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County Bancorp, Inc. Announces Net Income of $3.8 Million for the First Quarter of 2019

Highlights

  • Net income of $3.8 million for the first quarter of 2019
  • Diluted earnings per share of $0.54 for the first quarter of 2019
  • Book value per share of $22.36 as of March 31, 2019, an increase of $0.86, or 4.0%, since December 31, 2018
  • Brokered and national deposits decreased $52.2 million during the first quarter of 2019, a reduction of 11.1% since December 31, 2018

MANITOWOC, Wis., April 18, 2019 (GLOBE NEWSWIRE) -- County Bancorp, Inc. (the “Company”; Nasdaq: ICBK), the holding company of Investors Community Bank (the “Bank”), an agricultural and commercial community bank headquartered in Manitowoc, Wisconsin, reported net income of $3.8 million, or $0.54 diluted earnings per share, for the first quarter of 2019, compared to net income of $2.8 million, or $0.40 diluted earnings per share, for the fourth quarter of 2018 and $4.1 million, or $0.58 diluted earnings per share, for the first quarter of 2018.  This represents an annualized return on average assets of 1.00% for the three months ended March 31, 2019, compared to 1.15% for the three months ended March 31, 2018.

“We are very pleased that we continue to produce solid quarterly earnings, even with the challenges in the dairy sector,” stated Tim Schneider, President of the Company and CEO of the Bank.

“As we previously announced, we are committed to reducing our wholesale funding which we were able to make significant progress towards in the first quarter through loan participations.  Our core deposit strategies had modest impact on this shift in the first quarter, but we feel longer term our strategies to grow core deposits will be impactful.  Although we saw reduction in our classified assets ratio which was due to completed collection efforts, loan payoffs, and credits which were upgraded through our annual review process, we still have a large portion of our agricultural portfolio remaining to fully review through the credit underwriting process.”

Loans and Total Assets

Total assets at March 31, 2019 were $1.5 billion, a decrease of $29.4 million, or 1.9%, and an increase of $31.1 million, or 2.1%, over total assets as of December 31, 2018 and March 31, 2018, respectively.  Total loans were $1.2 billion at March 31, 2019, which represents a $24.3 million, or 2.0%, decrease over total loans at December 31, 2018, and an $18.4 million, or 1.6%, increase over total loans at March 31, 2018.

During the first quarter of 2019, participated loans that we continue to service increased to $675.3 million at March 31, 2019, which is an increase of $14.0 million, or 2.1%, and $63.9 million, or 10.5%, over participated loans that we serviced at December 31, 2018 and March 31, 2018, respectively.

Deposits

Total deposits at March 31, 2019 were $1.2 billion, a decrease of $47.1 million, or 3.8%, and an increase of $3.8 million, or 0.3%, over total deposits as of December 31, 2018 and March 31, 2018, respectively.  Client deposits (demand deposits, money market accounts, and certificates of deposit) increased $5.2 million, or 0.7%, since December 31, 2018, and increased $89.4 million, or 13.3%, since March 31, 2018.

Due to the increases in loan participations and client deposit growth, we were able to decrease our reliance on brokered deposits and national certificates of deposit by $52.2 million, or 11.1%, from December 31, 2018, to $416.7 million at March 31, 2019.  This also represents a decrease or $85.5 million, or 17.0%, from March 31, 2018.

During the first quarter of 2019, we supplemented a portion of our deposit needs with FHLB borrowings.  At March 31, 2019, borrowings from the FHLB totaled $100.4 million, which was an increase of $11.0 million, or 12.3%, from December 31, 2018, but was a decrease of $20.1 million, or 16.7%, from March 31, 2018.

Net Interest Income and Margin

Net interest income was $10.6 million for the three months ended March 31, 2019, which was a $0.1 million, or 1.7%, decrease from the three months ended December 31, 2018, and a $0.3 million, or 2.8%, increase from the three months ended March 31, 2018.  The primary reason for the first quarter decline in net interest income compared to the preceding quarter was the increase in loan participations that resulted in lower average loan balances during the period.

Net interest margin was 2.94% for the three months ended March 31, 2019, which was an increase from 2.91% for the three months ended December 31, 2018, and a decrease from 3.01% for the three months ended March 31, 2018.  A slight improvement in net interest margin was realized over the linked quarter because while loan yields remained steady, interest rates on deposits due from other banks outpaced the increase in cost of funds.  Year-over-year first quarter net interest margin decreased by seven basis points primarily due to interest expense related to the $30.0 million of junior subordinated debentures that were issued during the second quarter of 2018 and a fifty-one basis point increase in cost of funds, which was partially offset by a forty-seven basis point improvement in loan yields.

Non-Interest Income and Expense

Non-interest income for the three months ended March 31, 2019 increased by $0.5 million, or 18.5%, to $2.8 million compared to the three months ended December 31, 2018, primarily due to the reduction of the allowance for unused commitments of $0.5 million, included in other non-interest income, in the first quarter.  The Company evaluated the need for this allowance during the first quarter and concluded there was no sufficient evidence that represented credit loss inherent in these commitments to substantiate the necessity of this reserve at March 31, 2019 and concluded to eliminate it.  The Company will continue to evaluate credit risk on these off-balance sheet commitments going forward.  During the first quarter, the Company also reduced a valuation allowance on its loan servicing rights portfolio which resulted in an increase of $0.2 million of loan servicing rights.  The reduction of the valuation allowance is expected to continue throughout the remaining quarters of 2019.

Non-interest income for the three months ended March 31, 2019 increased $0.7 million, or 34.8%, compared to $2.0 million for the three months ended March 31, 2018.  The year-over-year increase was primarily due to the elimination of the allowance for unused commitments and valuation allowance reduction discussed above and increases in loan servicing fees and rights which were the result of higher volumes of loans being serviced.

Non-interest expense for the three months ended March 31, 2019 decreased by $0.2 million, or 3.1%, to $7.3 million compared to the three months ended December 31, 2018, and increased $0.5 million, or 7.7%, compared to the three months ended March 31, 2018.  The quarter-over-quarter decrease was primarily due $0.7 million of write-downs on two OREO properties that took place during the fourth quarter of 2018, which was partially offset by a $0.3 million, or 6.3% increase in employee compensation and benefits which was primarily the result of a 24.1% increase in the premium cost of employee benefits.

Asset Quality

Non-performing assets as a percent of total assets increased to 2.07% at March 31, 2019, from 1.94% at December 31, 2018, and 1.83% at March 31, 2018.  At March 31, 2019, non-performing assets were $30.9 million, an increase of $1.3 million and $4.2 million at December 31, 2018 and March 31, 2018, respectively.  During the first quarter of 2019, non-performing loans increased by $2.9 million; however, three OREO properties were sold resulting in a decrease of $1.5 million in OREO during the quarter ended March 31, 2019.

Substandard loans were $107.5 million at March 31, 2019, compared to $120.9 million at December 31, 2018 and $82.6 million at March 31, 2018.  Adverse classified asset ratio (a non-GAAP measure) decreased to 48.59% at March 31, 2019 from 57.12% and 53.44% at December 31, 2018 and March 31, 2018, respectively.  Despite Wisconsin’s strained agricultural economy and the four-year sustained low prices of class III milk, the improvement in this ratio is the result of the active management of the substandard credits within the Bank’s loan portfolio as well as sales of OREO during the quarter.

A provision for loan losses of $0.8 million was recorded for the three months ended March 31, 2019 compared to a provision of $1.6 million and $0.1 million for the three months ended December 31, 2018 and March 31, 2018, respectively.  The decrease in provision in the linked quarter is directly related to the $24.3 million reduction in total loans and the $0.2 million of net recoveries that occurred during the first quarter of 2019.

The allowance for loan losses was $17.5 million at March 31, 2019 compared to $16.5 million at December 31, 2018.  The $1.0 million increase in the allowance during the first quarter of 2019 was the result of a $2.1 million increase in specific impairments on substandard loans which was offset in part by a $1.1 million reduction in general reserves due to the decreases in both adversely classified and total loans and improvement of qualitative factors.

Conference Call

The Company will host an earnings call today, April 18, 2019, at 1:30 p.m., CDT, conducted by Tim Schneider, President, and Glen L. Stiteley, CFO.  The earnings call will be broadcast over the Internet on the Company’s website at www.ICBK.com then clicking on the link “Investor Relations,” and selecting “News”, then “Event Calendar.”  In addition, you may listen to the Company’s earnings call via telephone by dialing (888) 317-6016.  Investors should visit the Company’s website or call in to the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call.

A replay of the earnings call will be available until April 18, 2020, by visiting the Company’s website at http://www.icbk.com and clicking on the link “Investor Relations.”

About County Bancorp, Inc.

County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and our wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin.  The state of Wisconsin is often referred to as “America’s Dairyland,” and one of the niches we have developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending.  We also serve business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin.  Our customers are served from our full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and our loan production offices in Darlington, Eau Claire, Fond du Lac, and Sheboygan.

Forward-Looking Statements

This press release includes "forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking statements presented in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Factors that may cause actual results to differ materially from those made or suggested by the forward-looking statements contained in this press release include those identified in the Company’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission.  Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Investor Relations Contact
Glen L. Stiteley
EVP - CFO, Investors Community Bank
Phone: (920) 686-5658
Email: gstiteley@icbk.com

County Bancorp, Inc.
Consolidated Financial Summary
(Unaudited)
March 31,
2019
December
31,
2018
September
30,
2018
June 30,
2018
March 31,
2018
(dollars in thousands, except per share data)
Period-End Balance Sheet:
Assets
Cash and cash equivalents $ 62,426 $ 61,087 $ 49,996 $ 81,044 $ 90,676
Securities available for sale, at fair value 192,210 195,945 190,185 187,505 141,360
Loans held for sale 2,998 2,949 13,770 11,468 6,407
Agricultural loans 722,107 724,508 714,310 702,426 698,106
Commercial loans 403,490 415,672 417,146 407,609 406,096
Multi-family real estate loans 52,974 62,321 66,403 65,713 54,514
Residential real estate loans 4,172 4,522 4,965 5,437 5,512
Installment and consumer other 220 272 113 339 297
Total loans 1,182,963 1,207,295 1,202,937 1,181,524 1,164,525
Allowance for loan losses (17,493 ) (16,505 ) (16,143 ) (15,129 ) (14,612 )
Net loans 1,165,470 1,190,790 1,186,794 1,166,395 1,149,913
Other assets 68,284 70,057 74,223 72,465 71,901
Total Assets $ 1,491,388 $ 1,520,828 $ 1,514,968 $ 1,518,877 $ 1,460,257
Liabilities and Shareholders' Equity
Demand deposits $ 101,434 $ 121,436 $ 103,862 $ 95,459 $ 101,167
NOW accounts and interest checking 49,902 51,779 46,811 51,674 48,212
Savings 6,210 5,770 6,616 6,833 6,189
Money market accounts 225,975 218,929 208,233 204,332 199,834
Time deposits 376,034 356,484 352,531 344,619 314,766
Brokered deposits 269,917 308,504 317,291 323,561 319,692
National time deposits 146,805 160,445 173,440 183,953 182,530
Total deposits 1,176,277 1,223,347 1,208,784 1,210,431 1,172,390
FHLB advances 100,400 89,400 102,400 108,200 120,500
Subordinated debentures 44,742 44,703 44,663 44,725 15,540
Other liabilities 11,952 11,293 11,134 9,439 9,013
Total Liabilities 1,333,371 1,368,743 1,366,981 1,372,795 1,317,443
Shareholders' equity 158,017 152,085 147,987 146,082 142,814
Total Liabilities and Shareholders'
Equity
$ 1,491,388 $ 1,520,828 $ 1,514,968 $ 1,518,877 $ 1,460,257
Stock Price Information:
High - Quarter-to-date $ 19.69 $ 26.00 $ 28.20 $ 29.26 $ 33.76
Low - Quarter-to-date $ 16.74 $ 17.37 $ 24.29 $ 25.72 $ 26.61
Market price - Quarter-end $ 17.60 $ 17.37 $ 25.10 $ 27.50 $ 29.21
Book value per share $ 22.36 $ 21.50 $ 20.91 $ 20.63 $ 20.17
Tangible book value per share (1) $ 21.54 $ 20.65 $ 20.07 $ 19.77 $ 19.29
Common shares outstanding 6,709,254 6,709,480 6,694,230 6,693,447 6,684,923

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

March 31,
2019
December
31,
2018
September
30,
2018
June 30,
2018
March 31,
2018
(dollars in thousands)
Loans by risk category:
Sound/Acceptable/Satisfactory/
Low Satisfactory
$ 896,328 $ 908,172 $ 901,643 $ 896,509 $ 891,062
Watch 174,642 171,670 171,890 186,399 185,179
Special Mention 4,501 6,566 11,036 4,783 5,636
Substandard Performing 46,075 65,501 61,851 46,751 45,261
Substandard Impaired 61,417 55,386 56,517 47,082 37,387
Total loans 1,182,963 1,207,295 1,202,937 1,181,524 1,164,525
Loan sold with servicing retained 675,268 661,257 644,879 628,435 611,358
Total loans and loans sold with
servicing retained
$ 1,858,231 $ 1,868,552 $ 1,847,816 $ 1,809,959 $ 1,775,883
Non-Performing Assets:
Nonaccrual loans $ 25,880 $ 22,983 $ 27,881 $ 26,305 $ 17,746
Other real estate owned (2) 5,019 6,568 7,851 8,607 8,982
Total non-performing assets $ 30,899 $ 29,551 $ 35,732 $ 34,912 $ 26,728
Performing TDRs not on nonaccrual $ 21,111 $ 18,258 $ 11,863 $ 11,173 $ 10,488
Non-performing assets as a % of total loans 2.61 % 2.45 % 2.97 % 2.95 % 2.30 %
Non-performing assets as a % of total assets 2.07 % 1.94 % 2.36 % 2.30 % 1.83 %
Adverse classified asset ratio (1) 48.59 % 57.12 % 51.89 % 47.34 % 53.44 %
Allowance for loan losses as a % of
nonaccrual loans
67.59 % 71.81 % 57.90 % 57.51 % 82.34 %
Allowance for loan losses as a % of total
loans
1.48 % 1.37 % 1.34 % 1.28 % 1.25 %
Net charge-offs (recoveries) quarter-to-date $ (236 ) $ 1,210 $ (21 ) $ 16 $ (1,268 )
Provision for loan loss quarter-to-date $ 752 $ 1,572 $ 993 $ 533 $ 97

(1) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
(2) For the quarters ending March 31, 2018 through September 30, 2018, does not include $0.4 million of bank property transferred from premises and equipment, which is not considered a non-performing asset.  As of March 31, 2019 and December 31, 2018, that bank property is considered classified due to the length of the holding period.

For the Three Months Ended
March 31,
2019
December
31,
2018
September
30,
2018
June 30,
2018
March 31,
2018
(dollars in thousands, except per share data)
Selected Income Statement Data:
Interest and Dividend Income
Loans, including fees $ 15,501 $ 15,536 $ 15,113 $ 14,366 $ 13,691
Taxable securities 1,186 1,168 945 982 632
Tax-exempt securities 175 183 344 14 157
Federal funds sold and other 264 223 249 401 213
Total interest and dividend
income
17,126 17,110 16,651 15,763 14,693
Interest Expense
Deposits 5,424 5,273 4,980 4,600 3,796
FHLB advances and other borrowed
funds
464 427 411 487 484
Subordinated debentures 678 667 656 338 143
Total interest expense 6,566 6,367 6,047 5,425 4,423
Net interest income 10,560 10,743 10,604 10,338 10,270
Provision for loan losses 752 1,572 993 533 97
Net interest income after provision
for loan losses
9,808 9,171 9,611 9,805 10,173
Non-Interest Income
Services charges 353 470 394 445 365
Gain (loss) on sale of loans, net (1 ) 54 41 45 32
Loan servicing fees 1,519 1,553 1,521 1,486 1,452
Loan servicing right origination 228 7 (46 ) 127 10
Income on OREO 26 83 96 45 32
Other 625 153 151 168 149
Total non-interest income 2,750 2,320 2,157 2,316 2,040
Non-Interest Expense
Employee compensation and
benefits
4,482 4,059 4,394 4,114 4,218
Occupancy 389 245 332 278 204
Information processing 563 641 529 529 465
Professional fees 399 497 351 359 315
Business development 325 259 258 260 299
OREO expenses 51 106 46 152 140
Writedown of OREO - 688 81 104 -
Net gain on sale of OREO (136 ) (54 ) (28 ) (149 ) -
Depreciation and amortization 337 408 302 324 314
Other 895 689 758 966 830
Total non-interest expense 7,305 7,538 7,023 6,937 6,785
Income before income taxes 5,253 3,953 4,745 5,184 5,428
Income tax expense 1,491 1,123 1,228 1,334 1,374
NET INCOME $ 3,762 $ 2,830 $ 3,517 $ 3,850 $ 4,054
Basic $ 0.54 $ 0.41 $ 0.51 $ 0.56 $ 0.59
Diluted $ 0.54 $ 0.40 $ 0.50 $ 0.55 $ 0.58
Dividends declared $ 0.05 $ 0.07 $ 0.07 $ 0.07 $ 0.07


For the Three Months Ended
March 31,
2019
December
31,
2018
September
30,
2018
June 30,
2018
March 31,
2018
(dollars in thousands, except share data)
Other Data:
Return on average assets 1.00 % 0.75 % 0.94 % 1.04 % 1.15 %
Return on average shareholders'
equity
9.78 % 7.58 % 9.51 % 10.63 % 11.62 %
Return on average common
shareholders' equity (1)
9.99 % 7.70 % 9.75 % 10.96 % 12.04 %
Efficiency ratio (1) 55.91 % 52.85 % 54.62 % 55.18 % 55.12 %
Tangible common equity to
tangible assets (1)
9.73 % 9.14 % 8.90 % 8.75 % 8.87 %
Common Share Data:
Net income from continuing
operations
$ 3,762 $ 2,830 $ 3,517 $ 3,850 $ 4,054
Less:  Preferred stock dividends 117 111 106 99 97
Income available to common
shareholders
$ 3,645 $ 2,719 $ 3,411 $ 3,751 $ 3,957
Weighted average number of common
shares issued
7,188,817 7,184,946 7,167,276 7,163,362 7,152,970
Less: Weighted average treasury
shares
443,729 443,694 443,140 442,102 439,833
Less: Weighted average non-
vested restricted units
awards
19,383 28,701 29,537 30,692 34,976
Weighted average number of
common shares outstanding
6,725,705 6,712,551 6,694,599 6,690,568 6,678,161
Effect of dilutive options 21,323 45,116 63,346 79,368 90,804
Weighted average number of
common shares outstanding
used to calculate diluted
earnings per common share
6,747,028 6,757,667 6,757,945 6,769,936 6,768,965

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

For the Three Months Ended
Non-GAAP Financial Measures: March 31,
2019
December
31,
2018
September
30,
2018
June 30,
2018
March 31,
2018
(dollars in thousands)
Return on average common
shareholders' equity
reconciliation:
Return on average shareholders'
equity
9.78 % 7.58 % 9.51 % 10.63 % 11.62 %
Effect of excluding average
preferred shareholders'
equity
0.21 % 0.12 % 0.24 % 0.33 % 0.42 %
Return on average common
shareholders' equity
9.99 % 7.70 % 9.75 % 10.96 % 12.04 %
Efficiency ratio GAAP to non-GAAP
reconciliation:
Non-interest expense $ 7,305 $ 7,538 $ 7,023 $ 6,937 $ 6,785
Less: net gain (loss) on sales and
write-downs of OREO
136 (634 ) (53 ) 45 -
Adjusted non-interest expense
(non-GAAP)
$ 7,441 $ 6,904 $ 6,970 $ 6,982 $ 6,785
Net interest income $ 10,560 $ 10,743 $ 10,604 $ 10,338 $ 10,270
Non-interest income 2,750 2,320 2,157 2,316 2,040
Operating revenue $ 13,310 $ 13,063 $ 12,761 $ 12,654 $ 12,310
Efficiency ratio 55.91 % 52.85 % 54.62 % 55.18 % 55.12 %

March 31,
2019
December
31,
2018
September
30,
2018
June 30,
2018
March 31,
2018
(dollars in thousands, except per share data)
Tangible book value per share and
tangible common equity to tangible
assets reconciliation:
Common equity $ 150,017 $ 144,085 $ 139,987 $ 138,082 $ 134,814
Less: Goodwill 5,038 5,038 5,038 5,038 5,038
Less: Core deposit intangible, net of
amortization
430 513 603 701 806
Tangible common equity (non-GAAP) $ 144,549 $ 138,534 $ 134,346 $ 132,343 $ 128,970
Common shares outstanding 6,709,254 6,709,480 6,694,230 6,693,447 6,684,923
Tangible book value per share $ 21.54 $ 20.65 $ 20.07 $ 19.77 $ 19.29
Total assets $ 1,491,388 $ 1,520,828 $ 1,514,968 $ 1,518,877 $ 1,460,257
Less: Goodwill 5,038 5,038 5,038 5,038 5,038
Less: Core deposit intangible, net of
amortization
430 513 603 701 806
Tangible assets (non-GAAP) $ 1,485,920 $ 1,515,277 $ 1,509,327 $ 1,513,138 $ 1,454,413
Tangible common equity to tangible assets 9.73 % 9.14 % 8.90 % 8.75 % 8.87 %
Adverse classified asset ratio:
Substandard loans $ 107,492 $ 120,887 $ 118,368 $ 93,833 $ 82,648
Less: Impaired performing restructured loans (6,382 ) (5,078 ) (13,657 ) (2,081 ) (1,164 )
Net substandard loans $ 101,110 $ 115,809 $ 104,711 $ 91,752 $ 81,484
Other real estate owned 5,019 6,568 7,851 8,607 8,982
Substandard unused commitments 976 1,625 1,191 959 2,309
Less: Substandard government guarantees (5,864 ) (7,111 ) (9,374 ) (8,356 ) (3,605 )
Total adverse classified assets (non-GAAP) $ 101,241 $ 116,891 $ 104,379 $ 92,962 $ 89,170
Total equity (Bank) $ 191,287 $ 185,458 $ 180,359 $ 177,911 $ 149,105
Accumulated other comprehensive loss
(gain) on available for sale securities
(436 ) 2,221 4,152 2,795 2,603
Allowance for loan losses 17,493 16,505 16,143 15,129 14,612
Allowance for unused commitments - 475 510 522 553
Adjusted total equity (non-GAAP) $ 208,344 $ 204,659 $ 201,164 $ 196,357 $ 166,873
Adverse classified asset ratio 48.59 % 57.12 % 51.89 % 47.34 % 53.44 %


For the Three Months Ended
March 31, 2019 December 31, 2018 March 31, 2018
Average
Balance (1)
Income/
Expense
Yields/
Rates
Average
Balance (1)
Income/
Expense
Yields/
Rates
Average
Balance (1)
Income/
Expense
Yields/
Rates
(dollars in thousands)
Assets
Investment securities $ 192,963 $ 1,361 2.82 % $ 191,955 $ 1,351 2.82 % $ 136,722 $ 789 2.31 %
Loans (2) 1,207,240 15,501 5.14 % 1,207,883 15,536 5.14 % 1,172,786 13,691 4.67 %
Interest bearing deposits due from
other banks
36,227 264 2.92 % 67,153 223 1.33 % 55,784 213 1.53 %
Total interest-earning assets $ 1,436,430 $ 17,126 4.77 % $ 1,466,991 $ 17,110 4.67 % $ 1,365,292 $ 14,693 4.30 %
Allowance for loan losses (17,005 ) (16,034 ) (13,722 )
Other assets 78,654 61,316 62,000
Total assets $ 1,498,079 $ 1,512,273 $ 1,413,570
Liabilities
Savings, NOW, money market,
interest checking
$ 295,418 $ 1,184 1.60 % $ 287,420 $ 1,043 1.45 % $ 282,313 $ 640 0.91 %
Time deposits 797,476 4,240 2.13 % 820,515 4,230 2.06 % 742,465 3,156 1.70 %
Total interest-bearing deposits $ 1,092,894 $ 5,424 1.99 % $ 1,107,935 $ 5,273 1.90 % $ 1,024,778 $ 3,796 1.48 %
Other borrowings 844 11 5.27 % 837 10 4.62 % 1,286 16 4.97 %
FHLB advances 92,900 453 1.95 % 90,509 417 1.84 % 121,067 468 1.55 %
Junior subordinated debentures 44,606 678 6.08 % 44,681 667 5.97 % 15,529 143 3.68 %
Total interest-bearing
liabilities
$ 1,231,244 $ 6,566 2.13 % $ 1,243,962 $ 6,367 2.05 % $ 1,162,660 $ 4,423 1.52 %
Non-interest-bearing deposits 101,532 108,140 103,669
Other liabilities 11,362 10,913 7,743
Total liabilities $ 1,344,138 $ 1,363,015 $ 1,274,072
Shareholders' equity 153,941 149,258 139,498
Total liabilities and equity $ 1,498,079 $ 1,512,273 $ 1,413,570
Net interest income $ 10,560 $ 10,743 $ 10,270
Interest rate spread (3) 2.64 % 2.62 % 2.78 %
Net interest margin (4) 2.94 % 2.91 % 3.01 %
Ratio of interest-earning assets to
interest-bearing liabilities
1.17 1.18 1.17

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.