Financial Performance - Net income for the quarter ended June 30, 2020, was $15.1 million, an increase of $3.1 million, or 25.5%, compared to the same quarter in 2019 [306]. - Net income for the six months ended June 30, 2020, was $21.9 million, a decrease of $5.1 million, or 18.9%, compared to $27.0 million for the same period in 2019 [316]. - Net interest income increased by $15.0 million, or 36.8%, to $55.9 million for the quarter ended June 30, 2020, driven by higher average balances on loans and securities [307]. - Net interest income increased to $106.6 million for the six months ended June 30, 2020, up $23.3 million, or 28.1%, from $83.2 million in the prior year [317]. - Non-interest income rose by $233,000, or 3.4%, to $7.0 million for the quarter ended June 30, 2020, primarily from gains on loan sales and changes in fair value of equity securities [313]. - Non-interest income was $13.4 million for the six months ended June 30, 2020, an increase of $587,000, or 4.6%, from $12.8 million for the same period in 2019 [323]. Asset and Liability Management - Total assets increased by $774.5 million, or 9.5%, to $9.0 billion at June 30, 2020, from $8.2 billion at December 31, 2019 [297]. - Total liabilities increased by $716.0 million, or 9.9%, to $7.9 billion at June 30, 2020, mainly due to a $935.3 million increase in total deposits [304]. - Total stockholders' equity increased by $58.5 million, or 6.0%, to $1.0 billion at June 30, 2020, driven by net income and additional capital from the Roselle merger [305]. - The Company’s strategy for liabilities focuses on maintaining a stable funding base through core deposit accounts [350]. - The company maintains a stable funding base by focusing on core deposit accounts, which aids in retaining maturing time deposit accounts [350]. Loan Performance and Provisions - Loans receivable, net, increased by $430.0 million, or 7.0%, to $6.6 billion at June 30, 2020, with $467.0 million attributed to the SBA Paycheck Protection Program [300]. - The provision for loan losses was $5.7 million for the quarter ended June 30, 2020, an increase of $5.6 million from the same quarter in 2019, due to economic conditions related to COVID-19 [312]. - The provision for loan losses rose to $15.3 million for the six months ended June 30, 2020, an increase of $14.8 million from $548,000 in the same period of 2019 [322]. - Non-performing loans totaled $13.5 million, or 0.20% of total gross loans, as of June 30, 2020, compared to $6.7 million, or 0.11%, at December 31, 2019 [325]. - The allowance for loan losses was $74.0 million, or 1.12% of total loans, at June 30, 2020, up from $61.7 million, or 1.00%, at December 31, 2019 [328]. - The Company granted $768.0 million in commercial loan modifications and $195.0 million in consumer-related loan modifications due to COVID-19 [329]. Capital Adequacy - As of June 30, 2020, the Company and its subsidiary Bank exceeded all capital adequacy requirements, maintaining a total capital to risk-weighted assets ratio of at least 10.0% [362]. - As of June 30, 2020, total capital to risk-weighted assets was $1,092,838, representing a ratio of 18.22%, exceeding the minimum requirement of 8.00% [364]. - Tier 1 capital to risk-weighted assets was $1,006,951, with a ratio of 16.79%, above the required 6.00% [364]. - Common equity tier 1 capital to risk-weighted assets was $999,734, equating to 16.67%, surpassing the minimum of 4.50% [364]. - The company's total capital to risk-weighted assets increased from $1,061,555 (17.25%) at December 31, 2019, to $1,092,838 (18.22%) at June 30, 2020 [364]. - The Bank's total capital to risk-weighted assets ratio was 15.58% as of June 30, 2020, above the 8.00% minimum [368]. Interest Rate Sensitivity - The Company’s net interest income would increase by approximately 2.90% if interest rates were to rise by 200 basis points over a one-year period [357]. - In the event of a 200 basis point increase in interest rates, the net portfolio value (NPV) is projected to decrease by 4.69% [358]. - A 200 basis point increase in interest rates is projected to increase net interest income by approximately 2.90% [358]. - A 100 basis point decrease in interest rates is expected to decrease net interest income by 3.25% [358]. - As of June 30, 2020, the net portfolio value (NPV) is projected to decrease by 4.69% with an immediate and sustained 200 basis point increase in interest rates [358]. Management and Controls - The company's disclosure controls and procedures were deemed effective as of June 30, 2020, following an evaluation by management [370]. - The Company’s management concluded that the disclosure controls and procedures were effective as of June 30, 2020 [370]. - The Asset/Liability Committee regularly reviews the impact of interest rate changes on net interest income and net income [349].
umbia Financial(CLBK) - 2020 Q2 - Quarterly Report