RALEIGH, N.C., July 21, 2016 (GLOBE NEWSWIRE) -- Yadkin Financial Corporation (NYSE:YDKN) ("Yadkin" or the "Company"), the parent company of Yadkin Bank, today announced financial results for the second quarter ended June 30, 2016.
"We are pleased to report the Company achieved record net income and net operating earnings in the second quarter of 2016," announced Scott Custer, Yadkin's CEO. "The strong performance reflects the impact of the acquisition of NewBridge Bancorp earlier this year and robust growth within the entire branch network."
Second Quarter 2016 Performance Highlights
- Net income available to common shareholders totaled $17.4 million, or $0.34 per diluted share, in Q2 2016 compared to $0.20 per diluted share in Q1 2016 and $0.33 per diluted share in Q2 2015. Net operating earnings available to common shareholders, which excludes certain non-operating income and expenses, improved to $21.2 million, or $0.41 per diluted share, in Q2 2016 from $0.39 per diluted share in Q1 2016 and $0.38 per diluted share, in Q2 2015.
- Annualized return on average equity was 7.05 percent in Q2 2016, compared to 4.42 percent in Q1 2016 and 7.71 percent in Q2 2015. Annualized return on average tangible common equity was 11.89 percent in Q2 2016 compared to 7.18 percent in Q1 2016 and 11.90 percent in Q2 2015. Annualized net operating return on average tangible common equity increased to 14.35 percent in Q2 2016 from 13.14 percent in Q1 2016 and 11.94 in Q2 2015.
- The efficiency ratio, the ratio of expenses to total revenues, improved to 63.5 percent in Q2 2016 from 75.4 percent in Q1 2016 and 64.5 percent in Q2 2015. The operating efficiency ratio improved to 55.5 percent in Q2 2016 from 58.1 percent in Q1 2016 and 60.0 percent in Q2 2015.
- On an annualized basis, net charge-offs were 0.07 percent of average loans during Q2 2016, compared to 0.15% during Q1 2016.
- Shareholder's equity totaled $1.00 billion as of June 30, 2016, compared to $984.6 million as of March 31, 2016. Tangible common equity to tangible assets was 8.94 percent as of June 30, 2016, compared to 8.72 percent as of March 31, 2016.
Acquisition of NewBridge Bancorp
On March 1, 2016, the Company completed its acquisition of NewBridge Bancorp (“NewBridge”), pursuant to an Agreement and Plan of Merger, dated October 12, 2015 (the "NewBridge Merger"). Following the NewBridge Merger, the Company is currently the fourth largest bank headquartered in North Carolina and ranks first by North Carolina deposit market share among community banks. The Company now operates 100 full-service banking locations in its North Carolina and South Carolina banking network and has a significant presence in all major North Carolina markets, including Charlotte, the Raleigh-Durham-Chapel Hill Triangle, the Piedmont Triad, and Wilmington. The Company plans to complete the NewBridge systems integration in September 2016. The NewBridge Merger added $2.1 billion in loans, $2.0 billion in deposits, and resulted in significant changes across most balance sheet categories. Additionally, since the merger was effective on March 1, 2016, the Company's results of operations for the first quarter reflect the impact of NewBridge for only one month. As a result, the Company's quarterly and year-to-date 2016 financial results may not be comparable to financial results in prior periods.
Results of Operations and Asset Quality
Net interest income totaled $63.5 million in the second quarter of 2016, which was a significant increase from $48.0 million in the first quarter of 2016. This increase was due to the full quarter impact of NewBridge's interest-earning assets as well as organic loan growth. Net interest margin decreased from 4.05 percent in the first quarter of 2016 to 3.94 percent in the second quarter of 2016, primarily due to lower-yielding acquired NewBridge loans and lower investment securities yields. Core net interest margin, which excludes the impact of accretion income on net interest income, was 3.63 percent in the second quarter of 2016, compared to 3.70 percent in the first quarter of 2016.
Net accretion income on acquired loans totaled $4.8 million in the second quarter of 2016, which consisted of $723 thousand of net accretion on purchased credit-impaired ("PCI") loans and $4.1 million of accretion income on purchased non-impaired loans. Net accretion income on acquired loans in the first quarter of 2016 totaled $3.6 million, which included $1.1 million of net accretion on PCI loans and $2.4 million of net accretion income on purchased non-impaired loans. Net accretion income on purchased non-impaired loans included $1.9 million of accelerated accretion due to principal prepayments in the second quarter of 2016 compared to $767 thousand in the first quarter of 2016. Higher non-PCI accretion income during the second quarter of 2016 reflected the full quarter impact of the NewBridge Merger.
Provision for loan losses was $2.3 million in the second quarter of 2016 compared to $1.9 million in the first quarter of 2016.The following table summarizes changes in the allowance for loan losses ("ALLL") for the quarters presented.
| (Dollars in thousands) | Non-PCI Loans | PCI Loans | Total | |||||||||
| Q2 2016 | ||||||||||||
| Balance at April 1, 2016 | $ | 9,453 | $ | 778 | $ | 10,231 | ||||||
| Net charge-offs | (896 | ) | — | (896 | ) | |||||||
| Provision for loan losses | 2,307 | (9 | ) | 2,298 | ||||||||
| Balance at June 30, 2016 | $ | 10,864 | $ | 769 | $ | 11,633 | ||||||
| Q1 2016 | ||||||||||||
| Balance at January 1, 2016 | $ | 8,447 | $ | 1,322 | $ | 9,769 | ||||||
| Net charge-offs | (1,413 | ) | — | (1,413 | ) | |||||||
| Provision for loan losses | 2,419 | (544 | ) | 1,875 | ||||||||
| Balance at March 31, 2016 | $ | 9,453 | $ | 778 | $ | 10,231 | ||||||
The ALLL was $11.6 million, or 0.22 percent of total loans as of June 30, 2016, compared to $10.2 million, or 0.20 percent of total loans, as of March 31, 2016. The increase in ALLL to total loans was primarily due to current origination activity. The adjusted ALLL, a non-GAAP metric that includes the ALLL as well as net acquisition accounting fair value adjustments for acquired loans, declined from 1.50 percent of total loans as of March 31, 2016 to 1.41 percent as of June 30, 2016. The decline in the adjusted ALLL ratio was due to improvements in historical loss rates used in the Company's ALLL model.
The provision for loan losses on non-PCI loans decreased by $112 thousand in the second quarter of 2016, primarily due to lower net charge-offs, which totaled $896 thousand in the second quarter of 2016 and $1.4 million in the first quarter of 2016. The annualized net charge-off rate was 0.07 percent of average loans the second quarter of 2016, a decline from 0.15 percent in the first quarter of 2016. The provision credit recorded on PCI loans decreased by $535 thousand on a linked-quarter basis, the result of significantly improved estimated cash flows on certain PCI loan pools during the first quarter of 2016.
Nonperforming loans, which include nonaccrual loans and loans past due 90 days or more and still accruing, as a percentage of total loans increased to 0.94 percent as of June 30, 2016 from 0.83 percent as of March 31, 2016. Total nonperforming assets (which include nonperforming loans and foreclosed assets) as a percentage of total assets similarly increased to 1.08 percent as of June 30, 2016 from 0.83 percent as of March 31, 2016. The Company's nonperforming asset ratio increased from a higher level of nonaccrual loans, a delinquent purchased receivables balance, and higher other real estate balances.
Non-interest income totaled $15.6 million in the second quarter of 2016, an increase from $11.4 million in the first quarter of 2016. Service charges and fees on deposit accounts increased by $1.6 million primarily due to the addition of acquired NewBridge deposit accounts. Mortgage banking income generated $3.9 million during the second quarter of 2016 compared to $1.6 million during the first quarter of 2016 as a result of strong local housing markets within the Company's footprint, a favorable interest rate environment for mortgage activity, and a $1.2 million gain recorded on a forward commitment to sell a portfolio of conforming residential mortgage loans. Government-guaranteed, small business lending income, which includes gains on sales of the guaranteed portion of certain U.S. Small Business Administration ("SBA") loans as well as servicing fees on previously sold SBA loans, contributed $2.7 million to non-interest income in the second quarter of 2016 compared to $3.1 million during the first quarter of 2016.
Non-interest expense totaled $50.2 million in the second quarter of 2016, an increase from $44.8 million in the first quarter of 2016, primarily due to the full-quarter impact of the NewBridge operating costs. Salaries and employee benefits, occupancy and equipment, data processing, and other non-interest expense categories all increased as a result of the NewBridge Merger, which added employees, branch and other facilities, and equipment to the Company's expense base. Personnel-related expenses increased 27.2 percent in the second quarter of 2016, while occupancy expenses increased 32.2 percent over the first quarter of 2016, which had included a single month of post-merger operating expenses. Merger and conversion costs declined $3.8 million in the second quarter of 2016, and include various professional fees, personnel, data processing, technology, and other expenses related to the NewBridge Merger.
The Company's efficiency ratio was 63.5 percent in the second quarter of 2016, compared to 75.4 percent in the first quarter of 2016. Operating efficiency ratio, which excludes gains on sales of available for sale securities, the gain from the sale of an ancillary line of business during second quarter of 2016, merger and conversion costs and restructuring charges, was 55.5 percent in the second quarter of 2016 and 58.1 percent in the first quarter of 2016. Execution of the branch consolidation plan (10 branches were closed in late Q2 2016 and 2 branches are scheduled to close in late Q3 2016), closures of two non-branch locations (scheduled for Q3 2016), and completion of the systems integration (scheduled for September 2016) should enable the Company to fully realize the cost savings and operational leverage that the NewBridge Merger provides. Management believes the majority of projected cost savings will be achieved by the end of Q3 2016 with remaining savings to be realized in Q4 2016 and Q1 2017.
Income tax expense totaled $9.2 million in the second quarter of 2016 compared to $4.9 million in the first quarter of 2016. The Company's effective tax rate declined to 34.6 percent in the second quarter of 2016, from 38.7 percent in the first quarter of 2016, primarily due to the impact of significant non-deductible merger expenses recorded during the first quarter of 2016.
Dividend Information
On July 20, 2016, Yadkin's Board of Directors declared a regular quarterly cash dividend of $0.10 per share on its issued and outstanding shares of unrestricted common stock, payable on August 18, 2016 to shareholders of record on August 11, 2016.
Yadkin Financial Corporation is the bank holding company for Yadkin Bank, a full-service state-chartered community bank providing services in 100 branches across North Carolina and upstate South Carolina. Serving over 130,000 customers, the Company has assets of $7.5 billion. The Bank’s primary business is providing banking, mortgage, investment, and insurance services to consumers and businesses across the Carolinas. The Bank provides SBA lending services through its Government Guaranteed Lending division, headquartered in Charlotte, NC, and mortgage lending services through Yadkin Mortgage, headquartered in Greensboro, NC. Yadkin Financial Corporation’s website is www.yadkinbank.com. Yadkin Financial Corporation's common stock is traded on the NYSE under the symbol YDKN.
Conference Call
The previously scheduled conference call to review Yadkin's second quarter 2016 earnings at 10:00 a.m. Eastern Time has been canceled. Instead, Yadkin Financial Corporation will participate in a joint conference call at 2:00 p.m. Eastern Time regarding the announcement of a proposed plan of merger, as described in a separate joint press release.
Non-GAAP Financial Measures
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. Yadkin management uses non-GAAP financial measures, including: (i) net operating earnings available to common shareholders; (ii) pre-tax, pre-provision operating earnings; (iii) operating non-interest expense, (iv) operating efficiency ratio, (v) adjusted allowance for loan losses to loans; and (vi) tangible common equity, in its analysis of the Company's performance. Net operating earnings available to common shareholders excludes the following from net income available to common shareholders: securities gains and losses, a one-time branch sale gain, merger and conversion costs, restructuring charges, income tax expense from the change in future state tax rates, and the income tax effect of adjustments. Pre-tax, pre-provision operating earnings excludes the following from net income: provision for loan losses, income tax expense, securities gains and losses, a one-time branch sale gain, merger and conversion costs, and restructuring charges. Operating non-interest expense excludes merger and conversion costs and restructuring charges from non-interest expense. The operating efficiency ratio excludes a one-time branch sale gain, securities gains and losses, merger and conversion costs, and restructuring charges from the efficiency ratio. Adjusted allowance for loan losses adds net acquisition accounting fair value discounts to the allowance for loan losses. Tangible common equity excludes preferred stock as well as goodwill and other intangible assets, net, from shareholders' equity.
Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company and provide meaningful comparisons to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider Yadkin performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
Forward-Looking Statements
Information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, risks relating to any proposed mergers, reduced earnings due to larger than expected credit losses in the sectors of our loan portfolio secured by real estate due to economic factors, including declining real estate values, increasing interest rates, increasing unemployment, or changes in payment behavior or other factors; reduced earnings due to larger credit losses because our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral; the rate of delinquencies and amount of loans charged-off; the adequacy of the level of our allowance for loan losses and the amount of loan loss provisions required in future periods; costs or difficulties related to the integration of the banks we acquired or may acquire may be greater than expected; our ability to achieve the estimated synergies from the NewBridge Acquisition and once integrated, the effects of such business combination on our future financial condition, operating results, strategy and plans; our ability to integrate NewBridge on our schedule and budget; results of examinations by our regulatory authorities, including the possibility that the regulatory authorities may, among other things, require us to increase our allowance for loan losses or write down assets; the amount of our loan portfolio collateralized by real estate; our ability to maintain appropriate levels of capital; adverse changes in asset quality and resulting credit risk-related losses and expenses; increased funding costs due to market illiquidity, competition for funding, and increased regulatory requirements with regard to funding; significant increases in competitive pressure in the banking and financial services industries; changes in political conditions or the legislative or regulatory environment, including the effect of future financial reform legislation on the banking industry; general economic conditions, either nationally or regionally and especially in our primary service area, becoming less favorable than expected resulting in, among other things, a deterioration in credit quality; our ability to retain our existing customers, including our deposit relationships; changes occurring in business conditions and inflation; changes in monetary and tax policies; ability of borrowers to repay loans; risks associated with a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service providers or other third parties, including cyber attacks, which could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses; changes in accounting principles, policies or guidelines; changes in the assessment of whether a deferred tax valuation allowance is necessary; our reliance on secondary liquidity sources such as Federal Home Loan Bank advances, sales of securities and loans, federal funds lines of credit from correspondent banks and out-of-market time deposits; loss of consumer confidence and economic disruptions resulting from terrorist activities or military actions; and changes in the securities markets. Additional factors that could cause actual results to differ materially are discussed in the Company’s filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. The forward-looking statements in this press release speak only as of the date of the press release, and the Company does not assume any obligation to update such forward-looking statements.
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
| Three months ended | |||||||||||||||||||
| (Dollars in thousands, except per share data) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
| Interest income | |||||||||||||||||||
| Loans | $ | 64,345 | $ | 47,971 | $ | 41,025 | $ | 40,300 | $ | 40,404 | |||||||||
| Investment securities | 7,231 | 6,113 | 5,243 | 3,957 | 3,786 | ||||||||||||||
| Federal funds sold and interest-earning deposits | 81 | 103 | 54 | 47 | 45 | ||||||||||||||
| Total interest income | 71,657 | 54,187 | 46,322 | 44,304 | 44,235 | ||||||||||||||
| Interest expense | |||||||||||||||||||
| Deposits | 4,433 | 3,467 | 2,950 | 3,097 | 3,073 | ||||||||||||||
| Short-term borrowings | 1,360 | 808 | 489 | 437 | 331 | ||||||||||||||
| Long-term debt | 2,375 | 1,867 | 1,541 | 1,465 | 1,504 | ||||||||||||||
| Total interest expense | 8,168 | 6,142 | 4,980 | 4,999 | 4,908 | ||||||||||||||
| Net interest income | 63,489 | 48,045 | 41,342 | 39,305 | 39,327 | ||||||||||||||
| Provision for loan losses | 2,298 | 1,875 | 2,714 | 1,576 | 994 | ||||||||||||||
| Net interest income after provision for loan losses | 61,191 | 46,170 | 38,628 | 37,729 | 38,333 | ||||||||||||||
| Non-interest income | |||||||||||||||||||
| Service charges and fees | 5,795 | 4,212 | 3,436 | 3,566 | 3,495 | ||||||||||||||
| Government-guaranteed lending | 2,680 | 3,072 | 3,170 | 3,009 | 3,677 | ||||||||||||||
| Mortgage banking | 3,850 | 1,623 | 1,571 | 1,731 | 1,633 | ||||||||||||||
| Bank-owned life insurance | 733 | 552 | 466 | 470 | 465 | ||||||||||||||
| Gain (loss) on sales of available for sale securities | 64 | 130 | (85 | ) | — | 84 | |||||||||||||
| Gain on sale of trust business | 417 | — | — | — | — | ||||||||||||||
| Gain on sale of branches | — | — | 88 | — | — | ||||||||||||||
| Other | 2,098 | 1,765 | 1,320 | 2,022 | 1,446 | ||||||||||||||
| Total non-interest income | 15,637 | 11,354 | 9,966 | 10,798 | 10,800 | ||||||||||||||
| Non-interest expense | |||||||||||||||||||
| Salaries and employee benefits | 22,939 | 18,040 | 15,777 | 14,528 | 15,391 | ||||||||||||||
| Occupancy and equipment | 7,315 | 5,535 | 4,722 | 4,641 | 4,637 | ||||||||||||||
| Data processing | 2,783 | 2,140 | 1,931 | 1,851 | 1,929 | ||||||||||||||
| Professional services | 1,547 | 1,108 | 861 | 1,196 | 1,407 | ||||||||||||||
| FDIC insurance premiums | 770 | 821 | 674 | 732 | 772 | ||||||||||||||
| Foreclosed asset expenses | 137 | 311 | 366 | 277 | 445 | ||||||||||||||
| Loan, collection, and repossession expense | 1,004 | 1,133 | 926 | 931 | 850 | ||||||||||||||
| Merger and conversion costs | 6,531 | 10,335 | 803 | 104 | (25 | ) | |||||||||||||
| Restructuring charges | 25 | 21 | 282 | 50 | 2,294 | ||||||||||||||
| Amortization of other intangible assets | 1,671 | 1,053 | 745 | 761 | 777 | ||||||||||||||
| Other | 5,483 | 4,307 | 3,477 | 3,777 | 3,839 | ||||||||||||||
| Total non-interest expense | 50,205 | 44,804 | 30,564 | 28,848 | 32,316 | ||||||||||||||
| Income before income taxes | 26,623 | 12,720 | 18,030 | 19,679 | 16,817 | ||||||||||||||
| Income tax expense | 9,219 | 4,920 | 6,182 | 7,891 | 6,076 | ||||||||||||||
| Net income | 17,404 | 7,800 | 11,848 | 11,788 | 10,741 | ||||||||||||||
| Dividends on preferred stock | — | — | — | — | 183 | ||||||||||||||
| Net income available to common shareholders | $ | 17,404 | $ | 7,800 | $ | 11,848 | $ | 11,788 | $ | 10,558 | |||||||||
| NET INCOME PER COMMON SHARE | |||||||||||||||||||
| Basic | $ | 0.34 | $ | 0.20 | $ | 0.37 | $ | 0.37 | $ | 0.33 | |||||||||
| Diluted | 0.34 | 0.20 | 0.37 | 0.37 | 0.33 | ||||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||||||||
| Basic | 51,311,504 | 38,102,926 | 31,617,993 | 31,608,909 | 31,609,021 | ||||||||||||||
| Diluted | 51,490,182 | 38,194,964 | 31,815,333 | 31,686,150 | 31,610,620 | ||||||||||||||
SELECTED PERFORMANCE RATIOS AND FINANCIAL DATA - QUARTERLY
| As of and for the three months ended | |||||||||||||||||||
| (Dollars in thousands, except per share data) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
| Selected Performance Ratios (Annualized) | |||||||||||||||||||
| Return on average assets | 0.94 | % | 0.57 | % | 1.07 | % | 1.08 | % | 1.01 | % | |||||||||
| Net operating return on average assets (Non-GAAP) | 1.15 | 1.09 | 1.14 | 1.15 | 1.14 | ||||||||||||||
| Return on average shareholders' equity | 7.05 | 4.42 | 8.38 | 8.45 | 7.71 | ||||||||||||||
| Net operating return on average shareholders' equity (Non-GAAP) | 8.59 | 8.39 | 8.92 | 8.98 | 8.68 | ||||||||||||||
| Return on average tangible equity (Non-GAAP) | 11.89 | 7.18 | 12.36 | 12.57 | 11.90 | ||||||||||||||
| Net operating return on average tangible equity (Non-GAAP) | 14.35 | 13.14 | 13.34 | 13.13 | 11.94 | ||||||||||||||
| Yield on earning assets, tax equivalent | 4.45 | 4.57 | 4.72 | 4.83 | 4.84 | ||||||||||||||
| Cost of interest-bearing liabilities | 0.63 | 0.64 | 0.66 | 0.65 | 0.63 | ||||||||||||||
| Net interest margin, tax equivalent | 3.94 | 4.05 | 4.29 | 4.19 | 4.29 | ||||||||||||||
| Efficiency ratio | 63.45 | 75.43 | 59.57 | 57.58 | 64.47 | ||||||||||||||
| Operating efficiency ratio (Non-GAAP) | 55.50 | 58.12 | 57.46 | 57.27 | 60.04 | ||||||||||||||
| Per Common Share | |||||||||||||||||||
| Net income, basic | $ | 0.34 | $ | 0.20 | $ | 0.37 | $ | 0.37 | $ | 0.33 | |||||||||
| Net income, diluted | 0.34 | 0.20 | 0.37 | 0.37 | 0.33 | ||||||||||||||
| Net operating earnings, basic (Non-GAAP) | 0.41 | 0.39 | 0.40 | 0.40 | 0.38 | ||||||||||||||
| Net operating earnings, diluted (Non-GAAP) | 0.41 | 0.39 | 0.40 | 0.40 | 0.38 | ||||||||||||||
| Book value | 19.44 | 19.13 | 17.73 | 17.56 | 17.28 | ||||||||||||||
| Tangible book value (Non-GAAP) | 12.28 | 11.94 | 12.51 | 12.31 | 12.01 | ||||||||||||||
| Common shares outstanding | 51,577,575 | 51,480,284 | 31,726,767 | 31,711,901 | 31,712,021 | ||||||||||||||
| Asset Quality Data and Ratios | |||||||||||||||||||
| Nonperforming loans: | |||||||||||||||||||
| Nonaccrual loans | $ | 39,039 | $ | 27,981 | $ | 21,194 | $ | 27,830 | $ | 25,692 | |||||||||
| Accruing loans past due 90 days or more | 10,264 | 14,992 | 11,337 | 9,303 | 6,800 | ||||||||||||||
| Nonperforming purchased accounts receivable | 7,907 | — | — | — | — | ||||||||||||||
| Other real estate | 23,091 | 18,435 | 15,346 | 11,793 | 13,547 | ||||||||||||||
| Total nonperforming assets | $ | 80,301 | $ | 61,408 | $ | 47,877 | $ | 48,926 | $ | 46,039 | |||||||||
| Restructured loans not included in nonperforming assets | $ | 5,663 | $ | 5,147 | $ | 5,609 | $ | 2,564 | $ | 2,333 | |||||||||
| Net charge-offs to average loans (annualized) | 0.07 | % | 0.15 | % | 0.25 | % | 0.12 | % | 0.12 | % | |||||||||
| Allowance for loan losses to loans | 0.22 | 0.20 | 0.32 | 0.30 | 0.28 | ||||||||||||||
| Adjusted allowance for loan losses to loans (Non-GAAP) | 1.41 | 1.50 | 1.62 | 1.75 | 1.88 | ||||||||||||||
| Nonperforming loans to loans | 0.94 | 0.83 | 1.06 | 1.25 | 1.10 | ||||||||||||||
| Nonperforming assets to total assets | 1.08 | 0.83 | 1.07 | 1.12 | 1.06 | ||||||||||||||
| Capital Ratios | |||||||||||||||||||
| Tangible equity to tangible assets (Non-GAAP) | 8.94 | % | 8.72 | % | 9.21 | % | 9.30 | % | 9.16 | % | |||||||||
| Yadkin Financial Corporation1: | |||||||||||||||||||
| Tier 1 leverage | 9.10 | 12.32 | 9.42 | 9.40 | 9.22 | ||||||||||||||
| Common equity Tier 1 | 10.06 | 9.87 | 10.55 | 10.5 | 10.43 | ||||||||||||||
| Tier 1 risk-based capital | 10.43 | 10.24 | 10.59 | 10.55 | 10.43 | ||||||||||||||
| Total risk-based capital | 11.57 | 11.36 | 11.96 | 11.98 | 11.88 | ||||||||||||||
| Yadkin Bank1: | |||||||||||||||||||
| Tier 1 leverage | 9.77 | 13.25 | 10.34 | 10.35 | 10.17 | ||||||||||||||
| Common equity Tier 1 | 11.20 | 10.96 | 11.64 | 11.64 | 11.53 | ||||||||||||||
| Tier 1 risk-based capital | 11.20 | 10.96 | 11.64 | 11.64 | 11.53 | ||||||||||||||
| Total risk-based capital | 11.45 | 11.19 | 11.99 | 12.04 | 11.93 | ||||||||||||||
| 1 Regulatory capital ratios for Q2 2016 are estimates. | |||||||||||||||||||
YEAR TO DATE RESULTS OF OPERATIONS (UNAUDITED)
| Six months ended June 30, | |||||||
| (Dollars in thousands, except per share data) | 2016 | 2015 | |||||
| Interest income | |||||||
| Loans | $ | 112,316 | $ | 80,200 | |||
| Investment securities | 13,344 | 7,782 | |||||
| Federal funds sold and interest-earning deposits | 184 | 95 | |||||
| Total interest income | 125,844 | 88,077 | |||||
| Interest expense | |||||||
| Deposits | 7,980 | 5,962 | |||||
| Short-term borrowings | 2,166 | 620 | |||||
| Long-term debt | 4,244 | 2,992 | |||||
| Total interest expense | 14,390 | 9,574 | |||||
| Net interest income | 111,454 | 78,503 | |||||
| Provision for loan losses | 4,173 | 1,955 | |||||
| Net interest income after provision for loan losses | 107,281 | 76,548 | |||||
| Non-interest income | |||||||
| Service charges and fees on deposit accounts | 10,007 | 6,748 | |||||
| Government-guaranteed lending | 5,752 | 6,550 | |||||
| Mortgage banking | 5,473 | 2,955 | |||||
| Bank-owned life insurance | 1,285 | 937 | |||||
| Gain on sales of available for sale securities | 194 | 85 | |||||
| Gain on sale of trust business | 417 | — | |||||
| Other | 3,863 | 2,364 | |||||
| Total non-interest income | 26,991 | 19,639 | |||||
| Non-interest expense | |||||||
| Salaries and employee benefits | 40,979 | 30,593 | |||||
| Occupancy and equipment | 12,850 | 9,436 | |||||
| Data processing | 4,923 | 3,817 | |||||
| Professional services | 2,655 | 2,499 | |||||
| FDIC insurance premiums | 1,591 | 1,486 | |||||
| Foreclosed asset expenses | 448 | 633 | |||||
| Loan, collection, and repossession expense | 2,144 | 1,786 | |||||
| Merger and conversion costs | 16,866 | 195 | |||||
| Restructuring charges | 46 | 3,201 | |||||
| Amortization of other intangible assets | 2,723 | 1,592 | |||||
| Other | 9,704 | 8,036 | |||||
| Total non-interest expense | 94,929 | 63,274 | |||||
| Income before income taxes | 39,343 | 32,913 | |||||
| Income tax expense | 14,140 | 11,922 | |||||
| Net income | 25,203 | 20,991 | |||||
| Dividends on preferred stock | — | 821 | |||||
| Net income available to common shareholders | $ | 25,203 | $ | 20,170 | |||
| NET INCOME PER COMMON SHARE | |||||||
| Basic | $ | 0.56 | $ | 0.64 | |||
| Diluted | 0.56 | 0.64 | |||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||
| Basic | 44,707,215 | 31,607,971 | |||||
| Diluted | 44,836,812 | 31,609,785 | |||||
QUARTERLY BALANCE SHEETS (UNAUDITED)
| Ending balances | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | June 30, 2016 | March 31, 2016 | December 31, 2015 (1) | September 30, 2015 | June 30, 2015 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 70,637 | $ | 67,923 | $ | 60,783 | $ | 54,667 | $ | 65,620 | ||||||||||
| Interest-earning deposits with banks | 49,744 | 42,892 | 50,885 | 23,088 | 57,141 | |||||||||||||||
| Federal funds sold | 155 | — | 250 | — | 200 | |||||||||||||||
| Investment securities available for sale | 1,038,307 | 1,103,444 | 689,132 | 713,492 | 649,015 | |||||||||||||||
| Investment securities held to maturity | 38,959 | 39,071 | 39,182 | 39,292 | 39,402 | |||||||||||||||
| Loans held for sale | 139,513 | 53,820 | 47,287 | 37,962 | 38,622 | |||||||||||||||
| Loans | 5,268,768 | 5,208,752 | 3,076,544 | 2,979,779 | 2,955,771 | |||||||||||||||
| Allowance for loan losses | (11,633 | ) | (10,231 | ) | (9,769 | ) | (9,000 | ) | (8,358 | ) | ||||||||||
| Net loans | 5,257,135 | 5,198,521 | 3,066,775 | 2,970,779 | 2,947,413 | |||||||||||||||
| Purchased accounts receivable | 9,657 | 57,175 | 52,688 | 69,383 | 69,933 | |||||||||||||||
| Federal Home Loan Bank stock | 45,284 | 41,851 | 24,844 | 22,932 | 21,976 | |||||||||||||||
| Premises and equipment, net | 111,245 | 119,244 | 73,739 | 75,530 | 77,513 | |||||||||||||||
| Bank-owned life insurance | 141,930 | 141,170 | 78,863 | 78,397 | 77,927 | |||||||||||||||
| Other real estate | 23,091 | 18,435 | 15,346 | 11,793 | 13,547 | |||||||||||||||
| Deferred tax asset, net | 67,829 | 79,342 | 55,607 | 54,402 | 62,179 | |||||||||||||||
| Goodwill | 338,180 | 337,711 | 152,152 | 152,152 | 152,152 | |||||||||||||||
| Other intangible assets, net | 30,745 | 32,416 | 13,579 | 14,324 | 15,085 | |||||||||||||||
| Accrued interest receivable and other assets | 92,814 | 87,995 | 53,032 | 44,033 | 39,327 | |||||||||||||||
| Total assets | $ | 7,455,225 | $ | 7,421,010 | $ | 4,474,144 | $ | 4,362,226 | $ | 4,327,052 | ||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Non-interest demand | $ | 1,156,507 | $ | 1,151,128 | $ | 744,053 | $ | 730,928 | $ | 697,653 | ||||||||||
| Interest-bearing demand | 1,119,970 | 1,158,417 | 523,719 | 484,187 | 475,597 | |||||||||||||||
| Money market and savings | 1,620,217 | 1,576,974 | 1,024,617 | 1,001,739 | 991,982 | |||||||||||||||
| Time | 1,441,892 | 1,463,193 | 1,017,908 | 1,030,915 | 1,077,862 | |||||||||||||||
| Total deposits | 5,338,586 | 5,349,712 | 3,310,297 | 3,247,769 | 3,243,094 | |||||||||||||||
| Short-term borrowings | 811,383 | 761,243 | 375,500 | 395,500 | 355,500 | |||||||||||||||
| Long-term debt | 229,012 | 198,320 | 194,967 | 129,859 | 147,265 | |||||||||||||||
| Accrued interest payable and other liabilities | 73,706 | 127,093 | 30,831 | 32,301 | 33,077 | |||||||||||||||
| Total liabilities | 6,452,687 | 6,436,368 | 3,911,595 | 3,805,429 | 3,778,936 | |||||||||||||||
| Shareholders' equity | ||||||||||||||||||||
| Common stock | 51,578 | 51,480 | 31,727 | 31,712 | 31,712 | |||||||||||||||
| Common stock warrant | 717 | 717 | 717 | 717 | 717 | |||||||||||||||
| Additional paid-in capital | 905,727 | 904,711 | 492,828 | 492,387 | 492,151 | |||||||||||||||
| Retained earnings | 45,895 | 33,621 | 44,794 | 36,109 | 27,481 | |||||||||||||||
| Accumulated other comprehensive loss | (1,379 | ) | (5,887 | ) | (7,517 | ) | (4,128 | ) | (3,945 | ) | ||||||||||
| Total shareholders' equity | 1,002,538 | 984,642 | 562,549 | 556,797 | 548,116 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 7,455,225 | $ | 7,421,010 | $ | 4,474,144 | $ | 4,362,226 | $ | 4,327,052 | ||||||||||
| (1) Derived from audited financial statements as of December 31, 2015. | ||||||||||||||||||||
QUARTERLY NET INTEREST MARGIN ANALYSIS
| Three months ended June 30, 2016 | Three months ended March 31, 2016 | Three months ended June 30, 2015 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest(1) | Yield/Cost(1) | Average Balance | Interest(1) | Yield/Cost(1) | Average Balance | Interest(1) | Yield/Cost(1) | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Loans(2) | $ | 5,322,521 | $ | 64,478 | 4.87 | % | $ | 3,843,108 | $ | 48,065 | 5.03 | % | $ | 2,966,953 | $ | 40,468 | 5.47 | % | ||||||||||||||
| Investment securities(3) | 1,150,664 | 7,684 | 2.69 | 905,582 | 6,460 | 2.87 | 685,796 | 4,024 | 2.35 | |||||||||||||||||||||||
| Federal funds and other | 59,357 | 81 | 0.55 | 63,660 | 103 | 0.65 | 49,407 | 45 | 0.37 | |||||||||||||||||||||||
| Total interest-earning assets | 6,532,542 | 72,243 | 4.45 | % | 4,812,350 | 54,628 | 4.57 | % | 3,702,156 | 44,537 | 4.83 | % | ||||||||||||||||||||
| Goodwill | 337,485 | 216,758 | 152,152 | |||||||||||||||||||||||||||||
| Other intangibles, net | 31,797 | 20,032 | 15,570 | |||||||||||||||||||||||||||||
| Other non-interest-earning assets | 514,206 | 437,297 | 401,690 | |||||||||||||||||||||||||||||
| Total assets | $ | 7,416,030 | $ | 5,486,437 | $ | 4,271,568 | ||||||||||||||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 1,141,173 | $ | 536 | 0.19 | % | $ | 741,589 | $ | 303 | 0.16 | % | $ | 475,546 | $ | 158 | 0.13 | % | ||||||||||||||
| Money market and savings | 1,582,191 | 1,115 | 0.28 | 1,202,797 | 776 | 0.26 | 997,732 | 718 | 0.29 | |||||||||||||||||||||||
| Time | 1,448,912 | 2,782 | 0.77 | 1,196,072 | 2,387 | 0.80 | 1,078,460 | 2,197 | 0.82 | |||||||||||||||||||||||
| Total interest-bearing deposits | 4,172,276 | 4,433 | 0.43 | 3,140,458 | 3,466 | 0.44 | 2,551,738 | 3,073 | 0.48 | |||||||||||||||||||||||
| Short-term borrowings | 758,180 | 1,360 | 0.72 | 475,267 | 808 | 0.68 | 320,694 | 331 | 0.41 | |||||||||||||||||||||||
| Long-term debt | 280,520 | 2,375 | 3.41 | 252,442 | 1,867 | 2.97 | 136,377 | 1,504 | 4.42 | |||||||||||||||||||||||
| Total interest-bearing liabilities | 5,210,976 | 8,168 | 0.63 | % | 3,868,167 | 6,141 | 0.64 | % | 3,008,809 | 4,908 | 0.65 | % | ||||||||||||||||||||
| Non-interest-bearing deposits | 1,147,659 | 864,192 | 676,858 | |||||||||||||||||||||||||||||
| Other liabilities | 64,282 | 43,786 | 27,090 | |||||||||||||||||||||||||||||
| Total liabilities | 6,422,917 | 4,776,145 | 3,712,757 | |||||||||||||||||||||||||||||
| Shareholders’ equity | 993,113 | 710,292 | 558,811 | |||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 7,416,030 | $ | 5,486,437 | $ | 4,271,568 | ||||||||||||||||||||||||||
| Net interest income, taxable equivalent | $ | 64,075 | $ | 48,487 | $ | 39,629 | ||||||||||||||||||||||||||
| Interest rate spread | 3.82 | % | 3.93 | % | 4.18 | % | ||||||||||||||||||||||||||
| Tax equivalent net interest margin | 3.94 | % | 4.05 | % | 4.29 | % | ||||||||||||||||||||||||||
| Percentage of average interest-earning assets to average interest-bearing liabilities | 125.36 | % | 124.41 | % | 123.04 | % | ||||||||||||||||||||||||||
| (1) Interest amounts and yields are stated on a taxable-equivalent basis assuming a federal income tax rate of 35 percent. | ||||||||||||||||||||||||||||||||
| (2) Loans include loans held for sale and non-accrual loans. | ||||||||||||||||||||||||||||||||
| (3) Investment securities include investments in FHLB stock. | ||||||||||||||||||||||||||||||||
APPENDIX - RECONCILIATION OF NON-GAAP MEASURES - QUARTERLY
| As of and for the three months ended | |||||||||||||||||||
| (Dollars in thousands, except per share data) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | ||||||||||||||
| Operating Earnings | |||||||||||||||||||
| Net income | $ | 17,404 | $ | 7,800 | $ | 11,848 | $ | 11,788 | $ | 10,741 | |||||||||
| Securities (gains) losses | (64 | ) | (130 | ) | 85 | — | (84 | ) | |||||||||||
| Gain on sale of trust business | (417 | ) | — | — | — | — | |||||||||||||
| Gain on sale of branches | — | — | (88 | ) | — | — | |||||||||||||
| Merger and conversion costs | 6,531 | 10,335 | 803 | 104 | (25 | ) | |||||||||||||
| Restructuring charges | 25 | 21 | 282 | 50 | 2,294 | ||||||||||||||
| Income tax effect of adjustments | (2,269 | ) | (3,217 | ) | (311 | ) | (59 | ) | (836 | ) | |||||||||
| DTA revaluation from reduction in state income tax rates, net of federal benefit | — | — | — | 651 | — | ||||||||||||||
| Net operating earnings (Non-GAAP) | 21,210 | 14,809 | 12,619 | 12,534 | 12,090 | ||||||||||||||
| Dividends on preferred stock | — | — | — | — | 183 | ||||||||||||||
| Net operating earnings available to common shareholders (Non-GAAP) | $ | 21,210 | $ | 14,809 | $ | 12,619 | $ | 12,534 | $ | 11,907 | |||||||||
| Net operating earnings per common share: | |||||||||||||||||||
| Basic (Non-GAAP) | $ | 0.41 | $ | 0.39 | $ | 0.40 | $ | 0.40 | $ | 0.38 | |||||||||
| Diluted (Non-GAAP) | 0.41 | 0.39 | 0.40 | 0.40 | 0.38 | ||||||||||||||
| Pre-Tax, Pre-Provision Operating Earnings | |||||||||||||||||||
| Net income | $ | 17,404 | $ | 7,800 | $ | 11,848 | $ | 11,788 | $ | 10,741 | |||||||||
| Provision for loan losses | 2,298 | 1,875 | 2,714 | 1,576 | 994 | ||||||||||||||
| Income tax expense | 9,219 | 4,920 | 6,182 | 7,891 | 6,076 | ||||||||||||||
| Pre-tax, pre-provision income | 28,921 | 14,595 | 20,744 | 21,255 | 17,811 | ||||||||||||||
| Securities (gains) losses | (64 | ) | (130 | ) | 85 | — | (84 | ) | |||||||||||
| Gain on sale of trust business | (417 | ) | — | — | — | — | |||||||||||||
| Gain on sale of branches | — | — | (88 | ) | — | — | |||||||||||||
| Merger and conversion costs | 6,531 | 10,335 | 803 | 104 | (25 | ) | |||||||||||||
| Restructuring charges | 25 | 21 | 282 | 50 | 2,294 | ||||||||||||||
| Pre-tax, pre-provision operating earnings (Non-GAAP) | $ | 34,996 | $ | 24,821 | $ | 21,826 | $ | 21,409 | $ | 19,996 | |||||||||
| Operating Non-Interest Income | |||||||||||||||||||
| Non-interest income | $ | 15,637 | $ | 11,354 | $ | 9,966 | $ | 10,798 | $ | 10,800 | |||||||||
| Securities (gains) losses | (64 | ) | (130 | ) | 85 | — | (84 | ) | |||||||||||
| Gain on sale of trust business | (417 | ) | — | — | — | — | |||||||||||||
| Gain on sale of branches | — | — | (88 | ) | — | — | |||||||||||||
| Operating non-interest income (Non-GAAP) | $ | 15,156 | $ | 11,224 | $ | 9,963 | $ | 10,798 | $ | 10,716 | |||||||||
| Operating Non-Interest Expense | |||||||||||||||||||
| Non-interest expense | $ | 50,205 | $ | 44,804 | $ | 30,564 | $ | 28,848 | $ | 32,316 | |||||||||
| Merger and conversion costs | (6,531 | ) | (10,335 | ) | (803 | ) | (104 | ) | 25 | ||||||||||
| Restructuring charges | (25 | ) | (21 | ) | (282 | ) | (50 | ) | (2,294 | ) | |||||||||
| Operating non-interest expense (Non-GAAP) | $ | 43,649 | $ | 34,448 | $ | 29,479 | $ | 28,694 | $ | 30,047 | |||||||||
| Operating Efficiency Ratio | |||||||||||||||||||
| Efficiency ratio | 63.45 | % | 75.43 | % | 59.57 | % | 57.58 | % | 64.47 | % | |||||||||
| Adjustment for securities gains (losses) | 0.05 | 0.16 | (0.10 | ) | — | 0.11 | |||||||||||||
| Adjustment for gain on sale of trust business | 0.34 | — | — | — | — | ||||||||||||||
| Adjustment for gain on sale of branches | — | — | 0.10 | — | — | ||||||||||||||
| Adjustment for merger and conversion costs | (8.31 | ) | (17.43 | ) | (1.56 | ) | (0.21 | ) | 0.04 | ||||||||||
| Adjustment for restructuring costs | (0.03 | ) | (0.04 | ) | (0.55 | ) | (0.10 | ) | (4.58 | ) | |||||||||
| Operating efficiency ratio (Non-GAAP) | 55.50 | % | 58.12 | % | 57.46 | % | 57.27 | % | 60.04 | % | |||||||||
| Taxable-Equivalent Net Interest Income | |||||||||||||||||||
| Net interest income | $ | 63,489 | $ | 48,045 | $ | 41,342 | $ | 39,305 | $ | 39,327 | |||||||||
| Taxable-equivalent adjustment | 586 | 442 | 325 | 314 | 302 | ||||||||||||||
| Taxable-equivalent net interest income (Non-GAAP) | $ | 64,075 | $ | 48,487 | $ | 41,667 | $ | 39,619 | $ | 39,629 | |||||||||
| Core Net Interest Income and Net Interest Margin (Annualized) | |||||||||||||||||||
| Taxable-equivalent net interest income (Non-GAAP) | $ | 64,075 | $ | 48,487 | $ | 41,667 | $ | 39,619 | $ | 39,629 | |||||||||
| Acquisition accounting amortization / accretion adjustments related to: | |||||||||||||||||||
| Loans | (4,781 | ) | (3,565 | ) | (2,970 | ) | (3,404 | ) | (4,035 | ) | |||||||||
| Deposits | (471 | ) | (553 | ) | (522 | ) | (713 | ) | (863 | ) | |||||||||
| Borrowings and debt | 60 | 119 | 170 | 155 | 132 | ||||||||||||||
| Income from issuer call of debt security | — | (165 | ) | (742 | ) | — | — | ||||||||||||
| Core net interest income (Non-GAAP) | $ | 58,883 | $ | 44,323 | $ | 37,603 | $ | 35,657 | $ | 34,863 | |||||||||
| Divided by: average interest-earning assets | $ | 6,532,542 | $ | 4,812,350 | $ | 3,851,009 | $ | 3,750,223 | $ | 3,702,156 | |||||||||
| Taxable-equivalent net interest margin (Non-GAAP) | 3.94 | % | 4.05 | % | 4.29 | % | 4.19 | % | 4.29 | % | |||||||||
| Core taxable-equivalent net interest margin (Non-GAAP) | 3.63 | % | 3.70 | % | 3.87 | % | 3.77 | % | 3.78 | % | |||||||||
| Adjusted Allowance for Loan Losses | |||||||||||||||||||
| Allowance for loan losses | $ | 11,633 | $ | 10,231 | $ | 9,769 | $ | 9,000 | $ | 8,358 | |||||||||
| Net acquisition accounting fair value discounts to loans | 62,745 | 68,063 | 40,188 | 43,095 | 47,160 | ||||||||||||||
| Adjusted allowance for loan losses (Non-GAAP) | $ | 74,378 | $ | 78,294 | $ | 49,957 | $ | 52,095 | $ | 55,518 | |||||||||
| Divided by: total loans | $ | 5,268,768 | $ | 5,208,752 | $ | 3,076,544 | $ | 2,979,779 | $ | 2,955,771 | |||||||||
| Adjusted allowance for loan losses to loans (Non-GAAP) | 1.41 | % | 1.50 | % | 1.62 | % | 1.75 | % | 1.88 | % | |||||||||
| Tangible Equity to Tangible Assets | |||||||||||||||||||
| Shareholders' equity | $ | 1,002,538 | $ | 984,642 | $ | 562,549 | $ | 556,797 | $ | 548,116 | |||||||||
| Less goodwill and other intangible assets | 368,925 | 370,127 | 165,731 | 166,476 | 167,237 | ||||||||||||||
| Tangible equity (Non-GAAP) | $ | 633,613 | $ | 614,515 | $ | 396,818 | $ | 390,321 | $ | 380,879 | |||||||||
| Total assets | $ | 7,455,225 | $ | 7,421,010 | $ | 4,474,144 | $ | 4,362,226 | $ | 4,327,052 | |||||||||
| Less goodwill and other intangible assets | 368,925 | 370,127 | 165,731 | 166,476 | 167,237 | ||||||||||||||
| Tangible assets | $ | 7,086,300 | $ | 7,050,883 | $ | 4,308,413 | $ | 4,195,750 | $ | 4,159,815 | |||||||||
| Tangible equity to tangible assets (Non-GAAP) | 8.94 | % | 8.72 | % | 9.21 | % | 9.30 | % | 9.16 | % | |||||||||
| Tangible Book Value per Share | |||||||||||||||||||
| Tangible equity (Non-GAAP) | $ | 633,613 | $ | 614,515 | $ | 396,818 | $ | 390,321 | $ | 380,879 | |||||||||
| Divided by: common shares outstanding | 51,577,575 | 51,480,284 | 31,726,767 | 31,711,901 | 31,712,021 | ||||||||||||||
| Tangible book value per common share (Non-GAAP) | $ | 12.28 | $ | 11.94 | $ | 12.51 | $ | 12.31 | $ | 12.01 | |||||||||
APPENDIX - RECONCILIATION OF NON-GAAP MEASURES-YEAR TO DATE
| Six months ended June 30, | |||||||
| (Dollars in thousands, except per share data) | 2016 | 2015 | |||||
| Operating Earnings | |||||||
| Net income | $ | 25,203 | $ | 20,991 | |||
| Securities gains | (194 | ) | (85 | ) | |||
| Gain on sale of trust business | (417 | ) | — | ||||
| Merger and conversion costs | 16,866 | 195 | |||||
| Restructuring charges | 46 | 3,201 | |||||
| Income tax effect of adjustments | (5,486 | ) | (1,267 | ) | |||
| Net operating earnings (Non-GAAP) | 36,018 | 23,035 | |||||
| Dividends on preferred stock | — | 821 | |||||
| Net operating earnings available to common shareholders (Non-GAAP) | $ | 36,018 | $ | 22,214 | |||
| Net operating earnings per common share: | |||||||
| Basic (Non-GAAP) | $ | 0.81 | $ | 0.70 | |||
| Diluted (Non-GAAP) | 0.80 | 0.70 | |||||
| Pre-Tax, Pre-Provision Operating Earnings | |||||||
| Net income | $ | 25,203 | $ | 20,991 | |||
| Provision for loan losses | 4,173 | 1,955 | |||||
| Income tax expense | 14,140 | 11,922 | |||||
| Pre-tax, pre-provision income | 43,516 | 34,868 | |||||
| Securities gains | (194 | ) | (85 | ) | |||
| Gain on sale of trust business | (417 | ) | — | ||||
| Merger and conversion costs | 16,866 | 195 | |||||
| Restructuring charges | 46 | 3,201 | |||||
| Pre-tax, pre-provision operating earnings (Non-GAAP) | $ | 59,817 | $ | 38,179 | |||
| Operating Non-Interest Income | |||||||
| Non-interest income | $ | 26,991 | $ | 19,639 | |||
| Securities gains | (194 | ) | (85 | ) | |||
| Gain on sale of trust business | (417 | ) | — | ||||
| Operating non-interest income (Non-GAAP) | $ | 26,380 | $ | 19,554 | |||
| Operating Non-Interest Expense | |||||||
| Non-interest expense | $ | 94,929 | $ | 63,274 | |||
| Merger and conversion costs | (16,866 | ) | (195 | ) | |||
| Restructuring charges | (46 | ) | (3,201 | ) | |||
| Operating non-interest expense (Non-GAAP) | $ | 78,017 | $ | 59,878 | |||
| Operating Efficiency Ratio | |||||||
| Efficiency ratio | 68.57 | % | 64.47 | % | |||
| Adjustment for securities gains | 0.09 | 0.06 | |||||
| Adjustment for gain on sale of trust business | 0.21 | — | |||||
| Adjustment for merger and conversion costs | (12.23 | ) | (0.21 | ) | |||
| Adjustment for restructuring costs | (0.04 | ) | (3.26 | ) | |||
| Operating efficiency ratio (Non-GAAP) | 56.60 | % | 61.06 | % | |||