Attached files
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| 8-K - FORM 8-K - FIRST COMMUNITY BANKSHARES INC /VA/ | fcbc20171024_8k.htm |
Exhibit 99.1
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NEWS RELEASE |
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FOR IMMEDIATE RELEASE: |
FOR MORE INFORMATION, CONTACT: |
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October 24, 2017 |
David D. Brown |
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(276) 326-9000 |
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First Community Bancshares, Inc. Announces Third Quarter 2017 Results
and Quarterly Dividend
Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.firstcommunitybank.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and nine months ended September 30, 2017. The Company reported net income available to common shareholders of $7.65 million, or $0.45 per diluted common share for the quarter ended September 30, 2017, which represents a 21.62% increase in per share diluted earnings compared to the same quarter of 2016. Net income available to common shareholders was $20.27 million, or $1.19 per diluted common share for the nine months ended September 30, 2017, which represents an 11.21% increase in per share diluted earnings compared to the same period of 2016.
The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of eighteen cents ($0.18) per common share. The quarterly dividend is payable to common shareholders of record on November 3, 2017, and is expected to be paid on or about November 17, 2017. The current year marks the 32nd consecutive year of cash dividends paid to stockholders.
Third Quarter 2017 Highlights
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● |
Income Statement |
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Net income available to common shareholders increased $1.27 million, or 19.88%, to $7.65 million compared to the same quarter of 2016. |
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Return on average assets increased 26 basis points to 1.29% and return on average common equity increased 103 basis points to 8.61% compared to the same quarter of 2016. |
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The non-GAAP efficiency ratio improved to 54.68% compared to 62.45% in the same quarter of 2016. |
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Diluted earnings per share increased $0.08, or 21.62%, to $0.45 compared to the same quarter of 2016. |
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Net interest margin increased 30 basis points to 4.25%, and normalized net interest margin increased 23 basis points to 4.00% compared to the same quarter of 2016. |
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Balance Sheet |
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Net charge-offs decreased $456 thousand, or 33.68%, to $898 thousand for the nine months ended September 30, 2017, compared to the same period of 2016. |
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Book value per common share increased $0.81 to $20.76 compared to December 31, 2016. |
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Tangible book value per common share increased $0.85 to $14.74 compared to December 31, 2016. |
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The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of September 30, 2017. |
Non-GAAP Financial Measures
The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measures presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. Management believes that the efficiency ratio provides important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.
About First Community Bancshares, Inc.
First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 44 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2017. First Community Bank provides insurance services through First Community Insurance Services, which operates 6 in-branch locations in Virginia and West Virginia and offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed $936 million in combined assets as of September 30, 2017. The Company reported consolidated assets of $2.37 billion as of September 30, 2017. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website at www.fcbinc.com.
This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Financial Performance
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
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(Amounts in thousands, except share and per share data) |
2017 |
2017 |
2017 |
2016 |
2016 |
2017 |
2016 |
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Interest income |
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Interest and fees on loans |
$ | 22,694 | $ | 22,914 | $ | 21,827 | $ | 21,956 | $ | 21,952 | $ | 67,435 | $ | 65,762 | ||||||||||||||
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Interest on securities |
1,080 | 1,170 | 1,206 | 1,362 | 1,643 | 3,456 | 5,491 | |||||||||||||||||||||
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Interest on deposits in banks |
275 | 221 | 159 | 98 | 26 | 655 | 55 | |||||||||||||||||||||
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Total interest income |
24,049 | 24,305 | 23,192 | 23,416 | 23,621 | 71,546 | 71,308 | |||||||||||||||||||||
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Interest expense |
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Interest on deposits |
1,275 | 1,233 | 1,166 | 1,145 | 1,133 | 3,674 | 3,334 | |||||||||||||||||||||
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Interest on borrowings |
724 | 778 | 885 | 1,314 | 1,367 | 2,387 | 4,051 | |||||||||||||||||||||
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Total interest expense |
1,999 | 2,011 | 2,051 | 2,459 | 2,500 | 6,061 | 7,385 | |||||||||||||||||||||
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Net interest income |
22,050 | 22,294 | 21,141 | 20,957 | 21,121 | 65,485 | 63,923 | |||||||||||||||||||||
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Provision for (recovery of) loan losses |
730 | 934 | 492 | 500 | (1,154 | ) | 2,156 | 755 | ||||||||||||||||||||
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Net interest income after provision (recovery) |
21,320 | 21,360 | 20,649 | 20,457 | 22,275 | 63,329 | 63,168 | |||||||||||||||||||||
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Total noninterest income |
7,135 | 5,475 | 5,691 | 6,238 | 5,895 | 18,301 | 20,828 | |||||||||||||||||||||
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Total noninterest expense |
16,909 | 17,458 | 17,083 | 16,653 | 18,557 | 51,450 | 56,093 | |||||||||||||||||||||
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Income before income taxes |
11,546 | 9,377 | 9,257 | 10,042 | 9,613 | 30,180 | 27,903 | |||||||||||||||||||||
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Income tax expense |
3,894 | 2,959 | 3,055 | 3,638 | 3,230 | 9,908 | 9,181 | |||||||||||||||||||||
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Net income available to common shareholders |
$ | 7,652 | $ | 6,418 | $ | 6,202 | $ | 6,404 | $ | 6,383 | $ | 20,272 | $ | 18,722 | ||||||||||||||
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Earnings per common share |
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Basic |
$ | 0.45 | $ | 0.38 | $ | 0.36 | $ | 0.38 | $ | 0.37 | $ | 1.19 | $ | 1.07 | ||||||||||||||
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Diluted |
0.45 | 0.38 | 0.36 | 0.38 | 0.37 | 1.19 | 1.07 | |||||||||||||||||||||
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Cash dividends per common share |
0.18 | 0.16 | 0.16 | 0.16 | 0.16 | 0.50 | 0.44 | |||||||||||||||||||||
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Weighted average shares outstanding |
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Basic |
17,005,654 | 16,998,125 | 16,998,125 | 16,891,010 | 17,031,074 | 17,005,350 | 17,433,406 | |||||||||||||||||||||
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Diluted |
17,082,729 | 17,072,174 | 17,072,174 | 17,043,869 | 17,083,526 | 17,076,958 | 17,475,211 | |||||||||||||||||||||
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Performance ratios |
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Return on average assets |
1.29 | % | 1.08 | % | 1.06 | % | 1.05 | % | 1.03 | % | 1.14 | % | 1.01 | % | ||||||||||||||
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Return on average common equity |
8.61 | % | 7.41 | % | 7.35 | % | 7.49 | % | 7.58 | % | 7.80 | % | 7.40 | % | ||||||||||||||
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Return on average tangible common equity(1) |
12.13 | % | 10.51 | % | 10.50 | % | 10.75 | % | 11.07 | % | 11.06 | % | 10.76 |
% |
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(1) |
A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference |
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RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
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2017 |
2017 |
2017 |
2016 |
2016 |
2017 |
2016 |
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(Amounts in thousands, except per share data) |
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Net income, GAAP |
$ | 7,652 | $ | 6,418 | $ | 6,202 | $ | 6,404 | $ | 6,383 | $ | 20,272 | $ | 18,722 | ||||||||||||||
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Non-GAAP adjustments: |
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Net gain on divestitures |
- | - | - | (619 | ) | (3,065 | ) | - | (3,065 | ) | ||||||||||||||||||
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Allowance reversal for sold loans |
- | - | - | - | (1,354 | ) | - | (1,354 | ) | |||||||||||||||||||
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Merger, acquisition, and divestiture expense |
- | - | - | 55 | 226 | - | 675 | |||||||||||||||||||||
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Net loss (gain) on sale of securities |
- | 657 | - | (388 | ) | (25 | ) | 657 | 53 | |||||||||||||||||||
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Net impairment losses |
- | - | - | - | 4,635 | - | 4,646 | |||||||||||||||||||||
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Other non-core items |
34 | (174 | ) | (18 | ) | (48 | ) | (264 | ) | (158 | ) | (504 | ) | |||||||||||||||
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Total adjustments to core earnings |
34 | 483 | (18 | ) | (1,000 | ) | 153 | 499 | 451 | |||||||||||||||||||
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Tax effect |
12 | 345 | (7 | ) | (708 | ) | 56 | 350 | 166 | |||||||||||||||||||
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Core earnings, non-GAAP(1) |
$ | 7,674 | $ | 6,556 | $ | 6,191 | $ | 6,112 | $ | 6,480 | $ | 20,421 | $ | 19,007 | ||||||||||||||
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Core diluted earnings per common share |
$ | 0.45 | $ | 0.38 | $ | 0.36 | $ | 0.36 | $ | 0.38 | $ | 1.19 | $ | 1.09 | ||||||||||||||
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Performance ratios |
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Core return on average assets |
1.29 | % | 1.11 | % | 1.06 | % | 1.01 | % | 1.05 | % | 1.15 | % | 1.03 | % | ||||||||||||||
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Core return on average common equity |
8.63 | % | 7.57 | % | 7.33 | % | 7.15 | % | 7.70 | % | 7.86 | % | 7.51 | % | ||||||||||||||
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Core return on average tangible common equity(2) |
12.16 | % | 10.74 | % | 10.48 | % | 10.26 | % | 11.24 | % | 11.14 | % | 10.92 | % | ||||||||||||||
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(1) |
Excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income |
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(2) |
A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference |
Net Interest Income and Margin
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AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited) |
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Three Months Ended September 30, |
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2017 |
2016 |
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Average |
Average Yield/ |
Average |
Average Yield/ |
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(Amounts in thousands) |
Balance |
Interest(1) |
Rate(1) |
Balance |
Interest(1) |
Rate(1) |
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Assets |
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Earning assets |
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Loans(2) |
$ | 1,843,612 | $ | 22,765 | 4.90 | % | $ | 1,820,899 | $ | 21,974 | 4.80 | % | ||||||||||||
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Securities available for sale |
157,038 | 1,373 | 3.47 | % | 266,162 | 1,941 | 2.90 | % | ||||||||||||||||
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Securities held to maturity |
25,199 | 106 | 1.67 | % | 72,210 | 189 | 1.04 | % | ||||||||||||||||
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Interest-bearing deposits |
73,802 | 275 | 1.48 | % | 19,025 | 26 | 0.54 | % | ||||||||||||||||
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Total earning assets |
2,099,651 | 24,519 | 4.63 | % | 2,178,296 | 24,130 | 4.41 | % | ||||||||||||||||
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Other assets |
258,763 | 282,310 | ||||||||||||||||||||||
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Total assets |
$ | 2,358,414 | $ | 2,460,606 | ||||||||||||||||||||
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Liabilities and stockholders' equity |
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Interest-bearing deposits |
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Demand deposits |
$ | 384,594 | $ | 89 | 0.09 | % | $ | 337,893 | $ | 60 | 0.07 | % | ||||||||||||
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Savings deposits |
518,355 | 43 | 0.03 | % | 523,503 | 62 | 0.05 | % | ||||||||||||||||
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Time deposits |
509,251 | 1,143 | 0.89 | % | 529,344 | 1,011 | 0.76 | % | ||||||||||||||||
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Total interest-bearing deposits |
1,412,200 | 1,275 | 0.36 | % | 1,390,740 | 1,133 | 0.32 | % | ||||||||||||||||
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Borrowings |
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Federal funds purchased |
- | - | - | 3,696 | 6 | 0.65 | % | |||||||||||||||||
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Retail repurchase agreements |
58,194 | 10 | 0.07 | % | 64,385 | 12 | 0.07 | % | ||||||||||||||||
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Wholesale repurchase agreements |
25,000 | 203 | 3.22 | % | 50,000 | 473 | 3.76 | % | ||||||||||||||||
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FHLB advances and other borrowings |
50,000 | 511 | 4.05 | % | 133,838 | 876 | 2.60 | % | ||||||||||||||||
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Total borrowings |
133,194 | 724 | 2.16 | % | 251,919 | 1,367 | 2.16 | % | ||||||||||||||||
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Total interest-bearing liabilities |
1,545,394 | 1,999 | 0.51 | % | 1,642,659 | 2,500 | 0.61 | % | ||||||||||||||||
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Noninterest-bearing demand deposits |
440,227 | 462,588 | ||||||||||||||||||||||
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Other liabilities |
20,101 | 20,462 | ||||||||||||||||||||||
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Total liabilities |
2,005,722 | 2,125,709 | ||||||||||||||||||||||
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Stockholders' equity |
352,692 | 334,897 | ||||||||||||||||||||||
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Total liabilities and stockholders' equity |
$ | 2,358,414 | $ | 2,460,606 | ||||||||||||||||||||
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Net interest income, FTE |
$ | 22,520 | $ | 21,630 | ||||||||||||||||||||
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Net interest rate spread |
4.12 | % | 3.80 | % | ||||||||||||||||||||
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Net interest margin |
4.25 | % | 3.95 | % | ||||||||||||||||||||
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(1) |
Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35% |
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(2) |
Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual. |
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AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited) |
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Nine Months Ended September 30, |
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2017 |
2016 |
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Average |
Average Yield/ |
Average |
Average Yield/ |
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(Amounts in thousands) |
Balance |
Interest(1) |
Rate(1) |
Balance |
Interest(1) |
Rate(1) |
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Assets |
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Earning assets |
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Loans(2) |
$ | 1,841,981 | $ | 67,645 | 4.91 | % | $ | 1,775,744 | $ | 65,836 | 4.95 | % | ||||||||||||
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Securities available for sale |
162,198 | 4,312 | 3.55 | % | 318,891 | 6,403 | 2.68 | % | ||||||||||||||||
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Securities held to maturity |
35,578 | 382 | 1.44 | % | 72,350 | 575 | 1.06 | % | ||||||||||||||||
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Interest-bearing deposits |
66,069 | 655 | 1.33 | % | 13,288 | 55 | 0.55 | % | ||||||||||||||||
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Total earning assets |
2,105,826 | 72,994 | 4.63 | % | 2,180,273 | 72,869 | 4.47 | % | ||||||||||||||||
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Other assets |
264,333 | 287,784 | ||||||||||||||||||||||
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Total assets |
$ | 2,370,159 | $ | 2,468,057 | ||||||||||||||||||||
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Liabilities and stockholders' equity |
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Interest-bearing deposits |
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Demand deposits |
$ | 384,265 | $ | 301 | 0.10 | % | $ | 339,920 | $ | 177 | 0.07 | % | ||||||||||||
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Savings deposits |
523,219 | 114 | 0.03 | % | 533,799 | 191 | 0.05 | % | ||||||||||||||||
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Time deposits |
513,072 | 3,259 | 0.85 | % | 527,056 | 2,966 | 0.75 | % | ||||||||||||||||
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Total interest-bearing deposits |
1,420,556 | 3,674 | 0.35 | % | 1,400,775 | 3,334 | 0.32 | % | ||||||||||||||||
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Borrowings |
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Federal funds purchased |
2 | - | 0.00 | % | 5,393 | 26 | 0.64 | % | ||||||||||||||||
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Retail repurchase agreements |
61,951 | 31 | 0.07 | % | 69,347 | 37 | 0.07 | % | ||||||||||||||||
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Wholesale repurchase agreements |
25,000 | 602 | 3.22 | % | 50,000 | 1,410 | 3.77 | % | ||||||||||||||||
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FHLB advances and other borrowings |
57,357 | 1,754 | 4.09 | % | 124,803 | 2,578 | 2.76 | % | ||||||||||||||||
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Total borrowings |
144,310 | 2,387 | 2.21 | % | 249,543 | 4,051 | 2.17 | % | ||||||||||||||||
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Total interest-bearing liabilities |
1,564,866 | 6,061 | 0.52 | % | 1,650,318 | 7,385 | 0.60 | % | ||||||||||||||||
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Noninterest-bearing demand deposits |
435,825 | 457,250 | ||||||||||||||||||||||
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Other liabilities |
21,905 | 22,581 | ||||||||||||||||||||||
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Total liabilities |
2,022,596 | 2,130,149 | ||||||||||||||||||||||
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Stockholders' equity |
347,563 | 337,908 | ||||||||||||||||||||||
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Total liabilities and stockholders' equity |
$ | 2,370,159 | $ | 2,468,057 | ||||||||||||||||||||
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Net interest income, FTE |
$ | 66,933 | $ | 65,484 | ||||||||||||||||||||
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Net interest rate spread |
4.12 | % | 3.87 | % | ||||||||||||||||||||
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Net interest margin |
4.25 | % | 4.01 | % | ||||||||||||||||||||
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(1) |
Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35% |
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(2) |
Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual. |
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RECONCILIATION OF GAAP NET INTEREST MARGIN TO NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited) |
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Three Months Ended September 30, |
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2017 |
2016 |
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(Amounts in thousands) |
Interest(1) |
Average Yield/ Rate(1) |
Interest(1) |
Average Yield/ Rate(1) |
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Earning assets |
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Loans(2) |
$ | 22,765 | 4.90 | % | $ | 21,974 | 4.80 | % | ||||||||
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Accretion income |
1,925 | 1,683 | ||||||||||||||
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Less: cash accretion income |
548 | 699 | ||||||||||||||
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Non-cash accretion income |
1,377 | 984 | ||||||||||||||
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Loans, normalized(3) |
21,388 | 4.60 | % | 20,990 | 4.59 | % | ||||||||||
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Other earning assets |
1,754 | 2.72 | % | 2,156 | 2.40 | % | ||||||||||
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Total earning assets |
23,142 | 4.37 | % | 23,146 | 4.23 | % | ||||||||||
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Total interest-bearing liabilities |
1,999 | 0.51 | % | 2,500 | 0.61 | % | ||||||||||
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Net interest income, FTE(3) |
$ | 21,143 | $ | 20,646 | ||||||||||||
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Net interest rate spread, normalized(3) |
3.86 | % | 3.62 | % | ||||||||||||
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Net interest margin, normalized(3) |
4.00 | % | 3.77 | % | ||||||||||||
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(1) |
FTE basis based on the federal statutory rate of 35% |
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(2) |
Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual. |
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(3) |
Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans. |
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Nine Months Ended September 30, |
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2017 |
2016 |
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(Amounts in thousands) |
Interest(1) |
Average Yield/ Rate(1) |
Interest(1) |
Average Yield/ Rate(1) |
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Earning assets |
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Loans(2) |
$ | 67,645 | 4.91 | % | $ | 65,836 | 4.95 | % | ||||||||
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Accretion income |
6,243 | 6,183 | ||||||||||||||
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Less: cash accretion income |
1,986 | 2,290 | ||||||||||||||
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Non-cash accretion income |
4,257 | 3,893 | ||||||||||||||
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Loans, normalized(3) |
63,388 | 4.60 | % | 61,943 | 4.66 | % | ||||||||||
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Other earning assets |
5,349 | 2.71 | % | 7,033 | 2.32 | % | ||||||||||
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Total earning assets |
68,737 | 4.36 | % | 68,976 | 4.23 | % | ||||||||||
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Total interest-bearing liabilities |
6,061 | 0.52 | % | 7,385 | 0.60 | % | ||||||||||
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Net interest income, FTE(3) |
$ | 62,676 | $ | 61,591 | ||||||||||||
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Net interest rate spread, normalized(3) |
3.84 | % | 3.63 | % | ||||||||||||
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Net interest margin, normalized(3) |
3.98 | % | 3.77 | % | ||||||||||||
|
(1) |
FTE basis based on the federal statutory rate of 35% |
|
(2) |
Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual. |
|
(3) |
Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans. |
Noninterest Income and Expense
|
CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited) |
|
Three Months Ended |
Nine Months Ended |
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|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
|||||||||||||||||||||||
|
(Amounts in thousands) |
2017 |
2017 |
2017 |
2016 |
2016 |
2017 |
2016 |
|||||||||||||||||||||
|
Noninterest income |
||||||||||||||||||||||||||||
|
Wealth management |
$ | 758 | $ | 791 | $ | 790 | $ | 681 | $ | 653 | $ | 2,339 | $ | 2,147 | ||||||||||||||
|
Service charges on deposits |
3,605 | 3,360 | 3,113 | 3,442 | 3,494 | 10,078 | 10,146 | |||||||||||||||||||||
|
Other service charges and fees |
2,141 | 2,168 | 2,078 | 2,014 | 2,024 | 6,387 | 6,088 | |||||||||||||||||||||
|
Insurance commissions |
306 | 325 | 373 | 59 | 1,592 | 1,004 | 5,383 | |||||||||||||||||||||
|
Net impairment losses recognized in earnings |
- | - | - | - | (4,635 | ) | - | (4,646 | ) | |||||||||||||||||||
|
Net gain (loss) on sale of securities |
- | (657 | ) | - | 388 | 25 | (657 | ) | (53 | ) | ||||||||||||||||||
|
Net FDIC indemnification asset amortization |
(268 | ) | (1,586 | ) | (1,332 | ) | (1,618 | ) | (1,369 | ) | (3,186 | ) | (3,856 | ) | ||||||||||||||
|
Net gain on divestitures |
- | - | - | 619 | 3,065 | - | 3,065 | |||||||||||||||||||||
|
Other operating income |
593 | 1,074 | 669 | 653 | 1,046 | 2,336 | 2,554 | |||||||||||||||||||||
|
Total noninterest income |
7,135 | 5,475 | 5,691 | 6,238 | 5,895 | 18,301 | 20,828 | |||||||||||||||||||||
|
Noninterest expense |
||||||||||||||||||||||||||||
|
Salaries and employee benefits |
9,137 | 9,157 | 8,884 | 9,411 | 9,828 | 27,178 | 30,501 | |||||||||||||||||||||
|
Occupancy expense |
1,082 | 1,341 | 1,248 | 1,158 | 1,249 | 3,671 | 4,139 | |||||||||||||||||||||
|
Furniture and equipment expense |
1,133 | 1,087 | 1,091 | 1,070 | 1,066 | 3,311 | 3,271 | |||||||||||||||||||||
|
Amortization of intangibles |
266 | 263 | 261 | 265 | 316 | 790 | 871 | |||||||||||||||||||||
|
FDIC premiums and assessments |
227 | 227 | 244 | 274 | 363 | 698 | 1,109 | |||||||||||||||||||||
|
Merger, acquisition, and divestiture expense |
- | - | - | 55 | 226 | - | 675 | |||||||||||||||||||||
|
Other operating expense |
5,064 | 5,383 | 5,355 | 4,420 | 5,509 | 15,802 | 15,527 | |||||||||||||||||||||
|
Total noninterest expense |
16,909 | 17,458 | 17,083 | 16,653 | 18,557 | 51,450 | 56,093 | |||||||||||||||||||||
Efficiency Ratio
|
EFFICIENCY RATIO CALCULATION (Unaudited) |
|
Three Months Ended |
Nine Months Ended |
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|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
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|
2017 |
2017 |
2017 |
2016 |
2016 |
2017 |
2016 |
||||||||||||||||||||||
|
(Amounts in thousands) |
||||||||||||||||||||||||||||
|
Noninterest expense, GAAP |
$ | 16,909 | $ | 17,458 | $ | 17,083 | $ | 16,653 | $ | 18,557 | $ | 51,450 | $ | 56,093 | ||||||||||||||
|
Non-GAAP adjustments |
||||||||||||||||||||||||||||
|
Merger, acquisition, and divestiture expense |
- | - | - | (55 | ) | (226 | ) | - | (675 | ) | ||||||||||||||||||
|
OREO expense and net loss |
(647 | ) | (213 | ) | (328 | ) | (184 | ) | (278 | ) | (1,188 | ) | (1,236 | ) | ||||||||||||||
|
Other non-core items |
(64 | ) | (327 | ) | - | 8 | (168 | ) | (391 | ) | (372 | ) | ||||||||||||||||
|
Adjusted noninterest expense |
16,198 | 16,918 | 16,755 | 16,422 | 17,885 | 49,871 | 53,810 | |||||||||||||||||||||
|
Net interest income, GAAP |
22,050 | 22,294 | 21,141 | 20,957 | 21,121 | 65,485 | 63,923 | |||||||||||||||||||||
|
Noninterest income, GAAP |
7,135 | 5,475 | 5,691 | 6,238 | 5,895 | 18,301 | 20,828 | |||||||||||||||||||||
|
Non-GAAP adjustments |
||||||||||||||||||||||||||||
|
Tax equivalency adjustment |
470 | 481 | 497 | 520 | 509 | 1,448 | 1,561 | |||||||||||||||||||||
|
Net impairment losses |
- | - | - | - | 4,635 | - | 4,646 | |||||||||||||||||||||
|
Net loss (gain) on sale of securities |
- | 657 | - | (388 | ) | (25 | ) | 657 | 53 | |||||||||||||||||||
|
Net gain on divestitures |
- | - | - | (619 | ) | (3,065 | ) | - | (3,065 | ) | ||||||||||||||||||
|
Other non-core items |
(30 | ) | (501 | ) | (18 | ) | (40 | ) | (432 | ) | (549 | ) | (876 | ) | ||||||||||||||
|
Adjusted net interest and noninterest income |
29,625 | 28,406 | 27,311 | 26,668 | 28,638 | 85,342 | 87,070 | |||||||||||||||||||||
|
Non-GAAP efficiency ratio(1) |
54.68 | % | 59.56 | % | 61.35 | % | 61.58 | % | 62.45 | % | 58.44 | % | 61.80 | % | ||||||||||||||
|
GAAP efficiency ratio |
57.94 | % | 62.87 | % | 63.67 | % | 61.24 | % | 68.69 | % | 61.41 | % | 66.19 | % | ||||||||||||||
|
(1) |
A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income |
Balance Sheet and Capital
|
CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited) |
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||||||||||||
|
(Amounts in thousands, except per share data) |
2017 |
2017 |
2017 |
2016 |
2016 |
|||||||||||||||
|
Assets |
||||||||||||||||||||
|
Total cash and cash equivalents |
$ | 105,119 | $ | 106,799 | $ | 152,851 | $ | 76,307 | $ | 65,929 | ||||||||||
|
Securities available for sale |
174,424 | 157,854 | 158,685 | 165,579 | 220,856 | |||||||||||||||
|
Securities held to maturity |
25,182 | 25,216 | 47,092 | 47,133 | 72,182 | |||||||||||||||
|
Loans held for investment, net of unearned income |
||||||||||||||||||||
|
Non-covered |
1,805,429 | 1,796,263 | 1,784,371 | 1,795,954 | 1,774,547 | |||||||||||||||
|
Covered |
32,292 | 45,845 | 51,412 | 56,994 | 61,837 | |||||||||||||||
|
Less allowance for loan losses |
(19,206 | ) | (18,886 | ) | (18,458 | ) | (17,948 | ) | (19,633 | ) | ||||||||||
|
Loans held for investment, net |
1,818,515 | 1,823,222 | 1,817,325 | 1,835,000 | 1,816,751 | |||||||||||||||
|
FDIC indemnification asset |
7,465 | 8,159 | 9,931 | 12,173 | 14,332 | |||||||||||||||
|
Premises and equipment, net |
48,949 | 49,598 | 50,057 | 50,085 | 50,564 | |||||||||||||||
|
Other real estate owned, non-covered |
3,543 | 3,914 | 4,477 | 5,109 | 4,052 | |||||||||||||||
|
Other real estate owned, covered |
54 | 124 | 241 | 276 | 2,437 | |||||||||||||||
|
Interest receivable |
5,156 | 5,072 | 5,059 | 5,553 | 5,498 | |||||||||||||||
|
Goodwill |
95,779 | 95,779 | 95,779 | 95,779 | 101,776 | |||||||||||||||
|
Other intangible assets |
6,417 | 6,683 | 6,947 | 7,207 | 7,964 | |||||||||||||||
|
Other assets |
84,177 | 84,183 | 82,069 | 86,197 | 87,932 | |||||||||||||||
|
Total assets |
$ | 2,374,780 | $ | 2,366,603 | $ | 2,430,513 | $ | 2,386,398 | $ | 2,450,273 | ||||||||||
|
Liabilities |
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|
Deposits |
||||||||||||||||||||
|
Noninterest-bearing |
$ | 452,940 | $ | 443,800 | $ | 467,677 | $ | 427,705 | $ | 473,509 | ||||||||||
|
Interest-bearing |
1,410,880 | 1,413,574 | 1,438,917 | 1,413,633 | 1,388,390 | |||||||||||||||
|
Total deposits |
1,863,820 | 1,857,374 | 1,906,594 | 1,841,338 | 1,861,899 | |||||||||||||||
|
Securities sold under agreements to repurchase |
83,783 | 86,011 | 90,653 | 98,005 | 118,532 | |||||||||||||||
|
FHLB borrowings |
50,000 | 50,000 | 65,000 | 65,000 | 90,000 | |||||||||||||||
|
Other borrowings |
- | - | 244 | 15,708 | 15,707 | |||||||||||||||
|
Interest, taxes, and other liabilities |
24,540 | 24,443 | 24,618 | 27,290 | 26,599 | |||||||||||||||
|
Total liabilities |
2,022,143 | 2,017,828 | 2,087,109 | 2,047,341 | 2,112,737 | |||||||||||||||
|
Stockholders' equity |
||||||||||||||||||||
|
Common stock |
21,382 | 21,382 | 21,382 | 21,382 | 21,382 | |||||||||||||||
|
Additional paid-in capital |
228,510 | 228,326 | 228,176 | 228,142 | 227,884 | |||||||||||||||
|
Retained earnings |
182,145 | 177,556 | 173,860 | 170,377 | 166,689 | |||||||||||||||
|
Treasury stock, at cost |
(79,333 | ) | (78,488 | ) | (78,533 | ) | (78,833 | ) | (78,789 | ) | ||||||||||
|
Accumulated other comprehensive (loss) income |
(67 | ) | (1 | ) | (1,481 | ) | (2,011 | ) | 370 | |||||||||||
|
Total stockholders' equity |
352,637 | 348,775 | 343,404 | 339,057 | 337,536 | |||||||||||||||
|
Total liabilities and stockholders' equity |
$ | 2,374,780 | $ | 2,366,603 | $ | 2,430,513 | $ | 2,386,398 | $ | 2,450,273 | ||||||||||
|
Shares outstanding at period-end |
16,986,502 | 17,017,071 | 17,013,185 | 16,994,208 | 16,988,972 | |||||||||||||||
|
Book value per common share(1) |
$ | 20.76 | $ | 20.50 | $ | 20.18 | $ | 19.95 | $ | 19.87 | ||||||||||
|
Tangible book value per common share(2) |
14.74 | 14.47 | 14.15 | 13.89 | 13.41 | |||||||||||||||
|
(1) |
Stockholders' equity divided by as-converted common shares outstanding |
|
(2) |
A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangibles, divided by as-converted common shares outstanding |
Asset Quality
|
SELECTED CREDIT QUALITY INFORMATION (Unaudited) |
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||||||||||||
|
(Amounts in thousands) |
2017 |
2017 |
2017 |
2016 |
2016 |
|||||||||||||||
|
Allowance for Loan Losses |
||||||||||||||||||||
|
Beginning balance |
$ | 18,886 | $ | 18,458 | $ | 17,948 | $ | 19,633 | $ | 21,099 | ||||||||||
|
Provision for (recovery of) loan losses charged to operations |
730 | 934 | 492 | 500 | (1,154 | ) | ||||||||||||||
|
Charge-offs |
(717 | ) | (902 | ) | (357 | ) | (2,485 | ) | (772 | ) | ||||||||||
|
Recoveries |
307 | 396 | 375 | 300 | 460 | |||||||||||||||
|
Net (charge-offs) recoveries |
(410 | ) | (506 | ) | 18 | (2,185 | ) | (312 | ) | |||||||||||
|
Ending balance |
$ | 19,206 | $ | 18,886 | $ | 18,458 | $ | 17,948 | $ | 19,633 | ||||||||||
|
Nonperforming Assets |
||||||||||||||||||||
|
Non-covered nonperforming assets |
||||||||||||||||||||
|
Nonaccrual loans |
$ | 18,942 | $ | 20,146 | $ | 18,537 | $ | 15,854 | $ | 17,487 | ||||||||||
|
Accruing loans past due 90 days or more |
- | - | 20 | - | 62 | |||||||||||||||
|
Troubled debt restructurings ("TDRs")(1) |
141 | 100 | - | 114 | 115 | |||||||||||||||
|
Total non-covered nonperforming loans |
19,083 | 20,246 | 18,557 | 15,968 | 17,664 | |||||||||||||||
|
OREO |
3,543 | 3,914 | 4,477 | 5,109 | 4,052 | |||||||||||||||
|
Total non-covered nonperforming assets |
$ | 22,626 | $ | 24,160 | $ | 23,034 | $ | 21,077 | $ | 21,716 | ||||||||||
|
Covered nonperforming assets |
||||||||||||||||||||
|
Nonaccrual loans |
$ | 420 | $ | 446 | $ | 918 | $ | 608 | $ | 688 | ||||||||||
|
Total covered nonperforming loans |
420 | 446 | 918 | 608 | 688 | |||||||||||||||
|
OREO |
54 | 124 | 241 | 276 | 2,437 | |||||||||||||||
|
Total covered nonperforming assets |
$ | 474 | $ | 570 | $ | 1,159 | $ | 884 | $ | 3,125 | ||||||||||
|
Additional Information |
||||||||||||||||||||
|
Performing TDRs(2) |
$ | 8,101 | $ | 8,485 | $ | 8,593 | $ | 12,838 | $ | 13,336 | ||||||||||
|
Total TDRs(3) |
8,242 | 8,585 | 8,593 | 12,952 | 13,451 | |||||||||||||||
|
Non-covered ratios |
||||||||||||||||||||
|
Nonperforming loans to total loans |
1.06 | % | 1.13 | % | 1.04 | % | 0.89 | % | 1.00 | % | ||||||||||
|
Nonperforming assets to total assets |
0.97 | % | 1.04 | % | 0.97 | % | 0.90 | % | 0.91 | % | ||||||||||
|
Non-PCI allowance to nonperforming loans |
100.64 | % | 93.24 | % | 99.40 | % | 112.32 | % | 111.08 | % | ||||||||||
|
Non-PCI allowance to total loans |
1.06 | % | 1.05 | % | 1.03 | % | 1.00 | % | 1.11 | % | ||||||||||
|
Annualized net charge-offs to average loans |
0.09 | % | 0.11 | % | 0.00 | % | 0.49 | % | 0.07 | % | ||||||||||
|
Total ratios |
||||||||||||||||||||
|
Nonperforming loans to total loans |
1.06 | % | 1.12 | % | 1.06 | % | 0.89 | % | 1.00 | % | ||||||||||
|
Nonperforming assets to total assets |
0.97 | % | 1.04 | % | 1.00 | % | 0.92 | % | 1.01 | % | ||||||||||
|
Allowance for loan losses to nonperforming loans |
98.48 | % | 91.27 | % | 94.78 | % | 108.28 | % | 106.98 | % | ||||||||||
|
Allowance for loan losses to total loans |
1.05 | % | 1.03 | % | 1.01 | % | 0.97 | % | 1.07 | % | ||||||||||
|
Annualized net charge-offs to average loans |
0.09 | % | 0.11 | % | 0.00 | % | 0.47 | % | 0.07 | % | ||||||||||
|
(1) |
Accruing TDRs restructured within the past six months or nonperforming |
||||||||||
|
(2) |
Accruing TDRs with six months or more of satisfactory payment performance |
||||||||||
|
(3) |
Accruing total TDRs |
||||||||||
9