Financial Highlights

The company reported net income of $8.5 million for the first quarter of 2024, a decrease from $9.2 million in the first quarter of 2023. Earnings per share were $0.81, down from $0.87 in the year-ago quarter. Excluding merger-related expenses, net income would have been $9.2 million and earnings per share $0.88.

Revenue Performance

Net Interest Income

• Net interest income increased to $26.9 million from $26.3 million in the first quarter of 2023.
  
• This was driven by a $7.5 million increase in interest income on loans to $36.2 million.
• Higher market interest rates and competitive pressures drove a $7.8 million increase in interest expense to $15.8 million.

Noninterest Income

• Noninterest income rose 9.1% to $6.6 million, primarily due to higher wealth management fees and swap fee income.

Expense Management

• Noninterest expenses increased 10.9% to $22.5 million.
• Salaries and benefits rose 12.8%, reflecting merit-based and incentive compensation increases.
• The company incurred $672 thousand in merger-related expenses.

Loan Portfolio

• Total loans increased to $2.3 billion, up $4.8 million or 0.2% from year-end 2023.
• Growth was driven by residential mortgage loan originations.
• Commercial loans decreased by $2.3 million or 0.6%.

Loan Segment	Balance ($,000s)
Commercial Real Estate	1,312,582
Commercial & Industrial	365,524
Residential Mortgage	465,680
Other Consumer	159,287
Total	2,303,073

Asset Quality

• Nonperforming assets declined 49.5% to $12.9 million or 0.56% of total loans.
• The allowance for credit losses increased to $29.2 million, representing 1.27% of total loans.
• Net recoveries were $42 thousand compared to $34 thousand a year ago.

Funding and Liquidity

• Total deposits grew 5.3% to $2.7 billion.
• Noninterest-bearing deposits decreased 4.7% to $417.5 million.
• Time deposits increased 18.2% to $428.4 million.
• Borrowings decreased 16.4% to $147.1 million.

Capital Position

• Shareholders’ equity rose to $271.7 million.
• The total capital ratio was 12.87% compared to the regulatory requirement of 8.0%.
• Tangible book value per share grew to $23.47.

The company remains well-capitalized and profitable. While the economic climate brings uncertainty, underlying business momentum is positive. The company is focused on managing risk while continuing to meet client needs.