PASO ROBLES, Calif., July 23, 2015 (GLOBE NEWSWIRE) -- Heritage Oaks Bancorp ("Heritage Oaks" or the "Company") (NASDAQ:HEOP), a bank holding company and parent of Heritage Oaks Bank (the "Bank"), reported net income available to common shareholders of $3.7 million, or $0.11 per dilutive common share, for the second quarter of 2015, compared to net income available to common shareholders of $2.9 million, or $0.09 per dilutive common share, for the second quarter of 2014, and net income available to common shareholders of $4.1 million, or $0.12 per dilutive common share for the first quarter of 2015. Net income available to common shareholders for the current quarter increased by $0.8 million compared to the second quarter of 2014, and declined by $0.3 million compared to the linked quarter.
Second Quarter 2015 Highlights
-
Gross loans declined by $16.2 million, or 1.3%, to $1.19 billion at June 30, 2015, compared to $1.21 billion at March 31, 2015, and increased by $94.3 million, or 8.6% compared to $1.10 billion, at June 30, 2014. New loan production totaled $79.8 million for the second quarter of 2015. Portfolio production was offset by $45.8 million of loan prepayments and pay-offs, and $12.9 million of pay downs on agribusiness lines attributable to the conclusion of certain of our agribusiness customers' growing seasons.
-
Total deposits grew by $51.3 million, or 3.5% to $1.51 billion at June 30, 2015, compared with $1.46 billion at March 31 2015, and grew by $117.5 million, or 8.4%, as compared to $1.39 billion at June 30, 2014. Non-interest bearing demand deposits grew 6.7% to $516.4 million compared to the March 31, 2015 balance, and represent 34.2% of total deposits at June 30, 2015, compared to 33.1% of total deposits at June 30, 2014.
-
Credit quality remains strong with non-accrual loans representing 0.97% of total gross loans at June 30, 2015, which improved from 0.98% for the linked quarter, and 1.04% at June 30, 2014. Net recoveries for the second quarter of 2015 were $69 thousand compared to $111 thousand in the linked quarter and charge-offs of $1.3 million in the second quarter of 2014. Total loans delinquent 30 to 89 days were 0.03% of total gross loans as of June 30, 2015. There was no provision for loan and lease losses recorded in the second quarter due to the continued improvement in credit quality.
-
Regulatory capital ratios for the Bank at June 30, 2015 were 9.41% for Tier 1 Leverage Capital, 13.73% for Total Risk Based Capital, and 12.48% for Common Equity Tier 1 Capital to Total Risk Based Capital.
- On July 22, 2015 the board of directors declared a dividend of $0.06 per common share for shareholders of record as of August 17, 2015, which is payable to our common shareholders on August 31, 2015.
"Our relationship banking activities continue to bear fruit, as evidenced by our 8.4% deposit growth during the first six months of 2015. New loan originations were also strong at $79.8 million and these new relationships further contribute to our core franchise value. The confluence of an increase in loan pay-offs with the cyclical pay-down of our agribusiness operating lines resulted in contraction of our loan portfolio during the second quarter. The elevated loan payoffs have primarily occurred in our commercial, agribusiness, and consumer real estate loan portfolios. We are rolling out our interest rate swap program this quarter which will allow us to offer more competitive fixed rate financing options to customers, while helping us continue to effectively manage our interest rate risk," stated Simone Lagomarsino, President and Chief Executive Officer of Heritage Oaks Bancorp.
Net Income Available to Common Shareholders
Net income available to common shareholders for the second quarter of 2015 was $3.7 million, or $0.11 per diluted common share, compared with net income of $2.9 million, or $0.09 per diluted common share, for the second quarter of 2014. Net income available to common shareholders for the quarter ended March 31, 2015 was $4.1 million, or $0.12 per diluted common share. Earnings before income taxes, provision for loan and lease losses, gain on sale of securities, and merger, restructure and integration costs for the current quarter decreased by $0.1 million, as compared to the linked quarter, and increased by $0.6 million as compared to the second quarter of 2014, primarily due to decreases in non-interest expense.
Net income available to common shareholders for the six months ended June 30, 2015 was $7.8 million, or $0.23 per dilutive common share as compared to $1.2 million or $0.04 per dilutive common share for the six months ended June 30, 2014. The $6.6 million increase in net income available to common shareholders for the first six months of 2015 as compared to the same period a year earlier was primarily due to $8.0 million of merger, restructure and integration costs related to the February 28, 2014 acquisition of Mission Community Bancorp ("MISN" or the "MISN Transaction") incurred during the first six months of 2014. Earnings before income taxes, provision for loan and lease losses, gain on sale of securities, and merger, restructure and integration costs increased by $2.5 million for the six months ended June 30, 2015, as compared to the same prior year period, primarily as a result of the inclusion of MISN earnings in the Company's earnings for a full six months in 2015.
Net Interest Income
Net interest income was $15.2 million, or 3.67% of average earning assets ("net interest margin"), for the second quarter of 2015 compared with $15.2 million, or a 3.98% net interest margin, for the same period a year earlier, and $15.5 million, or a 3.92% net interest margin, for the quarter ended March 31, 2015. On a year over year basis, net interest income was relatively flat due primarily to offsetting factors including: an increase in interest income from other investments attributable to a special dividend paid by the Federal Home Loan Bank ("FHLB") on June 23, 2015 of $0.3 million, a $0.2 million decrease in interest income from investment securities, and a $0.2 million increase in interest expense on other borrowings.
Net interest income decreased for the quarter ended June 30, 2015, as compared to the first quarter of 2015 by $0.3 million due to the following factors: a decline in loan interest income of $0.5 million driven by a reduction in the yield and average balance of the loan portfolio, and an increase in deposit and borrowing costs of $0.1 million which was however, partially offset by an increase in interest income from other investments due to the previously mentioned special FHLB dividend.
The net interest margin was 3.67% for the second quarter of 2015, compared to 3.98% for the same prior year period, and 3.92% for the linked quarter ended March 31, 2015. The most significant driver of the decline in the net interest margin compared to both the second quarter of 2014 and the linked quarter was a decline in loan yields. Loan yields declined by 46 basis points to 4.82%, as compared to 5.28% for second quarter of 2014, and by 30 basis points as compared to 5.12% for the linked quarter.
The primary driver of the decline in loan yields for the current quarter as compared to both the second quarter of 2014, and to the linked quarter was a decline in purchased loan discount accretion. Purchased loan discount accretion contributed 15 basis points during the current quarter, 33 basis points during the second quarter of 2014, and 37 basis points for the linked quarter to loan yields. The decline in purchased loan discount accretion for the second quarter of 2015, as compared to both the second quarter of 2014, and the linked quarter, is attributable to a lower level of accelerated loan discount accretion associated with loan pay-offs, and to a gradual decline in scheduled accretion due to loan maturities and pay-offs.
The cost of deposits was 0.25% for the second quarter of 2015, unchanged compared to the prior quarter, and down 2 basis points compared to 0.27% for the second quarter of 2014.
Provision for Loan and Lease Losses
No provisions for loan and lease losses were recorded for the three months ended June 30, 2015, or 2014, or the linked quarter ended March 31, 2015. The Company has not required a loan and lease loss provision since 2012 due to improvements in credit quality over the past three years. Net recoveries were 0.02% of average loans outstanding, for the quarter ended June 30, 2015, compared with net charge-offs of 0.48% of average loans outstanding for the same period a year earlier, and net recoveries of 0.04% of average loans outstanding for the linked quarter.
Non-Interest Income
Non-interest income for the second quarter of 2015 was $2.3 million, compared to $2.5 million for the same period a year earlier, and $3.0 million for the linked quarter ended March 31, 2015. Non-interest income declined by $0.2 million for the current quarter as compared to the same prior year quarter, primarily due to decreases in bank fee and service charge income, and gain on sale of investment securities, which were partially offset by increased mortgage banking revenue. Compared to the linked quarter, non-interest income decreased by $0.7 million, primarily because we did not sell any investment securities during the second quarter, which resulted in a decrease in gain on sale of investment securities of $0.5 million.
Securities gains have declined over the last year and since the prior quarter, because we have concluded certain portfolio repositioning efforts at the end of the first quarter of 2015, which resulted in net gains on sale over the last eighteen months. Bank service charge income declined over the last year, despite increases in deposit balances, because the Bank has exited several "money service businesses" as part of our Bank Secrecy Act and Anti-Money Laundering Program ("BSA/AML Program") remediation efforts.
Non-Interest Expense
Non-interest expense declined by $1.6 million, or 12.0%, to $11.4 million for the quarter ended June 30, 2015 compared to $13.0 million for the quarter ended June 30, 2014. Non-interest expense for the second quarter of 2015 decreased by $0.4 million, or 3.3% from $11.8 million for the linked quarter.
The decrease in non-interest expense for the second quarter of 2015 as compared to the second quarter a year ago was largely the result of $0.9 million of merger, restructure and integration costs recorded in the second quarter of 2014 related to the MISN Transaction. Salaries and employee benefit costs also declined by $0.6 million for the second quarter of 2015 as compared to the same prior year period as a result of the branch consolidation that was completed in the second half of 2014. In addition, information technology costs decreased by $0.4 million due primarily to the elimination of duplicative data processing costs, which existed in the second quarter of 2014, but were eliminated after the July 2014 systems integration. Other expense also decreased by $0.4 million driven by a reversal of mortgage repurchase reserves, which was due to the successful settlement of outstanding claims. These decreases were offset by a $0.7 million increase in professional services related to additional BSA/AML Program consulting work of $0.4 million and an increase in legal services expense. Sales and marketing expenses have also been elevated in 2015, as compared to the first half of 2014, primarily due to our new "We're Central to the Coast" marketing campaign, which consists of increased television and radio advertising as compared to prior years' campaigns.
The $0.4 million decrease in non-interest expense during the second quarter of 2015, as compared to the prior quarter, was primarily attributable to decreased salary and benefit costs of $0.5 million. Other linked quarter variances included a $0.3 million increase in professional services expense, which was largely offset by a $0.2 million decrease in other expense.
Operating Efficiency
The Company's operating efficiency ratio improved to 64.04% for the second quarter of 2015 as compared to 71.97% for the second quarter of 2014, and 64.13% for the linked quarter. Our operating efficiency ratio for the quarter ended June 30, 2015 reflects the impact of the reduced non-interest expenses discussed above. Total non-interest expense as a percentage of average assets, another measure of the Company's efficiency, was 2.55% for the second quarter of 2015, compared to 3.12% for second quarter of 2014, and 2.75% for the linked quarter ended March 31, 2015.
Income Taxes
Income tax expense was $2.3 million for the quarter ended June 30, 2015 compared with $1.7 million for the same period a year earlier. For the linked quarter ended March 31, 2015, income tax expense was $2.6 million. The Company's effective tax rate for the second quarter of 2015 was 37.5% compared with 37.1% for the same period a year ago, and 39.1% for the linked quarter ended March 31, 2015.
Balance Sheet
Total assets increased by $150.7 million, or 9.0%, to $1.8 billion at June 30, 2015 compared to June 30, 2014, and $51.8 million, or 2.9%, compared to March 31, 2015. Cash and cash equivalents increased $45.3 million, or 54.0%, to $129.0 million at June 30, 2015 compared to June 30, 2014, and $53.5 million, or 70.9%, compared to March 31, 2015. The increase in the Company's cash position is primarily the result of successful deposit gathering efforts.
Investment securities increased by $15.3 million, or 4.2% to $379.8 million, compared to $364.5 million at March 31, 2015. We currently target a 2.75 to 3.25 year effective duration for the entire securities portfolio. At June 30, 2015, the effective duration of the securities portfolio was 3.2 years.
Total gross loans increased by $94.3 million, or 8.6%, to $1.2 billion at June 30, 2015 compared to June 30, 2014, and decreased $16.2 million, or 1.3%, compared to March 31, 2015. New loan production for the held for investment portfolio ("portfolio loans") was $43.2 million during the quarter ended June 30, 2015. However, the Company experienced $45.8 million of loan pay-offs during the second quarter of 2015 representing an 11.7% decrease compared to the linked quarter. Pay-offs have been elevated above the average $32.2 million per quarter level experienced in 2014 (after the close of the MISN Transaction) for the past two quarters. A significant portion of such pay-offs can be attributed to the recent decline in long-term interest rates, and a concurrent increase in competition for commercial real estate loans in the markets we serve.
Mortgage loans originated for sale for the second quarter of 2015 were $36.6 million, and decreased slightly by $3.4 million, from $40.0 million reported for the linked quarter. Total mortgage loan production, originated for sale for the year to date through June 30, 2015 is $76.6 million, compared to $40.7 million for the same period in 2014.
Total deposits increased by $117.5 million, or 8.4%, to $1.51 billion as of June 30, 2015 from $1.40 billion at June 30, 2014, and grew by $51.4 million, or 3.5%, from $1.46 billion at March 31, 2015. Non-interest bearing deposits increased by $32.3 million, or 6.7%, during the second quarter of 2015, and by $54.9 million, or 11.9%, since June 30, 2014.
Total shareholders' equity was $202.1 million at June 30, 2015, an increase of $10.9 million, or 5.7%, compared to June 30, 2014, and increased by $0.1 million, or 0.1%, compared to March 31, 2015. A decline in the unrealized gain on our securities portfolio, and second quarter shareholder dividend payment offset the contribution of net income to shareholders' equity and resulted in the nominal increase for the quarter.
Classified assets at June 30, 2015 totaled $49.5 million compared to $51.6 million at March 31, 2015, a $2.1 million or 4.0% decrease, and increased $5.3 million, or 12.0%, from $44.2 million at June 30, 2014. Non-performing assets were $12.0 million at June 30, 2015 compared to $12.3 million at March 31, 2015 representing a $0.3 million or 2.7% decrease over the linked quarter end balance, and increased by $0.3 million, or 2.5%, from the $11.7 million balance reported at June 30, 2014. As of June 30, 2015, 75% of our non-accrual loans are current and are paying according to their contractual terms. Furthermore, 40% of our total non-accrual loans are attributable to one customer whose loans were restructured a few years ago. The customer has been paying the loans in accordance with the modified terms. Since the initial restructuring the customer has paid down 34% of the principal balance.
Allowance for Loan and Lease Losses
The allowance for loan and lease losses ("ALLL") as a percentage of gross loans declined from 1.52% at June 30, 2014 to 1.43% at June 30, 2015. The decline in the ALLL as a percentage of gross loans over the last twelve months has been driven by a decrease in our historical loss percentages, and a decline in the amount of specific loan loss reserves required for impaired loans. The combined un-accreted purchase discounts for acquired loans and ALLL represent 1.96% of gross loans as of June 30, 2015, compared to 1.95% as of March 31, 2015.
As of June 30, 2015, MISN acquired loans have an ALLL of $0.9 million or 0.41% of the remaining acquired MISN loan portfolio. The remaining un-accreted fair market value discount on MISN loans was $6.4 million at June 30, 2015 and represents 3.06% of the remaining balance of MISN loans.
Due to continued heightened concerns regarding the effects of the California drought upon our agribusiness loan customers and related businesses, the Bank has provided a $1.5 million qualitative allocation in its ALLL to address these concerns, which allocation accounts for 8.8% of the total ALLL at June 30, 2015. Management will continue to monitor the drought as it relates to our agribusiness customers and the local economy.
Regulatory Capital
The Company's and the Bank's regulatory capital ratios exceeded the ratios generally required to be considered a "well capitalized" financial institution for regulatory purposes. The Tier I Leverage Ratios for the Company and the Bank were 10.22%, and 9.41%, respectively, at June 30, 2015 compared with the requirement of 5.00% to generally be considered a "well capitalized" financial institution. The Total Risk-Based Capital Ratios for the Company and the Bank were 14.80%, and 13.73%, respectively, at June 30, 2015, compared with the requirement of 10.00% to generally be considered a "well capitalized" financial institution. Basel III regulatory capital guidance became effective for the Company and the Bank on January 1, 2015. The Basel III framework incorporates a new regulatory measure called the Common Equity Tier 1 Capital Ratio. The Common Equity Tier 1 Capital Ratio for the Company and the Bank were 12.96%, and 12.48%, respectively, at June 30, 2015, compared with the requirement of 6.5% to generally be considered a "well capitalized" financial institution for regulatory purposes. The decline in the Bank's regulatory capital ratios as compared to the prior quarter was due to a $10.0 million dividend paid by the Bank to the holding company to support cash flow needs of our holding company, such as future shareholder dividend payments.
BSA Consent Order
We have continued to make progress in addressing the issues identified in the BSA Consent Order that we entered into with our regulators in November of 2014. However, we still have more work to do in order to fully remediate the issues identified in the BSA Consent Order.
Conference Call
The Company will host a conference call to discuss the second quarter results at 8:00 a.m. PDT on July 24, 2015. Media representatives, analysts and the public are invited to listen to this discussion by calling (877) 363-5052 and entering the conference ID 77798226, or via on-demand webcast. A link to the webcast will be available on Heritage Oaks Bancorp's website at www.heritageoaksbancorp.com. A replay of the call will be available on Heritage Oaks Bancorp's website later that day and will remain on its site for up to 14 calendar days. By including the foregoing website address, Heritage Oaks Bancorp does not intend to and shall not be deemed to incorporate by reference any material contained therein.
Report on Form 10-Q
The Company intends to file with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, on or before August 10, 2015. This report can be accessed at the U.S. Securities and Exchange Commission's website, www.sec.gov. Shortly after filing, it is also available free of charge at the Company's website, www.heritageoaksbancorp.com or by contacting Lonny Robinson, Chief Financial Officer. By including the foregoing website addresses, Heritage Oaks Bancorp does not intend to, and shall not be deemed to incorporate by reference any material contained therein.
About Heritage Oaks Bancorp
With $1.8 billion in assets, Heritage Oaks Bancorp is headquartered in Paso Robles, California and is the holding company for Heritage Oaks Bank. Heritage Oaks Bank operates two branch offices each in Paso Robles and San Luis Obispo; single branch offices in Atascadero, Templeton, Cambria, Morro Bay, Arroyo Grande, Santa Maria, Goleta and Santa Barbara; as well as a single loan production office in Ventura/Oxnard. Heritage Oaks Bank conducts commercial banking business in the counties of San Luis Obispo, Santa Barbara, and Ventura. Visit Heritage Oaks Bancorp on the Web at www.heritageoaksbancorp.com. By including the foregoing website address, Heritage Oaks Bancorp does not intend to, and shall not be deemed to incorporate by reference any material contained therein.
Forward Looking Statements
This press release contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward looking statements to be covered by the safe harbor provisions for forward looking statements. All statements other than statements of historical fact are "forward looking statements" for purposes of federal and state securities laws, including, but not limited to, statements about anticipated future operating and financial performance, financial position and liquidity, business prospects, strategic alternatives, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs, plans and objectives of management for future operations, and other similar forecasts and statements of expectation and statements of assumptions underlying any of the foregoing. Words such as "will likely result," "aims," "anticipates," "believes," "could," "estimates," "expects," "hopes," "intends," "may," "plans," "projects," "seeks," "should," "will," and variations of these words and similar expressions are intended to help identify forward-looking statements. Forward looking statements are based on the Company's current expectations and assumptions regarding its business, the regulatory environment, the economy and other future conditions, which expectations and assumptions could prove wrong. Forward looking statements are subject to a number of risks and uncertainties that could cause the Company's actual results to differ materially and adversely from those contemplated by the forward looking statements. The Company cautions you against relying on any of these forward looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward looking statements, include the following: renewed softness in the overall economy, including the California real estate market; the effect of the current low interest rate environment or changes in interest rates on our net interest margin; changes in the Company's business strategy or development plans; our ability to attract and retain qualified employees; a failure or breach of our operational security systems or infrastructure or those of our customers, our third party vendors or other service providers, including as a result of a cyber-attack; environmental conditions, including the prolonged drought in California, natural disasters such as earthquakes, landslides, and wildfires that may disrupt business, impede operations, or negatively impact the ability of certain borrowers to repay their loans and/or the values of collateral securing loans; the possibility of an unfavorable ruling in a legal matter, and the potential impact that it may have on earnings, reputation, or the Bank's operations; and the possibility that any expansionary activities will be impeded while the FDIC's and CA DBO's joint BSA Consent Order remains outstanding, and that we will be unable to comply with the requirements set forth in the BSA Consent Order, which could result in restrictions on our operations.
Additional information on these risks and other factors that could affect operating results and financial condition are detailed in reports filed by the Company with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2014, filed by the Company with the U.S. Securities and Exchange Commission on March 6, 2015.
Forward looking statements speak only as of the date they are made, and the Company does not undertake to update forward looking statements to reflect circumstances or events that occur after the date the forward looking statements are made, whether as a result of new information, future developments or otherwise, and specifically disclaims any obligation to revise or update such forward looking statements for any reason, except as may be required by law.
Use of Non-GAAP Financial Information
The Company provides all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results and in particular, making comparisons to similar companies, may be enhanced by providing additional non-GAAP measures used by management to assess operating results. Therefore, included at the end of the tables below are the following schedules: a schedule reconciling our GAAP net income to earnings before income taxes, provision for loan and lease losses, investment securities gains or losses, and merger, restructure, and integration related costs; a schedule reconciling book value to tangible common book value per share; a schedule adjusting non-interest expense to exclude merger, restructure and integration costs and expressing the adjusted noninterest expense as a percentage of average assets; and a schedule adjusting the efficiency ratio to exclude merger, restructure and integration costs.
| Heritage Oaks Bancorp | |||
| Consolidated Balance Sheets | |||
| (unaudited) | |||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands, except per share data) | |||
| Assets | |||
| Cash and due from banks | $ 16,085 | $ 14,743 | $ 19,162 |
| Interest earning deposits in other banks | 112,928 | 60,735 | 64,594 |
| Total cash and cash equivalents | 129,013 | 75,478 | 83,756 |
| Investment securities available for sale, at fair value | 379,824 | 364,498 | 359,630 |
| Loans held for sale, at lower of cost or fair value | 8,736 | 9,493 | 8,409 |
| Gross loans | 1,191,153 | 1,207,319 | 1,096,883 |
| Net deferred loan fees | (1,157) | (1,221) | (1,350) |
| Allowance for loan and lease losses | (16,982) | (16,913) | (16,635) |
| Net loans held for investment | 1,173,014 | 1,189,185 | 1,078,898 |
| Premises and equipment, net | 37,996 | 38,107 | 35,234 |
| Premises held for sale | 1,840 | 1,840 | 4,581 |
| Deferred tax assets, net | 23,180 | 22,508 | 28,863 |
| Bank owned life insurance | 25,032 | 24,871 | 24,383 |
| Federal Home Loan Bank stock | 7,853 | 7,853 | 7,853 |
| Goodwill | 24,885 | 24,885 | 24,475 |
| Other intangible assets | 4,823 | 5,085 | 5,941 |
| Other assets | 12,183 | 12,791 | 15,649 |
| Total assets | $ 1,828,379 | $ 1,776,594 | $ 1,677,672 |
| Liabilities | |||
| Deposits | |||
| Non-interest bearing deposits | $ 516,431 | $ 484,106 | $ 461,559 |
| Interest bearing deposits | 995,208 | 976,162 | 932,624 |
| Total deposits | 1,511,639 | 1,460,268 | 1,394,183 |
| Short term FHLB borrowing | 10,500 | 10,500 | 2,000 |
| Long term FHLB borrowing | 83,050 | 83,054 | 65,566 |
| Junior subordinated debentures | 13,338 | 13,286 | 13,125 |
| Other liabilities | 7,770 | 7,543 | 11,593 |
| Total liabilities | 1,626,297 | 1,574,651 | 1,486,467 |
| Shareholders' equity | |||
| Preferred stock, 5,000,000 shares authorized: | |||
| Series C preferred stock, $3.25 per share stated value; issued and outstanding: 0 shares at June 30, 2015, 384,697 at March 31, 2015, and 1,189,538 shares at June 30, 2014, respectively | -- | 1,056 | 3,604 |
| Common stock, no par value; authorized: 100,000,000 shares; issued and outstanding: 34,314,242, 33,950,518 and 33,032,436 shares as of June 30, 2015, March 31, 2015, and June 30, 2014, respectively | 165,415 | 164,271 | 161,898 |
| Additional paid in capital | 7,658 | 7,252 | 6,210 |
| Retained earnings | 28,800 | 27,128 | 19,903 |
| Accumulated other comprehensive income / (loss) | 209 | 2,236 | (410) |
| Total shareholders' equity | 202,082 | 201,943 | 191,205 |
| Total liabilities and shareholders' equity | $ 1,828,379 | $ 1,776,594 | $ 1,677,672 |
| Book value per common share | $ 5.89 | $ 5.92 | $ 5.68 |
| Tangible book value per common share | $ 5.02 | $ 5.03 | $ 4.76 |
| Heritage Oaks Bancorp | |||
| Consolidated Statements of Income | |||
| (unaudited) | |||
| For the Three Months Ended | |||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands, except per share data) | |||
| Interest Income | |||
| Loans, including fees | $ 14,585 | $ 15,088 | $ 14,547 |
| Investment securities | 1,662 | 1,667 | 1,819 |
| Other interest-earning assets | 494 | 173 | 175 |
| Total interest income | 16,741 | 16,928 | 16,541 |
| Interest Expense | |||
| Deposits | 918 | 889 | 928 |
| Other borrowings | 581 | 541 | 416 |
| Total interest expense | 1,499 | 1,430 | 1,344 |
| Net interest income before provision for loan and lease losses | 15,242 | 15,498 | 15,197 |
| Provision for loan and lease losses | -- | -- | -- |
| Net interest income after provision for loan and lease losses | 15,242 | 15,498 | 15,197 |
| Non-Interest Income | |||
| Fees and service charges | 1,213 | 1,207 | 1,394 |
| Net gain on sale of mortgage loans | 484 | 386 | 364 |
| Other mortgage fee income | 118 | 138 | 105 |
| Gain on sale of investment securities | -- | 505 | 101 |
| Other income | 456 | 765 | 512 |
| Total non-interest income | 2,271 | 3,001 | 2,476 |
| Non-Interest Expense | |||
| Salaries and employee benefits | 5,786 | 6,259 | 6,340 |
| Occupancy and equipment | 1,748 | 1,587 | 1,748 |
| Professional services | 1,702 | 1,406 | 1,038 |
| Information technology | 541 | 601 | 952 |
| Regulatory assessments | 300 | 297 | 307 |
| Sales and marketing | 295 | 317 | 190 |
| Amortization of intangible assets | 262 | 262 | 297 |
| Loan department expense | 260 | 286 | 285 |
| Communication costs | 144 | 141 | 161 |
| Merger, restructure and integration | (2) | 32 | 922 |
| Other expense | 393 | 625 | 746 |
| Total non-interest expense | 11,429 | 11,813 | 12,986 |
| Income before income taxes | 6,084 | 6,686 | 4,687 |
| Income tax expense | 2,284 | 2,617 | 1,738 |
| Net income | 3,800 | 4,069 | 2,949 |
| Accretion on preferred stock | 70 | -- | -- |
| Net income available to common shareholders | $ 3,730 | $ 4,069 | $ 2,949 |
| Weighted Average Shares Outstanding | |||
| Basic | 34,105,192 | 34,107,168 | 33,967,670 |
| Diluted | 34,249,591 | 34,266,482 | 34,142,364 |
| Earnings Per Common Share | |||
| Basic | $ 0.11 | $ 0.12 | $ 0.09 |
| Diluted | $ 0.11 | $ 0.12 | $ 0.09 |
| Dividends Declared Per Common Share | $ 0.06 | $ 0.05 | $ -- |
| Heritage Oaks Bancorp | ||
| Consolidated Statements of Income | ||
| (unaudited) | ||
| Six Months Ended | ||
| 6/30/2015 | 6/30/2014 | |
| (dollars in thousands except per share data) | ||
| Interest Income | ||
| Loans, including fees | $ 29,673 | $ 26,403 |
| Investment securities | 3,329 | 3,409 |
| Other interest-earning assets | 667 | 331 |
| Total interest income | 33,669 | 30,143 |
| Interest Expense | ||
| Deposits | 1,807 | 1,743 |
| Other borrowings | 1,122 | 752 |
| Total interest expense | 2,929 | 2,495 |
| Net interest income before provision for loan and lease losses | 30,740 | 27,648 |
| Provision for loan and lease losses | -- | -- |
| Net interest income after provision for loan and lease losses | 30,740 | 27,648 |
| Non-Interest Income | ||
| Fees and service charges | 2,420 | 2,539 |
| Net gain on mortgage banking activities | 870 | 552 |
| Gain on sale of investment securities | 505 | 99 |
| Other mortgage fee income | 256 | 159 |
| Other income | 1,221 | 877 |
| Total non-interest income | 5,272 | 4,226 |
| Non-Interest Expense | ||
| Salaries and employee benefits | 12,045 | 11,957 |
| Occupancy and equipment | 3,335 | 3,213 |
| Professional services | 3,108 | 1,771 |
| Information technology | 1,142 | 1,647 |
| Sales and marketing | 612 | 363 |
| Regulatory assessments | 597 | 511 |
| Loan department expense | 546 | 461 |
| Amortization of intangible assets | 524 | 463 |
| Communication costs | 285 | 267 |
| Merger, restructure and integration | 30 | 8,037 |
| Other expense | 1,018 | 1,334 |
| Total non-interest expense | 23,242 | 30,024 |
| Income before income taxes | 12,770 | 1,850 |
| Income tax expense | 4,901 | 664 |
| Net income | 7,869 | 1,186 |
| Accretion on preferred stock | 70 | -- |
| Net income available to common shareholders | $ 7,799 | $ 1,186 |
| Weighted Average Shares Outstanding | ||
| Basic | 34,086,786 | 31,487,059 |
| Diluted | 34,236,895 | 31,706,177 |
| Earnings Per Common Share | ||
| Basic | $ 0.23 | $ 0.04 |
| Diluted | $ 0.23 | $ 0.04 |
| Dividends Declared Per Common Share | $ 0.11 | $ -- |
| Heritage Oaks Bancorp | |||||
| Key Ratios | |||||
| For the Three Months Ended | Six Months Ended | ||||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | 6/30/2015 | 6/30/2014 | |
| Profitability / Performance Ratios | |||||
| Net interest margin | 3.67% | 3.92% | 3.98% | 3.79% | 3.98% |
| Return on average equity | 7.53% | 8.26% | 6.23% | 7.89% | 1.41% |
| Return on average common equity | 7.42% | 8.30% | 6.35% | 7.85% | 1.44% |
| Return on average tangible common equity | 8.71% | 9.79% | 7.61% | 9.24% | 1.71% |
| Return on average assets | 0.85% | 0.95% | 0.71% | 0.90% | 0.16% |
| Non-interest income to total net revenue | 12.97% | 16.22% | 14.01% | 14.64% | 13.26% |
| Yield on interest earning assets | 4.03% | 4.28% | 4.33% | 4.15% | 4.34% |
| Cost of interest bearing liabilities | 0.55% | 0.54% | 0.53% | 0.55% | 0.53% |
| Cost of funds | 0.38% | 0.38% | 0.37% | 0.38% | 0.38% |
| Operating efficiency ratio (1) | 64.04% | 64.13% | 71.97% | 64.09% | 92.68% |
| Non-interest expense to average assets, annualized | 2.55% | 2.75% | 3.12% | 2.65% | 3.99% |
| Asset Quality Ratios | |||||
| Non-performing loans to total gross loans | 0.97% | 0.98% | 1.04% | ||
| Non-performing loans to equity | 5.73% | 5.87% | 5.97% | ||
| Non-performing assets to total assets | 0.65% | 0.69% | 0.69% | ||
| Allowance for loan and lease losses to total gross loans | 1.43% | 1.40% | 1.52% | ||
| Net (recoveries) charge-offs to average loans outstanding, annualized | -0.02% | -0.04% | 0.48% | -0.03% | 0.24% |
| Classified assets to Tier I + ALLL | 25.15% | 26.63% | 25.05% | ||
| 30-89 Day Delinquency Rate | 0.03% | 0.10% | 0.05% | ||
| Capital Ratios | |||||
| Company | |||||
| Common Equity Tier I Capital Ratio (2) | 12.96% | 12.50% | N/A | ||
| Leverage ratio | 10.22% | 10.38% | 9.83% | ||
| Tier I Risk-Based Capital Ratio | 13.55% | 13.12% | 12.85% | ||
| Total Risk-Based Capital Ratio | 14.80% | 14.36% | 14.10% | ||
| Bank | |||||
| Common Equity Tier I Capital Ratio (2) | 12.48% | 12.65% | N/A | ||
| Leverage ratio | 9.41% | 10.01% | 9.53% | ||
| Tier I Risk-Based Capital Ratio | 12.48% | 12.65% | 12.45% | ||
| Total Risk-Based Capital Ratio | 13.73% | 13.90% | 13.70% | ||
| (1) The efficiency ratio is defined as total non-interest expense as a percentage of the combined: net interest income, non-interest income, excluding gains and losses on the sale of securities, gains and losses on the sale of other real estate owned ("OREO"), write-downs on OREO, OREO related costs, gains and losses on the sale of fixed assets, and amortization of intangible assets. | |||||
| (2) Common Equity Tier I capital is a new regulatory capital measure pursuant to the implementation of Basel III on January 1, 2015. | |||||
| Heritage Oaks Bancorp | |||||||||
| Average Balances | |||||||||
| For The Three Months Ended | |||||||||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |||||||
|
Balance |
Yield / Rate |
Income / Expense |
Balance |
Yield / Rate |
Income / Expense |
Balance |
Yield / Rate |
Income / Expense |
|
| (dollars in thousands) | |||||||||
| Interest Earning Assets | |||||||||
| Interest earning deposits in other banks | $ 71,993 | 0.18% | $ 33 | $ 47,209 | 0.18% | $ 21 | $ 61,033 | 0.19% | $ 29 |
| Investment securities | 369,368 | 1.80% | 1,662 | 353,122 | 1.91% | 1,667 | 356,785 | 2.04% | 1,819 |
| Other investments | 9,839 | 18.79% | 461 | 9,839 | 6.27% | 152 | 9,492 | 6.17% | 146 |
| Loans (1) | 1,213,772 | 4.82% | 14,585 | 1,195,265 | 5.12% | 15,088 | 1,104,839 | 5.28% | 14,547 |
| Total earning assets | 1,664,972 | 4.03% | 16,741 | 1,605,435 | 4.28% | 16,928 | 1,532,149 | 4.33% | 16,541 |
| Allowance for loan and lease losses | (17,037) | (16,861) | (18,044) | ||||||
| Other assets | 148,680 | 151,912 | 153,381 | ||||||
| Total assets | $ 1,796,615 | $ 1,740,486 | $ 1,667,486 | ||||||
| Interest Bearing Liabilities | |||||||||
| Interest bearing demand | $ 118,692 | 0.11% | $ 33 | $ 115,928 | 0.11% | $ 31 | $ 107,598 | 0.11% | $ 29 |
| Savings | 95,875 | 0.10% | 24 | 94,557 | 0.10% | 23 | 94,154 | 0.11% | 25 |
| Money market | 506,651 | 0.28% | 354 | 464,076 | 0.28% | 318 | 436,351 | 0.30% | 329 |
| Time deposits | 270,283 | 0.75% | 507 | 278,645 | 0.75% | 517 | 292,322 | 0.75% | 545 |
| Total interest bearing deposits | 991,501 | 0.37% | 918 | 953,206 | 0.38% | 889 | 930,425 | 0.40% | 928 |
| Federal Home Loan Bank borrowing | 93,552 | 1.89% | 440 | 100,034 | 1.62% | 400 | 76,304 | 1.45% | 276 |
| Junior subordinated debentures | 13,305 | 4.25% | 141 | 13,252 | 4.32% | 141 | 13,093 | 4.29% | 140 |
| Total borrowed funds | 106,857 | 2.18% | 581 | 113,286 | 1.94% | 541 | 89,397 | 1.87% | 416 |
| Total interest bearing liabilities | 1,098,358 | 0.55% | 1,499 | 1,066,492 | 0.54% | 1,430 | 1,019,822 | 0.53% | 1,344 |
| Non interest bearing demand | 486,829 | 464,455 | 447,095 | ||||||
| Total funding | 1,585,187 | 0.38% | 1,499 | 1,530,947 | 0.38% | 1,430 | 1,466,917 | 0.37% | 1,344 |
| Other liabilities | 8,947 | 9,732 | 10,765 | ||||||
| Total liabilities | $ 1,594,134 | $ 1,540,679 | $ 1,477,682 | ||||||
| Shareholders' Equity | |||||||||
| Total shareholders' equity | 202,481 | 199,807 | 189,804 | ||||||
| Total liabilities and shareholders' equity | $ 1,796,615 | $ 1,740,486 | $ 1,667,486 | ||||||
| Net interest margin | 3.67% | $ 15,242 | 3.92% | $ 15,498 | 3.98% | $ 15,197 | |||
| Interest rate spread | 3.48% | 3.74% | 3.80% | ||||||
| Cost of deposits | 0.25% | 0.25% | 0.27% | ||||||
| (1) Non-accrual loans have been included in total loans. | |||||||||
| Heritage Oaks Bancorp | ||||||
| Average Balances | ||||||
| For the Six Months Ended | ||||||
| 6/30/2015 | 6/30/2014 | |||||
|
Balance |
Yield / Rate |
Income / Expense |
Balance |
Yield / Rate |
Income / Expense |
|
| (dollars in thousands) | ||||||
| Interest Earning Assets | ||||||
| Interest earning deposits in other banks | $ 59,669 | 0.18% | $ 54 | $ 50,611 | 0.16% | $ 41 |
| Investment securities | 361,290 | 1.86% | 3,329 | 327,907 | 2.10% | 3,409 |
| Other investments | 9,839 | 12.56% | 613 | 8,457 | 6.91% | 290 |
| Loans (1) | 1,204,569 | 4.97% | 29,673 | 1,014,102 | 5.25% | 26,403 |
| Total earning assets | 1,635,367 | 4.15% | 33,669 | 1,401,077 | 4.34% | 30,143 |
| Allowance for loan and lease losses | (16,950) | (17,998) | ||||
| Other assets | 150,288 | 133,130 | ||||
| Total assets | $ 1,768,705 | $ 1,516,209 | ||||
| Interest Bearing Liabilities | ||||||
| Interest bearing demand | $ 117,317 | 0.11% | $ 64 | $ 98,843 | 0.11% | $ 53 |
| Savings | 95,219 | 0.10% | 47 | 78,015 | 0.10% | 40 |
| Money market | 485,481 | 0.28% | 672 | 399,464 | 0.31% | 613 |
| Time deposits | 274,441 | 0.75% | 1,024 | 270,044 | 0.77% | 1,037 |
| Total interest bearing deposits | 972,458 | 0.37% | 1,807 | 846,366 | 0.42% | 1,743 |
| Federal Home Loan Bank borrowing | 96,775 | 1.75% | 839 | 83,507 | 1.30% | 537 |
| Junior subordinated debentures | 13,279 | 4.30% | 283 | 11,510 | 3.77% | 215 |
| Total borrowed funds | 110,054 | 2.06% | 1,122 | 95,017 | 1.60% | 752 |
| Total interest bearing liabilities | 1,082,512 | 0.55% | 2,929 | 941,383 | 0.53% | 2,495 |
| Non interest bearing demand | 475,704 | 395,843 | ||||
| Total funding | 1,558,216 | 0.38% | 2,929 | 1,337,226 | 0.38% | 2,495 |
| Other liabilities | 9,337 | 9,608 | ||||
| Total liabilities | 1,567,553 | 1,346,834 | ||||
| Shareholders' Equity | ||||||
| Total stockholders' equity | 201,152 | 169,375 | ||||
| Total liabilities and shareholders' equity | $ 1,768,705 | $ 1,516,209 | ||||
| Net interest margin | 3.79% | $ 30,740 | 3.98% | $ 27,648 | ||
| Interest rate spread | 3.60% | 3.81% | ||||
| Cost of deposits | 0.25% | 0.28% | ||||
| (1) Non-accrual loans have been included in total loans. | ||||||
| Heritage Oaks Bancorp | |||
| Loans and Deposits | |||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands) | |||
| Loans | |||
| Real Estate Secured | |||
| Commercial | $ 585,811 | $ 575,536 | $ 565,533 |
| Residential 1 to 4 family | 143,256 | 143,490 | 113,216 |
| Farmland | 104,613 | 108,779 | 86,078 |
| Multi-family residential | 76,903 | 77,684 | 48,458 |
| Home equity lines of credit | 32,759 | 35,928 | 39,112 |
| Construction | 20,969 | 27,001 | 18,059 |
| Land | 20,088 | 20,619 | 27,639 |
| Total real estate secured | 984,399 | 989,037 | 898,095 |
| Commercial | |||
| Commercial and industrial | 151,401 | 146,912 | 146,404 |
| Agriculture | 48,601 | 64,150 | 42,313 |
| Other | 1 | 5 | 704 |
| Total commercial | 200,003 | 211,067 | 189,421 |
| Installment | 6,499 | 7,008 | 9,071 |
| Overdrafts | 252 | 207 | 296 |
| Total loans held for investment | 1,191,153 | 1,207,319 | 1,096,883 |
| Deferred loan fees | (1,157) | (1,221) | (1,350) |
| Allowance for loan and lease losses | (16,982) | (16,913) | (16,635) |
| Total net loans held for investment | $ 1,173,014 | $ 1,189,185 | $ 1,078,898 |
| Loans held for sale | $ 8,736 | $ 9,493 | $ 8,409 |
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands) | |||
| Deposits | |||
| Non-interest bearing deposits | $ 516,431 | $ 484,106 | $ 461,559 |
| Interest bearing deposits: | |||
| NOW accounts | 128,404 | 118,094 | 104,818 |
| Other savings deposits | 98,821 | 95,027 | 96,277 |
| Money market deposit accounts | 503,132 | 490,986 | 442,688 |
| Time deposits | 264,851 | 272,055 | 288,841 |
| Total deposits | $ 1,511,639 | $ 1,460,268 | $ 1,394,183 |
| Heritage Oaks Bancorp | |||
| Allowance for Loan and Lease Losses, Non-Performing and Classified Assets | |||
| For the Three Months Ended | |||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands) | |||
| Allowance for Loan and Lease Losses | |||
| Balance, beginning of period | $ 16,913 | $ 16,802 | $ 17,968 |
| Provision for loan and lease losses | -- | -- | -- |
| Charge-offs: | |||
| Commercial and industrial | 142 | -- | 650 |
| Home equity line of credit | 16 | 39 | -- |
| Installment | 5 | -- | 4 |
| Agriculture | 1 | -- | -- |
| Land | -- | 34 | -- |
| Commercial real estate | -- | -- | 1,016 |
| Total charge-offs | 164 | 73 | 1,670 |
| Recoveries of loans previously charged-off | 233 | 184 | 337 |
| Balance, end of period | $ 16,982 | $ 16,913 | $ 16,635 |
| Net (recoveries) charge-offs | $ (69) | $ (111) | $ 1,333 |
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands) | |||
| Non-Performing Assets | |||
| Loans on non-accrual status: | |||
| Land | $ 4,754 | $ 4,939 | $ 5,903 |
| Commercial and industrial | 3,207 | 3,495 | 2,455 |
| Commercial real estate | 2,158 | 2,052 | 2,109 |
| Residential 1 to 4 family | 707 | 645 | 101 |
| Agriculture | 626 | 627 | 724 |
| Home equity line of credit | 86 | 46 | 100 |
| Installment | 40 | 43 | 19 |
| Total non-accruing loans | 11,578 | 11,847 | 11,411 |
| Other real estate owned (OREO) | 372 | 433 | 248 |
| Total non-performing assets | $ 11,950 | $ 12,280 | $ 11,659 |
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |
| (dollars in thousands) | |||
| Classified Assets | |||
| Loans | $ 49,118 | $ 51,139 | $ 43,935 |
| Other real estate owned (OREO) | 372 | 433 | 248 |
| Non-investment grade securities | -- | -- | -- |
| Total classified assets | $ 49,490 | $ 51,572 | $ 44,183 |
| Classified assets to Tier I + ALLL | 25.15% | 26.63% | 25.05% |
| Note: Classified assets consists of substandard and non-performing loans and OREO assets. | |||
| Heritage Oaks Bancorp | ||||||
| Quarter to Date Non-Performing Loan Reconciliation | ||||||
| Balance | Returns to | Balance | ||||
| March 31, | Net | Accrual | June 30, | |||
| 2015 | Additions | Paydowns | Status | Charge-offs | 2015 | |
| (dollars in thousands) | ||||||
| Real Estate Secured | ||||||
| Land | $ 4,939 | $ -- | $ (185) | $ -- | $ -- | $ 4,754 |
| Commercial | 2,052 | 140 | (34) | -- | -- | 2,158 |
| Residential 1 to 4 family | 645 | 90 | (28) | -- | -- | 707 |
| Home equity line of credit | 46 | 40 | -- | -- | -- | 86 |
| Commercial | ||||||
| Commercial and industrial | 3,495 | 252 | (290) | (107) | (143) | 3,207 |
| Agriculture | 627 | -- | -- | -- | (1) | 626 |
| Installment | 43 | 20 | (19) | -- | (4) | 40 |
| Total | $ 11,847 | $ 542 | $ (556) | $ (107) | $ (148) | $ 11,578 |
| Heritage Oaks Bancorp | |||||||
| Year to Date Non-Performing Loan Reconciliation | |||||||
| Balance | Transfers | Returns to | Balance | ||||
| December 31, | Net | to Foreclosed | Accrual | June 30, | |||
| 2014 | Additions | Paydowns | Collateral | Status | Charge-offs | 2015 | |
| (dollars in thousands) | |||||||
| Real Estate Secured | |||||||
| Land | $ 5,237 | $ -- | $ (270) | $ (44) | $ (135) | $ (34) | $ 4,754 |
| Commercial | 2,085 | 140 | (67) | -- | -- | -- | 2,158 |
| Residential 1 to 4 family | 124 | 624 | (41) | -- | -- | -- | 707 |
| Home equity line of credit | 258 | 40 | (112) | (61) | -- | (39) | 86 |
| Commercial | |||||||
| Commercial and industrial | 2,102 | 1,943 | (445) | -- | (250) | (143) | 3,207 |
| Agriculture | 686 | -- | (59) | -- | -- | (1) | 626 |
| Installment | 43 | 22 | (21) | -- | -- | (4) | 40 |
| Total | $ 10,535 | $ 2,769 | $ (1,015) | $ (105) | $ (385) | $ (221) | $ 11,578 |
| Heritage Oaks Bancorp | |||||
| Reconciliation of GAAP to Non-GAAP Financial Measure | |||||
| For the Three Months Ended | Six Months Ended | ||||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | 6/30/2015 | 6/30/2014 | |
| (dollars in thousands) | |||||
| GAAP net income | $ 3,800 | $ 4,069 | $ 2,949 | $ 7,869 | $ 1,186 |
| Adjusted for: | |||||
| Income tax expense | 2,284 | 2,617 | 1,738 | 4,901 | 664 |
| (Gain) on sale of investment securities | -- | (505) | (101) | (505) | (99) |
| Merger, restructure and integration | (2) | 32 | 922 | 30 | 8,037 |
| Non-GAAP earnings before income taxes, gains on investments, and merger, restructure and integration costs | $ 6,082 | $ 6,213 | $ 5,508 | $ 12,295 | $ 9,788 |
| 6/30/2015 | 3/31/2015 | 6/30/2014 | 6/30/2015 | 6/30/2014 | |
| (dollars in thousands) | |||||
| Non-interest expense | $ 11,429 | $ 11,813 | $ 12,986 | $ 23,242 | $ 30,024 |
| Less: Merger, restructure and integration | 2 | (32) | (922) | (30) | (8,037) |
| Adjusted non-interest expense | 11,431 | 11,781 | 12,064 | 23,212 | 21,987 |
| Total average assets | 1,796,615 | 1,740,486 | 1,667,486 | 1,768,705 | 1,516,209 |
| Annualization | 4.0110 | 4.0556 | 4.0110 | 2.0166 | 2.0166 |
| Non-interest expense to average assets less merger, restructure and integration costs | 2.55% | 2.75% | 2.90% | 2.65% | 2.92% |
| 6/30/2015 | 3/31/2015 | 6/30/2014 | 6/30/2015 | 6/30/2014 | |
| (dollars in thousands) | |||||
| Non-interest expense | $ 11,429 | $ 11,813 | $ 12,986 | $ 23,242 | $ 30,024 |
| Less: OREO related costs and writedowns | 42 | (11) | (55) | 31 | (127) |
| Less: Amortization of CDI | (262) | (262) | (297) | (524) | (463) |
| Less: Merger, restructure and integration | 2 | (32) | (922) | (30) | (8,037) |
| Adjusted non-interest expense | 11,211 | 11,508 | 11,712 | 22,719 | 21,397 |
| Net interest income | 15,242 | 15,498 | 15,197 | 30,740 | 27,648 |
| Non-interest income | 2,271 | 3,001 | 2,476 | 5,272 | 4,226 |
| Less: net (gains) losses | (10) | (505) | (101) | (515) | (99) |
| Operating efficiency less merger, restructure and integration costs | 64.05% | 63.95% | 66.65% | 64.00% | 67.34% |
| 6/30/2015 | 3/31/2015 | 6/30/2014 | |||
| (dollars in thousands) | |||||
| Total shareholders' equity | $ 202,082 | $ 201,943 | $ 191,205 | ||
| Less: Series C Preferred Stock | -- | (1,056) | (3,604) | ||
| Less: Intangibles | (29,708) | (29,970) | (30,416) | ||
| Tangible common equity | $ 172,374 | $ 170,917 | $ 157,185 | ||
| Tangible common book value per share | $ 5.02 | $ 5.03 | $ 4.76 | ||