8.00
Total risk-based capital ratio
14.77
14.85
15.86
10.00
Tangible equity to tangible assets
ratio
9.26
9.27
9.67
NA
Tangible common equity to tangible assets
ratio
8.87
8.88
9.24
NA
[1] Regulatory capital ratios are
preliminary until filing of our June 30, 2019 FDIC call report.
Stockholders’ equity totaled over $1.1 billion as of June 30,
2019 and increased $13.2 million and $28.3 million compared to
March 31, 2019 and June 30, 2018, respectively. Our tangible book
value per common share increased $0.36 to $18.32 as of June 30,
2019, compared to $17.96 as of March 31, 2019 and increased $0.84
compared to $17.48 as of June 30, 2018.
Conference Call and Webcast Details
Date: Monday, July 29, 2019 Time: 8:00 a.m. PT (11:00 a.m.
ET)
Phone Number: (833) 628-4594 Conference ID: 6638938 Webcast URL:
http://investor.opusbank.com/event
Analysts, investors, and the general public may listen to our
discussion of Opus' second quarter performance and participate in
the question/answer session by using the phone number listed above
or through a live webcast of the conference available through a
link on the investor relations page of Opus' website at:
http://investor.opusbank.com/event. It
is recommended that participants dial into the conference call or
log into the webcast approximately 10 minutes prior to the
call.
Replay Information: For those who are not able to listen to the
call, an archived recording will be available beginning
approximately two hours following the completion of the call. To
listen to the call replay, dial (855) 859-2056, or for
international callers dial (404) 537-3406. The access code for
either replay number is 6638938. The call replay will be available
through August 29, 2019.
About Opus Bank
Opus Bank is an FDIC insured California-chartered commercial
bank with $7.9 billion of total assets, $5.9 billion of total
loans, and $6.2 billion in total deposits as of June 30, 2019. Opus
Bank provides commercial and retail banking products and solutions
to its clients in western markets from its headquarters in Irvine,
California and through 47 banking offices, including 28 in
California, 16 in the Seattle/Puget Sound region in Washington, two
in the Phoenix metropolitan area of Arizona and one in Portland,
Oregon. Opus Bank offers a suite of treasury and cash management
and depository solutions, and a wide range of loan products,
including commercial, healthcare, media and entertainment,
corporate finance, multifamily residential, commercial real estate
and structured finance, and is an SBA preferred lender. Opus Bank
offers commercial escrow services and facilitates 1031 Exchange
transactions through its Escrow and Exchange divisions.
Additionally, Opus Bank’s wholly-owned subsidiary, PENSCO Trust
Company, has approximately $14 billion of custodial IRA assets and
approximately 47,000 client accounts, which are comprised of
self-directed investors, financial institutions, capital raisers
and financial advisors. Opus Bank is an Equal Housing Lender. For
additional information about Opus Bank, please visit our website:
www.opusbank.com.
Forward Looking Statements
This release and the aforementioned conference call and webcast
includes forward-looking statements related to Opus’ plans, beliefs
and goals. Forward-looking statements are neither historical facts
nor assurances of future performance. Opus generally identifies
forward-looking statements by terminology such as “outlook,”
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“could,” “should,” “seeks,” “approximately,” “predicts,” “intends,”
“plans,” “estimates,” “anticipates” or the negative version of
those words or other comparable words. Any forward-looking
statements contained in this release and the aforementioned
conference call and webcast are based on the historical performance
of Opus and its subsidiaries or on its current plans, beliefs,
estimates, expectations and goals, including without limitation:
our expectations regarding improvements to our efficiency and
greater profitability in future quarters; and our plans to sell
$79.1 million of multifamily loans during the third quarter of
2019. Such forward-looking statements are subject to various risks
and uncertainties and assumptions relating to our operations,
financial results, financial condition, business prospects, growth
strategy and liquidity that could cause actual results to differ
materially from those indicated by the forward-looking statements,
including, without limitation: market and economic conditions,
changes in interest rates, our liquidity position, the management
of our growth, the risks associated with our loan portfolio, risks
that our expected efficiencies and savings from our expense
reduction initiatives will be less than anticipated, local economic
conditions affecting retail and commercial real estate, our
geographic concentration in the western region of the United
States, competition within the industry, dependence on key
personnel, government legislation and regulation, the risks
associated with any future acquisitions, the effect of natural
disasters, risks related to our technology and information systems,
and the management of our operating expenses, including the
effectiveness of certain strategic cost reduction initiatives. For
a discussion of these and other risks and uncertainties, see Opus'
filings with the Federal Deposit Insurance Corporation, including,
but not limited to, the risk factors in Opus' Annual Report on Form
10-K filed with the Federal Deposit Insurance Corporation on
February 28, 2019. If one or more of these or other risks or
uncertainties materialize, or if Opus’ underlying assumptions prove
to be incorrect, Opus’ actual results may vary materially from
those indicated in these statements. These filings are available on
the Investor Relations page of Opus' website at:
investor.opusbank.com.
Opus undertakes no obligation to revise or publicly release any
revision to these forward-looking statements, whether as a result
of new information, future developments or otherwise.
Consolidated Statements of
Income
(unaudited)
For the three months
ended
For the six months
ended
($ in thousands, except per share
amounts)
June 30, 2019
March 31, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Interest income:
Loans
$
61,157
$
57,007
$
53,807
$
118,164
$
108,444
Investment securities
8,359
8,577
5,048
16,936
10,142
Due from banks
1,447
1,324
1,326
2,771
2,277
Total interest income
70,963
66,908
60,181
137,871
120,863
Interest expense:
Deposits
16,359
13,425
8,403
29,785
15,423
Federal Home Loan Bank advances
2,165
756
332
2,921
379
Subordinated debt
1,923
1,923
1,923
3,845
3,845
Total interest expense
20,447
16,104
10,658
36,551
19,647
Net interest income
50,516
50,804
49,523
101,320
101,216
Provision (negative provision) for loan
losses
3,281
2,197
(213
)
5,478
3,700
Net interest income after provision
(negative provision) for loan losses
47,235
48,607
49,736
95,842
97,516
Noninterest income:
Fees and service charges on deposit
accounts
1,505
1,440
1,783
2,945
3,505
Escrow and exchange fees
1,506
1,353
1,498
2,859
2,858
Trust administrative fees
6,829
6,685
6,841
13,514
13,819
Loss on sale of loans
(56
)
(111
)
(100
)
(166
)
(169
)
Gain from OREO and other repossessed
assets
—
—
84
—
203
Gain on sale of investment securities
6
113
—
119
182
Bank-owned life insurance, net
994
980
1,045
1,974
2,097
Other income
1,211
640
1,776
1,850
3,741
Total noninterest income
11,995
11,100
12,927
23,095
26,236
Noninterest expense:
Compensation and benefits
29,095
26,875
25,472
55,971
52,280
Professional services
1,099
2,216
2,619
3,315
4,336
Occupancy expense
3,581
3,830
3,751
7,411
7,757
Depreciation and amortization
1,704
1,833
1,763
3,536
3,362
Deposit insurance and regulatory
assessments
519
773
959
1,292
2,089
Insurance expense
335
344
335
679
673
Data processing
1,058
565
318
1,622
758
Software licenses and maintenance
1,217
1,301
1,126
2,518
2,275
Office services
1,679
1,639
1,847
3,318
3,726
Amortization of other intangible
assets
1,415
1,415
1,479
2,830
2,959
Advertising and marketing
833
723
843
1,557
1,800
Other expenses
3,784
3,896
2,629
7,680
5,205
Total noninterest expense
46,319
45,410
43,141
91,729
87,220
Income before income tax expense
12,911
14,297
19,522
27,208
36,532
Income tax expense
4,225
3,436
4,058
7,661
8,165
Net income
$
8,686
$
10,861
$
15,464
$
19,547
$
28,367
Basic earnings per common share
$
0.23
$
0.29
$
0.41
$
0.52
$
0.76
Diluted earnings per common share
0.23
0.28
0.40
0.51
0.74
Weighted average shares - basic
36,254,474
36,187,431
36,027,569
36,221,048
35,997,839
Weighted average shares - diluted
38,238,324
38,133,705
38,316,721
38,192,357
38,317,160
Consolidated Balance Sheets
(unaudited)
As of
($ in thousands, except share amounts)
June 30, 2019
March 31, 2019
June 30, 2018
Assets
Cash and due from banks
$
40,358
$
42,862
$
58,516
Due from banks – interest-bearing
219,329
378,671
342,483
Investment securities available-for-sale,
at fair value
1,051,067
1,093,915
1,023,882
Loans
5,788,986
5,461,500
5,072,366
Less allowance for loan losses
(57,724
)
(58,483
)
(59,197
)
Loans, net
5,731,262
5,403,017
5,013,169
Loans held-for-sale
79,103
—
—
OREO and other repossessed assets
—
—
—
Premises and equipment, net
24,656
25,771
25,718
Goodwill
331,832
331,832
331,832
Other intangible assets, net
36,095
37,510
41,842
Deferred tax assets, net
14,237
15,924
26,450
Cash surrender value of bank owned life
insurance, net
156,369
155,279
152,215
Accrued interest receivable
26,510
24,292
19,915
Federal Home Loan Bank stock
17,250
17,250
17,250
Other assets
128,893
161,582
140,054
Total assets
$
7,856,961
$
7,687,905
$
7,193,326
Liabilities and Stockholders’
Equity
Deposits:
Noninterest-bearing demand
$
738,235
$
781,429
$
844,905
Interest-bearing demand
2,577,873
2,397,361
2,523,488
Money market and savings
2,027,341
2,099,058
2,047,309
Time deposits
879,910
798,918
518,481
Total deposits
6,223,359
6,076,766
5,934,183
Federal Home Loan Bank advances
350,000
330,000
—
Subordinated debt, net
133,143
133,076
132,877
Accrued interest payable
4,980
2,702
4,008
Other liabilities
84,151
97,255
89,201
Total liabilities
6,795,633
6,639,799
6,160,269
Stockholders’ equity:
Preferred stock:
Authorized 200,000,000 shares; issued
31,111 and 31,111 and 31,111 shares, respectively
29,110
29,110
29,110
Common stock, no par value per share:
Authorized 200,000,000 shares; issued
37,338,920 and 37,227,637 and 36,618,447 shares, respectively
700,220
700,220
700,220
Additional paid-in capital
82,755
80,528
67,980
Retained earnings
271,495
267,021
266,033
Treasury stock, at cost; 1,087,701 and
1,048,657 and 568,794 shares, respectively
(26,217
)
(25,403
)
(14,666
)
Accumulated other comprehensive income
(loss)
3,965
(3,370
)
(15,620
)
Total stockholders’ equity
1,061,328
1,048,106
1,033,057
Total liabilities and stockholders’
equity
$
7,856,961
$
7,687,905
$
7,193,326
Selected Financial Data
(unaudited)
As of or for the three months
ended
As of or for the six months
ended
June 30, 2019
March 31, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Yield on interest-earning assets1
4.04
%
4.13
%
3.73
%
4.09
%
3.74
%
Net interest margin1
2.88
3.15
3.07
3.01
3.14
Cost of deposits2
1.06
0.92
0.57
0.99
0.52
Cost of funds3
1.23
1.05
0.70
1.15
0.64
Noninterest expense to average assets
2.38
2.51
2.40
2.45
2.42
Loan to deposits
93.02
89.88
85.48
93.02
85.48
(1) Yield on interest-earning assets and net interest margin are
presented on a tax equivalent basis using the federal effective tax
rate. (2) Calculated as interest expense on deposits divided by
total average deposits. (3) Calculated as total interest expense
divided by average total deposits, FHLB advances and subordinated
debt.
Loan Fundings
(unaudited)
For the three months
ended
For the six months
ended
($ in thousands)
June 30, 2019
March 31, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Real estate mortgage loans:
Multifamily residential
$
569,719
$
426,916
$
147,238
996,635
414,539
Commercial real estate
75,185
47,127
48,946
122,312
78,253
Construction and land loans
7,331
6,212
14,856
13,543
19,741
Commercial business loans
48,725
56,879
80,797
105,604
226,981
Small Business Administration
loans
2,642
836
3,775
3,478
8,353
Total loan fundings
$
703,602
$
537,970
$
295,612
$
1,241,572
$
747,867
Composition of Loan Portfolio
As of
(unaudited)
June 30, 2019
March 31, 2019
June 30, 2018
($ in thousands)
Amount
% of Total
loans
Amount
% of Total
loans
Amount
% of Total
loans
Real estate mortgage loans:
Single-family residential
$
58,829
1.0
%
$
60,255
1.1
%
$
67,573
1.3
%
Multifamily residential
3,608,683
62.3
3,255,025
59.6
2,691,352
53.1
Commercial real estate loans:
Owner occupied
296,772
5.1
187,631
3.4
172,069
3.4
Non-owner occupied
823,647
14.2
887,852
16.3
912,811
18.0
Construction and land loans
45,100
0.8
57,223
1.0
95,077
1.9
Commercial business loans
918,428
15.9
969,916
17.8
1,085,496
21.4
Small Business Administration loans
33,658
0.6
39,253
0.7
43,224
0.9
Consumer and other loans
3,869
0.1
4,345
0.1
4,764
0.1
Total loans
$
5,788,986
100.0
%
$
5,461,500
100.0
%
$
5,072,366
100.0
%
Composition of Deposits
(unaudited)
As of
June 30, 2019
March 31, 2019
June 30, 2018
($ in thousands)
Amount
% of Total
deposits
Amount
% of Total
deposits
Amount
% of Total
deposits
Noninterest bearing
$
738,235
11.9
%
$
781,429
12.9
%
$
844,905
14.3
%
Interest bearing demand
2,577,873
41.4
2,397,361
39.5
2,523,488
42.5
Money market and savings
2,027,341
32.6
2,099,058
34.5
2,047,309
34.5
Time deposits
879,910
14.1
798,918
13.1
518,481
8.7
Total deposits
$
6,223,359
100.0
%
$
6,076,766
100.0
%
$
5,934,183
100.0
%
Consolidated average balance sheet,
interest, yield and rates
(unaudited)
For the three months ended
June 30,
For the three months ended
March 31,
For the three months ended
June 30,
2019
2019
2018
($ in thousands)
Average Balance
Interest (1)
Yields/ Rates
Average Balance
Interest (1)
Yields/ Rates
Average Balance
Interest (1)
Yields/ Rates
Assets:
Interest-earning assets:
Due from banks
$
254,059
$
1,447
2.28
%
$
234,590
$
1,324
2.29
%
$
299,987
$
1,326
1.77
%
Investment securities
1,081,031
8,359
3.10
1,101,044
8,577
3.16
1,054,258
5,048
1.92
Loans
5,744,728
61,561
4.30
5,266,475
57,411
4.42
5,156,424
54,184
4.21
Total interest-earning assets
7,079,818
71,367
4.04
6,602,109
67,312
4.13
6,510,669
60,558
3.73
Noninterest-earning assets
713,721
726,313
701,454
Total assets
$
7,793,539
$
7,328,422
$
7,212,123
Liabilities and stockholders’ equity:
Interest-bearing deposits
Interest-bearing demand
$
2,483,757
$
3,200
0.52
%
$
2,465,245
$
2,811
0.46
%
$
2,496,827
$
1,801
0.29
%
Money market and savings
2,034,212
8,150
1.61
1,996,557
6,957
1.41
2,127,242
5,028
0.95
Time deposits
883,839
5,009
2.27
712,240
3,657
2.08
445,392
1,574
1.42
Total interest bearing deposits
5,401,808
16,359
1.21
5,174,042
13,425
1.05
5,069,461
8,403
0.66
Subordinated debt
133,102
1,923
5.79
133,042
1,923
5.86
132,843
1,923
5.81
FHLB advances
351,868
2,165
2.47
122,000
756
2.51
69,121
332
1.93
Total interest-bearing liabilities
5,886,778
20,447
1.39
5,429,084
16,104
1.20
5,271,425
10,658
0.81
Noninterest-bearing deposits
763,894
766,716
847,027
Other liabilities
84,531
81,655
65,535
Total liabilities
6,735,203
6,277,455
6,183,987
Total stockholders’ equity
1,058,336
1,050,967
1,028,136
Total liabilities and stockholders’
equity
$
7,793,539
$
7,328,422
$
7,212,123
Net interest spread (2)
2.65
%
2.93
%
2.92
%
Net interest income and margin, tax
equivalent (3, 4)
$
50,920
2.88
%
$
51,208
3.15
%
$
49,900
3.07
%
Reconciliation of tax equivalent net
interest income to reported net interest income
Tax equivalent adjustment
(404
)
(404
)
(377
)
Net interest income, as reported
$
50,516
$
50,804
$
49,523
(1) Interest income is presented on a taxable equivalent basis
using the federal effective tax rate. (2) Net interest spread
represents the average yield on interest-earning assets less the
average rate on interest-bearing liabilities. (3) Net interest
margin is computed by dividing net interest income by total average
interest-earning assets. (4) Net interest margin, tax equivalent
has been adjusted to a taxable equivalent basis using the federal
effective tax rate.
Consolidated average balance sheet,
interest, yield and rates
(unaudited)
For the six months ended June
30,
2019
2018
(In thousands)
Average Balance
Interest (1)
Yields/ Rates
Average Balance
Interest (1)
Yields/ Rates
Assets:
Interest-earning assets:
Due from banks
$
244,378
$
2,771
2.29
%
$
271,483
$
2,277
1.69
%
Investment securities
1,090,983
16,936
3.13
1,078,732
10,142
1.90
Loans
5,506,922
118,972
4.36
5,196,294
109,076
4.23
Total interest-earning assets
$
6,842,283
$
138,679
4.09
$
6,546,509
$
121,495
3.74
Noninterest-earning assets
719,983
713,829
Total assets
$
7,562,266
$
7,260,338
Liabilities and stockholders’ equity:
Interest-bearing deposits
Interest-bearing demand
$
2,474,552
$
6,010
0.49
%
$
2,514,290
$
3,078
0.25
%
Money market and savings
2,015,487
15,109
1.51
2,207,938
9,728
0.89
Time deposits
798,514
8,666
2.19
413,696
2,617
1.28
Total interest bearing deposits
$
5,288,553
$
29,785
1.14
$
5,135,924
$
15,423
0.61
Subordinated debt
133,073
3,845
5.83
132,810
3,845
5.84
FHLB advances
237,569
2,921
2.48
42,928
379
1.78
Total interest-bearing liabilities
$
5,659,195
$
36,551
1.30
$
5,311,662
$
19,647
0.75
Noninterest-bearing deposits
765,297
839,997
Other liabilities
83,102
82,472
Total liabilities
$
6,507,594
$
6,234,131
Total stockholders’ equity
$
1,054,672
$
1,026,207
Total liabilities and stockholders’
equity
$
7,562,266
$
7,260,338
Net interest spread (2)
2.79
%
2.99
%
Net interest income and margin, tax
equivalent (3, 4)
$
102,128
3.01
%
$
101,848
3.14
%
Reconciliation of tax equivalent net
interest income to reported net interest income
Tax equivalent adjustment
(808
)
(632
)
Net interest income, as reported
$
101,320
$
101,216
(1) Interest income is presented on a taxable equivalent basis
using the federal effective tax rate. (2) Net interest spread
represents the average yield on interest-earning assets less the
average rate on interest-bearing liabilities. (3) Net interest
margin is computed by dividing net interest income by total average
interest-earning assets. (4) Net interest margin, tax equivalent
has been adjusted to a taxable equivalent basis using the federal
effective tax rate.
Allowance for Loan Losses
(unaudited)
For the three months
ended
For the six months
ended
($ in thousands)
June 30, 2019
March 31, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Allowance for loan losses-balance at
beginning of period
$
58,483
$
54,664
$
67,842
$
54,664
$
75,930
Provision for loan losses
3,281
2,197
(213
)
5,478
3,701
Charge-offs
(4,697
)
(383
)
(12,508
)
(5,080
)
(26,663
)
Recoveries
657
2,005
4,076
2,662
6,229
Total net recoveries (charge-offs)
(4,040
)
1,622
(8,432
)
(2,418
)
(20,434
)
Allowance for loan losses-balance at end
of period
$
57,724
$
58,483
$
59,197
$
57,724
$
59,197
Asset Quality Information
(unaudited)
As of
($ in thousands)
June 30, 2019
March 31, 2019
June 30, 2018
Nonperforming assets
Nonaccrual loans
$
21,161
$
23,330
$
39,992
OREO and other repossessed assets
—
—
—
Total nonperforming assets
$
21,161
$
23,330
$
39,992
Loans 30 - 89 days past due
$
1,140
$
4,652
$
5,761
Accruing loans 90 days or more past
due
—
—
436
Accruing troubled debt restructured
loans
—
—
139
Non performing loans to total loans
0.37
%
0.43
%
0.79
%
Non performing assets to total assets
0.27
0.30
0.56
Loans 30 - 89 days past due to total
loans
0.02
0.09
0.11
Allowance for loan losses to total
loans
1.00
1.07
1.17
Allowance for loan losses to non-accrual
loans
272.78
250.68
148.02
Net charge-offs to average loans
(annualized)
0.28
(0.12
)
0.66
Risk Rating by Loan Product
(Unaudited)
($ in thousands)
Pass
Special Mention
Classified
Total Loans
Nonaccrual loans
Total allowance
As of June 30, 2019
Real estate mortgage loans:
Single-family residential
$
58,286
$
73
$
470
$
58,829
$
247
$
140
Multifamily residential
3,604,675
115
3,893
3,608,683
3,011
13,204
Commercial real estate
1,062,817
11,281
46,321
1,120,419
2,436
11,072
Construction and land loans
29,116
15,984
—
45,100
—
521
Commercial business loans
867,106
1,855
49,467
918,428
10,625
31,459
Small Business Administration loans
25,847
157
7,654
33,658
4,330
1,324
Consumer and other loans
3,190
56
623
3,869
512
4
Total loans
$
5,651,037
$
29,521
$
108,428
$
5,788,986
$
21,161
$
57,724
As of March 31, 2019
Real estate mortgage loans:
Single-family residential
$
59,696
$
74
$
485
$
60,255
$
254
$
144
Multifamily residential
3,251,009
117
3,899
3,255,025
—
11,603
Commercial real estate
1,020,851
8,273
46,359
1,075,483
2,449
10,581
Construction and land loans
42,760
14,463
—
57,223
—
599
Commercial business loans
904,471
4,896
60,549
969,916
12,420
35,158
Small Business Administration loans
26,552
159
12,542
39,253
7,672
390
Consumer and other loans
3,639
57
649
4,345
535
8
Total loans
$
5,308,978
$
28,039
$
124,483
$
5,461,500
$
23,330
$
58,483
As of June 30, 2018
Real estate mortgage loans:
Single-family residential
$
66,812
$
78
$
683
$
67,573
$
—
$
183
Multifamily residential
2,687,143
2,081
2,128
2,691,352
—
9,395
Commercial real estate
1,042,675
11,096
31,109
1,084,880
2,512
9,282
Construction and land loans
83,575
11,502
—
95,077
—
1,202
Commercial business loans
956,730
34,859
93,907
1,085,496
36,902
38,506
Small Business Administration loans
32,337
2,138
8,749
43,224
—
622
Consumer and other loans
3,990
60
714
4,764
578
7
Total loans
$
4,873,262
$
61,814
$
137,290
$
5,072,366
$
39,992
$
59,197
Non-GAAP Financial Measures
Our accounting and reporting policies conform to generally
accepted accounting principles in the United States ("GAAP"). We
believe that the presentation of certain non-GAAP financial
measures assists investors in evaluating our financial results.
These non-GAAP measures include our net income, earnings per
diluted share, return on average assets, return on average
stockholders' equity, return on average tangible common equity,
efficiency ratio, tangible book value per common share, and
tangible common equity ratio. These non-GAAP measures should be
taken together with the corresponding GAAP measures and should not
be considered a substitute of the GAAP measures. The following
tables present a reconciliation of the most comparable GAAP
financial measures and ratios to the non-GAAP financial measures
and ratios:
Non-GAAP tangible book value per common
share
(unaudited)
As of
($ In thousands, except share amounts)
June 30, 2019
March 31, 2019
June 30, 2018
Tangible equity:
Total stockholders' equity
$
1,061,328
$
1,048,106
$
1,033,057
Less:
Preferred stock
29,110
29,110
29,110
Common equity
1,032,218
1,018,996
1,003,947
Less:
Goodwill
331,832
331,832
331,832
Other intangible assets, net
36,095
37,510
41,842
Tangible common equity
664,291
649,654
630,273
Shares of common stock outstanding
36,251,219
36,178,980
36,049,653
Book value per common share
$
28.47
$
28.17
$
27.85
Tangible book value per common share
18.32
17.96
17.48
Non-GAAP tangible common equity
ratio
(unaudited)
As of
($ In thousands)
June 30, 2019
March 31, 2019
June 30, 2018
Total assets
$
7,856,961
$
7,687,905
$
7,193,326
Less:
Goodwill
331,832
331,832
331,832
Other intangible assets, net
36,095
37,510
41,842
Tangible assets
7,489,034
7,318,563
6,819,652
Total stockholders' equity
1,061,328
1,048,106
1,033,057
Less:
Goodwill
331,832
331,832
331,832
Other intangible assets, net
36,095
37,510
41,842
Tangible equity
693,401
678,764
659,383
Less: preferred stock
29,110
29,110
29,110
Tangible common equity
664,291
649,654
630,273
Total stockholders' equity to total
assets
13.51
%
13.63
%
14.36
%
Tangible equity to tangible assets
ratio
9.26
%
9.27
%
9.67
%
Total common equity to total assets
13.14
%
13.25
%
13.96
%
Tangible common equity to tangible assets
ratio
8.87
%
8.88
%
9.24
%
Non-GAAP Financial Measures
(unaudited)
For the three months
ended
For the six months
ended
($ in thousands)
June 30, 2019
March 31, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Net income
$
8,686
$
10,861
$
15,464
$
19,547
$
28,367
Adjustments to noninterest income:
Impairment
—
489
—
489
—
(Gains) and losses on sales of securities,
loans, and other repossessed assets
50
(2
)
16
47
(215
)
Adjustments to noninterest expense:
Strategic actions
4,891
(91
)
214
4,801
1,750
Litigation (recovery)
—
1,431
—
1,431
(2,850
)
Pre-tax adjustments
4,941
1,827
230
6,768
(1,315
)
Tax effect
(319
)
(383
)
(327
)
(672
)
44
Tax-effected adjustments (1)
4,622
1,444
(97
)
6,096
(1,271
)
Adjusted net income
$
13,308
$
12,305
$
15,367
$
25,643
$
27,096
Average assets
$
7,793,539
$
7,328,422
$
7,212,123
$
7,562,266
$
7,260,338
Average stockholders' equity
1,058,336
1,050,967
1,028,136
1,054,672
1,026,207
Less:
Average preferred stock
29,110
29,110
29,110
29,110
29,110
Average goodwill
331,832
331,832
331,832
331,832
331,832
Average other intangible assets
36,956
38,234
42,606
37,591
43,340
Average tangible common equity
$
660,438
$
651,791
$
624,588
$
656,139
$
621,925
Earnings per diluted share
$
0.23
$
0.28
$
0.40
$
0.51
$
0.74
Adjusted earnings per diluted share
0.35
0.32
0.40
0.67
0.71
Return on average assets
0.45
%
0.60
%
0.86
%
0.52
%
0.79
%
Adjusted return on average assets
0.68
0.68
0.85
0.68
0.75
Return on average equity
3.29
4.19
6.03
3.74
5.57
Adjusted return on average equity
5.04
4.75
6.00
4.90
5.32
Return on average tangible common
equity
5.27
6.76
9.93
6.01
9.20
Adjusted return on average tangible common
equity
8.08
7.66
9.87
7.88
8.79
Efficiency ratio (2)
71.32
70.61
66.29
70.96
65.90
Adjusted efficiency ratio
63.55
67.93
65.95
65.73
66.76
(1) The tax effect of adjustments was computed using the
combined federal and state marginal tax rate of 25.5%, 23.7%,
22.2%, 24.5%, and 23.0% for the three months ended June 30, 2019,
March 31, 2019, and June 30, 2018 and the six months ended June 30,
2019 and June 30, 2018, respectively, adjusted for the tax effect
of nondeductible strategic action expenses. (2) The efficiency
ratio equals noninterest expense adjusted to exclude the
amortization of other intangible assets divided by the sum of
tax-equivalent net interest income and noninterest income adjusted
to exclude the gains and losses on the sale of investment
securities, loans, and other repossessed assets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190729005158/en/
Kevin L. Thompson EVP, Chief Financial Officer 949-251-8196
Brett G. Villaume SVP, Director of Investor Relations
949-224-8866
Opus Bank (NASDAQ:OPB)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
Opus Bank (NASDAQ:OPB)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024
