Altabancorp™ Reports First Quarter 2021 Financial Results

Q1-2021 Highlights 

  • Total assets grew $1.04 billion, or 42%, year-over-year to $3.52 billion at March 31, 2021.
  • Total deposits grew $1.04 billion, or 49%, year-over-year to $3.16 billion at March 31, 2021.
  • Loans grew $154 million, or 9.4%, to $1.80 billion at March 31, 2021 from the prior year.
  • Cash and liquid investment securities grew $877 million, or 119%, to $1.61 billion, or 46% of total assets, at March 31, 2021.
  • Return on average assets was 1.13% and return on average equity was 10.30% for the three months ended March 31, 2021.

Altabancorp™ (Nasdaq: ALTA) (the “Company” or “Alta”), the parent company of Altabank™, reported net income of $9.4 million for the first quarter of 2021, compared with $11.1 million for the fourth quarter of 2020, and $10.8 million for the first quarter of 2020. Diluted earnings per common share were $0.50 for the first quarter of 2021, compared with $0.58 for the fourth quarter of 2020, and $0.57 for the first quarter of 2020.

Annualized return on average assets was 1.13% for the first quarter of 2021, compared with 1.34% for the fourth quarter of 2020, and 1.80% for the first quarter of 2020. Annualized return on average equity was 10.30% for the first quarter of 2021 compared with 12.06% for the fourth quarter of 2020, and 13.05% for the first quarter of 2020.

The Board of Directors declared a quarterly dividend payment of $0.15 per common share. The dividend will be payable on May 17, 2021 to shareholders of record as of May 10, 2021. The dividend payout ratio for earnings for the first quarter of 2021 was 30.0%. This continues the over 50-year trend of paying dividends by the Company.

“After an interesting and challenging year in 2020, we are pleased to start the year with solid results,” said Len Williams, President and Chief Executive Officer of Altabancorp™. “All of our branch lobbies and drive-up windows have been safely reopened, and we have started to bring our employees back from remote work to our operational facilities. In 2020, we provided substantial financial relief to our clients through participation in government programs as well as our own payment relief programs. We continue to offer additional funding through the second round of SBA PPP loans. While our payment relief programs are substantially complete, we will continue to work with our clients to provide financial solutions to assist them on their path to recovery as we all work to overcome the negative effects of the pandemic.”

Mr. Williams continued, “We continue to receive significant funds from our clients related to financial relief programs from us and government agencies, as well as normal organic deposit growth. As a result, our total deposits have grown by over $1.0 billion year-over-year, which represents a 49% increase from the same period a year earlier. Our loans held for investment increased over $154 million, or 9%, in the first quarter compared with the prior year. For the past couple of years, we have completed several initiatives to improve the overall credit quality of our loan portfolio, including lowering our overall loan concentrations both in terms of product type and asset class; tightening of our overall underwriting standards; improving our sales and credit processes; and enhancing technology in the commercial lending space. With these initiatives substantially complete, our existing and recently hired commercial lenders have the tools and processes in place to aggressively and safely grow our loan book. In addition, Utah has one of the strongest economies in the nation and we have significant liquidity that provides us with the flexibility to grow our loan portfolio. As a result, we anticipate achieving high-single digit loan growth for all of 2021.”

COVID-19 Pandemic and Utah Economy

The State of Utah has developed a COVID-19 Transmission Index (“Transmission Index”), which categorizes levels of transmission as High, Moderate, or Low. Each county receives a rating every week. The Company’s COVID-19 pandemic response plan directly correlates to the State’s Transmission Index. The Transmission Index for all the counties where our branches are located have transitioned to Moderate during the first quarter. In addition, the Governor of Utah signed a bill lifting the statewide mask mandate on April 10, 2021. The Company has reopened all of its branch lobbies. The Company has also started bringing some of its operational teams back to its facilities. However, the Company anticipates that some of its staff will remain working from home for the foreseeable future.

The Company is fortunate to operate in a region that appears to be weathering the COVID-19 pandemic well economically. The Utah economy has performed better than the nation as a whole during the pandemic with an unemployment rate of 2.9% at the end of March 2021 compared with 6.0% for the nation for the same period. Utah experienced a 0.90% year-over-year increase in total jobs at March 31, 2021 compared with a 4.4% decline in jobs for the nation for the same respective periods. The Company expects that the Utah economy will continue to perform better than most states in the U.S.

Small Business Administration Paycheck Protection Program (“SBA PPP”)

Under the first round of the SBA PPP loan program, the Company funded 333 loans, totaling $84.6 million. The Company has filed 241 forgiveness applications, (approximately 72%) with the SBA, totaling $62.2 million and has received loan forgiveness on 228 loans, totaling $56.3 million, or 67% of all SBA PPP loans funded. To date, the Company has not received a denial on any loan forgiveness application submitted to the SBA.

Under the second round of the SBA PPP loan program, the Company has funded 172 loans, totaling $29.5 million. Total SBA PPP loans declined $3.9 million, or 6.4%, to $56.7 million at March 31, 2021, compared with $60.6 million at December 31, 2020.

Loan Accommodations

The Company offered a loan deferment relief program of up to six months to clients impacted by the COVID-19 pandemic. Under rare circumstances, loans will be re-evaluated at the end of the deferral period. To qualify for a second loan deferral, the Company will require a full re-underwriting of the credit.

The Company offered temporary loan payment relief to 445 businesses and 118 individuals totaling approximately $345 million to address cash flow challenges for those impacted by the COVID-19 pandemic. To date, the deferral period had ended for 556 clients, or 99%, for loans totaling $329 million. This leaves only seven clients, or 1%, for loans totaling $16.0 million still on deferral. At March 31, 2021, there were only three clients with small balance loans totaling $0.1 million, who have not made a subsequent loan payment for 30 days or greater, after their payment deferment agreement expired. We entered into another loan payment deferment agreement with five clients, who had an initial loan payment deferment agreement. Total dollars outstanding for these clients is $10.1 million. Since these loans were performing loans that were current on their payments prior to the COVID-19 pandemic, these modifications are not considered to be troubled debt restructurings pursuant to applicable accounting and regulatory guidance.

Loan Credit Quality Trends

Non-performing loans were $7.3 million at March 31, 2021, compared with $6.6 million at March 31, 2020. Non-performing loans to total loans were 0.42% at March 31, 2021, compared with 0.41% at March 31, 2020. Non-performing assets were also $7.3 million at March 31, 2021, compared with $6.6 million at March 31, 2020. Non-performing assets to total assets were 0.21% at March 31, 2021, compared with 0.27% at March 31, 2020.

Allowance for Credit Losses

The allowance for credit losses declined by $0.3 million, or 0.6%, to $41.0 million at March 31, 2021, compared with $41.3 million the same period a year ago. The allowance for credit losses to loans held for investment was 2.28% at March 31, 2021, compared with 2.51% at March 31, 2020.

Loans

Loans held for investment grew $154 million, or 9.4%, to $1.80 billion at March 31, 2021, compared with $1.64 billion at March 31, 2020. Year-to-date average loans increased $59 million, or 3.5%, to $1.74 billion for the three months ended March 31, 2021, compared with $1.68 billion for the three months ended March 31, 2020. The Company expects that overall loan growth will be in the high-single digits during 2021 as its major lending initiatives have been substantially completed and the Company has significant liquidity to deploy.

Deposits and Liabilities

Total deposits increased $1.04 billion, or 48.9%, to $3.16 billion at March 31, 2021, compared with $2.12 billion at March 31, 2020. Non-interest bearing deposits increased, $368 million, or 49.9%, to $1.1 billion at March 31, 2021, compared with $737 million the same period a year earlier. Interest bearing deposits increased $669 million, or 48.3%, to $2.05 billion at March 31, 2021, compared with $1.39 billion for the same period a year ago. Non-interest-bearing deposits to total deposits were 35.0% as of March 31, 2021, compared with 34.7% as of March 31, 2020.

Shareholders’ Equity

Shareholders’ equity increased by $9.7 million, or 2.9%, to $350 million at March 31, 2021, compared with $340 million at March 31, 2020. The small increase resulted primarily from accumulated other comprehensive income declining to a $13.9 million loss at March 31, 2021, compared with income of $9.3 million at March 31, 2020 resulting from the impact that higher interest rates have on the fair value of investments securities held for sale. Retained earnings increased $31.4 million, or 12.9%, to $276 million at March 31, 2021 compared with $244 million for the same period a year earlier.

The Company’s leverage capital ratio was 10.06% at March 31, 2021, compared with 12.74% at March 31, 2020. The total risk-based capital ratio was 18.41% at March 31, 2021, compared with 18.62% at March 31, 2020.

Net Interest Income and Margin

For the three months ended March 31, 2021, net interest income decreased $3.6 million, or 13.31%, to $23.6 million, compared with $27.2 million for the same period a year earlier. The decrease is primarily the result of net interest margins narrowing 188 basis points to 2.91% for the same comparable periods. The narrowing of net interest margins is primarily the result of the Federal Reserve reducing benchmark rates to almost zero and an increase in the average amount of lower yielding cash and investment securities held by the Company stemming from average core deposits increasing $934 million, or 45.48%, for the same respective periods. Average interest earning assets increased $1.00 billion, or 43.84%, to $3.29 billion for the same comparable periods. The percentage of average loans to total average interest earning assets decreased to 52.90% for the three months ended March 31, 2021 compared with 73.49% for the same period a year earlier.

Yield on interest earning assets declined 207 basis points to 3.10% for the three months ended March 31, 2021 compared with 5.17% for the same period a year earlier. The decline in yield on interest earning assets is primarily the result of the average amount of cash and investment securities held by the Company increasing $942 million, or 156%, to $1.54 billion for the same comparable periods with the yield on cash and investment securities declining 169 basis points to 0.60% for the first quarter of 2021 compared with 2.29% for the same comparable periods. This decline is primarily the result of yield on investment securities declining 184 basis points to 0.67% for the same comparable periods as prepayment rates on mortgage-backed securities significantly increased in the first quarter of 2021.

The Company rebalanced its mortgage-backed securities by selling $131 million of securities with the highest prepayment rates at the end of the first quarter and recording a gain on sale of $0.2 million. This sale was offset by the purchase of $150 million of mortgage-backed securities at par value. The Company expects the yield on its investment securities portfolio to be in excess of 1.00% in the second quarter of 2021. In addition, the yield on loans declined 89 basis points to 5.32% compared with 6.21% for the same comparable periods. Average loans outstanding increased $59 million, or 3.54%, to $1.74 billion for the same comparable periods.

For the three months ended March 31, 2021, total cost of interest bearing liabilities decreased 32 basis points to 0.32%, compared with 0.64% for the same period a year earlier and the total cost of funds decreased 21 basis points to 0.21%, compared with 0.42% for the same period a year ago.

For the three months ended March 31, 2021, acquisition accounting adjustments, including the accretion of loan discounts and fair value amortization on time deposits, added four basis points to net interest margin.

Provision for Credit Losses

The Company did not record any provision for credit losses for the three months ended March 31, 2021, compared with $0.7 million for the same period a year ago. The decrease in provision for credit losses in the three months ended March 31, 2021 compared with the same period a year earlier is due primarily to a $9.3 million, or 46.30%, decline in loans individually evaluated for credit losses to $10.8 million and the related allowance for credit losses of $6.5 million offset by a $160 million, or 9.82%, increase in loans with similar risk characterisics to $1.79 billion and the related allowance for credit losses of $34.5 million. For the three months ended March 31, 2021, the Company incurred net charge-offs of $0.2 million, compared with $0.3 million for the same period a year ago.

Noninterest Income

For the three months ended March 31, 2021, noninterest income increased $1.6 million, or 43.90%, to $5.4 million, compared with $3.7 million the same period a year ago. The increase was primarily due to a $1.1 million, or 62.63%, increase in mortgage banking income to $2.8 million, compared with $1.7 million for the same period a year ago resulting from higher volume and wider margins on loans sold, which was favorably impacted by an increase in mortgage loan refinances, as overall interest rates declined. Total mortgage loans sold increased $70.4 million, or 140%, to $120.5 million for the first quarter compared with the same period a year ago.

Noninterest Expense

For the three months ended March 31, 2021, noninterest expense was $16.5 million, compared with $16.2 million for the same period a year earlier. For the three months ended March 31, 2021, the Company’s efficiency ratio was 57.50% compared with 52.20% for the same period a year ago.

The increase in noninterest expense for the three months ended March 31, 2021 was primarily the result of higher data processing expenses due to technology investment in loan origination software for the mortgage banking division; technology investments made in the commercial banking division, including costs for its cloud-based, commercial loan origination application (nCino), including automated processes for smaller ticket commercial loans (titled Altaexpress™), the implementation of a Salesforce CRM solution, and for a new cloud-based, commercial client treasury management solution; and costs a new cloud-based, construction budget, draw and inspection management solution for both commercial and consumer clients. The Company expects to continue to make significant investments in new technologies to enhance the client experience and empower clients to transact more business on the Company’s mobile platform; to lower the overall costs of its operating platform; and to become more scalable.

The increase in noninterest expense was also the result of higher salaries and employee benefits resulting from annual merit increases and higher incentive payments, particularly in the mortgage banking division. In addition, the Company did not incur FDIC premium payments for the first quarter of 2020 due to the application of the small bank assessment credit from the FDIC. Lastly, the Company incurred $0.2 million in one-time additional legal costs during the first quarter of 2021.

Income Tax Provision

For the three months ended March 31, 2021, income tax expense was $3.0 million, compared with $3.4 million for the same period a year earlier. For the three months ended March 31, 2021, the effective tax rate was 24.10%, compared with 23.87% for the same period a year ago.

Conference Call and Webcast

Management will host a conference call on Thursday, April 29, 2021 at 10:00 a.m. MDT (12:00 p.m. EDT) to discuss the Company’s financial performance.

Investment professionals who wish to ask questions regarding the Company’s financial performance will need to register to participate in the call by Wednesday, April 28, 2021 by visiting http://www.directeventreg.com/registration/event/9678163. Upon registering, you will receive a confirmation with dial-in details.

Other interested parties may listen to the call via a live webcast. Additional information and a link to the webcast can be found on the Company’s website at www.altabancorp.com.

An audio archive and written transcript of the conference call will be available on the Company’s investor website within 24 hours after the end of the call. Interested parties may listen to the audio archive and read the written transcript for one month after the call. Forward-looking statements may be made and other material information may be discussed on this conference call.  

Forward-Looking Statements

This press release may contain certain forward-looking statements that are based on management's current expectations regarding the Company’s financial performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Forward-looking statements in this press release include, without limitation, statements regarding the Company’s expectations for its financial performance, the Company’s ability to respond to negative effects of the COVID-19 pandemic, the Company’s ability to grow its loan portfolio, expected trends in asset quality, the Company’s ability to grow and the effects of expanding its mortgage banking operations, and the Company’s ability to improve its operating leverage in response to low overall interest rates. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, the duration and impact of the COVID-19 pandemic, natural disasters, general economic conditions, economic uncertainty in the United States, changes in interest rates, deposit flows, real estate values, costs or effects of acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting the Company's operations, pricing, products and services. These and other important factors are detailed in the Company’s Form 10-K, Form 10-Qs, and various other securities law filings made periodically by the Company, copies of which are available from the Company’s website. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

About Altabancorp™

Altabancorp™ (Nasdaq: ALTA) is the bank holding company for Altabank™, a full-service bank, providing loans, deposit and cash management services to businesses and individuals through 25 branch locations from Preston, Idaho to St. George, Utah. Altabank™ is the largest community bank in Utah with total assets of $3.5 billion. Our clients have direct access to bankers and decision-makers, who work with clients to understand their specific needs and offer customized financial solutions. Altabank™ has been serving communities in Utah and southern Idaho for more than 100 years. More information about Altabank™ is available at www.altabank.com. More information about Altabancorp™ is available at www.altabancorp.com.

ALTABANCORP™

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Three Months Ended

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

 

March 31,

 

December 31,

 

March 31,

 

2021

 

2020

 

2020

Interest income

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

22,814

 

$

23,095

 

$

25,925

Interest and dividends on investments

 

 

2,330

 

 

3,416

 

 

3,459

Total interest income

 

 

25,144

 

 

26,511

 

 

29,384

Interest expense

 

 

1,546

 

 

1,599

 

 

2,163

Net interest income

 

 

23,598

 

 

24,912

 

 

27,221

Provision for credit losses

 

 

-

 

 

-

 

 

650

Net interest income after provision for credit losses

 

 

23,598

 

 

24,912

 

 

26,571

Non-interest income

 

 

 

 

 

 

 

 

 

Mortgage banking

 

 

2,781

 

 

4,129

 

 

1,710

Card processing

 

 

1,071

 

 

995

 

 

707

Service charges on deposit accounts

 

 

692

 

 

855

 

 

780

Net gain on sale of investment securities

 

 

206

 

 

-

 

 

-

Other

 

 

632

 

 

475

 

 

543

Total non-interest income

 

 

5,382

 

 

6,454

 

 

3,740

Non-interest expense

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

11,087

 

 

10,226

 

 

10,844

Occupancy, equipment and depreciation

 

 

1,195

 

 

1,321

 

 

1,539

Data processing

 

 

1,849

 

 

1,895

 

 

1,136

Marketing and advertising

 

 

306

 

 

291

 

 

432

FDIC premiums

 

 

226

 

 

221

 

 

-

Other

 

 

1,882

 

 

2,889

 

 

2,210

Total non-interest expense

 

 

16,545

 

 

16,843

 

 

16,161

Income before income tax expense

 

 

12,435

 

 

14,523

 

 

14,150

Income tax expense

 

 

2,997

 

 

3,472

 

 

3,377

Net income

 

$

9,438

 

$

11,051

 

$

10,773

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.50

 

$

0.59

 

$

0.57

Diluted

 

$

0.50

 

$

0.58

 

$

0.57

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

 

18,864,497

 

 

18,814,970

 

 

18,884,857

Diluted

 

 

19,019,682

 

 

18,958,163

 

 

19,038,127

ALTABANCORP™

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

(Dollars in thousands, except share amounts)

 

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2021

 

2020

 

2020

 

2020

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

33,254

 

 

$

39,312

 

 

$

44,137

 

 

$

36,203

 

Interest-bearing deposits

 

 

77,378

 

 

 

197,769

 

 

 

180,773

 

 

 

120,176

 

Federal funds sold

 

 

910

 

 

 

2,793

 

 

 

74

 

 

 

1,248

 

Total cash and cash equivalents

 

 

111,542

 

 

 

239,874

 

 

 

224,984

 

 

 

157,627

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale, at fair value

 

 

1,500,491

 

 

 

1,320,393

 

 

 

1,123,051

 

 

 

577,000

 

Non-marketable equity securities

 

 

4,042

 

 

 

2,890

 

 

 

2,890

 

 

 

2,890

 

Loans held for sale

 

 

8,293

 

 

 

14,152

 

 

 

31,872

 

 

 

21,572

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Loans held for investment

 

 

1,796,961

 

 

 

1,695,496

 

 

 

1,697,135

 

 

 

1,642,516

 

Allowance for credit losses

 

 

(41,013

)

 

 

(41,236

)

 

 

(41,495

)

 

 

(41,253

)

Total loans held for investment, net

 

 

1,755,948

 

 

 

1,654,260

 

 

 

1,655,640

 

 

 

1,601,263

 

Premises and equipment, net

 

 

35,962

 

 

 

36,460

 

 

 

37,095

 

 

 

38,376

 

Goodwill

 

 

25,673

 

 

 

25,673

 

 

 

25,673

 

 

 

25,673

 

Bank-owned life insurance

 

 

42,978

 

 

 

42,720

 

 

 

42,312

 

 

 

27,184

 

Deferred income tax assets

 

 

16,814

 

 

 

7,389

 

 

 

7,842

 

 

 

8,003

 

Accrued interest receivable

 

 

10,454

 

 

 

11,336

 

 

 

14,117

 

 

 

8,464

 

Other intangibles

 

 

4,389

 

 

 

4,451

 

 

 

4,445

 

 

 

4,477

 

Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

Other assets

 

 

5,212

 

 

 

6,630

 

 

 

5,440

 

 

 

4,483

 

Total assets

 

$

3,521,798

 

 

$

3,366,228

 

 

$

3,175,361

 

 

$

2,477,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

1,104,995

 

 

$

1,039,844

 

 

$

1,037,970

 

 

$

737,001

 

Interest-bearing deposits

 

 

2,053,991

 

 

 

1,876,464

 

 

 

1,678,809

 

 

 

1,385,017

 

Total deposits

 

 

3,158,986

 

 

 

2,916,308

 

 

 

2,716,779

 

 

 

2,122,018

 

Short-term borrowings

 

 

-

 

 

 

64,554

 

 

 

83,490

 

 

 

-

 

Accrued interest payable

 

 

339

 

 

 

616

 

 

 

487

 

 

 

503

 

Other liabilities

 

 

12,602

 

 

 

13,612

 

 

 

14,315

 

 

 

14,354

 

Total liabilities

 

 

3,171,927

 

 

 

2,995,090

 

 

 

2,815,071

 

 

 

2,136,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shares, $0.01 par value

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Common shares, $0.01 par value

 

 

189

 

 

 

188

 

 

 

188

 

 

 

188

 

Additional paid-in capital

 

 

87,843

 

 

 

87,574

 

 

 

87,116

 

 

 

86,318

 

Retained earnings

 

 

275,765

 

 

 

269,157

 

 

 

260,929

 

 

 

244,325

 

Accumulated other comprehensive income/(loss)

 

 

(13,926

)

 

 

14,219

 

 

 

12,057

 

 

 

9,306

 

Total shareholders’ equity

 

 

349,871

 

 

 

371,138

 

 

 

360,290

 

 

 

340,137

 

Total liabilities and shareholders’ equity

 

$

3,521,798

 

 

$

3,366,228

 

 

$

3,175,361

 

 

$

2,477,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

18,873,921

 

 

 

18,828,522

 

 

 

18,802,635

 

 

 

18,787,810

 

ALTABANCORP™

SUMMARY FINANCIAL INFORMATION

 

 

 

(Dollars in thousands, except share amounts)

 

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2021

 

2020

 

2020

 

2020

Selected Balance Sheet Information:

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

18.54

 

 

$

19.71

 

 

$

19.16

 

 

$

18.10

 

Tangible book value per share

 

$

16.94

 

 

$

18.21

 

 

$

17.66

 

 

$

16.59

 

Non-performing loans to total loans

 

 

0.42

%

 

 

0.54

%

 

 

0.41

%

 

 

0.41

%

Non-performing assets to total assets

 

 

0.21

%

 

 

0.27

%

 

 

0.22

%

 

 

0.27

%

Allowance for credit losses to loans held for investment

 

 

2.28

%

 

 

2.43

%

 

 

2.45

%

 

 

2.51

%

Loans to deposits

 

 

55.85

%

 

 

57.21

%

 

 

62.11

%

 

 

76.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data:

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans

 

$

7,332

 

 

$

9,064

 

 

$

6,944

 

 

$

6,590

 

Non-performing assets

 

$

7,332

 

 

$

9,064

 

 

$

6,944

 

 

$

6,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage capital (1)

 

 

10.06

%

 

 

10.47

%

 

 

10.87

%

 

 

12.74

%

Total risk-based capital (1)

 

 

18.41

%

 

 

19.17

%

 

 

19.13

%

 

 

18.62

%

Average equity to average assets

 

 

10.94

%

 

 

11.15

%

 

 

11.68

%

 

 

13.82

%

Tangible common equity to tangible assets (2)

 

 

9.16

%

 

 

10.27

%

 

 

10.55

%

 

 

12.73

%

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

 

 

2021

 

2020

 

2020

Selected Financial Information:

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.50

 

 

$

0.59

 

 

$

0.57

 

Diluted earnings per share

 

$

0.50

 

 

$

0.58

 

 

$

0.57

 

Net interest margin (3)

 

 

2.91

%

 

 

3.18

%

 

 

4.79

%

Efficiency ratio

 

 

57.50

%

 

 

53.70

%

 

 

52.20

%

Non-interest income to average assets

 

 

0.64

%

 

 

0.79

%

 

 

0.63

%

Non-interest expense to average assets

 

 

1.98

%

 

 

2.05

%

 

 

2.71

%

Annualized return on average assets

 

 

1.13

%

 

 

1.34

%

 

 

1.80

%

Annualized return on average equity

 

 

10.30

%

 

 

12.06

%

 

 

13.05

%

Net charge-offs

 

$

223

 

 

$

259

 

 

$

289

 

Annualized net charge-offs to average loans

 

 

0.05

%

 

 

0.06

%

 

 

0.07

%

_______________

(1)

Tier 1 leverage capital and Total risk-based capital as of March 31, 2021 are estimates.

(2)

Represents the sum of total shareholders’ equity less intangible assets all divided by the sum of total assets less intangible assets. Intangible assets were $30.1 million, $28.2 million, $28.3 million, and $28.6 million at March 31, 2021, December 31, 2020, September 30, 2020, and March 31, 2020, respectively.

(3)

Net interest margin is defined as annualized net interest income divided by average earning assets.

ALTABANCORP™

SELECTED AVERAGE BALANCES AND YIELDS

 

 

 

Three Months Ended

 

 

March 31, 2021

 

March 31, 2020

(Dollars in thousands, except footnotes)

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Average

Yield/

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits in other banks and federal funds sold

 

$

162,499

 

 

$

27

 

0.07%

 

$

103,099

 

 

$

316

 

1.23%

Securities: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

 

1,347,284

 

 

 

2,104

 

0.63%

 

 

449,195

 

 

 

2,868

 

2.57%

Non-taxable securities (2)

 

 

34,692

 

 

 

177

 

2.07%

 

 

50,516

 

 

 

253

 

2.01%

Total securities

 

 

1,381,976

 

 

 

2,281

 

0.67%

 

 

499,711

 

 

 

3,121

 

2.51%

Loans (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate term

 

 

1,024,491

 

 

 

12,760

 

5.05%

 

 

935,753

 

 

 

13,467

 

5.79%

Construction and land development

 

 

247,771

 

 

 

3,820

 

6.25%

 

 

277,720

 

 

 

5,024

 

7.28%

Commercial and industrial

 

 

239,244

 

 

 

3,854

 

6.53%

 

 

279,278

 

 

 

4,906

 

7.07%

Residential and home equity

 

 

217,335

 

 

 

2,206

 

4.12%

 

 

170,767

 

 

 

2,286

 

5.38%

Consumer and other

 

 

9,162

 

 

 

174

 

7.69%

 

 

15,110

 

 

 

242

 

6.43%

Total loans

 

 

1,738,003

 

 

 

22,814

 

5.32%

 

 

1,678,628

 

 

 

25,925

 

6.21%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-marketable equity securities

 

 

3,015

 

 

 

22

 

2.98%

 

 

2,638

 

 

 

22

 

3.33%

Total interest-earning assets

 

 

3,285,493

 

 

 

25,144

 

3.10%

 

 

2,284,076

 

 

 

29,384

 

5.17%

Allowance for credit losses

 

 

(41,406

)

 

 

 

 

 

 

 

(42,136

)

 

 

 

 

 

Non-interest earning assets

 

 

151,269

 

 

 

 

 

 

 

 

159,578

 

 

 

 

 

 

Total average assets

 

$

3,395,356

 

 

 

 

 

 

 

$

2,401,518

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand and savings accounts

 

$

1,130,353

 

 

 

569

 

0.20%

 

$

832,083

 

 

 

779

 

0.38%

Money market accounts

 

 

668,091

 

 

 

524

 

0.32%

 

 

352,120

 

 

 

811

 

0.93%

Certificates of deposit

 

 

161,018

 

 

 

427

 

1.08%

 

 

169,668

 

 

 

573

 

1.36%

Total interest-bearing deposits

 

 

1,959,462

 

 

 

1,520

 

0.31%

 

 

1,353,871

 

 

 

2,163

 

0.64%

Short-term borrowings

 

 

25,931

 

 

 

26

 

0.40%

 

 

-

 

 

 

-

 

0.00%

Total interest-bearing liabilities

 

 

1,985,393

 

 

 

1,546

 

0.32%

 

 

1,353,871

 

 

 

2,163

 

0.64%

Non-interest bearing deposits

 

 

1,028,130

 

 

 

 

 

 

 

 

699,780

 

 

 

 

 

 

Total funding

 

 

3,013,523

 

 

 

1,546

 

0.21%

 

 

2,053,651

 

 

 

2,163

 

0.42%

Other non-interest bearing liabilities

 

 

10,387

 

 

 

 

 

 

 

 

15,878

 

 

 

 

 

 

Shareholders’ equity

 

 

371,446

 

 

 

 

 

 

 

 

331,989

 

 

 

 

 

 

Total average liabilities and shareholders’ equity

 

$

3,395,356

 

 

 

 

 

 

 

$

2,401,518

 

 

 

 

 

 

Net interest income

 

 

 

 

$

23,598

 

 

 

 

 

 

$

27,221

 

 

Interest rate spread

 

 

 

 

 

 

 

2.79%

 

 

 

 

 

 

 

4.53%

Net interest margin

 

 

 

 

 

 

 

2.91%

 

 

 

 

 

 

 

4.79%

_______________

(1)

Excludes average unrealized losses of $12.9 million and unrealized gains of $3.1 million for the three months ended March 31, 2021 and 2020, respectively.

(2)

Does not include tax effect on tax-exempt investment security income of $59,000 and $84,000 for the three months ended March 31, 2021 and 2020, respectively.

(3)

Loan interest income includes loan fees of $2.3 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively.

 

Contacts

Investor Relations Contact

Mark K. Olson

Executive Vice President and Chief Financial Officer

Altabancorp™

1 East Main Street

American Fork UT 84003

investorrelations@altabancorp.com

Phone: 801-642-3998

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