Exhibit 99.1
Shore Bancshares Reports 2016 Results
EASTON, Md., Jan. 25, 2017 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ: SHBI) reported net income of $2.495 million or $0.20 per diluted common share for the fourth quarter of 2016, compared to net income of $2.411 million or $0.19 per diluted common share for the third quarter of 2016, and net income of $2.163 million or $0.17 per diluted common share for the fourth quarter of 2015. The Company reported net income of $9.638 million or $0.76 per diluted common share for fiscal year 2016, compared to net income of $7.108 million or $0.56 per diluted common share for fiscal year 2015, an increase of $2.530 million or 35.6%.
When comparing the fourth quarter of 2016 to the third quarter of 2016, net income increased due to higher net interest income resulting from increased loan volume, an increase in noninterest income and a decrease in provision for credit losses. When comparing the fourth quarter of 2016 to the fourth quarter of 2015, the improved results were driven by an increase in net interest income due to higher loan volume, and an increase in noninterest income. When comparing fiscal year 2016 to fiscal year 2015, improved earnings were due to an increase in net interest income of $2.7 million, an increase in noninterest income of $1.2 million, a decline in provision for credit losses of $227 thousand and the reduction of noninterest expenses of $203 thousand.
"2016 proved to be a great year for Shore Bancshares Inc. and its family of companies," said Lloyd L. "Scott" Beatty Jr. "During the year, we consolidated our bank subsidiaries (CNB and The Talbot Bank) and rebranded the merged bank as Shore United Bank. We feel strongly that our new name will travel well as we expand our footprint. Continued growth in both our deposit and loan portfolios during 2016 allowed us to achieve significantly improved earnings while continuing to strengthen our balance sheet. 2017 will be an exciting year. Earlier this month we announced the purchase of three branches on the western shore of Maryland. These new branches will allow us to expand our market, generate significant net interest income and diversify our loan portfolio."
Balance Sheet Review
Total assets were $1.160 billion at December 31, 2016, a $25.1 million, or 2.2%, increase when compared to $1.135 billion at the end of 2015. The higher amount of total assets was the result of significant loan growth of $76.4 million, primarily in the consumer and commercial real estate loan portfolios of $20.1 and $47.4 million, respectively. The significant growth in the loan portfolio was partially funded by deposit growth of $22.0 million and a decrease in investment securities of $45.7 million.
Total deposits at December 31, 2016 increased $22.0 million, or 2.3%, when compared to December 31, 2015. The increase in total deposits was mainly due to an increase in noninterest-bearing deposits of $31.9 million and savings deposits of $20.9 million, partially offset by a decrease in time deposits of $29.5 million and interest-bearing accounts of $1.3 million. Total stockholders' equity increased $7.3 million, or 5.0%, when compared to the end of 2015 primarily due to current year's earnings, partially offset by common stock dividends paid to shareholders of $1.8 million. At December 31, 2016, the ratio of total equity to total assets was 13.30% and the ratio of total tangible equity to total tangible assets was 12.32%, higher than the 12.95% and 11.93%, respectively, at December 31, 2015.
Review of Quarterly Financial Results
Net interest income was $10.0 million for the fourth quarter of 2016, compared to $9.7 million for the third quarter of 2016 and $9.3 million for the fourth quarter of 2015. The increase in net interest income for the fourth quarter of 2016 when compared to the third quarter of 2016 was the direct result of increased loan volume and lower rates paid on interest-bearing deposits. When comparing the fourth quarter of 2016 to the fourth quarter of 2015, significant loan growth resulted in an increase in average loans of $80.8 million. The Company's net interest margin was 3.63% for the fourth quarter of 2016, compared to 3.54% for the third quarter of 2016 and 3.45% for the fourth quarter of 2015. The increase in net interest margin was primarily due to the increase in loan volume which was partially funded through proceeds from the sale of short-term, lower yielding investments.
The provision for credit losses was $418 thousand for the fourth quarter of 2016, $605 thousand for the third quarter of 2016 and $475 thousand for the fourth quarter of 2015. The lower level of provision for credit losses when comparing the fourth quarter of 2016 to the third quarter of 2016 was primarily due to a decline in nonperforming assets of $2.6 million and a decrease in net charge-offs of $43 thousand. The level of provision for credit losses decreased when comparing the fourth quarter of 2016 to the fourth quarter of 2015, despite the growth in the loan portfolio, primarily due to declines in nonaccrual loans and troubled debt restructurings ("TDRs"). Net charge-offs were $306 thousand for the fourth quarter of 2016, $349 thousand for the third quarter of 2016 and $257 thousand for the fourth quarter of 2015. The ratio of annualized net charge-offs to average loans was 0.14% for the fourth quarter of 2016, 0.17% for the third quarter of 2016 and 0.13% for the fourth quarter of 2015. The ratio of the allowance for credit losses to period-end loans was 1.00% at December 31, 2016 and September 30, 2016, respectively. This was lower than the 1.05% at December 31, 2015.
At December 31, 2016, nonperforming assets, excluding TDRs, were $11.5 million, a decrease of $2.3 million, or 16.6%, when compared to September 30, 2016 and a decrease of $4.9 million, or 29.9%, when compared to December 31, 2015. Additionally, accruing TDRs were $13.0 million at December 31, 2016, a decrease of $272 thousand, or 2.0%, when compared to September 30, 2016 and a decrease of $2.5 million, or 16.1%, when compared to December 31, 2015. The positive trend in nonperforming assets and TDRs when comparing December 31, 2016 to both September 30, 2016 and December 31, 2015 was mainly accomplished through continued workout efforts and charge-offs over the last 12 months. At December 31, 2016, the ratio of nonperforming assets to total assets was 0.99%, lower than the 1.19% at September 30, 2016 and 1.44% at December 31, 2015. In addition, the ratio of accruing TDRs to total assets at December 31, 2016 was 1.12%, compared to 1.15% at September 30, 2016 and 1.37% at December 31, 2015, which reflects improved credit quality in the loan portfolio.
Total noninterest income for the fourth quarter of 2016 increased $49 thousand, or 1.2%, when compared to the third quarter of 2016 and increased $418 thousand, or 11.5%, when compared to the fourth quarter of 2015. The increase from the third quarter of 2016 was primarily due to a gain on sale of the Bank's credit card portfolio of $198 thousand which was sold in November of 2016 and the absence of a loss in other real estate owned of $130 thousand, almost entirely offset by a decline in insurance agency commissions of $257 thousand. The increase from the fourth quarter of 2015 of $418 thousand was the result of the gain on sale of the Bank's credit card portfolio, increases in service charges on deposit accounts, bank service fees, insurance agency commissions and wealth management fee income.
Total noninterest expense for the fourth quarter of 2016 increased $9 thousand, or 0.1%, when compared to the third quarter of 2016 and increased $276 thousand, or 3.1%, when compared to the fourth quarter of 2015. The increase from the third quarter of 2016 was due to an increase in write-downs of other real estate owned of $165 thousand and increased software expenses of $153 thousand, partially offset by a decrease in employee benefits of $103 thousand and data processing costs of $119 thousand. The increase from the fourth quarter of 2015 was primarily due to higher loan production and servicing costs, the direct result of higher loan volume, and an increase in write-downs of other real estate owned. These increases were partially offset by lower FDIC insurance premium expenses, the result of the consolidation of the two former bank subsidiaries.
Review of 2016 Financial Results
Net interest income for 2016 was $38.2 million, an increase of $2.7 million, or 7.7%, when compared to 2015 due to an increase in average earning assets of $43.1 million. The increase in interest income was primarily due to higher average balances on loans and lower average balances and rates paid on time deposits. Although the yields on loans declined compared to 2015, the funding of loan growth with lower yielding assets and lower cost liabilities resulted in a slight increase in yields on total interest earning assets. The increase in the average balance of loans along with the decrease in rates on interest bearing deposits resulted in an improved net interest margin to 3.56% for fiscal 2016 from 3.43% for fiscal 2015.
The provision for credit losses for 2016 and 2015 was $1.8 million and $2.1 million, respectively, while net charge-offs were $1.4 million and $1.5 million, respectively. The ratio of annualized net charge-offs to average loans was 0.17% for 2016 and 0.19% for 2015.
Total noninterest income for 2016 increased $1.2 million, or 8.0%, when compared to 2015. The increase was primarily due to increases in service charges on deposit accounts of $598 thousand, insurance agency commissions of $277 thousand, bank service and loan fees of $207 thousand and a gain on sale of the Bank's credit card portfolio of $198 thousand. These increases were partially offset by a decrease in trust and investment fee income of $185 thousand.
Total noninterest expense for 2016 decreased $203 thousand, or 0.5%, when compared to 2015. The decrease was primarily due to a decline in legal and professional fees of $505 thousand and reduced FDIC insurance premiums of $518 thousand, partially offset by consolidation expenses for the former bank subsidiaries of $507 thousand and increases in write-downs on other real estate owned of $115 thousand and employee salaries/wages and employee benefits of $174 thousand. The increased legal and professional fees in 2015 were the direct result of management outsourcing its internal audit function which resulted in significant implementation costs. In addition, the lower FDIC insurance premiums over the prior period are the direct result of the upgraded regulatory status and financial performance of the former Talbot Bank of Easton in the second quarter of 2015 and an adjustment of the annual assessment in the third quarter of 2016.
Shore Bancshares Information
Shore Bancshares, Inc. is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland's Eastern Shore. It is the parent company of Shore United Bank; one retail insurance producer firm, The Avon-Dixon Agency, LLC ("Avon-Dixon"), with two specialty lines, Elliott Wilson Insurance (Trucking) and Jack Martin Associates (Marine); and an insurance premium finance company, Mubell Finance, LLC ("Mubell"). Shore Bancshares Inc. engages in trust and wealth management services through Wye Financial & Trust, a division of Shore United Bank. Additional information is available at www.shorebancshares.com.
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled "Risk Factors".
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
Shore Bancshares, Inc. | Page 5 of 12 | |||||||||||
Financial Highlights | ||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||
December 31, | December 31, | |||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | |||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||
Net interest income | $ 9,965 | $ 9,293 | 7.2 | % | $ 38,249 | $ 35,525 | 7.7 | % | ||||
Provision for credit losses | 418 | 475 | (12.0) | 1,848 | 2,075 | (10.9) | ||||||
Noninterest income | 4,056 | 3,638 | 11.5 | 16,645 | 15,416 | 8.0 | ||||||
Noninterest expense | 9,226 | 8,950 | 3.1 | 37,147 | 37,350 | (0.5) | ||||||
Income before income taxes | 4,377 | 3,506 | 24.8 | 15,899 | 11,516 | 38.1 | ||||||
Income tax expense | 1,882 | 1,343 | 40.1 | 6,261 | 4,408 | 42.0 | ||||||
Net income | $ 2,495 | $ 2,163 | 15.3 | $ 9,638 | $ 7,108 | 35.6 | ||||||
Return on average assets | 0.86 | % | 0.75 | % | 11 | bp | 0.84 | % | 0.64 | % | 20 | bp |
Return on average equity | 6.39 | 5.85 | 54 | 6.32 | 4.93 | 139 | ||||||
Return on average tangible equity (1) | 7.03 | 6.49 | 54 | 6.97 | 5.49 | 148 | ||||||
Net interest margin | 3.63 | 3.45 | 18 | 3.56 | 3.43 | 13 | ||||||
Efficiency ratio - GAAP | 65.50 | 69.10 | (360) | 67.43 | 73.21 | (578) | ||||||
Efficiency ratio - Non-GAAP (1) | 65.28 | 68.84 | (356) | 67.23 | 72.95 | (572) | ||||||
PER SHARE DATA | ||||||||||||
Basic net income per common share | $ 0.20 | $ 0.17 | 17.6 | % | $ 0.76 | $ 0.56 | 35.7 | % | ||||
Diluted net income per common share | 0.20 | 0.17 | 17.6 | 0.76 | 0.56 | 35.7 | ||||||
Dividends paid per common share | 0.05 | 0.02 | 150.0 | 0.14 | 0.04 | 250.0 | ||||||
Book value per common share at period end | 12.18 | 11.64 | 4.6 | |||||||||
Tangible book value per common share at period end (1) | 11.16 | 10.59 | 5.4 | |||||||||
Market value at period end | 15.25 | 10.88 | 40.2 | |||||||||
Market range: | ||||||||||||
High | 16.90 | 11.00 | 53.6 | 16.90 | 9.94 | 70.0 | ||||||
Low | 11.49 | 10.64 | 8.0 | 10.23 | 8.51 | 20.2 | ||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||
Loans | $ 866,360 | $ 785,572 | 10.3 | % | $ 825,475 | $ 748,101 | 10.3 | |||||
Investment securities | 175,417 | 213,307 | (17.8) | 196,236 | 232,288 | (15.5) | ||||||
Earning assets | 1,100,197 | 1,072,728 | 2.6 | 1,079,954 | 1,036,839 | 4.2 | ||||||
Assets | 1,159,131 | 1,137,430 | 1.9 | 1,141,142 | 1,105,666 | 3.2 | ||||||
Deposits | 993,918 | 978,049 | 1.6 | 976,881 | 949,132 | 2.9 | ||||||
Stockholders' equity | 155,367 | 146,597 | 6.0 | 152,426 | 144,176 | 5.7 | ||||||
CREDIT QUALITY DATA AT PERIOD END | ||||||||||||
Net charge-offs | $ 306 | $ 257 | 19.1 | % | $ 1,438 | $ 1,454 | (1.1) | % | ||||
Nonaccrual loans | $ 8,972 | $ 12,093 | (25.8) | |||||||||
Loans 90 days past due and still accruing | 20 | 7 | 185.7 | |||||||||
Other real estate owned | 2,477 | 4,252 | (41.7) | |||||||||
Total nonperforming assets | 11,469 | 16,352 | (29.9) | |||||||||
Accruing troubled debt restructurings (TDRs) | 13,001 | 15,495 | (16.1) | |||||||||
Total nonperforming assets and accruing TDRs | $ 24,470 | $ 31,847 | (23.2) | |||||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||
Period-end equity to assets | 13.30 | % | 12.95 | % | 35 | bp | ||||||
Period-end tangible equity to tangible assets (1) | 12.32 | 11.93 | 39 | |||||||||
Annualized net charge-offs to average loans | 0.14 | 0.13 | 1 | 0.17 | % | 0.19 | % | (2) | bp | |||
Allowance for credit losses as a percent of: | ||||||||||||
Period-end loans | 1.00 | 1.05 | (5) | |||||||||
Nonaccrual loans | 97.26 | 68.77 | 2,849 | |||||||||
Nonperforming assets | 76.08 | 50.86 | 2,522 | |||||||||
Accruing TDRs | 67.12 | 53.67 | 1,345 | |||||||||
Nonperforming assets and accruing TDRs | 35.66 | 26.11 | 955 | |||||||||
As a percent of total loans: | ||||||||||||
Nonaccrual loans | 1.03 | 1.52 | (49) | |||||||||
Accruing TDRs | 1.49 | 1.95 | (46) | |||||||||
Nonaccrual loans and accruing TDRs | 2.52 | 3.47 | (95) | |||||||||
As a percent of total loans+other real estate owned: | ||||||||||||
Nonperforming assets | 1.31 | 2.05 | (74) | |||||||||
Nonperforming assets and accruing TDRs | 2.80 | 3.98 | (118) | |||||||||
As a percent of total assets: | ||||||||||||
Nonaccrual loans | 0.77 | 1.07 | (30) | |||||||||
Nonperforming assets | 0.99 | 1.44 | (45) | |||||||||
Accruing TDRs | 1.12 | 1.37 | (25) | |||||||||
Nonperforming assets and accruing TDRs | 2.11 | 2.81 | (70) | |||||||||
(1) See the reconciliation table on page 12 of 12. | ||||||||||||
Shore Bancshares, Inc. | Page 6 of 12 | |||||
Consolidated Balance Sheets | ||||||
(In thousands, except per share data) | ||||||
December 31, 2016 | ||||||
December 31, | December 31, | compared to | ||||
2016 | 2015 | December 31, 2015 | ||||
ASSETS | ||||||
Cash and due from banks | $ 14,596 | $ 15,080 | (3.2) | % | ||
Interest-bearing deposits with other banks | 61,342 | 54,223 | 13.1 | |||
Federal funds sold | - | 4,508 | (100.0) | |||
Cash and cash equivalents | 75,938 | 73,811 | 2.9 | |||
Investment securities available for sale (at fair value) | 163,798 | 212,165 | (22.8) | |||
Investment securities held to maturity | 6,808 | 4,191 | 62.4 | |||
Loans | 871,525 | 795,114 | 9.6 | |||
Less: allowance for credit losses | (8,726) | (8,316) | 4.9 | |||
Loans, net | 862,799 | 786,798 | 9.7 | |||
Premises and equipment, net | 16,558 | 16,864 | (1.8) | |||
Goodwill | 11,931 | 11,931 | - | |||
Other intangible assets, net | 1,079 | 1,211 | (10.9) | |||
Other real estate owned, net | 2,477 | 4,252 | (41.7) | |||
Other assets | 18,883 | 23,920 | (21.1) | |||
Total assets | $ 1,160,271 | $ 1,135,143 | 2.2 | |||
LIABILITIES | ||||||
Noninterest-bearing deposits | $ 261,575 | $ 229,686 | 13.9 | |||
Interest-bearing deposits | 735,914 | 745,778 | (1.3) | |||
Total deposits | 997,489 | 975,464 | 2.3 | |||
Short-term borrowings | 3,203 | 6,672 | (52.0) | |||
Accrued expenses and other liabilities | 5,280 | 6,040 | (12.6) | |||
Total liabilities | 1,005,972 | 988,176 | 1.8 | |||
STOCKHOLDERS' EQUITY | ||||||
Common stock, par value $0.01; authorized | ||||||
35,000,000 shares | 127 | 126 | 0.8 | |||
Additional paid in capital | 64,201 | 63,815 | 0.6 | |||
Retained earnings | 90,964 | 83,097 | 9.5 | |||
Accumulated other comprehensive (loss) income | (993) | (71) | (1,298.6) | |||
Total stockholders' equity | 154,299 | 146,967 | 5.0 | |||
Total liabilities and stockholders' equity | $ 1,160,271 | $ 1,135,143 | 2.2 | |||
Period-end common shares outstanding | 12,665 | 12,631 | 0.3 | |||
Book value per common share | $ 12.18 | $ 11.64 | 4.6 | |||
Shore Bancshares, Inc. | Page 7 of 12 | |||||||||
Consolidated Statements of Operations | ||||||||||
(In thousands, except per share data) | ||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||
December 31, | December 31, | |||||||||
2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||
INTEREST INCOME | ||||||||||
Interest and fees on loans | $ 9,679 | $ 9,142 | 5.9 | % | $ 37,155 | $ 35,126 | 5.8 | % | ||
Interest and dividends on investment securities: | ||||||||||
Taxable | 747 | 854 | (12.5) | 3,195 | 3,602 | (11.3) | ||||
Tax-exempt | 1 | 2 | (50.0) | 7 | 10 | (30.0) | ||||
Interest on federal funds sold | - | 1 | (100.0) | 6 | 3 | 100.0 | ||||
Interest on deposits with other banks | 78 | 48 | 62.5 | 289 | 130 | 122.3 | ||||
Total interest income | 10,505 | 10,047 | 4.6 | 40,652 | 38,871 | 4.6 | ||||
INTEREST EXPENSE | ||||||||||
Interest on deposits | 537 | 750 | (28.4) | 2,389 | 3,331 | (28.3) | ||||
Interest on short-term borrowings | 3 | 4 | (25.0) | 14 | 15 | (6.7) | ||||
Total interest expense | 540 | 754 | (28.4) | 2,403 | 3,346 | (28.2) | ||||
NET INTEREST INCOME | 9,965 | 9,293 | 7.2 | 38,249 | 35,525 | 7.7 | ||||
Provision for credit losses | 418 | 475 | (12.0) | 1,848 | 2,075 | (10.9) | ||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||
FOR CREDIT LOSSES | 9,547 | 8,818 | 8.3 | 36,401 | 33,450 | 8.8 | ||||
NONINTEREST INCOME | ||||||||||
Service charges on deposit accounts | 883 | 806 | 9.6 | 3,465 | 2,867 | 20.9 | ||||
Trust and investment fee income | 369 | 348 | 6.0 | 1,442 | 1,627 | (11.4) | ||||
Investment securities gains | - | - | - | 30 | - | - | ||||
Insurance agency commissions | 1,797 | 1,760 | 2.1 | 8,551 | 8,274 | 3.3 | ||||
Other noninterest income | 1,007 | 724 | 39.1 | 3,157 | 2,648 | 19.2 | ||||
Total noninterest income | 4,056 | 3,638 | 11.5 | 16,645 | 15,416 | 8.0 | ||||
NONINTEREST EXPENSE | ||||||||||
Salaries and wages | 4,381 | 4,366 | 0.3 | 17,626 | 17,540 | 0.5 | ||||
Employee benefits | 906 | 890 | 1.8 | 3,993 | 3,905 | 2.3 | ||||
Occupancy expense | 613 | 583 | 5.1 | 2,452 | 2,420 | 1.3 | ||||
Furniture and equipment expense | 235 | 215 | 9.3 | 963 | 926 | 4.0 | ||||
Data processing | 857 | 809 | 5.9 | 3,496 | 3,260 | 7.2 | ||||
Directors' fees | 156 | 114 | 36.8 | 511 | 470 | 8.7 | ||||
Amortization of intangible assets | 32 | 33 | (3.0) | 131 | 133 | (1.5) | ||||
FDIC insurance premium expense | 42 | 281 | (85.1) | 696 | 1,214 | (42.7) | ||||
Write-downs of other real estate owned | 167 | 39 | 328.2 | 242 | 127 | 90.6 | ||||
Legal and professional fees | 441 | 440 | 0.2 | 1,875 | 2,380 | (21.2) | ||||
Other noninterest expenses | 1,396 | 1,180 | 18.3 | 5,162 | 4,975 | 3.8 | ||||
Total noninterest expense | 9,226 | 8,950 | 3.1 | 37,147 | 37,350 | (0.5) | ||||
Income before income taxes | 4,377 | 3,506 | 24.8 | 15,899 | 11,516 | 38.1 | ||||
Income tax expense | 1,882 | 1,343 | 40.1 | 6,261 | 4,408 | 42.0 | ||||
NET INCOME | $ 2,495 | $ 2,163 | 15.3 | $ 9,638 | $ 7,108 | 35.6 | ||||
Weighted average shares outstanding - basic | 12,665 | 12,631 | 0.3 | 12,652 | 12,629 | 0.2 | ||||
Weighted average shares outstanding - diluted | 12,686 | 12,645 | 0.3 | 12,670 | 12,639 | 0.2 | ||||
Basic net income per common share | $ 0.20 | $ 0.17 | 17.6 | $ 0.76 | $ 0.56 | 35.7 | ||||
Diluted net income per common share | 0.20 | 0.17 | 17.6 | 0.76 | 0.56 | 35.7 | ||||
Dividends paid per common share | 0.05 | 0.02 | 150.0 | 0.14 | 0.04 | 250.0 | ||||
Shore Bancshares, Inc. | Page 8 of 12 | |||||||||||||||
Consolidated Average Balance Sheets | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||
balance | rate | balance | rate | balance | rate | balance | rate | |||||||||
Earning assets | ||||||||||||||||
Loans | $ 866,360 | 4.47 | % | $ 785,572 | 4.63 | % | $ 825,475 | 4.52 | % | $ 748,101 | 4.71 | % | ||||
Investment securities | ||||||||||||||||
Taxable | 175,207 | 1.70 | 213,097 | 1.60 | 196,026 | 1.63 | 231,960 | 1.55 | ||||||||
Tax-exempt | 210 | 5.30 | 210 | 5.30 | 210 | 5.30 | 328 | 4.54 | ||||||||
Federal funds sold | 27 | 0.38 | 3,886 | 0.12 | 1,764 | 0.34 | 2,991 | 0.10 | ||||||||
Interest-bearing deposits | 58,393 | 0.54 | 69,963 | 0.27 | 56,479 | 0.51 | 53,459 | 0.24 | ||||||||
Total earning assets | 1,100,197 | 3.82 | % | 1,072,728 | 3.72 | % | 1,079,954 | 3.78 | % | 1,036,839 | 3.76 | % | ||||
Cash and due from banks | 16,707 | 16,628 | 15,844 | 18,497 | ||||||||||||
Other assets | 51,065 | 56,512 | 53,899 | 58,502 | ||||||||||||
Allowance for credit losses | (8,838) | (8,438) | (8,555) | (8,172) | ||||||||||||
Total assets | $ 1,159,131 | $ 1,137,430 | $ 1,141,142 | $ 1,105,666 | ||||||||||||
Interest-bearing liabilities | ||||||||||||||||
Demand deposits | $ 197,810 | 0.12 | % | $ 190,237 | 0.13 | % | $ 194,062 | 0.12 | % | $ 180,810 | 0.13 | % | ||||
Money market and savings deposits | 272,786 | 0.13 | 255,974 | 0.14 | 265,323 | 0.13 | 243,731 | 0.14 | ||||||||
Certificates of deposit $100,000 or more | 122,725 | 0.56 | 139,663 | 0.80 | 127,468 | 0.64 | 149,181 | 0.93 | ||||||||
Other time deposits | 141,641 | 0.60 | 158,011 | 0.80 | 148,671 | 0.67 | 164,239 | 0.84 | ||||||||
Interest-bearing deposits | 734,962 | 0.29 | 743,885 | 0.40 | 735,524 | 0.32 | 737,961 | 0.45 | ||||||||
Short-term borrowings | 3,908 | 0.25 | 6,199 | 0.23 | 5,753 | 0.24 | 6,226 | 0.24 | ||||||||
Total interest-bearing liabilities | 738,870 | 0.29 | % | 750,084 | 0.40 | % | 741,277 | 0.32 | % | 744,187 | 0.45 | % | ||||
Noninterest-bearing deposits | 258,956 | 234,164 | 241,357 | 211,171 | ||||||||||||
Accrued expenses and other liabilities | 5,938 | 6,585 | 6,082 | 6,132 | ||||||||||||
Stockholders' equity | 155,367 | 146,597 | 152,426 | 144,176 | ||||||||||||
Total liabilities and stockholders' equity | $ 1,159,131 | $ 1,137,430 | $ 1,141,142 | $ 1,105,666 | ||||||||||||
Net interest spread | 3.53 | % | 3.32 | % | 3.46 | % | 3.31 | % | ||||||||
Net interest margin | 3.63 | % | 3.45 | % | 3.56 | % | 3.43 | % | ||||||||
Shore Bancshares, Inc. | Page 9 of 12 | |||||||||||||
Financial Highlights By Quarter | ||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||
4th quarter | 3rd quarter | 2nd quarter | 1st quarter | 4th quarter | 4Q 16 | 4Q 16 | ||||||||
2016 | 2016 | 2016 | 2016 | 2015 | compared to | compared to | ||||||||
(4Q 16) | (3Q 16) | (2Q 16) | (1Q 16) | (4Q 15) | 3Q 16 | 4Q 15 | ||||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||||
Taxable-equivalent net interest income | $ 10,029 | $ 9,730 | $ 9,415 | $ 9,273 | $ 9,315 | 3.1 | % | 7.7 | % | |||||
Less: Taxable-equivalent adjustment | 64 | 72 | 32 | 30 | 22 | (11.1) | 190.9 | |||||||
Net interest income | 9,965 | 9,658 | 9,383 | 9,243 | 9,293 | 3.2 | 7.2 | |||||||
Provision for credit losses | 418 | 605 | 375 | 450 | 475 | (30.9) | (12.0) | |||||||
Noninterest income | 4,056 | 4,007 | 4,041 | 4,541 | 3,638 | 1.2 | 11.5 | |||||||
Noninterest expense | 9,226 | 9,217 | 9,365 | 9,339 | 8,950 | 0.1 | 3.1 | |||||||
Income before income taxes | 4,377 | 3,843 | 3,684 | 3,995 | 3,506 | 13.9 | 24.8 | |||||||
Income tax expense | 1,882 | 1,432 | 1,412 | 1,535 | 1,343 | 31.4 | 40.1 | |||||||
Net income | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | 3.5 | 15.3 | |||||||
Return on average assets | 0.86 | % | 0.83 | % | 0.81 | % | 0.88 | % | 0.76 | % | 3 | bp | 10 | bp |
Return on average equity | 6.39 | 6.23 | 6.04 | 6.64 | 5.85 | 16 | 54 | |||||||
Return on average tangible equity (1) | 7.03 | 6.86 | 6.67 | 7.34 | 6.49 | 17 | 54 | |||||||
Net interest margin | 3.63 | 3.54 | 3.57 | 3.50 | 3.45 | 9 | 18 | |||||||
Efficiency ratio - GAAP | 65.50 | 67.10 | 69.60 | 67.61 | 69.10 | (160) | (360) | |||||||
Efficiency ratio - Non-GAAP (1) | 65.28 | 67.00 | 69.35 | 67.37 | 68.84 | (172) | (356) | |||||||
PER SHARE DATA | ||||||||||||||
Basic net income per common share | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.19 | $ 0.17 | 5.3 | % | 17.6 | % | |||||
Diluted net income per common share | 0.20 | 0.19 | 0.18 | 0.19 | 0.17 | 5.3 | 17.6 | |||||||
Dividends paid per common share | 0.05 | 0.03 | 0.03 | 0.03 | 0.02 | 66.7 | 100.0 | |||||||
Book value per common share at period end | 12.18 | 12.23 | 12.04 | 11.88 | 11.64 | (0.4) | 4.6 | |||||||
Tangible book value per common share at period end (1) | 11.16 | 11.20 | 11.00 | 10.84 | 10.59 | (0.4) | 5.4 | |||||||
Market value at period end | 15.25 | 11.78 | 11.75 | 11.98 | 10.88 | 29.5 | 40.2 | |||||||
Market range: | ||||||||||||||
High | 16.90 | 11.95 | 12.50 | 12.08 | 11.00 | 41.4 | 53.6 | |||||||
Low | 11.49 | 11.32 | 10.23 | 11.95 | 10.64 | 1.5 | 8.0 | |||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||
Loans | $ 866,360 | $ 836,955 | $ 807,231 | $ 790,777 | $ 785,572 | 3.5 | % | 10.3 | % | |||||
Investment securities | 175,417 | 190,475 | 204,357 | 214,988 | 213,307 | (7.9) | (17.8) | |||||||
Earning assets | 1,100,197 | 1,092,105 | 1,061,645 | 1,065,514 | 1,072,728 | 0.7 | 2.6 | |||||||
Assets | 1,159,131 | 1,152,309 | 1,122,568 | 1,130,238 | 1,137,430 | 0.6 | 1.9 | |||||||
Deposits | 993,918 | 984,940 | 959,397 | 968,991 | 978,049 | 0.9 | 1.6 | |||||||
Stockholders' equity | 155,367 | 153,985 | 151,270 | 149,032 | 146,597 | 0.9 | 6.0 | |||||||
CREDIT QUALITY DATA AT PERIOD END | ||||||||||||||
Net charge-offs | $ 306 | $ 349 | $ 326 | $ 457 | $ 257 | (12.3) | % | 19.1 | % | |||||
Nonaccrual loans | $ 8,972 | $ 11,490 | $ 13,531 | $ 11,925 | $ 12,093 | (21.9) | (25.8) | |||||||
Loans 90 days past due and still accruing | 20 | 64 | 6 | 35 | 7 | (68.8) | 185.7 | |||||||
Other real estate owned | 2,477 | 2,197 | 1,897 | 3,896 | 4,252 | 12.7 | (41.7) | |||||||
Total nonperforming assets | $ 11,469 | $ 13,751 | $ 15,434 | $ 15,856 | $ 16,352 | (16.6) | (29.9) | |||||||
Accruing troubled debt restructurings (TDRs) | $ 13,001 | $ 13,273 | $ 13,338 | $ 14,753 | $ 15,495 | (2.0) | (16.1) | |||||||
Total nonperforming assets and accruing TDRs | $ 24,470 | $ 27,024 | $ 28,772 | $ 30,609 | $ 31,847 | (9.5) | (23.2) | |||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||||
Period-end equity to assets | 13.30 | % | 13.37 | % | 13.53 | % | 13.27 | % | 12.95 | % | (7) | bp | 35 | bp |
Period-end tangible equity to tangible assets (1) | 12.32 | 12.39 | 12.52 | 12.25 | 11.93 | (7) | 39 | |||||||
Annualized net charge-offs to average loans | 0.14 | 0.17 | 0.16 | 0.23 | 0.13 | (3) | 1 | |||||||
Allowance for credit losses as a percent of: | ||||||||||||||
Period-end loans | 1.00 | 1.00 | 1.02 | 1.04 | 1.05 | - | (5) | |||||||
Nonaccrual loans | 97.26 | 74.97 | 61.77 | 69.68 | 68.77 | 2,229 | 2,849 | |||||||
Nonperforming assets | 76.08 | 62.64 | 54.15 | 52.40 | 50.86 | 1,344 | 2,522 | |||||||
Accruing TDRs | 67.12 | 64.90 | 62.66 | 56.32 | 53.67 | 222 | 1,345 | |||||||
Nonperforming assets and accruing TDRs | 35.66 | 31.88 | 29.05 | 27.15 | 26.11 | 378 | 955 | |||||||
As a percent of total loans: | ||||||||||||||
Nonaccrual loans | 1.03 | 1.34 | 1.65 | 1.49 | 1.52 | (31) | (49) | |||||||
Accruing TDRs | 1.49 | 1.54 | 1.62 | 1.85 | 1.95 | (5) | (46) | |||||||
Nonaccrual loans and accruing TDRs | 2.52 | 2.88 | 3.27 | 3.34 | 3.47 | (36) | (95) | |||||||
As a percent of total loans+other real estate owned: | ||||||||||||||
Nonperforming assets | 1.31 | 1.59 | 1.88 | 1.98 | 2.05 | (28) | (74) | |||||||
Nonperforming assets and accruing TDRs | 2.80 | 3.13 | 3.50 | 3.81 | 3.98 | (33) | (118) | |||||||
As a percent of total assets: | ||||||||||||||
Nonaccrual loans | 0.77 | 0.99 | 1.20 | 1.05 | 1.07 | (22) | (30) | |||||||
Nonperforming assets | 0.99 | 1.19 | 1.37 | 1.40 | 1.44 | (20) | (45) | |||||||
Accruing TDRs | 1.12 | 1.15 | 1.18 | 1.30 | 1.37 | (3) | (25) | |||||||
Nonperforming assets and accruing TDRs | 2.11 | 2.34 | 2.55 | 2.70 | 2.81 | (23) | (70) | |||||||
(1) See the reconciliation table on page 12 of 12. | ||||||||||||||
Shore Bancshares, Inc. | Page 10 of 12 | |||||||||||||
Consolidated Statements of Operations By Quarter | ||||||||||||||
(In thousands, except per share data) | ||||||||||||||
4Q 16 | 4Q 16 | |||||||||||||
compared to | compared to | |||||||||||||
4Q 16 | 3Q 16 | 2Q 16 | 1Q 16 | 4Q 15 | 3Q 16 | 4Q 15 | ||||||||
INTEREST INCOME | ||||||||||||||
Interest and fees on loans | $ 9,679 | $ 9,398 | $ 9,117 | $ 8,961 | $ 9,142 | 3.0 | % | 5.9 | % | |||||
Interest and dividends on investment securities: | ||||||||||||||
Taxable | 747 | 754 | 824 | 870 | 854 | (0.9) | (12.5) | |||||||
Tax-exempt | 1 | 2 | 2 | 2 | 2 | (50.0) | (50.0) | |||||||
Interest on federal funds sold | - | 1 | 2 | 3 | 1 | (100.0) | (100.0) | |||||||
Interest on deposits with other banks | 78 | 81 | 58 | 72 | 48 | (3.7) | 62.5 | |||||||
Total interest income | 10,505 | 10,236 | 10,003 | 9,908 | 10,047 | 2.6 | 4.6 | |||||||
INTEREST EXPENSE | ||||||||||||||
Interest on deposits | 537 | 574 | 617 | 661 | 750 | (6.4) | (28.4) | |||||||
Interest on short-term borrowings | 3 | 4 | 3 | 4 | 4 | (25.0) | (25.0) | |||||||
Total interest expense | 540 | 578 | 620 | 665 | 754 | (6.6) | (28.4) | |||||||
NET INTEREST INCOME | 9,965 | 9,658 | 9,383 | 9,243 | 9,293 | 3.2 | 7.2 | |||||||
Provision for credit losses | 418 | 605 | 375 | 450 | 475 | (30.9) | (12.0) | |||||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||||||
FOR CREDIT LOSSES | 9,547 | 9,053 | 9,008 | 8,793 | 8,818 | 5.5 | 8.3 | |||||||
NONINTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 883 | 899 | 870 | 813 | 806 | (1.8) | 9.6 | |||||||
Trust and investment fee income | 369 | 358 | 364 | 351 | 348 | 3.1 | 6.0 | |||||||
Investment securities gains | - | 30 | - | - | - | (100.0) | - | |||||||
Insurance agency commissions | 1,797 | 2,054 | 1,941 | 2,759 | 1,760 | (12.5) | 2.1 | |||||||
Other noninterest income | 1,007 | 666 | 866 | 618 | 724 | 51.2 | 39.1 | |||||||
Total noninterest income | 4,056 | 4,007 | 4,041 | 4,541 | 3,638 | 1.2 | 11.5 | |||||||
NONINTEREST EXPENSE | ||||||||||||||
Salaries and wages | 4,381 | 4,346 | 4,422 | 4,477 | 4,366 | 0.8 | 0.3 | |||||||
Employee benefits | 906 | 1,009 | 964 | 1,114 | 890 | (10.2) | 1.8 | |||||||
Occupancy expense | 613 | 643 | 583 | 613 | 583 | (4.7) | 5.1 | |||||||
Furniture and equipment expense | 235 | 245 | 248 | 235 | 215 | (4.1) | 9.3 | |||||||
Data processing | 857 | 976 | 854 | 809 | 809 | (12.2) | 5.9 | |||||||
Directors' fees | 156 | 120 | 131 | 104 | 114 | 30.0 | 36.8 | |||||||
Amortization of intangible assets | 32 | 33 | 33 | 33 | 33 | (3.0) | (3.0) | |||||||
FDIC insurance premium expense | 42 | 104 | 268 | 282 | 281 | (59.6) | (85.1) | |||||||
Write-downs of other real estate owned | 167 | 2 | 66 | 7 | 39 | 8,250.0 | 328.2 | |||||||
Legal and professional fees | 441 | 440 | 609 | 385 | 440 | 0.2 | 0.2 | |||||||
Other noninterest expenses | 1,396 | 1,299 | 1,187 | 1,280 | 1,180 | 7.5 | 18.3 | |||||||
Total noninterest expense | 9,226 | 9,217 | 9,365 | 9,339 | 8,950 | 0.1 | 3.1 | |||||||
Income before income taxes | 4,377 | 3,843 | 3,684 | 3,995 | 3,506 | 13.9 | 24.8 | |||||||
Income tax expense | 1,882 | 1,432 | 1,412 | 1,535 | 1,343 | 31.4 | 40.1 | |||||||
NET INCOME | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | 3.5 | 15.3 | |||||||
Weighted average shares outstanding - basic | 12,665 | 12,661 | 12,648 | 12,635 | 12,631 | 0.0 | 0.3 | |||||||
Weighted average shares outstanding - diluted | 12,686 | 12,676 | 12,665 | 12,649 | 12,645 | 0.1 | 0.3 | |||||||
Basic net income per common share | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.19 | $ 0.17 | 5.3 | 17.6 | |||||||
Diluted net income per common share | 0.20 | 0.19 | 0.18 | 0.19 | 0.17 | 5.3 | 17.6 | |||||||
Dividends paid per common share | 0.05 | 0.03 | 0.03 | 0.03 | 0.02 | 66.7 | 150.0 | |||||||
Shore Bancshares, Inc. | Page 11 of 12 | |||||||||||||||||||||||
Consolidated Average Balance Sheets By Quarter | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Average balance | ||||||||||||||||||||||||
4Q 16 | 4Q 16 | |||||||||||||||||||||||
compared to | compared to | |||||||||||||||||||||||
4Q 16 | 3Q 16 | 2Q 16 | 1Q 16 | 4Q 15 | 3Q 16 | 4Q 15 | ||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||||
balance | rate | balance | rate | balance | rate | balance | rate | balance | rate | |||||||||||||||
Earning assets | ||||||||||||||||||||||||
Loans | $ 866,360 | 4.47 | % | $ 836,955 | 4.50 | % | $ 807,231 | 4.56 | % | $ 790,777 | 4.57 | % | $ 785,572 | 4.63 | % | 3.5 | % | 10.3 | % | |||||
Investment securities | ||||||||||||||||||||||||
Taxable | 175,207 | 1.70 | 190,265 | 1.59 | 204,147 | 1.61 | 214,778 | 1.62 | 213,097 | 1.60 | (7.9) | (17.8) | ||||||||||||
Tax-exempt | 210 | 5.30 | 210 | 5.30 | 210 | 5.30 | 210 | 5.30 | 210 | 5.30 | - | - | ||||||||||||
Federal funds sold | 27 | 0.38 | 511 | 0.37 | 2,910 | 0.34 | 3,640 | 0.33 | 3,886 | 0.12 | (94.7) | (99.3) | ||||||||||||
Interest-bearing deposits | 58,393 | 0.54 | 64,164 | 0.50 | 47,147 | 0.50 | 56,109 | 0.51 | 69,963 | 0.27 | (9.0) | (16.5) | ||||||||||||
Total earning assets | 1,100,197 | 3.82 | % | 1,092,105 | 3.75 | % | 1,061,645 | 3.80 | % | 1,065,514 | 3.75 | % | 1,072,728 | 3.72 | % | 0.7 | 2.6 | |||||||
Cash and due from banks | 16,707 | 15,678 | 14,776 | 16,205 | 16,628 | 6.6 | 0.5 | |||||||||||||||||
Other assets | 51,065 | 52,836 | 54,699 | 57,037 | 56,512 | (3.4) | (9.6) | |||||||||||||||||
Allowance for credit losses | (8,838) | (8,310) | (8,552) | (8,518) | (8,438) | 6.4 | 4.7 | |||||||||||||||||
Total assets | $ 1,159,131 | $ 1,152,309 | $ 1,122,568 | $ 1,130,238 | $ 1,137,430 | 0.6 | 1.9 | |||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||
Demand deposits | $ 197,810 | 0.12 | % | $ 199,116 | 0.12 | % | $ 186,137 | 0.12 | % | $ 193,087 | 0.12 | % | $ 190,237 | 0.13 | % | (0.7) | 4.0 | |||||||
Money market and savings deposits | 272,786 | 0.13 | 268,183 | 0.13 | 261,495 | 0.13 | 258,715 | 0.13 | 255,974 | 0.14 | 1.7 | 6.6 | ||||||||||||
Certificates of deposit $100,000 or more | 122,725 | 0.56 | 125,265 | 0.61 | 129,544 | 0.69 | 132,412 | 0.71 | 139,663 | 0.80 | (2.0) | (12.1) | ||||||||||||
Other time deposits | 141,641 | 0.60 | 147,780 | 0.64 | 151,577 | 0.68 | 153,774 | 0.74 | 158,011 | 0.80 | (4.2) | (10.4) | ||||||||||||
Interest-bearing deposits | 734,962 | 0.29 | 740,344 | 0.31 | 728,753 | 0.34 | 737,988 | 0.36 | 743,885 | 0.40 | (0.7) | (1.2) | ||||||||||||
Short-term borrowings | 3,908 | 0.25 | 7,075 | 0.25 | 5,792 | 0.24 | 6,242 | 0.24 | 6,199 | 0.23 | (44.8) | (37.0) | ||||||||||||
Total interest-bearing liabilities | 738,870 | 0.29 | % | 747,419 | 0.31 | % | 734,545 | 0.34 | % | 744,230 | 0.36 | % | 750,084 | 0.40 | % | (1.1) | (1.5) | |||||||
Noninterest-bearing deposits | 258,956 | 244,596 | 230,644 | 231,003 | 234,164 | 5.9 | 10.6 | |||||||||||||||||
Accrued expenses and other liabilities | 5,938 | 6,309 | 6,109 | 5,973 | 6,585 | (5.9) | (9.8) | |||||||||||||||||
Stockholders' equity | 155,367 | 153,985 | 151,270 | 149,032 | 146,597 | 0.9 | 6.0 | |||||||||||||||||
Total liabilities and stockholders' equity | $ 1,159,131 | $ 1,152,309 | $ 1,122,568 | $ 1,130,238 | $ 1,137,430 | 0.6 | 1.9 | |||||||||||||||||
Net interest spread | 3.53 | % | 3.44 | % | 3.46 | % | 3.39 | % | 3.32 | % | ||||||||||||||
Net interest margin | 3.63 | % | 3.54 | % | 3.57 | % | 3.50 | % | 3.45 | % | ||||||||||||||
Shore Bancshares, Inc. | Page 12 of 12 | |||||||||||||
Reconciliation of Generally Accepted Accounting Principles (GAAP) | ||||||||||||||
and Non-GAAP Measures | ||||||||||||||
(In thousands, except per share data) | ||||||||||||||
YTD | YTD | |||||||||||||
4Q 16 | 3Q 16 | 2Q 16 | 1Q 16 | 4Q 15 | 12/31/2016 | 12/31/2015 | ||||||||
The following reconciles return on average equity and return on average tangible equity (Note 1): | ||||||||||||||
Net income | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | $ 9,638 | $ 7,108 | |||||||
Net income - annualized (A) | $ 9,926 | $ 9,592 | $ 9,138 | $ 9,894 | $ 8,581 | $ 9,638 | $ 7,108 | |||||||
Net income, excluding net amortization of intangible assets | $ 2,514 | $ 2,431 | $ 2,292 | $ 2,480 | $ 2,183 | $ 9,717 | $ 7,189 | |||||||
Net income, excluding net amortization of intangible | ||||||||||||||
assets - annualized (B) | $ 10,001 | $ 9,671 | $ 9,218 | $ 9,975 | $ 8,661 | $ 9,717 | $ 7,189 | |||||||
Average stockholders' equity (C) | $ 155,367 | $ 153,985 | $ 151,270 | $ 149,032 | $ 146,597 | $ 152,426 | $ 144,176 | |||||||
Less: Average goodwill and other intangible assets | (13,030) | (13,063) | (13,096) | (13,129) | (13,155) | (13,079) | (13,200) | |||||||
Average tangible equity (D) | $ 142,337 | $ 140,922 | $ 138,174 | $ 135,903 | $ 133,442 | $ 139,347 | $ 130,976 | |||||||
Return on average equity (GAAP) (A)/(C) | 6.39 | % | 6.23 | % | 6.04 | % | 6.64 | % | 5.85 | % | 6.32 | % | 4.93 | % |
Return on average tangible equity (Non-GAAP) (B)/(D) | 7.03 | % | 6.86 | % | 6.67 | % | 7.34 | % | 6.49 | % | 6.97 | % | 5.49 | % |
The following reconciles GAAP efficiency ratio and non-GAAP efficiency ratio (Note 2): | ||||||||||||||
Noninterest expense (E) | $ 9,226 | $ 9,217 | $ 9,365 | $ 9,339 | $ 8,950 | $ 37,147 | $ 37,350 | |||||||
Less: Amortization of intangible assets | (32) | (33) | (33) | (33) | (33) | (131) | (133) | |||||||
Adjusted noninterest expense (F) | $ 9,194 | $ 9,184 | $ 9,332 | $ 9,306 | $ 8,917 | $ 37,016 | $ 37,217 | |||||||
Taxable-equivalent net interest income (G) | $ 10,029 | $ 9,730 | $ 9,415 | $ 9,273 | $ 9,315 | $ 38,447 | $ 35,604 | |||||||
Taxable-equivalent net interest income excluding nonrecurring adjustment (H) | $ 10,029 | $ 9,730 | $ 9,415 | $ 9,273 | $ 9,315 | $ 38,447 | $ 35,604 | |||||||
Noninterest income (I) | $ 4,056 | $ 4,007 | $ 4,041 | $ 4,541 | $ 3,638 | $ 16,645 | $ 15,416 | |||||||
Adjusted noninterest income (J) | $ 4,056 | $ 4,007 | $ 4,041 | $ 4,541 | $ 3,638 | $ 16,615 | $ 15,416 | |||||||
Efficiency ratio (GAAP) (E)/(G)+(I) | 65.50 | % | 67.10 | % | 69.60 | % | 67.61 | % | 69.10 | % | 67.43 | % | 73.21 | % |
Efficiency ratio (Non-GAAP) (F)/(H)+(J) | 65.28 | % | 67.00 | % | 69.35 | % | 67.37 | % | 68.84 | % | 67.23 | % | 72.95 | % |
The following reconciles book value per common share and tangible book value per common share (Note 1): | ||||||||||||||
Stockholders' equity (K) | $ 154,299 | $ 154,835 | $ 152,321 | $ 150,109 | $ 146,967 | |||||||||
Less: Goodwill and other intangible assets | (13,010) | (13,043) | (13,076) | (13,109) | (13,142) | |||||||||
Tangible equity (L) | $ 141,289 | $ 141,792 | $ 139,245 | $ 137,000 | $ 133,825 | |||||||||
Shares outstanding (M) | 12,665 | 12,663 | 12,655 | 12,640 | 12,631 | |||||||||
Book value per common share (GAAP) (K)/(M) | $ 12.18 | $ 12.23 | $ 12.04 | $ 11.88 | $ 11.64 | |||||||||
Tangible book value per common share (Non-GAAP) (L)/(M) | $ 11.16 | $ 11.20 | $ 11.00 | $ 10.84 | $ 10.59 | |||||||||
The following reconciles equity to assets and tangible equity to tangible assets (Note 1): | ||||||||||||||
Stockholders' equity (N) | $ 154,299 | $ 154,835 | $ 152,321 | $ 150,109 | $ 146,967 | |||||||||
Less: Goodwill and other intangible assets | (13,010) | (13,043) | (13,076) | (13,109) | (13,142) | |||||||||
Tangible equity (O) | $ 141,289 | $ 141,792 | $ 139,245 | $ 137,000 | $ 133,825 | |||||||||
Assets (P) | $ 1,160,271 | $ 1,157,866 | $ 1,125,690 | $ 1,131,175 | $ 1,135,143 | |||||||||
Less: Goodwill and other intangible assets | (13,010) | (13,043) | (13,076) | (13,109) | (13,142) | |||||||||
Tangible assets (Q) | $ 1,147,261 | $ 1,144,823 | $ 1,112,614 | $ 1,118,066 | $ 1,122,001 | |||||||||
Period-end equity/assets (GAAP) (N)/(P) | 13.30 | % | 13.37 | % | 13.53 | % | 13.27 | % | 12.95 | % | ||||
Period-end tangible equity/tangible assets (Non-GAAP) (O)/(Q) | 12.32 | % | 12.39 | % | 12.52 | % | 12.25 | % | 11.93 | % | ||||
Note 1: Management believes that reporting tangible equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes. | |||||||||
Note 2: Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling cash-based operating activities. |
CONTACT: Edward Allen, Senior Vice President and Chief Financial Officer, 410-763-7800