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LegacyTexas Financial Group, Inc. Reports Second Quarter 2019 Earnings

PLANO, Texas, July 24, 2019 /PRNewswire/ -- LegacyTexas Financial Group, Inc. (LTXB) (the "Company"), the holding company for LegacyTexas Bank (the "Bank"), today announced net income of $27.0 million for the second quarter of 2019, a decrease of $2.1 million from the first quarter of 2019 and a decrease of $854,000 from the second quarter of 2018.  Core (non-GAAP) net income totaled $28.8 million for the second quarter of 2019, down $231,000 from the first quarter of 2019 and up $886,000 from the second quarter of 2018.  See "Supplemental Information- Non-GAAP Financial Measures" at the end of this document.

LegacyTexas Financial Group, Inc. is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas. LegacyTexas Bank operates 42 banking offices in the Dallas/Fort Worth Metroplex and surrounding counties. For more information, visit www.LegacyTexasFinancialGroup.com . (PRNewsFoto/) (PRNewsFoto/LegacyTexas Financial Group, Inc)

On June 17, 2019, the Company and Prosperity Bancshares, Inc.® ("Prosperity") jointly announced the signing of a definitive merger agreement pursuant to which the Company will merge with Prosperity.  Under the terms of the merger agreement, shareholders of the Company will receive 0.5280 shares of Prosperity common stock and $6.28 cash for each share of Company common stock.  The completion of the transaction is subject to certain conditions, including the approval by the Company shareholders and Prosperity shareholders and customary regulatory approvals.  For additional information regarding the Company's proposed merger with Prosperity, see the Company's Current Report filed on Form 8-K with the SEC on June 17, 2019.

"We continue to grow our franchise and serve our customers and communities," said President and CEO Kevin Hanigan.  "We grew loans by $581.9 million (including Warehouse Purchase Program) in the second quarter, while our non-interest-bearing deposits grew by $94.5 million.  Additionally, the talented bankers at both LegacyTexas and Prosperity Bank have begun the process of preparing for the merger of the two banks, which we hope to consummate in the fourth quarter of 2019."

Second Quarter 2019 Performance Highlights

  • Assets of $9.94 billion generated basic earnings per share for the second quarter of 2019 of $0.57 on a GAAP basis and $0.61 on a core (non-GAAP) basis.*
  • Gross loans held for investment at June 30, 2019, excluding Warehouse Purchase Program loans, grew $135.3 million, or 1.9%, from March 31, 2019, which includes linked-quarter increases in all loan portfolios.
  • Warehouse Purchase Program loans at June 30, 2019 grew $446.5 million, or 40.7%, from March 31, 2019.
  • The balance of non-interest-bearing demand deposits at June 30, 2019 increased by $94.5 million, or 5.4%, from March 31, 2019, while the average balance of these deposits for the second quarter of 2019 grew by $123.1 million, or 7.3%, compared to the linked quarter.
  • Net interest income totaled $85.6 million for the second quarter of 2019, an increase of $4.4 million, or 5.4%, from the quarter ended March 31, 2019.

*See the section labeled "Supplemental Information- Non-GAAP Financial Measures" at the end of this document.

Financial Highlights



At or For the Quarters Ended

(unaudited)

June 30, 2019


March 31, 2019


June 30, 2018


(Dollars in thousands, except per share amounts)

Net interest income

$

85,554



$

81,164



$

83,929


Provision for credit losses

16,100



9,800



17,478


Non-interest income

12,232



9,894



10,852


Non-interest expense

47,526



44,307



42,191


Income tax expense

7,177



7,871



7,275


Net income

$

26,983



$

29,080



$

27,837








Basic earnings per common share

$

0.57



$

0.61



$

0.59


Basic core (non-GAAP) earnings per common share1

$

0.61



$

0.62



$

0.59


Weighted average common shares outstanding - basic

47,383,314



47,246,282



47,000,405


Estimated Tier 1 common equity risk-based capital ratio2

10.48

%


10.92

%


9.78

%

Total equity to total assets

11.50

%


12.00

%


10.83

%

Tangible common equity to tangible assets - Non-GAAP1

9.88

%


10.28

%


9.07

%


See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.

Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.

Basic earnings per share for the quarter ended June 30, 2019 was $0.57, a decrease of $0.04 from the first quarter of 2019 and a decrease of $0.02 from the second quarter of 2018.  Basic core (non-GAAP) earnings per share for the second quarter of 2019 was $0.61, a decrease of $0.01 from the first quarter of 2019 and an increase of $0.02 from the second quarter of 2018.

Net Interest Income and Net Interest Margin



For the Quarters Ended

(unaudited)

June 30, 2019


March 31, 2019


June 30, 2018

Interest income:

(Dollars in thousands)

Loans held for investment, excluding Warehouse Purchase Program loans

$

92,903



$

91,360



$

86,105


Warehouse Purchase Program loans

14,927



8,771



12,137


Loans held for sale

324



170



328


Securities

4,553



4,526



4,324


Interest-earning deposit accounts

1,370



1,277



1,097


Total interest income

$

114,077



$

106,104



$

103,991


Net interest income

$

85,554



$

81,164



$

83,929


Net interest margin

3.77

%


3.89

%


3.93

%

Selected average balances:






Total earning assets

$

9,091,192



$

8,433,085



$

8,566,131


Total loans held for investment

8,158,810



7,528,531



7,636,235


Total securities

668,948



670,599



667,183


Total deposits

7,134,996



6,754,156



6,859,944


Total borrowings

1,101,559



882,061



1,018,945


Total non-interest-bearing demand deposits

1,812,042



1,688,937



1,694,082


Total interest-bearing liabilities

6,424,513



5,947,280



6,184,807


Net interest income for the quarter ended June 30, 2019 was $85.6 million, a $4.4 million, or 5.4%, increase from the first quarter of 2019 and a $1.6 million, or 1.9%, increase from the second quarter of 2018.  The $4.4 million increase from the first quarter of 2019 was primarily driven by increased volume in Warehouse Purchase Program and commercial real estate loans compared to the linked quarter.  Interest income earned on Warehouse Purchase Program loans increased by $6.2 million from the first quarter of 2019, as the average balance increased by $529.2 million, which was partially offset by a 13 basis point decrease in the average yield earned compared to the first quarter of 2019.  A $71.1 million increase in the average balance of the commercial real estate portfolio from the first quarter of 2019, as well as a three basis point increase in the average yield, resulted in a $1.6 million increase in interest income.  Interest income earned on the construction and land portfolio increased by $254,000 from the first quarter of 2019, as the average balance increased by $9.5 million and the average yield increased by ten basis points, while interest income earned on the consumer real estate portfolio increased by $234,000, driven by a $30.5 million linked-quarter increase in the average balance.  The average balance of commercial and industrial loans decreased by $2.2 million from the first quarter of 2019, resulting in a $573,000 decrease in interest income.  Interest income on loans for the second quarter of 2019 included $237,000 in accretion of purchase accounting fair value adjustments on acquired loans, which primarily consisted of $61,000 on acquired commercial real estate loans, $43,000 on acquired commercial and industrial loans and $133,000 on acquired consumer loans.

The $1.6 million increase in net interest income compared to the second quarter of 2018 was primarily due to a $9.6 million increase in interest income on loans, which was driven by higher yields earned on all loan portfolios, with the exception of the other consumer loan portfolio and loans held for sale, as well as increased volume in all loan portfolios.  The average balance of Warehouse Purchase Program loans increased by $178.0 million from the second quarter of 2018, while the average yield earned on this portfolio increased by 25 basis points, resulting in a $2.8 million increase in interest income compared to the second quarter of 2018.  The average balance of consumer real estate loans increased by $169.1 million from the second quarter of 2018, while the average yield earned on this portfolio increased by 11 basis points, which led to a $2.4 million increase in interest income.   A $64.0 million increase in the average balance of commercial real estate loans compared to the second quarter of 2018, as well as a 12 basis point increase in the average yield, resulted in a $1.8 million increase in interest income. The average balance of commercial and industrial loans increased by $83.3 million from the second quarter of 2018, while the average yield earned on this portfolio increased by ten basis points from the same period, resulting in a $1.7 million increase in interest income.

Interest expense for the quarter ended June 30, 2019 increased by $3.6 million, or 14.4%, compared to the linked quarter, which was primarily due to increases of $108.4 million and $94.0 million in the average balances of time and savings and money market deposits, respectively, compared to the first quarter of 2019, as well as an increase of $219.5 million in the average balance of borrowings.  Additionally, higher average rates paid on savings, money market and time deposits also contributed to the linked-quarter increase in interest expense. A five basis point decrease in the average rate paid on interest-bearing demand deposits compared to the linked quarter partially offset a $55.4 million increase in the average balance of interest-bearing demand deposits.  The average rate paid on borrowings decreased by 15 basis points from the first quarter of 2019, which partially offset the linked-quarter increase in interest expense related to the increase in average borrowing balances.

Compared to the second quarter of 2018, interest expense for the quarter ended June 30, 2019 increased by $8.5 million, or 42.2%, primarily due to higher average savings and money market, time deposit, and borrowing rates, as well as a $252.5 million increase in the average balance of time deposits.   A 17 basis point decrease in the average rate paid on interest-bearing demand deposits compared to the second quarter of 2018, as well as a $99.0 million decrease in the average balance of these deposits, partially offset these year-over-year increases in interest expense.  A 45 basis point increase in the average rate paid on borrowings compared to the second quarter of 2018, as well as an $82.6 million increase in the average balance, resulted in a $1.7 million year-over-year increase in interest expense on borrowed funds.

The net interest margin for the second quarter of 2019 was 3.77%, a 12 basis point decrease from the first quarter of 2019 and a 16 basis point decrease from the second quarter of 2018.  The average yield on earning assets for the second quarter of 2019 was 5.03%, a six basis point decrease from the first quarter of 2019 and a 16 basis point increase from the second quarter of 2018.  The cost of deposits for the second quarter of 2019 was 1.15%, up six basis points from the linked quarter and up 35 basis points from the second quarter of 2018.

Non-interest Income

Non-interest income for the second quarter of 2019 was $12.2 million, a $2.3 million, or 23.6%, increase from the first quarter of 2019 and a $1.4 million, or 12.7%, increase from the second quarter of 2018.  Service charges and other fees increased by $2.6 million compared to the first quarter of 2019, primarily resulting from higher title company income and commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees), as well as increased debit card interchange and Warehouse Purchase Program income.  Net gains on the sale of mortgage loans held for sale during the second quarter of 2019 increased by $1.4 million compared to the linked quarter, which included gains recognized on $74.8 million of consumer real estate loans that were sold or committed for sale, fair value changes on mortgage derivatives and mortgage fees collected during the second quarter of 2019, compared to $32.6 million for the first quarter of 2019.  Other non-interest income for the second quarter of 2019 included a $1.2 million net decrease in the value of investments in community development-oriented private equity funds used for Community Reinvestment Act purposes (the "CRA Funds"), down from a $21,000 net increase in the CRA Funds for the first quarter of 2019, as well as a $366,000 interest payment received from the Internal Revenue Service in the first quarter of 2019 related to a prior year tax refund, with no comparable payment received in the second quarter of 2019.

The $1.4 million increase in non-interest income from the second quarter of 2018 was primarily due to a $1.2 million increase in net gains on the sale of mortgage loans held for sale, related to $74.8 million of consumer real estate loans that were sold or committed for sale, fair value changes on mortgage derivatives and mortgage fees collected during the 2019 period, compared to $50.8 million for the 2018 period.  Service charges and other fees increased by $1.0 million from the second quarter of 2018, which was driven by higher title company income and commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees), as well as increased debit card interchange income.  Other non-interest income for the second quarter of 2019 included a $1.2 million net decrease in the CRA Funds, down from a $15,000 net decrease in the CRA Funds for the second quarter of 2018.

Non-interest Expenses

Non-interest expense for the second quarter of 2019 was $47.5 million, up $3.2 million, or 7.3%, from the first quarter of 2019 and up $5.3 million, or 12.6%, from the second quarter of 2018.  The second quarter of 2019 included $2.4 million in merger costs with no comparable charges in the first quarter of 2019, related to the proposed merger with Prosperity, which was announced on June 17, 2019.  Outside professional services expense for the second quarter of 2019  increased by $389,000 from the first quarter of 2019, primarily due to higher legal expenses, while other non-interest expense increased by $371,000 from the linked quarter, primarily due to higher lending and recruiting expenses.  These linked-quarter increases in non-interest expense were partially offset by a $285,000 decline in salaries and employee benefits expense from the first quarter of 2019, which was driven by lower share-based compensation expense in the second quarter of 2019 related to fluctuations in the Company's share price, as well as decreased payroll taxes related to Social Security wage base limits starting over at the beginning of the year, which increased salary expense in the first quarter of 2019.  Additionally, in the second quarter of 2019, deferred salary costs related to loan originations that will be accounted for over the lives of the related loans increased compared to the linked quarter, which lowered salary expense for the current period.

The $5.3 million increase in non-interest expense from the second quarter of 2018 was primarily due to $2.4 million in merger costs with no comparable charges in the second quarter of 2018, related to the above-mentioned proposed merger with Prosperity, as well as a $2.3 million increase in salaries and employee benefits expense, which was primarily related to higher mortgage commissions paid in the 2019 period attributable to increased mortgage loan production, as well as higher share-based compensation expense in the 2019 period related to fluctuations in the Company's share price.  Additionally, merit increases granted in the 2019 period also contributed to the increased salary expense compared to the second quarter of 2018.  Data processing expense increased by $594,000 from the second quarter of 2018 due to system upgrades, technology refreshments and outsourcing certain segments of its data processing. These increases in non-interest expense compared to the 2018 period were partially offset by a $376,000 decrease in advertising expense, primarily due to a lower number of events, media advertisements and sponsorships in the second quarter of 2019.

Financial Condition - Loans

Gross loans held for investment at June 30, 2019, excluding Warehouse Purchase Program loans, grew $135.3 million from March 31, 2019, which included growth in all loan portfolios.  At June 30, 2019, commercial real estate and consumer real estate loans increased by $57.9 million and $37.3 million, respectively, from March 31, 2019, while commercial and industrial and construction and land loans increased by $32.2 million and $6.0 million, respectively, for the same period.

Compared to June 30, 2018, gross loans held for investment at June 30, 2019, excluding Warehouse Purchase Program loans, grew $408.9 million, which included growth in all loan portfolios.  Consumer real estate and commercial real estate loans increased by $172.7 million and $159.4 million, respectively, at June 30, 2019, compared to June 30, 2018, while commercial and industrial loans increased by $51.0 million from the same date.  Additionally, construction and land and other consumer loans increased by $22.7 million and $3.1 million, respectively, compared to June 30, 2018.

At June 30, 2019, Warehouse Purchase Program loans increased by $446.5 million compared to March 31, 2019 and by $251.6 million compared to June 30, 2018.

Reserve-based energy loans, which are secured by deeds of trust on properties containing proven oil and natural gas reserves and included in the Company's commercial and industrial loan portfolio, totaled $518.6 million at June 30, 2019, up $18.8 million from $499.8 million at March 31, 2019 and up $31.8 million from $486.8 million at June 30, 2018.  In addition to reserve-based energy loans, the Company has loans categorized as "Midstream and Other," which are typically related to the transmission of oil and natural gas and would only be indirectly impacted by declining commodity prices.  At June 30, 2019, "Midstream and Other" loans had a total outstanding balance of $20.6 million, down $1.5 million from $22.1 million at March 31, 2019 and down $8.1 million from $28.7 million at June 30, 2018.

Financial Condition - Deposits

Total deposits at June 30, 2019 decreased by $21.6 million from March 31, 2019.  The growth in non-interest-bearing demand and savings and money market deposits of $94.5 million and $56.7 million, respectively, was more than offset by declines in time and interest-bearing demand deposits of $143.4 million and $29.5 million, respectively.

Compared to June 30, 2018, total deposits increased by $174.4 million, which included growth in non-interest-bearing demand and time deposits of $125.8 million and $91.9 million, respectively, while savings and money market and interest-bearing demand deposits decreased by $31.1 million and $12.3 million, respectively.  At June 30, 2019, non-interest-bearing demand deposits totaled 26.2% of total deposits, compared to 25.0% of total deposits at June 30, 2018.

Credit Quality



At or For the Quarters Ended

(unaudited)

June 30, 2019


March 31, 2019


June 30, 2018


(Dollars in thousands)

Net charge-offs (recoveries)

$

1,434



$

(263)



$

27,663


Net charge-offs (recoveries)/Average loans held for investment, excluding Warehouse Purchase Program loans

0.08

%


(0.02)

%


1.69

%

Net charge-offs (recoveries)/Average loans held for investment

0.07



(0.01)



1.45


Provision for credit losses

$

16,100



$

9,800



$

17,478


Non-performing loans ("NPLs")

62,056



61,028



19,610


NPLs/Total loans held for investment, excluding Warehouse Purchase Program loans

0.88

%


0.88

%


0.29

%

NPLs/Total loans held for investment

0.72



0.76



0.25


Non-performing assets ("NPAs")

$

62,640



$

61,810



$

26,951


NPAs to total assets

0.63

%


0.66

%


0.29

%

NPAs/Loans held for investment and foreclosed assets, excluding Warehouse Purchase Program loans

0.88



0.89



0.40


NPAs/Loans held for investment and foreclosed assets

0.73



0.77



0.34


Allowance for loan losses

$

92,219



$

77,530



$

64,445


Allowance for loan losses/Total loans held for investment, excluding Warehouse Purchase Program loans

1.30

%


1.12

%


0.97

%

Allowance for loan losses/Total loans held for investment

1.07



0.96



0.81


Allowance for loan losses/Total loans held for investment, excluding acquired loans & Warehouse Purchase Program loans1

1.35



1.16



1.02


Allowance for loan losses/NPLs

148.61



127.04



328.63



Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value.

The Company recorded a provision for credit losses of $16.1 million for the quarter ended June 30, 2019, compared to $9.8 million for the quarter ended March 31, 2019 and $17.5 million for the quarter ended June 30, 2018.  The increase in provision expense on a linked-quarter basis was primarily due to increased specific reserves allocated to the Company's one remaining corporate healthcare finance relationship, which totaled $19.9 million at June 30, 2019, and the Company's impaired energy loans, which totaled $19.9 million at June 30, 2019.  These impaired corporate healthcare finance and energy loans have been included in the estimated pre-tax gross credit mark of $175.0 million that was disclosed as an assumption in the merger with Prosperity, as reported in the Company's investor presentation filed under a Current Report on Form 8-K with the SEC on June 17, 2019.

The decrease in provision expense on a year-over-year basis was primarily due to decreased net charge-offs during the quarter ended June 30, 2019.  Net charge-offs totaled $1.4 million for the three months ended June 30, 2019, compared to net charge-offs totaling $27.7 million for the three months ended June 30, 2018.

The below table shows criticized (rated "special mention") and classified (rated "substandard" or "doubtful") loans at June 30, 2019, March 31, 2019 and June 30, 2018.


June 30,

2019


March 31,

2019


June 30,

 2018


Linked-Quarter

 Change


Year-over-Year

 Change


(Dollars in thousands)

Commercial real estate

$

18,074



$

20,561



$

25,540



$

(2,487)



$

(7,466)


Commercial and industrial, excluding energy

9,275



8,631



11,065



644



(1,790)


Energy

44,644



48,434



24,975



(3,790)



19,669


Consumer

2,711



2,761



1,501



(50)



1,210


Total criticized (all performing)

$

74,704



$

80,387



$

63,081



$

(5,683)



$

11,623












Commercial real estate

$

1,421



$

1,442



$

3,846



$

(21)



$

(2,425)


Commercial and industrial, excluding energy

869



1,000



1,234



(131)



(365)


Energy

70,775



46,095



28,804



24,680



41,971


Consumer

2,688



1,316



1,993



1,372



695


Total classified (performing)

75,753



49,853



35,877



25,900



39,876












Commercial real estate

7,293



6,623



3,656



670



3,637


Commercial and industrial, excluding energy

28,471



27,395



8,860



1,076



19,611


Energy

19,896



21,866



1,365



(1,970)



18,531


Construction and land

228







228



228


Consumer

6,168



5,144



5,729



1,024



439


Total classified (non-performing)

62,056



61,028



19,610



1,028



42,446












Total classified loans

$

137,809



$

110,881



$

55,487



$

26,928



$

82,322


About LegacyTexas Financial Group, Inc.

LegacyTexas Financial Group, Inc. is the holding company for LegacyTexas Bank, a commercially oriented community bank based in Plano, Texas. LegacyTexas Bank operates 42 banking offices in the Dallas/Fort Worth Metroplex and surrounding counties. For more information, please visit www.LegacyTexasFinancialGroup.com or www.LegacyTexas.com.

This document and other filings by LegacyTexas Financial Group, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), as well as press releases or other public or stockholder communications released by the Company, may contain forward-looking statements, including, but not limited to, (i) statements regarding the financial condition, results of operations and business of the Company, (ii) statements about the Company's plans, objectives, expectations and intentions and other statements that are not historical facts and (iii) other statements identified by the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions that are intended to identify "forward-looking statements", within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current beliefs and expectations of the Company's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

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: the expected cost savings, synergies and other financial benefits from our proposed merger with Prosperity might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; the requisite shareholder and regulatory approvals and other closing conditions for the proposed merger of the Company and Prosperity may be delayed or may not be obtained or the merger agreement may be terminated; business disruption may occur following or in connection with the proposed merger of the Company and Prosperity; the Company's businesses may experience disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities; the diversion of managements' attention from ongoing business operations and opportunities as a result of the proposed merger or otherwise; changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; fluctuations in the price of oil, natural gas and other commodities; competition; changes in management's business strategies; changes in the regulatory and tax environments in which the Company operates, including the impact of the "Tax Cuts and Jobs Act" (the "TCJA") on the Company's deferred tax asset, and the anticipated impact of the TCJA on the Company's future earnings; and other factors set forth in the Company's filings with the SEC.

The factors listed above could materially affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. When considering forward-looking statements, keep in mind these risks and uncertainties. Undue reliance should not be placed on any forward-looking statement, which speaks only as of the date made. Refer to the Company's periodic and current reports filed with the SEC for specific risks that could cause actual results to be significantly different from those expressed or implied by any forward-looking statements.

Additional Information About the Merger and Where to Find It

In connection with the proposed merger of the Company into Prosperity, Prosperity will file with the SEC a registration statement on Form S-4 to register the shares of Prosperity Common Stock to be issued to the stockholders of the Company. The registration statement will include a joint proxy statement/prospectus which will be sent to the stockholders of the Company and Prosperity seeking their approval of the proposed transaction.

WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PROSPERITY, THE COMPANY AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. Documents filed with the SEC by Prosperity will be available free of charge by directing a request by telephone or mail to Prosperity Bancshares, Inc., Prosperity Bank Plaza, 4295 San Felipe, Houston, Texas 77027 Attn: Investor Relations, 281-269-7199 and documents filed with the SEC by the Company will be available free of charge by directing a request by telephone or mail to LegacyTexas Financial Group, Inc., 5851 Legacy Circle, Suite 1200, Plano, Texas 75024, 972-578-5000.

Participants in the Solicitation

Prosperity, the Company and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Prosperity and stockholders of the Company in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about Prosperity and its directors and executive officers may be found in the definitive proxy statement of Prosperity relating to its 2019 Annual Meeting of Shareholders filed with the SEC on March 14, 2019, and other documents filed by Prosperity with the SEC. Additional information about the Company and its directors and executive officers may be found in the definitive proxy statement of the Company relating to its 2019 Annual Meeting of Stockholders filed with the SEC on April 12, 2019, and other documents filed by the Company with the SEC. These documents can be obtained free of charge from the sources described above.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to and does not constitute an offer to subscribe for, buy or sell, or the solicitation of an offer to subscribe for, buy or sell, or an invitation to subscribe for, buy or sell any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, invitation, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

LegacyTexas Financial Group, Inc. Consolidated Balance Sheets (unaudited)


(Dollars in thousands)

ASSETS

June 30,

2019


March 31,

2019


December 31,

2018


September 30,

2018


June 30,

2018

Cash and due from financial institutions

$

56,949



$

55,472



$

60,416



$

64,681



$

60,104


Short-term interest-bearing deposits in other financial institutions

206,894



219,051



208,777



189,634



199,807


Total cash and cash equivalents

263,843



274,523



269,193



254,315



259,911


Securities available for sale, at fair value

459,749



479,426



471,746



455,454



445,613


Securities held to maturity

127,836



135,276



146,046



145,148



155,252


Total securities

587,585



614,702



617,792



600,602



600,865


Loans held for sale

46,571



11,380



23,193



22,175



33,548


Loans held for investment:










Loans held for investment - Warehouse Purchase Program

1,542,684



1,096,160



960,404



1,054,505



1,291,129


Loans held for investment

7,080,075



6,944,731



6,790,723



6,764,052



6,671,139


Gross loans

8,669,330



8,052,271



7,774,320



7,840,732



7,995,816


Less: allowance for loan losses and deferred fees on loans held for investment

(80,468)



(66,712)



(57,031)



(56,499)



(55,321)


Net loans

8,588,862



7,985,559



7,717,289



7,784,233



7,940,495


FHLB stock and other restricted securities, at cost

79,195



56,044



56,226



60,596



66,061


Bank-owned life insurance

59,724



59,377



59,036



58,692



58,345


Premises and equipment, net

106,313



107,684



73,073



72,291



70,893


Goodwill

178,559



178,559



178,559



178,559



178,559


Other assets

71,853



69,624



79,974



73,504



73,957


Total assets

$

9,935,934



$

9,346,072



$

9,051,142



$

9,082,792



$

9,249,086












LIABILITIES AND SHAREHOLDERS' EQUITY





Non-interest-bearing demand

$

1,847,229



$

1,752,694



$

1,773,762



$

1,798,109



$

1,721,380


Interest-bearing demand

855,026



884,494



826,755



780,474



867,323


Savings and money market

2,548,966



2,492,226



2,455,787



2,562,399



2,580,017


Time

1,804,569



1,948,011



1,785,411



1,638,776



1,712,628


Total deposits

7,055,790



7,077,425



6,841,715



6,779,758



6,881,348


FHLB advances

1,384,765



820,084



825,409



932,317



1,065,941


Repurchase agreements

52,414



37,277



50,340



40,408



41,330


Subordinated debt

135,257



135,135



135,012



134,890



134,767


Accrued expenses and other liabilities

165,063



155,064



104,299



155,820



124,250


Total liabilities

8,793,289



8,224,985



7,956,775



8,043,193



8,247,636


Common stock

488



487



485



485



483


Additional paid-in capital

628,730



625,405



619,983



617,270



611,967


Retained earnings

523,693



508,887



491,948



444,848



409,765


Accumulated other comprehensive income (loss), net

860



(2,433)



(6,658)



(11,481)



(9,109)


Unearned Employee Stock Ownership Plan (ESOP) shares

(11,126)



(11,259)



(11,391)



(11,523)



(11,656)


Total shareholders' equity

1,142,645



1,121,087



1,094,367



1,039,599



1,001,450


Total liabilities and shareholders' equity

$

9,935,934



$

9,346,072



$

9,051,142



$

9,082,792



$

9,249,086


 

LegacyTexas Financial Group, Inc.

Consolidated Quarterly Statements of Income (unaudited)



For the Quarters Ended


Second Quarter 2019 Compared to:


Jun 30,

2019


Mar 31,

2019


Dec 31,

2018


Sep 30,

2018


Jun 30,

2018


First Quarter

 2019


Second Quarter
2018

Interest and dividend income


(Dollars in thousands)




Loans, including fees

$

108,154



$

100,301



$

101,031



$

102,267



$

98,570



$

7,853


7.8

%


$

9,584


9.7

%

Taxable securities

3,460



3,602



3,463



3,254



3,132



(142)


(3.9)



328


10.5


Nontaxable securities

410



343



595



614



641



67


19.5



(231)


(36.0)


Interest-bearing deposits in other financial institutions

1,370



1,277



1,507



1,368



1,097



93


7.3



273


24.9


FHLB and Federal Reserve Bank stock and other

683



581



582



644



551



102


17.6



132


24.0



114,077



106,104



107,178



108,147



103,991



7,973


7.5



10,086


9.7


Interest expense













Deposits

20,444



18,215



16,634



15,077



13,732



2,229


12.2



6,712


48.9


FHLB advances

5,794



4,456



4,000



5,198



4,131



1,338


30.0



1,663


40.3


Repurchase agreements and other borrowings

2,285



2,269



2,245



2,205



2,199



16


0.7



86


3.9



28,523



24,940



22,879



22,480



20,062



3,583


14.4



8,461


42.2


Net interest income

85,554



81,164



84,299



85,667



83,929



4,390


5.4



1,625


1.9


Provision for credit losses

16,100



9,800





2,656



17,478



6,300


64.3



(1,378)


(7.9)


Net interest income after provision for credit losses

69,454



71,364



84,299



83,011



66,451



(1,910)


(2.7)



3,003


4.5


Non-interest income













Service charges and other fees

9,882



7,255



9,923



8,626



8,844



2,627


36.2



1,038


11.7


Net gain on sale of mortgage loans held for sale

2,879



1,525



1,499



1,597



1,668



1,354


88.8



1,211


72.6


Bank-owned life insurance income

489



482



482



482



479



7


1.5



10


2.1


Net gain (loss) on securities transactions



6





(10)





(6)


(100.0)





Gain (loss) on sale and disposition of assets

18



(14)



(56)



977



(153)



32


N/M



171


N/M


Other

(1,036)



640



416



1,555



14



(1,676)


N/M



(1,050)


N/M



12,232



9,894



12,264



13,227



10,852



2,338


23.6



1,380


12.7


















Non-interest expense

(Dollars in thousands)


Salaries and employee benefits

26,586



26,871



23,728



25,053



24,313



(285)


(1.1)



2,273


9.3


Merger costs

2,362











2,362


100.0



2,362


100.0


Advertising

982



903



1,301



824



1,358



79


8.7



(376)


(27.7)


Occupancy and equipment

3,950



3,899



3,843



3,960



3,980



51


1.3



(30)


(0.8)


Outside professional services

1,674



1,285



2,021



1,151



1,382



389


30.3



292


21.1


Regulatory assessments

831



618



886



750



731



213


34.5



100


13.7


Data processing

5,739



5,933



6,168



5,362



5,145



(194)


(3.3)



594


11.5


Office operations

2,568



2,335



2,249



2,232



2,224



233


10.0



344


15.5


Other

2,834



2,463



2,672



2,860



3,058



371


15.1



(224)


(7.3)



47,526



44,307



42,868



42,192



42,191



3,219


7.3



5,335


12.6


Income before income tax expense (benefit)

34,160



36,951



53,695



54,046



35,112



(2,791)


(7.6)



(952)


(2.7)


Income tax expense (benefit)

7,177



7,871



(4,074)



11,225



7,275



(694)


(8.8)



(98)


(1.3)


Net income

$

26,983



$

29,080



$

57,769



$

42,821



$

27,837



$

(2,097)


(7.2)

%


$

(854)


(3.1)

%


N/M - Not meaningful

 

LegacyTexas Financial Group, Inc.

Selected Quarterly Financial Highlights (unaudited)



At or For the Quarters Ended


June 30,

2019


March 31,

2019


June 30,

2018

SHARE DATA:

(Dollars in thousands, except per share amounts)

Weighted average common shares outstanding - basic

47,383,314



47,246,282



47,000,405


Weighted average common shares outstanding - diluted

47,923,391



47,835,693



47,618,157


Shares outstanding at end of period

48,833,238



48,704,070



48,311,220


Income available to common shareholders1

$

26,837



$

28,955



$

27,770


Basic earnings per common share

0.57



0.61



0.59


Basic core (non-GAAP) earnings per common share2

0.61



0.62



0.59


Diluted earnings per common share

0.56



0.61



0.58


Dividends declared per share

0.25



0.25



0.16


Total shareholders' equity

1,142,645



1,121,087



1,001,450


Common shareholders' equity per share (book value per share)

23.40



23.02



20.73


Tangible book value per share - Non-GAAP2

19.74



19.35



17.03


Market value per share for the quarter:






High

41.22



43.88



43.92


Low

36.50



33.08



38.80


Close

40.71



37.39



39.02


KEY RATIOS:






Return on average common shareholders' equity

9.52

%


10.50

%


11.20

%

Core (non-GAAP) return on average common shareholders' equity2

10.18



10.50



11.25


Return on average assets

1.13



1.31



1.24


Core (non-GAAP) return on average assets2

1.21



1.31



1.24


Efficiency ratio (GAAP basis)

48.60



48.66



44.51


Core (non-GAAP) efficiency ratio2

46.19



48.66



44.44


Estimated Tier 1 common equity risk-based capital ratio3

10.48



10.92



9.78


Estimated total risk-based capital ratio3

12.97



13.39



12.14


Estimated Tier 1 risk-based capital ratio3

10.62



11.06



9.93


Estimated Tier 1 leverage ratio3

10.42



10.98



9.56


Total equity to total assets

11.50



12.00



10.83


Tangible equity to tangible assets - Non-GAAP2

9.88



10.28



9.07


Number of employees - full-time equivalent

883



875



847















Net of distributed and undistributed earnings to participating securities.

See the section labeled "Supplemental Information - Non-GAAP Financial Measures" at the end of this document.

Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.

 

LegacyTexas Financial Group, Inc.

Selected Loan Data (unaudited)



At or for the Quarter Ended


June 30,
2019


March 31,
2019


December 31,
2018


September 30,
2018


June 30,
2018

Loans held for investment:

(Dollars in thousands)



Commercial real estate

$

3,180,582



$

3,122,726



$

3,026,754



$

3,012,352



$

3,021,148


Warehouse Purchase Program

1,542,684



1,096,160



960,404



1,054,505



1,291,129


Commercial and industrial

2,102,917



2,070,715



2,057,791



2,111,510



2,051,955


Construction and land

288,491



282,463



270,629



278,278



265,745


Consumer real estate

1,460,417



1,423,095



1,390,378



1,318,038



1,287,703


Other consumer

47,668



45,732



45,171



43,874



44,588


Gross loans held for investment

$

8,622,759



$

8,040,891



$

7,751,127



$

7,818,557



$

7,962,268


Non-performing assets:









Commercial real estate

$

7,293



$

6,623



$

159



$

3,739



$

3,656


Commercial and industrial

48,367



49,261



16,710



7,178



10,225


Construction and land

228










Consumer real estate

6,144



5,123



5,506



6,617



5,652


Other consumer

24



21



46



50



77


Total non-performing loans

62,056



61,028



22,421



17,584



19,610


Foreclosed assets

584



782



1,333



698



7,341


Total non-performing assets

$

62,640



$

61,810



$

23,754



$

18,282



$

26,951


Total non-performing assets to total assets

0.63

%


0.66

%


0.26

%


0.20

%


0.29

%

Total non-performing loans to total loans held for investment, excluding Warehouse Purchase Program loans

0.88

%


0.88

%


0.33

%


0.26

%


0.29

%

Total non-performing loans to total loans held for investment

0.72

%


0.76

%


0.29

%


0.22

%


0.25

%

Allowance for loan losses to non-performing loans

148.61

%


127.04

%


300.74

%


377.35

%


328.63

%

Allowance for loan losses to total loans held for investment, excluding Warehouse Purchase Program loans

1.30

%


1.12

%


0.99

%


0.98

%


0.97

%

Allowance for loan losses to total loans held for investment

1.07

%


0.96

%


0.87

%


0.85

%


0.81

%

Allowance for loan losses to total loans held for investment, excluding acquired loans and Warehouse Purchase Program loans 1

1.35

%


1.16

%


1.04

%


1.03

%


1.02

%

Troubled debt restructured loans ("TDRs"):

 (Dollars in thousands)



Performing TDRs:










Commercial real estate

$

132



$

134



$

136



$

139



$

141


Consumer real estate

704



722



788



786



561


Other consumer

1



1



2



4



9


Total performing TDRs

$

837



$

857



$

926



$

929



$

711


Non-performing TDRs:2









Commercial real estate

$

27



$

29



$

31



$

3,605



$

33


Commercial and industrial

7,870



7,999



661



2,299



2,095


Consumer real estate

1,037



447



467



495



789


Other consumer

4



4



1



2



7


Total non-performing TDRs

$

8,938



$

8,479



$

1,160



$

6,401



$

2,924


Allowance for loan losses:








Balance at beginning of period

$

77,530



$

67,428



$

66,354



$

64,445



$

74,508


Provision expense for loans

16,123



9,839





2,700



17,600


Charge-offs

(1,624)



(359)



(2,590)



(922)



(27,737)


Recoveries

190



622



3,664



131



74


Balance at end of period

$

92,219



$

77,530



$

67,428



$

66,354



$

64,445


Net charge-offs (recoveries):







Commercial real estate

$



$



$



$



$

236


Commercial and industrial

1,236



(463)



(1,355)



537



27,261


Consumer real estate

(4)



3



37



47



(9)


Other consumer

202



197



244



207



175


Total net charge-offs (recoveries)

$

1,434



$

(263)



$

(1,074)



$

791



$

27,663


Allowance for off-balance sheet lending-related commitments





Provision expense (benefit) for credit losses

$

(23)



$

(39)



$



$

(44)



$

(122)



Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value.

Non-performing TDRs are included in the non-performing assets reported above.

 

LegacyTexas Financial Group, Inc.

Average Balances and Yields/Rates (unaudited)



For the Quarters Ended


June 30,
2019


March 31,
2019


December 31,
2018


September 30,
2018


June 30,
2018

Loans:

(Dollars in thousands)

Commercial real estate

$

3,119,147



$

3,048,087



$

2,977,919



$

3,016,889



$

3,055,139


Warehouse Purchase Program

1,253,262



724,070



864,012



1,097,879



1,075,262


Commercial and industrial

2,085,820



2,088,056



2,024,676



2,088,318



2,002,490


Construction and land

286,163



276,642



272,631



271,829



260,560


Consumer real estate

1,434,812



1,404,292



1,327,912



1,295,353



1,265,751


Other consumer

47,014



45,339



44,559



44,508



43,779


Less: deferred fees and allowance for loan loss

(67,408)



(57,955)



(56,899)



(55,974)



(66,746)


Total loans held for investment

8,158,810



7,528,531



7,454,810



7,758,802



7,636,235


Loans held for sale

30,572



15,347



24,279



26,121



29,378


Securities

668,948



670,599



667,939



678,483



667,183


Overnight deposits

232,862



218,608



266,434



272,670



233,335


Total interest-earning assets

$

9,091,192



$

8,433,085



$

8,413,462



$

8,736,076



$

8,566,131


Deposits:










Interest-bearing demand

$

855,948



$

800,557



$

775,921



$

760,889



$

954,960


Savings and money market

2,581,816



2,487,833



2,532,732



2,654,990



2,578,205


Time

1,885,190



1,776,829



1,703,421



1,683,475



1,632,697


FHLB advances and other borrowings

1,101,559



882,061



851,084



1,154,079



1,018,945


Total interest-bearing liabilities

$

6,424,513



$

5,947,280



$

5,863,158



$

6,253,433



$

6,184,807












Total assets

$

9,540,365



$

8,891,059



$

8,850,435



$

9,167,607



$

8,996,036


Non-interest-bearing demand deposits

$

1,812,042



$

1,688,937



$

1,778,681



$

1,752,095



$

1,694,082


Total deposits

$

7,134,996



$

6,754,156



$

6,790,754



$

6,851,449



$

6,859,944


Total shareholders' equity

$

1,134,001



$

1,107,719



$

1,062,331



$

1,022,032



$

994,574












Yields/Rates:










Loans:










Commercial real estate

5.21

%


5.18

%


5.20

%


5.15

%


5.09

%

Warehouse Purchase Program

4.78

%


4.91

%


4.81

%


4.68

%


4.53

%

Commercial and industrial

5.81

%


5.98

%


6.00

%


5.78

%


5.71

%

Construction and land

6.13

%


6.03

%


5.87

%


5.41

%


5.35

%

Consumer real estate

4.77

%


4.81

%


4.81

%


4.67

%


4.66

%

Other consumer

5.66

%


5.88

%


5.80

%


5.81

%


5.74

%

Total loans held for investment

5.30

%


5.38

%


5.37

%


5.22

%


5.16

%

Loans held for sale

4.25

%


4.43

%


4.71

%


4.52

%


4.46

%

Securities

2.72

%


2.70

%


2.78

%


2.66

%


2.59

%

Overnight deposits

2.36

%


2.37

%


2.24

%


1.99

%


1.89

%

Total interest-earning assets

5.03

%


5.09

%


5.06

%


4.92

%


4.87

%

Deposits:










Interest-bearing demand

0.71

%


0.76

%


0.69

%


0.65

%


0.88

%

Savings and money market

1.22

%


1.13

%


1.02

%


0.92

%


0.79

%

Time

2.35

%


2.23

%


2.05

%


1.80

%


1.62

%

FHLB advances and other borrowings

2.94

%


3.09

%


2.91

%


2.55

%


2.49

%

Total interest-bearing liabilities

1.78

%


1.70

%


1.55

%


1.43

%


1.30

%

Net interest spread

3.25

%


3.39

%


3.51

%


3.49

%


3.57

%

Net interest margin

3.77

%


3.89

%


3.98

%


3.90

%


3.93

%

Cost of deposits (including non-interest-bearing demand)

1.15

%


1.09

%


0.97

%


0.87

%


0.80

%

 

LegacyTexas Financial Group, Inc.

Supplemental Information- Non-GAAP Financial Measures

(unaudited)



At or For the Quarters Ended


June 30,
2019


March 31,
2019


December 31,
2018


September 30,
2018


June 30,
2018


(Dollars in thousands, except per share amounts)

Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (calculated net of estimated tax rate of 21%)





GAAP net income available to common shareholders1

$

26,837



$

28,955



$

57,534



$

42,672



$

27,770


Distributed and undistributed earnings to participating securities1

146



125



235



149



67


GAAP net income

26,983



29,080



57,769



42,821



27,837


Merger costs

1,866










(Gain) on one-time tax adjustment2





(15,289)






Expenses related to above tax adjustment





202






Loss on sale of branch locations and land







372



126


Core (non-GAAP) net income

$

28,849



$

29,080



$

42,682



$

43,193



$

27,963


Average shares for basic earnings per share

47,383,314


47,246,282


47,159,578


47,105,655



47,000,405


Basic GAAP earnings per share

$

0.57



$

0.61



$

1.22



$

0.91



$

0.59


Basic core (non-GAAP) earnings per share

$

0.61



$

0.62



$

0.91



$

0.92



$

0.59


Average shares for diluted earnings per share

47,923,391


47,835,693


47,714,421


47,755,441



47,618,157


Diluted GAAP earnings per share

$

0.56



$

0.61



$

1.21



$

0.89



$

0.58


Diluted core (non-GAAP) earnings per share

$

0.60



$

0.61



$

0.89



$

0.90



$

0.59


Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income and Non-interest Expense (gross of tax)







GAAP non-interest income

$

12,232



$

9,894



$

12,264



$

13,227



$

10,852


Loss on sale of branch locations and land







471



160


Core (non-GAAP) non-interest income

$

12,232



$

9,894



$

12,264



$

13,698



$

11,012


GAAP non-interest expense

$

47,526



$

44,307



$

42,868



$

42,192



$

42,191


Merger costs

(2,362)










Expenses related to above tax adjustments





(256)






Core (non-GAAP) non-interest expense

$

45,164



$

44,307



$

42,612



$

42,192



$

42,191



Unvested share-based awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of GAAP earnings per share pursuant to prescribed accounting guidance.

This one-time income tax benefit resulted from tax rate changes and the favorable outcome of the Company's change in its tax method of accounting for its loan portfolio, related to the December 22, 2017 enactment of the Tax Cuts and Jobs Act.

 


At or For the Quarters Ended


June 30,
2019


March 31,
2019


December 31,
2018


September 30,
2018


June 30,
2018

Reconciliation of Core (non-GAAP) to GAAP Efficiency Ratio (gross of tax)


(Dollars in thousands, except per share amounts)

GAAP efficiency ratio:










Non-interest expense

$

47,526



$

44,307



$

42,868



$

42,192



$

42,191


Net interest income plus non-interest income

97,786



91,058



96,563



98,894



94,781


Efficiency ratio - GAAP basis

48.60

%


48.66

%


44.39

%


42.66

%


44.51

%

Core (non-GAAP) efficiency ratio:










Core (non-GAAP) non-interest expense

$

45,164



$

44,307



$

42,612



$

42,192



$

42,191


Net interest income plus core (non-GAAP) non-interest income

97,786



91,058



96,563



99,365



94,941


Efficiency ratio - core (non-GAAP) basis

46.19

%


48.66

%


44.13

%


42.46

%


44.44

%

Calculation of Tangible Book Value per Share:







Total shareholders' equity

$

1,142,645



$

1,121,087



$

1,094,367



$

1,039,599



$

1,001,450


Less: Goodwill

(178,559)



(178,559)



(178,559)



(178,559)



(178,559)


Identifiable intangible assets, net

(193)



(218)



(245)



(279)



(313)


Total tangible shareholders' equity

$

963,893



$

942,310



$

915,563



$

860,761



$

822,578


Shares outstanding at end of period

48,833,238



48,704,070



48,505,261



48,491,169



48,311,220


Book value per share - GAAP

$

23.40



$

23.02



$

22.56



$

21.44



$

20.73


Tangible book value per share - Non-GAAP

19.74



19.35



18.88



17.75



17.03


Calculation of Tangible Equity to Tangible Assets:






Total assets

$

9,935,934



$

9,346,072



$

9,051,142



$

9,082,792



$

9,249,086


Less: Goodwill

(178,559)



(178,559)



(178,559)



(178,559)



(178,559)


Identifiable intangible assets, net

(193)



(218)



(245)



(279)



(313)


Total tangible assets

$

9,757,182



$

9,167,295



$

8,872,338



$

8,903,954



$

9,070,214


Equity to assets - GAAP

11.50

%


12.00

%


12.09

%


11.45

%


10.83

%

Tangible equity to tangible assets - Non-GAAP

9.88



10.28



10.32



9.67



9.07


Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and Core)

Net income

$

26,983



$

29,080



$

57,769



$

42,821



$

27,837


Core (non-GAAP) net income

28,849



29,080



42,682



43,193



27,963


Average total equity

1,134,001



1,107,719



1,062,331



1,022,032



994,574


Average total assets

9,540,365



8,891,059



8,850,435



9,167,607



8,996,036


Return on average common shareholders' equity

9.52

%


10.50

%


21.75

%


16.76

%


11.20

%

Core (non-GAAP) return on average common shareholders' equity

10.18



10.50



16.07



16.90



11.25


Return on average assets

1.13



1.31



2.61



1.87



1.24


Core (non-GAAP) return on average assets

1.21



1.31



1.93



1.88



1.24


 

Cision

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