CHFC 2017 Annual Report

As of and for the years ended December 31, (Dollars in thousands, except per share data) 2017 2016 2015 2014 2013 Balance Sheet Data Total assets $19,280,873 $17,355,179 $9,188,797 $7,322,143 $6,184,708 Investment securities 2,640,639 1,858,391 1,063,702 1,065,277 958,475 Total loans 14,155,267 12,990,779 7,271,147 5,688,230 4,647,621 Total deposits 13,642,803 12,873,122 7,456,767 6,078,971 5,122,385 Total liabilities 16,612,124 14,773,653 8,172,823 6,525,010 5,488,208 Total shareholders' equity 2,668,749 2,581,526 1,015,974 797,133 696,500 Tangible shareholders' equity (non-GAAP) (1) 1,510,011 1,425,998 714,901 606,419 571,947 Balance Sheet Averages Total assets $18,465,156 $12,037,155 $8,481,228 $6,473,144 $5,964,592 Total earning assets 16,400,425 10,856,795 7,851,134 6,095,064 5,628,969 Total loans 13,607,683 9,304,573 6,583,846 4,976,563 4,355,152 Total deposits 13,255,366 9,397,562 6,958,667 5,339,422 4,964,082 Total interest-bearing liabilities 12,142,292 7,821,366 5,704,205 4,349,977 4,181,921 Total shareholders' equity 2,627,862 1,546,721 919,328 754,211 626,555 Performance Ratios Net interest margin 3.40% 3.51% 3.49% 3.49% 3.49% Net interest margin(fully taxable equivalent)(Non-GAAP) (1)(2) 3.48% 3.60% 3.58% 3.59% 3.59% Return on average assets 0.81% 0.90% 1.02% 0.96% 0.95% Return on average shareholders' equity 5.7% 7.0% 9.4% 8.2% 9.1% Return on average tangible shareholders' equity (Non- GAAP) (1) 10.2% 11.2% 12.9% 10.4% 11.4% Average shareholders' equity as a percent of average assets 14.2% 12.8% 10.8% 11.7% 10.5% Efficiency ratio (GAAP) 60.1% 67.2% 63.2% 65.3% 64.2% Efficiency ratio adjusted (non-GAAP) (1) 51.9% 54.4% 58.7% 60.9% 62.4% Dividend payout ratio 52.9% 48.8% 41.8% 47.7% 43.5% Consolidated Capital Ratios Shareholders' equity as a percentage of total assets 13.8% 14.9% 11.1% 10.9% 11.3% Tangible shareholders' equity as a percentage of tangible assets (non-GAAP) (1) 8.3% 8.8% 8.0% 8.5% 9.4% Common equity tier 1 capital (3) 10.2% 10.7% 10.6% N/A N/A Tier 1 leverage ratio (3) 8.3% 9.0% 8.6% 9.3% 9.9% Tier 1 risk-based capital ratio (3) 10.2% 10.7% 10.7% 11.1% 12.7% Total risk-based capital ratio (3) 11.0% 11.5% 11.8% 12.4% 14.0% Asset Quality Net loan charge-offs $ 9,681 $ 9,935 $ 8,855 $ 9,489 $ 16,419 Net loan charge-offs as a percentage of average loans 0.07% 0.11% 0.13% 0.19% 0.38% Year end balances: Allowance for loan losses — originated loans $ 91,887 $ 78,268 $ 73,328 $ 75,183 $ 78,572 Allowance for loan losses — acquired loans — — — 500 500 Total nonaccrual loans 63,095 44,334 62,225 50,644 61,897 Total nonperforming assets 71,902 61,521 72,160 64,849 71,673 Year end ratios: Allowance for loan losses as a percentage of total originated loans 0.94% 1.05% 1.26% 1.51% 1.81% Allowance for loan losses as a percentage of nonaccrual loans 145.6% 176.5% 117.8% 148.5% 126.9% Nonaccrual loans as a percentage of total loans 0.45% 0.34% 0.86% 0.89% 1.33% Nonperforming assets as a percentage of total assets 0.37% 0.35% 0.79% 0.89% 1.16% (1) Denotes a non-GAAP Financial Measure. Please refer to section entitled " Non-GAAP Financial Measures " included within "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a reconciliation to the most directly comparable GAAP financial measure. (2) Presented on a tax equivalent basis using a 35% tax rate for all periods presented. (3) The years ended December 31, 2017, 2016 and 2015 are under Basel III transitional and the years ended December 31, 2014 and 2013 are under Basel I. 34