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Section 1: 8-K (8-K)


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
 Pursuant to Section 13 or 15(d) of the
 Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 25, 2019

MACATAWA BANK CORPORATION
 (Exact name of registrant as specified in its charter)

Michigan
000-25927
38-3391345
(State or other jurisdiction of  Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

10753 Macatawa Drive, Holland, Michigan
 
49424
(Address of principal executive offices)
 
(Zip Code)

(616) 820-1444
 (Registrant's Telephone Number, Including Area Code)

Not Applicable
 (Former name or former address, if changed since last year)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Securities registered pursuant to Section 12(b) of the Act:


Title of each class
 
Trading symbol(s)
 
Name of each exchange on which registered
 
Common stock
 
MCBC
 
NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02
Results of Operations and Financial Condition.

On July 25, 2019, Macatawa Bank Corporation issued the press release furnished with this report as Exhibit 99.1, which is here incorporated by reference. This report and the exhibit are furnished to, and not filed with, the Commission.

Item 9.01
Financial Statements and Exhibits.

  (d)
Exhibits

 
Press Release dated July 25, 2019. This exhibit is furnished to, and not filed with, the Commission.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  July 25, 2019
MACATAWA BANK CORPORATION
   
 
By
/s/ Jon W. Swets
 
Jon W. Swets
   
Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)


Exhibit 99.1


For Immediate Release
 
NASDAQ Stock Market:
MCBC

Macatawa Bank Corporation Reports
Second Quarter 2019 Results

HOLLAND, Mich. (July 25, 2019) – Macatawa Bank Corporation (NASDAQ: MCBC) today announced its results for the second quarter of 2019, reflecting continued strong financial performance.

Net income of $8.0 million in second quarter 2019 versus $6.7 million in second quarter 2018 – up 19%
Growth in revenue (up 10%) over second quarter of 2018 while expenses were stable (up less than 1%)
Strong profitability with return on assets and equity of 1.62% and 15.94%, respectively, in second quarter of 2019
Seasonal decline in loan portfolio balances during the quarter
Growth in core deposit balances during the quarter of $43.2 million and up 5% from June 30, 2018
Asset quality metrics remained strong

Macatawa reported net income of $8.0 million, or $0.24 per diluted share, in the second quarter 2019 compared to $6.7 million, or $0.20 per diluted share, in the second quarter 2018.  For the first six months of 2019, Macatawa reported net income of $15.6 million, or $0.46 per diluted share, compared to $12.5 million, or $0.37 per diluted share, for the same period in 2018.  Macatawa’s 2019 earnings were positively impacted by improving revenues with nominal increases in non-interest expenses.

"Macatawa Bank Corporation continued its strong performance in the second quarter of 2019,” said Ronald L. Haan, President and CEO of the Company.  “Revenue growth, primarily higher net interest income, increased non-interest revenue and continued expense management resulted in a 19 percent increase in net income compared to the second quarter of 2018.  Continued growth in our balances of interest-earning assets has positively affected our net interest income while our core operating expenses remained well-controlled during the quarter.”

Mr. Haan concluded:  "In the first half of 2019 our efforts have again resulted in strong and consistent financial performance for our shareholders.  The banking environment in Western Michigan remains highly competitive, yet with the focus of our strong and committed team of professional bankers, we believe that Macatawa Bank Corporation remains well-positioned for continued growth and success in the second half of 2019.”


Macatawa Bank Corporation 2Q Results / page 2 of 5

Operating Results
Net interest income for the second quarter 2019 totaled $16.0 million, a decrease of $65,000 from the first quarter 2019 and an increase of $1.3 million from the second quarter 2018.  Net interest margin was 3.45 percent, down 9 basis points from the first quarter 2019, and up 8 basis points from the second quarter 2018.  Net interest income for the first quarter 2019 benefitted from the collection of $251,000 in prepayment fees on commercial loans, primarily related to one commercial relationship.  Prepayment fees were only $6,000 in the second quarter 2019 and $32,000 in the second quarter 2018.

Average interest earning assets for the second quarter 2019 increased $26.4 million from the first quarter 2019 and were up $103.4  million from the second quarter 2018.  This growth along with increases in yields on interest earning assets were the primary contributors to the improvement in net interest income.

Non-interest income increased $770,000 in the second quarter 2019 compared to the first quarter 2019 and increased $630,000 from the second quarter 2018.  These changes were largely due to fluctuations in gains on sales of mortgage loans.  Gains on sales of mortgage loans in the second quarter 2019 were up $403,000 compared to the first quarter 2019 and were up $392,000  from the second quarter 2018.  The Bank originated $21.4 million in mortgage loans for sale in the second quarter 2019 compared to $6.8 million in the first quarter 2019 and $8.4 million in the second quarter 2018.  This increase in production is due to a declining mortgage rate environment as well as customer preference for loan types that are typically sold (long-term fixed rate loans).  This resulted in a reduction in the volume of loans originated for portfolio compared to 2018.  The Bank originated $8.8 million in portfolio mortgage loans in the second quarter 2019 compared to $6.8 million in the first quarter 2019 and $18.8 million in the second quarter 2018.  Also positively impacting non-interest income in the second quarter 2019 were increases in trust fee income and debit card interchange income.

Non-interest expense was $11.3 million for the second quarter 2019, compared to $11.2 million for the first quarter 2019 and $11.3 million for the second quarter 2018.  The largest component of non-interest expense was salaries and benefit expenses.  Salaries and benefit expenses were up $135,000 compared to the first quarter 2019 and were down $10,000 compared to the second quarter 2018.  The increase compared to the first quarter 2019 was largely due to higher variable based compensation from mortgage production volume.  The decrease from the second quarter 2018 was attributed to decreases in medical insurance costs due to lower claims experience in 2019.

Nonperforming asset expenses decreased $38,000 in the second quarter 2019 compared to the first quarter 2019 and decreased $68,000 compared to the second quarter 2018.  Net gains of $34,000 were realized on sales of foreclosed properties in the second quarter 2019, while there were net gains of $45,000 in the first quarter 2019 and net losses of $6,000 in the second quarter 2018.  Other categories of non-interest expense were relatively stable compared to the first quarter 2019 and the second quarter 2018.

Federal income tax expense was $1.9 million for the second quarter 2019 compared to $1.7 million for the first quarter 2019 and $1.4 million for the second quarter 2018.  The effective tax rate was 19.3 percent for the second quarter 2019, compared to 18.3 percent for the first quarter 2019 and 17.6 percent for the second quarter 2018.


Macatawa Bank Corporation 2Q Results / page 3 of 5

Asset Quality
The Bank’s asset quality remained strong in the second quarter 2019 and again experienced net loan recoveries in the second quarter.  A negative provision for loan losses of $200,000 was recorded in the second quarter 2019, compared to a negative provision of $250,000 in the first quarter 2019 and a negative provision of $300,000 in the second quarter 2018.  Net loan recoveries for the second quarter 2019 were $194,000, compared to first quarter 2019 net loan recoveries of $266,000 and second quarter 2018 net loan recoveries of $320,000.  The Company has experienced net loan recoveries in seventeen of the past eighteen quarters. Total loans past due on payments by 30 days or more amounted to $360,000 at June 30, 2019, down 47 percent from $674,000 at March 31, 2019 and down 31 percent from $525,000 at June 30, 2018.  Delinquency as a percentage of total loans was a nominal 0.03 percent at June 30, 2019.

The allowance for loan losses of $16.9 million was 1.26 percent of total loans at June 30, 2019, compared to 1.22 percent of total loans at March 31, 2019, and 1.26 percent at June 30, 2018.  The coverage ratio of allowance for loan losses to nonperforming loans continued to be strong and significantly exceeded 1-to-1 coverage at 58-to-1 as of June 30, 2019.

At June 30, 2019, the Company's nonperforming loans were $293,000, representing 0.02 percent of total loans.  This compares to $409,000 (0.03 percent of total loans) at March 31, 2019 and $125,000 (0.01 percent of total loans) at June 30, 2018.  Other real estate owned and repossessed assets were $3.1 million at June 30, 2019, compared to $3.3 million at March 31, 2019 and $3.9 million at June 30, 2018. Total nonperforming assets, including other real estate owned and nonperforming loans, decreased by $637,000, or 16 percent, from June 30, 2018 to June 30, 2019.

A break-down of non-performing loans is shown in the table below.

 
Dollars in 000s
 
Jun 30,
2019
   
Mar 31,
2019
   
Dec 31,
2018
   
Sept 30,
2018
   
Jun 30,
2018
 
                               
Commercial Real Estate
 
$
102
   
$
213
   
$
318
   
$
121
   
$
121
 
Commercial and Industrial
   
---
     
---
     
873
     
---
     
2
 
Total Commercial Loans
   
102
     
213
     
1,191
     
121
     
123
 
Residential Mortgage Loans
   
191
     
195
     
112
     
2
     
2
 
Consumer Loans
   
---
     
1
     
1
     
---
     
---
 
Total Non-Performing Loans
 
$
293
   
$
409
   
$
1,304
   
$
123
   
$
125
 


Macatawa Bank Corporation 2Q Results / page 4 of 5

Total non-performing assets were $3.4 million, or 0.17 percent of total assets, at June 30, 2019.  A break-down of non-performing assets is shown in the table below.

 
Dollars in 000s
 
Jun 30,
2019
   
Mar 31,
2019
   
Dec 31,
2018
   
Sept 30,
2018
   
Jun 30,
2018
 
                               
Non-Performing Loans
 
$
293
   
$
409
   
$
1,304
   
$
123
   
$
125
 
Other Repossessed Assets
   
---
     
---
     
---
     
---
     
---
 
Other Real Estate Owned
   
3,067
     
3,261
     
3,380
     
3,465
     
3,872
 
Total Non-Performing Assets
 
$
3,360
   
$
3,670
   
$
4,684
   
$
3,588
   
$
3,997
 

Balance Sheet, Liquidity and Capital
Total assets were $1.98 billion at June 30, 2019, an increase of $52.5 million from $1.93 billion at March 31, 2019 and an increase of $105.9 million from $1.87 billion at June 30, 2018.  Total loans were $1.34 billion at June 30, 2019, a decrease of $41.1 million from $1.38 billion at March 31, 2019 and an increase of $15.8 million from $1.33 billion at June 30, 2018.

Commercial loans increased by $25.7 million from June 30, 2018 to June 30, 2019, partially offset by decreases of $5.4 million in the residential mortgage portfolio and $4.5 million in the consumer loan portfolio.  Commercial real estate loans increased by $16.9 million while commercial and industrial loans increased by $8.8 million during the same period.

The composition of the commercial loan portfolio is shown in the table below:

 
Dollars in 000s
 
Jun 30,
2019
   
Mar 31,
2019
   
Dec 31,
2018
   
Sept 30,
2018
   
Jun 30,
2018
 
                               
Construction and Development
 
$
102,516
   
$
102,133
   
$
99,867
   
$
93,794
   
$
85,193
 
Other Commercial Real Estate
   
461,427
     
470,667
     
468,840
     
459,146
     
461,808
 
Commercial Loans Secured by Real Estate
   
563,943
     
572,800
     
568,707
     
552,940
     
547,001
 
Commercial and Industrial
   
467,222
     
493,891
     
513,347
     
467,703
     
458,468
 
Total Commercial Loans
 
$
1,031,165
   
$
1,066,691
   
$
1,082,054
   
$
1,020,643
   
$
1,005,469
 

The commercial and industrial portfolio is subject to seasonal fluctuations as the Company typically experiences large paydowns on agricultural credits and loans to automobile, recreational vehicle and boat dealers in the first half of each year. The seasonal paydowns in these loan categories amounted to $38.4 million in the second quarter of 2019.  In addition there were two relationships totaling $7.9 million that paid-off during the second quarter of 2019 resulting from the sale of their businesses.

Total deposits were $1.66 billion at June 30, 2019, up $43.2 million from $1.62 billion at March 31, 2019 and up $80.6 million, or 5 percent, from $1.58 billion at June 30, 2018.  Demand deposits were up $26.6 million in the second quarter 2019 compared to the first quarter 2019 and were up $7.0 million compared to the second quarter 2018.  Money market deposits and savings deposits were up $10.7 million from the first quarter 2019 and were up $31.5 million from the second quarter 2018.  Certificates of deposit were up $5.9 million in the second quarter 2019 compared to March 31, 2019 and were up $42.1 million compared to June 30, 2018.  As deposit rates have risen, the Bank has experienced some shifting between deposit types, particularly certificates of deposit.  The Bank continues to be successful at attracting and retaining core deposit customers.  Customer deposit accounts remain insured to the highest levels available under FDIC deposit insurance.


Macatawa Bank Corporation 2Q Results / page 5 of 5

The Bank's risk-based regulatory capital ratios were higher at June 30, 2019 compared to March 31, 2019 and December 31, 2018 due to earnings growth, and continued to be at levels comfortably above those required to be categorized as “well capitalized” under applicable regulatory capital guidelines.  As such, the Bank was categorized as "well capitalized" at June 30, 2019.

About Macatawa Bank
Headquartered in Holland, Mich., Macatawa Bank offers a full range of banking, retail and commercial lending, wealth management and ecommerce services to individuals, businesses and governmental entities from a network of 26 full-service branches located throughout communities in Kent, Ottawa and northern Allegan counties.  The bank is recognized for its local management team and decision making, along with providing customers excellent service, a rewarding experience and superior financial products. Macatawa Bank has been recognized for the past nine consecutive years as one of “West Michigan’s 101 Best and Brightest Companies to Work For”. For more information, visit www.macatawabank.com.

 
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 “anticipates,” "believe," "expect," "may," "should," "will," ”intend,” "continue," "improving," "additional," "focus," "forward," "future," "efforts," "strategy," "momentum," "positioned," 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 key operating metrics and financial performance, future levels of earnings and profitability, future levels of earning assets, future asset quality, future growth, and future net interest margin.  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 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, reduce non-performing asset expenses, utilize our deferred tax asset, 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, improve profitability, and produce consistent core earnings 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, extent, 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, 2018.  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)


 

   
Quarterly





Six Months Ended
June 30

EARNINGS SUMMARY

2nd Qtr
2019


1st Qtr
2019


2nd Qtr
2018


2019
      
2018
  
Total interest income
 
$
19,239
   
$
19,189
   
$
16,836
   
$
38,429
 
$

32,855
Total interest expense
   
3,284
     
3,169
     
2,183
     
6,453
     
4,019
 
Net interest income
   
15,955
     
16,020
     
14,653
     
31,976
     
28,836
 
Provision for loan losses
   
(200
)
   
(250
)
   
(300
)
   
(450
)
   
(400
)
Net interest income after provision for loan losses
   
16,155
     
16,270
     
14,953
     
32,426
     
29,236
 
                                         
NON-INTEREST INCOME
                                       
Deposit service charges
   
1,078
     
1,050
     
1,060
     
2,128
     
2,110
 
Net gains on mortgage loans
   
614
     
211
     
222
     
825
     
363
 
Trust fees
   
1,003
     
890
     
945
     
1,893
     
1,870
 
Other
   
2,403
     
2,177
     
2,241
     
4,580
     
4,256
 
Total non-interest income
   
5,098
     
4,328
     
4,468
     
9,426
     
8,599
 
                                         
NON-INTEREST EXPENSE
                                       
Salaries and benefits
   
6,379
     
6,244
     
6,389
     
12,623
     
12,583
 
Occupancy
   
996
     
1,093
     
973
     
2,089
     
2,045
 
Furniture and equipment
   
866
     
844
     
773
     
1,710
     
1,578
 
FDIC assessment
   
119
     
120
     
132
     
239
     
264
 
Problem asset costs, including losses and (gains)
   
15
     
53
     
83
     
68
     
544
 
Other
   
2,959
     
2,884
     
2,909
     
5,844
     
5,679
 
Total non-interest expense
   
11,334
     
11,238
     
11,259
     
22,573
     
22,693
 
Income before income tax
   
9,919
     
9,360
     
8,162
     
19,279
     
15,142
 
Income tax expense
   
1,916
     
1,714
     
1,434
     
3,630
     
2,659
 
Net income
 
$
8,003
   
$
7,646
   
$
6,728
   
$
15,649
   
$
12,483
 
                                         
Basic earnings per common share
 
$
0.24
   
$
0.22
   
$
0.20
   
$
0.46
   
$
0.37
 
Diluted earnings per common share
 
$
0.24
   
$
0.22
   
$
0.20
   
$
0.46
   
$
0.37
 
Return on average assets
   
1.62
%
   
1.57
%
   
1.44
%
   
1.59
%
   
1.34
%
Return on average equity
   
15.94
%
   
15.81
%
   
15.23
%
   
15.87
%
   
14.24
%
Net interest margin (fully taxable equivalent)
   
3.45
%
   
3.54
%
   
3.37
%
   
3.50
%
   
3.35
%
Efficiency ratio
   
53.84
%
   
55.23
%
   
58.88
%
   
54.52
%
   
60.62
%

BALANCE SHEET DATA
Assets
  
June 30
2019
     
March 31
2019
     
June 30
2018
  
Cash and due from banks
 
$
30,943
   
$
28,143
   
$
37,105
 
Federal funds sold and other short-term investments
   
199,940
     
115,843
     
107,416
 
Debt securities available for sale
   
222,825
     
224,645
     
218,770
 
Debt securities held to maturity
   
79,054
     
70,336
     
79,569
 
Federal Home Loan Bank Stock
   
11,558
     
11,558
     
11,558
 
Loans held for sale
   
1,016
     
512
     
61
 
Total loans
   
1,343,512
     
1,384,567
     
1,327,686
 
Less allowance for loan loss
   
16,886
     
16,892
     
16,695
 
Net loans
   
1,326,626
     
1,367,675
     
1,310,991
 
Premises and equipment, net
   
44,424
     
44,805
     
45,907
 
Bank-owned life insurance
   
41,695
     
41,433
     
40,744
 
Other real estate owned
   
3,067
     
3,261
     
3,872
 
Other assets
   
17,257
     
17,669
     
16,548
 
                         
Total Assets
 
$
1,978,405
   
$
1,925,880
   
$
1,872,541
 
                         
Liabilities and Shareholders' Equity
                       
Noninterest-bearing deposits
 
$
476,700
   
$
466,631
   
$
496,605
 
Interest-bearing deposits
   
1,184,406
     
1,151,233
     
1,083,856
 
Total deposits
   
1,661,106
     
1,617,864
     
1,580,461
 
Other borrowed funds
   
60,000
     
60,000
     
65,667
 
Long-term debt
   
41,238
     
41,238
     
41,238
 
Other liabilities
   
10,542
     
8,812
     
5,461
 
Total Liabilities
   
1,772,886
     
1,727,914
     
1,692,827
 
                         
Shareholders' equity
   
205,519
     
197,966
     
179,714
 
                         
Total Liabilities and Shareholders' Equity
 
$
1,978,405
   
$
1,925,880
   
$
1,872,541
 


MACATAWA BANK CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands except per share information)


   
Quarterly
   
Year to Date
 
   
2nd Qtr
2019
   
1st Qtr
2019
   
4th Qtr
2018
   
3rd Qtr
2018
   
2nd Qtr
2018
   
2019
   
2018
 
EARNINGS SUMMARY
                                         
Net interest income
 
$
15,955
   
$
16,020
   
$
15,628
   
$
15,162
   
$
14,653
   
$
31,976
   
$
28,836
 
Provision for loan losses
   
(200
)
   
(250
)
   
850
     
-
     
(300
)
   
(450
)
   
(400
)
Total non-interest income
   
5,098
     
4,328
     
4,405
     
4,499
     
4,468
     
9,426
     
8,599
 
Total non-interest expense
   
11,334
     
11,238
     
10,397
     
11,239
     
11,259
     
22,573
     
22,693
 
Federal income tax expense
   
1,916
     
1,714
     
1,743
     
1,570
     
1,434
     
3,630
     
2,659
 
Net income
 
$
8,003
   
$
7,646
   
$
7,043
   
$
6,852
   
$
6,728
   
$
15,649
   
$
12,483
 
                                                         
Basic earnings per common share
 
$
0.24
   
$
0.22
   
$
0.21
   
$
0.20
   
$
0.20
   
$
0.46
   
$
0.37
 
Diluted earnings per common share
 
$
0.24
   
$
0.22
   
$
0.21
   
$
0.20
   
$
0.20
   
$
0.46
   
$
0.37
 
                                                         
MARKET DATA
                                                       
Book value per common share
 
$
6.04
   
$
5.81
   
$
5.61
   
$
5.41
   
$
5.28
   
$
6.04
   
$
5.28
 
Tangible book value per common share
 
$
6.04
   
$
5.81
   
$
5.61
   
$
5.41
   
$
5.28
   
$
6.04
   
$
5.28
 
Market value per common share
 
$
10.26
   
$
9.94
   
$
9.62
   
$
11.71
   
$
12.14
   
$
10.26
   
$
12.14
 
Average basic common shares
   
34,042,886
     
34,040,380
     
34,031,454
     
34,014,319
     
34,016,679
     
34,041,628
     
34,013,555
 
Average diluted common shares
   
34,042,886
     
34,040,380
     
34,031,454
     
34,014,319
     
34,016,679
     
34,041,628
     
34,014,152
 
Period end common shares
   
34,042,331
     
34,044,149
     
34,045,411
     
34,014,319
     
34,014,319
     
34,042,331
     
34,014,319
 
                                                         
PERFORMANCE RATIOS
                                                       
Return on average assets
   
1.62
%
   
1.57
%
   
1.47
%
   
1.43
%
   
1.44
%
   
1.59
%
   
1.34
%
Return on average equity
   
15.94
%
   
15.81
%
   
15.12
%
   
15.12
%
   
15.23
%
   
15.87
%
   
14.24
%
Net interest margin (fully taxable equivalent)
   
3.45
%
   
3.54
%
   
3.46
%
   
3.37
%
   
3.37
%
   
3.50
%
   
3.35
%
Efficiency ratio
   
53.84
%
   
55.23
%
   
51.90
%
   
57.16
%
   
58.88
%
   
54.52
%
   
60.62
%
Full-time equivalent employees (period end)
   
338
     
332
     
334
     
332
     
339
     
338
     
339
 
                                                         
ASSET QUALITY
                                                       
Gross charge-offs
 
$
41
   
$
157
   
$
1,179
   
$
30
   
$
30
   
$
198
   
$
126
 
Net charge-offs/(recoveries)
 
$
(194
)
 
$
(266
)
 
$
776
   
$
(108
)
 
$
(320
)
 
$
(460
)
 
$
(495
)
Net charge-offs to average loans (annualized)
   
-0.06
%
   
-0.08
%
   
0.23
%
   
-0.03
%
   
-0.10
%
   
-0.07
%
   
-0.07
%
Nonperforming loans
 
$
293
   
$
409
   
$
1,304
   
$
123
   
$
125
   
$
293
   
$
125
 
Other real estate and repossessed assets
 
$
3,067
   
$
3,261
   
$
3,380
   
$
3,465
   
$
3,872
   
$
3,067
   
$
3,872
 
Nonperforming loans to total loans
   
0.02
%
   
0.03
%
   
0.09
%
   
0.01
%
   
0.01
%
   
0.02
%
   
0.01
%
Nonperforming assets to total assets
   
0.17
%
   
0.19
%
   
0.24
%
   
0.19
%
   
0.21
%
   
0.17
%
   
0.21
%
Allowance for loan losses
 
$
16,886
   
$
16,892
   
$
16,876
   
$
16,803
   
$
16,695
   
$
16,886
   
$
16,695
 
Allowance for loan losses to total loans
   
1.26
%
   
1.22
%
   
1.20
%
   
1.25
%
   
1.26
%
   
1.26
%
   
1.26
%
Allowance for loan losses to nonperforming loans
   
5763.14
%
   
4130.07
%
   
1293.18
%
   
13660.98
%
   
13356.00
%
   
5763.14
%
   
13356.00
%
                                                         
CAPITAL
                                                       
Average equity to average assets
   
10.15
%
   
9.93
%
   
9.71
%
   
9.47
%
   
9.44
%
   
10.04
%
   
9.43
%
Common equity tier 1 to risk weighted assets (Consolidated)
   
13.13
%
   
12.55
%
   
12.01
%
   
12.13
%
   
11.83
%
   
13.13
%
   
11.83
%
Tier 1 capital to average assets (Consolidated)
   
12.34
%
   
12.22
%
   
12.12
%
   
11.90
%
   
11.91
%
   
12.34
%
   
11.91
%
Total capital to risk-weighted assets (Consolidated)
   
16.78
%
   
16.14
%
   
15.54
%
   
15.79
%
   
15.49
%
   
16.78
%
   
15.49
%
Common equity tier 1 to risk weighted assets (Bank)
   
15.27
%
   
14.66
%
   
14.09
%
   
14.28
%
   
14.01
%
   
15.27
%
   
14.01
%
Tier 1 capital to average assets (Bank)
   
12.01
%
   
11.90
%
   
11.78
%
   
11.56
%
   
11.58
%
   
12.01
%
   
11.58
%
Total capital to risk-weighted assets (Bank)
   
16.36
%
   
15.73
%
   
15.13
%
   
15.36
%
   
15.09
%
   
16.36
%
   
15.09
%
Common equity to assets
   
10.40
%
   
10.29
%
   
9.67
%
   
9.59
%
   
9.60
%
   
10.40
%
   
9.60
%
Tangible common equity to assets
   
10.40
%
   
10.29
%
   
9.67
%
   
9.59
%
   
9.60
%
   
10.40
%
   
9.60
%
                                                         
END OF PERIOD BALANCES
                                                       
Total portfolio loans
 
$
1,343,512
   
$
1,384,567
   
$
1,405,658
   
$
1,344,683
   
$
1,327,686
   
$
1,343,512
   
$
1,327,686
 
Earning assets
   
1,856,962
     
1,809,469
     
1,849,630
     
1,804,672
     
1,751,167
     
1,856,962
     
1,751,167
 
Total assets
   
1,978,405
     
1,925,880
     
1,975,124
     
1,919,273
     
1,872,541
     
1,978,405
     
1,872,541
 
Deposits
   
1,661,106
     
1,617,864
     
1,676,739
     
1,617,743
     
1,580,461
     
1,661,106
     
1,580,461
 
Total shareholders' equity
   
205,519
     
197,966
     
190,853
     
183,976
     
179,714
     
205,519
     
179,714
 
                                                         
AVERAGE BALANCES
                                                       
Total portfolio loans
 
$
1,367,202
   
$
1,399,464
   
$
1,363,548
   
$
1,325,268
   
$
1,327,408
   
$
1,383,244
   
$
1,321,158
 
Earning assets
   
1,860,353
     
1,833,924
     
1,806,229
     
1,799,600
     
1,756,909
     
1,847,211
     
1,743,815
 
Total assets
   
1,978,880
     
1,948,301
     
1,918,543
     
1,915,655
     
1,872,559
     
1,963,675
     
1,859,309
 
Deposits
   
1,667,580
     
1,646,268
     
1,618,861
     
1,614,151
     
1,575,408
     
1,656,983
     
1,556,497
 
Total shareholders' equity
   
200,888
     
193,463
     
186,361
     
181,329
     
176,749
     
197,196
     
175,339
 



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