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| 8-K - 8-K - MIDDLEBURG FINANCIAL CORP | a12-31x13earningsrelease.htm |
E A R N I N G S R E L E A S E
Press Contacts: Gary R. Shook, President & CEO 540-687-4801 or
pres@middleburgbank.com
Raj Mehra, EVP & CFO 540-687-4816 or
cfo@middleburgbank.com
Jeffrey H. Culver, EVP & COO 703-737-3470 or
coo@middleburgbank.com
MIDDLEBURG FINANCIAL CORPORATION ANNOUNCES FOURTH QUARTER 2013 RESULTS
MIDDLEBURG, VA. – January 31, 2014 – Middleburg Financial Corporation (the “Company”) (Nasdaq: MBRG), today announced net income of $1.49 million for the quarter ended December 31, 2013, or $0.21 per diluted share and net income of $6.52 million for the full year 2013, or $0.92 per diluted share.
“Middleburg Financial Corporation continued to move forward in 2013, with positive trends in deposits, loans, trust and investment services income, as well as net income,” commented Gary R. Shook, president and CEO of the Company. Moreover, non-performing assets, which have been a drag on earnings performance over the past several years continued to decline throughout 2013. Net income for the Company grew slightly in 2013 even with the headwinds faced by the significant decline in mortgage refinance activity. As mortgage revenue declined and compliance costs continued to rise, we addressed operating costs by adjusting our staffing levels, including the elimination of senior management positions, all of which were reflected in the earnings for the fourth quarter.”
Fourth Quarter 2013 Highlights:
• | Net income of $1.49 million or $0.21 per diluted share for the quarter ended December 31, 2013, an increase of 4.79% compared to the fourth quarter of 2012 and $6.52 million or $0.92 per diluted share for 2013, an increase of 0.54% over the previous year; |
• | Net interest margin of 3.43%, compared to 3.33% for the previous quarter and 3.42% for the fourth quarter of 2012; |
• | Total revenue decreased 2.85% to $15.01 million for the fourth quarter 2013 compared to the previous quarter and decreased 14.37% compared to the fourth quarter of 2012; |
• | Total assets were $1.23 billion as of December 31, 2013, relatively unchanged from December 31, 2012; |
• | Total deposits were $982.40 million as of December 31, 2013, an increase of 0.05% compared to December 31, 2012; |
• | Loans held-for-investment were $728.48 million as of December 31, 2013, an increase of 1.73% compared to September 30, 2013 and an increase of 2.68% compared to December 31, 2012; |
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• | Southern Trust Mortgage closed $138.49 million in mortgage loans during the fourth quarter 2013 compared to $249.20 million in mortgage loans closed during the fourth quarter 2012, a decrease of 44.43%; |
• | Asset quality continues to improve with a ratio of non-performing assets to total assets of 2.33% at December 31, 2013 compared to 2.51% at September 30, 2013 and 3.05% at December 31, 2012; |
• | Capital ratios continue to be strong: Tangible Common Equity Ratio of 8.76%, Total Risk-Based Capital Ratio of 15.88%, Tier 1 Risk-Based Capital Ratio of 14.62%, and a Tier 1 Leverage Ratio of 9.42% at December 31, 2013. |
Total Revenue
Total revenue, which is comprised of net interest income (before the provision for loan losses) and non-interest income, was $15.01 million for the quarter ended December 31, 2013, representing a decrease of 2.85% compared to the previous quarter and a decrease of $2.52 million or 14.37% from the quarter ended December 31, 2012.
Net interest income was $9.61 million during the quarter ended December 31, 2013, an increase of 3.11% compared to the previous quarter and an increase of 0.60% compared to the quarter ended December 31, 2012. While loan yields in the fourth quarter of 2013 were pressured by intense competition and weak demand from qualified borrowers, securities yields increased as prepayments on mortgage securities slowed in response to the increase in mortgage rates. Our cost of funds declined throughout 2013 due to maturing high cost time deposits and lower rates for non-interest bearing deposits. The yield on average earning assets was 3.94% for the quarter ended December 31, 2013 compared to 3.89% for the previous quarter and 4.08% for the quarter ended December 31, 2012. Loan yields decreased by 6 basis points while the yield of the investment securities portfolio increased by 13 basis points when comparing the quarter ended December 31, 2013 to the previous quarter. Loan yields decreased by 27 basis points while the yield of the investment securities portfolio increased by 17 basis points when comparing the quarter ended December 31, 2013 to the same calendar quarter in 2012.
The average annualized cost of interest bearing liabilities was 0.66% for the quarter ended December 31, 2013, compared to 0.71% in the previous quarter, and 0.82% for the quarter ended December 31, 2012, representing a decrease of 5 basis points from the previous quarter and a decrease of 16 basis points from the quarter ended December 31, 2012. Annualized costs for interest bearing retail deposits decreased by 6 basis points from the previous quarter to 0.55% from 0.61% and decreased by 17 basis points from the same quarter last year. The decline in the annualized cost of interest bearing retail deposits from both the previous quarter and the same quarter last year was due to reduced interest expenses broadly across deposit categories, including interest checking, savings and time deposits. The annualized cost for wholesale borrowings (excluding brokered deposits) was 1.45%, which was an increase of 12 basis points compared to the previous quarter and a decrease of 2 basis points compared to the quarter ended December 31, 2012.
Cost of funds is calculated by dividing annualized total interest expense by the sum of average interest bearing liabilities and average demand deposits. Cost of funds was 0.55% for the quarter ended December 31, 2013 compared to 0.59% for the previous quarter. Cost of funds for the fourth quarter of 2013 decreased 14 basis points compared to cost of funds for the quarter ended December 31, 2012.
The net interest margin for the quarter ended December 31, 2013 was 3.43%, compared to 3.33% for the previous quarter, and 3.42% for the quarter ended December 31, 2012. Management continues to reduce funding costs, where possible, to produce a stable net interest margin given the continued low interest rate environment.
The Company’s net interest margin is not a measurement under accounting principles generally accepted in the United States, but it is a common measure used by the financial services industry to determine how profitably
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earning assets are funded. The Company’s net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent net interest income is calculated by grossing up interest income for the amounts that are non-taxable (i.e., municipal income) then subtracting interest expense. The tax rate utilized is 34.0%. Details on the calculation of the net interest margin are included in the “Key Statistics” table.
The following table presents components of non-interest income for the three month periods ended December 31, 2013, September 30, 2013 and December 31, 2012:
Non-Interest Income | ||||||||||||
(in thousands) | ||||||||||||
For the three months ended | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
2013 | 2013 | 2012 | ||||||||||
Service charges on deposit accounts | $ | 593 | $ | 590 | $ | 572 | ||||||
Trust service income | 1,033 | 963 | 923 | |||||||||
Gains on loans held for sale | 3,114 | 4,162 | 5,926 | |||||||||
Net gains (losses) on securities available for sale | 22 | 23 | (7 | ) | ||||||||
Commissions on investment sales | 107 | 159 | 129 | |||||||||
Fees on mortgages held for sale | — | 28 | 43 | |||||||||
Bank owned life insurance | 104 | 125 | 96 | |||||||||
Other operating income | 430 | 78 | 299 | |||||||||
Total non-interest income | $ | 5,403 | $ | 6,128 | $ | 7,981 | ||||||
Non-interest income decreased by 32.30% in the fourth quarter of 2013, compared to the quarter ended December 31, 2012. Gains on mortgage loan sales decreased by 47.45% when compared to the quarter ended December 31, 2012. The decline in gains on mortgage loan sales was due to the decline in originations as higher mortgage rates reduced borrower demand for mortgage refinancing and for mortgage loans to purchase homes. Gains on mortgage loan sales included in the accompanying statements of income are presented net of originator commissions incurred to originate the loans.
Our mortgage subsidiary, Southern Trust Mortgage, closed $138.49 million in mortgage loans during the quarter ended December 31, 2013 compared to $189.48 million closed during the previous quarter, and $249.20 million closed during the quarter ended December 31, 2012, a decrease of 26.91% compared to the previous quarter and a decrease of 44.43% compared to the fourth quarter of 2012. Due to the decline in mortgage loan originations, Southern Trust Mortgage continues to take measures to reduce overhead in order to align expenses with the decline in loan originations and lower revenue from mortgage loan sales. These measures include a continued reduction in personnel and planned reductions in expenses throughout the mortgage company.
The revenues and expenses of Southern Trust Mortgage are reflected in the Company’s financial statements on a consolidated basis following generally accepted accounting principles in the United States. The outstanding equity interest not held by the Company is reported on the Company’s balance sheets as “non-controlling interest in consolidated subsidiary” and the earnings or loss attributable to the non-controlling interest is reported on the Company’s statements of income as “net (income)/loss attributable to non-controlling interest.”
Total revenue generated by our wealth management group, Middleburg Investment Group (“MIG”) was $1.14 million for the quarter ended December 31, 2013, an increase of 8.57% from the quarter ended December 31, 2012. Middleburg Investment Group is comprised of Middleburg Trust Company, a wholly owned subsidiary of the Company and Middleburg Investment Services, which is a division of Middleburg Bank. Fee income is based primarily upon the market value of the accounts under administration. Total consolidated assets under administration by MIG were $1.55 billion at December 31, 2013 and $1.49 billion at December 31, 2012.
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Other operating income was $430,000 during the quarter ended December 31, 2013, compared to $299,000 during the quarter ended December 31, 2012. Other operating income includes credit card fees, data processing fees and other miscellaneous income during the reporting period.
The following table presents components of non-interest expense for the three month periods ended December 31, 2013, September 30, 2013 and December 31, 2012:
Non-Interest Expense | ||||||||||||
(in thousands) | ||||||||||||
For the three months ended | ||||||||||||
December 31, | September | December 31, | ||||||||||
2013 | 2013 | 2012 | ||||||||||
Salaries and employee benefits | $ | 7,385 | $ | 7,750 | $ | 8,278 | ||||||
Net occupancy and equipment expense | 1,857 | 1,820 | 1,785 | |||||||||
Advertising | 436 | 318 | 635 | |||||||||
Computer operations | 485 | 456 | 471 | |||||||||
Other real estate owned | 79 | 416 | 55 | |||||||||
Other taxes | 186 | 186 | 202 | |||||||||
Federal deposit insurance expense | 139 | 149 | 269 | |||||||||
Other operating expenses | 2,635 | 2,210 | 2,103 | |||||||||
Total non-interest expense | $ | 13,202 | $ | 13,305 | $ | 13,798 | ||||||
Total non-interest expense in the fourth quarter of 2013 decreased 4.32% compared to the quarter ended December 31, 2012.
Salaries and employee benefit expenses decreased 10.79% compared to the fourth quarter ended December 31, 2012. The primary reason for the decrease in expenses related to salaries and benefits was a decrease in full-time equivalent employees. Total personnel was reduced by 5.8% in the third quarter of 2013 and an additional reduction of 5.9% in the fourth quarter of 2013, compared to staffing levels at the beginning of 2013.
Expenses related to Other Real Estate Owned (“OREO”) decreased by 81.01% when compared to the previous quarter and increased 43.64% when compared to the quarter ended December 31, 2012. Changes in the level of OREO related expenses is determined by the volume of OREO properties recorded during the reporting periods, valuation allowances associated with the fair market value of the properties, the condition and maintenance of the properties and losses incurred on the sale of properties.
Advertising expenses decreased 31.34% from the quarter ended December 31, 2012. Advertising expenses are cyclical and are impacted by product offerings and promotions, new financial service center locations and community outreach.
Asset Quality
Asset quality improved throughout 2013, which resulted in the decline in the allowance for loan losses to total loans held for investment to 1.83% at December 31, 2013 compared to 2.02% at December 31, 2012.
Loans that were delinquent for more than 90 days and still accruing interest decreased 22.61% to $808,000 at December 31, 2013 from $1.04 million at December 31, 2012.
Non-accrual loans decreased 8.83% to $19.75 million at December 31, 2013 from $21.66 million at December 31, 2012. Troubled debt restructurings that were performing as agreed were $4.67 million at December 31, 2013 compared to $5.13 million at December 31, 2012 representing a decrease of 8.97%. Other Real Estate
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Owned (OREO) was $3.42 million at December 31, 2013 compared to $9.93 million at December 31, 2012, representing a decrease of 65.56% since December 31, 2012. Total non-performing assets were $28.66 million or 2.33% of total assets at December 31, 2013, compared to $37.77 million or 3.05% of total assets at December 31, 2012.
Net loan charge-offs during the fourth quarter of 2013 were $172,000 compared to net loan charge-offs of $237,000 for the previous quarter and $911,000 for the quarter ended December 31, 2012.
Total Assets
Total assets at December 31, 2013 remained relatively unchanged compared to December 31, 2012.
Total loans held for investment increased $19.00 million or 2.68% from December 31, 2012. The securities portfolio (excluding restricted stock) increased 2.81%, compared to December 31, 2012. Balances of mortgages held for sale decreased $48.94 million or 59.60%, compared to December 31, 2012. Bank owned life insurance increased $5 million during the fourth quarter 2013. Cash balances and deposits at other banks increased 23.76%, compared to December 31, 2012.
Deposits and Other Borrowings
Total deposits increased $496,000 or 0.05% since December 31, 2012. FHLB advances were $80.0 million at December 31, 2013, an increase of $2.09 million since December 31, 2012.
Equity and Capital
Shareholders’ equity at December 31, 2013 was $112.94 million, compared to $113.93 million at December 31, 2012. Retained earnings at December 31, 2013 were $51.06 million compared to $46.24 million at December 31, 2012. The book value of the Company’s common stock at December 31, 2013 was $15.95 per share compared to $16.15 at December 31, 2012. Shareholders’ equity declined in 2013 as a result of decreases in accumulated other comprehensive income (AOCI) resulting from unrealized losses in available for sale securities. The Company's dividend of $0.07 per share remained unchanged from the previous quarter and increased from $0.05 per share for the quarter ended December 31, 2012.
The Company’s total risk-based capital ratio increased to 15.88% as of December 31, 2013 from 15.83% at September 30, 2013 and 15.35% from December 31, 2012. The Tier 1 risk-based capital ratio increased from 14.58% at September 30, 2013 to 14.62% at December 31, 2013 and increased from 14.09% at December 31, 2012. The Tier 1 Leverage Ratio increased to 9.42% at December 31, 2013 from 9.36% at September 30, 2013 and 9.10% at December 31, 2012.
As depicted in the following table, the Company’s risk-based capital ratios remain well above regulatory minimum capital ratios:
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Risk-Based Capital Ratios | |||||
December 31, 2013 | |||||
(1) | |||||
Regulatory Minimum Requirement | MFC Ratios | MFC Excess over Minimum | |||
Tier 1 Leverage Ratio | 4.0% | 9.42% | 5.42% | ||
Tier 1 Risk-Based Capital Ratio | 4.0% | 14.62% | 10.62% | ||
Total Risk-Based Capital Ratio | 8.0% | 15.88% | 7.88% | ||
(1) Under the regulatory framework for prompt corrective action. | |||||
Caution about Forward Looking Statements
Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, and other filings with the Securities and Exchange Commission.
About Middleburg Financial Corporation
Middleburg Financial Corporation is headquartered in Middleburg, Virginia and has two wholly owned subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc. Middleburg Bank serves communities in Virginia with financial centers in Ashburn, Gainesville, Leesburg, Marshall, Middleburg, Purcellville, Reston, Richmond, Warrenton and Williamsburg. Middleburg Investment Group owns Middleburg Trust Company, which is headquartered in Richmond, Virginia with offices in Middleburg, Alexandria and Williamsburg. Middleburg Financial Corporation is also the majority owner of Southern Trust Mortgage, which is based in Virginia Beach and provides mortgages through offices in Virginia, Maryland, Georgia, North Carolina, and South Carolina.
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MIDDLEBURG FINANCIAL CORPORATION | |||||||||||
Consolidated Balance Sheets | |||||||||||
(In thousands, except for share and per share data) | |||||||||||
(Unaudited) | (Unaudited) | (Audited) | |||||||||
December 31, 2013 | September 30, 2013 | December 31, 2012 | |||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | 6,648 | $ | 9,417 | $ | 7,139 | |||||
Interest-bearing deposits with other institutions | 60,695 | 53,228 | 47,276 | ||||||||
Total cash and cash equivalents | 67,343 | 62,645 | 54,415 | ||||||||
Securities available for sale, at fair value | 328,423 | 328,378 | 319,457 | ||||||||
Loans held for sale | 33,175 | 41,855 | 82,114 | ||||||||
Restricted securities, at cost | 6,780 | 7,005 | 6,990 | ||||||||
Loans receivable, net of allowance for loan losses of $13,320, $13,382 and $14,311 respectively | 715,160 | 702,724 | 695,166 | ||||||||
Premises and equipment, net | 20,017 | 20,465 | 20,587 | ||||||||
Goodwill and identified intangibles | 5,846 | 5,889 | 6,017 | ||||||||
Other real estate owned, net of valuation allowances of $398, $603 and $1,707, respectively | 3,424 | 4,530 | 9,929 | ||||||||
Prepaid federal deposit insurance | — | — | 3,015 | ||||||||
Bank owned life insurance | 21,955 | 16,851 | 16,484 | ||||||||
Accrued interest receivable and other assets | 26,130 | 24,985 | 22,607 | ||||||||
TOTAL ASSETS | $ | 1,228,253 | $ | 1,215,327 | $ | 1,236,781 | |||||
LIABILITIES | |||||||||||
Deposits: | |||||||||||
Non-interest bearing demand deposits | $ | 185,577 | $ | 190,680 | $ | 167,137 | |||||
Savings and interest bearing demand deposits | 528,879 | 495,348 | 522,740 | ||||||||
Time deposits | 267,940 | 272,538 | 292,023 | ||||||||
Total deposits | 982,396 | 958,566 | 981,900 | ||||||||
Securities sold under agreements to repurchase | 34,539 | 35,005 | 33,975 | ||||||||
Short-term borrowings | — | 5,451 | 11,873 | ||||||||
FHLB borrowings | 80,000 | 85,000 | 77,912 | ||||||||
Subordinated notes | 5,155 | 5,155 | 5,155 | ||||||||
Accrued interest payable and other liabilities | 10,723 | 10,967 | 8,844 | ||||||||
Commitments and contingent liabilities | — | — | — | ||||||||
TOTAL LIABILITIES | 1,112,813 | 1,100,144 | 1,119,659 | ||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Common stock ($2.50 par value; 20,000,000 shares authorized, 7,080,591, 7,089,091 and 7,052,554 issued and outstanding, respectively) | 17,403 | 17,403 | 17,357 | ||||||||
Capital surplus | 44,251 | 44,139 | 43,869 | ||||||||
Retained earnings | 51,056 | 50,063 | 46,235 | ||||||||
Accumulated other comprehensive income | 232 | 833 | 6,467 | ||||||||
Total Middleburg Financial Corporation shareholders' equity | 112,942 | 112,438 | 113,928 | ||||||||
Non-controlling interest in consolidated subsidiary | 2,498 | 2,745 | 3,194 | ||||||||
TOTAL SHAREHOLDERS' EQUITY | 115,440 | 115,183 | 117,122 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,228,253 | $ | 1,215,327 | $ | 1,236,781 | |||||
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MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(In thousands, except for per share data) | |||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
INTEREST AND DIVIDEND INCOME | |||||||||||||||
Interest and fees on loans | $ | 8,744 | $ | 9,330 | $ | 35,248 | $ | 37,895 | |||||||
Interest and dividends on securities available for sale | |||||||||||||||
Taxable | 1,638 | 1,432 | 6,105 | 6,408 | |||||||||||
Tax-exempt | 638 | 604 | 2,555 | 2,403 | |||||||||||
Dividends | 63 | 58 | 232 | 193 | |||||||||||
Interest on deposits in banks and federal funds sold | 31 | 36 | 132 | 124 | |||||||||||
Total interest and dividend income | 11,114 | 11,460 | 44,272 | 47,023 | |||||||||||
INTEREST EXPENSE | |||||||||||||||
Interest on deposits | 1,094 | 1,449 | 4,911 | 6,916 | |||||||||||
Interest on securities sold under agreements to repurchase | 82 | 82 | 325 | 332 | |||||||||||
Interest on short-term borrowings | 17 | 81 | 123 | 392 | |||||||||||
Interest on FHLB borrowings and other debt | 311 | 295 | 1,208 | 1,184 | |||||||||||
Total interest expense | 1,504 | 1,907 | 6,567 | 8,824 | |||||||||||
NET INTEREST INCOME | 9,610 | 9,553 | 37,705 | 38,199 | |||||||||||
Provision for loan losses | 110 | 1,281 | 109 | 3,438 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 9,500 | 8,272 | 37,596 | 34,761 | |||||||||||
NON-INTEREST INCOME | |||||||||||||||
Service charges on deposit accounts | 593 | 572 | 2,291 | 2,197 | |||||||||||
Trust services income | 1,033 | 923 | 3,970 | 3,751 | |||||||||||
Gains on loans held for sale | 3,114 | 5,926 | 15,652 | 21,014 | |||||||||||
Gains (losses) on securities available for sale, net | 22 | (7 | ) | 418 | 445 | ||||||||||
Total other-than-temporary impairment losses | — | — | — | (46 | ) | ||||||||||
Portion of loss recognized in other comprehensive income | — | — | — | 46 | |||||||||||
Net impairment losses | — | — | — | — | |||||||||||
Commissions on investment sales | 107 | 129 | 470 | 518 | |||||||||||
Fees on mortgages held for sale | — | 43 | 103 | 186 | |||||||||||
Bank owned life insurance | 104 | 96 | 472 | 459 | |||||||||||
Other operating income | 430 | 299 | 1,163 | 884 | |||||||||||
Total non-interest income | 5,403 | 7,981 | 24,539 | 29,454 | |||||||||||
NON-INTEREST EXPENSE | |||||||||||||||
Salaries and employee benefits | 7,385 | 8,278 | 30,627 | 30,417 | |||||||||||
Net occupancy and equipment expense | 1,857 | 1,785 | 7,269 | 7,050 | |||||||||||
Advertising | 436 | 635 | 1,457 | 2,034 | |||||||||||
Computer operations | 485 | 471 | 1,860 | 1,572 | |||||||||||
Other real estate owned | 79 | 55 | 1,455 | 2,721 | |||||||||||
Other taxes | 186 | 202 | 751 | 813 | |||||||||||
Federal deposit insurance expense | 139 | 269 | 822 | 1,050 | |||||||||||
Other operating expenses | 2,635 | 2,103 | 9,300 | 8,602 | |||||||||||
Total non-interest expense | 13,202 | 13,798 | 53,541 | 54,259 | |||||||||||
Income before income taxes | 1,701 | 2,455 | 8,594 | 9,956 | |||||||||||
Income tax expense | 436 | 387 | 2,064 | 1,966 | |||||||||||
NET INCOME | 1,265 | 2,068 | 6,530 | 7,990 | |||||||||||
Net (income) loss attributable to non-controlling interest | 224 | (647 | ) | (9 | ) | (1,504 | ) | ||||||||
Net income attributable to Middleburg Financial Corporation | $ | 1,489 | $ | 1,421 | $ | 6,521 | $ | 6,486 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.20 | $ | 0.92 | $ | 0.92 | |||||||
Diluted | $ | 0.21 | $ | 0.20 | $ | 0.92 | $ | 0.92 | |||||||
Dividends per common share | $ | 0.07 | $ | 0.05 | $ | 0.24 | $ | 0.20 | |||||||
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MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||||||||
Quarterly Summary Statements of Income | |||||||||||||||||||
(In thousands, except for per share data) | |||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | |||||||||||||||
INTEREST AND DIVIDEND INCOME | |||||||||||||||||||
Interest and fees on loans | $ | 8,744 | $ | 8,744 | $ | 8,795 | $ | 8,965 | $ | 9,330 | |||||||||
Interest and dividends on securities available for sale | |||||||||||||||||||
Taxable | 1,638 | 1,468 | 1,468 | 1,531 | 1,432 | ||||||||||||||
Tax-exempt | 638 | 640 | 646 | 630 | 604 | ||||||||||||||
Dividends | 63 | 59 | 54 | 56 | 58 | ||||||||||||||
Interest on deposits in banks and federal funds sold | 31 | 43 | 29 | 30 | 36 | ||||||||||||||
Total interest and dividend income | 11,114 | 10,954 | 10,992 | 11,212 | 11,460 | ||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||
Interest on deposits | 1,094 | 1,190 | 1,253 | 1,373 | 1,449 | ||||||||||||||
Interest on securities sold under agreements to repurchase | 82 | 82 | 81 | 80 | 82 | ||||||||||||||
Interest on short-term borrowings | 17 | 59 | 18 | 29 | 81 | ||||||||||||||
Interest on FHLB borrowings and other debt | 311 | 303 | 299 | 295 | 295 | ||||||||||||||
Total interest expense | 1,504 | 1,634 | 1,651 | 1,777 | 1,907 | ||||||||||||||
NET INTEREST INCOME | 9,610 | 9,320 | 9,341 | 9,435 | 9,553 | ||||||||||||||
Provision for (recovery of) loan losses | 110 | 3 | 184 | (188 | ) | 1,281 | |||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES | 9,500 | 9,317 | 9,157 | 9,623 | 8,272 | ||||||||||||||
NON-INTEREST INCOME | |||||||||||||||||||
Service charges on deposit accounts | 593 | 590 | 574 | 534 | 572 | ||||||||||||||
Trust services income | 1,033 | 963 | 1,014 | 960 | 923 | ||||||||||||||
Gains on loans held for sale | 3,114 | 4,162 | 4,483 | 3,893 | 5,926 | ||||||||||||||
Gains (losses) on securities available for sale, net | 22 | 23 | 326 | 47 | (7 | ) | |||||||||||||
Commissions on investment sales | 107 | 159 | 110 | 94 | 129 | ||||||||||||||
Fees on mortgages held for sale | — | 28 | 58 | 17 | 43 | ||||||||||||||
Bank owned life insurance | 104 | 125 | 123 | 120 | 96 | ||||||||||||||
Other operating income | 430 | 78 | 392 | 263 | 299 | ||||||||||||||
Total non-interest income | 5,403 | 6,128 | 7,080 | 5,928 | 7,981 | ||||||||||||||
NON-INTEREST EXPENSE | |||||||||||||||||||
Salaries and employee benefits | 7,385 | 7,750 | 7,692 | 7,799 | 8,278 | ||||||||||||||
Net occupancy and equipment expense | 1,857 | 1,820 | 1,787 | 1,805 | 1,785 | ||||||||||||||
Advertising | 436 | 318 | 435 | 268 | 635 | ||||||||||||||
Computer operations | 485 | 456 | 458 | 461 | 471 | ||||||||||||||
Other real estate owned | 79 | 416 | 142 | 820 | 55 | ||||||||||||||
Other taxes | 186 | 186 | 187 | 192 | 202 | ||||||||||||||
Federal deposit insurance expense | 139 | 149 | 270 | 265 | 269 | ||||||||||||||
Other operating expenses | 2,635 | 2,210 | 2,137 | 2,318 | 2,103 | ||||||||||||||
Total non-interest expense | 13,202 | 13,305 | 13,108 | 13,928 | 13,798 | ||||||||||||||
Income before income taxes | 1,701 | 2,140 | 3,129 | 1,623 | 2,455 | ||||||||||||||
Income tax expense | 436 | 491 | 774 | 363 | 387 | ||||||||||||||
NET INCOME | 1,265 | 1,649 | 2,355 | 1,260 | 2,068 | ||||||||||||||
Net (income) loss attributable to non-controlling interest | 224 | (38 | ) | (262 | ) | 67 | (647 | ) | |||||||||||
Net income attributable to Middleburg Financial Corporation | $ | 1,489 | $ | 1,611 | $ | 2,093 | $ | 1,327 | $ | 1,421 | |||||||||
Page 9
MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||||||||
Key Statistics | |||||||||||||||||||
(Unaudited, Dollars in thousands, except for per share data) | |||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | |||||||||||||||
Net Income | $ | 1,489 | $ | 1,611 | $ | 2,093 | $ | 1,327 | $ | 1,421 | |||||||||
Earnings per share, basic | $ | 0.21 | $ | 0.23 | $ | 0.30 | $ | 0.19 | $ | 0.20 | |||||||||
Earnings per share, diluted | $ | 0.21 | $ | 0.23 | $ | 0.29 | $ | 0.19 | $ | 0.20 | |||||||||
Dividend per share | $ | 0.07 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.05 | |||||||||
Return on average total assets - QTD | 0.48 | % | 0.52 | % | 0.69 | % | 0.44 | % | 0.46 | % | |||||||||
Return on average total equity - QTD | 5.20 | % | 5.71 | % | 7.25 | % | 4.71 | % | 4.96 | % | |||||||||
Dividend payout ratio | 33.32 | % | 30.43 | % | 16.88 | % | 26.57 | % | 24.82 | % | |||||||||
Non-interest revenue to total revenue (1) | 35.89 | % | 39.58 | % | 41.96 | % | 38.40 | % | 45.54 | % | |||||||||
Net interest margin (2) | 3.43 | % | 3.33 | % | 3.40 | % | 3.45 | % | 3.42 | % | |||||||||
Yield on average earning assets | 3.94 | % | 3.89 | % | 3.97 | % | 4.08 | % | 4.08 | % | |||||||||
Cost of average interest-bearing liabilities | 0.66 | % | 0.71 | % | 0.72 | % | 0.78 | % | 0.82 | % | |||||||||
Net interest spread | 3.28 | % | 3.18 | % | 3.25 | % | 3.30 | % | 3.26 | % | |||||||||
Non-interest income to average assets (3) | 1.76 | % | 2.00 | % | 2.23 | % | 1.93 | % | 2.62 | % | |||||||||
Non-interest expense to average assets (3) | 4.33 | % | 4.33 | % | 4.34 | % | 4.57 | % | 4.53 | % | |||||||||
Efficiency ratio - QTD (Tax Equivalent) (4) | 85.06 | % | 81.19 | % | 78.35 | % | 80.96 | % | 76.51 | % | |||||||||
(1) | Excludes securities gains and losses. |
(2) | The net interest margin is calculated by dividing tax equivalent net interest income by total average earning assets. Tax equivalent net interest income is calculated by grossing up interest income for the amounts that are non-taxable (i.e., municipal income) then subtracting interest expense. The tax rate utilized is 34%. The Company’s net interest margin is a common measure used by the financial service industry to determine how profitably earning assets are funded. Because the Company earns non-taxable interest income due to the mix in its investment and loan portfolios, net interest income for the ratio is calculated on a tax equivalent basis as described above. This calculation excludes net securities gains and losses. |
(3) | Ratios are computed by dividing annualized income and expense amounts by quarterly average assets. Excludes securities gains and losses. |
(4) | The efficiency ratio is not a measurement under accounting principles generally accepted in the United States. It is calculated by dividing non-interest expense (adjusted for amortization of intangibles, other real estate expenses, and non-recurring one-time charges) by the sum of tax equivalent net interest income and non-interest income excluding gains and losses on the investment portfolio. The tax rate utilized in calculating tax equivalent amounts is 34%. The Company calculates and reviews this ratio as a means of evaluating operational efficiency. |
Page 10
MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||||||||
Selected Financial Data by Quarter | |||||||||||||||||||
(Unaudited, Dollars in thousands, except for per share data) | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | |||||||||||||||
BALANCE SHEET RATIOS | |||||||||||||||||||
Loans to deposits (including HFS) | 77.53 | % | 79.07 | % | 80.29 | % | 79.01 | % | 80.62 | % | |||||||||
Portfolio loans to deposits | 74.15 | % | 74.71 | % | 73.50 | % | 73.97 | % | 72.26 | % | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 126.87 | % | 126.23 | % | 125.09 | % | 123.60 | % | 124.17 | % | |||||||||
PER SHARE DATA | |||||||||||||||||||
Dividends | $ | 0.07 | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.05 | |||||||||
Book value (MFC Shareholders) | 15.95 | 15.86 | 15.93 | 16.28 | 16.15 | ||||||||||||||
Tangible book value (3) | 15.13 | 15.03 | 15.09 | 15.41 | 15.30 | ||||||||||||||
SHARE PRICE DATA | |||||||||||||||||||
Closing price | $ | 18.04 | $ | 19.28 | $ | 19.10 | $ | 19.41 | $ | 17.66 | |||||||||
Diluted earnings multiple (1) | 19.61 | 20.96 | 16.47 | 25.54 | 22.08 | ||||||||||||||
Book value multiple (2) | 1.11 | 1.21 | 1.20 | 1.19 | 1.09 | ||||||||||||||
COMMON STOCK DATA | |||||||||||||||||||
Outstanding shares at end of period | 7,080,591 | 7,089,091 | 7,089,598 | 7,051,587 | 7,052,554 | ||||||||||||||
Weighted average shares O/S , basic - QTD | 7,096,260 | 7,080,244 | 7,072,587 | 7,051,009 | 7,052,554 | ||||||||||||||
Weighted average shares O/S, diluted - QTD | 7,130,272 | 7,118,208 | 7,102,670 | 7,082,354 | 7,069,603 | ||||||||||||||
CAPITAL RATIOS | |||||||||||||||||||
Capital to assets - common shareholders | 9.20 | % | 9.25 | % | 9.28 | % | 9.46 | % | 9.21 | % | |||||||||
Capital to assets - w/non-controlling interest | 9.40 | % | 9.48 | % | 9.50 | % | 9.70 | % | 9.47 | % | |||||||||
Tangible common equity ratio (4) | 8.76 | % | 8.81 | % | 8.83 | % | 9.01 | % | 8.77 | % | |||||||||
Leverage ratio | 9.42 | % | 9.36 | % | 9.32 | % | 9.11 | % | 9.10 | % | |||||||||
Tier 1 risk based capital ratio | 14.62 | % | 14.58 | % | 14.15 | % | 14.35 | % | 14.09 | % | |||||||||
Total risk based capital ratio | 15.88 | % | 15.83 | % | 15.41 | % | 15.60 | % | 15.35 | % | |||||||||
CREDIT QUALITY | |||||||||||||||||||
Net charge-offs to average total loans | 0.02 | % | 0.03 | % | 0.01 | % | 0.08 | % | 0.12 | % | |||||||||
Total non-performing loans to total portfolio loans | 3.46 | % | 3.63 | % | 3.76 | % | 3.59 | % | 3.92 | % | |||||||||
Total non-performing assets to total assets | 2.33 | % | 2.51 | % | 2.80 | % | 2.77 | % | 3.05 | % | |||||||||
Non-accrual loans to: | |||||||||||||||||||
total portfolio loans | 2.71 | % | 2.87 | % | 2.88 | % | 2.80 | % | 3.05 | % | |||||||||
total assets | 1.61 | % | 1.69 | % | 1.67 | % | 1.65 | % | 1.75 | % | |||||||||
Allowance for loan losses to: | |||||||||||||||||||
total portfolio loans | 1.83 | % | 1.87 | % | 1.93 | % | 1.89 | % | 2.02 | % | |||||||||
non-performing assets | 46.48 | % | 43.86 | % | 39.88 | % | 40.22 | % | 37.89 | % | |||||||||
non-accrual loans | 67.44 | % | 65.20 | % | 66.82 | % | 67.48 | % | 66.06 | % | |||||||||
NON-PERFORMING ASSETS | |||||||||||||||||||
Loans delinquent 90+ days and still accruing | $ | 808 | $ | 636 | $ | 829 | $ | 812 | $ | 1,044 | |||||||||
Non-accrual loans | 19,752 | 20,525 | 20,376 | 20,019 | 21,664 | ||||||||||||||
Restructured loans (not in non-accrual) | 4,674 | 4,820 | 5,366 | 4,854 | 5,132 | ||||||||||||||
OREO and repossessed assets | 3,424 | 4,530 | 7,570 | 7,904 | 9,929 | ||||||||||||||
Total non-performing assets | $ | 28,658 | $ | 30,511 | $ | 34,141 | $ | 33,589 | $ | 37,769 | |||||||||
ALLOWANCE FOR LOAN LOSS SUMMARY | |||||||||||||||||||
Balance at the beginning of the period | $ | 13,382 | $ | 13,616 | $ | 13,508 | $ | 14,311 | $ | 13,941 | |||||||||
Loans charged off - QTD | 241 | 291 | 128 | 721 | 1,060 | ||||||||||||||
Recoveries - QTD | (69 | ) | (54 | ) | (52 | ) | (106 | ) | (149 | ) | |||||||||
Net charge-off loans - QTD | 172 | 237 | 76 | 615 | 911 | ||||||||||||||
Provision for (recovery of) loan losses | 110 | 3 | 184 | (188 | ) | 1,281 | |||||||||||||
Balance at the end of the period | $ | 13,320 | $ | 13,382 | $ | 13,616 | $ | 13,508 | $ | 14,311 | |||||||||
Page 11
(1) | The diluted earnings multiple is calculated by dividing the period’s closing market price per share by the annualized diluted earnings per share for the period. The diluted earnings multiple is a measure of how much an investor may be willing to pay for $1.00 of the Company’s earnings. |
(2) | The book value multiple (or price to book ratio) is calculated by dividing the period’s closing market price per share by the period’s book value per share. The book value multiple is a measure used to compare the Company’s market value per share to its book value per share. |
(3) | Tangible book value is not a measurement under accounting principles generally accepted in the United States. It is computed by subtracting identified intangible assets and goodwill from total Middleburg Financial Corporation shareholders’ equity and then dividing the result by the number of shares of common stock issued and outstanding at the end of the accounting period. |
(4) | The tangible common equity ratio is not a measurement under accounting principles generally accepted in the United States. It is computed by subtracting identified intangible assets and goodwill from total Middleburg Financial Corporation shareholders’ equity and total assets and then dividing the adjusted shareholders’ equity balance by the adjusted total asset balance. |
Page 12
MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||||||||||
Average Balances, Income and Expenses, Yields and Rates | |||||||||||||||||||||
For the Three Months Ended December 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Average Balance | Income/Expense | Yield/Rate (2) | Average Balance | Income/Expense | Yield/Rate (2) | ||||||||||||||||
ASSETS | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 275,208 | $ | 1,701 | 2.45 | % | $ | 260,039 | $ | 1,490 | 2.28 | % | |||||||||
Tax-exempt (1) | 64,315 | 966 | 5.96 | % | 63,839 | 915 | 5.70 | % | |||||||||||||
Total securities | $ | 339,523 | $ | 2,667 | 3.12 | % | $ | 323,878 | $ | 2,405 | 2.95 | % | |||||||||
Loans: | |||||||||||||||||||||
Taxable | $ | 759,513 | $ | 8,738 | 4.56 | % | $ | 767,248 | $ | 9,325 | 4.84 | % | |||||||||
Tax-exempt (1) | 655 | 9 | 5.45 | % | 537 | 8 | 5.93 | % | |||||||||||||
Total loans (3) | $ | 760,168 | $ | 8,747 | 4.57 | % | $ | 767,785 | $ | 9,333 | 4.84 | % | |||||||||
Interest-bearing deposits with other institutions | 51,671 | 31 | 0.24 | % | 56,262 | 36 | 0.25 | % | |||||||||||||
Total earning assets | $ | 1,151,362 | $ | 11,445 | 3.94 | % | $ | 1,147,925 | $ | 11,774 | 4.08 | % | |||||||||
Less: allowance for loan losses | (13,267 | ) | (14,112 | ) | |||||||||||||||||
Total non-earning assets | 81,162 | 84,132 | |||||||||||||||||||
Total assets | $ | 1,219,257 | $ | 1,217,945 | |||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
Checking | $ | 329,590 | $ | 195 | 0.23 | % | $ | 335,174 | $ | 255 | 0.30 | % | |||||||||
Regular savings | 110,443 | 58 | 0.21 | % | 105,625 | 60 | 0.23 | % | |||||||||||||
Money market savings | 76,197 | 40 | 0.21 | % | 72,503 | 48 | 0.26 | % | |||||||||||||
Time deposits: | |||||||||||||||||||||
$100,000 and over | 132,994 | 345 | 1.03 | % | 147,214 | 533 | 1.44 | % | |||||||||||||
Under $100,000 | 134,773 | 456 | 1.34 | % | 142,305 | 553 | 1.55 | % | |||||||||||||
Total interest-bearing deposits | $ | 783,997 | $ | 1,094 | 0.55 | % | $ | 802,821 | $ | 1,449 | 0.72 | % | |||||||||
Short-term borrowings | 2,022 | 16 | 3.14 | % | 7,326 | 81 | 4.40 | % | |||||||||||||
Securities sold under agreements to repurchase | 36,227 | 82 | 0.90 | % | 34,563 | 82 | 0.94 | % | |||||||||||||
FHLB borrowings and subordinated debt | 85,264 | 312 | 1.45 | % | 79,752 | 295 | 1.47 | % | |||||||||||||
Total interest-bearing liabilities | $ | 907,510 | $ | 1,504 | 0.66 | % | $ | 924,462 | $ | 1,907 | 0.82 | % | |||||||||
Non-interest bearing liabilities | |||||||||||||||||||||
Demand deposits | 185,409 | 169,313 | |||||||||||||||||||
Other liabilities | 10,023 | 6,341 | |||||||||||||||||||
Total liabilities | $ | 1,102,942 | $ | 1,100,116 | |||||||||||||||||
Non-controlling interest | 2,649 | 3,792 | |||||||||||||||||||
Shareholders' equity | 113,666 | 114,037 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,219,257 | $ | 1,217,945 | |||||||||||||||||
Net interest income (1) | $ | 9,941 | $ | 9,867 | |||||||||||||||||
Interest rate spread | 3.28 | % | 3.26 | % | |||||||||||||||||
Cost of funds | 0.55 | % | 0.69 | % | |||||||||||||||||
Interest expense as a percent of average earning assets | 0.52 | % | 0.66 | % | |||||||||||||||||
Net interest margin | 3.43 | % | 3.42 | % | |||||||||||||||||
(1) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%.
(2) All yields and rates have been annualized on a 365 day year for 2013 and a 366 day year for 2012.
(3) Total average loans include loans on non-accrual status.
Page 13
MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||||||||||
Average Balances, Income and Expenses, Yields and Rates | |||||||||||||||||||||
For the Twelve Months Ended December 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Average Balance | Income/Expense | Yield/Rate (2) | Average Balance | Income/Expense | Yield/Rate (2) | ||||||||||||||||
ASSETS | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 268,954 | $ | 6,337 | 2.36 | % | $ | 262,991 | $ | 6,601 | 2.51 | % | |||||||||
Tax-exempt (1) | 66,396 | 3,870 | 5.83 | % | 62,363 | 3,642 | 5.84 | % | |||||||||||||
Total securities | $ | 335,350 | $ | 10,207 | 3.04 | % | $ | 325,354 | $ | 10,243 | 3.15 | % | |||||||||
Loans: | |||||||||||||||||||||
Taxable | $ | 755,913 | $ | 35,224 | 4.66 | % | $ | 755,790 | $ | 37,890 | 5.01 | % | |||||||||
Tax-exempt (1) | 679 | 37 | 5.45 | % | 135 | 8 | 5.93 | % | |||||||||||||
Total loans (3) | $ | 756,592 | $ | 35,261 | 4.66 | % | $ | 755,925 | $ | 37,898 | 5.01 | % | |||||||||
Interest-bearing deposits with other institutions | 56,436 | 132 | 0.23 | % | 54,237 | 124 | 0.23 | % | |||||||||||||
Total earning assets | $ | 1,148,378 | $ | 45,600 | 3.97 | % | $ | 1,135,516 | $ | 48,265 | 4.25 | % | |||||||||
Less: allowance for loan losses | (13,643 | ) | (14,830 | ) | |||||||||||||||||
Total non-earning assets | 80,856 | 84,279 | |||||||||||||||||||
Total assets | $ | 1,215,591 | $ | 1,204,965 | |||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
Checking | $ | 324,171 | $ | 852 | 0.26 | % | $ | 322,715 | $ | 1,271 | 0.39 | % | |||||||||
Regular savings | 110,210 | 243 | 0.22 | % | 105,768 | 350 | 0.33 | % | |||||||||||||
Money market savings | 75,899 | 171 | 0.23 | % | 64,517 | 204 | 0.32 | % | |||||||||||||
Time deposits: | |||||||||||||||||||||
$100,000 and over | 139,018 | 1,671 | 1.20 | % | 143,687 | 2,200 | 1.53 | % | |||||||||||||
Under $100,000 | 140,230 | 1,974 | 1.41 | % | 165,703 | 2,891 | 1.74 | % | |||||||||||||
Total interest-bearing deposits | $ | 789,528 | $ | 4,911 | 0.62 | % | $ | 802,390 | $ | 6,916 | 0.86 | % | |||||||||
Short-term borrowings | 3,565 | 123 | 3.45 | % | 8,725 | 392 | 4.49 | % | |||||||||||||
Securities sold under agreements to repurchase | 35,536 | 325 | 0.91 | % | 34,177 | 332 | 0.97 | % | |||||||||||||
FHLB borrowings and subordinated debt | 86,767 | 1,208 | 1.39 | % | 83,655 | 1,184 | 1.42 | % | |||||||||||||
Total interest-bearing liabilities | $ | 915,396 | $ | 6,567 | 0.72 | % | $ | 928,947 | $ | 8,824 | 0.95 | % | |||||||||
Non-interest bearing liabilities | |||||||||||||||||||||
Demand deposits | 175,942 | 156,057 | |||||||||||||||||||
Other liabilities | 7,357 | 6,503 | |||||||||||||||||||
Total liabilities | $ | 1,098,695 | $ | 1,091,507 | |||||||||||||||||
Non-controlling interest | 2,824 | 2,828 | |||||||||||||||||||
Shareholders' equity | 114,072 | 110,630 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,215,591 | $ | 1,204,965 | |||||||||||||||||
Net interest income (1) | $ | 39,033 | $ | 39,441 | |||||||||||||||||
Interest rate spread | 3.25 | % | 3.30 | % | |||||||||||||||||
Cost of funds | 0.60 | % | 0.81 | % | |||||||||||||||||
Interest expense as a percent of average earning assets | 0.57 | % | 0.78 | % | |||||||||||||||||
Net interest margin | 3.40 | % | 3.47 | % | |||||||||||||||||
(1) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%.
(2) All yields and rates have been annualized on a 365 day year for 2013 and a 366 day year for 2012.
(3) Total average loans include loans on non-accrual status.
Page 14