The Company’s first quarter 2026 operating results reflected the following changes from the fourth quarter of 2025: (1) loan growth of
Book value per share improved to
“Loan and deposit growth held strong even during the seasonal low point of our year with loans expanding at an annualized rate of 5.3% from the linked quarter. Mortgage and government guaranteed lending activities were a bright spot during the quarter and expenses were well-managed. Loan pipelines remain solid entering April as we approach balance sheet repricing in the back half of the year. There was no share buyback activity in the quarter, although 113 thousand shares remained under the current buyback authorization. Our capital position remained strong with TCE of 8.9% to support organic growth, dividends, share buybacks and M&A activity,” stated
- Quarterly earnings were
$3.8 million , or$0.39 per diluted share for the quarter endedMarch 31, 2026 , a decrease compared to earnings of$4.3 million , or$0.44 per diluted share for the quarter endedDecember 31, 2025 , and an increase from$3.2 million , or$0.32 per diluted share for the quarter endedMarch 31, 2025 . - Pre-provision net revenue (“PPNR”) increased 5.8% during the quarter ended
March 31, 2026 , to$5.38 million from$5.09 million for the quarter endedDecember 31, 2025 , and increased 44.5% from$3.72 million over the past year. - Net interest income decreased
$0.1 million to$13.0 million for the quarter endedMarch 31, 2026 , from$13.1 million for the quarter endedDecember 31, 2025 , and increased from$11.6 million for the quarter endedMarch 31, 2025 . The decrease in net interest income from the fourth quarter of 2025 was primarily due to a net decrease of$0.25 million due to the impact of 2 fewer business days. Partially offsetting the fewer days was the impact of higher loan yields, lower deposit costs, and a decrease in interest-bearing cash yield. - Net interest margin increased 3 basis points to 3.18% for the quarter ended
March 31, 2026 , compared to the quarter endedDecember 31, 2025 , and increased 33 basis points from the quarter endedMarch 31, 2025 . The increase in net interest margin from the prior quarter was due to higher loan yields and lower deposit costs, partially offset by lower yields on cash and investment securities and the growth of lower yielding interest-bearing cash. - The provision for credit losses was
$0.75 million for the quarter endedMarch 31, 2026 , compared to a provision for credit losses of$0.20 million for the fourth quarter of 2025, and a negative provision for credit losses of$0.25 million during the quarter endedMarch 31, 2025 . Factors affecting theMarch 31, 2026 , provision for credit losses include: (1) a net increase of$0.4 million due to increases in reserves on impaired loans, partially offset by lower loss rates on collectively evaluated loans; (2) modest charge-offs of$0.2 million ; (3) an increase in economic scenarios based on information provided by our third-party model provider of$0.1 million ; and (4) the net impact of new loan growth, net of a decrease in the portfolio duration of$0.05 million . The allowance for credit losses on loans increased to$23.0 million or 132% of total nonperforming loans and 1.69% of total loans. - Non-interest income increased by
$0.4 million in the first quarter of 2026 to$3.1 million from$2.7 million in the prior quarter and increased$0.5 million from$2.6 million in the first quarter of 2025. The increase in the first quarter of 2026 from the fourth quarter of 2025 was primarily due to higher gains on sale of loans due in part to the backlog of SBA loans unable to be sold during the fourth quarter of 2025 due to the government shutdown and sold in the first quarter. The increase of non-interest income in the first quarter of 2026, from the first quarter of 2025, was primarily due to higher gains on the sale of loans. - Non-interest expense increased
$55 thousand from the previous quarter and increased$0.2 million from$10.5 million for the first quarter of 2025. The slight increase in non-interest expense compared to the linked quarter was largely due to higher compensation items reflecting higher benefit costs and professional fees. The$0.2 million increase from the first quarter of 2025 was largely due to higher compensation and benefit expenses, partially offset by lower data processing. - The effective tax rate was 18.9% for the quarter ended
March 31, 2026 , compared to 12.6% for the quarter endedDecember 31, 2025 , and 19.6% for the quarter endedMarch 31, 2025 . The increase in the effective tax rate in the first quarter of 2026 from the fourth quarter of 2025 was largely due to the full year benefit of a new tax credit investment recognized in the fourth quarter of 2025, based on the vast majority of 2025 funding of the tax credit occurring in the fourth quarter. The lower effective tax rate in the quarter endedMarch 31, 2026 compared to one year earlier reflects the benefit of the purchased tax credit investment. - Loans receivable increased
$17.9 million during the first quarter endedMarch 31, 2026 , to$1.358 billion compared to the prior quarter end. The increase was largely due to growth in new C&I loan originations, commercial real estate and construction fundings partially offset by planned runoff of the residential portfolio from the fourth quarter. - Nonperforming assets reflected in government guaranteed and non-guaranteed loans offset by repayments on existing nonperforming loans, resulted in a total increase in nonperforming assets of
$1.5 million to$18.2 million atMarch 31, 2026 , compared to$16.7 million atDecember 31, 2025 . The government guaranteed portion of nonperforming assets increased$1.4 million to$2.4 million atMarch 31, 2026 . The non-guaranteed portion of the loans originated with partial government guarantees increased$0.6 million to$1.5 million atMarch 31, 2026 . There are specific reserves of approximately 50% on the non-guaranteed government loans. - Special mention loans increased
$1.4 million to$25.9 million atMarch 31, 2026 , fromDecember 31, 2025 . - Substandard loans increased
$1.1 million to$22.5 million atMarch 31, 2026 , fromDecember 31, 2025 , largely due to$1.4 million increase on fully guaranteed government secured non-performing loans. - Total deposits increased
$41.5 million during the quarter endedMarch 31, 2026 , to$1.566 billion . This was largely due to seasonal growth in public deposits of$29.6 million and the addition of commercial non-interest bearing deposits totaling$15.7 million received late in the first quarter that were expectedly withdrawn after the quarter ended. - The efficiency ratio was 66% for the quarter ended
March 31, 2026 , compared to 68% for the quarter endedDecember 31, 2025 and 73% for the quarter endedMarch 31, 2025 . - On
April 24, 2026 , the Board of Directors approved a quarterly dividend of$0.105 per share. The dividend will be payable onMay 22, 2026 , to shareholders of record onMay 8, 2026 . - The Company did not repurchase any shares during the quarter ended
March 31, 2026 . Approximately 113 thousand shares remained available to purchase under the current authorization as ofMarch 31, 2026 .
Balance Sheet and Asset Quality
Total assets increased by
Cash and cash equivalents increased
The on-balance sheet liquidity ratio, which is defined as the fair market value of available-for-sale (“AFS”) and held-to-maturity (“HTM”) securities that are not pledged and cash on deposit with other financial institutions, was 16.2% of total assets at
AFS securities decreased
HTM securities decreased
Loans receivable increased
The office loan portfolio consisted of seventy loans totaling
The allowance for credit losses on loans increased by
Allowance for Credit Losses (“ACL”) – Loans Percentage
(in thousands, except ratios)
| Loans, end of period | $ | 1,358,252 | $ | 1,340,325 | $ | 1,323,010 | $ | 1,345,620 | ||||||||
| ACL – Loans | $ | 22,966 | $ | 22,401 | $ | 22,182 | $ | 21,347 | ||||||||
| ACL – Loans as a percentage of loans, end of period | 1.69 | % | 1.67 | % | 1.68 | % | 1.59 | % | ||||||||
In addition to the ACL – Loans, the Company has established an ACL - Unfunded Commitments of
Allowance for Credit Losses – Unfunded Commitments
(in thousands)
| ACL – Unfunded commitments, beginning of period | $ | 490 | $ | 493 | $ | 334 | ||||||
| Additions (reversals) to ACL – Unfunded commitments via provision for credit losses charged to operations | (8 | ) | (3 | ) | 101 | |||||||
| ACL – Unfunded commitments, end of period | $ | 482 | $ | 490 | $ | 435 | ||||||
Nonperforming assets reflected in government guaranteed and non-guaranteed loans offset by repayments on existing nonperforming loans, resulted in a total increase in nonperforming assets of
Special mention loans increased
Substandard loans increased
| (in thousands) | ||||||||||||||||||||
| Special mention loan balances | $ | 25,894 | $ | 24,473 | $ | 12,920 | $ | 23,201 | $ | 14,990 | ||||||||||
| Substandard loan balances | 22,498 | 21,388 | 21,310 | 17,922 | 19,591 | |||||||||||||||
| Criticized loans, end of period | $ | 48,392 | $ | 45,861 | $ | 34,230 | $ | 41,123 | $ | 34,581 | ||||||||||
Deposit Portfolio Composition
(in thousands)
2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||
| Consumer deposits | $ | 887,998 | $ | 889,109 | $ | 855,226 | $ | 856,467 | $ | 861,746 | ||||||||||
| Commercial deposits | 433,923 | 422,605 | 423,662 | 406,608 | 423,654 | |||||||||||||||
| Public deposits | 217,400 | 187,777 | 175,689 | 190,933 | 211,261 | |||||||||||||||
| Wholesale deposits | 26,301 | 24,608 | 25,977 | 24,408 | 26,993 | |||||||||||||||
| Total deposits | $ | 1,565,622 | $ | 1,524,099 | $ | 1,480,554 | $ | 1,478,416 | $ | 1,523,654 | ||||||||||
At
Deposit Composition By Type
(in thousands)
2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||
| Non-interest-bearing demand deposits | $ | 271,396 | $ | 264,394 | $ | 262,535 | $ | 260,248 | $ | 253,343 | ||||||||||
| Interest-bearing demand deposits | 392,684 | 367,958 | 360,475 | 366,481 | 386,302 | |||||||||||||||
| Savings accounts | 152,487 | 151,525 | 157,317 | 159,340 | 167,614 | |||||||||||||||
| Money market accounts | 404,991 | 392,900 | 354,290 | 357,518 | 370,741 | |||||||||||||||
| Certificate accounts | 344,064 | 347,322 | 345,937 | 334,829 | 345,654 | |||||||||||||||
| Total deposits | $ | 1,565,622 | $ | 1,524,099 | $ | 1,480,554 | $ | 1,478,416 | $ | 1,523,654 | ||||||||||
Uninsured and uncollateralized deposits were
The Company did not repurchase any shares during the quarter ended
Review of Operations
Net interest income decreased
Net Interest Income and Net Interest Margin Analysis
(in thousands, except yields and rates)
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | ||||||||||||||||||||||||||
| As reported | $ | 13,010 | 3.18 | % | $ | 13,065 | 3.15 | % | $ | 13,214 | 3.20 | % | $ | 13,311 | 3.27 | % | $ | 11,594 | 2.85 | % | |||||||||||||||
| Less scheduled accretion for PCD loans | 6 | — | % | (5 | ) | — | % | (17 | ) | — | % | (23 | ) | (0.01 | )% | (36 | ) | (0.01 | )% | ||||||||||||||||
| Less paid loan accretion for PCD loans | — | — | % | — | — | % | (133 | ) | (0.03 | )% | (416 | ) | (0.10 | )% | — | — | % | ||||||||||||||||||
| Less scheduled accretion interest | — | — | % | — | — | % | (30 | ) | (0.01 | )% | (33 | ) | (0.01 | )% | (33 | ) | (0.01 | )% | |||||||||||||||||
| Without loan purchase accretion | $ | 13,016 | 3.18 | % | $ | 13,060 | 3.15 | % | $ | 13,034 | 3.16 | % | $ | 12,839 | 3.15 | % | $ | 11,525 | 2.83 | % | |||||||||||||||
The table below shows the impact of loans, securities, and certificates contractual fixed rate maturing and repricing.
Portfolio Contractual Repricing
(in millions, except yields)
| Q2 2026 | Q3 2026 | Q4 2026 | Q1 2027 | Q2 2027 | Q3 2027 | Q4 2027 | ||||||||||||||||||||||
| Maturing or Repricing Loans: | ||||||||||||||||||||||||||||
| Contractual balance | $ | 46 | $ | 110 | $ | 97 | $ | 56 | $ | 65 | $ | 43 | $ | 68 | ||||||||||||||
| Contractual interest rate | 4.98 | % | 3.74 | % | 3.97 | % | 4.15 | % | 4.47 | % | 4.96 | % | 5.36 | % | ||||||||||||||
| Maturing or | ||||||||||||||||||||||||||||
| Contractual balance | $ | 7 | $ | 7 | $ | 3 | $ | 3 | $ | — | $ | 4 | $ | — | ||||||||||||||
| Contractual interest rate | 3.57 | % | 3.44 | % | 3.27 | % | 3.31 | % | — | % | 5.93 | % | — | % | ||||||||||||||
| Maturing Certificate Accounts: | ||||||||||||||||||||||||||||
| Contractual balance | $ | 99 | $ | 137 | $ | 52 | $ | 45 | $ | 8 | $ | — | $ | — | ||||||||||||||
| Contractual interest rate | 3.84 | % | 3.77 | % | 3.74 | % | 3.56 | % | 3.44 | % | 2.39 | % | 1.71 | % | ||||||||||||||
Non-interest income increased by
Non-interest expense increased
Provision for income taxes was
Certain items previously reported may be reclassified for consistency with the current presentation. These financial results are preliminary until the Form 10-Q is filed in
About the Company
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this release are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified using forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “estimates,” “intend,” “may,” “on pace,” “preliminary,” “planned,” “potential,” “should,” “will,” “would” or the negative of those terms or other words of similar meaning. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Such forward-looking statements in this release are inherently subject to many uncertainties arising in the operations and business environment of the Company and the Bank. These uncertainties include: conditions in the financial markets and economic conditions generally; the impact of inflation on our business and our customers; geopolitical tensions, including current or anticipated impact of military conflicts; higher lending risks associated with our commercial and agricultural banking activities; future pandemics; cybersecurity risks; adverse impacts on the regional banking industry and the business environment in which the Company and the Bank operate; interest rate risk; lending risk; changes in the fair value or ratings downgrades of our securities; the sufficiency of allowance for credit losses; competitive pressures from others in the financial services industry, including non-depository institutions; disintermediation risk (including the use of emerging financial technologies such as cryptocurrencies); our ability to maintain our reputation; our ability to maintain or increase our market share; our ability to realize the benefits of net deferred tax assets; our ability to obtain needed liquidity; our ability to raise capital needed to fund growth or meet regulatory requirements; our ability to attract and retain key personnel; our ability to keep pace with technological change; prevalence of fraud and other financial crimes; the possibility that our internal controls and procedures could fail or be circumvented; our ability to successfully execute our acquisition growth strategy; risks posed by acquisitions and other expansion opportunities, including difficulties and delays in integrating acquired business operations or fully realizing the cost savings and other benefits; restrictions on our ability to pay dividends; volatility of our stock price (including possible removal from the Russell 3000® Index and related indexes); accounting standards for credit losses; legislative or regulatory changes or actions, or significant litigation, adversely affecting the Company or Bank; public company reporting obligations; changes in federal or state tax laws; and changes in accounting principles, policies or guidelines and their impact on financial performance. Stockholders, potential investors, and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Such uncertainties and other risks that may affect the Company’s performance are discussed further in Part I, Item 1A, “Risk Factors,” in the Company’s Form 10-K, for the year ended
1 Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, such as tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets and return on average tangible common equity, which management believes may be helpful in understanding the Company’s results of operations or financial position and comparing results over different periods.
Tangible book value, tangible book value per share, tangible common equity as a percentage of tangible assets and return on average tangible common equity are non-GAAP measures that eliminate the impact of goodwill and intangible assets on our financial position. Management believes these measures are useful in assessing the strength of our financial position.
Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks and financial institutions.
Contact:
(715)-836-9994
(CZWI-ER)
Consolidated Balance Sheets (in thousands, except share data) | ||||||||||||||||
| Assets | ||||||||||||||||
| Cash and cash equivalents | $ | 149,202 | $ | 118,853 | $ | 82,431 | $ | 100,199 | ||||||||
| Securities available for sale (“AFS”) | 130,876 | 134,103 | 137,639 | 139,642 | ||||||||||||
| Securities held to maturity (“HTM”) | 79,014 | 80,210 | 81,526 | 84,301 | ||||||||||||
| Equity investments | 5,978 | 5,840 | 5,675 | 5,462 | ||||||||||||
| Other investments | 12,498 | 12,506 | 12,370 | 12,496 | ||||||||||||
| Loans receivable | 1,358,252 | 1,340,325 | 1,323,010 | 1,352,728 | ||||||||||||
| Allowance for credit losses | (22,966 | ) | (22,401 | ) | (22,182 | ) | (20,205 | ) | ||||||||
| Loans receivable, net | 1,335,286 | 1,317,924 | 1,300,828 | 1,332,523 | ||||||||||||
| Loans held for sale | 654 | 4,954 | 5,346 | 3,296 | ||||||||||||
| Mortgage servicing rights, net | 3,484 | 3,494 | 3,532 | 3,583 | ||||||||||||
| Office properties and equipment, net | 16,453 | 16,357 | 16,244 | 16,649 | ||||||||||||
| Accrued interest receivable | 5,827 | 6,126 | 6,159 | 5,926 | ||||||||||||
| Intangible assets | 282 | 395 | 508 | 800 | ||||||||||||
| 31,498 | 31,498 | 31,498 | 31,498 | |||||||||||||
| Foreclosed and repossessed assets, net | 857 | 857 | 911 | 876 | ||||||||||||
| Bank owned life insurance (“BOLI”) | 27,128 | 26,908 | 26,700 | 26,296 | ||||||||||||
| Other assets | 23,937 | 21,730 | 15,620 | 16,416 | ||||||||||||
| TOTAL ASSETS | $ | 1,822,974 | $ | 1,781,755 | $ | 1,726,987 | $ | 1,779,963 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Deposits | $ | 1,565,622 | $ | 1,524,099 | $ | 1,480,554 | $ | 1,523,654 | ||||||||
| — | — | — | — | |||||||||||||
| Other borrowings | 51,844 | 51,804 | 46,762 | 61,664 | ||||||||||||
| Other liabilities | 14,634 | 17,913 | 12,856 | 14,594 | ||||||||||||
| Total liabilities | 1,632,100 | 1,593,816 | 1,540,172 | 1,599,912 | ||||||||||||
| Stockholders’ Equity: | ||||||||||||||||
| Common stock—$0.01 par value, authorized 30,000,000; 9,628,612, 9,617,245, 9,856,745, and 9,989,536 shares issued and outstanding, respectively | 96 | 96 | 99 | 100 | ||||||||||||
| Additional paid-in capital | 110,277 | 110,315 | 113,030 | 114,477 | ||||||||||||
| Retained earnings | 92,739 | 89,995 | 86,913 | 80,439 | ||||||||||||
| Accumulated other comprehensive loss | (12,238 | ) | (12,467 | ) | (13,227 | ) | (14,965 | ) | ||||||||
| Total stockholders’ equity | 190,874 | 187,939 | 186,815 | 180,051 | ||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,822,974 | $ | 1,781,755 | $ | 1,726,987 | $ | 1,779,963 | ||||||||
Consolidated Statements of Operations (in thousands, except per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
| Interest and dividend income: | ||||||||||||
| Interest and fees on loans | $ | 18,769 | $ | 19,034 | $ | 18,602 | ||||||
| Interest on cash and investments | 2,747 | 2,737 | 2,501 | |||||||||
| Total interest and dividend income | 21,516 | 21,771 | 21,103 | |||||||||
| Interest expense: | ||||||||||||
| Interest on deposits | 7,791 | 7,998 | 8,597 | |||||||||
| Interest on FHLB borrowed funds | — | — | 11 | |||||||||
| Interest on other borrowed funds | 715 | 708 | 901 | |||||||||
| Total interest expense | 8,506 | 8,706 | 9,509 | |||||||||
| Net interest income before provision for credit losses | 13,010 | 13,065 | 11,594 | |||||||||
| Provision (provision reversal) for credit losses | 750 | 200 | (250 | ) | ||||||||
| Net interest income after provision for credit losses | 12,260 | 12,865 | 11,844 | |||||||||
| Non-interest income: | ||||||||||||
| Service charges on deposit accounts | 460 | 459 | 423 | |||||||||
| Interchange income | 501 | 539 | 518 | |||||||||
| Loan servicing income | 661 | 593 | 559 | |||||||||
| Gain on sale of loans | 1,021 | 514 | 720 | |||||||||
| Loan fees and service charges | 138 | 146 | 120 | |||||||||
| Net (losses) gains on equity securities | (59 | ) | 191 | 10 | ||||||||
| Other | 377 | 250 | 243 | |||||||||
| Total non-interest income | 3,099 | 2,692 | 2,593 | |||||||||
| Non-interest expense: | ||||||||||||
| Compensation and related benefits | 6,066 | 5,929 | 5,597 | |||||||||
| Occupancy | 1,278 | 1,226 | 1,287 | |||||||||
| Data processing | 1,417 | 1,492 | 1,719 | |||||||||
| Amortization of intangible assets | 113 | 113 | 179 | |||||||||
| Mortgage servicing rights expense, net | 161 | 172 | 140 | |||||||||
| Advertising, marketing and public relations | 226 | 344 | 167 | |||||||||
| 231 | 189 | 198 | ||||||||||
| Professional services | 605 | 478 | 508 | |||||||||
| Losses on repossessed assets, net | — | 33 | 4 | |||||||||
| Other | 630 | 696 | 664 | |||||||||
| Total non-interest expense | 10,727 | 10,672 | 10,463 | |||||||||
| Income before provision for income taxes | 4,632 | 4,885 | 3,974 | |||||||||
| Provision for income taxes | 877 | 614 | 777 | |||||||||
| Net income attributable to common stockholders | $ | 3,755 | $ | 4,271 | $ | 3,197 | ||||||
| Per share information: | ||||||||||||
| Basic earnings | $ | 0.39 | $ | 0.44 | $ | 0.32 | ||||||
| Diluted earnings | $ | 0.39 | $ | 0.44 | $ | 0.32 | ||||||
| Cash dividends paid | $ | 0.105 | $ | — | $ | 0.36 | ||||||
| Book value per share at end of period | $ | 19.82 | $ | 19.54 | $ | 18.02 | ||||||
| Tangible book value per share at end of period (non-GAAP) | $ | 16.52 | $ | 16.23 | $ | 14.79 | ||||||
Loan Composition
(in thousands)
| Total Loans: | ||||||||||||||||
| Commercial/Agricultural real estate: | ||||||||||||||||
| Commercial real estate | $ | 697,785 | $ | 683,108 | $ | 683,931 | $ | 693,382 | ||||||||
| Agricultural real estate | 69,706 | 69,136 | 64,096 | 69,237 | ||||||||||||
| Multi-family real estate | 241,221 | 245,688 | 237,191 | 238,953 | ||||||||||||
| Construction and land development | 83,213 | 75,767 | 74,789 | 70,477 | ||||||||||||
| C&I/Agricultural operating: | ||||||||||||||||
| Commercial and industrial | 114,379 | 105,907 | 101,700 | 109,202 | ||||||||||||
| Agricultural operating | 29,032 | 33,375 | 30,085 | 31,876 | ||||||||||||
| Residential mortgage: | ||||||||||||||||
| Residential mortgage | 117,586 | 122,025 | 125,198 | 125,818 | ||||||||||||
| Purchased HELOC loans | 1,551 | 1,739 | 1,979 | 2,368 | ||||||||||||
| Consumer installment: | ||||||||||||||||
| Originated indirect paper | 1,902 | 2,224 | 2,567 | 2,959 | ||||||||||||
| Other consumer | 4,633 | 3,997 | 4,155 | 4,275 | ||||||||||||
| Gross loans | $ | 1,361,008 | $ | 1,342,966 | $ | 1,325,691 | $ | 1,348,547 | ||||||||
| Unearned net deferred fees and costs and loans in process | (2,638 | ) | (2,528 | ) | (2,563 | ) | (2,629 | ) | ||||||||
| Unamortized discount on acquired loans | (118 | ) | (113 | ) | (118 | ) | (298 | ) | ||||||||
| Total loans receivable | $ | 1,358,252 | $ | 1,340,325 | $ | 1,323,010 | $ | 1,345,620 | ||||||||
Nonperforming Assets
Loan balances at amortized cost
(in thousands, except ratios)
| Nonperforming Assets: | ||||||||||||||||
| Nonaccrual loans | ||||||||||||||||
| Commercial real estate | $ | 5,899 | $ | 4,652 | $ | 4,592 | $ | 5,013 | ||||||||
| Agricultural real estate | 461 | 464 | 220 | 5,447 | ||||||||||||
| Multi-family real estate | 8,970 | 8,970 | 8,970 | — | ||||||||||||
| Construction and land development | — | — | — | — | ||||||||||||
| Commercial and industrial (“C&I”) | 1,517 | 1,282 | 1,312 | 600 | ||||||||||||
| Agricultural operating | — | — | — | — | ||||||||||||
| Residential mortgage | 339 | 485 | 520 | 549 | ||||||||||||
| Consumer installment | 117 | — | — | — | ||||||||||||
| Total nonaccrual loans | $ | 17,303 | $ | 15,853 | $ | 15,614 | $ | 11,609 | ||||||||
| Accruing loans past due 90 days or more | 39 | 1 | 136 | 521 | ||||||||||||
| Total nonperforming loans (“NPLs”) at amortized cost | 17,342 | 15,854 | 15,750 | 12,130 | ||||||||||||
| Foreclosed and repossessed assets, net | 857 | 857 | 911 | 895 | ||||||||||||
| Total nonperforming assets (“NPAs”) | $ | 18,199 | $ | 16,711 | $ | 16,661 | $ | 13,025 | ||||||||
| Loans, end of period | $ | 1,358,252 | $ | 1,340,325 | $ | 1,323,010 | $ | 1,345,620 | ||||||||
| Total assets, end of period | $ | 1,822,974 | $ | 1,781,755 | $ | 1,726,987 | $ | 1,735,164 | ||||||||
| Ratios: | ||||||||||||||||
| NPLs to total loans | 1.28 | % | 1.18 | % | 1.19 | % | 0.90 | % | ||||||||
| NPAs to total assets | 1.00 | % | 0.94 | % | 0.96 | % | 0.75 | % | ||||||||
Average Balances, Interest Yields and Rates
(in thousands, except yields and rates)
| Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | |||||||||||||||||||||||||
| Average interest earning assets: | |||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 105,651 | $ | 961 | 3.69 | % | $ | 84,678 | $ | 842 | 3.94 | % | $ | 47,835 | $ | 524 | 4.44 | % | |||||||||||||||
| Loans receivable | 1,328,448 | 18,769 | 5.73 | % | 1,329,456 | 19,034 | 5.68 | % | 1,363,352 | 18,602 | 5.53 | % | |||||||||||||||||||||
| Investment securities | 214,412 | 1,630 | 3.08 | % | 218,205 | 1,739 | 3.16 | % | 228,514 | 1,808 | 3.21 | % | |||||||||||||||||||||
| Other investments | 12,503 | 156 | 5.06 | % | 12,390 | 156 | 5.00 | % | 12,498 | 169 | 5.48 | % | |||||||||||||||||||||
| Total interest earning assets | $ | 1,661,014 | $ | 21,516 | 5.25 | % | $ | 1,644,729 | $ | 21,771 | 5.25 | % | $ | 1,652,199 | $ | 21,103 | 5.18 | % | |||||||||||||||
| Average interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| Savings accounts | $ | 152,304 | $ | 309 | 0.82 | % | $ | 152,852 | $ | 287 | 0.74 | % | $ | 167,001 | $ | 407 | 0.99 | % | |||||||||||||||
| Demand deposits | 376,998 | 1,768 | 1.90 | % | 360,867 | 1,797 | 1.98 | % | 382,355 | 2,033 | 2.16 | % | |||||||||||||||||||||
| Money market accounts | 393,958 | 2,508 | 2.58 | % | 372,984 | 2,514 | 2.67 | % | 365,528 | 2,535 | 2.81 | % | |||||||||||||||||||||
| CD’s | 344,493 | 3,206 | 3.77 | % | 346,975 | 3,400 | 3.89 | % | 343,751 | 3,622 | 4.27 | % | |||||||||||||||||||||
| Total deposits | $ | 1,267,753 | $ | 7,791 | 2.49 | % | $ | 1,233,678 | $ | 7,998 | 2.57 | % | $ | 1,258,635 | $ | 8,597 | 2.77 | % | |||||||||||||||
| FHLB advances and other borrowings | 51,824 | 715 | 5.60 | % | 50,941 | 708 | 5.51 | % | 64,635 | 912 | 5.72 | % | |||||||||||||||||||||
| Total interest-bearing liabilities | $ | 1,319,577 | $ | 8,506 | 2.61 | % | $ | 1,284,619 | $ | 8,706 | 2.69 | % | $ | 1,323,270 | $ | 9,509 | 2.91 | % | |||||||||||||||
| Net interest income | $ | 13,010 | $ | 13,065 | $ | 11,594 | |||||||||||||||||||||||||||
| Interest rate spread | 2.64 | % | 2.56 | % | 2.27 | % | |||||||||||||||||||||||||||
| Net interest margin | 3.18 | % | 3.15 | % | 2.85 | % | |||||||||||||||||||||||||||
| Average interest earning assets to average interest-bearing liabilities | 1.26 | 1.28 | 1.25 | ||||||||||||||||||||||||||||||
Wholesale Deposits
(in thousands)
| Quarter Ended | ||||||||||||||||||||
| Brokered certificate accounts | $ | — | $ | — | $ | — | $ | — | $ | 5,489 | ||||||||||
| Brokered money market accounts | 5,495 | 5,168 | 5,131 | 5,092 | 5,053 | |||||||||||||||
| Third party originated reciprocal deposits | 20,806 | 19,440 | 20,846 | 19,316 | 16,451 | |||||||||||||||
| Total wholesale deposits | $ | 26,301 | $ | 24,608 | $ | 25,977 | $ | 24,408 | $ | 26,993 | ||||||||||
Key Financial Metric Ratios:
| Three Months Ended | |||||||||
| Ratios based on net income: | |||||||||
| Return on average assets (annualized) | 0.85 | % | 0.97 | % | 0.74 | % | |||
| Return on average equity (annualized) | 8.04 | % | 9.05 | % | 7.26 | % | |||
| Return on average tangible common equity 1 (annualized) | 9.90 | % | 11.16 | % | 9.28 | % | |||
| Efficiency ratio | 66 | % | 68 | % | 73 | % | |||
| Net interest margin with loan purchase accretion | 3.18 | % | 3.15 | % | 2.85 | % | |||
| Net interest margin without loan purchase accretion | 3.18 | % | 3.15 | % | 2.83 | % | |||
Reconciliation of Return on Average Assets
(in thousands, except ratios)
| Three Months Ended | ||||||||||||
| GAAP earnings after income taxes | $ | 3,755 | $ | 4,271 | $ | 3,197 | ||||||
| Average assets | $ | 1,786,218 | $ | 1,751,360 | $ | 1,763,191 | ||||||
| Return on average assets (annualized) | 0.85 | % | 0.97 | % | 0.74 | % | ||||||
Reconciliation of Return on Average Equity
(in thousands, except ratios)
| Three Months Ended | ||||||||||||
| GAAP earnings after income taxes | $ | 3,755 | $ | 4,271 | $ | 3,197 | ||||||
| Average equity | $ | 189,383 | $ | 187,270 | $ | 178,470 | ||||||
| Return on average equity (annualized) | 8.04 | % | 9.05 | % | 7.26 | % | ||||||
Reconciliation of Return on Average Tangible Common Equity (non-GAAP)
(in thousands, except ratios)
| Three Months Ended | ||||||||||||
| Total stockholders’ equity | $ | 190,874 | $ | 187,939 | $ | 180,051 | ||||||
| Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | ||||||
| Less: Intangible assets | (282 | ) | (395 | ) | (800 | ) | ||||||
| Tangible common equity (non-GAAP) | $ | 159,094 | $ | 156,046 | $ | 147,753 | ||||||
| Average tangible common equity (non-GAAP) | $ | 157,546 | $ | 155,320 | $ | 146,083 | ||||||
| GAAP earnings after income taxes | 3,755 | 4,271 | 3,197 | |||||||||
| Amortization of intangible assets, net of tax | 92 | 99 | 144 | |||||||||
| Tangible net income | $ | 3,847 | $ | 4,370 | $ | 3,341 | ||||||
| Return on average tangible common equity (annualized) | 9.90 | % | 11.16 | % | 9.28 | % | ||||||
Reconciliation of Efficiency Ratio
(in thousands, except ratios)
| Three Months Ended | ||||||||||||
| Non-interest expense (GAAP) | $ | 10,727 | $ | 10,672 | $ | 10,463 | ||||||
| Less amortization of intangibles | (113 | ) | (113 | ) | (179 | ) | ||||||
| Efficiency ratio numerator (GAAP) | $ | 10,614 | $ | 10,559 | $ | 10,284 | ||||||
| Non-interest income | $ | 3,099 | $ | 2,692 | $ | 2,593 | ||||||
| Add back net losses on debt and equity securities | (59 | ) | — | — | ||||||||
| Subtract net gains on debt and equity securities | — | 191 | 10 | |||||||||
| Net interest income | 13,010 | 13,065 | 11,594 | |||||||||
| Efficiency ratio denominator (GAAP) | $ | 16,168 | $ | 15,566 | $ | 14,177 | ||||||
| Efficiency ratio (GAAP) | 66 | % | 68 | % | 73 | % | ||||||
Pre-Provision Net Revenue (PPNR)
(in thousands, except yields and rates)
| Pre-tax income | $ | 4,632 | $ | 4,885 | $ | 4,535 | $ | 4,047 | $ | 3,974 | ||||||||||
| Add back provision for credit losses | 750 | 200 | 650 | 1,350 | — | |||||||||||||||
| Subtract provision reversal for credit losses | — | — | — | — | (250 | ) | ||||||||||||||
| Pre-provision net revenue | $ | 5,382 | $ | 5,085 | $ | 5,185 | $ | 5,397 | $ | 3,724 | ||||||||||
Reconciliation of Tangible Book Value Per Share (non-GAAP)
(in thousands, except per share data)
| Tangible book value per share at end of period | ||||||||||||||||||||
| Total stockholders’ equity | $ | 190,874 | $ | 187,939 | $ | 186,815 | $ | 183,462 | $ | 180,051 | ||||||||||
| Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | ||||||||||
| Less: Intangible assets | (282 | ) | (395 | ) | (508 | ) | (621 | ) | (800 | ) | ||||||||||
| Tangible common equity (non-GAAP) | $ | 159,094 | $ | 156,046 | $ | 154,809 | $ | 151,343 | $ | 147,753 | ||||||||||
| Ending common shares outstanding | 9,628,612 | 9,617,245 | 9,856,745 | 9,991,997 | 9,989,536 | |||||||||||||||
| Book value per share | $ | 19.82 | $ | 19.54 | $ | 18.95 | $ | 18.36 | $ | 18.02 | ||||||||||
| Tangible book value per share (non-GAAP) | $ | 16.52 | $ | 16.23 | $ | 15.71 | $ | 15.15 | $ | 14.79 | ||||||||||
Reconciliation of Tangible Common Equity as a Percent of Tangible Assets (non-GAAP)
(in thousands, except ratios)
| Tangible common equity as a percent of tangible assets at end of period | ||||||||||||||||||||
| Total stockholders’ equity | $ | 190,874 | $ | 187,939 | $ | 186,815 | $ | 183,462 | $ | 180,051 | ||||||||||
| Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | ||||||||||
| Less: Intangible assets | (282 | ) | (395 | ) | (508 | ) | (621 | ) | (800 | ) | ||||||||||
| Tangible common equity (non-GAAP) | $ | 159,094 | $ | 156,046 | $ | 154,809 | $ | 151,343 | $ | 147,753 | ||||||||||
| Total assets | $ | 1,822,974 | $ | 1,781,755 | $ | 1,726,987 | $ | 1,735,164 | $ | 1,779,963 | ||||||||||
| Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | ||||||||||
| Less: Intangible assets | (282 | ) | (395 | ) | (508 | ) | (621 | ) | (800 | ) | ||||||||||
| Tangible assets (non-GAAP) | $ | 1,791,194 | $ | 1,749,862 | $ | 1,694,981 | $ | 1,703,045 | $ | 1,747,665 | ||||||||||
| Total stockholders’ equity to total assets ratio | 10.47 | % | 10.55 | % | 10.82 | % | 10.57 | % | 10.12 | % | ||||||||||
| Tangible common equity as a percent of tangible assets (non-GAAP) | 8.88 | % | 8.92 | % | 9.13 | % | 8.89 | % | 8.45 | % | ||||||||||
1Tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets and return on tangible common equity are non-GAAP measures that management believes enhance investors’ ability to understand the Company’s financial position. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial tables “Reconciliation of tangible book value per share (non-GAAP)”, “Reconciliation of tangible common equity as a percent of tangible assets (non-GAAP)”, and “Reconciliation of return on average tangible common equity (non-GAAP)”.
