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): July 25, 2016

  

 

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 2.02 Results of Operations and Financial Condition.

  

On July 25, 2016, Eastern Virginia Bankshares, Inc. (the “Company”) issued a press release announcing the Company’s financial results as of and for the period ended June 30, 2016. 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 9.01        Financial Statements and Exhibits.

 

(d)   Exhibits.  

 

Exhibit No. Description
   
99.1 Press release dated July 25, 2016.

 

 

 

 

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: July 25, 2016    
     
     
  By: /s/ J. Adam Sothen
    J. Adam Sothen
    Executive Vice President & Chief Financial Officer

  

 

 

  

Exhibit Index

 

 

Exhibit No. Description
   
99.1 Press release dated July 25, 2016.

 

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

Eastern Virginia Bankshares, Inc. Releases Second Quarter 2016 Results

TAPPAHANNOCK, Va., July 25, 2016 /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 six months ended June 30, 2016.

Performance Summary





Three Months Ended June 30,


(dollars in thousands, except per share data)


2016


2015


Net income (1)



$                 1,910


$                1,507


Net income available to common shareholders (1)


$                 1,910


$                1,341


Basic and diluted net income per common share


$                   0.11


$                  0.07


Return on average assets (annualized)


0.59%


0.45%


Return on average common shareholders' equity (annualized)


6.97%


5.29%


Net interest margin (tax equivalent basis)(2)


3.71%


3.93%














Six Months Ended June 30,


(dollars in thousands, except per share data)


2016


2015


Net income (1)



$                 4,137


$                3,116


Net income available to common shareholders (1)


$                 4,137


$                2,730


Basic and diluted net income per common share


$                   0.23


$                  0.15


Return on average assets (annualized)


0.65%


0.46%


Return on average common shareholders' equity (annualized)


7.65%


5.46%


Net interest margin (tax equivalent basis)(2)


3.74%


3.97%










(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 paid during the 2015 periods.


(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 six month periods ended  June 30, 2016 and 2015 contained in this release.


The Company's results for the three and six months ended June 30, 2016 were directly impacted by increases in the average balances of loans, deposits, short-term borrowings and senior subordinated debt during the three and six months ended June 30, 2016 as compared to the same periods in 2015. Loan yields declined 23 and 18 basis points for the three and six months ended June 30, 2016 as compared to the same periods in 2015, with 13 and 9 basis points, respectively, of the decline resulting from the lower accretion of fair value adjustments related to the acquisition of Virginia Company Bank ("VCB") in November 2014. Also, as previously disclosed, the Company engaged an independent consultant to conduct a comprehensive assessment of its operations during the first half of 2015. The assessment identified operating efficiencies and revenue enhancement opportunities. The Company has leveraged the assessment's findings, and since the second half of 2015, has continued to realize targeted increases in revenues and declines in certain noninterest expenses, particularly salaries and employee benefits expense.

In announcing these results, Joe A. Shearin, President and Chief Executive Officer commented, "I am pleased with our Company's results during the first half of 2016 and the continued company-wide focus to grow our balance sheet, improve profitability and enhance the quality of products and services we offer to our customers. For the first six months of 2016, as compared to the same period of 2015, we are reporting an increase in net income available to common shareholders of 51.5%, an increase in annualized return on average assets of 19 basis points to 0.65%, and an increase in annualized return on average common shareholders' equity of 219 basis points to 7.65%. Net income declined during the second quarter of 2016 as compared to the first quarter of 2016 and was primarily driven by a lower net interest margin and higher current period expenses. The lower net interest margin was driven by lower loan yields as a result of competitive pressures in the historically low rate environment. In addition, loan growth was lower than expected during the second quarter of 2016 and was driven primarily by the payoff of several large commercial loans late in the period. Despite this, we have generated loan growth of 3.3% during the first half of 2016 and 8.2% during the last twelve months, which outpaced our internal targets. Given our current pipeline of loan opportunities and our focus on total relationship banking, we believe that we are poised to deliver quality growth throughout the balance of 2016. Salaries and employee benefits in the current period were impacted by annual merit increases as well as higher group insurance expense due to claims, while other operating expenses in the current period were impacted by increases in director compensation, legal services related to equity compensation plans, securities and corporate governance matters and shareholder services related to our conversion to a new transfer agent. Many of the other operating expenses which were elevated this quarter are expected to level off during the remainder of 2016."

Shearin continued, "Last month we made the exciting announcement that we will be relocating our corporate headquarters to the Innsbrook business park in Glen Allen, Virginia in early fall 2016. Our new corporate headquarters will allow us to integrate corporate departments from other locations throughout our footprint. Currently, key members of our Executive Leadership Team, as well as other corporate departments, are remotely located in various locations. We believe this relocation will increase collaboration and productivity and capture operating efficiencies throughout the Company. Our new headquarters will also provide us the space and flexibility needed to continue to grow and reach new customers. The main office of EVB will remain in Tappahannock, Virginia and continue our heritage of serving the Northern Neck and Middle Peninsula markets since 1910. 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 August 26, 2016 to shareholders of record as of August 12, 2016."

For the three months ended June 30, 2016, the following were significant factors in the Company's reported results:

For the six months ended June 30, 2016, 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 six months ended June 30, 2016 and 2015:

Average Balance Sheet and Net Interest Margin Analysis








(dollars in thousands)



    Three Months Ended June 30,


2016


2015


Average


Income/

Yield/


Average


Income/

Yield/


Balance


Expense

Rate (1)


Balance


Expense

Rate (1)

Assets:










Securities










  Taxable

$      259,530


$         1,463

2.27%


$     221,747


$         1,185

2.14%

  Restricted securities

9,096


127

5.62%


7,198


96

5.35%

  Tax exempt (2)

3,754


34

3.59%


38,794


385

3.99%

   Total securities

272,380


1,624

2.40%


267,739


1,666

2.50%

Interest bearing deposits in other banks

7,372


10

0.55%


6,886


4

0.23%

Federal funds sold

64


-

0.00%


188


-

0.00%

Loans, net of unearned income (3)

911,285


10,996

4.85%


819,061


10,382

5.08%

     Total earning assets

1,191,101


12,630

4.26%


1,093,874


12,052

4.42%

Less allowance for loan losses

(10,932)





(12,524)




Total non-earning assets

111,177





113,370




Total assets

$   1,291,346





$  1,194,720














Liabilities & Shareholders' Equity:










Interest-bearing deposits










  Checking

$      308,250


$            291

0.38%


$     289,473


$            269

0.37%

  Savings

102,358


46

0.18%


92,733


31

0.13%

  Money market savings

161,500


186

0.46%


163,105


190

0.47%

  Time deposits

235,685


563

0.96%


233,699


444

0.76%

     Total interest-bearing deposits

807,793


1,086

0.54%


779,010


934

0.48%

Federal funds purchased and repurchase










     agreements

6,364


7

0.44%


8,275


13

0.63%

Short-term borrowings

115,476


118

0.41%


72,526


37

0.20%

Junior subordinated debt

10,310


92

3.59%


10,310


81

3.15%

Senior subordinated debt

19,058


351

7.41%


15,034


264

7.04%

     Total interest-bearing liabilities

959,001


1,654

0.69%


885,155


1,329

0.60%

Noninterest-bearing liabilities










  Demand deposits

193,620





171,957




  Other liabilities

6,945





6,947




     Total liabilities

1,159,566





1,064,059




Shareholders' equity

131,780





130,661




 Total liabilities and shareholders' equity 

$   1,291,346





$  1,194,720














Net interest income (2)



$       10,976





$       10,723












Interest rate spread (2)(4)




3.57%





3.82%

Interest expense as a percent of










   average earning assets




0.56%





0.49%

Net interest margin (2)(5)




3.71%





3.93%











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


      $11 adjustment for 2016 and a $117 adjustment in 2015.









(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)



Six Months Ended June 30,




2016





2015



Average


Income/

Yield/


Average


Income/

Yield/


Balance


Expense

Rate (1)


Balance


Expense

Rate (1)

Assets:










Securities










  Taxable

$      255,374


$         2,969

2.34%


$     217,733


$         2,387

2.21%

  Restricted securities

9,040


242

5.38%


7,490


204

5.49%

  Tax exempt (2)

7,131


134

3.78%


38,504


760

3.98%

   Total securities

271,545


3,345

2.48%


263,727


3,351

2.56%

Interest bearing deposits in other banks

7,846


20

0.51%


6,926


8

0.23%

Federal funds sold

103


-

0.00%


232


-

0.00%

Loans, net of unearned income (3)

903,513


21,949

4.89%


818,059


20,573

5.07%

     Total earning assets

1,183,007


25,314

4.30%


1,088,944


23,932

4.43%

Less allowance for loan losses

(11,076)





(12,714)




Total non-earning assets

111,366





113,530




Total assets

$   1,283,297





$  1,189,760














Liabilities & Shareholders' Equity:










Interest-bearing deposits










  Checking

$      305,799


$            567

0.37%


$     285,428


$            523

0.37%

  Savings

100,890


87

0.17%


92,033


60

0.13%

  Money market savings

163,019


382

0.47%


164,421


385

0.47%

  Time deposits

238,741


1,121

0.94%


237,883


1,017

0.86%

     Total interest-bearing deposits

808,449


2,157

0.54%


779,765


1,985

0.51%

Federal funds purchased and repurchase










     agreements

5,948


14

0.47%


10,055


31

0.62%

Short-term borrowings

115,086


240

0.42%


77,453


79

0.21%

Junior subordinated debt

10,310


180

3.51%


10,310


161

3.15%

Senior subordinated debt

19,045


702

7.41%


7,558


264

7.04%

     Total interest-bearing liabilities

958,838


3,293

0.69%


885,141


2,520

0.57%

Noninterest-bearing liabilities










  Demand deposits

186,829





166,823




  Other liabilities

7,268





6,796




     Total liabilities

1,152,935





1,058,760




Shareholders' equity

130,362





131,000




 Total liabilities and shareholders' equity 

$   1,283,297





$  1,189,760














Net interest income (2)



$       22,021





$       21,412












Interest rate spread (2)(4)




3.61%





3.86%

Interest expense as a percent of










   average earning assets




0.56%





0.47%

Net interest margin (2)(5)




3.74%





3.97%











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


      $41 adjustment for 2016 and a $232 adjustment in 2015.









(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 second quarter of 2016 increased $359 thousand, or 3.4%, when compared to the second quarter of 2015. Net interest income for the six months ended June 30, 2016 increased $800 thousand, or 3.8%, when compared to the same period in 2015. The Company's net interest margin (tax equivalent basis) decreased to 3.71% and 3.74% for the three and six months ended June 30, 2016, respectively, representing 22 and 23 basis point decreases over the Company's net interest margin (tax equivalent basis) for the three and six months ended June 30, 2015. The declines in the net interest margin (tax equivalent basis) were 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. Additionally, the balance of and rates paid on our short-term borrowings increased as compared to the same periods in 2015. These margin pressures were largely offset in the Company's results for the three and six months ended June 30, 2016, as compared to the same periods in 2015, by the impact of increases in average loan balances. The most significant factors impacting net interest income during the three and six month periods ended June 30, 2016 were as follows:

Positive Impact:

Negative Impacts:

Total interest and dividend income

Total interest and dividend income increased 5.7% and 6.6% for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015. The increase in total interest and dividend income during the three and six months ended June 30, 2016 was primarily driven by an increase in average loan and investment securities balances, partially offset by a decrease in average loan and investment securities yields.

Loans

Average loan balances increased for the three and six month periods ended June 30, 2016, as compared to the same periods in 2015, primarily due to organic loan growth and the purchase of $18.3 million in performing one-to-four family residential mortgage loans, consumer loans and government guaranteed loans between June 2015 and June 2016. Loan growth during the first six months of 2016 outpaced our internal targets. However, loan growth in our rural markets, especially with respect to consumer loans, 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 $92.2 million and $85.5 million for the three and six months ended June 30, 2016, respectively, as compared to average loan balances for the same periods in 2015. Total average loans were 76.5% of total average interest-earning assets for the three months ended June 30, 2016, compared to 74.9% for the three months ended June 30, 2015. Total average loans were 76.4% of total average interest-earning assets for the six months ended June 30, 2016, compared to 75.1% for the six months ended June 30, 2015.

Investment securities

Average total investment securities balances increased 1.7% and 3.0% for the three and six month periods ended June 30, 2016, respectively, as compared to the same periods in 2015. The overall increase was the result of management of the Company's liquidity needs to support its operations, along with funds provided by deposit growth and measured loan demand in the Company's markets, partially offset by a lack of investment opportunities with acceptable risk-adjusted rates of return. The Company remains committed to its long-term target of managing the investment securities portfolio to comprise 20% of the Company's total assets. The yields on total average investment securities decreased 10 and 8 basis points for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015. The decrease in yields on average total investment securities during the three and six month periods ended June 30, 2016, as compared to the same periods in 2015, was driven by a lower allocation of the total investment securities portfolio to SBA Pool securities and tax exempt municipal securities, both of which also tend to be higher-yielding segments of the Company's investment securities portfolio. These decreases were partially offset by higher interest rates and a greater allocation of the total investment securities portfolio to higher yielding Agency CMO securities, Agency CMBS securities and taxable municipal securities.

Interest-bearing deposits

Average total interest-bearing deposit balances increased for the three and six month periods ended June 30, 2016, as compared to the same periods in 2015, primarily due to organic deposit growth that was in part driven by the Company's marketing and advertising initiatives as well as new products and services.

Borrowings

Average total borrowings increased for the three and six month periods ended June 30, 2016, as compared to the same periods in 2015, primarily due to the issuance of $20.0 million in senior subordinated debt in April 2015 and increased short-term borrowings. Average short-term borrowings increased for the three and six month periods ended June 30, 2016, as compared to the same periods in 2015, due to additional short-term FHLB advances taken to fund loan growth and other strategic initiatives.

Noninterest Income

The following tables depict the components of noninterest income for the three and six months ended June 30, 2016 and 2015:



Three Months Ended June 30,





(dollars in thousands)


2016


2015


Change $


Change %

Service charges and fees on deposit accounts


$                   728


$                    673


$                    55


8.2%

Other operating income


329


421


(92)


-21.9%

Debit card/ATM fees


448


442


6


1.4%

Gain on sale of available for sale securities, net


172


26


146


561.5%

(Loss) on sale of bank premises and equipment


(5)


(30)


25


83.3%

Total noninterest income


$                1,672


$                 1,532


$                  140


9.1%





















Six Months Ended June 30,





(dollars in thousands)


2016


2015


Change $


Change %

Service charges and fees on deposit accounts


$                1,467


$                 1,336


$                  131


9.8%

Other operating income


683


886


(203)


-22.9%

Debit card/ATM fees


845


805


40


5.0%

Gain on sale of available for sale securities, net


237


51


186


364.7%

(Loss) on sale of bank premises and equipment


(9)


(27)


18


66.7%

Total noninterest income


$                3,223


$                 3,051


$                  172


5.6%

Key changes in the components of noninterest income for the three and six months ended June 30, 2016, as compared to the same periods in 2015, are discussed below:

Noninterest Expense

The following tables depict the components of noninterest expense for the three and six months ended June 30, 2016 and 2015:





Three Months Ended June 30,






(dollars in thousands)



2016


2015


Change $


Change %


Salaries and employee benefits


$                 5,486


$                5,523


$                    (37)


-0.7%


Occupancy and equipment expenses


1,340


1,392


(52)


-3.7%


FDIC expense



204


254


(50)


-19.7%


Collection, repossession and other real estate owned


167


126


41


32.5%


Loss (gain) on sale of other real estate owned


2


(6)


8


133.3%


Merger and merger related expenses


-


3


(3)


-100.0%


Other operating expenses


2,758


2,907


(149)


-5.1%


Total noninterest expenses


$                 9,957


$              10,199


$                  (242)


-2.4%






























Six Months Ended June 30,






(dollars in thousands)



2016


2015


Change $


Change %


Salaries and employee benefits


$               10,734


$              11,011


$                  (277)


-2.5%


Occupancy and equipment expenses


2,770


2,906


(136)


-4.7%


FDIC expense



407


426


(19)


-4.5%


Collection, repossession and other real estate owned


332


215


117


54.4%


Loss on sale of other real estate owned


3


26


(23)


-88.5%


Impairment losses on other real estate owned


-


5


(5)


-100.0%


Merger and merger related expenses


-


224


(224)


-100.0%


Other operating expenses


5,130


5,353


(223)


-4.2%


Total noninterest expenses


$               19,376


$              20,166


$                  (790)


-3.9%


Key changes in the components of noninterest expense for the three and six months ended June 30, 2016, as compared to the same periods in 2015, are discussed below:

Balance Sheet and Asset Quality

Balance Sheet

Key balance sheet components as of June 30, 2016 and December 31, 2015 are as follows:



June 30,


December 31,





(dollars in thousands)


2016


2015


Change $


Change %

Total assets


$    1,294,957


$    1,270,384


$       24,573


1.9%

Interest bearing deposits with banks


13,114


18,304


(5,190)


-28.4%

Securities available for sale, at fair value


231,497


230,943


554


0.2%

Securities held to maturity, at carrying value


29,155


29,698


(543)


-1.8%

Total loans


909,422


880,778


28,644


3.3%

Total deposits


998,587


988,719


9,868


1.0%

Total borrowings


156,988


148,760


8,228


5.5%

Total shareholders' equity


132,692


126,275


6,417


5.1%



















Key balance sheet components as of June 30, 2016 and 2015 are as follows:











June 30,


June 30,





(dollars in thousands)


2016


2015


Change $


Change %

Total assets


$    1,294,957


$    1,219,191


$       75,766


6.2%

Interest bearing deposits with banks


13,114


6,467


6,647


102.8%

Securities available for sale, at fair value


231,497


227,932


3,565


1.6%

Securities held to maturity, at carrying value


29,155


30,671


(1,516)


-4.9%

Total loans


909,422


840,710


68,712


8.2%

Total deposits


998,587


957,222


41,365


4.3%

Total borrowings


156,988


132,544


24,444


18.4%

Total shareholders' equity


132,692


121,909


10,783


8.8%

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 loan losses.

The following table depicts the net charge-off activity for the three and six months ended June 30, 2016 and 2015:



Three months ended June 30,


Six months ended June 30,

 (dollars in thousands) 


2016


2015


2016


2015

Net charge-offs 


$            469


$             371


$             877


$       734

Net charge-offs to average loans (annualized)


0.21%


0.18%


0.20%


0.18%

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



June 30,


December 31,


June 30,

 (dollars in thousands) 


2016


2015


2015

Allowance for loan losses


$               10,467


$                11,327


$                12,287

Allowance for loan losses to period end loans


1.15%


1.29%


1.46%

Allowance for loan losses to nonaccrual loans


180.54%


183.43%


169.17%

Allowance for loan losses to nonperforming loans


125.07%


155.34%


163.77%

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



June 30,


December 31,


June 30,

 (dollars in thousands) 


2016


2015


2015

Nonaccrual loans


$                 5,797


$            6,175


$                 7,263

Loans past due 90 days and accruing interest


2,571


1,117


240

  Total nonperforming loans


$                 8,368


$            7,292


$                 7,503

Other real estate owned ("OREO")


2,280


520


1,344

  Total nonperforming assets


$               10,648


$            7,812


$                 8,847








Nonperforming assets to total loans and OREO


1.17%


0.89%


1.05%








The following tables present the change in the balances of OREO and nonaccrual loans for the six months ended June 30, 2016:

OREO:





Nonaccrual Loans:











(dollars in thousands)





(dollars in thousands)


Balance at December 31, 2015



$      520


Balance at December 31, 2015

$        6,175

Transfers from loans



2,324


Loans returned to accrual status

(1,382)

Capitalized costs



12


Net principal curtailments

(1,582)

Sales proceeds



(573)


Charge-offs


(997)

Impairment losses on valuation adjustments



-


Loan collateral moved to OREO

(2,324)

Loss on disposition



(3)


Loans placed on nonaccrual during period

5,907

Balance at June 30, 2016



$   2,280


Balance at June 30, 2016

$        5,797

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:



June 30,


December 31,


June 30,


(dollars in thousands)


2016


2015


2015


Performing TDRs


$                      14,224


$                      15,535


$                      14,843


Nonperforming TDRs*


1,830


1,300


2,252


  Total TDRs


$                      16,054


$                      16,835


$                      17,095










*  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 of portions of the Company's asset portfolio, future changes to the Bank's branch network, the pending relocation of the Company's corporate headquarters, 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 Company's liquidity; (vi) statements of management's expectations regarding future trends in interest rates, real estate values, business opportunities and economic conditions generally and in the Company's markets; (vii) statements regarding future asset quality, including expected levels of charge-offs; (viii) statements regarding potential changes to laws, regulations or administrative guidance; (ix) statements regarding strategic initiatives of the Company or the Bank and the results of these initiatives; and (x) 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, 2015 and other reports filed with the SEC.


Selected Financial Information









 (dollars in thousands, except per share data) 


Three months ended June 30,


Six months ended June 30,

Statements of Income


2016


2015


2016


2015

Interest and dividend income 


$             12,619


$          11,935


$             25,273


$           23,700

Interest expense


1,654


1,329


3,293


2,520

   Net interest income


10,965


10,606


21,980


21,180

Provision for loan losses


-


-


17


-

   Net interest income after provision for loan losses


10,965


10,606


21,963


21,180










Service charges and fees on deposit accounts


728


673


1,467


1,336

Other operating income


329


421


683


886

Debit card/ATM fees


448


442


845


805

Gain on sale of available for sale securities, net


172


26


237


51

(Loss) on sale of bank premises and equipment


(5)


(30)


(9)


(27)

Noninterest income


1,672


1,532


3,223


3,051










Salaries and employee benefits


5,486


5,523


10,734


11,011

Occupancy and equipment expenses


1,340


1,392


2,770


2,906

FDIC expense


204


254


407


426

Collection, repossession and other real estate owned


167


126


332


215

Loss (gain) on sale of other real estate owned


2


(6)


3


26

Impairment losses on other real estate owned


-


-


-


5

Merger and merger related expenses


-


3


-


224

Other operating expenses


2,758


2,907


5,130


5,353

Noninterest expenses


9,957


10,199


19,376


20,166










Income before income taxes


2,680


1,939


5,810


4,065

Income tax expense


770


432


1,673


949

   Net income 


$               1,910


$            1,507


$               4,137


$             3,116

   Less: Effective dividend on preferred stock


-


166


-


386

   Net income available to common shareholders


$               1,910


$            1,341


$               4,137


$             2,730

Net income per common share: basic and diluted


$                 0.11


$              0.07


$                 0.23


$               0.15










Selected Ratios









Return on average assets (annualized)


0.59%


0.45%


0.65%


0.46%

Return on average common shareholders' equity (annualized)


6.97%


5.29%


7.65%


5.46%

Net interest margin (tax equivalent basis)


3.71%


3.93%


3.74%


3.97%

Period End Balances









Investment securities


$           270,064


$        266,721


$           270,064


$         266,721

Loans, net of unearned income


909,422


840,710


909,422


840,710

Total assets


1,294,957


1,219,191


1,294,957


1,219,191

Total deposits


998,587


957,222


998,587


957,222

Total borrowings


156,988


132,544


156,988


132,544

Total shareholders' equity


132,692


121,909


132,692


121,909

Book value per common share


8.60


7.79


8.60


7.79

Average Balances









Investment securities


$           272,380


$        267,739


$           271,545


$         263,727

Loans, net of unearned income


911,285


819,061


903,513


818,059

Total earning assets


1,191,101


1,093,874


1,183,007


1,088,944

Total assets


1,291,346


1,194,720


1,283,297


1,189,760

Total deposits


1,001,413


950,967


995,278


946,588

Total borrowings


151,208


106,145


150,389


105,376

Total shareholders' equity


131,780


130,661


130,362


131,000

Asset Quality at Period End









Allowance for loan losses


$             10,467


$          12,287


$             10,467


$           12,287

Nonperforming assets


10,648


8,847


10,648


8,847

Net charge-offs 


469


371


877


734

Net charge-offs to average loans


0.21%


0.18%


0.20%


0.18%

Allowance for loan losses to period end loans


1.15%


1.46%


1.15%


1.46%

Allowance for loan losses to nonaccrual loans


180.54%


169.17%


180.54%


169.17%

Allowance for loan losses to nonperforming loans


125.07%


163.77%


125.07%


163.77%

Nonperforming assets to total assets


0.82%


0.73%


0.82%


0.73%

Nonperforming assets to total loans and other real estate owned

1.17%


1.05%


1.17%


1.05%

Other Information









Number of common shares outstanding - period end


13,101,448


13,023,550


13,101,448


13,023,550

Average common shares outstanding - basic


13,098,512


13,023,550


13,066,880


13,004,595

Average common shares outstanding - diluted


18,338,704


18,263,742


18,307,072


18,244,787

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



(Back To Top)