Attached files
| file | filename |
|---|---|
| 8-K - FIRST COMMUNITY CORP /SC/ | e21251_fcco-8k.htm |
| News Release | |
| For Release April 21, 2021 | |
| 9:00 A.M. | |
| Contact: | D. Shawn Jordan, Executive Vice President & Chief Financial Officer or |
| Robin D. Brown, Executive Vice President & Chief Marketing Officer |
| (803) 951- 2265 |
First Community Corporation Announces First Quarter Results and Cash Dividend
Lexington, SC – April 21, 2021
Highlights for First Quarter 2021
| · | Net income of $3.3 million |
| · | Pre-tax pre-provision earnings of $4.3 million |
| · | Diluted EPS of $0.43 per common share |
| · | Pure (non-CD) deposit growth, including customer cash management accounts, of $103.5 million, a 37.7% annualized growth rate |
| · | Total loan growth of $24.9 million during the quarter. Loan growth, excluding Paycheck Protection Program (PPP) loans and a related credit facility, was $7.7 million, a 3.9% annualized growth rate |
| · | Key credit quality metrics continued to be strong during the quarter with net loan charge-offs of $8 thousand, non-performing assets ratio of 0.38%, and past due loans of 0.04% |
| · | Mortgage revenue of $990 thousand |
| · | Investment advisory revenue of $877 thousand. Assets under management exceeded $519 million at March 31, 2021. |
| · | Cash dividend of $0.12 per common share, the 77th consecutive quarter of cash dividends paid to common shareholders |
| · | Share Repurchase authorization of 375,000 shares which was previously announced on April 12, 2021 |
| · | J. Ted Nissen named President and Chief Banking Officer of First Community Bank as of March 1, 2021 |
Today, First Community Corporation (Nasdaq: FCCO), the holding company for First Community Bank, announced earnings and discussed the results of operations and the company’s activities during the first quarter of 2021.
First Community reported net income for the first quarter of 2021 of $3.3 million with diluted earnings per common share of $0.43. This compares to net income and diluted earnings per common share of $3.4 million and $0.46, respectively, on a linked quarter basis and $1.8 million and $0.24 year-over-year, respectively. Pre-tax pre-provision earnings during the first quarter of 2021 were $4.3 million. This compares to pre-tax pre-provision earnings of $4.6 million for fourth quarter of 2020 and pre-tax pre-provision earnings of $3.3 million for the first quarter of 2020.
Cash Dividend and Capital
The Board of Directors has approved a cash dividend for the first quarter of 2021 of $0.12 per common share. This dividend is payable on May 18, 2021 to shareholders of record of the company’s common stock as of May 4, 2021. First Community President and CEO, Mike Crapps commented, “The entire board is pleased that our performance enables the company to continue its cash dividend for the 77th consecutive quarter.”
On April 12, 2021, the Company announced that its Board of Directors approved the repurchase of up to 375,000 shares of its common stock, which represents approximately 5% of the Company’s 7,524,944 shares outstanding as of March 31, 2021. Under the repurchase plan, the Company may repurchase shares from time to time. Crapps noted, “This approved share repurchase provides us with some flexibility in managing capital going forward.”
Each of the regulatory capital ratios for the bank exceed the well capitalized minimum levels currently required by regulatory statute. At March 31, 2021, the bank’s regulatory capital ratios (Leverage, Tier I Risk Based and Total Risk Based) were 8.73%, 13.13%, and 14.26%, respectively. This compares to the same ratios as of March 31, 2020 of 9.91%, 13.35%, and 14.25%, respectively. As of March 31, 2021, the bank’s Common Equity Tier One ratio was 13.13% compared to 13.35% at March 31, 2020. Further, the company’s Tangible Common Equity to Tangible Assets ratio was 7.92% as of March 31, 2021 compared to 9.29% as of March 31, 2020.
Loan Portfolio Quality/Allowance for Loan and Lease Losses
The company’s asset quality metrics as of March 31, 2021 remained sound. The non-performing asset ratio was 0.38% of total assets with $5.6 million in non-performing assets compared to 0.50% and $7.0 million at December 31, 2020. Loans past due 30 days or more represented only 0.04% of the loan portfolio, down from 0.23% on a linked quarter. The ratio of classified loans plus OREO is 9.90% of total bank regulatory risk-based capital at March 31, 2021. During the first quarter, the bank experienced net loan charge-offs of $8 thousand. Other Loans Especially Mentioned decreased $4.3 million on a linked quarter and Substandard Loans increased the same amount, the result of the reclassification of one loan relationship. Rated loans as a percent of total loans declined on a linked quarter from 1.84% to 1.80%.
Mr. Crapps noted, “As a way to help our many local businesses and individuals navigate the challenges created by the pandemic, we proactively offered payment deferrals for up to 90 days to our loan customers.” The company reported that at its peak, there were payment deferments on loans totaling approximately $206.9 million (26.9% of the non-PPP loan portfolio). Loans in which payments were being deferred decreased to $8.7 million (1.1% of the non-PPP loan portfolio) at March 31, 2021. This is primarily the result of payments being restarted at the conclusion of their payment deferral period.
Even with strong credit quality metrics, due to the uncertainty of future credit losses related to the COVID-19 pandemic and its effect on local businesses, the bank recorded $177 thousand in provision expense in the first quarter of 2021 compared to $276 thousand in the fourth quarter of 2020 and $1.075 million in the first quarter of 2020. The ratio of the Allowance for Loan Loss to total loans increased to 1.22% at March 31, 2021 from 1.03% at March 31, 2020. Mr. Crapps commented, “Our credit metrics continue to indicate the current strong quality of our loan portfolio. This combined with the significant reduction in loans with payments deferred is good news for our company. At the same time, there is much unknown about the continued economic impact of the pandemic; therefore, we continue to prepare our balance sheet and our resources for an uncertain future.”
Balance Sheet
Total loans increased by $24.9 million during the first quarter of 2021. Non-PPP related loan growth including a related credit facility was $7.7 million in the first quarter of 2021, a 3.9% annualized growth rate. Non-PPP loan production was $40.2 million in the first quarter of 2021, which compares nicely to $33.5 million in the first quarter of 2020; however, growth was muted due to elevated payoffs and paydowns.
As of March 31, 2021, the bank had $64.7 million in PPP loans and a related credit facility on the balance sheet. First Community Bank President Ted Nissen noted, “As a community bank committed to the success of local businesses, we were pleased to be able to support our customers with access to the PPP funding. We are now in the process of working with our customers through the SBA forgiveness process. We anticipate this process will continue through year end and into 2022 while at the same time we wrap up the most recent round of PPP origination.”
Total deposits were $1.271 billion at March 31, 2021 compared to $1.189 billion at December 31, 2020. Pure deposits, which are defined as total deposits less certificates of deposits, increased $84 million, to $1.143 billion at March 31, 2021 from $1.059 billion at December 31, 2020, a 31.7% annualized growth rate. The bank had no brokered deposits and no listing services deposits at March 31, 2021. Securities sold under agreements to repurchase, which are related to customer cash management accounts or business sweep accounts, were $60.3 million at March 31, 2021 compared to $40.9 million at December 31, 2020, an increase of 47.4%. Costs of deposits decreased on a linked quarter basis to 0.17% in the first quarter of 2021 from 0.20% in the fourth quarter of 2020. Cost of funds also decreased on a linked quarter basis to 0.21% from 0.24% in the fourth quarter of 2020. Mr. Nissen commented, “A strength of our bank has been and continues to be our low-cost deposit base. The strong momentum in deposit growth we experienced during 2020 has continued into 2021. We have continued to grow pure deposits while at the same time further reducing our cost of deposits.”
Net Interest Income/Net Interest Margin
Net interest income was $10.6 million in the first quarter of 2021 compared to $10.7 million in the fourth quarter of 2020 and $9.4 million in the first quarter of 2020. The net interest margin, on a taxable equivalent basis, was 3.23% for the first quarter of 2021 compared to 3.31% in the fourth quarter of the 2020 and 3.55% in the first quarter of 2020. First quarter 2021 net interest margin, excluding PPP loans, on a tax equivalent basis was 3.16% compared to 3.28% in the fourth quarter of 2020. Mr. Shawn Jordan, Chief Financial Officer of First Community noted that “the excess liquidity in our balance sheet created by the additional stimulus programs weighed on our net interest margin during the first quarter of 2021.”
Non-Interest Income
Non-interest income for the first quarter of 2021 was $3.3 million, compared to $3.6 million in the fourth quarter of 2020 and $2.9 million in the first quarter of 2020. The mortgage line of business had fee revenue of $990 thousand in the first quarter of 2021 on production of $42.7 million. This compares to fee revenue and production year-over-year of $982 thousand and $35.3 million, respectively. While revenue was approximately equal to last year’s first quarter result, the gain-on-sale margin in the first quarter of 2021 was limited as we worked on certain loans not yet sold, in an effort to resolve processing and delivery issues. As we work to improve our mortgage processing and delivery efficiency, we anticipate the gain-on-sale margin will recover to more normal levels.
Revenue from the financial planning and investment advisory line of business increased 18.0% on a linked quarter basis to $877 thousand for the first quarter of 2021 compared to $743 thousand in the fourth quarter of 2020. Year over year, revenue increased 38.3% from $634 thousand in the first quarter of 2020. Assets Under Management (AUM) were $519.3 million at March 31, 2021 up from $501.0 million at December 31, 2020, an increase of 3.7% and up from $319.7 million at March 31, 2020, an increase of $62.4%.
Other non-interest income for the quarter includes $100 thousand from the collection of a summary judgment related to a loan charged off at a bank, which the company subsequently acquired.
Non-Interest Expense
Non-interest expense decreased on a linked quarter basis to $9.540 million in the first quarter of 2021 from $9.651 million in the fourth quarter of 2020. Salaries and employee benefit costs decreased $482 thousand on a linked quarter basis as the fourth quarter of 2020 included additional incentive accruals and higher mortgage commissions. Offsetting this were higher marketing expenses as this year’s marketing plan is concentrated in the early part of the year.
First Community Corporation stock trades on The NASDAQ Capital Market under the symbol “FCCO” and is the holding company for First Community Bank, a local community bank based in the Midlands of South Carolina. First Community Bank is a full-service commercial bank offering deposit and loan products and services, residential mortgage lending and financial planning/investment advisory services for businesses and consumers. First Community serves customers in the Midlands, Aiken, and Upstate, South Carolina markets as well as Augusta, Georgia. For more information, visit www.firstcommunitysc.com.
FORWARD-LOOKING STATEMENTS
This news release and certain statements by our management may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans, goals, projections and expectations, and are thus prospective. Forward looking statements can be identified by words such as “anticipate”, “expects”, “intends”, “believes”, “may”, “likely”, “will” or other statements that indicate future periods. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors, include, among others, the following: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected including, but not limited to, due to the negative impacts and disruptions resulting from the outbreak of the novel coronavirus, or COVID-19, on the economies and communities we serve, which has had and may continue to have an adverse impact on our business, operations, and performance, and could continue to have a negative impact on our credit portfolio, share price, borrowers, and on the economy as a whole both domestically and globally; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental, or legislative action, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act, or the “CARES Act”; (5) adverse conditions in the stock market, the public debt markets and other capital markets (including changes in interest rate conditions) could have a negative impact on the company; (6) technology and cybersecurity risks, including potential business disruptions, reputational risks, and financial losses, associated with potential attacks on or failures by our computer systems and computer systems of our vendors and other third parties; and (7) risks, uncertainties and other factors disclosed in our most recent Annual Report on Form 10-K filed with the SEC, or in any of our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed with the SEC since the end of the fiscal year covered by our most recently filed Annual Report on Form 10-K, which are available at the SEC’s Internet site (http://www.sec.gov).
Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. We can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that the future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
###
| FIRST COMMUNITY CORPORATION | ||||||||||||
| BALANCE SHEET DATA | ||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| As of | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Total Assets | $ | 1,492,494 | $ | 1,395,382 | $ | 1,185,307 | ||||||
| Other Short-term Investments1 | 88,389 | 46,062 | 25,637 | |||||||||
| Investment Securities | 407,547 | 361,919 | 290,943 | |||||||||
| Loans Held for Sale | 23,481 | 45,020 | 11,937 | |||||||||
| Loans | ||||||||||||
| Paycheck Protection Program (PPP) Loans | 61,836 | 42,242 | — | |||||||||
| Non-PPP Loans | 807,230 | 801,915 | 749,529 | |||||||||
| Total Loans | 869,066 | 844,157 | 749,529 | |||||||||
| Allowance for Loan Losses | 10,563 | 10,389 | 7,694 | |||||||||
| Goodwill | 14,637 | 14,637 | 14,637 | |||||||||
| Other Intangibles | 1,063 | 1,120 | 1,378 | |||||||||
| Total Deposits | 1,271,440 | 1,189,413 | 986,645 | |||||||||
| Securities Sold Under Agreements to Repurchase | 60,319 | 40,914 | 46,041 | |||||||||
| Federal Home Loan Bank Advances | — | — | — | |||||||||
| Junior Subordinated Debt | 14,964 | 14,964 | 14,964 | |||||||||
| Shareholders’ Equity | 132,687 | 136,337 | 124,614 | |||||||||
| Book Value Per Common Share | $ | 17.63 | $ | 18.18 | $ | 16.70 | ||||||
| Tangible Book Value Per Common Share | $ | 15.55 | $ | 16.08 | $ | 14.55 | ||||||
| Equity to Assets | 8.89 | % | 9.77 | % | 10.51 | % | ||||||
| Tangible Common Equity to Tangible Assets | 7.92 | % | 8.74 | % | 9.29 | % | ||||||
| Loan to Deposit Ratio (Includes Loans Held for Sale) | 70.20 | % | 74.76 | % | 77.18 | % | ||||||
| Loan to Deposit Ratio (Excludes Loans Held for Sale) | 68.35 | % | 70.97 | % | 75.97 | % | ||||||
| Allowance for Loan Losses/Loans | 1.22 | % | 1.23 | % | 1.03 | % | ||||||
| Regulatory Capital Ratios (Bank): | ||||||||||||
| Leverage Ratio | 8.73 | % | 8.84 | % | 9.91 | % | ||||||
| Tier 1 Capital Ratio | 13.13 | % | 12.83 | % | 13.35 | % | ||||||
| Total Capital Ratio | 14.26 | % | 13.94 | % | 14.25 | % | ||||||
| Common Equity Tier 1 Capital Ratio | 13.13 | % | 12.83 | % | 13.35 | % | ||||||
| Tier 1 Regulatory Capital | $ | 122,854 | $ | 120,385 | $ | 114,308 | ||||||
| Total Regulatory Capital | $ | 133,417 | $ | 130,774 | $ | 122,002 | ||||||
| Common Equity Tier 1 Capital | $ | 122,854 | $ | 120,385 | $ | 114,308 | ||||||
1 Includes federal funds sold, securities sold under agreement to resell and interest-bearing deposits
| Average Balances: | Three months ended | |||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Average Total Assets | $ | 1,435,259 | $ | 1,392,030 | $ | 1,176,350 | ||||||
| Average Loans (Includes Loans Held for Sale) | 886,379 | 892,771 | 753,659 | |||||||||
| Average Earning Assets | 1,339,053 | 1,296,891 | 1,077,242 | |||||||||
| Average Deposits | 1,208,081 | 1,181,772 | 969,377 | |||||||||
| Average Other Borrowings | 78,266 | 63,620 | 70,332 | |||||||||
| Average Shareholders’ Equity | 135,580 | 133,257 | 123,463 | |||||||||
| Asset Quality: | As of | |||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Loan Risk Rating by Category (End of Period) | ||||||||||||
| Special Mention | $ | 3,507 | $ | 7,757 | $ | 3,950 | ||||||
| Substandard | 12,137 | 7,810 | 4,467 | |||||||||
| Doubtful | — | — | — | |||||||||
| Pass | 853,422 | 828,590 | 741,112 | |||||||||
| $ | 869,066 | $ | 844,157 | $ | 749,529 | |||||||
| Nonperforming Assets | ||||||||||||
| Non-accrual Loans | $ | 4,520 | $ | 4,562 | $ | 1,739 | ||||||
| Other Real Estate Owned and Repossessed Assets | 1,076 | 1,201 | 1,481 | |||||||||
| Accruing Loans Past Due 90 Days or More | — | 1,260 | 168 | |||||||||
| Total Nonperforming Assets | $ | 5,596 | $ | 7,023 | $ | 3,388 | ||||||
| Accruing Trouble Debt Restructurings | $ | 1,515 | $ | 1,552 | $ | 1,635 | ||||||
| Three months ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Loans Charged-off | $ | 16 | $ | 1 | $ | 1 | ||||||
| Overdrafts Charged-off | 8 | 37 | 22 | |||||||||
| Loan Recoveries | (8 | ) | (22 | ) | (9 | ) | ||||||
| Overdraft Recoveries | (14 | ) | (16 | ) | (6 | ) | ||||||
| Net Charge-offs (Recoveries) | $ | 2 | $ | — | $ | 8 | ||||||
| Net Charge-offs / (Recoveries) to Average Loans2 | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
2 Annualized
| FIRST COMMUNITY CORPORATION | ||||||||||||
| INCOME STATEMENT DATA | ||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||
| Three months ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| Interest income | $ | 11,218 | $ | 11,426 | $ | 10,710 | ||||||
| Interest expense | 651 | 739 | 1,293 | |||||||||
| Net interest income | 10,567 | 10,687 | 9,417 | |||||||||
| Provision for loan losses | 177 | 276 | 1,075 | |||||||||
| Net interest income after provision | 10,390 | 10,411 | 8,342 | |||||||||
| Non-interest income | ||||||||||||
| Deposit service charges | 246 | 270 | 399 | |||||||||
| Mortgage banking income | 990 | 1,600 | 982 | |||||||||
| Investment advisory fees and non-deposit commissions | 877 | 743 | 634 | |||||||||
| Gain on sale of other assets | 77 | — | 6 | |||||||||
| Other | 1,106 | 991 | 907 | |||||||||
| Total non-interest income | 3,296 | 3,604 | 2,928 | |||||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 5,964 | 6,446 | 5,653 | |||||||||
| Occupancy | 730 | 651 | 643 | |||||||||
| Equipment | 275 | 303 | 318 | |||||||||
| Marketing and public relations | 396 | 100 | 354 | |||||||||
| FDIC assessment | 169 | 137 | 42 | |||||||||
| Other real estate expenses | 29 | 47 | 35 | |||||||||
| Amortization of intangibles | 57 | 68 | 105 | |||||||||
| Other | 1,920 | 1,899 | 1,888 | |||||||||
| Total non-interest expense | 9,540 | 9,651 | 9,038 | |||||||||
| Income before taxes | 4,146 | 4,364 | 2,232 | |||||||||
| Income tax expense | 891 | 928 | 438 | |||||||||
| Net income | $ | 3,255 | $ | 3,436 | $ | 1,794 | ||||||
| Per share data | ||||||||||||
| Net income, basic | $ | 0.44 | $ | 0.46 | $ | 0.24 | ||||||
| Net income, diluted | $ | 0.43 | $ | 0.46 | $ | 0.24 | ||||||
| Average number of shares outstanding - basic | 7,475,522 | 7,463,583 | 7,427,257 | |||||||||
| Average number of shares outstanding - diluted | 7,522,568 | 7,503,184 | 7,472,956 | |||||||||
| Shares outstanding period end | 7,524,944 | 7,500,338 | 7,462,247 | |||||||||
| Return on average assets | 0.92 | % | 0.98 | % | 0.61 | % | ||||||
| Return on average common equity | 9.74 | % | 10.26 | % | 5.84 | % | ||||||
| Return on average common tangible equity | 11.01 | % | 11.64 | % | 6.72 | % | ||||||
| Net interest margin (non taxable equivalent) | 3.20 | % | 3.28 | % | 3.52 | % | ||||||
| Net interest margin (taxable equivalent) | 3.23 | % | 3.31 | % | 3.55 | % | ||||||
| Efficiency ratio1 | 69.16 | % | 67.05 | % | 72.79 | % | ||||||
1 Calculated by dividing non-interest expense by net interest income on a tax equivalent basis and non interest income, excluding gain on sale of other assets and other non-recurring noninterest income.
| FIRST COMMUNITY CORPORATION | ||||||||||||||||||||||||
| Yields on Average Earning Assets and | ||||||||||||||||||||||||
| Rates on Average Interest-Bearing Liabilities | ||||||||||||||||||||||||
| Three months ended March 31, 2021 | Three months ended March 31, 2020 | |||||||||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||||||||||
| Balance | Earned/Paid | Rate | Balance | Earned/Paid | Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Earning assets | ||||||||||||||||||||||||
| Loans | ||||||||||||||||||||||||
| PPP loans | $ | 55,540 | $ | 684 | 4.99 | % | $ | — | $ | — | NA | |||||||||||||
| Non-PPP loans | 830,839 | 8,767 | 4.28 | % | 753,659 | 8,827 | 4.71 | % | ||||||||||||||||
| Total loans | 886,379 | 9,451 | 4.32 | % | 753,659 | 8,827 | 4.71 | % | ||||||||||||||||
| Securities | 373,340 | 1,734 | 1.88 | % | 286,332 | 1,726 | 2.42 | % | ||||||||||||||||
| Other short-term investments | 79,334 | 33 | 0.17 | % | 37,251 | 157 | 1.70 | % | ||||||||||||||||
| Total earning assets | 1,339,053 | 11,218 | 3.40 | % | 1,077,242 | 10,710 | 4.00 | % | ||||||||||||||||
| Cash and due from banks | 18,429 | 15,032 | ||||||||||||||||||||||
| Premises and equipment | 34,351 | 35,002 | ||||||||||||||||||||||
| Goodwill and other intangibles | 15,726 | 16,063 | ||||||||||||||||||||||
| Other assets | 38,124 | 39,691 | ||||||||||||||||||||||
| Allowance for loan losses | (10,424 | ) | (6,680 | ) | ||||||||||||||||||||
| Total Assets | $ | 1,435,259 | $ | 1,176,350 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 277,476 | $ | 58 | 0.08 | % | $ | 216,198 | $ | 103 | 0.19 | % | ||||||||||||
| Money market accounts | 254,412 | 141 | 0.22 | % | 198,292 | 350 | 0.71 | % | ||||||||||||||||
| Savings deposits | 125,981 | 19 | 0.06 | % | 103,776 | 29 | 0.11 | % | ||||||||||||||||
| Time deposits | 160,321 | 301 | 0.76 | % | 169,397 | 537 | 1.27 | % | ||||||||||||||||
| Other borrowings | 78,266 | 132 | 0.68 | % | 70,332 | 274 | 1.57 | % | ||||||||||||||||
| Total interest-bearing liabilities | 896,456 | 651 | 0.29 | % | 757,995 | 1,293 | 0.69 | % | ||||||||||||||||
| Demand deposits | 389,891 | 281,714 | ||||||||||||||||||||||
| Other liabilities | 13,332 | 13,178 | ||||||||||||||||||||||
| Shareholders’ equity | 135,580 | 123,463 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,435,259 | $ | 1,176,350 | ||||||||||||||||||||
| Cost of deposits, including demand deposits | 0.17 | % | 0.42 | % | ||||||||||||||||||||
| Cost of funds, including demand deposits | 0.21 | % | 0.50 | % | ||||||||||||||||||||
| Net interest spread | 3.11 | % | 3.31 | % | ||||||||||||||||||||
| Net interest income/margin - excluding PPP loans | $ | 9,883 | 3.12 | % | $ | 9,417 | 3.52 | % | ||||||||||||||||
| Net interest income/margin - including PPP loans | $ | 10,567 | 3.20 | % | $ | 9,417 | 3.52 | % | ||||||||||||||||
| Net interest income/margin (tax equivalent) - excl. PPP loans | $ | 9,991 | 3.16 | % | $ | 9,495 | 3.55 | % | ||||||||||||||||
| Net interest income/margin (tax equivalent) - incl. PPP loans | $ | 10,675 | 3.23 | % | $ | 9,495 | 3.55 | % | ||||||||||||||||
The tables below provide a reconciliation of non-GAAP measures to GAAP for the periods indicated:
| March 31, | December 31, | March 31, | ||||||||||
| Tangible book value per common share | 2021 | 2020 | 2020 | |||||||||
| Tangible common equity per common share (non-GAAP) | $ | 15.55 | $ | 16.08 | $ | 14.55 | ||||||
| Effect to adjust for intangible assets | 2.08 | 2.10 | 2.15 | |||||||||
| Book value per common share (GAAP) | $ | 17.63 | $ | 18.18 | $ | 16.70 | ||||||
| Tangible common shareholders’ equity to tangible assets | ||||||||||||
| Tangible common equity to tangible assets (non-GAAP) | 7.92 | % | 8.74 | % | 9.29 | % | ||||||
| Effect to adjust for intangible assets | 0.97 | % | 1.03 | % | 1.22 | % | ||||||
| Common equity to assets (GAAP) | 8.89 | % | 9.77 | % | 10.51 | % | ||||||
| Three months ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| Return on average tangible common equity | 2021 | 2020 | 2020 | |||||||||
| Return on average tangible common equity (non-GAAP) | 11.01 | % | 11.64 | % | 6.72 | % | ||||||
| Effect to adjust for intangible assets | (1.27 | )% | (1.38 | )% | (0.88 | )% | ||||||
| Return on average common equity (GAAP) | 9.74 | % | 10.26 | % | 5.84 | % | ||||||
| Three months ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| Pre-tax, pre-provision earnings | 2021 | 2020 | 2020 | |||||||||
| Pre-tax, pre-provision earnings (non-GAAP) | $ | 4,323 | $ | 4,640 | $ | 3,307 | ||||||
| Effect to adjust for pre-tax, pre-provision earnings | (1,068 | ) | (1,204 | ) | (1,513 | ) | ||||||
| Net income (GAAP) | $ | 3,255 | $ | 3,436 | $ | 1,794 | ||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| Net interest margin excluding PPP Loans | 2021 | 2020 | ||||||
| Net interest margin excluding PPP loans (non-GAAP) | 3.12 | % | 3.52 | % | ||||
| Effect to adjust for PPP loans | 0.08 | % | N/A | |||||
| Net interest margin (GAAP) | 3.20 | % | 3.52 | % | ||||
| Three months ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| Net interest margin on a tax-equivalent basis excluding PPP Loans | 2021 | 2020 | 2020 | |||||||||
| Net interest margin on a tax-equivalent basis excluding PPP loans (non-GAAP) | 3.16 | % | 3.28 | % | 3.55 | % | ||||||
| Effect to adjust for PPP loans | 0.07 | % | 0.03 | % | N/A | |||||||
| Net interest margin on a tax equivalent basis (GAAP) | 3.23 | % | 3.31 | % | 3.55 | % | ||||||
| March 31, | March 31, | Growth | Annualized Growth | |||||||||||||
| Loans and loan growth | 2021 | 2020 | Dollars | Rate | ||||||||||||
| Non-PPP Loans and Related Credit Facilities (non-GAAP) | $ | 804,377 | 749,529 | 54,848 | 7.3 | % | ||||||||||
| PPP Related Credit Facilities | 2,853 | 0 | 2,853 | N/A | ||||||||||||
| Non-PPP Loans (non-GAAP) | $ | 807,230 | $ | 749,529 | $ | 57,701 | 7.7 | % | ||||||||
| PPP Loans | 61,836 | 0 | 61,836 | N/A | ||||||||||||
| Total Loans (GAAP) | $ | 869,066 | $ | 749,529 | $ | 119,537 | 15.9 | % | ||||||||
| March 31, | December 31, | Growth | Annualized Growth | |||||||||||||
| Loans and loan growth | 2021 | 2020 | Dollars | Rate | ||||||||||||
| Non-PPP Loans and Related Credit Facilities (non-GAAP) | $ | 804,377 | 796,727 | 7,650 | 3.9 | % | ||||||||||
| PPP Related Credit Facilities | 2,853 | 5,188 | (2,335 | ) | (182.5 | )% | ||||||||||
| Non-PPP Loans (non-GAAP) | $ | 807,230 | $ | 801,915 | $ | 5,315 | 2.7 | % | ||||||||
| PPP Loans | 61,836 | 42,242 | 19,594 | 188.1 | % | |||||||||||
| Total Loans (GAAP) | $ | 869,066 | $ | 844,157 | $ | 24,909 | 12.0 | % | ||||||||
Certain financial information presented above is determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures include “Tangible book value per common share,” “Tangible common shareholders’ equity to tangible assets,” “Return on average tangible common equity,” “Pre-tax, pre-provision earnings,” “Net interest margin excluding PPP Loans,” “Net interest margin on a tax-equivalent basis excluding PPP Loans,” “Non-PPP Loans and Related Credit Facilities,” and “Non-PPP Loans.”
| · | “Tangible book value per common share” is defined as total equity reduced by recorded intangible assets divided by total common shares outstanding. |
| · | “Tangible common shareholders’ equity to tangible assets” is defined as total common equity reduced by recorded intangible assets divided by total assets reduced by recorded intangible assets. |
| · | “Return on average tangible common equity” is defined as net income on an annualized basis divided by average total equity reduced by average recorded intangible assets. |
| · | “Pre-tax, pre-provision earnings” is defined as net interest income plus non-interest income, reduced by non-interest expense. |
| · | “Net interest margin excluding PPP Loans” is defined as annualized net interest income less annualized interest income on PPP Loans divided by average earning assets less the average balance of PPP Loans. |
| · | “Net interest margin on a tax-equivalent basis excluding PPP Loans” is defined as annualized net interest income on a tax-equivalent basis less annualized interest income on PPP Loans divided by average earning assets less the average balance of PPP Loans. |
| · | “Non-PPP Loans and Related Credit Facilities” is defined as Total Loans less PPP Related Credit Facilities and PPP Loans. |
| · | “Non-PPP Loans” is defined as Total Loans less PPP Loans. |
| · | “Non-PPP Loans and Related Credit Facilities Growth - Dollars” is calculated by taking the difference between two time periods compared for Total Loans less PPP Loans and PPP Related Credit Facilities. “Non-PPP Loans and Related Credit Facilities – Annualized Growth Rate” is calculated by (i) dividing “Non-PPP Loans and Related Credit Facilities Loan Growth - Dollars” by the number of days between the two time periods compared (ii) times the number of days in the year (iii) divided by the prior time period Non-PPP Loans and Related Credit Facilities balance. |
| · | “Non-PPP Loans Growth - Dollars” is calculated by taking the difference between two time periods compared for Total Loans less PPP Loans. “Non-PPP Loans – Annualized Growth Rate” is calculated by (i) dividing “Non-PPP Loans Loan Growth - Dollars” by the number of days between the two time periods compared (ii) times the number of days in the year (iii) divided by the prior time period Non-PPP Loans balance. |
Our management believes that these non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare our operating results from period-to-period in a meaningful manner. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company’s results as reported under GAAP.