Fourth Quarter 2022 Highlights
- Announced Merger of Equals with Shore Bancshares, Inc.: On
December 14, 2022 , the Company entered into a definitive agreement to undertake a merger of equals pursuant to which the Company and Bank will merge into Shore Bancshares, Inc. (NASDAQ: SHBI) ("Shore") in an all-stock transaction. The combined company will have total assets of approximately$6 .0 billion on a pro forma basis. Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies and which remains subject to shareholder and regulatory approval, as well as the satisfaction of customary closing conditions, holders of TCFC common stock will have the right to receive 2.3287 shares of Shore Bancshares, Inc. common stock. The merger is expected to close in the late second quarter or early third quarter of 2023.James M. Burke ,The Community Financial Corporation's current President and Chief Executive Officer, will serve as President and Chief Executive Officer of the combined company.
The Company incurred$1 .0 million of merger and acquisition costs during the year endedDecember 31, 2022 related to the transaction and anticipates additional expenses in 2023 related to the transaction.
- Record Earnings Per Share: Net income totaled
$7.6 million for the quarter endedDecember 31, 2022 , or$1.35 per diluted common share compared to net income of$6.8 million or$1.18 per diluted common share for the quarter endedDecember 31, 2021 and$7.6 million or$1.34 per diluted common share for the quarter endedSeptember 30, 2022 .
Return on average assets ("ROAA") and return on average common equity ("ROACE") were 1.28% and 16.61% for the three months endedDecember 31, 2022 compared to 1.18% and 13.00% for the three months endedDecember 31, 2021 and 1.31% and 15.97% for the three months endedSeptember 30, 2022 .
- Impact of Merger & Acquisition Costs and Sale of
Equity Investment : During the fourth quarter of 2022, the Company incurred$1 .0 million in merger related costs and recognized a gain of$0.7 million on the sale of its equity investment inInfinex Financial Holdings, Inc. (“Infinex”). The net impact of these events for the three months endedDecember 31, 2022 was a decrease to EPS of$0.05 per diluted share and a decrease to ROAA of five basis points. The resulting non-GAAP diluted EPS and non-GAAP ROAA were$1.40 and 1.33%, respectively.
Subsequent to the purchase of Infinex byAdvisor Group , the Bank continues to use Infinex as its broker of record for its wealth division.
- Expanding Net Interest Margin: Net interest margin increased to 3.64% for the quarter ended
December 31, 2022 from 3.47% for the third quarter of 2022. Loan and overall interest-earning asset yields increased 46 and 61 basis points to 4.92% and 4.50% in the fourth quarter of 2022 from 4.46% and 3.89% for the three months endedSeptember 30, 2022 . The Company's cost of funds increased 46 basis points for the comparable three month period from 0.43% to 0.89%.
The loan portfolio is positioned for rising rates with$442.8 million or 24% of net portfolio loans scheduled to reprice monthly or in the next three months and an additional$108.5 million or 6% repricing in the following nine months. The Bank's effective duration on the loan portfolio was 2.0 years atDecember 31, 2022 . If theFederal Open Market Committee ("FOMC") slows or pauses interest rate increases, the Company expects modest margin compression to occur as deposit rates begin to normalize in a more stable environment.
- Solid Loan Growth: Gross portfolio loans increased to
$1,821.1 million , an increase of$77.8 million or 17.9% annualized, compared to the prior quarter. Portfolio loans increased$242.3 million or 15.3% during the year endedDecember 31, 2022 . The loan pipeline atDecember 31, 2022 was$100.0 million compared to$192 .0 million atSeptember 30, 2022 .
Management anticipates moderate 2023 loan growth of between six and eight percent. Goals for lenders and business development teams have been further aligned to build on 2022 progress in acquiring customer operating deposit accounts. More modest loan goals in the current interest rate environment should contribute to building franchise-enhancing relationships with customers while mitigating potential margin compression from the use of more costly non-core funding sources.
- Deposits and Funding: During 2022, the Bank increased noninterest-bearing accounts by
$184.3 million to$630.1 million or 30.17% of deposits atDecember 31, 2022 from 21.68% of deposits atDecember 31, 2021 . Total deposits increased$32.3 million in 2022 from$2,056.2 million atDecember 31, 2021 to$2,088.5 million atDecember 31, 2022 . The stability in deposit balances coupled with significant loan growth required the Bank to use wholesale funding in the fourth quarter. The Bank's deposit cycle generally sees deposit balances decrease in the first and fourth quarters as business customers and municipalities use funds for operating needs and build in the second and third quarters.
AtDecember 31, 2022 , the Company had wholesale funding, which includes brokered deposits andFederal Home Loan Bank advances, of$133.5 million compared to$20.2 million atDecember 31, 2021 .
- Stable Asset Quality: Non-accrual loans, OREO and TDRs were
$6.5 million or 0.27% of total assets atDecember 31, 2022 compared to$6.7 million or 0.28% of total assets and$8.1 million or 0.35% of total assets atSeptember 30, 2022 andDecember 31, 2021 , respectively. Classified assets increased$0.9 million to$6.1 million atDecember 31, 2022 from$5.2 million atDecember 31, 2021 . The Company had no COVID-19 deferred loans atDecember 31, 2022 .
Management Commentary
"The fourth quarter capped a transformational year at Community Financial,” stated
Burke continued, “In the fourth quarter, we took a major step forward in our strategic vision agreeing to a merger of equals with Shore Bancshares. This strategic combination is expected to enhance long-term shareholder value and help us better serve the communities in which we live and work.
Results of Operations
(UNAUDITED) | |||||||||||||||
Three Months Ended | |||||||||||||||
(dollars in thousands) | 2022 | 2021 | $ Change | % Change | |||||||||||
Interest and dividend income | $ | 25,252 | $ | 17,778 | $ | 7,474 | 42.0 | % | |||||||
Interest expense | 4,821 | 897 | 3,924 | 437.5 | % | ||||||||||
Net interest income | 20,431 | 16,881 | 3,550 | 21.0 | % | ||||||||||
Provision for credit losses | 868 | — | 868 | — | % | ||||||||||
Provision for unfunded commitments | 145 | — | 145 | — | % | ||||||||||
Noninterest income | 2,289 | 2,290 | (1 | ) | — | % | |||||||||
Noninterest expense | 11,390 | 10,179 | 1,211 | 11.9 | % | ||||||||||
Income before income taxes | 10,317 | 8,992 | 1,325 | 14.7 | % | ||||||||||
Income tax expense | 2,702 | 2,241 | 461 | 20.6 | % | ||||||||||
Net income | $ | 7,615 | $ | 6,751 | $ | 864 | 12.8 | % |
(UNAUDITED) | |||||||||||||||
Years Ended | |||||||||||||||
(dollars in thousands) | 2022 | 2021 | $ Change | % Change | |||||||||||
Interest and dividend income | $ | 82,707 | $ | 70,559 | $ | 12,148 | 17.2 | % | |||||||
Interest expense | 9,182 | 4,125 | 5,057 | 122.6 | % | ||||||||||
Net interest income | 73,525 | 66,434 | 7,091 | 10.7 | % | ||||||||||
Provision for credit losses | 2,437 | 586 | 1,851 | 315.9 | % | ||||||||||
Provision for unfunded commitments | 146 | — | 146 | — | % | ||||||||||
Noninterest income | 6,393 | 7,906 | (1,513 | ) | (19.1 | )% | |||||||||
Noninterest expense | 39,434 | 39,152 | 282 | 0.7 | % | ||||||||||
Income before income taxes | 37,901 | 34,602 | 3,299 | 9.5 | % | ||||||||||
Income tax expense | 9,584 | 8,716 | 868 | 10.0 | % | ||||||||||
Net income | $ | 28,317 | $ | 25,886 | $ | 2,431 | 9.4 | % |
Net Interest Income
Net interest income for the comparable quarters increased primarily from increases in interest-earning asset yields and growth in loans partially offset by increased interest expense from higher funding costs. Net interest margin of 3.64% for the three months ended December 31, 2022 increased 42 basis points from 3.22% for the three months ended
Net interest income increased for the year ended
The Company’s cost of funds was 0.89% during the fourth quarter of 2022 compared to 0.43% for the prior quarter and increased from 0.17% for the three months ended
Management anticipates that net interest margins will contract slightly in the first quarter of 2023 as deposit betas are likely to increase due to more aggressive competition for funding. The average cost of deposits increased 52 basis points from 0.44% for the month of
Noninterest Income
Noninterest income was flat at
Noninterest income decreased
Noninterest Expense
Noninterest expense of
In addition, for the comparable periods, occupancy expense increased
Noninterest expense increased
Compensation and benefits were lower for the comparative periods due to lower health insurance claims, a lower average FTE count than the prior year and lower deferred compensation accruals. In addition, compensation and benefits expense has benefited from the Company's increased use of technology.
Noninterest expense in 2021 included a
The Company’s efficiency ratio was 50.13% and 49.34% for the three months and year ended
Income Tax Expense
The effective tax rate for the three months and year ended
Balance Sheet
Assets
Total assets increased
During the fourth quarter of 2022, total net loans increased 17.7% annualized or
Funding
Total deposits increased
At
During the year ended
The Company's common equity to assets ratio decreased to 7.76% at
On
Asset Quality
Allowance for credit losses ("ACL") and provision for credit losses ("PCL")1; Allowance for Loan Losses ("ALLL") and provision for loan losses ("PLL"); Classified and Non-Performing Assets
On
The impact at adoption was an increase to the ACL of
ACL balances increased to 1.26% of portfolio loans at
Management believes that the allowance is adequate at
Classified assets increased
During 2021, classified assets decreased
The ratio of non-accrual loans and OREO to total gross portfolio loans and OREO decreased 14 basis points from 0.48% at December 31, 2021 to 0.34% at December 31, 2022. The ratio of non-accrual loans, OREO and TDRs to total assets decreased eight basis points from 0.35% at December 31, 2021 to 0.27% at December 31, 2022.
Non-accrual loans decreased
________________________
1 The Company implemented the CECL accounting standard effective
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 - Certain statements contained in this news release may not be based on historical facts and are “forward-looking statements” within the meaning Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 or phrases such as “is optimistic,” “project,” “believe,” “expect,” “anticipate,” “estimate”, “assume” 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: (i) 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 future financial or business performance strategies or expectations; (ii) any statements of the plans, objectives, or expected benefits associated with the proposed merger of the Company with and into Shore Bancshares, Inc.; (iii) 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 undertaken or that we undertake in the future; (iv) plans and cost savings regarding branch closings or consolidation; (v) projections related to certain financial metrics, including with respect to the quarterly expense run rate; (vi) expected benefits of programs we introduce, including residential mortgage programs and retail and commercial credit card programs; and (vii) 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: (i) 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; (ii) 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); (iii) the impacts related to or resulting from Russia’s military action in
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 | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||||||||
Interest and Dividend Income | ||||||||||||||||||||
Loans, including fees | $ | 21,621 | $ | 18,735 | $ | 16,772 | $ | 15,610 | $ | 16,222 | ||||||||||
Interest and dividends on securities | 3,445 | 2,454 | 1,924 | 1,666 | 1,531 | |||||||||||||||
Interest on deposits with banks | 186 | 156 | 78 | 60 | 25 | |||||||||||||||
Total Interest and Dividend Income | 25,252 | 21,345 | 18,774 | 17,336 | 17,778 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 4,029 | 1,850 | 819 | 513 | 565 | |||||||||||||||
Long-term debt | 434 | 386 | 371 | 354 | 332 | |||||||||||||||
Total Interest Expense | 4,821 | 2,288 | 1,206 | 867 | 897 | |||||||||||||||
Net Interest Income (NII) | 20,431 | 19,057 | 17,568 | 16,469 | 16,881 | |||||||||||||||
Provision for credit losses | 868 | 694 | 425 | 450 | — | |||||||||||||||
Provision (recovery) for unfunded commitments | 145 | 6 | 26 | (31 | ) | — | ||||||||||||||
NII After Provision For Credit Losses | 19,418 | 18,357 | 17,117 | 16,050 | 16,881 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Loan appraisal, credit, and miscellaneous charges | 137 | 65 | 44 | 176 | 257 | |||||||||||||||
Net gain on sale of assets | 695 | — | — | — | — | |||||||||||||||
Unrealized gains (losses) on equity securities | 9 | (187 | ) | (155 | ) | (222 | ) | (45 | ) | |||||||||||
Loss on premises and equipment held for sale | — | — | — | — | (5 | ) | ||||||||||||||
Income from bank owned life insurance | 219 | 220 | 217 | 214 | 219 | |||||||||||||||
Service charges | 1,215 | 1,130 | 1,108 | 926 | 1,235 | |||||||||||||||
Referral fee income | 14 | — | — | 361 | 574 | |||||||||||||||
Net gains (losses) on sale of loans originated for sale | — | 1 | 1 | (4 | ) | 55 | ||||||||||||||
Loss on sale of loans | — | — | 209 | — | — | |||||||||||||||
Total Noninterest Income | 2,289 | 1,229 | 1,424 | 1,451 | 2,290 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Compensation and benefits | 5,584 | 5,116 | 5,051 | 5,055 | 5,265 | |||||||||||||||
OREO valuation allowance and expenses | — | — | — | 6 | 767 | |||||||||||||||
Merger and acquisition costs | 1,004 | — | — | — | — | |||||||||||||||
Sub Total | 6,588 | 5,116 | 5,051 | 5,061 | 6,032 | |||||||||||||||
Operating Expenses | ||||||||||||||||||||
Occupancy expense | 834 | 826 | 820 | 732 | 656 | |||||||||||||||
Advertising | 177 | 149 | 159 | 64 | 128 | |||||||||||||||
Data processing expense | 1,049 | 1,062 | 1,008 | 1,007 | 1,006 | |||||||||||||||
Professional fees | 991 | 923 | 845 | 731 | 937 | |||||||||||||||
Depreciation of premises and equipment | 181 | 177 | 150 | 149 | 139 | |||||||||||||||
185 | 160 | 177 | 179 | 90 | ||||||||||||||||
Core deposit intangible amortization | 90 | 97 | 102 | 109 | 115 | |||||||||||||||
Fraud losses | 179 | 37 | 30 | 40 | 16 | |||||||||||||||
Other expenses | 1,116 | 1,079 | 996 | 1,008 | 1,060 | |||||||||||||||
Total Operating Expenses | 4,802 | 4,510 | 4,287 | 4,019 | 4,147 | |||||||||||||||
Total Noninterest Expense | 11,390 | 9,626 | 9,338 | 9,080 | 10,179 | |||||||||||||||
Income before income taxes | 10,317 | 9,960 | 9,203 | 8,421 | 8,992 | |||||||||||||||
Income tax expense | 2,702 | 2,380 | 2,369 | 2,133 | 2,241 | |||||||||||||||
Net Income | $ | 7,615 | $ | 7,580 | $ | 6,834 | $ | 6,288 | $ | 6,751 |
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
CONDENSED CONSOLIDATED BALANCE SHEETS
(Audited) | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 11,511 | $ | 18,008 | $ | 16,164 | $ | 80,702 | $ | 108,990 | ||||||||||
Federal funds sold | 2,140 | 20,325 | 37,320 | — | — | |||||||||||||||
Interest-bearing deposits with banks | 11,822 | 14,970 | 34,659 | 32,460 | 30,664 | |||||||||||||||
Securities available for sale ("AFS"), at fair value | 462,746 | 464,502 | 485,456 | 507,527 | 497,839 | |||||||||||||||
Equity securities carried at fair value through income | 4,286 | 4,254 | 4,423 | 4,562 | 4,772 | |||||||||||||||
Non-marketable equity securities held in other financial institutions | 207 | 207 | 207 | 207 | 207 | |||||||||||||||
4,584 | 1,226 | 1,234 | 1,685 | 1,472 | ||||||||||||||||
Loans held for sale | — | — | — | 373 | — | |||||||||||||||
339 | 1,211 | 5,022 | 15,279 | 26,398 | ||||||||||||||||
Portfolio Loans Receivable net of allowance for credit losses of | 1,798,178 | 1,721,250 | 1,631,055 | 1,608,156 | 1,560,393 | |||||||||||||||
Net Loans | 1,798,517 | 1,722,461 | 1,636,077 | 1,623,435 | 1,586,791 | |||||||||||||||
10,835 | 10,835 | 10,835 | 10,835 | 10,835 | ||||||||||||||||
Premises and equipment, net | 21,308 | 21,626 | 21,802 | 21,304 | 21,427 | |||||||||||||||
Accrued interest receivable | 8,335 | 6,791 | 6,099 | 5,389 | 5,588 | |||||||||||||||
Investment in bank owned life insurance | 39,802 | 39,583 | 39,363 | 39,145 | 38,932 | |||||||||||||||
Core deposit intangible | 634 | 725 | 821 | 924 | 1,032 | |||||||||||||||
Net deferred tax assets | 24,657 | 24,755 | 20,223 | 15,523 | 9,033 | |||||||||||||||
Right of use assets - operating leases | 5,920 | 6,022 | 6,123 | 6,033 | 6,124 | |||||||||||||||
Other assets | 2,713 | 3,331 | 2,708 | 1,819 | 3,600 | |||||||||||||||
Total Assets | $ | 2,410,017 | $ | 2,359,621 | $ | 2,323,514 | $ | 2,351,923 | $ | 2,327,306 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Noninterest-bearing deposits | $ | 630,120 | $ | 647,432 | $ | 635,649 | $ | 644,385 | $ | 445,778 | ||||||||||
Interest-bearing deposits | 1,458,343 | 1,479,125 | 1,449,727 | 1,450,698 | 1,610,386 | |||||||||||||||
Total deposits | 2,088,463 | 2,126,557 | 2,085,376 | 2,095,083 | 2,056,164 | |||||||||||||||
Long-term debt | — | — | — | 12,213 | 12,231 | |||||||||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPs") | 12,000 | 12,000 | 12,000 | 12,000 | 12,000 | |||||||||||||||
Subordinated notes - 4.75% | 19,566 | 19,552 | 19,538 | 19,524 | 19,510 | |||||||||||||||
Lease liabilities - operating leases | 6,202 | 6,288 | 6,372 | 6,266 | 6,343 | |||||||||||||||
Accrued expenses and other liabilities | 17,775 | 16,070 | 15,357 | 13,697 | 12,925 | |||||||||||||||
Total Liabilities | 2,223,006 | 2,180,467 | 2,138,643 | 2,158,783 | 2,119,173 | |||||||||||||||
Stockholders' Equity | ||||||||||||||||||||
Common stock | 56 | 56 | 56 | 57 | 57 | |||||||||||||||
Additional paid in capital | 97,986 | 97,712 | 97,455 | 97,189 | 96,896 | |||||||||||||||
Retained earnings | 132,235 | 125,608 | 119,523 | 115,179 | 113,448 | |||||||||||||||
Accumulated other comprehensive losses | (43,092 | ) | (43,906 | ) | (31,847 | ) | (18,969 | ) | (1,952 | ) | ||||||||||
Unearned ESOP shares | (174 | ) | (316 | ) | (316 | ) | (316 | ) | (316 | ) | ||||||||||
Total Stockholders' Equity | 187,011 | 179,154 | 184,871 | 193,140 | 208,133 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,410,017 | $ | 2,359,621 | $ | 2,323,514 | $ | 2,351,923 | $ | 2,327,306 | ||||||||||
Common shares issued and outstanding | 5,648,435 | 5,644,186 | 5,649,729 | 5,686,799 | 5,718,528 |
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
SELECTED FINANCIAL INFORMATION AND RATIOS
Three Months Ended | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
KEY OPERATING RATIOS | ||||||||||||||||||||
Return on average assets ("ROAA") | 1.28 | % | 1.31 | % | 1.19 | % | 1.08 | % | 1.18 | % | ||||||||||
Pre-tax Pre-Provision ROAA** | 1.97 | 1.85 | 1.70 | 1.54 | 1.59 | |||||||||||||||
Return on average common equity ("ROACE") | 16.61 | 15.97 | 14.39 | 12.30 | 13.00 | |||||||||||||||
Pre-tax Pre-Provision ROACE** | 25.53 | 22.67 | 20.54 | 17.50 | 17.53 | |||||||||||||||
Return on Average Tangible Common Equity ("ROATCE")** | 17.88 | 17.18 | 15.50 | 13.22 | 13.97 | |||||||||||||||
Pre-tax Pre-Provision ROATCE** | 27.24 | 24.14 | 21.89 | 18.57 | 18.60 | |||||||||||||||
Average total equity to average total assets | 7.73 | 8.17 | 8.28 | 8.79 | 9.06 | |||||||||||||||
Interest rate spread | 3.24 | 3.26 | 3.14 | 3.05 | 3.17 | |||||||||||||||
Net interest margin | 3.64 | 3.47 | 3.25 | 3.12 | 3.22 | |||||||||||||||
Yield on loans portfolio | 4.92 | 4.46 | 4.13 | 3.99 | 4.13 | |||||||||||||||
Cost of funds | 0.89 | 0.43 | 0.23 | 0.17 | 0.17 | |||||||||||||||
Cost of deposits | 0.77 | 0.36 | 0.16 | 0.10 | 0.11 | |||||||||||||||
Cost of debt | 4.67 | 4.40 | 3.81 | 3.24 | 3.04 | |||||||||||||||
Efficiency ratio | 50.13 | 47.45 | 49.17 | 50.67 | 53.10 | |||||||||||||||
Efficiency ratio - Non-GAAP** | 46.80 | 46.97 | 48.63 | 50.06 | 52.50 | |||||||||||||||
Non-interest income to average assets | 0.39 | 0.21 | 0.25 | 0.25 | 0.40 | |||||||||||||||
Noninterest expense to average assets | 1.92 | 1.66 | 1.63 | 1.56 | 1.78 | |||||||||||||||
Net operating expense to average assets | 1.53 | 1.45 | 1.38 | 1.31 | 1.38 | |||||||||||||||
Net operating expense to average assets - Non-GAAP** | 1.35 | 1.43 | 1.36 | 1.29 | 1.36 | |||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 146.44 | 149.96 | 150.34 | 141.56 | 129.68 | |||||||||||||||
Net charge-offs to average portfolio loans | — | 0.02 | 0.10 | — | 0.04 | |||||||||||||||
COMMON SHARE DATA | ||||||||||||||||||||
Basic net income per common share | $ | 1.35 | $ | 1.34 | $ | 1.21 | $ | 1.11 | $ | 1.18 | ||||||||||
Diluted net income per common share | 1.35 | 1.34 | 1.21 | 1.10 | 1.18 | |||||||||||||||
Cash dividends paid per common share | 0.175 | 0.175 | 0.175 | 0.175 | 0.150 | |||||||||||||||
Basic - weighted average common shares outstanding | 5,638,059 | 5,636,640 | 5,647,821 | 5,688,221 | 5,711,746 | |||||||||||||||
Diluted - weighted average common shares outstanding | 5,645,703 | 5,644,822 | 5,657,733 | 5,699,038 | 5,723,011 |
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
SELECTED FINANCIAL INFORMATION AND RATIOS
Three Months Ended | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
ASSET QUALITY | ||||||||||||||||||||
Total assets | $ | 2,410,017 | $ | 2,359,621 | $ | 2,323,514 | $ | 2,351,923 | $ | 2,327,306 | ||||||||||
Total portfolio loans (1) | 1,821,068 | 1,743,277 | 1,652,459 | 1,629,538 | 1,578,810 | |||||||||||||||
Classified assets | 6,115 | 5,967 | 6,062 | 4,745 | 5,211 | |||||||||||||||
Allowance for credit losses | 22,890 | 22,027 | 21,404 | 21,382 | 18,417 | |||||||||||||||
Past due loans - 31 to 89 days | 604 | 713 | 900 | 386 | 568 | |||||||||||||||
Past due loans >=90 days | 438 | 428 | 147 | 1,233 | 961 | |||||||||||||||
Total past due loans (2) | 1,042 | 1,141 | 1,047 | 1,619 | 1,529 | |||||||||||||||
Non-accrual loans (3) | 6,115 | 6,290 | 6,235 | 7,465 | 7,631 | |||||||||||||||
Accruing troubled debt restructures ("TDRs") | 429 | 433 | 439 | 442 | 447 | |||||||||||||||
Non-accrual loans, OREO and TDRs | $ | 6,544 | $ | 6,723 | $ | 6,674 | $ | 7,907 | $ | 8,078 |
** 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 for
(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. At
SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued
SELECTED FINANCIAL INFORMATION AND RATIOS
Three Months Ended | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
ASSET QUALITY RATIOS (1) | ||||||||||||||||||||
Classified assets to total assets | 0.25 | % | 0.25 | % | 0.26 | % | 0.20 | % | 0.22 | % | ||||||||||
Classified assets to risk-based capital | 2.23 | 2.25 | 2.35 | 1.87 | 2.10 | |||||||||||||||
Allowance for credit losses to portfolio loans | 1.26 | 1.26 | 1.30 | 1.31 | 1.17 | |||||||||||||||
Allowance for credit losses to non-accrual loans | 374.33 | 350.19 | 343.29 | 286.43 | 241.34 | |||||||||||||||
Allowance for credit losses to nonperforming loans | 349.79 | 327.64 | 320.71 | 270.42 | 227.99 | |||||||||||||||
Past due loans - 31 to 89 days to portfolio loans | 0.03 | 0.04 | 0.05 | 0.02 | 0.04 | |||||||||||||||
Past due loans >=90 days to portfolio loans | 0.02 | 0.02 | 0.01 | 0.08 | 0.06 | |||||||||||||||
Total past due (delinquency) to portfolio loans | 0.06 | 0.07 | 0.06 | 0.10 | 0.10 | |||||||||||||||
Non-accrual loans to portfolio loans | 0.34 | 0.36 | 0.38 | 0.46 | 0.48 | |||||||||||||||
Non-accrual loans and TDRs to portfolio loans | 0.36 | 0.39 | 0.40 | 0.49 | 0.51 | |||||||||||||||
Non-accrual loans and OREO to total assets | 0.25 | 0.27 | 0.27 | 0.32 | 0.33 | |||||||||||||||
Non-accrual loans and OREO to portfolio loans and OREO | 0.34 | 0.36 | 0.38 | 0.46 | 0.48 | |||||||||||||||
Non-accrual loans, OREO and TDRs to total assets | 0.27 | 0.28 | 0.29 | 0.34 | 0.35 | |||||||||||||||
COMMON SHARE DATA | ||||||||||||||||||||
Book value per common share | $ | 33.11 | $ | 31.74 | $ | 32.72 | $ | 33.96 | $ | 36.40 | ||||||||||
Tangible book value per common share** | 31.08 | 29.69 | 30.66 | 31.90 | 34.32 | |||||||||||||||
Common shares outstanding at end of period | 5,648,435 | 5,644,186 | 5,649,729 | 5,686,799 | 5,718,528 | |||||||||||||||
OTHER DATA | ||||||||||||||||||||
Full-time equivalent employees | 196 | 199 | 190 | 191 | 186 | |||||||||||||||
Branches | 12 | 12 | 12 | 11 | 11 | |||||||||||||||
Loan Production Offices | 4 | 4 | 4 | 4 | 4 | |||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||
Tier 1 capital to average assets | 9.60 | % | 9.56 | % | 9.42 | % | 9.17 | % | 9.23 | % | ||||||||||
Tier 1 common capital to risk-weighted assets | 11.26 | 11.40 | 11.66 | 11.58 | 11.92 | |||||||||||||||
Tier 1 capital to risk-weighted assets | 11.87 | 12.05 | 12.34 | 12.28 | 12.64 | |||||||||||||||
Total risk-based capital to risk-weighted assets | 14.08 | 14.30 | 14.68 | 14.65 | 14.92 | |||||||||||||||
Common equity to assets | 7.76 | 7.59 | 7.96 | 8.21 | 8.94 | |||||||||||||||
Tangible common equity to tangible assets ** | 7.32 | 7.14 | 7.49 | 7.75 | 8.48 |
** 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) | ||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Interest and Dividend Income | ||||||||||||||||
Loans, including fees | $ | 21,621 | $ | 16,222 | $ | 72,738 | $ | 65,476 | ||||||||
Interest and dividends on securities | 3,445 | 1,531 | 9,489 | 4,992 | ||||||||||||
Interest on deposits with banks | 186 | 25 | 480 | 91 | ||||||||||||
Total Interest and Dividend Income | 25,252 | 17,778 | 82,707 | 70,559 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 4,029 | 565 | 7,211 | 2,601 | ||||||||||||
Short-term borrowings | 358 | — | 426 | — | ||||||||||||
Long-term debt | 434 | 332 | 1,545 | 1,524 | ||||||||||||
Total Interest Expense | 4,821 | 897 | 9,182 | 4,125 | ||||||||||||
Net Interest Income ("NII") | 20,431 | 16,881 | 73,525 | 66,434 | ||||||||||||
Provision for credit losses | 868 | — | 2,437 | 586 | ||||||||||||
Provision for unfunded commitments | 145 | — | 146 | — | ||||||||||||
NII After Provision For Credit Losses | 19,418 | 16,881 | 70,942 | 65,848 | ||||||||||||
Noninterest Income | ||||||||||||||||
Loan appraisal, credit, and misc. charges | 137 | 257 | 422 | 528 | ||||||||||||
Gain on sale of assets | 695 | — | 695 | 68 | ||||||||||||
Net gains on sale of investment securities | — | — | — | 586 | ||||||||||||
Unrealized gains (losses) on equity securities | 9 | (45 | ) | (555 | ) | (139 | ) | |||||||||
Loss on premises and equipment held for sale | — | (5 | ) | — | (25 | ) | ||||||||||
Income from bank owned life insurance | 219 | 219 | 870 | 871 | ||||||||||||
Service charges | 1,215 | 1,235 | 4,379 | 4,301 | ||||||||||||
Referral fee income | 14 | 574 | 375 | 1,822 | ||||||||||||
Net gains (losses) on sale of loans originated for sale | — | 55 | (2 | ) | 85 | |||||||||||
Gains (losses) on sale of loans | — | — | 209 | (191 | ) | |||||||||||
Total Noninterest Income | 2,289 | 2,290 | 6,393 | 7,906 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Compensation and benefits | 5,584 | 5,265 | 20,806 | 21,035 | ||||||||||||
OREO valuation allowance and expenses | — | 767 | 6 | 1,456 | ||||||||||||
Merger and acquisition costs | 1,004 | — | 1,004 | — | ||||||||||||
Sub-total | 6,588 | 6,032 | 21,816 | 22,491 | ||||||||||||
Operating Expense | ||||||||||||||||
Occupancy expense | 834 | 656 | 3,212 | 2,836 | ||||||||||||
Advertising | 177 | 128 | 549 | 500 | ||||||||||||
Data processing expense | 1,049 | 1,006 | 4,126 | 3,772 | ||||||||||||
Professional fees | 991 | 937 | 3,490 | 2,857 | ||||||||||||
Depreciation of premises and equipment | 181 | 139 | 657 | 558 | ||||||||||||
185 | 90 | 701 | 602 | |||||||||||||
Core deposit intangible amortization | 90 | 115 | 398 | 495 | ||||||||||||
Fraud losses | 179 | 16 | 286 | 1,260 | ||||||||||||
Other expenses | 1,116 | 1,060 | 4,199 | 3,781 | ||||||||||||
Total Operating Expense | 4,802 | 4,147 | 17,618 | 16,661 | ||||||||||||
Total Noninterest Expense | 11,390 | 10,179 | 39,434 | 39,152 | ||||||||||||
Income before income taxes | 10,317 | 8,992 | 37,901 | 34,602 | ||||||||||||
Income tax expense | 2,702 | 2,241 | 9,584 | 8,716 | ||||||||||||
Net Income | $ | 7,615 | $ | 6,751 | $ | 28,317 | $ | 25,886 |
SUPPLEMENTAL YEAR TO DATE FINANCIAL DATA (UNAUDITED)
Years Ended | ||||||||
2022 | 2021 | |||||||
KEY OPERATING RATIOS | ||||||||
Return on average assets ("ROAA") | 1.22 | % | 1.19 | % | ||||
Pre-tax Pre-Provision ROAA** | 1.77 | 1.65 | ||||||
Return on average common equity ("ROACE") | 14.76 | 12.65 | ||||||
Pre-tax Pre-Provision ROACE** | 21.45 | 17.44 | ||||||
Return on Average Tangible Common Equity ("ROATCE")** | 15.88 | 13.64 | ||||||
Pre-tax Pre-Provision ROATCE** | 22.84 | 18.53 | ||||||
Average total equity to average total assets | 8.24 | 9.44 | ||||||
Interest rate spread | 3.18 | 3.28 | ||||||
Net interest margin | 3.38 | 3.34 | ||||||
Cost of funds | 0.43 | 0.21 | ||||||
Cost of deposits | 0.35 | 0.14 | ||||||
Cost of debt | 4.10 | 2.79 | ||||||
Efficiency ratio | 49.34 | 52.67 | ||||||
Efficiency ratio - Non-GAAP** | 48.02 | 52.00 | ||||||
Non-interest income to average assets | 0.10 | 0.11 | ||||||
Noninterest expense to average assets | 1.69 | 1.81 | ||||||
Net operating expense to average assets | 1.42 | 1.44 | ||||||
Net operating expenses to average assets - Non-GAAP** | 1.36 | 1.42 | ||||||
Average interest-earning assets to average interest-bearing liabilities | 147.05 | 130.61 | ||||||
Net charge-offs to average portfolio loans | 0.03 | 0.11 | ||||||
COMMON SHARE DATA | ||||||||
Basic net income per common share | $ | 5.01 | $ | 4.47 | ||||
Diluted net income per common share | 5.00 | 4.47 | ||||||
Cash dividends paid per common share | 0.700 | 0.575 | ||||||
Weighted average common shares outstanding: | ||||||||
Basic | 5,652,189 | 5,788,003 | ||||||
Diluted | 5,659,629 | 5,797,525 |
____________________________________
** Non-GAAP financial measure. See reconciliation of GAAP and NON-GAAP measures.
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) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Total assets | $ | 2,410,017 | $ | 2,359,621 | $ | 2,323,514 | $ | 2,351,923 | $ | 2,327,306 | ||||||||||
Less: Intangible assets | ||||||||||||||||||||
10,835 | 10,835 | 10,835 | 10,835 | 10,835 | ||||||||||||||||
Core deposit intangible | 634 | 725 | 821 | 924 | 1,032 | |||||||||||||||
Total intangible assets | 11,469 | 11,560 | 11,656 | 11,759 | 11,867 | |||||||||||||||
Tangible assets | $ | 2,398,548 | $ | 2,348,061 | $ | 2,311,858 | $ | 2,340,164 | $ | 2,315,439 | ||||||||||
Total common equity | $ | 187,011 | $ | 179,154 | $ | 184,871 | $ | 193,140 | $ | 208,133 | ||||||||||
Less: Intangible assets | 11,469 | 11,560 | 11,656 | 11,759 | 11,867 | |||||||||||||||
Tangible common equity | $ | 175,542 | $ | 167,594 | $ | 173,215 | $ | 181,381 | $ | 196,266 | ||||||||||
Common shares outstanding at end of period | 5,648,435 | 5,644,186 | 5,649,729 | 5,686,799 | 5,718,528 | |||||||||||||||
Common equity to assets | 7.76 | % | 7.59 | % | 7.96 | % | 8.21 | % | 8.94 | % | ||||||||||
Tangible common equity to tangible assets | 7.32 | % | 7.14 | % | 7.49 | % | 7.75 | % | 8.48 | % | ||||||||||
Common book value per share | $ | 33.11 | $ | 31.74 | $ | 32.72 | $ | 33.96 | $ | 36.40 | ||||||||||
Tangible common book value per share | $ | 31.08 | $ | 29.69 | $ | 30.66 | $ | 31.90 | $ | 34.32 |
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)
This financial information includes certain operating performance measures, which exclude merger and acquisition costs, and core deposit intangibles, that are not considered part of recurring operations. 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.
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Efficiency ratio - GAAP basis | ||||||||||||||||||||||||||||
Noninterest expense | $ | 11,390 | $ | 9,626 | $ | 9,338 | $ | 9,080 | $ | 10,179 | $ | 39,434 | $ | 39,152 | ||||||||||||||
Net interest income plus noninterest income | 22,720 | 20,286 | 18,992 | 17,920 | 19,171 | 79,918 | 74,340 | |||||||||||||||||||||
Efficiency ratio - GAAP basis | 50.13 | % | 47.45 | % | 49.17 | % | 50.67 | % | 53.10 | % | 49.34 | % | 52.67 | % | ||||||||||||||
Efficiency ratio - Non-GAAP basis | ||||||||||||||||||||||||||||
Noninterest Expense | $ | 11,390 | $ | 9,626 | $ | 9,338 | $ | 9,080 | $ | 10,179 | $ | 39,434 | $ | 39,152 | ||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||
Merger and acquisition costs | (1,004 | ) | — | — | — | — | (1,004 | ) | — | |||||||||||||||||||
Core deposit intangible amortization | (90 | ) | (97 | ) | (102 | ) | (109 | ) | (115 | ) | (398 | ) | (495 | ) | ||||||||||||||
Noninterest expense - as adjusted | $ | 10,296 | $ | 9,529 | $ | 9,236 | $ | 8,971 | $ | 10,064 | $ | 38,032 | $ | 38,657 | ||||||||||||||
Net interest income plus noninterest income | $ | 22,720 | $ | 20,286 | $ | 18,992 | $ | 17,920 | $ | 19,171 | $ | 79,918 | $ | 74,340 | ||||||||||||||
Less: Gain on Infinex sale | (721 | ) | — | — | — | — | (721 | ) | — | |||||||||||||||||||
Net interest income plus noninterest income - adjusted | $ | 21,999 | $ | 20,286 | $ | 18,992 | $ | 17,920 | $ | 19,171 | $ | 79,197 | $ | 74,340 | ||||||||||||||
Efficiency ratio Non-GAAP basis | 46.80 | % | 46.97 | % | 48.63 | % | 50.06 | % | 52.50 | % | 48.02 | % | 52.00 | % |
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)
Reconciliation of US GAAP Net Income, Earnings Per Share (EPS), Return on Average Assets (ROAA) and Return on Average Common Equity (ROACE) to Non-GAAP Operating Net Income, EPS, ROAA and ROACE
This financial information includes certain operating performance measures, which exclude merger and acquisition costs, and core deposit intangibles, that are not considered part of recurring operations. 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.
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
(dollars in thousands, except per share amounts) | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Net income (loss) (as reported) | $ | 7,615 | $ | 7,580 | $ | 6,834 | $ | 6,288 | $ | 6,751 | $ | 28,317 | $ | 25,886 | ||||||||||||||
Merger and acquisition costs (net of tax) | 741 | — | — | — | — | 750 | — | |||||||||||||||||||||
Core deposit intangible amortization (net of tax) | 66 | 74 | 76 | 81 | 86 | 297 | 370 | |||||||||||||||||||||
Less: Gain on Infinex sale (net of tax) | (532 | ) | — | — | — | — | (539 | ) | — | |||||||||||||||||||
Non-GAAP operating net income | $ | 7,890 | $ | 7,654 | $ | 6,910 | $ | 6,369 | $ | 6,837 | $ | 28,826 | $ | 26,256 | ||||||||||||||
GAAP diluted earnings per share ("EPS") | $ | 1.35 | $ | 1.34 | $ | 1.21 | $ | 1.10 | $ | 1.18 | $ | 5.00 | $ | 4.47 | ||||||||||||||
Non-GAAP operating diluted EPS | $ | 1.40 | $ | 1.36 | $ | 1.22 | $ | 1.12 | $ | 1.19 | $ | 5.09 | $ | 4.53 | ||||||||||||||
GAAP return on average assets ("ROAA") | 1.28 | % | 1.31 | % | 1.19 | % | 1.08 | % | 1.18 | % | 1.22 | % | 1.19 | % | ||||||||||||||
Non-GAAP operating ROAA | 1.33 | % | 1.32 | % | 1.21 | % | 1.10 | % | 1.19 | % | 1.24 | % | 1.21 | % | ||||||||||||||
GAAP return on average common equity ("ROACE") | 16.61 | % | 15.97 | % | 14.39 | % | 12.30 | % | 13.00 | % | 14.76 | % | 12.65 | % | ||||||||||||||
Non-GAAP operating ROACE | 17.21 | % | 16.13 | % | 14.55 | % | 12.46 | % | 13.17 | % | 15.02 | % | 12.83 | % | ||||||||||||||
Weighted average common shares outstanding | 5,645,703 | 5,644,822 | 5,657,733 | 5,699,038 | 5,723,011 | 5,659,629 | 5,797,525 | |||||||||||||||||||||
Average assets | $ | 2,372,263 | $ | 2,322,315 | $ | 2,293,536 | $ | 2,325,992 | $ | 2,293,264 | $ | 2,328,601 | $ | 2,167,859 | ||||||||||||||
Average equity | $ | 183,359 | $ | 189,838 | $ | 189,992 | $ | 204,554 | $ | 207,745 | $ | 191,872 | $ | 204,643 |
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, and exclude merger and acquisition costs and he Infinex equity settlement, 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, and exclude merger and acquisition costs and the Infinex equity settlement. 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 | Years Ended | |||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Net income (as reported) | $ | 7,615 | $ | 7,580 | $ | 6,834 | $ | 6,288 | $ | 6,751 | $ | 28,317 | $ | 25,886 | ||||||||||||||
Provision for credit losses & unfunded commitments | 1,013 | 700 | 451 | 419 | — | 2,583 | 586 | |||||||||||||||||||||
Income tax expenses | 2,702 | 2,380 | 2,369 | 2,133 | 2,241 | 9,584 | 8,716 | |||||||||||||||||||||
Merger and acquisition costs | 1,004 | — | — | — | — | 1,004 | — | |||||||||||||||||||||
Core deposit intangible amortization | 90 | 97 | 102 | 109 | 115 | 398 | 495 | |||||||||||||||||||||
Less: Gain on Infinex sale | (721 | ) | — | — | — | — | (721 | ) | — | |||||||||||||||||||
Pre-tax Pre-Provision income | $ | 11,703 | $ | 10,757 | $ | 9,756 | $ | 8,949 | $ | 9,107 | $ | 41,165 | $ | 35,683 | ||||||||||||||
GAAP ROAA | 1.28 | % | 1.31 | % | 1.19 | % | 1.08 | % | 1.18 | % | 1.22 | % | 1.19 | % | ||||||||||||||
Pre-tax Pre-Provision ROAA | 1.97 | % | 1.85 | % | 1.70 | % | 1.54 | % | 1.59 | % | 1.77 | % | 1.65 | % | ||||||||||||||
GAAP ROACE | 16.61 | % | 15.97 | % | 14.39 | % | 12.30 | % | 13.00 | % | 14.76 | % | 12.65 | % | ||||||||||||||
Pre-tax Pre-Provision ROACE | 25.53 | % | 22.67 | % | 20.54 | % | 17.50 | % | 17.53 | % | 21.45 | % | 17.44 | % | ||||||||||||||
Average assets | $ | 2,372,263 | $ | 2,322,315 | $ | 2,293,536 | $ | 2,325,992 | $ | 2,293,264 | $ | 2,328,601 | $ | 2,167,859 | ||||||||||||||
Average equity | $ | 183,359 | $ | 189,838 | $ | 189,992 | $ | 204,554 | $ | 207,745 | $ | 191,872 | $ | 204,643 | ||||||||||||||
Average tangible assets | $ | 2,360,735 | $ | 2,310,692 | $ | 2,281,813 | $ | 2,314,163 | $ | 2,281,322 | $ | 2,316,926 | $ | 2,155,734 | ||||||||||||||
Average tangible common equity | $ | 171,831 | $ | 178,215 | $ | 178,269 | $ | 192,725 | $ | 195,803 | $ | 180,197 | $ | 192,518 |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||
Net income (as reported) | $ | 7,615 | $ | 7,580 | $ | 6,834 | $ | 6,288 | $ | 6,751 | $ | 28,317 | $ | 25,886 | ||||||||||||||
Core deposit intangible amortization (net of tax) | 66 | 74 | 76 | 81 | 86 | 297 | 370 | |||||||||||||||||||||
Net earnings applicable to common shareholders | $ | 7,681 | $ | 7,654 | $ | 6,910 | $ | 6,369 | $ | 6,837 | $ | 28,614 | $ | 26,256 | ||||||||||||||
Net income (as reported) | $ | 7,615 | $ | 7,580 | $ | 6,834 | $ | 6,288 | $ | 6,751 | $ | 28,317 | $ | 25,886 | ||||||||||||||
Provision for credit losses & unfunded commitments | 1,013 | 700 | 451 | 419 | — | 2,583 | 586 | |||||||||||||||||||||
Income tax expenses | 2,702 | 2,380 | 2,369 | 2,133 | 2,241 | 9,584 | 8,716 | |||||||||||||||||||||
Merger and acquisition costs | 1,004 | — | — | — | — | 1,004 | — | |||||||||||||||||||||
Core deposit intangible amortization | 90 | 97 | 102 | 109 | 115 | 398 | 495 | |||||||||||||||||||||
Less: Gain on Infinex sale | (721 | ) | — | — | — | — | (721 | ) | — | |||||||||||||||||||
Pre-tax Pre-Provision income | $ | 11,703 | $ | 10,757 | $ | 9,756 | $ | 8,949 | $ | 9,107 | $ | 41,165 | $ | 35,683 | ||||||||||||||
ROATCE | 17.88 | % | 17.18 | % | 15.50 | % | 13.22 | % | 13.97 | % | 15.88 | % | 13.64 | % | ||||||||||||||
Pre-tax Pre-Provision ROATCE | 27.24 | % | 24.14 | % | 21.89 | % | 18.57 | % | 18.60 | % | 22.84 | % | 18.53 | % | ||||||||||||||
Average tangible common equity | $ | 171,831 | $ | 178,215 | $ | 178,269 | $ | 192,725 | $ | 195,803 | $ | 180,197 | $ | 192,518 |
AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST INCOME (UNAUDITED)
Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
(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 | $ | 1,217,998 | $ | 15,010 | 4.93 | % | $ | 1,099,088 | $ | 10,911 | 3.97 | % | $ | 1,217,998 | $ | 15,010 | 4.93 | % | $ | 1,205,675 | $ | 13,117 | 4.35 | % | ||||||||||||||||||||
Residential first mortgages | 79,859 | 732 | 3.67 | 93,997 | 756 | 3.22 | 79,859 | 732 | 3.67 | 82,336 | 715 | 3.47 | ||||||||||||||||||||||||||||||||
Residential rentals | 322,135 | 3,393 | 4.21 | 173,238 | 1,760 | 4.06 | 322,135 | 3,393 | 4.21 | 223,532 | 2,286 | 4.09 | ||||||||||||||||||||||||||||||||
Construction and land development | 20,194 | 342 | 6.77 | 38,345 | 431 | 4.50 | 20,194 | 342 | 6.77 | 27,770 | 386 | 5.56 | ||||||||||||||||||||||||||||||||
Home equity and second mortgages | 25,442 | 426 | 6.70 | 26,160 | 232 | 3.55 | 25,442 | 426 | 6.70 | 25,612 | 352 | 5.50 | ||||||||||||||||||||||||||||||||
Commercial loans | 27,619 | 776 | 11.24 | 52,765 | 626 | 4.75 | 27,619 | 776 | 11.24 | 52,280 | 865 | 6.62 | ||||||||||||||||||||||||||||||||
Commercial equipment loans | 78,965 | 814 | 4.12 | 61,851 | 634 | 4.10 | 78,965 | 814 | 4.12 | 76,392 | 781 | 4.09 | ||||||||||||||||||||||||||||||||
SBA PPP loans | 482 | 34 | 28.22 | 40,376 | 847 | 8.39 | 482 | 34 | 28.22 | 2,595 | 160 | 24.66 | ||||||||||||||||||||||||||||||||
Consumer loans | 5,987 | 94 | 6.28 | 2,629 | 25 | 3.80 | 5,987 | 94 | 6.28 | 5,082 | 73 | 5.75 | ||||||||||||||||||||||||||||||||
Allowance for credit losses | (22,275 | ) | — | — | (18,434 | ) | — | — | (22,275 | ) | — | — | (21,667 | ) | — | — | ||||||||||||||||||||||||||||
Net loans (1) | 1,756,406 | 21,621 | 4.92 | 1,570,015 | 16,222 | 4.13 | 1,756,406 | 21,621 | 4.92 | 1,679,607 | 18,735 | 4.46 | ||||||||||||||||||||||||||||||||
Taxable investment securities | 445,252 | 3,329 | 2.99 | 465,771 | 1,441 | 1.24 | 445,252 | 3,329 | 2.99 | 464,560 | 2,338 | 2.01 | ||||||||||||||||||||||||||||||||
Nontaxable investment securities | 21,208 | 115 | 2.17 | 17,509 | 90 | 2.06 | 21,208 | 115 | 2.17 | 21,225 | 116 | 2.19 | ||||||||||||||||||||||||||||||||
Interest-bearing deposits in other banks | 14,257 | 110 | 3.09 | 41,736 | 25 | 0.24 | 14,257 | 110 | 3.09 | 18,930 | 85 | 1.80 | ||||||||||||||||||||||||||||||||
Federal funds sold | 8,004 | 77 | 3.85 | — | — | — | 8,004 | 77 | 3.85 | 11,163 | 71 | 2.54 | ||||||||||||||||||||||||||||||||
Total Interest-Earning Assets | 2,245,127 | 25,252 | 4.50 | 2,095,031 | 17,778 | 3.39 | 2,245,127 | 25,252 | 4.50 | 2,195,485 | 21,345 | 3.89 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 13,203 | 100,480 | 13,203 | 18,975 | ||||||||||||||||||||||||||||||||||||||||
10,835 | 10,835 | 10,835 | 10,835 | |||||||||||||||||||||||||||||||||||||||||
Core deposit intangible | 693 | 1,107 | 693 | 788 | ||||||||||||||||||||||||||||||||||||||||
Other assets | 102,405 | 85,811 | 102,405 | 96,232 | ||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 2,372,263 | $ | 2,293,264 | $ | 2,372,263 | $ | 2,322,315 | ||||||||||||||||||||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 634,187 | $ | — | — | % | $ | 449,272 | $ | — | — | % | $ | 634,187 | $ | — | — | % | $ | 644,606 | $ | — | — | % | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Savings | 124,537 | 46 | 0.15 | 114,123 | 14 | 0.05 | 124,537 | 46 | 0.15 | 121,450 | 15 | 0.05 | ||||||||||||||||||||||||||||||||
Demand deposits | 669,722 | 3,101 | 1.85 | 754,656 | 87 | 0.05 | 669,722 | 3,101 | 1.85 | 620,109 | 1,499 | 0.97 | ||||||||||||||||||||||||||||||||
Money market deposits | 361,695 | 221 | 0.24 | 369,414 | 100 | 0.11 | 361,695 | 221 | 0.24 | 378,251 | 99 | 0.10 | ||||||||||||||||||||||||||||||||
Certificates of deposit | 309,321 | 661 | 0.85 | 333,658 | 364 | 0.44 | 309,321 | 661 | 0.85 | 304,361 | 237 | 0.31 | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,465,275 | 4,029 | 1.10 | 1,571,851 | 565 | 0.14 | 1,465,275 | 4,029 | 1.10 | 1,424,171 | 1,850 | 0.52 | ||||||||||||||||||||||||||||||||
Total Deposits | 2,099,462 | 4,029 | 0.77 | 2,021,123 | 565 | 0.11 | 2,099,462 | 4,029 | 0.77 | 2,068,777 | 1,850 | 0.36 | ||||||||||||||||||||||||||||||||
Long-term debt | — | — | — | 12,237 | 6 | 0.20 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Short-term debt | 36,332 | 358 | 3.94 | — | — | — | 36,332 | 358 | 3.94 | 8,310 | 52 | 2.50 | ||||||||||||||||||||||||||||||||
Subordinated Notes | 19,557 | 252 | 5.15 | 19,501 | 252 | 5.17 | 19,557 | 252 | 5.15 | 19,543 | 252 | 5.16 | ||||||||||||||||||||||||||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures | 12,000 | 182 | 6.07 | 12,000 | 74 | 2.47 | 12,000 | 182 | 6.07 | 12,000 | 134 | 4.47 | ||||||||||||||||||||||||||||||||
Total Debt | 67,889 | 792 | 4.67 | 43,738 | 332 | 3.04 | 67,889 | 792 | 4.67 | 39,853 | 438 | 4.40 | ||||||||||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 1,533,164 | 4,821 | 1.26 | 1,615,589 | 897 | 0.22 | 1,533,164 | 4,821 | 1.26 | 1,464,024 | 2,288 | 0.63 | ||||||||||||||||||||||||||||||||
Total Funds | 2,167,351 | 4,821 | 0.89 | 2,064,861 | 897 | 0.17 | 2,167,351 | 4,821 | 0.89 | 2,108,630 | 2,288 | 0.43 | ||||||||||||||||||||||||||||||||
Other liabilities | 21,553 | 20,658 | 21,553 | 23,847 | ||||||||||||||||||||||||||||||||||||||||
Stockholders' equity | 183,359 | 207,745 | 183,359 | 189,838 | ||||||||||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,372,263 | $ | 2,293,264 | $ | 2,372,263 | $ | 2,322,315 | ||||||||||||||||||||||||||||||||||||
Net interest income | $ | 20,431 | $ | 16,881 | $ | 20,431 | $ | 19,057 | ||||||||||||||||||||||||||||||||||||
Interest rate spread | 3.24 | % | 3.17 | % | 3.24 | % | 3.26 | % | ||||||||||||||||||||||||||||||||||||
Net yield on interest-earning assets | 3.64 | % | 3.22 | % | 3.64 | % | 3.47 | % | ||||||||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 146.44 | % | 129.68 | % | 146.44 | % | 149.96 | % | ||||||||||||||||||||||||||||||||||||
Average loans to average deposits | 83.66 | % | 77.68 | % | 83.66 | % | 81.19 | % | ||||||||||||||||||||||||||||||||||||
Average transaction deposits to total average deposits ** | 85.27 | % | 83.49 | % | 85.27 | % | 85.29 | % | ||||||||||||||||||||||||||||||||||||
Cost of funds | 0.89 | % | 0.17 | % | 0.89 | % | 0.43 | % | ||||||||||||||||||||||||||||||||||||
Cost of deposits | 0.77 | % | 0.11 | % | 0.77 | % | 0.36 | % | ||||||||||||||||||||||||||||||||||||
Cost of debt | 4.67 | % | 3.04 | % | 4.67 | % | 4.40 | % |
(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 | ||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | ||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Commercial real estate | $ | 1,179,776 | $ | 50,706 | 4.30 | % | $ | 1,085,823 | $ | 43,536 | 4.01 | % | ||||||||||
Residential first mortgages | 83,485 | 2,889 | 3.46 | 107,011 | 3,250 | 3.04 | ||||||||||||||||
Residential rentals | 234,800 | 9,509 | 4.05 | 151,606 | 6,180 | 4.08 | ||||||||||||||||
Construction and land development | 27,947 | 1,496 | 5.35 | 36,891 | 1,658 | 4.49 | ||||||||||||||||
Home equity and second mortgages | 25,774 | 1,298 | 5.04 | 28,051 | 977 | 3.48 | ||||||||||||||||
Commercial loans | 42,303 | 2,708 | 6.40 | 46,390 | 2,032 | 4.38 | ||||||||||||||||
Commercial equipment loans | 71,416 | 2,937 | 4.11 | 60,845 | 2,567 | 4.22 | ||||||||||||||||
SBA PPP loans | 8,770 | 960 | 10.95 | 82,901 | 5,203 | 6.28 | ||||||||||||||||
Consumer loans | 4,590 | 235 | 5.12 | 1,783 | 73 | 4.09 | ||||||||||||||||
Allowance for credit losses | (21,593 | ) | — | — | (18,788 | ) | — | — | ||||||||||||||
Loan portfolio (1) | 1,657,268 | 72,738 | 4.39 | 1,582,513 | 65,476 | 4.14 | ||||||||||||||||
Taxable investment securities | 469,393 | 9,046 | 1.93 | 336,267 | 4,623 | 1.37 | ||||||||||||||||
Nontaxable investment securities | 20,325 | 442 | 2.17 | 17,515 | 369 | 2.11 | ||||||||||||||||
Interest-bearing deposits in other banks | 24,844 | 319 | 1.28 | 33,095 | 70 | 0.21 | ||||||||||||||||
Federal funds sold | 6,371 | 162 | 2.54 | 20,916 | 21 | 0.10 | ||||||||||||||||
Total Interest-Earning Assets | 2,178,201 | 82,707 | 3.80 | 1,990,306 | 70,559 | 3.55 | ||||||||||||||||
Cash and cash equivalents | 43,993 | 78,849 | ||||||||||||||||||||
10,835 | 10,835 | |||||||||||||||||||||
Core deposit intangible | 840 | 1,290 | ||||||||||||||||||||
Other assets | 94,732 | 86,579 | ||||||||||||||||||||
Total Assets | $ | 2,328,601 | $ | 2,167,859 | ||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 634,805 | $ | — | — | % | $ | 417,935 | $ | — | — | % | ||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Savings | 121,975 | 92 | 0.08 | 108,189 | 54 | 0.05 | ||||||||||||||||
Demand deposits | 621,755 | 5,133 | 0.83 | 660,330 | 345 | 0.05 | ||||||||||||||||
Money market deposits | 376,039 | 523 | 0.14 | 358,006 | 397 | 0.11 | ||||||||||||||||
Certificates of deposit | 313,429 | 1,463 | 0.47 | 342,755 | 1,805 | 0.53 | ||||||||||||||||
Total Interest-bearing deposits | 1,433,198 | 7,211 | 0.50 | 1,469,280 | 2,601 | 0.18 | ||||||||||||||||
Total Deposits | 2,068,003 | 7,211 | 0.35 | 1,887,215 | 2,601 | 0.14 | ||||||||||||||||
Debt: | ||||||||||||||||||||||
Long-term debt | 3,848 | 48 | 1.25 | 23,072 | 219 | 0.95 | ||||||||||||||||
Short-term borrowings | 12,696 | 426 | 3.36 | — | — | — | ||||||||||||||||
Subordinated Notes | 19,536 | 1,006 | 5.15 | 19,488 | 1,006 | 5.16 | ||||||||||||||||
Guaranteed preferred beneficial interest in junior subordinated debentures | 12,000 | 491 | 4.09 | 12,000 | 299 | 2.49 | ||||||||||||||||
Total Debt | 48,080 | 1,971 | 4.10 | 54,560 | 1,524 | 2.79 | ||||||||||||||||
Total Interest-Bearing Liabilities | 1,481,278 | 9,182 | 0.62 | 1,523,840 | 4,125 | 0.27 | ||||||||||||||||
Total funds | 2,116,083 | 9,182 | 0.43 | 1,941,775 | 4,125 | 0.21 | ||||||||||||||||
Other liabilities | 20,646 | 21,441 | ||||||||||||||||||||
Stockholders' equity | 191,872 | 204,643 | ||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 2,328,601 | $ | 2,167,859 | ||||||||||||||||||
Net interest income | $ | 73,525 | $ | 66,434 | ||||||||||||||||||
Interest rate spread | 3.18 | % | 3.28 | % | ||||||||||||||||||
Net yield on interest-earning assets | 3.38 | % | 3.34 | % | ||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 147.05 | % | 130.61 | % | ||||||||||||||||||
Average loans to average deposits | 80.14 | % | 83.85 | % | ||||||||||||||||||
Average transaction deposits to total average deposits ** | 84.84 | % | 81.84 | % | ||||||||||||||||||
Cost of funds | 0.43 | % | 0.21 | % | ||||||||||||||||||
Cost of deposits | 0.35 | % | 0.14 | % | ||||||||||||||||||
Cost of debt | 4.10 | % | 2.79 | % |
(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 | 2022 | % | 2022 | % | 2022 | % | 2022 | % | 2021** | % | |||||||||||||||||||||||||
Portfolio Type: | |||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 1,232,826 | 67.69 | % | $ | 1,202,660 | 68.98 | % | $ | 1,178,758 | 71.33 | % | $ | 1,177,761 | 72.28 | % | $ | 1,113,793 | 70.54 | % | |||||||||||||||
Residential first mortgages | 79,872 | 4.39 | 83,081 | 4.77 | 84,782 | 5.13 | 86,416 | 5.30 | 92,710 | 5.87 | |||||||||||||||||||||||||
Residential rentals | 338,292 | 18.58 | 282,365 | 16.20 | 210,116 | 12.72 | 191,065 | 11.73 | 194,911 | 12.35 | |||||||||||||||||||||||||
Construction and land development | 17,259 | 0.95 | 23,197 | 1.33 | 31,068 | 1.88 | 30,649 | 1.88 | 35,502 | 2.25 | |||||||||||||||||||||||||
Home equity and second mortgages | 25,602 | 1.41 | 26,054 | 1.49 | 25,200 | 1.53 | 26,445 | 1.62 | 25,661 | 1.63 | |||||||||||||||||||||||||
Commercial loans | 42,055 | 2.31 | 41,615 | 2.39 | 43,472 | 2.63 | 48,948 | 3.00 | 50,512 | 3.20 | |||||||||||||||||||||||||
Consumer loans | 6,272 | 0.34 | 5,754 | 0.33 | 4,511 | 0.27 | 3,592 | 0.22 | 3,015 | 0.19 | |||||||||||||||||||||||||
Commercial equipment | 78,890 | 4.33 | 78,551 | 4.51 | 74,552 | 4.51 | 64,662 | 3.97 | 62,706 | 3.97 | |||||||||||||||||||||||||
Total portfolio loans | 1,821,068 | 100.00 | % | 1,743,277 | 100.00 | % | 1,652,459 | 100.00 | % | 1,629,538 | 100.00 | % | 1,578,810 | 100.00 | % | ||||||||||||||||||||
Less: Allowance for credit losses | (22,890 | ) | (1.26 | ) | (22,027 | ) | (1.26 | ) | (21,404 | ) | (1.30 | ) | (21,382 | ) | (1.31 | ) | (18,417 | ) | (1.17 | ) | |||||||||||||||
Total net portfolio loans | 1,798,178 | 1,721,250 | 1,631,055 | 1,608,156 | 1,560,393 | ||||||||||||||||||||||||||||||
339 | 1,211 | 5,022 | 15,279 | 26,398 | |||||||||||||||||||||||||||||||
Total net loans | $ | 1,798,517 | $ | 1,722,461 | $ | 1,636,077 | $ | 1,623,435 | $ | 1,586,791 |
____________________________________
**
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:
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||
(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 | 4.86 | % | 4.36 | % | 4.00 | % | 3.79 | % | 3.79 | % | |||||
Residential first mortgages | 3.84 | % | 3.84 | % | 3.83 | % | 3.80 | % | 3.80 | % | |||||
Residential rentals | 4.53 | % | 4.34 | % | 4.03 | % | 3.78 | % | 3.81 | % | |||||
Construction and land development | 6.73 | % | 5.61 | % | 4.57 | % | 4.36 | % | 4.38 | % | |||||
Home equity and second mortgages | 7.14 | % | 5.64 | % | 4.19 | % | 3.50 | % | 3.51 | % | |||||
Commercial loans | 7.34 | % | 5.93 | % | 4.79 | % | 4.47 | % | 4.48 | % | |||||
Consumer loans | 5.26 | % | 5.12 | % | 5.13 | % | 4.33 | % | 4.37 | % | |||||
Commercial equipment | 4.43 | % | 4.37 | % | 4.30 | % | 4.29 | % | 4.32 | % | |||||
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||
Total Loans | 4.84 | % | 4.41 | % | 4.04 | % | 3.81 | % | 3.80 | % | |||||
Yields without | 4.84 | % | 4.41 | % | 4.05 | % | 3.85 | % | 3.84 | % |
ALLOWANCE FOR CREDIT LOSSES (UNAUDITED)
Three Months Ended** | ||||||||||||||||||||
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Beginning of period | $ | 22,027 | $ | 21,404 | $ | 21,382 | $ | 18,417 | $ | 18,579 | ||||||||||
Impact of ASC 326 Adoption | — | — | — | 2,496 | — | |||||||||||||||
Charge-offs | (29 | ) | (92 | ) | (447 | ) | — | (181 | ) | |||||||||||
Recoveries | 24 | 21 | 44 | 19 | 19 | |||||||||||||||
Net (charge-offs) recoveries | (5 | ) | (71 | ) | (403 | ) | 19 | (162 | ) | |||||||||||
Provision for credit losses | 868 | 694 | 425 | 450 | — | |||||||||||||||
End of period | $ | 22,890 | $ | 22,027 | $ | 21,404 | $ | 21,382 | $ | 18,417 | ||||||||||
Net (charge-offs) recoveries to average portfolio loans (annualized)(1) | 0.00 | % | (0.02 | )% | (0.10 | )% | 0.00 | % | (0.04 | )% | ||||||||||
Breakdown of general and specific allowance as a percentage of total portfolio loans(1) | ||||||||||||||||||||
General allowance | $ | 22,781 | $ | 21,919 | $ | 21,108 | $ | 21,087 | $ | 18,151 | ||||||||||
Specific allowance | 109 | 108 | 296 | 295 | 266 | |||||||||||||||
$ | 22,890 | $ | 22,027 | $ | 21,404 | $ | 21,382 | $ | 18,417 | |||||||||||
General allowance | 1.25 | % | 1.26 | % | 1.28 | % | 1.29 | % | 1.15 | % | ||||||||||
Specific allowance | 0.01 | % | 0.00 | % | 0.02 | % | 0.02 | % | 0.02 | % | ||||||||||
Allowance to total portfolio loans | 1.26 | % | 1.26 | % | 1.30 | % | 1.31 | % | 1.17 | % | ||||||||||
Allowance to non-acquired loans | n/a(2) | n/a(2) | n/a(2) | n/a(2) | 1.20 | % | ||||||||||||||
Allowance+ Non-PCI FV Mark | n/a(3) | n/a(3) | n/a(3) | n/a(3) | $ | 18,815 | ||||||||||||||
Allowance+ Non-PCI FV Mark to total portfolio loans | n/a(3) | n/a(3) | n/a(3) | n/a(3) | 1.19 | % |
____________________________________
** The Company implemented the CECL accounting standard effective
(1) Portfolio loans include all loan portfolios except the
(2) Allowance to non-acquired loans is no longer relevant as the ACL considers all portfolio loans.
(3) Allowance to non-acquired loans and Non-PCI FV Mark are no longer relevant as the ACL considers all loan portfolios.
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 | $ | 6,115 | $ | 5,211 | $ | 19,249 | $ | 26,863 | $ | 32,226 | ||||||||||
Doubtful | — | — | — | — | — | |||||||||||||||
Total classified loans | 6,115 | 5,211 | 19,249 | 26,863 | 32,226 | |||||||||||||||
Special mention loans | 4,361 | — | 7,672 | — | — | |||||||||||||||
Total classified and special mention loans | $ | 10,476 | $ | 5,211 | $ | 26,921 | $ | 26,863 | $ | 32,226 | ||||||||||
Classified loans | $ | 6,115 | $ | 5,211 | $ | 19,249 | $ | 26,863 | $ | 32,226 | ||||||||||
Classified securities | — | — | — | — | 482 | |||||||||||||||
Other real estate owned | — | — | 3,109 | 7,773 | 8,111 | |||||||||||||||
Total classified assets | $ | 6,115 | $ | 5,211 | $ | 22,358 | $ | 34,636 | $ | 40,819 | ||||||||||
Total classified assets as a percentage of total assets | 0.25 | % | 0.22 | % | 1.10 | % | 1.93 | % | 2.42 | % | ||||||||||
Total classified assets as a percentage of | 2.23 | % | 2.10 | % | 9.61 | % | 16.21 | % | 21.54 | % |
SUMMARY OF DEPOSITS (UNAUDITED)
(dollars in thousands) | Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | |||||||||||||||||||||||||
Noninterest-bearing demand | $ | 630,120 | 30.17 | % | $ | 647,432 | 30.45 | % | $ | 635,649 | 30.48 | % | $ | 644,385 | 30.75 | % | $ | 445,778 | 21.68 | % | |||||||||||||||
Interest-bearing: | |||||||||||||||||||||||||||||||||||
Demand deposits | 638,876 | 30.59 | % | 691,987 | 32.54 | % | 635,344 | 30.47 | % | 618,869 | 29.54 | % | 790,481 | 38.45 | % | ||||||||||||||||||||
Money market deposits | 347,872 | 16.66 | % | 371,175 | 17.45 | % | 380,712 | 18.26 | % | 387,700 | 18.51 | % | 372,717 | 18.13 | % | ||||||||||||||||||||
Savings | 124,533 | 5.96 | % | 123,564 | 5.81 | % | 119,363 | 5.72 | % | 124,038 | 5.92 | % | 119,767 | 5.82 | % | ||||||||||||||||||||
Certificates of deposit | 347,062 | 16.62 | % | 292,399 | 13.75 | % | 314,308 | 15.07 | % | 320,091 | 15.28 | % | 327,421 | 15.92 | % | ||||||||||||||||||||
Total interest-bearing | 1,458,343 | 69.83 | % | 1,479,125 | 69.55 | % | 1,449,727 | 69.52 | % | 1,450,698 | 69.25 | % | 1,610,386 | 78.32 | % | ||||||||||||||||||||
Total Deposits | $ | 2,088,463 | 100.00 | % | $ | 2,126,557 | 100.00 | % | $ | 2,085,376 | 100.00 | % | $ | 2,095,083 | 100.00 | % | $ | 2,056,164 | 100.00 | % | |||||||||||||||
Transaction accounts | $ | 1,741,401 | 83.38 | % | $ | 1,834,158 | 86.25 | % | $ | 1,771,068 | 84.93 | % | $ | 1,774,992 | 84.72 | % | $ | 1,728,743 | 84.08 | % |
![](https://ml.globenewswire.com/media/YTU3MzkwZDQtZDM3Zi00MzYwLWIyNjAtZDQzOWQ2ZGU0MmM5LTEwMzA5NzE=/tiny/The-Community-Financial-Corpor.png)
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