EX-99.1 2 d479980dex991.htm EX-99.1

EX-99.1

Exhibit 99.1

October 25, 2017

Press Release

Source: Farmers National Banc Corp.

Kevin J. Helmick, President and CEO

20 South Broad Street, P.O. Box 555

Canfield, OH 44406

330.533.3341

Email: exec@farmersbankgroup.com

FARMERS NATIONAL BANC CORP. ANNOUNCES

2017 THIRD QUARTER FINANCIAL RESULTS

• Earnings per diluted share increased to $0.22 for the quarter ended September 30, 2017 compared to $0.20 for same quarter in 2016

• 139 consecutive quarters of profitability

• 10% organic loan growth since September 30, 2016

• Annualized return on average assets was 1.12% and annualized return on average equity 10.15% for the quarter ended September 30, 2017

• Non-performing assets to total assets remain at low levels, 0.33% at September 30, 2017

CANFIELD, Ohio (October 25, 2017) – Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three and nine months ended September 30, 2017.

Net income for the three months ended September 30, 2017 was $6.0 million, or $0.22 per diluted share, which compares to $5.4 million, or $0.20 per diluted share, for the three months ended September 30, 2016 and $5.7 million or $0.21 per diluted share for the linked quarter. Excluding acquisition expenses, net income for the three month period ended September 30, 2017 would have been $6.2 million. Annualized return on average assets and return on average equity were 1.12% and 10.15%, respectively, for the three month period ending September 30, 2017, compared to 1.10% and 9.97% for the same three month period in 2016, and 1.11% and 10.25% for the linked quarter. Farmers’ return on average tangible equity (Non-GAAP) was 12.69% for the quarter ended September 30, 2017 compared to 12.73% for the same quarter in 2016 and 12.77% for the linked quarter.

Net income for the nine months ended September 30, 2017 was $17.5 million, or $0.64 per diluted share, compared to $15.2 million or $0.56 per diluted share for the same nine month period in 2016. Return on average assets and return on average equity were 1.14% and 10.41%, respectively, for the nine months ended September 30, 2017, compared to 1.06% and 9.74% for the same period in 2016. Excluding expenses related to acquisition activities, net income for the nine month period ended September 30, 2017 would have been $17.8 million or $0.66 per diluted share.

On March 13, 2017, Farmers entered into an agreement and plan of merger with Monitor Bancorp, Inc. (Monitor), the holding company for The Monitor Bank, located in Holmes County, Ohio. This transaction obtained all regulatory approvals and was completed on August 15, 2017. This transaction serves as an entrance into the attractive Holmes County market for Farmers and will help Farmers continue to grow its market share, balance sheet and earnings. As of August 15, 2017, Monitor had total assets of $42.4 million, which included loans of $19.3 million and deposits of $34.6 million.

Kevin J. Helmick, President and CEO, stated, “In addition to another strong quarter of financial performance, we are pleased to close our fourth acquisition in the past two years. This acquisition further enhances Farmers’ brand and delivers long-term value for our shareholders. We are excited about our success in expanded markets and remain focused on our strategic growth plan which has paved the way for the company to exceed $2 billion in assets in 2017. We also continue to be encouraged by our organic loan growth, which has increased 10% during the past twelve months, and our 5% increase in noninterest income on a year-to-date basis.”

2017 Third Quarter Financial Highlights

• Loan growth

Total loans were $1.55 billion at September 30, 2017, compared to $1.40 billion at September 30, 2016, representing an increase of 11.2%. The increase in loans is a result of Farmers’ focus on loan growth utilizing a talented lending and credit team, while adhering to a sound underwriting discipline. The increase in loans has occurred mainly in the commercial real estate, residential real estate and agricultural loan categories. Loans now comprise 77.6% of the Bank’s average earning assets for the quarter ended September 30, 2017, an improvement compared to 76.5% for the same period in 2016. This improvement, along with the growth in earning assets, has resulted in a 10.7% increase in tax equated loan income in the third quarter of 2017 compared to the same quarter in 2016.

• Loan quality

Non-performing assets to total assets remain at a low level, currently 0.33%. Early stage delinquencies, which are loans 30 – 89 days delinquent, also continue to remain at low levels, at $8.7 million, or 0.56% of total loans, at September 30, 2017. Net charge-offs for the current quarter were $592 thousand, compared to $312 thousand in the same quarter in 2016 and total net charge-offs as a percentage of average net loans outstanding was only 0.16% for the quarter ended September 30, 2017. Lending to the energy sector is insignificant and less than 1% of the loan portfolio.

• Net interest margin

The net interest margin for the three months ended September 30, 2017 was 3.96%, a 1 basis point decrease from the quarter ended September 30, 2016. In comparing the third quarter of 2017 to the same period in 2016, asset yields increased 11 basis points, while the cost of interest-bearing liabilities increased 18 basis points. The net interest margin is impacted by the additional accretion as a result of the discounted loan portfolios acquired in the previous mergers, which increased the net interest margin by 3 and 8 basis points for the quarters ended September 30, 2017 and 2016, respectively.

• Noninterest income

Noninterest income decreased 6.6% to $6.1 million for the quarter ended September 30, 2017 compared to $6.5 million in 2016. Gains on the sale of mortgage loans decreased $305 thousand, or 29% in the current year’s quarter compared to the same quarter in 2016, however it is important to note that on a year-to-date basis gains on the sale of mortgage loans have increased $251 thousand or 12.5%. Investment commissions also decreased $124 thousand or 40.3%. Debit card interchange fees increased $117 thousand or 17.9% in comparing the third quarter of 2017 to the same quarter in 2016.

• Noninterest expenses

Farmers has remained committed to managing the level of noninterest expenses. Total noninterest expenses for the third quarter of 2017 increased to $15.8 million compared to $15.2 million in the same quarter in 2016, primarily as a result of increases in salaries and employee benefits of $556 thousand and merger related costs of $239 thousand, offset by a $220 thousand decrease in other operating expenses. There was also a $53 thousand loss on the sale of land and building during the current quarter compared to none in the same quarter in 2016. It is important to note that annualized noninterest expenses measured as a percentage of quarterly average assets decreased from 3.10% in the third quarter of 2016 to 2.96% in the third quarter of 2017.

• Efficiency ratio

The efficiency ratio for the quarter ended September 30, 2017 improved to 59.9% compared to 60.9% for the same quarter in 2016. The main factors leading to this improvement were the increase in net interest income and the stabilized level of noninterest expenses relative to average assets as explained in the preceding paragraphs.

2017 Outlook

Mr. Helmick added, “We are pleased by the improvement in our financial results for the first 9 months of 2017. We will focus our energy on the seamless integration of our newly acquired bank and customers and we remain committed to the businesses and families we serve and to our community banking approach and culture.”

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $2.2 billion in banking assets and $1 billion in trust assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 39 banking locations in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina, Holmes and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, Farmers Trust Company, which operates three trust offices and offers services in the same geographic markets, and National Associates, Inc. Farmers National Insurance, LLC and Bowers Insurance Agency, Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity and net income excluding costs related to acquisition activity expenses, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements can be found in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016, which has been filed with the Securities and Exchange Commission (SEC) and is available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp. and Subsidiaries

Consolidated Financial Highlights

(Amounts in thousands, except per share results) Unaudited

Consolidated Statements of Income		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016				Sept. 30, 2017				Sept. 30 2016				Percent Change
Total interest income		$	20,551			$	20,042			$	18,850			$	18,469			$	18,332			$	59,443			$	54,029				10.0	%
Total interest expense			1,876				1,669				1,319				1,178				1,139				4,864				3,200				52.0	%
Net interest income			18,675				18,373				17,531				17,291				17,193				54,579				50,829				7.4	%
Provision for loan losses			950				950				1,050				990				1,110				2,950				2,880				2.4	%
Noninterest income			6,058				6,055				5,887				6,076				6,485				18,000				17,168				4.8	%
Merger related costs			270				104				62				19				31				436				544				-19.9	%
Other expense			15,521				15,660				14,551				14,981				15,194				45,732				43,908				4.2	%
Income before income taxes			7,992				7,714				7,755				7,377				7,343				23,461				20,665				13.5	%
Income taxes			2,009				2,004				1,972				2,014				1,967				5,985				5,471				9.4	%
Net income		$	5,983			$	5,710			$	5,783			$	5,363			$	5,376			$	17,476			$	15,194				15.0	%
Average shares outstanding			27,654				27,337				27,278				27,216				27,261				27,698				27,168
Basic and diluted earnings per share			0.22				0.21				0.21				0.20				0.20				0.64				0.56

Consolidated Statements of Income		For the Three Months Ended																				For the Nine Months Ended
		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016				Sept. 30, 2017				Sept. 30 2016				Percent Change
Cash dividends			1,653				1,353				1,353				1,082				1,082				4,359				3,242
Cash dividends per share			0.06				0.05				0.05				0.04				0.04				0.16				0.12
Performance Ratios
Net Interest Margin (Annualized)			3.96	%			4.05	%			4.01	%			3.95	%			3.97	%			4.01	%			4.04	%
Efficiency Ratio (Tax equivalent basis)			59.93	%			60.79	%			58.79	%			60.37	%			60.85	%			59.85	%			62.00	%
Return on Average Assets (Annualized)			1.12	%			1.11	%			1.17	%			1.08	%			1.10	%			1.14	%			1.06	%
Return on Average Equity (Annualized)			10.15	%			10.25	%			10.87	%			9.74	%			9.97	%			10.41	%			9.74	%
Dividends to Net Income			27.63	%			23.70	%			23.40	%			20.18	%			20.13	%			24.94	%			21.34	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets			1.15	%			1.14	%			1.18	%			1.11	%			1.13	%			1.16	%			1.09	%
Return on Average Tangible Equity			12.69	%			12.77	%			13.54	%			12.34	%			12.73	%			12.98	%			12.33	%

Consolidated Statements of Financial Condition

		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016
Assets
Cash and cash equivalents		$	84,006			$	64,640			$	61,251			$	41,778			$	67,372
Securities available for sale			395,235				391,628				377,072				369,995				368,729
Loans held for sale			502				583				1,098				355				2,148
Loans			1,551,437				1,505,273				1,461,461				1,427,635				1,395,620
Less allowance for loan losses			12,104				11,746				11,319				10,852				10,518
Net Loans			1,539,333				1,493,527				1,450,142				1,416,783				1,385,102
Other assets			143,129				135,286				136,924				137,202				137,657
Total Assets		$	2,162,205			$	2,085,664			$	2,026,487			$	1,966,113			$	1,961,008
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing		$	413,991			$	387,596			$	374,399			$	366,870			$	352,441
Interest-bearing			1,195,533				1,153,407				1,165,821				1,157,886				1,139,724
Total deposits			1,609,524				1,541,003				1,540,220				1,524,756				1,492,165
Other interest-bearing liabilities			295,270				298,827				245,069				213,496				235,757
Other liabilities			19,348				19,147				23,136				14,645				17,649
Total liabilities			1,924,142				1,858,977				1,808,425				1,752,897				1,745,571
Stockholders’ Equity			238,063				226,687				218,062				213,216				215,437
Total Liabilities
and Stockholders’ Equity		$	2,162,205			$	2,085,664			$	2,026,487			$	1,966,113			$	1,961,008
Period-end shares outstanding			27,544				27,067				27,067				27,048				27,048
Book value per share		$	8.64			$	8.38			$	8.06			$	7.88			$	7.96
Tangible book value per share (Non-GAAP)*			6.98				6.73				6.40				6.21				6.29
*  Tangible book value per share is calculated by dividing tangible common equity by average outstanding shares
Capital and Liquidity
Common Equity Tier 1 Capital Ratio (a)			11.95	%			11.80	%			11.75	%			11.69	%			11.67	%
Total Risk Based Capital Ratio (a)			12.67	%			12.67	%			12.61	%			12.53	%			12.51	%
Tier 1 Risk Based Capital Ratio (a)			11.95	%			11.93	%			11.89	%			11.83	%			11.81	%
Tier 1 Leverage Ratio (a)			9.60	%			9.47	%			9.47	%			9.41	%			9.35	%
Equity to Asset Ratio			11.01	%			10.87	%			10.76	%			10.84	%			10.99	%

		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016
Tangible Common Equity Ratio			9.08	%			8.93	%			8.74	%			8.75	%			8.88	%
Net Loans to Assets			71.19	%			71.61	%			71.56	%			72.06	%			70.63	%
Loans to Deposits			96.39	%			97.68	%			94.89	%			93.63	%			93.53	%
Asset Quality
Non-performing loans		$	6,900			$	6,355			$	6,553			$	8,170			$	8,003
Other Real Estate Owned			219				236				318				482				506
Non-performing assets			7,119				6,591				6,871				8,652				8,509
Loans 30 – 89 days delinquent			8,680				7,052				8,258				12,747				10,986
Charged-off loans			809				725				943				841				562
Recoveries			217				202				360				185				250
Net Charge-offs			592				523				583				656				312
Annualized Net Charge-offs to Average Net Loans Outstanding			0.16	%			0.14	%			0.16	%			0.20	%			0.09	%
Allowance for Loan Losses to Total Loans			0.78	%			0.78	%			0.77	%			0.76	%			0.75	%
Non-performing Loans to Total Loans			0.44	%			0.42	%			0.45	%			0.57	%			0.57	%
Allowance to Non-performing Loans			175.42	%			184.83	%			172.73	%			132.83	%			131.43	%
Non-performing Assets to Total Assets			0.33	%			0.32	%			0.34	%			0.44	%			0.43	%

(a) September 30, 2017 ratio is estimated

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity																						For the Nine Months Ended
		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016				Sept. 30, 2017				Sept. 30 2016
Stockholders’ Equity		$	238,063			$	226,687			$	218,062			$	213,216			$	215,437			$	238,063			$	215,437
Less Goodwill and other intangibles			45,936				44,425				44,789				45,154				45,299				45,936				45,299
Tangible Common Equity		$	192,127			$	182,262			$	173,273			$	168,062			$	170,138			$	192,127			$	170,138
Average Stockholders’ Equity			233,843				223,544				215,819				219,028				214,484				224,496				208,281
Less Average Goodwill and other intangibles			45,263				44,665				45,028				45,173				45,575				44,986				43,986
Average Tangible Common Equity		$	188,580			$	178,879			$	170,791			$	173,855			$	168,909			$	179,510			$	164,295
Reconciliation of Total Assets to Tangible Assets																						For the Nine Months Ended
		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016				Sept. 30, 2017				Sept. 30 2016
Total Assets		$	2,162,205			$	2,085,664			$	2,026,487			$	1,966,113			$	1,961,008			$	2,162,205			$	1,961,008
Less Goodwill and other intangibles			45,936				44,425				44,789				45,154				45,299				45,936				45,299
Tangible Assets		$	2,116,269			$	2,041,239			$	1,981,698			$	1,920,959			$	1,915,709			$	2,116,269			$	1,915,709
Average Assets			2,118,170				2,055,758				2,001,084				1,977,589				1,949,204				2,056,800				1,909,500
Less average Goodwill and other intangibles			45,263				44,665				45,028				45,173				45,575				44,986				43,986
Average Tangible Assets		$	2,072,907			$	2,011,093			$	1,956,056			$	1,932,416			$	1,903,629			$	2,011,814			$	1,865,514

Reconciliation of Net Income, Excluding Costs Related to Acquisition Activities																						For the Nine Months Ended
		For the Three Months Ended
		Sept. 30, 2017				June 30, 2017				March 31, 2017				Dec. 31, 2016				Sept. 30, 2016				Sept. 30, 2017				Sept. 30 2016
Income before income taxes – Reported		$	7,992			$	7,714			$	7,755			$	7,377			$	7,343			$	23,461			$	20,665
Acquisition Costs			270				104				62				19				31				436				544
Income before income taxes – Adjusted			8,262				7,818				7,817				7,396				7,374				23,897				21,209
Income tax expense (b)			2,089				2,014				1,987				2,018				1,973				6,090				5,618
Net income – Adjusted		$	6,173			$	5,804			$	5,830			$	5,378			$	5,401			$	17,807			$	15,591

(b) The income tax expense change from actual income tax expense relates to the deductibility of certain acquisition costs    

		For the Three Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,
End of Period Loan Balances		2017				2017				2017				2016				2016
Commercial real estate		$	500,426			$	476,844			$	456,917			$	446,975			$	426,657
Commercial			218,946				215,676				208,913				204,771				207,228
Residential real estate			459,702				445,991				441,593				430,674				423,009
Consumer			213,918				220,454				216,648				212,836				205,466
Agricultural loans			155,336				142,687				133,868				128,981				129,959
Total, excluding net deferred loan costs		$	1,548,328			$	1,501,652			$	1,457,939			$	1,424,237			$	1,392,319
		For the Three Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,
Noninterest Income		2017				2017				2017				2016				2016
Service charges on deposit accounts		$	1,077			$	989			$	951			$	1,031			$	1,057
Bank owned life insurance income			193				191				201				208				194
Trust fees			1,608				1,523				1,678				1,482				1,693
Insurance agency commissions			531				672				674				559				569
Security gains			0				(14	)			13				1				31
Retirement plan consulting fees			480				399				513				444				561
Investment commissions			184				253				222				310				308
Net gains on sale of loans			758				891				607				838				1,063
Debit card and EFT fees			770				836				653				722				653
Other operating income			457				315				375				481				356
Total Noninterest Income		$	6,058			$	6,055			$	5,887			$	6,076			$	6,485
		For the Three Months Ended
		Sept. 30,				June 30,				March 31,				Dec. 31,				Sept. 30,
Noninterest Expense		2017				2017				2017				2016				2016
Salaries and employee benefits		$	8,922			$	8,853			$	8,287			$	8,248			$	8,366
Occupancy and equipment			1,546				1,631				1,587				1,748				1,587
State and local taxes			436				424				417				363				394
Professional fees			726				775				747				803				671
Merger related costs			270				104				62				19				31
Litigation settlement expense			0				155				0				0				0
Advertising			405				317				244				241				383
FDIC insurance			235				234				235				199				287
Intangible amortization			379				364				365				368				421
Core processing charges			702				717				655				743				738
Telephone and data			249				242				241				275				206
Other operating expenses			1,921				1,948				1,773				1,993				2,141
Total Noninterest Expense		$	15,791			$	15,764			$	14,613			$	15,000			$	15,225

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

		Three Months Ended September 30, 2017												Three Months Ended September 30, 2016
		AVERAGE BALANCE				INTEREST (1)				RATE (1)				AVERAGE BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	1,517,589			$	17,952				4.69	%		$	1,365,637			$	16,212				4.72	%
Taxable securities			215,490				1,271				2.34				229,630				1,160				2.01
Tax-exempt securities (2)			173,113				1,887				4.32				131,714				1,365				4.12
Equity securities			10,474				136				5.15				9,607				177				7.33
Federal funds sold and other			38,815				126				1.29				47,850				54				0.45
Total earning assets			1,955,481				21,372				4.34				1,784,438				18,968				4.23
Nonearning assets			162,689												164,766
Total assets		$	2,118,170											$	1,949,204
INTEREST-BEARING LIABILITIES
Time deposits		$	242,654			$	680				1.11	%		$	250,268			$	490				0.78	%
Savings deposits			525,919				189				0.14				552,037				191				0.14
Demand deposits			406,123				313				0.31				322,511				177				0.22
Short term borrowings			280,490				644				0.91				215,859				166				0.31
Long term borrowings			9,333				50				2.13				19,404				115				2.36
Total interest-bearing liabilities		$	1,464,519				1,876				0.51			$	1,360,079				1,139				0.33
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits			405,959												359,291
Other liabilities			13,849												15,350
Stockholders’ equity			233,843												214,484
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	2,118,170											$	1,949,204
Net interest income and interest rate spread						$	19,496				3.83	%						$	17,829				3.90	%
Net interest margin											3.96	%											3.97	%

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.

(2) For 2017, adjustments of $166 thousand and $655 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2016, adjustments of $164 thousand and $472 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 35%, less disallowances.

		Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016
		AVERAGE BALANCE				INTEREST (1)				RATE (1)				AVERAGE BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	1,475,807			$	52,162				4.73	%		$	1,326,536			$	47,429				4.78	%
Taxable securities			214,552				3,654				2.28				245,578				3,885				2.11
Tax-exempt securities			163,539				5,317				4.35				130,010				4,098				4.21
Equity securities (2)			10,207				374				4.90				9,601				403				5.61
Federal funds sold and other			35,148				271				1.03				33,625				119				0.47
Total earning assets			1,899,253				61,778				4.35				1,745,350				55,934				4.28
Nonearning assets			157,547												164,150
Total assets		$	2,056,800											$	1,909,500
INTEREST-BEARING LIABILITIES
Time deposits		$	237,695			$	1,833				1.03	%		$	247,327			$	1,371				0.74	%
Savings deposits			524,154				542				0.14				541,746				501				0.12
Demand deposits			396,791				838				0.28				321,302				486				0.20
Short term borrowings			267,217				1,472				0.74				213,341				485				0.30
Long term borrowings			10,432				179				2.29				20,719				357				2.30
Total interest-bearing liabilities		$	1,436,289				4,864				0.45			$	1,344,435				3,200				0.32
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits		$	382,963											$	342,673
Other liabilities			13,052												14,111
Stockholders’ equity			224,496												208,281
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	2,056,800											$	1,909,500
Net interest income and interest rate spread						$	56,914				3.90	%						$	52,734				3.96	%
Net interest margin											4.01	%											4.04	%

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.

(2) For 2017, adjustments of $491 thousand and $1.8 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2016, adjustments of $488 thousand and $1.4 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 35%, less disallowances.