Horizon Bancorp Announces Record Quarterly And Six-Month Earnings

Horizon Bancorp (NASDAQ: HBNC) today announced its unaudited financial results for the three and six month periods ended June 30, 2012.

SUMMARY:
  • Second quarter 2012 net income was $4.9 million or $.93 diluted earnings per share, a 66% increase in diluted earnings per share compared to the same period in 2011. In addition, this represents the highest quarterly net income and diluted earnings per share in the Company’s 139-year history.
  • Horizon’s net income for the first half of 2012 was $9.5 million or $1.81 diluted earnings per share, a 72% increase in diluted earnings per share compared to the same period in 2011 and the highest first half net income in the Company’s history.
  • Total loans increased $8.6 million during the quarter and $157.9 million over the previous twelve months to $997.1 million at June 30, 2012.
  • Net interest income, after provisions for loan losses, for the first six months of 2012 was $25.4 million compared with $19.7 million for the same period in the prior year.
  • The provision for loan losses decreased to $768,000 for the first six months of 2012 compared to $2.9 million for the same period in 2011.
  • Net charge-offs for the first six months of 2012 were $1.3 million compared to $3.4 million for the same period in 2011.
  • Total substandard loans have decreased by $21.9 million in the first six months of 2012.
  • Return on average assets was 1.31% for the second quarter of 2012 and 1.27% for the first six months of 2012.
  • Return on average common equity was 16.43% for the second quarter of 2012 and 16.13% for the first six months of 2012.
  • The merger with Heartland Bancshares, Inc (“Heartland”) based in Franklin, Indiana closed on July 17, 2012.
  • Horizon’s tangible book value per share rose to $22.22 compared to $21.35 and $19.17 at March 31, 2012 and June 30, 2011, respectively.
  • Horizon Bank’s capital ratios, including Tier 1 Capital to total risk weighted assets of 12.03% as of June 30, 2012, continue to be well above the regulatory standards for well-capitalized banks.

Craig M. Dwight, President and CEO, stated: “Our business model continued to deliver a balanced revenue stream, with solid year-over-year growth in key areas. Ongoing reductions in the provision for loan losses, increased revenue from our mortgage operations, and our continued focus on expense management, contributed to the Bank’s record earnings for these periods.”

“Loan and deposit growth, particularly at Horizon’s newer branch locations, demonstrated exceptional productivity and success in earning market share in highly competitive market conditions. At quarter’s end, Horizon exceeded $1 billion in loans, including loans held for sale, for the first time in its history.”

“Despite continuing pressure on margins, we increased our net interest margin over the prior year, an accomplishment supported in part by our mortgage warehousing business. We were also pleased to have closed the acquisition of Heartland Bancshares on schedule, in what was a very smooth and cooperative process. We look forward to maximizing the value of the new markets and customers in the Indianapolis area. We have complemented our expanded presence by opening a loan and deposit production office in Indianapolis in July.”

Performance Highlights

Net income for the second quarter of 2012 was $4.9 million or $.93 diluted earnings per share, up 59% compared to $3.1 million or $.56 diluted earnings per share in the second quarter of 2011. This represents the highest level of net income for a single quarter in the Company’s 139-year history.

Net income for the first six months of 2012 rose 63% to $9.5 million or $1.81 diluted earnings per share, compared with $5.9 million or $1.05 diluted earnings per share in the first half of 2011. This is the highest first six months of net income in the Company’s history.

The net interest margin was 3.79% in the second quarter of 2012 up from 3.67% for the three-month period ending June 30, 2011 but down 8 basis points (or 0.08%) from the three months ending March 31, 2012. This decrease from the first quarter of 2012 primarily reflected a decrease in the yield on interest-earning assets greater than the decrease in the rates paid on interest-bearing liabilities. The net interest margin was 3.84% for the six months ending June 30, 2012 up from 3.62% for the same period in 2011.

During the second quarter of 2012 residential mortgage loan activity generated $3.4 million in income from the gain on sale of mortgage loans; an increase of $2.1 million from the same period in 2011 and an increase of $1.1 million from the first quarter of 2012.

Lending Activity

Total loans increased by $13.9 million from $983.2 million at December 31, 2011 to $997.1 million at June 30, 2012. Commercial loans increased by $4.2 million, mortgage warehouse loans increased by $7.2 million, consumer loans increased by $3.1 million and residential mortgage loans decreased by $467,000 compared to December 31, 2011 loan levels.

The provision for loan losses was $209,000 for the second quarter of 2012, which was $1.1 million less than the provision for the same period of the prior year. For the first six months of 2012 the provision for loan losses was $2.1 million less than the provision for the same period of the prior year. The lower provision for loan losses was primarily related to a decrease in charged off loans and improvement in substandard loans. Substandard loans have decreased $21.9 million since December 31, 2011.

“We anticipate that with the integration of Heartland, the level of substandard loans will increase,” explained Dwight. “Horizon’s approach to substandard loans is to work with the borrowers to achieve a reasonable action plan, if the plan cannot be achieved then Horizon moves to protect the shareholders’ and depositors’ interests to minimize loss. Horizon believes that with a disciplined approach to problem loan resolution we will also be able to reduce the substandard loans being acquired from Heartland.”

The ratio of allowance for loan losses to total loans decreased to 1.83% as of June 30, 2012 from 1.89% as of December 31, 2011. The decrease in the ratio was primarily the result of charging off specific reserves previously identified and the reduction in substandard loans.

Non-performing loans totaled $20.8 million on June 30, 2012, down from $21.1 million on March 31, 2012, but up slightly from $20.6 million on June 30, 2011. As a percentage of total loans, non-performing loans were 2.09% on June 30, 2012, similar to 2.10% on March 31, 2012, but down from 2.44% on June 30, 2011. The drop in the percentage of non-performing loans to total loans is the direct result of the loan growth that occurred over the last twelve months.

Other Real Estate Owned (OREO) totaled $1.0 million on June 30, 2012, up from $803,000 on March 31, 2012, but down significantly from $4.1 million on June 30, 2011. During the quarter, eight properties with a book value of $435,000 as of March 31, 2011 were sold and seven properties with a book value of $696,000 were transferred into OREO. There was one write down of $29,000 during the quarter. On June 30, 2012, OREO was comprised of 10 properties. Of these, five totaling $599,000 were commercial loans and five totaling $427,000 were residential real estate loans. Horizon currently has contracts to sell two properties with a book value of $197,000.

Expense Management

Total non-interest expenses were $2.6 million higher in the first six months of 2012 compared to the first six months of 2011 and $1.0 million higher compared to the three months ending March 31, 2012. Salaries and employee benefits at June 30, 2012 increased $1.7 million compared to the same period in 2011 and was $576,000 higher compared to the three months ending March 31, 2012. These increases are primarily the result of annual merit pay increases, increase in employee benefits costs and commission and bonus expense for the first six months of 2012. Also, included in the first six months of 2012’s non-interest expense was $500,000 of transaction expenses related to the transaction with Heartland.

Dwight concluded: “We plan to continue to focus on building productivity in every location and department. We expect our expanded presence in Indiana will offer greater visibility for the Horizon franchise, and continued economies of scale.”

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest Michigan through its commercial banking subsidiary. Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.accesshorizon.com. Its common stock is traded on the NASDAQ Global Market under the symbol HBNC.

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon. For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in “Item 1A Risk Factors” of Part I of Horizon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.
         
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
  2012       2012       2011       2011       2011  
Balance sheet:
Total assets $ 1,563,265 $ 1,546,831 $ 1,547,162 $ 1,490,810 $ 1,413,737
Investment securities 441,715 440,601 438,145 441,334 460,449
Commercial loans 356,549 350,463 352,376 345,366 338,439
Mortgage warehouse loans 215,478 213,152 208,299 151,111 75,057
Residential mortgage loans 156,675 155,550 157,141 165,429 163,803
Consumer loans 268,437 269,388 265,377 263,934 261,971
Earning assets 1,460,544 1,451,746 1,447,818 1,391,864 1,316,452
Non-interest bearing deposit accounts 136,979 138,618 130,673 121,483 113,747
Interest bearing transaction accounts 634,907 641,128 538,083 551,597 567,456
Time deposits 273,903 284,875 341,109 316,669 339,073
Borrowings 339,880 310,889 370,111 336,095 230,141
Subordinated debentures 30,722 30,699 30,676 30,653 30,630
Common stockholders' equity 118,112 113,738 108,965 106,180 103,206
Total stockholders’ equity 130,612 126,238 121,465 118,680 121,507
 
Income statement: Three months ended
Net interest income $ 13,006 $ 13,198 $ 13,592 $ 11,991 $ 11,463
Provision for loan losses 209 559 838 1,564 1,332
Other income 6,555 5,142 4,999 6,538 4,448
Other expenses 12,180 11,160 13,089 12,313 10,487
Income tax expense   2,262       2,008       1,142       1,235       999  
Net income 4,910 4,613 3,522 3,417 3,093
Preferred stock dividend   (106 )     (156 )     (63 )     (710 )     (277 )
Net income available to common shareholders $ 4,804     $ 4,457     $ 3,459     $ 2,707     $ 2,816  
 
Per share data:
Basic earnings per share $ 0.97 $ 0.90 $ 0.70 $ 0.55 $ 0.57
Diluted earnings per share 0.93 0.88 0.68 0.53 0.56
Cash dividends declared per common share 0.13 0.13 0.12 0.12 0.11
Book value per common share 23.83 22.99 22.02 21.47 20.88
Tangible book value per common share 22.22 21.35 20.37 19.79 19.17
Market value - high 26.60 18.50 17.95 18.90 18.61
Market value - low $ 17.64 $ 17.29 $ 16.23 $ 17.31 $ 17.67
Weighted average shares outstanding - Basic 4,956,358 4,948,573 4,947,696 4,942,695 4,937,750
Weighted average shares outstanding - Diluted 5,152,346 5,065,660 5,050,701 5,064,380 5,065,454
 
Key ratios:
Return on average assets 1.31 % 1.23 % 0.93 % 0.96 % 0.89 %
Return on average common stockholders' equity 16.43 15.90 12.74 10.14 11.25
Net interest margin 3.79 3.87 3.95 3.76 3.67
Loan loss reserve to total loans 1.83 1.94 1.89 2.04 2.20
Non-performing loans to loans 2.07 2.11 2.02 2.52 2.44
Average equity to average assets 8.61 8.33 7.96 8.60 8.51
Bank only capital ratios:
Tier 1 capital to average assets 8.76 8.53 8.50 8.89 9.03
Tier 1 capital to risk weighted assets 12.03 11.82 11.86 12.33 13.61
Total capital to risk weighted assets 13.29 13.08 13.12 13.58 14.87
 
Loan data:
Substandard loans $ 35,634 $ 46,643 $ 57,489 $ 58,993 $ 57,765
30 to 89 days delinquent 3,773 2,932 3,282 4,240 4,903
 
90 days and greater delinquent - accruing interest $ 13 $ 28 $ 37 $ 97 $ 55
Trouble debt restructures - accruing interest 3,092 3,188 3,540 4,042 4,227
Trouble debt restructures - non-accrual 2,786 2,439 2,198 1,673 1,912
Non-accrual loans   14,925       15,451       14,368       17,799       14,430  
Total non-performing loans $ 20,816     $ 21,106     $ 20,143     $ 23,611     $ 20,624  
   
HORIZON BANCORP
Financial Highlights
(Dollars in thousands except share and per share data and ratios, Unaudited)
 
June 30 June 30
  2012       2011  
Balance sheet:
Total assets $ 1,563,265 $ 1,413,737
Investment securities 441,715 460,449
Commercial loans 356,549 338,439
Mortgage warehouse loans 215,478 75,057
Residential mortgage loans 156,675 163,803
Consumer loans 268,437 261,971
Earning assets 1,460,544 1,316,452
Non-interest bearing deposit accounts 136,979 113,747
Interest bearing transaction accounts 634,907 567,456
Time deposits 273,903 339,073
Borrowings 339,880 230,141
Subordinated debentures 30,722 30,630
Common stockholders' equity 118,112 103,206
Total stockholders’ equity 130,612 121,507
 
Income statement: Six months ended
Net interest income $ 26,204 $ 22,530
Provision for loan losses 768 2,880
Other income 11,697 8,762
Other expenses 23,340 20,745
Income tax expense   4,270       1,809  
Net income 9,523 5,858
Preferred stock dividend   (263 )     (553 )
Net income available to common shareholders $ 9,260     $ 5,305  
 
Per share data:
Basic earnings per share $ 1.87 $ 1.07
Diluted earnings per share 1.81 1.05
Cash dividends declared per common share 0.26 0.23
Book value per common share 23.83 20.88
Tangible book value per common share 22.22 19.17
Market value - high 26.60 19.46
Market value - low $ 17.29 $ 17.47
Weighted average shares outstanding - Basic 4,952,466 4,930,887
Weighted average shares outstanding - Diluted 5,116,180 5,069,187
 
Key ratios:
Return on average assets 1.27 % 0.85 %
Return on average common stockholders' equity 16.13 10.91
Net interest margin 3.84 3.62
Loan loss reserve to total loans 1.83 2.20
Non-performing loans to loans 2.07 2.44
Average equity to average assets 8.46 8.34
Bank only capital ratios:
Tier 1 capital to average assets 8.76 9.03
Tier 1 capital to risk weighted assets 12.03 13.61
Total capital to risk weighted assets 13.29 14.87
 
Loan data:
Substandard loans $ 35,634 $ 57,765
30 to 89 days delinquent 3,773 4,903
 
90 days and greater delinquent - accruing interest $ 13 55
Trouble debt restructures - accruing interest 3,092 4,227
Trouble debt restructures - non-accrual 2,786 1,912
Non-accrual loans   14,925       14,430  
Total non-performing loans $ 20,816     $ 20,624  
         
HORIZON BANCORP
 
Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
  2012     2012     2011     2011     2011
Commercial $ 7,766 $ 8,435 $ 8,017 $ 8,151 $ 7,078
Real estate 2,946 3,025 2,472 2,457 1,710
Mortgage warehousing 1,695 1,694 1,695 1,477 1,516
Consumer 5,967 6,258 6,698 7,025 8,282
Unallocated   -     -     -     -     -
Total $ 18,374   $ 19,412   $ 18,882   $ 19,110   $ 18,586
 
Net Charge-offs

(Dollars in Thousands, Unaudited)
 

Three months ended
June 30   March 31   December 31   September 30   June 30
  2012     2012       2011     2011     2011
Commercial $ 278 $ (332 ) $ 111 $ 269 $ 366
Real estate 113 59 118 86 659
Mortgage warehousing - - - - -
Consumer   856     302       837     685     811
Total $ 1,247   $ 29     $ 1,066   $ 1,040   $ 1,836
         
Total Non-performing Loans

(Dollars in Thousands, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
  2012     2012     2011     2011     2011
Commercial $ 8,796 $ 9,035 $ 7,958 $ 12,094 $ 9,613
Real estate 8,595 8,669 8,496 7,201 6,983
Mortgage warehousing - - - - -
Consumer   3,425     3,402     3,689     4,316     4,028
Total $ 20,816   $ 21,106   $ 20,143   $ 23,611   $ 20,624
         
Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)
 
June 30 March 31 December 31 September 30 June 30
  2012     2012     2011     2011     2011
Commercial $ 688 $ 94 $ 1,092 $ 1,087 $ 1,414
Real estate 338 709 1,708 2,478 2,679
Mortgage warehousing - - - - -
Consumer   43     86     49     90     16
Total $ 1,069   $ 889   $ 2,849   $ 3,655   $ 4,109
     
HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)
 
 
Three Months Ended Three Months Ended
June 30, 2012 June 30, 2011
Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
 
ASSETS
Interest-earning assets
Federal funds sold $ 1,348 $ 1 0.30 % $ 14,529 $ 5 0.14 %
Interest-earning deposits 1,908 1 0.21 % 8,333 5 0.24 %
Investment securities - taxable 349,118 2,244 2.59 % 351,596 2,776 3.17 %
Investment securities - non-taxable (1) 105,822 950 5.01 % 112,279 1,035 5.28 %
Loans receivable (2)(3)(4)   961,174       13,327 5.58 %   814,581       11,891 5.86 %
Total interest-earning assets (1) 1,419,370 16,523 4.79 % 1,301,318 15,712 4.98 %
 
Noninterest-earning assets
Cash and due from banks 15,913 15,476
Allowance for loan losses (19,295 ) (19,089 )
Other assets   95,472     96,056  
 
$ 1,511,460   $ 1,393,761  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 924,464 $ 1,526 0.66 % $ 893,836 $ 2,195 0.98 %
Borrowings 278,357 1,519 2.19 % 224,864 1,600 2.85 %
Subordinated debentures   31,446       472 6.04 %   31,446       454 5.79 %
Total interest-bearing liabilities 1,234,267 3,517 1.15 % 1,150,146 4,249 1.48 %
 
Noninterest-bearing liabilities
Demand deposits 133,848 115,659
Accrued interest payable and
other liabilities 13,269 9,297
Shareholders' equity   130,076     118,659  
 
$ 1,511,460   $ 1,393,761  
 
Net interest income/spread $ 13,006 3.64 % $ 11,463 3.50 %
 
Net interest income as a percent
of average interest earning assets (1) 3.79 % 3.67 %
(1)   Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loans fees.
(4) Loan fees and late fees included in interest on loans.
     
HORIZON BANCORP AND SUBSIDIARIES
Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)
 
Six Months Ended Six Months Ended
June 30, 2012 June 30, 2011
Average     Average Average     Average
Balance   Interest   Rate Balance   Interest   Rate
ASSETS
Interest-earning assets
Federal funds sold $ 3,340 $ 4 0.24 % $ 38,740 $ 44 0.23 %
Interest-earning deposits 2,159 2 0.19 % 5,771 6 0.21 %
Investment securities - taxable 346,645 4,554 2.64 % 326,790 5,236 3.23 %
Investment securities - non-taxable (1)(2) 106,857 1,930 5.19 % 113,281 2,078 5.07 %
Loans receivable (2)(3)(4)   956,701       26,859 5.65 %   817,468       23,779 5.88 %
Total interest-earning assets (1) 1,415,702 33,349 4.86 % 1,302,050 31,143 4.95 %
 
Noninterest-earning assets
Cash and due from banks 15,849 15,039
Allowance for loan losses (19,355 ) (19,077 )
Other assets   95,986     96,513  
 
$ 1,508,182   $ 1,394,525  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits $ 916,889 $ 3,165 0.69 % $ 898,635 $ 4,532 1.02 %
Borrowings 285,981 3,038 2.14 % 226,161 3,177 2.83 %
Subordinated debentures   31,446       942 6.02 %   31,446       904 5.80 %
Total interest-bearing liabilities 1,234,316 7,145 1.16 % 1,156,242 8,613 1.50 %
 
Noninterest-bearing liabilities
Demand deposits 132,813 112,618
Accrued interest payable and
other liabilities 13,387 9,390
Shareholders' equity   127,666     116,275  
 
$ 1,508,182   $ 1,394,525  
 
Net interest income/spread $ 26,204 3.69 % $ 22,530 3.45 %
 
Net interest income as a percent
of average interest earning assets (1) 3.84 % 3.62 %
(1)   Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities. The average rate is presented on a tax equivalent basis.
(2) Includes fees on loans. The inclusion of loan fees does not have a material effect on the average interest rate.
(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loans fees.
(4) Loan fees and late fees included in interest on loans.
   
HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)
 
June 30 December 31
2012 2011
(Unaudited)    
Assets
Cash and due from banks $ 23,743 $ 20,447
Investment securities, available for sale 435,615 431,045
Investment securities, held to maturity 6,100 7,100
Loans held for sale 9,300 14,090
Loans, net of allowance for loan losses of $18,374 and $18,882 978,765 964,311
Premises and equipment 35,980 34,665
Federal Reserve and Federal Home Loan Bank stock 12,390 12,390
Goodwill 5,910 5,910
Other intangible assets 2,072 2,292
Interest receivable 6,685 6,671
Cash value life insurance 30,649 30,190
Other assets   16,056     18,051
Total assets $ 1,563,265   $ 1,547,162
Liabilities
Deposits
Non-interest bearing $ 136,979 $ 130,673
Interest bearing   908,810     879,192
Total deposits 1,045,789 1,009,865
Borrowings 339,880 370,111
Subordinated debentures 30,722 30,676
Interest payable 911 596
Other liabilities   15,351     14,449
Total liabilities   1,432,653     1,425,697
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, $.01 par value, $1,000 liquidation value
Authorized, 1,000,000 Series B shares
Issued 12,500 and 12,500 shares 12,500 12,500
Common stock, $.3333 stated value
Authorized, 22,500,000 shares
Issued, 5,002,517 and 4,967,196 shares
Outstanding, 4,957,347 and 4,947,696 shares 1,135 1,126
Additional paid-in capital 10,853 10,610
Retained earnings 97,349 89,387
Accumulated other comprehensive income   8,775     7,842
Total stockholders’ equity   130,612     121,465
Total liabilities and stockholders’ equity $ 1,563,265   $ 1,547,162
   
HORIZON BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income

(Dollar Amounts in Thousands, Except Per Share Data)
 
Three Months Ended June 30   Six Months Ended June 30
2012   2011 2012   2011
(Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Interest Income
Loans receivable $ 13,327 $ 11,891 $ 26,859 $ 23,779
Investment securities
Taxable 2,246 2,786 4,560 5,286
Tax exempt   950       1,035       1,930       2,078  
Total interest income   16,523       15,712       33,349       31,143  
Interest Expense
Deposits 1,526 2,195 3,165 4,532
Borrowed funds 1,519 1,600 3,038 3,177
Subordinated debentures   472       454       942       904  
Total interest expense   3,517       4,249       7,145       8,613  
Net Interest Income 13,006 11,463 26,204 22,530
Provision for loan losses   209       1,332       768       2,880  
Net Interest Income after Provision for Loan Losses   12,797       10,131       25,436       19,650  
Other Income
Service charges on deposit accounts 763 825 1,475 1,620
Wire transfer fees 213 137 395 245
Interchange fees 714 639 1,342 1,184
Fiduciary activities 982 932 1,957 1,895
Gain on sale of securities - 365 - 639
Gain on sale of mortgage loans 3,411 1,308 5,685 1,841
Mortgage servicing income net of impairment 170 99 260 863
Increase in cash surrender value of bank owned life insurance 235 211 460 416
Other income   67       (68 )     123       59  
Total other income   6,555       4,448       11,697       8,762  
Other Expenses
Salaries and employee benefits 6,539 5,470 12,502 10,831
Net occupancy expenses 976 1,039 2,030 2,120
Data processing 603 494 1,129 901
Professional fees 583 331 1,117 680
Outside services and consultants 526 386 997 767
Loan expense 866 694 1,568 1,456
FDIC insurance expense 250 303 507 690
Other losses 162 246 192 277
Other expenses   1,675       1,524       3,298       3,023  
Total other expenses   12,180       10,487       23,340       20,745  
Income Before Income Tax 7,172 4,092 13,793 7,667
Income tax expense   2,262       999       4,270       1,809  
Net Income 4,910 3,093 9,523 5,858
Preferred stock dividend and discount accretion   (106 )     (277 )     (263 )     (553 )
Net Income Available to Common Shareholders $ 4,804     $ 2,816     $ 9,260     $ 5,305  
Basic Earnings Per Share $ 0.97 $ 0.57 $ 1.87 $ 1.08
Diluted Earnings Per Share 0.93 0.56 1.81 1.05

Copyright Business Wire 2010

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