TROY, Mich., April 30, 2015 /PRNewswire/ -- Talmer
Bancorp, Inc. (NASDAQ: TLMR) ("Talmer") today reported first
quarter 2015 net income of $9.4
million, compared to $12.5
million for the fourth quarter of 2014 and $38.2 million for the first quarter of
2014. Earnings per diluted common share were $0.12 for the first quarter of 2015, compared to
$0.16 for the fourth quarter of 2014
and $0.52 for the first quarter of
2014. The first quarter of 2014 included a $42.0 million bargain purchase gain related to
the acquisition of Talmer West
Bank. In addition, the Board of Directors of Talmer
declared a cash dividend on its Class A common stock of
$0.01 per share on April 29, 2015. The dividend will be paid
on May 22, 2015, to our Class A
common shareholders of record as of May 11,
2015.
![Talmer Bancorp, Inc. logo. Talmer Bancorp, Inc. logo.](http://photos.prnewswire.com/prnvar/20120227/CL59542LOGO)
Talmer Bancorp President and CEO David
Provost commented, "We continue to execute on our strategic
plans to build a leading Midwest community bank. In February,
we completed the acquisition of First of Huron Corp., and its
wholly-owned bank subsidiary, Signature Bank, and additionally
completed the operational integration of Talmer West Bank. We are excited to
welcome the employees and customers of Signature Bank and build
upon our franchise in the thumb area of Michigan. We are
pleased with our core operating results for the quarter and note
that our reported earnings were significantly impacted by two
substantial non-core items: $3.3
million of transaction and integration related expenses and
a $4.1 million detriment to earnings
due to the change in fair value of our loan servicing rights.
The negative impact to our earnings per diluted common share for
the first quarter of 2015 from these non-core items was
approximately $0.07 per diluted
common share. We expect to see an incremental improvement in
our core operating efficiency in the second quarter reflecting the
success of integrating our two most recent acquisitions. Our
team remains optimistic about the substantial growth opportunities
in our existing markets and continues to be well-prepared to pursue
additional acquisitions."
Quarterly Results
Summary
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(Dollars in
thousands, except per share data)
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1st Qtr
2015
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4th Qtr
2014
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1st Qtr
2014
|
|
Earnings
Summary
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|
|
|
|
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Net interest
income
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$
51,036
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$
51,463
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$
48,205
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Total provision for
loan losses
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1,993
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|
2,994
|
|
3,926
|
|
Noninterest
income
|
21,430
|
|
15,834
|
|
57,740
|
|
Noninterest
expense
|
56,595
|
|
48,098
|
|
65,448
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|
Income before income
taxes
|
13,878
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|
16,205
|
|
36,571
|
|
Income tax provision
(benefit)
|
4,441
|
|
3,703
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(1,656)
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Net income
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9,437
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|
12,502
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38,227
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Per Share
Data
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Diluted earnings per
common share
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$
0.12
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$
0.16
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$
0.52
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Tangible book value
per share (1)
|
10.38
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|
10.61
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|
9.82
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Average diluted
common shares (in thousands)
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75,103
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75,759
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73,377
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Performance and
Capital Ratios
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Return on average
assets
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0.62
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%
|
0.85
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%
|
2.75
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%
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Return on average
equity
|
4.97
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|
6.63
|
|
22.15
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Net interest margin
(fully taxable equivalent) (2)
|
3.80
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|
3.89
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|
3.95
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Core efficiency ratio
(1)
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68.60
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67.09
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82.12
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Tangible average
equity to tangible average assets (1)
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12.32
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12.67
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12.17
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Tier 1 leverage ratio
(3)
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11.66
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11.56
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11.13
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Tier 1 risk-based
capital (3)
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13.07
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15.20
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|
16.54
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Total risk-based
capital (3)
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14.11
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16.44
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|
17.60
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-
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(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.
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(3) First quarter
2015 is estimated.
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First Quarter 2015 Compared to Fourth Quarter
2014
- Net income was $9.4 million, or
$0.12 per diluted average common
share, in the first quarter of 2015, compared to $12.5 million, or $0.16 per diluted average common share, for the
fourth quarter of 2014. The decline in net income in the
first quarter of 2015 was primarily due to an increase of
$3.0 million in transaction and
integration related expenses related to the acquisition of First of
Huron Corp. and the operational integration of Talmer West Bank.
- Net total loans increased during the first quarter of 2015 by
$227.3 million. During the
first quarter of 2015, Talmer Bank
and Trust's net total loans grew by $245.1
million, as a result of $163.0
million of loans acquired at fair value in the Signature
Bank transaction and $114.5 million
of other net uncovered loan growth (loans not covered by loss share
agreements with the FDIC), partially offset by $25.5 million of net covered loan run-off (loans
covered by loss share agreements with the FDIC) and $6.9 million of run-off of loans acquired in the
Signature Bank transaction. Talmer
West Bank experienced net loan run-off of $17.8 million in the first quarter of 2015.
- Total deposits increased $229.7
million, to $4.8 billion as of
March 31, 2015, compared to
December 31, 2014. Total
deposit growth included $201.5
million of deposits acquired at fair value in the Signature
Bank transaction, in addition to growth in demand deposits of
$108.8 million, time deposits of
$76.8 million, and money market and
savings deposits of $25.3
million. These increases were partially offset by a
substantial decline in other brokered funds of $182.7 million. The strong growth in core
deposit balances and the decreases in non-core deposit balances
were reflective of management's drive to increase core deposit
growth achieved through programs promoted in the first quarter of
2015.
- Net interest income decreased slightly to $51.0 million in the first quarter of 2015,
compared to $51.5 million in the
fourth quarter of 2014, as the benefit provided by the $187.4 million of average loan increase was more
than offset by an increase in negative accretion of the FDIC
indemnification asset of $1.7
million. Our net interest margin declined nine basis
points to 3.80% in the first quarter of 2015, compared to 3.89% in
the fourth quarter of 2014, due in large part to the increased
negative accretion of the FDIC indemnification asset.
Exclusive of the benefit of excess accretable yield and negative
yield on the FDIC indemnification asset, discussed in detail below,
our core net interest margin in the first quarter of 2015 was 3.76%
compared to 3.64% in fourth quarter of 2014.
- Noninterest income increased $5.6
million to $21.4 million in
the first quarter of 2015, compared to the fourth quarter of
2014. The increase is primarily the result of an increase in
accelerated discount on acquired loans of $4.5 million and a $3.7
million increase in net gain on sales of loans as our
residential loan origination and sales volume increased in the
quarter. Non-interest income was negatively impacted by a
detriment to earnings of $4.1 million
due to the change in the fair value of loan servicing rights, which
is the key driver of the $1.3 million
of negative income for mortgage banking and other loan fees.
- Noninterest expense increased $8.5
million, to $56.6 million in
the first quarter of 2015, compared to the fourth quarter of
2014. The increase in noninterest expense includes an
increase in transaction and integration related expenses of
$3.0 million primarily related to the
acquisition of First of Huron Corp., an increase of $2.2 million in other real estate owned and
repossessed assets valuation expense, and, to a lesser extent, a
seasonal increase in payroll tax expense and the addition of
operating expenses from the acquisition of Signature
Bank.
- Total shareholder's equity of $753.9
million as of March 31, 2015,
decreased $7.8 million compared to
December 31, 2014. The decrease
is primarily the result of our repurchase of warrants to purchase
2.5 million shares of Class A common stock for $19.9 million, partially offset by first quarter
of 2015 net income of $9.4
million.
Income Statement
Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2015 was
$51.0 million, compared to
$51.5 million in the prior
quarter. Our net interest margin was 3.80% in the first
quarter of 2015, a decrease of nine basis points from 3.89% in the
fourth quarter of 2014. The decline in our net interest
margin in the first quarter was due to a combination of several
factors. The largest factors affecting the change in our net
interest margin were the negative impact of an increase in negative
accretion of the FDIC indemnification asset as we continue to
experience increases in cash flow expectations on covered loans as
a result of our quarterly re-estimations and a decline in the
benefit provided by our higher yielding covered loan portfolio
significantly comprised of purchased credit impaired loans as the
balances continue to run-off. These negative impacts were partially
offset by an increase in the yield on our uncovered loans due to a
combination of a shift in the composition of loans to a higher
percentage of commercial loans, which generally have higher yields
than residential mortgage loans, and an increase in the benefit
provided from discount accretion on our purchased credit impaired
loan portfolio.
Our net interest margin benefitted from discount accretion on
our purchased credit impaired loan portfolio, a component of the
accretable yield. The accretable yield for purchased credit
impaired loans includes both the expected coupon of the loan and
the discount accretion, and is recognized as interest income over
the expected remaining life of the loans. For the first
quarter of 2015 and the fourth quarter of 2014, the yield on
uncovered loans was 4.90% and 4.71%, respectively, while the yield
generated using only the expected coupon would have been 4.36% and
4.25%, respectively. For the first quarter of 2015 and the
fourth quarter of 2014, the yield on covered loans was 12.83% and
13.03%, respectively, while the yield generated using only the
expected coupon would have been 7.44% and 6.20%,
respectively. The difference between the actual yield earned
on total loans and the yield generated based on the contractual
coupon (not including any interest income for loans in nonaccrual
status) represents excess accretable yield. 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 continued to result in improvements in the
overall expected cash flows on covered loans, our expected payment
from the FDIC under our loss share agreements has 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 60.0%, representing
$9.3 million, for the first quarter
of 2015 compared to 38.41%, representing $7.5 million, for the fourth quarter of
2014. The combination of the excess accretable yield on both
covered and uncovered loans, offset by the negative yield on the
FDIC indemnification asset, benefitted net interest margin by four
basis points in the first quarter of 2015 compared to 25 basis
points the fourth quarter of 2014. Therefore, excluding the
benefit of excess accretable yield and negative yield on the FDIC
indemnification asset, our net interest margin in the first quarter
of 2015 was 3.76% compared to 3.64% in fourth quarter of
2014. The increase in the core net interest margin in the
first quarter of 2015 is primarily due to an increase in the yield
on our uncovered loans due to a shift in the composition of loans
to a higher percentage of commercial loans, which generally have
higher yields than residential mortgage loans.
Noninterest Income
Noninterest income increased $5.6
million to $21.4 million in
the first quarter of 2015, compared to the fourth quarter of
2014. The increase is primarily the result of an increase in
accelerated discount on acquired loans of $4.5 million and a $3.7
million increase in net gain on sales of loans as our
residential loan origination and sales volume increased in the
quarter. Accelerated discount on acquired loans results from
the accelerated recognition of a portion of the loan discount that
would have been recognized over the expected life of the loan and
occurs when a loan is paid in full or otherwise settled.
Partially offsetting these items was a decrease in other
noninterest income of $840 thousand,
an $824 thousand increase in the
amounts due to the FDIC resulting from higher recoveries recognized
included within "FDIC loss sharing income" and a decrease in
mortgage banking and other loan fees of $396
thousand. The decrease in mortgage banking and other
loan fees was significantly impacted by a detriment to earnings of
$4.1 million due to the change in the
fair value of loan servicing rights. In the fourth quarter of
2014, the change in the fair value of loan servicing rights was a
detriment of $3.7 million. The
changes in the fair value of loan servicing rights were due mainly
to downward movements in market interest rate during those
periods.
As we have noted in prior quarters, we have chosen not the hedge
our investment in loan servicing rights. Since our loan
servicing rights are accounted for under the fair market value
measurement method, decreases in interest rates generally result in
a detriment to earnings due to an anticipated increase in
prepayments speeds, whereas increases in interest rates generally
result in a benefit to earnings due to the opposite effect.
The large majority of our servicing rights were acquired on
January 1, 2013 at the time we
acquired First Place Bank. While there has been meaningful
reported earnings volatility due to our decision not to hedge our
loan servicing rights, the cumulative acquisition-to-date detriment
to pre-tax earnings due to the decline in fair value has only been
approximately $100 thousand given
that the valuation expenses taken over the past few quarters were
substantially offset by the valuation gains recognized during the
year ended December 31, 2013.
If interest rates were to rise significantly, we expect we would
implement a loan servicing rights hedge strategy to reduce
potential earnings volatility going forward.
Noninterest Expense
Noninterest expense in the first quarter of 2015 increased
$8.5 million, to $56.6 million in the first quarter of 2015,
compared to the fourth quarter of 2014. The increase in
noninterest expense includes an increase in transaction and
integration related expenses of $3.0
million, an increase of $2.2
million in other real estate and repossessed assets
valuation expense, and, to a lesser extent, a seasonal increase in
payroll tax expense and the addition of operating expenses from the
acquisition of Signature Bank.
Our core efficiency ratio for the first quarter of 2015 was
68.60%, compared to 67.09% for the fourth quarter of 2014.
The slight increase in the ratio in the first quarter of 2015
primarily reflects the drag on the efficiency ratio as a result of
the increase in negative accretion of the indemnification asset, an
increase in other real estate and repossessed assets valuation
expense, seasonally high payroll tax expense, and an increase in
salary and employee benefits related to Signature Bank employees
that were retained during the operational integration
process. These items were partially offset by an increase in
accelerated discount on acquired loans. The efficiency ratio
is a measure of noninterest expense as a percent of net interest
income and noninterest income. The core efficiency ratio
begins with the efficiency ratio and then excludes certain items
deemed by management to not be related to regular operations.
The first quarter of 2015 core efficiency ratio excludes the fair
value adjustment to our loan servicing rights of $4.1 million, transaction and integration related
costs of $3.3 million and the FDIC
loss sharing income, which was a detriment of $1.1 million. The fourth quarter of 2014
core efficiency ratio excludes the fair value adjustment to our
loan servicing rights of $3.7
million, transaction and integration related costs of
$329 thousand and the FDIC loss
sharing income, which was a detriment of $244 thousand.
Credit Quality
The total net provision for loan losses in the first quarter of
2015 decreased $1.0 million to
$2.0 million, compared to
$3.0 million in the fourth quarter of
2014. The decrease in the net provision for loan losses was
primarily due to additional relief of allowance resulting from
unanticipated payments received on loans, a lesser amount of new
loan originations compared to the fourth quarter of 2014 and a
lower level of loan loss provisions resulting from our quarterly
cash flow re-estimations on purchased credit impaired loans,
partially offset by additional specific allowances based on the
individual evaluation of certain loans.
The provision for loan losses on uncovered loans in the first
quarter of 2015 decreased $2.2
million to $3.4 million,
compared to the fourth quarter of 2014. At March 31, 2015, the allowance for loan losses on
uncovered loans was $34.5 million, or
0.83% of total uncovered loans, compared to $33.8 million, or 0.87% of total uncovered loans,
at December 31, 2014. The
increase in allowance for loan losses on uncovered loans for the
quarter was primarily due to impairment resulting from our
quarterly re-estimation of cash flows for our uncovered purchased
credit impaired loans, additional specific allowance based on the
individual evaluation of certain loans and the impact of organic
loan growth. Because we record all acquired loans at fair
value, we did not record an allowance for loan losses related to
the acquired loans from Signature Bank on the acquisition date.
The net benefit for loan losses on covered loans in the first
quarter of 2015 decreased $1.2
million to a benefit of $1.4
million, compared to the fourth quarter of 2014. At
March 31, 2015, the allowance for
loan losses on covered loans was $18.0
million, or 5.66% of total covered loans, compared to
$21.4 million, or 6.16% of total
covered loans at December 31,
2014. The decrease in allowance for loan losses on covered
loans primarily reflects the relief of allowance resulting from
payments received on covered loans previously carrying an allowance
for loan loss, partially offset by impairment resulting from our
quarterly re-estimations of cash flows for our covered purchased
credit impaired loans.
During the first quarter of 2015, we completed re-estimations of
cash flow expectations for purchased credit impaired loans acquired
in each of our acquisitions, with the exception of Signature Bank
since it was acquired during the quarter. For the
re-estimations, loans with changes in cash flow expectations
resulted in net additional loan loss provisions of $2.7 million ($1.7
million covered and $1.0
million uncovered). The re-estimations also resulted
in a $29.4 million improvement in the
gross cash flow expectations for purchased credit impaired 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. For loans with cash flow expectation
improvements, any previously recorded impairment is reversed with
any additional increase in cash flows recognized prospectively as
an increase in the accretable yield.
All of our acquired loan portfolios are continuing to perform
significantly better than initially anticipated. We believe
improvements in performance are primarily due to the strengthening
economy and the efforts made by our Special Assets team that
manages our acquired loan portfolios. Similar to the first
quarter 2015 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 $407.7
million to $6.3 billion at
March 31, 2015 compared to
$5.9 billion at December 31, 2014. The acquisition date
fair value of assets acquired in our acquisition of First of Huron
Corp. increased assets by $218.2
million after the $13.4
million of cash consideration paid. The acquisition
resulted in goodwill of $2.9 million
that was recognized at acquisition date. The primary drivers of the
increase in assets in the quarter ended March 31, 2015 were increases in cash and cash
equivalents of $232.1 million and in
net total loans of $227.3 million,
partially offset by decreases of $26.9
million in loans held for sale, $16.3
million in the FDIC indemnification asset and $16.2 million in loan servicing rights. The
decrease in the FDIC indemnification asset primarily reflects the
impact of $9.3 million of
indemnification asset negative accretion, $5.0 million of claims filed for losses on
covered loans and $1.7 million of
indemnification write-off due to settlements and the results of our
quarterly re-estimations of cash flow expectations for covered
purchased credit impaired loans. The decrease in loan
servicing rights primarily reflects the sale of $12.7 million of loan servicing rights in the
first quarter of 2015 and the $4.1
million decline due to the change in the fair value of loan
servicing rights discussed previously.
Net total loans at March 31, 2015
increased $227.3 million to
$4.4 billion, compared to
$4.2 billion at December 31, 2014. During the first quarter
of 2015, Talmer Bank and Trust's net
total loans grew by $245.1 million
resulting from $163.0 million
acquired February 6, 2015 in our
acquisition of First of Huron Corp. and $114.5 million of net uncovered loan growth,
partially offset by $25.5 million of
net covered loan run-off and $6.9
million of run-off of loans acquired in the Signature Bank
transaction. The net uncovered loan growth of $114.5 million was driven primarily by growth in
our commercial and industrial and commercial real estate loan
portfolios. Talmer West Bank
experienced net loan run-off of $17.8
million in the first quarter of 2015. We continue to
be focused on sourcing quality loan growth to overcome the run-off
of higher-yielding acquired loans. Acquired loans, which
total $1.8 billion, or 40.9% of total
loans, at March 31, 2015 are reported
on the balance sheet at the contractual balance, net of remaining
discount resulting from acquisition accounting and charge-offs
taken since acquisition.
The FDIC indemnification asset balance was $50.7 million at March 31,
2015. Of this amount, we expect approximately $25.5 million to be collected from the FDIC and
the remaining $25.2 million to be
amortized prior to the end of the associated loss share agreements,
as a result of expected improvements in cash flow expectations on
covered loans. At March 31, 2015, the
FDIC indemnification asset included approximately $3.9 million related to covered loans and
approximately $93 thousand related to
covered other real estate under loss share agreements that will
expire at the end of the second quarter of 2015. Any losses on
covered assets after the applicable loss share agreement expires
will not be eligible for reimbursement from the FDIC. As such, to
the extent that loss share coverage ends prior to the loss
triggering event on a covered asset, impairment on any remaining
FDIC indemnification asset associated with the covered asset would
be required. Management is closely monitoring the outcome of
anticipated losses on covered assets and has proactively reviewed
the portfolios of covered loans and other real estate that are
under loss share agreements that are expiring to evaluate the
appropriateness of the associated remaining FDIC indemnification
asset.
Total liabilities were $5.5
billion at December 31, 2014
compared to $5.1 billion at
December 31, 2014. The
acquisition date fair value of liabilities assumed in our
acquisition of First of Huron Corp. increased liabilities by
$218.2 million. The
$415.4 million increase in
liabilities in the quarter ended March 31,
2015 was primarily due to increases in total deposits of
$229.7 million, long-term debt of
$108.3 million and short-term
borrowings of $81.0 million.
Total deposit growth included time deposits of $124.8 million, interest-bearing demand deposits
of $123.3 million, money market and
savings deposits of $87.7 million and
noninterest-bearing demand deposits of $76.6
million, partially offset by a decrease in other brokered
funds of $182.7 million. The
increase in long-term debt primarily reflects additional Federal
Home Loan Bank ("FHLB") advances entered into during the
period. The increase in short-term borrowings primarily
reflects an increase in federal funds purchased of $126.0 million and a $20.0
million draw on our existing line of credit in order to
facilitate the repurchase of warrants, partially offset by a
decrease in short-term FHLB borrowings of $60.0 million.
Total shareholders' equity of $753.9
million as of March 31, 2015,
decreased $7.8 million compared to
December 31, 2014. The decrease
is primarily the result of our repurchase of warrants to purchase
2.5 million shares of $19.9 million,
partially offset by first quarter of 2015 net income of
$9.4 million. Our Tier 1
leverage ratio was 11.66% at March 31,
2015 compared to 11.56% at December
31, 2014.
Key Performance Goals
Our near-term focus continues to be on driving quality loan and
core deposit growth and realizing additional operating synergies as
we move toward fully integrating our acquired banks. This
includes the consolidation of back office processes, personnel and
facilities and the wind-down of third party expenses associated
with meeting regulatory compliance and system enhancements.
Recent increases in the level of merger activity in our market area
offer the potential for additional opportunities to further
leverage our capital position; however, we will remain disciplined
in our evaluation of the risks and challenges in each and every
deal. The effective integration of operations and culture
from previous acquisitions and the ongoing investment in core
growth provide momentum in our pursuit of delivering a sustainable
1%+ core return on assets.
Conference Call and Webcast
Talmer Bancorp, Inc. will host a live conference webcast to
review first quarter 2015 financial results at 10:00 a.m. ET on Thursday,
April 30, 2015. The webcast may be accessed through Talmer'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. 5221748) or internationally at
(412) 317-6061. A replay of the webcast will be available for
approximately 90 days after the event on Talmer'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, Illinois, Indiana, Maryland and Nevada, 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 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 and our conference
call 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, including, among others, statements related to our
future expectations, including all statements under the heading
entitled "Key Performance Goals," statements about further
incremental improvements in our operating efficiencies in 2015,
deposit growth, and loan growth. 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, excessive
loan losses, 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.
Talmer Bancorp,
Inc.
|
|
|
|
|
|
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
(Dollars in
thousands, except per share data)
|
2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
$
77,957
|
|
$
86,185
|
|
$
107,170
|
|
Interest-bearing
deposits with other banks
|
303,926
|
|
96,551
|
|
318,368
|
|
Federal funds sold
and other short-term investments
|
104,000
|
|
71,000
|
|
105,000
|
|
Total cash and cash
equivalents
|
485,883
|
|
253,736
|
|
530,538
|
|
Securities
available-for-sale
|
730,393
|
|
740,819
|
|
632,047
|
|
Federal Home Loan
Bank stock
|
20,744
|
|
20,212
|
|
12,335
|
|
Loans held for sale,
at fair value
|
66,556
|
|
93,453
|
|
75,931
|
|
Loans:
|
|
|
|
|
|
|
Residential
real estate (includes $21.8 million, $18.3 million and $17.6
million
respectively, measured at fair value)
|
1,474,042
|
|
1,426,012
|
|
1,267,714
|
|
Commercial
real estate
|
1,404,906
|
|
1,310,938
|
|
1,147,793
|
|
Commercial and
industrial
|
947,735
|
|
869,477
|
|
573,268
|
|
Real estate
construction (includes $431 thousand, $1.2 million and $278
thousand
respectively, measured at fair value)
|
140,893
|
|
131,686
|
|
143,569
|
|
Consumer
|
188,508
|
|
164,524
|
|
12,932
|
|
Total loans,
excluding covered loans
|
4,156,084
|
|
3,902,637
|
|
3,145,276
|
|
Less: Allowance for loan losses - uncovered
|
(34,477)
|
|
(33,819)
|
|
(22,771)
|
|
Net loans - excluding covered loans
|
4,121,607
|
|
3,868,818
|
|
3,122,505
|
|
Covered
loans
|
317,593
|
|
346,490
|
|
497,920
|
|
Less: Allowance for loan losses - covered
|
(17,988)
|
|
(21,353)
|
|
(38,000)
|
|
Net loans - covered
|
299,605
|
|
325,137
|
|
459,920
|
|
Net
total loans
|
4,421,212
|
|
4,193,955
|
|
3,582,425
|
|
Premises and
equipment
|
48,150
|
|
48,389
|
|
58,666
|
|
FDIC indemnification
asset
|
50,702
|
|
67,026
|
|
119,045
|
|
Other real estate
owned and repossessed assets
|
42,921
|
|
48,743
|
|
57,512
|
|
Loan servicing
rights
|
54,409
|
|
70,598
|
|
77,892
|
|
Core
deposit intangible
|
14,796
|
|
13,035
|
|
16,102
|
|
Goodwill
|
2,926
|
|
-
|
|
-
|
|
FDIC
receivable
|
7,839
|
|
6,062
|
|
8,130
|
|
Company-owned life
insurance
|
103,924
|
|
97,782
|
|
39,814
|
|
Income tax
benefit
|
182,223
|
|
177,472
|
|
185,455
|
|
Other
assets
|
47,273
|
|
40,982
|
|
29,684
|
|
Total assets
|
$
6,279,951
|
|
$
5,872,264
|
|
$
5,425,576
|
|
Liabilities
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Noninterest-bearing demand deposits
|
$
964,163
|
|
$
887,567
|
|
$
950,671
|
|
Interest-bearing demand deposits
|
784,001
|
|
660,697
|
|
714,043
|
|
Money market
and savings deposits
|
1,257,919
|
|
1,170,236
|
|
1,370,691
|
|
Time
deposits
|
1,312,992
|
|
1,188,178
|
|
1,270,927
|
|
Other brokered
funds
|
459,499
|
|
642,185
|
|
80,000
|
|
Total
deposits
|
4,778,574
|
|
4,548,863
|
|
4,386,332
|
|
FDIC clawback
liability
|
27,881
|
|
26,905
|
|
25,593
|
|
FDIC warrants
payable
|
4,472
|
|
4,633
|
|
4,423
|
|
Short-term
borrowings
|
216,747
|
|
135,743
|
|
89,562
|
|
Long-term
debt
|
462,252
|
|
353,972
|
|
177,483
|
|
Other
liabilities
|
36,172
|
|
40,541
|
|
39,155
|
|
Total
liabilities
|
5,526,098
|
|
5,110,657
|
|
4,722,548
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Preferred stock -
$1.00 par value
|
|
|
|
|
|
|
Authorized -
20,000,000 shares at 3/31/2015, 12/31/2014 and 3/31/2014
|
|
|
|
|
|
|
Issued and
outstanding - 0 shares at 3/31/2015, 12/31/2014, and
3/31/2014
|
-
|
|
-
|
|
-
|
|
Common
stock:
|
|
|
|
|
|
|
Class A
Voting Common Stock - $1.00 par value
|
|
|
|
|
|
|
Authorized
-198,000,000 shares at 3/31/2015, 12/31/2014, and
3/31/2014
|
|
|
|
|
|
|
Issued and
outstanding -70,938,113 shares at 03/31/2015, 70,532,122
shares
|
|
|
|
|
|
|
at 12/31/2014,
and 69,962,461 shares at 3/31/2014
|
70,938
|
|
70,532
|
|
69,962
|
|
Class B
Non-Voting Common Stock - $1.00 par value
|
|
|
|
|
|
|
Authorized -
2,000,000 shares at 3/31/2015, 12/31/2014, and 3/31/2014
|
|
|
|
|
|
|
Issued and
outstanding - 0 shares at 3/31/2015, 12/31/2014, and
3/31/2014
|
-
|
|
-
|
|
-
|
|
Additional
paid-in-capital
|
385,755
|
|
405,436
|
|
404,905
|
|
Retained
earnings
|
290,520
|
|
281,789
|
|
230,576
|
|
Accumulated
other comprehensive income (loss), net of tax
|
6,640
|
|
3,850
|
|
(2,415)
|
|
Total shareholders'
equity
|
753,853
|
|
761,607
|
|
703,028
|
|
Total liabilities
and shareholders' equity
|
$
6,279,951
|
|
$
5,872,264
|
|
$
5,425,576
|
|
Talmer Bancorp,
Inc.
|
|
|
|
|
Consolidated
Statements of Income
|
(Unaudited)
|
|
|
|
|
|
Three months ended
March 31,
|
|
(Dollars in
thousands, except per share data)
|
2015
|
|
2014
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
Interest and
fees on loans
|
$
59,944
|
|
$
53,501
|
|
Interest on
investments
|
|
|
|
|
Taxable
|
2,323
|
|
1,866
|
|
Tax-exempt
|
1,615
|
|
1,965
|
|
Total interest on securities
|
3,938
|
|
3,831
|
|
Interest on
interest-earning cash balances
|
86
|
|
216
|
|
Interest on
federal funds and other short-term investments
|
165
|
|
140
|
|
Dividends on
FHLB stock
|
245
|
|
222
|
|
FDIC
indemnification asset
|
(9,250)
|
|
(6,718)
|
|
Total interest
income
|
55,128
|
|
51,192
|
|
Interest
Expense
|
|
|
|
|
Interest-bearing demand deposits
|
290
|
|
224
|
|
Money market
and savings deposits
|
471
|
|
494
|
|
Time
deposits
|
1,827
|
|
1,491
|
|
Other brokered
funds
|
623
|
|
29
|
|
Interest on
short-term borrowings
|
79
|
|
175
|
|
Interest on
long-term debt
|
802
|
|
574
|
|
Total interest
expense
|
4,092
|
|
2,987
|
|
Net interest
income
|
51,036
|
|
48,205
|
|
Provision for
loan losses - uncovered
|
3,412
|
|
6,424
|
|
Benefit for
loan losses - covered
|
(1,419)
|
|
(2,498)
|
|
Net interest
income after provision for loan losses
|
49,043
|
|
44,279
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
Deposit fee
income
|
2,320
|
|
3,298
|
|
Mortgage
banking and other loan fees
|
(1,261)
|
|
1,085
|
|
Net gain on
sales of loans
|
8,618
|
|
3,044
|
|
Bargain
purchase gain
|
-
|
|
41,977
|
|
FDIC loss
sharing income
|
(1,068)
|
|
(113)
|
|
Accelerated
discount on acquired loans
|
8,198
|
|
6,466
|
|
Net loss on
sales of securities
|
(107)
|
|
(2,310)
|
|
Other
income
|
4,730
|
|
4,293
|
|
Total
noninterest income
|
21,430
|
|
57,740
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
Salary and
employee benefits
|
29,212
|
|
35,851
|
|
Occupancy and
equipment expense
|
7,666
|
|
9,043
|
|
Data
processing fees
|
1,854
|
|
1,740
|
|
Professional
service fees
|
3,543
|
|
4,037
|
|
FDIC loss
sharing expense
|
949
|
|
524
|
|
Bank
acquisition and due diligence fees
|
1,412
|
|
2,929
|
|
Marketing
expense
|
1,095
|
|
1,091
|
|
Other employee
expense
|
934
|
|
643
|
|
Insurance
expense
|
1,530
|
|
1,831
|
|
Other
expense
|
8,400
|
|
7,759
|
|
Total noninterest
expense
|
56,595
|
|
65,448
|
|
Income before
income taxes
|
13,878
|
|
36,571
|
|
Income tax
provision (benefit)
|
4,441
|
|
(1,656)
|
|
Net
income
|
$
9,437
|
|
$
38,227
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
$
0.13
|
|
$
0.56
|
|
Diluted
|
$
0.12
|
|
$
0.52
|
|
Average common
shares outstanding - basic
|
70,216
|
|
68,121
|
|
Average common
shares outstanding - diluted
|
75,103
|
|
73,377
|
|
|
|
|
|
|
Total
comprehensive income
|
$
12,227
|
|
$
43,808
|
|
Talmer Bancorp,
Inc.
|
|
|
|
|
|
|
Consolidated
Statements of Income
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
(Dollars in
thousands, except per share data)
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
Interest and
fees on loans
|
$ 59,944
|
|
$ 58,271
|
|
$ 58,128
|
|
$ 56,774
|
|
$ 53,501
|
Interest on
investments
|
|
|
|
|
|
|
|
|
|
Taxable
|
2,323
|
|
2,263
|
|
2,241
|
|
2,139
|
|
1,866
|
Tax-exempt
|
1,615
|
|
1,610
|
|
1,444
|
|
1,213
|
|
1,965
|
Total interest on securities
|
3,938
|
|
3,873
|
|
3,685
|
|
3,352
|
|
3,831
|
Interest on
interest-earning cash balances
|
86
|
|
94
|
|
159
|
|
171
|
|
216
|
Interest on
federal funds and other short-term investments
|
165
|
|
126
|
|
130
|
|
131
|
|
140
|
Dividends on
FHLB stock
|
245
|
|
177
|
|
177
|
|
291
|
|
222
|
FDIC
indemnification asset
|
(9,250)
|
|
(7,539)
|
|
(6,663)
|
|
(5,506)
|
|
(6,718)
|
Total interest
income
|
55,128
|
|
55,002
|
|
55,616
|
|
55,213
|
|
51,192
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
290
|
|
194
|
|
190
|
|
216
|
|
224
|
Money market
and savings deposits
|
471
|
|
457
|
|
487
|
|
492
|
|
494
|
Time
deposits
|
1,827
|
|
1,546
|
|
1,611
|
|
1,432
|
|
1,491
|
Other brokered
funds
|
623
|
|
527
|
|
288
|
|
35
|
|
29
|
Interest on
short-term borrowings
|
79
|
|
90
|
|
122
|
|
33
|
|
175
|
Interest on
long-term debt
|
802
|
|
725
|
|
701
|
|
627
|
|
574
|
Total interest
expense
|
4,092
|
|
3,539
|
|
3,399
|
|
2,835
|
|
2,987
|
Net interest
income
|
51,036
|
|
51,463
|
|
52,217
|
|
52,378
|
|
48,205
|
Provision for
loan losses - uncovered
|
3,412
|
|
5,655
|
|
7,784
|
|
3,219
|
|
6,424
|
Benefit for
loan losses - covered
|
(1,419)
|
|
(2,661)
|
|
(6,275)
|
|
(7,321)
|
|
(2,498)
|
Net interest
income after provision for loan losses
|
49,043
|
|
48,469
|
|
50,708
|
|
56,480
|
|
44,279
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
Deposit fee
income
|
2,320
|
|
2,692
|
|
3,047
|
|
3,188
|
|
3,298
|
Mortgage
banking and other loan fees
|
(1,261)
|
|
(865)
|
|
2,065
|
|
(1,122)
|
|
1,085
|
Net gain on
sales of loans
|
8,618
|
|
4,939
|
|
4,083
|
|
5,681
|
|
3,044
|
Net gain on
sales of branches
|
-
|
|
-
|
|
14,410
|
|
-
|
|
-
|
Bargain
purchase gain
|
-
|
|
-
|
|
-
|
|
-
|
|
41,977
|
FDIC loss
sharing income
|
(1,068)
|
|
(244)
|
|
(2,420)
|
|
(3,434)
|
|
(113)
|
Accelerated
discount on acquired loans
|
8,198
|
|
3,742
|
|
3,663
|
|
4,326
|
|
6,466
|
Net gain
(loss) on sales of securities
|
(107)
|
|
-
|
|
244
|
|
-
|
|
(2,310)
|
Other
income
|
4,730
|
|
5,570
|
|
4,882
|
|
5,312
|
|
4,293
|
Total
noninterest income
|
21,430
|
|
15,834
|
|
29,974
|
|
13,951
|
|
57,740
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
|
|
Salary and
employee benefits
|
29,212
|
|
25,632
|
|
29,795
|
|
30,466
|
|
35,851
|
Occupancy and
equipment expense
|
7,666
|
|
6,911
|
|
7,981
|
|
7,871
|
|
9,043
|
Data
processing fees
|
1,854
|
|
789
|
|
1,610
|
|
2,260
|
|
1,740
|
Professional
service fees
|
3,543
|
|
3,323
|
|
2,964
|
|
2,628
|
|
4,037
|
FDIC loss
sharing expense
|
949
|
|
406
|
|
245
|
|
983
|
|
524
|
Bank
acquisition and due diligence fees
|
1,412
|
|
329
|
|
239
|
|
268
|
|
2,929
|
Marketing
expense
|
1,095
|
|
1,226
|
|
1,001
|
|
1,605
|
|
1,091
|
Other employee
expense
|
934
|
|
658
|
|
621
|
|
752
|
|
643
|
Insurance
expense
|
1,530
|
|
1,615
|
|
1,383
|
|
868
|
|
1,831
|
Other
expense
|
8,400
|
|
7,209
|
|
5,424
|
|
6,370
|
|
7,759
|
Total noninterest
expense
|
56,595
|
|
48,098
|
|
51,263
|
|
54,071
|
|
65,448
|
Income before
income taxes
|
13,878
|
|
16,205
|
|
29,419
|
|
16,360
|
|
36,571
|
Income tax
provision (benefit)
|
4,441
|
|
3,703
|
|
9,904
|
|
(4,246)
|
|
(1,656)
|
Net
income
|
$ 9,437
|
|
$ 12,502
|
|
$ 19,515
|
|
$ 20,606
|
|
$ 38,227
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.13
|
|
$ 0.18
|
|
$ 0.28
|
|
$ 0.29
|
|
$ 0.56
|
Diluted
|
$ 0.12
|
|
$ 0.16
|
|
$ 0.26
|
|
$ 0.27
|
|
$ 0.52
|
Average common
shares outstanding - basic
|
70,216
|
|
70,136
|
|
70,092
|
|
70,021
|
|
68,121
|
Average common
shares outstanding - diluted
|
75,103
|
|
75,759
|
|
75,752
|
|
75,659
|
|
73,377
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income
|
$ 12,227
|
|
$ 14,265
|
|
$ 19,369
|
|
$ 25,254
|
|
$ 43,808
|
Talmer Bancorp,
Inc.
|
|
|
|
|
|
|
|
Selected Financial
Information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
(Dollars in
thousands, except per share data)
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
|
Earnings
Summary
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
$
55,128
|
|
$
55,002
|
|
$
55,616
|
|
$
55,213
|
|
$
51,192
|
|
Interest
expense
|
4,092
|
|
3,539
|
|
3,399
|
|
2,835
|
|
2,987
|
|
Net interest
income
|
51,036
|
|
51,463
|
|
52,217
|
|
52,378
|
|
48,205
|
|
Provision for loan
losses - uncovered
|
3,412
|
|
5,655
|
|
7,784
|
|
3,219
|
|
6,424
|
|
Benefit for loan
losses - covered
|
(1,419)
|
|
(2,661)
|
|
(6,275)
|
|
(7,321)
|
|
(2,498)
|
|
Bargain purchase
gains
|
-
|
|
-
|
|
-
|
|
-
|
|
41,977
|
|
Noninterest
income
|
21,430
|
|
15,834
|
|
29,974
|
|
13,951
|
|
57,740
|
|
Noninterest
expense
|
56,595
|
|
48,098
|
|
51,263
|
|
54,071
|
|
65,448
|
|
Income before income
taxes
|
13,878
|
|
16,205
|
|
29,419
|
|
16,360
|
|
36,571
|
|
Income tax provision
(benefit)
|
4,441
|
|
3,703
|
|
9,904
|
|
(4,246)
|
|
(1,656)
|
|
Net income
|
9,437
|
|
12,502
|
|
19,515
|
|
20,606
|
|
38,227
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
0.13
|
|
$
0.18
|
|
$
0.28
|
|
$
0.29
|
|
$
0.56
|
|
Diluted earnings per
common share
|
0.12
|
|
0.16
|
|
0.26
|
|
0.27
|
|
0.52
|
|
Book value per common
share
|
10.63
|
|
10.80
|
|
10.59
|
|
10.33
|
|
10.05
|
|
Tangible book value
per share (1)
|
10.38
|
|
10.61
|
|
10.40
|
|
10.11
|
|
9.82
|
|
Shares outstanding
(in thousands)
|
70,938
|
|
70,532
|
|
70,504
|
|
70,451
|
|
69,962
|
|
Average common
diluted shares (in thousands)
|
75,103
|
|
75,759
|
|
75,752
|
|
75,659
|
|
73,377
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Period
End Balances
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$ 6,279,951
|
|
$ 5,872,264
|
|
$ 5,745,767
|
|
$ 5,611,649
|
|
$ 5,425,576
|
|
Securities
available-for-sale
|
730,393
|
|
740,819
|
|
734,489
|
|
731,700
|
|
632,047
|
|
Total
loans
|
4,473,677
|
|
4,249,127
|
|
4,035,125
|
|
3,755,487
|
|
3,643,196
|
|
Uncovered
loans
|
4,156,084
|
|
3,902,637
|
|
3,631,333
|
|
3,296,207
|
|
3,145,276
|
|
Covered
loans
|
317,593
|
|
346,490
|
|
403,792
|
|
459,280
|
|
497,920
|
|
FDIC indemnification
asset
|
50,702
|
|
67,026
|
|
82,441
|
|
102,694
|
|
119,045
|
|
Total
deposits
|
4,778,574
|
|
4,548,863
|
|
4,485,597
|
|
4,296,534
|
|
4,386,332
|
|
Total
liabilities
|
5,526,098
|
|
5,110,657
|
|
4,999,115
|
|
4,883,704
|
|
4,722,548
|
|
Total shareholders'
equity
|
753,853
|
|
761,607
|
|
746,652
|
|
727,945
|
|
703,028
|
|
Tangible
shareholders' equity (1)
|
736,131
|
|
748,572
|
|
732,956
|
|
712,567
|
|
686,926
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance and
Capital Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
0.62
|
%
|
0.85
|
%
|
1.36
|
%
|
1.51
|
%
|
2.75
|
%
|
Return on average
equity
|
4.97
|
|
6.63
|
|
10.56
|
|
11.61
|
|
22.15
|
|
Net interest margin
(fully taxable equivalent) (2)
|
3.80
|
|
3.89
|
|
4.05
|
|
4.34
|
|
3.95
|
|
Core efficiency ratio
(1)
|
68.60
|
|
67.09
|
|
70.81
|
|
71.97
|
|
82.12
|
|
Tangible average
equity to tangible average assets (1)
|
12.32
|
|
12.67
|
|
12.64
|
|
12.78
|
|
12.17
|
|
Tier 1 leverage ratio
(3)
|
11.66
|
|
11.56
|
|
11.45
|
|
11.71
|
|
11.13
|
|
Tier 1 risk-based
capital (3)
|
13.07
|
|
15.20
|
|
15.56
|
|
16.16
|
|
16.54
|
|
Total risk-based
capital (3)
|
14.11
|
|
16.44
|
|
16.76
|
|
17.31
|
|
17.60
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs to
average loans, excluding covered loans
|
0.27
|
%
|
0.18
|
%
|
0.25
|
%
|
0.20
|
%
|
0.17
|
%
|
Nonperforming assets
as a percentage of total assets
|
1.55
|
|
1.78
|
|
1.73
|
|
1.60
|
|
1.79
|
|
Nonperforming loans
as a percent of total loans
|
1.25
|
|
1.34
|
|
1.38
|
|
1.04
|
|
1.13
|
|
Nonperforming loans
as a percent of total loans, excluding covered loans
|
0.86
|
|
0.90
|
|
1.19
|
|
0.79
|
|
0.81
|
|
Allowance for loan
losses as a percentage of period-end loans
|
1.17
|
|
1.30
|
|
1.38
|
|
1.52
|
|
1.67
|
|
Allowance for loan
losses-uncovered as a percentage of period-end uncovered
loans
|
0.83
|
|
0.87
|
|
0.82
|
|
0.74
|
|
0.72
|
|
Allowance for loan
losses as a percentage of nonperforming loans, excluding loans
accounted for under ASC 310-30
|
41.84
|
|
39.39
|
|
33.68
|
|
42.07
|
|
50.61
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 2015 is estimated.
|
|
Talmer Bancorp,
Inc.
|
|
|
|
|
|
|
|
|
Loan
Data
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
(Dollars in
thousands)
|
2015
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Uncovered
loans
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
$
1,474,042
|
|
$
1,426,012
|
|
$
1,430,939
|
|
$
1,362,869
|
|
$
1,267,714
|
Commercial real
estate
|
|
|
|
|
|
|
|
|
|
Non-owner
occupied
|
919,287
|
|
888,650
|
|
814,179
|
|
731,743
|
|
742,151
|
Owner-occupied
|
459,002
|
|
417,843
|
|
379,964
|
|
371,406
|
|
377,678
|
Farmland
|
26,617
|
|
4,445
|
|
19,218
|
|
28,199
|
|
27,964
|
Total commercial real
estate
|
1,404,906
|
|
1,310,938
|
|
1,213,361
|
|
1,131,348
|
|
1,147,793
|
Commercial and
industrial
|
947,735
|
|
869,477
|
|
790,867
|
|
647,090
|
|
573,268
|
Real estate
construction
|
140,893
|
|
131,686
|
|
102,920
|
|
112,866
|
|
143,569
|
Consumer
|
188,508
|
|
164,524
|
|
93,246
|
|
42,034
|
|
12,932
|
Total uncovered
loans
|
4,156,084
|
|
3,902,637
|
|
3,631,333
|
|
3,296,207
|
|
3,145,276
|
|
|
|
|
|
|
|
|
|
|
Covered
loans
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
103,429
|
|
108,226
|
|
113,228
|
|
117,507
|
|
119,408
|
Commercial real
estate
|
|
|
|
|
|
|
|
|
|
Non-owner
occupied
|
97,661
|
|
108,692
|
|
121,491
|
|
142,846
|
|
143,460
|
Owner-occupied
|
63,031
|
|
70,492
|
|
80,990
|
|
91,829
|
|
108,630
|
Farmland
|
6,684
|
|
7,478
|
|
17,015
|
|
21,541
|
|
27,059
|
Total commercial real
estate
|
167,376
|
|
186,662
|
|
219,496
|
|
256,216
|
|
279,149
|
Commercial and
industrial
|
29,384
|
|
32,648
|
|
47,252
|
|
60,497
|
|
71,155
|
Real estate
construction
|
8,443
|
|
9,389
|
|
13,734
|
|
14,391
|
|
16,895
|
Consumer
|
8,961
|
|
9,565
|
|
10,082
|
|
10,669
|
|
11,313
|
Total covered
loans
|
317,593
|
|
346,490
|
|
403,792
|
|
459,280
|
|
497,920
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
$
4,473,677
|
|
$
4,249,127
|
|
$
4,035,125
|
|
$
3,755,487
|
|
$
3,643,196
|
Talmer Bancorp,
Inc.
|
|
|
|
|
|
|
|
|
|
|
Impaired
Loans
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
(Dollars in
thousands)
|
|
1st
Qtr
|
|
4th
Qtr
|
|
3rd
Qtr
|
|
2nd
Qtr
|
|
1st
Qtr
|
Uncovered
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
$
4,418
|
|
$
3,984
|
|
$
2,284
|
|
$
1,920
|
|
$
2,189
|
Commercial real
estate
|
|
4,031
|
|
2,644
|
|
3,122
|
|
2,842
|
|
2,664
|
Commercial and
industrial
|
|
43
|
|
180
|
|
135
|
|
541
|
|
526
|
Real estate
construction
|
|
147
|
|
-
|
|
-
|
|
-
|
|
-
|
Consumer
|
|
89
|
|
83
|
|
84
|
|
90
|
|
2
|
Total nonperforming
troubled debt restructurings
|
|
8,728
|
|
6,891
|
|
5,625
|
|
5,393
|
|
5,381
|
Nonaccrual loans
other than nonperforming troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
13,683
|
|
13,390
|
|
13,449
|
|
11,708
|
|
11,633
|
Commercial real
estate
|
|
11,120
|
|
11,112
|
|
9,456
|
|
6,590
|
|
6,174
|
Commercial and
industrial
|
|
1,892
|
|
3,370
|
|
14,339
|
|
2,074
|
|
1,723
|
Real estate
construction
|
|
-
|
|
174
|
|
253
|
|
158
|
|
582
|
Consumer
|
|
254
|
|
174
|
|
161
|
|
76
|
|
100
|
Total nonaccrual loans
other than nonperforming troubled debt restructurings
|
|
26,949
|
|
28,220
|
|
37,658
|
|
20,606
|
|
20,212
|
Total nonaccrual
loans
|
|
35,677
|
|
35,111
|
|
43,283
|
|
25,999
|
|
25,593
|
Other real estate
owned and repossessed assets (1)
|
|
30,761
|
|
36,872
|
|
32,046
|
|
39,848
|
|
45,716
|
Total nonperforming
assets
|
|
66,438
|
|
71,983
|
|
75,329
|
|
65,847
|
|
71,309
|
|
|
|
|
|
|
|
|
|
|
|
Performing troubled
debt restructurings
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
1,875
|
|
1,368
|
|
1,802
|
|
1,628
|
|
828
|
Commercial real
estate
|
|
2,625
|
|
3,785
|
|
2,961
|
|
2,588
|
|
3,003
|
Commercial and
industrial
|
|
2,171
|
|
840
|
|
652
|
|
995
|
|
1,365
|
Real estate
construction
|
|
89
|
|
90
|
|
92
|
|
94
|
|
96
|
Consumer
|
|
220
|
|
234
|
|
56
|
|
29
|
|
30
|
Total performing
troubled debt restructurings
|
|
6,980
|
|
6,317
|
|
5,563
|
|
5,334
|
|
5,322
|
Total uncovered
impaired assets
|
|
$
73,418
|
|
$
78,300
|
|
$
80,892
|
|
$
71,181
|
|
$
76,631
|
|
|
|
|
|
|
|
|
|
|
|
Loans 90 days or more
past due and still accruing, excluding loans accounted for under
ASC 310-30
|
|
$
72
|
|
$
53
|
|
$
595
|
|
$
305
|
|
$
3
|
|
|
|
|
|
|
|
|
|
|
|
Covered
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
$
1,623
|
|
$
1,363
|
|
$
1,304
|
|
$
1,408
|
|
$
962
|
Commercial real
estate
|
|
13,617
|
|
14,343
|
|
4,144
|
|
4,861
|
|
6,235
|
Commercial and
industrial
|
|
1,476
|
|
2,043
|
|
2,438
|
|
2,089
|
|
2,780
|
Real estate
construction
|
|
267
|
|
272
|
|
614
|
|
595
|
|
1,023
|
Consumer
|
|
28
|
|
13
|
|
42
|
|
15
|
|
25
|
Total nonperforming
troubled debt restructurings
|
|
17,011
|
|
18,034
|
|
8,542
|
|
8,968
|
|
11,025
|
Nonaccrual loans
other than nonperforming troubled debt restructurings
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
441
|
|
485
|
|
433
|
|
426
|
|
368
|
Commercial real
estate
|
|
1,180
|
|
1,380
|
|
1,313
|
|
1,489
|
|
1,563
|
Commercial and
industrial
|
|
1,233
|
|
1,517
|
|
1,653
|
|
1,751
|
|
2,124
|
Real estate
construction
|
|
451
|
|
441
|
|
441
|
|
439
|
|
442
|
Consumer
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
Total nonaccrual loans
other than nonperforming troubled debt restructurings
|
|
3,305
|
|
3,823
|
|
3,840
|
|
4,106
|
|
4,497
|
Total nonaccrual
loans
|
|
20,316
|
|
21,857
|
|
12,382
|
|
13,074
|
|
15,522
|
Other real estate
owned and repossessed assets (1)
|
|
10,709
|
|
10,719
|
|
11,835
|
|
10,975
|
|
10,184
|
Total nonperforming
assets
|
|
31,025
|
|
32,576
|
|
24,217
|
|
24,049
|
|
25,706
|
|
|
|
|
|
|
|
|
|
|
|
Performing troubled
debt restructurings
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
3,069
|
|
3,046
|
|
2,860
|
|
2,821
|
|
2,582
|
Commercial real
estate
|
|
8,923
|
|
9,017
|
|
14,915
|
|
16,102
|
|
15,056
|
Commercial and
industrial
|
|
993
|
|
1,137
|
|
2,119
|
|
2,962
|
|
3,030
|
Real estate
construction
|
|
256
|
|
264
|
|
108
|
|
109
|
|
111
|
Total performing
troubled debt restructurings
|
|
13,241
|
|
13,464
|
|
20,002
|
|
21,994
|
|
20,779
|
Total covered impaired
assets
|
|
$
44,266
|
|
$
46,040
|
|
$
44,219
|
|
$
46,043
|
|
$
46,485
|
|
|
|
|
|
|
|
|
|
|
|
Loans 90 days or more
past due and still accruing, excluding loans accounted for under
ASC 310-30
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
49
|
|
$
7
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes closed
branches and operating facilities.
|
|
|
|
|
|
|
|
|
|
|
Talmer Bancorp,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income and Net Interest Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
Three months
ended
|
|
|
March 31,
2015
|
|
December 31,
2014
|
|
March 31,
2014
|
|
(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
|
$ 156,828
|
$
86
|
0.22
|
%
|
$ 147,713
|
$
94
|
0.25
|
%
|
$ 401,306
|
$
216
|
0.22
|
%
|
Federal
funds sold and other short-term
investments
|
97,419
|
165
|
0.69
|
|
69,897
|
126
|
0.71
|
|
70,688
|
140
|
0.80
|
|
Investment securities (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
494,079
|
2,323
|
1.91
|
|
519,774
|
2,263
|
1.73
|
|
475,885
|
1,866
|
1.59
|
|
Tax-exempt
|
236,469
|
1,615
|
3.69
|
|
223,580
|
1,610
|
3.82
|
|
185,903
|
1,965
|
5.79
|
|
FHLB Stock
|
20,681
|
245
|
4.81
|
|
18,671
|
177
|
3.77
|
|
22,426
|
222
|
4.02
|
|
Gross
uncovered loans (4)
|
4,100,979
|
49,511
|
4.90
|
|
3,865,553
|
45,863
|
4.71
|
|
3,218,673
|
39,691
|
5.00
|
|
Gross
covered loans (4)
|
329,767
|
10,433
|
12.83
|
|
377,776
|
12,408
|
13.03
|
|
513,608
|
13,810
|
10.90
|
|
FDIC
indemnification asset
|
62,485
|
(9,250)
|
(60.03)
|
|
77,865
|
(7,539)
|
(38.41)
|
|
127,983
|
(6,718)
|
(21.29)
|
|
Total earning assets
|
5,498,707
|
55,128
|
4.11
|
%
|
5,300,829
|
55,002
|
4.16
|
%
|
5,016,472
|
51,192
|
4.19
|
%
|
Non-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
due from banks
|
91,194
|
|
|
|
101,884
|
|
|
|
118,886
|
|
|
|
Allowance for loan losses
|
(53,268)
|
|
|
|
(52,808)
|
|
|
|
(61,913)
|
|
|
|
Premises
and equipment
|
48,376
|
|
|
|
50,130
|
|
|
|
55,716
|
|
|
|
Core
deposit intangible
|
14,201
|
|
|
|
13,334
|
|
|
|
16,794
|
|
|
|
Goodwill
|
1,723
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Other
real estate owned and repossessed assets
|
48,562
|
|
|
|
48,983
|
|
|
|
59,558
|
|
|
|
Loan
servicing rights
|
60,185
|
|
|
|
73,059
|
|
|
|
80,065
|
|
|
|
FDIC
receivable
|
5,473
|
|
|
|
11,013
|
|
|
|
7,067
|
|
|
|
Company-owned life insurance
|
100,923
|
|
|
|
97,081
|
|
|
|
40,963
|
|
|
|
Other
non-earning assets
|
234,502
|
|
|
|
223,685
|
|
|
|
217,081
|
|
|
|
Total assets
|
$ 6,050,578
|
|
|
|
$ 5,867,190
|
|
|
|
$ 5,550,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
$ 772,181
|
$
290
|
0.15
|
%
|
$ 676,994
|
$
194
|
0.11
|
%
|
$ 709,274
|
$
224
|
0.13
|
%
|
Money
market and savings deposits
|
1,211,958
|
471
|
0.16
|
|
1,174,132
|
457
|
0.15
|
|
1,396,282
|
494
|
0.14
|
|
Time
deposits
|
1,264,103
|
1,827
|
0.59
|
|
1,219,758
|
1,546
|
0.50
|
|
1,327,397
|
1,491
|
0.46
|
|
Other
brokered funds
|
589,239
|
623
|
0.43
|
|
543,784
|
527
|
0.38
|
|
80,000
|
29
|
0.15
|
|
Short-term borrowings
|
49,839
|
79
|
0.65
|
|
165,515
|
90
|
0.22
|
|
102,633
|
175
|
0.69
|
|
Long-term debt
|
401,880
|
802
|
0.81
|
|
326,924
|
725
|
0.88
|
|
211,735
|
574
|
1.10
|
|
Total interest-bearing liabilities
|
4,289,200
|
4,092
|
0.39
|
%
|
4,107,107
|
3,539
|
0.34
|
%
|
3,827,321
|
2,987
|
0.32
|
%
|
Noninterest-bearing liabilities
and shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits
|
921,359
|
|
|
|
934,143
|
|
|
|
968,023
|
|
|
|
FDIC
clawback liability
|
27,107
|
|
|
|
25,923
|
|
|
|
25,075
|
|
|
|
Other
liabilities
|
53,547
|
|
|
|
45,272
|
|
|
|
40,063
|
|
|
|
Shareholders' equity
|
759,365
|
|
|
|
754,745
|
|
|
|
690,207
|
|
|
|
Total liabilities and shareholders' equity
|
$ 6,050,578
|
|
|
|
$ 5,867,190
|
|
|
|
$ 5,550,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
51,036
|
|
|
|
$
51,463
|
|
|
|
$
48,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
spread
|
|
|
3.72
|
%
|
|
3.82
|
%
|
|
|
3.87
|
%
|
Net interest
margin as a percentage of interest-earning assets
|
|
|
3.76
|
%
|
|
3.85
|
%
|
|
|
3.90
|
%
|
Tax equivalent
effect
|
|
|
0.04
|
%
|
|
0.04
|
%
|
|
|
0.05
|
%
|
Net interest
margin as a percentage of
interest-earning assets (FTE)
|
|
|
3.80
|
%
|
|
3.89
|
%
|
|
|
3.95
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 include a taxable equivalent
adjustment to interest income of $534 thousand, $542 thousand and
$688 thousand on tax-exempt securities for the three months ended
March 31, 2015, December 31, 2014, and March 31, 2014,
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)
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
(Dollars in
thousands, except per share data)
|
1st
Quarter
|
|
4th
Quarter
|
|
3rd
Quarter
|
|
2nd
Quarter
|
|
1st
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
$
753,853
|
|
$
761,607
|
|
$
746,652
|
|
$
727,945
|
|
$
703,028
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Core deposit
intangibles
|
14,796
|
|
13,035
|
|
13,696
|
|
15,378
|
|
16,102
|
|
Goodwill
|
2,926
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Tangible
shareholders' equity
|
$
736,131
|
|
$
748,572
|
|
$
732,956
|
|
$
712,567
|
|
$
686,926
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book
value per share:
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
70,938
|
|
70,532
|
|
70,504
|
|
70,451
|
|
69,962
|
|
Tangible book value
per share
|
$
10.38
|
|
$
10.61
|
|
$
10.40
|
|
$
10.11
|
|
$
9.82
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible average
equity to tangible average assets:
|
|
|
|
|
|
|
|
|
|
|
Average
assets
|
$ 6,050,578
|
|
$ 5,867,190
|
|
$ 5,747,108
|
|
$ 5,446,347
|
|
$ 5,550,689
|
|
Average
equity
|
759,365
|
|
754,745
|
|
738,870
|
|
709,982
|
|
690,207
|
|
Average core deposit
intangibles
|
14,201
|
|
13,334
|
|
14,398
|
|
15,740
|
|
16,794
|
|
Average
goodwill
|
1,723
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Tangible average
equity to tangible average assets
|
12.32
|
%
|
12.67
|
%
|
12.64
|
%
|
12.78
|
%
|
12.17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Core efficiency
ratio:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
51,036
|
|
$
51,463
|
|
$
52,217
|
|
$
52,378
|
|
$
48,205
|
|
Noninterest
income
|
21,430
|
|
15,834
|
|
29,974
|
|
13,951
|
|
57,740
|
|
Total
revenue
|
72,466
|
|
67,297
|
|
82,191
|
|
66,329
|
|
105,945
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
(Expense)/benefit due
to change in the fair value of
loan servicing rights
|
(4,084)
|
|
(3,656)
|
|
(176)
|
|
(4,200)
|
|
(2,205)
|
|
FDIC loss sharing
income
|
(1,068)
|
|
(244)
|
|
(2,420)
|
|
(3,434)
|
|
(113)
|
|
Net gains on sales of
branches
|
-
|
|
-
|
|
14,410
|
|
-
|
|
-
|
|
Bargain purchase
gain
|
-
|
|
-
|
|
-
|
|
-
|
|
41,977
|
|
Total core
revenue
|
77,618
|
|
71,197
|
|
70,377
|
|
73,963
|
|
66,286
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest
expense
|
56,595
|
|
48,098
|
|
51,263
|
|
54,071
|
|
65,448
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Transaction and
integration related costs
|
3,347
|
|
329
|
|
1,428
|
|
837
|
|
11,015
|
|
Total core
noninterest expense
|
53,248
|
|
47,769
|
|
49,835
|
|
53,234
|
|
54,433
|
|
|
|
|
|
|
|
|
|
|
|
|
Core efficiency
ratio
|
68.60
|
%
|
67.09
|
%
|
70.81
|
%
|
71.97
|
%
|
82.12
|
%
|
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(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.
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SOURCE Talmer Bancorp, Inc.