Third Quarter 207 Earnings Presentation October 24, 207
Forward looking statements This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 995. All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through the Company s use of words such as believes, anticipates, expects, may, will, assumes, should, predicts, could, would, intends, targets, estimates, projects, plans, potential and other similar words and expressions of the future or otherwise regarding the outlook for the Company s future business and financial performance and/or the performance of the banking and mortgage industry and economy in general and the Company s acquisition of the Clayton Banks and the benefits, cost, and financial impact thereof. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on the information known to, and current beliefs and expectations of, the Company s management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this news release including, without limitation, the risks and other factors set forth in the Company s December 3, 206 Form 0-K, filed with the SEC on March 3, 207 under the captions Cautionary note regarding forward-looking statements and Risk factors. Many of these factors are beyond the Company s ability to control or predict. The Company believes the forward-looking statements contained herein are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. The Company does not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as otherwise may be required by law.
Use of non-gaap financial measures This presentation contains certain financial measures that are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-gaap financial measures. These non GAAP financial measures include, without limitation, pro forma core net income, pro forma core diluted earnings per share, core efficiency ratio (tax equivalent basis), banking segment core efficiency ratio (tax equivalent basis), mortgage segment core efficiency ratio (tax equivalent basis), pro forma core return on average assets and equity, and pro forma core total revenue. Each of these non-gaap metrics excludes certain income and expense items that the Company s management considers to be non core in nature. The Company refers to these non GAAP measures as core measures. This Earnings Release also presents tangible assets, tangible common equity, tangible book value per common share, tangible common equity to tangible assets, return on tangible common equity, pro forma return on average tangible common equity and pro forma core return on average tangible common equity. Each of these non-gaap metrics excludes the impact of goodwill and other intangibles. The Company s management uses these non-gaap financial measures in their analysis of the Company s performance, financial condition and the efficiency of its operations as management believes such measures facilitate period-to-period comparisons and provide meaningful indications of its operating performance as they eliminate both gains and charges that management views as non-recurring or not indicative of operating performance. Management believes that these non-gaap financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant non-core gains and charges in the current and prior periods. The Company s management also believes that investors find these non-gaap financial measures useful as they assist investors in understanding our underlying operating performance and in the analysis of ongoing operating trends. In addition, because intangible assets such as goodwill and other intangibles, and the other items excluded each vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company s results to the results of other companies. However, the non-gaap financial measures discussed herein should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-gaap financial measures discussed herein may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-gaap financial measures we have discussed herein when comparing such non-gaap financial measures. A reconciliation of these non-gaap financial measures to the most directly comparable GAAP measures are provided on the appendix to this presentation. 2
3Q 207 Highlights Key highlights Reported EPS of $0.27, including pre-tax merger charges of $5.7 million Closed acquisition of the Clayton Banks effective July 3; system conversion expected before year-end Loans (HFI) grew to $3. billion, a 73.7% increase from 3Q 206; excluding acquired loans (HFI), grew 6.7% annualized from 2Q 207 Total deposits grew to $3.72 billion, a 40.8% increase from 3Q 206; excluding acquired deposits, grew.7% annualized from 2Q 207 Continued customer-focused balance sheet growth resulting in NIM (tax-equivalent) of 4.6% Financial results Three months ended September 30, 207 Non-GAAP Reported Core results GAAP results Diluted earnings per share $0.60 $0.27 Net income ($ millions) $8.5 $8.4 Return on average assets.76% 0.80% Return on average equity 3.4% 6.% Banking segment core efficiency ratio improved to 56.2% in 3Q 207, down from 60.4% in 2Q 207 Return on average tangible common equity 7.0% 7.7% Interest rate lock commitment (IRLC) volume was $2.00 billion for the quarter, up 0.0% from 3Q 206 Efficiency ratio 64.4% 85.0% Core results are non-gaap financial measures that adjust GAAP reported net income and other metrics for non-core income and expense items as outlined in the non-gaap reconciliation calculations, using a combined marginal income tax rate of 39.225% excluding one-time items. See Use of non-gaap financial measures and the Appendix hereto. 3
Clayton Banks merger update Key highlights Targeted metrics Metric As Announced Target Results to Date Closed acquisition effective July 3, 207, adding $. billion in loans and $855 million in customer deposits Strong cultural synergies have continued to grow, exceeding initial expectations Community investment and FirstBank Knoxville branding initiative underway - $0 million included in Q3 merger charges System migration / conversion by end of year Branch consolidation and signage conversion underway (6 net branch closings) 208 EPS Accretion 20%+ On-Track IRR 20%+ On-Track TBV Impact ~2.0% Dilutive 3.0%+ Accretive $3.79 TBVPS TBV Earnback 0.25 years Accretive TCE / TA ~8.3% 9.5% at 3Q 207 Cost Saves 20% On-Track for early 208 Merger Charges $20 million $6.5 million YTD Business mix by core, pre-tax contribution 28% 2Q 207 Banking Segment Mortgage Segment Solid progress towards mortgage segment <5%, pre-tax contribution 6% 3Q 207 72% 84% See Use of non-gaap financial measures and the Appendix hereto. 4
Consistently delivering balanced profitability and growth Core pro forma return on average assets ($mn).54%.62%.28% 0.84% 0.99% 203 204 205 206 YTD7 Drivers of profitability Loans / deposits Net interest margin Noninterest income ($mm) NPA / assets (%) Loans excluding HFS Loans HFS 86% 88% 84% 88% 96% 8% 9% 4% 6% 2% 4.05% 3.99% 4.28% 4.9% 4.6% $44 $3 $3 $36 $38 0.68% 0.58% 0.56% 0.58% 0.88% 68% 69% 70% 72% 84% 2 Our pro forma net income includes a pro forma provision for federal income taxes using a combined effective income tax rate of 35.37%, 35.63%, 35.08% and 36.75%, for the years ended December 3, 203, 204, 205 and 206, respectively, and also include the exclusion of a one-time tax charge in 3Q 206. The years ended December 3, 203, 204, 205 and 206 are annual percentages. 2 Includes $3.6 million of acquired excess land and facilities at September 30, 207 and $3.6 million of GNMA rebooked loans see page of the Quarterly Financial Supplement. 5
Yields and Costs (%) Avg. interest earning assets ($mm) Net interest margin remains strong Historical yield and costs 6.0% 5.0% 4.0% 3.0% 2.0%.0% -- $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $,500 $,000 $500 $0 NIM (%) 4.05% 3.99% 4.28% 4.9% 4.6% NIM, ex-accretion and nonaccrual interest collections (%) 3.88% 3.90% 4.04% 4.03% 4.33% Deposit cost (%) 0.30% 0.29% 0.32% 0.34% 0.46% Average interest earning assets Cost of deposits Includes tax-equivalent adjustment Yield on loans NIM Loan (HFI) yield 3Q 206 2Q 207 3Q 207 Contractual interest rate on loans HFI 4.57% 4.63% 5.08% Origination and other loan fee income 0.52% 0.30% 0.38% 5.09% 4.93% 5.46% Nonaccrual interest collections 0.09% 0.07% 0.6% Accretion on purchased loans 0.9% 0.7% 0.23% Syndication fee income 0.00% 0.02% 0.05% Total loan yield (HFI) 5.37% 5.9% 5.90% 6
Consistent loan growth and balanced portfolio Total loan growth ($mn) and commercial real estate concentration Commercial real estate (CRE) concentrations 2 % of Risk-Based Capital 3Q 206 3Q 207 (preliminary) $3,5 C&D loans subject to 00% riskbased capital threshold 3 69% 97% $,793 $,849 $,90 $,97 Total CRE loans subject to 300% risk-based capital threshold 3 58% 229% Loan portfolio breakdown C&I 38% Other Other 5% -4 family 7% -4 family 9% 5% -4 family HELOC 6% 4Q 202 3Q 207-4 family HELOC 3% Multifamily 3% C&D CRE 8% 4% Total HFI loans: $,240mn C&I 39% CRE 7% Multifamily 2% C&D 4% Total HFI loans: $3,5mn Exclude HFS loans, C&I includes owner-occupied CRE 2 Risk-based capital at bank level as defined in Call Report. 3Q 207 calculation is preliminary and subject to change. 3 Excludes owner-occupied CRE 7
Stable, low cost core deposit franchise Total deposits ($mn) Cost of deposits $3,79 $04 30.0% 25.0% 20.0% Noninterest bearing (%) Cost of total deposits (%) 27.5% 26.% 25.8% 26.2% 24.9% $2,640 $2,672 $2,70 $2,728 $2,639 $2,670 $2,700 $2,726 $3,64 Customer deposits Brokered and internet time deposits 5.0% 0.0% 5.0% 0.0% 0.46% 0.30% 0.32% 0.34% 0.29% Noninterest bearing deposits ($mn) Deposit composition Savings 5% Time 8% Non-interest bearing 25% $726 $697 $696 $75 $925 Interest-bearing and money market 52% Includes mortgage servicing-related escrow deposits of $64.3 million, $46.7 million, $43.7 million, $49.9 million and $56.8 million for the quarters ended September 30, 206, December 3, 206, March 3, 207, June 30, 207 and September 30, 207, respectively. 8
Mortgage Banking continues to execute 3Q 207 Mortgage Highlights IRLC volume by line of business (%) Rebalanced mix through better channel distribution as Correspondent growth offsets refinancing decline primarily in Consumer Direct Mortgage Banking income $3.3 million, up 3.6% from 2Q 207 Consumer Direct Correspondent Third party originated Retail Retail footprint 3Q 206 2Q 207 3Q 207 IRLC volume of $2.00 billion during 3Q 207 from $.82 billion during 3Q 206 IRLC volume: $,89mn $2,58mn $2,00mn IRLC pipeline of $540.7 million at 3Q 207 IRLC pipeline: $85mn $547mn $54mn Continuing to create operational leverage and refine efficiencies as business model develops, focusing on overall direct contribution Mortgage banking income ($mn) 3Q 206 2Q 207 3Q 207 IRLC volume mix by purpose (%) 3Q 206 Purchase 37% Refinance 2Q 207 55% 3Q 207 Gain on Sale $25.5 $23.9 $29.6 64% 36% 45% Fair value changes Servicing Revenue Fair value MSR change Total $7.8 $5.4 ($0.8) $3.7 $2.7 $3.5 $ -- ($.8) ($0.9) $36.9 $30.2 $3.3 63% Note: Values by channel in $ are included on page 8 of the Quarterly Financial Supplement for IRLC volume, IRLC pipeline and Mortgage sales. 9
Improving operating leverage remains a key objective Improving operating efficiency Consolidated 3Q 207 core efficiency ratio of 64.4% driven by Banking Segment core efficiency ratio of 56.2%, meeting our target level of sub-60% Core efficiency ratio (tax-equivalent basis) Banking Segment Consolidated Mortgage Segment Further realization of cost savings from Clayton Banks transaction will help efficiency ratio, expected to be fully phased-in in early 208 Bank s investment in IT systems, including a new core system, created a scalable platform designed to drive and support growth across markets 69.7% 65.2% 76.3% 92.5% 88.7% 73.7% 73.3% 62.6% 64.4% 78.3% 79.9% 70.2% 64.4% 60.4% 56.2% Continuing to refine mortgage banking with operational efficiency improvements while maintaining contribution See Use of non-gaap financial measures and the Appendix hereto. 0
Asset quality remains strong Nonperforming ratios Classified & PCI loans ($mn) NPLs / loans (HFI) NPAs / assets Classified Purchased credit impaired 0.88% $92 0.68% 0.6% 0.57% 0.58% 0.56% 0.58% 0.49% 0.50% 0.29% $40 $39 $38 $38 $7 $6 $6 $6 $60 LLR / loans Net charge-offs / average loans.30%.8%.20%.8% 0.2% 0.7% 0.75% (0.5%) (0.3%) (0.25%) Includes $3.6 million of acquired excess land and facilities at September 30, 207 and $3.6 million of GNMA rebooked loans see page of the Quarterly Financial Supplement.
Strong capital position for future growth Capital position Total capital composition Shareholder s equity / Assets 3Q 206 2Q 207 3Q 207 0.3% 5.2% 2.5% Trust Preferred 6% Tier 2 ALLL 5% TCE / TA 2 8.8% 3.9% 9.5% Common equity tier / Risk-weighted assets.2% 7.2% 0.8% Tier capital / Riskweighted assets 2.4% 8.3%.6% Common Equity Tier Capital 89% Total capital / Riskweighted assets 3.3% 9.% 2.2% Total capital : $48mn Tier capital / Average assets 0.3% 5.5%.4% Simple capital structure Total regulatory capital. 3Q 207 calculation is preliminary and subject to change. 2 See Use of non-gaap financial measures and the Appendix hereto. 2
Appendix 3
GAAP reconciliation and use of non-gaap financial measures Pro forma core net income 207 206 Pro forma core net income Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Pre-tax net income $ 2,990 $ 7,83 $ 5,78 $ 3,797 $ 5,979 Non-core items: Noninterest income Less change in fair value on mortgage servicing rights, net (893) (,840) (50) - - Less gain from securities, net 254 29-46 Less (loss) gain on sales or write-downs of other real estate owned and other assets (34) 62 748 (349),653 Noninterest expenses Plus one-time equity grants - - - - 2,960 Plus variable compensation charge related to cash settled equity awards - - 635,04 23 Plus merger and conversion 5,7 767 487 -,22 Plus (recovery of) impairment of mortgage servicing rights - - - (3,4) 2,402 Plus loss on sale of mortgage servicing rights - 249-4,447 - Pre tax core net income $ 29,654 $ 20,578 $ 6,052 $ 6,223 $ 20,607 Pro forma core income tax expense,38 7,659 5,768 5,739 7,672 Pro forma core net income $ 8,56 $ 2,99 $ 0,284 $ 0,484 $ 2,935 Weighted average common shares outstanding fully diluted 30,604,537 26,30,458 24,60,99 24,500,943 8,332,92 Pro forma core diluted earnings per share Diluted earning per share $ 0.27 $ 0.43 $ 0.40 $ 0.37 $ 0.07 Non-core items: Noninterest income Less change in fair value on mortgage servicing rights (0.03) (0.07) (0.02) - - Less gain from securities, net 0.0 0.00 0.00 0.00 0.02 Less (loss) gain on sales or write-downs of other real estate owned and other assets (0.0) 0.00 0.03 (0.0) 0.09 Noninterest expenses Plus one-time equity grants - - - - 0.6 Plus variable compensation charge related to cash settled equity awards - - 0.03 0.04 0.0 Plus merger and conversion 0.5 0.03 0.02-0.06 Plus (recovery of) impairment of mortgage servicing rights - - - (0.4) 0.3 Plus loss on sale of mortgage servicing rights - 0.0-0.8 - Tax effect (0.20) (0.04) (0.0) (0.04) 0.39 Pro forma core diluted earnings per share $ 0.60 $ 0.49 $ 0.42 $ 0.43 $ 0.7 4
GAAP reconciliation and use of non-gaap financial measures Tax-equivalent efficiency ratio 207 206 Core efficiency ratio (tax-equivalent basis) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Total noninterest expense $ 69,224 $ 49,36 $ 46,47 $ 47,39 $ 55,249 Less one-time equity grants - - - - 2,960 Less variable compensation charge related to cash settled equity awards - - 635,04 23 Less merger and conversion expenses 5,7 767 487 -,22 Less (recovery of) impairment of mortgage servicing rights - - - (3,4) 2,402 Less loss on sale of mortgage servicing rights - 249-4,447 - Core noninterest expense $ 53,53 $ 48,20 $ 45,295 $ 45,242 $ 48,832 Net interest income (tax-equivalent basis) 44,28 3,58 30,963 29,686 28,23 Total noninterest income 37,820 35,657 3,087 3,332 43,962 Less bargain purchase gain Less change in fair value on mortgage servicing rights (893) (,840) (50) - - Less gain on sales or write-downs of other real estate owned and other assets (34) 62 748 (349),653 Less gain on sales of securities 254 29-46 Core noninterest income 38,773 37,406 30,839 3,68 4,893 Core revenue $ 83,054 $ 68,564 $ 6,802 $ 6,367 $ 70,06 Efficiency ratio (GAAP) () 85.0% 74.35% 75.67% 78.39% 77.58% Core efficiency ratio (tax-equivalent basis) 64.43% 70.8% 73.29% 73.72% 69.65% () Efficiency ratio (GAAP) is calculated by dividing non-interest expense by total revenue 5
GAAP reconciliation and use of non-gaap financial measures Segment tax-equivalent efficiency ratio 207 206 Banking segment core efficiency ratio (tax equivalent) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Core consolidated noninterest expense $ 53,53 $ 48,20 $ 45,295 $ 45,242 $ 48,832 Less Mortgage segment noninterest expense 9,757 9,802 7,670 22,256 23,744 Add (recovery of) impairment of mortgage servicing rights - - - (3,4) 2,402 Add loss on sale of mortgage servicing rights - 249-4,447 - Adjusted Banking segment noninterest expense 33,756 28,567 27,625 24,022 27,490 Adjusted core revenue 83,054 68,564 6,802 6,367 70,06 Less Mortgage segment noninterest income 23,836 23,2 9,44 22,975 27,957 Less change in fair value on mortgage servicing rights (893) (,840) (50) - - Adjusted Banking segment total revenue $ 60, $ 47,283 $ 42,889 $ 38,392 $ 42,49 Banking segment core efficiency ratio (tax-equivalent basis) 56.6% 60.42% 64.4% 62.57% 65.22% Mortgage segment core efficiency ratio (tax equivalent) Consolidated Noninterest expense $ 69,224 $ 49,36 $ 46,47 $ 47,39 $ 55,529 Less (recovery of) impairment of mortgage servicing rights - - - (3,4) 2,402 Less loss on sale of mortgage servicing rights - 249-4,447 - Less Banking segment noninterest expense 49,467 29,334 28,747 25,030 3,785 Adjusted Mortgage segment noninterest expense $ 9,757 $ 9,553 $ 7,670 $ 2,253 $ 2,342 Total noninterest income 37,820 35,657 3,087 3,332 43,962 Less Banking segment noninterest income 3,984 2,536,673 8,357 6,005 Less change in fair value on mortgage servicing rights (893) (,840) (50) - - Adjusted Mortgage segment total revenue $ 24,729 $ 24,96 $ 9,95 $ 22,975 $ 27,957 Mortgage segment core efficiency ratio (tax-equivalent basis) 79.89% 78.33% 88.73% 92.50% 76.34% 6
GAAP reconciliation and use of non-gaap financial measures Tangible assets and equity 207 206 Tangible assets and equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Tangible Assets Total assets $ 4,58,943 $ 3,346,570 $ 3,66,459 $ 3,276,88 $ 3,87,80 Less goodwill 38,90 46,867 46,867 46,867 46,867 Less core deposit intangibles 2,550 4,048 4,7 4,563 5,090 Tangible assets $ 4,430,483 $ 3,295,655 $ 3,5,42 $ 3,255,45 $ 3,35,223 Tangible Common Equity Total shareholders' equity $ 572,528 $ 509,57 $ 342,42 $ 330,498 $ 329,08 Less goodwill 38,90 46,867 46,867 46,867 46,867 Less core deposit intangibles 2,550 4,048 4,7 4,563 5,090 Tangible common equity $ 42,068 $ 458,602 $ 29,04 $ 279,068 $ 277,5 Common shares outstanding 30,526,592 28,968,60 24,54,323 24,07,660 23,975,22 Book value per common share $ 8.76 $ 7.59 $ 4.6 $ 3.7 $ 3.73 Tangible book value per common share $ 3.79 $ 5.83 $ 2.05 $.58 $.56 Total shareholders' equity to total assets 2.50% 5.23% 0.8% 0.09% 0.33% Tangible common equity to tangible assets 9.50% 3.92% 9.34% 8.65% 8.84% Net income $ 8,388 $,239 $ 9,753 $ 9,00 $,207 Return on tangible common equity 7.90% 9.83% 3.59% 2.84%.73% Return on average tangible equity 207 206 Return on average tangible common equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Total average shareholders' equity $ 550,409 $ 398,805 $ 333,78 $ 38,986 $ 276,549 Less average goodwill 08,220 46,839 46,839 46,839 46,839 Less average core deposit intangibles 9,983 4,24 4,353 4,694 5,402 Average tangible common equity $ 432,206 $ 347,842 $ 28,986 $ 267,453 $ 224,308 Net income $ 8,388 $,239 $ 9,753 $ 9,00 $,207 Return on average tangible common equity 7.70% 2.96% 4.03% 3.40% 2.4% 7
GAAP reconciliation and use of non-gaap financial measures Pro forma return on average tangible common equity 207 206 Pro forma return on average tangible common equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Average tangible common equity $ 432,206 $ 347,842 $ 28,986 $ 267,453 $ 224,308 Pro forma net income $ 8,388 $,239 $ 9,753 $ 9,00 $ 0,033 Pro forma return on average tangible common equity 7.70% 2.96% 4.03% 3.40% 7.79% Pro forma core return on average tangible equity 207 206 Pro forma core return on average tangible equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Pre-tax pro forma net income $ 2,990 $ 7,83 $ 5,78 $ 3,797 $ 5,979 Adjustments: Add non-core items 6,664 2,765 874 2,426 4,628 Less pro forma core income tax expense,38 7,659 5,768 5,739 7,672 Pro forma core net income $ 8,56 $ 2,99 $ 0,284 $ 0,484 $ 2,935 Pro forma core return on average tangible common equity 7.00% 4.90% 4.79% 5.60% 22.94% Pro forma core return on average assets and equity 207 206 Pro forma core return on average assets and equity Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Net income $ 8,388 $,239 $ 9,753 $ 9,00 $,207 Average assets 4,62,478 3,224,783 3,72,49 3,206,398 3,05,670 Average equity 550,409 398,805 333,78 38,986 276,549 Return on average assets 80.00%.40%.25%.2% 0.6% Return on average equity 6.05%.30%.87%.24%.74% Pro forma core net income 8,56 2,99 0,284 0,484 2,935 Pro forma core return on average assets.76%.6%.3%.30%.7% Pro forma core return on average equity 3.35% 2.99% 2.52% 3.08% 8.6% 8
GAAP reconciliation and use of non-gaap financial measures Pro forma core return on average assets and equity Pro forma core return on average assets and equity YTD 207 206 205 204 203 Net income $ 29,380 $ 40,59 $ 48,586 $ 32,462 $ 26,903 Average assets 3,450,803 3,00,275 2,577,895 2,3,297 2,205,264 Average equity 428,260 276,587 228,844 203,65 92,460 Return on average assets.4%.35%.88%.40%.22% Return on average equity 9.7% 4.68% 2.23% 5.94% 3.98% Pro forma core net income $ 4,79 $ 46,279 $ 32,879 $ 22,872 $ 8,632 Pro forma core return on average assets.62%.54%.28% 0.99% 0.84% Pro forma core return on average equity 3.02% 6.73% 4.37%.23% 9.68% Pro forma core total revenue 207 206 Pro forma core total revenue Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Net interest income $ 43,60 $ 30,427 $ 30,25 $ 29,032 $ 27,67 Noninterest income 37,820 35,657 3,087 3,332 43,962 Less adjustments: Change in fair value of mortgage servicing rights (893) (,840) (50) - - Gain from securities, net 254 29-46 (Loss) gain on sales or write-downs of other real estate owned and other assets (34) 62 748 (349),653 Pro forma core total revenue $ 82,383 $ 67,833 $ 6,090 $ 60,73 $ 69,50 9
GAAP reconciliation and use of non-gaap financial measures Business mix by core, pre-tax contribution 207 206 Business mix by core, pre-tax contribution Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Pre-tax net income $ 2,990 $ 7,83 $ 5,78 $ 3,797 $ 5,979 Pre-tax Mortgage segment contribution 3,948 3,747 2,39 759 3,688 Less change in fair value on mortgage servicing rights (893) (,840) (50) - - Plus (recovery of) impairment of mortgage servicing rights - - - (3,4) 2,402 Plus loss on sale of mortgage servicing rights - 249-4,447 - Pre-tax core Mortgage segment contribution 4,84 5,836 2,640,795 6,090 Pre-tax Mortgage segment mix 30.39% 2.04% 4.09% 5.50% 23.08% Pre-tax core net income $ 29,654 $ 20,578 $ 6,052 $ 6,223 $ 20,607 Pre-tax core Mortgage segment mix 6.32% 28.36% 6.45%.06% 29.55% Pre-tax Banking segment mix 69.6% 78.96% 85.9% 94.50% 76.92% Pre-tax core Banking segment mix 83.68% 7.64% 83.55% 88.94% 70.45% 20