Attached files
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| EX-99.2 - LETTER TO SHAREHOLDERS DATED MAY 7, 2012 - UNITED BANCORP INC /MI/ | exhibit992.htm |
| 8-K - UNITED BANCORP, INC. EARNINGS RELEASE Q1 2012 - UNITED BANCORP INC /MI/ | form8kearningsrelease.htm |
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FOR IMMEDIATE RELEASE:
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CONTACT:
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Robert K. Chapman,
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May 7, 2012
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President and Chief Executive Officer
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United Bancorp, Inc.
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734-214-3801
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UNITED BANCORP, INC. ANNOUNCES UNAUDITED
FIRST QUARTER 2012 RESULTS
Company reports profitable quarter
Combined net interest income and noninterest income grows 8.8%
Asset quality trends continue to improve
ANN ARBOR, MI – United Bancorp, Inc. (UBMI.ob) reported consolidated net income of $842,000, or $0.04 per share of common stock, for the first quarter of 2012, compared to $359,000, or $0.01 per share of common stock, for the first quarter of 2011.
Robert K. Chapman, President and Chief Executive Officer of United Bancorp, Inc. (“United” or the “Company”), commented that the improvement in income in the first quarter of 2012 resulted primarily from increased noninterest income and a lower level of provision for loan losses, which were partially offset by continued elevated levels of expenses related to other real estate owned (“ORE”) and foreclosed property.
Mr. Chapman noted that United’s business model contributed positively to the Company’s improved profitability. Noninterest income represented 38.6% of the Company’s combined net interest income and noninterest income for the three months ended March 31, 2012, compared to 34.7% for the same period of 2011.
The Company’s combined net interest income and noninterest income was up 8.8% in the first quarter of 2012 compared to the same period of 2011. This growth was driven, in part, by increased loan originations, both of residential mortgages and commercial loans. The opening of the Company’s loan production office in Brighton, Michigan in December 2011 has contributed to this increase in lending activity. United continues to pursue lending opportunities in existing and adjacent markets, and anticipates that it will open a loan production office within the City of Monroe, Michigan in mid-2012.
Credit quality measures for the Company continued to show improvement for the quarter ended March 31, 2012. The Company’s provision for loan losses for the first quarter of 2012 was $2.1 million, compared to $2.8 million for the same quarter of 2011, and exceeded net charge-offs of $1.7 million for the quarter. The Company’s ratios of nonperforming loans to total loans of 4.51%, and nonperforming assets to total assets of 3.22% at March 31, 2012 were at their lowest levels since the second quarter of 2009.
Results of Operations
The Company’s consolidated net income was $842,000 in the first quarter of 2012, compared to $359,000 for the first quarter of 2011. Net income per share of common stock for the three months ended March 31, 2012 was $0.04, up from $0.01 per share of common stock for the comparable period of 2011. Return on average assets (“ROA”) was 0.38% for the first quarter of 2012, compared
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to 0.17% for the same period of 2011. Return on average shareholders’ equity (“ROE”) was 3.61% for the first quarter of 2012, compared to 1.57% for the same period of 2011. The Company’s combined net interest income and noninterest income was up 8.8% in the first quarter of 2012 compared to the same period of 2011.
United’s net interest margin of 3.62% for the three months ended March 31, 2012 was unchanged from the same period of 2011. For the first quarter of 2012, net interest income of $7.6 million was up 2.3% compared to the same period of 2011. The Company’s yield on earning assets and its cost of funds both declined in the first quarter of 2012 as compared to the same period of 2011. The Company continues to maintain elevated levels of liquidity, as discussed below under “Balance Sheet,” and this additional liquidity reduces the Company’s yield on earning assets. At the same time, the Company has continued to reduce its average balances of FHLB advances and higher-cost deposits, contributing to lower interest costs.
Noninterest income of $4.8 million for the quarter ended March 31, 2012 improved by 21.2% compared to the first quarter of 2011. Substantial increases in income from loan sales and servicing and gains on the sale of ORE properties were responsible for this increase. Noninterest income represented 38.6% of the Company’s combined net interest income and noninterest income for the three months ended March 31, 2012, compared to 34.7% for the same period of 2011.
Total noninterest expense for the first quarter of 2012 was up 11.6% from the first quarter of 2011. In the first quarter of 2012, the largest increase in noninterest expense was in expenses related to ORE and other foreclosed properties, which included write-downs of the value and losses on the sale of property held as ORE, costs to maintain and carry those properties, and probable incurred losses and fees related to foreclosed mortgage loans previously sold on the secondary market.
Expenses related to salaries and employee benefits increased by 9.3% in the first quarter of 2012 compared to the same period of 2011. The increase reflects, in part, continued higher levels of commissions and other compensation costs related to the generation of income from loan sales and servicing. In addition, the Company has increased its staffing levels modestly to accommodate its anticipated future expansion, including expansion into Livingston County, and salary increases were reinstated effective April 1, 2011. However, the Company did not pay or accrue any cash bonus or other payout to executive officers or non-commissioned employees under its bonus plans in 2011 or in the first quarter of 2012.
Balance Sheet
Total consolidated assets of the Company were $914.5 million at March 31, 2012, compared to $885.0 million at December 31, 2011. Total portfolio loans of $575.5 million increased in the first quarter of 2012 by $11.8 million, and have declined by just $2.6 million, or 0.5%, over the most recent twelve months. Total loans at March 31, 2012 were at their highest quarterly levels of the past five quarters, as loan demand has improved and charge-offs have declined. The Company generally sells its fixed rate long-term residential mortgages on the secondary market, and retains adjustable rate mortgages in its loan portfolio. While the Company’s total portfolio loans have declined by $2.6 million, or 0.5%, since March 31, 2011, the balance of loans serviced for others was $758.3 million at March 31, 2012, and has increased by $71.6 million, or 10.4%, since March 31, 2011.
The Company continued to hold elevated levels of investments, federal funds sold and cash equivalents in order to protect the balance sheet during this prolonged period of economic
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uncertainty. United’s balances in federal funds sold and other short-term investments were $96.4 million at March 31, 2012, compared to $91.8 million at December 31, 2011 and $126.2 million at March 31, 2011. Securities available for sale of $183.4 million at March 31, 2012 were up 5.9% from December 31, 2011 and were up 30.4% from March 31, 2011 levels.
Total deposits of $792.5 million at March 31, 2012 were up $27.6 million, or 3.6%, from $764.9 million at December 31, 2011, with most of the increase in non-interest bearing deposit balances. The majority of the Bank’s deposits are derived from core client sources, relating to long-term relationships with local individual, business and public clients. Public clients include local government and municipal bodies, hospitals, universities and other educational institutions. As a result of its strong core funding, the Company’s cost of interest-bearing deposits was 0.68% for the first quarter of 2012, down from 0.92% for the same period of 2011.
Asset Quality
The Company’s ratio of allowance for loan losses to total loans was 3.66% and the ratio of allowance for loan losses to nonperforming loans was 81.0% at March 31, 2012, compared to 3.66% and 80.0%, respectively, at December 31, 2011. The Company’s allowance for loan losses increased by $415,000, or 2.0%, from December 31, 2011 to March 31, 2012. Net charge-offs of $1.7 million for the first quarter of 2012 were $1.1 million lower than in the first quarter of 2011, and were at the lowest quarterly level since the second quarter of 2008.
Within the Company’s loan portfolio, $26.0 million of loans were considered nonperforming at March 31, 2012, compared to $25.8 million at December 31, 2011 and $27.8 million at March 31, 2011. Total nonperforming loans as a percent of total portfolio loans decreased from 4.57% at the end of 2011 and 4.80% at March 31, 2011 to 4.51% at March 31, 2012. For purposes of this presentation, nonperforming loans consist of nonaccrual loans and accruing loans that are past due 90 days or more, and exclude accruing restructured loans. Balances of accruing restructured loans at March 31, 2012, December 31, 2011 and March 31, 2011 were $20.4 million, $21.8 million and $18.5 million, respectively.
Capital Management
Under the terms of a Memorandum of Understanding (“MOU”) with the Federal Deposit Insurance Corporation (“FDIC”) and the Michigan Office of Financial and Insurance Regulation (“OFIR”), United Bank & Trust (the “Bank”) is required, among other things, to have and maintain its Tier 1 leverage capital ratio at a minimum of 9% for the duration of the MOU, and to maintain its ratio of total capital to risk-weighted assets at a minimum of 12% for the duration of the MOU. In December, 2010, the Company closed its public offering of common stock, and the Company has contributed capital to the Bank. At March 31, 2012, the Bank was in compliance with the capital requirements of its MOU with the FDIC and OFIR, with the Bank’s Tier 1 capital ratio of 9.17%, and its ratio of total capital to risk-weighted assets of 15.36%.
About United Bancorp, Inc.
United Bancorp, Inc. is a community-based financial services company located in Washtenaw, Lenawee, Livingston and Monroe Counties in Michigan. United Bank & Trust is the Company’s only subsidiary, and the Bank provides financial solutions to its clients based on their unique circumstances and needs, through a line of business delivery system that includes banking, mortgage,
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structured finance and wealth management. For more information, visit the Company’s website at www.ubat.com.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and United Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as ”trends,” “continue,” “anticipates,” “future,” “uncertainty,” “believes” and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to asset and credit quality trends, future levels of other real estate owned and other foreclosed properties and related expenses, loan demand, and future expansion of the Company, including plans to open a loan production office. All statements referencing future time periods are forward-looking.
Management’s determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including mortgage servicing rights and deferred tax assets) and other real estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated or that other real estate owned can be sold at its carrying value or at all. Our ability to fully comply with all of the provisions of our memorandum of understanding, successfully implement new programs and initiatives, increase efficiencies, utilize our deferred tax asset, address regulatory issues, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and on United Bancorp, Inc., specifically, are also inherently uncertain. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. United Bancorp, Inc. undertakes no obligation to update, clarify or revise forward-looking statements to reflect developments that occur or information obtained after the date of this report.
Risk factors include, but are not limited to, the risk factors described in “Item 1A – Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
Non-GAAP Financial Information
This press release includes disclosures about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets. These disclosures are non-GAAP financial measures. For additional information about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets, please see the unaudited consolidated financial statements and related footnotes that follow.
Unaudited Consolidated Financial Statements Follow.
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United Bancorp, Inc. and Subsidiary
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Comparative Consolidated Balance Sheet Data (Unaudited)
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Dollars in thousands
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Mar. 31,
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Dec. 31,
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Change this Qtr.
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Mar. 31,
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12-Month Change
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Period-end Balance Sheet
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2012
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2011
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$ | % | 2011 | $ | % | ||||||||||||||||||||||
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Assets
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Cash and due from banks
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$ | 15,109 | $ | 15,798 | $ | (689 | ) | -4.4 | % | $ | 11,758 | $ | 3,351 | 28.5 | % | ||||||||||||||
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Interest bearing bal. with banks
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96,386 | 91,428 | 4,958 | 5.4 | % | 126,227 | (29,841 | ) | -23.6 | % | |||||||||||||||||||
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Federal funds sold
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- | 366 | (366 | ) | -100.0 | % | - | - | 100.0 | % | |||||||||||||||||||
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Total cash & cash equivalents
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111,495 | 107,592 | 3,903 | 3.6 | % | 137,985 | (26,490 | ) | -19.2 | % | |||||||||||||||||||
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Securities available for sale
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183,416 | 173,197 | 10,219 | 5.9 | % | 140,635 | 42,781 | 30.4 | % | ||||||||||||||||||||
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FHLB Stock
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2,571 | 2,571 | - | 0.0 | % | 2,788 | (217 | ) | -7.8 | % | |||||||||||||||||||
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Loans held for sale
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11,719 | 8,290 | 3,429 | 41.4 | % | 519 | 11,200 | 2158.0 | % | ||||||||||||||||||||
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Portfolio loans
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Personal
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103,395 | 103,405 | (10 | ) | 0.0 | % | 107,251 | (3,856 | ) | -3.6 | % | ||||||||||||||||||
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Business (1)
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347,765 | 337,178 | 10,587 | 3.1 | % | 346,206 | 1,559 | 0.5 | % | ||||||||||||||||||||
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Residential mortgage
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82,759 | 83,072 | (313 | ) | -0.4 | % | 84,738 | (1,979 | ) | -2.3 | % | ||||||||||||||||||
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Construction & development
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41,220 | 39,721 | 1,499 | 3.8 | % | 39,440 | 1,780 | 4.5 | % | ||||||||||||||||||||
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Deferred fees and costs
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369 | 326 | 43 | 13.1 | % | 476 | (107 | ) | -22.5 | % | |||||||||||||||||||
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Total portfolio loans
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575,508 | 563,702 | 11,806 | 2.1 | % | 578,111 | (2,603 | ) | -0.5 | % | |||||||||||||||||||
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Allowance for loan losses
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21,048 | 20,633 | 415 | 2.0 | % | 25,194 | (4,146 | ) | -16.5 | % | |||||||||||||||||||
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Net loans
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554,460 | 543,069 | 11,391 | 2.1 | % | 552,917 | 1,543 | 0.3 | % | ||||||||||||||||||||
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Premises and equipment, net
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10,756 | 10,795 | (39 | ) | -0.4 | % | 11,062 | (306 | ) | -2.8 | % | ||||||||||||||||||
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Bank owned life insurance
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13,923 | 13,819 | 104 | 0.8 | % | 13,496 | 427 | 3.2 | % | ||||||||||||||||||||
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Other assets
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26,110 | 25,676 | 434 | 1.7 | % | 26,074 | 36 | 0.1 | % | ||||||||||||||||||||
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Total Assets
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$ | 914,450 | $ | 885,009 | $ | 29,441 | 3.3 | % | $ | 885,476 | $ | 28,974 | 3.3 | % | |||||||||||||||
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Liabilities
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Deposits
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Non-interest bearing
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$ | 160,527 | $ | 139,346 | $ | 21,181 | 15.2 | % | $ | 134,471 | $ | 26,056 | 19.4 | % | |||||||||||||||
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Interest bearing
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631,970 | 625,510 | 6,460 | 1.0 | % | 625,762 | 6,208 | 1.0 | % | ||||||||||||||||||||
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Total deposits
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792,497 | 764,856 | 27,641 | 3.6 | % | 760,233 | 32,264 | 4.2 | % | ||||||||||||||||||||
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FHLB advances outstanding
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24,035 | 24,035 | - | 0.0 | % | 29,321 | (5,286 | ) | -18.0 | % | |||||||||||||||||||
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Other liabilities
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3,653 | 2,344 | 1,309 | 55.8 | % | 3,091 | 562 | 18.2 | % | ||||||||||||||||||||
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Total Liabilities
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820,185 | 791,235 | 28,950 | 3.7 | % | 792,645 | 27,540 | 3.5 | % | ||||||||||||||||||||
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Shareholders' Equity
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94,265 | 93,774 | 491 | 0.5 | % | 92,831 | 1,434 | 1.5 | % | ||||||||||||||||||||
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Total Liabilities and Equity
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$ | 914,450 | $ | 885,009 | $ | 29,441 | 3.3 | % | $ | 885,476 | $ | 28,974 | 3.3 | % | |||||||||||||||
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Three months ended Mar. 31,
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Three months ended Mar. 31,
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Average Balance Data
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2012 | 2011 |
% Change
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2012 | 2011 |
% Change
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Total loans
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$ | 585,686 | $ | 589,974 | -0.7 | % | $ | 585,686 | $ | 634,678 | -7.7 | % | |||||||||||||||||
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Earning assets
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851,836 | 841,824 | 1.2 | % | 851,836 | 834,642 | 2.1 | % | |||||||||||||||||||||
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Total assets
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894,346 | 879,695 | 1.7 | % | 894,346 | 874,768 | 2.2 | % | |||||||||||||||||||||
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Deposits
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773,977 | 752,724 | 2.8 | % | 773,977 | 757,236 | 2.2 | % | |||||||||||||||||||||
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Shareholders' Equity
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93,732 | 92,824 | 1.0 | % | 93,732 | 79,544 | 17.8 | % | |||||||||||||||||||||
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Asset Quality
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Net charge offs
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$ | 1,685 | $ | 2,769 | -39.2 | % | $ | 1,685 | $ | 16,387 | -89.7 | % | |||||||||||||||||
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Non-accrual loans
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25,958 | 25,451 | 2.0 | % | |||||||||||||||||||||||||
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Non-performing loans
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25,971 | 27,777 | -6.5 | % | |||||||||||||||||||||||||
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Non-performing assets
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29,455 | 32,418 | -9.1 | % | |||||||||||||||||||||||||
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Nonperforming loans/total loans
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4.51 | % | 4.80 | % | -6.1 | % | |||||||||||||||||||||||
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Nonperforming assets/total assets
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3.22 | % | 3.66 | % | -12.0 | % | |||||||||||||||||||||||
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Allowance for loan loss/total loans
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3.66 | % | 4.36 | % | -16.1 | % | |||||||||||||||||||||||
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Allowance/nonperforming loans
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81.0 | % | 90.7 | % | -10.6 | % | |||||||||||||||||||||||
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(1)
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Business loans include commercial mortgages and tax exempt loans
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United Bancorp, Inc. and Subsidiary
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Comparative Consolidated Income Statement and Performance Data (Unaudited)
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Dollars in thousands except per share data
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Three months ended Mar. 31,
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Consolidated Income Statement
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2012
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2011
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$ Change
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% Change
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Interest Income
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Interest and fees on loans
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$ | 7,926 | $ | 8,204 | $ | (278 | ) | -3.4 | % | |||||||
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Interest on investment securities
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853 | 811 | 42 | 5.2 | % | |||||||||||
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Interest on fed funds sold & bank balances
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54 | 74 | (20 | ) | -27.0 | % | ||||||||||
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Total interest income
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8,833 | 9,089 | (256 | ) | -2.8 | % | ||||||||||
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Interest Expense
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- | |||||||||||||||
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Interest on deposits
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1,056 | 1,410 | (354 | ) | -25.1 | % | ||||||||||
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Interest on short term borrowings
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- | 11 | (11 | ) | -100.0 | % | ||||||||||
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Interest on FHLB advances
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208 | 266 | (58 | ) | -21.8 | % | ||||||||||
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Total interest expense
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1,264 | 1,687 | (423 | ) | -25.1 | % | ||||||||||
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Net Interest Income
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7,569 | 7,402 | 167 | 2.3 | % | |||||||||||
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Provision for loan losses
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2,100 | 2,800 | (700 | ) | -25.0 | % | ||||||||||
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Net Interest Income After Provision
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5,469 | 4,602 | 867 | 18.8 | % | |||||||||||
| - | ||||||||||||||||
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Noninterest Income
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- | |||||||||||||||
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Service charges on deposit accounts
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433 | 503 | (70 | ) | -13.9 | % | ||||||||||
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Trust & Investment fee income
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1,225 | 1,263 | (38 | ) | -3.0 | % | ||||||||||
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Gains on securities transactions
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4 | - | 4 | 0.0 | % | |||||||||||
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Income from loan sales and servicing
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1,904 | 1,311 | 593 | 45.2 | % | |||||||||||
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ATM, debit and credit card fee income
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507 | 513 | (6 | ) | -1.2 | % | ||||||||||
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Income from bank-owned life insurance
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104 | 105 | (1 | ) | -1.0 | % | ||||||||||
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Other income
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581 | 230 | 351 | 152.6 | % | |||||||||||
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Total noninterest income
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4,758 | 3,925 | 833 | 21.2 | % | |||||||||||
| - | ||||||||||||||||
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Noninterest Expense
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- | |||||||||||||||
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Salaries and employee benefits
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5,001 | 4,575 | 426 | 9.3 | % | |||||||||||
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Occupancy and equipment expense
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1,318 | 1,252 | 66 | 5.3 | % | |||||||||||
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External data processing
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247 | 320 | (73 | ) | -22.8 | % | ||||||||||
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Advertising and marketing expenses
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193 | 160 | 33 | 20.6 | % | |||||||||||
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Attorney & other professional fees
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468 | 433 | 35 | 8.1 | % | |||||||||||
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Director fees
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98 | 102 | (4 | ) | -3.9 | % | ||||||||||
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Expenses relating to ORE property and foreclosed assets
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933 | 257 | 676 | 263.0 | % | |||||||||||
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FDIC Insurance premiums
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295 | 431 | (136 | ) | -31.6 | % | ||||||||||
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Other expense
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616 | 688 | (72 | ) | -10.5 | % | ||||||||||
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Total noninterest expense
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9,169 | 8,218 | 951 | 11.6 | % | |||||||||||
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Income Before Federal Income Tax
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1,058 | 309 | 749 | 242.4 | % | |||||||||||
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Federal income tax (benefit)
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216 | (50 | ) | 266 | -532.0 | % | ||||||||||
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Net Income
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$ | 842 | $ | 359 | $ | 483 | 134.5 | % | ||||||||
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Performance Ratios
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Return on average assets
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0.38 | % | 0.17 | % | 0.21 | % | 122.7 | % | ||||||||
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Return on average equity
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3.61 | % | 1.57 | % | 2.04 | % | 130.0 | % | ||||||||
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Pre-tax, pre-provision ROA (1)
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1.42 | % | 1.43 | % | -0.01 | % | -0.9 | % | ||||||||
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Net interest margin (FTE)
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3.62 | % | 3.62 | % | 0.00 | % | 0.0 | % | ||||||||
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Efficiency ratio
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73.8 | % | 71.8 | % | 2.0 | % | 2.7 | % | ||||||||
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Common Stock Performance
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Basic & diluted earnings per share
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$ | 0.04 | $ | 0.01 | $ | 0.03 | ||||||||||
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Book value per share
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5.82 | 5.72 | 0.10 | 1.8 | % | |||||||||||
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Tangible book value per share
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5.82 | 5.72 | 0.10 | 1.8 | % | |||||||||||
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Market value per share (2)
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3.35 | 3.75 | (0.40 | ) | -10.7 | % | ||||||||||
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United Bancorp, Inc. and Subsidiary
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Trends of Selected Consolidated Financial Data (Unaudited)
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Dollars in thousands except per share data
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2012
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2011
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Balance Sheet Data
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1st Qtr
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4th Qtr
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3rd Qtr
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2nd Qtr
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1st Qtr
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Period-end:
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Portfolio loans
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$ | 575,508 | $ | 563,702 | $ | 577,600 | $ | 575,296 | $ | 578,111 | ||||||||||
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Total loans
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587,227 | 571,992 | 585,309 | 577,840 | 578,630 | |||||||||||||||
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Allowance for loan losses
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21,048 | 20,633 | 24,357 | 25,370 | 25,194 | |||||||||||||||
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Earning assets
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869,231 | 839,554 | 852,245 | 824,127 | 848,280 | |||||||||||||||
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Total assets
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914,450 | 885,009 | 894,405 | 862,099 | 885,476 | |||||||||||||||
|
Deposits
|
792,497 | 764,856 | 775,529 | 737,528 | 760,233 | |||||||||||||||
|
Shareholders' Equity
|
94,265 | 93,774 | 91,806 | 94,064 | 92,831 | |||||||||||||||
|
Average:
|
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Total loans
|
$ | 585,686 | $ | 582,956 | $ | 583,042 | $ | 577,662 | $ | 589,974 | ||||||||||
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Earning assets
|
851,836 | 841,457 | 836,529 | 830,838 | 841,824 | |||||||||||||||
|
Total assets
|
894,346 | 881,480 | 876,095 | 869,523 | 879,695 | |||||||||||||||
|
Deposits
|
773,977 | 762,706 | 752,355 | 742,171 | 752,724 | |||||||||||||||
|
Shareholders' Equity
|
93,732 | 92,122 | 94,159 | 93,409 | 92,824 | |||||||||||||||
|
Income Statement Summary
|
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|
Net interest income
|
$ | 7,569 | $ | 7,687 | $ | 7,437 | $ | 7,525 | $ | 7,402 | ||||||||||
|
Non-interest income
|
4,758 | 4,635 | 4,256 | 4,395 | 3,925 | |||||||||||||||
|
Non-interest expense
|
9,169 | 8,815 | 9,084 | 8,501 | 8,218 | |||||||||||||||
|
Pre-tax, pre-provision income (1)
|
3,158 | 3,507 | 2,609 | 3,419 | 3,109 | |||||||||||||||
|
Provision for loan losses
|
2,100 | 250 | 6,000 | 3,100 | 2,800 | |||||||||||||||
|
Federal income tax
|
216 | 960 | (1,291 | ) | (42 | ) | (50 | ) | ||||||||||||
|
Net income (loss)
|
842 | 2,297 | (2,100 | ) | 361 | 359 | ||||||||||||||
|
Basic & diluted income (loss) per share
|
$ | 0.04 | $ | 0.16 | $ | (0.19 | ) | $ | 0.01 | $ | 0.01 | |||||||||
|
Performance Ratios and Liquidity
|
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Return on average assets
|
0.38 | % | 1.03 | % | -0.95 | % | 0.17 | % | 0.17 | % | ||||||||||
|
Return on average common equity
|
3.61 | % | 9.89 | % | -8.85 | % | 1.55 | % | 1.57 | % | ||||||||||
|
Pre-tax, pre-provision ROA (1)
|
1.42 | % | 1.59 | % | 1.19 | % | 1.57 | % | 1.43 | % | ||||||||||
|
Net interest margin (FTE)
|
3.62 | % | 3.67 | % | 3.58 | % | 3.69 | % | 3.62 | % | ||||||||||
|
Efficiency ratio
|
73.8 | % | 70.9 | % | 77.0 | % | 70.7 | % | 71.8 | % | ||||||||||
|
Ratio of loans to deposits
|
72.6 | % | 73.7 | % | 74.5 | % | 78.0 | % | 76.0 | % | ||||||||||
|
Asset Quality
|
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|
Net charge offs
|
$ | 1,685 | $ | 3,974 | $ | 7,013 | $ | 2,924 | $ | 2,769 | ||||||||||
|
Non-accrual loans
|
25,958 | 25,754 | 29,392 | 28,099 | 25,451 | |||||||||||||||
|
Non-performing loans
|
25,971 | 25,785 | 29,778 | 31,237 | 27,777 | |||||||||||||||
|
Non-performing assets
|
29,455 | 29,454 | 34,079 | 36,204 | 32,418 | |||||||||||||||
|
Nonperforming loans/portfolio loans
|
4.51 | % | 4.57 | % | 5.16 | % | 5.43 | % | 4.80 | % | ||||||||||
|
Nonperforming assets/total assets
|
3.22 | % | 3.33 | % | 3.81 | % | 4.20 | % | 3.66 | % | ||||||||||
|
Allowance for loan loss/portfolio loans
|
3.66 | % | 3.66 | % | 4.22 | % | 4.41 | % | 4.36 | % | ||||||||||
|
Allowance/nonperforming loans
|
81.0 | % | 80.0 | % | 81.8 | % | 81.2 | % | 90.7 | % | ||||||||||
|
Market Data for Common Stock
|
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|
Book value per share
|
$ | 5.82 | $ | 5.78 | $ | 5.63 | $ | 5.81 | $ | 5.72 | ||||||||||
|
Market value per share (2)
|
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|
High
|
3.45 | 2.80 | 3.50 | 3.75 | 4.05 | |||||||||||||||
|
Low
|
2.49 | 2.20 | 2.90 | 3.00 | 3.35 | |||||||||||||||
|
Period-end
|
3.35 | 2.50 | 2.95 | 3.25 | 3.75 | |||||||||||||||
|
Period-end shares outstanding
|
12,699 | 12,697 | 12,697 | 12,692 | 12,692 | |||||||||||||||
|
Average shares outstanding
|
12,697 | 12,697 | 12,696 | 12,692 | 12,675 | |||||||||||||||
7
|
Trends of Selected Consolidated Financial Data (continued)
|
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|
2012
|
2011
|
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|
Capital and Stock Performance
|
1st Qtr
|
4th Qtr
|
3rd Qtr
|
2nd Qtr
|
1st Qtr
|
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|
Tier 1 Leverage Ratio
|
9.8 | % | 9.9 | % | 9.6 | % | 10.1 | % | 10.0 | % | ||||||||||
|
Tangible common equity to total assets
|
8.1 | % | 8.3 | % | 8.0 | % | 8.5 | % | 8.2 | % | ||||||||||
|
Total capital to risk-weighted assets
|
16.3 | % | 16.5 | % | 15.6 | % | 16.6 | % | 16.5 | % | ||||||||||
|
Period-end common stock market price/book value
|
57.6 | % | 43.2 | % | 52.4 | % | 55.9 | % | 65.6 | % | ||||||||||
|
(1)
|
In an attempt to evaluate the trends of net interest income, noninterest income and noninterest expense, the Company calculates pre-tax, pre-provision income (“PTPP Income”) and pre-tax, pre-provision return on average assets (“PTPP ROA”). PTPP Income adjusts net income by the amount of the Company’s federal income tax (benefit) and provision for loan losses, which is excluded because its level is elevated and volatile in times of economic stress. PTPP ROA measures PTPP Income as a percent of average assets. While this information is not consistent with, or intended to replace, presentation under generally accepted accounting principles, it is presented here for comparison.
Management believes that PTPP Income and PTPP ROA are useful and consistent measures of the Company’s earning capacity, as these financial measures enable investors and others to assess the Company’s ability to generate capital to cover credit losses through a credit cycle, particularly in times of economic stress.
|
|
(2)
|
Market value per share is based on the last reported transaction on OTCBB before period end.
|
8