Exhibit 99.1

PRESS RELEASE

 

CONTACT:	Michael W. Clarke	FOR IMMEDIATE RELEASE: January 25, 2019
	CEO
	703-871-2100

 

Access National Finishes Year With Exceptional Loan Growth

 

Reston, Virginia. Access National Corporation (NASDAQ: ANCX) (the “Corporation” or “Access”), parent company for Access National Bank (the “Bank”) and Middleburg Investment Group, reported fourth quarter 2018 net income of $8.7 million, or $0.41 per diluted share. This represents the Corporation’s 74^th consecutive quarterly profit over its 76 quarter history. Due to the timing of the pending merger with Union Bankshares (“Union”), the Access Board of Directors did not declare a dividend for this reporting period.

 

On January 24, 2019, the Union Board of Directors declared a $0.23 per share dividend for Union common shareholders of record as of February 8, 2019 and payable on February 22, 2019. At the exchange rate of 0.75 for Access shares to Union shares, which will occur on February 1, 2019, the dividend to be paid equates to a $0.1725 per share dividend for Access common shareholders.

 

Highlights

·

All shareholder and regulatory approvals are in place for the Union merger to close as expected in February, 2019;

·

For the three month period ended December 31, 2018, net income increased 186.6% compared to the same period of the prior year;

·

Gross loans held for investment increased $196.5 million during the twelve-month period ended December 31, 2018, inclusive of a growth of $81.2 million in the fourth quarter 2018;

·

Customer deposits increased $26.6 million during the twelve month period ended December 31, 2018 to $2.3 billion;

·

Demand deposits of $1.2 billion at December 31, 2018 comprised 53.3% of total deposits, inclusive of $731.4 million of non-interest bearing demand deposits or 32.4% of the deposit portfolio;

·

Merger related expenses totaled $1.5 million during the fourth quarter of 2018 accounting for a $0.07 decrease in fourth quarter earnings per share; and

·

Tangible book value1 per common share was $12.88 at December 31, 2018, an increase of $1.36 from the prior year ended December 31, 2017.

 

According to CEO Michael Clarke, “For the second consecutive quarter, net loan growth exceeded our stated goal of annualized growth of $200 million per annum. On a linked quarter basis, net loans grew at an annualized pace of 15.5% compared to an annualized rate of 22% in the period ended September 30, 2018. The exceptional growth evidences the enthusiasm our relationship managers and their clients have concerning our pending combination with Union. Mr. Clarke continued, “The convincing approval of the merger by our shareholders on January 15, 2019 made an equally strong statement concerning the anticipated benefits of investing with Union to create Virginia’s regional bank.”

 

Gross loans held for investment increased $81.2 million during the quarter to $2.2 billion at December 31, 2018 resulting in a total growth of $196.5 million in 2018. As of December 31, 2018, commercial and industrial loans as well as owner occupied commercial real estate loans combined to account for 51.2% of the loan portfolio, reflecting the Corporation’s continued focus on lower-middle-market businesses. The Corporation’s priority focus remains on expanding borrowers in these portfolios as a driver of future growth in the loan portfolio, along with related core deposits.

 

 

¹ Non-GAAP financial information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.

 

Noninterest-bearing deposits at December 31, 2018 were $731.4 million, a decrease of $13.5 million compared to December 31, 2017 and remain the largest and most attractive source of funding for the Corporation, comprising 32.4% of the deposit portfolio. When combined with interest-bearing demand deposit accounts, total transaction accounts comprise 53.3% of the total deposit portfolio, reducing reliance of non-core and more price sensitive funding. Total deposits grew $26.6 million from December 31, 2017 to December 31, 2018 ending the year at $2.3 billion.

 

The net interest margin on a fully tax equivalent (non-GAAP) basis was 3.69% at December 31, 2018 compared to 3.88% at December 31, 2017. Net purchase mark accretion included in net interest income was $504 thousand for the fourth quarter 2018 and $2.7 million for the year. 

 

Non-performing assets (“NPAs”) increased to $7.1 million at December 31, 2018 from $6.1 million at September 30, 2018, representing 0.23% and 0.20% of total assets, respectively. Included in the NPA total is $585 thousand in other real estate owned. The provision for loan loss was $1.5 million during the fourth quarter 2018 and was due mainly to the growth in the loan portfolio. The allowance for loan loss represented 0.84% of total loans held for investment at December 31, 2018.

 

Tangible book value² per common share increased to $12.88 at December 31, 2018 from $12.33 at September 30, 2018 and $11.52 at December 31, 2017. The tangible common equity ratio for Access National Corporation and its subsidiary bank was 9.51% at December 31, 2018, at the top of the Corporation’s target range of 8.50% to 9.50%.

 

Access National Corporation is the parent company of Access National Bank and Middleburg Investment Group serving Northern and Central Virginia. Additional information is available on our website at www.AccessNationalBank.com. Shares of Access National Corporation are traded on the NASDAQ Global Market under the symbol "ANCX".

 

 

 

 

 

 

 

² Non-GAAP financial information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.

 

Forward-Looking Statements

 

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or results and are not statements of historical fact. Such statements also include statements as to the anticipated impact of the proposed Union acquisition of Access, including future financial and operating results, ability to successfully integrate the combined businesses, the amount of cost savings, overall operational efficiencies and enhanced revenues and the expected closing date, as well as other statements regarding the acquisition. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of Access or its management about future events. Although Access believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of Access will not differ materially from any projected future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, including but not limited to, economic and financial market conditions in the United States generally and particularly in the markets in which Access operates and which its loans are concentrated including declines in real estate values, the effects an increase in unemployment levels, slowdowns in economic growth, and a prolonged federal government shutdown, changes in asset quality and credit risk, changes in interest rates and capital markets, competitive conditions, the quality or composition of the loan or investment portfolios, the fact that the businesses of Union and Access may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected, expected revenue synergies and cost savings from the proposed acquisition may not be fully realized or realized within the expected time frame, revenues following the proposed acquisition may be lower than expected, customer and employee relationships and business operations may be disrupted by the proposed acquisition, the diversion of management time on merger-related issues, changes in Union’s share price before closing, risks relating to the potential dilutive effect of shares of Union common stock to be issued in the proposed transaction, the ability to close the proposed acquisition on the expected timeframe, or at all, and that closing may be more difficult, time-consuming or costly than expected, the reaction to the proposed acquisition of the companies’ customers, employees and counterparties, and other risk factors, many of which are beyond the control of Access. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Access’s Annual Report on Form 10-K for the year ended December 31, 2017 and comparable “risk factors” sections of Access’s Quarterly Reports on Form 10-Q and other filings, which have been filed with the Securities and Exchange Commission (the “SEC”) and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on Union, Access or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and Access does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

 

 

Access National Corporation

Consolidated Balance Sheet - Unaudited

 

		December 31,				December 31,
(In Thousands Except for Share and Per Share Data)		2018				2017
ASSETS
Cash and due from banks		$	18,591			$	29,855
Interest-bearing balances and federal funds sold			66,756				92,458
Investment securities:
Available-for-sale, at fair value			423,760				406,067
Marketable equity, at fair value			-				1,379
Held-to-maturity, amortized cost (fair value of $ 22,474 and $16,379, respectively)			22,465				15,721
Total investment securities			446,225				423,167
Restricted Stock, at amortized cost			22,935				16,572
Loans held for sale - at fair value			20,537				31,999
Loans held for investment
net of allowance for loan losses of $18,181 and $15,805, respectively			2,157,273				1,963,104
Premises, equipment and land, net			27,432				27,797
Goodwill and intangible assets, net			183,218				185,161
Other assets			96,193				103,781
Total assets		$	3,039,160			$	2,873,894
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Noninterest-bearing deposits		$	731,449			$	744,960
Interest-bearing demand deposits			502,539				496,677
Savings and interest-bearing deposits			682,317				623,889
Time deposits			344,445				368,622
Total deposits			2,260,750				2,234,148
Short-term borrowings			286,930				145,993
Long-term borrowings			10,000				40,000
Trust preferred debentures			3,962				3,883
Other liabilities and accrued expenses			22,706				28,246
Total Liabilities			2,584,348				2,452,270
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000 authorized;
issued and outstanding, 21,078,433 and 20,534,163 respectively			17,600				17,146
Additional paid in capital			321,278				307,670
Retained earnings			121,141				98,584
Accumulated other comprehensive income (loss), net			(5,207	)			(1,776	)
Total shareholders' equity			454,812				421,624
Total liabilities and shareholders' equity		$	3,039,160			$	2,873,894

 

Access National Corporation

Consolidated Statement of Operations - Unaudited

 

		Three Months Ended								Twelve Months Ended
(In Thousands Except for Share and Per Share Data)		December 31, 2018				December 31, 2017				December 31, 2018				December 31, 2017
INTEREST INCOME
Interest and fees on loans		$	26,783			$	24,321			$	100,024			$	84,572
Interest on federal funds sold and bank balances			432				453				1,964				1,199
Interest and dividends on securities			3,286				2,321				11,655				9,709
Total interest income			30,501				27,095				113,643				95,480
INTEREST EXPENSE
Interest on deposits			4,468				2,714				14,185				9,274
Interest on other borrowings			1,410				468				4,510				1,834
Total interest expense			5,878				3,182				18,695				11,108
Net interest income			24,623				23,913				94,948				84,372
Provision for loan losses			1,500				3,719				3,602				6,919
Net interest income after provision for loan losses			23,123				20,194				91,346				77,453
NONINTEREST INCOME
Service charges and fees			487				489				1,943				1,998
Gain on sale of loans			3,161				5,095				14,614				20,080
Other Income			2,524				3,097				13,544				10,014
Total noninterest income			6,172				8,681				30,101				32,092
NONINTEREST EXPENSE
Salaries and benefits			10,016				12,115				45,386				43,915
Occupancy and equipment			1,699				1,058				7,580				6,878
Other operating expense			6,931				6,681				25,046				30,275
Total noninterest expense			18,646				19,854				78,012				81,068
Income before income tax			10,649				9,021				43,435				28,477
Income tax expense			1,923				5,976				8,051				11,977
NET INCOME			8,726				3,045				35,384				16,500
Earnings per common share:
Basic		$	0.42			$	0.15			$	1.70			$	0.92
Diluted		$	0.41			$	0.15			$	1.69			$	0.92
Average outstanding shares:
Basic			20,990,926				20,485,116				20,798,697				17,988,670
Diluted			21,046,839				20,601,740				20,877,532				18,076,304

 

 

Performance and Capital Ratios - Unaudited

 

		Three Months			Three Months			Three Months			Three Months			Twelve Months			Twelve Months
		Ended			Ended			Ended			Ended			Ended			Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31
(Dollars In Thousands)		2018			2018			2018			2018			2018			2017
Return on average assets (annualized)			1.17%			1.30%			1.26%			1.13%			1.21%			0.67%
Return on average tangible equity (annualized) (1)			13.35%			15.20%			14.73%			13.57%			14.21%			8.15%
Net interest margin - fully tax equivalent basis (1)			3.69%			3.67%			3.67%			3.70%			3.69%			3.88%
Net interest margin			3.64%			3.62%			3.62%			3.65%			3.63%			3.81%
Cost of funds			1.29%			1.17%			0.98%			0.79%			1.06%			0.73%
Access National Bank efficiency ratio (2)			50.06%			53.14%			57.36%			59.65%			54.80%			55.72%
Access National Corporation efficiency ratio (2)			60.55%			60.19%			63.62%			65.19%			62.39%			69.61%
Total average equity to earning assets			16.46%			16.47%			16.86%			16.59%			16.59%			14.82%
Tangible common equity ratio (1)			9.51%			9.09%			9.12%			9.10%			9.51%			8.79%
Averages
Assets		$	2,995,148		$	2,953,987		$	2,848,307		$	2,856,201		$	2,913,778		$	2,453,894
Loans held for investment, gross			2,113,576			2,038,292			1,935,422			1,950,077			2,009,865			1,704,040
Loans held for sale			30,191			36,672			41,515			21,257			32,445			27,881
Interest-bearing deposits & federal funds sold			79,542			110,140			110,800			136,969			109,208			104,566
Investment securities and restricted stock			469,844			461,708			444,779			434,003			452,707			362,614
Earning assets			2,705,299			2,656,213			2,541,454			2,548,836			2,613,494			2,212,020
Interest-bearing deposits			1,543,921			1,502,982			1,440,998			1,517,030			1,501,334			1,327,262
Total deposits			2,246,993			2,201,473			2,114,617			2,215,222			2,194,722			1,922,249
Repurchase agreements & federal funds purchased			45,390			50,135			56,693			57,344			52,351			48,378
FHLB short term borrowings			201,680			193,784			180,348			91,002			167,081			67,907
FHLB long-term borrowings			27,935			45,000			42,088			40,000			38,740			66,329
Trust Preferred debt			3,950			3,930			3,911			3,891			3,921			2,691
Equity			445,254			437,398			428,590			422,780			433,577			327,738
Tangible equity (1)		$	261,518		$	252,864		$	243,232		$	238,381		$	249,065		$	202,408
Allowance for loan losses		$	18,181		$	17,349		$	16,543		$	15,928		$	18,181		$	15,805
Allowance for loan losses/loans held for investment			0.84%			0.83%			0.83%			0.83%			0.84%			0.80%
Remaining purchase marks on performing loans		$	8,353		$	8,838		$	9,615		$	10,415		$	8,353		$	11,241
Purchased credit impaired loans		$	4,077		$	4,509		$	4,632		$	4,702		$	4,077		$	4,969
Remaining purchase marks on credit impaired loans		$	1,573		$	1,592		$	1,720		$	1,749		$	1,573		$	1,175
Total NPA		$	7,074		$	6,106		$	6,049		$	7,453		$	7,074		$	5,270
NPA to total assets			0.23%			0.20%			0.21%			0.26%			0.23%			0.18%
Mortgage loan originations and brokered loans		$	69,028		$	85,087		$	123,157		$	84,411		$	361,683		$	432,678
Gain on sale of mortgage loans net hedging activity		$	3,434		$	4,137		$	4,251		$	3,273		$	15,095		$	19,192
Allowance for losses on mortgage loans sold		$	916		$	953		$	953		$	953		$	916		$	953
Wealth Services segment - assets under management		$	1,810,173		$	2,012,526		$	1,949,992		$	1,942,526		$	1,810,173		$	1,955,720
Book value per common share		$	21.58		$	21.13		$	20.88		$	20.62		$	21.58		$	20.53
Tangible book value per common share (1)		$	12.88		$	12.33		$	11.99		$	11.65		$	12.88		$	11.52

 

 

(1) Non-GAAP financial information.  See "Reconciliation of Non-GAAP Financial Measures" at end of release.

(2) Efficiency ratio is non-interest expense divided by the sum of net interest income and non-interest income

 

 

Composition of Loan Portfolio - Unaudited

 

		December 31, 2018								September 30, 2018								June 30, 2018								March 31, 2018								December 31, 2017
(Dollars In Thousands)		Amount				Percentage of Total				Amount				Percentage of Total				Amount				Percentage of Total				Amount				Percentage of Total				Amount				Percentage of Total
Commercial real estate  - owner occupied		$	547,817				25.18	%		$	525,047				25.07	%		$	478,928				24.13	%		$	462,298				24.02	%		$	467,082				23.60	%
Commercial real estate - non-owner occupied			480,783				22.10				467,495				22.32				457,940				23.08				419,139				21.77				436,083				22.04
Residential real estate			454,910				20.91				459,989				21.96				460,269				23.20				476,366				24.75				489,669				24.74
Commercial			565,086				25.98				507,269				24.22				464,270				23.40				437,287				22.72				463,652				23.43
Real estate construction			107,939				4.96				113,790				5.43				99,164				5.00				104,528				5.43				97,481				4.93
Consumer			18,919				0.87				20,680				1.00				23,618				1.19				25,293				1.31				24,942				1.26
Total loans		$	2,175,454				100.00	%		$	2,094,270				100.00	%		$	1,984,189				100.00			$	1,924,911				100.00	%		$	1,978,909				100.00	%
Less allowance for loan losses			18,181								17,349								16,543								15,928								15,805
		$	2,157,273							$	2,076,921							$	1,967,646							$	1,908,983							$	1,963,104

 

 

Composition of Deposits - Unaudited

 

		December 31, 2018								September 30, 2018								June 30, 2018								March 31, 2018								December 31, 2017
(Dollars In Thousands)		Amount				Percentage of Total				Amount				Percentage of Total				Amount				Percentage of Total				Amount				Percentage of Total				Amount				Percentage of Total
Demand deposits		$	731,449				32.35	%		$	757,900				33.03	%		$	719,873				33.85	%		$	706,128				32.14	%		$	744,960				33.34	%
Interest-bearing demand deposits			473,222				20.93				455,769				19.86				462,355				21.74				501,745				22.84				486,621				21.78
Savings and money market			640,724				28.34				670,497				29.22				585,673				27.54				616,879				28.08				580,827				26.00
CDARS time deposits			17,366				0.77				17,050				0.74				13,666				0.64				17,247				0.78				21,582				0.97
CDARS/ICS non-maturity deposits			70,857				3.13				66,604				2.90				53,233				2.50				50,233				2.29				48,011				2.15
Brokered deposits			53,997				2.39				53,900				2.35				17,590				0.83				23,244				1.06				51,028				2.28
Time deposits			273,135				12.09				273,144				11.90				274,330				12.90				281,452				12.81				301,119				13.48
Total Deposits		$	2,260,750				100.00	%		$	2,294,864				100.00	%		$	2,126,720				100.00	%		$	2,196,928				100.00	%		$	2,234,148				100.00	%

 

 

Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities

Three Months Ended - Unaudited

 

		December 31, 2018												December 31, 2017
		Average				Income /				Yield /				Average				Income /				Yield /
(Dollars In Thousands)		Balance				Expense				Rate				Balance				Expense				Rate
Assets:
Interest-earning assets:
Investment securities and restricted stock		$	481,990			$	3,286				2.73	%		$	438,290			$	2,321				2.12	%
Loans held for sale			30,191				377				5.00	%			30,006				297				3.96	%
Loans(1)			2,113,576				26,406				5.00	%			1,965,608				24,024				4.89	%
Interest-bearing balances and federal funds sold			79,542				432				2.17	%			102,095				453				1.77	%
Total interest-earning assets			2,705,299				30,501				4.51	%			2,535,999				27,095				4.27	%
Noninterest-earning assets:
Cash and due from banks			14,330												18,784
Premises, land and equipment			27,652												26,156
Other assets			265,480												272,877
Less: allowance for loan losses			(17,613	)											(15,982	)
Total noninterest-earning assets			289,849												301,835
Total Assets		$	2,995,148											$	2,837,834
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits		$	500,836			$	948				0.76	%		$	480,147			$	499				0.42	%
Money market deposit accounts			539,267				1,717				1.27	%			483,416				691				0.57	%
Savings accounts			160,073				265				0.66	%			175,123				322				0.74	%
Time deposits			343,745				1,538				1.79	%			389,447				1,202				1.23	%
Total interest-bearing deposits			1,543,921				4,468				1.16	%			1,528,133				2,714				0.71	%
Borrowings:
FHLB short-term borrowings			201,680				1,227				2.43	%			68,300				231				1.35	%
Securities sold under agreements to repurchase and federal funds purchased			45,390				13				0.11	%			54,702				10				0.07	%
Subordinated debentures			3,950				89				9.06	%			3,871				73				7.54	%
FHLB long-term borrowings			27,935				81				1.16	%			46,304				154				1.33	%
Total borrowings			278,955				1,410				2.02	%			173,177				468				1.08	%
Total interest-bearing deposits and borrowings			1,822,876				5,878				1.29	%			1,701,310				3,182				0.75	%
Noninterest-bearing liabilities:
Demand deposits			703,072												719,093
Other liabilities			23,946												23,112
Total liabilities			2,549,894												2,443,515
Shareholders' Equity			445,254												394,319
Total Liabilities and Shareholders' Equity		$	2,995,148											$	2,837,834
Interest Spread(2)											3.22	%											3.52	%
Net Interest Margin(3)						$	24,623				3.64	%						$	23,913				3.77	%

 

 

(1) Loans placed on nonaccrual status are included in loan balances.
(2) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest-bearing liabilities.
(3) Net interest margin is net interest income, expressed as a percentage of average earning assets.

 

 

Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities

Twelve Months Ended - Unaudited

 

		December 31, 2018												December 31, 2017
		Average				Income /				Yield /				Average				Income /				Yield /
(Dollars In Thousands)		Balance				Expense				Rate				Balance				Expense				Rate
Assets:
Interest-earning assets:
Investment securities and restricted stock		$	461,976			$	11,655				2.52	%		$	375,533			$	9,709				2.59	%
Loans held for sale			32,445				1,531				4.72	%			27,881				1,143				4.10	%
Loans(1)			2,009,865				98,493				4.90	%			1,704,040				83,429				4.90	%
Interest-bearing balances and federal funds sold			109,208				1,964				1.80	%			104,565				1,199				1.15	%
Total interest-earning assets			2,613,494				113,643				4.35	%			2,212,019				95,480				4.32	%
Noninterest-earning assets:
Cash and due from banks			15,885												20,859
Premises, land and equipment			28,015												22,683
Other assets			273,098												213,337
Less: allowance for loan losses			(16,714	)											(15,004	)
Total noninterest-earning assets			300,284												241,875
Total Assets		$	2,913,778											$	2,453,894
Liabilities and Shareholders' Equity:
Interest-bearing deposits:
Interest-bearing demand deposits		$	497,136			$	3,015				0.61	%		$	386,046			$	1,409				0.36	%
Money market deposit accounts			502,241				5,177				1.03	%			386,786				2,335				0.60	%
Savings accounts			168,437				949				0.56	%			153,769				714				0.46	%
Time deposits			333,520				5,044				1.51	%			400,660				4,816				1.20	%
Total interest-bearing deposits			1,501,334				14,185				0.94	%			1,327,261				9,274				0.70	%
Borrowings:
FHLB short-term borrowings			167,081				3,419				2.05	%			67,907				822				1.21	%
Securities sold under agreements to repurchase and federal funds purchased			52,351				54				0.10	%			48,378				68				0.14	%
Subordinated debentures			3,921				335				8.56	%			2,692				221				8.21	%
FHLB long-term borrowings			38,740				702				1.81	%			66,329				723				1.09	%
Total borrowings			262,093				4,510				1.72	%			185,306				1,834				0.99	%
Total interest-bearing deposits and borrowings			1,763,427				18,695				1.06	%			1,512,567				11,108				0.73	%
Noninterest-bearing liabilities:
Demand deposits			693,388												594,987
Other liabilities			23,386												18,602
Total liabilities			2,480,201												2,126,156
Shareholders' Equity			433,577												327,738
Total Liabilities and Shareholders' Equity		$	2,913,778											$	2,453,894
Interest Spread(2)											3.29	%											3.59	%
Net Interest Margin(3)						$	94,948				3.63	%						$	84,372				3.81	%

 

 

(1) Loans placed on nonaccrual status are included in loan balances.
(2) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest-bearing liabilities.
(3) Net interest margin is net interest income, expressed as a percentage of average earning assets.

 

 

Segment Reporting - Unaudited

 

Three Months Ended	Commercial			Mortgage			Trust & Wealth									Consolidated
December 31, 2018	Banking			Banking			Management			Other			Eliminations			Totals
	(In Thousands)
Revenues:
Interest income	$	30,179		$	376		$	3		$	12		$	(69	)	$	30,501
Gain on sale of loans		-			3,161			-			-			-			3,161
Other revenues		1,646			(334	)		1,618			398			(317	)		3,011
Total revenues		31,825			3,203			1,621			410			(386	)		36,673
Expenses:
Interest expense		5,800			-			-			147			(69	)		5,878
Salaries and employee benefits		7,122			2,048			846			-			-			10,016
Other expenses		7,408			548			558			1,933			(317	)		10,130
Total operating expenses		20,330			2,596			1,404			2,080			(386	)		26,024
Income (loss) before income taxes	$	11,495		$	607		$	217		$	(1,670	)	$	-		$	10,649
Total assets	$	3,012,742		$	24,014		$	13,289		$	29,319		$	(40,204	)	$	3,039,160

 

 

Three Months Ended	Commercial			Mortgage			Trust & Wealth									Consolidated
December 31, 2017	Banking			Banking			Management			Other			Eliminations			Totals
	(In Thousands)
Revenues:
Interest income	$	26,837		$	295		$	-		$	8		$	(45	)	$	27,095
Gain on sale of loans		136			4,959			-			-			-			5,095
Other revenues		1,825			(1	)		1,793			478			(509	)		3,586
Total revenues		28,798			5,253			1,793			486			(554	)		35,776
Expenses:
Interest expense		3,116			(24	)		-			135			(45	)		3,182
Salaries and employee benefits		8,116			2,836			1,163			-			-			12,115
Other expenses		8,825			1,092			919			1,131			(509	)		11,458
Total operating expenses		20,057			3,904			2,082			1,266			(554	)		26,755
Income (loss) before income taxes	$	8,741		$	1,349		$	(289	)	$	(780	)	$	-		$	9,021
Total assets	$	2,827,041		$	31,999		$	10,967		$	21,727		$	(17,840	)	$	2,873,894

 

 

Segment Reporting - Unaudited

 

Twelve Months Ended	Commercial			Mortgage			Trust & Wealth									Consolidated
December 31, 2018	Banking			Banking			Management			Other			Eliminations			Totals
Revenues:
Interest income	$	112,264		$	1,531		$	12		$	33		$	(197	)	$	113,643
Gain on sale of loans		-			14,614			-			-			-			14,614
Other revenues		6,937			566			7,773			1,525			(1,314	)		15,487
Total revenues		119,201			16,711			7,785			1,558			(1,511	)		143,744
Expenses:
Interest expense		18,393			(72	)		-			571			(197	)		18,695
Salaries and employee benefits		31,174			10,339			3,848			-			25			45,386
Other expenses		27,669			3,043			2,252			4,603			(1,339	)		36,228
Total operating expenses		77,236			13,310			6,100			5,174			(1,511	)		100,309
Income (loss) before income taxes	$	41,965		$	3,401		$	1,685		$	(3,616	)	$	-		$	43,435
Total assets	$	3,012,742		$	24,014		$	13,289		$	29,319		$	(40,204	)	$	3,039,160

 

 

Twelve Months Ended	Commercial			Mortgage			Trust & Wealth									Consolidated
December 31, 2017	Banking			Banking			Management			Other			Eliminations			Totals
Revenues:
Interest income	$	94,577		$	1,141		$	7		$	25		$	(270	)	$	95,480
Gain on sale of loans		136			19,944			-			-			-			20,080
Other revenues		6,270			(307	)		5,988			1,453			(1,392	)		12,012
Total revenues		100,983			20,778			5,995			1,478			(1,662	)		127,572
Expenses:
Interest expense		10,912			(6	)		-			472			(270	)		11,108
Salaries and employee benefits		28,108			11,958			3,849			-			-			43,915
Other expenses		28,998			4,338			3,460			8,668			(1,392	)		44,072
Total operating expenses		68,018			16,290			7,309			9,140			(1,662	)		99,095
Income (loss) before income taxes	$	32,965		$	4,488		$	(1,314	)	$	(7,662	)	$	-		$	28,477
Total assets	$	2,827,041		$	31,999		$	10,967		$	21,727		$	(17,840	)	$	2,873,894

 

 

Reconciliation of Non-GAAP Financial Measures - Unaudited

 

The press release contains certain financial information determined by methods other than in accordance with generally accepted accounting policies in the United States (GAAP). These non-GAAP financial measures are “tangible book value per common shares”, “tangible common equity ratio”, and “net interest margin on a fully tax equivalent basis.” This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Corporation’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management uses these non-GAAP measures in its analysis of our performance because it believes these measures are material and will be used as a measure of our performance by investors.

 

	Three Months			Three Months			Three Months			Three Months			Twelve Months			Twelve Months
	Ended			Ended			Ended			Ended			Ended			Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
(Dollars In Thousands)	2018			2018			2018			2018			2018			2017
Book value per common share	$	21.57		$	21.13		$	20.88		$	20.62		$	21.57		$	20.53
Effect of intangible assets	$	(8.69	)	$	(8.80	)	$	(8.89	)	$	(8.97	)	$	(8.69	)	$	(9.01	)
Tangible book value per common share	$	12.88		$	12.33		$	11.99		$	11.65		$	12.88		$	11.52
Common equity ratio		14.97	%		14.63	%		14.87	%		15.06	%		14.97	%		14.68	%
Effect of intangible assets		-5.46	%		-5.54	%		-5.75	%		-5.96	%		-5.46	%		-5.89	%
Tangible common equity ratio		9.51	%		9.09	%		9.12	%		9.10	%		9.51	%		8.79	%
Net interest margin		3.64	%		3.62	%		3.62	%		3.65	%		3.63	%		3.81	%
Effect of tax exempt securities and loans		0.05	%		0.05	%		0.05	%		0.05	%		0.06	%		0.07	%
Net interest margin - fully tax equivalent basis		3.69	%		3.67	%		3.67	%		3.70	%		3.69	%		3.88	%
Return on average equity		8.02	%		8.79	%		8.36	%		7.65	%		8.21	%		5.03	%
Effect of intangible assets		5.33	%		6.41	%		6.37	%		5.92	%		6.00	%		3.12	%
Return on average tangible equity		13.35	%		15.20	%		14.73	%		13.57	%		14.21	%		8.15	%
Average equity	$	445,254		$	437,398		$	428,590		$	422,780		$	433,577		$	327,738
Effect of average intangible assets	$	183,736		$	184,534		$	185,358		$	184,399		$	184,512		$	125,330
Average tangible equity	$	261,518		$	252,864		$	243,232		$	238,381		$	249,065		$	202,408