Exhibit 99.1

October 24, 2018

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

2018 THIRD QUARTER FINANCIAL RESULTS

 

   

Record net income for the quarter of $8.1 million, 35% higher than the same quarter in 2017

 

   

143 consecutive quarters of profitability

 

   

Annualized return on average assets was 1.42% and annualized return on average equity 12.80% for the quarter ended September 30, 2018

 

   

9% loan growth since September 30, 2017

 

   

Non-performing assets to total assets remain at low levels, 0.40% at September 30, 2018

CANFIELD, Ohio (October 24, 2018) – Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months ended September 30, 2018.

Net income for the three months ended September 30, 2018 was $8.1 million, or $0.29 per diluted share, which compares to $6.0 million, or $0.22 per diluted share, for the three months ended September 30, 2017 and $8.1 million, or $0.29 per diluted share, for the linked quarter. Annualized return on average assets and return on average equity were 1.42% and 12.80%, respectively, for the three month period ending September 30, 2018, compared to 1.12% and 10.15% for the same three month period in 2017, and 1.47% and 13.28% for the linked quarter. Farmers’ return on average tangible equity (Non-GAAP) was 15.70% for the quarter ended September 30, 2018 compared to 12.69% for the same quarter in 2017 and 16.24% for the linked quarter.

Net income for the nine months ended September 30, 2018 was $23.9 million, or $0.85 per diluted share, compared to $17.5 million or $0.64 per diluted share for the same nine month period in 2017. Return on average assets and return on average equity were 1.45% and 13.00%, respectively, for the nine months ended September 30, 2018, compared to 1.14% and 10.41% for the same period in 2017. Farmers’ return on average tangible equity (Non-GAAP) was 15.86% for the nine month period ended September 30, 2018 compared to 12.98% for the same period in 2017.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. H.R.1, among other things, reduced the corporate income tax rate to 21% effective January 1, 2018. As a result of passage of the new tax law, Farmers effective tax rate decreased from 25.5% for the nine months ended September 30, 2017 to 14.7% for the nine months ended September 30, 2018. It is important to note that also as a result of the new tax law, Farmers determined that its net deferred tax assets needed to be reduced in the fourth quarter of 2017 by approximately $1.8 million, representing an impact on earnings per share of approximately $0.06 per diluted share for that fourth quarter, based on that quarter’s weighted average diluted shares outstanding of approximately 27.5 million.

Kevin J. Helmick, President and CEO, stated, “We are pleased to report another strong quarter which is the result of the successful execution of our strategic plan, continued strong loan growth, higher levels of noninterest income and a lower effective income tax rate.”

2018 Third Quarter Financial Highlights

 

   

Loan growth

Total loans were $1.69 billion at September 30, 2018, compared to $1.55 billion at September 30, 2017, representing an increase of 9.0%. 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 commercial and commercial real estate, residential real estate and agricultural loan portfolios. Loans now comprise 78.8% of the Bank’s average earning assets for the quarter ended September 30, 2018, an improvement compared to 77.6% for the same period in 2017. This improvement, along with the interest rate environment, has resulted in a 15.4% increase in loan income in the third quarter of 2018 compared to the same quarter in 2017.


   

Loan quality

Non-performing assets to total assets remain at a low level, currently at 0.40%. Early stage delinquencies also continue to remain at low levels, at $10.6 million, or 0.63% of total loans, at September 30, 2018. Net charge-offs for the current quarter were $338 thousand, compared to $592 thousand in the same quarter in 2017 and annualized net charge-offs as a percentage of average net loans outstanding is only 0.08% for the quarter ended September 30, 2018. Lending to the energy sector is insignificant and less than 1% of the loan portfolio.

 

   

Net interest margin

The net interest margin for the three months ended September 30, 2018 was 3.86%, a 10 basis points decrease from the quarter ended September 30, 2017. In comparing the third quarter of 2018 to the same period in 2017, asset yields increased 21 basis points, while the cost of interest-bearing liabilities increased 41 basis points. Most of this increase was the result of higher rates paid on short-term borrowings and time deposits, consistent with increases in the federal funds sold rate. 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 and 3 basis points for the quarters ended September 30, 2018 and 2017, respectively.

 

   

Noninterest income

Noninterest income increased 6.9% to $6.5 million for the quarter ended September 30, 2018 compared to $6.1 million in the same quarter of 2017. Trust fees increased $219 thousand or 13.6% in comparing the third quarter of 2018 to the same quarter in 2017. In the third quarter of 2018 investment commissions increased $89 thousand or 48.4%, service charges on deposit accounts increased $74 thousand or 6.9% and net gains on sale of loans increased $46 thousand or 6.1% from the third quarter in 2017. These increases were offset by a drop in other operating income of $70 thousand or 15%.

 

   

Noninterest expenses

Farmers has remained committed to managing its level of noninterest expenses. Total noninterest expenses for the third quarter of 2018 increased 2.5% to $16.2 million compared to $15.8 million in the same quarter in 2017, primarily a result of increases in other operating expenses of $397 thousand which included $150 thousand in captive insurance losses and core processing charges of $76 thousand, offset by a $270 thousand decrease in merger related costs. It is important to note that annualized noninterest expenses measured as a percentage of quarterly average assets decreased from 2.96% in the third quarter of 2017 to 2.85% in the third quarter of 2018.

 

   

Efficiency ratio

The efficiency ratio for the quarter ended September 30, 2018 improved to 58.70% compared to 59.93% for the same quarter in 2017. The main factors leading to this improvement were the increase in net interest income and noninterest income and a lower level of noninterest expenses relative to average assets as explained in the preceding paragraphs.    

2018 Outlook

Mr. Helmick added, “We are encouraged by our financial results for the first three quarters of 2018 and look to use this momentum to sustain strong performance for the remainder of the year. As always, we will remain focused on delivering for the businesses, families and communities we serve.”

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $2.3 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, Farmers Trust Company, which operates four trust offices and offers services in the same geographic markets, and National Associates, Inc. Total wealth management assets under care at September 30, 2018 are $2.7 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, 2017, 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 Nine Months Ended  
     Sept. 30,
2018
    June 30,
2018
    March 31,
2018
    Dec. 31,
2017
    Sept. 30,
2017
    Sept. 30,
2018
    Sept. 30,
2017
    Percent
Change
 

Total interest income

   $ 23,563     $ 22,474     $ 21,282     $ 21,084     $ 20,551     $ 67,319     $ 59,443       13.2

Total interest expense

     3,644       2,912       2,336       2,017       1,876       8,892       4,864       82.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     19,919       19,562       18,946       19,067       18,675       58,427       54,579       7.1

Provision for loan losses

     950       750       775       400       950       2,475       2,950       -16.1

Noninterest income

     6,478       6,306       6,010       6,051       6,058       18,794       18,000       4.4

Acquisition related costs

     0       0       25       88       270       25       436       -94.3

Other expense

     16,180       15,458       15,071       15,311       15,521       46,709       45,732       2.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     9,267       9,660       9,085       9,319       7,992       28,012       23,461       19.4

Income taxes

     1,183       1,587       1,359       4,084       2,009       4,129       5,985       -31.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 8,084     $ 8,073     $ 7,726     $ 5,235     $ 5,983     $ 23,883     $ 17,476       36.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average basic shares outstanding

     27,695       27,641       27,918       27,941       27,654       27,639       27,437    

Basic earnings per share

     0.29       0.29       0.28       0.19       0.22       0.86       0.64    

Diluted earnings per share

     0.29       0.29       0.28       0.19       0.22       0.85       0.64    

Cash dividends

     2,222       1,935       1,935       1,653       1,653       6,092       4,359    

Cash dividends per share

     0.08       0.07       0.07       0.06       0.06       0.22       0.16    

Performance Ratios

                

Net Interest Margin (Annualized)

     3.86     3.93     3.92     3.98     3.96     3.90     4.01  

Efficiency Ratio (Tax equivalent basis)

     58.70     57.31     57.98     59.13     59.93     58.00     59.85  

Return on Average Assets (Annualized)

     1.42     1.47     1.45     0.96     1.12     1.45     1.14  

Return on Average Equity (Annualized)

     12.80     13.28     13.03     8.60     10.15     13.00     10.41  

Dividends to Net Income

     27.49     23.97     25.05     31.58     27.63     25.51     24.94  

Other Performance Ratios (Non-GAAP)

                

Return on Average Tangible Assets

     1.46     1.50     1.46     0.99     1.15     1.47     1.16  

Return on Average Tangible Equity

     15.70     16.24     15.84     10.69     12.69     15.86     12.98  

Return on Average Tangible Equity excluding acquisition costs and deferred tax asset adjustments

     15.70     16.24     15.88     14.25     13.09     15.87     13.30  


Consolidated Statements of Financial Condition

 

     Sept. 30,
2018
     June 30,
2018
     March 31,
2018
     Dec. 31,
2017
     Sept. 30,
2017
 

Assets

              

Cash and cash equivalents

   $ 75,635      $ 76,623      $ 52,149      $ 57,614      $ 84,006  

Securities available for sale

     389,996        388,890        384,396        392,937        394,853  

Equity securities

     6,892        6,344        6,009        5,579        5,030  

Loans held for sale

     1,428        1,987        399        272        502  

Loans

     1,691,532        1,639,191        1,599,339        1,577,381        1,551,437  

Less allowance for loan losses

     13,377        12,764        12,550        12,315        12,104  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Loans

     1,678,155        1,626,427        1,586,789        1,565,066        1,539,333  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other assets

     140,572        137,668        137,775        137,601        138,301  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

   $ 2,292,678      $ 2,237,939      $ 2,167,517      $ 2,159,069      $ 2,162,025  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

              

Deposits

              

Noninterest-bearing

   $ 426,689      $ 420,991      $ 402,499      $ 412,346      $ 413,991  

Interest-bearing

     1,332,022        1,229,346        1,234,660        1,192,373        1,195,533  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total deposits

     1,758,711        1,650,337        1,637,159        1,604,719        1,609,524  

Other interest-bearing liabilities

     270,273        322,565        274,816        296,559        295,270  

Other liabilities

     14,905        17,527        14,302        15,717        19,348  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     2,043,889        1,990,429        1,926,277        1,916,995        1,924,142  

Stockholders’ Equity

     248,789        247,510        241,240        242,074        237,883  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 2,292,678      $ 2,237,939      $ 2,167,517      $ 2,159,069      $ 2,162,025  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Period-end shares outstanding

     27,777        27,641        27,641        27,544        27,544  

Book value per share

   $ 8.96      $ 8.95      $ 8.73      $ 8.79      $ 8.64  

Tangible book value per share (Non-GAAP)*

     7.36        7.34        7.10        7.14        6.98  

 

*

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)

     12.09     12.11     12.06     11.86     12.00

Total Risk Based Capital Ratio (a)

     12.84     12.97     12.94     12.73     12.86

Tier 1 Risk Based Capital Ratio (a)

     12.19     12.24     12.19     11.99     12.13

Tier 1 Leverage Ratio (a)

     9.75     9.81     9.68     9.50     9.70

Equity to Asset Ratio

     10.85     11.06     11.13     11.21     11.00

Tangible Common Equity Ratio

     9.09     9.25     9.24     9.31     9.08

Net Loans to Assets

     73.20     72.68     73.21     72.49     71.20

Loans to Deposits

     96.18     99.32     97.69     98.30     96.39

Asset Quality

          

Non-performing loans

   $ 9,222     $ 8,406     $ 7,893     $ 7,695     $ 6,900  

Other Real Estate Owned

     0       0       59       171       219  

Non-performing assets

     9,222       8,406       7,952       7,866       7,119  


Loans 30 – 89 days delinquent

     10,626       10,636       6,973       10,191       8,680  

Charged-off loans

     544       777       782       809       809  

Recoveries

     207       241       242       620       217  

Net Charge-offs

     337       536       540       189       592  

Annualized Net Charge-offs to

          

Average Net Loans Outstanding

     0.08     0.13     0.14     0.05     0.16

Allowance for Loan Losses to Total Loans

     0.79     0.78     0.78     0.78     0.78

Non-performing Loans to Total Loans

     0.55     0.51     0.49     0.49     0.44

Allowance to Non-performing Loans

     145.06     151.84     159.00     160.04     175.42

Non-performing Assets to Total Assets

     0.40     0.38     0.37     0.36     0.33

 

(a)

September 30, 2018 ratio is estimated

 

Reconciliation of Total Assets to Tangible Assets                                  For the Nine Months Ended  
     Sept. 30,
2018
     June 30,
2018
     March 31,
2018
     Dec. 31,
2017
     Sept. 30,
2017
     Sept. 30,
2018
     Sept. 30,
2017
 

Total Assets

   $ 2,292,678      $ 2,237,939      $ 2,167,517      $ 2,159,069      $ 2,162,025      $ 2,292,678      $ 2,162,025  

Less Goodwill and other intangibles

     44,305        44,661        45,015        45,369        45,755        44,305        45,755  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Assets

   $ 2,248,373      $ 2,193,278      $ 2,122,502      $ 2,113,700      $ 2,116,270      $ 2,248,373      $ 2,116,270  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Assets

     2,255,049        2,199,960        2,162,706        2,158,895        2,118,170        2,206,379        2,056,800  

Less average Goodwill and other intangibles

     44,541        44,893        45,248        45,622        45,263        44,891        44,986  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Tangible Assets

   $ 2,210,508      $ 2,155,067      $ 2,117,458      $ 2,113,273      $ 2,072,907      $ 2,161,488      $ 2,011,814  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity                    For the Nine Months
Ended
 
     Sept. 30,
2018
     June 30,
2018
     March 31,
2018
     Dec. 31,
2017
     Sept. 30,
2017
     Sept. 30,
2018
     Sept. 30,
2017
 

Stockholders’ Equity

   $ 248,789      $ 247,510      $ 241,240      $ 242,074      $ 237,883      $ 248,789      $ 237,883  

Less Goodwill and other intangibles

     44,305        44,661        45,015        45,369        45,755        44,305        45,755  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Common Equity

   $ 204,484      $ 202,849      $ 196,225      $ 196,705      $ 192,128      $ 204,484      $ 192,128  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Stockholders’ Equity

     250,503        243,792        240,387        241,554        233,843        245,691        224,496  

Less average Goodwill and other intangibles

     44,541        44,893        45,248        45,622        45,263        44,891        44,986  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Tangible Common Equity

   $ 205,962      $ 198,899      $ 195,139      $ 195,932      $ 188,580      $ 200,800      $ 179,510  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Reconciliation of Net Income, Excluding Acquisition Related Costs and Deferred Tax Asset Adjustments                      
     For the Three Months Ended      For the Nine Months
Ended
 
     Sept. 30,
2018
     June 30,
2018
     March 31,
2018
     Dec. 31,
2017
    Sept. 30,
2017
     Sept. 30,
2018
     Sept. 30,
2017
 

Net income

   $ 8,084      $ 8,073      $ 7,726      $ 5,235     $ 5,983      $ 23,883      $ 17,476  

Acquisition related costs – tax equated

     0        0        22        (48     190        22        436  

Deferred tax asset adjustments

     0        0        0        1,793       0        0        0  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net income – Adjusted

   $ 8,084      $ 8,073      $ 7,748      $ 6,980     $ 6,173      $ 23,905      $ 17,912  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Average shares outstanding

     27,695        27,641        27,918        27,941       27,654        27,639        27,654  

EPS excluding acquisition costs and deferred tax asset adjustments

   $ 0.29      $ 0.29      $ 0.28      $ 0.25     $ 0.22      $ 0.86      $ 0.65  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 


     For the Three Months Ended  
End of Period Loan Balances    Sept. 30,
2018
     June 30,
2018
     March 31,
2018
     Dec. 31,
2017
     Sept. 30,
2017
 

Commercial real estate

   $ 562,272      $ 523,417      $ 511,628      $ 513,707      $ 500,426  

Commercial

     233,188        232,672        231,498        220,441        218,946  

Residential real estate

     489,851        479,486        472,350        469,442        459,702  

Consumer

     220,826        219,138        210,088        207,851        213,918  

Agricultural loans

     182,038        181,173        170,725        163,081        155,336  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total, excluding net deferred loan costs

   $ 1,688,175      $ 1,635,886      $ 1,596,289      $ 1,574,522      $ 1,548,328  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     For the Three Months Ended  
Noninterest Income    Sept. 30,
2018
    June 30,
2018
     March 31,
2018
     Dec. 31,
2017
     Sept. 30,
2017
 

Service charges on deposit accounts

   $ 1,151     $ 985      $ 1,003      $ 1,060      $ 1,077  

Bank owned life insurance income

     219       219        222        246        193  

Trust fees

     1,827       1,740        1,807        1,622        1,608  

Insurance agency commissions

     567       713        699        530        531  

Security gains

     (34     27        18        5        0  

Retirement plan consulting fees

     470       465        379        465        480  

Investment commissions

     273       315        256        260        184  

Net gains on sale of loans

     804       606        487        810        758  

Debit card and EFT fees

     814       870        806        830        770  

Other operating income

     387       366        333        223        457  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Noninterest Income

   $ 6,478     $ 6,306      $ 6,010      $ 6,051      $ 6,058  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 
             
     For the Three Months Ended  
Noninterest Expense    Sept. 30,
2018
    June 30,
2018
     March 31,
2018
     Dec. 31,
2017
     Sept. 30,
2017
 

Salaries and employee benefits

   $ 8,966     $ 8,828      $ 8,738      $ 8,697      $ 8,922  

Occupancy and equipment

     1,597       1,611        1,704        1,528        1,546  

State and local taxes

     475       479        459        386        436  

Professional fees

     687       737        698        643        726  

Merger related costs

     0       0        25        88        270  

Advertising

     489       379        275        561        405  

FDIC insurance

     218       225        222        165        235  

Intangible amortization

     354       355        354        386        379  

Core processing charges

     778       794        739        806        702  

Telephone and data

     298       238        237        241        249  

Other operating expenses

     2,318       1,812        1,645        1,898        1,921  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total Noninterest Expense

   $ 16,180     $ 15,458      $ 15,096      $ 15,399      $ 15,791  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 


Average Balance Sheets and Related Yields and Rates

 

(Dollar Amounts in Thousands)

 

 
     Three Months Ended
September 30, 2018
    Three Months Ended
September 30, 2017
 
     AVERAGE
BALANCE
     INTEREST (1)      RATE (1)     AVERAGE
BALANCE
     INTEREST (1)      RATE (1)  

EARNING ASSETS

                

Loans (2)

   $ 1,650,128      $ 20,623        4.96   $ 1,517,589      $ 17,952        4.69

Taxable securities

     200,765        1,226        2.42       215,490        1,271        2.34  

Tax-exempt securities (2)

     198,683        1,842        3.68       173,113        1,887        4.32  

Equity securities

     11,594        167        5.71       10,474        136        5.15  

Federal funds sold and other

     33,936        178        2.08       38,815        126        1.29  
  

 

 

    

 

 

      

 

 

    

 

 

    

Total earning assets

     2,095,106        24,036        4.55       1,955,481        21,372        4.34  

Nonearning assets

     159,943             162,689        
  

 

 

         

 

 

       

Total assets

   $ 2,255,049           $ 2,118,170        
  

 

 

         

 

 

       

INTEREST-BEARING LIABILITIES

                

Time deposits

   $ 293,719      $ 1,091        1.47   $ 242,654      $ 680        1.11

Savings deposits

     463,859        293        0.25       525,919        189        0.14  

Demand deposits

     523,433        858        0.65       406,123        313        0.31  

Short term borrowings

     278,884        1,353        1.92       280,490        644        0.91  

Long term borrowings

     6,344        49        3.06       9,333        50        2.13  
  

 

 

    

 

 

      

 

 

    

 

 

    

Total interest-bearing liabilities

   $ 1,566,239        3,644        0.92     $ 1,464,519        1,876        0.51  
          

 

 

       

NONINTEREST-BEARING LIABILITIES

                

AND STOCKHOLDERS’ EQUITY

                

Demand deposits

     424,936             405,959        

Other liabilities

     13,371             13,849        

Stockholders’ equity

     250,503             233,843        
  

 

 

         

 

 

       

TOTAL LIABILITIES AND

                

STOCKHOLDERS’ EQUITY

   $ 2,255,049           $ 2,118,170        
  

 

 

    

 

 

      

 

 

    

 

 

    

Net interest income and interest rate spread

      $ 20,392        3.63      $ 19,496        3.83
     

 

 

    

 

 

      

 

 

    

 

 

 

Net interest margin

           3.86           3.96
        

 

 

         

 

 

 

 

(1)

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

 

(2)

For 2018, adjustments of $92 thousand and $381 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2017, adjustments of $166 thousand and $655 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% for 2018 and 35% for 2017, less disallowances.


     Nine Months Ended
September 30, 2018
    Nine Months Ended
September 30, 2017
 
     AVERAGE
BALANCE
     INTEREST (1)      RATE (1)     AVERAGE
BALANCE
     INTEREST (1)      RATE (1)  

EARNING ASSETS

                

Loans (2)

   $ 1,607,753      $ 58,768        4.89   $ 1,475,807      $ 52,162        4.73

Taxable securities

     203,213        3,687        2.43       214,552        3,654        2.28  

Tax-exempt securities

     191,627        5,259        3.67       163,539        5,317        4.35  

Equity securities (2)

     11,234        467        5.56       10,207        374        4.90  

Federal funds sold and other

     35,499        490        1.85       35,148        271        1.03  
  

 

 

    

 

 

      

 

 

    

 

 

    

Total earning assets

     2,049,326        68,671        4.48       1,899,253        61,778        4.35  

Nonearning assets

     157,053             157,547        

Total assets

   $ 2,206,379           $ 2,056,800        
  

 

 

         

 

 

       

INTEREST-BEARING LIABILITIES

                

Time deposits

   $ 283,018      $ 2,861        1.35   $ 237,695      $ 1,833        1.03

Savings deposits

     474,474        731        0.21       524,154        542        0.14  

Demand deposits

     481,709        1,784        0.50       396,791        838        0.28  

Short term borrowings

     286,689        3,374        1.57       267,217        1,472        0.74  

Long term borrowings

     6,626        142        2.87       10,432        179        2.29  
  

 

 

    

 

 

      

 

 

    

 

 

    

Total interest-bearing liabilities

   $ 1,532,516        8,892        0.78     $ 1,436,289        4,864        0.45  

NONINTEREST-BEARING LIABILITIES

                

AND STOCKHOLDERS’ EQUITY

                

Demand deposits

   $ 414,450           $ 382,963        

Other liabilities

     13,722             13,052        

Stockholders’ equity

     245,691             224,496        

TOTAL LIABILITIES AND

                

STOCKHOLDERS’ EQUITY

   $ 2,206,379           $ 2,056,800        
  

 

 

         

 

 

       

Net interest income and interest rate spread

      $ 59,779        3.70      $ 56,914        3.90
     

 

 

    

 

 

      

 

 

    

 

 

 

Net interest margin

           3.90           4.01
        

 

 

         

 

 

 

 

(1)

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

 

(2)

For 2018, adjustments of $265 thousand and $1.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2017, adjustments of $491 thousand and $1.8 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% for 2018 and 35% for 2017, less disallowances.

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