EX-99.1 2 exhibit991.htm EXHIBIT 99.1 exhibit991.htm
 
 
 

Exhibit 99.1
Middleburg Financial Corporation Announces 2010 First Quarter Earnings
 

Contact:
Gary R. Shook, President
540-687-4801 or
pres@middleburgbank.com
     
 
Raj Mehra, EVP & CFO
540-687-4816 or
cfo@midleburgbank.com
     
 
Jeffrey H. Culver, EVP & COO
703-737-3470 or
   
coo@middleburgbank.com


MIDDLEBURG, VIRGINIA (April 30, 2010) – Middleburg Financial Corporation (the “Company”), (NASDAQ – MBRG), parent company of Middleburg Bank (the “Bank”), today reported its financial results for the first quarter of 2010.

First Quarter 2010 Highlights:

·  
Net income of $813,844 for the quarter;
·  
Diluted earnings per share of $0.12 for the quarter;
·  
Net interest margin of 3.94% for the quarter;
·  
Total asset growth of $42.3 million or 4.3% for the quarter;
·  
Total loans increased by $13.8 million or 2.1% for the quarter;
·  
Total deposit growth of $22.7 million or 2.7% for the quarter;
·  
Provision for loan losses decreased 3.5% relative to the previous quarter; and
·  
Tier I capital ratio of 13.8%, leverage ratio of 10.7%


“Based on the first quarter of 2010 we are cautiously optimistic” said Gary R. Shook, president of Middleburg Financial Corporation.  “There is evidence that loan and deposit growth is accelerating and we are seeing growth in our wealth management business as well.  We attribute much of this growth to improved economic conditions in our primary markets.  However, we foresee a continuation of problem loans throughout this year, which will continue to impact earnings.”  

Net Interest Income and Net Interest Margin

Net interest income was $8.5 million during the three months ended March 31, 2010, a decrease of 3.0% relative to the quarter ended December 31, 2009. The average yield on earning assets was 5.58% for the quarter ended March 31, 2010, down 62 basis points relative to the quarter ended December 31, 2009.   We reduced our costs for deposits as well as for borrowings in the first quarter of 2010. The average cost of interest bearing liabilities during the quarter decreased to 1.93%, down 40.0 basis points relative to the quarter ended December 31, 2009.

 
 
 


The net interest margin for the three months ended March 31, 2010 was 3.94% compared to 4.17% for the quarter ended December 31, 2009.

The Company’s net interest margin is not a measurement under accounting principles generally accepted in the United States, but it is a common measure used by the financial services industry to determine how profitably earning assets are funded. The Company’s net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets.  Tax equivalent net interest income is calculated by grossing up interest income for the amounts that are non-taxable (i.e., municipal income) then subtracting interest expense. The tax rate utilized is 34%. Details on the calculation of the net interest margin are included in the “Key Statistics” table.

Asset Quality and Provision for Loan Losses

Provisions for loan losses were $929,000 for the quarter ended March 31, 2010, compared to $967,000 for the quarter ended December 31, 2009, a decline of 3.9%.   Even with this decrease, Company was able to increase its allowance for loan losses by $643,000 or from 1.33% of total loans to 1.50% of total loans. The pace of problem loans is as expected, however, given the continued uncertainty in the economy, the Company deemed it prudent to increase its ratio of allowance for loan losses to total loans.

Non performing assets increased from $17.2 million or 1.8% of total assets at December 31, 2009 to $19.0 million or 1.9% of total assets as of March 31, 2010. Given the current economic environment, it is anticipated there could be an increase in non performing loans, but we do not believe that  the increase will be as dramatic as that experienced in 2009.

Non-Interest Income

Non-interest income decreased by $670,000 or 11.7% to $5.07 million when comparing the quarter ended March 31, 2010 to the quarter ended December 31, 2009, largely driven by decreases in gains on sales of mortgage loans originated by Southern Trust Mortgage, our majority owned subsidiary, and gains on sales of securities.  Southern Trust Mortgage closed $149 million in mortgage loans in the quarter ended March 31, 2010, down 31% from the quarter ended December 31, 2009. Gain on sale of mortgage loans was $2.6 million for the quarter ended March 31, 2010, a decrease of 20% compared to the quarter ended December 31, 2009.

The revenues and expenses of Southern Trust Mortgage for the three month period ended March 31,  2010 are reflected in the Company’s financial statements on a consolidated basis, with the outstanding interest not held by the Company reported as “Non-controlling Interest Net (Income) Loss”

Trust and investment advisory fees earned by Middleburg Trust Company (“MTC”) and Middleburg Investment Advisors (“MIA”) were relatively unchanged when comparing the quarter ended March 31, 2010 to the quarter ended December 31, 2009 and increased 2.3% when compared to the quarter ended March 31, 2009.  Trust and investment advisory fees are based primarily upon the market value of the accounts under administration/management.  Total consolidated assets under administration by MTC and MIA were at $1.2 billion at March 31, 2010, an increase of 8.1% relative to December 31, 2009 and an increase of 44.5% relative to March 31, 2009.  The Bank holds a large portion of its investment portfolio in custody with MTC.  MTC’s assets under administration were $854.8 million at March 31, 2010 and $771.5 million at December 31, 2009.  MIA’s assets under administration were $318.7 million at March 31, 2010 and $313.5 million at December 31, 2009.

 
 

Non-Interest Expense

Non-interest expense in the first quarter of 2010 decreased $163,000,  down 1.4% relative to the quarter ended December 31, 2009.

Salaries and employee benefit expenses in the first quarter of 2010 increased by $737,000 relative to the quarter ended December 31, 2009, primarily due to incentive accrual for 2010 and benefit payouts. Other operating expenses in the first quarter of 2010 decreased by $1.0 million, down 27.0% relative to the previous quarter due to decreases in various other expense categories including professional fees and expenses associated with other real estate owned.

Total Consolidated Assets

Total assets at March 31, 2010 were $1.0 billion, an increase of $42.2 million or 4.3% during the quarter.

Total loans, net of allowance for loan losses, increased by $12.9 million, or 2.0% when comparing March 31, 2010 to December 31, 2009.  The investment portfolio was at $186 million at March 31, 2010, an increase of $7 million or 3.9% compared to December 31, 2009. Mortgages held for resale decreased $2.2 million or 4.8% from December 31, 2009 to March 31, 2010. Cash and due and interest-bearing balances at banks increased by $25.7 million or 59.4% from December 31, 2009 to March 31, 2010.
 
 
Deposits and Other Borrowings

Total deposits were at $827.4 million at March 31, 2010, up $21.7 million or 2.7% from December 31, 2009, primarily due to an increase in savings and non-interest bearing demand deposits. Time deposits, including brokered deposits decreased $3.0 million or 4.6% when comparing December 31, 2009 to March 31, 2010. The Company has been paying off brokered deposits as they mature. Brokered deposits were $62.0 million at March 31, 2010, down $3.0 million or 40.0% from the year prior. Long term borrowings from the FHLB were $47.9 million at March 31, 2010, up  $12.9 million from December 31, 2009.  The increase in borrowings was related to the funding of commercial loans.

Equity

Total shareholders’ equity at March 31, 2010 was $103.9 million, compared to shareholders’ equity of $103.4 million as of December 31, 2009. Retained earnings at March 31, 2010 were at $42.8 million compared to $42.7 million at December 31, 2009. The book value of the Company at March 31, 2010 was $14.65 per common share.   As of March 31, 2010, the Tier 1 risk-based capital ratio was 13.77%, the total risk-based capital ratio was 15.02% and the leverage ratio was 10.71%


Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import.  Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, and other filings with the Securities and Exchange Commission.

Middleburg Financial Corporation is headquartered in Middleburg, Virginia and has two wholly owned subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc.  Middleburg Bank serves Loudoun, Fairfax, and Fauquier Counties in Virginia with eight financial service centers.  Middleburg Investment Group owns Middleburg Trust Company and Middleburg Investment Advisors, Inc. Middleburg Trust Company is headquartered in Richmond, Virginia with a branch office in Middleburg and Williamsburg. Middleburg Investment Advisors, Inc. is an SEC registered investment advisor located in Alexandria, Virginia.



 
 
 



MIDDLEBURG FINANCIAL CORPORATION
                    
SUMMARY INCOME STATEMENT
                    
(Unaudited, dollars in thousands)
                    
     
For the Three Months Ended
 
     
Mar 31, 2010
  
Dec. 31, 2009
  
Sep. 30, 2009
  
Jun. 30, 2009
  
Mar. 31, 2009
                       
INTEREST INCOME
                    
 
Interest and fees on loans
$
 10,445
$
 11,041
$
 11,973
$
 12,870
$
 12,950
 
Interest on investment securities
  
 1,687
  
 1,883
  
 1,998
  
 1,990
  
 2,041
TOTAL INTEREST INCOME
$
 12,132
$
 12,924
$
 13,971
$
 14,860
$
 14,991
                       
INTEREST EXPENSE
                    
 
Interest on deposits
$
 3,174
$
3,633
$
 3,866
$
 3,959
$
 4,156
 
nterest on borrowings
  
 502
  
577
  
749
  
991
  
 1,151
TOTAL INTEREST EXPENSE
$
 3,676
$
 4,210
$
 4,615
$
4,950
$
 5,307
                       
NET INTEREST INCOME
$
 8,456
$
 8,714
$
 9,356
$
 9,910
$
 9,684
                       
PROVISION FOR LOAN LOSSES
  
 929
  
967
  
964
  
 1,583
  
 1,037
                       
NET INTEREST INCOME AFTER PROVISION
                    
 
FOR LOAN LOSSES
$
 7,527
$
 7,747
$
 8,392
$
8,327
$
 8,647
                       
NON INTEREST INCOME
                    
 
Trust and investment advisory fee income
$
 815
$
 $816
$
 813
$
792
$
 797
 
Service charges on deposits
  
 441
  
 486
  
 474
  
 490
  
 455
 
Gain on the sale of loans
  
 2,630
  
 3,283
  
 2,407
  
 3,378
  
 2,792
 
Net (losses) gains on securities available for sale
                    
 
including OTTI adjustments
  
 355
  
 365
  
 (258)
  
 661
  
 230
 
Commissions on investment sales
  
 144
  
 175
  
 148
  
 172
  
 85
 
Equity earnings in unconsolidated subsidiaries
  
 37
  
 40
  
 23
  
 92
  
 111
 
Bank owned life insurance
  
 125
  
 109
  
 123
  
 130
  
 127
 
Other service charges, commissions and fees
  
 471
  
 429
  
 298
  
 450
  
 374
 
Other operating income
  
 54
  
 36
  
 29
  
 (36)
  
 16
                       
TOTAL NON INTEREST INCOME
$
5,072
$
 5,739
$
4,057
$
6,129
$
 4,987
                       
NON INTEREST EXPENSE
                    
 
Salaries and employee benefits
$
6,924
$
 6,187
$
6,925
$
7,670
$
 7,260
 
Net occupancy expense of premises
  
1,604
  
 1,500
  
 1,455
  
 1,566
  
 1,384
 
Other taxes
  
196
  
 149
  
 148
  
 145
  
 145
 
Computer operations
  
328
  
 344
  
 285
  
 360
  
 301
 
Advertising and marketing
  
180
  
 211
  
 184
  
 216
  
 149
 
Other operating expenses
  
2,711
  
 3,715
  
 2,908
  
 3,062
  
 2,593
                       
TOTAL NON INTEREST EXPENSE
$
11,943
$
 12,106
$
11,905
$
13,019
$
11,832
                       
INCOME BEFORE TAXES
$
656
$
1,380
$
 544
$
1,437
$
1,802
 
Income tax expense (benefit)
  
87
  
 (5)
  
 (92)
  
 21
  
 140
                       
NET INCOME
$
569
$
1,385
$
 636
$
1,416
$
 1,662
NONCONTROLLING INTEREST NET (INCOME) LOSS
  
245
  
 (270)
  
 (26)
  
 (603)
  
 (678)
MIDDLEBURG FINANCIAL CORPORATION NET INCOME
$
814
$
 1,115
$
610
   $
 813
$
 984


 
 
 

 
 
MIDDLEBURG FINANCIAL CORPORATION
                  
BALANCE SHEET
                  
(dollars in thousands)
Unaudited
  
Audited
  
Unaudited
  
Unaudited
  
Unaudited
 
3/31/2010
  
12/31/2009
  
9/30/2009
  
6/30/2009
  
3/31/2009
                   
Assets:
                  
Cash and due from banks
 $                  20,333
  
 $              18,365
  
 $                80,646
  
 $                 39,721
  
 $             21,059
Interest-bearing balances in banks
 48,568
  
 24,845
  
 2,214
  
 2,958
  
 1,725
Federal funds sold
 -
  
 -
  
 -
  
 54,600
  
 24,500
Securities at fair value
 185,978
  
 178,924
  
 168,049
  
 162,355
  
 165,921
Loans, net of allowance for loan losses
 648,009
  
 635,094
  
 643,293
  
 642,883
  
 650,600
Mortgages held for resale
 42,836
  
 45,010
  
 36,826
  
 74,346
  
 66,439
Bank premises and equipment, net
 23,152
  
 23,506
  
 22,848
  
 22,722
  
 22,920
Other assets
 49,752
  
 50,630
  
 43,902
  
 44,975
  
 45,099
                   
Total assets
 $             1,018,628
  
 $            976,374
  
 $             997,777
  
 $            1,044,560
  
 $          998,263
                   
Liabilities:
                  
Deposits:
                  
Non-interest bearing demand deposits
 $                117,146
  
 $            106,459
  
 $             105,648
  
 $                124,472
  
 $          113,131
Savings and interest-bearing demand deposits
 412,185
  
 397,720
  
 380,527
  
 347,561
  
 329,042
Time deposits
 298,057
  
 301,469
  
 301,453
  
 338,100
  
 331,075
Total deposits
 $                827,388
  
 $            805,648
  
 $             787,628
  
 $                810,133
  
 $          773,248
                   
Securities sold under agreements to repurchase
 24,286
  
 17,199
  
 19,808
  
 19,505
  
 18,989
Short term borrowings
 3,390
  
 3,538
  
 7,112
  
 21,278
  
 15,340
Long-term debt
 47,912
  
 35,000
  
 43,000
  
 74,000
  
 74,000
Trust preferred capital notes
 5,155
  
 5,155
  
 5,155
  
 5,155
  
 5,155
Other liabilities
 6,606
  
 6,475
  
 9,853
  
 10,981
  
 10,832
Total liabilities
 $                914,737
  
 $           873,015
  
 $             872,556
  
 $               941,052
  
 $         897,564
                   
Shareholders' Equity:
                  
Middleburg Financial Corporation shareholders' equity:
                
Preferred stock, par value $1,000.00 per share
 $                            -
  
 $                      -
  
 $               21,597
  
 $                 21,603
  
 $           21,584
Common stock, par value $2.50 per share
 17,273
  
 17,273
  
 17,255
  
 12,483
  
 11,826
Capital surplus
 42,826
  
 42,807
  
 42,703
  
 28,310
  
 26,083
Retained earnings
 42,828
  
 42,706
  
 43,076
  
 43,235
  
 43,665
Accumulated other comprehensive income (loss), net
 (1,703)
  
 (2,474)
  
 (2,203)
  
 (5,156)
  
 (5,026)
Total Middleburg Financial Corporation shareholders' equity
 101,224
  
 100,312
  
 122,428
  
 100,475
  
 98,132
Non-controlling interest in consolidated subsidiary
 2,666
  
 3,047
  
 2,793
  
 3,033
  
 2,567
                   
Total shareholders' equity
 $               103,890
  
 $          103,359
  
 $            125,221
  
 $             103,508
  
 $         100,699
Total liabilities and shareholders' equity
 $            1,018,627
  
 $          976,374
  
 $            997,777
  
 $          1,044,560
  
 $         998,263


 
 
 

 
 
KEY STATISTICS
  
 
For the Three Months Ended
     
 Mar 31, 2010
  
Dec 31, 2009
  
Sep 30, 2009
  
Jun 30, 2009
                   
 
Net Income (dollars in thousands)
$
 814
$
 1,114
$
 610
$
 $813
 
Earnings per share, basic
$
 0.12
$
 0.07
$
 0.05
$
 $0.11
 
Earnings per share, diluted
$
 0.12
$
 0.07
$
 0.05
$
 $0.11
 
Dividend per share
$
 0.10
$
 0.10
$
$0.10
$
 $0.19
                   
 
Return on average total assets
  
0.33%
  
0.35%
  
0.29%
  
0.19%
 
Return on average total equity
  
3.25%
  
2.82%
  
2.51%
  
1.88%
 
Dividend payout ratio
  
84.90%
  
142.86%
  
200.00%
  
172.73%
 
Fee revenue as a percent of total revenue
  
28.00%
  
29.37%
  
23.60%
  
26.90%
                   
 
Net interest margin(1)
  
3.94%
  
3.83%
  
4.13%
  
4.36%
 
Yield on average earning assets
  
5.58%
  
5.61%
  
6.08%
  
6.46%
 
Yield on average interest-bearing liabilities
  
1.93%
  
2.16%
  
2.35%
  
2.50%
 
Net interest spread
  
3.65%
  
3.45%
  
3.73%
  
3.96%
                   
 
Non-interest income to average assets
  
1.93%
  
2.10%
  
1.71%
  
2.15%
 
Non-interest expense to average assets
  
4.90%
  
4.74%
  
4.71%
  
5.12%
                   
 
Efficiency ratio(2)
  
87.85%
  
83.48%
  
84.26%
  
82.25%
 
 

(1)  
The net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets.  Tax equivalent net interest income is calculated by grossing up interest income for the amounts that are non taxable (i.e., municipal income) then subtracting interest expense. The tax rate utilized is 34%. The Company’s net interest margin is a common measure used by the financial service industry to determine how profitably earning assets are funded.  Because the Company earns a fair amount of non taxable interest income due to the mix of securities in its investment security portfolio, net interest income for the ratio is calculated on a tax equivalent basis as described above.


(2)  
The efficiency ratio is not a measurement under accounting principles generally accepted in the United States.  It is calculated by dividing non interest expense by the sum of tax equivalent net interest income and non interest income excluding gains and losses on the investment portfolio.  The tax rate utilized is 34%. The Company calculates this ratio in order to evaluate its overhead structure or how effectively it is operating.  An increase in the ratio from period to period indicates the Company is losing a larger percentage of its income to expenses.

 
 
 

 
 
MIDDLEBURG FINANCIAL CORPORATION
                
SELECTED FINANCIAL DATA BY QUARTER
                
     
1Q10
  
4Q09
  
3Q09
  
2Q09
BALANCE SHEET RATIOS
                
 
Net loans to deposits
  
78.32%
  
78.83%
  
81.67%
  
79.36%
 
Average interest-earning assets to
                
 
    average-interest bearing liabilities
  
117.51%
  
121.36%
  
120.32%
  
119.05%
PER SHARE DATA
                
 
Dividends
  
 $                0.10
  
 $0.10
  
 $0.10
  
 $0.19
 
Book value
  
 $              14.65
  
 $          14.52
  
 $14.61
  
 $               15.80
 
Tangible book value
  
 $              13.71
  
 $          13.57
  
 $13.65
  
 $               14.47
SHARE PRICE DATA
                
 
Closing price
  
 $              15.06
  
 $          14.59
  
 $13.05
  
 $               13.76
 
Diluted earnings multiple(1)
  
 1.03
  
 0.97
  
 0.67
  
 0.66
 
Book value multiple(2)
  
 1.03
  
 1.00
  
 0.89
  
 0.87
                   
COMMON STOCK DATA
                
 
Outstanding shares at end of period
  
 6,909,293
  
6,909,293
  
6,901,843
  
 4,993,245
 
Weighted average shares outstanding
  
 6,909,293
  
 5,635,687
  
 5,208,624
  
 4,675,849
 
Weighted average shares outstanding, diluted
 6,912,173
  
 6,906,429
  
 6,267,267
  
 4,822,365
CAPITAL RATIOS
                
 
Total parent equity to total assets
  
9.94%
  
10.59%
  
12.27%
  
9.62%
 
Total risk based capital ratio
  
15.02%
  
15.06%
  
18.22%
  
14.73%
 
Tier 1 risk based capital ratio
  
13.77%
  
13.86%
  
16.97%
  
13.54%
 
Leverage ratio
  
10.71%
  
10.40%
  
12.50%
  
10.58%
CREDIT QUALITY
                
 
Net charge-offs to average loans
  
0.04%
  
0.18%
  
0.17%
  
0.26%
 
Total non-performing loans to total loans
2.00%
  
1.48%
  
1.57%
  
1.99%
 
Total non-performing assets to total assets
1.87%
  
1.64%
  
1.88%
  
1.96%
 
Non-accrual loans to:
                
 
      total loans
  
1.46%
  
1.34%
  
1.38%
  
1.99%
 
      total assets
  
0.94%
  
0.88%
  
0.90%
  
1.24%
 
Allowance for loan losses to:
                
 
      total loans
  
1.50%
  
1.33%
  
1.41%
  
1.45%
 
     non-performing assets
  
51.88%
  
53.00%
  
49.21%
  
46.14%
 
     non-accrual loans
  
102.67%
  
104.11%
  
102.43%
  
72.62%
NON-PERFORMING ASSETS:
                
(dollars in thousands)
                
 
    Loans delinquent over 90 days
  
 $         3,544
  
 $           908
  
 $         1,206
  
 $                  -
 
    Non-accrual loans
  
 9,613
  
 8,608
  
 9,008
  
 12,985
 
    Other real estate owned and repossessed assets
 5,869
  
 6,511
  
 8,537
  
 7,455
 
Total non-performing assets
  
 19,026
  
 16,027
  
 18,751
  
 20,440
NET LOAN CHARGE-OFFS (RECOVERIES):
                
(dollars in thousands)
                
 
    Loans charged off
  
 $            291
  
 $        1,280
  
 $         1,216
  
 $         1,866
 
    (Recoveries)
  
 (47)
  
 (48)
  
 (49)
  
 (6)
 
Net charge-offs
  
 $            244
  
 $        1,232
  
 $         1,167
  
 $         1,860
PROVISION FOR LOAN LOSSES (dollars in thousands)
 $            929
  
 $967
  
 $964
  
 $         1,583
ALLOWANCE FOR LOAN LOSS SUMMARY
                
(dollars in thousands)
                
 
Balance at the beginning of period
  
 $         9,185
  
 $       9,227
  
 $        9,430
  
 $        9,707
 
Provision
  
 929
  
 967
  
 964
  
 1,583
 
Net charge-offs (recoveries)
  
 244
  
 1,009
  
 1,167
  
 1,860
 
Balance at the end of period
  
 $         9,870
  
 $       9,185
  
 $        9,227
  
 $        9,430



 
 
 


(1)  
The diluted earnings multiple is calculated by dividing the period’s closing market price per share by total equity per weighted average shares outstanding, diluted for the period.  The diluted earnings multiple is a measure of how much an investor may be willing to pay for $1.00 of the Company’s earnings.
(2)  
The book value multiple (or price to book ratio) is calculated by dividing the period’s closing market price per share by the period’s book value per share.  The book value multiple is a measure used to compare the Company’s market value per share to its book value per share.

 
 
 

 
 
 
Average Balances, Income and Expenses, Yields and Rates
 
 Three Months Ended March 31,
     
2010
          
2009
    
 
 Average
  
 Income/
  
Yield/
  
 Average
  
 Income/
  
Yield/
 
 Balance
  
 Expense
  
Rate  (2)
  
 Balance
  
 Expense
  
Rate  (2)
 
(Dollars in thousands)
Assets :
                      
Securities:
                      
   Taxable
 $              119,744
  
 $                 959
  
3.25%
  
 $           115,468
  
 $            1,279
  
4.49%
   Tax-exempt (1)
 63,929
  
 1,050
  
6.66%
  
 62,031
  
 1,103
  
7.21%
       Total securities
 $              183,673
  
 $              2,009
  
4.44%
  
 $           177,499
  
 $            2,382
  
5.44%
Loans
                      
   Taxable
 $              678,854
  
 $            10,445
  
6.24%
  
 $           715,438
  
 $          12,950
  
7.34%
   Tax-exempt  (1)
 -
  
 -
  
 -
  
 3
  
 -
  
0.00%
       Total loans
 $              678,854
  
 $            10,445
  
6.24%
  
 $           715,441
  
 $          12,950
  
7.34%
Federal funds sold
 -
  
 -
  
-
  
 21,201
  
 12
  
0.23%
Interest on money market investments
 -
  
 -
  
-
  
 -
  
 -
  
-
Interest bearing deposits in
                      
      other financial institutions
 44,677
  
 35
  
0.32%
  
 3,541
  
 22
  
2.52%
       Total earning assets
 $              907,204
  
 $           12,489
  
5.58%
  
 $          917,682
  
 $          15,366
  
6.79%
Less: allowances for credit losses
 (9,104)
          
 (9,843)
        
Total nonearning assets
 90,757
          
 91,382
        
Total assets
 $              988,857
          
 $          999,221
        
                       
Liabilities:
                      
Interest-bearing deposits:
                      
    Checking
 $              279,655
  
 $                 601
  
0.87%
  
 $          224,570
  
 $               811
  
1.46%
    Regular savings
 70,393
  
 183
  
1.05%
  
 51,960
  
 184
  
1.44%
    Money market savings
 50,957
  
 115
  
0.92%
  
 35,876
  
 109
  
1.23%
    Time deposits:
                      
       $100,000 and over
 161,447
  
 1,152
  
2.89%
  
 130,201
  
 1,119
  
3.49%
       Under $100,000
 136,953
  
 1,123
  
3.33%
  
 205,424
  
 1,933
  
3.82%
       Total interest-bearing deposits
 $              699,405
  
 $               3,174
  
1.84%
  
 $          648,031
  
 $            4,156
  
2.60%
                       
Short-term borrowings
 4,843
  
 44
  
3.68%
  
 31,735
  
 276
  
3.53%
Securities sold under agreements
                      
    to repurchase
 21,644
  
 20
  
0.37%
  
 23,099
  
 22
  
0.39%
Long-term debt
 46,136
  
 438
  
3.85%
  
 84,377
  
 853
  
4.10%
Federal funds purchased
 -
 
 -
  
 
  
 -
 
 -
  
-
    Total interest-bearing liabilities
 $              772,028
  
 $               3,676
  
1.93%
  
 $          787,242
  
 $            5,307
  
2.73%
Non-interest bearing liabilities
                      
    Demand deposits
 105,994
          
 107,326
        
    Other liabilities
 6,562
          
 10,462
        
Total liabilities
 $884,584
          
 $905,030
        
Non-controlling interest
 2,725
          
 2,316
        
Shareholders' equity
 101,548
          
 91,875
        
Total liabilities and shareholders'
 -
          
 -
        
   equity
 $988,857
          
 $999,221
        
                       
Net interest income
    
 $              8,813
          
 $           10,059
    
                       
Interest rate spread
        
3.65%
          
4.06%
Interest expense as a percent of
                      
    average earning assets
        
1.64%
          
2.35%
Net interest margin
        
3.94%
          
4.45%
Return on average assets
        
0.33%
          
0.40%
Return on average equity
        
3.25%
          
4.24%
                       
(1) Income and yields are reported on tax equivalent basis assuming a federal tax rate of 34%.
        
(2) All yields and rates have been annualized on a 365 day year.