EX-99.1 2 d855910dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

January 29, 2020

Press Release

 

  Source:

Farmers National Banc Corp.

    

Kevin J. Helmick, President and CEO

    

20 South Broad Street, P.O. Box 555

    

Canfield, OH 44406

    

330.533.3341

    

Email: exec@farmersbankgroup.com

FARMERS NATIONAL BANC CORP. ANNOUNCES

2019 FOURTH QUARTER FINANCIAL RESULTS

 

  •  

Record net income of $9.7 million for the quarter is 11% higher than same quarter in 2018

 

  •  

148 consecutive quarters of profitability

 

  •  

Annualized return on average assets was 1.58% and annualized return on average equity 12.78% for the quarter ended December 31, 2019

 

  •  

14% noninterest income growth in the fourth quarter of 2019 compared to same quarter in 2018

 

  •  

8.5% growth in customer non-brokered deposits compared to December 31, 2018

 

  •  

Non-performing assets to total assets remain at low levels, 0.26% at December 31, 2019

CANFIELD, Ohio (January 29, 2020) – Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months and year ended December 31, 2019.

Net income for the three months ended December 31, 2019 was $9.7 million, or $0.35 per diluted share, which compares to $8.7 million, or $0.31 per diluted share, for the three months ended December 31, 2018 and $9.2 million or $0.33 per diluted share for the linked quarter. Annualized return on average assets and annualized return on average equity were 1.58% and 12.78%, respectively, for the three month period ending December 31, 2019, compared to 1.50% and 13.65% for the same three month period in 2018, and 1.51% and 12.49% for the linked quarter. Farmers’ return on average tangible equity (non-GAAP) was 15.03% for the quarter ended December 31, 2019 compared to 16.68% for the same quarter in 2018 and 14.80% for the linked quarter.

Net income for the twelve months ended December 31, 2019 was $35.8 million, or $1.28 per diluted share, compared to $32.6 million or $1.16 per diluted share for the same twelve month period in 2018. Return on average assets and return on average equity were 1.50% and 12.56%, respectively, for the twelve months ended December 31, 2019, compared to 1.46% and 13.13% for the same period in 2018.

On January 7, 2020, Farmers announced it completed the merger of Maple Leaf Financial (“Maple Leaf”), the holding company for Geauga Savings Bank, with branches located in Cuyahoga and Geauga Counties in Ohio. The transaction increases Farmers’ market share in Cuyahoga and Geauga Counties and enables Farmers to continue building local scale throughout Northeast Ohio. As of September 30, 2019, Maple Leaf had total assets of $275.6 million, which included gross loans of $183.5 million, deposits of $183.4 million and equity of $33.4 million.

Kevin J. Helmick, President and CEO, stated, “As a result of solid loan and deposit growth over the past twelve months, 14% increase in noninterest income, careful management of our noninterest expenses and continued strong asset quality, we are pleased to report an 11% increase in net income compared to the same quarter one year ago. We are also pleased to report a 25% increase in cash dividends paid to our shareholders, from $0.08 per share paid in the fourth quarter of 2018 to $0.10 paid for the same quarter in 2019.”

2019 Fourth Quarter Financial Highlights

 

  •  

Loan growth

Total loans were $1.81 billion at December 31, 2019, compared to $1.74 billion at December 31, 2018, representing an increase of 4.4%. The increase in loans is a direct result of Farmers’ focus on loan growth utilizing a talented lending and credit team, while adhering to a sound underwriting discipline. The increase in loans has occurred in the agricultural, commercial, commercial real estate, and residential real estate loan portfolios. Loans now comprise 79.5% of the Bank’s average earning assets for the quarter ended December 31, 2019, a slight improvement compared to 79.4% for the same period in 2018. This improvement, along with the growth in earning assets, has resulted in a 6.1% increase in tax equated loan interest income, including fees, in the fourth quarter of 2019 compared to the same quarter in 2018.

 

  •  

Loan quality

Non-performing assets to total assets remain at a low level, currently at 0.26%. Early stage delinquencies also continue to remain at low levels, at $11.9 million, or 0.66% of total loans, at December 31, 2019. Net charge-offs for the current quarter were $374 thousand, compared to $310 thousand in the same quarter in 2018, and total net charge-offs as a percentage of average net loans outstanding is only 0.09% for the quarter ended December 31, 2019.

 

  •  

Net interest margin

The net interest margin for the three months ended December 31, 2019 was 3.84%, a 4 basis points increase from the quarter ended December 31, 2018, and 5 basis points better than the 3.79% reported for the linked quarter. In comparing the fourth quarter of 2019 to the same period in 2018, asset yields increased 7 basis points, while the cost of interest-bearing liabilities increased just 3 basis points. Most of the increase in the asset yields was the result of higher rates earned on loans. The net interest margin is impacted by the additional accretion as a result of the discounted loan portfolios acquired in the previous mergers, which increased the net interest margin by 4 basis points for the quarter ended December 31, 2019 and 5 basis points for the quarter ended December 31, 2018.

 

  •  

Noninterest income

Noninterest income increased 14.1% to $7.6 million for the quarter ended December 31, 2019 compared to $6.7 million in the same quarter in 2018. Gains on the sales of mortgage loans increased $685 thousand or 82%, investment commissions increased $176 thousand or 68%, trust fees increased $139 thousand or 8%, insurance agency commissions grew $54 thousand or 8%, and other operating income increased $91 thousand or 23% in comparing the fourth quarter of 2019 to the same quarter in 2018. These increases were offset by a decrease of securities gains of $232 thousand or 89%.

 

  •  

Noninterest expenses

Farmers has remained committed to managing the level of noninterest expenses. Total noninterest expenses for the fourth quarter of 2019 increased 2.3% to $16.4 million compared to $16.0 million in the same quarter in 2018, primarily as a result of increases in merger related costs of $284 thousand and other operating expenses of $236 thousand, offset by a $316 thousand decrease in salaries and employee benefits and a $155 thousand decrease in FDIC insurance expense. Annualized noninterest expenses measured as a percentage of quarterly average assets decreased from 2.75% in the fourth quarter of 2018 to 2.68% in the fourth quarter of 2019.

 

  •  

Efficiency ratio

The efficiency ratio for the quarter ended December 31, 2019 decreased to 54.51% compared to 57.73% for the same quarter in 2018. The improvement in net interest income and noninterest income in the fourth quarter of 2019 was offset by a slightly higher level of noninterest expenses as explained in the preceding paragraphs.

2020 Outlook

Mr. Helmick added, “With the announcement of the completion of our acquisition of Geauga Savings Bank and our continued strong financial performance during this year, we look forward in 2020 to realize the benefits of the full integration of our new banking locations and to build on our momentum of having achieved another successful year. We remain extremely proud of our committed employees that continue to deliver strong results for our stakeholders and remain committed to our community banking approach and culture.”

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $2.4 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 41 banking locations in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at December 31, 2019 are $2.5 billion. Farmers National Insurance, LLC and Bowers Insurance Agency, Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity and net income excluding costs related to acquisition activities, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements can be found in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2018, which has been filed with the Securities and Exchange Commission (SEC) and is available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp. and Subsidiaries

Consolidated Financial Highlights

(Amounts in thousands, except per share results) Unaudited

 

 

Consolidated Statements of Income    For the Three Months Ended      For the Twelve Months Ended  
     Dec. 31,      Sept. 30,      June 30,      March 31,      Dec. 31,      Dec. 31,      Dec. 31,      Percent  
     2019      2019      2019      2019      2018      2019      2018      Change  

Total interest income

    $ 25,847      $ 25,931      $ 25,529      $ 24,679      $ 24,447      $ 101,986      $ 91,766        11.1 % 

Total interest expense

      4,682        5,174        5,038        4,714        4,373        19,608        13,265        47.8 % 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net interest income

      21,165        20,757        20,491        19,965        20,074        82,378        78,501        4.9 % 

Provision for loan losses

      600        550        750        550        525        2,450        3,000        -18.3 % 

Noninterest income

      7,647        7,441        6,994        6,520        6,705        28,602        25,499        12.2 % 

Acquisition related costs (income)

      104        112        (19 )       0        (180 )       197        (155 )       -227.1 % 

Other expense

      16,247        16,311        16,723        15,977        16,163        65,258        62,872        3.8 % 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Income before income taxes

      11,861        11,225        10,031        9,958        10,271        43,075        38,283        12.5 % 

Income taxes

      2,186        2,071        1,488        1,570        1,585        7,315        5,714        28.0 % 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net income

    $ 9,675      $ 9,154      $ 8,543      $ 8,388      $ 8,686      $ 35,760      $ 32,569        9.8 % 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Average diluted shares outstanding

      27,829         27,819         27,931         27,983         27,962         27,876         27,974  

Basic earnings per share

      0.35       0.33       0.31       0.30       0.31       1.29       1.18  

Diluted earnings per share

      0.35       0.33       0.31       0.30       0.31       1.28       1.16  

Cash dividends

      2,767       2,767       2,504       2,500       2,223       10,538       8,315  

Cash dividends per share

      0.10       0.10       0.09       0.09       0.08       0.38       0.30  

Performance Ratios

               

Net Interest Margin (Annualized)

      3.84 %      3.79 %      3.84 %      3.81 %      3.80 %      3.82 %      3.87 % 

Efficiency Ratio (Tax equivalent basis)

      54.51 %      55.90 %      58.28 %      57.83 %      57.73 %      56.59 %      57.93 % 

Return on Average Assets (Annualized)

      1.58 %      1.51 %      1.45 %      1.45 %      1.50 %      1.50 %      1.46 % 

Return on Average Equity (Annualized)

      12.78 %      12.49 %      12.34 %      12.71 %      13.65 %      12.56 %      13.13 % 

Dividends to Net Income

      28.60 %      30.23 %      29.31 %      29.80 %      25.59 %      29.47 %      25.53 % 

Other Performance Ratios (Non-GAAP)

               

Return on Average Tangible Assets

      1.62 %      1.55 %      1.47 %      1.46 %      1.54 %      1.53 %      1.49 % 

Return on Average Tangible Equity

      15.03 %      14.80 %      14.59 %      14.99 %      16.68 %      14.81 %      16.02 % 

Return on Average Tangible Equity excluding acquisition costs

      15.17 %      14.95 %      14.55 %      14.99 %      16.34 %      14.88 %      15.95 % 

Consolidated Statements of Financial Condition

 

     Dec. 31,      Sept. 30,      June 30,      March 31,      Dec. 31,  
     2019      2019      2019      2019      2018  

Assets

               

Cash and cash equivalents

    $ 70,760      $ 85,675      $ 64,007      $ 69,672      $ 57,926  

Securities available for sale

      432,233        423,193        424,252        403,770        402,190  

Equity securities

      7,909        7,856        7,222        7,460        7,130  

Loans held for sale

      2,600        2,079        1,093        2,360        1,237  

Loans

      1,811,539        1,784,125        1,780,504        1,743,651        1,735,840  

Less allowance for loan losses

      14,487        14,261        14,222        13,777        13,592  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net Loans

      1,797,052        1,769,864        1,766,282        1,729,874        1,722,248  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Other assets

      138,604        144,543        143,093        142,938        138,133  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Assets

    $ 2,449,158      $ 2,433,210      $ 2,405,949      $ 2,356,074      $ 2,328,864  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities and Stockholders’ Equity

               

Deposits

               

Noninterest-bearing

    $ 434,126      $ 432,609      $ 415,935      $ 415,131      $ 421,950  

Interest-bearing

      1,574,838        1,608,043        1,584,700        1,539,202        1,377,770  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total deposits

      2,008,964        2,040,652        2,000,635        1,954,333        1,799,720  

Other interest-bearing liabilities

      122,197        76,324        96,978        109,348        250,792  

Other liabilities

      18,688        23,011        23,511        19,442        16,032  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total liabilities

      2,149,849        2,139,987        2,121,124        2,083,123        2,066,544  

Stockholders’ Equity

      299,309        293,223        284,825        272,951        262,320  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Liabilities and Stockholders’ Equity

    $ 2,449,158      $ 2,433,210      $ 2,405,949      $ 2,356,074      $ 2,328,864  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Period-end shares outstanding

      27,671        27,669        27,768        27,777        27,792  

Book value per share

    $ 10.82      $ 10.60      $ 10.26      $ 9.83      $ 9.44  

Tangible book value per share (Non-GAAP)*

      9.28        9.04        8.70        8.26        7.86  

 

*

Tangible book value per share is calculated by dividing tangible common equity by average outstanding shares

Capital and Liquidity

 

Common Equity Tier 1 Capital Ratio (a)

      12.94 %      12.70 %      12.47 %      12.37 %      12.16 % 

Total Risk Based Capital Ratio (a)

      13.82 %      13.58 %      13.34 %      13.24 %      13.03 % 

Tier 1 Risk Based Capital Ratio (a)

      13.06 %      12.83 %      12.59 %      12.50 %      12.28 % 

Tier 1 Leverage Ratio (a)

      10.69 %      10.42 %      10.27 %      10.07 %      9.91 % 

Equity to Asset Ratio

      12.22 %      12.05 %      11.84 %      11.58 %      11.26 % 

Tangible Common Equity Ratio (b)

      10.67 %      10.47 %      10.22 %      9.92 %      9.56 % 

Net Loans to Assets

      73.37 %      72.74 %      73.41 %      73.42 %      73.95 % 

Loans to Deposits

      90.17 %      87.43 %      89.00 %      89.22 %      96.45 % 

Asset Quality

           

Non-performing loans

    $ 6,345     $ 6,749     $ 7,252     $ 7,578     $ 7,731  

Other Real Estate Owned

      19       74       74       208       0  

Non-performing assets

      6,364       6,823       7,326       7,786       7,731  

Loans 30 - 89 days delinquent

      11,893       9,076       10,203       9,082       8,877  

Charged-off loans

      519       674       588       566       753  

Recoveries

      145       163       283       201       443  

Net Charge-offs

      374       511       305       365       310  

Annualized Net Charge-offs to

           

Average Net Loans Outstanding

      0.09 %      0.12 %      0.07 %      0.08 %      0.07 % 

Allowance for Loan Losses to Total Loans

      0.80 %      0.80 %      0.80 %      0.79 %      0.78 % 

Non-performing Loans to Total Loans

      0.35 %      0.38 %      0.41 %      0.43 %      0.45 % 

Allowance to Non-performing Loans

      228.32 %      211.31 %      196.11 %      181.80 %      175.81 % 

Non-performing Assets to Total Assets

      0.26 %      0.28 %      0.30 %      0.33 %      0.33 % 

 

(a)

December 31, 2019 ratio is estimated

(b)

This is a non-GAAP financial measure. A reconciliation to GAAP is shown below

Reconciliation of Total Assets to Tangible Assets

 

                                        For the Twelve
Months Ended		  
     Dec. 31,      Sept. 30,      June 30,      March 31,      Dec. 31,      Dec. 31,      Dec. 31,  
     2019      2019      2019      2019      2018      2019      2018  

Total Assets

    $ 2,449,158      $ 2,433,210      $ 2,405,949      $ 2,356,074      $ 2,328,864      $ 2,449,158      $ 2,328,864  

Less Goodwill and other intangibles

      42,645        42,973        43,298        43,625        43,952        42,645        43,952  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Tangible Assets

    $ 2,406,513      $ 2,390,237      $ 2,362,651      $ 2,312,449      $ 2,284,912      $ 2,406,513      $ 2,284,912  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Average Assets

      2,424,574        2,409,010        2,369,388        2,338,792        2,301,847        2,383,236        2,230,380  

Less average Goodwill and other intangibles

      42,859        43,187        43,508        43,840        44,185        43,345        44,712  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Average Tangible Assets

    $ 2,381,715      $ 2,365,823      $ 2,325,880      $ 2,294,952      $ 2,257,662      $ 2,339,891      $ 2,185,668  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Reconciliation of Common Stockholders’ Equity to Tangible Common Equity

 

                                        For the Twelve
Months Ended		  
     Dec. 31,      Sept. 30,      June 30,      March 31,      Dec. 31,      Dec. 31,      Dec. 31,  
     2019      2019      2019      2019      2018      2019      2018  

Stockholders’ Equity

    $ 299,309      $ 293,223      $ 284,825      $ 272,951      $ 262,320      $ 299,309      $ 262,320  

Less Goodwill and other intangibles

      42,645        42,973        43,298        43,625        43,952        42,645        43,952  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Tangible Common Equity

    $ 256,664      $ 250,250      $ 241,527      $ 229,326      $ 218,368      $ 256,664      $ 218,368  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Average Stockholders’ Equity

      300,355        290,673        277,746        267,736        252,449        284,759        247,965  

Less average Goodwill and other intangibles

      42,859        43,187        43,508        43,840        44,185        43,345        44,712  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Average Tangible Common Equity

    $ 257,496      $ 247,486      $ 234,238      $ 223,896      $ 208,264      $ 241,414      $ 203,253  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reconciliation of Net Income, Excluding Acquisition Related Costs

 

     For the Three Months Ended      For the Twelve
Months Ended		  
     Dec. 31,      Sept. 30,      June 30,      March 31,      Dec. 31,      Dec. 31,        Dec. 31,  
     2019      2019      2019      2019      2018      2019        2018  

Net income

    $ 9,675      $ 9,154      $ 8,543      $ 8,388      $ 8,686      $ 35,760        $ 32,569  

Acquisition related costs (income) – tax equated

      90        97        (20 )       0        (180 )       167          (158 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

       

 

 

  

Net income – Adjusted

    $   9,765      $   9,251      $   8,523      $   8,388      $   8,506      $   35,927        $   32,411  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

       

 

 

  

Diluted EPS excluding acquisition costs

    $ 0.35      $ 0.33      $ 0.31      $ 0.30      $ 0.30      $ 1.29        $ 1.16  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

       

 

 

  

 

     Dec. 31,      Sept. 30,      June 30,     March 31,      Dec. 31,  
End of Period Loan Balances    2019      2019      2019     2019      2018  

Commercial real estate

    $ 616,778      $ 602,580      $ 614,452     $ 589,219      $ 579,481  

Commercial

      255,823        251,613        256,657       254,957        245,172  

Residential real estate

      500,024        499,996        493,529       488,854        492,887  

Consumer

      209,271        207,319        207,417       209,541        216,284  

Agricultural loans

      226,333        219,487        205,544       198,210        199,013  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total, excluding net deferred loan costs

    $ 1,808,229      $ 1,780,995      $ 1,777,599     $ 1,740,781      $ 1,732,837  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  
     For the Three Months Ended  
     Dec. 31,      Sept. 30,      June 30,     March 31,      Dec. 31,  
Noninterest Income    2019      2019      2019     2019      2018  

Service charges on deposit accounts

    $ 1,139      $ 1,208      $ 1,093     $ 1,074      $ 1,115  

Bank owned life insurance income

      192        204        208       214        221  

Trust fees

      1,891        1,905        1,821       1,858        1,752  

Insurance agency commissions

      696        681        739       803        642  

Security gains (losses)

      28        22        (18 )      10        260  

Retirement plan consulting fees

      343        338        450       358        370  

Investment commissions

      435        384        327       260        259  

Net gains on sale of loans

      1,517        1,143        1,055       671        832  

Debit card and EFT fees

      922        935        887       778        861  

Other operating income

      484        621        432       494        393  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total Noninterest Income

    $ 7,647      $ 7,441      $ 6,994     $ 6,520      $ 6,705  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  
     For the Three Months Ended  
     Dec. 31,      Sept. 30,      June 30,     March 31,      Dec. 31,  
Noninterest Expense    2019      2019      2019     2019      2018  

Salaries and employee benefits

    $ 9,128      $ 9,422      $ 9,266     $ 9,356      $ 9,444  

Occupancy and equipment

      1,667        1,615        1,650       1,717        1,566  

State and local taxes

      416        468        472       470        474  

Professional fees

      787        654        887       794        734  

Merger related costs (income)

      104        112        (19 )      0        (180 ) 

Advertising

      607        437        442       250        416  

FDIC insurance

      79        80        85       87        234  

Intangible amortization

      326        326        327       327        355  

Core processing charges

      876        900        803       791        762  

Telephone and data

      235        236        217       260        288  

Other operating expenses

      2,126        2,173        2,574       1,925        1,890  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total Noninterest Expense

    $ 16,351      $ 16,423      $ 16,704     $ 15,977      $ 15,983  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

 

     Three Months Ended     Three Months Ended  
     December 31, 2019     December 31, 2018  
     AVERAGE                   AVERAGE                
     BALANCE      INTEREST (1)      RATE (1)     BALANCE      INTEREST (1)      RATE (1)  

EARNING ASSETS

                 

Loans (2)

    $ 1,784,421      $ 22,725        5.05 %    $ 1,706,008      $ 21,424        4.98 % 

Taxable securities

      181,894        1,162        2.53       199,472        1,241        2.47  

Tax-exempt securities (2)

      227,259        2,205        3.85       202,241        1,936        3.80  

Equity securities

      12,059        130        4.28       11,822        185        6.21  

Federal funds sold and other

      37,914        170        1.78       29,663        154        2.06  
  

 

 

     

 

 

       

 

 

     

 

 

     

Total earning assets

      2,243,547        26,392        4.67       2,149,206        24,940        4.60  

Nonearning assets

      181,027             152,641        
  

 

 

          

 

 

        

Total assets

    $ 2,424,574           $ 2,301,847        
  

 

 

          

 

 

        

INTEREST-BEARING LIABILITIES

                 

Time deposits

    $ 418,722      $ 2,089        1.98 %    $ 324,696      $ 1,349        1.65 % 

Brokered time deposits

      85,973        446        2.06       272        2        2.35  

Savings deposits

      402,464        320        0.32       438,008        284        0.26  

Demand deposits

      683,143        1,506        0.87       578,470        1,128        0.77  

Short term borrowings

      35,838        99        1.10       264,371        1,562        2.34  

Long term borrowings

      45,203        222        1.95       6,089        48        3.13  
  

 

 

     

 

 

       

 

 

     

 

 

     

Total interest-bearing liabilities

    $ 1,671,343        4,682        1.11     $ 1,611,906        4,373        1.08  
          

 

 

        

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY

                 

Demand deposits

      434,778             423,576        

Other liabilities

      18,098             13,916        

Stockholders’ equity

      300,355             252,449        
  

 

 

          

 

 

        

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $ 2,424,574           $ 2,301,847        
  

 

 

     

 

 

       

 

 

     

 

 

     

Net interest income and interest rate spread

       $ 21,710        3.56 %       $ 20,567        3.52 % 
     

 

 

     

 

 

       

 

 

     

 

 

  

Net interest margin

            3.84 %            3.80 % 
        

 

 

          

 

 

  

 

(1)

Interest and yields are calculated on a tax-equivalent basis where applicable.

(2)

For 2019, adjustments of $99 thousand and $446 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2018, adjustments of $92 thousand and $401 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

     Twelve Months Ended     Twelve Months Ended  
     December 31, 2019     December 31, 2018  
     AVERAGE                   AVERAGE                
     BALANCE      INTEREST (1)      RATE (1)     BALANCE      INTEREST (1)      RATE (1)  

EARNING ASSETS

                 

Loans (2)

    $ 1,757,799      $ 89,517        5.09 %    $ 1,632,541      $ 80,192        4.91 % 

Taxable securities

      190,944        4,840        2.53       202,270        4,928        2.44  

Tax-exempt securities

      216,586        8,418        3.89       194,302        7,195        3.70  

Equity securities (2)

      12,057        627        5.20       11,382        652        5.73  

Federal funds sold and other

      34,948        729        2.09       34,006        644        1.89  
  

 

 

     

 

 

       

 

 

     

 

 

     

Total earning assets

      2,212,334        104,131        4.71       2,074,501        93,611        4.51  

Nonearning assets

      170,902             155,879        

Total assets

    $ 2,383,236           $ 2,230,380        
  

 

 

          

 

 

        

INTEREST-BEARING LIABILITIES

                 

Time deposits

    $ 401,317      $ 7,847        1.96 %    $ 293,725      $ 4,210        1.43 % 

Brokered time deposits

      83,311        1,921        2.31       68        2        2.35  

Savings deposits

      410,672        1,285        0.31       465,283        1,015        0.22  

Demand deposits

      641,461        5,807        0.91       506,099        2,912        0.58  

Short term borrowings

      96,145        2,250        2.34       281,063        4,936        1.76  

Long term borrowings

      23,318        498        2.14       6,491        190        2.93  
  

 

 

     

 

 

       

 

 

     

 

 

     

Total interest-bearing liabilities

    $ 1,656,224        19,608        1.18     $ 1,552,729        13,265        0.85  

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY

                 

Demand deposits

    $ 429,289           $ 415,968        

Other liabilities

      12,964             13,718        

Stockholders’ equity

      284,759             247,965        

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $ 2,383,236           $ 2,230,380        
  

 

 

     

 

 

       

 

 

     

 

 

     

Net interest income and interest rate spread

       $ 84,523        3.53 %       $ 80,346        3.66 % 
     

 

 

     

 

 

       

 

 

     

 

 

  

Net interest margin

            3.82 %            3.87 % 
        

 

 

          

 

 

  

 

(1)

Interest and yields are calculated on a tax-equivalent basis where applicable.

(2)

For 2019, adjustments of $414 thousand and $1.7 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2018, adjustments of $357 thousand and $1.5 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.