SOURCE: Central Valley Community Bancorp

Central Valley Community Bancorp

April 15, 2015 16:10 ET

Central Valley Community Bancorp Reports Earnings Results for the Quarter Ended March 31, 2015

FRESNO, CA--(Marketwired - Apr 15, 2015) - The Board of Directors of Central Valley Community Bancorp (Company) (NASDAQ: CVCY), the parent company of Central Valley Community Bank (Bank), reported today unaudited consolidated net income of $2,466,000, and diluted earnings per common share of $0.22 for the three months ended March 31, 2015, compared to $2,616,000 and $0.24 per diluted common share for the three months ended March 31, 2014. 

Net income decreased 5.73%, primarily driven by a decrease in net interest income and an increase in non-interest expenses, offset by an increase in non-interest income in 2015 compared to 2014. Net interest income during the first quarter of 2014 had been positively impacted by the collection of nonaccrual loans totaling $1,618,000, which resulted in a recovery of interest income of $721,000.

Non-performing assets decreased by $8,000, or 0.06%, to $14,044,000 at March 31, 2015, compared to $14,052,000 at December 31, 2014. During the three months ended March 31, 2015, the Company's shareholders' equity increased $3,502,000, or 2.67%. The increase in shareholders' equity was driven by the retention of earnings and improvement in unrealized gains on available-for-sale securities recorded in accumulated other comprehensive income (AOCI). 

Annualized return on average equity (ROE) for the quarter ended March 31, 2015 was 7.41%, compared to 8.37% for the quarter ended March 31, 2014. This decrease in ROE reflects a decrease in net income, as well as an increase in capital from an increase in AOCI and an increase in retained earnings. Annualized return on average assets (ROA) was 0.83% and 0.93% for the quarters ended March 31, 2015 and 2014, respectively. The decrease in ROA in the first quarter of 2015 was due to a comparative decrease in net income.

During the quarters ended March 31, 2015 and March 31, 2014, the Company did not record a provision for credit losses. During the quarter ended March 31, 2015, the Company recorded $91,000 in net loan recoveries, compared to $887,000 net loan charge-offs for the quarter ended March 31, 2014. The net (recovery) charge-off ratio, which reflects net (recoveries) charge-offs to average loans, was (0.06)% for the quarter ended March 31, 2015, compared to 0.69% for the same period in 2014.

At March 31, 2015, the allowance for credit losses stood at $8,399,000, compared to $8,308,000 at December 31, 2014, a net increase of $91,000 reflecting the net recoveries. The allowance for credit losses as a percentage of total loans was 1.46% at March 31, 2015, and 1.45% at December 31, 2014. Total loans included VCB loans that were recorded at fair value in connection with the acquisition, which stood at $73,187,000 at March 31, 2015 and $77,882,000 at December 31, 2014. Excluding these VCB loans from the calculation, the allowance for credit losses to total gross loans was 1.67% and 1.68% as of March 31, 2015 and December 31, 2014, respectively and general reserves associated with non-impaired loans to total non-impaired loans was 1.67% and 1.62%, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred losses inherent within the loan portfolio at March 31, 2015. 

Total non-performing assets were $14,044,000, or 1.17% of total assets as of March 31, 2015, compared to $14,052,000, or 1.18% of total assets as of December 31, 2014. During the quarter ended March 31, 2015, the Company's total assets increased 0.52%, and total liabilities increased 0.26% compared to December 31, 2014. 

During the fourth quarter of 2014, the Company recorded a provision for credit losses of approximately $8.4 million in connection with the partial charge-off of a single commercial and agricultural relationship. The Company is actively working to collect the remaining non-accrual loan balance of $9,743,000 that arose from that relationship, and any or all of the charge-off, which is secured by real estate and various business and personal assets. Three entities and one individual involved in this relationship have sought bankruptcy protection. The Company continues to pursue all of its legal rights in connection with the collection of this loan relationship, including the filing of a Notice of Default on February 9, 2015. Most of the assets securing these loans were, as of the date of this press release, listed for sale, with any sale now or in the future to be supervised by the Bankruptcy Court. The Company is holding the proceeds from a sale of one of the securing assets that concluded during the first quarter of 2015 pending further disposition while the early stages of the bankruptcies proceed. The Company plans to continue to track and identify any expenses, net of recoveries, associated with the collection efforts of this commercial and agricultural relationship. For the quarter ended March 31, 2015, collection expenses related to this relationship totaled $209,000.

The following provides a reconciliation of the change in non-accrual loans for 2015.

                                 
(In thousands) Balances December 31, 2014   Additions to Non-accrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO     Returns to Accrual Status   Charge-Offs     Balances March 31, 2015
Non-accrual loans:                                              
  Commercial and industrial $ 7,209   $ 105   $ (534 )   $ --     $ --   $ (400 )   $ 6,380
  Agricultural land and production   --     --     --       --       --     --       --
  Real estate   2,831     720     (76 )     --       --     --       3,475
  Real estate construction and land development   --     53     (11 )     --       --     --       42
  Agricultural real estate   360     --     --       --       --     --       360
  Equity loans and lines of credit   1,751     29     (12 )     (227 )     --     --       1,541
  Consumer   19     --     (1 )     --       --     --       18
Restructured loans (non-accruing):                                              
  Commercial and industrial   56     --     (14 )     --       --     --       42
  Real estate   --     25     (1 )     --       --     --       24
  Real estate construction and land development   547     --     --       --       --     --       547
  Equity loans and lines of credit   1,279     --     (12 )     --       --     --       1,267
  Consumer   --     --     --       --       --     --       --
    Total non-accrual $ 14,052   $ 932   $ (661 )   $ (227 )   $ --   $ (400 )   $ 13,696
                                               

The Company's net interest margin (fully tax equivalent basis) was 3.95% for the quarter ended March 31, 2015, compared to 4.24% for the quarter ended March 31, 2014. The decrease in net interest margin in the period-to-period comparison resulted from a decrease in the yield on the Company's investment portfolio and a decrease in the yield on the Company's loan portfolio, offset by a decrease in the Company's cost of funds. Net interest income during the first quarter of 2014 had been positively impacted by the collection of nonaccrual loans totaling $1,618,000 which resulted in a recovery of interest income of $721,000. 

For the quarter ended March 31, 2015, the effective yield on total earning assets decreased 32 basis points to 4.05% compared to 4.37% for the quarter ended March 31, 2014, while the cost of total interest-bearing liabilities decreased 4 basis points to 0.16% compared to 0.20% for the quarter ended March 31, 2014. The cost of total deposits decreased 3 basis points to 0.09% for the quarter ended March 31, 2015, compared to 0.12% for the quarter ended March 31, 2014. 

For the quarter ended March 31, 2015, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, decreased by $997,000, or 0.19%, compared to the quarter ended March 31, 2014 and decreased by $250,000 or 0.05%, compared to the quarter ended December 31, 2014. 

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, decreased to 2.71% for the quarter ended March 31, 2015, compared to 2.74% for the quarter ended March 31, 2014 and 2.87% for the quarter ended December 31, 2014. Total average loans, which generally yield higher rates than investment securities, increased $53,647,000, from $514,379,000 for the quarter ended March 31, 2014 to $568,026,000 for the quarter ended March 31, 2015 and increased by $2,798,000 from $565,228,000 for the quarter ended December 31, 2014. The effective yield on average loans decreased to 5.33% for the quarter ended March 31, 2015, compared to 6.08% for the quarter ended March 31, 2014, and increased the first quarter of 2015 compared to 5.19% for the quarter ended December 31, 2014. 

Net interest income before the provision for credit losses for the quarter ended March 31, 2015 was $9,720,000, compared to $10,099,000 for the quarter ended March 31, 2014 and $10,005,000 for the quarter ended December 31, 2014, a decrease of $379,000 and $285,000 or 3.75% and 2.85%, respectively. Net interest income decreased as a result of yield changes, asset mix changes, an increase in average earning assets, and an increase in interest-bearing liabilities. 

Total average assets for the quarter ended March 31, 2015 were $1,192,520,000 compared to $1,128,628,000 and $1,187,507,000, for the quarters ended March 31, 2014 and December 31, 2014, an increase of $63,892,000 and $5,013,000 or 5.66% and 0.42%, respectively. Total average loans increased $53,647,000, or 10.43% for the quarter ended March 31, 2015 compared to the quarter ended March 31, 2014 and $2,798,000 or 0.50% compared to the quarter ended December 31, 2014. Total average investments, including deposits in other banks and Federal funds sold, decreased to $513,874,000 for the quarter ended March 31, 2015, from $514,871,000 for the quarter ended March 31, 2014, representing a decrease of $997,000 or 0.19%. Total average deposits increased $53,195,000 or 5.40% to $1,038,244,000 for the quarter ended March 31, 2015, compared to $985,049,000 for the quarter ended March 31, 2014. Average interest-bearing deposits increased $29,177,000, or 4.58%, and average non-interest bearing demand deposits increased $24,018,000, or 6.89%, for the quarter ended March 31, 2015, compared to the quarter ended March 31, 2014. The Company's ratio of average non-interest bearing deposits to total deposits was 35.88% for the quarter ended March 31, 2015, compared to 35.38% for the quarter ended March 31, 2014. 

Non-interest income for the quarter ended March 31, 2015 increased $714,000 to $2,691,000, compared to $1,977,000 for the quarter ended March 31, 2014, primarily driven by an increase of $457,000 in net realized gains on sales and calls of investment securities, a $240,000 increase in loan placement fees, a $63,000 increase in service charge income, and a $10,000 increase in Federal Home Loan Bank dividends, partially offset by a $9,000 decrease in interchange fees, and a $55,000 decrease in other income. Non-interest income for the quarter ended March 31, 2015 increased $608,000 to $2,691,000, compared to $2,083,000 for the quarter ended December 31, 2014. 

Non-interest expense for the quarter ended March 31, 2015 increased $552,000, or 6.32%, to $9,288,000 compared to $8,736,000 for the quarter ended March 31, 2014. The net increase year over year was a result of increases in salaries and employee benefits of $252,000, increases in occupancy and equipment expenses of $20,000, increases in professional services of $239,000, increases in Internet banking expenses of $74,000, increases in regulatory assessments of $138,000, increases in license and maintenance contracts of $8,000, and increases in advertising fees of $4,000, offset by decreases in data processing expenses of $169,000 and decreases in ATM/Debit card expenses of $13,000. The increase in professional services was driven by $209,000 related to defending and collecting a deteriorated credit. The increase in salaries and employee benefits was primarily the result of a change in the discount rate used to calculate the present value of nonqualified defined benefit obligations and higher health insurance expenses. During the quarter ended March 31, 2015, other non-interest expenses included increases of $22,000 in telephone expenses, $20,000 in operating losses, $2,000 in armored courier expenses, $4,000 in personnel expenses, $7,000 in donations, and $2,000 in stationery/supplies expenses, offset by decreases of $64,000 in net losses on disposal or writedown of premises and equipment, $11,000 in amortization of software, $8,000 in appraisal fees, $6,000 in postage expenses, as compared to the same period in 2014. Non-interest expense for the quarter ended March 31, 2015 increased $469,000 compared to $8,819,000 for the trailing quarter ended December 31, 2014. 

The Company recorded an income tax provision of $657,000 for the quarter ended March 31, 2015, compared to $724,000 for the quarter ended March 31, 2014. The effective tax rate for the quarter ended March 31, 2015 was 21.04% compared to 21.68% for the quarter ended March 31, 2014. 

"The first quarter financial results overall were good with improvements seen in both loan placement fee income and Investment Center income. Absent the loan collection expenses, our non-interest expenses were in line with expectations. Our loan pipeline remains strong and we expect usage on our Agricultural production lines in the second and third quarters. The water situation in the Central Valley continues to require close monitoring. Fortunately, our Agribusiness clients appear to be prepared and capable of managing their operations based upon the water access available to them. We remain vigilant as to the direct and indirect impact of the drought on our clients and their loans," stated James M. Ford, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.

"As previously indicated, and in honor of Central Valley Community Bank's 35th anniversary, 35 contributions of $1,000 each were to be awarded at the end of the first quarter to San Joaquin Valley nonprofit organizations serving our geographic footprint. I'm pleased to announce that we have overachieved in our celebration by increasing financial contributions in first quarter to over $62,000 and broadening the number of nonprofit organizations from 35 to 80, covering education, health and human services, and economic development. We will continue to focus our passion for investing in our communities throughout the remainder of the year," concluded Ford.

Central Valley Community Bancorp trades on the NASDAQ stock exchange under the symbol CVCY. Central Valley Community Bank, headquartered in Fresno, California, was founded in 1979 and is the sole subsidiary of Central Valley Community Bancorp. Central Valley Community Bank now operates 21 full service offices in Clovis, Exeter, Fresno, Kerman, Lodi, Madera, Merced, Modesto, Oakhurst, Prather, Sacramento, Stockton, Tracy, and Visalia, California. Additionally, the Bank operates Commercial Real Estate Lending, SBA Lending and Agribusiness Lending Departments. Investment services are provided by Investment Centers of America and insurance services are offered through Central Valley Community Insurance Services LLC.

Members of Central Valley Community Bancorp's and the Bank's Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Lead Independent Director), Sidney B. Cox, Edwin S. Darden, Jr., F. T. "Tommy" Elliott, IV, James M. Ford, Steven D. McDonald, Louis McMurray, William S. Smittcamp, and Joseph B. Weirick. Wanda L. Rogers is Director Emeritus.

More information about Central Valley Community Bancorp and Central Valley Community Bank can be found at www.cvcb.com. Also, visit Central Valley Community Bank on Twitter and Facebook.

Forward-looking Statements- Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained herein that are not historical facts, such as statements regarding the Company's current business strategy and the Company's plans for future development and operations, are based upon current expectations. These statements are forward-looking in nature and involve a number of risks and uncertainties. Such risks and uncertainties include, but are not limited to (1) significant increases in competitive pressure in the banking industry; (2) the impact of changes in interest rates, a decline in economic conditions at the international, national or local level on the Company's results of operations, the Company's ability to continue its internal growth at historical rates, the Company's ability to maintain its net interest margin, and the quality of the Company's earning assets; (3) changes in the regulatory environment; (4) fluctuations in the real estate market; (5) changes in business conditions and inflation; (6) changes in securities markets; and (7) the other risks set forth in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2014. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.

 
 
CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS
 
    March 31,   December 31,
(In thousands, except share amounts)   2015   2014
    (Unaudited)    
ASSETS            
Cash and due from banks   $ 27,213   $ 21,316
Interest-earning deposits in other banks     57,974     55,646
Federal funds sold     184     366
      Total cash and cash equivalents     85,371     77,328
Available-for-sale investment securities (Amortized cost of $417,257 at March 31, 2015 and $423,639 at December 31, 2014)     427,811     432,535
Held-to-maturity investment securities (Fair value of $35,486 at March 31, 2015 and $35,096 at December 31, 2014)     32,096     31,964
Loans, less allowance for credit losses of $8,399 at March 31, 2015 and $8,308 at December 31, 2014     568,594     564,280
Bank premises and equipment, net     9,787     9,949
Other real estate owned     348     --
Bank owned life insurance     21,436     20,957
Federal Home Loan Bank stock     4,791     4,791
Goodwill     29,917     29,917
Core deposit intangibles     1,260     1,344
Accrued interest receivable and other assets     16,998     19,118
      Total assets   $ 1,198,409   $ 1,192,183
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Deposits:            
  Non-interest bearing   $ 375,779   $ 376,402
  Interest bearing     666,084     662,750
    Total deposits     1,041,863     1,039,152
             
Junior subordinated deferrable interest debentures     5,155     5,155
Accrued interest payable and other liabilities     16,844     16,831
      Total liabilities     1,063,862     1,061,138
Shareholders' equity:            
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 10,989,383 at March 31, 2015 and 10,980,440 at December 31, 2014     54,277     54,216
Retained earnings     73,918     71,452
Accumulated other comprehensive income, net of tax     6,352     5,377
    Total shareholders' equity     134,547     131,045
      Total liabilities and shareholders' equity   $ 1,198,409   $ 1,192,183
                   
                   
                   
CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF INCOME
 
    For the Three Months Ended
 March 31,
(In thousands, except share and per share amounts)   2015   2014
    (Unaudited)   (Unaudited)
INTEREST INCOME:        
  Interest and fees on loans   $ 7,286   $ 7,618
  Interest on deposits in other banks     46     53
  Interest and dividends on investment securities:            
    Taxable     1,107     1,347
    Exempt from Federal income taxes     1,538     1,402
      Total interest income     9,977     10,420
INTEREST EXPENSE:            
  Interest on deposits     233     297
  Interest on junior subordinated deferrable interest debentures     24     24
      Total interest expense     257     321
    Net interest income before provision for credit losses     9,720     10,099
PROVISION FOR CREDIT LOSSES     --     --
    Net interest income after provision for credit losses     9,720     10,099
NON-INTEREST INCOME:            
  Service charges     871     808
  Appreciation in cash surrender value of bank owned life insurance     154     146
  Interchange fees     278     287
  Loan placement fees     298     58
  Net realized gains on sales and calls of investment securities     726     269
  Federal Home Loan Bank dividends     86     76
  Other income     278     333
    Total non-interest income     2,691     1,977
NON-INTEREST EXPENSES:            
  Salaries and employee benefits     5,163     4,911
  Occupancy and equipment     1,150     1,130
  Professional services     481     242
  Data processing expense     281     450
  ATM/Debit card expenses     137     150
  License & maintenance contracts     138     130
  Regulatory assessments     336     198
  Advertising     159     155
  Internet banking expenses     203     129
  Amortization of core deposit intangibles     84     84
  Other expense     1,156     1,157
    Total non-interest expenses     9,288     8,736
      Income before provision for income taxes     3,123     3,340
PROVISION FOR INCOME TAXES     657     724
    Net income   $ 2,466   $ 2,616
Net income per common share:            
  Basic earnings per common share   $ 0.23   $ 0.24
  Weighted average common shares used in basic computation     10,923,590     10,915,945
  Diluted earnings per common share   $ 0.22   $ 0.24
  Weighted average common shares used in diluted computation     11,002,976     10,998,630
Cash dividends per common share   $ --   $ 0.05
             
             
             
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
For the three months ended Mar. 31, 2015   Dec. 31, 2014     Sep. 30, 2014   Jun. 30, 2014     Mar. 31, 2014
(In thousands, except share and per share amounts)                                
Net interest income $ 9,720   $ 10,005     $ 9,876   $ 9,905     $ 10,099
Provision for credit losses   --     8,385       --     (400 )     --
Net interest income after provision for credit losses   9,720     1,620       9,876     10,305       10,099
Total non-interest income   2,691     2,083       2,061     2,044       1,977
Total non-interest expense   9,288     8,819       9,051     8,734       8,736
Provision (benefit) for income taxes   657     (2,750 )     535     922       724
Net income (loss) $ 2,466   $ (2,366 )   $ 2,351   $ 2,693     $ 2,616
Basic earnings (loss) per common share $ 0.23   $ (0.22 )   $ 0.22   $ 0.25     $ 0.24
Weighted average common shares used in basic computation   10,923,590     10,923,211       10,919,630     10,918,065       10,915,945
Diluted earnings (loss) per common share $ 0.22   $ (0.22 )   $ 0.21   $ 0.24     $ 0.24
Weighted average common shares used in diluted computation   11,002,976     11,000,147       11,014,907     10,999,663       10,998,630
                                 
                                 
                                 
CENTRAL VALLEY COMMUNITY BANCORP  
SELECTED RATIOS  
(Unaudited)  
   
As of and for the three months ended   Mar. 31, 2015     Dec. 31, 2014     Sep. 30, 2014     Jun. 30,
2014
    Mar. 31,
2014
 
(Dollars in thousands, except per share amounts)                                        
Allowance for credit losses to total loans     1.46 %     1.45 %     1.35 %     1.34 %     1.62 %
Nonperforming assets to total assets     1.17 %     1.18 %     0.37 %     0.40 %     0.44 %
Total nonperforming assets   $ 14,044     $ 14,052     $ 4,266     $ 4,632     $ 4,982  
Total nonaccrual loans   $ 13,696     $ 14,052     $ 4,266     $ 4,632     $ 4,982  
Net loan charge-offs (recoveries)   $ (91 )   $ 7,566     $ (182 )   $ 614     $ 887  
Net charge-offs (recoveries) to average loans (annualized)     (0.06 )%     5.35 %     (0.13 )%     0.46 %     0.69 %
Book value per share   $ 12.24     $ 11.93     $ 12.11     $ 11.98     $ 11.55  
Tangible book value per share   $ 9.01     $ 9.09     $ 9.26     $ 9.11     $ 8.66  
Tangible common equity   $ 99,032     $ 99,784     $ 101,668     $ 99,502     $ 94,655  
Cost of total deposits     0.09 %     0.10 %     0.10 %     0.11 %     0.12 %
Interest and dividends on investment securities exempt from Federal income taxes   $ 1,538     $ 1,528     $ 1,469     $ 1,434     $ 1,402  
Net interest margin (calculated on a fully tax equivalent basis) (1)     3.95 %     4.04 %     4.06 %     4.09 %     4.24 %
Return on average assets (2)     0.83 %     (0.80 )%     0.81 %     0.93 %     0.93 %
Return on average equity (2)     7.41 %     (7.06 )%     7.10 %     8.27 %     8.37 %
Loan to deposit ratio     55.38 %     55.10 %     54.99 %     54.02 %     51.91 %
Tier 1 leverage - Bancorp     8.53 %     8.36 %     9.09 %     8.93 %     8.63 %
Tier 1 leverage - Bank     8.50 %     8.31 %     9.02 %     8.89 %     8.59 %
Common Equity Tier 1 - Bancorp (3)     12.96 %     --       --       --       --  
Common Equity Tier 1 - Bank (3)     13.54 %     --       --       --       --  
Tier 1 risk-based capital - Bancorp     13.31 %     13.67 %     14.95 %     14.73 %     14.67 %
Tier 1 risk-based capital - Bank     13.22 %     13.59 %     14.84 %     14.68 %     14.60 %
Total risk-based capital - Bancorp     14.48 %     14.88 %     16.06 %     15.83 %     15.92 %
Total risk based capital - Bank     14.39 %     14.80 %     15.94 %     15.77 %     15.85 %
                                         
(1) Net Interest Margin is computed by dividing annualized quarterly net interest income by quarterly average interest-bearing assets.
(2) Computed by annualizing quarterly net income.
(3) New capital ratio required with new Basel III capital rules that took effect January 1, 2015.
   
   
   
CENTRAL VALLEY COMMUNITY BANCORP  
AVERAGE BALANCES AND RATES  
(Unaudited)  
   
AVERAGE AMOUNTS   For the Quarter Ended
March 31,
 
(Dollars in thousands)   2015     2014  
Federal funds sold   $ 280     $ 239  
Interest-bearing deposits in other banks     61,369       68,761  
Investments     452,225       445,871  
Loans (1)     554,247       507,736  
Federal Home Loan Bank stock     4,791       4,499  
Earning assets     1,072,912       1,027,106  
Allowance for credit losses     (8,947 )     (9,234 )
Non-accrual loans     13,779       6,643  
Other real estate owned     131       32  
Other non-earning assets     114,645       104,081  
Total assets   $ 1,192,520     $ 1,128,628  
                 
Interest bearing deposits   $ 665,674     $ 636,497  
Other borrowings     5,159       5,155  
Total interest-bearing liabilities     670,833       641,652  
Non-interest bearing demand deposits     372,570       348,552  
Non-interest bearing liabilities     16,037       13,460  
Total liabilities     1,059,440       1,003,664  
Total equity     133,080       124,964  
Total liabilities and equity   $ 1,192,520     $ 1,128,628  
                 
AVERAGE RATES                
Federal funds sold     0.25 %     0.25 %
Interest-earning deposits in other banks     0.30 %     0.31 %
Investments     3.04 %     3.11 %
Loans (3)     5.33 %     6.08 %
Earning assets     4.05 %     4.37 %
Interest-bearing deposits     0.14 %     0.19 %
Other borrowings     1.85 %     1.89 %
Total interest-bearing liabilities     0.16 %     0.20 %
Net interest margin (calculated on a fully tax equivalent basis) (2)     3.95 %     4.24 %
                 
(1) Average loans do not include non-accrual loans.
(2) Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds totaled $792 and $722 for the three months ended March 31, 2015 and 2014, respectively.
(3) Loan yield includes interest income for the quarters ended March 31, 2015 and 2014 of $47 and $721, respectively, related to recoveries on non-accrual or charged off loans.