Loading, Please Wait...

CST: 14/11/2018 16:21:04   

County Bancorp, Inc. Announces Net Income of $3.9 Million for the Second Quarter of 2018

118 Days ago

Highlights

  • Net income of $3.9 million for the second quarter of 2018
  • Diluted earnings per share of $0.55 for the second quarter of 2018
  • Loan growth of $17.0 million during the second quarter of 2018, an increase of 1.5%
  • Gross loans serviced increased $17.5 million during the second quarter, an increase of 2.9%
  • Deposit growth of $38.0 million during the second quarter of 2018, an increase of 3.2%

MANITOWOC, Wis., July 19, 2018 (GLOBE NEWSWIRE) -- County Bancorp, Inc. (Nasdaq:ICBK), the holding company of Investors Community Bank, an agricultural and commercial bank headquartered in Manitowoc, Wisconsin, reported net income of $3.9 million, or $0.55 diluted earnings per share, for the second quarter of 2018, compared to net income of $4.1 million, or $0.58 diluted earnings per share, for the first quarter of 2018 and $2.1 million, or $0.29 diluted earnings per share, for the second quarter of 2017, respectively.  This represents a return on average assets of 1.04% for the quarter ended June 30, 2018, compared to 1.15% for the quarter ended March 31, 2018 and 0.65% for the quarter ended June 30, 2017, respectively.

“We had another solid quarter from a net income perspective,” said Timothy J. Schneider, President of County Bancorp, Inc. and CEO of Investors Community Bank.  “As deposit gathering competition continues to accelerate, we have seen some contraction in net interest margin.  Borrowers and competitors are adjusting to the rising rate environment which is something that we haven’t seen in a decade; however, we remain disciplined in today’s ultra-competitive market.  Our non-interest income continues to see improvement over early last year due to additional government guaranteed sales and participations.” 

Schneider added, “Non-performing assets continue to rise, primarily due to the continued challenges in the dairy space. This is further complicated by recent tariff and “trade war” discussions out of Washington, DC.  With the continued volatility in the dairy market pricing, we expect additional stress in our agricultural portfolio for the balance of the year. We continue to be diligent in monitoring our classified agricultural credits and remain committed to working through this cycle in agriculture.” 

Loans and Total Assets

Total assets at June 30, 2018 were $1.5 billion, an increase of $121.8 million, or 8.7%, and $232.2 million, or 18.1%, over total assets as of December 31, 2017 and June 30, 2017, respectively.  Total loans were $1.2 billion at June 30, 2018, which represents a $32.6 million, or 2.8%, and $105.9 million, or 9.8%, increase over total loans at December 31, 2017 and June 30, 2017, respectively.   We continued to see solid loan demand in all of our market areas. 

In addition to the on-balance sheet loan growth, participated loans that we continue to service totaled $628.4 million at June 30, 2018, which is an increase of $27.8 million, or 4.6%, and $39.5 million, or 6.7%, over participated loans that we continue to service at December 31, 2017 and June 30, 2017, respectively.

Deposits

Total deposits at June 30, 2018 were $1.2 billion, an increase of $100.4 million, or 9.0%, and $216.8 million, or 21.8%, over total deposits as of December 31, 2017 and June 30, 2017, respectively.  Core deposit (demand deposits, money market accounts, and certificates of deposit) increased $17.8 million during the first half of 2018. We continue to supplement our deposit needs with wholesale deposits, which include brokered deposits and national certificates of deposit.  Brokered deposits and national certificates of deposit at June 30, 2018 were $507.5 million, which was an increase of $82.5 million, or 19.4%, from December 31, 2017, and an increase of $122.9 million, or 32.0%, from June 30, 2017. 

Net Interest Income and Margin

Net interest income improved $0.1 million from the three months ended March 31, 2018 to $10.3 million for three months ended June 30, 2018.  For the three months ended June 30, 2018, net interest income increased to $10.3 million from $9.6 million for the three months ended June 30, 2017, primarily due to growth in loans and securities available for sale.

For the six months ended June 30, 2018, net interest income improved 9.9% to $20.6 million from $18.8 million for the six months ended June 30, 2017.

Net interest margin decreased to 2.87% for the three months ended June 30, 2018, compared to 3.01% and 3.13% for the three months ended March 31, 2018 and June 30, 2017, respectively.  The decline reflected the impact of the prime rate increasing twice during the first half of 2018 which resulted in costs related to deposits and borrowings increasing more than the yields on loans and investments. Net interest margin for the three months ended June 30, 2018 was also negatively impacted by six basis points due to the reversal of interest income related to $8.6 million of loans that were transferred to non-accrual status during the second quarter of 2018; however, it was offset by a five basis point improvement from the fair value accretion related to loans acquired in our 2016 acquisition of The Business Bank. 

Yields on interest bearing assets increased by 0.06% between the second quarter of 2018 and the first quarter of 2018 while the cost of interest bearing liabilities increased by 0.23% between the same periods.  For the six months ended June 30, 2018, yields on interest bearing assets increased by 0.17%, and the cost of interest bearing liabilities increased by 0.40% compared to the six months ended June 30, 2017.

During the second quarter of 2018, the Company entered into a subordinated note purchase agreement to sell and issue $30.0 million of notes to certain institutional investors.  The notes carry a fixed interest rate of 5.875% until May 31, 2023, and have a stated maturity of June 1, 2028.   As of June 1, 2023, the notes are redeemable in whole or in part, and bear an interest rate of 3-month LIBOR plus 288.4 basis points.  The notes are unsecured, subordinated obligations of the Company and rank junior in right of payment to the Company’s current and future senior indebtedness.

Non-Interest Income and Expense

Non-interest income for the three months ended June 30, 2018 increased by $0.3 million, or 13.5%, to $2.3 million compared to the three months ended March 31, 2018, primarily the result of increased service charges and loan servicing rights related to the increased volume of loans being serviced.

Non-interest income for the three months ended June 30, 2018 increased $0.4 million, or 24.8%, to $2.3 million compared to $1.9 million for the three months ended June 30, 2017.  For the six months ended June 30, 2018 non-interest income increased $0.8 million, or 21.9%, to $4.4 million from the six months ended June 30, 2017.  Both the quarterly and year-to-date increases are directly related to increases in loan servicing rights which was the result of higher volumes of loans being serviced.

Non-interest expense for the three months ended June 30, 2018 increased by $0.2 million, or 2.2%, to $6.9 million compared to the three months ended March 31, 2018 primarily due to an increase in occupancy and information processing expense directly related to our new headquarters that was purchased late in the first quarter of 2018, as well as increases in writedown of OREO and other expenses. 

Non-interest expense for the quarter ended June 30, 2018 increased $0.3 million, or 4.5%, to $6.9 million from $6.6 million for the quarter ended June 30, 2017.  For the six months ended June 30, 2018, non-interest expense increased $1.2 million, or 9.5%, to $13.7 million compared to the six months ended June 30, 2017.  These increases were primarily related to increases in employee compensation and benefits.  Small increases quarter-over-quarter in occupancy and information processing were partially offset by gains on the sale of two OREO properties in the second quarter of 2018 and decreases in professional fees and business development between the two quarters.

Asset Quality

Non-performing assets as a percent of total assets increased to 2.3% at June 30, 2018, from 1.83% at March 31, 2018 and 1.47% at June 30, 2017.  At June 30, 2018, non-performing assets were $34.9 million, up from $26.7 million at March 31, 2018 and $18.9 million at June 30, 2017. During the second quarter of 2018, non-performing loans increased $8.6 million due to three agricultural relationships and two commercial relationships being put on non-accrual status.  Total impairment on these non-performing loans totaled $218,000 and was included in the allowance for loan losses.  Two properties were transferred from non-accrual status into OREO and two properties were sold out of OREO resulting in a net decrease of $0.4 million in OREO during the quarter ended June 30, 2018.

A provision for loan losses of $0.5 million was recorded for the three months ended June 30, 2018 compared to a provision of $0.1 million and $1.5 million for the three months ended March 31, 2018 and June 30, 2017, respectively.  For the six months ended June 30, 2018, the provision for loan losses was $0.6 million compared to $2.3 million for the six months ended June 30, 2017.  The decrease in provision expense year-over-year is primarily the result of a $1.2 million recovery that took place during the first quarter of 2018.

About County Bancorp, Inc.

County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and our wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin.  The state of Wisconsin is often referred to as “America’s Dairyland,” and one of the niches we have developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending.  We also serve business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin.  Our customers are served from our full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and our loan production offices in Darlington, Eau Claire, Fond du Lac, and Sheboygan.

Forward-Looking Statements

This press release includes "forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking statements presented in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Factors that may cause actual results to differ materially from those made or suggested by the forward-looking statements contained in this press release include those identified in County Bancorp, Inc.’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission.  Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Investor Relations Contact
Glen L. Stiteley
EVP - CFO, Investors Community Bank
Phone: (920) 686-5658
Email: gstiteley@icbk.com     

                               
                               
County Bancorp, Inc.
Consolidated Financial Summary
(Unaudited)
  June 30,
2018
    March 31,
2018
    December 31,
2017
    September 30,
2017
    June 30,
2017
 
                                         
    (dollars in thousands, except per share data)  
Period-End Balance Sheet:                                        
Assets                                        
Cash and cash equivalents   $ 81,044     $ 90,676     $ 66,771     $ 71,795     $ 35,939  
Securities available for sale, at fair value     187,505       141,360       126,030       107,242       115,148  
Loans held for sale     11,468       6,407       6,575       2,054       8,036  
Agricultural loans     702,426       698,106       686,430       675,856       643,978  
Commercial loans     407,609       406,096       407,036       397,989       380,606  
Multi-family real estate loans     65,713       54,514       49,133       45,943       43,879  
Residential real estate loans     5,437       5,512       6,005       6,584       7,060  
Installment and consumer other     339       297       347       229       145  
Total loans     1,181,524       1,164,525       1,148,951       1,126,601       1,075,668  
Allowance for loan losses     (15,129 )     (14,612 )     (13,247 )     (13,625 )     (13,503 )
Net loans     1,166,395       1,149,913       1,135,704       1,112,976       1,062,165  
Other assets     72,465       71,901       61,965       65,258       65,346  
Total Assets   $ 1,518,877     $ 1,460,257     $ 1,397,045     $ 1,359,325     $ 1,286,634  
                                         
Liabilities and Shareholders'
 Equity
                                       
Demand deposits   $ 95,459     $ 101,167     $ 125,584     $ 118,815     $ 102,569  
NOW accounts and interest checking     51,674       48,212       51,613       46,178       47,811  
Savings     6,833       6,189       6,751       6,402       5,727  
Money market accounts     204,332       199,834       199,118       169,612       164,061  
Time deposits     344,619       314,766       301,760       297,617       288,876  
Brokered deposits     323,561       319,692       282,616       281,205       235,785  
National time deposits     183,953       182,530       142,635       146,265       148,834  
Total deposits     1,210,431       1,172,390       1,110,077       1,066,094       993,663  
FHLB advances     108,200       120,500       121,500       128,300       133,300  
Subordinated debentures     44,725       15,540       15,523       15,506       15,487  
Other liabilities     9,439       9,013       8,959       9,696       7,930  
Total Liabilities     1,372,795       1,317,443       1,256,059       1,219,596       1,150,380  
                                         
Shareholders' equity     146,082       142,814       140,986       139,729       136,254  
Total Liabilities and Shareholders'  Equity   $ 1,518,877     $ 1,460,257     $ 1,397,045     $ 1,359,325     $ 1,286,634  
                                         
Stock Price Information:                                        
High - Year-to-date   $ 33.76     $ 33.76     $ 35.89     $ 35.89     $ 35.89  
Low - Year-to-date   $ 25.72     $ 26.61     $ 22.73     $ 22.73     $ 22.73  
Market price - Quarter-end   $ 27.50     $ 29.21     $ 29.76     $ 30.05     $ 24.00  
Book value per share   $ 20.63     $ 20.17     $ 19.93     $ 19.79     $ 19.31  
Tangible book value per share (1)   $ 19.77     $ 19.29     $ 19.04     $ 18.87     $ 18.38  
Average diluted shares of common stock quarter-to-date     6,769,936       6,768,965       6,768,939       6,757,648       6,701,578  
Common shares outstanding     6,693,447       6,684,923       6,673,381       6,657,601       6,641,159  
                                         
Non-Performing Assets:                                        
Nonaccrual loans   $ 26,305     $ 17,746     $ 11,559     $ 12,862     $ 12,412  
Other real estate owned (2)     8,607       8,982       4,565       6,576       6,520  
Total non-performing assets   $ 34,912     $ 26,728     $ 16,124     $ 19,438     $ 18,932  
                                         
Restructured loans not on nonaccrual   $ 11,173     $ 10,488     $ 9,019     $ 8,087     $ 4,523  
                                         
Non-performing assets as a % of total assets     2.30 %     1.83 %     1.15 %     1.43 %     1.47 %
Allowance for loan losses as a % of nonaccrual loans     57.51 %     82.34 %     114.60 %     105.93 %     108.79 %
Allowance for loan losses as a % of total loans     1.28 %     1.25 %     1.15 %     1.21 %     1.26 %
Net charge-offs (recoveries) quarter-to-date   $ 16     $ (1,268 )   $ 390     $ (89 )   $ 1,449  
Provision for loan loss quarter-to-date   $ 533     $ 97     $ 12     $ 33     $ 1,524  

(1) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
(2) Does not include $0.4 million of bank property transferred from premises and equipment which is not considered a non-performing asset.

       
       
    For the Three Months Ended  
    June 30,
2018
    March 31,
2018
    December 31,
2017
    September 30,
2017
    June 30,
2017
 
                                         
    (dollars in thousands, except per share data)  
Selected Income Statement Data:                                        
Interest and Dividend Income                                        
Loans, including fees   $ 14,366     $ 13,691     $ 13,443     $ 13,070     $ 12,328  
Taxable securities     982       632       462       461       460  
Tax-exempt securities     14       157       88       82       83  
Federal funds sold and other     401       213       256       102       81  
Total interest and dividend income     15,763       14,693       14,249       13,715       12,952  
                                         
  Interest Expense                                        
Deposits     4,600       3,796       3,464       3,108       2,806  
FHLB advances and other borrowed funds     487       484       481       511       464  
Subordinated debentures     338       143       135       135       125  
Total interest expense     5,425       4,423       4,080       3,754       3,395  
Net interest income     10,338       10,270       10,169       9,961       9,557  
Provision for loan losses     533       97       12       33       1,524  
Net interest income after provision for
 loan losses
    9,805       10,173       10,157       9,928       8,033  
                                         
  Non-Interest Income                                        
Services charges     445       365       332       350       399  
Gain on sale of loans, net     45       32       22       47       24  
Loan servicing fees     1,486       1,452       1,483       1,469       1,437  
Loan servicing rights     127       10       (37 )     94       (167 )
Income on OREO     45       32       16       20       20  
Other     168       149       178       107       143  
Total non-interest income     2,316       2,040       1,994       2,087       1,856  
                                         
  Non-Interest Expense                                        
Employee compensation and benefits     4,114       4,218       3,702       3,845       3,833  
Occupancy     278       204       135       162       180  
Information processing     529       465       423       450       397  
Professional fees     359       315       406       414       423  
Business development     260       299       210       275       286  
OREO expenses     152       140       17       50       44  
Writedown of OREO     104       -       820       8       78  
Net loss (gain) on OREO     (149 )     -       10       39       (27 )
Depreciation and amortization     324       314       319       323       323  
Other     966       830       1,123       725       1,104  
Total non-interest expense     6,937       6,785       7,165       6,291       6,641  
Income before income taxes     5,184       5,428       4,986       5,724       3,248  
Income tax expense     1,334       1,374       2,855       2,120       1,190  
NET INCOME   $ 3,850     $ 4,054     $ 2,131     $ 3,604     $ 2,058  
                                         
Other Data:                                        
Return on average assets     1.04 %     1.15 %     0.62 %     1.11 %     0.65 %
Return on average shareholders' equity     10.63 %     11.62 %     6.05 %     10.36 %     6.04 %
Return on average common shareholders' equity (1)     10.96 %     12.04 %     6.12 %     10.72 %     6.15 %
Efficiency ratio (1)     55.18 %     55.12 %     52.11 %     51.83 %     57.74 %
Tangible common equity to tangible assets (1)     8.75 %     8.87 %     9.13 %     9.29 %     9.53 %
                                         
Per Common Share Data:                                        
Basic   $ 0.56     $ 0.59     $ 0.31     $ 0.53     $ 0.30  
Diluted   $ 0.55     $ 0.58     $ 0.30     $ 0.52     $ 0.29  
Dividends declared   $ 0.07     $ 0.07     $ 0.06     $ 0.06     $ 0.06  

  (1)   This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.

       
       
      For the Three Months Ended  
Non-GAAP Financial Measures:   June 30,
2018
    March 31,
2018
    December 31,
2017
    September 30,
2017
    June 30,
2017
 
                                         
    (dollars in thousands)  
Return on average common shareholders'
  equity reconciliation:
                                       
Return on average shareholders' equity     10.63 %     11.62 %     6.05 %     10.36 %     6.04 %
Effect of excluding average preferred shareholders' equity     0.33 %     0.42 %     0.07 %     0.36 %     0.11 %
Return on average common shareholders' equity     10.96 %     12.04 %     6.12 %     10.72 %     6.15 %
                                         
Efficiency ratio GAAP to non-GAAP
  reconciliation:
                                       
Non-interest expense   $ 6,937     $ 6,785     $ 7,165     $ 6,291     $ 6,641  
Less: net gain (loss) on sales and write-downs of OREO     45       -       (830 )     (47 )     (51 )
Adjusted non-interest expense (non-GAAP)   $ 6,982     $ 6,785     $ 6,335     $ 6,244     $ 6,590  
                                         
Net interest income   $ 10,338     $ 10,270     $ 10,169     $ 9,961     $ 9,557  
Non-interest income     2,316       2,040       1,994       2,087       1,856  
Less: net gain on sales of securities     -       -       (6 )     -       -  
Operating revenue   $ 12,654     $ 12,310     $ 12,157     $ 12,048     $ 11,413  
Efficiency ratio     55.18 %     55.12 %     52.11 %     51.83 %     57.74 %
                                         
    June 30,
2018
    March 31,
2018
    December 31,
2017
    September 30,
2017
    June 30,
2017
 
                                         
    (dollars in thousands, except share and per share data)  
Tangible book value per share and
  tangible common equity to tangible
  assets reconciliation:
                                       
Common equity   $ 138,082     $ 134,814     $ 132,986     $ 131,729     $ 128,254  
Less: Goodwill     5,038       5,038       5,038       5,038       5,038  
Less: Core deposit intangible, net of amortization     701       806       919       1,038       1,165  
Tangible common equity (non-GAAP)   $ 132,343     $ 128,970     $ 127,029     $ 125,653     $ 122,051  
Common shares outstanding     6,693,447       6,684,923       6,673,381       6,657,601       6,641,159  
Tangible book value per share   $ 19.77     $ 19.29     $ 19.04     $ 18.87     $ 18.38  
                                         
Total assets   $ 1,518,877     $ 1,460,257     $ 1,397,045     $ 1,359,325     $ 1,286,634  
Less: Goodwill     5,038       5,038       5,038       5,038       5,038  
Less: Core deposit intangible, net of amortization     701       806       919       1,038       1,165  
Tangible assets (non-GAAP)   $ 1,513,138     $ 1,454,413     $ 1,391,088     $ 1,353,249     $ 1,280,431  
Tangible common equity to tangible assets     8.75 %     8.87 %     9.13 %     9.29 %     9.53 %
                                         
Pre-tax pre-provision core income                                        
Pre-tax net income   $ 5,184     $ 5,428     $ 4,986     $ 5,724     $ 3,248  
Provision for loan losses     533       97       12       33       1,524  
Gain on sale of securities     -       -       (6 )     -       -  
Loss on sale of old Green Bay branch location     -       -       -       -       328  
Acceleration of business development expenses     -       -       350       -       -  
Net loss (gain) on sales and write-downs of OREO     45       -       (830 )     (47 )     (51 )
Net OREO expense     108       108       1       30       24  
Pre-tax pre-provision core income (non-GAAP)   $ 5,870     $ 5,633     $ 4,513     $ 5,740     $ 5,073  


       
       
    For the Three Months Ended  
    June 30, 2018     June 30, 2017  
    Average
Balance (1)
    Income/
Expense
    Yields/
Rates
    Average
Balance (1)
    Income/
Expense
    Yields/
Rates
 
                                                 
    (dollars in thousands)  
Assets                                                
Investment securities   $ 158,260     $ 996       2.52 %   $ 113,453     $ 544       1.92 %
Loans (2)     1,187,719       14,366       4.84 %     1,064,808       12,328       4.63 %
Interest bearing deposits due from other
  banks
    100,646       401       1.59 %     44,218       80       0.72 %
Total interest-earning assets   $ 1,446,625     $ 15,763       4.36 %   $ 1,222,479     $ 12,952       4.24 %
                                                 
Allowance for loan losses     (14,918 )                     (14,162 )                
Other assets     57,878                       52,639                  
Total assets   $ 1,489,585                     $ 1,260,956                  
                                                 
Liabilities                                                
Savings, NOW, money market, interest
  checking
  $ 279,958       789       1.13 %   $ 235,196       370       0.63 %
Time deposits     819,037       3,811       1.86 %     643,236       2,436       1.51 %
Total interest-bearing deposits   $ 1,098,995     $ 4,600       1.67 %   $ 878,432     $ 2,806       1.28 %
Other borrowings     1,167       14       4.79 %     1,605       23       5.73 %
FHLB advances     117,327       473       1.61 %     131,102       441       1.35 %
Junior subordinated debentures     25,547       338       5.29 %     15,470       125       3.23 %
Total interest-bearing liabilities   $ 1,243,036     $ 5,425       1.75 %   $ 1,026,609     $ 3,395       1.32 %
                                                 
Non-interest-bearing deposits     93,876                       89,930                  
Other liabilities     7,829                       8,162                  
Total liabilities   $ 1,344,741                     $ 1,124,701                  
                                                 
Shareholders' equity     144,844                       136,255                  
Total liabilities and equity   $ 1,489,585                     $ 1,260,956                  
                                                 
Net interest income           $ 10,338                     $ 9,557          
Interest rate spread (3)                     2.61 %                     2.92 %
Net interest margin (4)                     2.87 %                     3.13 %
Ratio of interest-earning assets to interest-
  bearing liabilities
    1.16                       1.19                  

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.

       
       
    For the Six Months Ended  
    June 30, 2018     June 30, 2017  
    Average
Balance (1)
    Income/
Expense
    Yields/
Rates
    Average
Balance (1)
    Income/
Expense
    Yields/
Rates
 
                                                 
    (dollars in thousands)  
                                                 
Assets                                                
Investment securities   $ 147,553     $ 1,785       2.42 %   $ 116,139     $ 1,065       1.83 %
Loans (2)     1,180,294       28,057       4.75 %     1,054,131       23,882       4.53 %
Interest bearing deposits due from other
  banks
    87,012       614       1.41 %     40,607       141       0.69 %
Total interest-earning assets   $ 1,414,859     $ 30,456       4.31 %   $ 1,210,877     $ 25,088       4.14 %
                                                 
Allowance for loan losses     (14,323 )                     (13,604 )                
Other assets     52,395                       52,766                  
Total assets   $ 1,452,931                     $ 1,250,039                  
                                                 
Liabilities                                                
Savings, NOW, money market, interest checking   $ 278,889       1,448       1.04 %   $ 246,638       725       0.59 %
Time deposits     783,202       6,948       1.77 %     627,046       4,518       1.44 %
Total interest-bearing deposits   $ 1,062,091     $ 8,396       1.58 %   $ 873,684     $ 5,243       1.20 %
Other borrowings     1,226       30       4.94 %     1,734       51       5.88 %
FHLB advances     119,187       941       1.58 %     123,860       794       1.28 %
Junior subordinated debentures     20,566       481       4.68 %     15,470       245       3.17 %
Total interest-bearing liabilities   $ 1,203,070     $ 9,848       1.64 %   $ 1,014,748     $ 6,333       1.24 %
                                                 
Non-interest-bearing deposits     98,728                       91,626                  
Other liabilities     7,698                       8,500                  
Total liabilities   $ 1,309,496                     $ 1,114,874                  
                                                 
Shareholders' equity     143,435                       135,165                  
Total liabilities and equity   $ 1,452,931                     $ 1,250,039                  
                                                 
Net interest income           $ 20,608                     $ 18,755          
Interest rate spread (3)                     2.67 %                     2.90 %
Net interest margin (4)                     2.91 %                     3.10 %
Ratio of interest-earning assets to interest-bearing liabilities     1.18                       1.19                  

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.