Stonegate Bank Announces Third Quarter 2015 Operating Results

POMPANO BEACH, FL--(Marketwired - Oct 23, 2015) - Stonegate Bank (NASDAQ: SGBK) ("Stonegate") reported net income of $6.8 million for the third quarter of 2015 or $0.54 per diluted common share, as compared to net income of $6.0 million for the second quarter of 2015 earnings or $0.46 per diluted common share ($0.53 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 third quarter:

• Loans: Total loans, net of discounts and deferred fees, grew $57.0 million during the third quarter of 2015 to $1.84 billion at September 30, 2015, a result of net organic loan growth during the third quarter. Commercial real estate ("CRE") comprised 41% of new loan originations for the third quarter of 2015, based upon the outstanding balance as of September 30, 2015. Residential loans accounted for 19% of the new loan originations; commercial and industrial ("C&I") was 16%; construction was 12% of new originations with the remaining balance in consumer and other loans. The loan production for the current quarter was comprised of 67% variable rate loans, with approximately 48% of the variable rate loans tied to LIBOR. Total loan growth for the nine months ended September 30, 2015 was approximately 7.7%.
  
  
• Asset Quality: Total loans past due 30 - 89 days, excluding nonaccrual loans, were $2.8 million at September 30, 2015, up $100,000 from June 30, 2015. Nonaccrual loans were $6.4 million at September 30, 2015, or 0.35% of total loans, up from $4.6 million at June 30, 2015, or 0.26% of total loans. Other real estate owned was $2.6 million at September 30, 2015. 
  
  
• Net Interest Income and Margin: Net interest income, on a tax equivalent basis, increased $705,000 for the three months ended September 30, 2015 as compared to the three months ended June 30, 2015. Net interest income totaled $22.7 million for the three months ended September 30, 2015. The net interest margin, on a tax equivalent basis, remained virtually unchanged at 4.32% for the third quarter of 2015 as compared to 4.31% for the second quarter of 2015. The increase in the margin was primarily a result of the increase in the average yield on loans.
  
  
• Noninterest Expense: Noninterest expense decreased to $12.4 million for the three months ended September 30, 2015 from $13.3 million for the three months ended June 30, 2015. 
  
  
• Capital: Stonegate remained well-capitalized as of September 30, 2015 with capital of $274.2 million as compared to $267.2 million at June 30, 2015. As of September 30, 2015, Stonegate's total risk-based capital ratio was 11.5%; Stonegate's Tier 1 and Common Equity Tier 1 capital ratio was 10.7%; and Stonegate's leverage capital ratio was 10.0%. 
  
  

Loans and Deposits

Loans outstanding at September 30, 2015 were $1.84 billion as compared to $1.78 billion at June 30, 2015, an increase of $57.0 million during the third quarter of 2015. 

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)				September 30, 2015		June 30, 2015
Commercial			$	210,261		$	198,304
Commercial real estate - owner occupied				466,945			460,830
Commercial real estate - other				549,629			548,735
Construction and land development				204,165			184,947
Residential real estate				329,685			325,866
Consumer and other loans				91,936			78,540
	Total loans			1,852,621			1,797,222
Less: discount on loans acquired				11,959			13,620
Less: net deferred fees				2,563			2,513
Recorded investment in loans				1,838,099			1,781,088
Less: Allowance for loan losses				18,023			17,414
	Net loans		$	1,820,076		$	1,763,674

New loan originations were $144.7 million during the third quarter of 2015, with fundings of $114.7 million. As of September 30, 2015, outstanding commitments were approximately $422.3 million with approximately $117.8 million representing new approved loan originations and approximately $97.9 million in unfunded construction commitments.

Deposits increased to $1.95 billion at September 30, 2015 from $1.93 billion at June 30, 2015. Noninterest-bearing deposits decreased $9.8 million to $389.7 million at September 30, 2015, and represented approximately 20% of total deposits. This decline was primarily due to the transfer of one account for about $8.8 million into a money market account. At September 30, 2015, money market accounts surpassed the $1 billion mark as they increased $55.2 million from June 30, 2015. Time deposits decreased approximately $16.0 million during the third quarter of 2015 due to runoff of acquired deposits that were priced above the market.

The following table shows the composition of deposits as of September 30, 2015 and June 30, 2015:

(in thousands of dollars)				September 30, 2015		June 30, 2015
Noninterest bearing			$	389,725		$	399,479
NOW				283,910			288,590
Money market				1,005,228			950,019
Savings				95,863			99,425
Certificates of deposit				176,755			192,744
	Total deposits		$	1,951,481		$	1,930,257

Credit Quality and Allowance for Loan Losses

As of September 30, 2015, Stonegate's past due and nonaccrual loans totaled $9.2 million and were 0.50% of total loans as compared to $7.3 million or 0.41% of total loans at June 30, 2015. Loans past due and nonaccrual acquired from Community Bank of Broward ("CBB") totaled $2.8 million as of September 30, 2015. Loans past due 30-89 days were $2.8 million at September 30, 2015, up slightly from $2.7 million at June 30, 2015. Nonaccrual loans stood at $6.4 million at September 30, 2015, an increase of $1.8 million from $4.6 million at June 30, 2015. This increase was primarily due to the addition of two loans for $1.2 million acquired from CBB, three loans for $1.2 million acquired from Florida Shores Bank - Southwest and two legacy loans for $900,000 that were transferred to nonaccrual status; offset by the transfer of two loans for $1.3 million to Other Real Estate Owned; and the payoff of one loan for approximately $25,000. Legacy nonaccrual loans were approximately $1.0 million at September 30, 2015 versus $221,000 as of June 30, 2015. Commercial real estate loans classified as nonaccrual were $4.1 million or 64.0% of the nonaccrual loans and residential loans classified as nonaccrual were $1.1 million or 17.8% of the nonaccrual loans as of September 30, 2015. As of September 30, 2015, Stonegate did not have any loans past due 90 days or more that were still accruing. There remained approximately $10.8 million in nonaccretable discounts on loans acquired as of September 30, 2015. Stonegate does not have any loans under which it participates in a loss share arrangement. 

Nonperforming assets (nonaccrual loans and other real estate owned) were $9.0 million as of September 30, 2015, an increase of $1.9 million from June 30, 2015. Other real estate owned increased to $2.6 million as of September 30, 2015 as compared to $2.4 million as of June 30, 2015. The increase was the result of the transfer of two loans offset by the sale of one property during the quarter.

The following table outlines nonperforming assets for the periods ended:

(in thousands of dollars)			September 30,  2015				June 30, 2015
Nonaccrual			$	6,366			$	4,649
Other real estate owned				2,629				2,402
	Total nonperforming assets		$	8,995			$	7,051
Nonperforming loans as a percentage of total loans				0.35	%			0.26	%
Nonperforming assets as a percentage of total assets				0.39	%			0.31	%

Loans modified as a troubled debt restructuring were $9.9 million and $12.5 million at September 30, 2015 and June 30, 2015, respectively. The decrease of $2.6 million is due to the transfer of one loan to OREO and the sale of another note. Loans classified as a troubled debt restructuring and on nonaccrual decreased to $450,000 at September 30, 2015 from $1.2 million as of June 30, 2015. There were no loans modified as troubled debt restructuring during the third quarter of 2015 as compared to one loan which was modified as troubled debt restructuring during the second quarter of 2015. Specific reserves allocated to loans modified as troubled debt restructuring were $117,000 at September 30, 2015, a decrease from $894,000 at June 30, 2015.

At September 30, 2015, the allowance for loan losses was $18.0 million, an increase of $609,000 from June 30, 2015. During the third quarter of 2015, recoveries totaled $359,000 and charge-offs were $593,000. Additionally, $843,000 was added to the allowance for loan losses through a provision expense. Specific reserves decreased to $700,000 at September 30, 2015 from $894,000 at June 30, 2015. The allowance for loan losses represented 0.98% of total loans as of September 30, 2015 and June 30, 2015. Additionally, the allowance represented 1.40% of total legacy loans as of September 30, 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)		September 30, 2015				June 30, 2015
Balance at beginning of period		$	17,414			$	16,768
Charge-offs			(593	)			(25	)
Recoveries			359				121
Provision for loan losses			843				550
Balance at end of period		$	18,023			$	17,414

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)				September 30, 2015					June 30, 2015
				Amount			%		Amount			%
Commercial				$	2,022		11.2		$	1,849		10.6
Commercial real estate					11,102		61.6			11,144		64.0
Construction and land development					1,763		9.8			1,879		10.8
Residential real estate					2,763		15.3			2,196		12.6
Consumer and other loans					373		2.1			346		2.0
		Total		$	18,023		100.0		$	17,414		100.0

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

(in thousands of dollars)			September 30, 2015			June 30, 2015			September 30, 2014
Impaired loans without a valuation allowance		$	6,178		$	6,785		$	8,658
Impaired loans with a valuation allowance			9,043			7,990			7,923
Total impaired loans		$	15,221		$	14,775		$	16,581
Valuation allowance related to impaired loans		$	700		$	894		$	1,289

Net Interest Income and Margin

On a tax equivalent basis, Stonegate's net interest income for the three months ended September 30, 2015 was $22.7 million, an increase of approximately $705,000 from the second quarter of 2015 and an increase of $8.6 million from the third quarter 2014. The increase from the second quarter of 2015 was a result of net organic loan growth while the increase from the third quarter of 2014 was primarily a result of the loans and other interest-earning assets acquired from CBB and organic growth. Average loans for the second quarter of 2015 were $1.80 billion as compared to $1.74 billion for the second quarter of 2015 and $1.22 billion for the third quarter of 2014. 

The net interest margin on a tax equivalent basis increased slightly from 4.31% for the second quarter of 2015 to 4.32% for the third quarter of 2015. The net interest margin was 3.67% for the third quarter of 2014. The net interest margin was augmented for the third quarter of 2015 due to the recognition of nonaccretable discounts. Without these discounts the net interest margin would have been approximately 4.00%. During the second quarter of 2015 Stonegate recognized approximately $130,000 in time deposit fair value amortization from the CBB acquisition that was not repeated in the third quarter. The net interest margin would have been 4.28% had this reduction in interest expense not occurred during the second quarter of 2015. Additionally, the net interest margin for the second quarter of 2015 was slightly higher due to recognition of nonaccretable discounts on several acquired loans which were paid off during the current quarter. The average yield on total earning assets was 4.72% for the third quarter of 2015 versus 4.68% for the second quarter of 2015. This increase was due primarily to the shift of approximately $31.2 million from deposits with interest at banks to loans. The average yield on paying liabilities increased 5 basis points from 0.48% from the second quarter of 2015 to 0.53% for the third quarter of 2015. However, the yield on paying liabilities for the second quarter of 2015 would have been 4 basis points higher at 0.52% if the reduction of interest expense had not occurred during the second quarter. As such, the actual increase over the second quarter was only 1 basis point. Stonegate's cost of funds has declined from 0.49% for the September 2014 month-to-date average to 0.43% for the September 2015 month-to-date average. The cost of funds increased slightly from the June 2015 month-to-date average due to the shift of deposits from noninterest-bearing deposits to interest-bearing.

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)

		3rd Quarter 2015									2nd Quarter 2015									3rd Quarter 2014
		Average Balance			Interest			Rate			Average Balance			Interest			Rate			Average Balance			Interest			Rate
ASSETS
Loans, Net(1)(2)(4)		$	1,801,517		$	24,182		5.33	%		$	1,740,670		$	23,281		5.36	%		$	1,218,116		$	15,450		5.03	%
Investment Securities			108,046			433		1.59				107,226			420		1.57				88,822			300		1.34
Federal Funds Sold			26,522			24		0.36				20,000			15		0.30				20,000			10		0.20
Other Investments(3)			2,895			33		4.52				2,895			30		4.16				2,422			22		3.60
Deposits with interest at banks			143,267			117		0.32				174,466			141		0.32				194,987			143		0.29
Total Earning Assets			2,082,247			24,789		4.72	%			2,045,257			23,887		4.68	%			1,524,347			15,925		4.14	%
LIABILITIES
Savings, NOW and Money Market		$	1,360,792		$	1,677		0.49	%		$	1,332,580		$	1,596		0.48	%		$	999,423		$	1,336		0.53	%
Time Deposits			181,453			226		0.49				209,209			113		0.22				183,597			267		0.58
Total Interest Bearing Deposits			1,542,245			1,903		0.49				1,541,789			1,709		0.44				1,183,020			1,603		0.54
Other Borrowings			63,095			223		1.40				61,550			220		1.43				51,709			210		1.61
Total Interest Bearing Liabilities			1,605,340			2,126		0.52	%			1,603,339			1,929		0.48	%			1,234,729			1,813		0.58	%
Net interest spread (tax equivalent basis) (4)								4.20	%								4.20	%								3.56	%
Net interest margin (tax equivalent basis) (5)								4.32	%								4.31	%								3.67	%

(1)		Average balances include nonaccrual loans, and are net of unearned loan fees of $2,548, $2,493 and $1,403 for 3rd Quarter 2015, 2nd Quarter 2015 and 3rd Quarter 2014, respectively.
(2)		Interest income includes fees on loans of $49, $85 and $23 for 3rd Quarter 2015, 2nd Quarter 2015 and 3rd 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 $1.7 million for the third quarter of 2015 increased from $1.6 million for the quarter ended June 30, 2015. The increase was primarily attributable to an increase in service charges on deposit accounts.

Noninterest Expense

Noninterest expense for the three months ended September 30, 2015 decreased from $13.3 million at June 30, 2015 to $12.4 million and was greater than the $9.4 million for the three months ended September 30, 2014. 

Salaries and employee benefits were $6.8 million for both the third and second quarter of 2015. This compares with $5.3 million for the three months ended September 30, 2014. During the second quarter of 2015 there was approximately $200,000 of salary and benefit costs associated with the CBB acquisition. During the third quarter of 2015 there was an adjustment made to the Bank's 2015 incentive accrual which resulted in salaries and employee benefits remaining the same as in the second quarter.

Occupancy and equipment expenses were $2.2 million, $2.4 million and $1.6 million for the three months ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively. The decrease, when compared to the second quarter of 2015, was due to the costs associated with a merger-related branch closing during the second quarter of 2015. The increase from the quarter ended September 20, 2014 is due to the additional facilities acquired from CBB.

Data processing expense decreased from $1.1 million for the second quarter of 2015 to $445,000 for the quarter ended September 30, 2015. This decrease was due to the conversion costs associated with CBB that were expensed during the second quarter. Professional fees decreased for the three months ended September 30, 2015 to $546,000. This compared to professional fees of $657,000 for the three months ended June 30, 2015 and $692,000 for the three months ended September 30, 2014. For the quarters ended September 30, 2015 and June 30, 2015 there were no merger related professional fees. However, during the third quarter of 2014, the Bank had approximately $213,000 of merger related professional fees. 

The table below outlines the expenses for the quarters ended:

		September 30, 2015			June 30, 2015			September 30, 2014
(in thousands of dollars)
Salaries and employee benefits		$	6,804		$	6,792		$	5,313
Occupancy and equipment expense			2,186			2,416			1,589
FDIC insurance and state assessments			381			379			251
Data processing			445			1,117			319
Loan and other real estate expense			200			153			(83	)
Professional fees			546			657			692
Core deposit intangible amortization			449			448			327
Other operating expenses			1,418			1,341			1,012
Totals		$	12,429		$	13,303		$	9,420

Merger and conversion costs associated with the CBB acquisition of approximately $1.0 million were expensed during the second quarter of 2015 with the realization of the associated cost savings beginning 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 third quarter of 2015. This telephone conference call will be held on Friday, October 23, 2015, beginning at 2:30 p.m. Eastern Time. The call-in toll-free telephone number is 1-866-820-3585. The Conference ID is 57446420. Participants will be asked for their First Name, Last Name and Company Name. An audio replay of the conference call will be available until November 9, 2015, and may be accessed telephonically at 1-855-859-2056 using Conference ID# 57446420. 

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)
				September 30, 2015				December 31, 2014
Assets
Cash and due from banks				$	217,301			$	231,406
Federal funds sold					15,000				20,000
Securities held to maturity (Fair value of $107,627 at September 30, 2015 and $83,318 at December 31, 2014)					105,711				81,627
Other investments					2,895				2,422
Loans, net of allowance for loan losses of $18,023 at September 30, 2015 and $16,630 at December 31, 2014					1,820,076				1,292,692
Premises and equipment, net					27,448				25,620
Bank-owned life insurance					29,582				22,832
Other real estate owned					2,629				259
Other assets					91,485				46,436
		Total assets		$	2,312,127			$	1,723,294
Liabilities and Stockholders' Equity
Liabilities
	Total deposits			$	1,951,481			$	1,452,194
	Other borrowings				69,657				56,297
	Other liabilities				16,836				13,688
		Total liabilities			2,037,974				1,522,179
Stockholders' Equity
	Senior non-cumulative perpetual preferred stock, Series A, $1,000 liquidation value; 12,750 shares authorized; no shares issued and outstanding as of June 30, 2015; 12,750 issued and outstanding as of December 31, 2014				-				12,750
	Common stock, $5 par value, 20,000,000 shares authorized; 12,643,752 issued and 12,641,094 shares outstanding as of June 30, 2015 and 10,257,163 shares issued and 10,254,505 outstanding as of December 31, 2014				63,301				51,286
	Additional paid-in capital				145,363				88,180
	Retained earnings				66,961				50,641
	Treasury Stock				(13	)			(13	)
	Accumulated other comprehensive income (loss)				(1,459	)			(1,729	)
		Total stockholders' equity			274,153				201,115
		Total liabilities and stockholders' equity		$	2,312,127			$	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
						September 30, 2015			June 30, 2015			September 30, 2014
Interest income:
	Interest and fees on loans					$	23,894		$	23,018		$	15,265
	Interest on securities						433			420			300
	Interest on federal funds sold and at other banks						141			156			153
	Other interest						33			30			22
		Total interest income					24,501			23,624			15,740
Interest expense:
	Interest on deposits						1,903			1,709			1,603
	Other interest						223			220			210
		Total interest expense					2,126			1,929			1,813
			Net interest income				22,375			21,695			13,927
	Provision for loan losses						843			550			-
				Net interest income after provision for loan losses			21,532			21,145			13,927
Noninterest income:
	Service charges and fees on deposit accounts						753			681			392
	Other noninterest income						936			953			710
		Total noninterest income					1,689			1,634			1,102
Noninterest expense:
	Salaries and employee benefits						6,804			6,792			5,313
	Occupancy and equipment expenses						2,186			2,416			1,589
	Data processing						445			1,117			319
	Professional fees						546			657			692
	Core deposit intangible amortization						449			448			327
	Other operating expenses						1,999			1,874			1,180
		Total noninterest expense					12,429			13,304			9,420
		Income before income taxes					10,792			9,475			5,609
		Income tax					3,955			3,437			2,018
		Net income					6,837			6,038			3,591
		Preferred stock dividend					-			26			32
			Net income applicable to common stock			$	6,837		$	6,012		$	3,559
Earnings per common share:
Basic						$	0.54		$	0.48		$	0.35
Diluted							0.53			0.46			0.34
Common shares used in the calculation of earnings per share:
Basic							12,650,042			12,636,874			10,100,763
Diluted							13,006,584			12,965,834			10,432,794

Stonegate Bank and Subsidiaries
CONDENSED FINANCIAL HIGHLIGHTS
(in thousands of dollars)
			As of
			September 30,  2015				June 30, 2015				September 30,  2014
BALANCE SHEET ITEMS:
Assets		$	2,312,127			$	2,272,132			$	1,675,768
Loans, net			1,820,076				1,763,674				1,215,193
Deposits			1,951,981				1,930,257				1,410,488
Stockholders' equity			274,153				267,182				194,952
CAPITAL RATIOS:
Total capital to risk weighted assets			11.5	%			11.5	%			14.7	%
Tier 1 capital to risk weighted assets			10.7				10.7				13.5
Common Equity Tier 1 to risk weighted assets			10.7				10.7				N/A
Tier 1 capital to average assets			10.0				9.7				10.7
QUARTERLY AVERAGE BALANCE SHEET ITEMS:
Assets		$	2,294,617			$	2,275,701			$	1,677,991
Interest earning assets			2,082,247				2,045,257				1,524,347
Loans, net			1,801,517				1,740,670				1,218,116
Interest bearing liabilities			1,605,340				1,603,339				1,234,729
Deposits			1,945,906				1,922,914				1,416,488
Stockholders' equity			272,508				275,906				194,080

Stonegate Bank and Subsidiaries
CONDENSED FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share data)
			Three Months Ended
			September 30, 2015			June 30, 2015			September 30,  2014
FINANCIAL DATA:
Net interest income		$	22,375		$	21,695		$	13,927
Net interest income - tax equivalent			22,663			21,958			14,112
Noninterest income			1,689			1,634			1,102
Noninterest expense			12,429			13,304			9,420
Income tax			3,955			3,437			2,018
Net income			6,837			6,038			3,591
Preferred stock dividend			-			26			32
Net income attributed to common shares			6,837			6,012			3,559
Weighted average number of common shares outstanding:
Basic			12,650,042			12,636,874			10,100,763
Diluted			13,006,584			12,965,834			10,432,794
Per common share data:
Basic		$	0.54		$	0.48		$	0.35
Diluted			0.53			0.46			0.34
Cash dividend declared to common shares			506			505			408

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 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)
			September 30, 2015			June 30, 2015
Interest income, as reported (GAAP)		$	24,501		$	23,624
Tax equivalents adjustments			288			263
Interest income (tax equivalent)		$	24,789		$	23,887
Net interest income, as reported (GAAP)		$	22,375		$	21,695
Tax equivalent adjustments			288			263
Net interest income (tax equivalent)		$	22,663		$	21,958
Net income (GAAP)		$	6,837		$	6,038
Non-interest expense adjustments:
Merger and acquisition related expenses			-			824
Branch closure expenses			-			228
Professional expenses			-			-
Tax effect using the effective tax rate for the period presented			-			382
Net operating income		$	6,837		$	6,708
Net operating income per common share		$	0.54		$	0.53