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American National Bankshares Reports First Quarter Earnings

DANVILLE, Va., April 23, 2020 (GLOBE NEWSWIRE) -- American National Bankshares Inc. (AMNB) (“American National” or the “Company”) today reported first quarter 2020 earnings of $8.5 million, or $0.77 per diluted common share. Those results compare to net income of $6.0 million, or $0.69 per diluted common share, during the same quarter in the prior year, and net income of $7.4 million, or $0.67 per diluted common share, recognized for the fourth quarter of 2019.

President and Chief Executive Officer Jeffrey V. Haley commented, “We are certainly pleased with the first quarter results, but have now entered unprecedented times in our nation with the onset of a global pandemic and resulting economic impacts. Our priorities have shifted somewhat to maintaining our high level of care for our customers, communities and our employees during this challenging time.”

“We have taken comprehensive steps to help each of these constituencies. For our customers, we’ve suspended foreclosures and provided payment deferrals, among other actions. Starting in March and continuing into last week, we have provided payment deferral assistance to over 450 customers with approximately $200 million in loan balances outstanding.  In addition, we are pleased to be one of approximately 5,000 financial institutions who successfully implemented the SBA’s Paycheck Protection Program, in order to assist our small business customers. For our employees, we’ve enabled approximately 65% of our workforce to work remotely. We have made certain accommodations to employees whose roles require them to come into the office, and have taken significant actions to help ensure their safety. We continue to provide financial support to our communities and maintain banking hours at branches throughout our footprint.

“I’m incredibly proud of the efforts our employees are making across American National to support our customers and each other. We will come out of this together and stronger.”  

First quarter 2020 highlights include:

  • Earnings produced a return on average assets of 1.37% for the first quarter of 2020, compared to 1.20% in the previous quarter and 1.29% for the same quarter in the prior year.
     
  • Net loans receivable increased $24.1 million for the quarter, or 5.3% annualized.
     
  • Net interest margin was 3.52% for the quarter, down from 3.62% in the fourth quarter of 2019 and up from 3.50% in the same quarter of the prior year (non-GAAP).   
     
  • Noninterest revenues increased $629 thousand, or 16.3%, when compared to the previous quarter, and increased $1.0 million, or 30.3%, to $4.5 million from $3.5 million in the same quarter in the prior year.
  • The first quarter provision for loan losses totaled $953 thousand, which compares to a provision of $462 thousand for the previous quarter, and $16 thousand in the same quarter in the prior year.
     
  • Nonperforming assets as a percentage of total assets remained level at 0.16% at March 31, 2020, compared with 0.15% at December 31, 2019, and up from 0.10% at March 31, 2019.
     
  • Annualized net charge-offs were 0.01% for the first quarter of 2020, compared to zero for the corresponding quarter in the prior year and down from 0.02% for the fourth quarter of 2019.

NET INTEREST INCOME

Net interest income for the first quarter of 2020 was $20.0 million, a decrease of $529 thousand, or 2.59%, from the prior quarter and an increase of $4.9 million, or 32.2%, from the first quarter of 2019. The year-over-year growth was positively impacted by higher earning asset balances and overall higher loan yields in large part associated with the Hometown Bankshares (“HomeTown”) acquisition which was consummated on April 1, 2019. The quarter-over-quarter decrease in net interest income was principally the result of lower yields on assets associated with the recent decreases in short term rates and market pricing pressure in the commercial portfolio offset in part by a decrease in funding costs. The fully taxable equivalent (“FTE”) net interest margin for the quarter was 3.52%, down from 3.62% in the prior quarter and up from 3.50% in the same period a year ago (non-GAAP).

The Company’s FTE net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2020, net accretion related to acquisition accounting amounted to $957 thousand, compared to $255 thousand for the same period in 2019 and $1.1 million in the prior quarter. Estimated remaining net accretion from acquisitions for the periods indicated is as follows (dollars in thousands):

For the remaining nine months of 2020 (estimated) $ 1,712
For the years ending (estimated):  
  2021   1,769
  2022   1,144
  2023   695
  2024   375
  2025   276
Thereafter   1,165

ASSET QUALITY/LOAN LOSS PROVISION

Nonperforming assets (“NPAs”) totaled $4.0 million as of March 31, 2020, up from $3.6 million at December 31, 2019 and up from $2.0 million at March 31, 2019. NPAs as a percentage of total assets were 0.16% at March 31, 2020, which compares to 0.15% at December 31, 2019 and 0.10% at March 31, 2019.

The provision for loan losses was $953 thousand for the first quarter of 2020, as compared to $462 thousand for the previous quarter and $16 thousand for the same period in the previous year. The increase over the prior periods is a direct result of early stage declines in economic factors associated with increases in unemployment claims and a decrease in retail sales in the wake of the COVID-19 Pandemic. It also reflects $197 thousand in impairments recorded during the quarter, compared to $218 thousand in the prior quarter and $15 thousand in the same quarter of prior year. The allowance for loan losses was $14.1 million at March 31, 2020, compared to $13.2 million at December 31, 2019 and $12.8 million at March 31, 2019. Annualized net charge-offs as a percentage of average loans outstanding was 0.01% for the first quarter of 2020, compared to 0.02% in the previous quarter and none for the same period in the prior year. The allowance as a percentage of loans held for investment was 0.76% at March 31, 2020, compared to 0.72% at December 31, 2019 and 0.94% at March 31, 2019.

American National continues to use an incurred loss model for its allowance methodology and has not implemented the new current expected credit losses standard (CECL). CECL incorporates an estimation of expected losses over the life of the loans instead of the current model which is an incurred loss model. The CECL implementation guidance was amended in October 2019 allowing for the deferral of CECL for smaller reporting companies.  American National qualified under this amendment and elected to defer the implementation until January 2023. 

DISASTER ASSISTANCE AND PAYCHECK PROTECTION PROGRAMS

American National has implemented a Disaster Assistance Program (DAP) and is participating in the Paycheck Protection Program (“PPP”) initiated by the U.S. Treasury on April 3, 2020. At March 31, 2020, American National has provided interest only and payment deferrals to over 450 customers on loan balances of approximately $200 million. With respect to the PPP program, American National has to date processed with U.S. Small Business Administration approval 1,321 applications for loans in excess of $228 million, representing 96% of applications received prior to the Treasury initial funding allocation of $349 billion reaching capacity and all of which occurred subsequent to March 31, 2020. From a funding perspective, the Company expects to utilize core and wholesale funding for liquidity needs related to the DAP loan program, and both the Federal Reserve discount window and newly created Payroll Protection Program Lending Facility for the PPP program.

NONINTEREST INCOME

Noninterest income increased $629 thousand to $4.5 million for the quarter ended March 31, 2020 from $3.9 million in the prior quarter and increased $1.0 million from the same period in the prior year. The first quarter of 2020 benefitted from gains on the sale of securities of $814 thousand, partially offset by a $188 thousand decrease in mortgage banking income from the prior quarter. The improvement from the prior quarter was also attributable to losses of $309 thousand in the fourth quarter of 2019 related to the write-down of premises and equipment in connection with an ATM replacement initiative. Increases in service charges on deposits, other fees and commissions, mortgage banking fees and securities gains primarily accounted for the increase over the same period in the prior year.

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2020 amounted to $13.3 million, down $1.7 million, or 11.3%, when compared to the $15.0 million for the previous quarter and up $2.4 million, or 22.0%, when compared to the same period in the previous year. The change as compared to the previous quarter was driven by reduced corporate incentive and stock compensation expense in the first quarter of 2020 while the fourth quarter of 2019 reflected merger costs of $460 thousand, incentive compensation costs associated with establishing the Raleigh, North Carolina loan production office, and additional other professional fees and data processing costs. The increase from the same period in the prior year is primarily related to the acquisition of HomeTown.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2020 was 15.7%, compared to 15.6% for the prior quarter and 20.7% for the same period in the prior year. The decreased rates for the quarters ended March 31, 2020 and December 31, 2019 compared to the rates for the three months ended March 31, 2019 are a result of tax benefits recognized during both periods. As a result of the enactment of the CARES Act in the first quarter of 2020, the Company recognized a tax benefit for the net operating loss (‘NOL’) five-year carryback provision for the NOL acquired in the HomeTown merger.  An income tax benefit was realized for the difference between the current corporate income tax rate of 21% and the higher federal corporate tax rate of 35% prior to 2018. The lower effective tax rate in the fourth quarter of 2019 was primarily due to a change in the future effective rate assumption related to state apportionments which was prompted by the HomeTown acquisition.

ABOUT AMERICAN NATIONAL

American National is a multi-state bank holding company with total assets of approximately $2.5 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices. American National Bank also manages an additional $728 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about American National and American National Bank is available on American National's website at www.amnb.com.

NON-GAAP FINANCIAL MEASURES

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). American National’s management uses these non-GAAP financial measures in its analysis of American National’s performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of American National’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. For a reconciliation of non-GAAP financial measures, see “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

FORWARD-LOOKING STATEMENTS

Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current expectations and involve a number of assumptions. American National intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. American National’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the operations and future prospects of American National include but are not limited to: (1) the impacts of the ongoing COVID-19 pandemic; (2) expected revenue synergies and cost savings from the recently completed merger with HomeTown may not be fully realized or realized within the expected timeframe; (3) changes in interest rates, general economic conditions, legislation and regulation, and monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury, Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System; (4) the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows, competition, and demand for financial services in American National’s market areas; (5) the implementation of new technologies, and the ability to develop and maintain secure and reliable electronic systems; (6) accounting principles, policies, and guidelines; and (7) other risk factors detailed from time to time in filings made by American National with the Securities and Exchange Commission. American National undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
     Jeffrey W. Farrar
     Executive Vice President, COO & CFO
     (434)773-2274
     farrarj@amnb.com


American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
         
    March 31
      2020       2019  
Assets        
Cash and due from banks   $ 39,602     $ 28,912  
Interest-bearing deposits in other banks     69,968       41,949  
         
Equity securities, at fair value     -       2,069  
Securities available for sale, at fair value     342,769       324,289  
Restricted stock, at cost     8,682       5,299  
Loans held for sale     2,666       1,252  
         
Loans, net of unearned income     1,854,928       1,360,063  
  Less allowance for loan losses     (14,065 )     (12,806 )
  Net Loans     1,840,863       1,347,257  
         
Premises and equipment, net     39,632       26,663  
Other real estate owned, net     984       646  
Goodwill     85,048       43,872  
Core deposit intangibles, net     7,301       871  
Bank owned life insurance     27,970       19,047  
Accrued interest receivable and other assets     29,580       26,278  
         
  Total assets   $ 2,495,065     $ 1,868,404  
         
         
Liabilities        
  Demand deposits -- noninterest-bearing   $ 567,772     $ 425,579  
  Demand deposits -- interest-bearing     343,291       242,802  
  Money market deposits     524,234       379,668  
  Savings deposits     181,564       135,289  
  Time deposits     453,806       376,452  
  Total deposits     2,070,667       1,559,790  
         
  Customer repurchase agreements     42,114       35,945  
  Subordinated debt     7,513       -  
  Junior subordinated debt     28,054       27,953  
  Accrued interest payable and other liabilities     23,424       15,243  
  Total liabilities     2,171,772       1,638,931  
         
Shareholders' equity        
  Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding     -       -  
  Common stock, $1 par, 20,000,000 shares authorized, 10,957,502 shares outstanding at March 31, 2020 and 8,756,569 shares outstanding at March 31, 2019     10,898       8,705  
  Capital in excess of par value     153,817       78,738  
  Retained earnings     157,064       145,351  
  Accumulated other comprehensive income (loss), net     1,514       (3,321 )
  Total shareholders' equity     323,293       229,473  
         
  Total liabilities and shareholders' equity   $ 2,495,065     $ 1,868,404  
         


American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
         
    Three Months Ended
    March 31
      2020       2019
Interest and Dividend Income:        
  Interest and fees on loans   $ 21,321     $ 15,638
  Interest and dividends on securities:        
  Taxable     2,037       1,821
  Tax-exempt     112       287
  Dividends     132       84
  Other interest income     264       266
  Total interest and dividend income     23,866       18,096
         
Interest Expense:        
  Interest on deposits     3,312       2,472
  Interest on short-term borrowings     129       172
  Interest on subordinated debt     122       -
  Interest on junior subordinated debt     384       384
  Total interest expense     3,947       3,028
         
Net Interest Income     19,919       15,068
  Provision for loan losses     953       16
         
  Net Interest Income After Provision for Loan Losses     18,966       15,052
         
Noninterest Income:        
  Trust fees     1,012       914
  Service charges on deposit accounts     721       594
  Other fees and commissions     941       708
  Mortgage banking income     549       406
  Securities gains, net     814       323
  Brokerage fees     211       147
  Income from Small Business Investment Companies   55       168
  Losses on premises and equipment, net     (82 )     -
  Other     274       191
  Total noninterest income     4,495       3,451
         
Noninterest Expense:        
  Salaries     6,059       4,664
  Employee benefits     1,301       1,230
  Occupancy and equipment     1,366       1,084
  FDIC assessment     95       125
  Bank franchise tax     426       290
  Core deposit intangible amortization     427       55
  Data processing     763       532
  Software     356       324
  Other real estate owned, net     (9 )     13
  Merger related expenses     -       451
  Other     2,550       2,161
  Total noninterest expense     13,334       10,929
         
 Income Before Income Taxes     10,127       7,574
 Income Taxes     1,585       1,571
Net Income   $ 8,542     $ 6,003
         
Net Income Per Common Share:        
  Basic   $ 0.77     $ 0.69
  Diluted   $ 0.77     $ 0.69
Weighted Average Common Shares Outstanding:      
  Basic     11,025,185       8,745,174
  Diluted     11,031,310       8,745,723
         


American National Bankshares Inc.            
Financial Highlights            
Unaudited                
                   
(Dollars in thousands, except per share data) 
        1st Qtr   4th Qtr   1st Qtr  
         2020     2019     2019   
EARNINGS              
  Interest income $ 23,866     $ 24,590     $ 18,096    
  Interest expense   3,947       4,142       3,028    
  Net interest income   19,919       20,448       15,068    
  Provision for loan losses   953       462       16    
  Noninterest income   4,495       3,866       3,451    
  Noninterest expense   13,334       15,037       10,929    
  Income taxes     1,585       1,374       1,571    
  Net income     8,542       7,441       6,003    
                   
PER COMMON SHARE            
  Net income per share - basic $ 0.77     $ 0.67     $ 0.69    
  Net income per share - diluted   0.77       0.67       0.69    
  Cash dividends paid   0.27       0.27       0.25    
  Book value per share   29.50       28.93       26.21    
  Book value per share - tangible (a)   21.08       20.64       21.10    
  Closing market price   23.90       39.57       34.92    
                   
FINANCIAL RATIOS            
  Return on average assets   1.37   %   1.20   %   1.29   %
  Return on average equity   10.56       9.31       10.69    
  Return on average tangible equity (a)   15.32       13.71       13.44    
  Average equity to average assets   12.99       12.88       12.06    
  Tangible equity to tangible assets (a)   9.61       9.57       10.13    
  Net interest margin, taxable equivalent   3.52       3.62       3.50    
  Efficiency ratio (a)   54.46       57.24       56.95    
  Effective tax rate   15.65       15.59       20.74    
                   
PERIOD-END BALANCES            
  Securities   $ 351,451     $ 387,825     $ 331,657    
  Loans held for sale   2,666       2,027       1,252    
  Loans, net     1,854,928       1,830,815       1,360,063    
  Goodwill and other intangibles   92,349       91,730       44,743    
  Assets       2,495,065       2,478,550       1,868,404    
  Assets - tangible (a)   2,402,716       2,386,820       1,823,661    
  Deposits     2,070,667       2,060,547       1,559,790    
  Customer repurchase agreements   42,114       40,475       35,945    
  Long-term borrowings   35,567       35,546       27,953    
  Shareholders' equity   323,293       320,258       229,473    
  Shareholders' equity - tangible (a)   230,944       228,528       184,730    
                   
AVERAGE BALANCES            
  Securities (b)   $ 369,730     $ 347,502     $ 343,834    
  Loans held for sale   3,156       4,991       1,830    
  Loans, net     1,829,125       1,810,744       1,352,521    
  Interest-earning assets   2,274,920       2,264,687       1,736,887    
  Goodwill and other intangibles   91,738       92,607       44,778    
  Assets       2,491,591       2,482,502       1,863,212    
  Assets - tangible (a)   2,399,853       2,389,895       1,818,434    
  Interest-bearing deposits   1,495,565       1,466,116       1,131,604    
  Deposits     2,069,927       2,066,435       1,551,413    
  Customer repurchase agreements   41,519       38,742       42,705    
  Other short-term borrowings   3       -       61    
  Long-term borrowings   35,554       35,537       27,937    
  Shareholders' equity   323,573       319,851       224,677    
  Shareholders' equity - tangible (a)   231,835       227,244       179,899    
                   
American National Bankshares Inc.            
Financial Highlights            
Unaudited                
                   
 (Dollars in thousands, except per share data) 
        1st Qtr   4th Qtr   1st Qtr  
         2020    2019     2019  
CAPITAL                
  Weighted average shares outstanding - basic         11,025,185       11,094,346       8,745,174    
  Weighted average shares outstanding - diluted         11,031,310       11,103,905       8,745,723    
                   
ALLOWANCE FOR LOAN LOSSES            
  Beginning balance $ 13,152     $ 12,758     $ 12,805    
  Provision for loan losses   953       462       16    
  Charge-offs     (105 )     (144 )     (69 )  
  Recoveries     65       76       54    
  Ending balance $ 14,065     $ 13,152     $ 12,806    
                   
LOANS                
  Construction and land development $ 141,154     $ 137,920     $ 93,759    
  Commercial real estate   953,363       899,199       659,133    
  Residential real estate   301,284       324,315       212,665    
  Home equity     118,030       119,423       99,979    
  Commercial and industrial   331,507       339,077       289,301    
  Consumer     9,590       10,881       5,226    
  Total     $ 1,854,928     $ 1,830,815     $ 1,360,063    
                   
NONPERFORMING ASSETS AT PERIOD-END          
  Nonperforming loans:            
  90 days past due and accruing $ 459     $ 361     $ 197    
  Nonaccrual     2,579       1,944       1,111    
  Other real estate owned   984       1,308       646    
  Nonperforming assets $ 4,022     $ 3,613     $ 1,954    
                   
ASSET QUALITY RATIOS            
  Allowance for loan losses to total loans   0.76   %   0.72   %   0.94   %
  Allowance for loan losses to nonperforming loans   462.97       570.59       979.05    
  Nonperforming assets to total assets   0.16       0.15       0.10    
  Nonperforming loans to total loans   0.16       0.13       0.10    
  Annualized net charge-offs to average loans   0.01       0.02       0.00    
                   
                   
OTHER DATA              
  Fiduciary assets at period-end (c) (d) $ 492,850     $ 560,776     $ 533,063    
  Retail brokerage assets at period-end (c) (d)       $ 235,359     $ 317,262     $ 303,045    
  Number full-time equivalent employees (e)         355       355       299    
  Number of full service offices   26       26       24    
  Number of loan production offices   1       1       -    
  Number of ATMs   38       38       33    
                   
                   
Notes:                
                   
  (a) - This financial measure is not calculated in accordance with GAAP. For a reconciliation of non-GAAP financial measures, see "Reconciliation of Non-GAAP Financial Measures" at the end of this release. 
  (b) - Average does not include unrealized gains and losses.
  (c) - Market value.
  (d) - Assets are not owned by American National and are not reflected in the consolidated balance sheet.
  (e) - Average for quarter.            
                   


Net Interest Income Analysis
For the Three Months Ended March 31, 2020 and 2019
(Dollars in thousands)
Unaudited
                               
                Interest          
        Average Balance   Income/Expense (a)   Yield/Rate  
                               
         2020    2019    2020    2019   2020   2019  
Loans:                          
Commercial $ 332,920   $ 265,578   $ 3,543   $ 2,891   4.28 % 4.41 %
Real estate   1,489,319     1,083,800     17,663     12,716   4.74   4.69  
Consumer   10,042     4,973     157     75   6.29   6.12  
Total loans (b)   1,832,281     1,354,351     21,363     15,682   4.67   4.64  
                         
Securities:                        
U.S. Treasury   9,049     -     36     -   1.59   -  
Federal agencies & GSEs   103,311     139,465     576     850   2.23   2.44  
Mortgage-backed & CMOs   197,774     111,701     1,144     693   2.31   2.48  
State and municipal   40,825     78,597     288     538   2.82   2.74  
Other   18,771     14,071     264     178   5.63   5.06  
Total securities   369,730     343,834     2,308     2,259   2.50   2.63  
                               
Deposits in other banks   72,909     38,702     264     266   1.46   2.79  
                               
Total interest-earning assets   2,274,920     1,736,887     23,935     18,207   4.21   4.20  
                               
Non-earning assets   216,671     126,325                  
                               
Total assets $ 2,491,591   $ 1,863,212                  
                               
Deposits:                        
Demand $ 331,357   $ 238,430     123     14   0.15   0.02  
Money market   515,339     395,704     1,188     1,153   0.93   1.18  
Savings   178,896     134,060     53     10   0.12   0.03  
Time    469,973     363,410     1,948     1,295   1.67   1.45  
Total deposits   1,495,565     1,131,604     3,312     2,472   0.89   0.89  
                               
Customer repurchase agreements    41,519     42,705     129     171   1.25   1.62  
Other short-term borrowings   3     61     -     1   1.01   6.56  
Long-term borrowings   35,554     27,937     506     384   5.69   5.50  
Total interest-bearing liabilities   1,572,641     1,202,307     3,947     3,028   1.01   1.02  
                               
Noninterest bearing demand deposits    574,362     419,809                  
Other liabilities   21,015     16,419                  
Shareholders' equity   323,573     224,677                  
Total liabilities and shareholders' equity $ 2,491,591   $ 1,863,212                  
                               
Interest rate spread                 3.20 % 3.18 %
Net interest margin                 3.52 % 3.50 %
                               
Net interest income (taxable equivalent basis)             19,988     15,179          
Less: Taxable equivalent adjustment (c)             69     111          
Net interest income         $ 19,919   $ 15,068          
                               
                               
Notes:                         
                               
  (a) - Interest income includes net accretion/amortization of acquired loan fair value adjustments and the net accretion/amortization of deferred loan fees and costs.  
  (b) - Nonaccrual loans are included in the average balances.  
  (c) - A tax rate of 21% was used in adjusting interest on tax-exempt assets to a fully taxable equivalent basis.  


American National Bankshares Inc. 
Reconciliation of Non-GAAP Financial Measures 
Unaudited 
                   
(Dollars in thousands, except per share data) 
        1st Qtr   4th Qtr   1st Qtr  
         2020    2019    2019  
EFFICIENCY RATIO            
  Noninterest expense $ 13,334     $ 15,037     $ 10,929    
  Add/subtract: gain/loss on sale of OREO   27       (3 )     2    
  Subtract: core deposit intangible amortization         (427 )     (437 )     (55 )  
  Subtract: merger related expenses   -       (460 )     (451 )  
        $ 12,934     $ 14,137     $ 10,425    
                   
  Net interest income $ 19,919     $ 20,448     $ 15,068    
  Tax equivalent adjustment   69       76       111    
  Noninterest income   4,495       3,866       3,451    
  Subtract: gain on securities   (814 )     (32 )     (323 )  
  Add: loss on fixed assets   82       338       -    
        $ 23,751     $ 24,696     $ 18,307    
                   
  Efficiency ratio     54.46   %   57.24   %   56.95   %
                   
TAX EQUIVALENT NET INTEREST INCOME          
  Non-GAAP measures:            
  Interest income - loans $ 21,363     $ 21,993     $ 15,682    
  Interest income - investments and other   2,572       2,673       2,525    
  Interest expense - deposits   (3,312 )     (3,496 )     (2,472 )  
  Interest expense - customer repurchase agreements     (129 )     (134 )     (171 )  
  Interest expense - other short-term borrowings         -       -       (1 )  
  Interest expense - long-term borrowings   (506 )     (512 )     (384 )  
  Total net interest income $ 19,988     $ 20,524     $ 15,179    
  Less non-GAAP measures:            
  Tax benefit on nontaxable interest - loans         (42 )     (46 )     (44 )  
  Tax benefit on nontaxable interest - securities         (27 )     (30 )     (67 )  
  GAAP measures $ 19,919     $ 20,448     $ 15,068    
                   
                   
RETURN ON AVERAGE TANGIBLE EQUITY          
  Return on average equity (GAAP basis)   10.56   %   9.31   %   10.69   %
  Impact of excluding average goodwill and other intangibles   4.76       4.40       2.75    
  Return on average tangible equity (non-GAAP)     15.32   %   13.71   %   13.44   %
                   
TANGIBLE EQUITY TO TANGIBLE ASSETS          
  Equity to assets ratio (GAAP basis)   12.96   %   12.92   %   12.28   %
  Impact of excluding goodwill and other intangibles   3.35       3.35       2.15    
  Tangible equity to tangible assets ratio (non-GAAP)     9.61   %   9.57   %   10.13   %
                   
TANGIBLE BOOK VALUE            
  Book value per share (GAAP basis) $ 29.50     $ 28.93     $ 26.21    
  Impact of excluding goodwill and other intangibles   8.42       8.29       5.11    
  Tangible book value per share (non-GAAP)   $ 21.08     $ 20.64     $ 21.10