Talmer Bancorp, Inc. reports first quarter 2014 net income of $32.7 million, representing $0.45 of earnings per diluted average share - WAFF-TV: News, Weather and Sports for Huntsville, AL

Talmer Bancorp, Inc. reports first quarter 2014 net income of $32.7 million, representing $0.45 of earnings per diluted average share

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Talmer Bancorp, Inc.

Completed acquisition of Michigan Commerce Bank (Talmer West Bank)

Successful completion of initial public offering resulting in net proceeds of $42.1 million

TROY, Mich., May 6, 2014 /PRNewswire/ -- Talmer Bancorp, Inc. (NASDAQ: TLMR) ("Talmer") today reported first quarter 2014 net income of $32.7 million, compared to $12.6 million for the fourth quarter 2013 and $60.5 million for the first quarter 2013.  Earnings per diluted share were $0.45 for the first quarter 2014, compared to $0.18 for the fourth quarter 2013 and $0.89 for the first quarter 2013.

Talmer Bancorp, Inc. logo.

Talmer Bancorp President and CEO David Provost commented, "We continue to execute on our strategic plans to build a leading Midwest community bank.  Success in our priorities of building scale, delivering solid earning asset growth and effectively integrating acquired institutions is evident in our financial results.  In early 2014, we completed the acquisition of Talmer West Bank, consolidated from four former banking subsidiaries of Capitol Bancorp.  This acquisition expanded our presence into additional markets including Western Michigan and Northern Indiana.  We are excited to welcome these employees and customers and look forward to further expansion of our presence in a number of these markets."

"We have invested significantly over the last few years to build the necessary infrastructure for a larger and more complex institution.  These enhancements have resulted in financial controls and risk management practices that have proven scalable and allowed us to strategically focus on our growth initiatives in a highly competitive banking environment.  In the first quarter we completed the charter integration of First Place Bank into Talmer Bank and Trust, a significant final step in a long and costly process to deal with problem assets and build an effective control environment.  Work and opportunity remain to continue to centralize back office functions and realize synergies in the near term, but I am proud of the efforts of our team in combining two very different institutions in such a short period of time."

"Although the era of distressed bank acquisitions is winding down, we are pleased with how we have been able to combine formerly struggling institutions into a larger, community focused and profitable enterprise.  We have utilized the financial flexibility provided by successful acquisitions to build a bank capable of delivering sustained growth.  While attractive acquisition opportunities remain in our sights, we are also prepared to drive the next chapter of our story based on both a greater emphasis on organic growth and the continuing realization of operating synergies from previous acquisitions."

 

Quarterly Results Summary














(Dollars in thousands, except per share data)


1st Qtr 2014


4th Qtr 2013


1st Qtr 2013

Earnings Summary







Net interest income


$      48,123


$      39,284


$      40,657

Total provision for loan losses


3,926


3,250


2,260

Noninterest income


53,012


23,638


103,619

Noninterest expense


65,614


53,090


84,611

Income before income taxes


31,595


6,582


57,405

Income tax provision (benefit)


(1,072)


(5,971)


(3,050)

Net income 


32,667


12,553


60,455








Per Share Data







Diluted earnings per common share  


$          0.45


$          0.18


$          0.89

Tangible book value per share (1) 


9.74


9.12


8.66

Average diluted shares (in thousands)


73,377


70,555


68,200








Performance and Capital Ratios







Return on average assets (annualized) 


2.36%


1.08%


5.05%

Return on average equity (annualized)


19.07


8.24


41.11

Net interest margin (fully taxable equivalent) (annualized) (2)


3.95


3.72


3.74

Tangible average equity to tangible average assets (1)


12.09


12.89


12.00

Tier 1 leverage ratio (3)


12.47


11.88


10.98

Tier 1 risk-based capital (3) 


16.66


18.29


19.15

Total risk-based capital (3) 


17.72


19.21


19.75








(1)  See section entitled "Reconciliation of Non-GAAP Financial Measures."       

(2)  Presented on a tax equivalent basis using a 35% tax rate for all periods presented.

(3)  First quarter 2014 is estimated.


First Quarter 2014 Compared to Fourth Quarter 2013

  • Net income increased to $32.7 million, or $0.45 per diluted average share, in the first quarter 2014, compared to $12.6 million, or $0.18 per diluted average share, for the fourth quarter 2013. The $20.1 million increase in net income included the bargain purchase gain of $37.0 million resulting from our acquisition of Michigan Commerce Bank (Talmer West Bank). The bargain purchase gain was partially offset by transaction and integration related expenses during the first quarter detailed in the noninterest expense section following.

  • Net total loans increased during the first quarter 2014 by $637.1 million, or 21.6%, to $3.6 billion, which at the end of the quarter included $552.3 million of loans from our acquisition of Talmer West Bank. Excluding loans from the Talmer West Bank acquisition, net total loans grew by $84.8 million, or 11.5% annualized, in the three months ended March 31, 2014. During the first quarter 2014, Talmer Bank and Trust experienced $114.6 million of net uncovered organic loan growth, partially offset by $29.8 million of net covered loan run-off (loans covered by loss share agreements with the FDIC). The Talmer West Bank acquisition added $572.2 million of loans at the time the transaction closed on January 1, 2014, of which a net $19.9 million ran-off by the end of the quarter.

  • Total deposits increased $785.5 million, or 21.8%, to $4.4 billion as of March 31, 2014, primarily reflecting $857.8 million of deposits acquired in our acquisition of Talmer West Bank, partially offset by a decline in time deposits of $72.3 million.

  • Net interest income of $48.1 million increased $8.8 million, or 22.5%, compared to the fourth quarter 2013. The increase in net interest income was primarily the result of the addition of $9.1 million of net interest income related to our acquisition of Talmer West Bank and its inclusion into our operations beginning January 1, 2014. Our net interest margin also increased 23 basis points to 3.95% in the first quarter 2014, compared to 3.72% in the fourth quarter 2013. The increase is primarily the result of the loan composition purchased in our acquisition of Talmer West Bank, which held a higher percentage of higher yielding commercial real estate loans, partially offset by a reduction in the benefit received from discount accretion on our purchased credit impaired loan portfolio.

  • Noninterest income increased by $29.4 million, or 124.3%, to $53.0 million in the first quarter 2014 compared to fourth quarter 2013. The increase primarily relates to the $37.0 million bargain purchase gain recognized as a result of our acquisition of Talmer West Bank and its inclusion into our operations, partially offset by a decrease in mortgage banking and other loan fees and a net loss on sales of securities.

  • Noninterest expenses increased $12.5 million, or 23.6%, to $65.6 million in the first quarter 2014 compared to fourth quarter 2013. Noninterest expenses in the first quarter 2014 included the addition of Talmer West Bank's operating expenses and approximately $10.8 million of certain transaction and integration related expenses including severance expense, bank acquisition and due diligence fees, bonus payments related to our successful acquisition of Talmer West Bank, the merger of First Place Bank and Talmer Bank and Trust and the completion of our initial public offering, as well as expenses incurred related to termination of certain software contracts. Excluding transaction related expenses, Talmer West Bank added $10.5 million of operating expense in the first quarter 2014. Excluding Talmer West Bank operating expenses and transaction and integration related expenses of approximately $10.8 million, total operating expense declined by $8.8 million, or 16.5%, compared to fourth quarter 2013, primarily reflecting operating synergies achieved from the integration of First Place Bank into Talmer Bank and Trust.

Income Statement

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2014 was $48.1 million, compared to $39.3 million in the prior quarter.  The increase in net interest income in the first quarter was primarily the result of the addition of $9.1 million of net interest income related to our acquisition of Talmer West Bank and its inclusion into our operations beginning January 1, 2014.   

Our net interest margin was 3.95% in the first quarter 2014, an increase of 23 basis points from 3.72% in the fourth quarter 2013.  The increase in our net interest margin in the first quarter was due to a combination of several factors, the largest being the acquisition of Talmer West Bank, which had a significantly higher proportion of its loan portfolio in commercial real estate loans that, on average, have a higher yield than Talmer Bank and Trust's loan portfolio which has a larger percentage of residential real estate loans.

Our net interest margin benefits from discount accretion on our purchased credit impaired loan portfolio, a component of the accretable yield.  However, given the substantial growth of our organic loan portfolio, diminished size of our covered loan portfolio and the high negative yield on the FDIC indemnification asset, the net interest margin benefit from excess accretable yield is now relatively insignificant, especially when compared to prior quarters.  The accretable yield represents the excess of the net present value of expected future cash flows over the acquisition date fair value on our purchased credit impaired loans and includes both the expected coupon of the loan and the discount accretion.  The accretable yield is recognized as interest income over the expected remaining life of the purchased credit impaired loan.  For the first quarter 2014 and the fourth quarter 2013, the yield on total loans was 5.80% and 5.91%, respectively, while the yield generated using only the expected coupon would have been 5.02% and 4.49%, respectively.  The difference between the actual yield earned on total loans and the yield generated based on the expected coupon represents excess accretable yield.  The expected coupon of the loan considers the actual coupon rate of the loan and does not include any interest income for loans in nonaccrual status.  Our net interest margin is also adversely impacted by the negative yield on the FDIC indemnification asset.  Because our quarterly cash flow re-estimations have continuously resulted in improvements in the overall expected cash flows on covered loans our expected payment from the FDIC under our loss share agreements have declined, resulting in a negative yield on the FDIC indemnification asset.  This negative yield on the FDIC indemnification asset partially offsets the benefits provided by the excess accretable yield.  This negative yield was 21.29% and 19.03% for first quarter 2014 and fourth quarter 2013, respectively.  The combination of the excess accretable yield and negative yield on the FDIC indemnification asset benefitted net interest margin by five basis points and 36 basis points in the first quarter 2014 and fourth quarter 2013, respectively.

Noninterest Income

Noninterest income increased $29.4 million to $53.0 million in the first quarter 2014, compared to $23.6 million for the fourth quarter 2013.  Noninterest income in the first quarter 2014 benefitted from the $37.0 million bargain purchase gain resulting from our acquisition of Talmer West Bank and the inclusion of $4.6 million of noninterest income related directly to Talmer West Bank.  These benefits were partially offset primarily by a decrease in mortgage banking and other loan fees of $6.5 million and the net loss on sales of securities of $2.3 million during the quarter.  The decrease in mortgage banking and other loan fees primarily reflects changes in the fair value of loan servicing rights, which was a detriment to earnings of $3.1 million during the first quarter 2014 versus a benefit of $3.1 million during the fourth quarter 2013 primarily due to movements in interest rates during those periods.  The recognition of $2.3 million of net losses on sales of securities during the first quarter 2014 resulted from management's decision to sell certain securities late in the quarter to take advantage of an opportunity to reinvest the proceeds in securities that improve the duration extension risk and forward looking yield profile of our securities profile.

Noninterest Expenses

Noninterest expenses in the first quarter 2014 totaled $65.6 million, compared to $53.1 million in the fourth quarter 2013.  The increase in total noninterest expenses was primarily due to the addition of Talmer West Bank's $10.5 million of operating costs outside of transaction related expenses in the first quarter 2014 and approximately $10.8 million of transaction and integration related expenses including severance expense, bank acquisition and due diligence fees, bonus payments related to our successful acquisition of Talmer West Bank, the merger of First Place Bank and Talmer Bank and Trust and the completion of our initial public offering, as well as expenses incurred related to termination of certain software contracts.  Outside of the Talmer West Bank and transaction and integration related expenses results for the first quarter 2014 reflect decreases of salary and employee benefits of $4.1 million, professional service fees of $1.5 million, occupancy and equipment expense of $1.1 million and insurance expense of $660 thousand.  These reductions are cost benefits we realized as we continue to rationalize staffing and services in our growing organization.  The following table illustrates certain transaction and integration related items impacting noninterest expense trends during the quarter.










Three months ended March 31, 2014





Transaction and integration


Excluding transaction and

(Dollars in thousands)


Actual


related expenses


integration related expenses

Noninterest expenses







    Salary and employee benefits


$      35,726


$       4,935


$      30,791

    Occupancy and equipment expense


9,148


2,800


6,348

    Data processing fees  


1,740


-


1,740

    Professional service fees  


4,290


1,161


3,129

    FDIC loss sharing expense 


524


-


524

    Bank acquisition and due diligence fees 


1,711


1,711


-

    Marketing expense


1,091


-


1,091

    Other employee expense


729


-


729

    Insurance expense 


1,849


-


1,849

    Other expense 


8,806


240


8,566

       Total noninterest expenses


$      65,614


$      10,847


$      54,767

We caution that earnings can be volatile given that such a large portion of our loan portfolio is comprised of purchased credit impaired loans and because of our on-going acquisition activities.  Income can be significantly impacted by the accounting requirement to periodically re-estimate the cash flows of purchased credit impaired loans and expenses associated with technology conversion and organization integration related activities.

Credit Quality

We recorded our acquired loans at fair value at the date of acquisition with no separate allowance for loan losses.  At March 31, 2014, the allowance for loan losses on uncovered loans was $22.8 million, or 0.72% of total uncovered loans, compared to $17.7 million, or 0.72% of total uncovered loans, at December 31, 2013.  The increase in allowance for loan losses on uncovered loans for the quarter was primarily due to allowance resulting from our quarterly re-estimation of expected cash flows for our uncovered purchased credit impaired loans.  At March 31, 2014, the allowance for loan losses on covered loans was $38.0 million, or 7.63% of total covered loans, compared to $40.4 million, or 7.62% of total covered loans at December 31, 2013.  The decrease in allowance for loan losses on covered loans primarily reflects payments received on loans not previously anticipated, partially offset by the additional allowance resulting from our quarterly re-estimation of expected cash flows for our covered purchased credit impaired loans.

During the first quarter 2014, we completed re-estimations of cash flows expectation for purchased credit impaired loans in each of our acquisitions with the exception of Talmer West Bank since it was acquired during the quarter.  For the re-estimations, loans with decreased cash flow expectations resulted additional loan loss provisions of $5.1 million.  Provisions related to covered loans are partially offset by an increase in the FDIC indemnification asset.  The re-estimations also resulted in a $16.4 million improvement in the gross cash flow expectation for loans which will be recognized prospectively as an increase in the accretable yield.  The improvement in cash flows on covered loans will be partially offset by a continued reduction in the FDIC indemnification asset which will impact future earnings through negative accretion.

All of our acquired loan portfolios are continuing to perform significantly better than initially anticipated.  We believe improvements in performance are primarily due to improvements in the economy and the efforts made by our Special Assets team that manages our acquired loan portfolios.  Similar to the first quarter 2014 re-estimations, the prior re-estimations of cash flows have indicated better overall expected performance than originally anticipated at acquisition.

Balance Sheet and Capital Management

Total assets increased $869.8 million to $5.4 billion at March 31, 2014 compared to $4.5 billion at December 31, 2013.  The acquisition date fair value of assets acquired in our acquisition of Talmer West Bank increased assets by $898.3 million after the $6.5 million of cash consideration paid.  The primary drivers of the increase in assets in the quarter ended March 31, 2014 were a $637.1 million increase in net total loans and a $155.2 million increase in cash and cash equivalents.  

Net total loans at March 31, 2014 were $3.6 billion, which at the end of the quarter included $552.3 million of loans acquired in the Talmer West Bank acquisition, compared to $2.9 billion at December 31, 2013.  Excluding loans from our acquisition of Talmer West Bank, net total loans grew by $84.8 million, or 11.5% annualized, compared to December 31, 2013.  During the quarter, Talmer Bank and Trust experienced $114.6 million of net uncovered organic loan growth, partially offset by $29.8 million of net covered loan run-off.   The Talmer West Bank acquisition added $572.2 million of loans when the transaction closed on January 1, 2014, of which a net $19.9 million ran-off by the end of the quarter.  We continue to be focused on sourcing quality loan growth to overcome the run-off of higher yielding acquired loans.  A significant amount, $497.9 million, or 13.7%, of total loans, are covered by loss sharing agreement entered into with the FDIC.  Acquired loans are reported on the balance sheet at the contractual balance net of remaining discount resulting from acquisition accounting and charge-offs taken since acquisition. 

Total liabilities were $4.7 billion at March 31, 2014 compared to $3.9 billion at December 31, 2013.  The acquisition date fair value of liabilities assumed in our acquisition of Talmer West Bank increased liabilities by $861.3 million.  The increase in liabilities in the quarter ended March 31, 2014 was primarily due to an increase in total deposits of $785.5 million.  While we increased our total deposits by 21.8% during the period, we continued to maintain a low total cost of deposits and total costs of funds of 20 basis points and 32 basis points, respectively, in the first quarter 2014.

Total shareholders' equity increased $80.5 million, or 13.0%, to $697.5 million at March 31, 2014, compared to $617.0 million as of December 31, 2013.  The increase in shareholders' equity primarily reflects our initial public offering completed in February 2014 that raised $42.1 million of capital, after deducting underwriting discounts and commissions and offering expenses and our first quarter 2014 net income of $32.7 million.

Key Performance Goals

  • Our near-term focus continues to be on realizing significant operating synergies associated with the acquisitions of First Place Bank and Talmer West Bank.
  • Consolidation of back office processes and personnel
  • Wind-down of third-party expenses associated with regulatory compliance and systems enhancements
  • Continuing footprint rationalization including branch consolidations and evaluation of potential divestitures
    • In April 2014, we entered into an agreement to sell our 11 Wisconsin branch offices including the deposits in Wisconsin which will allow us to focus on the core banking franchise.
    • Also in April 2014, we entered into an agreement to sell our single branch in Albuquerque, New Mexico along with its deposits and loans.
  • Goal of building a sustainable 1%+ core return on assets by growing upon our foundation and infrastructure

Conference Call and Webcast

Talmer Bancorp, Inc. will host a live conference webcast to review first quarter 2014 financial results at 8:30 a.m. ET on Wednesday, May 7, 2014. The webcast and supplemental financial information can be accessed via Talmer Bancorp Inc.'s "Investor Relations" page at www.talmerbank.com where a link will be provided.  Interested parties may also access the conference call by calling (888) 317-6003 (event ID No. 5166535) or internationally at (412) 317-6061 (event ID No. 5166535). A replay of the Webcast can be accessed via Talmer Bancorp Inc.'s "Investor Relations" page at www.talmerbank.com.

About Talmer Bancorp, Inc.

Headquartered in Troy, Michigan, Talmer Bancorp, Inc. is the holding company for Talmer Bank and Trust and Talmer West Bank.  These banks, operating through branches and lending offices in Michigan, Ohio, Indiana, Wisconsin, Nevada, Illinois and New Mexico, offer a full suite of commercial and retail banking, mortgage banking, wealth management and trust services to small and medium-sized businesses and individuals.

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding Talmer Bancorp Inc.'s results of operations or financial position.  Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. 

Forward-looking Statements

Some of the statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as:  "intend," "plan," "seek," "believe," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods.  Examples of forward-looking statements, include, among others, statements related to our future expectations, including all statements under the heading entitled "Key Performance Goals," statements regarding expectations related to growth opportunities in our markets, our ability to deliver sustained growth through acquisition opportunities, organic growth and the realization of operating synergies from prior acquisitions and our strategic plan.  Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.  Because forward-looking statements relate to the future, they are subject to risks, uncertainties and other factors, such as a downturn in the economy, unanticipated losses related to the integration of, and accounting for, our acquisition transactions, access to funding sources, greater than expected noninterest expenses, volatile credit and financial markets both domestic and foreign, potential deterioration in real estate values, regulatory changes and excessive loan losses, any or all of which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements, as well as additional risks and uncertainties contained in the "Risk Factors" and the forward-looking statement disclosure contained in our Annual Report on Form 10-K for the most recently ended fiscal year, any of which could cause actual results to differ materially from future results expressed or implied by those forward-looking statements.  All forward-looking statements speak only as of the date on which it is made.  We undertake no obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.

Media Contact:




Investor Relations Contact:






Shellie Maitre




Bradley Adams






(248) 498-2858




(248) 498-2862   

 

 

 

Talmer Bancorp, Inc.








Consolidated Balance Sheets



(Unaudited )  



 March 31,  


 December 31,  


 March 31, 


(Dollars in thousands, except per share data)


2014


2013


2013










Assets








Cash and due from banks


$             107,170


$                97,167


$                91,040


Interest-bearing deposits with other banks


318,368


206,160


431,289


Federal funds sold and other short-term investments


105,000


72,029


131,421


     Total cash and cash equivalents


530,538


375,356


653,750


Securities available-for-sale


632,047


620,083


579,320


Federal Home Loan Bank stock


12,335


16,303


15,813


Loans held for sale, at fair value


75,931


85,252


259,670


Loans:








  Residential real estate (includes $17.6 million, $16.3 million and $0
     respectively, measured at fair value) (1)


1,268,200


1,085,453


956,769


  Commercial real estate


1,147,820


755,839


742,490


  Commercial and industrial


573,268


446,644


316,966


  Real estate construction (includes $278 thousand, $1.4 million and $0
     respectively, measured at fair value) (1)


143,569


176,226


117,914


  Consumer


12,932


9,754


13,031


       Total loans, excluding covered loans


3,145,789


2,473,916


2,147,170


           Less: Allowance for loan losses - uncovered


(22,771)


(17,746)


(10,598)


              Net loans - excluding covered loans


3,123,018


2,456,170


2,136,572


  Covered loans


497,920


530,068


661,159


           Less: Allowance for loan losses - covered


(38,000)


(40,381)


(49,914)


              Net loans - covered


459,920


489,687


611,245


        Net total loans


3,582,938


2,945,857


2,747,817


Premises and equipment


56,352


51,001


58,153


FDIC indemnification asset


119,045


131,861


202,202


Other real estate owned 


57,451


29,955


42,944


Loan servicing rights


77,892


78,603


53,761


Core deposit intangible


16,102


13,205


15,199


FDIC receivable


8,130


7,783


15,090


Company-owned life insurance 


39,814


39,500


38,506


Income tax benefit


178,882


126,200


117,700


Other assets


29,744


26,402


30,844


    Total assets


$          5,417,201


$           4,547,361


$           4,830,769


Liabilities








Deposits:








  Noninterest-bearing demand deposits


950,671


779,379


743,238


  Interest-bearing demand deposits


714,043


598,281


547,233


  Money market and savings deposits


1,370,691


1,215,864


1,236,700


  Time deposits


1,270,927


927,313


1,225,664


  Other brokered funds


80,000


80,000


50,498


     Total deposits


4,386,332


3,600,837


3,803,333


FDIC clawback liability


25,593


24,887


22,252


FDIC warrants payable


4,423


4,118


4,452


Short-term borrowings


89,562


71,876


69,035


Long-term debt


177,483


199,037


259,972


Other liabilities


36,340


29,591


82,732


     Total liabilities


4,719,733


3,930,346


4,241,776


Shareholders' equity








Preferred stock - $1.00 par value








   Authorized - 20,000,000 shares at 3/31/2014, 12/31/2013 and 3/31/2013








   Issued and outstanding - 0 shares at 3/31/2014, 12/31/2013 and 3/31/2013


$                         -


$                       -


$                       -


Common stock:








    Class A Voting Common Stock - $1.00 par value








        Authorized - 198,000,000 shares at 3/31/2014, 12/31/2013 and

           3/31/2013








        Issued and outstanding - 69,962,461 shares at 3/31/2014, 66,234,397








       shares at 12/31/2013 and 66,229,397 at 3/31/2013


69,962


66,234


66,229


   Class B Non-Voting Common Stock - $1.00 par value 








       Authorized - 2,000,000 shares at 3/31/2014, 12/31/2013 and

           3/31/2013








       Issued and outstanding - 0 shares at 3/31/2014, 12/31/2013 and

          3/31/2013


-


-


-


  Additional paid-in-capital


404,905


366,428


365,106


  Retained earnings


225,016


192,349


154,247


  Accumulated other comprehensive income (loss), net of tax


(2,415)


(7,996)


3,411


     Total shareholders' equity


697,468


617,015


588,993


Total liabilities and shareholders' equity


$          5,417,201


$           4,547,361


$           4,830,769










 

Talmer Bancorp, Inc.





Consolidated Statements of Income


(Unaudited)







Three months ended March 31,

(Dollars in thousands, except per share data)


2014


2013






Interest income





  Interest and fees on loans


$                    53,420


$                      48,738

  Interest on investments





     Taxable


1,878


1,364

     Tax-exempt


1,952


994

          Total interest on securities


3,830


2,358

  Interest on interest earning cash balances


216


290

  Interest on federal funds and other short term investments


177


200

  Dividends on FHLB stock


185


407

  FDIC indemnification asset


(6,718)


(8,148)

     Total interest income


51,110


43,845

Interest Expense





  Interest-bearing demand deposits


224


167

  Money market and savings deposits


494


518

  Time deposits


1,491


1,661

  Other brokered funds


29


24

  Interest on short-term borrowings


175


22

  Interest on long-term debt


574


796

     Total interest expense


2,987


3,188

     Net interest income 


48,123


40,657

  Provision for loan losses - uncovered


6,424


1,176

  Provision (benefit) for loan losses - covered


(2,498)


1,084

Net interest income after provision for loan losses


44,197


38,397






Noninterest income





  Deposit fee income


3,274


4,512

  Mortgage banking and other loan fees


1,264


5,185

  Net gain on sales of loans


3,040


16,815

  Bargain purchase gain


36,994


71,702

  FDIC loss sharing income


(113)


130

  Accelerated discount on acquired loans


6,466


2,293

  Net gain (loss) on sales of securities


(2,310)


31

  Other income


4,397


2,951

       Total noninterest income


53,012


103,619






Noninterest expenses





  Salary and employee benefits


35,726


52,896

  Occupancy and equipment expense


9,148


7,022

  Data processing fees


1,740


1,647

  Professional service fees


4,290


3,887

  FDIC loss sharing expense


524


696

  Bank acquisition and due diligence fees


1,711


7,229

  Marketing expense


1,091


1,537

  Other employee expense


729


896

  Insurance expense


1,849


2,932

  Other expense


8,806


5,869

      Total noninterest expenses


65,614


84,611

  Income before income taxes


31,595


57,405

  Income tax provision (benefit)


(1,072)


(3,050)

      Net income 


$                    32,667


$                      60,455






Earnings per share:





    Basic


$                         0.48


$                          0.91

    Diluted


$                         0.45


$                          0.89

Average shares outstanding - basic


68,121


66,229

Average shares outstanding - diluted


73,377


68,200






Total comprehensive income


38,248


59,948






 

Talmer Bancorp, Inc.












Consolidated Statements of Income












(Unaudited)














1st


4th


3rd 


2nd


1st




Quarter


Quarter


Quarter


Quarter


Quarter


(Dollars in thousands, except per share data)


2014


2013


2013


2013


2013














Interest income












  Interest and fees on loans


$   53,420


$   45,354


$    49,475


$   51,290


$     48,738


  Interest on investments












     Taxable


1,878


1,880


1,751


1,102


1,364


     Tax-exempt


1,952


1,098


1,132


1,006


994


          Total interest on securities


3,830


2,978


2,883


2,108


2,358


  Interest on interest earning cash balances


216


188


97


201


290


  Interest on federal funds and other short term

     investments


177


204


279


247


200


  Dividends on FHLB stock


185


160


167


138


407


  FDIC indemnification asset


(6,718)


(6,952)


(6,032)


(6,908)


(8,148)


     Total interest income


51,110


41,932


46,869


47,076


43,845


Interest Expense












  Interest-bearing demand deposits


224


173


174


159


167


  Money market and savings deposits


494


430


447


494


518


  Time deposits


1,491


1,250


1,408


1,545


1,661


  Other brokered funds


29


32


38


48


24


  Interest on short-term borrowings


175


24


26


33


22


  Interest on long-term debt


574


739


775


742


796


     Total interest expense


2,987


2,648


2,868


3,021


3,188


     Net interest income 


48,123


39,284


44,001


44,055


40,657


  Provision for loan losses - uncovered


6,424


6,569


2,852


4,923


1,176


  Provision (benefit) for loan losses - covered


(2,498)


(3,319)


(727)


(7,460)


1,084


Net interest income after provision for loan

   losses


44,197


36,034


41,876


46,592


38,397














Noninterest income












  Deposit fee income


3,274


3,179


3,547


4,648


4,512


  Mortgage banking and other loan fees


1,264


7,729


7,222


10,770


5,185


  Net gain on sales of loans


3,040


3,423


5,028


16,139


16,815


  Bargain purchase gain


36,994


-


-


-


71,702


  FDIC loss sharing income


(113)


(3,167)


(4,846)


(2,343)


130


  Accelerated discount on acquired loans


6,466


6,596


4,345


3,920


2,293


  Net gain (loss) on sales of securities


(2,310)


292


-


69


31


  Other income


4,397


5,586


2,741


2,858


2,951


       Total noninterest income


53,012


23,638


18,037


36,061


103,619














Noninterest expenses












  Salary and employee benefits


35,726


29,837


29,766


34,110


52,896


  Occupancy and equipment expense


9,148


6,327


6,582


6,824


7,022


  Data processing fees


1,740


2,049


3,539


1,913


1,647


  Professional service fees


4,290


4,073


4,472


4,425


3,887


  FDIC loss sharing expense


524


483


106


722


696


  Bank acquisition and due diligence fees


1,711


819


171


474


7,229


  Marketing expense


1,091


659


634


654


1,537


  Other employee expense


729


793


1,018


975


896


  Insurance expense


1,849


1,851


1,911


3,280


2,932


  Other expense


8,806


6,199


5,227


6,527


5,869


      Total noninterest expenses


65,614


53,090


53,426


59,904


84,611


  Income before income taxes


31,595


6,582


6,487


22,749


57,405


  Income tax provision (benefit)


(1,072)


(5,971)


(4,057)


7,743


(3,050)


      Net income 


$   32,667


$   12,553


$    10,544


$   15,006


$     60,455














Earnings per share:












    Basic


$        0.48


$       0.19


$        0.16


$       0.23


$         0.91


    Diluted


$        0.45


$       0.18


0.15


0.21


$         0.89


Average shares outstanding - basic


68,121


66,231


66,229


66,229


66,229


Average shares outstanding - diluted


73,377


70,555


69,853


69,853


68,200














Total comprehensive income (loss)


38,248


9,922


10,737


6,036


59,949


























 


Talmer Bancorp, Inc.

















Selected Financial Information

















(Unaudited)

















(Dollars in thousands, except per share data)


2014



 

2013



 

1st Qtr



4th Qtr



3rd Qtr



2nd Qtr


1st Qtr


Earnings Summary















Interest income


$        51,110



$        41,932



$       46,869



$       47,076


$       43,845


Interest expense


2,987



2,648



2,868



3,021


3,188


Net interest income


48,123



39,284



44,001



44,055


40,657


Provision for loan losses - uncovered


6,424



6,569



2,852



4,923


1,176


Provision (benefit) for loan losses - covered


(2,498)



(3,319)



(727)



(7,460)


1,084


Bargain purchase gains


36,994



-



-



-


71,702


Noninterest income


53,012



23,638



18,037



36,061


103,619


Noninterest expense


65,614



53,090



53,426



59,904


84,611


Income before income taxes


31,595



6,582



6,487



22,749


57,405


Income tax provision (benefit)


(1,072)



(5,971)



(4,057)



7,743


(3,050)


Net income


32,667



12,553



10,544



15,006


60,455

















Per Share Data















Basic earnings per common share


$             0.48



$            0.19



$           0.16



$           0.23


$           0.91


Diluted earnings per common share


0.45



0.18



0.15



0.21


0.89


Book value per common share


9.97



9.32



9.16



9.00


8.89


Tangible book value per share (1) 


9.74



9.12



8.95



8.78


8.66


Shares outstanding (in thousands)


69,962



66,234



66,229



66,229


66,229


Average diluted shares (in thousands)


73,377



70,555



69,853



69,853


68,200

















Selected Period End Balances















Total assets


$   5,417,201



$   4,547,361



$  4,741,945



$  4,849,135


$  4,830,769


Securities available-for-sale


632,047



620,083



652,739



662,876


579,320


Total Loans


3,643,709



3,003,984



2,880,727



2,842,782


2,808,329


Uncovered loans


3,145,789



2,473,916



2,322,193



2,239,655


2,147,170


Covered loans


497,920



530,068



558,534



603,127


661,159


FDIC indemnification asset


119,045



131,861



148,325



171,956


202,202


Total deposits


4,386,332



3,600,837



3,662,675



3,741,765


3,803,333


Total liabilities


4,719,733



3,930,346



4,135,114



4,253,286


4,241,776


Total shareholders' equity


697,468



617,015



606,831



595,849


588,993


Tangible shareholders' equity (1)


681,366



603,810



592,963



581,318


573,794

















Performance and Capital Ratios















Return on average assets (annualized)


2.36

%


1.08

%


0.90

%


1.26

%

5.05

%

Return on average equity (annualized)


19.07



8.24



7.09



10.12


41.11


Net interest margin (fully taxable equivalent)

   (annualized) (2) 


3.95



3.72



4.11



4.03


3.74


Tangible average equity to tangible average assets (1)


12.09



12.89



12.37



12.13


12.00


Tier 1 leverage ratio (3)


12.47



11.88



11.43



11.43


10.98


Tier 1 risk-based capital (3)


16.66



18.29



17.83



18.24


19.15


Total risk-based capital (3)


17.72



19.21



18.66



18.91


19.75




-











-


Asset Quality Ratios:















Net charge-offs to average loans, excluding covered

   loans (annualized)  


0.17

%


0.01

%


0.19

%


0.25

%

0.26

%

Nonperforming assets as a percentage of total assets


1.82



1.58



1.57



1.56


1.20


Nonperforming loans as a percent of total loans


1.13



1.40



1.43



1.35


0.54


Nonperforming loans as a percent of total loans,

   excluding covered loans


0.81



0.98



1.02



0.84


0.14


Allowance for loan losses as a percentage of period-

   end loans


1.67



1.93



2.02



2.12


2.15


Allowance for loan losses-uncovered as a percentage

   of period-end uncovered loans


0.72



0.72



0.67



0.62


0.49


Allowance for loan losses as a percentage of

   nonperforming loans, excluding loans accounted

   for under ASC 310-30


50.61



43.52



41.55



51.94


100.61

















(1)  See section entitled "Reconciliation of Non-GAAP Financial Measures."       

(2)  Presented on a tax equivalent basis using a 35% tax rate for all periods presented.

(3)  First quarter 2014 is estimated.

 

Talmer Bancorp, Inc.












Loan Data












(Unaudited)



March 31,


December 31,


September 30,


June 30,


March 31,


(Dollars in thousands)


2014


2013


2013


2013


2013














Uncovered loans












   Residential real estate


$        1,268,200


$            1,085,453


$               998,264


$               990,267


$               956,769


   Commercial real estate












   Non-owner occupied


742,178


581,651


579,751


598,169


613,075


   Owner-occupied


377,678


148,545


135,743


124,291


112,367


   Farmland


27,964


25,643


23,931


18,545


17,048


   Total commercial real estate


1,147,820


755,839


739,425


741,005


742,490


   Commercial and industrial


573,268


446,644


384,265


354,503


316,966


   Real estate construction


143,569


176,226


190,312


141,810


117,914


   Consumer


12,932


9,754


9,927


12,070


13,031


   Total uncovered loans


3,145,789


2,473,916


2,322,193


2,239,655


2,147,170














Covered loans












   Residential real estate


119,408


123,334


128,798


134,625


142,684


   Commercial real estate












   Non-owner occupied


143,460


154,951


161,671


144,536


159,372


   Owner-occupied


108,630


115,435


119,470


157,937


170,553


   Farmland


27,059


29,015


29,253


28,950


32,261


   Total commercial real estate


279,149


299,401


310,394


331,423


362,186


   Commercial and industrial


71,155


78,437


88,749


101,669


119,381


   Real estate construction


16,895


17,218


18,312


22,589


23,082


   Consumer


11,313


11,678


12,281


12,821


13,826


      Total covered loans


497,920


530,068


558,534


603,127


661,159














      Total loans


$        3,643,709


$            3,003,984


$            2,880,727


$            2,842,782


$            2,808,329














 

 

Talmer Bancorp, Inc.











Impaired Loans











(Unaudited)













2014


2013

(Dollars in thousands)


1st Qtr


4th Qtr


3rd Qtr


2nd Qtr


1st Qtr

Uncovered 











   Nonperforming troubled debt restructurings











   Residential real estate


$      2,189


$     2,469


$       1,170


$      205


$      132

   Commercial real estate


2,664


3,581


1,946


2,126


271

   Commercial and industrial


526


415


434


3


-

   Consumer


2


3


3


21


-

   Total nonperforming troubled debt restructurings


5,381


6,468


3,553


2,355


403

Nonaccrual loans other than nonperforming troubled debt

      restructurings











   Residential real estate


11,633


12,946


11,939


12,691


502

   Commercial real estate


6,174


2,010


4,841


2,657


1,012

   Commercial and industrial


1,723


2,266


854


956


917

   Real estate construction


582


510


2,357


70


-

   Consumer


100


97


103


4


70

      Total nonaccrual loans other than nonperforming

      troubled debt restructurings


20,212


17,829


20,094


16,378


2,501

      Total nonaccrual loans


25,593


24,297


23,647


18,733


2,904

   Other real estate


47,286


18,384


16,512


15,906


19,031

   Total nonperforming assets


72,879


42,681


40,159


34,639


21,935












   Performing troubled debt restructurings











   Residential real estate


828


328


4


300


46

   Commercial real estate


3,003


1,637


2,899


45


50

   Commercial and industrial


1,365


1,367


554


1,193


1,263

   Real estate construction


96


90


-


-


-

   Consumer


30


30


30


-


3

   Total performing troubled debt restructurings


5,322


3,452


3,487


1,538


1,362

   Total uncovered impaired assets


$   78,201


$   46,133


$     43,646


$ 36,177


$ 23,297












   Loans 90 days or more past due and still accruing,

      excluding loans accounted for under ASC 310-30


$              3


$        539


$              -


$        66


$          3












Covered 











   Nonperforming troubled debt restructurings











   Residential real estate


$         962


$        900


$          914


$   1,082


$      132

   Commercial real estate


6,235


6,561


5,340


6,330


5,106

   Commercial and industrial


2,780


3,052


3,019


3,858


2,713

   Real estate construction


1,023


926


884


835


206

   Consumer


25


25


26


18


-

   Total nonperforming troubled debt restructurings


11,025


11,464


10,183


12,123


8,157

   Nonaccrual loans other than nonperforming troubled debt

      restructurings











   Residential real estate


368


88


88


71


-

   Commercial real estate


1,563


1,563


1,575


1,025


1,343

   Commercial and industrial


2,124


4,149


5,154


5,985


2,249

   Real estate construction


442


446


457


465


474

   Consumer


-


6


6


10


-

   Total nonaccrual loans other than nonperforming

      troubled debt restructurings


4,497


6,252


7,280


7,556


4,066

   Total nonaccrual loans


15,522


17,716


17,463


19,679


12,223

   Other real estate


10,165


11,571


16,861


21,374


23,913

   Total nonperforming assets


25,687


29,287


34,324


41,053


36,136












   Performing troubled debt restructurings











   Residential real estate


2,582


2,691


2,544


2,405


2,457

   Commercial real estate


15,056


14,391


16,733


16,450


15,567

   Commercial and industrial


3,030


3,802


4,304


4,921


4,518

   Real estate construction


111


163


166


168


115

   Total performing troubled debt restructurings


20,779


21,047


23,747


23,944


22,657

   Total covered impaired assets


$   46,466


$   50,334


$     58,071


$ 64,997


$ 58,793












   Loans 90 days or more past due and still accruing,

      excluding loans accounted for under ASC 310-30


$              7


$             -


$              -


$   3,539


$   1,171












 

 

 


Talmer Bancorp, Inc.















Net Interest Income and Net Interest Margin















(Unaudited)



Three months ended





March 31, 2014


December 31, 2013


March 31, 2013


(Dollars in thousands)



Average Balance

Interest (1)

Average Rate (2)


Average Balance

Interest (1)

Average Rate (2)


Average Balance

Interest (1)

Average Rate (2)


Earning assets:















   Interest-earning balances



$    400,854

$            216

0.22

%

$      278,114

$             188

0.27

%

$      469,326

$             290

0.25

%

   Federal funds sold & other short-term
      investments



70,688

177

1.02


103,011

204

0.79


98,286

200

0.82


   Investment securities (3):















       Taxable



477,801

1,878

1.59


451,467

1,880

1.65


411,861

1,364

1.34


       Tax-exempt



183,986

1,952

5.81


187,911

1,098

3.13


162,292

994

3.35


   FHLB stock



22,426

185

3.34


16,303

160

3.90


15,813

407

10.43


   Gross uncovered loans (4)



3,219,185

39,610

4.99


2,512,137

29,615

4.68


2,357,561

28,212

4.85


   Gross covered loans (4)



513,608

13,810

10.90


534,666

15,739

11.68


704,294

20,526

11.82


   FDIC indemnification asset



127,983

(6,718)

(21.29)


144,949

(6,952)

(19.03)


219,322

(8,148)

(15.07)


          Total earning assets



5,016,531

51,110

4.19

%

4,228,558

41,932

3.97

%

4,438,755

43,845

4.04

%

Non-earning assets:















   Cash and due from banks



119,222




108,896




101,022




   Allowance for loan losses



(61,913)




(57,114)




(58,835)




   Premises and equipment



55,350




52,870




60,645




   Core deposit intangible



16,794




13,527




15,538




   Other real estate owned 



59,541




29,650




43,552




   Loan servicing rights



80,065




73,680




49,893




   FDIC receivable



7,067




10,392




14,874




   Company-owned life insurance



40,963




39,337




38,344




   Other non-earning assets



211,141




135,511




85,276




          Total assets



$5,544,761




$   4,635,307




$   4,789,064



















Interest-bearing liabilities:















   Deposits:















        Interest-bearing DDA



$    709,274

224

0.13


$      595,362

173

0.12


$      552,251

167

0.12


        Money market and savings deposits



1,396,282

494

0.14


1,225,280

430

0.14


1,212,348

518

0.17


        Time deposits



1,327,397

1,491

0.46


943,778

1,250

0.53


1,251,093

1,661

0.54


        Other brokered funds



80,000

29

0.15


80,000

32

0.16


39,907

24

0.24


        Short-term borrowings



102,633

175

0.69


40,219

24

0.24


41,208

22

0.22


        Long-term debt



211,735

574

1.10


252,173

739

1.16


264,252

796

1.22


          Total interest-bearing liabilities



3,827,321

2,987

0.32

%

3,136,812

2,648

0.33

%

3,361,059

3,188

0.38

%

Noninterest-bearing liabilities
   and stockholders' equity:















   Noninterest-bearing DDA



968,029




819,992




732,395




   FDIC clawback liability



25,075




24,485




22,339




   Other liabilities



39,112




44,673




85,046




   Stockholders' equity



685,224




609,345




588,225




          Total liabilities and stockholders' equity



$5,544,761




$   4,635,307




$   4,789,064



















Net interest income




$      48,123




$        39,284




$        40,657


















Interest spread





3.87

%


3.64

%



3.66

%

Net interest margin as a percentage of    interest-earning assets





3.89




3.68




3.71


Tax equivalent effect





0.06




0.04




0.03


Net interest margin as a percentage of
   interest-earning assets (FTE)





3.95

%


3.72

%



3.74

%
















(1) Interest income is shown on actual basis and does not include taxable equivalent adjustments.

(2) Average rates are presented on an annual basis and includes a taxable equivalent adjustment to interest income on tax exempt securities of $683 thousand, $384 thousand and $348 thousand for the three months ended March 31, 2014, December 31, 2013, and March 31, 2013, respectively, using the statutory tax rate of 35%. 

(3) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and  accretion of discounts.

(4) Includes nonaccrual loans.

 

 


Talmer Bancorp, Inc.












Reconciliation of Non-GAAP Financial Measures (1)







(Unaudited)





































2014


2013



(Dollars in thousands, except per shara date)

1st Quarter


4th Quarter


3rd Quarter


2nd Quarter


1st Quarter















Total Shareholders' equity

$    697,468


$       617,015


$      606,831


$      595,849


$     588,993



Less: 












Core deposit intangibles

16,102


13,205


13,868


14,531


15,199



Tangible shareholders' equity

$    681,366


$       603,810


$      592,963


$      581,318


$     573,794















Shares outstanding 

69,962


66,234


66,229


66,229


66,229



Tangible book value per share 

$           9.74


$             9.12


$            8.95


$            8.78


$           8.66















Average Assets

$ 5,544,761


$    4,635,307


$   4,706,431


$   4,781,267


$  4,789,064



Average Equity

685,224


609,345


594,508


593,028


588,225



Average Core Deposit intangibles

16,794


13,527


14,193


14,863


15,538



Tangible average equity to tangible average assets

12.09

%

12.89

%

12.37

%

12.13

%

12.00

%














(1) Management believes these non-GAAP financial measures provide useful information to both management and investors that is supplementary to our financial condition and results of operations in accordance with GAAP; however, we do acknowledge that our non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. 


Logo - http://photos.prnewswire.com/prnh/20120227/CL59542LOGO

 

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow

1414 North Memorial Parkway
Huntsville, AL 35801
256-533-4848

WAFF Is a Proud Member
of the Raycom Family of Stations


FCC Public File
EEO Report
Closed Captioning

All content © Copyright 2000 - 2014 Worldnow and WAFF. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.