STRASBURG, Va., April 26, 2016 (GLOBE NEWSWIRE) -- First National Corporation (the “Company” or “First National”) (OTC:FXNC) today reported earnings of $1.1 million and earnings per share of $0.22 for the quarter ended March 31, 2016, compared to $813 thousand or $0.17 per share for the fourth quarter of 2015, and $215 thousand or $0.04 per share for the first quarter of 2015.
“The Company benefited from loan growth, lower expenses and a full quarter with no outstanding preferred stock,” said Scott C. Harvard, president and chief executive officer of First National. “During the first quarter, net interest income and net interest margin increased over prior quarters as the earning asset mix continued to improve from loan growth while the Company was able to maintain its low cost funding. Expenses decreased again this quarter with lower legal and professional fees and lower other real estate owned expense. We’ve been pleased with the execution of our balance sheet strategies that included growing deposits through acquisition, deploying liquidity into the loan portfolio, and reducing the cost of capital by redeeming preferred stock. Profitability has improved for three consecutive quarters from balance sheet changes and cost reductions. We continued working on our initiative to streamline, serve and save. This initiative is being driven by a team of employees from across the Company who are diligently working to improve efficiency by updating processes, improving service to customers, and reducing costs. The goal of this initiative is to increase capacity for balance sheet growth and to improve profitability.”
Select highlights for the first quarter include:
- Return on equity increased to 9.39%, compared to 7.01% for the fourth quarter of 2015, and 3.67% for the first quarter of 2015
- Net income available to common shareholders increased $286 thousand, or 35%, to $1.1 million compared to the fourth quarter of 2015, and increased $884 thousand compared to the first quarter of 2015
- Net loans increased $15.1 million, or 3%, during the quarter, and increased $56.8 million, or 15%, over the prior year
- Net interest margin increased to 3.63% compared to 3.53% for the fourth quarter of 2015
- Net interest income increased $101 thousand, or 2%, over the fourth quarter of 2015, and increased $1.1 million, or 23%, compared to the first quarter of 2015
- Noninterest income, excluding gains on sale of securities, decreased by $264 thousand, or 12%, compared to the fourth quarter of 2015, and increased $294 thousand, or 18%, compared to the first quarter of 2015
- Noninterest expense decreased $395 thousand, or 6%, compared to the fourth quarter of 2015, and increased $630 thousand, or 11%, compared to the first quarter of 2015
- Effective dividend on preferred stock decreased $128 thousand compared to the fourth quarter of 2015, and decreased $329 thousand compared to the first quarter of 2015
BRANCH ACQUISITION
On April 17, 2015, First Bank (the “Bank”), the Company’s banking subsidiary, completed the acquisition of six banking offices with approximately $186.8 million of deposits in the Shenandoah Valley and central Virginia regions from Bank of America, N.A. (the “Acquisition” or “Branch Acquisition”). The Company incurred integration costs related to the acquisition, including legal and professional fees, supplies, data processing and postage expenses that totaled $11 thousand in the fourth quarter of 2015 and $419 thousand in the first quarter of 2015. The Company did not incur integration costs in the first quarter of 2016.
At March 31, 2016, deposits in the acquired branches totaled $174.6 million, which was 94% of the deposit balances assumed in the acquisition. The branch acquisition had a positive impact on the cost of funds for the Company. Excluding amortization of the time deposit valuation allowance, the cost of funds in the first quarter of 2016 for acquired branches was 0.22%, compared to the total cost of funds for the Company of 0.31% for the same period. The mix of deposits, which was comprised of a significant amount of noninterest-bearing deposits, remained consistent from the acquisition date through March 31, 2016. The Bank assembled an experienced lending team in its south region that made a meaningful contribution to loan growth during 2015 and in the first quarter of 2016.
BALANCE SHEET
Total assets of First National increased by $8.7 million to $701.0 million at March 31, 2016, and increased $170.6 million or 32% compared to March 31, 2015. Loans, net of the allowance for loan losses increased $15.1 million, or 3%, during the first quarter, and increased $56.8 million or 15% compared to one year ago. The securities portfolio decreased $7.9 million during the quarter to $165.5 million at March 31, 2016, and increased $72.7 million or 78% compared to one year ago.
Total deposits increased $6.0 million during the quarter to $633.1 million, and increased $194.3 million, or 44%, compared to one year ago. At March 31, 2016, December 31, 2015 and March 31, 2015, the composition of the deposit portfolio was unchanged with noninterest-bearing demand deposits, savings and interest-bearing demand deposits, and time deposits comprising 25%, 53% and 22% of total deposits, respectively.
Total shareholders’ equity increased $1.7 million during the first quarter. The Company’s redemption of preferred stock in the fourth quarter of 2015 had a positive impact on net income available to common shareholders as there was no effective dividend on preferred stock during the first quarter. Tangible common equity totaled $45.6 million at March 31, 2016, compared to $43.6 million at December 31, 2015 and $45.6 million at March 31, 2015. The Company and the Bank exceeded their target capital levels at the end of the quarter.
NET INTEREST INCOME
Net interest income increased $101 thousand, or 2%, to $5.7 million for the quarter compared to $5.6 million for the fourth quarter of 2015, and increased $1.1 million, or 23%, compared to $4.6 million for the first quarter of 2015.
Total interest income increased $170 thousand, or 3%, during the quarter compared to the fourth quarter of 2015 and increased $1.2 million, or 24%, compared to the first quarter of 2015. The growth in interest income compared to the first quarter of 2016 was predominantly due to a change in the mix of earning assets with higher balances of loans and lower balances of securities. Compared to the first quarter of 2015, the growth in interest income was primarily a result of higher balances of both loans and securities.
Total interest expense increased by $69 thousand, or 16%, during the quarter compared to the fourth quarter of 2015, and increased $136 thousand, or 38%, compared to the first quarter of 2015. When comparing the first quarter of 2016 to the same period one year ago, the increase in interest expense correlated with the $194.3 million, or 44%, increase in total deposits.
NONINTEREST INCOME
Noninterest income, excluding net gains on sale of securities, decreased $264 thousand to $1.9 million, compared to $2.2 million for the fourth quarter of 2015, and increased $294 thousand, or 18%, compared to the first quarter of 2015.
When compared to the fourth quarter of 2015, the decrease in noninterest income was primarily attributable to lower revenue from service charges on deposit accounts and wealth management. The decrease in revenue from service charges on deposit accounts for the first quarter of the year is believed to be cyclical, as this revenue has historically been lower in the first quarter than any other period of the year. The decrease in wealth management revenue was attributable to the elimination of brokerage services at the beginning of the year.
The increase in noninterest income compared to the same period one year ago was primarily attributable to the 44% growth in deposit balances when comparing the periods. Service charges on deposits increased $233 thousand, or 43%, ATM and check card fees increased $139 thousand, or 40%, and fees for other customer services increased $40 thousand, or 37%.
NONINTEREST EXPENSE
Noninterest expense decreased $395 thousand, or 6%, to $6.1 million for the quarter compared to $6.5 million for the fourth quarter of 2015, and increased $630 thousand, or 11%, compared to the first quarter of 2015. The decrease in expenses when compared to the fourth quarter of 2015 was primarily attributable to a reduction in legal and professional fees, as well as a reduction in other real estate owned expense.
Comparing the current period results to the first quarter of 2015, the 11% increase in total noninterest expense was primarily attributable to the impact of the branch acquisition, which increased the number of bank branch locations from 10 to 15 and added a core deposit intangible asset. Expense categories that increased as a result of the acquisition included salaries and employee benefits, occupancy, equipment, and amortization of the core deposit intangible.
ASSET QUALITY/LOAN LOSS PROVISION
Credit quality continued to improve during the quarter as nonperforming assets decreased by $162 thousand to 0.91% of total assets, compared to 0.94% at December 31, 2015, and 1.72% at March 31, 2015. Loans past due between 30 and 89 days was 0.38% of total loans, compared to 0.32% at December 31, 2015 and 0.44% at March 31, 2015.
The Bank did not record provision for loan losses for the first quarter of 2016, the fourth quarter of 2015, or the first quarter of 2015. Net charge-offs totaled $5 thousand in the first quarter of 2016 and $51 thousand in the fourth quarter of 2015. The Bank had $53 thousand of net recoveries for the first quarter of 2015. Provision for loan losses was not required for the first quarter of 2016 due to decreases in the specific reserve component of the allowance for loan losses. The decreases in specific reserve component offset an increase in the general reserve component. The increase in general reserves was driven by loan growth. The allowance for loan losses totaled $5.5 million at the end of the first quarter of 2016 and the fourth quarter of 2015, and $6.8 million at March 31, 2015, representing 1.22%, 1.26%, and 1.70% of total loans, respectively.
FORWARD-LOOKING STATEMENTS
Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, and other filings with the Securities and Exchange Commission.
ABOUT FIRST NATIONAL CORPORATION
First National Corporation (OTC: FXNC) is the parent company and bank holding company of First Bank, a community bank that first opened for business in 1907 in Strasburg, Virginia. The Bank offers loan and deposit products and services through its website, www.fbvirginia.com, its mobile banking platform, a network of ATMs located throughout its market area, two loan production offices, a customer service center in a retirement village, and 15 bank branch office locations located throughout the Shenandoah Valley and central regions of Virginia. In addition to providing traditional banking services, the Bank operates a wealth management division under the name First Bank Wealth Management. First Bank also owns First Bank Financial Services, Inc., which invests in entities that provide investment services and title insurance.
| FIRST NATIONAL CORPORATION | ||||||||||||||||||||
| Quarterly Performance Summary | ||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| Income Statement | 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
| Interest income | ||||||||||||||||||||
| Interest and fees on loans | $ | 5,236 | $ | 5,056 | $ | 4,854 | $ | 4,688 | $ | 4,540 | ||||||||||
| Interest on deposits in banks | 48 | 63 | 61 | 68 | 5 | |||||||||||||||
| Interest on securities | 888 | 884 | 829 | 618 | 422 | |||||||||||||||
| Dividends on restricted securities | 19 | 18 | 20 | 18 | 21 | |||||||||||||||
| Total interest income | $ | 6,191 | $ | 6,021 | $ | 5,764 | $ | 5,392 | $ | 4,988 | ||||||||||
| Interest expense | ||||||||||||||||||||
| Interest on deposits | $ | 333 | $ | 302 | $ | 282 | $ | 266 | $ | 300 | ||||||||||
| Interest on federal funds purchased | 3 | - | - | 1 | 1 | |||||||||||||||
| Interest on subordinated debt | 90 | 62 | - | - | - | |||||||||||||||
| Interest on junior subordinated debt | 61 | 59 | 56 | 55 | 54 | |||||||||||||||
| Interest on other borrowings | 5 | - | - | 2 | 1 | |||||||||||||||
| Total interest expense | $ | 492 | $ | 423 | $ | 338 | $ | 324 | $ | 356 | ||||||||||
| Net interest income | $ | 5,699 | $ | 5,598 | $ | 5,426 | $ | 5,068 | $ | 4,632 | ||||||||||
| Recovery of loan losses | - | - | - | (100 | ) | - | ||||||||||||||
| Net interest income after recovery of loan losses | $ | 5,699 | $ | 5,598 | $ | 5,426 | $ | 5,168 | $ | 4,632 | ||||||||||
| Noninterest income | ||||||||||||||||||||
| Service charges on deposit accounts | $ | 780 | $ | 846 | $ | 897 | $ | 752 | $ | 547 | ||||||||||
| ATM and check card fees | 488 | 520 | 529 | 497 | 349 | |||||||||||||||
| Wealth management fees | 336 | 496 | 477 | 499 | 503 | |||||||||||||||
| Fees for other customer services | 147 | 143 | 172 | 184 | 107 | |||||||||||||||
| Income from bank owned life insurance | 86 | 103 | 106 | 90 | 74 | |||||||||||||||
| Net gains (losses) on sale of securities | 6 | (3 | ) | - | - | (52 | ) | |||||||||||||
| Net gains on sale of loans | 21 | 43 | 53 | 50 | 55 | |||||||||||||||
| Other operating income | 79 | 50 | 10 | 237 | 8 | |||||||||||||||
| Total noninterest income | $ | 1,943 | $ | 2,198 | $ | 2,244 | $ | 2,309 | $ | 1,591 | ||||||||||
| Noninterest expense | ||||||||||||||||||||
| Salaries and employee benefits | $ | 3,444 | $ | 3,491 | $ | 3,637 | $ | 3,597 | $ | 3,125 | ||||||||||
| Occupancy | 424 | 400 | 396 | 339 | 317 | |||||||||||||||
| Equipment | 432 | 398 | 400 | 422 | 281 | |||||||||||||||
| Marketing | 107 | 94 | 176 | 163 | 97 | |||||||||||||||
| Supplies | 101 | 93 | 116 | 229 | 345 | |||||||||||||||
| Legal and professional fees | 311 | 450 | 243 | 431 | 212 | |||||||||||||||
| ATM and check card fees | 205 | 200 | 236 | 190 | 155 | |||||||||||||||
| FDIC assessment | 122 | 119 | 134 | 64 | 67 | |||||||||||||||
| Bank franchise tax | 103 | 130 | 131 | 130 | 122 | |||||||||||||||
| Telecommunications expense | 114 | 120 | 131 | 100 | 85 | |||||||||||||||
| Data processing expense | 128 | 157 | 130 | 226 | 187 | |||||||||||||||
| Postage expense | 69 | 71 | 73 | 80 | 117 | |||||||||||||||
| Amortization expense | 207 | 216 | 226 | 196 | 4 | |||||||||||||||
| Other real estate owned, net | (72 | ) | 92 | 144 | 152 | (36 | ) | |||||||||||||
| Other operating expense | 422 | 481 | 528 | 536 | 409 | |||||||||||||||
| Total noninterest expense | $ | 6,117 | $ | 6,512 | $ | 6,701 | $ | 6,855 | $ | 5,487 | ||||||||||
| Income before income taxes | $ | 1,525 | $ | 1,284 | $ | 969 | $ | 622 | $ | 736 | ||||||||||
| Income tax expense | 426 | 343 | 243 | 178 | 192 | |||||||||||||||
| Net income | $ | 1,099 | $ | 941 | $ | 726 | $ | 444 | $ | 544 | ||||||||||
| Effective dividend and accretion on preferred stock | - | 128 | 328 | 328 | 329 | |||||||||||||||
| Net income available to common shareholders | $ | 1,099 | $ | 813 | $ | 398 | $ | 116 | $ | 215 | ||||||||||
| Common Share and Per Common Share Data | ||||||||||||||||||||
| Net income, basic | $ | 0.22 | $ | 0.17 | $ | 0.08 | $ | 0.02 | $ | 0.04 | ||||||||||
| Weighted average shares, basic | 4,920,315 | 4,913,985 | 4,911,604 | 4,909,775 | 4,906,981 | |||||||||||||||
| Net income, diluted | $ | 0.22 | $ | 0.17 | $ | 0.08 | $ | 0.02 | $ | 0.04 | ||||||||||
| Weighted average shares, diluted | 4,923,117 | 4,916,804 | 4,913,461 | 4,911,298 | 4,911,044 | |||||||||||||||
| Shares outstanding at period end | 4,924,539 | 4,916,130 | 4,912,662 | 4,910,826 | 4,909,714 | |||||||||||||||
| Book value at period end | $ | 9.69 | $ | 9.35 | $ | 9.32 | $ | 9.13 | $ | 9.31 | ||||||||||
| Cash dividends | $ | 0.03 | $ | 0.025 | $ | 0.025 | $ | 0.025 | $ | 0.025 | ||||||||||
| FIRST NATIONAL CORPORATION | |||||||||||||||||||
| Quarterly Performance Summary | |||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
| Key Performance Ratios | |||||||||||||||||||
| Return on average assets | 0.64 | % | 0.54 | % | 0.42 | % | 0.27 | % | 0.43 | % | |||||||||
| Return on average equity | 9.39 | % | 7.01 | % | 4.80 | % | 2.97 | % | 3.67 | % | |||||||||
| Net interest margin | 3.63 | % | 3.53 | % | 3.40 | % | 3.29 | % | 3.96 | % | |||||||||
| Efficiency ratio (1) | 77.31 | % | 78.42 | % | 81.38 | % | 83.52 | % | 80.51 | % | |||||||||
| Average Balances | |||||||||||||||||||
| Average assets | $ | 693,783 | $ | 692,263 | $ | 691,121 | $ | 671,199 | $ | 516,259 | |||||||||
| Average earning assets | 643,358 | 640,880 | 642,234 | 625,197 | 480,490 | ||||||||||||||
| Average shareholders’ equity | 47,066 | 53,264 | 60,043 | 59,957 | 60,040 | ||||||||||||||
| Asset Quality | |||||||||||||||||||
| Loan charge-offs | $ | 121 | $ | 418 | $ | 637 | $ | 671 | $ | 112 | |||||||||
| Loan recoveries | 116 | 367 | 83 | 129 | 165 | ||||||||||||||
| Net charge-offs (recoveries) | 5 | 51 | 554 | 542 | (53 | ) | |||||||||||||
| Non-accrual loans | 4,259 | 3,854 | 4,930 | 6,666 | 7,170 | ||||||||||||||
| Other real estate owned, net | 2,112 | 2,679 | 2,760 | 2,407 | 1,949 | ||||||||||||||
| Nonperforming assets | 6,371 | 6,533 | 7,690 | 9,073 | 9,119 | ||||||||||||||
| Loans 30 to 89 days past due, accruing | 1,743 | 1,418 | 2,084 | 1,487 | 1,763 | ||||||||||||||
| Loans over 90 days past due, accruing | 124 | 92 | 147 | 600 | 71 | ||||||||||||||
| Troubled debt restructurings, accruing | 313 | 317 | 321 | 324 | 782 | ||||||||||||||
| Special mention loans | 13,796 | 16,372 | 15,706 | 21,278 | 22,550 | ||||||||||||||
| Substandard loans, accruing | 10,068 | 10,265 | 10,496 | 10,927 | 15,741 | ||||||||||||||
| Capital Ratios (2) | |||||||||||||||||||
| Total capital | $ | 62,440 | $ | 61,513 | $ | 60,232 | $ | 72,362 | $ | 72,764 | |||||||||
| Tier 1 capital | 56,920 | 55,989 | 55,066 | 67,400 | 67,918 | ||||||||||||||
| Common equity tier 1 capital | 56,920 | 55,989 | 55,066 | 67,400 | 67,918 | ||||||||||||||
| Total capital to risk-weighted assets | 13.73 | % | 13.86 | % | 14.59 | % | 18.28 | % | 18.86 | % | |||||||||
| Tier 1 capital to risk-weighted assets | 12.52 | % | 12.62 | % | 13.34 | % | 17.03 | % | 17.61 | % | |||||||||
| Common equity tier 1 capital to risk-weighted assets | 12.52 | % | 12.62 | % | 13.34 | % | 17.03 | % | 17.61 | % | |||||||||
| Leverage ratio | 8.22 | % | 8.12 | % | 7.99 | % | 10.06 | % | 13.17 | % | |||||||||
| Balance Sheet | |||||||||||||||||||
| Cash and due from banks | $ | 10,250 | $ | 8,247 | $ | 9,890 | $ | 11,870 | $ | 7,529 | |||||||||
| Interest-bearing deposits in banks | 29,077 | 31,087 | 66,956 | 99,274 | 1,645 | ||||||||||||||
| Securities available for sale, at fair value | 99,019 | 105,559 | 109,166 | 112,468 | 90,855 | ||||||||||||||
| Securities held to maturity, at carrying value | 64,963 | 66,519 | 54,276 | 37,343 | - | ||||||||||||||
| Restricted securities, at cost | 1,548 | 1,391 | 1,391 | 1,391 | 1,999 | ||||||||||||||
| Loans held for sale | 523 | 323 | 471 | 1,978 | - | ||||||||||||||
| Loans, net of allowance for loan losses | 448,556 | 433,475 | 400,838 | 385,592 | 391,746 | ||||||||||||||
| Other real estate owned, net of valuation allowance | 2,112 | 2,679 | 2,760 | 2,407 | 1,949 | ||||||||||||||
| Premises and equipment, net | 21,366 | 21,389 | 21,493 | 21,277 | 16,298 | ||||||||||||||
| Accrued interest receivable | 1,741 | 1,661 | 1,543 | 1,423 | 1,256 | ||||||||||||||
| Bank owned life insurance | 13,828 | 11,742 | 11,627 | 11,521 | 11,431 | ||||||||||||||
| Core deposit intangibles, net | 2,115 | 2,322 | 2,539 | 2,765 | 51 | ||||||||||||||
| Other assets | 5,945 | 5,927 | 5,945 | 6,518 | 5,650 | ||||||||||||||
| Total assets | $ | 701,043 | $ | 692,321 | $ | 688,895 | $ | 695,827 | $ | 530,409 | |||||||||
| Noninterest-bearing demand deposits | $ | 161,783 | $ | 157,070 | $ | 149,178 | $ | 147,790 | $ | 109,927 | |||||||||
| Savings and interest-bearing demand deposits | 334,599 | 328,945 | 318,510 | 322,239 | 231,885 | ||||||||||||||
| Time deposits | 136,736 | 141,101 | 146,219 | 150,853 | 96,974 | ||||||||||||||
| Total deposits | $ | 633,118 | $ | 627,116 | $ | 613,907 | $ | 620,882 | $ | 438,786 | |||||||||
| Federal funds purchased | - | - | - | - | 1,955 | ||||||||||||||
| Other borrowings | - | - | 7 | 13 | 15,020 | ||||||||||||||
| Subordinated debt | 4,917 | 4,913 | - | - | - | ||||||||||||||
| Junior subordinated debt | 9,279 | 9,279 | 9,279 | 9,279 | 9,279 | ||||||||||||||
| Accrued interest payable and other liabilities | 6,029 | 5,060 | 5,303 | 6,214 | 5,057 | ||||||||||||||
| Total liabilities | $ | 653,343 | $ | 646,368 | $ | 628,496 | $ | 636,388 | $ | 470,097 | |||||||||
| FIRST NATIONAL CORPORATION | ||||||||||||||||||||||||||
| Quarterly Performance Summary | ||||||||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||||||||
| Balance Sheet (continued) | ||||||||||||||||||||||||||
| Preferred stock | $ | - | $ | - | $ | 14,595 | $ | 14,595 | $ | 14,595 | ||||||||||||||||
| Common stock | 6,156 | 6,145 | 6,141 | 6,139 | 6,137 | |||||||||||||||||||||
| Surplus | 6,996 | 6,956 | 6,922 | 6,899 | 6,881 | |||||||||||||||||||||
| Retained earnings | 35,391 | 34,440 | 33,917 | 33,642 | 33,649 | |||||||||||||||||||||
| Accumulated other comprehensive loss, net | (843 | ) | (1,588 | ) | (1,176 | ) | (1,836 | ) | (950 | ) | ||||||||||||||||
| Total shareholders’ equity | $ | 47,700 | $ | 45,953 | $ | 60,399 | $ | 59,439 | $ | 60,312 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 701,043 | $ | 692,321 | $ | 688,895 | $ | 695,827 | $ | 530,409 | ||||||||||||||||
| Loan Data | ||||||||||||||||||||||||||
| Mortgage loans on real estate: | ||||||||||||||||||||||||||
| Construction and land development | $ | 31,505 | $ | 33,135 | $ | 29,935 | $ | 32,009 | $ | 33,344 | ||||||||||||||||
| Secured by farm land | 931 | 964 | 984 | 1,025 | 1,067 | |||||||||||||||||||||
| Secured by 1-4 family residential | 196,165 | 189,286 | 179,419 | 173,265 | 172,874 | |||||||||||||||||||||
| Other real estate loans | 190,375 | 180,483 | 164,677 | 154,371 | 157,829 | |||||||||||||||||||||
| Loans to farmers (except those secured by real estate) | 473 | 3,056 | 3,014 | 2,645 | 2,760 | |||||||||||||||||||||
| Commercial and industrial loans (except those secured by real estate) | 23,742 | 20,992 | 16,936 | 16,674 | 18,660 | |||||||||||||||||||||
| Consumer installment loans | 3,854 | 4,055 | 4,165 | 4,341 | 4,713 | |||||||||||||||||||||
| Deposit overdrafts | 312 | 257 | 421 | 419 | 194 | |||||||||||||||||||||
| All other loans | 6,719 | 6,771 | 6,862 | 6,972 | 7,076 | |||||||||||||||||||||
| Total loans | $ | 454,076 | $ | 438,999 | $ | 406,413 | $ | 391,721 | $ | 398,517 | ||||||||||||||||
| Allowance for loan losses | (5,520 | ) | (5,524 | ) | (5,575 | ) | (6,129 | ) | (6,771 | ) | ||||||||||||||||
| Loans, net | $ | 448,556 | $ | 433,475 | $ | 400,838 | $ | 385,592 | $ | 391,746 | ||||||||||||||||
| Reconciliation of Tax-Equivalent Net Interest Income | ||||||||||||||||||||||||||
| GAAP measures: | ||||||||||||||||||||||||||
| Interest income – loans | $ | 5,236 | $ | 5,056 | $ | 4,854 | $ | 4,688 | $ | 4,540 | ||||||||||||||||
| Interest income – investments and other | 955 | 965 | 910 | 704 | 448 | |||||||||||||||||||||
| Interest expense – deposits | (333 | ) | (302 | ) | (282 | ) | (266 | ) | (300 | ) | ||||||||||||||||
| Interest expense – other borrowings | (5 | ) | - | - | (2 | ) | (1 | ) | ||||||||||||||||||
| Interest expense – subordinated debt | (90 | ) | (62 | ) | - | - | - | |||||||||||||||||||
| Interest expense – junior subordinated debt | (61 | ) | (59 | ) | (56 | ) | (55 | ) | (54 | ) | ||||||||||||||||
| Interest expense – other | (3 | ) | - | - | (1 | ) | (1 | ) | ||||||||||||||||||
| Total net interest income | $ | 5,699 | $ | 5,598 | $ | 5,426 | $ | 5,068 | $ | 4,632 | ||||||||||||||||
| Non-GAAP measures: | ||||||||||||||||||||||||||
| Tax benefit realized on non-taxable interest income – loans | $ | 25 | $ | 26 | $ | 26 | $ | 27 | $ | 26 | ||||||||||||||||
| Tax benefit realized on non-taxable interest income – municipal securities | 76 | 71 | 60 | 40 | 33 | |||||||||||||||||||||
| Total tax benefit realized on non-taxable interest income | $ | 101 | $ | 97 | $ | 86 | $ | 67 | $ | 59 | ||||||||||||||||
| Total tax-equivalent net interest income | $ | 5,800 | $ | 5,695 | $ | 5,512 | $ | 5,135 | $ | 4,691 | ||||||||||||||||
(1) The efficiency ratio is computed by dividing noninterest expense excluding other real estate owned income/expense, amortization of intangibles, acquisition and integration related expenses, and gains and losses on disposal of premises and equipment by the sum of net interest income on a tax-equivalent basis and noninterest income, excluding gains and losses on sales of securities and bargain purchase gain. Tax-equivalent net interest income is calculated by adding the tax benefit realized from interest income that is nontaxable to total interest income then subtracting total interest expense. The tax rate utilized in calculating the tax benefit is 34%. See the table above for the quarterly tax-equivalent net interest income and a reconciliation of net interest income to tax-equivalent net interest income. The efficiency ratio is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency. Such information is not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and should not be construed as such. Management believes, however, such financial information is meaningful to the reader in understanding operational performance, but cautions that such information not be viewed as a substitute for GAAP.
(2) All capital ratios reported are for the Bank.