NEW ALBANY, Ind.--(BUSINESS WIRE)--Your Community Bankshares, Inc. (NASDAQ: YCB) reported fourth quarter net income available to common shareholders of $3.8 million and earnings per diluted common share of $0.68, compared to $2.3 million, or $0.66 per diluted common share, for the same period in 2014. Excluding merger and integration expenses resulting from the acquisition of First Financial Service Corporation of Elizabethtown, Kentucky (“FFKY”), the consolidation of the Company’s two subsidiary banks, and a net loss on the sale of loans, net income available to common shareholders for the quarter would have been $4.1 million or $0.74 per diluted common share (see “Regulation G Disclosure” below). The Company also announced today that on January 19, 2016, its board of directors declared a quarterly cash dividend on the Company’s common stock of $0.12 per share payable on February 25, 2016 to shareholders of record at the close of business on February 8, 2016.
“We made substantial progress integrating First Financial Service Corporation’s operations into our Company during 2015,” stated James Rickard, President and Chief Executive Officer. “We are actually ahead of where we thought we would be in the process as we enter 2016. This gives us a very strong foundation on which to continue to build shareholder value as we look ahead to the next few years.”
Mr. Rickard continued, “Core earnings continues to grow, but we are even more pleased with the improvement in credit quality during the last half of the year. Completing the bulk loan sale was a big step forward for the Company. We expect that this will have a meaningful impact on our non-interest expense as we reduce resources allocated to dealing with problem loan relationships.”
The following points summarize significant financial information for the fourth quarter of 2015:
- Net income for the fourth quarter of 2015 was $3.9 million while net income available to common shareholders was $3.8 million. Excluding merger and integration expenses of $124,000 ($81,000, net of tax) and loss on sale of loans of $316,000 ($205,000, net of tax), net income would have been $4.1 million (see “Regulation G Disclosure” below).
- Non-performing assets to total assets increased to 0.90% at December 31, 2015 from 0.87% at September 30, 2015. Non-accrual loans declined from $4.5 million at September 30, 2015 to $4.0 million at December 31, 2015. Foreclosed and repossessed assets increased from $9.3 million to $10.0 million over the same period.
- During the fourth quarter the Company completed a bulk loan sale in which the Company sold 54 loans to third party investors netting proceeds of $15.6 million after costs to sell. The Company recorded a net loss of $316,000 as a result of loan sale transactions in the fourth quarter. The loans sold were excluded from the Company’s credit quality metrics as of September 30, 2015.
- Tangible book value per common share was $21.57 as of December 31, 2015 as compared to $20.55 at December 31, 2014.
- The Company is closing its financial center located at 12629 Taylorsville Road, Louisville, KY 40299 on February 19, 2016. The Company leases the land and owns the building. During the third quarter, the Company entered into a sublease with a third party and took a charge of $972,000 related to the transaction. Consequently, the Company expects to recognize approximately $400,000 in annual pre-tax cost savings starting on March 1, 2016.
- The Company closed its drive through located at 401 E. Spring Street, New Albany, IN 47150 on November 20, 2015, which will allow the Company to avoid approximately $60,000 in non-interest expense per year starting on the closing date.
- The Company closed the lobby of its location located at 1671 N. Wilson Road, Radcliff, KY 40160 effective November 20, 2015. The Company continues to operate a drive through and an ATM at this location. The Company expects to avoid approximately $70,000 in non-interest expense per year starting on the closing date.
- Net interest income increased to $13.9 million from $13.4 million in the fourth quarter of 2015 due primarily to the reclassification of $466,000 from non-accretable yield into accretion income from one loan relationship. The loan was acquired in the acquisition of First Federal Savings Bank of Elizabethtown in January 2015.
- Fully tax equivalent net interest margin was 4.08%, an increase from 3.94% for the third quarter of 2015. The increase in the margin was attributable to the same factors that drove the increase in net interest income.
- The Company recorded $330,000 provision for loan losses during the quarter, a decrease from $637,000 for the same quarter in 2014, primarily because of generally improving credit quality metrics, including net charge-offs.
- Non-interest income declined to $2.8 million compared to $3.5 million for the third quarter of 2015. Excluding the net loss on sale of loans in the fourth quarter and the gain on recognition of life insurance benefit in the third quarter, non-interest income increased from $2.7 million for the third quarter to $2.9 million for the fourth. This increase was mostly attributable to an increase in interchange income and mortgage banking income.
- Non-interest expense was $11.9 million as compared to $12.7 million for the third quarter of 2015. Excluding merger and integration expenses, non-interest expense increased from $11.2 million for the third quarter to $11.8 million for the fourth. This increase was due to higher incentive and stock-based compensation expenses for the fourth quarter as compared to the third.
- The Company’s effective tax rate was 14.07% during the quarter.
- Beginning March 31, 2015, the Company and its subsidiaries were subject to the new Basel III capital standards and met the definition of well-capitalized under the revised rules as of December 31, 2015.
- Selected performance ratios for the company are set out in the following table.
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December | September | June | March | December | December | December | |||||||||||||||
31, | 30, | 30, | 31, | 31, | 31, | 31, | |||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Return on average assets | 0.98 | % | 0.99 | % | 0.89 | % | (0.23 | )% | 1.10 | % | 0.65 | % | 1.04 | % | |||||||
Return on average assets, excluding merger and integration expenses and net loss on sale of loans, net of income taxes | 1.05 | % | 1.01 | % | 0.92 | % | 0.37 | % | 1.17 | % | 0.83 | % | 1.10 | % | |||||||
Return on average equity | 10.30 | % | 10.44 | % | 9.75 | % | (2.57 | )% | 9.83 | % | 7.03 | % | 9.54 | % | |||||||
Return on average equity, excluding merger and integration expenses and net loss on sale of loans, net of income taxes and gain on recognition of life insurance benefit | 11.07 | % | 10.65 | % | 10.02 | % | 4.16 | % | 10.46 | % | 9.00 | % | 10.03 | % | |||||||
Net interest margin, fully tax equivalent | 4.08 | % | 3.94 | % | 4.04 | % | 3.87 | % | 4.52 | % | 3.98 | % | 4.29 | % | |||||||
Net interest margin excluding accretion | 3.67 | % | 3.61 | % | 3.60 | % | 3.53 | % | 4.14 | % | 3.60 | % | 4.17 | % | |||||||
Efficiency ratio (1) | 64.63 | % | 64.56 | % | 58.85 | % | 82.07 | % | 57.15 | % | 67.35 | % | 63.75 | % | |||||||
(1) Excludes gains or losses on sales of securities, foreclosed asset expenses, amortization of intangibles, and merger and integration expenses and includes net interest income on a fully taxable equivalent basis. |
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Your Community Bankshares, Inc. | ||||||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||||||
December 31, |
September 30, |
June 30, | March 31, | December 31, | ||||||||||||||||
2015 | 2015 (1) | 2015 (1) | 2015 (1) | 2014 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
(As Recast) | (As Recast) | (As Recast) | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from financial institutions | $ | 30,425 | $ | 29,618 | $ | 28,947 | $ | 45,784 | $ | 12,872 | ||||||||||
Interest-bearing deposits in other financial institutions | 13,365 | 10,814 | 32,383 | 56,290 | 6,808 | |||||||||||||||
Securities available for sale | 378,978 | 403,486 | 398,292 | 385,498 | 202,177 | |||||||||||||||
Loans held for sale | 1,015 | 19,386 | 390 | 221 | - | |||||||||||||||
Loans | 1,016,314 | 992,622 | 1,008,724 | 1,005,416 | 603,575 | |||||||||||||||
Allowance for loan losses | (6,851 | ) | (6,416 | ) | (8,045 | ) | (7,120 | ) | (6,465 | ) | ||||||||||
Federal Home Loan Bank and Federal Reserve stock | 3,890 | 3,891 | 3,807 | 5,451 | 4,964 | |||||||||||||||
Accrued interest receivable | 5,328 | 5,151 | 5,083 | 4,802 | 3,152 | |||||||||||||||
Premises and equipment, net | 33,270 | 30,314 | 31,462 | 31,793 | 18,124 | |||||||||||||||
Premises and equipment held for sale | - | 3,898 | 5,954 | 5,974 | - | |||||||||||||||
Company owned life insurance | 33,127 | 32,828 | 33,348 | 33,095 | 22,058 | |||||||||||||||
Goodwill | 4,945 | 4,945 | 4,945 | 4,945 | - | |||||||||||||||
Core deposit intangible | 5,015 | 5,321 | 5,634 | 5,951 | 682 | |||||||||||||||
Foreclosed and repossessed assets | 9,952 | 9,261 | 8,337 | 15,927 | 4,431 | |||||||||||||||
Other assets | 27,242 | 27,568 | 29,804 | 28,328 | 16,368 | |||||||||||||||
Total Assets | $ | 1,556,015 | $ | 1,572,687 | $ | 1,589,065 | $ | 1,622,355 | $ | 888,746 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Non-interest bearing | $ | 286,739 | $ | 275,350 | $ | 292,179 | $ | 285,634 | $ | 200,142 | ||||||||||
Interest-bearing | 975,325 | 968,620 | 1,014,357 | 1,052,089 | 450,802 | |||||||||||||||
Total deposits | 1,262,064 | 1,243,970 | 1,306,536 | 1,337,723 | 650,944 | |||||||||||||||
Short-term borrowings | 48,785 | 74,034 | 42,989 | 39,228 | 45,818 | |||||||||||||||
Subscription agreement proceeds in escrow | - | - | - | - | 20,774 | |||||||||||||||
Other borrowings | 108,347 | 93,974 | 84,737 | 85,611 | 67,000 | |||||||||||||||
Accrued interest payable | 451 | 375 | 703 | 462 | 158 | |||||||||||||||
Other liabilities | 9,282 | 8,832 | 8,741 | 14,059 | 4,504 | |||||||||||||||
Total liabilities | 1,428,929 | 1,421,185 | 1,443,706 | 1,477,083 | 789,198 | |||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Preferred stock | - | 28,000 | 28,000 | 28,000 | 28,000 | |||||||||||||||
Common stock | 578 | 578 | 578 | 578 | 386 | |||||||||||||||
Additional paid-in capital | 90,869 | 90,459 | 89,791 | 89,342 | 44,421 | |||||||||||||||
Retained earnings | 39,512 | 36,336 | 33,228 | 30,419 | 32,110 | |||||||||||||||
Accumulated other comprehensive income | 2,089 | 2,489 | 150 | 3,788 | 1,809 | |||||||||||||||
Treasury stock | (5,962 | ) | (6,360 | ) | (6,388 | ) | (6,855 | ) | (7,178 | ) | ||||||||||
Total shareholders’ equity | 127,086 | 151,502 | 145,359 | 145,272 | 99,548 | |||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 1,556,015 | $ | 1,572,687 | $ | 1,589,065 | $ | 1,622,355 | $ | 888,746 | ||||||||||
Book value per common share | $ | 23.41 | $ | 22.84 | $ | 21.53 | $ | 21.81 | $ | 20.75 | ||||||||||
Tangible book value per common share | $ | 21.57 | $ | 21.10 | $ | 19.72 | $ | 19.93 | $ | 20.55 | ||||||||||
(1) Management obtained information subsequent to the issuance of the September 30, 2015, June 30, 2015 and March 31, 2015 financial statements about the fair value of assets acquired and liabilities assumed from First Financial Service Corporation which resulted in an adjustment to the initial fair values established. The table below details the adjustments to the September 30, 2015, June 30, 2015 and March 31, 2015 consolidated balance sheet; there were no adjustments to the consolidated statement of operations for the periods ending September 30, 2015, June 30, 2015 and March 31, 2015. |
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September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||||||||||||
As Previously |
Recast |
As Previously |
Recast |
As Previously |
Recast | |||||||||||||||||||||||||
Reported |
Adjustments |
As Recast |
Reported |
Adjustments |
As Recast |
Reported |
Adjustments |
As Recast |
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(In thousands) | ||||||||||||||||||||||||||||||
Loans | $ | 992,662 | $ | - | $ | 992,662 | $ | 1,005,016 | $ | 3,708 | $ | 1,008,724 | $ | 999,906 | $ | 5,510 | $ | 1,005,416 | ||||||||||||
Loans held for sale | 20,896 | (1,510 | ) | 19,386 | 390 | - | 390 | 221 | - | 221 | ||||||||||||||||||||
Premises and equipment held for sale | 3,898 | - | 3,898 | 5,635 | 319 | 5,954 | 6,155 | (181 | ) | 5,974 | ||||||||||||||||||||
Foreclosed and repossessed assets | 9,028 | 233 | 9,261 | 8,354 | (17 | ) | 8,337 | 15,818 | 109 | 15,927 | ||||||||||||||||||||
Other assets (deferred tax asset) | 27,121 | 447 | 27,568 | 30,647 | (843 | ) | 29,804 | 29,430 | (1,102 | ) | 28,328 | |||||||||||||||||||
Goodwill | 4,115 | 830 | 4,945 | 6,375 | (1,430 | ) | 4,945 | 7,544 | (2,599 | ) | 4,945 | |||||||||||||||||||
Other borrowings (subordinated debt) | 93,974 | - | 93,974 | 83,000 | 1,737 | 84,737 | 83,874 | 1,737 | 85,611 | |||||||||||||||||||||
Your Community Bankshares, Inc. | ||||||||||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December | September | June | March | December | December | December | ||||||||||||||||||||||
31, | 30, | 30, | 31, | 31, | 31, | 31, | ||||||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||
(In thousands except share and per data) | ||||||||||||||||||||||||||||
Interest and dividend income | ||||||||||||||||||||||||||||
Loans, including fees | $ | 12,956 | $ | 12,361 | $ | 12,787 | $ | 12,523 | $ | 7,911 | $ | 50,627 | $ | 28,950 | ||||||||||||||
Investment securities and other | 2,307 | 2,334 | 2,319 | 2,233 | 1,322 | 9,193 | 5,324 | |||||||||||||||||||||
Interest and dividend income | 15,263 | 14,695 | 15,106 | 14,756 | 9,233 | 59,820 | 34,274 | |||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||
Deposits | 575 | 570 | 580 | 574 | 245 | 2,299 | 1,020 | |||||||||||||||||||||
Borrowed funds | 795 | 731 | 612 | 698 | 291 | 2,836 | 921 | |||||||||||||||||||||
Total interest expense | 1,370 | 1,301 | 1,192 | 1,272 | 536 | 5,135 | 1,941 | |||||||||||||||||||||
Net interest income | 13,893 | 13,394 | 13,914 | 13,484 | 8,697 | 54,685 | 32,333 | |||||||||||||||||||||
Provision for loan losses | 330 | - | 2,155 | 106 | 637 | 2,591 | 1,275 | |||||||||||||||||||||
Net interest income after provision for loan losses | 13,563 | 13,394 | 11,759 | 13,378 | 8,060 | 52,094 | 31,058 | |||||||||||||||||||||
Non-interest income | ||||||||||||||||||||||||||||
Service charges on deposit accounts | 1,634 | 1,655 | 1,669 | 1,391 | 854 | 6,349 | 3,355 | |||||||||||||||||||||
Interchange income | 700 | 575 | 476 | 444 | 287 | 2,195 | 1,168 | |||||||||||||||||||||
Earnings on company owned life insurance | 298 | 226 | 253 | 252 | 170 | 1,029 | 672 | |||||||||||||||||||||
Net gain (loss) on sales of available for sale securities | 204 | (1 | ) | - | 51 | - | 254 | 468 | ||||||||||||||||||||
Net loss on sale of loans | (316 | ) | - | - | - | - | (316 | ) | - | |||||||||||||||||||
Mortgage banking income | 104 | 70 | 74 | 117 | 42 | 365 | 126 | |||||||||||||||||||||
Commission income | 46 | 48 | 50 | 47 | 48 | 191 | 194 | |||||||||||||||||||||
Gain on recognition of life insurance benefit | - | 835 | - | - | - | 835 | - | |||||||||||||||||||||
Other income | 136 | 101 | 130 | 110 | 128 | 477 | 462 | |||||||||||||||||||||
Non-interest income |
2,806 | 3,509 | 2,652 | 2,412 | 1,529 | 11,379 | 6,445 | |||||||||||||||||||||
Non-interest expense | ||||||||||||||||||||||||||||
Salaries and employee benefits | 6,065 | 5,619 | 5,086 | 9,119 | 3,276 | 25,889 | 13,878 | |||||||||||||||||||||
Occupancy & equipment | 1,681 | 2,640 | 1,672 | 2,208 | 966 | 8,201 | 3,814 | |||||||||||||||||||||
Data processing | 1,152 | 1,567 | 921 | 1,814 | 670 | 5,454 | 2,617 | |||||||||||||||||||||
Core deposit intangible amortization | 307 | 312 | 318 | 397 | 78 | 1,334 | 322 | |||||||||||||||||||||
Foreclosed assets, net | 90 | 119 | (95 | ) | 344 | 118 | 458 | 162 | ||||||||||||||||||||
Other expense | 2,589 | 2,395 | 2,573 | 4,042 | 1,444 | 11,599 | 5,696 | |||||||||||||||||||||
Total non-interest expense | 11,884 | 12,652 | 10,475 | 17,924 | 6,552 | 52,935 | 26,489 | |||||||||||||||||||||
Income (loss) before income taxes | 4,485 | 4,251 | 3,936 | (2,134 | ) | 3,037 | 10,538 | 11,014 | ||||||||||||||||||||
Income tax expense (benefit) | 627 | 334 | 371 | (1,198 | ) | 600 | 134 | 2,001 | ||||||||||||||||||||
Net income (loss) | 3,858 | 3,917 | 3,565 | (936 | ) | 2,437 | 10,404 | 9,013 | ||||||||||||||||||||
Preferred stock dividend | (91 | ) | (110 | ) | (109 | ) | (110 | ) | (110 | ) | (420 | ) | (439 | ) | ||||||||||||||
Net income (loss) available (attributable) to common shareholders | $ | 3,767 | $ | 3,807 | $ | 3,456 | $ | (1,046 | ) | $ | 2,327 | $ | 9,984 | $ | 8,574 | |||||||||||||
Earnings (loss) per basic common share | $ | 0.70 | $ | 0.70 | $ | 0.64 | $ | (0.19 | ) | $ | 0.68 | $ | 1.85 | $ | 2.49 | |||||||||||||
Earnings (loss) per diluted common share | $ | 0.68 | $ | 0.70 | $ | 0.64 | $ | (0.19 | ) | $ | 0.66 | $ | 1.82 | $ | 2.46 | |||||||||||||
Dividend per common share | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.48 | ||||||||||||||
Average number of basic common shares | 5,413,914 | 5,405,691 | 5,383,887 | 5,374,819 | 3,446,486 | 5,394,712 | 3,437,643 | |||||||||||||||||||||
Average number of dilutive common shares | 5,505,757 | 5,470,557 | 5,437,602 | 5,374,819 | 3,499,951 | 5,492,405 | 3,487,117 | |||||||||||||||||||||
Merger and integration expenses contained in: | ||||||||||||||||||||||||||||
Salaries and employee benefits | - | - | 60 | 2,105 | - | 2,165 | - | |||||||||||||||||||||
Occupancy & equipment | 21 | 972 | - | 310 | - | 1,303 | - | |||||||||||||||||||||
Data processing | 59 | 413 | 27 | 719 | - | 1,218 | - | |||||||||||||||||||||
Other expense | 44 | 20 | 69 | 633 | 238 | 766 | 697 | |||||||||||||||||||||
Total merger and integration expenses | 124 | 1,405 | 156 | 3,767 | 238 | 5,452 | 697 | |||||||||||||||||||||
Total merger and integration expenses, net of income taxes | 81 | 913 | 101 | 2,449 | 157 | 3,544 | 460 | |||||||||||||||||||||
Your Community Bankshares, Inc. | |||||||||||||||||||||||||||||||||||
Average Balances, Interest Yields and Costs | |||||||||||||||||||||||||||||||||||
Three Months Ending, |
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12/31/2015 |
9/30/2015 |
6/30/2015 |
03/31/2015 |
12/31/2014 |
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Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||||||
Balance |
Cost |
Balance |
Cost |
Balance |
Cost |
Balance |
Cost |
Balance |
Cost |
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ASSETS |
(In thousands) | ||||||||||||||||||||||||||||||||||
Earning assets: | |||||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | $ | 24,233 | 0.36 | % | $ | 17,489 | 0.73 | % | $ | 48,008 | 0.41 | % | $ | 63,092 | 0.36 | % | $ | 6,113 | 0.39 | % | |||||||||||||||
Taxable securities | 261,870 | 1.86 | 283,885 | 1.78 | 288,420 | 1.84 | 318,695 | 1.71 | 117,961 | 1.78 | |||||||||||||||||||||||||
Tax-exempt securities | 117,447 | 5.27 | 112,408 | 5.35 | 98,423 | 5.52 | 83,217 | 5.57 | 80,416 | 5.49 | |||||||||||||||||||||||||
Total loans and fees | 1,019,794 | 5.13 | 1,001,041 | 4.96 | 1,000,865 | 5.17 | 993,536 | 5.15 | 595,578 | 5.34 | |||||||||||||||||||||||||
FHLB and Federal Reserve stock | 3,890 | 4.18 | 3,837 | 4.65 | 4,860 | 5.69 | 6,484 | 5.94 | 5,768 | 3.71 | |||||||||||||||||||||||||
Total earning assets | 1,427,234 | 4.46 | 1,418,660 | 4.30 | 1,440,576 | 4.37 | 1,465,024 | 4.22 | 805,836 | 4.78 | |||||||||||||||||||||||||
Less: Allowance for loan losses |
(7,301 | ) | (7,757 | ) | (7,532 | ) | (6,838 | ) | (7,743 | ) | |||||||||||||||||||||||||
Non-earning assets: | |||||||||||||||||||||||||||||||||||
Cash and due from banks | 28,007 | 32,263 | 35,902 | 38,987 | 22,388 | ||||||||||||||||||||||||||||||
Bank premises and equipment, net | 33,712 | 36,869 | 37,778 | 38,135 | 17,959 | ||||||||||||||||||||||||||||||
Other assets | 87,095 | 92,150 | 96,967 | 124,855 | 40,034 | ||||||||||||||||||||||||||||||
Total assets | $ | 1,568,747 | $ | 1,572,185 | $ | 1,603,691 | $ | 1,660,163 | $ | 878,474 | |||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Savings and other | $ | 656,227 | 0.16 | % | $ | 652,860 | 0.15 | % | $ | 688,831 | 0.15 | % | $ | 697,094 | 0.15 | % | $ | 338,104 | 0.18 | % | |||||||||||||||
Time deposits | 324,026 | 0.38 | 339,480 | 0.37 | 352,394 | 0.36 | 377,230 | 0.33 | 133,684 | 0.28 | |||||||||||||||||||||||||
Short-term borrowings | 59,004 | 0.34 | 50,067 | 0.32 | 39,033 | 0.24 | 38,253 | 0.23 | 42,819 | 0.24 | |||||||||||||||||||||||||
Other borrowings | 92,274 | 3.20 | 86,752 | 3.16 | 83,170 | 2.84 | 87,999 | 3.12 | 71,837 | 1.46 | |||||||||||||||||||||||||
Total interest-bearing liabilities | 1,131,531 | 0.48 | 1,129,159 | 0.46 | 1,163,428 | 0.41 | 1,200,576 | 0.43 | 586,444 | 0.36 | |||||||||||||||||||||||||
Non-interest bearing liabilities: | |||||||||||||||||||||||||||||||||||
Non-interest demand deposits | 277,333 | 285,743 | 283,101 | 279,879 | 185,844 | ||||||||||||||||||||||||||||||
Accrued interest payable and other liabilities | 11,366 | 8,478 | 10,453 | 32,251 | 7,800 | ||||||||||||||||||||||||||||||
Shareholders’ equity | 148,517 | 148,805 | 146,709 | 147,457 | 98,386 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,568,747 | $ | 1,572,185 | $ | 1,603,691 | $ | 1,660,163 | $ | 878,474 | |||||||||||||||||||||||||
Net interest spread | 3.98 | % | 3.84 | % | 3.96 | % | 3.79 | % | 4.42 | % | |||||||||||||||||||||||||
Net interest margin | 4.08 | 3.94 | 4.04 | 3.87 | 4.52 | ||||||||||||||||||||||||||||||
Accretion and Amortization of Fair Value Adjustments |
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Three Months Ending, |
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12/31/2015 |
9/30/2015 |
6/30/2015 |
03/31/2015 |
12/31/2014 |
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Impact on | Impact on | Impact on | Impact on | Impact on | ||||||||||||||||||||||||||
Net | Net | Net | Net | Net | ||||||||||||||||||||||||||
Fair Value | Interest | Fair Value | Interest | Fair Value | Interest | Fair Value | Interest | Fair Value | Interest | |||||||||||||||||||||
Accretion |
Margin |
Accretion |
Margin |
Accretion |
Margin |
Accretion |
Margin |
Accretion |
Margin |
|||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||
Loans | $ | 984 | 0.27 | % | $ | 648 | 0.18 | % | $ | 1,016 | 0.28 | % | $ | 601 | 0.17 | % | $ | 775 | 0.38 | % | ||||||||||
Interest-bearing deposits | 397 | 0.11 | 432 | 0.12 | 475 | 0.13 | 542 | 0.15 | - | 0.00 | ||||||||||||||||||||
FHLB advances | 63 | 0.02 | 63 | 0.02 | 62 | 0.02 | 62 | 0.02 | - | 0.00 | ||||||||||||||||||||
Subordinated debentures | 38 | 0.01 | 40 | 0.01 | 36 | 0.01 | 33 | 0.01 | - | 0.00 | ||||||||||||||||||||
Total fair value accretion | $ | 1,482 | 0.41 | % | $ | 1,183 | 0.33 | % | $ | 1,589 | 0.44 | % | $ | 1,238 | 0.34 | % | $ | 775 | 0.38 | % | ||||||||||
Your Community Bankshares, Inc. | ||||||||||||||||||||
Selected Loan Information | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2015 | 2015 | 2015 (1) | 2015 (1) | 2014 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
(As recast) | (As recast) | (As recast) | ||||||||||||||||||
ACQUIRED LOANS | (In thousands) | |||||||||||||||||||
Loans on non-accrual status | $ | 1,323 | $ | 2,257 | $ | 5,922 | $ | 10,122 | $ | 96 | ||||||||||
Loans past due 90 days or more and still accruing | 68 | - | - | - | - | |||||||||||||||
Foreclosed and repossessed assets | 7,825 | 6,023 | 4,849 | 12,409 | 254 | |||||||||||||||
Total non-performing assets | 9,216 | 8,047 | 10,771 | 22,531 | 350 | |||||||||||||||
Allowance for loan losses | 59 | 205 | - | - | - | |||||||||||||||
Non-accretable yield on acquired loans | 5,293 | 10,949 | 16,246 | 16,752 | 571 | |||||||||||||||
LEGACY LOANS | ||||||||||||||||||||
Loans on non-accrual status | 2,694 | 2,229 | 6,016 | 7,354 | 7,439 | |||||||||||||||
Loans past due 90 days or more and still accruing | - | - | 220 | 803 | - | |||||||||||||||
Foreclosed and repossessed assets | 2,127 | 3,238 | 3,505 | 3,535 | 4,177 | |||||||||||||||
Total non-performing assets | 4,821 | 5,467 | 9,741 | 11,692 | 11,616 | |||||||||||||||
Total Legacy Loans | 704,549 | 667,281 | 625,624 | 588,076 | 570,864 | |||||||||||||||
Allowance for loan losses | 6,792 | 6,211 | 8,045 | 7,120 | 6,465 | |||||||||||||||
Allowance for loan losses to legacy loans | 0.96 | % | 0.93 | % | 1.29 | % | 1.21 | % | 1.13 | % | ||||||||||
TOTAL LOANS | ||||||||||||||||||||
Loans on non-accrual status | $ | 4,017 | $ | 4,486 | $ | 11,938 | $ | 17,476 | $ | 7,535 | ||||||||||
Loans past due 90 days or more and still accruing | 68 | - | 220 | 803 | - | |||||||||||||||
Foreclosed and repossessed assets | 9,952 | 9,261 | 8,354 | 15,944 | 4,431 | |||||||||||||||
Total non-performing assets | 14,037 | 13,747 | 20,512 | 34,223 | 11,966 | |||||||||||||||
Non-performing assets to total assets | 0.90 | % | 0.87 | % | 1.29 | % | 2.11 | % | 1.35 | % | ||||||||||
Allowance for loan losses to total loans | 0.67 | % | 0.65 | % | 0.80 | % | 0.71 | % | 1.06 | % | ||||||||||
(1) Management obtained information subsequent to the issuance of the September 30, 2015, June 30, 2015 and March 31, 2015 financial statements about the fair value of assets acquired from First Financial Service Corporation which resulted in an adjustment to the initial fair values established. The adjustments are reflected in the selected loan information reported as September 30, 2015, June 30, 2015 and March 31, 2015 above. |
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Reconciliation of Fully Tax Equivalent Adjustments to GAAP Net Interest Income |
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12/31/2015 |
9/30/2015 |
6/30/2015 |
3/31/2015 |
12/31/2014 |
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Net | Net | Net | Net | Net | ||||||||||||||||||||||||||
Interest | Interest | Interest | Interest | Interest | ||||||||||||||||||||||||||
Income |
Yield |
Income |
Yield |
Income |
Yield |
Income |
Yield |
Income |
Yield |
|||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||
GAAP net interest income | $ | 13,893 | 3.86 | % | $ | 13,394 | 3.75 | % | $ | 13,914 | 3.87 | % | $ | 13,484 | 3.73 | % | $ | 8,697 | 4.28 | % | ||||||||||
Tax equivalent adjustment | ||||||||||||||||||||||||||||||
Investment securities | 546 | 0.15 | 530 | 0.15 | 474 | 0.14 | 400 | 0.11 | 379 | 0.19 | ||||||||||||||||||||
Loans | 225 | 0.07 | 154 | 0.04 | 115 | 0.03 | 102 | 0.03 | 100 | 0.05 | ||||||||||||||||||||
Total tax equivalent adjustment | 771 | 0.21 | 684 | 0.19 | 589 | 0.17 | 502 | 0.14 | 479 | 0.24 | ||||||||||||||||||||
Tax equivalent net interest income | 14,664 | 4.08 | % | 14,078 | 3.94 | % | 14,503 | 4.04 | % | 13,986 | 3.87 | % | 9,176 | 4.52 | % | |||||||||||||||
Regulation G Disclosure
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission (the “SEC”). The Company believes that these non-GAAP financial measures provide information that is useful to the users of its financial information regarding the Company’s financial condition and results of operations. Additionally, the Company uses these non-GAAP measures to evaluate its past performance and prospects for future performance. The Company believes that this non-GAAP financial information is helpful in understanding the results of operations separate and apart from items that may, or could, have a disproportional positive or negative impact in any particular period.
While the Company believes that these non-GAAP financial measures are useful in evaluating Company performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with U.S. GAAP. Further, these non-GAAP financial measures may differ from similar measures presented by other companies.
The Company recognized expenses associated with its acquisition of First Financial Service Corporation, the consolidation of the Company’s two subsidiary banks, and a net loss on the sale of loans during the three months ended December 31, 2015 which substantially impacts the reported financial results for that period. The Company believes excluding these items provides investors and other interested parties with an additional meaningful measure to evaluate the Company’s results of operations.
Earnings | ||||||||
perdiluted | ||||||||
Three Months Ended |
common share |
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Net income available to common shareholders reconciliation: |
December 31, 2015 |
impact | ||||||
(In thousands) | ||||||||
Net income available to common shareholders as reported | $ | 3,767 | $ | 0.68 | ||||
Less: Merger and integration expenses reported in non-interest expense | 124 | 0.03 | ||||||
Less: Tax effect of merger and integration charges | (43 | ) | (0.01 | ) | ||||
Less: Net loss on sale of loans reported in non-interest income | 316 | 0.06 | ||||||
Less: Tax effect of net loss on sale of loans | (111 | ) | (0.02 | ) | ||||
Net income available to common shareholders excluding merger and integration expense and net loss on sale of loans and related tax effects | $ | 4,053 | $ | 0.74 | ||||
Net income reconciliation: |
||||
Net income as reported | $ | 3,858 | ||
Less: Merger and integration expenses reported in non-interest expense | 124 | |||
Less: Tax effect of merger and integration charges | (43 | ) | ||
Less: Net loss on sale of loans reported in non-interest income | 316 | |||
Less: Tax effect of net loss on sale of loans | (111 | ) | ||
Net income excluding merger and integration expense and net loss on sale of loans and related tax effects | $ | 4,144 | ||
Non-interest income reconciliation: |
||||
Non-interest income as reported | $ | 2,806 | ||
Less: Net loss on sale of loans | (316 | ) | ||
Non-interest income excluding net loss on sale of loans | $ | 3,122 | ||
Non-interest expense reconciliation: |
||
Non-interest expense as reported | $ 11,884 | |
Less: Merger and integration charges | 124 | |
Non-interest expense excluding merger and integration expense | $ 11,760 | |
About Your Community Bankshares, Inc.
Your Community Bankshares, Inc. is a bank holding company headquartered in New Albany, Indiana and includes its wholly owned, state-chartered subsidiary bank, Your Community Bank. The Company operates 36 financial centers in Indiana and Kentucky. The Banks are engaged primarily in the business of attracting deposits from the general public and using such funds for the origination of commercial business and real estate loans and secured consumer loans such as home equity lines of credit, automobile loans, and recreational vehicle loans. Additionally, the Banks originate and sell into the secondary market mortgage loans for the purchase of single-family homes. For more information visit www.yourcommunitybank.com.
Statements in this press release relating to the Company’s plans, objectives, or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations. The Company’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties, including those discussed in the Company’s 2014 Form 10-K and subsequent 10-Q filed with the Securities and Exchange Commission.