American National Bankshares Inc. Reports Second Quarter 2018 Earnings

• Loan growth of $50.7 million (3.9%) during last four quarters
• Net income of $6.0 million and diluted EPS of $0.69 for Q2 2018
• Net interest margin of 3.50% for Q2 2018
• Average shareholders' equity of $212.3 million is 11.62% of average assets
• Nonperforming assets to total assets 0.18% for Q2 2018

DANVILLE, Va., July 19, 2018 (GLOBE NEWSWIRE) -- American National Bankshares Inc. ("American National") AMNB, parent company of American National Bank and Trust Company, today announced net income of $5,980,000 for the second quarter 2018 compared to $4,279,000 for the second quarter of 2017, a $1,701,000 or 39.8% increase.  Basic net income per common share was $0.69 for the 2018 quarter compared to $0.50 for the 2017 quarter. Diluted net income per common share was $0.69 for the 2018 quarter compared to $0.49 for the 2017 quarter. Net income for the second quarter of 2018 produced annualized returns on average assets of 1.31%, on average equity of 11.27%, and on average tangible equity of 14.44%.

Net income for the first six months of 2018 was $11,792,000 compared to $8,342,000 for the comparable period of 2017, a $3,450,000 or 41.4% increase. Basic net income per common share was $1.36 for the 2018 period compared to $0.97 for the 2017 period. Diluted net income per common share was $1.36 for the 2018 period compared to $0.96 for the 2017 period.

Financial Performance and Overview

Jeffrey V. Haley, President and Chief Executive Officer, reported, "We are very pleased with our earnings for the second quarter of 2018. Earnings were strong, $6.0 million compared to $4.3 million for the comparable quarter of 2017, a 39.8% increase. There were three drivers of this increase: greater net interest income, lower loan loss provision, and lower corporate income taxes.

"The primary driver was higher net interest income, resulting mostly from higher loan yields and greater loan volume. Average loan volume for the 2018 quarter was up $63.7 million or 5.0% compared to the second quarter of 2017. For the second quarter of 2018 compared to second quarter of 2017, end of period loans are up $50.7 million or 3.9%.

"We expect loan growth to continue in the remainder of 2018, though likely at a reduced pace compared to 2017.

"The nature of competition for good quality loan customers has changed radically in recent quarters. We're seeing some of our competitors loosen underwriting standards and make pricing, term, and structure concessions that we believe are not consistent with our credit standards. We've made a corporate decision that there are some fundamental aspects of our credit philosophy that are not subject to negotiation or waiver. Consequently, we did not pursue a number of otherwise attractive deals.

"Deposits have grown substantially. Average interest bearing deposits for the 2018 quarter were $97.9 million or 9.3% greater than the comparable quarter of 2017. Average noninterest bearing deposits were $33.6 million or 8.7% greater than the comparable quarter of 2017. For the second quarter of 2018 compared to second quarter of 2017, end of period deposits are up $97.9 million or 6.7%.

"The market for loans and deposits is hyper-competitive. Market pressure drives yields on loans down and rates on deposits up. This puts continuing pressure on our net interest margin. Our challenge is to maintain quality growth in assets and deposits and, at the same time, protect and, hopefully, improve our net interest margin. Our margin for the 2018 quarter was 3.50%, a four basis point decrease from the 2017 quarter.

"The second driver of the earnings increase was a significant reduction in the need for loan loss provision. Provision expense in the second quarter of 2018 was $380,000 less than the comparable quarter of 2017. Our need for current provision expense was mitigated by slower growth in loans, continued extraordinary asset quality metrics, and improvements in various qualitative factors we use in computing our allowance for loan losses.

"The other driver on the earnings increase was a substantial decrease in our corporate tax rate. The tax cut, enacted in December 2017, reduced our statutory rate to 21% from 35% and our effective rate to 19.0% from 31.0%."

Haley concluded, "American National is very optimistic about our bank, our markets and our industry. We believe the key to long-term success in our business is a careful, methodical approach to intelligent risk taking. We have eleven decades of practical experience doing just that."

   

Capital

American National's capital ratios remain strong and exceed all regulatory requirements. 

For the quarter ended June 30, 2018, average shareholders' equity was 11.62% of average assets, compared to 11.91% for the quarter ended June 30, 2017.

Book value per common share was $24.50 at June 30, 2018, compared to $23.96 at June 30, 2017.

Tangible book value per common share was $19.34 at June 30, 2018, compared to $18.72 at June 30, 2017.

Credit Quality Measurements

Non-performing assets represented 0.18% of total assets at June 30, 2018, compared to 0.31% at June 30, 2017. 

Annualized net charge offs to average loans were one basis point (0.01%) for the second quarter compared to net recoveries of six basis points (0.06%) for the same quarter in 2017.

Other real estate owned was $1,124,000 compared to $1,686,000 at June 30, 2017, a decrease of $562,000 or 33.3%.

Acquisition Accounting Financial Impact

The acquisition accounting adjustments related to our two recent acquisitions have had and continue to have a positive impact on net interest income and income before income tax.  The impact of these adjustments is summarized below (dollars in thousands):

	For the quarter ended June 30,		2018			2017
	Net Interest Income		$	377		$	595
	Income Before Income Taxes		$	300		$	392
	For the six months ended June 30,			2018			2017
	Net Interest Income		$	804		$	1,029
	Income Before Income Taxes		$	650		$	661

The second quarter of 2018 includes $231,000 in cash basis accretion income related to the early payoff of several acquired loans, compared to $209,000 for the comparable quarter of 2017.

Net Interest Income

Net interest income before the provision for loan losses increased to $14,788,000 in the second quarter of 2018 from $13,912,000 in the second quarter of 2017, an increase of $876,000 or 6.3%.  

For the 2018 quarter, the net interest margin was 3.50% compared to 3.54% for the same quarter in 2017, a decrease of four basis points (0.04%).  The decrease in net interest margin related mostly to increases in the cost of deposits.

Provision for Loan Losses and Allowance for Loan Losses

Provision expense for the second quarter of 2018 was a $30,000 credit compared to a $350,000 expense for the second quarter of 2017. The second quarter 2018 credit provision was related to an adjustment on the specific reserve for an impaired loan.

The allowance for loan losses as a percentage of total loans was 1.01% at June 30, 2018 compared to 1.06% at June 30, 2017.

There was growth in loans outstanding in the second quarter 2018, a net of $18.2 million or 1.4%. The need for additions to the allowance for loan losses was mitigated by improvement in various qualitative factors used in the determination of the allowance, notably national and local economic conditions, and continued favorable asset quality metrics.

Noninterest Income 

Noninterest income totaled $3,563,000 in the second quarter of 2018, compared with $3,348,000 in the second quarter of 2017, an increase of $215,000 or 6.4%.  Most income categories improved compared to the prior year quarter. Income from Small Business Investment Companies improved $165,000, as a result of a distribution from one of our investments. This income category is inherently volatile and unpredictable.

Noninterest Expense

Noninterest expense totaled $11,002,000 in the second quarter of 2018, compared to $10,711,000 in the second quarter of 2017, an increase of $291,000 or 2.7%. 

Most of the increase was related to salaries, which increased $362,000 or 7.6%.  The change was driven by normal payroll and compensation related increases.

Income Taxes

Income tax expense was favorably impacted by the December 2017 change in corporate tax rates. The effective tax rate for the second quarter of 2018 was 19.0%, compared to 31.0% for the second quarter of 2017. The 2018 quarter was also favorably impacted by the exercise of stock options, which generated a tax benefit of $95,000.

About American National

American National is a multi-state bank holding company with total assets of approximately $1.8 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving Virginia and North Carolina with 26 banking offices and two loan production offices. American National Bank also manages an additional $837 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about the company and the bank is available on the bank's website at www.amnb.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws. Certain of the statements involve significant risks and uncertainties. The statements herein are based on certain assumptions and analyses by American National and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies or guidelines; significant changes in the economic scenario; significant changes in regulatory requirements or laws; significant changes in securities markets; changes in technology and information security; and changes regarding acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in American National's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission.  American National does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Contact:	William W. Traynham, Chief Financial Officer
	434-773-2242
	traynhamw@amnb.com

American National Bankshares Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Unaudited
		June 30
ASSETS			2018				2017
Cash and due from banks		$	24,042			$	23,765
Interest-bearing deposits in other banks			9,300				62,164
Equity securities, at fair value			2,177				-
Securities available for sale, at fair value			341,247				280,503
Restricted stock, at cost			5,463				5,501
Loans held for sale			2,296				2,379
Loans			1,339,379				1,288,693
Less allowance for loan losses			(13,508	)			(13,632	)
Net Loans			1,325,871				1,275,061
Premises and equipment, net			25,879				26,265
Other real estate owned, net			1,124				1,686
Goodwill			43,872				43,872
Core deposit intangibles, net			1,037				1,351
Bank owned life insurance			18,674				18,381
Accrued interest receivable and other assets			23,549				23,545
Total assets		$	1,824,531			$	1,764,473
Liabilities
Demand deposits -- noninterest-bearing		$	420,795			$	390,603
Demand deposits -- interest-bearing			251,056				218,714
Money market deposits			383,963				339,106
Savings deposits			132,839				125,237
Time deposits			372,093				389,181
Total deposits			1,560,746				1,462,841
Short-term borrowings:
Customer repurchase agreements			6,776				48,282
Other short-term borrowings			5,500				-
Long-term borrowings			-				9,991
Junior subordinated debt			27,876				27,775
Accrued interest payable and other liabilities			10,285				8,531
Total liabilities			1,611,183				1,557,420
Shareholders' equity
Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding			-				-
Common stock, $1 par, 20,000,000 shares authorized, 8,708,127 shares outstanding at June 30, 2018 and 8,642,913 shares outstanding at June 30, 2017			8,654				8,595
Capital in excess of par value			77,496				75,691
Retained earnings			135,108				123,795
Accumulated other comprehensive loss, net			(7,910	)			(1,028	)
Total shareholders' equity			213,348				207,053
Total liabilities and shareholders' equity		$	1,824,531			$	1,764,473

American National Bankshares Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
Unaudited
		Three Months Ended							Six Months Ended
		June 30							June 30
			2018				2017			2018				2017
Interest and Dividend Income:
Interest and fees on loans		$	14,766			$	13,752		$	29,423			$	26,456
Interest on federal funds sold			-				-			-				-
Interest and dividends on securities:
Taxable			1,540				1,133			2,864				2,287
Tax-exempt			423				509			842				1,144
Dividends			78				84			158				163
Other interest income			185				125			373				234
Total interest and dividend income			16,992				15,603			33,660				30,284
Interest Expense:
Interest on deposits			1,873				1,352			3,698				2,552
Interest on short-term borrowings			2				14			12				42
Interest on long-term borrowings			-				81			-				161
Interest on junior subordinated debt			329				244			619				483
Total interest expense			2,204				1,691			4,329				3,238
Net Interest Income			14,788				13,912			29,331				27,046
Provision for loan losses			(30	)			350			(74	)			650
Net Interest Income After Provision for Loan Losses			14,818				13,562			29,405				26,396
Noninterest Income:
Trust fees			945				908			1,874				1,820
Service charges on deposit accounts			592				607			1,204				1,196
Other fees and commissions			679				627			1,321				1,234
Mortgage banking income			491				462			941				991
Securities gains, net			289				331			410				590
Brokerage fees			209				192			431				384
Income from Small Business Investment Companies			171				6			326				32
Other			187				215			389				372
Total noninterest income			3,563				3,348			6,896				6,619
Noninterest Expense:
Salaries			5,095				4,733			10,092				9,532
Employee benefits			1,111				1,061			2,286				2,181
Occupancy and equipment			1,100				1,148			2,228				2,216
FDIC assessment			132				134			278				263
Bank franchise tax			291				263			572				519
Core deposit intangible amortization			77				203			154				368
Data processing			467				502			889				989
Software			354				271			659				550
Other real estate owned, net			25				68			55				111
Other			2,350				2,328			4,491				4,423
Total noninterest expense			11,002				10,711			21,704				21,152
Income Before Income Taxes			7,379				6,199			14,597				11,863
Income Taxes			1,399				1,920			2,805				3,521
Net Income		$	5,980			$	4,279		$	11,792			$	8,342
Net Income Per Common Share:
Basic		$	0.69			$	0.50		$	1.36			$	0.97
Diluted		$	0.69			$	0.49		$	1.36			$	0.96
Average Common Shares Outstanding:
Basic			8,692,107				8,640,648			8,680,739				8,636,954
Diluted			8,704,726				8,659,165			8,695,860				8,655,173

American National Bankshares Inc.
Financial Highlights
Unaudited
(Dollars in thousands, except per share data)
				2nd Qtr				1st Qtr				2nd Qtr					YTD				YTD
					2018				2018				2017					2018				2017
EARNINGS
Interest income				$	16,992			$	16,668			$	15,603				$	33,660			$	30,284
Interest expense					2,204				2,125				1,691					4,329				3,238
Net interest income					14,788				14,543				13,912					29,331				27,046
Provision for loan losses					(30	)			(44	)			350					(74	)			650
Noninterest income					3,563				3,333				3,348					6,896				6,619
Noninterest expense					11,002				10,702				10,711					21,704				21,152
Income taxes					1,399				1,406				1,920					2,805				3,521
Net income					5,980				5,812				4,279					11,792				8,342
PER COMMON SHARE
Income per share - basic				$	0.69			$	0.67			$	0.50				$	1.36			$	0.97
Income per share - diluted					0.69				0.67				0.49					1.36				0.96
Cash dividends paid					0.25				0.25				0.24					0.50				0.48
Book value per share					24.50				24.19				23.96					24.50				23.96
Book value per share - tangible (a)					19.34				19.00				18.72					19.34				18.72
Closing market price					40.00				37.60				36.95					40.00				36.95
FINANCIAL RATIOS
Return on average assets					1.31		%		1.28		%		0.99		%			1.29		%		0.97		%
Return on average equity					11.27				11.10				8.28					11.19				8.13
Return on average tangible equity (b)					14.44				14.29				10.93					14.37				10.75
Average equity to average assets					11.62				11.52				11.91					11.57				11.94
Tangible equity to tangible assets (a)					9.46				9.30				9.41					9.46				9.41
Net interest margin, taxable equivalent					3.50				3.46				3.54					3.48				3.49
Efficiency ratio (c)					60.38				59.79				61.76					60.09				62.35
Effective tax rate					18.96				19.48				30.97					19.22				29.68
PERIOD-END BALANCES
Securities				$	348,887			$	317,889			$	286,004				$	348,887			$	286,004
Loans held for sale					2,296				1,792				2,379					2,296				2,379
Loans, net of unearned income					1,339,379				1,321,221				1,288,693					1,339,379				1,288,693
Goodwill and other intangibles					44,909				44,986				45,223					44,909				45,223
Assets					1,824,531				1,817,574				1,764,473					1,824,531				1,764,473
Assets - tangible (a)					1,779,622				1,772,588				1,719,250					1,779,622				1,719,250
Deposits					1,560,746				1,559,251				1,462,841					1,560,746				1,462,841
Customer repurchase agreements					6,776				10,466				48,282					6,776				48,282
Other short-term borrowings					5,500				-				-					5,500				-
Long-term borrowings					27,876				27,851				37,766					27,876				37,766
Shareholders' equity					213,348				209,840				207,053					213,348				207,053
Shareholders' equity - tangible (a)					168,439				164,854				161,830					168,439				161,830
AVERAGE BALANCES
Securities (d)				$	342,486			$	312,783			$	295,863				$	328,143			$	310,146
Loans held for sale					2,616				2,037				2,426					2,328				2,420
Loans, net of unearned income					1,321,812				1,338,058				1,258,346					1,329,890				1,227,127
Interest-earning assets					1,707,223				1,698,451				1,610,132					1,703,287				1,592,395
Goodwill and other intangibles					44,956				45,031				45,337					44,993				45,427
Assets					1,825,860				1,818,429				1,736,686					1,822,165				1,718,310
Assets - tangible (a)					1,780,904				1,773,398				1,691,349					1,777,172				1,672,883
Interest-bearing deposits					1,145,701				1,157,122				1,047,828					1,151,380				1,034,542
Deposits					1,565,321				1,557,149				1,433,852					1,561,258				1,413,100
Customer repurchase agreements					11,347				12,247				49,239					11,795				47,184
Other short-term borrowings					247				2,183				-					1,210				5,884
Long-term borrowings					27,861				27,836				37,748					27,848				37,733
Shareholders' equity					212,256				209,433				206,774					210,852				205,126
Shareholders' equity - tangible (a)					167,300				164,402				161,437					165,859				159,699
American National Bankshares Inc.
Financial Highlights
Unaudited
(Dollars in thousands, except per share data)
				2nd Qtr				1st Qtr				2nd Qtr					YTD				YTD
					2018				2018				2017					2018				2017
CAPITAL
Average shares outstanding - basic					8,692,107				8,669,728				8,640,648					8,680,739				8,636,954
Average shares outstanding - diluted					8,704,726				8,687,351				8,659,165					8,695,860				8,655,173
ALLOWANCE FOR LOAN LOSSES
Beginning balance				$	13,575			$	13,603			$	13,108				$	13,603			$	12,801
Provision for loan losses					(30	)			(44	)			350					(74	)			650
Charge-offs					(130	)			(44	)			(85	)				(174	)			(134	)
Recoveries					93				60				259					153				315
Ending balance				$	13,508			$	13,575			$	13,632				$	13,508			$	13,632
LOANS
Construction and land development				$	96,740			$	93,031			$	132,322				$	96,740			$	132,322
Commercial real estate					633,128				624,164				590,093					633,128				590,093
Residential real estate					207,374				207,256				211,305					207,374				211,305
Home equity					105,558				108,024				113,580					105,558				113,580
Commercial and industrial					291,454				284,257				236,418					291,454				236,418
Consumer					5,125				4,489				4,975					5,125				4,975
Total				$	1,339,379			$	1,321,221			$	1,288,693				$	1,339,379			$	1,288,693
NONPERFORMING ASSETS AT PERIOD-END
Nonperforming loans:
90 days past due and accruing				$	229			$	273			$	1,611				$	229			$	1,611
Nonaccrual					1,861				1,598				2,117					1,861				2,117
Other real estate owned					1,124				1,716				1,686					1,124				1,686
Nonperforming assets				$	3,214			$	3,587			$	5,414				$	3,214			$	5,414
ASSET QUALITY RATIOS
Allowance for loan losses to total loans					1.01		%		1.03		%		1.06		%			1.01		%		1.06		%
Allowance for loan losses to nonperforming loans					646.32				725.55				365.67					646.32				365.67
Nonperforming assets to total assets					0.18				0.20				0.31					0.18				0.31
Nonperforming loans to total loans					0.16				0.14				0.29					0.16				0.29
Annualized net charge-offs (recoveries) to average loans					0.01				0.00				(0.06	)				0.00				(0.03	)
OTHER DATA
Fiduciary assets at period-end (e) (f)				$	510,552			$	509,668			$	520,861				$	510,552			$	520,861
Retail brokerage assets at period-end (e) (f)				$	326,692			$	316,064			$	297,463				$	326,692			$	297,463
Number full-time equivalent employees (g)					323				326				328					323				328
Number of full service offices					26				26				27					26				27
Number of loan production offices					2				2				2					2				2
Number of ATM's					34				34				34					34				34
Notes:
(a) - Excludes goodwill and other intangible assets.
(b) - Excludes amortization expense, net of tax, of intangible assets.
(c) - The efficiency ratio is calculated by dividing noninterest expense excluding gains or losses on the sale of OREO by net
interest income including tax equivalent income on nontaxable loans and securities and noninterest income and excluding (i) gains or
losses on securities and (ii) gains or losses on sale of premises and equipment.
(d) - Average does not include unrealized gains and losses.
(e) - Market value.
(f) - Assets are not owned by the Company and are not reflected in the consolidated balance sheet.
(g) - Average for quarter.

 

Net Interest Income Analysis
For the Three Months Ended June 30, 2018 and 2017
(Dollars in thousands)
Unaudited
										Interest
				Average Balance						Income/Expense						Yield/Rate
				2018			2017			2018			2017			2018		2017
Loans:
	Commercial			$	267,996		$	229,690		$	2,652		$	2,241		3.97	%	3.91	%
	Real estate				1,052,105			1,026,010			12,087			11,502		4.60		4.48
	Consumer				4,327			5,072			77			89		7.14		7.04
		Total loans			1,324,428			1,260,772			14,816			13,832		4.48		4.39
Securities:
	Federal agencies & GSEs				127,033			96,339			707			454		2.23		1.89
	Mortgage-backed & CMOs				108,789			80,003			609			412		2.24		2.06
	State and municipal				91,636			104,115			653			938		2.85		3.60
	Other				15,028			15,406			176			179		4.68		4.65
		Total securities			342,486			295,863			2,145			1,983		2.51		2.68
Deposits in other banks					40,309			53,497			185			125		1.84		0.94
	Total interest-earning assets				1,707,223			1,610,132			17,146			15,940		4.02		3.96
Non-earning assets					118,637			126,554
		Total assets		$	1,825,860		$	1,736,686
Deposits:
	Demand			$	246,493		$	219,743			13			11		0.02		0.02
	Money market				395,135			322,737			802			342		0.81		0.43
	Savings				132,190			125,134			10			9		0.03		0.03
	Time				371,883			380,214			1,048			990		1.13		1.04
		Total deposits			1,145,701			1,047,828			1,873			1,352		0.66		0.52
Customer repurchase agreements					11,347			49,239			1			14		0.04		0.11
Other short-term borrowings					247			-			1			-		1.62		-
Long-term borrowings					27,861			37,748			329			325		4.72		3.44
	Total interest-bearing liabilities				1,185,156			1,134,815			2,204			1,691		0.75		0.60
Noninterest bearing demand deposits					419,620			386,024
Other liabilities					8,828			9,073
Shareholders' equity					212,256			206,774
	Total liabilities and shareholders' equity			$	1,825,860		$	1,736,686
Interest rate spread																3.27	%	3.36	%
Net interest margin																3.50	%	3.54	%
Net interest income (taxable equivalent basis)											14,942			14,249
Less: Taxable equivalent adjustment (a)											154			337
Net interest income										$	14,788		$	13,912
Notes:
(a) - Calculated using 21% and 35% statutory tax rate in 2018 and 2017, respectively, due to tax rate change.

 

Net Interest Income Analysis
For the Six Months Ended June 30, 2018 and 2017
(Dollars in thousands)
Unaudited
										Interest
				Average Balance						Income/Expense						Yield/Rate
				2018			2017			2018			2017			2018		2017
Loans:
	Commercial			$	263,300		$	224,833		$	5,096		$	4,294		3.90	%	3.85	%
	Real estate				1,064,605			999,484			24,277			22,126		4.56		4.43
	Consumer				4,313			5,230			153			181		7.15		6.98
		Total loans			1,332,218			1,229,547			29,526			26,601		4.44		4.33
Securities:
	Federal agencies & GSEs				115,182			96,651			1,224			896		2.13		1.85
	Mortgage-backed & CMOs				108,808			79,033			1,208			825		2.22		2.09
	State and municipal				89,000			117,681			1,287			2,090		2.89		3.55
	Other				15,153			16,781			351			365		4.63		4.35
		Total securities			328,143			310,146			4,070			4,176		2.48		2.69
Deposits in other banks					42,926			52,702			373			234		1.75		0.90
	Total interest-earning assets				1,703,287			1,592,395			33,969			31,011		3.99		3.90
Non-earning assets					118,878			125,915
		Total assets		$	1,822,165		$	1,718,310
Deposits:
	Demand			$	239,477		$	217,847			24			21		0.02		0.02
	Money market				402,612			314,235			1,585			583		0.79		0.37
	Savings				131,453			124,694			20			19		0.03		0.03
	Time				377,838			377,766			2,069			1,929		1.10		1.03
		Total deposits			1,151,380			1,034,542			3,698			2,552		0.65		0.50
Customer repurchase agreements					11,795			47,184			2			15		0.03		0.06
Other short-term borrowings					1,210			5,884			10			27		1.65		0.92
Long-term borrowings					27,848			37,733			619			644		4.45		3.41
	Total interest-bearing liabilities				1,192,233			1,125,343			4,329			3,238		0.73		0.58
Noninterest bearing demand deposits					409,878			378,558
Other liabilities					9,202			9,283
Shareholders' equity					210,852			205,126
	Total liabilities and shareholders' equity			$	1,822,165		$	1,718,310
Interest rate spread																3.26	%	3.32	%
Net interest margin																3.48	%	3.49	%
Net interest income (taxable equivalent basis)											29,640			27,773
Less: Taxable equivalent adjustment (a)											309			727
Net interest income										$	29,331		$	27,046
Notes:
(a) - Calculated using 21% and 35% statutory tax rate in 2018 and 2017, respectively, due to tax rate change.