Market Overview

Atlantic Coast Financial Corporation's Fourth Quarter 2017 Net Loss of $0.04 Per Diluted Share Included $0.14 in Charges Related to Tax Act and Pending Merger

Share:

Atlantic Coast Financial Corporation (Atlantic Coast or the Company,
NASDAQ: ACFC):

  • Portfolio loans increased $118 million since December 2016.
  • Deposits increased $47 million during the last 12 months.
  • Nonperforming assets declined 27% to $9.5 million year over year.
  • Entered into an Agreement and Plan of Merger with Ameris Bancorp on
    November 16, 2017.

Atlantic Coast Financial Corporation (Atlantic Coast or the Company,
NASDAQ: ACFC), the holding company for Atlantic Coast Bank (the Bank),
today reported a loss per diluted share of $0.04 and earnings per
diluted share of $0.21 for the 3 and 12 months ended December 31, 2017,
respectively, compared with earnings of $0.13 and $0.42 for the 3 and 12
months ended December 31, 2016, respectively. The results for the 3 and
12 months ended December 31, 2017, included a charge of $1.6 million, or
$0.11 per diluted share, related to a reduction in the valuation of the
Company's net deferred tax assets caused by the recently enacted tax
legislation, which reduces the future statutory corporate income tax
rate, and $0.4 million, or $0.03 per diluted share, of merger-related
costs.

Commenting on the Company's results, John K. Stephens, Jr., President
and Chief Executive Officer, said, "Aside from the impact of the new tax
legislation on our deferred tax assets, which was anticipated as
Congress began to consider reduced corporate income tax rates last fall,
the fourth quarter demonstrated continued strength throughout our
franchise. During the past year, total loans increased 16% while
deposits increased 8%, with both reflecting the success of our
strategies to increase our presence and visibility across our markets.
Meanwhile, credit quality continued to improve, as indicated by an
ongoing decline in nonperforming assets – both in total and relative to
total assets. With this progress, we proudly look back on the Company's
performance and accomplishments in 2017."

Separately, Stephens noted the Company's recent announcement to be
acquired by Ameris Bancorp in a transaction that is expected to be
completed in the second quarter of 2018, subject to regulatory and
stockholder approvals, along with other customary conditions. "We are
excited about the prospects of joining forces with Ameris and together
becoming the largest community bank in the Jacksonville market. We
believe there is a good cultural fit between our two banks, which means
that our customers will continue to see a strong commitment to
high-touch service while benefiting directly from the additional
resources and capabilities offered by Ameris."

Other significant highlights of the fourth quarter of 2017 and the full
year included:

  • Net interest income was $7.2 million and $27.0 million for the 3 and
    12 months ended December 31, 2017, respectively, compared with $7.1
    million and $26.5 million for the 3 and 12 months ended December 31,
    2016, respectively. Net interest margin was 3.24% and 3.20% for the 3
    and 12 months ended December 31, 2017, respectively, compared with
    3.30% and 3.12% for the 3 and 12 months ended December 31, 2016,
    respectively.
  • Total loans (including portfolio loans, loans held-for-sale, and
    warehouse loans held-for-investment) increased 16% to $842.8 million
    at December 31, 2017, from $727.0 million at December 31, 2016. The
    Company's loan growth since December 31, 2016, was driven primarily by
    increased commercial real estate lending in all of its markets. This
    growth was supplemented by strategic loan purchases, somewhat offset
    by mortgage loan sales as part of the Company's interest rate risk and
    balance sheet management strategies and decreases in warehouse loans
    held-for-investment.
  • Deposits increased 8% to $675.8 million at December 31, 2017, from
    $628.4 million at December 31, 2016. Deposits, excluding brokered
    certificates of deposit, increased 15% to $639.8 million at December
    31, 2017, from $558.0 million at December 31, 2016. Wholesale funding,
    which includes brokered certificates of deposit and Federal Home Loan
    Bank advances, decreased 4% to $249.5 million at December 31, 2017,
    from $259.2 million at December 31, 2016. The increase in non-brokered
    deposits and resulting reduced reliance on wholesale funding was
    driven primarily by the Company's commercial deposit strategies put in
    place during 2016.
  • Total assets increased to $983.3 million at December 31, 2017, from
    $907.5 million at December 31, 2016, primarily due to increases in
    portfolio loans and warehouse loans held-for-investment, which were
    partially offset by a decrease in cash and cash equivalents,
    investment securities and loans held-for-sale.
  • Nonperforming assets, as a percentage of total assets, declined to
    0.97% at December 31, 2017, from 1.44% at December 31, 2016. Due to
    the Company's generally stable credit quality during 2016 and
    continuing throughout 2017, reflecting an overall slowing pace of loan
    reclassifications to nonperforming, the Company's loan loss provision
    remained at a low level for both the 3 and 12 months ended
    December 31, 2017, while maintaining, in management's view, a stable
    ratio of allowance for portfolio loan losses to total portfolio loans.
  • The Bank's ratios of total risk-based capital to risk-weighted assets
    and Tier 1 (core) capital to adjusted total assets were 12.51% and
    9.66%, respectively, at December 31, 2017, and each continued to
    exceed the levels required by regulation, currently 10% and 5%,
    respectively, for a bank to be considered well-capitalized.

Tracy L. Keegan, Executive Vice President and Chief Financial Officer,
added, "It was gratifying to see net interest margin increase 8 basis
points during 2017, reflecting the success of the operating strategies
we implemented this past year to grow loans and noninterest-bearing
deposits, resulting in a more diversified balance sheet."

Commenting on the revaluation adjustment made on the Company's net
deferred tax assets, Keegan said "The charge of $1.6 million was
recorded as an increase in income tax expense for the fourth quarter of
2017. Deferred tax assets and liabilities occur due to temporary
differences between the financial reporting and the tax bases of the
Company's assets and liabilities at enacted tax rates expected to be in
effect when such amounts are realized or settled. With the new tax
legislation passed in December 2017, the Company's net deferred tax
assets are now expected to be settled at a statutory rate of 21% rather
than the statutory rate of 35% used previously to value these deferred
tax assets." Keegan also noted that the Company incurred merger-related
costs of approximately $0.4 million in the fourth quarter of 2017.

Bank Regulatory Capital   At

Key Capital Measures

Dec. 31, 2017   Dec. 31, 2016
Total risk-based capital ratio (to risk-weighted assets) 12.51 % 14.83 %
Common equity tier 1 (core) risk-based capital ratio (to
risk-weighted assets)
11.42 % 13.58 %
Tier 1 (core) risk-based capital ratio (to risk-weighted assets) 11.42 % 13.58 %
Tier 1 (core) capital ratio (to adjusted total assets) 9.66 % 9.44 %

The decrease in risk-weighted capital ratios at December 31, 2017,
compared with December 31, 2016, reflected an increase in risk-weighted
assets due to growth in portfolio loans and a decrease in cash and cash
equivalents and investment securities, as well as an increase in the
risk weighting of certain portfolio loan categories, partially offset by
an increase in equity due to accumulated earnings. The charge to
remeasure net deferred tax assets, together with merger related
expenses, reduced the Company's Tier 1 (core) capital ratio as of
December 31, 2017, by approximately 20 basis points.

 

Credit Quality

At
Dec. 31, 2017   Dec. 31, 2016
(Dollars in millions)
Nonperforming loans $ 7.8 $ 10.1
Nonperforming loans to total portfolio loans 1.02 % 1.57 %
Other real estate owned $ 1.7 $ 2.9
Nonperforming assets $ 9.5 $ 13.0
Nonperforming assets to total assets 0.97 % 1.44 %
Troubled debt restructurings performing for less than 12 months
under
terms of modification (1)
$ 15.2 $ 14.6
Troubled debt restructurings performing for more than 12 months
under
terms of modification
$ 15.7 $ 20.3
 

_________________________

(1) Includes $5.9 million and $7.9 million of nonperforming loans at
December 31, 2017 and 2016, respectively.

Nonperforming assets have declined for five consecutive quarters as the
Company's overall credit quality remained stable and the general pace of
loans reclassified to nonperforming remained slow during the last 12
months. Importantly, OREO declined significantly as of December 31,
2017, compared with that at December 31, 2016, primarily due to the sale
of a $2.4 million foreclosed property in the second quarter of 2017,
partially offset by the foreclosure of a $1.6 million property in the
fourth quarter of 2017, which was expected to occur and had been fully
reserved for prior to the foreclosure.

   

Provision / Allowance for Loan Losses

At and for the
Three Months Ended

 

At and for the
Year Ended

 

Dec. 31,
2017

 

Sept. 30,
2017

 

Dec. 31,
2016

Dec. 31,
2017

 

Dec. 31,
2016

(Dollars in millions)
Provision for portfolio loan losses $ 0.2 $ 0.2 $ 0.1 $ 0.7 $ 0.6
Allowance for portfolio loan losses $ 8.6 $ 8.4 $ 8.2 $ 8.6 $ 8.2
Allowance for portfolio loan losses to total portfolio loans 1.12% 1.12% 1.26% 1.12% 1.26%
Allowance for portfolio loan losses to nonperforming loans 110.43% 88.16% 80.38% 110.43% 80.38%
Net charge-offs (recoveries) $ 0.0 $ (0.0) $ 0.0 $ 0.3 $ 0.2
Net charge-offs (recoveries) to average outstanding portfolio loans
(annualized)
0.02% (0.01)% 0.02% 0.04% 0.03%
 

Net charge-offs totaled $39,000 and $38,000 for the three months ended
December 31, 2017 and 2016, respectively, while net recoveries totaled
$18,000 for the three months ended September 30, 2017. This reflects a
trend of solid economic conditions across the Company's markets, which
has led to continued low levels of net charge-offs during the last 12
months.

The Company's provision for portfolio loan losses has remained within a
relatively narrow range over the past year. However, it was up $185,000
for the three months ended December 31, 2017, compared with the fourth
quarter last year, and was up $74,000 for the 12 months ended December
31, 2017, versus full year 2016. The increase in the allowance for
portfolio loan losses at December 31, 2017, compared with that at
December 31, 2016, was attributable primarily to loan growth, which
reflected organic growth supplemented by strategic loan purchases that
were offset partially by loan sales, principal amortization, and
increased prepayments of one- to four-family residential mortgages and
home equity loans. Management believes the allowance for portfolio loan
losses at December 31, 2017, is sufficient to absorb losses in portfolio
loans as of the end of the period.

Net Interest Income   Three Months Ended   Year Ended

Dec. 31,
2017

 

Sept. 30,
2017

 

Dec. 31,
2016

Dec. 31,
2017

 

Dec. 31,
2016

(Dollars in millions)
Net interest income $ 7.2 $ 6.8 $ 7.1 $ 27.0 $ 26.5
Net interest margin 3.24 % 3.18 % 3.30 % 3.20 % 3.12 %
Yield on investment securities 2.09 % 2.05 % 2.29 % 2.25 % 2.11 %
Yield on loans 4.47 % 4.31 % 4.40 % 4.33 % 4.37 %
Total cost of funds 1.03 % 0.98 % 0.78 % 0.93 % 0.92 %
Average cost of deposits 0.85 % 0.80 % 0.66 % 0.77 % 0.62 %
Rates paid on borrowed funds 1.83 % 2.02 % 1.14 % 1.88 % 1.70 %

The slight decrease in net interest margin during the three months ended
December 31, 2017, compared with net interest margin for the three
months ended December 31, 2016, reflected an increase in rates paid on
deposits and borrowed funds, with little to no change in rates on new
loans due to highly competitive lending conditions. In addition, margin
remains relatively stable given the improved mix in core deposits and
growth in noninterest-bearing accounts. The increase in net interest
margin during the 12 months ended December 31, 2017, compared with net
interest margin for the 12 months ended December 31, 2016, primarily
reflected a decrease in rates paid on funds due to an increase in
noninterest-bearing deposits, and an increase in higher-margin
interest-earning assets outstanding, reflecting the Company's ongoing
redeployment of excess liquidity to grow its portfolio loans, loans
held-for-sale, and warehouse loans held-for-investment.

Noninterest Income / Noninterest
Expense / Income
Tax Expense

  Three Months Ended   Year Ended

Dec. 31,
2017

 

Sept. 30,
2017

 

Dec. 31,
2016

Dec. 31,
2017

 

Dec. 31,
2016

(Dollars in millions)
Noninterest income $ 1.3 $ 1.2 $ 1.9 $ 7.0 $ 9.2
Noninterest expense $ 6.4 $ 6.1 $ 6.0 $ 25.6 $ 25.1
Income tax expense $ 2.5 $ 0.6 $ 1.0 $ 4.6 $ 3.6

The decrease in noninterest income for the three months ended December
31, 2017, compared with that of the three months ended December 31,
2016, primarily reflected lower gains on the sale of portfolio loans and
loans held-for-sale, as well as reduced service charges and fees. The
decrease in noninterest income for the 12 months ended December 31,
2017, compared with that of the 12 months ended December 31, 2016,
primarily reflected lower gains on the sale of investment securities,
lower gains on the sale of portfolio loans, reduced service charges and
fees, and a decrease in miscellaneous operating income related to an
escrow account that was forfeited in 2016 in connection with an OREO
sale, partially offset by higher gains on the sale of loans
held-for-sale.

The increase in noninterest expense during the three months ended
December 31, 2017, compared with that of the three months ended December
31, 2016, primarily reflected an increase in compensation and benefits,
occupancy and equipment expense, and merger-related costs associated
with the proposed merger with Ameris Bancorp, partially offset by
reduced foreclosed asset expense and a decrease in data processing
expenses. The increase in noninterest expense during the 12 months ended
December 31, 2017, compared with that of the 12 months ended December
31, 2016, primarily reflected an increase in compensation and benefits,
increased data processing expenses associated with efforts to improve
the Company's IT infrastructure, an increase in occupancy and equipment
expense, and the aforementioned merger-related costs, partially offset
by the positive impact of an adjustment to the rate of accrual for FDIC
insurance premiums, reducing the amount accrued for the full year, and a
decrease in collection expense.

The increase in income tax expense for the 3 and 12 months ended
December 31, 2017, compared with that of the 3 and 12 months ended
December 31, 2016, primarily reflected the impact of newly enacted tax
legislation, partially offset by a decline in income before income tax
expense.

Use of Non-GAAP Financial Measures

A non-GAAP financial measure is generally defined as a numerical measure
of a company's historical or future financial performance, financial
position, or cash flows that either excludes or includes amounts, or is
subject to adjustments, so as to be different from the most directly
comparable measure calculated and presented in accordance with generally
accepted accounting principles (GAAP). Core earnings and core earnings
per diluted share exclude the effects of certain transactions that
occurred during the period, as detailed in the following reconciliation
of these measures.

   
Three Months Ended Year Ended

Dec. 31,
2017

 

Sept. 30,
2017

 

Dec. 31,
2016

Dec. 31,
2017

 

Dec. 31,
2016

(Dollars in thousands)
Net income, as reported $ (616 ) $ 1,115 $ 2,002 $ 3,168 $ 6,418
Less FHLB gain (1) -- -- (255 ) -- (255 )
Plus merger-related costs (2) 400 -- -- 411 --
Plus impact of newly enacted tax laws (3)   1,641     --   --     1,641   --  
Adjusted net income (core earnings) $ 1,425   $ 1,115 $ 1,747   $ 5,220 $ 6,163  
 
Income per diluted share, as reported $ (0.04 ) $ 0.07 $ 0.13 $ 0.21 $ 0.42
Less FHLB gain -- -- (0.02 ) -- (0.02 )
Plus merger-related costs 0.03 -- -- 0.03 --
Plus impact of newly enacted tax laws   0.11     --   --     0.11   --  
Adjusted income per diluted share
(core earnings per diluted
share) (4)
$ 0.09   $ 0.07 $ 0.11   $ 0.34 $ 0.40  
 

_________________________

(1) The FHLB gain, which is included in noninterest income, totaled
$412,000, and is shown above net of a tax expense adjustment of $157,000.

(2) The merger-related costs, which are included in noninterest expense,
totaled $443,000 and is shown above net of a tax expense adjustment of
$43,000 for the three months ended December 31, 2017. The merger-related
costs totaled $454,000 and is shown above net of a tax expense
adjustment of $43,000 for the 12 months ended December 31, 2017.

(3) The impact of newly enacted tax laws is included in income tax
expense.

(4) May not foot due to rounding.

Core earnings and core earnings per diluted share should be viewed in
addition to, and not as a substitute for or superior to, net income and
income per diluted share on a GAAP basis. Atlantic Coast's management
believes that the non-GAAP financial measures, when considered together
with GAAP financial measures, provide information that is useful to
investors in understanding period-over-period operating results separate
and apart from items that may, or could, have a disproportionately
positive or negative impact on results in any particular period.
Atlantic Coast's management also believes that the non-GAAP financial
measures aid investors in analyzing the Company's business trends and in
understanding the Company's performance. In addition, the Company may
utilize non-GAAP financial measures as guides in forecasting, budgeting
and long-term planning processes and to measure operating performance
for some management compensation purposes.

About the Company

Atlantic Coast Financial Corporation is the holding company for Atlantic
Coast Bank, a Florida state-chartered commercial bank. It is a
community-oriented financial institution serving the Northeast Florida,
Central Florida and Southeast Georgia markets. Investors may obtain
additional information about Atlantic Coast Financial Corporation on the
Internet at www.AtlanticCoastBank.net,
under Investor Relations.

Forward-looking Statements

Statements in this press release that are not historical facts are
forward-looking statements that reflect management's current
expectations, assumptions and estimates of future performance and
economic conditions, and involve risks and uncertainties that could
cause actual results to differ materially from those anticipated by the
statements made herein. Such statements are made in reliance upon the
safe harbor provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements generally are identifiable by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should,"
"plans," "intends," "projects," "targets," "estimates," "preliminary,"
or "anticipates" or the negative thereof or comparable terminology, or
by discussion of strategy or goals or other future events, circumstances
or effects. Moreover, forward-looking statements in this release
include, but are not limited to, those relating to: the expected merger
with Ameris Bancorp; the strength of our ratio of allowance for
portfolio loan losses to total portfolio loans; and the allowance for
portfolio loan losses being sufficient to absorb losses in respect of
portfolio loans. The Company's consolidated financial results and the
forward-looking statements could be affected by many factors, including
but not limited to: general economic trends and changes in interest
rates; increased competition; changes in demand for financial services;
the state of the banking industry generally; uncertainties associated
with newly developed or acquired operations; market disruptions; and
cyber-security risks. Further information relating to factors that may
impact the Company's results and forward-looking statements are
disclosed in the Company's filings with the Securities and Exchange
Commission. In particular, please refer to "Item 1A. Risk Factors"
beginning on page 38 of the Company's Annual Report on Form 10-K for the
year ended December 31, 2016. The forward-looking statements contained
in this release are made as of the date of this release, and the Company
disclaims any intention or obligation, other than imposed by law, to
update or revise any forward-looking statements, whether as a result of
new information, future events, or otherwise.

Additional Information and Where to Find It

Ameris Bancorp has filed a registration statement on Form S-4
(Registration Number 333-222563) with the Securities and Exchange
Commission to register the shares of Ameris Banorp's common stock that
will be issued to Atlantic Coast's stockholders in connection with the
transaction. The registration statement includes a joint proxy
statement/prospectus and other relevant materials in connection with the
proposed merger transaction. BEFORE MAKING ANY VOTING OR INVESTMENT
DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT
DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. Investors and
security holders may obtain free copies of these documents and other
documents filed with the Securities and Exchange Commission on its
website at http://www.sec.gov.
Investors and security holders may also obtain free copies of the
documents filed with the Securities and Exchange Commission by Ameris
Bancorp on its website at http://www.AmerisBank.com
and by Atlantic Coast on its website at https://www.AtlanticCoastBank.net/.

This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval.

Participants in the Merger Solicitation

Ameris Bancorp and Atlantic Coast, and certain of their respective
directors, executive officers and other members of management and
employees, may be deemed to be participants in the solicitation of
proxies from the stockholders of Atlantic Coast in respect of the
proposed merger transaction. Information regarding the directors and
executive officers of Ameris Bancorp and Atlantic Coast and other
persons who may be deemed participants in the solicitation of the
stockholders of Atlantic Coast in connection with the proposed
transaction are included in the proxy statement/prospectus for Atlantic
Coast's special meeting of stockholders, which has been filed by Ameris
with the Securities and Exchange Commission. Information about Ameris
Bancorp's directors and executive officers can also be found in Ameris
Bancorp's definitive proxy statement in connection with its 2017 annual
meeting of shareholders, as filed with the Securities and Exchange
Commission on April 3, 2017, and other documents subsequently filed by
Ameris Bancorp with the Securities and Exchange Commission. Information
about Atlantic Coast's directors and executive officers can also be
found in Atlantic Coast's definitive proxy statement in connection with
its 2017 annual meeting of stockholders, as filed with the Securities
and Exchange Commission on April 18, 2017, and other documents
subsequently filed by Atlantic Coast with the Securities and Exchange
Commission. Additional information regarding the interests of such
participants is included in the proxy statement/prospectus and other
relevant documents regarding the proposed merger transaction filed with
the Securities and Exchange Commission when they become available.

   

ATLANTIC COAST FINANCIAL CORPORATION

Statements of Operations (Unaudited)

(In thousands, except per share amounts)

 
Three Months Ended Year Ended

Dec. 31,
2017

 

Sept. 30,
2017

 

Dec. 31,
2016

Dec. 31,
2017

 

Dec. 31,
2016

Interest and dividend income:
Loans, including fees $ 8,951 $ 8,364 $ 8,282 $ 32,812 $ 31,681
Securities and interest-earning deposits in other financial
institutions
  401     347     423   1,560   2,208
Total interest and dividend income 9,352 8,711 8,705 34,372 33,889
 
Interest expense:
Deposits 1,458 1,363 1,001 5,170 3,607
Securities sold under agreements to repurchase -- -- -- -- 1
Federal Home Loan Bank advances 676 595 588 2,208 3,808
Other borrowings   --     --     --   --   1
Total interest expense 2,134 1,958 1,589 7,378 7,417
 
Net interest income 7,218 6,753 7,116 26,994 26,472
Provision for portfolio loan losses   235     167     50   693   619
Net interest income after provision

for portfolio loan losses

6,983 6,586 7,066 26,301 25,853
 
Noninterest income:
Service charges and fees 433 452 532 1,773 2,320
Gain on sale of securities available-for-sale -- 9 -- 409 1,321
Gain on sale of portfolio loans 38 -- 87 38 314
Gain on sale of loans held-for-sale 109 186 368 2,228 1,966
Bank owned life insurance earnings 118 117 116 470 465
Interchange fees 328 315 323 1,311 1,356
Other   244     156     514   756   1,505
Total noninterest income 1,270 1,235 1,940 6,985 9,247
 
Noninterest expense:
Compensation and benefits 3,309 3,544 3,171 13,867 13,703
Occupancy and equipment 654 642 432 2,399 2,295
FDIC insurance premiums 94 34 134 384 607
Foreclosed assets, net (13 ) (6 ) 81 280 335
Data processing 542 581 653 2,316 2,209
Outside professional services 478 458 488 2,035 1,985
Collection expense and repossessed asset losses 83 82 140 399 503
Merger-related costs 443 -- -- 454 --
Other   778     810     877   3,425   3,413
Total noninterest expense   6,368     6,145     5,976   25,559   25,050
 
Income before income tax expense 1,885 1,676 3,030 7,727 10,050
Income tax expense   2,501     561     1,028   4,559   3,632
Net income (loss) $ (616 ) $ 1,115   $ 2,002 $ 3,168 $ 6,418
 
Net income (loss) per basic and diluted share $ (0.04 ) $ 0.07   $ 0.13 $ 0.21 $ 0.42
 
Basic and diluted weighted average shares outstanding   15,429     15,430     15,417   15,425   15,417
 
   

ATLANTIC COAST FINANCIAL CORPORATION

Balance Sheets (Unaudited)

(Dollars in thousands)

 
Dec. 31, 2017 Dec. 31, 2016
ASSETS
Cash and due from financial institutions $ 3,432 $ 3,744
Short-term interest-earning deposits   46,977   56,149
Total cash and cash equivalents 50,409 59,893
Securities available-for-sale 37,683 65,293
Portfolio loans, net of allowance of $8,600 and $8,162, respectively 757,506 639,245
Other loans:
Loans held-for-sale 3,623 7,147
Warehouse loans held-for-investment   81,687   80,577
Total other loans 85,310 87,724
 
Federal Home Loan Bank stock, at cost 9,892 8,792
Land, premises and equipment, net 14,172 14,945
Bank owned life insurance 18,005 17,535
Other real estate owned 1,739 2,886
Accrued interest receivable 2,267 1,979
Deferred tax assets, net 4,108 6,752
Other assets   2,165   2,415
Total assets $ 983,256 $ 907,459
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 63,852 $ 59,696
Interest-bearing demand 97,350 106,004
Savings and money markets 294,674 224,987
Time   219,927   237,726
Total deposits 675,803 628,413
Federal Home Loan Bank advances 213,525 188,758
Accrued expenses and other liabilities   3,268   3,270
Total liabilities 892,596 820,441
 
Total stockholders' equity   90,660   87,018
Total liabilities and stockholders' equity $ 983,256 $ 907,459
 
   

ATLANTIC COAST FINANCIAL CORPORATION

Selected Consolidated Financial Ratios and Other Data
(Unaudited)

(Dollars in thousands)

 

At and for the
Three Months Ended
Dec.
31,

At and for the
Year Ended
Dec. 31,

  2017       2016     2017       2016  
Interest rate
Net interest spread 3.08 % 3.20 % 3.06 % 3.01 %
Net interest margin 3.24 % 3.30 % 3.20 % 3.12 %

 

Average balances
Portfolio loans receivable, net $ 756,964 $ 650,269 $ 711,211 $ 645,946
Warehouse loans held-for-investment 33,907 90,996 36,294 65,974
Total interest-earning assets 889,950 862,303 842,921 848,013
Total assets 928,485 903,170 883,223 891,578
Deposits 685,210 606,441 672,591 579,429
Total interest-bearing liabilities 762,847 755,182 721,877 748,544
Total liabilities 836,014 816,064 792,678 806,488
Stockholders' equity 92,471 87,106 90,545 85,090

 

Performance ratios (annualized)
Return on average total assets (0.27 )% 0.89 % 0.36 % 0.72 %
Return on average stockholders' equity (2.66 )% 9.19 % 3.50 % 7.54 %
Ratio of operating expenses to average total assets 2.74 % 2.65 % 2.89 % 2.81 %

 

Credit and liquidity ratios
Nonperforming loans $ 7,788 $ 10,154 $ 7,788 $ 10,154
Foreclosed assets 1,739 2,886 1,739 2,886
Impaired loans 33,001 37,302 33,001 37,302
Nonperforming assets to total assets 0.97 % 1.44 % 0.97 % 1.44 %
Nonperforming loans to total portfolio loans 1.02 % 1.57 % 1.02 % 1.57 %
Allowance for loan losses to nonperforming loans 110.43 % 80.38 % 110.43 % 80.38 %
Allowance for loan losses to total portfolio loans 1.12 % 1.26 % 1.12 % 1.26 %
Net charge-offs (recoveries) to average outstanding portfolio loans
(annualized)
0.02 % 0.02 % 0.04 % 0.03 %
Ratio of gross portfolio loans to total deposits 113.36 % 103.02 % 113.36 % 103.02 %

 

Capital ratios
Tangible stockholders' equity to tangible assets (1) 9.22 % 9.59 % 9.22 % 9.59 %
Average stockholders' equity to average total assets 9.96 % 9.64 % 10.25 % 9.54 %

 

Other Data
Tangible book value per share (1) $ 5.83 $ 5.61 $ 5.83 $ 5.61
Stock price per share 9.43 6.80 9.43 6.80
Stock price per share to tangible book value per share (1) 161.78 % 121.19 % 161.78 % 121.19 %

 

_________________________

(1) Non-GAAP financial measure. Because the Company does not currently
have any intangible assets, tangible stockholders' equity is equal to
stockholders' equity, tangible assets is equal to assets, and tangible
book value is equal to book value. Accordingly, no reconciliations are
required for these measures.

 

ATLANTIC COAST FINANCIAL CORPORATION

Average Balances, Net Interest Income, Yields Earned and Rates
Paid (Unaudited)

(Dollars in thousands)

 
Three Months Ended Dec. 31,
2017     2016  

Average
Balance

  Interest  

Average
Yield / Cost

Average
Balance

  Interest  

Average
Yield / Cost

Interest-earning assets:
Loans $ 800,909 $ 8,951 4.47 % $ 753,610 $ 8,282 4.40 %
Investment securities 38,495 201 2.09 % 48,091 276 2.29 %
Other interest-earning assets   50,546   200   1.58 %   60,602   147   0.97 %
Total interest-earning assets 889,950   9,352   4.20 % 862,303   8,705   4.04 %
Noninterest-earning assets   38,535   40,867
Total assets $ 928,485 $ 903,170
 
Interest-bearing liabilities:
Interest-bearing demand accounts $ 99,278 $ 101 0.40 % $ 103,702 $ 115 0.44 %
Savings deposits 57,871 17 0.12 % 58,690 18 0.12 %
Money market accounts 237,695 596 1.00 % 157,381 289 0.74 %
Time deposits 220,501 744 1.35 % 229,130 579 1.01 %
Federal Home Loan Bank advances 147,500 676 1.83 % 206,279 588 1.14 %
Other borrowings   2   --   1.18 %   --   --   -- %
Total interest-bearing liabilities 762,847   2,134   1.12 % 755,182   1,589   0.84 %
Noninterest-bearing liabilities   73,167   60,882
Total liabilities 836,014 816,064
Total stockholders' equity   92,471   87,106
Total liabilities and stockholders' equity $ 928,485 $ 903,170
 
Net interest income $ 7,218   $ 7,116  
Net interest spread 3.08 % 3.20 %
Net interest-earning assets $ 127,103 $ 107,121
Net interest margin 3.24 % 3.30 %
Average interest-earning assets to average interest-bearing
liabilities
  116.66 %   114.18 %

 

Year Ended Dec. 31,
2017   2016  

Average
Balance

Interest

Average
Yield / Cost

Average
Balance

Interest

Average
Yield / Cost

Interest-earning assets:
Loans $ 758,635 $ 32,812 4.33 % $ 725,595 $ 31,681 4.37 %
Investment securities 43,548 978 2.25 % 75,364 1,591 2.11 %
Other interest-earning assets   40,738   582   1.43 %   47,054   617   1.31 %
Total interest-earning assets 842,921   34,372   4.08 % 848,013   33,889   4.00 %
Noninterest-earning assets   40,302   43,565
Total assets $ 883,223 $ 891,578
 
Interest-bearing liabilities:
Interest-bearing demand accounts $ 110,265 $ 497 0.45 % $ 103,309 $ 454 0.44 %
Savings deposits 58,986 71 0.12 % 58,975 63 0.11 %
Money market accounts 211,423 1,936 0.92 % 132,923 875 0.66 %
Time deposits 223,986 2,666 1.19 % 229,815 2,215 0.96 %
Securities sold under agreements to repurchase -- -- -- % 82 1 1.56 %
Federal Home Loan Bank advances 117,216 2,208 1.88 % 223,399 3,808 1.70 %
Other borrowings   1   --   1.21 %   41   1   1.63 %
Total interest-bearing liabilities 721,877   7,378   1.02 % 748,544   7,417   0.99 %
Noninterest-bearing liabilities   70,801   57,944
Total liabilities 792,678 806,488
Total stockholders' equity   90,545   85,090
Total liabilities and stockholders' equity $ 883,223 $ 891,578
 
Net interest income $ 26,994   $ 26,472  
Net interest spread 3.06 % 3.01 %
Net interest-earning assets $ 121,044 $ 99,469
Net interest margin 3.20 % 3.12 %
Average interest-earning assets to average interest-bearing
liabilities
  116.77 %   113.29 %

View Comments and Join the Discussion!