Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - PACIFIC PREMIER BANCORP INC | ex_991-prxrjxconfx2016xq2.htm |
| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | a8k_ppbixip-2016xq2rjconf.htm |
1
Investor Presentation
Second Quarter 2016
Steve Gardner
Chairman & Chief Executive Officer
sgardner@ppbi.com
949-864-8000
Exhibit 99.2
2
Forward-Looking Statements
The statements contained in this presentation that are not historical facts are forward-looking statements based on management’s current
expectations and beliefs concerning future developments and their potential effects on Pacific Premier Bancorp, Inc. (the “Company”). Such
statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the
Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management.
The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or
implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the
strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the
effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal
Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of competitive new products and services
and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws and
regulations including those concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies;
technological and social media changes; the effect of acquisitions that the Company has made or may make, if any, including, without
limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to
effectively integrate an acquisition target into our operations; changes in the level of the Company’s nonperforming assets and charge-offs;
oversupply of inventory and deterioration in values of California real estate, both residential and commercial; the effect of changes in
accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission
(“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters;
possible other-than-temporary impairments of securities held by the Company; changes in consumer spending, borrowing and savings habits;
the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract
deposits and other sources of liquidity; changes in the financial performance and/or condition of the Company’s borrowers; changes in the
competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including
acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or
military conflicts, which could impact business and economic conditions in the United States and abroad; unanticipated regulatory or
judicial proceedings; and the Company’s ability to manage the risks involved in the foregoing.
Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC and other filings made by the
Company with the SEC. The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions
to any of the forward-looking statements included herein to reflect future events or developments.
3
16 Full-Service
Branch Locations
Company Profile
Exchange / Listing NASDAQ: PPBI
Focus
Small & Mid-Market
Businesses
Total Assets $3.6 Billion*
Branch Network
Note: Market data as of 8/25/2016
* As of 6/30/2016
Pacific Premier Branch Footprint
Headquarters Irvine, CA
# of Research Analysts 7 Analysts
Market Cap $732.9 Million
Avg. Daily Volume 137,202 Shares
Note: Map does not include PPBI offices outside of California
4
Strategic Transformation
Pre 2008 Conversion from a thrift to a commercial bank
2008 - 2012
Organic growth driven by dynamic sales culture
Geographic expansion through highly accretive FDIC-assisted acquisitions
Canyon National Bank (CNB) - $192 million in assets, closed on 2/11/2011 (FDIC-Assisted)
Palm Desert National Bank (PDNB) - $103 million in assets, closed on 4/27/2012 (FDIC-Assisted)
2016 and Beyond
Focus on producing EPS growth from scale, efficiency, balance sheet leverage
Target ROAA and ROATCE of 1.20% and 14%, respectively
Continue disciplined organic and acquisitive growth increasing scarcity value
2013 - 2015
Build out of commercial banking platform through acquisitions
First Associations Bank (FAB) - $424 million in assets, closed on 3/15/2013 (151 days)
San Diego Trust Bank (SDTB) - $211 million in assets, closed on 6/25/2013 (111 days)
Infinity Franchise Holdings (IFH) - $80 million in assets, closed on 1/30/2014 (73 days)
Independence Bank (IDPK) - $422 million in assets, closed on 1/26/2015 (96 days)
Security California Bancorp (SCAF) - $715 million in assets, closed 1/31/2016 (123 days)
A balance of organic and acquisitive growth to create a southern California centric
commercial bank franchise with $3.6 billion in assets
5
Small and middle market business banking focus
Full suite of business banking services, including: cash
management, payroll and merchant card services
Customized C&I and commercial real estate loans
Commercial Bank with Specialty Business Lines
Business Banking SBA Lending
HOA Banking
Income Property Lending
Small Business Administration (“SBA”) Loans
California Capital Access Program (“Cal CAP”) Loans
United State Department of Agriculture (“USDA”) Loans
Bureau of Indian Affairs (“BIA”) Loans
Nationwide leader of customized cash management,
electronic banking services and credit facilities for:
Home Owner Association (“HOA”) Companies
HOA Management Companies
Credit facilities and banking services for commercial
real estate (“CRE”) investors
Structured CRE and bridge loan flexibility
Construction Lending
Construction loans for developers and owner users on
residential and CRE properties
New team assembled in first half of 2013
Franchise Lending
Financing for established and experienced owner
operators of Quick Serve Restaurants nationwide
C&I and CRE loans secured by equipment and real
estate
6
Technology Enabled Management Systems
PPBI’s technology investments have created competitive advantages
PPBI has developed and deployed software for improving the sales process and sales management – we can efficiently and
effectively monitor all facets of the deposit and loan process, including lead generation, prospecting and closing
Customer Relationship Management (CRM) with SalesForce provides real-time updates of existing and prospective client
deposit and loan relationships. Deployed throughout the organization from RMs, PMs and credit admin
Email communication software streamlines communication between our RMs and PMs for quicker decision making
DataVault is PPBI’s proprietary software developed in-house for tracking HOA and Property Management firm’s customer
payment information, customized for internal reporting and 3rd party vendor implementation
DataVault – Proprietary Mgmt. Software SalesForce Communication SalesForce Pipeline Management
7
History of PPBI
• Total deposits compound annual growth rate of 40% since 2012
• Total loans compound annual growth rate of 37% since 2012
Total Assets – Acquired vs. Non-Acquired
February 2011
Acquired Canyon National
Bank ($192MM assets) in
FDIC-assisted deal
$807 $827
$961 $1,174
$1,714 $1,745
$1,922
$2,034 $2,039
$2,753
$2,637 $2,715
$2,791
$3,563 $3,599
$6.00
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2009 2010 2011 2012 2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016
Non-Acquired Acquired TBV/Share
April 2012
Acquired Palm Desert National
Bank ($103MM assets) in
FDIC-assisted deal
March 2013 and June 2013
Acquired First Associations
Bank ($424MM assets) and
San Diego Trust Bank
($211MM assets)
January 2014
Acquired Infinity
Franchise Holdings
($80MM assets), a
specialty finance company
January 2015
Acquired
Independence
Bank ($422MM
assets)
January 2016
Acquired SCAF
($715MM assets)
Timely and efficient acquisitions have accelerated PPBI’s growth and performance
Total Assets TBV/Share
8
Commercial Bank Transformation - Deposit Composition
Deposits – 12/31/2009 Deposits – 6/30/2016
• 36% of deposit balances are non-interest bearing deposits
• 89% of deposit balances are Core deposits *
Total Deposits: $618.7 Million
Cost of Deposits: 1.91%
Total Deposits: $2.9 Billion
Cost of Deposits: 0.28%
* Core deposits are all transaction accounts and non-brokered CD accounts below $250,000
Non-Int. Bearing
Demand
5%
Interest Bearing
Demand
4%
MMDA and
Savings
23% CDs
68%
Non-Int. Bearing
Demand
36%
Interest Bearing
Demand
5%
MMDA and Savings
38%
CDs
21%
9
Commercial &
Industrial
5%
CRE - Own. Occ.
18%
CRE - Non-Own.
Occ.
26%
Multi-family
48%
1-4 Family
2%
Other
1%
Commercial Bank Transformation – Loan Composition
Loans – 12/31/2009 Loans – 6/30/2016
• Loan portfolio is high quality and well-diversified
• Business related loans represent 49% of total loans at 6/30/16*
• 100% Loan to deposit ratio at 6/30/16
Total Loans: $576.3 Million Total Loans: $2.9 Billion
Multi-family
22%
CRE Non-Own.
Occ.
18%
Commercial &
Industrial
17%
CRE - Own.
Occ.
15%
Franchise
13%
Constr., Land &
Development
8%
1-4 Family
4%
SBA
3%
* Business loans are defined as commercial and industrial, franchise, commercial owner occupied, and SBA
10
Conservative Credit Culture
Nonperforming Assets to Total Assets (%)
The Company has a history of effective credit risk management and out performing peers
• No troubled debt restructurings (“TDRs”)
• Tactical loan sales utilized strategically to manage various risks
1.04
1.70
1.58 1.66
1.36
0.48 0.58
0.40
3.26
1.62
1.31
0.76
0.55
1.67
1.08
0.38 0.33
0.21 0.15 0.20 0.20 0.14 0.12 0.12 0.21 0.19 0.18 0.18 0.17
0.15
2.93
3.62
3.96
4.11
4.26 4.30 4.24
4.39
4.23 4.29
4.06 4.04
3.77
3.48 3.39
3.21
2.96
1.56
1.24
1.10 1.18 1.05
0.91
0.80 0.74 0.69 0.59 0.58
0.74
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
PPB Peers *
CNB
Acquisition
2/11/11
PDNB
Acquisition
4/27/12
* California peer group consists of all insured California institutions, from SNL Financial.
11
CRE to Capital Concentration
627%
499%
415%
372%
310%
349%
316%
336%
362% 352%
0%
100%
200%
300%
400%
500%
600%
700%
2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 Q2 2016
Loan portfolio diversification has allowed us to decrease our CRE concentration
• After significant decrease, the Bank has held relatively steady since 2012, not altering our disciplined
credit approach with this asset class
Held steady
CRE as a Percent of Total Capital
12
Operating Revenue & Net Interest Margin
Annual Operating Revenue
Operating revenue CAGR of 31% since 2009 driven by strong net interest margin
Note: Operating revenue = net interest income + noninterest income.
*Annualized
Net Interest Margin
$ in millions
$23.9 $27.4
$47.1
$58.4
$67.3
$87.0
$120.7
$162.1
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
2009 2010 2011 2012 2013 2014 2015 1H
2016*
3.17%
3.81%
4.55%
4.65%
4.20% 4.23% 4.27%
4.48%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2009 2010 2011 2012 2013 2014 2015 YTD
Q2'16
13
Strong Loan Yields - Declining Cost of Deposits
Loan Yields Cost of Deposits
0.33% 0.36% 0.34% 0.31% 0.32% 0.31% 0.31% 0.28%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Total Deposits Cost of Deposits
$ in millions
Our diversified businesses have optimized our NIM through disciplined pricing as well
as loan and deposit growth
5.63%
5.35%
5.50%
5.30%
5.37%
5.55%
5.67%
5.46%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Loans Loan Yield
14
Noninterest Expense & Efficiency
Adjusted Noninterest Expense / Avg. Assets Efficiency Ratio
The Company anticipates it will continue to benefit from economies of scale as it grows
by investing in its loan and deposit production capabilities
NOTE: Efficiency Ratio represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and non-recurring merger related expense to the
sum of net interest income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities, other-than-temporary impairment recovery (loss) on investment
securities, and gain on FDIC-assisted transactions.
Adjusted noninterest expense excludes other real estate owned operations, core deposit intangible amortization and non-recurring merger related costs.
64.7% 64.1%
60.0% 58.6%
64.7%
61.4%
55.9% 54.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
2009 2010 2011 2012 2013 2014 2015 Q2'16
2.09%
2.21%
2.67%
2.90% 2.95% 2.87%
2.58%
2.54%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2009 2010 2011 2012 2013 2014 2015 Q2'16
15
Capital Resources
PPBI and PPB remain well capitalized with strong earnings capacity to sustain growth
strategy and well capitalized levels
(1) Please refer to non-GAAP reconciliation
As of June, 2016
Well-Capitalized
Requirement
Pacific Premier
Bancorp, Inc. Pacific Premier Bank
Regulatory Capital Ratios:
Tier 1 Leverage Capital Ratio 5.00% 9.88% 11.17%
Common Equity Tier 1 Risk-based Capital Ratio 6.50% 10.58% 12.32%
Tier 1 Risk-Based Capital Ratio 8.00% 10.90% 12.32%
Total Risk Based Capital Ratio 10.00% 13.45% 12.94%
Tangible Common Equity Ratio (1) 9.41% 10.97%
16
Overview of Q2 2016 – Highlights
Completed conversion of Security California Bancorp on the weekend of April 22-24, 2016, less than three
months after close. Consolidated 3 PPB branches on the same weekend.
Closed 3 branches during Q3 2016 in the cities of Seal Beach, Point Loma and Palm Springs – 16 branches
Net income of $10.4 million, an increase of $1.8 million over the prior quarter, or 21.2%
Diluted earnings per share of $0.37, an increase of $0.04 over the prior quarter, or 12.1%
ROATCE of 13.48%, or 13.86% adjusted to exclude merger related expenses
ROAA of 1.17%, or 1.20% adjusted to exclude merger related expenses
Originated $299 million of new loans, a 19% annualized increase from the Q1 2016
Efficiency ratio of 54% and noninterest expense as a percent of assets of 2.59%
Tangible book value per share increased to $11.87, compared to $10.36 as of June 30, 2015
2nd Quarter Highlights
Source: SNL Financial, information for PPBI as of 6/30/2016
17
Superior Market Performance (PPBI)
Source: SNL Financial, market information as of 6/30/2016
Since June 2014, PPBI’s stock price has significantly outperformed its publicly traded bank
peers (SNL Bank Index / NASDAQ Bank Index)
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16
PPBI SNL Bank NASDAQ Bank
PPBI +71%
NASDAQ
Bank
SNL Bank -2%
+9%
18
Strategically focused – Financially Motivated
PPBI’s management team operates the bank with the understanding we are growing toward $10.0 billion
• Our business model is always evolving, transforming and improving
• Continue to build a quality banking franchise and leverage core competencies
• Investments in and the strengthening of the entire team is an on-going process
Continue to Evolve and Strive for Superior Performance
Operational Integrity Leads to Strong Internal Controls and Risk Management
PPBI’s operating environment and culture have been built over the years and is designed to be scalable
• Sales culture maturation combined with traditional Relationship Managers and the leveraging of technology
• BSA/AML – automated Rule Based Risk Rating and statistical analytics covering entire client base
• CRA – enhanced program to exceed community group requirements and large bank exam standards
Keen Focus on Creating Maximum Shareholder Value
Management consistently communicates and executes on its strategic plan
• Our Board regularly evaluates capital management, strategic direction and the alternatives to maximize shareholder value
• Focused on increasing earnings and building TBV through growth strategies and improving efficiencies
• Our goal is to create a fundamentally sound franchise with strong earnings and risk management, which will be an attractive
acquisition target for a potential buyer
19
Scarcity Value in Southern California
Source: SNL Financial as of 6/30/2016
Note: All dollars in thousands
• Significant scarcity value for quality and
sizeable banking franchises in Southern
California
• PPBI is 8th largest bank headquartered in
Southern California
• Includes all banks and thrifts headquartered
in Southern California (Orange, Los Angeles,
San Bernardino, Riverside, and San Diego
counties). Sorted by total assets, excludes
pending merger targets and ethnic-focused
banks
Largest 25 Banks Headquartered in Southern California
Rank Company name Exchange City
Total Assets
($000s)
1 PacWest Bancorp NASDAQ Beverly Hills $ 21,147,139
2 Banc of California, Inc. NYSE Irvine $ 10,157,662
3 CVB Financial Corp. NASDAQ Ontario $ 8,312,307
4 BofI Holding, Inc. NASDAQ San Diego $ 7,705,622
5 Opus Bank NASDAQ Irvine $ 7,468,083
6 F & M Bank of Long Beach OTCQB Long Beach $ 6,220,649
7 Community Bank OTC Pink Pasadena $ 3,653,260
8 Pacific Premier Bancorp, Inc. NASDAQ Irvine $ 3,598,653
9 Grandpoint Capital, Inc. OTC Pink Los Angeles $ 3,242,077
10 CU Bancorp NASDAQ Los Angeles $ 2,739,533
11 First Foundation Inc. NASDAQ Irvine $ 2,690,173
12 Manufacturers Bank - Los Angeles $ 2,578,808
13 American Business Bank OTC Pink Los Angeles $ 1,744,636
14 Montecito Bancorp - Santa Barbara $ 1,258,251
15 Provident Financial Holdings, Inc. NASDAQ Riverside $ 1,173,751
16 Pacific Mercantile Bancorp NASDAQ Costa Mesa $ 1,100,915
17 Plaza Bank - Irvine $ 1,061,416
18 Malaga Financial Corporation OTC Pink Palos Verdes Estates $ 993,557
19 Silvergate Bank - La Jolla $ 952,654
20 Sunwest Bank - Irvine $ 951,597
21 California First National Bancorp NASDAQ Irvine $ 860,890
22 Commercial Bank of California - Irvine $ 777,974
23 Bank of Hemet - Riverside $ 655,589
24 Community West Bancshares NASDAQ Goleta $ 622,755
25 Seacoast Commerce Bank - San Diego $ 526,359
20
• Continue to drive economies of scale and operating leverage
• Positioned to deliver strong profitability
• Ability to integrate business lines that generate higher risk adjusted returns
• Proven track record of executing on acquisitions and organic growth
• Well positioned to evaluate attractive acquisition opportunities
• Create scarcity value among banks in Southern California
PPBI Outlook
Building Long-term Franchise Value
21
Appendix material
PPBI Supplemental Information
22
Financial Highlight Trends
Note: All dollars in thousands, except per share. *Please refer to non-GAAP reconciliation
June 30,
2015
September 30,
2015
December 31,
2015
March 31,
2016
June 30,
2016
Balance Sheet
Total Assets $ 2,636,756 $ 2,715,298 $ 2,790,646 $ 3,563,085 $ 3,598,653
Total Gross Loans 2,118,323 2,167,547 2,262,880 2,858,713 2,930,735
Total Deposits 2,095,983 2,139,207 2,195,123 2,906,264 2,931,001
Gross Loans / Deposits 101.1% 101.3% 103.1% 98.4% 100.0%
Financial Performance
Net Interest Income $ 27,093 $ 26,696 $ 28,837 $ 34,201 $ 37,561
Provision for Loan Losses 1,833 1,062 1,700 1,120 1,589
Total Non-Interest Income 4,380 4,378 4,217 4,862 4,450
Total Non-Interest Expense 17,214 17,374 18,539 23,647 23,695
Net Income before Taxes 12,426 12,638 12,815 14,296 16,727
Provision for Taxes 4,601 4,801 4,750 5,742 6,358
Net Income 7,825 7,837 8,065 8,554 10,369
Diluted EPS $ 0.36 $ 0.36 $ 0.37 $ 0.33 $ 0.37
Performance & Capital Ratios
Return on Average Assets 1.18% 1.19% 1.18% 1.04% 1.17%
Return on Average Tangible Common Equity* 14.83% 14.25% 14.09% 12.02% 13.48%
Return on Adjusted Average Tangible Common Equity* 14.83% 14.96% 14.92% 14.91% 13.86%
Net Interest Margin 4.31% 4.24% 4.43% 4.48% 4.51%
Tangible Common Equity/ Tangible Assets * 8.65% 8.75% 8.82% 9.15% 9.41%
Tangible Book Value Per Share * $ 10.36 $ 10.80 $ 11.17 $ 11.46 $ 11.87
Common Equity Tier 1 Risk-based Capital Ratio 9.81% 10.02% 9.91% 10.43% 10.58%
Tier 1 Risk-based Ratio 10.12% 10.40% 10.28% 10.75% 10.90%
Risk-based Capital Ratio 13.40% 13.65% 13.43% 13.32% 13.45%
23
Non-GAAP Financial Measures
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are a non-GAAP financial measures derived from GAAP-based
amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We calculate
tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing
common stockholders’ equity by common shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude intangible
assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is
useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP
measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other
companies. A reconciliation of the non-GAAP measure of tangible common equity ratio to the GAAP measure of common equity ratio and tangible book value per share to the GAAP
measure of book value per share are set forth below.
Note: All dollars in thousands, except per share data.
June 30, September 30, December 31, March 31, June 30,
2015 2015 2015 2016 2016
Total stockholders' equity $ 281,593 $ 290,767 $ 298,980 $ 428,894 $ 440,630
Less: Intangible assets (58,690) (58,346) (58,002) (113,230) (112,439)
Tangible common equity $ 222,903 $ 232,421 $ 240,978 $ 315,664 $ 328,191
Total assets $ 2,636,756 $ 2,715,298 $ 2,790,646 $ 3,563,085 $ 3,598,653
Less: Intangible assets (58,690) (58,346) (58,002) (113,230) (112,439)
Tangible assets $ 2,578,066 $ 2,656,952 $ 2,732,644 $ 3,449,855 $ 3,486,214
Common Equity ratio 10.68% 10.71% 10.71% 12.04% 12.24%
Less: Intangibility equity ratio (2.03%) (1.96%) (1.89%) (2.89%) (2.83%)
Tangible common equity ratio 8.65% 8.75% 8.82% 9.15% 9.41%
Basic shares outstanding 21,510,558 21,510,678 21,570,746 27,537,233 27,650,533
Book value per share $ 13.09 $ 13.52 $ 13.86 $ 15.58 $ 15.94
Less: Intangible book value per share (2.73) (2.72) (2.69) (4.12) (4.07)
Tangible book value per share $ 10.36 $ 10.80 $ 11.17 $ 11.46 $ 11.87
24
Non-GAAP Financial Measures
For the quarter periods presented below, adjusted net income for return on average tangible common equity, adjusted net income for adjusted return on average tangible common equity
and average tangible common equity are non-GAAP financial measures derived from GAAP-based amounts. We calculate return on average tangible common equity by adjusting net
income for the effect of CDI amortization and exclude the average CDI and average goodwill from the average stockholders' equity during the period. We calculate adjusted return on
average tangible common equity by adjusting net income for the effect of CDI amortization and merger related expense and exclude the average CDI and average goodwill from the
average stockholders' equity during the period. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of
risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our
capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies
may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies. A
reconciliation of the non-GAAP measures of return on average tangible common equity and adjusted return on average tangible common equity to the GAAP measure of return on
common stockholders’ equity is set forth below.
Note: All dollars in thousands
June 30, September 30, December 31, March 31, June 30,
2015 2015 2015 2016 2016
Net income $ 7,825 $ 7,837 $ 8,065 8,554 10,369
Plus: Tax effected CDI amortization 216 213 217 206 400
Adjusted net income for return on average tangible common
equity $ 8,041 $ 8,050 $ 8,282 8,760 10,769
Plus: Merger related, net of tax - 400 407 2,103 307
Plus: Litigation expense, net of tax - - 82 - -
Adjusted net income for adjusted return on average tangible
common equity $ 8,041 $ 8,450 $ 8,771 10,863 11,076
Average stockholders' equity $ 275,860 $ 284,486 $ 293,334 387,202 432,343
Less: Average core deposit intangible 8,080 7,686 7,394 10,110 10,876
Less: Average goodwill 50,965 50,832 50,832 85,581 101,923
Average tangible common equity $ 216,815 $ 225,968 $ 235,108 291,511 319,543
Return on average common equity 11.35% 11.02% 11.00% 8.84% 9.59%
Plus: Intangible return on average tangible common equity 3.49% 3.23% 3.09% 3.18% 3.89%
Return on average tangible common equity 14.83% 14.25% 14.09% 12.02% 13.48%
Adjusted return on average tangible common equity 14.83% 14.96% 14.92% 14.91% 13.86%
25
Non-GAAP Financial Measures
Note: All dollars in thousands
For quarter period presented below, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures derived from
GAAP-based amounts. We calculate these figures by excluding merger related expenses in the period results. Management believes that the exclusion
of such items from these financial measures provides useful information to an understanding of the operating results of our core business. However,
these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use
different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other
companies.
June 30, September 30, December 31, March 31, June 30,
2015 2015 2015 2016 2016
Net income $ 7,825 $ 7,837 $ 8,065 $ 8,554 $ 10,369
Plus: Merger related, net of tax - 400 407 2,103 307
Plus: Litigation expense, net of tax - - 82 - -
Adjusted net income $ 7,825 $ 8,237 $ 8,554 $ 10,657 $ 10,676
Diluted earnings per share $ 0.36 $ 0.36 $ 0.37 $ 0.33 $ 0.37
Plus merger related and litigation expenses, net of tax - 0.02 0.02 0.08 0.01
Adjusted diluted earnings per share $ 0.36 $ 0.38 $ 0.39 $ 0.41 $ 0.38
Return on average assets 1.18% 1.19% 1.18% 1.04% 1.17%
Plus merger related and litigation expenses, net of tax 0.00% 0.06% 0.07% 0.26% 0.03%
Adjusted return on average assets 1.18% 1.25% 1.25% 1.30% 1.20%