WashingtonFirst Bankshares, Inc. (NASDAQ: WFBI) (the "Company"), announced today consolidated net income of $4.9 million and $13.3 million (or $0.39 and $1.06 per diluted common share) for the three and nine months ended September 30, 2016, respectively. Net income during the third quarter of 2016 increased 57.7% over the $3.1 million in net income (or $0.31 per diluted common share) earned during the three months ended September 30, 2015, and increased 12.3% over the prior quarter ended June 30, 2016. Year to date earnings for the nine months ended September 30, 2016, increased 53.5% over the $8.6 million (or $0.87 per diluted common share) earned during the nine months ended September 30, 2015. Additionally, the Company paid its 12 th consecutive quarterly dividend of $0.06 on October 3, 2016.

Shaza Andersen, the Company's President and CEO, said, "I am excited to report our ROA was 1.09% for the third quarter 2016, compared to 0.83% for the same period last year. ROA is a strategic focus for us in 2016 and we are executing on our plan consistently each quarter. Earnings per share is strong both quarter-to-date and year-to-date and is enhanced by the mortgage and wealth management operations acquired last year from 1 st Portfolio. Both businesses are exceeding our initial expectations. Asset quality remains a key priority for us - we reduced our NPAs from 0.87% as of December 31, 2015, to 0.58% as of September 30, 2016. During the final quarter of 2016, and as always, we will remain focused on premier customer service and strong financial performance, core principles that will continue to produce long-term value for our shareholders."

The net interest margin was 3.53% and 3.47% for the three and nine months ended September 30, 2016, respectively, as compared to 3.76% and 3.74% for the same periods in 2015. This decrease is primarily attributable to the addition of $25.0 million in subordinated debt added in the fourth quarter of 2015 and competitive pressure for incremental loans and deposits. Additionally, the cost of interest bearing liabilities for the nine months ended September 30, 2016, increased 15 basis points to 1.02% compared to the same period last year, and is primarily attributable to changes in the mix of deposits. On a linked quarter basis, the net interest margin increased 16 basis points during the three months ended September 30, 2016, to 3.53% due to loan growth and the deleveraging strategy implemented at the end of the second quarter of this year. The Company remains focused on its pricing discipline on both sides of the balance sheet and on all factors contributing to net income.

Interest and fees on loans increased $2.2 million to $17.7 million for the three months ended September 30, 2016, compared to the same quarter last year. Similarly, interest and fees on loans increased $7.7 million to $50.9 million for the nine months ended September 30, 2016, compared to the same period last year. Total interest and dividend income increased by 15.0% and 18.8%, respectively, during the three and nine months ended September 30, 2016, compared to the same periods last year.

Non-interest income grew during both the three and nine months ended September 30, 2016, by $5.7 million and $17.9 million, respectively, compared to the same periods ended September 30, 2015, as a result of the successful integration of the 1 st Portfolio companies acquired in July 2015. The mortgage subsidiary acquired in the 1 st Portfolio acquisition contributed $6.3 million and $14.4 million to non-interest income via gain on sale of loans, respectively, during the three and nine months ended September 30, 2016, compared to $2.0 million and $2.2 million generated by the Bank's legacy mortgage operation for the same periods ending September 30, 2015. Additional fee income of $1.2 million and $3.8 million was generated by the mortgage subsidiary for the three months and nine months ended September 30, 2016, respectively. Wealth management activities began as a result of the 1 st Portfolio acquisition. During the three and nine months ended September 30, 2016, $0.5 million and $1.3 million, respectively, of non-interest income was derived from the wealth division compared to $0.3 million for both the three and nine months ended September 30, 2015.

Non-interest expense grew during both the three and nine months ended September 30, 2016, by $4.4 million and $16.0 million, respectively, compared to the same periods ended September 30, 2015, primarily as a result of the new mortgage and wealth companies that resulted from the 1 st Portfolio acquisition, as well as further expansion of the Bank's retail network. Total compensation and employee benefit costs have risen for the three and nine months ended September 30, 2016, compared to the same periods ended September 30, 2015, respectively, by $3.2 million and $11.7 million as a result of both organic growth and the 1 st Portfolio acquisition. In addition, the Company incurred one-time debt termination expenses of $1.2 million during the nine months ended September 30, 2016. This was substantially offset by gains on the sale of available-for-sale securities as part of a deleveraging strategy.

Return on average assets increased to 1.09% and 1.01% for the three and nine months ended September 30, 2016, as compared to 0.83% and 0.81% for the three and nine months ended September 30, 2015.
   
For the three months ended For the nine months ended

September 30,2016
 

September 30,2015
 

September 30,2016
 

September 30,2015
($ in thousands, except per share data)

Performance Ratios:
   
Return on average assets 1.09 % 0.83 % 1.01 % 0.81 %
Return on average shareholders' equity 10.21 % 8.41 % 9.43 % 8.31 %
Yield on average interest-earning assets 4.23 % 4.37 % 4.19 % 4.35 %
Rate on average interest-earning liabilities 1.01 % 0.87 % 1.02 % 0.87 %
Net interest spread 3.22 % 3.50 % 3.17 % 3.48 %
Net interest margin 3.53 % 3.76 % 3.47 % 3.74 %
Efficiency ratio (1) 63.41 % 65.68 % 64.27 % 63.31 %
Net charge-offs to average loans held for investment (2) 0.18 % (0.01 )% 0.19 % 0.02 %
 
Mortgage origination volume $ 386,247 $ 87,448 $ 725,810 $ 97,876
 
Assets under management $ 280,843 $ 218,070 $ 280,843 $ 218,070
 

Per Share Data:
Basic earnings per common share $ 0.40 $ 0.31 $ 1.08 $ 0.88
Fully diluted earnings per common share $ 0.39 $ 0.31 $ 1.06 $ 0.87
Weighted average basic shares outstanding 12,253,488 10,218,290 12,234,887 9,797,340
Weighted average diluted shares outstanding 12,485,445 10,406,760 12,456,408 9,970,041
(1) The efficiency ratio is calculated as total non-interest expense (less debt extinguishment costs) divided by the sum of net interest income and total non-interest income (less gain on sale of AFS securities). This non-GAAP financial measure is presented to facilitate an understanding of the Company's performance.
(2) Annualized
 

As of September 30, 2016, the Company reported total assets of $1.9 billion, compared to $1.7 billion as of December 31, 2015, and $1.6 billion as of September 30, 2015. During the first nine months of 2016, total loans held for investment increased $123.3 million or 9.4% to $1.4 billion as of September 30, 2016. This increase is attributable to organic loan growth from our existing lending team. During the first nine months of 2016, total deposits increased $199.0 million or 14.9% to $1.5 billion. The increase in deposits is due to core deposit growth in our branch network and commercial customers.
 
Composition of Loans Held for Investment
  September 30, 2016   December 31, 2015   September 30, 2015
($ in thousands)
Construction and development $ 272,171 $ 249,433 $ 200,100
Commercial real estate 709,020 657,110 768,985
Residential real estate 279,442 241,395 137,626
Real estate loans 1,260,633 1,147,938 1,106,711
Commercial and industrial 166,145 153,860 141,121
Consumer 4,593 6,285 8,471
Total loans 1,431,371 1,308,083 1,256,303
Less: allowance for loan losses 12,960 12,289 11,573
Net loans $ 1,418,411 $ 1,295,794 $ 1,244,730
 
 
Composition of Deposits
  September 30, 2016   December 31, 2015   September 30, 2015
($ in thousands)
Demand deposit accounts $ 410,833 $ 304,425 $ 356,270
NOW accounts 136,319 115,459 127,167
Money market accounts 290,750 309,940 255,177
Savings accounts 216,552 163,289 154,226
Time deposits up to $250,000 335,780 324,454 303,241
Time deposits over $250,000 142,021 115,675 113,904
Total deposits $ 1,532,255 $ 1,333,242 $ 1,309,985
 

During the first nine months of 2016, total shareholders' equity increased $13.4 million from $178.6 million to $192.0 million an increase driven primarily by earnings offset by dividends of $2.2 million. Tangible book value per common share increased to $14.59 as of September 30, 2016, compared to $13.55 as of December 31, 2015, and $12.57 as of September 30, 2015. The capital ratios as of September 30, 2016, are listed below. The Company remains " well-capitalized" under the regulatory framework for prompt corrective action.
     

September 30,2016

December 31,2015

September 30,2015

Capital Ratios:
Total risk-based capital ratio 14.65 % 14.86 % 11.77 %
Tier 1 risk-based capital ratio 12.15 % 12.22 % 10.73 %
Common equity tier 1 risk-based capital ratio 11.63 % 11.66 % 9.50 %
Tier 1 leverage ratio 10.33 % 10.67 % 9.60 %
Tangible common equity to tangible assets (1) 9.40 % 9.95 % 8.36 %
 

Per Share Capital Data:
Book value per common share $ 15.66 $ 14.64 $ 13.85
Tangible book value per common share $ 14.59 $ 13.55 $ 12.57
Common shares outstanding 12,257,131 12,195,823 10,518,601

(1)
 

This is a non-GAAP financial measure. Refer to the table below outlining the reconciliation of tangible common equity to tangible assets.
 

Non-performing assets continue to decline. During the three months ended September 30, 2016, the Bank charged off $0.7 million in non-performing loans. Our team remains diligent and focused on minimizing criticized assets. The ratio of non-performing assets to total assets has decreased from 0.87% as of December 31, 2015, to 0.58% as of September 30, 2016.
 
Non-Performing Assets
 

September 30,2016
 

December 31,2015
 

September 30,2015
($ in thousands)
Non-accrual loans $ 5,887 $ 10,201 $ 8,379
90+ days still accruing 28 73
Trouble debt restructurings still accruing 3,184 4,269 3,959
Other real estate owned 1,969 109
Total non-performing assets $ 11,040 $ 14,498 $ 12,520
 
     

September 30,2016
December 31, 2015

September 30,2015

Allowance and Asset Quality Ratios:
Allowance for loan losses to loans held for investment 0.91 % 0.94 % 0.92 %
Adjusted allowance for loan losses to loans held for investment (1) 1.17 % 1.30 % 1.31 %
Allowance for loan losses to non-accrual loans 220.15 % 120.47 % 138.12 %
Allowance for loan losses to non-performing assets 117.39 % 84.76 % 92.44 %
Non-performing assets to total assets 0.58 % 0.87 % 0.78 %
(1) This is a non-GAAP financial measure. Refer to the table below outlining the reconciliation of GAAP Allowance Ratio to Adjusted Allowance Ratio.
 

In connection with various past acquisition activities, the Company recorded acquired loans at fair market value which consisted of pricing and credit marks. In acquisition accounting, there is no carryover of previously established allowance for loan losses, as acquired loans are recorded at fair value. The credit marks are negative purchase marks which are comparable to an allowance for loan losses. Therefore, the adjusted allowance for loan losses to adjusted total loans held for investment, which considers these marks similar to allowance for loan losses, was 1.17% as of September 30, 2016, compared to 1.30% and 1.31% as of December 31, 2015, and September 30, 2015, respectively. A reconciliation of the allowance for loan losses and related ratios to the adjusted allowance for loan losses and related ratios as of September 30, 2016, December 31, 2015, and September 30, 2015, is below. Credit purchase accounting marks are used to offset losses on loans similar to the allowance for loan loss reserves, and therefore presentation of the adjusted allowance for loan losses provides useful information regarding the allowance calculation.
 
Reconciliation of GAAP Allowance Ratio to Adjusted Allowance Ratio (1)
 

September 30,2016
  December 31, 2015  

September 30,2015
($ in thousands)
GAAP allowance for loan losses $ 12,960 $ 12,289 $ 11,573
GAAP loans held for investment, at amortized cost 1,431,371 1,308,083 1,256,303
 
GAAP allowance for loan losses to total loans held for investment 0.91 % 0.94 % 0.92 %
 
GAAP allowance for loan losses $ 12,960 $ 12,289 $ 11,573
Plus: Credit purchase accounting marks 3,784   4,721   4,965  
Adjusted allowance for loan losses $ 16,744   $ 17,010   $ 16,538  
 
GAAP loans held for investment, at amortized cost $ 1,431,371 $ 1,308,083 $ 1,256,303
Plus: Credit purchase accounting marks 3,784   4,721   4,965  
Adjusted loans held for investment, at amortized cost $ 1,435,155   $ 1,312,804   $ 1,261,268  
 
Adjusted allowance for loan losses to total loans held for investment 1.17 % 1.30 % 1.31 %
(1) This is a non-GAAP financial measure. Credit purchase accounting marks are GAAP marks under purchase accounting guidance.
 
 
Reconciliation of Tangible Common Equity to Tangible Assets Ratio (1)
  September 30, 2016   December 31, 2015   September 30, 2015
($ in thousands)

Tangible Common Equity:
Common Stock Voting $ 104 $ 103 $ 86
Common Stock Non-Voting 18 18 18
Additional paid-in capital - common 161,918 160,861 129,258
Accumulated earnings 28,800 17,740 14,931
Accumulated other comprehensive income/(loss) 1,140   (127 ) 1,368  
Total Common Equity $ 191,980   $ 178,595   $ 145,661  
 

Less Intangibles:
Goodwill $ 11,420 $ 11,431 $ 11,450
Identifiable intangibles 1,686   1,888   1,955  
Total Intangibles $ 13,106   $ 13,319   $ 13,405  
 
Tangible Common Equity $ 178,874   $ 165,276   $ 132,256  
 

Tangible Assets:
Total Assets $ 1,916,938 $ 1,674,466 $ 1,595,193
 

Less Intangibles:
Goodwill $ 11,420 $ 11,431 $ 11,450
Identifiable intangibles 1,686   1,888   1,955  
Total Intangibles $ 13,106   $ 13,319   $ 13,405  
 
Tangible Assets $ 1,903,832   $ 1,661,147   $ 1,581,788  
 
Tangible Common Equity to Tangible Assets 9.40 % 9.95 % 8.36 %

(1) Tangible common equity to tangible assets ratio is a non-GAAP financial measure that is presented to facilitate an understanding of the Company's capital structure. This table provides a reconciliation between certain GAAP amounts and this non-GAAP financial measure.
 
Segment Reporting (QTD)
  For the Three Months Ended September 30, 2016

CommercialBank
 

MortgageBank
 

WealthManagement
  Other (1)  

ConsolidatedTotals
($ in thousands)
Revenues:
Interest income 18,781 634 (479 ) 18,936
Gain on sale of loans 6,327 6,327
Other revenues 602 1,208 474 55   2,339
Total income $ 19,383 $ 8,169 $ 474 $ (424 ) $ 27,602
 
Expenses:
Interest expense 2,571 479 43 3,093
Salaries and employee benefits 4,845 4,747 242 218 10,052
Other expenses 7,655 1,843 150 (132 ) 9,516
Total expenses $ 15,071 $ 7,069 $ 392 $ 129   $ 22,661
 
Net Income (loss) $ 4,312 $ 1,100 $ 82 $ (553 ) $ 4,941
 
Total assets $ 1,828,543 $ 83,644 $ 3,604 $ 1,147   $ 1,916,938

(1) Includes parent company and intercompany eliminations
 
 
Segment Reporting (YTD)
  For the Nine Months Ended September 30, 2016

CommercialBank
 

MortgageBank
 

WealthManagement
  Other (1)  

ConsolidatedTotals
($ in thousands)
Revenues:
Interest income 54,238 1,363 (939 ) 54,662
Gain on sale of loans 14,356 14,356
Other revenues 2,404 3,772 1,360 45   7,581
Total income $ 56,642 $ 19,491 $ 1,360 $ (894 ) $ 76,599
 
Expenses:
Interest expense 7,701 939 2 623 9,265
Salaries and employee benefits 14,406 11,421 728 654 27,209
Other expenses 22,504 4,356 433 (431 ) 26,862
Total expenses $ 44,611 $ 16,716 $ 1,163 $ 846   $ 63,336
 
Net Income (loss) $ 12,031 $ 2,775 $ 197 $ (1,740 ) $ 13,263
 
Total assets $ 1,828,543 $ 83,644 $ 3,604 $ 1,147   $ 1,916,938
(1) Includes parent company and intercompany eliminations
 

The mortgage subsidiary closed on a record volume of loans during the nine months ended September 30, 2016, compared to any prior comparable nine month period in its history. During the three and nine months ended September 30, 2016, the mortgage subsidiary originated $386.2 million and $725.8 million, respectively, of total loan volume. During the nine months ended September 30, 2016, 62.6% of the mortgage loan volume was for purchase money mortgage loans, whereas only 53.0% of the mortgage volume for the nine months ended September 30, 2015, was for purchase money loans. Gain on sale of loans is highly correlated with salaries and employee benefits at the mortgage subsidiary due to commissions paid to loan officers. Assets under management grew to $280.8 million as of September 30, 2016, at the wealth management subsidiary compared to $218.1 million as of September 30, 2015.

About The Company

WashingtonFirst Bankshares, Inc., headquartered in Reston, Virginia, is the holding company for WashingtonFirst Bank, which operates 19 full-service banking offices throughout the Washington, DC, metropolitan area. In addition, the Company provides wealth management services through its subsidiary, 1st Portfolio Wealth Advisors, and mortgage banking services through the Bank's subsidiary, WashingtonFirst Mortgage Corporation. The Company's common stock is traded on the NASDAQ Stock Market under the quotation symbol "WFBI" and is included in the ABA NASDAQ Community Bank Index and the Russell 2000® index. For more information about the Company, please visit: www.wfbi.com.

Cautionary Statements About Forward-Looking Information

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements of the goals, intentions, and expectations of the Company as to future trends, plans, events, results of operations and policies and regarding general economic conditions. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time. In some cases, forward-looking statements can be identified by use of words such as "may," "will," "anticipates," "believes," "expects," "plans," "estimates," "potential," "continue," "should," and similar words or phrases. These statements are based upon the beliefs of the management of the Company as to the expected outcome of future events, current and anticipated economic conditions, nationally and in the Company's market, and their impact on the operations, assets and earnings of the Company, interest rates and interest rate policy, competitive factors, judgments about the ability of the Company to successfully integrate its operations following significant transactions including, but not limited to, mergers and acquisitions, the ability to avoid customer dislocation during the period leading up to and following such transactions, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Readers are cautioned against placing undue reliance on such forward-looking statements. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Additional documents are available free of charge at the SEC's website, www.sec.gov and on the Company's website at www.wfbi.com under the tab "Investor Relations" or by contacting the Company's Investor Relations Department at 11921 Freedom Drive, Suite 250, Reston, VA 20190. You may also read and copy any reports, statements and other information filed with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. Information about the operation of the SEC Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

 
WashingtonFirst Bankshares, Inc.
Consolidated Balance Sheets

(unaudited)
     

September 30,2016

December 31,2015

September 30,2015
($ in thousands)
Assets:
Cash and cash equivalents:
Cash and due from bank balances $ 3,262 $ 3,739 $ 3,973
Federal funds sold 127,965 59,014 60,092
Interest bearing deposits 100      
Cash and cash equivalents 131,327 62,753 64,065
Investment securities, available-for-sale, at fair value 238,022 220,113 201,150
Restricted stock, at cost 7,019 6,128 5,694
Loans held for sale, at lower of cost or fair value 62,847 36,494 28,495
Loans held for investment:
Loans held for investment, at amortized cost 1,431,371 1,308,083 1,256,303
Allowance for loan losses (12,960 ) (12,289 ) (11,573 )
Total loans held for investment, net of allowance 1,418,411 1,295,794 1,244,730
Premises and equipment, net 7,301 7,374 7,044
Goodwill 11,420 11,431 11,450
Identifiable intangibles 1,686 1,888 1,955
Deferred tax asset, net 7,333 8,116 6,846
Accrued interest receivable 4,406 4,502 4,283
Other real estate owned 1,969 109
Bank-owned life insurance 13,791 13,521 13,428
Other assets 11,406   6,352   5,944  
Total Assets $ 1,916,938   $ 1,674,466   $ 1,595,193  
Liabilities and Shareholders' Equity:
Liabilities:
Non-interest bearing deposits $ 410,833 $ 304,425 $ 356,270
Interest bearing deposits 1,121,422   1,028,817   953,715  
Total deposits 1,532,255 1,333,242 1,309,985
Other borrowings 22,479 6,942 8,407
FHLB advances 121,343 110,087 99,952
Long-term borrowings 32,988 32,884 10,156
Accrued interest payable 1,390 912 706
Other liabilities 14,503   11,804   11,428  
Total Liabilities 1,724,958 1,495,871 1,440,634
Commitments and contingent liabilities
Shareholders' Equity:
Preferred stock:
Series D, $5.00 par value, 0, 0, and 8,898 shares issued and outstanding, respectively, 1% dividend 44
Additional paid-in capital - preferred 8,854
Common stock:
Common Stock Voting, $0.01 par value, 50,000,000 shares authorized, 10,439,289; 10,377,981 and 8,700,759 shares issued and outstanding, respectively 104 103 86
Common Stock Non-Voting, $0.01 par value, 10,000,000 shares authorized; 1,817,842 shares issued and outstanding for all periods presented 18 18 18
Additional paid-in capital 161,918 160,861 129,258
Accumulated earnings 28,800 17,740 14,931
Accumulated other comprehensive income/(loss) 1,140   (127 ) 1,368  
Total Shareholders' Equity 191,980   178,595   154,559  
Total Liabilities and Shareholders' Equity $ 1,916,938   $ 1,674,466   $ 1,595,193  
 
   
WashingtonFirst Bankshares, Inc.
Consolidated Statements of Income

(unaudited)
 
For the Three Months Ended For the Nine Months Ended

September 30,2016
 

September 30,2015
 

September 30,2016
 

September 30,2015
($ in thousands, except per share data)
Interest and dividend income:    
Interest and fees on loans $ 17,703 $ 15,504 $ 50,930 $ 43,258
Interest and dividends on investments:
Taxable 1,102 832 3,272 2,334
Tax-exempt 25 15 66 51
Dividends on other equity securities 56 69 208 186
Interest on Federal funds sold and other short-term investments 50   42   186   195  
Total interest and dividend income 18,936 16,462 54,662 46,024
Interest expense:
Interest on deposits 2,232 1,653 6,427 4,622
Interest on borrowings 861   647   2,838   1,762  
Total interest expense 3,093   2,300   9,265   6,384  
Net interest income 15,843 14,162 45,397 39,640
Provision for loan losses 1,035   925   2,640   2,475  
Net interest income after provision for loan losses 14,808 13,237 42,757 37,165
Non-interest income:
Service charges on deposit accounts 54 106 214 337
Earnings on bank-owned life insurance 90 92 270 281
Gain on sale of other real estate owned, net 11 14 11 131
Gain on sale of loans, net 6,327 2,017 14,356 2,183
Mortgage banking activities 1,215 289 3,772 289
Wealth management income 467 268 1,338 268
Gain/(loss) on sale of available-for-sale investment securities, net 135 (12 ) 1,287 10
Other operating income 367   148   689   586  
Total non-interest income 8,666 2,922 21,937 4,085
Non-interest expense:
Compensation and employee benefits 10,052 6,803 27,209 15,506
Premises and equipment 1,802 1,641 5,482 4,630
Data processing 1,058 879 3,183 2,615
Professional fees 377 260 1,046 923
Merger expenses 30 313 30 554
Mortgage loan processing expenses 444 109 994 109
Debt extinguishment 155 1,199
Other operating expenses 1,693   1,224   4,504   3,338  
Total non-interest expense 15,611   11,229   43,647   27,675  
Income before provision for income taxes 7,863 4,930 21,047 13,575
Provision for income taxes 2,922   1,774   7,784   4,862  
Net income 4,941 3,156 13,263 8,713
Preferred stock dividends   (22 )   (73 )
Net income available to common shareholders $ 4,941   $ 3,134   $ 13,263   $ 8,640  
 
Earnings per common share:
Basic earnings per common share $ 0.40 $ 0.31 $ 1.08 $ 0.88
Diluted earnings per common share $ 0.39 $ 0.31 $ 1.06 $ 0.87
 
 
Average Balances, Interest Income and Expense and Average Yield and Rates (QTD)
  For the Three Months Ended
September 30, 2016   September 30, 2015
AverageBalance   Income/Expense   Yield/Rate (6) AverageBalance   Income/Expense   Yield/Rate (6)
($ in thousands)
Assets
Interest-earning assets:
Loans (1) $ 1,468,424 $ 17,703 4.72 % $ 1,229,792 $ 15,504 4.93 %
Investment securities - taxable 239,119 1,102 1.80 % 189,852 832 1.71 %
Investment securities - tax-exempt (2) 6,006 30 1.98 % 2,509 19 3.18 %
Other equity securities 5,494 56 4.07 % 6,414 69 4.27 %
Interest-bearing balances 100 0.60 % %
Federal funds sold 34,806   50   0.57 % 44,891   42   0.37 %
Total interest earning assets 1,753,949 18,941 4.23 % 1,473,458 16,466 4.37 %
Non-interest earning assets:
Cash and due from banks 2,849 4,907
Premises and equipment 7,477 6,798
Other real estate owned 2,121 183
Other assets (3) 47,373 42,965
Less: allowance for loan losses (12,627 ) (10,785 )
Total non-interest earning assets 47,193   44,068  
Total Assets $ 1,801,142   $ 1,517,526  
 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $ 127,801 $ 93 0.29 % $ 111,758 $ 70 0.25 %
Money market deposit accounts 262,080 395 0.60 % 235,004 289 0.49 %
Savings accounts 228,047 409 0.71 % 136,834 238 0.69 %
Time deposits 477,763   1,335   1.11 % 418,851   1,056   1.00 %
Total interest-bearing deposits 1,095,691 2,232 0.81 % 902,447 1,653 0.73 %
FHLB advances 85,407 318 1.46 % 116,990 422 1.41 %
Other borrowings and long-term borrowings 39,840   543   5.40 % 20,934   225   4.24 %
Total interest-bearing liabilities 1,220,938 3,093 1.01 % 1,040,371 2,300 0.87 %
Non-interest-bearing liabilities:
Demand deposits 375,629 316,223
Other liabilities 12,126   12,091  
Total non-interest-bearing liabilities 387,755   328,314  
Total Liabilities 1,608,693 1,368,685
Shareholders' Equity 192,449   148,841  
Total Liabilities and Shareholders' Equity $ 1,801,142   $ 1,517,526  
 
Interest Spread (4)   3.22 %   3.50 %
Net Interest Margin (2)(5) $ 15,848   3.53 % $ 14,166   3.76 %
 

(1)

Includes loans held for sale and loans placed on non-accrual status.

(2)

Yield and income presented on a fully taxable equivalent basis using a federal statutory rate of 35 percent.

(3)

Includes intangibles, deferred tax asset, accrued interest receivable, bank-owned life insurance and other assets.

(4)

Interest spread is the average yield earned on earning assets, less the average rate incurred on interest bearing liabilities.

(5)

Net interest margin is net interest income, expressed as a percentage of average earning assets.

(6)

Annualized income/expense is used for the yield/rate.
 
 
Average Balances, Interest Income and Expense and Average Yield and Rates (YTD)
  For the Nine Months Ended
September 30, 2016   September 30, 2015
AverageBalance   Income/Expense   Yield/Rate (6) AverageBalance   Income/Expense   Yield/Rate (6)
($ in thousands)
Assets
Interest-earning assets:
Loans (1) $ 1,414,289 $ 50,930 4.73 % $ 1,143,556 $ 43,258 4.99 %
Investment securities - taxable 246,686 3,272 1.74 % 179,730 2,334 1.71 %
Investment securities - tax-exempt (2) 4,644 81 2.27 % 2,688 65 3.20 %
Other equity securities 6,115 208 4.55 % 6,026 186 4.12 %
Interest-bearing balances 81 1 1.98 % 5,668 27 0.64 %
Federal funds sold 44,005   185   0.56 % 57,061   168   0.39 %
Total interest earning assets 1,715,820 54,677 4.19 % 1,394,729 46,038 4.35 %
Non-interest earning assets:
Cash and due from banks 2,515 3,757
Premises and equipment 7,607 6,360
Other real estate owned 1,534 307
Other assets (3) 47,375 38,433
Less: allowance for loan losses (12,399 ) (10,005 )
Total non-interest earning assets 46,632   38,852  
Total Assets $ 1,762,452   $ 1,433,581  
 
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $ 122,218 $ 269 0.29 % $ 104,942 $ 188 0.24 %
Money market deposit accounts 275,039 1,226 0.60 % 217,739 794 0.49 %
Savings accounts 205,095 1,090 0.71 % 129,938 666 0.69 %
Time deposits 467,384   3,842   1.10 % 402,958   2,974   0.99 %
Total interest-bearing deposits 1,069,736 6,427 0.80 % 855,577 4,622 0.72 %
FHLB advances 103,783 1,216 1.54 % 106,717 1,171 1.45 %
Other borrowings and long-term borrowings 39,284   1,622   5.49 % 18,865   591   4.16 %
Total interest-bearing liabilities 1,212,803 9,265 1.02 % 981,159 6,384 0.87 %
Non-interest-bearing liabilities:
Demand deposits 348,836 302,524
Other liabilities 12,885   9,727  
Total non-interest-bearing liabilities 361,721   312,251  
Total Liabilities 1,574,524 1,293,410
Shareholders' Equity 187,928   140,171  
Total Liabilities and Shareholders' Equity $ 1,762,452   $ 1,433,581  
 
Interest Spread (4)   3.17 %   3.48 %
Net Interest Margin (2)(5) $ 45,412   3.47 % $ 39,654   3.74 %
 

(1)

Includes loans held for sale and loans placed on non-accrual status.

(2)

Yield and income presented on a fully taxable equivalent basis using a federal statutory rate of 35 percent.

(3)

Includes intangibles, deferred tax asset, accrued interest receivable, bank-owned life insurance and other assets.

(4)

Interest spread is the average yield earned on earning assets, less the average rate incurred on interest bearing liabilities.

(5)

Net interest margin is net interest income, expressed as a percentage of average earning assets.

(6)

Annualized income/expense is used for the yield/rate.
 

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