Codorus Valley Bancorp, Inc. Reports First Quarter 2022
Codorus Valley Bancorp, Inc. Reports Second Quarter 2022

YORK, Pa., July 28, 2022 (GLOBE NEWSWIRE) — Codorus Valley Bancorp, Inc. (Codorus Valley, or the Corporation) (NASDAQ: CVLY), parent company of PeoplesBank, A Codorus Valley Company (PeoplesBank), today announced net income of $2.0 million or $0.20 per diluted share, for the quarter ended June 30, 2022. This compares to a net income of $3.1 million or $0.32 per diluted share for the quarter ended March 31, 2022, representing a decrease of $1.1 million or 36.0 percent and net income of $3.3 million or $0.33 per diluted share, for the quarter ended June 30, 2021. For the first six months of 2022, net income was $5.0 million or $0.52 per diluted share, compared to $7.2 million or $0.73 per diluted share, for the first six months of 2021.

Second quarter financial and operational highlights include:

  • Quarterly net income of $2.0 million compared to net income of $3.3 million in the year-ago quarter and $3.1 million in the linked quarter
  • Quarterly net loan growth at an annualized 12.50 percent pace
  • Linked quarter 39 basis point increase in net interest margin to 3.18 percent
  • Board of Directors declared a cash dividend at $0.15 per share
  • Board of Directors appointed two new Directors at June Board meeting
  • New online small business loan application launched in second quarter 2022

“In the second quarter, our team executed on the strategic plan to improve future performance and increase shareholder value. Our continued focus on growing our core business, improving asset quality, improving the cost of deposits, and implementing processes to improve efficiency gained traction. The Corporation experienced strong loan growth during the quarter and effectively replaced the runoff of SBA PPP loans and the reduction of nonperforming loans. PeoplesBank made the strategic decision to exit two significant nonperforming loans totaling $16.6 million at a net loss of $1.7 million. This led to a higher loan loss provision for the quarter, along with a substantial decline in nonperforming assets. As of June 30, 2022, nonperforming assets to total loans ratio of 1.05 percent compared favorably to 2.22 percent at December 31, 2021 and 2.59 percent at June 30, 2021. The digitalization of our platforms to accelerate growth and reduce operating costs continues, the most notable example is the introduction of our new online business loan,” stated Craig L. Kauffman, President and CEO.

“As part of the Cooperation Agreement (the “Agreement”) with Driver Opportunity Partners I, LP, Driver Management Company LLC, and J. Abbott R. Cooper, the Corporation incurred legal and other operating expenses.  Such expenses totaled $1.5 million within the quarter ending June 30, 2022 and $2.0 million for the six months ending June 30, 2022.  We anticipate that such costs are now materially complete and we will continue to focus on initiatives that will grow the Corporation and increase shareholder value,” added Mr. Kauffman.  

REVIEW OF RESULTS

Balance Sheet

Loans

Loans, which include SBA-backed Paycheck Protection Program loans (SBA PPP loans), increased by $48.1 million from December 31, 2021 to June 30, 2022, or 3.1 percent as the impact of net commercial loan growth outpaced SBA PPP loan forgiveness. Excluding SBA PPP loans, total loans increased by $74.9 million from December 31, 2021 to June 30, 2022, or 10.7 percent annualized. SBA PPP loans, net of deferred fees and costs, declined by $26.8 million to $0.9 million at June 30, 2022 from $27.7 million at December 31, 2021 due to forgiveness activity.

Non-accrual loans decreased by $16.5 million to $17.1 million over the six months ended June 30, 2022 as a result of PeoplesBank’s continued progress in reducing such assets.

Investment Securities

Investment Securities increased by $74.4 million to $330.0 million at June 30, 2022 compared to $255.6 million at December 31, 2021, as the bank purchased mortgage-backed securities, corporate securities and municipal securities, deploying excess liquidity.

Deposits

Deposits decreased by $104.2 million, or 4.9 percent from December 31, 2021 to June 30, 2022, ending the period at $2.0 billion as the Corporation strategically changed the product concentration away from certificates of deposit funding. During the first half of 2022, non-interest bearing demand accounts decreased by $27.2 million or 5.2 percent. Also decreasing during the first half of 2022 were money market accounts by $59.9 million or 8.1 percent and certificates of deposits by $50.4 million or 10.9 percent. Offsetting the decreases was an $18.2 million or 7.0 percent increase in interest bearing checking accounts and a $15.1 million increase or 10.0 percent in savings accounts. The change in deposit mix resulted in a 27 basis point decrease in average interest bearing deposit cost of deposits to 0.26 percent for the quarter ended June 30, 2022, compared to 0.53 percent average interest bearing cost of deposits for the quarter ended June 30, 2021 and a decrease of 1 basis point compared to 0.27 percent in the linked quarter.

Income Statement

The Corporation’s net interest income for the three months ended June 30, 2022 was $17.7 million, an increase of 19.0 percent when compared to $14.9 million for the same period in 2021 and an increase of 13.0 percent when compared to $15.7 million for the linked quarter.  The Corporation’s tax-equivalent net interest margin (NIM) was 3.18 percent for the three months ended June 30, 2022, compared to 2.80 percent for the same period in 2021 and 2.79 percent for the linked quarter. Net interest income for the six months ended June 30, 2022 was $33.4 million, an increase of 10.0 percent when compared to $30.4 million for the same period in 2021. The Corporation’s tax-equivalent NIM was 2.98 percent for the six months ended June 30, 2022, compared to 2.91 percent for the same period in 2021.

The provision for loan losses for the three months ended June 30, 2022 was $3.0 million compared to $0.4 million for the same period in 2021 and $1.0 million for the linked quarter.  The provision increase was primarily the result of the sale of nonperforming assets and the Corporation’s accelerated second quarter net loan growth. The provision for loan losses for the six months ended June 30, 2022 was $4.0 million compared to $1.6 million for the same period in 2021.   The Corporation’s nonperforming assets ratio was 1.05 percent as of June 30, 2022, a 59.5 percent decrease from the nonperforming assets ratio as of June 30, 2021 of 2.59 percent and a 52.7 percent decrease from the nonperforming assets ratio as of December 31, 2021 of 2.22 percent.   

Noninterest income for the second quarter 2022 was $3.9 million, an increase of $560,000 or 16.7 percent, as compared to noninterest income of $3.4 million for the second quarter 2021 and an increase of $49,000 or 1.3 percent as compared to the linked quarter.   The increase in both periods was primarily due to a write down of assets held for sale in the second quarter 2021, offset by lower gains on sales of mortgage loans recognized during the current quarter. Noninterest income for the six months ended June 30, 2022 was $7.8 million, an increase of $11,000, as compared to noninterest income of $7.8 million for the six months ended June 30, 2021.

Noninterest expense was $16.2 million for the second quarter 2022, an increase of $2.4 million or 17.7 percent, as compared to noninterest expense of $13.8 million for the second quarter 2021 and an increase of $1.5 million compared to noninterest expense of $14.7 million for the linked quarter.   Professional and legal expense and other expense were the primary drivers of the increase in the second quarter 2022 compared to the same period in 2021 as expenses related to the “Agreement” were completed. Lower charitable donations in the current quarter were offset by higher other, professional and legal expenses in the linked quarter. Noninterest expense was $30.9 million for the six months ended June 30, 2022, an increase of $3.4 million or 12.4 percent, as compared by noninterest expense of $27.5 million for the six months ended June 30, 2021.

Income tax expense for the quarter ended June 30, 2022 was $500,000 compared to $851,000 for the same period in 2021 and $807,000 in the linked quarter. The effective tax rate for the three months ended June 30, 2022, June 30, 2021 and March 31, 2022 was 20.4 percent, 20.6 and 20.9 percent, respectively. Income tax expense for the six months ended June 30, 2022 was $1.3 million compared to $1.9 million for the same period in 2021. The effective tax rate for the six months ended June 30, 2022 and June 30, 2021 was 20.7 and 21.1, respectively.

Dividend Declared

On July 12, 2022, the Board of Directors of the Corporation declared a regular quarterly cash dividend of $0.15 per share, payable on August 9, 2022 to shareholders of record at the close of business on July 26, 2022. The payment of this $0.15 per share cash dividend in the third quarter 2022 is equal to the cash dividend paid in the prior two quarters.

Business Lines

The new online loan application process for select business products launched in early June 2022, which allows businesses to apply for a loan entirely online. This process provides streamlined underwriting for seven small business loan products and can be accessed from anywhere, on any device. PeoplesBank is one of the first in the local market to offer this online experience. This new process allows clients to efficiently apply for a loan and affords faster decisions and access to funds. Small businesses are able to complete an online assessment to determine if they meet eligibility requirements for the business loans offered online. If requirements are met, the business will be provided a link to apply for a small business loan. The client-friendly interface experience allows borrowers to check the status of their application, upload necessary documents, and communicate directly with members of the PeoplesBank team. The new offering also allows for electronic signatures of some loan documents. Maximum loan amounts range from $100,000 to $500,000 depending on the product.

The Gardenville Financial Center closed on May 13, 2022. The majority of the clients were transferred to the Perry Hall Financial Center.

Plans are underway for the East York Financial Center to be upgraded to a Connections Center later this year. This will be the second Connections Center in York County and the fourth overall. The construction is anticipated to be completed in early fall. East York will remain open to serve clients throughout the construction process.

The Mortgage Banking Division continues to experience lower than anticipated mortgage sales due to rising rates and a softening of the market. The new Physicians Preferred Mortgage was heavily promoted in the second quarter through a robust campaign that included print, digital, search engine marketing, and proactive outreach to local health organizations.

Board and Committee Appointments                                 

The Board of Directors appointed current PeoplesBank Director Kent K. Matsumoto, Esq. as a Class A Director of the Corporation effective June 14, 2022. In addition, he has been appointed to the Corporate Governance and Nominating Committee of the Corporation Board of Directors.

Mr. Matsumoto has over 35 years of legal and business experience, working for law firms and publicly held companies. With broad knowledge of corporate governance, compliance, and enterprise risk, he is currently employed by Viatris Inc., having held senior level positions with P.H. Glatfelter Company and Wolters Kluwer Health. Mr. Matsumoto graduated from the University of Michigan Law School and the University of Virginia, serves on the board of Head Start Washington County (Maryland), and lives in Greenville, Delaware. Mr. Matsumoto was appointed to the Board of PeoplesBank, A Codorus Valley Company, in September 2021.

The Board of Directors also appointed Scott V. Fainor as a Class C Director of the Corporation effective June 14, 2022.   In addition, he has been appointed to the Board’s Risk Management Committee of the Corporation Board of Directors.

Mr. Fainor is Chairman of Fainor Holdings, a company he launched in 2019 following a distinguished career as a bank executive for 39 years. Most recently, he served as a Group Executive of BB&T after serving as President and CEO of National Penn Bancshares, Inc. Mr. Fainor holds a Bachelor of Science degree in Marketing and Finance from DeSales University, where he formerly served as a Trustee. He lives in Allentown, Pennsylvania.

“The Board of Directors is pleased that Kent and Scott have agreed to join the Codorus Valley Bancorp, Inc. Board. Their extensive experience in board governance and the financial services industry will be invaluable as we seek to continue to grow the Corporation and enhance shareholder value,” said Cynthia A. Dotzel, Board Chair.

About Codorus Valley Bancorp, Inc.
Codorus Valley Bancorp, Inc. is the largest independent financial services holding company headquartered in York, Pennsylvania. Codorus Valley primarily operates through its financial services subsidiary, PeoplesBank, A Codorus Valley Company. PeoplesBank offers a full range of consumer, business, wealth management, and mortgage services at financial centers located in communities throughout South Central Pennsylvania and Central Maryland. Codorus Valley Bancorp, Inc.’s Common Stock is listed on the NASDAQ Global Market under the symbol CVLY.

Forward-looking Statements
Codorus Valley Bancorp, Inc. has made forward-looking statements in this Press Release. These forward-looking statements are subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Corporation and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” or similar expressions occur in this Press Release, the Corporation is making forward-looking statements. Note that many factors could affect the future financial results of the Corporation and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Press Release. Those factors include, but are not limited to: the recent and continuing COVID-19 pandemic which poses risks and may harm the Corporation’s business and results of operations in future quarters, credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession, and government regulation and supervision. The Corporation provides greater detail regarding these as well as other factors in its 2021 Form 10-K and 2022 Form 10-Qs, including Risk Factors sections of those reports, and in its subsequent SEC filings. The Corporation undertakes no obligation to update or revise any forward-looking statements.

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information in this announcement is subject to change.

Questions or comments concerning this Press Release should be directed to:

Codorus Valley Bancorp, Inc.
Financial Highlights
                     
Condensed Consolidated Statements of Income (Unaudited)
(in thousands of dollars, except per share data)
                     
    Quarterly   Year-to-Date
    2nd Qtr   1st Qtr   2nd Qtr   June 30,
    2022   2022   2021   2022   2021
Interest income   $ 19,283     $ 17,297     $ 17,496     $ 36,580   $ 35,871
Interest expense     1,544       1,596       2,582       3,140     5,480
Net interest income     17,739       15,701       14,914       33,440     30,391
Provision for loan losses     2,974       1,027       352       4,001     1,583
Noninterest income     3,911       3,862       3,351       7,773     7,784
Noninterest expense     16,223       14,676       13,780       30,899     27,486
Income before income taxes     2,453       3,860       4,133       6,313     9,106
Provision for income taxes     500       807       851       1,307     1,924
Net income   $ 1,953     $ 3,053     $ 3,282     $ 5,006   $ 7,182
Basic earnings per share   $ 0.20     $ 0.32     $ 0.33     $ 0.53   $ 0.73
Diluted earnings per share   $ 0.20     $ 0.32     $ 0.33     $ 0.52   $ 0.73
                     
                     
Condensed Consolidated Statements of Financial Condition (Unaudited)
(in thousands of dollars)
                     
    June 30,   December 31, June 30,        
    2022   2021   2021        
Cash and short term investments   $ 283,969     $ 545,494     $ 397,032          
Investment securities     329,987       255,596       209,922          
Loans     1,585,686       1,537,627       1,548,607          
Allowance for loan losses     (22,865 )     (22,782 )     (22,011 )        
Net loans     1,562,821       1,514,845       1,526,596          
Premises and equipment, net     21,534       21,955       22,316          
Operating leases right-of-use assets     3,412       1,697       2,063          
Goodwill     2,301       2,301       2,301          
Other assets     84,699       76,684       75,923          
Total assets   $ 2,288,723     $ 2,418,572     $ 2,236,153          
                     
Deposits   $ 2,039,575     $ 2,143,765     $ 1,955,330          
Borrowed funds     25,814       32,340       34,985          
Subordinated debentures     30,723       30,683       30,642          
Operating leases liability     3,559       1,803       2,185          
Other liabilities     13,770       14,476       13,738          
Shareholders’ equity     175,282       195,505       199,273          
Total liabilities and shareholders’ equity   $ 2,288,723     $ 2,418,572     $ 2,236,153          
                     
                               
Codorus Valley Bancorp, Inc.        
Financial Highlights        
                               
Selected Financial Data (Unaudited)        
                               
      Quarterly   Year-to-Date
      2022   2022   2021   2021   2021   June 30,
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr   2022   2021
Earnings and Per Share Data (1)                            
  (in thousands, except per share data)                            
  Net income   $ 1,953     $ 3,053     $ 2,694     $ 4,783     $ 3,282     $ 5,006   $ 7,182
  Basic earnings per share   $ 0.20     $ 0.32     $ 0.28     $ 0.49     $ 0.33     $ 0.53   $ 0.73
  Diluted earnings per share   $ 0.20     $ 0.32     $ 0.28     $ 0.49     $ 0.33     $ 0.52   $ 0.73
  Cash dividends paid per share   $ 0.15     $ 0.15     $ 0.15     $ 0.13     $ 0.13     $ 0.30   $ 0.26
  Book value per share   $ 18.37     $ 19.28     $ 20.64     $ 20.72     $ 20.44     $ 18.37   $ 20.44
  Tangible book value per share (2)   $ 18.13     $ 19.04     $ 20.40     $ 20.48     $ 20.20     $ 18.13   $ 20.20
  Average shares outstanding     9,532       9,486       9,506       9,699       9,816       9,509     9,829
  Average diluted shares outstanding     9,565       9,517       9,548       9,748       9,848       9,541     9,857
                               
Performance Ratios (%)                            
  Return on average assets (3)     0.34       0.51       0.46       0.83       0.58       0.42     0.65
  Return on average equity (3)     4.31       6.33       5.46       9.56       6.56       5.35     7.25
  Net interest margin (4)     3.18       2.79       2.75       2.90       2.80       2.98     2.91
  Efficiency ratio (5)     74.43       74.51       74.31       67.33       74.81       74.47     71.45
  Net overhead ratio (3)(6)     2.11       1.81       1.79       1.66       1.85       1.96     1.77
                               
Asset Quality Ratios (%)                            
  Net loan charge-offs to average loans (3)     0.54       0.47       0.34       0.01       0.19       0.51     0.11
  Allowance for loan losses to total loans (7)     1.44       1.44       1.49       1.47       1.43       1.44     1.43
  Nonperforming assets to total loans                            
  and foreclosed real estate     1.05       2.00       2.22       2.75       2.59       1.05     2.59
                               
Capital Ratios (%)                            
  Average equity to average assets     7.78       8.09       8.34       8.70       8.88       7.93     8.93
  Tier 1 leverage capital ratio     8.79       8.60       8.59       8.92       9.11       8.79     9.11
  Common equity Tier 1 capital ratio     11.63       11.93       12.11       12.38       12.87       11.63     12.87
  Tier 1 risk-based capital ratio     12.23       12.54       12.74       13.01       13.53       12.23     13.53
  Total risk-based capital ratio     15.30       15.67       15.92       16.21       16.80       15.30     16.80
                               
(1) per share amounts and shares outstanding were adjusted for stock dividends      
(2) book value less goodwill and core deposit intangibles
(3) annualized for the quarterly periods presented      
(4) net interest income (tax-equivalent) as a percentage of average interest earning assets      
(5) noninterest expense as a percentage of net interest income and noninterest income (tax-equivalent)      
(6) noninterest expense less noninterest income as a percentage of average assets      
(7) excludes loans held for sale      
                               
  Reconciliation of Non-GAAP Financial Measure (Tangible Book Value)        
                               
  (in thousands, except per share data)   2022   2022   2021   2021   2021        
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr        
  Total Shareholders’ Equity   $ 175,282     $ 183,719     $ 195,505     $ 198,712     $ 199,273          
  Less: Preferred Stock     0       0       0       0       0          
  Less: Goodwill and Other Intangible Assets     (2,304 )     (2,305 )     (2,301 )     (2,306 )     (2,307 )        
  Tangible Shareholders’ Equity   $ 172,978     $ 181,414     $ 193,204     $ 196,406     $ 196,966          
                               
  Common Shares Outstanding     9,541       9,528       9,472       9,592       9,752          
  Book Value Per Share   $ 18.37     $ 19.28     $ 20.64     $ 20.72     $ 20.44          
                               
  Book Value Per Share   $ 18.37     $ 19.28     $ 20.64     $ 20.72     $ 20.44          
  Effect of Intangible Assets     (0.24 )     (0.24 )     (0.24 )     (0.24 )     (0.24 )        
  Tangible Book Value Per Share   $ 18.13     $ 19.04     $ 20.40     $ 20.48     $ 20.20          
                               
  This report contains certain financial information determined by methods other than in accordance with GAAP. This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for the analysis of the Corporation’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Our management uses this non-GAAP measure in its analysis of our performance because it believes this measure is material and will be used as a measure of our performance by investors.            
   
ANALYSIS OF NET INTEREST INCOME                     
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)      
                                           
    Three Months Ended
    June 30, 2022     March 31, 2022     June 30, 2021  
(Dollars in thousands)   Average Balance   Taxable-Equivalent Interest   Taxable-Equivalent Rate     Average Balance   Taxable-Equivalent Interest   Taxable-Equivalent Rate     Average Balance   Taxable-Equivalent Interest   Taxable-Equivalent Rate  
                                           
Assets                                          
Interest bearing deposits with banks   $ 331,335   $ 648     0.78 %   $ 483,553   $ 228     0.19 %   $ 383,440   $ 105     0.11 %
Investment securities:                                          
Taxable     317,889     1,742     2.20       258,112     1,289     2.03       170,961     813     1.91  
Tax-exempt     25,561     132     2.07       24,583     124     2.05       20,600     108     2.10  
Total investment securities     343,450     1,874     2.19       282,695     1,413     2.03       191,561     921     1.93  
Loans:                                          
Taxable (1)     1,557,857     16,648     4.29       1,516,145     15,594     4.17       1,564,672     16,419     4.21  
Tax-exempt     15,837     176     4.46       10,891     111     4.13       9,078     91     4.02  
Total loans     1,573,694     16,824     4.29       1,527,036     15,705     4.17       1,573,750     16,510     4.21  
Total earning assets     2,248,479     19,346     3.45       2,293,284     17,346     3.07       2,148,751     17,536     3.27  
Other assets (2)     82,763               92,129               103,034          
Total assets   $ 2,331,242             $ 2,385,413             $ 2,251,785          
Liabilities and Shareholders’ Equity                                          
Deposits:                                          
Interest bearing demand   $ 981,025     431     0.18 %   $ 997,383     331     0.13 %   $ 836,011   $ 426     0.20 %
Savings     165,245     12     0.03       155,982     12     0.03       131,528     17     0.05  
Time     423,298     567     0.54       451,131     719     0.65       518,325     1,506     1.17  
Total interest bearing deposits     1,569,568     1,010     0.26       1,604,496     1,062     0.27       1,485,864     1,949     0.53  
Short-term borrowings     12,080     12     0.40       9,967     10     0.41       10,617     10     0.38  
Long-term debt     21,828     152     2.80       23,363     155     2.69       40,613     254     2.51  
Subordinated debentures     30,717     370     4.84       30,696     369     4.88       30,636     369     4.83  
Total interest bearing liabilities     1,634,193     1,544     0.38       1,668,522     1,596     0.39       1,567,730     2,582     0.66  
Noninterest bearing deposits     503,211               511,170               470,530          
Other liabilities     12,531               12,755               13,529          
Shareholders’ equity     181,307               192,966               199,996          
Total liabilities and shareholders’ equity   $ 2,331,242             $ 2,385,413             $ 2,251,785          
Net interest income (tax equivalent basis)       $ 17,802               $ 15,750               $ 14,954        
Net interest margin (3)           3.18 %           2.79 %           2.80 %
Tax equivalent adjustment         (63 )               (49 )               (40 )      
Net interest income       $ 17,739               $ 15,701               $ 14,914        
                                           
(1) Average balances include nonaccrual loans.                     
(2) Average balances include bank owned life insurance and foreclosed real estate.                 
(3) Net interest income (tax-equivalent basis) annualized as a percentage of average interest earning assets.               
ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
                             
                             
    Six Months Ended  
    June 30, 2022     June 30, 2021  
(Dollars in thousands)   Average Balance   Taxable-Equivalent Interest   Taxable-Equivalent Rate     Average Balance   Taxable-Equivalent Interest   Taxable-Equivalent Rate  
                             
Assets                            
Interest bearing deposits with banks   $ 407,024   $ 876     0.43 %   $ 354,477   $ 186     0.11 %
Investment securities:                            
Taxable     288,164     3,031     2.12       163,224     1,421     1.76  
Tax-exempt     25,075     256     2.06       20,014     226     2.28  
Total investment securities     313,239     3,287     2.12       183,238     1,647     1.81  
Loans:                            
Taxable (1)     1,537,122     32,241     4.23       1,566,236     33,934     4.37  
Tax-exempt     13,378     287     4.33       9,486     188     4.00  
Total loans     1,550,500     32,528     4.23       1,575,722     34,122     4.37  
Total earning assets     2,270,763     36,691     3.26       2,113,437     35,955     3.43  
Other assets (2)     87,410               105,481          
Total assets   $ 2,358,173             $ 2,218,918          
Liabilities and Shareholders’ Equity                            
Deposits:                            
Interest bearing demand   $ 989,158     761     0.16 %   $ 825,096   $ 856     0.21 %
Savings     160,639     24     0.03       124,616     31     0.05  
Time     437,138     1,287     0.59       523,865     3,282     1.26  
Total interest bearing deposits     1,586,935     2,072     0.26       1,473,577     4,169     0.57  
Short-term borrowings     11,029     22     0.40       9,184     18     0.40  
Long-term debt     22,591     308     2.75       44,805     555     2.50  
Subordinated debentures     30,706     738     4.85       30,625     738     4.86  
Total interest bearing liabilities     1,651,261     3,140     0.38       1,558,191     5,480     0.71  
Noninterest bearing deposits     507,162               447,259          
Other liabilities     12,649               15,427          
Shareholders’ equity     187,101               198,041          
Total liabilities and shareholders’ equity   $ 2,358,173             $ 2,218,918          
Net interest income (tax equivalent basis)       $ 33,551               $ 30,475        
Net interest margin (3)           2.98 %           2.91 %
Tax equivalent adjustment         (111 )               (84 )      
Net interest income       $ 33,440               $ 30,391        
                             
(1) Average balances include nonaccrual loans.              
(2) Average balances include bank owned life insurance and foreclosed real estate.          
(3) Net interest income (tax-equivalent basis) annualized as a percentage of average interest earning assets.        

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