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Athens Bancshares Corporation Reports Financial Results For The Quarter Ended June 30, 2018

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Athens Bancshares Corporation Reports Financial Results For The Quarter Ended June 30, 2018

PR Newswire

ATHENS, Tenn., July 25, 2018 /PRNewswire/ -- Athens Bancshares Corporation (OTC QX: AFCB) (the "Company"), the holding company for Athens Federal Community Bank, National Association (the "Bank"), today announced its results of operations for the three months and the six months ended June 30, 2018. 

The Company's net income for the three months ended June 30, 2018 was $1.6 million or $0.86 per diluted share, compared to net income of $964,000 or $0.53 per diluted share for the same period in 2017.  For the six months ended June 30, 2017 net income was $3.1 million or $1.69 per diluted share, compared to net income of $2.0 million or $1.10 per diluted share for the six months ended June 30, 2017.

Results of Operations – Three Months Ended June 30, 2018 and 2017

Net interest income after provision for loan losses increased $787,000, or 20.30%, for the three months ended June 30, 2018 compared to the three months ended June 30, 2017.  Interest and dividend income increased $739,000 when comparing the two periods as the average balance of interest-earning assets increased from $420.5 million for the three months ended June 30, 2017 to $438.2 million for the comparable period in 2018.  The average yield on interest earning assets increased from 4.24% for the three months ended June 30, 2017 to 4.74% for the comparable period in 2018.  Interest expense decreased $18,000 as the average cost of interest-bearing liabilities decreased from 0.56% to 0.53% when comparing the same two periods, which more than offset an increase in the average balance of those liabilities from $351.0 million for the quarter ended June 30, 2017 to $359.5 million for the comparable period in 2018.  

While overall market interest rates have increased over the period, the average cost of deposits has increased only 0.19%.  The slight increase in deposit costs was more than offset by the reduction in interest expense from reduction of other borrowings. 

The provision for loan losses decreased $30,000 from $94,000 for the quarter ended June 30, 2017 to $64,000 for the quarter ended June 30, 2018. 

Non-interest income increased $393,000 to $1.9 million for the three months ended June 30, 2018 compared to $1.5 million for the same period in 2017.  The increase was primarily due to increases in income related to consumer and commercial loan servicing and origination fees, fees from the origination and sale of mortgage loans on the secondary market, increases in investment sales commissions and deposit related fees primarily attributable to debit card usage fees. These increases were partially offset by decreases in revenue from Valley Title Services, LLC and the change in cash surrender value of bank owned life insurance.

Non-interest expense increased $557,000 to $4.5 million for the quarter ended June 30, 2018 compared to $3.9 million for the quarter ended June 30, 2017.  The increase was primarily due to an increase in other operating expense primarily related to legal and professional representation in our negotiations and execution of a merger agreement announced in the second quarter of 2018.  Additionally, salary and employee benefit expenses, occupancy and equipment and data processing expenses increased primarily due to increased costs associated with growth. 

Income tax expense for the three months ended June 30, 2018 was $492,000 compared to $510,000 for the same period in 2017.  The primary reason for the change was the combined effect of an increase in taxable income during the 2018 period and reduction in the corporate federal tax rate.

Results of Operations – Six Months Ended June 30, 2018 and 2017

Net interest income after provision for loan losses increased $1.8 million, or 23.65%, for the six months ended June 30, 2018 as compared to the same period in 2017.  Interest income increased $1.5 million when comparing the two periods as the average balance of interest-earning assets increased from $416.7 million for the six months ended June 30, 2017 to $434.4 million for the comparable period in 2017 while the average yield on interest earning assets increased from 4.15% for the six months ended June 30, 2017 to 4.68% for the same period in 2018.  Interest expense decreased $48,000 as the average cost of interest bearing liabilities decreased from 0.56% to 0.52% when comparing the same two periods, while the average balance of interest bearing liabilities increased $8.5 million from $349.0 million to $357.5 million

Average deposits grew $14.4 million with an increase in the average cost of these deposits increasing only 0.15% irrespective of a larger increase in overall market interest rates.  The slight increase in average deposit cost was more than offset by the reduction in other borrowings, period over period.  

The provision for loan losses decreased $186,000 from $276,000 for the six months ended June 30, 2017 to $90,000 for the six months ended June 30, 2018.

Non-interest income increased $17,000 for the six months ended June 30, 2018 compared to the same period in 2017.  The increase was primarily due to increases in income related to consumer and commercial loan servicing and origination fees, fees from the origination and sale of mortgage loans on the secondary market, increases in investment sales commissions and deposit related fees primarily attributable to debit card usage fees. These increases were partially offset by decreases in a gain on sale of real property no longer used for operations in the 2017 period.

Non-interest expense increased $762,000 for the six months ended June 30, 2018 compared to the same period in 2017. The increase was primarily due to an increase in other operating expense primarily related to legal and professional representation in our negotiations and execution of a merger agreement announced in the second quarter of 2018.  Additionally, salary and employee benefit expenses, occupancy and equipment and data processing expenses increased primarily due to increased costs associated with growth. 

Income tax expense for the six months ended June 30, 2018 was $963,000 as compared to an income tax expense of $1.1 million for the same period in 2017.  The primary reason for the change was the combined effect of an increase in taxable income and reduction in the corporate federal tax rate that became effective in 2018.

Total assets increased $9.3 million to $474.1 million at June 30, 2018, compared to $464.7 million at December 31, 2017.  The Bank was considered well-capitalized under applicable federal regulatory capital guidelines at June 30, 2018.

This release may contain forward-looking statements within the meaning of the federal securities laws.  These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance.  Forward-looking statements are preceded by terms such as "expects", "believes", "anticipates", "intends" and similar expressions.

Forward-looking statements are not guarantees of future performance.  Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements.  Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes.

Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the Company or on its behalf.  Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.

ATHENS BANCSHARES CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited - Dollars in thousands, except per share amounts)










THREE MONTHS ENDED


SIX MONTHS ENDED


June 30,


June 30,


2018


2017


2018


2017

Operating Data:








Total interest income

$    5,193


$    4,454


$10,170


$ 8,654

Total interest expense

472


490


929


977









Net interest income

4,721


3,964


9,241


7,677

Provision for loan losses

64


94


90


276

Net interest income after provision for loan losses

4,657


3,870


9,151


7,401









Total non-interest income

1,887


1,494


3,457


3,440

Total non-interest expense

4,447


3,890


8,510


7,748









Income  before income taxes

2,097


1,474


4,098


3,093

Income tax expense

492


510


963


1,088









Net income

$    1,605


$       964


$     3,135


$     2,005









Net income per share, basic

$     0.93


$     0.58


$      1.83


$      1.20

Average common shares outstanding, basic

1,721,799


1,672,748


1,714,639


1,669,682

Net income per share, diluted

$     0.86


$     0.53


$      1.69


$      1.10

Average common shares outstanding, diluted

1,856,640


1,821,160


1,849,812


1,816,367









Performance ratios (annualized for 3 and 6 month periods):








Return on average assets

1.35%


0.85%


1.32%


0.89%

Return on average equity

11.91


7.76


11.74


8.17

Interest rate spread

4.21


3.68


4.16


3.59

Net interest margin

4.31


3.77


4.25


3.69











 


AS OF


AS OF


June 30, 2018


DECEMBER 31, 2017

FINANCIAL CONDITION DATA:




Total assets

$                    474,061


$                    464,750

Gross loans

342,187


323,190

Allowance for loan losses

4,019


3,961

Core deposit intangible

2,849


3,030

Deposits

412,269


403,022

Securities sold under agreements to repurchase

941


1,751

Note payable to bank

-


1,383

Total liabilities

419,379


412,206

Stockholders' equity

54,682


52,544





Non-performing assets:




     Nonaccrual loans

$                           941


$                          941

     Accruing loans past due 90 days

-


129

     Foreclosed real estate

988


914

     Other non-performing assets

-


2





Troubled debt restructurings(1)

$                        2,729


$                       2,819





Asset quality ratios:




Allowance for loan losses as a percent of total gross loans

1.17%


1.23%

Allowance for loan losses as a percent of non-performing loans

427.10


370.19

Non-performing loans as a percent of total loans

0.27


0.33

 Non-performing loans as a percent of total assets

0.20


0.23

Non-performing assets and troubled debt restructurings as a percentage of total assets

0.94


0.97





Regulatory capital ratios (Bank only):




     Total capital (to risk-weighted assets)

14.29%


15.49%

     Tier 1 capital (to risk-weighted assets)

13.17


14.24

     Tier 1 capital (to adjusted total assets)

10.06


9.73

     Common equity tier 1 capital

13.17


14.24



(1)

Troubled debt restructurings include $212,000 and $282,000 in non-accrual loans at June 30, 2018 and December 31, 2017, respectively, which are also included in non-accrual loans at the respective dates.

 

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SOURCE Athens Bancshares Corporation

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