POMPANO BEACH, FL--(Marketwired - Apr 28, 2017) - Stonegate Bank (NASDAQ: SGBK) ("Stonegate") reported net income of $8.0 million for the first quarter of 2017, or $0.53 per diluted common share ($0.56 per common share net operating income, a non-GAAP measurement described below), as compared to net income of $6.9 million for the first quarter of 2016 or $0.52 per diluted common share. 

Net operating income is a non-GAAP financial measurement used by management to evaluate and monitor financial results of operations and excludes certain activities or transactions, such as merger and acquisition related expenses. Information related to our use of non-GAAP financial measures and a table reconciling GAAP to non-GAAP measures used in this press release are under the caption Non-GAAP Financial Measures - Reconciliation of GAAP to non-GAAP Measures.

Key highlights for the first quarter:

• Home BancShares Merger: Announced the signing of a definitive agreement with Home BancShares, Inc. and its wholly-owned bank subsidiary, Centennial Bank, an Arkansas state bank, under which Home BancShares, Inc. and Centennial Bank will acquire Stonegate. The agreement provides that Stonegate will merge with and into Centennial Bank. This transaction is expected to close in the fourth quarter of 2017.
  
  
• Insignia Bank Acquisition: Closed on the acquisition of Insignia Bank ("Insignia") on March 7, 2017, making Stonegate the largest community bank by deposit market share in Sarasota County. At acquisition, Insignia had $190.5 million in loans and $204.1 million in deposits, before any fair value adjustments.
  
  
• Loans: Total loans, net of discounts and deferred fees, increased $206.0 million during the first quarter of 2017 to $2.5 billion at March 31, 2017, a result of loans acquired through the Insignia acquisition and $20.4 million of net organic loan growth during the quarter. Payoffs again were above normal at approximately $67.2 million for the quarter. Based upon the outstanding balance as of March 31, 2017, commercial real estate ("CRE") comprised 46% of new loan originations, residential loans accounted for 23% of the new originations, commercial and industrial ("C&I") accounted for 13% of the new loan originations, and construction accounted for 11% with the remaining balance primarily in other loans. The loan production for the first quarter was comprised of 68% variable rate loans. Approximately 62% of the variable rate loans originated in the first quarter were tied to LIBOR and 14% were tied to the prime rate. 
  
  
• Asset Quality: Total loans past due, excluding nonaccrual loans, were $4.5 million at March 31, 2017, an increase of $4.1 million from December 31, 2016. Nonaccrual loans were $9.1 million at March 31, 2017, or 0.37% of total loans, an increase from $8.6 million at December 31, 2016, or 0.38% of total loans. Other real estate owned was $4.2 million at March 31, 2017, an increase of $1.4 million from December 31, 2016. The increase in OREO was a result of the Insignia acquisition. See Credit Quality and Allowance for Loan Losses for a detailed analysis of past due and nonaccrual loans.
   
• Net Interest Income and Margin: Net interest income, on a tax-equivalent basis, totaled $26.3 million for the three months ended March 31, 2017, and represented a decrease of $809,000 when compared to the three months ended December 31, 2016. The net interest margin, on a tax-equivalent basis, decreased to 3.91% for the first quarter of 2017 as compared to 4.01% for the fourth quarter of 2016 and a decrease over the tax-equivalent net interest margin of 3.92% for the quarter ended March 31, 2016. The decrease in the margin from the fourth quarter of 2016 to the first quarter of 2017 was primarily a result of greater nonaccretable discounts recognized during the fourth quarter 2016, higher liquidity in the form of deposits with interest at other banks and an increase in the yield on total interest- bearing liabilities. 
  
  
• Noninterest Expense: Noninterest expense decreased to $15.1 million for the three months ended March 31, 2017 from $16.9 million for the three months ended December 31, 2016. The decrease in expenses was primarily a result of expenses in the fourth quarter of 2016 associated with the Regent Bank and Insignia acquisitions.
  
  
• Capital: Stonegate remained well-capitalized as of March 31, 2017 with capital of $410.1 million as compared to $355.1 million at December 31, 2016. As of March 31, 2017, Stonegate's total risk-based capital ratio was 12.3%; Stonegate's Tier 1 risk-based and Common Equity Tier 1 capital ratios were each 11.3%; and Stonegate's leverage capital ratio was 10.0%. 
  
  

Loans and Deposits

Loans outstanding at March 31, 2017 were $2.48 billion as compared to $2.27 billion at December 31, 2016, an increase of $206.0 million during the first quarter of 2017. Loans outstanding that were acquired through Stonegate's acquisition of Insignia were $185.6 million at March 31, 2017.

The loan portfolio consists primarily of loans to individuals and small- and medium-sized businesses within Stonegate's primary market areas of South and West Florida. The table below shows the loan portfolio composition:

(in thousands of dollars)		March 31, 2017			December 31, 2016
Commercial		$	322,453		$	307,729
Commercial real estate - owner occupied			549,740			518,642
Commercial real estate - other			779,116			706,404
Construction and land development			264,040			261,006
Residential real estate			457,933			384,733
Consumer and other loans			117,954			107,089
Credit Cards			1,151			759
	Total loans		2,492,387			2,286,362
Less: discount on loans acquired			8,216			8,018
Less: net deferred fees			3,233			3,408
Recorded investment in loans			2,480,938			2,274,936
Less: Allowance for loan losses			19,538			18,888
	Net loans	$	2,461,400		$	2,256,048

New loan originations were $122.5 million during the first quarter of 2017, with fundings of $92.7 million. As of March 31, 2017, outstanding commitments were approximately $449.7 million with approximately $58.4 million representing new approved loan originations, approximately $123.8 million in unfunded construction commitments and approximately $17.1 in unfunded credit card lines. 

Total deposits increased to $2.72 billion at March 31, 2017 from $2.45 billion at December 31, 2016, primarily as a result of approximately $207.8 million of deposits acquired in connection with the Insignia acquisition. Noninterest-bearing deposits were $628.5 million at March 31, 2017, an increase from $506.8 million at December 31, 2016, and represented approximately 23.1% of Stonegate's total deposits. 

The following table shows the composition of deposits as of March 31, 2017 and December 31, 2016:

(in thousands of dollars)		March 31, 2017			December 31, 2016
Noninterest bearing		$	628,497		$	506,795
NOW			338,461			332,843
Money market			1,401,763			1,309,049
Savings			137,065			125,186
Certificates of deposit			215,153			173,953
	Total deposits	$	2,720,939		$	2,447,826

Credit Quality and Allowance for Loan Losses

Loans past due 30-89 days were $4.4 million at March 31, 2017, an increase from $387,000 at December 31, 2016. The increase in loans past due was primarily attributable to two loans, for a total of $2.6 million, acquired from Florida Shores Bank - Southwest, and another loan for $748,000 acquired from Regent Bank. Past dues acquired in the Insignia acquisition totaled $50,000 at March 31, 2017. There were no loans past due 90 days or more and still accruing at March 31, 2017. Legacy loans (i.e., loans made by Stonegate and not acquired through acquisition) past due at March 31, 2017 totaled $587,000 and $0 at December 31, 2016. Nonaccrual loans were $9.1 million at March 31, 2017, an increase from $8.6 million at December 31, 2016. This increase was due primarily to $770,000 of new loans that were changed to nonaccrual status during the first quarter, offset by one nonaccrual loan for $140,000 which was paid off and one loan for $100,000 which was transferred to OREO. Legacy nonaccrual loans were approximately $2.8 million at March 31, 2017 versus $2.6 million as of December 31, 2016. Residential loans classified as nonaccrual were $3.2 million, or 35.4% of the nonaccrual loans, and commercial real estate loans classified as nonaccrual were $1.3 million, or 14.7% of the nonaccrual loans, as of March 31, 2017. At March 31, 2017, there remained approximately $14.9 million in nonaccretable discounts on loans previously acquired, of which $1.0 million was associated with the loans acquired in the Insignia acquisition. None of the acquired loans are subject to a loss share arrangement with the Federal Deposit Insurance Corporation. The following table outlines Stonegate's past due and nonaccrual loans at March 31, 2017:

(dollars in thousands)	Legacy Bank			Insignia Bank			Regent Bank			Other Acquired Banks			Total
Past due 30-89 days	$	587		$	50		$	748		$	2,967		$	4,352
Past due 90 + days		-			-			-			-			-
Nonaccrual		2,847			-			3,893			2,319			9,059
Total	$	3,434		$	50		$	4,641		$	5,286		$	13,411

Nonperforming assets (nonaccrual loans and other real estate owned) were $13.3 million as of March 31, 2017, an increase of $1.9 million from December 31, 2016. Other real estate owned ("OREO") increased to $4.2 million as of March 31, 2017 as compared to $2.8 million as of December 31, 2016. The increase of $1.4 million in OREO from December 31, 2016 consisted primarily of $1.9 million acquired in the Insignia acquisition, partially offset by the sale of one single-family residence. 

The following table outlines nonperforming assets for the periods ended:

(in thousands of dollars)		March 31, 2017				December 31, 2016
Nonaccrual		$	9,059			$	8,556
Other real estate owned			4,222				2,792
	Total nonperforming assets	$	13,281			$	11,348
Nonperforming loans as a percentage of total loans			0.37	%			0.38	%
Nonperforming assets as a percentage of total assets			0.41	%			0.39	%

Loans modified as troubled debt restructuring were $9.4 million and $9.5 million at March 31, 2017 and December 31, 2016, respectively. There were no loans modified as troubled debt restructuring during the first quarter of 2017. Specific reserves allocated to loans modified as troubled debt restructuring increased to $161,000 at March 31, 2017, from $140,000 at December 31, 2016.

At March 31, 2017, the allowance for loan losses was $19.5 million, an increase of $650,000 from December 31, 2016. During the first quarter of 2017, recoveries totaled $169,000, charge-offs were $119,000 and we added provision expense of $600,000. The provision expense added for the first quarter was due to an increase in specific reserves and to the continued layering in of the acquired loan portfolios. Specific reserves increased to $820,000 at March 31, 2017 from $725,000 at December 31, 2016. The allowance for loan losses represented 0.79% of total loans as of March 31, 2017 and 0.83% of total loans as of December 31, 2016. 

The following table shows the activity in the allowance for loan losses for the quarters ended:

(in thousands of dollars)	March 31, 2017				December 31, 2016
Balance at beginning of period	$	18,888			$	18,749
Charge-offs		(119	)			(102	)
Recoveries		169				241
Provision for loan losses		600				-
Balance at end of period	$	19,538			$	18,888

The table below reflects the allowance allocation per loan category and percent of loans in each category to total loans for the periods indicated:

(in thousands of dollars)		March 31, 2017					December 31, 2016
		Amount			%		Amount			%
Commercial		$	2,946		15.1		$	2,757		14.6
Commercial real estate			11,742		60.1			11,382		60.3
Construction and land development			1,913		9.8			2,024		10.7
Residential real estate			2,491		12.7			2,273		12.0
Consumer and other loans			446		2.3			452		2.4
	Total	$	19,538		100.0		$	18,888		100.0

The following is a summary of information pertaining to impaired loans for the three months ended on the date indicated:

(in thousands of dollars)	March 31, 2017			December 31, 2016			March 31, 2016
Impaired loans without a valuation allowance	$	7,986		$	9,091		$	6,869
Impaired loans with a valuation allowance		7,976			6,556			6,489
Total impaired loans	$	15,962		$	15,647		$	13,358
Valuation allowance related to impaired loans	$	820		$	725		$	744

Net Interest Income and Margin

On a tax-equivalent basis, Stonegate's net interest income for the three months ended March 31, 2017 was $26.3 million, a decrease of approximately $809,000 from the fourth quarter of 2016 and an increase of $5.2 million from the first quarter of 2016. Average earning assets grew $36.3 million from the fourth quarter of 2016 to the first quarter of 2017, primarily a result of a $25.2 million increase in loans, and a $12.4 million increase in Stonegate's interest-earning deposits with other banks. The yield on loans decreased from 5.10% for the fourth quarter of 2016 to 5.00% for the first quarter of 2017, and was slightly higher than the 4.89% yield for the first quarter of 2016. The decrease in the loan yield from the fourth quarter of 2016 to the first quarter of 2017 was primarily due to the increased level of accretable and nonaccretable discounts recognized in the fourth quarter of 2016. The loan yield for the first quarter of 2017 without nonaccretable discounts was 4.82% versus 4.87% in the fourth quarter of 2016. During the first quarter of 2017, discounts of approximately $840,000 were recognized on loans which were paid off during the quarter.

The net interest margin on a tax-equivalent basis decreased from 4.01% for the fourth quarter of 2016 to 3.91% for the first quarter of 2017. The net interest margin was 3.92% for the first quarter of 2016. The average yield on total earning assets was 4.43% for the first quarter of 2017, a decrease of six basis points from the fourth quarter of 2016. The increase in the average balances of deposits held at other banks increased in the first quarter of 2017 as compared to the fourth quarter of 2016 by $12.4 million and by $94.4 million from the first quarter of 2016. This increase in a lower yielding asset has also attributed to the decline in the yield on earning assets and the net interest margin. The average yield on interest-bearing liabilities was 0.69% for the three months ended March 31, 2017 versus 0.64% for the three months ended December 31, 2016. The yield on time deposits increased seven basis points for the three months ended March 31, 2017 as compared to the three months ended December 31, 2016. This increase was largely due to the Insignia acquisitions as Insignia's time deposits had an average yield of 1.03% since March 7, 2017, the date of acquisition. Stonegate's cost of funds has increased from 0.46% for the March 2016 month-to-date average to 0.55% for the March 2017 month-to-date average. 

The following table recaps yields and costs by various interest-earning asset and interest-bearing liability account types for the current quarter, the previous quarter and the same quarter last year. 

Yield and cost table (unaudited)
(in thousands of dollars)
		1st Quarter 2017									4th Quarter 2016									1st Quarter 2016
		Average Balance			Interest			Rate			Average Balance			Interest			Rate			Average Balance			Interest			Rate
ASSETS
Loans, Net(1)(2)(4)		$	2,323,727		$	28,648		5.00	%		$	2,298,487		$	29,493		5.10	%		$	1,870,153		$	22,729		4.89	%
Investment Securities			117,985			483		1.66				117,740			462		1.56				108,691			449		1.66
Federal Funds Sold			30,000			68		0.92				31,793			56		0.70				30,000			54		0.72
Other Investments(3)			4,068			46		4.59				3,831			41		4.26				2,912			34		4.70
Deposits with interest at banks			248,528			531		0.87				236,139			311		0.52				154,087			221		0.58
Total Earning Assets			2,724,308			29,776		4.43	%			2,687,990			30,363		4.49	%			2,165,843			23,487		4.36	%
LIABILITIES
Savings, NOW and Money Market		$	1,795,495		$	2,823		0.64	%		$	1,773,901		$	2,649		0.59	%		$	1,479,261		$	1.969		0.54	%
Time Deposits			183,091			263		0.58				179,820			232		0.51				161,401			215		0.54
Total Interest Bearing Deposits			1,978,586			3,086		0.63				1,953,721			2,881		0.59				1,640,662			2.184		0.54
Other Borrowings			81,115			408		2.04				70,192			392		2.22				58,801			217		1.48
Total Interest Bearing Liabilities			2,059,701			3,494		0.69	%			2,023,913			3,273		0.64	%			1,699,463			2,401		0.57	%
Net interest spread (tax equivalent basis) (4)								3.74	%								3.85	%								3.79	%
Net interest margin (tax equivalent basis) (5)								3.91	%								4.01	%								3.92	%

(1)	Average balances include nonaccrual loans, and are net of unearned loan fees of $3,233, $3,408 and $3,005 for 1st quarter 2017, 4th quarter 2016, and 1st quarter 2016, respectively.
(2)	Interest income includes fees on loans of $60, $79 and $47 for 1st quarter 2017, 4th quarter 2016, and 1st quarter 2016, respectively.
(3)	"Other investments" consists of equity stock in the Federal Home Loan Bank of Atlanta ("FHLB") that Stonegate is required to own based on its transactions with the FHLB.
(4)	Interest income and rates include the effects of a tax equivalent adjustment using applicable statutory tax rates to adjust tax exempt interest income on tax exempt loans to a fully taxable basis.
(5)	Represents net interest income divided by total interest-earning assets.

Noninterest Income

Noninterest income of $2.1 million for the first quarter of 2017 decreased from $2.5 million for the quarter ended December 31, 2016. The decrease in noninterest income was primarily driven by higher gains on the sale of OREO of approximately $310,000 during the fourth quarter of 2016. Additionally, we did not receive any fees from interest rate swaps during the first quarter of 2017 versus $86,000 in the fourth quarter of 2016.

Noninterest Expense

Noninterest expense for the three months ended March 31, 2017 decreased to $15.1 million from $16.9 million at December 31, 2016, and was greater than the $12.5 million for the three months ended March 31, 2016. The decrease in noninterest expense was primarily related to expenses incurred in the fourth quarter with the Regent Bank and Insignia acquisitions. 

Salaries and employee benefits decreased to $8.4 million for the first quarter of 2017 versus $9.1 million for the fourth quarter of 2016. This compares with $7.1 million for the three months ended March 31, 2016. The decrease in salaries and employee benefits in the first quarter of 2017 from the fourth quarter of 2016 were payments made in the fourth quarter for the Regent Bank conversion and a decrease in the incentive accrual.

Occupancy and equipment expenses decreased $234,000 to $2.3 million for the three months ended March 31, 2017 versus $2.5 million for the three months ended December 31, 2016. The decrease was primarily due to a reduction in depreciation expense in the first quarter of 2017. Occupancy and equipment expenses were $2.1 million for the three months ended March 31, 2016. Expenses for merger-related branch closures in the fourth quarter of 2016 were approximately $48,000.

Data processing expenses decreased $1.2 million from $1.7 million for the fourth quarter of 2016 to $478,000 for the quarter ended March 31, 2017. Approximately $1.0 million of data processing expenses in the fourth quarter were related to the Regent Bank data conversion. Additionally during the fourth quarter, approximately $109,000 of the $1.7 million were expenses associated with Regent Bank's data processing prior to conversion. Data processing expenses associated with the Insignia acquisition were very minimal in the first three months of 2017. Professional fees increased for the three months ended March 31, 2017. During the first quarter of 2017, professional fees total $1.4 million versus $782,000 in the fourth quarter of 2016 and $604,000 for the three months ended March 31, 2016. During the first quarter of 2017, legal and other professional fees for merger-related expenses were $583,000 as compared to $43,000 in the fourth quarter of 2016. 

The table below outlines the expenses for the quarters ended:

(in thousands of dollars)		March 31, 2017			December 31, 2016			March 31, 2016
Salaries and employee benefits		$	8,411		$	9,135		$	7,097
Occupancy and equipment expense			2,264			2,498			2,113
FDIC insurance and state assessments			398			396			383
Data processing			478			1,669			452
Loan and other real estate expense			201			277			154
Professional fees			1,352			782			604
Core deposit intangible amortization			463			489			414
Other operating expenses			1,551			1,681			1,319
Totals		$	15,118		$	16,927		$	12,536

Looking forward to the second quarter of 2017, Stonegate anticipates additional costs associated with the Insignia data conversion and professional fees associated with the pending merger with Home Bancshares, Inc. and Centennial Bank.

About Stonegate Bank

Stonegate Bank is a full-service commercial bank, providing a wide range of business and consumer financial products and services through its 25 banking offices in its target marketplaces of South and West Florida, which are comprised primarily of Broward, Charlotte, Collier, Hillsborough, Lee, Miami-Dade, Palm Beach and Sarasota Counties in Florida. Stonegate's principal executive office and mailing address is 400 North Federal Highway, Pompano Beach, Florida 33062 and its telephone number is (954) 315-5500.

There will not be a conference call held this quarter to discuss the first quarter results.

Forward-Looking Statements

Any non-historical statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The following factors, among others, could cause our actual results to differ: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; our need and ability to incur additional debt or equity financing; our ability to execute our growth strategy through expansion; our ability to comply with the extensive laws and regulations to which we are subject; changes in the securities and capital markets; changes in general market interest rates; legislative and regulatory changes; monetary and fiscal policies of the U.S. Treasury and the Federal Reserve; changes in the quality or composition of our loan portfolios; demand for loan products; changes in deposit flows, real estate values, and competition and other economic, competitive, and technological factors affecting our operations, pricing, products and services; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our filings with the FDIC, which are available at the FDIC's internet site (http://www2.fdic.gov/efr). Forward-looking statements in this press release speak only s of the date of the press release and Stonegate Bank assumes no obligation to update any forward-looking statements or the reasons why actual results could differ.

Stonegate Bank and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands of dollars, except per share data)
				March 31, 2017				December 31, 2016
Assets
Cash and due from banks				$	403,766			$	305,803
Federal funds sold					30,000				30,000
Securities held to maturity (Fair value of $113,127 at March 31, 2017 and $116,719 at December 31, 2016)					112,244				116,529
Other investments					4,762				3,833
Loans, net of allowance for loan losses of $19,538 at March 31, 2017 and $18,888 at December 31, 2016					2,461,400				2,256,048
Premises and equipment, net					43,383				38,510
Bank-owned life insurance					47,444				44,011
Other real estate owned					4,222				2,792
Other assets					129,607				104,076
		Total assets		$	3,236,828			$	2,901,602
Liabilities and Stockholders' Equity
Liabilities
Total deposits				$	2,720,939			$	2,447,826
Other borrowings					81,566				71,448
Subordinated debentures					8,230				8,175
Other liabilities					16,029				19,040
		Total liabilities			2,826,764				2,546,489
Stockholders' Equity
	Common stock, $5 par value, 20,000,000 shares authorized; 15,304,046 issued and 15,301,388 shares outstanding as of March 31, 2017 and 14,267,451 shares issued and 14,264,793 outstanding as of December 31, 2016				76,520				71,337
	Additional paid-in capital				229,881				186,948
	Retained earnings				104,584				97,814
	Treasury Stock				(13	)			(13	)
	Accumulated other comprehensive income (loss)				(908	)			(973	)
		Total stockholders' equity			410,064				355,113
		Total liabilities and stockholders' equity		$	3,236,828			$	2,901,602

Stonegate Bank and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
(in thousands of dollars, except per share data)
					March 31, 2017			March 31, 2016
Interest income:
	Interest and fees on loans				$	28,253		$	22,280
	Interest on securities					483			449
	Interest on federal funds sold and at other banks					599			275
	Other interest					46			34
		Total interest income				29,381			23,038
Interest expense:
	Interest on deposits					3,086			2,184
	Other interest					408			217
		Total interest expense				3,494			2,401
			Net interest income			25,887			20,637
	Provision for loan losses					600			193
				Net interest income after provision for loan losses		25,287			20,444
Noninterest income:
Service charges and fees on deposit accounts						846			707
Other noninterest income						1,231			1,577
Total noninterest income						2,077			2,284
Noninterest expense:
	Salaries and employee benefits					8,411			7,097
	Occupancy and equipment expenses					2,264			2,113
	Data processing					478			452
	Professional fees					1,352			604
	Core deposit intangible amortization					463			414
	Other operating expenses					2,150			1,856
		Total noninterest expense				15,118			12,536
		Income before income taxes				12,246			10,192
		Income tax				4,252			3,298
			Net income applicable to common stock		$	7,994		$	6,894
Earnings per common share:
Basic					$	0.55		$	0.54
Diluted						0.53			0.52
Average common shares used in the calculation of earnings per share:
Basic						14,558,233			12,775,344
Diluted						15,090,775			13,164,346

Stonegate Bank and Subsidiaries
CONDENSED FINANCIAL HIGHLIGHTS
(in thousands of dollars)
	As of
	March 31, 2017				December 31, 2016				March 31, 2016
BALANCE SHEET ITEMS:
Assets	$	3,236,828			$	2,901,602			$	2,454,715
Loans, net of allowance for loan losses		2,461,400				2,256,048				1,867,652
Deposits		2,720,939				2,447,826				2,089,600
Stockholders' equity		410,064				355,113				289,520
CAPITAL RATIOS:
Total capital to risk weighted assets		12.3	%			12.1	%			12.2	%
Tier 1 capital to risk weighted assets		11.3				11.1				11.3
Common Equity Tier 1 to risk weighted assets		11.3				11.1				11.3
Tier 1 capital to average assets		10.0				10.0				10.2
BALANCE SHEET ITEMS QUARTERLY AVERAGE
Assets	$	2,995,584			$	2,948,409			$	2,393,187
Interest earning assets		2,724,308				2,687,990				2,165,843
Loans, net of allowance for loan losses		2,304,751				2,279,629				1,851,841
Interest bearing liabilities		2,059,701				2,023,913				1,699,463
Deposits		2,521,989				2,499,516				2,032,157
Stockholders' equity		373,555				351,730				287,235

Stonegate Bank and Subsidiaries
CONDENSED FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share data)
	March 31, 2017			March 31, 2016
FINANCIAL DATA:
Net interest income	$	25,887		$	20,637
Net interest income - tax equivalent		26,282			21,086
Noninterest income		2,077			2,284
Noninterest expense		15,118			12,536
Income tax		4,252			3,298
Net income attributed to common shares		7,994			6,894
Weighted average number of common shares outstanding:
Basic		14,558,233			12,775,344
Diluted		15,090,775			13,164,346
Per common share data:
Basic	$	0.55		$	0.54
Diluted		0.53			0.52
Cash dividend declared to common shares		1,224			1,023

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with GAAP. Stonegate's management uses these non-GAAP financial measures in their analysis of Stonegate's performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions, such as merger-related expenses, that in management's opinion can distort period-to-period comparisons of Stonegate's performance. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of Stonegate's core business. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures in this press release are set forth below.

Reconciliation of GAAP to non-GAAP Measures
(in thousands of dollars, except per share data)

	March 31, 2017			December 31, 2016
Interest income, as reported (GAAP)	$	29,381		$	29,917
Tax equivalents adjustments		395			446
Interest income (tax equivalent)	$	29,776		$	30,363
Net interest income, as reported (GAAP)	$	25,886		$	26,644
Tax equivalent adjustments		395			446
Net interest income (tax equivalent)	$	26,281		$	27,090
Net income (GAAP)		7,994			8,996
Non-interest expense adjustments:
Merger and acquisition related expenses		16			1,719
Professional expenses		583			45
Tax effect using the effective tax rate for the period presented		208			645
Cumulative effect of early adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting		-			1,252
Net operating income	$	8,385		$	8,860
Net operating income per common share	$	0.58		$	0.62