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Item 5. Market for Registrant’s Common Equity

2022-03-01 compared with 2021-03-01 · 14 added, 151 removed, 45 unchanged (79% of the section changed)

4 unchanged sentences

As of February 1, 2022, there were 31,950,978 shares of common stock outstanding, held by approximately 539 shareholders of record.

Based on the most recent mailings, the Company believes beneficial shareholders number approximately 8,639.

Based on the most recent analysis, the Company believes beneficial shareholders number approximately 10,206.

As of February 1, 2021, our directors and executive officers own approximately 2% of our outstanding shares of common stock.

The Company commenced the payment of a regular quarterly dividend, in the amount of $0.22 per share, in the second quarter of 2019.

The Company declared aggregate cash dividends of $0.88 per share, or $28.3 million, during 2020.

The Company pays a regular quarterly cash dividend.

In 2021, the Company declared four cash dividends with an aggregate value of $1.40 per share, or $44.7 million.

The payment of a cash dividend on common stock will depend largely upon the ability of the Bank, the Company’s principal operating business, to declare and pay dividends to the Company.

12 unchanged sentences

The Bank currently is not in default under any of its obligations to the FDIC.

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Issuer Repurchase of Common Stock.

1 unchanged sentence

Shares Purchased (3)(4)

Average Price Paid Per

Share Total Number of Shares

Average Price Paid Per Share (5)

Total Number of Shares

Purchased as Part

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Plans or Programs (1) (2)

October 1-31, 2020 — n/a n/a 458,069

November 1-30, 2020 371,300 37.46 371,300 86,769

January 1 - 31, 2021 — n/a n/a 1,588,848

February 1 - 28, 2021 1,466 $42.49 1,466 1,587,382

September 1 - 30, 2021 11,609 $52.94 11,609 1,575,773

December 1-31, 2021 100 $53.53 100 1,575,673

Total 13,175 $51.78 13,175 1,575,673

(1) In August 2019, the Company’s Board of Directors authorized the purchase of up to 1,715,547 shares of the Company’s common stock from the date of approval of the plan through December 31, 2019, subject to earlier termination by the Board of Directors.

The program was announced by a press release dated August 9, 2019 and a Form 8-K filed on August 9, 2019.

On December 18, 2019, the Company’s Board of Directors extended and expanded the program, authorizing the purchase of up to an aggregate of 1,641,000 shares of the Company’s common stock (inclusive of shares remaining under the initial authorization), through December 31, 2020, subject to earlier termination by the Board of Directors (as extended, the “Repurchase Program”).

The extension of the program was announced by a press release dated December 18, 2019 and a Form 8-K filed on December 18, 2019.

Under the Repurchase Program, the Company may acquire its common stock in the open market or in privately negotiated transactions, including 10b5-1 plans.

The Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without notice.

We suspended our share repurchase program during the first quarter of 2020, but the suspension was lifted in the third quarter of 2020.

We did not repurchase any shares during the second and third quarters of 2020.

(2) On December 16, 2020, the Company's Board of Directors adopted a new share repurchase program to take effect starting January 1, 2021, after the expiration of the previous repurchase program on December 31, 2020.

The Board of Directors authorized the repurchase of 1,588,848 shares of common stock, or approximately 5% of the Company's outstanding shares of common stock, under the new repurchase program, which will expire on December 31, 2021, subject to earlier termination of the program by the Board of Directors.

The program was announced by a press release dated December 17, 2020 and a Form 8-K filed on December 17, 2020.

(1) On December 16, 2020, the Company's Board of Directors authorized a new share repurchase program to take effect starting January 1, 2021, after the expiration of the previous repurchase program on December 31, 2020.

The Board of Directors authorized the repurchase of 1,588,848 shares of common stock, or approximately 5% of the Company's outstanding shares of common stock, under this repurchase program, which expired on December 31, 2021.

(2) On December 28, 2021, the Company's Board of Directors authorized a new share repurchase program (the "2022 Repurchase Program") to take effect starting January 1, 2022, after the expiration of the previous repurchase program on December 31, 2021.

The Board of Directors authorized the repurchase of 1,600,000 shares of common stock, or approximately 5% of the Company's outstanding shares of common stock, under 2022 Repurchase Program, which will expire on December 31, 2022, subject to earlier termination of the program by the Board of Directors.

(3) Inclusive of shares remaining available for purchase under the “2022 Repurchase Program”.

(4) Includes shares of the Company’s common stock acquired by the Company in connection with satisfaction of tax withholding obligations on vested restricted shares or restricted share units and certain forfeitures and terminations of employment-related awards and for potential re-issuance to certain employees under equity incentive plans.

(5) Average price paid per share includes commission costs associated with the repurchases.

See Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for “Securities Authorized for Issuance Under Equity Compensation Plans.”

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Stock Price Performance.

The following table compares the cumulative total return on a hypothetical investment of $100 in the Company’s common stock on December 31, 2015 through December 31, 2020, with the hypothetical cumulative total return on the Nasdaq Stock Market Index (U.S.

The following table compares the cumulative total return on a hypothetical investment of $100 in the Company’s common stock from December 31, 2016 through December 31, 2021, with the hypothetical cumulative total return on the Nasdaq Stock Market Index (U.S.

Companies) and the KBW Regional Banking Index for the comparable period, including reinvestment of dividends.

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KBW Nasdaq Regional Banking Index 100.00 101.75 83.95 103.94 94.89 129.65

SELECTED FINANCIAL DATA

The following table shows selected historical consolidated financial data for the Company.

It should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operation” section and the Consolidated Financial Statements and Notes thereto included elsewhere in this report.

Use of Non-GAAP Financial Measures

The information set forth below contains certain financial information determined by methods other than in accordance with GAAP.

These non-GAAP financial measures are “tangible common equity,” “tangible book value per common share,” “efficiency ratio,” and “return on average common equity.” Management uses these non-GAAP measures in its analysis of our performance because it believes these measures are used as a measure of our performance by investors.

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These disclosures should not be considered in isolation or as a substitute for results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures which may be presented by other bank holding companies.

Management compensates for these limitations by providing detailed reconciliations between GAAP information and the non-GAAP financial measures.

A reconciliation table is set forth below following the selected historical consolidated financial data.

Years Ended December 31,

(dollars in thousands except per share data) 2020 2019 2018 2017 2016

Balance Sheets - Period End

Securities $ 1,151,083 $ 843,363 $ 784,139 $ 589,268 $ 538,108

Loans held for sale 88,205 56,707 19,254 25,096 51,629

Loans 7,760,212 7,545,748 6,991,447 6,411,528 5,677,893

Allowance for credit losses 109,579 73,658 69,944 64,758 59,074

Intangible assets, net 105,114 104,739 105,766 107,212 107,419

Total assets 11,117,802 8,988,719 8,389,137 7,479,029 6,890,096

Deposits 9,189,203 7,224,391 6,974,285 5,853,984 5,716,114

Borrowings 568,077 498,667 247,709 618,466 285,390

Total liabilities 9,876,910 7,798,038 7,280,196 6,528,591 6,047,297

Total shareholders’ equity 1,240,892 1,190,681 1,108,941 950,438 842,799

Tangible common equity (1)

1,135,778 1,085,942 1,003,175 843,226 735,380

Statements of Income

Interest income $ 389,986 $ 429,630 $ 393,286 $ 324,034 $ 285,805

Interest expense 68,424 105,585 76,293 40,147 27,640

Provision for credit losses 45,571 13,091 8,660 8,971 11,331

Noninterest income 45,696 25,699 22,586 29,372 27,284

Noninterest expense 144,162 139,862 126,711 118,552 115,016

Income before taxes 176,145 196,791 204,208 185,736 159,102

Income tax expense (2)

43,928 53,848 51,932 85,504 61,395

Net income (2)

132,217 142,943 152,276 100,232 97,707

Cash dividends declared 28,330 22,332 — — —

Net income available to common shareholders (2)

132,217 142,943 152,276 100,232 97,707

Total Revenue (3)

435,682 349,744 339,579 313,259 285,449

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Years Ended December 31,

(dollars in thousands except per share data) 2020 2019 2018 2017 2016

Per Common Share Data

Net income, basic (2)

$ 4.09 $ 4.18 $ 4.44 $ 2.94 $ 2.91

Net income, diluted (2)

4.09 4.18 4.42 2.92 2.86

Dividends declared 0.88 0.66 — — —

Book value (2)

39.05 35.82 32.25 27.80 24.77

Tangible book value (2) (4)

35.74 32.67 29.17 24.67 21.61

Common shares outstanding 31,779,663 33,241,496 34,387,919 34,185,163 34,023,850

Weighted average common shares outstanding, basic 32,334,201 34,178,804 34,306,336 34,138,536 33,587,254

Weighted average common shares outstanding, diluted 32,362,556 34,210,646 34,443,040 34,320,639 34,181,616

Net interest margin 3.19 % 3.77 % 4.10 % 4.15 % 4.16 %

Efficiency ratio (5)

39.25 % 39.99 % 37.31 % 37.84 % 40.29 %

Return on average assets (2)

1.28 % 1.61 % 1.91 % 1.41 % 1.52 %

Return on average common equity (2)

10.98 % 12.20 % 14.89 % 11.06 % 12.27 %

Return on average tangible common equity (2)

12.03 % 13.40 % 16.63 % 12.54 % 14.19 %

CET1 capital (to risk weighted assets) 13.49 % 12.87 % 12.49 % 11.23 % 10.80 %

Total capital (to risk weighted assets) 17.04 % 16.20 % 16.08 % 15.02 % 14.89 %

Tier 1 capital (to risk weighted assets) 13.49 % 12.87 % 12.49 % 11.23 % 10.80 %

Tier 1 capital (to average assets) 10.31 % 11.62 % 12.10 % 11.45 % 10.72 %

Tangible common equity ratio 10.31 % 12.22 % 12.11 % 11.44 % 10.84 %

Dividend payout ratio 21.59 % 15.79 % — — —

Asset Quality

Nonperforming assets and loans 90+ past due $ 65,930 $ 50,216 $ 17,671 $ 14,632 $ 20,569

Nonperforming assets and loans 90+ past due to total assets 0.59 % 0.56 % 0.21 % 0.20 % 0.30 %

Nonperforming loans to total loans 0.79 % 0.65 % 0.23 % 0.21 % 0.31 %

Allowance for credit losses to loans 1.41 % 0.98 % 1.00 % 1.01 % 1.04 %

Allowance for credit losses to nonperforming loans 179.80 % 151.16 % 429.72 % 489.20 % 330.49 %

Net charge-offs $ 20,097 $ 9,377 $ 3,475 $ 3,286 $ 4,945

Net charge-offs to average loans 0.26 % 0.13 % 0.05 % 0.06 % 0.09 %

(1) Tangible common equity, a non-GAAP financial measure, is defined as total common shareholders’ equity reduced by goodwill and other intangible assets.

(2) The reported figure for 2017 includes one-time charges to reduce the carrying value of net deferred tax assets by $14.6 million, required as a result of the reduction in corporate income tax rates to 21% in the 2017 Tax Act.

As the magnitude of the net deferred tax asset revaluation distorts the operational results of the Company, we present in the GAAP reconciliation below this table that show the effect of the net deferred tax asset revaluation during the year ended December 31, 2017.

We believe the information below is important to enable shareholders and other interested parties to assess the core operational performance of the Company.

(3) Total revenue calculated as net interest income plus noninterest income

(4) Tangible book value per common share, a non-GAAP financial measure, is defined as tangible common shareholders’ equity divided by total common shares outstanding.

(5) Computed by dividing noninterest expense by the sum of net interest income and noninterest income.

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The following table details our Non-GAAP to GAAP reconciliation for the years 2016 through 2020.

Non-GAAP Reconciliation Years Ended December 31,

(dollars in thousands except per share data) 2020 2019 2018 2017 2016

Common shareholders’ equity $ 1,240,891 $ 1,190,681 $ 1,108,941 $ 950,438 $ 842,799

Intangible assets (105,114) (104,739) (105,766) (107,212) (107,419)

Tangible common equity $ 1,135,777 $ 1,085,942 $ 1,003,175 $ 843,226 $ 735,380

Book value per common share $ 39.05 $ 35.82 $ 32.25 $ 27.80 $ 24.77

Intangible book value per common share (3.31) (3.15) (3.08) (3.13) (3.16)

Tangible book value per common share $ 35.74 $ 32.67 $ 29.17 $ 24.67 $ 21.61

Total assets $ 11,117,802 $ 8,988,719 $ 8,389,137 $ 7,479,029 $ 6,890,096

Intangible assets (105,114) (104,739) (105,766) (107,212) (107,419)

Tangible assets $ 11,012,688 $ 8,883,980 $ 8,283,371 $ 7,371,817 $ 6,782,677

Tangible common equity ratio 10.31 % 12.22 % 12.11 % 11.44 % 10.84 %

Average common shareholders’ equity $ 1,204,341 $ 1,172,051 $ 1,022,642 $ 906,169 $ 796,400

Average intangible assets (104,903) (105,167) (106,806) (107,117) (107,207)

Average tangible common equity $ 1,099,438 $ 1,066,884 $ 915,836 $ 799,052 $ 689,193

Net Income $ 132,217 $ 142,943 $ 152,276 $ 100,232 $ 97,707

Average tangible common equity $ 1,099,438 $ 1,066,884 $ 915,836 $ 799,052 $ 689,193

Return on Average Tangible Common Equity 12.03 % 13.40 % 16.63 % 12.54 % 14.18 %

The below table shows 2017 without deferred tax asset revaluation.

Year Ended December 31, 2017 (1)

(dollars in thousands except per share data) GAAP Change Non-GAAP

Income Statements:

Income tax expense 85,504 (14,588) 70,916

Net income $ 100,232 (14,588) $ 114,820

Earnings Per Common Share

Basic $ 2.94 $ 0.43 $ 3.36

Diluted $ 2.92 $ 0.42 $ 3.35

Performance Ratios:

Return on average assets 1.41 % 1.62 %

Return on average common equity 11.06 % 12.67 %

(1) Presented here only.

Not included in the Selected Financial Data table above.

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As of December 31, 2017

GAAP Change Non-GAAP

Deferred income taxes 28,770 14,588 43,358

Total Assets $ 7,479,029 $ 14,588 $ 7,493,617

Shareholders’ Equity

Retained earnings 431,544 14,588 446,132

Total Shareholders’ Equity 950,438 14,588 965,026

Total Liabilities and Shareholders’ Equity $ 7,479,029 14,588 $ 7,493,617

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity