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Green Bancorp, Inc. Reports Second Quarter 2017 Financial Results
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2017 Second Quarter Highlights (GAAP)

  • Second quarter 2017 net income totaled $12.9 million, or $0.35 per diluted common share
  • Return (annualized) on average assets was 1.26% for Q2 2017, an increase from 0.73% in Q1 2017
  • Efficiency ratio of 47.83% for Q2 2017, from 54.64% for Q1 2017
  • Total loans held for investment increased $111.1 million, 14.8% annualized from Q1 2017
  • Net interest margin increased to 3.63% for Q2 2017, from 3.47% in Q1 2017
  • Nonperforming assets were reduced by $12.0 million, or 13.7%, during Q2 2017

2017 Second Quarter Highlights (Non-GAAP)

  • Pre-tax pre-provision return on average assets was 2.09% for Q2 2017, an increase from 1.75% in Q1 2017
  • Return (annualized) on average tangible common equity was 15.04% for Q2 2017, an increase from 8.88% in Q1 2017
  • Tangible book value per common share increased to $9.65

HOUSTON, July 27, 2017 (GLOBE NEWSWIRE) -- Green Bancorp, Inc. (NASDAQ:GNBC), the bank holding company (“Green Bancorp” or the “Company”) that operates Green Bank, N.A. (“Green Bank”), today announced results for its second quarter and six months ended June 30, 2017.  The Company reported net income for the quarter of $12.9 million, or $0.35 per diluted common share.

Manny Mehos, Chairman and Chief Executive Officer of Green Bancorp, said, “We delivered record second quarter results driven by strong loan growth, significant margin expansion, continued improvement in credit and effective expense control. These strong results clearly highlight the Bank’s attractive markets and asset generation potential, efficient branch system, and asset sensitivity now that our energy exposure has largely been removed from our balance sheet. Looking forward, the outlook for the Bank remains promising, as we believe that we have the opportunity to sustain and further improve our financial performance as our markets remain healthy and our infrastructure has ample capacity to scale further.”

Geoff Greenwade, President of Green Bancorp and Chief Executive Officer of Green Bank, commented, “I am pleased with the significant progress that we have achieved as well as the outlook for the balance of 2017. Over the first six months of the year, our results have been in line with our expectations with deposits and loans essentially flat as we completed our energy disposition strategy and made solid progress reducing our Commercial Real Estate exposure. As we look forward, the Company is now poised to achieve more normalized and sustainable growth and we remain confident in our outlook for 6-8% annualized loan growth over the remainder of 2017 and on into 2018.”

Results of Operations - Quarter Ended June 30, 2017 compared with Quarter Ended March 31, 2017

Net income for the quarter ended June 30, 2017 was $12.9 million, an increase of $5.7 million, or 78.8%, compared with $7.2 million for the quarter ended March 31, 2017. Net income per diluted common share was $0.35 for the quarter ended June 30, 2017, compared with $0.19 for the quarter ended March 31, 2017. Returns on average assets and average common equity, each on an annualized basis, for the three months ended June 30, 2017 were 1.26% and 11.62%, respectively. Green Bancorp’s efficiency ratio, which represents noninterest expense divided by the sum of net interest income and noninterest income, was 47.83% for the three months ended June 30, 2017.  The Company recorded a provision for loan losses of $1.5 million, primarily related to the energy portfolio.

Net interest income before provision for loan losses for the quarter ended June 30, 2017 increased 8.2% or $2.7 million, to $35.3 million, compared with $32.6 million for the quarter ended March 31, 2017.  The increase in net interest income was primarily due to an increase of $2.1 million, or 5.8%, in interest earned on loans due to a $37.5 million, or 1.2%,  increase in the average loan balance along with a 16 basis point increase in the average loan yield and an increase of $1.3 million, or 52.1%, in interest earned on securities due to a $107.0 million, or 18.7%, increase in the average securities balance and a 49 basis point increase in the average securities yield, offset by the increases of $277 thousand in interest expense on other borrowed funds due to an increase in short-term advances during the current quarter, $252 thousand in interest expense on interest bearing demand and savings, and $179 thousand in interest expense on certificates and other time deposits.   The net interest margin for the quarter ended June 30, 2017 of 3.63% increased from 3.47% for the quarter ended March 31, 2017.  The improvement in net interest margin was due to the factors discussed above.

Noninterest income for the quarter ended June 30, 2017 was $5.7 million, an increase of $204 thousand, or 3.7%, from $5.5 million for the quarter ended March 31, 2017.  The increase was primarily due to a $376 thousand increase in derivative income, a $360 thousand increase in net gain on sale of held for sale loans, a $294 thousand increase in gain on sale of available for sale securities and a $272 thousand increase in loan fees, offset by a $1.0 million decrease in gain on sale of guaranteed portion of loans due to timing of loan sales.

Noninterest expense for the quarter ended June 30, 2017 was $19.6 million, a decrease of $1.2 million, or 5.9%, from $20.8 million for the quarter ended March 31, 2017.  The decrease was primarily due to a $724 thousand decrease in provision for credit losses for off-balance sheet commitments, and a $498 thousand decrease in professional and regulatory fees.

Loans held for investment at June 30, 2017 were $3.1 billion, an increase of $111.1 million, or 3.7%, when compared with March 31, 2017.  The increase is primarily due to a $131.4 million increase in commercial and industrial loans, of which $56.2 million was related to mortgage warehouse loans, and a $9.8 million increase in consumer and other loans, offset by a $28.1 million reduction in commercial real estate loans.  During the second quarter of 2017, the Company resolved $6.5 million in energy-related loans, which included $1.0 million in loans held for sale.  At June 30, 2017, energy loans totaled $70.9 million, or 2.3% of total loans, excluding loans held for sale.

Loans held for sale at June 30, 2017 were $18.0 million, an increase of $680 thousand, or 3.9%, compared with $17.4 million at March 31, 2017.  The loans held for sale include $16.3 million in energy loans.

During the quarter ended June 30, 2017, securities increased $129.3 million, or 21.9%, due to the purchase of $430.7 million less sales of $278.9 million in securities, which utilized excess cash. 

Deposits at June 30, 2017 decreased $55.7 million, or 1.6%, compared with March 31, 2017, comprised of decreases of $80.7 million in interest-bearing transaction and savings deposits and $21.8 million in noninterest-bearing deposits, offset by a $46.8 million increase in time deposits.  Average deposits increased $11.6 million, or 0.3%, for the quarter ended June 30, 2017, compared with the prior quarter.

Asset Quality - Quarter Ended June 30, 2017 compared with Quarter Ended March 31, 2017

Nonperforming assets totaled $75.5 million, or 1.80% of period end total assets, at June 30, 2017, a decrease of $12.0 million compared to $87.5 million, or 2.15% of period end total assets, at March 31, 2017, primarily due to the resolution of nonperforming loans.  Accruing loans classified as troubled debt restructures and included in the nonperforming asset totals were $7.6 million at June 30, 2017, compared with $11.1 million at March 31, 2017.  Real estate acquired through foreclosure totaled $921 thousand at June 30, 2017, a decrease of $435 thousand, or 32.1%, compared with March 31, 2017.

The allowance for loan losses was 1.02% of total loans at June 30, 2017, compared with 1.06% of total loans at March 31, 2017.  At June 30, 2017, the Company’s allowance for loans losses to total loans, excluding acquired loans that are accounted for under ASC 310-20 and ASC 310-30 and their related allowance, was 1.23%.  Further, the allowance for loan losses plus acquired loan net discount to total loans adjusted for acquired loan net discount was 1.22% as of June 30, 2017.

The Company recorded a provision for loan losses of $1.5 million for the quarter ended June 30, 2017 down from the $6.1 million provision for the loan losses recorded for the quarter ended March 31, 2017.  The second quarter of 2017 provision included $1.5 million in reserves related to energy loans, as compared to the first quarter of 2017, which included $6.0 million in reserves related to energy loans.

Net charge-offs were $1.5 million, or 0.05% of total loans, for the quarter ended June 30, 2017, compared with net charge-offs of $573 thousand, or 0.02% of total loans, for the quarter ended March 31, 2017.

Results of Operations – Six Months Ended June 30, 2017 compared with Six Months Ended June 30, 2016

Net income for the six months ended June 30, 2017 was $20.1 million, compared with net income of $5.5 million for the six months ended June 30, 2016. Net income per diluted common share was $0.54 for the six months ended June 30, 2017, compared with net income per diluted common share of $0.15 for the six months ended June 30, 2016.  The Company recorded a provision for loan losses of $7.7 million, which included $7.5 million in reserves on the energy portfolio.  The provision decreased $19.3 million from the same period in 2016.  Net charge-offs were $2.0 million for the six months ended June 30, 2017, compared with net charge-offs of $12.5 million for the six months ended June 30, 2016.

Net interest income before provision for loan losses for the six months ended June 30, 2017 was $67.9 million, an increase of $179 thousand, or 0.3%, compared with $67.8 million during the six months ended June 30, 2016.  The net interest margin for the six months ended June 30, 2017 of 3.55%, compared with 3.81% for the six months ended June 30, 2016.

Noninterest income for the six months ended June 30, 2017 was $11.2 million, an increase of $3.3 million, or 41.0%, compared with $7.9 million for the six months ended June 30, 2016.  This increase was primarily due to a $1.6 million increase in customer service fees, an $809 thousand increase in gain on sale of guaranteed portion of loans and a $522 thousand increase in loan fees. 

Noninterest expense for the six months ended June 30, 2017 was $40.5 million, an increase of $288 thousand, or 0.7%, compared with $40.2 million for the six months ended June 30, 2016. 

Loans held for investment at June 30, 2017 were $3.1 billion, a decrease of $66.1 million, or 2.1%, compared with $3.2 billion at June 30, 2016, primarily due to the resolution of energy and nonperforming loans offset by new loan production.    Average loans held for investment decreased $121.7 million, or 3.9%, to $3.0 billion for the six months ended June 30, 2017, compared with $3.2 billion for the same period in 2016. 

Deposits at June 30, 2017 were $3.4 billion, an increase of $153.2 million, or 4.8%, compared with June 30, 2016, primarily due to continued opportunities for our portfolio bankers to generate deposit growth within our target markets.  Average deposits increased 8.5%, or $262.6 million, to $3.4 billion for the six months ended June 30, 2017, compared with the same period of 2016. Average noninterest-bearing deposits for the six months ended June 30, 2017 were $668.4 million, an increase of $65.8 million, or 10.9%, compared with the same period in 2016.

Non-GAAP Financial Measures

Green Bancorp’s management uses certain non−GAAP (generally accepted accounting principles) financial measures to evaluate its performance.  Specifically, Green Bancorp reviews tangible book value per common share, the tangible common equity to tangible assets ratio, the return on average tangible common equity ratio, allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans, allowance for loan losses plus acquired loans net discount to total loans adjusted for acquired loan net discount, and pre-tax, pre-provision return on average assets.  Green Bancorp has included in this Earnings Release information related to these non-GAAP financial measures for the applicable periods presented.  Please refer to the “Notes to Financial Highlights” at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures.

Conference Call

As previously announced, Green Bancorp will hold a conference call today, July 27, 2017, to discuss its second quarter 2017 results at 5:00 p.m. (Eastern Time).  The conference call can be accessed live over the phone by dialing 1-877-407-0789, or for international callers, 1-201-689-8562 and requesting to be joined to the Green Bancorp Second Quarter 2017 Earnings Conference Call.  A replay will be available starting at 8:00 p.m. (Eastern Time) on July 27, 2017 and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671.  The passcode for the replay is 13665540.  The replay will be available until 11:59 p.m. (Eastern Time) on August 3, 2017.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company's website at investors.greenbank.com.  The online replay will remain available for a limited time beginning immediately following the call.

To learn more about Green Bancorp, please visit the Company's website at www.greenbank.comGreen Bancorp uses its website as a channel of distribution for material Company information.  Financial and other material information regarding Green Bancorp is routinely posted on the Company's website and is readily accessible.

About Green Bancorp, Inc.

Headquartered in Houston, Texas, Green Bancorp is a bank holding company that operates Green Bank in the Houston and Dallas metropolitan areas and Austin, Louisville and Honey Grove.  Commercial-focused, Green Bank is a nationally chartered bank regulated by the Office of the Comptroller of the Currency, a division of the Department of the Treasury of the United States.

Forward Looking Statement

The information presented herein and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public shareholder communications, or in oral statements made with the approval of an authorized executive officer contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 giving Green Bancorp’s expectations or predictions of future financial or business performance or conditions.  Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions.  These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made.  These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information.  By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements. Statements about the expected timing, completion and effects of the proposed transactions and all other statements in this release other than historical facts constitute forward-looking statements.

In addition to factors previously disclosed in Green Bancorp’s reports filed with the SEC and those identified elsewhere in this communication, the following factors among others, could cause actual results to differ materially from forward-looking statements: difficulties and delays in integrating the Green Bancorp and Patriot businesses or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

                               
Green Bancorp, Inc.
Financial Highlights
(Unaudited)
                               
    Jun 30, 2017   Mar 31, 2017   Dec 31, 2016   Sep 30, 2016   Jun 30, 2016
                                         
    (Dollars in thousands)
Period End Balance Sheet Data:                              
Cash and cash equivalents   $ 134,995     $ 255,581     $ 389,007     $ 313,366     $ 199,950  
Securities     718,750       589,468       310,124       318,289       237,029  
Other investments     26,002       19,057       18,649       18,621       18,586  
Loans held for sale     18,030       17,350       23,989       38,934       6,253  
Loans held for investment     3,123,355       3,012,275       3,098,220       3,047,618       3,189,436  
Allowance for loan losses     (31,991 )     (31,936 )     (26,364 )     (35,911 )     (47,420 )
Goodwill     85,291       85,291       85,291       85,291       85,291  
Core deposit intangibles, net     9,215       9,595       9,975       10,356       10,758  
Real estate acquired through foreclosure     921       1,356       5,220       2,801       6,216  
Premises and equipment, net     30,108       30,604       25,674       26,164       26,706  
Other assets     71,021       83,359       85,037       104,307       94,642  
Total assets   $ 4,185,697     $ 4,072,000     $ 4,024,822     $ 3,929,836     $ 3,827,447  
                               
Noninterest-bearing deposits   $ 683,656     $ 705,480     $ 650,064     $ 618,408     $ 583,347  
Interest-bearing transaction and savings deposits     1,324,307       1,404,988       1,359,187       1,304,547       1,208,960  
Certificates and other time deposits     1,352,459       1,305,670       1,365,449       1,392,944       1,414,954  
Total deposits     3,360,422       3,416,138       3,374,700       3,315,899       3,207,261  
Securities sold under agreements to repurchase     5,221       4,316       3,493       2,855       3,227  
Other borrowed funds     305,000       150,000       150,000       150,000       150,000  
Subordinated debentures and subordinated notes     47,454       47,304       47,492       13,502       13,397  
Other liabilities     15,859       16,954       18,655       21,365       18,621  
Total liabilities     3,733,956       3,634,712       3,594,340       3,503,621       3,392,506  
Shareholders' equity     451,741       437,288       430,482       426,215       434,941  
Total liabilities and equity   $ 4,185,697     $ 4,072,000     $ 4,024,822     $ 3,929,836     $ 3,827,447  


                                           
    For the Quarter Ended   For the
  Six Months Ended
    Jun 30,
2017
  Mar 31,
2017
  Dec 31,
2016
  Sep 30,
2016
  Jun 30,
2016
  Jun 30,
2017
  Jun 30,
2016
    (Dollars in thousands)            
Income Statement Data:                                          
Interest income:                                          
Loans, including fees   $ 38,476   $ 36,371     $ 36,469     $ 37,897     $ 37,711   $ 74,847   $ 75,056
Securities     3,928     2,583       1,151       989       988     6,511     2,069
Other investments     197     188       184       199       205     385     378
Federal funds sold     -     1       -       1       1     1     2
Deposits in financial institutions     331     408       522       346       157     739     281
Total interest income     42,932     39,551       38,326       39,432       39,062     82,483     77,786
                                           
Interest expense:                                          
Transaction and savings deposits     2,230     1,978       1,750       1,537       1,312     4,208     2,462
Certificates and other time deposits     3,786     3,607       3,766       3,791       3,702     7,393     6,465
Subordinated debentures and subordinated notes     1,051     1,041       456       246       243     2,092     480
Other borrowed funds     560     282       170       183       264     842     610
Total interest expense     7,627     6,908       6,142       5,757       5,521     14,535     10,017
                                           
Net interest income     35,305     32,643       32,184       33,675       33,541     67,948     67,769
Provision for loan losses     1,510     6,145       9,500       28,200       11,000     7,655     27,000
Net interest income after provision for loan losses     33,795     26,498       22,684       5,475       22,541     60,293     40,769
                                           
Noninterest income:                                          
Customer service fees     2,199     2,266       1,755       1,523       1,447     4,465     2,851
Loan fees     1,106     834       750       806       719     1,940     1,418
Gain on sale of available-for-sale securities, net     294     -       -       -       -     294     -
Gain (loss) on sale of held for sale loans, net     222     (138 )     (1,445 )     -       -     84     41
Gain on sale of guaranteed portion of loans, net     878     1,927       379       968       858     2,805     1,996
Other     1,000     606       729       794       758     1,606     1,631
Total noninterest income     5,699     5,495       2,168       4,091       3,782     11,194     7,937
                                           
Noninterest expense:                                          
Salaries and employee benefits     12,653     12,406       11,804       11,925       11,461     25,059     23,440
Occupancy     2,048     1,997       2,060       2,194       2,035     4,045     4,065
Professional and regulatory fees     1,899     2,397       2,421       2,180       2,435     4,296     4,357
Data processing     995     908       1,023       921       945     1,903     1,915
Software license and maintenance     438     489       571       580       528     927     1,004
Marketing     163     199       232       283       301     362     599
Loan related     301     600       1,464       1,287       801     901     1,044
Real estate acquired by foreclosure, net     223     292       382       2,105       381     515     681
Other     891     1,551       996       1,908       1,788     2,442     3,057
Total noninterest expense     19,611     20,839       20,953       23,383       20,675     40,450     40,162
                                           
Income (loss) before income taxes     19,883     11,154       3,899       (13,817 )     5,648     31,037     8,544
Provision (benefit) for income taxes     6,985     3,942       1,355       (4,831 )     2,017     10,927     3,074
Net income (loss)   $ 12,898   $ 7,212     $ 2,544     $ (8,986 )   $ 3,631   $ 20,110   $ 5,470



                                             
    As of and For the Quarter Ended   As of and For the
Six Months Ended
 
    Jun 30,
2017
  Mar 31,
2017
  Dec 31,
2016
  Sep 30,
2016
  Jun 30,
2016
  Jun 30,
2017
  Jun 30,
2016
 
                                               
    (Dollars in thousands, except per share data)              
Per Share Data (Common Stock):                                            
Basic earnings (loss) per common share   $ 0.35   $ 0.19   $ 0.07   $ (0.25 )   $ 0.10   $ 0.54   $ 0.15  
Diluted earnings (loss) per share     0.35     0.19     0.07     (0.25 )     0.10     0.54     0.15  
Book value per common share     12.20     11.81     11.64     11.62       11.88     12.20     11.88  
Tangible book value per common share (1)     9.65     9.25     9.06     9.01       9.25     9.65     9.25  
                                             
Common Stock Data:                                            
Shares outstanding at period end     37,035     37,015     36,988     36,683       36,620     37,035     36,620  
Weighted average basic shares outstanding for the period     37,023     36,990     36,731     36,657       36,613     37,007     36,660  
Weighted average diluted shares outstanding for the period     37,264     37,238     36,937     36,657       36,613     37,234     36,665  
                                             
Selected Performance Metrics:                                            
Return on average assets(2)     1.26 %   0.73 %   0.25 %   (0.92 )%     0.38 %   1.00 %   0.29 %
Pre-tax, pre-provision return on average assets(1)(2)     2.09     1.75     1.34     1.47       1.76     1.92     1.89  
Return on average equity(2)     11.62     6.71     2.37     (8.23 )     3.35     9.21     2.53  
Return on average tangible common equity(1)(2)     15.04     8.88     3.35     (10.25 )     4.62     12.02     3.57  
Efficiency ratio     47.83     54.64     60.99     61.92       55.39     51.11     53.05  
Loans to deposits ratio     92.95     88.18     91.81     91.91       99.44     92.95     99.44  
Noninterest expense to average assets(2)     1.92     2.10     2.10     2.39       2.19     2.01     2.13  
                                             
Green Bancorp Capital Ratios:                                            
Average shareholders’ equity to average total assets     10.9 %   10.8 %   10.8 %   11.2 %     11.4 %   10.9 %   11.5 %
Tier 1 capital to average assets (leverage)     9.3     9.1     9.1     9.1       9.6     9.3     9.6  
Common equity tier 1 capital     10.1     10.0     9.7     9.5       9.5     10.1     9.5  
Tier 1 capital to risk-weighted assets     10.5     10.4     10.1     9.8       9.8     10.5     9.8  
Total capital to risk-weighted assets     12.4     12.3     11.8     10.9       11.1     12.4     11.1  
Tangible common equity to tangible assets (1)     8.7     8.6     8.5     8.6       9.1     8.7     9.1  
                                             
Green Bank Capital Ratios:                                            
Tier 1 capital to average assets (leverage)     9.6 %   9.1 %   9.0 %   9.0   %   9.4 %   9.6 %   9.4 %
Common equity tier 1 capital     10.9     10.4     10.0     9.7       9.6     10.9     9.6  
Tier 1 capital to risk-weighted assets     10.9     10.4     10.0     9.7       9.6     10.9     9.6  
Total capital to risk-weighted assets     11.7     11.2     10.8     10.7       10.9     11.7     10.9  

 ___________________

(1) Refer to “Notes to Financial Highlights” at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure.
(2) Annualized ratio.

                                                       
                                                       
    For the Quarter Ended  
    June 30, 2017     March 31, 2017     June 30, 2016  
    Average
Outstanding
Balance
  Interest
Earned/
 Interest
Paid
  Average
Yield/
Rate
    Average
Outstanding
Balance
  Interest
Earned/
 Interest
Paid
  Average
Yield/
Rate
    Average
Outstanding
Balance
  Interest
Earned/
 Interest
Paid
  Average
Yield/
Rate
 
                                                             
    (Dollars in thousands)  
Assets                                                      
Interest-Earning Assets:                                                      
Loans   $ 3,072,674     $ 38,476   5.02 %   $ 3,035,146     $ 36,371   4.86 %   $ 3,188,438     $ 37,711   4.76 %
Securities     678,886       3,928   2.32       571,875       2,583   1.83       267,019       988   1.49  
Other investments     22,932       197   3.45       18,908       188   4.03       24,542       205   3.36  
Interest earning deposits in financial institutions and federal funds sold     124,663       331   1.06       186,418       409   0.89       122,262       158   0.52  
Total interest-earning assets     3,899,155       42,932   4.42 %     3,812,347       39,551   4.21 %     3,602,261       39,062   4.36 %
                                                       
Allowance for loan losses     (32,036 )                 (27,669 )                 (42,020 )            
Noninterest-earning assets     229,267                   232,066                   243,591              
Total assets   $ 4,096,386                 $ 4,016,744                 $ 3,803,832              
                                                       
Liabilities and Shareholders’ Equity                                                      
Interest-bearing liabilities:                                                      
Interest-bearing demand and savings deposits   $ 1,361,929     $ 2,230   0.66 %   $ 1,382,680     $ 1,978   0.58 %   $ 1,151,728     $ 1,312   0.46 %
Certificates and other time deposits     1,309,477       3,786   1.16       1,325,329       3,607   1.10       1,424,437       3,702   1.05  
Securities sold under agreements to repurchase     4,457       2   0.18       3,494       1   0.12       3,680       1   0.11  
Other borrowed funds     217,896       558   1.03       160,778       281   0.71       165,776       263   0.64  
Subordinated debentures and subordinated notes     47,376       1,051   8.90       47,550       1,041   8.88       13,346       243   7.32  
Total interest-bearing liabilities     2,941,135       7,627   1.04 %     2,919,831       6,908   0.96 %     2,758,967       5,521   0.80 %
                                                       
Noninterest-bearing liabilities:                                                      
Noninterest-bearing demand deposits     692,379                   644,212                   592,649              
Other liabilities     17,538                   17,006                   16,757              
Total liabilities     3,651,052                   3,581,049                   3,368,373              
Shareholders’ equity     445,334                   435,695                   435,459              
Total liabilities and  shareholders’ equity   $ 4,096,386                 $ 4,016,744                 $ 3,803,832              
                                                       
Net interest rate spread               3.38 %               3.25 %               3.56 %
Net interest income and margin(1)         $ 35,305   3.63 %         $ 32,643   3.47 %         $ 33,541   3.74 %

___________________

(1) Net interest margin is equal to net interest income divided by interest-earning assets.

                                     
                                     
    For the Six Months Ended June 30,  
    2017     2016  
    Average
Outstanding
Balance
  Interest
Earned/
 Interest
Paid
  Average
Yield/
Rate
    Average
Outstanding
Balance
  Interest
Earned/
 Interest
Paid
  Average
Yield/
Rate
 
                                         
    (Dollars in thousands)  
Assets                                    
Interest-Earning Assets:                                    
Loans   $ 3,054,013     $ 74,847   4.94 %   $ 3,156,574     $ 75,056   4.78 %
Securities     625,676       6,511   2.10       289,939       2,069   1.44  
Other investments     20,930       385   3.71       23,520       378   3.23  
Interest earning deposits in financial institutions and federal funds sold     155,371       740   0.96       109,835       283   0.52  
Total interest-earning assets     3,855,990       82,483   4.31 %     3,579,868       77,786   4.37 %
                                     
Allowance for loan losses     (29,865 )                 (37,549 )            
Noninterest-earning assets     230,659                   244,309              
Total assets   $ 4,056,784                 $ 3,786,628              
                                     
Liabilities and Shareholders’ Equity                                    
Interest-bearing liabilities:                                    
Interest-bearing demand and savings deposits   $ 1,372,247     $ 4,208   0.62 %   $ 1,109,364     $ 2,462   0.45 %
Certificates and other time deposits     1,317,359       7,393   1.13       1,383,500       6,465   0.94  
Securities sold under agreements to repurchase     3,978       3   0.15       3,901       3   0.15  
Other borrowed funds     189,494       839   0.89       223,307       607   0.55  
Subordinated debentures     47,463       2,092   8.89       13,294       480   7.26  
Total interest-bearing liabilities     2,930,541       14,535   1.00 %     2,733,366       10,017   0.74 %
                                     
Noninterest-bearing liabilities:                                    
Noninterest-bearing demand deposits     668,429                   602,594              
Other liabilities     17,273                   16,706              
Total liabilities     3,616,243                   3,352,666              
Shareholders’ equity     440,541                   433,962              
Total liabilities and  shareholders’ equity   $ 4,056,784                 $ 3,786,628              
                                     
Net interest rate spread               3.31 %               3.63 %
Net interest income and margin(1)         $ 67,948   3.55 %         $ 67,769   3.81 %

___________________

(1) Net interest margin is equal to net interest income divided by interest-earning assets.

                                         
                                        
Yield Trend                                        
      For the Quarter Ended  
      Jun 30,
2017
      Mar 31,
2017
      Dec 31,
2016
      Sep 30,
2016
      Jun 30,
2016
 
                                         
Average yield on interest-earning assets:                                        
Loans, including fees     5.02 %     4.86 %     4.71 %     4.77 %     4.76 %
Securities     2.32       1.83       1.45       1.58       1.49  
Other investments     3.45       4.03       3.93       4.26       3.36  
Interest-earning deposits in financial institutions and federal funds sold     1.07       0.89       0.58       0.51       0.52  
Total interest-earning assets     4.42 %     4.21 %     4.05 %     4.24 %     4.36 %
                                         
Average rate on interest-bearing liabilities:                                        
Interest bearing transaction and savings     0.66 %     0.58 %     0.52 %     0.49 %     0.46 %
Certificates and other time deposits     1.16       1.10       1.08       1.07       1.05  
Other borrowed funds     1.01       0.70       0.44       0.48       0.63  
Subordinated debentures     8.90       8.88       8.10       7.28       7.32  
Total interest-bearing liabilities     1.04 %     0.96 %     0.85 %     0.81 %     0.80 %
                                         
Net interest rate spread     3.38 %     3.25 %     3.20 %     3.43 %     3.56 %
Net interest margin (1)     3.63 %     3.47 %     3.40 %     3.62 %     3.74 %

___________________

(1) Net interest margin is equal to net interest income divided by interest-earning assets.

                                 
                                 
 Supplemental Yield Trend                                
      For the Quarter Ended  
      Jun 30,
2017
    Mar 31,
2017
    Dec 31,
2016
    Sep 30,
2016
    Jun 30,
2016
 
                                 
Average yield on loans, excluding fees (2)      4.59 %    4.42 %    4.29 %    4.20 %    4.29 %
Average cost of interest-bearing deposits      0.90      0.84      0.81      0.80      0.78  
Average cost of total deposits, including noninterest-bearing      0.72      0.68      0.66      0.65      0.64  

___________________

(2) Average yield on loans, excluding fees, is equal to loan interest income divided by average loan principal.

                                                                                 
                                                                                 
Portfolio Composition                                                                                
      Jun 30, 2017       Mar 31, 2017       Dec 31, 2016       Sep 30, 2016       Jun 30, 2016  
                                                                                 
      (Dollars in thousands)  
Period End Balances                                                                                
                                                                                 
Commercial & industrial     $ 1,144,332     36.6 %     $ 1,012,982     33.6 %     $ 1,053,925     34.0 %     $ 1,004,414     33.0 %     $ 1,128,541     35.4 %
Real Estate:                                                                                
Owner occupied commercial       407,317     13.0         415,595     13.8         394,210     12.7         387,032     12.7         366,587     11.5  
Commercial       1,109,237     35.5         1,129,031     37.5         1,143,751     36.9         1,109,642     36.4         1,078,434     33.8  
Construction, land & land development       201,992     6.5         201,946     6.7         249,704     8.1         278,323     9.1         334,925     10.5  
Residential mortgage       239,834     7.7         241,839     8.0         245,191     7.9         256,840     8.4         270,337     8.5  
Consumer and Other       20,643     0.7         10,882     0.4         11,439     0.4         11,367     0.4         10,612     0.3  
Total loans held for investment     $ 3,123,355     100.0 %     $ 3,012,275     100.0 %     $ 3,098,220     100.0 %     $ 3,047,618     100.0 %     $ 3,189,436     100.0 %
                                                                                 
Deposits:                                                                                
Noninterest-bearing     $ 683,656     20.3 %     $ 705,480     20.7 %     $ 650,064     19.3 %     $ 618,408     18.6 %     $ 583,347     18.2 %
Interest-bearing transaction       207,106     6.2         208,213     6.1         168,994     5.0         171,457     5.2         164,584     5.1  
Money market       1,016,453     30.3         1,089,699     31.9         1,084,350     32.1         1,019,901     30.8         926,159     28.9  
Savings       100,748     3.0         107,076     3.1         105,843     3.1         113,189     3.4         118,217     3.7  
Certificates and other time deposits       1,352,459     40.2         1,305,670     38.2         1,365,449     40.5         1,392,944     42.0         1,414,954     44.1  
Total deposits     $ 3,360,422     100.0 %     $ 3,416,138     100.0 %     $ 3,374,700     100.0 %     $ 3,315,899     100.0 %     $ 3,207,261     100.0 %
                                                                                 
Loan to Deposit Ratio       92.9 %             88.2 %             91.8 %             91.9 %             99.4 %      


                                           
Asset Quality                                          
    As of and for the Quarter Ended   As of and for the
 Six Months Ended
    Jun 30,
2017
  Mar 31,
2017
  Dec 31,
2016
  Sep 30,
2016
  Jun 30,
2016
  Jun 30,
2017
  Jun 30,
2016
                                                     
    (Dollars in thousands)            
Nonperforming Assets:                                          
Nonaccrual loans   $ 43,257     $ 59,338     $ 66,673     $ 84,491     $ 66,628     $ 43,257     $ 66,628  
Accruing loans 90 or more days past due     2,651       5,500       1,169       3,664       14,320       2,651       14,320  
Restructured loans—nonaccrual     19,362       10,276       10,133       8,961       853       19,362       853  
Restructured loans—accrual     7,637       11,068       16,518       5,378       5,469       7,637       5,469  
Total nonperforming loans     72,907       86,182       94,493       102,494       87,270       72,907       87,270  
Nonperforming loans held for sale     1,700       -       6,598       24,773       -       1,700       -  
Real estate acquired through foreclosure     921       1,356       5,220       2,801       6,216       921       6,216  
Total nonperforming assets   $ 75,528     $ 87,538     $ 106,311     $ 130,068     $ 93,486     $ 75,528     $ 93,486  
                                           
Charge-offs:                                          
Commercial and industrial   $ (466 )   $ (1,312 )   $ (17,378 )   $ (37,789 )   $ (3,336 )   $ (1,778 )   $ (13,216 )
Owner occupied commercial real estate     (961 )     -       (250 )     (978 )     (177 )     (961 )     (177 )
Commercial real estate     -       -       -       (492 )     -       -       -  
Construction, land & land development     -       (95 )     (1,631 )     -       -       (95 )     -  
Residential mortgage     -       -       (30 )     (512 )     -       -       (6 )
Other consumer     (126 )     (8 )     (15 )     (54 )     (37 )     (134 )     (57 )
Total charge-offs     (1,553 )     (1,415 )     (19,304 )     (39,825 )     (3,550 )     (2,968 )     (13,456 )
                                           
Recoveries:                                          
Commercial and industrial   $ 73     $ 585     $ 206     $ 37     $ 175     $ 658     $ 757  
Owner occupied commercial real estate     -       4       -       17       -       4       -  
Commercial real estate     3       -       -       -       -       3       -  
Construction, land & land development     -       74       5       6       47       74       73  
Residential mortgage     16       57       33       45       20       73       77  
Other consumer     6       122       13       11       14       128       22  
Total recoveries     98       842       257       116       256       940       929  
                                           
Net charge-offs   $ (1,455 )   $ (573 )   $ (19,047 )   $ (39,709 )   $ (3,294 )   $ (2,028 )   $ (12,527 )
                                           
Allowance for loan losses at end of period   $ 31,991     $ 31,936     $ 26,364     $ 35,911     $ 47,420     $ 31,991     $ 47,420  
                                           
Asset Quality Ratios:                                          
Nonperforming assets to total assets     1.80 %     2.15 %     2.64 %     3.31 %     2.44 %     1.80 %     2.44 %
Nonperforming loans to total loans     2.33       2.86       3.05       3.36       2.74       2.33       2.74  
Total classified assets to total regulatory capital     28.70       38.00       39.09       54.12       49.03       28.70       49.03  
Allowance for loan losses to total loans     1.02       1.06       0.85       1.18       1.49       1.02       1.49  
Net charge-offs to average loans outstanding     0.05       0.02       0.63       1.26       0.10       0.07       0.40  
                                                         

We identify certain financial measures discussed in this release as being “non‑GAAP financial measures.” In accordance with the SEC’s rules, we classify a financial measure as being a non‑GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States in our statements of income, balance sheet or statements of cash flows. Non‑GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non‑GAAP financial measures or both.

The non‑GAAP financial measures that we discuss in this release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non‑GAAP financial measures that we discuss in this release may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non‑GAAP financial measures we have discussed in this release when comparing such non‑GAAP financial measures.

Tangible Book Value Per Common Share.  Tangible book value is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding. For tangible book value, the most directly comparable financial measure calculated in accordance with GAAP is our book value.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:

                                           
                                           
      Jun 30, 2017     Mar 31, 2017     Dec 31, 2016     Sep 30, 2016     Jun 30, 2016  
                                           
      (Dollars in thousands, except per share data)
Tangible Common Equity                                          
Total shareholders’ equity     $ 451,741     $ 437,288     $ 430,482     $ 426,215     $ 434,941  
Adjustments:                                          
Goodwill       85,291       85,291       85,291       85,291       85,291  
Core deposit intangibles       9,215       9,595       9,975       10,356       10,758  
Tangible common equity     $ 357,235     $ 342,402     $ 335,216     $ 330,568     $ 338,892  
Common shares outstanding (1)       37,035       37,015       36,988       36,683       36,620  
Book value per common share (1)     $ 12.20     $ 11.81     $ 11.64     $ 11.62     $ 11.88  
Tangible book value per common share (1)     $ 9.65     $ 9.25     $ 9.06     $ 9.01     $ 9.25  

___________________

(1) Excludes the dilutive effect of common stock issuable upon exercise of outstanding stock options.  The number of exercisable options outstanding was 465,281 as of Jun 30, 2017; 472,653 as of Mar 31, 2017; 493,241 as of Dec 31, 2016; 792,619 as of Sep 30, 2016; and 785,352 as of Jun 30, 2016.

Tangible Common Equity to Tangible Assets.  Tangible common equity to tangible assets is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as shareholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders’ equity to total assets.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders’ equity and assets while not increasing our tangible common equity or tangible assets.

The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:

                                 
    Jun 30, 2017   Mar 31, 2017   Dec 31, 2016   Sep 30, 2016   Jun 30, 2016  
                                 
    (Dollars in thousands)
Tangible Common Equity                                
Total shareholders’ equity   $  451,741   $  437,288   $  430,482   $  426,215   $  434,941  
Adjustments:                                
Goodwill      85,291      85,291      85,291      85,291      85,291  
Core deposit intangibles      9,215      9,595      9,975      10,356      10,758  
Tangible common equity   $  357,235   $  342,402   $  335,216   $  330,568   $  338,892  
Tangible Assets                                
Total assets   $  4,185,697   $  4,072,000   $  4,024,822   $  3,929,836   $  3,827,447  
Adjustments:                                
Goodwill      85,291      85,291      85,291      85,291      85,291  
Core deposit intangibles      9,215      9,595      9,975      10,356      10,758  
Tangible assets   $  4,091,191   $  3,977,114   $  3,929,556   $  3,834,189   $  3,731,398  
Tangible Common Equity to Tangible Assets      8.73 %    8.61 %    8.53 %    8.62 %    9.08 %
                                 

Return on Average Tangible Common Equity.  Return on average tangible common equity is a non‑GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) average tangible common equity as average shareholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; (b) net income less the effect of intangible assets as net income plus amortization of core deposit intangibles, net of taxes; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of intangible assets.  Goodwill and other intangible assets, including core deposit intangibles, have the effect of increasing total shareholders’ equity, while not increasing our tangible common equity.  This measure is particularly relevant to acquisitive institutions who may have higher balances in goodwill and other intangible assets than non-acquisitive institutions.

The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income excluding amortization of core deposit intangibles, net of tax to net income and presents our return on average tangible common equity:

                                                         
    For the Quarter Ended     For the
 Six Months Ended
 
    Jun 30,
2017
    Mar 31,
2017
    Dec 31,
2016
    Sep 30,
2016
    Jun 30,
2016
    Jun 30,
2017
    Jun 30,
2016
 
                                                           
    (Dollars in thousands)  
                                                         
Net income (loss) adjusted for amortization of core deposit intangibles                                                        
Net income (loss)   $ 12,898     $ 7,212     $ 2,544     $ (8,986 )     $ 3,631     $ 20,110     $ 5,470  
Adjustments:                                                        
Plus: Amortization of core deposit intangibles     380       380       382       402         402       760       804  
Less: Tax benefit at the statutory rate     133       133       134       141         141       266       281  
Net income (loss) adjusted for amortization of core deposit intangibles   $ 13,145     $ 7,459     $ 2,792     $ (8,725 )     $ 3,892     $ 20,604     $ 5,993  
                                                         
Average Tangible Common Equity                                                        
Total average shareholders’ equity   $ 445,334     $ 435,695     $ 427,550     $ 434,620       $ 435,459     $ 440,541     $ 433,962  
Adjustments:                                                        
Average goodwill     85,291       85,291       85,291       85,291         85,291       85,291       85,290  
Average core deposit intangibles     9,461       9,844       10,223       10,618         11,020       9,652       11,220  
Average tangible common equity   $ 350,582     $ 340,560     $ 332,036     $ 338,711       $ 339,148     $ 345,598     $ 337,452  
Return on Average Tangible Common Equity (Annualized)     15.04 %     8.88 %     3.35 %     (10.25 ) %     4.62 %     12.02 %     3.57 %
                                                           

Allowance for Loan Losses less Allowance for Loan Losses on Acquired Loans to Total Loans excluding Acquired Loans.  The allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans is a non‑GAAP measure used by management to evaluate the Company’s financial condition.  Due to the application of purchase accounting, we use this non-GAAP ratio that excludes that impact of these items to evaluate our allowance for loan losses to total loans.  We calculate: (a) total allowance for loan losses less allowance for loan losses on acquired loans as allowance for loan losses less the allowance for loan losses on acquired loans; (b) total loans excluding acquired loans as total loans less the carrying value of acquired loans accounted for under ASC topics 310-20 and 310-30; and (c) allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans as the allowance for loan losses less allowance for loan losses on acquired loans (as calculated in clause (a)) divided by total loans excluding acquired loans (as calculated in clause (b)).  For allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans, the most directly comparable financial measure calculated in accordance with GAAP is allowance for loan losses to total loans.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in the allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans.  The acquired loans may have a premium or discount associated with them that includes a potential credit loss component with similar characteristics to the allowance for loan losses.  This measure reports the allowance for loan loss coverage to only those loans not accounted for pursuant to ASC topics 310-20 and 310-30 which may assist the investor in evaluating the allowance coverage of loans excluding acquired loans.

The following table reconciles, as of the dates set forth below, allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans:

                                           
      Jun 30, 2017     Mar 31, 2017     Dec 31, 2016     Sep 30, 2016     Jun 30, 2016  
                                           
      (Dollars in thousands)
Allowance for loan losses less allowance for loan losses on acquired loans                                          
Allowance for loan losses     $ 31,991     $ 31,936     $ 26,364     $ 35,911     $ 47,420  
Less: Allowance for loan losses on acquired loans       1,462       2,825       2,509       5,235       3,219  
Total allowance for loan losses less allowance for loan losses on acquired loans     $ 30,529     $ 29,111     $ 23,855     $ 30,676     $ 44,201  
                                           
Total loans excluding acquired loans                                          
Total loans     $ 3,123,355     $ 3,012,275     $ 3,098,220     $ 3,047,618     $ 3,189,436  
Less: Carrying value of acquired loans accounted for under ASC Topics 310-20 and 310-30       646,601       730,064       796,292       895,559       974,372  
Total loans excluding acquired loans     $ 2,476,754     $ 2,282,211     $ 2,301,928     $ 2,152,059     $ 2,215,064  
Allowance for loan losses less allowance for loan losses on acquired loans to total loans excluding acquired loans       1.23 %     1.28 %     1.04 %     1.43 %     2.00 %
                                           

Allowance for Loan Losses plus Acquired Loan Net Discount to Total Loans adjusted for Acquired Loan Net Discount.  Allowance for loan losses plus acquired loan net discount to total loans adjusted for acquired loan net discount is a non‑GAAP measure used by management to evaluate the Company’s financial condition. We calculate: (a) allowance for loan losses plus acquired loan net discount as allowance for loan losses plus acquired loan net discount, net of accumulated amortization; (b) total loans adjusted for acquired loan net discount as total loans plus acquired loan net discount, net of accumulated amortization; and (c) allowance for loan losses plus acquired loan net discount to total loans adjusted for acquired loan net discount as allowance for loan losses plus acquired loan net discount (as calculated in clause (a)) divided by total loans adjusted for acquired loan net discount (as calculated in clause (b)).  For allowance for loan losses to total loans excluding acquired loans, the most directly comparable financial measure calculated in accordance with GAAP is allowance for loan losses to total loans.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in the allowance for loan losses plus the acquired loan net discount to total loans adjusted for the acquired loan net discount.  This measure reports the combined allowance for loan loss and acquired loan net discount (or premium) as a percentage of loans inclusive of the acquired loan net discount (or premium) which may assist the investor in evaluating allowance coverage on loans inclusive of additional discount or premium resulting from purchase accounting adjustments.

The following table reconciles, as of the dates set forth below, allowance for loan losses plus acquired loans net discount to total loans adjusted for acquired loan net discount:

                                           
      Jun 30, 2017     Mar 31, 2017     Dec 31, 2016     Sep 30, 2016     Jun 30, 2016  
                                           
      (Dollars in thousands)
Allowance for loan losses plus acquired loan net discount                                          
Allowance for loan losses at end of period     $ 31,991     $ 31,936     $ 26,364     $ 35,911     $ 47,420  
Plus: Net discount on acquired loans       6,240       7,314       9,937       13,698       20,412  
Total allowance plus acquired loan net discount     $ 38,231     $ 39,250     $ 36,301     $ 49,609     $ 67,832  
                                           
Total loans adjusted for acquired loan net discount                                          
Total loans     $ 3,123,355     $ 3,012,275     $ 3,098,220     $ 3,047,618     $ 3,189,436  
Plus: Net discount on acquired loans       6,240       7,314       9,937       13,698       20,412  
Total loans adjusted for acquired loan net discount     $ 3,129,595     $ 3,019,589     $ 3,108,157     $ 3,061,316     $ 3,209,848  
Allowance for loan losses plus acquired loan net discount loans to total loans adjusted for acquired loan net discount       1.22 %     1.30 %     1.17 %     1.62 %     2.11 %
                                           

Pre-tax, Pre-provision Return on Average Assets.  Pre-tax, pre-provision return on average assets is a non‑GAAP measure used by management to evaluate the Company’s financial performance. We calculate: (a) pre-tax, pre-provision net income as net income (loss) plus provision (benefit) for income taxes, plus provision for loan losses and (b) return (as described in clause (a)) divided by total average assets.  For pre-tax, pre-provision net income, the most directly comparable financial measure calculated in accordance with GAAP is net income and for pre-tax, pre-provision return on average assets is return on average assets.

We believe that this measure is important to many investors in the marketplace who are interested in understanding the operating performance of the company before provision for loan losses, which can vary from quarter to quarter, and income taxes.  

The following table reconciles, as of the dates set forth below, pre-tax, pre-provision return on average assets:

                                                           
      For the Quarter Ended     For the
  Six Months Ended
 
      Jun 30,
2017
    Mar 31,
2017
    Dec 31,
2016
    Sep 30,
2016
    Jun 30,
2016
    Jun 30, 2017     Jun 30, 2016  
                                                           
      (Dollars in thousands)  
Pre-Tax, Pre-Provision Net Income                                                          
Net Income (loss)     $ 12,898     $ 7,212     $ 2,544     $ (8,986 )     $ 3,631     $ 20,110     $ 5,470  
Plus: Provision (benefit) for income taxes       6,985       3,942       1,355       (4,831 )       2,017       10,928       3,074  
Plus: Provision for loan losses       1,510       6,145       9,500       28,200         11,000       7,655       27,000  
Total pre-tax, pre-provision net income     $ 21,393     $ 17,299     $ 13,399     $ 14,383       $ 16,648     $ 38,692     $ 35,544  
                                                           
Total Average Assets     $ 4,096,386     $ 4,016,744     $ 3,974,244     $ 3,894,127       $ 3,803,832     $ 4,056,784     $ 3,786,628  
Pre-Tax, Pre-Provision Return on Average Assets (Annualized)       2.09 %     1.75 %     1.34 %     1.47 %       1.76 %     1.92 %     1.89 %


Media Contact:
Mike Barone
713-275-8243
mbarone@greenbank.com

Investor Relations:
713-275-8220
investors@greenbank.com

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