Exhibit 99.1
Xenith Bankshares, Inc. Reports Loan, Deposit, and Total Asset Growth
for The Third Quarter, and Nine Months of 2013 Financial Results
RICHMOND, Va., October 30, 2013 — Xenith Bankshares, Inc. (Nasdaq:XBKS), parent company of Xenith Bank, a business-focused bank serving the Greater Washington, D.C., Richmond, and Greater Hampton Roads, Virginia markets, today announced financial results for the three and nine months ended September 30, 2013.
Net income was $748,000, or $0.07 per common share, for the three months ended September 30, 2013, compared to net income of $5.9 million, or $0.56 per common share, for the three months ended September 30, 2012. For the nine months ended September 30, 2013, net income was $1.7 million, or $0.16 per common share, compared to $7.0 million, or $0.67 per common share for the nine months ended September 30, 2012. Net income in both periods of 2013 reflected income tax expense, while net income in the comparable 2012 periods included a $5.0 million, or $0.47 per common share, tax benefit due to the reversal of the valuation allowance on the company’s net deferred tax asset.
T. Gaylon Layfield, III, President and Chief Executive Officer, commented: “Xenith’s financial results demonstrate the continued progress we have made in building a diversified portfolio of loans and deposits, while maintaining strong credit quality and time-tested underwriting standards. We are supporting our lending activities primarily with low-cost core deposits, which is having a positive impact on our cost of funds. We have purposely built an asset-sensitive balance sheet, which we believe positions the bank well in a rising interest rate environment.”
Third Quarter, Nine Months 2013 Highlights
| | • | | Reflecting improvement in core operations, net income before income tax in the third quarters of 2013 and 2012 was $1.2 million and $1.0 million, respectively, while net income before income tax in the nine months of 2013 and 2012 was $2.6 million and $2.1 million, respectively. |
| | • | | Net loans held for investment were $432.3 million at September 30, 2013, up 14%, compared to $379.0 million at December 31, 2012. |
| | • | | Average interest-earning assets in third quarter 2013 were $554.2 million, up 8% from $513.1 million in third quarter 2012. |
| | • | | Total assets at September 30, 2013 were $606.3 million, an increase of 7.6%, compared to $563.2 million at December 31, 2012. |
| | • | | Asset quality and coverage for loan losses remained strong at September 30, 2013, with ratios of nonperforming assets to total assets of 0.73%, nonperforming assets to loans held for investment of 1.02%, and an allowance for loan and lease losses to nonaccrual loans of 127%. Net charge-offs as a percentage of average loans held for investment were 0.15% for the nine-month period ended September 30, 2013. |
| | • | | Capital strength was reflected in ratios that were well above regulatory standards for “well-capitalized” banks, with a Tier 1 leverage ratio of 12.0%, a Tier 1 risk-based capital ratio of 13.8%, and a total risk-based capital ratio of 14.9% at September 30, 2013. |
| | • | | Reflecting shareholder value growth, tangible book value1 at September 30, 2013 was $6.07 per common share, compared to $6.02 at December 31, 2012. |
“Our primary approach to building value is to build a strong balance sheet that performs in a variety of economic and interest rate environments,” Layfield explained. “We have invested in people, because long-term performance, sustainability, and growth require experienced revenue-generating loan officers, supported by a staff focused on outstanding execution. We believe that we have developed the technology and operational capability to drive growth while carefully monitoring credit quality and overall enterprise risk management. We focus closely on ensuring risk-adjusted loan pricing, because prudent growth is in our shareholders’ best interest.
Xenith’s loan portfolio at September 30, 2013 reflected balanced growth in C&I and CRE lending since year end 2012, consistent with our objective to maintain an appropriate loan mix. Our C&I portfolio covers a broad array of industries in our target markets, and our CRE portfolio is heavily weighted toward loans to strong, local developers and investors.” Layfield noted that in the third quarter of 2013, the bank acquired a $21 million portfolio of student loans, which on average are nearly 98% U.S. government guaranteed, 20% risk-weighted, and re-price every 90 days. Layfield commented: “We believe these guaranteed student loans are an attractive asset class with acceptable risk-adjusted returns and in the intermediate term, provide us with an opportunity to further leverage our capital.”
Operating Results
Income Statement
Total interest income for the three months ended September 30, 2013 was $6.9 million, compared to $6.8 million for the three months ended September 30, 2012. Interest income reflected stable interest and fees on loans, and increased interest from securities. Average interest-earning assets in third quarter 2013 were $554.2 million, up 8% from $513.1 million in third quarter 2012. Interest income for the nine months ended September 30, 2013, was $19.2 million, compared to $19.5 million for the same period of 2012. Interest income in the nine month comparative periods reflected lower accretion from acquired loans, further discussed below, and lower interest from securities.
Total interest expense for the three months ended September 30, 2013 was $832,000, compared to $985,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, interest expense was $2.6 million, compared to $3.0 million for the same period of 2012. Lower interest expense on higher average deposit balances contributed to enhanced profitability.
Net interest income after provision for loan and lease losses was $5.6 million in the third quarter of 2013, compared to $5.4 million in the third quarter of 2012, as net interest income increased moderately and the provision for loan and lease losses remained relatively stable at $497,000 in the third quarter of 2013, compared to the prior year’s third quarter provision of $476,000. For the nine-month period ended September 30, 2013, net interest income after loan and lease loss provision was $15.7 million, compared to $15.1 million for the same period of 2012, reflecting stable net interest income and a decline in the company’s loan loss provision to $913,000, compared to $1.4 million in the same period of 2012. Net interest income after provision for loan losses in the third quarter and nine-month 2013 periods was affected by margin pressure and lower accretion on acquired loans, offset by lower provision expense due to solid asset quality. Net interest margin in the third quarter of 2013 was 4.38% compared to 4.54% in the third quarter of 2012, while net interest margin for the nine months ended September 30, 2013 was 4.04%, compared to 4.58% for the same nine-month period of 2012. Accretion of fair value adjustments on acquired loans was $1.1 million in both third quarter 2013 and 2012, and $2.1 million and $2.7 million, respectively, in the nine-month periods ended September 30, 2013 and 2012.
Total noninterest income was $345,000 in the third quarter of 2013, compared to a loss of $14,000 in the third quarter of 2012, primarily reflecting growth in service charges on deposit accounts, increased fees from treasury management services, and fees associated with customer interest rate swaps. For the nine months ended September 30, 2013, noninterest income increased to $1.4 million, compared to $596,000 for the same nine months of 2012, reflecting higher year-over-year income from service charges, fees, and other income. The nine month period of 2013 included a $361,000 gain on the sale of collateral on an impaired loan acquired in the 2011 Virginia Business Bank transaction.
Noninterest expense in the third quarter of 2013 was $4.8 million, compared to $4.4 million in the third quarter of 2012, and for the nine months ended September 30, 2013 was $14.4 million, compared to $13.6 million for the same prior year period. Layfield noted both the third quarter and nine-month 2013 periods reflect increased compensation and benefits, primarily related to the company’s hiring of experienced relationship managers in the Greater Washington, D.C. and Richmond markets to drive organic loan and deposit growth.
As previously noted, the company had income tax expense in both the third quarter and nine-month periods of 2013. In both comparable periods of 2012, the company had no income tax expense and a $5.0 million tax benefit due to the reversal of the valuation allowance on the company’s net deferred tax asset. For purposes of comparison, net income before income tax in the third quarters of 2013 and 2012 was $1.2 million and $1.0 million, respectively, while net income before income tax in the nine months ended September 30, 2013 and 2012 was $2.6 million and $2.1 million, respectively.
Balance Sheet
Loans held for investment after allowance for loan and lease losses grew to $432.3 million at September 30, 2013, compared to $379.0 million at December 31, 2012 and $393.6 million at June 30, 2013. Loan balances held for investment at September 30, 2013 include $21 million of guaranteed student loans purchased late in the third quarter. Loans held for sale, which primarily reflect the company’s participation in a mortgage warehouse lending program, were $34.2 million at September 30, 2013, compared to $80.9 million at December 31, 2012. The decline reflected lower mortgage refinancing activity nationwide, which the company expects will continue to impact balances in the fourth quarter until balances are at an insignificant level. Layfield commented that additional investments in guaranteed student loans may be a prudent use of cash freed up from the mortgage warehouse program.
Securities available for sale were $72.4 million at September 30, 2013, compared to $57.6 million at December 31, 2012. Securities available for sale as a percentage of the company’s total assets were 12% at September 30, 2013.
Layfield commented: “Given the uncertain interest rate environment and our desire to fund higher yielding loans with our excess liquidity, compared to lower yielding securities, we continued to maintain investments of shorter duration in our investment portfolio and a good balance of floating rate investments.”
Total assets were $606.3 million at September 30, 2013, compared to $563.2 million at December 31, 2012, primarily reflecting loan growth, cash and due from banks, and higher levels of investment securities.
Growth in commercial banking relationships contributed to a 9% growth in total deposits, which were $495.8 million at September 30, 2013, compared to $453.2 million at December 31, 2012. Noninterest-bearing demand accounts and lower-interest money market accounts fueled the growth, providing additional core deposit funding to support the company’s lending activities. Average deposit balances in the third quarter of 2013 were $485.5 million, compared to $434.6 million in the comparable 2012 period.
Asset and Credit Quality
Balance sheet and asset quality continued to improve. At September 30, 2013, ratios of nonperforming assets to total assets was 0.73%, nonperforming assets to loans held for investment was 1.02%, and the company’s allowance for loan and lease losses to nonaccrual loans was 127%. Net charge-offs as a percentage of average loans held for investment were 0.15% for the nine-month period ended September 30, 2013.
Capital and Shareholder Value Measures
Capital ratios remained above regulatory standards for “well-capitalized” banks, with a Tier 1 leverage ratio of 12.0%, a Tier 1 risk-based capital ratio of 13.8%, and a total risk-based capital ratio of 14.9% at September 30, 2013.
As part of the company’s share repurchase program announced in the third quarter of 2013, under which the company may repurchase up to 210,000 shares of its common stock, or approximately 2% of its currently outstanding shares, the company repurchased 16,850 shares at an average price of $5.92 per share during the third quarter for a total cost of $99,684.
Total shareholders’ equity was $87.7 million at September 30, 2013, compared to $87.5 million at December 31, 2012. The increase during third quarter in longer term interest rates had a negative impact on the market value of the
company’s securities portfolio, which reduces shareholders’ equity. Tangible book value1 at September 30, 2013 was $6.07 per share, compared to $6.02 at December 31, 2012. Return on average assets was 0.50% at September 30, 2013 compared to 0.24% at December 31, 2012. Return on average common equity increased to 3.78% at September 30, 2013, compared to 1.68% at December 31, 2012.
Market Overview and Outlook
Layfield concluded: “We maintain a long-term perspective to building a premier business banking franchise in the diverse and attractive markets Xenith serves. We anticipate continued organic growth with an eye towards thoughtful and prudent acquisitions or other transactions where and when appropriate. The corporate culture we are building is an important consideration in acquisitive growth, as we look at potential merger or acquisition candidates and their respective shareholder bases as partners teaming with Xenith. We believe our future is bright and are cautiously optimistic as the economy continues to improve slowly.”
Profile
Xenith Bankshares, Inc. is the holding company for Xenith Bank. Xenith Bank is a full-service, locally-managed commercial bank, specifically targeting the banking needs of middle market and small businesses, local real estate developers and investors, private banking clients, and select retail banking clients. As of September 30, 2013, the company had total assets of $606.3 million and total deposits of $495.8 million. Xenith Bank’s target markets are Greater Washington, DC, Richmond, VA, and Greater Hampton Roads, VA metropolitan statistical areas. The company is headquartered in Richmond, Virginia and currently has six branch locations in Tysons Corner, Richmond, and Suffolk, Virginia. Xenith Bankshares common stock trades on the NASDAQ Capital Market under the symbol “XBKS.”
For more information about Xenith Bankshares and Xenith Bank, visit our website:https://www.xenithbank.com/
All statements other than statements of historical facts contained in this press release are forward-looking statements. Forward-looking statements made in this press release reflect beliefs, assumptions and expectations of future events or results, taking into account the information currently available to Xenith Bankshares, Inc. These beliefs, assumptions and expectations may change as a result of many possible events, circumstances or factors, not all of which are currently known to Xenith Bankshares. If a change occurs, Xenith Bankshares’ business, financial condition, liquidity, results of operations and prospects may vary materially from those expressed in, or implied by, the forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include the risks discussed in Xenith Bankshares’ public filings with the Securities and Exchange Commission, including those outlined in Part I, Item 1A, “Risk Factors” of Xenith Bankshares’ Annual Report on Form 10-K for the year ended December 31, 2012. Except as required by applicable law or regulations, Xenith Bankshares does not undertake, and specifically disclaims any obligation, to update or revise any forward-looking statement.
| 1 | Please see the discussion of non-GAAP financial measures at the end of the financial tables. |
# # # # #
Contact:
Thomas W. Osgood
Executive Vice President, Chief Financial Officer,
Chief Administrative Officer and Treasurer
(804) 433-2209
tosgood@xenithbank.com
-Selected Financial Tables Follow-
XENITH BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2013 AND DECEMBER 31, 2012
| | | | | | | | |
| (in thousands, except share data) | | (Unaudited)
September 30, 2013 | | | December 31, 2012 | |
Assets | | | | | | | | |
Cash and cash equivalents | | | | | | | | |
Cash and due from banks | | $ | 23,604 | | | $ | 9,457 | |
Federal funds sold | | | 935 | | | | 2,906 | |
| | | | | | | | |
Total cash and cash equivalents | | | 24,539 | | | | 12,363 | |
Securities available for sale, at fair value | | | 72,449 | | | | 57,551 | |
Loans held for sale | | | 34,247 | | | | 80,867 | |
Loans held for investment, net of allowance for loan and lease losses, 2013 - $5,129; 2012 - $4,875 | | | 432,269 | | | | 379,006 | |
Premises and equipment, net | | | 5,117 | | | | 5,397 | |
Other real estate owned | | | 400 | | | | 276 | |
Goodwill and other intangible assets, net | | | 15,716 | | | | 15,989 | |
Accrued interest receivable | | | 1,462 | | | | 1,606 | |
Deferred tax asset | | | 4,354 | | | | 4,094 | |
Bank owned life insurance | | | 9,606 | | | | — | |
Other assets | | | 6,101 | | | | 6,057 | |
| | | | | | | | |
Total assets | | $ | 606,260 | | | $ | 563,206 | |
| | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | |
Deposits | | | | | | | | |
Demand and money market | | $ | 333,179 | | | $ | 317,526 | |
Savings | | | 4,561 | | | | 4,069 | |
Time | | | 158,081 | | | | 131,636 | |
| | | | | | | | |
Total deposits | | | 495,821 | | | | 453,231 | |
Accrued interest payable | | | 227 | | | | 232 | |
Borrowings | | | 20,000 | | | | 20,000 | |
Other liabilities | | | 2,512 | | | | 2,196 | |
| | | | | | | | |
Total liabilities | | | 518,560 | | | | 475,659 | |
| | | | | | | | |
Shareholders’ equity | | | | | | | | |
Preferred stock, $1.00 par value, $1,000 liquidation value, 25,000,000 shares authorized as of September 30, 2013 and December 31, 2012; 8,381 shares issued and outstanding as of September 30, 2013 and December 31, 2012 | | | 8,381 | | | | 8,381 | |
Common stock, $1.00 par value, 100,000,000 shares authorized as of September 30, 2013 and December 31, 2012; 10,471,210 shares issued and outstanding as of September 30, 2013 and 10,488,060 shares issued and outstanding as of December 31, 2012 | | | 10,471 | | | | 10,488 | |
Additional paid-in capital | | | 71,812 | | | | 71,414 | |
Accumulated deficit | | | (2,005 | ) | | | (3,660 | ) |
Accumulated other comprehensive (loss) income, net of tax | | | (959 | ) | | | 924 | |
| | | | | | | | |
Total shareholders’ equity | | | 87,700 | | | | 87,547 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 606,260 | | | $ | 563,206 | |
| | | | | | | | |
See notes to consolidated financial statements.
XENITH BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
| | | | | | | | |
| (in thousands, except per share data) | | September 30, 2013 | | | September 30, 2012 | |
Interest income | | | | | | | | |
Interest and fees on loans | | $ | 6,481 | | | $ | 6,431 | |
Interest on securities | | | 350 | | | | 320 | |
Interest on federal funds sold and deposits in other banks | | | 63 | | | | 62 | |
| | | | | | | | |
Total interest income | | | 6,894 | | | | 6,813 | |
| | | | | | | | |
Interest expense | | | | | | | | |
Interest on deposits | | | 510 | | | | 683 | |
Interest on time certificates of $100,000 and over | | | 226 | | | | 209 | |
Interest on federal funds purchased and borrowed funds | | | 96 | | | | 93 | |
| | | | | | | | |
Total interest expense | | | 832 | | | | 985 | |
| | | | | | | | |
Net interest income | | | 6,062 | | | | 5,828 | |
Provision for loan and lease losses | | | 497 | | | | 476 | |
| | | | | | | | |
Net interest income after provision for loan and lease losses | | | 5,565 | | | | 5,352 | |
| | | | | | | | |
Noninterest income | | | | | | | | |
Service charges on deposit accounts | | | 113 | | | | 81 | |
Net loss on sale and write-down of other real estate owned and other collateral | | | (4 | ) | | | (148 | ) |
Gain on sales of securities | | | — | | | | 1 | |
Increase in cash surrender value of bank owned life insurance | | | 83 | | | | — | |
Other | | | 153 | | | | 52 | |
| | | | | | | | |
Total noninterest income | | | 345 | | | | (14 | ) |
| | | | | | | | |
Noninterest expense | | | | | | | | |
Compensation and benefits | | | 2,800 | | | | 2,581 | |
Occupancy | | | 378 | | | | 355 | |
FDIC insurance | | | 96 | | | | 58 | |
Bank franchise taxes | | | 188 | | | | 160 | |
Technology | | | 400 | | | | 385 | |
Communications | | | 65 | | | | 68 | |
Insurance | | | 74 | | | | 73 | |
Professional fees | | | 283 | | | | 325 | |
Other real estate owned | | | 2 | | | | 8 | |
Amortization of intangible assets | | | 91 | | | | 91 | |
Other | | | 382 | | | | 281 | |
| | | | | | | | |
Total noninterest expense | | | 4,759 | | | | 4,385 | |
| | | | | | | | |
Income before income tax | | | 1,151 | | | | 953 | |
Income tax expense (benefit) | | | 403 | | | | (4,950 | ) |
| | | | | | | | |
Net income | | | 748 | | | | 5,903 | |
| | | | | | | | |
Preferred stock dividend | | | (21 | ) | | | (21 | ) |
| | | | | | | | |
Net income available to common shareholders | | $ | 727 | | | $ | 5,882 | |
| | | | | | | | |
Earnings per common share (basic and diluted): | | $ | 0.07 | | | $ | 0.56 | |
| | | | | | | | |
See notes to consolidated financial statements.
XENITH BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
| | | | | | | | |
| (in thousands, except per share data) | | September 30, 2013 | | | September 30, 2012 | |
Interest income | | | | | | | | |
Interest and fees on loans | | $ | 18,099 | | | $ | 18,127 | |
Interest on securities | | | 870 | | | | 1,151 | |
Interest on federal funds sold and deposits in other banks | | | 217 | | | | 205 | |
| | | | | | | | |
Total interest income | | | 19,186 | | | | 19,483 | |
| | | | | | | | |
Interest expense | | | | | | | | |
Interest on deposits | | | 1,625 | | | | 2,019 | |
Interest on time certificates of $100,000 and over | | | 715 | | | | 715 | |
Interest on federal funds purchased and borrowed funds | | | 282 | | | | 279 | |
| | | | | | | | |
Total interest expense | | | 2,622 | | | | 3,013 | |
| | | | | | | | |
Net interest income | | | 16,564 | | | | 16,470 | |
Provision for loan and lease losses | | | 913 | | | | 1,383 | |
| | | | | | | | |
Net interest income after provision for loan and lease losses | | | 15,651 | | | | 15,087 | |
| | | | | | | | |
Noninterest income | | | | | | | | |
Service charges on deposit accounts | | | 312 | | | | 213 | |
Net gain (loss) on sale and write-down of other real estate owned and other collateral | | | 342 | | | | (19 | ) |
Gain on sales of securities | | | 291 | | | | 220 | |
Increase in cash surrender value of bank owned life insurance | | | 106 | | | | — | |
Other | | | 329 | | | | 182 | |
| | | | | | | | |
Total noninterest income | | | 1,380 | | | | 596 | |
| | | | | | | | |
Noninterest expense | | | | | | | | |
Compensation and benefits | | | 8,548 | | | | 8,095 | |
Occupancy | | | 1,112 | | | | 1,091 | |
FDIC insurance | | | 304 | | | | 239 | |
Bank franchise taxes | | | 601 | | | | 454 | |
Technology | | | 1,220 | | | | 1,190 | |
Communications | | | 186 | | | | 207 | |
Insurance | | | 222 | | | | 221 | |
Professional fees | | | 792 | | | | 834 | |
Other real estate owned | | | 4 | | | | 10 | |
Amortization of intangible assets | | | 273 | | | | 274 | |
Other | | | 1,126 | | | | 971 | |
| | | | | | | | |
Total noninterest expense | | | 14,388 | | | | 13,586 | |
| | | | | | | | |
Income before income tax | | | 2,643 | | | | 2,097 | |
Income tax expense (benefit) | | | 925 | | | | (4,950 | ) |
| | | | | | | | |
Net income | | | 1,718 | | | | 7,047 | |
| | | | | | | | |
Preferred stock dividend | | | (63 | ) | | | (68 | ) |
| | | | | | | | |
Net income available to common shareholders | | $ | 1,655 | | | $ | 6,979 | |
| | | | | | | | |
Earnings per common share (basic and diluted): | | $ | 0.16 | | | $ | 0.67 | |
| | | | | | | | |
See notes to consolidated financial statements.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
($ in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | |
| PERFORMANCE RATIOS | | Quarter Ended | | | Year Ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | | | 2012 | |
Net interest margin (1) | | | 4.38 | % | | | 3.90 | % | | | 3.83 | % | | | 4.18 | % | | | 4.54 | % | | | 4.47 | % |
Return on average assets (2) | | | 0.50 | % | | | 0.39 | % | | | 0.29 | % | | | 0.24 | % | | | 4.38 | % | | | 1.42 | % |
Return on average common equity (3) | | | 3.78 | % | | | 2.77 | % | | | 2.10 | % | | | 1.68 | % | | | 31.86 | % | | | 9.89 | % |
Efficiency ratio (4) | | | 74 | % | | | 85 | % | | | 82 | % | | | 80 | % | | | 75 | % | | | 80 | % |
Net income | | $ | 748 | | | | 552 | | | | 418 | | | | 332 | | | | 5,903 | | | | 7,379 | |
Earnings per common share (basic and diluted) | | $ | 0.07 | | | | 0.05 | | | | 0.04 | | | | 0.03 | | | | 0.56 | | | | 0.70 | |
| (1) | Net interest margin is net interest income divided by average interest-earning assets. |
| (2) | Return on average assets is net income for the respective period (annualized for quarter periods) divided by average assets for the respective period. |
| (3) | Return on average equity is net income for the respective period (annualized for quarter periods) divided by average equity for the respective period. |
| (4) | Efficiency ratio is non-interest expenses divided by the sum of net interest income and non-interest income. |
| | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY RATIOS | | Quarter Ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
Net charge-offs as a percentage of average loans held for investment | | | 0.15 | % | | | 0.11 | % | | | 0.04 | % | | | 0.35 | % | | | 0.28 | % |
Allowance for loan and lease losses (ALLL) as a percentage of total loans held for investment (1) | | | 1.17 | % | | | 1.23 | % | | | 1.35 | % | | | 1.27 | % | | | 1.37 | % |
ALLL plus remaining discounts (fair value adjustments) on acquired loans as a percentage of total loans held for investment (2) | | | 2.34 | % | | | 2.96 | % | | | 3.31 | % | | | 3.32 | % | | | 3.91 | % |
ALLL to nonaccrual loans (1) | | | 126.59 | % | | | 100.08 | % | | | 104.35 | % | | | 96.16 | % | | | 95.94 | % |
Nonperforming assets as a percentage of total loans held for investment | | | 1.02 | % | | | 1.29 | % | | | 1.37 | % | | | 1.39 | % | | | 1.52 | % |
Nonperforming assets as a percentage of total assets | | | 0.73 | % | | | 0.89 | % | | | 0.89 | % | | | 0.95 | % | | | 0.93 | % |
| (1) | ALLL excludes discounts (fair value adjustments) on acquired loans. |
| (2) | Ratio is a non-GAAP financial measure calculated as the sum of ALLL and discounts (fair value adjustments) on acquired loans held for investment divided by the sum of total loans held for investment and discounts on loans. See discussion of non-GAAP financial measures below. |
| | | | | | | | | | | | | | | | | | | | |
| CAPITAL RATIOS | | Quarter Ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
Tier 1 leverage ratio | | | 12.01 | % | | | 12.39 | % | | | 12.23 | % | | | 12.90 | % | | | 13.02 | % |
Tier 1 risk-based capital ratio | | | 13.82 | % | | | 13.69 | % | | | 14.60 | % | | | 15.39 | % | | | 17.01 | % |
Total risk-based capital ratio | | | 14.89 | % | | | 14.71 | % | | | 15.75 | % | | | 16.52 | % | | | 18.24 | % |
Book value per common share (1) | | $ | 7.58 | | | | 7.51 | | | | 7.57 | | | | 7.55 | | | | 7.54 | |
Tangible book value per common share (2) | | $ | 6.07 | | | | 6.00 | | | | 6.05 | | | | 6.02 | | | | 6.00 | |
| (1) | Book value per common share is total shareholders’ equity less preferred stock divided by common shares outstanding at the end of the respective period. |
| (2) | Tangible book value per common share is a non-GAAP financial measure calculated as total shareholders’ equity less the sum of preferred stock and goodwill and other intangible assets divided by common shares outstanding at the end of the respective period. See discussion of non-GAAP financial measures below. |
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| AVERAGE BALANCES (1) | | Quarter Ended | | | Year Ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | | | 2012 | |
Total assets | | $ | 597,476 | | | | 570,991 | | | | 577,050 | | | | 558,133 | | | | 539,544 | | | | 519,330 | |
Loans held for sale | | $ | 50,179 | | | | 62,396 | | | | 66,434 | | | | 72,676 | | | | 75,396 | | | | 49,579 | |
Loans held for investment, net of allowance for loan and lease losses | | $ | 402,703 | | | | 372,746 | | | | 369,688 | | | | 351,335 | | | | 333,346 | | | | 332,507 | |
Total deposits | | $ | 485,511 | | | | 460,288 | | | | 466,018 | | | | 447,829 | | | | 434,640 | | | | 413,808 | |
Shareholders’ equity | | $ | 87,598 | | | | 88,153 | | | | 87,907 | | | | 87,623 | | | | 82,485 | | | | 83,010 | |
| (1) | Average balances are computed on a daily basis. |
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| END OF PERIOD BALANCES | | Quarter Ended | |
| | | September 30,
2013 | | | June 30,
2013 | | | March 31,
2013 | | | December 31,
2012 | | | September 30,
2012 | |
Total assets | | $ | 606,260 | | | | 578,931 | | | | 579,853 | | | | 563,206 | | | | 558,011 | |
Loans held for sale | | $ | 34,247 | | | | 61,861 | | | | 68,905 | | | | 80,867 | | | | 74,632 | |
Loans held for investment, net of allowance for loan and lease losses | | $ | 432,269 | | | | 393,591 | | | | 372,052 | | | | 379,006 | | | | 336,495 | |
Total deposits | | $ | 495,821 | | | | 464,676 | | | | 468,798 | | | | 453,231 | | | | 448,144 | |
Shareholders’ equity | | $ | 87,700 | | | | 87,138 | | | | 87,772 | | | | 87,547 | | | | 87,172 | |
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| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |
| | | Quarter Ended | |
| | | September 30, | | | June 30, | | | March 31, | | | December 31, | | | September 30, | |
ALLL + Discount / Gross Loans | | 2013 | | | 2013 | | | 2013 | | | 2012 | | | 2012 | |
Allowance for loan and lease losses | | $ | 5,129 | | | | 4,882 | | | | 5,099 | | | | 4,875 | | | | 4,658 | |
Add: Discounts (fair value adjustments) on acquired loans | | $ | 5,237 | | | | 7,134 | | | | 7,631 | | | | 8,133 | | | | 9,040 | |
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Total ALLL + discounts on acquired loans | | | 10,366 | | | | 12,016 | | | | 12,730 | | | | 13,008 | | | | 13,698 | |
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Gross loans held for investment + discounts (fair value adjustments) on acquired loans | | | 442,635 | | | | 405,607 | | | | 384,782 | | | | 392,014 | | | | 350,193 | |
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ALLL plus discounts (fair value adjustments) on acquired loans as a percentage of total loans held for investment | | | 2.34 | % | | | 2.96 | % | | | 3.31 | % | | | 3.32 | % | | | 3.91 | % |
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Tangible book value per common share | | | | | | | | | | | | | | | |
Total shareholders’ equity | | | 87,700 | | | | 87,138 | | | | 87,772 | | | | 87,547 | | | | 87,172 | |
Deduct: Preferred stock | | | 8,381 | | | | 8,381 | | | | 8,381 | | | | 8,381 | | | | 8,381 | |
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Common shareholders’ equity | | | 79,319 | | | | 78,757 | | | | 79,391 | | | | 79,166 | | | | 78,791 | |
Deduct: Goodwill and other intangible assets | | $ | 15,716 | | | | 15,807 | | | | 15,898 | | | | 15,989 | | | | 16,080 | |
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Tangible common shareholders’ equity | | | 63,603 | | | | 62,950 | | | | 63,493 | | | | 63,177 | | | | 62,711 | |
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Common shares outstanding | | | 10,471 | | | | 10,488 | | | | 10,488 | | | | 10,488 | | | | 10,447 | |
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Tangible book value per common share | | $ | 6.07 | | | | 6.00 | | | | 6.05 | | | | 6.02 | | | | 6.00 | |
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Allowance for loan and lease losses (ALLL) plus discounts on acquired loans as a percentage of total loans held for investment and tangible book value per share are supplemental financial measures that are not required by, or presented in accordance with, U.S. GAAP. Management believes that ALLL plus discounts on acquired loans held for investment is meaningful because it is one of the measures we use to assess our asset quality. Management believes that tangible book value per common share is meaningful because it is one of the measures we use to assess capital adequacy. Set forth above are reconciliations of each of these non-GAAP financial measures calculated and reported in accordance with GAAP. Book value is the same as shareholders’ equity presented on our consolidated balance sheets. Our calculations of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.
