Fourth Quarter 2021 Highlights
- Record Net Income: Net income totaled
$6.8 million for the quarter endedDecember 31, 2021 , or$1.18 per diluted common share compared to net income of$6.1 million or$1.04 per diluted common share for the quarter endedDecember 31, 2020 and$6.4 million or$1.12 per diluted common share for the quarter endedSeptember 30, 2021 . - Continued Solid Profitability: Return on average assets ("ROAA") and return on average common equity ("ROACE") were 1.18% and 13.00% for the three months ended
December 31, 2021 compared to 1.18% and 12.51% for the three months endedDecember 31, 2020 and 1.17% and 12.45% for the three months endedSeptember 30, 2021 .
Pre-tax, pre-provision ("PTPP") ROAA and PTPP ROACE remained strong at 1.57% and 17.31% for the quarter endedDecember 31, 2021 compared to 1.71% and 18.08% for the quarter endedDecember 31, 2020 and 1.57% and 16.65% for the quarter endedSeptember 30, 2021 .
- Robust Portfolio Loan Growth: Gross portfolio loans increased to
$1,578.9 million , an increase of$45.9 million or 12.0% annualized, compared to the prior quarter. Portfolio loans increased$74.7 million or 5.0% during the year endedDecember 31, 2021 . The loan pipeline atDecember 31, 2021 was$160.0 million compared to$192 .0 million atSeptember 30, 2021 . - Continued Growth of Core Deposits: Transaction deposits increased
$63.8 million or 15.33% annualized during the fourth quarter of 2021. Overall transaction deposits increased$337.0 million or 24.21% from$1,391.7 million atDecember 31, 2020 to$1,728.7 million atDecember 31, 2021 . The Bank increased noninterest-bearing accounts by$83.7 million to$445.8 million or 21.68% of deposits atDecember 31, 2021 from 20.74% of deposits atDecember 31, 2020 . - Resumption of Stock Repurchases: On
December 9, 2021 , the Company announced its Board of Directors approved the resumption of repurchases allowed under the 2020 Stock Purchase Plan. The Company may repurchase the 99,450 shares remaining under theOctober 2020 stock repurchase plan using up to$4 .0 million in the aggregate and up to$1 .5 million in the aggregate on a quarterly basis. During the month ofDecember 2021 , the Company repurchased 8,737 shares at an average price of$38.34 per share. - Strong Asset Quality: Non-accrual loans, OREO and TDRs were
$8.1 million or 0.35% of total assets atDecember 31, 2021 compared to$7.2 million or 0.31% of total assets and$21.9 million or 1.08% of total assets atSeptember 30, 2021 andDecember 31, 2020 , respectively. Classified assets decreased$17 .2 million to$5.2 million atDecember 31, 2021 from$22.4 million atDecember 31, 2020 . The Company had no COVID-19 deferred loans atDecember 31, 2021 . - Common Dividend Increase: On
November 30, 2021 , the Company announced a 17% increase of its quarterly per share dividend from$0.15 to$0.175 for the fourth quarter dividend that was paid in the first quarter of 2022.
Management Commentary
“Record earnings in the fourth quarter of 2021 contributed to a record year of earnings and growth at
“Investments in technology have begun to deliver growth in non-interest income, increased efficiency and improved customer service,” stated
During the second quarter of 2021, the Bank introduced a new residential mortgage program and a retail and commercial credit card program that merge the technology and expertise of two proven FinTech firms with our business development team's demonstrated capabilities. The Company expects these programs to improve non-interest income and interest income beginning in 2022-2023. The Bank's credit card program balances increased from approximately
The Bank’s expansion into
On
Effective
On
During the third quarter of 2021, the Company completed its repurchase of
Results of Operations
(UNAUDITED) | |||||||||||||||
Three Months Ended | |||||||||||||||
(dollars in thousands) | 2021 | 2020 | $ Change | % Change | |||||||||||
Interest and dividend income | $ | 17,778 | $ | 17,913 | $ | (135 | ) | (0.8 | )% | ||||||
Interest expense | 897 | 1,941 | (1,044 | ) | (53.8 | )% | |||||||||
Net interest income | 16,881 | 15,972 | 909 | 5.7 | % | ||||||||||
Provision for loan losses | — | 600 | (600 | ) | (100.0 | )% | |||||||||
Noninterest income | 2,290 | 2,370 | (80 | ) | (3.4 | )% | |||||||||
Noninterest expense | 10,179 | 9,472 | 707 | 7.5 | % | ||||||||||
Income before income taxes | 8,992 | 8,270 | 722 | 8.7 | % | ||||||||||
Income tax expense | 2,241 | 2,131 | 110 | 5.2 | % | ||||||||||
Net income | $ | 6,751 | $ | 6,139 | $ | 612 | 10.0 | % |
(UNAUDITED) | |||||||||||||||
Year Ended | |||||||||||||||
(dollars in thousands) | 2021 | 2020 | $ Change | % Change | |||||||||||
Interest and dividend income | $ | 70,559 | $ | 71,073 | $ | (514 | ) | (0.7 | )% | ||||||
Interest expense | 4,125 | 10,156 | (6,031 | ) | (59.4 | )% | |||||||||
Net interest income | 66,434 | 60,917 | 5,517 | 9.1 | % | ||||||||||
Provision for loan losses | 586 | 10,700 | (10,114 | ) | (94.5 | )% | |||||||||
Noninterest income | 7,906 | 8,416 | (510 | ) | (6.1 | )% | |||||||||
Noninterest expense | 39,152 | 38,003 | 1,149 | 3.0 | % | ||||||||||
Income before income taxes | 34,602 | 20,630 | 13,972 | 67.7 | % | ||||||||||
Income tax expense | 8,716 | 4,494 | 4,222 | 94.0 | % | ||||||||||
Net income | $ | 25,886 | $ | 16,136 | $ | 9,750 | 60.4 | % | |||||||
Net Interest Income
Net interest income increased for the three months ended
Net interest income increased for the twelve months ended
Excluding the recognition of interest income related to
For the fourth quarter of 2021 interest income decreased compared to the fourth quarter of 2020 as asset yields declined and the accelerated interest recognition following the forgiveness of
The Company's net interest margin was stable in 2020 after adjusting for
In the last six months of 2020, FHLB advances of
Noninterest Income
Noninterest income decreased for the three months ended
Noninterest income decreased for the twelve months ended
Noninterest Expense
Noninterest expense for the three months ended
During the first quarter of 2021, the Company reported an expense of
The Company’s efficiency ratio was 53.10% for the three months ended
Including the wire transfer fraud expense, the Company quarterly expense run rate for the twelve months ended
Noninterest expense increased
Compensation and benefits for the twelve months ended
The Company’s efficiency ratio was 52.67% for the twelve months ended
Income Tax Expense
For the three months and year ended
(UNAUDITED) | |||||||
For the Year Ended | |||||||
(dollars in thousands) | Tax Provision | Effective Tax Rate | |||||
Income tax apportionment adjustment | $ | (743 | ) | (3.6 | )% | ||
Income taxes before apportionment adjustment | 5,237 | 25.4 | |||||
Income tax expense as reported | $ | 4,494 | 21.8 | % | |||
Income before income taxes | $ | 20,630 | |||||
Balance Sheet
Assets
Total assets increased
During the fourth quarter of 2021, total net loans, which include portfolio loans and
Non-owner occupied commercial real estate as a percentage of risk-based capital at
Funding
Total deposits increased
During the twelve months ended
The Company's common equity to assets ratio decreased to 8.94% at
In
Asset Quality
Allowance for loan losses ("ALLL") and provision for loan losses ("PLL") and Non-Performing Assets
The Company's allowance methodology considers quantitative historical loss factors and qualitative factors to determine the estimated level of incurred losses in the Company's loan portfolios. The ALLL increased in 2020 primarily due to the economic effects of the COVID-19 pandemic and continues to provide for economic uncertainty. ALLL levels decreased to 1.17% of portfolio loans at
The Company recorded
The Company's general allowance was stable at
Management believes that loans included in the COVID-19 deferral program in 2020 and 2021 are more likely to default in the future and that the identification and resolution of problem credits could be delayed. As of
Gross
Management believes that the allowance is adequate at
During 2020, classified assets decreased
Classified assets decreased
Non-accrual loans and OREO to total gross portfolio loans and OREO decreased 94 basis points from 1.42% at December 31, 2020 to 0.48% at December 31, 2021. Non-accrual loans, OREO and TDRs to total assets decreased 73 basis points from 1.08% at December 31, 2020 to 0.35% at December 31, 2021.
Non-accrual loans decreased
The Company is planning for adoption of the current expected credit loss (“CECL”) model or ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments". Our CECL model has been substantially developed and the third-party model validation is complete. We conducted parallel runs of the CECL loss estimation model and the Company's existing incurred loss model throughout 2021. We are refining the qualitative and forecasting components of the CECL model. ASU 2016-13 will also require the establishment of an allowance for expected credit losses for certain debt securities and other financial assets.
The Company is required to adopt ASU No. 2016-13 for fiscal years beginning after
About
Use of non-GAAP Financial Measures - Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. The Company’s management uses these non-GAAP financial measures, and believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
Forward-looking Statements - This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements include, without limitation, those relating to the Company’s and the Bank’s future growth and management’s outlook or expectations for revenue, assets, asset quality, profitability, business prospects, net interest margin, non-interest revenue, allowance for loan losses, the level of credit losses from lending, liquidity levels, capital levels, or other future financial or business performance strategies or expectations, and any statements of the plans and objectives of management for future operations products or services, including the expected benefits from, and/or the execution of integration plans relating to any acquisition we have undertaking or that we undertake in the future; plans and cost savings regarding branch closings or consolidation; projections related to certain financial metrics; expected benefits of programs we introduce, including residential mortgage programs and retail and commercial credit card programs; and any statement of expectation or belief, and any assumptions underlying the foregoing. These forward-looking statements express management’s current expectations or forecasts of future events, results and conditions, and by their nature are subject to and involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. Factors that might cause actual results to differ materially from those made in such statements include, but are not limited to: risks, uncertainties and other factors relating to the COVID-19 pandemic (including the length of time that the pandemic continues, the ability of states and local governments to successfully implement the lifting of restrictions on movement and the potential imposition of further restrictions on movement and travel in the future, the effect of the pandemic on the general economy and on the businesses of our borrowers and their ability to make payments on their obligations; the remedial actions and stimulus measures adopted by federal, state and local governments, and the inability of employees to work due to illness, quarantine, or government mandates); the synergies and other expected financial benefits from any acquisition that we have undertaken or may undertake in the future; may or may not be realized within the expected time frames; changes in the Company's or the Bank's strategy, costs or difficulties related to integration matters might be greater than expected; availability of and costs associated with obtaining adequate and timely sources of liquidity; the ability to maintain credit quality; general economic trends; changes in interest rates; loss of deposits and loan demand to other financial institutions; substantial changes in financial markets; changes in real estate value and the real estate market; regulatory changes; the impact of government shutdowns or sequestration; the possibility of unforeseen events affecting the industry generally; the uncertainties associated with newly developed or acquired operations; the outcome of pending or threatened litigation, or of matters before regulatory agencies, whether currently existing or commencing in the future; market disruptions and other effects of terrorist activities; and the matters described in “Item 1A Risk Factors” in the Company’s Annual Report on Form 10-K for the Year Ended
Data is unaudited as of
CONTACTS:
888.745.2265
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)
CONDENSED CONSOLIDATED INCOME STATEMENT
(dollars in thousands, except per share amounts) | Three Months Ended | |||||||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
Interest and Dividend Income | ||||||||||||||||||||
Loans, including fees | $ | 16,222 | $ | 16,342 | $ | 16,320 | $ | 16,592 | $ | 16,776 | ||||||||||
Interest and dividends on securities | 1,531 | 1,296 | 1,101 | 1,064 | 1,091 | |||||||||||||||
Interest on deposits with banks | 25 | 21 | 23 | 22 | 46 | |||||||||||||||
Total Interest and Dividend Income | 17,778 | 17,659 | 17,444 | 17,678 | 17,913 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 565 | 594 | 640 | 802 | 1,166 | |||||||||||||||
Long-term debt | 332 | 456 | 369 | 367 | 775 | |||||||||||||||
Total Interest Expense | 897 | 1,050 | 1,009 | 1,169 | 1,941 | |||||||||||||||
Net Interest Income (NII) | 16,881 | 16,609 | 16,435 | 16,509 | 15,972 | |||||||||||||||
Provision for loan losses | — | — | 291 | 295 | 600 | |||||||||||||||
NII After Provision For Loan Losses | 16,881 | 16,609 | 16,144 | 16,214 | 15,372 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Loan appraisal, credit, and miscellaneous charges | 257 | 29 | 44 | 198 | 76 | |||||||||||||||
Gain on sale of asset | — | — | 68 | — | — | |||||||||||||||
Net gains on sale of investment securities | — | — | — | 586 | 714 | |||||||||||||||
Unrealized (losses) gains on equity securities | (45 | ) | (22 | ) | 13 | (85 | ) | (14 | ) | |||||||||||
Loss on premises and equipment held for sale | (5 | ) | (20 | ) | — | — | — | |||||||||||||
Income from bank owned life insurance | 219 | 220 | 218 | 214 | 220 | |||||||||||||||
Service charges | 1,235 | 987 | 892 | 1,187 | 960 | |||||||||||||||
Referral fee income | 574 | 176 | 621 | 451 | 414 | |||||||||||||||
Net gain on sale of loans originated for sale | 55 | 30 | — | — | — | |||||||||||||||
Loss on sale of loans | — | — | — | (191 | ) | — | ||||||||||||||
Total Noninterest Income | 2,290 | 1,400 | 1,856 | 2,360 | 2,370 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Compensation and benefits | 5,265 | 5,650 | 5,332 | 4,788 | 4,552 | |||||||||||||||
OREO valuation allowance and expenses | 767 | 20 | 488 | 181 | 897 | |||||||||||||||
Sub Total | 6,032 | 5,670 | 5,820 | 4,969 | 5,449 | |||||||||||||||
Operating Expenses | ||||||||||||||||||||
Occupancy expense | 656 | 731 | 688 | 761 | 806 | |||||||||||||||
Advertising | 128 | 145 | 148 | 79 | 145 | |||||||||||||||
Data processing expense | 1,006 | 840 | 990 | 936 | 829 | |||||||||||||||
Professional fees | 937 | 676 | 604 | 640 | 658 | |||||||||||||||
Depreciation of premises and equipment | 139 | 137 | 135 | 147 | 154 | |||||||||||||||
90 | 120 | 140 | 252 | 260 | ||||||||||||||||
Core deposit intangible amortization | 115 | 121 | 126 | 133 | 139 | |||||||||||||||
Fraud losses (recovery) | 16 | 133 | (218 | ) | 1,329 | 14 | ||||||||||||||
Other expenses | 1,060 | 874 | 945 | 902 | 1,018 | |||||||||||||||
Total Operating Expenses | 4,147 | 3,777 | 3,558 | 5,179 | 4,023 | |||||||||||||||
Total Noninterest Expense | 10,179 | 9,447 | 9,378 | 10,148 | 9,472 | |||||||||||||||
Income before income taxes | 8,992 | 8,562 | 8,622 | 8,426 | 8,270 | |||||||||||||||
Income tax expense | 2,241 | 2,158 | 2,190 | 2,127 | 2,131 | |||||||||||||||
Net Income | $ | 6,751 | $ | 6,404 | $ | 6,432 | $ | 6,299 | $ | 6,139 | ||||||||||
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
CONDENSED CONSOLIDATED BALANCE SHEETS
(Audited) | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 108,990 | $ | 112,314 | $ | 40,881 | $ | 126,834 | $ | 56,887 | ||||||||||
Federal funds sold | — | — | 79,404 | 43,614 | — | |||||||||||||||
Interest-bearing deposits with banks | 30,664 | 34,929 | 18,626 | 17,390 | 20,178 | |||||||||||||||
Securities available for sale ("AFS"), at fair value | 497,839 | 456,664 | 347,678 | 253,348 | 246,105 | |||||||||||||||
Equity securities carried at fair value through income | 4,772 | 4,805 | 4,814 | 4,787 | 4,855 | |||||||||||||||
Non-marketable equity securities held in other financial institutions | 207 | 207 | 207 | 207 | 207 | |||||||||||||||
1,472 | 1,472 | 2,036 | 2,036 | 2,777 | ||||||||||||||||
26,398 | 54,807 | 86,482 | 112,485 | 107,960 | ||||||||||||||||
Portfolio Loans Receivable net of allowance for loan losses of | 1,560,393 | 1,514,837 | 1,515,893 | 1,489,806 | 1,486,115 | |||||||||||||||
Net Loans | 1,586,791 | 1,569,644 | 1,602,375 | 1,602,291 | 1,594,075 | |||||||||||||||
10,835 | 10,835 | 10,835 | 10,835 | 10,835 | ||||||||||||||||
Premises and equipment, net | 21,427 | 21,795 | 21,630 | 20,540 | 20,271 | |||||||||||||||
Other real estate owned (OREO) | — | 1,536 | 1,536 | 2,329 | 3,109 | |||||||||||||||
Accrued interest receivable | 5,588 | 6,045 | 6,590 | 7,337 | 8,717 | |||||||||||||||
Investment in bank owned life insurance | 38,932 | 38,713 | 38,493 | 38,275 | 38,061 | |||||||||||||||
Core deposit intangible | 1,032 | 1,147 | 1,267 | 1,394 | 1,527 | |||||||||||||||
Net deferred tax assets | 9,033 | 8,790 | 8,139 | 8,671 | 7,909 | |||||||||||||||
Right of use assets - operating leases | 6,124 | 6,215 | 6,305 | 6,391 | 7,831 | |||||||||||||||
Other assets | 3,600 | 3,581 | 4,243 | 3,252 | 3,095 | |||||||||||||||
Total Assets | $ | 2,327,306 | $ | 2,278,692 | $ | 2,195,059 | $ | 2,149,531 | $ | 2,026,439 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Noninterest-bearing deposits | $ | 445,778 | $ | 432,606 | $ | 423,165 | $ | 406,319 | $ | 362,079 | ||||||||||
Interest-bearing deposits | 1,610,386 | 1,572,001 | 1,484,973 | 1,461,577 | 1,383,523 | |||||||||||||||
Total deposits | 2,056,164 | 2,004,607 | 1,908,138 | 1,867,896 | 1,745,602 | |||||||||||||||
Long-term debt | 12,231 | 12,249 | 27,267 | 27,285 | 27,302 | |||||||||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPs") | 12,000 | 12,000 | 12,000 | 12,000 | 12,000 | |||||||||||||||
Subordinated notes - 4.75% | 19,510 | 19,496 | 19,482 | 19,468 | 19,526 | |||||||||||||||
Lease liabilities - operating leases | 6,343 | 6,418 | 6,512 | 6,614 | 8,088 | |||||||||||||||
Accrued expenses and other liabilities | 12,925 | 19,794 | 17,698 | 15,509 | 15,908 | |||||||||||||||
Total Liabilities | 2,119,173 | 2,074,564 | 1,991,097 | 1,948,772 | 1,828,426 | |||||||||||||||
Stockholders' Equity | ||||||||||||||||||||
Common stock | 57 | 57 | 58 | 59 | 59 | |||||||||||||||
Additional paid in capital | 96,896 | 96,649 | 96,411 | 96,181 | 95,965 | |||||||||||||||
Retained earnings | 113,448 | 107,890 | 104,889 | 103,294 | 97,944 | |||||||||||||||
Accumulated other comprehensive (loss) income | (1,952 | ) | (9 | ) | 3,063 | 1,684 | 4,504 | |||||||||||||
Unearned ESOP shares | (316 | ) | (459 | ) | (459 | ) | (459 | ) | (459 | ) | ||||||||||
Total Stockholders' Equity | 208,133 | 204,128 | 203,962 | 200,759 | 198,013 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,327,306 | $ | 2,278,692 | $ | 2,195,059 | $ | 2,149,531 | $ | 2,026,439 | ||||||||||
Common shares issued and outstanding | 5,718,528 | 5,724,011 | 5,786,928 | 5,897,685 | 5,903,613 | |||||||||||||||
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
SELECTED FINANCIAL INFORMATION AND RATIOS
(dollars in thousands, except per share amounts) | Three Months Ended | |||||||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
KEY OPERATING RATIOS | ||||||||||||||||||||
Return on average assets ("ROAA") | 1.18 | % | 1.17 | % | 1.22 | % | 1.22 | % | 1.18 | % | ||||||||||
Pre-tax Pre-Provision ROAA** | 1.57 | 1.57 | 1.68 | 1.68 | 1.71 | |||||||||||||||
Return on average common equity ("ROACE") | 13.00 | 12.45 | 12.62 | 12.53 | 12.51 | |||||||||||||||
Pre-tax Pre-Provision ROACE** | 17.31 | 16.65 | 17.49 | 17.34 | 18.08 | |||||||||||||||
Return on Average Tangible Common Equity ("ROATCE")** | 13.97 | 13.41 | 13.62 | 13.56 | 13.58 | |||||||||||||||
Average total equity to average total assets | 9.06 | 9.40 | 9.63 | 9.71 | 9.46 | |||||||||||||||
Interest rate spread | 3.17 | 3.22 | 3.30 | 3.43 | 3.29 | |||||||||||||||
Net interest margin | 3.22 | 3.28 | 3.37 | 3.50 | 3.40 | |||||||||||||||
Cost of funds | 0.17 | 0.21 | 0.21 | 0.25 | 0.42 | |||||||||||||||
Cost of deposits | 0.11 | 0.12 | 0.14 | 0.18 | 0.26 | |||||||||||||||
Cost of debt | 3.04 | 3.19 | 2.51 | 2.50 | 3.45 | |||||||||||||||
Efficiency ratio | 53.10 | 52.46 | 51.27 | 53.78 | 51.64 | |||||||||||||||
Noninterest expense to average assets | 1.78 | 1.73 | 1.77 | 1.96 | 1.83 | |||||||||||||||
Net operating expense to average assets | 1.38 | 1.47 | 1.42 | 1.50 | 1.37 | |||||||||||||||
Avg. int-earning assets to avg. int-bearing liabilities | 129.68 | 132.54 | 131.36 | 128.84 | 126.18 | |||||||||||||||
Net charge-offs to average portfolio loans | 0.04 | (0.02 | ) | 0.01 | 0.40 | — | ||||||||||||||
COMMON SHARE DATA | ||||||||||||||||||||
Basic net income per common share | $ | 1.18 | $ | 1.12 | $ | 1.10 | $ | 1.07 | $ | 1.04 | ||||||||||
Diluted net income per common share | 1.18 | 1.12 | 1.10 | 1.07 | 1.04 | |||||||||||||||
Cash dividends paid per common share | 0.150 | 0.150 | 0.150 | 0.125 | 0.125 | |||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 5,711,746 | 5,709,814 | 5,845,009 | 5,888,250 | 5,892,751 | |||||||||||||||
Diluted | 5,723,011 | 5,720,001 | 5,856,954 | 5,897,698 | 5,894,494 | |||||||||||||||
ASSET QUALITY | ||||||||||||||||||||
Total assets | $ | 2,327,306 | $ | 2,278,692 | $ | 2,195,059 | $ | 2,149,531 | $ | 2,026,439 | ||||||||||
Gross portfolio loans (1) | 1,578,943 | 1,533,051 | 1,533,876 | 1,507,183 | 1,504,275 | |||||||||||||||
Classified assets | 5,211 | 6,663 | 14,918 | 16,145 | 22,358 | |||||||||||||||
Allowance for loan losses | 18,417 | 18,579 | 18,516 | 18,256 | 19,424 | |||||||||||||||
Past due loans - 31 to 89 days | 568 | 189 | 101 | 1,373 | 179 | |||||||||||||||
Past due loans >=90 days | 961 | 1,400 | 5,836 | 5,453 | 11,965 | |||||||||||||||
Total past due loans (2) | 1,529 | 1,589 | 5,937 | 6,826 | 12,144 | |||||||||||||||
Non-accrual loans (3) | 7,631 | 5,160 | 13,802 | 13,623 | 18,222 | |||||||||||||||
Accruing troubled debt restructures ("TDRs") | 447 | 455 | 503 | 504 | 572 | |||||||||||||||
Other real estate owned ("OREO") | — | 1,536 | 1,536 | 2,329 | 3,109 | |||||||||||||||
Non-accrual loans, OREO and TDRs | $ | 8,078 | $ | 7,151 | $ | 15,841 | $ | 16,456 | $ | 21,903 |
** Non-GAAP financial measure. See reconciliation of GAAP and NON-GAAP measures.
____________________________________
(1) Portfolio loans include all loan portfolios except the
(2) Delinquency excludes Purchase Credit Impaired ("PCI") loans.
(3) Non-accrual loans include all loans that are 90 days or more delinquent and loans that are non-accrual due to the operating results or cash flows of a customer. Non-accrual loans can include loans that are current with all loan payments.
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
SELECTED FINANCIAL INFORMATION AND RATIOS
(dollars in thousands, except per share amounts) | Three Months Ended | |||||||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||||||
ASSET QUALITY RATIOS (1) | ||||||||||||||||||||
Classified assets to total assets | 0.22 | % | 0.29 | % | 0.68 | % | 0.75 | % | 1.10 | % | ||||||||||
Classified assets to risk-based capital | 2.10 | 2.75 | 6.24 | 6.81 | 9.61 | |||||||||||||||
Allowance for loan losses to portfolio loans | 1.17 | 1.21 | 1.21 | 1.21 | 1.29 | |||||||||||||||
Allowance for loan losses to non-accrual loans | 241.34 | 360.06 | 134.15 | 134.01 | 106.60 | |||||||||||||||
Past due loans - 31 to 89 days to portfolio loans | 0.04 | 0.01 | 0.01 | 0.09 | 0.01 | |||||||||||||||
Past due loans >=90 days to portfolio loans | 0.06 | 0.09 | 0.38 | 0.36 | 0.80 | |||||||||||||||
Total past due (delinquency) to portfolio loans | 0.10 | 0.10 | 0.39 | 0.45 | 0.81 | |||||||||||||||
Non-accrual loans to portfolio loans | 0.48 | 0.34 | 0.90 | 0.90 | 1.21 | |||||||||||||||
Non-accrual loans and TDRs to portfolio loans | 0.51 | 0.37 | 0.93 | 0.94 | 1.25 | |||||||||||||||
Non-accrual loans and OREO to total assets | 0.33 | 0.29 | 0.70 | 0.74 | 1.05 | |||||||||||||||
Non-accrual loans and OREO to portfolio loans and OREO | 0.48 | 0.44 | 1.00 | 1.06 | 1.42 | |||||||||||||||
Non-accrual loans, OREO and TDRs to total assets | 0.35 | 0.31 | 0.72 | 0.77 | 1.08 | |||||||||||||||
COMMON SHARE DATA | ||||||||||||||||||||
Book value per common share | $ | 36.40 | $ | 35.66 | $ | 35.25 | $ | 34.04 | $ | 33.54 | ||||||||||
Tangible book value per common share** | 34.32 | 33.57 | 33.15 | 31.97 | 31.45 | |||||||||||||||
Common shares outstanding at end of period | 5,718,528 | 5,724,011 | 5,786,928 | 5,897,685 | 5,903,613 | |||||||||||||||
OTHER DATA | ||||||||||||||||||||
Full-time equivalent employees | 186 | 196 | 189 | 192 | 189 | |||||||||||||||
Branches | 11 | 11 | 11 | 11 | 12 | |||||||||||||||
Loan Production Offices | 4 | 4 | 4 | 4 | 4 | |||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||
Tier 1 capital to average assets | 9.23 | % | 9.41 | % | 9.57 | % | 9.70 | % | 9.56 | % | ||||||||||
Tier 1 common capital to risk-weighted assets | 11.92 | 11.89 | 11.56 | 11.72 | 11.47 | |||||||||||||||
Tier 1 capital to risk-weighted assets | 12.64 | 12.64 | 12.30 | 12.47 | 12.23 | |||||||||||||||
Total risk-based capital to risk-weighted assets | 14.92 | 14.99 | 14.62 | 14.83 | 14.69 | |||||||||||||||
Common equity to assets | 8.94 | 8.96 | 9.29 | 9.34 | 9.77 | |||||||||||||||
Tangible common equity to tangible assets ** | 8.48 | 8.48 | 8.79 | 8.82 | 9.22 |
** Non-GAAP financial measure. See reconciliation of GAAP and NON-GAAP measures.
____________________________________
(1) Asset quality ratios are calculated using total portfolio loans. Portfolio loans include all loan portfolios except the
SUPPLEMENTAL YEAR TO DATE FINANCIAL DATA (UNAUDITED)
CONDENSED CONSOLIDATED INCOME STATEMENT
(Audited) | ||||||||||||||||
(dollars in thousands, except per share amounts) | Three Months Ended | Years Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Interest and Dividend Income | ||||||||||||||||
Loans, including fees | $ | 16,222 | $ | 16,776 | $ | 65,476 | $ | 65,731 | ||||||||
Interest and dividends on securities | 1,531 | 1,091 | 4,992 | 5,170 | ||||||||||||
Interest on deposits with banks | 25 | 46 | 91 | 172 | ||||||||||||
Total Interest and Dividend Income | 17,778 | 17,913 | 70,559 | 71,073 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 565 | 1,166 | 2,601 | 7,681 | ||||||||||||
Short-term borrowings | — | — | — | 111 | ||||||||||||
Long-term debt | 332 | 775 | 1,524 | 2,364 | ||||||||||||
Total Interest Expense | 897 | 1,941 | 4,125 | 10,156 | ||||||||||||
Net Interest Income ("NII") | 16,881 | 15,972 | 66,434 | 60,917 | ||||||||||||
Provision for loan losses | — | 600 | 586 | 10,700 | ||||||||||||
NII After Provision For Loan Losses | 16,881 | 15,372 | 65,848 | 50,217 | ||||||||||||
Noninterest Income | ||||||||||||||||
Loan appraisal, credit, and misc. charges | 257 | 76 | 528 | 174 | ||||||||||||
Gain on sale of assets | — | — | 68 | 6 | ||||||||||||
Net gains on sale of investment securities | — | 714 | 586 | 1,384 | ||||||||||||
Unrealized (loss) gain on equity securities | (45 | ) | (14 | ) | (139 | ) | 101 | |||||||||
Loss on premises and equipment held for sale | (5 | ) | — | (25 | ) | — | ||||||||||
Income from bank owned life insurance | 219 | 220 | 871 | 881 | ||||||||||||
Service charges | 1,235 | 960 | 4,301 | 3,490 | ||||||||||||
Referral fee income | 574 | 414 | 1,822 | 2,380 | ||||||||||||
Net gain on sale of loans originated for sale | 55 | — | 85 | — | ||||||||||||
Loss on sale of loans | — | — | (191 | ) | — | |||||||||||
Total Noninterest Income | 2,290 | 2,370 | 7,906 | 8,416 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Compensation and benefits | 5,265 | 4,552 | 21,035 | 19,553 | ||||||||||||
OREO valuation allowance and expenses | 767 | 897 | 1,456 | 3,200 | ||||||||||||
Sub-total | 6,032 | 5,449 | 22,491 | 22,753 | ||||||||||||
Operating Expense | ||||||||||||||||
Occupancy expense | 656 | 806 | 2,836 | 3,010 | ||||||||||||
Advertising | 128 | 145 | 500 | 525 | ||||||||||||
Data processing expense | 1,006 | 829 | 3,772 | 3,671 | ||||||||||||
Professional fees | 937 | 658 | 2,857 | 2,413 | ||||||||||||
Depreciation of premises and equipment | 139 | 154 | 558 | 605 | ||||||||||||
90 | 260 | 602 | 939 | |||||||||||||
Core deposit intangible amortization | 115 | 139 | 495 | 591 | ||||||||||||
Fraud losses | 16 | 14 | 1,260 | 79 | ||||||||||||
Other expenses | 1,060 | 1,018 | 3,781 | 3,417 | ||||||||||||
Total Operating Expense | 4,147 | 4,023 | 16,661 | 15,250 | ||||||||||||
Total Noninterest Expense | 10,179 | 9,472 | 39,152 | 38,003 | ||||||||||||
Income before income taxes | 8,992 | 8,270 | 34,602 | 20,630 | ||||||||||||
Income tax expense | 2,241 | 2,131 | 8,716 | 4,494 | ||||||||||||
Net Income | $ | 6,751 | $ | 6,139 | $ | 25,886 | $ | 16,136 | ||||||||
SUPPLEMENTAL YEAR TO DATE FINANCIAL DATA (UNAUDITED)
Year Ended | ||||||||
2021 | 2020 | |||||||
KEY OPERATING RATIOS | ||||||||
Return on average assets ("ROAA") | 1.19 | % | 0.81 | % | ||||
Pre-tax Pre-Provision ROAA** | 1.62 | 1.58 | ||||||
Return on average common equity ("ROACE") | 12.65 | 8.46 | ||||||
Pre-tax Pre-Provision ROACE** | 17.19 | 16.43 | ||||||
Return on Average Tangible Common Equity ("ROATCE")** | 13.64 | 9.32 | ||||||
Average total equity to average total assets | 9.44 | 9.61 | ||||||
Interest rate spread | 3.28 | 3.22 | ||||||
Net interest margin | 3.34 | 3.36 | ||||||
Cost of funds | 0.21 | 0.57 | ||||||
Cost of deposits | 0.14 | 0.47 | ||||||
Cost of debt | 2.79 | 1.74 | ||||||
Efficiency ratio | 52.67 | 54.81 | ||||||
Noninterest expense to average assets | 1.81 | 1.91 | ||||||
Net operating expense to average assets | 1.44 | 1.49 | ||||||
Avg. int-earning assets to avg. int-bearing liabilities | 130.61 | 125.41 | ||||||
Net charge-offs to average portfolio loans (1) | 0.11 | 0.15 | ||||||
COMMON SHARE DATA | ||||||||
Basic net income per common share | $ | 4.47 | $ | 2.74 | ||||
Diluted net income per common share | 4.47 | 2.74 | ||||||
Cash dividends paid per common share | 0.58 | 0.50 | ||||||
Weighted average common shares outstanding: | ||||||||
Basic | 5,788,005 | 5,892,269 | ||||||
Diluted | 5,797,527 | 5,893,559 |
____________________________________
** Non-GAAP financial measure. See reconciliation of GAAP and NON-GAAP measures.
(1) Asset quality ratios are calculated using total portfolio loans. Portfolio loans include all loan portfolios except the
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)
Reconciliation of US GAAP total assets, common equity, common equity to assets and book value to Non-GAAP tangible assets, tangible common equity, tangible common equity to tangible assets and tangible book value.
This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain performance measures, which exclude intangible assets. These non-GAAP measures are included because the Company believes they may provide useful supplemental information for evaluating the underlying performance trends of the Company.
(dollars in thousands, except per share amounts) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
Total assets | $ | 2,327,306 | $ | 2,278,692 | $ | 2,195,059 | $ | 2,149,531 | $ | 2,026,439 | ||||||||||
Less: Intangible assets | ||||||||||||||||||||
10,835 | 10,835 | 10,835 | 10,835 | 10,835 | ||||||||||||||||
Core deposit intangible | 1,032 | 1,147 | 1,267 | 1,394 | 1,527 | |||||||||||||||
Total intangible assets | 11,867 | 11,982 | 12,102 | 12,229 | 12,362 | |||||||||||||||
Tangible assets | $ | 2,315,439 | $ | 2,266,710 | $ | 2,182,957 | $ | 2,137,302 | $ | 2,014,077 | ||||||||||
Total common equity | $ | 208,133 | $ | 204,128 | $ | 203,962 | $ | 200,759 | $ | 198,013 | ||||||||||
Less: Intangible assets | 11,867 | 11,982 | 12,102 | 12,229 | 12,362 | |||||||||||||||
Tangible common equity | $ | 196,266 | $ | 192,146 | $ | 191,860 | $ | 188,530 | $ | 185,651 | ||||||||||
Common shares outstanding at end of period | 5,718,528 | 5,724,011 | 5,786,928 | 5,897,685 | 5,903,613 | |||||||||||||||
GAAP common equity to assets | 8.94 | % | 8.96 | % | 9.29 | % | 9.34 | % | 9.77 | % | ||||||||||
Non-GAAP tangible common equity to tangible assets | 8.48 | % | 8.48 | % | 8.79 | % | 8.82 | % | 9.22 | % | ||||||||||
GAAP common book value per share | $ | 36.40 | $ | 35.66 | $ | 35.25 | $ | 34.04 | $ | 33.54 | ||||||||||
Non-GAAP tangible common book value per share | $ | 34.32 | $ | 33.57 | $ | 33.15 | $ | 31.97 | $ | 31.45 | ||||||||||
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)
Pre-Tax Pre-Provision ("PTPP") Income, PTPP Return on Average Assets ("ROAA"), PTPP Return on Average Common Equity ("ROACE"), and Return on Average Tangible Common Equity ("ROATCE")
Management believes that PTPP income, which reflects the Company's profitability before income taxes and loan loss provisions, allows investors to better assess the Company's operating income and expenses in relation to the Company's core operating revenue by removing the volatility that is associated with credit provisions and different state income tax rates for comparable institutions. ROATCE is computed by dividing net earnings applicable to common shareholders by average tangible common shareholders' equity. Management believes that ROATCE is meaningful because it measures the performance of a business consistently, whether acquired or internally developed. ROATCE is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. Management also believes that during a crisis such as the COVID-19 pandemic, this information is useful as the impact of the pandemic on the loan loss provisions of various institutions will likely vary based on the geography of the communities served by a particular institution.
Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
(dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||
Net income (as reported) | $ | 6,751 | $ | 6,404 | $ | 6,432 | $ | 6,299 | $ | 6,139 | $ | 25,886 | $ | 16,136 | ||||||||||||||
Provision for loan losses | — | — | 291 | 295 | 600 | 586 | 10,700 | |||||||||||||||||||||
Income tax expenses | 2,241 | 2,158 | 2,190 | 2,127 | 2,131 | 8,716 | 4,494 | |||||||||||||||||||||
Non-GAAP PTPP income | $ | 8,992 | $ | 8,562 | $ | 8,913 | $ | 8,721 | $ | 8,870 | $ | 35,188 | $ | 31,330 | ||||||||||||||
ROAA | 1.18 | % | 1.17 | % | 1.22 | % | 1.22 | % | 1.18 | % | 1.19 | % | 0.81 | % | ||||||||||||||
Pre-tax Pre-Provision ROAA | 1.57 | % | 1.57 | % | 1.68 | % | 1.68 | % | 1.71 | % | 1.62 | % | 1.58 | % | ||||||||||||||
ROACE | 13.00 | % | 12.45 | % | 12.62 | % | 12.53 | % | 12.51 | % | 12.65 | % | 8.46 | % | ||||||||||||||
Pre-tax Pre-Provision ROACE | 17.31 | % | 16.65 | % | 17.49 | % | 17.34 | % | 18.08 | % | 17.19 | % | 16.43 | % | ||||||||||||||
Average assets | $ | 2,293,264 | $ | 2,187,986 | $ | 2,116,939 | $ | 2,070,575 | $ | 2,074,707 | $ | 2,167,859 | $ | 1,985,275 | ||||||||||||||
Average equity | $ | 207,745 | $ | 205,723 | $ | 203,893 | $ | 201,124 | $ | 196,279 | $ | 204,643 | $ | 190,720 |
Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
(dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||
Net income (as reported) | $ | 6,751 | $ | 6,404 | $ | 6,432 | $ | 6,299 | $ | 6,139 | $ | 25,886 | $ | 16,136 | ||||||||||||||
Core deposit intangible amortization (net of tax) | 86 | 91 | 94 | 99 | 103 | 370 | 462 | |||||||||||||||||||||
Net earnings applicable to common shareholders | $ | 6,837 | $ | 6,495 | $ | 6,526 | $ | 6,398 | $ | 6,242 | $ | 26,256 | $ | 16,598 | ||||||||||||||
ROATCE | 13.97 | % | 13.41 | % | 13.62 | % | 13.56 | % | 13.58 | % | 13.64 | % | 9.32 | % | ||||||||||||||
Average tangible common equity | $ | 195,803 | $ | 193,662 | $ | 191,708 | $ | 188,808 | $ | 183,827 | $ | 192,518 | $ | 178,048 | ||||||||||||||
AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST INCOME (UNAUDITED)
Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 1,099,088 | $ | 10,911 | 3.97 | % | $ | 1,027,831 | $ | 10,833 | 4.22 | % | $ | 1,099,088 | $ | 10,911 | 3.97 | % | $ | 1,094,089 | $ | 10,977 | 4.01 | % | ||||||||||||||||
Residential first mortgages | 93,997 | 756 | 3.22 | 140,303 | 1,132 | 3.23 | 93,997 | 756 | 3.22 | 100,195 | 742 | 2.96 | ||||||||||||||||||||||||||||
Residential rentals | 173,238 | 1,760 | 4.06 | 134,564 | 1,468 | 4.36 | 173,238 | 1,760 | 4.06 | 154,481 | 1,565 | 4.05 | ||||||||||||||||||||||||||||
Construction and land development | 38,345 | 431 | 4.50 | 35,910 | 435 | 4.85 | 38,345 | 431 | 4.50 | 34,810 | 399 | 4.58 | ||||||||||||||||||||||||||||
Home equity and second mortgages | 26,160 | 232 | 3.55 | 30,045 | 268 | 3.57 | 26,160 | 232 | 3.55 | 27,751 | 246 | 3.55 | ||||||||||||||||||||||||||||
Commercial and equipment loans | 114,616 | 1,260 | 4.40 | 107,245 | 1,320 | 4.92 | 114,616 | 1,260 | 4.40 | 104,845 | 1,161 | 4.43 | ||||||||||||||||||||||||||||
SBA PPP loans | 40,376 | 847 | 8.39 | 120,473 | 1,308 | 4.34 | 40,376 | 847 | 8.39 | 71,751 | 1,236 | 6.89 | ||||||||||||||||||||||||||||
Consumer loans | 2,629 | 25 | 3.80 | 1,058 | 12 | 4.54 | 2,629 | 25 | 3.80 | 1,742 | 16 | 3.67 | ||||||||||||||||||||||||||||
Allowance for loan losses | (18,434 | ) | — | — | (19,138 | ) | — | — | (18,434 | ) | — | — | (18,852 | ) | — | — | ||||||||||||||||||||||||
Net loans (1) | 1,570,015 | 16,222 | 4.13 | 1,578,291 | 16,776 | 4.25 | 1,570,015 | 16,222 | 4.13 | 1,570,812 | 16,342 | 4.16 | ||||||||||||||||||||||||||||
Taxable investment securities | 465,771 | 1,441 | 1.24 | 211,101 | 978 | 1.85 | 465,771 | 1,441 | 1.24 | 370,498 | 1,212 | 1.31 | ||||||||||||||||||||||||||||
Nontaxable investment securities | 17,509 | 90 | 2.06 | 20,378 | 113 | 2.22 | 17,509 | 90 | 2.06 | 16,204 | 84 | 2.07 | ||||||||||||||||||||||||||||
Interest-bearing deposits in other banks | 41,736 | 25 | 0.24 | 28,970 | 23 | 0.32 | 41,736 | 25 | 0.24 | 36,516 | 16 | 0.18 | ||||||||||||||||||||||||||||
Federal funds sold | — | — | — | 42,841 | 23 | 0.21 | — | — | — | 30,266 | 5 | 0.07 | ||||||||||||||||||||||||||||
Total Interest-Earning Assets | 2,095,031 | 17,778 | 3.39 | 1,881,581 | 17,913 | 3.81 | 2,095,031 | 17,778 | 3.39 | 2,024,296 | 17,659 | 3.49 | ||||||||||||||||||||||||||||
Cash and cash equivalents | 100,480 | 88,963 | 100,480 | 66,292 | ||||||||||||||||||||||||||||||||||||
10,835 | 10,835 | 10,835 | 10,835 | |||||||||||||||||||||||||||||||||||||
Core deposit intangible | 1,107 | 1,617 | 1,107 | 1,226 | ||||||||||||||||||||||||||||||||||||
Other assets | 85,811 | 91,711 | 85,811 | 85,340 | ||||||||||||||||||||||||||||||||||||
Total Assets | $ | 2,293,264 | $ | 2,074,707 | $ | 2,293,264 | $ | 2,187,989 | ||||||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 449,272 | $ | — | — | % | $ | 366,726 | $ | — | — | % | $ | 449,272 | $ | — | — | % | $ | 434,316 | $ | — | — | % | ||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||
Savings | 114,123 | 14 | 0.05 | 96,529 | 17 | 0.07 | 114,123 | 14 | 0.05 | 110,873 | 14 | 0.05 | ||||||||||||||||||||||||||||
Demand deposits | 754,656 | 87 | 0.05 | 605,790 | 135 | 0.09 | 754,656 | 87 | 0.05 | 659,625 | 75 | 0.05 | ||||||||||||||||||||||||||||
Money market deposits | 369,414 | 100 | 0.11 | 342,659 | 133 | 0.16 | 369,414 | 100 | 0.11 | 358,017 | 100 | 0.11 | ||||||||||||||||||||||||||||
Certificates of deposit | 333,658 | 364 | 0.44 | 356,261 | 881 | 0.99 | 333,658 | 364 | 0.44 | 341,672 | 405 | 0.47 | ||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,571,851 | 565 | 0.14 | 1,401,239 | 1,166 | 0.33 | 1,571,851 | 565 | 0.14 | 1,470,187 | 594 | 0.16 | ||||||||||||||||||||||||||||
Total Deposits | 2,021,123 | 565 | 0.11 | 1,767,965 | 1,166 | 0.26 | 2,021,123 | 565 | 0.11 | 1,904,503 | 594 | 0.12 | ||||||||||||||||||||||||||||
Long-term debt | 12,237 | 6 | 0.20 | 28,341 | 457 | 6.45 | 12,237 | 6 | 0.20 | 25,625 | 131 | 2.04 | ||||||||||||||||||||||||||||
PPPLF Advance | — | — | — | 32,677 | 29 | 0.35 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Subordinated Notes | 19,501 | 252 | 5.17 | 16,888 | 211 | 5.00 | 19,501 | 252 | 5.17 | 19,487 | 251 | 5.15 | ||||||||||||||||||||||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures | 12,000 | 74 | 2.47 | 12,000 | 78 | 2.60 | 12,000 | 74 | 2.47 | 12,000 | 74 | 2.47 | ||||||||||||||||||||||||||||
Total Debt | 43,738 | 332 | 3.04 | 89,906 | 775 | 3.45 | 43,738 | 332 | 3.04 | 57,112 | 456 | 3.19 | ||||||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 1,615,589 | 897 | 0.22 | 1,491,145 | 1,941 | 0.52 | 1,615,589 | 897 | 0.22 | 1,527,299 | 1,050 | 0.27 | ||||||||||||||||||||||||||||
Total Funds | 2,064,861 | 897 | 0.17 | 1,857,871 | 1,941 | 0.42 | 2,064,861 | 897 | 0.17 | 1,961,615 | 1,050 | 0.21 | ||||||||||||||||||||||||||||
Other liabilities | 20,658 | 20,557 | 20,658 | 20,648 | ||||||||||||||||||||||||||||||||||||
Stockholders' equity | 207,745 | 196,279 | 207,745 | 205,723 | ||||||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,293,264 | $ | 2,074,707 | $ | 2,293,264 | $ | 2,187,986 | ||||||||||||||||||||||||||||||||
Net interest income | $ | 16,881 | $ | 15,972 | $ | 16,881 | $ | 16,609 | ||||||||||||||||||||||||||||||||
Interest rate spread | 3.17 | % | 3.29 | % | 3.17 | % | 3.22 | % | ||||||||||||||||||||||||||||||||
Net yield on interest-earning assets | 3.22 | % | 3.40 | % | 3.22 | % | 3.28 | % | ||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 129.68 | % | 126.18 | % | 129.68 | % | 132.54 | % | ||||||||||||||||||||||||||||||||
Average loans to average deposits | 77.68 | % | 89.27 | % | 77.68 | % | 82.48 | % | ||||||||||||||||||||||||||||||||
Average transaction deposits to total average deposits ** | 83.49 | % | 79.85 | % | 83.49 | % | 82.06 | % |
____________________________________
(1) Loan average balance includes non-accrual loans. There are no tax equivalency adjustments. There was
** Transaction deposits exclude time deposits.
AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST INCOME (UNAUDITED)
For the Years Ended | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||
(dollars in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | ||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Commercial real estate | $ | 1,085,823 | $ | 43,536 | 4.01 | % | $ | 993,478 | $ | 43,239 | 4.35 | % | ||||||||
Residential first mortgages | 107,011 | 3,250 | 3.04 | 159,265 | 5,229 | 3.28 | ||||||||||||||
Residential rentals | 151,606 | 6,180 | 4.08 | 132,524 | 5,841 | 4.41 | ||||||||||||||
Construction and land development | 36,891 | 1,658 | 4.49 | 37,930 | 1,795 | 4.73 | ||||||||||||||
Home equity and second mortgages | 28,051 | 977 | 3.48 | 33,458 | 1,334 | 3.99 | ||||||||||||||
Commercial and equipment loans | 107,235 | 4,599 | 4.29 | 113,886 | 5,539 | 4.86 | ||||||||||||||
SBA PPP loans | 82,901 | 5,203 | 6.28 | 90,345 | 2,704 | 2.99 | ||||||||||||||
Consumer loans | 1,783 | 73 | 4.09 | 1,099 | 50 | 4.55 | ||||||||||||||
Allowance for loan losses | (18,788 | ) | — | — | (15,681 | ) | — | — | ||||||||||||
Net loans (1) | 1,582,513 | 65,476 | 4.14 | 1,546,304 | 65,731 | 4.25 | ||||||||||||||
Taxable investment securities | 336,267 | 4,623 | 1.37 | 214,187 | 4,832 | 2.26 | ||||||||||||||
Nontaxable investment securities | 17,515 | 369 | 2.11 | 14,214 | 338 | 2.38 | ||||||||||||||
Interest-bearing deposits in other banks | 33,095 | 70 | 0.21 | 19,444 | 110 | 0.57 | ||||||||||||||
Federal funds sold | 20,916 | 21 | 0.10 | 20,890 | 62 | 0.30 | ||||||||||||||
Total Interest-Earning Assets | 1,990,306 | 70,559 | 3.55 | 1,815,039 | 71,073 | 3.92 | ||||||||||||||
Cash and cash equivalents | 78,849 | 68,651 | ||||||||||||||||||
10,835 | 10,835 | |||||||||||||||||||
Core deposit intangible | 1,290 | 1,837 | ||||||||||||||||||
Other assets | 86,579 | 88,913 | ||||||||||||||||||
Total Assets | $ | 2,167,859 | $ | 1,985,275 | ||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 417,935 | $ | — | — | % | $ | 324,597 | $ | — | — | % | ||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Savings | 108,189 | 54 | 0.05 | 84,463 | 85 | 0.10 | ||||||||||||||
Demand deposits | 660,330 | 345 | 0.05 | 537,043 | 1,591 | 0.30 | ||||||||||||||
Money market deposits | 358,006 | 397 | 0.11 | 312,980 | 795 | 0.25 | ||||||||||||||
Certificates of deposit | 342,755 | 1,805 | 0.53 | 370,743 | 5,210 | 1.41 | ||||||||||||||
Total Interest-bearing deposits | 1,469,280 | 2,601 | 0.18 | 1,305,229 | 7,681 | 0.59 | ||||||||||||||
Total Deposits | 1,887,215 | 2,601 | 0.14 | 1,629,826 | 7,681 | 0.47 | ||||||||||||||
Debt: | ||||||||||||||||||||
Long-term debt | 23,072 | 219 | 0.95 | 53,615 | 1,373 | 2.56 | ||||||||||||||
Short-term borrowings | — | — | — | 8,156 | 111 | 1.36 | ||||||||||||||
PPPLF Advances | — | — | — | 60,360 | 211 | 0.35 | ||||||||||||||
Subordinated Notes | 19,488 | 1,006 | 5.16 | 7,953 | 395 | 4.97 | ||||||||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures | 12,000 | 299 | 2.49 | 12,000 | 385 | 3.21 | ||||||||||||||
Total Debt | 54,560 | 1,524 | 2.79 | 142,084 | 2,475 | 1.74 | ||||||||||||||
Total Interest-Bearing Liabilities | 1,523,840 | 4,125 | 0.27 | 1,447,313 | 10,156 | 0.70 | ||||||||||||||
Total funds | 1,941,775 | 4,125 | 0.21 | 1,771,910 | 10,156 | 0.57 | ||||||||||||||
Other liabilities | 21,441 | 22,645 | ||||||||||||||||||
Stockholders' equity | 204,643 | 190,720 | ||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,167,859 | $ | 1,985,275 | ||||||||||||||||
Net interest income | $ | 66,434 | $ | 60,917 | ||||||||||||||||
Interest rate spread | 3.28 | % | 3.22 | % | ||||||||||||||||
Net yield on interest-earning assets | 3.34 | % | 3.36 | % | ||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 130.61 | % | 125.41 | % | ||||||||||||||||
Average loans to average deposits | 83.85 | % | 94.88 | % | ||||||||||||||||
Average transaction deposits to total average deposits ** | 81.84 | % | 77.25 | % |
____________________________________
(1) Loan average balance includes non-accrual loans. There are no tax equivalency adjustments. There was
** Transaction deposits exclude time deposits.
SUMMARY OF LOAN PORTFOLIO (UNAUDITED)
(dollars in thousands)
BY LOAN TYPE | 2021 | % | 2021 | % | 2021 | % | 2021 | % | 2020 | % | |||||||||||||||||||||||||
Portfolio Type: | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 1,115,485 | 70.66 | % | $ | 1,088,636 | 71.02 | % | $ | 1,111,613 | 72.47 | % | $ | 1,081,111 | 71.74 | % | $ | 1,049,147 | 69.75 | % | |||||||||||||||
Residential first mortgages | 91,120 | 5.77 | 96,835 | 6.32 | 105,482 | 6.88 | 115,803 | 7.68 | 133,779 | 8.89 | |||||||||||||||||||||||||
Residential rentals | 195,035 | 12.35 | 172,082 | 11.22 | 142,210 | 9.27 | 137,522 | 9.12 | 139,059 | 9.24 | |||||||||||||||||||||||||
Construction and land development | 35,590 | 2.25 | 37,139 | 2.42 | 36,918 | 2.41 | 38,446 | 2.55 | 37,520 | 2.49 | |||||||||||||||||||||||||
Home equity and second mortgages | 25,638 | 1.62 | 26,518 | 1.73 | 28,726 | 1.87 | 29,363 | 1.95 | 29,129 | 1.94 | |||||||||||||||||||||||||
Commercial loans | 50,574 | 3.20 | 48,327 | 3.15 | 47,567 | 3.10 | 42,689 | 2.83 | 52,921 | 3.52 | |||||||||||||||||||||||||
Consumer loans | 3,002 | 0.19 | 2,168 | 0.14 | 1,442 | 0.09 | 1,415 | 0.09 | 1,027 | 0.07 | |||||||||||||||||||||||||
Commercial equipment | 62,499 | 3.96 | 61,346 | 4.00 | 59,918 | 3.91 | 60,834 | 4.04 | 61,693 | 4.10 | |||||||||||||||||||||||||
Gross portfolio loans | 1,578,943 | 100.00 | 1,533,051 | 100.00 | 1,533,876 | 100.00 | 1,507,183 | 100.00 | 1,504,275 | 100.00 | |||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Net deferred (fees) costs | (133 | ) | (0.01 | ) | 365 | 0.02 | 533 | 0.03 | 879 | 0.06 | 1,264 | 0.08 | |||||||||||||||||||||||
Allowance for loan losses | (18,417 | ) | (1.17 | ) | (18,579 | ) | (1.21 | ) | (18,516 | ) | (1.21 | ) | (18,256 | ) | (1.21 | ) | (19,424 | ) | (1.29 | ) | |||||||||||||||
(18,550 | ) | (18,214 | ) | (17,983 | ) | (17,377 | ) | (18,160 | ) | ||||||||||||||||||||||||||
Net portfolio loans | 1,560,393 | 1,514,837 | 1,515,893 | 1,489,806 | 1,486,115 | ||||||||||||||||||||||||||||||
27,276 | 56,424 | 89,129 | 115,700 | 110,320 | |||||||||||||||||||||||||||||||
Net deferred fees | (878 | ) | (1,617 | ) | (2,647 | ) | (3,215 | ) | (2,360 | ) | |||||||||||||||||||||||||
Net | 26,398 | 54,807 | 86,482 | 112,485 | 107,960 | ||||||||||||||||||||||||||||||
Total net loans | $ | 1,586,791 | $ | 1,569,644 | $ | 1,602,375 | $ | 1,602,291 | $ | 1,594,075 | |||||||||||||||||||||||||
Total gross loans | $ | 1,606,219 | $ | 1,589,475 | $ | 1,623,005 | $ | 1,622,883 | $ | 1,614,595 | |||||||||||||||||||||||||
END OF PERIOD CONTRACTUAL RATES (UNAUDITED)
The following table is based on contractual interest rates and does not include the amortization of deferred costs and fees or assumptions regarding non-accrual interest:
2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||
(dollars in thousands) | EOP Contractual Interest rate | EOP Contractual Interest rate | EOP Contractual Interest rate | EOP Contractual Interest rate | EOP Contractual Interest rate | ||||||||||
Commercial real estate | 3.79 | % | 3.91 | % | 3.96 | % | 4.02 | % | 4.11 | % | |||||
Residential first mortgages | 3.80 | % | 3.84 | % | 3.87 | % | 3.87 | % | 3.93 | % | |||||
Residential rentals | 3.81 | % | 3.97 | % | 4.11 | % | 4.20 | % | 4.26 | % | |||||
Construction and land development | 4.38 | % | 4.32 | % | 4.31 | % | 4.32 | % | 4.28 | % | |||||
Home equity and second mortgages | 3.51 | % | 3.51 | % | 3.50 | % | 3.52 | % | 3.54 | % | |||||
Commercial loans | 4.48 | % | 4.48 | % | 4.44 | % | 4.63 | % | 4.56 | % | |||||
Consumer loans | 4.37 | % | 5.26 | % | 5.65 | % | 5.75 | % | 5.99 | % | |||||
Commercial equipment | 4.32 | % | 4.39 | % | 4.42 | % | 4.40 | % | 4.42 | % | |||||
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||
Total Loans | 3.80 | % | 3.85 | % | 3.84 | % | 3.84 | % | 3.92 | % | |||||
Yields without | 3.84 | % | 3.95 | % | 4.00 | % | 4.06 | % | 4.13 | % | |||||
ALLOWANCE FOR LOAN LOSSES (UNAUDITED)
Three Months Ended | ||||||||||||||||||||
(dollars in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||
Beginning of period | $ | 18,579 | $ | 18,516 | $ | 18,256 | $ | 19,424 | $ | 18,829 | ||||||||||
Charge-offs | (181 | ) | (491 | ) | (61 | ) | (1,485 | ) | (30 | ) | ||||||||||
Recoveries | 19 | 554 | 30 | 22 | 25 | |||||||||||||||
Net charge-offs | (162 | ) | 63 | (31 | ) | (1,463 | ) | (5 | ) | |||||||||||
Provision for loan losses | — | — | 291 | 295 | 600 | |||||||||||||||
End of period | $ | 18,417 | $ | 18,579 | $ | 18,516 | $ | 18,256 | $ | 19,424 | ||||||||||
Net charge-offs to average portfolio loans (annualized)(1) | (0.04) % | 0.02 | % | (0.01) % | (0.40) % | — | % | |||||||||||||
Breakdown of general and specific allowance as a percentage of gross portfolio loans(1) | ||||||||||||||||||||
General allowance | $ | 18,151 | $ | 18,204 | $ | 17,686 | $ | 17,365 | $ | 18,068 | ||||||||||
Specific allowance | 266 | 323 | 778 | 891 | 1,356 | |||||||||||||||
Total allowance to non-acquired loans | $ | 18,417 | $ | 18,527 | $ | 18,464 | $ | 18,256 | $ | 19,424 | ||||||||||
PCI loans | — | 52 | 52 | — | — | |||||||||||||||
Total allowance to gross portfolio loans with PCI loans | $ | 18,417 | $ | 18,579 | $ | 18,516 | $ | 18,256 | $ | 19,424 | ||||||||||
General allowance | 1.15 | % | 1.19 | % | 1.15 | % | 1.15 | % | 1.20 | % | ||||||||||
Specific allowance | 0.02 | % | 0.02 | % | 0.05 | % | 0.06 | % | 0.09 | % | ||||||||||
Total allowance to gross portfolio loans(1) | 1.17 | % | 1.21 | % | 1.20 | % | 1.21 | % | 1.29 | % | ||||||||||
Total allowance to gross portfolio loans with PCI loans(2) | 1.17 | % | 1.21 | % | 1.21 | % | 1.21 | % | 1.29 | % | ||||||||||
Allowance to non-acquired gross loans(3) | 1.20 | % | 1.25 | % | 1.25 | % | 1.26 | % | 1.35 | % | ||||||||||
Allowance+ Non-PCI FV Mark | $ | 18,815 | $ | 19,070 | $ | 19,090 | $ | 18,939 | $ | 20,174 | ||||||||||
Allowance+ Non-PCI FV Mark to gross portfolio loans | 1.19 | % | 1.24 | % | 1.24 | % | 1.26 | % | 1.34 | % |
____________________________________
(1) Portfolio loans include all loan portfolios except the
(2) There were no allowance for loan loss on the PCI portfolios prior to the three months ended
(3) Non-acquired loans include loans transferred from acquired pools following release of acquisition accounting FMV adjustments. Non-acquired loans exclude
CLASSIFIED AND SPECIAL MENTION ASSETS (UNAUDITED)
The following is a breakdown of the Company’s classified and special mention assets at
As of | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Classified loans | ||||||||||||||||||||
Substandard | $ | 5,211 | $ | 19,249 | $ | 26,863 | $ | 32,226 | $ | 40,306 | ||||||||||
Doubtful | — | — | — | — | — | |||||||||||||||
Loss | — | — | — | — | — | |||||||||||||||
Total classified loans | 5,211 | 19,249 | 26,863 | 32,226 | 40,306 | |||||||||||||||
Special mention loans | — | 7,672 | — | — | 96 | |||||||||||||||
Total classified and special mention loans | $ | 5,211 | $ | 26,921 | $ | 26,863 | $ | 32,226 | $ | 40,402 | ||||||||||
Classified loans | $ | 5,211 | $ | 19,249 | $ | 26,863 | $ | 32,226 | $ | 40,306 | ||||||||||
Classified securities | — | — | — | 482 | 651 | |||||||||||||||
Other real estate owned | — | 3,109 | 7,773 | 8,111 | 9,341 | |||||||||||||||
Total classified assets | $ | 5,211 | $ | 22,358 | $ | 34,636 | $ | 40,819 | $ | 50,298 | ||||||||||
Total classified assets as a percentage of total assets | 0.22 | % | 1.10 | % | 1.93 | % | 2.42 | % | 3.58 | % | ||||||||||
Total classified assets as a percentage of | 2.10 | % | 9.61 | % | 16.21 | % | 21.54 | % | 32.10 | % | ||||||||||
SUMMARY OF DEPOSITS (UNAUDITED)
(dollars in thousands) | Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||
Noninterest-bearing demand | $ | 445,778 | 21.68 | % | $ | 432,606 | 21.58 | % | $ | 423,165 | 22.18 | % | $ | 406,319 | 21.75 | % | $ | 362,079 | 20.74 | % | ||||||||||
Interest-bearing: | ||||||||||||||||||||||||||||||
Demand deposits | 790,481 | 38.45 | % | 764,482 | 38.14 | % | 685,023 | 35.90 | % | 651,639 | 34.89 | % | 590,159 | 33.81 | % | |||||||||||||||
Money market deposits | 372,717 | 18.13 | % | 355,582 | 17.74 | % | 351,262 | 18.41 | % | 355,680 | 19.04 | % | 340,725 | 19.52 | % | |||||||||||||||
Savings | 119,767 | 5.82 | % | 112,282 | 5.60 | % | 107,288 | 5.62 | % | 105,590 | 5.65 | % | 98,783 | 5.66 | % | |||||||||||||||
Certificates of deposit | 327,421 | 15.92 | % | 339,655 | 16.94 | % | 341,400 | 17.89 | % | 348,668 | 18.67 | % | 353,856 | 20.27 | % | |||||||||||||||
Total interest-bearing | 1,610,386 | 78.32 | % | 1,572,001 | 78.42 | % | 1,484,973 | 77.82 | % | 1,461,577 | 78.25 | % | 1,383,523 | 79.26 | % | |||||||||||||||
Total Deposits | $ | 2,056,164 | 100.00 | % | $ | 2,004,607 | 100.00 | % | $ | 1,908,138 | 100.00 | % | $ | 1,867,896 | 100.00 | % | $ | 1,745,602 | 100.00 | % | ||||||||||
Transaction accounts | $ | 1,728,743 | 84.08 | % | $ | 1,664,952 | 83.06 | % | $ | 1,566,738 | 82.11 | % | $ | 1,519,228 | 81.33 | % | $ | 1,391,746 | 79.73 | % |
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