ACCESS NATIONAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - ACCESS NATIONAL CORP	a6-30x17earningsrelease.htm

Exhibit 99.1

ACCESS NATIONAL ANNOUNCES SECOND QUARTER 2017 EARNINGS

RESTON, VA. – Access National Corporation (NASDAQ: ANCX) (the “Corporation” or “Access”), parent company for Access National Bank (the “Bank”) and Middleburg Investment Group, reported second quarter 2017 net income of $3.85 million, or $0.19 per common share. Excluding merger related one-time charges, net income was $7.46 million or $0.37 per diluted share. This represents the Corporation’s 68th consecutive quarterly profit over its 70 quarter history. Consistent with management’s stated objective of a 40% to 50% dividend payout ratio against core earnings, the Board of Directors declared a dividend of $0.15 per share for common shareholders of record as of August 14, 2017 and payable on August 25, 2017.

Highlights


•	Strategic merger with Middleburg Financial Corporation (NASDAQ: MBRG) closed on schedule April 1, 2017 and data/office integrations remain on schedule for August 4, 2017;


•	Reported second quarter earnings of $3.85 million or $0.19 per diluted share. Excluding $5.2 million in pre-tax merger related costs ($3.6 million after-tax), earnings were $7.46 million or $0.37 per diluted share;


•	Tangible book value¹per common share was $11.32 at June 30, 2017, an increase of $0.09 from the prior period after considering merger costs;


•	Loans held for investment were $1.93 billion at June 30, 2017 compared to $943 million at June 30, 2016, a year-over-year growth of 204.5%. Exclusive of purchased loans, linked quarter growth was $38 million or 7.8% annualized; and


•	Non-interest bearing demand deposits of $660 million were 30.2% of total deposits at June 30, 2017 compared to $392 million at June 30, 2016, a year-over-year growth of 168.4%.

The transformative combination of Access National with Middleburg Financial was consummated on April 1, 2017 as announced October 24, 2016. “While most of the expected overhead efficiencies have yet to be realized, management’s excitement and confidence over the financial benefits of this combination strengthen daily. The evidence of our confidence is best illustrated by the organic growth in the loan portfolio and the positive quality migration of core deposits in spite of significant management distraction towards integration and conversion activities” said Michael Clarke, President and Chief Executive Officer of Access. He continued, “We remain committed to delivering the base line economic assumptions behind the merger and are confident that future financial results will fortify and advance shareholder interests.”

Second quarter 2017 pre-tax earnings were $5.9 million, up $1.8 million from first quarter 2017, and included pre-tax merger related costs of $5.2 million. The commercial banking segment’s net interest income grew $12.5 million when compared to the first quarter of 2017 and was offset by an increase in salaries and employee benefits of $3.8 million. The mortgage banking segment has been relatively unaffected by the merger, contributing pre-tax earnings of $1.2 million or 20% of the consolidated total. The wealth services segment saw a $1.1 million increase in revenue which was offset by an increase in operating expenses of $849 thousand when comparing the second quarter of 2017 to the first quarter of 2017. The earnings contributions from wealth services will be developing over the next few quarters as the unprofitable operations of the legacy Access segment are integrated with and suppress the profitable operations of Middleburg Investment Group. Departure of underperforming personnel and loss of select underpriced accounts during the second quarter transition will result in reduced overhead of a greater magnitude than loss of revenue contribution from associated lost business. The leadership of Middleburg Investment Group and the expanded capabilities resulting from the merger are enhancing the client value proposition in a way that will produce consistent and growing fee income.

The net interest margin increased to 3.91% from 3.46% when comparing second quarter to first quarter 2017. Second quarter net interest margin exclusive of the $1.9 million credit mark accretion for the acquired loan portfolio and the $34 thousand in liability discount amortization was 3.61% for the three months ended June 30, 2017.

Total assets were $2.8 billion at June 30, 2017, up from $1.4 billion at March 31, 2017. Organic growth in loans held for investment excluding the growth attributed to the acquired loan portfolio was $38.0 million on a linked quarter basis due mainly to growth in commercial real estate of $29.7 million and commercial of $10.3 million. The organic growth from the linked period reflects intended migration as the residential and consumer loan categories decreased while commercial, commercial real estate and construction categories grew.

Total deposits at June 30, 2017 were $2.2 billion, an increase of $1.0 billion when compared to March 31, 2017. At June 30, 2017, non-interest bearing deposits, which represent 30.2% of the deposit portfolio were $660.5 million, an increase of $283.8 million from the linked quarter. While non-interest bearing demand deposits remain the largest and most attractive source of funding for the Corporation, the combination of legacy Middleburg’s significant low cost interest-bearing demand deposits and legacy Access’ non-interest bearing demand deposits accounted for $1.1 billion or 51.0% of total deposits at June 30, 2017. Interest-bearing deposits increased to $1.5 billion at June 30, 2017, an increase of $746.4 million from the prior quarter. Brokered deposits as a percentage of the deposit portfolio decreased quarter over quarter, from 9.5% of the portfolio at March 31, 2017 to 4.6% at June 30, 2017.

¹Non-GAAP financial information.

Page 1

Exclusive of purchased deposits, wholesale deposits declined $52.8 million on a linked quarter basis. The go-forward strategy places a high priority on the maintenance and expansion of core deposits, particularly high value demand deposit relationships.

As a result of the strategic merger, the loan to deposit ratio dropped to 88.2% at June 30, 2017 from 92.7% in the prior period. Appropriately leveraging the loan to deposit ratio in future periods represents an earnings growth opportunity.

Non-performing assets (“NPAs”) increased to $9.0 million at June 30, 2017 from $5.2 million at March 31, 2017, representing 0.32% and 0.37% of total assets, respectively. Included in the NPAs total is $2.4 million in other real estate owned. The allowance for loan loss was $14.7 million and $13.7 million at June 30, 2017 and March 31, 2017, respectively, and represented 0.76% of total loans held for investment at June 30, 2017 and 1.28% of total loans held for investment at March 31, 2017. The remaining credit and fair value marks on the loans acquired in the merger totaled $16.0 million at June 30, 2017.

Tangible book value² per common share increased from $11.23 at March 31, 2017 to $11.32 at June 30, 2017. The tangible common equity ratio for Access National Corporation and its subsidiary bank was 8.97% at June 30, 2017, within the Corporation’s target range of 8.00% to 10.50%.

About Access National Corporation

Access National Corporation is the parent company of Access National Bank and Middleburg Investment Group serving Northern and Central Virginia. Additional information is available on our website at www.AccessNationalBank.com. Shares of Access National Corporation are traded on the NASDAQ Global Market under the symbol "ANCX".

CONTACT: Access National Corporation, Michael Clarke, 703-871-2100

Forward-Looking Statements

The information presented herein contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding expectations or predictions of future financial or business performance or conditions. Forward-looking statements may be identified by words such as "may," "could," "will," "expect," "believe," "anticipate," "forecast," "intend," "plan," "prospects," "estimate," "potential," or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements in this report may include, but are not limited to, statements about projected impacts of and financial results generated by the merger of Access and Middleburg Financial Corporation (“Middleburg”). Forward-looking statements speak only as of the date they are made and Access assumes no duty to update forward-looking statements.

In addition to factors previously disclosed in Access's reports filed with the SEC and those identified elsewhere in this release, the following factors, among others, could cause actual results to differ materially from the results expressed in or implied by forward-looking statements and historical performance: changes in asset quality and credit risk; changes in interest rates and capital markets; the introduction, timing and success of business initiatives; competitive conditions; and the inability to recognize cost savings or revenues or to implement integration plans associated with the merger of Access and Middleburg.

²Non-GAAP financial information.

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ACCESS NATIONAL CORPORATION
Consolidated Balance Sheet
(In thousands, except for share and per share data)

	(Unaudited)						(Unaudited)
	June 30, 2017			December 31, 2016			June 30, 2016
ASSETS
Cash and due from banks	$	19,772		$	9,186		$	14,994
Interest-bearing balances and federal funds sold	46,889			81,873			66,541
Investment securities:
Available-for-sale, at fair value	402,557			194,090			173,558
Held-to-maturity, at amortized cost (fair value of $16,449, $9,293 and $9,487, respectively)	15,786			9,200			9,228
Total investment securities	418,343			203,290			182,786
Restricted stock, at amortized cost	8,742			10,092			7,159
Loans held for sale, at fair value	34,954			35,676			55,116
Loans held for investment, net of allowance for loan losses of $14,671, $16,008 and $13,834, respectively	1,913,674			1,033,690			928,895
Premises, equipment and land, net	29,363			7,084			6,822
Goodwill and intangible assets	184,194			1,833			1,857
Other assets	101,059			47,984			40,701
TOTAL ASSETS	$	2,756,990		$	1,430,708		$	1,304,871

LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	660,481		$	362,036		$	392,269
Interest-bearing demand deposits	454,675			126,189			123,638
Savings and money market deposits	611,708			314,396			242,026
Time deposits	460,342			251,706			286,612
Total deposits	2,187,206			1,054,327			1,044,545
Short-term borrowings	55,429			186,009			56,763
Long-term borrowings	80,000			60,000			75,000
Trust preferred debentures	3,843			—			—
Other liabilities and accrued expenses	15,644			9,842			10,177
TOTAL LIABILITIES	2,342,122			1,310,178			1,186,485
SHAREHOLDERS' EQUITY
Common stock ($0.835 par value; 60,000,000 shares authorized; 20,378,994, 10,636,242, and 10,583,594 issued and outstanding, respectively)	17,016			8,881			8,837
Additional paid in capital	303,997			21,779			20,625
Retained earnings	94,664			91,439			87,188
Accumulated other comprehensive income (loss), net	(809		)	(1,569		)	1,736
TOTAL SHAREHOLDERS' EQUITY	414,868			120,530			118,386
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,756,990		$	1,430,708		$	1,304,871

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ACCESS NATIONAL CORPORATION
Consolidated Statement of Operations
(In thousands, except for share and per share data)
	(Unaudited)
	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2017		2016		2017		2016
INTEREST INCOME
Interest and fees on loans	$	23,746	$	11,354	$	35,945	$	22,230
Interest on federal funds sold and bank balances	221		96		352		166
Interest and dividends on securities	3,172		886		4,396		1,921
Total interest income	27,139		12,336		40,693		24,317
INTEREST EXPENSE
Interest on deposits	2,419		1,274		3,921		2,425
Interest on other borrowings	545		301		907		581
Total interest expense	2,964		1,575		4,828		3,006
NET INTEREST INCOME	24,175		10,761		35,865		21,311
Provision for loan losses	900		120		2,300		120
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	23,275		10,641		33,565		21,191
NONINTEREST INCOME
Service charges and fees	669		239		949		499
Gain on sale of loans	6,046		7,273		9,391		11,103
Other income	2,170		1,661		4,548		4,390
Total noninterest income	8,885		9,173		14,888		15,992
NONINTEREST EXPENSE
Salaries and benefits	12,660		8,407		20,700		16,075
Occupancy and equipment	1,981		749		2,801		1,510
Other operating expense	11,585		3,147		14,920		5,847
Total noninterest expense	26,226		12,303		38,421		23,432
Income before income tax	5,934		7,511		10,032		13,751
Income tax expense	2,088		2,633		3,579		4,778
NET INCOME	$	3,846	$	4,878	$	6,453	$	8,973
Earnings per common share:
Basic	$	0.19	$	0.46	$	0.42	$	0.85
Diluted	$	0.19	$	0.46	$	0.41	$	0.84
Average outstanding shares:
Basic	20,335,070		10,576,516		15,529,934		10,564,833
Diluted	20,453,991		10,639,167		15,655,613		10,622,763

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ACCESS NATIONAL CORPORATION
Performance and Capital Ratios
(Unaudited, Dollars in thousands, except for per share and per share data)

	Three Months Ended						Six Months Ended						Twelve Months Ended
	June 30,			March 31,			June 30,			June 30,			December 31,
	2017			2017			2017			2016			2016
Return on average assets (annualized)	0.55		%	0.74		%	0.62		%	1.45		%	1.27		%
Return on average equity (annualized)	3.73		%	8.57		%	4.83		%	15.89		%	14.11		%
Net interest margin	3.91		%	3.46		%	3.75		%	3.56		%	3.52		%
Efficiency ratio - Bank only	59.23		%	53.26		%	57.30		%	50.64		%	49.59		%
Total average equity to earning assets	16.68		%	8.99		%	13.95		%	9.43		%	9.36		%
Tangible common equity ratio¹	8.97		%	8.65		%	8.97		%	8.94		%	8.31		%

Averages
Assets	$	2,789,088		$	1,401,652		$	2,096,372		$	1,238,662		$	1,288,582
Loans held for investment	1,896,824			1,052,167			1,474,551			910,300			939,837
Loans held for sale	28,254			24,461			26,368			39,982			47,060
Interest-bearing deposits and federal funds sold	121,572			64,628			94,174			68,435			67,457
Investment securities	422,792			209,533			316,345			179,600			189,585
Earning assets	2,471,036			1,353,360			1,913,515			1,197,547			1,242,923
Interest-bearing deposits	1,523,997			761,075			1,143,566			634,692			662,271
Total deposits	2,163,567			1,096,309			1,631,078			962,973			1,021,624
Repurchase agreements and federal funds purchased	53,949			28,369			41,148			15,712			16,270
FHLB short-term borrowings	57,824			86,200			71,934			68,791			56,522
FHLB long-term borrowings	79,892			59,556			69,698			69,478			68,525
Trust preferred debt	3,824			—			1,919			—			—
Equity	412,146			121,724			266,951			112,908			116,296

Allowance for loan losses to loans held for investment	0.76		%	1.28		%	0.76		%	1.47		%	1.53		%
Total NPA	$	8,954		$	5,244		$	8,954		$	1,866		$	6,922
NPA to total assets	0.32		%	0.37		%	0.32		%	0.14		%	0.48		%

Mortgage loan originations and brokered loans	$	116,958		$	94,500		$	211,458		$	260,644		$	544,866
Gain on sale of mortgage loans, net hedging activity	5,421			3,416			8,837			9,814			23,835
Allowance for losses on mortgage loans sold	1,029			1,029			1,029			1,029			1,029

Wealth Management segment - assets under management	$	1,927,629		$	676,865		$	1,927,629		$	625,000		$	667,300

Book value per common share	$	20.36		$	11.40		$	20.36		$	11.19		$	11.33

Tangible book value per common share ¹	$	11.32		$	11.23		$	11.32		$	11.01		$	11.16

¹Non-GAAP financial information.

Page 5

Composition of Loan Portfolio



	June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
(Dollars in thousands)	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
Commercial real estate Owner occupied	$	401,853	20.84	%	$	262,431	23.87	%	$	250,440	23.87	%	$	238,224	24.65	%	$	235,735	25.01	%
Commercial real estate Non-owner occupied	377,037		19.55		205,452		17.59		184,688		17.59		174,342		18.04		153,206		16.25
Residential real estate	525,649		27.26		212,007		19.47		204,413		19.47		202,605		20.96		208,311		22.10
Commercial	476,055		24.69		294,451		29.67		311,486		29.67		264,794		27.40		257,139		27.28
Real estate construction	124,186		6.44		91,614		8.75		91,822		8.75		79,621		8.24		79,200		8.39
Consumer	23,565		1.22		6,836		0.65		6,849		0.65		6,959		0.71		9,138		0.97
Total loans	$	1,928,345	100.00	%	$	1,072,791	100.00	%	$	1,049,698	100.00	%	$	966,545	100.00	%	$	942,729	100.00	%
Less allowance for loan losses	14,671				13,727				16,008				14,696				13,834
Total loans	$	1,913,674			$	1,059,064			$	1,033,690			$	951,849			$	928,895

Composition of Deposits



	June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
(Dollars in thousands)	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
Demand deposits	$	660,481	30.20	%	$	376,674	32.56	%	$	362,036	34.34	%	$	409,558	36.73	%	$	392,269	37.55	%
Interest-bearing demand deposits	454,675		20.79		141,981		12.27		126,189		11.97		124,856		11.20		123,638		11.84
Savings and money market	562,581		25.72		284,182		24.56		270,310		25.64		265,308		23.79		206,566		19.78
CDARS time deposits	39,746		1.82		41,369		3.58		34,290		3.25		36,948		3.31		53,212		5.09
CDARS/ICS non-maturity deposits	44,009		2.01		42,960		3.71		40,925		3.88		46,156		4.14		35,247		3.37
Brokered deposits	101,419		4.64		110,254		9.53		57,389		5.44		68,483		6.14		69,139		6.62
Time deposits	324,295		14.82		159,570		13.79		163,188		15.48		163,744		14.69		164,474		15.75
Total deposits	$	2,187,206	100.00	%	$	1,156,990	100.00	%	$	1,054,327	100.00	%	$	1,115,053	100.00	%	$	1,044,545	100.00	%

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ACCESS NATIONAL CORPORATION Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities (Unaudited)
	Three months ended June 30,
	2017							2016
	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
	(Dollars in thousands)
Assets:
Interest-earning assets:
Securities	$	424,387		$	3,172	2.99	%	$	181,327		$	886	1.95	%
Loans held for sale	28,254			297		4.20	%	45,357			437		3.85	%
Loans ⁽¹⁾	1,896,824			23,449		4.94	%	915,218			10,917		4.77	%
Interest-bearing balances and federal funds sold	121,572			221		0.73	%	84,007			96		0.46	%
Total interest-earning assets	2,471,037			27,139		4.39	%	1,225,909			12,336		4.03	%
Noninterest-earning assets:
Cash and due from banks	17,131							12,513
Premises, equipment and land	29,459							6,959
Other assets	285,518							36,775
Less: allowance for loan losses	(14,057		)					(13,652		)
Total noninterest-earning assets	318,051							42,595
Total assets	$	2,789,088						$	1,268,504
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits	$	472,065		$	345	0.29	%	$	133,147		$	126	0.38	%
Money market deposit accounts	367,590			478		0.52	%	190,324			166		0.35	%
Savings accounts	191,409			212		0.44	%	32,520			43		0.53	%
Time deposits	492,932			1,384		1.12	%	301,372			939		1.25	%
Total interest-bearing deposits	1,523,996			2,419		0.63	%	657,363			1,274		0.78	%
Borrowings:
Securities sold under agreements to repurchase and federal funds purchased	53,949			26		0.19	%	13,981			4		0.11	%
FHLB short-term borrowings and subordinated debt	61,649			332		2.15	%	51,154			88		0.69	%
FHLB long-term borrowings	79,892			188		0.94	%	74,341			209		1.12	%
Total borrowings	195,490			546		1.12	%	139,476			301		0.86	%
Total interest-bearing liabilities	1,719,486			2,965		0.69	%	796,839			1,575		0.79	%
Noninterest bearing liabilities:
Demand deposits	639,570							348,056
Other liabilities	17,886							8,861
Total liabilities	2,376,942							1,153,756
Shareholders' equity	412,146							114,748
Total liabilities and shareholders' equity	$	2,789,088						$	1,268,504

Interest rate spread ⁽²⁾						3.70	%						3.23	%
Net interest margin ⁽³⁾				$	24,174	3.91	%				$	10,761	3.51	%


(1)	Loans placed on nonaccrual status are included in loan balances.


(2)	Interest spread is the average yield earned on earning assets less the average rate incurred on interest-bearing liabilities.


(3)	Net interest margin is net interest income expressed as a percentage of average earning assets.

Page 7



ACCESS NATIONAL CORPORATION Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities (Unaudited)
	Six months ended June 30,
	2017							2016
	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
	(Dollars in thousands)
Assets:
Interest-earning assets:
Securities	$	318,422		$	4,396	2.76	%	$	179,600		$	1,921	2.14	%
Loans held for sale	26,368			547		4.15	%	39,982			781		3.91	%
Loans ⁽¹⁾	1,474,551			35,398		4.80	%	$	910,300		21,449		4.71	%
Interest-bearing balances and federal funds sold	94,174			352		0.75	%	$	68,435		166		0.49	%
Total interest-earning assets	$	1,913,515		$	40,693	4.25	%	$	1,198,317		$	24,317	4.06	%
Noninterest-earning assets:
Cash and due from banks	14,416							$	12,110
Premises, equipment and land	18,280							6,843
Other assets	164,945							35,008
Less: allowance for loan losses	(14,784		)					(13,616		)
Total noninterest-earning assets	182,857							40,345
Total assets	$	2,096,372						$	1,238,662
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits	307,685			498		0.32	%	$	129,064		$	233	0.36	%
Money market deposit accounts	313,339			823		0.53	%	166,273			265		0.32	%
Savings accounts	126,103			302		0.48	%	33,609			90		0.54	%
Time deposits	396,439			2,298		1.16	%	305,746			1,837		1.20	%
Total interest-bearing deposits	1,143,566			3,921		0.69	%	634,692			2,425		0.76	%
Borrowings:
Securities sold under agreements to repurchase and federal funds purchased	41,148			42		0.20	%	15,712			7		0.09	%
FHLB short-term borrowings and subordinated debt	73,853			498		1.35	%	68,791			211		0.61	%
FHLB long-term borrowings	69,698			368		1.06	%	69,478			363		1.04	%
Total borrowings	$	184,699		$	908	0.98	%	153,981			581		0.75	%
Total interest-bearing liabilities	1,328,265			4,829		0.73	%	788,673			3,006		0.76	%
Noninterest bearing liabilities:
Demand deposits	487,511							328,281
Other liabilities	13,645							8,800
Total liabilities	1,829,421							1,125,754
Shareholders' equity	266,951							112,908
Total liabilities and shareholders' equity	$	2,096,372						$	1,238,662

Interest rate spread ⁽²⁾						3.53	%						3.30	%
Net interest margin ⁽³⁾				$	35,864	3.75	%				$	21,311	3.56	%


(1)	Loans placed on nonaccrual status are included in loan balances.


(2)	Interest spread is the average yield earned on earning assets less the average rate incurred on interest-bearing liabilities.


(3)	Net interest margin is net interest income expressed as a percentage of average earning assets.

Page 8

Segment Reporting



	Three Months Ended June 30, 2017
(Dollars in thousands)	Commercial Banking		Mortgage Banking			Trust & Wealth Management		Other			Eliminations			Consolidated Totals
Revenues:
Interest income	$	26,917	$	297		$	3	$	6		$	(84	)	$	27,139
Gain on sale of loans	—		6,046			—		—			—			6,046
Other revenues	1,703		(692		)	1,824		328			(323		)	2,840
Total revenues	28,620		5,651			1,827		334			(407		)	36,025
Expenses:
Interest expense	2,854		16			—		179			(84		)	2,965
Salaries and employee benefits	8,240		3,193			1,227		—			—			12,660
Other expenses	7,922		1,256			452		5,160			(323		)	14,467
Total operating expenses	19,016		4,465			1,679		5,339			(407		)	30,092
Income (loss) before income taxes	$	9,604	$	1,186		$	148	$	(5,005	)	$	—		$	5,933

Total assets	$	2,685,238	$	37,923		$	41,437	$	418,877		$	(426,485	)	$	2,756,990



	Three Months Ended June 30, 2016
(Dollars in thousands)	Commercial Banking		Mortgage Banking			Wealth Management			Other			Eliminations			Consolidated Totals
Revenues:
Interest income	$	12,092	$	437		$	—		$	6		$	(199	)	$	12,336
Gain on sale of loans	—		7,273			—			—			—			7,273
Other revenues	1,290		(134		)	718			342			(316		)	1,900
Total revenues	13,382		7,576			718			348			(515		)	21,509
Expenses:
Interest expense	1,580		127			—			67			(199		)	1,575
Salaries and employee benefits	4,165		3,714			528			—			—			8,407
Other expenses	1,867		1,567			259			639			(316		)	4,016
Total operating expenses	7,612		5,408			787			706			(515		)	13,998
Income (loss) before income taxes	$	5,770	$	2,168		$	(69	)	$	(358	)	$	—		$	7,511

Total assets	$	1,245,441	$	60,831		$	2,861		$	17,772		$	(22,034	)	$	1,304,871

Page 9



	Six Months Ended June 30, 2017
(Dollars in thousands)	Commercial Banking		Mortgage Banking		Trust & Wealth Management		Other			Eliminations			Consolidated Totals
Revenues:
Interest income	$	40,311	$	547	$	3	$	12		$	(180	)	$	40,693
Gain on sale of loans	—		9,391		—		—			—			9,391
Other revenues	2,468		434		2,578		664			(646		)	5,498
Total revenues	42,779		10,372		2,581		676			(826		)	55,582
Expenses:
Interest expense	4,724		43		—		242			(180		)	4,829
Salaries and employee benefits	12,658		6,224		1,818		—			—			20,700
Other expenses	11,449		2,097		691		6,431			(646		)	20,022
Total operating expenses	28,831		8,364		2,509		6,673			(826		)	45,551
Income (loss) before income taxes	$	13,948	$	2,008	$	72	$	(5,997	)	$	—		$	10,031

Total assets	$	2,685,238	$	37,923	$	41,437	$	418,877		$	(426,485	)	$	2,756,990



	Six Months Ended June 30, 2016
(Dollars in thousands)	Commercial Banking		Mortgage Banking		Wealth Management			Other			Eliminations			Consolidated Totals
Revenues:
Interest income	$	23,848	$	781	$	—		$	10		$	(322	)	$	24,317
Gain on sale of loans	—		11,103		—			—			—			11,103
Other revenues	2,226		1,113		1,496			689			(635		)	4,889
Total revenues	26,074		12,997		1,496			699			(957		)	40,309
Expenses:
Interest expense	3,016		178		—			134			(322		)	3,006
Salaries and employee benefits	8,088		6,899		1,088			—			—			16,075
Other expenses	3,707		2,636		550			1,219			(635		)	7,477
Total operating expenses	14,811		9,713		1,638			1,353			(957		)	26,558
Income (loss) before income taxes	$	11,263	$	3,284	$	(142	)	$	(654	)	$	—		$	13,751

Total assets	$	1,245,441	$	60,831	$	2,861		$	17,772		$	(22,034	)	$	1,304,871

Page 10

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