2018 Q1 Form 10-Q Financial Statement

#000093652818000041 Filed on May 02, 2018

View on sec.gov

Income Statement

Concept 2018 Q1 2017 Q1
Revenue $149.1M $136.2M
YoY Change 9.46% 0.84%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $11.50M $6.700M
YoY Change 71.64% -18.29%
% of Gross Profit
Operating Expenses
YoY Change
Operating Profit
YoY Change
Interest Expense $31.78M $28.47M
YoY Change 11.62% -0.93%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income $64.77M $62.79M
YoY Change 3.16% -0.68%
Income Tax $15.50M $20.72M
% Of Pretax Income 23.93% 33.0%
Net Earnings $49.27M $42.07M
YoY Change 17.12% 0.83%
Net Earnings / Revenue 33.05% 30.89%
Basic Earnings Per Share $0.58 $0.47
Diluted Earnings Per Share $0.57 $0.47
COMMON SHARES
Basic Shares Outstanding 85.65M shares 89.38M shares
Diluted Shares Outstanding 85.75M shares 89.74M shares

Balance Sheet

Concept 2018 Q1 2017 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments
YoY Change
Cash & Equivalents $256.8M $266.4M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets
YoY Change
LONG-TERM ASSETS
Property, Plant & Equipment $265.4M $271.7M
YoY Change -2.33% -9.16%
Goodwill $301.4M $291.5M
YoY Change 3.38% 0.0%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets
YoY Change
TOTAL ASSETS
Total Short-Term Assets
Total Long-Term Assets
Total Assets $15.63B $14.96B
YoY Change 4.49% 1.98%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable
YoY Change
Accrued Expenses $139.0M $123.0M
YoY Change 13.01% -23.6%
Deferred Revenue
YoY Change
Short-Term Debt
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $139.0M $123.0M
YoY Change 13.01% -23.6%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $41.00M $42.00M
YoY Change -2.38% 75.0%
Total Long-Term Liabilities $41.00M $42.00M
YoY Change -2.38% 75.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $139.0M $123.0M
Total Long-Term Liabilities $41.00M $42.00M
Total Liabilities $13.64B $12.95B
YoY Change 5.4% 1.87%
SHAREHOLDERS EQUITY
Retained Earnings $1.115B $979.2M
YoY Change 13.89% 11.04%
Common Stock $1.800B $1.793B
YoY Change 0.35% 0.44%
Preferred Stock
YoY Change
Treasury Stock (at cost) $935.0M $760.1M
YoY Change 23.02% 9.16%
Treasury Stock Shares 50.58M shares 45.39M shares
Shareholders Equity $1.989B $2.015B
YoY Change
Total Liabilities & Shareholders Equity $15.63B $14.96B
YoY Change 4.49% 1.98%

Cashflow Statement

Concept 2018 Q1 2017 Q1
OPERATING ACTIVITIES
Net Income $49.27M $42.07M
YoY Change 17.12% 0.83%
Depreciation, Depletion And Amortization $11.50M $6.700M
YoY Change 71.64% -18.29%
Cash From Operating Activities $62.10M $42.10M
YoY Change 47.51% -37.54%
INVESTING ACTIVITIES
Capital Expenditures -$6.300M -$2.700M
YoY Change 133.33% -84.12%
Acquisitions
YoY Change
Other Investing Activities -$102.5M -$210.4M
YoY Change -51.28% -1141.58%
Cash From Investing Activities -$108.8M -$213.1M
YoY Change -48.94% -6974.19%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -6.100M 38.40M
YoY Change -115.89% -138.21%
NET CHANGE
Cash From Operating Activities 62.10M 42.10M
Cash From Investing Activities -108.8M -213.1M
Cash From Financing Activities -6.100M 38.40M
Net Change In Cash -52.80M -132.6M
YoY Change -60.18% 342.0%
FREE CASH FLOW
Cash From Operating Activities $62.10M $42.10M
Capital Expenditures -$6.300M -$2.700M
Free Cash Flow $68.40M $44.80M
YoY Change 52.68% -46.92%

Facts In Submission

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CY2018Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
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us-gaap Weighted Average Number Of Diluted Shares Outstanding
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89382416 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
89346294 shares
CY2018Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
85647494 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
86299885 shares
wfsl Adjustmentsto Additional Paidin Capital Warrants Exercised
AdjustmentstoAdditionalPaidinCapitalWarrantsExercised
0 USD
wfsl Adjustmentsto Additional Paidin Capital Warrants Exercised
AdjustmentstoAdditionalPaidinCapitalWarrantsExercised
0 USD
CY2017Q3 wfsl Available For Sale Securities Yield
AvailableForSaleSecuritiesYield
0.0286
CY2018Q1 wfsl Available For Sale Securities Yield
AvailableForSaleSecuritiesYield
0.0318
CY2017Q3 wfsl Covered Assets
CoveredAssets
67914000 USD
CY2018Q1 wfsl Covered Assets
CoveredAssets
54626000 USD
CY2017Q3 wfsl Fdic Clawback Liability
FDICClawbackLiability
37143000 USD
CY2018Q1 wfsl Fdic Clawback Liability
FDICClawbackLiability
39906000 USD
CY2017Q1 wfsl Financing Receivable Allowance For Credit Losses Charge Offs Net Of Recoveries
FinancingReceivableAllowanceForCreditLossesChargeOffsNetOfRecoveries
-5216000 USD
wfsl Financing Receivable Allowance For Credit Losses Charge Offs Net Of Recoveries
FinancingReceivableAllowanceForCreditLossesChargeOffsNetOfRecoveries
-10512000 USD
CY2018Q1 wfsl Financing Receivable Allowance For Credit Losses Charge Offs Net Of Recoveries
FinancingReceivableAllowanceForCreditLossesChargeOffsNetOfRecoveries
-1371000 USD
wfsl Financing Receivable Allowance For Credit Losses Charge Offs Net Of Recoveries
FinancingReceivableAllowanceForCreditLossesChargeOffsNetOfRecoveries
-4453000 USD
CY2017Q1 wfsl Financing Receivable Allowance For Credit Losses Provision And Transfers
FinancingReceivableAllowanceForCreditLossesProvisionAndTransfers
-1750000 USD
wfsl Financing Receivable Allowance For Credit Losses Provision And Transfers
FinancingReceivableAllowanceForCreditLossesProvisionAndTransfers
-2084000 USD
CY2018Q1 wfsl Financing Receivable Allowance For Credit Losses Provision And Transfers
FinancingReceivableAllowanceForCreditLossesProvisionAndTransfers
-950000 USD
wfsl Financing Receivable Allowance For Credit Losses Provision And Transfers
FinancingReceivableAllowanceForCreditLossesProvisionAndTransfers
50000 USD
CY2017Q1 wfsl Financing Receivable Modifications Number Of Contracts That Subsequently Defaulted
FinancingReceivableModificationsNumberOfContractsThatSubsequentlyDefaulted
7 contract
wfsl Financing Receivable Modifications Number Of Contracts That Subsequently Defaulted
FinancingReceivableModificationsNumberOfContractsThatSubsequentlyDefaulted
15 contract
CY2018Q1 wfsl Financing Receivable Modifications Number Of Contracts That Subsequently Defaulted
FinancingReceivableModificationsNumberOfContractsThatSubsequentlyDefaulted
1 contract
wfsl Financing Receivable Modifications Number Of Contracts That Subsequently Defaulted
FinancingReceivableModificationsNumberOfContractsThatSubsequentlyDefaulted
2 contract
CY2017Q1 wfsl Financing Receivable Modifications Recorded Investment During Period
FinancingReceivableModificationsRecordedInvestmentDuringPeriod
1192000 USD
wfsl Financing Receivable Modifications Recorded Investment During Period
FinancingReceivableModificationsRecordedInvestmentDuringPeriod
3452000 USD
CY2018Q1 wfsl Financing Receivable Modifications Recorded Investment During Period
FinancingReceivableModificationsRecordedInvestmentDuringPeriod
162000 USD
wfsl Financing Receivable Modifications Recorded Investment During Period
FinancingReceivableModificationsRecordedInvestmentDuringPeriod
206000 USD
CY2017Q3 wfsl Financing Receivable Ratioof Total Past Due Loansto Total Loans Receivable Netof Charge Offsand Loansin Process Current
FinancingReceivableRatioofTotalPastDueLoanstoTotalLoansReceivableNetofChargeOffsandLoansinProcessCurrent
0.9960
CY2018Q1 wfsl Financing Receivable Ratioof Total Past Due Loansto Total Loans Receivable Netof Charge Offsand Loansin Process Current
FinancingReceivableRatioofTotalPastDueLoanstoTotalLoansReceivableNetofChargeOffsandLoansinProcessCurrent
0.9960
CY2017Q3 wfsl Financing Receivable Ratioof Total Past Due Loansto Total Loans Receivable Netof Charge Offsand Loansin Process Past Due
FinancingReceivableRatioofTotalPastDueLoanstoTotalLoansReceivableNetofChargeOffsandLoansinProcessPastDue
0.0040
CY2018Q1 wfsl Financing Receivable Ratioof Total Past Due Loansto Total Loans Receivable Netof Charge Offsand Loansin Process Past Due
FinancingReceivableRatioofTotalPastDueLoanstoTotalLoansReceivableNetofChargeOffsandLoansinProcessPastDue
0.0040
wfsl Financing Receivables Percentof Troubled Debt Restructuring Classifiedas Performing
FinancingReceivablesPercentofTroubledDebtRestructuringClassifiedasPerforming
0.977
wfsl Gain Losson Settlementof Bank Owned Life Insurance
GainLossonSettlementofBankOwnedLifeInsurance
649000 USD
wfsl Gain Losson Settlementof Bank Owned Life Insurance
GainLossonSettlementofBankOwnedLifeInsurance
2416000 USD
CY2017Q3 wfsl Goodwill And Intangible Assets Net
GoodwillAndIntangibleAssetsNet
298682000 USD
CY2018Q1 wfsl Goodwill And Intangible Assets Net
GoodwillAndIntangibleAssetsNet
312303000 USD
CY2017Q3 wfsl Gross Unrealized Gains On Investments
GrossUnrealizedGainsOnInvestments
20972000 USD
CY2018Q1 wfsl Gross Unrealized Gains On Investments
GrossUnrealizedGainsOnInvestments
8534000 USD
CY2017Q3 wfsl Gross Unrealized Losses On Investments
GrossUnrealizedLossesOnInvestments
22293000 USD
CY2018Q1 wfsl Gross Unrealized Losses On Investments
GrossUnrealizedLossesOnInvestments
61122000 USD
CY2017Q3 wfsl Held To Maturity Securities Yield
HeldToMaturitySecuritiesYield
0.0314
CY2018Q1 wfsl Held To Maturity Securities Yield
HeldToMaturitySecuritiesYield
0.0316
wfsl Increase Decrease In Fdic Indemnification Asset
IncreaseDecreaseInFdicIndemnificationAsset
264000 USD
wfsl Increase Decrease In Fdic Indemnification Asset
IncreaseDecreaseInFdicIndemnificationAsset
1595000 USD
CY2017Q1 wfsl Investment Income And Other
InvestmentIncomeAndOther
3938000 USD
wfsl Investment Income And Other
InvestmentIncomeAndOther
9078000 USD
CY2018Q1 wfsl Investment Income And Other
InvestmentIncomeAndOther
4883000 USD
wfsl Investment Income And Other
InvestmentIncomeAndOther
9253000 USD
wfsl Loan Modification Basis Point Reduction Maximum
LoanModificationBasisPointReductionMaximum
0.02
wfsl Loan Modification Basis Point Reduction Minimum
LoanModificationBasisPointReductionMinimum
0.01
CY2017Q3 wfsl Loans And Leases Receivable Charges To Allowance Loans In Process And Deferred Fees
LoansAndLeasesReceivableChargesToAllowanceLoansInProcessAndDeferredFees
1318765000 USD
CY2018Q1 wfsl Loans And Leases Receivable Charges To Allowance Loans In Process And Deferred Fees
LoansAndLeasesReceivableChargesToAllowanceLoansInProcessAndDeferredFees
1316166000 USD
CY2017Q3 wfsl Loans And Leases Receivable Ratio Of Loan Type To All Loans
LoansAndLeasesReceivableRatioOfLoanTypeToAllLoans
1
CY2018Q1 wfsl Loans And Leases Receivable Ratio Of Loan Type To All Loans
LoansAndLeasesReceivableRatioOfLoanTypeToAllLoans
1
CY2017Q3 wfsl Loans And Leases Receivable Ratio Of Total Past Due Loans To Total Loans Receivable Net Of Charge Offs And Loans In Process
LoansAndLeasesReceivableRatioOfTotalPastDueLoansToTotalLoansReceivableNetOfChargeOffsAndLoansInProcess
0.0040
CY2018Q1 wfsl Loans And Leases Receivable Ratio Of Total Past Due Loans To Total Loans Receivable Net Of Charge Offs And Loans In Process
LoansAndLeasesReceivableRatioOfTotalPastDueLoansToTotalLoansReceivableNetOfChargeOffsAndLoansInProcess
0.0040
wfsl Loans Originated Net Of Principal Collections
LoansOriginatedNetOfPrincipalCollections
-477029000 USD
wfsl Loans Originated Net Of Principal Collections
LoansOriginatedNetOfPrincipalCollections
-199526000 USD
CY2017Q3 wfsl Loans Receivable Netof Charge Offsand Loansin Process
LoansReceivableNetofChargeOffsandLoansinProcess
11051453000 USD
CY2018Q1 wfsl Loans Receivable Netof Charge Offsand Loansin Process
LoansReceivableNetofChargeOffsandLoansinProcess
11399236000 USD
CY2018Q1 wfsl Loansand Leases Receivable Allowancefor Credit Lossesand Reservefor Unfunded Commitments
LoansandLeasesReceivableAllowanceforCreditLossesandReserveforUnfundedCommitments
134326000 USD
CY2018Q1 wfsl Loansand Leases Receivable Allowancefor Credit Lossesand Reservefor Unfunded Commitments Percentof Gross Loans
LoansandLeasesReceivableAllowanceforCreditLossesandReserveforUnfundedCommitmentsPercentofGrossLoans
0.0107
wfsl Loansand Leases Receivable Impaired Nonperforming Nonaccrual Interest Income Recognized
LoansandLeasesReceivableImpairedNonperformingNonaccrualInterestIncomeRecognized
3228000 USD
CY2017Q3 wfsl Loansand Leases Receivable Nonperforming Nonaccrualof Interest Percentof Total Loans
LoansandLeasesReceivableNonperformingNonaccrualofInterestPercentofTotalLoans
0.0046
CY2018Q1 wfsl Loansand Leases Receivable Nonperforming Nonaccrualof Interest Percentof Total Loans
LoansandLeasesReceivableNonperformingNonaccrualofInterestPercentofTotalLoans
0.0048
wfsl Non Covered Real Estate Acquired Through Foreclosure
NonCoveredRealEstateAcquiredThroughForeclosure
2134000 USD
wfsl Non Covered Real Estate Acquired Through Foreclosure
NonCoveredRealEstateAcquiredThroughForeclosure
1329000 USD
wfsl Other Comprehensive Income Loss Including Cumulative Effect Adjustment Netof Tax
OtherComprehensiveIncomeLossIncludingCumulativeEffectAdjustmentNetofTax
3884000 USD
wfsl Premises And Equipment Purchased And Reo Improvements
PremisesAndEquipmentPurchasedAndReoImprovements
4872000 USD
wfsl Premises And Equipment Purchased And Reo Improvements
PremisesAndEquipmentPurchasedAndReoImprovements
12819000 USD
CY2017Q1 wfsl Product Delivery Expense
ProductDeliveryExpense
3489000 USD
wfsl Product Delivery Expense
ProductDeliveryExpense
6850000 USD
CY2018Q1 wfsl Product Delivery Expense
ProductDeliveryExpense
3665000 USD
wfsl Product Delivery Expense
ProductDeliveryExpense
7621000 USD
CY2017Q3 wfsl Savings And Demand Accounts And Repurchase Agreements With Customers
SavingsAndDemandAccountsAndRepurchaseAgreementsWithCustomers
10835008000 USD
CY2018Q1 wfsl Savings And Demand Accounts And Repurchase Agreements With Customers
SavingsAndDemandAccountsAndRepurchaseAgreementsWithCustomers
11138856000 USD
CY2018Q1 wfsl Single Family Residential Loans As Percentage Of Restructured Loans
SingleFamilyResidentialLoansAsPercentageOfRestructuredLoans
0.855
wfsl Term Of Contractual Due Dates Of Substantially All Mortgage Backed Securities
TermOfContractualDueDatesOfSubstantiallyAllMortgageBackedSecurities
P10Y
CY2017Q3 wfsl Transaction Deposits
TransactionDeposits
6361158000 USD
CY2018Q1 wfsl Transaction Deposits
TransactionDeposits
6463301000 USD
CY2017Q3 wfsl Yield
Yield
0.0302
CY2018Q1 wfsl Yield
Yield
0.0317
us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">New Accounting Pronouncements</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2018, the </font><font style="font-family:inherit;font-size:10pt;color:#333333;">Financial Accounting Standards Board ("FASB")</font><font style="font-family:inherit;font-size:10pt;"> issued </font><font style="font-family:inherit;font-size:10pt;color:#333333;">Accounting Standards Update ("ASU")</font><font style="font-family:inherit;font-size:10pt;"> 2018-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Income Statement - Reporting Comprehensive Income (Topic 220):</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</font><font style="font-family:inherit;font-size:10pt;">. The ASU was issued to address certain stranded tax effects in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act of 2017. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods, therein, and early adoption is permitted. During the quarter ended March 31, 2018, the Company adopted the ASU and made a reclassification adjustment of </font><font style="font-family:inherit;font-size:10pt;">$1,772,000</font><font style="font-family:inherit;font-size:10pt;"> to increase accumulated other comprehensive income and decrease retained earnings on the Consolidated Statements of Changes in Stockholders' Equity.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2017, the </font><font style="font-family:inherit;font-size:10pt;color:#333333;">FASB </font><font style="font-family:inherit;font-size:10pt;">issued </font><font style="font-family:inherit;font-size:10pt;color:#333333;">ASU </font><font style="font-family:inherit;font-size:10pt;">2017-12, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.</font><font style="font-family:inherit;font-size:10pt;"> The ASU expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#333333;">In March 2017, the FASB issued ASU 2017-08, </font><font style="font-family:inherit;font-size:10pt;color:#333333;font-style:italic;">Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. </font><font style="font-family:inherit;font-size:10pt;color:#333333;">The ASU shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. </font><font style="font-family:inherit;font-size:10pt;">The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements</font><font style="font-family:inherit;font-size:10pt;color:#333333;">.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#333333;">In February 2017, the FASB issued ASU 2017-05, </font><font style="font-family:inherit;font-size:10pt;color:#333333;font-style:italic;">Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. </font><font style="font-family:inherit;font-size:10pt;color:#333333;">The ASU clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610-20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The ASU is effective for public business entities for annual periods beginning after December 15, 2017, and interim periods therein. Entities may use either a full or modified approach to adopt the ASU. </font><font style="font-family:inherit;font-size:10pt;">The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued ASU 2017-04, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment</font><font style="font-family:inherit;font-size:10pt;">, which eliminates Step 2 from the goodwill impairment test. The ASU also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The ASU is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption being permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017. During the quarter ended March 31, 2018, the Company adopted the ASU and there was no impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2017, the FASB issued ASU 2017-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business Combinations Clarifying the Definition of a Business (Topic 805)</font><font style="font-family:inherit;font-size:10pt;">, for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted for transactions that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The ASU must be applied prospectively and upon adoption the standard will impact how we assess acquisitions (or disposals) of assets or businesses. During the quarter ended March 31, 2018, the Company adopted the ASU and there was no impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In November 2016, the FASB issued ASU 2016-18, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Statement of Cash Flows (Topic 230): Restricted Cash: a Consensus of the FASB Emerging Issues Task Force</font><font style="font-family:inherit;font-size:10pt;">. This ASU requires a company&#8217;s cash flow statement to explain the changes during a reporting period of the totals for cash, cash equivalents, restricted cash, and restricted cash equivalents. Additionally, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents if the cash flow statement includes a reconciliation of the total cash balances for a reporting period. This ASU is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2016, the FASB issued ASU 2016-15, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Classification of Certain Cash Receipts and Cash Payments.</font><font style="font-family:inherit;font-size:10pt;"> The amendments in this ASU address eight specific cash flow issues with the objective of reducing diversity in practice. The specific issues identified include: debt prepayments or extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period; however, early adoption is permitted. The Company is currently evaluating the guidance to determine its adoption method and does not expect this guidance to have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued ASU 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Financial Instruments - Credit Losses</font><font style="font-family:inherit;font-size:10pt;">. The amendments in this ASU were issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investments in leases and other commitments to extend credit held by a reporting entity at each reporting date. The amendments require that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The ASU eliminates the current framework of recognizing probable incurred losses and instead requires an entity to use its current estimate of all expected credit losses over the contractual life. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For purchased financial assets with a more-than-insignificant amount of credit deterioration since origination (&#8220;PCD assets&#8221;) that are measured at amortized cost, an allowance for expected credit losses is recorded as an adjustment to the cost basis of the asset. Subsequent changes in estimated cash flows would be recorded as an adjustment to the allowance and through the statement of income.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security's cost basis. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For most debt securities, the transition approach requires a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period the guidance is effective. For other-than-temporarily impaired debt securities and PCD assets, the guidance will be applied prospectively. While the Company is currently in the process of evaluating the impact of the amended guidance on its consolidated financial statements, it currently expects the ALLL to increase upon adoption given that the allowance will be required to cover the full remaining expected life of the portfolio upon adoption, rather than the incurred loss model under current U.S. GAAP. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the Company&#8217;s loan and lease portfolio at the time of adoption. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued ASU 2016-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases</font><font style="font-family:inherit;font-size:10pt;">. The amendments require lessees to recognize a lease liability, which is a lessee's obligation to make lease payments arising from a lease, and a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The guidance also simplifies the accounting for sale and leaseback transactions. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently in the process of accumulating the lease data necessary to apply the amended guidance. The Company is continuing to evaluate the impact of the amended guidance on its consolidated financial statements, but the effects of recognizing most operating leases is not expected to be material. The Company expects to recognize right-of-use assets and lease liabilities for substantially all of its operating lease commitments based on the present value of unpaid lease payments as of the date of adoption. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2016, the FASB issued ASU 2016-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Recognition and Measurement of Financial Assets and Financial Liabilities</font><font style="font-family:inherit;font-size:10pt;">, to require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this ASU also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company does not expect this guidance to have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU 2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers (Topic 606)</font><font style="font-family:inherit;font-size:10pt;">. The guidance in this update supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the codification. For public companies, this update was to be effective for interim and annual periods beginning after December 15, 2016. However, in August 2015, the FASB issued ASU 2015-14, which delayed the effective date of ASU 2014-09 by one year and permits companies to voluntarily adopt the new standard as of the original effective date. The Company does not expect this guidance to have a material impact on its consolidated financial statements.</font></div></div>

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