Press Release

Horizon Bancorp, Inc. Announces Record 2019 Second Quarter and Year-to-Date Net Income

Company Release - 7/24/2019 4:35 PM ET

MICHIGAN CITY, Ind., July 24, 2019 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”) today announced its unaudited financial results for the three-month and six-month periods ended June 30, 2019. All share data has been adjusted to reflect Horizon’s three-for-two stock split effective June 15, 2018. 

SUMMARY:

  • Net income for the quarter ended June 30, 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $14.1 million, or $0.37 diluted earnings per share, for the quarter ended June 30, 2018. This represents the highest quarterly net income in the Company’s history.

  • Core net income for the quarter ended June 30, 2019 increased 26.0% to $17.6 million, or $0.39 diluted earnings per share, compared to $14.0 million, or $0.37 diluted earnings per share, for the same period in 2018. This represents the highest quarter-to-date core net income and core diluted earnings per share in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income) 

  • Net income for the first six months of 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the first six months of 2018. This represents the highest year-to-date net income as of June 30th in the Company’s history.  

  • Core net income for the first six months of 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the first six months of 2018. This represents the highest year-to-date core net income and core diluted earnings per share as of June 30th in the Company’s history. (See the “Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share” table on page 4 for a description of the elements of core net income)

  • Net interest margin for the quarter ended June 30, 2019 was 3.73% compared to 3.62% and 3.78% for the quarters ended March 31, 2019 and June 30, 2018, respectively. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield of interest-earning assets as loans continue to reprice upwards and a decrease in interest-bearing liabilities from reducing short-term borrowings with the liquidity obtained from the Salin acquisition, along with a stabilization in deposit pricing.

  • Core net interest margin for the quarter ended June 30, 2019 was 3.61% compared to 3.46% and 3.60% for the quarters ended March 31, 2019 and June 30, 2018, respectively. (See the “Non-GAAP Reconciliation of Net Interest Margin” table on page 5 for a description of the elements of core net interest margin)

  • Return on average assets was 1.32% for the second quarter of 2019 compared to 1.41% for the second quarter of 2018. Return on average assets was 1.18% for the first six months of 2019 compared to 1.36% for the first six months of 2018.

  • Core return on average assets for the second quarter of 2019 was 1.40% compared to 1.39% for the second quarter of 2018. Core return on average assets was 1.36% for the first six months of 2019 compared to 1.35% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets) 

  • Return on average equity was 10.73% for the second quarter of 2019 compared to 12.15% for the second quarter of 2018. Return on average equity was 9.82% for the first six months of 2019 compared to 11.72% for the first six months of 2018. 

  • Core return on average equity for the second quarter of 2019 was 11.34% compared to 12.02% for the second quarter of 2018. Core return on average equity was 11.38% for the first six months of 2019 compared to 11.65% for the first six months of 2018. (See the “Non-GAAP Reconciliation of Return on Average Assets and Return on Average Common Equity” table on page 10 for the description of core return on average assets) 

  • Horizon’s tangible book value per share increased to $9.91 at June 30, 2019 compared to $9.60 and $8.84 at March 31, 2019 and June 30, 2018, respectively. This represents the highest tangible book value per share in the Company’s history. 

  • Horizon closed three full-service branches on April 19, 2019 and one loan production office on April 26, 2019. Horizon also plans to close one additional full-service branch on September 6, 2019. 

  • Horizon consolidated five full-service branches acquired in the March 2019 acquisition of Salin Bancshares, Inc. and Salin Bank and Trust Company (“Salin”), in coordination with the core data conversion from the acquisition occurring on April 26, 2019. 

  • On June 18, 2019, Horizon’s Board of Directors approved an increase in the Company’s quarterly cash dividend from $0.10 to $0.12 per share, paid on July 19, 2019, to shareholders of record as of July 5, 2019. 

  • On July 16, 2019, Horizon’s Board of Directors authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value.

Craig Dwight, Chairman and CEO of Horizon, commented:  “I am pleased to announce Horizon’s record 2019 second quarter and year-to-date core earnings of $17.6 million, or $0.39 per diluted share, and $31.8 million, or $0.75 per diluted share. Core earnings, exclude merger expenses and other non-core items.”

Dwight added, “Horizon’s total assets continued to grow reaching approximately $5.1 billion at June 30, 2019, as a result of the Salin acquisition and organic loan growth since the beginning of the year. We have experienced organic loan growth at an annualized rate of 5.7% during the first six months of 2019. Along with approximately $568.9 million in loans acquired from Salin, loan growth in the markets of Fort Wayne, Grand Rapids, Indianapolis and Kalamazoo totaled $99.7 million as of June 30, 2019.”

Dwight continued, “During the second quarter of 2019, Horizon continued to maximize operational leverage as a result of increased mass and scale. Annualized non-interest expense to average assets, excluding merger expenses, decreased to 2.39% for the second quarter of 2019 compared to 2.41% for the first quarter of 2019 and 2.49% for the second quarter of 2018. Although the anticipated cost savings from the Salin acquisition have not been fully-realized, our team has been able to leverage new technologies and develop operational efficiencies. In our efforts to improve efficiencies, we closed three legacy full-service branches on April 19, 2019 and we consolidated our existing Fort Wayne loan production office with the acquired Salin locations. We also closed five Salin full-service branches which were in close proximity to an existing Horizon office or that did not meet our branch hurdle rates in conjunction with our data conversion on April 26, 2019. We also plan to consolidate our Midland, Michigan full-service branches into one location on September 6, 2019.”

Dwight concluded, “We continue to look for opportunities to provide value for our shareholders. On June 18, 2019, our Board of Directors approved a 20.0% dividend increase from 10 cents to 12 cents per share. This was followed by the Board of Directors authorizing a stock repurchase program of up to 2,250,000 shares of Horizon’s issued and outstanding common stock on July 16, 2019. We believe that at current price levels, Horizon’s shares are an attractive investment and our repurchase program reflects our continuing confidence in Horizon’s financial strength. Given our strong balance sheet, we believe we can implement this program and continue to retain sufficient liquidity and capital to execute business strategies.”

Income Statement Highlights

Net income for the second quarter of 2019 was $16.6 million, or $0.37 diluted earnings per share, compared to $10.8 million, or $0.28 diluted earnings per share, for the first quarter of 2019 and $14.1 million, or $0.37 diluted earnings per share, for the second quarter of 2018. Excluding acquisition-related expenses, gain (loss) on sale of investment securities and death benefit on bank owned life insurance (“core net income”), core net income for the second quarter of 2019 was $17.6 million, or $0.39 diluted earnings per share, compared to $14.2 million, or $0.37 diluted earnings per share, for the first quarter of 2019 and $14.0 million, or $0.37 diluted earnings per share for the second quarter of 2018. 

The increase in net income and diluted earnings per share from the first quarter of 2019 to the second quarter of 2019 reflects increases in net interest income of $7.2 million and non-interest income of $2.2 million, offset by increases in non-interest expense of $1.8 million, income tax expense of $1.2 million and provision for loan losses of $532,000.

The increase in net income from the second quarter of 2018 when compared to the same period of 2019 reflects increases in net interest income of $8.0 million and non-interest income of $2.0 million, offset by increases in non-interest expense of $6.6 million, income tax expense of $515,000 and provision for loan losses of $261,000.

Net income for the six months ended June 30, 2019 was $27.5 million, or $0.65 diluted earnings per share, compared to $26.9 million, or $0.70 diluted earnings per share for the six months ended June 30, 2018. Core net income for the six months ended June 30, 2019 was $31.8 million, or $0.75 diluted earnings per share, compared to $26.8 million, or $0.70 diluted earnings per share, for the six months ended June 30, 2018. This represents a 7.1% increase in core diluted earnings per share for the first six months of 2019 compared to the same period in 2018.

The increase in net income when comparing the first six months of 2019 to the prior year period reflects increases in net interest income of $8.8 million and non-interest income of $2.4 million, offset by an increase in non-interest expense of $10.5 million.

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
(Dollars in Thousands, Except per Share Data, Unaudited)
 Three Months Ended Six Months Ended
 June 30 March 31 June 30 June 30 June 30
  2019   2018   2018   2019   2018 
Non-GAAP Reconciliation of Net Income         
Net income as reported$16,642  $10,816  $14,115  $27,458  $26,919 
Merger expenses 1,532   4,118   -   5,650   - 
Tax effect (295)  (692)  -   (987)  - 
Net income excluding merger expenses 17,879   14,242   14,115   32,121   26,919 
          
Loss (gain) on sale of investment securities 100   (15)  -   85   (11)
Tax effect (21)  3   -   (18)  2 
Net income excluding gain on sale of investment securities 17,958   14,230   14,115   32,188   26,910 
          
Death benefit on bank owned life insurance ("BOLI") (367)  -   (154)  (367)  (154)
Net income excluding death benefit on BOLI 17,591   14,230   13,961   31,821   26,756 
          
Core Net Income$17,591  $14,230  $13,961  $31,821  $26,756 
          
Non-GAAP Reconciliation of Diluted Earnings per Share         
Diluted earnings per share ("EPS") as reported$0.37  $0.28  $0.37  $0.65  $0.70 
Merger expenses 0.03   0.11   -   0.13   - 
Tax effect -   (0.02)  -   (0.02)  - 
Diluted EPS excluding merger expenses 0.40   0.37   0.37   0.76   0.70 
          
Loss (gain) on sale of investment securities -   -   -   -   - 
Tax effect -   -   -   -   - 
Diluted EPS excluding gain on sale of investment securities 0.40   0.37   0.37   0.76   0.70 
          
Death benefit on BOLI (0.01)  -   -   (0.01)  - 
Diluted EPS excluding death benefit on BOLI 0.39   0.37   0.37   0.75   0.70 
          
Core Diluted EPS$0.39  $0.37  $0.37  $0.75  $0.70 
          

Horizon’s net interest margin increased to 3.73% for the second quarter of 2019 when compared to 3.62% for the first quarter of 2019. The increase in net interest margin from the first quarter of 2019 reflects an increase in the yield on interest-earning assets of five basis points as loans continue to reprice upwards. The cost of interest-bearing liabilities decreased by six basis points primarily from reducing short-term borrowings during the second quarter with the liquidity obtained through the Salin acquisition. In addition, we are seeing a stabilization in deposit pricing within the markets we serve.

Net interest margin decreased to 3.73% for the second quarter of 2019 when compared to 3.78% for the second quarter of 2018. The decrease in net interest margin was due to an increase in the cost of interest-bearing liabilities of 40 basis points, offset by an increase in the yield on interest-earning assets of 24 basis points. The cost of interest-bearing deposits, borrowings and subordinated debentures increased by 50, 32 and 15 basis points, respectively. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 21 basis points, taxable investment securities of 22 basis points and non-taxable investment securities of 29 basis points.

Net interest margin decreased to 3.68% during the first six months of 2019 when compared to 3.81% for the first six months of 2018. This decrease reflects an increase in the cost of interest-bearing liabilities of 49 basis points, offset by an increase in the yield of interest-earning assets of 24 basis points. The increase in the cost of interest-bearing liabilities was due to an increase in the cost of interest-bearing deposits of 55 basis points and borrowings of 45 basis points. The increase in the yield of interest-earning assets was due to increases in the yields on loans receivable of 23 basis points, taxable investment securities of 25 basis points and non-taxable investment securities of 30 basis points.

Net interest margin, excluding acquisition-related purchase accounting adjustments (“core net interest margin”), was 3.61% for the second quarter of 2019 compared to 3.46% for the prior quarter and 3.60% for the second quarter of 2018. Interest income from acquisition-related purchase accounting adjustments was $1.3 million, $1.5 million and $1.6 million for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively. The increase in the core net interest margin during the second quarter of 2019 was due to the pay-down of short-term borrowings with the liquidity obtained through the acquisition of Salin and an increase in the yield on earning assets from higher mortgage warehouse lending balances, loans continuing to reprice higher and the addition of acquired Salin loans.

Non-GAAP Reconciliation of Net Interest Margin
(Dollars in Thousands, Unaudited)
 Three Months Ended Six Months Ended
 June 30 March 31 June 30 June 30 June 30
  2019   2018   2018   2019   2018 
Non-GAAP Reconciliation of Net Interest Margin         
Net interest income as reported$41,529  $34,280  $33,550  $75,809  $66,961 
          
Average interest-earning assets 4,566,674   3,929,296   3,638,801   4,249,644   3,600,676 
          
Net interest income as a percentage of average interest-earning assets
  ("Net Interest Margin")
 3.73%   3.62%   3.78%   3.68%   3.81% 
          
Acquisition-related purchase accounting adjustments ("PAUs")$(1,299) $(1,510) $(1,634) $(2,809) $(3,671)
          
Core net interest income$40,230  $32,770  $31,916  $73,000  $63,290 
          
Core net interest margin 3.61%   3.46%   3.60%   3.55%   3.61% 
          

Lending Activity

Total loans increased $653.5 million from $3.014 billion as of December 31, 2018 to $3.668 billion as of June 30, 2019. Excluding acquired loans, total loans increased $84.6 million during the first six months of 2019 as residential mortgage loans increased by $14.9 million, consumer loans increased by $20.0 million and mortgage warehouse loans increased by $59.3 million, offset by a decrease in commercial loans of $11.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
            
 June 30 December 31 Amount Acquired Amount Percent
  2019  2018 Change Loans Change Change
Commercial$2,062,623 $1,721,590 $341,033 $(352,798) $(11,765) -0.7% 
Residential mortgage 814,065  668,141  145,924  (131,008)  14,916  2.2% 
Consumer 654,552  549,481  105,071  (85,112)  19,959  3.6% 
Subtotal 3,531,240  2,939,212  592,028  (568,918)  23,110  0.8% 
Held for sale loans 3,185  1,038  2,147  -   2,147  206.8% 
Mortgage warehouse loans 133,428  74,120  59,308  -   59,308  80.0% 
Total loans$3,667,853 $3,014,370 $653,483 $(568,918) $84,565  2.8% 
            

Total loans increased $44.8 million from $3.623 billion as of March 31, 2019 to $3.668 billion as of June 30, 2019. During the second quarter of 2019, consumer loans increased by $14.8 million and mortgage warehouse loans increased $61.5 million, offset by a decrease in commercial loans of $27.0 million and a decrease in residential mortgage loans of $5.8 million.

Loan Growth by Type, Excluding Acquired Loans
(Dollars in Thousands, Unaudited)
            
 June 30 March 31 Amount Acquired Amount Percent
  2019  2018 Change Loans Change Change
Commercial$2,062,623 $2,089,579 $(26,956) $- $(26,956) -1.3% 
Residential mortgage 814,065  819,824  (5,759)  -  (5,759) -0.7% 
Consumer 654,552  639,710  14,842   -  14,842  2.3% 
Subtotal 3,531,240  3,549,113  (17,873)  -  (17,873) -0.5% 
Held for sale loans 3,185  1,979  1,206   -  1,206  60.9% 
Mortgage warehouse loans 133,428  71,944  61,484   -  61,484  85.5% 
Total loans$3,667,853 $3,623,036 $44,817  $- $44,817  1.2% 
            

During the first six months of 2019, the Bank originated approximately $206.0 million of commercial loans; however, only 54.4%, or $112.1 million, of these loan originations had been funded as of June 30, 2019. These originations were offset by commercial loan payoffs totaling approximately $157.8 million during the first six months of 2019, as there was an increase in clients moving projects that had reached stabilization into the long-term, fixed rate conduit financing market.

Residential mortgage lending activity for the three months ended June 30, 2019 generated $2.1 million in income from the gain on sale of mortgage loans, an increase of $769,000 from the first quarter of 2019 and $182,000 from the second quarter of 2018. Total origination volume for the second quarter of 2019, including loans placed into portfolio, totaled $111.4 million, representing an increase of 78.1% from the first quarter of 2019 and an increase of 2.1% from the second quarter of 2018. Total origination volume for the second quarter of 2019 of loans sold to the secondary market totaled $60.6 million, representing an increase of 99.3% from the first quarter of 2019 and an increase of 18.8% from the second quarter of 2018.

Revenue derived from Horizon’s residential mortgage and warehouse lending activities was 5.6% of Horizon’s total revenue for the second quarter of 2019. 

The provision for loan losses totaled $896,000 for the second quarter of 2019 compared to $364,000 for the first quarter of 2019 and $635,000 for the second quarter of 2018. The increase in the provision for loan losses from the first quarter of 2019 and the second quarter of 2018 when compared to the second quarter of 2019 was primarily due to a specific reserve placed on a single credit.

The provision for loan losses totaled $1.3 million for the first six months of 2019 compared to $1.2 million for the first six months of 2018. The increase in provision for loan losses from 2018 was primarily due to organic loan growth experienced from June 30, 2018 until June 30, 2019.

The ratio of the allowance for loan losses to total loans decreased to 0.50% as of June 30, 2019 from 0.59% at December 31, 2018. The decrease in the ratio of the allowance for loan losses to total loans is primarily due to increased loan balances from the Salin acquisition. The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 0.68% as of June 30, 2019 compared to 0.72% as of December 31, 2018. Loan loss reserves plus credit-related loan discounts on acquired loans as a percentage of total loans was 1.14% as of June 30, 2019 compared to 0.98% as of December 31, 2018.

Non-GAAP Allowance for Loan and Lease Loss Detail
As of June 30, 2019
(Dollars in Thousands, Unaudited)
                
 Pre-discount
Loan
Balance
 Allowance
for Loan
Losses
(ALLL)
 Loan
Discount
 ALLL
+
Loan
Discount
 Loans, net ALLL/
Pre-discount
Loan Balance
 Loan
Discount/
Pre-discount
Loan Balance
 ALLL + Loan
Discount/
Pre-discount
Loan Balance
Horizon Legacy$2,677,923 $18,091 N/A $18,091 $2,659,832 0.68% 0.00% 0.68%
Heartland 6,044  -  621  621  5,423 0.00% 10.27% 10.27%
Summit 17,194  -  1,003  1,003  16,191 0.00% 5.83% 5.83%
Peoples 75,918  -  1,732  1,732  74,186 0.00% 2.28% 2.28%
Kosciusko 34,056  195  567  762  33,294 0.57% 1.66% 2.24%
LaPorte 73,228  -  2,651  2,651  70,577 0.00% 3.62% 3.62%
CNB 3,701  -  94  94  3,607 0.00% 2.54% 2.54%
Lafayette 71,707  19  652  671  71,036 0.03% 0.91% 0.94%
Wolverine 161,066  -  2,120  2,120  158,946 0.00% 1.32% 1.32%
Salin 547,016  -  14,230  14,230  532,786 0.00% 2.60% 2.60%
Total$3,667,853 $18,305 $23,670 $41,975 $3,625,878 0.50% 0.65% 1.14%
                

As of June 30, 2019, non-performing loans totaled $18.9 million, which reflects a two basis point increase in non-performing loans to total loans, or a $3.8 million increase from $15.2 million in non-performing loans as of December 31, 2018. Compared to December 31, 2018, non-performing commercial loans increased by $1.8 million, non-performing real estate loans increased by $1.4 million and non-performing consumer loans increased by $523,000. Other real estate owned and repossessed assets totaled $3.9 million as of June 30, 2019 which is an increase of $1.8 million from December 31, 2018. The majority of this increase was due to other real estate owned properties acquired in the Salin transaction, including the closed branches, totaling $1.7 million. 

Expense Management

Total non-interest expense was $1.8 million higher in the second quarter of 2019 when compared to the first quarter of 2019. Salaries and employee benefits, net occupancy expenses, other expense and FDIC insurance expense increased by $2.5 million, $376,000, $213,000 and $205,000, respectively. Offsetting these increases was a decrease in outside services and consultants expense of $1.9 million. Excluding merger expenses, total non-interest expense increased by $4.4 million during the second quarter of 2019 when compared to the first quarter of 2019.

 Three Months Ended    
 June 30 March 31    
  2019   2019  Adjusted
Non-interest ExpenseActual Merger
Expenses
 Adjusted Actual Merger
Expenses
 Adjusted Amount
Change
 Percent
Change
Salaries and employee benefits$16,951  $(482) $  16,469   $14,466  $(2) $14,464  $2,005  13.9% 
Net occupancy expenses 3,148   (75)    3,073    2,772   -   2,772   301  10.9% 
Data processing 2,139   (68)    2,071    1,966   (292)  1,674   397  23.7% 
Professional fees 598   (153)    445    493   (239)  254   191  75.2% 
Outside services and consultants 1,655   (176)    1,479    3,530   (2,290)  1,240   239  19.3% 
Loan expense 2,048   (2)    2,046    1,949   -   1,949   97  5.0% 
FDIC deposit insurance 365   -     365    160   -   160   205  128.1% 
Other losses 169   (69)    100    104   (2)  102   (2) -2.0% 
Other expenses 4,511   (507)    4,004    4,298   (1,293)  3,005   999  33.2% 
Total non-interest expense$31,584  $(1,532) $  30,052   $29,738  $(4,118) $25,620  $4,432  17.3% 
Annualized Non-interest Exp. to Avg. Assets 2.51%     2.39%   2.80%     2.41%     

Total non-interest expense was $6.6 million higher during the second quarter of 2019 compared to the same period of 2018. Salaries and employee benefits, other expense, net occupancy expense, data processing and loan expense increased $3.1 million, $1.3 million, $628,000, $532,000 and $523,000, respectively. Excluding merger expenses, total non-interest expense increased $5.1 million during the second quarter of 2019 when compared to the second quarter of 2018.

 Three Months Ended    
 June 30 June 30    
  2019   2018  Adjusted
Non-interest ExpenseActual Merger
Expenses
 Adjusted Actual Merger
Expenses
 Adjusted Amount
Change
 Percent
Change
Salaries and employee benefits$16,951  $(482) $  16,469   $13,809  $- $13,809  $2,660  19.3% 
Net occupancy expenses 3,148   (75)    3,073    2,520   -  2,520   553  21.9% 
Data processing 2,139   (68)    2,071    1,607   -  1,607   464  28.9% 
Professional fees 598   (153)    445    376   -  376   69  18.4% 
Outside services and consultants 1,655   (176)    1,479    1,267   -  1,267   212  16.7% 
Loan expense 2,048   (2)    2,046    1,525   -  1,525   521  34.2% 
FDIC deposit insurance 365   -     365    345   -  345   20  5.8% 
Other losses 169   (69)    100    269   -  269   (169) -62.8% 
Other expenses 4,511   (507)    4,004    3,224   -  3,224   780  24.2% 
Total non-interest expense$31,584  $(1,532) $  30,052   $24,942  $- $24,942  $5,110  20.5% 
Annualized Non-interest Exp. to Avg. Assets 2.51%     2.39%   2.49%     2.49%     

Total non-interest expense was $10.5 million higher during the first six months of 2019 when compared to the first six months of 2018. Salaries and employee benefits, outside services and consultants expense, other expense, loan expense and data processing increased $3.2 million, $2.7 million, $2.3 million, $1.2 million and $802,000, respectively. Excluding merger expenses, total non-interest expense increased $4.9 million during the first six months of 2019 when compared to the same period of 2018.

 Six Months Ended    
 June 30 June 30    
  2019   2018  Adjusted
Non-interest ExpenseActual Merger
Expenses
 Adjusted Actual Merger
Expenses
 Adjusted Amount
Change
 Percent
Change
Salaries and employee benefits$31,417  $(484) $  30,933   $28,182  $- $28,182  $2,751  9.8% 
Net occupancy expenses 5,920   (75)    5,845    5,486   -  5,486   359  6.5% 
Data processing 4,105   (360)    3,745    3,303   -  3,303   442  13.4% 
Professional fees 1,091   (392)    699    877   -  877   (178) -20.3% 
Outside services and consultants 5,185   (2,466)    2,719    2,531   -  2,531   188  7.4% 
Loan expense 3,997   (2)    3,995    2,782   -  2,782   1,213  43.6% 
FDIC deposit insurance 525   -     525    655   -  655   (130) -19.8% 
Other losses 273   (71)    202    415   -  415   (213) -51.3% 
Other expenses 8,809   (1,800)    7,009    6,548   -  6,548   461  7.0% 
Total non-interest expense$61,322  $(5,650) $  55,672   $50,779  $- $50,779  $4,893  9.6% 
Annualized Non-interest Exp. to Avg. Assets 2.64%     2.40%   2.57%