Summit Financial (SMMF) 8-K Summit Financial Group Reports First Quarter 2019 Results

EXHIBIT 99

FOR RELEASE 6:00 AM ET, April 25, 2019

Contact:Robert S. Tissue, Sr. Vice President & CFO

Telephone:(304) 530-0552

Email:rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS FIRST QUARTER 2019 RESULTS

Q1 2019 Diluted EPS $0.56, compared to $0.60 for Q4 2018 and $0.60 for Q1 2018

MOOREFIELD, WV - April 25, 2019 (GLOBE NEWSWIRE) - Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported quarterly net income of $7.09 million for first quarter 2019, or $0.56 per diluted share. In comparison, earnings for fourth quarter 2018 were $7.45 million, or $0.60 per diluted share, and for first quarter 2018, $7.44 million, or $0.60 per diluted share.

Summit completed its acquisition of Peoples Bankshares, Inc. (“PBI”) and its subsidiary, First Peoples Bank, headquartered in Mullens, West Virginia on January 1, 2019 and will convert substantially all of its data processing systems to that of Summit’s effective April 27, 2019; accordingly, PBI’s results of operations are included in Summit’s consolidated results of operations from the date of acquisition, and therefore Summit’s first quarter 2019 results reflect increased levels of average balances, income and expenses compared to its first quarter 2018 and fourth quarter 2018 results. At consummation, PBI had total assets of $133.1 million, loans of $42.4 million, and deposits of $112.9 million. In addition, our merger-related expenses totaled $63,000 in Q1 2019 versus $59,000 in the prior quarter.

Highlights for Q1 2019

• Net interest margin for the quarter increased 5 basis points to 3.66 percent compared to Q4 2018 and is 8 basis points higher compared to Q1 2018;

• Provision for loan losses totaled $250,000 compared to $500,000 for the prior quarter and for the year-ago quarter;

• Efficiency ratio was 56.50 percent compared to 51.02 percent for the linked quarter as result of higher noninterest expenses due to the PBI acquisition and outsized deferred director compensation plan expense as result of exceptionally robust stock market performance during Q1 2019;

• Realized securities losses of $3,000 in Q1 2019 compared to $205,000 in Q4 2018; the Company realized securities gains of $732,000 in Q1 2018;

• Write-downs of foreclosed properties were $249,000 in Q1 2019 compared to $318,000 in Q4 2018, while the net loss on sales of foreclosed properties decreased to $1,000 in Q1 2019 from $70,000 in Q4 2018; and

• Nonperforming assets as a percentage of total assets declined to 1.53 percent compared to 1.66 percent for the linked quarter and to 1.73 percent a year-ago.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit achieved another quarter of solid core operating results highlighted by the improvement in our net interest margin. Further, despite the quarter’s challenges of integrating PBI’s banking operations with that of Summit’s, we nonetheless maintained a core efficiency ratio well below that of most of our peers. We have again demonstrated our ability to successfully execute on a disciplined M&A strategy, which we believe will continue to present us with significant opportunities going forward as we seek to be a consistently growing, high-performing community banking institution.”

Results from Operations

Total revenue for first quarter 2019, consisting of net interest income and noninterest income, increased 3.0 percent to $22.8 million compared to $22.1 million for the first quarter 2018.

For the first quarter of 2019, net interest income increased 7.6 percent to $18.6 million compared to $17.3 million for the prior-year first quarter and grew 2.9 percent compared to the linked quarter principally as a result of $51.6 million in growth in average loans and 7 basis point improvement in average loan yields during the quarter. The net interest margin for first quarter 2019 was 3.66 percent compared to 3.58 percent for the same year-ago quarter, and 3.61 percent for the linked quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to acquired interest earning assets and interest bearing liabilities, Summit’s net interest margin was 3.64 percent for Q1 2019.

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary, trust and wealth management fees and service fee income from community banking activities, for first quarter 2019 was $4.23 million compared to $4.88 million for the comparable period of 2018. Excluding realized securities gains and losses, noninterest income was $4.23 million for first quarter 2019, compared to $4.14 million reported for first quarter 2018 and $4.39 million for the linked quarter.

We recorded a $250,000 provision for loan losses during first quarter 2019 and $500,000 during Q1 2018. The decreased need for loan loss provisioning in Q1 2019 is directionally consistent with changes in the credit quality in our loan portfolio (fewer charge-offs) and our modest loan growth.

Q1 2019 total noninterest expense increased 12.6 percent to $13.86 million compared to $12.31 million for the prior-year first quarter and increased 11.2 percent compared to $12.47 million for the linked quarter. Our increased noninterest expense is principally due to expenses associated with the acquired PBI operations and to an outsized deferred director compensation plan expense of $484,000 recognized in Q1 2019 compared to deferred director compensation plan benefits of ($25,000) and ($354,000) recorded in Q1 2018 and Q4 2018, respectively. Under our director deferred compensation plans, directors optionally elect to defer their director fees into a "phantom" investment plan whereby the Company recognizes expense or benefit relative to the phantom returns or losses of such investments. As result of the stock market’s exceptionally robust performance during Q1 2019, we recognized significantly greater quarterly deferred director compensation expense this quarter than we have ever recognized previously.

Balance Sheet

At March 31, 2019, total assets were $2.25 billion, an increase of $49.1 million, or 8.9 percent (on an annualized basis) since December 31, 2018. Total loans, net of unearned fees and allowance for loan losses, were $1.73 billion at March 31, 2019, up $43.1 million, or 10.2 percent (on an annualized basis), from the $1.68 billion reported at year-end 2018. Loans, excluding mortgage warehouse lines of credit and acquired PBI loans, decreased $9.5 million during the quarter, or 2.3 percent (on an annualized basis).

At March 31, 2019, deposits were $1.79 billion, an increase of $154.2 million, or 9.4 percent, since year end 2018. During Q1 2019, checking deposits increased $77.3 million or 10.4

percent, time deposits increased by $53.6 million or 8.9 percent and savings deposits grew $26.5 million or 9.3 percent.

Shareholders’ equity was $233.6 million as of March 31, 2019 compared to $219.8 million at December 31, 2018.In conjunction with the acquisition of PBI on January 1, 2019, Summit issued 465,931 shares of common stock valued at $9.0 million to the former PBI shareholders.

Tangible book value per common share increased to $16.13 at March 31, 2019 compared to $14.36 at the end of first quarter 2018 and $15.75 at year end 2018. Summit had 12,661,528 outstanding common shares at March 31, 2019 compared to 12,312,933 at year end 2018.

As announced in Q3 2018, the Board of Directors authorized the open market repurchase of up to 500,000 shares of the issued and outstanding shares of Summit's common stock. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. The plan will expire December 31, 2019, but may be discontinued, suspended, or restarted at any time at the Company's discretion. During Q1 2019, 125,200 shares of our common stock were repurchased under the Plan at an average price of $22.95 per share. Through March 31, 2019, the Company has repurchased 207,623 shares under the Plan since its inception at an average price of $21.96 per share.

Asset Quality

As of March 31, 2019, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $34.4 million, or 1.53 percent of assets. This compares to $36.5 million, or 1.66 percent of assets at the linked quarter-end, and $36.9 million, or 1.73 percent of assets, at first quarter-end 2018 as result of our continuing emphasis on improving our overall asset quality.

First quarter 2019 net loan charge-offs were $165,000, or 0.04 percent of average loans annualized; while adding $250,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.76 percent of total loans at March 31, 2019, compared to 0.77 percent at year-end 2018.

About the Company

Summit Financial Group, Inc. is a $2.25 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and Southern regions of West Virginia and the Northern, Shenandoah Valley and Southwestern regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates thirty-three banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.

FORWARD-LOOKING STATEMENTS

This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.

Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economies. We undertake no obligation to revise these statements following the date of this press release.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary (unaudited) -- Q1 2019 vs Q1 2018
	For the Quarter Ended					Percent
Dollars in thousands	3/31/2019			3/31/2018		Change
Statements of Income
Interest income
Loans, including fees	$	23,051		$	20,366	13.2	%
Securities	2,586			2,391		8.2	%
Other	231			140		65.0	%
Total interest income	25,868			22,897		13.0	%
Interest expense
Deposits	5,564			3,549		56.8	%
Borrowings	1,731			2,091		-17.2	%
Total interest expense	7,295			5,640		29.3	%
Net interest income	18,573			17,257		7.6	%
Provision for loan losses	250			500		-50.0	%
Net interest income after provision for loan losses	18,323			16,757		9.3	%
Noninterest income
Insurance commissions	1,174			1,113		5.5	%
Trust and wealth management fees	586			667		-12.1	%
Service charges on deposit accounts	1,180			1,091		8.2	%
Bank card revenue	814			749		8.7	%
Realized securities (losses) gains	(3		)	732		n/a
Bank owned life insurance income	238			275		-13.5	%
Other income	241			249		-3.2	%
Total noninterest income	4,230			4,876		-13.2	%
Noninterest expense
Salaries and employee benefits	7,347			6,821		7.7	%
Net occupancy expense	924			832		11.1	%
Equipment expense	1,179			1,083		8.9	%
Professional fees	403			333		21.0	%
Advertising and public relations	153			103		48.5	%
Amortization of intangibles	476			436		9.2	%
FDIC premiums	—			240		n/a
Bank card expense	439			335		31.0	%
Foreclosed properties expense, net of losses	384			325		18.2	%
Merger-related expense	63			—		n/a
Other expenses	2,492			1,806		38.0	%
Total noninterest expense	13,860			12,314		12.6	%
Income before income taxes	8,693			9,319		-6.7	%
Income tax expense	1,601			1,876		-14.7	%
Net income	$	7,092		$	7,443	-4.7	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary (unaudited) -- Q1 2019 vs Q1 2018
	For the Quarter Ended						Percent
	3/31/2019			3/31/2018			Change
Per Share Data
Earnings per common share
Basic	$	0.56		$	0.60		-6.7	%
Diluted	$	0.56		$	0.60		-6.7	%
Cash dividends	$	0.14		$	0.13		7.7	%
Average common shares outstanding
Basic	12,717,501			12,358,849			2.9	%
Diluted	12,778,644			12,383,757			3.2	%
Common shares outstanding at period end	12,661,528			12,366,360			2.4	%
Performance Ratios
Return on average equity	12.28		%	14.73		%	-16.6	%
Return on average tangible equity	14.80		%	17.04		%	-13.1	%
Return on average assets	1.27		%	1.40		%	-9.3	%
Net interest margin (A)	3.66		%	3.58		%	2.2	%
Efficiency ratio (B)	56.50		%	53.84		%	4.9	%
NOTE (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
NOTE (B) - Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
	For the Quarter Ended
Dollars in thousands	3/31/2019			12/31/2018			9/30/2018		6/30/2018		3/31/2018
Statements of Income
Interest income
Loans, including fees	$	23,051		$	22,659		$	21,295	$	20,962	$	20,366
Securities	2,586			2,527			2,367		2,303		2,391
Other	231			127			138		134		140
Total interest income	25,868			25,313			23,800		23,399		22,897
Interest expense
Deposits	5,564			5,103			4,714		4,309		3,549
Borrowings	1,731			2,158			1,873		1,815		2,091
Total interest expense	7,295			7,261			6,587		6,124		5,640
Net interest income	18,573			18,052			17,213		17,275		17,257
Provision for loan losses	250			500			500		750		500
Net interest income after provision for loan losses	18,323			17,552			16,713		16,525		16,757
Noninterest income
Insurance commissions	1,174			1,132			1,062		1,013		1,113
Trust and wealth management fees	586			627			687		672		667
Service charges on deposit accounts	1,180			1,209			1,215		1,116		1,091
Bank card revenue	814			809			793		801		749
Realized securities (losses) gains	(3		)	(205		)	8		87		732
Bank owned life insurance income	238			248			250		249		275
Other income	241			367			196		210		249
Total noninterest income	4,230			4,187			4,211		4,148		4,876
Noninterest expense
Salaries and employee benefits	7,347			6,928			6,806		6,922		6,821
Net occupancy expense	924			836			856		840		832
Equipment expense	1,179			1,139			1,118		1,071		1,083
Professional fees	403			385			503		385		333
Advertising and public relations	153			193			170		188		103
Amortization of intangibles	476			410			413		413		436
FDIC premiums	—			140			210		240		240
Bank card expense	439			395			384		361		335
Foreclosed properties expense, net of losses	384			507			169		350		325
Merger-related expense	63			59			86		—		—
Other expenses	2,492			1,474			1,643		1,965		1,806
Total noninterest expense	13,860			12,466			12,358		12,735		12,314
Income before income taxes	8,693			9,273			8,566		7,938		9,319
Income tax expense	1,601			1,823			1,667		1,658		1,876
Net income	$	7,092		$	7,450		$	6,899	$	6,280	$	7,443

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
	For the Quarter Ended
	3/31/2019			12/31/2018			9/30/2018			6/30/2018			3/31/2018
Per Share Data
Earnings per common share
Basic	$	0.56		$	0.60		$	0.56		$	0.51		$	0.60
Diluted	$	0.56		$	0.60		$	0.55		$	0.51		$	0.60
Cash dividends	$	0.14		$	0.14		$	0.13		$	0.13		$	0.13
Average common shares outstanding
Basic	12,717,501			12,358,104			12,374,350			12,366,522			12,358,849
Diluted	12,778,644			12,407,678			12,439,051			12,431,984			12,383,757
Common shares outstanding at period end	12,661,528			12,312,933			12,382,450			12,373,747			12,366,360
Performance Ratios
Return on average equity	12.28		%	13.85		%	13.00		%	12.16		%	14.73		%
Return on average tangible equity	14.80		%	16.41		%	15.53		%	14.68		%	17.80		%
Return on average assets	1.27		%	1.38		%	1.31		%	1.19		%	1.40		%
Net interest margin (A)	3.66		%	3.61		%	3.53		%	3.58		%	3.58		%
Efficiency ratio (B)	56.50		%	51.02		%	54.25		%	55.88		%	53.84		%
NOTE (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
NOTE (B) - Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data (unaudited)
Dollars in thousands, except per share amounts	3/31/2019			12/31/2018			9/30/2018			6/30/2018			3/31/2018
Assets
Cash and due from banks	$	14,265		$	23,061		$	9,382		$	8,314		$	9,042
Interest bearing deposits other banks	43,689			36,479			44,452			38,097			38,365
Securities	297,126			293,284			288,040			283,221			296,890
Loans, net	1,725,064			1,682,005			1,632,747			1,617,373			1,631,150
Property held for sale	24,393			21,432			22,017			21,606			21,442
Premises and equipment, net	39,345			37,553			36,888			36,017			35,554
Goodwill and other intangible assets	29,349			25,842			26,252			26,665			27,077
Cash surrender value of life insurance policies	42,714			42,420			42,208			41,932			41,668
Other assets	33,696			38,510			36,741			34,427			33,707
Total assets	$	2,249,641		$	2,200,586		$	2,138,727		$	2,107,652		$	2,134,895
Liabilities and Shareholders' Equity
Deposits	$	1,789,032		$	1,634,826		$	1,651,064		$	1,639,996		$	1,654,523
Short-term borrowings	186,292			309,084			238,403			202,429			193,513
Long-term borrowings and      subordinated debentures	20,319			20,324			20,328			40,332			65,336
Other liabilities	20,368			16,522			15,376			15,016			16,514
Shareholders' equity	233,630			219,830			213,556			209,879			205,009
Total liabilities and shareholders' equity	$	2,249,641		$	2,200,586		$	2,138,727		$	2,107,652		$	2,134,895
Book value per common share	$	18.45		$	17.85		$	17.25		$	16.96		$	16.55
Tangible book value per common share	$	16.13		$	15.75		$	15.13		$	14.81		$	14.36
Tangible common equity to tangible assets	9.2		%	8.9		%	8.9		%	8.8		%	8.4		%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (unaudited)
	3/31/2019		12/31/2018		9/30/2018		6/30/2018		3/31/2018
Summit Financial Group, Inc.
CET1 Risk-based Capital	11.4	%	11.1	%	11.1	%	11.0	%	10.7	%
Tier 1 Risk-based Capital	12.5	%	12.2	%	12.2	%	12.1	%	11.8	%
Total Risk Based Capital	13.2	%	12.9	%	12.9	%	12.8	%	12.5	%
Tier 1 Leverage Ratio	10.2	%	10.1	%	10.1	%	9.9	%	9.5	%
Summit Community Bank, Inc.
CET1 Risk-based Capital	12.3	%	12.0	%	12.0	%	12.0	%	11.7	%
Tier 1 Risk-based Capital	12.3	%	12.0	%	12.0	%	12.0	%	11.7	%
Total Risk Based Capital	13.0	%	12.8	%	12.7	%	12.8	%	12.5	%
Tier 1 Leverage Ratio	10.0	%	10.0	%	9.9	%	9.8	%	9.5	%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition (unaudited)
Dollars in thousands	3/31/2019		12/31/2018		9/30/2018		6/30/2018		3/31/2018
Commercial	$	189,248	$	194,315	$	167,972	$	171,410	$	189,586
Mortgage warehouse lines	49,355		39,140		35,910		54,332		45,702
Commercial real estate
Owner occupied	272,088		266,362		272,475		262,174		265,075
Non-owner occupied	570,392		564,826		530,568		503,047		498,445
Construction and development
Land and development	64,192		68,833		71,819		74,018		66,841
Construction	36,040		24,731		25,703		25,711		33,327
Residential real estate
Non-jumbo	359,107		336,977		340,783		343,044		346,477
Jumbo	69,313		73,599		72,327		66,831		67,169
Home equity	80,370		80,910		82,018		82,409		83,382
Consumer	36,046		32,460		33,664		34,249		34,825
Other	12,045		12,899		12,452		12,728		12,578
Total loans, net of unearned fees	1,738,196		1,695,052		1,645,691		1,629,953		1,643,407
Less allowance for loan losses	13,132		13,047		12,944		12,580		12,257
Loans, net	$	1,725,064	$	1,682,005	$	1,632,747	$	1,617,373	$	1,631,150

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition (unaudited)
Dollars in thousands	3/31/2019		12/31/2018		9/30/2018		6/30/2018		3/31/2018
Core deposits
Non interest bearing checking	$	258,679	$	222,120	$	232,697	$	217,134	$	219,293
Interest bearing checking	560,800		523,257		505,411		472,041		447,172
Savings	310,646		284,173		301,269		322,940		346,962
Time deposits	359,141		316,914		316,941		322,801		318,556
Total core deposits	1,489,266		1,346,464		1,356,318		1,334,916		1,331,983
Brokered deposits	218,913		220,497		227,312		238,662		242,049
Other non-core time deposits	80,852		67,866		67,434		66,418		80,491
Total deposits	$	1,789,031	$	1,634,827	$	1,651,064	$	1,639,996	$	1,654,523

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information (unaudited)
	For the Quarter Ended
Dollars in thousands	3/31/2019			12/31/2018			9/30/2018			6/30/2018			3/31/2018
Gross loan charge-offs	$	414		$	705		$	413		$	525		$	960
Gross loan recoveries	(249		)	(307		)	(278		)	(97		)	(153		)
Net loan charge-offs (recoveries)	$	165		$	398		$	135		$	428		$	807
Net loan charge-offs to average loans (annualized)	0.04		%	0.10		%	0.03		%	0.10		%	0.20		%
Allowance for loan losses	$	13,132		$	13,047		$	12,944		$	12,580		$	12,257
Allowance for loan losses as a percentage     of period end loans	0.76		%	0.77		%	0.79		%	0.77		%	0.75		%
Nonperforming assets:
Nonperforming loans
Commercial	$	729		$	935		$	801		$	954		$	734
Commercial real estate	2,981			3,239			5,090			3,238			3,400
Residential construction and development	24			3,198			3,200			3,233			3,642
Residential real estate	5,928			7,506			7,760			8,241			7,521
Consumer	182			147			118			110			160
Other	130			—			—			—			—
Total nonperforming loans	9,974			15,025			16,969			15,776			15,457
Foreclosed properties
Commercial real estate	1,841			1,762			1,762			1,818			1,875
Commercial construction and development	6,326			6,479			6,790			6,815			7,140
Residential construction and development	14,347			11,543			11,614			11,517			11,053
Residential real estate	1,879			1,648			1,851			1,456			1,374
Total foreclosed properties	24,393			21,432			22,017			21,606			21,442
Other repossessed assets	34			5			5			12			18
Total nonperforming assets	$	34,401		$	36,462		$	38,991		$	37,394		$	36,917
Nonperforming loans to period end loans	0.57		%	0.89		%	1.03		%	0.97		%	0.94		%
Nonperforming assets to period end assets	1.53		%	1.66		%	1.82		%	1.77		%	1.73		%
Troubled debt restructurings
Performing	$	27,845		$	26,609		$	27,441		$	27,559		$	27,408
Nonperforming	—			388			113			281			76
Total troubled debt restructurings	$	27,845		$	26,997		$	27,554		$	27,840		$	27,484

Loans Past Due 30-89 Days (unaudited)
	For the Quarter Ended
Dollars in thousands	3/31/2019		12/31/2018		9/30/2018		6/30/2018		3/31/2018
Commercial	$	264	$	219	$	607	$	319	$	539
Commercial real estate	4,128		161		988		546		601
Construction and development	179		194		393		264		174
Residential real estate	2,944		6,249		5,513		4,125		5,218
Consumer	432		593		345		337		425
Other	52		38		11		8		15
Total	$	7,999	$	7,454	$	7,857	$	5,599	$	6,972

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q1 2019 vs Q4 2018 vs Q1 2018 (unaudited)
	Q1 2019							Q4 2018							Q1 2018
	Average			Earnings/		Yield/		Average			Earnings /		Yield /		Average			Earnings /		Yield /
Dollars in thousands	Balances			Expense		Rate		Balances			Expense		Rate		Balances			Expense		Rate
ASSETS
Interest earning assets
Loans, net of unearned interest (1)
Taxable	$	1,712,286		$	22,907	5.43	%	$	1,660,250		$	22,519	5.38	%	$	1,611,813		$	20,223	5.09	%
Tax-exempt (2)	14,907			184		5.01	%	15,322			177		4.58	%	16,307			182		4.53	%
Securities
Taxable	195,932			1,687		3.49	%	176,059			1,502		3.38	%	191,713			1,372		2.90	%
Tax-exempt (2)	114,831			1,139		4.02	%	132,088			1,296		3.89	%	132,306			1,290		3.95	%
Interest bearing deposits other banks    and Federal funds sold	51,187			230		1.82	%	35,402			127		1.42	%	39,656			140		1.43	%
Total interest earning assets	2,089,143			26,147		5.08	%	2,019,121			25,621		5.03	%	1,991,795			23,207		4.73	%
Noninterest earning assets
Cash & due from banks	12,825							9,686							9,962
Premises & equipment	38,834							37,224							34,586
Other assets	112,910							109,228							107,125
Allowance for loan losses	(13,309		)					(13,172		)					(12,737		)
Total assets	$	2,240,403						$	2,162,087						$	2,130,731
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	556,766		$	1,663	1.21	%	$	519,465		$	1,504	1.15	%	$	423,095		$	632	0.61	%
Savings deposits	310,848			898		1.17	%	289,809			861		1.18	%	346,358			717		0.84	%
Time deposits	654,404			3,003		1.86	%	607,037			2,738		1.79	%	622,543			2,200		1.43	%
Short-term borrowings	200,297			1,472		2.98	%	270,092			1,909		2.80	%	243,686			1,405		2.34	%
Long-term borrowings and      subordinated debentures	20,321			259		5.17	%	20,326			249		4.86	%	65,338			686		4.26	%
Total interest bearing liabilities	1,742,636			7,295		1.70	%	1,706,729			7,261		1.69	%	1,701,020			5,640		1.34	%
Noninterest bearing liabilities
Demand deposits	248,354							223,999							210,883
Other liabilities	18,322							16,138							16,771
Total liabilities	2,009,312							1,946,866							1,928,674
Shareholders' equity - common	231,091							215,221							202,057
Total liabilities and   shareholders' equity	$	2,240,403						$	2,162,087						$	2,130,731
NET INTEREST EARNINGS				$	18,852						$	18,360						$	17,567
NET INTEREST MARGIN						3.66	%						3.61	%						3.58	%
(1) For purposes of this table, nonaccrual loans are included in average loan balances.
(2) For purposes of this table, interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%. The taxable equivalent adjustment results in an increase in interest income of $279,000, $309,000 and $310,000 for Q1 2019, Q4 2018 and Q1 2018, respectively.