FOR IMMEDIATE RELEASE

 

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

 

ENTEGRA FINANCIAL CORP. ANNOUNCES

SECOND QUARTER 2017 RESULTS

 

Franklin, North Carolina, July 20, 2017 — 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 six months ended June 30, 2017.

 

Highlights

 

The following tables highlight the most important trends that the Company believes are relevant to understanding the performance of the Company. As further detailed in Appendix A, core results (a non-GAAP measure) reflect adjustments for material items including investment gains, investment impairment, and merger and acquisition expenses.

 

		For the Three Months Ended June 30,
		(Dollars in thousands, except per share data)
		2017								2016								Change (%)
		GAAP				Core				GAAP				Core				GAAP				Core
Net income		$	2,102			$	2,344			$	858			$	1,730				145.0	%			35.5	%
Net interest income		$	10,222				N/A			$	8,748				N/A				16.8	%			N/A
Net interest margin			3.36	%			N/A				3.33	%			N/A				0.9	%			N/A
Return on average assets			0.61	%			0.68	%			0.29	%			0.59	%			110.3	%			15.3	%
Return on average equity			6.09	%			6.79	%			2.56	%			5.17	%			137.9	%			31.3	%
Efficiency ratio			72.96	%			69.81	%			85.85	%			72.39	%			-15.0	%			-3.6	%
Diluted earnings per share		$	0.32			$	0.36			$	0.13			$	0.27				146.2	%			33.3	%

 

 

		For the Six Months Ended June 30,
		(Dollars in thousands, except per share data)
		2017								2016								Change (%)
		GAAP				Core				GAAP				Core				GAAP				Core
Net income		$	3,402			$	4,385			$	2,224			$	3,015				53.0	%			45.4	%
Net interest income		$	19,840				N/A			$	16,372				N/A				21.2	%			N/A
Net interest margin			3.33	%			N/A				3.28	%			N/A				1.5	%			N/A
Return on average assets			0.50	%			0.65	%			0.40	%			0.55	%			25.0	%			18.2	%
Return on average equity			4.99	%			6.44	%			3.32	%			4.51	%			50.3	%			42.8	%
Efficiency ratio			76.46	%			70.68	%			81.55	%			74.69	%			-6.2	%			-5.4	%
Diluted earnings per share		$	0.52			$	0.67			$	0.34			$	0.46				52.9	%			45.7	%

 

 

		As of June 30,				As of December 31,
		2017				2016
		(Dollars in thousands, except per share data)
Asset Quality:
Non-performing loans		$	6,587			$	6,041
Real estate owned		$	2,487			$	4,226
Non-performing assets		$	9,074			$	10,267
Non-performing loans to total loans			0.83	%			0.81	%
Non-performing assets to total assets			0.64	%			0.79	%
Net charge-offs (6 and 12 months ended)		$	11			$	430
Allowance for loan losses to non-performing loans			150.81	%			154.03	%
Allowance for loan losses to total loans			1.25	%			1.25	%
Other Data:
Book value per share		$	21.70			$	20.57
Tangible book value per share		$	20.21			$	20.10
Closing market price per share		$	22.75			$	20.60

 

Management Commentary

 

Roger D. Plemens, President and CEO of the Company reported, “The second quarter represents another successful quarter for the Company as we continue to improve our profitability while decreasing our efficiency ratio. We remain focused on improving our return on equity and assets, and will continue to make decisions that create a high performing bank. We are also pleased with the continued improvement in asset quality as we successfully liquidated several large properties. In June, we announced a definitive agreement to acquire Chattahoochee Bank of Georgia (“Chattahoochee”) which we expect will be more than 15% accretive to 2018 earnings and increase our return on equity above 8%.”

 

Net Interest Income

 

Net interest income increased $1.5 million, or 16.8%, to $10.2 million for the three months ended June 30, 2017 compared to $8.7 million for the same period in 2016. Net interest income increased $3.4 million, or 21.2%, to $19.8 million for the six months ended June 30, 2017 compared to $16.4 million for the same period in 2016. The increase in net interest income was primarily due to higher volumes in the loan and investment portfolios as well as a decrease in the interest rate paid on deposits. Net interest margin for the three and six months ended June 30, 2017 improved to 3.36% and 3.33%, respectively, compared to 3.33% and 3.28% for the same periods in 2016.

 

Provision for Loan Losses

 

The provision for loan losses was $0.3 million and $0.6 million for the three and six months ended June 30, 2017, compared to no provision for loan losses for the same periods in 2016. The Company continues to experience a minimal level of net charge-offs and modest levels of non-performing loans.

 

Noninterest Income

 

Noninterest income decreased $0.2 million, or 8.1%, to $1.9 million for the three months ended June 30, 2017 compared to $2.1 million for the same period in 2016. The slight decline was primarily related to reduced gains on sales of investments and SBA loans partially offset by increases in mortgage banking income, interchange fees, and bank-owned life insurance (BOLI).

 

Noninterest income decreased $1.0 million, or 24.2%, to $3.0 million for the six months ended June 30, 2017 compared to $4.0 million for the same period in 2016. The decline was primarily related to other than temporary impairment of $0.7 million realized on one investment security as well as decreases in gains from the sale of SBA loans, partially offset by increases in mortgage banking income, interchange fees, and BOLI.

 

Noninterest Expense

 

Noninterest expense decreased $0.4 million, or 4.8%, to $8.9 million for the three months ended June 30, 2017 compared to $9.3 million for the same period in 2016. The decrease was primarily related to a decline of $1.4 million in merger-related expenses. The Company incurred $1.8 million of merger-related expenses during the three months ended June 30, 2016 primarily related to the Oldtown Bank acquisition. Noninterest expense increased $0.9 million, or 5.3%, to $17.5 million for the six months ended June 30, 2017 compared to $16.6 million for the same period in 2016. The increase was primarily related to increased compensation and employee benefits and net occupancy expenses as the 2017 period included the full impact of the Oldtown Bank acquisition and the partial impact of the branches acquired from Stearns Bank.

 

Income Taxes

 

Income tax expense for the three and six months ended June 30, 2017 was $0.9 million and $1.3 million, respectively, compared to $0.7 million and $1.5 million in the comparable periods in the prior year. The Company’s effective tax rates of 29.0% and 28.2% for the three and six months ended June 30, 2017, respectively, improved from 44.0% and 40.7% from the same respective periods in 2016 primarily as the result of increased tax-exempt income related to municipal bond investments and BOLI income.

 

Balance Sheet

 

Total assets increased $116.6 million, or an annualized rate of 18.0%, to $1.41 billion at June 30, 2017 from $1.29 billion at December 31, 2016 as the Company continued to leverage its capital with earning assets.

 

Loans receivable increased $50.3 million, or an annualized rate of 13.5%, to $794.7 million at June 30, 2017 from $744.4 million at December 31, 2016. Loan growth continues to be primarily concentrated in commercial real estate and commercial and industrial loans.

 

The Company also increased its investment portfolio by $29.5 million from December 31, 2016 to June 30, 2017 in order to better leverage its capital. The Company utilized excess cash received from the assumption of deposits in the February branch acquisition to fund additional purchases of investments available for sale.

 

Core deposits increased $109.6 million, or 20.3%, to $650.4 million at June 30, 2017 from $540.8 million at December 31, 2016, including $79.6 million of core deposits assumed in the Stearns Bank branch acquisition. Certificates of deposits increased $74.4 million to $363.6 million at June 30, 2017 from $289.2 million at December 31, 2016, primarily as the result of certificates of deposit assumed from Stearns Bank. Core deposits remained relatively unchanged at 64% of the Company’s deposit portfolio at June 30, 2017 compared to 65% at December 31, 2016.

 

Total equity increased $7.0 million to $140.1 million at June 30, 2017 compared to $133.1 million at December 31, 2016. This increase was primarily attributable to $3.4 million of net income, $0.5 million of stock-based compensation expense, and a $3.4 million improvement in the market value of investment securities partially offset by $0.3 million of share repurchases. Tangible book value per share increased $0.11 from $20.10 at December 31, 2016 to $20.21 at June 30, 2017 as a result of operating results for the period offset by $1.02 per share dilution from the Stearns Bank branch acquisition.

 

Asset Quality

 

Non-performing assets decreased $1.2 million to $9.1 million at June 30, 2017 from $10.3 million at December 31, 2016 primarily as a result of the liquidation of several large real estate owned balances during the period. Net loan charge-offs continue to remain low totaling $11 thousand for the six months ended June 30, 2017, compared to $0.4 million for the year ended December 31, 2016.

 

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 core noninterest expense, core net income, core diluted earnings per share, core return on average assets, core return on average equity, and core efficiency ratio, which are 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. 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 began trading on the NASDAQ Global Market on October 1, 2014 under the symbol “ENFC”.

 

Entegra Bank operates a total of 17 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 county of Jasper. 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 document and its exhibits may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. 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,” or other statements concerning opinions or judgments of the Company and its management about future events. The accuracy of such forward looking statements could be affected by factors including, but not limited to: the financial success or changing conditions or strategies of the Company’s customers or vendors; fluctuations in interest rates; actions of government regulators; the availability of capital and personnel; or general economic conditions. In addition, in relation to the previously-announced definitive agreement to acquire Chattohoochee, the following factors among others, could cause actual results to differ materially from forward looking statements: ability to obtain regulatory approvals and meet other closing conditions to the acquisition, including approval by Chattahoochee’s shareholders, on the expected terms and schedule; delay in closing the acquisition; difficulties and delays in integrating Company’s and Chattahoochee’s businesses or fully realizing cost savings and other benefits; business disruption following the proposed transaction; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the reaction to the transaction of the banks’ customers, employees and counterparties; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Board of Governors of the Federal Reserve and legislative and regulatory actions and reforms. These forward looking statements express management’s current expectations, plans or forecasts of future events, results and condition, including financial and other estimates. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements are discussed in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to revise or update these statements following the date of this press release.

 

Additional Information About The Proposed Transaction And Where To Find It

 

This material is not a solicitation of any vote or approval of Chattahoochee’s shareholders and is not a substitute for the proxy statement/prospectus or any other documents which and Chattahoochee may send in connection with the proposed acquisition. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

In connection with the proposed acquisition of Chattahoochee, the Company will file with the SEC a registration statement on Form S-4 to register the shares of the Company’s common stock to be issued to the shareholders of Chattahoochee. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of Chattahoochee seeking their approval of the acquisition and related matters. In addition, the Company may file other relevant documents concerning the proposed acquisition with the SEC.

 INVESTORS AND SHAREHOLDERS OF CHATTAHOOCHEE ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED ACQUISITION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, CHATTAHOOCHEE AND THE PROPOSED TRANSACTION.

 Investors and shareholders may obtain free copies of these documents, when filed, through the website maintained by the SEC at www.sec.gov. Free copies of the proxy statement/prospectus also may be obtained, when available, by directing a request by telephone or mail to Entegra Financial Corp., 14 One Center Court, Franklin, North Carolina 28734, Attention: David Bright (telephone: (828) 524-7000), or Chattahoochee Bank of Georgia, 643 E E Butler Parkway, Gainesville, Georgia 30503, Attention: Investor Relations (telephone: (770) 536-0607), or by accessing the Company’s website at www.entegrabank.com under “Investor Relations.” The information on the Company’s and Chattahoochee’s websites is not, and shall not be deemed to be, a part of this Current Report or incorporated into other filings either company makes with the SEC.

Chattahoochee and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Chattahoochee in connection with the acquisition. Information about the directors and executive officers of Chattahoochee is set forth in the proxy statement for Chattahoochee’s 2017 annual meeting of shareholders. Additional information regarding the interests of these participants and other persons who may be deemed participants in the proxy solicitation may be obtained by reading the proxy statement/prospectus when it becomes available.

ENTEGRA FINANCIAL CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands, except per share data)

 

		Three Months Ended June 30,
		2017				2016
Interest income		$	12,024			$	10,257
Interest expense			1,802				1,509
Net interest income			10,222				8,748
Provision for loan losses			325				—
Net interest income after provision for loan losses			9,897				8,748
Servicing income, net			158				75
Mortgage banking			343				220
Gain on sale of SBA loans			4				284
Gain on sale of investments			36				429
Trading securities gains			100				104
Other than temporary impairment on available-for-sale securities			—				—
Service charges on deposit accounts			412				387
Interchange fees			480				382
Bank owned life insurance			214				94
Other			182				124
Total noninterest income			1,929				2,099
Compensation and employee benefits			5,086				4,257
Net occupancy			926				835
Federal deposit insurance			135				184
Professional and advisory			363				293
Data processing			424				400
Marketing and advertising			226				302
Net cost of operation of real estate owned			81				210
Merger-related expenses			408				1,771
Other			1,217				1,061
Total noninterest expense			8,866				9,313
Income before taxes			2,960				1,534
Income tax expense			858				676
Net income		$	2,102			$	858
Earnings per common share:
Basic		$	0.33			$	0.13
Diluted		$	0.32			$	0.13
Weighted average common shares outstanding:
Basic			6,456,572				6,466,665
Diluted			6,549,000				6,482,079

 

ENTEGRA FINANCIAL CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands, except per share data)

 

		Six Months Ended June 30,
		2017				2016
Interest income		$	23,367			$	19,250
Interest expense			3,527				2,878
Net interest income			19,840				16,372
Provision for loan losses			640				—
Net interest income after provision for loan losses			19,200				16,372
Servicing income, net			253				191
Mortgage banking			563				360
Gain on sale of SBA loans			146				618
Gain on sale of investments			43				698
Trading securities gains			307				178
Other than temporary impairment on available-for-sale securities			(700	)			—
Service charges on deposit accounts			803				781
Interchange fees			890				724
Bank owned life insurance			395				201
Other			312				223
Total noninterest income			3,012				3,974
Compensation and employee benefits			9,922				8,267
Net occupancy			1,877				1,651
Federal deposit insurance			239				360
Professional and advisory			637				505
Data processing			825				751
Marketing and advertising			474				502
Net cost of operation of real estate owned			215				496
Merger-related expenses			856				1,916
Other			2,428				2,144
Total noninterest expense			17,473				16,592
Income before taxes			4,739				3,754
Income tax expense			1,337				1,530
Net income		$	3,402			$	2,224
Earnings per common share:
Basic		$	0.53			$	0.34
Diluted		$	0.52			$	0.34
Weighted average common shares outstanding:
Basic			6,460,693				6,492,209
Diluted			6,540,524				6,506,485

 

ENTEGRA FINANCIAL CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

		June 30, 2017				December 31, 2016
		(Unaudited)				(Audited)
Assets
Cash and cash equivalents		$	80,111			$	43,294
Investments - trading			5,636				5,211
Investments - available for sale			427,831				398,291
Other investments			12,208				15,261
Loans held for sale			3,668				4,584
Loans receivable			794,687				744,361
Allowance for loan losses			(9,934	)			(9,305	)
Real estate owned			2,487				4,226
Fixed assets, net			21,022				20,209
Bank owned life insurance			31,742				31,347
Net deferred tax asset			15,851				18,985
Goodwill			7,144				2,065
Core deposit intangibles, net			2,470				979
Other assets			14,553				13,369
Total assets		$	1,409,476			$	1,292,877
Liabilities and Shareholders' Equity
Liabilities
Deposits		$	1,013,998			$	830,013
Federal Home Loan Bank advances			223,500				298,500
Junior subordinated notes			14,433				14,433
Post employment benefits			10,163				10,211
Other liabilities			7,249				6,652
Total liabilities		$	1,269,343			$	1,159,809
Total shareholders' equity			140,133				133,068
Total liabilities and shareholders' equity		$	1,409,476			$	1,292,877

 

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

 

 

		Three Months Ended June 30,								Six Months Ended June 30.
		2017				2016				2017				2016
		(Dollars in thousands)								(Dollars in thousands)
Core Noninterest Expense
Noninterest expense (GAAP)		$	8,866			$	9,313			$	17,473			$	16,592
Merger-related expenses			(408	)			(1,771	)			(856	)			(1,916	)
Core noninterest expense (Non-GAAP)		$	8,458			$	7,542			$	16,617			$	14,676
Core Net Income
Net income (GAAP)		$	2,102			$	858			$	3,402			$	2,224
Gain on sale of investments			(23	)			(279	)			(28	)			(454	)
Other than temporary impairment of investment securities available for sale			—				—				455				—
Merger-related expenses			265				1,151				556				1,245
Core net income (Non-GAAP)		$	2,344			$	1,730			$	4,385			$	3,015
Core Diluted Earnings Per Share
Diluted earnings per share (GAAP)		$	0.32			$	0.13			$	0.52			$	0.34
Gain on sale of investments			—				(0.04	)			—				(0.07	)
Other than temporary impairment of investment securities available for sale			—				—				0.06				—
Merger-related expenses			0.04				0.18				0.09				0.19
Core diluted earnings per share (Non-GAAP)		$	0.36			$	0.27			$	0.67			$	0.46
Core Return on Average Assets
Return on Average Assets (GAAP)			0.61	%			0.29	%			0.50	%			0.40	%
Gain on sale of investments			-0.01	%			-0.09	%			—				-0.08	%
Other than temporary impairment of investment securities available for sale			—				—				0.07	%			—
Merger-related expenses			0.08	%			0.39	%			0.08	%			0.23	%
Core Return on Average Assets (Non-GAAP)			0.68	%			0.59	%			0.65	%			0.55	%
Core Return on Average Equity
Return on Average Equity (GAAP)			6.09	%			2.56	%			4.99	%			3.32	%
Gain on sale of investments			-0.07	%			-0.82	%			-0.04	%			-0.67	%
Other than temporary impairment of investment securities available for sale			—				—				0.67	%			—
Merger-related expenses			0.77	%			3.43	%			0.82	%			1.86	%
Core Return on Average Equity (Non-GAAP)			6.79	%			5.17	%			6.44	%			4.51	%
Core Efficiency Ratio
Efficiency ratio (GAAP)			72.96	%			85.85	%			76.46	%			81.55	%
Gain on sale of investments			0.30	%			2.87	%			0.19	%			2.56	%
Other than temporary impairment of investment securities available for sale			—				—				-2.97	%			—
Merger-related expenses			-3.45	%			-16.33	%			-3.00	%			-9.42	%
Core Efficiency Ratio (Non-GAAP)			69.81	%			72.39	%			70.68	%			74.69	%
			As Of
		June 30, 2017				December 31, 2016
			(Dollars in thousands, except share data)
Tangible Book Value Per Share
Book Value (GAAP)		$	140,133			$	133,068
Goodwill and intangibles			(9,614	)			(3,044	)
Book Value (Tangible)		$	130,519			$	130,024
Outstanding shares			6,458,679				6,467,550
Tangible Book Value Per Share		$	20.21			$	20.10

 

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

 

		For the Three Months Ended June 30,
		2017												2016
		Average Outstanding Balance				Interest				Yield/ Rate				Average Outstanding Balance				Interest				Yield/ Rate
		(Dollars in thousands)
Interest-earning assets:
Loans, including loans held for sale		$	765,764			$	9,035				4.73	%		$	703,576			$	8,255				4.71	%
Loans, tax exempt (1)			16,183				151				3.73	%			15,753				151				3.84	%
Investments - taxable			313,653				1,822				2.32	%			263,968				1,422				2.16	%
Investment tax exempt (1)			118,437				1,227				4.15	%			48,722				471				3.88	%
Interest earning deposits			52,993				127				0.96	%			38,086				54				0.57	%
Other investments, at cost			11,808				144				4.89	%			9,566				122				5.12	%
Total interest-earning assets			1,278,838				12,506				3.92	%			1,079,671				10,475				3.89	%
Noninterest-earning assets			103,141												87,193
Total assets		$	1,381,979											$	1,166,864
Interest-bearing liabilities:
Savings accounts		$	48,280			$	13				0.11	%		$	37,757			$	16				0.17	%
Time deposits			360,885				783				0.87	%			313,204				769				0.98	%
Money market accounts			257,457				236				0.37	%			237,424				180				0.30	%
Interest bearing transaction accounts			167,487				53				0.13	%			114,069				67				0.24	%
Total interest bearing deposits			834,109				1,085				0.52	%			702,454				1,032				0.59	%
FHLB advances			223,500				542				0.97	%			173,885				319				0.74	%
Junior subordinated debentures			14,433				141				3.92	%			14,433				128				3.56	%
Other borrowings			3,044				34				4.48	%			2,569				30				4.68	%
Total interest-bearing liabilities			1,075,086				1,802				0.67	%			893,341				1,509				0.68	%
Noninterest-bearing deposits			154,898												121,001
Other non interest bearing liabilities			13,999												18,725
Total liabilities			1,243,983												1,033,067
Total equity			137,996												133,797
Total liabilities and equity		$	1,381,979											$	1,166,864
Tax-equivalent net interest income						$	10,704											$	8,966
Net interest-earning assets (2)		$	203,752											$	186,330
Average interest-earning assets to interest-bearing liabilities			1.19	%											1.21	%
Tax-equivalent net interest rate spread (3)											3.25	%											3.21	%
Tax-equivalent net interest margin (4)											3.36	%											3.33	%

 

(1) Tax exempt loans and investments are calculated giving effect to a 35% federal tax rate.

(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 Six Months Ended June 30,
		2017												2016
		Average Outstanding Balance				Interest				Yield/ Rate				Average Outstanding Balance				Interest				Yield/ Rate
		(Dollars in thousands)
Interest-earning assets:
Loans, including loans held for sale		$	754,521			$	17,511				4.68	%		$	668,318			$	15,461				4.64	%
Loans, tax exempt (1)			15,549				288				3.73	%			11,147				220				3.96	%
Investments - taxable			305,029				3,581				2.35	%			263,925				2,880				2.19	%
Investment tax exempt (1)			114,954				2,352				4.09	%			31,586				691				4.39	%
Interest earning deposits			55,427				243				0.88	%			35,977				90				0.50	%
Other investments, at cost			12,831				316				4.97	%			9,058				227				5.03	%
Total interest-earning assets			1,258,311				24,291				3.89	%			1,020,011				19,569				3.85	%
Noninterest-earning assets			100,113												85,553
Total assets		$	1,358,424											$	1,105,564
Interest-bearing liabilities:
Savings accounts		$	45,661			$	25				0.11	%		$	36,688			$	26				0.14	%
Time deposits			344,834				1,540				0.90	%			292,979				1,523				1.04	%
Money market accounts			252,069				455				0.36	%			213,379				331				0.31	%
Interest bearing transaction accounts			151,464				93				0.12	%			108,387				94				0.17	%
Total interest bearing deposits			794,028				2,113				0.54	%			651,433				1,974				0.61	%
FHLB advances			249,052				1,072				0.87	%			165,066				594				0.72	%
Junior subordinated debentures			14,433				278				3.88	%			14,433				254				3.53	%
Other borrowings			2,917				64				4.42	%			2,394				56				4.69	%
Total interest-bearing liabilities			1,060,430				3,527				0.67	%			833,326				2,878				0.69	%
Noninterest-bearing deposits			147,770												121,001
Other non interest bearing liabilities			13,968												17,440
Total liabilities			1,222,168												971,767
Total equity			136,256												133,797
Total liabilities and equity		$	1,358,424											$	1,105,564
Tax-equivalent net interest income						$	20,764											$	16,691
Net interest-earning assets (2)		$	197,881											$	186,685
Average interest-earning assets to interest-bearing liabilities			118.66	%											122.40	%
Tax-equivalent net interest rate spread (3)											3.22	%											3.15	%
Tax-equivalent net interest margin (4)											3.33	%											3.28	%

 

(1) Tax exempt loans and investments are calculated giving effect to a 35% federal tax rate.

(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.