DNB Financial Corporation Reports Second Quarter 2019 Results

DNB Financial Corporation (NASDAQ: DNBF), today reported net income of $2.6 million, or $0.60 per diluted share, for the quarter ended June 30, 2019, compared with $2.0 million, or $0.47 per diluted share, for the same quarter, last year. For the six months ended June 30, 2019, net income was $5.2 million, or $1.19 per diluted share, compared with $4.7 million, or $1.08 per diluted share, for the same period, last year. 

DNB Financial Corporation (the “Company” or “DNB”) is the parent of DNB First, National Association, one of the first nationally-chartered community banks to serve the greater Philadelphia region.

Results for the three and six months ended June 30, 2019 included $519,000 of transaction expenses for the recently announced merger with S&T Bancorp, Inc. (“S&T”) (NASDAQ: STBA).  On June 5, 2019, DNB entered into a definitive agreement whereby S&T will acquire DNB in an all-stock transaction.  The transaction is expected to close in the fourth quarter of 2019, after satisfaction of customary closing conditions, including regulatory approvals and the approval of the shareholders of DNB.

William J. Hieb, President and CEO stated, “We are pleased with our continued strong and consistent financial performance, especially in this challenging interest rate environment.”  Mr. Hieb added, “Our primary goal of delivering shareholder value remains steadfast as demonstrated by our recent merger announcement. We look forward to our affiliation with S&T and the strength of our combined franchise.”

Highlights

• Asset quality remained strong as net charge-offs were only 0.06% (annualized) of total average loans for the second quarter of 2019.  Non-performing loans were 0.66% of total loans at June 30, 2019.
• Despite the flat yield curve that challenges all banks, the net interest margin increased to 3.45% for the quarter ending June 30, 2019, from 3.43% for the quarter ending March 31, 2019. 
• The strategy of growing relationship-based deposits helped produce an $11.6 million, or 7.0% (not annualized) increase in non-interest bearing deposits over the past three months.
• Non-interest bearing deposits represented 18.3% of total deposits as of June 30, 2019.  As of the same date, core deposits were 72.7% of total deposits.
• Wealth management assets under care were $290.2 million as of June 30, 2019, compared with $253.3 million as of December 31, 2018.  Wealth management fees represented nearly 39% of total fee income for the second quarter of 2019.
• The Company paid a quarterly cash dividend of $0.07 per share on June 18, 2019.

Income Statement Summary

Net income of $2.6 million for the second quarter of 2019 generated a return on average assets (“ROAA”) and return on average tangible equity (“ROTE”) (a non-GAAP measure) of 0.90% and 10.2%, respectively.  A discussion of non-GAAP measures in this release is included below and a reconciliation of this and other GAAP to non-GAAP measures is included on page 10.

Net interest income for the three months ending June 30, 2019 was $9.5 million, which represented a $117,000 increase from the quarter ending March 31, 2019, and a $447,000 increase from the quarter ending June 30, 2018.  The net interest margin for the second quarter of 2019 was 3.45%, which represented a two basis point increase on a sequential quarter basis.  The net interest margin was stable on a year-over-year basis as the 25 basis point increase in the weighted average yield on interest-earning assets was offset by the higher cost of interest-bearing liabilities and a $57,000 net reduction in purchase accounting marks.  For the second quarters of 2019 and 2018, the weighted average yields on total interest-earning assets were 4.53% and 4.28%, respectively, which included purchase accounting marks. 

Total interest expense was $3.0 million for both the three months ending June 30, 2019 and March 31, 2019, compared with $2.2 million for the three months ending June 30, 2018.  The weighted average rate paid for interest-bearing liabilities was 1.17%, 1.16%, and 0.90% for the quarters ending June 30, 2019, March 31, 2019, and June 30, 2018, respectively.  The rise in the weighted average rate was primarily due to an overall increase in market interest rates.

The provision for credit losses was $100,000 for the second quarter of 2019, compared with $200,000 for the first quarter of 2019, and $375,000 for the quarter ending June 30, 2018.  As of June 30, 2019, the allowance for credit losses was $6.7 million and represented 0.72% of total loans. 

Total non-interest income for the second quarter of 2019 remained fairly stable at $1.3 million, compared with both the first quarter of 2019, and the quarter ending June 30, 2018.  Wealth management fees were $529,000 for the second quarter of 2019, compared with $445,000 for the first quarter of 2019, and $512,000 for the second quarter of 2018.  Wealth management fees represented nearly 39% of total fee income for the most recent quarter. 

Non-interest expense was approximately $7.5 million for the quarter ending June 30, 2019, compared with $7.3 million for the quarter ending March 31, 2019, and $7.5 million for the quarter ending June 30, 2018.  Non-interest expense for the most recent quarter included $519,000 of transaction expenses related to the aforementioned merger with S&T.  The efficiency ratio was approximately 68% for the three months ended June 30, 2019.

Income tax expense was $660,000 for the three months ending June 30, 2019 compared with $607,000 for the three months ending March 31, 2019, and $436,000 for the quarter ending June 30, 2018.  The effective tax rate for the most recent quarter was 20.3%, compared with 17.5%, for the same quarter, last year. The effective tax rate increased due to certain transaction costs, which are non-deductible for federal tax purposes.

Balance Sheet Summary

As of June 30, 2019, total assets were $1.2 billion.  Since December 31, 2018, total average loans increased $14.2 million, or 1.5%, which was partially offset by a $10.8 million, or 5.7% decrease in total average investment securities and other interest-earning assets.  Total average deposits increased $5.5 million, or less than one percent since December 31, 2018.  As of June 30, 2019, total shareholders’ equity was $118.2 million, compared with $111.8 million as of December 31, 2018.  Tangible book value per share (a non-GAAP measure) was $23.63 as of June 30, 2019, compared with $22.21 as of December 31, 2018.  See Reconciliation of Non-GAAP Financial Measures on page 10.

As of June 30, 2019, total loans were $930.5 million, or 80.6% of total assets.  At the same date, commercial loans totaled $777.4 million and represented 83.5% of total loans.  Total loan growth was impacted by a relatively high level of payoffs due to property sales and the completion of several construction projects.  The Company views commercial lending as the highest and best use of its capital as these loans generally have higher yields and shorter durations. Over the past six months, commercial business loans grew $13.0 million or 7.8%, and commercial construction loans increased $757,000 or 1.0%.  That growth, however, was offset by a $14.7 million, or 2.7%, decrease in commercial mortgage loans.  Consumer loans also declined in the first six months of 2019.  Loan originations have been prudent and conservative underwriting standards have been maintained.

Total core deposits have been fairly stable since December 31, 2018, and were 72.7% of total deposits as of June 30, 2019.  Non-interest bearing deposits increased $13.7 million or 8.3% over the past six months, and represented 18.3% of total deposits as of June 30, 2019.  The $20.8 million, or 19.1%, decrease in brokered deposits was due in large part to our increased emphasis on establishing and maintaining deposit relationship accounts, rather than transactional accounts.  As of June 30, 2019, the loan-to-deposit ratio was 95.4%. 

Capital ratios continue to exceed all regulatory guidelines.  As of June 30, 2019, the tier 1 leverage ratio was 9.89%, the tier 1 risk-based capital ratio was 12.31%, the common equity tier 1 risk-based capital ratio was 11.33%, and the total risk based capital ratio was 14.15%.  As of the same date, the tangible common equity-to-tangible assets ratio (a non-GAAP measure) was 8.99%.  Intangible assets and goodwill totaled $15.9 million as of June 30, 2019. See Reconciliation of Non-GAAP Financial Measures on page 10.

Asset Quality Summary

Asset quality remained strong as net charge-offs were 0.06% (annualized) of total average loans for the quarter ending June 30, 2019.  Total non-performing assets, including loans and other real estate property, were $9.0 million as of June 30, 2019, compared with $10.8 million as of December 31, 2018, and $11.9 million as of June 30, 2018.  The ratio of non-performing loans to total loans was 0.66% as of June 30, 2019, versus 0.62% as of December 31, 2018.

Interest Rate Risk ManagementDNB's strategy has been to seek shorter duration over yield in its lending and investing activities and lengthen duration in its financing activities to minimize interest rate risk.  The Company also strives to offer products and services that develop strong relationships to retain core deposits. The Bank has an Asset Liability Management Committee that actively monitors and manages the Bank's interest rate exposure using simulation models and gap analysis. The Committee's primary objective is to minimize the adverse impact of changes in interest rates on net interest income, while maximizing earnings.  Simulation model results show moderate risk in both a declining and rising rate environment in the 100, 200, 300 and 400 basis point shock scenarios. Rate changes ramped in over 24 months also show moderate risk.

Non-GAAP Based Financial Measures

The income statement summary and selected financial data contains non-GAAP financial measures calculated using non-GAAP amounts. These measures are tangible book value per common share, return on average tangible equity and tangible equity to tangible assets. Tangible book value per share adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders' Equity). Return on average tangible equity adjusts the denominator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders’ Equity). Tangible common equity to tangible assets adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders’ Equity) and adjust the denominator by the amount of Goodwill and Other Intangible Assets (reduction of Total Assets). Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of non-GAAP measures provides additional clarity when assessing our financial results and use of equity. Disclosures of this type should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

General Information

DNB Financial Corporation is a bank holding company whose bank subsidiary, DNB First, National Association, is a community bank headquartered in Downingtown, Pennsylvania with 14 locations. DNB First, which was founded in 1860, provides a broad array of consumer and business banking products, and offers brokerage and insurance services through DNB Investments & Insurance, and investment management services through DNB Investment Management & Trust. DNB Financial Corporation's shares are traded on NASDAQ’s Capital Market under the symbol: DNBF. We invite our customers and shareholders to visit our website at https://www.dnbfirst.com. DNB's Investor Relations site can be found at http://investors.dnbfirst.com/.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations or predictions of future financial or business performance. These forward-looking statements include statements with respect to DNB’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond DNB’s control). The words "may," "could," "should," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.

In addition to factors previously disclosed in the reports filed by DNB with the Securities and Exchange Commission (the “SEC”) and those identified elsewhere in this document, the following factors, among others, could cause actual results to differ materially from forward looking statements or historical performance and there can be no assurances that: the proposed merger with S&T will close when expected or the expected returns and other benefits of the proposed merger to shareholders will be achieved: the strength of the United States economy in general and the strength of the local economies in which DNB conducts its operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the downgrade, and any future downgrades, in the credit rating of the U.S. Government and federal agencies; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; the willingness of users to substitute competitors’ products and services for DNB’s products and services; the success of DNB in gaining regulatory approval of its products and services, when required; the impact of changes in laws and regulations applicable to financial institutions (including laws concerning taxes, banking, securities and insurance); technological changes; additional acquisitions; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms; that expected benefits of the merger with S&T may not materialize in the time frames expected or at all, or may be more costly to achieve; that the merger transaction may not be timely completed, if at all; that prior to completion of the merger transaction or thereafter, the parties’ respective businesses may not perform as expected due to transaction-related uncertainties or other factors; that the parties are unable to implement successful integration strategies; that the required regulatory approvals, shareholder approvals, or other closing conditions are not satisfied in a timely manner, or at all; reputational risks and the reaction of the parties’ customers to the merger transaction; diversion of management time to merger-related issues; and the success of DNB at managing the risks involved in the foregoing. Further, DNB’s expectations with respect to the effects of the new tax law could be affected by future clarifications, amendments, and interpretations of such law. Annualized, pro forma, projected and estimated numbers presented herein are presented for illustrative purpose only, are not forecasts and may not reflect actual results.

DNB cautions that the foregoing list of important factors is not exclusive. Readers are also cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date of this press release, even if subsequently made available by DNB on its website or otherwise. DNB does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of DNB to reflect events or circumstances occurring after the date of this press release.

For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with the SEC, including our most recent annual report on Form 10-K, as supplemented by our quarterly or other reports subsequently filed with the SEC.

FINANCIAL TABLES FOLLOW

DNB Financial Corporation
Condensed Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2019				2018				2019			2018
EARNINGS:
Interest income	$	12,519			$	11,289			$	24,879		$	22,202
Interest expense		3,004				2,221				5,966			4,107
Net interest income		9,515				9,068				18,913			18,095
Provision for credit losses		100				375				300			750
Non-interest income		1,343				1,322				2,614			2,595
Gain on sale of investment securities		1				-				4			-
Gain on sale of SBA loans		-				10				-			10
Loss on sale / write-down of OREO and ORA		37				140				150			140
Transaction costs		519				-				519			-
Non-interest expense		6,956				7,400				14,121			14,130
Income before income taxes(1)		3,247				2,485				6,441			5,680
Income tax expense		660				436				1,267			1,018
Net income	$	2,587			$	2,049			$	5,174		$	4,662
Net income per common share, diluted	$	0.60			$	0.47			$	1.19		$	1.08
(1) Net income before taxes includes net accretion of purchase accounting fair value adjustments of $161,000 and $347,000 for the three and six month periods ended June 30, 2019, respectively, compared with $216,000 and $477,000 for the same periods last year.
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands)
		June 30,				December 31,
		2019				2018
FINANCIAL POSITION:
Cash and cash equivalents	$	46,398			$	17,321
Investment securities		129,880				158,669
Loans held for sale		501				419
Loans		930,521				934,971
Allowance for credit losses		(6,672	)			(6,675	)
Net loans		923,849				928,296
Premises and equipment, net		7,231				7,636
Restricted stock		5,734				5,616
Other assets		40,816				40,278
Total assets	$	1,154,409			$	1,158,235
Deposits	$	975,863			$	984,566
FHLB advances		31,203				32,935
Other borrowings		9,551				12,584
Subordinated debt		9,750				9,750
Other liabilities		9,886				6,554
Stockholders' equity		118,156				111,846
Total liabilities and stockholders' equity	$	1,154,409			$	1,158,235

DNB Financial Corporation
Selected Financial Data (Unaudited)
(In thousands, except per share data)
	Quarterly
	2019				2019				2018				2018				2018
	2nd Qtr				1st Qtr				4th Qtr				3rd Qtr				2nd Qtr
Earnings and Per Share Data
Net income	$	2,587			$	2,587			$	3,002			$	3,020			$	2,049
Basic earnings per common share	$	0.60			$	0.60			$	0.70			$	0.70			$	0.48
Diluted earnings per common share	$	0.60			$	0.60			$	0.69			$	0.70			$	0.47
Dividends per common share	$	0.07			$	0.07			$	0.07			$	0.07			$	0.07
Book value per common share	$	27.28			$	26.57			$	25.88			$	25.06			$	24.49
Tangible book value per common share (Non-GAAP)	$	23.63			$	22.91			$	22.21			$	21.38			$	20.79
Average common shares outstanding		4,331				4,327				4,317				4,307				4,298
Average diluted common shares outstanding		4,336				4,330				4,320				4,318				4,314
Performance Ratios
Return on average assets		0.90	%			0.91	%			1.03	%			1.07	%			0.74	%
Return on average equity		8.86	%			9.22	%			10.80	%			11.17	%			7.79	%
Return on average tangible equity (Non-GAAP)		10.24	%			10.71	%			12.62	%			13.11	%			9.18	%
Yield on Loans and Leases		4.89	%			4.90	%			4.85	%			4.74	%			4.70	%
Cost of Deposits		1.07	%			1.04	%			0.97	%			0.86	%			0.77	%
Net interest margin		3.45	%			3.43	%			3.45	%			3.39	%			3.44	%
Efficiency ratio		68.31	%			66.50	%			62.45	%			63.68	%			70.39	%
Wtd average yield on earning assets		4.53	%			4.51	%			4.44	%			4.30	%			4.28	%
Asset Quality Ratios
Net charge-offs (recoveries) to average loans		0.06	%			0.07	%			0.10	%			-0.12	%			0.15	%
Non-performing loans/Total loans		0.66	%			0.49	%			0.62	%			0.71	%			0.76	%
Non-performing assets/Total assets		0.78	%			0.69	%			0.94	%			1.02	%			1.05	%
Allowance for credit loss/Total loans		0.72	%			0.72	%			0.71	%			0.72	%			0.70	%
Allowance for credit loss/Non-performing loans		108.88	%			146.24	%			115.50	%			101.36	%			91.76	%
Capital Ratios
Total equity/Total assets		10.24	%			9.86	%			9.66	%			9.58	%			9.29	%
Tangible equity/Tangible assets (Non-GAAP)		8.99	%			8.61	%			8.40	%			8.29	%			8.00	%
Tier 1 leverage ratio		9.89	%			9.65	%			9.48	%			9.48	%			9.35	%
Common equity tier 1 risk-based capital ratio		11.33	%			11.00	%			10.76	%			10.91	%			10.69	%
Tier 1 risk based capital ratio		12.31	%			11.97	%			11.74	%			11.93	%			11.72	%
Total risk based capital ratio		14.15	%			13.80	%			13.57	%			13.83	%			13.59	%
Wealth Management Assets Under Care(1)	$	290,230			$	273,980			$	253,323			$	269,074			$	257,797
(1) Wealth Management Assets Under Care includes assets under management, administration, supervision and brokerage.

DNB Financial Corporation
Condensed Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
	Three Months Ended
	June 30,				Mar 31,				Dec 31,				Sept 30,				June 30,
	2019				2019				2018				2018				2018
EARNINGS:
Interest income	$	12,519			$	12,360			$	12,338			$	11,635			$	11,289
Interest expense		3,004				2,962				2,780				2,484				2,221
Net interest income		9,515				9,398				9,558				9,151				9,068
Provision for credit losses		100				200				350				100				375
Non-interest income		1,343				1,271				1,268				1,336				1,322
Gain from insurance proceeds		-				-				-				8				-
Gain on sale of investment securities		1				3				-				-				-
Gain on sale of SBA loans		-				-				1				27				10
Loss on sale / write-down of OREO and ORA		37				113				20				11				140
Transaction costs		519				-				-				-				-
Non-interest expense		6,956				7,165				6,812				6,762				7,400
Income before income taxes		3,247				3,194				3,645				3,649				2,485
Income tax expense		660				607				643				629				436
Net income	$	2,587			$	2,587			$	3,002			$	3,020			$	2,049
Net income per common share, diluted	$	0.60			$	0.60			$	0.69			$	0.70			$	0.47
Condensed Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands)
	June 30,				Mar 31,				Dec 31,				Sept 30,				June 30,
	2019				2019				2018				2018				2018
FINANCIAL POSITION:
Cash and cash equivalents	$	46,398			$	34,893			$	17,321			$	10,702			$	33,452
Investment securities		129,880				148,122				158,669				161,230				165,574
Loans held for sale		501				449				419				-				276
Loans and leases		930,521				933,697				934,971				908,293				885,320
Allowance for credit losses		(6,672	)			(6,719	)			(6,675	)			(6,559	)			(6,188	)
Net loans and leases		923,849				926,978				928,296				901,734				879,132
Premises and equipment, net		7,231				7,360				7,636				7,881				8,150
Right of use asset		3,791				3,976				-				-				-
Goodwill		15,525				15,525				15,525				15,525				15,525
Restricted stock		5,734				6,389				5,616				5,864				6,950
Other assets		21,500				23,002				24,753				25,179				24,550
Total assets	$	1,154,409			$	1,166,694			$	1,158,235			$	1,128,115			$	1,133,609
Demand	$	178,454			$	166,806			$	164,746			$	168,311			$	175,561
NOW		214,806				233,077				236,071				213,707				216,261
Money market		236,707				231,524				235,023				227,797				254,061
Savings		79,489				78,748				77,979				78,996				80,044
Core deposits		709,456				710,155				713,819				688,811				725,927
Time deposits		178,530				162,939				162,096				154,021				114,766
Brokered deposits		87,877				107,163				108,651				97,049				93,422
Total deposits		975,863				980,257				984,566				939,881				934,115
FHLB advances		31,203				41,918				32,935				36,952				62,972
Repurchase agreements		-				-				-				4,089				5,609
Subordinated debt		9,750				9,750				9,750				9,750				9,750
Other borrowings		9,551				9,568				12,584				22,833				9,615
Other liabilities		5,712				5,857				6,554				6,551				6,215
Operating lease liability		4,174				4,358				-				-				-
Stockholders' equity		118,156				114,986				111,846				108,059				105,333
Total liabilities and stockholders' equity	$	1,154,409			$	1,166,694			$	1,158,235			$	1,128,115			$	1,133,609

DNB Financial Corporation
Condensed Consolidated Statements of Financial Condition - Quarterly Average Balances (Unaudited)
(Dollars in thousands)
		June 30,				Mar 31,				Dec 31,				Sept 30,				June 30,
		2019				2019				2018				2018				2018
FINANCIAL POSITION:
Cash and cash equivalents	$	33,562			$	18,390			$	25,269			$	21,676			$	20,528
Investment securities		142,323				157,364				159,717				163,800				168,836
Loans held for sale		393				289				320				338				642
Loans and leases		934,156				935,169				919,985				889,113				869,166
Allowance for credit losses		(6,742	)			(6,785	)			(6,550	)			(6,567	)			(6,197	)
Net loans and leases		927,414				928,384				913,435				882,546				862,969
Premises and equipment, net		7,306				7,540				7,789				8,059				8,306
Right of use asset		3,908				1,390				-				-				-
Goodwill		15,525				15,525				15,525				15,525				15,525
Restricted Stock		5,818				6,138				5,759				6,262				6,836
Other assets		20,907				23,695				23,816				24,012				23,568
Total assets	$	1,157,156			$	1,158,715			$	1,151,630			$	1,122,218			$	1,107,210
Demand	$	168,818			$	160,852			$	168,495			$	174,798			$	170,885
NOW		226,823				228,907				222,638				215,055				206,341
Money market		233,614				233,101				241,777				238,679				252,825
Savings		78,689				78,713				78,069				79,695				80,696
Core deposits		707,944				701,573				710,979				708,227				710,747
Time deposits		168,098				162,715				157,944				141,794				114,091
Brokered deposits		102,573				107,639				104,161				85,690				82,957
Total deposits		978,615				971,927				973,084				935,711				907,795
FHLB advances		32,965				45,493				34,834				45,549				54,971
Repurchase agreements		-				-				1,168				4,644				12,042
Subordinated debt		9,750				9,750				9,750				9,750				9,750
Other borrowings		9,581				11,158				15,752				13,060				10,923
Other liabilities		4,777				5,051				6,780				6,193				6,277
Operating lease liability		4,291				1,522				-				-				-
Stockholders' equity		117,177				113,814				110,262				107,311				105,452
Total liabilities and stockholders' equity	$	1,157,156			$	1,158,715			$	1,151,630			$	1,122,218			$	1,107,210

DNB Financial Corporation
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Tangible Book Value Per Common Share to Book Value Per Common Share
(In thousands, except share and per share data)
	June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
	2019			2019			2018			2018			2018
Stockholders' Equity	$	118,156		$	114,986		$	111,846		$	108,059		$	105,333
Goodwill		15,525			15,525			15,525			15,525			15,525
Other intangible assets		302			322			343			364			388
Tangible common equity (Non-GAAP)	$	102,329		$	99,139		$	95,978		$	92,170		$	89,420
Outstanding shares	4,331,121			4,327,415			4,321,745			4,311,860			4,301,898
Book value per common share (GAAP)	$	27.28		$	26.57		$	25.88		$	25.06		$	24.49
Tangible book value per common share (Non-GAAP)		23.63			22.91			22.21			21.38			20.79
Return on Average Tangible Equity
(Dollars in thousands)	For the Quarter Ended
	June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
	2019			2019			2018			2018			2018
Average Stockholders' Equity	$	117,177		$	113,814		$	110,262		$	107,311		$	105,452
Average goodwill		15,525			15,525			15,525			15,525			15,525
Average other intangible assets		312			333			354			376			388
Average tangible stockholders' equity (Non-GAAP)	$	101,340		$	97,956		$	94,383		$	91,410		$	89,539
Net Income	$	2,587		$	2,587		$	3,002		$	3,020		$	2,049
Return on average stockholders' equity (GAAP)		8.86	%		9.22	%		10.80	%		11.17	%		7.79	%
Return on average tangible equity (Non-GAAP)		10.24			10.71			12.62			13.11			9.18
Tangible Equity/Tangible Assets
(Dollars in thousands)
	June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
	2019			2019			2018			2018			2018
Stockholders' Equity	$	118,156		$	114,986		$	111,846		$	108,059		$	105,333
Goodwill		15,525			15,525			15,525			15,525			15,525
Other intangible assets		302			322			343			364			388
Tangible common equity (Non-GAAP)	$	102,329		$	99,139		$	95,978		$	92,170		$	89,420
Assets	1,154,409			1,166,694			1,158,235			1,128,115			1,133,609
Goodwill		15,525			15,525			15,525			15,525			15,525
Other intangible assets		302			322			343			364			388
Tangible assets (Non-GAAP)	1,138,582			1,150,847			1,142,367			1,112,226			1,117,696
Total equity/Total assets (GAAP)		10.24	%		9.86	%		9.66	%		9.58	%		9.29	%
Tangible common equity/Tangible assets (Non-GAAP)		8.99			8.61			8.40			8.29			8.00

For further information, please contact: Gerald F. Sopp CFO/Executive Vice-President484.359.3138       [e-mail]