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CST: 19/08/2019 07:27:58   

People’s Utah Bancorp Reports Second Quarter 2019 Results; Announces Increase in Quarterly Dividend Payment

24 Days ago

Second Quarter 2019 Highlights

  • Achieved return on average assets of 1.96% for the second quarter
  • Realized return on average equity of 14.33% for the second quarter
  • Earnings per diluted share increased 5.5% to $0.58 year-over-year
  • Net interest margin narrowed 2 bps to 5.24% for the second quarter
  • Total deposits grew $200 million, or 11.2%, to $1.98 billion year-over-year
  • Total loans held for investment declined 1.1% to $1.67 billion year-over-year
  • Total assets exceed $2.3 billion at June 30, 2019

AMERICAN FORK, Utah, July 25, 2019 (GLOBE NEWSWIRE) -- People’s Utah Bancorp (the “Company” or “PUB”) (Nasdaq: PUB) reported net income of $11.0 million for the second quarter of 2019 compared with $10.5 million for the first quarter of 2019, and $10.5 million for the second quarter of 2018. Diluted earnings per common share were $0.58 for the second quarter of 2019 compared with $0.55 for the first quarter of 2019, and $0.55 for the second quarter of 2018. 

Return on average assets was 1.96% for the second quarter of 2019 compared with 1.95% for first quarter of 2019, and 1.93% for the second quarter of 2018. Return on average equity was 14.33% for the second quarter of 2019 compared with 14.38% for the first quarter of 2019, and 15.60% for the second quarter of 2018. 

The Board of Directors declared an increase in the quarterly dividend payment to $0.13 per common share. The dividend will be payable on August 12, 2019 to shareholders of record as of August 5, 2019. The dividend payout ratio for earnings for the second quarter of 2019 was 22.3%. This continues the over 50-year trend of paying dividends by the Company.

“People’s Utah Bancorp achieved another strong quarter with a return on average equity of 14.3% as we continue to position, strengthen, and fortify our balance sheet,” said Len Williams, President and Chief Executive Officer. “We have increased our average equity to average assets from 12.4% a year ago to 13.7% for the second quarter of 2019, while increasing our allowance for loan losses from 1.3% a year ago to 1.7% at the end of the second quarter.”

Mr. Williams continued, “Our total deposits grew $200 million, or 11.2% year-over-year, as our retail branches and commercial treasury management team have focused on raising commercial deposits from existing commercial clients, as well as the acquisition of new client relationships. Our increased selectivity and concentration management has slowed our loan growth. However, we believe this focus will ensure greater strength and safety, given our expectations for a slower economy going forward. The economic outlook for the Utah market continues to be strong relative to the U.S. economy overall, which provides us further opportunities to grow our organization. We continue to actively evaluate potential acquisition opportunities throughout the Intermountain West.”

Net Interest Income and Margin

For the second quarter of 2019, net interest income grew 2.8%, or $0.7 million, to $27.7 million compared with $27.0 million for the same period a year earlier. The increase is primarily the result of average interest earning assets growing 3.1%, or $64.8 million, and yields on interest earning assets increasing 8 basis points to 5.68% for the same comparable period. Higher yields on interest earning assets was primarily the result of yields on loans increasing 23 basis points to 6.57% for the same comparable period, offset by a 1.5%, or $25.8 million decline in average loan balances and by the percentage of loans to total interest earning assets decreasing to 79.5% for the second quarter of 2019 compared with 83.2% for the second quarter of 2018. 

For the second quarter of 2019, total cost of interest bearing liabilities increased 17 basis points to 0.74% compared with the same period a year ago and is the result of the cost of interest bearing deposits increasing 34 basis points to 0.74% for the same comparable periods. The Company had no short-term borrowing for the second quarter of 2019 compared with $128.3 million of short-term borrowings for the second quarter of 2018.

Acquisition accounting adjustments, including the accretion of loan discounts and amortization of certificate of deposits premium, added 7 basis points to the net interest margin for the second quarter of 2019.

Provision for Loan Losses

For the second quarter of 2019, provision for loan losses was $2.2 million compared with $1.5 million for the same period a year earlier. The increase in provision for loan losses in the second quarter of 2019 is due primarily to $3.3 million in specific reserves, of which $2.2 million were reserved for the unguaranteed portion of four Government-guaranteed loans acquired in the Town & Country acquisition. For the second quarter of 2019, the Company incurred net charge-offs of $34 thousand compared with net recoveries of $0.1 million for the same period a year ago.

Noninterest Income

For the second quarter of 2019, noninterest income was $3.6 million compared with $4.1 million the same period a year ago. The decrease was primarily due to a one-time gain on sale of securities of $0.3 million in the second quarter of 2018 and $0.2 million loss on the disposal of assets in the second quarter of 2019.

Noninterest Expense

For the second quarter of 2019, noninterest expense was $14.7 million compared with $15.8 million for the same period a year earlier and is primarily the result of $0.7 million in lower salaries and employee benefits, $0.3 million in lower other non-interest expense primarily related to lower legal expenses, $0.2 million in lower FDIC premiums, and $0.1 million in lower marketing costs. For the second quarter of 2019, the Company’s efficiency ratio was 46.93% compared with 50.97% for the same period a year ago. 

“Our lower marketing and advertising costs are directly the result of us deciding to simplify our branding strategy to a single, unified name for our Bank, a new logo, and a more contemporary look. We expect to roll out our new single brand strategy around the end of the year and anticipate higher marketing and advertising costs over the next several quarters,” said Mr. Williams.

Income Tax Provision

For the second quarter of 2019, income tax expense was $3.5 million compared with $3.3 million for the same period a year earlier. For the second quarter of 2019, the effective tax rate was 24.1% compared with 23.9% for the same period a year ago.

Loans and Credit Quality

Loans held for investment decreased $6.3 million, or 0.4%, to $1.67 billion at June 30, 2019 compared with $1.68 billion at December 31, 2018, and decreased $19.4 million, or 1.1%. compared with $1.69 billion at June 30, 2018. The decline is primarily the result of declines in the acquisition, development, and construction loan portfolio of $17.1 million, or 5.26% from December 31, 2018 to June 30, 2019 and $66.4 million, or 17.76%, from a year ago, as the Company has managed loan concentration levels and become more selective with the type and size of construction projects that it is willing to finance, given its perspective on a slowing economy. 

For the six months ended June 30, 2019, average loans declined $6.8 million, or 0.4%, to $1.68 billion compared with $1.69 billion for the same period a year earlier.

Non-performing loans were $5.1 million at June 30, 2019 compared with $4.5 million at December 31, 2018, and $8.6 million at June 30, 2018. Non-performing loans to total loans were 0.31% at June 30, 2019 compared with 0.27% at December 31, 2018, and 0.51% at June 30, 2018. Non-performing assets were $5.1 million at June 30, 2019 compared with $4.5 million at December 31, 2018, and $8.6 million at June 30, 2018. Non-performing assets to total assets were 0.22% at June 30, 2019 compared with 0.21% at December 31, 2018, and 0.40% at June 30, 2018. The allowance for loan losses increased $5.7 million, or 25.7%, to $28.0 million at June 30, 2019 compared with the same period a year ago. The allowance for loan losses to loans held for investment was 1.68% at June 30, 2019 compared with 1.50% at December 31, 2018, and 1.32% at June 30, 2018. In accordance with acquisition accounting, loans acquired from the Utah branches of Banner Bank and from Town & Country Bank were recorded at their estimated fair value, which resulted in a net discount to the loans’ contractual amounts, a portion of which reflects a discount for possible credit losses. Credit discounts are included in the determination of fair value, and as a result, no allowance for loan and lease losses is recorded for acquired loans at the acquisition date. The discount recorded on the acquired loans is not reflected in the allowance for loan losses or related allowance coverage ratios. Remaining credit discounts on acquired loans was $6.7 million at June 30, 2019.

Deposits and Liabilities

Total deposits increased $105 million, or 5.6%, to $1.98 billion at June 30, 2019 compared with $1.88 billion at December 31, 2018, and increased $200 million, or 11.2%, compared with $1.78 billion at June 30, 2018. The increase in total deposits was primarily the result of organic commercial deposit growth. Non-interest bearing deposits were 35.7% of total deposits as of June 30, 2019 compared with 34.2% as of December 31, 2018, and 36.3% as of June 30, 2018.

Shareholders’ Equity

Shareholders’ equity increased by $22.6 million to $313 million at June 30, 2019 compared with $290 million at December 31, 2018, and increased by $41.2 million compared with $272 million at June 30, 2018. The increase resulted primarily from net income earned during the intervening periods, net of cash dividends paid to shareholders; and a reduction in accumulated other comprehensive losses resulting from an improvement in the fair value of investment securities as overall interest rates declined.

Conference Call and Webcast

Management will host a conference call on Friday, July 26, 2019 at 10:00 a.m. MDT (12:00 p.m. EDT) to discuss the second quarter 2019 results. Interested investors may listen to the call live at www.peoplesutah.com. Investment professionals are invited to dial 888-317-6003 (international calls 412-317-6061) and the participant entry number is 7584075. Please dial in 10-15 minutes early so the name and company information can be collected prior to the start of the conference.

If you are unable to participate during the live webcast, the call will be archived on our website www.peoplesutah.com, or at the same URL above for one month after the call. Forward-looking and other material information may be discussed on this conference call.

Forward-Looking Statements

Statements in this release that are based on information other than historical data or that express the Company’s expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date.

Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: (i) market and economic conditions; (ii) capital sufficiency; (iii) operational, liquidity, interest rate and credit risks; (iv) deterioration of asset quality; (v) achieving loan and deposit growth; (vi) increased competition; (vii) adequacy of reserves; (viii) investments in new branches and new business opportunities; and (ix) changes in the regulatory or legal environment; as well as other factors discussed in the section titled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive. The Company does not intend, or undertake any obligation to publicly update these forward-looking statements.

About People’s Utah Bancorp

People’s Utah Bancorp is the holding company for People’s Intermountain Bank. People’s Intermountain Bank is a full-service community bank providing loans, deposit and cash management services to individuals and businesses. The Company offers its clients direct access to decision makers, unparalleled responsiveness, seasoned relationship managers, and technology solutions. People’s Intermountain Bank has 26 locations in three banking divisions, Bank of American Fork, Lewiston State Bank, and People’s Town & Country Bank; and a mortgage division, People’s Intermountain Bank Mortgage. The Company has been serving communities in Utah and southern Idaho for more than 100 years. More information about PUB is available at www.peoplesutah.com.

Investor Relations Contact:

Mark K. Olson
Executive Vice President and Chief Financial Officer
1 East Main Street
American Fork UT 84003
investorrelations@peoplesutah.com
Phone: 801-642-3998

 
PEOPLE’S UTAH BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 
    Three Months Ended     Six Months Ended  
(Dollars in thousands, except share   June 30,     March 31,     June 30,     June 30,     June 30,  
 and per share data)   2019     2019     2018     2019     2018  
Interest income                                        
Interest and fees on loans   $ 27,628     $ 26,980     $ 27,073     $ 54,608     $ 52,856  
Interest and dividends on investments     2,422       2,172       1,683       4,594       3,339  
Total interest income     30,050       29,152       28,756       59,202       56,195  
Interest expense     2,330       2,245       1,778       4,575       3,273  
Net interest income     27,720       26,907       26,978       54,627       52,922  
Provision for loan losses     2,150       1,550       1,475       3,700       3,525  
Net interest income after provision for loan losses     25,570       25,357       25,503       50,927       49,397  
Non-interest income                                        
Mortgage banking     1,621       1,417       1,505       3,038       3,143  
Card processing     814       615       799       1,429       1,522  
Service charges on deposit accounts     705       657       704       1,362       1,377  
Net gain on sale of investment securities     -       -       333       -       335  
Other     458       648       725       1,106       1,407  
Total non-interest income     3,598       3,337       4,066       6,935       7,784  
Non-interest expense                                        
Salaries and employee benefits     9,526       9,886       10,196       19,412       20,619  
Occupancy, equipment and depreciation     1,558       1,456       1,411       3,014       2,954  
Data processing     1,018       964       1,063       1,982       1,933  
Marketing and advertising     226       116       321       342       767  
FDIC premiums     148       90       299       238       628  
Acquisition-related costs     -       -       1       -       350  
Other     2,223       2,404       2,532       4,627       4,620  
Total non-interest expense     14,699       14,916       15,823       29,615       31,871  
Income before income tax expense     14,469       13,778       13,746       28,247       25,310  
Income tax expense     3,480       3,273       3,279       6,753       5,839  
Net income   $ 10,989     $ 10,505     $ 10,467     $ 21,494     $ 19,471  
                                         
Earnings per common share:                                        
Basic   $ 0.58     $ 0.56     $ 0.56     $ 1.14     $ 1.04  
Diluted   $ 0.58     $ 0.55     $ 0.55     $ 1.13     $ 1.03  
                                         
Weighted average common shares outstanding:                                        
Basic     18,805,760       18,781,210       18,679,908       18,793,553       18,639,397  
Diluted     19,007,297       18,989,565       18,989,176       18,998,480       18,963,549  


PEOPLE’S UTAH BANCORP 
UNAUDITED CONSOLIDATED BALANCE SHEETS
 
    June 30,     March 31,     December 31,     June 30,  
(Dollars in thousands, except share data)   2019     2019     2018     2018  
ASSETS                                
Cash and due from banks   $ 38,121     $ 36,659     $ 39,471     $ 33,484  
Interest bearing deposits     64,064       106,467       7,456       17,930  
Federal funds sold     90,281       896       1,620       908  
Total cash and cash equivalents     192,466       144,022       48,547       52,322  
Investment securities:                                
Available for sale, at fair value     334,762       347,123       280,964       236,699  
Held to maturity, at historical cost     -       -       65,462       67,922  
Total investment securities     334,762       347,123       346,426       304,621  
Non-marketable equity securities     2,623       2,623       2,551       6,151  
Loans held for sale     18,446       7,184       10,267       11,058  
Loans:                                
Loans held for investment     1,672,584       1,676,889       1,678,902       1,691,959  
Allowance for loan losses     (28,039 )     (25,923 )     (25,245 )     (22,308 )
Total loans held for investment, net     1,644,545       1,650,966       1,653,657       1,669,651  
Premises and equipment, net     37,925       37,836       36,532       29,335  
Goodwill     25,673       25,673       25,673       25,673  
Bank-owned life insurance     26,734       26,581       26,433       26,120  
Deferred income tax assets     9,178       10,354       11,514       10,764  
Accrued interest receivable     8,642       8,593       8,282       7,658  
Other intangibles     3,191       3,301       3,412       3,633  
Other real estate owned     -       -       -       -  
Other assets     7,680       6,551       11,000       14,784  
Total assets   $ 2,311,865     $ 2,270,807     $ 2,184,294     $ 2,161,770  
                                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                                
Deposits:                                
Non-interest bearing deposits   $ 707,135     $ 655,866     $ 642,594     $ 646,574  
Interest bearing deposits     1,274,771       1,295,459       1,234,461       1,135,366  
Total deposits     1,981,906       1,951,325       1,877,055       1,781,940  
Short-term borrowings     -       -       -       90,000  
Accrued interest payable     546       521       483       369  
Other liabilities     16,614       17,634       16,594       17,862  
Total liabilities     1,999,066       1,969,480       1,894,132       1,890,171  
                                 
Shareholders’ equity:                                
Preferred shares, $0.01 par value     -       -       -       -  
Common shares, $0.01 par value     188       188       187       187  
Additional paid-in capital     87,275       86,892       86,308       85,620  
Retained earnings     224,950       216,216       207,779       190,735  
Accumulated other comprehensive income/(loss)     386       (1,969 )     (4,112 )     (4,943 )
Total shareholders’ equity     312,799       301,327       290,162       271,599  
Total liabilities and shareholders’ equity   $ 2,311,865     $ 2,270,807     $ 2,184,294     $ 2,161,770  
                                 
Common shares outstanding     18,819,332       18,797,280       18,728,823       18,683,883  


PEOPLE’S UTAH BANCORP
SUMMARY FINANCIAL INFORMATION
 
    June 30,     March 31,     December 31,     June 30,  
(Dollars in thousands, except share data)   2019     2019     2018     2018  
Selected Balance Sheet Information:                                
Book value per share   $ 16.62     $ 16.03     $ 15.49     $ 14.54  
Tangible book value per share   $ 15.09     $ 14.49     $ 13.94     $ 12.97  
Non-performing loans to total loans     0.31 %     0.28 %     0.27 %     0.51 %
Non-performing assets to total assets     0.22 %     0.21 %     0.21 %     0.40 %
Allowance for loan losses to loans held for investment     1.68 %     1.55 %     1.50 %     1.32 %
Loans to Deposits     83.91 %     84.98 %     88.65 %     94.32 %
                                 
Asset Quality Data:                                
Non-performing loans   $ 5,104     $ 4,706     $ 4,499     $ 8,649  
Non-performing assets   $ 5,104     $ 4,706     $ 4,499     $ 8,649  
                                 
Capital Ratios:                                
Tier 1 leverage capital (1)     12.78 %     12.70 %     12.27 %     11.48 %
Total risk-based capital (1)     17.24 %     16.86 %     16.36 %     15.22 %
Average equity to average assets     13.69 %     13.55 %     13.04 %     12.36 %
Tangible common equity to tangible assets (3)     12.44 %     12.15 %     12.11 %     11.36 %


    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
    2019     2019     2018     2019     2018  
Selected Financial Information:                                        
Basic earnings per share   $ 0.58     $ 0.56     $ 0.56     $ 1.14     $ 1.04  
Diluted earnings per share   $ 0.58     $ 0.55     $ 0.55     $ 1.13     $ 1.03  
Net interest margin (2)     5.24 %     5.29 %     5.26 %     5.26 %     5.24 %
Efficiency ratio     46.93 %     49.32 %     50.97 %     48.11 %     52.50 %
Non-interest income to average assets     0.64 %     0.62 %     0.75 %     0.63 %     0.73 %
Non-interest expense to average assets     2.63 %     2.77 %     2.91 %     2.69 %     2.97 %
Return on average assets     1.96 %     1.95 %     1.93 %     1.96 %     1.82 %
Return on average equity     14.33 %     14.38 %     15.60 %     14.35 %     14.79 %
Net charge-offs / (recoveries)   $ 34     $ 872     $ (102 )   $ 906     $ (480 )
Annualized net charge-offs / (recoveries) to average loans     0.01 %     0.21 %     -0.02 %     0.11 %     -0.06 %
________________________________
(1) Tier 1 leverage capital and Total risk-based capital as of June 30, 2019 are estimates.
(2) Net interest margin is defined as net interest income divided by average earning assets.
(3) Represents the sum of total shareholders’ equity less intangible assets all divided by the sum of total assets less intangible assets. Intangible assets were $28,864,000, 28,974,000, $29,085,000, and $29,306,000 at June 30, 2019, March 31, 2019, December 31, 2018, and June 30, 2018, respectively.


PEOPLE’S UTAH BANCORP
SELECTED AVERAGE BALANCES AND YIELDS
 
    Three Months Ended  
    June 30, 2019     June 30, 2018  
            Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/  
(Dollars in thousands, except footnotes)   Balance     Expense     Rate     Balance     Expense     Rate  
ASSETS                                                
Interest earning deposits in other banks and federal funds sold   $ 89,461     $ 511       2.29 %   $ 15,533     $ 64       1.65 %
Securities: (1)                                                
Taxable securities     276,993       1,572       2.28 %     241,724       1,192       1.98 %
Non-taxable securities (2)     66,425       312       1.88 %     79,949       369       1.85 %
Total securities     343,418       1,884       2.20 %     321,673       1,561       1.95 %
Loans (3)                                                
Real estate term     902,214       13,447       5.98 %     903,637       12,860       5.71 %
Construction and land development     313,411       6,304       8.07 %     368,823       7,303       7.94 %
Commercial and industrial     294,489       5,212       7.10 %     317,629       5,281       6.67 %
Residential and home equity     161,299       2,371       5.89 %     105,219       1,380       5.26 %
Consumer and other     16,039       294       7.36 %     17,940       249       5.58 %
Total loans     1,687,452       27,628       6.57 %     1,713,248       27,073       6.34 %
                                                 
Non-marketable equity securities     2,623       27       4.07 %     7,671       58       3.04 %
Total interest earning assets     2,122,954       30,050       5.68 %     2,058,125       28,756       5.60 %
Allowance for loan losses     (26,008 )                     (21,073 )                
Non-interest earning assets     148,625                       140,723                  
Total average assets   $ 2,245,571                     $ 2,177,775                  
LIABILITIES AND SHAREHOLDERS’ EQUITY                                                
Interest bearing deposits:                                                
Demand and savings accounts   $ 814,364       1,034       0.51 %   $ 733,223       492       0.27 %
Money market accounts     274,667       677       0.99 %     207,663       176       0.34 %
Certificates of deposit     179,242       619       1.39 %     185,936       468       1.01 %
Total interest bearing deposits     1,268,273       2,330       0.74 %     1,126,822       1,136       0.40 %
Short-term borrowings     -       -       0.00 %     128,288       642       2.01 %
Total interest bearing liabilities     1,268,273       2,330       0.74 %     1,255,110       1,778       0.57 %
Non-interest bearing deposits     652,158                       642,063                  
Total funding     1,920,431       2,330       0.49 %     1,897,173       1,778       0.38 %
Other non-interest bearing liabilities     17,610                       11,433                  
Shareholders’ equity     307,530                       269,169                  
Total average liabilities and shareholders’ equity   $ 2,245,571                     $ 2,177,775                  
Net interest income           $ 27,720                     $ 26,978          
Interest rate spread                     4.94 %                     5.04 %
Net interest margin                     5.24 %                     5.26 %
________________________________
(1) Excludes average unrealized losses of $2.7 million and $6.4 million for the three months ended June 30, 2019 and 2018, respectively.
(2) Does not include tax effect on tax-exempt investment security income of $104,000 and $123,000 for the three months ended June 30, 2019 and 2018, respectively.
(3) Loan interest income includes loan fees of $1.8 million and $1.7 million for the three months ended June 30, 2019 and 2018, respectively.


PEOPLE’S UTAH BANCORP
SELECTED AVERAGE BALANCES AND YIELDS
 
    Six Months Ended  
    June 30, 2019     June 30, 2018  
            Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/  
(Dollars in thousands, except footnotes)   Balance     Expense     Rate     Balance     Expense     Rate  
ASSETS                                                
Interest earning deposits in other banks and federal funds sold   $ 64,330     $ 730       2.29 %   $ 14,501     $ 109       1.51 %
Securities: (1)                                                
Taxable securities     276,948       3,176       2.31 %     247,078       2,406       1.96 %
Non-taxable securities (2)     67,965       634       1.88 %     81,226       751       1.86 %
Total securities     344,913       3,810       2.23 %     328,304       3,157       1.94 %
Loans (3)                                                
Real estate term     895,700       26,494       5.96 %     879,444       25,024       5.74 %
Construction and land development     314,604       12,535       8.04 %     367,787       14,178       7.77 %
Commercial and industrial     295,665       10,333       7.05 %     315,838       10,371       6.62 %
Residential and home equity     158,812       4,687       5.95 %     106,060       2,716       5.16 %
Consumer and other     16,408       559       6.86 %     18,893       567       6.05 %
Total loans     1,681,189       54,608       6.55 %     1,688,022       52,856       6.31 %
                                                 
Non-marketable equity securities     2,785       54       3.90 %     6,894       73       2.15 %
Total interest earning assets     2,093,217       59,202       5.70 %     2,037,721       56,195       5.56 %
Allowance for loan losses     (25,907 )                     (19,901 )                
Non-interest earning assets     149,160                       142,940                  
Total average assets   $ 2,216,470                     $ 2,160,760                  
LIABILITIES AND SHAREHOLDERS’ EQUITY                                                
Interest bearing deposits:                                                
Demand and savings accounts   $ 807,043       2,027       0.51 %   $ 725,774       943       0.26 %
Money market accounts     262,171       1,281       0.99 %     215,946       333       0.31 %
Certificates of deposit     180,586       1,203       1.34 %     192,705       927       0.97 %
Total interest bearing deposits     1,249,800       4,511       0.73 %     1,134,425       2,203       0.39 %
Short-term borrowings     4,879       64       2.63 %     114,498       1,070       1.88 %
Total interest bearing liabilities     1,254,679       4,575       0.74 %     1,248,923       3,273       0.53 %
Non-interest bearing deposits     643,642                       635,503                  
Total funding     1,898,321       4,575       0.49 %     1,884,426       3,273       0.35 %
Other non-interest bearing liabilities     16,173                       10,925                  
Shareholders’ equity     301,976                       265,409                  
Total average liabilities and shareholders’ equity   $ 2,216,470                     $ 2,160,760                  
Net interest income           $ 54,627                     $ 52,922          
Interest rate spread                     4.97 %                     5.03 %
Net interest margin                     5.26 %                     5.24 %
________________________________
(1) Excludes average unrealized losses of $3.9 million and $5.3 million for the six months ended June 30, 2019 and 2018, respectively.
(2) Does not include tax effect on tax-exempt investment security income of $211,000 and $250,000 for the six months ended June 30, 2019 and 2018, respectively.
(3) Loan interest income includes loan fees of $3.2 million and $3.3 million for the six months ended June 30, 2019 and 2018, respectively.
 


PEOPLE’S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION
 
(NG) Non-GAAP Financial Measures
In addition to financial results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures. Management has presented these non-GAAP financial measures because it believes that they provide useful and comparative information to assess trends in core operations and facilitate the comparison of our financial performance with the performance of our peers.
 
(Dollars in thousands)   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Revenue from Core Operations   2019     2019     2018     2019     2018  
Net interest income (GAAP)   $ 27,720     $ 26,907     $ 26,978     $ 54,627     $ 52,922  
Total non-interest income     3,598       3,337       4,066       6,935       7,784  
Total GAAP revenues     31,318       30,244       31,044       61,562       60,706  
Exclude net gain on sale of investment securities     -       -       (333 )     -       (333 )
Revenue from core operations (non-GAAP)   $ 31,318     $ 30,244     $ 30,711     $ 61,562     $ 60,373  
                                         
                                         
    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Non-interest Income from Core Operations   2019     2019     2018     2019     2018  
Total non-interest income (GAAP)   $ 3,598     $ 3,337     $ 4,066     $ 6,935     $ 7,784  
Exclude net gain on sale of investment securities     -       -       (333 )     -       (333 )
Non-interest income from core operations (non-GAAP)   $ 3,598     $ 3,337     $ 3,733     $ 6,935     $ 7,451  
                                         
                                         
    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Non-interest Expense from Core Operations   2019     2019     2018     2019     2018  
Total non-interest expense (GAAP)   $ 14,699     $ 14,916     $ 15,823     $ 29,615     $ 31,871  
Exclude acquisition-related costs     -       -       (1 )     -       (350 )
Non-interest expense from core operations (non-GAAP)   $ 14,699     $ 14,916     $ 15,822     $ 29,615     $ 31,521  
                                         
                                         
    Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Net Income from Core Operations   2019     2019     2018     2019     2018  
Net income (GAAP)   $ 10,989     $ 10,505     $ 10,467     $ 21,494     $ 19,471  
Exclude net gain on sale of investment securities     -       -       (333 )     -       (333 )
Exclude acquisition-related costs     -       -       1       -       350  
Exclude tax related benefit     -       -       79       -       (4 )
Revaluation of deferred income tax assets (DTA)     -       -       -       -       -  
Net income (non-GAAP)   $ 10,989     $ 10,505     $ 10,214     $ 21,494     $ 19,484  


PEOPLE’S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION
 
(NG) Non-GAAP Financial Measures (continued)  
(Dollars in thousands)   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Acquisition Accounting Impact on Net Interest Margin   2019     2019     2018     2019     2018  
Net interest income (GAAP)   $ 27,720     $ 26,907     $ 26,978     $ 54,627     $ 52,922  
Exclude discount accretion (premium amortization) on purchased loans     (345 )     (528 )     (777 )     (873 )     (1,944 )
Exclude premium amortization on acquired certificates of deposit ("CD")     (35 )     (35 )     (35 )     (70 )     (70 )
Net interest income before acquisition accounting impact (Non-GAAP)   $ 27,340     $ 26,344     $ 26,166     $ 53,684     $ 50,908  
                                         
Average earning assets (GAAP)   $ 2,122,954     $ 2,063,149     $ 2,058,125     $ 2,093,217     $ 2,037,721  
Exclude average net loan discount on acquired loans     8,073       8,500       10,146       8,285       11,030  
Average earning assets before acquired loan discount (Non-GAAP)   $ 2,131,027     $ 2,071,649     $ 2,068,271     $ 2,101,502     $ 2,048,751  
                                         
Net interest margin ("NIM") (GAAP)     5.24 %     5.29 %     5.26 %     5.26 %     5.24 %
Exclude impact on NIM from discount accretion     -0.06 %     -0.10 %     -0.15 %     -0.08 %     -0.19 %
Exclude impact on NIM from CD premium amortization     -0.01 %     -0.01 %     -0.01 %     -0.01 %     -0.01 %
Net interest margin before acquisition accounting adjustments (Non-GAAP)     5.17 %     5.18 %     5.10 %     5.17 %     5.04 %


PEOPLE’S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION
 
(NG) Non-GAAP Financial Measures (continued)  
(Dollars in thousands)   Three Months Ended     Six Months Ended  
    June 30,     March 31,     June 30,     June 30,     June 30,  
Additional Non-GAAP Financial Information   2019     2019     2018     2019     2018  
                                         
Diluted earnings per share (GAAP)   $ 0.58     $ 0.55     $ 0.55     $ 1.13     $ 1.03  
Diluted earnings per share (non-GAAP)   $ 0.58     $ 0.55     $ 0.54     $ 1.13     $ 1.03  
                                         
Efficiency ratio (GAAP)     46.93 %     49.32 %     50.97 %     48.11 %     52.50 %
Efficiency ratio (non-GAAP)     46.93 %     49.32 %     51.52 %     48.11 %     52.21 %
                                         
Non-interest income to average assets (GAAP)     0.64 %     0.62 %     0.75 %     0.63 %     0.73 %
Non-interest income to average assets (non-GAAP)     0.64 %     0.62 %     0.69 %     0.63 %     0.70 %
                                         
Non-interest expense to average assets (GAAP)     2.63 %     2.77 %     2.91 %     2.69 %     2.97 %
Non-interest expense to average assets (non-GAAP)     2.63 %     2.77 %     2.91 %     2.69 %     2.94 %
                                         
Return on average assets (GAAP)     1.96 %     1.95 %     1.93 %     1.96 %     1.82 %
Return on average assets (non-GAAP)     1.96 %     1.95 %     1.88 %     1.96 %     1.82 %
                                         
Return on average equity (GAAP)     14.33 %     14.38 %     15.60 %     14.35 %     14.79 %
Return on average equity (non-GAAP)     14.33 %     14.38 %     15.22 %     14.35 %     14.80 %
                                         

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