Attached files
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| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | a8k_ppbixip-2016xq3updated.htm |
Investor Presentation
Third Quarter 2016
Steve Gardner
Chairman & Chief Executive Officer
sgardner@ppbi.com - 949-864-8000
Exhibit 99.1
Ronald Nicolas
Sr. EVP & Chief Financial Officer
rnicolas@ppbi.com - 949-864-8000
And
2
Forward-Looking Statements
The statements contained in this presentation that are not historical facts are forward-looking statements based on management’s current
expectations and beliefs concerning future developments and their potential effects on Pacific Premier Bancorp, Inc. (the “Company”). Such
statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the
Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management.
The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or
implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the
strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the
effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal
Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of competitive new products and services
and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws and
regulations including those concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies;
technological and social media changes; the effect of acquisitions that the Company has made or may make, if any, including, without
limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to
effectively integrate an acquisition target into our operations; changes in the level of the Company’s nonperforming assets and charge-offs;
oversupply of inventory and deterioration in values of California real estate, both residential and commercial; the effect of changes in
accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission
(“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters;
possible other-than-temporary impairments of securities held by the Company; changes in consumer spending, borrowing and savings habits;
the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract
deposits and other sources of liquidity; changes in the financial performance and/or condition of the Company’s borrowers; changes in the
competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including
acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or
military conflicts, which could impact business and economic conditions in the United States and abroad; unanticipated regulatory or
judicial proceedings; and the Company’s ability to manage the risks involved in the foregoing.
Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC and other filings made by the
Company with the SEC. The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions
to any of the forward-looking statements included herein to reflect future events or developments.
3
16 Full-Service
Branch Locations
Company Profile
Exchange / Listing NASDAQ: PPBI
Focus
Small & Mid-Market
Businesses
Total Assets $3.8 Billion*
Branch Network
Note: Market data as of 10/31/2016
* As of 9/30/2016
Pacific Premier Branch Footprint
Headquarters Irvine, CA
# of Research Analysts 7 Analysts
Market Cap $714.9 Million
Avg. Daily Volume 116,841 Shares
Note: Map does not include PPBI offices outside of California
4
Strategic Transformation
Pre 2008 Conversion from a thrift to a commercial bank
2008 - 2012
Organic growth driven by dynamic sales culture
Geographic expansion through highly accretive FDIC-assisted acquisitions
Canyon National Bank (CNB) - $192 million in assets, closed on 2/11/2011 (FDIC-Assisted)
Palm Desert National Bank (PDNB) - $103 million in assets, closed on 4/27/2012 (FDIC-Assisted)
2016 and Beyond
Focus on producing EPS growth from scale, efficiency, balance sheet leverage
Target ROAA and ROATCE of 1.25% and 15%, respectively
Continue disciplined organic and acquisitive growth increasing scarcity value
2013 - 2015
Build out of commercial banking platform through acquisitions
First Associations Bank (FAB) - $424 million in assets, closed on 3/15/2013 (151 days)
San Diego Trust Bank (SDTB) - $211 million in assets, closed on 6/25/2013 (111 days)
Infinity Franchise Holdings (IFH) - $80 million in assets, closed on 1/30/2014 (73 days)
Independence Bank (IDPK) - $422 million in assets, closed on 1/26/2015 (96 days)
Security California Bancorp (SCAF) - $715 million in assets, closed 1/31/2016 (123 days)
A balance of organic and acquisitive growth creating a southern California centric
commercial bank franchise with $3.8 billion in assets
5
History of PPBI
• Total deposits compound annual growth rate of 38% since 2012
• Total loans compound annual growth rate of 36% since 2012
Total Assets – Acquired vs. Non-Acquired
February 2011
Acquired Canyon National
Bank ($192MM assets) in
FDIC-assisted deal
$807 $827
$961 $1,174
$1,714 $1,745
$1,922
$2,034 $2,039
$2,753
$2,637 $2,715
$2,791
$3,563 $3,599
$3,755
$6.00
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2009 2010 2011 2012 2013 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Non-Acquired Acquired TBV/Share
April 2012
Acquired Palm Desert National
Bank ($103MM assets) in
FDIC-assisted deal
March 2013 and June 2013
Acquired First Associations
Bank ($424MM assets) and
San Diego Trust Bank
($211MM assets)
January 2014
Acquired Infinity
Franchise Holdings
($80MM assets), a
specialty finance company
January 2015
Acquired
Independence
Bank ($422MM
assets)
January 2016
Acquired SCAF
($715MM assets)
Timely and efficient acquisitions have accelerated PPBI’s growth and performance
Total Assets TBV/Share
6
Small and middle market business banking focus
Full suite of business banking services, including: cash
management, payroll and merchant card services
Customized C&I and commercial real estate loans
C&I and CRE business loans
Originated $240M YTD vs. $115M 2015 YTD
32% of loan portfolio
Today’s Commercial Bank – Key Businesses
Business Banking SBA Lending
HOA Banking
Income Property Lending
Nationwide origination capability
Small Business Administration (“SBA”) Loans
California Capital Access Program (“Cal CAP”) Loans
United State Department of Agriculture (“USDA”) Loans
Originated $102M YTD and vs $91M 2015 YTD
Sell guaranteed portion – 75%
Gross gain rates 8-12%
Nationwide leader of customized cash management,
electronic banking services and credit facilities for:
Home Owner Association (“HOA”) Companies
HOA Management Companies
HOA deposits now in excess of $742M as of 9/30
Predominately MMAs and demand deposits
Credit facilities and banking services for commercial real
estate (“CRE”) investors in SoCal
Structured CRE and bridge loan flexibility
Originated $156M YTD and $107 2015 YTD
17% of loan portfolio
Construction Lending
Construction loans for developers and owner users on
properties predominantly in coastal SoCal
New team assembled in first half of 2013
Originated $194M YTD vs. $168M 2015 YTD
7% of loan portfolio
Attractive risk adjusted yields
Franchise Lending
National lender for established and experienced owner
operators of Quick Serve Restaurants
C&I and CRE based lending secured by equipment and
real estate
Originated $148M YTD vs. $130M 2015 YTD
Average originated rate of 5.0% 2016 YTD
7
Technology Enabled Management Systems
PPBI’s sales management technology has accelerated the growth and sales culture by
effectively monitoring all facets of the deposit and loan process, including lead
generation, prospecting and closing
Customer Relationship Management (CRM) with SalesForce provides real-time updates of existing and
prospective client deposit and loan relationships. Deployed throughout the organization from RMs, PMs
and credit administration
Email communication software streamlines communication between our RMs and PMs for quicker
decision making
DataVault is PPBI’s proprietary software developed in-house for tracking HOA and Property Management
firm’s customer payment information, customized for internal reporting and 3rd party vendor
implementation
DataVault – Proprietary Mgmt. Software SalesForce Communication SalesForce Pipeline Management
8
Commercial Bank Transformation - Deposit Composition
Deposits – 12/31/2009 Deposits – 9/30/2016
• 38% of deposit balances are non-interest bearing deposits
• 90% of deposit balances are Core deposits *
Total Deposits: $618.7 Million
Cost of Deposits: 1.91%
Total Deposits: $3.1 Billion
Cost of Deposits: 0.28%
* Core deposits are all transaction accounts and non-brokered CD accounts below $250,000
Non-Int. Bearing
Demand
5%
Interest Bearing
Demand
4%
MMDA and
Savings
23% CDs
68%
Non-Int. Bearing
Demand
38%
Interest Bearing
Demand
6%
MMDA and Savings
37%
CDs
19%
9
Commercial &
Industrial
5%
CRE - Own. Occ.
18%
CRE - Non-Own.
Occ.
26%
Multi-family
48%
1-4 Family
2%
Other
1%
Commercial Bank Transformation – Loan Composition
Loans – 12/31/2009 Loans – 9/30/2016
• Loan portfolio is high quality and well-diversified
• Business related loans represent 49% of total loans at 9/30/16*
Total Loans: $576.3 Million Total Loans: $3.1 Billion
* Business loans are defined as commercial and industrial, franchise, commercial owner occupied, and SBA
Multi-family
23%
CRE Non-
Own. Occ.
17%
Commercial &
Industrial
17%
CRE - Own.
Occ.
15%
Franchise
14%
Constr., Land
&
Development
8%
1-4 Family
3%
SBA
3%
10
Conservative Credit Culture
Nonperforming Assets to Total Assets (%)
Growth has not sacrificed credit risk, as the Company has historically out-performed peers
across all asset quality measures over the same growth time period
• No troubled debt restructurings (“TDRs”)
• Tactical loan sales utilized strategically to manage various risks
1.04
1.70
1.58 1.66
1.36
0.48 0.58
0.40
3.26
1.62
1.31
0.76
0.55
1.67
1.08
0.38 0.33
0.21 0.15 0.20 0.20 0.14 0.12 0.12 0.21 0.19 0.18 0.18 0.17
0.13
0.17
2.93
3.62
3.96
4.11
4.26 4.30 4.24
4.39
4.23 4.29
4.06 4.04
3.77
3.48 3.39
3.21
2.96
1.56
1.24
1.10 1.18 1.05
0.91
0.80 0.74 0.69 0.59 0.58
0.74
0.53
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
PPB Peers *
CNB
Acquisition
2/11/11
PDNB
Acquisition
4/27/12
* California peer group consists of all insured California institutions, from SNL Financial.
11
CRE to Capital Concentration
Our growth across our key businesses has diversified our loan portfolio allowing us to
decrease our CRE concentration
Held steady
CRE as a Percent of Total Capital
627%
499%
415%
372%
310%
349%
316%
336%
362% 352% 365%
0%
100%
200%
300%
400%
500%
600%
700%
2008 2009 2010 2011 2012 2013 2014 2015 Q1'16 Q2'16 Q3'16
CRE Concentration
12
Strong Loan Yields - Declining Cost of Deposits
Core Loan Yields Cost of Deposits
$ in millions
0.33%
0.36%
0.32%
0.31%
0.28% 0.28%
0.25%
0.30%
0.35%
0.40%
0.45%
0.50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 2015 Q1'16 Q2'16 Q3'16
Total Deposits Cost of Deposits
Our specialty businesses have optimized our NIM through diversification and
disciplined pricing as well as accelerating organic loan and deposit growth
5.28%
5.18% 5.17%
5.24%
5.11% 5.11%
4.50%
4.75%
5.00%
5.25%
5.50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 2015 Q1'16 Q2'16 Q3'16
Loans Core Loan Yield
13
Revenue & Net Interest Margin
Annual Operating Revenue
Note: Operating revenue = net interest income + noninterest income.
*Annualized
$67
$87
$121
$156
$168
$180
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
$200.0
2013 2014 2015 Q1'16* Q2'16* Q3'16*
Core Net Interest Margin
$ in millions
And delivered revenue growth of 39% as well as consistent net interest margin of over 4%
3.93%
4.09%
4.06%
4.11%
4.19% 4.18%
3.80%
3.85%
3.90%
3.95%
4.00%
4.05%
4.10%
4.15%
4.20%
4.25%
2013 2014 2015 Q1'16 Q2'16 Q3'16
14
Noninterest Expense & Efficiency
Adjusted Noninterest Expense / Avg. Assets Efficiency Ratio
In addition to leveraging technology to drive growth, the Company has continually
improved its operational processes to achieve greater operating leverage and
economies of scale
NOTE: Efficiency Ratio represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and non-recurring merger related expense to the
sum of net interest income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities, other-than-temporary impairment recovery (loss) on investment
securities, and gain on FDIC-assisted transactions.
Adjusted noninterest expense excludes other real estate owned operations, core deposit intangible amortization and non-recurring merger related costs.
*Annualized
2.95%
2.87%
2.58%
2.46%
2.54%
2.74%
2.20%
2.30%
2.40%
2.50%
2.60%
2.70%
2.80%
2.90%
3.00%
2013 2014 2015 Q1'16* Q2'16* Q3'16*
64.7%
61.4%
55.9%
52.4%
54.4%
57.0%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
2013 2014 2015 Q1'16 Q2'16 Q3'16
15
Pre-Tax Pre-Provision Income Tangible Book Value
$ in thousands
$16,440
$32,019
$47,149
$61,664
$73,264
$76,468
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2013 2014 2015 Q1'16* Q2'16* Q3'16*
$9.07
$10.13
$11.21
$11.61
$12.04
$12.52
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
2013 2014 2015 Q1'16 Q2'16 Q3'16
Strong operating income has consistently resulted in shareholder value creation
Net Income and Tangible Book Value
NOTE: Tangible book values are based on fully diluted shares
*Annualized
16
Capital Resources
(1) Please refer to non-GAAP reconciliation
As of September 30, 2016
Well-Capitalized
Requirement
Pacific Premier
Bancorp, Inc. Pacific Premier Bank
Regulatory Capital Ratios:
Tier 1 Leverage Capital Ratio 5.00% 9.80% 11.03%
Common Equity Tier 1 Risk-based Capital Ratio 6.50% 10.42% 12.07%
Tier 1 Risk-Based Capital Ratio 8.00% 10.72% 12.07%
Total Risk Based Capital Ratio 10.00% 13.21% 12.77%
Tangible Common Equity Ratio (1) 9.28% 10.77%
The consolidated Company and the Bank both remain well capitalized with strong
earnings capacity to sustain growth strategy and well-capitalized levels
17
Superior Market Performance (PPBI)
Source: SNL Financial, market information as of 9/30/2016
Growth, profitability, conservative credit and capital, and operating efficiencies has led to
PPBI’s stock price significantly outperforming its publicly traded bank peers (SNL Bank
Index / NASDAQ Bank Index)
PPBI +77%
NASDAQ
Bank
SNL Bank +1%
+17%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16
PPBI SNL Bank NASDAQ Bank
18
Strategically Focused – Financially Motivated
PPBI’s management team operates the bank with the understanding we are growing toward $10.0 billion
• Our business model is always evolving, transforming and improving
• Continue to build a quality banking franchise and leverage core competencies
• Investments in and the strengthening of the entire team is an on-going process
Continue to Evolve and Strive for Superior Performance
Operational Integrity Leads to Strong Internal Controls and Risk Management
PPBI’s operating environment and culture have been built over the years to be scalable
• Sales culture maturation combined with traditional Relationship Managers and the leveraging of technology
• Disciplined credit underwriting culture remains a fundamental underpinning
• BSA/AML – automated Rule Based Risk Rating and statistical analytics covering entire client base
• CRA – enhanced program to exceed community group requirements and large bank exam standards
Keen Focus on Creating Maximum Shareholder Value
Management consistently communicates and executes on its strategic plan
• Our Board regularly evaluates capital management, strategic direction and the alternatives to maximize shareholder value
• Focused on increasing earnings and building TBV through growth strategies and improving efficiencies
• Our goal is to create a fundamentally sound franchise with strong earnings and risk management
19
Scarcity Value in Southern California
Source: SNL Financial as of 9/30/2016
Note: All dollars in thousands
• Significant scarcity value for quality and
sizeable banking franchises in Southern
California
• PPBI is 7th largest bank headquartered in
Southern California
• Includes all banks and thrifts headquartered
in Southern California (Orange, Los Angeles,
San Bernardino, Riverside, and San Diego
counties). Sorted by total assets, excludes
pending merger targets and ethnic-focused
banks
Largest 25 Banks Headquartered in Southern California
Rank Company name Exchange City
Total Assets
($000s)
1 PacWest Bancorp NASDAQ Beverly Hills $ 21,315,291
2 Banc of California, Inc. NYSE Irvine $ 11,216,404
3 CVB Financial Corp. NASDAQ Ontario $ 8,044,993
4 BofI Holding, Inc. NASDAQ San Diego $ 7,601,354
5 Opus Bank NASDAQ Irvine $ 7,468,083
6 F & M Bank of Long Beach OTCQB Long Beach $ 6,335,203
7 Pacific Premier Bancorp, Inc. NASDAQ Irvine $ 3,754,831
8 Community Bank OTC Pink Pasadena $ 3,634,799
9 First Foundation Inc. NASDAQ Irvine $ 3,492,940
10 Grandpoint Capital, Inc. OTC Pink Los Angeles $ 3,312,542
11 CU Bancorp NASDAQ Los Angeles $ 2,776,433
12 Manufacturers Bank - Los Angeles $ 2,535,454
13 American Business Bank OTC Pink Los Angeles $ 1,664,532
14 Montecito Bancorp - Santa Barbara $ 1,277,556
15 Provident Financial Holdings, Inc. NASDAQ Riverside $ 1,171,381
16 Plaza Bank - Irvine $ 1,107,148
17 Pacific Mercantile Bancorp NASDAQ Costa Mesa $ 1,100,915
18 Sunwest Bank - Irvine $ 1,010,435
19 Malaga Financial Corporation OTC Pink Palos Verdes Estates $ 999,000
20 Silvergate Bank - La Jolla $ 979,555
21 California First National Bancorp NASDAQ Irvine $ 888,176
22 Commercial Bank of California - Irvine $ 777,974
23 Bank of Hemet - Riverside $ 651,842
24 Community West Bancshares NASDAQ Goleta $ 642,624
25 Seacoast Commerce Bank - San Diego $ 538,494
20
• Continue to drive economies of scale and operating leverage
• Positioned to deliver continued growth and strong profitability
• Ability to integrate business lines that generate higher risk adjusted returns
• Proven track record of executing on acquisitions and organic growth
• Well positioned to evaluate attractive acquisition opportunities
• Create scarcity value among banks in Southern California
PPBI Outlook
Building Long-term Franchise Value
21
Appendix material
PPBI Supplemental Information
22
Consolidated Financial Highlights
September 30, December 31, March 31, June 30, September 30,
2015 2015 2016 2016 2016
Summary Balance Sheet
Tota l Assets $2,715,298 $2,790,646 $3,563,085 $3,598,653 $3,754,831
Loans Held for Investment 2,167,856 2,254,315 2,851,432 2,920,619 3,090,839
Tota l Depos i ts 2,139,207 2,195,123 2,906,264 2,931,001 3,059,752
Loans Held for Investment / Tota l Depos i ts 101% 103% 98% 100% 101%
Summary Income Statement
Tota l Revenue $31,074 $33,054 $39,063 $42,011 $44,977
Tota l Non-Interest Expense 17,374 18,539 23,647 23,695 25,860
Provis ion for Loan Losses 1,062 1,700 1,120 1,589 4,013
Net Income 7,837 8,065 8,554 10,369 9,227
Di luted EPS $0.36 $0.37 $0.33 $0.37 $0.33
Performance Ratios
Return on Average Assets 1.19% 1.18% 1.04% 1.17% 1.00%
Return on Average Tangible Common Equity* 14.25% 14.09% 12.02% 13.48% 11.52%
Return on Adjusted Average Tangible Common Equity* 14.96% 14.92% 14.91% 13.86% 11.52%
Efficiency Ratio (1) 53.6% 53.8% 52.4% 54.4% 57.0%
Net Interest Margin 4.22% 4.40% 4.43% 4.48% 4.41%
Asset Quality
Del inquent Loans to Tota l Loans 0.14% 0.12% 0.12% 0.19% 0.18%
Al lowance for Loan Losses to Tota l Loans 0.74% 0.77% 0.65% 0.65% 0.70%
Nonperforming Assets to Tota l Assets (2) 0.18% 0.18% 0.17% 0.13% 0.17%
Net Loan Charge-offs to Average Tota l Loans 0.00% 0.02% 0.00% 0.04% 0.04%
Al lowance for Loan Losses as a % of Nonperforming loans 394% 436% 383% 467% 381%
Capital Ratios
Tangible Common Equity/ Tangible Assets * 8.75% 8.82% 9.15% 9.41% 9.28%
Tangible Book Value Per Share * $10.80 $11.17 $11.46 $11.87 $12.22
Common Equity Tier 1 Risk-based Capita l Ratio 10.02% 9.91% 10.43% 10.58% 10.42%
Tier 1 Risk-based Ratio 10.40% 10.28% 10.75% 10.90% 10.72%
Risk-based Capita l Ratio 13.65% 13.43% 13.32% 13.45% 13.21%
`
(1) Represents the ratio of noninterest expense less OREO operations, core deposit intangible amortization and non-recurring merger related
expense to the sum of net interest income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities.
(2) Nonperforming assets excludes nonperforming investment securities.
* Please refer to non-GAAP reconciliation
Note: All dollars in thousands, except per share
23
Non-GAAP Financial Measures
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are a non-GAAP financial measures derived from GAAP-based
amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We calculate
tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing
common stockholders’ equity by common shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude intangible
assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is
useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP
measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other
companies. A reconciliation of the non-GAAP measure of tangible common equity ratio to the GAAP measure of common equity ratio and tangible book value per share to the GAAP
measure of book value per share are set forth below.
Note: All dollars in thousands, except per share data.
September 30, December 31, March 31, June 30, September 30,
2015 2015 2016 2016 2016
Total stockholders' equity $ 290,767 $ 298,980 $ 428,894 $ 440,630 $ 449,965
Less: Intangible assets (58,346) (58,002) (113,230) (112,439) (111,915)
Tangible common equity $ 232,421 $ 240,978 $ 315,664 $ 328,191 $ 338,050
Total assets $ 2,715,298 $ 2,790,646 $ 3,563,085 $ 3,598,653 $ 3,754,831
Less: Intangible assets (58,346) (58,002) (113,230) (112,439) (111,915)
Tangible assets $ 2,656,952 $ 2,732,644 $ 3,449,855 $ 3,486,214 $ 3,642,916
Common Equity ratio 10.71% 10.71% 12.04% 12.24% 11.98%
Less: Intangibility equity ratio (1.96%) (1.89%) (2.89%) (2.83%) (2.70%)
Tangible common equity ratio 8.75% 8.82% 9.15% 9.41% 9.28%
Basic shares outstanding 21,510,678 21,570,746 27,537,233 27,650,533 27,656,533
Book value per share $ 13.52 $ 13.86 $ 15.58 $ 15.94 $ 16.27
Less: Intangible book value per share (2.72) (2.69) (4.12) (4.07) (4.05)
Tangible book value per share $ 10.80 $ 11.17 $ 11.46 $ 11.87 $ 12.22
24
Non-GAAP Financial Measures
For the quarter periods presented below, adjusted net income for return on average tangible common equity, adjusted net income for adjusted return on average tangible common equity
and average tangible common equity are non-GAAP financial measures derived from GAAP-based amounts. We calculate return on average tangible common equity by adjusting net
income for the effect of CDI amortization and exclude the average CDI and average goodwill from the average stockholders' equity during the period. We calculate adjusted return on
average tangible common equity by adjusting net income for the effect of CDI amortization and merger related expense and exclude the average CDI and average goodwill from the
average stockholders' equity during the period. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of
risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our
capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies
may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies. A
reconciliation of the non-GAAP measures of return on average tangible common equity and adjusted return on average tangible common equity to the GAAP measure of return on
common stockholders’ equity is set forth below.
Note: All dollars in thousands
September 30, December 31, March 31, June 30, September 30,
2015 2015 2016 2016 2016
Net income $ 7,837 $ 8,065 $ 8,554 $ 10,369 $ 9,227
Plus: Tax effected CDI amortization 213 217 206 400 321
Adjusted net income for return on average tangible common
equity $ 8,050 $ 8,282 $ 8,760 $ 10,769 $ 9,548
Plus: Merger related, net of tax 400 407 2,103 307 -
Plus: Litigation expense, net of tax - 82 - - -
Adjusted net income for adjusted return on average tangible
common equity $ 8,450 $ 8,771 $ 10,863 $ 11,076 $ 9,548
Average stockholders' equity $ 284,486 $ 293,334 $ 387,202 $ 432,343 $ 443,715
Less: Average core deposit intangible 7,686 7,394 10,110 10,876 10,318
Less: Average goodwill 50,832 50,832 85,581 101,923 101,939
Average tangible common equity $ 225,968 $ 235,108 $ 291,511 $ 319,543 $ 331,458
Return on average common equity 11.02% 11.00% 8.84% 9.59% 8.32%
Plus: Intangible return on average tangible common equity 3.23% 3.09% 3.18% 3.89% 3.20%
Return on average tangible common equity 14.25% 14.09% 12.02% 13.48% 11.52%
Adjusted return on average tangible common equity 14.96% 14.92% 14.91% 13.86% 11.52%
25
Non-GAAP Financial Measures
Note: All dollars in thousands
For quarter period presented below, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures derived from
GAAP-based amounts. We calculate these figures by excluding merger related expenses in the period results. Management believes that the exclusion
of such items from these financial measures provides useful information to an understanding of the operating results of our core business. However,
these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use
different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other
companies.
September 30, December 31, March 31, June 30, September 30,
2015 2015 2016 2016 2016
Net income $ 7,837 $ 8,065 $ 8,554 $ 10,369 $ 9,227
Plus: Merger related, net of tax 400 407 2,103 307 -
Plus: Litigation expense, net of tax - 82 - - -
Adjusted net income $ 8,237 $ 8,554 $ 10,657 $ 10,676 $ 9,227
Diluted earnings per share $ 0.36 $ 0.37 $ 0.33 $ 0.37 $ 0.33
Plus merger related and litigation expenses, net of tax 0.02 0.02 0.08 0.01 0.00
Adjusted diluted earnings per share $ 0.38 $ 0.39 $ 0.41 $ 0.38 $ 0.33
Return on average assets 1.19% 1.18% 1.04% 1.17% 1.00%
Plus merger related and litigation expenses, net of tax 0.06% 0.07% 0.26% 0.03% 0.00%
Adjusted return on average assets 1.25% 1.25% 1.30% 1.20% 1.00%