American National Bankshares Inc. Reports Third Quarter 2015 Earnings
/EINPresswire.com/ -- DANVILLE, VA -- (Marketwired) -- 10/22/15 -- American National Bankshares Inc. (NASDAQ: AMNB)
- Q3 2015 net income of $4.0 million
- Diluted EPS $0.47 for Q3 2015 compared to $0.40 for Q3 2014
- Net interest margin of 3.64% for Q3 2015
- Average shareholders' equity of $196 million is 12.95% of average assets
American National Bankshares Inc. ("American National") (NASDAQ: AMNB), parent company of American National Bank and Trust Company, today announced net income for the third quarter of 2015 of $4,037,000 compared to $3,168,000 for the third quarter of 2014, an $869,000 or 27.4% increase. Basic and diluted net income per common share was $0.47 for the 2015 quarter compared to $0.40 for the 2014 quarter. Net income for the third quarter of 2015 produced a return on average assets of 1.07%, a return on average equity of 8.25%, and a return on average tangible equity of 11.42%.
Net income for the first nine months of 2015 was $10,432,000 compared to $9,851,000 for the comparable period of 2014, a $581,000 or 5.9% increase. Basic and diluted net income per common share was $1.20 for the 2015 period compared to $1.25 for the 2014 period.
The 2015 nine month period was negatively impacted by nonrecurring, merger related costs associated with the January 2015 acquisition of MainStreet BankShares, Inc. ("MainStreet"). Merger related costs for the 2015 nine month period were $1,948,000.
Financial Performance and Overview
Jeffrey V. Haley, President and Chief Executive Officer, reported, "The third quarter of 2015 and the year to date have been very good for American National.
"At September 30, 2015, American National had $980,984,000 in loans compared to $816,588,000 at September 30, 2014, an increase of $164,396,000 or 20.1%. Of that increase, $106,166,000 or 64.6% relates directly to the MainStreet acquisition.
"We also have had notable growth in our other markets. Organic loan growth over the past year was $58,230,000 or 7.1%. A combination of active business development and gradually improving local market economic conditions are beginning to result in loan growth. However, we did see a slowdown in the third quarter 2015 as loans outstanding fell slightly, $1,921,000 or 0.2%, compared to the end of the second quarter. Even though the current quarter showed no net growth, we were very pleased to see a substantial portion of new loan production in the form of credits that will fund over time, so their benefit will manifest over the next several quarters.
"On the liability side of the balance sheet, at September 30, 2015, American National had $1,226,521,000 in deposits compared to $1,051,060,000 at September 30, 2014, an increase of $175,461,000 or 16.7%. Of that increase, $121,995,000 or 69.5% is related directly to the MainStreet acquisition. The deposit growth was strong in all categories, but most notably in non-maturity (core) deposits. We are continuously working to grow core deposits and their affiliated relationships, but the challenge in this ongoing low rate environment is to do that in a cost effective and yet competitive manner. Our cost of interest bearing deposits for the third quarter was 0.52%, compared to 0.55% for the comparable 2014 quarter.
"On the earnings side, our net income for the third quarter was $4,037,000, up from $3,168,000 in the 2014 quarter, an increase of $869,000 or 27.4%. We had several drivers that impacted the 2015 quarter compared to the 2014 quarter.
"The merger with MainStreet had a significant and positive impact to operating results by adding substantially to earning assets. Net interest income for the quarter is up by $1,601,000 and of that increase 88.1% relates to the MainStreet acquisition.
"Noninterest income was higher in the 2015 quarter by $74,000 or 2.5%. Virtually all categories showed notable improvement, but the increase was reduced by a decrease in securities gains of $309,000 compared to the comparable prior year quarter.
"Noninterest expense was higher in the 2015 quarter by $561,000 or 6.4%. The magnitude of the increase was reduced by an improvement in other real estate expense and a decrease in nonrecurring merger related expenses.
"We are very sensitive to the issue of operational efficiency. During the third quarter we closed two underperforming banking offices, one in the Danville market and one in the Lynchburg market.
"Our efficiency ratio, basically the cost to produce one dollar of revenue, was 61.25 during the current quarter, down from 72.76 for the second quarter, and down from 64.35 for the third quarter of 2014. The second quarter of 2015 was negatively impacted by significant nonrecurring merger expenses."
Haley concluded, "As we review the current quarter and the last nine months, we are pleased with 2015. The successful merger and integration of Franklin Community Bank earlier this year was a major accomplishment and has significantly increased our size and market footprint. We are extremely pleased to see the beginning of significant, though somewhat erratic, organic loan growth. Bar none, this is our favorite leading indicator of improving business and economic conditions.
"American National has a century long legacy of providing high quality banking products and services and an exemplary return to its shareholders. Our goal is to continue that tradition, build and improve on it. We will do this by continuing to provide quality banking products and services, growing our balance sheet, maintaining strong asset quality, and seeking ways to more effectively deploy our capital. Among those ways is our stock repurchase plan, which during the quarter bought approximately 70,000 shares, ongoing consideration of future merger and acquisition opportunities, and a regular review of our dividend policy."
Capital
American National's capital ratios remain strong and exceed all regulatory requirements.
For the quarter ended September 30, 2015, average shareholders' equity was 12.95% of average assets, compared to 13.18% for the quarter ended September 30, 2014.
Book value per common share was $22.81 at September 30, 2015, compared to $22.08 at September 30, 2014.
Tangible book value per common share was $17.32 at September 30, 2015, compared to $16.81 at September 30, 2014.
Credit Quality Measurements
Non-performing assets ($5,360,000 of non-performing loans and $1,333,000 of other real estate owned) represented 0.44% of total assets at September 30, 2015, compared to 0.52% at September 30, 2014.
Annualized net charge offs to average loans was seven basis points (0.07%) for the 2015 third quarter, equal to that for the same quarter in 2014.
The allowance for loan losses as a percentage of total loans was 1.29% at September 30, 2015 compared to 1.55% at September 30, 2014. The largest driver of this decrease was the merger with MainStreet, whose loans have been marked to fair value at the merger date and whose related allowance for loan loss was eliminated in the valuation process.
Other real estate owned was $1,333,000 at September 30, 2015, compared to $2,364,000 at September 30, 2014, a decrease of $1,031,000 or 43.6%.
Merger related financial impact
The fair value adjustments related to our two recent mergers have had and continue to have a favorable impact on net interest income and income before income tax for American National. The adjustments are summarized below (dollars in thousands):
MainStreet September 30, 2015
------------------------
For the For the
three months nine months
ended ended
------------ -----------
Net Interest Income $ 78 $ 1,097
Income Before Income Taxes $ 4 $ 876
MidCarolina September 30, 2015 September 30, 2014
------------------------ ------------------------
For the For the For the For the
three months nine months three months nine months
ended ended ended ended
------------ ----------- ------------ -----------
Net Interest Income $ 471 $ 1,409 $ 564 $ 2,064
Income Before Income Taxes $ 244 $ 729 $ 337 $ 1,366
The MainStreet merger was effective January 1, 2015; therefore, no comparative 2014 information is presented.
The fair value impact of the MainStreet merger was affected during the third quarter by a change in accounting estimates. The rules for business combinations allow up to a year after a merger to refine estimates based on additional relevant information. The impact of this one-time adjustment to operations was a reduction in loan accretion income of $353,000, which was offset by a reduction in goodwill on the balance sheet.
Net Interest Income
Net interest income before provision for loan losses increased to $12,061,000 in the third quarter of 2015 from $10,460,000 in the third quarter of 2014, an increase of $1,601,000 or 15.3%.
For the 2015 quarter, the net interest margin was 3.64% compared to 3.68% for the same quarter in 2014, a decrease of four basis points (0.04%).
Provision for loan losses
Provision expense for the third quarters of 2015 and 2014 was zero.
There was no need for a provision expense in the 2015 quarter, as any potential provision expense was primarily mitigated by a small decline in loan volume during the quarter and improvement in some impaired loan allowance allocations.
Noninterest Income
Noninterest income totaled $3,055,000 in the third quarter of 2015, compared with $2,981,000 in the third quarter of 2014, an increase of $74,000 or 2.5%. Almost all income categories showed large increases, most of which were related to increased transaction volumes resulting from the MainStreet transaction. However, the 2014 quarter included $315,000 in securities gains compared to only $6,000 in the 2015 quarter.
Noninterest Expense
Noninterest expense totaled $9,388,000 in the third quarter of 2015, compared to $8,827,000 in the third quarter of 2014, an increase of $561,000 or 6.4%.
All expense categories were impacted by the MainStreet merger and the integration of Franklin Community Bank into American National's operations.
The increase in noninterest expense was mitigated by a $267,000 improvement in other real estate owned, net, and an $181,000 reduction in nonrecurring merger related expense.
About American National
American National Bankshares Inc. is a multi-state bank holding company with total assets of approximately $1.5 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving southern and central Virginia and north central North Carolina with 25 banking offices and two loan production offices. American National Bank and Trust Company also manages an additional $733 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about the company and the bank is available on the bank's website at www.amnb.com.
Shares of American National are traded on the NASDAQ Global Select Market under the symbol "AMNB."
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws. Certain of the statements involve significant risks and uncertainties. The statements herein are based on certain assumptions and analyses by American National and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies or guidelines; significant changes in the economic scenario; significant changes in regulatory requirements; significant changes in securities markets; and changes regarding acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in American National's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. American National does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
American National Bankshares Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Unaudited
September 30
----------------------------
ASSETS 2015 2014
------------- -------------
Cash and due from banks $ 19,280 $ 22,699
Interest-bearing deposits in other banks 46,637 58,278
Securities available for sale, at fair value 358,306 328,534
Restricted stock, at cost 5,308 4,362
Loans held for sale 2,998 811
Loans 980,984 816,588
Less allowance for loan losses (12,611) (12,620)
------------- -------------
Net Loans 968,373 803,968
------------- -------------
Premises and equipment, net 23,854 23,085
Other real estate owned, net 1,333 2,364
Goodwill 44,333 39,043
Core deposit intangibles, net 2,983 2,271
Bank owned life insurance 17,491 15,044
Accrued interest receivable and other assets 21,541 18,698
------------- -------------
Total assets $ 1,512,437 $ 1,319,157
============= =============
Liabilities
Demand deposits -- noninterest-bearing $ 305,110 $ 244,469
Demand deposits -- interest-bearing 220,562 185,982
Money market deposits 191,534 173,192
Savings deposits 108,992 88,226
Time deposits 400,323 359,191
------------- -------------
Total deposits 1,226,521 1,051,060
Customer repurchase agreements 43,579 51,945
Long-term borrowings 9,952 9,930
Trust preferred capital notes 27,597 27,495
Accrued interest payable and other
liabilities 8,337 5,562
------------- -------------
Total liabilities 1,315,986 1,145,992
------------- -------------
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares
authorized, none outstanding - -
Common stock, $1 par, 20,000,000 shares
authorized, 8,630,329 shares outstanding at
September 30, 2015 and 7,843,454 shares
outstanding at September 30, 2014 8,611 7,843
Capital in excess of par value 75,524 57,087
Retained earnings 109,030 103,515
Accumulated other comprehensive income, net 3,286 4,720
------------- -------------
Total shareholders' equity 196,451 173,165
------------- -------------
Total liabilities and shareholders' equity $ 1,512,437 $ 1,319,157
============= =============
American National Bankshares Inc. and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
Three Months Ended Nine Months Ended
September 30 September 30
----------------------- -----------------------
2015 2014 2015 2014
---------- ----------- ----------- -----------
Interest and Dividend
Income:
Interest and fees on loans $ 11,474 $ 9,864 $ 35,011 $ 29,398
Interest on federal funds
sold 1 - 6 -
Interest and dividends on
securities:
Taxable 1,052 918 3,021 2,850
Tax-exempt 899 966 2,799 3,017
Dividends 91 72 258 221
Other interest income 25 32 123 100
---------- ----------- ----------- -----------
Total interest and
dividend income 13,542 11,852 41,218 35,586
---------- ----------- ----------- -----------
Interest Expense:
Interest on deposits 1,205 1,120 3,583 3,510
Interest on short-term
borrowings 2 4 7 8
Interest on long-term
borrowings 82 82 243 243
Interest on trust
preferred capital notes 192 186 564 555
---------- ----------- ----------- -----------
Total interest expense 1,481 1,392 4,397 4,316
---------- ----------- ----------- -----------
Net Interest Income 12,061 10,460 36,821 31,270
Provision for loan losses - - 700 150
---------- ----------- ----------- -----------
Net Interest Income After
Provision for Loan Losses 12,061 10,460 36,121 31,120
---------- ----------- ----------- -----------
Noninterest Income:
Trust fees 1,006 992 2,963 3,131
Service charges on deposit
accounts 521 441 1,543 1,285
Other fees and commissions 592 479 1,787 1,416
Mortgage banking income 376 342 987 880
Securities gains, net 6 315 553 504
Other 554 412 1,636 1,168
---------- ----------- ----------- -----------
Total noninterest
income 3,055 2,981 9,469 8,384
---------- ----------- ----------- -----------
Noninterest Expense:
Salaries 4,179 3,714 12,634 10,890
Employee benefits 1,029 799 3,215 2,621
Occupancy and equipment 1,094 933 3,290 2,779
FDIC assessment 185 157 565 486
Bank franchise tax 220 216 675 669
Core deposit intangible
amortization 300 227 901 888
Data processing 366 361 1,311 1,054
Software 290 248 850 745
Other real estate owned,
net (126) 141 60 148
Merger related expenses 87 268 1,948 268
Other 1,764 1,763 5,628 5,067
---------- ----------- ----------- -----------
Total noninterest
expense 9,388 8,827 31,077 25,615
---------- ----------- ----------- -----------
Income Before Income Taxes 5,728 4,614 14,513 13,889
Income Taxes 1,691 1,446 4,081 4,038
---------- ----------- ----------- -----------
Net Income $ 4,037 $ 3,168 $ 10,432 $ 9,851
========== =========== =========== ===========
Net Income Per Common Share:
Basic $ 0.47 $ 0.40 $ 1.20 $ 1.25
Diluted $ 0.47 $ 0.40 $ 1.20 $ 1.25
Weighted Average Common
Shares Outstanding:
Basic 8,668,618 7,841,078 8,698,394 7,871,016
Diluted 8,676,571 7,851,735 8,706,870 7,881,441
American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands,
except share,
ratio and
nonfinancial 3rd Qtr 2nd Qtr 3rd Qtr YTD YTD
data, unaudited) 2015 2015 2014 2015 2014
---------- ---------- ---------- ---------- ----------
EARNINGS
Interest income$ 13,542 $ 13,837 $ 11,852 $ 41,218 $ 35,586
Interest
expense 1,481 1,455 1,392 4,397 4,316
Net interest
income 12,061 12,382 10,460 36,821 31,270
Provision for
loan losses - 100 - 700 150
Noninterest
income 3,055 3,258 2,981 9,469 8,384
Noninterest
expense 9,388 11,642 8,827 31,077 25,615
Income taxes 1,691 1,018 1,446 4,081 4,038
Net income 4,037 2,880 3,168 10,432 9,851
PER COMMON SHARE
Net income per
share - basic $ 0.47 $ 0.33 $ 0.40 $ 1.20 $ 1.25
Net income per
share -
diluted 0.47 0.33 0.40 1.20 1.25
Cash dividends
paid 0.23 0.23 0.23 0.69 0.69
Book value per
share (a) 22.81 22.43 22.08 22.81 22.08
Book value per
share -
tangible (a)
(b) 17.32 16.96 16.81 17.32 16.81
Closing market
price 23.45 23.81 22.75 23.45 22.75
FINANCIAL RATIOS
Return on
average assets 1.07% 0.75% 0.97% 0.91% 1.01%
Return on
average equity 8.25 5.86 7.35 7.09 7.66
Return on
average
tangible
equity (c) 11.42 8.26 10.12 9.90 10.72
Average equity
to average
assets 12.95 12.85 13.18 12.90 13.15
Tangible equity
to tangible
assets (b) 10.18 9.98 10.32 10.18 10.32
Net interest
margin,
taxable
equivalent 3.64 3.69 3.68 3.69 3.69
Efficiency
ratio (d) 61.25 72.76 64.35 66.00 63.01
Effective tax
rate 29.52 26.12 31.34 28.12 29.07
PERIOD-END
BALANCES
Securities $ 363,614 $ 361,176 $ 333,063 $ 363,614 $ 333,063
Loans held for
sale 2,998 2,720 811 2,998 811
Loans, net of
unearned
income 980,984 982,905 816,588 980,984 816,588
Goodwill and
other
intangibles 47,316 47,493 41,314 47,316 41,314
Assets 1,512,437 1,524,356 1,319,157 1,512,437 1,319,157
Assets -
tangible (b) 1,465,121 1,476,863 1,277,843 1,465,121 1,277,843
Deposits 1,226,521 1,234,018 1,051,060 1,226,521 1,051,060
Customer
repurchase
agreements 43,579 50,123 51,945 43,579 51,945
Other short-
term
borrowings - - - - -
Long-term
borrowings 37,549 37,518 37,425 37,549 37,425
Shareholders'
equity 196,451 194,883 173,165 196,451 173,165
Shareholders'
equity -
tangible (b) 149,135 147,390 131,851 149,135 131,851
AVERAGE BALANCES
Securities $ 357,427 $ 349,813 $ 329,455 $ 350,831 $ 340,720
Loans held for
sale 2,873 2,836 1,998 2,223 1,905
Loans, net of
unearned
income 982,212 972,083 815,564 969,826 799,114
Interest-
earning assets 1,380,576 1,397,448 1,192,761 1,386,714 1,187,763
Goodwill and
other
intangibles 47,446 47,682 41,455 47,703 41,754
Assets 1,511,464 1,530,867 1,309,120 1,520,235 1,303,788
Assets -
tangible (b) 1,464,018 1,483,185 1,267,665 1,472,532 1,262,034
Interest-
bearing
deposits 923,840 945,931 806,267 935,893 818,858
Deposits 1,223,328 1,236,626 1,044,913 1,227,005 1,046,644
Customer
repurchase
agreements 45,444 51,417 45,725 49,985 41,443
Long-term
borrowings 37,531 37,499 37,406 37,500 37,385
Shareholders'
equity 195,660 196,663 172,493 196,135 171,450
Shareholders'
equity -
tangible (b) 148,214 148,981 131,038 148,432 129,696
American National Bankshares Inc. and Subsidiaries
Financial Highlights
(In thousands,
except share,
ratio and
nonfinancial 3rd Qtr 2nd Qtr 3rd Qtr YTD YTD
data, unaudited) 2015 2015 2014 2015 2014
---------- ---------- ---------- ---------- ----------
CAPITAL
Weighted
average shares
outstanding -
basic 8,668,618 8,707,504 7,841,078 8,698,394 7,871,016
Weighted
average shares
outstanding -
diluted 8,676,571 8,715,934 7,851,735 8,706,870 7,881,441
ALLOWANCE FOR
LOAN LOSSES
Beginning
balance $ 12,793 $ 12,844 $ 12,763 $ 12,427 $ 12,600
Provision for
loan losses - 100 - 700 150
Charge-offs (253) (321) (230) (883) (398)
Recoveries 71 170 87 367 268
---------- ---------- ---------- ---------- ----------
Ending balance $ 12,611 $ 12,793 $ 12,620 $ 12,611 $ 12,620
LOANS
Construction
and land
development $ 68,692 $ 66,543 $ 47,060 $ 68,692 $ 47,060
Commercial real
estate 424,404 432,315 371,743 424,404 371,743
Residential
real estate 219,415 220,778 175,091 219,415 175,091
Home equity 98,249 97,866 90,952 98,249 90,952
Commercial and
industrial 164,025 159,015 126,437 164,025 126,437
Consumer 6,199 6,388 5,305 6,199 5,305
---------- ---------- ---------- ---------- ----------
Total $ 980,984 $ 982,905 $ 816,588 $ 980,984 $ 816,588
NONPERFORMING
ASSETS AT
PERIOD-END
Nonperforming
loans:
90 days past
due and
accruing $ - $ - $ - $ - $ -
Nonaccrual 5,360 3,772 4,494 5,360 4,494
Other real
estate owned 1,333 2,113 2,364 1,333 2,364
---------- ---------- ---------- ---------- ----------
Nonperforming
assets $ 6,693 $ 5,885 $ 6,858 $ 6,693 $ 6,858
ASSET QUALITY
RATIOS
Allowance for
loan losses to
total loans 1.29% 1.30% 1.55% 1.29% 1.55%
Allowance for
loan losses to
nonperforming
loans 235.28 339.16 280.82 235.28 280.82
Nonperforming
assets to
total assets 0.44 0.39 0.52 0.44 0.52
Nonperforming
loans to total
loans 0.55 0.38 0.55 0.55 0.55
Annualized net
charge-offs
(recoveries)
to average
loans 0.07 0.06 0.07 0.07 0.02
OTHER DATA
Fiduciary
assets at
period-end (e)
(f) $ 486,173 $ 509,289 $ 441,753 $ 486,173 $ 441,753
Retail
brokerage
assets at
period-end (e)
(f) $ 247,258 $ 257,306 $ 201,327 $ 247,258 $ 201,327
Number full-
time
equivalent
employees (g) 310 322 292 310 292
Number of full
service
offices 25 27 24 25 24
Number of loan
production
offices 2 2 2 2 2
Number of ATM's 34 34 30 34 30
Notes:
(a) - Unvested restricted stock of 19,155 shares are not included in the
calculation.
(b) - Excludes goodwill and other intangible assets.
(c) - Excludes amortization expense, net of tax, of intangible assets.
(d) - The efficiency ratio is calculated by dividing noninterest expense
excluding gains or losses on the sale of OREO by net interest income
including tax equivalent income on nontaxable loans and securities and
excluding (i) gains or losses on securities and (ii) gains or losses on sale
of premises and equipment.
(e) - Market value.
(f) - Assets are not owned by the Company and are not reflected in the
consolidated balance sheet.
(g) - Average for quarter.
Net Interest Income Analysis
For the Three Months Ended September 30, 2015 and 2014
(in thousands, except rates)
Interest
Average Balance Income/Expense Yield/Rate
--------------------- ----------------- --------------
2015 2014 2015 2014 2015 2014
---------- ---------- -------- -------- ------ ------
Loans:
Commercial $ 164,551 $ 126,340 $ 1,801 $ 1,339 4.34% 4.20%
Real estate 814,500 686,682 9,557 8,451 4.69 4.92
Consumer 6,034 4,540 150 85 9.86 7.43
---------- ---------- -------- -------- ------ ------
Total loans 985,085 817,562 11,508 9,875 4.67 4.83
---------- ---------- -------- -------- ------ ------
Securities:
Federal agencies &
GSEs 103,303 72,828 431 212 1.67 1.16
Mortgage-backed &
CMOs 57,100 58,365 282 345 1.98 2.36
State and municipal 180,799 183,679 1,650 1,783 3.65 3.88
Other 16,225 14,583 140 114 3.45 3.13
---------- ---------- -------- -------- ------ ------
Total securities 357,427 329,455 2,503 2,454 2.80 2.98
---------- ---------- -------- -------- ------ ------
Federal funds sold 76 - 1 - 5.22 -
Deposits in other
banks 37,988 45,744 25 32 0.26 0.28
---------- ---------- -------- -------- ------ ------
Total interest-
earning assets 1,380,576 1,192,761 14,037 12,361 4.06 4.14
-------- -------- ------ ------
Non-earning assets 130,888 116,359
---------- ----------
Total assets $1,511,464 $1,309,120
========== ==========
Deposits:
Demand $ 221,700 $ 189,208 20 15 0.04 0.03
Money market 191,689 167,777 63 51 0.13 0.12
Savings 109,919 88,456 13 10 0.05 0.04
Time 400,532 360,826 1,109 1,044 1.10 1.15
---------- ---------- -------- -------- ------ ------
Total deposits 923,840 806,267 1,205 1,120 0.52 0.55
Customer repurchase
agreements 45,444 45,725 2 2 0.02 0.02
Other short-term
borrowings 57 2,215 0 2 0.35 0.36
Long-term borrowings 37,531 37,406 274 268 2.92 2.87
---------- ---------- -------- -------- ------ ------
Total interest-
bearing
liabilities 1,006,872 891,613 1,481 1,392 0.58 0.62
-------- -------- ------ ------
Noninterest bearing
demand deposits 299,488 238,646
Other liabilities 9,444 6,368
Shareholders' equity 195,660 172,493
---------- ----------
Total liabilities
and
shareholders'
equity $1,511,464 $1,309,120
========== ==========
Interest rate spread 3.48% 3.52%
====== ======
Net interest margin 3.64% 3.68%
====== ======
Net interest income (taxable
equivalent basis) 12,556 10,969
Less: Taxable
equivalent
adjustment 495 509
-------- --------
Net interest income $ 12,061 $ 10,460
======== ========
Net Interest Income Analysis
For the Nine Months Ended September 30, 2015 and 2014
(in thousands, except rates)
Interest
Average Balance Income/Expense Yield/Rate
--------------------- ----------------- --------------
2015 2014 2015 2014 2015 2014
---------- ---------- -------- -------- ------ ------
Loans:
Commercial $ 153,234 $ 122,441 $ 5,387 $ 4,096 4.70% 4.49%
Real estate 807,875 673,745 29,117 25,072 4.81 4.96
Consumer 10,940 4,833 595 261 7.27 7.25
---------- ---------- -------- -------- ------ ------
Total loans 972,049 801,019 35,099 29,429 4.82 4.90
---------- ---------- -------- -------- ------ ------
Securities:
Federal agencies &
GSEs 88,427 73,506 1,000 617 1.51 1.12
Mortgage-backed &
CMOs 61,434 62,420 994 1,116 2.16 2.38
State and municipal 185,587 189,311 5,133 5,548 3.69 3.91
Other 15,383 15,483 388 362 3.36 3.12
---------- ---------- -------- -------- ------ ------
Total securities 350,831 340,720 7,515 7,643 2.86 2.99
---------- ---------- -------- -------- ------ ------
Federal funds sold 6,992 - 6 - 0.11 -
Deposits in other
banks 56,842 46,024 123 100 0.29 0.29
---------- ---------- -------- -------- ------ ------
Total interest-
earning assets 1,386,714 1,187,763 42,743 37,172 4.11 4.18
-------- -------- ------ ------
Non-earning assets 133,521 116,025
---------- ----------
Total assets $1,520,235 $1,303,788
========== ==========
Deposits:
Demand $ 223,858 $ 181,040 60 56 0.04 0.04
Money market 196,693 177,279 195 176 0.13 0.13
Savings 109,008 88,286 39 35 0.05 0.05
Time 406,334 372,253 3,289 3,243 1.08 1.17
---------- ---------- -------- -------- ------ ------
Total deposits 935,893 818,858 3,583 3,510 0.51 0.58
Customer repurchase
agreements 49,985 41,443 7 5 0.02 0.02
Other short-term
borrowings 19 937 0 3 0.35 0.43
Long-term borrowings 37,500 37,385 807 798 2.87 2.85
---------- ---------- -------- -------- ------ ------
Total interest-
bearing
liabilities 1,023,397 898,623 4,397 4,316 0.57 0.64
-------- -------- ------ ------
Noninterest bearing
demand deposits 291,112 227,786
Other liabilities 9,591 5,929
Shareholders' equity 196,135 171,450
---------- ----------
Total liabilities
and
shareholders'
equity $1,520,235 $1,303,788
========== ==========
Interest rate spread 3.54% 3.54%
====== ======
Net interest margin 3.69% 3.69%
====== ======
Net interest income (taxable
equivalent basis) 38,346 32,856
Less: Taxable
equivalent
adjustment 1,525 1,586
-------- --------
Net interest income $ 36,821 $ 31,270
======== ========
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