C. Earnings

In this section, you need to evaluate earnings by assessing:

Financial Ratios - Trends and Comparisons with Peers Bank Name: Northern Bank 8; Trust Compnay (R55D:900306) Amounts In: Dollars Comparison Period: of Bank Statement Type: YTD 613012019 Peer Ratios to the Date:11l'19.1|2019 2016 2011' 2018 2019 Trend Norm Peer Norms Financial Summary Total Gross Loans 81 Leases [1) 1.500.018 1.032.941 1.913.618 1.917.019 Less Loan 5. Lease Loss Allowance [2} 21,044 23,150 24,161 25,632 Net Loans 8: Leases (3:1-2] 1.418.914 1.009.191 1.889.451 1.891.381 Total Investments (4.) 130,417 159,413 172,902 155,209 Total Earning Assets (5:344) 1.609.391 1.969.210 2.062.253 2.046.595 Noninterest Cash & Due from Banks [6) 3.332 4.222 5.885 5.306 Other Assets [7) 90,513 95,199 94,171 99,595 Total Assets (8:964?) 1.693.236 2.068.601 2.162.309 2.150.496 Core Deposits (9) 993,999 1,115,299 1,401,774 1,455,703 Other Deposits (10) 447,222 5m.992 390.479 371.544 Total Deposits (11:91-10) 1,341,111 1,572,171 1,792,253 1,929,247 Other Borrowings [12) 172.195 193.901 143.154 76.909 Total Liabilities (13:11+12) 1,513,905 1,095,072 1,939,007 1,905,155 Total Equity Capital (14) 179,330 202,529 225,302 245,339 Total Liabilities 8: Capital 1.693.236 2.068.601 2.162.309 2.150.495 Income on Loans 81 Leases [15) 74.114 92.635 105.692 53.549 Investment Interest Income [16) 160 366 966 533 Interest Income from Other Sources (1 T) 316 603 1,159 512 Total Interest Income (18:151-16417) 15.250 94.154 101.811 59.954 Total Interest Expense on Deposits [19) 9,612 14,518 21,311 13,049 Total Other Interest Expense [20) Total Interest Expense (21:191-20) 9.612 14.518 21.311 13,049 Net Interest Income (22:19-21) 65.518 19.636 96.500 46,905 Total Noninterest Income [23} 4.399 5.108 5.111 3.656 Income on Loans & Leases (1'5) 74,114 92,635 105,692 53,349 Investment Interest Income [16} 1'60 366 966 53 Interest Income from Other Sources [17} 376 603 1,159 572 Total Interest Income (136191917) 75,250 94,154 107.81? 59,954 Total Interest Expense on Deposits (19} 9,672 14,513 21 ,31? 13,049 Total Other Interest Expense (20} Total Interest Expense (2161920) 9,672 14,518 21.31? 13,049 Net Interest Income (22:18-21) 65.573 79,636 36.500 46,905 Total Noninterest Income (23) 4,399 5,103 5,17? 3,656 Total Noninterest Expense (24} 30,051 34,130 40,549 21,311 Provision for Loan & Lease Losses (25} 4,415 3,120 3,323 3,661 Realized Gain(Loss} on Secs (26} 1 (10?) (35) 35 Pretax Net Operating Income (27:2323-24-25426) 36.012 4?,337 42.765 25.624 Applicable Income Taxes (23} 14,193 23,059 11,643 1230 Net Operating Income (29:27-28) 21.319 24,278 31.11? 18,394 Net Extraordinary Items (30) - - - Net Income (31:29:10] 21.819 24,278 31.11? 18,394 Total Revenuefl'otal Operating Income (321923426) 30.150 99,155 112.959 63,645 Total Operating Expense (33:214-241-25) 44.133 51,318 70.194 33.021 Supplemental Data Average total assets 1,511,663 1,3?0,?32 2,059,333 2,126,559 Average total equity "9,330 202,529 226,302 245,339 Domestic Banking Offices 1300 12 12 12 Foreign Branches - - - - Personnel Expenses 11609.00 19,610 23,543 12,0?6 Risk-based Capital Net Tier 1 Capital 131 ,776 206,331 229,000 24?,391 Net eligible Tier 2 20,493 23,335 24,425 25,004 Tier 3 - - - - Deductions - - - - Total risk-basedcapital 202,274 230,216 253,425 272,395 Total ris k-weighted assets 1,633,943 1,963,243 2,054,431? 1,999,141? Loan Loss Account Credit Allowance Beginning Balance 16,850 21,044 23, 150 24, 167 Gross Credit Losses 2,415 1,280 7,418 2,232 Loans HFS writedowns Recoveries 2, 194 266 107 36 Net Credit Losses 221 1,014 7,311 2, 196 Provisions for Credit Losses 4.415 3,120 8,328 3.661 Other adjustments Credit Allowance Ending Balance 21,044 23, 150 24,167 25,632 Average total loans & leases 1,348,472 1,702,799 1,868,210 1,941,674 Noncurrent Loans & Leases 90 days and over past due 124 8 Total nonaccrual In&Is 2,363 24,752 41,363 11,119 Total non-current In&Is 2,363 24,752 41,487 11,127 Ln&Ls 30-89 days past due 19, 141 775 2,281 804 Misc restructured In&Is 1,255 23,782 15,422 4,563 All other real estate owned 603 603 192 Capital Adequacy Tier 1 Leverage Capital Ratio 10.12% 10.33% 10.30% 11.05% Tier 1 Risk-Based Capital Ratio 11.09% 10.54% Total Risk-Based Capital Ratio 11.15% 12.37% 12.34% 11.73% 12.34% 13.63% Total Equity/Total Assets 10.59% 9.79% 10.47% 11.41% Growth in equity 37.75% 12.94% 11.74% 8.41% Asset Quality Asset Growth Rate 20.3% 22.2% 4.5% -0.5% Non-current Loans and Leases to Gross Loans and Leases 0. 16% 1.35% 2.17% 0.58% Net Credit Losses to Average Total Loans and Leases 0.02% 0.06% 0.39% 0. 11% Loan and Lease Allowance to Total Loans 1.40% 1.26% 1.26% 1.34%Management Assets per employee (in millions) 9.3 11.82 10.81 10.29 Loans per employee (=Loans to assets x Assets per employee) $7.96 $10.33 $9.45 $9.02 Net income per employee (in thous - ROA x Assets per employee) $134.23 $153.40 $163.30 $178.01 Earnings Record Net Income/Average Total Assets (ROA) 1.44% 1.30% 1.51% 0.017299308 Interest Income/Average Total Assets 4.98% 5.03% 5.23% 0.056385927 Interest Expense/Average Total Assets 0.64% 0.78% 1.03% 0.012272408 Net Interest Margin(Net Int Inc/Av Earning Assets) 4.46% 4.45% 4.29% 4.57% Non-Interest Income/Average Total Assets 0.32% 0.27% 0.25% 0.003438419 Non-interest Expenses/Average Total Assets 1.99% 1.83% 1.97% 0.020042707 Provision for Loan Losses/Average Total Assets 0.29% 0.17% 0.40% 0.003443121 Personnel Expenses/Average Total Assets 1.16% 1.05% 1.14% 0.011357315 Yield on Total Loans & Leases 5.50% 5.44% 5.66% 0.060616767 Average Earning Assets/Average Total Assets 94.87% 95.13% 95.29% 95.27% Return on Equity (ROE) 14.10% 12.72% 14.51% 15.60% Net Profit Margin (NPM) 27.22% 24.48% 27.55% 28.90% Degree of Asset Utilization (AU) 5.30% 5.30% 5.48% 0.059857262 Equity Multiplier (EM) 10.02 9.85 9.87 9.14 Efficiency ratio 42.64% 40.33% 44.23% 42.15% Liquidity Net Non-Core Funding Dependence Ratio Average Net Loans to Average Total Assets 85.64% 87.42% 87.43% 87.67% Average Core Deposit/Average Total Assets 55.49% 53.41% 59.49% 66.28% Net Loans to Total Deposits 110.28% 108.23% 105.42% 103.45% Sensitivity to Market Risk Net Position Gap 1 year 53.83% 49.56% 42.40% 47.60% Net Position Gap 3 year 39.4% 40.01% 38.3% 39.5%Average Data Average Equity Capital 154,757 190,930 214,416 235,821 Average Earning Assets 1,470,897.50 1,789,301 2,015,732 2,054,424 Average Total Assets 1,550,357.50 1,880,919 2,115,455 2, 156,403 Average Core Deposits 860,351 1,004,589 1,258,532 1,429,239 Average Net Loans & leases 1,327,671.50 1,644,386 1,849,624 1,890,419 Average Gross Loans & Leases 1,346,618.50 1,666,483 1,873,283 1,915,319 Average Total Deposits 1,274,987 1,506,641 1,810,250 Average Tier 1 Capital 1,732,212 156,871.50 194,329 217,941 238, 196 Average Total risk-based-capital 175,302.50 216,245 241,821 262,910 Average total risk-weighted assets 1,473,864.50 1,801,093 2,008,865 2,026,817