Market Overview

First Community Bancshares, Inc. Announces Record Second Quarter 2018 Results and Increased Quarterly Dividend

Share:

BLUEFIELD, Va., July 24, 2018 (GLOBE NEWSWIRE) -- First Community Bancshares, Inc. (NASDAQ:FCBC) (www.firstcommunitybank.com) (the "Company") today reported its unaudited results of operations and other financial information for the quarter and six months ended June 30, 2018. The Company reported net income of $9.07 million, or $0.54 per diluted common share, for the quarter ended June 30, 2018, which represents a 42.11% increase in per share diluted earnings compared to the same quarter of 2017. Net income was $17.93 million, or $1.06 per diluted common share, for the six months ended June 30, 2018, which represents a 43.24% increase in per share diluted earnings compared to the same period of 2017.

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of  twenty-one cents ($0.21) per common share, an increase of 16.67% over the $0.18 dividend paid last quarter. The quarterly dividend is payable to common shareholders of record on August 3, 2018, and is expected to be paid on or about August 17, 2018. The current year marks the 33rd consecutive year of regular cash dividends paid to shareholders.

Second Quarter 2018 Highlights

  • Income Statement
    • Pre-tax income increased $2.19 million, or 23.34%, to $11.57 million and net income increased $2.65 million, or 41.26%, to $9.07 million compared to the same quarter of 2017.
    • Diluted earnings per share increased $0.16, or 42.11%, to $0.54 and core diluted earnings per share increased $0.17, or 44.74%, to $0.55 compared to the same quarter of 2017.
    • Return on average assets improved 45 basis points to 1.53% and return on average equity improved 327 basis points to 10.68% compared to the same quarter of 2017.
    • The GAAP efficiency ratio improved 349 basis points to 58.81% and the non-GAAP efficiency ratio improved 470 basis points to 54.25% compared to the same quarter of 2017.
    • Net interest margin decreased 3 basis points to 4.16%, while the normalized net interest margin increased 5 basis points to 4.04% compared to the same quarter of 2017.
       
  • Balance Sheet
    • The Company repurchased 286,940 common shares during the quarter. Year to date, the Company has repurchased 474,240 common shares for $14.72 million compared to 10,602 shares during the same period of 2017.
    • The Company and its subsidiary bank both significantly exceed regulatory "well capitalized" targets as of June 30, 2018.

Non-GAAP Financial Measures

The Company prepares its financial statements in accordance with GAAP. This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company's non-GAAP financial measures presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company's financial results. Management believes that the efficiency ratio provides important information about the Company's operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 44 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of June 30, 2018. First Community Bank provides insurance services through First Community Insurance Services, which operates in-branch locations in Virginia and West Virginia and offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed $969 million in combined assets as of June 30, 2018. The Company reported consolidated assets of $2.35 billion as of June 30, 2018. The Company's common stock is listed on the NASDAQ Global Select Market under the trading symbol, "FCBC". Additional investor information is available on the Company's website at www.firstcommunitybank.com.

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company's Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Financial Performance

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)  
                                 
      Three Months Ended   Six Months Ended  
      June 30,   March 31,   December 31,   September 30,   June 30,   June 30,  
(Amounts in thousands, except share and per share data)   2018       2018       2017       2017       2017       2018       2017    
Interest income                              
  Interest and fees on loans $   22,422     $   22,755     $   22,314     $   22,694     $   22,914     $   45,177     $   44,741    
  Interest on securities     1,361         1,104         1,095         1,080         1,170         2,465         2,376    
  Interest on deposits in banks     514         471         353         275         221         985         380    
Total interest income       24,297       -     24,330       -     23,762       -     24,049       -     24,305       -      48,627     -      47,497    
Interest expense                              
  Interest on deposits     1,327         1,251         1,313         1,275         1,233         2,578         2,399    
  Interest on borrowings     708         700         716         724         778         1,408         1,663    
Total interest expense       2,035       -     1,951       -     2,029       -     1,999       -     2,011       -      3,986     -      4,062    
Net interest income       22,262       -     22,379       -     21,733       -     22,050       -     22,294       -      44,641     -      43,435    
Provision for loan losses     495         495         615         730         934         990         1,426    
Net interest income after provision     21,767       -     21,884       -     21,118       -     21,320       -     21,360       -      43,651     -      42,009    
Noninterest income        7,016         6,611         7,498         6,703         5,055         13,627         10,367    
Noninterest expense       17,217         17,059         16,683         16,477         17,038         34,276         33,742    
Income before income taxes     11,566       -     11,436       -     11,933       -     11,546       -     9,377       -      23,002     -     18,634    
Income tax expense       2,500         2,568         10,720         3,894         2,959         5,068         6,014    
Net income   $   9,066   $   -  $   8,868   $   -  $   1,213   $   -  $   7,652   $   -  $   6,418   $   -  $   17,934     - $   12,620    
                                 
Earnings per common share                            
  Basic   $   0.54     $   0.52     $   0.07     $   0.45     $   0.38     $   1.06     $   0.74    
  Diluted       0.54         0.52         0.07         0.45         0.38         1.06         0.74    
Cash dividends per common share     0.18         0.66         0.18         0.16         0.16         0.84         0.32    
Weighted average shares outstanding                          
  Basic       16,689,398         16,955,758         16,992,519         17,005,654         17,012,189         16,821,842         17,005,196    
  Diluted       16,788,615         17,047,638         17,083,949         17,082,729         17,082,832         16,912,872         17,075,961    
Performance ratios                              
  Return on average assets   1.53 %     1.52 %     0.20 %     1.29 %     1.08 %     1.53 %     1.07 %  
  Return on average common equity   10.68 %     10.30 %     1.35 %     8.61 %     7.41 %     10.49 %     7.38 %  
  Return on average tangible common equity(1)   15.21 %     14.53 %     1.89 %     12.13 %     10.51 %     14.87 %     10.51 %  
                                 
(1 )  A non-GAAP financial measure defined as average stockholders' equity less average goodwill and other intangibles  
                                 


RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)  
                                 
      Three Months Ended   Six Months Ended  
      June 30,   March 31,   December 31,   September 30,   June 30,   June 30,  
        2018       2018       2017       2017       2017       2018       2017    
(Amounts in thousands, except per share data)                          
Net income, GAAP   $   9,066     $   8,868     $   1,213     $   7,652     $   6,418     $   17,934     $   12,620    
Non-GAAP adjustments:                            
  Net loss on sale of securities     -         -         4         -         657         -         657    
  Deferred tax asset revaluation     -         -         6,552         -         -         -         -    
  Other non-core items     297         (130 )       (140 )       34         (174 )       167         (192 )  
Total adjustments to core earnings     297         (130 )       6,416         34         483         167         465    
Tax effect          71     -     (24 )   -     (50 )   -     12     -     345         72     -     338    
Core earnings, non-GAAP(1) $   9,292     $   8,762     $   7,679     $   7,674     $   6,556     $   18,029     $   12,747    
                                 
Core diluted earnings per common share $   0.55     $   0.51     $   0.45     $   0.45     $   0.38     $   1.07     $   0.74    
Performance ratios                              
  Core return on average assets   1.57 %     1.50 %     1.28 %     1.29 %     1.11 %     1.53 %     1.08 %  
  Core return on average common equity   10.94 %     10.17 %     8.56 %     8.63 %     7.57 %     10.54 %     7.45 %  
  Core return on average tangible common equity(2)   15.59 %     14.36 %     11.99 %     12.16 %     10.74 %     14.95 %     10.61 %  
                                 
(1 )  Excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income  
(2 )  A non-GAAP financial measure defined as average stockholders' equity less average goodwill and other intangibles  
                                 

Net Interest Income and Margin

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                             
      Three Months Ended June 30,  
        2018       2017    
      Average        Average Yield/   Average        Average Yield/  
(Amounts in thousands)   Balance   Interest(1)   Rate(1)   Balance   Interest(2)   Rate(2)  
Assets                            
Earning assets                          
  Loans(3)   $   1,795,094   $   22,495   5.03 %   $   1,843,441   $   22,986   5.00 %  
  Securities available for sale     190,605       1,641   3.45 %       167,869       1,455   3.48 %  
  Securities held to maturity     25,098       104   1.66 %       34,664       125   1.45 %  
  Interest-bearing deposits     109,349       514   1.89 %       68,455       221   1.29 %  
Total earning assets       2,120,146       24,754   4.68 %       2,114,429       24,787   4.70 %  
Other assets        252,843               263,767          
Total assets   $   2,372,989           $   2,378,196          
                             
Liabilities and stockholders' equity                        
Interest-bearing deposits                        
  Demand deposits  $   484,776   $   104   0.09 %   $   387,113   $   60   0.06 %  
  Savings deposits      518,055       83   0.06 %       525,808       85   0.06 %  
  Time deposits     477,691       1,140   0.96 %       514,527       1,088   0.85 %  
Total interest-bearing deposits     1,480,522       1,327   0.36 %       1,427,448       1,233   0.35 %  
Borrowings                          
  Federal funds purchased     -       -   -         5       -   0.00 %  
  Retail repurchase agreements     3,615       1   0.11 %       60,809       10   0.07 %  
  Wholesale repurchase agreements     25,000       201   3.22 %       25,000       201   3.22 %  
  FHLB advances and other borrowings     50,000       506   4.06 %       55,635       567   4.09 %  
Total borrowings       78,615       708   3.61 %       141,449       778   2.21 %  
Total interest-bearing liabilities     1,559,137       2,035   0.52 %       1,568,897       2,011   0.51 %  
Noninterest-bearing demand deposits     447,048               441,547          
Other liabilities       26,222               20,197          
Total liabilities       2,032,407               2,030,641          
Stockholders' equity       340,582               347,555          
Total liabilities and stockholders' equity $   2,372,989           $   2,378,196          
Net interest income, FTE     $   22,719           $   22,776      
Net interest rate spread         4.16 %           4.19 %  
Net interest margin           4.30 %           4.32 %  
                             
(1 )  Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 21%  
(2 )  FTE basis based on the federal statutory rate of 35%  
(3 )  Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.  
 


AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)
                             
      Six Months Ended June 30,  
        2018       2017    
      Average        Average Yield/   Average        Average Yield/  
(Amounts in thousands)   Balance   Interest(1)   Rate(1)   Balance   Interest(2)   Rate(2)  
Assets                            
Earning assets                          
  Loans(3)   $   1,800,438   $   45,322   5.08 %   $   1,841,152   $   44,880   4.92 %  
  Securities available for sale     177,897       3,025   3.43 %       164,820       2,939   3.60 %  
  Securities held to maturity     25,115       209   1.68 %       40,854       276   1.36 %  
  Interest-bearing deposits     113,627       985   1.75 %       62,140       380   1.23 %  
Total earning assets       2,117,077       49,541   4.72 %       2,108,966       48,475   4.64 %  
Other assets        252,592               267,163          
Total assets   $   2,369,669           $   2,376,129          
                             
Liabilities and stockholders' equity                        
Interest-bearing deposits                        
  Demand deposits  $   473,819   $   167   0.07 %   $   384,098   $   114   0.06 %  
  Savings deposits      518,306       165   0.06 %       525,691       169   0.06 %  
  Time deposits     485,574       2,246   0.93 %       515,014       2,116   0.83 %  
Total interest-bearing deposits     1,477,699       2,578   0.35 %       1,424,803       2,399   0.34 %  
Borrowings                          
  Federal funds purchased     -       -   -         3       -   0.00 %  
  Retail repurchase agreements     4,031       2   0.10 %       63,861       21   0.07 %  
  Wholesale repurchase agreements     25,000       400   3.23 %       25,000       399   3.22 %  
  FHLB advances and other borrowings     50,000       1,006   4.06 %       61,096       1,243   4.10 %  
Total borrowings       79,031       1,408   3.59 %       149,960       1,663   2.24 %  
Total interest-bearing liabilities     1,556,730       3,986   0.52 %       1,574,763       4,062   0.52 %  
Noninterest-bearing demand deposits     439,867               433,588          
Other liabilities       28,168               22,822          
Total liabilities       2,024,765               2,031,173          
Stockholders' equity       344,904               344,956          
Total liabilities and stockholders' equity $   2,369,669           $   2,376,129          
Net interest income, FTE     $   45,555           $   44,413      
Net interest rate spread         4.20 %           4.12 %  
Net interest margin           4.34 %           4.25 %  
                             
(1 )  FTE basis based on the federal statutory rate of 21%  
(2 )  FTE basis based on the federal statutory rate of 35%  
(3 )  Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.  
 


RECONCILIATION OF GAAP NET INTEREST MARGIN TO NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited)        
                       
      Three Months Ended June 30,    
        2018       2017      
(Amounts in thousands)   Interest(1)   Average Yield/
Rate
(1) 
  Interest(2)   Average Yield/
Rate
(2) 
   
Earning assets                    
Loans(3)     $   22,495   5.03 %   $   22,986   5.00 %    
  Accretion income     1,827           2,534        
  Less: cash accretion income     468           788        
  Non-cash accretion income     1,359           1,746        
Loans, normalized(4)       21,136   4.72 %       21,240   4.62 %    
Other earning assets       2,259   2.79 %       1,801   2.67 %    
Total earning assets       23,395   4.43 %       23,041   4.37 %    
Total interest-bearing liabilities     2,035   0.52 %       2,011   0.51 %    
Net interest income, FTE(4) $   21,360       $   21,030        
Net interest rate spread, normalized(4)     3.90 %       3.86 %    
Net interest margin, normalized(4)     4.04 %       3.99 %        
                           
(1) FTE basis based on the federal statutory rate of 21%
(2) FTE basis based on the federal statutory rate of 35%
(3) Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
(4) Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.        
                           
      Six Months Ended June 30,        
        2018       2017          
(Amounts in thousands)   Interest(1)   Average Yield/
Rate
(1) 
  Interest(2)   Average Yield/
Rate
(2) 
       
Earning assets                        
Loans(3)     $   45,322   5.08 %   $   44,880   4.92 %        
  Accretion income     4,151           4,318            
  Less: cash accretion income     947           1,438            
  Non-cash accretion income     3,204           2,880            
Loans, normalized(4)       42,118   4.72 %       42,000   4.60 %        
Other earning assets       4,219   2.69 %       3,595   2.71 %        
Total earning assets       46,337   4.41 %       45,595   4.36 %        
Total interest-bearing liabilities     3,986   0.52 %       4,062   0.52 %        
Net interest income, FTE(4) $   42,351       $   41,533            
Net interest rate spread, normalized(4)     3.90 %       3.84 %        
Net interest margin, normalized(4)     4.03 %       3.97 %        
                           
(1) FTE basis based on the federal statutory rate of 21%
(2) FTE basis based on the federal statutory rate of 35%
(3) Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
(4) Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.        
                           

Noninterest Income and Expense

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)  
                               
    Three Months Ended   Six Months Ended  
    June 30,   March 31,   December 31,   September 30,   June 30,   June 30,  
(Amounts in thousands)   2018       2018       2017       2017       2017       2018       2017    
Noninterest income                            
  Wealth management $   823     $   794     $   811     $   758     $   791     $   1,617     $   1,581    
  Service charges on deposits     3,612         3,468         3,725         3,605         3,360         7,080         6,473    
  Other service charges and fees     1,991         1,800         1,788         1,709         1,748         3,791         3,447    
  Insurance commissions     338         329         343         306         325         667         698    
  Net loss on sale of securities     -         -         (4 )       -         (657 )       -         (657 )  
  Net FDIC indemnification asset amortization     (575 )       (382 )       (331 )       (268 )       (1,586 )       (957 )       (2,918 )  
  Other operating income     827         602         1,166         593         1,074         1,429         1,743    
Total noninterest income      7,016         6,611         7,498         6,703         5,055         13,627         10,367    
Noninterest expense                            
  Salaries and employee benefits     8,993         9,441         9,003         9,001         9,022         18,434         17,770    
  Occupancy expense     1,083         1,250         1,104         1,082         1,341         2,333         2,589    
  Furniture and equipment expense     945         1,046         1,114         1,133         1,087         1,991         2,178    
  Service fees     851         828         703         705         1,095         1,679         1,940    
  Advertising and public relations     461         522         506         551         544         983         1,149    
  Professional fees     430         307         589         339         817         737         1,639    
  Amortization of intangibles     263         261         266         266         263         524         524    
  FDIC premiums and assessments     252         211         212         227         227         463         471    
  Other operating expense     3,939         3,193         3,186         3,173         2,642         7,132         5,482    
Total noninterest expense     17,217         17,059         16,683         16,477         17,038         34,276         33,742    
                               

Efficiency Ratio

EFFICIENCY RATIO CALCULATION (Unaudited)  
                                 
      Three Months Ended   Six Months Ended  
      June 30,   March 31,   December 31,   September 30,   June 30,   June 30,  
        2018       2018       2017       2017       2017       2018       2017    
(Amounts in thousands)                              
Noninterest expense, GAAP $   17,217     $   17,059     $   16,683     $   16,477     $   17,038     $   34,276     $   33,742    
Non-GAAP adjustments                            
  OREO expense and net loss     (742 )       (171 )       (14 )       (647 )       (213 )       (913 )       (541 )  
  Other non-core items     (400 )       -         -         (64 )       (327 )       (400 )       (327 )  
Adjusted noninterest expense     16,075         16,888         16,669         15,766         16,498         32,963         32,874    
                                 
Net interest income, GAAP     22,262         22,379         21,733         22,050         22,294         44,641         43,435    
Noninterest income, GAAP     7,016         6,611         7,498         6,703         5,055         13,627         10,367    
Non-GAAP adjustments                            
  Tax equivalency adjustment     457         457         466         470         481         914         978    
  Net loss on sale of securities     -         -         4         -         657         -         657    
  Other non-core items     (103 )       (130 )       (140 )       (30 )       (501 )       (233 )       (519 )  
Adjusted net interest and noninterest income     29,632         29,317         29,561         29,193         27,986         58,949         54,918    
                                 
Non-GAAP efficiency ratio(1)   54.25 %     57.60 %     56.39 %     54.01 %     58.95 %     55.92 %     59.86 %  
GAAP efficiency ratio     58.81 %     58.84 %     57.07 %     57.31 %     62.30 %     58.82 %     62.72 %  
                                 
(1 )  A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income  
                                 

Balance Sheet and Capital

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)
                       
      June 30,   March 31,   December 31,   September 30,   June 30,
(Amounts in thousands, except per share data)   2018       2018       2017       2017       2017  
Assets                      
Cash and cash equivalents $   107,957     $   205,140     $   157,951     $   105,119     $   106,799  
Debt securities available for sale      196,425         164,192         165,580         174,424         157,854  
Debt securities held to maturity      25,082         25,115         25,149         25,182         25,216  
Loans held for sale       -         -         -         -         -  
Loans held for investment, net of unearned income                
  Non-covered     1,776,112         1,767,703         1,789,236         1,806,434         1,796,263  
  Covered       22,919         25,406         27,948         31,287         45,845  
  Allowance for loan losses     (19,583 )       (19,500 )       (19,276 )       (19,206 )       (18,886 )
Loans held for investment, net     1,779,448         1,773,609         1,797,908         1,818,515         1,823,222  
FDIC indemnification asset     6,390         6,884         7,161         7,465         8,159  
Premises and equipment, net     45,547         46,415         48,126         48,949         49,598  
Other real estate owned, non-covered     4,805         4,620         2,409         3,543         3,914  
Other real estate owned, covered     44         70         105         54         124  
Interest receivable       5,580         5,155         5,778         5,156         5,072  
Goodwill         95,779         95,779         95,779         95,779         95,779  
Other intangible assets       5,628         5,891         6,151         6,417         6,683  
Other assets       75,435         95,437         76,363         84,177         84,183  
Total assets   $   2,348,120     $   2,428,307     $   2,388,460     $   2,374,780     $   2,366,603  
                       
Liabilities                      
Deposits                      
  Noninterest-bearing $   462,851     $   460,478     $   454,143     $   452,940     $   443,800  
  Interest-bearing     1,441,887         1,520,141         1,475,748         1,410,880         1,413,574  
Total deposits       1,904,738         1,980,619         1,929,891         1,863,820         1,857,374  
Federal funds purchased     -         -         -         -         -  
Securities sold under agreements to repurchase     27,869         29,115         30,086         83,783         86,011  
FHLB borrowings       50,000         50,000         50,000         50,000         50,000  
Other borrowings       -         -         -         -         -  
Interest, taxes, and other liabilities     26,392         26,536         27,769         24,540         24,443  
Total liabilities       2,008,999     -     2,086,270     -     2,037,746     -     2,022,143     -     2,017,828  
                       
Stockholders' equity                    
Preferred stock       -         -         -         -         -  
Common stock       21,382         21,382         21,382         21,382         21,382  
Additional paid-in capital     228,949         228,774         228,750         228,510         228,326  
Retained earnings       184,279         178,227         180,543         182,145         177,556  
Treasury stock, at cost       (92,904 )       (83,865 )       (79,121 )       (79,333 )       (78,488 )
Accumulated other comprehensive loss     (2,585 )       (2,481 )       (840 )       (67 )       (1 )
Total stockholders' equity     339,121         342,037         350,714         352,637         348,775  
Total liabilities and stockholders' equity $   2,348,120     $   2,428,307     $   2,388,460     $   2,374,780     $   2,366,603  
                       
Shares outstanding at period-end     16,574,347         16,847,452         16,998,226         16,986,502         17,017,071  
Book value per common share $   20.46     $   20.30     $   20.63     $   20.76     $   20.50  
Tangible book value per common share(1)     14.34         14.27         14.64         14.74         14.47  
                       
(1 )  A non-GAAP financial measure defined as stockholders' equity less goodwill and other intangibles, divided by common shares outstanding
                       

Asset Quality

SELECTED CREDIT QUALITY INFORMATION (Unaudited)
                       
      June 30,   March 31,   December 31,   September 30,   June 30,
(Amounts in thousands)     2018       2018       2017       2017       2017  
Allowance for Loan Losses                   
Beginning balance   $   19,500     $   19,276     $   19,206     $   18,886     $   18,458  
Provision for loan losses charged to operations     495         495         615         730         934  
Charge-offs       (750 )       (698 )       (967 )       (717 )       (902 )
Recoveries         338         427         422         307         396  
Net charge-offs       (412 )       (271 )       (545 )       (410 )       (506 )
Ending balance   $   19,583     $   19,500     $   19,276     $   19,206     $   18,886  
                       
Nonperforming Assets                  
Non-covered nonperforming assets                  
Nonaccrual loans    $   21,467     $   21,650     $   18,997     $   18,942     $   20,146  
Accruing loans past due 90 days or more     -         27         1         -         -  
Troubled debt restructurings ("TDRs")(1)     133         77         120         141         100  
Total non-covered nonperforming loans     21,600         21,754         19,118         19,083         20,246  
OREO         4,805         4,620         2,409         3,543         3,914  
Total non-covered nonperforming assets $   26,405     $   26,374     $   21,527     $   22,626     $   24,160  
                       
Covered nonperforming assets                  
Nonaccrual loans    $   509     $   596     $   342     $   420     $   446  
Accruing loans past due 90 days or more     -         -         -         -         -  
Total covered nonperforming loans     509         596         342         420         446  
OREO         44         70         105         54         124  
Total covered nonperforming assets $   553     $   666     $   447     $   474     $   570  
                       
Additional Information                    
Performing TDRs(2)   $   6,847     $   7,220     $   7,614     $   8,101     $   8,485  
Total TDRs(3)       6,980         7,297         7,734         8,242         8,585  
                       
Non-covered ratios                    
Nonaccrual loans to total loans   1.21 %     1.22 %     1.06 %     1.05 %     1.12 %
Nonperforming loans to total loans   1.22 %     1.23 %     1.07 %     1.06 %     1.13 %
Nonperforming assets to total assets   1.14 %     1.10 %     0.91 %     0.97 %     1.04 %
Non-PCI allowance to nonperforming loans   90.66 %     89.64 %     100.83 %     100.64 %     93.24 %
Non-PCI allowance to total loans   1.10 %     1.10 %     1.08 %     1.06 %     1.05 %
Annualized net charge-offs to average loans   0.09 %     0.06 %     0.12 %     0.09 %     0.11 %
                       
Total ratios                    
Nonperforming loans to total loans   1.23 %     1.25 %     1.07 %     1.06 %     1.12 %
Nonperforming assets to total assets   1.15 %     1.11 %     0.92 %     0.97 %     1.04 %
Allowance for loan losses to nonperforming loans   88.57 %     87.25 %     99.05 %     98.48 %     91.27 %
Allowance for loan losses to total loans   1.09 %     1.09 %     1.06 %     1.05 %     1.03 %
Annualized net charge-offs to average loans   0.09 %     0.06 %     0.12 %     0.09 %     0.11 %
                       
(1) Accruing TDRs restructured within the past six months or nonperforming
(2) Accruing TDRs with six months or more of satisfactory payment performance
(3) Accruing total TDRs 
                       

FOR MORE INFORMATION, CONTACT:
David D. Brown
(276) 326-9000

Primary Logo

View Comments and Join the Discussion!