Toggle SGML Header (+)


Section 1: 8-K (FORM 8-K)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2015

 

  

Eastern Virginia Bankshares, Inc.

(Exact name of registrant as specified in its charter)

  

 

         
Virginia   000-23565   54-1866052

(State or other jurisdiction

of incorporation) 

 

(Commission

File Number)

 

 

(IRS Employer

Identification No.)

 

 

         
330 Hospital Road, Tappahannock, Virginia   22560
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (804) 443-8400

 

 

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

 

 

 

Item 2.02Results of Operations and Financial Condition.

 

On October 23, 2015, Eastern Virginia Bankshares, Inc. (the “Company”) issued a press release announcing the Company’s financial results as of and for the period ended September 30, 2015. A copy of the press release is being furnished as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02.

 

Item 9.01Financial Statements and Exhibits.

 

(d)Exhibits.

 

Exhibit No. Description
   
99.1 Press release dated October 23, 2015.

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  

  EASTERN VIRGINIA BANKSHARES, INC.  
       
Dated: October 23, 2015      
       
  By: /s/ J. Adam Sothen  
    J. Adam Sothen  
    Executive Vice President &  
    Chief Financial Officer  

  

 

 

  

Exhibit Index

 

Exhibit No. Description
   
99.1 Press release dated October 23, 2015.

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1
 

Eastern Virginia Bankshares, Inc. Releases Third Quarter 2015 Results

TAPPAHANNOCK, Va., Oct. 23, 2015 /PRNewswire/ -- Eastern Virginia Bankshares, Inc. (NASDAQ: EVBS) (the "Company"), the one bank holding company of EVB (the "Bank"), reported today its results of operations for the three and nine months ended September 30, 2015.

Performance Summary






Three Months Ended September 30,

(dollars in thousands, except per share data)


2015


2014

Net income (1)



$                 2,010


$                1,282

Net income available to common shareholders (1)


$                 2,010


$                   742

Basic and diluted net income per common share


$                   0.11


$                  0.04

Return on average assets (annualized)


0.65%


0.28%

Return on average common shareholders' equity (annualized)


7.80%


3.12%

Net interest margin (tax equivalent basis) (2)


3.73%


3.70%












Nine Months Ended September 30,

(dollars in thousands, except per share data)


2015


2014

Net income (1)



$                 5,126


$                4,933

Net income available to common shareholders (1)


$                 4,740


$                3,334

Basic and diluted net income per common share


$                   0.26


$                  0.19

Return on average assets (annualized)


0.53%


0.42%

Return on average common shareholders' equity (annualized)


6.25%


4.80%

Net interest margin (tax equivalent basis) (2)


3.89%


3.82%








(1) The difference between net income and net income available to common shareholders is the effective dividend to holders of the Company's Series A Preferred Stock.

(2) For more information on the calculation of net interest margin on a tax equivalent basis, see the average balance sheet and net interest margin analysis for the three and nine month periods ended September 30, 2015 and 2014 contained in this release.

The Company's results for the three and nine months ended September 30, 2015 were directly impacted by the acquisition and integration of Virginia Company Bank ("VCB"), which was effective November 14, 2014, including additional legal fees and integration costs of $224 thousand, and increased average loan and deposit balances during the first nine months of 2015 as compared to the same period in 2014. Additionally, during the second quarter of 2015, the Company completed a private placement of $20.0 million in senior subordinated debt. A portion of these proceeds were used to redeem both its outstanding warrants with the U.S. Department of Treasury ("Treasury") and the remaining $9.0 million of its Series A Preferred Stock related to the Troubled Asset Relief Program ("TARP") that was originally issued during January 2009.

In announcing these results, Joe A. Shearin, President and Chief Executive Officer commented, "I am pleased with our Company's continued progress and results for the third quarter of 2015. In addition to our asset quality improvements, we have meaningfully increased net income available to common shareholders when compared to the same periods last year, as well as the second quarter of 2015. For the third quarter of 2015, we are reporting an increase in annualized return on average assets of 0.20% to 0.65% and an increase in annualized return on average common shareholders' equity of 2.51% to 7.80%, when compared to the second quarter of 2015. Much of our improvement continues to be driven through the successful execution of our previously disclosed strategic initiatives and our focused efforts on growth and profitability. I continue to be encouraged with the positive trends we saw during the third quarter related to loan growth, particularly in the Richmond and Tidewater markets. Despite improvements in our net interest margin for the three and nine months ended September 30, 2015 when compared to the same periods last year, our net interest margin declined during the third quarter of 2015 as compared to the second quarter of 2015. This decline was driven primarily by lower asset yields in the historically low rate environment which have been compounded by competitive pressures, lower accretion income on acquired VCB loans, and higher interest expense due to a full quarter impact related to the issuance of our senior subordinated debt in April 2015."

Shearin continued, "As a Company, we will continue to use our strategic and financial flexibility to focus our efforts on growth and profitability by driving operating efficiencies, containing noninterest expenses and identifying revenue enhancement opportunities. Throughout the fourth quarter of 2015 and forward, we plan to evaluate and implement strategies that we believe will improve our performance and profitability and will increase the value of our company. Given our healthy asset quality, strong balance sheet and improved financial performance, I am also pleased to announce that the Board of Directors declared another cash dividend of $0.02 per share of common stock and Series B Preferred Stock payable on November 20, 2015 to shareholders of record as of November 6, 2015."

For the three months ended September 30, 2015, the following were significant factors in the Company's reported results:

For the nine months ended September 30, 2015, the following were significant factors in the Company's reported results:

Operations Analysis

The following tables present average balances of assets and liabilities, the average yields earned on such assets (on a tax equivalent basis) and rates paid on such liabilities, and the net interest margin for the three and nine months ended September 30, 2015 and 2014.

Average Balance Sheet and Net Interest Margin Analysis







(dollars in thousands)



    Three Months Ended September 30,




2015





2014



Average


Income/

Yield/


Average


Income/

Yield/


Balance


Expense

Rate (1)


Balance


Expense

Rate (1)

Assets:










Securities










  Taxable

$      222,800


$         1,173

2.09%


$     230,916


$         1,185

2.04%

  Restricted securities

8,535


114

5.30%


6,940


91

5.20%

  Tax exempt (2)

35,907


360

3.98%


26,245


260

3.93%

   Total securities

267,242


1,647

2.45%


264,101


1,536

2.31%

Interest bearing deposits in other banks

6,856


4

0.23%


7,997


5

0.25%

Federal funds sold

139


-

0.00%


139


-

0.00%

Loans, net of unearned income (3)

853,421


10,443

4.85%


696,130


8,623

4.91%

     Total earning assets

1,127,658


12,094

4.25%


968,367


10,164

4.16%

Less allowance for loan losses

(12,113)





(14,445)




Total non-earning assets

114,418





97,769




Total assets

$   1,229,963





$  1,051,691














Liabilities & Shareholders' Equity:










Interest-bearing deposits










  Checking

$      295,441


$            270

0.36%


$     260,055


$            238

0.36%

  Savings

94,248


34

0.14%


90,405


30

0.13%

  Money market savings

157,323


176

0.44%


112,668


112

0.39%

  Time deposits

229,400


508

0.88%


218,943


615

1.11%

     Total interest-bearing deposits

776,412


988

0.50%


682,071


995

0.58%

Federal funds purchased and repurchase










     agreements

7,204


9

0.50%


3,393


5

0.58%

Short-term borrowings

103,970


56

0.21%


72,254


39

0.21%

Junior subordinated debt

10,310


83

3.19%


10,310


82

3.16%

Senior subordinated debt

19,107


348

7.23%


-


-

0.00%

     Total interest-bearing liabilities

917,003


1,484

0.64%


768,028


1,121

0.58%

Noninterest-bearing liabilities










  Demand deposits

181,303





140,088




  Other liabilities

7,831





3,749




     Total liabilities

1,106,137





911,865




Shareholders' equity

123,826





139,826




 Total liabilities and shareholders' equity

$   1,229,963





$  1,051,691














Net interest income (2)



$       10,610





$         9,043












Interest rate spread (2)(4)




3.61%





3.58%

Interest expense as a percent of










   average earning assets




0.52%





0.46%

Net interest margin (2)(5)




3.73%





3.70%











Notes:










(1) Yields are annualized and based on average daily balances.







(2) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%, with a


      $110 adjustment for 2015 and a $80 adjustment in 2014.









(3) Nonaccrual loans have been included in the computations of average loan balances.




(4) Interest rate spread is the average yield on earning assets, calculated on a fully taxable basis, less the average


      rate incurred on interest-bearing liabilities.









(5) Net interest margin is the net interest income, calculated on a fully taxable basis, expressed as a percentage


     of average earning assets.










(dollars in thousands)



Nine Months Ended September 30,




2015





2014



Average


Income/

Yield/


Average


Income/

Yield/


Balance


Expense

Rate (1)


Balance


Expense

Rate (1)

Assets:










Securities










  Taxable

$      219,440


$         3,560

2.17%


$     236,176


$         4,030

2.28%

  Restricted securities

7,843


318

5.42%


6,984


282

5.40%

  Tax exempt (2)

37,629


1,120

3.98%


28,663


860

4.01%

   Total securities

264,912


4,998

2.52%


271,823


5,172

2.54%

Interest bearing deposits in other banks

6,902


12

0.23%


6,863


13

0.25%

Federal funds sold

201


-

0.00%


135


-

0.00%

Loans, net of unearned income (3)

829,976


31,016

5.00%


686,643


25,735

5.01%

     Total earning assets

1,101,991


36,026

4.37%


965,464


30,920

4.28%

Less allowance for loan losses

(12,512)





(14,708)




Total non-earning assets

113,830





98,549




Total assets

$   1,203,309





$  1,049,305














Liabilities & Shareholders' Equity:










Interest-bearing deposits










  Checking

$      288,802


$            792

0.37%


$     258,848


$            699

0.36%

  Savings

92,780


93

0.13%


89,976


90

0.13%

  Money market savings

162,029


561

0.46%


115,205


353

0.41%

  Time deposits

235,025


1,527

0.87%


222,782


1,818

1.09%

     Total interest-bearing deposits

778,636


2,973

0.51%


686,811


2,960

0.58%

Federal funds purchased and repurchase










     agreements

9,112


40

0.59%


3,405


15

0.59%

Short-term borrowings

86,389


135

0.21%


71,259


110

0.21%

Junior subordinated debt

10,310


244

3.16%


10,310


258

3.35%

Senior subordinated debt

11,450


612

7.15%


-


-

0.00%

     Total interest-bearing liabilities

895,897


4,004

0.60%


771,785


3,343

0.58%

Noninterest-bearing liabilities










  Demand deposits

171,703





134,774




  Other liabilities

7,127





4,355




     Total liabilities

1,074,727





910,914




Shareholders' equity

128,582





138,391




 Total liabilities and shareholders' equity

$   1,203,309





$  1,049,305














Net interest income (2)



$       32,022





$       27,577












Interest rate spread (2)(4)




3.77%





3.70%

Interest expense as a percent of










   average earning assets




0.49%





0.46%

Net interest margin (2)(5)




3.89%





3.82%











Notes:










(1) Yields are annualized and based on average daily balances.







(2) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%, with a


      $342 adjustment for 2015 and a $263 adjustment in 2014.








(3) Nonaccrual loans have been included in the computations of average loan balances.




(4) Interest rate spread is the average yield on earning assets, calculated on a fully taxable basis, less the average


      rate incurred on interest-bearing liabilities.









(5) Net interest margin is the net interest income, calculated on a fully taxable basis, expressed as a percentage


     of average earning assets.










Interest Income and Expense

Net interest income and net interest margin

Net interest income in the third quarter of 2015 increased $1.5 million, or 17.1%, when compared to the third quarter of 2014. Net interest income for the nine months ended September 30, 2015 increased $4.4 million, or 16.0%, as compared to the first nine months of 2014. The Company's net interest margin increased to 3.73% and 3.89% for the three and nine months ended September 30, 2015, representing 3 and 7 basis point increases, respectively, over the Company's net interest margins for the three and nine months ended September 30, 2014. The Company's net interest margin decreased 20 basis points during the three months ended September 30, 2015 as compared to the three months ended June 30, 2015. This quarter-over-quarter decline was primarily driven by lower loan yields as a result of competitive pressures in the historically low rate environment, lower accretion of fair value adjustments related to the VCB acquisition and increased interest expense as a result of the private placement of $20.0 million of senior subordinated debt in April 2015. The most significant factors impacting net interest income during the three and nine month periods ended September 30, 2015 were as follows:

Positive Impacts:

Negative Impacts:

Total interest and dividend income

Total interest and dividend income increased 18.8% and 16.4% for the three and nine months ended September 30, 2015, respectively, as compared to the same periods in 2014. The increase in total interest and dividend income during the three months ended September 30, 2015 was primarily driven by an increase in average loan and investment securities balances and an increase in average investment securities yields, partially offset by a decrease in average loan yields. The increase in total interest and dividend income during the nine months ended September 30, 2015 was primarily driven by an increase in average loan balances, but partially offset by a decrease in average investment securities balances and declines in average investment securities yields.

Loans

Average loan balances increased for the three and nine month periods ended September 30, 2015, as compared to the same periods in 2014, due primarily to the acquisition of VCB loans totaling $101.5 million as of November 14, 2014, net of fair value adjustments, the purchase of $16.8 million in performing one-to-four family residential mortgage loans, consumer loans and government guaranteed loans between June 2015 and September 2015, organic loan growth and the opening of a new loan production office in Chesterfield County, Virginia in the second quarter of 2014. Despite a 2.5% increase in loans during the third quarter of 2015, loan growth came in lower than our expectations. Loan growth in our rural markets, primarily on the consumer side, remains weak while competition for commercial loans, especially in the Richmond and Tidewater markets, has been and we expect will continue to be intense given the historically low rate environment. The Company's average loan balances increased $157.3 million for the three months ended September 30, 2015 and increased $143.3 million for the nine months ended September 30, 2015, as compared to average loan balances for the same periods in 2014. Total average loans were 75.7% of total average interest-earning assets for the three months ended September 30, 2015, compared to 71.9% for the three months ended September 30, 2014. Total average loans were 75.3% of total average interest-earning assets for the nine months ended September 30, 2015, compared to 71.1% for the nine months ended September 30, 2014.

Investment securities

Average investment securities balances increased 1.2% for the three month period ended September 30, 2015, but declined 2.5% for the nine month period ended September 30, 2015, as compared to the same periods in 2014. The overall decline during the first nine months of 2015 was the result of the Company moving towards its long term target of the investment securities portfolio comprising 20% of the Company's total assets, the lack of investment opportunities with acceptable risk-adjusted rates of return and liquidity needs to support our operations and strategic initiatives. The yields on average investment securities increased 14 basis points for the three months ended September 30, 2015, but declined 2 basis points for the nine months ended September 30, 2015, as compared to the same periods in 2014. The increase in yields on average investment securities during the three month period ended September 30, 2015, as compared to the same period in 2014, was driven by higher interest rates and a greater allocation of the investment securities portfolio to higher yielding tax exempt municipal securities.

Interest-bearing deposits

Average total interest-bearing deposit balances increased for the three and nine month periods ended September 30, 2015, as compared to the same periods in 2014, primarily due to the assumption of VCB's interest-bearing deposit liabilities, which totaled $85.6 million as of November 14, 2014, and organic deposit growth that was in part driven by the Company's marketing and advertising initiatives.

Borrowings

Average total borrowings increased for the three and nine month periods ended September 30, 2015, as compared to the same periods in 2014, primarily due to the issuance of $20.0 million in senior subordinated debt in April 2015, the assumption of $8.7 million in short-term FHLB advances as a result of the VCB acquisition and increased repurchase agreement balances related to a significant customer deposit relationship. Additionally, average short-term borrowings increased for the three and nine month periods ended September 30, 2015, as compared to the same periods in 2014, to fund loan growth and other strategic initiatives.

Noninterest Income

The following tables depict the components of noninterest income for the three and nine months ended September 30, 2015 and 2014:



Three Months Ended September 30,





(dollars in thousands)


2015


2014


Change $


Change %

Service charges and fees on deposit accounts


$                   745


$                    825


$                   (80)


-9.7%

Debit/credit card fees


468


383


85


22.2%

Gain on sale of available for sale securities, net


81


7


74


1057.1%

(Loss) on sale of bank premises and equipment


(11)


-


(11)


-100.0%

Other operating income


441


390


51


13.1%

Total noninterest income


$                1,724


$                 1,605


$                  119


7.4%





















Nine Months Ended September 30,





(dollars in thousands)


2015


2014


Change $


Change %

Service charges and fees on deposit accounts


$                2,081


$                 2,484


$                 (403)


-16.2%

Debit/credit card fees


1,273


1,070


203


19.0%

Gain on sale of available for sale securities, net


132


496


(364)


-73.4%

(Loss) gain on sale of bank premises and equipment


(38)


5


(43)


-860.0%

Other operating income


1,327


1,081


246


22.8%

Total noninterest income


$                4,775


$                 5,136


$                 (361)


-7.0%

Key changes in the components of noninterest income for both the three and nine months ended September 30, 2015, as compared to the same periods in 2014, are discussed below:

Noninterest Expense

The following tables depict the components of noninterest expense for the three and nine months ended September 30, 2015 and 2014:





Three Months Ended September 30,





(dollars in thousands)



2015


2014


Change $


Change %

Salaries and employee benefits


$                 5,394


$                4,652


$                    742


16.0%

Occupancy and equipment expenses


1,396


1,286


110


8.6%

FDIC expense



196


121


75


62.0%

Collection, repossession and other real estate owned


209


49


160


326.5%

(Gain) loss on sale of other real estate owned


(8)


51


(59)


-115.7%

Other operating expenses


2,330


2,469


(139)


-5.6%

Total noninterest expenses


$                 9,517


$                8,628


$                    889


10.3%



























Nine Months Ended September 30,





(dollars in thousands)



2015


2014


Change $


Change %

Salaries and employee benefits


$               16,507


$              13,986


$                 2,521


18.0%

Occupancy and equipment expenses


4,309


3,872


437


11.3%

FDIC expense



622


758


(136)


-17.9%

Collection, repossession and other real estate owned


424


205


219


106.8%

Loss on sale of other real estate owned


18


66


(48)


-72.7%

Impairment losses on other real estate owned


5


11


(6)


-54.5%

Other operating expenses


7,798


6,427


1,371


21.3%

Total noninterest expenses


$               29,683


$              25,325


$                 4,358


17.2%

Key changes in the components of noninterest expense for both the three and nine months ended September 30, 2015, as compared to the same periods in 2014, are discussed below:

Balance Sheet and Asset Quality

Balance Sheet

Key balance sheet components as of September 30, 2015 and December 31, 2014 are as follows:



September 30,


December 31,





(dollars in thousands)


2015


2014


Change $


Change %

Total assets


$    1,242,387


$    1,181,972


$       60,415


5.1%

Securities available for sale, at fair value


229,608


214,011


15,597


7.3%

Securities held to maturity, at carrying value


29,964


32,163


(2,199)


-6.8%

Total loans


861,393


820,569


40,824


5.0%

Total deposits


974,801


939,254


35,547


3.8%

Total borrowings


135,225


102,013


33,212


32.6%

Total shareholders' equity


124,943


134,274


(9,331)


-6.9%



















Key balance sheet components as of September 30, 2015 and 2014 are as follows:












September 30,


September 30,





(dollars in thousands)


2015


2014


Change $


Change %

Total assets


$    1,242,387


$    1,052,756


$     189,631


18.0%

Securities available for sale, at fair value


229,608


218,637


10,971


5.0%

Securities held to maturity, at carrying value


29,964


33,333


(3,369)


-10.1%

Total loans


861,393


706,390


155,003


21.9%

Total deposits


974,801


821,472


153,329


18.7%

Total borrowings


135,225


90,385


44,840


49.6%

Total shareholders' equity


124,943


137,787


(12,844)


-9.3%

Asset Quality

The asset quality measures depicted below continue to reflect the Company's efforts to prudently charge-off loans as losses are identified and maintain an appropriate allowance for potential future loan losses.

The following table depicts the net charge-off activity for the three and nine months ended September 30, 2015 and 2014.



 Three months ended


 Nine months ended



September 30,


September 30,

 (dollars in thousands)


2015


2014


2015


2014

Net charge-offs


$            349


$             477


$      1,083


$         876

Net charge-offs to average loans


0.16%


0.27%


0.17%


0.17%

The following table depicts the level of the allowance for loan losses as of the dates presented.



September 30,


December 31,


September 30,

 (dollars in thousands)


2015


2014


2014

Allowance for loan losses


$               11,938


$                13,021


$                14,141

Allowance for loan losses to period end loans


1.39%


1.59%


2.00%

Allowance for loan losses to nonaccrual loans


203.85%


196.63%


134.23%

Allowance for loan losses to nonperforming loans


171.48%


195.07%


134.23%

The following table depicts the level of nonperforming assets as of the dates presented.



September 30,


December 31,


September 30,

 (dollars in thousands)


2015


2014


2014

Nonaccrual loans


$                 5,856


$            6,622


$               10,535

Loans past due 90 days and accruing interest


1,105


53


-

  Total nonperforming loans


$                 6,961


$            6,675


$               10,535

Other real estate owned ("OREO")


233


1,838


485

  Total nonperforming assets


$                 7,194


$            8,513


$               11,020








Nonperforming assets to total loans and OREO


0.83%


1.04%


1.56%

The following tables present the change in the balances of OREO and nonaccrual loans for the nine months ended September 30, 2015.

OREO:





Nonaccrual Loans:











(dollars in thousands)





(dollars in thousands)


Balance at December 31, 2014



$   1,838


Balance at December 31, 2014

$      6,622

Transfers from loans



1,249


Loans returned to accrual status

(4,360)

Capitalized costs



1


Net principal curtailments

(1,866)

Sales proceeds



(2,832)


Charge-offs


(1,090)

Impairment losses on valuation adjustments



(5)


Loan collateral moved to OREO

(1,249)

Loss on disposition



(18)


Loans placed on nonaccrual during period

7,799

Balance at September 30, 2015



$      233


Balance at September 30, 2015

$      5,856

In general, the modification or restructuring of a loan constitutes a troubled debt restructuring ("TDR") when we grant a concession to a borrower experiencing financial difficulty. The following table depicts the balances of TDRs as of the dates presented.



September 30,


December 31,


September 30,

(dollars in thousands)


2015


2014


2014

Performing TDRs


$                      15,426


$                      15,223


$                      16,004

Nonperforming TDRs*


1,186


3,438


3,965

  Total TDRs


$                      16,612


$                      18,661


$                      19,969








*  Included in nonaccrual loans. 







Forward Looking Statements

Certain statements contained in this release that are not historical facts may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended. In addition, certain statements may be contained in the Company's future filings with the Securities and Exchange Commission (the "SEC"), in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute forward-looking statements within the meaning of the Exchange Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, income or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of the Company or its management or Board of Directors, including those relating to products or services, the performance or disposition of portions of the Company's asset portfolio, future changes to the Bank's branch network and the payment of dividends; (iii) statements of future financial performance and economic conditions; (iv) statements regarding the adequacy of the allowance for loan losses; (v) statements regarding the effect of future sales of investment securities or foreclosed properties; (vi) statements regarding the Company's liquidity; (vii) statements of management's expectations regarding future trends in interest rates, real estate values, and economic conditions generally and in the Company's markets; (viii) statements regarding future asset quality, including expected levels of charge-offs; (ix) statements regarding potential changes to laws, regulations or administrative guidance; (x) statements regarding strategic initiatives of the Company or the Bank and the results of these initiatives; and (xi) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions and projections within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance, actions or achievements of the Company will not differ materially from any future results, performance, actions or achievements expressed or implied by such forward-looking statements. Readers should not place undue reliance on such statements, which speak only as of the date of this report. The Company does not undertake any steps to update any forward-looking statement that may be made from time to time by it or on its behalf. For additional information on risk factors that could affect the Company's forward-looking statements, see the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and other reports filed with the SEC.

Selected Financial Information









 (dollars in thousands, except per share data)


Three months ended September 30,


Nine months ended September 30,

Statements of Income


2015


2014


2015


2014

Interest and dividend income


$             11,984


$          10,084


$             35,684


$           30,657

Interest expense


1,484


1,121


4,004


3,343

   Net interest income


10,500


8,963


31,680


27,314

Provision for loan losses


-


-


-


250

   Net interest income after provision for loan losses


10,500


8,963


31,680


27,064










Service charges and fees on deposit accounts


745


825


2,081


2,484

Other operating income


441


390


1,327


1,081

Debit/credit card fees


468


383


1,273


1,070

Gain on sale of available for sale securities, net


81


7


132


496

(Loss) gain on sale of bank premises and equipment


(11)


-


(38)


5

Noninterest income


1,724


1,605


4,775


5,136










Salaries and employee benefits


5,394


4,652


16,507


13,986

Occupancy and equipment expenses


1,396


1,286


4,309


3,872

FDIC expense


196


121


622


758

Collection, repossession and other real estate owned


209


49


424


205

(Gain) loss on sale of other real estate owned


(8)


51


18


66

Impairment losses on other real estate owned


-


-


5


11

Other operating expenses


2,330


2,469


7,798


6,427

Noninterest expenses


9,517


8,628


29,683


25,325










Income before income taxes


2,707


1,940


6,772


6,875

Income tax expense


697


658


1,646


1,942

   Net income


$               2,010


$            1,282


$               5,126


$             4,933

   Less: Effective dividend on preferred stock


-


540


386


1,599

   Net income available to common shareholders


$               2,010


$               742


$               4,740


$             3,334

Net income per common share: basic and diluted


$                 0.11


$              0.04


$                 0.26


$               0.19










Selected Ratios









Return on average assets (annualized)


0.65%


0.28%


0.53%


0.42%

Return on average common shareholders' equity (annualized)


7.80%


3.12%


6.25%


4.80%

Net interest margin (tax equivalent basis)


3.73%


3.70%


3.89%


3.82%

Period End Balances









Investment securities


$           267,833


$        259,096


$           267,833


$         259,096

Loans, net of unearned income


861,393


706,390


861,393


706,390

Total assets


1,242,387


1,052,756


1,242,387


1,052,756

Total deposits


974,801


821,472


974,801


821,472

Total borrowings


135,225


90,385


135,225


90,385

Total shareholders' equity


124,943


137,787


124,943


137,787

Book value per common share


8.02


7.81


8.02


7.81

Average Balances









Investment securities


$           267,242


$        264,101


$           264,912


$         271,823

Loans, net of unearned income


853,421


696,130


829,976


686,643

Total earning assets


1,127,658


968,367


1,101,991


965,464

Total assets


1,229,963


1,051,691


1,203,309


1,049,305

Total deposits


957,715


822,159


950,339


821,585

Total borrowings


140,591


85,957


117,261


84,974

Total shareholders' equity


123,826


139,826


128,582


138,391

Asset Quality at Period End









Allowance for loan losses


$             11,938


$          14,141


$             11,938


$           14,141

Nonperforming assets


7,194


11,020


7,194


11,020

Net charge-offs


349


477


1,083


876

Net charge-offs to average loans


0.16%


0.27%


0.17%


0.17%

Allowance for loan losses to period end loans


1.39%


2.00%


1.39%


2.00%

Allowance for loan losses to nonaccrual loans


203.85%


134.23%


203.85%


134.23%

Allowance for loan losses to nonperforming loans


171.48%


134.23%


171.48%


134.23%

Nonperforming assets to total assets


0.58%


1.05%


0.58%


1.05%

Nonperforming assets to total loans and other real estate owned

0.83%


1.56%


0.83%


1.56%

Other Information









Number of shares outstanding - period end


13,029,550


11,868,367


13,029,550


11,868,367

Average shares outstanding - basic


13,029,550


11,868,301


13,013,005


11,864,366

Average shares outstanding - diluted


18,269,742


17,108,493


18,253,197


17,104,558

Contact: Adam Sothen
Chief Financial Officer
Voice: (804) 443-8404
Fax: (804) 445-1047



(Back To Top)