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Community bank earnings: Net income slides at Customers Bancorp, FCB Financial

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Community bank earnings: Net income slides at Customers Bancorp, FCB Financial

In this feature, S&P Global Market Intelligence takes a look at earnings releases from a handful of community banks from around the country.

Mid-Atlantic

Norwich, N.Y.-based NBT Bancorp Inc. reported fourth-quarter 2016 net income of $19.6 million, or 45 cents per share, compared to $19.1 million, or 43 cents per share, in the fourth quarter of 2015.

Net interest income in the period was $67.4 million, up 6.2% from $63.5 million a year ago. Meanwhile, noninterest income totaled $28.1 million, down 13.5% from $32.5 million in the year-ago period, primarily due to a $700,000 securities loss and decreases in insurance and other financial services revenue.

On a fully tax equivalent basis, its net interest margin was 3.41%, up from 3.40% in the previous quarter and down from 3.42% in the year-ago quarter. Net charge-offs stood at $8.6 million, up from $7.6 million in the previous year.

The quarter's allowance for loan losses was $65.2 million, compared to $63.0 million a year ago.

***

Customers Bancorp Inc. recorded net income to common shareholders of $16.2 million, down 3.4% from $16.8 million in the same quarter a year ago. Net interest income was $64.1 million, compared to $53.5 million in the year-ago period.

The Wyomissing, Pa.-based company recognized an impairment on equity securities for which it changed its intent to hold until the market price recovered, resulting in a charge of $7.3 million. Excluding this charge and a $3.6 million benefit from an accounting change, net income would have been $19.9 million for the fourth quarter of 2016.

The company's return on average assets was 0.84% — or 1.00% without the impairment and benefit — compared to 0.91% in the fourth quarter of 2015.

Due to higher rates earned on the investment portfolio and commercial loans to mortgage companies, its tax equivalent net interest margin increased to 2.84%, from 2.83% a year ago. Additionally, the quarter's efficiency ratio from continuing operations was 42.2%, down from 47.1% a year ago.

***

Indiana, Pa.-based S&T Bancorp Inc. reported fourth-quarter 2016 net income of $17.7 million, or 51 cents per share, compared to $17.4 million, or 50 cents per share, in the year-ago quarter. Nonperforming assets in the period totaled $43.3 million, up from $35.7 million in the same period a year ago.

The quarter's provision for loan losses was $5.6 million, up from $2.5 million in the third quarter and $3.9 million in the prior-year period, due to higher loan charge-offs and loan growth.

On a fully tax equivalent basis, net interest margin was 3.45%, down from 3.46% in the previous quarter and 3.50% in the year-ago quarter. Meanwhile, net interest income was $52.5 million, up from $48.9 million in the fourth quarter of 2015.

***

Oak Ridge, N.J.-based Lakeland Bancorp Inc. posted fourth-quarter 2016 net income of $12.0 million, or 26 cents per share, compared to $8.5 million, or 22 cents per share, in the same period in 2015.

At the close of the fourth quarter, the company's net interest margin was 3.27%, down from 3.45% in the prior quarter and 3.43% for the fourth quarter of 2015, primarily due to $1.0 million in interest expense from a $75 million subordinated debt issuance in September.

Lakeland Bancorp recorded a provision for loan and lease losses of $375,000, compared to no provision recorded for the year-ago period.

Net charge-offs in the period were $499,000, up from $120,000 in the fourth quarter of 2015.

Southeast

Weston, Fla.-based FCB Financial Holdings Inc. reported net income of $27.9 million, or 64 cents per share, in the fourth quarter of 2016, down from $29.7 million, or 68 cents per share, in the year-ago period. The company's efficiency ratio was 42.27%, compared to 47.19% a year ago.

FCB Financial's provision for loan losses was $2.2 million, compared to $2.3 million in the year-ago quarter. Net interest income for the period was $71.1 million, up from $62.0 million in the same period a year ago.

Its net interest margin was 3.41%, down from 3.44% in the third quarter of 2016 and 3.69% in the fourth quarter of 2015, primarily due to the continued attrition of its acquired loan portfolio.

***

CenterState Banks Inc. posted fourth-quarter 2016 net income allocated to common shares of $16.0 million, or 33 cents per share, compared to $10.3 million, or 23 cents per share, in the year-ago period.

Its net interest margin, adjusted for tax equivalent yield, was 4.20% in the most recent quarter, up from 4.12% in the prior quarter and down from 4.37% in the year-ago quarter. The quarter's provision for loan losses stood at $2.0 million, up from $484,000 a year ago. Meanwhile, net interest income was $47.5 million, compared to $39.3 million in the fourth quarter of 2015.

***

Atlanta-based State Bank Financial Corp. recorded fourth-quarter 2016 net income allocated to common shareholders of $10.0 million, or 28 cents per share, down from $11.8 million, or 33 cents per share, in the fourth quarter of 2015. Total assets in the period were $4.22 billion, compared to $3.47 billion in the prior year.

The company's total noninterest expense was $32.9 million, up from $29.6 million in the year-ago period. The quarter's results also included $3.5 million of merger-related expenses.

Provision for loan losses stood at $277,000 at Dec. 31, 2016, compared to $494,000 at Dec. 31, 2015. Meanwhile, the net interest margin in the period was 4.56%, up from 4.54% in the previous quarter but down from 4.99% in the year-ago quarter.

***

Capital Bank Financial Corp. posted net income of $12.4 million, or 24 cents per share, in the fourth quarter of 2016. In the year-ago quarter, it was $15.0 million, or 34 cents per share.

The Charlotte, N.C.-based company reported net interest income of $77.8 million, up from $62.1 million in the fourth quarter of 2015. The net interest margin was 3.67%, compared to 3.70% a year ago, primarily due to a recovery of interest income on previous nonperforming loans, the deleveraging of lower-yielding loans and the pay-down of high-cost brokered deposits.

Additionally, total assets for the period were $9.93 billion, up from $7.45 billion at Dec. 31, 2015.

Southwest

McKinney, Texas-based Independent Bank Group Inc. reported fourth-quarter 2016 net income available to common shareholders of $14.8 million, or 79 cents per share. It was $10.5 million, or 58 cents per share, in the year-ago quarter.

Fourth-quarter net interest income was $46.5 million, up from $42.2 million in the same quarter a year ago, while the provision for loan losses was $2.2 million, up from $2.0 million a year ago. Noninterest expense in the period was $27.4 million, down from $28.5 million in the year-ago period.

At the end of 2016, nonperforming assets totaled $19.8 million, up from $18.1 million a year earlier. Its net interest margin was 3.59% for the most recent quarter, down from 3.66% in the third quarter and 3.96% in the fourth quarter of 2015.

West

At Bend, Ore.-based Cascade Bancorp, fourth-quarter 2016 net income was $5.9 million, or 8 cents per share, compared to $5.6 million, or 8 cents per share, in the year-ago period. Net interest income in the period was $25.0 million, up from $19.8 million a year ago.

The quarter's results were negatively impacted by transitory expenses of $1.1 million attributable to its acquisition by Billings, Mont.-based First Interstate BancSystem Inc., along with $900,000 in increased salary costs due to above-target incentive payouts.

Cascade's net interest margin was 3.55% in the most recent quarter, up from 3.43% in the linked quarter and 3.52% in the year-ago quarter, due to improvements in the company's earning assets mix. Additionally, the company's total revenue was $33.2 million, compared to $25.6 million in the same quarter a year ago.

***

Banner Corp. posted net income of $22.8 million, or 69 cents per share, up from $6.9 million, or 20 cents per share, in the fourth quarter of 2015. The latest quarter's results were impacted by $788,000 of acquisition-related expenses.

The Walla Walla, Wash.-based company's return on average assets was 0.92%, compared to 0.96% in the preceding quarter and 0.28% in the same quarter a year ago. Meanwhile, its net interest margin was 4.32%, up from 4.15% in the linked quarter and 4.05% in the year-ago quarter.

The company's revenues from mortgage banking operations were $5.1 million, down from $8.1 million in the previous quarter but up 15% from $4.5 million in the year-ago period.

In addition, the quarter's provision for loan losses stood at $2.0 million, compared to no provision recorded for the year-ago period.

***

Eugene, Ore.-based Pacific Continental Corp. reported net income of $6.9 million, or 30 cents per share, in the fourth quarter of 2016. On a tax-equivalent basis, its net interest margin was 4.38%, compared to 4.36% in the year-ago period.

The quarter's provision for loan losses stood at $1.9 million, up 260.58% from $520,000 in the fourth quarter of 2015. Net interest income for the period was $25.0 million, up 32.74% from $18.8 million in the year-ago quarter.

Total assets for the period were recorded at $2.54 billion, up from $1.91 billion in the fourth quarter of 2015.

***

Tacoma, Wash.-based Columbia Banking System Inc. reported fourth-quarter 2016 net income of $30.7 million, or 53 cents per share. It was $26.7 million, or 46 cents per share, in the year-ago period. Total assets in the period were $9.56 billion, up from $8.91 billion in the previous year.

Net interest income was $85.7 million in the recent quarter, compared to $81.8 million in the year-ago period. The tax-equivalent net interest margin in the period was 4.11%, down from 4.13% in the previous quarter and 4.25% in the fourth quarter of 2015.

The quarter's provision for loan and lease losses was $18,000, compared to a provision of $2.3 million a year ago. Additionally, total nonperforming assets were $33.8 million in the fourth quarter, down from $35.2 million in the year-ago period.

Midwest

At Grand Rapids, Mich.-based Independent Bank Corp., fourth-quarter 2016 net income was $5.9 million, or 27 cents per share, up from $5.6 million, or 25 cents per share, in the year-ago period. The company's mortgage loan servicing business generated income of $2.7 million, compared to $1.3 million in the same quarter a year ago.

Net interest income for the period was $20.3 million, up 4.6% from $19.4 million in the prior year, due to an increase in average interest-earning assets. Meanwhile, noninterest expenses totaled $24.9 million, down from $22.8 million in the fourth quarter of 2015.

The company's tax-equivalent net interest margin was 3.45%, compared to 3.56% in the year-ago quarter. The quarter's efficiency ratio was 74.19%, down from 76.77% in the previous year.

***

Stock Yards Bancorp Inc. posted net income of $10.6 million, or 46 cents per share, in the fourth quarter of 2016, up from $9.6 million, or 43 cents per share, in the fourth quarter of 2015. The quarter's efficiency ratio was 56.16%, down from 58.70% a year ago.

The Louisville, Ky.-based company's total assets were $3.04 billion, an 8% increase from $2.82 billion in the year-ago period. The quarter's provision for loan losses stood at $500,000, compared to $750,000 in the fourth quarter of 2015.

On a fully tax-equivalent basis, its net interest margin was 3.56% in the recent quarter, down from 3.65% in the previous quarter and 3.57% in the same quarter a year ago. Meanwhile, net interest income was $25.3 million, up from $23.1 million a year ago.