SOURCE: American National Bankshares Inc.

American National Bankshares Inc.

July 21, 2016 16:05 ET

American National Bankshares Inc. Reports Second Quarter 2016 Earnings

DANVILLE, VA--(Marketwired - July 21, 2016) - American National Bankshares Inc. ("American National") (NASDAQ: AMNB)

  • Organic loan growth of $75.1 million (7.6%) during last four quarters
  • Q2 2016 net income of $4.1 million and diluted EPS of $0.47
  • Net interest margin of 3.45% for Q2 2016
  • Average shareholders' equity of $201.7 million is 12.67% of average assets

American National Bankshares Inc. ("American National") (NASDAQ: AMNB), parent company of American National Bank and Trust Company, today announced net income of $4,088,000 compared to $2,880,000 for the second quarter of 2015, a $1,208,000 or 41.9% increase. Basic and diluted net income per common share was $0.47 for the 2016 quarter compared to $0.33 for the 2015 quarter. Net income for the second quarter of 2016 produced annualized returns on average assets of 1.03%, on average equity of 8.11%, and on average tangible equity of 10.99%.

Net income for the first six months of 2016 was $8,216,000 compared to $6,395,000 for the comparable period of 2015, a $1,821,000 or 28.5% increase. Basic and diluted net income per common share was $0.95 for the 2016 period compared to $0.73 for the 2015 period.

Financial Performance and Overview
Jeffrey V. Haley, President and Chief Executive Officer, reported, "We are seeing improving economic conditions in our markets and this is resulting in increased demand for credit. Loans have increased $75.1 million or 7.6% during the past year. In the past six months, loans have increased $52.4 million or 5.2%. We are very encouraged that a combination of active business development and gradually improving local market economic conditions are resulting in this high quality growth. However, the continuing challenge for our industry in this competitive environment is achieving reasonable risk adjusted yield on our earning assets.

"Loans don't exist in isolation; they require liquidity. Deposits have grown $64.4 million or 5.2% over the past year. In the past six months, deposits have grown $35.7 million or 2.8%. This growth is mostly in non-maturity, core deposits, the heart of our balance sheet. We continue working to grow these core deposits and their affiliated relationships, but the challenge in this ongoing low rate environment is to do that in a cost effective yet competitive manner. Our cost of interest bearing deposits for the second quarter was 0.54%, compared to 0.50% for the 2015 quarter.

"On the earnings side, net income for the second quarter was $4,088,000 compared to $2,880,000, an increase of $1,208,000 or 41.9%.

"The major driver was the noninterest expense, which was reduced $1,986,000 or 17.1%. This mostly related to non-recurring MainStreet acquisition expenses, which totaled $1,502,000 in the second quarter 2015.

"We also saw significant expense reduction in salaries, which declined $277,000 or 6.4% compared to the second quarter of 2015. Full time equivalent employees for the current quarter were 302, down from 322 for the prior year quarter. The magnitude of the decrease was directly related to the completion and integration of the MainStreet acquisition."

Haley concluded, "The first half of 2016 has been very productive for American National. Average loan balances this quarter are $75.2 million or 7.7% greater than the second quarter of 2015. American National will continue to grow its balance sheet and maintain high asset quality. However, capital will remain a strategic priority."

Capital
American National's capital ratios remain strong and exceed all regulatory requirements.

For the quarter ended June 30, 2016, average shareholders' equity was 12.67% of average assets, compared to 12.85% for the quarter ended June 30, 2015.

Book value per common share was $23.54 at June 30, 2016, compared to $22.43 at June 30, 2015.

Tangible book value per common share was $18.20 at June 30, 2016, compared to $16.96 at June 30, 2015.

Credit Quality Measurements
Non-performing assets ($3,412,000 of non-performing loans and $1,289,000 of other real estate owned) represented 0.29% of total assets at June 30, 2016, compared to 0.39% at June 30, 2015.

Annualized net charge offs to average loans was two basis points (0.02%) for the 2016 second quarter, compared to six basis points (0.06%) for the same quarter in 2015.

Other real estate owned was $1,289,000 compared to $2,113,000 at June 30, 2015, a decrease of $824,000 or 39.0%.

Acquisition Related Financial Impact
The acquisition accounting adjustments related to our two recent acquisitions have had and continue to have a positive impact on net interest income and income before income tax for American National. The impact of the adjustments is summarized below (dollars in thousands):

       
Acquisition related financial impact      
       
For the quarter ended June 30,  2016  2015
Net interest income  $352  $843
Income before Income taxes  $64  $543
       
For the period ended June 30,  2016  2015
Net interest income  $1,353  $1,955
Income before Income taxes  $777  $1,354
     

During the first quarter of 2016, the Company received two substantial payoffs of purchased credit impaired loans from our 2011 MidCarolina acquisition that resulted in $460,000 in cash-basis accretion income.

Net Interest Income
Net interest income before the provision for loan losses decreased to $12,160,000 in the second quarter of 2016 from $12,382,000 in the second quarter of 2015, a decrease of $222,000 or 1.8%.

For the 2016 quarter, the net interest margin was 3.45% compared to 3.69% for the same quarter in 2015, a decrease of 24 basis points (0.24%). The decrease in net interest income and margin was mostly driven by reduced levels of accretion income.

Provision for Loan Losses and Allowance for Loan Losses
Provision expense for the second quarter of 2016 was $50,000 compared to $100,000 for the second quarter of 2015.

The allowance for loan losses as a percentage of total loans was 1.20% at June 30, 2016 compared to 1.30% at June 30, 2015.

There was significant growth in the loans outstanding in the second quarter 2016, a net of $23.4 million or 2.3%. The need for additions to the allowance for loan losses was reduced by improvement in various qualitative factors used in the determination of the allowance, notably asset quality and local economic conditions. As noted in the Credit Quality discussion, non-performing assets, charge-offs, and other real estate owned are all improved over the past year.

Noninterest Income
Noninterest income totaled $3,367,000 in the second quarter of 2016, compared with $3,258,000 in the second quarter of 2015, an increase of $109,000 or 3.3%. There was very little change in most revenue categories during the quarter.

Noninterest Expense
Noninterest expense totaled $9,656,000 in the second quarter of 2016, compared to $11,642,000 in the second quarter of 2015, a decrease of $1,986,000 or 17.1%. The major driver of the decrease was nonrecurring merger related expenses, from the January 2015 MainStreet acquisition, which accounted for $1,502,000 or 75.6% of the decrease.

Salaries expense was down $277,000 or 6.4% for the second quarter of 2016 compared to the comparable period. This mostly related to a reduction in the number of full time equivalent employees to 302 from 322.

About American National
American National is a multi-state bank holding company with total assets of approximately $1.6 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 25 banking offices and two loan production offices. American National Bank also manages an additional $761 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about the company and the bank is available on the bank's website at www.amnb.com.

Shares of American National are traded on the NASDAQ Global Select Market under the symbol "AMNB."

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws. Certain of the statements involve significant risks and uncertainties. The statements herein are based on certain assumptions and analyses by American National and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies or guidelines; significant changes in the economic scenario; significant changes in regulatory requirements; significant changes in securities markets; and changes in technology and information security; and changes regarding acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in American National's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. American National does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

   
American National Bankshares Inc.  
Consolidated Balance Sheets  
(Dollars in thousands, except share and per share data)  
Unaudited  
          
   June 30   June 30  
ASSETS  2016   2015  
            
Cash and due from banks  $21,625   $24,548  
Interest-bearing deposits in other banks   51,716    50,758  
Federal funds sold   -    408  
            
Securities available for sale, at fair value   362,800    355,595  
Restricted stock, at cost   5,362    5,329  
Loans held for sale   4,692    2,720  
            
Loans   1,057,959    982,905  
 Less allowance for loan losses   (12,674 )  (12,793 )
  Net Loans   1,045,285    970,112  
            
Premises and equipment, net   22,878    24,182  
Other real estate owned, net   1,289    2,113  
Goodwill   43,872    44,210  
Core deposit intangibles, net   2,107    3,283  
Bank owned life insurance   17,885    17,376  
Accrued interest receivable and other assets   22,140    23,722  
            
  Total assets  $1,601,651   $1,524,356  
            
            
Liabilities           
 Demand deposits -- noninterest-bearing  $321,442   $294,342  
 Demand deposits -- interest-bearing   205,440    239,582  
 Money market deposits   252,118    190,799  
 Savings deposits   116,047    109,732  
 Time deposits   403,338    399,563  
  Total deposits   1,298,385    1,234,018  
            
 Customer repurchase agreements   53,369    50,123  
 Long-term borrowings   9,969    9,947  
 Junior subordinated debt   27,673    27,571  
 Accrued interest payable and other liabilities   9,551    7,814  
  Total liabilities   1,398,947    1,329,473  
            
Shareholders' equity           
 Preferred stock, $5 par, 2,000,000 shares authorized,none outstanding   -    -  
 Common stock, $1 par, 20,000,000 shares authorized,8,609,160 shares outstanding at June 30, 2016 and8,688,480 shares outstanding at June 30, 2015   8,572    8,671  
 Capital in excess of par value   74,753    76,826  
 Retained earnings   115,648    106,984  
 Accumulated other comprehensive income, net   3,731    2,402  
  Total shareholders' equity   202,704    194,883  
            
  Total liabilities and shareholders' equity  $1,601,651   $1,524,356  
            
 
American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except share and per share data)
Unaudited
             
   Three Months Ended  Six Months Ended
   June 30  June 30
   2016  2015  2016  2015
 Interest and Dividend Income:                
 Interest and fees on loans  $11,642  $11,767  $23,757  $23,537
 Interest on federal funds sold   -   1   -   5
 Interest and dividends on securities:                
  Taxable   1,150   994   2,234   1,969
  Tax-exempt   817   940   1,640   1,900
  Dividends   93   85   184   167
 Other interest income   67   50   125   98
   Total interest and dividend income   13,769   13,837   27,940   27,676
                 
Interest Expense:                
 Interest on deposits   1,314   1,184   2,611   2,378
 Interest on short-term borrowings   1   2   2   5
 Interest on long-term borrowings   81   81   162   161
 Interest on junior subordinated debt   213   188   421   372
   Total interest expense   1,609   1,455   3,196   2,916
                 
Net Interest Income   12,160   12,382   24,744   24,760
 Provision for loan losses   50   100   100   700
                 
Net Interest Income After Provision for Loan Losses   12,110   12,282   24,644   24,060
                 
Noninterest Income:                
 Trust fees   961   1,005   1,891   1,957
 Service charges on deposit accounts   514   525   1,006   1,022
 Other fees and commissions   656   607   1,328   1,195
 Mortgage banking income   365   389   657   611
 Securities gains, net   222   237   588   547
 Brokerage fees   223   211   427   426
 Income from Small Business Investment Companies   72   94   238   328
 Other   354   190   529   328
   Total noninterest income   3,367   3,258   6,664   6,414
                 
Noninterest Expense:                
 Salaries   4,031   4,308   8,246   8,455
 Employee benefits   1,055   1,111   2,169   2,186
 Occupancy and equipment   1,059   1,024   2,158   2,196
 FDIC assessment   193   195   381   380
 Bank franchise tax   256   220   512   455
 Core deposit intangible amortization   288   300   576   601
 Data processing   459   483   903   945
 Software   274   277   571   560
 Other real estate owned, net   76   133   209   186
 Merger related expenses   -   1,502   -   1,861
 Other   1,965   2,089   3,849   3,864
   Total noninterest expense   9,656   11,642   19,574   21,689
                 
Income Before Income Taxes   5,821   3,898   11,734   8,785
Income Taxes   1,733   1,018   3,518   2,390
Net Income  $4,088  $2,880  $8,216  $6,395
                 
Net Income Per Common Share:                
 Basic  $0.47  $0.33  $0.95  $0.73
 Diluted  $0.47  $0.33  $0.95  $0.73
Weighted Average Common Shares Outstanding:                
 Basic   8,610,156   8,707,504   8,610,998   8,713,528
 Diluted   8,619,833   8,715,934   8,616,873   8,722,266
             
                      
American National Bankshares Inc.                     
Financial Highlights                     
                      
 (In thousands, except share, ratio and
nonfinancial data, unaudited)
 
2nd Qtr
  
1st Qtr
  
2nd Qtr
  
YTD
  
YTD
 
   2016   2016   2015   2016   2015  
EARNINGS                          
 Interest income  $13,769   $14,171   $13,837   $27,940   $27,676  
 Interest expense   1,609    1,587    1,455    3,196    2,916  
 Net interest income   12,160    12,584    12,382    24,744    24,760  
 Provision for loan losses   50    50    100    100    700  
 Noninterest income   3,367    3,297    3,258    6,664    6,414  
 Noninterest expense   9,656    9,918    11,642    19,574    21,689  
 Income taxes   1,733    1,785    1,018    3,518    2,390  
 Net income   4,088    4,128    2,880    8,216    6,395  
                           
PER COMMON SHARE                          
 Income per share - basic  $0.47   $0.48   $0.33   $0.95   $0.73  
 Income per share - diluted   0.47    0.48    0.33    0.95    0.73  
 Cash dividends paid   0.24    0.24    0.23    0.48    0.46  
 Book value per share   23.54    23.27    22.43    23.54    22.43  
 Book value per share - tangible (a)   18.20    17.90    16.96    18.20    16.96  
 Closing market price   25.18    25.33    23.81    25.18    23.81  
                           
FINANCIAL RATIOS                          
 Return on average assets   1.03 %  1.06 %  0.75 %  1.05 %  0.84 %
 Return on average equity   8.11    8.28    5.86    8.19    6.51  
 Return on average tangible equity (b)   10.99    11.27    8.26    11.13    9.14  
 Average equity to average assets   12.67    12.86    12.85    12.76    12.88  
 Tangible equity to tangible assets (a)   10.07    10.04    9.98    10.07    9.98  
 Net interest margin, taxable equivalent   3.45    3.67    3.69    3.56    3.71  
 Efficiency ratio (c)   60.91    61.36    72.76    61.14    68.36  
 Effective tax rate   29.77    30.19    26.12    29.98    27.21  
                           
PERIOD-END BALANCES                          
 Securities  $368,162   $362,353   $361,176   $368,162   $361,176  
 Loans held for sale   4,692    785    2,720    4,692    2,720  
 Loans, net of unearned income   1,057,959    1,034,564    982,905    1,057,959    982,905  
 Goodwill and other intangibles   45,979    46,267    47,493    45,979    47,493  
 Assets   1,601,651    1,582,554    1,524,356    1,601,651    1,524,356  
 Assets - tangible (a)   1,555,672    1,536,287    1,476,863    1,555,672    1,476,863  
 Deposits   1,298,385    1,292,431    1,234,018    1,298,385    1,234,018  
 Customer repurchase agreements   53,369    42,184    50,123    53,369    50,123  
 Long-term borrowings   37,642    37,611    37,518    37,642    37,518  
 Shareholders' equity   202,704    200,443    194,883    202,704    194,883  
 Shareholders' equity - tangible (a)   156,725    154,176    147,390    156,725    147,390  
                           
AVERAGE BALANCES                          
 Securities  $361,064   $347,290   $349,813   $354,038   $347,816  
 Loans held for sale   2,087    2,055    2,836    2,071    1,893  
 Loans, net of unearned income   1,047,993    1,016,696    972,083    1,032,345    963,530  
 Interest-earning assets   1,464,692    1,424,808    1,397,448    1,444,611    1,390,172  
 Goodwill and other intangibles   46,150    46,441    47,682    46,296    47,834  
 Assets   1,592,261    1,551,124    1,530,867    1,571,692    1,524,693  
 Assets - tangible (a)   1,546,111    1,504,683    1,483,185    1,525,396    1,476,859  
 Interest-bearing deposits   972,385    950,271    945,931    961,328    942,019  
 Deposits   1,295,520    1,260,534    1,236,626    1,278,027    1,228,874  
 Customer repurchase agreements   47,607    44,412    51,417    46,008    52,294  
 Long-term borrowings   37,624    37,593    37,499    37,609    37,484  
 Shareholders' equity   201,685    199,525    196,663    200,605    196,376  
 Shareholders' equity - tangible (a)   155,535    153,084    148,981    154,309    148,542  
                           
American National Bankshares Inc.                     
Financial Highlights                     
                      
 (In thousands, except share, ratio and
nonfinancial data, unaudited)
 
2nd Qtr
  
1st Qtr
  
2nd Qtr
  
YTD
  
YTD
 
   2016   2016   2015   2016   2015  
CAPITAL                          
 Weighted average shares outstanding - basic   8,610,156    8,608,728    8,707,504    8,610,998    8,713,528  
 Weighted average shares outstanding - diluted   8,619,833    8,613,896    8,715,934    8,616,873    8,722,266  
                           
ALLOWANCE FOR LOAN LOSSES                          
 Beginning balance  $12,675   $12,601   $12,844   $12,601   $12,427  
 Provision for loan losses   50    50    100    100    700  
 Charge-offs   (119 )  (40 )  (321 )  (159 )  (630 )
 Recoveries   68    64    170    132    296  
 Ending balance  $12,674   $12,675   $12,793   $12,674   $12,793  
                           
LOANS                          
 Construction and land development  $89,451   $82,711   $66,543   $89,451   $66,543  
 Commercial real estate   438,164    427,824    432,315    438,164    432,315  
 Residential real estate   216,857    222,451    220,778    216,857    220,778  
 Home equity   107,007    100,019    97,866    107,007    97,866  
 Commercial and industrial   201,381    196,110    159,015    201,381    159,015  
 Consumer   5,099    5,449    6,388    5,099    6,388  
 Total  $1,057,959   $1,034,564   $982,905   $1,057,959   $982,905  
                           
NONPERFORMING ASSETS AT PERIOD-END                          
 Nonperforming loans:                          
  90 days past due and accruing  $-   $-   $-   $-   $-  
  Nonaccrual   3,412    5,276    3,772    3,412    3,772  
 Other real estate owned   1,289    1,493    2,113    1,289    2,113  
 Nonperforming assets  $4,701   $6,769   $5,885   $4,701   $5,885  
                           
ASSET QUALITY RATIOS                          
 Allowance for loan losses to total loans   1.20 %  1.23 %  1.30 %  1.20 %  1.30 %
 Allowance for loan losses tononperforming loans   
371.45
   
240.24
   
339.16
   
371.45
   
339.16
 
 Nonperforming assets to total assets   0.29    0.43    0.39    0.29    0.39  
 Nonperforming loans to total loans   0.32    0.51    0.38    0.32    0.38  
 Annualized net charge-offs (recoveries)to average loans   
0.02
   
(0.01
)  
0.06
   
0.01
   
0.07
 
                           
                           
OTHER DATA                          
 Fiduciary assets at period-end (d) (e)  $491,517   $491,257   $509,289   $491,517   $509,289  
 Retail brokerage assets at period-end (d) (e)  $269,066   $268,542   $257,306   $269,066   $257,306  
 Number full-time equivalent employees (f)   302    301    322    302    322  
 Number of full service offices   25    25    27    25    27  
 Number of loan production offices   2    2    2    2    2  
 Number of ATM's   33    33    34    33    34  
                           
 Notes:
  
 (a) - Excludes goodwill and other intangible assets.
 (b) - Excludes amortization expense, net of tax, of intangible assets.
 
 
 
(c) - The efficiency ratio is calculated by dividing noninterest expense excluding gains or losses on the sale of OREO by net interest income including tax equivalent income on nontaxable loans and securities and noninterest income and excluding (i) gains or losses on securities and (ii) gains or losses on sale of premises and equipment.
 (d) - Market value.
 (e) - Assets are not owned by the Company and are not reflected in the consolidated balance sheet.
 (f) - Average for quarter.
  
   
Net Interest Income Analysis  
For the Three Months Ended June 30, 2016 and 2015  
(in thousands, except yields/rates)  
                      
         Interest         
   Average Balance  Income/Expense  Yield/Rate  
                      
   2016  2015  2016  2015  2016   2015  
Loans:                         
 Commercial  $200,000  $155,752  $1,976  $1,760  3.97 % 4.53 %
 Real estate   844,914   807,605   9,591   9,841  4.54   4.87  
 Consumer   5,166   11,562   140   205  10.90   7.11  
  Total loans   1,050,080   974,919   11,707   11,806  4.46   4.85  
                          
Securities:                         
 Federal agencies & GSEs   100,205   86,815   446   324  1.78   1.49  
 Mortgage-backed & CMOs   81,379   61,738   425   334  2.09   2.16  
 State and municipal   164,788   185,848   1,472   1,720  3.57   3.70  
 Other   14,692   15,412   130   125  3.54   3.24  
  Total securities   361,064   349,813   2,473   2,503  2.74   2.86  
                          
Federal funds sold   -   6,480   -   1  0.00   0.06  
Deposits in other banks   53,548   66,236   66   50  0.50   0.30  
                          
 Total interest-earning assets   1,464,692   1,397,448   14,246   14,360  3.89   4.11  
                          
Non-earning assets   127,569   133,419                 
                          
  Total assets  $1,592,261  $1,530,867                 
                          
Deposits:                         
 Demand  $229,639  $237,102   43   22  0.08   0.04  
 Money market   221,508   195,578   91   61  0.17   0.13  
 Savings   117,408   109,397   14   14  0.05   0.05  
 Time   403,830   403,854   1,166   1,087  1.16   1.08  
  Total deposits   972,385   945,931   1,314   1,184  0.54   0.50  
                          
Customer repurchase agreements   47,607   51,417   1   2  0.01   0.02  
Long-term borrowings   37,624   37,499   294   269  3.13   2.87  
 Total interest-bearing liabilities   1,057,616   1,034,847   1,609   1,455  0.61   0.56  
                          
Noninterest bearing demand deposits   323,135   290,695                 
Other liabilities   9,825   8,662                 
Shareholders' equity   201,685   196,663                 
  Total liabilities and shareholders' equity  $
1,592,261
 $
1,530,867
                
                          
Interest rate spread                  3.28 % 3.55 %
Net interest margin                  3.45 % 3.69 %
                          
Net interest income (taxable equivalent basis)          12,637   12,905         
Less: Taxable equivalent adjustment           478   523         
Net interest income          $12,159  $12,382         
                   
 
Net Interest Income Analysis
For the Six Months Ended June 30, 2016 and 2015
(in thousands, except yields/rates)
                       
         Interest          
   Average Balance  Income/Expense  Yield/Rate  
                       
   2016  2015  2016  2015  2016    2015  
Loans:                          
 Commercial  $194,137  $147,482  $3,830  $3,586  3.99 %  4.90 %
 Real estate   834,943   804,507   19,681   19,560  4.71    4.86  
 Consumer   5,336   13,434   371   445  14.06    6.68  
  Total loans   1,034,416   965,423   23,882   23,591  4.63    4.89  
                           
Securities:                          
 Federal agencies & GSEs   94,244   80,866   824   569  1.75    1.41  
 Mortgage-backed & CMOs   78,635   63,637   825   712  2.10    2.24  
 State and municipal   165,349   188,020   2,964   3,483  3.59    3.70  
 Other   15,810   15,293   278   248  3.52    3.24  
  Total securities   354,038   347,816   4,891   5,012  2.76    2.88  
                           
Federal funds sold   -   10,508   -   5  0.00    0.10  
Deposits in other banks   56,157   66,425   125   98  0.45    0.30  
                           
 Total interest-earning assets   1,444,611   1,390,172   28,898   28,706  4.01    4.13  
                           
Non-earning assets   127,081   134,521                  
                           
  Total assets  $1,571,692  $1,524,693                  
                           
Deposits:                          
 Demand  $230,504  $224,955   80   40  0.07    0.04  
 Money market   213,391   199,236   166   132  0.16    0.13  
 Savings   117,529   108,545   28   26  0.05    0.05  
 Time   399,904   409,283   2,337   2,180  1.18    1.07  
  Total deposits   961,328   942,019   2,611   2,378  0.55    0.51  
                           
Customer repurchase agreements   46,008   52,294   2   5  0.01    0.02  
Long-term borrowings   37,609   37,484   583   533  3.10    2.84  
 Total interest-bearing liabilities   
1,044,945
  
1,031,797
  
3,196
  
2,916
 
0.62
   
0.57
 
                           
Noninterest bearing demand deposits   316,699   286,855                  
Other liabilities   9,443   9,665                  
Shareholders' equity   200,605   196,376                  
  Total liabilities and shareholders' equity  $
1,571,692
 $
1,524,693
                 
                           
Interest rate spread                  3.39 %  3.56 %
Net interest margin                  3.56 %  3.71 %
                           
Net interest income (taxable equivalent basis)          25,702   25,790          
Less: Taxable equivalent adjustment           958   1,030          
Net interest income          $24,744  $24,760