cade-10q_20170331.htm

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer”, “ large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

	March 31, 2017			December 31, 2016
(In thousands, except share data)	(unaudited)
ASSETS
Cash and due from banks	$	56,406		$	48,017
Interest-bearing deposits with banks		257,304			199,747
Federal funds sold		2,452			1,161
Total cash and cash equivalents		316,162			248,925
Securities available-for-sale		1,116,280			1,139,347
Securities held-to-maturity (estimated fair value of $461 and $463 at March 31, 2017 and December 31, 2016, respectively)		425			425
Other securities - FRB and FHLB stock		57,398			41,493
Loans held for sale		43,381			17,822
Loans		7,561,472			7,432,711
Less: allowance for credit losses		(88,304	)		(82,268	)
Net loans		7,473,168			7,350,443
Interest receivable		38,327			39,889
Premises and equipment, net		65,794			66,676
Other real estate owned		21,072			18,875
Cash surrender value of life insurance		105,960			105,834
Net deferred tax asset		82,041			83,662
Goodwill		317,817			317,817
Other intangible assets, net		13,633			14,874
Other assets		69,479			84,806
Total Assets	$	9,720,937		$	9,530,888
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Noninterest-bearing deposits	$	1,871,514		$	1,840,955
Interest-bearing deposits		5,970,196			6,175,794
Total deposits		7,841,710			8,016,749
Securities sold under agreements to repurchase		3,571			3,494
Federal Home Loan Bank advances		360,000			—
Senior debt		184,380			193,788
Subordinated debt		98,506			98,441
Junior subordinated debentures		36,111			35,989
Other liabilities		90,683			101,929
Total liabilities		8,614,961			8,450,390
Shareholders' Equity:
Common Stock $0.01 par value, authorized 300,000,000 shares; 75,000,000 shares issued and outstanding at March 31, 2017 and December 31, 2016		750			750
Additional paid-in capital		880,154			879,665
Retained earnings		258,731			232,614
Accumulated other comprehensive loss ("OCI")		(33,659	)		(32,531	)
Total shareholders' equity		1,105,976			1,080,498
Total Liabilities and Shareholders' Equity	$	9,720,937		$	9,530,888

See accompanying notes to the unaudited condensed consolidated financial statements.

	Three Months Ended March 31,
(In thousands, except per share data)	2017		2016
INTEREST INCOME
Interest and fees on loans	$	80,810	$	73,761
Interest and dividends on securities:
Taxable		4,301		4,385
Tax-exempt		3,414		1,285
Other interest income		1,094		1,176
Total interest income		89,619		80,607
INTEREST EXPENSE
Interest on time deposits of $100,000 or greater		2,401		2,212
Interest on other deposits		7,364		5,994
Interest on borrowed funds		5,096		5,135
Total interest expense		14,861		13,341
Net interest income		74,758		67,266
Provision for credit losses		5,786		10,472
Net interest income after provision for credit losses		68,972		56,794
NONINTEREST INCOME
Service charges on deposit accounts		3,815		3,354
Other service fees		972		650
Credit related fees		2,747		2,674
Trust services revenue		5,231		4,070
Mortgage banking income		866		1,084
Investment advisory revenue		4,916		4,604
Securities gains, net		81		64
Other income		5,477		3,646
Total noninterest income		24,105		20,146
NONINTEREST EXPENSE
Salaries and employee benefits		34,267		32,810
Premises and equipment		6,693		6,751
Intangible asset amortization		1,241		1,711
Other expense		12,120		12,770
Total noninterest expense		54,321		54,042
Income before income taxes		38,756		22,898
Income tax expense		12,639		7,557
Net income	$	26,117	$	15,341
Weighted average common shares outstanding (Basic)		75,000,000		75,000,000
Weighted average common shares outstanding (Diluted)		75,672,750		75,258,375
Earnings per common share (Basic)	$	0.35	$	0.20
Earnings per common share (Diluted)	$	0.35	$	0.20

See accompanying notes to the unaudited condensed consolidated financial statements.

	Three Months Ended March 31,
(In thousands)	2017			2016
Net income	$	26,117		$	15,341
Other comprehensive (loss) income, net of tax:
Net unrealized gains on securities available-for-sale:
Unrealized gains arising during the period (net of $(644), and $(3,786) tax effect, respectively)		1,112			6,485
Reclassification adjustments for (gains) realized in net income (net of $30, and $24 tax effect, respectively)		(51	)		(40	)
Net unrealized gains on securities available-for-sale		1,061			6,445
Net unrealized (losses) gains on derivative instruments designated as cash flow hedges:
Unrealized (losses) gains arising during the period (net of $580 and $(6,204) tax effect, respectively)		(1,010	)		10,626
Reclassification adjustments for (gains) realized in net income (net of $688 and $655 tax effect, respectively)		(1,179	)		(1,121	)
Net change in unrealized (losses) gains on derivative instruments		(2,189	)		9,505
Other comprehensive (loss) income		(1,128	)		15,950
Comprehensive income	$	24,989		$	31,291

See accompanying notes to the unaudited condensed consolidated financial statements.

(In thousands)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated OCI			Total Shareholders' Equity
Balance, December 31, 2016	$	750	$	879,665	$	232,614	$	(32,531	)	$	1,080,498
Equity-based compensation cost		—		489		—		—			489
Net income		—		—		26,117		—			26,117
Other comprehensive loss		—		—		—		(1,128	)		(1,128	)
Balance, March 31, 2017	$	750	$	880,154	$	258,731	$	(33,659	)	$	1,105,976

See accompanying notes to the unaudited condensed consolidated financial statements.

	Three Months Ended March 31,
(In thousands)	2017			2016
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	62,510		$	30,355
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available-for-sale		(101,087	)		(332,983	)
Proceeds from sales of securities available-for-sale		84,696			2,086
Proceeds from maturities, calls and paydowns of securities available-for-sale		22,939			27,548
Proceeds from sale of commercial loans held for sale		9,925			19,295
Increase in loans, net		(171,010	)		(129,310	)
Purchase of premises and equipment		(937	)		(1,490	)
Proceeds from disposition of foreclosed property		1,295			5,682
Other, net		(16,542	)		8,564
Net cash used in investing activities		(170,721	)		(400,608	)
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in deposits, net		(175,029	)		381,420
Net change in securities sold under agreements to repurchase		77			(360	)
Net change in short-term FHLB advances		360,000			(220,000	)
Purchase of senior debt		(9,600	)		—
Net cash provided by financing activities		175,448			161,060
Net increase (decrease) in cash and cash equivalents		67,237			(209,193	)
Cash and cash equivalents at beginning of period		248,925			467,207
Cash and cash equivalents at end of period	$	316,162		$	258,014

See accompanying notes to the unaudited condensed consolidated financial statements.

Cadence Bancorporation (the “Company”) is a Delaware corporation and a bank holding company whose primary asset is its investment in its wholly owned subsidiary bank, Cadence Bank, N.A., a national banking association (the “Bank”). In July 2015, Cadence Financial Corporation was merged with and into Cadence Bancorporation, with Cadence Bancorporation surviving the merger as a wholly owned subsidiary of Cadence Bancorp, LLC, a Delaware limited liability company. For all periods prior to the completion of the merger, references to the “Company” refer to Cadence Financial Corporation, a Mississippi corporation, and its consolidated subsidiaries.

The accompanying unaudited condensed consolidated financial statements for the Company have been prepared in accordance with instructions to the SEC Form 10-Q and Article 10 of Regulation S-X; therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, comprehensive income, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the periods covered by this report have been included. These interim financial statements should be read in conjunction with the audited consolidated financial statements and footnote disclosures for the Company previously filed with the SEC in the Company’s prospectus filed with the Securities and Exchange Commission on April 14, 2017 pursuant to Rule 424(b) of the Securities Act. Operating results for the period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

The Company and its subsidiaries follow accounting principles generally accepted in the United States of America, including, where applicable, general practices within the banking industry. The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. The assessment of whether or not the Company has a controlling interest (i.e., the primary beneficiary) in a variable-interest entity (“VIE”) is performed on an on-going basis. All equity investments in non-consolidated VIEs are included in “other assets” in the Company’s consolidated balance sheets (Note 20).

Certain amounts reported in prior years have been reclassified to conform to the 2017 presentation. These reclassifications did not materially impact the Company’s consolidated balance sheets or consolidated statements of income.

On March 30, 2017, the Board of Directors approved a 75-for-one stock split of the Company’s common stock. The stock split occurred on April 7, 2017. The effect of the stock split on outstanding shares and earnings per share has been retroactively applied to all periods presented.

The Bank operates under a national bank charter and is subject to regulation by the Office of the Comptroller of the Currency (OCC). The Bank provides lending services in Georgia and full banking services in five southern states: Alabama, Florida, Mississippi, Tennessee, and Texas.

The Company and the Bank also have certain other non-operating and immaterial subsidiaries.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are susceptible to significant change in the near term are the allowance for credit losses, valuation of and accounting for acquired credit impaired loans, valuation of goodwill, intangible assets and deferred income taxes.

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016-09, all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016-09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016-09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. The adoption at January 1, 2017 of ASU 2016-09 did not have a significant impact on our financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Therefore, any carrying amount which exceeds the reporting unit’s fair value (up to the amount of goodwill recorded) will be recognized as an impairment loss. ASU No. 2017-04 will be effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those periods. The amendments will be applied prospectively on or after the effective date. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Based on recent goodwill impairments tests, which did not require the application of Step 2, the Company does not expect the adoption of this ASU to have an immediate impact.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (ASU 2014-09), which is intended to improve and converge the financial reporting requirements for revenue contracts with customers. Previous accounting guidance comprised broad revenue recognition concepts along with numerous industry-specific requirements. The new guidance establishes a five-step model which entities must follow to recognize revenue and removes inconsistencies and weaknesses in existing guidance. The banking industry does not expect significant changes because major sources of revenue are from financial instruments that have been excluded from the scope of the new standard (including loans, derivatives, debt and equity securities, etc.). However, the new standard affects other fees charged by banks, such as asset management fees, credit card interchange fees, deposit account fees, etc. Adoption may be made on a fully retrospective basis with practical application, or on a modified retrospective basis with a cumulative effect adjustment. Early adoption will be permitted as of the original effective date in ASU 2014-09, which is annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017, and must be retrospectively applied. Entities will have the option of presenting prior periods as impacted by the new guidance or presenting the cumulative effect of initial application along with supplementary disclosures. The Company is still in process of gathering an inventory and evaluating all contracts with customers and does not plan to early adopt the guidance. The Company is also in the process of evaluating the transition method election and the impact of the guidance to noninterest income and on presentation and disclosures. The preliminary analysis suggests this guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheets, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the

total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheets or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU 2016-01 will be effective for fiscal years and interim periods beginning after December 15, 2017. The Company does not expect this guidance will have a material effect on the Company’s consolidated balance sheets and consolidated statements of income.

In February 2016, the FASB issued ASU 2016-02, “Leases”. This ASU requires lessees to recognize lease assets and lease liabilities generated by contracts longer than a year on their balance sheets. The ASU also requires companies to disclose in the footnotes to their financial statements information about the amount, timing, and uncertainty for the payments they make for the lease agreements. ASU 2016-02 will be effective for annual periods and interim periods within those annual periods beginning after December 31, 2018. The Company is evaluating the effect of adopting this new accounting guidance.

In June 2016, he FASB has issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The guidance is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments. The guidance will replace the current incurred loss accounting model with an expected loss approach and requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is evaluating the effect of adopting this new accounting guidance.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”, in order to reduce current diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact of the ASU on the Company’s consolidated statement of cash flows. The Company is not expecting to early adopt the ASU.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”, which introduces amendments that are intended to clarify the definition of a business to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments are intended to narrow the current interpretation of a business. ASU No. 2017-01 will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those periods. The amendments will be applied prospectively on or after the effective date. Early application of the amendments in this ASU is allowed for transactions, including when a subsidiary or group of assets is deconsolidated/derecognized, in which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company is currently evaluating the effect of the ASU.

In March 2017, the FASB issued ASU No. 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities”, which will shorten the amortization period for callable debt securities held at a premium to the earliest call date instead of the maturity date. The amendments do not require an accounting change for securities held at a discount, which will continue to be amortized to the maturity date. ASU No. 2017-08 will be effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those periods. The amendments should be applied using a modified-retrospective transition method as of the beginning of the period of adoption. Early adoption is permitted, including adoption in an interim period. The Company is currently assessing this pronouncement and is considering early adoption, but it is not expected to have a material impact on the Company’s financial condition or results of operations.

A summary of amortized cost and estimated fair value of securities available-for-sale and securities held-to-maturity at March 31, 2017 and December 31, 2016 is as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
March 31, 2017
Securities available-for-sale:
U.S. Treasury securities	$	100,696	$	—	$	3,590	$	97,106
Obligations of U.S. government agencies		91,370		507		319		91,558
Mortgage-backed securities issued or guaranteed by U.S. agencies (MBS)
Residential pass-through:
Guaranteed by GNMA		144,582		1,249		1,261		144,570
Issued by FNMA and FHLMC		259,326		1,375		3,408		257,293
Other residential mortgage-backed securities		46,713		336		848		46,201
Commercial mortgage-backed securities		66,050		—		4,547		61,503
Total MBS		516,671		2,960		10,064		509,567
Obligations of states and municipal subdivisions		437,940		1,027		26,574		412,393
Other securities		5,647		172		163		5,656
Total securities available-for-sale	$	1,152,324	$	4,666	$	40,710	$	1,116,280
Securities held-to-maturity:
Obligations of states and municipal subdivisions	$	425	$	36	$	—	$	461

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2016
Securities available-for-sale:
U.S. treasury securities	$	100,736	$	—	$	3,951	$	96,785
Obligations of U.S. government agencies		97,340		508		320		97,528
Mortgage-backed securities issued or guaranteed by U.S. agencies (MBS)
Residential pass-through:
Guaranteed by GNMA		152,918		1,401		1,166		153,153
Issued by FNMA and FHLMC		267,035		1,499		3,206		265,328
Other residential mortgage-backed securities		48,076		375		890		47,561
Commercial mortgage-backed securities		66,720		—		4,107		62,613
Total MBS		534,749		3,275		9,369		528,655
Obligations of states and municipal subdivisions		438,655		870		28,713		410,812
Other securities		5,580		149		162		5,567
Total securities available-for-sale	$	1,177,060	$	4,802	$	42,515	$	1,139,347
Securities held-to-maturity:
Obligations of states and municipal subdivisions	$	425	$	38	$	—	$	463

The scheduled contractual maturities of securities available-for-sale and securities held-to-maturity at March 31, 2017 were as follows:

	Available-for-Sale				Held-to-Maturity
	Amortized		Estimated		Amortized		Estimated
(In thousands)	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	1,515	$	1,527	$	—	$	—
Due after one year through five years		109,623		106,213		425		461
Due after five years through ten years		15,053		15,132		—		—
Due after ten years		503,815		478,185		—		—
Mortgage-backed securities and other securities		522,318		515,223		—		—
Total	$	1,152,324	$	1,116,280	$	425	$	461

Proceeds from sales, gross gains, and gross losses on sales of securities available for sale for the three months ended March 31, 2017 and 2016 are presented below. There were no other-than-temporary impairment charges included in gross realized losses for the three months ended March 31, 2017 and 2016. The specific identification method is used to reclassify gains and losses out of other comprehensive income at the time of sale.

Securities with a carrying value of $393.8 million and $380.4 million at March 31, 2017 and December 31, 2016, respectively, were pledged to secure public and trust deposits, FHLB borrowings, repurchase agreements and for other purposes as required or permitted by law.

The details concerning securities classified as available-for-sale with unrealized losses as of March 31, 2017 and December 31, 2016 was as follows:

	Unrealized loss analysis
	Losses < 12 Months				Losses > 12 Months
			Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses
March 31, 2017
U.S. Treasury securities	$	97,106	$	3,590	$	—	$	—
Obligations of U.S. government agencies		35,897		170		20,281		149
Mortgage-backed securities		328,370		9,205		18,535		859
Obligations of states and municipal subdivisions		341,604		26,574		—		—
Other securities		—		—		4,238		163
Total	$	802,977	$	39,539	$	43,054	$	1,171

	Unrealized loss analysis
	Losses < 12 Months				Losses > 12 Months
			Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses
December 31, 2016
U.S. Treasury securities	$	96,785	$	3,951	$	—	$	—
Obligations of U.S. government agencies		51,463		277		12,150		43
Mortgage-backed securities		328,374		8,482		17,979		887
Obligations of states and municipal subdivisions		344,708		28,713		—		—
Other securities		—		—		4,216		162
Total	$	821,330	$	41,423	$	34,345	$	1,092

There were no securities classified as held-to-maturity with unrealized losses as of March 31, 2017 and December 31, 2016.

As of March 31, 2017 and December 31, 2016, approximately 76% and 75%, respectively of the fair value of securities in the investment portfolio reflected an unrealized loss. As of March 31, 2017, there were 15 securities that had been in a loss position for more than twelve months, and 190 securities that had been in a loss position for less than 12 months. None of the unrealized losses relate to the marketability of the securities or the issuer’s ability to honor redemption of the obligations. The Company has adequate liquidity and, therefore, does not plan to sell and, more likely than not, will not be required to sell these securities before recovery of the indicated impairment. Accordingly, the unrealized losses on these securities have been determined to be temporary.

The following table presents total loans outstanding by portfolio segment and class of financing receivable as of March 31, 2017 and December 31, 2016. Outstanding balances also include Acquired Noncredit Impaired (“ANCI”) loans, originated loans and Acquired Credit Impaired (“ACI”) loans net of any remaining purchase accounting adjustments. Information about ACI loans is presented separately in the “Acquired Credit-Impaired Loans” section of this Note.

Delaware		47-1329858
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Class A Common Stock, $0.01 Par Value		83,625,000
Class		Outstanding as of May 26, 2017

PART I: FINANCIAL INFORMATION		3

ITEM 1.	FINANCIAL STATEMENTS	3

	Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016	3
	Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2017 and 2016	4
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016	5
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2017	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016	7
	Notes to Condensed Consolidated Financial Statements	8

ITEM 2.	MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43

ITEM 3.	QUANTATATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	80

ITEM 4.	CONTROLS AND PROCEDURES	82

PART II: OTHER INFORMATION		83

ITEM 1.	LEGAL PROCEEDINGS	83

ITEM 1A.	RISK FACTORS	83

ITEM 2.	UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS	83

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	83

ITEM 4.	MINE SAFETY DISCLOSURES	83

ITEM 5.	OTHER INFORMATION	83

ITEM 6.	EXHIBITS	83

☐	Large accelerated filer	☐	Accelerated filer

☒	Non-accelerated filer	☐	Smaller reporting company

		☒	Emerging growth company

	For the Three months ended March 31,
(In thousands)	2017		2016
Gross realized gains	$	81	$	64
Gross realized losses		—		—
Realized gains on sale of securities available for sale, net	$	81	$	64