EXHIBIT 99.3 – Supplemental, Unaudited Financial Information
| CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||
| (In Thousands, Except Per Share Data) (Unaudited) | ||||||||||||
| 3 MONTHS ENDED | % | |||||||||||
| MARCH 31, | INCREASE | |||||||||||
| 2016 | 2015 | (DECREASE) | ||||||||||
| EARNINGS PERFORMANCE | ||||||||||||
| Net Income | $ | 3,573 | $ | 3,815 | -6.34 | % | ||||||
| Return on Average Assets | 1.18 | % | 1.23 | % | -4.07 | % | ||||||
| Return on Average Equity | 7.60 | % | 8.08 | % | -5.94 | % | ||||||
| BALANCE SHEET HIGHLIGHTS | ||||||||||||
| Total Assets | $ | 1,216,544 | $ | 1,251,958 | -2.83 | % | ||||||
| Available-for-Sale Securities | 413,606 | 527,814 | -21.64 | % | ||||||||
| Loans (Net) | 693,944 | 621,211 | 11.71 | % | ||||||||
| Allowance for Loan Losses | 7,661 | 7,134 | 7.39 | % | ||||||||
| Deposits and Repo Sweep Accounts | 962,989 | 982,474 | -1.98 | % | ||||||||
| OFF-BALANCE SHEET | ||||||||||||
| Outstanding Balance of Mortgage Loans Sold | ||||||||||||
| with Servicing Retained | 153,778 | 151,272 | 1.66 | % | ||||||||
| Trust Assets Under Management | 826,470 | 832,550 | -0.73 | % | ||||||||
| SHAREHOLDERS' VALUE | ||||||||||||
| (PER COMMON SHARE) | ||||||||||||
| Net Income - Basic | $ | 0.29 | $ | 0.31 | -6.45 | % | ||||||
| Net Income - Diluted | $ | 0.29 | $ | 0.31 | -6.45 | % | ||||||
| Dividends | $ | 0.26 | $ | 0.26 | 0.00 | % | ||||||
| Common Book Value | $ | 15.59 | $ | 15.51 | 0.52 | % | ||||||
| Tangible Common Book Value | $ | 14.60 | $ | 14.53 | 0.48 | % | ||||||
| Market Value (Last Trade) | $ | 19.88 | $ | 20.18 | -1.49 | % | ||||||
| Market Value / Common Book Value | 127.52 | % | 130.11 | % | -1.99 | % | ||||||
| Market Value / Tangible Common Book Value | 136.16 | % | 138.89 | % | -1.97 | % | ||||||
| Price Earnings Multiple (Annualized) | 17.14 | 16.27 | 5.35 | % | ||||||||
| Dividend Yield (Annualized) | 5.23 | % | 5.15 | % | 1.55 | % | ||||||
| Common Shares Outstanding, End of Period | 12,081,030 | 12,193,184 | -0.92 | % | ||||||||
| SAFETY AND SOUNDNESS | ||||||||||||
| Tangible Common Equity / Tangible Assets | 14.64 | % | 14.28 | % | 2.52 | % | ||||||
| Nonperforming Assets / Total Assets | 1.36 | % | 1.33 | % | 2.26 | % | ||||||
| Allowance for Loan Losses / Total Loans | 1.09 | % | 1.14 | % | -4.39 | % | ||||||
| Total Risk Based Capital Ratio (a) | 24.05 | % | 25.19 | % | -3.14 | % | ||||||
| Tier 1 Risk Based Capital Ratio (a) | 22.99 | % | 23.98 | % | -2.88 | % | ||||||
| Common Equity Tier 1 Risk Based Capital Ratio (a) | 22.99 | % | 23.98 | % | -2.88 | % | ||||||
| Leverage Ratio (a) | 14.27 | % | 13.86 | % | 3.25 | % | ||||||
| AVERAGE BALANCES | ||||||||||||
| Average Assets | $ | 1,214,392 | $ | 1,242,025 | -2.22 | % | ||||||
| Average Equity | $ | 188,007 | $ | 188,841 | -0.44 | % | ||||||
| (a) Capital ratios for the most recent period are estimated. |
1
| QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION | ||||||||||||||||||||
| (In Thousands) (Unaudited) | For the Three Months Ended: | |||||||||||||||||||
| Mar. 31, | Dec. 31, | Sept. 30, | June 30, | Mar. 31, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Interest income | $ | 10,937 | $ | 11,036 | $ | 11,134 | $ | 11,186 | $ | 11,163 | ||||||||||
| Interest expense | 904 | 1,087 | 1,126 | 1,176 | 1,213 | |||||||||||||||
| Net interest income | 10,033 | 9,949 | 10,008 | 10,010 | 9,950 | |||||||||||||||
| Provision for loan losses | 368 | 319 | 302 | 221 | 3 | |||||||||||||||
| Net interest income after provision | ||||||||||||||||||||
| for loan losses | 9,665 | 9,630 | 9,706 | 9,789 | 9,947 | |||||||||||||||
| Other income | 3,690 | 3,999 | 3,961 | 3,962 | 3,556 | |||||||||||||||
| Net gains on available-for-sale securities | 383 | 1,776 | 79 | 932 | 74 | |||||||||||||||
| Loss on prepayment of borrowings | 0 | 1,663 | 0 | 910 | 0 | |||||||||||||||
| Other expenses | 9,072 | 8,416 | 8,117 | 7,964 | 8,533 | |||||||||||||||
| Income before income tax provision | 4,666 | 5,326 | 5,629 | 5,809 | 5,044 | |||||||||||||||
| Income tax provision | 1,093 | 1,261 | 1,395 | 1,452 | 1,229 | |||||||||||||||
| Net income | $ | 3,573 | $ | 4,065 | $ | 4,234 | $ | 4,357 | $ | 3,815 | ||||||||||
| Net income per share – basic | $ | 0.29 | $ | 0.33 | $ | 0.35 | $ | 0.36 | $ | 0.31 | ||||||||||
| Net income per share – diluted | $ | 0.29 | $ | 0.33 | $ | 0.35 | $ | 0.36 | $ | 0.31 | ||||||||||
| QUARTERLY CONDENSED, CONSOLIDATED BALANCE SHEET INFORMATION | ||||||||||||
| (In Thousands) (Unaudited) | As of: | |||||||||||
| Mar. 31, | Dec. 31, | Mar. 31, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| ASSETS | ||||||||||||
| Cash & Due from Banks | $ | 41,173 | $ | 36,061 | $ | 36,430 | ||||||
| Available-for-Sale Securities | 413,606 | 420,290 | 527,814 | |||||||||
| Loans Held for Sale | 526 | 280 | 214 | |||||||||
| Loans, Net | 693,944 | 696,991 | 621,211 | |||||||||
| Intangible Assets | 11,969 | 11,972 | 11,989 | |||||||||
| Other Assets | 55,326 | 57,823 | 54,300 | |||||||||
| TOTAL ASSETS | $ | 1,216,544 | $ | 1,223,417 | $ | 1,251,958 | ||||||
| LIABILITIES | ||||||||||||
| Deposits | $ | 955,848 | $ | 935,615 | $ | 976,634 | ||||||
| Repo Sweep Accounts | 7,141 | 4,915 | 5,840 | |||||||||
| Total Deposits and Repo Sweeps | 962,989 | 940,530 | 982,474 | |||||||||
| Borrowed Funds | 57,503 | 87,348 | 72,988 | |||||||||
| Other Liabilities | 7,742 | 8,052 | 7,393 | |||||||||
| TOTAL LIABILITIES | 1,028,234 | 1,035,930 | 1,062,855 | |||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||
| Common Shareholders' Equity, Excluding | ||||||||||||
| Accumulated Other Comprehensive Income/ Loss | 182,914 | 184,959 | 181,437 | |||||||||
| Accumulated Other Comprehensive Income/ Loss: | ||||||||||||
| Net Unrealized Gains/Losses on | ||||||||||||
| Available-for-sale Securities | 5,347 | 2,493 | 7,654 | |||||||||
| Defined Benefit Plans Adjustment, Net | 49 | 35 | 12 | |||||||||
| TOTAL SHAREHOLDERS' EQUITY | 188,310 | 187,487 | 189,103 | |||||||||
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 1,216,544 | $ | 1,223,417 | $ | 1,251,958 | ||||||
2
| AVAILABLE-FOR-SALE SECURITIES | March 31, 2016 | December 31, 2015 | ||||||||||||||
| (In Thousands) | Amortized | Fair | Amortized | Fair | ||||||||||||
| Cost | Value | Cost | Value | |||||||||||||
| Obligations of U.S. Government agencies | $ | 10,661 | $ | 10,707 | $ | 10,663 | $ | 10,483 | ||||||||
| Obligations of states and political subdivisions: | ||||||||||||||||
| Tax-exempt | 107,269 | 111,959 | 103,414 | 107,757 | ||||||||||||
| Taxable | 34,249 | 35,094 | 34,317 | 34,597 | ||||||||||||
| Mortgage-backed securities | 72,210 | 73,243 | 73,227 | 73,343 | ||||||||||||
| Collateralized mortgage obligations, | ||||||||||||||||
| Issued by U.S. Government agencies | 179,731 | 180,860 | 193,145 | 191,715 | ||||||||||||
| Other collateralized debt obligations | 7 | 7 | 9 | 9 | ||||||||||||
| Total debt securities | 404,127 | 411,870 | 414,775 | 417,904 | ||||||||||||
| Marketable equity securities | 1,253 | 1,736 | 1,680 | 2,386 | ||||||||||||
| Total | $ | 405,380 | $ | 413,606 | $ | 416,455 | $ | 420,290 | ||||||||
| Summary of Loans by Type | ||||||||||||
| (Excludes Loans Held for Sale) | ||||||||||||
| (In Thousands) | March 31, | Dec. 31, | March 31, | |||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Residential mortgage: | ||||||||||||
| Residential mortgage loans - first liens | $ | 306,753 | $ | 304,783 | $ | 291,612 | ||||||
| Residential mortgage loans - junior liens | 21,622 | 21,146 | 20,896 | |||||||||
| Home equity lines of credit | 38,627 | 39,040 | 37,049 | |||||||||
| 1-4 Family residential construction | 20,010 | 21,121 | 16,217 | |||||||||
| Total residential mortgage | 387,012 | 386,090 | 365,774 | |||||||||
| Commercial: | ||||||||||||
| Commercial loans secured by real estate | 154,646 | 154,779 | 140,851 | |||||||||
| Commercial and industrial | 71,628 | 75,196 | 51,563 | |||||||||
| Political subdivisions | 38,364 | 40,007 | 19,479 | |||||||||
| Commercial construction and land | 7,445 | 5,122 | 7,249 | |||||||||
| Loans secured by farmland | 7,168 | 7,019 | 7,789 | |||||||||
| Multi-family (5 or more) residential | 8,393 | 9,188 | 8,673 | |||||||||
| Agricultural loans | 4,492 | 4,671 | 3,158 | |||||||||
| Other commercial loans | 11,387 | 12,152 | 13,187 | |||||||||
| Total commercial | 303,523 | 308,134 | 251,949 | |||||||||
| Consumer | 11,070 | 10,656 | 10,622 | |||||||||
| Total | 701,605 | 704,880 | 628,345 | |||||||||
| Less: allowance for loan losses | (7,661 | ) | (7,889 | ) | (7,134 | ) | ||||||
| Loans, net | $ | 693,944 | $ | 696,991 | $ | 621,211 | ||||||
| Loans Held for Sale | ||||||||||||
| (In Thousands) | March 31, | Dec. 31, | March 31, | |||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Residential mortgage loans originated | ||||||||||||
| and serviced - outstanding balance | $ | 154,304 | $ | 152,728 | $ | 151,486 | ||||||
| Less: outstanding balance of loans sold | (153,778 | ) | (152,448 | ) | (151,272 | ) | ||||||
| Loans held for sale, net | $ | 526 | $ | 280 | $ | 214 | ||||||
3
| ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||
| (In Thousands) | ||||||||||||||||
| 3 Months | 3 Months | Year | 3 Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| March 31, | Dec. 31, | Dec. 31, | March 31, | |||||||||||||
| 2016 | 2015 | 2015 | 2015 | |||||||||||||
| Balance, beginning of period | $ | 7,889 | $ | 7,416 | $ | 7,336 | $ | 7,336 | ||||||||
| Charge-offs | (613 | ) | (66 | ) | (562 | ) | (222 | ) | ||||||||
| Recoveries | 17 | 220 | 270 | 17 | ||||||||||||
| Net (charge-offs) recoveries | (596 | ) | 154 | (292 | ) | (205 | ) | |||||||||
| Provision for loan losses | 368 | 319 | 845 | 3 | ||||||||||||
| Balance, end of period | $ | 7,661 | $ | 7,889 | $ | 7,889 | $ | 7,134 | ||||||||
| PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS | ||||||||||||
| AND TROUBLED DEBT RESTRUCTURINGS (TDRs) | ||||||||||||
| (In Thousands) | ||||||||||||
| March 31, | Dec. 31, | March 31, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Impaired loans with a valuation allowance | $ | 1,420 | $ | 1,933 | $ | 4,312 | ||||||
| Impaired loans without a valuation allowance | 8,210 | 8,041 | 8,851 | |||||||||
| Total impaired loans | $ | 9,630 | $ | 9,974 | $ | 13,163 | ||||||
| Total loans past due 30-89 days and still accruing | $ | 11,373 | $ | 7,057 | $ | 5,722 | ||||||
| Nonperforming assets: | ||||||||||||
| Total nonaccrual loans | $ | 10,944 | $ | 11,517 | $ | 11,944 | ||||||
| Total loans past due 90 days or more and still accruing | 3,957 | 3,229 | 3,086 | |||||||||
| Total nonperforming loans | 14,901 | 14,746 | 15,030 | |||||||||
| Foreclosed assets held for sale (real estate) | 1,584 | 1,260 | 1,583 | |||||||||
| Total nonperforming assets | $ | 16,485 | $ | 16,006 | $ | 16,613 | ||||||
| Loans subject to troubled debt restructurings (TDRs): | ||||||||||||
| Performing | $ | 1,167 | $ | 1,186 | $ | 1,872 | ||||||
| Nonperforming | 5,146 | 5,178 | 5,252 | |||||||||
| Total TDRs | $ | 6,313 | $ | 6,364 | $ | 7,124 | ||||||
| Total nonperforming loans as a % of loans | 2.12 | % | 2.09 | % | 2.39 | % | ||||||
| Total nonperforming assets as a % of assets | 1.36 | % | 1.31 | % | 1.33 | % | ||||||
| Allowance for loan losses as a % of total loans | 1.09 | % | 1.12 | % | 1.14 | % | ||||||
| Allowance for loan losses as a % of nonperforming loans | 51.41 | % | 53.50 | % | 47.47 | % | ||||||
4
| 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 | |||||||||||||||||||
| 3/31/2016 | Return/ | 12/31/2015 | Return/ | 3/31/2015 | 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 | $ | 305,880 | 2.09 | % | $ | 327,225 | 2.05 | % | $ | 388,104 | 2.15 | % | ||||||||||||
| Tax-exempt | 105,406 | 5.23 | % | 105,118 | 4.99 | % | 117,674 | 5.35 | % | |||||||||||||||
| Total available-for-sale securities | 411,286 | 2.89 | % | 432,343 | 2.76 | % | 505,778 | 2.90 | % | |||||||||||||||
| Interest-bearing due from banks | 20,348 | 0.47 | % | 20,168 | 0.39 | % | 26,994 | 0.39 | % | |||||||||||||||
| Loans held for sale | 452 | 5.34 | % | 406 | 5.86 | % | 89 | 9.11 | % | |||||||||||||||
| Loans receivable: | ||||||||||||||||||||||||
| Taxable | 640,959 | 5.00 | % | 629,294 | 5.04 | % | 582,498 | 5.37 | % | |||||||||||||||
| Tax-exempt | 60,677 | 4.54 | % | 61,339 | 4.52 | % | 41,925 | 5.15 | % | |||||||||||||||
| Total loans receivable | 701,636 | 4.96 | % | 690,633 | 5.00 | % | 624,423 | 5.35 | % | |||||||||||||||
| Total Earning Assets | 1,133,722 | 4.13 | % | 1,143,550 | 4.07 | % | 1,157,284 | 4.16 | % | |||||||||||||||
| Cash | 15,588 | 16,390 | 16,127 | |||||||||||||||||||||
| Unrealized gain/loss on securities | 7,055 | 7,637 | 10,626 | |||||||||||||||||||||
| Allowance for loan losses | (7,932 | ) | (7,525 | ) | (7,391 | ) | ||||||||||||||||||
| Bank premises and equipment | 15,458 | 15,499 | 16,252 | |||||||||||||||||||||
| Intangible Asset - Core Deposit Intangible | 29 | 32 | 50 | |||||||||||||||||||||
| Intangible Asset - Goodwill | 11,942 | 11,942 | 11,942 | |||||||||||||||||||||
| Other assets | 38,530 | 38,037 | 37,135 | |||||||||||||||||||||
| Total Assets | $ | 1,214,392 | $ | 1,225,562 | $ | 1,242,025 | ||||||||||||||||||
| INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Interest checking | $ | 195,142 | 0.12 | % | $ | 195,439 | 0.11 | % | $ | 191,705 | 0.12 | % | ||||||||||||
| Money market | 191,514 | 0.17 | % | 192,825 | 0.16 | % | 194,834 | 0.15 | % | |||||||||||||||
| Savings | 130,003 | 0.10 | % | 127,744 | 0.10 | % | 127,853 | 0.10 | % | |||||||||||||||
| Certificates of deposit | 113,411 | 0.72 | % | 116,699 | 0.68 | % | 122,007 | 0.71 | % | |||||||||||||||
| Individual Retirement Accounts | 105,562 | 0.41 | % | 107,484 | 0.41 | % | 113,806 | 0.40 | % | |||||||||||||||
| Other time deposits | 804 | 0.00 | % | 678 | 0.00 | % | 803 | 0.00 | % | |||||||||||||||
| Total interest-bearing deposits | 736,436 | 0.26 | % | 740,869 | 0.25 | % | 751,008 | 0.26 | % | |||||||||||||||
| Borrowed funds: | ||||||||||||||||||||||||
| Short-term | 35,683 | 0.70 | % | 17,395 | 0.39 | % | 6,017 | 0.07 | % | |||||||||||||||
| Long-term | 38,725 | 3.77 | % | 59,929 | 3.96 | % | 73,020 | 4.03 | % | |||||||||||||||
| Total borrowed funds | 74,408 | 2.30 | % | 77,324 | 3.16 | % | 79,037 | 3.73 | % | |||||||||||||||
| Total Interest-bearing Liabilities | 810,844 | 0.45 | % | 818,193 | 0.53 | % | 830,045 | 0.59 | % | |||||||||||||||
| Demand deposits | 208,163 | 207,534 | 215,019 | |||||||||||||||||||||
| Other liabilities | 7,378 | 9,149 | 8,120 | |||||||||||||||||||||
| Total Liabilities | 1,026,385 | 1,034,876 | 1,053,184 | |||||||||||||||||||||
| Stockholders' equity, excluding | ||||||||||||||||||||||||
| accumulated other comprehensive income/loss | 183,376 | 185,716 | 181,944 | |||||||||||||||||||||
| Accumulated other comprehensive income/loss | 4,631 | 4,970 | 6,897 | |||||||||||||||||||||
| Total Stockholders' Equity | 188,007 | 190,686 | 188,841 | |||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,214,392 | $ | 1,225,562 | $ | 1,242,025 | ||||||||||||||||||
| Interest Rate Spread | 3.68 | % | 3.54 | % | 3.57 | % | ||||||||||||||||||
| Net Interest Income/Earning Assets | 3.81 | % | 3.69 | % | 3.74 | % | ||||||||||||||||||
| Total Deposits (Interest-bearing | ||||||||||||||||||||||||
| and Demand) | $ | 944,599 | $ | 948,403 | $ | 966,027 | ||||||||||||||||||
| (1) | Annualized 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. |
| (3) | Rates of return on earning assets and costs of funds are presented on an annualized basis. |
5
| COMPARISON OF NONINTEREST INCOME | ||||||||||||
| (In Thousands) | Three Months Ended | |||||||||||
| March 31, | Dec. 31, | March 31, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Service charges on deposit accounts | $ | 1,138 | $ | 1,235 | $ | 1,022 | ||||||
| Service charges and fees | 94 | 121 | 113 | |||||||||
| Trust and financial management revenue | 1,144 | 1,148 | 1,114 | |||||||||
| Brokerage revenue | 173 | 199 | 219 | |||||||||
| Insurance commissions, fees and premiums | 21 | 22 | 40 | |||||||||
| Interchange revenue from debit card transactions | 463 | 479 | 474 | |||||||||
| Net gains from sales of loans | 168 | 162 | 147 | |||||||||
| Decrease in fair value of servicing rights | (71 | ) | (25 | ) | (117 | ) | ||||||
| Increase in cash surrender value of life insurance | 96 | 92 | 97 | |||||||||
| Other operating income | 464 | 566 | 447 | |||||||||
| Total other operating income, before realized | ||||||||||||
| gains on available-for-sale securities, net | $ | 3,690 | $ | 3,999 | $ | 3,556 | ||||||
| COMPARISON OF NONINTEREST EXPENSE | ||||||||||||
| (In Thousands) | Three Months Ended | |||||||||||
| March 31, | Dec. 31, | March 31, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Salaries and wages | $ | 3,887 | $ | 3,848 | $ | 3,487 | ||||||
| Pensions and other employee benefits | 1,437 | 1,084 | 1,385 | |||||||||
| Occupancy expense, net | 609 | 589 | 722 | |||||||||
| Furniture and equipment expense | 427 | 462 | 454 | |||||||||
| FDIC Assessments | 142 | 149 | 151 | |||||||||
| Pennsylvania shares tax | 322 | 302 | 318 | |||||||||
| Professional fees | 289 | 175 | 156 | |||||||||
| Automated teller machine and interchange expense | 249 | 253 | 246 | |||||||||
| Software subscriptions | 241 | 259 | 197 | |||||||||
| Other operating expense | 1,469 | 1,295 | 1,417 | |||||||||
| Total noninterest expense, before loss on | ||||||||||||
| prepayment of borrowings | 9,072 | 8,416 | 8,533 | |||||||||
| Loss on prepayment of borrowings | 0 | 1,663 | 0 | |||||||||
| Total noninterest expense | $ | 9,072 | $ | 10,079 | $ | 8,533 | ||||||
6