Plumas Bancorp Reports Record Third Quarter 2022 Results

GlobeNewswire
RENO, Nev., Oct. 19, 2022 (GLOBE NEWSWIRE) -- Plumas Bancorp (Nasdaq:PLBC), the parent company of Plumas Bank, today announced earnings for the third quarter of 2022 of $7.2 million or $1.24 per share, an increase of $650 thousand from $6.6 million or $1.13 per share during the third quarter of 2021. Diluted earnings per share increased to $1.23 per share during the three months ended September 30, 2022, up from $1.12 per share during the quarter ended September 30, 2021.
For the nine months ended September 30, 2022, the Company reported net income of $18.6 million or $3.19 per share, an increase of $3.1 million from $15.5 million or $2.87 per share earned during the nine months ended September 30, 2021. Earnings per diluted share increased to $3.15 during the nine months ended September 30, 2022 up $0.32 from $2.83 during the first nine months of 2021. Earnings during 2022 set a record for any quarter or nine-month period in the Company’s history.
Return on average assets was 1.72% during the current quarter, up from 1.71% during the third quarter of 2021. Return on average equity increased to 23.7% for the three months ended September 30, 2022, up from 19.6% during the third of 2021. Return on average assets was 1.52% during the nine months ended September 30, 2022, down from 1.58% during the nine months of 2021. Return on average equity increased to 20.1% for the nine months ended September 30, 2022, up from 18.3% during the first nine months of 2021.
Balance Sheet Highlights
September 30, 2022 compared to September 30, 2021
Total assets increased by $82 million, or 5%, to $1.7 billion.
Gross loans increased by $19 million, or 2%, to $858 million.
Investment securities increased by $108 million, or 39%, to $383 million.
Total deposits increased by $107 million, or 8%, to $1.5 billion.
Non-performing assets decreased by $3.6 million or 66%, to $1.9 million
President’s Comments
Andrew J. Ryback, director, president and chief executive officer of Plumas Bancorp and Plumas Bank stated, “The third quarter of 2022 resulted in record earnings mostly due to rising interest rates. Additionally, average interest earning assets grew by 11%. Non-performing assets to total assets at just 0.11% remain below regional and national peer averages. Plumas stands strong in the face of probable recession and continues to closely monitor the credit portfolio.”
Recently, Plumas Bank was recognized by three leading financial industry groups:
Plumas Bank has received awards for the past 8 years from CB Resources. The CB Top Ten™ reported that Plumas Bank ranked 25th in the nation in C-Corp $1 - 5 billion peer group for the 2nd Quarter of 2022. The CB Top Ten™ is a community bank performance scorecard that identifies the banks in the top 10 percent based on asset size and corporation type. Banks are ranked by the following key performance indicators: Asset Growth, Return on Average Assets, Return on Average Equity, Net Interest Margin, Efficiency Ratio, Non-Performing Assets, Non-Interest Bearing Deposits, and Non-interest Income.
Piper Sandler Sm-All Stars Class of 2022 - Plumas Bancorp was named one of 35 publicly traded banks and thrifts to the Piper Sandler Sm-All Stars Class of 2022. Sm-All Stars identifies the highest quality, top performing small-cap banks and thrifts in the country. To earn Sm-All Star status, companies must have a market capitalization below $2.5 billion and demonstrate strong metrics with regard to growth, profitability, credit quality, and capital strength. This is the fourth time Plumas Bank has earned this award after previously being chosen in 2018, 2019 and 2020.
Plumas Bank was ranked 8th in the nation in ICBA’s Top Lenders for 2022 – Based on lending concentration and loan growth, Plumas Bank was ranked 8th in the nation for the $1 billion+ category for agricultural loans.
Ryback commented, “We are honored to be recognized by these prestigious financial industry organizations and realize that it is due to the commitment and diligence of our Board of Directors, executives, and team members as well as the loyalty and support of our clients that make these achievements possible.”
Loans, Deposits, Investments and Cash
Gross loans, excluding loans held for sale, increased by $19 million, or 2%, from $839 million at September 30, 2021, to $858 million at September 30, 2022. Increases in loans included $55 million in commercial real estate loans, $16 million in construction loans, $6 million in residential real estate loans and $3 million in all other loans; these items were partially offset by decreases of $51 million in commercial loans and $10 million in agricultural loans. Excluding PPP loan activity, commercial loans would have increased by $8 million and gross loans would have increased by $78 million or 10%. PPP loans totaled $1 million at September 30, 2022, and $60 million at September 30, 2021. Unamortized loan fees net of unamortized loan costs on PPP loans totaled $52 thousand at September 30, 2022.
Beginning in 2020 we instituted a loan forbearance program to assist borrowers with managing cash flows disrupted due to COVID-19; we ended this program in the fourth quarter of 2021 and there are no loan balances on deferral related to this program at September 30, 2022.
On September 30, 2022, approximately 79% of the Company's loan portfolio was comprised of variable rate loans. The rates of interest charged on variable rate loans are set at specific increments in relation to the Company's lending rate or other indexes such as the published prime interest rate or U.S. Treasury rates and vary with changes in these indexes. The frequency in which variable rate loans reprice can vary from one day to several years. Loans indexed to the prime interest rate were approximately 23% of the Company’s loan portfolio; these loans reprice within one day to three months of a change in the prime rate.
Total deposits increased by $107 million from $1.4 billion at September 30, 2021, to $1.5 billion at September 30, 2022. The increase in deposits includes increases of $68 million in demand deposits and $70 million in savings accounts. These increases were partially offset by declines of $20 million in money market accounts, and $11 million in time deposits. At September 30, 2022, 53% of the Company’s deposits were in the form of non-interest bearing demand deposits. The Company has no brokered deposits.
Total investment securities increased by $108 million from $275 million at September 30, 2021, to $383 million at September 30, 2022. Excluding the effect of a $64 million increase in unrealized loss on investment securities, our investment security portfolio would have grown by $172 million. The Bank’s investment security portfolio consists of debt securities issued by the US Government, US Government agencies, US Government sponsored agencies and municipalities. Cash and due from banks decreased by $39 million from $373 million at September 30, 2021, to $334 million at September 30, 2022.
Asset Quality
Nonperforming assets (which are comprised of nonperforming loans, other real estate owned (“OREO”) and repossessed vehicle holdings) at September 30, 2022, were $1.9 million, down from $5.5 million at September 30, 2021. Nonperforming assets as a percentage of total assets decreased to 0.11% at September 30, 2022, down from 0.35% at September 30, 2021. OREO decreased by $200 thousand from $569 thousand at September 30, 2021, to $369 thousand at September 30, 2022. Nonperforming loans were $1.5 million at September 30, 2022, and $4.9 million at September 30, 2021. Nonperforming loans as a percentage of total loans decreased to 0.17% at September 30, 2022, down from 0.58% at September 30, 2021.
The provision for loan losses increased by $125 thousand from $875 thousand during the first nine months of 2021 to $1 million during the current period. Net charge-offs totaled $432 thousand and $472 thousand during the nine months ended September 30, 2022, and 2021, respectively. The allowance for loan losses totaled $10.9 million at September 30, 2022, and $10.3 million at September 30, 2021. The allowance for loan losses as a percentage of total loans increased from 1.23% at September 30, 2021, to 1.27% at September 30, 2022. Excluding PPP loans, the allowance for loan losses as a percentage of total loans at September 30, 2022, and 2021 was 1.27% and 1.32%, respectively.
Shareholders’ Equity
Related mostly to an increase in accumulated other comprehensive loss, total shareholders’ equity decreased by $23.1 million from $129.5 million at September 30, 2021, to $106.4 million at September 30, 2022. Excluding $42.3 million in accumulated other comprehensive loss at September 30, 2022, and $1.8 million in accumulated other comprehensive income at September 30, 2021, shareholders’ equity would have increased by $21 million, or 16%, to $149 million. Increases in shareholders’ equity include earnings during the twelve-month period totaling $24.1 million and stock option activity totaling $0.5 million. These items were offset by the payment of cash dividends totaling $3.6 million and an increase in accumulated other comprehensive loss of $44.1 million. The increase in accumulated other comprehensive loss resulted from an increase in the unrealized loss on our investment portfolio, net of tax of $45.2 million partially offset by an increase in the value of our interest rate swaps.
Net Interest Income and Net Interest Margin
Net interest income was $15.7 million for the three months ended September 30, 2022, an increase of $2.2 million from the same period in 2021. The increase in net interest income includes an increase of $2.1 million in interest income and a decrease of $30 thousand in interest expense. Interest and fees on loans, including loans held for sale, decreased by $916 thousand related to a decline of $2.3 million in fees net of costs on PPP loans partially offset by growth in the loan portfolio and an increase in yield on the portfolio. During the current quarter we recorded amortization of loan fees net of loan costs on PPP loans totaling $237 thousand. This compares to $2.5 million during the third quarter of 2021. This includes normal amortization on our PPP portfolio and the effect of PPP loan forgiveness.
Average loan balances decreased by $2 million, while the average yield on these loans decreased by 36 basis points from 5.71% during the third quarter of 2021 to 5.35% during the current quarter. The decrease in loan yield is directly related to the $2.3 million decrease in PPP fees. Excluding PPP loans, yield would have increased by 27 basis points mostly related to an increase in the rate earned on loans tied to the prime interest. The average prime interest rate increased by 210 basis points from 3.25% during the third quarter of 2021 to 5.35% during the current quarter. The average balance of loans held for sale decreased from $15.9 million during the three months ended September 30, 2021, to $2.8 million during the current quarter. The average yield on loans held for sale, all of which are tied to prime and reprice quarterly, increased from 5.48% to 7.05%.
Interest on investment securities increased by $1.4 million from the third quarter of 2021, related to an increase in average investment securities of $133 million to $388 million and an increase in yield on the investment portfolio of 81 basis points from 1.80% during the third quarter of 2021 to 2.61% during the current quarter. Interest on cash balances increased by $1.7 million related to both an increase of 213 basis points in the rate paid on these balances and an increase of $35 million in average cash balances. The rate paid on cash balances increased from 0.16% during the third quarter of 2021 to 2.29% during the current quarter mostly related to an increase in the rate paid on balances held at the Federal Reserve Bank. The average rate paid on Federal Reserve balances was 0.15% during the third quarter of 2021 and 2.25% during the current quarter.
Average interest earning assets during the three months ended September 30, 2022, totaled $1.6 billion, an increase of $157 million from the same period in 2021. The average yield on interest earning assets increased by 15 basis points to 4.07%. Net interest margin for the three months ended September 30, 2022, increased 17 basis points to 4.00%, up from 3.83% for the same period in 2021.
Net interest income for the nine months ended September 30, 2022, was $41.2 million, an increase of $7.2 million from the $34.0 million earned during the same period in 2021. Interest income increased by $7.3 million. Included in interest income during the current nine-month period were PPP fees net of costs of $1.2 million, a decrease of $3.7 million from $4.9 million during the nine months ended September 30, 2021. The average yield on loans, including loans held for sale, decreased by 19 basis points from 5.39% during the first nine months of 2021 to 5.20% during the current period related to the decrease in PPP fees.
Average interest earning assets during the current nine-month period totaled $1.6 billion, an increase of $303 million from the same period in 2021. This increase in average interest earning assets consisted of increases of $79 million in average loan and loans held for sale balances, $123 million in average investment securities and $101 million in average cash balances. The average yield on interest earning assets declined by 11 basis points to 3.68% mostly related to a decline in loan yield. Interest expense increased by $52 thousand. Net interest margin for the nine months ended September 30, 2022, decreased 10 basis points to 3.60%, down from 3.70% for the same period in 2021.
Non-Interest Income/Expense
Non-interest income increased by $553 thousand to $2.6 million during the current quarter up from $2.0 million during the three months ended September 30, 2021. The largest component of this increase was an increase in gain on sale of SBA loans of $353 thousand. We did not sell SBA loans during the second and third quarters of 2021 resulting in an inventory of loans held for sale of $31.3 million at December 31, 2021. During the current quarter we sold $10.7 million in guaranteed portions of SBA loans and ended the quarter with loans held for sale totaling $434 thousand.
During the nine months ended September 30, 2022, non-interest income totaled $8.9 million, an increase of $2.7 million from $6.2 million during the nine months ended September 30, 2021. The largest component of this increase was an increase in gain on sale of loans of $2.1 million. During the nine months ended September 30, 2022, we sold $48.9 million in guaranteed portions of SBA loans. This compares to sales of $7.4 million during the nine months ended September 30, 2021.
During the three months ended September 30, 2022, total non-interest expense increased by $1.6 million from $6.6 million during the third quarter of 2021 to $8.2 million during the current quarter. The largest component of this increase was an increase in salary and benefit expense of $1.4 million. Occupancy and equipment costs increased by $177 thousand. The largest component of this increase relates to an increased investment in software primarily related to our lending platform.
During the three months ended September 30, 2021, the Company qualified for the Employee Retention Credit (ERC). The ERC was made available under the Coronavirus Aid, Relief, and Economic Security Act and modified and extended under the Taxpayer Certainty and Disaster Tax Relief Act of 2020. We recorded an ERC of $1.2 million during the third quarter of 2021 as a reduction of salary and benefit expense.
During the nine months ended September 30, 2022, non-interest expense increased by $5.7 million. The largest components of this increase were $4.0 million in salary and benefit expense, $630 thousand in occupancy and equipment costs, $219 thousand in outside service fees and $171 thousand in advertising and shareholder relations. The largest components of the increase in salary and benefit expense were $2.3 million in ERC during 2021, $1.5 million in salary expense and $365 thousand in accrued bonus expense. The increase in occupancy and equipment expense includes $313 thousand related to our Yuba City branch. The largest components of the increase in outside service fees were $131 thousand in debit card and ATM processing costs and $91 thousand in human resources administration and payroll processing. The increase in advertising and shareholder costs mostly relates to an increase of $162 thousand in expense paid to an advertising agency which is primarily focused on building our brand in Northern Nevada.
Plumas Bancorp is headquartered in Reno, Nevada. Plumas Bancorp’s principal subsidiary is Plumas Bank, which was founded in 1980. Plumas Bank is a full-service community bank headquartered in Quincy, California. The bank operates fourteen branches: twelve located in the California counties of Lassen, Modoc, Nevada, Placer, Plumas, Shasta and Sutter and two branches located in Nevada in the counties of Carson City and Washoe. The bank also operates three loan production offices located in the California counties of Butte and Placer and Klamath Falls, Oregon. Plumas Bank offers a wide range of financial and investment services to consumers and businesses and has received nationwide Preferred Lender status with the United States Small Business Administration. For more information on Plumas Bancorp and Plumas Bank, please visit our website at www.plumasbank.com.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended and Plumas Bancorp intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies
Contact: Jamie Huynh
Investor Relations
Plumas Bancorp
5525 Kietzke Lane Ste. 100
Reno, NV 89511
775.786.0907 x8908
[email protected]
ASSETS
Cash and due from banks
$ 334,124
$ 372,993
$ (38,869)
(10.4)%
Investment securities
383,178
275,061
108,117
39.3%
Loans, net of allowance for loan losses
849,703
828,611
21,092
2.5%
Loans held for sale
434
28,364
(27,930)
(98.5)%
Premises and equipment, net
18,133
16,005
2,128
13.3%
Bank owned life insurance
15,910
15,743
167
1.1%
Real estate acquired through foreclosure
369
569
(200)
(35.1)%
Goodwill
5,502
5,502
-
100.0%
Accrued interest receivable and other assets
45,718
28,632
17,086
59.7%
Total assets
$ 1,653,071
$ 1,571,480
$ 81,591
5.2%
LIABILITIES AND
Deposits
$ 1,511,196
$ 1,404,446
$ 106,750
7.6%
Accrued interest payable and other liabilities
25,115
27,191
(2,076)
(7.6)%
Junior subordinated deferrable interest debentures
10,310
10,310
-
0.0%
Total liabilities
1,546,621
1,441,947
104,674
7.3%
Common stock
27,240
26,705
535
2.0%
Retained earnings
121,505
100,992
20,513
20.3%
Accumulated other comprehensive (loss) income, net
(42,295)
1,836
(44,131)
(2403.6)%
Shareholders’ equity
106,450
129,533
(23,083)
(17.8)%
Total liabilities and shareholders’ equity
$ 1,653,071
$ 1,571,480
$ 81,591
5.2%
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2022
2021
Dollar Change
Percentage Change
Interest income
$ 16,005
$ 13,869
$ 2,136
15.4%
Interest expense
289
319
(30)
(9.4)%
Net interest income before provision for loan losses
15,716
13,550
2,166
16.0%
Provision for loan losses
300
250
50
20.0%
Net interest income after provision for loan losses
15,416
13,300
2,116
15.9%
Non-interest income
2,554
2,001
553
27.6%
Non-interest expense
8,198
6,601
1,597
24.2%
Income before income taxes
9,772
8,700
1,072
12.3%
Provision for income taxes
2,544
2,122
422
19.9%
Net income
$ 7,228
$ 6,578
$ 650
9.9%
Basic earnings per share
$ 1.24
$ 1.13
$ 0.11
9.7%
Diluted earnings per share
$ 1.23
$ 1.12
$ 0.11
9.8%
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2022
2021
Dollar Change
Percentage Change
Interest income
$ 42,037
$ 34,786
$ 7,251
20.8%
Interest expense
878
826
52
6.3%
Net interest income before provision for loan losses
41,159
33,960
7,199
21.2%
Provision for loan losses
1,000
875
125
14.3%
Net interest income after provision for loan losses
40,159
33,085
7,074
21.4%
Non-interest income
8,868
6,231
2,637
42.3%
Non-interest expense
23,904
18,225
5,679
31.2%
Income before income taxes
25,123
21,091
4,032
19.1%
Provision for income taxes
6,497
5,585
912
16.3%
Net income
$ 18,626
$ 15,506
$ 3,120
20.1%
Basic earnings per share
$ 3.19
$ 2.87
$ 0.32
11.1%
Diluted earnings per share
$ 3.15
$ 2.83
$ 0.32
11.3%
Three Months Ended
Nine Months Ended
Basic earnings per share
$
1.24
$
0.97
$
1.13
$
3.19
$
2.87
Diluted earnings per share
$
1.23
$
0.96
$
1.12
$
3.15
$
2.83
Weighted average shares outstanding
5,845
5,843
5,800
5,837
5,397
Weighted average diluted shares outstanding
5,895
5,909
5,885
5,911
5,477
Cash dividends paid per share 1
$
0.16
$
0.16
$
0.14
$
0.48
$
0.42
PERFORMANCE RATIOS (annualized for the three months)
Return on average assets
1.72
%
1.40
%
1.71
%
1.52
%
1.58
%
Return on average equity
23.7
%
19.0
%
19.6
%
20.1
%
18.3
%
Yield on earning assets
4.07
%
3.65
%
3.92
%
3.68
%
3.79
%
Rate paid on interest-bearing liabilities
0.15
%
0.16
%
0.19
%
0.16
%
0.19
%
Net interest margin
4.00
%
3.58
%
3.83
%
3.60
%
3.70
%
Noninterest income to average assets
0.61
%
0.66
%
0.52
%
0.72
%
0.64
%
Noninterest expense to average assets
1.96
%
1.98
%
1.72
%
1.95
%
1.86
%
Efficiency ratio 2
44.9
%
49.9
%
42.4
%
47.8
%
45.3
%
9/30/2022
6/30/2022
9/30/2021
12/31/2021
12/31/2020
CREDIT QUALITY RATIOS AND DATA
Allowance for loan losses
$
10,920
$
10,919
$
10,305
$
10,352
$
9,902
Allowance for loan losses as a percentage of total loans
1.27
%
1.27
%
1.23
%
1.23
%
1.40
%
Allowance for loan losses as a percentage of total loans -excluding PPP loans
1.27
%
1.28
%
1.32
%
1.29
%
1.55
%
Nonperforming loans
$
1,485
$
1,551
$
4,873
$
4,863
$
2,536
Nonperforming assets
$
1,872
$
1,960
$
5,465
$
5,397
$
2,970
Nonperforming loans as a percentage of total loans
0.17
%
0.18
%
0.58
%
0.58
%
0.36
%
Nonperforming assets as a percentage of total assets
0.11
%
0.12
%
0.35
%
0.33
%
0.27
%
Year-to-date net charge-offs
$
432
$
133
$
472
$
675
$
516
Year-to-date net charge-offs as a percentage of average
0.07
%
0.03
%
0.08
%
0.09
%
0.07
%
loans (annualized)
CAPITAL AND OTHER DATA
Common shares outstanding at end of period
5,849
5,845
5,811
5,817
5,182
Shareholders' equity
$
106,450
$
116,158
$
129,533
$
134,082
$
100,154
Book value per common share
$
18.20
$
19.87
$
22.29
$
23.05
$
19.33
Tangible common equity3
$
99,651
$
109,287
$
122,439
$
127,067
$
99,432
Tangible book value per common share4
$
17.04
$
18.70
$
21.07
$
21.84
$
19.19
Tangible common equity to total assets
6.0
%
6.7
%
7.8
%
7.9
%
8.9
%
Gross loans to deposits
56.8
%
58.5
%
59.7
%
58.3
%
72.9
%
PLUMAS BANK REGULATORY CAPITAL RATIOS
Tier 1 Leverage Ratio
8.9
%
8.7
%
8.6
%
8.4
%
9.2
%
Common Equity Tier 1 Ratio
14.8
%
14.4
%
14.1
%
14.4
%
14.2
%
Tier 1 Risk-Based Capital Ratio
14.8
%
14.4
%
14.1
%
14.4
%
14.2
%
Total Risk-Based Capital Ratio
15.9
%
15.5
%
15.3
%
15.5
%
15.4
%
(1) The Company paid a quarterly cash dividend of 16 cents per share on February 15, 2022, May 16, 2022, and August 15, 2022, and a quarterly cash dividend of 14 cents per share on February 15, 2021, May 17, 2021, August 16, 2021 and November 15, 2021.
(2) Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
(3) Tangible common equity is defined as common equity less goodwill and core deposit intangibles.
(4) Tangible common book value per share is defined as tangible common equity divided by common shares outstanding.
The following table presents for the three-month periods indicated the distribution of consolidated average assets, liabilities and shareholders' equity.
Interest-earning assets:
Loans (2) (3)
$
863,132
$
11,637
5.35
%
$
860,980
$
12,384
5.71
%
Loans held for sale
2,814
50
7.05
%
15,846
219
5.48
%
Investment securities
279,342
1,811
2.57
%
173,039
714
1.64
%
Non-taxable investment securities (1)
108,508
741
2.71
%
81,995
443
2.14
%
Interest-bearing deposits
305,526
1,766
2.29
%
270,655
109
0.16
%
Total interest-earning assets
1,559,322
16,005
4.07
%
1,402,515
13,869
3.92
%
Cash and due from banks
32,934
61,373
Other assets
70,665
59,386
Total assets
$
1,662,921
$
1,523,274
Interest-bearing liabilities:
Money market deposits
251,427
55
0.09
%
250,034
95
0.15
%
Savings deposits
410,496
89
0.09
%
326,097
67
0.08
%
Time deposits
58,179
39
0.27
%
67,505
66
0.39
%
Total deposits
720,102
183
0.10
%
643,636
228
0.14
%
Junior subordinated debentures
10,310
89
3.42
%
10,310
90
3.46
%
Other interest-bearing liabilities
10,842
17
0.62
%
13,575
1
0.03
%
Total interest-bearing liabilities
741,254
289
0.15
%
667,521
319
0.19
%
Non-interest-bearing deposits
789,218
709,896
Other liabilities
11,635
12,862
Shareholders' equity
120,814
132,995
Total liabilities & equity
$
1,662,921
$
1,523,274
Cost of funding interest-earning assets (4)
0.07
%
0.09
%
Net interest income and margin (5)
$
15,716
4.00
%
$
13,550
3.83
%
(1) Not computed on a tax-equivalent basis.
(2) Average nonaccrual loan balances of $1.6 million for 2022 and $6.2 million for 2021 are included in average loan balances for computational purposes.
(3) Net fees included in loan interest income for the three-month periods ended September 30, 2022 and 2021 were $50 thousand and $2.2 million, respectively.
(4) Total annualized interest expense divided by the average balance of total earning assets.
(5) Annualized net interest income divided by the average balance of total earning assets.
The following table presents for the three-month periods indicated the distribution of consolidated average assets, liabilities and shareholders' equity.
Interest-earning assets:
Loans (2) (3)
$
847,043
$
32,933
5.20
%
$
769,102
$
31,029
5.39
%
Loans held for sale
11,307
485
5.73
%
10,522
441
5.60
%
Investment securities
244,380
4,124
2.26
%
152,116
1,921
1.69
%
Non-taxable investment securities (1)
101,344
1,900
2.51
%
71,067
1,182
2.22
%
Interest-bearing deposits
324,172
2,595
1.07
%
222,900
213
0.13
%
Total interest-earning assets
1,528,246
42,037
3.68
%
1,225,707
34,786
3.79
%
Cash and due from banks
45,329
39,581
Other assets
66,667
44,630
Total assets
$
1,640,242
$
1,309,918
Interest-bearing liabilities:
Money market deposits
256,337
178
0.09
%
212,115
222
0.14
%
Savings deposits
397,445
256
0.09
%
288,236
203
0.09
%
Time deposits
61,405
127
0.28
%
49,900
140
0.38
%
Total deposits
715,187
561
0.10
%
550,251
565
0.14
%
Junior subordinated debentures
10,310
267
3.46
%
10,310
255
3.31
%
Other interest-bearing liabilities
11,601
50
0.58
%
14,660
6
0.05
%
Total interest-bearing liabilities
737,098
878
0.16
%
575,221
826
0.19
%
Non-interest-bearing deposits
767,181
611,422
Other liabilities
11,824
10,048
Shareholders' equity
124,139
113,227
Total liabilities & equity
$
1,640,242
$
1,309,918
Cost of funding interest-earning assets (4)
0.08
%
0.09
%
Net interest income and margin (5)
$
41,159
3.60
%
$
33,960
3.70
%
(1) Not computed on a tax-equivalent basis.
(2) Average nonaccrual loan balances of $3.3 million for 2022 and $4.2 million for 2021 are included in average loan balances for computational purposes.
(3) Net fees included in loan interest income for the nine-month periods ended September 30, 2022 and 2021 were $561 thousand and $4.4 million, respectively.
(4) Total annualized interest expense divided by the average balance of total earning assets.
(5) Annualized net interest income divided by the average balance of total earning assets.
The following table presents the components of non-interest income for the three-month periods ended September 30, 2022 and 2021.
Interchange income
$
864
$
839
$
25
3.0
%
Service charges on deposit accounts
666
636
30
4.7
%
Gain on sale of loans, net
353
-
353
100.0
%
Loan servicing fees
220
200
20
10.0
%
Earnings on life insurance policies
99
104
(5
)
(4.81
)%
Other
352
222
130
58.6
%
Total non-interest income
$
2,554
$
2,001
$
553
27.6
%
The following table presents the components of non-interest expense for the three-month periods ended September 30, 2022 and 2021.
Salaries and employee benefits
$
4,380
$
2,940
$
1,440
49.0
%
Occupancy and equipment
1,220
1,043
177
17.0
%
Outside service fees
1,007
1,101
(94
)
(8.5
)%
Professional fees
314
246
68
27.6
%
Advertising and shareholder relations
194
154
40
26.0
%
Telephone and data communication
190
206
(16
)
(7.8
)%
Armored car and courier
183
130
53
40.8
%
Director compensation and expense
154
132
22
16.7
%
Business development
130
95
35
36.8
%
Amortization of Core Deposit Intangible
72
83
(11
)
(13.3
)%
Loan collection expenses
56
113
(57
)
(50.4
)%
Deposit insurance
48
128
(80
)
(62.5
)%
Other
250
230
20
8.7
%
Total non-interest expense
$
8,198
$
6,601
$
1,597
24.2
%
The following table presents the components of non-interest income for the nine-month periods ended September 30, 2022 and 2021.
For the Nine Months Ended
Gain on sale of loans, net
$
2,688
$
591
$
2,097
354.8
%
Interchange income
2,478
2,367
111
4.7
%
Service charges on deposit accounts
1,835
1,743
92
5.3
%
Loan servicing fees
642
623
19
3.0
%
Earnings on life insurance policies
281
279
2
0.7
%
Other
944
628
316
50.3
%
Total non-interest income
$
8,868
$
6,231
$
2,637
42.3
%
The following table presents the components of non-interest expense for the nine-month periods ended September 30, 2022 and 2021.
Salaries and employee benefits
$
12,700
$
8,694
$
4,006
46.1
%
Occupancy and equipment
3,468
2,838
630
22.2
%
Outside service fees
2,937
2,718
219
8.1
%
Professional fees
930
1,039
(109
)
(10.5
)%
Telephone and data communication
572
536
36
6.7
%
Armored car and courier
498
355
143
40.3
%
Advertising and shareholder relations
496
325
171
52.6
%
Director compensation and expense
429
329
100
30.4
%
Deposit insurance
420
290
130
44.8
%
Business development
372
222
150
67.6
%
Amortization of Core Deposit Intangible
216
167
49
29.3
%
Loan collection expenses
199
207
(8
)
(3.9
)%
Other
667
505
162
32.1
%
Total non-interest expense
$
23,904
$
18,225
$
5,679
31.2
%
The following table shows the distribution of loans by type at September 30, 2022 and 2021.
Percent of
Loans in Each
Category to
Total Loans
Percent of
Loans in Each
Category to
Total Loans
9/30/2022
9/30/2022
9/30/2021
9/30/2021
Commercial
$
73,227
8.5
%
$
124,254
14.8
%
Agricultural
124,894
14.6
%
134,638
16.0
%
Real estate – residential
15,999
1.9
%
10,139
1.2
%
Real estate – commercial
457,624
53.3
%
402,921
48.0
%
Real estate – construction & land
55,511
6.5
%
39,085
4.7
%
Equity Lines of Credit
34,568
4.0
%
33,254
4.0
%
Auto
91,425
10.7
%
90,439
10.8
%
Other
4,728
0.5
%
4,213
0.5
%
Total Gross Loans
$
857,976
100
%
$
838,943
100
%
The following table shows the distribution of deposits by type at September 30, 2022 and 2021.
Percent of
Deposits in Each
Category to
Total Deposits
Percent of
Deposits in Each
Category to
Total Deposits
9/30/2022
9/30/2022
9/30/2021
9/30/2021
Non-interest bearing
$
795,880
52.7
%
$
728,021
51.8
%
Money Market
245,902
16.3
%
265,440
18.9
%
Savings
414,039
27.4
%
344,236
24.5
%
Time
55,375
3.6
%
66,749
4.8
%
Total Deposits
$
1,511,196
100
%
$
1,404,446
100
%

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