Mid Penn Bancorp, Inc. Reports Fourth Quarter Earnings and Declares Quarterly Dividend

Published

HARRISBURG, Pa.--(BUSINESS WIRE)-- Mid Penn Bancorp, Inc. (NASDAQ: MPB) ("Mid Penn"), the parent company of Mid Penn Bank (the "Bank") and MPB Financial Services, LLC, today reported net income available to common shareholders ("earnings") for the quarter ended December 31, 2023, of $12.1 million, or $0.73 per diluted common share.

Key Highlights of the Fourth Quarter of 2023:

  • Net income available to common shareholders increased 31.0% to $12.1 million, or $0.73 per diluted common share for the fourth quarter of 2023, compared to net income of $9.2 million, or $0.56 per diluted common share for the third quarter of 2023.
  • Return on average assets was 0.92% and return on average equity was 8.93% for the quarter ended December 31, 2023, compared to return on average assets of 0.72% and return on average equity of 6.93% in the third quarter of 2023.
  • Loan growth for the fourth quarter of 2023 was $107.1 million, or 10.5% (annualized), from the third quarter of 2023. Total loans increased $738.7 million compared to the prior year. Organic loan growth for the year ended December 31, 2023, was $423.6 million or 10.8% (excluding Brunswick acquisition loans of $324.5 million).
  • Total interest income increased 4.26% to $66.1 million for the quarter ended December 31, 2023, driven by an increase in interest income on loans of $2.5 million from the third quarter of 2023.
  • Deposits decreased $35.4 million, or 3.2% (annualized), for the quarter ended December 31, 2023, from the third quarter of 2023, primarily driven by a decrease in interest bearing transaction accounts partially offset by an increase in time deposits. Organic deposits increased $285.3 million or 7.5% (excluding Brunswick acquisition deposits) for the year ended December 31, 2023, compared to the prior year.
  • Total interest expense increased 12.26% to $29.1 million for the quarter ended December 31, 2023, driven by an increase in the cost of deposits of $2.2 million from the third quarter of 2023.
  • Total noninterest income decreased $229.0 thousand to $5.1 million in the fourth quarter of 2023 from $5.3 million in the prior quarter.
  • Total noninterest expense decreased $2.4 million to $27.5 million in the fourth quarter of 2023 from $29.9 million in the prior quarter.
  • The Board declared a cash dividend of $0.20 per share, payable February 20, 2024, to shareholders of record as of February 9, 2024.

“Our performance in the fourth quarter of 2023, while an improvement over the linked third quarter of 2023, was still heavily impacted by the continuation of an inverted yield curve and the rigorous competition for core deposits," Chair, President, and CEO Rory G. Ritrievi said. "The measures we implemented in the third quarter, such as slowing down organic loan growth and cutting operating expenses, helped shape the fourth quarter improvement while positioning our strategy for fiscal year 2024."

Ritrievi continued, "We expect 2024 to be another difficult operating environment for financial institutions, particularly ones with a heavy reliance on the spread business. Accordingly, our measured approach to growth and expense control will persist throughout the year."

For the fourth quarter of 2023, the Board is pleased to announce a quarterly cash dividend of $0.20 per share of common stock, which was declared at its meeting on January 24, 2024, payable on February 20, 2024, to shareholders of record as of February 9, 2024.

Net Interest Income

For the three months ended December 31, 2023, net interest income was $37.0 million compared to net interest income of $37.5 million for the three months ended September 30, 2023, and $38.6 million for the three months ended December 31, 2022. The tax-equivalent net interest margin for the three months ended December 31, 2023, was 3.02% compared to 3.16% for the third quarter of 2023, and 3.80% for the fourth quarter of 2022, representing a 14 basis point ("bp") decrease compared to the prior quarter, and a 78 bp decrease compared to the same period in 2022, primarily driven by rising interest rates and persistent inflation.

The yield on interest-earning assets increased to 5.39% for the quarter ended December 31, 2023, from 5.35% for the quarter ended September 30, 2023, and 4.58% for the quarter ended December 31, 2022. These increases were due to assets continuing to reprice at higher rates during the fourth quarter of 2023. Increased yields on interest-earning assets were more than offset by increases in funding costs for the fourth quarter of 2023, with overall cost of interest-bearing liabilities increasing to 3.02% during the fourth quarter of 2023, compared to 2.79% for the three months ended September 30, 2023, and 1.08% for the three months ended December 31, 2022.

For the twelve months ended December 31, 2023, net interest income decreased $860.0 thousand to $147.0 million compared to net interest income of $147.8 million for the same period of 2022.

Average Balances

Average loans increased $147.6 million to $4.2 billion for the quarter ended December 31, 2023, compared to $4.1 billion for the quarter ended September 30, 2023, and $3.4 billion for the quarter ended December 31, 2022. Average deposits were $4.4 billion for the fourth quarter of 2023, reflecting an increase of $41.5 million, or 1.0%, compared to total average deposits in the third quarter of 2023, and $675.3 million, or 18.1%, compared to total average deposits of $3.7 billion for the fourth quarter of 2022. The average cost of deposits was 2.33% for the fourth quarter of 2023, representing an 18 bp increase and a 158 bp increase from the third quarter of 2023 and the fourth quarter of 2022, respectively. We continue to face headwinds with respect to deposit pricing, given rising interest rates and competition for deposits across all product types. Our primary focus with respect to deposit strategy is stability, ensuring that our rates are competitive and our product mix satisfies the needs of our customers. Additionally, Mid Penn also maintains interest rate swaps to hedge the cash flows associated with existing brokered CDs to mitigate the impact of rising deposit costs.

The mix of deposits continues to shift as customers move funds from non-interest-bearing accounts to time deposits given prevailing thought that current rates are at highs. Time deposits represented 31.0% of total deposits at September 30, 2023, and increased to 33.6% at December 31, 2023. The mix of non-interest-bearing deposits remained flat during the quarter, representing approximately 18.4% of total deposits at December 31, 2023, compared to 18.4% at September 30, 2023, 19.4% at June 30, 2023, and 20.6% at March 31, 2023. The average duration of the non-hedged time deposit portfolio is 12 months at December 31, 2023.

Asset Quality

On January 1, 2023, Mid Penn adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology and is referred to as CECL. Results for reporting periods beginning after January 1, 2023, are presented under CECL, while prior period results are reported in accordance with the previously applicable incurred loss methodology.

The provision for credit losses on loans was $221.0 thousand for the three months ended December 31, 2023, a decrease of $1.2 million compared to the provision for credit losses of $1.4 million for the three months ended September 30, 2023. The provision for credit losses on loans was $3.3 million for the twelve months ended December 31, 2023, a decrease of $1.0 million compared to the provision for credit losses of $4.3 million for the twelve months ended December 31, 2022. The decrease in provision for the twelve months ended December 31, 2023, is primarily due to a decrease in nonperforming individually-evaluated loans. Net chargeoffs for the twelve months ended December 31, 2023, were $332.0 thousand or less than 1% of total loans.

Total nonperforming assets were $14.5 million at December 31, 2023, compared to nonperforming assets of $14.4 million and $8.6 million at September 30, 2023, and December 31, 2022, respectively. The increase during the fourth quarter of 2023 primarily related to payoffs on nonaccrual loans. Delinquency as a percentage of total loans was 0.49% at December 31, 2023.

Capital

Shareholders’ equity increased $31.5 million, or 6.15%, from $512.1 million as of December 31, 2022, to $543.6 million as of December 31, 2023. The increase was primarily due to the acquisition of Brunswick Bancorp in the second quarter of 2023. Retained earnings increased $12.9 million or 9.67% from $133.1 million as of December 31, 2022, to $146.0 million as of December 31, 2023. Regulatory capital ratios for both Mid Penn and its banking subsidiary indicate regulatory capital levels in excess of both the regulatory minimums and the levels necessary for the Bank to be considered "well capitalized" at December 31, 2023. Additionally, Mid Penn declared $3.3 million in dividends during the fourth quarter of 2023.

On May 11, 2023, Mid Penn’s Board of Directors reauthorized its treasury stock repurchase program ("Program") effective through May 11, 2024. The Program authorizes the repurchase of up to $15.0 million of Mid Penn’s outstanding common stock. There were 12,500 share repurchases during the three months ended December 31, 2023. During the twelve months ended December 31, 2023, Mid Penn repurchased 216,879 shares of common stock at an average price of $22.31. As of December 31, 2023, Mid Penn repurchased 425,222 shares of common stock at an average price of $22.86 per share under the Program. The Program had $5.3 million remaining available for repurchase as of December 31, 2023.

Noninterest Income

For the three months ended December 31, 2023, noninterest income totaled $5.1 million, which was relatively consistent with noninterest income of $5.3 million for the third quarter of 2023.

For the twelve months ended December 31, 2023, noninterest income totaled $20.0 million, a decrease of $3.6 million, compared to noninterest income of $23.7 million for the twelve months ended December 31, 2022. The decrease in noninterest income is primarily due to a $1.2 million decrease in residential mortgage business, and a $1.8 million decrease in other miscellaneous income. Given the rising interest rate environment and overall lower demand for mortgages, that industry continues to be a drag on all other earnings.

Noninterest Expense

Noninterest expense totaled $27.5 million, a decrease of $2.4 million, or 8.0%, for the three months ended December 31, 2023, compared to noninterest expense of $29.9 million for the third quarter of 2023. For the twelve months ended December 31, 2023, noninterest expense totaled $119.0 million, an increase of $19.1 million, or 19.2%, compared to noninterest expense of $99.8 million for the twelve months ended December 31, 2022. The increase in noninterest expense for the twelve months ended December 31, 2023, is driven by $8.5 million of merger-related expenses, a $6.7 million increase in salaries and benefits expense, and a $1.9 million increase in FDIC charges due to special assessments levied to recover the losses to the Deposit Insurance Fund resulting from the bank failures in 2023.

The efficiency ratio(1) was 64.1% in the fourth quarter of 2023, compared to 67.9% in the third quarter of 2023, and 54.6% in the fourth quarter of 2022. Mid Penn continues to evaluate levels of noninterest expense for opportunities to reduce operating costs throughout the organization.

Subsequent Events

Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s consolidated financial statements when filed with the Securities and Exchange Commission ("SEC"). Accordingly, the financial information in this announcement is subject to change. The statements are valid only as of the date hereof and Mid Penn disclaims any obligation to update this information.

 

(1)

Non-GAAP financial measure. Refer to the calculation on the section titled “Reconciliation of Non-GAAP Measures” at the end of this document.

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by such forward-looking terminology as "continues," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy" or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on securities held in Mid Penn’s portfolio; legislation affecting the financial services industry as a whole, and Mid Penn and Mid Penn Bank individually or collectively, including tax legislation; results of the regulatory examination and supervision process and oversight, including changes in monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; the availability of financial resources in the amounts, at the times and on the terms required to support Mid Penn and Mid Penn Bank’s future businesses; material differences in the actual financial results of merger, acquisition and investment activities compared with Mid Penn’s initial expectations, including the full realization of anticipated cost savings and revenue enhancements; the possibility that the anticipated benefits of a transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in legacy Mid Penn and target markets; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of a transaction; the ability to complete the integration of Mid Penn and its target successfully; the dilution caused by Mid Penn’s issuance of additional shares of its capital stock in connection with a transaction; and other factors that may affect the future results of Mid Penn.

For a more detailed description of these and other factors which would affect our results, please see Mid Penn’s filings with the SEC, including those risk factors identified in the "Risk Factors" section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent filings with the SEC. The statements in this press release are made as of the date of this press release, even if subsequently made available by Mid Penn on its website or otherwise. Mid Penn does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of unanticipated events, except as required by law.

SUMMARY FINANCIAL HIGHLIGHTS (Unaudited):

(Dollars in thousands, except per share data)

Dec. 31, 2023

 

Sep. 30, 2023

 

Jun. 30, 2023

 

Mar. 31, 2023

 

Dec. 31, 2022

Ending Balances:

 

 

 

 

 

 

 

 

 

Investment securities

$

623,121

 

 

$

620,038

 

 

$

634,038

 

 

$

633,831

 

 

$

637,802

 

Loans, net of unearned interest

 

4,218,605

 

 

 

4,111,653

 

 

 

4,001,922

 

 

 

3,580,082

 

 

 

3,495,162

 

Total assets

 

5,292,053

 

 

 

5,215,963

 

 

 

5,088,813

 

 

 

4,583,465

 

 

 

4,497,954

 

Total deposits

 

4,346,212

 

 

 

4,381,616

 

 

 

4,286,686

 

 

 

3,878,081

 

 

 

3,778,331

 

Shareholders' equity

 

543,611

 

 

 

528,711

 

 

 

525,888

 

 

 

510,793

 

 

 

512,099

 

Average Balances:

 

 

 

 

 

 

 

 

 

Investment securities

 

606,946

 

 

 

619,071

 

 

 

630,750

 

 

 

636,151

 

 

 

640,792

 

Loans, net of unearned interest

 

4,201,092

 

 

 

4,053,514

 

 

 

3,808,717

 

 

 

3,555,375

 

 

 

3,395,308

 

Total assets

 

5,226,382

 

 

 

5,106,103

 

 

 

4,827,786

 

 

 

4,520,869

 

 

 

4,381,213

 

Total deposits

 

4,402,565

 

 

 

4,361,067

 

 

 

4,057,605

 

 

 

3,782,990

 

 

 

3,727,287

 

Shareholders' equity

 

537,219

 

 

 

529,067

 

 

 

504,535

 

 

 

510,857

 

 

 

505,769

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Income Statement:

Dec. 31, 2023

 

Sep. 30, 2023

 

Jun. 30, 2023

 

Mar. 31, 2023

 

Dec. 31, 2022

Net interest income

$

37,000

 

 

$

37,480

 

 

$

36,444

 

 

$

36,049

 

 

$

38,577

 

Provision for credit losses

 

221

 

 

 

1,427

 

 

 

1,157

 

 

 

490

 

 

 

525

 

Noninterest income

 

5,117

 

 

 

5,346

 

 

 

5,220

 

 

 

4,325

 

 

 

6,714

 

Noninterest expense

 

27,504

 

 

 

29,889

 

 

 

35,529

 

 

 

26,070

 

 

 

25,468

 

Income before provision for income taxes

 

14,392

 

 

 

11,510

 

 

 

4,978

 

 

 

13,814

 

 

 

19,298

 

Provision for income taxes

 

2,294

 

 

 

2,274

 

 

 

142

 

 

 

2,587

 

 

 

3,579

 

Net income available to shareholders

 

12,098

 

 

 

9,236

 

 

 

4,836

 

 

 

11,227

 

 

 

15,719

 

Net income excluding non-recurring expenses (1)

 

12,098

 

 

 

9,514

 

 

 

11,112

 

 

 

11,404

 

 

 

15,951

 

 

 

 

 

 

 

 

 

 

 

Per Share:

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.73

 

 

$

0.56

 

 

$

0.29

 

 

$

0.71

 

 

$

0.99

 

Diluted earnings per common share

 

0.73

 

 

 

0.56

 

 

 

0.29

 

 

 

0.70

 

 

 

0.99

 

Cash dividends declared

 

0.20

 

 

 

0.20

 

 

 

0.20

 

 

 

0.20

 

 

 

0.20

 

Book value per common share

 

32.80

 

 

 

31.89

 

 

 

31.74

 

 

 

32.15

 

 

 

32.24

 

Tangible book value per common share (1)

 

24.74

 

 

 

23.64

 

 

 

23.48

 

 

 

24.52

 

 

 

24.59

 

 

 

 

 

 

 

 

 

 

 

Asset Quality:

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans (annualized)

 

0.004

%

 

 

0.001

%

 

 

0.018

%

 

 

0.013

%

 

 

0.006

%

Non-performing loans to total loans

 

0.33

 

 

 

0.32

 

 

 

0.39

 

 

 

0.38

 

 

 

0.25

 

Non-performing asset to total loans and other real estate

 

0.34

 

 

 

0.35

 

 

 

0.40

 

 

 

0.39

 

 

 

0.25

 

Non-performing asset to total assets

 

0.27

 

 

 

0.28

 

 

 

0.32

 

 

 

0.31

 

 

 

0.21

 

ACL on loans to total loans

 

0.80

 

 

 

0.82

 

 

 

0.81

 

 

 

0.87

 

 

 

0.54

 

ACL on loans to nonperforming loans

 

240.48

 

 

 

252.67

 

 

 

205.65

 

 

 

225.71

 

 

 

220.82

 

 

 

 

 

 

 

 

 

 

 

Profitability:

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.92

%

 

 

0.72

%

 

 

0.40

%

 

 

1.01

%

 

 

1.42

%

Return on average equity

 

8.93

 

 

 

6.93

 

 

 

3.84

 

 

 

8.91

 

 

 

12.33

 

Return on average tangible common equity (1)

 

12.36

 

 

 

9.72

 

 

 

5.53

 

 

 

11.97

 

 

 

16.61

 

Net interest margin

 

3.02

 

 

 

3.16

 

 

 

3.29

 

 

 

3.49

 

 

 

3.80

 

Efficiency ratio (1)

 

64.14

 

 

 

67.88

 

 

 

65.40

 

 

 

63.16

 

 

 

54.59

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Average Assets) (2)

 

8.3

%

 

 

8.4

%

 

 

9.6

%

 

 

9.2

%

 

 

10.7

%

Common Tier 1 Capital (to Risk Weighted Assets) (2)

 

9.7

 

 

 

9.7

 

 

 

10.7

 

 

 

10.8

 

 

 

12.5

 

Tier 1 Capital (to Risk Weighted Assets) (2)

 

9.7

 

 

 

9.7

 

 

 

10.7

 

 

 

10.8

 

 

 

12.5

 

Total Capital (to Risk Weighted Assets) (2)

 

11.6

 

 

 

11.7

 

 

 

11.5

 

 

 

13.1

 

 

 

14.5

 

 

(1)

Non-GAAP financial measure. Refer to the calculation on the section titled “Reconciliation of Non-GAAP Measures” at the end of this document.

 

(2)

Regulatory capital ratios as of December 31, 2023 are preliminary and prior periods are actual.

CONSOLIDATED BALANCE SHEETS (Unaudited):

(In thousands, except share data)

Dec. 31, 2023

 

Sep. 30, 2023

 

Jun. 30, 2023

 

Mar. 31, 2023

 

Dec. 31, 2022

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

45,435

 

 

$

52,509

 

 

$

70,832

 

 

$

51,158

 

 

$

53,368

 

Interest-bearing balances with other financial institutions

 

34,668

 

 

 

12,739

 

 

 

13,332

 

 

 

4,996

 

 

 

4,405

 

Federal funds sold

 

16,660

 

 

 

52,851

 

 

 

9,711

 

 

 

6,017

 

 

 

3,108

 

Total cash and cash equivalents

 

96,763

 

 

 

118,099

 

 

 

93,875

 

 

 

62,171

 

 

 

60,881

 

Investment Securities:

 

 

 

 

 

 

 

 

 

Held to maturity, at amortized cost

 

399,128

 

 

 

401,561

 

 

 

404,831

 

 

 

396,784

 

 

 

399,494

 

Available for sale, at fair value

 

223,555

 

 

 

218,064

 

 

 

228,774

 

 

 

236,609

 

 

 

237,878

 

Equity securities available for sale, at fair value

 

438

 

 

 

413

 

 

 

433

 

 

 

438

 

 

 

430

 

Loans held for sale

 

3,855

 

 

 

4,270

 

 

 

7,258

 

 

 

2,677

 

 

 

2,475

 

Loans, net of unearned interest

 

4,252,792

 

 

 

4,145,657

 

 

 

4,034,510

 

 

 

3,611,347

 

 

 

3,514,119

 

Less: Allowance for credit losses

 

(34,187

)

 

 

(34,004

)

 

 

(32,588

)

 

 

(31,265

)

 

 

(18,957

)

Net loans

 

4,218,605

 

 

 

4,111,653

 

 

 

4,001,922

 

 

 

3,580,082

 

 

 

3,495,162

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

36,799

 

 

 

38,849

 

 

 

39,230

 

 

 

34,191

 

 

 

34,471

 

Operating lease right of use asset

 

8,953

 

 

 

8,693

 

 

 

9,106

 

 

 

8,414

 

 

 

8,798

 

Finance lease right of use asset

 

2,728

 

 

 

2,773

 

 

 

2,817

 

 

 

2,862

 

 

 

2,907

 

Cash surrender value of life insurance

 

54,497

 

 

 

54,209

 

 

 

53,931

 

 

 

50,928

 

 

 

50,674

 

Restricted investment in bank stocks

 

16,768

 

 

 

13,554

 

 

 

11,646

 

 

 

8,041

 

 

 

8,315

 

Accrued interest receivable

 

25,820

 

 

 

24,230

 

 

 

19,626

 

 

 

19,205

 

 

 

18,405

 

Deferred income taxes

 

25,372

 

 

 

25,509

 

 

 

24,309

 

 

 

15,548

 

 

 

13,674

 

Goodwill

 

127,054

 

 

 

129,752

 

 

 

129,403

 

 

 

114,231

 

 

 

114,231

 

Core deposit and other intangibles, net

 

6,479

 

 

 

6,970

 

 

 

7,453

 

 

 

6,916

 

 

 

7,260

 

Foreclosed assets held for sale

 

293

 

 

 

905

 

 

 

489

 

 

 

248

 

 

 

43

 

Other assets

 

44,946

 

 

 

56,459

 

 

 

53,710

 

 

 

44,120

 

 

 

42,856

 

Total Assets

$

5,292,053

 

 

$

5,215,963

 

 

$

5,088,813

 

 

$

4,583,465

 

 

$

4,497,954

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

$

801,312

 

 

$

804,785

 

 

$

830,479

 

 

$

797,038

 

 

$

793,939

 

Interest-bearing transaction accounts

 

2,086,450

 

 

 

2,217,885

 

 

 

2,180,312

 

 

 

2,197,216

 

 

 

2,325,847

 

Time

 

1,458,450

 

 

 

1,358,946

 

 

 

1,275,895

 

 

 

883,827

 

 

 

658,545

 

Total Deposits

 

4,346,212

 

 

 

4,381,616

 

 

 

4,286,686

 

 

 

3,878,081

 

 

 

3,778,331

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

241,532

 

 

 

139,000

 

 

 

112,442

 

 

 

88,000

 

 

 

102,647

 

Long-term debt

 

59,003

 

 

 

58,992

 

 

 

58,982

 

 

 

4,316

 

 

 

4,409

 

Subordinated debt and trust preferred securities

 

46,354

 

 

 

46,501

 

 

 

46,648

 

 

 

56,794

 

 

 

56,941

 

Operating lease liability

 

9,285

 

 

 

9,097

 

 

 

9,894

 

 

 

9,270

 

 

 

9,725

 

Accrued interest payable

 

14,257

 

 

 

14,657

 

 

 

11,115

 

 

 

5,809

 

 

 

2,303

 

Other liabilities

 

31,799

 

 

 

37,389

 

 

 

37,158

 

 

 

30,402

 

 

 

31,499

 

Total Liabilities

 

4,748,442

 

 

 

4,687,252

 

 

 

4,562,925

 

 

 

4,072,672

 

 

 

3,985,855

 

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

 

 

 

 

Common stock, par value $1.00 per share; 40.0 million shares authorized

 

16,999

 

 

 

16,993

 

 

 

16,980

 

 

 

16,098

 

 

 

16,094

 

Additional paid-in capital

 

406,986

 

 

 

405,341

 

 

 

404,902

 

 

 

387,332

 

 

 

386,987

 

Retained earnings

 

145,982

 

 

 

137,199

 

 

 

131,271

 

 

 

129,617

 

 

 

133,114

 

Accumulated other comprehensive loss

 

(16,637

)

 

 

(21,362

)

 

 

(17,805

)

 

 

(17,374

)

 

 

(19,216

)

Treasury stock

 

(9,719

)

 

 

(9,460

)

 

 

(9,460

)

 

 

(4,880

)

 

 

(4,880

)

Total Shareholders’ Equity

 

543,611

 

 

 

528,711

 

 

 

525,888

 

 

 

510,793

 

 

 

512,099

 

Total Liabilities and Shareholders' Equity

$

5,292,053

 

 

$

5,215,963

 

 

$

5,088,813

 

 

$

4,583,465

 

 

$

4,497,954

 

CONSOLIDATED STATEMENTS OF INCOME (Unaudited):

 

Three Months Ended

 

Twelve Months Ended

(Dollars in thousands, except per share data)

Dec. 31, 2023

 

Sep. 30, 2023

 

Jun. 30, 2023

 

Mar. 31, 2023

 

Dec. 31, 2022

 

Dec. 31, 2023

 

Dec. 31, 2022

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

$

61,309

 

$

58,792

 

 

$

52,094

 

 

$

45,865

 

$

42,492

 

 

$

218,060

 

 

$

150,256

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

4,063

 

 

4,106

 

 

 

3,962

 

 

 

3,874

 

 

3,784

 

 

 

16,005

 

 

 

11,952

 

Tax-exempt

 

378

 

 

382

 

 

 

391

 

 

 

389

 

 

390

 

 

 

1,540

 

 

 

1,497

 

Other interest-bearing balances

 

139

 

 

86

 

 

 

83

 

 

 

53

 

 

36

 

 

 

361

 

 

 

69

 

Federal funds sold

 

228

 

 

51

 

 

 

49

 

 

 

45

 

 

40

 

 

 

373

 

 

 

1,826

 

Total Interest Income

 

66,117

 

 

63,417

 

 

 

56,579

 

 

 

50,226

 

 

46,742

 

 

 

236,339

 

 

 

165,600

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

25,808

 

 

23,559

 

 

 

17,927

 

 

 

12,001

 

 

6,995

 

 

 

79,295

 

 

 

14,144

 

Short-term borrowings

 

2,506

 

 

1,584

 

 

 

1,507

 

 

 

1,490

 

 

441

 

 

 

7,087

 

 

 

441

 

Long-term and subordinated debt

 

803

 

 

794

 

 

 

701

 

 

 

686

 

 

729

 

 

 

2,984

 

 

 

3,182

 

Total Interest Expense

 

29,117

 

 

25,937

 

 

 

20,135

 

 

 

14,177

 

 

8,165

 

 

 

89,366

 

 

 

17,767

 

Net Interest Income

 

37,000

 

 

37,480

 

 

 

36,444

 

 

 

36,049

 

 

38,577

 

 

 

146,973

 

 

 

147,833

 

PROVISION FOR CREDIT LOSSES

 

221

 

 

1,427

 

 

 

1,157

 

 

 

490

 

 

525

 

 

 

3,295

 

 

 

4,300

 

Net Interest Income After Provision for Credit Losses

 

36,779

 

 

36,053

 

 

 

35,287

 

 

 

35,559

 

 

38,052

 

 

 

143,678

 

 

 

143,533

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiduciary and wealth management

 

1,323

 

 

1,296

 

 

 

1,204

 

 

 

1,236

 

 

1,085

 

 

 

5,059

 

 

 

5,071

 

ATM debit card interchange

 

979

 

 

986

 

 

 

998

 

 

 

1,056

 

 

1,099

 

 

 

4,019

 

 

 

4,362

 

Service charges on deposits

 

485

 

 

509

 

 

 

514

 

 

 

435

 

 

461

 

 

 

1,943

 

 

 

2,078

 

Mortgage banking

 

300

 

 

382

 

 

 

287

 

 

 

384

 

 

237

 

 

 

1,353

 

 

 

1,607

 

Mortgage hedging

 

109

 

 

67

 

 

 

128

 

 

 

20

 

 

150

 

 

 

324

 

 

 

1,471

 

Net gain on sales of SBA loans

 

358

 

 

85

 

 

 

128

 

 

 

 

 

 

 

 

571

 

 

 

262

 

Earnings from cash surrender value of life insurance

 

288

 

 

278

 

 

 

292

 

 

 

254

 

 

255

 

 

 

1,112

 

 

 

1,013

 

Other

 

1,275

 

 

1,743

 

 

 

1,669

 

 

 

940

 

 

3,427

 

 

 

5,627

 

 

 

7,793

 

Total Noninterest Income

 

5,117

 

 

5,346

 

 

 

5,220

 

 

 

4,325

 

 

6,714

 

 

 

20,008

 

 

 

23,657

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

15,215

 

 

15,259

 

 

 

15,027

 

 

 

13,844

 

 

13,434

 

 

 

59,345

 

 

 

52,601

 

Software licensing and utilization

 

1,826

 

 

2,085

 

 

 

2,070

 

 

 

1,946

 

 

1,793

 

 

 

7,927

 

 

 

7,524

 

Occupancy, net

 

1,952

 

 

1,761

 

 

 

1,750

 

 

 

1,886

 

 

1,812

 

 

 

7,349

 

 

 

6,900

 

Equipment

 

1,330

 

 

1,292

 

 

 

1,248

 

 

 

1,251

 

 

1,249

 

 

 

5,121

 

 

 

4,493

 

Shares tax

 

255

 

 

808

 

 

 

751

 

 

 

899

 

 

160

 

 

 

2,713

 

 

 

2,786

 

Legal and professional fees

 

653

 

 

890

 

 

 

602

 

 

 

800

 

 

900

 

 

 

2,945

 

 

 

2,761

 

ATM/card processing

 

442

 

 

641

 

 

 

532

 

 

 

493

 

 

534

 

 

 

2,108

 

 

 

2,139

 

Intangible amortization

 

491

 

 

484

 

 

 

461

 

 

 

344

 

 

496

 

 

 

1,780

 

 

 

2,012

 

FDIC Assessment

 

730

 

 

1,746

 

 

 

684

 

 

 

340

 

 

243

 

 

 

3,500

 

 

 

1,594

 

(Gain) loss on sale or write-down of foreclosed assets, net

 

 

 

(18

)

 

 

(126

)

 

 

 

 

(45

)

 

 

(144

)

 

 

(133

)

Merger and acquisition

 

 

 

352

 

 

 

4,992

 

 

 

224

 

 

294

 

 

 

5,544

 

 

 

294

 

Post-acquisition restructuring

 

 

 

 

 

 

2,952

 

 

 

 

 

 

 

 

2,952

 

 

 

329

 

Other

 

4,610

 

 

4,589

 

 

 

4,586

 

 

 

4,043

 

 

4,598

 

 

 

17,852

 

 

 

16,543

 

Total Noninterest Expense

 

27,504

 

 

29,889

 

 

 

35,529

 

 

 

26,070

 

 

25,468

 

 

 

118,992

 

 

 

99,843

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

14,392

 

 

11,510

 

 

 

4,978

 

 

 

13,814

 

 

19,298

 

 

 

44,694

 

 

 

67,347

 

Provision for income taxes

 

2,294

 

 

2,274

 

 

 

142

 

 

 

2,587

 

 

3,579

 

 

 

7,297

 

 

 

12,541

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$

12,098

 

$

9,236

 

 

$

4,836

 

 

$

11,227

 

$

15,719

 

 

$

37,397

 

 

$

54,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

$

0.73

 

$

0.56

 

 

$

0.29

 

 

$

0.71

 

$

0.99

 

 

$

2.29

 

 

$

3.44

 

Diluted Earnings Per Common Share

$

0.73

 

$

0.56

 

 

$

0.29

 

 

$

0.70

 

$

0.99

 

 

$

2.29

 

 

$

3.44

 

Cash Dividends Declared

$

0.20

 

$

0.20

 

 

$

0.20

 

 

$

0.20

 

$

0.20

 

 

$

0.80

 

 

$

0.80

 

CONSOLIDATED – AVERAGE BALANCE SHEET AND NET INTEREST INCOME ANALYSIS (Unaudited):

 

Average Balances, Income and Interest Rates on a Taxable Equivalent Basis

 

For the Three Months Ended

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

(Dollars in thousands)

Average Balance

 

Interest(1)

 

Yield/

Rate

 

Average Balance

 

Interest(1)

 

Yield/

Rate

 

Average Balance

 

Interest(1)

 

Yield/

Rate

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Balances

$

30,715

 

$

139

 

1.80

%

 

$

12,804

 

$

86

 

2.66

%

 

$

4,671

 

$

36

 

3.06

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

530,099

 

 

3,199

 

2.39

 

 

 

541,403

 

 

3,846

 

2.82

 

 

 

561,119

 

 

3,733

 

2.64

 

Tax-Exempt

 

76,847

 

 

378

 

1.95

 

 

 

77,668

 

 

382

 

1.95

 

 

 

79,673

 

 

390

 

1.94

 

Total Securities

 

606,946

 

 

3,577

 

2.34

 

 

 

619,071

 

 

4,228

 

2.71

 

 

 

640,792

 

 

4,123

 

2.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Funds Sold

 

12,224

 

 

228

 

7.40

 

 

 

8,260

 

 

51

 

2.45

 

 

 

4,749

 

 

40

 

3.34

 

Loans, Net of Unearned Interest

 

4,201,092

 

 

61,309

 

5.79

 

 

 

4,053,514

 

 

58,792

 

5.75

 

 

 

3,395,308

 

 

42,492

 

4.97

 

Restricted Investment in Bank Stocks

 

13,754

 

 

864

 

24.92

 

 

 

10,968

 

 

260

 

9.40

 

 

 

6,694

 

 

51

 

3.02

 

Total Earning Assets

 

4,864,731

 

 

66,117

 

5.39

 

 

 

4,704,617

 

 

63,417

 

5.35

 

 

 

4,052,214

 

 

46,742

 

4.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Due from Banks

 

38,370

 

 

 

 

 

 

77,122

 

 

 

 

 

 

45,385

 

 

 

 

Other Assets

 

323,281

 

 

 

 

 

 

324,364

 

 

 

 

 

 

192,969

 

 

 

 

Total Assets

$

5,226,382

 

 

 

 

 

$

5,106,103

 

 

 

 

 

$

4,290,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing Demand

$

938,246

 

$

4,087

 

1.73

%

 

$

960,052

 

$

3,899

 

1.61

%

 

$

1,057,649

 

$

2,051

 

0.77

%

Money Market

 

925,902

 

 

6,266

 

2.68

 

 

 

929,036

 

 

5,969

 

2.55

 

 

 

965,866

 

 

2,996

 

1.23

 

Savings

 

295,757

 

 

53

 

0.07

 

 

 

308,732

 

 

60

 

0.08

 

 

 

335,928

 

 

49

 

0.06

 

Time

 

1,405,927

 

 

15,403

 

4.35

 

 

 

1,308,945

 

 

13,631

 

4.13

 

 

 

527,708

 

 

1,899

 

1.43

 

Total Interest-bearing Deposits

 

3,565,832

 

 

25,809

 

2.87

 

 

 

3,506,765

 

 

23,559

 

2.67

 

 

 

2,887,151

 

 

6,995

 

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short term borrowings

 

149,218

 

 

2,506

 

6.66

 

 

 

64,282

 

 

1,584

 

9.78

 

 

 

47,262

 

 

441

 

3.70

 

Long-term debt

 

58,987

 

 

373

 

2.51

 

 

 

76,515

 

 

333

 

1.73

 

 

 

4,441

 

 

46

 

4.11

 

Subordinated debt and trust preferred securities

 

46,425

 

 

429

 

3.67

 

 

 

46,377

 

 

461

 

3.94

 

 

 

64,673

 

 

683

 

4.19

 

Total Interest-bearing Liabilities

 

3,820,462