ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2018

ServisFirst Bancshares, Inc. Announces Results for Second Quarter of 2018

BIRMINGHAM, Ala., July 19, 2018 (GLOBE NEWSWIRE) -- ServisFirst Bancshares, Inc. (NASDAQ:SFBS), today announced earnings and operating results for the quarter and six months ended June 30, 2018.

SECOND QUARTER 2018 HIGHLIGHTS:

  • Net income of $33.5 million for the second quarter of 2018 compared to $24.2 million in the second quarter of 2017, a 39% increase
  • Diluted EPS of $0.62 for the second quarter of 2018 compared to $0.45 for the second quarter of 2017, a 38% increase
  • Loans increased 14% for the quarter on an annualized basis

Tom Broughton, President and CEO, said, “We saw good activity in loan demand in the second quarter and our pipeline remains strong.”  Bud Foshee, CFO, stated, “Our pretax income is up over 26% for YTD 2018 over 2017, reflective of our continued growth and improved profitability.”

 
FINANCIAL SUMMARY (UNAUDITED)
(in Thousands except share and per share amounts)
                   
    Period Ending
June 30, 2018		 Period Ending
March 31, 2018		 % Change
From Period
Ending March
31, 2018 to
Period Ending
June 30, 2018		 Period Ending
June 30, 2017		 % Change
From Period
Ending June
30, 2017 to
Period Ending
June 30, 2018
QUARTERLY OPERATING RESULTS                
Net Income $33,540  $32,603  3% $24,164  39%
Net Income Available to Common Stockholders $33,509  $32,603  3% $24,133  39%
Diluted Earnings Per Share $0.62  $0.60  3% $0.45  38%
Return on Average Assets  1.91%  1.91%    1.55%  
Return on Average Common Stockholders' Equity  20.89%  21.40%    17.36%  
Average Diluted Shares Outstanding  54,196,023   54,183,400     54,100,604   
                   
YEAR-TO-DATE OPERATING RESULTS                
Net Income $66,143        $46,683  42%
Net Income Available to Common Stockholders $66,112        $46,652  42%
Diluted Earnings Per Share $1.22        $0.86  42%
Return on Average Assets  1.91%        1.50%  
Return on Average Common Stockholders' Equity  21.13%        17.23%  
Average Diluted Shares Outstanding  54,189,746         54,117,072   
                   
BALANCE SHEET                
Total Assets $7,084,562  $7,011,735  1% $6,329,599  12%
Loans  6,129,649   5,928,327  3%  5,343,688  15%
Non-interest-bearing Demand Deposits  1,481,447   1,407,592  5%  1,373,353  8%
Total Deposits  6,085,682   5,977,387  2%  5,394,810  13%
Stockholders' Equity  655,114   629,297  4%  567,086  16%
                 

DETAILED FINANCIALS

ServisFirst Bancshares, Inc. reported net income and net income available to common stockholders of $33.5 million for the quarter ended June 30, 2018, compared to net income of $24.2 million and net income available to common stockholders of $24.1 million for the same quarter in 2017.  Basic and diluted earnings per common share were $0.63 and $0.62, respectively, for the second quarter of 2018, compared to $0.46 and $0.45, respectively, for the second quarter of 2017.

Return on average assets was 1.91% and return on average common stockholders’ equity was 20.89% for the second quarter of 2018, compared to 1.55% and 17.36%, respectively, for the second quarter of 2017.

Net interest income was $64.5 million for the second quarter of 2018, compared to $62.4 million for the first quarter of 2018 and $55.6 million for the second quarter of 2017.  The net interest margin in the second quarter of 2018 was 3.82%, a one basis point increase from the first quarter of 2018 and five basis point increase from the second quarter of 2017.  The increase in net interest income on a linked quarter basis is attributable to a $104.8 million increase in average loans outstanding, an $80.0 million increase in average non-interest-bearing deposits and a $25.4 million increase in average stockholders’ equity, all resulting in a positive mix change in our balance sheet.  The average yield on loans increased 13 basis points to 4.93% on a linked quarter basis, while the average rate paid on deposits increased by 17 basis points to 1.03% on a linked quarter basis.

Average loans for the second quarter of 2018 were $5.99 billion, an increase of $104.8 million, or 2%, over average loans of $5.88 billion for the first quarter of 2018, and an increase of $754.7 million, or 14%, over average loans of $5.23 billion for the second quarter of 2017.

Average total deposits for the second quarter of 2018 were $6.04 billion, an increase of $91.8 million, or 2%, over average total deposits of $5.95 billion for the first quarter of 2018, and an increase of $766.0 million, or 15%, over average total deposits of $5.27 billion for the second quarter of 2017.

Non-performing assets to total assets were 0.28% for the second quarter of 2018, an increase of six basis points compared to 0.22% for the first quarter of 2018 and an increase of five basis points compared to 0.23% for the second quarter of 2017.  Net credit charge-offs to average loans were 0.13%, a three basis point increase compared to 0.10% for the first quarter of 2018 and a 12 basis point decrease compared to 0.25% for the second quarter of 2017.  We recorded a $4.1 million provision for loan losses in the second quarter of 2018 compared to $4.1 million in the first quarter of 2018 and $4.4 million in the second quarter of 2017.  The allowance for loan loss as a percentage of total loans was 1.05% at June 30, 2018 compared to 1.05% at March 31, 2018 and 1.03% at June 30, 2017.  In management’s opinion, the allowance is adequate and was determined by consistent application of ServisFirst Bank’s methodology for calculating its allowance for loan losses.

Non-interest income increased $654,000 during the second quarter of 2018, or 14%, compared to the second quarter of 2017.  Deposit service charges increased $271,000 in the second quarter of 2018, or 20%, compared to the second quarter of 2017.  The number of transaction deposit accounts increased approximately 9% from June 30, 2017 to June 30, 2018, and the amount of overdraft fees increased $120,000, or 34%, from the second quarter of 2017 to the second quarter of 2018.  Credit card revenue increased $567,000, or 48%, to $1.8 million during the second quarter of 2018, compared to $1.2 million during the second quarter of 2017, driven by increased numbers of accounts and increased purchases per account.  Mortgage banking revenue decreased by $275,000 in the second quarter of 2018, or 26%, compared to the second quarter of 2017.  The number of loans originated during the second quarter of 2018 decreased approximately 10% from the same quarter in 2017.  Also, a larger percentage of loans originated during the second quarter of 2018 were placed into the Bank’s portfolio instead of being sold into the secondary market.

Non-interest expense for the second quarter of 2018 increased $2.1 million, or 10%, to $24.0 million from $21.9 million in the second quarter of 2017, and increased $498,000, or 2%, on a linked quarter basis.  Salary and benefit expense for the second quarter of 2018 increased $1.1 million, or 9%, to $13.1 million from $12.0 million in the second quarter of 2017, and decreased $198,000, or 2%, on a linked quarter basis.  The number of FTE employees increased from 428 at June 30, 2017 to 447 at June 30, 2018.  Equipment and occupancy expense decreased $152,000, or 7%, to $2.1 million in the second quarter of 2018, from $2.3 million in the second quarter of 2017.  Ownership costs of our new headquarters building in Birmingham for the second quarter of 2018 were approximately $85,000 less than rental payments and amortization of leasehold improvements during the second quarter of 2017.  Other operating expense for the second quarter of 2018 increased $922,000, or 16%, to $6.6 million from $5.6 million in the second quarter of 2017.

Income tax expense decreased $1.7 million, or 17%, to $8.3 million in the second quarter of 2018, compared to $10.0 million in the second quarter of 2017.  Lower corporate income tax rates resulting from the passage of the Tax Cuts and Jobs Act in December 2017 has resulted in lower effective tax rates.  We also recognized a reduction in provision for income taxes resulting from excess tax benefits from the exercise and vesting of stock options and restricted stock during the second quarter of 2018 and 2017 of $457,000 and $1.4 million, respectively.  Our effective tax rate for the second quarter of 2018 and 2017 was 19.9% and 29.2%, respectively.

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, total tangible assets, tangible book value per share and tangible common equity to total tangible assets, each of which excludes goodwill and core deposit intangibles associated with our acquisition of Metro Bancshares, Inc. in January 2015.  We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that these non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies, including those in our industry, use.  The following reconciliation table provides a more detailed analysis of the non-GAAP financial measures as of and for the comparative periods presented in this press release.  Dollars are in thousands, except share and per share data.

            
   At June 30, 2018 At March 31, 2018 At December 31, 2017 At September 30, 2017 At June 30, 2017
Book value per share - GAAP $12.33  $11.84  $11.47  $11.14  $10.72 
Total common stockholders' equity - GAAP  655,114   629,297   607,604   590,213   567,086 
 Adjustments:                    
 Adjusted for goodwill and core deposit intangible asset  14,584   14,652   14,719   14,787   14,855 
Tangible common stockholders' equity - non-GAAP $640,530  $614,645  $592,885  $575,426  $552,231 
Tangible book value per share - non-GAAP $12.05  $11.56  $11.19  $10.86  $10.44 
                      
Stockholders' equity to total assets - GAAP  9.25%  8.98%  8.58%  8.79%  8.96%
Total assets - GAAP $7,084,562  $7,011,735  $7,082,384  $6,712,103  $6,329,599 
 Adjustments:                    
 Adjusted for goodwill and core deposit intangible asset  14,584   14,652   14,719   14,787   14,855 
Total tangible assets - non-GAAP $7,069,978  $6,997,083  $7,067,665  $6,697,316  $6,314,744 
Tangible common equity to total tangible assets - non-GAAP  9.06%  8.78%  8.39%  8.59%  8.75%
                     

About ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a bank holding company based in Birmingham, Alabama. Through its subsidiary ServisFirst Bank, ServisFirst Bancshares, Inc. provides business and personal financial services from locations in Birmingham, Huntsville, Montgomery, Mobile and Dothan, Alabama, Pensacola and Tampa Bay, Florida, Atlanta, Georgia, Charleston, South Carolina and Nashville, Tennessee.

ServisFirst Bancshares, Inc. files periodic reports with the U.S. Securities and Exchange Commission (SEC).  Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.servisfirstbancshares.com.

Statements in this press release that are not historical facts, including, but not limited to, statements concerning future operations, results or performance, are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933.  The words "believe," "expect," "anticipate," "project," “plan,” “intend,” “will,” “would,” “might” and similar expressions often signify forward-looking statements. Such statements involve inherent risks and uncertainties. ServisFirst Bancshares, Inc. cautions that such forward-looking statements, wherever they occur in this press release or in other statements attributable to ServisFirst Bancshares, Inc., are necessarily estimates reflecting the judgment of ServisFirst Bancshares, Inc.’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.  Such forward-looking statements should, therefore, be considered in light of various factors that could affect the accuracy of such forward-looking statements, including: general economic conditions, especially in the credit markets and in the Southeast; the performance of the capital markets; changes in interest rates, yield curves and interest rate spread relationships; changes in accounting and tax principles, policies or guidelines; changes in legislation or regulatory requirements; changes in our loan portfolio and the deposit base; possible changes in laws and regulations and governmental monetary and fiscal policies, including, but not limited to, economic stimulus initiatives; the cost and other effects of legal and administrative cases and similar contingencies; possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans and the value of collateral; the effect of natural disasters, such as hurricanes and tornadoes, in our geographic markets; and increased competition from both banks and non-bank financial institutions.  The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K and our other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made.  ServisFirst Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

More information about ServisFirst Bancshares, Inc. may be obtained over the Internet at www.servisfirstbancshares.com  or by calling (205) 949-0302.

CONTACT: ServisFirst Bank
Davis Mange (205) 949-3420
[email protected]

                     
SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED)                    
(In thousands except share and per share data)                    
  2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017
CONSOLIDATED STATEMENT OF INCOME                    
Interest income $78,396  $74,009  $72,060  $67,641  $63,538 
Interest expense  13,874   11,573   10,652   9,245   7,971 
Net interest income  64,522   62,436   61,408   58,396   55,567 
Provision for loan losses  4,121   4,139   9,055   4,803   4,381 
Net interest income after provision for loan losses  60,401   58,297   52,353   53,593   51,186 
Non-interest income  5,459   4,869   4,905   4,790   4,805 
Non-interest expense  24,010   23,512   21,255   21,497   21,875 
Income before income tax  41,850   39,654   36,003   36,886   34,116 
Provision for income tax  8,310   7,051   14,853   11,627   9,952 
Net income  33,540   32,603   21,150   25,259   24,164 
Preferred stock dividends  31   -   31   -   31 
Net income available to common stockholders $33,509  $32,603  $21,119  $25,259  $24,133 
Earnings per share - basic $0.63  $0.61  $0.40  $0.48  $0.46 
Earnings per share - diluted $0.62  $0.60  $0.39  $0.47  $0.45 
Average diluted shares outstanding  54,196,023   54,183,400   54,161,788   54,099,672   54,100,604 
                     
CONSOLIDATED BALANCE SHEET DATA                    
Total assets $7,084,562  $7,011,735  $7,082,384  $6,712,103  $6,329,599 
Loans  6,129,649   5,928,327   5,851,261   5,628,765   5,343,688 
Debt securities  583,799   560,885   538,330   522,724   518,065 
Non-interest-bearing demand deposits  1,481,447   1,407,592   1,440,326   1,405,965   1,373,353 
Total deposits  6,085,682   5,977,387   6,091,674   5,796,901   5,394,810 
Borrowings  64,648   64,739   64,832   54,975   55,075 
Stockholders' equity $655,114  $629,297  $607,604  $590,213  $567,086 
                     
Shares outstanding  53,150,733   53,147,169   52,992,586   52,970,310   52,909,362 
Book value per share $12.33  $11.84  $11.47  $11.14  $10.72 
Tangible book value per share (1) $12.05  $11.56  $11.19  $10.86  $10.44 
                     
SELECTED FINANCIAL RATIOS                    
Net interest margin  3.82%  3.81%  3.66%  3.77%  3.77%
Return on average assets  1.91%  1.91%  1.20%  1.55%  1.55%
Return on average common stockholders' equity  20.89%  21.40%  13.97%  17.28%  17.36%
Efficiency ratio  34.31%  34.93%  32.05%  34.02%  36.23%
Non-interest expense to average earning assets  1.42%  1.43%  1.26%  1.38%  1.47%
                     
CAPITAL RATIOS (2)                    
Common equity tier 1 capital to risk-weighted assets  10.08%  9.88%  9.51%  9.60%  9.72%
Tier 1 capital to risk-weighted assets  10.08%  9.88%  9.52%  9.61%  9.73%
Total capital to risk-weighted assets  12.10%  11.91%  11.52%  11.51%  11.67%
Tier 1 capital to average assets  9.21%  8.95%  8.51%  8.91%  8.88%
Tangible common equity to total tangible assets (1)  9.06%  8.78%  8.39%  8.59%  8.75%
                     
(1) See "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" for a discussion of these Non-GAAP financial measures.
(2) Regulatory capital ratios for most recent period are preliminary.
 


          
CONSOLIDATED BALANCE SHEETS (UNAUDITED)         
(Dollars in thousands)         
    June 30, 2018 June 30, 2017 % Change
ASSETS         
Cash and due from banks $68,344  $71,181  (4)%
Interest-bearing balances due from depository institutions  81,742   134,694  (39)%
Federal funds sold  15,585   49,443  (68)%
 Cash and cash equivalents  165,671   255,318  (35)%
Available for sale debt securities, at fair value  583,549   438,808  33 %
Held to maturity debt securities (fair value of $250 and $80,532 at         
 June 30, 2018 and 2017, respectively)  250   79,257  (100)%
Restricted equity securities  993   1,037  (4)%
Mortgage loans held for sale  4,605   5,673  (19)%
Loans  6,129,649   5,343,688  15 %
Less allowance for loan losses  (64,239)  (55,059) 17 %
 Loans, net  6,065,410   5,288,629  15 %
Premises and equipment, net  58,299   51,797  13 %
Goodwill and other identifiable intangible assets  14,584   14,855  (2)%
Other assets  191,200   194,225  (2)%
 Total assets $7,084,562  $6,329,599  12 %
LIABILITIES AND STOCKHOLDERS' EQUITY         
Liabilities:         
Deposits:         
 Non-interest-bearing $1,481,447  $1,373,353  8 %
 Interest-bearing  4,604,235   4,021,457  14 %
  Total deposits  6,085,682   5,394,810  13 %
Federal funds purchased  262,659   300,226  (13)%
Other borrowings  64,648   55,075  17 %
Other liabilities  16,459   12,402  33 %
 Total liabilities  6,429,448   5,762,513  12 %
Stockholders' equity:         
 Preferred stock, par value $0.001 per share; 1,000,000 authorized and undesignated at         
  June 30, 2018 and June 30, 2017  -   -  - %
 Common stock, par value $0.001 per share; 100,000,000 shares authorized; 53,150,733 shares         
  issued and outstanding at June 30, 2018, and 52,909,362 shares issued and outstanding         
  at June 30, 2017  53   53  - %
 Additional paid-in capital  217,765   217,271  - %
 Retained earnings  443,972   348,517  27 %
 Accumulated other comprehensive income  (7,178)  743  N/M  
 Noncontrolling interest  502   502  - %
  Total stockholders' equity  655,114   567,086  16 %
 Total liabilities and stockholders' equity $7,084,562  $6,329,599  12 %
              


          
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)         
(In thousands except per share data)            
   Three Months Ended June 30, Six Months Ended June 30,
   2018 2017 2018 2017
Interest income:            
 Interest and fees on loans $73,620 $59,912 $143,294 $115,468
 Taxable securities  3,127  2,274  5,872  4,361
 Nontaxable securities  623  752  1,279  1,517
 Federal funds sold  694  287  1,245  806
 Other interest and dividends  332  313  715  903
 Total interest income  78,396  63,538  152,405  123,055
Interest expense:            
 Deposits  11,714  6,321  21,335  12,303
 Borrowed funds  2,160  1,650  4,112  3,133
 Total interest expense  13,874  7,971  25,447  15,436
 Net interest income  64,522  55,567  126,958  107,619
Provision for loan losses  4,121  4,381  8,260  9,367
 Net interest income after provision for loan losses  60,401  51,186  118,698  98,252
Non-interest income:            
 Service charges on deposit accounts  1,653  1,382  3,238  2,736
 Mortgage banking  789  1,064  1,307  1,963
 Credit card income  1,756  1,189  3,334  2,368
 Securities gains  -  -  4  -
 Increase in cash surrender value life insurance  786  785  1,563  1,509
 Other operating income  475  385  882  775
 Total non-interest income  5,459  4,805  10,328  9,351
Non-interest expense:            
 Salaries and employee benefits  13,098  12,031  26,394  23,744
 Equipment and occupancy expense  2,113  2,265  4,067  4,505
 Professional services  924  808  1,729  1,579
 FDIC and other regulatory assessments  1,159  1,081  2,292  2,078
 Other real estate owned expense  160  56  476  132
 Other operating expense  6,556  5,634  12,564  11,104
 Total non-interest expense  24,010  21,875  47,522  43,142
 Income before income tax  41,850  34,116  81,504  64,461
Provision for income tax  8,310  9,952  15,361  17,778
 Net income  33,540  24,164  66,143  46,683
 Dividends on preferred stock  31  31  31  31
 Net income available to common stockholders $33,509 $24,133 $66,112 $46,652
Basic earnings per common share $0.63 $0.46 $1.24 $0.88
Diluted earnings per common share $0.62 $0.45 $1.22 $0.86
             


                
LOANS BY TYPE (UNAUDITED)               
(In thousands)               
                 
   2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017
Commercial, financial and agricultural $2,345,879 $2,329,904 $2,279,366 $2,223,910 $2,123,498
Real estate - construction  522,788  506,050  580,874  467,838  395,398
Real estate - mortgage:               
 Owner-occupied commercial  1,383,882  1,349,679  1,328,666  1,323,383  1,272,659
 1-4 family mortgage  584,133  581,498  603,063  593,180  565,121
 Other mortgage  1,225,906  1,099,482  997,079  962,690  931,788
Subtotal: Real estate - mortgage  3,193,921  3,030,659  2,928,808  2,879,253  2,769,568
Consumer  67,061  61,714  62,213  57,764  55,224
Total loans $6,129,649 $5,928,327 $5,851,261 $5,628,765 $5,343,688
                


                  
SUMMARY OF LOAN LOSS EXPERIENCE (UNAUDITED)                 
(Dollars in thousands)                 
     2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017
Allowance for loan losses:                    
Beginning balance $62,050   $59,406   $58,459   $55,059   $53,892  
Loans charged off:                    
 Commercial, financial and agricultural  1,732    1,088    7,064    924    3,067  
 Real estate - construction  -    -    -    16    40  
 Real estate - mortgage  440    381    1,134    550    106  
 Consumer  47    88    137    65    33  
  Total charge offs  2,219    1,557    8,335    1,555    3,246  
Recoveries:                    
 Commercial, financial and agricultural  173    4    64    67    16  
 Real estate - construction  97    7    126    12    14  
 Real estate - mortgage  2    42    26    59    2  
 Consumer  15    9    11    14    -  
  Total recoveries  287    62    227    152    32  
 Net charge-offs  1,932    1,495    8,108    1,403    3,214  
 Provision for loan losses  4,121    4,139    9,055    4,803    4,381  
 Ending balance $64,239   $62,050   $59,406   $58,459   $55,059  
                        
 Allowance for loan losses to total loans  1.05 %  1.05 %  1.02 %  1.04 %  1.03 %
 Allowance for loan losses to total average                    
  loans  1.07 %  1.05 %  1.04 %  1.07 %  1.05 %
 Net charge-offs to total average loans  0.13 %  0.10 %  0.56 %  0.10 %  0.25 %
 Provision for loan losses to total average                    
  loans  0.28 %  0.29 %  0.63 %  0.35 %  0.34 %
 Nonperforming assets:                    
  Nonaccrual loans $8,022   $9,271   $10,765   $12,356   $9,963  
  Loans 90+ days past due and accruing  6,081    678    60    2,506    1,016  
  Other real estate owned and                    
  repossessed assets  5,937    5,748    6,701    3,888    3,891  
 Total $20,040   $15,697   $17,526   $18,750   $14,870  
                        
 Nonperforming loans to total loans  0.23 %  0.17 %  0.19 %  0.26 %  0.21 %
 Nonperforming assets to total assets  0.28 %  0.22 %  0.25 %  0.28 %  0.23 %
 Nonperforming assets to earning assets  0.29 %  0.23 %  0.25 %  0.29 %  0.24 %
 Reserve for loan losses to nonaccrual loans  800.79 %  669.29 %  551.84 %  473.12 %  552.63 %
                        
 Restructured accruing loans $15,572   $15,838   $16,919   $12,700   $12,716  
                        
 Restructured accruing loans to total loans  0.25 %  0.27 %  0.29 %  0.23 %  0.24 %
                        
 TROUBLED DEBT RESTRUCTURINGS (TDRs) (UNAUDITED)             
 (In thousands)                
     2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017
 Beginning balance: $18,792   $20,572   $16,354   $16,370   $7,269  
  Additions  -    -    4,233    -    12,716  
  Removal from TDR  -    -    -    -    (535) 
  Net (paydowns) / advances  (267)   (1,080)   (15)   (16)   (1,380) 
  Charge-offs  (1,268)   (700)   -    -    (1,700) 
     $17,257   $18,792   $20,572   $16,354   $16,370  
                             


          
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)         
(In thousands except per share data)         
    2nd Quarter
2018		 1st Quarter
2018		 4th Quarter
2017		 3rd Quarter
2017		 2nd Quarter
2017
Interest income:               
 Interest and fees on loans $73,620 $69,674 $67,357 $63,857 $59,912
 Taxable securities  3,127  2,745  2,468  2,288  2,274
 Nontaxable securities  623  656  702  729  752
 Federal funds sold  694  551  508  379  287
 Other interest and dividends  332  383  1,025  388  313
 Total interest income  78,396  74,009  72,060  67,641  63,538
 Deposits  11,714  9,621  8,954  7,574  6,321
 Borrowed funds  2,160  1,952  1,698  1,671  1,650
 Total interest expense  13,874  11,573  10,652  9,245  7,971
 Net interest income  64,522  62,436  61,408  58,396  55,567
Provision for loan losses  4,121  4,139  9,055  4,803  4,381
 Net interest income after provision for loan losses  60,401  58,297  52,353  53,593  51,186
 Service charges on deposit accounts  1,653  1,585  1,499  1,467  1,382
 Mortgage banking  789  518  894  978  1,064
 Credit card income  1,756  1,578  1,298  1,149  1,189
 Securities gains  -  4  -  -  -
 Increase in cash surrender value life insurance  786  777  797  825  785
 Other operating income  475  407  417  371  385
 Total non-interest income  5,459  4,869  4,905  4,790  4,805
 Salaries and employee benefits  13,098  13,296  11,432  12,428  12,031
 Equipment and occupancy expense  2,113  1,954  1,566  1,947  2,265
 Professional services  924  805  833  805  808
 FDIC and other regulatory assessments  1,159  1,133  1,030  810  1,081
 Other real estate owned expense  160  316  160  31  56
 Other operating expense  6,556  6,008  6,234  5,476  5,634
 Total non-interest expense  24,010  23,512  21,255  21,497  21,875
 Income before income tax  41,850  39,654  36,003  36,886  34,116
Provision for income tax  8,310  7,051  14,853  11,627  9,952
 Net income  33,540  32,603  21,150  25,259  24,164
 Dividends on preferred stock  31  -  31  -  31
 Net income available to common stockholders $33,509 $32,603 $21,119 $25,259 $24,133
Basic earnings per common share $0.63 $0.61 $0.40 $0.48 $0.46
Diluted earnings per common share $0.62 $0.60 $0.39 $0.47 $0.45
                


 
AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS (UNAUDITED)
ON A FULLY TAXABLE-EQUIVALENT BASIS
(Dollars in thousands)
 
                                   
      2nd Quarter 2018 1st Quarter 2018 4th Quarter 2017 3rd Quarter 2017 2nd Quarter 2017
      Average Balance Yield /
Rate		 Average Balance Yield /
Rate		 Average Balance Yield /
Rate		 Average Balance Yield /
Rate		 Average Balance Yield /
Rate
Assets:                              
Interest-earning assets:                              
 Loans, net of unearned income (1)                              
  Taxable $5,958,377  4.94% $5,847,443  4.81% $5,680,227 4.68% $5,407,109 4.66% $5,192,812 4.60%
  Tax-exempt (2)  30,246  3.94   36,357  4.06   36,992 4.95   33,357 5.17   41,143 4.92 
   Total loans, net of                              
    unearned income  5,988,623  4.93   5,883,800  4.80   5,717,219 4.68   5,440,466 4.66   5,233,955 4.60 
 Mortgage loans held for sale  3,770  4.26   3,698  4.50   6,199 3.52   4,862 3.51   5,958 3.90 
 Debt securities:                              
  Taxable  475,777  2.63   435,747  2.52   406,488 2.43   385,431 2.37   389,505 2.34 
  Tax-exempt (2)  112,145  2.60   120,270  2.56   128,201 3.27   131,478 3.34   133,590 3.38 
   Total securities (3)  587,922  2.62   556,017  2.53   534,689 2.63   516,909 2.62   523,095 2.60 
 Federal funds sold  141,915  1.96   131,472  1.70   143,905 1.40   111,175 1.35   98,598 1.17 
 Restricted equity securities  1,022  1.57   1,030  1.57   1,030 1.93   1,030 3.47   1,030 10.51 
 Interest-bearing balances with banks  73,714  1.80   96,012  1.60   310,289 1.31   118,510 1.27   109,909 1.04 
 Total interest-earning assets $6,796,966  4.64% $6,672,029  4.51% $6,713,331 4.29% $6,192,952 4.37% $5,972,545 4.30%
Non-interest-earning assets:                              
 Cash and due from banks  68,190      68,309      68,444     65,457     68,894   
 Net premises and equipment  59,262      59,709      57,320     54,727     49,813   
 Allowance for loan losses, accrued                              
  interest and other assets  129,585      140,558      149,636     151,786     143,286   
   Total assets $7,054,003     $6,940,605     $6,988,731    $6,464,922    $6,234,538   
                                   
Interest-bearing liabilities:                              
 Interest-bearing deposits:                              
 Checking $827,540  0.56% $899,311  0.52% $899,334 0.46% $800,437 0.42% $779,916 0.39%
 Savings  54,842  0.34   53,269  0.31   49,697 0.31   48,313 0.30   48,150 0.30 
 Money market  3,089,595  1.10   3,027,176  0.90   3,065,298 0.80   2,774,061 0.74   2,567,817 0.64 
 Time deposits  596,450  1.36   576,857  1.21   576,010 1.16   546,020 1.10   537,220 1.06 
  Total interest-bearing deposits  4,568,427  1.03   4,556,613  0.86   4,590,339 0.77   4,168,831 0.72   3,933,103 0.64 
 Federal funds purchased  295,309  1.87   297,051  1.60   271,248 1.37   282,806 1.34   336,344 1.11 
 Other borrowings  64,699  4.84   64,805  4.89   60,829 4.98   55,034 5.17   55,130 5.22 
 Total interest-bearing liabilities $4,928,435  1.13% $4,918,469  0.95% $4,922,416 0.86% $4,506,671 0.81% $4,324,577 0.74%
Non-interest-bearing liabilities:                              
 Non-interest-bearing                              
  demand  1,469,194      1,389,217      1,444,338     1,363,207     1,338,514   
 Other liabilities  13,079      15,007      22,029     15,070     13,739   
 Stockholders' equity  650,641      621,004      599,754     578,626     556,521   
 Unrealized gains on securities and                              
  derivatives  (7,346)     (3,092)     194     1,348     1,187   
   Total liabilities and                              
    stockholders' equity $7,054,003     $6,940,605     $6,988,731    $6,464,922    $6,234,538   
Net interest spread    3.51%    3.56%    3.43%    3.56%    3.56%
Net interest margin    3.82%    3.81%    3.66%    3.77%    3.77%
                                   
(1)Average loans include loans on which the accrual of interest has been discontinued.
(2)Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 21% for the quarters in 2018 and 35% for the quarters in 2017.
(3)Unrealized (losses) gains on available-for-sale debt securities are excluded from the yield calculation.