EX-99.1

EX-99.1 2 d777953dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

Civista Bancshares, Inc. Announces Second Quarter 2019 Earnings

Sandusky, Ohio, July 26, 2019 /PRNewswire/– Civista Bancshares, Inc. (NASDAQ:CIVB) (“Civista”) reported net income available to common shareholders of $8.5 million, or $0.51 per diluted share, for the second quarter of 2019, compared with $2.7 million, or $0.24 per diluted share, for the prior year period. For the six-month period ended June 30, 2019, Civista reported net income available to common shareholders of $18.0 million or $1.08 per diluted share, compared to $9.4 million or $0.79 per diluted share, in the same period of 2018.

Factors Affecting Comparability

Civista acquired United Community Bancorp (“UCB”) in September 2018. The financial position and results of operations of UCB prior to its acquisition date are not included in the Company’s financial results for periods prior to the acquisition date.

Adjusted Earnings

Financial results for the second quarter and six months ended June 30, 2018 included $3.2 million in pre-tax acquisition and integration expenses. Excluding these expenses, adjusted earnings were $5.2 million, or $0.44 diluted earnings per share, for the second quarter of 2018 and $11.9 million, or $0.99 diluted earnings per share, for the six months ended June 30, 2018.

A reconciliation of adjusted earnings to net income according to accounting principles generally accepted in the United States (“GAAP”) is provided in the financial tables at the end of this press release.

“I am proud of our second quarter, 2019 results. Comparing 2019 to our adjusted earnings in 2018 diluted earnings per share increased 15.9% for the quarter and 9.1% year to date. Our annualized loan growth was 6.5% for the quarter and 4.8% for the year. We saw additional expansion of our net interest margin and continued strong asset quality, said Dennis G. Shaffer, President and CEO of Civista.

Results of Operations:

Net interest income increased $7.0 million, or 47.2% for the second quarter of 2019, and $13.9 million or 47.1% and for the six months ended June 30, compared to the same periods of 2018. Interest income increased $8.8 million, or 54.2% for the second quarter of 2019 and $17.4 million or 54.3% for the six-month period ended June 30. Average earning assets increased $558.9 million for the second quarter of 2019 and $536.9 million for the six-month period ended June 30.

The increase in average earning assets resulted in $6.7 million and $13.0 million of the increase in interest income, respectively. Additionally, yields increased 54 basis points for the second quarter of 2019 and 60 basis points for the six-month period ended June 30^th, accounting for $2.1 million and $4.5 million increase in interest income, respectively.

Interest expense increased $1.8 million, or 128.4%, for the second quarter of 2019 and $3.5 million, or 137.6%, for the six-months ended June 30 compared to the same periods of 2018. The increase in interest expense is due to both an increase in average balances of $410.4 million, resulting in $756 thousand of the increase for the second quarter of 2019, and $397.3 million, resulting in $1.5 million of the increase for the six-months ended June 30. Additionally, cost of interest-bearing liabilities increased 35 basis points and 37 basis points, respectively. The increase in yield accounted for $1.0 million and $2.0 million of the increase in interest expense.

The tax equivalent net interest margin increased 28 basis points to 4.49% for the second quarter of 2019, compared to 4.21% for the same period a year ago and increased 34 basis points to 4.47% for the six months ended June 30, 2019, compared to 4.13% for the same period a year ago. Accretion of the purchase accounting adjustments accounted for 25 basis points of the second quarter and 23 basis points of the year-to-date margin.

Average Balance Analysis

(Unaudited - Dollars in thousands except share data)


	Three Months Ended June 30,
	2019								2018
	Average					Yield/			Average					Yield/
	balance			Interest		rate *			balance			Interest		rate *
Assets:
Interest-earning assets:
Loans **	$	1,583,533		$	21,657		5.49	%	$	1,158,956		$	14,144		4.90	%
Taxable securities		202,995			1,694		3.39	%		145,435			1,040		2.85	%
Non-taxable securities		171,004			1,408		4.39	%		101,866			886		4.46	%
Interest-bearing deposits in other banks		29,309			167		2.29	%		21,696			90		1.66	%

Total interest-earning assets	$	1,986,841			24,926		5.14	%	$	1,427,953			16,160		4.60	%

Noninterest-earning assets:
Cash and due from financial institutions		38,558								36,501
Premises and equipment, net		21,819								17,549
Accrued interest receivable		7,324								5,270
Intangible assets		85,865								28,351
Other assets		22,193								12,781
Bank owned life insurance		44,328								25,317
Less allowance for loan losses		(13,884	)							(12,935	)

Total Assets	$	2,193,044							$	1,540,787

Liabilities and Shareholders Equity:
Interest-bearing liabilities:
Demand and savings	$	858,781		$	721		0.34	%	$	615,667		$	250		0.16	%
Time		271,183			1,255		1.86	%		140,622			320		0.91	%
FHLB		138,271			831		2.41	%		103,460			482		1.87	%
Subordinated debentures		29,427			372		5.07	%		29,427			338		4.61	%
Repurchase Agreements		18,442			5		0.11	%		16,546			4		0.10	%

Total interest-bearing liabilities	$	1,316,104			3,184		0.97	%	$	905,722			1,394		0.62	%

Noninterest-bearing deposits		540,283								434,126
Other liabilities		21,219								12,609
Shareholders’ Equity		315,438								188,330

Total Liabilities and Shareholders’ Equity	$	2,193,044							$	1,540,787

Net interest income and interest rate spread				$	21,742		4.17	%				$	14,766		3.98	%
Net interest margin							4.49	%							4.21	%

*	- Interest yields are presented on an annualized basis and are calculated using a 21% tax-equivalent adjustment

**	- Average balance includes nonaccrual loans

Average Balance Analysis

(Unaudited - Dollars in thousands except share data)


	Six Months Ended June 30,
	2019								2018
	Average					Yield/			Average					Yield/
	balance			Interest		rate *			balance			Interest		rate *
Assets:
Interest-earning assets:
Loans **	$	1,573,924		$	42,619		5.46	%	$	1,153,230		$	27,783		4.86	%
Taxable securities		205,285			3,442		3.41	%		143,229			2,026		2.84	%
Non-taxable securities		164,349			2,760		4.44	%		101,673			1,764		4.49	%
Interest-bearing deposits in other banks		58,541			689		2.37	%		67,108			511		1.54	%

Total interest-earning assets	$	2,002,099			49,510		5.08	%	$	1,465,240			32,084		4.48	%

Noninterest-earning assets:
Cash and due from financial institutions		65,567								64,211
Premises and equipment, net		21,872								17,641
Accrued interest receivable		6,931								4,860
Intangible assets		85,990								28,359
Other assets		22,394								12,968
Bank owned life insurance		43,987								25,247
Less allowance for loan losses		(13,885	)							(13,037	)

Total Assets	$	2,234,955							$	1,605,489

Liabilities and Shareholders Equity:
Interest-bearing liabilities:
Demand and savings	$	857,232		$	1,429		0.34	%	$	615,940		$	502		0.16	%
Time		270,847			2,438		1.82	%		163,878			775		0.95	%
FHLB		117,882			1,429		2.44	%		71,727			634		1.78	%
Subordinated debentures		29,427			744		5.10	%		29,427			626		4.29	%
Repurchase Agreements		20,309			10		0.10	%		17,467			9		0.10	%

Total interest-bearing liabilities	$	1,295,697			6,050		0.94	%	$	898,439			2,546		0.57	%

Noninterest-bearing deposits		610,265								506,002
Other liabilities		20,408								14,656
Shareholders’ Equity		308,585								186,392

Total Liabilities and Shareholders’ Equity	$	2,234,955							$	1,605,489

Net interest income and interest rate spread				$	43,460		4.14	%				$	29,538		3.91	%
Net interest margin							4.47	%							4.13	%

*	- Interest yields are presented on an annualized basis and are calculated using a 21% tax-equivalent adjustment

**	- Average balance includes nonaccrual loans

No provision for loan losses was recorded during 2019 and 2018. With low net charge offs, improved asset quality and strengthened problem loan coverage ratios, we felt comfortable with no provision so far in 2019, despite the loan growth.

For the second quarter of 2019, noninterest income totaled $5.1 million, an increase of $714 thousand, or 16.3%, compared to the prior year’s second quarter. Noninterest income for the first six-months of 2019 totaled $11.4 million, an increase of $1.4 million, or 13.8%, compared to the prior year’s first six months.

Noninterest income


(unaudited - dollars in thousands)	Three months ended June 30,
	2019			2018		$ change			% change
Service charges	$	1,552		$	1,359	$	193			14.2	%
Net gain on sale of securities		(23	)		41		(64	)		-156.1	%
Net gain on sale of loans		555			474		81			17.1	%
ATM/Interchange fees		951			588		363			61.7	%
Wealth management fees		911			836		75			9.0	%
Bank owned life insurance		252			144		108			75.0	%
Tax refund processing fees		550			550		—			0.0	%
Other		356			398		(42	)		-10.6	%

Total noninterest income	$	5,104		$	4,390	$	714			16.3	%

Noninterest income


(unaudited - dollars in thousands)	Six months ended June 30,
	2019			2018		$ change			% change
Service charges	$	3,008		$	2,493	$	515			20.7	%
Net gain on sale of securities		(17	)		81		(98	)		-121.0	%
Net gain on sale of loans		886			807		79			9.8	%
ATM/Interchange fees		1,857			1,142		715			62.6	%
Wealth management fees		1,758			1,688		70			4.1	%
Bank owned life insurance		499			286		213			74.5	%
Tax refund processing fees		2,750			2,750		—			0.0	%
Other		647			759		(112	)		-14.8	%

Total noninterest income	$	11,388		$	10,006	$	1,382			13.8	%

Service charge fees increased $193 thousand, or 14.2%, and $515 thousand, or 20.7%, for the three and six-month periods ended June 30. ATM/Interchange fees increased $363 thousand, or 61.7%, and $715 thousand, or 62.6%, for the three and six-month periods ended June 30. Bank owned life insurance increased $108 thousand, or 75.0%, and $213 thousand, or 74.5%, for the three and six-month periods ended June 30. The increases in service charge fee income, ATM/Interchange fees and bank owned life insurance income are primarily attributable to the Company’s acquisition of UCB during the third quarter of 2018.

For the second quarter of 2019, noninterest expense totaled $16.6 million, an increase of $711 thousand, or 4.5%, compared to the prior year’s second quarter. Noninterest expense for the first six-months of 2019 increased $5.0 million, or 17.6%, when compared to the first six-months of 2018.

Noninterest expense


(unaudited - dollars in thousands)	Three months ended June 30,
	2019		2018		$ change			% change
Compensation expense	$	9,548	$	7,385	$	2,163			29.3	%
Net occupancy and equipment		1,444		1,186		258			21.8	%
Contracted data processing		447		2,739		(2,292	)		-83.7	%
Taxes and assessments		605		479		126			26.3	%
Professional services		700		1,483		(783	)		-52.8	%
Amortization of intangible assets		235		26		209			803.8	%
Marketing		367		320		47			14.7	%
Other		3,293		2,310		983			42.6	%

Total noninterest expense	$	16,639	$	15,928	$	711			4.5	%

Noninterest expense


(unaudited - dollars in thousands)	Six months ended June 30,
	2019		2018		$ change			% change
Compensation expense	$	19,353	$	14,759	$	4,594			31.1	%
Net occupancy and equipment		2,947		2,321		626			27.0	%
Contracted data processing		866		3,087		(2,221	)		-71.9	%
Taxes and assessments		1,197		948		249			26.3	%
Professional services		1,395		2,035		(640	)		-31.4	%
Amortization of intangible assets		475		59		416			705.1	%
Marketing		707		638		69			10.8	%
Other		6,148		4,286		1,862			43.4	%

Total noninterest expense	$	33,088	$	28,133	$	4,955			17.6	%

Compensation expense increased $2.2 million, or 29.3%, for the second quarter and $4.6 million, or 31.1%, for the six-month period ending June 30, 2019. The increase in compensation expense is comprised of salaries of $1.6 million for the three months and $3.4 million for the six months, employee benefits of $593 thousand for the three months and $1.2 million for the six months ended June 30, 2019. The increases are primarily due to the increased size of the company due to the UCB acquisition. Year-to-date average FTE employees were 433.3 at June 30, 2019, an increase of 88.3 FTEs over 2018. Net occupancy and equipment expense increased $258 thousand, or 21.8%, and $626, or 27.0%, for the three and six-month periods ended June 30, 2019, primarily due to the addition of 9 locations from the UCB acquisition. Contracted data processing expenses decreased $2.3 million, or 83.7%, and $2.2 million, or 71.9%, for the three and six-month periods ended June 30, 2019, primarily due to expenses incurred for the data processing conversion of UCB in 2018 which totaled approximately $2.4 million. Professional services costs decreased $783 thousand, or 52.8%, for the second quarter and $640 thousand, or 31.4%, for the six-month period ending June 30, 2019. Both periods of 2018 included approximately $700 thousand of legal and consulting expenses related to the UCB acquisition.

The efficiency ratio was 59.5% for the six months ended June 30, 2019, compared to 70.3% for the six months ended June 30, 2018. The improvement in the efficiency ratio is due primarily to $3.2 million of pre-tax expenses related to the merger with UCB, as well as an increase in net interest income. The merger expenses in the second quarter of 2018 accounted for 790 basis points of the change.

Civista’s effective income tax rate for the six months ended June 30, 2019 was 15.8% compared to 12.3% for the same period in 2018. The effective income tax rate for second quarter 2019 was 15.1% compared to 6.6% in 2018. The 2018 effective tax rate is skewed by expenses incurred related to the UCB acquisition.

Balance Sheet

Total assets increased $64.0 million, or 3.0%, from December 31, 2018 to June 30, 2019, primarily due to an increase in the loan portfolio of $36.8 million.


End of period loan balances
(unaudited - dollars in thousands)	June 30, 2019		December 31, 2018		$ Change			% Change
Commercial and Agriculture	$	186,423	$	177,101	$	9,322			5.3	%
Commercial Real Estate:
Owner Occupied		218,183		210,121		8,062			3.8	%
Non-owner Occupied		530,570		523,598		6,972			1.3	%
Residential Real Estate		466,581		457,850		8,731			1.9	%
Real Estate Construction		144,448		135,195		9,253			6.8	%
Farm Real Estate		36,116		38,513		(2,397	)		-6.2	%
Consumer and Other		16,449		19,563		(3,114	)		-15.9	%

Total Loans	$	1,598,770	$	1,561,941	$	36,829			2.4	%

The $36.8 million, or 2.4%, increase in the loan portfolio from December 31, 2018 to June 30, 2019 is spread across the loan portfolio, with the exception of the Farm Real Estate and Consumer loan portfolios.

Total deposits increased $52.8 million, or 3.3%, from December 31, 2018 to June 30, 2019. The increase was due primarily to increases in demand deposits, both noninterest-bearing and interest-bearing. A reduction of brokered deposits partially offset these increases.


End of period deposit balances
(unaudited - dollars in thousands)	June 30, 2019		December 31, 2018		$ Change			% Change
Noninterest-bearing demand	$	496,541	$	468,083	$	28,458			6.1	%
Interest-bearing demand		305,086		261,996		43,090			16.4	%
Savings and money market		562,823		562,882		(59	)		0.0	%
Time deposits		259,484		258,832		652			0.3	%
Brokered deposits		8,786		28,100		(19,314	)		-68.7	%

Total Deposits	$	1,632,720	$	1,579,893	$	52,827			3.3	%

The increase in noninterest-bearing demand is due to an increase in deposits from the tax refund processing program of $29.5 million. Interest-bearing demand deposits increased due to a $41.4 million increase in public funds accounts. Brokered deposits decreased $19.3 million and Federal Home Loan Bank advances decreased $17.3 million due to a shift in wholesale funding requirements.

Asset Quality

The Company recorded net recoveries of $107 thousand for the first half of 2019 compared to net charge-offs $267 thousand for the same period of 2018.


Allowance for Loan Losses
(dollars in thousands)	June 30, 2019			June 30, 2018
Beginning of period	$	13,679		$	13,134
Charge-offs		(395	)		(651	)
Recoveries		502			384
Provision		—			—

End of period	$	13,786		$	12,867

The allowance for loan losses to loans was 0.86% at June 30, 2019 and 0.88% at December 31, 2018. The non-performing assets to assets ratio decreased to 0.38% from 0.46% in 2018. The allowance for loan losses to non-performing loans increased to 164.7% from 137.9% in 2018.

Non-performing assets at June 30, 2019 were $8.4 million, a 15.6% decrease from December 31, 2018. Nonaccrual loans include $551 thousand and $1.0 million of purchased credit-impaired (“PCI”) loans at June 30, 2019 and December 31, 2018, respectively.


Non-performing Assets
(dollars in thousands)	June 30, 2019		December 31, 2018
Non-accrual loans	$	5,682	$	6,898
Restructured loans		2,689		3,024

Total non-performing loans		8,371		9,922
Other Real Estate Owned		—		—

Total non-performing assets	$	8,371	$	9,922

Conference Call and Webcast

Civista Bancshares, Inc. will also host a conference call to discuss the Company’s financial results for the second quarter of 2019 at 1:00 p.m. ET on Friday, July 26, 2019. Interested parties can access the live webcast of the conference call through the Investor Relations section of the Company’s website, www.civb.com. Participants can also listen to the conference call by dialing 855-238-2712 and ask to be joined into the Civista Bancshares, Inc. Second Quarter 2019 Earnings call. Please log in or dial in at least 10 minutes prior to the start time to ensure a connection.

An archive of the webcast will be available for one year on the Investor Relations section of the Company’s website (www.civb.com).

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Civista. For these statements, Civista claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Civista, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Civista’ reports filed with the Securities and Exchange Commission, including those described in “Item 1A Risk Factors” of Part I of Civista’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Civista does not undertake, and specifically disclaims any obligation, to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Civista Bancshares, Inc. is a $2.2 billion financial holding company headquartered in Sandusky, Ohio. The Company’s banking subsidiary, Civista Bank, operates 38 locations in Northern, Central and Southwestern Ohio, Southeastern Indiana and Northern Kentucky. Civista Bancshares, Inc. may be accessed at HUwww.civb.comUH. The Company’s common shares are traded on the NASDAQ Capital Market under the symbol “CIVB”. The Company’s depositary shares, each representing a 1/40^th ownership interest in a Series B Preferred Share, are traded on the NASDAQ Capital Market under the symbol “CIVBP”.

For additional information, contact:

Dennis G. Shaffer

President and CEO

Civista Bancshares, Inc.

888-645-4121

Civista Bancshares, Inc.

Financial Highlights

(unaudited - dollars in thousands, except share amounts)

Consolidated Condensed Statement of Income


	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Interest income		24,926			16,160			49,510			32,084
Interest expense		3,184			1,394			6,050			2,546

Net interest income		21,742			14,766			43,460			29,538
Provision for loan losses		—			—			—			—

Net interest income after provision		21,742			14,766			43,460			29,538
Noninterest income		5,104			4,390			11,388			10,006
Noninterest expense		16,639			15,928			33,088			28,133

Income before taxes		10,207			3,228			21,760			11,411
Income tax expense		1,546			214			3,430			1,408

Net income		8,661			3,014			18,330			10,003
Preferred stock dividends		164			299			328			602

Net income available to common shareholders		8,497			2,715			18,002			9,401

Dividends per common share	$	0.11		$	0.07		$	0.20		$	0.14

Earnings per common share,
basic	$	0.54		$	0.26		$	1.15		$	0.91
diluted	$	0.51		$	0.24		$	1.08		$	0.79

Average shares outstanding,
basic		15,628,537			10,470,839			15,618,154			10,342,763
diluted		16,922,712			12,615,336			16,912,329			12,606,415

Selected financial ratios:
Return on average assets		1.58	%		0.78	%		1.65	%		1.26	%
Return on average equity		11.01	%		6.42	%		11.98	%		10.82	%
Dividend payout ratio		19.85	%		24.32	%		17.04	%		14.48	%
Net interest margin (tax equivalent)		4.49	%		4.21	%		4.47	%		4.13	%

Selected Balance Sheet Items

(unaudited - dollars in thousands, except share amounts)


	June 30, 2019			December 31, 2018
	(unaudited)			(unaudited)
Cash and due from financial institutions	$	49,839		$	42,779
Investment securities		360,512			347,364
Loans held for sale		2,563			1,391
Loans		1,598,770			1,561,941
Less allowance for loan losses		13,786			13,679

Net loans		1,584,984			1,548,262
Other securities		20,280			21,021
Premises and equipment, net		21,720			22,021
Goodwill and other intangibles		85,706			86,203
Bank owned life insurance		44,491			43,037
Other assets		32,900			26,876

Total assets	$	2,202,995		$	2,138,954

Total deposits	$	1,632,720		$	1,579,893
Federal Home Loan Bank advances		176,300			193,600
Securities sold under agreements to repurchase		15,554			22,199
Subordinated debentures		29,427			29,427
Accrued expenses and other liabilities		24,782			14,937
Total shareholders’ equity		324,212			298,898

Total liabilities and shareholders’ equity	$	2,202,995		$	2,138,954

Shares outstanding at period end		15,663,059			15,603,499

Book value per share	$	20.10		$	18.56
Equity to asset ratio		14.72	%		13.97	%

Selected asset quality ratios:
Allowance for loan losses to total loans		0.86	%		0.88	%
Non-performing assets to total assets		0.38	%		0.46	%
Allowance for loan losses to non-performing loans		164.69	%		137.87	%

Non-performing asset analysis
Nonaccrual loans	$	5,682		$	6,898
Troubled debt restructurings		2,689			3,024
Other real estate owned		—			—

Total	$	8,371		$	9,922

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)


End of Period Balances	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Assets
Cash and due from banks	$	49,839		$	164,094		$	42,779		$	64,754		$	41,156
Investment securities		360,512			351,006			347,364			318,112			231,013
Loans held for sale		2,563			1,444			1,391			4,025			4,058
Loans		1,598,770			1,573,193			1,561,941			1,515,644			1,180,032
Allowance for loan losses		(13,786	)		(13,822	)		(13,679	)		(13,331	)		(12,867	)

Net Loans		1,584,984			1,559,371			1,548,262			1,502,313			1,167,165
Other securities		20,280			20,280			21,021			17,774			15,154
Premises and equipment, net		21,720			21,772			22,021			22,518			17,308
Goodwill and other intangibles		85,706			85,955			86,203			85,964			28,342
Bank owned life insurance		44,491			44,239			43,037			42,750			25,411
Other assets		32,900			29,541			26,876			27,325			18,700

Total Assets	$	2,202,995		$	2,277,702		$	2,138,954		$	2,085,535		$	1,548,307

Liabilities
Total deposits	$	1,632,720		$	1,765,801		$	1,579,893		$	1,577,755		$	1,146,172
Federal Home Loan Bank advances		176,300			127,100			193,600			145,100			156,200
Securities sold under agreement to repurchase		15,554			21,970			22,199			18,515			14,230
Subordinated debentures		29,427			29,427			29,427			29,427			29,427
Accrued expenses and other liabilities		24,782			21,347			14,937			25,350			12,430

Total liabilities		1,878,783			1,965,645			1,840,056			1,796,147			1,358,459

Shareholders’ Equity
Preferred shares, Series B		9,364			9,364			9,364			10,878			13,250
Common shares		267,275			266,990			266,901			265,324			158,191
Accumulated earnings		56,199			49,421			41,320			35,302			39,898
Treasury shares		(17,235	)		(17,235	)		(17,235	)		(17,235	)		(17,235	)
Accumulated other comprehensive income(loss)		8,609			3,517			(1,452	)		(4,881	)		(4,256	)

Total shareholders’ equity		324,212			312,057			298,898			289,388			189,848

Total Liabilities and Shareholders’ Equity	$	2,202,995		$	2,277,702		$	2,138,954		$	2,085,535		$	1,548,307


Quarterly Average Balances
Assets:
Earning assets	$	1,986,841		$	2,017,523		$	1,907,966		$	1,534,039		$	1,427,953
Securities		373,999			365,219			352,412			252,832			247,301
Loans		1,583,533			1,564,208			1,532,012			1,256,680			1,158,956
Liabilities and Shareholders’ Equity
Total deposits	$	1,670,247		$	1,807,102		$	1,591,521		$	1,202,419		$	1,190,415
Interest-bearing deposits		1,129,964			1,126,173			1,120,876			816,773			756,289
Other interest-bearing liabilities		186,140			148,891			204,002			228,164			149,433
Total shareholders’ equity		315,438			301,656			290,096			205,601			188,330

(Unaudited - Dollars in thousands except share data)


	Three Months Ended
Income statement	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Total interest and dividend income	$	24,926		$	24,584		$	23,707		$	17,886		$	16,160
Total interest expense		3,184			2,865			2,962			2,062			1,394

Net interest income		21,742			21,719			20,745			15,824			14,766
Provision for loan losses		—			—			390			390			—
Noninterest income		5,104			6,284			4,838			3,288			4,390
Noninterest expense		16,639			16,449			16,391			22,156			15,928

Income (loss) before taxes		10,207			11,554			8,802			(3,434	)		3,228
Income tax expense (benefit)		1,546			1,885			1,233			(1	)		214

Net income (loss)		8,661			9,669			7,569			(3,433	)		3,014
Preferred stock dividends		164			164			165			192			299

Net income (loss) available to common shareholders	$	8,497		$	9,505		$	7,404		$	(3,625	)	$	2,715

Common shares dividend paid	$	1,719		$	1,404		$	1,386		$	971		$	719

Per share data
Basic earnings per common share	$	0.54		$	0.61		$	0.48		$	(0.31	)	$	0.26
Diluted earnings per common share		0.51			0.57			0.45			(0.31	)		0.24
Dividends per common share		0.11			0.09			0.09			0.09			0.07
Average common shares outstanding - basic		15,628,537			15,607,655			15,521,404			11,627,093			10,470,839
Average common shares outstanding - diluted		16,922,712			16,901,830			16,898,186			13,271,073			12,615,336

Asset quality
Allowance for loan losses, beginning of period	$	13,822		$	13,679		$	13,331		$	12,867		$	12,814
Charge-offs		(156	)		(239	)		(119	)		(133	)		(226	)
Recoveries		120			382			77			207			279
Provision		—			—			390			390			—

Allowance for loan losses, end of period	$	13,786		$	13,822		$	13,679		$	13,331		$	12,867

Ratios
Allowance to total loans		0.86	%		0.88	%		0.88	%		0.88	%		1.09	%
Allowance to nonperforming assets		164.69	%		150.60	%		137.87	%		132.86	%		168.36	%
Allowance to nonperforming loans		164.69	%		150.60	%		137.87	%		132.86	%		168.36	%

Nonperforming assets
Nonperforming loans	$	8,371		$	9,178		$	9,140		$	10,034		$	7,642
Other real estate owned		—			—			—			—			—

Total nonperforming assets	$	8,371		$	9,178		$	9,140		$	10,034		$	7,642

Capital and liquidity
Tier 1 leverage ratio		12.44	%		11.64	%		12.22	%		15.37	%		12.96	%
Tier 1 risk-based capital ratio		15.94	%		15.64	%		15.30	%		15.43	%		15.71	%
Total risk-based capital ratio		16.78	%		16.48	%		16.15	%		16.29	%		16.74	%
Tangible common equity ratio ⁽¹⁾		10.89	%		9.96	%		9.98	%		9.70	%		9.80	%

(1)	See reconciliation of GAAP measures below

Non-GAAP Reconciliation

Tangible Common Equity and Tangible Assets

(Unaudited - Dollars in thousands except share data)


	Three Months Ended
	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018
Tangible Common Equity
Total Equity	$	324,212		$	312,057		$	298,898		$	289,388		$	189,848
Less: Preferred Equity		9,364			9,364			9,364			10,878			13,250
Less: Goodwill and intangible assets		84,065			84,299			84,540			84,286			27,572

Tangible common equity	$	230,783		$	218,394		$	204,994		$	194,224		$	149,026

Total Shares Outstanding		15,633,059			15,624,113			15,603,499			15,395,064			10,788,892

Tangible book value per share	$	14.76		$	13.98		$	13.14		$	12.62		$	13.81

Tangible Assets
Total Assets	$	2,202,995		$	2,277,702		$	2,138,954		$	2,085,535		$	1,548,307
Less: Goodwill and intangible assets		84,065			84,299			84,540			84,286			27,572

Tangible assets	$	2,118,930		$	2,193,403		$	2,054,414		$	2,001,249		$	1,520,735

Tangible common equity ratio		10.89	%		9.96	%		9.98	%		9.71	%		9.80	%

Reconciliation of Non-GAAP Financial Measures

(Unaudited - Dollars in thousands except share data)


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
Adjusted earnings	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Income before taxes (GAAP)		10,207		3,228		21,760		11,411
Acquisition and integration expenses		—		3,150		—		3,150

Adjusted earnings, pretax		10,207		6,378		21,760		14,561
Adjusted income tax expense		1,546		876		3,430		2,070

Adjusted net income (Non-GAAP)		8,661		5,503		18,330		12,492
Preferred stock dividends		164		299		328		602

Adjusted net income available to common shareholders	$	8,497	$	5,204	$	18,002	$	11,890

Adjusted earnings per common share - basic	$	0.54	$	0.50	$	1.15	$	1.15
Adjusted earnings per common share - diluted		0.51		0.44		1.08		0.99
Average common shares outstanding - basic		15,628,537		10,470,839		15,618,154		10,342,763
Average common shares outstanding - diluted		16,922,712		12,615,336		16,912,329		12,606,415


Adjusted Efficiency ratio
	Six Months Ended			Six Months Ended
	June 30, 2019			June 30, 2018
Noninterest expense (GAAP)		33,088			28,133
Acquisition and integration expense		—			(3,150	)

Adjusted noninterest expense		33,088			24,983

Net interest income (GAAP)		43,460			29,538
Effect of tax-exempt income		741			470

Adjusted net interest income		44,201			30,008

Noninterest Income - GAAP		11,388			10,006

Adjusted total revenue		55,589			40,014

Adjusted Efficiency ratio		59.5	%		62.4	%