Access National Corporation ANCX (the "Corporation" or "Access"), parent company for Access National Bank (the "Bank") and Middleburg Investment Group, reported fourth quarter 2017 net income of $3.0 million, or $0.15 per diluted share. Excluding a one-time tax adjustment related to the Tax Cuts and Jobs Act of 2017 and provision expense related to one large commercial credit, net income was $8.6 million or $0.42 per diluted share. This represents the Corporation's 70th consecutive quarterly profit over its 72 quarter history. Consistent with management's renewed objective of a 40% dividend payout of sustainable core earnings, the Board of Directors declared a dividend of $0.15 per share for common shareholders of record as of February 12, 2018 and payable on February 23, 2018.
Highlights
- Reported fourth quarter earnings of $3.0 million or $0.15 per diluted share. Excluding $3.1 million in pre-tax ($2.1 million after tax) provision expense related to one large commercial credit and $3.5 million in tax expense related to the Tax Cuts and Jobs Act of 2017 ("Act"), earnings were $8.6 million after tax or $0.42 per diluted share;
- Tangible book value1 per common share was $11.52 at December 31, 2017, a decrease of $0.12 from the prior period. Excluding the $3.5 million tax expense related to the Act, tangible book value per common share was $11.69;
- Loans held for investment were $1.98 billion at December 31, 2017 compared to $1.05 billion at December 31, 2016, a year-over-year growth of 88.5%. Organic loan growth from the linked quarter was $34.8 million prior to the strategic sale of $17.2 million of non-core residential real estate loans and the disposition of a deteriorating commercial loan of $8.5 million; and
- Non-interest bearing demand deposits of $745.0 million were 33.3% of total deposits at December 31, 2017 compared to $362.0 million at December 31, 2016, a year-over-year growth of 105.8%.
The transformative combination of Access National with Middleburg Financial continues on a successful progression. "We continue to work on putting acquisition distractions behind us and believe the stage is set for a promising 2018. In spite of the noise this quarter with the tax adjustment and loan portfolio repositioning, we remain on target with the financial objectives of our merger. Furthermore, we continue to implement a program of enhanced focus on our target markets that is producing results in the most desirable segments of the deposit and loan portfolios. We are confident in our ability to meet our renewed growth targets in 2018 of $200 million per annum in net deposit and loan growth."
Fourth quarter 2017 pre-tax earnings were $9.0 million, down from the $9.4 million reported in the third quarter of 2017 due mainly to an impaired credit loss of $3.1 million pre-tax. The commercial banking segment's net interest income declined $636 thousand from the linked quarter, from $24.4 million to $23.7 million. The commercial banking segment's other expense reflected an increase of $101 thousand when compared to the third quarter of 2017 and included a $3.1 million pre-tax provision expense.
The net interest margin on a fully tax equivalent (non-GAAP) basis decreased to 3.83% from 3.86% when comparing fourth quarter to third quarter 2017. Fourth quarter net interest margin exclusive of the $1.2 million credit mark accretion for the acquired loan portfolio and the $3 thousand in liability discount amortization was 3.77% for the three months ended December 31, 2017.
Total deposits at December 31, 2017 were $2.2 billion, down slightly from the $2.3 billion at September 30, 2017 while non-interest bearing deposits increased $34.3 million from the linked quarter, to $745.0 million. While non-interest bearing demand deposits remain the largest and most attractive source of funding for the Corporation, the combination of legacy Middleburg's significant low cost interest-bearing demand deposits and legacy Access' non-interest bearing demand deposits accounted for $1.2 billion or 55.6% of total deposits at December 31, 2017. Interest-bearing deposits decreased to $1.5 billion at December 31, 2017 when compared to $1.6 billion from the prior quarter. Brokered deposits as a percentage of the deposit portfolio decreased quarter over quarter, from 3.1% of the portfolio at September 30, 2017 to 2.3% at December 31, 2017, a decrease of $20.1 million. The go-forward strategy places a high priority on the maintenance and expansion of core deposits, particularly high value demand deposit relationships.
Prior to the strategic sale and disposition of $25.7 million in loans, organic loan growth during the fourth quarter was $34.8 million. Organic loan growth net of run-off totaled $116 million for the three quarters since the acquisition of Middleburg Financial Corporation. Acquired non-core residential real estate loans in the amount $17.2 million were sold to mitigate interest rate risk and provide portfolio capacity for relationship focused credits. A gain on the sale of this portfolio was recognized in the amount of $136 thousand pre-tax as well as the recognition of $481 thousand in pre-tax credit and fair value marks. Separately, a deteriorating commercial loan relationship in the amount $8.5 million was sold for $4.9 million, creating a loss of $3.6 million charged to the reserve. This charge accounted for the majority of the $3.7 million provision expense during the quarter. In careful analysis in reaching the decision to exit this relationship, management concluded the credit was destined to become a non-accrual loan in the very near term and generate losses over a prolonged work out or liquidation at a level well beyond the incurred charge.
Non-performing assets ("NPAs") decreased to $5.3 million at December 31, 2017 from $7.8 million at September 30, 2017, representing 0.18% and 0.27% of total assets, respectively. Included in the NPAs total is $643 thousand in other real estate owned, a reduction of $1.4 million over the prior quarter. The allowance for loan loss was $15.8 million and $15.7 million at December 31, 2017 and September 30, 2017, respectively, and represented 0.80% of total loans held for investment at December 31, 2017 and September 30, 2017. The remaining credit and fair value marks on the loans acquired in the merger totaled $12.4 million at December 31, 2017.
Tangible book value2 per common share decreased from $11.64 at September 30, 2017 to $11.52 at December 31, 2017. The tangible common equity ratio for Access National Corporation and its subsidiary bank was 8.79% at December 31, 2017, within 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".
Forward-Looking Statements
The information presented herein contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding expectations or predictions of future financial or business performance or conditions. Forward-looking statements may be identified by words such as "may," "could," "will," "expect," "believe," "anticipate," "forecast," "intend," "plan," "prospects," "estimate," "potential," or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements in this report may include, but are not limited to, statements about projected impacts of and financial results generated by the merger of Access and Middleburg Financial Corporation ("Middleburg"). Forward-looking statements speak only as of the date they are made and Access assumes no duty to update forward-looking statements.
In addition to factors previously disclosed in Access's reports filed with the SEC and those identified elsewhere in this release, the following factors, among others, could cause actual results to differ materially from the results expressed in or implied by forward-looking statements and historical performance: changes in asset quality and credit risk; changes in interest rates and capital markets; the introduction, timing and success of business initiatives; competitive conditions; and the inability to recognize cost savings or revenues or to implement integration plans associated with the merger of Access and Middleburg.
__________ |
||
1 | Non-GAAP financial information. See "Reconciliation of Non-GAAP Financial Measures" at end of release. | |
2 | Non-GAAP financial information. See "Reconciliation of Non-GAAP Financial Measures" at end of release. | |
Access National Corporation | ||||||||
Consolidated Balance Sheet | ||||||||
December 31, | December 31, | |||||||
2017 | 2016 | |||||||
(In Thousands Except for Share and Per Share Data) | (Unaudited) | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 29,855 | $ | 9,186 | ||||
Interest-bearing balances and federal funds sold | 92,458 | 81,873 | ||||||
Investment securities: | ||||||||
Available-for-sale, at fair value | 407,446 | 194,090 | ||||||
Held-to-maturity, at amortized cost (fair value of $16,379 and $9,293, respectively) | 15,721 | 9,200 | ||||||
Total investment securities | 423,167 | 203,290 | ||||||
Restricted Stock, at amortized cost | 16,572 | 10,092 | ||||||
Loans held for sale - at fair value | 31,999 | 35,676 | ||||||
Loans held for investment net of allowance for loan losses of $15,805 and $16,008, respectively |
1,963,104 | 1,033,690 | ||||||
Premises, equipment and land, net | 27,797 | 7,084 | ||||||
Goodwill and intangible assets | 185,161 | 1,833 | ||||||
Other assets | 103,781 | 47,984 | ||||||
Total assets | $ | 2,873,894 | $ | 1,430,708 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
LIABILITIES | ||||||||
Noninterest-bearing deposits | $ | 744,960 | $ | 362,036 | ||||
Interest-bearing demand deposits | 496,677 | 126,189 | ||||||
Savings and interest-bearing deposits | 623,889 | 314,396 | ||||||
Time deposits | 368,622 | 251,706 | ||||||
Total deposits | 2,234,148 | 1,054,327 | ||||||
Short-term borrowings | 145,993 | 186,009 | ||||||
Long-term borrowings | 40,000 | 60,000 | ||||||
Trust preferred debentures | 3,883 | - | ||||||
Other liabilities and accrued expenses | 28,246 | 9,842 | ||||||
Total Liabilities | 2,452,270 | 1,310,178 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Common stock $0.835 par value; 60,000,000 authorized; issued and outstanding, 20,534,163 and 10,636,242 , respectively |
17,146 | 8,881 | ||||||
Additional paid in capital | 307,614 | 21,779 | ||||||
Retained earnings | 98,584 | 91,439 | ||||||
Accumulated other comprehensive income (loss), net | (1,720 | ) | (1,569 | ) | ||||
Total shareholders' equity | 421,624 | 120,530 | ||||||
Total liabilities and shareholders' equity | $ | 2,873,894 | $ | 1,430,708 | ||||
Access National Corporation | ||||||||||||
Consolidated Statement of Operations | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | |||||||||
(In Thousands Except for Share and Per Share Data) | (unaudited) | (unaudited) | ||||||||||
INTEREST INCOME | ||||||||||||
Interest and fees on loans | $ | 24,321 | $ | 11,762 | $ | 84,572 | $ | 45,639 | ||||
Interest on federal funds sold and bank balances | 453 | 73 | 1,199 | 337 | ||||||||
Interest and dividends on securities | 2,321 | 1,085 | 9,709 | 4,039 | ||||||||
Total interest income | 27,095 | 12,920 | 95,480 | 50,015 | ||||||||
INTEREST EXPENSE | ||||||||||||
Interest on deposits | 2,714 | 1,376 | 9,274 | 5,150 | ||||||||
Interest on other borrowings | 468 | 287 | 1,834 | 1,154 | ||||||||
Total interest expense | 3,182 | 1,663 | 11,108 | 6,304 | ||||||||
Net interest income | 23,913 | 11,257 | 84,372 | 43,711 | ||||||||
Provision for loan losses | 3,719 | 1,250 | 6,919 | 2,120 | ||||||||
Net interest income after provision for loan losses | 20,194 | 10,007 | 77,453 | 41,591 | ||||||||
NONINTEREST INCOME | ||||||||||||
Service charges and fees | 489 | 223 | 1,998 | 971 | ||||||||
Gain on sale of loans | 5,095 | 5,745 | 20,080 | 25,164 | ||||||||
Other Income | 3,097 | 1,158 | 10,014 | 5,668 | ||||||||
Total noninterest income | 8,681 | 7,126 | 32,092 | 31,803 | ||||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and benefits | 12,115 | 7,495 | 43,915 | 31,778 | ||||||||
Occupancy and equipment | 1,058 | 766 | 6,878 | 3,044 | ||||||||
Other operating expense | 6,681 | 3,928 | 30,275 | 12,968 | ||||||||
Total noninterest expense | 19,854 | 12,189 | 81,068 | 47,790 | ||||||||
Income before income tax | 9,021 | 4,944 | 28,477 | 25,604 | ||||||||
Income tax expense | 5,976 | 1,938 | 11,977 | 9,200 | ||||||||
NET INCOME | $ | 3,045 | $ | 3,006 | $ | 16,500 | $ | 16,404 | ||||
Earnings per common share: | ||||||||||||
Basic | $ | 0.15 | $ | 0.28 | $ | 0.92 | $ | 1.55 | ||||
Diluted | $ | 0.15 | $ | 0.28 | $ | 0.92 | $ | 1.54 | ||||
Average outstanding shares: | ||||||||||||
Basic | 20,485,116 | 10,620,312 | 17,988,670 | 10,586,394 | ||||||||
Diluted | 20,601,740 | 10,775,553 | 18,076,304 | 10,677,561 | ||||||||
Performance and Capital Ratios | ||||||||||||||||||||||||
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) | 2017 | 2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||||||||
Return on average assets (annualized) | 0.43 | % | 0.96 | % | 0.55 | % | 0.74 | % | 0.67 | % | 1.27 | % | ||||||||||||
Return on average equity (annualized) | 3.09 | % | 6.69 | % | 3.73 | % | 8.57 | % | 5.03 | % | 14.11 | % | ||||||||||||
Return on tangible average equity (annualized) (1) | 5.06 | % | 11.89 | % | 6.73 | % | 8.70 | % | 7.72 | % | 14.33 | % | ||||||||||||
Net interest margin - fully tax equivalent basis (1) | 3.83 | % | 3.86 | % | 3.97 | % | 3.52 | % | 3.88 | % | 3.55 | % | ||||||||||||
Net interest margin | 3.77 | % | 3.76 | % | 3.91 | % | 3.46 | % | 3.81 | % | 3.52 | % | ||||||||||||
Efficiency ratio - Bank only | 51.48 | % | 57.56 | % | 59.23 | % | 53.26 | % | 55.72 | % | 49.59 | % | ||||||||||||
Total average equity to earning assets | 15.55 | % | 16.00 | % | 16.68 | % | 8.99 | % | 14.82 | % | 9.36 | % | ||||||||||||
Tangible common equity ratio (1) | 8.79 | % | 8.85 | % | 8.97 | % | 8.65 | % | 8.79 | % | 8.31 | % | ||||||||||||
Averages | ||||||||||||||||||||||||
Assets | $ | 2,837,834 | $ | 2,922,105 | $ | 2,789,088 | $ | 1,401,652 | $ | 2,453,894 | $ | 1,288,582 | ||||||||||||
Loans held for investment | 1,965,608 | 2,002,842 | 1,896,824 | 1,052,167 | 1,704,040 | 939,837 | ||||||||||||||||||
Loans held for sale | 30,006 | 28,734 | 28,254 | 24,461 | 27,881 | 47,060 | ||||||||||||||||||
Interest-bearing deposits & federal funds sold | 102,095 | 136,222 | 121,572 | 64,628 | 104,565 | 67,457 | ||||||||||||||||||
Investment securities | 420,218 | 437,628 | 422,792 | 209,533 | 362,614 | 189,585 | ||||||||||||||||||
Earning assets | 2,535,999 | 2,617,443 | 2,471,036 | 1,353,360 | 2,212,019 | 1,242,923 | ||||||||||||||||||
Interest-bearing deposits | 1,528,133 | 1,566,286 | 1,523,997 | 761,075 | 1,327,261 | 662,271 | ||||||||||||||||||
Total deposits | 2,247,225 | 2,277,759 | 2,163,567 | 1,096,309 | 1,922,249 | 1,021,624 | ||||||||||||||||||
Repurchase agreements & federal funds purchased | 54,702 | 58,149 | 53,949 | 28,369 | 48,378 | 16,270 | ||||||||||||||||||
FHLB short term borrowings | 68,300 | 59,697 | 57,824 | 86,200 | 67,907 | 56,522 | ||||||||||||||||||
FHLB long-term borrowings | 46,304 | 82,790 | 79,892 | 59,556 | 66,329 | 68,525 | ||||||||||||||||||
Trust Preferred debt | 3,871 | 3,029 | 3,824 | - | 2,692 | - | ||||||||||||||||||
Equity | $ | 394,319 | $ | 418,678 | $ | 412,146 | $ | 121,724 | $ | 327,738 | $ | 116,296 | ||||||||||||
Tangible Equity(1) | $ | 240,754 | $ | 235,526 | $ | 228,480 | $ | 119,896 | $ | 202,408 | $ | 114,437 | ||||||||||||
Allowance for loan losses | $ | 15,805 | $ | 15,692 | $ | 14,671 | $ | 13,727 | $ | 15,805 | $ | 16,008 | ||||||||||||
Allowance for loan losses/loans held for investment | 0.80 | % | 0.80 | % | 0.76 | % | 1.28 | % | 0.80 | % | 1.53 | % | ||||||||||||
Remaining fair value marks on purchased performing loans | $ | 11,241 | $ | 12,444 | $ | 13,584 | NA | $ | 11,241 | NA | ||||||||||||||
Purchased credit impaired loans | $ | 4,969 | $ | 5,184 | $ | 7,237 | NA | $ | 4,969 | NA | ||||||||||||||
Remaining fair value marks on purchased credit impaired loans | $ | 1,175 | $ | 694 | $ | 2,296 | NA | $ | 1,175 | NA | ||||||||||||||
Total NPA | $ | 5,270 | $ | 7,817 | $ | 8,954 | $ | 5,244 | $ | 5,270 | $ | 6,922 | ||||||||||||
NPA to total assets | 0.18 | % | 0.27 | % | 0.32 | % | 0.37 | % | 0.18 | % | 0.48 | % | ||||||||||||
Mortgage loan originations and brokered loans | $ | 113,513 | $ | 107,706 | $ | 116,958 | $ | 94,500 | $ | 432,678 | $ | 544,866 | ||||||||||||
Gain on sale of mortgage loans net hedging activity | $ | 4,984 | $ | 5,371 | $ | 10,792 | $ | 3,416 | $ | 19,192 | $ | 23,835 | ||||||||||||
Allowance for losses on mortgage loans sold | $ | 953 | $ | 987 | $ | 1,029 | $ | 1,029 | $ | 953 | $ | 1,029 | ||||||||||||
Wealth Services segment - assets under management | $ | 1,955,720 | $ | 1,935,780 | $ | 1,927,629 | $ | 676,865 | $ | 1,955,720 | $ | 667,300 | ||||||||||||
Book value per common share | $ | 20.53 | $ | 20.55 | $ | 20.36 | $ | 11.40 | $ | 20.53 | $ | 11.33 | ||||||||||||
Tangible book value per common share (1) | $ | 11.52 | $ | 11.64 | $ | 11.32 | $ | 11.23 | $ | 11.52 | $ | 11.16 | ||||||||||||
(1) Non-GAAP financial information. See "Reconciliation of Non-GAAP Financial Measures" at end of release. | ||||||||||||||||||||||||
Composition of Loan Portfolio | ||||||||||||||||||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||
(Dollars In Thousands) | Amount |
Percentage of |
Amount |
Percentage of |
Amount |
Percentage of |
Amount |
Percentage of |
Amount |
Percentage of |
||||||||||||||||||||
Commercial real estate - owner occupied | $ | 467,082 | 23.60 | % | $ | 443,128 | 22.50 | % | $ | 401,853 | 20.84 | % | $ | 262,431 | 24.46 | % | $ | 250,440 | 23.87 | % | ||||||||||
Commercial real estate - non-owner occupied | 436,083 | 22.04 | 435,181 | 22.09 | 377,037 | 19.55 | 205,452 | 19.15 | 184,688 | 17.59 | ||||||||||||||||||||
Residential real estate | 489,669 | 24.74 | 512,621 | 26.03 | 525,649 | 27.26 | 212,007 | 19.76 | 204,413 | 19.47 | ||||||||||||||||||||
Commercial | 463,652 | 23.43 | 449,450 | 22.82 | 476,055 | 24.69 | 294,451 | 27.45 | 311,486 | 29.67 | ||||||||||||||||||||
Real estate construction | 97,481 | 4.93 | 104,193 | 5.29 | 124,186 | 6.44 | 91,614 | 8.54 | 91,822 | 8.75 | ||||||||||||||||||||
Consumer | 24,942 | 1.26 | 25,087 | 1.27 | 23,565 | 1.22 | 6,836 | 0.64 | 6,849 | 0.65 | ||||||||||||||||||||
Total loans | $ | 1,978,909 | 100.00 | % | $ | 1,969,660 | 100.00 | % | $ | 1,928,345 | 100.00 | % | $ | 1,072,791 | 100.00 | % | $ | 1,049,698 | 100.00 | % | ||||||||||
Less allowance for loan losses | 15,805 | 15,692 | 14,671 | 13,727 | 16,008 | |||||||||||||||||||||||||
$ | 1,963,104 | $ | 1,953,968 | $ | 1,913,674 | $ | 1,059,064 | $ | 1,033,690 | |||||||||||||||||||||
Composition of Deposits | ||||||||||||||||||||||||||||||
December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||
(Dollars In Thousands) | Amount |
Percentage of |
Amount |
Percentage of |
Amount |
Percentage of |
Amount |
Percentage of |
Amount |
Percentage of |
||||||||||||||||||||
Demand deposits | $ | 744,960 | 33.34 | % | $ | 710,691 | 31.09 | % | $ | 660,481 | 30.20 | % | $ | 376,674 | 32.56 | % | $ | 362,036 | 34.34 | % | ||||||||||
Interest-bearing demand deposits | 486,621 | 21.78 | 480,620 | 21.02 | 454,675 | 20.79 | 141,981 | 12.27 | 126,189 | 11.97 | ||||||||||||||||||||
Savings and money market | 580,827 | 26.00 | 616,596 | 26.97 | 562,581 | 25.72 | 284,182 | 24.56 | 270,310 | 25.64 | ||||||||||||||||||||
CDARS time deposits | 21,582 | 0.97 | 37,836 | 1.65 | 39,746 | 1.82 | 41,369 | 3.58 | 34,290 | 3.25 | ||||||||||||||||||||
CDARS/ICS non-maturity deposits | 48,011 | 2.15 | 47,219 | 2.07 | 44,009 | 2.01 | 42,960 | 3.71 | 40,925 | 3.88 | ||||||||||||||||||||
Brokered deposits | 51,028 | 2.28 | 71,090 | 3.11 | 101,419 | 4.64 | 110,254 | 9.53 | 57,389 | 5.44 | ||||||||||||||||||||
Time deposits | 301,119 | 13.48 | 322,160 | 14.09 | 324,295 | 14.82 | 159,570 | 13.79 | 163,188 | 15.48 | ||||||||||||||||||||
Total Deposits | $ | 2,234,148 | 100.00 | % | $ | 2,286,212 | 100.00 | % | $ | 2,187,206 | 100.00 | % | $ | 1,156,990 | 100.00 | % | $ | 1,054,327 | 100.00 | % | ||||||||||
Yield on Average Earning Assets and Rates on Average Interest-Bearing Liabilities |
||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||
December 31, 2017 | December 31, 2016 | |||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | |||||||||||||||
(Dollars In Thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||
Assets: | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Securities | $ | 438,290 | $ | 2,321 | 2.12 | % | $ | 204,612 | $ | 1,085 | 2.12 | % | ||||||||
Loans held for sale | 30,006 | 297 | 3.96 | % | 44,454 | 412 | 3.71 | % | ||||||||||||
Loans(1) | 1,965,608 | 24,024 | 4.89 | % | 990,517 | 11,350 | 4.58 | % | ||||||||||||
Interest-bearing balances and federal funds sold | 102,095 | 453 | 1.77 | % | 60,300 | 73 | 0.48 | % | ||||||||||||
Total interest-earning assets | 2,535,999 | 27,095 | 4.27 | % | 1,299,883 | 12,920 | 3.98 | % | ||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||
Cash and due from banks | 18,784 | 13,442 | ||||||||||||||||||
Premises, land and equipment | 26,156 | 6,989 | ||||||||||||||||||
Other assets | 272,877 | 46,418 | ||||||||||||||||||
Less: allowance for loan losses | (15,982 | ) | (15,110 | ) | ||||||||||||||||
Total noninterest-earning assets | 301,835 | 51,739 | ||||||||||||||||||
Total Assets | $ | 2,837,834 | $ | 1,351,622 | ||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Interest-bearing demand deposits | $ | 480,147 | $ | 499 | 0.42 | % | $ | 135,342 | $ | 126 | 0.37 | % | ||||||||
Money market deposit accounts | 483,416 |
691 |
0.57 |
% | 261,656 | 324 | 0.50 | % | ||||||||||||
Savings accounts | 175,123 |
322 |
0.74 |
% | 46,596 | 59 | 0.51 | % | ||||||||||||
Time deposits | 389,447 |
1,202 |
1.23 |
% | 258,666 | 867 | 1.34 | % | ||||||||||||
Total interest-bearing deposits | 1,528,133 | 2,714 | 0.71 | % | 702,260 | 1,376 | 0.78 | % | ||||||||||||
Borrowings: | ||||||||||||||||||||
FHLB short-term borrowings | 68,300 | 231 | 1.35 | % | 50,728 | 106 | 0.84 | % | ||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | 54,702 | 10 | 0.07 | % | 18,765 | 5 | 0.11 | % | ||||||||||||
Subordinated debentures | 3,871 | 73 | 7.54 | % | - | - | 0.00 | % | ||||||||||||
FHLB long-term borrowings | 46,304 | 154 | 1.33 | % | 60,163 | 176 | 1.17 | % | ||||||||||||
Total borrowings | 173,177 | 468 | 1.08 | % | 129,656 | 287 | 0.89 | % | ||||||||||||
Total interest-bearing deposits and borrowings | 1,701,310 | 3,182 | 0.75 | % | 831,916 | 1,663 | 0.80 | % | ||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||
Demand deposits | 719,093 | 389,171 | ||||||||||||||||||
Other liabilities | 23,112 | 9,894 | ||||||||||||||||||
Total liabilities | 2,443,515 | 1,230,981 | ||||||||||||||||||
Shareholders' Equity | 394,319 | 120,641 | ||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 2,837,834 | $ | 1,351,622 | ||||||||||||||||
Interest Spread(2) | 3.53 | % | 3.18 | % | ||||||||||||||||
Net Interest Margin(3) | $ | 23,913 | 3.77 | % | $ | 11,257 | 3.46 | % | ||||||||||||
(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 | ||||||||||||||||||||
December 31, 2017 | December 31, 2016 | |||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | |||||||||||||||
(Dollars In Thousands) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||
Assets: | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Securities | $ | 375,533 | $ | 9,709 | 2.59 | % | $ | 188,569 | $ | 4,039 | 2.14 | % | ||||||||
Loans held for sale | 27,881 | 1,143 | 4.10 | % | 47,060 | 1,767 | 3.75 | % | ||||||||||||
Loans(1) | 1,704,040 | 83,429 | 4.90 | % | 939,837 | 43,872 | 4.67 | % | ||||||||||||
Interest-bearing balances and federal funds sold | 104,565 | 1,199 | 1.15 | % | 67,457 | 337 | 0.50 | % | ||||||||||||
Total interest-earning assets | 2,212,019 | 95,480 | 4.32 | % | 1,242,923 | 50,015 | 4.02 | % | ||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||
Cash and due from banks | 20,859 | 12,732 | ||||||||||||||||||
Premises, land and equipment | 22,683 | 6,834 | ||||||||||||||||||
Other assets | 213,337 | 40,172 | ||||||||||||||||||
Less: allowance for loan losses | (15,004 | ) | (14,079 | ) | ||||||||||||||||
Total noninterest-earning assets | 241,875 | 45,659 | ||||||||||||||||||
Total Assets | $ | 2,453,894 | $ | 1,288,582 | ||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Interest-bearing demand deposits | $ | 386,046 | $ | 1,409 | 0.36 | % | $ | 132,734 | $ | 486 | 0.37 | % | ||||||||
Money market deposit accounts | 386,786 | 2,335 | 0.60 | % | 204,897 | 846 | 0.41 | % | ||||||||||||
Savings accounts | 153,769 | 714 | 0.46 | % | 37,950 | 196 | 0.52 | % | ||||||||||||
Time deposits | 400,660 | 4,816 | 1.20 | % | 286,690 | 3,622 | 1.26 | % | ||||||||||||
Total interest-bearing deposits | 1,327,261 | 9,274 | 0.70 | % | 662,271 | 5,150 | 0.78 | % | ||||||||||||
Borrowings: | ||||||||||||||||||||
FHLB short-term borrowings | 67,907 | 822 | 1.21 | % | 56,522 | 386 | 0.68 | % | ||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | 48,378 | 68 | 0.14 | % | 16,270 | 16 | 0.10 | % | ||||||||||||
Subordinated debentures | 2,692 | 221 | 8.21 | % | - | - | 0.00 | % | ||||||||||||
FHLB long-term borrowings | 66,329 | 723 | 1.09 | % | 68,525 | 752 | 1.10 | % | ||||||||||||
Total borrowings | 185,306 | 1,834 | 0.99 | % | 141,317 | 1,154 | 0.82 | % | ||||||||||||
Total interest-bearing deposits and borrowings | 1,512,567 | 11,108 | 0.73 | % | 803,588 | 6,304 | 0.78 | % | ||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||
Demand deposits | 594,987 | 359,352 | ||||||||||||||||||
Other liabilities | 18,602 | 9,346 | ||||||||||||||||||
Total liabilities | 2,126,156 | 1,172,286 | ||||||||||||||||||
Shareholders' Equity | 327,738 | 116,296 | ||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 2,453,894 | $ | 1,288,582 | ||||||||||||||||
Interest Spread(2) | 3.58 | % | 3.24 | % | ||||||||||||||||
Net Interest Margin(3) | $ | 84,372 | 3.81 | % | $ | 43,711 | 3.52 | % | ||||||||||||
(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 | ||||||||||||||||||||||
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 | |||||||||
Three Months Ended | Commercial | Mortgage | Wealth | Consolidated | ||||||||||||||||||
December 31, 2016 | Banking | Banking | Management | Other | Eliminations | Totals | ||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Interest income | $ | 12,684 | $ | 412 | $ | - | $ | 5 | $ | (181 | ) | $ | 12,920 | |||||||||
Gain on sale of loans | - | 5,745 | - | - | - | 5,745 | ||||||||||||||||
Other revenues | 985 | (477 | ) | 765 | 423 | (315 | ) | 1,381 | ||||||||||||||
Total revenues | 13,669 | 5,680 | 765 | 428 | (496 | ) | 20,046 | |||||||||||||||
Expenses: | ||||||||||||||||||||||
Interest expense | 1,668 | 109 | - | 67 | (181 | ) | 1,663 | |||||||||||||||
Salaries and employee benefits | 3,950 | 2,978 | 567 | - | - | 7,495 | ||||||||||||||||
Other expenses | 2,947 | 1,227 | 251 | 1,834 | (315 | ) | 5,944 | |||||||||||||||
Total operating expenses | 8,565 | 4,314 | 818 | 1,901 | (496 | ) | 15,102 | |||||||||||||||
Income (loss) before income taxes | $ | 5,104 | $ | 1,366 | $ | (53 | ) | $ | (1,473 | ) | $ | - | $ | 4,944 | ||||||||
Total assets | $ | 1,394,061 | $ | 39,356 | $ | 2,841 | $ | 18,037 | $ | (23,587 | ) | $ | 1,430,708 | |||||||||
Segment Reporting | ||||||||||||||||||||||
Twelve Months Ended | Commercial | Mortgage | Trust & Wealth | Consolidated | ||||||||||||||||||
December 31, 2017 | Banking | Banking | Management | Other | Eliminations | Totals | ||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
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 | |||||||||
Twelve Months Ended | Commercial | Mortgage | Wealth | Consolidated | ||||||||||||||||||
December 31, 2016 | Banking | Banking | Management | Other | Eliminations | Totals | ||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Interest income | $ | 49,063 | $ | 1,767 | $ | - | $ | 20 | $ | (835 | ) | $ | 50,015 | |||||||||
Gain on sale of loans | - | 25,164 | - | - | - | 25,164 | ||||||||||||||||
Other revenues | 3,893 | (424 | ) | 3,034 | 1,401 | (1,265 | ) | 6,639 | ||||||||||||||
Total revenues | 52,956 | 26,507 | 3,034 | 1,421 | (2,100 | ) | 81,818 | |||||||||||||||
Expenses: | ||||||||||||||||||||||
Interest expense | 6,324 | 548 | - | 267 | (835 | ) | 6,304 | |||||||||||||||
Salaries and employee benefits | 16,015 | 13,541 | 2,222 | - | - | 31,778 | ||||||||||||||||
Other expenses | 9,232 | 5,354 | 1,034 | 3,777 | (1,265 | ) | 18,132 | |||||||||||||||
Total operating expenses | 31,571 | 19,443 | 3,256 | 4,044 | (2,100 | ) | 56,214 | |||||||||||||||
Income (loss) before income taxes | $ | 21,385 | $ | 7,064 | $ | (222 | ) | $ | (2,623 | ) | $ | - | $ | 25,604 | ||||||||
Total assets | $ | 1,394,061 | $ | 39,356 | $ | 2,841 | $ | 18,037 | $ | (23,587 | ) | $ | 1,430,708 | |||||||||
Reconciliation of Non-GAAP Financial Measures
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 per performance measures that may be presented by other companies. Out 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) | 2017 | 2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||||||||
Book value per common share | $ | 20.53 | $ | 20.55 | $ | 20.36 | $ | 11.40 | $ | 20.53 | $ | 11.33 | ||||||||||||
Effect of intangible assets | $ | (9.01 | ) | $ | (8.91 | ) | $ | (9.04 | ) | $ | (0.17 | ) | $ | (9.01 | ) | $ | (0.17 | ) | ||||||
Tangible book value per common share | $ | 11.52 | $ | 11.64 | $ | 11.32 | $ | 11.23 | $ | 11.52 | $ | 11.16 | ||||||||||||
Common equity ratio | 14.67 | % | 14.62 | % | 15.05 | % | 8.77 | % | 14.67 | % | 8.42 | % | ||||||||||||
Effect of intangible assets | -5.88 | % | -5.77 | % | -6.08 | % | -0.12 | % | -5.88 | % | -0.11 | % | ||||||||||||
Tangible common equity ratio | 8.79 | % | 8.85 | % | 8.97 | % | 8.65 | % | 8.79 | % | 8.31 | % | ||||||||||||
Net interest margin | 3.77 | % | 3.76 | % | 3.91 | % | 3.46 | % | 3.81 | % | 3.52 | % | ||||||||||||
Effect of tax exempt securities and loans | 0.06 | % | 0.10 | % | 0.06 | % | 0.06 | % | 0.07 | % | 0.03 | % | ||||||||||||
Net interest margin - fully tax equivalent basis | 3.83 | % | 3.86 | % | 3.97 | % | 3.52 | % | 3.88 | % | 3.55 | % | ||||||||||||
Return on average equity | 3.09 | % | 6.69 | % | 3.73 | % | 8.57 | % | 5.03 | % | 14.11 | % | ||||||||||||
Effect of intangible assets | 1.97 | % | 5.20 | % | 3.00 | % | 0.13 | % | 2.69 | % | 0.22 | % | ||||||||||||
Return on average tangible equity | 5.06 | % | 11.89 | % | 6.73 | % | 8.70 | % | 7.72 | % | 14.33 | % | ||||||||||||
Average equity | $ | 394,319 | $ | 418,678 | $ | 412,146 | $ | 121,724 | $ | 327,738 | $ | 116,296 | ||||||||||||
Effect of average intangible assets | $ | 153,565 | $ | 183,152 | $ | 183,666 | $ | 1,828 | $ | 125,330 | $ | 1,859 | ||||||||||||
Average tangible equity | $ | 240,754 | $ | 235,526 | $ | 228,480 | $ | 119,896 | $ | 202,408 | $ | 114,437 | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20180130006502/en/
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.