Bar Harbor Bankshares Reports Fourth Quarter Results; Declares Dividend

BAR HARBOR, ME / ACCESSWIRE / January 20, 2022 /Bar Harbor Bankshares (NYSE American:BHB) reported fourth quarter 2021 net income of $9.8 million or $0.65 per diluted share, up from $8.6 million or $0.58 per diluted share in the same quarter of 2020. Core earnings per share (non-GAAP) in the fourth quarter of 2021 was $0.68 compared to $0.62 per share for the same period of 2020.

FOURTH QUARTER HIGHLIGHTS (ratios compared to the fourth quarter 2020)

• 1.02% return on assets or 1.07% on a core basis (non-GAAP)

• 13% growth in core pre-tax, pre-provision net revenue, excluding Paycheck Protection Program (PPP) loans

• 13% annualized commercial loan growth, excluding PPP loans

• 13% annualized core deposit growth

• 0.27% non-performing asset ratio to total assets, compared to 0.33%

President and Chief Executive Officer, Curtis C. Simard stated, "Once again our team is proud to deliver strong results, reporting a 10% increase in core earnings per share in the fourth quarter 2021 over the prior year's quarter. Throughout 2021 we maintained an annualized core return on assets of over 1% and a core return on tangible common equity of over 13% in each quarter. This level of performance reflects the progress toward our strategic objectives to reduce funding costs, increase fee-based revenues and grow commercial loans while maintaining exceptional credit quality. We also grew tangible book value per share, which is up 2% from the prior quarter and 6% over the prior year."

"Net interest margin (NIM) on a GAAP basis was 2.79% for the fourth quarter 2021 compared with 3.02% in the same quarter of 2020. Excluding the effects of PPP fee acceleration, excess cash, and one-time items, our normalized NIM increased to 2.99% in 2021 from 2.94% in the fourth quarter of 2020, and is flat with the third quarter of 2021. At year-end 2021, we had about $200 thousand of remaining PPP deferred fees which will be amortized to the margin in 2022 as we have worked closely with our customers to receive PPP loan forgiveness. The stabilization and modest expansion in normalized NIM is due to the continued growth in low-interest bearing deposits in 2021 and several delever and security remix strategies that were executed during the past two years. Our cost of interest-bearing liabilities has steadily dropped to 41 basis points from 77 basis points in the fourth quarter 2020."

"In December 2021, we prepaid $70 million of FHLB borrowings and sold $19 million of securities to offset prepayment penalties, which were replaced with relatively short-lived securities with an average duration of approximately 4 years. The net result of the transactions is expected to add five basis points to NIM and $0.02 to core earnings per share in the first quarter 2022."

Mr. Simard continued, "Looking at yields in 2021, income from loans and securities have both been affected by acceleration of discounts and premiums due to prepayment activity. Specifically, while our yield on commercial real estate loans was 3.40% for the fourth quarter 2021 excluding one-time adjustments, was 3.50% which is consistent with the third quarter 2021. The quarterly contractual rates present a better look at repricing activity and reflect a more linear and flatter curve in the second half of 2021. As we think about 2022, we view this as a positive indicator along with our well-positioned, asset-sensitive balance sheet should the Federal Reserve Bank increase rates."

"On the funding side, core deposits increased 13% during the quarter as new accounts were established from new relationships. Wholesale funding has decreased to 4% of total funding, down from 18% at year-end 2020. Core deposit reliance continues to expand, funding our growth with a much more stabilized cost if rates do go up. At year-end 2021, $114 million of wholesale funding remains, which represent longer durations or have associated hedges."

Mr. Simard further stated, "Wealth management and customer service fees increased 18% from the fourth quarter 2020, given a 13% increase in assets under management and our significant increase in core deposits. Our Wealth Management division continues to deliver a strong performance from both a customer and shareholder perspective. We continue to focus on profitability and fee-based revenue remains a priority. The growth seen during this past year has contributed to the expansion in our key performance metrics, while further enhancing the diversity and strength of our revenue streams. Mortgage banking income in the fourth quarter 2021 benefited from our secondary market loan sales, which also accounts for the decrease in residential loans as we selectively moved production between on-balance sheet and held for sale."

"Growth in commercial real estate loans for the quarter was driven largely by existing customers. These are proven operators and long-time customers of the Bank. Similarly, the growth in commercial and industrial loans of 11%, excluding PPP, came from existing customers and represented a variety of industries. As we look forward, the pipelines remain robust and we see the momentum continuing into the first quarter."

"Credit metrics remained strong and stable in the fourth quarter. The modest increase in provision in the fourth quarter is largely due to stabilizing economic forecasts along with slight increases to qualitative adjustments on certain loan categories, offset by $144 thousand of net recoveries for the quarter. Non-performing loans continue to decline across all categories on a quarterly and year-over-year basis. In the quarter, we also saw a noteworthy reduction of criticized loans, down to 3% from 4% at the end of the third quarter 2021. All of these trends are positive and are expected to continue as we move into 2022 based on our credit disciplines."

Mr. Simard concluded, "As we enter 2022, we continue to actively manage the balance sheet, investing excess liquidity diligently without compromising our credit or interest rate risk appetites. We are excited about this new year and feel we are well positioned regardless of the resulting economic environment."

DIVIDEND DECLARED

The Board of Directors voted to declare a cash dividend of $0.24 per share to shareholders of record at the close of business on February 17, 2022, payable on March 17, 2022. This dividend equates to a 3.32% annualized yield based on the $28.93 closing price of the Company's common stock at the end of the fourth quarter of 2021.

FINANCIAL CONDITION

Total assets were $3.7 billion at the end of the fourth quarter 2021. We executed a balance sheet delever and security remix strategy where $70.0 million of Federal Home Loan Bank advances were prepaid and $19.0 million of securities were sold and then replenished.

Loans were $2.5 billion at the end of the fourth quarter. Excluding PPP loans, commercial loans increased $49.2 million primarily due to five new loans totaling $70.4 million and two new participations totaling $44.3 million. PPP loan balances totaled $6.7 million at year-end 2021 and $53.8 million at the end of 2020. Unearned deferred fees on PPP loans totaled $219 thousand at the end of the quarter and are expected to be mostly recognized in early 2022. COVID loan modifications totaled $566 thousand, down from $4.7 million at the end of the third quarter 2021. Total residential loans decreased $28.7 million from the end of the third quarter 2021, as the Company continued its strategy to sell the majority of residential loan originations in the secondary market.

The allowance for credit losses was $22.7 million for the fourth quarter, compared to $22.4 million at the end of the third quarter 2021. A steadying economic forecast and disciplined approach to credit quality resulted in an allowance to total loans coverage ratio of 0.90% compared to 0.89% at the end of the third quarter 2021. The fourth quarter 2021 charged off loans resulted in a net recovery of $144 thousand, or 0.02% of the total loan portfolio compared to a net charge off of $193 thousand, or 0.03% of total loans in the third quarter 2021. Non-accruing loans for the fourth quarter 2021 decreased to $10.2 million from $12.2 million at the end of the third quarter 2021. The ratio of accruing past due loans to total loans was 0.32% of total loans at the end of the fourth quarter 2021 from 0.12% at the end of the third quarter 2021 and 0.58% at year-end 2020. The increase in 30-day past due accounts for the quarter is attributable to the payment schedules of residential loans and timing due to the quarter ending on a 31 day month.

Total deposits were $3.0 billion at the end of the fourth quarter, an increase of $41.3 million from the third quarter 2021, due to continued core deposit growth. Core deposits grew $85.0 million, or 13% on an annualized basis, during the quarter as over 300 new customer accounts were opened. As a result the loan to deposit ratio was 83% compared to 84% at the end of the third quarter 2021. Time deposits decreased $43.7 million during the quarter primarily due to $15.0 million of brokered certificates of deposit that matured in the fourth quarter. The remaining decrease is attributable to customers continuing to move funds to transactional accounts upon contractual maturity.

The Company's book value per share was $28.27 at December 31, 2021, compared with $27.92 at the end of the third quarter 2021. Tangible book value per share (non-GAAP measure) was $19.86 at the end of the fourth quarter 2021, compared to $19.48 at the end of the third quarter 2021, an annualized growth rate of 8%. Other comprehensive income included unrealized gains on securities totaling $2.0 million in the fourth quarter 2021 compared to $4.4 million at the end of the third quarter 2021.

RESULTS OF OPERATIONS

Net income in the fourth quarter 2021 was $9.8 million, or $0.65 per share, compared to $8.6 million, or $0.58 per share, in the same quarter of 2020. Net income improved on higher fee income and lower operating expenses. PPP loan fees contributed $0.07 to earnings per share in the fourth quarter of 2021 and $0.18 in the same period of 2020. Core earnings (non-GAAP) totaled $10.2 million or $0.68 per share, compared to $9.2 million, or $0.62 per share, in the same quarter of 2020. Non-core items (non-GAAP) reduced net income by $472 thousand in the fourth quarter 2021 and $578 thousand in the same period of 2020.

Net interest margin was 2.79% compared to 3.02% in the same period of 2020. Acceleration of PPP loan fee amortization due to forgiveness contributed 10 basis points to NIM in the fourth quarter 2021 and 23 basis point in the same period of 2020. Interest-bearing cash balances, held mostly at the Federal Reserve Bank, reduced NIM by 27 basis points in the fourth quarter 2021 and 16 basis points in the fourth quarter 2020. The yield on earning assets totaled 3.10% compared to 3.65% in the fourth quarter 2020. Excluding the impact of PPP and excess cash, the yield on earning assets totaled 3.30% and 3.61% for the same periods. The yield on loans was 3.58% in the fourth quarter 2021, 3.98% in the third quarter 2021 and 4.03% in the fourth quarter of 2020. Excluding PPP loans the yield on loans was 3.45% in the fourth quarter of 2021, 3.62% in the third quarter of 2021 and 3.77% in the fourth quarter 2020. Costs of funds decreased to 0.41% from 0.77% in the fourth quarter 2020 due to lower deposit rates and reduced wholesale borrowings.

The provision for credit losses for the quarter was $126 thousand, compared to of $1.4 million in the fourth quarter of 2020. The provision in the fourth quarter 2021 is attributable to steadying economic forecasts from the third quarter 2021, which overall is down from the provision that was booked under the incurred model in the prior year, considering COVID-19 effects.

Non-interest income in the fourth quarter 2021 was $11.2 million, compared to $14.7 million in the same quarter of 2020. Customer service fees were $3.5 million in the fourth quarter compared to $2.9 million in the same period of 2020. The increase is due to over 300 new accounts that were opened during the quarter and a higher volume of customer activity and transactions. Wealth management income increased 16% over the same quarter of 2020 to $3.8 million with assets under management growing 13% to $2.54 billion compared to $2.25 billion in the same period of 2020. The Company sold securities resulting in an $890 thousand gain as part of the aforementioned remix strategy. Mortgage banking activities were $1.6 million, compared to $2.7 million in the same period of 2020. Additionally, bank-owned life insurance income increased $178 thousand due to mortality proceeds from a death claim.

Non-interest expense was $22.9 million in the fourth quarter 2021 from $27.8 million in the same quarter of 2020. Salaries and benefits expense decreased to $11.8 million compared to $13.3 million in the same quarter of 2020, reflecting full-time equivalents of 423 compared to 531, respectively and favorable discount rates on the Company's supplemental-retirement plans. The efficiency ratio benefited from controlled operating expenses in the fourth quarter and was 60.74% compared to 61.98% in the same period of 2020. Excluding the effects of PPP the efficiency ratio was 62.51% and 63.81% for the same respective periods. Non-core expenses (non-GAAP) in the fourth quarter 2021 totaled $1.5 million and consisted of a $1.1 million prepayment penalty on debt extinguishment and a $515 thousand loss on the sale of premises and equipment as the Company continues to optimize its branch footprint. In the same quarter of 2020 non-core expenses (non-GAAP) totaled $4.7 million and included costs to consolidate our wealth management systems.

The effective tax rate for the quarter was 18%, down from 21% in the fourth quarter 2020. The income tax provision in fourth 2021 includes a true-up of the statutory tax rate as more business was driven from the lower cost state of Maine. Also with the filing of the tax returns in the quarter, $76 thousand of tax reserves were released, which is considered a one-time item.

CONTACTS

Josephine Iannelli; EVP, Chief Financial Officer & Treasurer; (207) 288-3314

TABLE
INDEX	CONSOLIDATED FINANCIAL SCHEDULES (UNAUDITED)
A	Selected Financial Highlights
B	Balance Sheets
C	Loan and Deposit Analysis
D	Statements of Income
E	Statements of Income (Five Quarter Trend)
F	Average Yields and Costs
G	Average Balances
H	Asset Quality Analysis
I-J	Reconciliation of Non-GAAP Financial Measures (Five Quarter Trend) and Supplementary Data

BAR HARBOR BANKSHARES
SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED

		At or for the Quarters Ended
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
		2021				2021				2021				2021				2020
PER SHARE DATA
Net earnings, diluted		$	0.65			$	0.73			$	0.60			$	0.63			$	0.58
Core earnings, diluted (1)			0.68				0.73				0.63				0.68				0.62
Total book value (6)			28.27				27.92				27.64				27.10				27.29
Tangible book value (1) (6)			19.86				19.48				19.17				18.61				18.77
Market price at period end			28.93				28.05				28.62				29.42				22.59
Dividends			0.24				0.24				0.24				0.22				0.22
PERFORMANCE RATIOS (2)
Return on assets			1.02	%			1.16	%			0.97	%			1.03	%			0.92	%
Core return on assets (1)			1.07				1.16				1.01				1.11				0.98
Pre-tax, pre-provision return on assets			1.26				1.43				1.13				1.22				1.30
Core pre-tax, pre-provision return on assets (1)			1.33				1.43				1.18				1.32				1.38
Return on equity (6)			9.16				10.38				8.77				9.45				8.42
Core return on equity (1) (6)			9.60				10.39				9.14				10.14				8.99
Return on tangible equity (6)			13.30				15.08				12.91				14.01				12.52
Core return on tangible equity (1) (6)			13.93				15.09				13.45				15.01				13.33
Net interest margin, fully taxable equivalent (FTE) (1) (3)			2.79				3.02				2.74				2.88				3.02
Core net interest margin (1) (4)			2.69				2.75				2.67				2.78				2.79
Efficiency ratio (1)			60.74				59.18				63.45				61.95				61.98
FINANCIAL DATA (In millions)
Total assets (6)		$	3,709			$	3,738			$	3,639			$	3,730			$	3,724
Total earning assets (5)			3,380				3,394				3,282				3,381				3,371
Total investments			626				556				636				641				599
Total loans			2,532				2,534				2,516				2,551				2,563
Allowance for credit losses			23				22				23				24				19
Total goodwill and intangible assets			126				126				127				127				127
Total deposits			3,049				3,007				2,822				2,912				2,906
Total shareholders' equity (6)			424				418				414				405				407
Net income			10				11				9				9				9
Core earnings (1)			10				11				9				10				9
ASSET QUALITY AND CONDITION RATIOS
Net charge-offs (current quarter annualized)/average loans			-	%			0.03	%			0.01	%			0.03	%			0.03	%
Allowance for credit losses/total loans			0.90				0.89				0.91				0.93				0.74
Loans/deposits			83				84				89				88				88
Shareholders' equity to total assets (6)			11.43				11.19				11.37				10.86				10.93
Tangible shareholders' equity to tangible assets (6)			8.32				8.08				8.17				7.72				7.78

(1) Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in table I-J for additional information.
(2) All performance ratios are based on average balance sheet amounts, where applicable.
(3) Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans.
(4) Core net interest margin excludes Paycheck Protection Program loans.
(5) Earning assets includes non-accruing loans and interest-bearing deposits with other banks. Securities are valued at amortized cost.
(6) The first and second quarters of 2021 and the fourth quarter of 2020 have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS - UNAUDITED

		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(in thousands)		2021				2021				2021				2021				2020
Assets
Cash and due from banks		$	33,508			$	39,081			$	41,440			$	39,039			$	27,566
Interest-bearing deposits with other banks			216,881				302,118				132,278				184,473				198,441
Total cash and cash equivalents			250,389				341,199				173,718				223,512				226,007
Securities available for sale			618,276				545,327				621,849				626,403				585,046
Federal Home Loan Bank stock			7,384				10,192				14,145				14,826				14,036
Total securities			625,660				555,519				635,994				641,229				599,082
Loans held for sale			5,523				7,505				7,942				10,148				23,988
Total loans			2,531,910				2,534,154				2,515,560				2,551,064				2,562,885
Less: Allowance for credit losses			(22,718	)			(22,448	)			(22,815	)			(23,653	)			(19,082	)
Net loans			2,509,192				2,511,706				2,492,745				2,527,411				2,543,803
Premises and equipment, net			49,382				50,070				51,119				52,253				52,458
Other real estate owned			-				-				-				-				-
Goodwill			119,477				119,477				119,477				119,477				119,477
Other intangible assets			6,733				6,966				7,198				7,431				7,670
Cash surrender value of bank-owned life insurance			79,020				79,380				78,886				78,388				77,870
Deferred tax asset, net (1)			5,547				5,811				4,902				5,761				3,047
Other assets (1)			58,310				60,712				67,064				64,479				70,873
Total assets (1)		$	3,709,233			$	3,738,345			$	3,639,045			$	3,730,089			$	3,724,275
Liabilities and shareholders' equity
Demand and other non-interest bearing deposits		$	664,420			$	664,395			$	599,598			$	586,487			$	544,636
NOW deposits			940,631				888,021				802,681				761,817				738,849
Savings deposits			628,670				605,977				578,361				560,095				521,638
Money market deposits			389,291				379,651				371,075				365,507				402,731
Time deposits			425,532				469,221				470,758				638,436				698,361
Total deposits			3,048,544				3,007,265				2,822,473				2,912,342				2,906,215
Senior borrowings			118,400				190,267				279,991				292,210				276,062
Subordinated borrowings			60,124				60,083				60,042				60,003				59,961
Total borrowings			178,524				250,350				340,033				352,213				336,023
Other liabilities (1)			58,018				62,295				62,779				60,354				74,972
Total liabilities (1)			3,285,086				3,319,910				3,225,285				3,324,909				3,317,210
Total shareholders' equity (1)			424,147				418,435				413,760				405,180				407,065
Total liabilities and shareholders' equity (1)		$	3,709,233			$	3,738,345			$	3,639,045			$	3,730,089			$	3,724,275
Net shares outstanding			15,001				14,987				14,972				14,950				14,916

(1) The first and second quarters of 2021 and the fourth quarter of 2020 have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

																						Annualized
																						Growth %
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,				Quarter				Year to
(in thousands)		2021				2021				2021				2021				2020				End				Date
Commercial real estate		$	1,210,580			$	1,170,372			$	1,135,857			$	1,118,669			$	1,084,381				14	%			12	%
Commercial and industrial			340,129				331,091				327,729				317,500				323,864				11				5
Paycheck Protection Program (PPP)			6,669				24,227				65,918				77,878				53,774				*				(88	)
Total commercial loans			1,557,378				1,525,690				1,529,504				1,514,047				1,462,019				8				7
Total commercial loans, excluding PPP			1,550,709				1,501,463				1,463,586				1,436,169				1,408,245				13				10
Residential real estate			821,004				849,692				822,774				868,084				923,891				(14	)			(11	)
Consumer			98,949				100,933				103,589				106,835				113,544				(8	)			(13	)
Tax exempt and other			54,579				57,839				59,693				62,098				63,431				(23	)			(14	)
Total loans		$	2,531,910			$	2,534,154			$	2,515,560			$	2,551,064			$	2,562,885				-	%			(1	)%

DEPOSIT ANALYSIS

																						Annualized
																						Growth %
		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,				Quarter				Year to
(in thousands)		2021				2021				2021				2021				2020				End				Date
Demand		$	664,420			$	664,395			$	599,598			$	586,487			$	544,636				-	%			22	%
NOW			940,631				888,021				802,681				761,817				738,849				24				27
Savings			628,670				605,977				578,361				560,095				521,638				15				21
Money market			389,291				379,651				371,075				365,507				402,731				10				(3	)
Total non-maturity deposits			2,623,012				2,538,044				2,351,715				2,273,906				2,207,854				13				19
Total time deposits			425,532				469,221				470,758				638,436				698,361				(37	)			(39	)
Total deposits		$	3,048,544			$	3,007,265			$	2,822,473			$	2,912,342			$	2,906,215				5	%			5	%

*Indicates ratios of 100% or greater.

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

		Three Months Ended								Year Ended
		December 31,								December 31,
(in thousands, except per share data)		2021				2020				2021				2020
Interest and dividend income
Loans		$	22,746			$	26,687			$	95,236			$	107,085
Securities and other			3,776				4,013				15,568				19,019
Total interest and dividend income			26,522				30,700				110,804				126,104
Interest expense
Deposits			1,434				3,606				8,543				18,043
Borrowings			1,273				1,732				6,688				8,881
Total interest expense			2,707				5,338				15,231				26,924
Net interest income			23,815				25,362				95,573				99,180
Provision for credit losses			126				1,360				(1,302	)			5,625
Net interest income after provision for credit losses			23,689				24,002				96,875				93,555
Non-interest income
Trust and investment management fee income			3,844				3,318				15,179				13,378
Customer service fees			3,470				2,890				13,212				11,327
Gain on sales of securities, net			890				3,959				2,870				5,445
Mortgage banking income			1,563				2,654				6,536				6,884
Bank-owned life insurance income			669				482				2,179				2,007
Customer derivative income			173				1,086				1,010				2,503
Other income			549				334				1,275				1,412
Total non-interest income			11,158				14,723				42,261				42,956
Non-interest expense
Salaries and employee benefits			11,842				13,318				47,117				48,920
Occupancy and equipment			4,105				4,192				16,356				16,751
Loss (gain) on sales of premises and equipment, net			515				(122	)			378				(32	)
Outside services			431				571				1,943				1,985
Professional services			556				572				1,756				2,060
Communication			205				194				912				892
Marketing			378				415				1,541				1,385
Amortization of intangible assets			233				256				940				1,024
Loss on debt extinguishment			1,083				-				2,851				1,351
Acquisition, conversion and other expenses			(92	)			4,849				1,667				5,801
Other expenses			3,665				3,571				15,047				14,723
Total non-interest expense			22,921				27,816				90,508				94,860
Income before income taxes			11,926				10,909				48,628				41,651
Income tax expense			2,160				2,269				9,329				8,407
Net income		$	9,766			$	8,640			$	39,299			$	33,244
Earnings per share:
Basic		$	0.65			$	0.58			$	2.63			$	2.18
Diluted			0.65				0.58				2.61				2.18
Weighted average shares outstanding:
Basic			14,993				14,909				14,961				15,246
Diluted			15,075				14,952				15,045				15,272

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED

		Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
(in thousands, except per share data)		2021				2021				2021				2021				2020
Interest and dividend income
Loans		$	22,746			$	25,094			$	23,191			$	24,205			$	26,687
Securities and other			3,776				3,821				3,992				3,979				4,013
Total interest and dividend income			26,522				28,915				27,183				28,184				30,700
Interest expense
Deposits			1,434				1,555				2,603				2,951				3,606
Borrowings			1,273				1,778				1,826				1,811				1,732
Total interest expense			2,707				3,333				4,429				4,762				5,338
Net interest income			23,815				25,582				22,754				23,422				25,362
Provision for credit losses			126				(174	)			(765	)			(489	)			1,360
Net interest income after provision for credit losses			23,689				25,756				23,519				23,911				24,002
Non-interest income
Trust and investment management fee income			3,844				3,868				3,801				3,666				3,318
Customer service fees			3,470				3,515				3,257				2,970				2,890
Gain on sales of securities, net			890				1,930				50				-				3,959
Mortgage banking income			1,563				850				1,553				2,570				2,654
Bank-owned life insurance income			669				494				498				518				482
Customer derivative income			173				341				86				410				1,086
Other income			549				352				260				114				334
Total non-interest income			11,158				11,350				9,505				10,248				14,723
Non-interest expense
Salaries and employee benefits			11,842				11,743				11,356				12,176				13,318
Occupancy and equipment			4,105				4,029				3,894				4,328				4,192
Loss (gain) on sales of premises and equipment, net			515				(146	)			1				8				(122	)
Outside services			431				547				533				432				571
Professional services			556				491				151				558				572
Communication			205				188				198				321				194
Marketing			378				339				534				290				415
Amortization of intangible assets			233				233				233				241				256
Loss on debt extinguishment			1,083				1,768				-				-				-
Acquisition, conversion and other expenses			(92	)			318				552				889				4,849
Other expenses		3,665		...