Exhibit 99.1
| | |
| HERITAGE BANKSHARES, INC. | | 150 Granby Street Norfolk, Virginia 23510 |
FOR IMMEDIATE RELEASE
Press Release
Contact: Michael S. Ives
Phone: 757-648-1601
Heritage Bankshares, Inc. Announces Record Second Quarter and First Six Months Net Income; Declares Dividends
Norfolk, Va.: July 27, 2011– Heritage Bankshares, Inc. (“Heritage”; the “Company”) (OTCBB: HBKS), the parent of Heritage Bank (the “Bank”), today announced unaudited financial results for the second quarter and the first six months of 2011.
The Company’s net income for the second quarter of 2011 was $591,000, compared to net income of $451,000 for the second quarter of 2010, an increase of $140,000, or 31.0%. Net income for the first six months of 2011 was $1,151,000, an increase of $338,000, or 41.6%, over the net income of $813,000 in the first six months of 2010. These results represent another record, both for the second quarter and first six-month period of a fiscal year.
After the impact of dividends on our outstanding TARP preferred stock, earnings per share for the second quarter 2011 were $0.21 as compared to $0.13 for the second quarter 2010, an increase of $0.08, or 61.5%. After the impact of dividends on our outstanding TARP preferred stock and accelerated accretion of a portion of the discount on our outstanding TARP preferred stock resulting from the partial redemption of our TARP preferred stock in March 2011, earnings per share for the six month period ended June 30, 2011 were $0.36, compared to $0.23 for the same period ended June 30, 2010, an increase of 56.5%.
Michael S. Ives, President and CEO of the Company and the Bank, commented:
“Our financial results continue to reflect the ongoing success of our business strategy to focus on business banking. For the twelve months ending June 30, 2011, the Company had record net income of $2,424,000. At the same time, we have held our noninterest expense stable comparing the first six months of 2011 with the first six months of 2010.
“We have often stated that as we grow our loans and deposits, our net income would increase much more rapidly than our expenses, and we have been true to our word.
“Our overall asset quality remains quite strong, even as we have placed on nonaccrual status one lending relationship secured by a multi-purpose, owner-occupied office building. We plan to resolve this matter with our usual prompt and thoughtful approach to credit issues as they arise in this difficult economic environment.”
Comparison of Operating Results for the Three Months Ended June, 2011 and 2010
Overview. The Company’s pretax income was $879,000 for the second quarter of 2011, compared to pretax income of $701,000 for the second quarter of 2010, an increase of $178,000. This increase resulted from a $363,000 increase in net interest income and a $148,000 decrease in provision for loan losses, partially offset by a decrease in noninterest income of $190,000 and a $143,000 increase in noninterest expense.
Net Interest Income. The Company’s net interest income before provision for loan losses increased by $363,000 to $2.7 million in the second quarter of 2011, compared to $2.4 million in the second quarter of 2010. This increase was primarily attributable to a $35.7 million increase in the average balance of our loan portfolio from $180.0 million in the second quarter of 2010 to $215.7 million in the second quarter of 2011. Our interest rate spread increased 58 basis points from 3.38% in the second quarter of 2010 to 3.96% in the second quarter of 2011, and our net interest margin increased 51 basis points from 3.78% in the second quarter of 2010 to 4.29% in the second quarter of 2011.
Provision for Loan Losses. A provision for loan losses of $11,000 was recorded for the second quarter of 2011, compared to a provision of $159,000 for the second quarter 2010, a decrease of $148,000.
Noninterest Income. Total noninterest income decreased by $190,000, from $435,000 in the second quarter of 2010 to $245,000 in the second quarter of 2011, primarily attributable to a $145,000 reduction in gain on sale of investment securities, from $232,000 in the second quarter of 2010 to $87,000 in the second quarter of 2011.
Noninterest Expense. Total noninterest expense increased by $143,000 from $1.96 million in the second quarter of 2010 to $2.10 million in the second quarter of 2011. Additional expenses in compensation, hiring/recruiting fees and professional fees of $58,000, $40,000, and $30,000, respectively, were the primary contributors to this increase. A decrease in our FDIC assessment of $48,000 in the second quarter of 2011 compared to the second quarter of 2010 reflected changes in the insurance rate calculations adopted by the FDIC, but was offset by increases in other expenses.
Income Taxes. The Company’s income tax expense for the second quarter of 2011 was $288,000, reflecting an effective tax rate of 32.8%, compared to income tax expense of $250,000 for the second quarter of 2010, reflecting an effective tax rate of 35.6%. This reduction in effective tax rate is primarily attributable to an increase in tax-exempt interest income from certain loans.
Net Income Available to Common Stockholders. After the impact of dividends and accretion of the discount on our outstanding TARP preferred stock, net income available to common stockholders was $480,000 for the second quarter of 2011, compared to $305,000 for the second quarter of 2010, an increase of $175,000.
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Comparison of Operating Results for the Six Months Ended June, 2011 and 2010
Overview. The Company’s pretax income was $1,712,000 for the first six months of 2011, compared to pretax income of $1,265,000 for the first six months of 2010, an increase of $447,000. This increase resulted from a $728,000 increase in net interest income and a $148,000 decrease in provision for loan losses, partially offset by a decrease in noninterest income of $459,000. Noninterest expense remained relatively stable between the two six month periods.
Net Interest Income. The Company’s net interest income before provision for loan losses increased by $728,000 to $5.47 million in the first six months of 2011, compared to $4.74 million in the first six months of 2010. Interest income in the first half of 2011 grew significantly, primarily due to a $36.0 million increase in our average loan portfolio compared to the first half of 2010. Our interest rate spread increased 55 basis points from 3.42% in the first half of 2010 to 3.97% in the first half of 2011, and our net interest margin increased 49 basis points from 3.82% in the first half of 2010 to 4.31% in the first half of 2011.
Provision for Loan Losses. A provision for loan losses of $11,000 was recorded for the first six months of 2011, compared to a provision of $159,000 for the first six months 2010.
Noninterest Income. Total noninterest income decreased by $459,000, from $889,000 in the first half of 2010 to $430,000 in the first half of 2011. The primary factor in this decrease was a $486,000 gain on the sale of investment securities in the first half of 2010, compared to a gain of only $87,000 in the first half of 2011.
Noninterest Expense. Total noninterest expense remained stable, reflecting a small decrease of $30,000 from $4.20 million in the first half of 2010 to $4.17 million in the first half of 2011. Decreases in compensation expense and our FDIC assessment of $88,000 and $46,000, respectively, were mostly offset by increases in professional fees and other expenses of $44,000 and $41,000, respectively.
Income Taxes. The Company’s income tax expense for the first half of 2011 was $561,000, reflecting an effective tax rate of 32.8%, compared to income tax expense of $452,000 for the first half of 2010, reflecting an effective tax rate of 35.8%. This reduction in effective tax rate was primarily attributable to an increase in tax-exempt interest income from certain loans.
Net Income Available to Common Stockholders. After the impact of dividends and accelerated accretion of the discount on our outstanding TARP preferred stock, net income available to common stockholders was $841,000 for the first half of 2011, compared to $520,000 for the first half of 2010. The Company repaid $2.6 million, or 25%, of its outstanding TARP preferred stock in March 2011, with a resulting decrease in net income available to common shareholders of $57,000 from the accelerated accretion of a portion of the discount on our outstanding TARP preferred stock.
Financial Condition of the Company
Total Assets. The Company’s total assets decreased by $22.5 million, or 7.5%, from $298.8 million at June 30, 2010 to $276.3 million at June 30, 2011. The decrease in assets resulted primarily from a $39.9 million, or 49.9%, decrease in securities and cash in other banks, partially offset by $18.7 million, or 9.5%, increase in loans held for investment, net.
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Investments.Investment securities available for sale were $23.4 million at June 30, 2011 compared to $67.8 million at June 30, 2010, a decrease of $44.4 million, or 65.4%. Certificates of deposit, interest-bearing deposits in other banks, and federal funds sold increased by a total of $4.5 million from $12.1 million at June 30, 2010 to $16.6 million at June 30, 2011. The proceeds from net decreases in the total of investment securities, bank deposits, and federal funds sold were primarily used to fund new loans and repay outstanding borrowings.
Loans. Loans held for investment, net, were $214.7 million at June 30, 2011, an increase of $18.7 million, or 9.5%, from the loan balance of $196.0 million at June 30, 2010.
Asset Quality. Nonperforming assets were $1,732,000, or 0.63% of assets, at June 30, 2011, compared to no nonperforming assets at June 30, 2010. In addition to a bank branch site that we no longer plan to utilize, a total of $1.5 million in loans to one borrower were placed in nonaccrual status during the second quarter. These nonaccrual loans are secured by a multi-purpose, owner-occupied office building located in Hampton Roads, and the Bank has obtained an appraisal of the building that reflects current market conditions to assist the Bank in its determination of the appropriate carrying value for the loans.
Deposits. Total deposits at June 30, 2011 were $235.9 million compared to $234.4 million at June 30, 2010, an increase of $1.6 million, or 0.7%. Core deposits, which are comprised of noninterest-bearing, money market, NOW and savings deposits, increased by $3.2 million, or 1.7%, from $184.2 million at June 30, 2010 to $187.4 million at June 30, 2011.
Average total deposits increased by $11.4 million, or 5.2%, from $220.4 million for the six month period ended June 30, 2010 to $231.8 million for the six month period ended June 30, 2011. Average core deposits increased by $12.2 million over the comparable six-month periods. In addition, the mix of average noninterest-bearing deposits to average total deposits increased from 34.4% in the first six months of 2010 to 36.3% in the first six months of 2011, a factor that contributes to the improvement in our net interest margin.
Borrowed Funds. Borrowed funds decreased by $22.6 million, from $25.5 million at June 30, 2010 to $2.9 million at June 30, 2011. This reduction related primarily to a decrease of $23.5 million in Federal Home Loan Bank advances.
Capital. Stockholders’ equity decreased by $1.7 million, or 4.5%, from $37.1 million at June 30, 2010 to $35.4 million at June 30, 2011. In March 2011, consistent with our strategic plan and with the approval of the U.S. Treasury, the Company redeemed 2,606 shares of Series A Preferred Stock, resulting in a decrease of $2.6 million in the outstanding balance of our TARP preferred stock. This decrease in stockholders’ equity was partially offset by an increase in retained earnings of $1.3 million between June 30, 2010 and June 30, 2011.
Certain reclassifications have been made to prior period financial statements to conform them to the current period presentation.
The tables attached to and incorporated within this release present in greater detail certain of the unaudited financial information described above.
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Dividend
On July 27, 2011, our Board of Directors declared a $0.06 per share dividend on our common stock. The dividend will be paid on August 19, 2011 to shareholders of record on August 8, 2011.
The same day, the Board of Directors also declared quarterly dividends on the preferred stock issued by the Company in connection with our participation in the TARP Capital Purchase Program. Specifically, the Board declared (a) a cash dividend in the aggregate amount of $93,712.50 on the outstanding shares of our Fixed Rate Cumulative Perpetual Preferred Stock, Series A, and (b) a cash dividend in the aggregate amount of $6,817.50 on the outstanding shares of our Fixed Rate Cumulative Perpetual Preferred Stock, Series B (collectively, the “Preferred Dividends”). The Preferred Dividends will be paid on August 15, 2011 to the U.S. Department of the Treasury, the sole holder of record of such preferred stock, unless the Company closes its investment transaction with the Treasury under the Small Business Lending Fund program prior to August 15, in which case the Preferred Dividends will be paid on the closing date and will be in amounts less than indicated above to reflect the dividends actually accrued to the closing date.
About Heritage
Heritage is the parent company of Heritage Bank (www.heritagebankva.com). Heritage Bank has four full-service branches in the city of Norfolk and two full-service branches in the city of Virginia Beach. Heritage Bank provides a full range of banking services including business, personal and mortgage loans.
Forward Looking Statements
The press release contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook, or estimate. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage’s actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, significant increases in capital requirements or other significant changes in regulatory requirements, customer demand for Heritage’s banking products and services, and the risks and uncertainties described in Heritage’s most recent Form 10-K filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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HERITAGE BANKSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| | | | | | | | |
| | | At June 30, | |
| | | 2011 | | | 2010 | |
| | | (unaudited) | | | (unaudited) | |
ASSETS | | | | | | | | |
| | |
Cash and due from banks | | $ | 5,296 | | | $ | 6,258 | |
Interest-bearing deposits in other banks | | | 15,231 | | | | 9,188 | |
Federal funds sold | | | 28 | | | | 413 | |
| | | | | | | | |
Total cash and cash equivalents | | | 20,555 | | | | 15,859 | |
Certificates of deposit in other banks | | | 1,285 | | | | 2,482 | |
Securities available for sale, at fair value | | | 23,443 | | | | 67,810 | |
Loans, net | | | | | | | | |
Held for investment, net of allowance for loan losses | | | 214,733 | | | | 196,023 | |
Held for sale | | | — | | | | — | |
Accrued interest receivable | | | 634 | | | | 780 | |
Stock in Federal Reserve Bank, at cost | | | 592 | | | | 587 | |
Stock in Federal Home Loan Bank of Atlanta, at cost | | | 1,335 | | | | 1,535 | |
Premises and equipment, net | | | 10,972 | | | | 11,679 | |
Other real estate owned | | | 263 | | | | — | |
Other assets | | | 2,511 | | | | 2,076 | |
| | | | | | | | |
Total assets | | $ | 276,323 | | | $ | 298,831 | |
| | | | | | | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | |
Liabilities | | | | | | | | |
Deposits | | | | | | | | |
Noninterest-bearing | | $ | 87,012 | | | $ | 86,919 | |
Interest-bearing | | | 148,916 | | | | 147,449 | |
| | | | | | | | |
Total deposits | | | 235,928 | | | | 234,368 | |
| | | | | | | | |
Federal Home Loan Bank Advances | | | — | | | | 23,500 | |
Securities sold under agreements to repurchase | | | 2,011 | | | | 2,033 | |
Other borrowings | | | 935 | | | | — | |
Accrued interest payable | | | 91 | | | | 126 | |
Other liabilities | | | 1,916 | | | | 1,673 | |
| | | | | | | | |
Total liabilities | | | 240,881 | | | | 261,700 | |
| | | | | | | | |
| | |
Stockholders’ equity | | | | | | | | |
Preferred stock, no par value - 1,000,000 shares authorized: | | | | | | | | |
Fixed rate cumulative perpetual preferred stock, Series A, 7,497 and 10,103 shares issued and outstanding at June 30, 2011 and June 30, 2010, respectively | | | 7,497 | | | | 10,103 | |
| | |
Fixed rate cumulative perpetual preferred stock, Series B, 303 shares issued and outstanding at June 30, 2011 and June 30, 2010, respectively | | | 303 | | | | 303 | |
| | |
Common stock, $5 par value - 6,000,000 shares authorized; 2,303,108 and 2,305,402 shares issued and outstanding at June 30, 2011 and June 30, 2010, respectively | | | 11,516 | | | | 11,527 | |
Additional paid-in capital | | | 6,657 | | | | 6,581 | |
Retained earnings | | | 9,348 | | | | 8,098 | |
Discount on preferred stock | | | (153 | ) | | | (262 | ) |
Accumulated other comprehensive income, net | | | 274 | | | | 781 | |
| | | | | | | | |
Total stockholders’ equity | | | 35,442 | | | | 37,131 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 276,323 | | | $ | 298,831 | |
| | | | | | | | |
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HERITAGE BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30 | | | Six Months Ended
June 30 | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | |
Interest income | | | | | | | | | | | | | | | | |
Loans and fees on loans | | $ | 2,856 | | | $ | 2,331 | | | $ | 5,710 | | | $ | 4,630 | |
Taxable investment securities | | | 173 | | | | 393 | | | | 321 | | | | 794 | |
Dividends on FRB and FHLB stock | | | 12 | | | | 10 | | | | 25 | | | | 19 | |
Interest on federal funds sold | | | — | | | | — | | | | — | | | | — | |
Other interest income | | | 23 | | | | 31 | | | | 50 | | | | 66 | |
| | | | | | | | | | | | | | | | |
Total interest income | | | 3,064 | | | | 2,765 | | | | 6,106 | | | | 5,509 | |
| | | | |
Interest expense | | | | | | | | | | | | | | | | |
Deposits | | | 308 | | | | 350 | | | | 614 | | | | 704 | |
Borrowings | | | 11 | | | | 33 | | | | 26 | | | | 67 | |
| | | | | | | | | | | | | | | | |
Total interest expense | | | 319 | | | | 383 | | | | 640 | | | | 771 | |
| | | | |
Net interest income | | | 2,745 | | | | 2,382 | | | | 5,466 | | | | 4,738 | |
| | | | |
Provision for loan losses | | | 11 | | | | 159 | | | | 11 | | | | 159 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net interest income after provision for loan losses | | | 2,734 | | | | 2,223 | | | | 5,455 | | | | 4,579 | |
| | | | | | | | | | | | | | | | |
| | | | |
Noninterest income | | | | | | | | | | | | | | | | |
Service charges on deposit accounts | | | 81 | | | | 115 | | | | 173 | | | | 231 | |
Late charges and other fees on loans | | | 15 | | | | 16 | | | | 32 | | | | 32 | |
Gain on sale of investment securities | | | 87 | | | | 232 | | | | 87 | | | | 486 | |
Other | | | 62 | | | | 72 | | | | 138 | | | | 140 | |
| | | | | | | | | | | | | | | | |
Total noninterest income | | | 245 | | | | 435 | | | | 430 | | | | 889 | |
| | | | |
Noninterest expense | | | | | | | | | | | | | | | | |
Compensation | | | 1,110 | | | | 1,052 | | | | 2,193 | | | | 2,281 | |
Data processing | | | 143 | | | | 139 | | | | 288 | | | | 277 | |
Occupancy | | | 197 | | | | 183 | | | | 389 | | | | 377 | |
Furniture and equipment | | | 151 | | | | 151 | | | | 296 | | | | 301 | |
Taxes and licenses | | | 81 | | | | 85 | | | | 166 | | | | 171 | |
Professional fees | | | 98 | | | | 68 | | | | 217 | | | | 173 | |
FDIC assessment | | | 21 | | | | 69 | | | | 100 | | | | 146 | |
Marketing | | | 40 | | | | 34 | | | | 79 | | | | 65 | |
Hiring & Recruiting | | | 40 | | | | — | | | | 42 | | | | 34 | |
Telephone | | | 28 | | | | 24 | | | | 60 | | | | 47 | |
Loss on sale or impairment of other real estate own | | | 1 | | | | (3 | ) | | | 1 | | | | 30 | |
Other | | | 190 | | | | 155 | | | | 342 | | | | 301 | |
| | | | | | | | | | | | | | | | |
Total noninterest expense | | | 2,100 | | | | 1,957 | | | | 4,173 | | | | 4,203 | |
| | | | |
Income before provision for income taxes | | | 879 | | | | 701 | | | | 1,712 | | | | 1,265 | |
| | | | |
Provision for income taxes | | | 288 | | | | 250 | | | | 561 | | | | 452 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net income | | $ | 591 | | | $ | 451 | | | $ | 1,151 | | | $ | 813 | |
Preferred stock dividend and accretion of discount | | $ | (111 | ) | | $ | (146 | ) | | $ | (310 | ) | | $ | (293 | ) |
| | | | | | | | | | | | | | | | |
Net income available to common stockholders | | $ | 480 | | | $ | 305 | | | $ | 841 | | | $ | 520 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings per common share | | | | | | | | | | | | | | | | |
Basic | | $ | 0.21 | | | $ | 0.13 | | | $ | 0.36 | | | $ | 0.23 | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | 0.21 | | | $ | 0.13 | | | $ | 0.36 | | | $ | 0.23 | |
| | | | | | | | | | | | | | | | |
Dividends per share | | $ | 0.06 | | | $ | 0.06 | | | $ | 0.12 | | | $ | 0.12 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average shares outstanding - basic | | | 2,306,348 | | | | 2,301,386 | | | | 2,306,925 | | | | 2,296,593 | |
Effect of dilutive stock options | | | 9,706 | | | | 4,823 | | | | 10,147 | | | | 6,005 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding - diluted | | | 2,316,054 | | | | 2,306,209 | | | | 2,317,072 | | | | 2,302,598 | |
| | | | | | | | | | | | | | | | |
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HERITAGE BANKSHARES, INC.
OTHER SELECTED FINANCIAL INFORMATION
(Unaudited)
(in thousands, except share, per share data, and ratios)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
Financial ratios | | | | | | | | | | | | | | | | |
Annualized return on average assets(1) | | | 0.86 | % | | | 0.67 | % | | | 0.84 | % | | | 0.61 | % |
Annualized return on average common equity(2) | | | 8.49 | % | | | 6.76 | % | | | 8.35 | % | | | 6.11 | % |
Average equity to average assets | | | 12.83 | % | | | 13.61 | % | | | 13.20 | % | | | 13.75 | % |
Equity to assets, at period-end | | | 12.83 | % | | | 12.43 | % | | | 12.83 | % | | | 12.43 | % |
Net interest margin(3) | | | 4.29 | % | | | 3.78 | % | | | 4.31 | % | | | 3.82 | % |
| | | | |
Per common share | | | | | | | | | | | | | | | | |
Earnings per share - basic | | $ | 0.21 | | | $ | 0.13 | | | $ | 0.36 | | | $ | 0.23 | |
Earnings per share - diluted | | $ | 0.21 | | | $ | 0.13 | | | $ | 0.36 | | | $ | 0.23 | |
Book value per share | | $ | 12.07 | | | $ | 11.71 | | | $ | 12.07 | | | $ | 11.71 | |
Dividends declared per share | | $ | 0.06 | | | $ | 0.06 | | | $ | 0.12 | | | $ | 0.12 | |
| | | | |
Common stock outstanding | | | 2,303,108 | | | | 2,305,402 | | | | 2,303,108 | | | | 2,305,402 | |
Weighted average shares outstanding - basic | | | 2,306,348 | | | | 2,301,386 | | | | 2,306,925 | | | | 2,296,593 | |
Weighted average shares outstanding - diluted | | | 2,316,054 | | | | 2,306,209 | | | | 2,317,072 | | | | 2,302,598 | |
| | | | |
Asset quality | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 1,469 | | | $ | — | | | $ | 1,469 | | | $ | — | |
Accruing loans past due 90 days or more | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total nonperforming loans | | | 1,469 | | | | — | | | | 1,469 | | | | — | |
| | | | |
Other real estate owned, net | | | 263 | | | | — | | | | 263 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | | |
Total nonperforming assets | | $ | 1,732 | | | $ | — | | | $ | 1,732 | | | $ | — | |
| | | | | | | | | | | | | | | | |
| | | | |
Nonperforming assets to total assets | | | 0.63 | % | | | 0.00 | % | | | 0.63 | % | | | 0.00 | % |
| | | | |
Allowance for loan losses | | | | | | | | | | | | | | | | |
Balance, beginning of period | | $ | 2,093 | | | $ | 1,750 | | | $ | 2,090 | | | $ | 1,773 | |
Provision for loan losses | | | 11 | | | | 159 | | | | 11 | | | | 159 | |
Loans charged-off | | | (1 | ) | | | — | | | | (2 | ) | | | (24 | ) |
Recoveries | | | 46 | | | | 23 | | | | 50 | | | | 24 | |
| | | | | | | | | | | | | | | | |
Balance, end of period | | $ | 2,149 | | | $ | 1,932 | | | $ | 2,149 | | | $ | 1,932 | |
| | | | | | | | | | | | | | | | |
| | | | |
Allowance for loan losses to gross loans held for investment, net of unearned fees and costs | | | 0.99 | % | | | 0.98 | % | | | 0.99 | % | | | 0.98 | % |
| | | | | | | | | | | | | | | | |
| (1) | Return is defined as net income, after tax, before preferred stock dividend and accretion of discount divided by average total assets. |
| (2) | Return is defined as net income, after tax, before preferred stock dividend and accretion of discount divided by average common equity. |
| (3) | Tax equivalency calculations have been included in the computation of net interest margin and net interest spread. |
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