total assets – Free Bassuk http://freebassuk.com/ Mon, 14 Mar 2022 17:02:04 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://freebassuk.com/wp-content/uploads/2021/07/icon.png total assets – Free Bassuk http://freebassuk.com/ 32 32 IX vs. BX: Which Stock Should Value Investors Buy Now? https://freebassuk.com/ix-vs-bx-which-stock-should-value-investors-buy-now/ Mon, 14 Mar 2022 17:02:04 +0000 https://freebassuk.com/ix-vs-bx-which-stock-should-value-investors-buy-now/ IInvestors looking for stocks in the financial services – miscellaneous services sector might consider Orix (IX) or Blackstone Inc. (BX). But which of these two stocks offers investors the best value opportunity right now? Let’s take a closer look. Everyone has their own methods for finding high-value opportunities, but our model includes pairing an impressive […]]]>

IInvestors looking for stocks in the financial services – miscellaneous services sector might consider Orix (IX) or Blackstone Inc. (BX). But which of these two stocks offers investors the best value opportunity right now? Let’s take a closer look.

Everyone has their own methods for finding high-value opportunities, but our model includes pairing an impressive score in the Value category of our Style Scores system with a strong Zacks ranking. The proven Zacks ranking emphasizes companies with positive estimate revision trends, and our style scores highlight stocks with specific characteristics.

Currently, Orix sports a Zacks rank of #2 (Buy), while Blackstone Inc. has a Zacks rank of #3 (Hold). Investors should feel comfortable knowing that IX has likely seen a stronger improvement in its earnings outlook than BX recently. However, value investors will care about much more than that.

Value investors analyze a variety of traditional and time-tested metrics to help find companies they believe are undervalued at their current stock price level.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company’s fair value.

IX currently has a forward P/E ratio of 8.32, while BX has a forward P/E of 21.30. We also note that IX has a PEG ratio of 0.33. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. BX currently has a PEG ratio of 0.89.

Another notable valuation metric for IX is its P/E ratio of 0.78. Investors use the P/E ratio to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. In comparison, BX has a P/B of 3.68.

These measures, and several others, help IX earn an A value rating, while BX received a C value rating.

IX ranks above BX thanks to its strong earnings outlook, and based on these valuation numbers, we also believe that IX is the superior value option at this time.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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LGT sees record asset inflows in 2021 https://freebassuk.com/lgt-sees-record-asset-inflows-in-2021/ Mon, 14 Mar 2022 07:58:00 +0000 https://freebassuk.com/lgt-sees-record-asset-inflows-in-2021/ LGT, headquartered in Liechtenstein, reported an increase in profits for 2021 alongside a record influx of customer assets. LGT posted a group profit of 352.8 million Swiss francs ($377.1 million) in 2021, according to its annual results, marking a 21% year-on-year increase. This was partly supported by record net asset inflows of CHF 24.8 billion […]]]>

LGT, headquartered in Liechtenstein, reported an increase in profits for 2021 alongside a record influx of customer assets.

LGT posted a group profit of 352.8 million Swiss francs ($377.1 million) in 2021, according to its annual results, marking a 21% year-on-year increase.

This was partly supported by record net asset inflows of CHF 24.8 billion (more than 10% increase), which contributed to LGT’s total assets under management increasing by 19% to 285.8 billion francs.

Revenue based on services

While net interest income (down 11% to 204.5 million francs), trading activities and other operating income (down 21% to 345 million francs) fell in 2021 , revenue from services increased by 33% to 1.58 billion francs.

This development is explained by revenues from a higher asset base in portfolio management, brokerage activities and higher performance-based revenues.

Asian moose

According to LGT, it started 2022 with strong momentum, supported by its recent expansion into Asia where it opened a new wealth management office in Tokyo and acquired Australia’s Crestone Wealth Management late last year.

“LGT’s centenary was a good year for us in every way,” said LGT’s chairman HSH Prince Max von und zu Liechtenstein.

“Despite the ongoing pandemic, we continued to serve our clients as a reliable partner and further expanded our investment offering, which had a very positive impact on our results. Additionally, we have grown our international presence in various regions, from Europe and Japan to Australia.”

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The case for a multi-pronged approach to impact https://freebassuk.com/the-case-for-a-multi-pronged-approach-to-impact/ Fri, 04 Mar 2022 16:26:07 +0000 https://freebassuk.com/the-case-for-a-multi-pronged-approach-to-impact/ Headlines about the rise of sustainable investing have been seemingly all over the place in recent years. Between 2018 and 2020 alone, total US assets applying environmental, social and governance (ESG) criteria increased by 42%. Bloomberg analysts to predict that global ESG assets will exceed $50 trillion by 2025. Amid this surge in activity, one […]]]>

Headlines about the rise of sustainable investing have been seemingly all over the place in recent years. Between 2018 and 2020 alone, total US assets applying environmental, social and governance (ESG) criteria increased by 42%. Bloomberg analysts to predict that global ESG assets will exceed $50 trillion by 2025.

Amid this surge in activity, one question lingers: is this reallocated capital really making a difference? As industry onlookers (rightly) decry the cynicism greenwashingand so serious projections about the scale of the climate crisis, there is an ongoing debate about the optimal and most effective approach for environmentally and socially conscious investors. Let’s dive into three of those most commonly used by Ethics clients to respond to ESG issues:

Investment

One approach, often referred to as impact investing, is to actively seek out companies whose mission and business activities are perceived to benefit the environment, society, or both. An investor wanting to accelerate the adoption of “green” technologies could build a portfolio that intentionally directs capital to pioneering companies in renewable energy, electric vehicles, sustainable agriculture or recycling solutions.

Of course, it’s important that investors have visibility into the methodology and data used to assess a company’s sustainability credentials. Otherwise, they run the risk of unwittingly pumping money into a company that only takes cosmetic steps to appear more sustainable, or has positive impacts in one area but a poor track record elsewhere. For example, an investor might be dismayed to discover that they have allocated capital to companies that are leading the way in reducing carbon emissions, only to find those same companies involved in gross human rights abuses.

Divestment

Much of the sustainable investing conversation to date has focused on divestment, also known as negative selection. This process involves the use of a specific set of criteria, usually informed by the investor’s own values ​​and preferences, to determine which companies, sectors or business activities should be excluded from a portfolio. Some investors might choose to avoid entire sectors, while others might exclude a handful of stocks that have a poor track record on certain issues relative to their peers.

Evidence suggests that this exercise is more than just a feel-good business and can, in fact, protect investors from undue risk. Like various real world examples have illustrated, the failure of companies to adequately manage environmental, social and governance concerns can expose them to reputational, regulatory and physical issues that can have significant financial consequences.

The divestment move is actually aimed at putting downward pressure on stocks, making it harder (and therefore more expensive) for some companies to raise new capital. Activists have long called for big institutions to shed fossil fuel investments and their efforts could pay off, as research indicated that oil companies are finding it increasingly difficult to obtain financing. In addition, high-profile divestment campaigns can have a snowball effect: where an influential institution works, others can follow.

Divestment has certainly served as an important advocacy tool, stimulating important conversations about the role of investors and the broader financial services industry in promoting more sustainable outcomes. However, despite its ability to capture widespread attention, divestment is only one potential way to effect real change. Recognizing this reality, some values-aligned investors are choosing not to walk away from all bad corporate actors, but in many cases to stay firmly in the fight.

Shareholder engagement

As mentioned above, some ESG investors are reconsidering divestment and instead consciously choose to hold their shares in “problem” companies. Although it may seem counter-intuitive to some, there are increasingly school of thought that active shareholder engagement is essential to achieving positive social and environmental outcomes. Support for this approach, especially when it comes to catalyzing climate action, is growing following high-profile statements shareholder campaigns performed in 2021.

The main idea behind shareholder engagement is that as a partial owner of a company, an investor has a say in how it conducts its affairs. This usually takes the form of voting on shareholder proposals (or resolutions) that cause the company’s management to take a specific action or disclose certain information. These proposals are put to a vote at the company’s annual general meeting, with most investors choosing not to attend in person, but instead filling out a proxy ballot that authorizes another party to vote on their behalf. .

Proponents of shareholder engagement might argue that the divestment movement does little to address the underlying economic problems of “dirty” industries such as big oil. In other words, for every fossil fuel stock abandoned by an investor, there is more than likely a less climate-conscious investor willing to hang on for a favorable price. In effect, this means that the environmentally conscious vendor has given up their place at the table and can no longer use it to incentivize companies to adopt more responsible behaviors. And it is indeed encouraging evidence that shareholder engagement can lead to more positive corporate actions, in part because companies respond to targeted, specific demands rather than broad societal pressure.

Institutional investors, who own most of the shares of companies and therefore wield outsized influence, are more active in proxy voting than individual investors. But these institutional investors often manage assets on behalf of retail investors and come under increasing pressure to align voting activity with their public engagements on burning issues such as climate change. Indeed, in 2021, investors demonstrated record support for environmental and social shareholder proposals, demanding more transparency on political donations and corporate lobbying, diversity and inclusion initiatives, and efforts to address greenhouse gas emissions.

Where do we go from here?

There’s also a lot to be said for the role of regulatory oversight when it comes to tackling such big and far-reaching issues as climate change. However, in the absence of substantial government intervention, it is up to investors to weigh the merits of the choices available to them: direct more capital to impact leaders, ditch bad actors altogether, and/or use their voice as shareholders to influence key issues.

Given the lack of compelling evidence that a singular method represents a panacea, we see impact-minded individuals taking a multi-pronged, “carrot and stick” approach to sustainable investing. Simply investing in ‘good’ companies can be tricky, because even if a company may be ‘doing well’ on carbon emissions, for example, it may come up against other questionable practices. Merely divesting from “bad” companies ignores the potential improvements an industry can make and silences an investor’s ability to speak their mind. One thing is clear, however: sustainability investors of all stripes are pushing companies to assess their impacts on people and the planet.

We are at a critical juncture in our fight against pressing issues such as climate change, and the gravity of the moment demands that we use all the tools at our disposal. While the jury has chosen the most effective approach, what we do know is that we cannot sit back and do nothing.

Alex Laipple is Head of Business Development and Emma Smith is Director of Communications, at Ethics. Ethic is an independent provider of custom direct indexing solutions. Its scalable platform enables financial advisors to deliver passive equity portfolios that meet growing investor demand for personalized, values-aligned solutions.

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I View Splunk as a Business, Not an Investment: Here’s Why https://freebassuk.com/i-view-splunk-as-a-business-not-an-investment-heres-why/ Thu, 03 Mar 2022 15:30:00 +0000 https://freebassuk.com/i-view-splunk-as-a-business-not-an-investment-heres-why/ One of the former “Cloud Kings” who had fallen on hard times lately, Splunk (SPLK) hosted a big “news” night on Wednesday night, less than a month after the Wall Street Journal reported that Cisco Systems (CSCO) had made a run at the company, but the subject was no longer under discussion. The company reported […]]]>

One of the former “Cloud Kings” who had fallen on hard times lately, Splunk (SPLK) hosted a big “news” night on Wednesday night, less than a month after the Wall Street Journal reported that Cisco Systems (CSCO) had made a run at the company, but the subject was no longer under discussion. The company reported better-than-expected financial performance in the fourth quarter and finally named a new CEO. The company had spent months with board chairman Graham Smith as interim CEO as the search continued toward a conclusion.

For the fourth quarter, Splunk posted GAAP EPS of a loss of $0.88 per share, better than expected as it includes or rather does not adjust for stock-based compensation, amortization of intangible assets, restructuring charges or non-cash interest expense related to convertible senior notes. On an adjusted basis, the firm posted EPS of $0.67, which crushed it. Splunk also generated $901.119 million in revenue, easily beating Wall Street (by over $100 million) and enough for 20.9% annual growth.

A new boss

Splunk also announced that Gary Steele has been named the company’s new chief executive officer and member of the board of directors, effective April 11. Steele has over 30 years of experience and experience scaling SaaS operations, while building multi-billion dollar businesses. Steel was the founding CEO of Proofpoint, growing that company from start-up to publicly traded SaaS provider for some major large-cap clients. Prior to that, Steele served as CEO of Portera and held leadership positions at Sybase, Sun Microsystems and Hewlett-Packard (HPE).

Commenting on the hire, Graham Smith said, “Gary is a visionary leader whose expertise in software and cybersecurity, his deep understanding of SaaS and recurring revenue models, and his unwavering commitment to driving innovation and customer success globally will be invaluable to Splunk on our journey. to $5 billion (in annual revenue) and beyond.” In response, Steele said… “Splunk has incredible talent and an innovative, customer-centric philosophy. I can’t wait to get started and earn the right to call myself Splunker.” Smith will return to his sole role as chairman as soon as Steele joins the company.

Beyond the headlines

For the quarter, Cloud ARR (annual recurring revenue) grew 65% to $1.34 billion. Total ARR increased by 32% to $3.12 billion. Cloud revenue grew 69% to $289 million. The total number of customers generating a cloud ARR greater than $1 million increased by 70% to 317. The total number of customers generating a total ARR greater than $1 million increased by 32% to 675.

For the full year, cloud revenue grew 70% to $944 million. Total revenue generated increased by 20% to $2.67 billion. Operating cash flow printed at $128 million, producing $117 million of free cash flow.

During the quarter, Splunk joined the US Cybersecurity and Infrastructure Security Agency’s Joint Cyber ​​Security Collaborative and won the Naval Information Warfare Systems Command Award.

Advice

For the current quarter, Splunk is forecasting revenue of $615 million to $635 million, bringing the low end above the $609 million Wall Street was seeking. The adjusted operating margin should be between -20% and -25%.

For the full year, Cloud ARR is estimated to be a minimum of $2 billion, with a total ARR of approximately $3.9 billion. Total revenue is projected between $3.25 billion and $3.3 billion, versus a consensus of just over $3 billion. The adjusted operating margin for the full year should be between 0% and +2%. Cash flow from operations is expected to reach or exceed $400 million.

Balance sheet

Over the past 12 months, the company’s net cash position has declined, not by much, to $1.714 billion. This reduction is more than offset by an increase in accounts receivable, bringing current assets slightly to $3.276 billion. Current liabilities are $2.098 billion, which is up quite significantly, due to the growth in deferred revenue. At a current ratio of 1.56, I don’t see a brewing problem in Splunk to meet all short to medium term obligations. Total assets of $5.79 billion, which is down, still outweighs total liabilities less equity of $5.568 billion. This total liability less equity count was up 30% from a year ago, driven by growth in net convertible senior notes. I know this is common practice on Wall Street. You know that kind of non-routine action on the balance sheet, even if it won’t matter today or even this year, makes me uncomfortable.

Wall Street

By my count, six sell-side analysts rated five stars by TipRanks have given their opinion on Splunk since the quarterly earnings release and new CEO announcement. We have three “buy” or “equivalent buy” ratings and three “hold” or “equivalent hold” ratings. The average target price of the six is ​​equal to $147. The highest target among these six is ​​$175 (Matthew Hedberg of RBC Capital), while the lowest target is $130 (Gregg Moskowitz of Mizuho Securities).

Table

At first glance, there is something to like about this painting. The stock is anything but technically overbought. It would seem that if the stock can take and then hold the 50-day SMA at $117.52 and the 21-day EMA at $118.35, then a serious run can be made to the 200-day SMA ($134.81 ) and at the 38.2% Fibonacci retracement level ($132.65). ) of the massive sale from November to December. By the time SPLK gets there, these two resistance levels might be about to merge into one.

My problem with this chart is the action experienced since December. Let me show you what I mean…

Do you see the foundation of a base pattern that has formed a flat base? Not really, no ? Do you see a “rising wedge”? I think I can. A rising wedge for new kids is a bearish pattern even though the underlying security increases as the pattern builds. The explosive move most often when you see a wedge going up or down is in the opposite direction.

My thought

For two reasons… the possible rising wedge above and the lack of an attractive long-term balance sheet (in my opinion), I would consider SPLK a trader, not an investment, at least not as long as we haven’t seen new CEO Gary Steele in action. It’s not that I don’t think Splunk can pull it off, it’s just that they’re going to have to show me that they can.

(CSCO is a holding company of Member Club Action Alerts PLUS. Want to be alerted before AAP buys or sells this stock? Learn more now.)

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Truist Releases 2021 Social Bond Impact Report https://freebassuk.com/truist-releases-2021-social-bond-impact-report/ Wed, 02 Mar 2022 15:53:58 +0000 https://freebassuk.com/truist-releases-2021-social-bond-impact-report/ Published an hour ago Proposed by Truist CHARLOTTE, NC, March 2, 2022 /CSRwire/ — Truist Financial Corporation (NYSE: TFC) today announced the release of its 2021 report Social Bond Impact Report, which details the investments made from the proceeds of the bond and underlines the company’s commitment to advancing its environmental, social and governance (ESG) […]]]>

Published an hour ago

Proposed by Truist

CHARLOTTE, NC, March 2, 2022 /CSRwire/ — Truist Financial Corporation (NYSE: TFC) today announced the release of its 2021 report Social Bond Impact Report, which details the investments made from the proceeds of the bond and underlines the company’s commitment to advancing its environmental, social and governance (ESG) objectives. In March 2021, Truist issued its first social bond for $1.25 billion, with the net proceeds allocated to new and existing eligible social programs, including investments in affordable housing to provide stability for individuals and families. . It was the first social bond issued by a regional bank in the United States

“As a goal-oriented financial services company, issuing our first social bond was another example of Truist’s focus on solving the social challenges facing our communities,” said Ellen Fitzsimmons, Legal Director and Head of Public Affairs. “Ensuring access to adequate, safe and affordable housing is a fundamental part of our commitment to inspiring and building better lives and communities, and we look forward to continuing to play a role in driving permanent and measurable change. for all we serve.

Truist’s social bond enjoyed broad participation from over 120 investors, including high-quality ESG dedicated portfolios, with a 2.7x oversubscribed order book. The social bond generated $1.248 billion in net proceeds, creating 267 affordable housing projects and 22,000 affordable units in 15 states in the Mid-Atlantic, Southeast and Texas.

Truist issued the social bond in accordance with the Truist ESG Bond Framework. More information can be found in full Social Bond Impact Report.

About Truist

Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Formed by a historic merger of equals, Truist holds leading market share in many high-growth markets nationwide. The company offers a wide range of services, including retail, small business and corporate banking; asset Management; capital markets; commercial real estate; corporate and institutional banking; Assurance; mortgage; Payments; specialized loans; and wealth management. Headquartered in Charlotte, North Carolina, Truist is one of the top 10 U.S. commercial banks with total assets of $541 billion as of December 31, 2021. Truist Bank, Member FDIC. Learn more about Truist.com.

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Truist

Truist

About Truist
Truist Financial Corporation (NYSE: TFC) is a purpose-driven financial services company committed to inspiring and building better lives and communities. Formed by the historic merger of equals of BB&T and SunTrust, Truist holds leading market share in many high-growth markets nationwide. The company offers a wide range of services, including retail, small business and corporate banking; asset Management; capital markets; commercial real estate; corporate and institutional banking; Assurance; mortgage; Payments; specialized lending and wealth management. Based in Charlotte, North Carolina, Truist is one of America’s top 10 commercial banks. Truist Bank, Member FDIC. Learn more about Truist.com.

More than Truist

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Russian economy shakes after sanctions imposed by US and Europe https://freebassuk.com/russian-economy-shakes-after-sanctions-imposed-by-us-and-europe/ Mon, 28 Feb 2022 23:21:32 +0000 https://freebassuk.com/russian-economy-shakes-after-sanctions-imposed-by-us-and-europe/ European and American officials had announced most of the sanctions on Saturday, but many details were not released until Monday, when the restrictions were implemented. Additional measures have also been deployed. The story continues under the ad Under the new regime, all people in the United States and the European Union are banned from trading […]]]>

European and American officials had announced most of the sanctions on Saturday, but many details were not released until Monday, when the restrictions were implemented. Additional measures have also been deployed.

Under the new regime, all people in the United States and the European Union are banned from trading with Russia’s central bank. The sanctions also apply to the Russian Ministry of Finance and its sovereign wealth fund. The United States and its allies were executing a hastily assembled strategy designed to squeeze the Russian economy and make it very difficult for Russian leaders to mine the money.

Australian Prime Minister Scott Morrison said his country would work with NATO partners in Europe to help fund the supply of lethal weapons to Kiev. (AP)

The restrictions amount to stifling Russia from the international financial system.

Private companies have joined governments in Russia’s isolation. Facebook, Google and YouTube have announced plans to block Russian state media from monetizing their platforms. Twitter announced on Monday that it would start adding tags to tweets containing content from Russian state media websites. Oil giant Shell on Monday announced plans to shed its joint ventures with Russian gas giant Gazprom, making it the third major oil company to announce such a move. FedEx and UPS announced they were halting deliveries to Russia and Ukraine, and US and foreign governments moved to block much of Russia’s banking system from major international markets.

The EU also announced that it would close airspace to Russian planes and support Ukraine’s arms purchase.

The United States and its allies have not stopped Russia from exporting energy, however, as Europe in particular is heavily dependent on Russian gas.

The US government said it was granting an exemption allowing ‘certain energy-related transactions’ with Russia’s central bank, as the West tried to continue the flow of Russian energy exports to support the European economy and maintain gas prices.

The US Treasury Department also announced sanctions on Monday morning against entities linked to the Russian sovereign wealth fund, including its management company and one of the sovereign wealth fund’s subsidiaries. It also imposed sanctions on the manager of this management company.

“The unprecedented action we are taking today will significantly limit Russia’s ability to use assets to finance its destabilizing activities and will target funds [Russian President Vladimir] Putin and his entourage depend on enabling his invasion of Ukraine,” Treasury Secretary Janet L. Yellen said in a statement. “Today, in coordination with our partners and allies, we are delivering on key commitments to restrict Russia’s access to these valuable resources.”

Two senior administration officials, speaking on condition of anonymity to describe the White House announcement, said Monday the freeze was immediately effective and intended to prevent Russia from recalling its international reserves from the world. whole.

The sanctions reflect the extraordinary outpouring of support for Ukraine in the West, but they also carry the risk of a further escalation of hostilities with Moscow. Putin has responded to Western statements in recent days by putting the country’s nuclear forces on high alert. Ukrainian and Russian officials held their first diplomatic talks since the start of the invasion on Monday, and they plan to continue talks in the coming days.

The banking restrictions are arguably the most severe form of economic retaliation ever approved by Western powers in response to Russia’s attack on Ukraine. They aim to prevent Putin from using his country’s large financial reserves – totaling more than $600 billion – to stabilize Russia’s economy in the face of further sanctions and economic measures imposed by the West.

As of June 30 last year, 32% of Russia’s foreign exchange reserves were in euros and 16% in US dollars, according to its central bank. About 7% was in sterling, 13% in Chinese renminbi and 22% in monetary gold. The rest was held in other currencies.

“All of a sudden, the United States and Europe have rendered Putin’s war chest useless. … The fact that the United States and Europe have done this in a unified way sends a crystal clear message that Russia will face dramatic costs as long as Putin’s war of aggression continues,” he said. Edward Fishman, former sanctions chief for Russia and Europe at the State Department. “This action represents a sea change in US and European strategy. Just 72 hours ago, a step like this was unthinkable.

Even before Saturday, the United States had announced sanctions targeting almost 80% of the total assets of the Russian banking sector. His measures include separating Russia’s largest bank from the US financial system, in addition to restricting access to technology that could be used to help Russian companies. US sanctions have also targeted members of Putin’s inner circle and other business leaders in Russia.

The effect was dramatic. Rating agency S&P has downgraded Russia’s debt to junk status, making it even more expensive for Russia to borrow money and forcing some investors to offload debt.

Putin’s bank reserves were intended to cushion the impact of such a blow. “The announced measures will undermine Russia’s ability to support the rouble,” said Richard Nephew, senior research fellow at Columbia University. “The Russians will not be able to defend the currency easily and its value will fall.”

Some critics wondered how Putin might react to the attack on Russia’s economy. Mark Weisbrot, a liberal economist and director of the Center for Economic and Policy Research, said imposing sanctions on reservations could lead to “economic collapse”.

“The Biden administration must defuse this conflict and move toward a diplomatic solution before it’s too late,” Weisbrot said. “[Ukrainian President Volodymyr] Zelensky wants to negotiate without preconditions; Washington should do the same.

But senior administration officials have defended their strategy as a necessary response to Putin’s aggression. They also said they were closely watching Belarus’ potential support for the war effort, which could trigger separate economic restrictions for that country.

Adam Smith, a partner at Gibson Dunn and a former sanctions official in the Obama administration, said the attack on Russia’s central bank reflects how quickly events unfolded in Eastern Europe. Smith pointed out that such moves have generally been brushed aside because central banks play such a crucial role in a country’s economy, noting that pursuing them includes “serious and potentially unknowable side effects.” If so, Smith said, it’s possible the sanctions will make it harder for Europe to buy oil and gas while hurting the average Russian economically.

“It was always seen as almost irrelevant — the thing to do when sanctions and diplomacy have seemingly run out,” Smith said. “The fact that the international community has been willing to go this far and suffer the consequences…shows how far this crisis has gone in its first week alone.”

Mary Ilyushina, Jeanne Whalen, Steven Mufson and Cat Zakrzewski contributed to this report.

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$21.52 million in sales expected for Capital Southwest Co. (NASDAQ:CSWC) this quarter https://freebassuk.com/21-52-million-in-sales-expected-for-capital-southwest-co-nasdaqcswc-this-quarter/ Sun, 27 Feb 2022 01:41:04 +0000 https://freebassuk.com/21-52-million-in-sales-expected-for-capital-southwest-co-nasdaqcswc-this-quarter/ Equity research analysts expect Capital Southwest Co. (NASDAQ: CSWC – Get a rating) will announce revenue of $21.52 million for the current fiscal quarter, according to Zacks. Four analysts have released Capital Southwest earnings estimates, with estimates ranging from $21.32 million to $21.63 million. Capital Southwest posted sales of $17.17 million in the same quarter […]]]>

Equity research analysts expect Capital Southwest Co. (NASDAQ: CSWC – Get a rating) will announce revenue of $21.52 million for the current fiscal quarter, according to Zacks. Four analysts have released Capital Southwest earnings estimates, with estimates ranging from $21.32 million to $21.63 million. Capital Southwest posted sales of $17.17 million in the same quarter last year, suggesting a positive year-over-year growth rate of 25.3%. The company is expected to release its next quarterly results on Tuesday, May 24.

According to Zacks, analysts expect Capital Southwest to report full-year sales of $82.70 million for the current fiscal year, with estimates ranging from $82.51 million to $82.82 million. dollars. For the next fiscal year, analysts expect the company to post sales of $92.36 million, with estimates ranging from $89.83 million to $95.95 million. Zacks sales calculations are an average based on a survey of research analysts who provide coverage for Capital Southwest.

Capital Southwest (NASDAQ:CSWC – Get a rating) last released its results on Monday, January 31. The asset manager reported earnings per share of $0.51 for the quarter, beating the Zacks consensus estimate of $0.47 by $0.04. Capital Southwest had a net margin of 42.58% and a return on equity of 10.50%. During the same quarter last year, the company posted EPS of $0.45.

(A d)

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Several stock analysts have recently released reports on the company. JMP Securities reiterated a “buy” rating on Capital Southwest shares in a Wednesday, November 3, research report. TheStreet downgraded shares of Capital Southwest from a “b-” rating to a “c” rating in a research memo on Friday, February 4. Ultimately, Zacks Investment Research downgraded Capital Southwest from a “buy” rating to a “hold” rating in a Monday, Feb. 7 research report. Three analysts gave the stock a hold rating and three gave the company a buy rating. Based on data from MarketBeat, the stock has an average rating of “Buy” and an average price target of $26.50.

Hedge funds have recently changed their positions in the stock. BlackRock Inc. increased its position in Capital Southwest by 7.6% in the 4th quarter. BlackRock Inc. now owns 160,722 shares of the asset manager valued at $4,063,000 after acquiring an additional 11,416 shares last quarter. Virtu Financial LLC bought a new position in shares of Capital Southwest in the fourth quarter worth $392,000. Advisors Asset Management Inc. increased its stake in shares of Capital Southwest by 6.0% in the fourth quarter. Advisors Asset Management Inc. now owns 185,769 shares of the asset manager worth $4,696,000 after purchasing an additional 10,557 shares in the last quarter. Marshall Wace LLP increased its stake in shares of Capital Southwest by 109.8% in the fourth quarter. Marshall Wace LLP now owns 52,310 shares of the asset manager worth $1,322,000 after purchasing an additional 27,378 shares in the last quarter. Finally, DE Shaw & Co. Inc. bought a new position in shares of Capital Southwest in the fourth quarter at a value of $231,000. 23.94% of the shares are currently held by institutional investors.

Stock CSWC opened at $24.48 on Friday. The company has a debt ratio of 0.56, a quick ratio of 0.10 and a current ratio of 0.10. Capital Southwest has a 52-week low of $20.70 and a 52-week high of $28.41. The company’s fifty-day moving average is $24.94 and its 200-day moving average is $26.12. The company has a market capitalization of $585.81 million, a P/E ratio of 15.90 and a beta of 1.17.

The company also recently announced a quarterly dividend, which will be paid on Thursday, March 31. Shareholders of record on Tuesday, March 15 will receive a dividend of $0.48. This is a boost from Capital Southwest’s previous quarterly dividend of $0.47. This represents a dividend of $1.92 on an annualized basis and a dividend yield of 7.84%. The ex-dividend date is Monday, March 14. Capital Southwest’s dividend payout ratio is currently 122.08%.

About the Southwest Capital (Get a rating)

Capital Southwest is a public business development company with total assets of $496 million as of June 30, 2010. We provide patient capital to exceptional companies with significant growth potential. As a public company, we have the ability to hold investments indefinitely, which has provided the management teams of our holdings with a stable ownership platform since our inception in 1961.

Read more

Get a Free Copy of Zacks Research Report on Capital Southwest (CSWC)

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Earnings history and estimates for Capital Southwest (NASDAQ: CSWC)

This instant alert was powered by MarketBeat’s narrative science technology and financial data to provide readers with the fastest and most accurate reports. This story was reviewed by MarketBeat’s editorial team prior to publication. Please send questions or comments about this story to [email protected]

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]]>
Famous brands (JSE:FBR) could risk shrinking as a business https://freebassuk.com/famous-brands-jsefbr-could-risk-shrinking-as-a-business/ Fri, 25 Feb 2022 06:20:12 +0000 https://freebassuk.com/famous-brands-jsefbr-could-risk-shrinking-as-a-business/ When researching a stock for investment purposes, what can tell us that the company is in decline? More often than not we will see a decline to return to on capital employed (ROCE) and a decrease amount capital employed. This reveals that the company is not increasing shareholder wealth because returns are falling and its […]]]>

When researching a stock for investment purposes, what can tell us that the company is in decline? More often than not we will see a decline to return to on capital employed (ROCE) and a decrease amount capital employed. This reveals that the company is not increasing shareholder wealth because returns are falling and its net asset base is shrinking. And from a first reading, things don’t look very good to Famous brands (JSE:FBR), so let’s see why.

Understanding return on capital employed (ROCE)

Just to clarify if you’re not sure, ROCE is a measure of the pre-tax income (as a percentage) that a business earns on the capital invested in its business. Analysts use this formula to calculate it for famous brands:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

0.29 = R626m ÷ (R3.0b – R835m) (Based on the last twelve months to August 2021).

So, Famous Brands has a ROCE of 29%. In absolute terms, this is an excellent return and is even better than the hotel industry average of 7.2%.

Check out our latest analysis for famous brands

JSE:FBR Return on Capital Employed February 25, 2022

Historical performance is a great starting point when researching a stock. So above you can see the Famous Brands ROCE gauge compared to its past returns. If you want to see how Famous Brands have performed in the past in other metrics, you can check out this free chart of past profits, revenue and cash flow.

What can we say about the ROCE trend of famous brands?

Caution should be exercised with famous brands, as yields are on the decline. To be more precise, the ROCE was 43% five years ago, but since then it has fallen significantly. In addition to this, it should be noted that the amount of capital used within the company remained relatively stable. Companies that exhibit these attributes tend not to shrink, but they can be mature and face pressure on their margins from the competition. If these trends continue, we don’t expect Famous Brands to turn into a multi-bagger.

Similarly, Famous Brands reduced its current liabilities to 28% of total assets. This could partly explain why ROCE fell. Additionally, it may reduce some aspects of risk to the business, as the business’s suppliers or short-term creditors now fund less of its operations. Since the company is essentially funding more of its operations with its own money, one could argue that this has made the company less efficient at generating a return on investment.

In conclusion…

In summary, it is unfortunate that Famous Brands generates lower returns from the same amount of capital. It’s no surprise, then, that the stock has fallen 54% in the past five years, so it seems investors are acknowledging these changes. That being the case, unless the underlying trends return to a more positive trajectory, we would consider looking elsewhere.

If you want to know some of the risks famous brands face, we found 3 warning signs (2 are a bit of a concern!) that you should be aware of before investing here.

Famous Brands is not the only stock to generate high returns. If you want to see more, check out our free list of companies with high returns on equity with strong fundamentals.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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UMB FINANCIAL CORP MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K) https://freebassuk.com/umb-financial-corp-management-report-of-financial-position-and-results-of-operations-form-10-k/ Thu, 24 Feb 2022 16:20:04 +0000 https://freebassuk.com/umb-financial-corp-management-report-of-financial-position-and-results-of-operations-form-10-k/ Management discussion and analysis This Management's Discussion and Analysis highlights the material changes in the results of operations and changes in financial condition for each of the three years in the period ended December 31, 2021. It should be read in conjunction with the accompanying Consolidated Financial Statements, Notes to Consolidated Financial Statements, and other […]]]>

Management discussion and analysis


This Management's Discussion and Analysis highlights the material changes in the
results of operations and changes in financial condition for each of the three
years in the period ended December 31, 2021. It should be read in conjunction
with the accompanying Consolidated Financial Statements, Notes to Consolidated
Financial Statements, and other financial statistics appearing elsewhere in this
Annual Report on Form 10-K. Results of operations for the periods included in
this review are not necessarily indicative of results to be attained during any
future period.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS


From time to time the Company has made, and in the future will make,
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements can be identified by the fact
that they do not relate strictly to historical or current facts. Forward-looking
statements often use words such as "believe," "expect," "anticipate," "intend,"
"estimate," "project," "outlook," "forecast," "target," "trend," "plan," "goal,"
or other words of comparable meaning or future-tense or conditional verbs such
as "may," "will," "should," "would," or "could." Forward-looking statements
convey the Company's expectations, intentions, or forecasts about future events,
circumstances, results, or aspirations.

This report, including any information incorporated by reference in this report,
contains forward-looking statements. The Company also may make forward-looking
statements in other documents that are filed or furnished with the SEC. In
addition, the Company may make forward-looking statements orally or in writing
to investors, analysts, members of the media, or others.

All forward-looking statements, by their nature, are subject to assumptions,
risks, and uncertainties, which may change over time and many of which are
beyond the Company's control. You should not rely on any forward-looking
statement as a prediction or guarantee about the future. Actual future
objectives, strategies, plans, prospects, performance, conditions, or results
may differ materially from those set forth in any forward-looking statement.
While no list of assumptions, risks, or uncertainties could be complete, some of
the factors that may cause actual results or other future events, circumstances,
or aspirations to differ from those in forward-looking statements include:
     •    local, regional, national, or international business, economic, or
          political conditions or events;

• changes in laws or the regulatory environment, including as a result of

financial services laws or regulations;

• changes in monetary, tax or trade laws or policies, including as a

          result of actions by central banks or supranational authorities;


  • changes in accounting standards or policies;

• changes in investor sentiment or behavior towards the securities, capital or

          other financial markets, including changes in market liquidity or
          volatility or changes in interest or currency rates;

• changes in corporate or household spending, borrowing or saving;

• the Company’s ability to effectively manage its capital or liquidity or to

effectively attracting or deploying deposits;

• changes to any credit rating assigned to the Company or its affiliates;



  • adverse publicity or other reputational harm to the Company;


     •    changes in the Company's corporate strategies, the composition of its
          assets, or the way in which it funds those assets;


     •    the Company's ability to develop, maintain, or market products or

services or to absorb unforeseen costs or liabilities associated with

such products or services;

                                       24
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• the Company’s ability to innovate to anticipate the needs of current markets or

future customers, to compete successfully in their chosen professions,

increase or maintain market share in changing competitive environments,

or to address price or other competitive pressures;

• changes in the credit, liquidity or any other condition of the assets of the Company

customers, counterparties or competitors;

• the Company’s ability to deal effectively with economic, commercial or

market slowdowns or disruptions;

• investigations, legal, regulatory or administrative proceedings,

          disputes, or rulings that create uncertainty for, or are adverse to, the
          Company or the financial-services industry;

• the Company’s ability to cope with the evolution or strengthening of regulations or

other governmental oversight or requirements;

• the Company’s ability to maintain secure and functional finances,

accounting, technology, data processing or other operating systems or

its facilities, including its ability to withstand cyberattacks;

• the adequacy of corporate governance, risk management

          framework, compliance programs, or internal controls, including its
          ability to control lapses or deficiencies in financial reporting or to
          effectively mitigate or manage operational risk;


     •    the efficacy of the Company's methods or models in assessing business
          strategies or opportunities or in valuing, measuring, monitoring, or
          managing positions or risk;


     •    the Company's ability to keep pace with changes in technology that

affect the Company or its customers, counterparties or competitors;


     •    mergers, acquisitions, or dispositions, including the Company's ability
          to integrate acquisitions and divest assets;

• the adequacy of the Company’s succession plan for the main executives or

other staff;

• the Company’s ability to increase its revenues, control its expenses or attract and

          retain qualified employees;


     •    natural disasters, war, terrorist activities, pandemics, or the outbreak
          of COVID-19 or similar outbreaks, and their effects on economic and
          business environment in which the Company operates;

• adverse effects due to COVID-19 on the Company and its customers,

          counterparties, employees, and third-party service providers, and the
          adverse impacts to its business, financial position, results of
          operations, and prospects; or

• other assumptions, risks or uncertainties described in the Risk Factors

(Item 1A), Management report and analysis of the financial situation

and results of operations (heading 7), or the notes to the consolidated statements

          Financial Statements (Item 8) in this Annual Report on Form 10-K or
          described in any of the Company's annual, quarterly or current reports.


Any forward-looking statement made by the Company or on its behalf speaks only
as of the date that it was made. The Company does not undertake to update any
forward-looking statement to reflect the impact of events, circumstances, or
results that arise after the date that the statement was made, except as
required by applicable securities laws. You, however, should consult further
disclosures (including disclosures of a forward-looking nature) that the Company
may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form
10-Q, or Current Report on Form 8-K.

Operating results

Overview


During the first quarter of 2020, the global economy began experiencing a
downturn related to the impacts of the COVID-19 global pandemic (the COVID-19
pandemic, or the pandemic). Such impacts have included significant volatility in
the global stock and fixed income markets, a 150-basis-point reduction in the
target federal funds rate, the enactment of the Coronavirus Aid, Relief, and
Economic Security (CARES) Act and the American Rescue Plan Act of 2021, both
authorizing the Paycheck Protection Program (PPP) administered by the Small
Business Administration, and a variety of rulings from the Company's banking
regulators.


                                       25
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The Company continues to actively monitor developments related to COVID-19 and
its impact to its business, customers, employees, counterparties, vendors, and
service providers. During the year ended December 31, 2021, the Company's
results of operations included continued maintenance of the allowance for credit
losses (ACL) at a level appropriate given the state of key macroeconomic
variables utilized in the econometric models at December 31, 2021. Additionally,
the Company continued to see impacts of the volatile equity and debt markets and
low interest rate environment in its fee-based businesses.

In response to the COVID-19 pandemic, the Company formed a Pandemic Taskforce
and a steering group comprised of associates across multiple lines of business
and support functions and has taken several actions to offer various forms of
support to its customers, employees, and communities that have experienced
impacts resulting from the COVID-19 pandemic. The Company has also increased
purchases of computer hardware to support a remote workforce, as well as
incurred additional cleaning and janitorial expense to disinfect branch and
office locations. The Company has actively worked with customers impacted by the
economic downturn by offering payment deferrals and other loan
modifications. See further details under "Credit Risk Management" within "Item
7A. Quantitative and Qualitative Disclosures about Market Risk."

The COVID-19 pandemic and stay-at-home and similar mandates have also
necessitated certain actions related to the way the Company operates its
business. The Company transitioned most of its workforce off-site or to
work-from-home to help mitigate health risks and is currently moving forward
with plans to bring associates back in the office in a phased approach during
the first half of 2022. The Company is also carefully monitoring the activities
of its vendors and other third-party service providers to mitigate the risks
associated with any potential service disruptions.

The Company has detailed the impact of the COVID-19 pandemic in each applicable section of the “MD&A and Analysis of Financial Condition and Results of Operations” below.


The Company focuses on the following four core financial objectives. Management
believes these objectives will guide its efforts to achieve its vision, to
deliver the Unparalleled Customer Experience, all while seeking to improve net
income and strengthen the balance sheet while undertaking prudent risk
management.

The first financial objective is to continuously improve operating efficiencies.
The Company has focused on identifying efficiencies that simplify its
organizational and reporting structures, streamline back office functions and
take advantage of synergies and newer technologies among various platforms and
distribution networks. The Company has identified and expects to continue
identifying ongoing efficiencies through the normal course of business that,
when combined with increased revenue, will contribute to improved operating
leverage. For 2021, total revenue decreased 0.7%, and noninterest expense
increased 1.4%, as compared to the previous year. Revenue for 2020 included a
gain on the Company's investment in Tattooed Chef, Inc. (TTCF) of $108.8
million. Revenue for 2021 included a loss of $15.4 million on TTCF. The Company
continues to invest in technological advances that it believes will help
management drive operating leverage in the future through improved data analysis
and automation. The Company also continues to evaluate core systems and will
invest in enhancements that it believes will yield operating efficiencies.

The second financial objective is to increase net interest income through
profitable loan and deposit growth and the optimization of the balance
sheet. For 2021, net interest income increased $84.3 million, or 11.5%, as
compared to the previous year. The Company has shown increased net interest
income through the effects of increased volume, the mix of average earning
assets, and PPP income. Loans recorded under the PPP increased loan interest
income by $12.4 million in 2021 as compared to 2020. The additional increase in
interest income was driven by increased loan and securities balances and
liquidity. These increases were offset by a lower rate environment. Average
earning assets increased $6.7 billion, or 24.7%, compared to 2020. Average loan
balances increased $1.5 billion, average securities increased $2.2 billion, and
average interest-bearing due from banks increased $2.8 billion from prior year.
Average PPP loans decreased $229.0 million. The funding for these assets was
driven primarily by a 17.5% increase in average interest-bearing liabilities and
43.5% increase in noninterest-bearing deposits. Net interest margin, on a
tax-equivalent basis, decreased 31 basis points compared to the same period in
2020.

The third financial objective is to grow the Company's revenue from noninterest
sources. The Company seeks to grow noninterest revenues throughout all economic
and interest rate cycles, while positioning itself to benefit in periods of
economic growth. Noninterest income decreased $93.0 million, or 16.6%, to $467.2
million for the year ended December 31, 2021, compared to the same period in
2020. This decrease was primarily driven by the $108.8

                                       26
--------------------------------------------------------------------------------


million gain on the Company's investment in TTCF in 2020, coupled with a loss on
TTCF of $15.4 million in 2021. The decreased revenue attributed to TTCF is
offset by increased fund services income and corporate trust income. These
changes are discussed in greater detail below under Noninterest income. As of
December 31, 2021, noninterest income represented 36.4% of total revenues, as
compared to 43.4% for 2020.

The fourth financial objective is effective capital management. The Company
places a significant emphasis on maintaining a strong capital position, which
management believes promotes investor confidence, provides access to funding
sources under favorable terms, and enhances the Company's ability to capitalize
on business growth and acquisition opportunities. The Company continues to
maximize shareholder value through a mix of reinvesting in organic growth,
evaluating acquisition opportunities that complement the Company's strategies,
increasing dividends over time, and appropriately utilizing a share repurchase
program. At December 31, 2021, the Company had a total risk-based capital ratio
of 13.88% and $3.1 billion in total shareholders' equity, an increase of $128.5
million, or 4.3%, compared to total shareholders' equity at December 31, 2020.
The Company repurchased 68 thousand shares of common stock at an average price
of $81.36 per share during 2021 and declared $67.3 million in dividends, which
represents a 10.9% increase compared to dividends declared during 2020.

Earnings Summary


The Company recorded consolidated net income of $353.0 million for the year
ended December 31, 2021. This represents a 23.2% increase over 2020. Net income
for 2020 was $286.5 million, or an increase of 17.6% compared to 2019. Basic
earnings per share for the year ended December 31, 2021, were $7.31 per share
compared to $5.95 per share in 2020, an increase of 22.9%. Basic earnings per
share were $4.99 per share in 2019, or an increase of 19.2% from 2019 to 2020.
Fully diluted earnings per share increased 22.1% from 2020 to 2021 and increased
19.6% from 2019 to 2020. Return on average assets and return on average common
shareholder's equity for the year ended December 31, 2021 were 1.00% and 11.43%,
respectively, compared to 1.00% and 10.21%, respectively, for the year ended
December 31, 2020. Return on average assets and return on average common
shareholder's equity for the year ended December 31, 2019 were 1.02% and 9.94%,
respectively.

The Company's net interest income increased to $815.5 million in 2021 compared
to $731.2 million in 2020 and $670.9 million in 2019. In total, net interest
income increased $84.3 million, as compared to 2020, primarily driven by a
favorable volume variance of $85.0 million. See Table 2. The favorable volume
variance on earning assets was predominantly driven by an increase of $6.7
billion in average earning assets, or 24.7%. Average interest-bearing due from
banks increased $2.8 billion, average securities balances increased $2.2
billion, and average loan balances increased $1.5 billion for 2021 compared to
the same period in 2020. Net interest margin, on a fully tax-equivalent basis
(FTE), decreased to 2.50% for 2021, compared to 2.81% for the same period in
2020, as the asset yields and the cost of interest-bearing liabilities
decreased, coupled with an increased balance sheet. This created significant
margin compression. The Company has seen a decrease in the benefit from
interest-free funds as compared to 2020 driven by the lower rate
environment. The impact of this benefit decreased seven basis points compared to
2020 and is illustrated on Table 3. The magnitude and duration of this impact
will be largely dependent upon the FRB's policy decisions and market movements.
See Table 18 in Item 7A for an illustration of the impact of an interest rate
increase or decrease on net interest income as of December 31, 2021.

The provision for credit losses totaled $20.0 million for the year ended
December 31, 2021, which is a decrease of $110.5 million, or 84.7%, compared to
the same period in 2020. This change is the result of the adoption of the CECL
standard in 2020 and applying this methodology for computing the allowance for
credit losses, coupled with the impacts of the current and forecasted economic
environment related to the COVID-19 pandemic. See further discussion in
"Provision and Allowance for Credit Losses" in this report.

The Company had a decrease of $93.0 million, or 16.6%, in noninterest income in
2021, as compared to 2020, and an increase of $133.4 million, or 31.3%, in 2020,
compared to 2019. The decrease in 2021 and increase in 2020 is primarily
attributable to a decrease of $115.6 million and an increase of $118.4 million
in Investment securities gains, net. This is primarily driven by the $108.8
million gain on the Company's investment in TTCF in 2020 and a loss of $15.4
million in 2021. The decrease in 2021 is also impacted by increased fund
services income, corporate trust, and bankcard income. These are offset by a
decrease in brokerage income. The change in noninterest income in 2021 from
2020, and 2020 from 2019 is illustrated in Table 6.

Non-interest expense increased in 2021 by $11.6 millioni.e. 1.4%, compared to 2020 and increased by $43.1 millionor 5.5%, in 2020 compared to 2019. The increase in 2021 is mainly attributable to the increase in processing

                                       27
--------------------------------------------------------------------------------


fees and salary and employee benefits expense, offset by lower operating losses
and equipment expense. The increase in noninterest expense in 2021 from 2020,
and 2020 from 2019 is illustrated in Table 7.

Net interest income


Net interest income is a significant source of the Company's earnings and
represents the amount by which interest income on earning assets exceeds the
interest expense paid on liabilities. The volume of interest earning assets and
the related funding sources, the overall mix of these assets and liabilities,
and the interest rates paid on each affect net interest income. Table 2
summarizes the change in net interest income resulting from changes in volume
and rates for 2021, 2020 and 2019.

Net interest margin, presented in Table 1, is calculated as net interest income
on a fully tax- equivalent basis as a percentage of average earning assets. Net
interest income is presented on a tax-equivalent basis to adjust for the
tax-exempt status of earnings from certain loans and investments, which are
primarily obligations of state and local governments. A critical component of
net interest income and related net interest margin is the percentage of earning
assets funded by interest-free sources. Table 3 analyzes net interest margin for
the three years ended December 31, 2021, 2020 and 2019. Net interest income,
average balance sheet amounts and the corresponding yields earned and rates paid
for the years 2019 through 2021 are presented in Table 1 below.

                                       28
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The following table presents, for the periods indicated, the average earning
assets and resulting yields, as well as the average interest-bearing liabilities
and resulting yields, expressed in both dollars and rates.

Table 1


THREE YEAR AVERAGE BALANCE SHEETS/YIELDS AND RATES (tax-equivalent basis)
(in millions)

                                                         2021                                               2020
                                                      Interest                                           Interest
                                      Average          Income/        Rate Earned/       Average          Income/        Rate Earned/
                                      Balance        Expense (1)        Paid (1)         Balance        Expense (1)        Paid (1)
ASSETS
Loans and loans held for sale
(FTE) (2) (3)                       $  16,629.9     $       619.3             3.72 %   $  15,126.1     $       586.0             3.87 %
Securities:
Taxable                                 7,422.4             127.6             1.72         5,256.7             105.7             2.01
Tax-exempt (FTE)                        4,247.0             124.5             2.93         4,226.4             126.3             2.99
Total securities                       11,669.4             252.1             2.16         9,483.1             232.0             2.45
Federal funds sold and resell
agreements                              1,234.5              10.1             0.81         1,099.4              11.8             1.08
Interest-bearing due from banks         4,063.1               5.4             0.13         1,218.9               3.8             0.31
Other earning assets (FTE)                 23.5               1.0             4.33            37.1               1.6             4.28
Total earning assets (FTE)             33,620.4             887.9             2.64        26,964.6             835.2             3.10
Allowance for credit losses              (204.7 )                                           (184.5 )
Cash and due from banks                   460.1                                              440.5
Other assets                            1,452.8                                            1,347.5
Total assets                        $  35,328.6                                        $  28,568.1

LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing demand and
savings deposits                    $  16,982.9     $        24.1             0.14 %   $  14,446.2     $        49.1             0.34 %
Time deposits under $250,000              242.0               0.8             0.33           488.3               5.0             1.02
Time deposits of $250,000 or more         453.2               1.5             0.33           402.0               4.1             1.02
Total interest-bearing deposits        17,678.1              26.4             0.15        15,336.5              58.2             0.38
Borrowed funds                            270.5              12.7             4.68           137.0               7.3             5.30
Federal funds purchased                   163.8                 -             0.04            60.3               0.2             0.26
Securities sold under agreements
to repurchase                           2,454.3               6.9             0.28         1,963.5              11.6             0.59
Total interest-bearing
liabilities                            20,566.7              46.0             0.22        17,497.3              77.3             0.44
Noninterest-bearing demand
deposits                               11,254.8                                            7,845.6
Other                                     418.0                                              420.2
Total                                  32,239.5                                           25,763.1
Total shareholders' equity              3,089.1                                            2,805.0
Total liabilities and
shareholders' equity                $  35,328.6                                        $  28,568.1
Net interest income (FTE)                           $       841.9                                      $       757.9
Net interest spread (FTE)                                                     2.42 %                                             2.66 %
Net interest margin (FTE)                                                     2.50 %                                             2.81 %


(1) Interest income and yield are expressed on an ETP basis, using marginal tax

rate of 21% for 2021, 2020 and 2019. Tax-equivalent interest income and

returns take into account tax-exempt interest income net of refusal to

interest expense, for federal income tax purposes, relating to certain

non-taxable assets. Rates earned/paid may not match rates shown due to

presentation in millions. The tax-equivalent interest income amounts to $26.3

     million, $26.7 million, and $24.0 million in 2021, 2020, and 2019,
     respectively.

(2) Loan fees are included in interest income. These costs totaled $17.1 million,

$13.7 millionand $14.5 million in 2021, 2020 and 2019, respectively.

(3) Unaccrued loans are included in the calculation of the average

sales. Interest income on these loans is also included in loan income.

                                       29
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THREE YEAR AVERAGE BALANCE SHEETS/YIELDS AND RATES (tax-equivalent basis)
(in millions)

                                                                       2019
                                                                    Interest
                                                   Average          Income/          Rate Earned/
                                                   Balance        Expense (1)          Paid (1)
ASSETS
Loans and loans held for sale (FTE) (2) (3)      $  12,764.6     $        637.9               5.00 %
Securities:
Taxable                                              4,524.9              106.1               2.34
Tax-exempt (FTE)                                     3,797.0              113.7               3.00
Total securities                                     8,321.9              219.8               2.64
Federal funds sold and resell agreements               535.4               13.8               2.59
Interest-bearing due from banks                        584.8               12.9               2.20
Other earning assets (FTE)                              52.3                2.5               4.79
Total earning assets (FTE)                          22,259.0              886.9               3.98
Allowance for credit losses                           (107.4 )
Cash and due from banks                                454.6
Other assets                                         1,178.4
Total assets                                     $  23,784.6

LIABILITIES AND EQUITY Sight deposits and interest-bearing savings deposits $12,161.8 $138.7

               1.14 %
Time deposits under $250,000                           366.3                5.6               1.53
Time deposits of $250,000 or more                      644.1                9.9               1.54
Total interest-bearing deposits                     13,172.2              154.2               1.17
Borrowed funds                                          69.8                5.2               7.51
Federal funds purchased                                123.9                2.7               2.13
Securities sold under agreements to repurchase       1,533.4               29.9               1.95
Total interest-bearing liabilities                  14,899.3              192.0               1.29
Noninterest-bearing demand deposits                  6,132.2
Other                                                  301.3
Total                                               21,332.8
Total shareholders' equity                           2,451.8
Total liabilities and shareholders' equity       $  23,784.6
Net interest income (FTE)                                        $        694.9
Net interest spread (FTE)                                                                     2.69 %
Net interest margin (FTE)                                                                     3.12 %




                                       30
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Table 2

RATE-VOLUME ANALYSIS (in thousands)


This analysis attributes changes in net interest income either to changes in
average balances or to changes in average interest rates for earning assets and
interest-bearing liabilities. The change in net interest income that is due to
both volume and interest rate has been allocated to volume and interest rate in
proportion to the relationship of the absolute dollar amount of the change in
each. All interest rates are presented on a tax-equivalent basis and give effect
to tax-exempt interest income net of the disallowance of interest expense for
federal income tax purposes, related to certain tax-free assets. The loan
average balances and rates include nonaccrual loans.

       Average Volume                 Average Rate                                              Increase (Decrease)
    2021             2020           2021         2020            2021 vs. 2020          Volume         Rate          Total
                                                            Change in interest
                                                            earned on:
$ 16,629,867     $ 15,126,110         3.72 %       3.87 %   Loans                      $  56,636     $ (23,320 )   $  33,316
                                                            Securities:
   7,422,432        5,256,715         1.72         2.01     Taxable                       38,880       (16,956 )      21,924
   4,246,943        4,226,363         2.93         2.99     Tax-exempt                       689        (2,204 )      (1,515 )
                                                            Federal funds and resell
   1,234,533        1,099,447         0.81         1.08     agreements                     1,336        (3,128 )      (1,792 )
                                                           

Due bearing interest

   4,063,089        1,218,919         0.13         0.31     from banks                     4,757        (3,084 )       1,673
      23,480           37,086         4.33         4.28     Trading securities              (592 )          19          (573 )
  33,620,344       26,964,640         2.64         3.10     Total                        101,706       (48,673 )      53,033
                                                            Change in interest
                                                            incurred on:
                                                            Interest-bearing
  17,678,122       15,336,492         0.15         0.38     deposits                       7,804       (39,606 )     (31,802 )
     163,744           60,314         0.04         0.26     Federal funds purchased          119          (206 )         (87 )
                                                            Securities sold under
   2,454,290        1,963,499         0.28         0.59     agreements to repurchase       2,414        (7,180 )      (4,766 )
     270,498          136,957         4.68         5.30     Borrowed Funds                 6,337          (941 )       5,396
$ 20,566,654     $ 17,497,262         0.22 %       0.44 %   Total                         16,674       (47,933 )     (31,259 )
                                                            Net interest income        $  85,032     $    (740 )   $  84,292



       Average Volume                 Average Rate                                                Increase (Decrease)
    2020             2019           2020         2019             2020 vs. 2019          Volume          Rate          Total
                                                            Change in interest earned
                                                            on:

$15,126,110 $12,764,623 3.87% 5.00% Loans

             $ 106,011     $ (157,899 )   $  (51,888 )
                                                            Securities:

5,256,715 4,524,955 2.01 2.34 Taxable

                15,854        (16,206 )         (352 )
   4,226,363        3,796,983         2.99         3.00     Tax-exempt                     10,048           (292 )        9,756
                                                            Federal funds and resell
   1,099,447          535,393         1.08         2.59     agreements                      9,107        (11,110 )       (2,003 )
                                                            

Interest bearers due from

   1,218,919          584,756         0.31         2.20     banks                           7,267        (16,405 )       (9,138 )
      37,086           52,306         4.28         4.79     Trading securities               (569 )         (209 )         (778 )
  26,964,640       22,259,016         3.10         3.98     Total                         147,718       (202,121 )      (54,403 )
                                                            Change in interest
                                                            incurred on:

15,336,492 13,172,181 0.38 1.17 Interest-bearing deposits 21,986 (117,964 ) (95,978 )

      60,314          123,871         0.26         2.13     Federal funds purchased          (916 )       (1,565 )       (2,481 )
                                                            Securities sold under
   1,963,499        1,533,412         0.59         1.95     agreements to repurchase        6,904        (25,189 )      (18,285 )
     136,957           69,809         5.30         7.51     Borrowed Funds                  3,906         (1,889 )        2,017
$ 17,497,262     $ 14,899,273         0.44 %       1.29 %   Total                          31,880       (146,607 )     (114,727 )
                                                            Net interest income         $ 115,838     $  (55,514 )   $   60,324




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Table 3

ANALYSIS OF NET INTEREST MARGIN (in thousands)

                                                    2021             2020             2019
Average earning assets                          $ 33,620,344     $ 26,964,640     $ 22,259,016
Interest-bearing liabilities                      20,566,654       17,497,262       14,899,273
Interest-free funds                             $ 13,053,690     $  9,467,378     $  7,359,743
Free funds ratio (interest free funds to
average earning assets)                                38.83 %          35.11 %          33.06 %
Tax-equivalent yield on earning assets                  2.64 %           3.10 %           3.98 %
Cost of interest-bearing liabilities                    0.22             0.44             1.29
Net interest spread                                     2.42 %           2.66 %           2.69 %
Benefit of interest-free funds                          0.08             0.15             0.43
Net interest margin                                     2.50 %           2.81 %           3.12 %



The Company experienced an increase in net interest income of $84.3 million, or
11.5%, for the year ended December 31, 2021, compared to 2020. This follows an
increase of $60.3 million, or 9.0%, for the year ended December 31, 2020,
compared to 2019. Average earning assets for the year ended December 31, 2021
increased by $6.7 billion, or 24.7%, compared to the same period in 2020. Net
interest margin, on a tax-equivalent basis, decreased to 2.50% for 2021 compared
to 2.81% in 2020.

The Company funds a significant portion of its balance sheet with
noninterest-bearing demand deposits. Noninterest-bearing demand deposits
represented 45.9%, 36.5% and 32.1% of total outstanding deposits at December 31,
2021, 2020 and 2019, respectively. As illustrated in Table 3, the impact from
these interest-free funds was eight basis points in 2021, as compared to 15
basis points in 2020 and 43 basis points in 2019.

The Company has experienced an increase in net interest income during 2021 due
to a volume variance of $85.0 million, offset by a very minimal negative rate
variance of $0.7 million. The average rate on earning assets during 2021 has
decreased by 46 basis points, while the average rate on interest-bearing
liabilities decreased by 22 basis points, resulting in a 24 basis-point decrease
in spread. The volume of loans has increased from an average of $15.1 billion in
2020 to an average of $16.6 billion in 2021 driven by organic loan growth. The
volume of interest-bearing liabilities increased from $17.5 billion in 2020 to
$20.6 billion in 2021. The Company expects to see continued volatility in the
economic markets and government responses to these changes as a result of the
COVID-19 pandemic. These changing economic conditions and governmental responses
could have impacts on the balance sheet and income statement of the Company in
2022. Loan-related earning assets tend to generate a higher spread than those
earned in the Company's investment portfolio. By design, the Company's
investment portfolio is moderate in duration and liquid in its composition of
assets.

During 2022, approximately $1.6 billion of available-for-sale securities are
expected to have principal repayments.  This includes approximately $453 million
which will have principal repayments during the first quarter of 2022.  The
available-for-sale investment portfolio had an average life of 67.6 months, 70.1
months, and 70.9 months as of December 31, 2021, 2020, and 2019, respectively.

Allowance and Provision for Credit Losses


The ACL represents management's judgment of total expected losses included in
the Company's loan portfolio as of the balance sheet date. The Company's process
for recording the ACL is based on the evaluation of the Company's lifetime
historical loss experience, management's understanding of the credit quality
inherent in the loan portfolio, and the impact of the current economic
environment, coupled with reasonable and supportable economic forecasts.

A mathematical calculation of an estimate is made to assist in determining the
adequacy and reasonableness of management's recorded ACL. To develop the
estimate, the Company follows the guidelines in Accounting Standards
Codification (ASC) Topic 326, Financial Instruments - Credit Losses (ASC
326). The estimate reserves for assets held at amortized cost and any related
credit deterioration in the Company's available-for-sale debt security
portfolio. Assets held at amortized cost include the Company's loan book and
held-to-maturity security portfolio.

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The process involves the consideration of quantitative and qualitative factors
relevant to the specific segmentation of loans. These factors have been
established over decades of financial institution experience and include
economic observation and loan loss characteristics. This process is designed to
produce a lifetime estimate of the losses, at a reporting date, that includes
evaluation of historical loss experience, current economic conditions,
reasonable and supportable forecasts, and the qualitative framework outlined by
the Office of the Comptroller of the Currency in the published 2020 Interagency
Policy Statement. This process allows management to take a holistic view of the
recorded ACL reserve and ensure that all significant and pertinent information
is considered.

The Company considers a variety of factors to ensure the safety and soundness of
its estimate including a strong internal control framework, extensive
methodology documentation, credit underwriting standards which encompass the
Company's desired risk profile, model validation, and ratio analysis. If the
Company's total ACL estimate, as determined in accordance with the approved ACL
methodology, is either outside a reasonable range based on review of economic
indicators or by comparison of historical ratio analysis, the ACL estimate is an
outlier and management will investigate the underlying reason(s). Based on that
investigation, issues or factors that previously had not been considered may be
identified in the estimation process, which may warrant adjustments to estimated
credit losses.

The ending result of this process is a recorded consolidated ACL that represents
management's best estimate of the total expected losses included in the loan
portfolio, held-to-maturity securities, and credit deterioration in
available-for-sale securities.

Table 4 presents the components of the allowance by loan portfolio segment. The
Company manages the ACL against the risk in the entire loan portfolio and
therefore, the allocation of the ACL to a particular loan segment may change in
the future. Management of the Company believes the present ACL is adequate
considering the Company's loss experience, delinquency trends and current
economic conditions. Future economic conditions and borrowers' ability to meet
their obligations, however, are uncertainties which could affect the Company's
ACL and/or need to change its current level of provision. For more information
on loan portfolio segments and ACL methodology refer to Note 3, "Loans and
Allowance for Credit Losses," in the Notes to the Consolidated Financial
Statements.

Table 4

ALLOCATION OF PROVISION FOR CREDIT LOSSES ON CREDIT (in thousands)


This table presents an allocation of the allowance for credit losses on loans
and percent of loans to total loans by loan portfolio segment, which represents
the total expected losses derived by both quantitative and qualitative methods.
The amounts presented are not necessarily indicative of actual future
charge-offs in any particular category and are subject to change.


                                                          2021                                2020
                                              Allowance         Percent of        Allowance         Percent of
                                              for credit      loans to total      for credit      loans to total
At December 31:                                 losses            loans             losses            loans
Commercial and industrial                    $    123,732               42.3 %   $    122,700               43.8 %
Specialty lending                                   1,738                3.0            5,219                3.2
Commercial real estate                             56,265               36.5           61,931               36.7
Consumer real estate                                3,921               13.5            6,586               12.1
Consumer                                              845                0.8            1,480                0.7
Credit cards                                        6,075                2.3           15,786                2.3
Leases and other                                    2,195                1.6            2,271                1.2
Total allowance for credit losses on loans   $    194,771              100.0 %   $    215,973              100.0 %




Table 5 presents a summary of the Company's ACL for the years ended December 31,
2021 and 2020. Also, please see "Quantitative and Qualitative Disclosures About
Market Risk - Credit Risk Management" in this report for information relating to
nonaccrual, past due, restructured loans, and other credit risk matters. For
more information on loan portfolio segments and ACL methodology refer to Note 3,
"Loans and Allowance for Credit Losses," in the Notes to the Consolidated
Financial Statements.

                                       33
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As illustrated in Table 5 below, the ACL decreased as a percentage of total
loans to 1.13% as of December 31, 2021, compared to 1.34% as of December 31,
2020. The provision for credit losses, including provision for off-balance sheet
credit exposures, totaled $20.0 million for the year ended December 31, 2021,
which is a decrease of $110.5 million, or 84.7%, compared to the same period in
2020. The provision for credit losses, including provision for off-balance sheet
credit exposures, totaled $130.5 million for the year ended December 31,
2020. This decrease is the result of the impacts of the current and forecasted
economic environment related to the COVID-19 pandemic during 2020 and 2021,
coupled with various portfolio changes.

Table 5

ANALYSIS OF THE PROVISION FOR CREDIT LOSSES (in thousands)


                                                            2021            

2020

Allowance - January 1                                   $    218,583     $  

101,788

Cumulative effect adjustment(1)                                    -        

9,030

Adjusted allowance - January 1                               218,583        

110,818

Provision for credit losses                                   23,000          127,890
Charge-offs:
Commercial                                                   (13,981 )         (8,587 )
Specialty lending                                            (31,945 )              -
Commercial real estate                                        (1,198 )        (11,939 )
Consumer real estate                                             (96 )           (219 )
Consumer                                                      (2,424 )           (607 )
Credit cards                                                  (6,011 )         (7,326 )
Leases and other                                                  (8 )            (11 )
Total charge-offs                                            (55,663 )        (28,689 )
Recoveries:
Commercial and industrial                                      6,694            6,473
Specialty lending                                                187                -
Commercial real estate                                         1,560               91
Consumer real estate                                             142               69
Consumer                                                         223              307
Credit cards                                                   1,967            1,618
Leases and other                                                  18                6
Total recoveries                                              10,791            8,564
Net charge-offs                                              (44,872 )        (20,125 )
Allowance for credit losses - end of period             $    196,711     $  

218,583

Allowance for credit losses on loans                    $    194,771     $  

215,973

Allowance for credit losses on held-to-maturity
securities                                                     1,940        

2,610

Loans at end of year, net of unearned interest            17,170,871       

16,103,651

Held-to-maturity securities at end of period               1,480,416        

1,014,614

Total assets at amortized cost                            18,651,287       

17,118,265

Average loans, net of unearned interest                   16,618,350       

15,109,392

Provision for credit losses on loans to loans at the end of the period

                                                       1.13 %      

1.34% Allowance for credit losses – end of period on total assets at amortized cost

                                        1.05 %           1.28 %
Allowance as a multiple of net charge-offs                     4.38x        

10.86x

Net charge-offs to average loans                                0.27 %           0.13 %


(1) Linked to the adoption of ASU no. 2016-13. See note 2, “New accounting

Pronunciations”, for more details.

Non-interest income


A key objective of the Company is the growth of noninterest income to provide a
diverse source of revenue not directly tied to interest rates.  Fee-based
services are typically non-credit related and are not generally affected by
fluctuations in interest rates. Noninterest income decreased in 2021 by $93.0
million, or 16.6%, compared to 2020 and increased in 2020 by $133.4 million, or
31.3%, compared to 2019. The decrease in 2021 is primarily

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attributable to a decrease in net investment securities gains, offset by an increase in fund services income, corporate trust income and bank card income. These are offset by a decrease in brokerage income. The increase in 2020 is primarily attributable to net investment securities gains, fund services revenue, and trading and investment banking revenue.


The Company's fee-based services offer multiple products and services, which
management believes will more closely align with customer product demands. The
Company is currently emphasizing fee-based services including trust and
securities processing, bankcard, securities trading and brokerage and cash and
treasury management. Management believes that it can offer these products and
services both efficiently and profitably, as most have common platforms and
support structures.

Table 6

SUMMARY OF NON-INTEREST INCOME (in thousands)

                                       Year Ended December 31,                 Dollar Change               Percent Change
                                  2021          2020          2019          21-20          20-19        21-20         20-19
Trust and securities
processing                      $ 224,126     $ 194,646     $ 176,913     $   29,480     $  17,733        15.1 %         10.0 %
Trading and investment
banking                            30,939        32,945        23,466         (2,006 )       9,479        (6.1 )         40.4
Service charges on deposit
accounts                           86,056        83,879        82,748          2,177         1,131         2.6            1.4
Insurance fees and
commissions                         1,309         1,369         1,634            (60 )        (265 )      (4.4 )        (16.2 )
Brokerage fees                     12,171        24,350        31,261        (12,179 )      (6,911 )     (50.0 )        (22.1 )
Bankcard fees                      64,576        60,544        66,727          4,032        (6,183 )       6.7           (9.3 )
Investment securities gains,
net                                 5,057       120,634         2,245       (115,577 )     118,389       (95.8 )      5,273.5
Other                              42,941        41,799        41,776          1,142            23         2.7            0.1
Total noninterest income        $ 467,175     $ 560,166     $ 426,770     $  (92,991 )   $ 133,396       (16.6 )%        31.3 %


Non-interest revenue and year-over-year changes in non-interest revenue are summarized in Table 6 above. The dollar change and percent change columns highlight the respective net increase or decrease of non-interest revenue categories in 2021 compared to 2020, and in 2020 compared to 2019.


Trust and securities processing income consists of fees earned on personal and
corporate trust accounts, custody of securities services, trust investments and
wealth management services, and mutual fund assets servicing. This income
category increased by $29.5 million, or 15.1% in 2021, compared to 2020, and
increased by $17.7 million, or 10.0%, in 2020, compared to 2019. During 2021,
fund services income increased $27.5 million and corporate trust income
increased $5.8 million, offset by a decrease in wealth management income of $3.8
million. During 2020, fund services income increased $10.6 million and corporate
trust income increased $7.2 million.

Trading and investment banking income decreased $2.0 million, or 6.1%, in 2021
compared to 2020 and increased $9.5 million, or 40.4%, in 2020 compared to
2019. The decrease in 2021 compared to 2020 was driven by slightly lower trading
volume and lower market values. The increase in 2020 compared to 2019 was driven
by increased bond trading volume.

Commissions on deposit income increased $2.2 millioni.e. 2.6%, in 2021 compared to 2020 and increased $1.1 million, or 1.4%, in 2020 compared to 2019. The increase in 2021 compared to 2020 is explained by the increase in income from rental charges. The increase in 2020 compared to 2019 is explained by the increase in revenues from health services.


Brokerage fees decreased $12.2 million, or 50.0%, in 2021 compared to 2020 and
$6.9 million, or 22.1%, in 2020 compared to 2019. These decreases were primarily
due to lower money market and 12b-1 income driven by a decrease in volume and
interest rates.

Bankcard fees increased $4.0 million, or 6.7%, in 2021 compared to 2020, and
decreased $6.2 million, or 9.3%, in 2020 compared to 2019. The increase in 2021
compared to 2020 was primarily driven by increased interchange income, offset by
increased rewards and rebate expense. The decrease in 2020 compared to 2019 was
primarily driven by decreased interchange income, offset by decreased rewards
and rebate expense.

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Investment securities gains, net decreased $115.6 million in 2021 compared to
2020 but increased by $118.4 million in 2020 compared to 2019, primarily driven
by changes in valuation of the Company's investment in TTCF. The decrease in
2021 was driven by the $15.4 million loss in 2021 on TTCF, coupled with the
$108.8 million gain on TTCF recorded in 2020. This decrease was offset by an
increase of $5.9 million in gains on equity securities without readily
determinable fair values. The increase in 2020 was driven by the $108.8 million
gain on TTCF, an increase of $3.9 million in gains on equity securities without
readily determinable fair values, and an increase of $3.8 million in gains on
sales of available-for-sale securities.

Non-interest expenses


Noninterest expense increased in 2021 by $11.6 million, or 1.4%, compared to
2020 and increased in 2020 by $43.1 million, or 5.5%, compared to 2019. From
2020 to 2021 the increases were driven by processing fees and salary and
employee benefits expense, offset by other miscellaneous expense, and equipment
expense. The main drivers of the increase from 2019 to 2020 were driven by
salary and employee benefits expense, other miscellaneous expense, and equipment
expense, offset by a decrease in marketing and business development
expense. Table 7 below summarizes the components of noninterest expense and the
respective year-over-year changes for each category.

Table 7

SUMMARY OF NON-INTEREST EXPENSES (in thousands)

                                       Year Ended December 31,                Dollar Change            Percent Change
                                  2021          2020          2019         21-20         20-19        21-20       20-19
Salaries and employee
benefits                        $ 504,442     $ 495,464     $ 461,445     $  8,978     $  34,019         1.8 %       7.4 %
Occupancy, net                     47,345        47,476        47,771         (131 )        (295 )      (0.3 )      (0.6 )
Equipment                          78,398        85,719        79,086       (7,321 )       6,633        (8.5 )       8.4
Supplies and services              14,986        15,537        18,699         (551 )      (3,162 )      (3.5 )     (16.9 )
Marketing and business
development                        18,533        14,679        26,257        3,854       (11,578 )      26.3       (44.1 )
Processing fees                    67,563        54,213        52,198       13,350         2,015        24.6         3.9
Legal and consulting               32,406        29,765        31,504        2,641        (1,739 )       8.9        (5.5 )
Bankcard                           19,145        18,954        17,750          191         1,204         1.0         6.8
Amortization of other
intangible assets                   4,757         6,517         5,506       (1,760 )       1,011       (27.0 )      18.4
Regulatory fees                    11,894        10,279        11,489        1,615        (1,210 )      15.7       (10.5 )
Other                              34,167        43,402        27,155       (9,235 )      16,247       (21.3 )      59.8
Total noninterest expense       $ 833,636     $ 822,005     $ 778,860     $ 11,631     $  43,145         1.4 %       5.5 %



Salaries and employee benefits expense increased $9.0 million, or 1.8%, in 2021
compared to 2020 and $34.0 million, or 7.4%, in 2020 compared to 2019. In 2021,
bonus and commission expense increased $8.7 million, or 7.5%, driven by business
volumes and revenue growth, and higher company performance. Salary and wage
expense increased $1.7 million, or 0.6%. These increases were offset by a
decrease in employee benefits expense of $1.4 million, or 1.7%. In 2020, bonus
and commission expense increased $23.6 million, or 25.3%, driven by business
volumes and revenue growth, and higher company performance. Salary and wage
expense increased $12.1 million, or 4.3%. These increases were offset by a
decrease in employee benefits expense of $1.7 million, or 2.1%.

Equipment expense decreased $7.3 million, or 8.5%, in 2021 compared to 2020, and
increased $6.6 million, or 8.4%, from 2019 to 2020, respectively. The decrease
in 2021 was driven by lower software amortization related to a transition to
cloud-based computing solutions. The increase in 2020 compared to 2019 was
driven by computer hardware and software expenses for the ongoing investments in
digital channel and integrated platform solutions to support business growth and
the continued modernization of core systems.

Marketing and business development expense increased $3.9 million, or 26.3%, in
2021 compared to 2020, but decreased $11.6 million, or 44.1%, in 2020 compared
to 2019. The increase in 2021 was driven by the timing of advertising and
business development projects and higher travel expenses as compared to
2020. The decrease in 2020 is driven by reduced travel and entertainment
expenses and business development expense related to the COVID-19 pandemic.

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Processing fees expense increased $13.4 million, or 24.6%, in 2021 compared to
2020, and increased $2.0 million, or 3.9%, in 2020 compared to 2019. The
increases in 2021 and 2020 are primarily driven by the transition to cloud
computing solutions and ongoing investments in digital channel and integrated
platform solutions to support business growth and the continued modernization of
core systems.

Other non-interest expense decreased $9.2 millioni.e. 21.3%, in 2021 compared to 2020 and increased $16.2 million, or 59.8%, in 2020 compared to 2019. The decrease in 2021 is due to lower operating losses, partially offset by an increase in charitable contribution expenses. The increase in 2020 is mainly due to higher operating losses and derivative expenses.

Income taxes


Income tax expense totaled $76.0 million, $52.4 million, and $42.4 million in
2021, 2020, and 2019 respectively. These amounts equate to effective tax rates
of 17.7%, 15.5%, and 14.8% for 2021, 2020 and 2019, respectively. The increase
in the effective tax rate from 2020 to 2021 is primarily attributable to a
smaller portion of pre-tax income being earned from tax-exempt municipal
securities and higher state and local income taxes. The increase in the
effective tax rate from 2019 to 2020 is primarily attributable to a smaller
portion of pre-tax income being earned from tax-exempt municipal securities.

For further information on income taxes, refer to Note 16, “Income Taxes”, in the Notes to the Consolidated Financial Statements.

Activity area


The Company has strategically aligned its operations into the following three
reportable segments: Commercial Banking, Institutional Banking, and Personal
Banking (collectively, the Business Segments). Senior executive officers
regularly evaluate Business Segment financial results produced by the Company's
internal reporting system in deciding how to allocate resources and assess
performance for individual Business Segments.  Previously, the Company had the
following four Business Segments: Commercial Banking, Institutional Banking,
Personal Banking, and Healthcare Services. In the first quarter of 2020, the
Company merged the Healthcare Services segment into the Institutional Banking
segment to better reflect how the Company's core businesses, products and
services are currently being evaluated by management. The management accounting
system assigns balance sheet and income statement items to each Business Segment
using methodologies that are refined on an ongoing basis. For comparability
purposes, amounts in all periods are based on methodologies in effect at
December 31, 2021. Previously reported results have been reclassified in this
Form 10-K to conform to the Company's current organizational structure.

Table 8

COMMERCIAL BANKING OPERATING RESULTS (in thousands)

                                    Year Ended              Dollar       Percent
                                   December 31,             Change        Change
                                2021          2020          21-20         21-20
Net interest income           $ 556,673     $ 475,425     $   81,248         17.1 %
Provision for credit losses      15,553       119,424       (103,871 )      (87.0 )
Noninterest income               81,752       189,412       (107,660 )      (56.8 )
Noninterest expense             289,039       272,283         16,756          6.2
Income before taxes             333,833       273,130         60,703         22.2
Income tax expense               59,165        42,223         16,942         40.1
Net income                    $ 274,668     $ 230,907     $   43,761         19.0 %



For the year ended December 31, 2021, Commercial Banking net income increased
$43.8 million, or 19.0%, to $274.7 million compared to the same period in 2020.
Net interest income increased $81.2 million, or 17.1%, for the year ended
December 31, 2021, compared to the same period last year, primarily driven by
strong loan growth, earning asset mix changes, and the Company's participation
in the PPP. PPP loans averaged $802.4 million during 2021, and PPP income
increased $12.4 million as compared to 2020. Provision for credit losses
decreased $103.9 million as compared to 2020. The provision expense for 2020 was
significantly impacted by the adoption of CECL,

                                       37
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coupled with the impacts of the COVID-19 pandemic on the economic environment
and reasonable and supportable economic forecasts. The provision in 2021
represents substantial improvement in these forecasts. Noninterest income
decreased $107.7 million, or 56.8%, over the same period in 2020. Investment
securities gains, net decreased $117.0 million, primarily driven by the change
in market valuation on the Company's investment in TTCF. This decrease was
partially offset by increases of $3.3 million in deposit service charges, $2.7
million in gains on sales of assets, and $2.5 million in bankcard fees.
Noninterest expense increased $16.8 million, or 6.2%, as compared to the same
period in 2020. This increase was driven by an increase of $20.0 million in
technology, service, and overhead expenses, $4.9 million in salaries and
employee benefits expense, $1.8 million in marketing and business development
expense, $1.6 million in processing fees, and $1.3 million in regulatory
fees. These increases were partially offset by a decrease of $12.9 million in
operational losses as compared to 2020.

Table 9

INSTITUTIONAL BANK OPERATING RESULTS (in thousands)

                                    Year Ended             Dollar       Percent
                                   December 31,            Change        Change
                                2021          2020          21-20        21-20
Net interest income           $  87,644     $ 106,856     $ (19,212 )      (18.0 )%
Provision for credit losses         630           882          (252 )      (28.6 )
Noninterest income              273,413       254,874        18,539          7.3
Noninterest expense             292,080       286,635         5,445          1.9
Income before taxes              68,347        74,213        (5,866 )       (7.9 )
Income tax expense               12,113        11,472           641          5.6
Net income                    $  56,234     $  62,741     $  (6,507 )      (10.4 )%



For the year ended December 31, 2021, Institutional Banking net income decreased
$6.5 million, or 10.4%, compared to the same period last year.  Net interest
income decreased $19.2 million, or 18.0%, compared to the same period last year,
due to a decrease in funds transfer pricing driven by lower interest rates.
Noninterest income increased $18.5 million, or 7.3%, primarily due to increases
of $27.5 million in fund services income, $5.8 million in corporate trust
income, both recorded in trust and securities processing revenue, $0.9 million
in bankcard fees and $0.8 million in other income. The increases in fund
services income and corporate trust income are related to increased assets
administered as compared to the prior year. These increases were partially
offset by decreases of $12.0 million in brokerage fees and $4.7 million in bond
trading income. The decrease in brokerage fees is primarily due to lower 12b-1
and money market revenue and the decline in bond trading income is due to
decreased trading volumes. Noninterest expense increased $5.4 million, or 1.9%,
primarily driven by increases of $4.7 million in technology, service, and
overhead expenses and $4.5 million in processing fees. These increases were
partially offset by decreases of $2.8 million in salary and employee benefits
expense, and $1.3 million in equipment expense.

Table 10

OPERATING RESULTS OF THE INDIVIDUAL BANK (in thousands)

                                     Year Ended             Dollar       Percent
                                    December 31,            Change        Change
                                 2021          2020          21-20        21-20
Net interest income            $ 171,204     $ 148,948     $  22,256         14.9 %
Provision for credit losses        3,817        10,194        (6,377 )      (62.6 )
Noninterest income               112,010       115,880        (3,870 )       (3.3 )
Noninterest expense              252,517       263,087       (10,570 )       (4.0 )
Income (loss) before taxes        26,880        (8,453 )      35,333        418.0
Income tax expense (benefit)       4,764        (1,307 )       6,071        464.5
Net income (loss)              $  22,116     $  (7,146 )   $  29,262        409.5 %



For the year ended December 31, 2021, Personal Banking net income increased
$29.3 million as compared to the same period last year.  Net interest income
increased $22.3 million, or 14.9%, compared to the same period last year due to
increased loan balances. Provision for credit losses decreased $6.4 million. The
provision expense for 2020 was significantly impacted by the adoption of CECL,
coupled with the impacts of the COVID-19 pandemic on

                                       38
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the economic environment and reasonable and supportable economic forecasts. The
provision in 2021 represents substantial improvements in these
forecasts. Noninterest income decreased $3.9 million, or 3.3%, primarily driven
by a decrease of $3.8 million in trust income and $1.3 million in equity
earnings on alternative investments. Both decreases are related to the sale of
PCM in the first quarter of 2021. These decreases were partially offset by an
increase of $0.6 million in bankcard fees driven by higher interchange income.
Noninterest expense decreased $10.6 million, or 4.0%, primarily due to decreases
of $7.5 million in salary and employee benefits, $2.6 million in operational
losses, and $2.2 million in legal and consulting expense. These decreases were
partially offset by an increase of $1.8 million in marketing and business
development expense.

Balance sheet analysis

Loans and loans held for sale


Loans represent the Company's largest source of interest income. Loan balances
held for investment increased by $1.1 billion, or 6.6%, in 2021. This increase
was primarily driven by an increase of $374.5 million, or 19.3%, in consumer
real estate loans, $358.6 million, or 6.1%, in commercial real estate loans,
$196.0 million, or 2.8%, in commercial loans, and $91.4 million, or 47.9% in
lease and other loans.

Commercial & industrial loans and commercial real estate loans continue to
represent the largest segments of the Company's loan portfolio, comprising
approximately 42.3% and 36.5%, respectively, of total loans and loans held for
sale at the end of 2021 and 43.8% and 36.7%, respectively, of total loans and
loans held for sale at the end of 2020.

Commercial loans represent the largest percent of total loans. Commercial loans
at December 31, 2021 have increased $196.0 million, or 2.8%, as compared to
December 31, 2020, to 42.3% of total loans. Commercial loans represented 43.8%
of total loans at December 31, 2020. The Company's commercial loan balances have
been impacted by the Company's participation in the PPP. PPP loans totaled
$136.5 million and $1.3 billion as of December 31, 2021 and December 31, 2020,
respectively.

As a percentage of total loans, commercial real estate comprises 36.5% of total
loans compared to 36.7% in 2020. Commercial real estate loans increased $358.6
million, or 6.1%, compared to 2020. Generally, these loans are made for
investment and real estate development or working capital and business expansion
purposes and are primarily secured by real estate with a maximum loan-to-value
of 80%. Most of these properties are non-owner occupied and have guarantees as
additional security.

Consumer real estate loans increased $374.5 million, or 19.3%, and represented
13.5% of total loans. Specialty lending loans increased $11.1 million, or 2.2%,
and represented 3.0% of total loans as of December 31, 2021.

For more information on the segments of the loan portfolio, refer to Note 3, “Loans and allowance for credit losses”, in the notes to the consolidated financial statements.


Nonaccrual, past due and restructured loans are discussed under "Quantitative
and Qualitative Disclosure about Market Risk - Credit Risk Management" in Item
7A of this report.

Investment Securities

The Company's investment portfolio contains trading, available-for-sale (AFS),
and held-to-maturity (HTM) securities as well as FRB stock, Federal Home Loan
Bank (FHLB) stock, and other miscellaneous investments. Investment securities
totaled $13.8 billion as of December 31, 2021 and $10.6 billion as of December
31, 2020 and comprised 33.8% and 34.0% of the Company's earning assets,
respectively, as of those dates.

The Company's AFS securities portfolio comprised 86.7% of the Company's
investment securities portfolio at December 31, 2021, compared to 87.4% at
December 31, 2020. The Company's AFS securities portfolio provides liquidity as
a result of the composition and average life of the underlying securities. This
liquidity can be used to fund loan growth or to offset the outflow of
traditional funding sources. The average life of the AFS securities portfolio
decreased from 70.1 months at December 31, 2020 to 67.6 months at December 31,
2021. In addition to providing a potential source of liquidity, the AFS
securities portfolio can be used as a tool to manage interest rate

                                       39
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sensitivity. The Company’s objective in managing its portfolio of AFS securities is to maximize return within the Company’s liquidity, interest rate risk and credit risk objectives.


Management expects collateral pledging requirements for public funds, loan
demand, and deposit funding to be the primary factors impacting changes in the
level of AFS securities. There were $10.2 billion of AFS securities pledged to
secure U.S. Government deposits, other public deposits, certain trust deposits,
derivative transactions, and repurchase agreements at December 31, 2021. Of this
amount, securities with a market value of $171.2 million at December 31, 2021
were pledged at the Federal Reserve Discount Window but were unencumbered as of
that date.

The Company's HTM securities portfolio consists of private placement bonds,
which are issued primarily to refinance existing revenue bonds in the healthcare
and education sectors, and mortgage-backed securities. The Company's private
placement bond portfolio totaled $1.1 billion as of December 31, 2021, an
increase of $70.3 million, or 7.0%, from December 31, 2020. The Company's HTM
mortgage-backed securities portfolio totaled $396.1 million as of December 31,
2021. The average life of the HTM portfolio was 5.2 years at December 31, 2021,
compared to 6.1 years at December 31, 2020.

The securities portfolio generates the Company's second largest component of
interest income. The AFS, HTM, and Other securities portfolios achieved an
average yield on a tax-equivalent basis of 2.16% for 2021, compared to 2.45% in
2020. Securities available for sale had a net unrealized gain of $153.9 million
at year-end, compared to a net unrealized gain of $412.0 million the preceding
year. This market value change primarily reflects the impact of a larger
portfolio size, shorter average life, and declining mark interest rates as of
December 31, 2021, compared to December 31, 2020. These amounts are reflected,
on an after-tax basis, in the Company's Accumulated other comprehensive income
(loss) in shareholders' equity, as an unrealized gain of $118.5 million at
year-end 2021, compared to an unrealized gain of $314.5 million for 2020. The
AFS securities portfolio contains securities that have unrealized losses (see
the table of these securities in Note 4, "Securities," in the Notes to the
Consolidated Financial Statements). The unrealized losses in the Company's
investments were caused by changes in interest rates, and not from a decline in
credit of the underlying issuers. The U.S. Treasury, U.S. Agency, and GSE
mortgage-backed securities are all considered to be agency-backed securities
with no risk of loss as they are either explicitly or implicitly guaranteed by
the U.S. government. The changes in fair value in the agency-backed portfolios
are solely driven by change in interest rates caused by changing economic
conditions. The Company has no knowledge of any underlying credit issues and the
cash flows underlying the debt securities have not changed and are not expected
to be impacted by changes in interest rates. As of December 31, 2021, the
Company does not believe the decline in value in these portfolios is related to
credit impairments and instead is due to declining interest rates. The Company
does not have the intent to sell these securities and does not believe it is
more likely than not that the Company will be required to sell these securities
before a recovery of amortized cost. As of December 31, 2021, there is no ACL
related to the Company's available-for-sale securities as the decline in fair
value did not result from credit issues.

Included in Tables 11 and 12 are analyses of the fair value and average yield
(tax-equivalent basis) of securities available for sale and securities held to
maturity.

Table 11

SECURITIES AVAILABLE FOR SALE (in thousands)



                                                 U.S. Treasury Securities                  U.S. Agency Securities
                                                                   Weighted                                 Weighted
December 31, 2021                            Fair Value          Average Yield        Fair Value          Average Yield
Due in one year or less                    $            -                     - %   $            -                     - %
Due after 1 year through 5 years                   69,174                  0.85            124,932                  2.29
Due after 5 years through 10 years                      -                     -                  -                     -
Due after 10 years                                      -                     -                  -                     -
Total                                      $       69,174                  0.85 %   $      124,932                  2.29 %




                                       40
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                                                                                                State and Political
                                                  Mortgage-backed Securities                        Subdivisions
                                                                       Weighted                                Weighted
December 31, 2021                             Fair Value             

Average yield Fair value Average yield Maturity in one year or less

                    $          58,963                    2.33 %   $      163,373                2.30 %
Due after 1 year through 5 years                   4,362,831                    1.73            335,743                2.55
Due after 5 years through 10 years                 3,451,389                    1.76            728,909                2.60
Due after 10 years                                    91,872                    2.16          2,194,663                3.30
Total                                      $       7,965,055                    1.75 %   $    3,422,688                3.02 %



                                                     Corporates                  Collateralized Loan Obligations
                                                              Weighted                                Weighted
December 31, 2021                          Fair Value       Average Yield      Fair Value          Average Yield
Due in one year or less                   $      5,070                3.03 %   $        -                        - %
Due after 1 year through 5 years               229,789                1.78              -                        -
Due after 5 years through 10 years              82,987                3.16         27,612                     1.17
Due after 10 years                                   -                   -         49,207                     1.22
Total                                     $    317,846                2.17 %   $   76,819                     1.20 %




                                                 U.S. Treasury Securities                  U.S. Agency Securities
                                                                   Weighted                                 Weighted
December 31, 2020                            Fair Value          Average Yield       Fair Value           Average Yield
Due in one year or less                    $       20,102                  1.03 %   $         202                    1.89 %
Due after 1 year through 5 years                   10,638                  2.59            95,747                    2.68
Due after 5 years through 10 years                      -                     -                 -                       -
Due after 10 years                                      -                     -                 -                       -
Total                                      $       30,740                  1.55 %   $      95,949                    2.67 %



                                                                                               State and Political
                                                 Mortgage-backed Securities                        Subdivisions
                                                                      Weighted                                Weighted
December 31, 2020                             Fair Value           Average Yield          Fair Value        Average Yield
Due in one year or less                    $        171,564                  (3.18 )%   $      226,929                2.21 %
Due after 1 year through 5 years                  2,834,805                   2.19             450,435                2.36
Due after 5 years through 10 years                2,283,389                   1.99             641,051                2.63
Due after 10 years                                  178,423                   1.76           2,305,204                3.37
Total                                      $      5,468,181                   1.93 %    $    3,623,619                3.02 %



                                                Corporates
                                                         Weighted
December 31, 2020                     Fair Value       Average Yield
Due in one year or less              $          -                   - %
Due after 1 year through 5 years           55,249                2.98
Due after 5 years through 10 years         25,950                3.85
Due after 10 years                              -                   -
Total                                $     81,199                3.27 %






                                       41
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Table 12

SECURITIES HELD TO MATURITY (in thousands)

                                            State and Political Subdivisions         Mortgage-backed Securities
                                                                 Weighted                             Weighted
                                                                  Average                              Average
                                                               Yield/Average                        Yield/Average
December 31, 2021                           Fair Value           Maturity         Fair Value          Maturity
Due in one year or less                    $     17,797                  1.60 %   $        -                     - %
Due after 1 year through 5 years                156,927                  2.36        393,717                  1.54
Due after 5 years through 10 years              481,785                  2.49              -                     -
Due over 10 years                               392,165                  2.08              -                     -
Total                                      $  1,048,674                  2.30 %   $  393,717                  1.54 %




                                          State and Political Subdivisions
                                                                   Weighted
                                                                    Average
                                                                 Yield/Average
December 31, 2020                         Fair Value               Maturity
Due in one year or less              $              4,936                  1.78 %
Due after 1 year through 5 years                  126,901                  

2h30

Due after 5 years through 10 years                435,038                  2.47
Due over 10 years                                 462,569                  2.30
Total                                $          1,029,444                  2.37 %



The table below provides detailed information on the other titles at December 31, 2021 and 2020:


Table 13

OTHER SECURITIES (in thousands)

                                                                  December 31,
                                                               2021          2020
FRB and FHLB stock                                           $  36,222     $  33,222
Equity securities with readily determinable fair values         64,149      

134 197

Equity securities with no easily determinable fair value 226,727

 128,634
Total                                                        $ 327,098     $ 296,053



Equity securities with readily determinable fair values are generally traded on
an exchange and market prices are readily available. Equity securities with
readily determinable fair values includes the Company's investment in TTCF,
which had a fair value of $12.5 million as of December 31, 2021 and $106.9
million as of December 31, 2020. During 2021, the Company sold a portion of this
investment with a value of $79.0 million. Equity securities without readily
determinable fair values are generally carried at cost less impairment. Equity
securities without readily determinable fair values also include PCM alternative
investments in hedge funds and private equity funds, which are accounted for as
equity-method investments. During the first quarter of 2021, the Company sold
its membership interest in PCM. Unrealized gains or losses on equity securities
with and without readily determinable fair values are recognized in the
Investment Securities gains, net line of the Company's Consolidated Statements
of Income.

For further information on the Company’s investment securities, refer to Note 4, “Securities”, in the Notes to the Consolidated Financial Statements.

                                       42
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Other productive assets


Federal funds transactions essentially are overnight loans between financial
institutions, which allow for either the daily investment of excess funds or the
daily borrowing of another institution's funds in order to meet short-term
liquidity needs. The net borrowed position was $12.6 million at December 31,
2021 compared to $65.6 million at December 31, 2020.

The Bank buys and sells federal funds as agent for non-affiliated banks. Because
the transactions are pursuant to agency arrangements, these transactions do not
appear on the balance sheet and averaged $394.7 million in 2021 and $362.5
million in 2020.

At December 31, 2021, the Company held securities purchased under agreements to
resell of $1.2 billion compared to $1.7 billion at December 31, 2020. The
Company uses these instruments as short-term secured investments, in lieu of
selling federal funds, or to acquire securities required for collateral
purposes. Balances will fluctuate based on the Company's liquidity and
investment decisions as well as the Company's correspondent bank borrowing
levels. These investments averaged $1.2 billion in 2021 and $1.1 billion in
2020.

The Company also maintains an active securities trading inventory. The average
holdings in the securities trading inventory in 2021 were $23.5 million,
compared to $37.1 million in 2020, and were recorded at fair market value. As
discussed in "Quantitative and Qualitative Disclosures About Market Risk -
Trading Account" in Part II, Item 7A, the Company offsets the trading account
securities by the sale of exchange-traded financial futures contracts, with both
the trading account and futures contracts marked to market daily.

Interest-bearing due from banks totaled $8.8 billion as of December 31, 2021
compared to $3.1 billion as of December 31, 2020 and includes amounts due from
the FRB and interest-bearing accounts held at other financial institutions. The
amount due from the FRB averaged $4.0 billion and $1.2 billion during the years
ended December 31, 2021 and 2020, respectively. The increase in the FRB balance
from 2020 to 2021 is primarily due to an increase in deposit balances as a
result of the Company's participation in the PPP. The interest-bearing accounts
held at other financial institutions totaled $41.2 million and $43.1 million at
December 31, 2021 and 2020, respectively.

Deposits and borrowed funds


Deposits represent the Company's primary funding source for its asset base. In
addition to the core deposits garnered by the Company's retail branch structure,
the Company continues to focus on its cash management services, as well as its
asset management and mutual fund servicing businesses in order to attract and
retain additional core deposits. Deposits totaled $35.6 billion at December 31,
2021 and $27.1 billion at December 31, 2020, an increase of $8.5 billion, or
31.6%. Deposits averaged $28.9 billion in 2021, and $23.2 billion in 2020.

Noninterest-bearing demand deposits averaged $11.3 billion in 2021 and $7.8
billion in 2020. These deposits represented 38.9% of average deposits in 2021,
compared to 33.8% in 2020. The Company's large commercial customer base provides
a significant source of noninterest-bearing deposits. Many of these commercial
accounts do not earn interest; however, they receive an earnings credit to
offset the cost of other services provided by the Company.

Table 14

MATURITIES OF UNINSURED TERM DEPOSITS (in thousands)


                                           December 31,
                                        2021          2020
Maturing within 3 months              $ 318,112     $ 269,489

After 3 months but within 6 months 8,616 16,596 After 6 months but within 12 months 46,839 32,526 After 12 months

                          19,664        17,486
Total                                 $ 393,231     $ 336,097



From December 31, 2021There was $27.4 billion uninsured deposits, compared to $19.7 billion from December 31, 2020.

                                       43
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Table 15

ANALYSIS OF AVERAGE DEPOSITS (in thousands)


                                              December 31,
                                          2021             2020

Rising:

Noninterest-bearing demand            $ 11,254,761     $  7,845,667

Interest-bearing current and savings accounts 16,982,864 14,446,164 Term deposits $250,000

               242,017          488,346
Total core deposits                     28,479,642       22,780,177

Term deposits of $250,000 or more 453,241 401,982 Total deposits

                        $ 28,932,883     $ 23,182,159

As a % of total deposits:
Noninterest-bearing demand                    38.9 %           33.9 %
Interest-bearing demand and savings           58.7             62.3
Time deposits under $250,000                   0.8              2.1
Total core deposits                           98.4             98.3
Time deposits of $250,000 or more              1.6              1.7
Total deposits                               100.0 %          100.0 %



Capital resources and liquidity


The Company places a significant emphasis on the maintenance of a strong capital
position, which it believes promotes investor confidence, provides access to
funding sources under favorable terms, and enhances the Company's ability to
capitalize on business growth and acquisition opportunities. Higher levels of
liquidity, however, bear corresponding costs, measured in terms of lower yields
on short-term, more liquid earning assets, and higher expenses for extended
liability maturities. The Company manages capital for each subsidiary based upon
the subsidiary's respective risks and growth opportunities as well as regulatory
requirements.

Total equity increased $128.5 millioni.e. 4.3% to $3.1 billion at
December 31, 2021 compared to December 31, 2020.


The Board authorized, at its April 27, 2021, April 28, 2020, and April 23, 2019
meetings, the repurchase of up to two million shares of the Company's common
stock during the twelve months following each meeting (each a Repurchase
Authorization). During 2021 and 2020, the Company acquired 67,671 shares and
1,208,623 shares, respectively, of its common stock pursuant to the applicable
Repurchase Authorization. During March 2020, the Company entered into an
agreement with Bank of America Merrill Lynch (BAML) to repurchase an aggregate
of $30.0 million of the Company's common stock through an accelerated share
repurchase agreement (ASR). Under the ASR, the Company repurchased a total of
653,498 shares, which was completed during the second quarter of 2020. The ASR
was entered into pursuant to the April 23, 2019 Repurchase Authorization. The
Company has not made any repurchase of its securities other than pursuant to the
Repurchase Authorizations.

Risk-based capital guidelines established by regulatory agencies set minimum
capital standards based on the level of risk associated with a financial
institution's assets. The Company has implemented the Basel III regulatory
capital rules adopted by the FRB. Basel III capital rules include a minimum
ratio of common equity tier 1 capital to risk-weighted assets of 4.5% and a
minimum tier 1 risk-based capital ratio of 6%. A financial institution's total
capital is also required to equal at least 8% of risk-weighted assets.

The risk-based capital guidelines indicate the specific risk weightings by type
of asset. Certain off-balance sheet items (such as standby letters of credit and
binding loan commitments) are multiplied by credit conversion factors to
translate them into balance sheet equivalents before assigning them specific
risk weightings. The Company is also required to maintain a leverage ratio equal
to or greater than 4%. The leverage ratio is tier 1 core capital to total
average assets less goodwill and intangibles. The Company's capital position as
of December 31, 2021 is summarized in the table below and exceeded regulatory
requirements.

                                       44
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Table 16

CAPITAL AT RISK (in thousands)


This table computes risk-based capital in accordance with current regulatory
guidelines. These guidelines as of December 31, 2021, excluded net unrealized
gains or losses on securities available for sale from the computation of
regulatory capital and the related risk-based capital ratios.

                                                                   Risk-Weighted Category
                                     0%              20%              50%             100%           150%           Total
Risk-Weighted Assets
Loans held for sale             $          -     $          -     $     1,277     $          -     $       -     $      1,277
Loans and leases                     197,502           56,444       2,034,309       14,787,721        94,895       17,170,871
Securities available for sale      1,912,659        9,579,777          13,307          316,840             -       11,822,583
Securities held to maturity          206,368          209,778       1,064,270                -             -        1,480,416
Trading securities                     1,625            4,219          21,671            4,360             -           31,875
Cash and due from banks            8,901,154          354,573               -                -             -        9,255,727
All other assets                      26,394           24,465          35,457        1,424,229             -        1,510,545
Category totals                 $ 11,245,702     $ 10,229,256     $ 3,170,291     $ 16,533,150     $  94,895     $ 41,273,294

Risk-weighted totals            $          -     $  2,045,851     $ 1,585,146     $ 16,533,150     $ 142,343     $ 20,306,490
Off-balance-sheet items (3)                -           14,395          41,195        3,592,832             -        3,648,422
Total risk-weighted assets      $          -     $  2,060,246     $ 1,626,341     $ 20,125,982     $ 142,343     $ 23,954,912



                                         Total
Regulatory Capital
Shareholders' equity                  $ 3,145,424
Less adjustments (1)                     (259,848 )
Common equity Tier 1/Tier 1 capital     2,885,576
Additional Tier 2 capital (2)             438,708
Total capital                         $ 3,324,284



                                                                      Company
Capital ratios
Common Equity Tier 1 capital to risk-weighted assets                         12.05 %
Tier 1 capital to risk-weighted assets                                       12.05 %
Total capital to risk-weighted assets                                        13.88 %
Leverage ratio (Tier 1 capital to total average assets less
adjustments (1))                                                              7.61 %


(1) Adjustments include a portion of goodwill and intangibles as well as

unrealized capital gains/losses on available-for-sale securities, cash flow hedges,

     and the impact of the Company's election to use the five-year CECL
     transition.

(2) Includes the Company’s ACL (including the off-balance sheet reserve

agreements), subordinated long-term debt and preferred subordinated trust

Remarks.

(3) After application of credit conversion factor and risk weighting.

For more information on regulatory capital requirements, see note 10, “Regulatory requirements”, in the notes to the consolidated financial statements, under section 8.


Repurchase agreements are transactions involving the exchange of investment
funds by the customer for securities by the Company, under an agreement to
repurchase the same issues at an agreed-upon price and date. Securities sold
under agreements to repurchase and federal funds purchased totaled $3.2 billion
at December 31, 2021, and $2.3 billion at December 31, 2020. Repurchase
agreements and federal funds purchased averaged $2.6 billion in 2021 and $2.0
billion in 2020. The Company enters into these transactions with its downstream
correspondent banks, commercial customers, and various trust, mutual fund, and
local government relationships.

                                       45
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The Company is a member bank with the FHLB of Des Moines, and through this
relationship, the Company owns $10.0 million of FHLB stock and has access to
additional liquidity and funding sources through FHLB advances. The Company's
borrowing capacity is dependent upon the amount of collateral the Company places
at the FHLB. Based on the collateral pledged, the Company had $1.6 billion of
borrowing capacity at the FHLB at December 31, 2021. The Company had no
outstanding advances at FHLB Des Moines as of December 31, 2021.

To enhance general working capital needs, the Company has a revolving line of
credit with Wells Fargo Bank, N.A. which allows the Company to borrow up to
$30.0 million for general working capital purposes. The interest rate applied to
borrowed balances will be at the Company's option, either 1.25% above LIBOR or
1.75% below the prime rate on the date of an advance. The Company pays a 0.4%
unused commitment fee for unused portions of the line of credit. The Company had
no advances outstanding at December 31, 2021.

Long-term debt totaled $271.5 million at December 31, 2021, compared to $269.6
million at December 31, 2020. In September 2020, the Company issued $200.0
million in aggregate subordinated notes due in September 2030. The Company
received $197.7 million, after deducting underwriting discounts and commissions
and offering expenses, and used the proceeds from the offering for general
corporate purposes, including, among other uses, contributing Tier 1 capital
into the Bank. The subordinated notes were issued with a fixed-to-fixed rate of
3.70% and an effective rate of 3.93%, due to issuance costs, with an interest
rate reset date of September 2025. The remainder of the Company's long-term debt
was assumed from the acquisition of Marquette and consists of debt obligations
payable to four unconsolidated trusts (Marquette Capital Trust I, Marquette
Capital Trust II, Marquette Capital Trust III, and Marquette Capital Trust IV)
that previously issued trust preferred securities. These long-term debt
obligations had an aggregate contractual balance of $103.1 million and had a
carrying value of $73.2 million at December 31, 2021 and $71.7 million at
December 31, 2020. Interest rates on trust preferred securities are tied to the
three-month LIBOR with spreads ranging from 133 basis points to 160 basis points
and reset quarterly. The trust preferred securities have maturity dates ranging
from January 2036 to September 2036. For further information on long-term debt
refer to Note 9, "Borrowed Funds," in the Notes to the Consolidated Financial
Statements.

The Company has material off-balance sheet arrangements in the form of loan
commitments, commercial and standby letters of credit, futures contracts and
forward exchange contracts, which have maturity dates rather than payment due
dates. These commitments and contingent liabilities are not required to be
recorded on the Company's balance sheet. Since commitments associated with
letters of credit and lending and financing arrangements may expire unused, the
amounts shown do not necessarily reflect the actual future cash funding
requirements. See Table 17 below, as well as Note 15, "Commitments,
Contingencies and Guarantees" in the Notes to Consolidated Financial Statements
under Item 8 for detailed information and further discussion of these
arrangements. Management does not anticipate any material losses from its
off-balance sheet arrangements.

Table 17

COMMITMENTS, MATERIAL CASH REQUIREMENTS AND OFF-BALANCE SHEET ARRANGEMENTS (in thousands)


The table below details the commitments, material cash requirements, and
off-balance sheet arrangements for the Company as of December 31, 2021 and
includes principal payments only. The Company has no capital leases or long-term
purchase obligations.

                                                                Payments due by Period
                                                      Less than 1                                     More than 5
                                         Total            year         1-3 years       3-5 years         years
Material Cash Requirements
Federal funds purchased and
repurchase agreements                 $ 3,225,838     $  3,225,588     $        -     $         -     $       250
Long-term debt obligations                273,213                -              -               -         273,213
Operating lease obligations                72,238           12,398         20,100          16,375          23,365
Time deposits                             851,641          734,551         92,044          20,910           4,136
Total                                 $ 4,422,930     $  3,972,537     $  112,144     $    37,285     $   300,964




                                       46
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                                                                Maturities due by Period
                                                       Less than 1                                      More than 5
                                         Total             year          1-3 years       3-5 years         years
Commitments, Contingencies and
Guarantees
Commitments to extend credit for
loans (excluding credit card loans)   $ 10,122,617     $  4,246,041     $ 3,906,483     $ 1,270,424     $   699,669
Commitments to extend credit under
credit card loans                        3,743,165        3,743,165               -               -               -
Commercial letters of credit                 2,754            2,754               -               -               -
Standby letters of credit                  365,030          264,424          83,809          16,797               -
Forward contracts                            9,729            9,729               -               -               -
Spot foreign exchange contracts              2,946            2,946               -               -               -
Total                                 $ 14,246,241     $  8,269,059     $ 3,990,292     $ 1,287,221     $   699,669



As of December 31, 2021, the Company's total liabilities for unrecognized tax
benefits were $8.8 million. The Company cannot reasonably estimate the
settlement of these liabilities. Therefore, these liabilities have been excluded
from the table above. See Note 16, "Income Taxes," in the Notes to the
Consolidated Financial Statements for information regarding the liabilities
associated with unrecognized tax benefits.

For further analysis of capital and liquidity, see “Quantitative and Qualitative Disclosures of Market Risk – Liquidity Risk” in Section 7A of this report.

Significant Accounting Policies and Estimates


Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's Consolidated Financial Statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America (GAAP). The preparation of these Consolidated Financial
Statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
liabilities at the date of the Consolidated Financial Statements and the
reported amounts of revenues and expenses during the reporting period. On an
on-going basis, management evaluates its estimates and judgments, including
those related to customers and suppliers, allowance for credit losses, bad
debts, investments, financing operations, long-lived assets, taxes, other
contingencies and litigation. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which have formed the basis
for making such judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Under different assumptions or
conditions, actual results may differ from the recorded estimates.

Management believes that the Company’s significant accounting policies and estimates are those relating to the allowance for credit losses.

Provision for credit losses


The Company's ACL represents management's judgment of the total expected losses
included in the Company's assets held at amortized cost. The Company's process
for recording the ACL is based on the evaluation of the Company's lifetime
historical loss experience, management's understanding of the credit quality
inherent in the loan portfolio, and the impact of the current economic
environment, coupled with reasonable and supportable economic forecasts.

A mathematical calculation of an estimate is made to assist in determining the
adequacy and reasonableness of management's recorded ACL. To develop the
estimate, the Company follows the guidelines in ASC Topic 326, Financial
Instruments - Credit Losses. The estimate reserves for assets held at amortized
cost, which include the Company's loan and held-to-maturity security
portfolios.

The estimation process involves the consideration of quantitative and
qualitative factors relevant to the specific segmentation of loans. These
factors have been established over decades of financial institution experience
and include economic observation and loan loss characteristics. This process is
designed to produce a lifetime estimate of the losses, at a reporting date, that
is based on evaluation of historical loss experience, current economic

                                       47

————————————————– ——————————


conditions, reasonable and supportable forecasts, and the qualitative framework
outlined by the Office of the Comptroller of the Currency in the published 2020
Interagency Policy Statement. This process allows management to take a holistic
view of the recorded ACL reserve and ensure that all significant and pertinent
information is considered in its estimate.

The Company considers a variety of factors to ensure the safety and soundness of
its estimate including a strong internal control framework, extensive
methodology documentation, credit underwriting standards which encompass the
Company's desired risk profile, model validation, and ratio analysis. If the
Company's total ACL estimate, as determined in accordance with the approved ACL
methodology, is either outside a reasonable range based on review of economic
indicators or by comparison of historical ratio analysis, the ACL estimate is an
outlier and management will investigate the underlying reason(s). Based on that
investigation, issues or factors that previously had not been considered may be
identified in the estimation process, which may warrant adjustments to estimated
credit losses.

The ending result of this process is a recorded consolidated ACL that represents
management's best estimate of the total expected losses included in the loan and
held-to-maturity security portfolios considering available information, from
internal and external sources, relevant to assessing exposure to credit loss
over the contractual term of the instrument. While management utilizes its best
judgment and information available, the ultimate adequacy of the ACL is
dependent upon a variety of factors beyond the Company's control, including the
performance of its portfolios, the economy, and changes in interest rates. As
such, significant downturns in circumstances relating to loan quality and
economic conditions could result in a requirement for additional
allowance. Likewise, an upturn in loan quality and improved economic conditions
may allow a reduction in the required allowance. In either instance,
unanticipated changes could have a significant impact on the Company's Provision
for credit losses and ACL reported in its Consolidated Income Statements and
Consolidated Balance Sheets, respectively.

For more information on loan portfolio segments, the Company's ACL methodology,
and management's assumptions in estimating the ACL, refer to the section
captioned "Allowance for Credit Losses" within Note 3, "Loans and Allowance for
Credit Losses," in the Notes to the Consolidated Financial Statements.

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First Financial: Leading and Successful TX Franchise (NASDAQ: FFIN) https://freebassuk.com/first-financial-leading-and-successful-tx-franchise-nasdaq-ffin/ Wed, 23 Feb 2022 16:37:00 +0000 https://freebassuk.com/first-financial-leading-and-successful-tx-franchise-nasdaq-ffin/ Luis M/iStock via Getty Images Overview First Financial Bankshares, Inc. (FFIN) is a Texas-based $13 billion commercial bank. It accepts checking, savings and money market accounts, as well as term deposits; and offers home, commercial, agricultural, and consumer loans to businesses, professionals, individuals, and farms and ranches. As of December 31, 2020, it had 78 […]]]>

Luis M/iStock via Getty Images

Overview

First Financial Bankshares, Inc. (FFIN) is a Texas-based $13 billion commercial bank. It accepts checking, savings and money market accounts, as well as term deposits; and offers home, commercial, agricultural, and consumer loans to businesses, professionals, individuals, and farms and ranches. As of December 31, 2020, it had 78 financial centers across Texas.

From a loan portfolio perspective, the bank is a commercial lender with real estate accounting for approximately 70% of the loan portfolio. Commercial property accounts for more than half of the property loan portfolio. C&I represents 20% of the portfolio. Consumer and auto loans are around 10% and 8% respectively. The bank’s credit quality is at the forefront of the industry, posting less than 1% NPL over the years. COVID 19 has caused NPLs to increase, but it is not significant and has been well managed. The 2021 provisioning reversal suggests that 2020 credit losses were not as severe as initially estimated.

In terms of funding mix, DC is only a tiny fraction of the total funding mix, around 4%. The cost of financing is considerably lower than its peers, given the strong deposit franchise.

The bank is relatively well managed from a cost discipline perspective. An average efficiency rate of 40% is industry leading. The management team mentioned plans to pursue acquisitions in key growth markets with assets between $1 billion and $3 billion. Investors should expect both cost reduction/system integration and further growth from acquisitions.

Historically, the bank has used acquisitions to penetrate major markets. In the last three trades that closed, two trades are paid for via expensive stocks, trading at around 30x P/E. The acquisition of Commercial Bancshares was financed with a combination of cash and equity which sold at ~54x P/E. The management team has been creative in using an attractive currency to historically drive expansion in key markets.

  • September 19, 2019 TB&T Bancshares, Inc.
  • October 12, 2017 Commercial Bancshares, Inc.
  • 01-Apr-2015 FBC Bancshares, Inc.

History of mergers and acquisitions

Company deposits

The last thing that deserves special attention is the bank’s trust and wealth management franchise. The wealth management business has grown steadily over the past few years and as such the contribution of fees to total revenue has increased, reducing the bank’s dependence on earnings from the balance sheet to over time.

Transaction Review

First Financial Bankshares, Inc. (FFIN) reported net income of $227.6 million for fiscal 2021, compared to $202.0 million for the prior year. Earnings per share were $1.59 versus $1.42 a year earlier. Revenue for the year increased to $513.7 million from $470.3 million in fiscal 2020. During the fourth quarter, First Financial Bankshares, Inc. reported an ROA and ROE of 1 .7% and 12.7%, respectively. The efficiency ratio is 46.2% and the net interest income/income is 74.3%.

From a profitability perspective, the bank has consistently generated a return on investment above 1% over the past five years, particularly in FY20, with credit losses that are only comparable to historical averages. The improvement in the efficiency ratio reflects the discipline of cost management. The ability to generate more than 2% return on investment from 2018 to 2020 is impressive and is the result of cost discipline, fee growth, high quality deposit franchise and credit quality.

Historical balance sheet growth has also been impressive. As regular readers of commercial banking analysis know, commercial banking generates profits through the balance sheets. Asset growth, typically used as a proxy for loan growth, drives overall NIM-driven profitability. Growth in non-interest income shows how the bank has improved to diversify its income. Net income vs. asset growth and non-interest income growth will tell investors how efficiently this bank is operating, and finally, EPS growth vs. net income growth shows the effectiveness of the management team in deploying capital (i.e. share buybacks) . Over the past six years, total assets, non-interest income, net income and EPS have increased by 14%, 11%, 15% and 15% respectively. Given the bank’s central location in the fast-growing Texas markets, we continue to view population migration as the tailwind supporting strong growth expected in the future.

Operation matrix

Corporate documents, 10K

Evaluation

The stock is priced at 29.6x P/E and 4.6x P/TBV.

Evaluation

Business Deposits, CapIQ

Risk/Reward

From a risk perspective, the only downside is the high valuation, both from a P/E and P/TBV perspective. The bank has delivered strong operating results and a reduction in loan growth will hurt the valuation.

From a compensation perspective, the bank’s fundamentals are very strong. Credit quality is industry leading, deposit supply is top notch, geographic exposure will continue to drive growth, the bank has several different levers to drive growth through both organic and acquisitions.

Conclusion

In our opinion, First Financial is a top quality bank. Although we like the fundamentals, however, on a relative return basis, we like SVB Financial (SIVB) much more. As described in our previous article, SIVB has a strong franchise that will benefit from a secular growth trajectory. Our view is that the growth trajectory for technology and life sciences can potentially outlast the attractiveness of the TX market. Additionally, SIVB sells at much more attractive multiples compared to First Financials. On a stand-alone basis, we like First Financial. In relative terms, we found SIVB more attractive.

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