Attached files
| file | filename |
|---|---|
| EX-99.2 - CAROLINA FINANCIAL CORP | e17461_ex99-2.htm |
| 8-K - CAROLINA FINANCIAL CORP | e17461_caro-8k.htm |
Exhibit 99.1
Carolina Financial Corporation Reports Results for Third Quarter of 2017
NEWS RELEASE – For Release October 19, 2017, 4:00PM
For More Information, Contact:
William A. Gehman III, EVP and CFO, 843.723.7700
Charleston, S.C. October 19, 2017 - Carolina Financial Corporation (the “Company”) (NASDAQ: CARO) today announced financial results for the third quarter of 2017.
Financial highlights at and for the three months ended September 30, 2017, include:
| · | Net income for the third quarter 2017 increased 34.5% to $8.0 million, or $0.49 per diluted share, from $5.9 million, or $0.47 per diluted share for the third quarter of 2016. Included in earnings are pretax merger-related expenses of $0.3 million for the third quarter of 2017. There were no merger-related expenses in the third quarter of 2016. |
| · | Operating earnings for the third quarter of 2017, which exclude certain non-operating income and expenses, increased 34.3% to $7.9 million, or $0.49 per diluted share, from $5.9 million, or $0.47 per diluted share, from the third quarter of 2016. |
| · | Performance ratios Q3 2017 compared to Q3 2016: |
| o | Return on average assets was 1.43% compared to 1.46%. |
| o | Operating return on average assets was 1.42% compared to 1.45%. |
| o | Return on average tangible equity was 13.24% compared to 15.93%. |
| o | Operating return on average tangible equity was 13.08% compared to 15.76%. |
| o | Average stockholders’ equity to average assets increased to 12.85% compared to 9.67%. |
| · | Loans receivable, excluding Greer loans acquired in March 2017, grew $111.5 million, or at an annualized rate of 12.6%, since December 31, 2016. |
| · | Nonperforming assets to total assets were 0.29% at September 30, 2017 compared to 0.40% at December 31, 2016. |
| · | Total deposits, excluding Greer deposits acquired in March 2017, increased $138.3 million since December 31, 2016. Core deposits, excluding Greer core deposits acquired, increased $78.0 million since December 31, 2016. |
“We continue to see the impact of solid organic growth and prior acquisitions on earnings. Overall operating results for the third quarter of 2017 continued to improve with an increase in net income of 34.5% compared to the third quarter of 2016. In addition, we look forward to completion of the First South Bancorp, Inc. by the end of the fourth quarter,” stated Jerry Rexroad, Chief Executive Officer.
Financial Results
Carolina Financial Corporation
| n | The Company reported an increase in net income for the three months ended September 30, 2017 to $8.0 million, or $0.49 per diluted share, as compared to $5.9 million, or $0.47 per diluted share, for the three months ended September 30, 2016. Included in net income for the three months ended September 30, 2017 were pretax merger-related expenses of $0.3 million. The Company reported increased net income for the nine months ended September 30, 2017 to $22.2 million, or $1.47 per diluted share, as compared to $12.4 million, or $1.02 per diluted share, for the nine months ended September 30, 2016. Included in net income for the nine months ended September 30, 2017 and 2016 were pretax merger-related expenses of $1.9 million and $3.0 million, respectively. |
| n | Operating earnings for the third quarter of 2017, which excludes certain non-operating income and expenses, increased 34.3% to $7.9 million, or $0.49 per diluted share, from $5.9 million, or $0.47 per diluted share, from the third quarter of 2016. Operating earnings for the nine months ended September 30, 2017, which excludes certain non-operating income and expenses, increased 57.75% to $22.8 million, or $1.50 per diluted share, from $14.5 million, or $1.18 per diluted share, from the same period of 2016. |
| n | The Company’s net interest margin-tax equivalent increased to 3.94% for the third quarter of 2017 compared to 3.75% for the third quarter of 2016. |
| n | The Company reported book value per common share of $18.07 and $13.23 as of September 30, 2017 and December 31, 2016, respectively. Tangible book value per common share was $15.27 and $12.59 as of September 30, 2017 and December 31, 2016, respectively. |
| n | At September 30, 2017, the Company’s regulatory capital ratios exceeded the minimum levels currently required. Stockholders’ equity totaled $290.2 million as of September 30, 2017 compared to $163.2 million at December 31, 2016. Tangible equity to tangible assets at September 30, 2017 was 11.09% compared to 9.3% at December 31, 2016. |
Community Banking
| n | Community banking segment net income increased 65.6% to $7.8 million for the three months ended September 30, 2017 compared to $4.7 million for the three months ended September 30, 2016. Included in net income for the three months ended September 30, 2017 were pretax merger-related expenses of $0.3 million. The community banking segment net income increased 101.7% to $20.8 million for the nine months ended September 30, 2017 compared to $10.3 million for the nine months ended September 30, 2016. Included in net income for the nine months ended September 30, 2017 and 2016 were pretax merger-related expenses of $1.9 million and $3.0 million, respectively. |
| n | Community banking segment operating earnings increased 65.7% to $7.7 million for the three months ended September 30, 2017 compared to $4.7 million for the three months ended September 30, 2016. Included in earnings for the three months ended September 30, 2017 were pretax merger-related expenses of $0.3 million. The community banking segment operating earnings increased 80.7% to $22.2 million for the nine months ended September 30, 2017 compared to $12.3 million for the nine months ended September 30, 2016. Included in earnings for the nine months ended September 30, 2017 and 2016 were pretax merger-related expenses of $1.9 million and $3.0 million, respectively. |
| n | No provision for loan loss was recorded during the three months ended September 30, 2017 or 2016. This was primarily due to continued excellent asset quality, historical loss experience, and the risk characteristics of our loan portfolio. |
| n | Non-performing assets were 0.29% and 0.40% of total assets at September 30, 2017 and December 31, 2016, respectively. |
| n | Loans receivable, gross increased to $1.5 billion at September 30, 2017 compared to $1.2 billion at December 31, 2016. |
| n | The number of checking accounts increased at an annualized rate of 8.9%, excluding Greer checking accounts acquired, since December 31, 2016. Total deposits, excluding acquired deposits from the Greer acquisition, increased $138.3 million since December 31, 2016. As of September 30, 2017 and December 31, 2016, core deposits, defined as checking, savings and money market, comprised approximately 63.8% and 60.6%, respectively, of total deposits. |
Wholesale Mortgage Banking
| n | Net income for the wholesale mortgage banking segment was $0.4 million for the three months ended September 30, 2017 compared to $1.4 million for the three months ended September 30, 2016. Net income was $2.3 million for the nine months ended September 30, 2017 compared to $2.7 million for the nine months ended September 30, 2016. |
| n | Net margin was 1.44% for the three months ended September 30, 2017 compared to 1.94% for the three months ended September 30, 2016. Originations for the three months ended September 30, 2017 and 2016 were $217.0 million and $253.5 million, respectively. Net margin was 1.65% for the nine months ended September 30, 2017 compared to 1.76% for the nine months ended September 30, 2016. Originations for the nine months ended September 30, 2017 and 2016 were $611.6 million and $645.4 million, respectively. |
| n | Net interest income for the wholesale mortgage banking segment was $0.4 million for the three months ended September 30, 2017 compared to $0.4 million for the three months ended September 30, 2016. Net interest income for the wholesale mortgage banking segment was $1.2 million for the nine months ended September 30, 2017 compared to $1.1 million for the nine months ended September 30, 2016. |
| n | Mortgage loan servicing income, net of amortization of mortgage servicing rights and subservicing expense, for the wholesale mortgage banking segment was $0.4 million and $0.4 million for the three months ended September 30, 2017 and September 30, 2016, respectively. Mortgage loan servicing income, net of amortization of mortgage servicing rights and subservicing expense, for the wholesale mortgage banking segment was $1.3 million and $1.2 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. At September 30, 2017, loans serviced for third parties totaled $2.5 billion. |
Dividend Declared
On October 18, 2017 the Company declared a $0.05 dividend per common share, payable on January 5, 2018, to stockholders of record on December 14, 2017.
Conference Call
A conference call will be held at 11:00 a.m., Eastern Time on October 20, 2017. The conference call can be accessed by dialing (866) 464-9448 or (213) 660-0874 and requesting the Carolina Financial Corporation earnings call. The conference ID number is 99743248. Listeners should dial in 10 minutes prior to the start of the call. The live webcast and presentation slides will be available on www.haveanicebank.com under Investor Relations, “Investor Presentations.”
A replay of the webcast will be available on www.haveanicebank.com under Investor Relations, “Investor Presentations” approximately three hours after the call and can be accessed by dialing (855) 859-2056 or (404) 537-3406 and requesting conference number 99743248.
About Carolina Financial Corporation
Carolina Financial Corporation (NASDAQ: CARO) is the holding company of CresCom Bank, which also owns and operates Atlanta-based Crescent Mortgage Company. As of September 30, 2017, Carolina Financial Corporation had approximately $2.3 billion in total assets and Crescent Mortgage Company was licensed to originate loans in 48 states partnering with community banks, credit unions and mortgage brokers. On June 11, 2016, Carolina Financial completed its acquisition of Congaree Bancshares Inc. On January 5, 2017, the Company closed a public offering of approximately 1.8 million shares of its common stock with net proceeds of approximately $47.7 million, net of related expenses. On March 18, 2017, Carolina Financial completed its acquisition of Greer Bancshares Incorporated. On June 9, 2017, Carolina Financial Corporation announced the execution of an Agreement and Plan of Merger and Reorganization by and between the Company and First South Bancorp, Inc. (“First South”), pursuant to which, subject to the terms and conditions set forth therein, First South will merge with and into the Company, with the Company as the surviving corporation.
Addendum to News Release – Use of Certain Non-GAAP Financial Measures and Forward-Looking Statements
This news release contains financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). Such statements should be read along with the accompanying tables, which provide a reconciliation of non-GAAP measures to GAAP measures. This news release and the accompanying tables discuss financial measures, including but not limited to, core deposits, tangible book value, operating earnings and net income related to segments of the Company, which are non-GAAP measures. We believe that such non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare the Company’s operating results from period to period in a meaningful manner. Non-GAAP measures should not be considered as an alternative to any measure of performance as promulgated under GAAP. Investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP.
Please refer to the Non-GAAP reconciliation tables later in this release for additional information.
Forward-Looking Statements
Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include but are not limited to statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the Company’s loan portfolio and allowance for loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the Company; (7) the business related to acquisitions may not be integrated successfully or such integration may take longer to accomplish than expected; (8) the expected cost savings and any revenue synergies from acquisitions may not be fully realized within expected timeframes; and (9) disruption from acquisitions may make it more difficult to maintain relationships with clients, associates, or suppliers. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
###
CAROLINA FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2017 | December 31, 2016 | |||||||
| (Unaudited) | (Audited) | |||||||
| (Dollars in thousands) | ||||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 14,046 | 9,761 | |||||
| Interest-bearing cash | 31,198 | 14,591 | ||||||
| Cash and cash equivalents | 45,244 | 24,352 | ||||||
| Securities available-for-sale | 523,744 | 335,352 | ||||||
| Federal Home Loan Bank stock, at cost | 10,970 | 11,072 | ||||||
| Other investments | 2,139 | 1,768 | ||||||
| Derivative assets | 2,332 | 2,219 | ||||||
| Loans held for sale | 26,786 | 31,569 | ||||||
| Loans receivable, gross | 1,484,461 | 1,178,266 | ||||||
| Allowance for loan losses | (10,662 | ) | (10,688 | ) | ||||
| Loans receivable, net | 1,473,799 | 1,167,578 | ||||||
| Premises and equipment, net | 46,430 | 37,054 | ||||||
| Accrued interest receivable | 7,320 | 5,373 | ||||||
| Real estate acquired through foreclosure, net | 1,640 | 1,179 | ||||||
| Deferred tax assets, net | 7,668 | 8,341 | ||||||
| Mortgage servicing rights, net | 17,444 | 15,032 | ||||||
| Cash value life insurance | 38,317 | 28,984 | ||||||
| Core deposit intangible | 7,666 | 3,658 | ||||||
| Goodwill | 37,287 | 4,266 | ||||||
| Other assets | 7,953 | 5,939 | ||||||
| Total assets | $ | 2,256,739 | 1,683,736 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Noninterest-bearing deposits | $ | 333,267 | 229,905 | |||||
| Interest-bearing deposits | 1,374,387 | 1,028,355 | ||||||
| Total deposits | 1,707,654 | 1,258,260 | ||||||
| Short-term borrowed funds | 180,000 | 203,000 | ||||||
| Long-term debt | 54,351 | 38,465 | ||||||
| Derivative liabilities | 201 | 342 | ||||||
| Drafts outstanding | 5,630 | 6,223 | ||||||
| Advances from borrowers for insurance and taxes | 3,163 | 1,058 | ||||||
| Accrued interest payable | 1,053 | 327 | ||||||
| Reserve for mortgage repurchase losses | 2,129 | 2,880 | ||||||
| Dividends payable to stockholders | 646 | 502 | ||||||
| Accrued expenses and other liabilities | 11,688 | 9,489 | ||||||
| Total liabilities | 1,966,515 | 1,520,546 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | — | — | ||||||
| Common stock | 162 | 125 | ||||||
| Additional paid-in capital | 168,919 | 66,156 | ||||||
| Retained earnings | 117,488 | 98,451 | ||||||
| Accumulated other comprehensive income (loss), net of tax | 3,655 | (1,542 | ) | |||||
| Total stockholders’ equity | 290,224 | 163,190 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,256,739 | 1,683,736 | |||||
CAROLINA FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months | For the Nine Months | |||||||||||||||
| Ended September 30, | Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (In thousands, except share data) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Loans | $ | 18,960 | 13,826 | 52,207 | 36,791 | |||||||||||
| Investment securities | 3,761 | 2,264 | 9,975 | 6,835 | ||||||||||||
| Dividends from Federal Home Loan Bank stock | 135 | 83 | 351 | 288 | ||||||||||||
| Federal funds sold | — | 3 | 7 | 5 | ||||||||||||
| Other interest income | 70 | 32 | 178 | 92 | ||||||||||||
| Total interest income | 22,926 | 16,208 | 62,718 | 44,011 | ||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 2,422 | 1,570 | 6,212 | 4,449 | ||||||||||||
| Short-term borrowed funds | 441 | 124 | 1,225 | 320 | ||||||||||||
| Long-term debt | 514 | 558 | 1,364 | 1,743 | ||||||||||||
| Total interest expense | 3,377 | 2,252 | 8,801 | 6,512 | ||||||||||||
| Net interest income | 19,549 | 13,956 | 53,917 | 37,499 | ||||||||||||
| Provision for loan losses | — | — | — | — | ||||||||||||
| Net interest income after provision for loan losses | 19,549 | 13,956 | 53,917 | 37,499 | ||||||||||||
| Noninterest income | ||||||||||||||||
| Mortgage banking income | 3,625 | 5,605 | 11,522 | 12,967 | ||||||||||||
| Deposit service charges | 1,072 | 953 | 2,928 | 2,712 | ||||||||||||
| Net loss on extinguishment of debt | — | (118 | ) | — | (174 | ) | ||||||||||
| Net gain on sale of securities | 368 | 111 | 1,174 | 641 | ||||||||||||
| Fair value adjustments on interest rate swaps | 90 | 99 | (37 | ) | (408 | ) | ||||||||||
| Net increase in cash value life insurance | 267 | 226 | 759 | 684 | ||||||||||||
| Mortgage loan servicing income | 1,652 | 1,437 | 4,822 | 4,238 | ||||||||||||
| Other | 801 | 560 | 2,742 | 1,728 | ||||||||||||
| Total noninterest income | 7,875 | 8,873 | 23,910 | 22,388 | ||||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries and employee benefits | 8,623 | 8,481 | 26,487 | 23,306 | ||||||||||||
| Occupancy and equipment | 2,508 | 2,067 | 7,129 | 5,836 | ||||||||||||
| Marketing and public relations | 385 | 374 | 1,182 | 1,144 | ||||||||||||
| FDIC insurance | 205 | 180 | 380 | 527 | ||||||||||||
| Recovery of mortgage loan repurchase losses | (225 | ) | (250 | ) | (675 | ) | (750 | ) | ||||||||
| Legal expense | 157 | 80 | 373 | 185 | ||||||||||||
| Other real estate (income) expense, net | (5 | ) | (96 | ) | 40 | (37 | ) | |||||||||
| Mortgage subservicing expense | 494 | 462 | 1,485 | 1,353 | ||||||||||||
| Amortization of mortgage servicing rights | 748 | 586 | 2,083 | 1,659 | ||||||||||||
| Merger related expenses | 311 | — | 1,910 | 2,985 | ||||||||||||
| Other | 2,255 | 2,006 | 6,538 | 5,759 | ||||||||||||
| Total noninterest expense | 15,456 | 13,890 | 46,932 | 41,967 | ||||||||||||
| Income before income taxes | 11,968 | 8,939 | 30,895 | 17,920 | ||||||||||||
| Income tax expense | 3,975 | 2,998 | 8,659 | 5,500 | ||||||||||||
| Net income | $ | 7,993 | 5,941 | 22,236 | 12,420 | |||||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.50 | $ | 0.48 | $ | 1.48 | $ | 1.04 | ||||||||
| Diluted | $ | 0.49 | $ | 0.47 | $ | 1.47 | $ | 1.02 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 16,029,332 | 12,327,921 | 14,980,349 | 11,995,477 | ||||||||||||
| Diluted | 16,187,869 | 12,535,551 | 15,146,972 | 12,201,721 | ||||||||||||
CAROLINA FINANCIAL CORPORATION
(Unaudited)
(Dollars in thousands)
| At or for the Three Months Ended | ||||||||||||||||||||
| Selected Financial Data: | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | |||||||||||||||
| Selected Average Balances: | ||||||||||||||||||||
| Total assets | $ | 2,230,586 | $ | 2,166,803 | 1,768,323 | 1,651,653 | 1,626,717 | |||||||||||||
| Investment securities and FHLB stock | 521,569 | 510,706 | 373,551 | 326,485 | 345,385 | |||||||||||||||
| Loans receivable, net | 1,463,771 | 1,412,940 | 1,214,777 | 1,138,120 | 1,093,669 | |||||||||||||||
| Loans held for sale | 27,282 | 22,412 | 17,827 | 32,951 | 32,196 | |||||||||||||||
| Deposits | 1,710,263 | 1,633,285 | 1,330,805 | 1,288,665 | 1,291,567 | |||||||||||||||
| Stockholders’ equity | 286,524 | 277,708 | 210,071 | 160,991 | 157,311 | |||||||||||||||
| Performance Ratios (annualized): | ||||||||||||||||||||
| Return on average equity | 11.16 | % | 13.45 | % | 9.34 | % | 12.80 | % | 15.11 | % | ||||||||||
| Return on average tangible equity (Non-GAAP) | 13.24 | % | 16.02 | % | 9.98 | % | 13.46 | % | 15.93 | % | ||||||||||
| Return on average assets | 1.43 | % | 1.72 | % | 1.11 | % | 1.25 | % | 1.46 | % | ||||||||||
| Operating return on average equity (Non-GAAP) | 11.02 | % | 13.15 | % | 10.95 | % | 14.32 | % | 14.95 | % | ||||||||||
| Operating return on average tangible equity (Non-GAAP) | 13.08 | % | 15.65 | % | 11.70 | % | 15.06 | % | 15.76 | % | ||||||||||
| Operating return on average assets (Non-GAAP) | 1.42 | % | 1.69 | % | 1.30 | % | 1.40 | % | 1.45 | % | ||||||||||
| Average earning assets to average total assets | 91.09 | % | 90.68 | % | 91.99 | % | 93.21 | % | 92.94 | % | ||||||||||
| Average loans receivable to average deposits | 85.59 | % | 86.51 | % | 91.28 | % | 88.32 | % | 84.68 | % | ||||||||||
| Average stockholders’ equity to average assets | 12.85 | % | 12.82 | % | 11.88 | % | 9.75 | % | 9.67 | % | ||||||||||
| Net interest margin-tax equivalent (1) | 3.94 | % | 4.03 | % | 3.93 | % | 3.87 | % | 3.75 | % | ||||||||||
| Net charge-offs (recoveries) to average loans receivable | 0.00 | % | (0.01 | )% | (0.01 | )% | (0.12 | )% | (0.02 | )% | ||||||||||
| Nonperforming assets to period end loans receivable | 0.44 | % | 0.48 | % | 0.52 | % | 0.58 | % | 0.62 | % | ||||||||||
| Nonperforming assets to total assets | 0.29 | % | 0.31 | % | 0.34 | % | 0.40 | % | 0.42 | % | ||||||||||
| Nonperforming loans to total loans | 0.33 | % | 0.38 | % | 0.42 | % | 0.48 | % | 0.37 | % | ||||||||||
| Allowance for loan losses as a percentage of loans receivable (end of period) | 0.72 | % | 0.75 | % | 0.76 | % | 0.91 | % | 0.91 | % | ||||||||||
| Allowance for loan losses as a percentage of non-acquired loans receivable (Non-GAAP) | 0.87 | % | 0.93 | % | 0.96 | % | 1.01 | % | 1.03 | % | ||||||||||
| Allowance for loan losses as a percentage of nonperforming loans | 216.53 | % | 196.85 | % | 180.66 | % | 190.01 | % | 247.72 | % | ||||||||||
| Nonperforming Assets: | ||||||||||||||||||||
| Loans 90 days or more past due and still accruing | $ | — | $ | — | — | — | — | |||||||||||||
| Nonaccrual loans | 4,924 | 5,461 | 5,931 | 5,625 | 4,174 | |||||||||||||||
| Total nonperforming loans | 4,924 | 5,461 | 5,931 | 5,625 | 4,174 | |||||||||||||||
| Real estate acquired through foreclosure, net | 1,640 | 1,417 | 1,479 | 1,179 | 2,843 | |||||||||||||||
| Total nonperforming assets | $ | 6,564 | $ | 6,878 | 7,410 | 6,804 | 7,017 | |||||||||||||
(1) Net interest margin-tax equivalent reflects tax-exempt income on a tax-equivalent basis.
Carolina Financial Corporation
Segment Information
(Unaudited)
(Dollars in thousands)
| For the Three Months | For the Nine Months | Increase (Decrease) | ||||||||||||||||||||||
| Ended September 30, | Ended September 30, | Three | Nine | |||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | Months | Months | |||||||||||||||||||
| Segment net income: | ||||||||||||||||||||||||
| Community banking | $ | 7,837 | 4,734 | 20,788 | 10,309 | 3,103 | 10,479 | |||||||||||||||||
| Wholesale mortgage banking | 449 | 1,402 | 2,333 | 2,722 | (953 | ) | (389 | ) | ||||||||||||||||
| Other | (320 | ) | (228 | ) | (910 | ) | (669 | ) | (92 | ) | (241 | ) | ||||||||||||
| Eliminations | 27 | 33 | 25 | 58 | (6 | ) | (33 | ) | ||||||||||||||||
| Total net income | $ | 7,993 | 5,941 | 22,236 | 12,420 | 2,052 | 9,816 | |||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||||
| Segment net income: | ||||||||||||||||||||
| Community banking | $ | 7,837 | 8,443 | 4,509 | 4,565 | 4,734 | ||||||||||||||
| Wholesale mortgage banking | 449 | 1,238 | 645 | 806 | 1,402 | |||||||||||||||
| Other | (320 | ) | (346 | ) | (244 | ) | (232 | ) | (228 | ) | ||||||||||
| Eliminations | 27 | 5 | (6 | ) | 11 | 33 | ||||||||||||||
| Total net income | $ | 7,993 | 9,340 | 4,904 | 5,150 | 5,941 | ||||||||||||||
| For the Three Months Ended September 30, 2017 | ||||||||||||||||||||
| Community | Mortgage | |||||||||||||||||||
| Banking | Banking | Other | Eliminations | Total | ||||||||||||||||
| Interest income | $ | 22,460 | 480 | 8 | (22 | ) | 22,926 | |||||||||||||
| Interest expense | 3,086 | 65 | 291 | (65 | ) | 3,377 | ||||||||||||||
| Net interest income (expense) | 19,374 | 415 | (283 | ) | 43 | 19,549 | ||||||||||||||
| Provision for loan losses | — | — | — | — | — | |||||||||||||||
| Noninterest income from external customers | 3,097 | 4,778 | — | — | 7,875 | |||||||||||||||
| Intersegment noninterest income | 242 | — | — | (242 | ) | — | ||||||||||||||
| Noninterest expense | 10,999 | 4,234 | 223 | — | 15,456 | |||||||||||||||
| Intersegment noninterest expense | — | 240 | 2 | (242 | ) | — | ||||||||||||||
| Income (loss) before income taxes | 11,714 | 719 | (508 | ) | 43 | 11,968 | ||||||||||||||
| Income tax expense (benefit) | 3,877 | 270 | (188 | ) | 16 | 3,975 | ||||||||||||||
| Net income (loss) | $ | 7,837 | 449 | (320 | ) | 27 | 7,993 | |||||||||||||
| For the Three Months Ended September 30, 2016 | ||||||||||||||||||||
| Community | Mortgage | |||||||||||||||||||
| Banking | Banking | Other | Eliminations | Total | ||||||||||||||||
| Interest income | $ | 15,760 | 435 | 4 | 9 | 16,208 | ||||||||||||||
| Interest expense | 2,102 | 33 | 151 | (34 | ) | 2,252 | ||||||||||||||
| Net interest income (expense) | 13,658 | 402 | (147 | ) | 43 | 13,956 | ||||||||||||||
| Provision for loan losses | (12 | ) | 12 | — | — | — | ||||||||||||||
| Noninterest income from external customers | 2,512 | 6,361 | — | — | 8,873 | |||||||||||||||
| Intersegment noninterest income | 242 | (9 | ) | — | (233 | ) | — | |||||||||||||
| Noninterest expense | 9,448 | 4,254 | 188 | — | 13,890 | |||||||||||||||
| Intersegment noninterest expense | — | 240 | 2 | (242 | ) | — | ||||||||||||||
| Income (loss) before income taxes | 6,976 | 2,248 | (337 | ) | 52 | 8,939 | ||||||||||||||
| Income tax expense (benefit) | 2,242 | 846 | (109 | ) | 19 | 2,998 | ||||||||||||||
| Net income (loss) | $ | 4,734 | 1,402 | (228 | ) | 33 | 5,941 | |||||||||||||
Carolina Financial Corporation
Segment Information, Continued
(Unaudited)
(Dollars in thousands)
| For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||
| Community | Mortgage | |||||||||||||||||||
| Banking | Banking | Other | Eliminations | Total | ||||||||||||||||
| Interest income | $ | 61,409 | 1,302 | 21 | (14 | ) | 62,718 | |||||||||||||
| Interest expense | 8,051 | 119 | 750 | (119 | ) | 8,801 | ||||||||||||||
| Net interest income (expense) | 53,358 | 1,183 | (729 | ) | 105 | 53,917 | ||||||||||||||
| Provision for loan losses | — | — | — | — | — | |||||||||||||||
| Noninterest income from external customers | 9,011 | 14,899 | — | — | 23,910 | |||||||||||||||
| Intersegment noninterest income | 725 | 64 | — | (789 | ) | — | ||||||||||||||
| Noninterest expense | 33,773 | 12,448 | 711 | — | 46,932 | |||||||||||||||
| Intersegment noninterest expense | — | 720 | 5 | (725 | ) | — | ||||||||||||||
| Income (loss) before income taxes | 29,321 | 2,978 | (1,445 | ) | 41 | 30,895 | ||||||||||||||
| Income tax expense (benefit) | 8,533 | 645 | (535 | ) | 16 | 8,659 | ||||||||||||||
| Net income (loss) | $ | 20,788 | 2,333 | (910 | ) | 25 | 22,236 | |||||||||||||
| For the Nine Months Ended September 30, 2016 | ||||||||||||||||||||
| Community | Mortgage | |||||||||||||||||||
| Banking | Banking | Other | Eliminations | Total | ||||||||||||||||
| Interest income | $ | 42,790 | 1,133 | 13 | 75 | 44,011 | ||||||||||||||
| Interest expense | 6,066 | 42 | 447 | (43 | ) | 6,512 | ||||||||||||||
| Net interest income (expense) | 36,724 | 1,091 | (434 | ) | 118 | 37,499 | ||||||||||||||
| Provision for loan losses | (12 | ) | 12 | — | — | — | ||||||||||||||
| Noninterest income from external customers | 6,773 | 15,615 | — | — | 22,388 | |||||||||||||||
| Intersegment noninterest income | 727 | 25 | — | (752 | ) | — | ||||||||||||||
| Noninterest expense | 29,523 | 11,825 | 619 | — | 41,967 | |||||||||||||||
| Intersegment noninterest expense | — | 721 | 6 | (727 | ) | — | ||||||||||||||
| Income (loss) before income taxes | 14,713 | 4,173 | (1,059 | ) | 93 | 17,920 | ||||||||||||||
| Income tax expense (benefit) | 4,404 | 1,451 | (390 | ) | 35 | 5,500 | ||||||||||||||
| Net income (loss) | $ | 10,309 | 2,722 | (669 | ) | 58 | 12,420 | |||||||||||||
| For the Three Months Ended September 30, | ||||||||||||||||||||||||
| Loan Originations | Mortgage Banking Income | Margin | ||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
| Additional segment information: | ||||||||||||||||||||||||
| Community banking | $ | 20,342 | 25,633 | 500 | 680 | 2.46 | % | 2.65 | % | |||||||||||||||
| Wholesale mortgage banking | 217,014 | 253,485 | 3,125 | 4,925 | 1.44 | % | 1.94 | % | ||||||||||||||||
| Total mortgage banking income | $ | 237,356 | 279,118 | 3,625 | 5,605 | 1.53 | % | 2.01 | % | |||||||||||||||
| For the Nine Months Ended September 30, | ||||||||||||||||||||||||
| Loan Originations | Mortgage Banking Income | Margin | ||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
| Additional segment information: | ||||||||||||||||||||||||
| Community banking | $ | 59,511 | 68,263 | 1,441 | 1,586 | 2.42 | % | 2.32 | % | |||||||||||||||
| Wholesale mortgage banking | 611,597 | 645,412 | 10,081 | 11,381 | 1.65 | % | 1.76 | % | ||||||||||||||||
| Total mortgage banking income | $ | 671,108 | 713,675 | 11,522 | 12,967 | 1.72 | % | 1.82 | % | |||||||||||||||
Carolina Financial Corporation
Reconciliation of Non-GAAP Financial Measures - Consolidated
(Unaudited)
(In thousands, except share data)
| At the Month Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Core deposits: | ||||||||||||||||||||
| Noninterest-bearing demand accounts | $ | 333,267 | $ | 330,641 | 298,365 | 229,905 | 267,892 | |||||||||||||
| Interest-bearing demand accounts | 309,241 | 298,123 | 309,961 | 191,851 | 195,792 | |||||||||||||||
| Savings accounts | 69,552 | 70,336 | 66,506 | 48,648 | 47,035 | |||||||||||||||
| Money market accounts | 377,754 | 380,108 | 363,600 | 292,639 | 299,960 | |||||||||||||||
| Total core deposits (Non-GAAP) | 1,089,814 | 1,079,208 | 1,038,432 | 763,043 | 810,679 | |||||||||||||||
| Certificates of deposit: | ||||||||||||||||||||
| Less than $250,000 | 567,483 | 539,177 | 524,836 | 467,937 | 476,744 | |||||||||||||||
| $250,000 or more | 50,357 | 45,344 | 44,452 | 27,280 | 24,853 | |||||||||||||||
| Total certificates of deposit | 617,840 | 584,521 | 569,288 | 495,217 | 501,597 | |||||||||||||||
| Total deposits | $ | 1,707,654 | $ | 1,663,729 | 1,607,720 | 1,258,260 | 1,312,276 | |||||||||||||
| At the Month Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Tangible book value per share: | ||||||||||||||||||||
| Total stockholders’ equity | $ | 290,224 | 281,818 | 271,454 | 163,190 | 160,331 | ||||||||||||||
| Less intangible assets | (44,953 | ) | (45,123 | ) | (45,292 | ) | (7,924 | ) | (8,037 | ) | ||||||||||
| Tangible common equity (Non-GAAP) | $ | 245,271 | 236,695 | 226,162 | 155,266 | 152,294 | ||||||||||||||
| Issued and outstanding shares | 16,159,309 | 16,156,943 | 16,185,408 | 12,548,328 | 12,546,220 | |||||||||||||||
| Less nonvested restricted stock awards | (99,639 | ) | (101,489 | ) | (227,439 | ) | (211,908 | ) | (216,828 | ) | ||||||||||
| Period end dilutive shares | 16,059,670 | 16,055,454 | 15,957,969 | 12,336,420 | 12,329,392 | |||||||||||||||
| Total stockholders equity | $ | 290,224 | 281,818 | 271,454 | 163,190 | 160,331 | ||||||||||||||
| Divided by period end dilutive shares | 16,059,670 | 16,055,454 | 15,957,969 | 12,336,420 | 12,329,392 | |||||||||||||||
| Common book value per share | $ | 18.07 | 17.55 | 17.01 | 13.23 | 13.00 | ||||||||||||||
| Tangible common equity (Non-GAAP) | $ | 245,271 | 236,695 | 226,162 | 155,266 | 152,294 | ||||||||||||||
| Divided by period end dilutive shares | 16,059,670 | 16,055,454 | 15,957,969 | 12,336,420 | 12,329,392 | |||||||||||||||
| Tangible common book value per share (Non-GAAP) | $ | 15.27 | 14.74 | 14.17 | 12.59 | 12.35 | ||||||||||||||
| At the Month Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||
| Acquired and non-acquired loans: | ||||||||||||||||||||
| Acquired loans receivable | $ | 257,461 | $ | 278,275 | 303,244 | 119,422 | 129,505 | |||||||||||||
| Non-acquired loans receivable | 1,227,000 | 1,157,145 | 1,113,766 | 1,058,844 | 1,003,724 | |||||||||||||||
| Total loans receivable | $ | 1,484,461 | $ | 1,435,420 | 1,417,010 | 1,178,266 | 1,133,229 | |||||||||||||
| % Acquired | 17.34 | % | 19.39 | % | 21.40 | % | 10.14 | % | 11.43 | % | ||||||||||
| Non-acquired loans | $ | 1,227,000 | $ | 1,157,145 | 1,113,766 | 1,058,844 | 1,003,724 | |||||||||||||
| Allowance for loan losses | 10,662 | 10,750 | 10,715 | 10,688 | 10,340 | |||||||||||||||
| Allowance for loan losses to non-acquired loans (Non-GAAP) | 0.87 | % | 0.93 | % | 0.96 | % | 1.01 | % | 1.03 | % | ||||||||||
| Total loans receivable | $ | 1,484,461 | $ | 1,435,420 | 1,417,010 | 1,178,266 | 1,133,229 | |||||||||||||
| Allowance for loan losses | 10,662 | 10,750 | 10,715 | 10,688 | 10,340 | |||||||||||||||
| Allowance for loan losses to total loans receivable | 0.72 | % | 0.75 | % | 0.76 | % | 0.91 | % | 0.91 | % | ||||||||||
Carolina Financial Corporation
Reconciliation of Non-GAAP Financial Measures - Consolidated
(Unaudited)
(In thousands, except share data)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| Operating Earnings and Performance Ratios: | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | September 30, 2017 | September 30, 2016 | |||||||||||||||||||||
| Income before income taxes | $ | 11,968 | 12,013 | 6,915 | 7,498 | 8,939 | 30,895 | 17,920 | ||||||||||||||||||||
| Gain on sale of securities | (368 | ) | (621 | ) | (185 | ) | (65 | ) | (111 | ) | (1,174 | ) | (641 | ) | ||||||||||||||
| Net loss on extinguishment of debt | — | — | — | 1,694 | 118 | — | 174 | |||||||||||||||||||||
| Fair value adjustments on interest rate swaps | (90 | ) | 69 | 58 | (998 | ) | (99 | ) | 37 | 408 | ||||||||||||||||||
| Merger related expenses | 311 | 279 | 1,319 | 260 | — | 1,910 | 2,985 | |||||||||||||||||||||
| Operating earnings before income taxes | 11,821 | 11,740 | 8,107 | 8,389 | 8,847 | 31,668 | 20,846 | |||||||||||||||||||||
| Tax expense (1) | 3,926 | 2,612 | 2,358 | 2,627 | 2,967 | 8,876 | 6,398 | |||||||||||||||||||||
| Operating earnings (Non-GAAP) | $ | 7,895 | 9,128 | 5,749 | 5,762 | 5,880 | 22,792 | 14,448 | ||||||||||||||||||||
| Average equity | $ | 286,524 | 277,708 | 210,071 | 160,991 | 157,311 | 258,101 | 148,134 | ||||||||||||||||||||
| Average assets | $ | 2,230,586 | 2,166,803 | 1,768,323 | 1,651,653 | 1,626,717 | 2,055,237 | 1,500,819 | ||||||||||||||||||||
| Average Equity | $ | 286,524 | 277,708 | 210,071 | 160,991 | 157,311 | ||||||||||||||||||||||
| Less average intangible assets | (45,035 | ) | (44,452 | ) | (13,510 | ) | (7,979 | ) | (8,092 | ) | ||||||||||||||||||
| Average tangible common equity (Non-GAAP) | $ | 241,489 | 233,256 | 196,561 | 153,012 | 149,219 | ||||||||||||||||||||||
| Operating return on average assets (Non-GAAP) | 1.42 | % | 1.69 | % | 1.30 | % | 1.40 | % | 1.45 | % | 1.48 | % | 1.28 | % | ||||||||||||||
| Operating return on average equity (Non-GAAP) | 11.02 | % | 13.15 | % | 10.95 | % | 14.32 | % | 14.95 | % | 11.77 | % | 13.00 | % | ||||||||||||||
| Operating return on average tangible equity (Non-GAAP) | 13.08 | % | 15.65 | % | 11.70 | % | 15.06 | % | 15.76 | % | ||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||||
| Basic | 16,029,332 | 16,029,332 | 13,919,711 | 12,336,420 | 12,327,921 | 14,980,349 | 11,995,477 | |||||||||||||||||||||
| Diluted | 16,187,869 | 16,180,171 | 14,139,241 | 12,585,518 | 12,535,551 | 15,146,972 | 12,201,721 | |||||||||||||||||||||
| Operating earnings per common share: | ||||||||||||||||||||||||||||
| Basic (Non-GAAP) | $ | 0.49 | 0.57 | 0.41 | 0.47 | 0.48 | 1.52 | 1.20 | ||||||||||||||||||||
| Diluted (Non-GAAP) | $ | 0.49 | 0.56 | 0.41 | 0.46 | 0.47 | 1.50 | 1.18 | ||||||||||||||||||||
| As Reported: | ||||||||||||||||||||||||||||
| Income before income taxes | $ | 11,968 | 12,013 | 6,915 | 7,498 | 8,939 | 30,895 | 17,920 | ||||||||||||||||||||
| Tax expense | 3,975 | 2,673 | 2,011 | 2,348 | 2,998 | 8,659 | 5,500 | |||||||||||||||||||||
| Net Income | $ | 7,993 | 9,340 | 4,904 | 5,150 | 5,941 | 22,236 | 12,420 | ||||||||||||||||||||
| Average equity | $ | 286,524 | 277,708 | 210,071 | 160,991 | 157,311 | 258,101 | 148,134 | ||||||||||||||||||||
| Average tangible equity (Non-GAAP) | $ | 241,489 | 233,256 | 196,561 | 153,012 | 149,219 | ||||||||||||||||||||||
| Average assets | $ | 2,230,586 | 2,166,803 | 1,768,323 | 1,651,653 | 1,626,717 | 2,055,237 | 1,500,819 | ||||||||||||||||||||
| Return on average assets | 1.43 | % | 1.72 | % | 1.11 | % | 1.25 | % | 1.46 | % | 1.44 | % | 1.10 | % | ||||||||||||||
| Return on average equity | 11.16 | % | 13.45 | % | 9.34 | % | 12.80 | % | 15.11 | % | 11.49 | % | 11.18 | % | ||||||||||||||
| Return on average tangible equity (Non-GAAP) | 13.24 | % | 16.02 | % | 9.98 | % | 13.46 | % | 15.93 | % | ||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||||
| Basic | 16,029,332 | 16,029,332 | 13,919,711 | 12,336,420 | 12,327,921 | 14,980,349 | 11,995,477 | |||||||||||||||||||||
| Diluted | 16,187,869 | 16,180,171 | 14,139,241 | 12,585,518 | 12,535,551 | 15,146,972 | 12,201,721 | |||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||||
| Basic | $ | 0.50 | 0.58 | 0.35 | 0.42 | 0.48 | 1.48 | 1.04 | ||||||||||||||||||||
| Diluted | $ | 0.49 | 0.58 | 0.35 | 0.41 | 0.47 | 1.47 | 1.02 | ||||||||||||||||||||
(1) Tax expense is determined using the effective tax rate reflected in the accompanying income statement for the applicable reporting period.
Carolina Financial Corporation
Reconciliation of Non-GAAP Financial Measures - Community Banking Segment
(Unaudited)
(In thousands, except share data)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||||||||||||
| Segment net income: | ||||||||||||||||||||||||||||
| Community banking | $ | 7,837 | 8,443 | 4,509 | 4,565 | 4,734 | $ | 20,788 | 10,309 | |||||||||||||||||||
| Wholesale mortgage banking | 449 | 1,238 | 645 | 806 | 1,402 | 2,333 | 2,722 | |||||||||||||||||||||
| Other | (320 | ) | (346 | ) | (244 | ) | (232 | ) | (228 | ) | (910 | ) | (669 | ) | ||||||||||||||
| Eliminations | 27 | 5 | (6 | ) | 11 | 33 | 25 | 58 | ||||||||||||||||||||
| Total net income | $ | 7,993 | 9,340 | 4,904 | 5,150 | 5,941 | $ | 22,236 | 12,420 | |||||||||||||||||||
| Community banking segment operating earnings: | ||||||||||||||||||||||||||||
| Income before income taxes | $ | 11,714 | 11,232 | 6,375 | 6,545 | 6,975 | $ | 29,321 | 14,713 | |||||||||||||||||||
| Tax expense (1) | 3,877 | 2,789 | 1,866 | 1,980 | 2,241 | 8,533 | 4,404 | |||||||||||||||||||||
| Bank segment net income | $ | 7,837 | 8,443 | 4,509 | 4,565 | 4,734 | $ | 20,788 | 10,309 | |||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||||
| Basic | 16,029,332 | 16,029,332 | 13,919,711 | 12,336,420 | 12,327,921 | 14,980,349 | 11,995,477 | |||||||||||||||||||||
| Diluted | 16,187,869 | 16,180,171 | 14,139,241 | 12,585,518 | 12,535,551 | 15,146,972 | 12,201,721 | |||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||||
| Basic | $ | 0.50 | 0.53 | 0.32 | 0.37 | 0.38 | $ | 1.39 | $ | 0.86 | ||||||||||||||||||
| Diluted | $ | 0.49 | 0.52 | 0.32 | 0.36 | 0.38 | $ | 1.37 | $ | 0.84 | ||||||||||||||||||
| Bank segment income before taxes | $ | 11,714 | 11,232 | 6,375 | 6,545 | 6,975 | $ | 29,321 | $ | 14,713 | ||||||||||||||||||
| Gain on sale of securities | (368 | ) | (621 | ) | (185 | ) | (65 | ) | (111 | ) | (1,174 | ) | (641 | ) | ||||||||||||||
| Net loss on extinguishment of debt | — | — | — | 1,693 | 118 | — | 174 | |||||||||||||||||||||
| Fair value adjustments on interest rate swaps | (90 | ) | 69 | 58 | (998 | ) | (99 | ) | 37 | 408 | ||||||||||||||||||
| Merger related expenses (2) | 311 | 279 | 1,311 | 254 | — | 3,137 | 2,883 | |||||||||||||||||||||
| Operating earnings before income taxes | 11,567 | 10,959 | 7,559 | 7,429 | 6,883 | 31,321 | 17,537 | |||||||||||||||||||||
| Tax expense (1) | 3,828 | 2,721 | 2,213 | 2,247 | 2,211 | 9,115 | 5,249 | |||||||||||||||||||||
| Operating bank segment earnings (Non-GAAP) | $ | 7,739 | 8,238 | 5,346 | 5,182 | 4,672 | $ | 22,206 | $ | 12,288 | ||||||||||||||||||
| Operating bank segment earnings per common share: | ||||||||||||||||||||||||||||
| Basic (Non-GAAP) | $ | 0.48 | 0.51 | 0.38 | 0.42 | 0.38 | $ | 1.48 | $ | 1.02 | ||||||||||||||||||
| Diluted (Non-GAAP) | $ | 0.48 | 0.51 | 0.38 | 0.41 | 0.37 | $ | 1.47 | $ | 1.01 | ||||||||||||||||||
(1) Tax expense is determined using the effective tax rate computed for the applicable business segment.
(2) Remaining merger related costs were incurred within the category “Other” segment earnings.