FWP

Offering Disclosures

This presentation has been prepared by First Guaranty Bancshares, Inc. (the “Company”) solely for informational purposes based on its own information, as well as

information from public sources. This presentation has been prepared to assist interested parties in making their own evaluation of the Company and does not

purport to contain all of the information that may be relevant. In all cases, interested parties should conduct their own investigation and analysis of the Company.

This

presentation

not

offer

sell

securities,

nor

solicitation

offer

buy

securities

any

locality,

state,

country

other

jurisdiction

where

such

distribution,

publication,

availability

use

would

contrary

law

regulation

which

would

require

any

registration

licensing

within

such

jurisdiction.

Neither the Securities and Exchange Commission (the “SEC”) nor any other regulatory body has approved or disapproved of the securities of the Company or

passed upon the accuracy or adequacy of this presentation. Any representation to the contrary is a criminal offense.

Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any

implication there has been no change in the affairs of the Company after the date hereof.

This presentation includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys. Industry publications

and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the industry and

market data to be reliable as of the date of this presentation, this information could prove to be inaccurate. Industry and market data could be wrong because of

the

method

which

sources

obtained

their

data

and

because

information

cannot

always

verified

with

complete

certainty

due

the

limits

the

availability

and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. In addition, we do not know all of the

assumptions

regarding

general

economic

conditions

growth

that

were

used

preparing

the

forecasts

from

the

sources

relied

upon

cited

herein.

This presentation contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United

States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of our performance. Management believes that these non-GAAP

financial measures allows for better comparability with prior periods, as well as with peers in the industry who provide a similar presentation, and provide a

greater understanding of our ongoing operations.

These

disclosures

should

not

viewed

substitute

for

operating

results

determined

accordance

with

GAAP,

nor

are

they

necessarily

comparable

non-

GAAP performance measures that may be presented by other companies.

reconciliation

the

non-GAAP

measures

used

this

presentation

the

most

directly

comparable

GAAP

measures

provided

the

Appendix

this

presentation.

The Company has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you

should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the

Company and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Company, any

underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Sandler O’Neill + Partners, L.P. toll-free 1-

866-805-4128 or by emailing syndicate@sandleroneill.com.

Forward Looking Statements

These slides and the accompanying oral presentation contain forward-looking statements, which can be identified by the use of words

such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,”

“would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are

not limited to:

–

statements of our goals, intentions and expectations;

–

statements regarding our business plans, prospects, growth and operating strategies;

–

statements regarding the asset quality of our loan and investment portfolios; and

–

estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business,

economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking

statements

are

subject

assumptions

with

respect

future

business

strategies

and

decisions

that

are

subject

change.

are

under

no duty to and do not take any obligation to update any forward-looking statements after the date of this presentation.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations

expressed in the forward-looking statements:

–

our ability to manage our operations under the current economic conditions nationally and in our market area;

–

adverse changes in the financial industry, securities, credit and national local real estate markets (including real estate values);

–

risks related to a high concentration of loans secured by real estate located in our market area;

–

the impact of any potential strategic transactions;

–

our ability to enter new markets successfully and capitalize on growth opportunities;

–

significant increases in our loan losses, including as a result of our inability to resolve classified and non-performing assets or reduce risks

associated with our loans, and management’s assumptions in determining the adequacy of the allowance for loan losses;

–

credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for

loan losses and provision for loan losses;

–

competition among depository and other financial institutions;

–

our success in increasing our commercial real estate and commercial and industrial lending;

Forward Looking Statements (cont’d)

–

our ability to attract and maintain deposits and our success in introducing new financial products;

–

our ability to improve our asset quality even as we increase our commercial real estate and commercial and industrial lending;

–

changes in interest rates generally, including changes in the relative differences between short-term and long-term interest rates and in

deposit interest rates, that may affect our net interest margin and funding sources;

–

fluctuations in the demand for loans;

–

technological changes that may be more difficult or expensive than expected;

–

changes in consumer spending, borrowing and savings habits;

–

declines in the yield on our assets resulting from the current low interest rate environment;

–

changes in laws or government regulations or policies affecting financial institutions, including the Dodd-Frank Act and the JOBS Act,

which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements, regulatory fees

and compliance costs, particularly the new capital regulations, and the resources we have available to address such changes;

–

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards

Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

–

changes in our compensation and benefit plans, and our ability to retain key members of our senior management team and to address

staffing needs in response to product demand or to implement our strategic plans;

–

loan delinquencies and changes in the underlying cash flows of our borrowers;

–

the impairment of our investment securities;

–

our ability to control costs and expenses, particularly those associated with operating as a publicly traded company;

–

the failure or security breaches of computer systems on which we depend;

–

the ability of key third-party service providers to perform their obligations to us; and

–

other economic, competitive, governmental, regulatory and operational factors affecting our operations.

Because of these and a wide variety of other uncertainties, many of which are beyond our control, our actual future results may be

materially different from the results indicated by these forward-looking statements.

Investment Highlights

•

Strong and improving financial performance

–

YTD ROAA of 0.95%¹

–

YTD ROATCE of 14.10%¹

–

YTD efficiency ratio of 56.69%

–

Net interest margin has expanded from 2.92% for the fiscal year 2013 to 3.18% for

2015YTD

•

History of growth

•

EPS

has increased 33% from $0.84 in the first half of 2014 to $1.12 in the first half of

2015

•

FY EPS grew 28% year-over-year from $1.34 in 2013 to $1.72 in 2014

–

Pre-tax, pre-provision ROAA increased 27% from 1.24% June YTD 2014 to 1.57%

YTD 2015

–

Improved the loan-to deposit ratio by 27% from 47.5% of deposits at year-end

2011 to 60.1% of deposits at Q2’15

(1)

Annualized

Source: Company filings, metrics as of June 30, 2015

largest independent bank in Louisiana out of 133 banks, with a 81 year-old history

Investment Highlights

largest independent bank in Louisiana out of 133 banks, with a 81 year-old history

•

Substantial opportunity to improve profitability and continue growth

–

Loans/deposits

currently

stand

only

60.1%,

with

investment

securities

and

cash

comprising

44.3%

the

total

assets

–

First Guaranty’s weighted average MSA projected population growth rate (2015 –

2020)

17%

higher

than the national average, and First Guaranty’s weighted average MSA household income is 31% higher

than the projected national average over this same time period

–

Less than 2% of deposit share in large and desirable Louisiana cities including Baton Rouge, Lafayette and

Shreveport provide significant opportunities

•

Management team & board with significant “skin in the game” and history of creating

shareholder value

–

Insider ownership of 40%

–

consecutive

quarters

dividends

paid

and

announced

the

second

quarter

2015

–

total

$54.6MM in dividends have been paid through 6/30/2015

–

First Guaranty’s Chairman Marshall Reynolds has a long history of running profitable banks and creating

shareholder value through organic growth, strategic acquisitions, and partnering with larger banking

organizations

•

Since March 1993 when current Chairman Marshall Reynolds recapitalized First Guaranty, book value per

share has compounded at a 10.9% CAGR while First Guaranty has paid out dividends of $54.6 million

Source: Company filings, metrics as of June 30, 2015

History

1934

1993

1999

2001

2007

2009

2010

2015

First Guaranty

Bank founded in

Amite, LA

Investor group led by

Marshall T Reynolds

invests $3.6M as part

of a recapitalization

Announces

acquisition of

First Southwest

Bank

Announces

acquisition of

Woodlands

Bancorp, Inc.

Announces acquisition

of Homestead Bancorp,

Inc.

First Guaranty

Bancshares Inc. formed

Bank surpasses

the $1.0B total

asset mark

Alton Lewis

becomes CEO

Announces

acquisition of

Greensburg

Bancshares, Inc.

Paid

consecutive

quarterly dividend

as of 2015Q2

•

Modern history begins in 1993 with the recapitalization of First Guaranty by a group of investors led by Marshall T. Reynolds

Overview

Corporate Timeline

(1)

Source: Company filings, excludes the impact of stock splits and stock dividends

(2)

Book value per share as of March 31, 1993 post-recapitalization

2002

In April Alton

Lewis becomes a

Director of the

Bank

Dollars in millions

Snapshot (Then and Now)

Metrics

1993

Q2'15

CAGR

Total Assets:

$158.8

$1,512.7

11.1%

Net Loans:

$103.5

$800.9

10.0%

Book Value Per Share¹:

$3.70²

$37.18

10.9%

Branches

Market Opportunity

Shreveport MSA

Lafayette MSA

Baton Rouge MSA

Hammond MSA

•

Lafayette is the third largest city by population and

deposits in Louisiana

•

Home of University of Louisiana-Lafayette (enrollment

~17,000)

•

Healthcare, government, retail, and mining are the top

employing industries in the area

•

2015-2020 projected income growth of 9.98%

•

Baton Rouge is the second largest city by both population

and deposits in Louisiana

•

Hub of the Southeast petro chemical industry

•

Political hub of the state of Louisiana

–

State government is the largest employer

•

Home of Louisiana State University (enrollment ~30,000)

•

2015-2020 projected income growth of 10.57%

Sources: SNL Financial, First Guaranty management, North Louisiana Economic Partnership

•

Major transportation hub

•

Distribution hub for Wal-Mart and Winn Dixie

•

Home of Southeastern Louisiana University (enrollment

~15,000)

•

2015-2020 projected population growth of 5.04%

•

2015-2020 projected income growth of 6.58%

•

Diversified economy; employment services, government,

education, and wholesale / retail trade

•

Barksdale Air Force Base is largest employer with 10,284

employees

•

Contains Las Vegas-style gaming industry

•

2015-2020 projected income growth of 14.23%

•

$47,259 2015 median household income

Attractive Demographics and Presence

2016-2021 Projected Population Growth by MSA

Market Share Leader in Hammond, LA

2015

Rank

Institution (ST)

2015

Number

Branches

2015

Total

Deposits in

Market

($000)

2015

Total

Market

(%)

First Guaranty Bancshares Inc. (LA)

640,361

36.39

First NBC Bank Holding Co. (LA)

261,884

14.88

Hancock Holding Co. (MS)

210,988

11.99

FPB Financial Corp. (LA)

179,117

10.18

Regions Financial Corp. (AL)

151,155

8.59

Capital One Financial Corp. (VA)

81,742

4.65

JPMorgan Chase & Co. (NY)

72,149

4.10

First Trust Corp. (LA)

61,106

3.47

Investar Holding Corp. (LA)

52,287

2.97

Fidelity Bank (LA)

16,977

0.96

Total For Institutions In Market

1,759,774

2016-2021 Household Net Income Growth by MSA

5.09%

3.31%

4.41%

1.12%

4.04%

3.69%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Hammond

MSA

Baton Rouge

MSA

Lafayette

MSA

Shreveport

MSA

WA FGBI

MSA

Nationwide

7.34%

10.81%

11.77%

4.20%

8.03%

7.77%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Hammond

MSA

Baton Rouge

MSA

Lafayette

MSA

Shreveport

MSA

WA FGBI

MSA

Nationwide

3.4%

Above

Nat. Avg.

9.5%

Above

Nat. Avg.

Source: SNL Financial

Management Team

•

Chairman of the Bank since 1996 and the Company since inception in 2007

•

~40 years of Banking experience

•

CEO of Champion Industries, Inc. (printing)

•

Serves

Chairman

Premier

Financial

Bancorp,

Inc.

(West

Virginia)

and

Director

Citizens

Deposit

Bank

Trust

(West Virginia)

and

Summit

State

Bank

(California)

Marshall T. Reynolds

Chairman of the Board

•

Appointed to current role of CEO in 2009

•

Also serves as Vice Chairman of the Bank

•

Has been a director since April 2002

•

Previously served as Director of the Bank from June of 1988 to July of 1993

•

Partner of the law firm of Cashe, Lewis, Coudrain & Sandage and its predecessor from January 1980 to September 2009

Alton B. Lewis

Vice Chairman,

President, and CEO

•

Joined the Bank in 2003

•

During his eleven years with the Company, has held positions in commercial lending and credit, including chief credit officer

•

Previously a financial analyst with Livingston & Jefferson

•

CFA charterholder

Eric J. Dosch

Chief Financial Officer

•

Joined the Bank in 2010

•

Responsibilities include Information Technology, Information Security, Alternative Products Support, Deposit Operations, and

Operations

•

Mr. Stark has 33 years of experience in Community/Commercial Banking

•

That experience includes Management of Operations, Data Processing, Facilities, Credit, Loan Review, and Internal Audit

Richard A. Stark

Chief Operating Officer

•

Joined the Bank in 2006

•

Worked in accounting for 2 years prior to joining the Bank as a credit analyst

•

Rose through the ranks to become Chief Credit Officer in 2015

Randy S. Vicknair

Chief Credit Officer

•

Joined the Bank in October of 2015

•

30 years of experience in Credit Administration and Commercial Banking

•

LCM Capital Partners from 2010 until joining First Guaranty in October, 2015. Focused on providing turnaround management

services to financial organizations with an emphasis on problem loan resolution

•

Prior to 2010 Huntington National Bank, Bank One and Bank of America

Mike Cross

Chief Lending Officer

Insider Shareholder Base

Note: Asterisk indicate percentages under 0.1%

(1)

Includes 3,300 shares owned by Purple Cap, LLC, over which Mr. Reynolds has shared voting and investment power. Also includes 4,546 shares owned by Champion

Leasing Corp., 5,166 shares owned by The Harrah & Reynolds Corporation, 17,040 shares owned by M. T. Reynolds Irrevocable Trust and 1,400 shares as custodian for

his grandchildren, over all of which Mr. Reynolds has sole voting and investment power. Also includes 9,532 shares owned by Mr. Reynolds’s wife who exercises sole

voting and investment powers over such shares. Does not include 105,200 shares beneficially owned by Mr. Reynolds’ son, Jack Reynolds, and 338,011 shares

beneficially owned by Mr. Reynolds’ son, Douglas V. Reynolds. 1,478,755 shares are pledged as security for a loan.

(2)

Includes 43,098 shares owned by Hood Investments, LLC, 2,904 shares owned by Amite Mini Storage of which Mr. Hood is an affiliate, 4,108 shares owned by minors in

which Mr. Hood is custodian, and 15,452 shares owned by WKH Management, Inc. as to which Mr. Hood exercises sole voting and investment power. Also includes

725,919 shares owned by Smith & Hood Investments, LLC of which Mr. Hood is President and Chairman.

(3)

Includes 41,739 shares owned by Big 4 Investments of which Mr. Smith is President and 725,919 shares owned by Smith & Hood Investments, LLC of which Mr. Smith is

a co-owner.

(4)

Includes 15,457 shares held in IRA for the benefit of Mr. Lewis and 6,272 shares held jointly with his wife.

(5)

Includes 250 shares owned by minors in which Mr. Dosch is custodian. Also includes 100 shares owned by Mr. Dosch’s spouse. 1,000 shares are pledged to secure a

revolving line of credit with another financial institution.

(6)

Insider Name

Age

Title

Position

(#)

Percent of Total Shares Outstanding

(%)

Marshall T. Reynolds¹

Chairman of the Board

1,504,017

23.9

William K. Hood²

Director

895,536

14.2

Edgar R. Smith III³

Director

768,712

12.2

Alton B. Lewis Jr.

Vice Chairman, President & CEO

38,727

0.6

Eric John Dosch

Treasurer, Secretary & CFO

6,789

0.1

Glenda Baskin Glover

Director

2,000

Total

2,489,862

39.6

Total number of shares includes only 725,919 shares with respect to the shares co-owned by Messrs. Hood and Smith through Smith & Hood Investments, LLC.

Recent Developments (Sep. 30, 2015)

•

Balance Sheet

–

Total assets $1.4B

–

Gross loans $857M

–

Investment securities $518M

–

Total deposits $1.3B

–

Common equity $109M

•

Income Statement

–

Net income of $3.7M to $3.9M or $0.60 per share

–

Pre-tax gain of $2.2M from the sale of common shares from a converted preferred

security

•

Asset quality

–

NPAs/Assets of 1.60%

–

NPLs/Loans of 2.40%

–

ALLL/Total Loans of 1.15%

–

The increase in non-performing assets and non-performing loans was primarily due to

two commercial real estate loans: (1) a $5.4 million loan secured by a multi-family

property; and (2) a $2.9 million loan secured by a multi-family property. Both of these

loans were previously classified as either special mention or substandard

Note: Unaudited financial metrics estimated for the three months ended September 30, 2015

Source: Company filings

Consistent Dividends… While Increasing TBV

(1)

Green shading indicates the reversal on the impact of an unrealized OCI mark-to-market loss of $15.2 million

(2)

Note: As of June 30, 2015

Source: SNL Financial and Company filings

Total Annual Dividend History

TBV Per Share

•

88 consecutive quarters of dividends paid, 89 announced

•

$0.64 / share dividend per quarter since 2008

•

10% stock dividend declared in February 2012

•

$0.64 dividend rate per share held constant which increased dividends

to existing shareholders before the 2012 stock dividend

•

$54.6 million in total dividends paid to common shareholders since 1993

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

$3,500.00

$4,000.00

$4,500.00

$12.01

$13.12

$14.38

$12.72

$15.34

$16.35

$15.13¹

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

2010

2011

2012

2013

2014

2015Q2

Loan Portfolio

Loan Portfolio (12/31/2011)

Loan Portfolio (6/30/2015)

Total Gross Loans: $573.1 million

Yield on Loans: 6.00%

Total Gross Loans: $810.4 million

Yield on Loans: 5.35%

C&D

13.7%

Farmland

2.0%

1-4 Family

15.6%

Multifamily

2.9%

Non-farm

non-

residential

46.8%

Agriculture

3.0%

C&I

11.9%

Consumer

& Other

4.1%

Oil & Gas Support and Services (6/30/2015)

Non-farm Non-residential CRE Portfolio (6/30/2015)

Total O&G-Related Loans: $17.1 million

Percent of Gross Loans: 2.1%

Non-owner

Occupied

56.4%

Owner

Occupied

43.6%

Top CRE Lending Industries

Hotel / Motel

Retail

Industrial & Warehouse

Manufacturing

Office Buildings

Source: SNL Financial, Company filings

•

Oil & Gas related loans totaled $17.1 million at June

30, 2015

•

These loans account for only 2.1% of gross loans

•

Of First Guaranty’s O&G portfolio, only 6.8% of it is

related to O&G extraction

•

The remaining 93.2% of the portfolio consists of

various support activities for mining

C&D

6.8%

Farmland

1.8%

1-4 Family

15.7%

Multifamily

1.8%

Non-farm

non-

residential

38.2%

Agricultural

3.5%

C&I

27.1%

Consumer

& Other

5.1%

Syndicated Loan Portfolio

•

First Guaranty developed its syndicated loan program in 2007

•

First

Guaranty

has

never

experienced

loss

its

syndicated

loan

portfolio

•

$115.1M or 14.2% of the total gross loan portfolio is comprised of syndicated loans in 20 relationships

of which 12 are Shared National Credits¹

•

First Guaranty uses this portfolio, through sound credit analysis, to strategically absorb excess liquidity,

diversify the loan portfolio, and mitigate interest rate risk

•

First Guaranty primarily finances middle market companies who need to borrow between $25 million

to $75 million

•

First Guaranty normally pursues loans with senior leverage of 3.0X or less with strong fixed charge

coverage ratios

•

Strong diversity in the industries financed

•

First Guaranty’s syndicated loan portfolio is a highly efficient

business line:

–

Efficient business model with nominal overhead cost

Source: Company filings

A Shared National Credit (SNC) is defined as any loan and/or formal loan commitment extended to a borrower by a supervised institution (subject to supervision by one of the federal

banking agencies (FBA)), its subsidiaries, and affiliates that totals $20 million or more and (1) is shared by three or more insured institutions under a formal lending agreement or (2) a

portion of which is sold to two or more insured institutions, with the purchasing institutions assuming a pro rata share of the credit risk. An agent originates a SNC and administers it

for the other lenders.

(1)

Deposit Composition at 6/30/15

Individual and Business Deposits¹

Total Deposits: $1,347.3 million

YTD Rate on Deposits: 0.64%

Weighted Avg. Rate of Deposits Trend²

Total Deposits: $764.4 million

YTD Rate on Deposits: 0.73%

Weighted Avg. Rate of Individual and Business Deposits Trend²

(1)

Individual and Business Deposits based on average balances

(2)

Annualized 2015 numbers

Data as of June 30, 2015

Source: Company filings

1.08%

0.88%

0.69%

0.64%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2012

2013

2014

2015 YTD

1.28%

1.05%

0.80%

0.73%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

2012

2013

2014

2015 YTD

Interest-

bearing

demand

31.1%

Savings

5.7%

Noninterest-

bearing

demand

15.4%

Time

47.8%

Interest-

bearing

demand

14.9%

Savings

8.5%

Noninterest-

bearing

demand

26.9%

Time

49.7%

Deposits

Public Funds Business Line Overview

•

First Guaranty has an expertise in managing public funds deposits

•

First Guaranty has $600 million of public funds deposits outstanding (44.5% of total

deposits) at June 30, 2015

•

Majority of deposits are under contractual relationships. First Guaranty seeks to be

fiscal agent for the public entity and provide multiple services to them.

•

Highly efficient business model

•

First Guaranty’s public funds require pledging

–

Most relationships require pledging of 100%

–

Pledge can include FHLB letters of credit, which will allow First Guaranty to increase its loans

to deposits ratio

–

Goal is to transition more public funds into a funding source for loans over time as we grow

our loan portfolio.

•

First Guaranty manages liquidity and interest rate risk in this portfolio by

–

Maintaining average life of the securities portfolio so as to provide flexibility for reinvestment

of cash flows

Source: Company filings

Investment Portfolio & Asset/Liability

•

First Guaranty has been reducing the percentage of securities as a portion of

total assets in recent years and concentrating on higher yielding loans

•

First Guaranty has been actively seeking to reduce the average life of the

portfolio to prepare for a rising rate environment

–

Current duration of the portfolio is expected to be 3.2 years in a flat interest rate

environment and 4.4 years in an up 400bps environment¹

Loan / Deposit Improvement

Securities Portfolio Detail

(1)

First Guaranty estimates

Source: SNL Financial, Company filings as of June 30, 2015

($000)

Book

Unrealized

Fair

Value

G/L

Value

Available-for-Sale Securities:

U.S. Treasuries

$ -

U.S. Government Agencies

281,825

(2,013)

279,812

Corporate Debt Securities

128,779

2,296

131,075

Mutual Funds / Equities

1,828

2,125

3,953

Municipal Bonds

49,461

(218)

49,243

Subtotal

$ 461,893

$ 2,190

$ 464,083

Held-to-Maturity Securities:

U.S. Government Agencies

$ 131,329

$ (1,708)

$ 129,621

Mortgage-backed Securities

53,831

(517)

53,314

Subtotal

$ 185,160

$ (2,225)

$ 182,935

Total Investment Portfolio

$ 647,053

$ (35)

$ 647,018

MRQ Yield on Securities

2.15%

47.5%

50.3%

54.0%

57.6%

60.1%

40.0%

42.5%

45.0%

47.5%

50.0%

52.5%

55.0%

57.5%

60.0%

62.5%

2011

2012

2013

2014

2015Q2

Historical Balance Sheets

Source: Company filings

(Dollars in thousands)

2011

2012

2013

2014

June 30, 2015

Assets

Cash and due from banks

43,812

83,342

60,819

44,365

16,939

Federal funds sold

68,630

2,891

665

210

340

Cash and cash equivalents

112,442

86,233

61,484

44,575

17,279

Interest-earning time deposits with banks

747

10,247

3,747

Available for sale, at fair value

520,497

600,300

484,211

499,808

464,083

Held to maturity, at cost

112,666

58,943

150,293

141,795

185,160

Investment securities

633,163

659,243

634,504

641,603

649,243

Federal Home Loan Bank stock, at cost

643

1,275

1,835

1,621

1,468

Loans, held for sale

557

Loans, net of unearned income

573,100

629,500

703,166

790,321

810,376

Allowance for loan losses

8,879

10,342

10,355

9,105

9,505

Net loans

564,221

619,158

692,811

781,216

800,871

Premises and equipment, net

19,921

19,564

19,612

19,211

20,181

Goodwill

1,999

Intangible assets, net

2,811

2,413

2,073

1,733

1,562

Other real estate, net

5,709

2,394

3,357

2,198

2,482

Accrued interest receivable

8,128

6,711

6,258

6,384

7,208

Other assets

4,829

7,009

11,673

8,089

6,673

Total Assets

1,353,866

1,407,303

1,436,441

1,518,876

1,512,713

Liabilities

Noninterest-bearing demand

167,925

192,232

204,291

207,969

207,742

Interest-bearing demand

289,408

348,870

391,350

432,294

418,662

Savings

57,452

63,062

65,445

74,550

77,354

Time

692,517

648,448

642,013

657,026

643,540

Total Deposits

1,207,302

1,252,612

1,303,099

1,371,839

1,347,298

Short-term borrowings

12,223

14,746

5,788

1,800

13,800

Accrued interest payable

3,509

2,840

2,364

1,997

Long-term borrowings

3,200

1,100

500

1,455

1,155

Other liabilities

1,030

1,824

1,285

2,202

2,711

Total Liabilities

1,227,264

1,273,122

1,313,036

1,379,293

1,366,961

Equity

Preferred Stock

39,435

Common stock

6,294

6,291

Surplus

39,387

Treasury

-54

Retained earnings

37,019

43,071

47,477

54,280

59,275

Accumulated other comprehensive income

4,467

6,048

-9,134

241

1,364

Total Equity

126,602

134,181

123,405

139,583

145,752

Total Liabilities & Shareholder's Equity

1,353,866

1,407,303

1,436,441

1,518,876

1,512,713

At December 31,

Historical Income Statements

(Dollars in thousands)

Year Ended December 31,

YTD

2011

2012

2013

2014

6/30/15

Income Statement

Interest Income

54,609

55,195

50,886

53,297

28,114

Interest Expense

15,118

13,120

11,134

9,202

4,432

Net Interest Income

39,491

42,075

39,752

44,095

23,682

Provision for Loan Losses

10,187

4,134

2,520

1,962

1,010

Service charges, commissions and fees

4,596

4,770

4,640

4,438

2,215

Net gains on securities

3,531

4,868

1,571

295

939

Loss on securities impairment

(97)

Net gain (loss) on sale of loans

114

(68)

(70)

(12)

Net gain (loss) on sale of assets

(109)

Gain on acquisition

1,665

Other Noninterest Income

1,463

1,679

1,337

1,456

702

Total Noninterest Income

11,273

11,140

7,478

6,177

3,860

Salaries and employee benefits

12,529

13,668

14,368

15,840

7,905

Occupancy & Equipment

3,473

3,713

3,949

3,928

1,969

Other Expense

12,819

13,780

12,670

11,826

5,739

Total Noninterest Expense

28,821

31,161

30,987

31,594

15,613

Net Income before Taxes

11,756

17,920

13,723

16,716

10,919

Provision for Taxes

3,723

5,861

4,577

5,492

3,663

Net Income

8,033

12,059

9,146

11,224

7,256

Preferred Dividends

(1,976)

(1,972)

(713)

(394)

(197)

Net Income Avail to Common

6,057

10,087

8,433

10,830

7,059

Source: Company filings

Reconciliation of Non GAAP Financial Measures

Source: Company filings

At December 31,

YTD June 30,

2011

2012

2013

2014

2015

Tangible common equity

Total stockholders' equity

$126,602

$134,181

$123,405

$139,583

$145,752

Adjustments:

Series C preferred stock

(39,435)

Goodwill

(1,999)

Acquisition intangibles

(2,608)

(2,257)

(1,938)

(1,618)

(1,458)

Tangible common equity

$82,560

$90,490

$80,033

$96,531

$102,860

Common shares outstanding

6,294,227

6,291,332

Book value per common share

$13.85

$15.06

$13.35

$15.92

$16.90

Tangible book value per common share

$13.12

$14.38

$12.72

$15.34

$16.35

Tangible assets

Total assets

$1,353,866

$1,407,303

$1,436,441

$1,518,876

$1,512,713

Adjustments:

Goodwill

(1,999)

Acquisition intangibles

(2,608)

(2,257)

(1,938)

(1,618)

(1,458)

Tangible assets

$1,349,259

$1,403,047

$1,432,504

$1,515,259

$1,509,256

Tangible common equity to tangible assets

6.12%

6.45%

5.59%

6.37%

6.82%

Total equity to total assets

9.35%

9.53%

8.59%

9.19%

9.64%

Return on average tangible common equity

Net income

$8,033

$12,059

$9,146

$11,224

$7,256

Net income available for common shareholders

6,057

10,087

8,433

10,830

7,059

Adjustments:

Amortization of intangible assets and goodwill impairments (tax effected at 35.0%)

185

228

208

104

Average tangible common equity

78,362

88,128

86,524

91,187

102,463

Average total equity

108,321

131,991

130,053

134,397

145,433

Return on average tangible common equity

7.97%

11.70%

9.99%

12.10%

14.10%

Return on average equity

7.42%

9.14%

7.03%

8.35%

10.06%