Exhibit 99.1
Shore Bancshares Reports 2017 Results
EASTON, Md., Jan. 25, 2018 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ - SHBI) reported net income of $2.698 million or $0.21 per diluted common share for the fourth quarter of 2017, compared to net income of $3.412 million or $0.27 per diluted common share for the third quarter of 2017, and net income of $2.495 million or $0.20 per diluted common share for the fourth quarter of 2016. The Company reported net income of $11.262 million or $0.89 per diluted common share for fiscal year 2017, compared to net income of $9.638 million or $0.76 per diluted common share for fiscal year 2016. The 2017 fourth quarter's results included $771.1 thousand or $0.06 per diluted common share in additional income tax expense as a result of the recently enacted Tax Cuts and Jobs Act. While a permanent reduction of the corporate income tax rate will take effect in 2018, the enactment of the law during 2017 required the Company to revalue its net deferred tax asset through income tax expense in the fourth quarter.
When comparing the fourth quarter of 2017 to the third quarter of 2017, excluding the income tax reform impact, net income decreased due to a higher loan loss provision which resulted from significant loan growth at the end of the fourth quarter. When comparing the fourth quarter of 2017 to the fourth quarter of 2016, excluding the income tax reform impact, the improved results were driven by an increase in net interest income due to higher loan volume, and an increase in noninterest income, partially offset by increased noninterest expenses which included the operation of four additional branches in 2017. When comparing fiscal year 2017 to fiscal year 2016, improved earnings were due to increases in net interest income of $7.3 million and noninterest income of $1.1 million. Noninterest expenses increased $4.1 million, of which $977 thousand related to merger and acquisition costs from the branch purchase in the second quarter of 2017. Provision for credit losses increased $443 thousand as a result of increased loan production for 2017.
"This has been a stellar year for the Bank in terms of growth and core earnings" said Lloyd L. "Scott" Beatty Jr. "We experienced organic loan growth of 13%, excluding the branch acquisition in the second quarter, along with net income for the year that would have exceeded $12 million if not for the one-time tax expense due to tax reform. The achievement of expanding our footprint across the Bay Bridge and to the Eastern Shore of Virginia, all while maintaining superior customer service to our banking customers is a true testament to the level of focus and commitment our team gave to making this an exceptional year. We anticipate a positive economic outlook for 2018 which will bode well for our continued emphasis on growth and expansion."
Balance Sheet Review
Total assets were $1.394 billion at December 31, 2017, a $233.6 million, or 20.1%, increase when compared to $1.160 billion at the end of 2016. The primary factor contributing to the increase was the acquisition of three branches in the second quarter of 2017 which contributed $192.7 million of assets at December 31, 2017. Absent the branch acquisition, total assets have increased $40.9 million since December 31, 2016 which primarily resulted from increases in both gross loans of $113.9 million and investment securities of $33.2 million. These increases were funded by a decrease in interest-bearing deposits with other banks of $108.5 million which included cash received from the branch acquisition, organic deposit growth of $18.3 million and short-term borrowings of $18.5 million.
Total deposits at December 31, 2017 increased $205.3 million, or 20.6%, when compared to December 31, 2016. The increase was the direct result of the deposits acquired in the branch purchase which had a balance of $187.0 million at December 31, 2017. Excluding the acquisition, deposits increased $18.3 million.
Total stockholders' equity increased $9.5 million, or 6.1%, when compared to the end of 2016 primarily due to current year's earnings, partially offset by common stock dividends paid to shareholders of $2.8 million. At December 31, 2017, the ratio of total equity to total assets was 11.75% and the ratio of total tangible equity to total tangible assets was 9.61%, lower than the ratios of 13.30% and 12.32%, respectively, at December 31, 2016. These ratios declined primarily due to the branch acquisition which significantly increased total assets and intangible assets.
Review of Quarterly Financial Results
Net interest income was $12.4 million for the fourth quarter of 2017, compared to $12.3 million for the third quarter of 2017 and $10.0 million for the fourth quarter of 2016. The increase in net interest income when compared to the third quarter of 2017 was primarily due to organic loan growth which resulted in an increase in average loans of $28.4 million, or 2.7%. This growth was mostly added late in the fourth quarter which lessened the impact on interest income to $86 thousand resulting in 2 basis points ("bps") improvement in the net interest margin. The increase in net interest income when compared to the fourth quarter of 2016 was due to significant increases in average loans of $196.6 million, or 22.7% and investment securities of $36.5 million, or 20.8%. Total interest income on loans increased $2.2 million, or 22.3% in the fourth quarter of 2017 as compared to the fourth quarter of 2016, which was partially the result of loans acquired from the branch purchase in 2017. In addition, the yield on total earning assets increased 17 bps, while the cost of interest-bearing liabilities decreased 2bps year over year. These positive variances resulted in a net interest margin of 3.81% for the fourth quarter of 2017, compared to 3.63% for the fourth quarter of 2016.
The provision for credit losses was $545 thousand for the fourth quarter of 2017, $345 thousand for the third quarter of 2017 and $418 thousand for the fourth quarter of 2016. The higher level of provision for credit losses when comparing the fourth quarter of 2017 to both the third quarter of 2017 and fourth quarter of 2016 was primarily due to the organic growth in the loan portfolio. Net charge-offs were $59 thousand for the fourth quarter of 2017, $182 thousand for the third quarter of 2017 and $306 thousand for the fourth quarter of 2016. The decline in net charge-offs was directly related to improved credit quality particularly nonaccrual loans which exhibited a decrease when compared to the third quarter of 2017 of $1.3 million and $4.0 million when compared to the fourth quarter of 2016. The ratio of annualized net charge-offs to average loans was 0.02% for the fourth quarter of 2017, 0.07% for the third quarter of 2017 and 0.14% for the fourth quarter of 2016. The ratio of the allowance for credit losses to period-end loans for both December 31, 2017 and September 30, 2017 was 0.89% and 1.00% at December 31, 2016.
At December 31, 2017, nonperforming assets, excluding TDRs, were $7.4 million, a decrease of $699 thousand, or 8.6%, when compared to September 30, 2017 and a decrease of $4.1 million, or 35.4%, when compared to December 31, 2016. Additionally, accruing TDRs were $13.3 million at December 31, 2017, a decrease of $167 thousand, or 1.2%, when compared to September 30, 2017 and an increase of $326 thousand, or 2.5%, when compared to December 31, 2016. The positive trend in nonperforming assets when comparing December 31, 2017 to both September 30, 2017 and December 31, 2016 was mainly accomplished through continued workout efforts and charge-offs over the last 12 months. At December 31, 2017, the ratio of nonperforming assets to total assets was 0.53%, lower than the 0.59% at September 30, 2017 and 0.99% at December 31, 2016. In addition, the ratio of accruing TDRs to total assets at December 31, 2017 was 0.96%, compared to 0.98% at September 30, 2017 and 1.12% at December 31, 2016, which reflects improved credit quality in the loan portfolio.
Total noninterest income for the fourth quarter of 2017 decreased $86 thousand, or 1.9%, when compared to the third quarter of 2017 and increased $283 thousand, or 7.0%, when compared to the fourth quarter of 2016. The decrease from the third quarter of 2017 was primarily due to a decline in insurance agency commissions of $190 thousand, not unusual during the last quarter of the year, partially offset by increases in banking fees and trust and investment fee income. The increase from the fourth quarter of 2016 of $283 thousand was the result of increases in all noninterest income categories, specifically insurance agency commissions of $101 thousand and service charges on deposit accounts of $88 thousand.
Total noninterest expense for the fourth quarter of 2017 decreased $88 thousand, or 0.8%, when compared to the third quarter of 2017 and increased $1.4 million, or 15.2%, when compared to the fourth quarter of 2016. The decrease from the third quarter of 2017 was primarily due to lower costs associated with other real estate owned, legal and professional fees, and employee benefits, partially offset by higher salaries and wages. The increase from the fourth quarter of 2016 was primarily due to operating four additional bank branches which increased salaries and wages, employee benefits and occupancy expenses and also resulted in higher FDIC insurance premiums.
Review of 2017 Financial Results
Net interest income for 2017 was $45.5 million, an increase of $7.3 million, or 19.0%, when compared to 2016 primarily due to an increase in average loans of $158.0 million, or 19.1%. The significant increase in loans generated higher interest income of approximately $6.5 million, or 17.4%. Although the yields on loans declined compared to 2016, the funding of loan growth with lower yielding assets, coupled with higher yielding investment securities resulted in a higher overall yield on earning assets of 17bps. This improvement in yield along with the decrease in rates on interest bearing deposits resulted in an improved net interest margin to 3.76% for fiscal 2017 from 3.56% for fiscal 2016.
The provision for credit losses for 2017 and 2016 was $2.3 million and $1.8 million, respectively, while net charge-offs were $1.2 million and $1.4 million, respectively. The ratio of annualized net charge-offs to average loans was 0.13% for 2017 and 0.17% for 2016.
Total noninterest income for 2017 increased $1.1 million, or 6.6%, when compared to 2016. The increase was primarily due to increases in service charges on deposit accounts of $163 thousand, insurance agency commissions of $286 thousand, trust and investment fee income of $90 thousand and a premium on an insurance investment of $387 thousand.
Total noninterest expense for 2017 increased $4.1 million, or 10.9%, when compared to 2016. The increase was primarily due to the branch purchase in the second quarter of 2017 which resulted in acquisition costs of $977 thousand and the cost of operating those branches for seven months. In addition, the increase was due to higher salaries/wages and employee benefits as a result of a decreased assessment rate which were partially offset by a decrease in FDIC insurance premiums.
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. | ||||||||||||
Financial Highlights | ||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||
December 31, | December 31, | |||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | |||||||
Net interest income | $ 12,369 | $ 9,965 | 24.1 | % | $ 45,528 | $ 38,249 | 19.0 | % | ||||
Provision for credit losses | 545 | 418 | 30.4 | 2,291 | 1,848 | 24.0 | ||||||
Noninterest income | 4,339 | 4,056 | 7.0 | 17,750 | 16,645 | 6.6 | ||||||
Noninterest expense | 10,632 | 9,226 | 15.2 | 41,202 | 37,147 | 10.9 | ||||||
Income before income taxes | 5,531 | 4,377 | 26.4 | 19,785 | 15,899 | 24.4 | ||||||
Income tax expense | 2,833 | 1,882 | 50.5 | 8,523 | 6,261 | 36.1 | ||||||
Net income | $ 2,698 | $ 2,495 | 8.1 | $ 11,262 | $ 9,638 | 16.8 | ||||||
Return on average assets | 0.78 | % | 0.86 | % | (8) | bp | 0.87 | % | 0.84 | % | 3 | bp |
Return on average equity | 6.53 | 6.39 | 14 | 7.05 | 6.32 | 73 | ||||||
Return on average tangible equity (1) | 8.36 | 7.03 | 133 | 8.36 | 6.97 | 139 | ||||||
Net interest margin | 3.81 | 3.63 | 18 | 3.76 | 3.56 | 20 | ||||||
Efficiency ratio - GAAP | 63.63 | 65.80 | (217) | 65.11 | 67.67 | (256) | ||||||
Efficiency ratio - Non-GAAP (1) | 62.74 | 65.28 | (254) | 64.38 | 67.23 | (285) | ||||||
PER SHARE DATA | ||||||||||||
Basic net income per common share | $ 0.21 | $ 0.20 | 5.0 | % | $ 0.89 | $ 0.76 | 17.1 | % | ||||
Diluted net income per common share | 0.21 | 0.20 | 5.0 | 0.89 | 0.76 | 17.1 | ||||||
Dividends paid per common share | 0.07 | 0.05 | 40.0 | 0.22 | 0.14 | 57.1 | ||||||
Book value per common share at period end | 12.91 | 12.18 | 6.0 | |||||||||
Tangible book value per common share at period end (1) | 10.31 | 11.16 | (7.6) | |||||||||
Market value at period end | 16.70 | 15.25 | 9.5 | |||||||||
Market range: | ||||||||||||
High | 18.49 | 16.90 | 9.4 | 18.49 | 16.90 | 9.4 | ||||||
Low | 15.74 | 11.49 | 37.0 | 14.64 | 10.23 | 43.1 | ||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||
Loans | $ 1,062,980 | $ 866,360 | 22.7 | % | $ 983,484 | $ 825,475 | 19.1 | % | ||||
Investment securities | 211,910 | 175,417 | 20.8 | 201,879 | 196,236 | 2.9 | ||||||
Earning assets | 1,294,768 | 1,100,197 | 17.7 | 1,216,182 | 1,079,954 | 12.6 | ||||||
Assets | 1,378,553 | 1,159,131 | 18.9 | 1,287,751 | 1,141,142 | 12.8 | ||||||
Deposits | 1,202,260 | 993,918 | 21.0 | 1,118,075 | 976,881 | 14.5 | ||||||
Stockholders' equity | 163,893 | 155,367 | 5.5 | 159,741 | 152,426 | 4.8 | ||||||
CREDIT QUALITY DATA | ||||||||||||
Net charge-offs | $ 59 | $ 306 | (80.7) | % | $ 1,236 | $ 1,438 | (14.0) | % | ||||
Nonaccrual loans | $ 4,971 | $ 8,972 | (44.6) | |||||||||
Loans 90 days past due and still accruing | 639 | 20 | 3,095.0 | |||||||||
Other real estate owned | 1,794 | 2,477 | (27.6) | |||||||||
Total nonperforming assets | 7,404 | 11,469 | (35.4) | |||||||||
Accruing troubled debt restructurings (TDRs) | 13,326 | 13,000 | 2.5 | |||||||||
Total nonperforming assets and accruing TDRs | $ 20,730 | $ 24,469 | (15.3) | |||||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||
Period-end equity to assets | 11.75 | % | 13.30 | % | (155) | bp | ||||||
Period-end tangible equity to tangible assets (1) | 9.61 | 12.32 | (271) | |||||||||
Annualized net charge-offs to average loans | 0.02 | 0.14 | (12) | 0.13 | % | 0.17 | % | (4) | bp | |||
Allowance for credit losses as a percent of: | ||||||||||||
Period-end loans | 0.89 | 1.00 | (11) | |||||||||
Nonaccrual loans | 196.76 | 97.26 | 9,950 | |||||||||
Nonperforming assets | 132.10 | 76.08 | 5,602 | |||||||||
Accruing TDRs | 73.40 | 67.12 | 628 | |||||||||
Nonperforming assets and accruing TDRs | 47.18 | 35.66 | 1,152 | |||||||||
As a percent of total loans: | ||||||||||||
Nonaccrual loans | 0.45 | 1.03 | (58) | |||||||||
Accruing TDRs | 1.22 | 1.49 | (27) | |||||||||
Nonaccrual loans and accruing TDRs | 1.67 | 2.52 | (85) | |||||||||
As a percent of total loans+other real estate owned: | ||||||||||||
Nonperforming assets | 0.68 | 1.31 | (63) | |||||||||
Nonperforming assets and accruing TDRs | 1.89 | 2.80 | (91) | |||||||||
As a percent of total assets: | ||||||||||||
Nonaccrual loans | 0.36 | 0.77 | (41) | |||||||||
Nonperforming assets | 0.53 | 0.99 | (46) | |||||||||
Accruing TDRs | 0.96 | 1.12 | (16) | |||||||||
Nonperforming assets and accruing TDRs | 1.49 | 2.11 | (62) | |||||||||
(1) See the reconciliation table on page 12 of 12. | ||||||||||||
Shore Bancshares, Inc. | ||||||
Consolidated Balance Sheets | ||||||
(In thousands, except per share data) | ||||||
December 31, 2017 | ||||||
December 31, | December 31, | compared to | ||||
2017 | 2016 | December 31, 2016 | ||||
ASSETS | ||||||
Cash and due from banks | $ 21,534 | $ 14,596 | 47.5 | % | ||
Interest-bearing deposits with other banks | 10,286 | 61,342 | (83.2) | |||
Cash and cash equivalents | 31,820 | 75,938 | (58.1) | |||
Investment securities available for sale (at fair value) | 196,955 | 163,798 | 20.2 | |||
Investment securities held to maturity | 6,247 | 6,808 | (8.2) | |||
Loans | 1,093,514 | 871,525 | 25.5 | |||
Less: allowance for credit losses | (9,781) | (8,726) | 12.1 | |||
Loans, net | 1,083,733 | 862,799 | 25.6 | |||
Premises and equipment, net | 23,054 | 16,558 | 39.2 | |||
Goodwill | 28,200 | 11,931 | 136.4 | |||
Other intangible assets, net | 4,719 | 1,079 | 337.3 | |||
Other real estate owned, net | 1,794 | 2,477 | (27.6) | |||
Other assets | 17,352 | 18,883 | (8.1) | |||
Total assets | $ 1,393,874 | $ 1,160,271 | 20.1 | |||
LIABILITIES | ||||||
Noninterest-bearing deposits | $ 328,322 | $ 261,575 | 25.5 | |||
Interest-bearing deposits | 874,459 | 735,914 | 18.8 | |||
Total deposits | 1,202,781 | 997,489 | 20.6 | |||
Short-term borrowings | 21,734 | 3,203 | 578.6 | |||
Accrued expenses and other liabilities | 5,609 | 5,280 | 6.2 | |||
Total liabilities | 1,230,124 | 1,005,972 | 22.3 | |||
STOCKHOLDERS' EQUITY | ||||||
Common stock, par value $0.01; authorized | ||||||
35,000,000 shares | 127 | 127 | - | |||
Additional paid in capital | 65,256 | 64,201 | 1.6 | |||
Retained earnings | 99,437 | 90,964 | 9.3 | |||
Accumulated other comprehensive loss | (1,070) | (993) | (7.8) | |||
Total stockholders' equity | 163,750 | 154,299 | 6.1 | |||
Total liabilities and stockholders' equity | $ 1,393,874 | $ 1,160,271 | 20.1 | |||
Period-end common shares outstanding | 12,688 | 12,665 | 0.2 | |||
Book value per common share | $ 12.91 | $ 12.18 | 6.0 | |||
Shore Bancshares, Inc. | ||||||||||
Consolidated Statements of Income | ||||||||||
(In thousands, except per share data) | ||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||
December 31, | December 31, | |||||||||
2017 | 2016 | % Change | 2017 | 2016 | % Change | |||||
INTEREST INCOME | ||||||||||
Interest and fees on loans | $ 11,855 | $ 9,679 | 22.5 | % | $ 43,617 | $ 37,155 | 17.4 | % | ||
Interest and dividends on investment securities: | ||||||||||
Taxable | 1,048 | 747 | 40.3 | 3,847 | 3,195 | 20.4 | ||||
Tax-exempt | - | 1 | (100.0) | 3 | 7 | (57.1) | ||||
Interest on federal funds sold | - | - | - | - | 6 | (100.0) | ||||
Interest on deposits with other banks | 65 | 78 | (16.7) | 334 | 289 | 15.6 | ||||
Total interest income | 12,968 | 10,505 | 23.4 | 47,801 | 40,652 | 17.6 | ||||
INTEREST EXPENSE | ||||||||||
Interest on deposits | 586 | 537 | 9.1 | 2,242 | 2,389 | (6.2) | ||||
Interest on short-term borrowings | 13 | 3 | 333.3 | 31 | 14 | 121.4 | ||||
Total interest expense | 599 | 540 | 10.9 | 2,273 | 2,403 | (5.4) | ||||
NET INTEREST INCOME | 12,369 | 9,965 | 24.1 | 45,528 | 38,249 | 19.0 | ||||
Provision for credit losses | 545 | 418 | 30.4 | 2,291 | 1,848 | 24.0 | ||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||
FOR CREDIT LOSSES | 11,824 | 9,547 | 23.9 | 43,237 | 36,401 | 18.8 | ||||
NONINTEREST INCOME | ||||||||||
Service charges on deposit accounts | 971 | 883 | 10.0 | 3,628 | 3,465 | 4.7 | ||||
Trust and investment fee income | 410 | 369 | 11.1 | 1,532 | 1,442 | 6.2 | ||||
Gains on sales and calls of investment securities | - | - | - | 5 | 30 | (83.3) | ||||
Insurance agency commissions | 1,898 | 1,797 | 5.6 | 8,837 | 8,551 | 3.3 | ||||
Other noninterest income | 1,060 | 1,007 | 5.3 | 3,748 | 3,157 | 18.7 | ||||
Total noninterest income | 4,339 | 4,056 | 7.0 | 17,750 | 16,645 | 6.6 | ||||
NONINTEREST EXPENSE | ||||||||||
Salaries and wages | 5,503 | 4,381 | 25.6 | 20,011 | 17,626 | 13.5 | ||||
Employee benefits | 1,081 | 906 | 19.3 | 4,645 | 3,993 | 16.3 | ||||
Occupancy expense | 746 | 613 | 21.7 | 2,696 | 2,452 | 10.0 | ||||
Furniture and equipment expense | 232 | 235 | (1.3) | 1,035 | 963 | 7.5 | ||||
Data processing | 871 | 857 | 1.6 | 3,680 | 3,496 | 5.3 | ||||
Directors' fees | 99 | 156 | (36.5) | 380 | 511 | (25.6) | ||||
Amortization of intangible assets | 112 | 32 | 250.0 | 315 | 131 | 140.5 | ||||
FDIC insurance premium expense | 201 | 42 | 378.6 | 599 | 696 | (13.9) | ||||
Other real estate owned expenses, net | 113 | 214 | (47.2) | 471 | 505 | (6.7) | ||||
Legal and professional fees | 453 | 441 | 2.7 | 2,308 | 1,875 | 23.1 | ||||
Other noninterest expenses | 1,221 | 1,349 | (9.5) | 5,062 | 4,899 | 3.3 | ||||
Total noninterest expense | 10,632 | 9,226 | 15.2 | 41,202 | 37,147 | 10.9 | ||||
Income before income taxes | 5,531 | 4,377 | 26.4 | 19,785 | 15,899 | 24.4 | ||||
Income tax expense | 2,833 | 1,882 | 50.5 | 8,523 | 6,261 | 36.1 | ||||
NET INCOME | $ 2,698 | $ 2,495 | 8.1 | $ 11,262 | $ 9,638 | 16.8 | ||||
Weighted average shares outstanding - basic | 12,688 | 12,665 | 0.2 | 12,682 | 12,652 | 0.2 | ||||
Weighted average shares outstanding - diluted | 12,750 | 12,686 | 0.5 | 12,718 | 12,670 | 0.4 | ||||
Basic net income per common share | $ 0.21 | $ 0.20 | 5.0 | $ 0.89 | $ 0.76 | 17.1 | ||||
Diluted net income per common share | 0.21 | 0.20 | 5.0 | 0.89 | 0.76 | 17.1 | ||||
Dividends paid per common share | 0.07 | 0.05 | 40.0 | 0.22 | 0.14 | 57.1 | ||||
Shore Bancshares, Inc. | ||||||||||||||||
Consolidated Average Balance Sheets | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||
balance | rate | balance | rate | balance | rate | balance | rate | |||||||||
Earning assets | ||||||||||||||||
Loans (1), (2), (3) | $ 1,062,980 | 4.45 | % | $ 866,360 | 4.47 | % | $ 983,484 | 4.46 | % | $ 825,475 | 4.52 | % | ||||
Investment securities (1) | ||||||||||||||||
Taxable | 211,910 | 1.98 | 175,207 | 1.70 | 201,792 | 1.91 | 196,026 | 1.63 | ||||||||
Tax-exempt | - | - | 210 | 5.30 | 87 | 5.42 | 210 | 5.30 | ||||||||
Federal funds sold | - | - | 27 | 0.38 | - | - | 1,764 | 0.34 | ||||||||
Interest-bearing deposits | 19,878 | 1.30 | 58,393 | 0.54 | 30,819 | 1.08 | 56,479 | 0.51 | ||||||||
Total earning assets | 1,294,768 | 3.99 | % | 1,100,197 | 3.82 | % | 1,216,182 | 3.95 | % | 1,079,954 | 3.78 | % | ||||
Cash and due from banks | 18,589 | 16,707 | 15,896 | 15,844 | ||||||||||||
Other assets | 74,700 | 51,065 | 64,854 | 53,899 | ||||||||||||
Allowance for credit losses | (9,504) | (8,838) | (9,181) | (8,555) | ||||||||||||
Total assets | $ 1,378,553 | $ 1,159,131 | $ 1,287,751 | $ 1,141,142 | ||||||||||||
Interest-bearing liabilities | ||||||||||||||||
Demand deposits | $ 222,321 | 0.24 | % | $ 197,810 | 0.12 | % | $ 210,139 | 0.20 | % | $ 194,062 | 0.12 | % | ||||
Money market and savings deposits | 382,438 | 0.12 | 272,786 | 0.13 | 339,971 | 0.12 | 265,323 | 0.13 | ||||||||
Certificates of deposit $100,000 or more | 110,458 | 0.49 | 122,725 | 0.56 | 118,723 | 0.51 | 127,468 | 0.64 | ||||||||
Other time deposits | 158,241 | 0.49 | 141,641 | 0.60 | 152,959 | 0.53 | 148,671 | 0.67 | ||||||||
Interest-bearing deposits | 873,458 | 0.27 | 734,962 | 0.29 | 821,792 | 0.27 | 735,524 | 0.32 | ||||||||
Short-term borrowings | 6,087 | 0.86 | 3,908 | 0.25 | 4,525 | 0.68 | 5,753 | 0.24 | ||||||||
Total interest-bearing liabilities | 879,545 | 0.27 | % | 738,870 | 0.29 | % | 826,317 | 0.28 | % | 741,277 | 0.32 | % | ||||
Noninterest-bearing deposits | 328,802 | 258,956 | 296,283 | 241,357 | ||||||||||||
Accrued expenses and other liabilities | 6,313 | 5,938 | 5,410 | 6,082 | ||||||||||||
Stockholders' equity | 163,893 | 155,367 | 159,741 | 152,426 | ||||||||||||
Total liabilities and stockholders' equity | $ 1,378,553 | $ 1,159,131 | $ 1,287,751 | $ 1,141,142 | ||||||||||||
Net interest spread | 3.72 | % | 3.53 | % | 3.67 | % | 3.46 | % | ||||||||
Net interest margin | 3.81 | % | 3.63 | % | 3.76 | % | 3.56 | % | ||||||||
(1) All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 35.0%, exclusive of the alternative minimum tax rate | ||||||||||||||||
and nondeductible interest expense. | ||||||||||||||||
(2) Average loan balances include nonaccrual loans. | ||||||||||||||||
(3) Interest income on loans includes amortized loan fees, net of costs, and all are included in the yield calculations. | ||||||||||||||||
Shore Bancshares, Inc. | ||||||||||||||
Financial Highlights By Quarter | ||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||
4th quarter | 3rd quarter | 2nd quarter | 1st quarter | 4th quarter | 4Q 17 | 4Q 17 | ||||||||
2017 | 2017 | 2017 | 2017 | 2016 | compared to | compared to | ||||||||
(4Q 17) | (3Q 17) | (2Q 17) | (1Q 17) | (4Q 16) | 3Q 17 | 4Q 16 | ||||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||||
Taxable-equivalent net interest income | $ 12,429 | $ 12,384 | $ 10,961 | $ 9,994 | $ 10,029 | 0.4 | % | 23.9 | % | |||||
Less: Taxable-equivalent adjustment | 60 | 58 | 61 | 61 | 64 | 3.4 | (6.3) | |||||||
Net interest income | 12,369 | 12,326 | 10,900 | 9,933 | 9,965 | 0.3 | 24.1 | |||||||
Provision for credit losses | 545 | 345 | 974 | 427 | 418 | 58.0 | 30.4 | |||||||
Noninterest income | 4,339 | 4,425 | 4,179 | 4,807 | 4,056 | (1.9) | 7.0 | |||||||
Noninterest expense | 10,632 | 10,720 | 10,199 | 9,651 | 9,226 | (0.8) | 15.2 | |||||||
Income before income taxes | 5,531 | 5,686 | 3,906 | 4,662 | 4,377 | (2.7) | 26.4 | |||||||
Income tax expense | 2,833 | 2,274 | 1,554 | 1,862 | 1,882 | 24.6 | 50.5 | |||||||
Net income | $ 2,698 | $ 3,412 | $ 2,352 | $ 2,800 | $ 2,495 | (20.9) | 8.1 | |||||||
Return on average assets | 0.78 | % | 0.98 | % | 0.76 | % | 0.99 | % | 0.86 | % | (20) | bp | (8) | bp |
Return on average equity | 6.53 | 8.48 | 5.93 | 7.27 | 6.39 | (195) | 14 | |||||||
Return on average tangible equity (1) | 8.36 | 10.84 | 6.55 | 7.98 | 7.03 | (248) | 133 | |||||||
Net interest margin | 3.81 | 3.79 | 3.73 | 3.71 | 3.63 | 2 | 18 | |||||||
Efficiency ratio - GAAP | 63.63 | 64.00 | 67.64 | 65.47 | 65.80 | (37) | (217) | |||||||
Efficiency ratio - Non-GAAP (1) | 62.74 | 63.11 | 67.00 | 64.98 | 65.28 | (37) | (254) | |||||||
PER SHARE DATA | ||||||||||||||
Basic net income per common share | $ 0.21 | $ 0.27 | $ 0.19 | $ 0.22 | $ 0.20 | (22.2) | % | 5.0 | % | |||||
Diluted net income per common share | 0.21 | 0.27 | 0.19 | 0.22 | 0.20 | (22.2) | 5.0 | |||||||
Dividends paid per common share | 0.07 | 0.05 | 0.05 | 0.05 | 0.05 | 40.0 | 40.0 | |||||||
Book value per common share at period end | 12.91 | 12.82 | 12.61 | 12.44 | 12.18 | 0.7 | 6.0 | |||||||
Tangible book value per common share at period end (1) | 10.31 | 10.24 | 10.07 | 11.41 | 11.16 | 0.7 | (7.6) | |||||||
Market value at period end | 16.70 | 16.65 | 16.45 | 16.71 | 15.25 | 0.3 | 9.5 | |||||||
Market range: | ||||||||||||||
High | 18.49 | 17.34 | 17.53 | 17.92 | 16.90 | 6.6 | 9.4 | |||||||
Low | 15.74 | 15.97 | 15.17 | 14.64 | 11.49 | (1.4) | 37.0 | |||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||
Loans | $ 1,062,980 | $ 1,034,553 | $ 953,049 | $ 880,791 | $ 866,360 | 2.7 | % | 22.7 | % | |||||
Investment securities | 211,910 | 218,675 | 198,302 | 178,074 | 175,417 | (3.1) | 20.8 | |||||||
Earning assets | 1,294,768 | 1,295,432 | 1,178,507 | 1,092,934 | 1,100,197 | (0.1) | 17.7 | |||||||
Assets | 1,378,553 | 1,377,975 | 1,242,933 | 1,148,757 | 1,159,131 | 0.0 | 18.9 | |||||||
Deposits | 1,202,260 | 1,210,894 | 1,072,758 | 982,956 | 993,918 | (0.7) | 21.0 | |||||||
Stockholders' equity | 163,893 | 159,551 | 159,165 | 156,274 | 155,367 | 2.7 | 5.5 | |||||||
CREDIT QUALITY DATA | ||||||||||||||
Net charge-offs | $ 59 | $ 182 | $ 769 | $ 226 | $ 306 | (67.6) | % | (80.7) | % | |||||
Nonaccrual loans | $ 4,971 | $ 6,289 | $ 7,157 | $ 8,729 | $ 8,972 | (21.0) | (44.6) | |||||||
Loans 90 days past due and still accruing | 639 | 5 | 314 | 118 | 20 | 12,680.0 | 3,095.0 | |||||||
Other real estate owned | 1,794 | 1,809 | 2,302 | 2,354 | 2,477 | (0.8) | (27.6) | |||||||
Total nonperforming assets | $ 7,404 | $ 8,103 | $ 9,773 | $ 11,201 | $ 11,469 | (8.6) | (35.4) | |||||||
Accruing troubled debt restructurings (TDRs) | $ 13,326 | $ 13,493 | $ 12,124 | $ 12,782 | $ 13,000 | (1.2) | 2.5 | |||||||
Total nonperforming assets and accruing TDRs | $ 20,730 | $ 21,596 | $ 21,897 | $ 23,983 | $ 24,469 | (4.0) | (15.3) | |||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||||
Period-end equity to assets | 11.75 | % | 11.82 | % | 11.74 | % | 13.51 | % | 13.30 | % | (7) | bp | (155) | bp |
Period-end tangible equity to tangible assets (1) | 9.61 | 9.67 | 9.60 | 12.54 | 12.32 | (6) | (271) | |||||||
Annualized net charge-offs to average loans | 0.02 | 0.07 | 0.32 | 0.10 | 0.14 | (5) | (12) | |||||||
Allowance for credit losses as a percent of: | ||||||||||||||
Period-end loans | 0.89 | 0.89 | 0.88 | 1.00 | 1.00 | - | (11) | |||||||
Nonaccrual loans | 196.76 | 147.80 | 127.60 | 102.27 | 97.26 | 4,896 | 9,950 | |||||||
Nonperforming assets | 132.10 | 114.71 | 93.44 | 79.70 | 76.08 | 1,739 | 5,602 | |||||||
Accruing TDRs | 73.40 | 68.89 | 75.32 | 69.84 | 67.12 | 451 | 628 | |||||||
Nonperforming assets and accruing TDRs | 47.18 | 43.04 | 41.70 | 37.22 | 35.66 | 414 | 1,152 | |||||||
As a percent of total loans: | ||||||||||||||
Nonaccrual loans | 0.45 | 0.60 | 0.69 | 0.98 | 1.03 | (15) | (58) | |||||||
Accruing TDRs | 1.22 | 1.29 | 1.17 | 1.43 | 1.49 | (7) | (27) | |||||||
Nonaccrual loans and accruing TDRs | 1.67 | 1.89 | 1.86 | 2.41 | 2.52 | (22) | (85) | |||||||
As a percent of total loans+other real estate owned: | ||||||||||||||
Nonperforming assets | 0.68 | 0.77 | 0.94 | 1.25 | 1.31 | (9) | (63) | |||||||
Nonperforming assets and accruing TDRs | 1.89 | 2.06 | 2.11 | 2.68 | 2.80 | (17) | (91) | |||||||
As a percent of total assets: | ||||||||||||||
Nonaccrual loans | 0.36 | 0.46 | 0.53 | 0.75 | 0.77 | (10) | (41) | |||||||
Nonperforming assets | 0.53 | 0.59 | 0.72 | 0.96 | 0.99 | (6) | (46) | |||||||
Accruing TDRs | 0.96 | 0.98 | 0.89 | 1.10 | 1.12 | (2) | (16) | |||||||
Nonperforming assets and accruing TDRs | 1.49 | 1.57 | 1.61 | 2.06 | 2.11 | (8) | (62) | |||||||
(1) See the reconciliation table on page 12 of 12. | ||||||||||||||
Shore Bancshares, Inc. | ||||||||||||||
Consolidated Statements of Income By Quarter | ||||||||||||||
(In thousands, except per share data) | ||||||||||||||
4Q 17 | 4Q 17 | |||||||||||||
compared to | compared to | |||||||||||||
4Q 17 | 3Q 17 | 2Q 17 | 1Q 17 | 4Q 16 | 3Q 17 | 4Q 16 | ||||||||
INTEREST INCOME | ||||||||||||||
Interest and fees on loans | $ 11,855 | $ 11,771 | $ 10,441 | $ 9,550 | $ 9,679 | 0.7 | % | 22.5 | % | |||||
Interest and dividends on investment securities: | ||||||||||||||
Taxable | 1,048 | 1,035 | 937 | 827 | 747 | 1.3 | 40.3 | |||||||
Tax-exempt | - | - | 1 | 2 | 1 | - | (100.0) | |||||||
Interest on deposits with other banks | 65 | 131 | 70 | 68 | 78 | (50.4) | (16.7) | |||||||
Total interest income | 12,968 | 12,937 | 11,449 | 10,447 | 10,505 | 0.2 | 23.4 | |||||||
INTEREST EXPENSE | ||||||||||||||
Interest on deposits | 586 | 607 | 538 | 511 | 537 | (3.5) | 9.1 | |||||||
Interest on short-term borrowings | 13 | 4 | 11 | 3 | 3 | 225.0 | 333.3 | |||||||
Total interest expense | 599 | 611 | 549 | 514 | 540 | (2.0) | 10.9 | |||||||
NET INTEREST INCOME | 12,369 | 12,326 | 10,900 | 9,933 | 9,965 | 0.3 | 24.1 | |||||||
Provision for credit losses | 545 | 345 | 974 | 427 | 418 | 58.0 | 30.4 | |||||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||||||
FOR CREDIT LOSSES | 11,824 | 11,981 | 9,926 | 9,506 | 9,547 | (1.3) | 23.9 | |||||||
NONINTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 971 | 945 | 878 | 834 | 883 | 2.8 | 10.0 | |||||||
Trust and investment fee income | 410 | 389 | 372 | 361 | 369 | 5.4 | 11.1 | |||||||
Gains on sales and calls of investment securities | - | 5 | - | - | - | (100.0) | - | |||||||
Insurance agency commissions | 1,898 | 2,088 | 2,032 | 2,819 | 1,797 | (9.1) | 5.6 | |||||||
Other noninterest income | 1,060 | 998 | 897 | 793 | 1,007 | 6.2 | 5.3 | |||||||
Total noninterest income | 4,339 | 4,425 | 4,179 | 4,807 | 4,056 | (1.9) | 7.0 | |||||||
NONINTEREST EXPENSE | ||||||||||||||
Salaries and wages | 5,503 | 5,203 | 4,803 | 4,502 | 4,381 | 5.8 | 25.6 | |||||||
Employee benefits | 1,081 | 1,197 | 1,127 | 1,240 | 906 | (9.7) | 19.3 | |||||||
Occupancy expense | 746 | 696 | 629 | 625 | 613 | 7.2 | 21.7 | |||||||
Furniture and equipment expense | 232 | 286 | 284 | 233 | 235 | (18.9) | (1.3) | |||||||
Data processing | 871 | 922 | 1,015 | 872 | 857 | (5.5) | 1.6 | |||||||
Directors' fees | 99 | 99 | 102 | 80 | 156 | - | (36.5) | |||||||
Amortization of intangible assets | 112 | 115 | 55 | 33 | 32 | (2.6) | 250.0 | |||||||
FDIC insurance premium expense | 201 | 189 | 45 | 164 | 42 | 6.3 | 378.6 | |||||||
Other real estate owned expenses, net | 113 | 172 | 108 | 55 | 214 | (34.3) | (47.2) | |||||||
Legal and professional fees | 453 | 493 | 702 | 660 | 441 | (8.1) | 2.7 | |||||||
Other noninterest expenses | 1,221 | 1,348 | 1,329 | 1,187 | 1,349 | (9.4) | (9.5) | |||||||
Total noninterest expense | 10,632 | 10,720 | 10,199 | 9,651 | 9,226 | (0.8) | 15.2 | |||||||
Income before income taxes | 5,531 | 5,686 | 3,906 | 4,662 | 4,377 | (2.7) | 26.4 | |||||||
Income tax expense | 2,833 | 2,274 | 1,554 | 1,862 | 1,882 | 24.6 | 50.5 | |||||||
NET INCOME | $ 2,698 | $ 3,412 | $ 2,352 | $ 2,800 | $ 2,495 | (20.9) | 8.1 | |||||||
Weighted average shares outstanding - basic | 12,688 | 12,687 | 12,681 | 12,670 | 12,665 | 0.0 | 0.2 | |||||||
Weighted average shares outstanding - diluted | 12,750 | 12,718 | 12,732 | 12,707 | 12,686 | 0.3 | 0.5 | |||||||
Basic net income per common share | $ 0.21 | $ 0.27 | $ 0.19 | $ 0.22 | $ 0.20 | (22.2) | 5.0 | |||||||
Diluted net income per common share | 0.21 | 0.27 | 0.19 | 0.22 | 0.20 | (22.2) | 5.0 | |||||||
Dividends paid per common share | 0.07 | 0.05 | 0.05 | 0.05 | 0.05 | 40.0 | 40.0 | |||||||
Shore Bancshares, Inc. | ||||||||||||||||||||||||
Consolidated Average Balance Sheets By Quarter | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Average balance | ||||||||||||||||||||||||
4Q 17 | 4Q 17 | |||||||||||||||||||||||
compared to | compared to | |||||||||||||||||||||||
4Q 17 | 3Q 17 | 2Q 17 | 1Q 17 | 4Q 16 | 3Q 17 | 4Q 16 | ||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||||
balance | rate | balance | rate | balance | rate | balance | rate | balance | rate | |||||||||||||||
Earning assets | ||||||||||||||||||||||||
Loans (1), (2), (3) | $ 1,062,980 | 4.45 | % | $ 1,034,553 | 4.54 | % | $ 953,049 | 4.42 | % | $ 880,791 | 4.43 | % | $ 866,360 | 4.47 | % | 2.7 | % | 22.7 | % | |||||
Investment securities (1) | ||||||||||||||||||||||||
Taxable | 211,910 | 1.98 | 218,675 | 1.89 | 198,161 | 1.89 | 177,864 | 1.86 | 175,207 | 1.70 | (3.1) | 20.9 | ||||||||||||
Tax-exempt | - | - | - | - | 141 | 5.36 | 210 | 5.38 | 210 | 5.30 | - | (100.0) | ||||||||||||
Federal funds sold | - | - | - | - | - | - | - | - | 27 | 0.38 | - | (100.0) | ||||||||||||
Interest-bearing deposits | 19,878 | 1.30 | 42,204 | 1.23 | 27,156 | 1.05 | 34,069 | 0.80 | 58,393 | 0.54 | (52.9) | (66.0) | ||||||||||||
Total earning assets | 1,294,768 | 3.99 | % | 1,295,432 | 3.98 | % | 1,178,507 | 3.92 | % | 1,092,934 | 3.90 | % | 1,100,197 | 3.82 | % | (0.1) | 17.7 | |||||||
Cash and due from banks | 18,589 | 16,232 | 14,798 | 13,907 | 16,707 | 14.5 | 11.3 | |||||||||||||||||
Other assets | 74,700 | 75,611 | 58,692 | 50,763 | 51,065 | (1.2) | 46.3 | |||||||||||||||||
Allowance for credit losses | (9,504) | (9,300) | (9,064) | (8,847) | (8,838) | 2.2 | 7.5 | |||||||||||||||||
Total assets | $ 1,378,553 | $ 1,377,975 | $ 1,242,933 | $ 1,148,757 | $ 1,159,131 | - | 18.9 | |||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||
Demand deposits | $ 222,321 | 0.24 | % | $ 224,180 | 0.23 | % | $ 198,593 | 0.16 | % | $ 195,005 | 0.14 | % | $ 197,810 | 0.12 | % | (0.8) | 12.4 | |||||||
Money market and savings deposits | 382,438 | 0.12 | 378,711 | 0.12 | 320,967 | 0.12 | 276,175 | 0.13 | 272,786 | 0.13 | 1.0 | 40.2 | ||||||||||||
Certificates of deposit $100,000 or more | 110,458 | 0.49 | 123,538 | 0.50 | 121,967 | 0.51 | 118,970 | 0.54 | 122,725 | 0.56 | (10.6) | (10.0) | ||||||||||||
Other time deposits | 158,241 | 0.49 | 164,459 | 0.50 | 150,953 | 0.55 | 137,832 | 0.58 | 141,641 | 0.60 | (3.8) | 11.7 | ||||||||||||
Interest-bearing deposits | 873,458 | 0.27 | 890,888 | 0.27 | 792,480 | 0.27 | 727,982 | 0.28 | 734,962 | 0.29 | (2.0) | 18.8 | ||||||||||||
Short-term borrowings | 6,087 | 0.86 | 2,274 | 0.62 | 5,589 | 0.82 | 4,150 | 0.27 | 3,908 | 0.25 | 167.7 | 55.8 | ||||||||||||
Total interest-bearing liabilities | 879,545 | 0.27 | % | 893,162 | 0.27 | % | 798,069 | 0.28 | % | 732,132 | 0.28 | % | 738,870 | 0.29 | % | (1.5) | 19.0 | |||||||
Noninterest-bearing deposits | 328,802 | 320,006 | 280,278 | 254,974 | 258,956 | 2.7 | 27.0 | |||||||||||||||||
Accrued expenses and other liabilities | 6,313 | 5,256 | 5,421 | 5,377 | 5,938 | 20.1 | 6.3 | |||||||||||||||||
Stockholders' equity | 163,893 | 159,551 | 159,165 | 156,274 | 155,367 | 2.7 | 5.5 | |||||||||||||||||
Total liabilities and stockholders' equity | $ 1,378,553 | $ 1,377,975 | $ 1,242,933 | $ 1,148,757 | $ 1,159,131 | - | 18.9 | |||||||||||||||||
Net interest spread | 3.72 | % | 3.71 | % | 3.64 | % | 3.62 | % | 3.53 | % | ||||||||||||||
Net interest margin | 3.81 | % | 3.79 | % | 3.73 | % | 3.71 | % | 3.63 | % | ||||||||||||||
(1) All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 35.0%, exclusive of the alternative minimum tax rate and nondeductible interest expense. | ||||||||||||||||||||||||
(2) Average loan balances include nonaccrual loans. | ||||||||||||||||||||||||
(3) Interest income on loans includes amortized loan fees, net of costs, and all are included in the yield calculations. | ||||||||||||||||||||||||
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 17 | 3Q 17 | 2Q 17 | 1Q 17 | 4Q 16 | 12/31/2017 | 12/31/2016 | ||||||||
The following reconciles return on average equity and return on | ||||||||||||||
average tangible equity (Note 1): | ||||||||||||||
Net income | $ 2,698 | $ 3,412 | $ 2,352 | $ 2,800 | $ 2,495 | $ 11,262 | $ 9,638 | |||||||
Net income - annualized (A) | $ 10,704 | $ 13,537 | $ 9,434 | $ 11,356 | $ 9,926 | $ 11,262 | $ 9,638 | |||||||
Net income, excluding net amortization of intangible assets | $ 2,766 | $ 3,482 | $ 2,385 | $ 2,820 | $ 2,514 | $ 11,453 | $ 9,717 | |||||||
Net income, excluding net amortization of intangible | ||||||||||||||
assets - annualized (B) | $ 10,974 | $ 13,814 | $ 9,566 | $ 11,437 | $ 10,001 | $ 11,453 | $ 9,717 | |||||||
Average stockholders' equity (C) | $ 163,893 | $ 159,551 | $ 159,165 | $ 156,274 | $ 155,367 | $ 159,741 | $ 152,426 | |||||||
Less: Average goodwill and other intangible assets | (32,678) | (32,097) | (13,173) | (12,997) | (13,030) | (22,816) | (13,079) | |||||||
Average tangible equity (D) | $ 131,215 | $ 127,454 | $ 145,992 | $ 143,277 | $ 142,337 | $ 136,925 | $ 139,347 | |||||||
Return on average equity (GAAP) (A)/(C) | 6.53 | % | 8.48 | % | 5.47 | % | 7.27 | % | 6.39 | % | 7.05 | % | 6.32 | % |
Return on average tangible equity (Non-GAAP) (B)/(D) | 8.36 | % | 10.84 | % | 6.01 | % | 7.98 | % | 7.03 | % | 8.36 | % | 6.97 | % |
The following reconciles GAAP efficiency ratio and non-GAAP | ||||||||||||||
efficiency ratio (Note 2): | ||||||||||||||
Noninterest expense (E) | $ 10,632 | $ 10,720 | $ 10,199 | $ 9,651 | $ 9,226 | $ 41,202 | $ 37,147 | |||||||
Less: Amortization of intangible assets | (112) | (115) | (55) | (33) | (32) | (315) | (131) | |||||||
Adjusted noninterest expense (F) | $ 10,520 | $ 10,605 | $ 10,144 | $ 9,618 | $ 9,194 | $ 40,887 | $ 37,016 | |||||||
Net interest income (G) | 12,369 | 12,326 | 10,900 | 9,933 | 9,965 | 45,528 | 38,249 | |||||||
Add: Taxable-equivalent adjustment | 60 | 58 | 61 | 61 | 64 | 240 | 198 | |||||||
Taxable-equivalent net interest income (H) | $ 12,429 | $ 12,384 | $ 10,961 | $ 9,994 | $ 10,029 | $ 45,768 | $ 38,447 | |||||||
Noninterest income (J) | $ 4,339 | $ 4,425 | $ 4,179 | $ 4,807 | $ 4,056 | $ 17,750 | $ 16,645 | |||||||
Less: Investment securities (gains) | - | (5) | - | - | - | (5) | (30) | |||||||
Adjusted noninterest income (K) | $ 4,339 | $ 4,420 | $ 4,179 | $ 4,807 | $ 4,056 | $ 17,745 | $ 16,615 | |||||||
Efficiency ratio (GAAP) (E)/(G)+(J) | 63.63 | % | 64.00 | % | 67.64 | % | 65.47 | % | 65.80 | % | 65.11 | % | 67.67 | % |
Efficiency ratio (Non-GAAP) (F)/(H)+(K) | 62.74 | % | 63.11 | % | 67.00 | % | 64.98 | % | 65.28 | % | 64.38 | % | 67.23 | % |
The following reconciles book value per common share and tangible | ||||||||||||||
book value per common share (Note 1): | ||||||||||||||
Stockholders' equity (L) | $ 163,750 | $ 162,648 | $ 159,940 | $ 157,626 | $ 154,299 | |||||||||
Less: Goodwill and other intangible assets | (32,919) | (32,740) | (32,153) | (12,978) | (13,010) | |||||||||
Tangible equity (M) | $ 130,831 | $ 129,908 | $ 127,787 | $ 144,648 | $ 141,289 | |||||||||
Shares outstanding (N) | 12,688 | 12,687 | 12,685 | 12,673 | 12,665 | |||||||||
Book value per common share (GAAP) (L)/(N) | $ 12.91 | $ 12.82 | $ 12.61 | $ 12.44 | $ 12.18 | |||||||||
Tangible book value per common share (Non-GAAP) (M)/(N) | $ 10.31 | $ 10.24 | $ 10.07 | $ 11.41 | $ 11.16 | |||||||||
The following reconciles equity to assets and | ||||||||||||||
tangible equity to tangible assets (Note 1): | ||||||||||||||
Stockholders' equity (O) | $ 163,750 | $ 162,648 | $ 159,940 | $ 157,626 | $ 154,299 | |||||||||
Less: Goodwill and other intangible assets | (32,919) | (32,740) | (32,153) | (12,978) | (13,010) | |||||||||
Tangible equity (P) | $ 130,831 | $ 129,908 | $ 127,787 | $ 144,648 | $ 141,289 | |||||||||
Assets (Q) | $ 1,393,874 | $ 1,376,127 | $ 1,362,798 | $ 1,166,896 | $ 1,160,271 | |||||||||
Less: Goodwill and other intangible assets | (32,919) | (32,740) | (32,153) | (12,978) | (13,010) | |||||||||
Tangible assets (R) | $ 1,360,955 | $ 1,343,387 | $ 1,330,645 | $ 1,153,918 | $ 1,147,261 | |||||||||
Period-end equity/assets (GAAP) (O)/(Q) | 11.75 | % | 11.82 | % | 11.74 | % | 13.51 | % | 13.30 | % | ||||
Period-end tangible equity/tangible assets (Non-GAAP) (P)/(R) | 9.61 | % | 9.67 | % | 9.60 | % | 12.54 | % | 12.32 | % | ||||
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