FRANKLIN, N.C., Oct. 18, 2018 (GLOBE NEWSWIRE) -- Entegra Financial Corp. (the “Company”) (NASDAQ: ENFC), the holding company for Entegra Bank (the “Bank”), today announced earnings and related data for the three and nine months ended September 30, 2018.

Highlights 

The following tables highlight the trends that the Company believes are most relevant to understanding the performance of the Company.  As further detailed in Appendix A to this press release, adjusted results (which are non-U.S. generally accepted accounting principles, or non-GAAP, financial measures) reflect adjustments for investment gains and losses, investment impairment, and merger-related expenses.

 For the Three Months Ended September 30,
 (Dollars in thousands, except per share data)
 2018 2017 Change (%)
 GAAP Adjusted GAAP Adjusted GAAP Adjusted
Net income$  3,523  $  3,599  $  2,471  $  2,563  42.6% 40.4%
Net interest income$  12,292   N/A  $  10,323   N/A  19.1% N/A
Net interest margin (tax equivalent) 3.26%  N/A   3.30%  N/A  -1.2% N/A
Return on average assets 0.86%  0.88%  0.71%  0.73% 21.1% 20.5%
Return on average equity 9.00%  11.18%  6.95%  7.72% 29.5% 44.8%
Efficiency ratio 66.92%  66.25%  65.96%  64.87% 1.5% 2.1%
Diluted earnings per share$  0.50  $  0.51  $  0.38  $  0.39  31.6% 30.8%
                      


 For the Nine Months Ended September 30,
 (Dollars in thousands, except per share data)
 2018 2017 Change (%)
 GAAP Adjusted GAAP Adjusted GAAP Adjusted
Net income$  10,192  $  11,049  $  5,873  $  6,948  73.5% 59.0%
Net interest income$  36,995   N/A  $  30,163   N/A  22.7% N/A
Tax-equivalent net interest margin 3.38%  N/A   3.32%  N/A  1.8% N/A
Return on average assets 0.84%  0.91%  0.57%  0.67% 47.4% 35.8%
Return on average equity 8.84%  11.71%  5.66%  7.12% 56.2% 64.5%
Efficiency ratio 67.44%  65.27%  72.45%  68.28% -6.9% -4.4%
Diluted earnings per share$  1.45  $  1.57  $  0.90  $  1.06  61.1% 48.1%
                      


  As of September 30, As of December 31,
  2018 2017
  (Dollars in thousands, except per share data)
Asset Quality:    
Non-performing loans $  4,297  $  4,778 
Real estate owned $  2,818  $  2,568 
Non-performing assets  $  7,115  $  7,346 
Non-performing loans to total loans  0.40%  0.48%
Non-performing assets to total assets  0.43%  0.46%
Net charge-offs $  194  $  315 
         
Allowance for loan losses to non-performing loans  273.35%  227.86%
Allowance for loan losses to total loans  1.10%  1.08%
     
Other Data:    
Book value per share $  22.74  $  22.00 
Tangible book value per share $  18.73  $  17.90 
Closing market price per share $  26.55  $  29.25 
Closing price-to-tangible book value ratio  141.75%  163.41%
Equity to assets ratio  9.39%  9.57%
Tangible common equity to tangible assets ratio  7.86%  7.93%
         

Management Commentary

Roger D. Plemens, President and Chief Executive Officer of the Company, reported, “We are  pleased with the increase in core deposits during the third quarter of 2018 as the result of a Company-wide deposit campaign which increased core deposits by $28.4 million, or an annualized rate of 15.1%.  Growing our balance sheet with core funding remains a key focus in our desire to continue growing shareholder value.  Looking forward, we remain focused on opportunities to grow our franchise, with an emphasis on growing our commercial banking business.”

Net Interest Income

Net interest income increased $2.0 million, or 19.1%, to $12.3 million for the three months ended September 30, 2018, compared to $10.3 million for the same period in 2017.  Net interest income increased $6.8 million, or 22.7%, to $37.0 million for the nine months ended September 30, 2018, compared to $30.2 million for the same period in 2017.  The increase in net interest income was primarily due to higher volumes in the loan portfolio, as well as an increase in the yields earned on cash, taxable investments and loans partially offset by increased deposit balances and the costs of deposits and borrowings.  Net interest margin was 3.26% for the three months ended September 30, 2018, compared to 3.30% for the same period in 2017, and 3.38% and 3.32% for the nine months ended September 30, 2018 and 2017, respectively.

Provision for Loan Losses

The provision for loan losses was $0.3 million and $1.1 million for the three and nine months ended September 30, 2018, respectively, compared to $0.5 million and $1.2 million for the comparable periods of 2017.  The provisions for loan losses are mainly attributable to organic loan growth.  The Company continues to experience modest levels of net charge-offs and non-performing loans.

Noninterest Income

Noninterest income increased $0.2 million, or 10.7%, to $2.0 million for the three months ended September 30, 2018, compared to $1.8 million for the same period in 2017. Increases in servicing income, mortgage banking, equity securities gains, and net interchange fees were partially offset by decreases in gains on sale of Small Business Administration (“SBA”) loans and service charges on deposit accounts.  The Company recorded a valuation adjustment against its loan servicing rights of $44 thousand and $0.2 million for the three months ended September 30, 2018 and 2017, respectively.  

Noninterest income increased $0.4 million, or 8.6%, to $4.7 million for the nine months ended September 30, 2018, compared to $4.3 million for the same period in 2017, primarily as the result of the other than temporary impairment on one investment security of $0.7 million in 2017,  compared to realized losses on sale of investments of $0.5 million in 2018.  Increases in gains on sale of SBA loans, net interchange fees and income from Small Business Investment Company (“SBIC”) holdings were partially offset by decreases in mortgage banking and equity securities gains. The Company recorded a valuation adjustment against its loan servicing rights of $0.4 million and $0.3 million for the nine months ended September 30, 2018 and 2017, respectively.  

Noninterest Expense

Noninterest expense increased $1.5 million, or 19.6%, to $9.5 million for the three months ended September 30, 2018, compared to $8.0 million for the same period in 2017. Noninterest expense increased $3.1 million, or 12.5%, to $28.1 million for the nine months ended September 30, 2018, compared to $25.0 million for the same period in 2017. The increases were primarily related to increased compensation and employee benefits, net occupancy expenses, and data processing expenses, as the 2018 period included the full impact of the Chattahoochee Bank of Georgia acquisition and the branches acquired from Stearns Bank. 

Income Taxes

Effective tax rates for the three and nine months ended September 30, 2018 were 19.6% and 18.6%, respectively, compared to 31.3% and 29.6% for the corresponding periods in 2017.  Income tax expense for the 2018 periods benefitted from the newly enacted federal tax rate of 21%, compared to a federal tax rate of 35% in 2017.  In addition, income tax expense for all periods benefited from tax-exempt income related to municipal bond investments and bank-owned life insurance (“BOLI”).  The effective tax rate for the third quarter of 2018 was slightly higher than previous quarters as a result of a change in state income tax apportionment.

Balance Sheet

Total assets increased $88.1 million, or an annualized rate of 7.4%, to $1.67 billion at September 30, 2018 from $1.58 billion at December 31, 2017.

Loans receivable increased $62.9 million, or an annualized rate of 8.3%, to $1.07 billion at September 30, 2018 from $1.00 billion at December 31, 2017.  Loan growth continues to be primarily concentrated in commercial real estate and commercial and industrial loans. 

Core deposits increased $18.5 million to $781.9 million at September 30, 2018 from $763.4 million at December 31, 2017.  In the third quarter of 2018, core deposits increased $28.4 million, or an annualized rate of 15.1%, as a result of the promotion of a more aggressive money market rate.  Retail certificates of deposit decreased $4.9 million to $352.7 million at September 30, 2018 from $357.6 million at December 31, 2017.  Wholesale deposits have been a source of funding loan growth and increased $80.3 million to $121.5 million at September 30, 2018 from $41.1 million at December 31, 2017.  We continue to focus on gathering core deposits, which decreased from 66% of the Company’s deposit portfolio at December 31, 2017 to 62% at September, 30 2018.  

Total shareholders’ equity increased $5.4 million to $156.7 million at September 30, 2018, compared to $151.3 million at December 31, 2017. This increase was primarily attributable to $10.2 million of net income, offset by a $5.6 million after-tax decline in the market value of investment securities available for sale.  Tangible book value per share, a non-GAAP measure, increased $0.83 to $18.73 at September 30, 2018 from $17.90 at December 31, 2017.  See Appendix A for a reconciliation of our tangible book value per share to the comparable GAAP measure.

Asset Quality

Non-performing loans to total loans and non-performing assets to total assets decreased to 0.40% and 0.43%, respectively, at September 30, 2018, compared to 0.48% and 0.46%, respectively, at December 31, 2017.  Net loan charge-offs continue to remain modest, totaling $0.2 million for the nine months ended September 30, 2018.

Non-GAAP Financial Measures

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables in Appendix A, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. This press release and the accompanying tables discuss financial measures, such as adjusted noninterest expense, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on tangible average equity, adjusted efficiency ratio, tangible common equity, tangible assets and tangible book value per share, which are all non-GAAP measures. We believe that such non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare the Company’s operating results from period to period in a meaningful manner. Non-GAAP measures should not be considered as an alternative to any measure of performance as promulgated under GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP.

About Entegra Financial Corp. and Entegra Bank

Entegra Financial Corp. is the holding company of Entegra Bank. The Company’s shares of common stock trade on the NASDAQ Global Market under the symbol “ENFC.”

Entegra Bank operates a total of 18 branches located throughout the Western North Carolina counties of Cherokee, Haywood, Henderson, Jackson, Macon, Polk and Transylvania, the Upstate South Carolina counties of Anderson, Greenville, and Spartanburg and the Northern Georgia counties of Pickens and Hall. The Bank also operates loan production offices in Asheville, NC, and Clemson, SC. For further information, visit the Bank’s website www.entegrabank.com.

Disclosures About Forward-Looking Statements

The discussions included in this press release and its appendices may contain “forward-looking statements.” For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be “forward-looking statements.” Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” “will,” “should,” or other statements concerning opinions or judgments of the Company and its management about future events.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated and may adversely affect our results of operations and financial condition. The accuracy of such forward-looking statements could be affected by factors including, but not limited to: the Company’s ability to implement aspects of its growth strategy; the financial success or changing conditions or strategies of the Company’s customers or vendors; the Company’s ability to compete effectively against other financial institutions in its banking markets; fluctuations in interest rates; actions of government regulators; the availability of capital and personnel; and general economic and market conditions. These forward-looking statements express management’s current expectations, plans or forecasts of future events, results of operation and financial condition. Additional factors that could cause actual results to differ materially from those anticipated by forward-looking statements are discussed in the Company’s reports filed with or furnished to the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website, including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. These forward-looking statements speak only as of the date of this press release, and the Company undertakes no obligation to revise or update these statements following the date of this press release, except as required by applicable law.

ENTEGRA FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Amounts in thousands, except per share data)

 Three Months Ended September 30,
 2018 2017 
Interest income$15,978 $12,254 
Interest expense3,686 1,931 
    
Net interest income12,292 10,323 
    
Provision for loan losses336 520 
    
Net interest income after provision for loan losses11,956 9,803 
    
Servicing income, net180 59 
Mortgage banking233 207 
Gain on sale of SBA loans257 290 
Gain (loss) on sale of investments- (24)
Equity securities gains191 138 
Service charges on deposit accounts406 436 
Interchange fees276 246 
Bank owned life insurance195 208 
Other227 215 
Total noninterest income1,965 1,775 
    
Compensation and employee benefits5,882 4,937 
Net occupancy1,128 974 
Federal deposit insurance191 140 
Professional and advisory413 292 
Data processing532 390 
Marketing and advertising227 253 
Net cost of operation of real estate owned59 (121)
Merger-related expenses96 116 
Other1,013 999 
Total noninterest expense9,541 7,980 
    
Income before taxes4,380 3,598 
    
Income tax expense857 1,127 
    
Net income$3,523 $2,471 
    
Earnings per common share:   
Basic$0.51 $0.38 
Diluted$0.50 $0.38 
    
Weighted average common shares outstanding:   
Basic6,891,672 6,458,679 
Diluted7,031,150 6,548,530 
     

ENTEGRA FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Amounts in thousands, except per share data)

 Nine Months Ended September 30,
 2018 2017
Interest income$46,149  $35,621 
Interest expense 9,154   5,458 
    
Net interest income 36,995   30,163 
    
Provision for loan losses 1,054   1,160 
    
Net interest income after provision for loan losses 35,941   29,003 
    
Servicing income, net 313   312 
Mortgage banking 755   771 
Gain on sale of SBA loans 547   436 
Gain (loss) on sale of investments (520)  19 
Equity securities gains 183   445 
Other than temporary impairment on available-for-sale securities -   (700)
Service charges on deposit accounts 1,242   1,239 
Interchange fees, net 795   655 
Bank owned life insurance 589   603 
Other 775   527 
Total noninterest income 4,679   4,307 
    
Compensation and employee benefits 17,151   14,859 
Net occupancy 3,342   2,851 
Federal deposit insurance 618   379 
Professional and advisory 1,023   929 
Data processing 1,607   1,215 
Marketing and advertising 671   727 
Net cost of operation of real estate owned 202   94 
Merger-related expenses 564   972 
Other 2,925   2,947 
Total noninterest expense 28,103   24,973 
    
Income before taxes 12,517   8,337 
    
Income tax expense 2,325   2,464 
    
Net income$10,192  $5,873 
    
Earnings per common share:   
Basic$1.48  $0.91 
Diluted$1.45  $0.90 
    
Weighted average common shares outstanding:   
Basic 6,889,130   6,460,015 
Diluted 7,023,714   6,542,261 
        

ENTEGRA FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

  September 30, 2018   December 31, 2017
  (Unaudited)   (Unaudited)
Assets   
    
Cash and cash equivalents$117,265  $109,467 
Investments - equity securities 6,983   6,095 
Investments - available for sale 353,759   342,863 
Other investments, at cost 12,039   12,386 
Loans held for sale (includes $1,821 and $0 at fair value) 3,970   3,845 
Loans receivable 1,068,012   1,005,139 
Allowance for loan losses (11,746)  (10,887)
Real estate owned 2,818   2,568 
Fixed assets, net 26,605   24,113 
Bank owned life insurance 32,738   32,150 
Net deferred tax asset 8,672   8,831 
Goodwill 23,903   23,903 
Core deposit intangibles, net 3,750   4,269 
Other assets 20,798   16,707 
    
Total assets$1,669,566  $1,581,449 
    
Liabilities and Shareholders' Equity   
    
Liabilities   
Core deposits$781,899  $763,422 
Retail certificates of deposit 352,658   357,629 
Wholesale deposits 121,475   41,126 
Federal Home Loan Bank advances 213,500   223,500 
Junior subordinated notes 14,433   14,433 
Holding company line of credit 5,000   5,000 
Post employment benefits 9,887   10,174 
Other liabilities 13,984   14,852 
Total liabilities$1,512,836  $1,430,136 
    
Total shareholders' equity 156,730   151,313 
    
Total liabilities and shareholders' equity$1,669,566  $1,581,449 
        


APPENDIX A – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

  Three Months Ended September 30,
  2018 2017
(Dollars in thousands, except per share data)    
     
Adjusted Noninterest Expense    
Noninterest expense (GAAP) $9,541  $7,980 
Merger-related expenses  (96)  (116)
Adjusted noninterest expense (Non-GAAP) $9,445  $7,864 
     
Adjusted Net Income    
Net income (GAAP) $3,523  $2,471 
Loss (gain) on sale of investments  -   16 
Other than temporary impairment of investment securities available for sale  -   - 
Merger-related expenses  76   76 
Adjusted net income (Non-GAAP) $3,599  $2,563 
     
Adjusted Diluted Earnings Per Share    
Diluted earnings per share (GAAP) $0.50  $0.38 
Loss (gain) on sale of investments  -   - 
Other than temporary impairment of investment securities available for sale  -   - 
Merger-related expenses  0.01   0.01 
Adjusted diluted earnings per share (Non-GAAP) $0.51  $0.39 
     
Adjusted Return on Average Assets    
Return on Average Assets (GAAP)  0.86%  0.71%
Gain on sale of investments  0.00%  0.00%
Other than temporary impairment of investment securities available for sale  0.00%  0.00%
Merger-related expenses  0.02%  0.02%
Adjusted Return on Average Assets (Non-GAAP)  0.88%  0.73%
     
Adjusted Return on Tangible Average Equity    
Return on Average Equity (GAAP)  9.00%  6.95%
Loss (gain) on sale of investments  0.00%  0.04%
Other than temporary impairment of investment securities available for sale  0.00%  0.00%
Merger-related expenses  0.19%  0.21%
Effect of goodwill and intangibles  1.98%  0.52%
Adjusted Return on Average Tangible Equity (Non-GAAP)  11.18%  7.72%
     
Adjusted Efficiency Ratio    
Efficiency ratio (GAAP)  66.92%  65.96%
Gain (loss) on sale of investments  0.00%  -0.19%
Other than temporary impairment of investment securities available for sale  0.00%  0.00%
Merger-related expenses  -0.67%  -0.90%
Adjusted Efficiency Ratio (Non-GAAP)  66.25%  64.87%
     
     
  As Of
  September 30, 2018 December 31, 2017
  (Dollars in thousands, except share data)
Tangible Assets    
Total Assets $1,669,566  $1,581,449 
Goodwill and Intangibles  (27,653)  (28,172)
Tangible Assets $1,641,913  $1,553,277 
     
Tangible Book Value Per Share    
Book Value (GAAP) $156,730  $151,313 
Goodwill and intangibles  (27,653)  (28,172)
Book Value (Tangible) $129,077  $123,141 
Outstanding shares  6,891,672   6,879,191 
Tangible Book Value Per Share $18.73  $17.90 


  Nine Months Ended September 30,
  2018 2017
(Dollars in thousands, except per share data)    
     
Adjusted Noninterest Expense    
Noninterest expense (GAAP) $28,103  $24,973 
Merger-related expenses  (564)  (972)
Adjusted noninterest expense (Non-GAAP) $27,539  $24,001 
     
Adjusted Net Income    
Net income (GAAP) $10,192  $5,873 
Loss (gain) on sale of investments  411   (12)
Other than temporary impairment of investment securities available for sale  -   455 
Merger-related expenses  446   632 
Adjusted net income (Non-GAAP) $11,049  $6,948 
     
Adjusted Diluted Earnings Per Share    
Diluted earnings per share (GAAP) $1.45  $0.90 
Loss (gain) on sale of investments  0.06   - 
Other than temporary impairment of investment securities available for sale  -   0.06 
Merger-related expenses  0.06   0.10 
Adjusted diluted earnings per share (Non-GAAP) $1.57  $1.06 
     
Adjusted Return on Average Assets    
Return on Average Assets (GAAP)  0.84%  0.57%
Gain on sale of investments  0.03%  - 
Other than temporary impairment of investment securities available for sale  0.00%  0.04%
Merger-related expenses  0.04%  0.06%
Adjusted Return on Average Assets (Non-GAAP)  0.91%  0.67%
     
Adjusted Return on Tangible Average Equity    
Return on Average Equity (GAAP)  8.84%  5.66%
Loss (gain) on sale of investments  0.36%  -0.01%
Other than temporary impairment of investment securities available for sale  0.00%  0.43%
Merger-related expenses  0.39%  0.61%
Effect of goodwill and intangibles  2.13%  0.43%
Adjusted Return on Average Tangible Equity (Non-GAAP)  11.71%  7.12%
     
Adjusted Efficiency Ratio    
Efficiency ratio (GAAP)  67.44%  72.45%
Gain (loss) on sale of investments  -1.23%  0.05%
Other than temporary impairment of investment securities available for sale  0.00%  -1.38%
Merger-related expenses  -0.94%  -2.84%
Adjusted Efficiency Ratio (Non-GAAP)  65.27%  68.28%
         

APPENDIX B – TAX EQUIVALENT NET INTEREST MARGIN ANALYSIS (UNAUDITED)

  For the Three Months Ended September 30,
  2018 2017
  Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate
  (Dollars in thousands)
Interest-earning assets:            
Loans, including loans held for sale $1,050,667  $12,622 4.77% $788,021  $9,175 4.62%
Loans, tax exempt (1)  16,757   134 3.18%  16,607   151 3.60%
Investments - taxable  248,077   1,827 2.95%  295,516   1,787 2.42%
Investment tax exempt (1)  94,019   880 3.74%  124,016   1,257 4.05%
Interest earning deposits  99,572   528 2.10%  63,262   216 1.35%
Other investments, at cost  12,039   201 6.62%  11,822   161 5.40%
             
Total interest-earning assets  1,521,131   16,192 4.22%  1,299,244   12,747 3.89%
             
Noninterest-earning assets  123,662       100,731     
             
Total assets $1,644,793      $1,399,975     
             
Interest-bearing liabilities:            
Savings accounts $53,287  $15 0.11% $49,146  $14 0.11%
Time deposits  423,419   1,404 1.32%  358,327   796 0.88%
Money market accounts  355,057   814 0.91%  260,804   248 0.38%
Interest bearing transaction accounts  205,732   98 0.19%  174,945   56 0.13%
Total interest bearing deposits  1,037,495   2,331 0.89%  843,222   1,114 0.52%
             
FHLB advances  213,500   1,091 2.00%  223,826   641 1.14%
Junior subordinated debentures  14,433   141 3.82%  14,433   140 3.85%
Other borrowings  9,399   123 5.19%  3,652   36 3.91%
             
Total interest-bearing liabilities  1,274,827   3,686 1.15%  1,085,133   1,931 0.71%
             
Noninterest-bearing deposits  198,001       157,870     
             
Other non interest bearing liabilities  15,431       14,667     
             
Total liabilities  1,488,259       1,257,670     
Total equity  156,534       142,305     
             
Total liabilities and equity $1,644,793      $1,399,975     
             
             
Tax-equivalent net interest income   $12,506     $10,816  
             
             
Net interest-earning assets (2) $246,304      $214,111     
             
Average interest-earning assets to interest-bearing liabilities  119.32%      119.73%    
             
Tax-equivalent net interest rate spread (3)     3.08%     3.19%
Tax-equivalent net interest margin (4)     3.26%     3.30%
             
(1) Tax exempt loans and investments are calculated giving effect to a 21% federal tax rate in 2018 and a 35% federal tax rate in 2017.
(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3) Tax-equivalent net interest rate spread represents the difference between the tax equivalent yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Tax-equivalent net interest margin represents tax equivalent net interest income divided by average total interest-earning assets.
 


  For the Nine Months Ended September 30,
  2018 2017
  Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate
  (Dollars in thousands)
Interest-earning assets:            
Loans, including loans held for sale $1,030,421  $36,981 4.80% $765,810  $26,686 4.66%
Loans, tax exempt (1)  15,947   367 3.08%  15,906   438 3.69%
Investments - taxable  253,129   5,173 2.72%  301,823   5,367 2.37%
Investment tax exempt (1)  84,890   2,344 3.68%  118,008   3,609 4.08%
Interest earning deposits  91,400   1,309 1.91%  58,067   459 1.06%
Other investments, at cost  12,259   544 5.93%  12,491   478 5.12%
             
Total interest-earning assets  1,488,046   46,718 4.20%  1,272,105   37,037 3.89%
             
Noninterest-earning assets  127,331       100,321     
             
Total assets $1,615,377      $1,372,426     
             
Interest-bearing liabilities:            
Savings accounts $52,222  $44 0.11% $46,835  $39 0.11%
Time deposits  414,802   3,527 1.14%  349,381   2,335 0.89%
Money market accounts  335,722   1,687 0.67%  255,013   704 0.37%
Interest bearing transaction accounts  208,550   282 0.18%  159,377   149 0.12%
Total interest bearing deposits  1,011,296   5,540 0.73%  810,606   3,227 0.53%
             
FHLB advances  219,178   2,841 1.71%  240,551   1,713 0.95%
Junior subordinated debentures  14,433   421 3.85%  14,433   418 3.87%
Other borrowings  9,113   352 5.16%  3,165   100 4.22%
             
Total interest-bearing liabilities  1,254,020   9,154 0.98%  1,068,755   5,458 0.68%
             
Noninterest-bearing deposits  190,902       151,174     
             
Other non interest bearing liabilities  16,719       14,204     
             
Total liabilities  1,461,641       1,234,133     
Total equity  153,736       138,293     
             
Total liabilities and equity $1,615,377      $1,372,426     
             
             
Tax-equivalent net interest income   $37,564     $31,579  
             
             
Net interest-earning assets (2) $234,026      $203,350     
             
Average interest-earning assets to interest-bearing liabilities  118.66%      119.03%    
             
Tax-equivalent net interest rate spread (3)     3.22%     3.21%
Tax-equivalent net interest margin (4)     3.38%     3.32%
             
(1) Tax exempt loans and investments are calculated giving effect to a 21% federal tax rate in 2018 and a 35% federal tax rate in 2017.
(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3) Tax-equivalent net interest rate spread represents the difference between the tax equivalent yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Tax-equivalent net interest margin represents tax equivalent net interest income divided by average total interest-earning assets.
 


Contact: Roger D. Plemens
President and Chief Executive Officer
(828) 524-7000