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

fcbc20181022_8k.htm

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, 2018

 
 
 

FIRST COMMUNITY BANKSHARES, INC.

 

(Exact name of registrant as specified in its charter)

 

 

Virginia

 

000-19297

 

55-0694814

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 
 

P.O. Box 989

Bluefield, Virginia

 

24605-0989

(Address of principal executive offices)

 

(Zip Code)

 

 

Registrant’s telephone number, including area code: (276) 326-9000

 

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 2.02     Results of Operations and Financial Condition.

 

On October 23, 2018, First Community Bankshares, Inc. (the “Company”) announced by press release its earnings for the third quarter of 2018. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 8.01     Other Events.     

 

On October 23, 2018, the Company announced by press release its quarterly cash dividend to common shareholders of twenty-one cents ($0.21) per common share, payable on November 16, 2018, to shareholders of record on November 2, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01     Financial Statements and Exhibits.

 

(d)

 

The following exhibit is included with this report:

 

 

 

Exhibit No.

 

Exhibit Description

 

 

 

99.1

 

Earnings and dividend press release dated October 23, 2018

 

Forward-Looking Statements 

 

This Current Report on Form 8-K contains forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include:  changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10-K for the most recent year ended. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

 

 

 

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.

 

 

 

FIRST COMMUNITY BANKSHARES, INC.

     

Date:

October 23, 2018

 

By:

/s/ David D. Brown

     
   

David D. Brown

   

Chief Financial Officer

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_125959.htm

Exhibit 99.1

 

 

NEWS RELEASE

FOR IMMEDIATE RELEASE:

 

FOR MORE INFORMATION, CONTACT:

October 23, 2018

 

David D. Brown

   

(276) 326-9000

 

First Community Bankshares, Inc. Announces Third Quarter 2018 Results

and Quarterly Dividend

 

Bluefield, Virginia – First Community Bankshares, Inc. (NASDAQ: FCBC) (www.firstcommunitybank.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and nine months ended September 30, 2018. The Company reported net income of $9.10 million, or $0.55 per diluted common share, for the quarter ended September 30, 2018, which represents a 22.22% increase in per share diluted earnings compared to the same quarter of 2017. Net income was $27.03 million, or $1.61 per diluted common share, for the nine months ended September 30, 2018, which represents a 35.29% increase in per share diluted earnings compared to the same period of 2017.

 

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of twenty-one cents ($0.21) per common share. The quarterly dividend is payable to common shareholders of record on November 2, 2018, and is expected to be paid on or about November 16, 2018. The current year marks the 33rd consecutive year of regular cash dividends paid to shareholders.

 

Third Quarter 2018 Highlights

 

General

 

o

The Company sold its remaining insurance agency assets to Bankers Insurance, LLC of Glen Allen, Virginia (“BI”) in exchange for an equity interest in BI. The sale, which closed October 1, 2018, strategically allows the Company to continue offering insurance products to its customers through a larger, more diversified insurance agency. The Company recognized a one-time goodwill impairment of $1.49 million in connection with the decision to divest the insurance agency.

 

o

The Company prepaid its remaining $50 million of FHLB debt. The prepayment was funded with cash and equivalents on hand, as well as the proceeds from the sale of single issue trust preferred investment securities, and should result in annualized net pre-tax savings of approximately $800 thousand.

  o The divestiture of the remaining insurance agency assets and reduction of FHLB debt, in conjunction with the sale of the remaining trust preferred securities culminates a 5-year plan to return the Company's balance sheet and business model to a traditional, simplified, and de-risked community bank.
 

o

The Company finalized its 2017 tax returns and the deferred tax asset revaluation charge originally taken in the fourth quarter of 2017, which resulted in a reduction in tax expense of approximately $1.67 million.

 

o

The Company completed its Plan of Reincorporation and Merger approved by the shareholders in April 2018 changing its corporate domicile from Nevada to Virginia, along with a slight revision to the spelling of its name.

 

Income Statement

 

o

Net income increased $1.45 million, or 18.92%, to $9.10 million compared to the same quarter of 2017.

 

o

Diluted earnings per share increased $0.10, or 22.22%, to $0.55 and adjusted diluted earnings per share increased $0.17, or 37.78%, to $0.62 compared to the same quarter of 2017.

 

o

Return on average assets improved 26 basis points to 1.55% and return on average equity improved 198 basis points to 10.59% compared to the same quarter of 2017.

 

o

Net interest margin increased 10 basis points to 4.36% compared to the same quarter of 2017.

 

Balance Sheet

 

o

The Company repurchased 195,776 common shares for $6.57 million during the quarter compared to 39,516 common shares for $1.01 million during the same quarter of 2017. Year to date, the Company has repurchased 670,016 common shares for $21.29 million compared to 50,118 shares for $1.26 million during the same period of 2017.

 

o

The Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of September 30, 2018.

 

1

 

 

Non-GAAP Financial Measures

 

The Company prepares its financial statements in accordance with GAAP. This press release refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measures presented in this release include adjusted earnings, tangible book value per common share, and average tangible common equity. Management believes that adjusted earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. The reconciliations of these measures to GAAP measures are provided within this news release.

 

About First Community Bankshares, Inc.

 

First Community Bankshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 44 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of September 30, 2018. First Community Bank offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed and administered $1.04 billion in combined assets as of September 30, 2018. The Company reported consolidated assets of $2.27 billion as of September 30, 2018. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website at www.firstcommunitybank.com.

 

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

2

 

 

Financial Performance

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
(Amounts in thousands, except share  

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

September 30,

 

and per share data)

 

2018

   

2018

   

2018

   

2017

   

2017

   

2018

   

2017

 

Interest income

                                                       

Interest and fees on loans

  $ 22,556     $ 22,422     $ 22,755     $ 22,314     $ 22,694     $ 67,733     $ 67,435  

Interest on securities

    1,372       1,361       1,104       1,095       1,080       3,837       3,456  

Interest on deposits in banks

    358       514       471       353       275       1,343       655  

Total interest income

    24,286       24,297       24,330       23,762       24,049       72,913       71,546  

Interest expense

                                                       

Interest on deposits

    1,269       1,327       1,251       1,313       1,275       3,847       3,674  

Interest on borrowings

    692       708       700       716       724       2,100       2,387  

Total interest expense

    1,961       2,035       1,951       2,029       1,999       5,947       6,061  

Net interest income

    22,325       22,262       22,379       21,733       22,050       66,966       65,485  

Provision for loan losses

    495       495       495       615       730       1,485       2,156  

Net interest income after provision

    21,830       21,767       21,884       21,118       21,320       65,481       63,329  

Noninterest income

    6,519       6,959       6,668       7,498       6,703       20,146       17,070  

Noninterest expense

    18,131       17,160       17,116       16,683       16,477       52,407       50,219  

Income before income taxes

    10,218       11,566       11,436       11,933       11,546       33,220       30,180  

Income tax expense

    1,118       2,500       2,568       10,720       3,894       6,186       9,908  

Net income

  $ 9,100     $ 9,066     $ 8,868     $ 1,213     $ 7,652     $ 27,034     $ 20,272  
                                                         

Earnings per common share

                                                       

Basic

  $ 0.55     $ 0.54     $ 0.52     $ 0.07     $ 0.45     $ 1.62     $ 1.19  

Diluted

    0.55       0.54       0.52       0.07       0.45       1.61       1.19  

Cash dividends per common share

    0.21       0.18       0.66       0.18       0.18       1.05       0.50  

Weighted average shares outstanding

                                                       

Basic

    16,512,823       16,689,398       16,955,758       16,992,519       17,005,654       16,717,704       17,005,350  

Diluted

    16,612,416       16,788,615       17,047,638       17,083,949       17,082,729       16,810,425       17,076,958  

Performance ratios

                                                       

Return on average assets

    1.55 %     1.53 %     1.52 %     0.20 %     1.29 %     1.53 %     1.14 %

Return on average common equity

    10.59 %     10.68 %     10.30 %     1.35 %     8.61 %     10.52 %     7.80 %

Return on average tangible common equity(1)

    15.06 %     15.21 %     14.53 %     1.89 %     12.13 %     14.93 %     11.06 %

 


(1)

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill and other intangibles

 

 RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

September 30,

 
(Amounts in thousands, except  

2018

   

2018

   

2018

   

2017

   

2017

   

2018

   

2017

 

per share data)

                                                       

Net income, GAAP

  $ 9,100     $ 9,066     $ 8,868     $ 1,213     $ 7,652     $ 27,034     $ 20,272  

Non-GAAP adjustments:

                                                       

Net loss on sale of securities

    618       -       -       4       -       618       657  

FHLB debt prepayment fees

    1,096       -       -       -       -       1,096       -  

Goodwill impairment

    1,492       -       -       -       -       1,492       -  

Deferred tax asset revaluation

    (1,669 )     -       -       6,552       -       (1,669 )     -  

Other items

    -       297       (130 )     (140 )     34       167       (158 )

Total adjustments

    1,537       297       (130 )     6,416       34       1,704       499  

Tax effect

    411       96       (24 )     (50 )     12       483       350  

Adjusted earnings, non-GAAP(1)

  $ 10,226     $ 9,267     $ 8,762     $ 7,679     $ 7,674     $ 28,255     $ 20,421  
                                                         

Adjusted diluted earnings per common share

  $ 0.62     $ 0.55     $ 0.51     $ 0.45     $ 0.45     $ 1.68     $ 1.19  

Performance ratios

                                                       

Adjusted return on average assets

    1.74 %     1.57 %     1.50 %     1.28 %     1.29 %     1.60 %     1.15 %

Adjusted return on average common equity

    11.90 %     10.91 %     10.17 %     8.56 %     8.63 %     11.00 %     7.86 %

Adjusted return on average tangible common equity(2)

    16.93 %     15.55 %     14.36 %     11.99 %     12.16 %     15.61 %     11.14 %

 


(1)

Excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; deferred tax revaluation impacts; and other non-recurring income and expense items from net income

(2)

A non-GAAP financial measure defined as average stockholders’ equity less average goodwill and other intangibles

 

3

 

 

Net Interest Income and Margin

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Three Months Ended September 30,

 
   

2018

   

2017

 

(Amounts in thousands)

 

Average

Balance

   

Interest(1)

   

Average Yield/

Rate(1)

   

Average

Balance

   

Interest(1)

   

Average Yield/

Rate(1)

 

Assets

                                               

Earning assets

                                               

Loans(2)(3)

  $ 1,792,284     $ 22,632       5.01 %   $ 1,843,612     $ 22,765       4.90 %

Securities available for sale

    188,975       1,647       3.46 %     157,038       1,373       3.47 %

Securities held to maturity

    25,064       105       1.66 %     25,199       106       1.67 %

Interest-bearing deposits

    66,137       358       2.15 %     73,802       275       1.48 %

Total earning assets

    2,072,460       24,742       4.74 %     2,099,651       24,519       4.63 %

Other assets

    253,199                       258,763                  

Total assets

  $ 2,325,659                     $ 2,358,414                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 459,759     $ 39       0.03 %   $ 384,594     $ 48       0.05 %

Savings deposits

    502,255       85       0.07 %     518,355       84       0.06 %

Time deposits

    463,885       1,145       0.98 %     509,251       1,143       0.89 %

Total interest-bearing deposits

    1,425,899       1,269       0.35 %     1,412,200       1,275       0.36 %

Borrowings

                                               

Federal funds purchased

    -       -       -       -       -       -  

Retail repurchase agreements

    3,455       1       0.11 %     58,194       10       0.07 %

Wholesale repurchase agreements

    25,000       203       3.22 %     25,000       203       3.22 %

FHLB advances and other borrowings

    47,826       488       4.05 %     50,000       511       4.05 %

Total borrowings

    76,281       692       3.60 %     133,194       724       2.16 %

Total interest-bearing liabilities

    1,502,180       1,961       0.52 %     1,545,394       1,999       0.51 %

Noninterest-bearing demand deposits

    454,126                       440,227                  

Other liabilities

    28,430                       20,101                  

Total liabilities

    1,984,736                       2,005,722                  

Stockholders' equity

    340,923                       352,692                  

Total liabilities and stockholders' equity

  $ 2,325,659                     $ 2,358,414                  

Net interest income, FTE

          $ 22,781                     $ 22,520          

Net interest rate spread

                    4.22 %                     4.12 %

Net interest margin

                    4.36 %                     4.26 %

 


(1)

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 21% for periods after January 1, 2018, and 35% for periods prior to January 1, 2018

(2)

Interest on loans included non-cash purchase accounting accretion of $1.05 million and $1.38 million for the three months ended September 30, 2018 and 2017, respectively.

(3)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

 

4

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   

Nine Months Ended September 30,

 
   

2018

   

2017

 

(Amounts in thousands)

 

Average

Balance

   

Interest(1)

   

Average Yield/

Rate(1)

   

Average

Balance

   

Interest(2)

   

Average Yield/

Rate(2)

 

Assets

                                               

Earning assets

                                               

Loans(3)

  $ 1,797,689     $ 67,954       5.05 %   $ 1,841,981     $ 67,645       4.91 %

Securities available for sale

    181,630       4,672       3.44 %     162,198       4,312       3.55 %

Securities held to maturity

    25,098       314       1.67 %     35,578       382       1.44 %

Interest-bearing deposits

    97,623       1,343       1.84 %     66,069       655       1.33 %

Total earning assets

    2,102,040       74,283       4.72 %     2,105,826       72,994       4.63 %

Other assets

    252,797                       264,333                  

Total assets

  $ 2,354,837                     $ 2,370,159                  
                                                 

Liabilities and stockholders' equity

                                               

Interest-bearing deposits

                                               

Demand deposits

  $ 469,081     $ 206       0.06 %   $ 384,265     $ 162       0.06 %

Savings deposits

    512,897       250       0.07 %     523,219       253       0.06 %

Time deposits

    478,265       3,391       0.95 %     513,072       3,259       0.85 %

Total interest-bearing deposits

    1,460,243       3,847       0.35 %     1,420,556       3,674       0.35 %

Borrowings

                                               

Federal funds purchased

    -       -       -       2       -       0.00 %

Retail repurchase agreements

    3,836       3       0.10 %     61,951       31       0.07 %

Wholesale repurchase agreements

    25,000       603       3.22 %     25,000       602       3.22 %

FHLB advances and other borrowings

    49,267       1,494       4.05 %     57,357       1,754       4.09 %

Total borrowings

    78,103       2,100       3.59 %     144,310       2,387       2.21 %

Total interest-bearing liabilities

    1,538,346       5,947       0.52 %     1,564,866       6,061       0.52 %

Noninterest-bearing demand deposits

    444,672                       435,825                  

Other liabilities

    28,257                       21,905                  

Total liabilities

    2,011,275                       2,022,596                  

Stockholders' equity

    343,562                       347,563                  

Total liabilities and stockholders' equity

  $ 2,354,837                     $ 2,370,159                  

Net interest income, FTE

          $ 68,336                     $ 66,933          

Net interest rate spread

                    4.20 %                     4.11 %

Net interest margin

                    4.35 %                     4.25 %

 


(1)

Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 21% for periods after January 1, 2018, and 35% for periods prior to January 1, 2018

(2)

Interest on loans included non-cash purchase accounting accretion of $4.26 million for the nine months ended September 30, 2018 and 2017.

(3)

Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

 

5

 

 

Noninterest Income and Expense

 

CONDENSED QUARTERLY NONINTEREST INCOME AND EXPENSE (Unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

   

September 30,

 

(Amounts in thousands)

 

2018

   

2018

   

2018

   

2017

   

2017

   

2018

   

2017

 

Noninterest income

                                                       

Wealth management

  $ 791     $ 823     $ 794     $ 811     $ 758     $ 2,408     $ 2,339  

Service charges on deposits

    3,803       3,612       3,468       3,725       3,605       10,883       10,078  

Other service charges and fees

    1,925       1,934       1,857       1,788       1,709       5,716       5,156  

Insurance commissions

    299       338       329       343       306       966       1,004  

Net loss on sale of securities

    (618 )     -       -       (4 )     -       (618 )     (657 )

Net FDIC indemnification asset amortization

    (645 )     (575 )     (382 )     (331 )     (268 )     (1,602 )     (3,186 )

Other operating income

    964       827       602       1,166       593       2,393       2,336  

Total noninterest income

    6,519       6,959       6,668       7,498       6,703       20,146       17,070  

Noninterest expense

                                                       

Salaries and employee benefits

    8,983       8,993       9,441       9,003       9,001       27,417       26,771  

Occupancy expense

    1,075       1,083       1,250       1,104       1,082       3,408       3,671  

Furniture and equipment expense

    985       945       1,046       1,114       1,133       2,976       3,311  

Service fees

    1,134       851       828       703       705       2,813       2,645  

Advertising and public relations

    478       461       522       506       551       1,461       1,700  

Professional fees

    337       430       307       589       339       1,074       1,978  

Amortization of intangibles

    261       263       261       266       266       785       790  

FDIC premiums and assessments

    234       252       211       212       227       697       698  

FHLB debt prepayment fees

    1,096       -       -       -       -       1,096       -  

Goodwill impairment

    1,492       -       -       -       -       1,492       -  

Other operating expense

    2,056       3,882       3,250       3,186       3,173       9,188       8,655  

Total noninterest expense

    18,131       17,160       17,116       16,683       16,477       52,407       50,219  

 

6

 

 

Balance Sheet and Capital

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

 

   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

(Amounts in thousands, except per share data)

 

2018

   

2018

   

2018

   

2017

   

2017

 

Assets

                                       

Cash and cash equivalents

  $ 73,679     $ 107,957     $ 205,140     $ 157,951     $ 105,119  

Debt securities available for sale

    163,593       196,425       164,192       165,580       174,424  

Debt securities held to maturity

    25,047       25,082       25,115       25,149       25,182  

Loans held for investment, net of unearned income

                                       

Non-covered

    1,770,426       1,776,112       1,767,703       1,789,236       1,806,434  

Covered

    20,483       22,919       25,406       27,948       31,287  

Allowance for loan losses

    (18,256 )     (19,583 )     (19,500 )     (19,276 )     (19,206 )

Loans held for investment, net

    1,772,653       1,779,448       1,773,609       1,797,908       1,818,515  

FDIC indemnification asset

    5,653       6,390       6,884       7,161       7,465  

Premises and equipment, net

    45,537       45,547       46,415       48,126       48,949  

Other real estate owned, non-covered

    4,754       4,805       4,620       2,409       3,543  

Other real estate owned, covered

    44       44       70       105       54  

Interest receivable

    5,374       5,580       5,155       5,778       5,156  

Goodwill

    94,287       95,779       95,779       95,779       95,779  

Other intangible assets

    5,366       5,628       5,891       6,151       6,417  

Other assets

    73,701       75,435       95,437       76,363       84,177  

Total assets

  $ 2,269,688     $ 2,348,120     $ 2,428,307     $ 2,388,460     $ 2,374,780  
                                         

Liabilities

                                       

Deposits

                                       

Noninterest-bearing

  $ 463,945     $ 462,851     $ 460,478     $ 454,143     $ 452,940  

Interest-bearing

    1,411,906       1,441,887       1,520,141       1,475,748       1,410,880  

Total deposits

    1,875,851       1,904,738       1,980,619       1,929,891       1,863,820  

Securities sold under agreements to repurchase

    30,151       27,869       29,115       30,086       83,783  

FHLB borrowings

    -       50,000       50,000       50,000       50,000  

Interest, taxes, and other liabilities

    25,284       26,392       26,536       27,769       24,540  

Total liabilities

    1,931,286       2,008,999       2,086,270       2,037,746       2,022,143  
                                         

Stockholders' equity

                                       

Common stock

    21,382       21,382       21,382       21,382       21,382  

Additional paid-in capital

    229,182       228,949       228,774       228,750       228,510  

Retained earnings

    189,902       184,279       178,227       180,543       182,145  

Treasury stock, at cost

    (99,247 )     (92,904 )     (83,865 )     (79,121 )     (79,333 )

Accumulated other comprehensive loss

    (2,817 )     (2,585 )     (2,481 )     (840 )     (67 )

Total stockholders' equity

    338,402       339,121       342,037       350,714       352,637  

Total liabilities and stockholders' equity

  $ 2,269,688     $ 2,348,120     $ 2,428,307     $ 2,388,460     $ 2,374,780  
                                         

Shares outstanding at period-end

    16,390,502       16,574,347       16,847,452       16,998,226       16,986,502  

Book value per common share

  $ 20.65     $ 20.46     $ 20.30     $ 20.63     $ 20.76  

Tangible book value per common share(1)

    14.57       14.34       14.27       14.64       14.74  

 


(1)

A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangibles, divided by common shares outstanding

 

7

 

 

Asset Quality

 

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

 

   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

(Amounts in thousands)

 

2018

   

2018

   

2018

   

2017

   

2017

 

Allowance for Loan Losses

                                       

Beginning balance

  $ 19,583     $ 19,500     $ 19,276     $ 19,206     $ 18,886  

Provision for loan losses charged to operations

    495       495       495       615       730  

Charge-offs

    (2,176 )     (750 )     (698 )     (967 )     (717 )

Recoveries

    354       338       427       422       307  

Net charge-offs

    (1,822 )     (412 )     (271 )     (545 )     (410 )

Ending balance

  $ 18,256     $ 19,583     $ 19,500     $ 19,276     $ 19,206  
                                         

Nonperforming Assets

                                       

Non-covered nonperforming assets

                                       

Nonaccrual loans

  $ 20,542     $ 21,467     $ 21,650     $ 18,997     $ 18,942  

Accruing loans past due 90 days or more

    46       -       27       1       -  

Troubled debt restructurings ("TDRs")(1)

    189       133       77       120       141  

Total non-covered nonperforming loans

    20,777       21,600       21,754       19,118       19,083  

OREO

    4,754       4,805       4,620       2,409       3,543  

Total non-covered nonperforming assets

  $ 25,531     $ 26,405     $ 26,374     $ 21,527     $ 22,626  
                                         

Covered nonperforming assets

                                       

Nonaccrual loans

  $ 330     $ 509     $ 596     $ 342     $ 420  

Total covered nonperforming loans

    330       509       596       342       420  

OREO

    44       44       70       105       54  

Total covered nonperforming assets

  $ 374     $ 553     $ 666     $ 447     $ 474  
                                         

Additional Information

                                       

Performing TDRs(2)

  $ 6,953     $ 6,847     $ 7,220     $ 7,614     $ 8,101  

Total TDRs(3)

    7,142       6,980       7,297       7,734       8,242  
                                         

Non-covered ratios

                                       

Nonperforming loans to total loans

    1.17 %     1.22 %     1.23 %     1.07 %     1.06 %

Nonperforming assets to total assets

    1.14 %     1.14 %     1.10 %     0.91 %     0.97 %

Non-PCI allowance to nonperforming loans

    87.87 %     90.66 %     89.64 %     100.83 %     100.64 %

Non-PCI allowance to total loans

    1.03 %     1.10 %     1.10 %     1.08 %     1.06 %

Annualized net charge-offs to average loans

    0.41 %     0.09 %     0.06 %     0.12 %     0.09 %
                                         

Total ratios

                                       

Nonperforming loans to total loans

    1.18 %     1.23 %     1.25 %     1.07 %     1.06 %

Nonperforming assets to total assets

    1.14 %     1.15 %     1.11 %     0.92 %     0.97 %

Allowance for loan losses to nonperforming loans

    86.49 %     88.57 %     87.25 %     99.05 %     98.48 %

Allowance for loan losses to total loans

    1.02 %     1.09 %     1.09 %     1.06 %     1.05 %

Annualized net charge-offs to average loans

    0.40 %     0.09 %     0.06 %     0.12 %     0.09 %

 


(1)

Accruing TDRs restructured within the past six months or nonperforming

(2)

Accruing TDRs with six months or more of satisfactory payment performance

(3)

Accruing total TDRs

 

8

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