FB Financial Corp - FORM 8-K - EX-99.3 - EXHIBIT 99.2 - January 26, 2017

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8-K - FB FINANCIAL CORP 8-K - FB Financial Corpa51500223.htm
EX-99.2 - EXHIBIT 99.3 - FB Financial Corpa51500223ex99_3.htm
EX-99.1 - EXHIBIT 99.1 - FB Financial Corpa51500223ex99_1.htm
Exhibit 99.2
 
Financial Summary and Key Metrics
  
(Unaudited)
  
(In Thousands, Except Share Data)
  
                               
   
2016
    
2015
  
   
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Statement of Income Data
                              
Total interest income
  
$
31,567
    
$
30,005
    
$
30,732
    
$
28,318
    
$
27,552
  
Total interest expense
    
2,535
      
2,388
      
2,374
      
2,375
      
2,256
  
Net interest income
    
29,032
      
27,617
      
28,358
      
25,943
      
25,296
  
Provision for loan losses
    
(752
)
    
71
      
(789
)
    
(9
)
    
(2,127
)
Total noninterest income
    
31,332
      
43,962
      
38,356
      
31,035
      
24,109
  
Total noninterest expense
    
47,319
      
55,529
      
50,595
      
41,347
      
41,880
  
Net income before income taxes
    
13,797
      
15,979
      
16,908
      
15,640
      
9,652
  
Income tax expense
    
4,787
      
14,772
      
1,133
      
1,041
      
461
  
Net income
  
$
9,010
    
$
1,207
    
$
15,775
    
$
14,599
    
$
9,191
  
Net interest income (tax—equivalent basis)
  
$
29,686
    
$
28,213
    
$
28,967
    
$
26,445
    
$
28,042
  
Pro forma net income
  
$
9,010
    
$
10,033
    
$
10,576
    
$
9,803
    
$
5,935
  
Pro forma core net income*
  
$
10,484
    
$
12,935
    
$
13,151
    
$
9,709
    
$
8,053
  
Per Common Share
                                        
Diluted net income
  
$
0.37
    
$
0.07
    
$
0.92
    
$
0.85
    
$
0.53
  
Pro forma net income- diluted
  
$
0.37
    
$
0.55
    
$
0.62
    
$
0.57
    
$
0.35
  
Pro forma core net income- diluted*
  
$
0.43
    
$
0.71
    
$
0.77
    
$
0.57
    
$
0.47
  
Book value
    
13.71
      
13.73
      
15.47
      
14.74
      
13.78
  
Tangible book value
    
11.58
      
11.56
      
12.41
      
11.65
      
10.66
  
Weighted average number of shares-diluted
    
24,500,943
      
18,332,192
      
17,180,000
      
17,180,000
      
17,180,000
  
Period-end number of shares
    
24,107,660
      
23,975,122
      
17,180,000
      
17,180,000
      
17,180,000
  
Selected Balance Sheet Data
                                        
Cash and due from banks
  
$
50,157
    
$
51,292
    
$
52,122
    
$
51,133
    
$
53,893
  
Loans held for investment
    
1,848,784
      
1,793,343
      
1,750,304
      
1,712,386
      
1,701,863
  
Allowance for loan losses
    
(21,747
)
    
(23,290
)
    
(23,734
)
    
(24,431
)
    
(24,460
)
Loans held for sale
    
507,442
      
486,601
      
322,249
      
233,110
      
273,196
  
Available-for-sale securities, fair value
    
582,183
      
553,357
      
550,307
      
587,377
      
649,387
  
Foreclosed real estate, net
    
7,403
      
8,964
      
9,902
      
10,533
      
11,641
  
Total assets
    
3,276,881
      
3,187,180
      
2,917,958
      
2,855,563
      
2,899,420
  
Total deposits
    
2,671,562
      
2,640,072
      
2,514,297
      
2,469,133
      
2,438,474
  
Core deposits*
    
2,611,438
      
2,575,797
      
2,455,298
      
2,417,089
      
2,386,154
  
Borrowings
    
194,892
      
125,291
      
55,785
      
56,201
      
74,616
  
Total shareholders' equity
    
330,498
      
329,108
      
265,768
      
253,236
      
236,674
  
Selected Ratios
                                        
Return on average:
                                        
Assets
    
1.12
%
    
0.16
%
    
2.19
%
    
2.03
%
    
1.29
%
Shareholders' equity
    
11.24
%
    
1.74
%
    
24.42
%
    
23.79
%
    
15.59
%
Tangible common equity*
    
13.40
%
    
2.14
%
    
30.64
%
    
30.35
%
    
20.14
%
Pro forma return on average:
                                        
Assets
    
1.12
%
    
1.32
%
    
1.47
%
    
1.37
%
    
0.83
%
Shareholders' equity
    
11.24
%
    
14.43
%
    
16.37
%
    
15.97
%
    
10.07
%
Tangible common equity*
    
13.40
%
    
17.79
%
    
20.55
%
    
20.38
%
    
13.01
%
Average shareholders' equity to average assets
    
9.95
%
    
9.17
%
    
8.96
%
    
8.55
%
    
8.25
%
Net interest margin (tax-equivalent basis)
    
3.99
%
    
4.05
%
    
4.40
%
    
4.03
%
    
3.85
%
Core efficiency ratio (tax-equivalent basis)*
    
73.72
%
    
69.65
%
    
67.80
%
    
71.59
%
    
77.16
%
Loans held for investment to deposit ratio
    
69.20
%
    
67.93
%
    
69.61
%
    
69.35
%
    
69.79
%
Total loan to deposit ratio
    
88.20
%
    
86.36
%
    
82.43
%
    
78.79
%
    
81.00
%
Yield on interest-earning assets
    
4.33
%
    
4.40
%
    
4.74
%
    
4.39
%
    
4.19
%
Cost of interest-bearing liabilities
    
0.49
%
    
0.48
%
    
0.46
%
    
0.48
%
    
0.46
%
Cost of total deposits
    
0.29
%
    
0.30
%
    
0.28
%
    
0.29
%
    
0.28
%
Credit Quality Ratios
                                        
Allowance for loan losses as a percentage of loans held for investment
    
1.18
%
    
1.30
%
    
1.36
%
    
1.43
%
    
1.44
%
Net (charge-off's) recoveries as a percentage of average total loans held for investment
    
(0.17
)%
    
(0.12
)%
    
0.02
%
    
(0.00
)%
    
(0.14
)%
Nonperforming assets as a percentage of total assets
    
0.58
%
    
0.68
%
    
0.78
%
    
0.83
%
    
0.86
%
Preliminary capital ratios (Consolidated)
                  
`
                  
Shareholders' equity to assets
    
10.09
%
    
10.33
%
    
9.11
%
    
8.87
%
    
8.16
%
Tangible common equity to tangible assets*
    
8.65
%
    
8.84
%
    
7.44
%
    
7.14
%
    
6.43
%
Tier 1 capital (to average assets)
    
10.06
%
    
10.32
%
    
7.98
%
    
7.81
%
    
7.64
%
Tier 1 capital (to risk-weighted assets
    
12.21
%
    
12.37
%
    
9.57
%
    
9.68
%
    
9.58
%
Total capital (to risk-weighted assets)
    
13.04
%
    
13.32
%
    
11.00
%
    
11.21
%
    
11.15
%
Common Equity Tier 1 (to risk-weighted assets) (CET1)
    
11.05
%
    
11.16
%
    
8.30
%
    
8.35
%
    
8.23
%
                                         
*These measures are considered non-GAAP financial measures. See “GAAP Reconciliation and Use of Non-GAAP financial measures” and the corresponding financial tables below for a reconciliation and discussion of these non-GAAP measures contained in the corresponding earnings release.
 
 
-MORE-
 
Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data)
                                           
                                           
                                   Q4 2016      Q4 2016  
                                  -     -  
   
2016
    
2015
     Q3 2016     Q4 2015  
   
Fourth
Quarter
    
Third
Quarter
    
Second
Quarter
    
First
Quarter
    
Fourth
 Quarter
    
Percent
variance
    
Percent
variance
  
Interest income:
                                              
Interest and fees on loans
  
$
28,125
    
$
26,550
    
$
26,878
    
$
24,312
    
$
23,620
      
5.93
%
    
19.07
%
Interest on securities
                                                        
Taxable
    
2,350
      
2,402
      
2,849
      
3,045
      
3,108
      
-2.16
%
    
-24.39
%
Tax-exempt
    
947
      
875
      
845
      
705
      
685
      
8.23
%
    
38.25
%
Other
    
145
      
178
      
108
      
180
      
139
      
-18.54
%
    
4.32
%
Total interest income
    
31,567
      
30,005
      
30,680
      
28,242
      
27,552
      
5.21
%
    
14.57
%
Interest expense:
                                                        
Deposits
                                                        
Demand and savings accounts
    
1,387
      
1,340
      
1,289
      
1,397
      
1,318
      
3.51
%
    
5.24
%
Time deposits
    
551
      
575
      
441
      
362
      
306
      
-4.17
%
    
80.07
%
Short-term borrowings
    
20
      
13
      
29
      
59
      
169
      
53.85
%
    
-88.17
%
Long-term debt
    
577
      
460
      
563
      
481
      
463
      
25.43
%
    
24.62
%
Total interest expense
    
2,535
      
2,388
      
2,322
      
2,299
      
2,256
      
6.16
%
    
12.37
%
Net interest income
    
29,032
      
27,617
      
28,358
      
25,943
      
25,296
      
5.12
%
    
14.77
%
Provision for loan losses
    
(752
)
    
71
      
(789
)
    
(9
)
    
(2,127
)
    
-1159.15
%
    
-64.65
%
Net interest income after provision for loan losses
    
29,784
      
27,546
      
29,147
      
25,952
      
27,423
      
8.12
%
    
8.61
%
Noninterest income:
                                                        
Mortgage banking income
    
26,177
      
36,938
      
30,133
      
24,503
      
19,109
      
-29.13
%
    
36.99
%
Service charges on deposit accounts
    
1,880
      
1,870
      
2,276
      
1,983
      
2,149
      
0.53
%
    
-12.52
%
ATM and interchange fees
    
2,035
      
1,814
      
1,907
      
2,035
      
2,026
      
12.18
%
    
0.44
%
Investment services income
    
829
      
857
      
958
      
693
      
796
      
-3.27
%
    
4.15
%
Gain on sale of securities
    
-
      
416
      
2,591
      
1,400
      
2
      
-100.00
%
    
-100.00
%
(Loss) gain on sales or write-downs of foreclosed assets
    
(222
)
    
1,646
      
(131
)
    
(11
)
    
(274
)
    
-113.49
%
    
-18.98
%
(Loss) gain on other assets
    
(127
)
    
7
      
(123
)
    
140
      
(13
)
    
-1914.29
%
    
876.92
%
Other income
    
760
      
414
      
745
      
292
      
314
      
83.57
%
    
142.04
%
Total noninterest income
    
31,332
      
43,962
      
38,356
      
31,035
      
24,109
      
-28.73
%
    
29.96
%
Total revenue
    
60,364
      
71,579
      
66,714
      
56,978
      
49,405
      
-15.67
%
    
22.18
%
Noninterest expenses:
                                                        
Salaries, commissions and employee benefits
    
29,506
      
34,010
      
26,688
      
23,788
      
23,103
      
-13.24
%
    
27.72
%
Occupancy and equipment expense
    
3,044
      
3,171
      
3,226
      
3,170
      
2,885
      
-4.01
%
    
5.51
%
Legal and professional fees
    
810
      
816
      
856
      
1,032
      
961
      
-0.74
%
    
-15.71
%
Data processing
    
1,490
      
1,294
      
669
      
728
      
533
      
15.15
%
    
179.55
%
Merger and conversion
    
-
      
1,122
      
1,540
      
606
      
2,965
      
-100.00
%
    
-100.00
%
Amortization of core deposit intangibles
    
527
      
526
      
527
      
552
      
510
      
0.19
%
    
3.33
%
Amortization of mortgage servicing rights
    
2,100
      
2,796
      
1,968
      
1,457
      
1,058
      
-24.89
%
    
98.49
%
(Recovery of) impairment of mortgage servicing rights
    
(3,411
)
    
2,402
      
4,914
      
773
      
194
      
-242.01
%
    
-1858.25
%
Loss on sale of mortgage servicing rights
      
-
      
-
      
-
      
-
      
100.00
%
    
100.00
%
Regulatory fees and deposit insurance assessments
    
471
      
465
      
529
      
487
      
725
      
1.29
%
    
-35.03
%
Software license and maintenance fees
    
513
      
503
      
1,349
      
509
      
576
      
1.99
%
    
-10.94
%
Advertising
    
2,537
      
2,220
      
3,601
      
2,250
      
1,991
      
14.28
%
    
27.42
%
Other expense
    
5,285
      
6,204
      
4,728
      
5,995
      
6,379
      
-14.81
%
    
-17.15
%
Total noninterest expense
    
47,319
      
55,529
      
50,595
      
41,347
      
41,880
      
-14.79
%
    
12.99
%
Net income before income taxes
    
13,797
      
15,979
      
16,908
      
15,640
      
9,652
      
-13.66
%
    
42.94
%
Income tax expense
    
4,787
      
14,772
      
1,133
      
1,041
      
461
      
-67.59
%
    
938.39
%
Net income
  
$
9,010
    
$
1,207
    
$
15,775
    
$
14,599
    
$
9,191
      
646.48
%
    
-1.97
%
Weighted average common shares outstanding:
                                  
Basic
    
23,977,028
      
18,259,128
      
17,180,000
      
17,180,000
      
17,180,000
      
31.32
%
    
39.56
%
Fully diluted
    
24,500,943
      
18,332,192
      
17,180,000
      
17,180,000
      
17,180,000
      
33.65
%
    
42.61
%
Earnings per share
                                                        
Basic
  
$
0.38
    
$
0.07
    
$
0.92
    
$
0.85
    
$
0.53
      
468.46
%
    
-29.76
%
Fully diluted
  
$
0.37
    
$
0.07
    
$
0.92
    
$
0.85
    
$
0.53
      
458.53
%
    
-31.26
%
                                                         
Pro Forma:
                                                        
Income tax expense
  
$
4,787
    
$
5,946
    
$
6,332
    
$
5,837
    
$
3,717
                  
Net income
  
$
9,010
    
$
10,033
    
$
10,576
    
$
9,803
    
$
5,935
                  
Earnings per share
                                                        
Basic
  
$
0.38
    
$
0.55
    
$
0.62
    
$
0.57
    
$
0.35
                  
Fully diluted
  
$
0.37
    
$
0.55
    
$
0.62
    
$
0.57
    
$
0.35
                  

-MORE-
 
Consolidated Statements of Income
(Unaudited)
(In Thousands, Except Share Data)
                   
                   
   
For the year ended
        
   
December 31,
        
   
2016
    
2015
    
Percent
variance
  
Interest income:
                  
Interest and fees on loans
  
$
105,865
    
$
87,723
      
20.68
%
Interest on securities
                        
Taxable
    
10,646
      
11,783
      
-9.65
%
Tax-exempt
    
3,372
      
2,808
      
20.09
%
Other
    
611
      
468
      
30.56
%
Total interest income
    
120,494
      
102,782
      
17.23
%
Interest expense:
                        
Deposits
                        
Demand and savings accounts
    
5,413
      
4,733
      
14.37
%
Time deposits
    
1,929
      
1,559
      
23.73
%
Short-term borrowings
    
121
      
712
      
-83.01
%
Long-term debt
    
2,081
      
1,906
      
9.18
%
Total interest expense
    
9,544
      
8,910
      
7.12
%
Net interest income
    
110,950
      
93,872
      
18.19
%
Provision for loan losses
    
(1,479
)
    
(3,064
)
    
-51.73
%
Net interest income after provision for loan losses
    
112,429
      
96,936
      
15.98
%
Noninterest income:
                        
Mortgage banking income
    
117,751
      
70,190
      
67.76
%
Service charges on deposit accounts
    
8,009
      
7,389
      
8.39
%
ATM and interchange fees
    
7,791
      
6,536
      
19.20
%
Investment services income
    
3,337
      
3,260
      
2.36
%
Bargain purchase gain
    
-
      
2,794
      
-100.00
%
Gain on sale of securities
    
4,407
      
1,844
      
138.99
%
Gain (loss) on sales or write-downs of foreclosed assets
    
1,282
      
(317
)
    
-504.42
%
(Loss) gain on other assets
    
(103
)
    
(393
)
    
-73.79
%
Other income
    
2,211
      
1,077
      
105.29
%
Total noninterest income
    
144,685
      
92,380
      
56.62
%
Total revenue
    
255,635
      
186,252
      
37.25
%
Noninterest expenses:
                        
Salaries, commissions and employee benefits
    
113,992
      
84,214
      
35.36
%
Occupancy and equipment expense
    
12,611
      
10,777
      
17.02
%
Legal and professional fees
    
3,514
      
3,355
      
4.74
%
Data processing
    
4,181
      
2,053
      
103.65
%
Merger and conversion
    
3,268
      
3,543
      
-7.76
%
Amortization of core deposit intangibles
    
2,132
      
1,731
      
23.17
%
Amortization of mortgage servicing rights
    
8,321
      
2,601
      
219.92
%
Impairment of mortgage servicing rights
    
4,678
      
194
      
2311.34
%
Loss on sale of mortgage servicing rights
    
4,447
      
-
      
100.00
%
Regulatory fees and deposit insurance assessments
    
1,952
      
2,190
      
-10.87
%
Software license and maintenance fees
    
2,874
      
1,986
      
44.71
%
Advertising
    
10,608
      
7,866
      
34.86
%
Other expense
    
22,212
      
17,982
      
23.52
%
Total noninterest expense
    
194,790
      
138,492
      
40.65
%
Net income before income taxes
    
62,324
      
50,824
      
22.63
%
Income tax expense
    
21,733
      
2,968
      
632.24
%
Net income
  
$
40,591
    
$
47,856
      
-15.18
%
Weighted average common shares outstanding:
          
Basic
    
19,165,182
      
17,180,000
          
Fully diluted
    
19,312,174
      
17,180,000
          
Earnings per share
                        
Basic
  
$
2.12
    
$
2.79
          
Fully diluted
  
$
2.10
    
$
2.79
          
                         
Pro Forma:
                        
Income tax expense
    
22,941
      
17,829
          
Net income
    
39,383
      
32,995
          
Earnings per share
                        
Basic
  
$
2.05
    
$
1.92
          
Fully diluted
  
$
2.04
    
$
1.92
          
 
 
-MORE-
 
Consolidated Balance Sheets
(Unaudited)
(In Thousands, Except Share Data)
                                     
                                     
                                   Q4 2016  
                                  -  
   
2016
    
2015
      Q4 2015  
   
Fourth
Quarter
    
Third
Quarter
    
Second
Quarter
    
First
Quarter
    
Fourth
Quarter
    
Percent
variance
  
ASSETS
                                      
Cash and due from banks
  
$
50,157
    
$
51,292
    
$
52,122
    
$
51,133
    
$
53,893
      
-6.93
%
Federal funds sold
    
13,037
      
8,848
      
13,415
      
11,662
      
21,628
      
-39.72
%
Interest bearing deposits in financial institutions
    
73,133
      
57,157
      
23,382
      
51,766
      
22,202
      
229.40
%
Cash and cash equivalents
    
136,327
      
117,297
      
88,919
      
114,561
      
97,723
      
39.50
%
Investments:
                                                
Available-for-sale securities, at fair value
    
582,183
      
553,357
      
550,307
      
587,377
      
649,387
      
-10.35
%
Federal Home Loan Bank stock, at cost
    
7,743
      
6,528
      
6,528
      
6,528
      
6,528
      
18.61
%
Loans held for sale, at fair value
    
507,442
      
486,601
      
322,249
      
233,110
      
273,196
      
85.74
%
Loans
    
1,848,784
      
1,793,343
      
1,750,304
      
1,712,386
      
1,701,863
      
8.63
%
Less: allowance for loan losses
    
21,747
      
23,290
      
23,734
      
24,431
      
24,460
      
-11.09
%
Net loans
    
1,827,037
      
1,770,053
      
1,726,570
      
1,687,955
      
1,677,403
      
8.92
%
Premises and equipment, net
    
66,651
      
65,882
      
65,686
      
66,530
      
65,892
      
1.15
%
Foreclosed real estate, net
    
7,403
      
8,964
      
9,902
      
10,533
      
11,641
      
-36.41
%
Interest receivable
    
7,241
      
7,040
      
6,627
      
7,293
      
6,763
      
7.07
%
Mortgage servicing rights, net
    
32,070
      
46,291
      
40,382
      
36,611
      
29,711
      
7.94
%
Goodwill
    
46,867
      
46,867
      
46,867
      
46,867
      
46,904
      
-0.08
%
Core deposit intangible, net
    
4,563
      
5,090
      
5,616
      
6,143
      
6,695
      
-31.84
%
Other assets
    
51,354
      
73,210
      
48,305
      
52,055
      
27,577
      
86.22
%
Total assets
  
$
3,276,881
    
$
3,187,180
    
$
2,917,958
    
$
2,855,563
    
$
2,899,420
      
13.02
%
LIABILITIES AND SHAREHOLDERS' EQUITY
                                          
Liabilities:
                                                
Demand deposits
                                                
Noninterest-bearing
  
$
697,072
    
$
726,248
    
$
680,165
    
$
617,663
    
$
626,955
      
11.18
%
Interest-bearing
    
1,449,382
      
1,382,981
      
1,304,606
      
1,316,289
      
1,273,438
      
13.82
%
Savings deposits
    
134,077
      
131,819
      
129,944
      
220,401
      
212,522
      
-36.91
%
Time deposits
    
391,031
      
399,024
      
399,582
      
314,780
      
325,559
      
20.11
%
Total deposits
    
2,671,562
      
2,640,072
      
2,514,297
      
2,469,133
      
2,438,474
      
9.56
%
Securities sold under agreements to repurchase
    
21,561
      
29,137
      
29,278
      
40,389
      
105,133
      
-79.49
%
Short-term borrowings
    
150,000
      
80,000
      
—
      
—
      
18,000
      
733.33
%
Long-term debt
    
44,892
      
45,291
      
55,785
      
56,201
      
56,616
      
-20.71
%
Deferred tax liability
    
13,691
      
15,457
      
2,215
      
2,002
      
713
      
1820.20
%
Accrued expenses and other liabilities
    
44,677
      
48,115
      
50,615
      
34,602
      
43,810
      
1.98
%
Total liabilities
    
2,946,383
      
2,858,072
      
2,652,190
      
2,602,327
      
2,662,746
      
10.65
%
Shareholders' equity:
                                                
Common stock, $1 par vlaue
    
24,109
      
23,975
      
17,180
      
17,180
      
17,180
      
40.33
%
Additional paid-in capital
    
213,479
      
211,765
      
94,544
      
94,544
      
94,544
      
125.80
%
Retained earnings
    
93,784
      
84,774
      
143,567
      
132,092
      
122,493
      
-23.44
%
Accumulated other comprehensive (loss) income, net
    
(874
)
    
8,594
      
10,477
      
9,420
      
2,457
      
-135.57
%
Total shareholders' equity
    
330,498
      
329,108
      
265,768
      
253,236
      
236,674
      
39.64
%
Total liabilities and shareholders' equity
  
$
3,276,881
    
$
3,187,180
    
$
2,917,958
    
$
2,855,563
    
$
2,899,420
      
13.02
%
 
 
-MORE-
 
Average Balance, Average Yield Earned and Average Rate Paid
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                                                       
                                                       
                                                       
   
Three Months Ended   
    
Three Months Ended
    
Three Months Ended
  
   
December 31, 2016
    
September 30, 2016
    
June 30, 2016
  
   
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
    
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
    
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
  
Interest-earning assets:
                                                      
Loans(1)
  
$
1,811,136
      
24,001
    
5.27
%
  
$
1,750,300
      
23,633
    
5.37
%
    
1,736,493
      
24,843
    
5.75
%
Loans held for sale
    
510,219
      
4,167
    
3.25
%
    
409,736
      
2,948
    
2.86
%
    
276,943
      
2,099
    
3.05
%
Securities:
                                                                  
Taxable
    
455,275
      
2,350
    
2.05
%
    
454,601
      
2,426
    
2.12
%
    
499,617
      
2,849
    
2.29
%
Tax-exempt(1)
    
108,230
      
1,558
    
5.73
%
    
100,947
      
1,440
    
5.67
%
    
82,368
      
1,390
    
6.79
%
Total Securities(1)
    
563,505
      
3,908
    
2.76
%
    
555,548
      
3,866
    
2.77
%
    
581,985
      
4,239
    
2.93
%
Federal funds sold
    
10,192
      
15
    
0.59
%
    
14,748
      
18
    
0.49
%
    
10,745
      
16
    
0.60
%
Interest-bearing deposits with other financial institutions
    
60,438
      
65
    
0.43
%
    
32,262
      
71
    
0.88
%
    
46,594
      
73
    
0.63
%
FHLB stock
    
6,931
      
65
    
3.73
%
    
6,528
      
65
    
3.96
%
    
6,528
      
66
    
4.07
%
Total interest earning assets(1)
    
2,962,421
      
32,221
    
4.33
%
    
2,769,122
      
30,601
    
4.40
%
    
2,659,288
      
31,336
    
4.74
%
Noninterest Earning Assets:
                                                                  
Cash and due from banks
    
43,883
                    
46,440
                    
46,646
                
Allowance for loan losses
    
(23,283
)
                  
(23,493
)
                  
(24,625
)
              
Other assets
    
223,377
                    
223,601
                    
218,765
                
Total noninterest earning assets
    
243,977
                    
246,548
                    
240,786
                
Total assets
  
$
3,206,398
                  
$
3,015,670
                  
$
2,900,074
                
Interest-bearing liabilities:
                                                                  
Interest bearing deposits:
                                                                  
Money market
  
$
693,790
    
$
662
    
0.38
%
  
$
622,430
    
$
650
    
0.42
%
  
$
585,947
    
$
446
    
0.31
%
Negotiable order of withdrawals
    
679,100
      
674
    
0.39
%
    
683,527
      
639
    
0.37
%
    
717,590
      
687
    
0.39
%
Savings deposits
    
132,016
      
51
    
0.15
%
    
130,864
      
51
    
0.16
%
    
220,639
      
156
    
0.28
%
Time deposits
    
394,739
      
551
    
0.56
%
    
400,088
      
575
    
0.57
%
    
310,744
      
441
    
0.57
%
Total interest bearing deposits
    
1,899,645
      
1,938
    
0.41
%
    
1,836,909
      
1,915
    
0.41
%
    
1,834,920
      
1,730
    
0.38
%
Other interest-bearing liabilities:
                                                                  
FHLB advances
    
117,825
      
258
    
0.87
%
    
58,803
      
171
    
1.16
%
    
36,773
      
135
    
1.48
%
Other borrowings
    
25,545
      
20
    
0.31
%
    
30,515
      
13
    
0.17
%
    
34,041
      
23
    
0.27
%
Long-term debt
    
32,609
      
319
    
3.89
%
    
39,910
      
289
    
2.88
%
    
41,005
      
358
    
3.51
%
Total other interest-bearing liabilities
    
175,979
      
597
    
1.35
%
    
129,228
      
473
    
1.46
%
    
111,819
      
516
    
1.86
%
Total Interest-bearing liabilities
  
$
2,075,624
    
$
2,535
    
0.49
%
  
$
1,966,137
    
$
2,388
    
0.48
%
  
$
1,946,739
    
$
2,246
    
0.46
%
Noninterest bearing liabilities:
                                                                  
Demand deposits
  
$
768,018
                  
$
738,328
                  
$
668,295
                
Other liabilities
    
43,770
                    
34,656
                    
25,252
                
Total noninterest-bearing liabilities
    
811,788
                    
772,984
                    
693,547
                
Total liabilities
    
2,887,412
                    
2,739,121
                    
2,640,286
                
Shareholders' equity
    
318,986
                    
276,549
                    
259,790
                
Total liabilities and shareholders' equity
  
$
3,206,398
                  
$
3,015,670
                  
$
2,900,076
                
Net interest income  (1)
          
$
29,686
                  
$
28,213
                  
$
29,090
        
Interest rate spread (1)
                  
3.92
%
                  
3.98
%
                  
4.36
%
Net interest margin (1)
                  
3.99
%
                  
4.05
%
                  
4.40
%
Average interest-earning assets to average interesting-bearing liabilities
                  
142.7
%
                  
140.8
%
                  
136.6
%
Tax equivalent adjustment
          
$
654
                  
$
596
                  
$
732
        
Loan yield components:
                                                                  
Contractual interest rate on loans held for
investment (1)
            
21,790
    
4.79
%
          
$
20,513
    
4.66
%
          
$
19,927
    
4.62
%
Origination and other loan fee income
            
1,868
    
0.41
%
            
2,306
    
0.52
%
            
2,536
    
0.59
%
Accretion on purchased loans
            
343
    
0.08
%
            
814
    
0.19
%
            
1,555
    
0.36
%
    Syndication fee income
            
—
    
—
              
—
    
—
              
825
    
0.19
%
Total loan yield
          
$
24,001
    
5.27
%
          
$
23,633
    
5.37
%
          
$
24,843
    
5.75
%
                                                                   
(1) Includes tax equivalent adjustment using combined rate of 39.225%
                              
 
 
-MORE-
 
Average Balance, Average Yield Earned and Average Rate Paid
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                                     
                                     
                                     
   
Three Months Ended
    
Three Months Ended
  
   
March 31, 2016
    
December 31, 2015
  
   
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
    
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
  
Interest-earning assets:
                                    
Loans(1)
    
1,704,973
      
22,305
      
5.26
%
  
$
1,663,468
    
$
21,162
      
5.05
%
Loans held for sale
    
250,355
      
2,054
      
3.30
%
    
315,225
      
2,506
      
3.15
%
Securities:
                                                
Taxable
    
534,000
      
3,021
      
2.28
%
    
566,446
      
3,108
      
2.18
%
Tax-exempt(1)
    
70,561
      
1,160
      
6.61
%
    
71,289
      
1,127
      
6.27
%
Total Securities(1)
    
604,561
      
4,181
      
2.78
%
    
637,735
      
4,235
      
2.63
%
Federal funds sold
    
15,066
      
15
      
0.40
%
    
17,739
      
19
      
0.42
%
Interest-bearing deposits with other financial institutions
    
46,519
      
76
      
0.66
%
    
13,080
      
53
      
1.61
%
FHLB stock
    
6,528
      
66
      
4.07
%
    
6,655
      
67
      
3.99
%
Total interest earning assets(1)
    
2,628,002
      
28,697
      
4.39
%
    
2,653,902
      
28,042
      
4.19
%
Noninterest Earning Assets:
                                                
Cash and due from banks
    
47,211
                      
56,596
                  
Allowance for loan losses
    
(24,480
)
                    
(27,308
)
                
Other assets
    
234,714
                      
152,396
                  
Total noninterest earning assets
    
257,445
                      
181,684
                  
Total assets
  
$
2,885,447
                    
$
2,835,586
                  
Interest-bearing liabilities:
                                                
Interest bearing deposits:
                                                
Money market
  
$
630,911
    
$
534
      
0.34
%
  
$
580,708
    
$
461
      
0.31
%
Negotiable order of withdrawals
    
656,643
      
643
      
0.39
%
    
614,908
      
592
      
0.38
%
Savings deposits
    
208,629
      
220
      
0.42
%
    
207,606
      
265
      
0.51
%
Time deposits
    
319,715
      
362
      
0.46
%
    
328,237
      
306
      
0.37
%
Total interest bearing deposits
    
1,815,898
      
1,759
      
0.39
%
    
1,731,459
      
1,624
      
0.37
%
Other interest-bearing liabilities:
                                                
FHLB advances
    
50,035
      
124
      
1.00
%
    
56,847
      
135
      
0.94
%
Other borrowings
    
93,050
      
65
      
0.28
%
    
119,660
      
82
      
0.27
%
Long-term debt
    
41,005
      
427
      
4.19
%
    
41,005
      
415
      
4.02
%
Total other interest-bearing liabilities
    
184,090
      
616
      
1.35
%
    
217,512
      
632
      
1.15
%
Total Interest-bearing liabilities
  
$
1,999,988
    
$
2,375
      
0.48
%
  
$
1,948,971
    
$
2,256
      
0.46
%
Noninterest bearing liabilities:
                                                
Demand deposits
  
$
605,578
                    
$
599,255
                  
Other liabilities
    
33,050
                      
53,428
                  
Total noninterest-bearing liabilities
    
638,628
                      
652,683
                  
Total liabilities
    
2,638,616
                      
2,601,654
                  
Shareholders' equity
    
246,831
                      
233,932
                  
Total liabilities and shareholders' equity
  
$
2,885,447
                    
$
2,835,586
                  
Net interest income (1)
          
$
26,322
                    
$
25,786
          
Interest rate spread (1)
                    
4.00
%
                    
3.82
%
Net interest margin (1)
                    
4.03
%
                    
3.85
%
Average interest-earning assets to average interesting-bearing liabilities
                    
131.4
%
                    
136.2
%
Tax equivalent adjustment
          
$
379
                    
$
490
          
Loan yield components:
                                                
Contractual interest rate on loans held for investment (1)
          
$
20,116
      
4.75
%
          
$
20,020
      
4.77
%
Origination and other loan fee income
            
1,363
      
0.32
%
            
888
      
0.21
 
Accretion on purchased loans
            
826
      
0.19
%
            
254
      
0.06
%
Syndication fee income
            
—
      
—
              
—
      
—
  
Total loan yield
          
$
22,305
      
5.26
%
          
$
21,162
      
5.05
%
                                                 
(1) Includes tax equivalent adjustment using combined rate of 39.225%
                                          
 
 
-MORE-
Average Balance, Average Yield Earned and Average Rate Paid
For the Periods Ended
(Unaudited)
(In Thousands, Except Share Data)
                                     
                                     
                                     
   
For the Year Ended
    
For the Year Ended
  
   
December 31, 2016
    
December 31, 2015
  
   
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
    
Average
balances
    
Interest
income/
expense
    
Average
yield/
rate
  
Interest-earning assets:
                                    
Loans(1)
  
$
1,750,796
    
$
94,782
      
5.41
%
  
$
1,528,719
    
$
78,275
      
5.12
%
Loans held for sale
    
362,518
      
11,268
      
3.11
%
    
250,237
      
9,651
      
3.86
%
Securities:
                                                
Taxable
    
485,083
      
10,646
      
2.19
%
    
537,762
      
11,783
      
2.19
%
Tax-exempt(1)
    
91,863
      
5,548
      
6.04
%
    
73,871
      
4,620
      
6.25
%
Total Securities(1)
    
576,946
      
16,194
      
2.81
%
    
611,633
      
16,403
      
2.68
%
Federal funds sold
    
12,686
      
64
      
0.50
%
    
8,969
      
51
      
0.57
%
Interest-bearing deposits with other financial institutions
    
51,861
      
285
      
0.55
%
    
10,508
      
155
      
1.48
%
FHLB stock
    
6,630
      
262
      
3.95
%
    
6,692
      
262
      
3.92
%
Total interest earning assets(1)
    
2,761,437
      
122,855
      
4.45
%
    
2,416,758
      
104,797
      
4.34
%
Noninterest Earning Assets:
                                                
Cash and due from banks
    
46,523
                      
45,987
                  
Allowance for loan losses
    
(23,986
)
                    
(28,688
)
                
Other assets
    
217,300
                      
143,838
                  
Total noninterest earning assets
    
239,837
                      
161,137
                  
Total assets
  
$
3,001,274
                    
$
2,577,895
                  
Interest-bearing liabilities:
                                                
Interest bearing deposits:
                                                
Money market
  
$
614,804
    
$
2,292
      
0.37
%
  
$
455,271
    
$
1,477
      
0.32
%
Negotiable order of withdrawals
    
699,907
      
2,643
      
0.38
%
    
621,630
      
2,327
      
0.37
%
Savings deposits
    
129,544
      
478
      
0.37
%
    
183,307
      
929
      
0.51
%
Time deposits
    
401,483
      
1,929
      
0.48
%
    
303,354
      
1,559
      
0.51
%
Total interest bearing deposits
    
1,845,738
      
7,342
      
0.40
%
    
1,563,562
      
6,292
      
0.40
%
Other interest-bearing liabilities:
                                                
FHLB advances
    
64,309
      
688
      
1.07
%
    
78,066
      
608
      
0.78
%
Other borrowings
    
45,691
      
121
      
0.26
%
    
127,449
      
318
      
0.25
%
Long-term debt
    
38,207
      
1,393
      
3.65
%
    
41,003
      
1,692
      
4.13
%
Total other interest-bearing liabilities
    
148,207
      
2,202
      
1.49
%
    
246,518
      
2,618
      
1.06
%
Total Interest-bearing liabilities
  
$
1,993,945
    
$
9,544
      
0.48
%
  
$
1,810,080
    
$
8,910
      
0.49
%
Noninterest bearing liabilities:
                                                
Demand deposits
  
$
695,765
                    
$
519,273
                  
Other liabilities
    
34,978
                      
19,698
                  
Total noninterest-bearing liabilities
    
730,743
                      
538,971
                  
Total liabilities
    
2,724,688
                      
2,349,051
                  
Shareholders' equity
    
276,587
                      
228,844
                  
Total liabilities and shareholders' equity
  
$
3,001,275
                    
$
2,577,895
                  
Net interest income (1)
          
$
113,311
                    
$
95,887
          
Interest rate spread (1)
                    
4.05
%
                    
3.93
%
Net interest margin (1)
                    
4.10
%
                    
3.97
%
Average interest-earning assets to average interesting-bearing liabilities
                    
138.5
%
                    
133.5
%
Tax equivalent adjustment
          
$
2,361
                    
$
2,015
          
Loan yield components:
                                                
Contractual interest rate on loans held for investment (1)
    
$
82,346
      
4.70
%
          
$
72,975
      
4.77
%
Origination and other loan fee income
            
8,073
      
0.46
%
            
4,356
      
0.28
%
Accretion on purchased loans
            
3,538
      
0.20
%
            
254
      
0.02
%
Syndicated fee income
            
825
      
0.05
%
            
690
      
0.05
%
Total loan yield
          
$
94,782
      
5.41
%
          
$
78,275
      
5.12
%
                                                 
(1) Includes tax equivalent adjustment using combined rate of 39.225%
                          
 
 
-MORE-
 
Segment Data
For the Quarters Ended
(Unaudited)
(In Thousands, Except %)
                               
   
2016
  
2015
   
Fourth Quarter
  
Third Quarter
  
Second Quarter
  
First Quarter
  
Fourth Quarter
Banking segment
                              
Net interest income
  
$
28,959
    
$
28,142
    
$
29,217
    
$
26,014
    
$
24,905
  
Provision for loan losses
    
(752
)
    
71
      
(789
)
    
(9
)
    
(2,127
)
Mortgage banking income- retail footprint
    
4,439
      
8,981
      
7,215
      
6,144
      
4,997
  
Other noninterest income
    
5,155
      
7,024
      
8,223
      
6,532
      
5,000
  
Noninterest expense (1)
    
26,856
      
31,785
      
28,144
      
25,607
      
28,403
  
Pre-tax income after allocations
    
12,449
      
12,291
      
17,300
      
13,092
      
8,626
  
Total assets
    
2,752,773
      
2,661,116
      
2,508,867
      
2,534,423
      
2,570,071
  
Intracompany funding income included in net interest income
    
4,081
      
3,473
      
2,824
      
2,259
      
2,332
  
Efficiency ratio*
    
65.14
%
    
65.22
%
    
63.06
%
    
66.72
%
    
70.53
%
Mortgage segment
                                        
Net interest income
    
73
      
(525
)
    
(859
)
    
(71
)
    
391
  
Provision for loan losses
    
-
      
-
      
-
      
-
      
-
  
Noninterest income
    
21,738
      
27,957
      
22,918
      
18,359
      
14,112
  
Noninterest expense
    
20,463
      
23,744
      
22,451
      
15,740
      
13,477
  
Direct contribution
    
1,348
      
3,688
      
(392
)
    
2,548
      
1,026
  
Total assets
    
524,108
      
526,064
      
409,091
      
321,140
      
329,349
  
Intracompany funding charge included
                                  
     in net interest income
    
4,081
      
3,473
      
2,824
      
2,259
      
2,332
  
Efficiency ratio*
    
89.37
%
    
76.34
%
    
76.52
%
    
81.52
%
    
94.13
%
Mortgage closings
                                        
Consumer direct
  
$
779,305
    
$
686,882
    
$
579,589
    
$
419,894
    
$
349,495
  
Third party origination (TPO)
    
191,250
      
210,157
      
171,835
      
146,811
      
149,483
  
Retail
    
64,910
      
74,262
      
64,304
      
43,730
      
41,858
  
Retail footprint
    
179,770
      
212,266
      
174,545
      
124,941
      
129,964
  
Reverse
    
19,859
      
20,351
      
17,008
      
15,341
      
15,497
  
Correspondent
    
316,465
      
155,191
      
4,145
      
-
      
-
  
       Total
  
$
1,551,559
    
$
1,359,109
    
$
1,011,426
    
$
750,717
    
$
686,297
  
Gain on origination and sale of
                                  
     mortgage loans held for sale
  
$
22,426
    
$
33,277
    
$
26,705
    
$
23,280
    
$
17,596
  
Mortgage servicing income
    
3,751
      
3,661
      
3,428
      
1,223
      
1,513
  
Total mortgage banking
                                        
     income
  
$
26,177
    
$
36,938
    
$
30,133
    
$
24,503
    
$
19,109
  
Interest rate lock commitments
                                  
      pipeline (period end)
                                        
Consumer direct
  
$
307,699
    
$
573,636
    
$
479,005
    
$
338,506
    
$
141,133
  
Third party origination (TPO)
    
79,967
      
97,353
      
105,590
      
83,911
      
69,576
  
Retail
    
77,033
      
107,419
      
122,951
      
91,921
      
52,686
  
Correspondent
    
68,221
      
72,092
      
20,392
      
-
      
-
  
               Total
  
$
532,920
    
$
850,500
    
$
727,938
    
$
514,338
    
$
263,395
  
                                         
*These measures are considered non-GAAP financial measures. See “GAAP Reconciliation and Use of Non-GAAP financial measures” and the corresponding financial tables below for a reconciliation and discussion of these non-GAAP measures contained in the corresponding earnings release.
 
-MORE-
 
Loans and Deposits by Market
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                               
                               
   
2016
        
2015
   
Fourth Quarter
  
Third Quarter
  
Second Quarter
  
First Quarter
  
Fourth Quarter
Loans by market
                              
Metropolitan
  
$
1,352,181
    
$
1,296,673
    
$
1,248,548
    
$
1,227,944
    
$
1,199,736
  
Community
    
465,928
      
465,946
      
464,876
      
457,807
      
464,204
  
Other
    
30,675
      
30,724
      
36,880
      
26,635
      
37,923
  
Total
  
$
1,848,784
    
$
1,793,343
    
$
1,750,304
    
$
1,712,386
    
$
1,701,863
  
Deposits by market
                                        
Metropolitan
    
1,523,116
    
$
1,494,267
    
$
1,380,854
    
$
1,353,613
    
$
1,339,632
  
Community
    
1,103,033
      
1,084,243
      
1,089,305
      
1,115,520
      
1,098,842
  
Mortgage (1)
    
45,413
      
61,562
      
44,138
      
-
      
-
  
Total
  
$
2,671,562
    
$
2,640,072
    
$
2,514,297
    
$
2,469,133
    
$
2,438,474
  
                                         
(1) Deposits related to escrow balances from mortgage servicing portfolio
                
 
-MORE-
 
Loan Portfolio and Asset Quality
  
For the Quarters Ended
  
(Unaudited)
  
(In Thousands, Except %)
  
                               
   
2016
  
2015
   
December 31,
2016
  
September 30,
2016
  
June 30,
2016
  
March 31,
2016
  
December 31,
2015
                               
Commercial and industrial
  
$
386,233
    
$
360,816
    
$
346,381
    
$
320,499
    
$
318,791
  
Construction
    
245,905
      
234,486
      
216,181
      
214,536
      
238,170
  
Residential real estate:
                                        
1-to-4 family mortgage
    
294,924
      
286,605
      
287,989
      
290,542
      
290,704
  
Residential line of credit
    
177,190
      
173,898
      
174,525
      
171,218
      
171,526
  
Multi-family mortgage
    
44,977
      
54,129
      
41,005
      
59,123
      
59,510
  
Commercial real estate:
                                        
Owner occupied
    
357,346
      
370,326
      
363,737
      
361,156
      
337,664
  
Non-owner occupied
    
267,902
      
237,550
      
237,252
      
226,734
      
207,871
  
Consumer and other
    
74,307
      
75,533
      
83,234
      
68,578
      
77,627
  
Total loans held for investment
  
$
1,848,784
    
$
1,793,343
    
$
1,750,304
    
$
1,712,386
    
$
1,701,863
  
                                         
Allowance for loan losses rollforward summary
                                        
Allowance for loan losses at the beginning of the period
  
$
23,290
    
$
23,734
    
$
24,431
    
$
24,460
    
$
27,194
  
Charge-off's
    
(1,230
)
    
(714
)
    
(654
)
    
(252
)
    
(1,463
)
Recoveries
    
439
      
199
      
746
      
232
      
856
  
Provision for loan losses
    
(752
)
    
71
      
(789
)
    
(9
)
    
(2,127
)
Allowance for loan losses at the end of the period
  
$
21,747
    
$
23,290
    
$
23,734
    
$
24,431
    
$
24,460
  
                                         
Allowance for loan losses as a percentage of total loans held for investment
    
1.18
%
    
1.30
%
    
1.36
%
    
1.43
%
    
1.44
%
                                         
Charge-offs:
                                        
Commercial and Industrial
  
$
(6
)
  
$
(358
)
  
$
(196
)
  
$
(2
)
  
$
(734
)
Construction
    
-
      
-
      
(2
)
    
-
      
(48
)
Residential real estate:
                                        
1-to-4 family mortgage
    
(5
)
    
(166
)
    
(53
)
    
-
      
(289
)
Residential line of credit
    
(28
)
    
(29
)
    
(75
)
    
-
      
(126
)
Multi-family mortgage
    
-
      
-
      
-
      
-
      
-
  
Commercial real estate:
                                        
Owner occupied
    
(156
)
    
-
      
(93
)
    
-
      
(5
)
Non-owner occupied
    
(527
)
    
-
      
-
      
-
      
-
  
Consumer and other
    
(508
)
    
(161
)
    
(235
)
    
(250
)
    
(261
)
Total Charge Offs:
    
(1,230
)
    
(714
)
    
(654
)
    
(252
)
    
(1,463
)
Recoveries:
                                        
Commercial and Industrial
    
44
      
8
      
462
      
10
      
63
  
Construction
    
79
      
32
      
64
      
41
      
268
  
Residential real estate:
                                        
1-to-4 family mortgage
    
18
      
2
      
45
      
62
      
34
  
Residential line of credit
    
31
      
36
      
70
      
37
      
35
  
Multi-family mortgage
    
-
      
-
      
-
      
-
      
-
  
Commercial real estate:
                                        
Owner occupied
    
125
      
4
      
5
      
6
      
9
  
Non-owner occupied
    
168
      
22
      
1
      
4
      
336
  
Consumer and other
    
(26
)
    
95
      
99
      
72
      
111
  
Total Recoveries:
    
439
      
199
      
746
      
232
      
856
  
Net (charge-off's) recoveries
  
$
(791
)
  
$
(515
)
  
$
92
    
$
(20
)
  
$
(607
)
                                         
Net (charge-off's) recoveries as a percentage of average total loans
    
-0.17
%
    
-0.12
%
    
0.02
%
    
0.00
%
    
-0.14
%
                                         
Loans classified as substandard
  
$
38,585
    
$
40,056
    
$
41,709
    
$
46,295
    
$
48,529
  
                                         
Nonperforming assets
                                        
Past due 90 days or more and accruing interest
  
$
1,329
    
$
1,342
    
$
1,354
    
$
1,431
    
$
887
  
Non-accrual
    
8,729
      
9,622
      
9,752
      
10,064
      
10,700
  
Total nonperforming loans
  
$
10,058
    
$
10,964
    
$
11,106
    
$
11,495
    
$
11,587
  
Other real estate owned
    
7,403
      
8,964
      
9,902
      
10,533
      
11,641
  
Other
    
1,654
      
1,654
      
1,654
      
1,654
      
1,654
  
Total nonperforming assets
  
$
19,115
    
$
21,582
    
$
22,662
    
$
23,682
    
$
24,882
  
Total nonperforming loans as a percentage of
   loans held for investment
    
0.54
%
    
0.61
%
    
0.63
%
    
0.67
%
    
0.68
%
Total nonperforming assets as a percentage of
   total assets
    
0.58
%
    
0.68
%
    
0.78
%
    
0.83
%
    
0.86
%
Total accruing loans over 90 days delinquent as
   a percentage of total assets
    
0.04
%
    
0.04
%
    
0.05
%
    
0.05
%
    
0.03
%
Loans restructured as troubled debt
   restructurings
  
$
8,801
    
$
10,125
    
$
14,970
    
$
15,444
    
$
15,289
  
Troubled debt restructurings as a percentage of
   loans held for investment
    
0.48
%
    
0.56
%
    
0.86
%
    
0.90
%
    
0.90
%
                                         
Note: During the fourth quarter of 2016, the Company realigned certain loan call report codes to better align with financial reporting categories. All periods shown have been amended to reflect this change.
 
-MORE-
 
Capital Ratios
(Unaudited)
(In Thousands, Except %)
             
             
Computation of Tangible Common Equity to Tangible Assets:
  
December 31, 2016
  
December 31, 2015
             
Total Equity
  
$
330,498
    
$
236,674
  
Less:
                
    Goodwill
    
46,867
      
46,904
  
    Other intangibles
    
4,563
      
6,695
  
Tangible Common Equity
  
$
279,068
    
$
183,075
  
                 
Total Assets
  
$
3,276,881
    
$
2,899,420
  
Less:
                
    Goodwill
    
46,867
      
46,904
  
    Other intangibles
    
4,563
      
6,695
  
Tangible Assets
  
$
3,225,451
    
$
2,845,821
  
                 
Total Common Equity to Total Assets
    
10.09
%
    
8.16
%
Tangible Common Equity to Tangible Assets*
    
8.65
%
    
6.43
%
                 
                 
   
December 31, 2016
  
December 31, 2015
Preliminary Regulatory Capital:
                
Common Equity Tier 1 Capital
  
$
287,308
    
$
181,633
  
Tier 1 Capital
  
$
317,308
    
$
211,633
  
Total Capital
  
$
339,055
    
$
246,168
  
 
                
Preliminary Regulatory Capital Ratios:
                
Common Equity Tier 1
    
11.05
%
    
8.23
%
Tier 1 Risk-Based
    
12.21
%
    
9.58
%
Total Risk-Based
    
13.04
%
    
11.15
%
Tier 1 Leverage
    
10.06
%
    
7.64
%
                 
*These measures are considered non-GAAP financial measures. See “GAAP Reconciliation and Use of Non-GAAP financial measures” and the corresponding financial tables below for a reconciliation and discussion of these non-GAAP measures contained in the corresponding earnings release.
  
 
-MORE-
 
Investment Portfolio
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                   
 
2016
  
2015
Securities available for sale (at fair value)
Fourth Quarter
  
Third Quarter
  
Second Quarter
  
First Quarter
  
Fourth Quarter
Debt securities
                  
U.S. government agency securities
$ 
 
985
  
$ 
 
2,501
  
$ 
 
15,510
  
$ 
 
19,181
  
$ 
 
33,808
Mortgage-backed securities - residential
    
443,908
      
433,564
      
425,311
      
472,706
      
522,373
Municipals, tax exempt
    
116,923
      
104,112
      
96,001
      
82,043
      
79,837
Treasury securities
    
11,757
      
4,506
      
4,513
      
4,506
      
4,485
Total debt securities
    
573,573
      
544,683
      
541,335
      
578,436
      
640,503
Equity securities
    
8,610
      
8,674
      
8,972
      
8,941
      
8,884
Total securities available-for-sale
$ 
 
582,183
  
$ 
 
553,357
    $
 
550,307
  
$ 
 
587,377
   $
 
649,387
 
 
-MORE-
Non-GAAP Reconciliation
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                               
   
2016
    
2015
  
Pro forma core net income
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Pre-tax net income
  
$
13,797
    
$
15,979
    
$
16,908
    
$
15,640
    
$
9,652
  
Non-core items:
                                        
Noninterest income
                                        
Gain on sale of securities
    
-
      
416
      
2,591
      
1,400
      
2
  
(Loss) gain on sales or write-downs of foreclosed and other assets
    
(349
)
    
1,653
      
(254
)
    
129
      
(287
)
Noninterest expenses
                                        
One-time equity grants
    
-
      
2,960
      
-
      
-
      
-
  
Variable compensation charge related to cash settled equity awards
    
1,041
      
213
      
-
      
-
      
-
  
Merger and conversion
    
-
      
1,122
      
1,540
      
606
      
2,965
  
(Recovery of) impairment of mortgage servicing rights
    
(3,411
)
    
2,402
      
4,914
      
773
      
194
  
Loss on sale of mortgage servicing rights
    
4,447
      
-
      
-
      
-
      
-
  
Pre tax core net income
  
$
16,223
    
$
20,607
    
$
21,025
    
$
15,490
    
$
13,096
  
Pro forma core income tax expense
    
5,739
      
7,672
      
7,874
      
5,781
      
5,043
  
Pro forma core net income
  
$
10,484
    
$
12,935
    
$
13,151
    
$
9,709
    
$
8,053
  
Weighted average common shares outstanding fully diluted
    
24,500,943
      
18,332,192
      
17,180,000
      
17,180,000
      
17,180,000
  
                                         
Pro forma core diluted earnings per share
                                        
Diluted earning per share
  
$
0.37
    
$
0.07
    
$
0.92
    
$
0.85
    
$
0.53
  
Non-core items:
                                        
Noninterest income
                                        
Gain on sale of securities
    
-
      
0.02
      
0.15
      
0.08
      
0.00
  
(Loss) gain on sales or write-downs of foreclosed and other assets
    
(0.01
)
    
0.09
      
(0.01
)
    
0.01
      
(0.02
)
                                         
Noninterest expenses
                                        
One-time equity grants
    
-
      
0.16
      
-
      
-
      
-
  
Variable compensation charge related to cash settled equity awards
    
0.04
      
0.01
                      
-
  
Merger and conversion
    
-
      
0.06
      
0.09
      
0.04
      
0.17
  
(Recovery of) impairment of mortgage servicing rights
    
(0.14
)
    
0.13
      
0.29
      
0.04
      
0.01
  
Loss on sale of mortgage servicing rights
    
0.18
      
-
                      
-
  
Tax effect
    
(0.04
)
    
0.39
      
(0.39
)
    
(0.28
)
    
(0.27
)
Pro forma core diluted earnings per share
  
$
0.43
    
$
0.71
    
$
0.77
    
$
0.57
    
$
0.47
  
                                         
                                         
                                         
     
2016
      
2015
  
Core efficiency ratio (tax-equivalent basis)
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Total noninterest expense
  
$
47,319
    
$
55,529
    
$
50,595
    
$
41,347
    
$
41,880
  
Less one-time equity grants
    
-
      
2,960
      
-
      
-
      
-
  
Less variable compensation charge related to cash settled equity awards
    
1,041
      
213
      
-
      
-
      
-
  
Less merger and conversion
   expenses
    
-
      
1,122
      
1,540
      
606
      
2,965
  
Less (recovery of) impairment of
   mortgage servicing rights
    
(3,411
)
    
2,402
      
4,914
      
773
      
194
  
Less loss on sale of mortgage servicing rights
    
4,447
      
-
      
-
      
-
      
-
  
Core noninterest expense
  
$
45,242
    
$
48,832
    
$
44,141
    
$
39,968
    
$
38,721
  
Net interest income (tax-equivalent
   basis)
    
29,686
      
28,213
      
29,090
      
26,322
      
25,786
  
Total noninterest income
    
31,332
      
43,962
      
38,356
      
31,035
      
24,109
  
Less gain on sales or write-downs of foreclosed and other assets
    
(349
)
    
1,653
      
(254
)
    
129
      
(287
)
Less gain on sales of securities
    
-
      
416
      
2,591
      
1,400
      
2
  
Core noninterest income
    
31,681
      
41,893
      
36,019
      
29,506
      
24,394
  
Core revenue
  
$
61,367
    
$
70,106
    
$
65,109
    
$
55,828
    
$
50,180
  
Core efficiency ratio (tax-equivalent basis)
    
73.72
%
    
69.65
%
    
67.80
%
    
71.59
%
    
77.16
%
 
 
-MORE-
Non-GAAP Reconciliation
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                               
   
2016
    
2015
  
Banking segment core efficiency ratio (tax equivalent)
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Core noninterest expense
  
$
45,242
    
$
48,832
    
$
44,141
    
$
39,968
    
$
38,721
  
Less Mortgage Banking segment noninterest expense
    
20,463
      
23,744
      
22,451
      
15,740
      
13,477
  
Add (recovery of) impairment of mortgage servicing rights
    
(3,411
)
    
2,402
      
4,914
      
773
      
194
  
Add loss on sale of mortgage servicing rights
    
4,447
      
-
      
-
      
-
      
-
  
Adjusted Banking segment noninterest expense
    
25,815
      
27,490
      
26,604
      
25,001
      
25,438
  
Adjusted core revenue
    
61,367
      
70,106
      
65,109
      
55,828
      
50,180
  
Less Mortgage Banking segment noninterest income
    
21,738
      
27,957
      
22,918
      
18,359
      
14,112
  
Adjusted Banking segment noninterest income
  
$
39,629
    
$
42,149
    
$
42,191
    
$
37,469
    
$
36,068
  
Banking segment core efficiency ratio (tax-equivalent basis)
    
65.14
%
    
65.22
%
    
63.06
%
    
66.72
%
    
70.53
%
                                         
Mortgage Banking segment core efficiency ratio (tax equivalent)
                  
Noninterest expense
  
$
47,319
    
$
55,529
    
$
50,595
    
$
41,347
    
$
41,880
  
Less impairment of
   mortgage servicing rights
    
(3,411
)
    
2,402
      
4,914
      
773
      
194
  
Less loss on sale of mortgage servicing rights
    
4,447
      
-
      
-
      
-
      
-
  
Less Banking segment noninterest expense
    
26,856
      
31,785
      
28,144
      
25,607
      
28,403
  
Adjusted Mortgage Banking segment noninterest expense
  
$
19,427
    
$
21,342
    
$
17,537
    
$
14,967
    
$
13,283
  
Total noninterest income
    
31,332
      
43,962
      
38,356
      
31,035
      
24,109
  
Less Banking segment noninterest income
    
9,594
      
16,005
      
15,438
      
12,676
      
9,997
  
Adjusted Mortgage Banking segment noninterest income
  
$
21,738
    
$
27,957
    
$
22,918
    
$
18,359
    
$
14,112
  
Mortgage Banking segment core efficiency ratio (tax-equivalent basis)
    
89.37
%
    
76.34
%
    
76.52
%
    
81.52
%
    
94.13
%
                                         
                                         
     
2016
      
2015
  
Tangible assets and equity
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Tangible Assets
                                        
Total assets
  
$
3,276,881
    
$
3,187,180
    
$
2,917,958
    
$
2,855,563
    
$
2,899,420
  
Less goodwill
    
46,867
      
46,867
      
46,867
      
46,867
      
46,904
  
Less core deposit intangibles
    
4,563
      
5,090
      
5,616
      
6,143
      
6,695
  
Tangible assets
  
$
3,225,451
    
$
3,135,223
    
$
2,865,475
    
$
2,802,553
    
$
2,845,821
  
Tangible Common Equity
                                        
Total shareholders' equity
  
$
330,498
    
$
329,108
    
$
265,768
    
$
253,236
    
$
236,674
  
Less goodwill
    
46,867
      
46,867
      
46,867
      
46,867
      
46,904
  
Less core deposit intangibles
    
4,563
      
5,090
      
5,616
      
6,143
      
6,695
  
Tangible common equity
  
$
279,068
    
$
277,151
    
$
213,285
    
$
200,226
    
$
183,075
  
Common shares outstanding
    
24,107,660
      
23,975,122
      
17,180,000
      
17,180,000
      
17,180,000
  
Book value per common share
  
$
13.71
    
$
13.73
    
$
15.47
    
$
14.74
    
$
13.78
  
Tangible book value per common
   share
  
$
11.58
    
$
11.56
    
$
12.41
    
$
11.65
    
$
10.66
  
Total shareholders' equity to total assets
    
10.09
%
    
10.33
%
    
9.11
%
    
8.87
%
    
8.16
%
Tangible common equity to tangible assets
    
8.65
%
    
8.84
%
    
7.44
%
    
7.14
%
    
6.43
%
Net income
  
$
9,010
    
$
1,207
    
$
15,775
    
$
14,599
    
$
9,191
  
Return on tangible common equity
    
12.84
%
    
1.73
%
    
29.75
%
    
29.33
%
    
19.92
%
                                         
                                         
     
2016
      
2015
  
Return on average tangible common equity
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Total average shareholders' equity
  
$
318,986
    
$
276,549
    
$
259,790
    
$
246,831
    
$
233,932
  
Less average goodwill
    
46,839
      
46,839
      
46,839
      
46,868
      
46,875
  
Less average core deposit intangibles
    
4,694
      
5,402
      
5,912
      
6,487
      
6,042
  
Average tangible common equity
  
$
267,453
    
$
224,308
    
$
207,039
    
$
193,476
    
$
181,015
  
Net income
  
$
9,010
    
$
1,207
    
$
15,775
    
$
14,599
    
$
9,191
  
Return on average tangible common equity
    
13.40
%
    
2.14
%
    
30.64
%
    
30.35
%
    
20.14
%
                                         
                                         
     
2016
      
2015
  
Pro forma return on average tangible common equity
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Tangible average equity
  
$
267,453
    
$
224,308
    
$
207,039
    
$
193,476
    
$
181,015
  
Pro forma net income
  
$
9,010
    
$
10,033
    
$
10,576
    
$
9,803
    
$
5,935
  
Pro forma return on average tangible common equity
    
13.40
%
    
17.79
%
    
20.55
%
    
20.38
%
    
13.01
%
 
 
-MORE-
Non-GAAP Reconciliation
For the Quarters Ended
(Unaudited)
(In Thousands, Except Share Data)
                               
                               
   
2016
    
2015
  
Pro forma core return on average tangible equity
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Pre-tax pro forma net income
  
$
13,797
    
$
15,979
    
$
16,908
    
$
15,640
    
$
9,652
  
Adjustments:
                                        
Add non-core items
    
2,426
      
4,628
      
4,117
      
(150
)
    
3,444
  
         Less pro forma core income tax expense
    
5,739
      
7,672
      
7,874
      
5,781
      
5,043
  
Pro forma core net income
  
$
10,484
    
$
12,935
    
$
13,151
    
$
9,709
    
$
8,053
  
Pro forma core return on average tangible common equity
    
15.60
%
    
22.94
%
    
25.55
%
    
20.18
%
    
17.65
%
                                         
     
2016
      
2015
  
Pro forma core return on average assets and equity
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
      Net income
  
$
9,010
    
$
1,207
    
$
15,775
    
$
14,599
    
$
9,191
  
      Average assets
    
3,206,398
      
3,015,670
      
2,900,074
      
2,885,447
      
2,835,586
  
      Average equity
    
318,986
      
276,549
      
259,790
      
246,831
      
233,932
  
Return on average assets
    
1.12
%
    
0.16
%
    
2.19
%
    
2.03
%
    
1.29
%
Return on average equity
    
11.24
%
    
1.74
%
    
24.42
%
    
23.79
%
    
15.59
%
      Pro forma core net income
    
10,484
      
12,935
      
13,151
      
9,709
      
8,053
  
Pro forma core return on average assets
    
1.30
%
    
1.71
%
    
1.82
%
    
1.35
%
    
1.13
%
Pro forma core return on average equity
    
13.08
%
    
18.61
%
    
20.36
%
    
15.82
%
    
13.66
%
                                         
                                         
     
2016
      
2015
  
Pro forma core total revenue
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Net interest income
  
$
29,032
    
$
27,617
    
$
28,358
    
$
25,943
    
$
25,296
  
Noninterest income
    
31,332
      
43,962
      
38,356
      
31,035
      
24,109
  
Less adjustments:
                                        
    Gain on sale of securities
    
-
      
416
      
2,591
      
1,400
      
2
  
    (Loss) gain on sales or write-downs of foreclosed and other assets
    
(349
)
    
1,653
      
(254
)
    
129
      
(287
)
Pro forma core total revenue
  
$
60,713
    
$
69,510
    
$
64,377
    
$
55,449
    
$
49,690
  
                                         
                                         
     
2016
      
2015
  
Core deposits
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
Total deposits
  
$
2,671,562
    
$
2,640,072
    
$
2,514,297
    
$
2,469,133
    
$
2,438,474
  
Less jumbo time deposits
    
60,124
      
64,275
      
58,999
      
52,044
      
52,320
  
Core deposits
  
$
2,611,438
    
$
2,575,797
    
$
2,455,298
    
$
2,417,089
    
$
2,386,154