Quarter Ended September
30, 2018 as Compared with Quarter Ended
September
30, 2017
The Companys average interest-earning assets decreased approximately $24,120,000, or 4%, from
approximately $591,132,000 for the third quarter of 2017 to approximately $567,012,000 for the third quarter of 2018. The Companys average balance sheet decreased primarily as average loans decreased approximately $9,025,000 and average
balances due from financial institutions decreased approximately $10,586,000 while average held to maturity taxable securities increased approximately $4,404,000 and average taxable available for sale securities decreased approximately $7,030,000.
The Companys average loans decreased as principal payments, maturities, charge-offs and foreclosures relating to existing loans outpaced new loans. Average balances due from financial institutions decreased and average taxable held to maturity
securities increased as excess funds were invested to increase interest income.
The average yield on earning assets increased by 35 basis points, from
3.21% for the third quarter of 2017 to 3.56% for the third quarter of 2018. The yield on average loans increased from 4.53% for the third quarter of 2017 to 4.93% for the third quarter of 2018 primarily as a result of the effect of the increase in
prime rate during 2017 and 2018 on the Companys floating rate loans. The yield on average taxable available for sale securities increased from 1.52% for the third quarter of 2017 to 2.02% for the third quarter of 2018 as the Company changed
its investment strategy to improve yield while not compromising duration and credit risk.
Average interest-bearing liabilities decreased approximately
$30,126,000, or 7%, from approximately $432,952,000 for the third quarter of 2017 to approximately $402,826,000 for the third quarter of 2018. Average savings and interest bearing DDA deposits decreased approximately $37,904,000 primarily as several
large customers reallocated their funds to other institutions in the current year. Average time deposits increased approximately $4,714,000 as some customers transferred funds from their savings and interest bearing DDA accounts to improve their
yield.
The average rate paid on interest-bearing liabilities for the third quarter of 2017 was .36% as compared with .70% for the third quarter of 2018.
This increase is primarily due to increased rates in 2017 and 2018.
The Companys net interest margin on a
tax-equivalent
basis, which is net interest income as a percentage of average earning assets, was 2.95% for the third quarter of 2017 as compared with 3.06% for the third quarter of 2018.
Nine Months Ended September
30, 2018 as Compared with Nine Months Ended September
30, 2017
The Companys average interest-earning assets decreased approximately $27,435,000, or 5%, from approximately $605,721,000 for the first three quarters of
2017 to approximately $578,286,000 for the first three quarters of 2018. The Companys average balance sheet decreased primarily as average loans decreased approximately $20,458,000 and average balances due from financial institutions decreased
approximately $19,308,000 while average held to maturity taxable securities increased approximately $5,098,000 and average taxable available for sale securities increased approximately $9,767,000. The Companys average loans decreased as
principal
35