Stonegate Bank Announces First Quarter 2015 Operating

POMPANO BEACH, FL--(Marketwired - Apr 27, 2015) - Stonegate Bank (NASDAQ: SGBK) ("Stonegate") reported net income of $5.0 million for the first quarter of 2015 or $0.39 per diluted common share ($0.44 per share net operating income, a non-GAAP measurement described below), as compared to the fourth quarter of 2014 earnings of $5.2 million or $0.49 per diluted common share ($0.42 per share net operating income).

Net operating income is a non-GAAP financial measurement used by management to evaluate and monitor financial results of operations excluding certain non-recurring items such as merger and acquisition related expenses. A table reconciling GAAP to non-GAAP measures is presented below under the caption Non-GAAP Financial Measures - Reconciliation of GAAP to non-GAAP Measures.

Key highlights for the first quarter:

Community Bank of Broward: The acquisition of Community Bank of Broward ("CBB") closed on January 8, 2015. CBB's loans and deposits outstanding at acquisition were approximately $409.6 million and $430.2 million, respectively. The data conversion was completed on April 10, 2015. Costs associated with the conversion and other merger-related items will continue to impact earnings in the second quarter. The full realization of the associated cost savings is expected to begin in the third quarter of 2015.
Loans: Total loans, net of discounts and deferred fees, grew $423.9 million during the first quarter of 2015 to $1.73 billion at March 31, 2015. The increase in loans was primarily a result of the loans acquired from CBB. The fair value of these loans at March 31, 2015 was approximately $382.0 million. Net organic loan growth in the first quarter was $41.9 million. Based on the March 31, 2015 outstanding balance for new loan originations, commercial real estate ("CRE") accounted for approximately 31% of the originations, 24% was in construction and land development, 22% in residential, with the remaining balance in commercial and industrial ("C&I") and consumer and other loans. The production for the current quarter was 51% fixed rate loans and 49% variable rate loans, mostly tied to LIBOR.
Asset Quality: Total loans past due 30 - 89 days, excluding nonaccrual loans, were $2.7 million at March 31, 2015 as compared to $276,000 at December 31, 2014. Nonaccrual loans were $4.5 million at March 31, 2015, or 0.26% of total loans, up from $3.7 million at December 31, 2014, or 0.28% of total loans. Other real estate owned was $653,000 at March 31, 2015. The CBB acquisition contributed to the increase in past due and non-performing loans.
Net Interest Income and Margin: Net interest income, on a tax equivalent basis, increased $5.4 million for the three months ended March 31, 2015 as compared to the three months ended December 31, 2014. Net interest income totaled $20.2 million for the three months ended March 31, 2015. The net interest margin, on a tax equivalent basis, increased 37 basis points to 4.15% for the first quarter of 2015 from 3.78% for the fourth quarter of 2014. The increase in the margin was primarily a result of the increase in the average yield on loans.
Noninterest Expense: Noninterest expense increased to $13.5 million for the three months ended March 31, 2015 from $9.2 million for the three months ended December 31, 2014. This change was primarily due to expenses associated with the CBB acquisition in early January 2015.
Capital: Stonegate remained well-capitalized as of March 31, 2015 with capital of $273.4 million. Stonegate's total risk-based capital ratio was 12.3%; Stonegate's Tier 1 capital ratio was 11.4%; and Stonegate's leverage capital ratio was 10.5%. Stonegate currently includes in its capital $12.75 million of preferred stock issued by the U.S. Treasury through its Small Business Lending Fund program ("SBLF"). Stonegate intends to redeem the SBLF preferred stock toward the end of the second quarter of 2015 or early third quarter 2015, subject to regulatory approval.

Loans and Deposits

Loans outstanding at March 31, 2015 were $1.73 billion as compared to $1.31 billion at December 31, 2014, an increase of $423.9 million during the first quarter of 2015. The March 31, 2015 fair value of loans acquired from CBB was approximately $382.0 million.

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, 2015		December 31, 2014

Commercial		$	182,943	$	203,047
Commercial real estate - owner occupied			467,512		336,199
Commercial real estate - other			539,196		354,865
Construction and land development			167,014		125,501
Residential real estate			322,743		256,021
Consumer and other loans			71,211		44,507
	Total loans		1,750,619		1,320,140
Less: discount on loans acquired			14,997		8,742
Less: net deferred fees			2,372		2,076
Recorded investment in loans			1,733,250		1,309,322
Less: Allowance for loan losses			16,768		16,630
	Net loans	$	1,716,482	$	1,292,692

New loan originations were $73.0 million during the first quarter of 2015. As of March 31, 2015, outstanding commitments were approximately $379 million with approximately $84.6 million representing new approved loan originations and approximately $99.5 million in unfunded construction and land development commitments.

Deposits increased to $1.90 billion at March 31, 2015 from $1.45 billion at December 31, 2014. This increase was a result of the acquisition of CBB, which at the date of acquisition had approximately $430.2 million in total deposits. Noninterest-bearing deposits increased $129.8 million to $364.8 million at March 31, 2015, which represented approximately 19% of total deposits, as compared to $235.0 million at December 31, 2014.

The following table shows the composition of deposits as of March 31, 2015 and December 31, 2014:


(in thousands of dollars)		March 31, 2015		December 31, 2014

Noninterest bearing		$	364,793	$	234,981
NOW			305,576		226,696
Money market			900,268		816,384
Savings			106,153		11,007
Certificates of deposit			226,804		163,126
	Total deposits	$	1,903,594	$	1,452,194

Credit Quality and Allowance for Loan Losses

As of March 31, 2015, Stonegate's past due and nonaccrual loans totaled $7.2 million and were 0.42% of total loans as compared to $3.9 million or 0.30% of total loans at December 31, 2014. Loans past due and nonaccrual acquired from CBB totaled $1.3 million as of March 31, 2015. Loans past due 30-89 days at March 31, 2015, were $2.7 million versus $276,000 at December 31, 2014, an increase of $2.4 million. Approximately 50% of this increase was due to one loan while $367,000 was from the acquired CBB portfolio. Nonaccrual loans stood at $4.5 million at March 31, 2015, an increase of $800,000 from $3.7 million at December 31, 2014. This increase was the result of $941,000 of nonaccrual loans acquired from CBB. Legacy nonaccrual loans were approximately $224,000 as of March 31, 2015 up $156,000 from December 31, 2014. Acquired nonaccrual loans with a nonaccretable discount were $1.9 million as of March 31, 2015, net of $1.8 million nonaccretable discount. Commercial real estate loans classified as nonaccrual were $3.0 million or 66.0% of the nonaccrual loans as March 31, 2015. As of March 31, 2015, Stonegate did not have any loans past due 90 days or more that were still accruing. As of March 31, 2015, there remained approximately $13.6 million in nonaccretable discounts on loans acquired. Stonegate does not have any loans under which it participates in a loss share arrangement.

Nonperforming assets were $5.1 million as of March 31, 2015, an increase of $1.2 million from December 31, 2014. Other real estate owned increased to $653,000 as of March 31, 2015 as compared to $258,000 as of December 31, 2014. The increase was the result of the transfer of one parcel of vacant land held for future expansion during the quarter.

The following table outlines nonperforming assets for the periods ended:


(in thousands of dollars)		March 31, 2015			December 31, 2014

Nonaccrual		$	4,480		$	3,657
Other real estate owned			653			258
	Total nonperforming assets	$	5,133		$	3,915

Nonperforming loans as a percentage of total loans			0.26	%		0.28	%
Nonperforming assets as a percentage of total assets			0.23	%		0.23	%

Loans modified as a troubled debt restructuring were $11.3 million and $11.4 million at March 31, 2015 and December 31, 2014, respectively. Loans classified as a troubled debt restructuring and on nonaccrual totaled $1.3 million as of March 31, 2015, unchanged from December 31, 2014. There were no loans modified as troubled debt restructuring during the first quarter of 2015. Specific reserves allocated to loans modified as troubled debt restructuring were $634,000 at March 31, 2015, a slight decrease from $650,000 at December 31, 2014.

At March 31, 2015, the allowance for loan losses was $16.8 million, an increase of $138,000 from December 31, 2014. During the first quarter of 2015 there were recoveries of $138,000 and no charge-offs. Specific reserves increased to $928,000 at March 31, 2015 from $853,000 at December 31, 2014. The allowance for loan losses represented 0.97% and 1.27% of total loans as of March 31, 2015 and December 31, 2014, respectively. Additionally, the allowance represented 1.55% of total legacy loans as of March 31, 2015. Only legacy loans are covered by the allowance as acquired loans are recorded at their fair value on the date of acquisition and have not experienced significant deterioration above their initial estimate.

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


(in thousands of dollars)	March 31, 2015		December 31, 2014

Balance At Beginning Of Period	$	16,630	$	18,429
Charge-Offs		-		(449	)
Recoveries		138		225
Provision For Loan Losses		-		(1,575	)
Balance At End Of Period	$	16,768	$	16,630

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, 2015			December 31, 2014
		Amount		%	Amount		%
Commercial		$	1,670	10.0	$	2,270	13.7
Commercial real estate			10,673	63.6		9,778	58.8
Construction and land development			1,677	10.0		2,080	12.5
Residential real estate			2,124	12.6		2,291	13.8
Consumer and other loans			314	1.9		211	1.2
Unallocated			310	1.9		-	0.0
	Total	$	16,768	100.0	$	16,630	100.0

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


(in thousands of dollars)	March 31, 2015		December 31, 2014		March 31, 2014

Impaired loans without a valuation allowance	$	7,489	$	7,165	$	12,559
Impaired loans with a valuation allowance		8,034		8,072		6,309
Total impaired loans	$	15,523	$	15,237	$	18,868

Valuation allowance related to impaired loans	$	928	$	853	$	1,516

Net Interest Income and Margin

On a tax equivalent basis, Stonegate's net interest income for the three months ended March 31, 2015 was $20.2 million, an increase of approximately $5.4 million from the fourth quarter of 2014 and an increase of $7.3 million from the first quarter 2014. The increase from both the fourth and first quarters of 2014 was primarily a result of the loans and other interest-earning assets acquired from CBB and organic growth. Average loans for the first quarter of 2015 were $1.68 billion as compared to $1.28 billion for the fourth quarter of 2014 and $1.11 billion for the first quarter of 2014. Average investment securities grew approximately $22.2 million as the result of the securities acquired from Community Bank of Broward.

The net interest margin on a tax equivalent basis was 4.15% for the first quarter of 2015 as compared to 3.78% for the fourth quarter of 2014 and 3.56% for the first quarter of 2014. This represented an increase of 37 basis points from the fourth quarter of 2014. The net interest margin for the first quarter of 2015 was slightly higher due to accretion on various acquired loans. The average yield on total earning assets was 4.59% for the first quarter of 2015 versus 4.25% for the fourth quarter of 2014. This increase was due primarily to the increased average yield on loans from 5.01% for the fourth quarter 2014 to 5.24% for the quarter ended March 31, 2015. The average yield on paying liabilities decreased 3 basis points from 0.58% from the fourth quarter of 2014 to 0.55% for the first quarter of 2015. This decline from the fourth quarter of 2014 was a result of lower cost deposits assumed with the CBB acquisition. Stonegate's cost of funds has declined from 0.52% for the March 2014 month-to-date average to 0.45% for the March 2015 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 2015						4th Quarter 2014						1st Quarter 2014
	Average Balance		Interest		Rate		Average Balance		Interest		Rate		Average Balance		Interest		Rate
ASSETS
Loans, Net^(1)(2)(4)	$	1,677,378	$	21,675	5.24	%	$	1,278,430	$	16,135	5.01	%	$	1,113,953	$	14,116	5.14	%
Investment Securities		104,809		433	1.68			82,572		330	1.59			84,976		377	1.80
Federal Funds Sold		20,147		15	0.30			20,000		15	0.30			10,589		5	0.19
Other Investments⁽³⁾		2,822		36	5.17			2,422		26	4.26			2,543		25	3.99
Deposits with interest at banks		163,596		125	0.31			169,919		127	0.30			259,506		150	0.23
Total Earning Assets		1,968,752		22,284	4.59	%		1,553,343		16,633	4.25	%		1,471,567		14,673	4.04	%


LIABILITIES
Savings, NOW and Money Market	$	1,265,701	$	1,481	0.47	%	$	1,023,698	$	1,351	0.52	%	$	962,317	$	1,270	0.54	%
Time Deposits		231,554		382	0.67			169,660		256	0.60			193,769		303	0.63
Total Interest Bearing Deposits		1,497,255		1,863	0.50			1,193,358		1,607	0.53			1,156,0863		1,573	0.55
Other Borrowings		58,487		257	1.78			55,137		213	1.53			39,307		191	1.97
Total Interest Bearing Liabilities		1,555,742		2,120	0.55	%		1,248,495		1,820	0.58	%		1,195,393		1,764	0.60	%

Net interest spread (tax equivalent basis) ⁽⁴⁾					4.04	%					3.67	%					3.45	%
Net interest margin (tax equivalent basis) ⁽⁵⁾					4.15	%					3.78	%					3.56	%


⁽¹⁾		Average balances include nonaccrual loans, and are net of unearned loan fees of $2,372, $1,859 and $1,197 for 1^st Quarter 2015, 4^th Quarter 2014 and 1^st Quarter 2014, respectively.
⁽²⁾		Interest income includes fees on loans of $56, $27 and $60 for 1^st Quarter 2015, 4^th Quarter 2014 and 1^st Quarter 2014, 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 $1.5 million for the first quarter of 2015 increased from $1.2 million for the quarter ended December 31, 2014. Approximately $200,000 of the increase was attributable to an increase in service charges on deposit accounts. It should be noted that the revenue generated by the mortgage origination division during the first quarter of 2015 increased approximately 50% over the revenues generated during the fourth quarter.

Noninterest Expense

Noninterest expense for the three months ended March 31, 2015 increased from $9.2 million at December 31, 2014 to $13.5 million and was also greater than the $10.4 million for the three months ended March 31, 2014. Total merger related expenses were approximately $790,000 in the first quarter of 2015 as compared to $126,000 in the fourth quarter of 2014 and $775,000 in the first quarter of 2014.

Salaries and employee benefits increased from $5.1 million for the fourth quarter of 2014 to $7.0 million for the first quarter of 2015. For the three months ended March 31, 2014 salaries and employee benefits were $6.0 million. The increase over December 31, 2014 was primarily the result of adding additional staff from the CBB acquisition.

Occupancy and equipment expenses were $2.1 million, $1.4 million and $1.6 million for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively. The increase, when compared to the fourth quarter of 2014, was due to the expense associated with the additional offices and support facilities added from CBB.

Professional fees increased for the three months ended March 31, 2015 to $965,000. This compared to professional fees of $682,000 for the three months ended December 31, 2014 and $678,000 for the three months ended March 31, 2014. During the first quarter of 2015 Stonegate incurred approximately $434,000 in legal and other professional fees for merger-related expenses as compared to $126,000 in the fourth quarter of 2014. Included in professional fees for the quarter ended March 31, 2014 was approximately $67,000 of merger-related costs.

The table below outlines the expenses for the quarters ended:

	March 31, 2015		December 31, 2014		March 31, 2014
(in thousands of dollars)

Salaries and employee benefits	$	7,015	$	5,083	$	6,013
Occupancy and equipment expense		2,131		1,447		1,588
FDIC insurance and state assessments		380		326		230
Data processing		826		322		503
Loan and other real estate expense		54		86		150
Professional fees		965		682		678
Core deposit intangible amortization		456		326		284
Other operating expenses		1,639		883		945
Totals	$	13,466	$	9,155	$	10,391

It is anticipated that merger and conversion costs associated with the CBB acquisition will be expensed by the end of the second quarter of 2015 and Stonegate estimates that the full realization of the associated cost savings will begin in the third quarter of 2015.

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 21 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.

In conjunction with this earnings report the Company will offer a live participatory conference call to discuss the financial results for the first quarter of 2015. This telephone conference call will be held on Tuesday, April 28, 2015, beginning at 2:30 p.m. Eastern Time. The call-in toll-free telephone number is 1-855-837-2944. There is no Conference ID required. Participants will be asked for their First Name, Last Name and Company Name. An audio replay of the conference call will be available until May 27, 2015, and may be accessed telephonically at 1-855-859-2056 using Conference ID# 28183364.

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 as 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, 2015			December 31, 2014
Assets
Cash and due from banks			$	258,808		$	231,406
Federal funds sold				20,000			20,000
Securities held to maturity (Fair value of $107,914 at March 31, 2015 and $83,318 at December 31, 2014)				105,813			81,627
Other investments				2,895			2,422
Loans, net of allowance for loan losses of $16,768 at March 31, 2015 and $16,630 at December 31, 2014				1,716,482			1,292,692
Premises and equipment, net				28,484			25,620
Bank-owned life insurance				29,178			22,832
Other real estate owned				654			259
Other assets				93,489			46,436
		Total assets	$	2,255,803		$	1,723,294

Liabilities and Stockholders' Equity
Liabilities
	Total deposits		$	1,903,594		$	1,452,194
	Other borrowings			63,887			56,297
	Other liabilities			14,679			13,688
		Total liabilities		1,982,160			1,522,179

Stockholders' Equity
	Senior non-cumulative perpetual preferred stock, Series A, $1,000 liquidation value; 12,750 shares authorized; 12,750 issued and outstanding as of March 31, 2015 and December 31, 2014			12,750			12,750
	Common stock, $5 par value, 20,000,000 shares authorized; 12,637,752 issued and 12,635,094 shares outstanding as of March 31, 2015 and 10,257,163 shares issued and 10,254,505 outstanding as of December 31, 2014			63,189			51,286
	Additional paid-in capital			144,199			88,180
	Retained earnings			55,123			50,641
	Treasury Stock			(13	)		(13	)
	Accumulated other comprehensive income (loss)			(1,605	)		(1,729	)
		Total stockholders' equity		273,643			201,115
		Total liabilities and stockholders' equity	$	2,255,803		$	1,723,294




Stonegate Bank and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
(in thousands of dollars, except per share data)

				For the three months ended

				March 31, 2015		December 31, 2014			March 31, 2014
Interest income:
	Interest and fees on loans			$	21,447	$	15,929		$	14,026
	Interest on securities				434		330			377
	Interest on federal funds sold and at other banks				139		142			155
	Other interest				36		26			25
		Total interest income			22,056		16,427			14,583

Interest expense:
	Interest on deposits				1,863		1,607			1,573
	Other interest				257		213			191
		Total interest expense			2,120		1,820			1,764
		Net interest income			19,936		14,607			12,819
	Provision for loan losses				-		(1,575	)		525
		Net interest income after provision for loan losses			19,936		16,182			12,294

Noninterest income:
	Service charges and fees on deposit accounts				630		418			275
	Other noninterest income				840		768			1,094
		Total noninterest income			1,470		1,186			1,369
Noninterest expense:
	Salaries and employee benefits				7,015		5,083			6,013
	Occupancy and equipment expenses				2,131		1,447			1,588
	Data processing				826		322			503
	Professional fees				965		682			678
	Core deposit intangible amortization				456		326			284
	Other operating expenses				2,073		1,295			1,325
		Total noninterest expense			13,466		9,155			10,391
		Income before income taxes			7,940		8,213			3,272
		Income tax			2,920		2,983			1,214
		Net income			5,020		5,230			2,058
		Preferred stock dividend			32		32			-
			Net income applicable to common stock	$	4,988	$	5,198		$	2,058
Earnings per common share:
Basic				$	0.40	$	0.51		$	0.21
Diluted					0.39		0.49			0.21
Common shares used in the calculation of earnings per share:
Basic					12,418,145		10,231,070			9,763,477
Diluted					12,739,182		10,603,369			10,035,317




Stonegate Bank and Subsidiaries
CONDENSED FINANCIAL HIGHLIGHTS
(in thousands of dollars)

	March 31, 2015			As of December 31, 2014			March 31, 2014
BALANCE SHEET ITEMS:
Assets	$	2,255,803		$	1,723,294		$	1,710,787
Total loans		1,716,482			1,292,692			1,162,735
Deposits		1,903,594			1,452,194			1,473,752
Stockholders' equity		273,643			201,115			187,901

CAPITAL RATIOS:
Total capital to risk weighted assets		12.3	%		14.2	%		14.9	%
Tier 1 capital to risk weighted assets		11.4			13.0			13.6
Tier 1 capital to average assets		10.5			11.0			10.7

QUARTERLY AVERAGE BALANCE SHEET ITEMS:
Assets	$	2,179,332		$	1,706,017		$	1,618,398
Interest earning assets		1,968,752			1,553,343			1,471,567
Loans		1,677,378			1,278,430			1,113,953
Interest bearing liabilities		1,555,742			1,248,495			1,195,393
Deposits		1,836,843			1,438,572			1,388,111
Stockholders' equity		266,604			198,532			179,352




Stonegate Bank and Subsidiaries
CONDENSED FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share data)

	Three Months Ended
	March 31, 2015		December 31, 2014		March 31, 2014
FINANCIAL DATA:
Net interest income	$	19,936	$	14,607	$	12,819
Net interest income - tax equivalent		20,164		14,813		12,909
Noninterest income		1,470		1,186		1,369
Noninterest expense		13,466		9,155		10,391
Income tax		2,920		2,983		1,241
Net income		5,020		5,230		2,058
Preferred stock dividend		32		32		-
Net income attributed to common shares		4,988		5,198		2,058
Weighted average number of common shares outstanding:
Basic		12,418,145		10,231,070		9,763,477
Diluted		12,739,182		10,603,369		10,035,317
Per common share data:
Basic	$	0.40	$	0.51	$	0.21
Diluted		0.39		0.49		0.21
Cash dividend declared to common shares		505		410		398

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 exclude the effects of the amortization of intangibles and 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 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 businesses. 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 are included as tables at the end of this release. Refer to press release supplemental table below for this reconciliation.


Reconciliation of GAAP to non-GAAP Measures
(in thousands of dollars)
	March 31, 2015		December 31, 2014
Interest income, as reported (GAAP)	$	22,056	$	16,427
Tax equivalents adjustments		228		206
Interest income (tax equivalent)	$	22,284	$	16,633

Net interest income, as reported (GAAP)	$	19,936	$	14,607
Tax equivalent adjustments		228		206
Net interest income (tax equivalent)	$	20,164	$	14,813

Net income GAAP	$	5,020	$	5,230
Non-interest expense adjustments:
Provision for loan losses		-		(1,575	)
Merger and acquisition related expenses		355		-
Professional expenses		434		126
Tax effect using the effective tax rate for the period presented		293		(526	)
Net operating income	$	5,516	$	4,307

Net operating income per common share	$	0.44	$	0.42

Contact Information:

INVESTOR RELATIONS:
Dave Seleski

Stonegate Bank
(954) 315-5510

Stonegate Bank Announces First Quarter 2015 Operating Results