Exhibit 99.1

 

News Release

For Release July 19, 2017

9:00 A.M.

Contact: (803) 951- 2265

Joseph G. Sawyer, EVP & Chief Financial Officer or

Robin D. Brown, EVP & Chief Marketing Officer

First Community Corporation Announces Second Quarter Results and Cash Dividend 

Highlights for Second Quarter of 2017

· Earnings of $1.664 million.

· Diluted EPS of $0.24 per common share.

· Conversion and merger expenses of $399 thousand or $0.04 per common share.

· Total revenue of $9.7 million, an increase of 7.2% on a linked quarter basis.

· Strong financial performance in mortgage and financial planning lines of business. Revenues from mortgage unit increased by 88.2% on a linked quarter basis and 38.1% year-over-year. Revenues from financial planning unit increased by 21.7% on a linked quarter basis and 5.7% year-over-year.

· Stellar credit quality with non-performing assets (NPAs) of 0.42%, past dues of 0.30% and a year-to-date net recovery of $110 thousand.

· Completion of conversion to new operating system; a significant and long term investment in infrastructure.

· Cash dividend of $0.09 per common share, which is the 62^nd consecutive quarter of cash dividends paid to common shareholders.

Lexington, SC – July 19, 2017 Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, reported net income for the second quarter of 2017. Net income for the second quarter of 2017 was $1.664 million as compared to $1.745 million in the second quarter of 2016. Diluted earnings per common share were $0.24 for the second quarter of 2017 as compared to $0.26 for the second quarter of 2016. During the quarter the company recognized $301 thousand or approximately $0.03 per share in non-recurring expenses related to the conversion to the bank’s new operating system.

Year-to-date 2017 net income was $3.420 million compared to $3.213 million during the first six months of 2016, an increase of 6.44%. Diluted earnings per share for the first half of 2017 were $0.50, compared to $0.47 during the same time period in 2016. Mike Crapps, First Community President and CEO, commented, “We are pleased with our results in the second quarter, in particular the growth in revenue from our mortgage and financial planning lines of business. We continue to work diligently to take advantage of the momentum in these areas.” Crapps continued, “During the second quarter, the company completed the conversion to a new operating system. This is a significant and long term investment in our infrastructure that will position us to leverage technology and take advantage of efficiencies now and well into the future. We believe these long term benefits more than offset the short term financial impact we experienced during the second quarter. The vast majority of expenses relating to this conversion project have been recognized and we do not anticipate any future material impact on earnings.”

Cash Dividend and Capital

The Board of Directors approved a cash dividend for the second quarter of 2017. The company will pay a $0.09 per share dividend to holders of the company’s common stock. This dividend is payable August 14, 2017 to shareholders of record as of July 31, 2017. Mr. Crapps commented, “Our entire board is pleased that our performance enables the company to continue its cash dividend for the 62^nd consecutive quarter.”

At June 30, 2017, the company’s regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 10.41%, 15.02%, and 15.89%, respectively. This compares to the same ratios as of June 30, 2016, of 10.24%, 15.30%, and 16.14%, respectively. Additionally, the regulatory capital ratios for the company’s wholly owned subsidiary, First Community Bank, were 9.94%, 14.35%, and 15.23% respectively as of June 30, 2017. The company’s ratio of tangible common equity to tangible assets was 8.69% as of June 30, 2017. Also, as of June 30, 2017, the Common Equity Tier One ratio for the company and the bank were 12.70% and 14.35%, respectively.

Asset Quality

Asset quality remained strong with already sound key credit quality metrics seeing additional improvement. The non-performing assets ratio declined to 0.42% of total assets, as compared to the prior quarter ratio of 0.52%. The nominal level of non-performing assets decreased 18.2% during the quarter to $3.868 million. Past dues were 0.30%, down from 0.41% at March 31, 2017. Again this quarter, there was a net loan recovery. The recovery for the quarter was $55,100 and the year-to-date net recovery is $109,999. The ratio of classified loans plus OREO now stands at 7.81% of total bank regulatory risk-based capital as of June 30, 2017.

Balance Sheet

(Numbers in millions)  

	As of			As of			As of
	6/30/17			3/31/17			12/31/16			$ Variance			% Variance
Assets
Investments	$	259.1		$	262.5		$	272.4		$	(3.4	)		(1.30	%)
Loans		553.4			555.3			546.7			(1.9	)		(0.34	%)
Liabilities
Total Pure Deposits	$	630.3		$	626.4		$	611.9		$	3.9			0.62	%
Certificates of Deposit		142.8			149.2			154.7			(6.4	)		(4.29	%)
Total Deposits	$	773.1		$	775.6		$	766.6		$	(2.5	)		(0.32	%)
Customer Cash Management		17.3			19.4			19.5			(2.1	)		(10.8	%)
FHLB Advances		18.0			15.5			24.0			2.5			16.1	%
Total Funding	$	808.4		$	810.5		$	810.1		$	(2.1	)		(0.26	%)
Cost of Funds*		0.33	%		0.35	%		0.35	%					(2 bps	)
(*including demand deposits)
Cost of Deposits		0.23	%		0.24	%		0.24	%					(1 bps	)

Mr. Crapps commented, “Commercial loan production remained strong at $34.7million, but payoffs offset much of this. During the second quarter, the bank experienced approximately $10.0 million more in payoffs than it has in recent quarters. Even with strong production, this higher than usual payoff activity resulted in a decline in loans of $1.9 million on a linked quarter basis; however, year-to-date loan growth is $6.7 million, a 2.5 % annualized growth rate. Pure deposits, including customer cash management accounts, grew by $1.8 million during the quarter, and year-to-date by $16.2 million, a 5.1% annualized growth rate.”

Revenue

Net Interest Income/Net Interest Margin

Net interest income was $7.0 million for the second quarter of 2017 compared to first quarter net interest income of $7.1 million. Second quarter net interest margin, on a tax equivalent basis, was 3.49% compared to net interest margin of 3.52% in the first quarter. During the first quarter of 2017, net interest margin was positively impacted by approximately 9 basis points as a result of the collection of interest on several non-accrual loans which were paid off during the quarter. Net interest income in the second quarter of 2016 was $6.7 million and net interest margin on a tax equivalent basis was 3.43%. 

Non-Interest Income

Non-interest income, adjusted for securities gains and losses and excluding any loss on the early extinguishment of debt, increased 36.4% on a linked quarter basis to $2.70 million in the second quarter of 2017, up from $1.98 million in the first quarter of this year. Revenues in the mortgage line of business increased 88% on a linked quarter basis to $1.26 million in the second quarter of 2017, up from $670 thousand in the first quarter of 2017. As expected due to seasonal impact, production increased during the second quarter to $34.4 million with yields slightly higher than expected due to a higher concentration of purchase money mortgages. Revenue in the investment advisory line of business increased on a linked quarter basis to $314 thousand in the second quarter of 2017 up from $258 thousand in the first quarter, an increase of 21.7%. Mr. Crapps commented, “Our strategy of multiple revenue streams continues to serve us well as we focus our efforts to accelerate growth in these lines of business. The recent addition of a Director of Mortgage Sales to our mortgage unit will focus on production growth through the addition of mortgage loan officers to the lending team and assisting current lenders with their sales and marketing efforts. This will allow us to more fully leverage the mortgage operations infrastructure that is in place. The financial planning and investment advisory unit has seen a significant increase in Assets Under Management which will provide a strong revenue stream going forward. We are pleased with the activity and momentum in each of these business units.” 

Non-Interest Expense

Expenses related to the proposed acquisition of Cornerstone National Bank ($98 thousand) and non-recurring expenses related to the conversion of the bank’s operating system ($301 thousand) increased the level of non-interest expense during the quarter. The remaining increase in non-interest expense on a linked quarter basis is primarily attributed to the mortgage line of business which had significantly higher production during the quarter. Non-interest expense was $7.37 million in the second quarter of 2017, compared to $6.72 million in the first quarter of 2017. 

*** 

First Community Corporation stock trades on the NASDAQ Capital Market under the symbol “FCCO” and is the holding company for First Community Bank, a local community bank based in the Midlands of South Carolina. First Community Bank is a full service commercial bank offering deposit and loan products and series, residential mortgage lending and financial planning/investment advisory services for businesses and consumers. First Community serves customers in the Midlands, Aiken, and Greenville, South Carolina markets as well as Augusta, Georgia. For more information, visit www.firstcommunitysc.com.

FORWARD-LOOKING STATEMENTS 

This communication includes statements made in respect of the proposed merger involving First Community Corporation (the “Company”) and Cornerstone Bank (“Cornerstone”).Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans, goals, projections and expectations, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors, include, among others, the following: (1) the businesses of First Community and Cornerstone may not be integrated successfully or such integration may take longer to accomplish than expected; (2) the expected cost savings and any revenue synergies from the merger may not be fully realized within the expected timeframes or at all; (3) disruption from the merger may make it more difficult to maintain relationships with clients, associates, or suppliers; (4) the required governmental approvals of the merger may not be obtained on the anticipated proposed terms and schedule or at all; (5) Cornerstone shareholders may not approve the merger; (6) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (7) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the company’s loan portfolio and allowance for loan losses; (8) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (9) changes in the U.S. legal and regulatory framework; (10) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could have a negative impact on the company; (11) technology and cybersercurity risks, including potential business disruptions, reputational risks, and financial losses, associated with potential attacks on or failures by our computer systems and computer systems of our vendors and other third parties; and (12) risks, uncertainties and other factors disclosed in our most recent Annual Report on Form 10-K filed with the SEC, or in any of our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed with the SEC since the end of the fiscal year covered by our most recently filed Annual Report on Form 10-K, which are available at the SEC’s Internet site (http://www.sec.gov). 

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. We can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT 

This material is not a solicitation of any vote or approval of Cornerstone’s shareholders and is not a substitute for the proxy statement/prospectus or any other documents which the Company and Cornerstone may send to their respective shareholders in connection with the proposed merger. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction. 

In connection with the proposed merger with Cornerstone, the Company filed with the SEC a Registration Statement on Form S-4 that includes a proxy statement/prospectus for the shareholders of Cornerstone. The Company also plans to file other documents with the SEC regarding the merger with Cornerstone. Cornerstone will mail the final proxy statement/prospectus to its shareholders. BEFORE MAKING ANY INVESTMENT OR VOTING DECISION, CORNERSTONE INVESTORS ARE URGED TO READ THE PROXY STATEMENT/ PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The proxy statement/prospectus, as well as other filings containing information about the Company, are or will be available, without charge, at the SEC’s website (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/ prospectus can also be obtained, without charge, by directing a request to First Community Corporation, 5455 Sunset Blvd., Lexington, SC 29072, Attention: Michael Crapps.

###

FIRST COMMUNITY CORPORATION

INCOME STATEMENT DATA

(Dollars in thousands, except per share data)

	Three months ended						Three months ended						Six months ended
	June 30,						March 31,						June 30,
	2017			2016			2017			2016			2017			2016
Interest Income	$	7,722		$	7,459		$	7,773		$	7,137		$	15,495		$	14,596
Interest Expense		674			782			712			800			1,386			1,582
Net Interest Income		7,048			6,677			7,061			6,337			14,109			13,014
Provision for Loan Losses		78			217			116			140			194			357
Net Interest Income After Provision		6,970			6,460			6,945			6,197			13,915			12,657
Non-interest Income:
Deposit service charges		348			340			320			347			668			687
Mortgage banking income		1,261			913			670			665			1,931			1,578
Investment advisory fees and non-deposit commissions		314			297			258			291			572			588
Gain on sale of securities		172			64			54			59			226			123
Gain (loss) on sale of other assets		68			(84	)		20			3			88			(81	)
Loss on early extinquishment of debt		(223	)		—			(58	)		—			(281	)		—
Other		705			734			714			724			1,419			1,458
Total non-interest income		2,645			2,264			1,978			2,089			4,623			4,353
Non-interest Expense:
Salaries and employee benefits		4,313			3,833			4,086			3,751			8,399			7,584
Occupancy		539			511			527			559			1,066			1,070
Equipment		506			437			446			429			952			866
Marketing and public relations		298			195			221			94			519			289
FDIC assessment		78			138			78			138			156			276
Other real estate expenses		29			21			27			51			56			72
Amortization of intangibles		74			80			75			83			149			163
Merger expenses		98			—			—			—			98			—
Other		1,435			1,118			1,260			1,237			2,695			2,355
Total non-interest expense		7,370			6,333			6,720			6,342			14,090			12,675
Income before taxes		2,245			2,391			2,203			1,944			4,448			4,335
Income tax expense		581			646			447			476			1,028			1,122
Net Income	$	1,664		$	1,745		$	1,756		$	1,468		$	3,420		$	3,213
Per share data:
Net income, basic	$	0.25		$	0.27		$	0.27		$	0.22		$	0.51		$	0.49
Net income, diluted	$	0.24		$	0.26		$	0.26		$	0.22		$	0.50		$	0.47
Average number of shares outstanding - basic		6,634,462			6,553,752			6,687,942			6,572,969			6,641,405			6,583,687
Average number of shares outstanding - diluted		6,803,370			6,732,574			6,813,460			6,751,074			6,813,307			6,768,617
Shares outstanding period end		6,701,642			6,699,030			6,697,130			6,693,042			6,701,642			6,699,030
Return on average assets		0.73	%		0.80	%		0.78	%		0.68	%		0.76	%		0.74	%
Return on average common equity		7.87	%		8.53	%		8.63	%		7.35	%		8.27	%		7.95	%
Return on average common tangible equity		8.48	%		9.25	%		9.32	%		7.99	%		8.92	%		8.63	%
Net Interest Margin		3.39	%		3.32	%		3.42	%		3.22	%		3.40	%		3.37	%
Net Interest Margin (taxable equivalent)		3.49	%		3.43	%		3.52	%		3.33	%		3.51	%		3.46	%
Efficiency ratio		75.64	%		71.34	%		74.31	%		73.86	%		75.00	%		73.50	%

FIRST COMMUNITY CORPORATION
BALANCE SHEET DATA
(Dollars in thousands, except per share data)
	June 30,			December 31,			June 30
	2017			2016			2016
Total Assets	$	915,462		$	914,793		$	888,837
Other short-term investments (1)		22,356			10,074			10,010
Investment Securities		259,117			272,396			286,766
Loans held for sale		6,590			5,707			7,707
Loans		553,420			546,709			511,303
Allowance for Loan Losses		5,490			5,214			4,877
Goodwill		5,078			5,078			5,078
Other Intangibles		953			1,102			1,257
Total Deposits		773,126			766,622			729,623
Securities Sold Under Agreements to Repurchase		17,319			19,527			21,112
Federal Home Loan Bank Advances		17,997			24,035			32,445
Junior Subordinated Debt		14,964			14,964			14,964
Shareholders’ equity		85,059			81,861			84,211
Book Value Per Common Share	$	12.69		$	12.20		$	12.57
Tangible Book Value Per Common Share	$	11.79		$	11.28		$	11.63
Equity to Assets		9.29	%		8.95	%		9.47	%
Tangible common equity to tangible assets		8.69	%		8.33	%		8.82	%
Loan to Deposit Ratio (excludes held for sale)		71.58	%		71.31	%		70.08	%
Allowance for Loan Losses/Loans		0.99	%		0.95	%		0.95	%

(1) Includes federal funds sold, securities sold under agreements to resell and interest-bearing deposits 

Regulatory Ratios:	June 30,			December 31,			June 30,
	2017			2016			2016
Leverage Ratio		10.41	%		10.23	%		10.24	%
Tier 1 Capital Ratio		15.02	%		14.46	%		15.30	%
Total Capital Ratio		15.89	%		15.28	%		16.14	%
Common Equity Tier 1 ratio		12.70	%		12.18	%		12.81	%
Tier 1 Regulatory Capital	$	93,973		$	91,973		$	89,155
Total Regulatory Capital	$	99,463		$	97,187		$	94,032
Common Equity Capital	$	79,473		$	77,473		$	74,655

Average Balances:	Three months ended				Six months ended
	June 30,				June 30,
	2017		2016		2017		2016
Average Total Assets	$	908,679	$	880,382	$	910,417	$	872,935
Average Loans		558,429		509,489		557,971		500,854
Average Earning Assets		834,447		808,747		836,207		800,583
Average Deposits		771,636		728,403		764,540		722,523
Average Other Borrowings		45,732		63,434		55,640		62,690
Average Shareholders’ Equity		84,765		82,276		83,429		81,304

Asset Quality:	June 30,		March 31,		December 31,
	2017		2017		2016
Loan Risk Rating by Category (End of Period)
Special Mention	$	6,592	$	6,783	$	6,799
Substandard		6,743		7,113		7,930
Doubtful		—		—		—
Pass		546,675		545,593		537,687
	$	560,010	$	559,489	$	552,416
	June 30,		March 31,		December 31,
	2017		2017		2016
Nonperforming Assets:
Non-accrual loans	$	3,030	$	3,465	$	4,049
Other real estate owned		838		1,156		1,146
Accruing loans past due 90 days or more		—		108		53
Total nonperforming assets	$	3,868	$	4,729	$	5,248
Accruing trouble debt restructurings	$	1,733	$	1,762	$	1,770

	Three months ended						Six months ended
	June 30,						June 30,
	2017			2016			2017			2016
Loans charged-off	$	3		$	24		$	32		$	71
Overdrafts charged-off		14			13			36			29
Loan recoveries		(57	)		(6	)		(142	)		(20	)
Overdraft recoveries		(4	)		(4	)		(8	)		(28	)
Net Charge-offs (recoveries)	$	(44	)	$	27		$	(82	)	$	52
Net charge-offs to average loans		N/A			0.00	%		N/A			0.01	%

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and Rates on Average Interest-Bearing Liabilities

	Three months ended June 30, 2017								Three months ended June 30, 2016
	Average			Interest		Yield/			Average			Interest		Yield/
	Balance			Earned/Paid		Rate			Balance			Earned/Paid		Rate
Assets
Earning assets
Loans	$	558,429		$	6,239		4.48	%	$	509,489		$	5,924		4.68	%
Securities:		262,806			1,459		2.23	%		282,453			1,509		2.15	%
Federal funds sold and securities purchased		13,212			24		0.73	%		16,805			26		0.62	%
Total earning assets		834,447			7,722		3.71	%		808,747			7,459		3.71	%
Cash and due from banks		12,572								10,756
Premises and equipment		30,684								30,224
Other assets		36,399								35,423
Allowance for loan losses		(5,423	)							(4,768	)
Total assets	$	908,679							$	880,382
Liabilities
Interest-bearing liabilities
Interest-bearing transaction accounts	$	161,110		$	43		0.11	%	$	153,734		$	43		0.11	%
Money market accounts		168,050			106		0.25	%		164,795			109		0.27	%
Savings deposits		74,800			21		0.11	%		63,742			18		0.11	%
Time deposits		172,115			270		0.63	%		176,871			275		0.63	%
Other borrowings		45,732			234		2.05	%		63,434			337		2.14	%
Total interest-bearing liabilities		621,807			674		0.43	%		622,576			782		0.51	%
Demand deposits		195,561								169,261
Other liabilities		6,546								6,269
Shareholders’ equity		84,765								82,276
Total liabilities and shareholders’ equity	$	908,679							$	880,382
Cost of funds, including demand deposits							0.33	%							0.40	%
Net interest spread							3.28	%							3.20	%
Net interest income/margin				$	7,048		3.39	%				$	6,677		3.32	%
Net interest income/margin FTE basis				$	7,264		3.49	%				$	6,889		3.43	%

FIRST COMMUNITY CORPORATION

Yields on Average Earning Assets and Rates on Average Interest-Bearing Liabilities

	Six months ended June 30, 2017								Six months ended June 30, 2016
	Average			Interest		Yield/			Average			Interest		Yield/
	Balance			Earned/Paid		Rate			Balance			Earned/Paid		Rate
Assets
Earning assets
Loans	$	557,971		$	12,565		4.54	%	$	500,854		$	11,605		4.66	%
Securities:		265,448			2,877		2.19	%		283,185			2,942		2.09	%
Federal funds sold and securities purchased under agreements to resell		12,788			53		0.84	%		16,544			49		0.60	%
Total earning assets		836,207			15,495		3.74	%		800,583			14,596		3.67	%
Cash and due from banks		11,773								10,655
Premises and equipment		30,428								30,160
Other assets		37,356								36,245
Allowance for loan losses		(5,347	)							(4,708	)
Total assets	$	910,417							$	872,935
Liabilities
Interest-bearing liabilities
Interest-bearing transaction accounts	$	158,651			85		0.11	%	$	152,096			89		0.12	%
Money market accounts		168,037			211		0.25	%		165,213			218		0.27	%
Savings deposits		73,478			42		0.12	%		63,039			36		0.11	%
Time deposits		175,163			544		0.63	%		177,806			550		0.62	%
Other borrowings		55,640			504		1.83	%		62,690			689		2.21	%
Total interest-bearing liabilities		630,969			1,386		0.44	%		620,844			1,582		0.51	%
Demand deposits		1,889,211								164,369
Other liabilities		6,808								6,418
Shareholders’ equity		83,429								81,304
Total liabilities and shareholders’ equity	$	910,417							$	872,935
Cost of funds, including demand deposits							0.34	%							0.41	%
Net interest spread							3.30	%							3.16	%
Net interest income/margin				$	14,109		3.40	%				$	13,014		3.27	%
Net interest income/margin FTE basis				$	14,551		3.51	%				$	13,446		3.38	%

The tables below provide a reconciliation of non-GAAP measures to GAAP for the periods indicated:

	June 30,			December 31,			June 30,
Tangible book value per common share	2017			2016			2016
Tangible common equity per common share (non-GAAP)	$	11.79		$	11.28		$	11.63
Effect to adjust for intangible assets		0.90			0.92			0.94
Book value per common share (GAAP)	$	12.69		$	12.20		$	12.57
Tangible common shareholders’ equity to tangible assets
Tangible common equity to tangible assets (non-GAAP)		8.69	%		8.33	%		8.82	%
Effect to adjust for intangible assets		0.60	%		0.62	%		0.65	%
Common equity to assets (GAAP)		9.29	%		8.95	%		9.47	%

Return on average tangible common equity	Three months ended June 30,						Three months ended March 31,						Six months ended June 30,
	2017			2016			2017			2016			2017			2016
Return on average common tangible equity (non-GAAP)		8.48	%		9.25	%		9.32	%		7.99	%		8.92	%		8.63	%
Effect to adjust for intangible assets		(0.61	)%		(0.72	)%		(0.69	)%		(0.64	)%		(0.65	)%		(0.68	)%
Return on average common equity (GAAP)		7.87	%		8.53	%		8.63	%		7.35	%		8.27	%		7.95	%

Certain financial information presented above is determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures include “tangible book value at period end,” “return on average tangible common equity” and “tangible common shareholders’ equity to tangible assets.” “Tangible book value at period end” is defined as total equity reduced by recorded intangible assets divided by total common shares outstanding. “Tangible common shareholders’ equity to tangible assets” is defined as total common equity reduced by recorded intangible assets divided by total assets reduced by recorded intangible assets. Our management believes that these non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare our operating results from period-to-period in a meaningful manner. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.