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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):  October 24, 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 October 24, 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 October 24, 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:  October 24, 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
Third Quarter 2019 Results

HOLLAND, Mich. (October 24, 2019) – Macatawa Bank Corporation (NASDAQ: MCBC) today announced its results for the third quarter of 2019, reflecting continued strong financial performance.

Net income of $8.2 million in third quarter 2019 versus $6.9 million in third quarter 2018 – up 19%
Growth in revenue (up 7%) over third quarter 2018 while expenses were down 2%
Strong profitability with return on assets and equity of 1.59% and 15.69%, respectively, in third quarter 2019
Loan portfolio balances grew by $33.7 million during the quarter
Growth in core deposit balances during the quarter of $159 million and up 13% from September 30, 2018
Asset quality metrics remained strong

Macatawa reported net income of $8.2 million, or $0.24 per diluted share, in the third quarter 2019 compared to $6.9 million, or $0.20 per diluted share, in the third quarter 2018.  For the first nine months of 2019, Macatawa reported net income of $23.8 million, or $0.70 per diluted share, compared to $19.3 million, or $0.57 per diluted share, for the same period in 2018.  Macatawa’s 2019 earnings were positively impacted by improving revenues while reducing non-interest expenses.

“Macatawa Bank Corporation continued its strong financial performance in the third quarter of 2019,” said Ronald L. Haan, President & CEO of the Company.  “Higher revenues resulting from growth in loans and core deposits combined with well managed operating expenses resulted in a nineteen percent increase in net income compared to the third quarter of 2018.  Our efforts have once again resulted in strong and consistent financial performance for our shareholders.”

Mr. Haan concluded, “We remain committed to providing the highest standards of banking excellence.  While the banking environment in Western Michigan remains highly competitive, we continue to add new customers who appreciate our local focus, exceptional customer service, and professional staff.  Building a well-disciplined company that will deliver superior financial services remains our goal, and we believe that Macatawa Bank Corporation remains well-positioned for continued growth and success as we finish 2019 and head into 2020.”


Macatawa Bank Corporation 3Q Results / page 2 of 5

Operating Results
Net interest income for the third quarter 2019 totaled $15.8 million, a decrease of $119,000 from the second quarter 2019 and an increase of $674,000 from the third quarter 2018.  Net interest margin for the third quarter 2019 was 3.29 percent, down 16 basis points from the second quarter 2019, and down 8 basis points from the third quarter 2018.  Net interest margin in the third quarter 2019 was negatively impacted by higher balances of short-term investments resulting from significant seasonal inflows of municipal deposit balances.  Short-term investment balances were up 59 percent in the third quarter 2019 from the second quarter 2019.  While positive interest margin was achieved on the seasonal deposit inflows, it was lower than the Company’s overall net interest margin, thereby causing a margin decline.  Of the 16 basis point decline in the third quarter, this dynamic accounted for 10 basis points.

Average interest earning assets for the third quarter 2019 increased $61.0 million from the second quarter 2019 and were up $121.7 million from the third quarter 2018.  This growth was the primary contributor to the improvement in net interest income.

Non-interest income increased $115,000 in the third quarter 2019 compared to the second quarter 2019 and increased $714,000 from the third quarter 2018.  These changes were largely due to increases in gains on sales of mortgage loans.  Gains on sales of mortgage loans in the third quarter 2019 were up $210,000 compared to the second quarter 2019 and were up $554,000 from the third quarter 2018.  The Company originated $24.6 million in mortgage loans for sale in the third quarter 2019 compared to $21.4 million in the second quarter 2019 and $8.4 million in the third 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).  Also positively impacting non-interest income in the third quarter 2019 were increases in trust and brokerage fee income.

Non-interest expense was $11.0 million for the third quarter 2019, compared to $11.3 million for the second quarter 2019 and $11.2 million for the third quarter 2018.  The largest component of non-interest expense was salaries and benefit expenses.  Salaries and benefit expenses were down $107,000 compared to the second quarter 2019 and were down $88,000 compared to the third quarter 2018.  The decrease compared to the second quarter 2019 and the third quarter 2019 was primarily due to a lower level of medical insurance costs in the third quarter 2019 more than offsetting the impact of higher variable based compensation from higher mortgage production volume.

Nonperforming asset expenses remained low at just $46,000 in the third quarter 2019.  This was an increase of $31,000 compared to the second quarter 2019 and a decrease of $62,000 compared to the third quarter 2018.  There were no net gains or losses realized on sales of foreclosed properties in the third quarter 2019, while there were net gains of $34,000 in the second quarter 2019 and net losses of $26,000 in the third quarter 2018.  Furniture and equipment expenses were up $21,000 in the third quarter 2019 compared to the second quarter 2019 and were up $127,000 compared to the third quarter 2018.  The increases were due primarily to increases in technology service contracts.  The Company incurred no FDIC assessment expense in the third quarter 2019 due to assessment credits applied by the FDIC.  Other categories of non-interest expense were relatively stable compared to the second quarter 2019 and the third quarter 2018.

Federal income tax expense was $1.9 million for the third quarter 2019 compared to $1.9 million for the second quarter 2019 and $1.6 million for the second quarter 2018.  The effective tax rate was 18.7 percent for the third quarter 2019, compared to 19.3 percent for the second quarter 2019 and 18.6 percent for the third quarter 2018.


Macatawa Bank Corporation 3Q Results / page 3 of 5

Asset Quality
The Company’s asset quality remained strong in the third quarter 2019 and the Company again experienced net loan recoveries in the third quarter 2019.  No provision for loan losses was recorded in the third quarter 2019.  This compares to a negative provision of $200,000 in the second quarter 2019 and no provision in the third quarter 2018.  Net loan recoveries for the third quarter 2019 were $259,000, compared to second quarter 2019 net loan recoveries of $194,000 and third quarter 2018 net loan recoveries of $108,000.  The Company has experienced net loan recoveries in eighteen of the past nineteen quarters. Total loans past due on payments by 30 days or more amounted to $207,000 at September 30, 2019, down 43 percent from $360,000 at June 30, 2019 and down 58 percent from $492,000 at September 30, 2018.  Delinquency as a percentage of total loans was a nominal 0.02 percent at September 30, 2019.

The allowance for loan losses of $17.1 million was 1.24 percent of total loans at September 30, 2019, compared to 1.26 percent of total loans at June 30, 2019, and 1.25 percent at September 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 81-to-1 as of September 30, 2019.

At September 30, 2019, the Company's nonperforming loans were $211,000, representing 0.02 percent of total loans.  This compares to $293,000 (0.02 percent of total loans) at June 30, 2019 and $123,000 (0.01 percent of total loans) at September 30, 2018.  Other real estate owned and repossessed assets were $3.1 million at September 30, 2019, compared to $3.1 million at June 30, 2019 and $3.5 million at September 30, 2018. Total nonperforming assets, including other real estate owned and nonperforming loans, decreased by $268,000, or 7.5 percent, from September 30, 2018 to September 30, 2019.

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

 
Dollars in 000s
 
Sept 30,
2019
   
Jun 30,
2019
   
Mar 31,
2019
   
Dec 31,
2018
   
Sept 30,
2018
 
                               
Commercial Real Estate
 
$
102
   
$
102
   
$
213
   
$
318
   
$
121
 
Commercial and Industrial
   
---
     
---
     
---
     
873
     
---
 
Total Commercial Loans
   
102
     
102
     
213
     
1,191
     
121
 
Residential Mortgage Loans
   
109
     
191
     
195
     
112
     
2
 
Consumer Loans
   
---
     
---
     
1
     
1
     
---
 
Total Non-Performing Loans
 
$
211
   
$
293
   
$
409
   
$
1,304
   
$
123
 


Macatawa Bank Corporation 3Q Results / page 4 of 5

Total non-performing assets were $3.3 million, or 0.15 percent of total assets, at September 30, 2019.  A break-down of non-performing assets is shown in the table below.

 
Dollars in 000s
 
Sept 30,
2019
   
Jun 30,
2019
   
Mar 31,
2019
   
Dec 31,
2018
   
Sept 30,
2018
 
                               
Non-Performing Loans
 
$
211
   
$
293
   
$
409
   
$
1,304
   
$
123
 
Other Repossessed Assets
   
---
     
---
     
---
     
---
     
---
 
Other Real Estate Owned
   
3,109
     
3,067
     
3,261
     
3,380
     
3,465
 
Total Non-Performing Assets
 
$
3,320
   
$
3,360
   
$
3,670
   
$
4,684
   
$
3,588
 

Balance Sheet, Liquidity and Capital
Total assets were $2.14 billion at September 30, 2019, an increase of $166.1 million from $1.98 billion at June 30, 2019 and an increase of $225.2 million from $1.92 billion at September 30, 2018.  Total loans were $1.38 billion at September 30, 2019, an increase of $33.7 million from $1.34 billion at June 30, 2019 and an increase of $32.5 million from $1.34 billion at September 30, 2018.

Commercial loans increased by $51.9 million from September 30, 2018 to September 30, 2019, partially offset by decreases of $12.1 million in the residential mortgage portfolio and $7.2 million in the consumer loan portfolio.  Commercial real estate loans increased by $27.5 million while commercial and industrial loans increased by $24.4 million during the same period.

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

 
Dollars in 000s
 
Sept 30,
2019
   
Jun 30,
2019
   
Mar 31,
2019
   
Dec 31,
2018
   
Sept 30,
2018
 
                               
Construction and Development
 
$
117,782
   
$
102,516
   
$
102,133
   
$
99,867
   
$
93,794
 
Other Commercial Real Estate
   
462,686
     
461,427
     
470,667
     
468,840
     
459,146
 
Commercial Loans Secured by Real Estate
   
580,468
     
563,943
     
572,800
     
568,707
     
552,940
 
Commercial and Industrial
   
492,085
     
467,222
     
493,891
     
513,347
     
467,703
 
Total Commercial Loans
 
$
1,072,553
   
$
1,031,165
   
$
1,066,691
   
$
1,082,054
   
$
1,020,643
 

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.  Balances in these categories began to increase again in the third quarter.

Total deposits were $1.82 billion at September 30, 2019, up $159.0 million from $1.66 billion at June 30, 2019 and up $202.4 million, or 12.5 percent, from $1.62 billion at September 30, 2018.  The Company’s municipal deposit customers typically experience seasonal growth in their balances during the third quarter.  Their totals increased by $67.0 million during the three months ended September 30, 2019.  Demand deposits were up $122.7 million in the third quarter 2019 compared to the second quarter 2019 and were up $113.3 million compared to the third quarter 2018.  Money market deposits and savings deposits were up $33.5 million from the second quarter 2019 and were up $49.7 million from the third quarter 2018.  Certificates of deposit were up $2.9 million in the third quarter 2019 compared to June 30, 2019 and were up $39.5 million compared to September 30, 2018.  The Company 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 3Q Results / page 5 of 5

Macatawa Bank's regulatory capital ratios at September 30, 2019 continued to be at levels comfortably above those required to be categorized as “well capitalized” under applicable regulatory capital guidelines.  As such, Macatawa Bank was categorized as "well capitalized" at September 30, 2019.

About Macatawa Bank Corporation
Macatawa Bank Corporation is the bank holding company for its wholly-owned subsidiary bank, 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 beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and Macatawa Bank Corporation. Forward-looking statements are identifiable by words or phrases such as “outlook”, “plan” or “strategy”; that an event or trend “could”, “may”, “should”, “will”, “is likely”, or is “possible” or “probable” to occur or “continue”, has “begun” or “is scheduled” or “on track” or that the Company or its management “anticipates”, “believes”, “estimates”, “plans”, “forecasts”, “intends”, “predicts”, “projects”, or “expects” a particular result, or is “committed”, “confident”, “optimistic” or has an “opinion” that an event will occur, or other words or phrases such as “ongoing”, “future”, “signs”, “efforts”, “tend”, “exploring”, “appearing”, “until”, “near term”, “concern”, “going forward”, “focus”, “starting”, “initiative,” “trend” and variations of such words and similar expressions. 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, those related to future levels of earning assets, future composition of our loan portfolio, trends in credit quality metrics, future capital levels and capital needs, real estate valuation, future levels of repossessed and foreclosed properties and nonperforming assets, future levels of losses and costs associated with the administration and disposition of repossessed and foreclosed properties and nonperforming assets, future levels of loan charge-offs, future levels of other real estate owned, future levels of provisions for loan losses and reserve recoveries, the rate of asset dispositions, future dividends, future growth and funding sources, future cost of funds, future liquidity levels, future profitability levels, future interest rate levels, future net interest margin levels, the effects on earnings of changes in interest rates, future economic conditions, future effects of new or changed accounting standards, future loss recoveries, loan demand and loan growth and the future level of other revenue sources. 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. All statements with references to future time periods are forward-looking. All of the information concerning interest rate sensitivity is forward-looking. 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 or forecasted in 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
   
Nine Months Ended
 
   
3rd Qtr
   
2nd Qtr
   
3rd Qtr
   
September 30
 
EARNINGS SUMMARY
 
2019
   
2019
   
2018
   
2019
   
2018
 
Total interest income
 
$
19,079
   
$
19,239
   
$
17,687
   
$
57,508
   
$
50,542
 
Total interest expense
   
3,243
     
3,284
     
2,525
     
9,696
     
6,544
 
Net interest income
   
15,836
     
15,955
     
15,162
     
47,812
     
43,998
 
Provision for loan losses
   
-
     
(200
)
   
-
     
(450
)
   
(400
)
Net interest income after provision for loan losses
   
15,836
     
16,155
     
15,162
     
48,262
     
44,398
 
                                         
NON-INTEREST INCOME
                                       
Deposit service charges
   
1,139
     
1,078
     
1,132
     
3,267
     
3,242
 
Net gains on mortgage loans
   
824
     
614
     
270
     
1,650
     
633
 
Trust fees
   
920
     
1,003
     
889
     
2,813
     
2,759
 
Other
   
2,330
     
2,403
     
2,208
     
6,909
     
6,464
 
Total non-interest income
   
5,213
     
5,098
     
4,499
     
14,639
     
13,098
 
                                         
NON-INTEREST EXPENSE
                                       
Salaries and benefits
   
6,272
     
6,379
     
6,360
     
18,895
     
18,942
 
Occupancy
   
966
     
996
     
939
     
3,055
     
2,984
 
Furniture and equipment
   
887
     
866
     
760
     
2,597
     
2,338
 
FDIC assessment
   
-
     
119
     
127
     
239
     
391
 
Problem asset costs, including losses and (gains)
   
46
     
15
     
108
     
114
     
652
 
Other
   
2,838
     
2,959
     
2,945
     
8,682
     
8,625
 
Total non-interest expense
   
11,009
     
11,334
     
11,239
     
33,582
     
33,932
 
Income before income tax
   
10,040
     
9,919
     
8,422
     
29,319
     
23,564
 
Income tax expense
   
1,882
     
1,916
     
1,570
     
5,512
     
4,228
 
Net income
 
$
8,158
   
$
8,003
   
$
6,852
   
$
23,807
   
$
19,336
 
                                         
Basic earnings per common share
 
$
0.24
   
$
0.24
   
$
0.20
   
$
0.70
   
$
0.57
 
Diluted earnings per common share
 
$
0.24
   
$
0.24
   
$
0.20
   
$
0.70
   
$
0.57
 
Return on average assets
   
1.59
%
   
1.62
%
   
1.43
%
   
1.59
%
   
1.37
%
Return on average equity
   
15.69
%
   
15.94
%
   
15.12
%
   
15.80
%
   
14.54
%
Net interest margin (fully taxable equivalent)
   
3.29
%
   
3.45
%
   
3.37
%
   
3.43
%
   
3.36
%
Efficiency ratio
   
52.30
%
   
53.84
%
   
57.16
%
   
53.77
%
   
59.43
%

BALANCE SHEET DATA
 
September 30
   
June 30
   
September 30
 
Assets
 
2019
   
2019
   
2018
 
Cash and due from banks
 
$
50,870
   
$
30,943
   
$
30,837
 
Federal funds sold and other short-term investments
   
319,566
     
199,940
     
152,339
 
Debt securities available for sale
   
209,895
     
222,825
     
218,615
 
Debt securities held to maturity
   
81,995
     
79,054
     
71,688
 
Federal Home Loan Bank Stock
   
11,558
     
11,558
     
11,558
 
Loans held for sale
   
1,317
     
1,016
     
-
 
Total loans
   
1,377,227
     
1,343,512
     
1,344,683
 
Less allowance for loan loss
   
17,145
     
16,886
     
16,803
 
Net loans
   
1,360,082
     
1,326,626
     
1,327,880
 
Premises and equipment, net
   
43,956
     
44,424
     
45,631
 
Bank-owned life insurance
   
41,960
     
41,695
     
40,996
 
Other real estate owned
   
3,109
     
3,067
     
3,465
 
Other assets
   
20,190
     
17,257
     
16,264
 
                         
Total Assets
 
$
2,144,498
   
$
1,978,405
   
$
1,919,273
 
                         
Liabilities and Shareholders' Equity
                       
Noninterest-bearing deposits
 
$
501,731
   
$
476,700
   
$
500,680
 
Interest-bearing deposits
   
1,318,409
     
1,184,406
     
1,117,063
 
Total deposits
   
1,820,140
     
1,661,106
     
1,617,743
 
Other borrowed funds
   
60,000
     
60,000
     
70,000
 
Long-term debt
   
41,238
     
41,238
     
41,238
 
Other liabilities
   
11,335
     
10,542
     
6,316
 
Total Liabilities
   
1,932,713
     
1,772,886
     
1,735,297
 
                         
Shareholders' equity
   
211,785
     
205,519
     
183,976
 
                         
Total Liabilities and Shareholders' Equity
 
$
2,144,498
   
$
1,978,405
   
$
1,919,273
 


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


   
Quarterly
   
Year to Date
 
                                           
   
3rd Qtr
2019
   
2nd Qtr
2019
   
1st Qtr
2019
   
4th Qtr
2018
   
3rd Qtr
2018
   
2019
   
2018
 
EARNINGS SUMMARY
                                         
Net interest income
 
$
15,836
   
$
15,955
   
$
16,020
   
$
15,628
   
$
15,162
   
$
47,812
   
$
43,998
 
Provision for loan losses
   
-
     
(200
)
   
(250
)
   
850
     
-
     
(450
)
   
(400
)
Total non-interest income
   
5,213
     
5,098
     
4,328
     
4,405
     
4,499
     
14,639
     
13,098
 
Total non-interest expense
   
11,009
     
11,334
     
11,238
     
10,397
     
11,239
     
33,582
     
33,932
 
Federal income tax expense
   
1,882
     
1,916
     
1,714
     
1,743
     
1,570
     
5,512
     
4,228
 
Net income
 
$
8,158
   
$
8,003
   
$
7,646
   
$
7,043
   
$
6,852
   
$
23,807
   
$
19,336
 
                                                         
Basic earnings per common share
 
$
0.24
   
$
0.24
   
$
0.22
   
$
0.21
   
$
0.20
   
$
0.70
   
$
0.57
 
Diluted earnings per common share
 
$
0.24
   
$
0.24
   
$
0.22
   
$
0.21
   
$
0.20
   
$
0.70
   
$
0.57
 
                                                         
MARKET DATA
                                                       
Book value per common share
 
$
6.22
   
$
6.04
   
$
5.81
   
$
5.61
   
$
5.41
   
$
6.22
   
$
5.41
 
Tangible book value per common share
 
$
6.22
   
$
6.04
   
$
5.81
   
$
5.61
   
$
5.41
   
$
6.22
   
$
5.41
 
Market value per common share
 
$
10.39
   
$
10.26
   
$
9.94
   
$
9.62
   
$
11.71
   
$
10.39
   
$
11.71
 
Average basic common shares
   
34,060,796
     
34,042,886
     
34,040,380
     
34,031,454
     
34,014,319
     
34,048,087
     
34,013,813
 
Average diluted common shares
   
34,060,796
     
34,042,886
     
34,040,380
     
34,031,454
     
34,014,319
     
34,048,087
     
34,014,209
 
Period end common shares
   
34,061,080
     
34,042,331
     
34,044,149
     
34,045,411
     
34,014,319
     
34,061,080
     
34,014,319
 
                                                         
PERFORMANCE RATIOS
                                                       
Return on average assets
   
1.59
%
   
1.62
%
   
1.57
%
   
1.47
%
   
1.43
%
   
1.59
%
   
1.37
%
Return on average equity
   
15.69
%
   
15.94
%
   
15.81
%
   
15.12
%
   
15.12
%
   
15.80
%
   
14.54
%
Net interest margin (fully taxable equivalent)
   
3.29
%
   
3.45
%
   
3.54
%
   
3.46
%
   
3.37
%
   
3.43
%
   
3.36
%
Efficiency ratio
   
52.30
%
   
53.84
%
   
55.23
%
   
51.90
%
   
57.16
%
   
53.77
%
   
59.43
%
Full-time equivalent employees (period end)
   
327
     
338
     
332
     
334
     
332
     
327
     
332
 
                                                         
ASSET QUALITY
                                                       
Gross charge-offs
 
$
48
   
$
41
   
$
157
   
$
1,179
   
$
30
   
$
246
   
$
156
 
Net charge-offs/(recoveries)
 
$
(259
)
 
$
(194
)
 
$
(266
)
 
$
776
   
$
(108
)
 
$
(719
)
 
$
(603
)
Net charge-offs to average loans (annualized)
   
-0.08
%
   
-0.06
%
   
-0.08
%
   
0.23
%
   
-0.03
%
   
-0.07
%
   
-0.06
%
Nonperforming loans
 
$
211
   
$
293
   
$
409
   
$
1,304
   
$
123
   
$
211
   
$
123
 
Other real estate and repossessed assets
 
$
3,109
   
$
3,067
   
$
3,261
   
$
3,380
   
$
3,465
   
$
3,109
   
$
3,465
 
Nonperforming loans to total loans
   
0.02
%
   
0.02
%
   
0.03
%
   
0.09
%
   
0.01
%
   
0.02
%
   
0.01
%
Nonperforming assets to total assets
   
0.15
%
   
0.17
%
   
0.19
%
   
0.24
%
   
0.19
%
   
0.15
%
   
0.19
%
Allowance for loan losses
 
$
17,145
   
$
16,886
   
$
16,892
   
$
16,876
   
$
16,803
   
$
17,145
   
$
16,803
 
Allowance for loan losses to total loans
   
1.24
%
   
1.26
%
   
1.22
%
   
1.20
%
   
1.25
%
   
1.24
%
   
1.25
%
Allowance for loan losses to nonperforming loans
   
8125.59
%
   
5763.14
%
   
4130.07
%
   
1293.18
%
   
13660.98
%
   
8125.59
%
   
13660.98
%
                                                         
CAPITAL
                                                       
Average equity to average assets
   
10.15
%
   
10.15
%
   
9.93
%
   
9.71
%
   
9.47
%
   
10.08
%
   
9.44
%
Common equity tier 1 to risk weighted assets (Consolidated)
   
13.23
%
   
13.13
%
   
12.55
%
   
12.01
%
   
12.13
%
   
13.23
%
   
12.13
%
Tier 1 capital to average assets (Consolidated)
   
12.22
%
   
12.34
%
   
12.22
%
   
12.12
%
   
11.90
%
   
12.22
%
   
11.90
%
Total capital to risk-weighted assets (Consolidated)
   
16.83
%
   
16.78
%
   
16.14
%
   
15.54
%
   
15.79
%
   
16.83
%
   
15.79
%
Common equity tier 1 to risk weighted assets (Bank)
   
15.31
%
   
15.27
%
   
14.66
%
   
14.09
%
   
14.28
%
   
15.31
%
   
14.28
%
Tier 1 capital to average assets (Bank)
   
11.88
%
   
12.01
%
   
11.90
%
   
11.78
%
   
11.56
%
   
11.88
%
   
11.56
%
Total capital to risk-weighted assets (Bank)
   
16.39
%
   
16.36
%
   
15.73
%
   
15.13
%
   
15.36
%
   
16.39
%
   
15.36
%
Common equity to assets
   
9.88
%
   
10.40
%
   
10.29
%
   
9.67
%
   
9.59
%
   
9.88
%
   
9.59
%
Tangible common equity to assets
   
9.88
%
   
10.40
%
   
10.29
%
   
9.67
%
   
9.59
%
   
9.88
%
   
9.59
%
                                                         
END OF PERIOD BALANCES
                                                       
Total portfolio loans
 
$
1,377,227
   
$
1,343,512
   
$
1,384,567
   
$
1,405,658
   
$
1,344,683
   
$
1,377,227
   
$
1,344,683
 
Earning assets
   
1,999,817
     
1,856,962
     
1,809,469
     
1,849,630
     
1,804,672
     
1,999,817
     
1,804,672
 
Total assets
   
2,144,498
     
1,978,405
     
1,925,880
     
1,975,124
     
1,919,273
     
2,144,498
     
1,919,273
 
Deposits
   
1,820,140
     
1,661,106
     
1,617,864
     
1,676,739
     
1,617,743
     
1,820,140
     
1,617,743
 
Total shareholders' equity
   
211,785
     
205,519
     
197,966
     
190,853
     
183,976
     
211,785
     
183,976
 
                                                         
AVERAGE BALANCES
                                                       
Total portfolio loans
 
$
1,348,417
   
$
1,367,202
   
$
1,399,464
   
$
1,363,548
   
$
1,325,268
   
$
1,371,507
   
$
1,322,543
 
Earning assets
   
1,921,346
     
1,860,353
     
1,833,924
     
1,806,229
     
1,799,600
     
1,872,195
     
1,762,614
 
Total assets
   
2,049,006
     
1,978,880
     
1,948,301
     
1,918,543
     
1,915,655
     
1,992,431
     
1,878,297
 
Deposits
   
1,728,657
     
1,667,580
     
1,646,268
     
1,618,861
     
1,614,151
     
1,681,137
     
1,575,926
 
Total shareholders' equity
   
208,031
     
200,888
     
193,463
     
186,361
     
181,329
     
200,847
     
177,358
 



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