Attached files
| file | filename |
|---|---|
| 8-K - 8-K - BAY BANKS OF VIRGINIA INC | bayk-8k_20200128.htm |
Exhibit 99.1
Bay Banks of Virginia, Inc. Reports Fourth Quarter and Full Year 2019 Results
RICHMOND, VA, January 28, 2020 /PRNewswire/ -- Bay Banks of Virginia, Inc. (OTCQB: BAYK), holding company of Virginia Commonwealth Bank and VCB Financial Group, Inc., announced financial results for the quarter and year ended December 31, 2019.
The company reported net income of $2.0 million, or $0.15 per diluted share, for the fourth quarter of 2019 compared to $1.8 million, or $0.14 per diluted share, for the third quarter of 2019 and $782 thousand, or $0.06 per diluted share, for the fourth quarter of 2018. Net income for the fourth quarter of 2018 included $483 thousand ($382 thousand1 after income taxes) of expenses incurred in connection with the company’s previously announced early retirement program.
For the year of 2019, the company reported net income of $7.1 million, or $0.54 per diluted share, compared to $3.9 million, or $0.30 per diluted share, for the year of 2018. Net income in the year of 2018 included $363 thousand ($287 thousand1 after income tax) of merger-related expenses incurred in connection with the company’s merger with Virginia BanCorp, Inc. on April 1, 2017 (the “Merger”).
Randal R. Greene, President and Chief Executive Officer, commented: “2019 was a year of great improvement with increasing profitability in each sequential quarter. We began the year with a focus on balance sheet management and low-cost deposit growth. Our overall loan portfolio shows minimal growth in 2019; however, net growth in our markets was nearly $79 million in 2019. Our portfolio of loans acquired in the Merger and subsequent purchases of consumer portfolios have declined from $290 million since the Merger to approximately $123 million at year-end 2019. We have sold more originated residential mortgages into the secondary market, grown noninterest-bearing deposits and continue to emphasize these accounts, and we’ve aggressively lowered deposit costs since the second quarter of 2019.”
Operating Results
Fourth Quarter 2019 compared to Third Quarter 2019
|
|
• |
Income before income taxes for the fourth quarter of 2019 was $2.5 million compared to $2.3 million for the third quarter of 2019. |
|
|
• |
Interest income for the three months ended December 31, 2019 was $13.0 million, on average interest-earning assets of $1.06 billion, compared to $12.8 million, on average interest-earning assets of $1.04 billion, for the three months ended September 30, 2019. Interest income in the fourth quarter of 2019 included accretion of acquired loan discounts of $929 thousand, while interest income in the third quarter of 2019 included $357 thousand of accretion of acquired loan discounts. Higher accretion in the fourth quarter of 2019 was primarily attributable to significant paydowns and payoffs of loans acquired in the Merger. Yields on average interest-earning assets were 4.87% for each of the sequential quarter periods, including the effect of accretion. Yields on average interest-earning assets in the fourth quarter of 2019 were positively affected by higher accretion of acquired loan discounts, which had a positive 21 basis point effect compared to yields in the third quarter of 2019. Negatively affecting yields on average interest-earning assets in the fourth quarter of 2019 were higher average balances of lower earning investment securities purchased in the quarter and lower yields on new loans originated in the latter part of the fourth quarter of 2019. |
|
|
• |
Interest expense was $3.9 million and $3.7 million for the three months ended December 31, 2019 and September 30, 2019, respectively, and cost of funds was 1.54% and 1.52% for the sequential quarter periods. Average interest-bearing liabilities were $860.4 million and $851.4 million for the fourth and third quarters of 2019, respectively. Interest expense on the company’s $25 million of 5.625% subordinated notes issued on October 7, 2019 and maturing on October 15, 2029 (the “2029 Notes”) contributed $354 thousand and 10 basis points to interest expense and cost of funds, respectively, in the fourth quarter of 2019. Cost of deposits was 1.34% for the fourth quarter of 2019, down six basis points from 1.40% for the third quarter of 2019. |
|
|
balances of lower earning investment securities, lower yields on interest-earning deposits and federal funds sold, and higher cost of funds. The 2029 Notes had a negative 10 basis point effect on NIM in the fourth quarter of 2019. |
|
|
• |
Provision for loan losses was $311 thousand in the fourth quarter of 2019 and was primarily attributable to net loan growth of approximately $17.2 million and net charge-offs from a select portfolio of purchased consumer loans. The majority of loans acquired in the Merger, which declined, carry no allowance for loan losses as they were recorded at fair value at the effective date of the Merger. Provision for loan losses of $495 thousand in the third quarter of 2019 was primarily attributable to net charge-offs from a select portfolio of purchased consumer loans, a specific reserve for a commercial and industrial loan, and net loan growth of $23.7 million. |
|
|
• |
Noninterest income for the three months ended December 31, 2019 and September 30, 2019 was $1.4 million and $1.2 million, respectively. Higher noninterest income in the fourth quarter of 2019 compared to the third quarter of 2019 was primarily due to wealth management income, which increased $69 thousand on a sequential quarter basis. |
|
|
• |
Noninterest expense for the three months ended December 31, 2019 and September 30, 2019 was $7.7 million and $7.4 million, respectively. Higher noninterest expense in the fourth quarter of 2019 was primarily due to higher salaries and employee benefits and higher Federal Deposit Insurance Corporation (“FDIC”) assessments, partially offset by lower net losses from other real estate owned. Higher salaries and employee benefits for the fourth quarter of 2019 were primarily due to required contributions to the company’s Employee Stock Ownership Plan (ESOP) and positive adjustments to the incentive accrual recorded in the third quarter of 2019. The company’s FDIC assessment for the third quarter of 2019 included the benefit of a small bank assessment credit of $171 thousand compared to a $55 thousand benefit in the fourth quarter of 2019. The company’s efficiency ratio for the fourth quarter of 2019 was 73.5% compared to 72.8% for the third quarter of 2019. |
|
|
• |
Income tax expense for the fourth quarter of 2019 was $469 thousand, reflective of a 19.0% effective income tax rate, while income tax expense for the third quarter of 2019 was $448 thousand, reflective of a 19.6% effective income tax rate. |
Full-Year 2019 compared to Full-Year 2018
|
|
• |
Income before income taxes for the year of 2019 was $8.7 million compared to $4.4 million for the year of 2018. |
|
|
• |
Interest income for the year ended December 31, 2019 was $50.4 million, on average interest-earning assets of $1.04 billion, compared to $43.8 million for the year ended December 31, 2018, on average interest-earning assets of $934.5 million. Interest income for the year ended December 31, 2019 included accretion of acquired loan discounts of $1.9 million, while interest income for the year ended December 31, 2018 included $1.8 million of accretion of acquired loan discounts. Yields on average interest-earning assets were 4.85% and 4.70% for the year of 2019 and 2018, respectively. The higher yield on average interest-earning assets in the 2019 period was primarily due to higher loan yields and higher accretion of acquired loan discounts of $163 thousand, which had a positive 2 basis point effect. |
|
|
• |
Interest expense was $15.1 million and $10.2 million for the years ended December 31, 2019 and 2018, respectively, and cost of funds was of 1.55% and 1.17% for the respective periods. Higher cost of funds in the year ended December 31, 2019 was primarily due to higher rates paid on deposits generated in the latter part of 2018, the repricing of maturing time deposits in a higher rate environment, the issuance of the 2029 Notes during the fourth quarter of 2019, greater use and cost of Federal Home Loan Bank of Atlanta advances, and higher interest rates in general. Average interest-bearing liabilities were $855.7 million and $768.8 million for the years ended December 31, 2019 and 2018, respectively. |
|
|
• |
NIM was 3.40% for the year ended December 31, 2019 compared to 3.61% for the year ended December 31, 2018. Lower NIM in the 2019 period was primarily due to higher cost of funds, partially offset by higher loan yields and higher accretion of acquired loan discounts. Higher accretion of acquired loan discounts had a positive 2 basis point effect on NIM in the 2019 period compared to the 2018 period. |
|
|
• |
Provision for loan losses was $1.2 million for the year ended December 31, 2019, primarily attributable to net loan growth of approximately $78.6 million and net charge-offs from a select portfolio of purchased consumer loans. The majority of loans acquired in the Merger, which declined, carry no allowance for loan losses as they were recorded at fair value at the effective date of the Merger. Provision for loan losses for the year ended December 31, 2018 was $1.4 million, which was primarily attributable net loan growth of $135.5 million during 2018. The 2018 period also included a $580 thousand benefit to correct for an overstatement in the company’s allowance for loan losses as of December 31, 2017, as previously reported. |
|
|
• |
Noninterest income for the years ended December 31, 2019 and 2018 was $5.0 million and $4.3 million, respectively. Noninterest income in the 2019 period reflects greater income from secondary market sales and servicing of $282 thousand, as the company sold a greater volume of mortgages originated in the 2019 period, while the 2018 period included a gain of $352 thousand on the curtailment of the company’s post-retirement benefit plan effective March 1, 2018. |
|
|
• |
Noninterest expense for the years ended December 31, 2019 and 2018 was $30.4 million and $32.1 million, respectively. Expenses associated with the succession of the company’s CFO and in the completion of the company’s 2017 year-end reporting incurred in the first half of 2018 were approximately $1.2 million. Merger-related expenses were $0 and $363 thousand for the years ended December 31, 2019 and 2018, respectively, and the 2018 period included $483 thousand of expenses incurred in connection with the company’s early retirement program noted above. |
|
|
income tax rate. The 2018 effective income tax rate was positively affected by higher than estimated income tax deductions reported in the company’s 2017 federal income tax return at the higher 2017 rate, as previously reported. |
Fourth Quarter 2019 compared to Fourth Quarter 2018
|
|
• |
Income before income taxes for the fourth quarter of 2019 was $2.5 million compared to $670 thousand for the fourth quarter of 2018. Income before income taxes, excluding the costs incurred in connection with the company’s early retirement program ($483 thousand), was $1.2 million1 for the fourth quarter of 2018. |
|
|
• |
Interest income for the three months ended December 31, 2019 was $13.0 million, on average interest-earning assets of $1.06 billion, compared to $11.7 million, on average interest-earning assets of $989.3 million, for the three months ended December 31, 2018. Interest income in the fourth quarters of 2019 and 2018 included accretion of acquired loan discounts of $929 thousand and $352 thousand, respectively. Yields on average interest-earning assets were 4.87% and 4.72% for the fourth quarters of 2019 and 2018, respectively. The increase in yield on average interest-earning assets was primarily attributable to higher accretion of loan discounts, which had a positive 22 basis point effect compared to the fourth quarter of 2018. |
|
|
• |
Interest expense was $3.9 million and $3.3 million for the three months ended December 31, 2019 and 2018, respectively, and cost of funds was 1.54% and 1.40%, for the respective periods. Higher costs of funds in the 2019 period was primarily due to higher cost of deposits of 1.34% in the 2019 period compared to 1.22% in the 2018 period, due to the reasons noted above. Average interest-bearing liabilities were $860.4 million and $817.2 million for the fourth quarters of 2019 and 2018, respectively. |
|
|
• |
NIM was 3.43% for the fourth quarter of 2019 compared to 3.41% for the fourth quarter of 2018. The increase in NIM was primarily attributable to higher accretion of loan discounts, partially offset by higher cost of funds. |
|
|
• |
Provision for loan losses was $311 thousand in the fourth quarter of 2019 and was primarily attributable to net loan growth of approximately $17.2 million and net charge-offs from a select portfolio of purchased consumer loans. The majority of loans acquired in the Merger, which declined, carry no allowance for loan losses as they were recorded at fair value at the effective date of the Merger. Provision for loan losses in the fourth quarter of 2018 was primarily attributable to an increase of $47.2 million of net loans in the quarter and higher reserves attributed to certain loan types, as the company's loan portfolio mix continues to shift from residential and consumer loans to commercial loans. |
|
|
• |
Noninterest income for the three months ended December 31, 2019 and 2018 was $1.4 million and $1.0 million, respectively. The increase quarter-over-quarter was primarily attributable to a gain on rabbi trust assets of $62 thousand in the 2019 period compared to a loss of $179 thousand in the 2018 period and higher secondary market sales and servicing income of $178 thousand. |
|
|
• |
Noninterest expense for the three months ended December 31, 2019 and 2018 was $7.7 million and $7.9 million, respectively. The fourth quarter of 2018 included $483 thousand of expenses incurred in connection with the company’s early retirement program. The company’s efficiency ratio for the fourth quarter of 2019 was 73.5% compared to 83.7% (78.6%1 excluding early retirement program expenses) for the same quarter of 2018. |
|
|
• |
Income tax expense for the fourth quarter of 2019 was $469 thousand, reflective of a 19.0% effective income tax rate. Income tax expense for the fourth quarter of 2018 was a benefit of $112 thousand, primarily attributable to higher than estimated tax deductions reported in the company’s 2017 federal income tax return and lower effective income tax rate for the full year of 2018, as previously reported. |
Balance Sheet
|
|
• |
Total assets were $1.13 billion and $1.08 billion at December 31, 2019 and 2018, respectively. |
|
|
• |
Loans, net of allowance for loan losses, were $916.6 million at December 31, 2019 compared to $894.2 million at December 31, 2018, a growth rate of approximately 2%. Excluding the payoff and amortization of approximately $56.5 million in the year of 2019 of purchased portfolio loans, including those acquired in the Merger, loan growth was approximately $78.6 million, or nearly 9%, for the year of 2019. |
|
|
• |
Deposits were $910.4 million at December 31, 2019 compared to $842.2 million at December 31, 2018. Noninterest-bearing demand accounts comprised 15.2% of total deposits at December 31, 2019, up from 13.6% at December 31, 2018. |
|
|
• |
Shareholders’ equity was $126.2 million and $117.5 million at December 31, 2019 and 2018, respectively, an increase of $8.7 million. The increase in shareholders’ equity in the year of 2019 was primarily attributable to net income of $7.1 million and $1.7 million of net unrealized gains on the company’s available-for-sale securities portfolio. Tangible book value, calculated as shareholders’ equity less goodwill and core deposit intangible assets, net of the associated deferred tax liability, divided by common shares outstanding, was $8.641 and $7.981 at December 31, 2019 and 2018, respectively. Pursuant to the company’s previously announced share repurchase program and shares purchased by operation of the ESOP, the company purchased 72,705 common shares at a weighted average price per share of $7.98 in the fourth quarter of 2019. Capital ratios for Virginia Commonwealth Bank were above regulatory minimum guidelines for well-capitalized banks as of December 31, 2019 and 2018. |
Asset Quality
|
|
• |
Nonperforming assets were $6.4 million, or 0.56% of total assets, as of December 31, 2019, compared to $9.4 million, or 0.84% of total assets, as of September 30, 2019, and $8.8 million, or 0.81% of total assets, as of December 31, 2018. The decrease in nonperforming assets as of December 31, 2019 was primarily attributable to an approximately $2.2 million balance decline of a commercial and industrial loan participation to a professional service firm, which announced plans to liquidate and subsequently filed for Chapter 7 bankruptcy in the third quarter of 2019, as previously reported. The loan balance as of December 31, 2019 was approximately $450 thousand compared to $2.7 million as of September 30, 2019. During the 2019 year, the company reduced its other real estate owned, net from $3.6 million at December 31, 2018 to $1.9 million at December 31, 2019. |
|
|
• |
The ratio of allowance for loan losses to total gross loans was 0.82%, 0.80%, and 0.88% at December 31, 2019, September 30, 2019, and December 31, 2018, respectively. The company’s allowance for loan losses does not include discounts recorded on loans acquired in the Merger, which were $1.9 million, $2.9 million, and $3.9 million as of December 31, 2019, September 30, 2019, and December 31, 2018, respectively. |
Outlook
Greene concluded: “As I look to 2020, we have set a goal to reach greater profitability and have charted the course to achieve this. We have a strong customer base on which to build and the management team who can deliver. I often receive unsolicited customer feedback stating that our employees have gone above and beyond to be responsive to our customers’ banking needs, expeditiously, and with a personal touch. It is our competitive advantage. We have the team, the customers, the capital, the support of our board of directors, and operate in the best Virginia markets.”
About Bay Banks of Virginia, Inc.
Bay Banks of Virginia, Inc. is the bank holding company for Virginia Commonwealth Bank and VCB Financial Group, Inc. Founded in the 1930s, Virginia Commonwealth Bank is headquartered in Richmond, Virginia. With 19 banking offices, including one loan production office, located throughout the greater Richmond region, the Northern Neck region, Middlesex County, and the Hampton Roads region, the bank serves businesses, professionals, and consumers with a wide variety of financial services, including retail and commercial banking, and mortgage banking. VCB Financial Group provides management services for personal and corporate trusts, including estate planning, estate settlement and trust administration, and investment and wealth management services.
Caution About Forward-Looking Statements
This press release contains statements concerning the company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements may constitute "forward-looking statements" as defined by federal securities laws. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the company include, but are not limited to: changes in interest rates and general economic conditions; the legislative/regulatory climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and Federal Reserve Board; the quality or composition of the loan or investment portfolios; demand for loan products; deposit flows; competition; demand for financial services in the company's market area; acquisitions and dispositions; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; and tax and accounting rules, principles, policies and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
For further information, contact Randal R. Greene, President and Chief Executive Officer, at 844-404-9668 or Judy C. Gavant, Executive Vice President and Chief Financial Officer, at 804-518-2606 or inquiries@baybanks.com.
1 See discussion of non-GAAP financial measures at the end of the Supplemental Financial Data tables that follow.
Supplemental Financial Data
CONSOLIDATED BALANCE SHEETS
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(Dollars in thousands, except share data) |
|
December 31, 2019 |
|
|
December 31, 2018 (1) |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
6,096 |
|
|
$ |
7,685 |
|
|
Interest-earning deposits |
|
|
34,358 |
|
|
|
18,981 |
|
|
Federal funds sold |
|
|
1,359 |
|
|
|
625 |
|
|
Certificates of deposit |
|
|
2,754 |
|
|
|
3,746 |
|
|
Available-for-sale securities, at fair value |
|
|
99,454 |
|
|
|
82,232 |
|
|
Restricted securities |
|
|
5,706 |
|
|
|
7,600 |
|
|
Loans receivable, net of allowance for loan losses of $7,562 and $7,902, respectively |
|
|
916,628 |
|
|
|
894,191 |
|
|
Loans held for sale |
|
|
1,231 |
|
|
|
368 |
|
|
Premises and equipment, net |
|
|
20,141 |
|
|
|
18,169 |
|
|
Accrued interest receivable |
|
|
3,035 |
|
|
|
3,172 |
|
|
Other real estate owned, net |
|
|
1,916 |
|
|
|
3,597 |
|
|
Bank owned life insurance |
|
|
19,752 |
|
|
|
19,270 |
|
|
Goodwill |
|
|
10,374 |
|
|
|
10,374 |
|
|
Mortgage servicing rights |
|
|
935 |
|
|
|
977 |
|
|
Core deposit intangible |
|
|
1,518 |
|
|
|
2,193 |
|
|
Other assets |
|
|
6,666 |
|
|
|
7,437 |
|
|
Total assets |
|
$ |
1,131,923 |
|
|
$ |
1,080,617 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
$ |
137,933 |
|
|
$ |
114,122 |
|
|
Savings and interest-bearing demand deposits |
|
|
382,607 |
|
|
|
359,400 |
|
|
Time deposits |
|
|
389,900 |
|
|
|
368,670 |
|
|
Total deposits |
|
|
910,440 |
|
|
|
842,192 |
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under repurchase agreements |
|
|
6,525 |
|
|
|
6,089 |
|
|
Federal Home Loan Bank advances |
|
|
45,000 |
|
|
|
100,000 |
|
|
Subordinated notes, net of unamortized issuance costs |
|
|
31,001 |
|
|
|
6,893 |
|
|
Other liabilities |
|
|
12,772 |
|
|
|
7,967 |
|
|
Total liabilities |
|
|
1,005,738 |
|
|
|
963,141 |
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Common stock ($5 par value; authorized - 30,000,000 shares; outstanding - 13,261,801 and 13,201,682 shares, respectively) (2) |
|
|
66,309 |
|
|
|
66,008 |
|
|
Additional paid-in capital |
|
|
36,658 |
|
|
|
36,972 |
|
|
Unearned employee stock ownership plan shares |
|
|
(1,525 |
) |
|
|
(1,734 |
) |
|
Retained earnings |
|
|
24,660 |
|
|
|
17,557 |
|
|
Accumulated other comprehensive income (loss), net |
|
|
83 |
|
|
|
(1,327 |
) |
|
Total shareholders' equity |
|
|
126,185 |
|
|
|
117,476 |
|
|
Total liabilities and shareholders' equity |
|
$ |
1,131,923 |
|
|
$ |
1,080,617 |
|
(1) Derived from audited December 31, 2018 Consolidated Financial Statements.
(2) Preferred stock is authorized; however, none was outstanding as of December 31, 2019 and December 31, 2018.
Supplemental Financial Data (Unaudited) – Continued
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
For the Three Months Ended |
|
|||||||||
|
(Dollars in thousands, except per share data) |
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
December 31, 2018 |
|
|||
|
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
12,149 |
|
|
$ |
11,930 |
|
|
$ |
10,899 |
|
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
573 |
|
|
|
553 |
|
|
|
569 |
|
|
Tax-exempt |
|
|
98 |
|
|
|
113 |
|
|
|
119 |
|
|
Federal funds sold |
|
|
12 |
|
|
|
6 |
|
|
|
3 |
|
|
Interest-earning deposit accounts |
|
|
149 |
|
|
|
145 |
|
|
|
128 |
|
|
Certificates of deposit |
|
|
16 |
|
|
|
18 |
|
|
|
17 |
|
|
Total interest income |
|
|
12,997 |
|
|
|
12,765 |
|
|
|
11,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
3,056 |
|
|
|
3,123 |
|
|
|
2,565 |
|
|
Securities sold under repurchase agreements |
|
|
3 |
|
|
|
4 |
|
|
|
3 |
|
|
Subordinated notes and other borrowings |
|
|
494 |
|
|
|
142 |
|
|
|
128 |
|
|
Federal Home Loan Bank advances |
|
|
301 |
|
|
|
465 |
|
|
|
568 |
|
|
Total interest expense |
|
|
3,854 |
|
|
|
3,734 |
|
|
|
3,264 |
|
|
Net interest income |
|
|
9,143 |
|
|
|
9,031 |
|
|
|
8,471 |
|
|
Provision for loan losses |
|
|
311 |
|
|
|
495 |
|
|
|
870 |
|
|
Net interest income after provision for loan losses |
|
|
8,832 |
|
|
|
8,536 |
|
|
|
7,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust management |
|
|
209 |
|
|
|
201 |
|
|
|
114 |
|
|
Service charges and fees on deposit accounts |
|
|
250 |
|
|
|
243 |
|
|
|
261 |
|
|
Wealth management |
|
|
254 |
|
|
|
185 |
|
|
|
284 |
|
|
Interchange fees, net |
|
|
108 |
|
|
|
108 |
|
|
|
118 |
|
|
Other service charges and fees |
|
|
27 |
|
|
|
32 |
|
|
|
25 |
|
|
Secondary market sales and servicing |
|
|
309 |
|
|
|
293 |
|
|
|
131 |
|
|
Increase in cash surrender value of bank owned life insurance |
|
|
119 |
|
|
|
122 |
|
|
|
123 |
|
|
Net losses on sale of available-for-sale securities |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
Net (losses) gains on disposition of other assets |
|
|
(1 |
) |
|
|
— |
|
|
|
11 |
|
|
Gain (loss) on rabbi trust assets |
|
|
62 |
|
|
|
— |
|
|
|
(179 |
) |
|
Other |
|
|
36 |
|
|
|
15 |
|
|
|
75 |
|
|
Total noninterest income |
|
|
1,373 |
|
|
|
1,200 |
|
|
|
963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
4,065 |
|
|
|
3,666 |
|
|
|
3,785 |
|
|
Occupancy |
|
|
809 |
|
|
|
805 |
|
|
|
993 |
|
|
Data processing |
|
|
530 |
|
|
|
541 |
|
|
|
583 |
|
|
Bank franchise tax |
|
|
209 |
|
|
|
209 |
|
|
|
195 |
|
|
Telecommunications and other technology |
|
|
313 |
|
|
|
258 |
|
|
|
226 |
|
|
FDIC assessments |
|
|
112 |
|
|
|
(7 |
) |
|
|
198 |
|
|
Foreclosed property |
|
|
35 |
|
|
|
48 |
|
|
|
66 |
|
|
Consulting |
|
|
108 |
|
|
|
156 |
|
|
|
133 |
|
|
Advertising and marketing |
|
|
84 |
|
|
|
124 |
|
|
|
92 |
|
|
Directors' fees |
|
|
153 |
|
|
|
148 |
|
|
|
179 |
|
|
Audit and accounting |
|
|
236 |
|
|
|
193 |
|
|
|
290 |
|
|
Legal |
|
|
69 |
|
|
|
20 |
|
|
|
120 |
|
|
Core deposit intangible amortization |
|
|
157 |
|
|
|
164 |
|
|
|
188 |
|
|
Net other real estate owned losses |
|
|
19 |
|
|
|
375 |
|
|
|
62 |
|
|
Other |
|
|
835 |
|
|
|
747 |
|
|
|
784 |
|
|
Total noninterest expense |
|
|
7,734 |
|
|
|
7,447 |
|
|
|
7,894 |
|
|
Income before income taxes |
|
|
2,471 |
|
|
|
2,289 |
|
|
|
670 |
|
|
Income tax expense (benefit) |
|
|
469 |
|
|
|
448 |
|
|
|
(112 |
) |
|
Net income |
|
$ |
2,002 |
|
|
$ |
1,841 |
|
|
$ |
782 |
|
|
Basic and diluted earnings per share |
|
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.06 |
|
Supplemental Financial Data (Unaudited) – Continued
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
For the Year Ended |
|
|||||
|
(Dollars in thousands, except per share data) |
|
December 31, 2019 |
|
|
December 31, 2018 |
|
||
|
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
46,998 |
|
|
$ |
40,752 |
|
|
Securities: |
|
|
|
|
|
|
|
|
|
Taxable |
|
|
2,298 |
|
|
|
1,961 |
|
|
Tax-exempt |
|
|
425 |
|
|
|
475 |
|
|
Federal funds sold |
|
|
43 |
|
|
|
17 |
|
|
Interest-earning deposit accounts |
|
|
581 |
|
|
|
528 |
|
|
Certificates of deposit |
|
|
73 |
|
|
|
70 |
|
|
Total interest income |
|
|
50,418 |
|
|
|
43,803 |
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
12,075 |
|
|
|
7,992 |
|
|
Securities sold under repurchase agreements |
|
|
14 |
|
|
|
13 |
|
|
Subordinated notes and other borrowings |
|
|
911 |
|
|
|
513 |
|
|
Federal Home Loan Bank advances |
|
|
2,085 |
|
|
|
1,707 |
|
|
Total interest expense |
|
|
15,085 |
|
|
|
10,225 |
|
|
Net interest income |
|
|
35,333 |
|
|
|
33,578 |
|
|
Provision for loan losses |
|
|
1,182 |
|
|
|
1,351 |
|
|
Net interest income after provision for loan losses |
|
|
34,151 |
|
|
|
32,227 |
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
Trust management |
|
|
830 |
|
|
|
710 |
|
|
Service charges and fees on deposit accounts |
|
|
977 |
|
|
|
768 |
|
|
Wealth management |
|
|
908 |
|
|
|
842 |
|
|
Interchange fees, net |
|
|
438 |
|
|
|
339 |
|
|
Other service charges and fees |
|
|
115 |
|
|
|
116 |
|
|
Secondary market sales and servicing |
|
|
941 |
|
|
|
659 |
|
|
Increase in cash surrender value of bank owned life insurance |
|
|
481 |
|
|
|
497 |
|
|
Net losses on sale of available-for-sale securities |
|
|
(1 |
) |
|
|
— |
|
|
Net losses on disposition of other assets |
|
|
(3 |
) |
|
|
(7 |
) |
|
Gain (losses) on rabbi trust assets |
|
|
192 |
|
|
|
(138 |
) |
|
Gain on curtailment of post-retirement benefit plan |
|
|
— |
|
|
|
352 |
|
|
Other |
|
|
80 |
|
|
|
165 |
|
|
Total noninterest income |
|
|
4,958 |
|
|
|
4,303 |
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
15,597 |
|
|
|
16,233 |
|
|
Occupancy |
|
|
3,319 |
|
|
|
3,528 |
|
|
Data processing |
|
|
2,268 |
|
|
|
2,436 |
|
|
Bank franchise tax |
|
|
864 |
|
|
|
726 |
|
|
Telecommunications and other technology |
|
|
1,040 |
|
|
|
831 |
|
|
FDIC assessments |
|
|
483 |
|
|
|
719 |
|
|
Foreclosed property |
|
|
145 |
|
|
|
175 |
|
|
Consulting |
|
|
526 |
|
|
|
1,068 |
|
|
Advertising and marketing |
|
|
384 |
|
|
|
439 |
|
|
Directors' fees |
|
|
678 |
|
|
|
561 |
|
|
Audit and accounting |
|
|
822 |
|
|
|
1,129 |
|
|
Legal |
|
|
199 |
|
|
|
500 |
|
|
Merger-related |
|
|
— |
|
|
|
363 |
|
|
Core deposit intangible amortization |
|
|
674 |
|
|
|
798 |
|
|
Net other real estate owned losses (gains) |
|
|
460 |
|
|
|
(107 |
) |
|
Other |
|
|
2,943 |
|
|
|
2,720 |
|
|
Total noninterest expense |
|
|
30,402 |
|
|
|
32,119 |
|
|
Income before income taxes |
|
|
8,707 |
|
|
|
4,411 |
|
|
Income tax expense |
|
|
1,649 |
|
|
|
533 |
|
|
Net income |
|
$ |
7,058 |
|
|
$ |
3,878 |
|
|
Basic and diluted earnings per share |
|
$ |
0.54 |
|
|
$ |
0.30 |
|
Supplemental Financial Data (Unaudited) – Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the |
|
||||||||||||||||||||||
|
|
|
As of and for the Three Months Ended |
|
|
Year Ended |
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
||||||||||||||||||||||||
|
(Dollars in thousands, except per share amounts) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||||||||||||||||||||||
|
Select Consolidated Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total assets |
|
$ |
1,131,923 |
|
|
$ |
1,112,219 |
|
|
$ |
1,094,260 |
|
|
$ |
1,103,840 |
|
|
$ |
1,080,617 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Cash, interest-earning deposits and federal funds sold |
|
|
41,813 |
|
|
|
31,405 |
|
|
|
24,604 |
|
|
|
30,677 |
|
|
|
27,291 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Available-for-sale securities, at fair value |
|
|
99,454 |
|
|
|
80,748 |
|
|
|
81,169 |
|
|
|
82,030 |
|
|
|
82,232 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Mortgage loans on real estate |
|
|
730,788 |
|
|
|
731,280 |
|
|
|
713,247 |
|
|
|
725,494 |
|
|
|
713,997 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Commercial and industrial |
|
|
181,730 |
|
|
|
186,281 |
|
|
|
187,531 |
|
|
|
173,360 |
|
|
|
164,608 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Consumer |
|
|
11,985 |
|
|
|
14,471 |
|
|
|
16,889 |
|
|
|
20,095 |
|
|
|
23,740 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Loans receivable |
|
|
924,503 |
|
|
|
932,032 |
|
|
|
917,667 |
|
|
|
918,949 |
|
|
|
902,345 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Unamortized net deferred loan fees |
|
|
(313 |
) |
|
|
(269 |
) |
|
|
(275 |
) |
|
|
(329 |
) |
|
|
(252 |
) |
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Allowance for loan losses (ALL) |
|
|
(7,562 |
) |
|
|
(7,495 |
) |
|
|
(7,479 |
) |
|
|
(7,858 |
) |
|
|
(7,902 |
) |
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Net loans |
|
|
916,628 |
|
|
|
924,268 |
|
|
|
909,913 |
|
|
|
910,762 |
|
|
|
894,191 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Loans held for sale |
|
|
1,231 |
|
|
|
268 |
|
|
|
593 |
|
|
|
— |
|
|
|
368 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Other real estate owned, net |
|
|
1,916 |
|
|
|
2,178 |
|
|
|
3,168 |
|
|
|
3,718 |
|
|
|
3,597 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total liabilities |
|
$ |
1,005,738 |
|
|
$ |
987,362 |
|
|
$ |
971,643 |
|
|
$ |
983,903 |
|
|
$ |
963,141 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Noninterest-bearing demand deposits |
|
|
137,933 |
|
|
|
124,670 |
|
|
|
116,229 |
|
|
|
112,315 |
|
|
|
114,122 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Savings and interest-bearing demand deposits |
|
|
382,607 |
|
|
|
372,404 |
|
|
|
374,175 |
|
|
|
371,587 |
|
|
|
359,400 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Time deposits |
|
|
389,900 |
|
|
|
396,614 |
|
|
|
385,218 |
|
|
|
372,751 |
|
|
|
368,670 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total deposits |
|
|
910,440 |
|
|
|
893,688 |
|
|
|
875,622 |
|
|
|
856,653 |
|
|
|
842,192 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Securities sold under repurchase agreements |
|
|
6,525 |
|
|
|
6,323 |
|
|
|
6,983 |
|
|
|
7,220 |
|
|
|
6,089 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Federal Home Loan Bank advances |
|
|
45,000 |
|
|
|
68,000 |
|
|
|
70,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Subordinated notes, net of unamortized issuance costs |
|
|
31,001 |
|
|
|
6,906 |
|
|
|
6,902 |
|
|
|
6,897 |
|
|
|
6,893 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Shareholders' equity |
|
|
126,185 |
|
|
|
124,857 |
|
|
|
122,617 |
|
|
|
119,937 |
|
|
|
117,476 |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Condensed Consolidated Statements of Operations |
|
||||||||||||||||||||||||||||||||||||||||||||
|
Interest income |
|
$ |
12,997 |
|
|
$ |
12,765 |
|
|
$ |
12,321 |
|
|
$ |
12,336 |
|
|
$ |
11,735 |
|
|
$ |
50,418 |
|
|
$ |
43,803 |
|
|||||||||||||||||
|
Interest expense |
|
|
3,854 |
|
|
|
3,734 |
|
|
|
3,844 |
|
|
|
3,653 |
|
|
|
3,264 |
|
|
|
15,085 |
|
|
|
10,225 |
|
|||||||||||||||||
|
Net interest income |
|
|
9,143 |
|
|
|
9,031 |
|
|
|
8,477 |
|
|
|
8,683 |
|
|
|
8,471 |
|
|
|
35,333 |
|
|
|
33,578 |
|
|||||||||||||||||
|
Provision for loan losses |
|
|
311 |
|
|
|
495 |
|
|
|
62 |
|
|
|
314 |
|
|
|
870 |
|
|
|
1,182 |
|
|
|
1,351 |
|
|||||||||||||||||
|
Noninterest income |
|
|
1,373 |
|
|
|
1,200 |
|
|
|
1,295 |
|
|
|
1,090 |
|
|
|
963 |
|
|
|
4,958 |
|
|
|
4,303 |
|
|||||||||||||||||
|
Noninterest expense |
|
|
7,734 |
|
|
|
7,447 |
|
|
|
7,592 |
|
|
|
7,630 |
|
|
|
7,894 |
|
|
|
30,402 |
|
|
|
32,119 |
|
|||||||||||||||||
|
Income before income taxes |
|
|
2,471 |
|
|
|
2,289 |
|
|
|
2,118 |
|
|
|
1,829 |
|
|
|
670 |
|
|
|
8,707 |
|
|
|
4,411 |
|
|||||||||||||||||
|
Income tax expense (benefit) |
|
|
469 |
|
|
|
448 |
|
|
|
395 |
|
|
|
337 |
|
|
|
(112 |
) |
|
|
1,649 |
|
|
|
533 |
|
|||||||||||||||||
|
Net income |
|
$ |
2,002 |
|
|
$ |
1,841 |
|
|
$ |
1,723 |
|
|
$ |
1,492 |
|
|
$ |
782 |
|
|
$ |
7,058 |
|
|
$ |
3,878 |
|
|||||||||||||||||
Supplemental Financial Data (Unaudited) – Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the |
|
|||||
|
|
|
As of and for the Three Months Ended |
|
|
Year Ended |
|
||||||||||||||||||||||
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|||||||
|
(Dollars in thousands, except per share amounts) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
|
Basic earnings per share |
|
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.13 |
|
|
$ |
0.11 |
|
|
$ |
0.06 |
|
|
$ |
0.54 |
|
|
$ |
0.30 |
|
|
Diluted earnings per share |
|
|
0.15 |
|
|
|
0.14 |
|
|
|
0.13 |
|
|
|
0.11 |
|
|
|
0.06 |
|
|
|
0.54 |
|
|
|
0.30 |
|
|
Book value per share |
|
|
9.51 |
|
|
|
9.36 |
|
|
|
9.20 |
|
|
|
9.01 |
|
|
|
8.90 |
|
|
|
|
|
|
|
|
|
|
Tangible book value per share (1) |
|
|
8.64 |
|
|
|
8.49 |
|
|
|
8.31 |
|
|
|
8.11 |
|
|
|
7.98 |
|
|
|
|
|
|
|
|
|
|
Shares outstanding at end of period |
|
|
13,261,801 |
|
|
|
13,334,302 |
|
|
|
13,332,484 |
|
|
|
13,313,537 |
|
|
|
13,201,682 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
|
13,071,708 |
|
|
|
13,077,600 |
|
|
|
13,059,824 |
|
|
|
13,001,182 |
|
|
|
13,050,791 |
|
|
|
13,053,080 |
|
|
|
13,057,537 |
|
|
Weighted average shares outstanding, diluted |
|
|
13,145,522 |
|
|
|
13,132,459 |
|
|
|
13,104,943 |
|
|
|
13,037,149 |
|
|
|
13,099,707 |
|
|
|
13,111,853 |
|
|
|
13,122,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measures and Other Metrics (tax-equivalent basis): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on average interest-earning assets |
|
|
4.87 |
% |
|
|
4.87 |
% |
|
|
4.77 |
% |
|
|
4.90 |
% |
|
|
4.72 |
% |
|
|
4.85 |
% |
|
|
4.70 |
% |
|
Accretion of discounts on acquired loans |
|
$ |
929 |
|
|
$ |
357 |
|
|
$ |
197 |
|
|
$ |
439 |
|
|
$ |
352 |
|
|
$ |
1,922 |
|
|
$ |
1,759 |
|
|
Cost of funds |
|
|
1.54 |
% |
|
|
1.52 |
% |
|
|
1.58 |
% |
|
|
1.54 |
% |
|
|
1.40 |
% |
|
|
1.55 |
% |
|
|
1.17 |
% |
|
Cost of deposits |
|
|
1.34 |
% |
|
|
1.40 |
% |
|
|
1.42 |
% |
|
|
1.34 |
% |
|
|
1.22 |
% |
|
|
1.37 |
% |
|
|
1.01 |
% |
|
Net interest spread |
|
|
3.09 |
% |
|
|
3.13 |
% |
|
|
2.97 |
% |
|
|
3.16 |
% |
|
|
3.14 |
% |
|
|
3.09 |
% |
|
|
3.37 |
% |
|
Net interest margin (NIM) |
|
|
3.43 |
% |
|
|
3.45 |
% |
|
|
3.29 |
% |
|
|
3.45 |
% |
|
|
3.41 |
% |
|
|
3.40 |
% |
|
|
3.61 |
% |
|
Average interest-earnings assets to total average assets |
|
|
94.2 |
% |
|
|
94.0 |
% |
|
|
93.9 |
% |
|
|
94.1 |
% |
|
|
93.8 |
% |
|
|
94.0 |
% |
|
|
93.5 |
% |
|
Return on average assets (annualized) |
|
|
0.71 |
% |
|
|
0.66 |
% |
|
|
0.62 |
% |
|
|
0.55 |
% |
|
|
0.30 |
% |
|
|
0.64 |
% |
|
|
0.39 |
% |
|
Operating return on average assets (annualized) (1) |
|
|
0.71 |
% |
|
|
0.66 |
% |
|
|
0.62 |
% |
|
|
0.55 |
% |
|
|
0.44 |
% |
|
|
0.64 |
% |
|
|
0.45 |
% |
|
Return on average equity (annualized) |
|
|
6.39 |
% |
|
|
5.97 |
% |
|
|
5.72 |
% |
|
|
5.05 |
% |
|
|
2.69 |
% |
|
|
5.79 |
% |
|
|
3.36 |
% |
|
Merger-related expense |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
363 |
|
|
Efficiency ratio |
|
|
73.5 |
% |
|
|
72.8 |
% |
|
|
77.7 |
% |
|
|
78.1 |
% |
|
|
83.7 |
% |
|
|
75.5 |
% |
|
|
84.8 |
% |
|
Operating efficiency ratio (1) |
|
|
73.5 |
% |
|
|
72.8 |
% |
|
|
77.7 |
% |
|
|
78.1 |
% |
|
|
78.6 |
% |
|
|
75.5 |
% |
|
|
82.6 |
% |
|
Average assets |
|
$ |
1,126,663 |
|
|
|
1,109,986 |
|
|
|
1,105,411 |
|
|
|
1,088,180 |
|
|
|
1,055,144 |
|
|
|
1,107,670 |
|
|
|
999,895 |
|
|
Average interest-earning assets |
|
|
1,061,227 |
|
|
|
1,043,243 |
|
|
|
1,037,527 |
|
|
|
1,024,058 |
|
|
|
989,327 |
|
|
|
1,041,622 |
|
|
|
934,528 |
|
|
Average interest-bearing liabilities |
|
|
860,421 |
|
|
|
851,392 |
|
|
|
857,355 |
|
|
|
853,611 |
|
|
|
817,225 |
|
|
|
855,703 |
|
|
|
768,826 |
|
|
Average shareholders' equity |
|
|
125,285 |
|
|
|
123,399 |
|
|
|
120,559 |
|
|
|
118,099 |
|
|
|
116,291 |
|
|
|
121,859 |
|
|
|
115,468 |
|
|
Shareholders' equity to total assets ratio |
|
|
11.1 |
% |
|
|
11.2 |
% |
|
|
11.2 |
% |
|
|
10.9 |
% |
|
|
10.9 |
% |
|
|
|
|
|
|
|
|
|
Tangible shareholders' equity to tangible total assets (1) |
|
|
10.2 |
% |
|
|
10.3 |
% |
|
|
10.2 |
% |
|
|
9.9 |
% |
|
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Data and Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
4,476 |
|
|
$ |
7,194 |
|
|
$ |
4,577 |
|
|
$ |
5,384 |
|
|
$ |
5,206 |
|
|
|
|
|
|
|
|
|
|
Other real estate owned, net |
|
|
1,916 |
|
|
|
2,178 |
|
|
|
3,168 |
|
|
|
3,718 |
|
|
|
3,597 |
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets |
|
|
6,392 |
|
|
|
9,372 |
|
|
|
7,745 |
|
|
|
9,102 |
|
|
|
8,803 |
|
|
|
|
|
|
|
|
|
|
Net charge-offs |
|
|
245 |
|
|
|
478 |
|
|
|
441 |
|
|
|
358 |
|
|
|
255 |
|
|
|
1,522 |
|
|
|
1,219 |
|
|
Net charge-offs to average loans (annualized) |
|
|
0.11 |
% |
|
|
0.21 |
% |
|
|
0.19 |
% |
|
|
0.16 |
% |
|
|
0.12 |
% |
|
|
0.17 |
% |
|
|
0.15 |
% |
|
Total nonperforming assets to total assets |
|
|
0.56 |
% |
|
|
0.84 |
% |
|
|
0.71 |
% |
|
|
0.82 |
% |
|
|
0.81 |
% |
|
|
|
|
|
|
|
|
|
Gross loans to total assets |
|
|
81.6 |
% |
|
|
83.8 |
% |
|
|
83.8 |
% |
|
|
83.2 |
% |
|
|
83.5 |
% |
|
|
|
|
|
|
|
|
|
ALL to gross loans |
|
|
0.82 |
% |
|
|
0.80 |
% |
|
|
0.82 |
% |
|
|
0.86 |
% |
|
|
0.88 |
% |
|
|
|
|
|
|
|
|
|
Discounts on acquired loans |
|
$ |
1,935 |
|
|
$ |
2,886 |
|
|
$ |
3,265 |
|
|
$ |
3,464 |
|
|
$ |
3,922 |
|
|
|
|
|
|
|
|
|
(1) Non-GAAP financial measure. See GAAP to Non-GAAP financial measure reconciliation at the end of the Supplemental Financial Data tables that follow.
Supplemental Financial Data (Unaudited) – Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the |
|
|||||
|
|
|
As of and for the Three Months Ended |
|
|
Year Ended |
|
||||||||||||||||||||||
|
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|||||||
|
(Dollars in thousands, except per share amounts) |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
|
Reconciliation of Non-GAAP Financial Measures (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
$ |
126,185 |
|
|
$ |
124,857 |
|
|
$ |
122,617 |
|
|
$ |
119,937 |
|
|
$ |
117,476 |
|
|
|
|
|
|
|
|
|
|
Less: intangible assets, net of deferred tax liability on core deposit intangible (a)(b) |
|
|
11,573 |
|
|
|
11,697 |
|
|
|
11,828 |
|
|
|
11,964 |
|
|
|
12,106 |
|
|
|
|
|
|
|
|
|
|
Tangible shareholders' equity |
|
$ |
114,612 |
|
|
$ |
113,160 |
|
|
$ |
110,789 |
|
|
$ |
107,973 |
|
|
$ |
105,370 |
|
|
|
|
|
|
|
|
|
|
Shares outstanding at end of period |
|
|
13,261,801 |
|
|
|
13,334,302 |
|
|
|
13,332,484 |
|
|
|
13,313,537 |
|
|
|
13,201,682 |
|
|
|
|
|
|
|
|
|
|
Tangible book value per share |
|
$ |
8.64 |
|
|
$ |
8.49 |
|
|
$ |
8.31 |
|
|
$ |
8.11 |
|
|
$ |
7.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible shareholders' equity to tangible total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,131,923 |
|
|
$ |
1,112,219 |
|
|
$ |
1,094,260 |
|
|
$ |
1,103,840 |
|
|
$ |
1,080,617 |
|
|
|
|
|
|
|
|
|
|
Less: intangible assets, net of deferred tax liability on core deposit intangible (a)(b) |
|
|
11,573 |
|
|
|
11,697 |
|
|
|
11,828 |
|
|
|
11,964 |
|
|
|
12,106 |
|
|
|
|
|
|
|
|
|
|
Tangible total assets |
|
$ |
1,120,350 |
|
|
$ |
1,100,522 |
|
|
$ |
1,082,432 |
|
|
$ |
1,091,876 |
|
|
$ |
1,068,511 |
|
|
|
|
|
|
|
|
|
|
Tangible shareholders' equity |
|
$ |
114,612 |
|
|
$ |
113,160 |
|
|
$ |
110,789 |
|
|
$ |
107,973 |
|
|
$ |
105,370 |
|
|
|
|
|
|
|
|
|
|
Tangible shareholders' equity to tangible total assets |
|
|
10.2 |
% |
|
|
10.3 |
% |
|
|
10.2 |
% |
|
|
9.9 |
% |
|
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select noninterest expenses, after-tax basis (ATB) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger-related expenses |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
363 |
|
|
Merger-related expenses, ATB (b) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Early retirement program expenses |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
483 |
|
|
$ |
— |
|
|
$ |
483 |
|
|
Early retirement program expenses, ATB (b) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
382 |
|
|
|
— |
|
|
|
382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating return on average assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,002 |
|
|
$ |
1,841 |
|
|
$ |
1,723 |
|
|
$ |
1,492 |
|
|
$ |
782 |
|
|
$ |
7,058 |
|
|
$ |
3,878 |
|
|
Add: Early retirement program expenses, ATB |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
382 |
|
|
|
— |
|
|
|
382 |
|
|
Add: Merger-related expenses, ATB |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
287 |
|
|
Operating net income |
|
$ |
2,002 |
|
|
$ |
1,841 |
|
|
$ |
1,723 |
|
|
$ |
1,492 |
|
|
$ |
1,164 |
|
|
$ |
7,058 |
|
|
$ |
4,546 |
|
|
Average assets |
|
$ |
1,126,663 |
|
|
$ |
1,109,986 |
|
|
$ |
1,105,411 |
|
|
$ |
1,088,180 |
|
|
$ |
1,055,144 |
|
|
$ |
1,107,670 |
|
|
$ |
999,895 |
|
|
Operating return on average assets |
|
|
0.71 |
% |
|
|
0.66 |
% |
|
|
0.62 |
% |
|
|
0.55 |
% |
|
|
0.44 |
% |
|
|
0.64 |
% |
|
|
0.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating efficiency ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
$ |
7,734 |
|
|
$ |
7,447 |
|
|
$ |
7,592 |
|
|
$ |
7,630 |
|
|
$ |
7,935 |
|
|
$ |
30,402 |
|
|
$ |
32,119 |
|
|
Less: Early retirement program expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
483 |
|
|
|
— |
|
|
|
483 |
|
|
Less: Merger-related expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
363 |
|
|
Operating noninterest expense |
|
|
7,734 |
|
|
|
7,447 |
|
|
|
7,592 |
|
|
|
7,630 |
|
|
|
7,147 |
|
|
|
30,402 |
|
|
|
31,273 |
|
|
Net interest income |
|
|
9,143 |
|
|
|
9,031 |
|
|
|
8,477 |
|
|
|
8,683 |
|
|
|
8,471 |
|
|
|
35,333 |
|
|
|
33,578 |
|
|
Noninterest income |
|
|
1,373 |
|
|
|
1,200 |
|
|
|
1,295 |
|
|
|
1,090 |
|
|
|
1,004 |
|
|
|
4,958 |
|
|
|
4,303 |
|
|
Operating efficiency ratio |
|
|
73.5 |
% |
|
|
72.8 |
% |
|
|
77.7 |
% |
|
|
78.1 |
% |
|
|
78.6 |
% |
|
|
75.5 |
% |
|
|
82.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-loan loss provision income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,002 |
|
|
$ |
1,841 |
|
|
$ |
1,723 |
|
|
$ |
1,492 |
|
|
$ |
782 |
|
|
$ |
7,058 |
|
|
$ |
3,878 |
|
|
Add: Income tax expense (benefit) |
|
|
469 |
|
|
|
448 |
|
|
|
395 |
|
|
|
337 |
|
|
|
(112 |
) |
|
|
1,649 |
|
|
|
533 |
|
|
Add: Provision for loan losses |
|
|
311 |
|
|
|
495 |
|
|
|
62 |
|
|
|
314 |
|
|
|
870 |
|
|
|
1,182 |
|
|
|
1,351 |
|
|
Pre-tax, pre-loan loss provision income |
|
$ |
2,782 |
|
|
$ |
2,784 |
|
|
$ |
2,180 |
|
|
$ |
2,143 |
|
|
$ |
1,540 |
|
|
$ |
9,889 |
|
|
$ |
5,762 |
|
(a) Excludes mortgage servicing rights.
(b) Assumes a federal income tax rate of 21%.
(1) Set forth above are calculations of each of the non-GAAP (generally accepted accounting principles) financial measures included in the Supplemental Financial Data tables. Tangible book value per share, tangible shareholders’ equity to tangible total assets ratio, select noninterest expenses on an after-tax basis, operating return on average assets, operating efficiency ratio, and pre-tax, pre-loan loss provision income are supplemental financial measures that are not required nor presented in accordance with GAAP. Management believes tangible book value per share and tangible shareholders’ equity to tangible total assets ratios are meaningful because they are measures management uses to assess capital levels. Management believes that select noninterest expenses on an after-tax basis, operating return on average assets, operating efficiency ratios, and pre-tax, pre-loan loss provision income are meaningful because management uses them to assess the financial performance of the company. Calculations of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.