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| |
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| MEDIA CONTACT |
| N E W S R E L E A S E | Amy Baker |
| VP, Corporate Communications |
| | abaker@mvbbanking.com |
| | 844-682-2265 |
MVB Financial Corp. Reports Fourth Quarter 2017 Earnings
FAIRMONT, W.Va., February 27, 2018 – For the 12 months ended December 31, 2017, MVB Financial Corp. (the "Company") (NASDAQ: MVBF) reported net income of $7.6 million, or $0.69 and $0.68 basic and diluted earnings per share compared to $12.9 million, or $1.44 and $1.31 basic and diluted earnings per share respectively, for the same period in 2016.
"Three significant factors contributed to MVB's 2017 performance results compared to 2016. These were the $3.9 million after-tax gain on the asset sale of a wholly-owned subsidiary, MVB Insurance, in 2016; the $1.5 million decrease in net income within MVB Mortgage created by the continued market pressure within the mortgage industry; and a $646 thousand charge associated with the new tax law changes passed in late 2017; however, the tax law will generate a positive net income effect for us in 2018," said Larry F. Mazza, CEO and President, MVB Financial.
“To this end, we strategically added positions to reinforce our sales Team efforts and to take advantage of disruptions in our markets due to recent M&A activity, especially in Northern Virginia. We are successfully recruiting some of the best talent in our markets because people are attracted to our entrepreneurial spirit, team culture and community focus. When the pain to stay the same is equal to the pain to make a job change, people are willing to make a move. With our listing on The Nasdaq, buzz is building around Team MVB.”
Approximately 1.9 million shares of the Company’s common stock were issued from a capital raise completed in December 2016, and 434,783 shares of the Company’s common stock were issued from a rights offering completed in April 2017. These additional issued shares resulted in a $0.19 and $0.18 decrease in basic and diluted earnings per share, respectively for the 12 months ended December 31, 2017, compared to the same time period in 2016, while a $4.7 million decrease in 2017 net income available to common
shareholders versus 2016, resulted in the remaining $0.56 and $0.45 decrease in basic and dilutive earnings per share, respectively.
FOURTH QUARTER 2017 HIGHLIGHTS
| |
| • | MVB received approval in December 2017 to list its common stock for trading on The Nasdaq Capital Market®. The listing marked a major milestone in MVB’s growth journey. |
| |
| • | Net interest income of $11.7 million increased $269 thousand, or 2.4% from September 30, 2017, and $858 thousand, or 7.9% from the fourth quarter ended December 31, 2016. |
| |
| • | Total assets saw steady growth and reached $1.5 billion as of December 31, 2017, an 8.1% increase from December 31, 2016. |
| |
| • | Loans of $1.1 billion as of December 31, 2017, increased $53.1 million, or 5.0% from December 31, 2016, and $11.5 million, or 1.0% from September 30, 2017. |
| |
| • | Deposits of $1.2 billion as of December 31, 2017, increased $52.6 million, or 4.7% from December 31, 2016. Noninterest bearing deposit balances have grown to $126.0 million as of December 31, 2017, an increase of $10.3 million since December 31, 2016. |
With the passage of tax reform in December 2017, MVB expects to see benefits and to share tax savings with Team MVB and the communities in its footprint. During fourth quarter 2017, MVB approved the hiring of 31 new Team members for 2018 and the opening of additional branches in Northern Virginia.
Demonstrating its commitment to community development, MVB made a $2 million initial investment in the creation of a Community Development Corporation ("CDC"), which started full operations in the fourth quarter, including establishing its initial Board of Directors.
“Led by its President Herman DeProspero, the CDC will play an integral role in our commitment to the economic welfare of our communities,” Mazza said.
FINANCIAL DETAILS
Loans totaled $1.106 billion as of December 31, 2017, an increase of $53.1 million, or 5.0% from December 31, 2016, and $11.5 million, or 1.0% from September 30, 2017. The total loan growth was less than originally anticipated for the year caused primarily by management taking direct action to diversify lending to reduce commercial real estate concentration levels coupled with a 63% increase in commercial loan payoffs.
In comparison to the December 31, 2016, deposit balance of $1.107 billion, deposits increased $52.6 million, or 4.7%. Noninterest bearing deposit balances rose to $126.0 million, or 10.9% of the total deposit base as of December 31, 2017, an increase of $10.3 million, or 8.9% since December 31, 2016, and $4.4 million since September 30, 2017.
Net interest income for the fourth quarter of 2017 was $11.7 million, an increase of $269 thousand, or 2.4% from September 30, 2017, and $858 thousand, or 7.9% from the fourth quarter ended December 31, 2016. Net interest margin for the fourth quarter of 2017 was 3.29%, a decrease of 8 basis points from September 30, 2017, and an increase of 6 basis points versus the quarter ended December 31, 2016. For the 12 months ended December 31, 2017, net interest margin increased 5 basis points to 3.27%. The full year increase in net interest margin was the result of a 12 basis point increase in earning assets due to higher yields.
Interest expense increased 5.8% during the fourth quarter of 2017 and 10.5% for the 12 months ended December 31, 2017, compared to the same time period in 2016, due to an 11 basis point increase in the cost of interest-bearing liabilities. Increased interest rates and an emphasis on loan yields helped to increase net interest income, despite increases in interest expense. Additionally, the flattened yield curve placed pressure on net interest margin earned from our mortgage operations as the cost of short-term borrowings to fund the mortgage business increased, while the yield from loans held for sale remained flat, consistent with the 30-year Treasury bond rates.
Provision for loan loss was $2.2 million for the full year ended December 31, 2017, a $1.5 million decrease from the same time period in 2016, despite a 5.0% increase in loans. The substantial decline of average historical loss rates and a $1.1 million decline in charge-offs contributed to the decrease in provision for 2017. Specific loan loss allocations increased by $645 thousand in 2017 compared to a $470 thousand decrease in 2016. Nonperforming loans increased $3.5 million, to 0.88% of total loans as of December 31,
2017. In addition, charge-offs for 2017 decreased $1.1 million compared to 2016, resulting in an annualized net loan charge-offs to total loans ratio of 0.13% as of December 31, 2017.
Noninterest income for the fourth quarter of 2017 was $10.2 million, flat from September 30, 2017, and an increase of $91 thousand from the fourth quarter ended December 31, 2016. For the full year of 2017, noninterest income was $40.7 million, a decrease of $2.5 million from the same period in 2016. The year over year decrease was primarily the result of a $4.2 million decrease in gain on derivatives, primarily the result of a 39.0% decrease in the locked mortgage pipeline for the full year 2017 compared to a 31.6% increase in the locked mortgage pipeline for the full year 2016. In addition, mortgage production volume decreased $102.2 million or 6.2% for the full year 2017 versus the same time period in 2016. Excluding the decrease in gain on derivatives, noninterest income for the full year of 2017 increased $1.7 million, mostly due to increases in mortgage fee income, commercial swap fee income and other operating income. Gain on sale of securities and gain on sale of portfolio loans decreased $351 thousand and $504 thousand respectively, for the full year of 2017 in comparison to 2016.
Noninterest expense for the fourth quarter of 2017 was $17.7 million, a decrease of $252 thousand, or 1.4% from September 30, 2017, and an increase of $900 thousand, or 5.4% from the fourth quarter ended December 31, 2016. For the full year of 2017, noninterest expense was $70.5 million, an increase of $1.3 million, or 1.9% from the same period in 2016.
A $951 thousand increase in occupancy and equipment costs for the full year of 2017 relates to the two new, high technology MVB branches opened during the third quarter of 2017 and a continued focus and investment in client-friendly technology. To control expenses, two branches in Martinsburg, W.Va., were consolidated in December 2017 due to their proximity.
The Company continues to tightly manage expenses and maximize resources to expand revenues and invest in the future. Data processing and communications for the full year of 2017 increased only $152 thousand compared to the same period in 2016, despite $520 thousand in additional expense related to a core system conversion in the second quarter of 2017. Additionally, salary and employee benefits decreased $1.1 million, or 2.5% for the full year of 2017 in comparison to 2016, primarily due to a decrease in mortgage production volume of 6.2% over the same period.
As previously announced, on November 22, 2017, the Company declared a quarterly cash dividend of $0.025 per share to shareholders of record at the close of business on December 2, 2017, payable December 15,
2017. This was the fourth quarterly dividend for 2017 and was equal to the March, June and September 2017 payouts of $0.025 per share. The cash dividend of $0.10 for the full year 2017, increased $0.025, or 25% compared to the same time period in 2016.
About MVB Financial Corp.
MVB Financial Corp. (“MVB Financial” or “MVB”), the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® under the ticker “MVBF.”
MVB is a financial holding company headquartered in Fairmont, W.Va. Through its subsidiary, MVB Bank, Inc., and the bank’s subsidiary, MVB Mortgage, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region.
Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.
For more information about MVB, please visit ir.mvbbanking.com.
Forward-looking Statements
MVB Financial Corp. has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this Earnings Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” “may,” or similar expressions occur in this Earnings Release, the Company is making forward-looking statements. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Earnings Release. Those factors include, but are not limited to: credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession, and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements.
Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information in this announcement is subject to change.
Questions or comments concerning this Earnings Release should be directed to:
MVB Financial Corp.
Donald T. Robinson, Executive Vice President and CFO
(304) 598-3500
drobinson@mvbbanking.com
MVB Financial Corp.
Financial Highlights
Condensed Consolidated Statements of Income (Unaudited) (Dollars in thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarterly | | Year-to-Date |
| | | 2017 | | 2017 | | 2017 | | 2017 | | 2016 | | 2017 | | 2016 |
| | | Fourth Quarter | | Third
Quarter | | Second
Quarter | | First
Quarter | | Fourth
Quarter | | |
| Interest income | | $ | 15,086 |
| | $ | 14,630 |
| | $ | 13,814 |
| | $ | 13,068 |
| | $ | 13,638 |
| | $ | 56,598 |
| | $ | 54,123 |
|
| Interest expense | | 3,403 |
| | 3,216 |
| | 2,920 |
| | 2,762 |
| | 2,813 |
| | 12,301 |
| | 11,132 |
|
| Net interest income | | 11,683 |
| | 11,414 |
| | 10,894 |
| | 10,306 |
| | 10,825 |
| | 44,297 |
| | 42,991 |
|
| Provision for loan losses | | 1,036 |
| | 96 |
| | 523 |
| | 518 |
| | 657 |
| | 2,173 |
| | 3,632 |
|
| Noninterest income | | 10,157 |
| | 10,158 |
| | 11,567 |
| | 8,824 |
| | 10,066 |
| | 40,706 |
| | 43,205 |
|
| Noninterest expense | | 17,714 |
| | 17,966 |
| | 18,503 |
| | 16,317 |
| | 16,814 |
| | 70,500 |
| | 69,209 |
|
| Income from continuing operations, before income taxes | | 3,090 |
| | 3,510 |
| | 3,435 |
| | 2,295 |
| | 3,420 |
| | 12,330 |
| | 13,355 |
|
| Income tax expense - continuing operations | | 1,667 |
| | 1,192 |
| | 1,175 |
| | 721 |
| | 1,113 |
| | 4,755 |
| | 4,378 |
|
| Net income from continuing operations | | 1,423 |
| | 2,318 |
| | 2,260 |
| | 1,574 |
| | 2,307 |
| | 7,575 |
| | 8,977 |
|
| Income from discontinued operations, before income taxes | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,346 |
|
| Income tax benefit - discontinued operations | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 2,411 |
|
| Net income from discontinued operations | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,935 |
|
| Net income | | $ | 1,423 |
| | $ | 2,318 |
| | $ | 2,260 |
| | $ | 1,574 |
| | $ | 2,307 |
| | $ | 7,575 |
| | $ | 12,912 |
|
| Preferred dividends | | 124 |
| | 123 |
| | 122 |
| | 129 |
| | 314 |
| | 498 |
| | 1,128 |
|
| Net income available to common shareholders | | $ | 1,299 |
| | $ | 2,195 |
| | $ | 2,138 |
| | $ | 1,445 |
| | $ | 1,993 |
| | $ | 7,077 |
| | $ | 11,784 |
|
| | | | | | | | | | | | | | | |
| Earnings per share from continuing operations - basic | | $ | 0.12 |
| | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.14 |
| | $ | 0.23 |
| | $ | 0.69 |
| | $ | 0.96 |
|
| Earnings per share from discontinued operations - basic | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 0.48 |
|
| Earnings per common shareholder - basic | | $ | 0.12 |
| | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.14 |
| | $ | 0.23 |
| | $ | 0.69 |
| | $ | 1.44 |
|
| | | | | | | | | | | | | | | |
| Earnings per share from continuing operations - diluted | | $ | 0.12 |
| | $ | 0.21 |
| | $ | 0.20 |
| | $ | 0.14 |
| | $ | 0.22 |
| | $ | 0.68 |
| | $ | 0.92 |
|
| Earnings per share from discontinued operations - diluted | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 0.39 |
|
| Earnings per common shareholder - diluted | | $ | 0.12 |
| | $ | 0.21 |
| | $ | 0.20 |
| | $ | 0.14 |
| | $ | 0.22 |
| | $ | 0.68 |
| | $ | 1.31 |
|
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)
|
| | | | | | | | | | | | |
| | | December 31, 2017 | | September 30, 2017 | | December 31, 2016 |
| Cash and cash equivalents | | $ | 20,305 |
| | $ | 20,272 |
| | $ | 17,340 |
|
| Certificates of deposit with other banks | | 14,778 |
| | 14,778 |
| | 14,527 |
|
| Investment securities | | 231,507 |
| | 187,348 |
| | 162,368 |
|
| Loans held for sale | | 66,794 |
| | 69,057 |
| | 90,174 |
|
| Loans | | 1,105,941 |
| | 1,094,467 |
| | 1,052,865 |
|
| Allowance for loan losses | | (9,878 | ) | | (9,396 | ) | | (9,101 | ) |
| Net loans | | 1,096,063 |
| | 1,085,071 |
| | 1,043,764 |
|
| Premises and equipment | | 26,686 |
| | 27,189 |
| | 25,081 |
|
| Goodwill | | 18,480 |
| | 18,480 |
| | 18,480 |
|
| Other assets | | 59,689 |
| | 49,395 |
| | 47,070 |
|
| Total assets | | $ | 1,534,302 |
| | $ | 1,471,590 |
| | $ | 1,418,804 |
|
| | | | | | | |
| Deposits | | $ | 1,159,580 |
| | $ | 1,165,199 |
| | $ | 1,107,017 |
|
| Borrowed funds | | 152,169 |
| | 84,403 |
| | 90,921 |
|
| Other liabilities | | 72,361 |
| | 73,011 |
| | 75,241 |
|
| Shareholders' equity | | 150,192 |
| | 148,977 |
| | 145,625 |
|
| Total liabilities and shareholders' equity | | $ | 1,534,302 |
| | $ | 1,471,590 |
| | $ | 1,418,804 |
|
Reportable Segments (Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| Twelve Months Ended December 31, 2017 | | Commercial & Retail Banking | | Mortgage Banking | | Financial Holding Company | | Intercompany Eliminations | | Consolidated |
| (Dollars in thousands) | | | | | |
| Revenues: | | | | | | | | | | |
| Interest income | | $ | 52,423 |
| | $ | 4,698 |
| | $ | 4 |
| | $ | (527 | ) | | $ | 56,598 |
|
| Mortgage fee income | | 736 |
| | 37,262 |
| | — |
| | (849 | ) | | 37,149 |
|
| Insurance and investment services income | | 563 |
| | — |
| | — |
| | — |
| | 563 |
|
| Other income | | 5,303 |
| | (2,372 | ) | | 5,466 |
| | (5,403 | ) | | 2,994 |
|
| Total operating income | | 59,025 |
| | 39,588 |
| | 5,470 |
| | (6,779 | ) | | 97,304 |
|
| Expenses: | | | | | | | | | | |
| Interest expense | | 9,118 |
| | 2,317 |
| | 2,241 |
| | (1,375 | ) | | 12,301 |
|
| Salaries and employee benefits | | 12,266 |
| | 26,196 |
| | 5,646 |
| | — |
| | 44,108 |
|
| Provision for loan losses | | 1,967 |
| | 206 |
| | — |
| | — |
| | 2,173 |
|
| Other expense | | 19,523 |
| | 8,188 |
| | 4,085 |
| | (5,404 | ) | | 26,392 |
|
| Total operating expenses | | 42,874 |
| | 36,907 |
| | 11,972 |
| | (6,779 | ) | | 84,974 |
|
| Income (loss) from continuing operations, before income taxes | | 16,151 |
| | 2,681 |
| | (6,502 | ) | | — |
| | 12,330 |
|
| Income tax expense (benefit) - continuing operations | | 5,820 |
| | 1,082 |
| | (2,147 | ) | | — |
| | 4,755 |
|
| Net income (loss) from continuing operations | | 10,331 |
| | 1,599 |
| | (4,355 | ) | | — |
| | 7,575 |
|
| Net income (loss) | | $ | 10,331 |
| | $ | 1,599 |
| | $ | (4,355 | ) | | $ | — |
| | $ | 7,575 |
|
| Preferred stock dividends | | — |
| | — |
| | 498 |
| | — |
| | 498 |
|
| Net income (loss) available to common shareholders | | $ | 10,331 |
| | $ | 1,599 |
| | $ | (4,853 | ) | | $ | — |
| | $ | 7,077 |
|
Reportable Segments (Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Twelve Months Ended December 31, 2016 | | Commercial & Retail Banking | | Mortgage Banking | | Financial Holding Company | | Insurance | | Intercompany Eliminations | | Consolidated |
| (Dollars in thousands) | | | | | | |
| Revenues: | | | | | | | | | | | | |
| Interest income | | $ | 50,413 |
| | $ | 4,285 |
| | $ | 3 |
| | $ | — |
| | $ | (578 | ) | | $ | 54,123 |
|
| Mortgage fee income | | (252 | ) | | 36,960 |
| | — |
| | — |
| | (1,035 | ) | | 35,673 |
|
| Insurance and investment services income | | 420 |
| | — |
| | — |
| | — |
| | — |
| | 420 |
|
| Other income | | 5,485 |
| | 1,674 |
| | 5,247 |
| | — |
| | (5,294 | ) | | 7,112 |
|
| Total operating income | | 56,066 |
| | 42,919 |
| | 5,250 |
| | — |
| | (6,907 | ) | | 97,328 |
|
| Expenses: | | | | | | | | | | | | |
| Interest expense | | 8,437 |
| | 2,082 |
| | 2,226 |
| | — |
| | (1,613 | ) | | 11,132 |
|
| Salaries and employee benefits | | 11,592 |
| | 27,696 |
| | 5,937 |
| | — |
| | — |
| | 45,225 |
|
| Provision for loan losses | | 3,632 |
| | — |
| | — |
| | — |
| | — |
| | 3,632 |
|
| Other expense | | 18,009 |
| | 8,125 |
| | 3,144 |
| | — |
| | (5,294 | ) | | 23,984 |
|
| Total operating expenses | | 41,670 |
| | 37,903 |
| | 11,307 |
| | — |
| | (6,907 | ) | | 83,973 |
|
| Income (loss) from continuing operations, before income taxes | | 14,396 |
| | 5,016 |
| | (6,057 | ) | | — |
| | — |
| | 13,355 |
|
| Income tax expense (benefit) - continuing operations | | 4,496 |
| | 1,954 |
| | (2,072 | ) | | — |
| | — |
| | 4,378 |
|
| Net income (loss) from continuing operations | | 9,900 |
| | 3,062 |
| | (3,985 | ) | | — |
| | — |
| | 8,977 |
|
| Income (loss) from discontinued operations | | — |
| | — |
| | 6,926 |
| | (580 | ) | | — |
| | 6,346 |
|
| Income tax expense (benefit) - discontinued operations | | $ | — |
| | $ | — |
| | $ | 2,629 |
| | $ | (218 | ) | | $ | — |
| | $ | 2,411 |
|
| Net income (loss) from discontinued operations | | $ | — |
| | $ | — |
| | $ | 4,297 |
| | $ | (362 | ) | | $ | — |
| | $ | 3,935 |
|
| Net income (loss) | | $ | 9,900 |
| | $ | 3,062 |
| | $ | 312 |
| | $ | (362 | ) | | $ | — |
| | $ | 12,912 |
|
| Preferred stock dividends | | — |
| | — |
| | 1,128 |
| | — |
| | — |
| | 1,128 |
|
| Net income (loss) available to common shareholders | | $ | 9,900 |
| | $ | 3,062 |
| | $ | (816 | ) | | $ | (362 | ) | | $ | — |
| | $ | 11,784 |
|
Average Balances and Interest Rates (Unaudited) (Dollars in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2017 | | Three Months Ended
September 30, 2017 | | Three Months Ended December 31, 2016 |
| | | Average
Balance | | Interest
Income/
Expense | | Yield/
Cost | | Average
Balance | | Interest
Income/
Expense | | Yield/
Cost | | Average
Balance | | Interest
Income/
Expense | | Yield/
Cost |
| Assets | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits in banks | | $ | 4,636 |
| | $ | 15 |
| | 1.28 | % | | $ | 4,484 |
| | $ | 15 |
| | 1.33 | % | | $ | 11,843 |
| | $ | 21 |
| | 0.71 | % |
| CDs with other banks | | 14,778 |
| | 75 |
| | 2.01 |
| | 14,711 |
| | 74 |
| | 2.00 |
| | 9,614 |
| | 50 |
| | 2.08 |
|
| Investment securities: | | | | | | | | |
| | |
| | |
| | | | | |
|
|
| Taxable | | 147,459 |
| | 774 |
| | 2.08 |
| | 126,880 |
| | 693 |
| | 2.17 |
| | 84,082 |
| | 382 |
| | 1.82 |
|
| Tax-exempt | | 68,759 |
| | 572 |
| | 3.30 |
| | 56,264 |
| | 443 |
| | 3.12 |
| | 71,333 |
| | 532 |
| | 2.98 |
|
Loans and loans held for sale: 1 | | | | | | | | |
| | |
| | |
| | | | | |
|
|
| Commercial | | 770,664 |
| | 9,042 |
| | 4.65 |
| | 762,650 |
| | 8,742 |
| | 4.55 |
| | 734,548 |
| | 8,225 |
| | 4.48 |
|
| Tax exempt | | 14,679 |
| | 128 |
| | 3.46 |
| | 14,991 |
| | 130 |
| | 3.44 |
| | 15,836 |
| | 137 |
| | 3.46 |
|
| Real estate | | 374,047 |
| | 4,300 |
| | 4.56 |
| | 349,459 |
| | 4,346 |
| | 4.93 |
| | 400,411 |
| | 4,106 |
| | 4.10 |
|
| Consumer | | 13,006 |
| | 180 |
| | 5.49 |
| | 13,462 |
| | 187 |
| | 5.51 |
| | 14,740 |
| | 185 |
| | 5.02 |
|
| Total loans | | 1,172,396 |
| | 13,650 |
| | 4.62 |
| | 1,140,562 |
| | 13,405 |
| | 4.66 |
| | 1,165,535 |
| | 12,653 |
| | 4.34 |
|
| Total earning assets | | 1,408,028 |
| | 15,086 |
| | 4.25 |
| | 1,342,901 |
| | 14,630 |
| | 4.32 |
| | 1,342,407 |
| | 13,638 |
| | 4.06 |
|
| Less: Allowance for loan losses | | (9,579 | ) | | | | | | (9,760 | ) | | |
| | |
| | (9,479 | ) | | | | |
| Cash and due from banks | | 16,969 |
| | | | | | 17,501 |
| | |
| | | | 15,428 |
| | | | |
| Other assets | | 96,103 |
| | | | | | 123,898 |
| | |
| | | | 86,949 |
| | | | |
| Total assets | | $ | 1,511,521 |
| | | | | | $ | 1,474,540 |
| | | | | | $ | 1,435,305 |
| | | | |
| | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | |
| | |
| | |
| | | | | | |
| Deposits: | | | | | | | | |
| | |
| | |
| | | | | | |
| NOW | | $ | 467,095 |
| | $ | 807 |
| | 0.69 |
| | $ | 436,493 |
| | $ | 675 |
| | 0.61 |
| | $ | 443,524 |
| | $ | 548 |
| | 0.49 |
|
| Money market checking | | 238,262 |
| | 432 |
| | 0.72 |
| | 246,160 |
| | 458 |
| | 0.74 |
| | 214,746 |
| | 449 |
| | 0.84 |
|
| Savings | | 44,685 |
| | 19 |
| | 0.17 |
| | 46,807 |
| | 20 |
| | 0.17 |
| | 43,870 |
| | 19 |
| | 0.17 |
|
| IRAs | | 17,200 |
| | 59 |
| | 1.36 |
| | 16,649 |
| | 56 |
| | 1.33 |
| | 16,516 |
| | 52 |
| | 1.26 |
|
| CDs | | 278,446 |
| | 1,025 |
| | 1.46 |
| | 249,698 |
| | 874 |
| | 1.39 |
| | 302,037 |
| | 941 |
| | 1.25 |
|
| Repurchase agreements and federal funds sold | | 24,727 |
| | 19 |
| | 0.30 |
| | 25,093 |
| | 20 |
| | 0.32 |
| | 26,758 |
| | 17 |
| | 0.25 |
|
| FHLB and other borrowings | | 122,388 |
| | 474 |
| | 1.54 |
| | 149,313 |
| | 548 |
| | 1.46 |
| | 98,187 |
| | 225 |
| | 0.92 |
|
| Subordinated debt | | 33,524 |
| | 568 |
| | 6.72 |
| | 33,524 |
| | 565 |
| | 6.69 |
| | 33,524 |
| | 562 |
| | 6.71 |
|
| Total interest-bearing liabilities | | 1,226,327 |
| | 3,403 |
| | 1.10 |
| | 1,203,737 |
| | 3,216 |
| | 1.06 |
| | 1,179,162 |
| | 2,813 |
| | 0.95 |
|
| Noninterest bearing demand deposits | | 127,417 |
| | | | | | 115,343 |
| | |
| | |
| | 109,769 |
| | | | |
| Other liabilities | | 7,419 |
| | | | | | 7,703 |
| | |
| | |
| | 14,836 |
| | | | |
| Total liabilities | | 1,361,163 |
| | | | | | 1,326,783 |
| | |
| | |
| | 1,303,767 |
| | | | |
| | | | | | | | | | | | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
| | |
| | |
| | | | | | |
| Preferred stock | | 7,834 |
| | | | | | 7,834 |
| | |
| | |
| | 16,334 |
| | | | |
| Common stock | | 10,496 |
| | | | | | 10,495 |
| | |
| | |
| | 8,675 |
| | | | |
| Paid-in capital | | 99,123 |
| | | | | | 98,289 |
| | |
| | |
| | 80,101 |
| | | | |
| Treasury stock | | (1,084 | ) | | | | | | (1,084 | ) | | |
| | |
| | (1,084 | ) | | | | |
| Retained earnings | | 36,982 |
| | | | | | 35,152 |
| | |
| | |
| | 30,551 |
| | | | |
| Accumulated other comprehensive income | | (2,993 | ) | | | | | | (2,929 | ) | | |
| | |
| | (3,039 | ) | | | | |
| Total stockholders’ equity | | 150,358 |
| | | | | | 147,757 |
| | |
| | |
| | 131,538 |
| | | | |
| Total liabilities and stockholders’ equity | | $ | 1,511,521 |
| | | | | | $ | 1,474,540 |
| | |
| | |
| | $ | 1,435,305 |
| | | | |
| | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | | | | 3.15 |
| | |
| | |
| | 3.26 |
| | | | | | 3.11 |
|
| Net interest income-margin | | | | $ | 11,683 |
| | 3.29 | % | |
|
| | $ | 11,414 |
| | 3.37 | % | | | | $ | 10,825 |
| | 3.23 | % |
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
Average Balances and Interest Rates (Unaudited) (Dollars in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 31, 2017 | | Twelve Months Ended December 31, 2016 | | Twelve Months Ended December 31, 2015 |
| (Dollars in thousands) | | Average Balance | | Interest Income/Expense | | Yield/Cost | | Average Balance | | Interest Income/Expense | | Yield/Cost | | Average Balance | | Interest Income/Expense | | Yield/Cost |
| Assets | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits in banks | | $ | 3,790 |
| | $ | 52 |
| | 1.37 | % | | $ | 16,347 |
| | $ | 94 |
| | 0.58 | % | | $ | 16,040 |
| | $ | 43 |
| | 0.27 | % |
| CDs with other banks | | 14,619 |
| | 288 |
| | 1.97 |
| | 11,694 |
| | 228 |
| | 1.95 |
| | 12,267 |
| | 231 |
| | 1.88 |
|
| Investment securities: | | | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Taxable | | 125,797 |
| | 2,658 |
| | 2.11 |
| | 76,525 |
| | 1,366 |
| | 1.79 |
| | 66,110 |
| | 958 |
| | 1.45 |
|
| Tax-exempt | | 58,786 |
| | 1,863 |
| | 3.17 |
| | 64,108 |
| | 1,853 |
| | 2.89 |
| | 53,376 |
| | 1,537 |
| | 2.88 |
|
Loans and loans held for sale: 1 | | | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Commercial | | 751,444 |
| | 33,896 |
| | 4.51 |
| | 734,829 |
| | 32,620 |
| | 4.44 |
| | 616,057 |
| | 26,264 |
| | 4.26 |
|
| Tax exempt | | 15,064 |
| | 520 |
| | 3.45 |
| | 16,326 |
| | 564 |
| | 3.45 |
| | 19,678 |
| | 689 |
| | 3.50 |
|
| Real estate | | 373,360 |
| | 16,612 |
| | 4.45 |
| | 398,766 |
| | 16,594 |
| | 4.16 |
| | 334,538 |
| | 13,586 |
| | 4.06 |
|
| Consumer | | 13,660 |
| | 709 |
| | 5.19 |
| | 16,762 |
| | 804 |
| | 4.80 |
| | 17,383 |
| | 792 |
| | 4.56 |
|
| Total loans | | 1,153,528 |
| | 51,737 |
| | 4.49 |
| | 1,166,683 |
| | 50,582 |
| | 4.34 |
| | 987,656 |
| | 41,331 |
| | 4.18 |
|
| Total earning assets | | 1,356,520 |
| | 56,598 |
| | 4.17 |
| | 1,335,357 |
| | 54,123 |
| | 4.05 |
| | 1,135,449 |
| | 44,100 |
| | 3.88 |
|
| Less: Allowance for loan losses | | (9,626 | ) | | |
| | |
| | (8,939 | ) | | |
| | |
| | (7,016 | ) | | |
| | |
|
| Cash and due from banks | | 16,287 |
| | |
| | | | 13,765 |
| | |
| | | | 14,465 |
| | |
| | |
|
| Other assets | | 90,585 |
| | |
| | | | 87,815 |
| | |
| | | | 83,520 |
| | |
| | |
|
| Total assets | | $ | 1,453,766 |
| | | | | | $ | 1,427,998 |
| | | | | | $ | 1,226,418 |
| | |
| | |
|
| | | | | | | | | | | | | | | | | | | |
| Liabilities | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Deposits: | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| NOW | | $ | 438,123 |
| | $ | 2,608 |
| | 0.60 |
| | $ | 454,320 |
| | $ | 2,413 |
| | 0.53 | % | | $ | 446,704 |
| | $ | 2,713 |
| | 0.61 | % |
| Money market checking | | 239,632 |
| | 1,781 |
| | 0.74 |
| | 163,630 |
| | 1,282 |
| | 0.78 |
| | 65,306 |
| | 396 |
| | 0.61 |
|
| Savings | | 47,034 |
| | 78 |
| | 0.17 |
| | 43,870 |
| | 88 |
| | 0.20 |
| | 39,766 |
| | 111 |
| | 0.28 |
|
| IRAs | | 16,678 |
| | 217 |
| | 1.30 |
| | 16,319 |
| | 208 |
| | 1.27 |
| | 12,038 |
| | 146 |
| | 1.21 |
|
| CDs | | 262,417 |
| | 3,610 |
| | 1.38 |
| | 314,542 |
| | 3,757 |
| | 1.19 |
| | 278,499 |
| | 2,880 |
| | 1.03 |
|
| Repurchase agreements and federal funds sold | | 23,559 |
| | 75 |
| | 0.32 |
| | 27,066 |
| | 72 |
| | 0.27 |
| | 26,884 |
| | 83 |
| | 0.31 |
|
| FHLB and other borrowings | | 122,144 |
| | 1,690 |
| | 1.38 |
| | 139,736 |
| | 1,086 |
| | 0.78 |
| | 124,475 |
| | 692 |
| | 0.56 |
|
| Subordinated debt | | 33,524 |
| | 2,242 |
| | 6.69 |
| | 33,524 |
| | 2,226 |
| | 6.64 |
| | 33,524 |
| | 2,204 |
| | 6.57 |
|
| Total interest-bearing liabilities | | 1,183,111 |
| | 12,301 |
| | 1.04 |
| | 1,193,007 |
| | 11,132 |
| | 0.93 |
| | 1,027,196 |
| | 9,225 |
| | 0.90 |
|
| Noninterest bearing demand deposits | | 117,696 |
| | |
| | |
| | 99,826 |
| | |
| | |
| | 79,611 |
| | |
| | |
|
| Other liabilities | | 8,006 |
| | |
| | |
| | 12,220 |
| | |
| | |
| | 7,486 |
| | |
| | |
|
| Total liabilities | | 1,308,813 |
| | |
| | |
| | 1,305,053 |
| | |
| | |
| | 1,114,293 |
| | |
| | |
|
| | | | | | | | | | | | | | | | | | | |
| Stockholders’ equity | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| Preferred stock | | 7,927 |
| | |
| | |
| | 16,334 |
| | |
| | |
| | 16,334 |
| | |
| | |
|
| Common stock | | 10,355 |
| | |
| | |
| | 8,263 |
| | |
| | |
| | 8,065 |
| | |
| | |
|
| Paid-in capital | | 96,987 |
| | |
| | |
| | 75,799 |
| | |
| | |
| | 74,331 |
| | |
| | |
|
| Treasury stock | | (1,084 | ) | | |
| | |
| | (1,084 | ) | | |
| | |
| | (1,084 | ) | | |
| | |
|
| Retained earnings | | 34,155 |
| | |
| | |
| | 25,943 |
| | |
| | |
| | 16,941 |
| | |
| | |
|
| Accumulated other comprehensive income | | (3,387 | ) | | |
| | |
| | (2,310 | ) | | |
| | |
| | (2,462 | ) | | |
| | |
|
| Total stockholders’ equity | | 144,953 |
| | |
| | |
| | 122,945 |
| | |
| | |
| | 112,125 |
| | |
| | |
|
| Total liabilities and stockholders’ equity | | $ | 1,453,766 |
| | |
| | |
| | $ | 1,427,998 |
| | |
| | |
| | $ | 1,226,418 |
| | |
| | |
|
| | | | | | | | | | | | | | | | | | | |
| Net interest spread | | |
| | |
| | 3.13 |
| | |
| | |
| | 3.12 |
| | |
| | |
| | 2.98 |
|
| Net interest income-margin | | |
| | $ | 44,297 |
| | 3.27 | % | | |
| | $ | 42,991 |
| | 3.22 | % | | |
| | $ | 34,875 |
| | 3.07 | % |
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
Selected Financial Data (Unaudited) (Dollars in thousands, except per share data)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarterly | | Year-to-Date |
| | | 2017 | | 2017 | | 2017 | | 2017 | | 2016 | | 2017 | | 2016 |
| | | Fourth Quarter | | Third
Quarter | | Second
Quarter | | First
Quarter | | Fourth
Quarter | | |
| Earnings and Per Share Data: | | | | | | | | | | | | | | |
| Net income from continuing operations | | $ | 1,423 |
| | $ | 2,318 |
| | $ | 2,260 |
| | $ | 1,574 |
| | $ | 2,307 |
| | $ | 7,575 |
| | $ | 8,977 |
|
| Net income from discontinued operations | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,935 |
|
| Net income | | 1,423 |
| | 2,318 |
| | 2,260 |
| | 1,574 |
| | 2,307 |
| | 7,575 |
| | 12,912 |
|
| Net income available to common shareholders | | 1,299 |
| | 2,195 |
| | 2,138 |
| | 1,445 |
| | 1,993 |
| | 7,077 |
| | 11,784 |
|
| Earnings per share from continuing operations - basic | | 0.12 |
| | 0.21 |
| | 0.21 |
| | 0.14 |
| | 0.23 |
| | 0.69 |
| | 0.96 |
|
| Earnings per share from discontinued operations - basic | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 0.48 |
|
| Earnings per common shareholder - basic | | 0.12 |
| | 0.21 |
| | 0.21 |
| | 0.14 |
| | 0.23 |
| | 0.69 |
| | 1.44 |
|
| Earnings per share from continuing operations - diluted | | 0.12 |
| | 0.21 |
| | 0.20 |
| | 0.14 |
| | 0.22 |
| | 0.68 |
| | 0.92 |
|
| Earnings per share from discontinued operations - diluted | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 0.39 |
|
| Earnings per common shareholder - diluted | | 0.12 |
| | 0.21 |
| | 0.20 |
| | 0.14 |
| | 0.22 |
| | 0.68 |
| | 1.31 |
|
| Cash dividends paid per common share | | 0.025 |
| | 0.025 |
| | 0.025 |
| | 0.025 |
| | 0.02 |
| | 0.10 |
| | 0.08 |
|
| Book value per common share | | 13.63 |
| | 13.51 |
| | 13.31 |
| | 13.09 |
| | 12.93 |
| | 13.63 |
| | 12.93 |
|
| Weighted average shares outstanding - basic | | 10,444,627 |
| | 10,443,443 |
| | 10,343,933 |
| | 9,996,544 |
| | 8,624,143 |
| | 10,308,738 |
| | 8,212,021 |
|
| Weighted average shares outstanding - diluted | | 10,823,994 |
| | 12,410,070 |
| | 12,181,433 |
| | 10,009,341 |
| | 10,514,727 |
| | 10,440,228 |
| | 10,068,733 |
|
| | | | | | | | | | | | | | | |
| Performance Ratios: | | | | | | | | | | | | | | |
Return on average assets - continuing operations 1 | | 0.38 | % | | 0.63 | % | | 0.63 | % | | 0.45 | % | | 0.64 | % | | 0.52 | % | | 0.63 | % |
Return on average assets - discontinued operations 1 | | — | % | | — | % | | — | % | | — | % | | — | % | | — | % | | 0.28 | % |
Return on average equity - continuing operations 1 | | 3.79 | % | | 6.28 | % | | 6.30 | % | | 4.56 | % | | 7.02 | % | | 5.23 | % | | 7.30 | % |
Return on average equity - discontinued operations 1 | | — | % | | — | % | | — | % | | — | % | | — | % | | — | % | | 3.20 | % |
Net interest margin 2 | | 3.29 | % | | 3.37 | % | | 3.31 | % | | 3.19 | % | | 3.23 | % | | 3.27 | % | | 3.22 | % |
Efficiency ratio 3 | | 81.11 | % | | 83.28 | % | | 82.38 | % | | 85.30 | % | | 80.48 | % | | 82.94 | % | | 80.29 | % |
Overhead ratio 1 4 | | 4.69 | % | | 4.87 | % | | 5.19 | % | | 4.65 | % | | 4.69 | % | | 4.85 | % | | 4.85 | % |
| | | | | | | | | | | | | | | |
| Asset Quality Data and Ratios: | | | | | | | | | | | | | | |
| Charge-offs | | $ | 572 |
| | $ | 472 |
| | $ | 163 |
| | $ | 290 |
| | $ | 713 |
| | $ | 1,497 |
| | $ | 2,557 |
|
| Recoveries | | 18 |
| | 24 |
| | 16 |
| | 43 |
| | 8 |
| | 101 |
| | 20 |
|
Net loan charge-offs to total loans 1 5 | | 0.20 | % | | 0.16 | % | | 0.05 | % | | 0.09 | % | | 0.27 | % | | 0.13 | % | | 0.24 | % |
| Allowance for loan losses | | 9,878 |
| | 9,396 |
| | 9,748 |
| | 9,372 |
| | 9,101 |
| | 9,878 |
| | 9,101 |
|
Allowance for loan losses to total loans 6 | | 0.89 | % | | 0.86 | % | | 0.88 | % | | 0.87 | % | | 0.86 | % | | 0.89 | % | | 0.86 | % |
| Nonperforming loans | | 9,699 |
| | 6,559 |
| | 5,103 |
| | 6,575 |
| | 6,229 |
| | 9,699 |
| | 6,229 |
|
| Nonperforming loans to total loans | | 0.88 | % | | 0.60 | % | | 0.46 | % | | 0.61 | % | | 0.59 | % | | 0.88 | % | | 0.59 | % |
| | | | | | | | | | | | | | | |
| Capital Ratios: | | | | | | | | | | | | | | |
| Equity to assets | | 9.79 | % | | 10.12 | % | | 9.74 | % | | 9.67 | % | | 10.26 | % | | 9.79 | % | | 10.26 | % |
| Leverage ratio | | 9.27 | % | | 9.41 | % | | 9.59 | % | | 9.24 | % | | 9.54 | % | | 9.27 | % | | 9.54 | % |
| Common equity Tier 1 capital ratio | | 10.55 | % | | 10.76 | % | | 10.32 | % | | 10.15 | % | | 10.11 | % | | 10.55 | % | | 10.11 | % |
| Tier 1 risk-based capital ratio | | 11.54 | % | | 11.79 | % | | 11.33 | % | | 11.19 | % | | 11.92 | % | | 11.54 | % | | 11.92 | % |
| Total risk-based capital ratio | | 14.87 | % | | 15.18 | % | | 14.66 | % | | 14.63 | % | | 15.36 | % | | 14.87 | % | | 15.36 | % |
1 annualized for the quarterly periods presented
2 net interest income as a percentage of average interest earning assets
3 noninterest expense as a percentage of net interest income and noninterest income
4 noninterest expense as a percentage of average assets
5 charge-offs less recoveries
6 excludes loans held for sale
