What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-15 compared with 2021-03-12 · 6 added, 198 removed, 51 unchanged (80% of the section changed)

31 unchanged sentences

Weighted average exercise

price of outstanding options

compensation plans (excluding

1 unchanged sentence

restricted stock grants

price of outstanding options

securities reflected in column (A)

7 unchanged sentences

value) of shares

as part of publicly

as part of publically

that may yet be

1 unchanged sentence

purchased under the

purchased (1)

plans or programs

2 unchanged sentences

December 1, 2021 through December 31, 2021 (2)

SELECTED FINANCIAL DATA

You should read the following selected historical consolidated financial and other data in conjunction with our consolidated financial statements and related notes and the sections entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations."

As of and for the Years Ended December 31,

(Dollars in thousands, except share and per share data)

Selected Period End Balance Sheet Data:

Cash and cash equivalents

Available-for-sale securities

Mortgage loans held for sale

Gross loans (1)

Allowance for loan losses

Promissory notes from related parties

Other intangible assets, net

Company owned life insurance

Other real estate owned, net

Noninterest-bearing deposits

Interest-bearing deposits

FHLB and FRB borrowings

Convertible subordinated debentures

Subordinated notes

Credit note payable

Preferred stock (liquidation preference)

Total shareholders’ equity

Selected Income Statement Data:

Interest income

Interest expense

Net interest income

Provision for loan losses

Net interest income after provision for loan losses

Trust and investment management fees

Net mortgage gain

Net realized gain on sale of securities

Non-interest income

Non-interest expense

Income before income tax

Income tax expense

Preferred dividends paid to preferred shareholders

Net income (loss) available to common shareholders

Per Share Data:

Earnings (loss) per share, basic

Earnings (loss) per share, diluted

Book value per share (2)

Preferred dividends per share

Weighted average outstanding shares, basic

Weighted average outstanding shares, diluted

Common shares outstanding, end of period

Convertible preferred shares outstanding, end of period

Preferred shares outstanding, end of period

Summary Performance Ratios:

Return on average assets

Return on average equity

Net interest margin

Efficiency ratio (3)

Loans to deposits ratio

Net interest rate spread

Non-interest income to average assets

Non-interest expense to average assets

Non-interest income to total income before non‑interest expense

Summary Credit Quality Ratios:

Nonperforming loans to total loans

Nonperforming assets to total assets

Allowance for loan losses to nonperforming loans

Allowance for loan losses to total loans

Net charge-offs to average loans outstanding

Other Selected Ratios and Data:

Total noninterest‑bearing deposits to total deposits

Interest bearing deposits to total deposits

Cost of funds

Total assets under management

Total assets under management yield

Summary Capital Ratios:

Average equity to average assets ratio

Non ‑ GAAP Ratios:

Tangible common equity (4)

Tangible common equity ratio (5)

Tangible book value per common share (6)

Return on tangible common equity (7)

Consolidated:

Tier 1 capital ratio

CET 1 capital ratio

Total risk based capital ratio

Leverage ratio

Tier 1 capital ratio

CET 1 capital ratio

Total risk based capital ratio

Leverage ratio

(1) Total loans net of loan fees, costs, premiums, and discounts do not include mortgage loans held for sale of $161.8 million, $48.3 million, $14.8 million, $22.9 million, and $8.1 million as of December 31, 2020, 2019, 2018, 2017 and 2016, respectively.

(2) We calculate book value per share as total shareholders’ equity less preferred stock (liquidation preference), at the end of the relevant period divided by the outstanding number of shares of our common stock at the end of the relevant period.

(3) Efficiency ratio is a non-GAAP financial measure.

Efficiency ratio is non-interest expense, less intangible amortization, loss on intangible assets held for sale, provision for other real estate owned ( "

) and goodwill impairment, divided by net interest income (which is pre-provision), plus non-interest income after adjustments for gains on the sale of securities and assets.

See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures."

(4) Tangible common equity is a non-GAAP financial measure.

We calculate tangible common equity as total shareholders’ equity, less preferred stock (liquidation preference), goodwill, intangibles held for sale and other intangible assets, net of accumulated amortization.

(5) Tangible common equity ratio is a non-GAAP financial measure.

We calculate the tangible common equity ratio as tangible common equity divided by total assets less goodwill and other intangible assets, net.

(6) Tangible book value per common share is a non-GAAP financial measure.

We calculate tangible book value per common share as tangible common equity divided by common shares outstanding.

(7) Return on tangible common equity is a non-GAAP financial measure.

We calculate return on tangible common equity as net income (loss) available to common shareholders (net income (loss) less dividends paid on preferred stock) divided by tangible common equity.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry.

However, we also evaluate our performance based on certain additional financial measures discussed in this Form 10-K as being non-GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our Statements of Income, Balance Sheets or Statements of Cash Flows.

Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.

The non-GAAP financial measures that we discuss in this Form 10-K should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP.

Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this Form 10-K may differ from that of other companies, reporting measures with similar names.

It is important to understand how other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this Form 10-K when comparing such non-GAAP financial measures.

Efficiency Ratio.

We calculate our efficiency ratio as non-interest expense, less intangible amortization, loss on intangible assets held for sale, provision for OREO and goodwill impairment, plus gain on sale of LA fixed income team, divided by net interest income (which is pre-provision), plus non-interest income after adjustments for gains on the sale of securities and assets.

The following table reconciles, as of the dates set forth below, non-interest expense to adjusted non-interest expense, and net interest income and non-interest income to adjusted non-interest income and adjusted total income, and presents the calculation of our efficiency ratios:

For the Year Ended December 31,

(Dollars in thousands)

Non‑interest expense

Goodwill impairment

Provision on other real estate owned

Loss on assets held for sale

Gain on sale of LA fixed income team

Adjusted non‑interest expense

Net interest income

Non‑interest income

Net gain on sale of securities

Net gain on sale of assets

Adjusted non‑interest income

Adjusted total income

Efficiency ratio

Tangible Common Equity and Tangible Common Equity Ratio.

We calculate tangible common equity as total shareholders’ equity, less preferred stock (liquidation preference), goodwill and other intangible assets, net of accumulated amortization.

We calculate tangible assets as total assets less goodwill and other intangible assets, net of accumulated amortization.

We calculate the tangible common equity ratio as tangible common equity divided by tangible assets.

The most directly comparable GAAP financial measure for tangible common equity is total shareholders’ equity and the most directly comparable GAAP financial measure for tangible assets is total assets.

We believe the use of tangible common book value has less relevance for high-fee banks and investment management firms than for most banks, as a large portion of our goodwill is associated with highly desirable fee business.

We recognize that the tangible common book value per common share measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets.

Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

The following table reconciles and presents, as of the dates set forth below, total shareholders’ equity to tangible common equity, total assets to tangible assets and presents the calculation of the tangible common equity ratio:

As of December 31,

(Dollars in thousands)

Total shareholders’ equity

Preferred stock

Goodwill and other intangibles, net

Intangibles held for sale (1)

Tangible common equity

Goodwill and other intangibles, net

Intangibles held for sale (1)

Tangible assets

Tangible common equity ratio

(1) Represents only the intangible portion of Assets held for sale.

Tangible Book Value per Common Share.

We calculate tangible book value per common share as tangible common equity divided by common shares outstanding as detailed in the table below:

As of December 31,

(Dollars in thousands, except share and per share data)

Total shareholders’ equity

Preferred stock

Goodwill and other intangibles, net

Intangibles held for sale (1)

Tangible common equity

Common shares outstanding, end of period

Tangible common book value per share

(1) Represents only the intangible portion of Assets held for sale.

Return on Tangible Common Equity.

We calculate return on tangible common equity as net income (loss) available to common shareholders (net income (loss) less dividends paid on preferred stock) divided by tangible common equity.

The most directly comparable GAAP financial measure for tangible common equity is total shareholders’ equity.

The following table reconciles net income to income (loss) available to common shareholders and presents the calculation of return on tangible common equity:

As of and for the Year Ended December 31,

(Dollars in thousands)

Net income, as reported

preferred stock dividends

Net income (loss) available to common shareholders

Tangible common equity

Return (loss) on tangible common equity

Pre-tax, Pre-Provision Income.

Pre-tax, pre-provision income is income before income tax with provision for loan loss added back.

The most directly comparable GAAP financial measure is net income.

We believe pre-tax, pre-provision income provides the readers of the financial statements information on our performance trends absent fluctuations in credit trends and loan balance changes which both drive provision, and elimination of taxes which provides readers more insight into our performance without consideration of changes in statutory tax rates.

The following table reconciles, as of the dates set forth below, net income to pre-tax, pre-provision income:

For the Year Ended December 31,

(Dollars in thousands)

Net income, as reported

income tax expense

provision for loan losses

Pre‑tax, pre‑provision income

Gross Revenue.

Gross revenue is our total income before non-interest expense, less net gains on sale of securities, less net gains on sale of assets, plus provision for loan losses.

The most directly comparable GAAP financial measure is total income before non-interest expense.

We believe gross revenue provides the readers of the financial statements information on our performance trends absent fluctuations in liquidity and credit trends.

The following table reconciles, as of the dates set forth below, total income before non-interest expense to gross revenue:

For the Year Ended of December 31,

(Dollars in thousands)

Total income before non-interest expense

net gain on sale of securities

net gain on sale of assets

provision for loan losses

Gross revenue

(1) These shares relate to the net settlement by employees related to vested, restricted stock awards and do not impact the shares available for repurchase under the 2020 Repurchase Plan.

Net settlements represent instances where employees elect to satisfy their income tax liability related to the vesting of restricted stock through the surrender of a proportionate number of the vested shares to the Company.

(2) The 2020 Repurchase Plan expired in November 2021.

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