EX-99.1 2 ex991earningsreleaseq218.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
SECOND QUARTER 2018 EARNINGS
Q2 2018 vs. Q2 2017 Increase in Net Income of 19% and Diluted Earnings Per Share of 18%
CAMDEN, Maine, July 31, 2018/PRNewswire/--Camden National Corporation (NASDAQ: CAC; “Camden National” or the “Company”), a $4.2 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2018 of $12.2 million and diluted earnings per share ("EPS") of $0.78 per share, representing increases over the second quarter of 2017 of 19% and 18%, respectively. For the second quarter of 2018, the Company's return on average assets was 1.19%, return on average equity was 12.10% and efficiency ratio1 was 58.39%.
“We reported record high net income of $25.0 million for the first half of 2018 due to strong operating performance, solid asset quality and the benefit of the federal tax reform," said Gregory A. Dufour, President and Chief Executive Officer of Camden National. "Our return on average equity during this period was 12.50%, compared to 10.27% for the same period last year. We continue to deliver on our consistent, long-term strategy to gain market share and build and cultivate long-term relationships with our customers.”
Dufour added, "We continue to focus on generating shareholder value. Late last year, we announced a 9% increase in our fourth quarter 2017 dividend, and recently announced a 20% increase in our second quarter 2018 dividend bringing the quarterly dividend to $0.30 per share."
For the six months ended June 30, 2018, the Company reported net income of $25.0 million and diluted EPS of $1.60 per share, representing increases over the same period last year of 23%. For the six months ended June 30, 2018, the Company's return on average assets was 1.24% and efficiency ratio was 58.57%.
"In April, we announced the re-appointment of Robin A. Sawyer, CPA as a member of the Company's Board of Directors," said Dufour. "We are thrilled to have Robin back. Her skill-set and experience within the financial industry and large-company experience complement the strengths of our already distinguished Board of Directors."
_____________________________________________________________________________________

1 | This is a non-GAAP measure. Please refer to "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.

SECOND QUARTER 2018 FINANCIAL HIGHLIGHTS

• | Net income for the second quarter of 2018 increased $2.0 million, or 19%, over the second quarter of 2017, and decreased $603,000, or 5%, compared to last quarter.

• | Total loans grew $78.4 million in the second quarter of 2018, representing annualized loan growth of 11%.

• | Average low-cost deposits2 for the second quarter of 2018 of $2.3 billion increased 10% over the second quarter of 2017, and 1% over last quarter.

• | Quarterly dividend to shareholders increased $0.05 per share, or 20%, to $0.30 per share, compared to the first quarter of 2018.

FINANCIAL CONDITION
Total assets of $4.2 billion at June 30, 2018 increased 3% since December 31, 2017 driven by loan growth, including loans held for sale, of $89.6 million, or 3%. For the first half of 2018, loan growth was driven by residential mortgages of $49.5 million, or 6%, followed by commercial real estate loan growth of $26.0 million, or 2%, and commercial loan growth, excluding the Healthcare Professional Funding Corporation ("HPFC"), of $13.0 million, or 3%.
The Company sold $93.0 million, or 47%, of its residential mortgage production originated in the first half of 2018, compared to $78.7 million sold, or 50%, over the same period last year.
Total funding at June 30, 2018 was $3.7 billion, representing an increase of 3% since December 31, 2017 led by low-cost deposit growth of $46.7 million, or 2%, and borrowings of $49.9 million, or 8%. Average deposits (excluding brokered deposits) for the six months ended June 30, 2018 were $2.8 billion, representing an increase of $206.2 million, or 8%, over the same period last year, which was driven by average low-cost deposit growth of 9%.
At June 30, 2018, our loan-to-deposit ratio was 94%, compared to 93% at December 31, 2017 and June 30, 2017.
The Company's capital position at June 30, 2018 was well in excess of regulatory requirements, including a total risk-based capital ratio of 14.33% and a Tier I leverage ratio of 9.30%. At June 30, 2018, the Company's tangible common equity ratio1 was 7.59%.
ASSET QUALITY
The Company maintained strong asset quality across its loan portfolio with non-performing loans to total loans of 0.69% at June 30, 2018, compared to 1.12% at June 30, 2017. Asset quality improvement over the past year led to a decrease in the provision for credit losses of $1.5 million for the six months ended June 30, 2018 compared to the same period last year.
For the second quarter of 2018, a $983,000 provision for credit losses was recognized primarily attributable to loan growth of $78.4 million. Annualized net charge-offs to average loans for the second quarter of 2018 were 0.04%, compared to 0.11% for the second quarter of 2017. Loans 30-89 days past due to total loans at June 30, 2018 were 0.20%.
____________________________________________________________________________________

1 | This is a non-GAAP measure. Please refer to "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.

2 | Low-cost deposits include demand, interest checking, savings and money market.

OPERATING RESULTS (Second Quarter 2018 vs. Second Quarter 2017)
Net income for the second quarter of 2018 was $12.2 million, representing an increase over the second quarter of 2017 of $2.0 million, or 19%. The increase between periods was driven by:

• | A decrease in income tax expense of $1.8 million, or 39%, primarily due to a decrease in the Company's effective income tax rate as the federal corporate income tax rate was reduced under the Tax Cuts and Jobs Act of 2017 ("Tax Act"), which went into effect in 2018.

• | An increase in net interest income of $855,000, or 3%, driven by:

◦ | Average loan growth of 5% and a shift in funding mix due to strong average low-cost deposit growth of 10% between periods. For the second quarter of 2018, average low-cost deposits were 63% of average total funding, compared to 59% for the second quarter of 2017.

◦ | Net interest margin on a fully-taxable basis decreased 6 basis points between periods to 3.10% for the second quarter of 2018. The decrease in net interest margin between periods was due to (i) lower fair value mark accretion and recoveries on previously charged-off acquired loans of $283,000, which resulted in a decrease of 3 basis points between periods, and (ii) the change in the federal corporate income tax rate in 2018 accounted for a 3 basis points decrease between periods.

• | A decrease in provision for credit losses of $418,000 resulting from improved overall asset quality between periods.

• | Partially offset by:

◦ | An increase in non-interest expense of $737,000, or 3%, due to (i) an increase in employee-related costs of $566,000, or 5%, including normal merit increases, an increase in headcount, and other personnel-related expenses; (ii) an increase in professional and consulting fees of $263,000; and (iii) an increase in other expenses of $180,000 driven by recruiting and training costs. Intangible amortization expense decreased $291,000 between periods partially offsetting the aforementioned increases.

◦ | A decrease in non-interest income of $387,000, or 4%, primarily due to (i) a decrease in fees generated from the back-to-back commercial loan swap program of $483,000 and (ii) a decrease in mortgage banking income of $328,000 primarily driven by a decrease in fair value mark accounting on mortgage banking activities and lower gains on mortgage sales due to a 30 basis points decrease in the average gain rate.

OPERATING RESULTS (Linked Quarter)
Net income for the second quarter of 2018 decreased $603,000, or 5%, and diluted EPS decreased $0.04 per share, or 5%, compared to the previous quarter. The decrease between periods was driven by:

• | An increase in provision for credit losses of $1.5 million driven by 3% loan growth and the resolution of a large commercial real estate loan last quarter that drove a significant allowance for loan loss reversal.

• | An increase in non-interest expense of $591,000, or 3%, due to an increase in professional and consulting fees, collection-related costs and recruiting and training costs. Net occupancy costs decreased between periods as we enter the summer months.

• | Partially offset by an increase in revenues3 of $1.3 million, or 3%.

◦ | Non-interest income increased $697,000, or 8%, driven by an increase in mortgage banking income of $218,000, debit card income of $197,000 and fiduciary income, including brokerage and wealth management fees, totaling $124,000.

◦ | Net interest income increased $579,000, or 2%, driven by an increase in average interest-earning assets of $49.2 million led by average loan growth between periods. Net interest margin on a fully-taxable basis remained at 3.10% across periods.

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3 | Revenue is the sum of net interest income and non-interest income.

SECOND QUARTER 2018 DIVIDEND
The Company declared a second quarter 2018 dividend of $0.30 per share, payable on July 31, 2018, to shareholders of record as of July 13, 2018. This distribution represents an annualized dividend yield of 2.63%, based on the June 29, 2018 (last business day) closing price of Camden National's common stock at $45.71 per share as reported by NASDAQ.
CONFERENCE CALL
Camden National will host a conference call and webcast at 1:00 p.m., Eastern time, on Tuesday, July 31, 2018 to discuss its second quarter 2018 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/cac180731.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 $4.2 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. The Bank provides personalized service through a network of 60 banking centers, 71 ATMs, and lending offices in New Hampshire and Massachusetts, all complemented by 24/7 live phone support. 2017 marks the 8th time Camden National Bank has received the "Lender at Work for Maine" Award from the Finance Authority of Maine. 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, 2017, 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 return on average tangible equity; the efficiency and tangible common equity ratios; and tangible book value per share. Management utilizes these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measures help investors better understand 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 Six Months Ended
(In thousands, except number of shares and per share data) |  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
Financial Condition Data |  |  |  |  |  |  |  |  |  |
Investments |  | $ | 918,404 |  |  | $ | 913,653 |  |  | $ | 932,338 |  |  | $ | 918,404 |  |  | $ | 932,338 |
Loans and loans held for sale |  | 2,880,185 |  |  | 2,798,696 |  |  | 2,747,053 |  |  | 2,880,185 |  |  | 2,747,053 |
Allowance for loan losses |  | 23,668 |  |  | 22,990 |  |  | 24,394 |  |  | 23,668 |  |  | 24,394 |
Total assets |  | 4,193,782 |  |  | 4,113,185 |  |  | 4,036,367 |  |  | 4,193,782 |  |  | 4,036,367 |
Deposits |  | 3,056,119 |  |  | 3,025,580 |  |  | 2,940,866 |  |  | 3,056,119 |  |  | 2,940,866 |
Borrowings |  | 661,393 |  |  | 622,347 |  |  | 641,662 |  |  | 661,393 |  |  | 641,662 |
Shareholders' equity |  | 409,939 |  |  | 404,055 |  |  | 406,960 |  |  | 409,939 |  |  | 406,960 |
Operating Data |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 29,481 |  |  | $ | 28,902 |  |  | $ | 28,626 |  |  | $ | 58,383 |  |  | $ | 56,481 |
Provision (credit) for credit losses |  | 983 |  |  | (497 | ) |  | 1,401 |  |  | 486 |  |  | 1,980 |
Non-interest income |  | 9,501 |  |  | 8,804 |  |  | 9,888 |  |  | 18,305 |  |  | 18,460 |
Non-interest expense |  | 22,895 |  |  | 22,304 |  |  | 22,158 |  |  | 45,199 |  |  | 43,586 |
Income before income tax expense |  | 15,104 |  |  | 15,899 |  |  | 14,955 |  |  | 31,003 |  |  | 29,375 |
Income tax expense |  | 2,887 |  |  | 3,079 |  |  | 4,721 |  |  | 5,966 |  |  | 9,065 |
Net income |  | $ | 12,217 |  |  | $ | 12,820 |  |  | $ | 10,234 |  |  | $ | 25,037 |  |  | $ | 20,310 |
Key Ratios |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 1.19 | % |  | 1.28 | % |  | 1.03 | % |  | 1.24 | % |  | 1.04 | %
Return on average equity |  | 12.10 | % |  | 12.91 | % |  | 10.17 | % |  | 12.50 | % |  | 10.27 | %
Net interest margin |  | 3.10 | % |  | 3.10 | % |  | 3.16 | % |  | 3.10 | % |  | 3.15 | %
Non-performing loans to total loans |  | 0.69 | % |  | 0.69 | % |  | 1.12 | % |  | 0.69 | % |  | 1.12 | %
Non-performing assets to total assets |  | 0.48 | % |  | 0.47 | % |  | 0.77 | % |  | 0.48 | % |  | 0.77 | %
Annualized net charge-offs to average loans |  | 0.04 | % |  | 0.10 | % |  | 0.11 | % |  | 0.07 | % |  | 0.05 | %
Tier I leverage capital ratio |  | 9.30 | % |  | 9.23 | % |  | 8.92 | % |  | 9.30 | % |  | 8.92 | %
Total risk-based capital ratio |  | 14.33 | % |  | 14.32 | % |  | 13.87 | % |  | 14.33 | % |  | 13.87 | %
Per Share Data |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.78 |  |  | $ | 0.82 |  |  | $ | 0.66 |  |  | $ | 1.60 |  |  | $ | 1.31 |
Diluted earnings per share |  | $ | 0.78 |  |  | $ | 0.82 |  |  | $ | 0.66 |  |  | $ | 1.60 |  |  | $ | 1.30 |
Cash dividends declared per share |  | $ | 0.30 |  |  | $ | 0.25 |  |  | $ | 0.23 |  |  | $ | 0.55 |  |  | $ | 0.46 |
Book value per share |  | $ | 26.32 |  |  | $ | 25.96 |  |  | $ | 26.23 |  |  | $ | 26.32 |  |  | $ | 26.23 |
Weighted average number of common shares outstanding |  | 15,572,848 |  |  | 15,541,975 |  |  | 15,512,761 |  |  | 15,557,500 |  |  | 15,500,862 |
Diluted weighted average number of common shares outstanding |  | 15,629,779 |  |  | 15,603,380 |  |  | 15,586,571 |  |  | 15,615,038 |  |  | 15,576,711 |
Non-GAAP Measures(1) |  |  |  |  |  |  |  |  |  |
Return on average tangible equity |  | 16.23 | % |  | 17.35 | % |  | 13.96 | % |  | 16.78 | % |  | 14.16 | %
Efficiency ratio |  | 58.39 | % |  | 58.76 | % |  | 56.76 | % |  | 58.57 | % |  | 57.36 | %
Tangible common equity ratio |  | 7.59 | % |  | 7.59 | % |  | 7.79 | % |  | 7.59 | % |  | 7.79 | %
Tangible book value per share |  | $ | 19.94 |  |  | $ | 19.57 |  |  | $ | 19.75 |  |  | $ | 19.94 |  |  | $ | 19.75 |

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

Consolidated Statements of Condition Data (unaudited)
(In thousands, except number of shares) |  | June 30, 2018 |  | December 31, 2017 |  | June 30, 2017
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 49,542 |  |  | $ | 44,057 |  |  | $ | 46,989 |
Interest-bearing deposits in other banks |  | 67,604 |  |  | 58,914 |  |  | 46,044 |
Total cash, cash equivalents and restricted cash |  | 117,146 |  |  | 102,971 |  |  | 93,033 |
Investments: |  |  |  |  |  |  |  |  |
Available-for-sale securities, at fair value |  | 799,000 |  |  | 789,899 |  |  | 810,858 |
Held-to-maturity securities, at amortized cost (fair value of $91.6 million, $94.9 million and $95.0 million, respectively) |  | 93,062 |  |  | 94,073 |  |  | 94,340 |
Other investments |  | 26,342 |  |  | 23,670 |  |  | 27,140 |
Total investments |  | 918,404 |  |  | 907,642 |  |  | 932,338 |
Loans held for sale, at fair value |  | 12,656 |  |  | 8,103 |  |  | 10,784 |
Loans: |  |  |  |  |  |
Residential real estate |  | 907,910 |  |  | 858,369 |  |  | 831,577 |
Commercial real estate |  | 1,190,052 |  |  | 1,164,023 |  |  | 1,138,756 |
Commercial(1) |  | 426,390 |  |  | 418,520 |  |  | 421,818 |
Consumer and home equity |  | 343,177 |  |  | 341,527 |  |  | 344,118 |
Total loans |  | 2,867,529 |  |  | 2,782,439 |  |  | 2,736,269 |
Less: allowance for loan losses |  | (23,668 | ) |  | (24,171 | ) |  | (24,394 | )
Net loans |  | 2,843,861 |  |  | 2,758,268 |  |  | 2,711,875 |
Goodwill |  | 94,697 |  |  | 94,697 |  |  | 94,697 |
Other intangible assets |  | 4,592 |  |  | 4,955 |  |  | 5,820 |
Bank-owned life insurance |  | 88,706 |  |  | 87,489 |  |  | 79,266 |
Premises and equipment, net |  | 41,017 |  |  | 41,891 |  |  | 42,362 |
Deferred tax assets |  | 25,506 |  |  | 22,776 |  |  | 36,532 |
Other assets |  | 47,197 |  |  | 36,606 |  |  | 29,660 |
Total assets |  | $ | 4,193,782 |  |  | $ | 4,065,398 |  |  | $ | 4,036,367 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |
Demand |  | $ | 496,368 |  |  | $ | 478,643 |  |  | $ | 424,174 |
Interest checking |  | 879,668 |  |  | 855,570 |  |  | 737,532 |
Savings and money market |  | 990,408 |  |  | 985,508 |  |  | 971,156 |
Certificates of deposit |  | 472,215 |  |  | 475,010 |  |  | 456,227 |
Brokered deposits |  | 217,460 |  |  | 205,760 |  |  | 351,777 |
Total deposits |  | 3,056,119 |  |  | 3,000,491 |  |  | 2,940,866 |
Short-term borrowings |  | 591,648 |  |  | 541,796 |  |  | 572,004 |
Long-term borrowings |  | 10,756 |  |  | 10,791 |  |  | 10,825 |
Subordinated debentures |  | 58,989 |  |  | 58,911 |  |  | 58,833 |
Accrued interest and other liabilities |  | 66,331 |  |  | 49,996 |  |  | 46,879 |
Total liabilities |  | 3,783,843 |  |  | 3,661,985 |  |  | 3,629,407 |
Shareholders’ equity |  | 409,939 |  |  | 403,413 |  |  | 406,960 |
Total liabilities and shareholders’ equity |  | $ | 4,193,782 |  |  | $ | 4,065,398 |  |  | $ | 4,036,367 |

(1) Includes the HPFC loan portfolio.

Consolidated Statements of Income Data (unaudited)
|  | For The Three Months Ended
(In thousands, except per share data) |  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017
Interest Income |  |  |  |  |  |  |  |  |
Interest and fees on loans |  | $ | 31,367 |  |  | $ | 29,834 |  |  | $ | 28,423 |
Interest on U.S. government and sponsored enterprise obligations (taxable) |  | 4,386 |  |  | 4,225 |  |  | 4,355 |
Interest on state and political subdivision obligations (nontaxable) |  | 658 |  |  | 672 |  |  | 691 |
Interest on deposits in other banks and other investments |  | 678 |  |  | 547 |  |  | 471 |
Total interest income |  | 37,089 |  |  | 35,278 |  |  | 33,940 |
Interest Expense |  |  |  |  |  |  |  |  |
Interest on deposits |  | 4,459 |  |  | 3,749 |  |  | 2,987 |
Interest on borrowings |  | 2,298 |  |  | 1,780 |  |  | 1,476 |
Interest on subordinated debentures |  | 851 |  |  | 847 |  |  | 851 |
Total interest expense |  | 7,608 |  |  | 6,376 |  |  | 5,314 |
Net interest income |  | 29,481 |  |  | 28,902 |  |  | 28,626 |
Provision (credit) for credit losses |  | 983 |  |  | (497 | ) |  | 1,401 |
Net interest income after provision (credit) for credit losses |  | 28,498 |  |  | 29,399 |  |  | 27,225 |
Non-Interest Income |  |  |  |  |  |  |  |  |
Debit card income |  | 2,126 |  |  | 1,929 |  |  | 1,992 |
Service charges on deposit accounts |  | 1,933 |  |  | 1,836 |  |  | 1,957 |
Mortgage banking income, net |  | 1,609 |  |  | 1,391 |  |  | 1,937 |
Income from fiduciary services |  | 1,407 |  |  | 1,283 |  |  | 1,355 |
Brokerage and insurance commissions |  | 685 |  |  | 650 |  |  | 548 |
Bank-owned life insurance |  | 609 |  |  | 608 |  |  | 570 |
Other service charges and fees |  | 506 |  |  | 462 |  |  | 501 |
Net gain on sale of securities |  | 31 |  |  | — |  |  | — |
Other income |  | 595 |  |  | 645 |  |  | 1,028 |
Total non-interest income |  | 9,501 |  |  | 8,804 |  |  | 9,888 |
Non-Interest Expense |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 12,728 |  |  | 12,562 |  |  | 12,162 |
Furniture, equipment and data processing |  | 2,549 |  |  | 2,586 |  |  | 2,450 |
Net occupancy costs |  | 1,625 |  |  | 1,873 |  |  | 1,689 |
Consulting and professional fees |  | 1,116 |  |  | 804 |  |  | 853 |
Debit card expense |  | 776 |  |  | 730 |  |  | 712 |
Regulatory assessments |  | 501 |  |  | 499 |  |  | 488 |
Amortization of intangible assets |  | 181 |  |  | 181 |  |  | 472 |
Other real estate owned and collection costs, net |  | 251 |  |  | 75 |  |  | 344 |
Other expenses |  | 3,168 |  |  | 2,994 |  |  | 2,988 |
Total non-interest expense |  | 22,895 |  |  | 22,304 |  |  | 22,158 |
Income before income tax expense |  | 15,104 |  |  | 15,899 |  |  | 14,955 |
Income tax expense |  | 2,887 |  |  | 3,079 |  |  | 4,721 |
Net Income |  | $ | 12,217 |  |  | $ | 12,820 |  |  | $ | 10,234 |
Per Share Data |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 0.78 |  |  | $ | 0.82 |  |  | $ | 0.66 |
Diluted earnings per share |  | $ | 0.78 |  |  | $ | 0.82 |  |  | $ | 0.66 |

Consolidated Statements of Income Data (unaudited)
|  | For The Six Months Ended June 30,
(In thousands, except per share data) |  | 2018 |  | 2017
Interest Income |  |  |  |  |  |
Interest and fees on loans |  | $ | 61,201 |  |  | $ | 55,485 |
Interest on U.S. government and sponsored enterprise obligations (taxable) |  | 8,611 |  |  | 8,611 |
Interest on state and political subdivision obligations (nontaxable) |  | 1,330 |  |  | 1,393 |
Interest on federal funds sold and other investments |  | 1,225 |  |  | 865 |
Total interest income |  | 72,367 |  |  | 66,354 |
Interest Expense |  |  |  |
Interest on deposits |  | 8,208 |  |  | 5,541 |
Interest on borrowings |  | 4,078 |  |  | 2,637 |
Interest on subordinated debentures |  | 1,698 |  |  | 1,695 |
Total interest expense |  | 13,984 |  |  | 9,873 |
Net interest income |  | 58,383 |  |  | 56,481 |
Provision for credit losses |  | 486 |  |  | 1,980 |
Net interest income after provision for credit losses |  | 57,897 |  |  | 54,501 |
Non-Interest Income |  |  |  |
Debit card income |  | 4,055 |  |  | 3,826 |
Service charges on deposit accounts |  | 3,769 |  |  | 3,780 |
Mortgage banking income, net |  | 3,000 |  |  | 3,490 |
Income from fiduciary services |  | 2,690 |  |  | 2,602 |
Brokerage and insurance commissions |  | 1,335 |  |  | 1,001 |
Bank-owned life insurance |  | 1,217 |  |  | 1,147 |
Other service charges and fees |  | 968 |  |  | 969 |
Net gain on sale of securities |  | 31 |  |  | — |
Other income |  | 1,240 |  |  | 1,645 |
Total non-interest income |  | 18,305 |  |  | 18,460 |
Non-Interest Expense |  |  |  |
Salaries and employee benefits |  | 25,290 |  |  | 24,095 |
Furniture, equipment and data processing |  | 5,135 |  |  | 4,775 |
Net occupancy costs |  | 3,498 |  |  | 3,635 |
Consulting and professional fees |  | 1,920 |  |  | 1,698 |
Debit card expense |  | 1,506 |  |  | 1,372 |
Regulatory assessments |  | 1,000 |  |  | 1,033 |
Amortization of intangible assets |  | 362 |  |  | 944 |
Other real estate owned and collection costs |  | 326 |  |  | 300 |
Other expenses |  | 6,162 |  |  | 5,734 |
Total non-interest expense |  | 45,199 |  |  | 43,586 |
Income before income tax expense |  | 31,003 |  |  | 29,375 |
Income tax expense |  | 5,966 |  |  | 9,065 |
Net Income |  | $ | 25,037 |  |  | $ | 20,310 |
Per Share Data |  |  |  |  |  |
Basic earnings per share |  | $ | 1.60 |  |  | $ | 1.31 |
Diluted earnings per share |  | $ | 1.60 |  |  | $ | 1.30 |

Quarterly Average Balance and Yield/Rate Analysis (unaudited)
|  | For The Three Months Ended
|  | Average Balance |  | Yield/Rate
(In thousands) |  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017
Assets |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits in other banks(1) |  | $ | 58,500 |  |  | $ | 52,510 |  |  | $ | 37,337 |  |  | 1.57 | % |  | 1.40 | % |  | 1.01 | %
Securities - taxable |  | 834,675 |  |  | 826,529 |  |  | 843,370 |  |  | 2.32 | % |  | 2.22 | % |  | 2.24 | %
Securities - nontaxable(2) |  | 98,015 |  |  | 99,560 |  |  | 101,807 |  |  | 3.40 | % |  | 3.42 | % |  | 4.17 | %
Loans(3)(4): |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | 884,977 |  |  | 860,783 |  |  | 826,353 |  |  | 4.20 | % |  | 4.12 | % |  | 4.12 | %
Commercial real estate |  | 1,180,421 |  |  | 1,171,598 |  |  | 1,114,508 |  |  | 4.35 | % |  | 4.20 | % |  | 4.05 | %
Commercial(2) |  | 351,711 |  |  | 349,963 |  |  | 334,761 |  |  | 4.42 | % |  | 4.27 | % |  | 4.23 | %
Municipal(2) |  | 21,993 |  |  | 17,277 |  |  | 18,268 |  |  | 3.13 | % |  | 3.33 | % |  | 3.42 | %
Consumer and home equity |  | 340,782 |  |  | 341,078 |  |  | 341,544 |  |  | 5.01 | % |  | 4.76 | % |  | 4.36 | %
HPFC |  | 41,182 |  |  | 43,757 |  |  | 53,843 |  |  | 7.80 | % |  | 7.99 | % |  | 8.78 | %
Total loans |  | 2,821,066 |  |  | 2,784,456 |  |  | 2,689,277 |  |  | 4.43 | % |  | 4.30 | % |  | 4.23 | %
Total interest-earning assets(1) |  | 3,812,256 |  |  | 3,763,055 |  |  | 3,671,791 |  |  | 3.90 | % |  | 3.78 | % |  | 3.74 | %
Other assets |  | 294,752 |  |  | 292,312 |  |  | 307,608 |  |  |  |  |  |  |
Total assets |  | $ | 4,107,008 |  |  | $ | 4,055,367 |  |  | $ | 3,979,399 |  |  |  |  |  |  |
Liabilities & Shareholders' Equity |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |
Demand |  | $ | 464,164 |  |  | $ | 452,629 |  |  | $ | 392,789 |  |  | — | % |  | — | % |  | — | %
Interest checking |  | 839,510 |  |  | 833,410 |  |  | 732,096 |  |  | 0.47 | % |  | 0.38 | % |  | 0.18 | %
Savings |  | 483,192 |  |  | 493,660 |  |  | 489,408 |  |  | 0.06 | % |  | 0.06 | % |  | 0.06 | %
Money market |  | 507,545 |  |  | 487,685 |  |  | 477,734 |  |  | 0.82 | % |  | 0.66 | % |  | 0.49 | %
Certificates of deposit(4) |  | 472,637 |  |  | 472,213 |  |  | 456,933 |  |  | 1.06 | % |  | 1.00 | % |  | 0.92 | %
Total deposits |  | 2,767,048 |  |  | 2,739,597 |  |  | 2,548,960 |  |  | 0.48 | % |  | 0.42 | % |  | 0.32 | %
Borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Brokered deposits |  | 239,105 |  |  | 238,870 |  |  | 349,762 |  |  | 1.89 | % |  | 1.59 | % |  | 1.08 | %
Customer repurchase agreements |  | 247,789 |  |  | 237,056 |  |  | 232,295 |  |  | 1.03 | % |  | 0.72 | % |  | 0.49 | %
Subordinated debentures |  | 58,970 |  |  | 58,930 |  |  | 58,814 |  |  | 5.79 | % |  | 5.83 | % |  | 5.80 | %
Other borrowings |  | 330,096 |  |  | 328,141 |  |  | 345,155 |  |  | 2.02 | % |  | 1.68 | % |  | 1.38 | %
Total borrowings |  | 875,960 |  |  | 862,997 |  |  | 986,026 |  |  | 1.96 | % |  | 1.68 | % |  | 1.33 | %
Total funding liabilities |  | 3,643,008 |  |  | 3,602,594 |  |  | 3,534,986 |  |  | 0.84 | % |  | 0.72 | % |  | 0.60 | %
Other liabilities |  | 59,126 |  |  | 50,147 |  |  | 40,790 |  |  |  |  |  |  |
Shareholders' equity |  | 404,874 |  |  | 402,626 |  |  | 403,623 |  |  |  |  |  |  |
Total liabilities & shareholders' equity |  | $ | 4,107,008 |  |  | $ | 4,055,367 |  |  | $ | 3,979,399 |  |  |  |  |  |  |
Net interest rate spread (fully-taxable equivalent)(1) |  | 3.06 | % |  | 3.06 | % |  | 3.14 | %
Net interest margin (fully-taxable equivalent)(1) |  | 3.10 | % |  | 3.10 | % |  | 3.16 | %
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(1)(4) |  | 3.04 | % |  | 3.04 | % |  | 3.06 | %

(1) | Balances for the three months ended June 30, 2017 were revised to include average interest-bearing deposits in other banks in total average interest-earning assets. Previously, average interest-bearing deposits in other banks was presented in other assets.

(2) | Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the period, including certain commercial loans.

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

(4) | Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017 totaling $578,000, $558,000 and $861,000, respectively.

Year-to-Date Average Balance and Yield/Rate Analysis (unaudited)
|  | For The Six Months Ended
|  | Average Balance |  | Yield/Rate
(In thousands) |  | June 30, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
Assets |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |
Interest-bearing deposits in other banks(1) |  | $ | 55,254 |  |  | $ | 35,911 |  |  | 1.50 | % |  | 0.86 | %
Securities - taxable |  | 830,624 |  |  | 838,294 |  |  | 2.27 | % |  | 2.22 | %
Securities - nontaxable(2) |  | 98,783 |  |  | 102,364 |  |  | 3.41 | % |  | 4.19 | %
Loans(3)(4): |  |  |  |  |  |  |  |
Residential real estate |  | 872,947 |  |  | 820,522 |  |  | 4.16 | % |  | 4.11 | %
Commercial real estate |  | 1,176,034 |  |  | 1,095,425 |  |  | 4.28 | % |  | 3.99 | %
Commercial(2) |  | 350,842 |  |  | 327,527 |  |  | 4.35 | % |  | 4.16 | %
Municipal(2) |  | 19,648 |  |  | 17,176 |  |  | 3.22 | % |  | 3.41 | %
Consumer and home equity |  | 340,929 |  |  | 342,156 |  |  | 4.88 | % |  | 4.34 | %
HPFC |  | 42,462 |  |  | 56,035 |  |  | 7.89 | % |  | 8.55 | %
Total loans |  | 2,802,862 |  |  | 2,658,841 |  |  | 4.37 | % |  | 4.19 | %
Total interest-earning assets(1) |  | 3,787,523 |  |  | 3,635,410 |  |  | 3.84 | % |  | 3.70 | %
Other assets |  | 293,807 |  |  | 306,419 |  |  |  |  |
Total assets |  | $ | 4,081,330 |  |  | $ | 3,941,829 |  |  |  |  |
Liabilities & Shareholders' Equity |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |
Demand |  | $ | 458,428 |  |  | $ | 392,233 |  |  | — | % |  | — | %
Interest checking |  | 836,477 |  |  | 724,560 |  |  | 0.42 | % |  | 0.17 | %
Savings |  | 488,397 |  |  | 489,226 |  |  | 0.06 | % |  | 0.06 | %
Money market |  | 497,670 |  |  | 480,807 |  |  | 0.74 | % |  | 0.47 | %
Certificates of deposit(4) |  | 472,426 |  |  | 460,340 |  |  | 1.03 | % |  | 0.90 | %
Total deposits |  | 2,753,398 |  |  | 2,547,166 |  |  | 0.45 | % |  | 0.31 | %
Borrowings: |  |  |  |  |  |  |  |
Brokered deposits |  | 238,988 |  |  | 329,292 |  |  | 1.74 | % |  | 0.98 | %
Customer repurchase agreements |  | 242,452 |  |  | 226,972 |  |  | 0.88 | % |  | 0.41 | %
Subordinated debentures |  | 58,950 |  |  | 58,795 |  |  | 5.81 | % |  | 5.81 | %
Other borrowings |  | 329,124 |  |  | 338,076 |  |  | 1.85 | % |  | 1.30 | %
Total borrowings |  | 869,514 |  |  | 953,135 |  |  | 1.82 | % |  | 1.26 | %
Total funding liabilities |  | 3,622,912 |  |  | 3,500,301 |  |  | 0.78 | % |  | 0.57 | %
Other liabilities |  | 54,662 |  |  | 42,552 |  |  |  |  |
Shareholders' equity |  | 403,756 |  |  | 398,976 |  |  |  |  |
Total liabilities & shareholders' equity |  | $ | 4,081,330 |  |  | $ | 3,941,829 |  |  |  |  |
Net interest rate spread (fully-taxable equivalent)(1) |  | 3.06 | % |  | 3.13 | %
Net interest margin (fully-taxable equivalent)(1) |  | 3.10 | % |  | 3.15 | %
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(1)(4) |  | 3.04 | % |  | 3.06 | %

(1) | Balances for the six months ended June 30, 2017 were revised to include average interest-bearing deposits in other banks in total average interest-earning assets. Previously, average interest-bearing deposits in other banks was presented in other assets.

(2) | Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the period, including certain commercial loans.

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

(4) | Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the six months ended June 30, 2018 and 2017 totaling $1.1 million and $1.7 million, respectively.

Asset Quality Data
(unaudited)
(In thousands) |  | At or For The Six Months Ended June 30, 2018 |  | At or For The Three Months Ended March 31, 2018 |  | At or For The Year Ended December 31, 2017 |  | At or For The Nine Months Ended September 30, 2017 |  | At or For The Six Months Ended June 30, 2017
Non-accrual loans: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 5,742 |  |  | $ | 6,185 |  |  | $ | 4,979 |  |  | $ | 4,465 |  |  | $ | 4,890 |
Commercial real estate |  | 5,600 |  |  | 4,603 |  |  | 5,642 |  |  | 5,887 |  |  | 16,291 |
Commercial |  | 1,934 |  |  | 1,991 |  |  | 2,000 |  |  | 1,830 |  |  | 2,056 |
Consumer |  | 1,700 |  |  | 1,464 |  |  | 1,650 |  |  | 1,626 |  |  | 1,371 |
HPFC |  | 834 |  |  | 655 |  |  | 1,043 |  |  | 838 |  |  | 1,083 |
Total non-accrual loans |  | 15,810 |  |  | 14,898 |  |  | 15,314 |  |  | 14,646 |  |  | 25,691 |
Loans 90 days past due and accruing |  | — |  |  | — |  |  | — |  |  | — |  |  | 76 |
Accruing troubled-debt restructured loans not included above |  | 4,000 |  |  | 4,361 |  |  | 5,012 |  |  | 5,154 |  |  | 4,809 |
Total non-performing loans |  | 19,810 |  |  | 19,259 |  |  | 20,326 |  |  | 19,800 |  |  | 30,576 |
Other real estate owned |  | 130 |  |  | 130 |  |  | 130 |  |  | 341 |  |  | 341 |
Total non-performing assets |  | $ | 19,940 |  |  | $ | 19,389 |  |  | $ | 20,456 |  |  | $ | 20,141 |  |  | $ | 30,917 |
Loans 30-89 days past due: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 2,222 |  |  | $ | 2,777 |  |  | $ | 5,277 |  |  | $ | 3,169 |  |  | $ | 3,020 |
Commercial real estate |  | 309 |  |  | 1,121 |  |  | 1,135 |  |  | 2,297 |  |  | 3,442 |
Commercial |  | 1,490 |  |  | 243 |  |  | 518 |  |  | 712 |  |  | 269 |
Consumer |  | 1,258 |  |  | 1,190 |  |  | 1,197 |  |  | 1,256 |  |  | 1,378 |
HPFC |  | 455 |  |  | 528 |  |  | 887 |  |  | 938 |  |  | 639 |
Total loans 30-89 days past due |  | $ | 5,734 |  |  | $ | 5,859 |  |  | $ | 9,014 |  |  | $ | 8,372 |  |  | $ | 8,748 |
Allowance for loan losses at the beginning of the period |  | $ | 24,171 |  |  | $ | 24,171 |  |  | $ | 23,116 |  |  | $ | 23,116 |  |  | $ | 23,116 |
Provision (credit) for loan losses |  | 490 |  |  | (500 | ) |  | 3,026 |  |  | 2,786 |  |  | 1,984 |
Charge-offs: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | 116 |  |  | 31 |  |  | 482 |  |  | 433 |  |  | 195 |
Commercial real estate |  | 512 |  |  | 426 |  |  | 124 |  |  | 81 |  |  | 12 |
Commercial |  | 298 |  |  | 171 |  |  | 1,014 |  |  | 650 |  |  | 281 |
Consumer |  | 266 |  |  | 175 |  |  | 558 |  |  | 493 |  |  | 454 |
HPFC |  | — |  |  | — |  |  | 290 |  |  | 274 |  |  | 81 |
Total charge-offs |  | 1,192 |  |  | 803 |  |  | 2,468 |  |  | 1,931 |  |  | 1,023 |
Total recoveries |  | (199 | ) |  | (122 | ) |  | (497 | ) |  | (442 | ) |  | (317 | )
Net charge-offs |  | 993 |  |  | 681 |  |  | 1,971 |  |  | 1,489 |  |  | 706 |
Allowance for loan losses at the end of the period |  | $ | 23,668 |  |  | $ | 22,990 |  |  | $ | 24,171 |  |  | $ | 24,413 |  |  | $ | 24,394 |
Components of allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 23,668 |  |  | $ | 22,990 |  |  | $ | 24,171 |  |  | $ | 24,413 |  |  | $ | 24,394 |
Liability for unfunded credit commitments |  | 16 |  |  | 23 |  |  | 20 |  |  | 22 |  |  | 7 |
Allowance for credit losses |  | $ | 23,684 |  |  | $ | 23,013 |  |  | $ | 24,191 |  |  | $ | 24,435 |  |  | $ | 24,401 |
Ratios: |  |  |  |  |  |  |  |  |  |
Non-performing loans to total loans |  | 0.69 | % |  | 0.69 | % |  | 0.73 | % |  | 0.72 | % |  | 1.12 | %
Non-performing assets to total assets |  | 0.48 | % |  | 0.47 | % |  | 0.50 | % |  | 0.50 | % |  | 0.77 | %
Allowance for loan losses to total loans |  | 0.83 | % |  | 0.82 | % |  | 0.87 | % |  | 0.89 | % |  | 0.89 | %
Net charge-offs to average loans (annualized): |  |  |  |  |  |  |  |  |  |
Quarter-to-date |  | 0.04 | % |  | 0.10 | % |  | 0.07 | % |  | 0.11 | % |  | 0.11 | %
Year-to-date |  | 0.07 | % |  | 0.10 | % |  | 0.07 | % |  | 0.07 | % |  | 0.05 | %
Allowance for loan losses to non-performing loans |  | 119.48 | % |  | 119.37 | % |  | 118.92 | % |  | 123.30 | % |  | 79.78 | %
Loans 30-89 days past due to total loans |  | 0.20 | % |  | 0.21 | % |  | 0.32 | % |  | 0.30 | % |  | 0.32 | %

Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)

Return on Average Tangible Equity: |  |  |  |
|  | For the Three Months Ended |  | For the Six Months Ended
(In thousands) |  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
Net income, as presented |  | $ | 12,217 |  |  | $ | 12,820 |  |  | $ | 10,234 |  |  | $ | 25,037 |  |  | $ | 20,310 |
Add: amortization of intangible assets, net of tax(1) |  | 143 |  |  | 143 |  |  | 307 |  |  | 286 |  |  | 614 |
Net income, adjusted for amortization of intangible assets |  | $ | 12,360 |  |  | $ | 12,963 |  |  | $ | 10,541 |  |  | $ | 25,323 |  |  | $ | 20,924 |
Average equity |  | $ | 404,874 |  |  | $ | 402,626 |  |  | $ | 403,623 |  |  | $ | 403,756 |  |  | $ | 398,976 |
Less: average goodwill and other intangible assets |  | (99,377 | ) |  | (99,568 | ) |  | (100,745 | ) |  | (99,472 | ) |  | (100,986 | )
Average tangible equity |  | $ | 305,497 |  |  | $ | 303,058 |  |  | $ | 302,878 |  |  | $ | 304,284 |  |  | $ | 297,990 |
Return on average tangible equity |  | 16.23 | % |  | 17.35 | % |  | 13.96 | % |  | 16.78 | % |  | 14.16 | %
Return on average equity |  | 12.10 | % |  | 12.91 | % |  | 10.17 | % |  | 12.50 | % |  | 10.27 | %

(1) Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the respective period.

Efficiency Ratio: |  |  |  |  |  |  |  |  |  |
|  | For the Three Months Ended |  | For the Six Months Ended
(In thousands) |  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
Non-interest expense, as presented |  | $ | 22,895 |  |  | $ | 22,304 |  |  | $ | 22,158 |  |  | $ | 45,199 |  |  | $ | 43,586 |
Net interest income, as presented |  | $ | 29,481 |  |  | $ | 28,902 |  |  | $ | 28,626 |  |  | $ | 58,383 |  |  | $ | 56,481 |
Add: effect of tax-exempt income(1) |  | 257 |  |  | 254 |  |  | 525 |  |  | 511 |  |  | 1,045 |
Non-interest income, as presented |  | 9,501 |  |  | 8,804 |  |  | 9,888 |  |  | 18,305 |  |  | 18,460 |
Less: net gain on sale of securities |  | (31 | ) |  | — |  |  | — |  |  | (31 | ) |  | — |
Adjusted net interest income plus non-interest income |  | $ | 39,208 |  |  | $ | 37,960 |  |  | $ | 39,039 |  |  | $ | 77,168 |  |  | $ | 75,986 |
Non-GAAP efficiency ratio |  | 58.39 | % |  | 58.76 | % |  | 56.76 | % |  | 58.57 | % |  | 57.36 | %
GAAP efficiency ratio |  | 58.73 | % |  | 59.15 | % |  | 57.53 | % |  | 58.94 | % |  | 58.16 | %

(1) Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the respective period.

Tangible Book Value Per Share and Tangible Common Equity Ratio:
|  | June 30, 2018 |  | March 31, 2018 |  | June 30, 2017
(In thousands, except number of shares and per share data) |
Tangible Book Value Per Share: |  |  |  |  |  |
Shareholders' equity, as presented |  | $ | 409,939 |  |  | $ | 404,055 |  |  | $ | 406,960 |
Less: goodwill and other intangible assets |  | (99,289 | ) |  | (99,471 | ) |  | (100,517 | )
Tangible shareholders' equity |  | $ | 310,650 |  |  | $ | 304,584 |  |  | $ | 306,443 |
Shares outstanding at period end |  | 15,576,249 |  |  | 15,565,868 |  |  | 15,512,914 |
Tangible book value per share |  | $ | 19.94 |  |  | $ | 19.57 |  |  | $ | 19.75 |
Book value per share |  | $ | 26.32 |  |  | $ | 25.96 |  |  | $ | 26.23 |
Tangible Common Equity Ratio:
Total assets |  | $ | 4,193,782 |  |  | $ | 4,113,185 |  |  | $ | 4,036,367 |
Less: goodwill and other intangibles |  | (99,289 | ) |  | (99,471 | ) |  | (100,517 | )
Tangible assets |  | $ | 4,094,493 |  |  | $ | 4,013,714 |  |  | $ | 3,935,850 |
Tangible common equity ratio |  | 7.59 | % |  | 7.59 | % |  | 7.79 | %
Shareholders' equity to total assets |  | 9.77 | % |  | 9.82 | % |  | 10.08 | %