CHARLOTTE, N.C., April 25, 2013 (GLOBE NEWSWIRE) -- Park Sterling Corporation (Nasdaq:PSTB), the holding company for Park Sterling Bank, today released unaudited results of operations and other financial information for the first quarter of 2013. Highlights at and for the three months ended March 31, 2013 include:
Highlights
- Net income available to common shareholders increased 151% from prior quarter to $3.2 million, or $0.07 per share
- Adjusted net income available to common shareholders, which excludes merger-related expenses, increased 7% from prior quarter to $3.8 million, or $0.09 per share
- Net interest margin decreased to 4.15% from 4.36% at December 31, 2012
- Adjusted net interest margin, which excludes accelerated accretion of net acquisition accounting fair market value adjustments, increased to 4.15% from 4.13% at December 31, 2012
- Nonperforming loans decreased to 1.29% of total loans from 1.31% at December 31, 2012
- Nonperforming assets decreased to 1.93% of total assets from 2.11% at December 31, 2012
- Tangible common equity to tangible assets increased to 11.51% from 11.05% at December 31, 2012
- Completed deployment of new data network utilizing a Citrix®-based private cloud solution
- Completed conversion of former Citizens South Bank customers to Park Sterling's Jack Henry SilverLake System® core operating platform
- Well positioned to pursue discussions regarding potential additional strategic partnerships
"Park Sterling's first quarter results confirm the progress achieved in executing our growth strategies," said James C. Cherry, Chief Executive Officer. "We reported record operating results, with adjusted net income available to common shareholders, which excludes merger-related expenses, increasing 7% to $3.8 million, or $0.09 per share, for the three months ended March 31, 2013 compared to the fourth quarter of 2012. Our metropolitan markets continued to post strong results by generating $7.8 million in net loan originations during the period, representing a 7% annualized growth rate. We also posted continued growth and resulting record revenues in both our mortgage banking and wealth management operations. In addition, we benefited from surpassing our targeted $2.5 million in quarterly cost savings from the merger with Citizens South and remain well positioned to invest in future growth opportunities.
Asset quality continued to improve during the first quarter and remains a strength of our company. Nonperforming loans decreased as a percentage of total loans from 1.31% at December 31, 2012 to 1.29% at March 31, 2013. Nonperforming assets similarly decreased as a percentage of total assets from 2.11% to 1.93%. Approximately 58% of Park Sterling's loans continue to carry acquisition accounting related net fair market value adjustments, which we believe will help buffer future results against potential loan losses. Adjusted allowance for loan losses, which combines our normal allowance and these loan marks, represented 4.54% of total loans at quarter-end. Annualized net charge-offs for the quarter represented a modest 0.05% of average loans, and we posted a net recovery of 0.08% when adjusting losses for the impact of acquisition accounting related to purchase credit impaired (PCI) loans. Finally, we posted a $428,000 net gain from the operation of OREO for the period, reflecting both continued improvement in our operating markets and prudent carrying values. We continue to believe this mixture of good asset quality and sound reserve levels, combined with our strong capital position and liquidity, provides an excellent foundation for future growth.
Also during the quarter, we implemented a new data network, utilizing a Citrix®-based private cloud solution, and completed conversion of the former Citizens South's customer base to Park Sterling's Jack Henry SilverLake® core operating platform. As a result of those successful efforts, Park Sterling is now well positioned to pursue discussions regarding potential additional strategic partnerships. We remain confident in our ability to unite with attractive, like-minded partners that share Park Sterling's vision of building a full-service regional community bank across our target markets."
First Quarter 2013 Financial Results
Income Statement
Park Sterling reported a 151% increase in net income available to common shareholders to a record $3.2 million, or $0.07 per share, for the three months ended March 31, 2013 ("2013Q1"). This compares to net income of $1.3 million, or $0.03 per share, for the three months ended December 31, 2012 ("2012Q4") and net income of $1.7 million, or $0.05 per share, for the three months ended March 31, 2012 ("2012Q1"). The increase from 2012Q4 resulted primarily from continued improvements in asset quality, as reflected in a lower provision for loan losses and a net gain from the operation of OREO, and the realization of additional merger cost savings. The increase from 2012Q1 resulted primarily from increased earning assets, higher net interest margin and higher noninterest income associated with the merger with Citizens South Banking Corporation, which was completed on October 1, 2012, combined with continued organic growth.
Park Sterling reported a 7% increase in adjusted net income available to common shareholders, which excludes merger related expenses, to a record $3.8 million, or $0.09 per share, for 2013Q1. This compares to adjusted net income available to common shareholders of $3.5 million, or $0.08 per share, for 2012Q4 and of $2.4 million, or $0.07 per share, for 2012Q1. The increase in adjusted net income available to common shareholders from 2012Q4 again reflects improvements in asset quality and additional cost savings, while the increase from 2012Q1 primarily reflects higher earning assets, net interest margin and noninterest income associated with the merger with Citizens South, combined with continued organic growth.
Net interest income totaled $17.7 million for 2013Q1, which represented a $1.8 million, or 9%, decrease from $19.5 million for 2012Q4, and a $6.0 million, or 51%, increase from $11.7 million for 2012Q1. Average earning assets decreased $50.6 million, or 3%, from 2012Q4 to $1.7 billion at 2013Q1, which included a $42.0 million, or 3%, decrease in average loans to $1.3 billion, driven by a drop in acquired loans (see "Balance Sheet" below). Average earning assets increased $718.6 million, or 71%, from 2012Q1, which included a $600.2 million, or 80%, increase in average loans, driven by the merger with Citizens South.
Net interest margin was 4.15% in 2013Q1, representing a 21 basis point decrease from 4.36% in 2012Q4 and a 50 basis point decrease from 4.65% in 2012Q1. Adjusted net interest margin, which excludes accelerated interest income, was 4.15% in 2013Q1, representing a 2 basis point improvement from 4.13% in 2012Q4 and an 8 basis point improvement from 4.07% in 2012Q1. Accelerated interest income, which totaled $1.0 million in 2012Q4 and $1.4 million in 2012Q1, primarily reflects accelerated accretion of credit and interest rate marks resulting from borrowers repaying performing acquired loans faster than required by their contractual terms and/or restructuring loans in such a way as to effectively result in a new loan under the contractual cash flow method of accounting, both of which result in the associated remaining credit and interest rate marks being fully accreted into interest income. There was no accelerated interest income in 2013Q1.
Provision for loan losses was $309,000 for 2013Q1, compared to $994,000 for 2012Q4 and $123,000 for 2012Q1. Results for 2013Q1 were driven by $436,000 of provision expense associated with acquired loans resulting from impairment in one of the company's six PCI loan pools associated with the merger with Community Capital Corporation (Community Capital). Results for 2012Q4 included $906,000 of provision expense associated with acquired loans, comprised of a $676,000 impairment in two of the company's six PCI loan pools associated with the merger with Community Capital and a $230,000 qualitative allowance associated with performing loans acquired in the merger with Citizens South.
Noninterest income decreased $240,000, or 6%, to $3.6 million for 2013Q1, compared to $3.8 million in 2012Q4. Mortgage banking income increased $153,000, or 19%, to a record $968,000, including $89,000 from revenue recognition associated with ASC 815-10-S99-1 (formerly Staff Accounting Bulletin 109), in part due to an increased pipeline of mortgage loans and origination capacity resulting from the merger with Citizens South. Income from wealth management activities increased $15,000, or 2%, to a record $708,000. These increases were, however, offset by decreases in service charges on deposit accounts, driven by lower NSF fees, and decreased other noninterest income, driven by lower claims on FDIC loss share agreements. ATM and card income also decreased during the period due, in part, to timing issues related to vendor conversion.
Noninterest expenses decreased $4.2 million, or 21%, in 2013Q1 to $16.0 million, compared to $20.3 million in 2012Q4 and increased $5.0 million, or 46%, from $11.0 million in 2012Q1. Adjusted noninterest expenses, which excludes merger-related expenses of $836,000, $3.2 million and $930,000 for 2013Q1, 2012Q4 and 2012Q1, respectively, decreased $1.9 million, or 11%, to $15.1 million in 2013Q1 compared to $17.1 million in 2012Q4, and increased $5.1 million, or 51%, compared to $10.1 million in 2012Q1. The decrease in adjusted noninterest expenses from 2012Q4 resulted from a $623,000, or 7%, decrease in employee related expenses, reflecting continued cost reduction efforts following the merger with Citizens South, and a $1.6 million, or 137%, swing in OREO operating costs from an expense of $1.2 million to a gain of $428,000, reflecting continued success in resolving problem assets. The increase in adjusted noninterest expenses from 2012Q1 resulted primarily from the merger with Citizens South.
Balance Sheet
Total assets decreased $49.2 million, or 2%, to $1.98 billion at 2013Q1 compared to total assets of $2.03 billion at 2012Q4. Cash and equivalents decreased $61.9 million, or 34%, to $122.2 million during the quarter. Approximately $52.0 million of this decrease resulted from the redeployment of funds into the securities portfolio, which totaled $305.0 million at 2013Q1, and approximately $9.9 million was utilized to reduce higher-priced deposits. Total loans, which exclude loans held for sale, decreased $27.0 million, or 2%, to $1.3 billion at 2013Q1, including $91.9 million in covered loans. This decrease included a managed $18.3 million, or 8%, decline in less attractive PCI loans. The remainder of the decrease resulted from a decline in other acquired loans. Our metropolitan markets, which include Charlotte, Raleigh and Wilmington, North Carolina and Greenville and Charleston, South Carolina, generated net loan originations of $7.8 million during the quarter, representing a 7% annualized growth rate. This origination activity remains somewhat tempered by aggressive competition with respect to term structure and interest rates, as well as by continued general softness in the economy.
Loan mix did not shift materially during the first quarter. Total consumer loans remained at 31% of total loans at 2013Q1, with residential mortgages and home equity lines of credit remaining at 14% and 12% of total loans, respectively. The combination of commercial and industrial and owner-occupied real estate loans remained the largest category at 30% of total loans at 2013Q1, but declined from 31% of total loans at 2012Q4. Investor owned commercial real estate represented 28% of total loans compared to 27% at 2012Q4. Acquisition, construction and development (A,C&D) loans represented 11% of total loans compared to 10% at 2012Q4. Approximately 25% of this A,C&D exposure is held net of acquisition accounting fair market value adjustments on PCI loans.
In terms of accounting designations, PCI loans decreased $18.3 million, or 8%, during 2013Q1 to $216.0 million (16% of total loans), acquired performing loans decreased $58.4 million, or 10%, to $556.1 million (42% of total loans), and non-acquired loans increased $49.7 million, or 10%, to $557.6 million (42% of total loans). Non-acquired loans include certain renewed and/or restructured acquired performing loans that are redesignated as non-acquired, which accounts for the difference between growth in this accounting category and the earlier mentioned net growth in loan originations in our metropolitan markets. Acquired performing loans include a remaining $7.9 million net acquisition accounting fair market value adjustment, representing a 1.41% "mark," and PCI loans include a remaining $17.6 million net acquisition accounting fair market value adjustment, representing a 16.13% "mark." Period end accretable yield, which is an estimate of future interest income on a level-yield basis over the life of PCI loans, increased $2.8 million, or 7%, to $45.6 million at 2013Q1 due to an increase in expected cash flows.
Total deposits decreased $37.2 million, or 2%, to $1.59 billion at 2013Q1 compared to $1.63 billion at 2012Q4. Noninterest bearing demand deposits increased $13.4 million, or 6%, to $256.9 million (16% of total deposits) as a result of continued focus on this category. Money market, NOW and savings deposits decreased $25.2 million, or 3%, to $733.5 million (46% of total deposits), due in part to post-merger repricing strategies. Local time deposits decreased $18.1 million, or 3%, to $500.7 million (31% of total deposits), due again in part to post-merger repricing strategies. Finally, brokered deposits decreased $7.2 million, or 7%, to $103.8 million (7% of total deposits) as management elected not to renew maturing certificates.
Total borrowings decreased $14.7 million, or 14%, to $87.1 million at 2013Q1 compared to $101.7 million at 2012Q4, due to a reduction in Federal Home Loan Bank (FHLB) advances. Borrowings at 2013Q1 included $55.0 million in FHLB borrowings, $14.8 million of acquired trust preferred securities, net of acquisition accounting fair market value adjustments, and $6.9 million of Tier 2-eligible subordinated debt.
Total shareholders' equity increased $3.3 million, or 1%, to $279.0 million at 2013Q1 compared to $275.5 million at 2012Q4, driven by higher retained earnings. Total shareholders' equity includes $20.5 million of preferred stock issued in association with the Citizens South merger upon conversion of its preferred stock previously issued to the United States Department of the Treasury in connection with its participation in the Small Business Lending Fund. The company's ratio of tangible common equity to tangible assets increased to 11.51% at 2013Q1 from 11.05% at 2012Q4 as a result of the increase in equity and decrease in total assets. Similarly, the Tier 1 leverage ratio increased to 11.72% at 2013Q1 from 11.25% at 2012Q4.
A revision to the net acquisition accounting fair market value adjustments associated with the FDIC receivable for loss share agreements led to a $1.6 million, or 7%, increase in goodwill resulting from the merger with Citizens South to $24.7 million at 2013Q1 and 2012Q4, compared to the originally reported $23.1 million at 2012Q4. This revision reflects a measurement period adjustment to increase expected cash flows from the underlying covered loan and OREO portfolios, which suggests a reduced need for loss share reimbursements over the life of the agreements.
Asset Quality
Asset quality continued to improve in the first quarter and remains a point of strength for the company. Nonperforming loans decreased $708,000, or 4%, to $17.1 million at 2013Q1, or 1.29% of total loans, compared to $17.8 million at 2012Q4, or 1.31% of total loans. Nonperforming assets decreased $4.5 million, or 11%, to $38.4 million at 2013Q1, or 1.93% of total assets, compared to $42.9 million at 2012Q4, or 2.11% of total assets. Nonperforming assets include $7.7 million of covered OREO for which the company expects certain losses to be reimbursed under the FDIC loss share agreements. The company reported net charge-offs of $151,000, or 0.05% of average loans (annualized), in 2013Q1, compared to a net recovery of $390,000 in 2012Q4, or 0.11% of average loans (annualized). Excluding the recognition of previously expensed impairments on PCI loans, the company reported a net recovery of $264,000, or 0.08% of average loans (annualized), in 2013Q1.
The allowance for loan losses was $10.7 million, or 0.81% of total loans at 2013Q1, compared to $10.6 million, or 0.78% of total loans at 2012Q4. Adjusted allowance for loan losses, which includes the allowance for loan losses and net acquisition accounting fair market value adjustments for acquired performing and PCI loans, represented 4.54% of total loans at 2013Q1 compared to 4.74% at 2012Q4.
During the first quarter of 2011, and as contemplated in Park Sterling's 2010 equity offering, 568,260 shares of restricted stock were issued but will not vest until the company's share price achieves certain performance thresholds above the equity offering price (these restricted stock awards vest one-third each when the share price reaches, for 30 consecutive days, $8.125, $9.10 and $10.40 per share, respectively). These performance thresholds have not yet been achieved. Accordingly, these additional shares have been excluded from earnings and tangible book value per share calculations.
Conference Call
A conference call will be held at 8:30 a.m., Eastern Time this morning (April 25, 2013). The conference call can be accessed by dialing (888) 317-6016 and requesting the Park Sterling Corporation earnings call. Listeners should dial in 10 minutes prior to the start of the call. The live webcast and presentation slides will be available on www.parksterlingbank.com under Investor Relations, "Investor Presentations."
A replay of the webcast will be available on www.parksterlingbank.com under Investor Relations, "Investor Presentations" shortly following the call. A replay of the conference call can be accessed approximately one hour after the call by dialing (877) 344-7529 and requesting conference number 10027637.
About Park Sterling Corporation
Park Sterling Corporation, the holding company for Park Sterling Bank, is headquartered in Charlotte, North Carolina. Park Sterling, a regional community-focused financial services company with approximately $2 billion in assets, is the largest community bank in the Charlotte area and has 44 banking offices stretching across the Carolinas and into North Georgia. The bank serves professionals, individuals, and small and mid-sized businesses by offering a full array of financial services, including deposit, mortgage brokerage, cash management, consumer and business finance, and wealth management services. Park Sterling prides itself on being large enough to help customers achieve their financial aspirations, yet small enough to care that they do. Park Sterling is focused on building a banking franchise that is noted for sound risk management, strong community focus and exceptional customer service. For more information, visit www.parksterlingbank.com. Park Sterling Corporation shares are traded on NASDAQ under the symbol PSTB.
Non-GAAP Financial Measures
Tangible assets, tangible common equity, tangible book value, adjusted net income available to common shareholders, adjusted net interest margin, adjusted noninterest income, adjusted noninterest expenses, adjusted allowance for loan losses, adjusted net charge-offs/ recoveries, and related ratios and per share measures, as used throughout this release, are non-GAAP financial measures. For additional information, see "Reconciliation of Non-GAAP Financial Measures" in the accompanying tables.
Cautionary Statement Regarding Forward Looking Statements
This news release contains, and Park Sterling and its management may make, certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words such as "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," "goal," "target" and similar expressions. These forward-looking statements express management's current expectations or forecasts of future events, results and conditions, including financial and other estimates and expectations regarding the merger with Citizens South Banking Corporation; the general business strategy of engaging in bank mergers, organic growth, branch openings and closings, expansion or addition of product capabilities, expected footprint of the banking franchise and anticipated asset size; anticipated loan growth; changes in loan mix and deposit mix; capital and liquidity levels; net interest income, provision expense, noninterest income and noninterest expenses; credit trends and conditions, including loan losses, allowance for loan loss, charge-offs, delinquency trends and nonperforming asset levels; the amount, timing and prices of share repurchases; and other similar matters. These forward-looking statements are not guarantees of future results or performance and by their nature involve certain risks and uncertainties that are based on management's beliefs and assumptions and on the information available to Park Sterling at the time that these disclosures were prepared. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed in any of Park Sterling's filings with the SEC: failure to realize synergies and other financial benefits from the Citizens South merger within the expected time frames; increases in expected costs or decreases in expected savings or difficulties related to integration of the merger; inability to identify and successfully negotiate and complete additional combinations with potential merger partners or to successfully integrate such businesses into Park Sterling, including the company's ability to adequately estimate or to realize the benefits and cost savings from and limit any unexpected liabilities acquired as a result of any such business combination; the effects of negative or soft economic conditions or a "double dip" recession, including stress in the commercial real estate markets or delay or failure of recovery in the residential real estate markets; the impact of deterioration of the United States credit standing; changes in consumer and investor confidence and the related impact on financial markets and institutions; changes in interest rates; failure of assumptions underlying the establishment of allowances for loan losses; deterioration in the credit quality of the loan portfolio or in the value of the collateral securing those loans; deterioration in the value of securities held in the investment securities portfolio; fluctuations in the market price of the common stock, regulatory, legal and contractual requirements, other uses of capital, the company's financial performance, market conditions generally or modification, extension or termination of the authorization by the board of directors, in each case impacting purchases of common stock; legal and regulatory developments, including changes in the federal risk-based capital rules; increased competition from both banks and nonbanks; changes in accounting standards, rules and interpretations, inaccurate estimates or assumptions in accounting, including acquisition accounting fair market value assumptions and accounting for purchased credit-impaired loans, and the impact on Park Sterling's financial statements; and management's ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk.
Forward-looking statements speak only as of the date they are made, and Park Sterling undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
| PARK STERLING CORPORATION | |||||
| CONDENSED CONSOLIDATED INCOME STATEMENT | |||||
| THREE MONTH RESULTS | |||||
| ($ in thousands, except per share amounts) | March 31, | December 31, | September 30, | June 30, | March 31, |
| 2013 | 2012 | 2012 | 2012 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Interest income | |||||
| Loans, including fees | $ 18,140 | $ 20,269 | $ 10,346 | $ 10,416 | $ 12,110 |
| Taxable investment securities | 866 | 792 | 826 | 969 | 1,020 |
| Tax-exempt investment securities | 190 | 191 | 187 | 186 | 185 |
| Nonmarketable equity securities | 48 | 80 | 22 | 28 | 64 |
| Interest on deposits at banks | 62 | 79 | 34 | 28 | 10 |
| Federal funds sold | 17 | 11 | 16 | 15 | 8 |
| Total interest income | 19,323 | 21,422 | 11,431 | 11,642 | 13,397 |
| Interest expense | |||||
| Money market, NOW and savings deposits | 407 | 491 | 339 | 333 | 326 |
| Time deposits | 608 | 777 | 632 | 720 | 821 |
| Short-term borrowings | 6 | 7 | -- | -- | 3 |
| FHLB advances | 137 | 143 | 149 | 148 | 161 |
| Subordinated debt | 429 | 472 | 340 | 341 | 367 |
| Total interest expense | 1,587 | 1,890 | 1,460 | 1,542 | 1,678 |
| Net interest income | 17,736 | 19,532 | 9,971 | 10,100 | 11,719 |
| Provision for loan losses | 309 | 994 | 7 | 899 | 123 |
| Net interest income after provision | 17,427 | 18,538 | 9,964 | 9,201 | 11,596 |
| Noninterest income | |||||
| Service charges on deposit accounts | 764 | 879 | 324 | 299 | 314 |
| Mortgage banking income | 968 | 815 | 662 | 540 | 461 |
| Income from wealth management activities | 708 | 693 | 665 | 661 | 599 |
| ATM and card income | 598 | 664 | 207 | 223 | 228 |
| Income from bank-owned life insurance | 381 | 450 | 294 | 260 | 259 |
| Gain on sale of securities available for sale | -- | -- | 989 | 489 | -- |
| Other noninterest income | 149 | 307 | 177 | 91 | 94 |
| Total noninterest income | 3,568 | 3,808 | 3,318 | 2,563 | 1,955 |
| Noninterest expenses | |||||
| Salaries and employee benefits | 8,778 | 11,041 | 6,314 | 5,871 | 6,118 |
| Occupancy and equipment | 1,908 | 1,942 | 928 | 910 | 820 |
| Data processing and outside service fees | 1,653 | 1,599 | 784 | 696 | 1,291 |
| Legal and professional fees | 893 | 1,077 | 1,181 | 614 | 312 |
| Deposit charges and FDIC insurance | 487 | 473 | 261 | 250 | 291 |
| Communication fees | 432 | 319 | 198 | 196 | 232 |
| Postage and supplies | 329 | 360 | 112 | 124 | 196 |
| Loan and collection expense | 326 | 248 | 434 | 295 | 244 |
| Core deposit intangible amortization | 257 | 257 | 102 | 102 | 102 |
| Advertising and promotion | 220 | 367 | 144 | 108 | 161 |
| Net cost of operation of other real estate owned | (428) | 1,167 | 964 | 809 | 522 |
| Other noninterest expense | 1,176 | 1,403 | 781 | 860 | 714 |
| Total noninterest expenses | 16,031 | 20,253 | 12,203 | 10,835 | 11,003 |
| Income before income taxes | 4,964 | 2,093 | 1,079 | 929 | 2,548 |
| Income tax expense | 1,724 | 771 | 459 | 251 | 825 |
| Net income | 3,240 | 1,322 | 620 | 678 | 1,723 |
| Preferred dividends | 51 | 51 | -- | -- | -- |
| Net income available to common shares | $ 3,189 | $ 1,271 | $ 620 | $ 678 | $ 1,723 |
| Earnings per common share, fully diluted | $ 0.07 | $ 0.03 | $ 0.02 | $ 0.02 | $ 0.05 |
| Weighted average diluted common shares | 44,069,053 | 44,025,874 | 32,138,554 | 32,120,402 | 32,075,398 |
| PARK STERLING CORPORATION | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| ($ in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, |
| 2013 | 2012* | 2012 | 2012 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
| ASSETS | |||||
| Cash and due from banks | $ 19,249 | $ 36,716 | $ 47,115 | $ 15,898 | $ 18,016 |
| Interest-earning balances at banks | 51,861 | 101,431 | 37,256 | 29,795 | 15,567 |
| Investment securities available-for-sale | 299,073 | 245,571 | 186,802 | 222,221 | 232,464 |
| Nonmarketable equity securities | 5,913 | 7,422 | 4,599 | 5,470 | 8,510 |
| Federal funds sold | 51,155 | 45,995 | 22,165 | 29,455 | 20,085 |
| Loans held for sale | 11,659 | 14,147 | 6,095 | 5,331 | 8,055 |
| Loans - Non-covered | 1,237,813 | 1,255,019 | 708,283 | 712,506 | 727,862 |
| Loans - Covered | 91,936 | 101,688 | -- | -- | -- |
| Allowance for loan losses | (10,749) | (10,591) | (9,207) | (9,431) | (9,556) |
| Net loans | 1,319,000 | 1,346,116 | 699,076 | 703,075 | 718,306 |
| Premises and equipment, net | 57,596 | 57,222 | 26,729 | 24,619 | 24,371 |
| FDIC receivable for loss share agreements | 15,340 | 18,697 | -- | -- | -- |
| Other real estate owned - non-covered | 13,597 | 18,427 | 13,028 | 14,744 | 16,674 |
| Other real estate owned - covered | 7,654 | 6,646 | -- | -- | -- |
| Bank-owned life insurance | 46,546 | 46,133 | 26,945 | 26,689 | 26,456 |
| Deferred tax asset | 40,843 | 42,629 | 29,087 | 29,841 | 30,143 |
| Goodwill | 24,717 | 24,717 | 622 | 622 | 649 |
| Core deposit intangible | 9,401 | 9,658 | 3,715 | 3,817 | 3,920 |
| Other assets | 9,967 | 11,267 | 6,954 | 7,542 | 7,535 |
| Total assets | $ 1,983,571 | $ 2,032,794 | $ 1,110,188 | $ 1,119,119 | $ 1,130,751 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Deposits: | |||||
| Demand noninterest-bearing | $ 256,931 | $ 243,495 | $ 165,899 | $ 158,838 | $ 148,929 |
| Money market, NOW and savings | 733,493 | 758,763 | 341,788 | 332,648 | 329,633 |
| Time deposits | 604,397 | 629,746 | 323,988 | 350,548 | 377,875 |
| Total deposits | 1,594,821 | 1,632,004 | 831,675 | 842,034 | 856,437 |
| Short-term borrowings | 10,368 | 10,143 | 1,135 | 1,678 | 852 |
| FHLB advances | 55,000 | 70,000 | 55,000 | 55,000 | 55,000 |
| Subordinated debt | 21,692 | 21,573 | 12,592 | 12,494 | 12,396 |
| Accrued expenses and other liabilities | 22,705 | 23,372 | 13,982 | 13,727 | 13,250 |
| Total liabilities | 1,704,586 | 1,757,092 | 914,384 | 924,933 | 937,935 |
| Shareholders' equity: | |||||
| Preferred stock | 20,500 | 20,500 | -- | -- | -- |
| Common stock | 44,648 | 44,576 | 32,707 | 32,707 | 32,644 |
| Additional paid-in capital | 221,450 | 220,996 | 173,826 | 173,318 | 172,873 |
| Accumulated deficit | (10,379) | (13,568) | (14,839) | (15,459) | (16,137) |
| Accumulated other comprehensive income | 2,766 | 3,198 | 4,110 | 3,620 | 3,436 |
| Total shareholders' equity | 278,985 | 275,702 | 195,804 | 194,186 | 192,816 |
| Total liabilities and shareholders' equity | $ 1,983,571 | $ 2,032,794 | $ 1,110,188 | $ 1,119,119 | $ 1,130,751 |
| Common shares issued and outstanding | 44,648,165 | 44,575,853 | 32,706,627 | 32,706,627 | 32,643,627 |
| * Derived from audited financial statements. Revised to reflect measurement period adjustments to goodwill. | |||||
| PARK STERLING CORPORATION | |||||
| SUMMARY OF LOAN PORTFOLIO | |||||
| ($ in thousands) | |||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |
| 2013 | 2012* | 2012 | 2012 | 2012 | |
| BY LOAN TYPE | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Commercial: | |||||
| Commercial and industrial | $ 118,796 | $ 119,132 | $ 70,155 | $ 67,821 | $ 72,094 |
| Commercial real estate - owner-occupied | 285,353 | 299,417 | 161,360 | 161,467 | 166,064 |
| Commercial real estate - investor income producing | 367,434 | 371,956 | 206,808 | 197,368 | 193,641 |
| Acquisition, construction and development | 140,869 | 140,661 | 81,027 | 86,612 | 87,065 |
| Other commercial | 4,894 | 5,628 | 13,059 | 13,486 | 13,518 |
| Total commercial loans | 917,346 | 936,794 | 532,409 | 526,754 | 532,382 |
| Consumer: | |||||
| Residential mortgage | 180,368 | 188,532 | 58,062 | 66,876 | 75,377 |
| Home equity lines of credit | 156,802 | 163,625 | 82,690 | 83,661 | 86,029 |
| Residential construction | 55,205 | 52,811 | 25,872 | 25,559 | 24,670 |
| Other loans to individuals | 20,237 | 15,554 | 9,839 | 10,119 | 9,635 |
| Total consumer loans | 412,612 | 420,522 | 176,463 | 186,215 | 195,711 |
| Total loans | 1,329,958 | 1,357,316 | 708,872 | 712,969 | 728,093 |
| Deferred costs (fees) | (209) | (609) | (589) | (463) | (231) |
| Total loans, net of deferred costs (fees) | $ 1,329,749 | $ 1,356,707 | $ 708,283 | $ 712,506 | $ 727,862 |
| * Derived from audited financial statements. | |||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |
| 2013 | 2012 | 2012 | 2012 | 2012 | |
| BY ACQUIRED AND NON-ACQUIRED** | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) |
| Acquired loans - performing | $ 556,135 | $ 614,518 | $ 246,267 | $ 262,104 | $ 285,174 |
| Acquired loans - purchase credit impaired | 215,968 | 234,282 | 42,823 | 48,045 | 55,843 |
| Total acquired loans | 772,103 | 848,800 | 289,090 | 310,149 | 341,017 |
| Non-acquired loans, net of deferred costs (fees) | 557,646 | 507,907 | 419,193 | 402,357 | 386,845 |
| Total loans | $ 1,329,749 | $ 1,356,707 | $ 708,283 | $ 712,506 | $ 727,862 |
| ** Includes loans transferred from acquired pools following release of acquisition accounting FMV adjustments. | |||||
| PARK STERLING CORPORATION | |||||
| ALLOWANCE FOR LOAN LOSSES | |||||
| THREE MONTH RESULTS | |||||
| ($ in thousands) | March 31, | December 31, | September 30, | June 30, | March 31, |
| 2013 | 2012 | 2012 | 2012 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Beginning of period allowance | $ 10,591 | $ 9,207 | $ 9,431 | $ 9,556 | $ 10,154 |
| Provision for loan losses | 309 | 994 | 7 | 899 | 123 |
| Loans charged-off | (782) | (330) | (1,102) | (1,262) | (828) |
| Recoveries of loans charged-off | 631 | 720 | 871 | 238 | 107 |
| End of period allowance | 10,749 | 10,591 | 9,207 | 9,431 | 9,556 |
| Net charge-offs (recoveries) | $ 151 | $ (390) | $ 231 | $ 1,024 | $ 721 |
| Net charge-offs (recoveries) to average loans | 0.05% | -0.11% | 0.13% | 0.56% | 0.39% |
| (annualized) |
| PARK STERLING CORPORATION | ||||||
| AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS | ||||||
| THREE MONTHS | ||||||
| ($ in thousands) | March 31, 2013 | March 31, 2012 | ||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | |
| Balance | Expense | Rate | Balance | Expense | Rate (3) | |
| Assets | ||||||
| Interest-earning assets: | ||||||
| Loans with fees (1)(2) | $ 1,346,603 | $ 18,140 | 5.46% | $ 746,433 | $ 12,110 | 6.53% |
| Fed funds sold | 46,081 | 17 | 0.15% | 13,116 | 8 | 0.25% |
| Taxable investment securities | 244,899 | 866 | 1.41% | 214,467 | 1,020 | 1.90% |
| Tax-exempt investment securities | 17,896 | 190 | 4.25% | 17,824 | 185 | 4.15% |
| Other interest-earning assets | 76,887 | 110 | 0.58% | 21,920 | 74 | 1.36% |
| Total interest-earning assets | 1,732,366 | 19,323 | 4.52% | 1,013,760 | 13,397 | 5.32% |
| Allowance for loan losses | (11,716) | (9,833) | ||||
| Cash and due from banks | 30,111 | 17,059 | ||||
| Premises and equipment | 57,388 | 24,509 | ||||
| Goodwill | 23,346 | 461 | ||||
| Intangible assets | 9,487 | 3,954 | ||||
| Other assets | 137,162 | 82,262 | ||||
| Total assets | $ 1,978,144 | $ 1,132,172 | ||||
| Liabilities and shareholders' equity | ||||||
| Interest-bearing liabilities: | ||||||
| Interest-bearing demand | $ 304,179 | $ 90 | 0.12% | $ 78,571 | $ 64 | 0.33% |
| Savings and money market | 435,943 | 317 | 0.29% | 246,726 | 262 | 0.43% |
| Time deposits - core | 506,557 | 330 | 0.26% | 235,657 | 423 | 0.72% |
| Time deposits - brokered | 107,324 | 278 | 1.05% | 145,251 | 398 | 1.10% |
| Total interest-bearing deposits | 1,354,003 | 1,015 | 0.30% | 706,205 | 1,147 | 0.65% |
| Federal Home Loan Bank advances | 55,167 | 137 | 1.01% | 58,297 | 161 | 1.11% |
| Subordinated debt | 21,628 | 429 | 8.04% | 12,363 | 367 | 11.94% |
| Other borrowings | 9,146 | 6 | 0.27% | 2,501 | 3 | 0.48% |
| Total borrowed funds | 85,941 | 572 | 2.70% | 73,161 | 531 | 2.92% |
| Total interest-bearing liabilities | 1,439,944 | 1,587 | 0.45% | 779,366 | 1,678 | 0.87% |
| Net interest rate spread | 17,736 | 4.08% | 11,719 | 4.45% | ||
| Noninterest-bearing demand deposits | 240,263 | 145,724 | ||||
| Other liabilities | 19,203 | 14,446 | ||||
| Shareholders' equity | 278,734 | 192,636 | ||||
| Total liabilities and shareholders' equity | $ 1,978,144 | $ 1,132,172 | ||||
| Net interest margin | 4.15% | 4.65% | ||||
| Net interest margin (fully tax-equivalent) (4) | 4.19% | 4.69% | ||||
| (1) Nonaccrual loans are included in the average loan balances. | ||||||
| (2) Interest income and yields for the three months ended March 31, 2013 and 2012 include accretion from acquisition accounting adjustments associated | ||||||
| with acquired loans. | ||||||
| (3) Yield/ rate calculated on Actual/Actual day count basis, except for yield on investments which is calculated on a 30/360 day count basis. | ||||||
| (4) Fully tax-equivalent basis at 34.40% and 32.39% tax rate at March 31, 2013 and 2012, respectively, for nontaxable securities and loans. | ||||||
| PARK STERLING CORPORATION | |||||
| SELECTED RATIOS | |||||
| ($ in thousands, except per share amounts) | March 31, | December 31, | September 30, | June 30, | March 31, |
| 2013 | 2012 | 2012 | 2012 | 2012 | |
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
| ASSET QUALITY | |||||
| Nonaccrual loans | $ 9,725 | $ 10,374 | $ 9,792 | $ 16,757 | $ 17,703 |
| Troubled debt restructuring | 7,383 | 7,367 | 7,390 | 3,428 | 3,451 |
| Past due 90 days plus (and still accruing) | 2 | 77 | 164 | 131 | 698 |
| Nonperforming loans | 17,110 | 17,818 | 17,346 | 20,316 | 21,852 |
| OREO | 21,251 | 25,073 | 13,028 | 14,744 | 16,674 |
| Nonperforming assets | 38,361 | 42,891 | 30,374 | 35,060 | 38,526 |
| Past due 30-59 days (and still accruing) | 1,250 | 607 | 1,040 | 992 | 742 |
| Past due 60-89 days (and still accruing) | 521 | 121 | 561 | 74 | 764 |
| Nonperforming loans to total loans | 1.29% | 1.31% | 2.45% | 2.85% | 3.00% |
| Nonperforming assets to total assets | 1.93% | 2.11% | 2.74% | 3.13% | 3.41% |
| Allowance to total loans | 0.81% | 0.78% | 1.30% | 1.32% | 1.31% |
| Allowance to nonperforming loans | 62.82% | 59.44% | 53.08% | 46.42% | 43.73% |
| Allowance to nonperforming assets | 28.02% | 24.69% | 30.31% | 26.90% | 24.80% |
| Past due 30-89 days (accruing) to total loans | 0.13% | 0.05% | 0.23% | 0.15% | 0.21% |
| Net charge-offs (recoveries) to average loans | 0.05% | -0.11% | 0.13% | 0.56% | 0.39% |
| (annualized) | |||||
| CAPITAL | |||||
| Book value per common share | $ 5.87 | $ 5.80 | $ 6.09 | $ 6.04 | $ 6.01 |
| Tangible book value per common share** | $ 5.09 | $ 5.02 | $ 5.96 | $ 5.90 | $ 5.87 |
| Common shares outstanding | 44,648,165 | 44,575,853 | 32,706,627 | 32,706,627 | 32,643,627 |
| Average dilutive common shares outstanding | 44,069,053 | 44,025,874 | 32,138,554 | 32,138,402 | 32,075,398 |
| Tier 1 capital | $ 223,307 | $ 219,060 | $ 165,345 | $ 162,167 | $ 161,337 |
| Tier 2 capital | 17,644 | 17,611 | 16,103 | 16,326 | 16,451 |
| Total risk based capital | 240,951 | 236,671 | 181,447 | 178,494 | 177,788 |
| Risk weighted assets | 1,436,350 | 1,452,229 | 774,035 | 769,382 | 786,703 |
| Average assets for leverage ratio | 1,906,061 | 1,947,156 | 1,074,410 | 1,087,079 | 1,092,468 |
| Tier 1 ratio | 15.55% | 15.08% | 21.36% | 21.08% | 20.51% |
| Total risk based capital ratio | 16.78% | 16.30% | 23.44% | 23.20% | 22.60% |
| Tier 1 leverage ratio | 11.72% | 11.25% | 15.39% | 14.92% | 14.77% |
| Tangible common equity to tangible assets** | 11.51% | 11.05% | 17.31% | 17.02% | 16.72% |
| LIQUIDITY | |||||
| Net loans to total deposits | 82.71% | 82.48% | 84.06% | 83.50% | 83.87% |
| Reliance on wholesale funding | 11.35% | 12.27% | 22.24% | 23.02% | 23.98% |
| INCOME STATEMENT (THREE MONTH RESULTS; ANNUALIZED) | |||||
| Return on Average Assets | 0.65% | 0.25% | 0.22% | 0.24% | 0.61% |
| Return on Average Common Equity | 5.01% | 1.96% | 1.26% | 1.40% | 3.60% |
| Net interest margin (non-tax equivalent) | 4.15% | 4.36% | 3.97% | 4.01% | 4.65% |
| INCOME STATEMENT (ANNUAL RESULTS) | |||||
| Return on Average Assets | n/a | 0.32% | n/a | n/a | n/a |
| Return on Average Equity | n/a | 1.99% | n/a | n/a | n/a |
| Net interest margin (non-tax equivalent) | n/a | 4.27% | n/a | n/a | n/a |
| ** Non-GAAP financial measure | |||||
Non-GAAP Financial Measures
Tangible assets, tangible common equity, tangible book value, adjusted net income available to common shareholders, adjusted net interest margin, adjusted noninterest income, adjusted noninterest expenses, adjusted allowance for loan losses, adjusted net charge-offs/ recoveries, and related ratios and per share measures, including adjusted return on average assets and adjusted return on average equity, as used throughout this release, are non-GAAP financial measures. Management uses (i) tangible assets, tangible common equity and tangible book value (which exclude goodwill and other intangibles from equity and assets), and related ratios, to evaluate the adequacy of shareholders' equity and to facilitate comparisons with peers; (ii) adjusted allowance for loan losses (which includes net FMV adjustments related to acquired loans) and adjusted net charge-offs/ recoveries (which exclude the impact of acquisition accounting related to PCI loans) to evaluate both its asset quality and asset quality trends, and to facilitate comparisons with peers; and (iii) adjusted net income, adjusted noninterest income and adjusted noninterest expenses (which exclude merger-related expenses and gain on sale of securities, as applicable), and adjusted net interest margin (which excludes accelerated accretion of net acquisition accounting fair market value adjustments), and adjusted return on average assets and adjusted return on average equity (which excludes merger-related expenses and gain on sale of securities) to evaluate core earnings and to facilitate comparisons with peers.
| PARK STERLING CORPORATION | |||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||
| ($ in thousands, except per share amounts) | |||||
| (three month and period end results unless otherwise stated) | March 31, | December 31, | September 30, | June 30, | March 31, |
| 2013 | 2012 | 2012 | 2012 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Adjusted net income | |||||
| Pretax income (as reported) | $ 4,964 | $ 2,093 | $ 1,079 | $ 929 | $ 2,548 |
| Plus: merger-related expenses | 836 | 3,167 | 1,364 | 434 | 930 |
| Less: gain on sale of securities | -- | -- | (989) | (489) | -- |
| Adjusted pretax income | 5,800 | 5,260 | 1,454 | 874 | 3,478 |
| Tax expense | 1,995 | 1,691 | 467 | 281 | 1,118 |
| Adjusted net income | $ 3,805 | $ 3,569 | $ 987 | $ 593 | $ 2,360 |
| Preferred dividends | 51 | 51 | -- | -- | -- |
| Adjusted net income available to common shareholders | $ 3,754 | $ 3,518 | $ 987 | $ 593 | $ 2,360 |
| Divided by: weighted average diluted shares | 44,069,053 | 44,025,874 | 32,138,554 | 32,120,402 | 32,075,398 |
| Adjusted net income available to common shareholders per share | $ 0.09 | $ 0.08 | $ 0.03 | $ 0.02 | $ 0.07 |
| Estimated tax rate | 34.40% | 32.15% | 32.15% | 32.15% | 32.15% |
| Adjusted net interest margin | |||||
| Net interest income (as reported) | $ 17,736 | $ 19,532 | $ 9,971 | $ 10,100 | $ 11,719 |
| Less: accelerated mark accretion | -- | (921) | 17 | (277) | (1,469) |
| Less: other accelerated accretion | -- | (121) | -- | -- | -- |
| Adjusted net interest income | 17,736 | 18,490 | 9,988 | 9,823 | 10,250 |
| Divided by: average earning assets | 1,732,366 | 1,782,922 | 998,669 | 1,012,570 | 1,013,760 |
| Multiplied by: annualization factor | 4.06 | 3.98 | 3.98 | 4.02 | 4.02 |
| Adjusted net interest margin | 4.15% | 4.13% | 3.98% | 3.90% | 4.07% |
| Net interest margin | 4.15% | 4.36% | 3.97% | 4.01% | 4.65% |
| Adjusted noninterest income | |||||
| Noninterest income (as reported) | $ 3,568 | $ 3,808 | $ 3,318 | $ 2,563 | $ 1,955 |
| Less: gain on sale of securities | -- | -- | (989) | (489) | -- |
| Adjusted noninterest income | $ 3,568 | $ 3,808 | $ 2,329 | $ 2,074 | $ 1,955 |
| Adjusted noninterest expense | |||||
| Noninterest expense (as reported) | $ 16,031 | $ 20,253 | $ 12,203 | $ 10,835 | $ 11,003 |
| Less: merger-related expenses | (836) | (3,167) | (1,364) | (434) | (930) |
| Adjusted noninterest expense | 15,195 | 17,086 | 10,839 | 10,401 | 10,073 |
| Adjusted return on average assets | |||||
| Adjusted net income available to common shareholders | $ 3,754 | $ 3,518 | $ 987 | $ 593 | $ 2,360 |
| Divided by: average assets | 1,978,144 | 2,020,662 | 1,112,923 | 1,127,031 | 1,131,360 |
| Multiplied by: annualization factor | 4.06 | 3.98 | 3.98 | 4.02 | 4.02 |
| Adjusted return on average assets | 0.77% | 0.69% | 0.35% | 0.21% | 0.84% |
| Return on average assets | 0.65% | 0.25% | 0.22% | 0.24% | 0.61% |
| Adjusted return on average equity | |||||
| Adjusted net income available to common shareholders | $ 3,754 | $ 3,518 | $ 987 | $ 593 | $ 2,360 |
| Divided by: average common equity | 258,234 | 257,335 | 196,013 | 194,345 | 192,398 |
| Multiplied by: annualization factor | 4.06 | 3.98 | 3.98 | 4.02 | 4.02 |
| Adjusted return on average equity | 5.90% | 5.44% | 2.00% | 1.23% | 4.93% |
| Return on average equity | 5.01% | 1.96% | 1.26% | 1.40% | 3.60% |
| PARK STERLING CORPORATION | |||||
| RECONCILIATION OF NON-GAAP MEASURES | |||||
| ($ in thousands, except per share amounts) | |||||
| (three month and period end results unless otherwise stated) | March 31, | December 31, | September 30, | June 30, | March 31, |
| 2013 | 2012 | 2012 | 2012 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Tangible common equity to tangible assets | |||||
| Total assets | $ 1,983,571 | $ 2,032,794 | $ 1,110,188 | $ 1,119,119 | $ 1,130,751 |
| Less: intangible assets | (34,118) | (34,375) | (4,337) | (4,439) | (4,569) |
| Tangible assets | $ 1,949,453 | $ 1,998,419 | $ 1,105,851 | $ 1,114,680 | $ 1,126,182 |
| Total common equity | $ 258,485 | $ 255,202 | $ 195,804 | $ 194,186 | $ 192,816 |
| Less: intangible assets | (34,118) | (34,375) | (4,337) | (4,439) | (4,569) |
| Tangible common equity | $ 224,367 | $ 220,827 | $ 191,467 | $ 189,747 | $ 188,247 |
| Tangible common equity | $ 224,367 | $ 220,827 | $ 191,467 | $ 189,747 | $ 188,247 |
| Divided by: tangible assets | $ 1,949,453 | $ 1,998,419 | $ 1,105,851 | $ 1,114,680 | $ 1,126,182 |
| Tangible common equity to tangible assets | 11.51% | 11.05% | 17.31% | 17.02% | 16.72% |
| Tangible book value per share | |||||
| Issued and outstanding shares | 44,648,165 | 44,575,853 | 32,706,627 | 32,706,627 | 32,643,627 |
| Less: nondilutive restricted stock awards | (568,260) | (568,260) | (568,260) | (568,260) | (568,260) |
| Period end dilutive shares | 44,079,905 | 44,007,593 | 32,138,367 | 32,138,367 | 32,075,367 |
| Tangible common equity | $ 224,367 | $ 220,827 | $ 191,467 | $ 189,747 | $ 188,247 |
| Divided by: period end dilutive shares | 44,079,905 | 44,007,593 | 32,138,367 | 32,138,367 | 32,075,367 |
| Tangible common book value per share | $ 5.09 | $ 5.02 | $ 5.96 | $ 5.90 | $ 5.87 |
| Adjusted allowance for loan losses | |||||
| Allowance for loan losses | $ 10,749 | $ 10,591 | $ 9,207 | $ 9,431 | $ 9,556 |
| Plus: acquisition accounting net FMV adjustments to acquired loans | 49,633 | 53,719 | 21,512 | 24,264 | 31,957 |
| Adjusted allowance for loan losses | $ 60,382 | $ 64,310 | $ 30,719 | $ 33,695 | $ 41,513 |
| Divided by: total loans (excluding LHFS) | $ 1,329,749 | $ 1,356,707 | $ 708,283 | $ 712,506 | $ 727,862 |
| Adjusted allowance for loan losses to total loans | 4.54% | 4.74% | 4.34% | 4.73% | 5.70% |
| Adjusted net charge-offs/ recoveries | |||||
| Net charge-offs (recoveries) | $ 151 | $ (390) | $ 231 | $ 1,024 | $ 721 |
| Plus: impact of acquisition accounting related PCI loans | (415) | -- | -- | -- | -- |
| Adjusted net charge-offs (recoveries) | (264) | (390) | 231 | 1,024 | 721 |
| Divided by: average loans | 1,335,224 | 1,388,627 | 719,397 | 729,163 | 746,433 |
| Multiplied by: annualization factor | 4.06 | 3.98 | 3.98 | 4.02 | 4.02 |
| Adjusted net charge-offs (recoveries) (annualized) | -0.08% | -0.11% | 0.13% | 0.56% | 0.39% |
| Net charge-offs (recoveries) (annualized) | 0.05% | -0.11% | 0.13% | 0.56% | 0.39% |