NEWBRIDGE BANCORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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Exhibit 99.1

NewBridge Bancorp (NASDAQ: NBBC) Announces Solid Fourth Quarter,
Full Year 2014 Results Reflecting 24% Increase in Pre-tax Earnings for the Year

GREENSBORO, N.C., JANUARY 28, 2015 –

Fourth Quarter 2014 Highlights (Quarterly, Year-Over-Year)

Net income available to common shareholders totaled $4.3 million, up from $1.2 million

Net income per diluted share rose to $0.11, up from $0.04

Net interest income grew 26% to $21.3 million

Noninterest-bearing deposits increased 33%, or $78.3 million, and total core deposits grew 16%

Loans held for investment increased by 4.8%, or $83.4 million, during the fourth quarter

Return on average equity was 7.33%, up from 3.45%

Tangible book value per share increased to $5.50, up from $5.04

Year-End 2014 Financial Highlights (December 31, 2014 vs. December 31, 2013)

Total assets increased by $555.0 million to $2.5 billion, driven by acquisitive and organic growth

Total loans held for investment were $1.8 billion, up from $1.4 billion

Nonperforming assets declined to 0.41% of total assets from 0.87%

Wealth management revenues increased 13.6%

Capital Adequacy, Shareholder Value (December 31, 2014 vs. December 31, 2013)

Tier one leverage and total risk-based capital ratios increased to 8.57% and 12.23%, respectively, from 8.30% and 11.67%

Tangible common equity to tangible assets increased to 8.21% from 7.33%

Total shareholders common equity increased to $231.4 million from $151.8 million

Key 2014 Accomplishments

Acquired CapStone Bank resulting in expanded operations in Raleigh, N.C.

Established middle market banking group, reorganized commercial banking operation into specialized teams

Named nation’s #4 lender in the U.S. Treasury Department’s State Small Business Credit Initiative

Opened Charleston and Greenville, S.C. loan production offices

Expanded operations in Charlotte and Winston-Salem, N.C.

Strengthened capital structure, redeeming preferred stock and issuing subordinated debt

Announced planned acquisition of Premier Commercial Bank, a $173 million asset bank based in Greensboro, N.C., to add commercial banking clients and assets, and residential mortgage banking in several North Carolina markets. The acquisition is expected to close in first quarter 2015.

NewBridge Bancorp (the “Company”) today reported earnings for the three and twelve month periods ended December 31, 2014. Net income available to common shareholders totaled $4.3 million, or $0.11 per diluted share, for the quarter, compared to $1.2 million, or $0.04 per diluted share, for the quarter ended December 31, 2013. For the twelve months ended December 31, 2014, net income available to common shareholders totaled $13.6 million compared to $18.9 million for the prior year period. Acquisition related expenses totaled $171,000 for the quarter and $5.1 million for the year ended December 31, 2014 compared to $2.2 million for the quarter and year ended December 31, 2013. Results for 2013 were positively affected by a tax benefit of $3.2 million that resulted from a reversal of a deferred tax asset valuation allowance of $10.5 million. Pre-tax core net operating income, a non-GAAP measure that excludes tax provision and acquisition related expenses, increased 41% to $26.9 million for the twelve months ended December 31, 2014, from $19.1 million in the prior year.

Pressley A. Ridgill, President and CEO, commented: “It was an eventful year for NewBridge as we strengthened our foundation for anticipated future growth through prudent acquisitions, organic market expansion, and by optimizing our operating structure. We added teams of highly experienced commercial bankers with the potential to significantly increase revenue. Asset growth of 28% year-over-year reflects our successful strategy to increase our geographic footprint in key selected markets. We have expanded beyond our focus in the Triad region of North Carolina to serve the most rapidly growing commercial markets in North and South Carolina. We enhanced the productivity and efficiency of our commercial and retail banking teams and continue to build upon our low-cost core deposit franchise. The addition of a middle market banking team has been transformative, significantly bolstering our current and projected growth rates. This team has also dramatically improved and expanded our treasury management operations, enabling us to better serve larger corporations in our markets.”

Net Interest Income

Net interest income increased 26.0%, or $4.4 million, to $21.3 million for the quarter ended December 31, 2014 compared to the quarter ended December 31, 2013. This increase was due primarily to a rise in the average balance of earning assets, primarily loans, following the acquisition of CapStone Bank and organic growth during the past year. For the twelve months ended December 31, 2014, net interest income increased to $78.7 million compared to the $63.2 million for the prior year period. For the twelve months ended December 31, 2014, net interest margin declined 19 basis points to 3.70%, compared to the prior year period. Strong interest expense management helped mitigate margin pressure in a continued low interest rate environment.

Noninterest Income

Total noninterest income for the fourth quarter of 2014 was the same as for the fourth quarter of 2013. Quarterly wealth management revenue grew to $771,000 from $638,000, or 20.8%, while retail banking decreased $121,000, or 4.6%, to $2.5 million and mortgage banking decreased $80,000, or 26.9%, to $217,000. For the twelve months ended December 31, 2014, total noninterest income was $16.7 million compared to $17.5 million for the prior year. Retail banking revenues in 2014 increased $196,000, or 1.9%, wealth management revenue climbed $349,000, or 13.6%, and other sources of noninterest income increased $268,000, or 31.6%. Mortgage banking revenue decreased $774,000, or 47.1%, to $870,000 from $1.6 million during the same period last year due to a significantly lower level of mortgage loan production resulting from increases in mortgage interest rates. The Company recognized gains on the sale of investment securities of $736,000 during 2013 while no gains or losses were recognized in 2014.

Noninterest Expense

For the quarter, noninterest expense increased 1.2%, or $218,000, to $18.6 million; this includes $171,000 in acquisition related expenses and a 14.1% increase in personnel expenses, primarily reflecting additional employees from acquisition and new hires as the Company increased its presence within several markets. The quarter’s noninterest expense also reflected an elevated level of several categories of expense including legal and professional fees, other real estate owned write-downs, marketing expense and mortgage buyback and other miscellaneous losses compared to previous quarters of 2014. In total, the excess of these expenses over the previous three quarters averages were $367,000 after-tax, or $0.01 per share. For the year, noninterest expense was $72.7 million, an increase of $12.3 million, or 20.4%, compared to 2013, and included $5.1 million in acquisition related expenses.

Spence H. Broadhurst, Senior EVP and Chief Banking Officer, commented: “We made significant investments during the year to build our team of talented, experienced bankers to serve a greatly expanded market. Simultaneously, we made numerous organizational changes to generate increased productivity and efficiency. We realigned our retail banking operations, which included prudent headcount reductions and improved product and service cross-selling and training. We also revamped our commercial banking organizational structure to align small business, commercial and industrial, real estate and middle market lending into specialized teams. We expect the investments in personnel and operating enhancements to drive revenue growth in the coming periods.”

Balance Sheet

Total assets grew $77.5 million during the quarter and $555.0 million during the year to $2.52 billion at December 31, 2014. Loans held for investment increased $83.4 million, or 4.8%, for the fourth quarter and $387.7 million, or 27.4%, during the twelve month period, to $1.8 billion at December 31, 2014. The Company’s success in expanding its loan portfolio is attributed to a balanced strategy of organic and acquired loan growth. In the most recent quarter, the middle market team, which focuses on commercial and industrial loan customers with revenues between $25 million and $250 million, had new loan production totaling $99.7 million, which included $75.7 million of credit relationships previously existing with the team. The Company’s investment portfolio increased during the year to $496.8 million at December 31, 2014, compared to $368.9 million a year earlier. Growth in the investment portfolio was primarily attributable to increases in U.S. government agency issued securities and select corporate debt securities. At December 31, 2014 the average duration of the investment portfolio declined to 4.08 years from 4.96 years at year-end 2013, and remains liquid, with an average yield of 3.38%.

Total liabilities increased $74.6 million during the quarter and $490.4 million during the twelve month period, including a $278.6 million increase in deposits. Total deposits were $1.83 billion at December 31, 2014. Core transaction, savings and money market accounts were 70% of the Company’s deposits and totaled $1.28 billion at December 31, 2014. Noninterest-bearing deposits increased $8.9 million, or 2.9%, to $319.3 million during the quarter ending December 31, 2014. Time deposits were $549.4 million at December 31, 2014, compared to $451.9 million at December 31, 2013. The average cost of interest bearing liabilities declined to 0.40% at December 31, 2014, from 0.43% at year-end 2013. Total borrowings were $438.5 million at December 31, 2014, compared to $229.8 million at December 31, 2013, with the increase primarily reflecting the Company’s use of attractively priced Federal Home Loan Bank borrowings as part of its overall funding strategy. The Company’s average cost of borrowings in 2014 was 0.99%, down from 1.50% in 2013.

In March 2014, the Company issued $15.5 million of subordinated debt. The subordinated debt was issued as an efficient form of regulatory tier 2 eligible capital, and the proceeds were used to redeem the remaining TARP preferred stock. The weighted average cost of the subordinated debt is 7.25%; however, the after tax cost to common shareholders is below 5.00%.

Shareholders’ equity increased to $231.4 million at December 31, 2014, compared to $166.8 million at December 31, 2013. Retained earnings increased $4.3 million and common equity increased $2.9 million during the fourth quarter. Key events in 2014 that impacted shareholders equity included a first quarter decline of $10.0 million due to the redemption of $15.0 million of preferred stock, partially offset by total comprehensive income of $1.8 million during the quarter, and a $64.2 million increase in the second quarter of 2014 as a result of the acquisition of CapStone Bank and the exercise of stock options previously issued by CapStone Bank. The Company’s tangible book value rose from $5.04 per share at December 31, 2013 to $5.50 at December 31, 2014.

Asset Quality

Asset quality reflected continued improvement throughout 2014. Nonperforming assets at December 31, 2014 declined to $10.3 million from $17.0 million a year earlier. The percentage of nonperforming assets to total assets declined to 0.41% at December 31, 2014, compared to 0.87% a year earlier. Total nonperforming loans declined to $7.2 million at December 31, 2014, compared to $9.4 million at December 31, 2013. As a percentage of total assets, nonperforming loans decreased by 19 basis points, or 39.6% at December 31, 2014, compared to a year earlier. Net chargeoffs were $439,000 for the three month period ending December 31, 2014, or 0.10% of loans on an annualized basis. Net chargeoffs decreased from $4.8 million in 2013 to $3.3 million in 2014. The allowance for credit losses was $22.1 million at December 31, 2014, or 1.23% of total loans held for investment and 306.6% of nonperforming loans.

Outlook

Mr. Ridgill commented on the outlook for NewBridge: “As the Company expanded in 2014, we further established our position as a prudently managed regional franchise in key markets throughout the Carolinas. Improvements in our retail banking operation are expected to take root in the coming year, and we expect to see tangible organic growth in the newer geographic markets we have entered. The addition of our middle market commercial banking team, expansion of the Bank’s treasury management capabilities, and enhanced commercial banking operational structure are expected to demonstrate continued momentum. Concerning additional expansion efforts, we anticipate completing the Premier Commercial Bank acquisition in the first quarter of 2015 and then will focus on integration and gaining efficiencies from the recent initiatives. We operate the Bank with guiding principles that promote excellence throughout the organization, and we expect these deep rooted values to deliver consistent growth in shareholder value.”

About NewBridge Bancorp

NewBridge Bancorp is the bank holding company for NewBridge Bank, a full service, state-chartered community bank headquartered in Greensboro, North Carolina. The stock of NewBridge Bancorp trades on the NASDAQ Global Select Market under the symbol “NBBC.”

As one of the largest community banks headquartered in North Carolina, NewBridge Bank serves small to midsize businesses, professionals and consumers with a comprehensive array of financial services, including retail and commercial banking, private banking, wealth management and mortgage banking. NewBridge Bank has assets of approximately $2.5 billion and 40 branches and several loan production offices.

Disclosures About Forward Looking Statements

The discussions included in this document and its exhibits may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of NewBridge and its management about future events. The accuracy of such forward looking statements could be affected by factors including, but not limited to, the financial success or changing conditions or strategies of NewBridge’s customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel or general economic conditions. These forward looking statements express management’s current expectations, plans or forecasts of future events, results and condition, including financial and other estimates and expectations regarding recently completed or proposed acquisitions and the general business strategy of engaging in bank acquisitions. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements are discussed in NewBridge’s filings with the Securities and Exchange Commission, including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. NewBridge undertakes no obligation to revise or update these statements following the date of this press release.

Investors may contact:

Ramsey Hamadi, Chief Financial Officer		336-369-0975
Richard Cobb, Controller & Chief Accounting Officer		336-369-0914

FINANCIAL SUMMARY

	Three Months Ended December 31					Twelve Months Ended December 31
	2014		2013			2014			2013
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans⁽¹⁾	$	19,157	$	15,482		$	71,230		$	56,617
Investment securities		4,055		3,057			14,468			12,179
Other		38		8			118			23
Total interest income		23,250		18,547			85,816			68,819
Interest expense:
Deposits		1,060		869			4,000			3,116
Borrowings from the FHLB		230		427			801			1,195
Other		656		338			2,344			1,332
Total interest expense		1,946		1,634			7,145			5,643
Net interest income		21,304		16,913			78,671			63,176
Provision for credit losses		50		642			883			2,691
Net interest income after provision for credit losses		21,254		16,271			77,788			60,485
Noninterest income:
Retail banking		2,515		2,636			10,424			10,228
Mortgage banking services		217		297			870			1,644
Wealth management services		771		638			2,919			2,570
Gain on sale of investment securities		-		-			-			736
Bank-owned life insurance		316		322			1,385			1,429
Other		258		176			1,115			847
Total noninterest income		4,077		4,069			16,713			17,454
Noninterest expense:
Personnel		9,946		8,717			36,617			32,104
Occupancy		1,218		1,135			4,910			4,208
Furniture and equipment		1,003		991			3,806			3,501
Technology and data processing		1,228		1,121			4,727			4,192
Legal and professional		816		652			2,994			2,683
FDIC insurance		382		236			1,602			1,565
Other real estate owned		376		159			870			(126	)
Acquisition related expenses		171		2,163			5,081			2,232
Other		3,468		3,216			12,099			10,025
Total noninterest expense		18,608		18,390			72,706			60,384
Income before income taxes		6,723		1,950			21,795			17,555
Income tax expense (benefit)		2,458		524			7,819			(3,216	)
Net income		4,265		1,426			13,976			20,771
Dividends and accretion on preferred stock		-		(237	)		(337	)		(1,854	)
Net income available to common shareholders	$	4,265	$	1,189		$	13,639		$	18,917
Net income per share - basic	$	0.11	$	0.04		$	0.39		$	0.71
Net income per share - diluted	$	0.11	$	0.04		$	0.38		$	0.65

⁽¹⁾

Includes accelerated accretion (amortization) on purchased loans of $85,000 and $(44,000) for the three months ended December 31, 2014 and 2013, respectively, and $(115,000) and $(44,000) for the twelve months ended December 31, 2014 and 2013, respectively.

FINANCIAL SUMMARY

	2014												2013
	Fourth			Third			Second			First			Fourth
	Quarter			Quarter			Quarter			Quarter			Quarter
Period-End Balance Sheet
(Dollars in thousands)
Assets
Loans held for sale	$	6,181		$	3,303		$	5,733		$	3,486		$	3,530
Commercial loans		928,761			839,696			835,248			684,643			656,440
Real estate - construction loans		168,109			157,841			151,078			115,748			115,396
Real estate - mortgage loans		672,574			689,356			703,390			610,365			610,179
Consumer loans		26,164			26,794			28,770			25,094			26,437
Other loans		8,798			7,277			8,064			7,991			8,251
Total loans held for investment		1,804,406			1,720,964			1,726,550			1,443,841			1,416,703
Allowance for credit losses		(22,112	)		(22,501	)		(22,944	)		(24,435	)		(24,550	)
Net loans held for investment		1,782,294			1,698,463			1,703,606	⁽¹⁾		1,419,406			1,392,153
Investment securities		496,798			496,914			469,198			410,122			368,866
Other earning assets		17,131			19,077			19,679			4,075			3,915
Intangible assets		26,679			27,108			27,942			8,046			8,388
Other non-earning assets		191,149			197,885			202,935			193,134			188,380
Total Assets	$	2,520,232		$	2,442,750		$	2,429,093		$	2,038,269		$	1,965,232

Liabilities and Shareholders’ Equity
Noninterest-bearing deposits	$	319,327		$	310,441		$	301,038		$	258,058		$	240,979
Savings deposits		67,639			66,521			67,554			65,386			62,353
NOW accounts		509,450			499,184			477,372			454,198			439,624
Money market accounts		386,733			405,369			404,801			351,797			359,174
Time deposits		549,415			543,619			604,818			492,809			451,866
Total deposits		1,832,564			1,825,134			1,855,583	⁽²⁾		1,622,248			1,553,996
Total borrowings		438,474			373,974			332,274			244,774			229,774
Other liabilities		17,839			15,211			16,585			14,422			14,670
Shareholders’ equity - preferred		-			-			-			-			15,000
Shareholders’ equity - common		231,355			228,431			224,651			156,825			151,792
Total Liabilities and Shareholders’ Equity	$	2,520,232		$	2,442,750		$	2,429,093		$	2,038,269		$	1,965,232

⁽¹⁾

Includes $260.7 million from CapStone Bank acquisition.

⁽²⁾

Includes $229.3 million from CapStone Bank acquisition.

COMMON STOCK DATA

	2014								2013
	Fourth		Third		Second		First		Fourth
	Quarter		Quarter		Quarter		Quarter		Quarter

Market value:
End of period	$	8.71	$	7.59	$	8.06	$	7.14	$	7.43
High		8.98		8.46		8.69		7.62		7.92
Low		7.34		7.20		6.99		6.55		6.40
Book value		6.22		6.14		6.05		5.50		5.33
Tangible book value		5.50		5.41		5.30		5.22		5.04
Average shares outstanding		37,195,303		37,166,736		36,808,785		28,487,709		28,478,316
Average diluted shares outstanding		37,655,766		37,576,669		37,382,568		28,597,530		28,584,755
Class A shares at end of period		34,008,795		34,007,093		33,949,443		25,303,820		25,291,568
Class B shares at end of period		3,186,748		3,186,748		3,186,748		3,186,748		3,186,748

INVESTMENT PORTFOLIO

(Dollars in thousands)	As of December 31, 2014
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value		Average Yield (%)			Average Duration (years)

Available for Sale⁽¹⁾
US Agency	$	49,599	$	-	$	(1,485	)	$	48,114		2.05	%		6.80
Agency mortgage backed securities		19,314		1,255		-			20,569		3.78			3.46
Collateralized mortgage obligations		10,492		217		-			10,709		3.81			3.72
Commercial mortgage backed securities		33,646		1,179		-			34,825		3.40			2.62
Covered bonds		49,976		2,017		(73	)		51,920		3.49			1.98
Corporate bonds		128,798		3,612		(535	)		131,875		3.78			3.50
Municipal obligations		33,930		1,204		(4	)		35,130		5.17	⁽²⁾		3.75
Total debt securities		325,755		9,484		(2,097	)		333,142		3.58	⁽²⁾		3.71
Federal Home Loan Bank stock		17,712		-		-			17,712
Federal Reserve Bank stock		5,702		-		-			5,702
Other		9,336		361		(156	)		9,541
Total Available for Sale	$	358,505	$	9,845	$	(2,253	)	$	366,097

Held to Maturity⁽¹⁾
US Agency	$	32,772	$	95	$	(416	)	$	32,451	2.16	%	4.75
Agency mortgage backed securities		54,339		1,352		-			55,691	2.58		4.43
Covered bonds		4,984		25		-			5,009	2.08		3.92
Corporate bonds		23,455		123		(64	)		23,514	2.72		4.19
Subordinated debt issues		14,000		50		(17	)		14,033	6.26		9.35
Municipal obligations		1,151		66		-			1,217	4.28	⁽²⁾	7.60
Total Held to Maturity	$	130,701	$	1,711	$	(497	)	$	131,915	2.89	⁽²⁾	5.00

Total Investment Portfolio	$	489,206	$	11,556	$	(2,750	)	$	498,012	3.38	⁽²⁾	4.08

(Dollars in thousands)	As of December 31, 2013
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value		Average Yield (%)			Average Duration (years)

Available for Sale⁽¹⁾
US Agency	$	49,094	$	-	$	(4,562	)	$	44,532		2.07	%		7.67
Agency mortgage backed securities		14,217		1,261		-			15,478		5.09			2.83
Collateralized mortgage obligations		6,611		163		-			6,774		5.63			2.60
Commercial mortgage backed securities		38,367		1,123		(102	)		39,388		3.32			3.36
Covered bonds		49,937		2,924		(233	)		52,628		3.49			2.90
Corporate bonds		105,772		4,066		(572	)		109,266		3.83			4.13
Municipal obligations		15,836		161		(301	)		15,696		6.46	(2)		7.94
Total debt securities		279,834		9,698		(5,770	)		283,762		3.65	(2)		4.55
Federal Home Loan Bank stock		9,988		-		-			9,988
Other		7,672		596		(469	)		7,799
Total Available for Sale	$	297,494	$	10,294	$	(6,239	)	$	301,549

Held to Maturity⁽¹⁾
US Agency	$	28,729	$	-	$	(1,920	)	$	26,809		2.13	%		6.73
Agency mortgage backed securities		32,439		171		(34	)		32,576		2.64			5.90
Subordinated debt issues		5,000		-		-			5,000		7.63			9.61
Municipal obligations		1,149		-		(95	)		1,054		4.25	(2)		13.58
Total Held to Maturity	$	67,317	$	171	$	(2,049	)	$	65,439		2.81	(2)		6.66

Total Investment Portfolio	$	364,811	$	10,465	$	(8,288	)	$	366,988		3.49	(2)		4.96

⁽¹⁾

Available for sale securities are carried at fair value on the balance sheet while held to maturity securities are carried at amortized cost.

⁽²⁾

Fully taxable equivalent basis.

ANALYSIS OF YIELDS AND RATES

	Three Months Ended December 31, 2014							Three Months Ended December 31, 2013
	Average		Interest Income/		Average Yield/			Average		Interest Income/		Average Yield/
	Balance		Expense⁽¹⁾		Rate			Balance		Expense		Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable	$	1,786,411	$	19,157		4.25	%	$	1,409,800	$	15,482		4.36	%
Investment securities		499,265		4,193		3.36	%		359,510		3,140		3.49	%
Other earning assets		18,430		38		0.82	%		10,173		8		0.31	%
Total Earning Assets		2,304,106		23,388		4.03	%		1,779,483		18,630		4.15	%
Non-Earning Assets		194,708							166,517
Total Assets	$	2,498,814		23,388				$	1,946,000		18,630

Interest-Bearing Liabilities
Deposits	$	1,522,435		1,060		0.28	%	$	1,313,088		869		0.26	%
Borrowings		407,593		886		0.86	%		197,630		765		1.54	%
Total Interest-Bearing Liabilities		1,930,028		1,946		0.40	%		1,510,718		1,634		0.43	%
Noninterest-bearing deposits		322,123							252,320
Other liabilities		15,840							18,949
Shareholders' equity		230,823							164,013
Total Liabilities and
Shareholders' Equity	$	2,498,814		1,946				$	1,946,000		1,634
Net Interest Income			$	21,442						$	16,996
Net Interest Margin						3.69	%						3.79	%
Interest Rate Spread						3.63	%						3.72	%

	Twelve Months Ended December 31, 2014							Twelve Months Ended December 31, 2013
	Average		Interest Income/		Average Yield/			Average		Interest Income/		Average Yield/
	Balance		Expense⁽¹⁾		Rate			Balance		Expense		Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable	$	1,670,113	$	71,230		4.26	%	$	1,247,095	$	56,617		4.54	%
Investment securities		455,262		14,965		3.29	%		379,014		12,549		3.31	%
Other earning assets		14,763		118		0.80	%		7,656		23		0.30	%
Total Earning Assets		2,140,138		86,313		4.04	%		1,633,765		69,189		4.24	%
Non-Earning Assets		192,412							144,304
Total Assets	$	2,332,550		86,313				$	1,778,069		69,189

Interest-Bearing Liabilities
Deposits	$	1,489,293		4,000		0.27	%	$	1,184,485		3,116		0.26	%
Borrowings		318,858		3,145		0.99	%		168,909		2,527		1.50	%
Total Interest-Bearing Liabilities		1,808,151		7,145		0.40	%		1,353,394		5,643		0.42	%
Noninterest-bearing deposits		294,704							228,635
Other liabilities		15,537							19,302
Shareholders’ equity		214,158							176,738
Total Liabilities and
Shareholders’ Equity	$	2,332,550		7,145				$	1,778,069		5,643
Net Interest Income			$	79,168						$	63,546
Net Interest Margin						3.70	%						3.89	%
Interest Rate Spread						3.64	%						3.82	%

⁽¹⁾

Income related to securities exempt from federal income taxes is stated on a fully taxable-equivalent basis, assuming a federal income tax rate of 35%, and is then reduced by the non-deductible portion of interest expense. For the three months ended December 31, 2014, the adjustments made to convert to a fully taxable-equivalent basis were $138 for 2014 and $83 for 2013. For the twelve months ended December 31, 2014, the adjustments made to convert to a fully taxable-equivalent basis were $497 for 2014 and $370 for 2013.

ASSET QUALITY DATA

	2014												2013
	Fourth			Third			Second			First			Fourth
	Quarter			Quarter			Quarter			Quarter			Quarter
(Dollars in thousands)
Loans identified as impaired	$	4,227		$	3,947		$	8,025		$	8,954		$	5,879
Other nonperforming loans		2,985			3,882			3,268			3,883			3,519
Total nonperforming loans		7,212			7,829			11,293			12,837			9,398
Other real estate owned		3,057			3,580			3,585			5,633			7,620
Total nonperforming assets	$	10,269		$	11,409		$	14,878		$	18,470		$	17,018

Net chargeoffs	$	439		$	532		$	2,091		$	259		$	1,477
Allowance for credit losses		22,112			22,501			22,944			24,435			24,550
Allowance for credit losses to loans held for investment		1.23	%		1.31	%		1.33	%		1.69	%		1.73	%
Nonperforming loans to loans held for investment		0.40			0.45			0.65			0.89			0.66
Nonperforming assets to total assets		0.41			0.47			0.61			0.91			0.87
Nonperforming loans to total assets		0.29			0.32			0.46			0.63			0.48
Net chargeoff percentage (annualized)		0.10			0.12			0.48			0.07			0.42
Allowance for credit losses to nonperforming loans		306.60			287.41			203.17			190.35			261.23

Allowance for credit losses rollforward	Three Months Ended December 31				Twelve Months Ended December 31
	2014		2013		2014		2013

Beginning balance	$	22,501	$	25,385	$	24,550	$	26,630
Chargeoffs		1,344		2,621		7,408		8,526
Recoveries		905		1,144		4,087		3,755
Net chargeoffs		439		1,477		3,321		4,771
Provision for credit losses		50		642		883		2,691
Ending balance	$	22,112	$	24,550	$	22,112	$	24,550

OTHER DATA

	Three Months Ended December 31						Twelve Months Ended December 31
	2014			2013			2014			2013

Tangible common equity	$	204,676		$	143,404		$	204,676		$	143,404
Return on average assets		0.68	%		0.29	%		0.60	%		1.17	%
Return on average equity		7.33			3.45			6.53			11.75
Net yield on earning assets		3.69			3.79			3.70			3.89
Average loans to assets		71.49			72.45			71.60			70.14
Average loans to deposits		96.85			90.06			93.62			88.25
Average noninterest - bearing deposits to total deposits		17.46			16.12			16.52			16.18
Average equity to assets		9.24			8.43			9.18			9.94
Total capital as a percentage of total risk weighted assets		12.23			11.67			12.23			11.67
Tangible common equity as a percentage of tangible assets		8.21			7.33			8.21			7.33
Tangible common equity as a percentage of total risk weighted assets		10.13			9.44			10.13			9.44

OTHER NON-GAAP MEASURES

Pre-tax core net operating income

(Dollars in thousands)

	Three Months Ended December 31				Twelve Months Ended December 31
	2014		2013		2014		2013

Pre-tax net income	$	6,723	$	1,950	$	21,795	$	17,555
Gain on sale of investment securities		-		-		-		(736	)
Acquisition related expenses		171		2,163		5,081		2,232
Pre-tax core net operating income	$	6,894	$	4,113	$	26,876	$	19,051

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