Current Quarter Highlights
- Net income of
$6.0 million or$0.51 per diluted share - Net interest margin of 4.85%
- Return on average assets and average equity of 1.40% and 9.02%
- Total loans held for investment increased
$58.1 million , or 17.6% annualized - Noninterest-bearing demand deposits represented 47.70% of total deposits at
December 31, 2019 - Provision for loan losses of
$1.2 million - Gain from sale of loans of
$947 thousand - Relocated downtown
Los Angeles branch and terminated the Little Tokyo lease agreement resulting in aggregate after-tax impairment charges of$568 thousand or$0.05 per diluted share and will result in future cost savings - Quarterly cash dividend increased by 25% to
$0.25 per share
Full Year Highlights
- Record net income of
$27.8 million , an 84.1% increase over the prior year - Diluted EPS of
$2.36 per share, a 43.9% increase over the prior year - Net interest margin of 5.24%
- Return on average assets and average equity of 1.74% and 10.93%
- Total loans held for investment increased
$123.7 million , or 9.9%, to$1.37 billion - Noninterest-bearing demand deposits increased
$79.9 million , or 14.6%, to$626.6 million atDecember 31, 2019 - Branch consolidations and relocations resulted in aggregate after-tax impairment charges of
$850 thousand or$0.07 per diluted share; expected after-tax costs savings, net of impairment charges, are$437 thousand - Cash dividends paid of
$0.85 per share
Net income for the full year of 2019 was
"Our fourth quarter performance completed a record year of earnings for First Choice,” said
“We had a very successful quarter of business development, resulting in annualized loan growth of 18% and continued inflows of core deposits,” said
STATEMENT OF INCOME
Net Interest Income
Net interest income for the fourth quarter of 2019 totaled
Net Interest Margin
Net interest margin for the fourth quarter of 2019 decreased 67 basis points to 4.85% from 5.52% for the third quarter of 2019.The decrease in the net interest margin was due primarily to a 72 basis point decrease in loan yields, including fees and discounts, lower other interest-earning assets yield, and a change in the interest-earning asset mix, partially offset by a 21 basis point decrease in funding costs. The decrease in the interest-earning assets yield and loan yield were driven by lower market interest rates resulting from the
The discount accretion from loans acquired in a business combination, including the interest income recognized on the payoff of PCI loans, of
Three Months Ended | ||||||||||||||||||||||||
Variance | ||||||||||||||||||||||||
Net interest income and net interest margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
As reported | $ | 19,208 | 4.85 | % | $ | 21,026 | 5.52 | % | $ | (1,818 | ) | (0.67 | )% | |||||||||||
Discount accretion on loans acquired in a business combination | 806 | 0.20 | % | 2,182 | 0.57 | % | (1,376 | ) | (0.37 | )% | ||||||||||||||
Net interest income and net interest margin excluding discount accretion on loans acquired in a business combination | $ | 18,402 | 4.65 | % | $ | 18,844 | 4.95 | % | $ | (442 | ) | (0.30 | )% |
Noninterest Income
Noninterest income for the fourth quarter of 2019 was
Noninterest Expense
Noninterest expense increased
The
The
The
The efficiency ratio remained strong at 54.3% in the fourth quarter of 2019, compared to 46.9% in the third quarter of 2019 that benefited primarily from accelerated discount accretion related to the early repayment of one PCI loan. The higher efficiency ratio in the fourth quarter of 2019 was impacted by lower revenue, coupled with the impairment charges related to the two branch relocations and consolidations.
Income Taxes
Income tax expense was
STATEMENT OF FINANCIAL CONDITION
Loan Portfolio
Total loans held for investment increased
New loan commitments totaled
Deposits
Total deposits decreased
Credit Quality
Nonperforming loans totaled
Loan delinquencies (30-89 days past due) totaled
The Company recorded a provision for loan losses of
CAPITAL POSITION
Capital Ratios
At
Bank Only | 2019 (1) | 2019 | 2018 | |||||||||
Total Capital (to Risk-Weighted Assets) | 14.02% | 14.37% | 14.18% | |||||||||
Tier 1 Capital (to Risk-Weighted Assets) | 13.03% | 13.42% | 13.26% | |||||||||
13.03% | 13.42% | 13.26% | ||||||||||
Tier 1 Capital (to Average Assets) | 12.01% | 12.56% | 12.03% |
(1) | Preliminary. |
Stock Repurchase Program
During the fourth quarter of 2019, the Company repurchased 13,547 shares of its common stock at an average price of
About
First Choice Bank’s website is www.FirstChoiceBankCA.com.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures in addition to results presented in accordance with GAAP. The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's results of operations and financial condition and to enhance investors' overall understanding of such results of operations and financial condition, permit investors to effectively analyze financial trends of our business activities, and enhance comparability with peers across the financial services sector. These non-GAAP financial measures are not a substitute for GAAP measures and should be read in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP financial measures is included in the accompanying financial tables.
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about management’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, shareholder value creation and tax rates. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. Actual results may differ materially from those set forth in the forward-looking statements due to a variety of factors, including the risk factors described in documents filed by the Company with the
The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company's earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.
Contacts
President & Chief Executive Officer
Executive Vice President and General Counsel
Financial Highlights and Selected Ratios (unaudited):
At or for the Three Months Ended | At or for the Year Ended | |||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||||||
Total interest and dividend income | $ | 21,953 | $ | 24,343 | $ | 22,085 | $ | 90,354 | $ | 64,377 | ||||||||||
Total interest expense | 2,745 | 3,317 | 2,583 | 12,092 | 8,710 | |||||||||||||||
Net interest income | 19,208 | 21,026 | 19,502 | 78,262 | 55,667 | |||||||||||||||
Provision for loan losses | 1,200 | 700 | 400 | 2,800 | 1,520 | |||||||||||||||
Net interest income after provision for loan losses | 18,008 | 20,326 | 19,102 | 75,462 | 54,147 | |||||||||||||||
Total noninterest income | 1,583 | 1,673 | 1,563 | 7,700 | 3,610 | |||||||||||||||
Total noninterest expense | 11,284 | 10,651 | 10,833 | 43,240 | 36,192 | |||||||||||||||
Income before taxes | 8,307 | 11,348 | 9,832 | 39,922 | 21,565 | |||||||||||||||
Income taxes | 2,349 | 3,277 | 3,119 | 12,074 | 6,435 | |||||||||||||||
NET INCOME | $ | 5,958 | $ | 8,071 | $ | 6,713 | $ | 27,848 | $ | 15,130 | ||||||||||
Total assets | $ | 1,690,324 | $ | 1,655,595 | $ | 1,622,501 | $ | 1,690,324 | $ | 1,622,501 | ||||||||||
Total loans held for investment | 1,374,675 | 1,316,620 | 1,250,981 | 1,374,675 | 1,250,981 | |||||||||||||||
Noninterest-bearing deposits | 626,569 | 666,271 | 546,713 | 626,569 | 546,713 | |||||||||||||||
Total deposits | 1,313,693 | 1,339,538 | 1,252,339 | 1,313,693 | 1,252,339 | |||||||||||||||
Dividends declared per common share | $ | 0.25 | $ | 0.20 | $ | 0.20 | $ | 0.85 | $ | 0.80 | ||||||||||
Net income per share-diluted | $ | 0.51 | $ | 0.68 | $ | 0.56 | $ | 2.36 | $ | 1.64 | ||||||||||
Return on average assets | 1.40 | % | 1.98 | % | 1.70 | % | 1.74 | % | 1.28 | % | ||||||||||
Return on average equity | 9.02 | % | 12.45 | % | 10.76 | % | 10.93 | % | 9.09 | % | ||||||||||
Return on average tangible common equity (1) | 12.95 | % | 18.03 | % | 15.91 | % | 15.90 | % | 11.38 | % | ||||||||||
Net interest margin | 4.85 | % | 5.52 | % | 5.34 | % | 5.24 | % | 4.93 | % | ||||||||||
Average loan yield | 6.21 | % | 6.93 | % | 6.49 | % | 6.54 | % | 6.20 | % | ||||||||||
Cost of deposits | 0.71 | % | 0.89 | % | 0.75 | % | 0.81 | % | 0.82 | % | ||||||||||
Cost of funds | 0.77 | % | 0.98 | % | 0.78 | % | 0.91 | % | 0.86 | % | ||||||||||
Efficiency ratio (1) | 54.3 | % | 46.9 | % | 51.4 | % | 50.3 | % | 61.1 | % | ||||||||||
Noninterest-bearing deposits to total deposits | 47.7 | % | 49.7 | % | 43.7 | % | 47.7 | % | 43.7 | % | ||||||||||
Equity to assets ratio | 15.49 | % | 15.62 | % | 15.29 | % | 15.49 | % | 15.29 | % | ||||||||||
Tangible common equity ratio (1) | 11.34 | % | 11.37 | % | 10.90 | % | 11.34 | % | 10.90 | % | ||||||||||
Book value per share | $ | 22.50 | $ | 22.20 | $ | 21.16 | $ | 22.50 | $ | 21.16 | ||||||||||
Tangible book value per share (1) | $ | 15.70 | $ | 15.38 | $ | 14.33 | $ | 15.70 | $ | 14.33 |
(1) | Non-GAAP measure. See GAAP to non-GAAP Reconciliation. |
Condensed Consolidated Balance Sheets (unaudited)
2019 | 2019 | 2018 | ||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 27,359 | $ | 13,918 | $ | 17,874 | ||||||
Interest-bearing deposits at other banks | 134,442 | 166,697 | 176,502 | |||||||||
Federal funds sold | — | — | 3,000 | |||||||||
Total cash and cash equivalents | 161,801 | 180,615 | 197,376 | |||||||||
Investment securities, available-for-sale | 26,653 | 27,344 | 29,543 | |||||||||
Investment securities, held-to-maturity | 5,056 | 5,066 | 5,322 | |||||||||
Equity securities, at fair value | 2,694 | 2,681 | 2,538 | |||||||||
Restricted stock investments, at cost | 12,986 | 12,970 | 12,855 | |||||||||
Loans held for sale | 7,659 | 11,906 | 28,022 | |||||||||
Total loans held for investment | 1,374,675 | 1,316,620 | 1,250,981 | |||||||||
Allowance for loan losses | (13,522 | ) | (12,340 | ) | (11,056 | ) | ||||||
Total loans held for investment, net | 1,361,153 | 1,304,280 | 1,239,925 | |||||||||
Accrued interest receivable | 5,451 | 5,477 | 5,069 | |||||||||
Premises and equipment | 1,542 | 1,796 | 1,973 | |||||||||
Servicing asset | 3,202 | 3,370 | 3,186 | |||||||||
Deferred taxes | 6,163 | 6,397 | 8,666 | |||||||||
73,425 | 73,425 | 73,425 | ||||||||||
Core deposit intangible | 5,728 | 5,986 | 6,576 | |||||||||
Other assets | 16,811 | 14,282 | 8,025 | |||||||||
TOTAL ASSETS | $ | 1,690,324 | $ | 1,655,595 | $ | 1,622,501 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Deposits: | ||||||||||||
Noninterest-bearing demand | $ | 626,569 | $ | 666,271 | $ | 546,713 | ||||||
Money market, interest checking and savings | 514,366 | 404,518 | 465,123 | |||||||||
Time deposits | 172,758 | 268,749 | 240,503 | |||||||||
Total deposits | 1,313,693 | 1,339,538 | 1,252,339 | |||||||||
Borrowings | 90,000 | 30,000 | 104,998 | |||||||||
Senior secured debt | 9,600 | 13,100 | 8,450 | |||||||||
Accrued interest payable and other liabilities | 15,226 | 14,287 | 8,645 | |||||||||
Total liabilities | 1,428,519 | 1,396,925 | 1,374,432 | |||||||||
Total shareholders’ equity | 261,805 | 258,670 | 248,069 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,690,324 | $ | 1,655,595 | $ | 1,622,501 | ||||||
Shares outstanding | 11,635,531 | 11,652,582 | 11,726,074 | |||||||||
Book value per share | $ | 22.50 | $ | 22.20 | $ | 21.16 | ||||||
Tangible book value per share (1) | $ | 15.70 | $ | 15.38 | $ | 14.33 |
(1) | Non-GAAP measure. See GAAP to non-GAAP Reconciliation. |
Condensed Consolidated Statements of Income (unaudited)
Three Months Ended | Year Ended | |||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||||||
INTEREST and DIVIDEND INCOME | ||||||||||||||||||||
Interest and fees on loans | $ | 20,741 | $ | 23,206 | $ | 20,838 | $ | 86,207 | $ | 61,075 | ||||||||||
Interest on investment securities | 194 | 208 | 224 | 853 | 922 | |||||||||||||||
Interest on deposits at other financial institutions | 805 | 701 | 697 | 2,405 | 1,872 | |||||||||||||||
Dividends on FHLB and other stock | 213 | 228 | 326 | 889 | 508 | |||||||||||||||
Total interest and dividend income | 21,953 | 24,343 | 22,085 | 90,354 | 64,377 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Interest on savings, interest checking and money market accounts | 1,222 | 1,283 | 1,353 | 4,998 | 4,364 | |||||||||||||||
Interest on time deposits | 1,200 | 1,605 | 1,078 | 5,273 | 3,686 | |||||||||||||||
Interest on borrowings | 323 | 429 | 152 | 1,821 | 660 | |||||||||||||||
Total interest expense | 2,745 | 3,317 | 2,583 | 12,092 | 8,710 | |||||||||||||||
Net interest income | 19,208 | 21,026 | 19,502 | 78,262 | 55,667 | |||||||||||||||
Provision for loan losses | 1,200 | 700 | 400 | 2,800 | 1,520 | |||||||||||||||
Net interest income after provision for loan losses | 18,008 | 20,326 | 19,102 | 75,462 | 54,147 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Gain on sale of loans | 947 | 528 | 639 | 3,674 | 1,505 | |||||||||||||||
Service charges and fees on deposit accounts | 363 | 475 | 437 | 1,942 | 1,241 | |||||||||||||||
Net servicing fees | 87 | 242 | 191 | 850 | 509 | |||||||||||||||
Other income | 186 | 428 | 296 | 1,234 | 355 | |||||||||||||||
Total noninterest income | 1,583 | 1,673 | 1,563 | 7,700 | 3,610 | |||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Salaries and employee benefits | 6,139 | 6,472 | 5,530 | 25,691 | 18,077 | |||||||||||||||
Occupancy and equipment | 1,893 | 1,097 | 1,070 | 5,406 | 3,049 | |||||||||||||||
Data processing | 903 | 718 | 757 | 2,864 | 2,293 | |||||||||||||||
Professional fees | 396 | 392 | 515 | 1,633 | 1,598 | |||||||||||||||
Office, postage and telecommunications | 252 | 253 | 297 | 1,032 | 938 | |||||||||||||||
Deposit insurance and regulatory assessments | 47 | 30 | 121 | 392 | 460 | |||||||||||||||
Loan related | 165 | 244 | 155 | 694 | 483 | |||||||||||||||
Customer service related | 568 | 437 | 416 | 1,755 | 865 | |||||||||||||||
Merger, integration and public company registration costs | — | — | 859 | — | 5,385 | |||||||||||||||
Amortization of core deposit intangible | 258 | 197 | 199 | 848 | 332 | |||||||||||||||
Other expenses | 663 | 811 | 914 | 2,925 | 2,712 | |||||||||||||||
Total noninterest expense | 11,284 | 10,651 | 10,833 | 43,240 | 36,192 | |||||||||||||||
Income before taxes | 8,307 | 11,348 | 9,832 | 39,922 | 21,565 | |||||||||||||||
Income taxes | 2,349 | 3,277 | 3,119 | 12,074 | 6,435 | |||||||||||||||
Net income | $ | 5,958 | $ | 8,071 | $ | 6,713 | $ | 27,848 | $ | 15,130 | ||||||||||
Net income per share-diluted | $ | 0.51 | $ | 0.68 | $ | 0.56 | $ | 2.36 | $ | 1.64 | ||||||||||
Weighted average shares - diluted | 11,607,176 | 11,659,146 | 11,880,163 | 11,687,089 | 9,143,242 |
Average Balance Sheets and Yield Analysis
Three Months Ended | ||||||||||||||||||||||||||||||||||||
Average Balance | Interest Income / Expense | Yield / Cost | Average Balance | Interest Income / Expense | Yield / Cost | Average Balance | Interest Income / Expense | Yield / Cost | ||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||
Loans (1) | $ | 1,325,748 | $ | 20,741 | 6.21 | % | $ | 1,328,088 | $ | 23,206 | 6.93 | % | $ | 1,274,252 | $ | 20,838 | 6.49 | % | ||||||||||||||||||
Investment securities | 34,483 | 194 | 2.23 | % | 35,651 | 208 | 2.31 | % | 35,889 | 224 | 2.48 | % | ||||||||||||||||||||||||
Deposits at other financial institutions | 198,082 | 805 | 1.61 | % | 134,557 | 701 | 2.07 | % | 120,553 | 682 | 2.24 | % | ||||||||||||||||||||||||
Federal funds sold/resale agreements | — | — | N/A | — | — | N/A | 3,000 | 15 | 1.98 | % | ||||||||||||||||||||||||||
FHLB and other bank stock | 14,078 | 213 | 6.00 | % | 13,988 | 228 | 6.47 | % | 13,890 | 326 | 9.31 | % | ||||||||||||||||||||||||
Total interest-earning assets | 1,572,391 | 21,953 | 5.54 | % | 1,512,284 | 24,343 | 6.39 | % | 1,447,584 | 22,085 | 6.05 | % | ||||||||||||||||||||||||
Noninterest-earning assets | 116,193 | 108,520 | 114,591 | |||||||||||||||||||||||||||||||||
Total assets | $ | 1,688,584 | $ | 1,620,804 | $ | 1,562,175 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Interest checking | $ | 135,732 | $ | 324 | 0.95 | % | $ | 116,107 | $ | 337 | 1.15 | % | $ | 148,935 | $ | 407 | 1.08 | % | ||||||||||||||||||
Money market accounts | 301,552 | 841 | 1.11 | % | 267,493 | 890 | 1.32 | % | 281,829 | 874 | 1.23 | % | ||||||||||||||||||||||||
Savings accounts | 30,243 | 57 | 0.75 | % | 29,070 | 56 | 0.76 | % | 41,358 | 72 | 0.69 | % | ||||||||||||||||||||||||
Time deposits | 131,603 | 567 | 1.71 | % | 147,568 | 676 | 1.82 | % | 201,523 | 862 | 1.70 | % | ||||||||||||||||||||||||
Brokered time deposits | 103,094 | 633 | 2.44 | % | 138,682 | 929 | 2.66 | % | 53,382 | 216 | 1.61 | % | ||||||||||||||||||||||||
Total interest-bearing deposits | 702,224 | 2,422 | 1.37 | % | 698,920 | 2,888 | 1.64 | % | 727,027 | 2,431 | 1.33 | % | ||||||||||||||||||||||||
Borrowings | 37,826 | 176 | 1.85 | % | 48,263 | 253 | 2.08 | % | 4,321 | 26 | 2.39 | % | ||||||||||||||||||||||||
Senior secured notes | 11,171 | 147 | 5.22 | % | 12,267 | 176 | 5.69 | % | 8,727 | 126 | 5.73 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities | 751,221 | 2,745 | 1.45 | % | 759,450 | 3,317 | 1.73 | % | 740,075 | 2,583 | 1.38 | % | ||||||||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Demand deposits | 658,654 | 590,212 | 566,277 | |||||||||||||||||||||||||||||||||
Other liabilities | 16,793 | 13,984 | 8,297 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 261,916 | 257,158 | 247,526 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,688,584 | $ | 1,620,804 | $ | 1,562,175 | ||||||||||||||||||||||||||||||
Net interest spread | $ | 19,208 | 4.09 | % | $ | 21,026 | 4.66 | % | $ | 19,502 | 4.67 | % | ||||||||||||||||||||||||
Net interest margin | 4.85 | % | 5.52 | % | 5.34 | % | ||||||||||||||||||||||||||||||
Total deposits | $ | 1,360,878 | $ | 2,422 | 0.71 | % | $ | 1,289,132 | $ | 2,888 | 0.89 | % | $ | 1,293,304 | $ | 2,431 | 0.75 | % | ||||||||||||||||||
Total funding sources | $ | 1,409,875 | $ | 2,745 | 0.77 | % | $ | 1,349,662 | $ | 3,317 | 0.98 | % | $ | 1,306,352 | $ | 2,583 | 0.78 | % |
(1) Average loans include net discounts and net deferred loan fees and costs. Interest income on loans includes
Year Ended | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Average Balance | Interest Income / Expense | Yield / Cost | Average Balance | Interest Income / Expense | Yield / Cost | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans (1) | $ | 1,317,345 | $ | 86,207 | 6.54 | % | $ | 985,513 | $ | 61,075 | 6.20 | % | ||||||||||||
Investment securities | 35,883 | 853 | 2.38 | % | 37,642 | 922 | 2.45 | % | ||||||||||||||||
Deposits at other financial institutions | 124,506 | 2,375 | 1.91 | % | 98,353 | 1,847 | 1.88 | % | ||||||||||||||||
Federal funds sold/resale agreements | 1,243 | 30 | 2.41 | % | 1,258 | 25 | 1.99 | % | ||||||||||||||||
FHLB and other bank stock | 13,973 | 889 | 6.36 | % | 7,043 | 508 | 7.21 | % | ||||||||||||||||
Total interest-earning assets | 1,492,950 | 90,354 | 6.05 | % | 1,129,809 | 64,377 | 5.70 | % | ||||||||||||||||
Noninterest-earning assets | 110,650 | 54,500 | ||||||||||||||||||||||
$ | 1,603,600 | $ | 1,184,309 | |||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest checking | $ | 120,494 | $ | 1,268 | 1.05 | % | $ | 153,403 | $ | 1,679 | 1.09 | % | ||||||||||||
Money market accounts | 278,075 | 3,498 | 1.26 | % | 196,871 | 2,275 | 1.16 | % | ||||||||||||||||
Savings accounts | 30,608 | 232 | 0.76 | % | 51,254 | 410 | 0.80 | % | ||||||||||||||||
Time deposits | 149,921 | 2,647 | 1.77 | % | 176,761 | 2,912 | 1.65 | % | ||||||||||||||||
Brokered time deposits | 107,958 | 2,626 | 2.43 | % | 52,879 | 774 | 1.46 | % | ||||||||||||||||
Total interest-bearing deposits | 687,056 | 10,271 | 1.49 | % | 631,168 | 8,050 | 1.28 | % | ||||||||||||||||
Borrowings | 49,914 | 1,143 | 2.29 | % | 23,176 | 412 | 1.78 | % | ||||||||||||||||
Senior secured notes | 11,933 | 678 | 5.68 | % | 4,544 | 248 | 5.46 | % | ||||||||||||||||
Total interest-bearing liabilities | 748,903 | 12,092 | 1.61 | % | 658,888 | 8,710 | 1.32 | % | ||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||
Demand deposits | 586,508 | 353,157 | ||||||||||||||||||||||
Other liabilities | 13,419 | 5,790 | ||||||||||||||||||||||
Shareholders’ equity | 254,770 | 166,474 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,603,600 | $ | 1,184,309 | ||||||||||||||||||||
Net interest spread | $ | 78,262 | 4.44 | % | $ | 55,667 | 4.38 | % | ||||||||||||||||
Net interest margin | 5.24 | % | 4.93 | % | ||||||||||||||||||||
Total deposits | $ | 1,273,564 | $ | 10,271 | 0.81 | % | $ | 984,325 | $ | 8,050 | 0.82 | % | ||||||||||||
Total funding sources | $ | 1,335,411 | $ | 12,092 | 0.91 | % | $ | 1,012,045 | $ | 8,710 | 0.86 | % |
(1) Average loans include net discounts and net deferred loan fees and costs. Interest income on loans includes
Loan Composition
Amount | Percentage of Total | Amount | Percentage of Total | Amount | Percentage of Total | |||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Construction and land development | $ | 249,504 | 18.1 | % | $ | 221,857 | 16.8 | % | $ | 184,177 | 14.7 | % | ||||||||||||
Real estate: | ||||||||||||||||||||||||
Residential | 43,736 | 3.2 | % | 48,896 | 3.7 | % | 57,443 | 4.6 | % | |||||||||||||||
Commercial real estate - owner occupied | 171,595 | 12.5 | % | 171,360 | 13.0 | % | 179,494 | 14.3 | % | |||||||||||||||
Commercial real estate - non-owner occupied | 423,823 | 30.8 | % | 401,710 | 30.6 | % | 401,665 | 32.2 | % | |||||||||||||||
Commercial and industrial | 309,011 | 22.5 | % | 311,205 | 23.6 | % | 281,718 | 22.5 | % | |||||||||||||||
SBA loans | 177,633 | 12.9 | % | 161,608 | 12.3 | % | 146,462 | 11.7 | % | |||||||||||||||
Consumer | 430 | — | % | 424 | — | % | 159 | — | % | |||||||||||||||
Total loans held for investment, net of discounts | $ | 1,375,732 | 100.0 | % | $ | 1,317,060 | 100.0 | % | $ | 1,251,118 | 100.0 | % | ||||||||||||
Net deferred loan fees | (1,057 | ) | (440 | ) | (137 | ) | ||||||||||||||||||
Total loans held for investment | $ | 1,374,675 | $ | 1,316,620 | $ | 1,250,981 | ||||||||||||||||||
Allowance for loan losses | (13,522 | ) | (12,340 | ) | (11,056 | ) | ||||||||||||||||||
Total loans held for investment, net | $ | 1,361,153 | $ | 1,304,280 | $ | 1,239,925 |
Total loans held for investment
(dollars in thousands) | ||||||||||||
Gross loans held for investment (1) | $ | 1,385,142 | $ | 1,328,031 | $ | 1,263,891 | ||||||
Unamortized net discounts(2) | (9,410 | ) | (10,971 | ) | (12,773 | ) | ||||||
Net unamortized deferred origination fees | (1,057 | ) | (440 | ) | (137 | ) | ||||||
Total loans held for investment | $ | 1,374,675 | $ | 1,316,620 | $ | 1,250,981 |
(1) | Gross loans include purchased credit impaired (“PCI”) loans with a net carrying value of |
(2) | Unamortized net discounts include discounts related to the retained portion of SBA loans and net discounts on Non-PCI acquired loans. At |
Allowance for Loan losses
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Balance, beginning of period | $ | 12,340 | $ | 12,053 | $ | 10,656 | $ | 11,056 | $ | 10,497 | ||||||||||
Provision for loan losses | 1,200 | 700 | 400 | 2,800 | 1,520 | |||||||||||||||
Charge-offs | (18 | ) | (437 | ) | (17 | ) | (579 | ) | (1,149 | ) | ||||||||||
Recoveries | — | 24 | 17 | 245 | 188 | |||||||||||||||
Net charge-offs | (18 | ) | (413 | ) | — | (334 | ) | (961 | ) | |||||||||||
Balance, end of period | $ | 13,522 | $ | 12,340 | $ | 11,056 | $ | 13,522 | $ | 11,056 | ||||||||||
Annualized net charge-offs to average loans | (0.01 | )% | (0.12 | )% | — | % | (0.03 | )% | (0.10 | )% |
Credit Quality (1)
2019 | 2019 | 2018 | ||||||||||
(dollars in thousands) | ||||||||||||
Non-accrual loans | 11,107 | 7,242 | 1,128 | |||||||||
Troubled debt restructurings on non-accrual | 158 | 166 | 594 | |||||||||
Total nonperforming loans | 11,265 | 7,408 | 1,722 | |||||||||
Total nonperforming assets | $ | 11,265 | $ | 7,408 | $ | 1,722 | ||||||
Troubled debt restructurings - on accrual | $ | 321 | $ | 324 | $ | 327 | ||||||
Nonperforming loans as a percentage of total loans held for investment | 0.82 | % | 0.56 | % | 0.14 | % | ||||||
Nonperforming loans as a percentage of total assets | 0.67 | % | 0.45 | % | 0.11 | % | ||||||
Allowance for loan losses as a percentage of total loans held for investment | 0.98 | % | 0.94 | % | 0.88 | % | ||||||
Allowance for loan losses as a percentage of nonperforming loans | 120.04 | % | 166.58 | % | 642.04 | % | ||||||
Accruing loans held for investment past due 30 - 89 days | $ | 1,767 | $ | 4 | $ | 484 |
(1) Excludes purchased credit impaired loans with a carrying value of
GAAP to Non-GAAP Reconciliation
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: (1) efficiency ratio, (2) adjusted efficiency ratio, (3) adjusted net income, (4) average tangible common equity, (5) adjusted return on average assets, (6) adjusted return on average equity, (7) return on average tangible common equity, (8) adjusted return on average tangible common equity, (9) tangible common equity, (10) tangible assets, (11) tangible common equity to tangible asset ratio, and (12) tangible book value per share. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.
For the Three Months Ended | Year Ended | |||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Efficiency Ratio | ||||||||||||||||||||
Noninterest expense (numerator) | $ | 11,284 | $ | 10,651 | $ | 10,833 | $ | 43,240 | $ | 36,192 | ||||||||||
Less: merger, integration and public company registration costs | — | — | 859 | — | 5,385 | |||||||||||||||
Adjusted noninterest expense (numerator) | $ | 11,284 | $ | 10,651 | $ | 9,974 | $ | 43,240 | $ | 30,807 | ||||||||||
Net interest income | $ | 19,208 | $ | 21,026 | $ | 19,502 | $ | 78,262 | $ | 55,667 | ||||||||||
Plus: Noninterest income | 1,583 | 1,673 | 1,563 | 7,700 | 3,610 | |||||||||||||||
Total net interest income and noninterest income (denominator) | $ | 20,791 | $ | 22,699 | $ | 21,065 | $ | 85,962 | $ | 59,277 | ||||||||||
Efficiency ratio | 54.3 | % | 46.9 | % | 51.4 | % | 50.3 | % | 61.1 | % | ||||||||||
Adjusted efficiency ratio | 54.3 | % | 46.9 | % | 47.3 | % | 50.3 | % | 52.0 | % | ||||||||||
Return on Average Assets, Equity, Tangible Equity | ||||||||||||||||||||
Net income | $ | 5,958 | $ | 8,071 | $ | 6,713 | $ | 27,848 | $ | 15,130 | ||||||||||
Add: After-tax merger, integration and public company registration costs | — | — | 606 | — | 4,029 | |||||||||||||||
Adjusted net income | $ | 5,958 | $ | 8,071 | $ | 7,319 | $ | 27,848 | $ | 19,159 | ||||||||||
Average assets | $ | 1,688,584 | $ | 1,620,804 | $ | 1,562,175 | $ | 1,603,600 | $ | 1,184,309 | ||||||||||
Average shareholders’ equity | 261,916 | 257,158 | 247,526 | 254,770 | 166,474 | |||||||||||||||
Less: Average intangible assets | 79,336 | 79,535 | 80,125 | 79,631 | 33,575 | |||||||||||||||
Average tangible common equity | $ | 182,580 | $ | 177,623 | $ | 167,401 | $ | 175,139 | $ | 132,899 | ||||||||||
Return on average assets | 1.40 | % | 1.98 | % | 1.70 | % | 1.74 | % | 1.28 | % | ||||||||||
Adjusted return on average assets | 1.40 | % | 1.98 | % | 1.86 | % | 1.74 | % | 1.62 | % | ||||||||||
Return on average equity | 9.02 | % | 12.45 | % | 10.76 | % | 10.93 | % | 9.09 | % | ||||||||||
Adjusted return on average equity | 9.02 | % | 12.45 | % | 11.73 | % | 10.93 | % | 11.51 | % | ||||||||||
Return on average tangible common equity | 12.95 | % | 18.03 | % | 15.91 | % | 15.90 | % | 11.38 | % | ||||||||||
Adjusted return on average tangible common equity | 12.95 | % | 18.03 | % | 17.35 | % | 15.90 | % | 14.42 | % |
Year Ended | ||||||||||||
2019 | 2019 | 2018 | ||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||
Tangible Common Equity Ratio/Tangible Book Value Per Share | ||||||||||||
Shareholders’ equity | $ | 261,805 | $ | 258,670 | $ | 248,069 | ||||||
Less: Intangible assets | 79,153 | 79,411 | 80,001 | |||||||||
Tangible common equity | $ | 182,652 | $ | 179,259 | $ | 168,068 | ||||||
Total assets | $ | 1,690,324 | $ | 1,655,595 | $ | 1,622,501 | ||||||
Less: Intangible assets | 79,153 | 79,411 | 80,001 | |||||||||
Tangible assets | $ | 1,611,171 | $ | 1,576,184 | $ | 1,542,500 | ||||||
Equity to assets ratio | 15.49 | % | 15.62 | % | 15.29 | % | ||||||
Tangible common equity to tangible asset ratio | 11.34 | % | 11.37 | % | 10.90 | % | ||||||
Shares outstanding | 11,635,531 | 11,652,582 | 11,726,074 | |||||||||
Book value per share | $ | 22.50 | $ | 22.20 | $ | 21.16 | ||||||
Tangible book value per share | $ | 15.70 | $ | 15.38 | $ | 14.33 |
Source:
2020 GlobeNewswire, Inc., source