Capital Bancorp, Inc. Posts Broad Based Growth Leading to a Sharp Profitability Increase
Third Quarter 2024 Results
Net Income of $8.7 million, or $0.62 per share
Net Income, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), of $9.2 million, or $0.66 per share
Tangible Book Value Per Share(1) of $20.13, increased 4.5%, or $0.87 as compared to $19.26 (2Q 2024).
Net Interest Income increased $1.3 million, or 3.5% (not annualized), from 2Q 2024
Net Interest Margin ("NIM") decreased to 6.41% as compared to 6.46% (2Q 2024)
Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)(1) increased to 4.08% as compared to 4.00% (2Q 2024)
Loan Growth of $85.9 million, or 16.9% annualized for 3Q 2024
Deposit Growth of $85.8 million, or 16.2% annualized for 3Q 2024; Noninterest bearing deposits increased $33.5 million, or 19.5% annualized from 2Q 2024
Cash dividend of $0.10 per share declared
ROCKVILLE, Md., Oct. 28, 2024 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ:CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $8.7 million, or $0.62 per diluted share, for the third quarter 2024, compared to net income of $8.2 million, or $0.59 per diluted share, for the second quarter 2024, and $9.8 million, or $0.70 per diluted share, for the third quarter 2023. Net income, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), was $9.2 million, or $0.66 per diluted share, for the third quarter 2024, compared to $8.3 million, or $0.59 per diluted share, for the second quarter 2024.
The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on November 20, 2024 to shareholders of record on November 4, 2024.
"We continue to benefit from our diversified business which is driving growth across our platforms," said Ed Barry, Chief Executive Officer of the Company and the Bank. "With the changing interest rate environment, our core margin has inflected. The acquisition of Integrated Financial Holdings, Inc. is now complete and we are now focused on integration and unlocking opportunity out of their complementary lines of business."
"The Bank continues to execute on its smart growth strategy as reflected by the impressive year-to-date and third quarter growth in commercial bank loan balances and deposits, both interest bearing and non-interest bearing. Our diversified profit centers complement one another and our recent acquisition of IFH adds an additional high potential opportunity for growth," said Steven J Schwartz, Chairman of the Company. "In addition, our quarter-over-quarter 4.5% increase in tangible book value (with all investment securities fully marked), together with stable asset quality, ROA and ROE metrics, offer clear evidence of our franchise durability."
(1) Reconciliations of the non–U.S. generally accepted accounting principles ("GAAP") measures are set forth in the Appendix at the end of this press release.
Acquisition of Integrated Financial Holdings, Inc.On October 1, 2024, the Company completed its previously announced merger with Integrated Financial Holdings, Inc. ("IFHI"). Pursuant to the terms of the Merger Agreement, each share of IFHI's common stock, par value $1.00 per share ("IFHI Common Stock") was converted into the right to receive (a) 1.115 shares of common stock of the Company, par value $0.01 per share ("Capital Common Stock"); and (b) $5.36 in cash per share of IFHI Common Stock held immediately prior to the Effective Time, in addition to cash in lieu of fractional shares. In addition, each stock option granted by IFHI to purchase shares of IFHI Common Stock, whether vested or unvested, outstanding immediately prior to the Effective Time, was assumed by the Company and converted into an equivalent option to purchase Capital Common Stock, with the same terms and conditions as applied to the IFHI stock option.
In the first nine months of 2024, the Company incurred pre-tax merger-related expenses of $1.3 million, including expenses totaling $0.5 million for the third quarter 2024, consistent with modeled expectations.
The following table provides a reconciliation of the Company's net income under GAAP to non-GAAP results excluding merger-related expenses.
Third Quarter 2024
Second Quarter 2024
(in thousands, except per share data)
Income Before Income Taxes
Income Tax Expense (Benefit)
Net Income
Diluted Earnings per Share
Income Before Income Taxes
Income Tax Expense
Net Income
Diluted Earnings per Share
GAAP Earnings
$
11,499
$
2,827
$
8,672
$
0.62
$
10,933
$
2,728
$
8,205
$
0.59
Add: Merger-Related Expenses
520
(37
)
557
83
21
62
Non-GAAP Earnings
$
12,019
$
2,790
$
9,229
$
0.66
$
11,016
$
2,749
$
8,267
$
0.59
Nine Months Ended September 30, 2024
(in thousands, except per share data)
Income Before Income Taxes
Income Tax Expense
Net Income
Diluted Earnings per Share
GAAP Earnings
$
31,056
$
7,617
$
23,439
$
1.69
Add: Merger-Related Expenses
1,315
158
1,157
Non-GAAP Earnings
$
32,371
$
7,775
$
24,596
$
1.77
Note: The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.
Third Quarter 2024 Highlights
Earnings Summary
Net income of $8.7 million, or $0.62 per diluted share, increased $0.5 million compared to $8.2 million, or $0.59 per diluted share, for the second quarter 2024. Net income, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), increased $0.9 million to $9.2 million, or $0.66 per diluted share, for the third quarter 2024 compared to $8.3 million, or $0.59 per diluted share, for the second quarter 2024.
Net interest income of $38.4 million increased $1.3 million, or 3.5%, compared to the second quarter 2024.
Interest income of $52.6 million increased $2.0 million, or 3.9%, over the second quarter 2024 primarily from $1.7 million in portfolio loan interest income, as growth in average balances increased $61.0 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.2 million, as average balances increased $14.0 million to $91.1 million.
Interest expense of $14.3 million increased $0.7 million, or 5.1% over the second quarter 2024 due to increases in customer money market deposits and time deposits of $0.4 million and $0.3 million, respectively. Average balances increased $27.0 million and $14.0 million, respectively.
The provision for credit losses was $3.7 million, an increase of $0.3 million from the second quarter 2024 primarily driven by unsecured credit card loan growth in the quarter. Net charge-offs totaled $2.7 million in the third quarter including $1.7 million from credit card related loans, $0.6 million from commercial real estate, and $0.4 million from commercial and industrial loans. The $0.8 million net charge-offs increase quarter over quarter includes $0.6 million from a commercial loan charge-off that was fully reserved for, and $0.2 million from higher credit card loans. At September 30, 2024, the allowance for credit losses to total loans ratio was 1.51%, down 2 basis points from the ratio at June 30, 2024.
Noninterest income of $6.6 million decreased $0.3 million as compared to the second quarter 2024 primarily due to decreased credit card fees of $0.3 million.
Noninterest expense of $29.7 million increased $0.2 million as compared to the second quarter 2024. Noninterest expense of $29.2 million, excluding merger-related expenses of $0.5 million, decreased $0.2 million as compared to the second quarter 2024. Variances include:
Advertising expense of $1.2 million decreased $0.8 million off of seasonally high second quarter levels.
Professional fees of $2.0 million increased $0.2 million primarily related to increased non-merger-related legal fees.
Other expense categories increased $0.4 million including slight increases from data and loan processing expense and operational losses.
Income tax expense of $2.8 million, or 24.6% of pre-tax income for the third quarter 2024, increased $0.1 million from $2.7 million, or 25.0% of pre-tax income for the second quarter 2024.
Balance Sheet
Total assets of $2.6 billion at September 30, 2024 increased $122.2 million, or 5.0% (not annualized), from June 30, 2024.
Cash and cash equivalents of $156.7 million at September 30, 2024 increased $20.2 million from June 30, 2024, as total deposits increased $85.8 million, and Federal Home Loan Bank advances increased $20.0 million, partially offset by an increase in total portfolio loans of $85.9 million.
Total portfolio loans of $2.1 billion at September 30, 2024 increased $85.9 million, or 4.3% (not annualized) from June 30, 2024. Total average loans increased $61.0 million quarter over quarter.
Owner-occupied commercial real estate loans increased $32.1 million, or 10.0% (not annualized) from June 30, 2024.
The average portfolio loans-to-deposit ratio of 98.20% for the three months ended September 30, 2024 remained stable.
Total deposits of $2.2 billion at September 30, 2024 increased $85.8 million, or 4.1% (not annualized), from June 30, 2024, The increase includes $40.4 million of customer time deposits, $33.5 million of noninterest-bearing deposits primarily related to growth in title company deposit balances and $14.1 million of growth in customer money market deposits.
Uninsured and unprotected deposits were approximately $645.6 million as of September 30, 2024, representing 29.5% of the Company's deposit portfolio.
Low and no interest bearing deposits of $988.4 million increased $33.5 million, or 3.5% (not annualized) from June 30, 2024. Average noninterest-bearing deposits of $680.7 million increased $27.7 million, or 4.2% (not annualized), and represented 32.6% of total average deposits at September 30, 2024.
The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $208.7 million, or 8.1% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 61.8% of the overall investment portfolio at September 30, 2024. The AOCI on the investment securities portfolio decreased $4.5 million during the quarter to a negative $8.6 million as of September 30, 2024, which represents 3.1% of total stockholders' equity. The Company does not have a held-to-maturity investment securities portfolio.
Liquidity - The Company maintains stable and reliable sources of available borrowings consistent with prior quarter. Sources of available borrowings at September 30, 2024 totaled $691.8 million, including available collateralized lines of credit of $500.4 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $115.4 million.
Capital Positions - As of September 30, 2024, the Company reported a robust common equity tier 1 capital ratio of 14.78%, compared to 15.08% at June 30, 2024. At September 30, 2024, the Company and the Bank maintain regulatory capital ratios that exceed all capital adequacy requirements.
Financial Metrics
Net Interest Margin - Net interest margin decreased 5 basis points to 6.41% for the three months ended September 30, 2024, compared to prior quarter. Core Net Interest Margin, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), increased 8 basis points to 4.08% as compared to prior quarter.
The average yield on interest earning assets of 8.79% decreased 3 basis points compared to the prior quarter. The yield on portfolio loans, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), of 7.15% for the third quarter 2024, increased 11 basis points primarily from portfolio turnover.
The total cost of deposits increased 3 basis points to 2.64% for the third quarter 2024 as compared to the prior quarter.
The total cost of interest-bearing deposits increased 5 basis points to 3.92% for the third quarter 2024 as compared to the prior quarter.
Efficiency Ratios, The efficiency ratio was 66.1% for the three months ended September 30, 2024, compared to 67.1% for the three months ended June 30, 2024. The efficiency ratio, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), was 64.9% for the three months ended September 30, 2024 compared to 66.9% for the three months ended June 30, 2024.
Credit Metrics and Asset Quality - Overall credit performance remains stable with the allowance for credit losses to total loans ratio decreasing 2 basis points to 1.51% at September 30, 2024 as compared to June 30, 2024. Nonperforming assets increased 2 basis point to 0.60% of total assets at September 30, 2024 as compared to June 30, 2024. Total nonaccrual loans at September 30, 2024 increased $1.4 million to $15.5 million compared to June 30, 2024. At September 30, 2024, special mention loans totaled $20.3 million, or 1.0% of total portfolio loans, as compared to $23.3 million, or 1.2% of total portfolio loans, at June 30, 2024. At September 30, 2024, substandard loans totaled $23.8 million, or 1.1% of total portfolio loans, as compared to $22.1 million, or 1.2% of total portfolio loans, at June 30, 2024.
Performance Ratios, Annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 1.42% and 12.59%, respectively, for the three months ended September 30, 2024, compared to 1.40% and 12.53%, respectively, for the three months ended June 30, 2024.
Annualized ROAA and annualized ROAE, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), were 1.51% and 13.40%, respectively, for the three months ended September 30, 2024, compared to 1.41% and 12.62%, respectively, for the three months ended June 30, 2024.
Consistent Tangible Book Value Growth - Tangible book value per common share(1) grew $0.87, or 4.5%, to $20.13 at September 30, 2024 when compared to June 30, 2024. The Company did not have goodwill or other intangible assets during any of the periods presented and therefore, tangible book value per share(1) is equal to book value per share.
Commercial Bank
Continued Portfolio Loan Growth - Gross portfolio loans, excluding OpenSky™ credit card loans, increased $80.5 million, to $2.0 billion, at September 30, 2024 compared to June 30, 2024.
The $80.5 million gross portfolio loan growth includes commercial real estate loans of $38.5 million, residential real estate loans of $22.4 million and commercial and industrial loans of $16.1 million. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income - Interest income of $35.8 million increased $1.9 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $14.0 million increased $0.7 million, driven by an increase in average balances in the third quarter 2024.
Credit Metrics - Nonperforming assets increased 2 basis point to 0.60% of total assets at September 30, 2024 compared to June 30, 2024. Total nonaccrual loans at September 30, 2024 increased to $15.5 million compared to June 30, 2024.
The following tables present non-owner-occupied and owner-occupied commercial real estate loans and multi-family loans and the weighted average loan-to-value ("LTV").
Non-owner-occupied commercial real estate loans, including multi-family
As of September 30, 2024
(in thousands)
Amount
Average Loan Size
Weighted Average LTV(1)
% of Non-Owner-Occupied Commercial Real Estate Loans
% of Total Portfolio Loans, Gross
Loan type:
Multi-family
$
170,513
$
1,853
58.1
%
Not Applicable
8.1
%
Retail
$
116,324
$
1,454
56.6
%
28.8
%
5.5
%
Mixed use
96,337
1,189
52.8
%
23.9
%
4.6
%
Hotel
74,343
4,130
52.4
%
18.4
%
3.5
%
Industrial
63,109
1,127
54.2
%
15.6
%
3.0
%
Office
13,356
557
63.2
%
3.3
%
0.6
%
Other
40,018
1,819
55.4
%
10.0
%
1.9
%
Total non-owner-occupied commercial real estate loans
$
403,487
$
1,436
54.6
%
100.0
%
19.1
%
Total portfolio loans, gross
$
2,113,705
Owner-occupied commercial real estate loans
As of September 30, 2024
(in thousands)
Amount
Average Loan Size
Weighted Average LTV(1)
% of Owner-Occupied Commercial Real Estate Loans
% of Total Portfolio Loans, Gross
Loan type:
Industrial
$
108,048
$
1,522
56.9
%
30.7
%
5.1
%
Office
44,781
640
57.5
%
12.7
%
2.1
%
Retail
41,137
762
59.2
%
11.7
%
1.9
%
Mixed use
17,550
924
65.2
%
5.0
%
0.8
%
Other(2)
139,946
2,799
61.6
%
39.9
%
6.6
%
Total owner-occupied commercial real estate loans
$
351,462
$
1,331
59.6
%
100.0
%
16.6
%
Total portfolio loans, gross
$
2,113,705
(1) The weighted average LTV of the loan categories previously mentioned are calculated by reference to the most recent appraisal of the property securing each loan.(2) Other owner-occupied commercial real estate loans include special purpose loans of $57.9 million, skilled nursing loans of $53.8 million, and other loans of $28.2 million.
Classified and Criticized Loans - At September 30, 2024, special mention loans totaled $20.3 million, or 1.0% of total portfolio loans, as compared to $23.3 million, or 1.2% of total portfolio loans, at June 30, 2024. At September 30, 2024, substandard loans totaled $23.8 million, or 1.1% of total portfolio loans, as compared to $22.1 million, or 1.2% of total portfolio loans, at June 30, 2024.
OpenSky™
Revenues - Total revenue of $19.7 million decreased $0.4 million from the prior quarter. Interest income of $15.6 million decreased $0.2 million from the prior quarter. Average OpenSky™ credit card loan balances, net of reserves and deferred fees of $119.5 million for the third quarter 2024, increased $8.2 million, or 7.3% (not annualized), compared to prior quarter. Noninterest income of $4.1 million decreased $0.3 million as compared to prior quarter primarily related to lower annual fee income.
Noninterest Expense - Total noninterest expense of $13.3 million decreased $0.5 million primarily related to a reduction in seasonally high advertising expense in the second quarter 2024.
Loan and Deposit Balances - Loan balances, net of reserves, of $127.1 million at September 30, 2024 increased by $4.9 million, or 4.0%, compared to $122.2 million at June 30, 2024. Corresponding deposit balances of $170.8 million at September 30, 2024 decreased $2.7 million, or 1.6%, compared to $173.5 million at June 30, 2024. Gross unsecured loan balances of $39.7 million at September 30, 2024 increased $6.2 million, or 18.4%, compared to $33.6 million at June 30, 2024. During the third quarter 2024, the number of credit card accounts increased by 11,218 to 548,952 from June 30, 2024.
OpenSky™ Credit - Portfolio credit metrics continue to be stable and generally consistent with modeled expectations during the third quarter 2024. The provision for credit losses of $2.3 million remained flat when compared to the prior quarter.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended
3Q24 vs 2Q24
3Q24 vs 3Q23
(in thousands, except per share data)
September 30, 2024
June 30, 2024
September 30, 2023
$ Change
% Change
$ Change
% Change
Earnings Summary
Interest income
$
52,610
$
50,615
$
47,741
$
1,995
3.9
%
$
4,869
10.2
%
Interest expense
14,256
13,558
10,931
698
5.1
%
3,325
30.4
%
Net interest income
38,354
37,057
36,810
1,297
3.5
%
1,544
4.2
%
Provision for credit losses
3,748
3,417
2,280
331
9.7
%
1,468
64.4
%
Provision for credit losses on unfunded commitments
17
104
24
(87
)
(83.7
)%
(7
)
(29.2
)%
Noninterest income
6,635
6,890
6,326
(255
)
(3.7
)%
309
4.9
%
Noninterest expense
29,725
29,493
28,046
232
0.8
%
1,679
6.0
%
Income before income taxes
11,499
10,933
12,786
566
5.2
%
(1,287
)
(10.1
)%
Income tax expense
2,827
2,728
2,998
99
3.6
%
(171
)
(5.7
)%
Net income
$
8,672
$
8,205
$
9,788
$
467
5.7
%
$
(1,116
)
(11.4
)%
Pre-tax pre-provision net revenue ("PPNR")(1)
$
15,264
$
14,454
$
15,090
$
810
5.6
%
$
174
1.2
%
PPNR, as adjusted(1)
$
15,784
$
14,537
$
15,090
$
1,247
8.6
%
$
694
4.6
%
Common Share Data
Earnings per share - Basic
$
0.62
$
0.59
$
0.70
$
0.03
5.1
%
$
(0.08
)
(11.4
)%
Earnings per share - Diluted
$
0.62
$
0.59
$
0.70
$
0.03
5.1
%
$
(0.08
)
(11.4
)%
Earnings per share - Diluted, as adjusted(1)
$
0.66
$
0.59
$
0.70
$
0.07
11.9
%
$
(0.04
)
(5.7
)%
Weighted average common shares - Basic
13,914
13,895
13,933
Weighted average common shares - Diluted
13,951
13,895
14,024
Return Ratios
Return on average assets (annualized)
1.42
%
1.40
%
1.75
%
Return on average assets, as adjusted (annualized)(1)
1.51
%
1.41
%
1.75
%
Return on average equity (annualized)
12.59
%
12.53
%
16.00
%
Return on average equity, as adjusted (annualized)(1)
13.40
%
12.62
%
16.00
%
______________(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Nine Months Ended
September 30,
(in thousands, except per share data)
2024
2023
$ Change
% Change
Earnings Summary
Interest income
$
151,594
$
136,237
$
15,357
11.3
%
Interest expense
41,175
29,600
11,575
39.1
%
Net interest income
110,419
106,637
3,782
3.5
%
Provision for credit losses
9,892
6,802
3,090
45.4
%
Provision for credit losses on unfunded commitments
263
5
258
5,160.0
%
Noninterest income
19,497
19,039
458
2.4
%
Noninterest expense
88,705
83,860
4,845
5.8
%
Income before income taxes
31,056
35,009
(3,953
)
(11.3
)%
Income tax expense
7,617
8,168
(551
)
(6.7
)%
Net income
$
23,439
$
26,841
$
(3,402
)
(12.7
)%
Pre-tax pre-provision net revenue ("PPNR")(1)
$
41,211
$
41,816
$
(605
)
(1.4
)%
PPNR, as adjusted(1)
$
42,526
$
41,816
$
710
1.7
%
Common Share Data
Earnings per share - Basic
$
1.69
$
1.91
$
(0.22
)
(11.5
)%
Earnings per share - Diluted
$
1.69
$
1.90
$
(0.21
)
(11.1
)%
Earnings per share - Diluted, as adjusted(1)
$
1.77
$
1.90
Weighted average common shares - Basic
13,909
14,038
Weighted average common shares - Diluted
13,909
14,112
Return Ratios
Return on average assets (annualized)
1.32
%
1.64
%
Return on average assets, as adjusted (annualized)(1)
1.39
%
1.64
%
Return on average equity (annualized)
11.79
%
15.08
%
Return on average equity, as adjusted (annualized)(1)
12.37
%
15.08
%
______________(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Quarter Ended
Quarter Ended
September 30,
June 30,
March 31,
December 31,
(in thousands, except per share data)
2024
2023
% Change
2024
2023
2023
Balance Sheet Highlights
Assets
$
2,560,788
$
2,272,484
12.7
%
$
2,438,583
$
2,324,238
$
2,226,176
Investment securities available for sale
208,700
206,055
1.3
%
207,917
202,254
208,329
Mortgage loans held for sale
19,554
4,843
303.8
%
19,219
10,303
7,481
Portfolio loans receivable(2)
2,107,522
1,862,679
13.1
%
2,021,588
1,964,525
1,903,288
Allowance for credit losses
31,925
28,279
12.9
%
30,832
29,350
28,610
Deposits
2,186,224
1,967,988
11.1
%
2,100,428
2,005,695
1,895,996
FHLB borrowings
52,000
22,000
136.4
%
32,000
22,000
22,000
Other borrowed funds
12,062
12,062
—
%
12,062
12,062
27,062
Total stockholders' equity
280,111
242,878
15.3
%
267,854
259,465
254,860
Tangible common equity(1)
280,111
242,878
15.3
%
267,854
259,465
254,860
Common shares outstanding
13,918
13,893
0.2
%
13,910
13,890
13,923
Book value per share
$
20.13
$
17.48
15.2
%
$
19.26
$
18.68
$
18.31
Tangible book value per share(1)
$
20.13
$
17.48
15.2
%
$
19.26
$
18.68
$
18.31
Dividends per share
$
0.10
$
0.08
25.0
%
$
0.08
$
0.08
$
0.08
______________(1) Refer to Appendix for reconciliation of non-GAAP measures.(2) Loans are reflected net of deferred fees and costs.
Consolidated Statements of Income (Unaudited)
Three Months Ended
Nine Months Ended
(in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
September 30, 2024
September 30, 2023
Interest income
Loans, including fees
$
50,047
$
48,275
$
45,991
$
45,109
$
45,385
$
144,313
$
129,651
Investment securities available for sale
1,343
1,308
1,251
1,083
1,089
3,902
3,732
Federal funds sold and other
1,220
1,032
1,127
777
1,267
3,379
2,854
Total interest income
52,610
50,615
48,369
46,969
47,741
151,594
136,237
Interest expense
Deposits
13,902
13,050
12,833
11,759
10,703
39,785
27,866
Borrowed funds
354
508
528
321
228
1,390
1,734
Total interest expense
14,256
13,558
13,361
12,080
10,931
41,175
29,600
Net interest income
38,354
37,057
35,008
34,889
36,810
110,419
106,637
Provision for credit losses
3,748
3,417
2,727
2,808
2,280
9,892
6,802
Provision for (release of) credit losses on unfunded commitments
17
104
142
(106
)
24
263
5
Net interest income after provision for credit losses
34,589
33,536
32,139
32,187
34,506
100,264
99,830
Noninterest income
Service charges on deposits
235
200
207
240
250
642
724
Credit card fees
4,055
4,330
3,881
3,970
4,387
12,266
13,303
Mortgage banking revenue
1,882
1,990
1,453
1,166
1,243
5,325
3,730
Other income
463
370
431
560
446
1,264
1,282
Total noninterest income
6,635
6,890
5,972
5,936
6,326
19,497
19,039
Noninterest expenses
Salaries and employee benefits
13,345
13,272
12,907
11,638
12,419
39,524
37,116
Occupancy and equipment
1,791
1,864
1,613
1,573
1,351
5,268
4,100
Professional fees
1,980
1,769
1,947
1,930
2,358
5,696
7,340
Data processing
6,930
6,788
6,761
6,128
6,469
20,479
19,558
Advertising
1,223
2,072
2,032
1,433
1,565
5,327
4,728
Loan processing
615
476
371
198
426
1,462
1,435
Foreclosed real estate expenses, net
1
—
1
—
1
2
7
Merger-related expenses
520
83
712
—
—
1,315
—
Operational losses
1,008
782
931
1,490
953
2,721
3,123
Other operating
2,312
2,387
2,212
2,517
2,504
6,911
6,453
Total noninterest expenses
29,725
29,493
29,487
26,907
28,046
88,705
83,860
Income before income taxes
11,499
10,933
8,624
11,216
12,786
31,056
35,009
Income tax expense
2,827
2,728
