ICBK County Bancorp Inc

County Bancorp, Inc. (the “Company”; Nasdaq: ICBK), the holding company of Investors Community Bank (the “Bank”), an agricultural and commercial community bank headquartered in Manitowoc, Wisconsin, reported net income of $3.7 million, or $0.53 diluted earnings per share, for the second quarter of 2019, compared to net income of $3.8 million, or $0.54 diluted earnings per share, for the first quarter of 2019 and $3.9 million, or $0.55 diluted earnings per share, for the second quarter of 2018.  This represents an annualized return on average assets of 1.00% for the three and six months ended June 30, 2019, compared to 1.04% and 1.10% for the three and six months ended June 30, 2018, respectively.

“We are very pleased with our most recent quarter and first half earnings, even though we still face some credit challenges in our agricultural portfolio due to the recent prolonged low milk price cycle,” stated Tim Schneider, President of the Company and CEO of the Bank.  “We are starting to see an improved milk price environment: the 12-month forward-looking average for class III milk increased from $16.00 to $17.04 per hundredweight on the Chicago Mercantile Exchange from March 31 to June 30, 2019. These improvements are encouraging, but it is going to take some time to see an impact on our overall classified assets.”

Schneider continued, “As previously announced, we are committed to reducing our wholesale funding, and we were able to make significant progress toward that in the first half of 2019, primarily through selling loan participations. We are also very pleased with our client deposit growth year-over-year and during this quarter.”

Loans and Total Assets

Total assets at June 30, 2019 were $1.5 billion, a decrease of $6.7 million, or 0.5%, and a decrease of $34.2 million, or 2.3%, over total assets as of March 31, 2019 and June 30, 2018, respectively.  Total loans were $1.1 billion at June 30, 2019, which represents a $35.1 million, or 3.0%, decrease over total loans at March 31, 2019, and a decrease of $33.7 million, or 2.9%, over total loans at June 30, 2018.

We continued to focus on participating loans off balance sheet during the second quarter of 2019.  During the second quarter of 2019, participated loans that the Company continued to service increased to $695.6 million at June 30, 2019 which was an increase of $20.4 million, or 3.0%, and $67.2 million, or 10.7%, over participated loans that the Company serviced at March 31, 2019 and June 30, 2018, respectively.

Deposits

Total deposits at June 30, 2019 were $1.2 billion, an increase of $28.9 million, or 2.5%, and a decrease of $5.3 million, or 0.4%, over total deposits as of March 31, 2019 and June 30, 2018, respectively.  Client deposits (demand deposits, money market accounts, and certificates of deposit) increased $39.6 million, or 5.2%, since March 31, 2019, and increased $96.3 million, or 13.7%, since June 30, 2018. 

Due to the increases in loan participations and client deposit growth, the Company decreased its reliance on brokered deposits and national certificates of deposit to $406.0 million at June 30, 2019.  This represents a decrease of $10.7 million, or 2.6%, from March 31, 2019, and a decrease of $101.5 million, or 20.0%, from June 30, 2018. 

During the second quarter of 2019, the Company also paid off a portion of its FHLB borrowings.  At June 30, 2019, borrowings from the FHLB totaled $59.4 million, which was a decrease of $41.0 million, or 40.8%, from March 31, 2019, and a decrease of $48.8 million, or 45.1%, from June 30, 2018.

Net Interest Income and Margin

Net interest income was $10.4 million for the three months ended June 30, 2019, which was a $0.1 million, or 1.2%, decrease from the three months ended March 31, 2019, and a $0.1 million, or 0.9%, increase from the three months ended June 30, 2018.  The primary reason for the second quarter decline in net interest income compared to the preceding quarter was the increase in loan participations that resulted in lower average loan balances during the period.

For the six months ended June 30, 2019, net interest income improved 1.9% to $21.0 million from $20.6 million for the six months ended June 30, 2018.

Net interest margin was 2.92% for the three months ended June 30, 2019, which was a decrease from 2.94% for the three months ended March 31, 2019, and an increase from 2.87% for the three months ended June 30, 2018.  A slight decline in net interest margin was realized over the linked quarter because while loan yields improved 12 basis points, the average loan balance declined by 2.6% and interest rates on deposits increased 10 basis points on a steady average balance.  Year-over-year second quarter net interest margin increased by five basis points primarily due to a 42 basis point improvement in loan yields, which was partially offset by a 42 basis point increase in cost of funds.

For the six months ended June 30, 2019, net interest margin improved slightly to 2.93% from 2.91% for the six months ended June 30, 2018, primarily as a result of a 45 basis point improvement in loan yields that was partially offset by a 46 basis point increase in cost of funds.

Non-Interest Income and Expense

Non-interest income for the three months ended June 30, 2019 increased by $0.1 million, or 5.0%, to $2.9 million compared to the three months ended March 31, 2019.  During the second quarter, the Company continued to reduce the valuation allowance on its loan servicing rights portfolio, which resulted in an increase of $0.1 million of loan servicing rights for the quarter.  The reduction of the valuation allowance is expected to continue throughout the remaining quarters of 2019.

Non-interest income for the three months ended June 30, 2019 increased $0.6 million, or 24.7%, compared to $2.3 million for the three months ended June 30, 2018.  The year-over-year increase was primarily due to the reduction of the valuation allowance discussed above, increases in loan servicing fees and rights which were the result of higher volumes of loans being serviced, and a $0.3 million gain on the sale of securities during the second quarter of 2019.

For the six months ended June 30, 2019, non-interest income improved to $5.6 million, an increase of $1.3 million, or 29.4%, over the six months ended June 30, 2018.  The increase was primarily the result of the reduction in the valuation allowance on the loan servicing rights portfolio and security sales discussed above, as well as the reduction of the allowance for unused commitments of $0.5 million, included in other non-interest income, in the first quarter of 2019.  The Company evaluated the need for this allowance during the first quarter of 2019 and concluded there was no sufficient evidence that represented credit loss inherent in these commitments to substantiate the necessity of this reserve and concluded to eliminate it.  The Company will continue to evaluate credit risk on these off-balance sheet commitments going forward. 

Non-interest expense for the three months ended June 30, 2019 increased by $0.1 million, or 1.9%, to $7.4 million compared to the three months ended March 31, 2019, and increased $0.5 million, or 7.3%, compared to the three months ended June 30, 2018.  Employee compensation and benefits decreased $0.3 million, or 6.3%, in the linked quarter due to lower payroll taxes resulting from social security tax limits being met during the first quarter, but was offset by a $0.3 million writedown of an agricultural OREO property.  The year-over-year increase was primarily due to a $0.3 million write-down on an OREO property during the second quarter of 2019 and small increases in information processing, professional fees, and business development.

Asset Quality

Non-performing assets as a percent of total assets decreased to 1.94% at June 30, 2019, from 2.07% at March 31, 2019, and 2.30% at June 30, 2018.  At June 30, 2019, non-performing assets were $28.8 million, a decrease of $2.1 million, or 6.8%, and $6.1 million, or 17.5%, at March 31, 2019 and June 30, 2018, respectively.  During the second quarter of 2019, $4.1 million of non-performing loans was transferred to OREO; however, two OREO properties were sold during the quarter resulting in a net increase of $3.7 million in OREO during the quarter ended June 30, 2019.

Substandard loans were $117.8 million at June 30, 2019, compared to $107.5 million at March 31, 2019 and $93.8 million at June 30, 2018.  Adverse classified asset ratio (a non-GAAP measure) increased to 53.21% at June 30, 2019 from 48.59% and 47.34% at March 31, 2019 and June 30, 2018, respectively.  The increase in substandard loans and the adverse classified ratio was the result of the prolonged strain of Wisconsin’s agricultural economy; however, we are actively managing these credits, and we are optimistic about the industry’s outlook as there was a 6.5% increase in the 12-month future price of class III milk from March 31, 2019 to June 30, 2019.

A provision for loan losses of $0.9 million was recorded for the three months ended June 30, 2019 compared to a provision of $0.8 million and $0.5 million for the three months ended March 31, 2019 and June 30, 2018, respectively.  For the six months ended June 30, 2019, a provision for loan losses was $1.6 million compared to $0.6 million for the six months ended June 30, 2018.  The increase in provision in the linked quarter and year-over- year was directly related the $2.1 million in net charge-offs that took place during the second quarter of 2019 which related to a commercial real estate relationship that lost its primary tenant, as well as an increase in special mention and substandard loans during the second quarter of 2019.

The allowance for loan losses was $16.3 million at June 30, 2019 compared to $16.5 million at December 31, 2018.  The $0.2 million decrease in the allowance during the first six months of 2019 was the result of a reduction in general reserves due to the decreases in total loans.

Conference Call

The Company will host an earnings call today, July 18, 2019, at 1:30 p.m., CDT, conducted by Timothy J. Schneider, President, and Glen L. Stiteley, CFO.  The earnings call will be broadcast over the Internet on the Company’s website at http://investors.icbk.com.  From the top menu, select “News”, then “Event Calendar.”  In addition, you may listen to the Company’s earnings call via telephone by dialing (844) 835-9984.  Investors should visit the Company’s website or call in to the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call.  

A replay of the earnings call will be available until July 18, 2020, by visiting the Company’s website at http://investors.icbk.com.

About County Bancorp, Inc.

County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and its 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 it has developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending.  It also serves business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin.  Its customers are served from its full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and its 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 the Company’s control. The Company cautions 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 the Company’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 the Company does 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 ContactGlen L. StiteleyEVP - CFO, Investors Community BankPhone: (920) 686-5658 Email: gstiteley@icbk.com

County Bancorp, Inc.Consolidated Financial Summary(Unaudited)		June 30,2019				March 31,2019				December 31,2018				September 30,2018				June 30,2018
		(dollars in thousands, except per share data)
Period-End Balance Sheet:
Assets
Cash and cash equivalents		$	116,251			$	62,426			$	61,087			$	49,996			$	81,044
Securities available for sale, at fair value			158,561				192,210				195,945				190,185				187,505
Loans held for sale			7,448				2,750				2,949				13,770				11,468
Agricultural loans			713,602				722,107				724,508				714,310				702,426
Commercial loans			383,542				403,490				415,672				417,146				407,609
Multi-family real estate loans			46,683				52,974				62,321				66,403				65,713
Residential real estate loans			3,753				4,172				4,522				4,965				5,437
Installment and consumer other			252				220				272				113				339
Total loans			1,147,832				1,182,963				1,207,295				1,202,937				1,181,524
Allowance for loan losses			(16,258	)			(17,493	)			(16,505	)			(16,143	)			(15,129	)
Net loans			1,131,574				1,165,470				1,190,790				1,186,794				1,166,395
Other assets			70,812				68,532				70,057				74,223				72,465
Total Assets		$	1,484,646			$	1,491,388			$	1,520,828			$	1,514,968			$	1,518,877
Liabilities and Shareholders' Equity
Demand deposits		$	111,022			$	101,434			$	121,436			$	103,862			$	95,459
NOW accounts and interest checking			54,253				49,902				51,779				46,811				51,674
Savings			6,621				6,210				5,770				6,616				6,833
Money market accounts			239,337				225,975				218,929				208,233				204,332
Time deposits			387,899				376,034				356,484				352,531				344,619
Brokered deposits			256,475				269,917				308,504				317,291				323,561
National time deposits			149,570				146,805				160,445				173,440				183,953
Total deposits			1,205,177				1,176,277				1,223,347				1,208,784				1,210,431
FHLB advances			59,400				100,400				89,400				102,400				108,200
Subordinated debentures			44,781				44,742				44,703				44,663				44,725
Other liabilities			12,564				11,952				11,293				11,134				9,439
Total Liabilities			1,321,922				1,333,371				1,368,743				1,366,981				1,372,795
Shareholders' equity			162,724				158,017				152,085				147,987				146,082
Total Liabilities and Shareholders' Equity		$	1,484,646			$	1,491,388			$	1,520,828			$	1,514,968			$	1,518,877
Stock Price Information:
High - Quarter-to-date		$	18.92			$	19.69			$	26.00			$	28.20			$	29.26
Low - Quarter-to-date		$	16.24			$	16.74			$	17.37			$	24.29			$	25.72
Market price - Quarter-end		$	17.09			$	17.60			$	17.37			$	25.10			$	27.50
Book value per share		$	23.03			$	22.36			$	21.50			$	20.91			$	20.63
Tangible book value per share (1)		$	22.23			$	21.54			$	20.65			$	20.07			$	19.77
Common shares outstanding			6,717,908				6,709,254				6,709,480				6,694,230				6,693,447

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

		June 30,2019				March 31,2019				December 31,2018				September 30,2018				June 30,2018
		(dollars in thousands)
Loans by risk category:
Sound/Acceptable/Satisfactory/    Low Satisfactory		$	836,988			$	896,328			$	908,172			$	901,643			$	896,509
Watch			167,824				174,642				171,670				171,890				186,399
Special Mention			25,255				4,501				6,566				11,036				4,783
Substandard Performing			56,336				46,075				65,501				61,851				46,751
Substandard Impaired			61,429				61,417				55,386				56,517				47,082
Total loans			1,147,832				1,182,963				1,207,295				1,202,937				1,181,524
Loans sold with servicing retained			695,629				675,268				661,257				644,879				628,435
Total loans and loans sold with    servicing retained		$	1,843,461			$	1,858,231			$	1,868,552			$	1,847,816			$	1,809,959
Non-Performing Assets:
Nonaccrual loans		$	20,096			$	25,880			$	22,983			$	27,881			$	26,305
Other real estate owned (2)			8,693				5,019				6,568				7,851				8,607
Total non-performing assets		$	28,789			$	30,899			$	29,551			$	35,732			$	34,912
Performing TDRs not on nonaccrual		$	28,892			$	21,111			$	18,258			$	11,863			$	11,173
Non-performing assets as a % of total loans			2.51	%			2.61	%			2.45	%			2.97	%			2.95	%
Non-performing assets as a % of total assets			1.94	%			2.07	%			1.94	%			2.36	%			2.30	%
Adverse classified asset ratio (1)			53.21	%			48.59	%			57.12	%			51.89	%			47.34	%
Allowance for loan losses as a % of  nonaccrual loans			80.90	%			67.59	%			71.81	%			57.90	%			57.51	%
Allowance for loan losses as a % of total  loans			1.42	%			1.48	%			1.37	%			1.34	%			1.28	%
Net charge-offs (recoveries) quarter-to-date		$	2,111			$	(236	)		$	1,210			$	(21	)		$	16
Provision for loan loss quarter-to-date		$	876			$	752			$	1,572			$	993			$	533

(1) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.(2) The quarters ending June 30, 2018 and September 30, 2018, do not include $0.4 million of bank property transferred from premises and equipment, which is not considered a non-performing asset.  For the quarter ended December 31, 2018, and all subsequent quarters, that bank property was considered classified due to the length of the holding period.

		For the Three Months Ended
		June 30,2019				March 31,2019				December 31,2018				September 30,2018				June 30,2018
		(dollars in thousands, except per share data)
Selected Income Statement Data:
Interest and Dividend Income
Loans, including fees		$	15,484			$	15,501			$	15,536			$	15,113			$	14,366
Taxable securities			1,177				1,186				1,168				945				982
Tax-exempt securities			82				175				183				344				14
Federal funds sold and other			465				264				223				249				401
Total interest and dividend  income			17,208				17,126				17,110				16,651				15,763
Interest Expense
Deposits			5,678				5,424				5,273				4,980				4,600
FHLB advances and other borrowed  funds			415				464				427				411				487
Subordinated debentures			683				678				667				656				338
Total interest expense			6,776				6,566				6,367				6,047				5,425
Net interest income			10,432				10,560				10,743				10,604				10,338
Provision for loan losses			876				752				1,572				993				533
Net interest income after provision  for loan losses			9,556				9,808				9,171				9,611				9,805
Non-Interest Income
Services charges			407				353				470				394				445
Gain (loss) on sale of loans, net			26				(1	)			54				41				45
Loan servicing fees			1,563				1,519				1,553				1,521				1,486
Loan servicing right origination			346				228				7				(46	)			127
Income on OREO			40				26				83				96				45
Gain on sale of securities			341				-				-				-				-
Other			164				625				153				151				168
Total non-interest income			2,887				2,750				2,320				2,157				2,316
Non-Interest Expense
Employee compensation and  benefits			4,199				4,482				4,059				4,394				4,114
Occupancy			283				389				245				332				278
Information processing			591				563				641				529				529
Professional fees			417				399				497				351				359
Business development			347				325				259				258				260
OREO expenses			121				51				106				46				152
Writedown of OREO			250				-				688				81				104
Net loss (gain) on sale of OREO			9				(136	)			(54	)			(28	)			(149	)
Depreciation and amortization			328				337				408				302				324
Other			901				895				689				758				966
Total non-interest expense			7,446				7,305				7,538				7,023				6,937
Income before income taxes			4,997				5,253				3,953				4,745				5,184
Income tax expense			1,293				1,491				1,123				1,228				1,334
NET INCOME		$	3,704			$	3,762			$	2,830			$	3,517			$	3,850
Basic		$	0.53			$	0.54			$	0.41			$	0.51			$	0.56
Diluted		$	0.53			$	0.54			$	0.40			$	0.50			$	0.55
Dividends declared		$	0.05			$	0.05			$	0.07			$	0.07			$	0.07

		For the Three Months Ended
		June 30,2019				March 31,2019				December 31,2018				September 30,2018				June 30,2018
		(dollars in thousands, except share data)
Other Data:
Return on average assets			1.00	%			1.00	%			0.75	%			0.94	%			1.04	%
Return on average shareholders'    equity			9.24	%			9.78	%			7.58	%			9.51	%			10.63	%
Return on average common    shareholders' equity (1)			9.41	%			9.99	%			7.70	%			9.75	%			10.96	%
Efficiency ratio (1)			55.38	%			55.91	%			52.85	%			54.62	%			55.18	%
Tangible common equity to    tangible assets (1)			10.10	%			9.73	%			9.14	%			8.90	%			8.75	%
Common Share Data:
Net income from continuing    operations		$	3,704			$	3,762			$	2,830			$	3,517			$	3,850
Less:  Preferred stock dividends			118				117				111				106				99
Income available to common     shareholders		$	3,586			$	3,645			$	2,719			$	3,411			$	3,751
Weighted average number of common    shares issued			7,159,072				7,153,174				7,127,544				7,108,202				7,101,978
Less: Weighted average treasury    shares			443,920				443,729				443,694				443,140				442,102
Less: Weighted average non-    vested restricted units    awards			30,483				16,260				28,701				29,537				30,692
Weighted average number of    common shares outstanding			6,745,635				6,725,705				6,712,551				6,694,599				6,690,568
Effect of dilutive options			20,731				21,323				45,116				63,346				79,368
Weighted average number of    common shares outstanding    used to calculate diluted    earnings per common share			6,766,366				6,747,028				6,757,667				6,757,945				6,769,936

(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 30,2019				March 31,2019				December 31,2018				September 30,2018				June 30,2018
		(dollars in thousands)
Return on average common  shareholders' equity  reconciliation:
Return on average shareholders'    equity			9.24	%			9.78	%			7.58	%			9.51	%			10.63	%
Effect of excluding average    preferred shareholders'    equity			0.17	%			0.21	%			0.12	%			0.24	%			0.33	%
Return on average common    shareholders' equity			9.41	%			9.99	%			7.70	%			9.75	%			10.96	%
Efficiency ratio GAAP to non-GAAP  reconciliation:
Non-interest expense		$	7,446			$	7,305			$	7,538			$	7,023			$	6,937
Less: net gain (loss) on sales and    write-downs of OREO			(259	)			136				(634	)			(53	)			45
Adjusted non-interest expense    (non-GAAP)		$	7,187			$	7,441			$	6,904			$	6,970			$	6,982
Net interest income		$	10,432			$	10,560			$	10,743			$	10,604			$	10,338
Non-interest income			2,887				2,750				2,320				2,157				2,316
Less: net gain on sales of    securities			(341	)			-				-				-				-
Operating revenue		$	12,978			$	13,310			$	13,063			$	12,761			$	12,654
Efficiency ratio			55.38	%			55.91	%			52.85	%			54.62	%			55.18	%

               

		June 30,2019				March 31,2019				December 31,2018				September 30,2018				June 30,2018
		(dollars in thousands, except per share data)
Tangible book value per share and  tangible common equity to tangible  assets reconciliation:
Common equity		$	154,724			$	150,017			$	144,085			$	139,987			$	138,082
Less: Goodwill			5,038				5,038				5,038				5,038				5,038
Less: Core deposit intangible, net of    amortization			354				430				513				603				701
Tangible common equity (non-GAAP)		$	149,332			$	144,549			$	138,534			$	134,346			$	132,343
Common shares outstanding			6,717,908				6,709,254				6,709,480				6,694,230				6,693,447
Tangible book value per share		$	22.23			$	21.54			$	20.65			$	20.07			$	19.77
Total assets		$	1,484,646			$	1,491,388			$	1,520,828			$	1,514,968			$	1,518,877
Less: Goodwill			5,038				5,038				5,038				5,038				5,038
Less: Core deposit intangible, net of    amortization			354				430				513				603				701
Tangible assets (non-GAAP)		$	1,479,254			$	1,485,920			$	1,515,277			$	1,509,327			$	1,513,138
Tangible common equity to tangible assets			10.10	%			9.73	%			9.14	%			8.90	%			8.75	%
Adverse classified asset ratio:
Substandard loans		$	117,765			$	107,492			$	120,887			$	118,368			$	93,833
Less: Impaired performing restructured loans			(8,276	)			(6,382	)			(5,078	)			(13,657	)			(2,081	)
Net substandard loans		$	109,489			$	101,110			$	115,809			$	104,711			$	91,752
Other real estate owned			8,693				5,019				6,568				7,851				8,607
Substandard unused commitments			1,458				976				1,625				1,191				959
Less: Substandard government guarantees			(7,821	)			(5,864	)			(7,111	)			(9,374	)			(8,356	)
Total adverse classified assets (non-GAAP)		$	111,819			$	101,241			$	116,891			$	104,379			$	92,962
Total equity (Bank)		$	196,036			$	191,287			$	185,458			$	180,359			$	177,911
Accumulated other comprehensive loss    (gain) on available for sale securities			(2,166	)			(436	)			2,221				4,152				2,795
Allowance for loan losses			16,258				17,493				16,505				16,143				15,129
Allowance for unused commitments			-				-				475				510				522
Adjusted total equity (non-GAAP)		$	210,128			$	208,344			$	204,659			$	201,164			$	196,357
Adverse classified asset ratio			53.21	%			48.59	%			57.12	%			51.89	%			47.34	%

		For the Three Months Ended
		June 30, 2019												March 31, 2019												June 30, 2018
		AverageBalance (1)				Income/Expense				Yields/Rates				AverageBalance (1)				Income/Expense				Yields/Rates				AverageBalance (1)				Income/Expense				Yields/Rates
		(dollars in thousands)
Assets
Investment securities		$	176,237			$	1,259				2.86	%		$	192,963			$	1,361				2.82	%		$	158,260			$	996				2.52	%
Loans (2)			1,177,071				15,484				5.26	%			1,207,240				15,501				5.14	%			1,187,719				14,367				4.84	%
Interest bearing deposits due from  other banks			73,769				465				2.52	%			36,227				264				2.92	%			100,646				400				1.59	%
Total interest-earning assets		$	1,427,077			$	17,208				4.82	%		$	1,436,430			$	17,126				4.77	%		$	1,446,625			$	15,763				4.36	%
Allowance for loan losses			(17,782	)											(17,005	)											(14,918	)
Other assets			76,806												78,654												57,878
Total assets		$	1,486,101											$	1,498,079											$	1,489,585
Liabilities
Savings, NOW, money market,  interest checking		$	315,940			$	1,316				1.67	%		$	295,418			$	1,184				1.60	%		$	279,958			$	789				1.13	%
Time deposits			770,554				4,363				2.26	%			797,476				4,240				2.13	%			819,037				3,811				1.86	%
Total interest-bearing deposits		$	1,086,494			$	5,679				2.09	%		$	1,092,894			$	5,424				1.99	%		$	1,098,995			$	4,600				1.67	%
Other borrowings			1,204				13				4.47	%			844				11				5.27	%			1,167				14				4.79	%
FHLB advances			78,653				401				2.04	%			92,900				453				1.95	%			117,327				473				1.61	%
Junior subordinated debentures			44,762				683				6.11	%			44,606				678				6.08	%			25,547				338				5.29	%
Total interest-bearing  liabilities		$	1,211,113			$	6,776				2.24	%		$	1,231,244			$	6,566				2.13	%		$	1,243,036			$	5,425				1.75	%
Non-interest-bearing deposits			102,432												101,532												93,876
Other liabilities			12,154												11,362												7,829
Total liabilities		$	1,325,699											$	1,344,138											$	1,344,741
Shareholders' equity			160,402												153,941												144,844
Total liabilities and equity		$	1,486,101											$	1,498,079											$	1,489,585
Net interest income						$	10,432											$	10,560											$	10,338
Interest rate spread (3)											2.59	%											2.64	%											2.61	%
Net interest margin (4)											2.92	%											2.94	%											2.87	%
Ratio of interest-earning assets to  interest-bearing liabilities			1.18												1.17												1.16

(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, 2019												June 30, 2018
		AverageBalance (1)				Income/Expense				Yields/Rates				AverageBalance (1)				Income/Expense				Yields/Rates
		(dollars in thousands)
Assets
Investment securities		$	186,076			$	2,620				2.82	%		$	147,553			$	1,785				2.42	%
Loans (2)			1,192,073				30,985				5.20	%			1,180,294				28,057				4.75	%
Interest bearing deposits due from other  banks			55,102				729				2.65	%			87,012				614				1.41	%
Total interest-earning assets		$	1,433,251			$	34,334				4.79	%		$	1,414,859			$	30,456				4.31	%
Allowance for loan losses			(17,396	)											(14,323	)
Other assets			76,613												52,395
Total assets		$	1,492,468											$	1,452,931
Liabilities
Savings, NOW, money market, interest  checking		$	307,903				2,500				1.62	%		$	278,889				1,448				1.04	%
Time deposits			781,672				8,602				2.20	%			783,202				6,948				1.77	%
Total interest-bearing deposits		$	1,089,575			$	11,102				2.04	%		$	1,062,091			$	8,396				1.58	%
Other borrowings			1,025				25				4.80	%			1,226				30				4.94	%
FHLB advances			85,737				854				1.99	%			119,187				941				1.58	%
Junior subordinated debentures			44,742				1,361				6.09	%			20,566				481				4.68	%
Total interest-bearing liabilities		$	1,221,079			$	13,342				2.19	%		$	1,203,070			$	9,848				1.64	%
Non-interest-bearing deposits			102,050												98,728
Other liabilities			11,797												7,698
Total liabilities		$	1,334,926											$	1,309,496
Shareholders' equity			157,542												143,435
Total liabilities and equity		$	1,492,468											$	1,452,931
Net interest income						$	20,992											$	20,608
Interest rate spread (3)											2.61	%											2.67	%
Net interest margin (4)											2.93	%											2.91	%
Ratio of interest-earning assets to interest-  bearing liabilities			1.17												1.18

(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.