8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 22, 2018

COUNTY BANCORP, INC.

(Exact name of Registrant as Specified in Its Charter)

Wisconsin	001-36808	39-1850431
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2400 South 44th Street, Manitowoc, WI		54221
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (920) 686-9998

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b– 2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On October 22, 2018, County Bancorp, Inc. issued a press release setting forth certain information concerning its results of operations for the quarter ended September 30, 2018.  A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to liability under that Section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

d. Exhibits

Exhibit Number	Description
99.1	Press release of County Bancorp, Inc. dated October 22, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	COUNTY BANCORP, INC.
Date:  October 22, 2018	By:	/s/ Mark A. Miller
		Mark A. Miller
		Secretary

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

COUNTY BANCORP, INC. ANNOUNCES NET INCOME

OF $3.5 MILLION FOR THE THIRD QUARTER OF 2018

Highlights

• Net income of $3.5 million for the third quarter of 2018

• Diluted earnings per share of $0.50 for the third quarter of 2018

• Loan growth of $21.4 million during the third quarter of 2018, an increase of 1.8%

• Gross loans serviced increased $37.9 million during the third quarter of 2018, an increase of 2.1%

Manitowoc,Wisconsin, October 22,2018–County Bancorp, Inc.(Nasdaq: ICBK), the holding company of Investors Community Bank, an agricultural and commercial bank headquartered in Manitowoc, Wisconsin, reported net income of $3.5 million, or $0.50 diluted earnings per share, for the third quarter of 2018, compared to net income of $3.9 million, or $0.55 diluted earnings per share, for the second quarter of 2018 and $3.6 million, or $0.52 diluted earnings per share, for the third quarter of 2017.  This represents a return on average assets of 0.94% for the quarter ended September 30, 2018, compared to 1.04% for the quarter ended June 30, 2018 and 1.11% for the quarter ended September 30, 2017.

“Our financial performance this quarter was solid,” said Timothy J. Schneider, President of County Bancorp, Inc. and CEO of Investors Community Bank.  “We are starting to see some positive traction on asset repricing as reflected in the 0.21% asset yield improvement from the quarter ended June 30, 2018.  The deposit market remains competitive, with interest-bearing liability yields increasing 0.19% compared to the quarter ended June 30, 2018.  During the third quarter of 2018, we had solid loan growth of $21.4 million in on-balance sheet and $16.5 million in sold and serviced loans.”

“We expect loan growth to be balanced with our ability to grow core deposits which grew by $15.1 million during the third quarter of 2018,” stated Schneider.  “Brokered deposits, national deposits, and FHLB advances decreased by $22.6 million in that same timeframe. Our provisions for loan losses increased in the third quarter compared to the second quarter due to specific reserves on a newly added impaired agricultural loan, in addition to an increase in substandard rated credits that are not considered impaired.  This was partially offset by continued principal pay downs on impaired loans.” 

Schneider added, “We believe we are managing this challenging agriculture economy well, and we are encouraged by the announcement of a pending revision to the North American Free Trade Agreement among the U.S., Canada and Mexico, which included a pledge to curb protection for Canada’s dairy industry.  Long term, we feel this revised agreement, called the United States Mexico Canada Agreement, will have a positive impact on overall dairy prices. We continue to be diligent in monitoring our classified agricultural credits and remain committed to working through this cycle in agriculture.” 

Loans and Total Assets

Totalassets at September 30, 2018 were $1.5 billion, an increase of $117.9 million, or 8.4%, and $155.6 million, or 11.5%, over total assets as of December 31, 2017 and September 30, 2017, respectively.  Total loans were $1.2 billion at September 30, 2018, which represents a $54.0 million, or 4.6%, and $76.3 million, or 6.8%, increase over total loans at December 31, 2017 and September 30, 2017, respectively.  Loan growth in the third quarter of 2018 was $21.4 million, an increase of 1.8%, from June 30, 2018.

In addition to on-balance sheet loan growth, participated loans that we continue to service totaled $644.0 million at September 30, 2018, which is an increase of $43.4 million, or 7.2%, and $50.7 million, or 8.5%, over

participated loans that we continue to service at December 31, 2017 and September 30, 2017, respectively.  During the third quarter,participated loans that we continue to service increased $16.5 million, or 2.6%, over loans sold and serviced as of June 30, 2018.

Deposits

Total deposits at September 30, 2018 were $1.2 billion, an increase of $98.7 million, or 8.9%, and $142.7 million, or 13.4%, over total deposits as of December 31, 2017 and September 30, 2017, respectively.  Core deposit (demand deposits, money market accounts, and certificates of deposit) increased $15.1 million during the third quarter and $33.2 million during the first nine months of 2018. We continue to supplement our deposit needs with wholesale deposits, which include brokered deposits and national certificates of deposit.  Brokered deposits and national certificates of deposit at September 30, 2018 were $490.7 million, which was a decrease of $16.8 million, or 3.3%, from June 30, 2018, but was an increase of $65.7 million, or 15.5%, from December 31, 2017, and an increase of $63.3 million, or 14.8%, from September 30, 2017.

Due to our deposit growth in 2018, we have been able to decrease our FHLB borrowings by $19.1 million, or 15.7%, since December 31, 2017, and by $25.9 million, or 20.2%, since September 30, 2017.

Net Interest Income and Margin

Net interest income improved to $10.6 million for the three months ended September 30, 2018, which is a $0.3 million and $0.6 million increase from the three months ended June 30, 2018 and the three months ended September 30, 2017, respectively, primarily due to growth in loans and securities available for sale.

For the nine months ended September 30, 2018, net interest income improved 8.7% to $31.2 million from $28.7 million for the nine months ended September 30, 2017.

Netinterestmargin was to 2.89%for the three months ended September 30, 2018, which is an increase from2.87% for the three months ended June 30, 2018, and a decrease from 3.17% for the three months ended September 30, 2017.  Despite asset yields improving over the linked quarter, only a slight improvement was realized in net interest margin due to continued increased deposits costs and the addition of $30 million of junior subordinated debentures during the second quarter of 2018. Year-over-year net interest margin decreased by twenty 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, which was partially offset by a twenty-nine basis point improvement in loan yields.

Yields on interest bearing assets increased by 0.21% between the third quarter of 2018 and the second quarter of 2018 while the cost of interest bearing liabilities increased by 0.19% between the same periods.  For the nine months ended September 30, 2018, yields on interest bearing assets increased by 0.18%, and the cost of interest bearing liabilities increased by 0.44% compared to the nine months ended September 30, 2017.

Non-Interest Income and Expense

Non-interest income for the three months ended September 30, 2018 decreased by $0.1 million, or 6.9%, to $2.2 million compared to the three months ended June 30, 2018, primarily the result of decreased loan servicing rights related to the pay-downs of loans being serviced.

Non-interest income for the three months ended September 30, 2018 increased $0.1 million, or 3.4%, to $2.2 million compared to $2.1 million for the three months ended September 30, 2017.  For the nine months ended September 30, 2018, non-interest income increased $0.9 million, or 15.1%, to $6.5 million from the nine months ended September 30, 2017.  Both the quarterly and year-to-date increases are directly related to increases in loan servicing fees which was the result of higher volumes of loans being serviced.

Non-interest expense for the three months ended September 30, 2018 increased by $0.1 million, or 1.2%, to $7.0 million compared to the three months ended June 30, 2018, primarily due to a one time employment contract paymentof $0.2 millionwhich was partially offset by fewer OREO writedownsand expenses.

Non-interest expense for the quarter ended September 30, 2018 increased $0.7 million, or 11.6%, to $7.0 million from $6.3 million for the quarter ended September 30, 2017.  For the nine months ended September 30, 2018, non-interest expense increased $1.9 million, or 10.2%, to $20.7 million compared to the nine months ended September 30, 2017.  These increases were primarily related to increases in employee compensation and benefits in connection with six new positions, which was partially offset by decreases in professional fees.  In addition, increased occupancy and information processing expenses are directly related to the purchase of our new corporate headquarters in 2018.  

Asset Quality

Non-performing assets as a percent of total assets increased to 2.36% at September 30, 2018, from 2.30% at June 30, 2018 and 1.43% at September 30, 2017.  At September 30, 2018, non-performing assets were $35.7 million, up from $34.9 million at June 30, 2018 and $19.4 million at September 30, 2017. During the third quarter of 2018, non-performing loans increased $1.6 million due to two agricultural relationships and two commercial relationships being put on non-accrual status.  Total impairment on these non-performing loans totaled $99,000 and was included in the allowance for loan losses.  One property was sold out of OREO and one Farm Service Agency guarantee was received resulting in a decrease of $0.8 million in OREO during the quarter ended September 30, 2018.

A provision for loan losses of $1.0 million was recorded for the three months ended September 30, 2018 compared to a provision of $0.5 million and $33 thousand for the three months ended June 30, 2018 and September 30, 2017, respectively.  The increased provision is directly related to the $24.5 million and $48.2 million increase in substandard performing and substandard impaired loans from June 30, 2018 and September 30, 2017, respectively.

For the nine months ended September 30, 2018, the provision for loan losses was $1.6 million compared to $2.3 million for the nine months ended September 30, 2017.  The decrease in provision expense year-over-year is primarily the result of a $1.2 million recovery that took place during the first quarter of 2018.

Conference Call

County Bancorp, Inc. will host an earnings call today at 3:00 p.m., CDT; conducted by Mr. Schneider and Glen L. Stiteley, CFO.  Shareholders, analysts, and other interested parties are invited to join the call via telephone by dialing (888) 317-6016 or visiting County’s website at http://www.investorscommunitybank.com and then clicking on the link “Investor Relations.”  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 October 22, 2019, by visiting the Company’s website at http://www.investorscommunitybank.com and clicking on the link “Investor Relations.”

AboutCounty 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-LookingStatements

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 County Bancorp, Inc.’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)	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
	(dollars in thousands, except per share data)
Period-End Balance Sheet:
Assets
Cash and cash equivalents	$	49,996		$	81,044		$	90,676		$	66,771		$	71,795
Securities available for sale, at fair value		190,185			187,505			141,360			126,030			107,242
Loans held for sale		13,770			11,468			6,407			6,575			2,054
Agricultural loans		714,310			702,426			698,106			686,430			675,856
Commercial loans		417,146			407,609			406,096			407,036			397,989
Multi-family real estate loans		66,403			65,713			54,514			49,133			45,943
Residential real estate loans		4,965			5,437			5,512			6,005			6,584
Installment and consumer other		113			339			297			347			229
Total loans		1,202,937			1,181,524			1,164,525			1,148,951			1,126,601
Allowance for loan losses		(16,143	)		(15,129	)		(14,612	)		(13,247	)		(13,625	)
Net loans		1,186,794			1,166,395			1,149,913			1,135,704			1,112,976
Other assets		74,223			72,465			71,901			61,965			65,258
Total Assets	$	1,514,968		$	1,518,877		$	1,460,257		$	1,397,045		$	1,359,325
Liabilities and Shareholders' Equity
Demand deposits	$	103,862		$	95,459		$	101,167		$	125,584		$	118,815
NOW accounts and interest checking		46,811			51,674			48,212			51,613			46,178
Savings		6,616			6,833			6,189			6,751			6,402
Money market accounts		208,233			204,332			199,834			199,118			169,612
Time deposits		352,531			344,619			314,766			301,760			297,617
Brokered deposits		317,291			323,561			319,692			282,616			281,205
National time deposits		173,440			183,953			182,530			142,635			146,265
Total deposits		1,208,784			1,210,431			1,172,390			1,110,077			1,066,094
FHLB advances		102,400			108,200			120,500			121,500			128,300
Subordinated debentures		44,663			44,725			15,540			15,523			15,506
Other liabilities		11,134			9,439			9,013			8,959			9,696
Total Liabilities		1,366,981			1,372,795			1,317,443			1,256,059			1,219,596
Shareholders' equity		147,987			146,082			142,814			140,986			139,729
Total Liabilities and Shareholders'            Equity	$	1,514,968		$	1,518,877		$	1,460,257		$	1,397,045		$	1,359,325
Stock Price Information:
High - Year-to-date	$	33.76		$	33.76		$	33.76		$	35.89		$	35.89
Low - Year-to-date	$	24.29		$	25.72		$	26.61		$	22.73		$	22.73
Market price - Quarter-end	$	25.10		$	27.50		$	29.21		$	29.76		$	30.05
Book value per share	$	20.91		$	20.63		$	20.17		$	19.93		$	19.79
Tangible book value per share (1)	$	20.07		$	19.77		$	19.29		$	19.04		$	18.87
Average diluted shares of common stock         quarter-to-date		6,757,945			6,769,936			6,768,965			6,768,939			6,757,648
Common shares outstanding		6,694,230			6,693,447			6,684,923			6,673,381			6,657,601

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

	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
	(dollars in thousands)
Loans by risk category:
Sound/Acceptable/Satisfactory/         Low Satisfactory	$	901,643		$	896,509		$	891,062		$	873,801		$	871,513
Watch		171,890			186,399			185,179			183,022			161,425
Special Mention		11,036			4,783			5,636			8,902			23,456
Substandard Performing		61,851			46,751			45,261			50,224			56,247
Substandard Impaired		56,517			47,082			37,387			33,002			13,960
Total loans	$	1,202,937		$	1,181,524		$	1,164,525		$	1,148,951		$	1,126,601
Non-Performing Assets:
Nonaccrual loans	$	27,881		$	26,305		$	17,746		$	11,559		$	12,862
Other real estate owned (2)		7,851			8,607			8,982			4,565			6,576
Total non-performing assets	$	35,732		$	34,912		$	26,728		$	16,124		$	19,438
Restructured loans not on nonaccrual	$	11,863		$	11,173		$	10,488		$	9,019		$	8,087
Non-performing assets as a % of total assets		2.36	%		2.30	%		1.83	%		1.15	%		1.43	%
Allowance for loan losses as a % of    nonaccrual loans		57.90	%		57.51	%		82.34	%		114.60	%		105.93	%
Allowance for loan losses as a % of total    loans		1.34	%		1.28	%		1.25	%		1.15	%		1.21	%
Net charge-offs (recoveries) quarter-to-date	$	(21	)	$	16		$	(1,268	)	$	390		$	(89	)
Provision for loan loss quarter-to-date	$	993		$	533		$	97		$	12		$	33

(2) Does not include $0.4 million of bank property transferred from premises and equipment which is not considered a non-performing asset.

	For the Three Months Ended
	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
	(dollars in thousands, except per share data)
Selected Income Statement Data:
Interest and Dividend Income
Loans, including fees	$	15,113		$	14,366		$	13,691		$	13,443		$	13,070
Taxable securities		945			982			632			462			461
Tax-exempt securities		344			14			157			88			82
Federal funds sold and other		249			401			213			256			102
Total interest and dividend income		16,651			15,763			14,693			14,249			13,715
Interest Expense
Deposits		4,980			4,600			3,796			3,464			3,108
FHLB advances and other borrowed    funds		411			487			484			481			511
Subordinated debentures		656			338			143			135			135
Total interest expense		6,047			5,425			4,423			4,080			3,754
Net interest income		10,604			10,338			10,270			10,169			9,961
Provision for loan losses		993			533			97			12			33
Net interest income after provision for    loan losses		9,611			9,805			10,173			10,157			9,928
Non-Interest Income
Services charges		394			445			365			332			350
Gain on sale of loans, net		41			45			32			22			47
Loan servicing fees		1,521			1,486			1,452			1,483			1,469
Loan servicing rights		(46	)		127			10			(37	)		94
Income on OREO		96			45			32			16			20
Other		151			168			149			178			107
Total non-interest income		2,157			2,316			2,040			1,994			2,087
Non-Interest Expense
Employee compensation and benefits		4,394			4,114			4,218			3,702			3,845
Occupancy		332			278			204			135			162
Information processing		529			529			465			423			450
Professional fees		351			359			315			406			414
Business development		258			260			299			210			275
OREO expenses		46			152			140			17			50
Writedown of OREO		81			104			-			820			8
Net loss (gain) on OREO		(28	)		(149	)		-			10			39
Depreciation and amortization		302			324			314			319			323
Other		758			966			830			1,123			725
Total non-interest expense		7,023			6,937			6,785			7,165			6,291
Income before income taxes		4,745			5,184			5,428			4,986			5,724
Income tax expense		1,228			1,334			1,374			2,855			2,120
NET INCOME	$	3,517		$	3,850		$	4,054		$	2,131		$	3,604
Other Data:
Return on average assets		0.94	%		1.04	%		1.15	%		0.62	%		1.11	%
Return on average shareholders' equity		9.51	%		10.63	%		11.62	%		6.05	%		10.36	%
Return on average common shareholders'        equity (1)		9.75	%		10.96	%		12.04	%		6.12	%		10.72	%
Efficiency ratio (1)		54.62	%		55.18	%		55.12	%		52.11	%		51.83	%
Tangible common equity to tangible        assets (1)		8.90	%		8.75	%		8.87	%		9.13	%		9.29	%
Per Common Share Data:
Basic	$	0.51		$	0.56		$	0.59		$	0.31		$	0.53
Diluted	$	0.50		$	0.55		$	0.58		$	0.30		$	0.52
Dividends declared	$	0.07		$	0.07		$	0.07		$	0.06		$	0.06

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

	For the Three Months Ended
Non-GAAP Financial Measures:	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
	(dollars in thousands)
Return on average common shareholders'    equity reconciliation:
Return on average shareholders' equity		9.51	%		10.63	%		11.62	%		6.05	%		10.36	%
Effect of excluding average preferred            shareholders' equity		0.24	%		0.33	%		0.42	%		0.07	%		0.36	%
Return on average common shareholders'            equity		9.75	%		10.96	%		12.04	%		6.12	%		10.72	%
Efficiency ratio GAAP to non-GAAP    reconciliation:
Non-interest expense	$	7,023		$	6,937		$	6,785		$	7,165		$	6,291
Less: net gain (loss) on sales and write-       downs of OREO		(53	)		45			-			(830	)		(47	)
Adjusted non-interest expense           (non-GAAP)	$	6,970		$	6,982		$	6,785		$	6,335		$	6,244
Net interest income	$	10,604		$	10,338		$	10,270		$	10,169		$	9,961
Non-interest income		2,157			2,316			2,040			1,994			2,087
Less: net gain on sales of securities		-			-			-			(6	)		-
Operating revenue	$	12,761		$	12,654		$	12,310		$	12,157		$	12,048
Efficiency ratio		54.62	%		55.18	%		55.12	%		52.11	%		51.83	%
	September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
	(dollars in thousands, except share and per share data)
Tangible book value per share and    tangible common equity to tangible    assets reconciliation:
Common equity	$	139,987		$	138,082		$	134,814		$	132,986		$	131,729
Less: Goodwill		5,038			5,038			5,038			5,038			5,038
Less: Core deposit intangible, net of        amortization		603			701			806			919			1,038
Tangible common equity (non-GAAP)	$	134,346		$	132,343		$	128,970		$	127,029		$	125,653
Common shares outstanding		6,694,230			6,693,447			6,684,923			6,673,381			6,657,601
Tangible book value per share	$	20.07		$	19.77		$	19.29		$	19.04		$	18.87
Total assets	$	1,514,968		$	1,518,877		$	1,460,257		$	1,397,045		$	1,359,325
Less: Goodwill		5,038			5,038			5,038			5,038			5,038
Less: Core deposit intangible, net of        amortization		603			701			806			919			1,038
Tangible assets (non-GAAP)	$	1,509,327		$	1,513,138		$	1,454,413		$	1,391,088		$	1,353,249
Tangible common equity to tangible assets		8.90	%		8.75	%		8.87	%		9.13	%		9.29	%

	For the Three Months Ended
	September 30, 2018								September 30, 2017
	Average Balance (1)			Income/ Expense		Yields/ Rates			Average Balance (1)			Income/ Expense		Yields/ Rates
	(dollars in thousands)
Assets
Investment securities	$	189,448		$	1,289		2.72	%	$	111,306		$	543		1.95	%
Loans (2)		1,204,122			15,113		5.02	%		1,104,259			13,070		4.73	%
Interest bearing deposits due from other    banks		62,560			249		1.59	%		41,187			102		0.99	%
Total interest-earning assets	$	1,456,130		$	16,651		4.57	%	$	1,256,752		$	13,715		4.37	%
Allowance for loan losses		(15,445	)							(13,517	)
Other assets		58,921								59,186
Total assets	$	1,499,606							$	1,302,421
Liabilities
Savings, NOW, money market, interest    checking	$	276,468			907		1.31	%	$	224,819			387		0.69	%
Time deposits		830,168			4,073		1.96	%		679,324			2,721		1.60	%
Total interest-bearing deposits	$	1,106,636		$	4,980		1.80	%	$	904,143		$	3,108		1.38	%
Other borrowings		839			10		4.61	%		1,384			20		5.82	%
FHLB advances		92,443			401		1.74	%		136,561			491		1.44	%
Junior subordinated debentures		44,659			656		5.88	%		15,506			135		3.48	%
Total interest-bearing liabilities	$	1,244,577		$	6,047		1.94	%	$	1,057,594		$	3,754		1.42	%
Non-interest-bearing deposits		97,947								96,717
Other liabilities		9,136								8,995
Total liabilities	$	1,351,660							$	1,163,306
Shareholders' equity		147,946								139,115
Total liabilities and equity	$	1,499,606							$	1,302,421
Net interest income				$	10,604							$	9,961
Interest rate spread (3)							2.63	%							2.95	%
Net interest margin (4)							2.89	%							3.17	%
Ratio of interest-earning assets to interest-    bearing liabilities		1.17								1.19

(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.

	For the Nine Months Ended
	September 30, 2018								September 30, 2017
	Average Balance (1)			Income/ Expense		Yields/ Rates			Average Balance (1)			Income/ Expense		Yields/ Rates
	(dollars in thousands)
Assets
Investment securities	$	161,869		$	3,074		2.53	%	$	114,528		$	1,608		1.87	%
Loans (2)		1,188,541			43,170		4.84	%		1,070,840			36,952		4.60	%
Interest bearing deposits due from other    banks		77,190			863		1.49	%		40,800			243		0.80	%
Total interest-earning assets	$	1,427,600		$	47,107		4.40	%	$	1,226,168		$	38,803		4.22	%
Allowance for loan losses		(14,712	)							(13,575	)
Other assets		55,963								54,906
Total assets	$	1,468,851							$	1,267,499
Liabilities
Savings, NOW, money market, interest    checking	$	279,820			2,355		1.12	%	$	239,365			1,113		0.62	%
Time deposits		797,459			11,021		1.84	%		644,472			7,238		1.50	%
Total interest-bearing deposits	$	1,077,279		$	13,376		1.66	%	$	883,837		$	8,351		1.26	%
Other borrowings		1,094			40		4.86	%		1,618			71		5.84	%
FHLB advances		110,009			1,342		1.63	%		128,093			1,285		1.34	%
Junior subordinated debentures		28,682			1,137		5.29	%		15,482			380		3.27	%
Total interest-bearing liabilities	$	1,217,064		$	15,895		1.74	%	$	1,029,030		$	10,087		1.30	%
Non-interest-bearing deposits		98,393								93,323
Other liabilities		8,415								8,665
Total liabilities	$	1,323,872							$	1,131,018
Shareholders' equity		144,979								136,481
Total liabilities and equity	$	1,468,851							$	1,267,499
Net interest income				$	31,212							$	28,716
Interest rate spread (3)							2.66	%							2.92	%
Net interest margin (4)							2.92	%							3.12	%
Ratio of interest-earning assets to interest-    bearing liabilities		1.17								1.19

(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.