EXHIBIT 99.3 – Supplemental, Unaudited Financial Information
| AVAILABLE-FOR-SALE SECURITIES | September 30, 2014 | June 30, 2014 | December 31, 2013 | |||||||||||||||||||||
| (In Thousands) | Amortized | Fair | Amortized | Fair | Amortized | Fair | ||||||||||||||||||
| Cost | Value | Cost | Value | Cost | Value | |||||||||||||||||||
| Obligations of U.S. Government agencies | $ | 27,237 | $ | 26,416 | $ | 29,162 | $ | 28,452 | $ | 47,382 | $ | 45,877 | ||||||||||||
| Obligations of states and political subdivisions: | ||||||||||||||||||||||||
| Tax-exempt | 123,336 | 128,292 | 123,140 | 127,593 | 127,748 | 128,426 | ||||||||||||||||||
| Taxable | 34,136 | 34,203 | 34,577 | 34,717 | 35,154 | 34,471 | ||||||||||||||||||
| Mortgage-backed securities | 74,278 | 75,513 | 91,051 | 93,613 | 84,849 | 86,208 | ||||||||||||||||||
| Collateralized mortgage obligations, Issued by U.S. Government agencies | 236,940 | 234,816 | 219,858 | 218,506 | 182,372 | 178,092 | ||||||||||||||||||
| Other collateralized debt obligations | 660 | 660 | 660 | 660 | 660 | 660 | ||||||||||||||||||
| Total debt securities | 496,587 | 499,900 | 498,448 | 503,541 | 478,165 | 473,734 | ||||||||||||||||||
| Marketable equity securities | 5,605 | 8,353 | 6,122 | 9,207 | 6,038 | 8,924 | ||||||||||||||||||
| Total | $ | 502,192 | $ | 508,253 | $ | 504,570 | $ | 512,748 | $ | 484,203 | $ | 482,658 | ||||||||||||
| Summary of Loans by Type | ||||||||||||||||
| (Excludes Loans Held for Sale) | ||||||||||||||||
| (In Thousands) | Sept. 30, | June 30, | Dec. 31, | Sept. 30, | ||||||||||||
| 2014 | 2014 | 2013 | 2013 | |||||||||||||
| Residential mortgage: | ||||||||||||||||
| Residential mortgage loans - first liens | $ | 290,943 | $ | 291,690 | $ | 299,831 | $ | 301,794 | ||||||||
| Residential mortgage loans - junior liens | 21,843 | 22,401 | 23,040 | 24,079 | ||||||||||||
| Home equity lines of credit | 35,975 | 34,633 | 34,530 | 34,360 | ||||||||||||
| 1-4 Family residential construction | 16,895 | 13,948 | 13,909 | 15,746 | ||||||||||||
| Total residential mortgage | 365,656 | 362,672 | 371,310 | 375,979 | ||||||||||||
| Commercial: | ||||||||||||||||
| Commercial loans secured by real estate | 144,410 | 145,934 | 147,215 | 151,602 | ||||||||||||
| Commercial and industrial | 50,615 | 46,778 | 42,387 | 44,312 | ||||||||||||
| Political subdivisions | 14,823 | 11,617 | 16,291 | 13,905 | ||||||||||||
| Commercial construction and land | 9,069 | 8,550 | 17,003 | 21,630 | ||||||||||||
| Loans secured by farmland | 8,542 | 8,380 | 10,468 | 10,711 | ||||||||||||
| Multi-family (5 or more) residential | 9,092 | 10,548 | 10,985 | 5,994 | ||||||||||||
| Agricultural loans | 3,284 | 3,116 | 3,251 | 3,085 | ||||||||||||
| Other commercial loans | 13,620 | 13,816 | 14,631 | 9,858 | ||||||||||||
| Total commercial | 253,455 | 248,739 | 262,231 | 261,097 | ||||||||||||
| Consumer | 10,298 | 10,203 | 10,762 | 11,399 | ||||||||||||
| Total | 629,409 | 621,614 | 644,303 | 648,475 | ||||||||||||
| Less: allowance for loan losses | (7,449 | ) | (7,267 | ) | (8,663 | ) | (7,130 | ) | ||||||||
| Loans, net | $ | 621,960 | $ | 614,347 | $ | 635,640 | $ | 641,345 | ||||||||
| Loans Held for Sale | ||||||||||||||||
| (In Thousands) | Sept. 30, | June 30, | Dec. 31, | Sept. 30, | ||||||||||||
| 2014 | 2014 | 2013 | 2013 | |||||||||||||
| Residential mortgage loans originated and serviced - outstanding balance | $ | 151,113 | $ | 150,725 | $ | 146,008 | $ | 138,875 | ||||||||
| Less: outstanding balance of loans sold | (150,695 | ) | (150,725 | ) | (145,954 | ) | (138,074 | ) | ||||||||
| Loans held for sale, net | $ | 418 | $ | 0 | $ | 54 | $ | 801 | ||||||||
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(In Thousands)
| 3 Months | 3 Months | 9 Months | 9 Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Sept. 30, | June 30, | Sept. 30, | Sept. 30, | |||||||||||||
| 2014 | 2014 | 2014 | 2013 | |||||||||||||
| Balance, beginning of period | $ | 7,267 | $ | 8,343 | $ | 8,663 | $ | 6,857 | ||||||||
| Charge-offs | (61 | ) | (1,546 | ) | (1,881 | ) | (619 | ) | ||||||||
| Recoveries | 25 | 24 | 314 | 404 | ||||||||||||
| Net charge-offs | (36 | ) | (1,522 | ) | (1,567 | ) | (215 | ) | ||||||||
| Provision for loan losses | 218 | 446 | 353 | 488 | ||||||||||||
| Balance, end of period | $ | 7,449 | $ | 7,267 | $ | 7,449 | $ | 7,130 | ||||||||
PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS
AND TROUBLED DEBT RESTRUCTURINGS (TDRs)
(In Thousands)
| Sept. 30, | June 30, | Dec 31, | Sept. 30, | |||||||||||||
| 2014 | 2014 | 2013 | 2013 | |||||||||||||
| Impaired loans with a valuation allowance | $ | 4,059 | $ | 3,804 | $ | 9,889 | $ | 4,553 | ||||||||
| Impaired loans without a valuation allowance | 10,035 | 10,258 | 6,432 | 5,703 | ||||||||||||
| Total impaired loans | $ | 14,094 | $ | 14,062 | $ | 16,321 | $ | 10,256 | ||||||||
| Total loans past due 30-89 days and still accruing | $ | 5,458 | $ | 4,837 | $ | 8,305 | $ | 7,260 | ||||||||
| Nonperforming assets: | ||||||||||||||||
| Total nonaccrual loans | $ | 13,722 | $ | 13,598 | $ | 14,934 | $ | 6,760 | ||||||||
| Total loans past due 90 days or more and still accruing | 2,602 | 3,050 | 3,131 | 2,668 | ||||||||||||
| Total nonperforming loans | 16,324 | 16,648 | 18,065 | 9,428 | ||||||||||||
| Foreclosed assets held for sale (real estate) | 1,888 | 1,419 | 892 | 776 | ||||||||||||
| Total nonperforming assets | $ | 18,212 | $ | 18,067 | $ | 18,957 | $ | 10,204 | ||||||||
| Loans subject to troubled debt restructurings (TDRs): | ||||||||||||||||
| Performing | $ | 1,834 | $ | 2,069 | $ | 3,267 | $ | 2,160 | ||||||||
| Nonperforming | 6,172 | 6,038 | 908 | 926 | ||||||||||||
| Total TDRs | $ | 8,006 | $ | 8,107 | $ | 4,175 | $ | 3,086 | ||||||||
| Total nonperforming loans as a % of loans | 2.59 | % | 2.68 | % | 2.80 | % | 1.45 | % | ||||||||
| Total nonperforming assets as a % of assets | 1.45 | % | 1.44 | % | 1.53 | % | 0.83 | % | ||||||||
| Allowance for loan losses as a % of total loans | 1.18 | % | 1.17 | % | 1.34 | % | 1.10 | % | ||||||||
| Allowance for loan losses as a % of nonperforming loans | 45.63 | % | 43.65 | % | 47.95 | % | 75.63 | % | ||||||||
Analysis of Average Daily Balances and Rates
(Dollars in Thousands)
| 3 Months | 3 Months | 3 Months | ||||||||||||||||||||||
| Ended | Rate of | Ended | Rate of | Ended | Rate of | |||||||||||||||||||
| 9/30/2014 | Return/ | 6/30/2014 | Return/ | 9/30/2013 | Return/ | |||||||||||||||||||
| Average | Cost of | Average | Cost of | Average | Cost of | |||||||||||||||||||
| Balance | Funds % | Balance | Funds % | Balance | Funds % | |||||||||||||||||||
| EARNING ASSETS | ||||||||||||||||||||||||
| Available-for-sale securities, at amortized cost: | ||||||||||||||||||||||||
| Taxable | $ | 381,833 | 2.16 | % | $ | 372,666 | 2.18 | % | $ | 335,439 | 2.04 | % | ||||||||||||
| Tax-exempt | 123,949 | 5.22 | % | 123,568 | 5.35 | % | 130,831 | 5.48 | % | |||||||||||||||
| Total available-for-sale securities | 505,782 | 2.91 | % | 496,234 | 2.97 | % | 466,270 | 3.00 | % | |||||||||||||||
| Interest-bearing due from banks | 35,133 | 0.37 | % | 33,106 | 0.39 | % | 24,795 | 0.40 | % | |||||||||||||||
| Federal funds sold | 0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | |||||||||||||||
| Loans held for sale | 263 | 7.54 | % | 282 | 7.11 | % | 1,032 | 5.38 | % | |||||||||||||||
| Loans receivable: | ||||||||||||||||||||||||
| Taxable | 587,799 | 5.43 | % | 585,593 | 5.54 | % | 615,318 | 5.64 | % | |||||||||||||||
| Tax-exempt | 38,537 | 5.48 | % | 36,422 | 5.62 | % | 34,712 | 5.87 | % | |||||||||||||||
| Total loans receivable | 626,336 | 5.43 | % | 622,015 | 5.54 | % | 650,030 | 5.65 | % | |||||||||||||||
| Total Earning Assets | 1,167,514 | 4.19 | % | 1,151,637 | 4.29 | % | 1,142,127 | 4.46 | % | |||||||||||||||
| Cash | 17,361 | 17,484 | 17,698 | |||||||||||||||||||||
| Unrealized gain/loss on securities | 7,810 | 6,539 | 1,688 | |||||||||||||||||||||
| Allowance for loan losses | (7,332 | ) | (8,402 | ) | (7,258 | ) | ||||||||||||||||||
| Bank premises and equipment | 16,581 | 16,889 | 17,950 | |||||||||||||||||||||
| Intangible Asset - Core Deposit Intangible | 64 | 75 | 105 | |||||||||||||||||||||
| Intangible Asset - Goodwill | 11,942 | 11,942 | 11,942 | |||||||||||||||||||||
| Other assets | 40,201 | 40,965 | 43,690 | |||||||||||||||||||||
| Total Assets | $ | 1,254,141 | $ | 1,237,129 | $ | 1,227,942 | ||||||||||||||||||
| INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Interest checking | $ | 186,034 | 0.12 | % | $ | 179,018 | 0.12 | % | $ | 172,010 | 0.12 | % | ||||||||||||
| Money market | 202,536 | 0.14 | % | 198,753 | 0.15 | % | 205,168 | 0.14 | % | |||||||||||||||
| Savings | 123,447 | 0.10 | % | 121,741 | 0.10 | % | 116,474 | 0.10 | % | |||||||||||||||
| Certificates of deposit | 137,136 | 0.76 | % | 138,250 | 0.81 | % | 144,689 | 0.99 | % | |||||||||||||||
| Individual Retirement Accounts | 120,079 | 0.40 | % | 120,987 | 0.39 | % | 127,526 | 0.40 | % | |||||||||||||||
| Other time deposits | 1,525 | 0.00 | % | 1,138 | 0.00 | % | 1,556 | 0.25 | % | |||||||||||||||
| Total interest-bearing deposits | 770,757 | 0.28 | % | 759,887 | 0.29 | % | 767,423 | 0.33 | % | |||||||||||||||
| Borrowed funds: | ||||||||||||||||||||||||
| Short-term | 5,325 | 0.07 | % | 4,766 | 0.08 | % | 7,944 | 0.15 | % | |||||||||||||||
| Long-term | 73,162 | 4.03 | % | 73,232 | 4.03 | % | 73,436 | 4.03 | % | |||||||||||||||
| Total borrowed funds | 78,487 | 3.76 | % | 77,998 | 3.79 | % | 81,380 | 3.65 | % | |||||||||||||||
| Total Interest-bearing Liabilities | 849,244 | 0.60 | % | 837,885 | 0.62 | % | 848,803 | 0.65 | % | |||||||||||||||
| Demand deposits | 208,773 | 204,664 | 191,393 | |||||||||||||||||||||
| Other liabilities | 10,975 | 7,971 | 10,030 | |||||||||||||||||||||
| Total Liabilities | 1,068,992 | 1,050,520 | 1,050,226 | |||||||||||||||||||||
| Stockholders' equity, excluding other comprehensive income/loss | 180,042 | 182,258 | 176,772 | |||||||||||||||||||||
| Other comprehensive income/loss | 5,107 | 4,351 | 944 | |||||||||||||||||||||
| Total Stockholders' Equity | 185,149 | 186,609 | 177,716 | |||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,254,141 | $ | 1,237,129 | $ | 1,227,942 | ||||||||||||||||||
| Interest Rate Spread | 3.59 | % | 3.67 | % | 3.81 | % | ||||||||||||||||||
| Net Interest Income/Earning Assets | 3.75 | % | 3.84 | % | 3.97 | % | ||||||||||||||||||
| Total Deposits (Interest-bearing and Demand) | $ | 979,530 | $ | 964,551 | $ | 958,816 | ||||||||||||||||||
(1) Rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 35%.
(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.
Analysis of Average Daily Balances and Rates
(Dollars in Thousands)
| 9 Months | 9 Months | |||||||||||||||
| Ended | Rate of | Ended | Rate of | |||||||||||||
| 9/30/2014 | Return/ | 9/30/2013 | Return/ | |||||||||||||
| Average | Cost of | Average | Cost of | |||||||||||||
| Balance | Funds % | Balance | Funds % | |||||||||||||
| EARNING ASSETS | ||||||||||||||||
| Available-for-sale securities, at amortized cost: | ||||||||||||||||
| Taxable | $ | 366,853 | 2.18 | % | $ | 324,839 | 2.16 | % | ||||||||
| Tax-exempt | 124,508 | 5.34 | % | 131,053 | 5.66 | % | ||||||||||
| Total available-for-sale securities | 491,361 | 2.98 | % | 455,892 | 3.17 | % | ||||||||||
| Interest-bearing due from banks | 32,798 | 0.39 | % | 25,808 | 0.39 | % | ||||||||||
| Federal funds sold | 0 | 0.00 | % | 6 | 0.00 | % | ||||||||||
| Loans held for sale | 222 | 7.83 | % | 1,333 | 4.71 | % | ||||||||||
| Loans receivable: | ||||||||||||||||
| Taxable | 589,607 | 5.47 | % | 625,527 | 5.77 | % | ||||||||||
| Tax-exempt | 38,203 | 5.64 | % | 35,617 | 5.85 | % | ||||||||||
| Total loans receivable | 627,810 | 5.48 | % | 661,144 | 5.77 | % | ||||||||||
| Total Earning Assets | 1,152,191 | 4.27 | % | 1,144,183 | 4.61 | % | ||||||||||
| Cash | 17,052 | 16,919 | ||||||||||||||
| Unrealized gain/loss on securities | 5,719 | 10,539 | ||||||||||||||
| Allowance for loan losses | (8,166 | ) | (7,205 | ) | ||||||||||||
| Bank premises and equipment | 16,915 | 18,316 | ||||||||||||||
| Intangible Asset - Core Deposit Intangible | 74 | 119 | ||||||||||||||
| Intangible Asset - Goodwill | 11,942 | 11,942 | ||||||||||||||
| Other assets | 41,156 | 43,400 | ||||||||||||||
| Total Assets | $ | 1,236,883 | $ | 1,238,213 | ||||||||||||
| INTEREST-BEARING LIABILITIES | ||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||
| Interest checking | $ | 181,580 | 0.12 | % | $ | 171,180 | 0.12 | % | ||||||||
| Money market | 198,987 | 0.14 | % | 203,925 | 0.14 | % | ||||||||||
| Savings | 121,257 | 0.10 | % | 116,745 | 0.10 | % | ||||||||||
| Certificates of deposit | 136,748 | 0.81 | % | 151,630 | 1.06 | % | ||||||||||
| Individual Retirement Accounts | 121,143 | 0.39 | % | 130,633 | 0.45 | % | ||||||||||
| Other time deposits | 1,161 | 0.00 | % | 1,190 | 0.11 | % | ||||||||||
| Total interest-bearing deposits | 760,876 | 0.29 | % | 775,303 | 0.36 | % | ||||||||||
| Borrowed funds: | ||||||||||||||||
| Short-term | 6,696 | 0.14 | % | 5,963 | 0.13 | % | ||||||||||
| Long-term | 73,231 | 4.03 | % | 76,761 | 4.02 | % | ||||||||||
| Total borrowed funds | 79,927 | 3.71 | % | 82,724 | 3.74 | % | ||||||||||
| Total Interest-bearing Liabilities | 840,803 | 0.61 | % | 858,027 | 0.69 | % | ||||||||||
| Demand deposits | 202,336 | 189,823 | ||||||||||||||
| Other liabilities | 9,045 | 9,070 | ||||||||||||||
| Total Liabilities | 1,052,184 | 1,056,920 | ||||||||||||||
| Stockholders' equity, excluding other comprehensive income/loss | 180,912 | 174,726 | ||||||||||||||
| Other comprehensive income/loss | 3,787 | 6,567 | ||||||||||||||
| Total Stockholders' Equity | 184,699 | 181,293 | ||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,236,883 | $ | 1,238,213 | ||||||||||||
| Interest Rate Spread | 3.66 | % | 3.92 | % | ||||||||||||
| Net Interest Income/Earning Assets | 3.82 | % | 4.10 | % | ||||||||||||
| Total Deposits (Interest-bearing and Demand) | $ | 963,212 | $ | 965,126 | ||||||||||||
(1) Rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 35%.
(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.
| COMPARISON OF NONINTEREST INCOME | ||||||||||||||||||||
| (In Thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||||
| Sept. 30, | June 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| Service charges on deposit accounts | $ | 1,275 | $ | 1,314 | $ | 1,357 | $ | 3,812 | $ | 3,825 | ||||||||||
| Service charges and fees | 144 | 134 | 165 | 405 | 444 | |||||||||||||||
| Trust and financial management revenue | 1,140 | 1,138 | 1,033 | 3,325 | 3,022 | |||||||||||||||
| Brokerage revenue | 213 | 242 | 205 | 682 | 586 | |||||||||||||||
| Insurance commissions, fees and premiums | 44 | 27 | 32 | 103 | 136 | |||||||||||||||
| Interchange revenue from debit card transactions | 504 | 517 | 484 | 1,474 | 1,453 | |||||||||||||||
| Net gains from sales of loans | 141 | 265 | 504 | 557 | 1,560 | |||||||||||||||
| (Decrease) increase in fair value of servicing rights | (17 | ) | (53 | ) | 79 | 35 | 84 | |||||||||||||
| Increase in cash surrender value of life insurance | 99 | 91 | 109 | 278 | 301 | |||||||||||||||
| Net gain (loss) from premises and equipment | 9 | (1 | ) | 14 | 8 | 14 | ||||||||||||||
| Other operating income | 335 | 306 | 311 | 939 | 902 | |||||||||||||||
| Total other operating income, before realized gains on available-for-sale securities, net | $ | 3,887 | $ | 3,980 | $ | 4,293 | $ | 11,618 | $ | 12,327 | ||||||||||
| COMPARISON OF NONINTEREST EXPENSE | ||||||||||||||||||||
| (In Thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||||
| Sept. 30, | June 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| Salaries and wages | $ | 4,348 | $ | 3,646 | $ | 3,536 | $ | 11,559 | $ | 10,771 | ||||||||||
| Pensions and other employee benefits | 1,091 | 1,153 | 876 | 3,563 | 3,165 | |||||||||||||||
| Occupancy expense, net | 646 | 641 | 626 | 2,002 | 1,859 | |||||||||||||||
| Furniture and equipment expense | 461 | 466 | 487 | 1,399 | 1,464 | |||||||||||||||
| FDIC Assessments | 151 | 146 | 151 | 444 | 450 | |||||||||||||||
| Pennsylvania shares tax | 336 | 337 | 350 | 1,014 | 1,051 | |||||||||||||||
| Professional fees | 135 | 144 | 806 | 427 | 1,424 | |||||||||||||||
| Automated teller machine and interchange expense | 239 | 218 | 218 | 668 | 802 | |||||||||||||||
| Software subscriptions | 184 | 201 | 209 | 575 | 641 | |||||||||||||||
| Other operating expense | 1,445 | 1,395 | 1,351 | 4,256 | 4,056 | |||||||||||||||
| Total noninterest expense, before loss on prepayment of borrowings | 9,036 | 8,347 | 8,610 | 25,907 | 25,683 | |||||||||||||||
| Loss on prepayment of borrowings | 0 | 0 | 0 | 0 | 1,023 | |||||||||||||||
| Total noninterest expense | $ | 9,036 | $ | 8,347 | $ | 8,610 | $ | 25,907 | $ | 26,706 | ||||||||||