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Blue Valley Ban Corp. Announces Second Quarter 2018 Operating Results

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Second Quarter 2018 Net Income of $1.8 Million or $0.32 Per Share

Blue Valley Ban Corp. (OTCQX:BVBC) (the "Company") today reported
consolidated earnings for the quarter ended June 30, 2018 of $1.8
million compared to $1.1 million for the comparable period ended June
30, 2017. For the six months ended June 30, 2018, the Company earned
$3.2 million compared to $2.0 million for the six months ended June 30,
2017. Earnings per common share for the quarter- and year-to-date
periods ended June 30, 2018 was $0.32 and $0.58, respectively, compared
to $0.20 and $0.37, respectively, for the quarter- and year-to-date
periods ended June 30, 2017. Numerous key aspects of the operating
results and financial condition for the Company reflected positive
trends and results as of and during the periods ended June 30, 2018.

Robert D. Regnier, Chairman and CEO of Blue Valley Ban Corp. commented,
"We continue to be focused on realizing future business opportunities
and developing relationships. Our loan quality is strong and foreclosed
assets held for sale, net, are less than 0.09% of total assets. We
remain committed to continued future prudent growth and improved
operational efficiency."

For the quarter ended June 30, 2018, net interest income increased by
$434,000, or 7.7%. The Company's non-interest income increased by
$618,000, or 53.9%, compared to the prior year period, primarily due to
the Company's adoption of ASU 2016-01 which required the Company to
measure equity investments at fair value and recognize the changes in
fair value in net income. The Company recognized a net unrealized gain
of $415,000 on equity securities during the quarter ended June 30, 2018.
For the quarter ended June 30, 2018, the Company's non-interest expense
increased by $352,000, or 7.0%, compared to the prior year period.

The Tax Cuts and Jobs Act (Tax Reform) enacted in December 2017,
positively impacted consolidated earnings in the second quarter of 2018.
The Tax Reform reduced the Company's effective tax rate to 26% in the
second quarter of 2018 compared to 37% in 2017. The lower effective tax
rate resulted in a tax savings of approximately $246,000 for the quarter
ended June 30, 2018.

As a result of the volume and composition of loan growth and other
factors used to determine the level of the allowance for loan losses,
the Company recorded a $100,000 provision for loan loss for the quarter
ended June 30, 2018, compared to no provision recorded during the same
period in the prior year. The Company's ratio of total reserves to
non-accrual loans was approximately 643% as of June 30, 2018, which
exceeds the most recent Uniform Bank Performance Report (UBPR) peer
group ratio of 451%. At June 30, 2018, the Bank's ratio of nonperforming
loans to total loans for the Company's subsidiary, Bank of Blue Valley,
was 0.18%, which compares favorably with the most recent UBPR peer group
ratio of 0.67%.

About Blue Valley Ban Corp.

Blue Valley Ban Corp. is a bank holding company that, through its
subsidiaries, provides banking services to closely-held businesses,
their owners, professionals and individuals in Johnson County, Kansas.

This release contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended.
The
Company intends such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and is including this
statement for purposes of those safe harbor provisions.
Forward-looking
statements, which are based on certain assumptions and describe future
plans, strategies and expectations of the Company, can generally be
identified by use of the words "anticipate," "believe," "can,"
"continue," "could," "estimate," "expect," "intend," "may," "plan,"
"potential," "predict," "project," "should,"

or the negative of these terms or other comparable terminology. The
Company is unable to predict the actual results of its future plans or
strategies with certainty.
Factors which could have a material
adverse effect on the operations and future prospects of the Company
include, but are not limited to, fluctuations in market rates of
interest and loan and deposit pricing; inability to maintain or increase
deposit base and secure adequate funding; a continued deterioration of
general economic conditions or the demand for housing in the Company's
market areas; legislative or regulatory changes; regulatory action;
continued adverse developments in the Company's loan or investment
portfolio; any inability to obtain funding on favorable terms; the
Company's non-payment on Trust Preferred Securities or other debt; the
loss of key personnel; significant increases in competition; potential
unfavorable actions from rating agencies; potential unfavorable results
of litigation to which the Company may become a party, and the possible
dilutive effect of potential acquisitions or expansions.
These
risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on
such statements.
We operate in a very competitive and rapidly
changing environment.
New risks emerge from time to time, and it
is not possible for us to predict all risk factors.
Nor can we
address the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking statements.

 

Blue Valley Ban Corp.

Condensed Consolidated Balance Sheets

June 30, 2018 and December 31, 2017

(In thousands, except share data)

 

ASSETS

   

June 30, 2018

    December 31, 2017
(Unaudited)
 
Cash and due from banks $ 18,672 $ 9,394
Interest-bearing deposits in other financial institutions   17,604   4,150
Cash and cash equivalents 36,276 13,544
 
Available-for-sale securities 99,806 102,541
Equity securities 574 589
 

Loans, net of allowance for loan losses of $6,053 and $5,535
  in
2018 and 2017, respectively

518,560 529,265
 
Premises and equipment, net 12,411 12,322
Bank-owned real estate held for sale, net 5,915 5,915
Foreclosed assets held for sale, net 610 2,252
Interest receivable 1,906 1,888
Deferred income taxes 7,143 7,755
Prepaid expenses and other assets 8,197 7,531
FHLBank stock, Federal Reserve Bank stock,
and other securities
  4,882   3,888
 
Total assets $ 696,280 $ 687,490
 
 

Blue Valley Ban Corp.

Condensed Consolidated Balance Sheets

June 30, 2018 and December 31, 2017

(In thousands, except share data)

 
LIABILITIES AND STOCKHOLDERS' EQUITY
    June 30, 2018     December 31, 2017
(Unaudited)
LIABILITIES
 
Deposits
Demand $ 184,419 $ 152,052
Savings, NOW and money market 293,413 315,553
Time   98,795     101,240  
Total deposits 576,627 568,845
 
Other interest-bearing liabilities 36,823 37,202
Long-term debt 32,276 32,802
Interest payable and other liabilities   2,353     2,392  
 
Total liabilities   648,079     641,241  
 
 
STOCKHOLDERS' EQUITY
 
Capital stock

Preferred stock, $1 par value, convertible to common stock;
  pari
passu with common stock upon liquidation; authorized
  1,000,000
shares; issued and outstanding
  2018 – 471,979 shares; 2017
– 471,979 shares

472 472

Common stock, par value $1 per share;
  authorized 15,000,000
shares; issued and outstanding
  2018 – 5,917,793 shares;
2017 – 5,677,865 shares

5,918 5,678
Additional paid-in capital 32,205 32,108
Retained earnings 14,149 10,941

Accumulated other comprehensive income loss, net of income
  tax
credit of $(1,637) in 2018 and $(1,091) in 2017

  (4,543 )   (2,950 )
 
Total stockholders' equity   48,201     46,249  
 
Total liabilities and stockholders' equity $ 696,280   $ 687,490  
 
       

Blue Valley Ban Corp.

Condensed Consolidated Statements of Income

Three and Six Months Ended June 30, 2018 and 2017

(In thousands, except share data)

 

 

Three months ended

Six months ended
June 30, 2018     June 30, 2017 June 30, 2018     June 30, 2017
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
Interest and fees on loans $ 6,535 $ 5,868 $ 12,788 $ 11,445
Federal funds sold and other short-term investments 75 18 95 33
Available-for-sale securities 523 520 1,032 1,060
Dividends on FHLBank and Federal Reserve Stock   63   67   68   81
Total interest income   7,196   6,473   13,983   12,619
 
INTEREST EXPENSE
Interest-bearing demand deposits 73 52 138 111
Savings and money market deposit accounts 322 125 515 241
Other time deposits 319 234 604 437
Federal funds purchased and other interest-bearing liabilities 19 18 50 35
Long-term debt, net   413   428   787   866
Total interest expense   1,146   857   2,094   1,690
 
NET INTEREST INCOME 6,050 5,616 11,889 10,929
 
PROVISION FOR LOAN LOSSES   100     400  
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   5,950   5,616   11,489   10,929
 
NON-INTEREST INCOME
Service fees 867 840 1,655 1,707
Other income   898   307   1,269   591
Total non-interest income   1,765   1,147   2,924   2,298
 
NON-INTEREST EXPENSE
Salaries and employee benefits 2,920 2,634 5,621 5,363
Net occupancy expense 627 641 1,310 1,289
Foreclosed assets expense 35 323 113 531
Other operating expense   1,764   1,396   2,992   2,844
Total non-interest expense   5,346   4,994   10,036   10,027
 
INCOME BEFORE INCOME TAXES 2,369 1,769 4,377 3,200
 
PROVISION FOR INCOME TAXES   619   646   1,157   1,175
 
NET INCOME $ 1,750 $ 1,123 $ 3,220 $ 2,025
 
BASIC EARNINGS PER SHARE $ 0.32 $ 0.20 $ 0.58 $ 0.37
DILUTED EARNINGS PER SHARE $ 0.32 $ 0.20 $ 0.58 $ 0.37
 

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