EX-99.1 2 exh_991.htm EXHIBIT 99.1 EdgarFiling

EXHIBIT 99.1

Luther Burbank Corporation Reports 2018 First Quarter Earnings Per Common Share of $0.20

Quarterly Cash Dividend of $0.0575 Per Common Share Declared

SANTA ROSA, Calif., April 26, 2018 (GLOBE NEWSWIRE) -- Luther Burbank Corporation (NASDAQ:LBC) (the “Company”), the holding company for Luther Burbank Savings (the “Bank”), today reported net income available to common shareholders of $11.1 million, or $0.20 diluted earnings per common share (“EPS”), for the quarter ended March 31, 2018, compared to net income available to common shareholders of $12.3 million, or $0.29 EPS, for the quarter ended March 31, 2017. Pre-tax, pre-provision earnings and pro-forma EPS for the quarter ended March 31, 2018 were $16.8 million and $0.20, respectively, compared to $13.0 million and $0.18, respectively, for the same period last year. 

Pre-tax, pre-provision earnings and pro-forma EPS, both non-GAAP financial measures, are presented because management believes these financial metrics provide stockholders with useful information for evaluating the profitability of the Company.  In addition, management believes it enhances the comparability of the Company’s financial results by eliminating the tax differences associated with the Company’s change in tax status from an S-corporation to a C-corporation.  The Company revoked its S-corporation status in December 2017.  A schedule reconciling our GAAP net income to pre-tax, pre-provision earnings and pro-forma EPS are provided in the tables below.

John G. Biggs, President and Chief Executive Officer, stated, “We are extremely pleased with our results in the first quarter after a successful initial public offering in December 2017. For the first time in our history, we’ve exceeded $6 billion in total assets fueled by strong growth in our loan and deposit portfolios.  In addition to our 6% growth in assets since year-end 2017, net interest income increased by over 13% compared to the same period last year and our efficiency ratio improved to 47%, which is one of the best efficiency ratios amongst our industry peers.”

Mr. Biggs continued, “Looking forward, I’m excited for the opening of our new branch in Bellevue, WA in mid-2018, as well as the recent announcement regarding the expansion of our construction lending operations.  These initiatives will further support our growth and financial objectives and will continue our expansion into key strategic markets.”

Board Declares Quarterly Cash Dividend of $0.0575 Per Share

On April 26, 2018, the Board of Directors of the Company declared a quarterly cash dividend of $0.0575 per common share.  The dividend is payable on May 17, 2018 to shareholders of record as of May 7, 2018.

First Quarter Earnings Summary

Net interest income for the quarter ended March 31, 2018 totaled $30.5 million compared to $27.6 million for the previous quarter and $26.9 million for the same period last year. The increase in net interest income was primarily related to growth in the average balance of our loans outstanding compared to the previous quarter and the same period last year. Net interest margin for the quarter ended March 31, 2018 was 2.11%, compared to 2.05% for the previous quarter and 2.10% for the 2017 first quarter.

Noninterest Income

Noninterest income for the quarter ended March 31, 2018 totaled $1.0 million, compared to $1.5 million for the previous quarter and $882 thousand for the 2017 first quarter. The reduction of $469 thousand in noninterest income, or 31.4%, for the quarter ended March 31, 2018 compared to the linked quarter ended December 31, 2017, was attributable to a decrease of $341 thousand in other fee income related to mortgage servicing rights amortization. The increase of $143 thousand in noninterest income, or 16.2%, for the quarter ended March 31, 2018 compared to the quarter ended March 31, 2017, was primarily attributable to fair value losses incurred in connection with the discontinuation of our retail mortgage operations during the first quarter of 2017. 

Noninterest Expense

Noninterest expense for the quarter ended March 31, 2018 totaled $14.7 million compared to $13.2 million for the previous quarter and $14.7 million for the 2017 first quarter.  The increase of $1.5 million, or 11.3%, for the quarter ended March 31, 2018 compared to the linked quarter ended December 31, 2017, was primarily attributable to an increase of $1.5 million in compensation and related benefits.

Balance Sheet Summary

Total assets at March 31, 2018 were $6.0 billion, an increase of $329.5 million from December 31, 2017. The increase was primarily due to a $284.9 million increase in loans and a $35.2 million increase in available for sale investment securities.

Loans

The multifamily residential (“MFR”) mortgage loan portfolio totaled $3.1 billion at March 31, 2018 compared to $2.9 billion at December 31, 2017 and represents 58.1% of the total loan portfolio. The yield on the MFR portfolio was 3.72% during the three months ended March 31, 2018, compared to 3.65% during the previous quarter and 3.45% during the same period last year.  For the quarter ended March 31, 2018, MFR loan originations and the corresponding weighted average coupon totaled $241.8 million and 4.29%, respectively, compared to $410.2 million and 3.87%, respectively, for the same period last year.  MFR loan originations were higher during the same period last year due to anticipated loan sales during 2017.  Prepayment speeds within the MFR loan portfolio were 4.6% and 15.7% during the quarters ended March 31, 2018 and 2017, respectively.

The single family residential mortgage loan portfolio totaled $2.1 billion at March 31, 2018 and December 31, 2017 and represents 38.9% of the total loan portfolio. The yield on the SFR portfolio was 3.35% during the three months ended March 31, 2018, compared to 3.29% during the previous quarter and 3.22% during the same period last year.  For the quarter ended March 31, 2018, residential loan originations and the corresponding weighted average coupon totaled $215.2 million and 4.29%, respectively, compared to $123.9 million and 3.96%, respectively, for the same period last year.  The fluctuation in SFR originations was primarily attributable to an increase in customer demand experienced during the current quarter compared to the same period last year.  Prepayment speeds within the SFR loan portfolio were 21.3% and 24.3% during the quarters ended March 31, 2018 and 2017, respectively. 

Deposits

Deposits totaled $4.1 billion at March 31, 2018, an increase of $162.8 million from December 31, 2017. Retail deposits represented 89% of the growth, or $145.3 million, while wholesale deposits represented 11%, or $17.4 million.  Our cost of deposits was 1.19% during the quarter ended March 31, 2018 compared to 1.15% during the prior quarter and 0.96% during the same period last year.  The change in our cost of deposits was primarily related to increases in our time deposit portfolio, which rate increased to 1.44% during the current period due to competitive pressures. 

Capital

Stockholders’ equity totaled $553.8 million, or 9.2% of total assets at March 31, 2018, an increase of $4.0 million from December 31, 2017, or an increase of 0.7%.  Both the Bank’s and the Company’s capital levels continue to be significantly above the minimum levels required to be designated as “well-capitalized” for bank regulatory purposes. At March 31, 2018, Tier 1 leverage, Common Equity Tier 1 risk based, Tier 1 risk-based and Total risk-based capital ratios were 11.90%, 19.44%, 19.44% and 20.39%, respectively for the Bank, and 10.57%, 15.55%, 17.27% and 18.22%, respectively for the Company. At March 31, 2018, the Company’s tangible stockholders' equity ratio was 9.13%.

Asset Quality

Non-performing loans, totaled $7.0 million, or 0.13% of total loans, at March 31, 2018, compared to $7.0 million, or 0.14% of total loans, at December 31, 2017.  There was not any real estate owned at March 31, 2018 or December 31, 2017.  For the quarter ended March 31, 2018, a $1.5 million loan loss provision was recorded compared to a $1.3 million provision in the prior quarter and a $309 thousand provision recorded in the first quarter of 2017.

About Luther Burbank Corporation

Luther Burbank Corporation is a publicly owned company traded on the NASDAQ Capital Market under the symbol “LBC.” The Company is headquartered in Santa Rosa, California with total assets of $6.0 billion, total loans of $5.3 billion and total deposits of $4.1 billion as of March 31, 2018. It operates primarily through its wholly-owned subsidiary, Luther Burbank Savings, an FDIC insured, California-chartered bank. Luther Burbank Savings executes on its mission to improve the financial future of customers, employees and shareholders by providing personal banking and business banking services. It offers consumers a host of highly competitive depository and mortgage products coupled with personalized attention. Business customers benefit from boutique-quality service along with access to products which meet their unique financial needs from the convenience of online and mobile banking, robust cash management solutions, and high-yield liquidity management products to multifamily and commercial lending. Currently operating in California, Oregon and Washington, from nine branches in California and nine lending offices located throughout the market area, Luther Burbank Savings is an equal housing lender. For additional information, please visit lutherburbanksavings.com.

Cautionary Statements Regarding Forward-Looking Information

This communication contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our results of operations, financial condition and financial performance. All statements contained in this communication that are not clearly historical in nature are forward-looking, and the words such as "anticipate," "believe," “continue,” "could," "estimate," "expect," “impact,” "intend," "seek," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases are generally intended to identify forward-looking statements.  These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Such factors include, without limitation, the “Risk Factors” referenced in our Registration Statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”). The risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic market areas; economic, market, operational, liquidity, credit and interest rate risks associated with our business; the occurrence of significant natural or man-made disasters, including fires, earthquakes, and terrorist acts; our management of risks inherent in our real estate loan portfolio, and the risk of a prolonged downturn in the real estate market; our ability to achieve organic loan and deposit growth and the composition of such growth; the fiscal position of the U.S federal government and the soundness of other financial institutions; changes in consumer spending and savings habits; technological and social media changes; the laws and regulations applicable to our business; increased competition in the financial services industry; changes in the level of our nonperforming assets and charge-offs; our involvement from time to time in legal proceedings and examination and remedial actions by regulators; the composition of our management team and our ability to attract and retain key personnel; material weaknesses in our internal control over financial reporting; systems failures or interruptions involving our information technology and telecommunications systems; and potential exposure to fraud, negligence, computer theft and cyber-crime.  The Company can give no assurance that any goal or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.

About Non-GAAP Financial Measures

Certain of the financial measures and ratios we present, including “pre-tax, pre-provision net earnings,”  “efficiency ratio,” “return on average tangible equity,” “proforma net income,” “proforma ratios,” "net tangible book value per share," “tangible assets,” “tangible stockholders’ equity” and “tangible stockholders’ equity to tangible assets,” are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons.  We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.


      
CONSOLIDATED BALANCE SHEETS     
(Dollars in thousands)     
 March 31,
 2018 (unaudited)		 March 31,
 2017 (unaudited)		 December 31,
 2017
ASSETS     
Cash and cash equivalents$74,421  $75,719  $75,578 
Available for sale investment securities, at fair value538,440  466,564  503,288 
Held to maturity investment securities, at amortized cost12,237  7,267  6,921 
Loans held-for-sale—  47,844  — 
Loans held-for-investment5,326,409  4,729,359  5,041,547 
Allowance for loan losses(31,980) (33,699) (30,312)
Accrued interest receivable16,137  13,174  14,901 
Federal Home Loan Bank stock33,023  32,910  27,733 
Premises and equipment, net21,862  23,785  22,452 
Goodwill3,297  3,297  3,297 
Prepaid expenses and other assets40,042  25,320  38,975 
      
Total assets$6,033,888  $5,391,540  $5,704,380 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
Liabilities:     
Deposits$4,114,026  $3,620,642  $3,951,238 
Federal Home Loan Bank advances1,158,153  1,157,480  989,260 
Junior subordinated deferrable interest debentures61,857  61,857  61,857 
Senior debt94,195  94,061  94,161 
Accrued interest payable2,329  1,398  1,781 
Other liabilities and accrued expenses49,577  48,595  56,338 
      
Total liabilities5,480,137  4,984,033  5,154,635 
      
Stockholders' equity:     
Common stock, no par value; 100,000,000 shares authorized; 56,561,055 and 56,422,662 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively455,251  2,262  454,287 
Retained earnings105,750  410,143  102,459 
Accumulated other comprehensive loss, net of taxes(7,250) (4,898) (7,001)
      
Total stockholders' equity553,751  407,507  549,745 
      
Total liabilities and stockholders' equity$6,033,888  $5,391,540  $5,704,380 
      


CONSOLIDATED INCOME STATEMENTS (UNAUDITED)    
(Dollars in thousands except per share data)    
 For the Three Months Ended
 March 31,
 2018		 March 31,
 2017		 December 31,
2017
Interest income:     
Interest and fees on loans$46,563  $38,743  $42,477 
Interest and dividends on investment securities2,718  1,653  2,146 
Total interest income49,281  40,396  44,623 
Interest expense:     
Interest on deposits11,932  8,314  11,285 
Interest on FHLB advances4,820  3,275  3,760 
Interest on junior subordinated deferrable interest debentures487  380  447 
Interest on senior debt1,577  1,577  1,577 
Total interest expense18,816  13,546  17,069 
Net interest income before provision for loan losses30,465  26,850  27,554 
Provision for loan losses1,500  309  1,250 
Net interest income after provision for loan losses28,965  26,541  26,304 
Noninterest income:     
Increase in cash surrender value of life insurance53  49  48 
Net loss on sale of loans—  (163) — 
FHLB dividends594  633  696 
Other income378  363  750 
Total noninterest income1,025  882  1,494 
Noninterest expense:     
Compensation and related benefits9,619  10,197  8,140 
Deposit insurance premium432  398  404 
Professional and regulatory fees398  185  582 
Occupancy1,296  1,298  1,295 
Depreciation and amortization714  735  724 
Data processing788  790  789 
Marketing213  179  298 
Other expenses1,253  921  989 
Total noninterest expense14,713  14,703  13,221 
Income before provision for income taxes15,277  12,720  14,577 
Provision for income taxes4,175  425  (5,844)
Net income$11,102  $12,295  $20,421 
Basic earnings per common share$0.20  $0.29  $0.45 
Diluted earnings per common share$0.20  $0.29  $0.45 
Weighted average common shares outstanding - basic56,190,970  42,000,000  45,667,516 
Weighted average common shares outstanding - diluted56,755,154  42,000,000  45,831,743 
         


CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED)    
(Dollars in thousands except per share data)    
 As of or For the Three Months Ended
 March 31,
 2018		 March 31,
 2017		 December 31,
2017
PERFORMANCE RATIOS     
Return on average:     
Assets0.76% 0.95% 1.50%
Stockholders' equity7.98% 12.01% 17.97%
Tangible stockholders' equity8.03% 12.11% 18.10%
Efficiency ratio46.72% 53.02% 45.51%
Noninterest expense to average assets1.01% 1.14% 0.97%
Loans to deposit ratio129.47% 131.94% 127.59%
Average stockholders' equity to average assets9.52% 7.92% 8.32%
Dividend payout ratio54.59% 79.71% 230.64%
PRO FORMA (1)           
Pro forma net income$11,102  $7,378  $8,455 
Pro forma diluted earnings per share$0.20  $0.18  $0.18 
Pro forma return on average:           
Assets0.76% 0.57% 0.62%
Stockholders' equity7.98% 7.21% 7.44%
Tangible stockholders' equity8.03% 7.27% 7.49%
YIELDS/ RATES           
Yield on loans3.61% 3.38% 3.53%
Yield on investments1.85% 1.32% 1.57%
Yield on interest earning assets3.42% 3.16% 3.31%
Cost of deposits1.19% 0.96% 1.15%
Cost of borrowings2.25% 1.69% 2.25%
Cost of interest bearing liabilities1.44% 1.15% 1.38%
Net interest spread1.98% 2.01% 1.93%
Net interest margin2.11% 2.10% 2.05%
CAPITAL           
Total equity to total assets9.18% 7.56% 9.64%
Tangible stockholders' equity to tangible assets9.13% 7.50% 9.58%
Book value per share$9.79  $9.70  $9.74 
Tangible book value per share$9.73  $9.62  $9.68 
Market value per share (period end)$12.01  N/A  $12.04 
AVERAGE BALANCES           
Loans and loans held for sale$5,165,366  $4,578,372  $4,818,654 
Earning assets$5,770,070  $5,111,903  $5,386,380 
Total assets$5,848,751  $5,172,186  $5,461,226 
Deposits$4,007,106  $3,467,449  $3,914,149 
Total equity$556,661  $409,451  $454,635 
Tangible equity$553,364  $406,154  $451,338 
      
(1)  See "Non-GAAP Reconciliation" table for reconciliation of Pro Forma Net Income and Ratios


      
CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED)     
(Dollars in thousands)     
 As of or For the Three Months Ended
 March 31,
 2018		 March 31,
 2017		 December 31,
2017
ASSET QUALITY     
Net recoveries$168  $92  $78 
Nonperforming loans$6,961  $4,315  $7,037 
Nonperforming assets$6,961  $4,315  $7,037 
Allowance for loan losses$31,980  $33,699  $30,312 
Annualized net recoveries to average loans0.01% 0.01% 0.01%
Nonperforming loans to total loans0.13% 0.09% 0.14%
Nonperforming assets to total assets0.12% 0.08% 0.12%
Allowance for loan losses to loans held-for-investment0.60% 0.71% 0.60%
Allowance for loan losses to nonperforming loans459.42% 780.97% 430.75%
LOAN COMPOSITION     
Multifamily residential$3,094,033  $2,908,147  $2,903,947 
Single family residential$2,069,950  $1,756,633  $1,983,384 
Commercial real estate$125,756  $69,843  $112,711 
Construction and land$36,570  $42,530  $41,455 
Non-mortgage$100  $50  $50 
DEPOSIT COMPOSITION     
Non-interest bearing transaction accounts$28,843  $14,490  $30,899 
Interest bearing transaction accounts$196,767  $197,729  $203,159 
Money market deposit accounts$1,489,718  $1,571,721  $1,474,498 
Time deposits$2,398,698  $1,836,702  $2,242,682 
            


AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED)
(Dollars in thousands)            
  For the Three Months Ended March 31,
  2018 2017
  Average Balance Interest Inc / Exp Average Yield/Rate Average Balance Interest Inc / Exp Average Yield/Rate
Interest-Earning Assets            
Multifamily residential $3,000,059  $27,930  3.72% $2,724,910  $23,490  3.45%
Single family residential 2,009,329  16,806  3.35% 1,755,119  14,118  3.22%
Commercial 117,559  1,463  4.98% 60,953  784  5.14%
Construction, land and NM 38,419  364  3.79% 37,390  351  3.76%
Total Loans (1) 5,165,366  46,563  3.61% 4,578,372  38,743  3.38%
Securities available-for-sale 524,119  2,383  1.82% 455,096  1,465  1.29%
Securities held-to-maturity (2) 10,544  89  3.38% 7,452  59  3.17%
Cash and cash equivalents 70,041  246  1.40% 70,983  129  0.73%
Total interest-earning assets 5,770,070  49,281  3.42% 5,111,903  40,396  3.16%
Noninterest-earning assets (3) 78,681       60,283      
Total assets $5,848,751       $5,172,186      
               
Interest-Bearing Liabilities              
Transaction accounts (4) $224,674  $407  0.72% $205,712  $350  0.68%
Money market demand accounts 1,507,614  3,314  0.88% 1,545,433  2,919  0.76%
Time deposits 2,274,818  8,211  1.44% 1,716,304  5,045  1.18%
Total deposits 4,007,106  11,932  1.19% 3,467,449  8,314  0.96%
FHLB advances 1,070,087  4,820  1.80% 1,084,904  3,275  1.21%
Senior debt 94,173  1,577  6.70% 94,037  1,577  6.71%
Junior subordinated debentures 61,857  487  3.15% 61,857  380  2.46%
Total interest-bearing liabilities 5,233,223  18,816  1.44% 4,708,247  13,546  1.15%
Noninterest-bearing liabilities 58,867       54,488      
Total stockholders' equity 556,661       409,451      
Total liabilities and stockholders' equity $5,848,751       $5,172,186      
               
Net interest spread (5)     1.98%     2.01%
Net interest income/margin (6)   $30,465  2.11%   $26,850  2.10%
                       

(1)   Loan balance includes portfolio real estate loans, real estate loans held for sale and $100 thousand or less in non-mortgage loans. Non-accrual loans are included in total loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. Net deferred loan cost amortization totals $2.3 million and $2.2 million for the three months ended March 31, 2018 and 2017, respectively.
(2)   Securities held to maturity include obligations of states and political subdivisions of $281 thousand and $298 thousand as of March 31, 2018 and 2017, respectively. Yields are not calculated on a tax equivalent basis.
(3)   Noninterest earning assets includes the allowance for loan losses.
(4)   Transaction accounts include both interest and non-interest bearing deposits.
(5)   Net interest spread is the average yield on total interest-earning assets minus the average rate on total interest-bearing liabilities.
(6)   Net interest margin is net interest income divided by total interest-earning assets.

      
NON-GAAP RECONCILIATION (UNAUDITED)     
(Dollars in thousands except per share data)    
 For the Three Months Ended
 March 31,
 2018		 March 31,
 2017		 December 31,
2017
Pre-tax, pre-provision net earnings     
Income before taxes$15,277  $12,720  $14,577 
Plus: Provision for loan losses1,500  309  1,250 
Pre-tax, pre-provision net earnings$16,777  $13,029  $15,827 
Efficiency Ratio     
Noninterest expense (numerator)$14,713  $14,703  $13,221 
      
Net interest income30,465  26,850  27,554 
Noninterest income1,025  882  1,494 
Operating revenue (denominator)$31,490  $27,732  $29,048 
Efficiency ratio46.72% 53.02% 45.51%
Return on Average Tangible Equity     
Annualized net income (numerator)$44,408  $49,180  $81,684 
      
Average stockholders' equity$556,661  $409,451  $454,635 
Less: Average goodwill(3,297) (3,297) (3,297)
Average tangible stockholders' equity (denominator)$553,364  $406,154  $451,338 
Return on Average Tangible Equity8.03% 12.11% 18.10%
Pro Forma Net Income     
Income before provision for income taxes$15,277  $12,720  $14,577 
Pro forma provision for income taxes (1)4,175  5,342  6,122 
Pro forma net income$11,102  $7,378  $8,455 
Pro Forma Ratios     
Pro forma net income (numerator)$11,102  $7,378  $8,455 
Weighted average common shares outstanding - diluted (denominator)56,755,154  42,000,000  45,831,743 
Pro forma diluted earnings per share$0.20  $0.18  $0.18 
      
Annualized pro forma net income (numerator)$44,408  $29,510  $33,819 
      
Average assets (denominator)$5,848,751  $5,172,186  $5,461,226 
Pro forma return on average assets0.76% 0.57% 0.62%
      
Average stockholders' equity (denominator)$556,661  $409,451  $454,635 
Pro forma return on average stockholders' equity7.98% 7.21% 7.44%
      
Average tangible stockholders' equity (denominator)$553,364  $406,154  $451,338 
Pro forma return on average stockholders' equity8.03% 7.27% 7.49%
      
(1) Prior to January 1, 2018, we calculate our pro forma net income, earnings per share, return on average assets, return on average equity and return on average tangible equity by adding back our franchise S Corporation tax to net income, and using a combined C Corporation effective tax rate for Federal and California income taxes of 42.0%. This calculation reflects only the change in our status as an S Corporation and does not give effect to any other transaction. For the three months ended March 31, 2018, our actual provision for income taxes is used for comparative purposes.


      
NON-GAAP RECONCILIATION     
(Dollars in thousands except per share data)    
 As of March 31,
 2018 (unaudited)		 As of March 31,
 2017 (unaudited)		 As of December 31,
2017
Net Tangible Book Value Per Share     
Total Assets$6,033,888  $5,391,540  $5,704,380 
Less: Goodwill(3,297) (3,297) (3,297)
Less: Total Liabilities(5,480,137) (4,984,033) (5,154,635)
Net Tangible Book Value$550,454  $404,210  $546,448 
Period end shares outstanding56,561,055  42,000,000  56,422,662 
Net Tangible Book Value Per Share$9.73  $9.62  $9.68 
Tangible Assets     
Total Assets$6,033,888  $5,391,540  $5,704,380 
Less: Goodwill(3,297) (3,297) (3,297)
Tangible Assets$6,030,591  $5,388,243  $5,701,083 
Tangible Stockholders' Equity     
Total Stockholders' Equity$553,751  $407,507  $549,745 
Less: Goodwill(3,297) (3,297) (3,297)
Tangible Stockholders' Equity$550,454  $404,210  $546,448 
Tangible Stockholders' Equity to Tangible Assets     
Tangible stockholders' equity (numerator)$550,454  $404,210  $546,448 
Tangible assets (denominator)6,030,591  5,388,243  5,701,083 
Tangible Stockholders' Equity to Tangible Assets9.13% 7.50% 9.58%

 

  
Contact:Mark A. Severson
 Investor Relations
 707-921-3655
 investorrelations@lbsavings.com