Market Overview

Western New England Bancorp, Inc. Reports Results for Three and Nine Months Ended September 30, 2018 and Declares Quarterly Cash Dividend

Share:

WESTFIELD, Mass., Oct. 23, 2018 (GLOBE NEWSWIRE) -- Western New England Bancorp, Inc. (the "Company" or "WNEB") (NASDAQ:WNEB), the holding company for Westfield Bank (the "Bank"), announced today the unaudited results of operations for the three and nine months ended September 30, 2018. For the three months ended September 30, 2018, the Company reported net income of $3.9 million, or $0.14 earnings per diluted share, compared to net income of $3.8 million, or $0.13 earnings per diluted share, for the three months ended September 30, 2017.  On a linked quarter basis, net income of $3.9 million decreased $1.2 million, or 23.9%, from net income of $5.1 million, or $0.18 earnings per diluted share, for the three months ended June 30, 2018.  For the nine months ended September 30, 2018, net income was $12.6 million, or $0.43 earnings per diluted share, compared to $12.7 million, or $0.42 earnings per diluted share, for the nine months ended September 30, 2017.

The Company also announced that the Board of Directors declared a quarterly cash dividend of $0.04 per share, payable on or about November 21, 2018 to shareholders of record on November 7, 2018.

"We are pleased with the organic loan and deposit growth during the quarter. We remain focused on growing loans while maintaining strong asset quality. Increasing core deposits continues to be a priority as they are particularly valuable as interest rates continue to rise," stated Westfield Bank President and CEO James C. Hagan. "Although the net interest margin decreased from the second quarter, we continue to adjust the balance sheet to position the Company for a continued rise in interest rates. Over the last nine months, we decreased our average reliance on short-term borrowings by 55% and increased long-term borrowings by 70% in order to manage interest rate risk. We also decreased the low-yielding investment portfolio in order to fund loan growth and pay down high cost borrowings."

Key Highlights:

  • Loans: Total loans as of September 30, 2018 were $1.7 billion, an increase of $23.7 million, or 1.4%, from June 30, 2018 and an increase of $61.9 million, or 5.1% on an annualized basis, from December 31, 2017.
     
  • Deposits: Total deposits increased $57.2 million from June 30, 2018 to September 30, 2018 and increased $102.9 million, or 6.8% on an annualized basis, from December 31, 2017.  Core deposits increased $26.8 million, while time deposits increased by $76.2 million from December 31, 2017 to September 30, 2018. The loan-to-deposit ratio decreased from 108.3% at December 31, 2017 to 105.2% at September 30, 2018.
     
  • Allowance for Loan Losses and Credit Quality: Allowance for loan losses was 0.72% of total loans and 95.7% of non-performing loans at September 30, 2018. Allowance for loan losses as a percentage of loans, excluding the loans acquired from Chicopee Bancorp, Inc., ("Chicopee") was 1.01% at September 30, 2018. Non-performing loans to total loans and non-performing loans to total assets were 0.76% and 0.59%, respectively, at September 30, 2018.
     
  • Provision for Loan Losses: The provision for loan losses decreased $400,000, or 53.3%, from the three months ended June 30, 2018 to the three months ended September 30, 2018. The Company reported net charge-offs of $101,000, or 0.01%, of average loans during the three months ended September 30, 2018.
     
  • Net Interest Margin: The net interest margin, which is stated on a fully taxable equivalent basis throughout this release, was 2.96% for the three months ended September 30, 2018, compared to 3.27% for the three months ended June 30, 2018. Excluding the purchase accounting adjustments and prepayment penalties, the adjusted net interest margin was 2.97% for the three months ended September 30, 2018, compared to 3.03% for the three months ended June 30, 2018. The net interest margin for the nine months ended September 30, 2018 was 3.11% compared to 3.09% for the nine months ended September 30, 2017. Excluding purchase accounting adjustments and prepayment penalties, the adjusted net interest margin increased from 2.99% to 3.02% for the nine months ended September 30, 2017 to the nine months ended September 30, 2018, respectively.        
     
  • Non-Interest Expense: Non-interest expense increased $26,000, or 0.2%, from the three months ended June 30, 2018 to the three months ended September 30, 2018 and represented 2.18% of average assets as of September 30, 2018.
     
  • Repurchases: During the three months ended September 30, 2018, the Company repurchased 294,899 shares at an average price of $10.86 under its previously approved repurchase plan.  As of September 30, 2018, there were 1,302,693 shares available to repurchase under the plan.
     
  • Capital Management: Tangible book value per share was $7.64 at September 30, 2018, compared to $7.57 at December 31, 2017. The Company's and Bank's regulatory capital ratios continued to exceed the levels required to be considered "well-capitalized" under federal banking regulations.

Net Income for the Three Months ended September 30, 2018 compared to the Three Months ended June 30, 2018
The Company reported net income of $3.9 million, or $0.14 earnings per diluted share, for the three months ended September 30, 2018, compared to net income of $5.1 million, or $0.18 earnings per diluted share, for the three months ended June 30, 2018. 

Adjusting for the bank-owned life insurance ("BOLI") death benefits of $715,000, favorable purchase accounting adjustments of $909,000 and a prepayment penalty on a commercial payoff of $269,000 during the three months ended June 30, 2018 and the $62,000 negative purchase accounting adjustments and $10,000 prepayment penalty fees during the three months ended September 30, 2018, net income was $4.0 million, or $0.14 earnings per diluted share, for the three months ended September 30, 2018 compared to $3.2 million, or $0.11 earnings per diluted share, for the three months ended June 30, 2018.

Return on average assets and return on average equity were 0.74% and 6.42%, respectively, for the three months ended September 30, 2018, as compared to 0.98% and 8.63%, respectively, for the three months ended June 30, 2018.

Net Interest Income and Net Interest Margin
On a sequential quarter basis, net interest income decreased $1.3 million, or 7.9%, to $14.6 million for the three months ended September 30, 2018 from $15.9 million for the three months ended June 30, 2018.  The decrease in net interest income was due to a decrease in interest income of $859,000, or 4.2%, and an increase in interest expense of $401,000, or 8.7%. Net interest income for the three months ended June 30, 2018 included $909,000 in favorable purchase accounting adjustments primarily due to the full payoff of a purchase credit impaired loan from Chicopee and a prepayment penalty fee of $269,000, compared to $62,000 in negative purchase accounting adjustments and $10,000 in prepayment penalty fees reported during the three months ended September 30, 2018. Excluding these adjustments, interest income increased $334,000, or 1.7%, offset by the increase in interest expense of $364,000, or 7.7%, for the three months ended September 30, 2018. The increase in interest expense was primarily due to the $367,000, or 13.1%, increase in interest expense on deposits, while interest expense on borrowings decreased $3,000, or 0.2%.

The net interest margin for the three months ended September 30, 2018 was 2.96%, compared to 3.27% during the three months ended June 30, 2018. The decrease in net interest margin was largely due to the following: purchase accounting adjustments decreased from a favorable adjustment of $909,000 made during the three months ended June 30, 2018, compared to a negative adjustment of $62,000 made during the three months ended September 30, 2018. The result was a decrease of 20 basis points on the net interest margin; prepayment penalties decreased $259,000, from $269,000 during the three months ended June 30, 2018 to $10,000 during the three months ended September 30, 2018, which further decreased the net interest margin by five basis points. In addition, the Company also recognized $153,000 in premium amortization due to payoffs during the three months ended September 30, 2018, compared to $64,000 during the three months ended June 30, 2018, which negatively impacted the net interest margin during the three months ended September 30, 2018 by three basis points. After these adjustments, the adjusted net interest margin decreased from 3.04% during the three months ended June 30, 2018 to 3.00% during the three months ended September 30, 2018.

The average yield on interest-earning assets decreased 20 basis points from 4.20% for the three months ended June 30, 2018 to 4.00% for the three months ended September 30, 2018. Excluding the purchase accounting adjustments and the prepayment penalties mentioned above, the average yield on interest-earning assets increased five basis points from 3.98% for the three months ended June 30, 2018 to 4.03% for the three months ended September 30, 2018, respectively. During the three months ended September 30, 2018, the average cost of funds increased 12 basis points from 1.20% for the three months ended June 30, 2018 to 1.32% for the three months ended September 30, 2018. The average cost of time deposits increased 19 basis points from 1.46% for the three months ended June 30, 2018 to 1.65% for the three months ended September 30, 2018. The average cost of deposits increased 12 basis points from 0.88% for the three months ended June 30, 2018 to 1.00% for the three months ended September 30, 2018, while the average cost of borrowings increased 12 basis points during the same period. We anticipate that recent increases in the federal funds target rate may continue to place upward pressure on deposit and borrowing rates as competition for deposits increases.  For the three months ended September 30, 2018, average demand deposits of $328.7 million, an interest-free source of funds, represented 21.0% of average total deposits. During the three months ended September 30, 2018, average interest-earning assets increased $8.5 million, or 0.4%, to $2.0 billion. The increase in average interest-earning assets was due to an increase in average loans of $17.1 million, or 1.0%, partially offset by a decrease in average securities of $9.4 million, or 3.4%.

Provision for Loan Losses
The provision for loan losses decreased $400,000, or 53.3%, from $750,000 for the three months ended June 30, 2018, to $350,000 for the three months ended September 30, 2018. The Company recorded net charge-offs of $101,000 for the three months ended September 30, 2018, as compared to net charge-offs of $134,000 for the three months ended June 30, 2018.

Non-Interest Income
On a sequential quarter basis, non-interest income decreased $637,000, or 21.7%, to $2.3 million for the three months ended September 30, 2018, from $2.9 million for the three months ended June 30, 2018. During the three months ended June 30, 2018, non-interest income included the recognition of $715,000 in BOLI death benefits. Excluding the BOLI death benefit, non-interest income increased $78,000, or 3.5%, for the three months ended September 30, 2018 primarily due to an increase in service charges and fees of $198,000, or 11.7%, partially offset by a decrease in other income of $131,000. The third quarter typically includes seasonal non-interest income which was approximately $200,000 during the three months ended September 30, 2018.

Non-Interest Expense
For the three months ended September 30, 2018, non-interest expense increased $26,000 to $11.6 million from $11.5 million for the three months ended June 30, 2018.  The increase in non-interest expense was primarily due to an increase in professional fees of $86,000, or 12.6%, an increase in other expenses of $79,000, or 4.5%, an increase in furniture and equipment expense of $18,000, or 4.7%, and an increase in FDIC insurance expense of $11,000, or 7.5%.  These increases were partially offset by a decrease in salaries and benefits of $113,000, or 1.7%, a decrease in data processing of $36,000, or 5.3%, a decrease in occupancy expense of $15,000, or 1.6%, and a decrease in advertising expense of $4,000, or 1.1%. The increase in professional fees was due to $102,000 in legal fees associated with a previously charged-off loan from 2010 which resulted in the recovery of $300,000 during the three months ended September 30, 2018. The Company intends to continue to pursue legal remedies against the principals for recovery, but there can be no assurance that these efforts will result in significant recoveries.

For the three months ended September 30, 2018, the efficiency ratio was 68.3%, compared to 63.5% for the three months ended June 30, 2018. The increase in the efficiency ratio was primarily due to the decrease in purchase accounting adjustments of $971,000, or 106.8%, from the three months ended June 30, 2018 to the three months ended September 30, 2018.

Income Tax Provision
The Company's effective tax rate was 21.0% for the three months ended June 30, 2018, compared to 21.5% for the three months ended September 30, 2018.

Net Income for the Three Months ended September 30, 2018 compared to the Three Months ended September 30, 2017
The Company reported net income of $3.9 million, or $0.14 earnings per diluted share, for the three months ended September 30, 2018, compared to net income of $3.8 million, or $0.13 earnings per diluted share, for the three months ended September 30, 2017. Net income, adjusting for negative purchase accounting adjustments of $62,000 during the three months ended September 30, 2018 and favorable purchase accounting adjustments of $448,000 during the three months ended September 30, 2017 was $4.0 million, or $0.14 earnings per diluted share and $3.4 million, or $0.11 earnings per diluted share, respectively, an increase of $604,000, or 17.9%.

Return on average assets and return on average equity were 0.74% and 6.42%, respectively, for the three months ended September 30, 2018, as compared to 0.73% and 5.98%, respectively, for the three months ended September 30, 2017.

Net Interest Income and Net Interest Margin
Net interest income decreased $191,000, or 1.3%, to $14.6 million for the three months ended September 30, 2018, from $14.8 million for the three months ended September 30, 2017.  The decrease in net interest income was due to an increase in interest expense of $1.3 million, or 34.4%, partially offset by an increase in interest income of $1.1 million, or 5.9% for the same period. Net interest income for the three months ended September 30, 2017 included favorable purchase accounting adjustments of $448,000, compared to $62,000 in negative purchase accounting adjustments during the three months ended September 30, 2018. Adjusting for the purchase accounting adjustments, net interest income increased $319,000, or 2.2%, from $14.3 million for the three months ended September 30, 2017 to $14.7 million for the three months ended September 30, 2018.

The net interest margin for the three months ended September 30, 2018 was 2.96%, compared to 3.09% during the three months ended September 30, 2017. The decrease in net interest margin was largely attributable to the decrease in purchase accounting adjustments, from a favorable adjustment of $448,000 for the three months ended September 30, 2017 to a negative adjustment of $62,000 for the three month ended September 30, 2018, which negatively impacted the margin by 10 basis points. Excluding the purchase accounting adjustments, the net interest margin was 2.97% for the three months ended September 30, 2018, compared to 3.00%, for the three months ended September 30, 2017. Also, negatively impacting the net interest margin was the reduction in the statutory federal income tax rate from 35% for the three months ended September 30, 2017 to 21% for three months ended September 30, 2018 which reduced the tax-equivalent adjustment and resulted in a three basis point decline in the fully tax equivalent net interest margin over the same period. The net interest margin continues to be impacted by the significant increase in the federal funds target rate along with the competitive pressure to increase deposit rates.

The average yield on interest-earning assets increased 11 basis points from 3.89% for the three months ended September 30, 2017 to 4.00% for the three months ended September 30, 2018. Excluding the purchase accounting adjustments in both periods and prepayment fees in the September 2018 period, the average yield on interest-earning assets increased 17 basis points from 3.86% for the three months ended September 30, 2017 to 4.03% for the three months ended September 30, 2018, respectively. During the three months ended September 30, 2018, the average cost of funds increased 33 basis points from 0.99% for the three months ended September 30, 2017 to 1.32% for the three months ended September 30, 2018. The average cost of time deposits increased 52 basis points from 1.13% for the three months ended September 30, 2017 to 1.65% for the three months ended September 30, 2018. The average cost of deposits increased 30 basis points from 0.70% for the three months ended September 30, 2017 to 1.00% for the three months ended September 30, 2018, while the average cost of borrowings increased 60 basis points during the same period. We anticipate that recent increases in the federal funds target rate may result in continued an upward pressure on deposit and borrowing rates as competition for deposits increases.  For the three months ended September 30, 2018, average demand deposits of $328.7 million, an interest-free source of funds, represented 21.0% of average total deposits and increased $27.9 million, or 9.3%, from the three months ended September 30, 2017.

During the three months ended September 30, 2018, average interest-earning assets increased $41.9 million, or 2.2%, to $2.0 billion. The increase in average interest-earning assets was due to an increase in average loans of $76.7 million, or 4.8%, partially offset by a decrease in average securities of $38.7 million, or 12.8%.

Average Federal Home Loan Bank ("FHLB") borrowings decreased $8.4 million, or 2.9%, from $287.6 million for the three months ended September 30, 2017 to $279.2 million for the three months ended September 30, 2018. In order to manage interest rate risk, average long-term FHLB borrowings increased $101.1 million, or 87.0%, from $116.2 million during the three months ended September 30, 2017 to $217.3 million during the three months ended September 30, 2018, while short-term borrowings decreased $109.6 million, or 63.9%, during the same period.  Long-term borrowings were used to replace a portion of our short-term borrowings that matured during the quarter in order to manage funding costs in a rising rate environment.

Provision for Loan Losses
The provision for loan losses increased $150,000, or 75.0%, from $200,000 for the three months ended September 30, 2017 to $350,000 for the three months ended September 30, 2018. The Company recorded net charge-offs of $101,000 for the three months ended September 30, 2018 and $100,000 for the same period in 2017. 

Non-Interest Income
Non-interest income decreased $116,000, or 4.8%, to $2.3 million for the three months ended September 30, 2018, from $2.4 million for the three months ended September 30, 2017. The decrease of $116,000 in non-interest income was primarily due to the decrease in other income of $111,000, or 100%, the increase in unrealized losses on the Company's marketable equity securities portfolio due to the adoption of ASU 2016-01 of $43,000, the decrease in gain on sale of securities of $70,000 and a decrease of $67,000 on the gain on sale of other real estate owned ("OREO"), partially offset by the increase in service charges and fees of $177,000, or 10.3%.

Non-Interest Expense
For the three months ended September 30, 2018, non-interest expense increased $416,000, or 3.7%, to $11.6 million, or 2.18% of average assets, from $11.2 million, or 2.14% of average assets, for the three months ended September 30, 2017.  The increase in non-interest expense was primarily due to an increase in other non-interest expense of $299,000, or 19.3%, an increase in professional fees of $125,000, or 19.5%, an increase in occupancy expense of $61,000, or 6.8%, and an increase in advertising expenses of $23,000, or 7.0%. These increases were partially offset by a decrease in salaries and benefits of $39,000, or 0.6%, a decrease in data processing of $38,000, or 5.6%, a decrease in furniture and equipment of $10,000, or 2.4%, and a decrease in FDIC insurance of $5,000, or 3.1%. The increase in professional fees of $125,000 was primarily due to $103,000 in legal fees associated with a previously charged-off loan from 2010 which resulted in the recovery of $300,000 during the three months ended September 30, 2018. The Company intends to continue to pursue legal remedies against the principals for recovery, but there can be no assurance that these efforts will result in significant recoveries.

For the three months ended September 30, 2018, the efficiency ratio was 68.3%, compared to 65.4% for the three months ended September 30, 2017.

Income Tax Provision
The Company's effective tax rate decreased from 34.8% for the three months ended September 30, 2017 to 21.5% for the three months ended September 30, 2018 and reflects a reduction in the statutory federal income tax rate to 21% from 35% effective January 1, 2018 related to enactment of the Tax Cuts and Jobs Act (the "Tax Act") in December 2017.

Net Income for the Nine Months Ended September 30, 2018 compared to the Nine Months Ended September 30, 2017
For the nine months ended September 30, 2018, the Company reported net income of $12.6 million, or $0.43 earnings per diluted share, compared to $12.7 million, or $0.42 earnings per diluted share, for the nine months ended September 30, 2017. The financial results for the nine months ended September 30, 2017 included $1.8 million in tax benefits recorded in connection with the reversal of a deferred tax valuation allowance and exercises of stock options, both favorably impacting the income tax provision for nine months ended September 30, 2017. Also, included in the nine months ended September 30, 2017 was $379,000, net of tax, of merger related costs associated with the acquisition of Chicopee.  Excluding these tax benefits and merger expenses for the 2017 period and $165,000 of tax benefits recorded for the nine months ended September 30, 2018, core net income was $11.2 million, or $0.37 earnings per diluted share for the nine months ended September 30, 2017, compared to $12.4 million, or $0.42 earnings per diluted share for the nine months ended September 30, 2018. Core net income is a non-GAAP financial measure.  Management believes core net income more accurately reflects the Company's results of operations in the overall evaluation of its performance and believes it is useful to compare core net income to prior quarters.  A reconciliation of core net income is included in the accompanying financial tables.

Return on average assets and return on average equity were 0.80% and 6.95% for the nine months ended September 30, 2018, respectively, compared to 0.82% and 6.82% for the nine months ended September 30, 2017, respectively. Excluding tax benefits and merger related expenses, net of tax, return on average assets and return on average equity were 0.79% and 6.85% for the nine months ended September 30, 2018, compared to 0.73% and 6.05% for the nine months ended September 30, 2017, respectively.

Net Interest Income and Net Interest Margin
Net interest income increased $1.2 million, or 2.6%, from $44.0 million for the nine months ended September 30, 2017 to $45.2 million for the nine months ended September 30, 2018. The increase in net interest income was primarily due to an increase in interest and dividend income of $4.0 million, or 7.3%, partially offset by an increase in interest expense of $2.9 million, or 26.5%, from the nine months ended September 30, 2017. Excluding favorable purchase accounting adjustments of $1.1 million and prepayment penalties of $279,000 during the nine months ended September 30, 2018 and $1.4 million in favorable purchase accounting adjustments during the nine months ended September 30, 2017, net interest income increased $1.2 million, or 2.8%. After adjusting for the favorable purchase accounting adjustments and the prepayment penalties, interest income increased $3.5 million, or 6.5%, million primarily due to an increase in average loans of $68.7 million, or 4.3%, for the nine months ended September 30, 2018. The increase in interest expense of $2.9 million, or 26.5%, was due to an increase in interest expense on deposits of $2.0 million, or 32.2%, and an increase in interest expense on borrowings of $863,000, or 18.8%, for the nine months ended September 30, 2018.  Favorable purchase accounting adjustments on deposits decreased $526,000, or 69.9%, from $753,000 during the nine months ended September 30, 2017 to $227,000 during the nine months ended September 30, 2018. Excluding these adjustments, interest expense on deposits increased $1.5 million, or 21.1%, during the same period.

The net interest margin increased two basis points from 3.09% for the nine months ended September 30, 2017 to 3.11% for the nine months ended September 30, 2018. During the nine months ended September 30, 2018 and September 30, 2017, favorable purchase accounting adjustments related to the Chicopee acquisition increased net interest income by $1.1 million and $1.4 million, respectively. The nine months ended September 30, 2018 also included prepayment penalties of $279,000. Excluding these items, the adjusted net interest margin for the nine months ended September 30, 2018 was 3.02% compared to 2.99% for the nine months ended September 30, 2017. Also, negatively impacting the net interest margin was the reduction in the statutory federal income tax rate from 35% for the nine months ended September 30, 2017 to 21% for nine months ended September 30, 2018, thus reducing the tax-equivalent amount of each dollar of tax-exempt income and causing a two basis point decline in net interest margin over the same period.

The average asset yield decreased 20 basis points from 3.83% for the nine months ended September 30, 2017 to 4.03% for the nine months ended September 30, 2018. The average cost of funds increased 25 basis points from 0.95% for the nine months ended September 30, 2017 to 1.20% for the nine months ended September 30, 2018. The average cost of time deposits increased 38 basis points from 1.09% for the nine months ended September 30, 2017 to 1.47% for the nine months ended September 30, 2018. Excluding the favorable purchase account adjustments on time deposits of $227,000 and $753,000 during the nine months ended September 30, 2018 and September 30, 2017, respectively, and the cost of deposits increased 14 basis points from 0.77% during the nine months ended September 30, 2017 to 0.91% during the nine months ended September 30, 2018, respectively. The average cost of borrowings increased 54 basis points from 2.02% for the nine months ended September 30, 2017 to 2.56% for the nine months ended September 30, 2018.

Average interest-earning assets increased $20.0 million, or 1.0%, to $2.0 billion for the nine months ended September 30, 2018. The increase in average interest-earning assets was due to the increase in average loans of $68.7 million, or 4.3%, partially offset by the decrease in average investments of $32.3 million, or 10.6%, and a decrease in short-term investments of $16.2 million, or 67.5%.

Average FHLB borrowings decreased $4.7 million, or 1.7%, from $283.1 million for the nine months ended September 30, 2017 to $278.4 million for the nine months ended September 30, 2018. In order to manage interest rate risk, during the nine months ended September 30, 2018, average long-term FHLB borrowings of $205.0 million increased $84.3 million, or 69.8%, from $120.7 million for the nine months ended September 30, 2017, as short-term borrowings decreased $89.0 million, or 54.8%, during the same period. New long-term borrowings were used to replace a portion of our short-term borrowings that matured over the nine months in order to manage funding costs in a rising rate environment.

Provision for Loan Losses
The provision for loan losses of $1.6 million increased $750,000, or 88.2%, for the nine months ended September 30, 2018 compared to $850,000 for the nine months ended September 30, 2017. The Company recorded net charge-offs $196,000 for the nine months ended September 30, 2018, as compared to net charge-offs of $400,000 for the nine months ended September 30, 2017. Contributing to the increase in the general reserves was the increase in commercial real estate loans of $47.8 million, or 6.7%, from $716.9 million at September 30, 2017 to $764.7 million at September 30, 2018.

Non-Interest Income
For the nine months ended September 30, 2018, non-interest income of $7.0 million increased $491,000, or 7.5%, compared to $6.5 million for the nine months ended September 30, 2017. During the nine months ended September 30, 2018, non-interest income included the recognition of $715,000 in BOLI death benefits. Excluding the BOLI death benefits, non-interest income decreased of $224,000, or 3.4%. The decrease was primarily due to the decrease of $302,000 in realized securities losses primarily due to the amortization of the remaining premium on a bond which was paid in full prior to its final maturity, an increase of $190,000 in unrealized losses on the Company's marketable equity securities portfolio due to the adoption of ASU 2016-01, a decrease in other income of $96,000, or 42.3%, and a decrease of $19,000 on the gain on the sale of OREO, partially offset by an increase in service charges and fees of $378,000, or 7.9%, from $4.8 million for the nine months ended September 30, 2017 to $5.2 million for the nine months ended September 30, 2018.

Non-Interest Expense
For the nine months ended September 30, 2018, non-interest expense increased $1.1 million, or 3.4%, to $34.5 million, or 2.21% of average assets, compared to $33.4 million, or 2.15% of average assets for the nine months ended September 30, 2017. Excluding merger-related expenses of $526,000, non-interest expense increased $1.6 million, or 4.9%, from $32.9 million for the nine months ended September 30, 2017 to $34.5 million for the nine months ended September 30, 2018. The increase in non-interest expense was primarily due to the increase in salaries and benefits of $594,000, or 3.1%, an increase in data processing of $217,000, or 12.5%, an increase in professional fees of $188,000, or 9.8%, an increase

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com