BRENTWOOD, Tenn.--(BUSINESS WIRE)--Commerce Union Bancshares, Inc. (Nasdaq: CUBN), parent of Reliant Bank, today reported record net income and loans for its second quarter ended June 30, 2016. Second quarter net income attributable to common shareholders rose 47.3% to $2.4 million, or $0.31 per fully diluted share, from $1.6 million, or $0.22 per fully diluted share for the second quarter 2015. Loans rose 13.1% to a record $649.3 million at June 30, 2016, compared with $574.0 million at June 30, 2015.
“Our second quarter results reflect the progress we’ve made in growing loans, expanding our net interest income and enhancing our asset quality since we completed the merger of Reliant Bank and Commerce Union Bank last year,” stated William R. DeBerry, Chairman and CEO of the Company. “This is the first quarter that our results are directly comparable to the prior year quarter following the merger and highlight our solid growth in assets and earnings since that time.”
Second Quarter Revenue Growth
Total interest income rose 6.5% to a record $9.5 million in the second quarter of 2016 compared with $8.9 million in the first quarter of 2016, and up 16.7% compared with $8.1 million in the second quarter of 2015. The growth in interest income over the prior year was fueled by a combination of higher yields on loans and securities available for sale, and strong growth in earning assets. Interest income was also positively impacted from $619,000 in income related to the payoff of a purchase credit impaired loan.
Noninterest income declined to $2.5 million in the second quarter of 2016 compared with $3.8 million in the first quarter of 2016 and $3.3 million in the second quarter of 2015. The decrease in noninterest income was due primarily to lower sales of mortgage loans resulting from the transition of the majority of out-of-state mortgage offices to another bank early in the second quarter of 2016.
“We completed the transition of a majority of our out-of-market mortgage offices to better focus our resources in our core Middle Tennessee markets while reducing non-core personnel and related office costs to improve our efficiency ratio,” stated DeVan Ard, President of the Company and CEO of Reliant Bank. “We did not record a gain or loss on the transition of the mortgage offices, but the net effect was a decrease in mortgage loans sold and mortgage loans held for sale. This was partially offset by lower associated salary and occupancy expenses compared with prior quarters and we believe we have further opportunities to improve the profitability of our mortgage operations and efficiency ratio in the future.”
Net Interest Income and Margins Increase
Net interest income was a record $8.7 million in the second quarter of 2016, up 7.5% from $8.1 million in the first quarter of 2016 and up 17.6% compared with $7.4 million in the second quarter of 2015. The increase in net interest income over the prior year was driven by growth in earning assets and a higher net interest margin. In addition, the second quarter of 2016 benefited from the pay-off of a purchased credit impaired loan. The second quarter of 2016, first quarter of 2016 and second quarter of 2015 also benefited from net discount accretion of $442,000 per quarter associated with the merger of Commerce Union Bank and Reliant Bank. Net interest margin rose 25 basis points to 4.33% in the second quarter of 2016 compared with 4.08% in the first quarter of 2016 and was up 27 basis points compared to 4.06% in the second quarter of 2015.
Provision for Loan Losses – Asset Quality Improves
Provision for loan losses was $450,000 for the second quarter of 2016 compared with a negative provision of $500,000 for the second quarter of 2015. The increase in the provision since last year reflects loan growth that accelerated in the second quarter of 2016. Provision for the first quarter of 2016 was $165,000 and benefited from a net recovery position.
Asset quality improved from prior quarters based on reductions in other real estate owned and a decrease in non-performing assets.
“Our asset quality is at its best level since the recession,” continued Ard. “Our allowance for loan losses remained strong at 1.34% of gross loans at the end of the second quarter. Non-performing assets were only 0.71% of total loans and other real estate, and were down 11.5% since the second quarter of last year. Other real estate owned was down 56.6% to $475,000 at June 30, 2016, and was at the lowest level in years. In addition, we had no accruing loans past due 90 days or more at the end of the second quarter of 2016. We believe this is a solid indication of our strong credit culture and focus on asset quality as part of our strategy to protect future earnings. We remain focused on maintaining the high quality of our assets as we grow our loan portfolio.”
Noninterest Expenses Decline
Noninterest expenses declined 7.1% to $8.0 million in the second quarter of 2016 compared with $8.6 million in the first quarter of 2016 and declined 7.8% compared with $8.7 million in the second quarter of 2015. The Company reported lower advertising and public relations expenses; audit, legal and consulting expenses; provision for losses on other real estate and lower other operating expenses compared with the second quarter of 2015. The Bank’s efficiency ratio, excluding its mortgage subsidiary, improved to 58.58% in the second quarter of 2016 from 58.99% in the first quarter of 2016 and from 67.03% in the second quarter of 2015. The decrease in noninterest expense also benefited from lower expenses associated with the transitioning of several out-of-market mortgage offices to another bank.
The Bank’s effective income tax rate for the second quarter of 2016 was 21.6% compared with 18.2% for the first quarter of 2016 and down from 36.5% in the second quarter of 2015. The tax rate for the first two quarters of 2016 was favorably impacted by a credit to income tax expense arising from the early adoption of ASC Topic 718 relating to recognition of excess tax benefits on the exercise of stock options that totaled $100,000 in the second quarter of 2016 and $324,000 in the first quarter of 2016. The tax rate for the second quarter of 2016 also benefited from a state tax credit of $217,000 related to the origination of an interest-free loan to a local housing authority.
Balance Sheet Growth
Loans rose to a record $649.3 million at June 30, 2016, compared with $622.7 million at March 31, 2016, and $574.0 million at June 30, 2015. Loan growth accelerated in the second quarter of 2016 and is highlighted by total loan growth of 4.3% over the first quarter of 2016. Average loans rose 13.1% to $637.8 million in the second quarter compared with $564.1 million at June 30, 2015.
The Bank’s average earnings assets grew 11.3% to $830.5 million in the second quarter of 2016 compared with $745.9 million at June 30, 2015. The growth in earning assets benefited from a 13.1% increase in loans and a 31.8% increase in securities available for sale compared with the second quarter of last year. Securities available for sale totaled $147.7 million at June 30, 2016, compared with $139.9 million at March 31, 2016, and $112.0 million at June 30, 2015.
Mortgage loans held for sale declined to $15.0 million at June 30, 2016, compared with $24.7 million at March 31, 2016, and $41.7 million at June 30, 2015. The decline in mortgage loans in the latest quarter was due to the transition of the majority of the Bank’s out-of-market mortgage loan production offices to another bank early in the second quarter of 2016.
Total deposits were $647.9 million at June 30, 2016, compared with $657.8 million at March 31, 2016. The decrease in deposits was primarily related to lower funding requirements for mortgage loans held for sale. Total deposits increased 7.5% to $647.9 million at June 30, 2016, compared with June 30, 2015. The loan to deposit ratio was 100.2% at June 30, 2016, compared with 94.7% at March 31, 2016, and 95.3% at June 30, 2015.
“Non-interest bearing deposits rose 62.4% (% annualized) in the second quarter of 2016 due to increased marketing emphasis on demand deposit accounts and strong new account openings. Non-interest bearing deposits grew to 20.8% of total deposits at the end of the second quarter and have grown by 38.0% since the second quarter of 2015. We expect our growth in non-interest bearing deposits to have a positive effect on our net interest margin as rates begin to rise,” concluded Ard.
Stockholders’ equity rose to $106.0 million at the end of the second quarter 2016. Tangible book value per share grew to $12.17 at June 30, 2016.
Strong Capital Position
The Company’s and Bank’s capital position remained strong at June 30, 2016. During the second quarter, the Company raised $656,000 of capital through the exercise of Company stock options. The additional capital was pushed down to the Bank and when combined with the accretion of earnings to capital led to an increase in the Bank’s June 30, 2016, Tier 1 leverage ratio to 10.59% compared with 10.34% at March 31, 2016. The Bank’s capital ratios are expected to be maintained significantly above the ratios of a “well-capitalized” institution.
“Our outlook for the second half of 2016 is positive based on our accelerating loan growth, the robust economy in middle Tennessee and our plans to open a new office in a fast growing market in Nashville later this year. We also remain focused on maintaining our asset quality as we grow our asset base. We believe our focus on growing quality assets will be an important part in building future long-term shareholder value,” concluded DeBerry.
Accounting Treatment for Merger and Mortgage Subsidiary
The second quarter’s results for 2016 and 2015 are for Commerce Union Bancshares, Inc. (Company) and include the combined results of Reliant Bank and Commerce Union Bank following their merger that was effective April 1, 2015. The results for the six month period ended June 30, 2015, include the operations of Reliant Bank only for the first quarter 2015 and the combined results of Reliant Bank and Commerce Union Bancshares, Inc. for the second quarter 2015.
The consolidated balance sheets and statements of operations include the operation of the Bank’s majority-controlled subsidiary, Reliant Mortgage Ventures, LLC. For financial accounting purposes the subsidiary is treated as a variable interest entity for which the Bank is deemed to be the primary beneficiary. The venture is operated under a joint venture arrangement. The Bank receives 30% of the net income from the subsidiary once the noncontrolling member has recovered any previous losses incurred by the venture. The Bank does not absorb any losses incurred by the venture. Revenue and expenses related to the subsidiary are included in noninterest income and expenses of the Bank and the noncontrolling portion of the net income or loss of the subsidiary is reflected in the “noncontrolling interest in net (income) loss of the subsidiary” on the Consolidated Statements of Operations. For the second quarter of 2016, the mortgage subsidiary generated a net loss of $223,000 compared with a net loss of $32,000 for the second quarter of 2015. For the six months ending June 30, 2016, the subsidiary generated a net income of $98,000 compared with a net loss of $103,000 for the six months ending June 30, 2015.
Non-GAAP Financial Measures
This document contains non-GAAP financial measures. The non-GAAP measures presented below include “adjusted net interest margin” and “efficiency ratio.” We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe certain purchase accounting adjustments and non-recurring income relating to the payoff of an impaired loan do not reflect the operational performance of the business in this period and, accordingly, it is useful to consider these line items with and without such adjustments. We believe this presentation also increases comparability of period-to-period results.
Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP.
About Commerce Union Bancshares, Inc. and Reliant Bank
Commerce Union Bancshares, Inc. (NASDAQ: CUBN) is a Brentwood, Tennessee-based bank holding company which operates banking centers in Davidson, Robertson, Rutherford, Sumner and Williamson Counties, Tennessee through its wholly-owned subsidiary Reliant Bank. Reliant Bank is a full-service commercial bank that offers a variety of deposit, lending and mortgage products and services to business and consumer customers. For additional information, locations and hours of operation, please visit our website found at www.reliantbank.com.
Forward-Looking Statements
Statements in this press release relating to Commerce Union Bancshares Inc.’s plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “possible,” “seek,” “plan,” “strive” or similar words, or negatives of these words, identify forward-looking statements. These forward-looking statements are based on management’s current expectations. The Company’s actual results in future periods may differ materially from those indicated by forward-looking statements due to various risks and uncertainties, including those related to the combination of Commerce Union Bank and Reliant Bank following the merger. These and other risks and uncertainties are described in greater detail under “Risk Factors” in the Company’s 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of the release and the Company does not assume any responsibility to update these statements.
COMMERCE UNION BANCSHARES, INC. | |||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||
JUNE 30, 2016, MARCH 31, 2016 AND JUNE 30, 2015 | |||||||||||||||
(Dollar Amounts In Thousands) |
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(Unaudited) |
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ASSETS |
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June 30,
2016 |
March 31, 2016 |
June 30,
2015 |
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Cash and due from banks | $ | 16,571 | $ | 26,107 | $ | 21,638 | |||||||||
Federal funds sold | 69 | 434 | 326 | ||||||||||||
Total cash and cash equivalents | 16,640 | 26,541 | 21,964 | ||||||||||||
Securities available for sale | 147,675 | 139,899 | 112,039 | ||||||||||||
Loans, net of unearned income | 649,277 | 622,733 | 574,046 | ||||||||||||
Allowance for loan losses | (8,688 | ) | (8,090 | ) | (7,424 | ) | |||||||||
Loans, net | 640,589 | 614,643 | 566,622 | ||||||||||||
Mortgage loans held for sale | 14,961 | 24,682 | 41,715 | ||||||||||||
Accrued interest receivable | 3,179 | 3,035 | 2,670 | ||||||||||||
Premises and equipment, net | 9,088 | 9,213 | 8,973 | ||||||||||||
Restricted equity securities, at cost | 7,060 | 6,244 | 5,326 | ||||||||||||
Other real estate, net | 475 | 1,139 | 1,094 | ||||||||||||
Cash surrender value of life insurance contracts | 24,439 | 24,247 | 19,752 | ||||||||||||
Deferred tax assets, net | 1,708 | 2,274 | 2,411 | ||||||||||||
Goodwill | 11,404 | 11,404 | 11,404 | ||||||||||||
Core deposit intangibles | 1,760 | 1,849 | 2,117 | ||||||||||||
Other assets | 4,226 | 3,375 | 2,843 | ||||||||||||
TOTAL ASSETS | $ | 883,204 | $ | 868,545 | $ | 798,930 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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LIABILITIES | |||||||||||||||
Deposits | |||||||||||||||
Demand | $ | 134,515 | $ | 116,362 | $ | 97,489 | |||||||||
Interest-bearing demand | 86,090 | 90,622 | 103,692 | ||||||||||||
Savings and money market deposit accounts | 186,009 | 199,988 | 171,138 | ||||||||||||
Time | 241,237 | 250,805 | 230,184 | ||||||||||||
Total deposits | 647,851 | 657,777 | 602,503 | ||||||||||||
Accrued interest payable | 127 | 139 | 112 | ||||||||||||
Federal Home Loan Bank advances | 124,871 | 104,798 | 102,854 | ||||||||||||
Other liabilities | 4,331 | 3,809 | 1,608 | ||||||||||||
TOTAL LIABILITIES | 777,180 | 766,523 | 707,077 | ||||||||||||
STOCKHOLDERS’ EQUITY | |||||||||||||||
Common stock, $1 par value; 10,000,000 shares authorized; 7,627,777, 7,560,594 and 7,070,821 shares issued and outstanding at June 30, 2016, March 31, 2016 and June 30, 2015, respectively |
7,628 | 7,561 | 7,071 | ||||||||||||
Additional paid-in capital | 87,736 | 87,098 | 82,952 | ||||||||||||
Retained earnings | 9,584 | 7,224 | 3,115 | ||||||||||||
Accumulated other comprehensive income (loss) | 1,076 | 139 | (1,285 | ) | |||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 106,024 | 102,022 | 91,853 | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 883,204 | $ | 868,545 | $ | 798,930 | |||||||||
COMMERCE UNION BANCSHARES, INC. | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
FOR THE PERIODS INDICATED | ||||||||||||||||||||||||
(Dollar Amounts In Thousands, Except Per Share Amounts) |
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(Unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||||
Interest and fees on loans | $ | 8,698 | $ | 8,138 | $ | 7,551 | $ | 16,836 | $ | 11,587 | ||||||||||||||
Interest on investment securities, taxable | 216 | 236 | 218 | 452 | 421 | |||||||||||||||||||
Interest on investment securities, nontaxable | 490 | 438 | 299 | 928 | 481 | |||||||||||||||||||
Federal funds sold and other | 93 | 102 | 67 | 195 | 119 | |||||||||||||||||||
TOTAL INTEREST INCOME | 9,497 | 8,914 | 8,135 | 18,411 | 12,608 | |||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Demand | 47 | 44 | 57 | 91 | 79 | |||||||||||||||||||
Savings and money market deposit accounts | 163 | 166 | 124 | 329 | 189 | |||||||||||||||||||
Time | 407 | 423 | 393 | 830 | 617 | |||||||||||||||||||
Federal Home Loan Bank advances and other | 188 | 199 | 169 | 387 | 262 | |||||||||||||||||||
TOTAL INTEREST EXPENSE | 805 | 832 | 743 | 1,637 | 1,147 | |||||||||||||||||||
NET INTEREST INCOME | 8,692 | 8,082 | 7,392 | 16,774 | 11,461 | |||||||||||||||||||
PROVISION FOR LOAN LOSSES | 450 | 165 | (500 | ) | 615 | (500 | ) | |||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 8,242 | 7,917 | 7,892 | 16,159 | 11,961 | |||||||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||||
Service charges on deposit accounts | 321 | 285 | 341 | 606 | 488 | |||||||||||||||||||
Gains on mortgage loans sold, net | 1,782 | 3,342 | 2,756 | 5,124 | 4,533 | |||||||||||||||||||
Gain (loss) on securities transactions, net | 60 | - | - | 60 | (396 | ) | ||||||||||||||||||
Gain on sale of other real estate | 156 | - | - | 156 | - | |||||||||||||||||||
Other | 191 | 219 | 187 | 410 | 293 | |||||||||||||||||||
TOTAL NONINTEREST INCOME | 2,510 | 3,846 | 3,284 | 6,356 | 4,918 | |||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||
Salaries and employee benefits | 4,883 | 5,394 | 5,075 | 10,277 | 7,914 | |||||||||||||||||||
Occupancy | 810 | 829 | 906 | 1,639 | 1,606 | |||||||||||||||||||
Information technology | 636 | 627 | 633 | 1,263 | 1,041 | |||||||||||||||||||
Advertising and public relations | 160 | 265 | 289 | 425 | 498 | |||||||||||||||||||
Audit, legal and consulting | 384 | 281 | 520 | 665 | 744 | |||||||||||||||||||
Federal deposit insurance | 126 | 114 | 113 | 240 | 183 | |||||||||||||||||||
Provision for losses on other real estate | 27 | 26 | 90 | 53 | 110 | |||||||||||||||||||
Other operating | 1,001 | 1,101 | 1,078 | 2,102 | 1,586 | |||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 8,027 | 8,637 | 8,704 | 16,664 | 13,682 | |||||||||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 2,725 | 3,126 | 2,472 | 5,851 | 3,197 | |||||||||||||||||||
INCOME TAX EXPENSE | 588 | 568 | 902 | 1,156 | 1,086 | |||||||||||||||||||
CONSOLIDATED NET INCOME | 2,137 | 2,558 | 1,570 | 4,695 | 2,111 | |||||||||||||||||||
NONCONTROLLING INTEREST IN NET (INCOME) LOSS OF SUBSIDIARY |
223 | (321 | ) | 32 | (98 | ) | 103 | |||||||||||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 2,360 | $ | 2,237 | $ | 1,602 | $ | 4,597 | $ | 2,214 | ||||||||||||||
Basic net income attributable to common shareholders, per share | $ | 0.31 | $ | 0.30 | $ | 0.23 | $ | 0.61 | $ | 0.40 | ||||||||||||||
Diluted net income attributable to common shareholders, per share | $ | 0.31 | $ | 0.30 | $ | 0.22 | $ | 0.60 | $ | 0.39 | ||||||||||||||
COMMERCE UNION BANCSHARES, INC. | |||||||||||||||||||||||||
SEGMENT FINANCIAL INFORMATION | |||||||||||||||||||||||||
FOR THE PERIODS INDICATED | |||||||||||||||||||||||||
(Dollar Amounts In Thousands) |
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(Unaudited) |
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Retail Banking |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Net interest income | $ | 8,545 | $ | 7,788 | $ | 7,109 | $ | 16,332 | $ | 10,969 | |||||||||||||||
Provision for loan losses | 450 | 165 | (500 | ) | 615 | (500 | ) | ||||||||||||||||||
Noninterest income | 728 | 502 | 528 | 1,229 | 385 | ||||||||||||||||||||
Noninterest expense | 5,859 | 5,342 | 5,633 | 11,200 | 8,554 | ||||||||||||||||||||
Income tax expense | 604 | 546 | 902 | 1,149 | 1,086 | ||||||||||||||||||||
Net income | $ | 2,360 | $ | 2,237 | $ | 1,602 | $ | 4,597 | $ | 2,214 | |||||||||||||||
Residential Mortgage Banking |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Net interest income | $ | 147 | $ | 294 | $ | 283 | $ | 442 | $ | 492 | |||||||||||||||
Provision for loan losses | - | - | - | - | - | ||||||||||||||||||||
Noninterest income | 1,782 | 3,344 | 2,756 | 5,127 | 4,533 | ||||||||||||||||||||
Noninterest expense | 2,168 | 3,295 | 3,071 | 5,464 | 5,128 | ||||||||||||||||||||
Income tax expense | (16 | ) | 22 | - | 7 | - | |||||||||||||||||||
Net income (loss) | (223 | ) | 321 | (32 | ) | 98 | (103 | ) | |||||||||||||||||
Noncontrolling interest in net income of subsidiary | 223 | (321 | ) | 32 | (98 | ) | 103 | ||||||||||||||||||
Net income attributable to common shareholders | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||
COMMERCE UNION BANCSHARES, INC. | |||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA | |||||||||||||||||||||||||
AT OR FOR THE THREE MONTHS ENDED | |||||||||||||||||||||||||
(Dollar Amounts In Thousands, Except Per Share Amounts) |
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(Unaudited) |
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June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||||||
2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||||||||
Selected Income Statement Data | |||||||||||||||||||||||||
Total interest income | $ | 9,497 | $ | 8,914 | $ | 8,708 | $ | 8,483 | $ | 8,135 | |||||||||||||||
Total interest expense | 805 | 832 | 807 | 764 | 743 | ||||||||||||||||||||
Net interest income | 8,692 | 8,082 | 7,901 | 7,719 | 7,392 | ||||||||||||||||||||
Provision for loan losses | 450 | 165 | 230 | - | (500 | ) | |||||||||||||||||||
Net interest income after provision for loan losses |
8,242 | 7,917 | 7,671 | 7,719 | 7,892 | ||||||||||||||||||||
Noninterest income | 2,510 | 3,846 | 3,534 | 4,019 | 3,284 | ||||||||||||||||||||
Noninterest expense | 8,027 | 8,637 | 9,047 | 8,840 | 8,704 | ||||||||||||||||||||
Income tax expense | 588 | 568 | 627 | 558 | 902 | ||||||||||||||||||||
Consolidated net income | 2,137 | 2,558 | 1,531 | 2,340 | 1,570 | ||||||||||||||||||||
Noncontrolling interest in net (income) loss of subsidiary |
223 | (321 | ) | (3 | ) | (507 | ) | 32 | |||||||||||||||||
Net income attributable to common shareholders | 2,360 | 2,237 | 1,528 | 1,833 | 1,602 | ||||||||||||||||||||
Per Common Share Data | |||||||||||||||||||||||||
Net income attributable to common shareholders, per share |
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Basic | $ | 0.31 | $ | 0.30 | $ | 0.21 | $ | 0.26 | $ | 0.23 | |||||||||||||||
Diluted | $ | 0.31 | $ | 0.30 | $ | 0.21 | $ | 0.25 | $ | 0.22 | |||||||||||||||
Book value per common share | $ | 13.90 | $ | 13.49 | $ | 13.29 | $ | 13.31 | $ | 12.99 | |||||||||||||||
Tangible book value per common share | $ | 12.17 | $ | 11.74 | $ | 11.46 | $ | 11.42 | $ | 11.08 | |||||||||||||||
Basic weighted average common shares | 7,560,503 | 7,450,400 | 7,130,665 | 7,086,798 | 7,063,771 | ||||||||||||||||||||
Diluted weighted average common shares | 7,678,508 | 7,563,666 | 7,291,960 | 7,286,069 | 7,308,668 | ||||||||||||||||||||
Common shares outstanding at period end | 7,627,777 | 7,560,594 | 7,279,620 | 7,092,294 | 7,070,821 | ||||||||||||||||||||
Selected Balance Sheet Data | |||||||||||||||||||||||||
Total assets | $ | 883,204 | $ | 868,545 | $ | 876,404 | $ | 852,689 | $ | 798,930 | |||||||||||||||
Securities available for sale | 147,675 | 139,899 | 133,825 | 130,019 | 112,039 | ||||||||||||||||||||
Loans, net of unearned income | 649,277 | 622,733 | 616,570 | 593,817 | 574,046 | ||||||||||||||||||||
Allowance for loan losses | 8,688 | 8,090 | 7,823 | 7,511 | 7,424 | ||||||||||||||||||||
Mortgage loans held for sale | 14,961 | 24,682 | 55,093 | 44,745 | 41,715 | ||||||||||||||||||||
Other real estate | 475 | 1,139 | 1,149 | 528 | 1,094 | ||||||||||||||||||||
Goodwill | 11,404 | 11,404 | 11,404 | 11,404 | 11,404 | ||||||||||||||||||||
Core deposit intangibles | 1,760 | 1,849 | 1,938 | 2,028 | 2,117 | ||||||||||||||||||||
Non-interest bearing deposits | 134,515 | 116,362 | 111,309 | 95,883 | 97,489 | ||||||||||||||||||||
Total deposits | 647,851 | 657,777 | 640,008 | 608,990 | 602,503 | ||||||||||||||||||||
Federal Home Loan Bank advances | 124,871 | 104,798 | 135,759 | 145,646 | 102,854 | ||||||||||||||||||||
Total stockholders' equity | 106,024 | 102,022 | 96,751 | 94,403 | 91,853 | ||||||||||||||||||||
Average loans | 637,787 | 617,600 | 603,329 | 582,145 | 564,056 | ||||||||||||||||||||
Average earnings assets (1) | 830,501 | 821,181 | 813,473 | 775,313 | 745,899 | ||||||||||||||||||||
Average total assets | 880,657 | 871,961 | 863,798 | 823,228 | 789,129 | ||||||||||||||||||||
Average stockholders' equity | 103,297 | 99,237 | 92,492 | 93,030 | 91,336 | ||||||||||||||||||||
(1) |
Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities. |
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COMMERCE UNION BANCSHARES, INC. |
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SELECTED QUARTERLY FINANCIAL DATA | ||||||||||||||||||||||||||
AT OR FOR THE THREE MONTHS ENDED | ||||||||||||||||||||||||||
(Dollar Amounts In Thousands, Except Per Share Amounts) |
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(Unaudited) |
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June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||||||||
2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||||||||||||||
Selected Asset Quality Measures | ||||||||||||||||||||||||||
Nonaccrual loans | $ | 4,126 | $ | 4,342 | $ | 5,004 | $ | 4,266 | $ | 4,103 | ||||||||||||||||
Total nonperforming assets (1) | 4,601 | 5,481 | 6,153 | 4,794 | 5,197 | |||||||||||||||||||||
Net charge offs (recoveries) | (149 | ) | (102 | ) | (82 | ) | (87 | ) | (516 | ) | ||||||||||||||||
Nonaccrual loans to total loans | 0.64 | % | 0.70 | % | 0.81 | % | 0.72 | % | 0.71 | % | ||||||||||||||||
Nonperforming assets to total assets | 0.52 | % | 0.63 | % | 0.70 | % | 0.56 | % | 0.65 | % | ||||||||||||||||
Nonperforming assets to total loans and other real estate | 0.71 | % | 0.88 | % | 1.00 | % | 0.81 | % | 0.90 | % | ||||||||||||||||
Allowance for loan losses to total loans | 1.34 | % | 1.30 | % | 1.27 | % | 1.26 | % | 1.29 | % | ||||||||||||||||
Allowance for loan losses to nonaccrual loans | 210.57 | % | 186.32 | % | 156.33 | % | 176.07 | % | 180.94 | % | ||||||||||||||||
Net charge offs (recoveries) to average loans (2) | (0.09 | %) | (0.07 | %) | (0.05 | %) | (0.06 | %) | (0.37 | %) | ||||||||||||||||
Capital Ratios (Bank Subsidiary Only) | ||||||||||||||||||||||||||
Tier 1 leverage | 10.59 | % | 10.34 | % | 9.88 | % | 10.26 | % | 10.54 | % | ||||||||||||||||
Common equity tier 1 | 12.49 | % | 12.75 | % | 11.97 | % | 12.23 | % | 13.24 | % | ||||||||||||||||
Tier 1 risk-based capital | 12.49 | % | 12.75 | % | 11.97 | % | 12.23 | % | 13.24 | % | ||||||||||||||||
Total risk-based capital | 13.67 | % | 13.91 | % | 13.08 | % | 13.33 | % | 14.46 | % | ||||||||||||||||
Selected Performance Ratios (2) (3) | ||||||||||||||||||||||||||
Return on average assets | 1.07 | % | 1.03 | % | 0.71 | % | 0.89 | % | 0.81 | % | ||||||||||||||||
Return on average stockholders' equity | 9.14 | % | 9.02 | % | 6.61 | % | 7.88 | % | 7.02 | % | ||||||||||||||||
Net interest margin | 4.33 | % | 4.08 | % | 3.98 | % | 4.03 | % | 4.06 | % | ||||||||||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||||||
Adjusted net interest margin (4) | ||||||||||||||||||||||||||
Net interest income | $ | 8,692 | $ | 8,082 | $ | 7,901 | $ | 7,719 | $ | 7,392 | ||||||||||||||||
Purchase accounting adjustments | (442 | ) | (442 | ) | (442 | ) | (442 | ) | (442 | ) | ||||||||||||||||
Interest income recognized on payoff of purchased credit impaired loan |
(619 | ) | - | - | - | - | ||||||||||||||||||||
State tax credit on tax exempt loan | 233 | - | - | - | - | |||||||||||||||||||||
Adjusted net interest income | $ | 7,864 | $ | 7,640 | $ | 7,459 | $ | 7,277 | $ | 6,950 | ||||||||||||||||
Adjusted net interest margin | 3.93 | % | 3.86 | % | 3.76 | % | 3.80 | % | 3.82 | % | ||||||||||||||||
Efficiency ratio (subsidiary bank only excluding mortgage segment) (4) |
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Non-interest expense | $ | 5,499 | $ | 5,039 | $ | 5,077 | $ | 4,939 | $ | 5,243 | ||||||||||||||||
Net interest income | 8,545 | 7,788 | 7,540 | 7,334 | 7,109 | |||||||||||||||||||||
Tax equivalent adjustment for tax exempt interest income |
304 | 272 | 245 | 193 | 185 | |||||||||||||||||||||
Non-interest income | 728 | 502 | 522 | 565 | 528 | |||||||||||||||||||||
Less gain on sale of other real estate and other assets | (130 | ) | (20 | ) | (5 | ) | (1 | ) | - | |||||||||||||||||
Less (gain) loss on sale of securities | (60 | ) | - | 7 | (15 | ) | - | |||||||||||||||||||
Adjusted operating income | $ | 9,387 | $ | 8,542 | $ | 8,309 | $ | 8,076 | $ | 7,822 | ||||||||||||||||
Efficiency Ratio | 58.58 | % | 58.99 | % | 61.10 | % | 61.16 | % | 67.03 | % | ||||||||||||||||
(1) |
Nonperforming assets consist of nonaccrual loans and other real estate. |
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(2) |
Data has been annualized. |
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(3) |
Return on average assets is defined as net income attributable to common shareholders divided by average total assets; return on average stockholders’ equity is defined as net income attributable to common shareholders divided by average stockholders’ equity; net interest margin is defined as net interest income divided by average earning assets. |
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(4) |
Not a recognized measure under generally accepted accounting principles (GAAP). |
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COMMERCE UNION BANCSHARES, INC. | |||||||||||||||||||||||||||||||||||||
YIELD TABLES | |||||||||||||||||||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015 | |||||||||||||||||||||||||||||||||||||
(Dollar Amounts In Thousands) |
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(Unaudited) |
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Three Months Ended June 30, 2016 |
Three Months Ended June 30, 2015 |
Change | |||||||||||||||||||||||||||||||||||
Average Balances |
Rates / Yields (%) |
Interest Income / Expense |
Average Balances |
Rates / Yields (%) |
Interest Income / Expense |
Due to Volume |
Due to Rate |
Total | |||||||||||||||||||||||||||||
Interest Earning Assets | |||||||||||||||||||||||||||||||||||||
Loans | $ | 637,787 | 5.06 | $ | 8,018 | $ | 564,056 | 4.83 | $ | 6,790 | $ | 900 | $ | 328 | $ | 1,228 | |||||||||||||||||||||
Loan fees | - | 0.31 | 494 | - | 0.29 | 410 | 84 | - | 84 | ||||||||||||||||||||||||||||
Loans with fees | 637,787 | 5.37 | 8,512 | 564,056 | 5.12 | 7,200 | 984 | 328 | 1,312 | ||||||||||||||||||||||||||||
Mortgage loans held for sale | 20,733 | 3.61 | 186 | 36,408 | 3.87 | 351 | (143 | ) | (22 | ) | (165 | ) | |||||||||||||||||||||||||
Federal funds sold | 356 | 1.13 | 1 | 542 | 2.22 | 3 | (1 | ) | (1 | ) | (2 | ) | |||||||||||||||||||||||||
Deposits with banks | 20,357 | 0.32 | 16 | 26,171 | 0.17 | 11 | (15 | ) | 20 | 5 | |||||||||||||||||||||||||||
Investment securities - taxable | 48,754 | 1.78 | 216 | 48,712 | 1.80 | 218 | 2 | (4 | ) | (2 | ) | ||||||||||||||||||||||||||
Investment securities - tax-exempt | 95,590 | 3.12 | 490 | 64,698 | 2.81 | 299 | 155 | 36 | 191 | ||||||||||||||||||||||||||||
Other | 6,924 | 4.41 | 76 | 5,312 | 4.00 | 53 | 17 | 6 | 23 | ||||||||||||||||||||||||||||
Total Earning Assets | 830,501 | 4.72 | 9,497 | 745,899 | 4.46 | 8,135 | 999 | 363 | 1,362 | ||||||||||||||||||||||||||||
Nonearning Assets | 50,156 | 43,230 | |||||||||||||||||||||||||||||||||||
$ | 880,657 | $ | 789,129 | ||||||||||||||||||||||||||||||||||
Interest bearing liabilities | |||||||||||||||||||||||||||||||||||||
Interest bearing demand | $ | 89,385 | 0.21 | 47 | $ | 103,615 | 0.22 | 57 | (8 | ) | (2 | ) | (10 | ) | |||||||||||||||||||||||
Savings and money market | 191,630 | 0.34 | 163 | 173,093 | 0.29 | 124 | 15 | 24 | 39 | ||||||||||||||||||||||||||||
Time deposits - retail | 143,953 | 0.67 | 240 | 141,164 | 0.76 | 268 | 32 | (60 | ) | (28 | ) | ||||||||||||||||||||||||||
Time deposits - wholesale | 105,560 | 0.64 | 167 | 93,030 | 0.54 | 125 | 18 | 24 | 42 | ||||||||||||||||||||||||||||
Total interest bearing deposits | 530,528 | 0.47 | 617 | 510,902 | 0.45 | 574 | 57 | (14 | ) | 43 | |||||||||||||||||||||||||||
Federal Home Loan Bank advances | 115,855 | 0.65 | 188 | 94,360 | 0.72 | 169 | 106 | (87 | ) | 19 | |||||||||||||||||||||||||||
Total borrowed funds | 115,855 | 0.65 | 188 | 94,360 | 0.72 | 169 | 106 | (87 | ) | 19 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 646,383 | 0.50 | 805 | 605,262 | 0.49 | 743 | 163 | (101 | ) | 62 | |||||||||||||||||||||||||||
Net interest rate spread (%) / Net Interest Income ($) | 4.22 | $ | 8,692 | 3.97 | $ | 7,392 | $ | 836 | $ | 464 | $ | 1,300 | |||||||||||||||||||||||||
Non-interest bearing deposits | 126,175 | 90,073 | |||||||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 4,802 | 2,458 | |||||||||||||||||||||||||||||||||||
Stockholder's equity | 103,297 | 91,336 | |||||||||||||||||||||||||||||||||||
$ | 880,657 | $ | 789,129 | ||||||||||||||||||||||||||||||||||
Net interest margin | 4.33 | 4.06 | |||||||||||||||||||||||||||||||||||
COMMERCE UNION BANCSHARES, INC. | |||||||||||||||||||||||||||||||||||||
YIELD TABLES | |||||||||||||||||||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015 | |||||||||||||||||||||||||||||||||||||
(Dollar Amounts In Thousands) |
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(Unaudited) |
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Six Months Ended June 30, 2016 |
Six Months Ended June 30, 2015 |
Change | |||||||||||||||||||||||||||||||||||
Average Balances |
Rates / Yields (%) |
Interest Income / Expense |
Average Balances |
Rates / Yields (%) |
Interest Income / Expense |
Due to Volume |
Due to Rate |
Total | |||||||||||||||||||||||||||||
Interest Earning Assets | |||||||||||||||||||||||||||||||||||||
Loans | $ | 627,694 | 4.91 | $ | 15,326 | $ | 441,558 | 4.74 | $ | 10,376 | $ | 4,562 | $ | 388 | $ | 4,950 | |||||||||||||||||||||
Loan fees | - | 0.31 | 956 | - | 0.28 | 609 | 347 | - | 347 | ||||||||||||||||||||||||||||
Loans with fees | 627,694 | 5.22 | 16,282 | 441,558 | 5.02 | 10,985 | 4,909 | 388 | 5,297 | ||||||||||||||||||||||||||||
Mortgage loans held for sale | 30,124 | 3.70 | 554 | 29,209 | 4.16 | 602 | 49 | (97 | ) | (48 | ) | ||||||||||||||||||||||||||
Federal funds sold | 333 | 0.60 | 1 | 597 | 1.35 | 4 | (1 | ) | (2 | ) | (3 | ) | |||||||||||||||||||||||||
Deposits with banks | 20,750 | 0.34 | 35 | 20,633 | 0.17 | 17 | - | 18 | 18 | ||||||||||||||||||||||||||||
Investment securities - taxable | 49,004 | 1.85 | 452 | 43,401 | 1.96 | 421 | 88 | (57 | ) | 31 | |||||||||||||||||||||||||||
Investment securities - tax-exempt | 92,116 | 3.07 | 928 | 54,026 | 2.72 | 481 | 378 | 69 | 447 | ||||||||||||||||||||||||||||
Other | 6,584 | 4.86 | 159 | 4,322 | 4.57 | 98 | 54 | 7 | 61 | ||||||||||||||||||||||||||||
Total Earning Assets | 826,605 | 4.60 | 18,411 | 593,746 | 4.37 | 12,608 | 5,477 | 326 | 5,803 | ||||||||||||||||||||||||||||
Nonearning Assets | 49,704 | 29,566 | |||||||||||||||||||||||||||||||||||
$ | 876,309 | $ | 623,312 | ||||||||||||||||||||||||||||||||||
Interest bearing liabilities | |||||||||||||||||||||||||||||||||||||
Interest bearing demand | $ | 89,620 | 0.20 | 91 | $ | 77,275 | 0.21 | 79 | 21 | (9 | ) | 12 | |||||||||||||||||||||||||
Savings and money market | 192,673 | 0.34 | 329 | 142,320 | 0.27 | 189 | 81 | 59 | 140 | ||||||||||||||||||||||||||||
Time deposits - retail | 142,231 | 0.68 | 484 | 91,091 | 0.80 | 363 | 268 | (147 | ) | 121 | |||||||||||||||||||||||||||
Time deposits - wholesale | 110,663 | 0.63 | 346 | 97,853 | 0.52 | 254 | 35 | 57 | 92 | ||||||||||||||||||||||||||||
Total interest bearing deposits | 535,187 | 0.47 | 1,250 | 408,539 | 0.44 | 885 | 405 | (40 | ) | 365 | |||||||||||||||||||||||||||
Federal Home Loan Bank advances and other | 116,540 | 0.67 | 387 | 75,707 | 0.70 | 262 | 158 | (33 | ) | 125 | |||||||||||||||||||||||||||
Total borrowed funds | 116,540 | 0.67 | 387 | 75,707 | 0.70 | 262 | 158 | (33 | ) | 125 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 651,727 | 0.51 | 1,637 | 484,246 | 0.48 | 1,147 | 563 | (73 | ) | 490 | |||||||||||||||||||||||||||
Net interest rate spread (%) / Net Interest Income ($) | 4.09 | $ | 16,774 | 3.89 | $ | 11,461 | $ | 4,914 | $ | 399 | $ | 5,313 | |||||||||||||||||||||||||
Non-interest bearing deposits | 118,118 | 69,754 | |||||||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 5,197 | 1,873 | |||||||||||||||||||||||||||||||||||
Stockholder's equity | 101,267 | 67,439 | |||||||||||||||||||||||||||||||||||
$ | 876,309 | $ | 623,312 | ||||||||||||||||||||||||||||||||||
Net interest margin | 4.20 | 3.98 |