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First Busey Announces 2019 First Quarter Earnings

CHAMPAIGN, Ill., April 23, 2019 (GLOBE NEWSWIRE) -- (BUSE)

Message from our President & CEO

The Banc Ed Corp. merger leads to positive advances in the first quarter of 2019 from the comparable quarter of the prior year:

  • Net income of $25.5 million, as compared to $21.9 million

  • Net interest income of $68.4 million, as compared to $59.8 million

  • Portfolio loans of $6.52 billion, as compared to $5.53 billion

  • Tangible book value per common share of $14.53, as compared to $13.08

First Busey Corporation’s (“First Busey” or the “Company”) net income for the first quarter of 2019 was $25.5 million, or $0.48 per diluted common share, as compared to $25.3 million, or $0.51 per diluted common share, for the fourth quarter of 2018 and $21.9 million, or $0.45 per diluted common share, for the first quarter of 2018. Adjusted net income1 for the first quarter of 2019 was $26.6 million, or $0.50 per diluted common share, as compared to $26.0 million, or $0.53 per diluted common share, for the fourth quarter of 2018 and $24.9 million, or $0.51 per diluted common share, for the first quarter of 2018.

The Company views certain non-operating items, including acquisition-related and restructuring charges, as adjustments to net income reported under generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for the first quarter of 2019 were $1.2 million of expenses related to acquisitions and $0.3 million of expenses related to restructuring costs. The reconciliation of non-GAAP measures (including adjusted net income, adjusted return on average assets, adjusted net interest margin, adjusted efficiency ratio, tangible book value, tangible book value per share and return on average tangible common equity), which the Company believes facilitates the assessment of its financial results and peer comparability, is included in tabular form at the end of this release.

For the first quarter of 2019, annualized return on average assets and annualized return on average tangible common equity were 1.17% and 13.64%, respectively. Based on adjusted net income1, return on average assets was 1.22% and return on average tangible common equity was 14.25% for the first quarter of 2019.

Additional first quarter 2019 highlights include:

  • Non-interest income increased to $25.9 million as compared to $22.9 million for the fourth quarter 2018.

  • Busey Bank organic commercial loan growth of $60.4 million in first quarter of 2019.

  • Total deposits at March 31, 2019 grew to $7.76 billion driven by a linked-quarter increase of $326.6 million in non-interest bearing deposits.

  • Continued disciplined credit management resulted in non-performing loans as a percentage of total loans of 0.56% at March 31, 2019 as compared to 0.66% at December 31, 2018.

1 A Non-GAAP financial measure. See “Non-GAAP Financial Information” below for reconciliation.

On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”), the holding company for TheBANK of Edwardsville (“TheBANK”). TheBANK, founded in 1868, is a privately held commercial bank headquartered in Edwardsville, Illinois. It is anticipated that TheBANK will be merged with and into First Busey’s bank subsidiary, Busey Bank, in the fourth quarter of 2019.

Under the terms of the merger agreement with Banc Ed, at the effective time of the acquisition, each share of Banc Ed common stock issued and outstanding was converted into the right to receive 8.2067 shares of the Company’s common stock and $111.53 in cash for each share of common stock of Banc Ed. The market value of the 6.7 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $166.5 million based on First Busey’s closing stock price of $24.76 on January 31, 2019.

Financial results for the first quarter of 2019 were significantly impacted by the Banc Ed acquisition, resetting the baseline for financial performance in future quarters in a multitude of positive ways. At the date of the merger, the fair value of TheBANK’s total assets was $1.79 billion, the fair value of total loans was $873.3 million, and the fair value of total deposits was $1.44 billion, which included $245.7 million of non-interest bearing deposits. Since the acquisition date, TheBANK’s net income of $3.6 million had a positive impact on the first quarter of 2019.

The Banc Ed transaction fits with our acquisition strategy as the addition of TheBANK will grow the Company’s current geographic footprint, allowing the Company to serve customers across a broader portion of the St. Louis Missouri-Illinois Metropolitan Statistical Area and will significantly add to the Company’s wealth management business. We are pleased to welcome our Banc Ed colleagues into the Busey family and feel confident that we are well positioned for growth and profitability in 2019.

Busey recently received its fourth consecutive honor as one of the 2019 Best Places to Work in Illinois. This awards program—voted by associates and hosted by Best Companies Group and Daily Herald Business Ledger—identifies and recognizes the best places of employment in Illinois, benefiting the state’s economy, workforce and businesses. In addition, for the first time Busey was honored as a 2019 Best Place to Work in Indiana by Best Companies Group and the Indiana Chamber of Commerce and in Missouri as one of the 2019 Best Places to Work in St. Louis by Quantum Workplace and St. Louis Business Journal.

As we acknowledge our accomplishments and continue growing forward, we are grateful for the opportunity to consistently earn the business of our customers, based on the contributions of our talented associates and the loyal support of our shareholders.

/s/ Van A. Dukeman
President & Chief Executive Officer
First Busey Corporation

SELECTED FINANCIAL HIGHLIGHTS1

(dollars in thousands, except per share data)

As of and for the

Three Months Ended

March 31,

December 31,

September 30,

March 31,

2019

2018

2018

2018

EARNINGS & PER SHARE DATA

Net income

$

25,469

$

25,290

$

26,859

$

21,917

Revenue2

94,286

83,184

82,627

82,243

Diluted earnings per share

0.48

0.51

0.55

0.45

Cash dividends paid per share

0.21

0.20

0.20

0.20

Net income by operating segment

Banking

$

26,665

$

24,134

$

26,486

$

21,845

Remittance Processing

1,025

814

957

953

Wealth Management

2,641

2,040

2,280

2,764

AVERAGE BALANCES

Cash and cash equivalents

$

220,471

$

272,811

$

238,000

$

227,055

Investment securities

1,722,015

1,443,054

1,417,708

1,310,902

Loans held for sale

17,249

23,380

28,661

39,294

Portfolio loans

6,128,661

5,540,852

5,551,753

5,507,860

Interest-earning assets

8,088,396

7,174,755

7,132,324

6,976,383

Total assets

8,865,642

7,846,154

7,802,308

7,663,899

Non-interest bearing deposits

1,616,913

1,486,977

1,492,709

1,497,136

Interest-bearing deposits

5,592,495

4,852,649

4,784,657

4,568,160

Total deposits

7,209,408

6,339,626

6,277,366

6,065,296

Securities sold under agreements to repurchase

204,529

210,416

234,729

258,049

Interest-bearing liabilities

6,064,091

5,329,898

5,303,632

5,175,228

Total liabilities

7,755,770

6,866,652

6,840,484

6,730,137

Stockholders' common equity

1,109,872

979,502

961,824

933,762

Tangible stockholders' common equity3

757,285

678,023

658,910

626,794

PERFORMANCE RATIOS

Return on average assets4

1.17

%

1.28

%

1.37

%

1.16

%

Return on average common equity4

9.31

%

10.24

%

11.08

%

9.52

%

Return on average tangible common equity3,6

13.64

%

14.80

%

16.17

%

14.18

%

Net interest margin5,6

3.46

%

3.38

%

3.41

%

3.51

%

Efficiency ratio6

57.99

%

56.57

%

53.47

%

59.80

%

Non-interest revenue as a % of total revenues2

27.47

%

27.27

%

26.45

%

27.34

%

1 Results are unaudited.

2 Revenues consist of net interest income plus non-interest income, net of security gains and losses.

3 Average tangible stockholders’ common equity is defined as average common equity less average goodwill and intangibles. See “Non-GAAP Financial
Information” below for reconciliation.

4 Annualized, see “Non-GAAP Financial Information” below for reconciliation.

5 On a tax-equivalent basis, assuming an income tax rate of 21%.

6 See “Non-GAAP Financial Information” below for reconciliation.


Condensed Consolidated Balance Sheets1

As of

(dollars in thousands, except per share data)

March 31,

December 31,

September 30,

June 30,

March 31,

2019

2018

2018

2018

2018

Assets

Cash and cash equivalents

$

330,407

$

239,973

$

160,652

$

230,730

$

367,525

Investment securities

1,940,519

1,312,514

1,496,948

1,384,807

1,286,136

Loans held for sale

20,291

25,895

32,617

33,974

29,034

Commercial loans

4,744,136

4,060,126

4,141,816

4,076,253

4,061,181

Retail real estate and retail other loans

1,770,945

1,508,302

1,481,925

1,479,034

1,470,272

Portfolio loans

$

6,515,081

$

5,568,428

$

5,623,741

$

5,555,287

$

5,531,453

Allowance for loan losses

(50,915

)

(50,648

)

(52,743

)

(53,305

)

(52,649

)

Premises and equipment

147,958

117,672

119,162

119,835

118,985

Goodwill and other intangibles

377,739

300,558

301,963

303,407

304,897

Right of use asset

10,898

-

-

-

-

Other assets

245,356

187,965

207,045

200,809

193,365

Total assets

$

9,537,334

$

7,702,357

$

7,889,385

$

7,775,544

$

7,778,746

Liabilities & Stockholders' Equity

Non-interest bearing deposits

$

1,791,339

$

1,464,700

$

1,438,054

$

1,496,671

$

1,651,333

Interest-bearing checking, savings, and money market deposits

4,214,809

3,287,618

3,205,232

3,192,735

3,270,963

Time deposits

1,757,078

1,497,003

1,552,283

1,474,506

1,408,878

Total deposits

$

7,763,226

$

6,249,321

$

6,195,569

$

6,163,912

$

6,331,174

Securities sold under agreements to repurchase

217,077

185,796

255,906

240,109

235,311

Short-term borrowings

30,739

-

200,000

150,000

-

Long-term debt

188,221

148,686

148,626

154,125

154,122

Junior subordinated debt owed to unconsolidated trusts

71,192

71,155

71,118

71,081

71,044

Lease liability

10,982

-

-

-

-

Other liabilities

69,756

52,435

46,026

39,135

44,949

Total liabilities

$

8,351,193

$

6,707,393

$

6,917,245

$

6,818,362

$

6,836,600

Total stockholders' equity

$

1,186,141

$

994,964

$

972,140

$

957,182

$

942,146

Total liabilities & stockholders' equity

$

9,537,334

$

7,702,357

$

7,889,385

$

7,775,544

$

7,778,746

Share Data

Book value per common share

$

21.32

$

20.36

$

19.90

$

19.62

$

19.34

Tangible book value per common share2

$

14.53

$

14.21

$

13.72

$

13.40

$

13.08

Ending number of common shares outstanding

55,624,627

48,874,836

48,860,309

48,776,404

48,717,239

1 Results are unaudited except for amounts reported as of December 31, 2018.

2 See “Non-GAAP Financial Information” below for reconciliation.


Condensed Consolidated Statements of Income1

(dollars in thousands, except per share data)

For the

Three Months Ended March 31,

2019

2018

Interest and fees on loans

$

71,789

$

60,960

Interest on investment securities

11,260

7,250

Other interest income

1,232

423

Total interest income

$

84,281

$

68,633

Interest on deposits

12,500

5,987

Interest on securities sold under agreements to repurchase

583

341

Interest on short-term borrowings

191

476

Interest on long-term debt

1,710

1,357

Interest on junior subordinated debt owed to unconsolidated trusts

914

715

Total interest expense

$

15,898

$

8,876

Net interest income

$

68,383

$

59,757

Provision for loan losses

2,111

1,008

Net interest income after provision for loan losses

$

66,272

$

58,749

Trust fees

8,115

7,514

Commissions and brokers' fees, net

914

1,096

Fees for customer services

8,097

6,946

Remittance processing

3,780

3,392

Mortgage revenue

1,945

1,643

Security gains, net

42

-

Other

3,052

1,895

Total non-interest income

$

25,945

$

22,486

Salaries, wages and employee benefits

32,341

28,819

Net occupancy expense of premises

4,202

3,821

Furniture and equipment expense

2,095

1,913

Data processing

4,401

4,345

Amortization of intangible assets

2,094

1,515

Other

12,030

10,627

Total non-interest expense

$

57,163

$

51,040

Income before income taxes

$

35,054

$

30,195

Income taxes

9,585

8,278

Net income

$

25,469

$

21,917

Per Share Data

Basic earnings per common share

$

0.48

$

0.45

Diluted earnings per common share

$

0.48

$

0.45

Average common shares outstanding

53,277,102

48,775,416

Diluted average common shares outstanding

53,577,935

49,178,939

1 Results are unaudited.

Balance Sheet Growth

At March 31, 2019, portfolio loans were $6.52 billion, as compared to $5.57 billion as of December 31, 2018 and $5.53 billion as of March 31, 2018. The March 31, 2019 increase in portfolio loans includes $874.1 million of TheBANK loans combined with organic Busey Bank loan growth, primarily in Missouri. Average portfolio loans increased 11.3% to $6.13 billion for the first quarter of 2019 compared to $5.51 billion for the first quarter of 2018.

Average interest-earning assets for the first quarter of 2019 increased to $8.09 billion compared to $7.17 billion for the fourth quarter of 2018 and $6.98 billion for the first quarter of 2018.

Total deposits were $7.76 billion at March 31, 2019, an increase from $6.25 billion at December 31, 2018 and $6.33 billion at March 31, 2018 TheBANK’s total deposits were $1.47 billion at March 31, 2019, which included $253.9 million of non-interest bearing deposits. The Company remains funded primarily through core deposits with significant market share in its core markets.

Net Interest Margin and Net Interest Income

Net interest income was $68.4 million in the first quarter of 2019 compared to $60.5 million in the fourth quarter of 2018 and $59.8 million in the first quarter of 2018. Higher yields from loan production partially offset increases in funding costs. Funding costs have increased primarily due to resetting of time deposit rates to reflect market increases and additional borrowings in conjunction with the Banc Ed acquisition. Net purchase accounting accretion and amortization included in interest income and interest expense was $3.0 million for the first quarter of 2019, an increase from $1.9 million for the fourth quarter of 2018 and decrease from $3.4 million for the first quarter of 2018.

Net interest margin for the first quarter of 2019 was 3.46%, compared to 3.38% for the fourth quarter of 2018 and 3.51% for the first quarter of 2018. Adjusted net interest margin1 for the first quarter of 2019 was 3.31%, compared to 3.27% for the fourth quarter of 2018 but steady with the first quarter of 2018.

Asset Quality

Non-performing loans totaled $36.6 million as of March 31, 2019 and December 31, 2018 compared to $33.6 million as of March 31, 2018. Non-performing loans were 0.56% of total portfolio loans as of March 31, 2019, compared to 0.66% as of December 31, 2018 and 0.61% as of March 31, 2018.

The Company recorded net charge-offs of $1.8 million for the first quarter of 2019. The allowance for loan loss as a percentage of portfolio loans was 0.78% at March 31, 2019 as compared to 0.91% at December 31, 2018 and 0.95% at March 31, 2018. The decline in the allowance coverage ratio in the first quarter of 2019 is primarily attributed to the Banc Ed acquisition. Acquired loans are initially recorded at their acquisition date fair value so a separate allowance is not initially recognized. An allowance is recorded subsequent to acquisition to the extent the reserve requirement exceeds the recorded fair value adjustment. The Company recorded provision for loan losses of $2.1 million in the first quarter of 2019, compared to $0.4 million in the fourth quarter of 2018 and $1.0 million in the first quarter of 2018.

1 A Non-GAAP financial measure. See “Non-GAAP Financial Information” below for reconciliation.

Asset Quality1

(dollars in thousands)

As of and for the Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2019

2018

2018

2018

2018

Portfolio loans

$

6,515,081

$

5,568,428

$

5,623,741

$

5,555,287

$

5,531,453

Non-performing loans

Non-accrual loans

36,230

34,997

40,395

25,215

32,588

Loans 90+ days past due

356

1,601

364

1,142

995

Non-performing loans, segregated by geography

Illinois/ Indiana

28,847

28,319

33,699

21,534

28,743

Missouri

6,593

7,242

6,222

3,338

3,641

Florida

1,146

1,037

838

1,485

1,199

Loans 30-89 days past due

10,780

7,121

8,189

10,017

9,506

Other non-performing assets

921

376

1,093

3,694

1,001

Non-performing assets to portfolio loans and non-performing assets

0.58

%

0.66

%

0.74

%

0.54

%

0.63

%

Allowance as a percentage of non-performing loans

139.17

%

138.39

%

129.40

%

202.24

%

156.77

%

Allowance for loan losses to portfolio loans

0.78

%

0.91

%

0.94

%

0.96

%

0.95

%

Net charge-offs

1,844

2,500

1,320

1,602

1,941

Provision for loan losses

2,111

405

758

2,258

1,008

1 Results are unaudited.

Fee-based Businesses

Revenues from trust fees, commissions and brokers’ fees, and remittance processing activities represented 49.4% of the Company’s non-interest income for the quarter ended March 31, 2019, providing a balance to revenue from traditional banking activities.

Trust fees and commissions and brokers’ fees were positively impacted as we built upon recent acquisitions and expanded market share, partially offset by a decline in farm management brokerage income due to timing of land sales. Trust fees and commissions and brokers’ fees were $9.0 million for the first quarter of 2019, an increase from $7.5 million for the fourth quarter 2018 and from $8.6 million for the first quarter of 2018. Net income from the wealth management segment was $2.6 million for the first quarter of 2019 compared to $2.0 million in the fourth quarter of 2018 and $2.8 million in the first quarter of 2018. First Busey’s wealth management division ended the first quarter of 2019 with $8.89 billion in assets under care.

Remittance processing revenue from the Company’s subsidiary, FirsTech, of $3.8 million for the first quarter of 2019 was steady compared to the fourth quarter of 2018 and increased from $3.4 million for the first quarter of 2018. The FirsTech operating segment generated net income of $1.0 million for the first quarter of 2019.

The mortgage line of business generated $1.9 million of revenue in the first quarter of 2019, an increase compared to $1.1 million of revenue in the fourth quarter of 2018 and $1.6 million of revenue in the first quarter of 2018, following a long period of restructuring and additional revenue from TheBANK.

Operating Efficiency

The efficiency ratio was 57.99% for the quarter ended March 31, 2019 compared to 56.57% for the quarter ended December 31, 2018 and 59.80% for the quarter ended March 31, 2018. The adjusted efficiency ratio3 was 56.43% for the quarter ended March 31, 2019, 55.49% for the quarter ended December 31, 2018, and 55.54% for the quarter ended March 31, 2018.

Specific areas of non-interest expense are as follows:

  • Salaries, wages and employee benefits were $32.3 million in the first quarter of 2019, an increase from $27.5 million in the fourth quarter of 2018 and $28.8 million from the first quarter of 2018. Banc Ed added 318 full time equivalents (“FTE”) at March 31, 2019, increasing the March 31, 2019 FTE to 1,589 compared to 1,270 at December 31, 2018 and 1,278 at March 31, 2018.

  • Data processing expense in the first quarter of 2019 of $4.4 million increased compared to $4.0 million in the fourth quarter of 2018 and $4.3 million in the first quarter of 2018. Variances are related to payment of deconversion expenses and data processing related to TheBANK.

Capital Strength

The Company's strong capital levels, coupled with its earnings, has allowed First Busey to provide a steady return to its stockholders through dividends. The Company will pay a cash dividend on April 26, 2019 of $0.21 per common share to stockholders of record as of April 19, 2019. The Company has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.

As of March 31, 2019, the Company continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. The Company’s tangible stockholders’ common equity3 (“TCE”) increased to $826.2 million at March 31, 2019, compared to $703.0 million at December 31, 2018 and $646.9 million at March 31, 2018. TCE represented 9.00% of tangible assets at March 31, 2019, compared to 9.49% at December 31, 2018 and 8.64% at March 31, 2018.3

3 Non-GAAP financial measures. See “Non-GAAP Financial Information” below for reconciliation.

Corporate Profile

As of March 31, 2019, First Busey Corporation (BUSE) was a $9.54 billion financial holding company headquartered in Champaign, Illinois.

Busey Bank, a wholly-owned bank subsidiary with total assets of $7.73 billion as of March 31, 2019, is headquartered in Champaign, Illinois and has forty-four banking centers serving Illinois, thirteen banking centers in the St. Louis, Missouri metropolitan area, five banking centers serving southwest Florida and a banking center in Indianapolis, Indiana. Through the Busey Wealth Management division, the Company provides asset management, investment and fiduciary services to individuals, businesses and foundations. As of March 31, 2019, assets under care were approximately $7.30 billion. Busey Bank owns a retail payment processing subsidiary, FirsTech, Inc., which processes approximately 28 million transactions per year using online bill payment, lockbox processing and walk-in payments at its 4,000 agent locations in 43 states. More information about FirsTech, Inc. can be found at firstechpayments.com.

Busey Bank was named among Forbes’ 2018 Best-In-State Banks—one of five in Illinois and 124 from across the country, equivalent to 2.2% of all banks. Best-In-State Banks are awarded for exceptional customer experiences as determined by a survey sample of 25,000+ banking customers who rated banks on trust, terms and conditions, branch services, digital services and financial advice.

TheBANK of Edwardsville, a wholly-owned bank subsidiary of the Company with total assets of $1.81 billion as of March 31, 2019, is headquartered in Edwardsville, Illinois and has nineteen banking centers and one loan production office in the greater St. Louis, MO-IL MSA. Through TheBANK of Edwardsville Wealth Management division, the Company provides asset management, investment and fiduciary services to individuals, businesses and foundations. As of March 31, 2019, assets under care were approximately $1.59 billion.

For more information about us, visit busey.com and 4thbank.com.

Contacts:

Robin N. Elliott, Chief Financial Officer
217-365-4120

Non-GAAP Financial Information

This press release contains certain financial information determined by methods other than GAAP. These measures include adjusted net income, adjusted return on average assets, adjusted net interest margin, adjusted efficiency ratio, tangible common equity, and tangible common equity to tangible assets. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions. Management also uses these measures for peer comparisons.

A reconciliation to what management believes to be the most directly comparable GAAP financial measures – net income in the case of adjusted net income and adjusted return on average assets, total net interest income, total non-interest income and total non-interest expense in the case of adjusted efficiency ratio, total stockholders’ equity in the case of the tangible book value per share – appears below. The Company believes the adjusted measures are useful for investors and management to understand the effects of certain non-recurring non-interest items and provide additional perspective on the Company’s performance over time as well as comparison to the Company’s peers.

These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates.

Reconciliation of Non-GAAP Financial Measures – Adjusted Net Income and Return on Average Assets

(dollars in thousands)

Three Months Ended

March 31,
2019

December 31,
2018

March 31,
2018

Net income

$

25,469

$

25,290

$

21,917

Acquisition expenses

Salaries, wages and employee benefits

-

-

1,233

Data processing

7

-

372

Other (includes professional and legal)

1,205

262

1,950

Other restructuring costs

Salaries, wages and employee benefits

-

640

417

Data processing

100

-

-

Other (includes professional and legal)

167

-

-

Related tax benefit

(334

)

(234

)

(967

)

Adjusted net income

$

26,614

$

25,958

$

24,922

Average total assets

$

8,865,642

$

7,846,154

$

7,663,899

Reported: Return on average assets1

1.17

%

1.28

%

1.16

%

Adjusted: Return on average assets 1

1.22

%

1.31

%

1.32

%

1 Annualized measure.


Reconciliation of Non-GAAP Financial Measures – Adjusted Net Interest Margin

(dollars in thousands)

Three Months Ended

March 31,
2019

December 31,
2018

March 31,
2018

Reported: Net interest income

$

68,383

$

60,503

$

59,757

Tax-equivalent adjustment

677

545

578

Purchase accounting accretion

(2,994

)

(1,852

)

(3,410

)

Adjusted: Net interest income

$

66,066

$

59,196

$

56,925

Average interest-earning assets

$

8,088,396

$

7,174,755

$

6,976,383

Reported: Net interest margin1

3.46

%

3.38

%

3.51

%

Adjusted: Net Interest margin1

3.31

%

3.27

%

3.31

%

1 Annualized measure.


Reconciliation of Non-GAAP Financial Measures – Adjusted Efficiency Ratio

(dollars in thousands)

Three Months Ended

March 31,
2019

December 31,
2018

March 31,
2018

Reported: Net Interest income

$

68,383

$

60,503

$

59,757

Tax- equivalent adjustment

677

545

578

Tax equivalent interest income

$

69,060

$

61,048

$

60,335

Reported: Non-interest income

25,945

22,852

22,486

Security gain net

(42

)

(171

)

-

Adjusted: Non-interest income

$

25,903

$

22,681

$

22,486

Reported: Non-interest expense

57,163

48,769

51,040

Amortization of intangible assets

(2,094

)

(1,404

)

(1,515

)

Non-operating adjustments:

Salaries, wages and employee benefits

-

(640

)

(1,650

)

Data processing

(107

)

-

(372

)

Other

(1,372

)

(262

)

(1,505

)

Adjusted: Non-interest expense

$

53,590

$

46,463

$

45,998

Reported: Efficiency ratio

57.99

%

56.57

%

59.80

%

Adjusted: Efficiency ratio

56.43

%

55.49

%

55.54

%


Reconciliation of Non-GAAP Financial Measures – Tangible common equity to tangible assets, Tangible book value per share, Return on average tangible common equity

(dollars in thousands)

As of and for the Three Months Ended

March 31,
2019

December 31,
2018

March 31,
2018

Total assets

$

9,537,334

$

7,702,357

$

7,778,746

Goodwill and other intangible assets, net

(377,739

)

(300,558

)

(304,897

)

Tax effect of other intangible assets, net

17,751

8,547

9,675

Tangible assets

$

9,177,346

$

7,410,346

$

7,483,524

Total stockholders’ equity

1,186,141

994,964

942,146

Goodwill and other intangible assets, net

(377,739

)

(300,558

)

(304,897

)

Tax effect of other intangible assets, net

17,751

8,547

9,675

Tangible common equity

$

826,153

$

702,953

$

646,924

Ending number of common shares outstanding

55,624,627

48,874,836

48,717,239

Tangible common equity to tangible assets1

9.00

%

9.49

%

8.64

%

Tangible book value per share

$

14.53

$

14.21

$

13.08

Average common equity

$

1,109,872

$

979,502

$

933,762

Average goodwill and intangibles, net

(352,587

)

(301,479

)

(306,968

)

Average tangible common equity

$

757,285

$

678,023

$

626,794

Reported: Return on average tangible common equity2

13.64

%

14.80

%

14.18

%

Adjusted: Return on average tangible common equity2,3

14.25

%

15.19

%

16.13

%

1 Tax-effected measure.

2 Annualized measure.

3 Calculated using adjusted net income.

Special Note Concerning Forward-Looking Statements

Statements made in this report, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and we undertake no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national and international economy (including the impact of tariffs, a U.S. withdrawal from or significant negotiation of trade agreements, trade wars and other changes in trade regulations); (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of the acquisition and the possibility that the transaction costs may be greater than anticipated; (x) unexpected outcomes of existing or new litigation involving the Company; (xi) changes in accounting policies and practices; and (xii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, and blizzards. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect its financial results, is included in the Company’s filings with the Securities and Exchange Commission.