8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 27, 2016

Park Sterling Corporation

(Exact name of registrant as specified in its charter)

North Carolina	001-35032	27-4107242
(State or other jurisdiction	(Commission File	(IRS Employer
of incorporation)	Number)	Identification No.)

1043 E. Morehead Street, Suite 201, Charlotte, NC	28204
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (704) 716-2134

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 28, 2016, Park Sterling Corporation (“Park Sterling”) announced its financial results for the first quarter ended March 31, 2016.  A copy of the related press release is furnished as Exhibit 99.1. The information included herein, as well as Exhibit 99.1 referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in filings under the Securities Act of 1933, as amended (the “Securities Act”).

Item 7.01. Regulation FD Disclosure.

On April 28, 2016, Park Sterling will hold an investor conference call to disclose its financial results for the first quarter ended March 31, 2016. A copy of the slide package prepared for use by executive management for this presentation is furnished as Exhibit 99.2. All of the information in the presentation is presented as of April 28, 2016, and Park Sterling does not assume any obligation to update such information in the future.

The information included in the preceding paragraph, as well as Exhibit 99.2 referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act nor shall it be deemed incorporated by reference in filings under the Securities Act.

Item 8.01. Other Events.

Dividend

On April 27, 2016, Park Sterling issued a press release announcing that its board of directors (“Board”) declared a quarterly cash dividend to its common shareholders of $0.03 per common share, payable on May 24, 2016 to all common shareholders of record as of the close of business on May 10, 2016. Future dividends will be subject to Board approval. A copy of the press release is attached as Exhibit 99.3 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Exhibit Description
99.1	Press Release, dated April 28, 2016, with respect to Park Sterling’s financial results for the first quarter ended March 31, 2016
99.2	Slide Package prepared for use in connection with Park Sterling’s conference call to be held on April 28, 2016
99.3	Press Release, dated April 27, 2016, with respect to declaration of dividend

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 28, 2016

PARK STERLING CORPORATION
By:	/s/ Donald K. Truslow
	Donald K. Truslow Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Press Release, dated April 28, 2016, with respect to Park Sterling’s financial results for the first quarter ended March 31, 2016
99.2	Slide Package prepared for use in connection with Park Sterling’s conference call to be held on April 28, 2016
99.3	Press Release, dated April 27, 2016, with respect to declaration of dividend

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EX-99.1

Exhibit 99.1

 

Park Sterling Corporation Announces

Results for First Quarter 2016

Charlotte, NC – April 28, 2016 – Park Sterling Corporation (NASDAQ: PSTB), the holding company for Park Sterling Bank, today released unaudited results of operations and other financial information for the first quarter of 2016. Highlights at and for the three months ended March 31, 2016 include:

Three Month Highlights

● Net income of $2.7 million, or $0.05 per share, compared to $3.8 million, or $0.09 per share, in the quarter ended December 31, 2015

● Adjusted net income, which excludes merger-related expenses and gain or loss on sale of securities, increased $1.4 million (29%) to a record $6.2 million, or $0.12 per share, compared to $4.8 million, or $0.11 per share, in the prior quarter

● Adjusted operating expenses to adjusted operating revenues fell to 65.44% in the quarter from 67.84% in the fourth quarter of 2015 due to the impact of First Capital and continued disciplined expense management

● Loan growth, after the addition of First Capital and excluding loans held for sale, of $37.1 million, or 7% annualized growth rate

● Nonperforming loans to total loans decreased 5 basis points to 0.42% from 0.47% at December 31, 2015

● Nonperforming assets to total assets decreased 10 basis points to 0.44% from 0.54% at December 31, 2015

● Tier 1 leverage ratio remained strong at 9.76% compared to 11.00% at December 31, 2015

● Completed merger with First Capital Bancorp, Inc.

● Declared quarterly cash dividend on common shares of $0.03 per share (April 2016)

“We are delighted to report strong operating results for the first quarter of 2016,” said James C. Cherry, Chief Executive Officer. “For the quarter, we achieved higher profitability driven by steady loan growth, stable core margins, and increasing operating efficiency. Our financial condition continues to be solid as asset quality remains superior and both capital and liquidity levels continue to be strong. For the three months ended March 31, 2016, we reported record adjusted net income of $6.2 million, or $0.12 per share, an increase of $1.4 million compared to adjusted net income of $4.8 million, or $0.11 per share, reported in the prior quarter. The adjusted return on average assets was 0.79%, an increase from 0.66% in the first quarter of 2015 and 0.77% in the fourth quarter of 2015. The ratio of adjusted operating expense, which excludes merger-related expenses and amortization of intangibles, to adjusted operating revenue, which excludes gains or losses on sale of securities, improved 240 basis points to 65.44% for the first quarter, compared to the prior quarter. The company posted 7% annualized organic loan growth, led by continued strong performance in our metropolitan markets. Asset quality remained strong, as nonperforming loans to total loans were 0.42% and nonperforming assets to total assets were 0.44% at March 31, 2016. Finally, capitalization also remained strong with total common equity to total assets at 11.08%, tangible common equity to tangible assets at 8.87% and Tier 1 leverage ratio at 9.76%.

We were very excited to complete our merger with First Capital Bancorp, Inc. on January 1, 2016, which included re-branding each of the eight new branches. Park Sterling is now even better positioned to compete in the attractive Richmond market given our strong local leadership team, experienced bankers, distinctive product capabilities, strong balance sheet and attractive branch network. The combined company today has approximately $3.2 billion in total assets and 57 banking offices across Virginia, the Carolinas and North Georgia, and benefits from having almost 88% of total deposits based in markets with projected population growth rates above the national average as reported by SNL.

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On the capital management front, yesterday the board declared a quarterly dividend of $0.03 per common share, payable on May 24, 2016 to all shareholders of record as of the close of business on May 10, 2016. Future dividends will be subject to board approval. Additionally, during the first quarter we repurchased approximately 98,000 shares under our previously announced 2.2 million share repurchase program.

Overall, we are pleased to report these strong results as Park Sterling continues the commitment to build a full-service regional community bank.”

Financial Results

Income Statement – Three Months Ended March 31, 2016

Park Sterling reported net income of $2.7 million, or $0.05 per share, for the three months ended March 31, 2016 (“2016Q1”). This compares to net income of $3.8 million, or $0.09 per share, for the three months ended December 31, 2015 (“2015Q4”) and net income of $3.8 million, or $0.09 per share, for the three months ended March 31, 2015 (“2015Q1”). The decrease in net income from 2015Q4 and 2015Q1 resulted primarily from $5.2 million in merger-related costs, included in which is $3.9 million of termination costs of First Capital’s core processing contract. This increase in expenses was partially offset by an increase in net interest income and noninterest income associated with the merger of First Capital.

Park Sterling reported adjusted net income, which excludes merger-related expenses and gain or loss on sale of securities, of $6.2 million, or $0.12 per share, in 2016Q1. This compares to adjusted net income of $4.8 million, or $0.11 per share, in 2015Q4 and adjusted net income of $3.9 million, or $0.09 per share, in 2015Q1. Compared to 2015Q4 and 2015Q1, adjusted net income reflects higher net interest income and higher noninterest income partially offset by higher noninterest expense, much of which is associated with the merger with First Capital and organic loan growth.

Net interest income totaled $26.6 million in 2016Q1, which represents a $6.6 million, or 33%, increase from $20.0 million in 2015Q4 and a $6.2 million, or 30%, increase from $20.4 million in 2015Q1. Average total earning assets increased $581.3 million, or 26%, in 2016Q1 to $2.83 billion, compared to $2.25 billion in 2015Q4 and increased $677.7 million, or 31%, compared to $2.16 billion in 2015Q1. The increase in average total earning assets in 2016Q1 from 2015Q4 included an increase in average loans (including loans held for sale) of $568.9 million, or 33%, and an increase in average other earning assets of $11.1 million, or 25%, each as a result of the acquisition of First Capital. The increase in average total earning assets in 2016Q1 from 2015Q1 resulted primarily from a $672.3 million, or 42%, increase in average loans (including loans held for sale) as a result of organic growth and the acquisition of First Capital and a $10.6 million, or 2%, increase in average marketable securities, offset by a $5.3 million, or 9%, decrease in average other earning assets.

Net interest margin was 3.78% in 2016Q1, representing a 26 basis point increase from 3.52% in 2015Q4 and a 6 basis point decrease from 3.84% in 2015Q1. The increase in net interest margin from 2015Q4 resulted primarily from a 32 basis point increase in yield on loans to 4.80%, driven by the recognition of the acquired performing fair value mark related to the acquisition of First Capital loans, strong fee income and the addition of higher yielding loans from First Capital. Offsetting the increase in yield on average earning assets, the cost of interest-bearing liabilities increased 12 basis points to 0.63%, driven by a full quarter of interest related to the $30.0 million senior unsecured term loan incurred in December 2015 and an increase in the cost of wholesale funding following the Federal Reserves’ action to raise short-term interest rates. The reduction in net interest margin from 2015Q1 resulted primarily from a 4 basis point decrease in yield on loans, due primarily to lower interest rates on new loans partially offset by the recognition of the acquired performing fair value mark related to First Capital and a 22 basis point increase in the cost of interest-bearing liabilities.

The company reported $556,000 of provision expense in 2016Q1 to support organic loan growth, compared to $409,000 of provision recorded in 2015Q4, and a provision of $180,000 in 2015Q1. Allowance for loan loss levels decreased to 0.43% of total loans at 2016Q1 compared to 0.52% at 2015Q4 due to the addition of First Capital loans for which no allowance was booked in accordance with purchase accounting standards.

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Noninterest income increased $204,000, or 5%, to $4.7 million in 2016Q1, compared to $4.5 million in 2015Q4 and increased $226,000, or 5%, compared to $4.5 million in 2015Q1. The increase from 2015Q4 was driven primarily by a $617,000, or 166%, increase in BOLI income due in part to death benefits received in 2016Q1 ($402,000 in 2016Q1, $0 in 2015Q4 and $272,000 in 2015Q1). Other increases include a $50,000, or 3%, increase in service charges on deposit accounts and a $76,000, or 11%, increase in mortgage banking income. Partially offsetting these increases was (i) an $84,000, or 9%, decrease in income from wealth management activities due to a decrease in assets under management for the period; (ii) a $369,000, or 84%, decrease in income from capital market activities due to fewer transactions and a higher credit valuation adjustment and (iii) a $74,000, or 11%, decrease in ATM and card income as transactions shift from non-PIN to PIN-based when comparing 2016Q1 and 2015Q4. The increase in noninterest income from 2015Q1 reflects higher BOLI death benefits as noted above, as well as higher service charges on deposit accounts and lower amortization on the FDIC loss share indemnification asset and true-up liability expense, offset partially by lower income from capital market activities and wealth management activities and lower mortgage banking income.

Noninterest expenses increased $7.8 million, or 42%, to $26.2 million in 2016Q1 compared to $18.4 million in 2015Q4, and increased $7.0 million, or 37%, compared to $19.1 million in 2015Q1. Adjusted noninterest expenses, which exclude merger-related expenses ($5.2 million in 2016Q1, $1.4 million in 2015Q4 and $122,000 in 2015Q1), increased $4.0 million, or 24%, to $21.0 million in 2016Q1 compared to $17.0 million in 2015Q4, and increased $1.9 million, or 10%, compared to $19.0 million in 2015Q1. Overall the increase in adjusted noninterest expenses from 2015Q4 was due primarily to a $2.7 million increase in salaries and compensation expense due to the addition of First Capital employees, as well as an increase in the incentive accrual in 2016Q1 as compared to 2015Q4, as the prior quarter included a year-end incentive accrual reduction. Other increases from 2015Q4 include occupancy and equipment expense, data processing expense, legal and professional fees, deposit charges and FDIC insurance expense, postage and supplies, advertising and promotion and core deposit intangibles, all of which were due primarily to the merger with First Capital. The net cost of operation of OREO also increased compared to 2015Q4, as 2016Q1 included a loss on the sale of a branch that had been transferred to OREO in 2015. The above increases were partially offset by a $157,000 decrease in loan and collection expenses and a $52,000 decrease in the loss on disposal of assets, as 2015Q4 included branch closure costs.

The company’s effective tax rate increased to 40.6% in 2016Q1, due in part to certain non-deductible merger-related expenses and adjustments made to deferred tax assets for the true-up in tax rates and re-measurement due to the First Capital merger, compared to 34.1% in 2015Q4 and 32.5% in 2015Q1.

Balance Sheet

Total assets increased $639.5 million, or 25%, to $3.2 billion at 2016Q1 compared to total assets of $2.5 billion at 2015Q4 primarily as a result of the merger with First Capital. Cash and equivalents increased $10.9 million, or 15%, to $81.2 million and total securities, including non-marketable securities, increased $11.7 million, to $514.4 million. Total loans, excluding loans held for sale, increased $537.3 million, or 31% annualized, to $2.3 billion at 2016Q1 from 2015Q4. The company’s metropolitan markets, which include Charlotte, Raleigh and Wilmington, North Carolina, Greenville and Charleston, South Carolina and Richmond, Virginia, reported a $550.3 million, or 57%, increase in total loans to $1.5 billion, due to the addition of First Capital which added $500 million in loans in the Richmond market, as well as continued success in origination efforts. The community markets reported a $13.5 million, or 4%, decrease in total loans to $349.0 million, primarily due to more limited attractive lending opportunities. The company’s central business units, which primarily include mortgage, builder finance, private banking and special assets remained flat as growth in mortgage, private banking and builder finance offset reductions in special asset loans, including covered loans.

The merger with First Capital led to a shift in loan mix at 2016Q1 compared to 2015Q4. The combination of commercial and industrial and owner-occupied real estate loans decreased from 33.2% to 31.1% of total loans and investor-owned commercial real estate loans increased from 29.1% to 31.7% of total loans. Acquisition, construction and development loans increased to 14.2% from 9.4% of total loans. Total consumer loans decreased to 22.5% from 27.7% of total loans, with home equity lines of credit decreasing to 7.8% from 9.0% of total loans, residential mortgages decreasing from 12.9% to 10.3% of total loans and other consumer (including residential construction) decreasing from 5.8% to 4.3% of total loans.

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In terms of accounting designations, compared to 2015Q4: (i) non-acquired loans, which include certain renewed and/or restructured acquired performing loans that are re-designated as non-acquired, increased $80.1 million, or 6%, to $1.5 billion; (ii) acquired performing loans increased $446.1 million, or 159%, to $726.0 million; and (iii) purchase credit impaired (“PCI”) loans increased $11.2 million, or 12%, to $106.1 million. At 2016Q1, noncovered performing acquired loans (which totaled $724.7 million) included a $6.0 million net acquisition accounting fair market value adjustment, representing a 0.82% “mark;” noncovered PCI loans (which totaled $91.2 million) included a $23.8 million adjustment, representing a 20.7% “mark;” and covered performing acquired and PCI loans (which totaled $16.3 million) included a $3.7 million adjustment, representing an 18.7% “mark.”

Total deposits increased $545.3 million, or 28%, to $2.5 billion at 2016Q1, compared to $2.0 billion at 2015Q4 due primarily to the merger with First Capital. Noninterest bearing demand deposits increased $118.2 million, or 34%, to $469.0 million (19% of total deposits). Non-brokered money market, NOW and savings deposits increased $194.9 million, or 20%, to $1.2 billion (48% of total deposits). Time deposits less than $250,000 increased $151.3 million, or 37%, to $556.7 million (22% of total deposits) and time deposits greater than $250,000 increased $48.9 million, or 69%, to $119.9 million (5% of total deposits). Finally, brokered deposits increased $32.1 million, or 25%, to $160.5 million (6% of total deposits). Core deposits, which exclude time deposits greater than $250,000 and brokered deposits, represented 88.8% of total deposits at 2016Q1 and 89.8% of total deposits at 2015Q4.

Total borrowings increased $28.8 million, or 12%, to $268.0 million at 2016Q1 compared to $239.3 million at 2015Q4. Borrowings at 2016Q1 included $205.0 million in FHLB borrowings, $30.0 million in a senior unsecured term loan at the bank holding company level, and $33.0 million of acquired trust preferred securities, net of acquisition accounting fair market value adjustments.

Total shareholders’ equity increased $64.8 million, or 23%, to $349.5 million at 2016Q1 compared to $284.7 million at 2015Q4. This increase primarily resulted from the issuance of 8,376,094 shares of common stock, valued at $61.3 million (based on the $7.32 per share closing price on the last trading day prior to consummation), as the stock component of the merger with First Capital. The company’s ratio of tangible common equity to tangible assets decreased to 8.87% at 2016Q1 from 9.93% at 2015Q4. The company’s Common Equity Tier 1 (“CET1”) ratio decreased to 10.85% at 2016Q1 compared to 12.98% at 2015Q4 due to an increase in risk weighted assets. The company’s Tier 1 leverage ratio was 9.76% at 2016Q1 compared to 11.00% at 2015Q4.

Asset Quality

Asset quality remains a point of strength for the company. Nonperforming assets were $14.0 million at 2016Q1, or 0.44% of total assets, compared to $13.7 million at 2015Q4, or 0.54% of total assets, an increase of $292,000, or 2%. Nonperforming loans were $9.6 million at 2016Q1, and represented 0.42% of total loans, compared to $8.3 million at 2015Q4, or 0.47% of total loans, an increase of $1.3 million, or 16%. The increase in nonperforming loans was due primarily to two relationships. One of the relationships totaling $1.5 million became past due during the quarter; however a sales contract for the underlying collateral is in place and full resolution is anticipated in the near future. The company reported net recoveries of $212,000, or 0.04% of average loans (annualized), in 2016Q1, compared to net charge-offs of $87,000, or 0.02% of average loans (annualized), in 2016Q1.

The allowance for loan losses increased $768,000, or 8%, to $9.8 million, or 0.43% of total loans, at 2016Q1, compared to $9.1 million, or 0.52% of total loans, at 2015Q4. The increase in allowance included (i) a $762,000, or 33%, decrease in the quantitative component, resulting from lower historic loss rates due to a net recovery in 2016Q1 and (ii) a $1.5 million or 23%, increase in the qualitative component, reflecting management’s judgment of inherent loss in the loan portfolio not represented in historic loss rates.

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During the first quarter of 2011, and as contemplated in Park Sterling Bank’s 2010 public offering, 568,260 shares of restricted stock were issued but will not vest until the company’s share price achieves certain performance thresholds above the equity offering price (these restricted shares vest one-third each when the share price reaches, for 30 consecutive days, $8.125, $9.10 and $10.40 per share, respectively). The performance thresholds of the remaining restricted shares have not yet been achieved (436,590 of these restricted shares remained outstanding at 2016Q1). Accordingly, these additional shares have been excluded from earnings and tangible book value per share calculations. As of March 31, 2016, 131,670 of these shares have either been forfeited or vested in accordance with agreements between the Company and its executive officers.

*  *  *  *  *  *  *  * 

Conference Call

A conference call will be held at 8:30 a.m., Eastern Time this morning (April 28, 2016). The conference call can be accessed by dialing (877) 512-1104 and requesting the Park Sterling Corporation earnings call. Listeners should dial in 10 minutes prior to the start of the call. The live webcast and presentation slides will be available on www.parksterlingbank.com under Investor Relations, “Investor Presentations.”

A replay of the webcast will be available on www.parksterlingbank.com under Investor Relations, “Investor Presentations” shortly following the call. A replay of the conference call can be accessed approximately one hour after the call by dialing (877) 344-7529 and requesting conference number 10083664.

About Park Sterling Corporation

Park Sterling Corporation, the holding company for Park Sterling Bank, is headquartered in Charlotte, North Carolina. Park Sterling, a regional community-focused financial services company with $3.2 billion in assets, is the largest community bank headquartered in the Charlotte area and has 57 banking offices stretching across the Carolinas and into North Georgia, as well as in Richmond, Virginia. The bank serves professionals, individuals, and small and mid-sized businesses by offering a full array of financial services, including deposit, mortgage banking, cash management, consumer and business finance, capital markets and wealth management services with a commitment to “Answers You Can Bank On^SM.” Park Sterling prides itself on being large enough to help customers achieve their financial aspirations, yet small enough to care that they do. Park Sterling is focused on building a banking franchise that is noted for sound risk management, strong community focus and exceptional customer service. For more information, visit www.parksterlingbank.com. Park Sterling Corporation shares are traded on NASDAQ under the symbol PSTB.

Non-GAAP Financial Measures

Tangible assets, tangible common equity, tangible book value, adjusted net income, adjusted net interest margin, adjusted operating revenues, adjusted noninterest income, adjusted noninterest expenses, adjusted operating expense, adjusted allowance for loan losses, and related ratios and per share measures, including adjusted return on average assets and adjusted return on average equity, as used throughout this release, are non-GAAP financial measures. For additional information, see “Reconciliation of Non-GAAP Financial Measures” in the accompanying tables.

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Cautionary Statement Regarding Forward Looking Statements

This news release contains, and Park Sterling and its management may make, certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words such as “may,” “plan,” “contemplate,” “anticipate,” “believe,” “intend,” “continue,” expect,” “project,” “predict,” “estimate,” “could,” “should,” “would,” “will,” “goal,” “target” and similar expressions. These forward-looking statements express management's current expectations or forecasts of future events, results and conditions and, by their nature, are subject to risks and uncertainties and there are a number of factors that could cause actual results to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: synergies and other financial benefits from the merger with First Capital Bancorp, Inc. (“First Capital”) may not be realized within the expected time frames; costs or difficulties related to integration matters might be greater than expected; changes in loan mix, deposit mix, capital and liquidity levels, emerging regulatory expectations and measures, net interest income, noninterest income, noninterest expense, credit trends and conditions, including loan losses, allowance for loan loss, charge-offs, delinquency trends and nonperforming asset levels, deterioration in the credit quality of the loan portfolio or the value of collateral securing loans, deterioration in the value of securities held for investment, the impacts of a potential increasing rate environment, and other similar matters; inability to identify and successfully negotiate and complete additional combinations with other potential merger partners or to successfully integrate such businesses into Park Sterling, including the company’s ability to adequately estimate or to realize the benefits and cost savings from and limit any unexpected liabilities acquired as a result of any such business combinations; failure to generate an adequate return on investment related to new branches or other hiring initiatives; inability to generate future organic growth in loan balances, retail banking, wealth management, mortgage banking or capital markets results through the hiring of new personnel, development of new products, including new online and mobile banking platforms for treasury services, opening of de novo branches or otherwise; inability to capitalize on identified revenue enhancements or expense management opportunities, including the inability to achieve or maintain adjusted operating expense to adjusted operating revenue targets; inability to generate future ATM and card income from marketing expenses; variability in the performance of covered loans and associated loss-share related expenses; the effects of negative or soft economic conditions, including stress in the commercial real estate markets or failure of continued recovery in the residential real estate markets; changes in consumer and investor confidence and the related impact on financial markets and institutions; the possibility of recognizing other than temporary impairments on holdings of collateralized loan obligation securities as a result of the Volcker Rule; the potential impacts of any government shutdown or debt ceiling impasse, including the risk of a U.S. credit rating downgrade or default, or continued global economic instability, which could cause disruptions in the financial markets, impact interest rates, and cause other potential unforeseen consequences; fluctuations in the market price of the common stock, regulatory, legal and contractual requirements, other uses of capital, financial performance, market conditions generally, and future actions by the board of directors, in each case impacting repurchases of common stock or declaration of dividends; legal and regulatory developments, including changes in the federal risk-based capital rules; increased competition from both banks and nonbanks; changes in accounting standards, rules and interpretations, inaccurate estimates or assumptions in accounting, including acquisition accounting fair market value assumptions and accounting for purchased credit-impaired loans, and the impact on Park Sterling’s financial statements; and management’s ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk.

You should not place undue reliance on any forward-looking statement and should consider all of the preceding uncertainties and risks, as well as those more fully discussed in any of Park Sterling’s filings with the SEC. Forward-looking statements speak only as of the date they are made, and Park Sterling undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

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For additional information contact:

Donald K. Truslow

Chief Financial Officer

(704) 716-2134

don.truslow@parksterlingbank.com

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PARK STERLING CORPORATION

CONDENSED CONSOLIDATED INCOME STATEMENT

THREE MONTH RESULTS

($ in thousands, except per share amounts)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest income
Loans, including fees	$	27,124		$	19,284		$	19,475		$	19,667		$	19,111
Taxable investment securities		2,687			2,677			2,636			2,508			2,791
Tax-exempt investment securities		147			146			152			143			138
Nonmarketable equity securities		154			109			142			122			127
Interest on deposits at banks		42			22			23			18			18
Federal funds sold		8			1			1			-			-
Total interest income		30,162			22,239			22,429			22,458			22,185
Interest expense
Money market, NOW and savings deposits		1,017			743			654			532			520
Time deposits		1,398			903			841			752			707
Short-term borrowings		294			205			90			76			76
Long-term debt		410			55			134			131			128
Subordinated debt		446			358			348			351			328
Total interest expense		3,565			2,264			2,067			1,842			1,759
Net interest income		26,597			19,975			20,362			20,616			20,426
Provision for loan losses		556			409			-			134			180
Net interest income after provision		26,041			19,566			20,362			20,482			20,246
Noninterest income
Service charges on deposit accounts		1,489			1,439			1,370			1,107			1,019
Mortgage banking income		775			699			700			956			951
Income from wealth management activities		803			887			947			906			862
Income from capital market activities		68			437			238			394			398
ATM and card income		573			647			537			629			694
Income from bank-owned life insurance		988			371			1,058			553			768
Gain (loss) on sale of securities available for sale		(6	)		-			54			-			-
Amortization of indemnification asset and true-up liability expense		(147	)		(165	)		(162	)		(165	)		(394	)
Other noninterest income		184			208			185			(88	)		203
Total noninterest income		4,727			4,523			4,927			4,292			4,501
Noninterest expenses
Salaries and employee benefits		13,018			9,541			9,952			10,021			10,431
Occupancy and equipment		3,125			2,680			2,591			2,491			2,555
Data processing and outside service fees		5,523			1,669			1,668			1,640			1,648
Legal and professional fees		725			1,471			472			660			798
Deposit charges and FDIC insurance		432			413			401			433			392
Loss on disposal of fixed assets		44			50			597			113			237
Communication fees		483			480			501			541			578
Postage and supplies		173			99			123			116			149
Loan and collection expense		37			194			151			242			154
Core deposit intangible amortization		458			347			347			347			347
Advertising and promotion		421			271			313			304			374
Net cost of operation of other real estate owned		266			(23	)		163			232			35
Other noninterest expense		1,448			1,170			1,140			1,092			1,441
Total noninterest expenses		26,153			18,362			18,419			18,232			19,139
Income before income taxes		4,615			5,727			6,870			6,542			5,608
Income tax expense		1,874			1,952			2,092			2,273			1,825
Net income	$	2,741		$	3,775		$	4,778		$	4,269		$	3,783
Earnings per common share, fully diluted	$	0.05		$	0.09		$	0.11		$	0.10		$	0.09
Weighted average diluted common shares		52,599,584			44,322,428			44,287,019			44,301,895			44,326,833

7

PARK STERLING CORPORATION                     

CONDENSED CONSOLIDATED BALANCE SHEETS                     

($ in thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015*			2015			2015			2015**
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Cash and due from banks	$	34,038		$	53,840		$	16,096		$	17,042		$	17,402
Interest-earning balances at banks		47,143			16,451			41,230			26,940			45,396
Investment securities available for sale		396,863			384,934			401,820			402,489			382,946
Investment securities held to maturity		104,459			106,458			109,072			111,633			108,918
Nonmarketable equity securities		13,118			11,366			11,377			13,500			11,163
Federal funds sold		11,271			235			920			360			325
Loans held for sale		7,593			4,943			5,145			10,701			9,987
Loans - Non-covered		2,262,294			1,724,164			1,681,227			1,637,115			1,576,760
Loans - Covered		16,849			17,651			18,897			20,348			38,092
Allowance for loan losses		(9,832	)		(9,064	)		(8,742	)		(8,468	)		(8,590	)
Net loans		2,269,311			1,732,751			1,691,382			1,648,995			1,606,262
Premises and equipment, net		65,494			55,658			56,948			58,979			58,796
FDIC receivable for loss share agreements		1,477			943			1,190			1,209			2,333
Other real estate owned - non-covered		3,425			4,211			7,087			8,904			8,570
Other real estate owned - covered		985			1,240			1,056			884			1,713
Bank-owned life insurance		69,202			58,633			58,286			57,823			57,494
Deferred tax asset		30,088			28,971			29,711			32,137			33,314
Goodwill		63,707			29,197			29,197			29,197			29,197
Core deposit intangible		12,813			9,571			9,918			10,265			10,612
Other assets		22,750			14,862			14,699			12,822			13,436
Total assets	$	3,153,737		$	2,514,264		$	2,485,134		$	2,443,880		$	2,397,864
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand noninterest-bearing	$	469,046		$	350,836		$	370,815		$	347,162		$	341,488
Money market, NOW and savings		1,255,848			1,062,046			1,041,502			988,847			1,008,743
Time deposits		773,089			539,780			534,541			538,932			533,906
Total deposits		2,497,983			1,952,662			1,946,858			1,874,941			1,884,137
Short-term borrowings		170,000			185,000			130,000			180,000			125,000
Long-term debt		65,000			30,000			55,000			55,000			55,000
Subordinated debt		33,014			24,262			24,092			23,922			23,752
Accrued expenses and other liabilities		38,229			37,636			44,979			30,274			30,857
Total liabilities		2,804,226			2,229,560			2,200,929			2,164,137			2,118,746
Shareholders' equity:
Common stock		53,038			44,854			44,909			44,911			44,877
Additional paid-in capital		274,706			222,596			222,587			222,271			223,139
Retained earnings		21,263			20,117			17,692			14,261			11,338
Accumulated other comprehensive income (loss)		504			(2,863	)		(983	)		(1,700	)		(236	)
Total shareholders' equity		349,511			284,704			284,205			279,743			279,118
Total liabilities and shareholders' equity	$	3,153,737		$	2,514,264		$	2,485,134		$	2,443,880		$	2,397,864
Common shares issued and outstanding		53,038,020			44,854,509			44,909,447			44,910,686			44,877,194

*	Derived from audited financial statements.
**	Revised to reflect measurement period adjustments to goodwill.

8

PARK STERLING CORPORATION

SUMMARY OF LOAN PORTFOLIO

($ in thousands)

	March 31,		December 31,		September 30,		June 30,		March 31,
	2016		2015*		2015		2015		2015
BY LOAN TYPE	(Unaudited)				(Unaudited)		(Unaudited)		(Unaudited)
Commercial:
Commercial and industrial	$	334,027	$	246,907	$	211,741	$	189,356	$	186,295
Commercial real estate (CRE) - owner-occupied		374,428		331,222		328,327		330,853		337,739
CRE - investor income producing		723,539		506,110		514,118		498,190		470,555
Acquisition, construction and development (AC&D) - 1-4 Family Construction		97,614		32,262		27,299		31,500		28,650
AC&D - Lots and land		88,492		44,411		47,948		48,680		50,372
AC&D - CRE construction		136,561		87,452		85,643		86,570		84,116
Other commercial		10,167		8,601		8,830		7,212		5,931
Total commercial loans		1,764,828		1,256,965		1,223,906		1,192,361		1,163,658
Consumer:
Residential mortgage		235,737		223,884		224,110		214,850		209,384
Home equity lines of credit		177,594		157,378		157,430		156,960		154,415
Residential construction		71,117		72,170		66,823		62,973		59,233
Other loans to individuals		27,245		28,817		24,896		27,696		25,845
Total consumer loans		511,693		482,249		473,259		462,479		448,877
Total loans		2,276,521		1,739,214		1,697,165		1,654,840		1,612,535
Deferred costs (fees)		2,622		2,601		2,959		2,623		2,317
Total loans, net of deferred costs (fees)	$	2,279,143	$	1,741,815	$	1,700,124	$	1,657,463	$	1,614,852

* Derived from audited financial statements.

	March 31,		December 31,		September 30,		June 30,		March 31,
	2016		2015*		2015		2015		2015
BY ACQUIRED AND NON-ACQUIRED	(Unaudited)				(Unaudited)		(Unaudited)		(Unaudited)
Acquired loans - performing	$	726,025	$	279,949	$	300,102	$	317,394	$	341,078
Acquired loans - purchase credit impaired		106,105		94,917		102,537		112,819		119,943
Total acquired loans		832,130		374,866		402,639		430,213		461,021
Non-acquired loans, net of deferred costs (fees)**		1,447,013		1,366,949		1,297,485		1,227,250		1,153,831
Total loans	$	2,279,143	$	1,741,815	$	1,700,124	$	1,657,463	$	1,614,852

*	Derived from audited financial statements.
**	Includes loans transferred from acquired pools following release of acquisition accounting FMV adjustments.

PARK STERLING CORPORATION

ALLOWANCE FOR LOAN LOSSES

THREE MONTH RESULTS

($ in thousands)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Beginning of period allowance	$	9,064		$	8,742		$	8,468		$	8,590		$	8,262
Loans charged-off		(82	)		(237	)		(121	)		(572	)		(265	)
Recoveries of loans charged-off		294			150			415			245			413
Net charge-offs		212			(87	)		294			(327	)		148
Provision expense		556			409			-			205			180
Benefit attributable to FDIC loss share agreements		-			-			-			(71	)		-
Total provision expense charged to operations		556			409			-			134			180
Provision expense recorded through FDIC loss share receivable		-			-			(20	)		71			-
End of period allowance	$	9,832		$	9,064		$	8,742		$	8,468		$	8,590
Net charge-offs (recoveries)	$	(212	)	$	87		$	(294	)	$	327		$	(148	)
Net charge-offs (recoveries) to average loans (annualized)		-0.04	%		0.02	%		-0.07	%		0.08	%		-0.04	%

9

PARK STERLING CORPORATION

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS

THREE MONTHS

($ in thousands)

	March 31, 2016								March 31, 2015
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate (3)			Balance			Expense		Rate (3)
Assets
Interest-earning assets:
Loans and loans held for sale, net (1)(2)	$	2,274,824		$	27,124		4.80	%	$	1,602,483		$	19,111		4.84	%
Fed funds sold		6,895			8		0.47	%		460			-		0.00	%
Taxable investment securities		487,154			2,687		2.21	%		479,731			2,791		2.33	%
Tax-exempt investment securities		16,047			147		3.66	%		12,851			138		4.30	%
Other interest-earning assets		48,772			196		1.62	%		60,470			145		0.97	%
Total interest-earning assets		2,833,692			30,162		4.28	%		2,155,995			22,185		4.17	%
Allowance for loan losses		(9,864	)							(8,369	)
Cash and due from banks		36,758								16,937
Premises and equipment		66,514								59,350
Goodwill		62,055								29,240
Intangible assets		12,718								10,778
Other assets		130,752								119,575
Total assets	$	3,132,625							$	2,383,506
Liabilities and shareholders' equity
Interest-bearing liabilities:
Interest-bearing demand	$	426,795		$	85		0.08	%	$	407,900		$	67		0.07	%
Savings and money market		733,301			831		0.46	%		517,344			395		0.31	%
Time deposits - core		710,289			1,219		0.69	%		461,304			588		0.52	%
Brokered deposits		126,824			280		0.89	%		140,563			177		0.51	%
Total interest-bearing deposits		1,997,209			2,415		0.49	%		1,527,111			1,227		0.33	%
Short-term borrowings		191,701			294		0.62	%		151,222			76		0.20	%
Long-term debt		65,824			410		2.51	%		52,889			128		0.98	%
Subordinated debt		32,930			446		5.45	%		23,664			328		5.62	%
Total borrowed funds		290,455			1,150		1.59	%		227,775			532		0.95	%
Total interest-bearing liabilities		2,287,664			3,565		0.63	%		1,754,886			1,759		0.41	%
Net interest rate spread					26,597		3.65	%					20,426		3.77	%
Noninterest-bearing demand deposits		456,457								319,414
Other liabilities		39,948								31,019
Shareholders' equity		348,556								278,187
Total liabilities and shareholders' equity	$	3,132,625							$	2,383,506
Net interest margin							3.78	%							3.84	%

(1)	Nonaccrual loans are included in the average loan balances.
(2)	Interest income and yields for the three months ended March 31, 2016 and 2015 include accretion from acquisition accounting adjustments associated with acquired loans.
(3)	Yield/ rate calculated on Actual/Actual day count basis, except for yield on investments which is calculated on a 30/360 day count basis.

10

PARK STERLING CORPORATION

SELECTED RATIOS

($ in thousands, except per share amounts)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
	Unaudited			Unaudited			Unaudited			Unaudited			Unaudited
ASSET QUALITY
Nonaccrual loans	$	6,595		$	4,326		$	5,342		$	5,545		$	6,397
Troubled debt restructuring (and still accruing)		2,696			2,774			3,090			3,115			3,273
Past due 90 days plus (and still accruing)		293			1,151			47			-			10
Nonperforming loans		9,584			8,251			8,479			8,660			9,680
OREO		4,410			5,451			8,143			9,788			10,283
Nonperforming assets		13,994			13,702			16,622			18,448			19,963
Past due 30-59 days (and still accruing)		217			1,222			1,790			2,559			1,285
Past due 60-89 days (and still accruing)		499			1,340			3,753			481			457
Nonperforming loans to total loans		0.42	%		0.47	%		0.50	%		0.52	%		0.60	%
Nonperforming assets to total assets		0.44	%		0.54	%		0.67	%		0.75	%		0.83	%
Allowance to total loans		0.43	%		0.52	%		0.51	%		0.51	%		0.53	%
Allowance to nonperforming loans		102.59	%		109.85	%		103.10	%		97.78	%		88.74	%
Allowance to nonperforming assets		70.26	%		66.15	%		52.59	%		45.90	%		43.03	%
Past due 30-89 days (accruing) to total loans		0.03	%		0.15	%		0.33	%		0.18	%		0.11	%
Net charge-offs (recoveries) to average loans (annualized)		-0.04	%		0.02	%		-0.07	%		0.08	%		-0.04	%
CAPITAL
Book value per common share	$	6.69		$	6.49		$	6.47		$	6.37		$	6.34
Tangible book value per common share**	$	5.22		$	5.60		$	5.58		$	5.47		$	5.44
Common shares outstanding		53,038,020			44,854,509			44,909,447			44,910,686			44,877,194
Weighted average dilutive common shares outstanding		52,599,584			44,322,428			44,287,019			44,301,895			44,326,833
Common Equity Tier 1 (CET1) capital	$	275,490		$	251,807		$	249,289		$	245,328			242,197
Tier 1 capital		300,354			268,605			265,917			261,596		$	256,843
Tier 2 capital		9,832			9,064			8,742			8,577			8,836
Total risk based capital		310,186			277,669			274,659			270,173			265,679
Risk weighted assets		2,478,547			1,939,417			1,887,065			1,844,540			1,707,551
Average assets for leverage ratio		3,076,505			2,441,811			2,434,376			2,359,401			2,334,285
Common Equity Tier 1 (CET1) ratio		11.11	%		12.98	%		13.21	%		13.30	%		n/a
Tier 1 ratio		12.12	%		13.85	%		14.09	%		14.18	%		15.04	%
Total risk based capital ratio		12.51	%		14.32	%		14.55	%		14.65	%		15.56	%
Tier 1 leverage ratio		9.76	%		11.00	%		10.92	%		11.09	%		11.00	%
Tangible common equity to tangible assets**		8.87	%		9.93	%		10.02	%		9.99	%		10.15	%
LIQUIDITY
Net loans to total deposits		90.85	%		88.74	%		86.88	%		87.95	%		85.25	%
Reliance on wholesale funding		15.50	%		16.77	%		16.02	%		18.45	%		16.55	%
INCOME STATEMENT (THREE MONTH RESULTS; ANNUALIZED)
Return on Average Assets		0.35	%		0.60	%		0.77	%		0.71	%		0.64	%
Return on Average Common Equity		3.16	%		5.26	%		6.71	%		6.10	%		5.52	%
Net interest margin (non-tax equivalent)		3.78	%		3.52	%		3.58	%		3.78	%		3.84	%

** Non-GAAP financial measure

11

Non-GAAP Financial Measures

Tangible assets, tangible common equity, tangible book value, adjusted net income, adjusted noninterest income, adjusted operating revenues, adjusted noninterest expense, adjusted operating expenses, adjusted allowance for loan losses, and related ratios and per share measures, including adjusted return on average assets and adjusted return on average equity, as used throughout this release, are non-GAAP financial measures. Management uses (i) tangible assets, tangible common equity and tangible book value (which exclude goodwill and other intangibles from equity and assets), and related ratios, to evaluate the adequacy of shareholders’ equity and to facilitate comparisons with peers; (ii) adjusted allowance for loan losses (which includes net FMV adjustments related to acquired loans) as supplemental information for comparing the combined allowance and fair market value adjustments to the combined acquired and non-acquired loan portfolios (fair market value adjustments are available only for losses on acquired loans); and (iii) adjusted net income and adjusted noninterest income (which exclude merger-related expenses and gain or loss on sale of securities, as applicable), adjusted noninterest expense (which excludes merger-related expenses), adjusted operating expense (which excludes merger-related expenses and amortization of intangibles) and adjusted operating revenues (which includes net interest income and noninterest income and excludes gain or loss on sale of securities, as applicable) to evaluate core earnings and to facilitate comparisons with peers.

PARK STERLING CORPORATION                     

RECONCILIATION OF NON-GAAP MEASURES                     

($ in thousands, except per share amounts)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Adjusted net income (three months)
Pretax income (as reported)	$	4,615		$	5,727		$	6,870		$	6,542		$	5,608
Plus: merger-related expenses		5,193			1,396			31			167			122
(gain) loss on sale of securities		6			-			(54	)		-			-
Adjusted pretax income		9,814			7,123			6,847			6,709			5,730
Tax expense		3,646			2,332			2,085			2,331			1,867
Adjusted net income	$	6,168		$	4,791		$	4,762		$	4,378		$	3,863
Divided by: weighted average diluted shares		52,599,584			44,322,428			44,287,019			44,301,895			44,326,833
Adjusted net income per share		0.12		$	0.11		$	0.11		$	0.10		$	0.09
Estimated tax rate for adjustment		34.09	%		32.75	%		32.56	%		34.75	%		34.23	%
Adjusted noninterest income
Noninterest income (as reported)	$	4,727		$	4,523		$	4,927		$	4,292		$	4,501
Less: (gain) loss on sale of securities		6			-			(54	)		-			-
Adjusted noninterest income	$	4,733		$	4,523		$	4,873		$	4,292		$	4,501
Adjusted noninterest expenses
Noninterest expenses (as reported)	$	26,153		$	18,362		$	18,419		$	18,232		$	19,139
Less: merger-related expenses		(5,193	)		(1,396	)		(31	)		(167	)		(122	)
Adjusted noninterest expenses	$	20,960		$	16,966		$	18,388		$	18,065		$	19,017
Adjusted operating expense
Noninterest expenses (as reported)	$	26,153		$	18,362		$	18,419		$	18,232		$	19,139
Less: merger-related expenses		(5,193	)		(1,396	)		(31	)		(167	)		(122	)
Less: amortization of intangibles		(458	)		(347	)		(347	)		(347	)		(347	)
Adjusted operating expense	$	20,502		$	16,619		$	18,041		$	17,718		$	18,670
Adjusted operating revenues
Net Interest Income (as reported)	$	26,597		$	19,975		$	20,362		$	20,616		$	20,426
Plus: noninterest income (as reported)		4,727			4,523			4,927			4,292			4,501
Less: (gain) loss on sale of securities		6			-			(54	)		-			-
Adjusted operating revenues	$	31,330		$	24,498		$	25,235		$	24,908		$	24,927
Adjusted operating expense to adjusted operating revenues
Adjusted operating expense	$	20,502		$	16,619		$	18,041		$	17,718		$	18,670
Divided by: adjusted operating revenues		31,330			24,498			25,235			24,908			24,927
Adjusted operating expense to operating revenues		65.44	%		67.84	%		71.49	%		71.13	%		74.90	%
Adjusted return on average assets
Adjusted net income	$	6,168		$	4,791		$	4,762		$	4,378		$	3,863
Divided by: average assets		3,132,625			2,480,983			2,473,034			2,406,671			2,383,506
Multiplied by: annualization factor		4.02			3.97			3.97			4.01			4.06
Adjusted return on average assets		0.79	%		0.77	%		0.76	%		0.73	%		0.66	%
Return on average assets		0.35	%		0.60	%		0.77	%		0.71	%		0.64	%

12

PARK STERLING CORPORATION

RECONCILIATION OF NON-GAAP MEASURES

($ in thousands, except per share amounts)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Adjusted return on average equity
Adjusted net income	$	6,168		$	4,791		$	4,762		$	4,378		$	3,863
Divided by: average common equity		348,556			284,671			282,426			280,676			278,187
Multiplied by: annualization factor		4.02			3.97			3.97			4.01			4.06
Adjusted return on average equity		7.12	%		6.68	%		6.69	%		6.26	%		5.63	%
Return on average equity		3.16	%		5.26	%		6.71	%		6.10	%		5.52	%
Tangible common equity to tangible assets
Total assets	$	3,153,737		$	2,514,264		$	2,485,134		$	2,443,880		$	2,397,864
Less: intangible assets		(76,520	)		(38,768	)		(39,115	)		(39,462	)		(39,809	)
Tangible assets	$	3,077,217		$	2,475,496		$	2,446,019		$	2,404,418		$	2,358,055
Total common equity	$	349,511		$	284,704		$	284,205		$	279,743		$	279,118
Less: intangible assets		(76,520	)		(38,768	)		(39,115	)		(39,462	)		(39,809	)
Tangible common equity	$	272,991		$	245,936		$	245,090		$	240,281		$	239,309
Tangible common equity	$	272,991		$	245,936		$	245,090		$	240,281		$	239,309
Divided by: tangible assets		3,077,217			2,475,496			2,446,019			2,404,418			2,358,055
Tangible common equity to tangible assets		8.87	%		9.93	%		10.02	%		9.99	%		10.15	%
Common equity to assets		11.08	%		11.32	%		11.44	%		11.45	%		11.64	%
Tangible book value per share
Issued and outstanding shares		53,038,020			44,854,509			44,909,447			44,910,686			44,877,194
Less: nondilutive restricted stock awards		(785,658	)		(959,305	)		(974,183	)		(985,531	)		(882,178	)
Period end dilutive shares		52,252,362			43,895,204			43,935,264			43,925,155			43,995,016
Tangible common equity	$	272,991		$	245,936		$	245,090		$	240,281		$	239,309
Divided by: period end dilutive shares		52,252,362			43,895,204			43,935,264			43,925,155			43,995,016
Tangible common book value per share	$	5.22		$	5.60		$	5.58		$	5.47		$	5.44
Common book value per share	$	6.69		$	6.49		$	6.47		$	6.37		$	6.34
Adjusted allowance for loan losses
Allowance for loan losses	$	9,832		$	9,064		$	8,742		$	8,468		$	8,590
Plus: acquisition accounting FMV adjustments to acquired loans		33,589			28,173			29,548			31,159			32,209
Adjusted allowance for loan losses	$	43,421		$	37,237		$	38,290		$	39,627		$	40,799
Divided by: total loans (excluding LHFS before FMV adjustments)	$	2,312,732		$	1,769,988		$	1,729,672		$	1,688,622		$	1,647,061
Adjusted allowance for loan losses to total loans		1.88	%		2.10	%		2.21	%		2.35	%		2.48	%
Allowance for loan losses to total loans		0.43	%		0.52	%		0.51	%		0.51	%		0.53	%

13

EX-99.2

Exhibit 99.2

EX-99.3

Exhibit 99.3

 

Park Sterling Corporation Announces Quarterly

Cash Dividend on Common Shares

Charlotte, NC – April 27, 2016 – Park Sterling Corporation (NASDAQ: PSTB), the holding company for Park Sterling Bank, today announced that its board of directors has declared a regular quarterly cash dividend to its common shareholders of $0.03 per common share, payable on May 24, 2016 to all shareholders of record as of the close of business on May 10, 2016. Any future dividends will be subject to board approval.

About Park Sterling Corporation

Park Sterling Corporation, the holding company for Park Sterling Bank, is headquartered in Charlotte, North Carolina. Park Sterling, a regional community-focused financial services company with approximately $3.1 billion in assets, is the largest community bank headquartered in the Charlotte area and has 57 banking offices in the Carolinas, Virginia and North Georgia. The bank serves professionals, individuals, and small and mid-sized businesses by offering a full array of financial services, including deposit, mortgage banking, cash management, consumer and business finance, capital markets and wealth management services with a commitment to “Answers You Can Bank On^®.” Park Sterling prides itself on being large enough to help customers achieve their financial aspirations, yet small enough to care that they do. Park Sterling is focused on building a banking franchise that is noted for sound risk management, strong community focus and exceptional customer service. For more information, visit www.parksterlingbank.com. Park Sterling Corporation shares are traded on NASDAQ under the symbol PSTB.

Forward-Looking Statements

This press release contains statements about future dividends that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and are subject to a number of factors that could cause actual events to differ materially from those anticipated, including without limitation future results of operations and financial condition, approval of the declaration of any quarterly dividend by Park Sterling’s Board of Directors and the precautionary statements included in Park Sterling’s filings with the SEC, including without limitation the “Risk Factors” section of its Form 10-K. Park Sterling undertakes no obligation to update publicly any forward-looking statements.

###

For additional information contact:

Donald K. Truslow

Chief Financial Officer

(704) 716-2134

don.truslow@parksterlingbank.com