pub-ex991

PEOPLE’S UTAH BANCORP REPORTS SECOND QUARTER 2019 RESULTS; ANNOUNCES INCREASE IN QUARTERLY DIVIDEND PAYMENT

AMERICAN FORK, UTAH, July 25, 2019 – People’s Utah Bancorp (the “Company” or “PUB”) (Nasdaq: PUB) reported net income of $11.0 million for the second quarter of 2019 compared with $10.5 million for the first quarter of 2019, and $10.5 million for the second quarter of 2018. Diluted earnings per common share were $0.58 for the second quarter of 2019 compared with $0.55 for the first quarter of 2019, and $0.55 for the second quarter of 2018.

Return on average assets was 1.96% for the second quarter of 2019 compared with 1.95% for first quarter of 2019, and 1.93% for the second quarter of 2018. Return on average equity was 14.33% for the second quarter of 2019 compared with 14.38% for the first quarter of 2019, and 15.60% for the second quarter of 2018.

The Board of Directors declared an increase in the quarterly dividend payment to $0.13 per common share. The dividend will be payable on August 12, 2019 to shareholders of record as of August 5, 2019. The dividend payout ratio for earnings for the second quarter of 2019 was 22.3%. This continues the over 50-year trend of paying dividends by the Company.

“People’s Utah Bancorp achieved another strong quarter with a return on average equity of 14.3% as we continue to position, strengthen, and fortify our balance sheet,” said Len Williams, President and Chief Executive Officer. “We have increased our average equity to average assets from 12.4% a year ago to 13.7% for the second quarter of 2019, while increasing our allowance for loan losses from 1.3% a year ago to 1.7% at the end of the second quarter.”

Mr. Williams continued, “Our total deposits grew $200 million, or 11.2% year-over-year, as our retail branches and commercial treasury management team have focused on raising commercial deposits from existing commercial clients, as well as the acquisition of new client relationships. Our increased selectivity and concentration management has slowed our loan growth. However, we believe this focus will ensure greater strength and safety, given our expectations for a slower economy going forward. The economic outlook for the Utah market continues to be strong relative to the U.S. economy overall, which provides us further opportunities to grow our organization. We continue to actively evaluate potential acquisition opportunities throughout the Intermountain West.”

For the second quarter of 2019, net interest income grew 2.8%, or $0.7 million, to $27.7 million compared with $27.0 million for the same period a year earlier. The increase is primarily the result of average interest earning assets growing 3.1%, or $64.8 million, and yields on interest earning assets increasing 8 basis points to 5.68% for the same comparable period. Higher yields on interest earning assets was primarily the result of yields on loans increasing 23 basis points to 6.57% for the same comparable period, offset by a 1.5%, or $25.8 million decline in average loan balances and by the percentage of loans to total interest earning assets decreasing to 79.5% for the second quarter of 2019 compared with 83.2% for the second quarter of 2018.

For the second quarter of 2019, total cost of interest bearing liabilities increased 17 basis points to 0.74% compared with the same period a year ago and is the result of the cost of interest bearing deposits increasing 34 basis points to 0.74% for the same comparable periods. The Company had no short-term borrowing for the second quarter of 2019 compared with $128.3 million of short-term borrowings for the second quarter of 2018.

Acquisition accounting adjustments, including the accretion of loan discounts and amortization of certificate of deposits premium, added 7 basis points to the net interest margin for the second quarter of 2019.

For the second quarter of 2019, provision for loan losses was $2.2 million compared with $1.5 million for the same period a year earlier. The increase in provision for loan losses in the second quarter of 2019 is due primarily to $3.3 million in specific reserves, of which $2.2 million were reserved for the unguaranteed portion of four Government-guaranteed loans acquired in the Town & Country acquisition. For the second quarter of 2019, the Company incurred net charge-offs of $34 thousand compared with net recoveries of $0.1 million for the same period a year ago.

For the second quarter of 2019, noninterest income was $3.6 million compared with $4.1 million the same period a year ago. The decrease was primarily due to a one-time gain on sale of securities of $0.3 million in the second quarter of 2018 and $0.2 million loss on the disposal of assets in the second quarter of 2019.

For the second quarter of 2019, noninterest expense was $14.7 million compared with $15.8 million for the the same period a year earlier and is primarily the result of $0.7 million in lower salaries and employee benefits, $0.3 million in lower other non-interest expense primarily related to lower legal expenses, $0.2 million in lower FDIC premiums, and $0.1 million in lower marketing costs. For the second quarter of 2019, the Company’s efficiency ratio was 46.93% compared with 50.97% for the same period a year ago.

“Our lower marketing and adverstising costs are directly the result of us deciding to simplify our branding strategy to a single, unified name for our Bank, a new logo, and a more contemporary look. We expect to roll out our new single brand strategy around the end of the year and anticipate higher marketing and advertising costs over the next several quarters,” said Mr. Williams.

For the second quarter of 2019, income tax expense was $3.5 million compared with $3.3 million for the same period a year earlier. For the second quarter of 2019, the effective tax rate was 24.1% compared with 23.9% for the same period a year ago.

Loans held for investment decreased $6.3 million, or 0.4%, to $1.67 billion at June 30, 2019 compared with $1.68 billion at December 31, 2018, and decreased $19.4 million, or 1.1%. compared with $1.69 billion at June 30, 2018. The decline is primarily the result of declines in the acquisition, development, and construction loan portfolio of $17.1 million, or 5.26% from December 31, 2018 to June 30, 2019 and $66.4 million, or 17.76%, from a year ago, as the Company has managed loan concentration levels and become more selective with the type and size of construction projects that it is willing to finance, given its perspective on a slowing economy.

For the six months ended June 30, 2019, average loans declined $6.8 million, or 0.4%, to $1.68 billion compared with $1.69 billion for the same period a year earlier.

Non-performing loans were $5.1 million at June 30, 2019 compared with $4.5 million at December 31, 2018, and $8.6 million at June 30, 2018 Non-performing loans to total loans were 0.31% at June 30, 2019 compared with 0.27% at December 31, 2018, and 0.51% at June 30, 2018. Non-performing assets were $5.1 million at June 30, 2019 compared with $4.5 million at December 31, 2018, and $8.6 million at June 30, 2018. Non-performing assets to total assets were 0.22% at June 30, 2019 compared with 0.21% at December 31, 2018, and 0.40% at June 30, 2018. The allowance for loan losses increased $5.7 million, or 25.7%, to $28.0 million at June 30, 2019 compared with the same period a year ago. The allowance for loan losses to loans held for investment was 1.68% at June 30, 2019 compared with 1.50% at December 31, 2018, and 1.32% at June 30, 2018. In accordance with acquisition accounting, loans acquired from the Utah branches of Banner Bank and from Town & Country Bank were recorded at their estimated fair value, which resulted in a net discount to the loans’ contractual amounts, a portion of which reflects a discount for possible credit losses. Credit discounts are included in the determination of fair value, and as a result, no allowance for loan and lease losses is recorded for acquired loans at the acquisition date. The discount recorded on the acquired loans is not reflected in the allowance for loan losses or related allowance coverage ratios. Remaining credit discounts on acquired loans was $6.7 million at June 30, 2019.

Total deposits increased $105 million, or 5.6%, to $1.98 billion at June 30, 2019 compared with $1.88 billion at December 31, 2018, and increased $200 million, or 11.2%, compared with $1.78 billion at June 30, 2018. The increase in total deposits was primarily the result of organic commercial deposit growth. Non-interest bearing deposits were 35.7% of total deposits as of June 30, 2019 compared with 34.2% as of December 31, 2018, and 36.3% as of June 30, 2018.

Shareholders’ equity increased by $22.6 million to $313 million at June 30, 2019 compared with $290 million at December 31, 2018, and increased by $41.2 million compared with $272 million at June 30, 2018. The increase resulted primarily from net income earned during the intervening periods, net of cash dividends paid to shareholders; and a reduction in accumulated other comprehensive losses resulting from an improvement in the fair value of investment securities as overall interest rates declined.

Management will host a conference call on Friday, July 26, 2019 at 10:00 a.m. MDT (12:00 p.m. EDT) to discuss the second quarter 2019 results. Interested investors may listen to the call live at www.peoplesutah.com. Investment professionals are invited to dial 888-317-6003 (international calls 412-317-6061) and the participant entry number is 7584075. Please dial in 10-15 minutes early so the name and company information can be collected prior to the start of the conference.

If you are unable to participate during the live webcast, the call will be archived on our website www.peoplesutah.com, or at the same URL above for one month after the call. Forward-looking and other material information may be discussed on this conference call.

Statements in this release that are based on information other than historical data or that express the Company’s expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date.

Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include: (i) market and economic conditions; (ii) capital sufficiency; (iii) operational, liquidity, interest rate and credit risks; (iv) deterioration of asset quality; (v) achieving loan and deposit growth; (vi) increased competition; (vii) adequacy of reserves; (viii) investments in new branches and new business opportunities; and (ix) changes in the regulatory or legal environment; as well as other factors discussed in the section titled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive. The Company does not intend, or undertake any obligation to publicly update these forward-looking statements.

People’s Utah Bancorp is the holding company for People’s Intermountain Bank. People’s Intermountain Bank is a full-service community bank providing loans, deposit and cash management services to individuals and businesses. The Company offers its clients direct access to decision makers, unparalleled responsiveness, seasoned relationship managers, and technology solutions. People’s Intermountain Bank has 26 locations in three banking divisions, Bank of American Fork, Lewiston State Bank, and People’s Town & Country Bank; and a mortgage division, People’s Intermountain Bank Mortgage. The Company has been serving communities in Utah and southern Idaho for more than 100 years. More information about PUB is available at www.peoplesutah.com.

	Three Months Ended						Six Months Ended
(Dollars in thousands, except share	June 30,		March 31,		June 30,		June 30,		June 30,
and per share data)	2019		2019		2018		2019		2018
Interest income
Interest and fees on loans	$	27,628	$	26,980	$	27,073	$	54,608	$	52,856
Interest and dividends on investments		2,422		2,172		1,683		4,594		3,339
Total interest income		30,050		29,152		28,756		59,202		56,195
Interest expense		2,330		2,245		1,778		4,575		3,273
Net interest income		27,720		26,907		26,978		54,627		52,922
Provision for loan losses		2,150		1,550		1,475		3,700		3,525
Net interest income after provision for loan losses		25,570		25,357		25,503		50,927		49,397
Non-interest income
Mortgage banking		1,621		1,417		1,505		3,038		3,143
Card processing		814		615		799		1,429		1,522
Service charges on deposit accounts		705		657		704		1,362		1,377
Net gain on sale of investment securities		-		-		333		-		335
Other		458		648		725		1,106		1,407
Total non-interest income		3,598		3,337		4,066		6,935		7,784
Non-interest expense
Salaries and employee benefits		9,526		9,886		10,196		19,412		20,619
Occupancy, equipment and depreciation		1,558		1,456		1,411		3,014		2,954
Data processing		1,018		964		1,063		1,982		1,933
Marketing and advertising		226		116		321		342		767
FDIC premiums		148		90		299		238		628
Acquisition-related costs		-		-		1		-		350
Other		2,223		2,404		2,532		4,627		4,620
Total non-interest expense		14,699		14,916		15,823		29,615		31,871
Income before income tax expense		14,469		13,778		13,746		28,247		25,310
Income tax expense		3,480		3,273		3,279		6,753		5,839
Net income	$	10,989	$	10,505	$	10,467	$	21,494	$	19,471

Earnings per common share:
Basic	$	0.58	$	0.56	$	0.56	$	1.14	$	1.04
Diluted	$	0.58	$	0.55	$	0.55	$	1.13	$	1.03

Weighted average common shares outstanding:
Basic		18,805,760		18,781,210		18,679,908		18,793,553		18,639,397
Diluted		19,007,297		18,989,565		18,989,176		18,998,480		18,963,549

	June 30,			March 31,			December 31,			June 30,
(Dollars in thousands, except share data)	2019			2019			2018			2018
ASSETS
Cash and due from banks	$	38,121		$	36,659		$	39,471		$	33,484
Interest bearing deposits		64,064			106,467			7,456			17,930
Federal funds sold		90,281			896			1,620			908
Total cash and cash equivalents		192,466			144,022			48,547			52,322
Investment securities:
Available for sale, at fair value		334,762			347,123			280,964			236,699
Held to maturity, at historical cost		-			-			65,462			67,922
Total investment securities		334,762			347,123			346,426			304,621
Non-marketable equity securities		2,623			2,623			2,551			6,151
Loans held for sale		18,446			7,184			10,267			11,058
Loans:
Loans held for investment		1,672,584			1,676,889			1,678,902			1,691,959
Allowance for loan losses		(28,039	)		(25,923	)		(25,245	)		(22,308	)
Total loans held for investment, net		1,644,545			1,650,966			1,653,657			1,669,651
Premises and equipment, net		37,925			37,836			36,532			29,335
Goodwill		25,673			25,673			25,673			25,673
Bank-owned life insurance		26,734			26,581			26,433			26,120
Deferred income tax assets		9,178			10,354			11,514			10,764
Accrued interest receivable		8,642			8,593			8,282			7,658
Other intangibles		3,191			3,301			3,412			3,633
Other real estate owned		-			-			-			-
Other assets		7,680			6,551			11,000			14,784
Total assets	$	2,311,865		$	2,270,807		$	2,184,294		$	2,161,770

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing deposits	$	707,135		$	655,866		$	642,594		$	646,574
Interest bearing deposits		1,274,771			1,295,459			1,234,461			1,135,366
Total deposits		1,981,906			1,951,325			1,877,055			1,781,940
Short-term borrowings		-			-			-			90,000
Accrued interest payable		546			521			483			369
Other liabilities		16,614			17,634			16,594			17,862
Total liabilities		1,999,066			1,969,480			1,894,132			1,890,171

Shareholders’ equity:
Preferred shares, $0.01 par value		-			-			-			-
Common shares, $0.01 par value		188			188			187			187
Additional paid-in capital		87,275			86,892			86,308			85,620
Retained earnings		224,950			216,216			207,779			190,735
Accumulated other comprehensive income/(loss)		386			(1,969	)		(4,112	)		(4,943	)
Total shareholders’ equity		312,799			301,327			290,162			271,599
Total liabilities and shareholders’ equity	$	2,311,865		$	2,270,807		$	2,184,294		$	2,161,770

Common shares outstanding		18,819,332			18,797,280			18,728,823			18,683,883


	June 30,			March 31,			December 31,			June 30,
(Dollars in thousands, except share data)	2019			2019			2018			2018
Selected Balance Sheet Information:
Book value per share	$	16.62		$	16.03		$	15.49		$	14.54
Tangible book value per share	$	15.09		$	14.49		$	13.94		$	12.97
Non-performing loans to total loans		0.31	%		0.28	%		0.27	%		0.51	%
Non-performing assets to total assets		0.22	%		0.21	%		0.21	%		0.40	%
Allowance for loan losses to loans held for investment		1.68	%		1.55	%		1.50	%		1.32	%
Loans to Deposits		83.91	%		84.98	%		88.65	%		94.32	%

Asset Quality Data:
Non-performing loans	$	5,104		$	4,706		$	4,499		$	8,649
Non-performing assets	$	5,104		$	4,706		$	4,499		$	8,649

Capital Ratios:
Tier 1 leverage capital ⁽¹⁾		12.78	%		12.70	%		12.27	%		11.48	%
Total risk-based capital ⁽¹⁾		17.24	%		16.86	%		16.36	%		15.22	%
Average equity to average assets		13.69	%		13.55	%		13.04	%		12.36	%
Tangible common equity to tangible assets ⁽³⁾		12.44	%		12.15	%		12.11	%		11.36	%

	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2019			2019			2018			2019			2018
Selected Financial Information:
Basic earnings per share	$	0.58		$	0.56		$	0.56		$	1.14		$	1.04
Diluted earnings per share	$	0.58		$	0.55		$	0.55		$	1.13		$	1.03
Net interest margin ⁽²⁾		5.24	%		5.29	%		5.26	%		5.26	%		5.24	%
Efficiency ratio		46.93	%		49.32	%		50.97	%		48.11	%		52.50	%
Non-interest income to average assets		0.64	%		0.62	%		0.75	%		0.63	%		0.73	%
Non-interest expense to average assets		2.63	%		2.77	%		2.91	%		2.69	%		2.97	%
Return on average assets		1.96	%		1.95	%		1.93	%		1.96	%		1.82	%
Return on average equity		14.33	%		14.38	%		15.60	%		14.35	%		14.79	%
Net charge-offs / (recoveries)	$	34		$	872		$	(102	)	$	906		$	(480	)
Annualized net charge-offs / (recoveries) to average loans		0.01	%		0.21	%		-0.02	%		0.11	%		-0.06	%

	Three Months Ended
	June 30, 2019								June 30, 2018
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
(Dollars in thousands, except footnotes)	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Interest earning deposits in other banks and federal funds sold	$	89,461		$	511		2.29	%	$	15,533		$	64		1.65	%
Securities: ⁽¹⁾
Taxable securities		276,993			1,572		2.28	%		241,724			1,192		1.98	%
Non-taxable securities⁽²⁾		66,425			312		1.88	%		79,949			369		1.85	%
Total securities		343,418			1,884		2.20	%		321,673			1,561		1.95	%
Loans⁽³⁾
Real estate term		902,214			13,447		5.98	%		903,637			12,860		5.71	%
Construction and land development		313,411			6,304		8.07	%		368,823			7,303		7.94	%
Commercial and industrial		294,489			5,212		7.10	%		317,629			5,281		6.67	%
Residential and home equity		161,299			2,371		5.89	%		105,219			1,380		5.26	%
Consumer and other		16,039			294		7.36	%		17,940			249		5.58	%
Total loans		1,687,452			27,628		6.57	%		1,713,248			27,073		6.34	%

Non-marketable equity securities		2,623			27		4.07	%		7,671			58		3.04	%
Total interest earning assets		2,122,954			30,050		5.68	%		2,058,125			28,756		5.60	%
Allowance for loan losses		(26,008	)							(21,073	)
Non-interest earning assets		148,625								140,723
Total average assets	$	2,245,571							$	2,177,775
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing deposits:
Demand and savings accounts	$	814,364			1,034		0.51	%	$	733,223			492		0.27	%
Money market accounts		274,667			677		0.99	%		207,663			176		0.34	%
Certificates of deposit		179,242			619		1.39	%		185,936			468		1.01	%
Total interest bearing deposits		1,268,273			2,330		0.74	%		1,126,822			1,136		0.40	%
Short-term borrowings		-			-		0.00	%		128,288			642		2.01	%
Total interest bearing liabilities		1,268,273			2,330		0.74	%		1,255,110			1,778		0.57	%
Non-interest bearing deposits		652,158								642,063
Total funding		1,920,431			2,330		0.49	%		1,897,173			1,778		0.38	%
Other non-interest bearing liabilities		17,610								11,433
Shareholders’ equity		307,530								269,169
Total average liabilities and shareholders’ equity	$	2,245,571							$	2,177,775
Net interest income				$	27,720							$	26,978
Interest rate spread							4.94	%							5.04	%
Net interest margin							5.24	%							5.26	%

	Six Months Ended
	June 30, 2019								June 30, 2018
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
(Dollars in thousands, except footnotes)	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS
Interest earning deposits in other banks and federal funds sold	$	64,330		$	730		2.29	%	$	14,501		$	109		1.51	%
Securities: ⁽¹⁾
Taxable securities		276,948			3,176		2.31	%		247,078			2,406		1.96	%
Non-taxable securities⁽²⁾		67,965			634		1.88	%		81,226			751		1.86	%
Total securities		344,913			3,810		2.23	%		328,304			3,157		1.94	%
Loans⁽³⁾
Real estate term		895,700			26,494		5.96	%		879,444			25,024		5.74	%
Construction and land development		314,604			12,535		8.04	%		367,787			14,178		7.77	%
Commercial and industrial		295,665			10,333		7.05	%		315,838			10,371		6.62	%
Residential and home equity		158,812			4,687		5.95	%		106,060			2,716		5.16	%
Consumer and other		16,408			559		6.86	%		18,893			567		6.05	%
Total loans		1,681,189			54,608		6.55	%		1,688,022			52,856		6.31	%

Non-marketable equity securities		2,785			54		3.90	%		6,894			73		2.15	%
Total interest earning assets		2,093,217			59,202		5.70	%		2,037,721			56,195		5.56	%
Allowance for loan losses		(25,907	)							(19,901	)
Non-interest earning assets		149,160								142,940
Total average assets	$	2,216,470							$	2,160,760
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing deposits:
Demand and savings accounts	$	807,043			2,027		0.51	%	$	725,774			943		0.26	%
Money market accounts		262,171			1,281		0.99	%		215,946			333		0.31	%
Certificates of deposit		180,586			1,203		1.34	%		192,705			927		0.97	%
Total interest bearing deposits		1,249,800			4,511		0.73	%		1,134,425			2,203		0.39	%
Short-term borrowings		4,879			64		2.63	%		114,498			1,070		1.88	%
Total interest bearing liabilities		1,254,679			4,575		0.74	%		1,248,923			3,273		0.53	%
Non-interest bearing deposits		643,642								635,503
Total funding		1,898,321			4,575		0.49	%		1,884,426			3,273		0.35	%
Other non-interest bearing liabilities		16,173								10,925
Shareholders’ equity		301,976								265,409
Total average liabilities and shareholders’ equity	$	2,216,470							$	2,160,760
Net interest income				$	54,627							$	52,922
Interest rate spread							4.97	%							5.03	%
Net interest margin							5.26	%							5.24	%

In addition to financial results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures. Management has presented these non-GAAP financial measures because it believes that they provide useful and comparative information to assess trends in core operations and facilitate the comparison of our financial performance with the performance of our peers.

(Dollars in thousands)	Three Months Ended							Six Months Ended
	June 30,		March 31,		June 30,			June 30,		June 30,
Revenue from Core Operations	2019		2019		2018			2019		2018
Net interest income (GAAP)	$	27,720	$	26,907	$	26,978		$	54,627	$	52,922
Total non-interest income		3,598		3,337		4,066			6,935		7,784
Total GAAP revenues		31,318		30,244		31,044			61,562		60,706
Exclude net gain on sale of investment securities		-		-		(333	)		-		(333	)
Revenue from core operations (non-GAAP)	$	31,318	$	30,244	$	30,711		$	61,562	$	60,373

	Three Months Ended							Six Months Ended
	June 30,		March 31,		June 30,			June 30,		June 30,
Non-interest Income from Core Operations	2019		2019		2018			2019		2018
Total non-interest income (GAAP)	$	3,598	$	3,337	$	4,066		$	6,935	$	7,784
Exclude net gain on sale of investment securities		-		-		(333	)		-		(333	)
Non-interest income from core operations (non-GAAP)	$	3,598	$	3,337	$	3,733		$	6,935	$	7,451

	Three Months Ended							Six Months Ended
	June 30,		March 31,		June 30,			June 30,		June 30,
Non-interest Expense from Core Operations	2019		2019		2018			2019		2018
Total non-interest expense (GAAP)	$	14,699	$	14,916	$	15,823		$	29,615	$	31,871
Exclude acquisition-related costs		-		-		(1	)		-		(350	)
Non-interest expense from core operations (non-GAAP)	$	14,699	$	14,916	$	15,822		$	29,615	$	31,521

	Three Months Ended							Six Months Ended
	June 30,		March 31,		June 30,			June 30,		June 30,
Net Income from Core Operations	2019		2019		2018			2019		2018
Net income (GAAP)	$	10,989	$	10,505	$	10,467		$	21,494	$	19,471
Exclude net gain on sale of investment securities		-		-		(333	)		-		(333	)
Exclude acquisition-related costs		-		-		1			-		350
Exclude tax related benefit		-		-		79			-		(4	)
Revaluation of deferred income tax assets (DTA)		-		-		-			-		-
Net income (non-GAAP)	$	10,989	$	10,505	$	10,214		$	21,494	$	19,484

^(NG) Non-GAAP Financial Measures (continued)
(Dollars in thousands)	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
Acquisition Accounting Impact on Net Interest Margin	2019			2019			2018			2019			2018
Net interest income (GAAP)	$	27,720		$	26,907		$	26,978		$	54,627		$	52,922
Exclude discount accretion (premium amortization) on purchased loans		(345	)		(528	)		(777	)		(873	)		(1,944	)
Exclude premium amortization on acquired certificates of deposit ("CD")		(35	)		(35	)		(35	)		(70	)		(70	)
Net interest income before acquisition accounting impact (Non-GAAP)	$	27,340		$	26,344		$	26,166		$	53,684		$	50,908

Average earning assets (GAAP)	$	2,122,954		$	2,063,149		$	2,058,125		$	2,093,217		$	2,037,721
Exclude average net loan discount on acquired loans		8,073			8,500			10,146			8,285			11,030
Average earning assets before acquired loan discount (Non-GAAP)	$	2,131,027		$	2,071,649		$	2,068,271		$	2,101,502		$	2,048,751

Net interest margin ("NIM") (GAAP)		5.24	%		5.29	%		5.26	%		5.26	%		5.24	%
Exclude impact on NIM from discount accretion		-0.06	%		-0.10	%		-0.15	%		-0.08	%		-0.19	%
Exclude impact on NIM from CD premium amortization		-0.01	%		-0.01	%		-0.01	%		-0.01	%		-0.01	%
Net interest margin before acquisition accounting adjustments (Non-GAAP)		5.17	%		5.18	%		5.10	%		5.17	%		5.04	%

^(NG) Non-GAAP Financial Measures (continued)
(Dollars in thousands)	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
Additional Non-GAAP Financial Information	2019			2019			2018			2019			2018

Diluted earnings per share (GAAP)	$	0.58		$	0.55		$	0.55		$	1.13		$	1.03
Diluted earnings per share (non-GAAP)	$	0.58		$	0.55		$	0.54		$	1.13		$	1.03

Efficiency ratio (GAAP)		46.93	%		49.32	%		50.97	%		48.11	%		52.50	%
Efficiency ratio (non-GAAP)		46.93	%		49.32	%		51.52	%		48.11	%		52.21	%

Non-interest income to average assets (GAAP)		0.64	%		0.62	%		0.75	%		0.63	%		0.73	%
Non-interest income to average assets (non-GAAP)		0.64	%		0.62	%		0.69	%		0.63	%		0.70	%

Non-interest expense to average assets (GAAP)		2.63	%		2.77	%		2.91	%		2.69	%		2.97	%
Non-interest expense to average assets (non-GAAP)		2.63	%		2.77	%		2.91	%		2.69	%		2.94	%

Return on average assets (GAAP)		1.96	%		1.95	%		1.93	%		1.96	%		1.82	%
Return on average assets (non-GAAP)		1.96	%		1.95	%		1.88	%		1.96	%		1.82	%

Return on average equity (GAAP)		14.33	%		14.38	%		15.60	%		14.35	%		14.79	%
Return on average equity (non-GAAP)		14.33	%		14.38	%		15.22	%		14.35	%		14.80	%