For complete discussion and disclosure of other accounting policies see Note 3
Summary of Significant Accounting Policies of the Companys consolidated financial statements presented elsewhere in this report.
For the year ended December 31, 2017, we reported net earnings of $104.4 million, compared with $101.4 million for 2016. This
represented an increase of $3.0 million, or 2.94%. Diluted earnings per share were $0.95 for the year ended December 31, 2017, compared to $0.94 for 2016. Earnings for 2017 included $8.5 million in loan loss provision recapture, compared
to $6.4 million in 2016. 2017 also included a $2.9 million net gain from an eminent domain condemnation of one of our banking center buildings, a $906,000 net gain on the sale of a branch acquired from Valley Business Bank (VBB), and a
$542,000 net gain on the sale of our former operations and technology center. Income tax expense for 2017 included a one-time charge of $13.2 million due to the re-measurement of the Companys net deferred tax asset (DTA)
resulting from the enactment of the Tax Reform Act on December 22, 2017. Excluding the impact of the $13.2 million DTA revaluation, net income increased by $16.2 million, or 15.96%, to $117.6 million, or $1.07 per share, for the
year ended December 31, 2017.
Total assets of $8.27 billion at December 31, 2017 increased $196.9 million, or 2.44%, from total
assets of $8.07 billion at December 31, 2016. Interest-earning assets totaled $7.80 billion at December 31, 2017, an increase of $156.8 million, or 2.05%, when compared with earning assets of $7.64 billion at December 31, 2016. The
increase in interest-earning assets was primarily due to a $435.6 million increase in total loans, which was partially offset by a $271.3 million decrease in investment securities.
Total investment securities were $2.91 billion at December 31, 2017, a decrease of $271.3 million, or 8.52%, from $3.18 billion at
December 31, 2016. At December 31, 2017, investment securities HTM totaled $829.9 million. At December 31, 2017, investment securities AFS totaled $2.08 billion, inclusive of a pre-tax unrealized gain of $2.9 million. HTM securities
declined by $81.8 million, or 8.97%, and AFS securities declined by $189.5 million, or 8.35%, from December 31, 2016.
and leases, net of deferred fees and discount, of $4.83 billion at December 31, 2017, increased by $435.6 million, or 9.91%, from $4.40 billion at December 31, 2016. The increase in total loans included $309.7 million of loans acquired
from VBB in the first quarter of 2017. Excluding the acquired VBB loans, the $125.9 million, or 2.86% increase in total loans was principally due to growth of $182.8 million in commercial real estate loans and $12.8 million in Small Business
Administration (SBA) loans. This growth was partially offset by decreases of $21.4 million in consumer and other loans, $17.2 million in commercial and industrial loans, $16.3 million in construction loans, and $14.7 million in
single-family residential (SFR) mortgage loans.
Noninterest-bearing deposits were $3.85 billion at December 31, 2017, an
increase of $172.9 million, or 4.71%, compared to $3.67 billion at December 31, 2016. The increase in total deposits from the end of 2016 included $172.5 million of noninterest-bearing deposits and $361.8 million of total deposits acquired from
VBB during the first quarter of 2017. In the fourth quarter of 2017, we sold a branch acquired from VBB, which included approximately $27 million in total deposits. At December 31, 2017, noninterest-bearing deposits were 58.75% of total
deposits, compared to 58.22% at December 31, 2016. Our average cost of total deposits was 0.09% for 2017 and 2016.
repurchase agreements totaled $553.8 million at December 31, 2017, compared to $603.0 million at December 31, 2016. Our average cost of total deposits including customer repurchase agreements was 0.10% for 2017, compared to 0.11% for 2016.
There were no short-term borrowings at December 31, 2017, compared to $53.0 million at December 31, 2016. At December 31,
2017, we had $25.8 million of junior subordinated debentures, unchanged from December 31, 2016. These debentures bear interest at three-month LIBOR plus 1.38% and mature in 2036.