The Company reported net income of $113.6 million for the year ended December 31, 2023, and diluted EPS of $6.73. For the same period in 2022 the Company reported net income of $99.1 million and diluted EPS of $5.87.
The year ended December 31, 2023 was highlighted by several significant items:
| ● | Record annual net income of $113.6 million, or $6.73 per diluted share; |
| ● | Record adjusted net income (non-GAAP) of $115.1 million, or $6.82 per diluted share; |
| ● | Record capital markets revenue of $92.1 million, an increase of $50.8 million, or 123%; |
| ● | Loan and lease growth of 11% prior to loan securitizations; |
| ● | Tangible book value (non-GAAP) per share increased $6.99, or 19%; and |
| ● | Increased TCE/TA ratio (non-GAAP) by 82 basis points to 8.75%. |
Following is a table that represents the various net income measurements for the years ended December 31, 2023 and 2022.
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| · · · Year Ended December 31, |
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| · · · 2023 · · 2022 |
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| · · · (dollars in thousands, except per share data) |
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| Net income | | | | $113,558 | | | $99,066 |
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| Diluted earnings per common share | | | | $6.73 | | | $5.87 |
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| Weighted average common and common equivalent shares outstanding | | | | 16,866,391 | | | 16,890,007 |
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The Company reported adjusted net income (non-GAAP) of $115.1 million, with adjusted diluted EPS of $6.82. See section titled “GAAP to Non-GAAP Reconciliations” for additional information. Adjusted net income for the year excludes a number of non-recurring items, after-tax, as set forth in the “GAAP to Non-GAAP Reconciliation” section.
Following is a table that represents the major income and expense categories.
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| · · · Year Ended December 31, |
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| · 2023 · 2022 |
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| · · · (dollars are in thousands) |
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| | | | | | | | |
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| Net interest income | | | | $221,006 | | | $231,120 |
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| Provision for credit losses | | | | 16,539 | | | 8,284 |
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| Noninterest income | | | | 132,684 | | | 80,729 |
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| Noninterest expense | | | | 210,531 | | | 190,016 |
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| Federal and state income tax expense | | | | 13,062 | | | 14,483 |
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| Net income | | | | $113,558 | | | $99,066 |
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The following are some noteworthy developments in the Company’s financial results:
| ● | Net interest income decreased $10.1 million, or 4.4%, in 2023 compared to the prior year. The decrease in 2023 was primarily due to an increase in the cost of funds on interest-bearing liabilities outpacing the increase in our total earning assets. |
| ● | Provision expense increased $8.3 million when comparing 2023 to 2022. The increase in 2023 was due to strong loan growth. See the “Provision for Credit Losses” section of this report for additional details. |
| ● | Noninterest income increased $52.0 million, or 64.4% when compared to the prior year. The increase in 2023 was primarily attributable to higher capital markets revenue from swap fees as strong demand for affordable housing by our tax credit lending clients continued. The demand for low-income housing remains healthy and the economics associated with these tax credit projects continue to be favorable. The Company has a strong pipeline for this business and expects it to continue to be a solid source of fee income in 2024. |
| ● | Noninterest expense increased $20.5 million, or 10.8%, in 2023 compared to the prior year, primarily due to a full year of Guaranty Bank expenses in 2023, compared to nine months of operating expenses in 2022, due to the acquisition of Guaranty Bank on April 1, 2022. In addition, the Company had increased variable incentive compensation due to the impact of record capital markets performance in 2023. See Note 2 of the Consolidated Financial Statements for further discussion. |
