Exhibit 99.1
News Release
Contact: Glen L. Stiteley, Chief Financial Officer
(815) 725-1885
Source: First Community Financial Partners, Inc.
First Community Financial Partners, Inc. Announces Second Quarter 2016 Financial Results
JOLIET, IL, July 21, 2016 -- First Community Financial Partners, Inc. (NASDAQ: FCFP) (“First Community,” “FCFP” or the “Company”), the parent company of First Community Financial Bank (the “Bank”), today reported financial results as of and for the three and six months ended June 30, 2016.
Second Quarter 2016 Highlights
| |
| • | Asset growth of $64.5 million, or 6.08%, from the first quarter, and $84.7 million, or 8.14% from December 31, 2015 |
| |
| • | Loan growth of $98.4 million, or 12.71%, from the first quarter, and $100.3 million, or 12.99% from December 31, 2015 |
| |
| • | Deposit growth of $17.9 million, or 2.03%, from the first quarter and $30.8 million, or 3.56%, from December 31, 2015 |
| |
| • | Noninterest bearing deposits decrease of $1.2 million, or 0.57%, from the first quarter, growth of $7.2 million, or 3.67%, from December 31, 2015 |
| |
| • | Diluted earnings per share (“EPS”) of $0.25 for the six months ended June 30, 2016; a $0.02 or 8.70% per diluted share increase over the same period in 2015 |
| |
| • | Pre-tax, pre-provision core income growth of $875,000, or 30.47%, to $3.7 million, compared to $2.9 million in the second quarter of 2015 |
| |
| • | Net interest income growth of $1.3 million, or 16.81%, compared to the second quarter of 2015 and $2.4 million, or 16.15%, compared to the six months ended June 30, 2015 |
| |
| • | Loan loss provision of $500,000 in the second quarter of 2016 compared to a reversal of $749,000 in loan loss provision in the second quarter of 2015, as a result of loan growth in the second quarter of 2016 |
| |
| • | Noninterest expense increase of $1,711,000, or 16.52%, as compared to the six months ended June 30, 2015, due to the addition of six commercial bankers and one leasing officer in addition to merger related costs incurred during 2016 |
| |
| • | Shareholders’ equity increase of $8.1 million, or 7.83%, to $111.1 million from year-end; resulting in a tangible equity ratio of 9.87% as of June 30, 2016 |
| |
| • | Nonperforming assets decrease of $2.5 million, or 34.49%, from March 31, 2016 to $4.8 million, or 0.43%, of total assets |
Net income applicable to shareholders for the quarter ended June 30, 2016 was $2.3 million, or $0.13 per diluted share, compared with $2.3 million, or $0.14 per diluted share, for the quarter ended June 30, 2015. Net income applicable to shareholders for the six months ended June 30, 2016 was $4.3 million, or $0.25 per diluted share, compared with $4.0 million, or $0.23 per diluted share for the six months ended June 30, 2015. Earnings in the second quarter of 2016 reflected year-over-year growth in net interest income offset by growth in expenses related to the addition of six commercial bankers and one leasing officer in addition to merger related costs incurred during 2016. The second quarter of 2016 included a provision for loan losses due to our loan growth in the second quarter
as compared to a reversal of loan loss provision in the second quarter of 2015. During the second quarter of 2016, the Company incurred $26,000 of professional fees and $410,000 in data processing fees related to the acquisition of Mazon State Bank.
Roy Thygesen, Chief Executive Officer, said, “Core revenues and commercial loan growth in the second quarter are starting to reflect the impact of investments we made early in the year. One such investment, the previously announced acquisition of Mazon State Bank, closed on July 1st. We also prepared ourselves for future investment activity by filing a shelf registration statement with the Securities and Exchange Commission in June, which will allow us to expeditiously tap the capital markets should other attractive opportunities arise.”
Mazon State Bank had approximately $81.7 million in assets, $32.6 million in loans, and $73.1 million in deposits as of the closing of the transaction on July 1, 2016. Mazon State Bank also had approximately $47.1 million in residential real estate loans sold and serviced.
“We are also very excited that FCFP has now been included in the Russell 2000® Index,” Thygesen added, “Inclusion in the Russell 2000® increases the visibility of our Company to the investor community and overall trading liquidity, both of which should benefit our shareholders.”
The Russell 2000® Index is a stock index measuring the performance of approximately 2,000 small-cap companies represented in the Russell 3000® Index. The Russell 3000® is comprised of the 3,000 largest U.S. stocks, based on market capitalization, and represents over 98% of the investible U.S. equity market. The Russell 2000® serves as a benchmark for small-cap stocks in the United States. The Russell 2000® is reconstituted annually in late June based on updated market capitalizations. On June 24, 2016, the Russell 2000® was reconstituted and FCFP was included in the Russell 2000®. 1.3 million shares of FCFP common stock traded on that day. For the first quarter 2016, the average daily trading volume in FCFP was 4,296 shares. For the second quarter of 2016, excluding the reconstitution day on June 24, 2016, FCFP’s average daily trading volume was 13,729 shares.
Second Quarter 2016 Financial Results
Loans
Total loans increased $98.4 million, or 12.71%, since the end of the first quarter and $144.4 million, or 19.84%, year-over-year. Commercial loans grew $57.9 million, or 31.96%, since the end of the first quarter and $51.3 million, or 27.30%, year-over-year. Commercial real estate loans increased $32.2 million, or 8.50%, since the end of the first quarter, and $46.9 million, or 12.90%, year-over-year. Residential real estate loans grew $4.7 million, or 3.38%, since the end of the first quarter and $34.1 million, or 31.04%, year-over-year. Construction loans were up $3.0 million, or 10.92%, since the first quarter and $11.2 million, or 57.22%, year-over-year. Loan growth was the result of a strong loan pipeline along with results produced by the addition of the new six person lending team and one new leasing officer hired during the first quarter of 2016.
Deposits and Other Borrowings
Total deposits increased $17.9 million, or 2.03%, since the first quarter and $62.4 million, or 7.48%, year-over-year. Noninterest bearing demand deposits decreased $1.2 million, or 0.57%, since the end of the first quarter and increased $28.7 million or, 16.46%, year-over-year. Our focus on relationship banking and growth in transactional accounts has resulted in a decline in time deposits of $13.9 million, or 4.67%, to $311.4 million at June 30, 2016, from $297.5 million at December 31, 2015. The ratio of time deposits to total deposits has steadily improved from 35.92% at June 30, 2015 to 34.36% at December 31, 2015 despite a slight increase to 34.72% at June 30, 2016. Other borrowings increased $42.5 million, or 74.58%, since the first quarter and $46.4 million, or 87.50%, from year-end. We funded our loan growth with short term Federal Home Loan Bank advances, sales of investment securities, and deposits gathered during the second quarter of 2016 in preparation of the closing for the purchase of Mazon State Bank and use of its deposits for funding during the third quarter 2016.
Net Interest Income and Margin
Second quarter 2016 net interest income was up $416,000, or 5.01%, from the first quarter of 2016. The Company’s net interest margin was 3.39% for the second quarter of 2016, compared to 3.27% in the second quarter of 2015. The increase in net interest income was due to continued growth in the loan portfolio and increase in noninterest bearing balances as a source of funding.
The Company’s net interest margin was 3.38% for the six months ended June 30, 2016, compared to 3.23% for the same period in 2015. The increase in net interest income was due to growth in the loan portfolio and lower average balance of subordinated debentures as a result of refinancing of these debentures with lower-cost secured borrowings at the end of the second quarter 2015.
Noninterest Income and Expense
Noninterest income increased $686,000, or 123.60%, from the first quarter of 2016 and increased $720,000, or 138.20%, from the second quarter of 2015. The increase from the first quarter of 2016 and the second quarter of 2015 was due to securities gains in the second quarter 2016 of $603,000 as opposed to no securities gains in the first quarter of 2016 or second quarter 2015. Securities gains were the result of $25.6 million in securities sold during the second quarter in order to fund loan growth. In addition, service charges on deposits increased $3,000, or 1.47%, from the first quarter of 2016. Mortgage income was also up $38,000, or 48.72%, for the second quarter of 2016, as compared to the first quarter, as a result of higher mortgage sale volumes. Other noninterest income increased by $42,000, or 15.38%, from the first quarter of 2016, related primarily to ATM fee income and lease referral income.
Noninterest expense increased $196,000, or 3.30%, from the first quarter of 2016 and $933,000, or 17.95%, from the second quarter of 2015. The increase was partially in relation to the addition of six commercial banking officers and one leasing officer during the first quarter of 2016. In addition, $26,000 of professional fees and $410,000 in data processing fees were incurred during the second quarter of 2016 related to the acquisition of Mazon State Bank.
Asset Quality
Total nonperforming assets decreased from March 31, 2016 by $2.5 million, or 34.49%, to $4.8 million at June 30, 2016. The ratio of nonperforming assets to total assets was 0.43% at June 30, 2016 compared to 0.70% at March 31, 2016. These decreases in the ratios were primarily the result of the sales of other real estate owned of $3.0 million during the quarter ended June 30, 2016. The sales of these properties, in addition to the write down of one other property, resulted in losses on the sales of $31,000.
The Company had net recoveries on loans of $209,000 in the second quarter of 2016, compared to net charge-offs of $609,000 in the second quarter of 2015 and net recoveries of $503,000 in the fourth quarter of 2015.
The ratio of the Company’s allowance for loan losses to nonperforming loans and allowance to total loans were 459.34% and 1.38% at June 30, 2016, respectively.
The Company recorded a provision for loan losses in the second quarter of 2016 of $500,000 compared to a reversal of $749,000 for the same period in 2015. The current year provision is the result of the loan growth experienced during the second quarter of 2016.
About First Community Financial Partners, Inc.: First Community Financial Partners, Inc., headquartered in Joliet, Illinois, is a bank holding company whose common stock trades on the NASDAQ Capital Market (NASDAQ: FCFP). First Community Financial Partners has one bank subsidiary, First Community Financial Bank. First Community Financial Bank, based in Plainfield, Illinois, has locations in Joliet, Plainfield, Homer Glen, Channahon, Naperville, Burr Ridge, Mazon, Braidwood, and Coal City, Illinois. The Bank is dedicated to its founding principles by being actively involved in the communities it serves and providing exceptional personal service delivered by experienced local professionals.
Special Note Concerning Forward-Looking Statements
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Any statements in this release other than statements of historical facts, including statements about management’s beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management’s views and assumptions regarding future events and business performance. Words such as “estimate,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “target,” “project,” “should,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties involve a number of factors related to the businesses of First Community and its wholly owned bank subsidiary, including: risks associated with First Community’s possible pursuit of acquisitions; unexpected results of acquisitions, including the acquisition of Mazon State Bank; economic conditions in First Community’s, and its wholly owned bank subsidiary’s service areas; system failures; losses of large customers; disruptions in relationships with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management personnel in the future; the impact of legislation and regulatory changes on the banking industry, including the implementation of the Basel III capital reforms; losses related to cyber-attacks; and liability and compliance costs regarding banking regulations; and changes in local, national and international economic conditions. These and other risks and uncertainties are discussed in more detail in First Community’s filings with the Securities and Exchange Commission, including First Community’s Annual Report on Form 10-K filed on March 14, 2016.
Many of these risks are beyond management’s ability to control or predict. All forward-looking statements attributable to First Community, and its wholly owned bank subsidiary, or persons acting on behalf of each of them are expressly qualified in their entirety by the cautionary statements and risk factors contained in this communication. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, First Community does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
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| | | | | | | | | | | | | | | |
| FINANCIAL SUMMARY | | | | |
| | | | | |
| June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| Period-End Balance Sheet |
| | | | |
| (In thousands)(Unaudited) | | | | |
| Assets |
| | | | |
| Cash and due from banks | $ | 13,777 |
| $ | 9,132 |
| $ | 10,699 |
| $ | 10,110 |
| $ | 9,669 |
|
| Interest-bearing deposits in banks | 19,335 |
| 30,558 |
| 7,406 |
| 21,324 |
| 38,390 |
|
| Securities available for sale | 179,517 |
| 203,874 |
| 205,604 |
| 215,827 |
| 182,982 |
|
| Mortgage loans held for sale | 711 |
| 133 |
| 400 |
| — |
| 1,449 |
|
| Leases, net | 448 |
| — |
| — |
| — |
| — |
|
| Commercial real estate | 410,461 |
| 378,304 |
| 381,098 |
| 368,896 |
| 363,575 |
|
| Commercial | 239,038 |
| 181,142 |
| 179,623 |
| 180,674 |
| 187,780 |
|
| Residential 1-4 family | 143,908 |
| 139,208 |
| 135,864 |
| 126,316 |
| 109,819 |
|
| Multifamily | 30,809 |
| 31,511 |
| 34,272 |
| 30,771 |
| 29,829 |
|
| Construction and land development | 30,834 |
| 27,798 |
| 22,082 |
| 19,451 |
| 19,612 |
|
| Farmland and agricultural production | 9,235 |
| 9,060 |
| 9,989 |
| 8,984 |
| 8,604 |
|
| Consumer and other | 7,924 |
| 7,250 |
| 9,391 |
| 7,963 |
| 8,578 |
|
| Total loans | 872,209 |
| 774,273 |
| 772,319 |
| 743,055 |
| 727,797 |
|
| Allowance for loan losses | 12,044 |
| 11,335 |
| 11,741 |
| 11,753 |
| 12,420 |
|
| Net loans | 860,165 |
| 762,938 |
| 760,578 |
| 731,302 |
| 715,377 |
|
| Other assets | 51,409 |
| 54,227 |
| 55,965 |
| 44,869 |
| 46,602 |
|
| Total Assets | $ | 1,125,362 |
| $ | 1,060,862 |
| $ | 1,040,652 |
| $ | 1,023,432 |
| $ | 994,469 |
|
|
|
|
|
|
|
| Liabilities and Shareholders' Equity | |
| | |
| Noninterest bearing deposits | $ | 203,258 |
| $ | 204,414 |
| $ | 196,063 |
| $ | 174,849 |
| $ | 174,527 |
|
| Savings deposits | 40,603 |
| 38,481 |
| 36,206 |
| 34,933 |
| 33,567 |
|
| NOW accounts | 103,324 |
| 104,136 |
| 102,882 |
| 101,828 |
| 95,406 |
|
| Money market accounts | 238,229 |
| 237,873 |
| 233,315 |
| 232,195 |
| 231,185 |
|
| Time deposits | 311,416 |
| 294,076 |
| 297,525 |
| 302,892 |
| 299,703 |
|
| Total deposits | 896,830 |
| 878,980 |
| 865,991 |
| 846,697 |
| 834,388 |
|
| Total borrowings | 114,701 |
| 72,237 |
| 68,315 |
| 72,551 |
| 59,398 |
|
| Other liabilities | 2,722 |
| 2,855 |
| 3,305 |
| 4,065 |
| 4,513 |
|
| Total Liabilities | 1,014,253 |
| 954,072 |
| 937,611 |
| 923,313 |
| 898,299 |
|
| Shareholders’ equity | 111,109 |
| 106,790 |
| 103,041 |
| 100,119 |
| 96,170 |
|
| Total Shareholders’ Equity | 111,109 |
| 106,790 |
| 103,041 |
| 100,119 |
| 96,170 |
|
| Total Liabilities and Shareholders’ Equity | $ | 1,125,362 |
| $ | 1,060,862 |
| $ | 1,040,652 |
| $ | 1,023,432 |
| $ | 994,469 |
|
|
| | | | | | | | | | | | | | | |
| FINANCIAL SUMMARY | | | | | |
| | Three months ended, |
| | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| Interest income: | (In thousands, except per share data)(Unaudited) |
| Loans, including fees | $ | 9,024 |
| $ | 8,508 |
| $ | 8,401 |
| $ | 8,218 |
| $ | 8,090 |
|
| Securities | 1,042 |
| 1,101 |
| 1,117 |
| 1,103 |
| 962 |
|
| Federal funds sold and other | 21 |
| 19 |
| 19 |
| 19 |
| 15 |
|
| Total interest income | 10,087 |
| 9,628 |
| 9,537 |
| 9,340 |
| 9,067 |
|
| Interest expense: | | | | | |
| Deposits | 957 |
| 940 |
| 986 |
| 973 |
| 987 |
|
| Federal funds purchased and other borrowed funds | 119 |
| 93 |
| 87 |
| 98 |
| 17 |
|
| Subordinated debentures | 297 |
| 297 |
| 297 |
| 297 |
| 603 |
|
| Total interest expense | 1,373 |
| 1,330 |
| 1,370 |
| 1,368 |
| 1,607 |
|
| Net interest income | 8,714 |
| 8,298 |
| 8,167 |
| 7,972 |
| 7,460 |
|
| Provision for loan losses | 500 |
| — |
| (515 | ) | (813 | ) | (749 | ) |
| Net interest income after provision for loan losses | 8,214 |
| 8,298 |
| 8,682 |
| 8,785 |
| 8,209 |
|
| Noninterest income: | | | | | |
| Service charges on deposit accounts | 207 |
| 204 |
| 190 |
| 188 |
| 194 |
|
| Gain on sale of securities | 603 |
| — |
| 212 |
| 251 |
| — |
|
| Mortgage fee income | 116 |
| 78 |
| 96 |
| 178 |
| 153 |
|
| Other | 315 |
| 273 |
| 261 |
| 152 |
| 174 |
|
| Total noninterest income | 1,241 |
| 555 |
| 759 |
| 769 |
| 521 |
|
| Noninterest expenses: | | | | | |
| Salaries and employee benefits | 3,311 |
| 3,256 |
| 3,004 |
| 2,841 |
| 2,810 |
|
| Occupancy and equipment expense | 429 |
| 437 |
| 494 |
| 486 |
| 505 |
|
| Data processing | 690 |
| 257 |
| 203 |
| 248 |
| 237 |
|
| Professional fees | 375 |
| 392 |
| 68 |
| 342 |
| 411 |
|
| Advertising and business development | 262 |
| 215 |
| 219 |
| 217 |
| 227 |
|
| Losses on sale and writedowns of foreclosed assets, net | 31 |
| 16 |
| 109 |
| 58 |
| 20 |
|
| Foreclosed assets expenses, net of rental income | 60 |
| 53 |
| 50 |
| (61 | ) | 70 |
|
| Other expense | 974 |
| 1,310 |
| 898 |
| 1,005 |
| 919 |
|
| Total noninterest expense | 6,132 |
| 5,936 |
| 5,045 |
| 5,136 |
| 5,199 |
|
| Income before income taxes | 3,323 |
| 2,917 |
| 4,396 |
| 4,418 |
| 3,531 |
|
| Income taxes | 1,058 |
| 889 |
| 1,474 |
| 1,471 |
| 1,189 |
|
| Net income applicable to common shareholders | $ | 2,265 |
| $ | 2,028 |
| $ | 2,922 |
| $ | 2,947 |
| $ | 2,342 |
|
| |
|
| | | | |
| Basic earnings per share | $ | 0.13 |
| $ | 0.12 |
| $ | 0.17 |
| $ | 0.17 |
| $ | 0.14 |
|
| |
|
| | | | |
| Diluted earnings per share | $ | 0.13 |
| $ | 0.12 |
| $ | 0.17 |
| $ | 0.17 |
| $ | 0.14 |
|
|
| | | | | | |
| | Six months ended June 30, |
| | 2016 | 2015 |
| Interest income: | (in thousands, except share data)(unaudited) |
| Loans, including fees | $ | 17,532 |
| $ | 15,906 |
|
| Securities | 2,143 |
| 1,913 |
|
| Federal funds sold and other | 40 |
| 28 |
|
| Total interest income | 19,715 |
| 17,847 |
|
| Interest expense: | | |
| Deposits | 1,897 |
| 1,964 |
|
| Federal funds purchased and other borrowed funds | 212 |
| 31 |
|
| Subordinated debentures | 594 |
| 1,206 |
|
| Total interest expense | 2,703 |
| 3,201 |
|
| Net interest income | 17,012 |
| 14,646 |
|
| Provision for loan losses | 500 |
| (749 | ) |
| Net interest income after provision for loan losses | 16,512 |
| 15,395 |
|
| Noninterest income: | | |
| Service charges on deposit accounts | 411 |
| 377 |
|
| Gain on sale of securities | 603 |
| 21 |
|
| Mortgage fee income | 194 |
| 257 |
|
| Other | 588 |
| 313 |
|
| | 1,796 |
| 968 |
|
| Noninterest expenses: | | |
| Salaries and employee benefits | 6,567 |
| 5,694 |
|
| Occupancy and equipment expense | 866 |
| 997 |
|
| Data processing | 947 |
| 462 |
|
| Professional fees | 767 |
| 792 |
|
| Advertising and business development | 477 |
| 417 |
|
| Losses on sale and writedowns of foreclosed assets, net | 47 |
| 20 |
|
| Foreclosed assets expenses, net of rental income | 113 |
| 141 |
|
| Other expense | 2,284 |
| 1,834 |
|
| | 12,068 |
| 10,357 |
|
| Income before income taxes | 6,240 |
| 6,006 |
|
| Income taxes | 1,947 |
| 2,056 |
|
| Net income applicable to common shareholders | $ | 4,293 |
| $ | 3,950 |
|
| | | |
| Basic earnings per share | $ | 0.25 |
| $ | 0.23 |
|
| | | |
| Diluted earnings per share | $ | 0.25 |
| $ | 0.23 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended, |
| June 30, 2016 | March 31, 2016 | June 30, 2015 |
| | Average
Balances | Income/
Expense | Yields/
Rates | Average
Balances | Income/
Expense | Yields/
Rates | Average
Balances | Income/
Expense | Yields/
Rates |
| Assets | (Dollars in thousands)(Unaudited) |
Loans (1) | $ | 826,416 |
| $ | 9,024 |
| 4.37 | % | $ | 768,983 |
| $ | 8,508 |
| 4.43 | % | $ | 711,889 |
| $ | 8,090 |
| 4.55 | % |
Investment securities (2) | 190,924 |
| 1,042 |
| 2.18 | % | 206,535 |
| 1,101 |
| 2.13 | % | 189,011 |
| 962 |
| 2.04 | % |
| Interest-bearing deposits with other banks | 11,465 |
| 21 |
| 0.73 | % | 13,690 |
| 19 |
| 0.56 | % | 11,973 |
| 15 |
| 0.50 | % |
| Total earning assets | $ | 1,028,805 |
| $ | 10,087 |
| 3.92 | % | $ | 989,208 |
| $ | 9,628 |
| 3.89 | % | $ | 912,873 |
| $ | 9,067 |
| 3.97 | % |
| Other assets | 50,707 |
|
|
| 55,124 |
| | | 58,679 |
|
|
|
|
| Total assets | $ | 1,079,512 |
|
|
| $ | 1,044,332 |
| | | $ | 971,552 |
|
|
|
|
|
|
|
|
| | |
|
|
|
| Liabilities |
|
|
| | | |
|
|
|
| NOW accounts | $ | 109,354 |
| $ | 81 |
| 0.30 | % | $ | 104,467 |
| $ | 71 |
| 0.27 | % | $ | 71,739 |
| $ | 24 |
| 0.13 | % |
| Money market accounts | 232,004 |
| 162 |
| 0.28 | % | 234,455 |
| 162 |
| 0.28 | % | 222,089 |
| 177 |
| 0.32 | % |
| Savings accounts | 39,525 |
| 12 |
| 0.12 | % | 37,194 |
| 11 |
| 0.12 | % | 32,961 |
| 14 |
| 0.17 | % |
| Time deposits | 292,811 |
| 702 |
| 0.96 | % | 292,491 |
| 696 |
| 0.95 | % | 301,399 |
| 772 |
| 1.02 | % |
| Total interest bearing deposits | 673,694 |
| 957 |
| 0.57 | % | 668,607 |
| 940 |
| 0.56 | % | 628,188 |
| 987 |
| 0.63 | % |
| Securities sold under agreements to repurchase | 21,650 |
| 9 |
| 0.17 | % | 23,902 |
| 9 |
| 0.15 | % | 29,087 |
| 7 |
| 0.10 | % |
| Secured borrowings | 9,261 |
| 66 |
| 2.85 | % | 10,528 |
| 74 |
| 2.81 | % | 155 |
| 2 |
| 5.16 | % |
| Mortgage payable | — |
| — |
| — | % | — |
| — |
| — | % | 278 |
| 7 |
| 10.07 | % |
| FHLB borrowings | 44,615 |
| 44 |
| 0.39 | % | 12,067 |
| 10 |
| 0.33 | % | 1,385 |
| 1 |
| 0.29 | % |
| Subordinated debentures | 15,300 |
| 297 |
| 7.76 | % | 15,300 |
| 297 |
| 7.76 | % | 28,988 |
| 603 |
| 8.32 | % |
| Total interest bearing liabilities | $ | 764,520 |
| $ | 1,373 |
| 0.72 | % | $ | 730,404 |
| $ | 1,330 |
| 0.73 | % | $ | 688,081 |
| $ | 1,607 |
| 0.93 | % |
| Noninterest bearing deposits | 204,016 |
|
|
|
|
| 205,215 |
|
|
|
|
| 184,246 |
|
|
|
|
|
| Other liabilities | 2,544 |
|
|
| 3,051 |
| | | 3,333 |
|
|
|
|
| Total liabilities | $ | 971,080 |
|
|
|
|
| $ | 938,670 |
| | | $ | 875,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
|
|
|
|
|
|
| Total shareholders' equity | $ | 108,432 |
|
|
|
|
| $ | 105,662 |
| | | $ | 95,892 |
|
|
|
|
|
|
|
|
|
| | | |
|
|
|
|
|
| Total liabilities and shareholders’ equity | $ | 1,079,512 |
|
|
| $ | 1,044,332 |
| | | $ | 971,552 |
|
|
|
|
|
|
|
|
|
|
| | |
|
|
|
|
|
| Net interest income |
| $ | 8,714 |
|
|
| | $ | 8,298 |
| |
| $ | 7,460 |
|
|
|
|
|
|
| | |
|
|
|
|
|
| Interest rate spread |
|
| 3.20 | % | |
| 3.16 | % |
|
| 3.04 | % |
|
|
|
| | |
|
|
|
|
| Net interest margin |
|
|
| 3.39 | % | | | 3.36 | % |
|
|
|
| 3.27 | % |
|
|
| Footnotes: |
(1) Average loans include nonperforming loans. |
(2) No tax-equivalent adjustments were made, as the effect thereof was not material. |
|
| | | | | | | | | | | | | | | | |
| | Six months ended June 30, |
| | June 30, 2016 | June 30, 2015 |
| | Average
Balances | Income/
Expense | Yields/
Rates | Average
Balances | Income/
Expense | Yields/
Rates |
| Assets | (Dollars in thousands)(Unaudited) |
Loans (1) | $ | 797,699 |
| $ | 17,532 |
| 4.40 | % | $ | 710,154 |
| $ | 15,906 |
| 4.48 | % |
Investment securities (2) | 198,729 |
| 2,143 |
| 2.16 | % | 185,775 |
| 1,913 |
| 2.06 | % |
| Federal funds sold | — |
| — |
| — | % | — |
| — |
| — | % |
| Interest-bearing deposits with other banks | 11,383 |
| 40 |
| 0.70 | % | 11,876 |
| 28 |
| 0.47 | % |
| Total earning assets | $ | 1,007,811 |
| $ | 19,715 |
| 3.91 | % | $ | 907,805 |
| $ | 17,847 |
| 3.93 | % |
| Other assets | 52,917 |
| | | 44,992 |
| | |
| Total assets | $ | 1,060,728 |
| | | $ | 952,797 |
| | |
| | | | | | | |
| Liabilities | | | | | | |
| NOW accounts | $ | 106,910 |
| $ | 152 |
| 0.28 | % | $ | 81,816 |
| $ | 74 |
| 0.18 | % |
| Money market accounts | 232,035 |
| 323 |
| 0.28 | % | 215,802 |
| 290 |
| 0.27 | % |
| Savings accounts | 38,360 |
| 23 |
| 0.12 | % | 32,377 |
| 27 |
| 0.17 | % |
| Time deposits | 292,651 |
| 1,399 |
| 0.96 | % | 300,436 |
| 1,573 |
| 1.05 | % |
| Total interest bearing deposits | 669,956 |
| 1,897 |
| 0.57 | % | 630,431 |
| 1,964 |
| 0.62 | % |
| Securities sold under agreements to repurchase | 22,776 |
| 18 |
| 0.16 | % | 28,955 |
| 15 |
| 0.10 | % |
| Secured borrowings | 9,895 |
| 141 |
| 2.85 | % | 78 |
| 2 |
| — |
|
| Mortgage payable | — |
| — |
| — | % | 363 |
| 14 |
| 7.71 | % |
| FHLB borrowings | 28,341 |
| 53 |
| 0.37 | % | 1,022 |
| — |
| — | % |
| Subordinated debentures | 15,300 |
| 594 |
| 7.76 | % | 29,062 |
| 1,206 |
| 8.30 | % |
| Total interest bearing liabilities | $ | 746,268 |
| $ | 2,703 |
| 0.72 | % | $ | 689,911 |
| $ | 3,201 |
| 0.93 | % |
| Noninterest bearing deposits | 204,615 |
| | | 164,389 |
| | |
| Other liabilities | 2,798 |
| | | 3,762 |
| | |
| Total liabilities | $ | 953,681 |
| | | $ | 858,062 |
| | |
| | | | | | | |
| Total shareholders' equity | $ | 107,047 |
| | | $ | 94,735 |
| | |
| | | | | | | |
| Total liabilities and shareholders’ equity | $ | 1,060,728 |
| | | $ | 952,797 |
| | |
| | | | | | | |
| Net interest income | | $ | 17,012 |
| | | $ | 14,646 |
| |
| | | | | | | |
| Interest rate spread | | | 3.19 | % | | | 3.00 | % |
| | | | | | | |
| Net interest margin | | | 3.38 | % | | | 3.23 | % |
|
|
| Footnotes: |
| (1) Average loans include nonperforming loans. |
| (2) No tax-equivalent adjustments were made, as the effect thereof was not material. |
|
| | | | | | | | | | | | | | | |
| COMMON STOCK DATA | | | | |
| | | | | | |
| | 2016 | 2015 |
| | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter |
| | (Unaudited) |
Market value (1): | | | | | |
| End of period | $ | 8.80 |
| $ | 8.70 |
| $ | 7.24 |
| $ | 6.51 |
| $ | 6.45 |
|
| High | 9.10 |
| 8.84 |
| 7.31 |
| 7.00 |
| 6.55 |
|
| Low | 8.18 |
| 7.00 |
| 6.26 |
| 6.25 |
| 5.47 |
|
| Book value (end of period) | 6.47 |
| 6.22 |
| 6.05 |
| 5.88 |
| 5.66 |
|
| Tangible book value (end of period) | 6.47 |
| 6.22 |
| 6.05 |
| 5.88 |
| 5.66 |
|
| Shares outstanding (end of period) | 17,183,780 |
| 17,175,864 |
| 17,026,941 |
| 17,017,441 |
| 16,984,221 |
|
| Average shares outstanding | 17,182,197 |
| 17,125,928 |
| 16,939,010 |
| 16,993,822 |
| 16,970,721 |
|
| Average diluted shares outstanding | 17,550,547 |
| 17.451354 |
| 17,085,752 |
| 17,161,783 |
| 17,088,102 |
|
|
|
(1) The prices shown are as reported on the NASDAQ Capital Market other than for the second quarter of 2015, for which the prices are as reported on the OTC Pink Marketplace. |
|
| | | | | | | | | | | | | | | |
| ASSET QUALITY DATA | | | | | |
| | | | | | |
| | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| (Dollars in thousands)(Unaudited) | | | | | |
| Loans identified as nonperforming | $ | 2,622 |
| $ | 2,146 |
| $ | 1,411 |
| $ | 3,117 |
| $ | 4,185 |
|
| Other nonperforming loans | — |
| — |
| 67 |
| 55 |
| 55 |
|
| Total nonperforming loans | 2,622 |
| 2,146 |
| 1,478 |
| 3,172 |
| 4,240 |
|
| Foreclosed assets | 2,211 |
| 5,231 |
| 5,487 |
| 4,109 |
| 4,248 |
|
| Total nonperforming assets | $ | 4,833 |
| $ | 7,377 |
| $ | 6,965 |
| $ | 7,281 |
| $ | 8,488 |
|
| | | | | | |
| Allowance for loan losses | 12,044 |
| 11,335 |
| 11,741 |
| 11,753 |
| 12,420 |
|
| Nonperforming assets to total assets | 0.43 | % | 0.70 | % | 0.67 | % | 0.71 | % | 0.85 | % |
| Nonperforming loans to total assets | 0.23 | % | 0.20 | % | 0.14 | % | 0.31 | % | 0.43 | % |
| Allowance for loan losses to nonperforming loans | 459.34 | % | 528.19 | % | 794.38 | % | 370.52 | % | 292.92 | % |
|
| | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES ROLLFORWARD | | |
| (Dollars in thousands)(Unaudited) | Three months ended, |
| | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| Beginning balance | $ | 11,335 |
| $ | 11,741 |
| $ | 11,753 |
| $ | 12,420 |
| $ | 13,778 |
|
| Charge-offs | 193 |
| 506 |
| 133 |
| 654 |
| 736 |
|
| Recoveries | 402 |
| 100 |
| 636 |
| 800 |
| 127 |
|
| Net charge-offs | (209 | ) | 406 |
| (503 | ) | (146 | ) | 609 |
|
| Provision for loan losses | 500 |
| — |
| (515 | ) | (813 | ) | (749 | ) |
| Ending balance | $ | 12,044 |
| $ | 11,335 |
| $ | 11,741 |
| $ | 11,753 |
| $ | 12,420 |
|
| | | | | | |
| Net charge-offs | (209 | ) | 406 |
| (503 | ) | (146 | ) | 609 |
|
| Net chargeoff percentage (annualized) | (0.10 | )% | 0.21 | % | (0.26 | )% | (0.08 | )% | 0.34 | % |
|
| | | | | | | | | | |
| OTHER DATA | | | | | |
| (Unaudited) | | | | | |
| | Three months ended, |
| | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| Return on average assets | 0.84 | % | 0.78 | % | 1.11 | % | 1.17 | % | 0.96 | % |
| Return on average equity | 8.36 | % | 7.68 | % | 11.48 | % | 12.01 | % | 9.77 | % |
| Net interest margin | 3.39 | % | 3.36 | % | 3.29 | % | 3.31 | % | 3.23 | % |
| Average loans to assets | 76.55 | % | 73.63 | % | 72.12 | % | 72.37 | % | 73.27 | % |
| Average loans to deposits | 94.16 | % | 88.00 | % | 85.95 | % | 86.63 | % | 87.62 | % |
| Average noninterest bearing deposits to total deposits | 22.75 | % | 23.35 | % | 23.45 | % | 20.79 | % | 22.08 | % |
| | | | | | |
| COMPANY CAPITAL RATIOS | | | | | |
| (Unaudited) | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| Tier 1 leverage ratio | 9.77 | % | 9.72 | % | 9.36 | % | 9.39 | % | 9.24 | % |
| Common equity tier 1 capital ratio | 11.26 | % | 11.94 | % | 11.62 | % | 11.57 | % | 11.20 | % |
| Tier 1 capital ratio | 11.26 | % | 11.94 | % | 11.62 | % | 11.57 | % | 11.20 | % |
| Total capital ratio | 14.14 | % | 14.99 | % | 14.69 | % | 14.71 | % | 14.39 | % |
| Tangible common equity to tangible assets | 9.87 | % | 10.07 | % | 9.90 | % | 9.78 | % | 9.67 | % |
|
| | | | | | | | | | | | | | | |
| NON-GAAP MEASURES | | | | |
| | | | | | |
Pre-tax pre-provision core income (1) | | | | |
| (In thousands)(Unaudited) | | | | | |
| | For the three months ended, |
| | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 |
| Pre-tax net income | $ | 3,323 |
| $ | 2,917 |
| $ | 4,396 |
| $ | 4,418 |
| $ | 3,531 |
|
| Provision for loan losses | 500 |
| — |
| (515 | ) | (813 | ) | (749 | ) |
| Gain on sale of securities | (603 | ) | — |
| (212 | ) | (251 | ) | — |
|
| Merger related expenses included in professional and data processing fees | 436 |
| 100 |
| — |
| — |
| — |
|
| Losses on sale and writedowns of foreclosed assets, net | 31 |
| 16 |
| 109 |
| 58 |
| 20 |
|
| Foreclosed assets expense, net of rental income | 60 |
| 53 |
| 50 |
| (61 | ) | 70 |
|
| Pre-tax pre-provision core income | $ | 3,747 |
| $ | 3,086 |
| $ | 3,828 |
| $ | 3,351 |
| $ | 2,872 |
|
|
|
(1) This is a non-GAAP financial measure. The Company’s management believes the presentation of pre-tax pre-provision core income provides investors with a greater understanding of the Company’s operating results, in addition to the results measured in accordance with GAAP. |
