EX-99.1 2 ex991earningsreleaseq317.htm EXHIBIT 99.1
CONTACT:
Michael Archer
Senior Vice President
Corporate Controller
Camden National Corporation
(800) 860-8821
marcher@camdennational.com
FOR IMMEDIATE RELEASE
CAMDEN NATIONAL CORPORATION REPORTS THIRD QUARTER 2017 NET INCOME
INCREASED 4% AND YEAR-TO-DATE NET INCOME INCREASED 9% OVER LAST YEAR
CAMDEN, Maine, October 31, 2017/PRNewswire/--Camden National Corporation (NASDAQ: CAC; “Camden National” or the “Company”), a $4.0 billion bank holding company headquartered in Camden, Maine, reported net income for the third quarter of 2017 of $11.3 million and diluted earnings per share ("EPS") of $0.72 per share, representing increases over the third quarter of 2016 of 4% and 3%, respectively.
For the nine months ended September 30, 2017, the Company reported net income of $31.6 million and diluted EPS of $2.02 per share, representing increases over the same period last year of 9% and 7%, respectively. For the nine months ended September 30, 2017, the Company reported a return on average assets of 1.07%, a return on average tangible equity (non-GAAP) of 14.40% and an efficiency ratio (non-GAAP) of 56.80%.
“We are extremely pleased to report another quarter with great results," said Gregory A. Dufour, President and Chief Executive Officer of Camden National. "We're seeing the benefits of our investments in people and technology over the past 18 months as Camden National moved up to #2 in deposit market share rankings in the State of Maine, which is the highest of any Maine headquartered bank. We recently enhanced our online treasury management platform, TreasuryLink SM, to expand the depth of our product capabilities for corporate customers. This powerful tool has been instrumental as we onboard several new large deposit relationships, as they now have simple, secure and customizable access to all their banking needs."
Dufour added, "We announced in September two great additions to our senior management team at Camden National — Patricia "Trish" Rose was named Executive Vice President of Retail and Mortgage Banking and Jennifer Mirabile was named Managing Director of Camden National Wealth Management. Both Trish and Jennifer join Camden National with significant backgrounds and experience within their respective industries and we're excited to have them join our team."
During the quarter, Lawrence “Larry” Sterrs was named chair of the Board of Directors of Camden National Corporation and Camden National Bank as the previous chair, Karen Stanley, reached the Company’s mandatory retirement age for directors. “Larry is a seasoned business executive with great experience in board governance and strategic planning,” said Dufour. “We are also grateful for the superb leadership Karen provided the Company for the past 10 years.”

THIRD QUARTER 2017 FINANCIAL HIGHLIGHTS

• | Third quarter 2017 return on average assets was 1.12% and return on average tangible equity (non-GAAP) was 14.85%.

• | Third quarter 2017 efficiency ratio (non-GAAP) was 55.72%.

• | Loan growth was flat during the quarter with year-to-date loan growth of 6%.

FINANCIAL CONDITION
Total assets were $4.0 billion at September 30, 2017, representing an increase of $175.7 million since December 31, 2016. Total loans grew $153.7 million, or 6%, and investment securities increased $18.3 million over the same period last year. On the funding side, total deposits grew $127.9 million, or 5%, while borrowings increased $8.9 million since December 31, 2016.
During the third quarter of 2017, loan balances increased $12.0 million with growth centered in residential mortgages. Year-to-date residential mortgage originations totaled $302.2 million with 51% of the production designated for sale. The Company's focus on low cost deposits has translated into solid growth in average demand and interest checking balance of $41.3 million, or 4%, for the third quarter of 2017 compared to the same period last year.
The Company's asset quality ratios improved in the third quarter of 2017 with the resolution of a large commercial real estate relationship. Non-performing assets decreased $10.8 million in the third quarter of 2017 to $20.1 million at September 30, 2017. Non-performing assets at September 30, 2017 were 0.50% of total assets compared to 0.67% at December 31, 2016. Net charge-offs remained minimal with an annualized net charge-off ratio of 0.07% year-to-date.
Total shareholders’ equity at September 30, 2017 increased 6% to $414.4 million since December 31, 2016. The Company’s capital position remains in excess of regulatory requirements for “well capitalized” status with a total risk-based capital ratio of 14.09%.
FINANCIAL OPERATING RESULTS (linked quarter)
Net income for the third quarter of 2017 was $11.3 million, representing an increase over the second quarter of 2017 of $1.1 million, or 11%. The increase was driven by an increase in revenues (net interest income and non-interest income) of $945,000, a decrease in provision for credit losses of $584,000 and a decrease in non-interest expense of $333,000. The major changes between the third quarter and second quarter of 2017 include:

• | A 2% increase in net interest income primarily due to an increase in average loan balances of $66.9 million, or 2%, which was driven by strong second quarter 2017 loan growth combined with a stable net interest margin of 3.19% for each quarter.

• | A 4% increase in non-interest income to $10.3 million primarily due to the sale of several small lot investment positions totaling $19.4 million in balances that resulted in gains of $827,000 and an increase in mortgage banking income of $139,000. These were partially offset by a decrease of $646,000 in fee income generated from the back-to-back commercial loan swap program.

• | A 42% decrease in provision for credit losses to $817,000 due to an improvement in asset quality with non-performing loans to total loans declining 40 basis points between quarters as well as the incremental provision necessary in the second quarter due to strong loan volume.

• | A 2% decrease in non-interest expense with a number of expense areas trending lower during the quarter driving the efficiency ratio (non-GAAP) to 55.72%.

• | An increase in the effective income tax rate to 32.6%, compared to 31.6% last quarter. The increase in the effective income tax rate was driven by the Company's change in its estimated annual effective tax rate for calendar year 2017 due to an increase in estimated state income/franchise taxes as its business outside of Maine expands and a lower mix of tax-exempt income as a percentage of pre-tax income.

FINANCIAL OPERATING RESULTS (third quarter 2017 compared to third quarter 2016)
Net income for the third quarter of 2017 increased $436,000, or 4%, over the third quarter of 2016. The increase was driven by a decrease in provision for credit losses of $462,000, a decrease in non-interest expense of $324,000 and an increase in revenues of $86,000. The major changes between the third quarter of 2017 and third quarter of 2016 include:

• | A 36% decrease in provision for credit losses driven by lower net charge-offs and improved asset quality.

• | A 1% decrease in non-interest expense driven by a decline in collection costs of $619,000 as the Company exited a significant sub-servicer relationship on December 31, 2016 and no longer incurs related costs.

• | A $788,000, or 3%, increase in net interest income driven by average loan growth of 6%, partially offset by a decrease in the net interest margin of 5 basis points due to a decline in fair value mark accretion and collections on previously charged-off acquired loans. Excluding this non-core income, the Company's net interest margin for the third quarter of 2017 was 3.11% compared to 3.10% for the third quarter of 2016.

• | A $702,000, or 6%, decrease in non-interest income driven by (i) one-time legal proceeds of $638,000 received in the third quarter of 2016; (ii) a decrease in fee income generated from the back-to-back commercial loan swap program of $426,000; (iii) a decrease in mortgage banking income of $331,000; and (iv) a decrease in income from the exiting of a significant sub-servicer relationship. These were partially offset by gains on investment securities in the third quarter of 2017 and an increase in debit card income.

CONFERENCE CALL
Camden National will host a conference call and webcast at 3:30 p.m. eastern time on October 31, 2017 to discuss its third quarter 2017 financial results and outlook. Participants should dial in to the call 10 - 15 minutes before it begins. Information about the conference call is as follows:
Live dial-in (domestic): (888) 349-0139
Live dial-in (international): (412) 542-4154
Live webcast: http://services.choruscall.com/links/cac171031.html
A link to the live webcast will be available on Camden National's website under "Investor Relations" at www.CamdenNational.com prior to the meeting, and a replay of the webcast will be available on Camden National's website following the conference call. The transcript of the conference call will also be available on Camden National's website approximately two days after the conference call.
ABOUT CAMDEN NATIONAL CORPORATION
Camden National Corporation (NASDAQ:CAC), headquartered in Camden, Maine, is the largest publicly traded bank holding company in Northern New England with $4.0 billion in assets and nearly 650 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 that offers an array of consumer and business financial products and services, accompanied by the latest in digital banking technology to empower customers to bank the way they want. Camden National Bank provides personalized service through a network of 60 banking centers, 76 ATMs, and lending offices in New Hampshire and Massachusetts, all complemented by 24/7 live phone support. Comprehensive wealth management, investment, and financial planning services are delivered by Camden National Wealth Management. To learn more, visit www.CamdenNational.com. Member FDIC.

FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, projections and other statements, which are subject to numerous risks, assumptions and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, changes in general economic conditions, operational risks including, but not limited to, cybersecurity, fraud and natural disasters, legislative and regulatory changes that adversely affect the business in which Camden National is engaged, changes in the securities markets and other risks and uncertainties disclosed from time to time in in Camden National’s Annual Report on Form 10-K for the year ended December 31, 2016, as updated by other filings with the Securities and Exchange Commission ("SEC"). Camden National does not have any obligation to update forward-looking statements.
USE OF NON-GAAP MEASURES
In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as the efficiency, and tangible common equity ratios; return on average tangible equity; tangible book value per share; and tax-equivalent net interest income. Management believes these non-GAAP financial measures help investors in understanding the Company's operating performance and trends and allow for better performance comparisons to other financial institutions. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliation to the comparable GAAP financial measure can be found in this document.
ANNUALIZED DATA
Certain returns, yields and performance ratios are presented on an “annualized” basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts.

Selected Financial Data (unaudited)
|  | At or For The Three Months Ended |  | At or For The Nine Months Ended
(In thousands, except number of shares and per share data) |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016 |  | September 30, 2017 |  | September 30, 2016
Financial Condition Data |  |  |  |  |  |  |  |  |  |
Investments |  | $ | 916,018 |  |  | $ | 932,338 |  |  | $ | 906,286 |  |  | $ | 916,018 |  |  | $ | 906,286 |
Loans and loans held for sale |  | 2,761,287 |  |  | 2,747,053 |  |  | 2,616,653 |  |  | 2,761,287 |  |  | 2,616,653 |
Allowance for loan losses |  | 24,413 |  |  | 24,394 |  |  | 23,290 |  |  | 24,413 |  |  | 23,290 |
Total assets |  | 4,039,943 |  |  | 4,036,367 |  |  | 3,903,966 |  |  | 4,039,943 |  |  | 3,903,966 |
Deposits |  | 2,956,413 |  |  | 2,940,866 |  |  | 2,889,225 |  |  | 2,956,413 |  |  | 2,889,225 |
Borrowings |  | 608,607 |  |  | 641,662 |  |  | 559,273 |  |  | 608,607 |  |  | 559,273 |
Shareholders' equity |  | 414,366 |  |  | 406,960 |  |  | 393,181 |  |  | 414,366 |  |  | 393,181 |
Operating Data |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 29,160 |  |  | $ | 28,626 |  |  | $ | 28,372 |  |  | $ | 85,641 |  |  | $ | 84,828 |
Provision for credit losses |  | 817 |  |  | 1,401 |  |  | 1,279 |  |  | 2,797 |  |  | 5,003 |
Non-interest income |  | 10,299 |  |  | 9,888 |  |  | 11,001 |  |  | 28,759 |  |  | 29,470 |
Non-interest expense |  | 21,825 |  |  | 22,158 |  |  | 22,149 |  |  | 65,411 |  |  | 67,388 |
Income before income tax expense |  | 16,817 |  |  | 14,955 |  |  | 15,945 |  |  | 46,192 |  |  | 41,907 |
Income tax expense |  | 5,478 |  |  | 4,721 |  |  | 5,042 |  |  | 14,543 |  |  | 12,742 |
Net income |  | $ | 11,339 |  |  | $ | 10,234 |  |  | $ | 10,903 |  |  | $ | 31,649 |  |  | $ | 29,165 |
Key Ratios |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 1.12 | % |  | 1.03 | % |  | 1.11 | % |  | 1.07 | % |  | 1.02 | %
Return on average equity |  | 10.93 | % |  | 10.17 | % |  | 11.18 | % |  | 10.49 | % |  | 10.29 | %
Net interest margin |  | 3.19 | % |  | 3.19 | % |  | 3.24 | % |  | 3.19 | % |  | 3.31 | %
Non-performing loans to total loans |  | 0.72 | % |  | 1.12 | % |  | 0.98 | % |  | 0.72 | % |  | 0.98 | %
Non-performing assets to total assets |  | 0.50 | % |  | 0.77 | % |  | 0.67 | % |  | 0.50 | % |  | 0.67 | %
Annualized net charge-offs to average loans |  | 0.11 | % |  | 0.11 | % |  | 0.26 | % |  | 0.07 | % |  | 0.15 | %
Tier I leverage capital ratio |  | 9.01 | % |  | 8.92 | % |  | 8.48 | % |  | 9.01 | % |  | 8.48 | %
Total risk-based capital ratio |  | 14.09 | % |  | 13.87 | % |  | 13.60 | % |  | 14.09 | % |  | 13.60 | %
Per Share Data |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.72 |  |  | $ | 0.66 |  |  | $ | 0.70 |  |  | $ | 2.03 |  |  | $ | 1.88 |
Diluted earnings per share |  | $ | 0.72 |  |  | $ | 0.66 |  |  | $ | 0.70 |  |  | $ | 2.02 |  |  | $ | 1.88 |
Cash dividends declared per share |  | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.20 |  |  | $ | 0.69 |  |  | $ | 0.60 |
Book value per share |  | $ | 26.71 |  |  | $ | 26.23 |  |  | $ | 25.47 |  |  | $ | 26.71 |  |  | $ | 25.47 |
Weighted average number of common shares outstanding |  | 15,515,189 |  |  | 15,512,761 |  |  | 15,425,452 |  |  | 15,505,698 |  |  | 15,410,310 |
Diluted weighted average number of common shares outstanding |  | 15,589,008 |  |  | 15,586,571 |  |  | 15,507,561 |  |  | 15,580,072 |  |  | 15,483,320 |
Non-GAAP Measures(1) |  |  |  |  |  |  |  |  |  |
Return on average tangible equity |  | 14.85 | % |  | 13.96 | % |  | 15.61 | % |  | 14.40 | % |  | 14.59 | %
Tangible common equity ratio |  | 7.98 | % |  | 7.79 | % |  | 7.66 | % |  | 7.98 | % |  | 7.66 | %
Efficiency ratio |  | 55.72 | % |  | 56.76 | % |  | 55.39 | % |  | 56.80 | % |  | 57.40 | %
Tangible book value per share |  | $ | 20.26 |  |  | $ | 19.75 |  |  | $ | 18.87 |  |  | $ | 20.26 |  |  | $ | 18.87 |

(1) Please see "Reconciliation of non-GAAP to GAAP Financial Measures."

Consolidated Statements of Condition Data (unaudited)
(In thousands, except number of shares) |  | September 30, 2017 |  | December 31, 2016 |  | September 30, 2016
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 89,435 |  |  | $ | 87,707 |  |  | $ | 99,458 |
Investments: |  |  |  |  |  |  |  |  |
Available-for-sale securities, at fair value |  | 797,251 |  |  | 779,867 |  |  | 788,880 |
Held-to-maturity securities, at amortized cost |  | 94,207 |  |  | 94,609 |  |  | 94,205 |
Federal Home Loan Bank and Federal Reserve Bank stock, at cost |  | 24,560 |  |  | 23,203 |  |  | 23,201 |
Total investments |  | 916,018 |  |  | 897,679 |  |  | 906,286 |
Loans held for sale, at fair value |  | 12,997 |  |  | 14,836 |  |  | 24,644 |
Loans: |  |  |  |  |  |
Residential real estate |  | 852,851 |  |  | 802,494 |  |  | 797,036 |
Commercial real estate |  | 1,131,883 |  |  | 1,050,780 |  |  | 1,054,307 |
Commercial(1) |  | 417,105 |  |  | 394,051 |  |  | 390,155 |
Consumer and home equity |  | 346,451 |  |  | 347,239 |  |  | 350,511 |
Total loans |  | 2,748,290 |  |  | 2,594,564 |  |  | 2,592,009 |
Less: allowance for loan losses |  | (24,413 | ) |  | (23,116 | ) |  | (23,290 | )
Net loans |  | 2,723,877 |  |  | 2,571,448 |  |  | 2,568,719 |
Goodwill |  | 94,697 |  |  | 94,697 |  |  | 94,697 |
Other intangible assets |  | 5,347 |  |  | 6,764 |  |  | 7,240 |
Bank-owned life insurance |  | 86,869 |  |  | 78,119 |  |  | 77,937 |
Premises and equipment, net |  | 42,422 |  |  | 42,873 |  |  | 43,934 |
Deferred tax assets |  | 36,344 |  |  | 39,263 |  |  | 34,632 |
Other assets |  | 31,937 |  |  | 30,844 |  |  | 46,419 |
Total assets |  | $ | 4,039,943 |  |  | $ | 3,864,230 |  |  | $ | 3,903,966 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |
Demand |  | $ | 476,386 |  |  | $ | 406,934 |  |  | $ | 427,349 |
Interest checking |  | 758,568 |  |  | 701,494 |  |  | 763,710 |
Savings and money market |  | 976,246 |  |  | 979,263 |  |  | 979,085 |
Certificates of deposit |  | 498,965 |  |  | 468,203 |  |  | 489,856 |
Brokered deposits |  | 246,248 |  |  | 272,635 |  |  | 229,225 |
Total deposits |  | 2,956,413 |  |  | 2,828,529 |  |  | 2,889,225 |
Short-term borrowings |  | 538,997 |  |  | 530,129 |  |  | 489,749 |
Long-term borrowings |  | 10,738 |  |  | 10,791 |  |  | 10,808 |
Subordinated debentures |  | 58,872 |  |  | 58,755 |  |  | 58,716 |
Accrued interest and other liabilities |  | 60,557 |  |  | 44,479 |  |  | 62,287 |
Total liabilities |  | 3,625,577 |  |  | 3,472,683 |  |  | 3,510,785 |
Shareholders’ equity |  | 414,366 |  |  | 391,547 |  |  | 393,181 |
Total liabilities and shareholders’ equity |  | $ | 4,039,943 |  |  | $ | 3,864,230 |  |  | $ | 3,903,966 |

(1) Includes the Healthcare Professional Funding Corporation ("HPFC") loan portfolio.

Consolidated Statements of Income Data (unaudited)
|  | For The Three Months Ended
(In thousands, except per share data) |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016
Interest Income |  |  |  |  |  |  |  |  |
Interest and fees on loans |  | $ | 29,350 |  |  | $ | 28,423 |  |  | $ | 27,395 |
Interest on U.S. government and sponsored enterprise obligations |  | 4,177 |  |  | 4,355 |  |  | 4,049 |
Interest on state and political subdivision obligations |  | 686 |  |  | 691 |  |  | 702 |
Interest on federal funds sold and other investments |  | 497 |  |  | 471 |  |  | 448 |
Total interest income |  | 34,710 |  |  | 33,940 |  |  | 32,594 |
Interest Expense |  |  |  |  |  |  |  |  |
Interest on deposits |  | 3,027 |  |  | 2,987 |  |  | 2,204 |
Interest on borrowings |  | 1,665 |  |  | 1,476 |  |  | 1,161 |
Interest on subordinated debentures |  | 858 |  |  | 851 |  |  | 857 |
Total interest expense |  | 5,550 |  |  | 5,314 |  |  | 4,222 |
Net interest income |  | 29,160 |  |  | 28,626 |  |  | 28,372 |
Provision for credit losses |  | 817 |  |  | 1,401 |  |  | 1,279 |
Net interest income after provision for credit losses |  | 28,343 |  |  | 27,225 |  |  | 27,093 |
Non-Interest Income |  |  |  |  |  |  |  |  |
Debit card income |  | 2,061 |  |  | 1,992 |  |  | 1,894 |
Service charges on deposit accounts |  | 1,852 |  |  | 1,957 |  |  | 1,799 |
Mortgage banking income, net |  | 2,076 |  |  | 1,937 |  |  | 2,407 |
Income from fiduciary services |  | 1,229 |  |  | 1,355 |  |  | 1,225 |
Bank-owned life insurance |  | 603 |  |  | 570 |  |  | 585 |
Brokerage and insurance commissions |  | 600 |  |  | 548 |  |  | 594 |
Other service charges and fees |  | 589 |  |  | 501 |  |  | 591 |
Net gain on sale of securities |  | 827 |  |  | — |  |  | — |
Other income |  | 462 |  |  | 1,028 |  |  | 1,906 |
Total non-interest income |  | 10,299 |  |  | 9,888 |  |  | 11,001 |
Non-Interest Expense |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 12,359 |  |  | 12,376 |  |  | 12,044 |
Furniture, equipment and data processing |  | 2,429 |  |  | 2,450 |  |  | 2,349 |
Net occupancy costs |  | 1,599 |  |  | 1,689 |  |  | 1,685 |
Consulting and professional fees |  | 714 |  |  | 853 |  |  | 742 |
Debit card expense |  | 662 |  |  | 712 |  |  | 669 |
Regulatory assessments |  | 574 |  |  | 488 |  |  | 667 |
Amortization of intangible assets |  | 473 |  |  | 472 |  |  | 475 |
Other real estate owned and collection costs, net |  | 258 |  |  | 344 |  |  | 877 |
Merger and acquisition costs |  | — |  |  | — |  |  | 45 |
Other expenses |  | 2,757 |  |  | 2,774 |  |  | 2,596 |
Total non-interest expense |  | 21,825 |  |  | 22,158 |  |  | 22,149 |
Income before income tax expense |  | 16,817 |  |  | 14,955 |  |  | 15,945 |
Income tax expense |  | 5,478 |  |  | 4,721 |  |  | 5,042 |
Net Income |  | $ | 11,339 |  |  | $ | 10,234 |  |  | $ | 10,903 |
Per Share Data |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.72 |  |  | $ | 0.66 |  |  | $ | 0.70 |
Diluted earnings per share |  | $ | 0.72 |  |  | $ | 0.66 |  |  | $ | 0.70 |

Consolidated Statements of Income Data (unaudited)
|  | For The Nine Months Ended September 30,
(In thousands, except per share data) |  | 2017 |  | 2016
Interest Income |  |  |  |  |  |
Interest and fees on loans |  | $ | 84,835 |  |  | $ | 82,117 |
Interest on U.S. government and sponsored enterprise obligations |  | 12,788 |  |  | 12,055 |
Interest on state and political subdivision obligations |  | 2,079 |  |  | 2,127 |
Interest on federal funds sold and other investments |  | 1,362 |  |  | 1,051 |
Total interest income |  | 101,064 |  |  | 97,350 |
Interest Expense |  |  |  |
Interest on deposits |  | 8,568 |  |  | 6,355 |
Interest on borrowings |  | 4,302 |  |  | 3,610 |
Interest on junior subordinated debentures |  | 2,553 |  |  | 2,557 |
Total interest expense |  | 15,423 |  |  | 12,522 |
Net interest income |  | 85,641 |  |  | 84,828 |
Provision for credit losses |  | 2,797 |  |  | 5,003 |
Net interest income after provision for credit losses |  | 82,844 |  |  | 79,825 |
Non-Interest Income |  |  |  |
Debit card income |  | 5,887 |  |  | 5,650 |
Service charges on deposit accounts |  | 5,632 |  |  | 5,356 |
Mortgage banking income, net |  | 5,566 |  |  | 4,921 |
Income from fiduciary services |  | 3,831 |  |  | 3,736 |
Bank-owned life insurance |  | 1,750 |  |  | 1,899 |
Brokerage and insurance commissions |  | 1,601 |  |  | 1,569 |
Other service charges and fees |  | 1,558 |  |  | 1,494 |
Net gain on sale of securities |  | 827 |  |  | 4 |
Other income |  | 2,107 |  |  | 4,841 |
Total non-interest income |  | 28,759 |  |  | 29,470 |
Non-Interest Expense |  |  |  |
Salaries and employee benefits |  | 36,882 |  |  | 35,634 |
Furniture, equipment and data processing |  | 7,204 |  |  | 7,157 |
Net occupancy costs |  | 5,234 |  |  | 5,352 |
Consulting and professional fees |  | 2,412 |  |  | 2,609 |
Debit card expense |  | 2,034 |  |  | 2,107 |
Regulatory assessments |  | 1,607 |  |  | 2,162 |
Amortization of intangible assets |  | 1,417 |  |  | 1,427 |
Other real estate owned and collection costs |  | 558 |  |  | 2,029 |
Merger and acquisition costs |  | — |  |  | 866 |
Other expenses |  | 8,063 |  |  | 8,045 |
Total non-interest expense |  | 65,411 |  |  | 67,388 |
Income before income tax expense |  | 46,192 |  |  | 41,907 |
Income tax expense |  | 14,543 |  |  | 12,742 |
Net Income |  | $ | 31,649 |  |  | $ | 29,165 |
Per Share Data |  |  |  |  |  |
Basic earnings per share |  | $ | 2.03 |  |  | $ | 1.88 |
Diluted earnings per share |  | $ | 2.02 |  |  | $ | 1.88 |

Quarterly Average Balance and Yield/Rate Analysis (unaudited)
|  | For The Three Months Ended
|  | Average Balance |  | Yield/Rate
(In thousands) |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016 |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016
Assets |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |
Securities - taxable |  | $ | 819,778 |  |  | $ | 843,370 |  |  | $ | 810,747 |  |  | 2.28 | % |  | 2.29 | % |  | 2.22 | %
Securities - nontaxable(1) |  | 101,507 |  |  | 101,807 |  |  | 103,657 |  |  | 4.16 | % |  | 4.17 | % |  | 4.17 | %
Loans(2)(3): |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | 851,828 |  |  | 826,353 |  |  | 824,985 |  |  | 4.09 | % |  | 4.12 | % |  | 4.20 | %
Commercial real estate |  | 1,136,851 |  |  | 1,114,508 |  |  | 1,031,674 |  |  | 4.07 | % |  | 4.05 | % |  | 3.94 | %
Commercial(1) |  | 347,469 |  |  | 334,761 |  |  | 307,184 |  |  | 4.18 | % |  | 4.23 | % |  | 3.89 | %
Municipal(1) |  | 24,847 |  |  | 18,268 |  |  | 24,628 |  |  | 3.24 | % |  | 3.42 | % |  | 2.66 | %
Consumer and home equity |  | 345,533 |  |  | 341,544 |  |  | 355,144 |  |  | 4.58 | % |  | 4.36 | % |  | 4.32 | %
HPFC |  | 49,619 |  |  | 53,843 |  |  | 68,334 |  |  | 8.38 | % |  | 8.78 | % |  | 8.13 | %
Total loans |  | 2,756,147 |  |  | 2,689,277 |  |  | 2,611,949 |  |  | 4.23 | % |  | 4.23 | % |  | 4.17 | %
Total interest-earning assets |  | 3,677,432 |  |  | 3,634,454 |  |  | 3,526,353 |  |  | 3.79 | % |  | 3.77 | % |  | 3.72 | %
Other assets |  | 352,711 |  |  | 344,945 |  |  | 387,833 |  |  |  |  |  |  |
Total assets |  | $ | 4,030,143 |  |  | $ | 3,979,399 |  |  | $ | 3,914,186 |  |  |  |  |  |  |
Liabilities & Shareholders' Equity |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |
Demand |  | $ | 450,350 |  |  | $ | 392,789 |  |  | $ | 415,558 |  |  | — | % |  | — | % |  | — | %
Interest checking |  | 727,959 |  |  | 732,096 |  |  | 721,459 |  |  | 0.19 | % |  | 0.18 | % |  | 0.14 | %
Savings |  | 493,447 |  |  | 489,408 |  |  | 466,113 |  |  | 0.07 | % |  | 0.06 | % |  | 0.06 | %
Money market |  | 469,458 |  |  | 477,734 |  |  | 488,793 |  |  | 0.53 | % |  | 0.49 | % |  | 0.43 | %
Certificates of deposit(3) |  | 454,013 |  |  | 456,933 |  |  | 486,698 |  |  | 0.83 | % |  | 0.92 | % |  | 0.79 | %
Total deposits |  | 2,595,227 |  |  | 2,548,960 |  |  | 2,578,621 |  |  | 0.31 | % |  | 0.32 | % |  | 0.28 | %
Borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Brokered deposits |  | 310,207 |  |  | 349,762 |  |  | 239,975 |  |  | 1.30 | % |  | 1.08 | % |  | 0.63 | %
Customer repurchase agreements |  | 222,386 |  |  | 232,295 |  |  | 189,539 |  |  | 0.51 | % |  | 0.49 | % |  | 0.29 | %
Subordinated debentures |  | 58,853 |  |  | 58,814 |  |  | 58,697 |  |  | 5.78 | % |  | 5.80 | % |  | 5.81 | %
Other borrowings |  | 386,643 |  |  | 345,155 |  |  | 396,828 |  |  | 1.42 | % |  | 1.38 | % |  | 1.02 | %
Total borrowings |  | 978,089 |  |  | 986,026 |  |  | 885,039 |  |  | 1.43 | % |  | 1.33 | % |  | 1.08 | %
Total funding liabilities |  | 3,573,316 |  |  | 3,534,986 |  |  | 3,463,660 |  |  | 0.62 | % |  | 0.60 | % |  | 0.49 | %
Other liabilities |  | 45,330 |  |  | 40,790 |  |  | 62,554 |  |  |  |  |  |  |
Shareholders' equity |  | 411,497 |  |  | 403,623 |  |  | 387,972 |  |  |  |  |  |  |
Total liabilities & Shareholders' Equity |  | $ | 4,030,143 |  |  | $ | 3,979,399 |  |  | $ | 3,914,186 |  |  |  |  |  |  |
Net interest rate spread (fully-taxable equivalent) |  | 3.17 | % |  | 3.17 | % |  | 3.23 | %
Net interest margin (fully-taxable equivalent) |  | 3.19 | % |  | 3.19 | % |  | 3.24 | %
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(3) |  | 3.11 | % |  | 3.09 | % |  | 3.10 | %

(1) | Reported on tax-equivalent basis calculated using a tax rate of 35%, including certain commercial loans.

(2) | Non-accrual loans and loans held for sale are included in total average loans.

(3) | Excludes the impact of the fair value mark accretion on loans and CDs generated in purchase accounting and collection of previously charged-off acquired loans for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016 totaling $804,000, $861,000 and $1.2 million, respectively.

Year-To-Date Average Balance and Yield/Rate Analysis (unaudited)
|  | For The Nine Months Ended
|  | Average Balance |  | Yield/Rate
(In thousands) |  | September 30, 2017 |  | September 30, 2016 |  | September 30, 2017 |  | September 30, 2016
Assets |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |
Securities - taxable |  | $ | 832,054 |  |  | $ | 798,054 |  |  | 2.27 | % |  | 2.19 | %
Securities - nontaxable(1) |  | 102,075 |  |  | 102,812 |  |  | 4.18 | % |  | 4.24 | %
Loans(2)(3): |  |  |  |  |  |  |  |  |  |
Residential real estate |  | 831,072 |  |  | 825,660 |  |  | 4.10 | % |  | 4.18 | %
Commercial real estate |  | 1,109,386 |  |  | 988,329 |  |  | 4.02 | % |  | 4.08 | %
Commercial(1) |  | 334,247 |  |  | 290,459 |  |  | 4.17 | % |  | 4.21 | %
Municipal(1) |  | 19,761 |  |  | 18,655 |  |  | 3.34 | % |  | 3.00 | %
Consumer and home equity |  | 343,294 |  |  | 361,085 |  |  | 4.42 | % |  | 4.22 | %
HPFC |  | 53,873 |  |  | 72,380 |  |  | 8.50 | % |  | 8.75 | %
Total loans |  | 2,691,633 |  |  | 2,556,568 |  |  | 4.20 | % |  | 4.27 | %
Total interest-earning assets |  | 3,625,762 |  |  | 3,457,434 |  |  | 3.76 | % |  | 3.79 | %
Other assets |  | 345,827 |  |  | 370,692 |  |  |  |  |
Total assets |  | $ | 3,971,589 |  |  | $ | 3,828,126 |  |  |  |  |
Liabilities & Shareholders' Equity |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |
Demand |  | $ | 411,818 |  |  | $ | 372,131 |  |  | — | % |  | — | %
Interest checking |  | 725,705 |  |  | 722,764 |  |  | 0.18 | % |  | 0.12 | %
Savings |  | 490,648 |  |  | 455,134 |  |  | 0.06 | % |  | 0.06 | %
Money market |  | 476,983 |  |  | 485,611 |  |  | 0.49 | % |  | 0.42 | %
Certificates of deposit(3) |  | 458,208 |  |  | 492,892 |  |  | 0.88 | % |  | 0.77 | %
Total deposits |  | 2,563,362 |  |  | 2,528,532 |  |  | 0.31 | % |  | 0.28 | %
Borrowings: |  |  |  |  |  |  |  |
Brokered deposits |  | 322,860 |  |  | 216,589 |  |  | 1.09 | % |  | 0.70 | %
Customer repurchase agreements |  | 225,426 |  |  | 188,124 |  |  | 0.44 | % |  | 0.27 | %
Junior subordinated debentures |  | 58,814 |  |  | 58,712 |  |  | 5.80 | % |  | 5.82 | %
Other borrowings |  | 354,443 |  |  | 402,121 |  |  | 1.34 | % |  | 1.07 | %
Total borrowings |  | 961,543 |  |  | 865,546 |  |  | 1.32 | % |  | 1.13 | %
Total funding liabilities |  | 3,524,905 |  |  | 3,394,078 |  |  | 0.58 | % |  | 0.49 | %
Other liabilities |  | 43,489 |  |  | 55,401 |  |  |  |  |
Shareholders' equity |  | 403,195 |  |  | 378,647 |  |  |  |  |
Total liabilities & shareholders' equity |  | $ | 3,971,589 |  |  | $ | 3,828,126 |  |  |  |  |
Net interest rate spread (fully-taxable equivalent) |  | 3.18 | % |  | 3.30 | %
Net interest margin (fully-taxable equivalent) |  | 3.19 | % |  | 3.31 | %
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(3) |  | 3.10 | % |  | 3.11 | %

(1) | Reported on tax-equivalent basis calculated using a tax rate of 35%, including certain commercial loans.

(2) | Non-accrual loans and loans held for sale are included in total average loans.

(3) | Excludes the impact of the fair value mark accretion on loans and CDs generated in purchase accounting and collection of previously charged-off acquired loans for the nine months ended September 30, 2017 and 2016 totaling $2.5 million and $5.2 million, respectively.

Asset Quality Data (unaudited)
(In thousands) |  | At or For The Nine Months Ended September 30, 2017 |  | At or For The Six Months Ended June 30, 2017 |  | At or For The Three Months Ended March 31, 2017 |  | At or For The Year Ended December 31, 2016 |  | At or For The Nine Months Ended September 30, 2016
Non-accrual loans: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 4,465 |  |  | $ | 4,890 |  |  | $ | 4,105 |  |  | $ | 3,945 |  |  | $ | 3,986 |
Commercial real estate |  | 5,887 |  |  | 16,291 |  |  | 12,858 |  |  | 12,849 |  |  | 12,917 |
Commercial |  | 1,830 |  |  | 2,056 |  |  | 1,994 |  |  | 2,088 |  |  | 2,259 |
Consumer |  | 1,626 |  |  | 1,371 |  |  | 1,552 |  |  | 1,624 |  |  | 1,650 |
HPFC |  | 838 |  |  | 1,083 |  |  | 1,014 |  |  | 207 |  |  | 216 |
Total non-accrual loans |  | 14,646 |  |  | 25,691 |  |  | 21,523 |  |  | 20,713 |  |  | 21,028 |
Loans 90 days past due and accruing |  | — |  |  | 76 |  |  | — |  |  | — |  |  | — |
Accruing troubled-debt restructured loans not included above |  | 5,154 |  |  | 4,809 |  |  | 4,558 |  |  | 4,338 |  |  | 4,468 |
Total non-performing loans |  | 19,800 |  |  | 30,576 |  |  | 26,081 |  |  | 25,051 |  |  | 25,496 |
Other real estate owned: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | — |  |  | — |  |  | 14 |  |  | 14 |  |  | 75 |
Commercial real estate |  | 341 |  |  | 341 |  |  | 607 |  |  | 908 |  |  | 736 |
Total other real estate owned |  | 341 |  |  | 341 |  |  | 621 |  |  | 922 |  |  | 811 |
Total non-performing assets |  | $ | 20,141 |  |  | $ | 30,917 |  |  | $ | 26,702 |  |  | $ | 25,973 |  |  | $ | 26,307 |
Loans 30-89 days past due: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 3,169 |  |  | $ | 3,020 |  |  | $ | 2,379 |  |  | $ | 2,470 |  |  | $ | 2,228 |
Commercial real estate |  | 2,297 |  |  | 3,442 |  |  | 2,531 |  |  | 971 |  |  | 599 |
Commercial |  | 712 |  |  | 269 |  |  | 168 |  |  | 851 |  |  | 463 |
Consumer |  | 1,256 |  |  | 1,378 |  |  | 1,008 |  |  | 1,018 |  |  | 552 |
HPFC |  | 938 |  |  | 639 |  |  | 777 |  |  | 1,029 |  |  | 492 |
Total loans 30-89 days past due |  | $ | 8,372 |  |  | $ | 8,748 |  |  | $ | 6,863 |  |  | $ | 6,339 |  |  | $ | 4,334 |
Allowance for loan losses at the beginning of the period |  | $ | 23,116 |  |  | $ | 23,116 |  |  | $ | 23,116 |  |  | $ | 21,166 |  |  | $ | 21,166 |
Provision for loan losses |  | 2,786 |  |  | 1,984 |  |  | 581 |  |  | 5,269 |  |  | 5,011 |
Charge-offs: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | 433 |  |  | 195 |  |  | 5 |  |  | 356 |  |  | 229 |
Commercial real estate |  | 81 |  |  | 12 |  |  | 3 |  |  | 315 |  |  | 273 |
Commercial |  | 650 |  |  | 281 |  |  | 136 |  |  | 2,218 |  |  | 1,970 |
Consumer |  | 493 |  |  | 454 |  |  | 15 |  |  | 409 |  |  | 289 |
HPFC |  | 274 |  |  | 81 |  |  | — |  |  | 507 |  |  | 507 |
Total charge-offs |  | 1,931 |  |  | 1,023 |  |  | 159 |  |  | 3,805 |  |  | 3,268 |
Total recoveries |  | 442 |  |  | 317 |  |  | 183 |  |  | 486 |  |  | 381 |
Net charge-offs (recoveries) |  | 1,489 |  |  | 706 |  |  | (24 | ) |  | 3,319 |  |  | 2,887 |
Allowance for loan losses at the end of the period |  | $ | 24,413 |  |  | $ | 24,394 |  |  | $ | 23,721 |  |  | $ | 23,116 |  |  | $ | 23,290 |
Components of allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 24,413 |  |  | $ | 24,394 |  |  | $ | 23,721 |  |  | $ | 23,116 |  |  | $ | 23,290 |
Liability for unfunded credit commitments |  | 22 |  |  | 7 |  |  | 9 |  |  | 11 |  |  | 14 |
Allowance for credit losses |  | $ | 24,435 |  |  | $ | 24,401 |  |  | $ | 23,730 |  |  | $ | 23,127 |  |  | $ | 23,304 |
Ratios: |  |  |  |  |  |  |  |  |  |
Non-performing loans to total loans |  | 0.72 | % |  | 1.12 | % |  | 0.99 | % |  | 0.97 | % |  | 0.98 | %
Non-performing assets to total assets |  | 0.50 | % |  | 0.77 | % |  | 0.68 | % |  | 0.67 | % |  | 0.67 | %
Allowance for loan losses to total loans |  | 0.89 | % |  | 0.89 | % |  | 0.90 | % |  | 0.89 | % |  | 0.90 | %
Net charge-offs to average loans (annualized): |  |  |  |  |  |  |  |  |  |
Quarter-to-date |  | 0.11 | % |  | 0.11 | % |  | — | % |  | 0.07 | % |  | 0.26 | %
Year-to-date |  | 0.07 | % |  | 0.05 | % |  | — | % |  | 0.13 | % |  | 0.15 | %
Allowance for loan losses to non-performing loans |  | 123.30 | % |  | 79.78 | % |  | 90.95 | % |  | 92.28 | % |  | 91.35 | %
Loans 30-89 days past due to total loans |  | 0.30 | % |  | 0.32 | % |  | 0.26 | % |  | 0.24 | % |  | 0.17 | %

Reconciliation of non-GAAP to GAAP Financial Measures

Efficiency Ratio: |  |  |  |  |  |  |  |  |  |
|  | For the Three Months Ended |  | For the Nine Months Ended
(In thousands) |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016 |  | September 30, 2017 |  | September 30, 2016
Non-interest expense, as presented |  | $ | 21,825 |  |  | $ | 22,158 |  |  | $ | 22,149 |  |  | $ | 65,411 |  |  | $ | 67,388 |
Less: merger and acquisition costs |  | — |  |  | — |  |  | (45 | ) |  | — |  |  | (866 | )
Adjusted non-interest expense |  | $ | 21,825 |  |  | $ | 22,158 |  |  | $ | 22,104 |  |  | $ | 65,411 |  |  | $ | 66,522 |
Net interest income, as presented |  | $ | 29,160 |  |  | $ | 28,626 |  |  | $ | 28,372 |  |  | $ | 85,641 |  |  | $ | 84,828 |
Add: effect of tax-exempt income(1) |  | 535 |  |  | 525 |  |  | 533 |  |  | 1,580 |  |  | 1,588 |
Non-interest income, as presented |  | 10,299 |  |  | 9,888 |  |  | 11,001 |  |  | 28,759 |  |  | 29,470 |
Less: net gain on sale of securities |  | (827 | ) |  | — |  |  | — |  |  | (827 | ) |  | (4 | )
Adjusted net interest income plus non-interest income |  | $ | 39,167 |  |  | $ | 39,039 |  |  | $ | 39,906 |  |  | $ | 115,153 |  |  | $ | 115,882 |
Non-GAAP efficiency ratio |  | 55.72 | % |  | 56.76 | % |  | 55.39 | % |  | 56.80 | % |  | 57.40 | %
GAAP efficiency ratio |  | 55.31 | % |  | 57.53 | % |  | 56.25 | % |  | 57.18 | % |  | 58.96 | %

(1) Assumed a 35% tax rate.

Tax-Equivalent Net Interest Income: |  |  |  |  |  |
|  | For the Three Months Ended |  | For the Nine Months Ended
(In thousands) |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016 |  | September 30, 2017 |  | September 30, 2016
Net interest income, as presented |  | $ | 29,160 |  |  | $ | 28,626 |  |  | $ | 28,372 |  |  | $ | 85,641 |  |  | $ | 84,828 |
Add: effect of tax-exempt income(1) |  | 535 |  |  | 525 |  |  | 533 |  |  | 1,580 |  |  | 1,588 |
Net interest income, tax equivalent |  | $ | 29,695 |  |  | $ | 29,151 |  |  | $ | 28,905 |  |  | $ | 87,221 |  |  | $ | 86,416 |

(1) Assumed a 35% tax rate.

Tangible Book Value Per Share and Tangible Common Equity Ratio:
|  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016
(In thousands, except number of shares and per share data) |
Tangible Book Value Per Share: |  |  |  |  |  |
Shareholders' equity, as presented |  | $ | 414,366 |  |  | $ | 406,960 |  |  | $ | 393,181 |
Less: goodwill and other intangible assets |  | (100,044 | ) |  | (100,517 | ) |  | (101,937 | )
Tangible equity |  | $ | 314,322 |  |  | $ | 306,443 |  |  | $ | 291,244 |
Shares outstanding at period end |  | 15,515,577 |  |  | 15,512,914 |  |  | 15,434,856 |
Tangible book value per share |  | $ | 20.26 |  |  | $ | 19.75 |  |  | $ | 18.87 |
Book value per share |  | $ | 26.71 |  |  | $ | 26.23 |  |  | $ | 25.47 |
Tangible Common Equity Ratio:
Total assets |  | $ | 4,039,943 |  |  | $ | 4,036,367 |  |  | $ | 3,903,966 |
Less: goodwill and other intangibles |  | (100,044 | ) |  | (100,517 | ) |  | (101,937 | )
Tangible assets |  | $ | 3,939,899 |  |  | $ | 3,935,850 |  |  | $ | 3,802,029 |
Tangible common equity ratio |  | 7.98 | % |  | 7.79 | % |  | 7.66 | %
Shareholders' equity to total assets |  | 10.26 | % |  | 10.08 | % |  | 10.07 | %

Return on Average Tangible Equity: |  |  |  |
|  | For the Three Months Ended |  | For the Nine Months Ended
(In thousands) |  | September 30, 2017 |  | June 30, 2017 |  | September 30, 2016 |  | September 30, 2017 |  | September 30, 2016
Net income, as presented |  | $ | 11,339 |  |  | $ | 10,234 |  |  | $ | 10,903 |  |  | $ | 31,649 |  |  | $ | 29,165 |
Amortization of intangible assets, net of tax(1) |  | 307 |  |  | 307 |  |  | 309 |  |  | 921 |  |  | 928 |
Net income, adjusted for amortization of intangible assets |  | $ | 11,646 |  |  | $ | 10,541 |  |  | $ | 11,212 |  |  | $ | 32,570 |  |  | $ | 30,093 |
Average equity |  | $ | 411,497 |  |  | $ | 403,623 |  |  | $ | 387,972 |  |  | $ | 403,195 |  |  | $ | 378,647 |
Less: average goodwill and other intangible assets |  | (100,273 | ) |  | (100,745 | ) |  | (102,168 | ) |  | (100,746 | ) |  | (103,054 | )
Average tangible equity |  | $ | 311,224 |  |  | $ | 302,878 |  |  | $ | 285,804 |  |  | $ | 302,449 |  |  | $ | 275,593 |
Return on average tangible equity |  | 14.85 | % |  | 13.96 | % |  | 15.61 | % |  | 14.40 | % |  | 14.59 | %
Return on average equity |  | 10.93 | % |  | 10.17 | % |  | 11.18 | % |  | 10.49 | % |  | 10.29 | %

(1) Assumed a 35% tax rate.