EXHIBIT 99.1
Avenue Financial Holdings, Inc. Announces Record 2014 Results
Fourth Quarter Net Income Per Share Jumps 114% on Record Loans
NASHVILLE, Tenn., Feb. 26, 2015 (GLOBE NEWSWIRE) -- Avenue Financial Holdings, Inc. (Nasdaq:AVNU) ("Avenue Financial" or "the Company") has announced record results for the fourth quarter and year ended December 31, 2014. Net income for the fourth quarter rose 114.3% to $0.15 per diluted common share compared with $0.07 per diluted common share for the fourth quarter of 2013. Net income per diluted common share was $0.64 for the year ended December 31, 2014, compared to net income per diluted common share of $0.45 for the year ended December 31, 2013, an increase of 42.2%.
"Avenue Financial's record results for 2014 were driven by strong loan growth from our significant business lines in our core Nashville market," stated Ronald L. Samuels, Chairman and Chief Executive Officer. "Loans rose 21.0% to a record $693.9 million and total assets increased 12.3% to $999.3 million in 2014 compared with the prior year. Our loan growth was purely organic and highlights the strength from our key vertical markets in music and entertainment, healthcare, and increased demand from quality commercial real estate developments.
"We also recently completed two important financing transactions that strengthened our balance sheet and capital ratios. At year-end 2014, we issued $20 million in subordinated debt in a private placement and completed a successful initial public stock offering in mid-February 2015, raising an additional $14.7 million in net proceeds for the Company. As stated in previous SEC filings, we plan to use $18.9 million of the proceeds to redeem preferred stock associated with the Small Business Lending Fund and the remainder will build our stockholders' equity. The additional equity will be an important part in funding our continued growth. We are very pleased with the market's response to our growth strategy and our plans to use these proceeds to fund our future growth," continued Samuels.
Balance Sheet Growth
- Total assets increased $25.9 million, or 2.7%, to $999.3 million at December 31, 2014, from $973.4 million at September 30, 2014 and $109.7 million, or 12.3% compared with $889.6 million at December 31, 2013.
- Loans increased $40.7 million, or 6.2%, to a record $693.9 million at December 31, 2014 compared with $653.2 million at September 30, 2014 and up $120.5 million from December 31, 2013, for a year-over-year growth rate of 21.0%. Mortgage loans held-for-sale increased $22.7 million, or 450%, to $27.7 million at December 31, 2014 compared with $5.0 million at December 31, 2013. Portfolio residential mortgage loans totaling $21.8 million were identified as available-for-sale in the fourth quarter 2014.
- Cash surrender value of company owned life insurance totaled $20.0 million at December, 31, 2014, up $3.6 million from September 30, 2014, or 22.1%, compared with $16.4 million at September 30, 2014. Two new single premium whole life insurance policies totaling $3.5 million were purchased during the fourth quarter of 2014.
- Deposits totaled $803.7 million at December 31, 2014, a decrease of 2.1% compared with $820.9 million at September 30, 2014 due to temporary cash flow needs for some of our significant commercial deposit accounts. Deposits grew $97.9 million, or 13.9%, compared with $705.8 million at December 31, 2013.
Revenue Growth and Profitability
- For the fourth quarter of 2014, net income available to common stockholders was $1.2 million or $0.15 per diluted share, compared with $2.4 million or $0.28 per diluted share for the third quarter of 2014. The decrease is attributable primarily to lower gain on sale of loans.
- Net interest income increased $26 thousand, to $7.6 million, for the fourth quarter of 2014, compared with $7.5 million for the third quarter of 2014 and $1.1 million for the fourth quarter of 2013. The fully tax equivalent net interest margin increased 14 basis points to 3.38% for the fourth quarter of 2014 from 3.24% for the fourth quarter of 2013. The increase can be attributed to a $91.0 million, or 11.2% increase, in net earning assets coupled with a 9 basis points increase in the yield on earning assets.
- Non-interest income decreased $846 thousand, or 44.4%, to $1.1 million for the fourth quarter of 2014 compared with $1.9 million for the third quarter of 2014. The decrease was due primarily to lower gains on sale of loans.
- Non-interest expense for the fourth quarter of 2014 increased $176 thousand, or 2.9%, to $6.3 million from $6.1 million for the third quarter of 2014. The increase was driven primarily by the write-off of a non-credit related loss of $200 thousand.
Asset Quality
- Nonaccruing loans were $695.4 thousand, or 0.10% of total loans, at December 31, 2014, compared with $889 thousand or 0.14% of total loans, at September 30, 2014. Our ratio of non-performing assets to total assets increased to 0.41% at December 31, 2014, compared with 0.28% at September 30, 2014 due to the increase in other real estate owned. Total other real estate owned increased to $3.4 million at December 31, 2014 compared with $1.9 million at September 30, 2014 with the foreclosure of land and lot inventory from one borrower.
- Net loan charge-offs for the fourth quarter of 2014 were $345.2 thousand, or 0.20% of average loans for the quarter, compared with $179.6 thousand, or 0.13% of average loans for the fourth quarter of 2013.
- The allowance for loan losses was $8.5 million, or 1.23% of loans, at December 31, 2014, compared with $8.4 million, or 1.29% of loans at September 30, 2014 and $7.2 million, or 1.26% of loans at December 31, 2013.
- The provision for loan losses was $456 thousand for the fourth quarter of 2014, compared with ($222 thousand) for the third quarter of 2014 due to increases in loan volume.
"We are very pleased with our record results for 2014," continued Samuels. "Our earnings benefited from the scalable platform we have built over the last eight years. We believe we have demonstrated the success of our model by growing revenues at a faster rate than expenses in 2014 and we are positioned well to serve our customers in the coming year."
"Loan demand remains strong in Nashville as we enter 2015," stated Samuels. "Our markets continue to benefit from new development, job growth and a vibrant regional economy that is attracting new businesses to our market. As a result, we expect to report increased loans and deposits in the coming year."
About Avenue Financial Holdings, Inc.
Avenue Financial Holdings, Inc., headquartered in Nashville, Tennessee, was formed as a single-bank holding company in 2006 and operates primarily through its subsidiary, Avenue Bank. The Company's operations are concentrated in the Nashville MSA, with the vision of building Nashville's signature bank and serving clients who value creativity, expertise, and an exceptional level of personal service. Avenue Bank embodies Nashville's creative spirit - redefining how clients experience banking through a unique "Concierge Banking" model. The bank provides a wide range of business and personal banking services, including mortgage loans, with a special emphasis on Commercial, Private Client, Healthcare, and Music & Entertainment banking. The Company serves clients through five locations (a corporate headquarters and four retail branches), a limited deposit courier service (mobile branch) for select commercial clients, and mobile and online banking services. The Company's stock is traded on the NASDAQ Global Select Market under the ticker symbol "AVNU."
Forward-Looking Statements
Certain statements in this press release contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would," and "outlook," or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
You should not place undue reliance on any forward-looking statement. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following:
- market and economic conditions (including interest rate environment, levels of public offerings, mergers and acquisitions, or M&A, and venture capital financing activities) and the associated impact on us;
- changes in management personnel;
- deterioration of our asset quality;
- our overall management of interest rate risk, including managing the sensitivity of our interest-earning assets and interest-bearing liabilities to interest rates, and the impact to earnings from a change in interest rates;
- our ability to execute our strategy and to achieve organic loan and deposit growth;
- the adequacy of reserves (including allowance for loan and lease losses) and the appropriateness of our methodology for calculating such reserves;
- volatility and direction of market interest rates;
- the sufficiency of our capital, including sources of capital (such as funds generated through retained earnings) and the extent to which capital may be used or required;
- our overall investment plans, strategies and activities, including our investment of excess cash/liquidity;
- operational, liquidity and credit risks associated with our business;
- increased competition in the financial services industry, nationally, regionally or locally, which may adversely affect pricing and terms;
- the level of client investment fees and associated margins;
- changes in the regulatory environment;
- changes in trade, monetary and fiscal policies and laws;
- governmental legislation and regulation, including changes in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank Act, Basel guidelines, capital requirements and other applicable laws and regulations;
- changes in interpretation of existing law and regulation;
- further government intervention in the U.S. financial system; and
- other factors that are discussed under the heading "Risk Factors." in our filings with the Securities and Exchange Commission.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in our registration statement on Form S-1 filed with the Securities and Exchange Commission on January 9, 2015, as amended. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY |
| Condensed Consolidated Balance Sheets |
| (unaudited) |
| | December 31, 2014 | September 30, 2014 | December 31, 2013 |
| Assets | | | |
| Cash and due from banks | $ 17,765,493 | $ 66,117,738 | $ 12,416,992 |
| Federal funds sold | -- | 3,237,164 | 206 |
| Cash and cash equivalents | 17,765,493 | 69,354,902 | 12,417,198 |
| Interest-bearing deposits in banks | 210,754 | 210,754 | 2,319,754 |
| Securities available-for-sale, at fair value | 220,461,939 | 211,499,674 | 257,797,224 |
| Securities held-to-maturity (fair value of $2,837,721 and $2,780,757 as of December 31, 2014 and December 31, 2013, respectively) | 2,716,908 | 2,719,122 | 2,725,537 |
| Mortgage loans held-for-sale | 27,729,720 | 5,036,218 | 4,986,011 |
| Loans, net of deferred fees | 693,907,951 | 653,235,053 | 573,430,381 |
| Less allowance for loan losses | (8,517,744) | (8,406,887) | (7,204,201) |
| Net loans | 685,390,207 | 644,828,166 | 566,226,180 |
| Accrued interest receivable | 2,389,997 | 2,169,586 | 2,413,364 |
| Federal Home Loan Bank stock, at cost | 2,924,400 | 2,924,400 | 2,674,100 |
| Premises and equipment, net | 3,280,186 | 3,457,229 | 3,925,103 |
| Other real estate owned | 3,375,811 | 1,854,811 | 3,451,356 |
| Deferred tax assets | 7,377,355 | 8,062,241 | 9,749,988 |
| Cash surrender value of company owned life insurance | 20,035,752 | 16,403,593 | 16,041,387 |
| Goodwill | 2,966,063 | 2,966,063 | 2,966,063 |
| Other assets | 2,657,381 | 1,931,399 | 1,884,835 |
| Total assets | $ 999,281,966 | $ 973,418,158 | $ 889,578,100 |
| Liabilities and Stockholders' Equity | | | |
| Liabilities: | | | |
| Deposits: | | | |
| Noninterest-bearing demand deposits | $ 170,647,052 | $ 186,210,126 | $ 142,259,415 |
| Interest-bearing demand deposits | 56,144,680 | 52,672,601 | 51,629,242 |
| Savings and money market accounts | 415,779,182 | 422,429,840 | 388,085,764 |
| Time | 161,092,912 | 159,568,781 | 123,819,701 |
| Total deposits | 803,663,826 | 820,881,348 | 705,794,122 |
| Accrued interest payable | 169,913 | 261,503 | 134,112 |
| Federal funds purchased | 4,485,093 | -- | 15,280,142 |
| Federal Home Loan Bank advances | 70,300,000 | 55,000,000 | 79,250,000 |
| Subordinated debt | 20,000,000 | -- | -- |
| Other liabilities | 9,047,027 | 7,660,087 | 6,702,056 |
| Total liabilities | 907,665,859 | 883,802,938 | 807,160,432 |
| Stockholders' equity: | | | |
| Preferred Stock, no par value; 10,000,000 shares authorized, Series C, senior noncumulative perpetual preferred stock; 18,950 issued and outstanding at December 31, 2014 and December 31, 2013 | 18,950,000 | 18,950,000 | 18,950,000 |
| Common Stock, no par value. Authorized 100,000,000 shares: issued and outstanding 8,636,682 and 8,567,912 shares at December 31, 2014 and December 31, 2013, respectively | 75,407,157 | 75,407,157 | 75,407,157 |
| Additional paid-in-capital | 1,325,445 | 1,182,558 | 783,499 |
| Accumulated deficit | (1,581,649) | (2,826,417) | (7,004,696) |
| Accumulated other comprehensive loss | (2,484,846) | (3,098,078) | (5,718,292) |
| Total stockholders' equity | 91,616,107 | 89,615,220 | 82,417,668 |
| Total liabilities and stockholders' equity | $ 999,281,966 | $ 973,418,158 | $ 889,578,100 |
| | | | |
| This information is preliminary and based on company data available at the time of the presentation. | | | |
| | | | | | |
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY |
| Condensed Consolidated Statements of Income |
| (unaudited) |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | September 30, | December 31, | December 31, | December 31, |
| | 2014 | 2014 | 2013 | 2014 | 2013 |
| Interest and dividend income: | | | | | |
| Loans, including fees | $ 7,354,666 | $ 7,326,129 | $ 5,922,925 | $ 28,180,810 | $ 21,995,645 |
| Investment securities | 1,110,396 | 1,112,142 | 1,424,724 | 4,722,133 | 4,925,042 |
| Federal Funds sold and other | 32,704 | 29,841 | 33,807 | 120,317 | 139,740 |
| Total interest and dividend income | 8,497,766 | 8,468,112 | 7,381,456 | 33,023,260 | 27,060,427 |
| Interest expense: | | | | | |
| Deposits | 782,191 | 782,904 | 789,555 | 3,107,846 | 3,050,824 |
| Other borrowings | 155,815 | 151,837 | 133,645 | 660,818 | 509,056 |
| Total interest expense | 938,006 | 934,741 | 923,200 | 3,768,664 | 3,559,880 |
| Net interest income | 7,559,760 | 7,533,371 | 6,458,256 | 29,254,596 | 23,500,547 |
| Provision for loan losses | 456,059 | (222,024) | 631,351 | 1,642,975 | 1,592,906 |
| Net interest income after provision for loan losses | 7,103,701 | 7,755,395 | 5,826,905 | 27,611,621 | 21,907,641 |
| Noninterest income: | | | | | |
| Customer service fees | 499,279 | 604,095 | 516,672 | 2,313,085 | 1,919,764 |
| Mortgage banking fees, net of commissions | 412,541 | 327,275 | 239,889 | 979,169 | 1,939,265 |
| Increase in cash surrender value of life insurance | 132,159 | 120,908 | 126,230 | 494,365 | 565,130 |
| Net gain on sale of loans | 14,294 | 851,685 | 21,998 | 865,979 | 108,508 |
| Net gain on sale of available-for-sale securities | -- | -- | -- | 11,917 | 522,294 |
| Total noninterest income | 1,058,273 | 1,903,963 | 904,789 | 4,664,515 | 5,054,961 |
| Noninterest expenses: | | | | | |
| Salaries and employee benefits | 3,558,696 | 3,543,388 | 3,088,462 | 13,958,072 | 11,738,817 |
| Equipment and occupancy | 807,598 | 827,692 | 917,451 | 3,391,050 | 3,366,601 |
| Other real estate expense | (2,407) | (35,043) | 2,547 | (21,362) | 89,169 |
| Data processing | 378,727 | 356,692 | 341,773 | 1,418,035 | 1,161,181 |
| Advertising, promotion, and public relations | 195,325 | 148,648 | 196,931 | 640,058 | 651,374 |
| Legal and accounting | 232,954 | 250,131 | 231,636 | 888,172 | 776,690 |
| FDIC insurance and other regulatory assessments | 186,953 | 190,125 | 163,603 | 740,860 | 616,816 |
| Other expenses | 939,346 | 839,987 | 533,725 | 3,111,098 | 2,158,593 |
| Total noninterest expenses | 6,297,192 | 6,121,620 | 5,476,128 | 24,125,983 | 20,559,241 |
| Income before taxes | 1,864,782 | 3,537,738 | 1,255,566 | 8,150,153 | 6,403,361 |
| Income tax expense | 572,639 | 1,122,393 | 648,211 | 2,537,606 | 2,421,022 |
| Net income | 1,292,143 | 2,415,345 | 607,355 | 5,612,547 | 3,982,339 |
| Preferred stock dividends | (47,375) | (47,375) | (47,375) | (189,500) | (189,500) |
| Net income available to common stockholders | $ 1,244,768 | $ 2,367,970 | $ 559,980 | $ 5,423,047 | $ 3,792,839 |
| | | | | | |
| Per share information: | | | | | |
| Basic net income per common share available to common stockholders | $ 0.15 | $ 0.28 | $ 0.07 | $ 0.64 | $ 0.45 |
| Diluted net income per common share available to common stockholders | $ 0.15 | $ 0.28 | $ 0.07 | $ 0.64 | $ 0.45 |
| Weighted average common shares outstanding: | | | | | |
| Basic | 8,487,515 | 8,487,516 | 8,452,474 | 8,487,515 | 8,424,598 |
| Diluted | 8,540,481 | 8,528,926 | 8,452,474 | 8,540,481 | 8,424,598 |
| | | | | | |
| This information is preliminary and based on company data available at the time of the presentation. | | | | | |
| |
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY |
| SELECTED QUARTERLY FINANCIAL DATA |
| (unaudited) |
| | At or for the Three Months |
| | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, |
| | 2014 | 2014 | 2014 | 2014 | 2013 | 2013 |
| | | | | | | |
| SELECTED INCOME STATEMENT DATA | | | | | | |
| Interest income | $ 8,498 | $ 8,468 | $ 8,237 | $ 7,821 | $ 7,381 | $ 6,857 |
| Interest expense | 938 | 935 | 952 | 944 | 923 | 893 |
| Net interest income | 7,560 | 7,533 | 7,285 | 6,877 | 6,458 | 5,964 |
| Provision for loan losses | 456 | (222) | 549 | 860 | 631 | 221 |
| Net interest income after provision for loan losses | 7,104 | 7,755 | 6,736 | 6,017 | 5,827 | 5,743 |
| Non-interest income | 1,059 | 1,904 | 915 | 787 | 905 | 1,286 |
| Non-interest expense | 6,297 | 6,122 | 5,862 | 5,845 | 5,476 | 5,328 |
| Income tax expense | 573 | 1,122 | 555 | 288 | 648 | 639 |
| Net income | 1,293 | 2,415 | 1,234 | 671 | 608 | 1,062 |
| Dividends on preferred shares | (48) | (47) | (48) | (47) | (47) | (47) |
| Net income available to common stockholders | $ 1,245 | $ 2,368 | $ 1,186 | $ 624 | $ 561 | $ 1,015 |
| | | | | | | |
| PER COMMON SHARE DATA: | | | | | | |
| Basic earnings per share | $ 0.15 | $ 0.28 | $ 0.14 | $ 0.07 | $ 0.07 | $ 0.12 |
| Diluted earnings per share | 0.15 | 0.28 | 0.14 | 0.07 | 0.07 | 0.12 |
| Book value per common share | 8.41 | 8.18 | 7.96 | 7.65 | 7.41 | 7.54 |
| Tangible book value per common share (1) | 8.07 | 7.84 | 7.62 | 7.30 | 7.06 | 7.19 |
| Basic weighted average common shares | 8,487,515 | 8,487,516 | 8,487,516 | 8,476,848 | 8,452,474 | 8,452,474 |
| Diluted weighted average common shares | 8,540,481 | 8,528,926 | 8,487,516 | 8,476,848 | 8,452,474 | 8,452,474 |
| Common shares outstanding at period end | 8,636,682 | 8,633,588 | 8,619,588 | 8,619,588 | 8,567,912 | 8,548,610 |
| | | | | | | |
| SELECTED BALANCE SHEET DATA | | | | | | |
| Total assets | $ 999,282 | $ 973,418 | $ 955,100 | $ 941,928 | $ 889,578 | $ 840,654 |
| Residential real estate - Mortgage | 110,929 | 122,128 | 127,462 | 109,909 | 94,238 | 87,045 |
| Residential real estate - Multi-family | 11,310 | 20,960 | 15,605 | 13,282 | 2,964 | 2,987 |
| Commercial and industrial | 235,911 | 181,688 | 188,421 | 181,518 | 170,662 | 149,268 |
| Commercial real estate | 271,001 | 268,907 | 275,526 | 262,696 | 236,030 | 197,888 |
| Construction and land development | 58,843 | 55,174 | 65,874 | 70,081 | 67,483 | 75,471 |
| Consumer | 5,915 | 4,221 | 4,817 | 1,881 | 1,879 | 1,514 |
| Other | (1) | 157 | 130 | 155 | 174 | 449 |
| Total loans, net of deferred fees | 693,908 | 653,235 | 677,835 | 639,522 | 573,430 | 514,622 |
| Allowance for loan losses | (8,518) | (8,407) | (8,625) | (8,070) | (7,204) | (6,752) |
| Securities available for sale | 220,462 | 211,500 | 217,478 | 240,100 | 257,797 | 265,770 |
| Mortgage loans held for sale | 27,730 | 5,036 | 7,457 | 2,636 | 4,986 | 4,986 |
| Goodwill and other intangible assets | 2,966 | 2,966 | 2,966 | 2,966 | 2,966 | 2,966 |
| Demand deposits | 170,647 | 186,209 | 166,181 | 162,023 | 142,259 | 122,375 |
| Interest checking accounts | 56,145 | 52,673 | 51,675 | 44,958 | 51,629 | 28,892 |
| Savings accounts | 11,919 | 10,613 | 8,434 | 8,412 | 7,738 | 6,658 |
| Money market accounts | 240,646 | 263,947 | 268,417 | 275,768 | 295,985 | 293,545 |
| Reciprocal ICS Money Market | 163,214 | 147,870 | 139,017 | 105,777 | 84,363 | 101,436 |
| CDs | 82,012 | 82,075 | 82,116 | 87,230 | 79,528 | 71,965 |
| Reciprocal CDARs | 44,081 | 41,662 | 39,780 | 27,827 | 23,291 | 25,572 |
| Brokered CDs | 35,000 | 35,832 | 29,097 | 26,049 | 21,001 | 20,902 |
| Total Deposits | 803,664 | 820,881 | 784,717 | 738,044 | 705,794 | 671,345 |
| Advances from FHLB/FRB | 70,300 | 55,000 | 75,500 | 79,000 | 79,250 | 79,500 |
| Subordinated debt | 20,000 | -- | -- | -- | -- | -- |
| Preferred stock | 18,950 | 18,950 | 18,950 | 18,950 | 18,950 | 18,950 |
| Tangible common stockholders' equity (1) | 69,700 | 67,699 | 65,661 | 62,951 | 60,502 | 61,487 |
| Total stockholders' equity | 91,616 | 89,615 | 87,577 | 84,867 | 82,418 | 83,403 |
| Average total assets | 976,596 | 952,271 | 932,626 | 906,978 | 865,400 | 817,416 |
| Average common stockholders' equity | 72,438 | 69,908 | 66,972 | 65,717 | 65,417 | 63,321 |
| Full time employees | 134 | 130 | 125 | 120 | 120 | 115 |
| | | | | | | |
| This information is preliminary and based on company data available at the time of the presentation. | | | | | | |
| | | | | | | |
| | | | | | | |
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY |
| SELECTED QUARTERLY FINANCIAL DATA |
| (unaudited) |
| | At or for the Three Months |
| | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, |
| | 2014 | 2014 | 2014 | 2014 | 2013 | 2013 |
| | (Dollars in thousands) |
| SELECTED PERFORMANCE RATIOS | | | | | | |
| Return on average assets (2) (5) | 0.51% | 0.99% | 0.51% | 0.28% | 0.26% | 0.49% |
| Return on average common stockholders' equity (2) (5) | 6.82 | 13.44 | 7.10 | 3.85 | 3.40 | 6.36 |
| Net interest margin (fully tax equivalent) (2) | 3.38 | 3.39 | 3.35 | 3.31 | 3.24 | 3.19 |
| Efficiency ratio (1) (3) | 7,317.8 | 7,131.0 | 7,147.0 | 7,640.5 | 7,459.5 | 7,440.3 |
| | | | | | | |
| SELECTED ASSET QUALITY DATA | | | | | | |
| Nonaccruing loans | $ 695 | $ 889 | $ 897 | $ 584 | $ 591 | $ 598 |
| Past due loans over 90 days and still accruing interest | -- | -- | -- | -- | -- | -- |
| Net loans charge-offs | 345 | (5) | (5) | (6) | 180 | 657 |
| Nonaccruing loans to total loans | 0.10% | 0.14% | 0.13% | 0.09% | 0.10% | 0.12% |
| Nonaccruing loans and loans past due 90 days and still accruing to total loans | 0.10 | 0.14 | 0.13 | 0.09 | 0.10 | 0.12 |
| Non-performing assets to total assets (4) | 0.41 | 0.28 | 0.30 | 0.42 | 0.45 | 0.63 |
| Nonperforming assets to loans and OREO | 0.58 | 0.42 | 0.42 | 0.62 | 0.70 | 1.02 |
| Allowance for loan losses to total loans | 1.23 | 1.29 | 1.27 | 1.26 | 1.26 | 1.31 |
| Allowance for loan losses to nonaccruing loans | 1,224.87 | 945.67 | 961.54 | 1,381.85 | 1,219.43 | 1,129.10 |
| Net loan charge-offs to average loans (2) | 0.20 | (0.00) | (0.00) | (0.00) | 0.13 | 0.53 |
| | | | | | | |
| CAPITAL RATIOS (Consolidated) | | | | | | |
| Tier 1 Leverage ratio | 9.21% | 9.16% | 8.78% | 8.81% | 9.12% | 9.59% |
| Tier 1 Risk-based capital ratio | 10.76 | 11.38 | 10.65 | 10.77 | 11.46 | 12.24 |
| Total Risk-based capital ratio | 14.18 | 12.49 | 11.77 | 11.86 | 12.52 | 13.30 |
| Tangible common stockholders' equity to tangible assets (1) | 699.58 | 697.60 | 689.62 | 670.43 | 682.40 | 734.01 |
| | | | | | | |
| GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures | | | | | | |
| The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are "tangible book value per common share," "tangible common stockholders' equity," "efficiency ratio," and "tangible common stockholders' equity to tangible assets." Although we believe these non-GAAP financial measures provide a greater understanding of our business, these measures are not necessarily comparable to similar measures that may be presented by other companies. | | | | | | |
| "Efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income excluding gains and losses on sales of securities. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain non-recurring items and other discrete items that are unrelated to our core business. | | | | | | |
| "Tangible common stockholders' equity" is defined as common stockholders' equity reduced by goodwill. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in common stockholders' equity exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both common stockholders' equity and assets while not increasing our tangible common stockholders' equity or tangible assets. | | | | | | |
| "Tangible common stockholders' equity to tangible assets" is defined as the ratio of common stockholders' equity reduced by goodwill divided by total assets reduced by goodwill. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in common stockholders' equity and total assets, each exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both common stockholders' equity and assets while not increasing our tangible common equity or tangible assets. | | | | | | |
| "Tangible book value per common share" is defined as tangible common stockholders' equity divided by total common shares outstanding. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing book value while not increasing our tangible book value. | | | | | | |
| The information provided below reconciles each non-GAAP measure to its most comparable GAAP measure. | | | | | | |
| | | | | | | |
| NON-GAAP FINANCIAL MEASURES | | | | | | |
| Efficiency Ratio | | | | | | |
| Non-interest expense (numerator) | $ 6,297 | $ 6,122 | $ 5,862 | $ 5,845 | $ 5,476 | $ 5,328 |
| Net interest income | 7,560 | 7,533 | 7,285 | 6,877 | 6,458 | 5,964 |
| Non-interest income | 1,059 | 1,904 | 915 | 787 | 905 | 1,286 |
| Less: gains on sale of loans | (14) | (852) | -- | -- | (22) | (87) |
| Less: gains (losses) on sales of securities | -- | -- | 2 | (14) | -- | (2) |
| Adjusted operating revenue (denominator) | 8,605 | 8,585 | 8,202 | 7,650 | 7,341 | 7,161 |
| Efficiency Ratio | 73.18% | 71.31% | 71.47% | 76.41% | 74.59% | 74.40% |
| | | | | | | |
| Tangible Common Stockholders' Equity and Tangible Common Stockholders' Equity/Tangible Assets | | | | | | |
| Common equity | $ 72,666 | $ 70,665 | $ 68,627 | $ 65,917 | $ 63,468 | $ 64,453 |
| Less: intangible assets | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) |
| Tangible common stockholders' equity | 69,700 | 67,699 | 65,661 | 62,951 | 60,502 | 61,487 |
| Total assets | 999,282 | 973,418 | 955,100 | 941,928 | 889,578 | 840,654 |
| Less: Intangible assets | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) |
| Tangible assets | 996,316 | 970,452 | 952,134 | 938,962 | 886,612 | 837,688 |
| Tangible Common Stockholders' Equity/Tangible Assets | 7.00% | 6.98% | 6.90% | 6.70% | 6.82% | 7.34% |
| | | | | | | |
| Tangible Book Value per Common Share | | | | | | |
| Book Value Per Common Share | $ 8.41 | $ 8.18 | $ 7.96 | $ 7.65 | $ 7.41 | $ 7.54 |
| Less: Effects of intangible assets | (0.34) | (0.34) | (0.34) | (0.34) | (0.35) | (0.35) |
| Tangible Book Value per Common Share | 8.07 | 7.84 | 7.62 | 7.30 | 7.06 | 7.19 |
| | | | | | | |
| (1) These measures are not measures recognized under generally accepted accounting principles (United States) ("GAAP"), and are therefore considered to be non-GAAP financial measures. |
| (2) Data has been annualized. |
| (3) Efficiency ratio is total non-interest expense divided by the sum of net interest income and total non-interest income, (excluding securities and loan sale gains/(losses)) and is not a GAAP measure. |
| (4) Non-performing assets are deemed to be nonaccruing loans and OREO. |
| (5) Return on average assets is defined as net income available to common stockholders divided by average total assets; Return on average common stockholders equity is defined by net income available to common stockholders divided by average common stockholders' equity |
| |
| This information is preliminary and based on company data available at the time of the presentation. |
| |
| Average Balance Sheets and Net Interest Analysis |
| On a Fully Taxable-Equivalent Basis |
| Three Months Ended December 31, |
| (In thousands, except Average Yields and Rates) |
| | 2014 | 2013 |
| | Average | Interest | Average | Average | Interest | Average |
| | Balance | Earned / | Yield / | Balance | Earned / | Yield / |
| | �� | Paid | Rate | | Paid | Rate |
| Assets: | | | | | | |
| Interest earning assets: | | | | | | |
| Interest-bearing deposits in banks | $ 211 | 0 | 0.74% | $ 2,320 | $ 8 | 1.32% |
| Investments (1) (3) | 219,501 | 1,245 | 2.25 | 273,165 | 1,606 | 2.33 |
| Federal funds sold | 4,432 | 3 | 0.25 | 907 | 1 | 0.43 |
| Total loans (2) | 676,099 | 7,356 | 4.32 | 532,829 | 5,923 | 4.41 |
| Total interest earning assets | 900,243 | 8,604 | 3.79 | 809,221 | 7,538 | 3.70 |
| | | | | | | |
| Allowance for loan losses | (8,517) | | | (6,886) | | |
| Non-interest earning assets | 84,870 | | | 63,065 | | |
| Total assets | $ 976,596 | | | $ 865,400 | | |
| | | | | | | |
| Interest bearing liabilities: | | | | | | |
| Interest bearing deposits: | | | | | | |
| Checking | 52,933 | 46 | 0.35% | 43,400 | 51 | 0.47% |
| Savings | 11,697 | 3 | 0.11 | 7,578 | 3 | 0.15 |
| Money market | 408,469 | 417 | 0.40 | 410,091 | 529 | 0.51 |
| Time deposits | 158,951 | 316 | 0.79 | 118,924 | 206 | 0.69 |
| Federal funds purchased | 476 | 1 | 0.98 | 2,264 | 4 | 0.68 |
| Other borrowings | 58,036 | 155 | 1.06 | 62,193 | 130 | 0.83 |
| Total interest bearing liabilities | 690,562 | 938 | 0.54 | 644,450 | 923 | 0.57 |
| | | | | | | |
| Non-interest bearing checking | 186,261 | | | 129,734 | | |
| Other liabilities | 8,385 | | | 6,849 | | |
| Stockholders' equity | 91,388 | | | 84,367 | | |
| Total liabilities and stockholders' equity | $ 976,596 | | | $ 865,400 | | |
| | | | | | | |
| Net interest spread | | | 3.25% | | | 3.13% |
| Net interest margin | | | 3.38 | | | 3.24 |
| |
| (1) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%. |
| (2) Non-accrual loans are included in average loan balances in all periods. Loan fees of $193,000 and $114,000 are included in interest income in 2014 and 2013, respectively |
| (3) Unrealized gains/(losses) of ($1,408,000) and ($3,810,000) are excluded from the yield calculation in 2014 and 2013, respectively. |
| |
| This information is preliminary and based on company data available at the time of the presentation. |
| |
| Average Balance Sheets and Net Interest Analysis |
| On a Fully Taxable-Equivalent Basis |
| Twelve Months Ended December 31, |
| (In thousands, except Average Yields and Rates) |
| | 2014 | 2013 |
| | Average | Interest | Average | Average | Interest | Average |
| | Balance | Earned / | Yield / | Balance | Earned / | Yield / |
| | | Paid | Rate | | Paid | Rate |
| Assets: | | | | | | |
| Interest earning assets: | | | | | | |
| Interest-bearing deposits in banks | $ 429 | 5 | 1.10% | $ 2,586 | $ 37 | 1.43% |
| Investments (1) (3) | 233,308 | 5,301 | 2.27 | 241,615 | 5,554 | 2.30 |
| Federal funds sold | 1,530 | 4 | 0.25 | 635 | 2 | 0.31 |
| Total loans (2) | 650,123 | 28,181 | 4.33 | 497,216 | 21,996 | 4.42 |
| Total interest earning assets | 885,390 | 33,491 | 3.78 | 742,052 | 27,589 | 3.72 |
| | | | | | | |
| Allowance for loan losses | (8,248) | | | (6,986) | | |
| Non-interest earning assets | 65,514 | | | 63,846 | | |
| Total assets | $ 942,656 | | | $ 798,912 | | |
| | | | | | | |
| Interest bearing liabilities: | | | | | | |
| Interest bearing deposits: | | | | | | |
| Checking | 50,231 | 201 | 0.40% | 31,751 | 143 | 0.45% |
| Savings | 9,353 | 12 | 0.13 | 6,356 | 9 | 0.14 |
| Money market | 396,949 | 1,765 | 0.44 | 368,152 | 1,917 | 0.52 |
| Time deposits | 147,535 | 1,130 | 0.77 | 126,428 | 982 | 0.78 |
| Federal funds purchased | 6,243 | 42 | 0.68 | 1,469 | 12 | 0.82 |
| Other borrowings | 68,947 | 618 | 0.90 | 56,896 | 497 | 0.87 |
| Total interest bearing liabilities | 679,258 | 3,768 | 0.55 | 591,052 | 3,560 | 0.60 |
| | | | | | | |
| Non-interest bearing checking | 167,959 | | | 116,509 | | |
| Other liabilities | 7,358 | | | 6,850 | | |
| Stockholders' equity | 88,081 | | | 84,501 | | |
| Total liabilities and stockholders' equity | $ 942,656 | | | $ 798,912 | | |
| | | | | | | |
| Net interest spread | | | 3.23% | | | 3.12% |
| Net interest margin | | | 3.36 | | | 3.24 |
| |
| (1) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%. |
| (2) Non-accrual loans are included in average loan balances in all periods. Loan fees of $637,000 and $395,000 are included in interest income in 2014 and 2013, respectively |
| (3) Unrealized gains/(losses) of ($2,979,000) and ($1,095,000) are excluded from the yield calculation in 2014 and 2013, respectively. |
| |
| This information is preliminary and based on company data available at the time of the presentation. |
CONTACT: Barbara J. Zipperian
Chief Financial Officer
(615) 736-7786