Avenue Financial Holdings, Inc. Announces Record Fourth Quarter and 2015 Results

Earnings Jump 40% to $0.21 Per Share in Fourth Quarter

Total Loans Rise 20% to a Record $865.2 Million

NASHVILLE, Tenn.--()--Avenue Financial Holdings, Inc. (NASDAQ: AVNU) (“Avenue Financial” or “the Company”) announced record results for the fourth quarter and year ended December 31, 2015. Net income available to common stockholders rose 71.4% to $2.1 million in the fourth quarter of 2015 compared with $1.2 million in the fourth quarter of 2014. Net income per diluted share available to common stockholders rose 40.0% to $0.21 in the fourth quarter of 2015 compared with $0.15 in the fourth quarter of 2014. For the full year, fiscal 2015 net income increased 27.9% to $6.9 million, or $0.69 per diluted share, compared with $5.4 million, or $0.64 per diluted share, in fiscal 2014.

Total loans, including loans held for sale, rose 20.0% to a record $865.2 million in 2015 compared with $721.1 million in 2014. Total deposits increased 20.7% to a record $969.6 million in 2015 compared with total deposits of $803.2 million in 2014. Demand deposits rose 42.6% to $322.6 million in 2015 and accounted for 33.3% of total deposits, up from 28.2% in 2014. Total assets grew 16.4% to a record $1.2 billion in 2015 compared with $998.4 million in 2014.

Balance Sheet Growth

 

 

($ millions)

    Q4 2015     Q3 2015    

Quarterly %
Change

    Q4 2014    

Annual %
Change

Total Assets $1,162.3 $1,108.2 4.9 % $998.4 16.4 %
Loans held for investment $845.8 $812.0 4.2 % $693.9 21.9 %
Loans held for sale $19.4 $18.4 5.7 % $27.2 -28.6 %
Total loans $865.2 $830.4 4.2 % $721.1 20.0 %
Cash surrender value of company owned life insurance $25.7 $25.6 0.7 % $20.0 28.5 %
Total Deposits $969.6 $900.8 7.6 % $803.2 20.7 %
Demand Deposits $322.6 $286.4 12.6 % $226.3 42.6 %
 
  • Total assets increased $54.1 million, or 4.9%, to $1.16 billion at December 31, 2015, rising from $1.11 billion at September 30, 2015; and up $163.9 million, or 16.4%, compared with $998.4 million at December 31, 2014. The growth in assets was due primarily to higher loans compared with prior quarters.
  • Loans held for investment increased $33.8 million, or 4.2%, to a record $845.8 million at December 31, 2015 compared with $812.0 million at September 30, 2015; and were up $151.9 million from $693.9 million at December 31, 2014, for a year-over-year growth rate of 21.9%. Mortgage loans held-for-sale were $19.4 million compared with $18.4 million at September 30, 2015, and $27.2 million at December 30, 2014.
  • Cash surrender value of company owned life insurance rose to $25.7 million at December 31, 2015, up from $25.6 million at September 30, 2015 and $20.0 million at December 31, 2014.
  • Deposits rose to $969.6 million at December 31, 2015, an increase of $68.8 million, or 7.6%, compared with $900.8 million at September 30, 2015. Deposits grew $166.4 million, or 20.7%, compared with $803.2 million at December 31, 2014. Demand deposits rose $96.3 million, or 42.6%, to $322.6 million at December 31, 2015 compared with $226.3 million at December 31, 2014. For the fourth quarter of 2015, demand deposits represented 33.3% of average deposits compared with 28.2% for the fourth quarter of 2014.

Revenue Growth and Profitability

 

 

($ millions, except EPS)

    Q4 2015     Q3 2015    

Quarterly %
Change

    Q4 2014    

Annual %
Change

Net income available to common stockholders $2.13 $1.79 18.9 % $1.24 71.4 %
Fully diluted EPS $0.21 $0.18 16.7 % $0.15 40.0 %
Net interest income $8.81 $8.50 3.6 % 7.56 16.6 %
Net interest margin 3.32 % 3.30 % +2 BP 3.35 % -3 BP
Non-interest income $1.70 $1.75 -2.9 % $1.06 60.5 %
Provision for loan losses $0.41 $0.61 -33.8 % $0.46 -10.9 %
Non-interest expense $7.10 $7.00 1.4 % $6.30 12.8 %
 
  • For the fourth quarter of 2015, net income available to common stockholders rose 18.9% to $2.13 million compared with $1.79 million for the third quarter of 2015, and was up 71.4% from $1.24 million at December 31, 2014. The increase was attributable primarily to growth in loan volume that benefited net interest income, higher loan sales, including SBA loans that boosted non-interest income, and a decrease in our provision for loan losses that reflected our improved asset quality. Diluted net income per share rose 16.7% to $0.21 in the fourth quarter of 2015 from $0.18 in the third quarter of 2015, and jumped 40.0% from $0.15 per share the fourth quarter of 2014. Average shares outstanding rose 20.1% to 10.2 million at December 31, 2015 compared with 8.5 million at December 31, 2014 attributable to Avenue Financial’s initial public stock offering in February 2015.
  • Net interest income increased 16.6% to $8.8 million for the fourth quarter of 2015, compared with $7.6 million for the fourth quarter of 2014 and was attributable primarily to growth in loans, offset partially by higher interest costs associated with $20.0 million in subordinated debt issued in December 2014.
  • Growth in average non-interest bearing demand deposits over the past quarter contributed to the 2 basis point increase in the tax equivalent net interest margin which rose from 3.30% in the third quarter of 2015 to 3.32% in the fourth quarter of 2015. Net interest margin was down 3 basis points from 3.35% in the fourth quarter of 2014, primarily due the cost of the subordinated debt issued in December 2014, partially offset by an increase in the yield on investment securities.
  • Non-interest income rose 60.5% to $1.7 million in the fourth quarter of 2015 compared with $1.1 million in the fourth quarter of 2014. The growth in non-interest income benefited from a 32.7% increase in customer service fees to $662.5 thousand, a 41.1% increase in cash surrender value of life insurance to $186.5 thousand and was offset partially by a 17.9% decrease in mortgage banking fees to $338.6 thousand. Growth in non-interest income also benefited from gains on loan sales and securities. Net gains on mortgage loan sales rose to $256.8 thousand compared with no sales in the fourth quarter of 2014. Net gains on SBA loan sales rose to $230.7 thousand in the fourth quarter of 2015 compared with $14.3 thousand in the fourth quarter of 2014. Net gain on sale of securities totaled $24.0 thousand in the fourth quarter of 2015 with no comparable securities gains in the fourth quarter of 2014.
  • The provision for loan losses was $406.5 thousand for the fourth quarter of 2015, compared with $456.1 thousand for the fourth quarter of 2014.
  • Non-interest expense for the fourth quarter of 2015 increased $101.0 thousand, or 1.4%, to $7.1 million from $7.0 million for the third quarter of 2015, and increased $808.0 thousand from the fourth quarter of 2014. The increase since last year was due primarily to higher compensation costs related to growth in employee headcount, merit increases, and higher legal, accounting and insurance related to public company expenses.

Asset Quality

 

 

($ millions)

    Q4 2015     Q3 2015    

Quarterly %
Change

    Q4 2014    

Annual %
Change

Non-performing assets $1.058 $1.310 -19.2 % $4,071 -74.0 %
Non-accruing loans $0.550 $0.318 73.0 % $0.695 -20.9 %
Ratio of non-performing assets to total assets 0.09 % 0.12 % -3 BP 0.41 % -32 BP
Other real estate owned $0.508 $0.992 -48.8 % $3.376 -85.0 %
Net loan charge-offs (recoveries) ($0.023) $0.293 N/M % $0.345 N/M %
Allowance for loan losses $10.06 $9.63 4.5 % $8.52 18.1 %
 
  • Asset quality improved in the fourth quarter compared with the third quarter of 2015 and fourth quarter of 2014 as measured by reductions in non-performing loans to total loans and other real estate owned. Total non-performing assets declined 19.2% to $1.1 million and total other real estate owned declined 48.8% to $508.0 thousand at December 31, 2015 compared with September 30, 2015, and was offset partially by an increase in nonaccruing loans. Our ratio of non-performing assets (nonaccruing loans plus other real estate owned and loans 90 days past due and still accruing) to total assets decreased to 0.09% at December 31, 2015, compared with 0.12% at September 30, 2015, and 0.41% at December 31, 2014 due primarily to a decrease in other real estate owned and growth in total assets. Troubled-debt restructurings totaled $423.7 thousand at December 31, 2015.
  • Net loan recoveries for the fourth quarter of 2015 were $23 thousand compared with net loan charge-offs of $293 thousand, or 0.15% of average loans, for the quarter ended September 30, 2015, and $345 thousand, or 0.20% of average loans, for the quarter ended December 31, 2014. There were no past due loans still accruing greater than 90 days at December 31, 2015.
  • The allowance for loan losses was $10.1 million, or 1.19% of loans, at December 31, 2015, compared with $9.6 million, or 1.19% of loans, at September 30, 2015 and $8.5 million, or 1.23% of loans, at December 31, 2014. The decrease in the allowance percentage to loans since last year was due primarily to the resolution of certain problem credits and a lower historical loss ratio offset somewhat by growth in the loan portfolio since last year.

About Avenue Financial Holdings, Inc.

Avenue Financial Holdings, Inc., headquartered in Nashville, Tennessee, was formed as a single-bank holding company in 2006 and operates primarily through its subsidiary, Avenue Bank. The Company’s operations are concentrated in the Nashville MSA, with the vision of building Nashville’s signature bank and serving clients who value creativity, expertise, and an exceptional level of personal service. Avenue Bank embodies Nashville’s creative spirit - redefining how clients experience banking through a unique “Concierge Banking” model. The bank provides a wide range of business and personal banking services, including mortgage loans, with a special emphasis on Commercial, Private Client, Healthcare, and Music & Entertainment banking. The Company serves clients through five locations (a corporate headquarters and four retail branches), a limited deposit courier service (mobile branch) for select commercial clients, and mobile and online banking services. The Company’s stock is traded on the NASDAQ Global Select Market under the ticker symbol “AVNU.”

Forward-Looking Statements

Certain statements in this press release contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

You should not place undue reliance on any forward-looking statement. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following: market and economic conditions (including interest rate environment, levels of public offerings, mergers and acquisitions, or M&A, and venture capital financing activities) and the associated impact on us; changes in management personnel; deterioration of our asset quality; our overall management of interest rate risk, including managing the sensitivity of our interest-earning assets and interest-bearing liabilities to interest rates, and the impact to earnings from a change in interest rates; our ability to execute our strategy and to achieve organic loan and deposit growth; the adequacy of reserves (including allowance for loan and lease losses) and the appropriateness of our methodology for calculating such reserves; volatility and direction of market interest rates; the sufficiency of our capital, including sources of capital (such as funds generated through retained earnings) and the extent to which capital may be used or required; our overall investment plans, strategies and activities, including our investment of excess cash/liquidity; operational, liquidity and credit risks associated with our business; increased competition in the financial services industry, nationally, regionally or locally, which may adversely affect pricing and terms; the level of client investment fees and associated margins; changes in the regulatory environment; changes in trade, monetary and fiscal policies and laws; governmental legislation and regulation, including changes in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank Act, Basel guidelines, capital requirements and other applicable laws and regulations; changes in interpretation of existing law and regulation; further government intervention in the U.S. financial system; and other factors that are discussed under the heading “Risk Factors” in our filings with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in the Company’s Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

 
AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(unaudited)
           
December 31, September 30, December 31,
2015 2015 2014
(unaudited)
Assets
Cash and due from banks $ 34,479,163 21,308,316 17,765,493
Federal funds sold   675,000   2,333,803   -  
Cash and cash equivalents 35,154,163 23,642,119 17,765,493
Interest-bearing time deposits in banks 216,013 215,610 210,754
Securities available-for-sale, at fair value 209,574,110 210,010,981 220,461,939

Securities held-to-maturity (fair value of $11,964,147, $4,938,566, and $2,837,721 as of December 31, 2015, September 30, 2015 and December 31, 2014, respectively)

11,936,527 4,862,285 2,716,908
Mortgage loans held-for-sale 19,441,239 18,389,280 27,237,457
Loans, net of deferred fees 845,820,504 812,059,281 693,907,951
Less allowance for loan losses   (10,060,695 ) (9,631,617 ) (8,517,744 )
Net loans 835,759,809 802,427,664 685,390,207
Accrued interest receivable 2,778,198 2,647,542 2,389,997
Federal Home Loan Bank stock, at cost 3,320,400 3,320,400 2,924,400
Premises and equipment, net 4,771,889 3,310,784 3,280,186
Other real estate owned 507,901 992,001 3,375,811
Deferred tax assets 8,770,647 7,994,832 7,377,355
Cash surrender value of company owned life insurance 25,740,020 25,553,529 20,035,752
Goodwill 2,966,063 2,966,063 2,966,063
Other assets   1,380,338   1,878,003   2,234,676  
Total assets $ 1,162,317,317   1,108,211,093   998,366,998  
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits $ 245,338,335 226,049,032 170,647,052
Interest-bearing demand deposits 77,270,570 60,386,697 55,652,417
Savings and money market accounts 520,341,671 451,836,452 415,779,182
Time   126,652,444   162,487,542   161,092,912  
Total deposits 969,603,020 900,759,723 803,171,563
Accrued interest payable 521,271 544,094 169,913
Federal funds purchased - - 4,485,093
Federal Home Loan Bank advances 68,000,000 85,300,000 70,300,000
Subordinated debt 19,616,869 19,606,227 19,577,295
Other liabilities   9,756,766   8,675,930   9,047,027  
Total liabilities   1,067,497,926   1,014,885,974   906,750,891  
Commitments and Contingent Liabilities
Stockholders’ equity:

Preferred Stock, no par value; 10,000,000 shares authorized, Series C, senior noncumulative perpetual preferred stock; 0, 0 and 18,950 issued and outstanding at December 31, 2015, September 30, 2015 and December 31, 2014, respectively

- - 18,950,000

Common Stock, no par value. Authorized 100,000,000 shares: issued and outstanding 10,306,055, 10,300,172 and 8,636,682 shares at December 31, 2015, September 30, 2015 and December 31, 2014, respectively

90,884,381 90,105,473 75,407,157
Additional paid-in-capital 1,209,023 1,742,083 1,325,445
Accumulated profit (deficit) 5,356,589 3,223,301 (1,581,649 )
Accumulated other comprehensive loss   (2,630,602 ) (1,745,738 ) (2,484,846 )
Total stockholders’ equity   94,819,391   93,325,119   91,616,107  
Total liabilities and stockholders’ equity $ 1,162,317,317   1,108,211,093   998,366,998  
 

This information is preliminary and based on company data available at the time of the presentation.

 
AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Income
(unaudited)
               
Three Months Ended Year Ended
December 31, December 31,
2015 2014 2015 2014
Interest and dividend income:
Loans, including fees $ 8,960,822 7,354,666 33,509,329 28,180,810
Taxable securities 937,339 918,665 3,676,641 3,861,085
Tax-exempt securities 301,880 191,731 1,005,948 861,048
Federal Funds sold and other   34,210 32,704   128,745   120,317  
Total interest and dividend income 10,234,251 8,497,766 38,320,663 33,023,260
Interest expense:
Deposits 932,155 782,191 3,322,156 3,107,846
Subordinated debt 348,143 11,250 1,392,570 11,250
Other borrowings   142,393 144,565   637,894   649,568  
Total interest expense   1,422,691 938,006   5,352,620   3,768,664  
Net interest income 8,811,560 7,559,760 32,968,043 29,254,596
Provision for loan losses   406,452 456,059   2,028,789   1,642,975  

Net interest income after provision for loan losses

  8,405,108 7,103,701   30,939,254   27,611,621  
Noninterest income:
Customer service fees 662,451 499,279 2,797,839 2,313,085

Mortgage banking income from sales, net of commissions

338,578 412,541 1,464,509 979,169
Increase in cash surrender value of life insurance 186,491 132,159 704,267 494,365
Net gain on sales of bulk mortgage loans 256,781 - 1,123,165 409,896
Net gain of sale of Small Business Administration loans 230,675 14,294 230,675 456,083
Net gain on sale of available-for-sale securities   24,034 -   258,482   11,917  
Total noninterest income   1,699,010 1,058,273   6,578,937   4,664,515  
Noninterest expenses:
Salaries and employee benefits 4,210,704 3,558,696 16,243,812 13,958,072
Equipment and occupancy 795,949 807,598 3,268,171 3,391,050
Data processing 400,189 378,727 1,619,099 1,418,035
Advertising, promotion, and public relations 210,303 195,325 757,717 640,058
Legal and accounting 313,823 232,954 1,457,756 888,172
FDIC insurance and other regulatory assessments 195,568 186,953 809,071 740,860
Other real estate expense (income) 15,360 (2,407 ) (14,544 ) (21,362 )
Other expenses   962,893 939,346   3,265,388   3,111,098  
Total noninterest expenses   7,104,789 6,297,192   27,406,470   24,125,983  
Income before taxes 2,999,329 1,864,782 10,111,721 8,150,153
Income tax expense   866,040 572,639   3,141,373   2,537,606  
Net income 2,133,289 1,292,143 6,970,348 5,612,547
Preferred stock dividends   - (47,375 ) (32,110 ) (189,500 )
Net income available to common stockholders $ 2,133,289 1,244,768   6,938,238   5,423,047  
 
Per share information:

Basic net income per common share available to common stockholders

$ 0.21 0.15   0.70   0.64  

Diluted net income per common share available to common stockholders

$ 0.21 0.15   0.69   0.64  
Weighted average common shares outstanding:
Basic   10,095,077 8,487,515   9,891,993   8,485,780  
Diluted   10,257,393 8,540,856   10,026,947   8,539,121  
 

This information is preliminary and based on company data available at the time of the presentation.

 

 
AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
SELECTED QUARTERLY FINANCIAL DATA
(unaudited)
 
    At or for the Three Months
December 31,     September 30,     June 30,     March 31,     December 31,     September 30,
2015 2015 2015 2015 2014 2014
(Dollars in thousands, except employee data)
SELECTED INCOME STATEMENT DATA
Interest income $ 10,234 $ 9,869 $ 9,383 $ 8,835 $ 8,498 $ 8,468
Interest expense 1,423 1,365 1,296 1,269 938 935
Net interest income 8,811 8,504 8,087 7,566 7,560 7,533
Provision (credit) for loan losses 406 614 855 154 456 (222 )
Net interest income after provision (credit) for loan losses 8,405 7,890 7,232 7,412 7,104 7,755
Non-interest income 1,699 1,749 1,875 1,256 1,059 1,904
Non-interest expense 7,105 7,004 6,824 6,474 6,297 6,122
Income tax expense   866     841     698     736     573     1,122  
Net income 2,133 1,794 1,585 1,458 1,293 2,415
Dividends on preferred shares   -     -     -     (32 )   (48 )   (47 )
Net income available to common stockholders $ 2,133 $ 1,794 $ 1,585 $ 1,426 $ 1,245 $ 2,368
 
PER COMMON SHARE DATA:
Basic earnings per share $ 0.21 $ 0.18 $ 0.16 $ 0.15 $ 0.15 $ 0.28
Diluted earnings per share $ 0.21 $ 0.18 $ 0.16 $ 0.15 0.15 0.28
Book value per common share 9.20 9.06 8.74 8.79 8.41 8.18
Tangible book value per common share (1) 8.91 8.77 8.45 8.50 8.07 7.84
Basic weighted average common shares 10,095,077 10,078,172 10,064,840 9,319,312 8,487,515 8,487,516
Diluted weighted average common shares 10,257,393 10,197,416 10,161,167 9,656,971 8,540,856 8,528,926
Common shares outstanding at period end 10,306,055 10,300,172 10,256,340 10,227,340 8,636,682 8,633,588
 
SELECTED BALANCE SHEET DATA
Total assets $ 1,162,317 $ 1,108,211 $ 1,075,978 $ 1,036,544 $ 998,367 $ 973,371
Residential real estate - Mortgage 123,478 128,526 120,208 103,728 110,929 122,128
Residential real estate - Multi-family 10,048 9,259 10,399 13,480 11,310 20,960
Commercial and industrial 312,382 285,381 272,783 247,722 235,911 181,688
Commercial real estate 282,698 297,385 284,653 289,404 271,001 268,907
Construction and land development 105,886 81,580 78,473 54,515 58,843 55,174
Consumer 11,796 10,126 7,052 7,319 5,915 4,221
Other, including deferred fees   (467 )   (197 )   (127 )   85     (1 )   157  
Total loans, net of deferred fees 845,821 812,060 773,441 716,253 693,908 653,235
Allowance for loan losses (10,061 ) (9,632 ) (9,312 ) (8,669 ) (8,518 ) (8,407 )
Securities available for sale 209,574 210,011 213,096 218,118 220,462 211,500
Mortgage loans held for sale 19,441 18,389 26,363 33,484 27,237 5,036
Goodwill and other intangible assets 2,966 2,966 2,966 2,966 2,966 2,966
Demand deposits 245,338 226,049 208,416 200,316 170,647 186,209
Interest checking accounts 77,271 60,387 61,924 60,135 55,653 52,673
Savings accounts 17,426 15,668 15,146 15,197 11,919 10,613
Money market accounts 274,352 264,160 241,182 227,999 240,646 263,947
Reciprocal ICS Money Market 228,564 172,009 155,844 155,572 163,214 147,870
CDs 71,538 70,748 74,516 70,064 82,012 82,075
Reciprocal CDARs 45,202 46,880 49,967 51,602 44,081 41,662
Brokered CDs   9,912     44,859     44,496     35,000     35,000     35,832  
Total Deposits 969,603 900,760 851,491 815,885 803,172 820,881
Advances from FHLB/FRB 68,000 85,300 105,300 99,300 70,300 55,000
Subordinated debt 19,617 19,606 19,596 19,585 19,577 -
Preferred stock - - - - 18,950 18,950
Tangible common stockholders’ equity (1) 91,853 90,359 86,725 86,967 69,700 67,699
Total stockholders’ equity 94,819 93,325 89,691 89,933 91,616 89,615
Average total assets 1,132,869 1,097,049 1,055,912 1,014,663 976,497 952,248
Average common stockholders’ equity 94,338 91,355 90,298 94,659 72,447 69,902
Full time employees 145 141 145 132 134 130
 
SELECTED PERFORMANCE RATIOS
Return on average assets (2) (5) 0.75 % 0.65 % 0.60 % 0.57 % 0.51 % 0.99 %
Return on average common stockholders’ equity (2) (5) 8.97 7.79 7.04 6.11 6.82 13.44
Net interest margin (fully tax equivalent) (2) 3.32 3.30 3.29 3.23 3.35 3.36
Efficiency ratio (1) (3) 67.76 68.44 70.01 73.38 73.06 64.87
 

This information is preliminary and based on company data available at the time of the presentation.

 

 
AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
SELECTED QUARTERLY FINANCIAL DATA
(unaudited)
    At or for the Three Months
December 31,     September 30,     June 30,     March 31,     December 31,     September 30,
2015 2015 2015 2015 2014 2014
(Dollars in thousands, except per share data)
SELECTED ASSET QUALITY DATA
Nonaccruing loans $ 550 $ 318 $ 776 $ 854 $ 695 $ 889
Past due loans over 90 days and still accruing interest - - - - - -
Net loans charge-offs (recoveries) (23 ) 294 213 2 345 (5 )
Nonaccruing loans to total loans 0.07 % 0.04 % 0.10 % 0.12 % 0.10 % 0.14 %
Nonaccruing loans and loans past due 90 days and still accruing to total loans 0.07 0.04 0.10 0.12 0.10 0.14
Non-performing assets to total assets (4) 0.09 0.12 0.32 0.35 0.41 0.28
Non-performing assets to loans and OREO 0.12 0.16 0.45 0.51 0.58 0.42
Allowance for loan losses to total loans 1.19 1.19 1.20 1.21 1.23 1.29
Allowance for loan losses to nonaccruing loans 1,829.27 3,028.93 1,200.00 1,015.15 1,224.87 945.67
Net loan charge-offs to average loans (2) (0.01 ) 0.15 0.12 - 0.20 -
 
CAPITAL RATIOS (Consolidated)
Tier 1 Leverage ratio (6) 8.23 % 8.41 % 8.55 % 8.73 % 9.21 % 9.16 %
Tier 1 Risk-based capital ratio (6) 9.35 9.64 9.85 10.38 10.62 11.38
Total Risk-based capital ratio (6) 12.33 12.75 13.06 13.77 14.00 12.49
Tangible common stockholders' equity to tangible assets (1) 7.92 8.18 8.08 8.41 7.00 6.98
 
The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are "tangible book value per common share," "tangible common stockholders' equity," "efficiency ratio," and "tangible common stockholders' equity to tangible assets." Although we believe these non-GAAP financial measures provide a greater understanding of our business, these measures are not necessarily comparable to similar measures that may be presented by other companies.
"Efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income excluding gains and losses on sales of securities. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain non-recurring items and other discrete items that are unrelated to our core business.
"Tangible common stockholders' equity" is defined as common stockholders' equity reduced by goodwill. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in common stockholders' equity exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both common stockholders' equity and assets while not increasing our tangible common stockholders' equity or tangible assets.
"Tangible common stockholders' equity to tangible assets" is defined as the ratio of common stockholders' equity reduced by goodwill divided by total assets reduced by goodwill. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in common stockholders' equity and total assets, each exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both common stockholders' equity and assets while not increasing our tangible common equity or tangible assets.
"Tangible book value per common share" is defined as tangible common stockholders' equity divided by total common shares outstanding. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing book value while not increasing our tangible book value.
The information provided below reconciles each non-GAAP measure to its most comparable GAAP measure.
 
NON-GAAP FINANCIAL MEASURES
Efficiency Ratio
Non-interest expense (numerator) $ 7,105 $ 7,004 $ 6,824 $ 6,474 $ 6,297 $ 6,122
Net interest income 8,811 8,504 8,087 7,566 7,560 7,533
Non-interest income 1,699 1,749 1,875 1,256 1,059 1,904
Less: gains (losses) on sales of securities   (24 )   (19 )   (215 )   -     -     -  
Adjusted operating revenue (denominator) 10,486 10,234 9,747 8,822 8,619 9,437
Efficiency Ratio 67.76 % 68.44 % 70.01 % 73.38 % 73.06 % 64.87 %
 
Tangible Common Stockholders' Equity and Tangible Common Stockholders' Equity/Tangible Assets
Common equity $ 94,819 $ 93,325 $ 89,691 $ 89,933 $ 72,666 $ 70,665
Less: intangible assets   (2,966 )   (2,966 )   (2,966 )   (2,966 )   (2,966 )   (2,966 )
Tangible common stockholders' equity 91,853 90,359 86,725 86,967 69,700 67,699
Total assets 1,162,317 1,108,211 1,075,978 1,036,544 998,367 973,371
Less: Intangible assets   (2,966 )   (2,966 )   (2,966 )   (2,966 )   (2,966 )   (2,966 )
Tangible assets   1,159,351     1,105,245     1,073,012     1,033,578     995,401     970,405  
Tangible Common Stockholders' Equity/Tangible Assets 7.92 % 8.18 % 8.08 % 8.41 % 7.00 % 6.98 %
 
Tangible Book Value per Common Share
Book Value Per Common Share $ 9.20 $ 9.06 $ 8.74 $ 8.79 $ 8.41 $ 8.18
Less: Effects of intangible assets   (0.29 )   (0.29 )   (0.29 )   (0.29 )   (0.34 )   (0.34 )
Tangible Book Value per Common Share 8.91 8.77 8.45 8.50 8.07 7.84
 

(1)

These measures are not measures recognized under generally accepted accounting principles (United States) (“GAAP”), and are therefore considered to be non-GAAP financial measures.

(2)

Data has been annualized.

(3)

Efficiency ratio is total non-interest expense divided by the sum of net interest income and total non-interest income, (excluding securities gains/(losses)) and is not a GAAP measure.

(4)

Non-performing assets are deemed to be loans past due 90 days or more and still accruing, nonaccruing loans and OREO.

(5)

Return on average assets is defined as net income available to common stockholders divided by average total assets; Return on average common stockholders equity is defined by net income available to common stockholders divided by average common stockholders' equity.

(6)

Capital ratios as of December 31, 2015 are estimated.

 

This information is preliminary and based on company data available at the time of the presentation.

 

   
Average Balance Sheets and Net Interest Analysis
On a Fully Taxable-Equivalent Basis
Three Months Ended December 31,
2015     2014
Average Balance     Interest Earned / Paid     Average Yield / Rate Average Balance     Interest Earned / Paid     Average Yield / Rate
(In thousands, except Average Yields and Rates)
Assets:
Interest earning assets:
Interest-bearing time deposits in banks $ 216 0 0.75 % $ 211 0 0.74 %
Investments (1) (3) 222,028 1,429 2.55 219,524 1,239 2.24
Federal funds sold 484 0 0.27 4,406 3 0.25
Loans held-for-sale 15,914 125 3.12 7,198 20 1.11
Total loans (2)   832,229   8,836 4.21     676,096   7,335 4.30  
Total interest earning assets 1,070,871 10,390 3.85 907,435 8,597 3.76
 
Allowance for loan losses (9,884 ) (8,516 )
Non-interest earning assets   71,882     77,578  
Total assets $ 1,132,869   $ 976,497  
 
Interest bearing liabilities:
Interest bearing deposits:
Checking $ 67,620 59 0.35 % $ 52,842 46 0.35 %
Savings 16,500 5 0.11 11,691 3 0.11
Money market 461,225 521 0.45 408,446 417 0.40
Time deposits 163,210 347 0.84 158,962 316 0.79
Federal funds purchased 624 2 1.22 481 1 0.97
Subordinated debt 19,612 348 7.04 652 11 -
Other borrowings   73,833   141 0.76     58,068   144 0.99  
Total interest bearing liabilities 802,624 1,423 0.70 691,142 938 0.54
 
Non-interest bearing checking 226,716 185,575
Other liabilities 9,191 8,383
Stockholders' equity   94,338     91,397  
Total liabilities and stockholders' equity $ 1,132,869   $ 976,497  
 
Net interest spread 3.15 % 3.22 %
Net interest margin 3.32 3.35
 

(1)

Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%.

(2)

Non-accrual loans are included in average loan balances in all periods. Loan fees of $343,000 and $193,000 are included in interest income in 2015 and 2014, respectively.

(3)

Unrealized gains/(losses) of ($245,000) and ($1,412,000) are excluded from the yield calculation in 2015 and 2014, respectively.

 

This information is preliminary and based on company data available at the time of the presentation.

 

   
Average Balance Sheets and Net Interest Analysis
On a Fully Taxable-Equivalent Basis
Year Ended December 31,
2015     2014
Average Balance     Interest Earned / Paid     Average Yield / Rate Average Balance     Interest Earned / Paid     Average Yield / Rate
(In thousands, except Average Yields and Rates)
Assets:
Interest earning assets:
Interest-bearing time deposits in banks $ 214 2 0.75 % $ 429 5 1.10 %
Investments (1) (3) 222,202 5,325 2.40 233,308 5,278 2.26
Federal funds sold 386 1 0.27 1,530 4 0.25
Loans held-for-sale 28,574 960 3.36 4,801 20 0.42
Total loans (2)   766,796   32,549 4.24     650,123   28,161 4.33  
Total interest earning assets 1,018,172 38,837 3.81 890,191 33,468 3.76
 
Allowance for loan losses (9,273 ) (8,248 )
Non-interest earning assets   66,627     60,690  
Total assets $ 1,075,526   $ 942,633  
 
Interest bearing liabilities:
Interest bearing deposits:
Checking $ 62,044 217 0.35 % $ 50,208 201 0.40 %
Savings 15,121 17 0.11 9,353 12 0.13
Money market 412,877 1,748 0.42 396,949 1,765 0.44
Time deposits 163,554 1,340 0.82 147,535 1,130 0.77
Federal funds purchased 4,930 30 0.61 6,243 42 0.68
Subordinated debt 19,800 1,393 7.03 - 11 -
Other borrowings   90,126   608 0.67     68,938   608 0.88  
Total interest bearing liabilities 768,452 5,353 0.70 679,226 3,769 0.55
 
Non-interest bearing checking 205,673 167,959
Other liabilities 8,743 7,367
Stockholders' equity   92,658     88,081  
Total liabilities and stockholders' equity $ 1,075,526   $ 942,633  
 
Net interest spread 3.11 % 3.21 %
Net interest margin 3.29 3.34
 

(1)

Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%.

(2)

Non-accrual loans are included in average loan balances in all periods. Loan fees of $1,055,000 and $637,000 are included in interest income in 2015 and 2014, respectively.

(3)

Unrealized gains/(losses) of ($190,000) and ($2,976,000) are excluded from the yield calculation in 2015 and 2014, respectively.

 

This information is preliminary and based on company data available at the time of the presentation.

Contacts

Avenue Financial Holdings, Inc.
Barbara J. Zipperian, 615-736-7786
Chief Financial Officer

Contacts

Avenue Financial Holdings, Inc.
Barbara J. Zipperian, 615-736-7786
Chief Financial Officer