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People’s Utah Bancorp Reports Fourth Quarter Results And Year-End 2018 Results; Announces Quarterly Dividend Payment

Year-End Highlights

  • Net interest margin widened 55 bps to 5.29% year-over-year
  • Earnings per diluted share increased 98.2% to $2.14 for the year ended 2018
  • Return on average equity improved 81.7% to 14.85% for the year ended 2018
  • Return on average assets improved 68.5% to 1.87% for the year ended 2018
  • YTD average loans held for investment grew $426 million, or 33.4%, to $1.70 billion year-over-year
  • YTD average total deposits grew $286 million, or 18.7%, to $1.81 billion year-over-year

AMERICAN FORK, Utah, Jan. 28, 2019 (GLOBE NEWSWIRE) -- People’s Utah Bancorp (the “Company” or “PUB”) (PUB) reported net income of $10.7 million for the fourth quarter of 2018 compared with $10.5 million for the third quarter of 2018, and $0.6 million for the fourth quarter of 2017.  Diluted earnings per common share were $0.56 for the fourth quarter of 2018 compared with $0.55 for the third quarter of 2018, and $0.03 for the fourth quarter of 2017.  For the twelve months ended December 31, 2018, net income was $40.6 million, or $2.14 per diluted common share, compared with $19.8 million, or $1.08 per diluted common share, for the same period a year earlier.   

The Company has excluded non-recurring income including gains or losses on sale of investment securities; costs related to the acquisition of the Utah branches of Banner Bank and the merger of Town & Country Bank incurred in both 2017 and 2018; and higher income tax expense related to the one-time write-down of its deferred income tax assets recorded in 2017 to derive non-GAAP financial information related to the Company’s core operations.  The Company believes this non-GAAP(NG) financial information is useful in understanding the Company’s core financial performance.

Net income from core operations was $10.7 million, or $0.56 per diluted common share, for the fourth quarter of 2018 compared with $10.4 million, or $0.55 per diluted common share, for the third quarter of 2018 and $8.1 million, or $0.43 per diluted common share, for the fourth quarter of 2017(NG).  For the twelve months ended December 31, 2018, net income from core operations was $40.6 million, or $2.14 per diluted common share, compared with $28.1 million, or $1.53 per diluted common share, for the same period a year earlier(NG).

________________________________
 (NG) Details on Non-GAAP financial information are on last three tables of this press release.

Return on average assets was 1.94% for the fourth quarter of 2018 compared with 1.91% for the third quarter of 2018, and 0.12% for the fourth quarter of 2017.  Return on average assets from core operations for the fourth quarter of 2018 was 1.94% compared with 1.89% for the third quarter of 2018, and 1.58% for the fourth quarter of 2017(NG)

For the year ended December 31, 2018, return on average assets was 1.87% compared with 1.11% for the same period a year earlier.  Return on average assets from core operations for the year ended December 31, 2018, was 1.87% compared with 1.57% for the same period a year ago(NG)

Return on average equity was 14.84% for the fourth quarter of 2018 compared with 14.97% for the third quarter of 2018, and 0.92% for the fourth quarter of 2017.  Return on average equity from core operations was 14.84% for the fourth quarter of 2018 compared with 14.84% for the third quarter of 2018, and 12.59% for the fourth quarter of 2017(NG)

For the year ended December 31, 2018, return on average equity was 14.85% compared with 8.18% for the same period a year earlier.  Return on average equity from core operations for the year ended December 31, 2018, was 14.82% compared with 11.60% for the same period a year ago(NG)

The Board of Directors declared a quarterly dividend payment of $0.11 per common share. The dividend will be payable on February 11, 2019, to shareholders of record on February 4, 2019. The dividend payout ratio for earnings for the fourth quarter of 2018 was 19.3%.  This continues the over 50-year trend of paying dividends by the Company.

“People’s Utah Bancorp achieved strong financial performance both in the fourth quarter and for all of 2018.  We are pleased that we provided a return on average equity of 14.85% for 2018 even as our tangible common equity to tangible assets increased to 12.11%”, said Len Williams, President and Chief Executive Officer.  “We accomplished year to date average loan growth of 33% and deposit growth of 19% resulting both organically and through our two acquisition transactions completed at the end of 2017. Our net interest margin expanded by 55 basis points to 5.29% for all of 2018, despite experiencing greater deposit pricing pressures and strong competitive demand for deposits from both banks and credit unions.  We anticipate continued competition for deposits and deposit pricing pressures, consistent with our peers, in the near term.  We continue to be focused on growing our business organically and diversifying our loan portfolio.  The economic outlook for the Utah market continues to be strong, which provides us further opportunities to provide high quality growth.  We continue to actively evaluate potential acquisition opportunities throughout the Intermountain West”.

Net Interest Income and Margin

For the fourth quarter of 2018, net interest income grew 17.2%, or $4.1 million, to $28.1 million compared with $23.9 million for the same period a year earlier.  The increase is primarily the result of average interest earning assets growing 6.9%, or $133 million, and yields on interest earning assets increasing 64 basis points to 5.80% for the same comparable periods.  Higher yields on interest earning assets were primarily the result of yields on loans increasing 58 basis points to 6.56% for the same comparable periods, and the percentage of loans to total interest earning assets increasing to 83.0% for the fourth quarter of 2018 compared with 80.4% for the fourth quarter of 2017. 

For the fourth quarter of 2018, total cost of interest bearing liabilities increased 27 basis points to 0.64% compared with the same period a year ago, and is the result of the cost of interest bearing deposits increasing 27 basis points to 0.63% for the same comparable periods, and short-term borrowing remaining flat at $10.5 million with the borrowing rate increasing 144 basis points to 2.79% for the fourth quarter of 2018 compared with the same period a year earlier. 

For the fourth quarter of 2018, acquisition accounting adjustments, including the accretion of loan discounts and amortization of certificate of deposits premium, added 14 basis points to the net interest margin.

For the twelve months ended December 31, 2018, net interest income grew 34.2%, or $27.5 million, to $108.2 million compared with $80.6 million for the same period a year earlier.  The increase is primarily the result of average interest earning assets growing 20.3%, or $346 million, and yields on interest earning assets increasing 70 basis points to 5.64% for the same comparable periods. Higher yields on interest earning assets were primarily the result of yields on loans increasing 34 basis points to 6.38% for the same comparable periods, and the percentage of loans to total interest earning assets increasing to 83.1% for the fourth quarter of 2018 compared with 75.0% for the fourth quarter of 2017. 

For the twelve months ended December 31, 2018, total cost of interest bearing liabilities increased 26 basis points to 0.58% compared with the same period a year ago, and is the result of the cost of interest bearing deposits increasing 17 basis points to 0.49% for the same comparable periods, and an increase in average short-term borrowings of $64.4 million at a borrowing rate of 1.98% for all of 2018.  The Company expects the increase in cost of interest bearing deposits to continue to increase over the next several quarters as financial institutions increase their competitive deposit pricing.

For the twelve months ended December 31, 2018, acquisition accounting adjustments, including the accretion of loan discounts and amortization of certificate of deposits premium, added 15 basis points to the net interest margin.

Provision for Loan Losses

For the fourth quarter of 2018, provision for loan losses was $3.2 million compared with $0.8 million for the same period a year earlier. The increase in provision for loan losses in the fourth quarter of 2018 is due primarily to an increase in charge-offs and the increase in allowance for loan losses to loans held for investment.  For the fourth quarter of 2018, the Company incurred net charge-offs of $1.2 million compared with net charge-offs of $0.1 million for the same period a year ago. 

For the twelve months ended December 31, 2018, provision for loan losses was $8.6 million compared with $2.8 million for the same period a year earlier. The increase in provision for loan losses for all of 2018 is due primarily to a $0.5 million increase in charge-offs and a 38 basis points increase in allowance for loan losses to loans held for investment.  For the twelve months ended December 31, 2018, the Company incurred net charge-offs of $1.7 million compared with net charge-offs of $1.2 million for the same period a year ago. 

Noninterest Income

For the fourth quarter of 2018, noninterest income was $3.6 million compared with $3.9 million the same period a year ago.   The decrease was primarily due to a $0.5 million decline in mortgage banking income resulting from lower loan originations, which is primarily the result of a higher interest rate environment for the same comparable periods.

For the twelve months ended December 31, 2018, noninterest income was $15.1 million compared with $14.4 million the same period a year ago.   The increase was primarily due to a loss on sale of securities a year ago; an increase in service charges on deposit accounts and card processing fees compared with a year earlier; offset by $1.3 million lower mortgage banking income year-over-year resulting from lower loan originations, which is primarily the result of a higher interest rate environment for the same comparable periods.

Noninterest Expense

For the fourth quarter of 2018, noninterest expense was $14.8 million compared with $19.1 million for the same period a year earlier and the decrease is primarily the result of the Company recording $4.1 million in non-recurring costs associated with the acquisition of both the Utah branches of Banner Bank and the merger of Town & Country Bank in the fourth quarter of 2017.

For the fourth quarter of 2018, the Company’s efficiency ratio was 46.94% compared with 68.46% for the same period a year ago.  For the fourth quarter, the Company’s efficiency ratio from core operations was 46.94% compared with 53.67% for the same period a year earlier(NG).

For the twelve months ended December 31, 2018, noninterest expense was $62.0 million compared with $56.0 million for the same period a year earlier.  Noninterest expense increased as a result of $5.5 million of higher salaries and employee benefits primarily from the addition of employees retained from the acquisition of the Utah branches of Banner Bank and the merger of Town & Country Bank, $1.2 million of higher occupancy, equipment and depreciation costs associated with the net increase of five branches from these transactions, and $0.7 million in higher data processing costs associated with an increase in total accounts from both organic growth and acquisition transactions for the same comparable periods.  Higher noninterest expense in 2018 compared with 2017 was offset by recording $4.6 million in non-recurring costs associated with the acquisition of both the Utah Banner Bank branches and the merger of Town & Country Bank in 2017.

For the twelve months ended December 31, 2018, the Company’s efficiency ratio was 50.28% compared with 58.88% for the same period a year ago.  For the twelve months ended December 31, 2018, the Company’s efficiency ratio from core operations was 50.23% compared with 53.57% for the same period a year earlier(NG).

Income Tax Provision

For the fourth quarter of 2018, income tax expense was $2.9 million compared with $7.5 million for the same period a year earlier.  Income tax expense in the fourth quarter was reduced by $0.3 million to reflect the final impact of the Tax Cuts and Jobs Act as well as filing the  Company’s 2017 federal tax return this quarter.  For the twelve months ended December 31, 2018, income tax expense was $12.1 million compared with $16.5 million for the same period a year ago.  In the fourth quarter of 2017, the Tax Cuts and Jobs Act was signed into law, which amended the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.  For businesses, the Act reduced the federal corporate tax rate from a maximum of 35% to a flat rate of 21%. The rate reduction was effective January 1, 2018.  Consequently, the lower corporate income tax rate reduces the future net tax benefits of timing differences between book and taxable income recorded by the Company as net deferred income tax assets. 

As a result, the Company re-measured its net deferred income tax assets at the end of December 31, 2017, and recorded a one-time additional income tax expense of $4.7 million related to the write-down of deferred income tax assets for tax benefits that the Company did not expect to realize.

For the fourth quarter of 2018, the effective tax rate was 21.5% compared with 33.9% for the same period a year ago, excluding the one-time adjustment to the Company’s deferred income tax assets related to the write-down of its deferred income tax assets for tax benefits that the company did not expect to realize.   For the twelve months ended December 31, 2018, the effective tax rate was 22.9% compared with 32.3% for the same period a year ago, excluding the one-time adjustment to the Company’s deferred income tax assets. 

The lower effective tax rate for both the three and twelve months ended December 31, 2018, compared with the same periods a year earlier is primarily the result of the reduction in the federal corporate tax rate to a flat rate of 21%, the reduction of the Utah state corporate tax rate to 4.95%, as well as tax benefits related to tax-deductible stock compensation expense.

Loans and Credit Quality

Loans held for investment increased $51.5 million, or 3.2%, to $1.68 billion at December 31, 2018, compared with $1.63 billion at December 31, 2017.  Loans held for investment decreased $39.5 million, or 2.3%, at December 31, 2018, compared with September 30, 2018, and is primarily the result of seasonal trends in our acquisition, development, and construction loans.

Average loans grew $426 million, or 33.4%, to $1.70 billion for the year ended December 31, 2018, compared with $1.28 billion for the year ended December 31, 2017.  The increase in average loans held for investment was both the result of organic growth as well as loans purchased with the acquisition of the Utah branches of Banner Bank and the merger of Town & Country Bank. 

Non-performing loans increased to $4.5 million at December 31, 2018, compared with $2.9 million at December 31, 2017.  Non-performing loans to total loans were 0.27% at December 31, 2018, compared with 0.18% at December 31, 2017.  Non-performing assets increased to $4.5 million at December 31, 2018, compared with $3.9 million at December 31, 2017.  Non-performing assets to total assets were 0.21% at December 31, 2018, compared with 0.18% at December 31, 2017.  The allowance for loan losses increased $6.9 million, or 37.9% to $25.2 million at December 31, 2018, compared with the same period a year ago.  The allowance for loan losses to loans held for investment was 1.50% at December 31, 2018, compared with 1.12% at December 31, 2017.  In accordance with acquisition accounting, loans acquired from the Utah branches of Banner Bank and Town & Country Bank were recorded at their estimated fair value, which resulted in a net discount to the loans’ contractual amounts, a portion of which reflects a discount for possible credit losses. Credit discounts are included in the determination of fair value, and as a result, no allowance for loan and lease losses is recorded for acquired loans at the acquisition date.

The discount recorded on the acquired loans is not reflected in the allowance for loan losses or related allowance coverage ratios.  Remaining discounts on acquired loans was $8.8 million at December 31, 2018.

Deposits and Liabilities

Total deposits increased $62.4 million, or 3.4%, to $1.88 billion at December 31, 2018, compared with $1.81 billion at December 31, 2017.  The increase in total deposits was the result of organic growth after the assumption of deposits from the Utah branches of Banner Bank and Town & Country Bank. Non-interest-bearing deposits were 35.4% of total deposits as of December 31, 2018, compared with 35.3% as of December 31, 2017. 

Shareholders’ Equity

Shareholders’ equity increased by $32.7 million to $290 million at December 31, 2018, compared with $257 million at December 31, 2017. The increase resulted primarily from net income earned during the intervening periods, net of cash dividends paid to shareholders.

Conference Call and Webcast

Management will conduct a live conference call and webcast for investors, analysts, and the public relating to the Company's results for the 2018 fourth quarter and year-end results at 12:00 p.m. Eastern time on Tuesday, January 29, 2019.  The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to listen to the call by telephone at 888-317-6003 (international calls 412-317-6061) and the participant entry number is 6307034.  Please dial in 10-15 minutes early so the name and company information can be collected prior to the start of the conference.  To participate in the webcast, log on to:

https://services.choruscall.com/links/pub190129.html.

If you are unable to participate during the live webcast, the call will be archived on our website www.peoplesutah.com or at the same URL above until March 1, 2019.  Forward-looking and other material information may be discussed on this conference call.

Forward-Looking Statements

Statements in this release that are based on information other than historical data or that express the Company’s expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995.  Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events.  Forward-looking statements provide current expectations or forecasts of future events or determinations.  These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date.

Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this release.  Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: (i) market and economic conditions; (ii) capital sufficiency; (iii) operational, liquidity, interest rate and credit risks; (iv) deterioration of asset quality; (v) achieving loan and deposit growth; (vi) increased competition; (vii) adequacy of reserves; (viii) investments in new branches and new business opportunities; and (ix) changes in the regulatory or legal environment; as well as other factors discussed in the section titled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive.  The Company does not intend, or undertake any obligation to publicly update these forward-looking statements.

About People’s Utah Bancorp

People’s Utah Bancorp is the holding company for People’s Intermountain Bank.  People’s Intermountain Bank is a full-service community bank providing loans, deposit and cash management services to individuals and businesses.  The Company offers its clients direct access to decision makers, unparalleled responsiveness, seasoned relationship managers, and technology solutions. People’s Intermountain Bank has 26 locations in three banking divisions, Bank of American Fork, Lewiston State Bank, and People’s Town & Country Bank; a leasing division, GrowthFunding Equipment Finance; and a mortgage division, People’s Intermountain Bank Mortgage. The Company has been serving communities in Utah and southern Idaho for more than 100 years.  More information about PUB is available at www.peoplesutah.com.

Investor Relations Contact:

Mark K. Olson
Executive Vice President and Chief Financial Officer
1 East Main Street
American Fork, UT 84003
investorrelations@peoplesutah.com 
Phone: 801-642-3998

PEOPLE’S UTAH BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

    Three Months Ended     Year Ended  
(Dollars in thousands, except share   December 31,     September 30,     December 31,     December 31,     December 31,  
 and per share data)   2018     2018     2017     2018     2017  
Interest income                                        
Interest and fees on loans   $ 28,222     $ 27,420     $ 23,332     $ 108,498     $ 76,965  
Interest and dividends on investments     1,836       1,679       1,688       6,854       7,015  
Total interest income     30,058       29,099       25,020       115,352       83,980  
Interest expense     1,984       1,917       1,073       7,174       3,342  
Net interest income     28,074       27,182       23,947       108,178       80,638  
Provision for loan losses     3,175       1,925       750       8,625       2,750  
Net interest income after provision for loan losses     24,899       25,257       23,197       99,553       77,888  
Non-interest income                                        
Mortgage banking     1,398       1,668       1,911       6,209       7,536  
Card processing     750       826       799       3,097       2,790  
Service charges on deposit accounts     726       737       695       2,840       2,445  
Net gain (loss) on sale of investment securities     -       -       -       336       (499 )
Other     677       563       543       2,647       2,122  
Total non-interest income     3,551       3,794       3,948       15,129       14,394  
Non-interest expense                                        
Salaries and employee benefits     9,398       9,885       9,850       39,902       34,392  
Occupancy, equipment and depreciation     1,580       1,476       1,458       6,010       4,827  
Data processing     692       890       812       3,515       2,798  
Marketing and advertising     179       342       427       1,288       1,381  
FDIC premiums     152       239       181       1,019       572  
Acquisition-related costs     -       (118 )     4,124       232       4,784  
Other     2,844       2,566       2,244       10,030       7,205  
Total non-interest expense     14,845       15,280       19,096       61,996       55,959  
Income before income tax expense     13,605       13,771       8,049       52,686       36,323  
Income tax expense     2,927       3,288       7,456       12,054       16,477  
Net income   $ 10,678     $ 10,483     $ 593     $ 40,632     $ 19,846  
                                         
Earnings per common share:                                        
Basic   $ 0.57     $ 0.56     $ 0.03     $ 2.18     $ 1.10  
Diluted   $ 0.56     $ 0.55     $ 0.03     $ 2.14     $ 1.08  
                                         
Weighted average common shares outstanding:                                        
Basic     18,723,160       18,713,410       18,276,717       18,679,165       18,019,643  
Diluted     18,991,767       19,010,600       18,722,060       18,982,521       18,447,621  
                                         

PEOPLE’S UTAH BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS

    December 31,     September 30,     June 30,     December 31,  
(Dollars in thousands, except share data)   2018     2018     2018     2017  
ASSETS                                
Cash and due from banks   $ 39,471     $ 27,231     $ 33,484     $ 36,235  
Interest-bearing deposits     7,456       23,005       17,930       13,158  
Federal funds sold     1,620       4,697       908       1,634  
Total cash and cash equivalents     48,547       54,933       52,322       51,027  
Investment securities:                                
Available for sale, at fair value     280,964       255,021       236,699       263,056  
Held to maturity, at historical cost     65,462       67,148       67,922       74,654  
Total investment securities     346,426       322,169       304,621       337,710  
Non-marketable equity securities     2,551       4,231       6,151       3,706  
Loans held for sale     10,267       8,467       11,058       10,871  
Loans:                                
Loans held for investment     1,678,902       1,718,403       1,691,959       1,627,444  
Allowance for loan losses     (25,245 )     (23,309 )     (22,308 )     (18,303 )
Total loans held for investment, net     1,653,657       1,695,094       1,669,651       1,609,141  
Premises and equipment, net     36,532       36,683       29,335       30,399  
Goodwill     25,673       25,673       25,673       26,008  
Bank-owned life insurance     26,433       26,276       26,120       23,566  
Deferred income tax assets     11,514       11,224       10,764       8,827  
Accrued interest receivable     8,282       8,766       7,658       7,594  
Other intangibles     3,412       3,523       3,633       3,854  
Other real estate owned     -       2,985       -       994  
Other assets     11,000       12,829       14,784       9,832  
Total assets   $ 2,184,294     $ 2,212,853     $ 2,161,770     $ 2,123,529  
                                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                                
Deposits:                                
Non-interest bearing deposits   $ 663,800     $ 677,379     $ 646,574     $ 641,124  
Interest-bearing deposits     1,213,255       1,194,553       1,135,366       1,173,508  
Total deposits     1,877,055       1,871,932       1,781,940       1,814,632  
Short-term borrowings     -       42,000       90,000       40,000  
Accrued interest payable     483       424       369       353  
Other liabilities     16,594       18,865       17,862       11,126  
Total liabilities     1,894,132       1,933,221       1,890,171       1,866,111  
                                 
Shareholders’ equity:                                
Preferred shares, $0.01 par value     -       -       -       -  
Common shares, $0.01 par value     187       187       187       185  
Additional paid-in capital     86,308       86,098       85,620       84,532  
Retained earnings     207,779       199,161       190,735       174,804  
Accumulated other comprehensive loss     (4,112 )     (5,814 )     (4,943 )     (2,103 )
Total shareholders’ equity     290,162       279,632       271,599       257,418  
Total liabilities and shareholders’ equity   $ 2,184,294     $ 2,212,853     $ 2,161,770     $ 2,123,529  
                                 
Common shares outstanding     18,728,823       18,719,496       18,683,883       18,511,797  
                                 

PEOPLE’S UTAH BANCORP
SUMMARY FINANCIAL INFORMATION

    December 31,     September 30,     June 30,     December 31,  
(Dollars in thousands, except share data)   2018     2018     2018     2017  
Selected Balance Sheet Information:                                
Book value per share   $ 15.49     $ 14.94     $ 14.54     $ 13.91  
Tangible book value per share   $ 13.94     $ 13.38     $ 12.97     $ 12.29  
Non-performing loans to total loans     0.27 %     0.34 %     0.51 %     0.18 %
Non-performing assets to total assets     0.21 %     0.40 %     0.40 %     0.18 %
Allowance for loan losses to loans held for investment     1.50 %     1.36 %     1.32 %     1.12 %
Loans to Deposits     88.65 %     91.01 %     94.32 %     89.27 %
                                 
Asset Quality Data:                                
Non-performing loans   $ 4,499     $ 5,830     $ 8,649     $ 2,874  
Non-performing assets   $ 4,499     $ 8,815     $ 8,649     $ 3,868  
                                 
Capital Ratios:                                
Tier 1 leverage capital (1)     12.27 %     11.90 %     11.48 %     11.46 %
Total risk-based capital (1)     16.36 %     15.46 %     15.22 %     14.67 %
Average equity to average assets     13.04 %     12.76 %     12.36 %     12.56 %
Tangible common equity to tangible assets (3)     12.11 %     11.47 %     11.36 %     10.87 %


    Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
    2018     2018     2017     2018     2017  
Selected Financial Information:                                        
Basic earnings per share   $ 0.57     $ 0.56     $ 0.03     $ 2.18     $ 1.10  
Diluted earnings per share   $ 0.56     $ 0.55     $ 0.03     $ 2.14     $ 1.08  
Net interest margin (2)     5.41 %     5.25 %     4.94 %     5.29 %     4.74 %
Efficiency ratio     46.94 %     49.33 %     68.46 %     50.28 %     58.88 %
Non-interest income to average assets     0.64 %     0.69 %     0.77 %     0.70 %     0.81 %
Non-interest expense to average assets     2.69 %     2.78 %     3.72 %     2.85 %     3.13 %
Return on average assets     1.94 %     1.91 %     0.12 %     1.87 %     1.11 %
Return on average equity     14.84 %     14.97 %     0.92 %     14.85 %     8.18 %
Net charge-offs / (recoveries)   $ 1,240     $ 924     $ 56     $ 1,684     $ 1,162  
Annualized net charge-offs / (recoveries) to average loans     0.29 %     0.21 %     0.01 %     0.10 %     0.09 %

________________________________
(1) Tier 1 leverage capital and Total risk-based capital as of December 31, 2018 are estimates.
(2) Net interest margin is defined as net interest income divided by average earning assets.
(3) Represents the sum of total shareholders’ equity less intangible assets all divided by the sum of total assets less intangible assets. Intangible assets were $29,085,000, $29,195,000 and $29,862,000 at December 31, 2018, September 30, 2018 and December 31, 2017, respectively.


PEOPLE’S UTAH BANCORP
SELECTED AVERAGE BALANCES AND YIELDS

    Three Months Ended  
    December 31, 2018     December 31, 2017  
            Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/  
(Dollars in thousands, except footnotes)   Balance     Expense     Rate     Balance     Expense     Rate  
ASSETS                                                
Interest-earning deposits in other banks and federal funds sold   $ 15,590     $ 80       2.02 %   $ 55,608     $ 171       1.22 %
Securities: (1)                                                
Taxable securities     258,156       1,371       2.11 %     233,281       1,112       1.89 %
Non-taxable securities (2)     72,631       335       1.83 %     85,474       396       1.84 %
Total securities     330,787       1,706       2.05 %     318,755       1,508       1.88 %
Loans (3)                                                
Real estate term     872,256       13,082       5.95 %     798,448       10,804       5.37 %
Construction and land development     353,158       7,201       8.09 %     324,710       6,426       7.85 %
Commercial and industrial     303,803       5,229       6.83 %     299,279       4,491       5.95 %
Residential and home equity     161,563       2,397       5.89 %     106,386       1,303       4.86 %
Consumer and other     17,277       313       7.18 %     19,013       308       6.42 %
Total loans     1,708,057       28,222       6.56 %     1,547,836       23,332       5.98 %
                                                 
Non-marketable equity securities     2,969       50       6.64 %     2,441       9       1.53 %
Total interest-earning assets     2,057,403       30,058       5.80 %     1,924,640       25,020       5.16 %
Allowance for loan losses     (23,396 )                     (18,002 )                
Non-interest earning assets     154,257                       129,216                  
Total average assets   $ 2,188,264                     $ 2,035,854                  
LIABILITIES AND SHAREHOLDERS’ EQUITY                                                
Interest-bearing deposits:                                                
Demand and savings accounts   $ 763,291       748       0.39 %   $ 726,362       479       0.26 %
Money market accounts     265,393       620       0.93 %     222,877       137       0.24 %
Certificates of deposit     181,775       542       1.18 %     190,765       421       0.88 %
Total interest-bearing deposits     1,210,459       1,910       0.63 %     1,140,004       1,037       0.36 %
Short-term borrowings     10,486       74       2.79 %     10,565       36       1.35 %
Total interest-bearing liabilities     1,220,945       1,984       0.64 %     1,150,569       1,073       0.37 %
Non-interest bearing deposits     664,994                       623,516                  
Total funding     1,885,939       1,984       0.42 %     1,774,085       1,073       0.24 %
Other non-interest bearing liabilities     16,893                       6,089                  
Shareholders’ equity     285,432                       255,680                  
Total average liabilities and shareholders’ equity   $ 2,188,264                     $ 2,035,854                  
Net interest income           $ 28,074                     $ 23,947          
Interest rate spread                     5.15 %                     4.79 %
Net interest margin                     5.41 %                     4.94 %

________________________________
(1) Excludes average unrealized losses of $8.1 million and $1.3 million for the three months ended December 31, 2018 and 2017, respectively.
(2) Does not include tax effect on tax-exempt investment security income of $112,000 and $213,000 for the three months ended December 31, 2018 and 2017, respectively.
(3) Loan interest income includes loan fees of $1.7 million and $1.7 million for the three months ended December 31, 2018 and 2017, respectively.

PEOPLE’S UTAH BANCORP
SELECTED AVERAGE BALANCES AND YIELDS

    Year Ended  
    December 31, 2018     December 31, 2017  
            Interest     Average             Interest     Average  
    Average     Income/     Yield/     Average     Income/     Yield/  
(Dollars in thousands, except footnotes)   Balance     Expense     Rate     Balance     Expense     Rate  
ASSETS                                                
Interest-earning deposits in other banks and federal funds sold   $ 14,252     $ 246       1.73 %   $ 51,649     $ 589       1.14 %
Securities: (1)                                                
Taxable securities     249,032       4,958       1.99 %     281,938       4,738       1.68 %
Non-taxable securities (2)     77,455       1,433       1.85 %     90,060       1,663       1.85 %
Total securities     326,487       6,391       1.96 %     371,998       6,401       1.72 %
Loans (3)                                                
Real estate term     882,742       51,149       5.79 %     661,588       36,197       5.47 %
Construction and land development     366,205       28,708       7.84 %     268,255       20,889       7.79 %
Commercial and industrial     312,728       20,869       6.67 %     238,418       14,393       6.04 %
Residential and home equity     120,396       6,620       5.50 %     89,027       4,370       4.91 %
Consumer and other     18,734       1,152       6.15 %     17,719       1,116       6.30 %
Total loans     1,700,805       108,498       6.38 %     1,275,007       76,965       6.04 %
                                                 
Non-marketable equity securities     5,307       217       4.09 %     2,136       25       1.18 %
Total interest-earning assets     2,046,851       115,352       5.64 %     1,700,790       83,980       4.94 %
Allowance for loan losses     (21,429 )                     (17,220 )                
Non-interest earning assets     146,731                       104,240                  
Total average assets   $ 2,172,153                     $ 1,787,810                  
LIABILITIES AND SHAREHOLDERS’ EQUITY                                                
Interest-bearing deposits:                                                
Demand and savings accounts   $ 740,569       2,390       0.32 %   $ 680,216       1,806       0.27 %
Money market accounts     233,830       1,398       0.60 %     183,142       410       0.22 %
Certificates of deposit     187,278       1,962       1.05 %     161,852       1,059       0.65 %
Total interest-bearing deposits     1,161,677       5,750       0.49 %     1,025,210       3,275       0.32 %
Short-term borrowings     71,880       1,424       1.98 %     7,462       67       0.89 %
Total interest-bearing liabilities     1,233,557       7,174       0.58 %     1,032,672       3,342       0.32 %
Non-interest bearing deposits     651,101                       501,719                  
Total funding     1,884,658       7,174       0.38 %     1,534,391       3,342       0.22 %
Other non-interest bearing liabilities     13,894                       10,660                  
Shareholders’ equity     273,601                       242,759                  
Total average liabilities and shareholders’ equity   $ 2,172,153                     $ 1,787,810                  
Net interest income           $ 108,178                     $ 80,638          
Interest rate spread                     5.05 %                     4.61 %
Net interest margin                     5.29 %                     4.74 %

________________________________
(1) Excludes average unrealized losses of $6.3 million and $1.1 million for the year ended December 31, 2018 and 2017, respectively.
(2) Does not include tax effect on tax-exempt investment security income of $478,000 and $896,000 for the year ended December 31, 2018 and 2017, respectively.
(3) Loan interest income includes loan fees of $6.7 million and $6.4 million for the year ended December 31, 2018 and 2017, respectively.


PEOPLE’S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION

(NG) Non-GAAP Financial Measures                                        
In addition to financial results presented in accordance with generally accepted accounting principles ("GAAP"),  
this press release contains certain non-GAAP financial measures.  Management has presented these non-GAAP  
financial measures because it believes that they provide useful and comparative information to assess trends in  
core operations and facilitate the comparison of our financial performance with the performance of our peers.  
(Dollars in thousands)   Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
Revenue from Core Operations   2018     2018     2017     2018     2017  
Net interest income (GAAP)   $ 28,074     $ 27,182     $ 23,947     $ 108,178     $ 80,638  
Total non-interest income     3,551       3,794       3,948       15,129       14,394  
Total GAAP revenues     31,625       30,976       27,895       123,307       95,032  
Exclude net (gain) loss on sale of investment securities     -       -       -       (333 )     499  
Revenue from core operations (non-GAAP)   $ 31,625     $ 30,976     $ 27,895     $ 122,974     $ 95,531  
                                         
    Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
Non-interest Income from Core Operations   2018     2018     2017     2018     2017  
Total non-interest income (GAAP)   $ 3,551     $ 3,794     $ 3,948     $ 15,129     $ 14,394  
Exclude net (gain) loss on sale of investment securities     -       -       -       (333 )     499  
Non-interest income from core operations (non-GAAP)   $ 3,551     $ 3,794     $ 3,948     $ 14,796     $ 14,893  
                                         
    Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
Non-interest Expense from Core Operations   2018     2018     2017     2018     2017  
Total non-interest expense (GAAP)   $ 14,845     $ 15,280     $ 19,096     $ 61,996     $ 55,959  
Exclude acquisition-related costs     -       118       (4,124 )     (232 )     (4,784 )
Non-interest expense from core operations (non-GAAP)   $ 14,845     $ 15,398     $ 14,972     $ 61,764     $ 51,175  
                                         
    Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
Net Income from Core Operations   2018     2018     2017     2018     2017  
Net income (GAAP)   $ 10,678     $ 10,483     $ 593     $ 40,632     $ 19,846  
Exclude net (gain) loss on sale of investment securities     -       -       -       (333 )     499  
Exclude acquisition-related costs     -       (118 )     4,124       232       4,784  
Exclude tax related benefit     -       28       (1,334 )     23       (1,709 )
Revaluation of deferred income tax assets (DTA)     -       -       4,729       -       4,729  
Net income (non-GAAP)   $ 10,678     $ 10,393     $ 8,112     $ 40,554     $ 28,149  
                                         

PEOPLE’S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION

(NG) Non-GAAP Financial Measures (continued)  
(Dollars in thousands)   Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
Acquisition Accounting Impact on Net Interest Margin   2018     2018     2017     2018     2017  
Net interest income (GAAP)   $ 28,074     $ 27,182     $ 23,947     $ 108,178     $ 80,638  
Exclude discount accretion (premium amortization) on purchased loans     (701 )     (222 )     43       (2,867 )     5  
Exclude premium amortization on acquired certificates of deposit ("CD")     (35 )     (35 )     (23 )     (140 )     (230 )
Net interest income before acquisition accounting impact (Non-GAAP)   $ 27,338     $ 26,925     $ 23,967     $ 105,171     $ 80,413  
                                         
Average earning assets (GAAP)   $ 2,057,403     $ 2,054,261     $ 1,924,640     $ 2,046,851     $ 1,700,790  
Exclude average net loan discount on acquired loans     9,124       9,549       3,501       10,176       1,524  
Average earning assets before acquired loan discount (Non-GAAP)   $ 2,066,527     $ 2,063,810     $ 1,928,141     $ 2,057,027     $ 1,702,314  
                                         
Net interest margin ("NIM") (GAAP)     5.41 %     5.25 %     4.94 %     5.29 %     4.74 %
Exclude impact on NIM from discount accretion     -0.13 %     -0.04 %     0.01 %     -0.14 %     0.00 %
Exclude impact on NIM from CD premium amortization     -0.01 %     -0.01 %     -0.01 %     -0.01 %     -0.01 %
Net interest margin before acquisition accounting adjustments (Non-GAAP)     5.27 %     5.20 %     4.94 %     5.14 %     4.73 %
                                         

PEOPLE’S UTAH BANCORP
NON-GAAP SELECTED FINANCIAL INFORMATION

(NG) Non-GAAP Financial Measures (continued)  
(Dollars in thousands)   Three Months Ended     Year Ended  
    December 31,     September 30,     December 31,     December 31,     December 31,  
Additional Non-GAAP Financial Information   2018     2018     2017     2018     2017  
                                         
Diluted earnings per share (GAAP)   $ 0.56     $ 0.55     $ 0.03     $ 2.14     $ 1.08  
Diluted earnings per share (non-GAAP)   $ 0.56     $ 0.55     $ 0.43     $ 2.14     $ 1.53  
                                         
Efficiency ratio (GAAP)     46.94 %     49.33 %     68.46 %     50.28 %     58.88 %
Efficiency ratio (non-GAAP)     46.94 %     49.71 %     53.67 %     50.23 %     53.57 %
                                         
Non-interest income to average assets (GAAP)     0.64 %     0.69 %     0.77 %     0.70 %     0.81 %
Non-interest income to average assets (non-GAAP)     0.64 %     0.69 %     0.77 %     0.68 %     0.83 %
                                         
Non-interest expense to average assets (GAAP)     2.69 %     2.78 %     3.72 %     2.85 %     3.13 %
Non-interest expense to average assets (non-GAAP)     2.69 %     2.80 %     2.92 %     2.84 %     2.86 %
                                         
Return on average assets (GAAP)     1.94 %     1.91 %     0.12 %     1.87 %     1.11 %
Return on average assets (non-GAAP)     1.94 %     1.89 %     1.58 %     1.87 %     1.57 %
                                         
Return on average equity (GAAP)     14.84 %     14.97 %     0.92 %     14.85 %     8.18 %
Return on average equity (non-GAAP)     14.84 %     14.84 %     12.59 %     14.82 %     11.60 %