x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Washington
|
91-1572822
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
Class
|
Outstanding
as of November
1,
2007
|
Common
Stock ($1.00 par value)
|
51,431,361
|
Page
|
||
1
|
||
1
|
||
1
|
||
2
|
||
3
|
||
5
|
||
6
|
||
15
|
||
31
|
||
31
|
||
32
|
||
32
|
||
32
|
||
32
|
||
32
|
||
32
|
||
32
|
||
32
|
||
33
|
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Dollars
in thousands)
|
|||||||
ASSETS:
|
|||||||
Cash
and cash equivalents:
|
|||||||
Interest
bearing
|
$3,492
|
$13,846
|
|||||
Non-interest
bearing and vault
|
163,764
|
164,719
|
|||||
Total
cash and cash equivalents
|
167,256
|
178,565
|
|||||
Restricted
cash
|
1,100
|
1,150
|
|||||
Investment
securities and mortgage-backed securities ("MBS"):
|
|||||||
Available
for sale
|
1,788,911
|
1,820,583
|
|||||
Held
to maturity
|
115,518
|
93,063
|
|||||
Loans
receivable, net
|
8,747,430
|
7,021,241
|
|||||
Loans
held for sale
|
54,460
|
91,469
|
|||||
Accrued
interest receivable
|
65,676
|
55,519
|
|||||
Real
estate owned and other collateralized assets, net
|
3,427
|
4,052
|
|||||
Office
properties and equipment, net
|
94,939
|
93,796
|
|||||
Bank-owned
life insurance ("BOLI")
|
149,136
|
139,206
|
|||||
Goodwill
|
453,294
|
247,244
|
|||||
Other
intangible assets, net
|
32,852
|
28,570
|
|||||
Mortgage
servicing rights, net
|
9,970
|
7,335
|
|||||
Prepaid
expenses and other assets, net
|
62,946
|
52,699
|
|||||
Total
assets
|
$
|
11,746,915
|
$
|
9,834,492
|
|||
LIABILITIES:
|
|||||||
Deposits
|
$
|
7,766,392
|
$
|
6,746,028
|
|||
Advances
from Federal Home Loan Bank ("FHLB")
|
1,462,132
|
1,308,617
|
|||||
Repurchase
agreements and federal funds
|
941,143
|
616,354
|
|||||
Other
borrowings
|
273,467
|
240,226
|
|||||
Cashiers
checks issued and payable
|
5,976
|
18,144
|
|||||
Borrowers'
reserves for taxes and insurance
|
3,223
|
2,348
|
|||||
Accrued
interest payable
|
39,172
|
39,863
|
|||||
Accrued
expenses and other liabilities
|
96,692
|
79,496
|
|||||
Total
liabilities
|
10,588,197
|
9,051,076
|
|||||
Commitments
and Contingencies
|
|||||||
SHAREHOLDERS'
EQUITY:
|
|||||||
Preferred
stock, $1 par value; 10,000,000 shares authorized;
|
|||||||
no
shares issued and outstanding
|
0
|
0
|
|||||
Common
stock, $1 par value; 100,000,000 shares authorized;
|
|||||||
51,422,336
and 42,042,740 shares issued and outstanding
|
51,422
|
42,043
|
|||||
Additional
paid-in capital
|
891,518
|
590,218
|
|||||
Accumulated
other comprehensive loss:
|
|||||||
Unrealized
losses on investment securities and MBS available-for-sale,
|
|||||||
net
of deferred income taxes of $18,793 and $19,531
|
(32,067
|
)
|
(33,350
|
)
|
|||
Retained
earnings
|
247,845
|
184,505
|
|||||
Total
shareholders' equity
|
1,158,718
|
783,416
|
|||||
Total
liabilities and shareholders' equity
|
$
|
11,746,915
|
$
|
9,834,492
|
|||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Dollars
in thousands, except per share data)
|
|||||||||||||
Interest
income:
|
|||||||||||||
Loans
|
$
|
179,132
|
$
|
125,554
|
$
|
504,720
|
$
|
321,021
|
|||||
MBS
|
18,882
|
21,626
|
58,706
|
67,444
|
|||||||||
Investments
and cash equivalents
|
1,904
|
1,028
|
5,455
|
2,642
|
|||||||||
Total
interest income
|
199,918
|
148,208
|
568,881
|
391,107
|
|||||||||
Interest
expense:
|
|||||||||||||
Deposits
|
71,489
|
51,653
|
205,875
|
127,372
|
|||||||||
Short-term
borrowings
|
6,690
|
10,055
|
26,095
|
25,301
|
|||||||||
Long-term
borrowings
|
28,075
|
16,467
|
73,591
|
48,396
|
|||||||||
Total
interest expense
|
106,254
|
78,175
|
305,561
|
201,069
|
|||||||||
Net
interest income
|
93,664
|
70,033
|
263,320
|
190,038
|
|||||||||
Provision
for losses on loans
|
(3,888
|
)
|
(4,698
|
)
|
(12,088
|
)
|
(13,998
|
)
|
|||||
Net
interest income after provision for losses on loans
|
89,776
|
65,335
|
251,232
|
176,040
|
|||||||||
Non-interest
income:
|
|||||||||||||
Fees
and service charges
|
14,966
|
11,526
|
40,852
|
31,220
|
|||||||||
Mortgage
banking operations
|
7,314
|
5,572
|
25,979
|
10,568
|
|||||||||
Loan
servicing fees
|
366
|
473
|
1,459
|
1,224
|
|||||||||
Real
estate owned and other collateralized assets operations
|
223
|
(138
|
)
|
85
|
247
|
||||||||
BOLI
|
1,553
|
1,225
|
4,817
|
3,611
|
|||||||||
Other
|
(215
|
)
|
(207
|
)
|
(759
|
)
|
(372
|
)
|
|||||
Total
non-interest income
|
24,207
|
18,451
|
72,433
|
46,498
|
|||||||||
Non-interest
expenses
|
74,104
|
55,302
|
209,664
|
146,531
|
|||||||||
Income
before income taxes
|
39,879
|
28,484
|
114,001
|
76,007
|
|||||||||
Income
tax provision
|
(13,349
|
)
|
(9,145
|
)
|
(37,569
|
)
|
(24,321
|
)
|
|||||
Net
income
|
$
|
26,530
|
$
|
19,339
|
$
|
76,432
|
$
|
51,686
|
|||||
Earnings
per share - basic
|
$
|
0.52
|
$
|
0.52
|
$
|
1.55
|
$
|
1.45
|
|||||
Earnings
per share - diluted
|
$
|
0.51
|
$
|
0.52
|
$
|
1.54
|
$
|
1.44
|
|||||
Weighted
average shares outstanding - basic
|
51,279,114
|
36,891,986
|
49,257,951
|
35,645,887
|
|||||||||
Weighted
average shares outstanding - diluted
|
51,660,186
|
37,273,560
|
49,768,308
|
35,992,764
|
|||||||||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
Nine
Months Ended
|
|||||||
September
30,
|
|||||||
2007
|
2006
|
||||||
(Dollars
in thousands)
|
|||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
76,432
|
$
|
51,686
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Provisions
for losses on loans and real estate owned
|
12,088
|
14,168
|
|||||
Accretion
of deferred gain on sale of branches
|
(536
|
)
|
(151
|
)
|
|||
Net
gain on sales of loans, investment securities and MBS
|
(16,499
|
)
|
(4,832
|
)
|
|||
Stock
based compensation
|
1,013
|
182
|
|||||
Excess
tax benefit from stock based compensation
|
(1,419
|
)
|
(1,638
|
)
|
|||
Stock
issuances relating to 401(k) match
|
1,637
|
1,203
|
|||||
Other
gains and losses
|
3,024
|
888
|
|||||
Increase
in cash surrender value of BOLI
|
(4,817
|
)
|
(3,611
|
)
|
|||
Depreciation
and amortization
|
18,184
|
14,084
|
|||||
Change
in:
|
|||||||
Accrued
interest receivable
|
(3,117
|
)
|
(8,770
|
)
|
|||
Prepaid
expenses and other assets
|
(10,027
|
)
|
1,217
|
||||
Cashiers
checks issued and payable
|
(16,867
|
)
|
721
|
||||
Accrued
interest payable
|
(2,664
|
)
|
16,307
|
||||
Accrued
expenses and other liabilities
|
7,094
|
(2,910
|
)
|
||||
Proceeds
from sales of loans originated for sale
|
988,255
|
304,302
|
|||||
Loans
originated for sale
|
(975,871
|
)
|
(299,639
|
)
|
|||
Net
cash provided by operating activities
|
75,910
|
83,207
|
|||||
Cash
flows from investing activities:
|
|||||||
Change
in restricted cash
|
50
|
(501
|
)
|
||||
Loans
funded and purchased
|
(3,702,199
|
)
|
(3,169,552
|
)
|
|||
Loan
principal received
|
3,122,955
|
2,120,741
|
|||||
Proceeds
from sales of other loans
|
112,651
|
51,144
|
|||||
Purchase
of investment securities
|
(79,941
|
)
|
(44,416
|
)
|
|||
Proceeds
from maturities of investment securities
|
38,580
|
11,400
|
|||||
Proceeds
from sale of investments
|
5,609
|
0
|
|||||
Net
change in cash and cash equivalents from acquisitions
|
92,419
|
(5,983
|
)
|
||||
Purchase
of mortgage-backed securities
|
(120,419
|
)
|
0
|
||||
Principal
payments on mortgage-backed securities
|
183,899
|
208,160
|
|||||
Purchase
of office properties and equipment
|
(10,806
|
)
|
(11,742
|
)
|
|||
Sales
of office properties and equipment
|
3,810
|
18,882
|
|||||
Improvements
and other changes to real estate owned
|
30
|
(248
|
)
|
||||
Proceeds
from sales and liquidation of real estate owned
|
1,348
|
1,353
|
|||||
Net
cash used in investing activities
|
(352,014
|
)
|
(820,762
|
)
|
|||
The
accompanying notes are an integral part of the consolidated
financial
statements.
|
Nine
Months Ended
|
|||||||
September
30,
|
|||||||
2007
|
2006
|
||||||
(Dollars
in thousands)
|
|||||||
Cash
flows from financing activities:
|
|||||||
Net
change in transaction and savings deposits
|
$
|
105,673
|
$
|
224,549
|
|||
Proceeds
from issuance of time deposits
|
3,010,268
|
2,803,087
|
|||||
Payments
for maturing time deposits
|
(3,280,346
|
)
|
(2,437,358
|
)
|
|||
Interest
credited to deposits
|
190,115
|
110,760
|
|||||
Advances
from FHLB
|
1,517,744
|
1,985,866
|
|||||
Repayment
of advances from FHLB
|
(1,630,642
|
)
|
(2,055,766
|
)
|
|||
Net
change in securities sold subject to repurchase agreements
|
|||||||
and
funds purchased
|
324,789
|
11,936
|
|||||
Proceeds
from other borrowings
|
69,392
|
130,000
|
|||||
Repayments
of other borrowings
|
(36,403
|
)
|
(25,000
|
)
|
|||
Proceeds
from stock purchases
|
3,546
|
4,774
|
|||||
Excess
tax benefit from stock based compensation
|
1,419
|
1,638
|
|||||
Cash
dividends paid to shareholders
|
(11,635
|
)
|
(6,670
|
)
|
|||
Other
|
875
|
2,044
|
|||||
Net
cash provided by financing activities
|
264,795
|
749,860
|
|||||
Net
change in cash and cash equivalents
|
(11,309
|
)
|
12,305
|
||||
Cash
and cash equivalents, beginning of period
|
178,565
|
131,307
|
|||||
Cash
and cash equivalents, end of period
|
$
|
167,256
|
$
|
143,612
|
|||
Supplemental
disclosures:
|
|||||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
306,252
|
$
|
184,122
|
|||
Income
taxes
|
35,902
|
28,732
|
|||||
Noncash
financing and investing activities:
|
|||||||
Loans
converted into real estate owned and other collateralized
assets
|
753
|
4,406
|
|||||
Common
stock issued upon business combination
|
8,927
|
50,565
|
|||||
Common
stock cash dividends accrued
|
4,611
|
2,594
|
|||||
Deferred
gain on sale of branches
|
804
|
9,029
|
|||||
The
accompanying notes are an integral part of the consolidated
financial
statements.
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Dollars
in thousands)
|
(Dollars
in thousands)
|
||||||||||||
Net
income
|
$
|
26,530
|
$
|
19,339
|
$
|
76,432
|
$
|
51,686
|
|||||
Other
comprehensive income:
|
|||||||||||||
Change
in unrealized gains (losses) on investment
|
|||||||||||||
securities
and MBS available-for-sale
|
20,482
|
39,170
|
2,021
|
(1,650
|
)
|
||||||||
Less
deferred income taxes
|
(7,575
|
)
|
(14,490
|
)
|
(738
|
)
|
620
|
||||||
Net
other comprehensive income (loss)
|
12,907
|
24,680
|
1,283
|
(1,030
|
)
|
||||||||
Comprehensive
income
|
$
|
39,437
|
$
|
44,019
|
$
|
77,715
|
$
|
50,656
|
|||||
The
accompanying notes are an integral part of the consolidated
financial
statements.
|
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Junior
Subordinated Debentures
|
$
|
270,013
|
$
|
236,772
|
|||
Other
|
3,454
|
3,454
|
|||||
Total
|
$
|
273,467
|
$
|
240,226
|
Subsidiary
Issuer
|
Issue
Date
|
Maturity
Date
|
Call
Date
|
Rate
at
September
30, 2007
|
Carrying
Value
(in
thousands)
|
||||||||||||||
Sterling
Capital Trust IX
|
July
2007
|
Oct
2037
|
N/A
|
Floating
|
6.76
|
%
|
$
|
46,392
|
|||||||||||
Sterling
Capital Trust VIII
|
Sept
2006
|
Sept
2036
|
N/A
|
Floating
|
7.32
|
51,547
|
|||||||||||||
Sterling
Capital Trust VII
|
June
2006
|
June
2036
|
N/A
|
Floating
|
7.22
|
56,702
|
|||||||||||||
Lynnwood
Financial Statutory Trust II
|
June
2005
|
June
2035
|
N/A
|
Floating
|
7.49
|
10,310
|
|||||||||||||
Sterling
Capital Trust VI
|
June
2003
|
Sept
2033
|
Sept
2008
|
Floating
|
8.89
|
10,310
|
|||||||||||||
Sterling
Capital Statutory Trust V
|
May
2003
|
May
2033
|
June
2008
|
Floating
|
8.45
|
20,619
|
|||||||||||||
Sterling
Capital Trust IV
|
May
2003
|
May
2033
|
May
2008
|
Floating
|
8.71
|
10,310
|
|||||||||||||
Sterling
Capital Trust III
|
April
2003
|
April
2033
|
April
2008
|
Floating
|
8.61
|
14,433
|
|||||||||||||
Lynnwood
Financial Statutory Trust I
|
Mar
2003
|
Mar
2033
|
Mar
2007
|
Floating
|
8.35
|
9,478
|
|||||||||||||
Klamath
First Capital Trust I
|
July
2001
|
July
2031
|
June
2006
|
Floating
|
9.06
|
15,169
|
|||||||||||||
Sterling
Capital Trust II
|
July
2001
|
July
2031
|
June
2006
|
Fixed
|
10.25
|
24,743
|
|||||||||||||
7.88 |
%*
|
$
|
270,013
|
||||||||||||||||
* |
weighted
average rate
|
January
1, 2007
|
||||
(Dollars
in thousands)
|
||||
Unrecognized
Tax Benefit
|
$
|
1,553
|
||
Potential
Effective Tax Rate Impact
|
1,245
|
|||
Recognized
Penalties and Interest
|
308
|
Three
Months Ended September 30,
|
|||||||||||||||||||
2007
|
2006
|
||||||||||||||||||
Net
|
Weighted
|
Per
Share
|
Net
|
Weighted
|
Per
Share
|
|
|||||||||||||
Income
|
Avg.
Shares
|
Amount
|
Income
|
Avg.
Shares
|
Amount
|
||||||||||||||
(Dollars
in thousands, except per share amounts)
|
|||||||||||||||||||
Basic
computations
|
$
|
26,530
|
51,279,114
|
$
|
0.52
|
$
|
19,339
|
36,891,986
|
$
|
0.52
|
|||||||||
Effect
of dilutive securities:
|
|||||||||||||||||||
Common
stock options and
|
|||||||||||||||||||
restricted
shares
|
0
|
381,072
|
(0.01
|
)
|
0
|
369,570
|
0.00
|
||||||||||||
Contingently
issuable shares
|
0
|
0
|
0.00
|
0
|
12,004
|
0.00
|
|||||||||||||
Diluted
computations
|
$
|
26,530
|
51,660,186
|
$
|
0.51
|
$
|
19,339
|
37,273,560
|
$
|
0.52
|
|||||||||
Antidilutive
options not included
|
|||||||||||||||||||
in
diluted earnings per share
|
735,749
|
0
|
|||||||||||||||||
Nine
Months Ended September 30,
|
|||||||||||||||||||
2007
|
2006
|
||||||||||||||||||
Net
|
Weighted
|
Per
Share
|
Net
|
Weighted
|
Per
Share
|
||||||||||||||
Income
|
Avg.
Shares
|
Amount
|
Income
|
Avg.
Shares
|
Amount
|
||||||||||||||
(Dollars
in thousands, except per share amounts)
|
|||||||||||||||||||
Basic
computations
|
$
|
76,432
|
49,257,951
|
$
|
1.55
|
$
|
51,686
|
35,645,887
|
$
|
1.45
|
|||||||||
Effect
of dilutive securities:
|
|||||||||||||||||||
Common
stock options and
|
|||||||||||||||||||
restricted
shares
|
0
|
510,357
|
(0.01
|
)
|
0
|
334,873
|
(0.01
|
)
|
|||||||||||
Contingently
issuable shares
|
0
|
0
|
0.00
|
0
|
12,004
|
0.00
|
|||||||||||||
Diluted
computations
|
$
|
76,432
|
49,768,308
|
$
|
1.54
|
$
|
51,686
|
35,992,764
|
$
|
1.44
|
|||||||||
Antidilutive
options not included
|
|||||||||||||||||||
in
diluted earnings per share
|
281,396
|
0
|
|||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Dollars
in thousands)
|
|||||||||||||
Employee
compensation and benefits
|
$
|
41,114
|
$
|
31,479
|
$
|
118,348
|
$
|
82,278
|
|||||
Occupancy
and equipment
|
10,767
|
8,755
|
32,915
|
23,046
|
|||||||||
Data
processing
|
4,833
|
3,746
|
13,206
|
10,601
|
|||||||||
Depreciation
|
3,387
|
2,662
|
9,923
|
7,377
|
|||||||||
Advertising
|
3,289
|
2,900
|
9,245
|
7,155
|
|||||||||
Travel
and entertainment
|
2,022
|
1,454
|
5,663
|
4,040
|
|||||||||
Goodwill
litigation costs
|
1,525
|
25
|
2,837
|
245
|
|||||||||
Insurance
|
1,338
|
364
|
2,246
|
963
|
|||||||||
Amortization
of core deposit intangibles
|
1,225
|
586
|
3,492
|
1,697
|
|||||||||
Legal
and accounting
|
591
|
622
|
1,814
|
1,861
|
|||||||||
Merger
and acquisition costs
|
263
|
191
|
1,883
|
191
|
|||||||||
Other
|
3,750
|
2,518
|
8,092
|
7,077
|
|||||||||
Total
|
$
|
74,104
|
$
|
55,302
|
$
|
209,664
|
$
|
146,531
|
|||||
· |
The
Community Banking segment consists of the operations conducted by
Sterling's subsidiary, Sterling Savings
Bank.
|
· |
The
Residential Mortgage Banking segment originates and sells
servicing-retained and servicing-released residential loans through
loan
production offices of Sterling's subsidiary, Golf Savings Bank and
Sterling Savings Bank's subsidiary, Action Mortgage Company ("Action
Mortgage").
|
· |
The
Commercial Mortgage Banking segment originates, sells and services
commercial real estate loans and participation interests in commercial
real estate loans through offices in the western region primarily
through
Sterling Savings Bank's subsidiary INTERVEST-Mortgage Investment
Company
("INTERVEST").
|
· |
The
Retail Brokerage segment markets fixed income and equity products,
mutual
funds, fixed and variable annuities, insurance and other financial
products within the Sterling Savings Bank financial service center
network
through sales representatives of Sterling Savings Bank's subsidiary
Harbor
Financial Services, Inc.
|
· |
The
Other and Eliminations segment represents the parent company expenses
and
intercompany eliminations of revenue and
expenses.
|
As
of and for the Three Months Ended September 30,
2007
|
|||||||||||||||||||
Community
Banking
|
Residential
Mortgage
Banking
|
Commercial
Mortgage
Banking
|
Retail Brokerage |
Other
and
Eliminations
|
Total
|
||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||
Interest
income
|
$
|
183,366
|
$
|
14,178
|
$
|
2,309
|
$
|
0
|
$
|
65
|
$
|
199,918
|
|||||||
Interest
expense
|
(97,636
|
)
|
(3,908
|
)
|
0
|
0
|
(4,710
|
)
|
(106,254
|
)
|
|||||||||
Net
interest income (expense)
|
85,730
|
10,270
|
2,309
|
0
|
(4,645
|
)
|
93,664
|
||||||||||||
Provision
for loan losses
|
(3,775
|
)
|
(113
|
)
|
0
|
0
|
0
|
(3,888
|
)
|
||||||||||
Noninterest
income
|
19,982
|
6,190
|
1,751
|
1,458
|
(5,174
|
)
|
24,207
|
||||||||||||
Noninterest
expense
|
(58,966
|
)
|
(10,572
|
)
|
(2,881
|
)
|
(1,140
|
)
|
(545
|
)
|
(74,104
|
)
|
|||||||
Income
before income taxes
|
$
|
42,971
|
$
|
5,775
|
$
|
1,179
|
318
|
$
|
(10,364
|
)
|
$
|
39,879
|
|||||||
Total
assets
|
$
|
11,429,438
|
$
|
407,668
|
$
|
10,370
|
$
|
1,160
|
$
|
(101,721
|
)
|
$
|
11,746,915
|
||||||
As
of and for the Three Months Ended September 30,
2006
|
|||||||||||||||||||
Community
Banking
|
Residential
Mortgage
Banking
|
Commercial
Mortgage
Banking
|
Retail Brokerage | Other and Eliminations |
Total
|
||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||
Interest
income
|
$
|
136,616
|
$
|
10,870
|
$
|
2,407
|
$
|
0
|
$
|
(1,685
|
)
|
$
|
148,208
|
||||||
Interest
expense
|
(72,246
|
)
|
(3,886
|
)
|
0
|
0
|
(2,043
|
)
|
(78,175
|
)
|
|||||||||
Net
interest income (expense)
|
64,370
|
6,984
|
2,407
|
0
|
(3,728
|
)
|
70,033
|
||||||||||||
Provision
for loan losses
|
(4,650
|
)
|
(45
|
)
|
0
|
0
|
(3
|
)
|
(4,698
|
)
|
|||||||||
Noninterest
income
|
14,398
|
6,173
|
1,129
|
759
|
(4,008
|
)
|
18,451
|
||||||||||||
Noninterest
expense
|
(40,546
|
)
|
(11,016
|
)
|
(2,272
|
)
|
(726
|
)
|
(742
|
)
|
(55,302
|
)
|
|||||||
Income
before income taxes
|
$
|
33,572
|
$
|
2,096
|
$
|
1,264
|
$
|
33
|
$
|
(8,481
|
)
|
$
|
28,484
|
||||||
Total
assets
|
$
|
8,669,081
|
$
|
354,447
|
$
|
10,660
|
$
|
897
|
$
|
(117,410
|
)
|
$
|
8,917,675
|
||||||
As
of and for the Nine Months Ended September 30,
2007
|
|||||||||||||||||||
Community
Banking
|
Residential
Mortgage
Banking
|
Commercial
Mortgage
Banking
|
Retail Brokerage |
Other
and
Eliminations
|
Total
|
||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||
Interest
income
|
$
|
524,903
|
$
|
37,355
|
$
|
6,544
|
$
|
0
|
$
|
79
|
$
|
568,881
|
|||||||
Interest
expense
|
(281,837
|
)
|
(10,159
|
)
|
0
|
0
|
(13,565
|
)
|
(305,561
|
)
|
|||||||||
Net
interest income (expense)
|
243,066
|
27,196
|
6,544
|
0
|
(13,486
|
)
|
263,320
|
||||||||||||
Provision
for loan losses
|
(11,825
|
)
|
(263
|
)
|
0
|
0
|
0
|
(12,088
|
)
|
||||||||||
Noninterest
income
|
58,101
|
20,965
|
5,925
|
3,281
|
(15,839
|
)
|
72,433
|
||||||||||||
Noninterest
expense
|
(165,158
|
)
|
(30,896
|
)
|
(8,210
|
)
|
(2,979
|
)
|
(2,421
|
)
|
(209,664
|
)
|
|||||||
Income
before income taxes
|
$
|
124,184
|
$
|
17,002
|
$
|
4,259
|
$
|
302
|
$
|
(31,746
|
)
|
$
|
114,001
|
||||||
Total
assets
|
$
|
11,429,438
|
$
|
407,668
|
$
|
10,370
|
$
|
1,160
|
(101,721
|
)
|
$
|
11,746,915
|
|||||||
As
of and for the Nine Months Ended September 30,
2006
|
|||||||||||||||||||
Community
Banking
|
Residential
Mortgage
Banking
|
Commercial
Mortgage
Banking
|
Retail
Brokerage
|
Other
and
Eliminations
|
Total
|
||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||
Interest
income
|
$
|
367,562
|
$
|
18,112
|
$
|
6,670
|
$
|
0
|
$
|
(1,237
|
)
|
$
|
391,107
|
||||||
Interest
expense
|
(190,402
|
)
|
(3,886
|
)
|
0
|
0
|
(6,781
|
)
|
(201,069
|
)
|
|||||||||
Net
interest income (expense)
|
177,160
|
14,226
|
6,670
|
0
|
(8,018
|
)
|
190,038
|
||||||||||||
Provision
for loan losses
|
(13,953
|
)
|
(45
|
)
|
0
|
0
|
0
|
(13,998
|
)
|
||||||||||
Noninterest
income
|
39,330
|
10,725
|
3,612
|
2,602
|
(9,771
|
)
|
46,498
|
||||||||||||
Noninterest
expense
|
(117,393
|
)
|
(18,791
|
)
|
(6,195
|
)
|
(2,197
|
)
|
(1,955
|
)
|
(146,531
|
)
|
|||||||
Income
before income taxes
|
$
|
85,144
|
$
|
6,115
|
$
|
4,087
|
$
|
405
|
$
|
(19,744
|
)
|
$
|
76,007
|
||||||
Total
assets
|
$
|
8,669,081
|
$
|
354,447
|
$
|
10,660
|
$
|
897
|
$
|
(117,410
|
)
|
$
|
8,917,675
|
||||||
Number
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life (in years)
|
Aggregate
Intrinsic Value (in thousands)
|
||||||||||
Outstanding,
December 31, 2006
|
1,485,661
|
$
|
19.72
|
||||||||||
Granted
|
340,000
|
32.37
|
|||||||||||
Exercised
|
(314,155
|
)
|
11.48
|
||||||||||
Acquisitions
|
573,212
|
12.67
|
|||||||||||
Cancelled
|
(11,623
|
)
|
18.74
|
||||||||||
Outstanding,
September 30, 2007
|
2,073,095
|
$
|
21.10
|
4.90
|
$
|
12,048
|
|||||||
Exercisable,
September 30, 2007
|
1,734,095
|
$
|
18.90
|
4.58
|
$
|
13,897
|
Nine
Months Ended
|
|||||||
September
30,
|
|||||||
2007
|
2006
|
||||||
Expected
volatility
|
26%
- 29
|
%
|
31
|
%
|
|||
Expected
term (in years)
|
4.7
- 6.0
|
5.5
|
|||||
Expected
dividend yield
|
0.90%
- 1.47
|
%
|
0.87
|
%
|
|||
Risk
free interest rate
|
4.65%
- 4.80
|
%
|
4.36
|
%
|
Date
Paid
|
Per
Share Amount
|
Total
|
|||||
January
2006
|
$
|
0.055
|
$
|
1.9
million
|
|||
April
2006
|
0.060
|
2.1
million
|
|||||
July
2006
|
0.065
|
2.3
million
|
|||||
October
2006
|
0.070
|
2.6
million
|
|||||
January
2007
|
0.075
|
3.2
million
|
|||||
April
2007
|
0.080
|
4.1
million
|
|||||
July
2007
|
0.085
|
4.3
million
|
|||||
October
2007
|
0.090
|
4.6
million
|
February
28, 2007
|
||||
Cash
and cash equivalents
|
$
|
110,775
|
||
Investments
and MBS
|
22,574
|
|||
Loans
receivable, net
|
1,228,816
|
|||
Goodwill
|
208,944
|
|||
Core
deposit intangible
|
7,775
|
|||
Other
assets
|
19,523
|
|||
Total
assets acquired
|
$
|
1,598,407
|
||
Deposits
|
$
|
987,694
|
||
Other
borrowings
|
266,853
|
|||
Other
liabilities
|
11,093
|
|||
Total
liabilities assumed
|
1,265,640
|
|||
Net
assets acquired
|
$
|
332,767
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Pro
forma interest income
|
$
|
199,918
|
$
|
173,438
|
$
|
585,859
|
$
|
461,380
|
|||||
Pro
forma interest expense
|
106,254
|
91,363
|
314,562
|
235,510
|
|||||||||
Pro
forma net interest income
|
93,664
|
82,075
|
271,297
|
225,870
|
|||||||||
Pro
forma net income
|
26,530
|
23,492
|
75,337
|
64,565
|
|||||||||
Pro
forma earnings per share - basic
|
$
|
0.52
|
$
|
0.51
|
$
|
1.48
|
$
|
1.45
|
|||||
Pro
forma earnings per share - diluted
|
$
|
0.51
|
$
|
0.50
|
$
|
1.47
|
$
|
1.43
|
|||||
·
|
Net
interest margin was 3.50 percent, a 9 basis point improvement over
last
quarter.
|
·
|
Total
assets were a record $11.75 billion, representing a 10 percent growth
on
an annualized basis over last quarter.
|
·
|
Net
income was $26.5 million, slightly below the $27.0 million last
quarter.
|
·
|
Non-interest
income was $24.2 million, compared to $24.8 million last
quarter.
|
·
|
Total
loans receivable increased to a record $8.75 billion, representing an
11 percent growth on an annualized basis over last quarter.
|
·
|
Total
deposits increased to a record $7.77 billion, representing an 8
percent growth on an annualized basis over last quarter.
|
·
|
Total
nonperforming assets increased to 0.49 percent of total assets, up
from
0.27 percent of total assets last quarter.
|
· |
Volume
- changes in volume multiplied by comparative period
rate;
|
· |
Rate
- changes in rate multiplied by comparative period volume;
and
|
· |
Rate/volume
- changes in rate multiplied by changes in
volume.
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2007
vs. 2006
|
2007
vs. 2006
|
||||||||||||||||||||||||
Increase
(Decrease) Due to:
|
Increase
(Decrease) Due to:
|
||||||||||||||||||||||||
Rate/
|
Rate/
|
||||||||||||||||||||||||
Volume
|
Rate
|
Volume
|
Total
|
Volume
|
Rate
|
Volume
|
Total
|
||||||||||||||||||
Rate/volume
analysis:
|
(Dollars
in thousands)
|
||||||||||||||||||||||||
Interest
income:
|
|||||||||||||||||||||||||
Loans
|
$
|
53,037
|
$
|
443
|
$
|
141
|
$
|
53,621
|
$
|
160,583
|
$
|
15,431
|
$
|
7,793
|
$
|
183,807
|
|||||||||
MBS
|
(2,855
|
)
|
126
|
(16
|
)
|
(2,745
|
)
|
(8,888
|
)
|
173
|
(23
|
)
|
(8,738
|
)
|
|||||||||||
Investments
and cash equivalents
|
(303
|
)
|
1,803
|
(369
|
)
|
1,131
|
452
|
2,760
|
332
|
3,544
|
|||||||||||||||
Total
interest income
|
49,879
|
2,372
|
(244
|
)
|
52,007
|
152,147
|
18,364
|
8,102
|
178,613
|
||||||||||||||||
Interest
expense:
|
|||||||||||||||||||||||||
Deposits
|
15,363
|
3,461
|
1,012
|
19,836
|
48,997
|
21,337
|
8,169
|
78,503
|
|||||||||||||||||
Borrowings
|
6,652
|
1,272
|
319
|
8,243
|
13,216
|
10,830
|
1,943
|
25,989
|
|||||||||||||||||
Total
interest expense
|
22,015
|
4,733
|
1,331
|
28,079
|
62,213
|
32,167
|
10,112
|
104,492
|
|||||||||||||||||
Net
changes in NII
|
$
|
27,864
|
$
|
(2,361
|
)
|
$
|
(1,575
|
)
|
$
|
23,928
|
$
|
89,934
|
$
|
(13,803
|
)
|
$
|
(2,010
|
)
|
$
|
74,121
|
|||||
Three
Months Ended
|
Tax
Equivalent Net Interest Margin
|
|||
September
30, 2007
|
3.50
|
%
|
||
June
30, 2007
|
3.41
|
%
|
||
March
31, 2007
|
3.41
|
%
|
||
December
31, 2006
|
3.37
|
%
|
||
September
30, 2006
|
3.34
|
%
|
Nine
Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
(Dollars
in thousands)
|
|||||||
Allowance
- loans, January 1
|
$
|
77,849
|
$
|
52,034
|
|||
Acquired
|
15,294
|
4,552
|
|||||
Provision
|
11,838
|
13,998
|
|||||
Charge
offs, net of recoveries
|
(2,733
|
)
|
(2,570
|
)
|
|||
Transfers
|
(206
|
)
|
(1,509
|
)
|
|||
Allowance
- loans, September 30
|
102,042
|
66,505
|
|||||
Allowance
- unfunded commitments, January 1
|