CHFC 2018 Annual Report

Item 6. Selected Financial Data. The following table sets forth our selected historical consolidated financial information for the periods and as of the dates indicated. We derived our balance sheet and income statement data for the years ended December 31, 2018, 2017, 2016, 2015 and 2014 fromour auditedConsolidated Financial Statements.You should read this information together withManagement'sDiscussion and Analysis of Financial Condition and Results of Operations and our audited Consolidated Financial Statements and the related notes thereto, which are included elsewhere in this Annual Report. As noted in the following table, we have included certain non- GAAP financial measures, which should be read in conjunction with the section entitled "Non-GAAP Financial Measures" and the accompanying table entitled "Reconciliation of Non-GAAP Operating Results," for reconciliation of non-GAAP measures to the most directly comparable GAAP financial measure. The financial information includes the impact of our merger with Talmer on August 31, 2016, our acquisitions of Lake Michigan on May 31, 2015, Monarch on April 1, 2015 and Northwestern Bancorp, Inc. ("Northwestern") onOctober 31, 2014. See Note 2 to our Consolidated Financial Statements in Item8 and under the subheading "Mergers, Acquisitions and Branch Closings" included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this Annual Report for additional information regarding our acquisitions. Our historical results shown in the following table and elsewhere in this Annual Report are not necessarily indicative of our future performance. As of and for the years ended December 31, (Dollars in thousands, except per share data) 2018 2017 2016 2015 2014 Summary of Operations Interest income $ 775,996 $ 632,135 $ 410,379 $ 291,789 $ 227,261 Interest expense 143,663 74,557 29,298 17,781 14,710 Net interest income 632,333 557,578 381,081 274,008 212,551 Provision for loan losses 30,750 23,300 14,875 6,500 6,100 Net interest income after provision for loan losses 601,583 534,278 366,206 267,508 206,451 Noninterest income 148,536 144,019 122,350 80,216 63,095 Operating expenses, core (non-GAAP) (1)(2) 411,914 384,340 277,284 216,090 173,537 Merger and restructuring expenses — 28,402 61,134 7,804 6,388 Impairment of income tax credits 12,284 9,252 — — — Income before income taxes 325,921 256,303 150,138 123,830 89,621 Income tax expense 41,901 106,780 42,106 37,000 27,500 Net income $ 284,020 $ 149,523 $ 108,032 $ 86,830 $ 62,121 Significant items, net of tax (non-GAAP) (1)(3) — 70,033 35,695 5,484 4,555 Net income, excluding significant items(non-GAAP) (1)(3) $ 284,020 $ 219,556 $ 143,727 $ 92,314 $ 66,676 Per Common Share Data Net Income Basic $ 3.98 $ 2.11 $ 2.21 $ 2.41 $ 1.98 Diluted 3.94 2.08 2.17 2.39 1.97 Diluted, excluding significant items (non-GAAP) (1)(3) 3.94 3.06 2.88 2.54 2.11 Cash dividends declared and paid 1.24 1.10 1.06 1.00 0.94 Book value at end of period 39.69 37.48 36.57 26.62 24.32 Tangible book value per share (non-GAAP) (1) 23.54 21.21 20.20 18.73 18.57 Market value at end of period 36.61 53.47 54.17 34.27 30.64 Common shares outstanding (in thousands) 71,460 71,207 70,599 38,168 32,774 Average diluted common shares (in thousands) 72,025 71,513 49,603 36,353 31,588 (1) Denotes a non-GAAP Financial Measure. Please refer to section entitled " Non-GAAP Financial Measures " included within this Management's Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation to the most directly comparable GAAP financial measure. (2) Excludes merger expenses, restructuring expenses and impairment of income tax credits. (3) For 2017, "significant items" are defined to include the fourth quarter of 2017 charge to income tax expense resulting from the revaluation of our net deferred tax assets completed following the signing of the Tax Cuts and Jobs Act in December 2017, merger expenses, restructuring expenses and fourth quarter of 2017 losses on sales of investment securities as part of our treasury and tax management objectives. For years prior to 2017, "significant items" are defined to include merger expenses and gain on sales of branch offices. 37