Farmers National Banc Corp. Announces 2020 Fourth Quarter and Annual Financial Results
Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months and year ended December 31, 2020.
Net income for the three months ended December 31, 2020 was $11.4 million, or $0.40 per diluted share, which compares to $9.7 million, or $0.35 per diluted share, for the three months ended December 31, 2019 and $10.9 million or $0.38 per diluted share for the linked quarter. Net income excluding acquisition costs (non-GAAP) for the quarter ended December 31, 2020 was $12.8 million or $0.45 per share, compared to $9.8 million or $0.35 per share for the same quarter in 2019 and $10.9 million or $0.39 per share for the most recent prior quarter.
Annualized return on average assets and annualized return on average equity were 1.49% and 13.10%, respectively, for the three month period ending December 31, 2020, compared to 1.58% and 12.78% for the same three month period in 2019, and 1.46% and 12.87% for the linked quarter. Farmers’ annualized return on average tangible equity (non-GAAP) was 15.48% for the quarter ended December 31, 2020 compared to 15.03% for the same quarter in 2019 and 15.30% for the linked quarter.
Net income for the twelve months ended December 31, 2020 was $41.9 million, or $1.47 per diluted share, compared to $35.8 million or $1.28 per diluted share for the same twelve month period in 2019. Return on average assets and return on average equity were 1.46% and 12.80%, respectively, for the twelve months ended December 31, 2020, compared to 1.50% and 12.56% for the same period in 2019.
Kevin J. Helmick, President and CEO, stated, “In an unprecedented year, I must take time to reflect on the challenges we faced this year with the onset of the pandemic. Farmers Associates stood strong by delivering creative and steadfast customer service and support to our stakeholders. I would like to thank all of our Associates for helping deliver another outstanding quarter and year of record results. Our record fourth quarter financial results demonstrate that when our customers and communities win, we win, and we remain focused on ensuring our customers are well positioned to achieve their financial goals.”
Farmers is offering special financial assistance to support customers who are experiencing financial hardships related to the COVID-19 pandemic. The following table reports the number and amount of payment deferrals by loan type as of dates listed:
March 31, 2020
June 30, 2020
Sept. 30, 2020
Dec. 31, 2020
(dollars in thousands)
Outstanding
Balance
Number of
Loans
Outstanding
Balance
Number
of Loans
Outstanding
Balance
Number
of Loans
Outstanding
Balance
Number
of Loans
Commercial real estate
$
75,809
78
$
43,954
44
$
155
1
$
5,900
2
Commercial
11,839
81
8,515
69
0
0
489
1
Agricultural
1,492
11
8,340
22
469
2
0
0
Residential real estate
5,506
41
3,785
37
222
1
0
0
Consumer
2,840
127
1,858
100
2
1
2
1
Total
$
97,486
338
$
66,452
272
$
848
5
$
6,391
4
The Company offered three month deferrals upon request by the borrowers. The deferral requests began in the middle of March, 2020 and concluded at the end of the three month deferral period. The decline in deferred loans and balances was due to the ending of the deferment period and not all borrowers requested additional deferments as most continued to pay under the original terms of their loan.
Farmers is also a preferred SBA lender and dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, so they could obtain SBA approval and receive funding as quickly as possible. During the period of the initial PPP program, the Company facilitated PPP assistance to 1,714 business customers totaling $199.8 million. The Company, on behalf of its customers, began processing borrower applications for PPP forgiveness at the beginning of September 2020. The SBA has up to ninety days to review an application for PPP forgiveness and provide a decision at the end of that review. Once forgiveness of the PPP loans has been communicated and payment is received from the SBA, the Company will record the cash received from the SBA, pay-off the loans based on the amount of forgiveness provided and accelerate the amount of net deferred loan fees/costs recognized for the portion of the PPP loans that are forgiven. At December 31, 2020, the Company had received payments from the SBA for forgiveness of loans totaling $67.6 million, or approximately 33.8% of the total PPP loans. The Company has begun processing new applications for the second round of PPP loan funding.
2020 Fourth Quarter Financial Highlights
LoansTotal loans were $2.08 billion at December 31, 2020, compared to $1.81 billion at December 31, 2019, representing an increase of 14.7%. Excluding the $182.1 million of loans added from the Maple Leaf acquisition, loan growth was 4.7%. The increase in loans was 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 primarily in the PPP category, with $128.1 million, net of deferred fees, in outstanding balances. Loans now comprise 74.4% of the Bank's average earning assets for the quarter ended December 31, 2020, compared to 79.5% for the same period in 2019. The growth in the second quarter of 2020 from PPP loans has resulted in an 11.8% increase in tax equated loan interest income, including fees, in the fourth quarter of 2020 compared to the same quarter in 2019. A summary of loans summarized by industries that have particular vulnerability to the effects of COVID-19 and their outstanding balance as a percentage of total loans, as of December 31, 2020, is shown in the following table:
(dollars in thousands)
Outstanding
Balance
% of total loans
Restaurants and Catering Facilities
$45,147
2.17%
Hotels
40,888
1.97%
Golf Courses
7,262
0.35%
Energy
690
0.03%
Total
$93,987
4.52%
Deposits and LiquidityFarmers maintains, in the opinion of management, liquidity sufficient to satisfy depositors’ requirements and meet the credit needs of its customers. The Company’s non-brokered deposits increased 34% from $1.9 billion at December 31, 2019 to $2.6 billion at December 31, 2020. As a result of the large increase in deposits, the loan to deposit ratio at December 31, 2020 stands at 79.6%, a decrease compared to 90.2% one year ago. The Company has additional borrowing capacity at the Federal Home Loan Bank of Cincinnati and approved lines of credit at two domestic banks.
Loan qualityNon-performing assets to total assets remain at a low level, currently at 0.45%, but increased from the 0.26% reported one year ago. Early stage delinquencies were $9.3 million, or 0.45% of total loans, at December 31, 2020, compared to $10.1 million, or 0.47% of total loans, for the quarter ended September 30, 2020. Net charge-offs for the current quarter were $197 thousand, compared to $374 thousand in the same quarter in 2019. Total net charge-offs as a percentage of average net loans outstanding is 0.04% for the quarter ended December 31, 2020 unchanged compared to the most recent quarter.
The Company increased its provision for loan losses to $3.0 million, an increase of $400 thousand compared to the $2.6 million provision recorded in the most recent quarter. This additional provision is the amount determined to be required as a result of the impact of increased negative factors that exist in the current economic environment. As an overall percentage of loans, the allowance for loan losses increased to 1.07% for the current quarter compared to 0.90% for the quarter ended September 30, 2020. Excluding the PPP loans, this allowance for loan losses to gross loans ratio increases to 1.14% (non-GAAP). The ratio of the allowance for loan losses to gross loans, excluding PPP loans and acquired loans is 1.31% (non-GAAP).
In accordance with the accounting relief provisions of the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, that was signed into law in late December 2020, the Bank has postponed adoption of the current expected credit losses (“CECL”) accounting standards, primarily due to the impact the COVID-19 pandemic is having on the economy and the lack of reasonable and supportable economic forecasts.
Net interest marginThe net interest margin for the three months ended December 31, 2020 was 3.73%, an 11 basis points decrease from the quarter ended December 31, 2019, but 14 basis points more than the 3.59% reported for the linked quarter. In comparing the fourth quarter of 2020 to the same period in 2019, asset yields decreased 51 basis points, while the cost of interest-bearing liabilities decreased 53 basis points. Most of the decrease in the asset yields was the result of lower rates earned on loans, declining from 5.05% to 4.83% due to the decrease in the prime lending rate and the addition of the lower yielding PPP loans. The cost of interest bearing liabilities decreased as the Federal Funds target rate was lowered to a target of 0-0.25% at the start of the COVID-19 pandemic in the United States. Each of the major interest-bearing liability categories experienced cost decreases compared to one year ago. The net interest margin for the quarter ended December 31, 2020 excluding interest and fees from PPP loans is 3.61% (non-GAAP). The net interest margin is also impacted by the additional accretion as a result of the discounted loan portfolios acquired in previous mergers, which increased the net interest margin by 4 basis points for the quarters ended December 31, 2020 and 2019.
Noninterest incomeNoninterest income increased 36.7% to $10.7 million for the quarter ended December 31, 2020 compared to $7.8 million in the same quarter in 2019. Gains on the sales of mortgage loans increased $2.4 million or 157.15%, as lower interest rates prompted an increase in mortgage loan refinancing and new home purchases. Security gains increased $151 thousand, insurance agency commissions increased $80 thousand or 11.49% and debit card interchange fees increased $139 thousand or 15.08%, but those increases were offset by a $209 thousand or 18.35% decrease in deposit account service charge income due to a change in consumer behavior during the COVID-19 pandemic. Other operating income was $204 thousand or 31.34% higher due to captive insurance company reimbursements related to the class action lawsuit settlement expense recorded in the prior year.
Noninterest expensesFarmers has remained committed to managing the level of noninterest expenses. Total noninterest expenses for the fourth quarter of 2020 increased 19.73% to $19.8 million compared to $16.5 million in the same quarter in 2019, primarily as a result of increases in salaries and employee benefits of $510 thousand or 5.6% and occupancy expense of $393 thousand or 23.58%. Acquisition related costs increased $1.7 million related to the Geauga Savings Bank acquisition completed earlier in the year. Other operating expenses also increased $1.2 million or 53.95% as a result of increased mortgage servicing rights expense and captive insurance company losses from members of the pool made claims for COVID-19 costs. Annualized noninterest expenses excluding acquisition costs (non-GAAP) measured as a percentage of quarterly average assets decreased from 2.68% in the fourth quarter of 2019 to 2.35% in the fourth quarter of 2020.
Efficiency ratioThe efficiency ratio for the quarter ended December 31, 2020 improved to 50.25% compared to 54.51% for the same quarter in 2019. The improvement in mortgage banking income and net interest income, accompanied with careful management of noninterest expenses were the main drivers of the improvement.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $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, Geauga and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at December 31, 2020 are $2.8 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 include impacts from the COVID-19 pandemic, including further resurgence in the spread of COVID-19, on local, national and global economic conditions; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; unexpected changes in interest rates or disruptions in the mortgage markets related to COVID-19 or other responses to the health crisis; impacts of the upcoming U.S. elections on the regulatory landscape, capital markets, and response to and management of the COVID-19 pandemic including further economic stimulus from the federal government; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2019, and subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (SEC) and 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 Twelve Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
Percent
2020
2020
2020
2020
2019
2020
2019
Change
Total interest income
$28,833
$27,635
$28,142
$27,717
$25,847
$112,327
$101,986
10.1%
Total interest expense
3,030
3,470
4,221
5,415
4,682
16,136
19,608
-17.7%
Net interest income
25,803
24,165
23,921
22,302
21,165
96,191
82,378
16.8%
Provision for loan losses
3,000
2,600
2,400
1,100
600
9,100
2,450
271.4%
Noninterest income
10,682
9,467
9,136
7,870
7,814
37,155
28,602
29.9%
Acquisition related costs
1,798
58
48
1,319
104
3,223
197
1536.0%
Other expense
17,979
17,662
17,692
17,418
16,414
70,751
65,258
8.4%
Income before income taxes
13,708
13,312
12,917
10,335
11,861
50,272
43,075
16.7%
Income taxes
2,351
2,443
1,906
1,696
2,186
8,396
7,315
14.8%
Net income
$11,357
$10,869
$11,011
$8,639
$9,675
$41,876
$35,760
17.1%
Average diluted shares outstanding
28,322
28,291
28,280
28,710
27,829
28,394
27,876
Basic earnings per share
0.40
0.39
0.39
0.30
0.35
1.48
1.29
Diluted earnings per share
0.40
0.38
0.39
0.30
0.35
1.47
1.28
Cash dividends
3,100
3,101
3,100
3,104
2,767
12,405
10,538
Cash dividends per share
0.11
0.11
0.11
0.11
0.10
0.44
0.38
Performance Ratios
Net Interest Margin (Annualized)
3.73%
3.59%
3.74%
3.75%
3.84%
3.70%
3.82%
Efficiency Ratio (Tax equivalent basis)
50.25%
50.66%
50.75%
59.72%
54.51%
52.82%
56.59%
Return on Average Assets (Annualized)
1.49%
1.46%
1.56%
1.32%
1.58%
1.46%
1.50%
Return on Average Equity (Annualized)
13.10%
12.87%
14.02%
11.53%
12.78%
12.80%
12.56%
Dividends to Net Income
27.30%
28.53%
28.15%
35.93%
28.60%
29.62%
29.47%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets
1.52%
1.50%
1.58%
1.33%
1.62%
1.48%
1.53%
Return on Average Tangible Equity
15.48%
15.30%
16.69%
13.81%
15.03%
15.07%
14.81%
Return on Average Tangible Equity excluding acquisition costs
17.43%
15.37%
16.75%
15.50%
15.17%
16.00%
14.88%
Consolidated Statements of Financial Condition
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
2020
2020
2020
2020
2019
Assets
Cash and cash equivalents
$254,621
$199,575
$103,954
$83,107
$70,760
Securities available for sale
575,600
481,509
475,614
448,043
432,233
Equity securities
6,881
8,307
8,375
8,080
7,909
Loans held for sale
4,766
7,076
3,395
3,272
2,600
Loans
2,078,044
2,147,158
2,149,690
1,976,582
1,811,539
Less allowance for loan losses
22,144
19,341
16,960
14,952
14,487
Net Loans
2,055,900
2,127,817
2,132,730
1,961,630
1,797,052
Other assets
173,380
164,895
161,612
164,256
138,604
Total Assets
$3,071,148
$2,989,179
$2,885,680
$2,668,388
$2,449,158
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing
$608,791
$577,334
$593,162
$449,952
$434,126
Interest-bearing
2,002,087
1,960,998
1,846,323
1,796,325
1,574,838
Total deposits
2,610,878
2,538,332
2,439,485
2,246,277
2,008,964
Other interest-bearing liabilities
78,906
81,690
80,115
96,852
122,197
Other liabilities
31,267
29,189
34,728
21,523
18,688
Total liabilities
2,721,051
2,649,211
2,554,328
2,364,652
2,149,849
Stockholders' Equity
350,097
339,968
331,352
303,736
299,309
Total Liabilities and Stockholders' Equity
$3,071,148
$2,989,179
$2,885,680
$2,668,388
$2,449,158
Period-end shares outstanding
28,190
28,186
28,180
28,127
27,671
Book value per share
$12.42
$12.06
$11.76
$10.80
$10.82
Tangible book value per share (Non-GAAP)*
10.66
10.23
9.92
8.94
9.28
* 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)
12.81%
12.98%
12.65%
12.26%
12.94%
Total Risk Based Capital Ratio (a)
13.82%
14.36%
13.92%
13.43%
13.82%
Tier 1 Risk Based Capital Ratio (a)
12.91%
13.43%
13.10%
12.70%
13.06%
Tier 1 Leverage Ratio (a)
10.18%
9.67%
9.71%
10.18%
10.69%
Equity to Asset Ratio
11.40%
11.37%
11.48%
11.38%
12.22%
Tangible Common Equity Ratio (b)
9.94%
9.82%
9.86%
9.61%
10.67%
Net Loans to Assets
66.94%
71.18%
73.91%
73.51%
73.37%
Loans to Deposits
79.59%
84.59%
88.12%
87.99%
90.17%
Asset Quality
Non-performing loans
$13,835
$11,841
$12,225
$11,845
$6,345
Other Real Estate Owned
0
73
41
131
19
Non-performing assets
13,835
11,914
12,266
11,976
6,364
Loans 30 - 89 days delinquent
9,297
10,134
10,336
19,067
11,893
Charged-off loans
387
393
524
749
519
Recoveries
190
174
132
114
145
Net Charge-offs
197
219
392
635
374
Annualized Net Charge-offs to Average Net Loans Outstanding
0.04%
0.04%
0.08%
0.13%
0.09%
Allowance for Loan Losses to Total Loans
1.07%
0.90%
0.79%
0.76%
0.80%
Non-performing Loans to Total Loans
0.67%
0.55%
0.57%
0.60%
0.35%
Allowance to Non-performing Loans
160.06%
163.34%
138.73%
126.23%
228.32%
Non-performing Assets to Total Assets
0.45%
0.40%
0.43%
0.45%
0.26%
(a) December 31, 2020 ratio is estimated
(b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below
Reconciliation of Total Assets to Tangible Assets
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2020
2020
2020
2020
2019
2020
2019
Total Assets
$3,071,148
$2,989,179
$2,885,680
$2,668,388
$2,449,158
$3,071,148
$2,449,158
Less Goodwill and other intangibles
49,617
51,608
51,866
52,337
42,645
49,617
42,645
Tangible Assets
$3,021,531
$2,937,571
$2,833,814
$2,616,051
$2,406,513
$3,021,531
$2,406,513
Average Assets
3,033,005
2,957,702
2,842,730
2,641,597
2,424,574
2,869,394
2,383,236
Less average Goodwill and other intangibles
51,476
51,754
52,052
51,103
42,859
49,363
43,345
Average Tangible Assets
$2,981,529
$2,905,948
$2,790,678
$2,590,494
$2,381,715
$2,820,031
$2,339,891
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2020
2020
2020
2020
2019
2020
2019
Stockholders' Equity
$350,097
$339,968
$331,352
$303,736
$299,309
$350,097
$299,309
Less Goodwill and other intangibles
49,617
51,608
51,866
52,337
42,645
49,617
42,645
Tangible Common Equity
$300,480
$288,360
$279,486
$251,399
$256,664
$300,480
$256,664
Average Stockholders' Equity
344,949
335,982
315,988
301,408
300,355
327,175
284,759
Less average Goodwill and other intangibles
51,476
51,754
52,052
51,103
42,859
49,363
43,345
Average Tangible Common Equity
$293,473
$284,228
$263,936
$250,305
$257,496
$277,812
$241,414
Reconciliation of Net Income, Excluding Acquisition Related Costs
For the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2020
2020
2020
2020
2019
2020
2019
Net income
$11,357
$10,869
$11,011
$8,639
$9,675
$41,876
$35,760
Acquisition related costs - tax equated
1,431
50
41
1,063
90
2,585
167
Net income - Adjusted
$12,788
$10,919
$11,052
$9,702
$9,765
$44,461
$35,927
Diluted EPS excluding acquisition costs
$0.45
$0.39
$0.39
$0.34
$0.35
$1.57
$1.29
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
End of Period Loan Balances
2020
2020
2020
2020
2019
Commercial real estate
$713,936
$710,730
$715,342
$714,477
$616,778
Commercial
404,492
481,593
472,012
283,033
255,823
Residential real estate
524,193
526,627
528,853
541,534
500,024
Consumer
203,061
209,883
208,374
210,173
209,271
Agricultural loans
232,129
219,896
221,556
223,977
226,333
Total, excluding net deferred loan costs
$2,077,811
$2,148,729
$2,146,137
$1,973,194
$1,808,229
For the Three Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Noninterest Income
2020
2020
2020
2020
2019
Service charges on deposit accounts
$930
$904
$753
$1,095
$1,139
Bank owned life insurance income
187
196
204
208
192
Trust fees
1,950
1,973
1,852
1,857
1,891
Insurance agency commissions
776
784
681
883
696
Security gains (losses)
179
70
(26)
157
28
Retirement plan consulting fees
394
341
408
380
343
Investment commissions
450
353
304
423
435
Net gains on sale of loans
3,901
3,348
3,658
1,366
1,517
Debit card and EFT fees
1,061
1,048
967
851
922
Other operating income
854
450
335
650
651
Total Noninterest Income
$10,682
$9,467
$9,136
$7,870
$7,814
For the Three Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Noninterest Expense
2020
2020
2020
2020
2019
Salaries and employee benefits
$9,638
$10,244
$9,713
$10,231
$9,128
Occupancy and equipment
2,060
1,719
1,675
1,800
1,667
State and local taxes
515
576
583
464
416
Professional fees
341
753
823
816
787
Merger related costs
1,798
58
48
1,319
104
Advertising
478
460
322
271
607
FDIC insurance
100
200
225
225
79
Intangible amortization
332
332
331
332
326
Core processing charges
831
925
934
861
876
Telephone and data
154
182
348
203
235
Other operating expenses
3,530
2,271
2,738
2,215
2,293
Total Noninterest Expense
$19,777
$17,720
$17,740
$18,737
$16,518
Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
Three Months Ended
Three Months Ended
December 31, 2020
December 31, 2019
AVERAGE
AVERAGE
BALANCE
INTEREST (1)
RATE (1)
BALANCE
INTEREST (1)
RATE (1)
EARNING ASSETS
Loans (2)
$2,094,276
$25,409
4.83%
$1,784,421
$22,725
5.05%
Taxable securities
223,306
1,335
2.38
181,894
1,162
2.53
Tax-exempt securities (2)
262,829
2,514
3.81
227,259
2,205
3.85
Equity securities
15,138
128
3.36
12,059
130
4.28
Federal funds sold and other
221,052
67
0.12
37,914
170
1.78
Total earning assets
2,816,601
29,453
4.16
2,243,547
26,392
4.67
Nonearning assets
216,404
181,027
Total assets
$3,033,005
$2,424,574
INTEREST-BEARING LIABILITIES
Time deposits
$458,340
$1,591
1.38%
$418,722
$2,089
1.98%
Brokered time deposits
43,685
98
0.89
85,973
446
2.06
Savings deposits
489,071
236
0.19
402,464
320
0.32
Demand deposits
995,977
804
0.32
683,143
1,506
0.87
Short term borrowings
3,859
7
0.72
35,838
99
1.10
Long term borrowings
76,400
294
1.53
45,203
222
1.95
Total interest-bearing liabilities
$2,067,332
3,030
0.58
$1,671,343
4,682
1.11
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits
593,955
434,778
Other liabilities
26,769
18,098
Stockholders' equity
344,949
300,355
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$3,033,005
$2,424,574
Net interest income and interest rate spread
$26,423
3.58%
$21,710
3.56%
Net interest margin
3.73%
3.84%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2020, adjustments of $101 thousand and $519 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2019, adjustments of $99 thousand and $446 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%, less disallowances.
Twelve Months Ended
Twelve Months Ended
December 31, 2020
December 31, 2019
AVERAGE
AVERAGE
BALANCE
INTEREST (1)
RATE (1)
BALANCE
INTEREST (1)
RATE (1)
EARNING ASSETS
Loans (2)
$2,062,936
$98,779
4.79%
$1,757,799
$89,517
5.09%
Taxable securities
209,817
5,423
2.58
190,944
4,840
2.53
Tax-exempt securities
250,394
9,675
3.86
216,586
8,418
3.89
Equity securities (2)
16,073
543
3.38
12,057
627
5.20
Federal funds sold and other
124,447
298
0.24
34,948
729
2.09
Total earning assets
2,663,667
114,718
4.31
2,212,334
104,131
4.71
Nonearning assets
205,727
170,902
Total assets
$2,869,394
$2,383,236
INTEREST-BEARING LIABILITIES
Time deposits
$480,302
$8,083
1.68%
$401,317
$7,847
1.96%
Brokered time deposits
72,472
1,057
1.46
83,311
1,921
2.31
Savings deposits
462,021
1,080
0.23
410,672
1,285
0.31
Demand deposits
856,462
4,161
0.49
641,461
5,807
0.91
Short term borrowings
20,764
359
1.73
96,145
2,250
2.34
Long term borrowings
82,451
1,396
1.69
23,318
498
2.14
Total interest-bearing liabilities
$1,974,472
16,136
0.82
$1,656,224
19,608
1.18
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits
$546,177
$429,289
Other liabilities
21,570
12,964
Stockholders' equity
327,175
284,759
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$2,869,394
$2,383,236
Net interest income and interest rate spread
$98,582
3.49%
$84,523
3.53%
Net interest margin
3.70%
3.82%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2020, adjustments of $400 thousand and $2.0 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2019, adjustments of $414 thousand and $1.7 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%, less disallowances.
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