Exhibit



	At or For the Quarters Ended
(unaudited)	Mar 31, 2019			Dec 31, 2018			Mar 31, 2018
	(Dollars in thousands, except per share amounts)
Net interest income	$	81,164		$	84,299		$	78,613
Provision for credit losses	9,800			—			15,663
Non-interest income	9,894			12,264			12,898
Non-interest expense	44,307			42,868			43,879
Income tax expense (benefit)	7,871			(4,074		)	6,207
Net income	$	29,080		$	57,769		$	25,762

Basic earnings per common share	$	0.61		$	1.22		$	0.55
Basic core (non-GAAP) earnings per common share¹	$	0.62		$	0.91		$	0.52
Weighted average common shares outstanding - basic	47,246,282			47,159,578			46,872,333
Estimated Tier 1 common equity risk-based capital ratio²	10.92		%	11.05		%	9.91		%
Total equity to total assets	12.00		%	12.09		%	11.05		%
Tangible common equity to tangible assets - Non-GAAP¹	10.28		%	10.32		%	9.22		%



	For the Quarters Ended
(unaudited)	March 31, 2019			December 31, 2018			March 31, 2018
	(Dollars in thousands)
Interest income:
Loans held for investment, excluding Warehouse Purchase Program loans	$	91,360		$	90,273		$	80,348
Warehouse Purchase Program loans	8,771			10,472			10,071
Loans held for sale	170			286			212
Securities	4,526			4,640			4,066
Interest-earning deposit accounts	1,277			1,507			969
Total interest income	$	106,104		$	107,178		$	95,666
Net interest income	$	81,164		$	84,299		$	78,613
Net interest margin	3.89		%	3.98		%	3.85		%
Selected average balances:
Total earning assets	$	8,433,085		$	8,413,462		$	8,252,997
Total loans held for investment	7,528,531			7,454,810			7,343,539
Total securities	670,599			667,939			648,534
Total deposits	6,754,156			6,790,754			6,726,289
Total borrowings	882,061			851,084			877,502
Total non-interest-bearing demand deposits	1,688,937			1,778,681			1,576,792
Total interest-bearing liabilities	5,947,280			5,863,158			6,026,999

Net interest income for the quarter ended March 31, 2019 was $81.2 million, a $3.1 million, or 3.7%, decrease from the fourth quarter of 2018 and a $2.6 million, or 3.2%, increase from the first quarter of 2018. The $3.1 million decrease from the fourth quarter of 2018 was primarily driven by a change in the mix of deposits, increased average rates on deposits and borrowings and decreased volume in the Warehouse Purchase Program loan portfolio compared to the linked quarter. Yields earned and rates paid are calculated using the actual number of days in each month over the actual number of days in the year, with the exception of the securities portfolios and the consumer real estate and loans held for sale loan portfolios, which are calculated using 30 days in a month over 360 days in a year. Accordingly, interest income on certain portfolios, such as the commercial real estate, commercial and industrial and Warehouse Purchase Program loan portfolios, was negatively impacted by the first quarter of 2019 having two fewer days than the fourth quarter of 2018.

Interest income earned on Warehouse Purchase Program loans decreased by $1.7 million from the fourth quarter of 2018, as the average balance decreased by $139.9 million, which was partially offset by increases in interest income earned on consumer real estate and commercial and industrial loans. Interest income earned on the consumer real estate portfolio increased by $906,000, driven by a $76.4 million linked-quarter increase in the average balance. The average balance of commercial and industrial loans increased by $63.4 million from the fourth quarter of 2018, resulting in a $185,000 increase in interest income. A $70.2 million increase in the average balance of the commercial real estate portfolio from the fourth quarter of 2018 was offset by two less days of interest income in the first quarter of 2019, as well as a two basis point decrease in the average yield, resulting in a $92,000 decrease in interest income.

The $2.6 million increase in net interest income compared to the first quarter of 2018 was primarily due to a $9.7 million increase in interest income on loans, which was driven by higher yields earned on all loan portfolios, as well as increased volume in all loan portfolios with the exception of Warehouse Purchase Program loans and loans held for sale. The average balance of commercial and industrial loans increased by $183.5 million from the first quarter of 2018, while the average yield earned on this portfolio increased by 71 basis points for the same period, resulting in a $6.0 million increase in interest income. The average yield earned on the commercial and industrial portfolio for the quarter ended March 31, 2019 was positively impacted by three increases in the Fed Funds rate totaling 75 basis points since March 31, 2018. The average balance of consumer real estate loans increased by $176.7 million from the first quarter of 2018, while the average yield earned on this portfolio increased by 25 basis points, which led to a $2.9 million increase in interest income. A $55.1 million increase in the average balance of commercial real estate loans compared to the first quarter of 2018, as well as a nine basis point increase in the average yield, resulted in a $1.4 million increase in interest income. The average balance of Warehouse Purchase Program loans decreased by $241.3 million from the first quarter of 2018, while the average yield earned on this portfolio increased by 68 basis points, resulting in a $1.3 million decrease in interest income compared to the first quarter of 2018.

Interest expense for the quarter ended March 31, 2019 increased by $2.1 million, or 9.0%, compared to the linked quarter, which was primarily due to higher average deposit and borrowing rates, as well as increases of $73.4 million and $24.6 million in the average balances of time and interest-bearing demand deposits, respectively, compared to the fourth quarter of 2018. An 11 basis point increase in the average rate paid on savings and money market deposits compared to the linked quarter offset a $44.9 million decrease in the average balance of these deposits. Interest expense on borrowings increased by $480,000, due to a $31.0 million increase in the average balance of borrowings compared to the fourth quarter of 2018, as well as an 18 basis point increase in the average rate paid on borrowed funds.

Compared to the first quarter of 2018, interest expense for the quarter ended March 31, 2019 increased by $7.9 million, or 46.2%, primarily due to higher average savings, money market and time deposit and borrowing rates, as well as a $343.5 million increase in the average balance of time deposits. A 38 basis point increase in the average rate paid on savings and money market deposits compared to the first quarter of 2018 offset a $257.4 million decrease in the average balance of these deposits. A 77 basis point increase in the average rate paid on borrowings compared to the first quarter of 2018, as well as a $4.6 million increase in the average balance, resulted in a $1.7 million year-over-year increase in interest expense on borrowed funds.

Non-interest income for the first quarter of 2019 was $9.9 million, a $2.4 million, or 19.3%, decrease from the fourth quarter of 2018 and a $3.0 million, or 23.3%, decrease from the first quarter of 2018. Service charges and other fees decreased by $2.7 million compared to the fourth quarter of 2018, primarily resulting from lower commercial loan fee income (consisting of syndication, arrangement, non-usage and pre-payment fees), as well as decreased debit card interchange, non-sufficient funds and Warehouse Purchase Program income. Other non-interest income for the first quarter of 2019 included a $21,000 net increase in the value of investments in community development-oriented private equity funds used for Community Reinvestment Act purposes (the “CRA Funds”), down from a $379,000 net increase in the CRA Funds for the fourth quarter of 2018, which was offset by a $366,000 interest payment received from the Internal Revenue Service in the first quarter of 2019 related to a prior year tax refund, as well as a $216,000 linked-quarter increase in interest rate swap fee income.

The $3.0 million decrease in non-interest income from the first quarter of 2018 was primarily due to a $2.2 million decrease in gain (loss) on sale and disposition of assets, primarily due to a $2.3 million insurance settlement received in the first quarter of 2018 related to a misappropriation of approximately $2.5 million in vault cash from one of the former LegacyTexas Bank branches it acquired in 2015. Service charges and other fees decreased by $672,000 from the first quarter of 2018, which was driven by lower commercial loan fee income, as well as decreased title premium income and Warehouse Purchase Program income. Net gains on the sale of mortgage loans held for sale during the first quarter of 2019 decreased by $284,000 compared to the same period in 2018, which included gains recognized on $49.1 million of one-to-four family mortgage loans that were sold or committed for sale and fair value changes on mortgage derivatives and mortgage fees collected during the 2018 period, compared to $32.6 million for the 2019 period.

Non-interest expense for the first quarter of 2019 was $44.3 million, up $1.4 million, or 3.4%, from the fourth quarter of 2018 and up $428,000, or 1.0%, from the first quarter of 2018. Salaries and employee benefits expense increased by $3.1 million from the fourth quarter of 2018, which was driven by higher share-based compensation expense in the 2019 period related to fluctuations in the Company’s share price, as well as increased payroll taxes related to Social Security wage base limits starting over at the beginning of the year and higher salary costs attributable to merit increases granted in the first quarter of 2019. The linked-quarter increase in salaries and employee benefits expense was partially offset by a $736,000 decrease in outside professional services expense, primarily related to lower consulting costs recorded in the 2019 period. Outside professional services expense for the fourth quarter of 2018 included $256,000 in expenses related to a $15.3 million one-time tax benefit recorded in the fourth quarter of 2018 stemming from the December 2017 enactment of the Tax Cuts and Jobs Act. Advertising expense decreased by $398,000 from the fourth quarter of 2018, primarily due to a lower number of events and sponsorships in the first quarter of 2019, while regulatory assessments expense declined by $268,000 on a linked-quarter basis due to a notice of preliminary assessment credit received from the FDIC in the first quarter of 2019, which may reduce future FDIC assessment payments.

The $428,000 increase in non-interest expense from the first quarter of 2018 was primarily due to a $1.2 million increase in data processing expense due to system upgrades, technology refreshments and outsourcing certain segments of its data processing. The year-over-year increase in data processing expense was partially offset by a $536,000 decline in regulatory assessments expense from the first quarter of 2018, due to the above-mentioned FDIC notice of preliminary assessment credit, as well as a lower assessment rate in the 2019 period. Additionally, salaries and employee benefits expense decreased by $205,000 from the first quarter of 2018, as the 2018 period included a $1,000 bonus paid to all full-time employees whose salary was under $100,000 (awarded in connection with the enactment of the Tax Cuts and Jobs Act), which resulted in $679,000 of additional salary expense recorded in the first quarter of 2018. This year-over-year decrease in salaries and employee benefits expense was partially offset by higher salary costs attributable to merit increases granted in the first quarter of 2019, as well as higher share-based compensation expense in the 2019 period related to fluctuations in the Company’s share price.

Compared to March 31, 2018, gross loans held for investment at March 31, 2019, excluding Warehouse Purchase Program loans, grew $375.6 million, which included growth in all loan portfolios. Commercial and industrial and consumer real estate loans increased by $103.3 million and $170.7 million, respectively, at March 31, 2019, compared to March 31, 2018, while commercial real estate loans increased by $69.0 million for the same period. Additionally, construction and land and other consumer loans increased by $30.3 million and $2.4 million, respectively, compared to March 31, 2018.

Reserve-based energy loans, which are secured by deeds of trust on properties containing proven oil and natural gas reserves and included in the Company’s commercial and industrial loan portfolio, totaled $499.8 million at March 31, 2019, down $20.6 million from $520.4 million at December 31, 2018 and down $24.3 million from $524.1 million at March 31, 2018. In addition to reserve-based energy loans, the Company has loans categorized as “Midstream and Other,” which are typically related to the transmission of oil and natural gas and would only be indirectly impacted by declining commodity prices. At March 31, 2019, “Midstream and Other” loans had a total outstanding balance of $22.1 million, down $16.0 million from $38.1 million at December 31, 2018 and down $1.1 million from $23.2 million at March 31, 2018.

Credit Quality



	At or For the Quarters Ended
(unaudited)	Mar 31, 2019			Dec 31, 2018			Mar 31, 2018
	(Dollars in thousands)
Net charge-offs (recoveries)	$	(263	)	$	(1,074	)	$	12,428
Net charge-offs (recoveries)/Average loans held for investment, excluding Warehouse Purchase Program loans	(0.02		)%	(0.07		)%	0.78		%
Net charge-offs (recoveries)/Average loans held for investment	(0.01		)	(0.06		)	0.68
Provision for credit losses	$	9,800		$	—		$	15,663
Non-performing loans (“NPLs”)	61,028			22,421			49,836
NPLs/Total loans held for investment, excluding Warehouse Purchase Program loans	0.88		%	0.33		%	0.76		%
NPLs/Total loans held for investment	0.76			0.29			0.66
Non-performing assets (“NPAs”)	$	61,810		$	23,754		$	57,996
NPAs to total assets	0.66		%	0.26		%	0.65		%
NPAs/Loans held for investment and foreclosed assets, excluding Warehouse Purchase Program loans	0.89			0.35			0.88
NPAs/Loans held for investment and foreclosed assets	0.77			0.31			0.76
Allowance for loan losses	$	77,530		$	67,428		$	74,508
Allowance for loan losses/Total loans held for investment, excluding Warehouse Purchase Program loans	1.12		%	0.99		%	1.13		%
Allowance for loan losses/Total loans held for investment	0.96			0.87			0.98
Allowance for loan losses/Total loans held for investment, excluding acquired loans & Warehouse Purchase Program loans¹	1.16			1.04			1.20
Allowance for loan losses/NPLs	127.04			300.74			149.51

The Company recorded a provision for credit losses of $9.8 million for the quarter ended March 31, 2019, compared to $15.7 million for the quarter ended March 31, 2018. The Company did not record a provision for credit losses for the quarter ended December 31, 2018. The increase in provision expense on a linked-quarter basis was primarily due to a $38.6 million increase in non-performing loans from December 31, 2018, which included a $6.1 million increase in non-performing energy loans and the placement of the Company’s only remaining corporate healthcare finance relationship totaling $19.3 million on non-accrual status during the first quarter of 2019. The increase in non-performing loans from December 31, 2018 also included a $7.4 million personal loan to one of the owners of an energy company that was used to recapitalize the company. This loan is collateralized by the borrower’s stock in the energy company, as well as other personal assets, and was reported at March 31, 2019 as a non-performing loan in the commercial and industrial, excluding energy category.



	March 31, 2019		December 31, 2018		March 31, 2018		Linked-Quarter Change			Year-over-Year Change
	(Dollars in thousands)
Commercial real estate	$	20,561	$	17,322	$	19,929	$	3,239		$	632
Commercial and industrial, excluding energy	8,631		7,582		11,037		1,049			(2,406		)
Energy	48,434		48,434		27,255		—			21,179
Consumer	2,761		1,289		1,377		1,472			1,384
Total criticized (all performing)	$	80,387	$	74,627	$	59,598	$	5,760		$	20,789

Commercial real estate	$	1,442	$	1,463	$	3,865	$	(21	)	$	(2,423	)
Commercial and industrial, excluding energy	1,000		1,019		1,325		(19		)	(325		)
Energy	46,095		48,260		38,456		(2,165		)	7,639
Consumer	1,316		1,445		2,627		(129		)	(1,311		)
Total classified (performing)	49,853		52,187		46,273		(2,334		)	3,580

Commercial real estate	6,623		159		3,748		6,464			2,875
Commercial and industrial, excluding energy	27,395		968		25,037		26,427			2,358
Energy	21,866		15,742		15,418		6,124			6,448
Consumer	5,144		5,552		5,633		(408		)	(489		)
Total classified (non-performing)	61,028		22,421		49,836		38,607			11,192

Total classified loans	$	110,881	$	74,608	$	96,109	$	36,273		$	14,772

The Company will host an investor conference call to review the results on Wednesday, April 24, 2019 at 8 a.m. Central Time. Participants may pre-register for the call by visiting http://dpregister.com/10128898 and will receive a unique PIN, which can be used when dialing in for the call. This will allow attendees to enter the call immediately. Alternatively, participants may call (toll-free) 877-513-4119 at least five minutes prior to the call to be placed into the call by an operator. International participants are asked to call 1-412-902-4148 and participants in Canada are asked to call (toll-free) 855-669-9657.

This document and other filings by LegacyTexas Financial Group, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), as well as press releases or other public or stockholder communications released by the Company, may contain forward-looking statements, including, but not limited to, (i) statements regarding the financial condition, results of operations and business of the Company, (ii) statements about the Company’s plans, objectives, expectations and intentions and other statements that are not historical facts and (iii) other statements identified by the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “intends” or similar expressions that are intended to identify “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current beliefs and expectations of the Company’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: the expected cost savings, synergies and other financial benefits from acquisition or disposition transactions might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters might be greater than expected; changes in economic conditions; legislative changes; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company’s ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company’s market area; fluctuations in the price of oil, natural gas and other commodities; competition; changes in management’s business strategies; changes in the regulatory and tax environments in which the Company operates, including the impact of the “Tax Cuts and Jobs Act” (the “TCJA”) on the Company’s deferred tax asset, and the anticipated impact of the TCJA on the Company’s future earnings; and other factors set forth in the Company’s filings with the SEC.

The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. When considering forward-looking statements, keep in mind these risks and uncertainties. Undue reliance should not be placed on any forward-looking statement, which speaks only as of the date made. Refer to the Company’s periodic and current reports filed with the SEC for specific risks that could cause actual results to be significantly different from those expressed or implied by any forward-looking statements.



(Dollars in thousands) ASSETS	March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018
Cash and due from financial institutions	$	55,472		$	60,416		$	64,681		$	60,104		$	51,824
Short-term interest-bearing deposits in other financial institutions	219,051			208,777			189,634			199,807			243,080
Total cash and cash equivalents	274,523			269,193			254,315			259,911			294,904
Securities available for sale, at fair value	479,426			471,746			455,454			445,613			431,413
Securities held to maturity	135,276			146,046			145,148			155,252			156,898
Total securities	614,702			617,792			600,602			600,865			588,311
Loans held for sale	11,380			23,193			22,175			33,548			31,123
Loans held for investment:
Loans held for investment - Warehouse Purchase Program	1,096,160			960,404			1,054,505			1,291,129			1,019,840
Loans held for investment	6,944,731			6,790,723			6,764,052			6,671,139			6,569,123
Gross loans	8,052,271			7,774,320			7,840,732			7,995,816			7,620,086
Less: allowance for loan losses and deferred fees on loans held for investment	(66,712		)	(57,031		)	(56,499		)	(55,321		)	(66,878		)
Net loans	7,985,559			7,717,289			7,784,233			7,940,495			7,553,208
FHLB stock and other restricted securities, at cost	56,044			56,226			60,596			66,061			46,842
Bank-owned life insurance	59,377			59,036			58,692			58,345			57,999
Premises and equipment, net	107,684			73,073			72,291			70,893			70,427
Goodwill	178,559			178,559			178,559			178,559			178,559
Other assets	69,624			79,974			73,504			73,957			75,374
Total assets	$	9,346,072		$	9,051,142		$	9,082,792		$	9,249,086		$	8,865,624

LIABILITIES AND SHAREHOLDERS’ EQUITY
Non-interest-bearing demand	$	1,752,694		$	1,773,762		$	1,798,109		$	1,721,380		$	1,681,067
Interest-bearing demand	884,494			826,755			780,474			867,323			996,737
Savings and money market	2,492,226			2,455,787			2,562,399			2,580,017			2,707,046
Time	1,948,011			1,785,411			1,638,776			1,712,628			1,569,557
Total deposits	7,077,425			6,841,715			6,779,758			6,881,348			6,954,407
FHLB advances	820,084			825,409			932,317			1,065,941			604,562
Repurchase agreements	37,277			50,340			40,408			41,330			76,610
Subordinated debt	135,135			135,012			134,890			134,767			134,645
Accrued expenses and other liabilities	155,064			104,299			155,820			124,250			115,906
Total liabilities	8,224,985			7,956,775			8,043,193			8,247,636			7,886,130
Common stock	487			485			485			483			483
Additional paid-in capital	625,405			619,983			617,270			611,967			609,046
Retained earnings	508,887			491,948			444,848			409,765			389,653
Accumulated other comprehensive income (loss), net	(2,433		)	(6,658		)	(11,481		)	(9,109		)	(7,899		)
Unearned Employee Stock Ownership Plan (ESOP) shares	(11,259		)	(11,391		)	(11,523		)	(11,656		)	(11,789		)
Total shareholders’ equity	1,121,087			1,094,367			1,039,599			1,001,450			979,494
Total liabilities and shareholders’ equity	$	9,346,072		$	9,051,142		$	9,082,792		$	9,249,086		$	8,865,624

Consolidated Quarterly Statements of Income (unaudited)



	For the Quarters Ended															First Quarter 2019 Compared to:
	Mar 31, 2019			Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Fourth Quarter 2018					First Quarter 2018
Interest and dividend income							(Dollars in thousands)
Loans, including fees	$	100,301		$	101,031		$	102,267		$	98,570		$	90,631		$	(730	)	(0.7	)%	$	9,670		10.7	%
Taxable securities	3,602			3,463			3,254			3,132			2,911			139			4.0		691			23.7
Nontaxable securities	343			595			614			641			675			(252		)	(42.4	)	(332		)	(49.2	)
Interest-bearing deposits in other financial institutions	1,277			1,507			1,368			1,097			969			(230		)	(15.3	)	308			31.8
FHLB and Federal Reserve Bank stock and other	581			582			644			551			480			(1		)	(0.2	)	101			21.0
	106,104			107,178			108,147			103,991			95,666			(1,074		)	(1.0	)	10,438			10.9
Interest expense
Deposits	18,215			16,634			15,077			13,732			12,032			1,581			9.5		6,183			51.4
FHLB advances	4,456			4,000			5,198			4,131			2,680			456			11.4		1,776			66.3
Repurchase agreements and other borrowings	2,269			2,245			2,205			2,199			2,341			24			1.1		(72		)	(3.1	)
	24,940			22,879			22,480			20,062			17,053			2,061			9.0		7,887			46.2
Net interest income	81,164			84,299			85,667			83,929			78,613			(3,135		)	(3.7	)	2,551			3.2
Provision for credit losses	9,800			—			2,656			17,478			15,663			9,800			N/M		(5,863		)	(37.4	)
Net interest income after provision for credit losses	71,364			84,299			83,011			66,451			62,950			(12,935		)	(15.3	)	8,414			13.4
Non-interest income
Service charges and other fees	7,255			9,923			8,626			8,844			7,927			(2,668		)	(26.9	)	(672		)	(8.5	)
Net gain on sale of mortgage loans held for sale	1,525			1,499			1,597			1,668			1,809			26			1.7		(284		)	(15.7	)
Bank-owned life insurance income	482			482			482			479			447			—			—		35			7.8
Net gain (loss) on securities transactions	6			—			(10		)	—			(128		)	6			100.0		134			N/M
Gain (loss) on sale and disposition of assets	(14		)	(56		)	977			(153		)	2,213			42			(75.0)		(2,227		)	N/M
Other	640			416			1,555			14			630			224			53.8		10			1.6
	9,894			12,264			13,227			10,852			12,898			(2,370		)	(19.3	)	(3,004		)	(23.3	)



	For the Quarters Ended											First Quarter 2019 Compared to:
	Mar 31, 2019		Dec 31, 2018			Sep 30, 2018		Jun 30, 2018		Mar 31, 2018		Fourth Quarter 2018					First Quarter 2018

Non-interest expense			(Dollars in thousands)
Salaries and employee benefits	26,871		23,728			25,053		24,313		27,076		3,143			13.2		(205		)	(0.8	)
Advertising	903		1,301			824		1,358		888		(398		)	(30.6	)	15			1.7
Occupancy and equipment	3,899		3,843			3,960		3,980		3,860		56			1.5		39			1.0
Outside professional services	1,285		2,021			1,151		1,382		1,250		(736		)	(36.4	)	35			2.8
Regulatory assessments	618		886			750		731		1,154		(268		)	(30.2	)	(536		)	(46.4	)
Data processing	5,933		6,168			5,362		5,145		4,703		(235		)	(3.8	)	1,230			26.2
Office operations	2,335		2,249			2,232		2,224		2,300		86			3.8		35			1.5
Other	2,463		2,672			2,860		3,058		2,648		(209		)	(7.8	)	(185		)	(7.0	)
	44,307		42,868			42,192		42,191		43,879		1,439			3.4		428			1.0
Income before income tax expense (benefit)	36,951		53,695			54,046		35,112		31,969		(16,744		)	(31.2	)	4,982			15.6
Income tax expense (benefit)	7,871		(4,074		)	11,225		7,275		6,207		11,945			N/M		1,664			26.8
Net income	$	29,080	$	57,769		$	42,821	$	27,837	$	25,762	$	(28,689	)	(49.7	)%	$	3,318		12.9	%

Selected Quarterly Financial Highlights (unaudited)



	At or For the Quarters Ended
	March 31, 2019			December 31, 2018			March 31, 2018
SHARE DATA:	(Dollars in thousands, except per share amounts)
Weighted average common shares outstanding - basic	47,246,282			47,159,578			46,872,333
Weighted average common shares outstanding - diluted	47,835,693			47,714,421			47,564,587
Shares outstanding at end of period	48,704,070			48,505,261			48,264,966
Income available to common shareholders¹	$	28,955		$	57,534		$	25,687
Basic earnings per common share	0.61			1.22			0.55
Basic core (non-GAAP) earnings per common share²	0.62			0.91			0.52
Diluted earnings per common share	0.61			1.21			0.54
Dividends declared per share	0.25			0.22			0.16
Total shareholders’ equity	1,121,087			1,094,367			979,494
Common shareholders’ equity per share (book value per share)	23.02			22.56			20.29
Tangible book value per share - Non-GAAP²	19.35			18.88			16.59
Market value per share for the quarter:
High	43.88			43.59			45.82
Low	33.08			30.46			41.68
Close	37.39			32.09			42.82
KEY RATIOS:
Return on average common shareholders’ equity	10.50		%	21.75		%	10.59		%
Core (non-GAAP) return on average common shareholders’ equity²	10.50			16.07			10.08
Return on average assets	1.31			2.61			1.19
Core (non-GAAP) return on average assets²	1.31			1.93			1.13
Efficiency ratio (GAAP basis)	48.66			44.39			47.95
Core (non-GAAP) efficiency ratio²	48.66			44.13			48.40
Estimated Tier 1 common equity risk-based capital ratio³	10.92			11.05			9.91
Estimated total risk-based capital ratio³	13.39			13.48			12.49
Estimated Tier 1 risk-based capital ratio³	11.06			11.19			10.06
Estimated Tier 1 leverage ratio³	10.98			10.76			9.64
Total equity to total assets	12.00			12.09			11.05
Tangible equity to tangible assets - Non-GAAP²	10.28			10.32			9.22
Number of employees - full-time equivalent	875			866			851



	At or for the Quarter Ended
	March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018
Loans held for investment:	(Dollars in thousands)
Commercial real estate	$	3,122,726		$	3,026,754		$	3,012,352		$	3,021,148		$	3,053,750
Warehouse Purchase Program	1,096,160			960,404			1,054,505			1,291,129			1,019,840
Commercial and industrial	2,070,715			2,057,791			2,111,510			2,051,955			1,967,443
Construction and land	282,463			270,629			278,278			265,745			252,213
Consumer real estate	1,423,095			1,390,378			1,318,038			1,287,703			1,252,433
Other consumer	45,732			45,171			43,874			44,588			43,284
Gross loans held for investment	$	8,040,891		$	7,751,127		$	7,818,557		$	7,962,268		$	7,588,963
Non-performing assets:
Commercial real estate	$	6,623		$	159		$	3,739		$	3,656		$	3,748
Commercial and industrial	49,261			16,710			7,178			10,225			40,455
Consumer real estate	5,123			5,506			6,617			5,652			5,548
Other consumer	21			46			50			77			85
Total non-performing loans	61,028			22,421			17,584			19,610			49,836
Foreclosed assets	782			1,333			698			7,341			8,160
Total non-performing assets	$	61,810		$	23,754		$	18,282		$	26,951		$	57,996
Total non-performing assets to total assets	0.66		%	0.26		%	0.20		%	0.29		%	0.65		%
Total non-performing loans to total loans held for investment, excluding Warehouse Purchase Program loans	0.88		%	0.33		%	0.26		%	0.29		%	0.76		%
Total non-performing loans to total loans held for investment	0.76		%	0.29		%	0.22		%	0.25		%	0.66		%
Allowance for loan losses to non-performing loans	127.04		%	300.74		%	377.35		%	328.63		%	149.51		%
Allowance for loan losses to total loans held for investment, excluding Warehouse Purchase Program loans	1.12		%	0.99		%	0.98		%	0.97		%	1.13		%
Allowance for loan losses to total loans held for investment	0.96		%	0.87		%	0.85		%	0.81		%	0.98		%
Allowance for loan losses to total loans held for investment, excluding acquired loans and Warehouse Purchase Program loans ¹	1.16		%	1.04		%	1.03		%	1.02		%	1.20		%



	At or for the Quarter Ended
	March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018

Troubled debt restructured loans (“TDRs”):				(Dollars in thousands)
Performing TDRs:
Commercial real estate	$	134		$	136		$	139		$	141		$	143
Commercial and industrial	—			—			—			—			1
Consumer real estate	722			788			786			561			574
Other consumer	1			2			4			9			14
Total performing TDRs	$	857		$	926		$	929		$	711		$	732
Non-performing TDRs:²
Commercial real estate	$	29		$	31		$	3,605		$	33		$	35
Commercial and industrial	7,999			661			2,299			2,095			16,183
Consumer real estate	447			467			495			789			890
Other consumer	4			1			2			7			9
Total non-performing TDRs	$	8,479		$	1,160		$	6,401		$	2,924		$	17,117
Allowance for loan losses:
Balance at beginning of period	$	67,428		$	66,354		$	64,445		$	74,508		$	71,301
Provision expense for loans	9,839			—			2,700			17,600			15,635
Charge-offs	(359		)	(2,590		)	(922		)	(27,737		)	(12,527		)
Recoveries	622			3,664			131			74			99
Balance at end of period	$	77,530		$	67,428		$	66,354		$	64,445		$	74,508
Net charge-offs (recoveries):
Commercial real estate	$	—		$	—		$	—		$	236		$	3
Commercial and industrial	(463		)	(1,355		)	537			27,261			12,214
Consumer real estate	3			37			47			(9		)	(11		)
Other consumer	197			244			207			175			222
Total net charge-offs (recoveries)	$	(263	)	$	(1,074	)	$	791		$	27,663		$	12,428
Allowance for off-balance sheet lending-related commitments
Provision expense (benefit) for credit losses	$	(39	)	$	—		$	(44	)	$	(122	)	$	28

Average Balances and Yields/Rates (unaudited)



	For the Quarters Ended
	March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018
Loans:	(Dollars in thousands)
Commercial real estate	$	3,048,087		$	2,977,919		$	3,016,889		$	3,055,139		$	2,993,024
Warehouse Purchase Program	724,070			864,012			1,097,879			1,075,262			965,320
Commercial and industrial	2,088,056			2,024,676			2,088,318			2,002,490			1,904,515
Construction and land	276,642			272,631			271,829			260,560			270,899
Consumer real estate	1,404,292			1,327,912			1,295,353			1,265,751			1,227,556
Other consumer	45,339			44,559			44,508			43,779			44,891
Less: deferred fees and allowance for loan loss	(57,955		)	(56,899		)	(55,974		)	(66,746		)	(62,666		)
Total loans held for investment	7,528,531			7,454,810			7,758,802			7,636,235			7,343,539
Loans held for sale	15,347			24,279			26,121			29,378			20,988
Securities	670,599			667,939			678,483			667,183			648,534
Overnight deposits	218,608			266,434			272,670			233,335			239,936
Total interest-earning assets	$	8,433,085		$	8,413,462		$	8,736,076		$	8,566,131		$	8,252,997
Deposits:
Interest-bearing demand	$	800,557		$	775,921		$	760,889		$	954,960		$	970,998
Savings and money market	2,487,833			2,532,732			2,654,990			2,578,205			2,745,192
Time	1,776,829			1,703,421			1,683,475			1,632,697			1,433,307
FHLB advances and other borrowings	882,061			851,084			1,154,079			1,018,945			877,502
Total interest-bearing liabilities	$	5,947,280		$	5,863,158		$	6,253,433		$	6,184,807		$	6,026,999

Total assets	$	8,891,059		$	8,850,435		$	9,167,607		$	8,996,036		$	8,682,461
Non-interest-bearing demand deposits	$	1,688,937		$	1,778,681		$	1,752,095		$	1,694,082		$	1,576,792
Total deposits	$	6,754,156		$	6,790,754		$	6,851,449		$	6,859,944		$	6,726,289
Total shareholders’ equity	$	1,107,719		$	1,062,331		$	1,022,032		$	994,574		$	973,187



	For the Quarters Ended
	March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018		March 31, 2018
Yields/Rates:
Loans:
Commercial real estate	5.18	%	5.20	%	5.15	%	5.09	%	5.09	%
Warehouse Purchase Program	4.91	%	4.81	%	4.68	%	4.53	%	4.23	%
Commercial and industrial	5.98	%	6.00	%	5.78	%	5.71	%	5.27	%
Construction and land	6.03	%	5.87	%	5.41	%	5.35	%	5.17	%
Consumer real estate	4.81	%	4.81	%	4.67	%	4.66	%	4.56	%
Other consumer	5.88	%	5.80	%	5.81	%	5.74	%	5.62	%
Total loans held for investment	5.38	%	5.37	%	5.22	%	5.16	%	4.98	%
Loans held for sale	4.43	%	4.71	%	4.52	%	4.46	%	4.04	%
Securities	2.70	%	2.78	%	2.66	%	2.59	%	2.51	%
Overnight deposits	2.37	%	2.24	%	1.99	%	1.89	%	1.64	%
Total interest-earning assets	5.09	%	5.06	%	4.92	%	4.87	%	4.69	%
Deposits:
Interest-bearing demand	0.76	%	0.69	%	0.65	%	0.88	%	0.81	%
Savings and money market	1.13	%	1.02	%	0.92	%	0.79	%	0.75	%
Time	2.23	%	2.05	%	1.80	%	1.62	%	1.43	%
FHLB advances and other borrowings	3.09	%	2.91	%	2.55	%	2.49	%	2.32	%
Total interest-bearing liabilities	1.70	%	1.55	%	1.43	%	1.30	%	1.15	%
Net interest spread	3.39	%	3.51	%	3.49	%	3.57	%	3.54	%
Net interest margin	3.89	%	3.98	%	3.90	%	3.93	%	3.85	%
Cost of deposits (including non-interest-bearing demand)	1.09	%	0.97	%	0.87	%	0.80	%	0.73	%



	At or For the Quarters Ended
	March 31, 2019		December 31, 2018			September 30, 2018		June 30, 2018		March 31, 2018
	(Dollars in thousands, except per share amounts)
Reconciliation of Core (non-GAAP) to GAAP Net Income and Earnings per Share (calculated net of estimated tax rate of 21%)
GAAP net income available to common shareholders¹	$	28,955	$	57,534		$	42,672	$	27,770	$	25,687
Distributed and undistributed earnings to participating securities¹	125		235			149		67		75
GAAP net income	29,080		57,769			42,821		27,837		25,762
(Gain) on one-time tax adjustment²	—		(15,289		)	—		—		—
Expenses related to above tax adjustment	—		202			—		—		—
(Gain) loss on sale of branch locations and land	—		—			372		126		—
Insurance settlement proceeds from pre-acquisition fraud	—		—			—		—		(1,778		)
One-time employee bonus related to tax law change	—		—			—		—		537
Core (non-GAAP) net income	$	29,080	$	42,682		$	43,193	$	27,963	$	24,521
Average shares for basic earnings per share	47,246,282		47,159,578			47,105,655		47,000,405		46,872,333
Basic GAAP earnings per share	$	0.61	$	1.22		$	0.91	$	0.59	$	0.55
Basic core (non-GAAP) earnings per share	$	0.62	$	0.91		$	0.92	$	0.59	$	0.52
Average shares for diluted earnings per share	47,835,693		47,714,421			47,755,441		47,618,157		47,564,587
Diluted GAAP earnings per share	$	0.61	$	1.21		$	0.89	$	0.58	$	0.54
Diluted core (non-GAAP) earnings per share	$	0.61	$	0.89		$	0.90	$	0.59	$	0.52
Reconciliation of Core (non-GAAP) to GAAP Non-Interest Income and Non-interest Expense (gross of tax)
GAAP non-interest income	$	9,894	$	12,264		$	13,227	$	10,852	$	12,898
Insurance settlement proceeds from pre-acquisition fraud	—		—			—		—		(2,250		)
(Gain) loss on sale of branch locations and land	—		—			471		160		—
Core (non-GAAP) non-interest income	$	9,894	$	12,264		$	13,698	$	11,012	$	10,648
GAAP non-interest expense	$	44,307	$	42,868		$	42,192	$	42,191	$	43,879
Expenses related to above tax adjustments	—		(256		)	—		—		—
One-time employee bonus related to tax law change	—		—			—		—		(679		)
Core (non-GAAP) non-interest expense	$	44,307	$	42,612		$	42,192	$	42,191	$	43,200



	At or For the Quarters Ended
	March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018
Reconciliation of Core (non-GAAP) to GAAP Efficiency Ratio (gross of tax)				(Dollars in thousands, except per share amounts)
GAAP efficiency ratio:
Non-interest expense	$	44,307		$	42,868		$	42,192		$	42,191		$	43,879
Net interest income plus non-interest income	91,058			96,563			98,894			94,781			91,511
Efficiency ratio - GAAP basis	48.66		%	44.39		%	42.66		%	44.51		%	47.95		%
Core (non-GAAP) efficiency ratio:
Core (non-GAAP) non-interest expense	$	44,307		$	42,612		$	42,192		$	42,191		$	43,200
Net interest income plus core (non-GAAP) non-interest income	91,058			96,563			99,365			94,941			89,261
Efficiency ratio - core (non-GAAP) basis	48.66		%	44.13		%	42.46		%	44.44		%	48.40		%
Calculation of Tangible Book Value per Share:
Total shareholders’ equity	$	1,121,087		$	1,094,367		$	1,039,599		$	1,001,450		$	979,494
Less: Goodwill	(178,559		)	(178,559		)	(178,559		)	(178,559		)	(178,559		)
Identifiable intangible assets, net	(218		)	(245		)	(279		)	(313		)	(347		)
Total tangible shareholders’ equity	$	942,310		$	915,563		$	860,761		$	822,578		$	800,588
Shares outstanding at end of period	48,704,070			48,505,261			48,491,169			48,311,220			48,264,966
Book value per share - GAAP	$	23.02		$	22.56		$	21.44		$	20.73		$	20.29
Tangible book value per share - Non-GAAP	19.35			18.88			17.75			17.03			16.59
Calculation of Tangible Equity to Tangible Assets:
Total assets	$	9,346,072		$	9,051,142		$	9,082,792		$	9,249,086		$	8,865,624
Less: Goodwill	(178,559		)	(178,559		)	(178,559		)	(178,559		)	(178,559		)
Identifiable intangible assets, net	(218		)	(245		)	(279		)	(313		)	(347		)
Total tangible assets	$	9,167,295		$	8,872,338		$	8,903,954		$	9,070,214		$	8,686,718
Equity to assets - GAAP	12.00		%	12.09		%	11.45		%	10.83		%	11.05		%
Tangible equity to tangible assets - Non-GAAP	10.28			10.32			9.67			9.07			9.22
Calculation of Return on Average Assets and Return on Average Equity Ratios (GAAP and Core)
Net income	$	29,080		$	57,769		$	42,821		$	27,837		$	25,762
Core (non-GAAP) net income	29,080			42,682			43,193			27,963			24,521
Average total equity	1,107,719			1,062,331			1,022,032			994,574			973,187
Average total assets	8,891,059			8,850,435			9,167,607			8,996,036			8,682,461
Return on average common shareholders’ equity	10.50		%	21.75		%	16.76		%	11.20		%	10.59		%
Core (non-GAAP) return on average common shareholders’ equity	10.50			16.07			16.90			11.25			10.08
Return on average assets	1.31			2.61			1.87			1.24			1.19
Core (non-GAAP) return on average assets	1.31			1.93			1.88			1.24			1.13


•	Assets of $9.35 billion generated basic earnings per share for the first quarter of 2019 of $0.61 on a GAAP basis and $0.62 on a core (non-GAAP) basis.*


•	Gross loans held for investment at March 31, 2019, excluding Warehouse Purchase Program loans, grew $154.0 million, or 2.3%, from December 31, 2018, which includes linked-quarter increases in all loan portfolios.


•	Total deposits at March 31, 2019 grew $235.7 million, or 3.4%, from December 31, 2018, which includes linked-quarter increases in interest-bearing demand, time and savings and money market deposits.


•	GAAP and core (non-GAAP) return on average assets for the quarter ended March 31, 2019 was 1.31%, compared to GAAP return on average assets of 1.19% and core (non-GAAP) return on average assets of 1.13% for the quarter ended March 31, 2018.*


•	GAAP and core (non-GAAP) efficiency ratio was 48.66% for the quarter ended March 31, 2019, compared to GAAP efficiency ratio of 47.95% and core (non-GAAP) efficiency ratio of 48.40% for the quarter ended March 31, 2018.*


¹	See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.


²	Calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve.


¹	Excludes loans acquired in previous bank acquisitions, which were initially recorded at fair value.


¹	Net of distributed and undistributed earnings to participating securities.


²	Non-performing TDRs are included in the non-performing assets reported above.


¹	Unvested share-based awards that contain nonforfeitable rights to dividends (whether paid or unpaid) are participating securities and are included in the computation of GAAP earnings per share pursuant to the two-class method described in ASC 260-10-45-60B.


²	This one-time income tax benefit resulted from tax rate changes and the favorable outcome of the Company’s change in its tax method of accounting for its loan portfolio, both related to the December 22, 2017 enactment of the Tax Cuts and Jobs Act.