Our net interest margin decreased from 4.60% for the
six-month
period ended June 30, 2017 to 4.47% for the
six-month
period ended June 30, 2018. The yield on loans was 5.88% and 5.72% for the six months
ended June 30, 2018 and 2017, respectively as average loans increased from $7.71 billion to $10.34 billion. The increase in loan balances is primarily due to the acquisitions we completed during 2017. For the six months ended
June 30, 2018 and 2017, we recognized $21.3 million and $16.1 million, respectively, in total net accretion for acquired loans and deposits. The rate on interest-bearing deposits increased from 0.44% for the six months ended
June 30, 2017, to 0.83% for the six months ended June 30, 2018, with average balances of $5.62 billion and $7.99 billion, respectively. The growth of average interest earning assets of $3.05 billion, which was primarily due
to acquisitions completed in 2017, and the increase in yield were offset by the increase in interest-bearing liabilities and the rate on interest-bearing liabilities, which led to a decrease in net interest margin for the quarter ended June 30,
2018.
Our efficiency ratio was 37.28% for the six months ended June 30, 2018, compared to 39.12% for the same period in 2017. For
the first six months of 2018, our efficiency ratio, as adjusted
(non-GAAP),
was 37.49%, which increased from the 37.13% reported for first six months of 2017. (See Table 23 for the
non-GAAP
tabular reconciliation). Even though acquisitions tend to increase our efficiency ratio in the short term, we had an improvement in the efficiency ratio primarily associated with cost savings from our
Stonegate acquisition being realized soon after conversion which was completed on February 9, 2018.
Our annualized return on average
assets was 2.11% for the six months ended June 30, 2018, compared to 1.86% for the same period in 2017. Our annualized return on average common equity was 13.46% for the six months ended June 30, 2018, compared to 13.84% for the same
period in 2017. Excluding the $24.6 million tax effect of the TCJA, our annualized return on average assets was 1.76% for the six months ended June 30, 2018 and our annualized return on average common equity was 11.25%.
Financial Condition as of and for the Period Ended June 30, 2018 and December 31, 2017
Our total assets as of June 30, 2018 increased $474.4 million to $14.92 billion from the $14.45 billion reported as of
December 31, 2017. Our loan portfolio increased $566.8 million or 5.49% for the quarter ended June 30, 2018 from $10.33 billion as of December 31, 2017 to $10.90 billion as of June 30, 2018. The increase is
primarily due to the acquisition of $373.9 million of loans as part of the acquisition of Shore Premier Finance (SPF) as well as $192.9 million of organic loan growth for the first six months of 2018. Total deposits increased
$347.5 million to $10.74 billion as of June 30, 2018 from $10.39 billion as of December 31, 2017. Stockholders equity increased $109.7 million to $2.31 billion as of June 30, 2018, compared to
$2.20 billion as of December 31, 2017. The increase in stockholders equity is primarily associated with the $111.9 million increase in retained earnings as well as the issuance of 1,250,000 shares of stock with a value of
$28.2 million as part of the acquisition of SPF, which were partially offset by $20.2 million of comprehensive loss and the repurchase of $15.0 million of our common stock during 2018. The annualized improvement in stockholders
equity for the first six months of 2018, excluding the $28.2 million of common stock issued for the acquisition of SPF, was 7.4%.
As
of June 30, 2018, our
non-performing
loans increased to $56.8 million, or 0.52%, of total loans from $44.7 million, or 0.43%, of total loans as of December 31, 2017. The allowance for loan
losses as a percent of
non-performing
loans decreased to 196.41% as of June 30, 2018, from 246.70% as of December 31, 2017.
Non-performing
loans from our
Arkansas franchise were $13.0 million at June 30, 2018 compared to $15.5 million as of December 31, 2017.
Non-performing
loans from our Florida franchise were $43.0 million at
June 30, 2018 compared to $28.2 million as of December 31, 2017.
Non-performing
loans from our Alabama franchise were $52,000 at June 30, 2018 compared to $929,000 as of December 31,
2017.
Non-performing
loans from our SPF franchise were $769,000, and there were no
non-performing
loans from our Centennial CFG franchise as of June 30, 2018.
As of June 30, 2018, our
non-performing
assets increased to $74.6 million, or 0.50%, of
total assets from $63.6 million, or 0.44%, of total assets as of December 31, 2017.
Non-performing
assets from our Arkansas franchise were $21.0 million at June 30, 2018 compared to
$25.6 million as of December 31, 2017.
Non-performing
assets from our Florida franchise were $51.5 million at June 30, 2018 compared to $36.4 million as of December 31, 2017.
Non-performing
assets from our Alabama franchise were $1.4 million at June 30, 2018 compared to $1.6 million as of December 31, 2017. Non-performing assets from our SPF franchise were $769,000,
and there were no
non-performing
assets from our Centennial CFG franchise as of June 30, 2018.
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