000-27205
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56-2132396
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(Commission File
No.)
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(IRS
Employer Identification No.)
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518 West C Street, Newton,
North Carolina
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28658
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Peoples
Bancorp of North Carolina, Inc.
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INDEX
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Page
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Item
2.02 – Results of Operations and Financial
Condition
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3
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Item
9.01 – Financial Statements and Exhibits
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3
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Signatures
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4
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Exhibit
(99)(a) Press Release dated October 23, 2017
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5
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PEOPLES
BANCORP OF NORTH CAROLINA, INC.
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Date:
October 23, 2017
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By:
/s/ A. Joseph Lampron,
Jr.
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A.
Joseph Lampron, Jr.
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Executive
Vice President and Chief Financial Officer
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Contact:
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Lance
A. Sellers
President and Chief Executive Officer
A. Joseph Lampron, Jr.
Executive Vice President and Chief Financial Officer
828-464-5620, Fax 828-465-6780
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September 30, 2017,
December 31, 2016 and September 30, 2016
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(Dollars in
thousands)
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September 30, 2017
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December
31, 2016
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September 30, 2016
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(Unaudited)
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(Audited)
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(Unaudited)
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ASSETS:
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|
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Cash and due from
banks
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$55,718
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$53,613
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$47,653
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Interest-bearing
deposits
|
37,538
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16,481
|
35,191
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Cash and cash
equivalents
|
93,256
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70,094
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82,844
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Investment
securities available for sale
|
235,736
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249,946
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262,423
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Other
investments
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2,680
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2,635
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3,634
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Total
securities
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238,416
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252,581
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266,057
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Mortgage loans held
for sale
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2,623
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5,709
|
2,776
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Loans
|
747,437
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723,811
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713,019
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Less: Allowance for
loan losses
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(6,844)
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(7,550)
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(8,045)
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Net
loans
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740,593
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716,261
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704,974
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Premises and
equipment, net
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19,697
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16,452
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16,553
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Cash surrender
value of life insurance
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15,452
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14,952
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14,853
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Accrued interest
receivable and other assets
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11,516
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11,942
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9,551
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Total
assets
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$1,121,553
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$1,087,991
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$1,097,608
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LIABILITIES
AND SHAREHOLDERS' EQUITY:
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Deposits:
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Noninterest-bearing
demand
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$287,794
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$271,851
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$253,134
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NOW, MMDA &
savings
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486,051
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477,054
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460,767
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Time, $250,000 or
more
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21,318
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26,771
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26,627
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Other
time
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106,476
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117,242
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121,419
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Total
deposits
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901,639
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892,918
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861,947
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Securities sold
under agreements to repurchase
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53,307
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36,434
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50,920
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FHLB
borrowings
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20,000
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20,000
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43,500
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Junior subordinated
debentures
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20,619
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20,619
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20,619
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Accrued interest
payable and other liabilities
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9,835
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10,592
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9,974
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Total
liabilities
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1,005,400
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980,563
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986,960
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Shareholders'
equity:
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Series A preferred
stock, $1,000 stated value; authorized
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5,000,000 shares;
no shares issued and outstanding
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-
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-
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-
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Common stock, no
par value; authorized
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20,000,000 shares;
issued and outstanding
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5,450,412 shares at
9/30/17 and 5,417,800 shares
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at 12/31/16 and
9/30/16
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45,102
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44,187
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44,188
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Retained
earnings
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66,539
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60,254
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59,502
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Accumulated other
comprehensive income
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4,512
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2,987
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6,958
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Total shareholders'
equity
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116,153
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107,428
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110,648
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Total liabilities
and shareholders' equity
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$1,121,553
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$1,087,991
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$1,097,608
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CONSOLIDATED
STATEMENTS OF INCOME
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For the three and
nine months ended September 30, 2017 and 2016
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(Dollars in
thousands, except per share amounts)
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Three
months ended
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Nine months
ended
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September
30,
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September
30,
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2017
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2016
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2017
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2016
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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INTEREST
INCOME:
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Interest and fees
on loans
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$8,966
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$8,188
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$25,935
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$24,185
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Interest on due
from banks
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60
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32
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138
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67
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Interest on
investment securities:
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U.S. Government
sponsored enterprises
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578
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603
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1,795
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1,910
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State and political
subdivisions
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1,047
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1,105
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3,198
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3,350
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Other
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47
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54
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157
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191
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Total interest
income
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10,698
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9,982
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31,223
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29,703
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INTEREST
EXPENSE:
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NOW, MMDA &
savings deposits
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156
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126
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431
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367
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Time
deposits
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112
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142
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|
360
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452
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FHLB
borrowings
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211
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426
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604
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1,248
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Junior subordinated
debentures
|
152
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122
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432
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353
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Other
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19
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12
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43
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30
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Total interest
expense
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650
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828
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1,870
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2,450
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NET
INTEREST INCOME
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10,048
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9,154
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29,353
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27,253
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PROVISION
FOR (REDUCTION OF PROVISION
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FOR)
LOAN LOSSES
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(218)
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(360)
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(405)
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(1,108)
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NET
INTEREST INCOME AFTER
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PROVISION
FOR LOAN LOSSES
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10,266
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9,514
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29,758
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28,361
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NON-INTEREST
INCOME:
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Service
charges
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1,140
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1,163
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3,340
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3,291
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Other service
charges and fees
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145
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210
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447
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746
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Gain on sale of
securities
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-
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-
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-
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324
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Mortgage banking
income
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280
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426
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945
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1,088
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Insurance and
brokerage commissions
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221
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163
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568
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476
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Miscellaneous
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1,718
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1,452
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4,361
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4,384
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Total non-interest
income
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3,504
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3,414
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9,661
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10,309
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NON-INTEREST
EXPENSES:
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Salaries and
employee benefits
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4,933
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4,829
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15,038
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14,114
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Occupancy
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1,669
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1,755
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4,981
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5,243
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Other
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2,749
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3,014
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8,462
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8,841
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Total non-interest
expense
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9,351
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9,598
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28,481
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28,198
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EARNINGS BEFORE
INCOME TAXES
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4,419
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3,330
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10,938
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10,472
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INCOME
TAXES
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1,177
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872
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2,680
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2,597
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NET
EARNINGS
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$3,242
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$2,458
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$8,258
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$7,875
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PER
SHARE AMOUNTS
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Basic net
earnings
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$0.59
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$0.45
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$1.52
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$1.43
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Diluted net
earnings
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$0.58
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$0.44
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$1.49
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$1.42
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Cash
dividends
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$0.12
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$0.10
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$0.36
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$0.28
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Book
value
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$21.31
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$20.42
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$21.31
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$20.42
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FINANCIAL
HIGHLIGHTS
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For the three and
nine months ended September 30, 2017 and 2016
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(Dollars in
thousands)
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Three
months ended
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Nine
months ended
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September
30,
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September
30,
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2017
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2016
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2017
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2016
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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SELECTED
AVERAGE BALANCES:
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Available for sale
securities
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$231,135
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$252,281
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$235,947
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$254,135
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Loans
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746,633
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709,742
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739,857
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698,313
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Earning
assets
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1,000,792
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992,602
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997,139
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975,526
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Assets
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1,101,586
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1,087,155
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1,096,502
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1,064,655
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Deposits
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888,746
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860,629
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892,057
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848,041
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Shareholders'
equity
|
115,512
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112,581
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115,161
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113,207
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SELECTED
KEY DATA:
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Net interest margin
(tax equivalent)
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4.20%
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3.89%
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4.15%
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3.97%
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Return on average
assets
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1.17%
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0.90%
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1.01%
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0.99%
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Return on average
shareholders' equity
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11.14%
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8.68%
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9.59%
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9.29%
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Shareholders'
equity to total assets (period end)
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10.36%
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10.08%
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10.36%
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10.08%
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ALLOWANCE
FOR LOAN LOSSES:
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Balance, beginning
of period
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$7,167
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$8,540
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$7,550
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$9,589
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Provision for loan
losses
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(218)
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(360)
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(405)
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(1,108)
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Charge-offs
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(152)
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(246)
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(481)
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(754)
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Recoveries
|
47
|
111
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180
|
318
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Balance, end of
period
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$6,844
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$8,045
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$6,844
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$8,045
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ASSET
QUALITY:
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Non-accrual
loans
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$4,931
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$4,757
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90 days past due
and still accruing
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-
|
-
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Other real estate
owned
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|
-
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26
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Total
non-performing assets
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$4,931
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$4,783
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Non-performing
assets to total assets
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0.44%
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0.44%
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Allowance for loan
losses to non-performing assets
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138.80%
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168.20%
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Allowance for loan
losses to total loans
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0.92%
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1.13%
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LOAN
RISK GRADE ANALYSIS:
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Percentage
of Loans
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By
Risk Grade
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9/30/2017
|
9/30/2016
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Risk Grade 1
(excellent quality)
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1.16%
|
1.38%
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Risk Grade 2 (high
quality)
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25.61%
|
26.50%
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Risk Grade 3 (good
quality)
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60.40%
|
54.53%
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Risk Grade 4
(management attention)
|
8.61%
|
12.68%
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Risk Grade 5
(watch)
|
2.67%
|
2.74%
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Risk Grade 6
(substandard)
|
1.23%
|
1.86%
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Risk Grade 7
(doubtful)
|
0.00%
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0.00%
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Risk Grade 8
(loss)
|
0.00%
|
0.00%
|