| | |
| | 10753 Macatawa Drive Holland, Michigan 49424 |
NEWS RELEASE | |
NASDAQ STOCK MARKET FOR RELEASE: DATE: | MCBC Immediate October 25, 2012 |
Macatawa Bank Corporation Reports Third Quarter Results
Holland, Michigan, October 25, 2012 – Macatawa Bank Corporation (Nasdaq: MCBC) today announced its results for the third quarter of 2012, continuing its trend of improvement in key operating metrics and financial performance.
| | ● | Earnings increased to $6.6 million in the third quarter of 2012 versus $1.1 million in the third quarter of 2011 |
| | ● | Solid operational results bolstered by a one-time loan prepayment fee and negative provision for loan losses |
| | ● | Negative provision for loan losses from continued improvement in loan portfolio quality |
| | | · Total loan delinquencies decreased again, now at 0.56% of total loans – well below industry averages |
| | | · Net loan recoveries for the third quarter and first nine months while the industry has generally experienced net charge-offs |
| | | · Nonperforming loans decreased by 8% during the third quarter and reached their lowest level since the first quarter of 2007 |
| | ● | Strong retail banking results – growth in core deposits and high mortgage loan origination volumes |
| | ● | Risk-based regulatory capital ratios at their highest levels in the Company’s history and comfortably above the minimums to be categorized as “well capitalized” under applicable regulatory capital guidelines |
| | ● | Significant reduction in costs associated with nonperforming assets – down 46% from the previous quarter and 62% from the third quarter of last year |
Macatawa reported net income available to common shares of $6.6 million, or $0.24 per diluted share, in the third quarter of 2012 compared to net income available to common shares of $1.1 million, or $0.04 per diluted share, for the third quarter of 2011. For the first nine months of 2012, the Company reported net income available to common shares of $14.3 million, or $0.53 per diluted share, compared to net income available to common shares of $4.7 million, or $0.22 per diluted share, for the same period in 2011.
“The Company’s results for the third quarter and first nine months of 2012 reflected solid operational performance that was enhanced by favorable one-time events,” said Richard L. Postma, Chairman of the Board of the Company. “Large loan recoveries in the first quarter, further loan recoveries in the third quarter, and a large loan prepayment fee in the third quarter have all bolstered our underlying results. Apart from these favorable one-time events, our underlying operating performance continued to strengthen. Our retail banking efforts resulted in growth in core deposits of $9 million for the third quarter and $29 million for the first nine months of 2012, and resulted in strong mortgage origination volumes which ultimately produced high gains on sales of loans for the same periods. We have also seen significant improvement in the level of costs associated with nonperforming assets, primarily other real estate owned. These costs were $1.7 million for the third quarter of 2012, a decrease from $4.5 million in the third quarter of 2011.”
Mr. Postma further stated: “Our capital ratio levels at September 30, 2012 were at the highest levels in Company history. Building a strong capital position has been crucial to creating a sense of confidence in the Company for the communities we serve. We believe our strong capital position has contributed to the customer deposit growth we have experienced through our retail branch network and with our commercial and institutional customers.”
Macatawa Bank Corporation 3Q Results / page 2 of 4
Mr. Postma concluded: “While our operating performance has been solidifying, it remains inconsistent. We had a total of $57.8 million in other real estate owned at the end of the most recent quarter. This portfolio creates volatility in our
quarterly results. As mentioned in previous quarters, reducing this total to an acceptable level will remain an important focus so that we will be even better positioned to produce consistent core earnings.”
Operating Results
Net interest income for the third quarter 2012 totaled $13.9 million, an increase of $2.6 million from the second quarter 2012 and an increase of $2.4 million from the third quarter 2011, due primarily to our collection of a $2.8 million prepayment fee on a $15 million loan that paid off early. Net interest margin was 4.02 percent, up 70 basis points from the second quarter 2012, and up 77 basis points from 3.25 percent for the third quarter 2011. The margin increases over the prior periods were primarily due to the one-time prepayment fee.
Average interest earning assets for the third quarter 2012 increased $11.1 million from the second quarter 2012 and were down $21.1 million from the third quarter 2011. The increase from the second quarter 2012 reflected the positive impact of our investment portfolio building strategy. The decrease from 2011 reflected the Bank’s continued focus on reduction in credit exposure within certain segments of its loan portfolio.
Non-interest income increased $106,000 in the third quarter 2012 compared to the second quarter 2012 and $179,000 from the third quarter 2011, primarily as a result of increased gains on sales of mortgage loans due to higher origination volume.
Non-interest expense was $12.4 million for the third quarter 2012, compared to $13.9 million for the second quarter 2012 and $15.6 million for the third quarter 2011. The largest fluctuations in non-interest expense related to costs associated with the administration and disposition of problem loans and non-performing assets, which decreased $1.5 million compared to the second quarter 2012 and were down $2.8 million compared to the third quarter 2011. FDIC insurance assessments declined $338,000 compared to the third quarter 2011 due to the reduction in total assets of the Bank, changes to the FDIC assessment methodology and the termination of the Consent Order effective March 2, 2012. Also, other non-interest expense for the third quarter 2012 included a one-time prepayment penalty of $322,000 paid to the FHLB related to the early payoff of $20 million in FHLB advances. This FHLB advance prepayment was executed in response to the early payoff of the $15 million loan discussed above in order to manage the Bank’s interest rate risk profile within appropriate ranges.
Asset Quality
As a result of net recoveries during the third quarter of 2012, along with the consistent improvements in nonperforming loans and past due loans over the past several quarters, and continued shrinkage of the loan portfolio, a negative provision for loan losses of $1.25 million was recorded in the third quarter 2012. Net recoveries for the third quarter 2012 were $341,000, compared to second quarter 2012 net charge-offs of $521,000 and third quarter 2011 net charge-offs of $1.4 million. Total loans past due on payments by 30 days or more amounted to $5.7 million at September 30, 2012, down from $6.9 million at June 30, 2012, $13.1 million at December 31, 2011 and $20.7 million at September 30, 2011.
The allowance for loan losses of $26.3 million was 2.58 percent of total loans at September 30, 2012, compared to 2.62 percent of total loans at June 30, 2012, 2.95 percent at December 31, 2011 and 3.22 percent of total loans at September 30, 2011. While this overall loan coverage ratio declined, the coverage ratio of allowance for loan losses to nonperforming loans continued to significantly improve, well exceeding 1-to-1 coverage at 151.31 percent at September 30, 2012, compared to 143.97 percent at June 30, 2012, 109.31 percent at December 31, 2011 and 99.47 percent at September 30, 2011. This ratio was at its highest level since March 2006.
At September 30, 2012, the Company’s nonperforming loans were $17.4 million, representing 1.70 percent of total loans, the lowest level since the second quarter of 2007. This compares to $18.9 million (1.82 percent of total loans) at June 30, 2012, $28.9 million (2.70 percent of total loans) at December 31, 2011 and $35.0 million (3.24 percent of total loans) at September 30, 2011. Other real estate owned decreased to $57.8 million compared to $66.4 million at December 31, 2011 and decreased $8.7 million from $66.5 million at September 30, 2011. These balances have remained high over these periods but have decreased since peaking at the end of the third quarter of 2011. Total nonperforming assets, including other real estate owned and nonperforming loans, have decreased by $26.4 million, or 26 percent, from September 30, 2011 to September 30, 2012.
Macatawa Bank Corporation 3Q Results / page 3 of 4
A break-down of non-performing loans is shown in the table below.
Dollars in 000s | | September 30, 2012 | | | June 30, 2012 | | | March 31, 2012 | | | December 31, 2011 | | | September 30, 2011 | |
| | | | | | | | | | | | | | | | |
| Commercial Real Estate | | $ | 9,046 | | | $ | 11,117 | | | $ | 12,357 | | | $ | 16,940 | | | $ | 23,107 | |
| Commercial and Industrial | | | 7,206 | | | | 6,173 | | | | 9,188 | | | | 9,560 | | | | 9,875 | |
| Total Commercial Loans | | | 16,252 | | | | 17,290 | | | | 21,545 | | | | 26,500 | | | | 32,982 | |
| Residential Mortgage Loans | | | 771 | | | | 978 | | | | 1,503 | | | | 1,888 | | | | 1,373 | |
| Consumer Loans | | | 339 | | | | 611 | | | | 446 | | | | 558 | | | | 671 | |
| Total Non-Performing Loans | | $ | 17,362 | | | $ | 18,879 | | | $ | 23,494 | | | $ | 28,946 | | | $ | 35,026 | |
| | | | | | | | | | | | | | | | | | | | | |
| Residential Developer Loans (a) | | $ | 5,183 | | | $ | 5,830 | | | $ | 8,172 | | | $ | 8,513 | | | $ | 13,289 | |
| (a) | Represents the amount of loans to residential developers secured by single family residential property which is included in non-performing commercial loans secured by real estate. |
Total non-performing assets were $75.1 million, or 4.95 percent of total assets, at September 30, 2012. A break-down of non-performing assets is shown in the table below.
Dollars in 000s | | September 30, 2012 | | | June 30, 2012 | | | March 31, 2012 | | | December 31, 2011 | | | September 30, 2011 | |
| | | | | | | | | | | | | | | | |
| Non-Performing Loans | | $ | 17,362 | | | $ | 18,879 | | | $ | 23,494 | | | $ | 28,946 | | | $ | 35,026 | |
| Other Repossessed Assets | | | 4 | | | | 0 | | | | 9 | | | | 0 | | | | 26 | |
| Other Real Estate Owned | | | 57,778 | | | | 62,046 | | | | 66,236 | | | | 66,438 | | | | 66,484 | |
| Total Non-Performing Assets | | $ | 75,144 | | | $ | 80,925 | | | $ | 89,739 | | | $ | 95,384 | | | $ | 101,536 | |
Balance Sheet, Liquidity and Capital
Total assets were $1,517.1 million at September 30, 2012, an increase of $9.4 million from $1,507.7 million at December 31, 2011. Total loans were $1,019.2 million at September 30, 2012, down $51.8 million from $1,071.0 million at December 31, 2011.
Commercial loans decreased by $61.1 million during the first nine months of 2012, partially offset by increases of $9.3 million in our residential mortgage and consumer loan portfolios. The commercial real estate portfolio was reduced by $52.8 million during the nine months ended September 30, 2012 as the Company continued its efforts to reduce exposure in these segments. Commercial and industrial loans decreased by $8.2 million during the same period.
The composition of the commercial loan portfolio is shown in the table below:
Dollars in 000s | | September 30, 2012 | | | June 30, 2012 | | | March 31, 2012 | | | December 31, 2011 | | | September 30, 2011 | |
| | | | | | | | | | | | | | | | |
| Construction and Development | | $ | 95,322 | | | $ | 99,271 | | | $ | 101,355 | | | $ | 90,191 | | | $ | 111,244 | |
| Other Commercial Real Estate | | | 420,105 | | | | 432,662 | | | | 443,023 | | | | 478,076 | | | | 486,708 | |
Commercial Loans Secured by Real Estate | | | 515,427 | | | | 531,933 | | | | 544,378 | | | | 568,267 | | | | 597,952 | |
| Commercial and Industrial | | | 218,839 | | | | 221,628 | | | | 228,768 | | | | 227,051 | | | | 221,619 | |
| Total Commercial Loans | | $ | 734,266 | | | $ | 753,561 | | | $ | 773,146 | | | $ | 795,318 | | | $ | 819,571 | |
| | | | | | | | | | | | | | | | | | | | | |
| Residential Developer Loans (a) | | $ | 51,653 | | | $ | 56,756 | | | $ | 61,200 | | | $ | 66,331 | | | $ | 76,772 | |
| (a) | Represents the amount of loans to residential developers secured by single family residential property which is included in commercial loans secured by real estate. |
Macatawa Bank Corporation 3Q Results / page 4 of 4
Total deposits increased to $1,244.7 million at September 30, 2012, up $29.5 million from $1,215.3 million at December 31, 2011. Balances in checking, savings and money market accounts grew by over 18% on an annualized basis during the third quarter of 2012. The Bank continues to be successful at attracting and retaining core deposit customers. Customer deposit accounts remain fully insured to the highest levels available under FDIC deposit insurance.
The Bank’s capital ratios continued to improve in the third quarter 2012. At September 30, 2012, all of the regulatory capital ratios for Macatawa Bank were maintained at levels comfortably above those required to be categorized as “well capitalized” under applicable regulatory capital guidelines. Further, the Company and the Bank’s risk based regulatory capital ratios at September 30, 2012 were at their highest levels in Company history. The Bank was categorized as “well capitalized” at September 30, 2012.
About Macatawa Bank
Headquartered in Holland, Michigan, Macatawa Bank Corporation is the parent company for Macatawa Bank. Through its banking subsidiary, the Company offers a full range of banking, investment and trust services to individuals, businesses, and governmental entities from a network of 26 full service branches located in communities in Kent County, Ottawa County, and northern Allegan County. Services include commercial, consumer and real estate financing, business and personal deposit services, ATM’s and Internet banking services, trust and employee benefit plan services, and various investment services. The Company emphasizes its local management team and decision making, along with providing customers excellent service and superior financial products.
“CAUTIONARY STATEMENT: This press release contains forward-looking statements that are based on management’s current beliefs, expectations, assumptions, estimates, plans and intentions. Forward-looking statements are identifiable by words or phrases such as “will,” “trend,” “continue,” “focus,” “positioned,” “strategy,” “efforts” and other similar words or phrases. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to trends in our credit quality metrics and financial performance, the impact of change in perception of the Bank among our customers and in the community, future levels of profitability, our ability to produce consistent core earnings, and our ability to reduce other real estate owned to an acceptable level. All statements with references to future time periods are forward-looking. Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including goodwill, mortgage servicing rights and deferred tax assets) and other-real-estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. Our ability to sell other-real-estate owned at its carrying value or at all, successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, maintain liquidity, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the real estate, financial and credit markets and the national and regional economy on the banking industry, generally, and Macatawa Bank Corporation, specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extend, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Macatawa Bank Corporation does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Risk factors include, but are not limited to, the risk factors described in “Item 1A - Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
| MACATAWA BANK CORPORATION | | | | | | | | | | | | |
| CONSOLIDATED FINANCIAL SUMMARY | | | | | | | | | | | | |
| (Unaudited) | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| (Dollars in thousands except per share information) | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30 | | | September 30 | | | September 30 | | | September 30 | |
| EARNINGS SUMMARY | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Total interest income | | $ | 16,269 | | | $ | 14,900 | | | $ | 44,267 | | | $ | 46,243 | |
| Total interest expense | | | 2,377 | | | | 3,399 | | | | 7,773 | | | | 11,362 | |
| Net interest income | | | 13,892 | | | | 11,501 | | | | 36,494 | | | | 34,881 | |
| Provision for loan losses | | | (1,250 | ) | | | (1,250 | ) | | | (6,600 | ) | | | (4,700 | ) |
| Net interest income after provision for loan losses | | | 15,142 | | | | 12,751 | | | | 43,094 | | | | 39,581 | |
| | | | | | | | | | | | | | | | | |
| NON-INTEREST INCOME | | | | | | | | | | | | | | | | |
| Deposit service charges | | | 810 | | | | 889 | | | | 2,381 | | | | 2,806 | |
| Net gains on mortgage loans | | | 940 | | | | 697 | | | | 2,192 | | | | 1,393 | |
| Trust fees | | | 595 | | | | 644 | | | | 1,802 | | | | 1,915 | |
| Other | | | 1,761 | | | | 1,697 | | | | 5,442 | | | | 5,107 | |
| Total non-interest income | | | 4,106 | | | | 3,927 | | | | 11,817 | | | | 11,221 | |
| | | | | | | | | | | | | | | | | |
| NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Salaries and benefits | | | 5,621 | | | | 5,668 | | | | 17,065 | | | | 16,615 | |
| Occupancy | | | 948 | | | | 961 | | | | 2,860 | | | | 2,961 | |
| Furniture and equipment | | | 806 | | | | 812 | | | | 2,491 | | | | 2,458 | |
| FDIC assessment | | | 504 | | | | 842 | | | | 1,692 | | | | 2,660 | |
| Administration and disposition of problem assets | | | 1,724 | | | | 4,485 | | | | 7,973 | | | | 12,660 | |
| Other | | | 2,785 | | | | 2,858 | | | | 8,299 | | | | 8,705 | |
| Total non-interest expense | | | 12,388 | | | | 15,626 | | | | 40,380 | | | | 46,059 | |
| Income (loss) before income tax | | | 6,860 | | | | 1,052 | | | | 14,531 | | | | 4,743 | |
| Income tax expense (benefit) | | | 275 | | | | - | | | | 275 | | | | - | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 6,585 | | | $ | 1,052 | | | $ | 14,256 | | | $ | 4,743 | |
| Dividends declared on preferred shares | | | - | | | | - | | | | - | | | | - | |
| Net income (loss) available to common shares | | $ | 6,585 | | | $ | 1,052 | | | $ | 14,256 | | | $ | 4,743 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per common share | | $ | 0.24 | | | $ | 0.04 | | | $ | 0.53 | | | $ | 0.22 | |
| Diluted earnings per common share | | $ | 0.24 | | | $ | 0.04 | | | $ | 0.53 | | | $ | 0.22 | |
| Return on average assets | | | 1.74 | % | | | 0.27 | % | | | 1.26 | % | | | 0.93 | % |
| Return on average equity | | | 25.18 | % | | | 4.52 | % | | | 18.92 | % | | | 18.18 | % |
| Net interest margin | | | 4.02 | % | | | 3.25 | % | | | 3.56 | % | | | 3.29 | % |
| Efficiency ratio | | | 68.83 | % | | | 101.28 | % | | | 83.58 | % | | | 99.91 | % |
| BALANCE SHEET DATA | | September 30 | | | December 31 | | | September 30 | |
| Assets | | 2012 | | | 2011 | | | 2011 | |
| Cash and due from banks | | $ | 22,398 | | | $ | 30,971 | | | $ | 22,878 | |
| Federal funds sold and other short-term investments | | | 211,853 | | | | 212,071 | | | | 230,681 | |
| Securities available for sale | | | 116,128 | | | | 54,746 | | | | 41,987 | |
| Securities held to maturity | | | 4,300 | | | | 300 | | | | - | |
| Federal Home Loan Bank Stock | | | 11,236 | | | | 11,236 | | | | 11,236 | |
| Loans held for sale | | | 11,063 | | | | 1,026 | | | | 5,356 | |
| Total loans | | | 1,019,185 | | | | 1,070,975 | | | | 1,082,512 | |
| Less allowance for loan loss | | | 26,271 | | | | 31,641 | | | | 34,842 | |
| Net loans | | | 992,914 | | | | 1,039,334 | | | | 1,047,670 | |
| Premises and equipment, net | | | 54,057 | | | | 55,358 | | | | 55,597 | |
| Acquisition intangibles | | | - | | | | 64 | | | | 127 | |
| Bank-owned life insurance | | | 26,614 | | | | 25,957 | | | | 25,725 | |
| Other real estate owned | | | 57,778 | | | | 66,438 | | | | 66,484 | |
| Other assets | | | 8,776 | | | | 10,166 | | | | 8,360 | |
| | | | | | | | | | | | | |
| Total Assets | | $ | 1,517,117 | | | $ | 1,507,667 | | | $ | 1,516,101 | |
| | | | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 348,120 | | | $ | 324,253 | | | $ | 319,491 | |
| Interest-bearing deposits | | | 896,628 | | | | 891,036 | | | | 881,067 | |
| Total deposits | | | 1,244,748 | | | | 1,215,289 | | | | 1,200,558 | |
| Other borrowed funds | | | 91,822 | | | | 148,603 | | | | 173,603 | |
| Surbordinated debt | | | 1,650 | | | | 1,650 | | | | 1,650 | |
| Long-term debt | | | 41,238 | | | | 41,238 | | | | 41,238 | |
| Other liabilities | | | 28,228 | | | | 6,461 | | | | 5,723 | |
| Total Liabilities | | | 1,407,686 | | | | 1,413,241 | | | | 1,422,772 | |
| | | | | | | | | | | | | |
| Shareholders' equity | | | 109,431 | | | | 94,426 | | | | 93,329 | |
| | | | | | | | | | | | | |
| Total Liabilities and Shareholders' Equity | | $ | 1,517,117 | | | $ | 1,507,667 | | | $ | 1,516,101 | |
| MACATAWA BANK CORPORATION | | | | | | | | | |
| SELECTED CONSOLIDATED FINANCIAL DATA | | | | | | | | | |
| (Unaudited) | | | | | | | | | |
| | | | | | | | | | |
| (Dollars in thousands except per share information) | | | | | | | | | |
| | Quarterly | | Year to Date |
| | | | | | | | | | |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | | | | |
| | 2012 | 2012 | 2012 | 2011 | 2011 | | 2012 | | 2011 |
| EARNINGS SUMMARY | | | | | | | | | |
| Net interest income | $ 13,892 | $ 11,322 | $ 11,281 | $ 11,419 | $ 11,501 | | $ 36,494 | | $ 34,881 |
| Provision for loan losses | (1,250) | (1,750) | (3,600) | - | (1,250) | | (6,600) | | (4,700) |
| Total non-interest income | 4,106 | 4,000 | 3,711 | 3,670 | 3,927 | | 11,817 | | 11,221 |
| Total non-interest expense | 12,388 | 13,886 | 14,107 | 14,004 | 15,626 | | 40,380 | | 46,059 |
| Federal income tax expense (benefit) | 275 | - | - | - | - | | 275 | | - |
| Net income (loss) | 6,585 | 3,186 | 4,485 | 1,085 | 1,052 | | 14,256 | | 4,743 |
| Dividends declared on preferred shares | - | - | - | - | - | | - | | - |
| Net income (loss) available to common shares | $ 6,585 | $ 3,186 | $ 4,485 | $ 1,085 | $ 1,052 | | $ 14,256 | | $ 4,743 |
| | | | | | �� | | | | |
| Basic earnings per common share | $ 0.24 | $ 0.12 | $ 0.17 | $ 0.04 | $ 0.04 | | $ 0.53 | | $ 0.22 |
| Diluted earnings per common share | $ 0.24 | $ 0.12 | $ 0.17 | $ 0.04 | $ 0.04 | | $ 0.53 | | $ 0.22 |
| | | | | | | | | | |
| MARKET DATA | | | | | | | | | |
| Book value per common share | $ 2.82 | $ 2.56 | $ 2.43 | $ 2.26 | $ 2.22 | | $ 2.82 | | $ 2.22 |
| Tangible book value per common share | $ 2.82 | $ 2.56 | $ 2.43 | $ 2.26 | $ 2.22 | | $ 2.82 | | $ 2.22 |
| Market value per common share | $ 3.09 | $ 3.41 | $ 3.47 | $ 2.28 | $ 2.70 | | $ 3.09 | | $ 2.70 |
| Average basic common shares | 27,082,825 | 27,082,825 | 27,082,825 | 27,082,834 | 27,082,823 | | 27,082,825 | | 21,276,467 |
| Average diluted common shares | 27,082,825 | 27,082,825 | 27,082,825 | 27,082,834 | 27,082,823 | | 27,082,825 | | 21,276,467 |
| Period end common shares | 27,082,825 | 27,082,825 | 27,082,825 | 27,082,823 | 27,082,823 | | 27,082,825 | | 27,082,823 |
| | | | | | | | | | |
| PERFORMANCE RATIOS | | | | | | | | | |
| Return on average assets | 1.74% | 0.85% | 1.20% | 0.29% | 0.27% | | 1.26% | | 0.93% |
| Return on average equity | 25.18% | 12.59% | 18.78% | 4.61% | 4.52% | | 18.92% | | 18.18% |
| Net interest margin (fully taxable equivalent) | 4.02% | 3.32% | 3.32% | 3.28% | 3.25% | | 3.56% | | 3.29% |
| Efficiency ratio | 68.83% | 90.63% | 94.10% | 92.81% | 101.28% | | 83.58% | | 99.91% |
| Full-time equivalent employees (period end) | 364 | 373 | 382 | 392 | 396 | | 364 | | 396 |
| | | | | | | | | | |
| ASSET QUALITY | | | | | | | | | |
| Gross charge-offs | $ 615 | $ 899 | $ 3,497 | $ 4,196 | $ 3,693 | | $ 5,011 | | $ 12,255 |
| Net charge-offs | $ (341) | $ 521 | $ (1,410) | $ 3,201 | $ 1,385 | | $ (1,230) | | $ 7,884 |
| Net charge-offs to average loans (annualized) | -0.13% | 0.20% | -0.53% | 1.19% | 0.51% | | -0.16% | | 0.92% |
| Nonperforming loans | $ 17,362 | $ 18,879 | $ 23,494 | $ 28,946 | $ 35,026 | | $ 17,362 | | $ 35,026 |
| Other real estate and repossessed assets | $ 57,782 | $ 62,046 | $ 66,245 | $ 66,438 | $ 66,510 | | $ 57,782 | | $ 66,510 |
| Nonperforming loans to total loans | 1.70% | 1.82% | 2.22% | 2.70% | 3.24% | | 1.70% | | 3.24% |
| Nonperforming assets to total assets | 4.95% | 5.33% | 5.97% | 6.33% | 6.70% | | 4.95% | | 6.70% |
| Allowance for loan losses | $ 26,271 | $ 27,180 | $ 29,451 | $ 31,641 | $ 34,842 | | $ 26,271 | | $ 34,842 |
| Allowance for loan losses to total loans | 2.58% | 2.62% | 2.78% | 2.95% | 3.22% | | 2.58% | | 3.22% |
| Allowance for loan losses to nonperforming loans | 151.31% | 143.97% | 125.36% | 109.31% | 99.47% | | 151.31% | | 99.47% |
| | | | | | | | | | |
| CAPITAL & LIQUIDITY | | | | | | | | | |
| Average equity to average assets | 6.90% | 6.73% | 6.38% | 6.21% | 6.08% | | 6.67% | | 5.09% |
| Tier 1 capital to average assets (Consolidated) | 9.53% | 9.00% | 8.75% | 8.25% | 8.07% | | 9.53% | | 8.07% |
| Total capital to risk-weighted assets (Consolidated) | 14.91% | 14.18% | 13.66% | 13.15% | 12.92% | | 14.91% | | 12.92% |
| Tier 1 capital to average assets (Bank) | 9.50% | 9.09% | 8.87% | 8.43% | 8.23% | | 9.50% | | 8.23% |
| Total capital to risk-weighted assets (Bank) | 14.35% | 13.57% | 13.02% | 12.46% | 12.19% | | 14.35% | | 12.19% |
| | | | | | | | | | |
| END OF PERIOD BALANCES | | | | | | | | | |
| Total portfolio loans | $ 1,019,185 | $ 1,036,965 | $ 1,059,935 | $ 1,070,975 | $ 1,082,512 | | $ 1,019,185 | | $ 1,082,512 |
| Earning assets | 1,368,615 | 1,364,592 | 1,349,078 | 1,349,556 | 1,371,062 | | 1,368,615 | | 1,371,062 |
| Total assets | 1,517,117 | 1,520,335 | 1,502,994 | 1,507,667 | 1,516,101 | | 1,517,117 | | 1,516,101 |
| Deposits | 1,244,748 | 1,235,517 | 1,214,471 | 1,215,289 | 1,200,558 | | 1,244,748 | | 1,200,558 |
| Total shareholders' equity | 109,431 | 102,399 | 98,887 | 94,426 | 93,329 | | 109,431 | | 93,329 |
| | | | | | | | | | |
| AVERAGE BALANCES | | | | | | | | | |
| Total portfolio loans | $ 1,028,199 | $ 1,047,248 | $ 1,064,158 | $ 1,074,574 | $ 1,087,849 | | $ 1,046,468 | | $ 1,136,455 |
| Earning assets | 1,367,166 | 1,356,054 | 1,350,282 | 1,371,149 | 1,388,236 | | 1,357,868 | | 1,400,282 |
| Total assets | 1,516,374 | 1,505,217 | 1,498,015 | 1,515,570 | 1,531,695 | | 1,506,571 | | 1,536,870 |
| Deposits | 1,245,112 | 1,222,837 | 1,205,283 | 1,201,848 | 1,215,138 | | 1,224,486 | | 1,231,659 |
| Total shareholders' equity | 104,609 | 101,236 | 95,524 | 94,164 | 93,090 | | 100,472 | | 78,278 |
