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Section 1: 8-K (FORM 8-K)

fcbc20170725_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported): July 25, 2017

 

 

 

FIRST COMMUNITY BANCSHARES, INC.

 
 

(Exact name of registrant as specified in its charter)

 
 
 

Nevada

 

000-19297

 

55-0694814

(State or other jurisdiction of incorporation) 

 

(Commission File Number) 

 

(IRS Employer Identification No.)

 
 

P.O. Box 989

Bluefield, Virginia

 

24605-0989

(Address of principal executive offices)

 

(Zip Code)

 
 

Registrant’s telephone number, including area code: (276) 326-9000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 
 

 

  

Item 2.02                Results of Operations and Financial Condition.

 

On July 25, 2017, First Community Bancshares, Inc. (the “Company”) announced by press release its earnings for the second quarter of 2017. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 8.01                Other Events.     

 

On July 25, 2017, the Company announced by press release its quarterly cash dividend to common stockholders of eighteen cents ($0.18) per common share, payable on August 18, 2017, to shareholders of record on August 4, 2017. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01                Financial Statements and Exhibits.

 

(d)

 

The following exhibit is included with this report:

 

Exhibit No.

 

Exhibit Description

 

 

 

99.1

 

Earnings and dividend press release dated July 25, 2017

 

Forward-Looking Statements 

 

This Current Report on Form 8-K contains forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include:  changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10-K for the most recent year ended. Pursuant to the Private Securities Litigation Reform Act of 1995, 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. 

 

 
 

 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 

 

   

First Community Bancshares, Inc.

(Registrant)

 

 

 

 

 

Date:     July 25, 2017              

 

 

 

 

 

/s/ David D. Brown

 

 

 

 

 

 

 

David D. Brown

 

    Chief Financial Officer  

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex99-1.htm

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE:

 

FOR MORE INFORMATION, CONTACT:

July 25, 2017

 

David D. Brown

   

(276) 326-9000

 

First Community Bancshares, Inc. Announces Second Quarter 2017 Results and Increased Quarterly Dividend

 

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.firstcommunitybank.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and six months ended June 30, 2017. The Company reported net income available to common shareholders of $6.42 million, or $0.38 per diluted common share for the quarter ended June 30, 2017, which represents a 5.56% increase in per share diluted earnings compared to the same quarter of 2016. Net income available to common shareholders was $12.62 million, or $0.74 per diluted common share for the six months ended June 30, 2017, which represents a 5.71% increase in per share diluted earnings compared to the same period of 2016.

 

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of eighteen cents ($0.18) per common share, which represents an increase of 12.50% over the most recent cash dividend. The quarterly dividend is payable to common shareholders of record on August 4, 2017, and is expected to be paid on or about August 18, 2017. The current year marks the 32nd consecutive year of cash dividends paid to stockholders.

 

Second Quarter 2017 Highlights

 

Income Statement

 

o

Net income available to common shareholders increased $163 thousand, or 2.61%, to $6.42 million compared to the same quarter of 2016.

 

o

Diluted earnings per share increased $0.02, or 5.56%, to $0.38 compared to the same quarter of 2016.

 

o

Net interest margin increased 24 basis points to 4.32%, and normalized net interest margin increased 18 basis points to 3.99% compared to the same quarter of 2016.

 

Balance Sheet

 

o

Book value per common share increased $0.55 to $20.50 compared to December 31, 2016.

 

o

Tangible book value per common share increased $0.58 to $14.47 compared to December 31, 2016.

 

o

The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of June 30, 2017.

 

Non-GAAP Financial Measures

 

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measures presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. Management believes that the efficiency ratio provides important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.

 

 
1

 

  

About First Community Bancshares, Inc.

 

First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 44 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2017. First Community Bank provides insurance services through First Community Insurance Services, which operate 6 in-branch locations in Virginia and West Virginia and offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed $926 million in combined assets as of June 30, 2017. The Company reported consolidated assets of $2.37 billion as of June 30, 2017. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website at www.fcbinc.com.

 

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, 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.

 

 
2

 

 

Financial Performance 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
(Amounts in thousands, except share and  

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 

per share data)

 

2017

   

2017

   

2016

   

2016

   

2016

   

2017

   

2016

 

Interest income

                                                       

Interest and fees on loans

  $ 22,914     $ 21,827     $ 21,956     $ 21,952     $ 22,237     $ 44,741     $ 43,810  

Interest on securities

    1,170       1,206       1,362       1,643       1,891       2,376       3,848  

Interest on deposits in banks

    221       159       98       26       9       380       29  

Total interest income

    24,305       23,192       23,416       23,621       24,137       47,497       47,687  

Interest expense

                                                       

Interest on deposits

    1,233       1,166       1,145       1,133       1,087       2,399       2,201  

Interest on borrowings

    778       885       1,314       1,367       1,359       1,663       2,684  

Total interest expense

    2,011       2,051       2,459       2,500       2,446       4,062       4,885  

Net interest income

    22,294       21,141       20,957       21,121       21,691       43,435       42,802  

Provision for (recovery of) loan losses

    934       492       500       (1,154 )     722       1,426       1,909  

Net interest income after provision (recovery)

    21,360       20,649       20,457       22,275       20,969       42,009       40,893  

Total noninterest income

    5,475       5,691       6,238       5,895       7,030       11,166       14,933  

Total noninterest expense

    17,458       17,083       16,653       18,557       18,722       34,541       37,536  

Income before income taxes

    9,377       9,257       10,042       9,613       9,277       18,634       18,290  

Income tax expense

    2,959       3,055       3,638       3,230       3,022       6,014       5,951  

Net income

    6,418       6,202       6,404       6,383       6,255       12,620       12,339  

Dividends on preferred stock

    -       -       -       -       -       -       -  

Net income available to common shareholders

  $ 6,418     $ 6,202     $ 6,404     $ 6,383     $ 6,255     $ 12,620     $ 12,339  
                                                         

Earnings per common share

                                                       

Basic

  $ 0.38     $ 0.36     $ 0.38     $ 0.37     $ 0.36     $ 0.74     $ 0.70  

Diluted

    0.38       0.36       0.38       0.37       0.36       0.74       0.70  

Cash dividends per common share

    0.16       0.16       0.16       0.16       0.14       0.32       0.28  

Weighted average shares outstanding

                                                       

Basic

    17,012,189       16,998,125       16,891,010       17,031,074       17,414,320       17,005,196       17,636,783  

Diluted

    17,082,832       17,072,174       17,043,869       17,083,526       17,462,845       17,075,961       17,675,128  

Performance ratios

                                                       

Return on average assets

    1.08 %     1.06 %     1.05 %     1.03 %     1.02 %     1.07 %     1.00 %

Return on average common equity

    7.41 %     7.35 %     7.49 %     7.58 %     7.47 %     7.38 %     7.31 %

Return on average tangible common equity(1)

    10.51 %     10.50 %     10.75 %     11.07 %     10.88 %     10.51 %     10.60 %
                                                         

(1)

 

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

 

 

RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 
   

2017

   

2017

   

2016

   

2016

   

2016

   

2017

   

2016

 

(Amounts in thousands, except per share data)

                                                       

Net income, GAAP

  $ 6,418     $ 6,202     $ 6,404     $ 6,383     $ 6,255     $ 12,620     $ 12,339  

Non-GAAP adjustments:

                                                       

Net gain on divestitures

    -       -       (619 )     (3,065 )     -       -       -  

Allowance reversal for sold loans

    -       -       -       (1,354 )     -       -       -  

Merger, acquisition, and divestiture expense

    -       -       55       226       410       -       449  

Net loss (gain) on sale of securities

    657       -       (388 )     (25 )     79       657       78  

Net impairment losses

    -       -       -       4,635       11       -       11  

Other non-core items

    (174 )     (18 )     (48 )     (264 )     -       (192 )     (240 )

Total adjustments to core earnings

    483       (18 )     (1,000 )     153       500       465       298  

Tax effect

    345       (7 )     (708 )     56       184       338       110  

Core earnings, non-GAAP(1)

  $ 6,556     $ 6,191     $ 6,112     $ 6,480     $ 6,571     $ 12,747     $ 12,527  
                                                         

Core diluted earnings per common share

  $ 0.38     $ 0.36     $ 0.36     $ 0.38     $ 0.38     $ 0.74     $ 0.71  

Performance ratios

                                                       

Core return on average assets

    1.11 %     1.06 %     1.01 %     1.05 %     1.07 %     1.08 %     1.02 %

Core return on average common equity

    7.57 %     7.33 %     7.15 %     7.70 %     7.85 %     7.45 %     7.42 %

Core return on average tangible common equity(2)

    10.74 %     10.48 %     10.26 %     11.24 %     11.43 %     10.61 %     10.77 %

_____________________________________________

(1)

 

Excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income

(2)

 

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

 

 
3

 

 

Net Interest Income and Margin 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)              

 

   

Three Months Ended June 30,

 
   

2017

   

2016

 
   

Average

           

Average Yield/

   

Average

           

Average Yield/

 

(Amounts in thousands)

 

Balance

   

Interest(1)

   

Rate(1)

   

Balance

   

Interest(1)

   

Rate(1)

 

Assets

                                               

Earning assets

                                               

Loans(2)

  $ 1,843,441     $ 22,986       5.00 %   $ 1,775,435     $ 22,263       5.04 %

Securities available for sale

    167,869       1,455       3.48 %     336,510       2,195       2.62 %

Securities held to maturity

    34,664       125       1.45 %     72,331       191       1.06 %

Interest-bearing deposits

    68,455       221       1.29 %     5,184       9       0.70 %

Total earning assets

    2,114,429       24,787       4.70 %     2,189,460       24,658       4.53 %

Other assets

    263,767                       283,945                  

Total assets

  $ 2,378,196                     $ 2,473,405                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 387,113     $ 110       0.11 %   $ 339,365     $ 60       0.07 %

Savings deposits

    525,808       35       0.03 %     542,238       63       0.05 %

Time deposits

    514,527       1,088       0.85 %     518,163       964       0.75 %

Total interest-bearing deposits

    1,427,448       1,233       0.35 %     1,399,766       1,087       0.31 %

Borrowings

                                               

Federal funds purchased

    5       -       1.07 %     9,078       14       0.62 %

Retail repurchase agreements

    60,809       10       0.07 %     65,718       12       0.07 %

Wholesale repurchase agreements

    25,000       201       3.22 %     50,000       469       3.77 %

FHLB advances and other borrowings

    55,635       567       4.09 %     132,459       864       2.62 %

Total borrowings

    141,449       778       2.21 %     257,255       1,359       2.12 %

Total interest-bearing liabilities

    1,568,897       2,011       0.51 %     1,657,021       2,446       0.59 %

Noninterest-bearing demand deposits

    441,547                       460,255                  

Other liabilities

    20,197                       19,520                  

Total liabilities

    2,030,641                       2,136,796                  

Stockholders' equity

    347,555                       336,609                  

Total liabilities and stockholders' equity

  $ 2,378,196                     $ 2,473,405                  

Net interest income, FTE

          $ 22,776                     $ 22,212          

Net interest rate spread

                    4.19 %                     3.94 %

Net interest margin

                    4.32 %                     4.08 %

____________________________________ 

(1)

 

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%

(2)

 

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

 

 
4

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Six Months Ended June 30,

 
   

2017

   

2016

 
   

Average

           

Average Yield/

   

Average

           

Average Yield/

 

(Amounts in thousands)

 

Balance

   

Interest(1)

   

Rate(1)

   

Balance

   

Interest(1)

   

Rate(1)

 

Assets

                                               

Earning assets

                                               

Loans(2)

  $ 1,841,152     $ 44,880       4.92 %   $ 1,752,918     $ 43,862       5.03 %

Securities available for sale

    164,820       2,939       3.60 %     345,546       4,463       2.60 %

Securities held to maturity

    40,854       276       1.36 %     72,421       385       1.07 %

Interest-bearing deposits

    62,140       380       1.23 %     10,388       29       0.56 %

Total earning assets

    2,108,966       48,475       4.64 %     2,181,273       48,739       4.49 %

Other assets

    267,163                       290,551                  

Total assets

  $ 2,376,129                     $ 2,471,824                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 384,098     $ 212       0.11 %   $ 340,945     $ 117       0.07 %

Savings deposits

    525,691       71       0.03 %     539,004       129       0.05 %

Time deposits

    515,014       2,116       0.83 %     525,899       1,955       0.75 %

Total interest-bearing deposits

    1,424,803       2,399       0.34 %     1,405,848       2,201       0.31 %

Borrowings

                                               

Federal funds purchased

    3       -       1.07 %     6,251       20       0.64 %

Retail repurchase agreements

    63,861       21       0.07 %     71,855       25       0.07 %

Wholesale repurchase agreements

    25,000       399       3.22 %     50,000       937       3.77 %

FHLB advances and other borrowings

    61,096       1,243       4.10 %     120,236       1,702       2.85 %

Total borrowings

    149,960       1,663       2.24 %     248,342       2,684       2.17 %

Total interest-bearing liabilities

    1,574,763       4,062       0.53 %     1,654,190       4,885       0.59 %

Noninterest-bearing demand deposits

    433,588                       454,552                  

Other liabilities

    22,822                       23,652                  

Total liabilities

    2,031,173                       2,132,394                  

Stockholders' equity

    344,956                       339,430                  

Total liabilities and stockholders' equity

  $ 2,376,129                     $ 2,471,824                  

Net interest income, FTE

          $ 44,413                     $ 43,854          

Net interest rate spread

                    4.11 %                     3.90 %

Net interest margin

                    4.25 %                     4.04 %

____________________________________ 

(1)

 

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%

(2)

 

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

 

 
5

 

 

RECONCILIATION OF GAAP NET INTEREST MARGIN TO NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited)

 

   

Three Months Ended June 30,

 
   

2017

   

2016

 

(Amounts in thousands)

 

Interest(1)

   

Average Yield/

Rate(1)

   

Interest(1)

   

Average Yield/

Rate(1)

 

Earning assets

                               

Loans(2)

  $ 22,986       5.00 %   $ 22,263       5.04 %

Accretion income

    2,534               2,248          

Less: cash accretion income

    788               786          

Non-cash accretion income

    1,746               1,462          

Loans, normalized(3)

    21,240       4.62 %     20,801       4.71 %

Other earning assets

    1,801       2.67 %     2,395       2.33 %

Total earning assets

    23,041       4.37 %     23,196       4.26 %

Total interest-bearing liabilities

    2,011       0.51 %     2,446       0.59 %

Net interest income, FTE(3)

  $ 21,030             $ 20,750          

Net interest rate spread, normalized(3)

            3.86 %             3.67 %

Net interest margin, normalized(3)

            3.99 %             3.81 %

___________________________________________________ 

(1)

 

FTE basis based on the federal statutory rate of 35%

(2)

 

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

(3)

 

Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

 

   

Six Months Ended June 30,

 
   

2017

   

2016

 

(Amounts in thousands)

 

Interest(1)

   

Average Yield/

Rate(1)

   

Interest(1)

   

Average Yield/

Rate(1)

 

Earning assets

                               

Loans(2)

  $ 44,880       4.92 %   $ 43,862       5.03 %

Accretion income

    4,318               4,500          

Less: cash accretion income

    1,438               1,591          

Non-cash accretion income

    2,880               2,909          

Loans, normalized(3)

    42,000       4.60 %     40,953       4.70 %

Other earning assets

    3,595       2.71 %     4,877       2.29 %

Total earning assets

    45,595       4.36 %     45,830       4.23 %

Total interest-bearing liabilities

    4,062       0.53 %     4,885       0.59 %

Net interest income, FTE(3)

  $ 41,533             $ 40,945          

Net interest rate spread, normalized(3)

            3.83 %             3.63 %

Net interest margin, normalized(3)

            3.97 %             3.77 %

___________________________________________________ 

(1)

 

FTE basis based on the federal statutory rate of 35%

(2)

 

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

(3)

 

Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

 

 
6

 

  

Noninterest Income and Expense

 

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 

(Amounts in thousands)

 

2017

   

2017

   

2016

   

2016

   

2016

   

2017

   

2016

 

Noninterest income

                                                       

Wealth management

  $ 791     $ 790     $ 681     $ 653     $ 810     $ 1,581     $ 1,494  

Service charges on deposits

    3,360       3,113       3,442       3,494       3,361       6,473       6,652  

Other service charges and fees

    2,168       2,078       2,014       2,024       2,054       4,246       4,064  

Insurance commissions

    325       373       59       1,592       1,600       698       3,791  

Net impairment losses recognized in earnings

    -       -       -       (4,635 )     (11 )     -       (11 )

Net gain (loss) on sale of securities

    (657 )     -       388       25       (79 )     (657 )     (78 )

Net FDIC indemnification asset amortization

    (1,586 )     (1,332 )     (1,618 )     (1,369 )     (1,328 )     (2,918 )     (2,487 )

Net gain on divestitures

    -       -       619       3,065       -       -       -  

Other operating income

    1,074       669       653       1,046       623       1,743       1,508  

Total noninterest income

    5,475       5,691       6,238       5,895       7,030       11,166       14,933  

Noninterest expense

                                                       

Salaries and employee benefits

    9,157       8,884       9,411       9,828       10,198       18,041       20,673  

Occupancy expense

    1,341       1,248       1,158       1,249       1,359       2,589       2,890  

Furniture and equipment expense

    1,087       1,091       1,070       1,066       1,109       2,178       2,205  

Amortization of intangibles

    263       261       265       316       277       524       555  

FDIC premiums and assessments

    227       244       274       363       372       471       746  

Merger, acquisition, and divestiture expense

    -       -       55       226       410       -       449  

Other operating expense

    5,383       5,355       4,420       5,509       4,997       10,738       10,018  

Total noninterest expense

    17,458       17,083       16,653       18,557       18,722       34,541       37,536  

 

Efficiency Ratio

 

EFFICIENCY RATIO CALCULATION (Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

June 30,

 
   

2017

   

2017

   

2016

   

2016

   

2016

   

2017

   

2016

 

(Amounts in thousands)

                                                       

Noninterest expense, GAAP

  $ 17,458     $ 17,083     $ 16,653     $ 18,557     $ 18,722     $ 34,541     $ 37,536  

Non-GAAP adjustments

                                                       

Merger, acquisition, and divestiture expense

    -       -       (55 )     (226 )     (410 )     -       (449 )

OREO expense and net loss

    (213 )     (328 )     (184 )     (278 )     (247 )     (541 )     (958 )

Other non-core items

    (327 )     -       8       (168 )     (30 )     (327 )     (204 )

Adjusted noninterest expense

    16,918       16,755       16,422       17,885       18,035       33,673       35,925  
                                                         

Net interest income, GAAP

    22,294       21,141       20,957       21,121       21,691       43,435       42,802  

Noninterest income, GAAP

    5,475       5,691       6,238       5,895       7,030       11,166       14,933  

Non-GAAP adjustments

                                                       

Tax equivalency adjustment

    481       497       520       509       521       978       1,052  

Net impairment losses

    -       -       -       4,635       11       -       11  

Net loss (gain) on sale of securities

    657       -       (388 )     (25 )     79       657       78  

Net gain on divestitures

    -       -       (619 )     (3,065 )     -       -       -  

Other non-core items

    (501 )     (18 )     (40 )     (432 )     (30 )     (519 )     (444 )

Adjusted net interest and noninterest income

    28,406       27,311       26,668       28,638       29,302       55,717       58,432  
                                                         

Non-GAAP efficiency ratio(1)

    59.56 %     61.35 %     61.58 %     62.45 %     61.55 %     60.44 %     61.48 %

GAAP efficiency ratio

    62.87 %     63.67 %     61.24 %     68.69 %     65.19 %     63.26 %     65.01 %

________________________________________

(1)

 

A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income

 

 
7

 

  

Balance Sheet and Capital 

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

 

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

June 30,

 

(Amounts in thousands, except per share data)

 

2017

   

2017

   

2016

   

2016

   

2016

 

Assets

                                       

Total cash and cash equivalents

  $ 106,799     $ 152,851     $ 76,307     $ 65,929     $ 44,301  

Securities available for sale

    157,854       158,685       165,579       220,856       322,699  

Securities held to maturity

    25,216       47,092       47,133       72,182       72,239  

Loans held for investment, net of unearned income

                                       

Non-covered

    1,796,263       1,784,371       1,795,954       1,774,547