Market Overview

Aquesta Financial Holdings, Inc Announces Results of Operations for the Second Quarter of 2017

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CORNELIUS, N.C., July 20, 2017 (GLOBE NEWSWIRE) -- Aquesta Financial Holdings, Inc and subsidiaries ("Aquesta") (OTC Market:AQFH) – including its primary subsidiary Aquesta Bank announced today net income for the second quarter of 2017 (three month period ending June 30, 2017).  For the second quarter of 2017, Aquesta had unaudited net income of $482,000 (15 cents per share) compared to second quarter of 2016 net income of $623,000 (20 cents per share). 

Jim Engel, CEO and President of Aquesta, said, "I'm very pleased with our continued strong loan production.   Second quarter loan growth was more than 20 percent annualized.  While our core earnings year to date were good with margin improvement and loan volume benefits, net income for the quarter was lower than the same quarter in the prior year.  The primary reason for the decrease during this quarter was that this year we did not recognize any SBA (Small Business Administration loans) gains or security gains unlike the same period last year.  With increasing interest rates, we strategically chose to keep the variable rate SBA loans we originated to benefit our long term net income in a rising rate environment. Even with this strategic decision, second quarter net income was up an annualized 10.0 percent compared to the first quarter of this current year."

Key Highlights

  • Loan growth of $17.3 million for the six months ended June 30, 2017 (annualized 13.8 percent). 
  • Core deposit growth of $13.4 million for the six months ended June 30, 2017 (annualized 13.0 percent).

Solid Balance Sheet Growth
At June 30, 2017, Aquesta's total assets were $365.6 million compared to $353.1 million at December 31, 2016.  Total loans were $268.1 million at June 30, 2017 compared to $250.8 million at December 31, 2016.  Core deposits were $218.7 million at June 30, 2017 compared to $205.3 million at December 31, 2016.

Strong Asset Quality
Asset quality remains very strong.  Nonperforming assets as of June 30, 2017 were at $1.8 million compared to $1.7 million as of December 31, 2016   Aquesta had $291 thousand in nonaccrual loans as of June 30, 2017 compared to $122 thousand in nonaccrual loans as of December 31, 2016.  Other real estate owned was $1.5 million at the end of the second quarter 2017, as well as at the end of the fourth quarter 2016.  Aquesta only has two pieces of OREO property.

Net Interest Income
Net interest income was $5.9 million for the six months ended June 30, 2017 compared to $5.2 million for the six months ended June 30, 2016.  This is an increase of $711 thousand or 13.6%.  The increase in net interest income continues to be directly associated with the Company's continued loan growth.

Non Interest Expense
Non-interest expense was $6.4 million for the six months ended June 30, 2017 compared to $6.1 million for the six months ended June 30, 2016.  Non-interest expense increased primarily due to additional personnel as the Company continues to expand.  Personnel expense was at $4.1 million for the six months ended June 30, 2017 compared to $3.8 million for the six months ended June 30, 2016.

Occupancy expense decreased by $10 thousand for the six months ended June 30, 2017 compared to the six months ending June 30, 2016.  The decrease in occupancy expense was due to the consolidation of the Wilmington bank and insurance branch.  Aquesta had $80 thousand in OREO losses for the six months ended June 30, 2017 as compared to $153 thousand for the six months ending June 30, 2016.

Below are the following financial highlights for comparison:

Aquesta Financial Holdings, Inc.  
Select Financial Highlights  
(Dollars in thousands, except per share data)  
           
  06/30/17   12/31/16  
  (unaudited)   (audited)  
Period End Balance Sheet Data:        
Loans $   268,134   $   250,808  
Allowance for loan and lease losses               2,771       2,650  
Investment securities     60,690       65,137  
Goodwill     687       687  
Insurance agency intangible     1,584       1,752  
Total assets     365,606       353,109  
Core deposits     218,657       205,302  
CDs and IRAs     57,125       64,004  
Shareholders equity     28,691       27,203  
         
Ending shares outstanding     3,307,538       3,280,314  
Book value per share     8.67       8.29  
Tangible book value per share     7.99       7.55  

 

  For the three months ended   For the six months ended
  06/30/17     06/30/16     06/30/17     06/30/16
  (unaudited)   (audited)   (unaudited)   (audited)
Income and Per Share Data:              
Interest income $   3,628     $   3,204     $   7,101   $   6,132
Interest expense     588         498         1,168       910
Net interest income     3,040         2,706         5,933       5,222
Provision for loan losses     80         15         80       40
Net interest income after provision for loan losses     2,960         2,691         5,853       5,182
Non interest income     1,039         1,432         1,921       2,492
Non interest expense     3,310         3,156         6,438       6,161
Income before income taxes     689         967         1,336       1,513
Income tax expense     207         344         394       520
Net income $   482     $   623     $   942   $   993
               
Earnings per share - basic $   0.15     $   0.20     $   0.29   $   0.33
Earnings per share - diluted     0.14         0.19         0.27       0.31
Weighted average shares - basic     3,305,328         3,053,665         3,297,045  
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