FAIRMONT, W. Va.--(BUSINESS WIRE)--For the year ended December 31, 2018, MVB Financial Corp. (the “Company”) (NASDAQ: MVBF) reported net income of $12.0 million, or $1.04 and $1.00 basic and diluted earnings per share, respectively, compared to $7.6 million, or $0.69 and $0.68 basic and diluted earnings per share, respectively, for the same period in 2017. This represents a 58.5% increase over prior year. For the quarter ended December 31, 2018, the Company reported net income of $3.0 million, or $0.25 and $0.24 basic and diluted earnings per share, respectively, compared to $1.4 million, or $0.12 basic and diluted earnings per share, for the quarter ended December 31, 2017.
Noninterest-bearing deposits increased $87.6 million, or 69.6%, from December 31, 2017, to a balance of $213.6 million as of December 31, 2018. The growth in noninterest-bearing deposits was primarily driven by MVB’s continued strategic initiatives in fintech and specialty deposits. As of December 31, 2018, noninterest-bearing deposits were 16.3% of total deposits, compared to 10.9% as of December 31, 2017.
Loans increased $198.4 million, or 17.9%, from December 31, 2017, to a balance of $1.3 billion as of December 31, 2018. The increase in loans has been driven by strong growth in MVB’s West Virginia and Northern Virginia markets. In addition to the increase in loan volume during 2018, loan yield increased by 45 basis points. The Company continues to leverage industry consolidation to capitalize on market disruptions to attract talent with extensive experience and established relationships in MVB’s markets.
MANAGEMENT OVERVIEW
“MVB’s solid performance for 2018, featured strong loan growth, higher net income and continued success in the war for deposits, especially in noninterest-bearing deposits,” said Larry F. Mazza, CEO and President, MVB Financial Corp. “Our MVB 3.0 strategic focus on ‘blue ocean’ opportunities in the fintech and specialty deposits arena reached a tipping point in 2018 and has generated great momentum for 2019.”
FOURTH QUARTER 2018 HIGHLIGHTS
- Net interest margin remains strong at 3.54% for the quarter ended December 31, 2018, an increase of 11 basis points versus the quarter ended September 30, 2018, and an increase of 25 basis points versus the quarter ended December 31, 2017.
- Loans of $1.3 billion as of December 31, 2018, increased $7.9 million, or 0.6%, from September 30, 2018, and increased $198.4 million, or 17.9% from December 31, 2017.
- Very good asset quality as demonstrated by the 0.54% ratio of nonperforming loans to total loans as of December 31, 2018.
- Assets of $1.8 billion as of December 31, 2018, increased $27.9 million, or 1.6%, from September 30, 2018, and increased $216.7 million, or 14.1%, from December 31, 2017.
- Net interest income of $14.4 million increased $886 thousand, or 6.6%, from September 30, 2018, and increased $2.7 million, or 23.3%, from the fourth quarter ended December 31, 2017.
- $1 million of subordinated debt was converted to common stock, which provided an annual interest expense savings of $70 thousand, and resulted in issuing 62,500 new common shares.
LOANS
Loans totaled $1.3 billion as of December 31, 2018, an increase of $7.9 million, or 0.6%, from September 30, 2018, and an increase of $198.4 million, or 17.9% from December 31, 2017. Organic growth and the addition of commercial lenders within the Company’s primary lending areas contributed to the loan growth. The yield on loans was 4.94% for the year ended December 31, 2018, an increase of 45 basis points from the year ended December 31, 2017. The yield on loans was 5.18% for the quarter ended December 31, 2018, an increase of 21 basis points, from the quarter ended September 30, 2018, and an increase of 56 basis points, from the quarter ended December 31, 2017. Of the 21-basis point increase in loan yield for the quarter ended December 31, 2018, 4 basis points were attributable to an increase in loan fees.
DEPOSITS
Deposits totaled $1.3 billion as of December 31, 2018, a decrease $70.0 million, or 5.1%, from September 30, 2018, and an increase of $149.6 million, or 12.9%, from December 31, 2017. Noninterest-bearing deposits totaled $213.6 million as of December 31, 2018, or 16.3%, of the total deposit base, a decrease of $27.3 million, or 11.3%, from September 30, 2018, and an increase of $87.6 million, or 69.6%, from December 31, 2017. The fourth quarter decline was due, in part, to the seasonality in public funds, which decreased $43.4 million, and the cyclical nature of fintech and title deposits, which decreased $8.7 million. Noninterest-bearing deposits remain a core funding source for the Company. Of the $213.6 million in noninterest-bearing balances in 2018, $91.9 million are related to fintech and title business.
NET INTEREST INCOME
Net interest income for the fourth quarter of 2018 was $14.4 million, an increase of $886 thousand, or 6.6%, from September 30, 2018, and an increase of $2.7 million, or 23.3%, from the fourth quarter ended December 31, 2017. Net interest income of $52.1 million for the full year 2018 increased $7.8 million, or 17.5%, from the year ended December 31, 2017. Net interest margin of 3.54% for the quarter ended December 31, 2018, increased 11 basis points versus the quarter ended September 30, 2018, and increased 25 basis points versus the quarter ended December 31, 2017. Net interest margin of 3.41% for the year ended December 31, 2018, increased 14 basis points from the year ended December 31, 2017.
Interest expense increased 11.3% during the fourth quarter of 2018, compared to the quarter ended September 30, 2018, due to an increase of 14 basis points in the cost of interest-bearing liabilities, and increased 52.1% for the quarter ended December 31, 2018, compared to the quarter ended December 31, 2017, due to an increase of 45 basis points in the cost of interest-bearing liabilities. Interest expense increased 43.9% for the year ended December 31, 2018, compared to the same time period in 2017, based on a 33-basis point increase in the cost of interest-bearing liabilities. The increased cost of interest-bearing liabilities is the result of an increase in borrowings due to loan growth. Increased interest rates and an emphasis on loan yields more than offset the increase in cost of interest-bearing liabilities, driving the net interest margin expansion.
In November 2018, $1 million of subordinated debt was converted to common stock, which caused the issuance of 62,500 new shares and will provide an annual interest expense savings of $70 thousand. Including this conversion, in 2018, $16 million of subordinated debt was converted into common stock, which caused the issuance of 1,000,000 new shares and will provide an annual interest expense savings of $1.1 million.
ASSET QUALITY
Asset quality remained very good in 2018. Nonperforming loans decreased $2.6 million, to 0.54% of total loans as of December 31, 2018, compared to 0.99% as of September 30, 2018, and 0.88% as of December 31, 2017. In addition, net charge-offs for 2018 decreased $17 thousand compared to 2017, resulting in a net loan charge-offs to total loans ratio of 0.11% as of December 31, 2018, and 0.13% as of December 31, 2017.
Provision for loan loss was $292 thousand for the quarter ended December 31, 2018, a decrease of $777 thousand, or 72.7%, from the quarter ended September 30, 2018, and a decrease of $744 thousand, or 71.8%, from the quarter ended December 31, 2017. Provision was $2.4 million for the full year ended December 31, 2018, a $267 thousand increase from the same time period in 2017.
NONINTEREST INCOME
Noninterest income for the fourth quarter of 2018 was $8.3 million, a decrease of $2.2 million, or 21.1%, from the quarter ended September 30, 2018, and a decrease of $1.9 million, or 18.3%, from the quarter ended December 31, 2017. Noninterest income of $38.6 million for the full year 2018 decreased $2.1 million, or 5.1%, from the year ended December 31, 2017.
The decrease from the quarter ended September 30, 2018, was the result of a $1.3 million decrease in mortgage fee income, a $616 thousand decrease in the holding gain on equity securities, and a $296 thousand decrease in income on bank owned life insurance. The decrease in mortgage fee income was the result of a decrease in mortgage production volume of $32.3 million, or 8.7%, from the quarter ended September 30, 2018, to the quarter ended December 31, 2018.
The decrease from the quarter ended December 31, 2017, was the result of an $842 thousand decrease in mortgage fee income, a $303 thousand decrease in other operating income, a $281 thousand decrease in the gain on derivative, a $276 thousand decrease in the gain on sale of securities and a $164 thousand decrease in interchange income. The decrease in mortgage fee income was the result of a decrease in mortgage production volume of $32.8 million, or 8.8%, from the quarter ended December 31, 2017, to the quarter ended December 31, 2018.
The year over year decrease was primarily the result of a $4.8 million decrease in mortgage fee income, due to mortgage production volume decreasing by $93.8 million or 6.1% in 2018. This decrease was partially offset by a gain on derivative of $2.4 million. Excluding the decrease in mortgage fee income and increase in the gain on derivative, noninterest income for 2018 increased $302 thousand and was primarily due to increases in the holding gain on equity securities, and income on bank-owned life insurance.
With the challenge of lower mortgage fee income and production volumes, the Company’s mortgage subsidiary did remain profitable during each quarter of 2018.
NONINTEREST EXPENSE
Noninterest expense for the fourth quarter of 2018 was $18.5 million, an increase of $56 thousand, or 0.3%, from the quarter ended September 30, 2018, and an increase of $759 thousand, or 4.3%, from the quarter ended December 31, 2017. Noninterest expense for the full year 2018 was $72.9 million, an increase of$2.4 million, or 3.4%, from the year ended December 31, 2017. The increase from the quarter ended September 30, 2018 was the result of an increase in salaries and employee benefits of $217 thousand, which was partially offset by a decrease in other operating expense of $133 thousand. The increase from the quarter ended December 31, 2017 was a result of an increase in salaries and employee benefits of $638 thousand and an increase in travel, entertainment, dues, and subscriptions of $217 thousand. An increase in salaries and employee benefits of $2.1 million and an increase in equipment and occupancy expense of $384 thousand attributed to the year over year increase.
DIVIDEND
As previously announced, on November 21, 2018, the Company declared a quarterly cash dividend of $0.03 per share to shareholders of record at the close of business on December 1, 2018, payable December 15, 2018. This was the fourth quarterly dividend for 2018 and was equal to the September 2018 payout of $0.03 per share. The cash dividend of $0.11 for the full year 2018, increased $0.01, or 10%, compared to the same time period in 2017.
About MVB Financial Corp.
MVB Financial Corp. (“MVB Financial” or “MVB”), the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® under the ticker “MVBF.”
MVB is a financial holding company headquartered in Fairmont, W.Va. Through its subsidiary, MVB Bank, Inc., and the bank’s subsidiaries, MVB Mortgage and MVB Community Development Corporation, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region.
Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.
For more information about MVB, please visit ir.mvbbanking.com.
Forward-looking Statements
MVB Financial Corp. has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this Earnings Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” “may,” or similar expressions occur in this Earnings Release, the Company is making forward-looking statements. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Earnings Release. Those factors include, but are not limited to credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession, and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements.
Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information in this announcement is subject to change.
Questions or comments concerning this Earnings Release should be directed to:
MVB Financial Corp.
Donald T. Robinson, Executive Vice President and CFO
(304) 598-3500
drobinson@mvbbanking.com
MVB Financial Corp. Financial Highlights |
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Condensed Consolidated Statements of Income
(Unaudited) (Dollars in thousands, except per share data) |
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Quarterly | Year-to-Date | |||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Fourth |
Third |
Second |
First |
Fourth |
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Interest income | $ | 19,586 | $ | 18,176 | $ | 16,944 | $ | 15,054 | $ | 15,086 | $ | 69,760 | $ | 56,598 | ||||||||||||||
Interest expense | 5,176 | 4,652 | 4,289 | 3,589 | 3,403 | 17,706 | 12,301 | |||||||||||||||||||||
Net interest income | 14,410 | 13,524 | 12,655 | 11,465 | 11,683 | 52,054 | 44,297 | |||||||||||||||||||||
Provision for loan losses | 292 | 1,069 | 605 | 474 | 1,036 | 2,440 | 2,173 | |||||||||||||||||||||
Noninterest income | 8,295 | 10,511 | 10,795 | 9,039 | 10,157 | 38,640 | 40,706 | |||||||||||||||||||||
Noninterest expense | 18,473 | 18,417 | 19,249 | 16,739 | 17,714 | 72,878 | 70,500 | |||||||||||||||||||||
Income before income taxes | 3,940 | 4,549 | 3,596 | 3,291 | 3,090 | 15,376 | 12,330 | |||||||||||||||||||||
Income tax expense | 941 | 970 | 765 | 697 | 1,667 | 3,373 | 4,755 | |||||||||||||||||||||
Net income | $ | 2,999 | $ | 3,579 | $ | 2,831 | $ | 2,594 | $ | 1,423 | $ | 12,003 | $ | 7,575 | ||||||||||||||
Preferred dividends | 123 | 123 | 122 | 121 | 124 | 489 | 498 | |||||||||||||||||||||
Net income available to common shareholders | $ | 2,876 | $ | 3,456 | $ | 2,709 | $ | 2,473 | $ | 1,299 | $ | 11,514 | $ | 7,077 | ||||||||||||||
Earnings per share - basic | $ | 0.25 | $ | 0.30 | $ | 0.25 | $ | 0.24 | $ | 0.12 | $ | 1.04 | $ | 0.69 | ||||||||||||||
Earnings per share - diluted | $ | 0.24 | $ | 0.29 | $ | 0.25 | $ | 0.23 | $ | 0.12 | $ | 1.00 | $ | 0.68 | ||||||||||||||
Condensed Consolidated Balance Sheets
(Unaudited) (Dollars in thousands) |
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December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||||||
Cash and cash equivalents | $ | 22,221 | $ | 22,045 | $ | 20,305 | |||||||||
Certificates of deposit with other banks | 14,778 | 14,778 | 14,778 | ||||||||||||
Investment securities | 231,213 | 226,306 | 231,507 | ||||||||||||
Loans held for sale | 75,807 | 63,706 | 66,794 | ||||||||||||
Loans | 1,304,366 | 1,296,460 | 1,105,941 | ||||||||||||
Allowance for loan losses | (10,939 | ) | (11,439 | ) | (9,878 | ) | |||||||||
Net loans | 1,293,427 | 1,285,021 | 1,096,063 | ||||||||||||
Premises and equipment, net | 26,545 | 26,706 | 26,686 | ||||||||||||
Goodwill | 18,480 | 18,480 | 18,480 | ||||||||||||
Other assets | 68,498 | 66,062 | 59,689 | ||||||||||||
Total assets | $ | 1,750,969 | $ | 1,723,104 | $ | 1,534,302 | |||||||||
Deposits | $ | 1,309,154 | $ | 1,379,186 | $ | 1,159,580 | |||||||||
Borrowed funds | 214,887 | 122,000 | 152,169 | ||||||||||||
Other liabilities | 50,155 | 51,042 | 72,361 | ||||||||||||
Shareholders’ equity |
176,773 | 170,876 | 150,192 | ||||||||||||
Total liabilities and shareholders’ equity |
$ | 1,750,969 | $ | 1,723,104 | $ | 1,534,302 | |||||||||
Reportable Segments
(Unaudited) |
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Twelve Months Ended December 31, 2018 |
Commercial & |
Mortgage |
Financial |
Intercompany |
Consolidated | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest income | $ | 63,762 | $ | 6,667 | $ | 5 | $ | (674 | ) | $ | 69,760 | |||||||||||||
Interest expense | 13,667 | 4,085 | 1,756 | (1,802 | ) | 17,706 | ||||||||||||||||||
Net interest income | 50,095 | 2,582 | (1,751 | ) | 1,128 | 52,054 | ||||||||||||||||||
Provision for loan losses | 2,386 | 54 | — | — | 2,440 | |||||||||||||||||||
Net interest income after provision for loan losses | 47,709 | 2,528 | (1,751 | ) | 1,128 | 49,614 | ||||||||||||||||||
Noninterest Income: | ||||||||||||||||||||||||
Mortgage fee income | 585 | 32,880 | — | (1,128 | ) | 32,337 | ||||||||||||||||||
Other income | 6,479 | (243 | ) | 6,411 | (6,344 | ) | 6,303 | |||||||||||||||||
Total noninterest income | 7,064 | 32,637 | 6,411 | (7,472 | ) | 38,640 | ||||||||||||||||||
Noninterest Expenses: | ||||||||||||||||||||||||
Salaries and employee benefits | 14,924 | 23,927 | 7,373 | — | 46,224 | |||||||||||||||||||
Other expense | 20,081 | 8,608 | 4,309 | (6,344 | ) | 26,654 | ||||||||||||||||||
Total noninterest expenses | 35,005 | 32,535 | 11,682 | (6,344 | ) | 72,878 | ||||||||||||||||||
Income (loss) before income taxes | 19,768 | 2,630 | (7,022 | ) | — | 15,376 | ||||||||||||||||||
Income tax expense (benefit) | 4,265 | 677 | (1,569 | ) | — | 3,373 | ||||||||||||||||||
Net income (loss) | $ | 15,503 | $ | 1,953 | $ | (5,453 | ) | $ | — | $ | 12,003 | |||||||||||||
Preferred stock dividends | — | — | 489 | — | 489 | |||||||||||||||||||
Net income (loss) available to common shareholders | $ | 15,503 | $ | 1,953 | $ | (5,942 | ) | $ | — | $ | 11,514 | |||||||||||||
Reportable Segments
(Unaudited) |
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Twelve Months Ended December 31, 2017 |
Commercial & |
Mortgage |
Financial |
Intercompany |
Consolidated | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest income | $ | 52,423 | $ | 4,698 | $ | 4 | $ | (527 | ) | $ | 56,598 | |||||||||||||
Interest expense | 9,118 | 2,317 | 2,241 | (1,375 | ) | 12,301 | ||||||||||||||||||
Net interest income | 43,305 | 2,381 | (2,237 | ) | 848 | 44,297 | ||||||||||||||||||
Provision for loan losses | 1,967 | 206 | — | — | 2,173 | |||||||||||||||||||
Net interest income after provision for loan losses | 41,338 | 2,175 | (2,237 | ) | 848 | 42,124 | ||||||||||||||||||
Noninterest Income: | ||||||||||||||||||||||||
Mortgage fee income | 736 | 37,262 | — | (849 | ) | 37,149 | ||||||||||||||||||
Other income | 5,866 | (2,372 | ) | 5,466 | (5,403 | ) | 3,557 | |||||||||||||||||
Total noninterest income | 6,602 | 34,890 | 5,466 | (6,252 | ) | 40,706 | ||||||||||||||||||
Noninterest Expenses: | ||||||||||||||||||||||||
Salaries and employee benefits | 12,266 | 26,196 | 5,646 | — | 44,108 | |||||||||||||||||||
Other expense | 19,523 | 8,188 | 4,085 | (5,404 | ) | 26,392 | ||||||||||||||||||
Total noninterest expenses | 31,789 | 34,384 | 9,731 | (5,404 | ) | 70,500 | ||||||||||||||||||
Income (loss) before income taxes | 16,151 | 2,681 | (6,502 | ) | — | 12,330 | ||||||||||||||||||
Income tax expense (benefit) | 5,820 | 1,082 | (2,147 | ) | — | 4,755 | ||||||||||||||||||
Net income (loss) | $ | 10,331 | $ | 1,599 | $ | (4,355 | ) | $ | — | $ | 7,575 | |||||||||||||
Preferred stock dividends | — | — | 498 | — | 498 | |||||||||||||||||||
Net income (loss) available to common shareholders | $ | 10,331 | $ | 1,599 | $ | (4,853 | ) | $ | — | $ | 7,077 | |||||||||||||
Average Balances and Interest Rates
(Unaudited) (Dollars in thousands) |
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Three Months Ended |
Three Months Ended |
Three Months Ended |
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Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
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Assets | ||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits in banks | $ | 8,123 | $ | 45 | 2.17 | % | $ | 5,178 | $ | 30 | 2.30 | % | $ | 4,636 | $ | 15 | 1.28 | % | ||||||||||||||||||||||||
CDs with other banks | 14,778 | 74 | 1.99 | 14,778 | 73 | 1.96 | 14,778 | 75 | 2.01 | |||||||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||||||||||||
Taxable | 146,488 | 924 | 2.50 | 148,499 | 869 | 2.32 | 147,459 | 774 | 2.08 | |||||||||||||||||||||||||||||||||
Tax-exempt | 79,906 | 723 | 3.59 | 79,961 | 715 | 3.55 | 68,759 | 572 | 3.30 | |||||||||||||||||||||||||||||||||
Loans and loans held for sale: 1 | ||||||||||||||||||||||||||||||||||||||||||
Commercial | 924,547 | 12,518 | 5.37 | 883,051 | 11,323 | 5.09 | 770,664 | 9,042 | 4.65 | |||||||||||||||||||||||||||||||||
Tax exempt | 14,454 | 128 | 3.51 | 14,231 | 125 | 3.48 | 14,679 | 128 | 3.46 | |||||||||||||||||||||||||||||||||
Real estate | 415,502 | 5,039 | 4.81 | 408,719 | 4,909 | 4.77 | 374,047 | 4,300 | 4.56 | |||||||||||||||||||||||||||||||||
Consumer | 10,215 | 135 | 5.24 | 10,844 | 132 | 4.83 | 13,006 | 180 | 5.49 | |||||||||||||||||||||||||||||||||
Total loans | 1,364,718 | 17,820 | 5.18 | 1,316,845 | 16,489 | 4.97 | 1,172,396 | 13,650 | 4.62 | |||||||||||||||||||||||||||||||||
Total earning assets | 1,614,013 | 19,586 | 4.81 | 1,565,261 | 18,176 | 4.61 | 1,408,028 | 15,086 | 4.25 | |||||||||||||||||||||||||||||||||
Less: Allowance for loan losses | (11,268 | ) | (10,717 | ) | (9,579 | ) | ||||||||||||||||||||||||||||||||||||
Cash and due from banks | 16,515 | 18,020 | 16,969 | |||||||||||||||||||||||||||||||||||||||
Other assets | 109,146 | 108,618 | 96,103 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,728,406 | $ | 1,681,182 | $ | 1,511,521 | ||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||||||||
NOW | $ | 414,997 | $ | 865 | 0.83 | $ | 413,121 | $ | 773 | 0.74 | $ | 467,095 | $ | 807 | 0.69 | |||||||||||||||||||||||||||
Money market checking | 261,928 | 852 | 1.29 | 246,624 | 676 | 1.09 | 238,262 | 432 | 0.72 | |||||||||||||||||||||||||||||||||
Savings | 40,494 | 1 | 0.01 | 42,760 | 1 | 0.01 | 44,685 | 19 | 0.17 | |||||||||||||||||||||||||||||||||
IRAs | 17,937 | 78 | 1.73 | 17,950 | 75 | 1.66 | 17,200 | 59 | 1.36 | |||||||||||||||||||||||||||||||||
CDs | 384,540 | 1,902 | 1.96 | 348,467 | 1,585 | 1.80 | 278,446 | 1,025 | 1.46 | |||||||||||||||||||||||||||||||||
Repurchase agreements and federal funds sold | 15,573 | 6 | 0.15 | 17,911 | 10 | 0.22 | 24,727 | 19 | 0.30 | |||||||||||||||||||||||||||||||||
FHLB and other borrowings | 173,110 | 1,150 | 2.64 | 202,670 | 1,199 | 2.35 | 122,388 | 474 | 1.54 | |||||||||||||||||||||||||||||||||
Subordinated debt | 17,861 | 322 | 7.15 | 19,932 | 333 | 6.63 | 33,524 | 568 | 6.72 | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,326,440 | 5,176 | 1.55 | 1,309,435 | 4,652 | 1.41 | 1,226,327 | 3,403 | 1.10 | |||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 217,527 | 193,116 | 127,417 | |||||||||||||||||||||||||||||||||||||||
Other liabilities | 11,903 | 10,710 | 7,419 | |||||||||||||||||||||||||||||||||||||||
Total liabilities | 1,555,870 | 1,513,261 | 1,361,163 | |||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||||
Preferred stock | 7,834 | 7,834 | 7,834 | |||||||||||||||||||||||||||||||||||||||
Common stock | 11,633 | 11,467 | 10,496 | |||||||||||||||||||||||||||||||||||||||
Paid-in capital | 116,254 | 113,482 | 99,123 | |||||||||||||||||||||||||||||||||||||||
Treasury stock | (1,084 | ) | (1,084 | ) | (1,084 | ) | ||||||||||||||||||||||||||||||||||||
Retained earnings | 46,852 | 43,793 | 36,982 | |||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | (8,953 | ) | (7,571 | ) | (2,993 | ) | ||||||||||||||||||||||||||||||||||||
Total stockholders’ equity | 172,536 | 167,921 | 150,358 | |||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,728,406 | $ | 1,681,182 | $ | 1,511,521 | ||||||||||||||||||||||||||||||||||||
Net interest spread | 3.26 | 3.20 | 3.15 | |||||||||||||||||||||||||||||||||||||||
Net interest income-margin | $ | 14,410 | 3.54 | % | $ | 13,524 | 3.43 | % | $ | 11,683 | 3.29 | % | ||||||||||||||||||||||||||||||
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate. |
||||||||||||||||||||||||||||||||||||||||||
Average Balances and Interest Rates
(Unaudited) (Dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||||
Twelve Months Ended |
Twelve Months Ended |
Twelve Months Ended |
||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
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Assets | ||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits in banks | $ | 5,176 | $ | 108 | 2.09 | % | $ | 3,790 | $ | 52 | 1.37 | % | $ | 16,347 | $ | 94 | 0.58 | % | ||||||||||||||||||||||||
CDs with other banks | 14,778 | 295 | 2.00 | 14,619 | 288 | 1.97 | 11,694 | 228 | 1.95 | |||||||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||||||||||||
Taxable | 150,134 | 3,580 | 2.38 | 125,797 | 2,658 | 2.11 | 76,525 | 1,366 | 1.79 | |||||||||||||||||||||||||||||||||
Tax-exempt | 79,161 | 2,810 | 3.55 | 58,786 | 1,863 | 3.17 | 64,108 | 1,853 | 2.89 | |||||||||||||||||||||||||||||||||
Loans and loans held for sale: 1 | ||||||||||||||||||||||||||||||||||||||||||
Commercial | 854,108 | 43,099 | 5.05 | 751,444 | 33,896 | 4.51 | 734,829 | 32,620 | 4.44 | |||||||||||||||||||||||||||||||||
Tax exempt | 14,352 | 499 | 3.48 | 15,064 | 520 | 3.45 | 16,326 | 564 | 3.45 | |||||||||||||||||||||||||||||||||
Real estate | 395,302 | 18,794 | 4.75 | 373,360 | 16,612 | 4.45 | 398,766 | 16,594 | 4.16 | |||||||||||||||||||||||||||||||||
Consumer | 11,349 | 575 | 5.07 | 13,660 | 709 | 5.19 | 16,762 | 804 | 4.80 | |||||||||||||||||||||||||||||||||
Total loans | 1,275,111 | 62,967 | 4.94 | 1,153,528 | 51,737 | 4.49 | 1,166,683 | 50,582 | 4.34 | |||||||||||||||||||||||||||||||||
Total earning assets | 1,524,360 | 69,760 | 4.58 | 1,356,520 | 56,598 | 4.17 | 1,335,357 | 54,123 | 4.05 | |||||||||||||||||||||||||||||||||
Less: Allowance for loan losses | (10,530 | ) | (9,626 | ) | (8,939 | ) | ||||||||||||||||||||||||||||||||||||
Cash and due from banks | 16,828 | 16,287 | 13,765 | |||||||||||||||||||||||||||||||||||||||
Other assets | 106,600 | 90,585 | 87,815 | |||||||||||||||||||||||||||||||||||||||
Total assets | $ | 1,637,258 | $ | 1,453,766 | $ | 1,427,998 | ||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||||||||
NOW | $ | 432,789 | $ | 3,246 | 0.75 | $ | 438,123 | $ | 2,608 | 0.60 | % | $ | 454,320 | $ | 2,413 | 0.53 | % | |||||||||||||||||||||||||
Money market checking | 245,008 | 2,455 | 1.00 | 239,632 | 1,781 | 0.74 | 163,630 | 1,282 | 0.78 | |||||||||||||||||||||||||||||||||
Savings | 44,049 | 29 | 0.07 | 47,034 | 78 | 0.17 | 43,870 | 88 | 0.20 | |||||||||||||||||||||||||||||||||
IRAs | 17,894 | 285 | 1.59 | 16,678 | 217 | 1.30 | 16,319 | 208 | 1.27 | |||||||||||||||||||||||||||||||||
CDs | 319,720 | 5,620 | 1.76 | 262,417 | 3,610 | 1.38 | 314,542 | 3,757 | 1.19 | |||||||||||||||||||||||||||||||||
Repurchase agreements and federal funds sold | 18,536 | 56 | 0.30 | 23,559 | 75 | 0.32 | 27,066 | 72 | 0.27 | |||||||||||||||||||||||||||||||||
FHLB and other borrowings | 190,686 | 4,259 | 2.23 | 122,144 | 1,690 | 1.38 | 139,736 | 1,086 | 0.78 | |||||||||||||||||||||||||||||||||
Subordinated debt | 25,774 | 1,756 | 6.81 | 33,524 | 2,242 | 6.69 | 33,524 | 2,226 | 6.64 | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,294,456 | 17,706 | 1.37 | 1,183,111 | 12,301 | 1.04 | 1,193,007 | 11,132 | 0.93 | |||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 171,631 | 117,696 | 99,826 | |||||||||||||||||||||||||||||||||||||||
Other liabilities | 10,304 | 8,006 | 12,220 | |||||||||||||||||||||||||||||||||||||||
Total liabilities | 1,476,391 | 1,308,813 | 1,305,053 | |||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||||
Preferred stock | 7,834 | 7,927 | 16,334 | |||||||||||||||||||||||||||||||||||||||
Common stock | 11,082 | 10,355 | 8,263 | |||||||||||||||||||||||||||||||||||||||
Paid-in capital | 107,669 | 96,987 | 75,799 | |||||||||||||||||||||||||||||||||||||||
Treasury stock | (1,084 | ) | (1,084 | ) | (1,084 | ) | ||||||||||||||||||||||||||||||||||||
Retained earnings | 42,509 | 34,155 | 25,943 | |||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | (7,143 | ) | (3,387 | ) | (2,310 | ) | ||||||||||||||||||||||||||||||||||||
Total stockholders’ equity | 160,867 | 144,953 | 122,945 | |||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,637,258 | $ | 1,453,766 | $ | 1,427,998 | ||||||||||||||||||||||||||||||||||||
Net interest spread | 3.21 | 3.13 | 3.12 | |||||||||||||||||||||||||||||||||||||||
Net interest income-margin | $ | 52,054 | 3.41 | % | $ | 44,297 | 3.27 | % | $ | 42,991 | 3.22 | % | ||||||||||||||||||||||||||||||
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate. |
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Selected Financial Data
(Unaudited) (Dollars in thousands, except per share data) |
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Quarterly | Year-to-Date | ||||||||||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||||
Fourth |
Third |
Second |
First |
Fourth |
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Earnings and Per Share Data: | |||||||||||||||||||||||||||||||||||
Net income | $ | 2,999 | $ | 3,579 | $ | 2,831 | $ | 2,594 | $ | 1,423 | $ | 12,003 | $ | 7,575 | |||||||||||||||||||||
Net income available to common shareholders | 2,876 | 3,456 | 2,709 | 2,473 | 1,299 | 11,514 | 7,077 | ||||||||||||||||||||||||||||
Earnings per share - basic | 0.25 | 0.30 | 0.25 | 0.24 | 0.12 | 1.04 | 0.69 | ||||||||||||||||||||||||||||
Earnings per share - diluted | 0.24 | 0.29 | 0.25 | 0.23 | 0.12 | 1.00 | 0.68 | ||||||||||||||||||||||||||||
Cash dividends paid per common share | 0.03 | 0.03 | 0.025 | 0.025 | 0.025 | 0.11 | 0.10 | ||||||||||||||||||||||||||||
Book value per common share | 14.55 | 14.13 | 13.93 | 13.53 | 13.63 | 14.55 | 13.63 | ||||||||||||||||||||||||||||
Tangible book value per common share | 12.92 | 12.48 | 12.25 | 11.72 | 11.80 | 12.92 | 11.80 | ||||||||||||||||||||||||||||
Weighted average shares outstanding - basic | 11,582,378 | 11,416,202 | 10,634,805 | 10,474,138 | 10,444,627 | 11,030,984 | 10,308,738 | ||||||||||||||||||||||||||||
Weighted average shares outstanding - diluted |
12,772,222 |
13,113,259 | 11,502,148 | 12,714,353 | 10,823,994 |
12,722,003 |
10,440,228 | ||||||||||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||||||||||||||
Return on average assets 1 | 0.69 | % | 0.85 | % | 0.70 | % | 0.68 | % | 0.38 | % | 0.73 | % | 0.52 | % | |||||||||||||||||||||
Return on average equity 1 | 6.95 | % | 8.53 | % | 7.40 | % | 6.94 | % | 3.79 | % | 7.46 | % | 5.23 | % | |||||||||||||||||||||
Net interest margin 2 | 3.54 | % | 3.43 | % | 3.38 | % | 3.29 | % | 3.29 | % | 3.41 | % | 3.27 | % | |||||||||||||||||||||
Efficiency ratio 3 | 81.36 | % | 76.63 | % | 82.09 | % | 81.64 | % | 81.11 | % | 80.36 | % | 82.94 | % | |||||||||||||||||||||
Overhead ratio 1 4 | 4.28 | % | 4.38 | % | 4.76 | % | 4.40 | % | 4.69 | % | 4.45 | % | 4.85 | % | |||||||||||||||||||||
Asset Quality Data and Ratios: | |||||||||||||||||||||||||||||||||||
Charge-offs | $ | 801 | $ | 294 | $ | 29 | $ | 356 | $ | 572 | $ | 1,480 | $ | 1,497 | |||||||||||||||||||||
Recoveries | 9 | 13 | 8 | 71 | 18 | 101 | 101 | ||||||||||||||||||||||||||||
Net loan charge-offs to total loans 1 5 | 0.24 | % | 0.09 | % | 0.01 | % | 0.10 | % | 0.20 | % | 0.11 | % | 0.13 | % | |||||||||||||||||||||
Allowance for loan losses | 10,939 | 11,439 | 10,651 | 10,067 | 9,878 | 10,939 | 9,878 | ||||||||||||||||||||||||||||
Allowance for loan losses to total loans 6 | 0.84 | % | 0.88 | % | 0.88 | % | 0.87 | % | 0.89 | % | 0.84 | % | 0.89 | % | |||||||||||||||||||||
Nonperforming loans | 7,103 | 12,846 | 9,419 | 9,102 | 9,699 | 7,103 | 9,699 | ||||||||||||||||||||||||||||
Nonperforming loans to total loans | 0.54 | % | 0.99 | % | 0.78 | % | 0.79 | % | 0.88 | % | 0.54 | % | 0.88 | % | |||||||||||||||||||||
Capital Ratios: | |||||||||||||||||||||||||||||||||||
Equity to assets | 10.10 | % | 9.92 | % | 9.84 | % | 9.51 | % | 9.79 | % | 10.10 | % | 9.79 | % | |||||||||||||||||||||
Leverage ratio | 9.87 | % | 9.91 | % | 9.90 | % | 9.50 | % | 9.27 | % | 9.87 | % | 9.27 | % | |||||||||||||||||||||
Common equity Tier 1 capital ratio | 11.16 | % | 11.27 | % | 11.28 | % | 10.60 | % | 10.55 | % | 11.16 | % | 10.55 | % | |||||||||||||||||||||
Tier 1 risk-based capital ratio | 12.02 | % | 12.15 | % | 12.20 | % | 11.57 | % | 11.54 | % | 12.02 | % | 11.54 | % | |||||||||||||||||||||
Total risk-based capital ratio | 13.78 | % | 14.10 | % | 14.34 | % | 14.80 | % | 14.87 | % | 13.78 | % | 14.87 | % | |||||||||||||||||||||
1 annualized for the quarterly periods presented |
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2 net interest income as a percentage of average interest earning assets |
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3 noninterest expense as a percentage of net interest income and noninterest income |
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4 noninterest expense as a percentage of average assets |
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5 charge-offs less recoveries |
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6 excludes loans held for sale |
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Non-GAAP Reconciliation: Tangible Book Value per Common Share | |||||||||||||||||||||||||||||||||||||
Quarterly | Year-to-Date | ||||||||||||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||||||
(Dollars in thousands) |
Fourth |
Third |
Second |
First |
Fourth |
||||||||||||||||||||||||||||||||
Goodwill | $ | 18,480 | $ | 18,480 | $ | 18,480 | $ | 18,480 | $ | 18,480 | $ | 18,480 | $ | 18,480 | |||||||||||||||||||||||
Core deposit intangibles | 550 | 574 | 598 | 622 | 646 | 550 | 646 | ||||||||||||||||||||||||||||||
Total intangibles | 19,030 | 19,054 | 19,078 | 19,102 | 19,126 | 19,030 | 19,126 | ||||||||||||||||||||||||||||||
Total Equity | 176,773 | 170,876 | 165,795 | 150,421 | 150,192 | 176,773 | 150,192 | ||||||||||||||||||||||||||||||
Less: Preferred equity | (7,834 | ) | (7,834 | ) | (7,834 | ) | (7,834 | ) | (7,834 | ) | (7,834 | ) | (7,834 | ) | |||||||||||||||||||||||
Less: Total intangibles | (19,030 | ) | (19,054 | ) | (19,078 | ) | (19,102 | ) | (19,126 | ) | (19,030 | ) | (19,126 | ) | |||||||||||||||||||||||
Tangible common equity | 149,909 | 143,988 | 138,883 | 123,485 | 123,232 | 149,909 | 123,232 | ||||||||||||||||||||||||||||||
Tangible common equity | 149,909 | 143,988 | 138,883 | 123,485 | 123,232 | 149,909 | 123,232 | ||||||||||||||||||||||||||||||
Common shares outstanding (000s) | 11,607 | 11,537 | 11,338 | 10,539 | 10,445 | 11,607 | 10,445 | ||||||||||||||||||||||||||||||
Tangible book value per common share ($) | 12.92 | 12.48 | 12.25 | 11.72 | 11.80 | 12.92 | 11.80 | ||||||||||||||||||||||||||||||