EX-99.3 4 v428905_ex99-3.htm EXHIBIT 99.3

 

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

 

 

 

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS

(In Thousands, Except Per Share Data) (Unaudited)

 

   YEARS ENDED   % 
   DECEMBER 31,   INCREASE 
   2015   2014   (DECREASE) 
EARNINGS PERFORMANCE               
Net Income  $16,471   $17,086    -3.60%
Return on Average Assets   1.32%   1.38%   -4.35%
Return on Average Equity   8.72%   9.21%   -5.32%
                
BALANCE SHEET HIGHLIGHTS               
Total Assets  $1,223,417   $1,241,963    -1.49%
Available-for-Sale Securities   420,290    516,807    -18.68%
Loans (Net)   696,991    623,209    11.84%
Allowance for Loan Losses   7,889    7,336    7.54%
Deposits and Repo Sweep Accounts   940,530    973,526    -3.39%
                
OFF-BALANCE SHEET               
Outstanding Balance of Mortgage Loans Sold with Servicing Retained   152,448    152,505    -0.04%
Trust Assets Under Management   814,788    825,918    -1.35%
                
SHAREHOLDERS' VALUE               
    (PER COMMON SHARE)               
Net Income - Basic  $1.35   $1.38    -2.17%
Net Income - Diluted  $1.35   $1.38    -2.17%
Dividends  $1.04   $1.04    0.00%
Common Book Value  $15.39   $15.34    0.33%
Tangible Common Book Value  $14.41   $14.36    0.35%
Market Value (Last Trade)  $21.00   $20.67    1.60%
Market Value /  Common Book Value   136.45%   134.75%   1.26%
Market Value /  Tangible Common Book Value   145.73%   143.94%   1.24%
Price Earnings Multiple (Annualized)   15.56    14.98    3.87%
Dividend Yield (Annualized)   4.95%   5.03%   -1.59%
Common Shares Outstanding, End of Period   12,180,623    12,279,980    -0.81%
                
SAFETY AND SOUNDNESS               
Tangible Common Equity / Tangible Assets   14.49%   14.34%   1.05%
Nonperforming Assets / Total Assets   1.31%   1.34%   -2.24%
Allowance for Loan Losses / Total Loans   1.12%   1.16%   -3.45%
Total Risk Based Capital Ratio (a)   24.45%   27.60%   -11.41%
Tier 1 Risk Based Capital Ratio (a)   23.40%   26.26%   -10.89%
Common Equity Tier 1 Risk Based Capital Ratio (a)   23.40%          
Leverage Ratio (a)   14.31%   13.89%   3.02%
                
AVERAGE BALANCES               
Average Assets  $1,243,209   $1,239,897    0.27%
Average Equity  $188,905   $185,469    1.85%

 

(a) Capital ratios for the most recent period are estimated. The Common Equity Tier 1 Risk Based Capital Ratio became applicable to the Corporation in the first quarter 2015.

 

 1 

 

 

QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION

(In Thousands) (Unaudited)

 

   For the Three Months Ended:                     
   Dec. 31,   Sept. 30,   June 30,   Mar. 31,   Dec. 31,   Sept. 30,   June 30,   Mar. 31, 
   2015   2015   2015   2015   2014   2014   2014   2014 
Interest income  $11,036   $11,134   $11,186   $11,163   $11,468   $11,572   $11,563   $11,406 
Interest expense   1,087    1,126    1,176    1,213    1,257    1,287    1,290    1,288 
Net interest income   9,949    10,008    10,010    9,950    10,211    10,285    10,273    10,118 
Provision (credit) for loan losses   319    302    221    3    123    218    446    (311)
Net interest income after provision (credit)                                        
  for loan losses   9,630    9,706    9,789    9,947    10,088    10,067    9,827    10,429 
Other income   3,994    3,961    3,962    3,487    3,802    3,887    3,980    3,751 
Net gains on available-for-sale securities   1,776    79    932    74    210    760    103    31 
Loss on prepayment of borrowings   1,663    0    910    0    0    0    0    0 
Other expenses   8,411    8,117    7,964    8,464    8,250    9,036    8,347    8,524 
Income before income tax provision   5,326    5,629    5,809    5,044    5,850    5,678    5,563    5,687 
Income tax provision   1,261    1,395    1,452    1,229    1,482    1,411    1,400    1,399 
Net income  $4,065   $4,234   $4,357   $3,815   $4,368   $4,267   $4,163   $4,288 
Net income per share – basic  $0.33   $0.35   $0.36   $0.31   $0.36   $0.34   $0.33   $0.35 
Net income per share – diluted  $0.33   $0.35   $0.36   $0.31   $0.35   $0.34   $0.33   $0.34 

 

QUARTERLY CONDENSED, CONSOLIDATED BALANCE SHEET INFORMATION

(In Thousands) (Unaudited)

 

   As of:         
   Dec. 31,   Sept. 30,   Dec. 31, 
   2015   2015   2014 
ASSETS               
Cash & Due from Banks  $36,061   $32,221   $36,047 
Available-for-Sale Securities   420,290    461,713    516,807 
Loans Held for Sale   280    76    0 
Loans, Net   696,991    672,449    623,209 
Intangible Assets   11,972    11,978    11,994 
Other Assets   57,823    54,094    53,906 
TOTAL ASSETS  $1,223,417   $1,232,531   $1,241,963 
                
LIABILITIES               
Deposits  $935,615   $961,112   $967,989 
Repo Sweep Accounts   4,915    5,744    5,537 
     Total Deposits and Repo Sweeps   940,530    966,856    973,526 
Borrowed Funds   87,348    67,342    73,060 
Other Liabilities   8,052    8,233    7,015 
TOTAL LIABILITIES   1,035,930    1,042,431    1,053,601 
                
SHAREHOLDERS' EQUITY               
Common Shareholders' Equity, Excluding               
  Accumulated Other Comprehensive Income/ Loss   184,959    183,978    183,002 
Accumulated Other Comprehensive Income/ Loss:               
  Net Unrealized Gains/Losses on               
     Available-for-sale Securities   2,493    6,116    5,281 
  Defined Benefit Plans Adjustment, Net   35    6    79 
TOTAL SHAREHOLDERS' EQUITY   187,487    190,100    188,362 
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY  $1,223,417   $1,232,531   $1,241,963 

 

 2 

 

 

AVAILABLE-FOR-SALE SECURITIES

(In Thousands)

 

   December 31, 2015   September 30, 2015   December 31, 2014 
   Amortized   Fair   Amortized   Fair   Amortized   Fair 
   Cost   Value   Cost   Value   Cost   Value 
                         
Obligations of U.S. Government agencies  $10,663   $10,483   $15,664   $15,621   $27,221   $26,676 
Obligations of states and political subdivisions:                              
     Tax-exempt   103,414    107,757    108,115    112,396    120,086    124,839 
     Taxable   34,317    34,597    34,464    35,124    33,637    33,878 
Mortgage-backed securities   73,227    73,343    71,681    72,697    82,479    83,903 
Collateralized mortgage obligations,                              
     Issued by U.S. Government agencies   193,145    191,715    216,981    218,052    239,620    238,823 
Other collateralized debt obligations   9    9    34    34    34    34 
Total debt securities   414,775    417,904    446,939    453,924    503,077    508,153 
Marketable equity securities   1,680    2,386    5,365    7,789    5,605    8,654 
Total  $416,455   $420,290   $452,304   $461,713   $508,682   $516,807 

 

Summary of Loans by Type

(Excludes Loans Held for Sale)

(In Thousands)

 

   Dec. 31,   Sept. 30,   Dec. 31, 
   2015   2015   2014 
Residential mortgage:               
  Residential mortgage loans - first liens  $304,783   $298,096   $291,882 
  Residential mortgage loans - junior liens   21,146    20,601    21,166 
  Home equity lines of credit   39,040    38,585    36,629 
  1-4 Family residential construction   21,121    23,633    16,739 
Total residential mortgage   386,090    380,915    366,416 
Commercial:               
  Commercial loans secured by real estate   154,779    135,760    145,878 
  Commercial and industrial   75,196    72,011    50,157 
  Political subdivisions   40,007    40,186    17,534 
  Commercial construction and land   5,122    6,852    6,938 
  Loans secured by farmland   7,019    7,521    7,916 
  Multi-family (5 or more) residential   9,188    9,181    8,917 
  Agricultural loans   4,671    4,588    3,221 
  Other commercial loans   12,152    12,691    13,334 
Total commercial   308,134    288,790    253,895 
Consumer   10,656    10,160    10,234 
Total   704,880    679,865    630,545 
Less: allowance for loan losses   (7,889)   (7,416)   (7,336)
Loans, net  $696,991   $672,449   $623,209 

 

Loans Held for Sale

(In Thousands)

 

   Dec. 31,   Sept. 30,   Dec. 31, 
   2015   2015   2014 
Residential mortgage loans originated and serviced - outstanding balance  $152,728   $152,351   $152,505 
Less: outstanding balance of loans sold   (152,448)   (152,275)   (152,505)
Loans held for sale, net  $280   $76   $0 

 

 3 

 

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(In Thousands)

 

   3 Months   3 Months   Year   Year 
   Ended   Ended   Ended   Ended 
   Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31, 
   2015   2015   2015   2014 
Balance, beginning of period  $7,416   $7,300   $7,336   $8,663 
Charge-offs   (66)   (197)   (562)   (2,139)
Recoveries   220    11    270    336 
Net recoveries (charge-offs)   154    (186)   (292)   (1,803)
Provision for loan losses   319    302    845    476 
Balance, end of period  $7,889   $7,416   $7,889   $7,336 

 

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS

AND TROUBLED DEBT RESTRUCTURINGS (TDRs)

(In Thousands)

 

   Dec 31,   Sept. 30,   Dec 31, 
   2015   2015   2014 
Impaired loans with a valuation allowance  $1,933   $1,963   $3,241 
Impaired loans without a valuation allowance   8,041    7,812    9,075 
Total impaired loans  $9,974   $9,775   $12,316 
                
Total loans past due 30-89 days and still accruing  $7,057   $4,780   $7,121 
                
Nonperforming assets:               
  Total nonaccrual loans  $11,517   $11,632   $12,610 
  Total loans past due 90 days or more and still accruing   3,229    2,833    2,843 
  Total nonperforming loans   14,746    14,465    15,453 
  Foreclosed assets held for sale (real estate)   1,260    1,363    1,189 
Total nonperforming assets  $16,006   $15,828   $16,642 
                
Loans subject to troubled debt restructurings (TDRs):               
  Performing  $1,267   $1,043   $1,807 
  Nonperforming   5,097    5,182    5,388 
Total TDRs  $6,364   $6,225   $7,195 
                
Total nonperforming loans as a % of loans   2.09%   2.13%   2.45%
Total nonperforming assets as a % of assets   1.31%   1.28%   1.34%
Allowance for loan losses as a % of total loans   1.12%   1.09%   1.16%
Allowance for loan losses as a % of nonperforming loans   53.50%   51.27%   47.47%

 

 4 

 

 

Analysis of Average Daily Balances and Annualized Rates

(Dollars in Thousands)

 

   3 Months       3 Months       3 Months     
   Ended   Rate of   Ended   Rate of   Ended   Rate of 
   12/31/2015   Return/   9/30/2015   Return/   12/31/2014   Return/ 
   Average   Cost of   Average   Cost of   Average   Cost of 
   Balance   Funds %   Balance   Funds %   Balance   Funds % 
EARNING ASSETS                              
Available-for-sale securities, at amortized cost:                              
     Taxable  $327,225    2.05%  $361,481    2.02%  $383,802    2.10%
     Tax-exempt   105,118    4.99%   111,735    5.14%   121,735    5.22%
          Total available-for-sale securities   432,343    2.76%   473,216    2.75%   505,537    2.85%
Interest-bearing due from banks   20,168    0.39%   19,774    0.44%   31,655    0.39%
Loans held for sale   406    5.86%   245    8.10%   151    7.88%
Loans receivable:                              
     Taxable   629,294    5.04%   610,516    5.10%   587,675    5.40%
     Tax-exempt   61,339    4.52%   63,219    4.50%   39,909    5.28%
          Total loans receivable   690,633    5.00%   673,735    5.05%   627,584    5.40%
          Total Earning Assets   1,143,550    4.07%   1,166,970    4.04%   1,164,927    4.16%
Cash   16,390         16,961         16,310      
Unrealized gain/loss on securities   7,637         7,015         8,222      
Allowance for loan losses   (7,525)        (7,376)        (7,476)     
Bank premises and equipment   15,499         15,808         16,415      
Intangible Asset - Core Deposit Intangible   32         38         58      
Intangible Asset - Goodwill   11,942         11,942         11,942      
Other assets   38,037         38,294         38,442      
Total Assets  $1,225,562        $1,249,652        $1,248,840      
                               
INTEREST-BEARING LIABILITIES                              
Interest-bearing deposits:                              
     Interest checking  $195,439    0.11%  $197,189    0.11%  $190,681    0.11%
     Money market   192,825    0.16%   202,106    0.15%   198,999    0.14%
     Savings   127,744    0.10%   128,939    0.10%   122,955    0.10%
     Certificates of deposit   116,699    0.68%   125,886    0.66%   128,750    0.73%
     Individual Retirement Accounts   107,484    0.41%   109,661    0.41%   116,672    0.40%
     Other time deposits   678    0.00%   1,514    0.26%   677    0.59%
          Total interest-bearing deposits   740,869    0.25%   765,295    0.25%   758,734    0.27%
Borrowed funds:                              
     Short-term   17,395    0.39%   12,972    0.28%   6,886    0.12%
     Long-term   59,929    3.96%   62,876    3.98%   73,092    4.03%
          Total borrowed funds   77,324    3.16%   75,848    3.34%   79,978    3.69%
          Total Interest-bearing Liabilities   818,193    0.53%   841,143    0.53%   838,712    0.59%
Demand deposits   207,534         212,022         213,230      
Other liabilities   9,149         8,803         9,144      
Total Liabilities   1,034,876         1,061,968         1,061,086      
Stockholders' equity, excluding                              
     other comprehensive income/loss   185,716         183,116         182,336      
Other comprehensive income/loss   4,970         4,568         5,418      
Total Stockholders' Equity   190,686         187,684         187,754      
Total Liabilities and Stockholders' Equity  $1,225,562        $1,249,652        $1,248,840      
Interest Rate Spread        3.54%        3.51%        3.57%
Net Interest Income/Earning Assets        3.69%        3.66%        3.73%
                               
Total Deposits (Interest-bearing and Demand)  $948,403        $977,317        $971,964      

 

(1) Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the

Corporation’s marginal federal income tax rate of 35%.

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

(3) Rates of return on earning assets and costs of funds are presented on an annualized basis.

 

 5 

 

 

Analysis of Average Daily Balances and Annualized Rates

(Dollars in Thousands)

 

   Year       Year     
   Ended   Rate of   Ended   Rate of 
   12/31/2015   Return/   12/31/2014   Return/ 
   Average   Cost of   Average   Cost of 
   Balance   Funds %   Balance   Funds % 
EARNING ASSETS                    
Available-for-sale securities, at amortized cost:                    
     Taxable  $366,448    2.07%  $371,125    2.16%
     Tax-exempt   112,700    5.21%   123,809    5.31%
          Total available-for-sale securities   479,148    2.81%   494,934    2.95%
Interest-bearing due from banks   22,201    0.42%   32,510    0.39%
Loans held for sale   222    7.21%   204    7.84%
Loans receivable:                    
     Taxable   603,771    5.19%   589,120    5.45%
     Tax-exempt   53,956    4.72%   38,633    5.54%
          Total loans receivable   657,727    5.15%   627,753    5.46%
          Total Earning Assets   1,159,298    4.09%   1,155,401    4.24%
Cash   16,639         16,865      
Unrealized gain/loss on securities   8,871         6,350      
Allowance for loan losses   (7,380)        (7,992)     
Bank premises and equipment   15,911         16,789      
Intangible Asset - Core Deposit Intangible   41         70      
Intangible Asset - Goodwill   11,942         11,942      
Other assets   37,887         40,472      
Total Assets  $1,243,209        $1,239,897      
                     
INTEREST-BEARING LIABILITIES                    
Interest-bearing deposits:                    
     Interest checking  $195,940    0.11%  $183,874    0.12%
     Money market   196,585    0.15%   198,990    0.14%
     Savings   128,355    0.10%   121,685    0.10%
     Certificates of deposit   121,803    0.68%   134,732    0.79%
     Individual Retirement Accounts   110,659    0.41%   120,016    0.39%
     Other time deposits   1,031    0.10%   1,039    0.10%
          Total interest-bearing deposits   754,373    0.26%   760,336    0.28%
Borrowed funds:                    
     Short-term   11,428    0.28%   6,744    0.13%
     Long-term   66,214    4.00%   73,196    4.03%
          Total borrowed funds   77,642    3.45%   79,940    3.70%
          Total Interest-bearing Liabilities   832,015    0.55%   840,276    0.61%
Demand deposits   213,828         205,082      
Other liabilities   8,461         9,070      
Total Liabilities   1,054,304         1,054,428      
Stockholders' equity, excluding                    
     other comprehensive income/loss   183,125         181,271      
Other comprehensive income/loss   5,780         4,198      
Total Stockholders' Equity   188,905         185,469      
Total Liabilities and Stockholders' Equity  $1,243,209        $1,239,897      
Interest Rate Spread        3.54%        3.63%
Net Interest Income/Earning Assets        3.69%        3.80%
                     
Total Deposits (Interest-bearing and Demand)  $968,201        $965,418      

  

(1) Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the

Corporation’s marginal federal income tax rate of 35%.

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

(3) Rates of return on earning assets and costs of funds are presented on an annualized basis.

 

 6 

 

 

COMPARISON OF NONINTEREST INCOME

(In Thousands)

 

   Three Months Ended   Years Ended 
   Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31,   Dec. 31, 
   2015   2015   2014   2015   2014 
Service charges on deposit accounts  $1,235   $1,302   $1,213   $4,864   $5,025 
Service charges and fees   121    137    133    494    538 
Trust and financial management revenue   1,148    1,123    1,165    4,626    4,490 
Brokerage revenue   199    215    219    839    901 
Insurance commissions, fees and premiums   22    24    15    109    118 
Interchange revenue from debit card transactions   479    482    485    1,935    1,959 
Net gains from sales of loans   162    243    211    735    768 
(Decrease) increase in fair value of servicing rights   (25)   13    (62)   (162)   (27)
Increase in cash surrender value of life insurance   92    95    98    386    376 
Net (loss) gain from premises and equipment   0    (1)   0    (1)   8 
Other operating income   561    328    325    1,579    1,264 
Total other operating income, before realized                         
   gains on available-for-sale securities, net  $3,994   $3,961   $3,802   $15,404   $15,420 

 

COMPARISON OF NONINTEREST EXPENSE

(In Thousands)

 

   Three Months Ended   Years Ended 
   Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31,   Dec. 31, 
   2015   2015   2014   2015   2014 
 Salaries and wages  $3,848   $3,744   $3,562   $14,682   $15,121 
 Pensions and other employee benefits   1,084    1,016    1,206    4,420    4,769 
 Occupancy expense, net   589    623    626    2,574    2,628 
 Furniture and equipment expense   462    477    460    1,860    1,859 
 FDIC Assessments   149    155    156    603    600 
 Pennsylvania shares tax   297    311    336    1,174    1,350 
 Professional fees   175    128    272    538    699 
 Automated teller machine and interchange expense   253    234    256    988    924 
 Software subscriptions   259    209    209    876    784 
 Other operating expense   1,295    1,220    1,167    5,241    5,423 
  Total noninterest expense, before loss on                         
    prepayment of borrowings   8,411    8,117    8,250    32,956    34,157 
 Loss on prepayment of borrowings   1,663    0    0    2,573    0 
 Total noninterest expense  $10,074   $8,117   $8,250   $35,529   $34,157 

 

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