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Section 1: 8-K (8-K)

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) January 31, 2019

 

 

Malvern Bancorp, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Pennsylvania   000-54835   45-5307782

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

42 E. Lancaster Avenue, Paoli, Pennsylvania   19301
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (610) 644-9400

Not Applicable

(Former name or former address, if changed since last report)

 

 

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 (see General Instruction A.2 below):

 

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 January 31, 2019, Malvern Bancorp, Inc. (the “Company”), the holding company for Malvern Bank, National Association (the “Bank”), reported its results of operations for the first fiscal quarter ended December 31, 2018.

For additional information, reference is made to the Company’s press release dated January 31, 2019, which is included as Exhibit 99.1 hereto and is incorporated herein by reference thereto. The press release attached hereto as Exhibit 99.1 is being furnished to the Securities and Exchange Commission (the “SEC”) and shall not be deemed to be “filed” for any purpose except as otherwise provided herein.

Item 9.01 Financial Statements and Exhibits

 

  (a)

Not applicable.

 

  (b)

Not applicable.

 

  (c)

Not applicable.

 

  (d)

Exhibits

The following exhibit is included herewith.

 

Exhibit Number

  

Description

99.1 (furnished, not filed)

   Press release dated January 31, 2019

 

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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 thereunto duly authorized.

 

   MALVERN BANCORP, INC.
Date: February 1, 2019    By:  

/s/ Joseph D. Gangemi

     Joseph D. Gangemi
     Senior Vice President and Chief Financial Officer

 

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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

Investor Relations:

Joseph D. Gangemi

SVP & CFO

(610) 695-3676

Investor Contact:

Ronald Morales

(610) 695-3646

Malvern Bancorp, Inc. Reports First Fiscal Quarter 2019 Results

PAOLI, PA., January 31, 2019 — Malvern Bancorp, Inc. (NASDAQ: MLVF) (the “Company”), parent company of Malvern Bank, National Association (“Malvern” or the “Bank”), today reported operating results for the first fiscal quarter ended December 31, 2018.    Net income amounted to $2.0 million, or $0.27 per fully diluted common share, for the quarter ended December 31, 2018, compared with net income of $403,000, or $0.06 per fully diluted common share, for the quarter ended December 31, 2017.

Net income for the first quarter of 2019 included additional provision for loan losses expense of $967,000, net of tax, related to the write-down of one commercial loan that was moved from troubled debt restructured (‘TDR’) to other real estate owned (“OREO”), and non-core items, as discussed in detail on page 12. Excluding the additional provision expense and non-core items, net income was $3.2 million, or $0.42 diluted earnings per share, for the three months ended December 31, 2018, as compared to $2.7 million, or $0.41 diluted earnings per share, for the three months ended September 30, 2018, and $1.7 million, or $0.26 diluted earnings per share, for the three months ended December 31, 2017.

The Company recognized a tax expense in our tax provision for the quarter ended December 31, 2017 related to adjusting our deferred tax balance to reflect a change in the federal statutory rate from 35% to 21%, resulting from the Tax Cuts and Jobs Act (“Tax Act”) that was enacted on December 22, 2017. Income tax expense reported for the first three months of the Company’s prior fiscal year gave effect to the change in the tax law which resulted in an increase in income tax expense of $2.0 million during the quarter ended December 31, 2017.

Management believes that core net income, a non-GAAP measure, is important in evaluating the Company’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in this earnings release.

Excluding the additional provision expense, first quarter 2019 adjusted annualized return on average assets was 1.10% and adjusted annualized return on average equity was 8.89%. For the quarter ended December 31, 2018, annualized return on average assets was 0.74% and annualized return on average equity was 6.00%.


Anthony C. Weagley, President and CEO, commented on the financial results: “We are pleased with this quarter’s results and the continued success in achieving our strategic plan. We continue to deliver results consistent with our strategic plan. Despite the hurdles experienced during the quarter, Malvern continued to strengthen its balance sheet, grow top line revenue and improve credit quality. While we took on an REO property during the quarter, we see this as a positive step in securing our interest through the deed in lieu process. Acting quickly and gaining control of the asset was critical and should aid in the quick disposal of the asset. Our board and management have the necessary real estate expertise and sense of urgency to effect a quick disposal and are in the process of marketing the property.”

“Our credit quality continues to improve and loan growth remains strong with gross new originations of approximately $65 million during the quarter. As a result of delays, due to the holiday season, approximately $25,0 million of new originations approved in December were pushed into the second fiscal quarter with an additional $50.0 million in new originations currently approved and pending settlement, also expected to close during the second fiscal quarter.    Our pipelines remain strong and are actively growing, consistent with prior periods.”

Joseph Gangemi, Chief Financial Officer of Malvern Bancorp, Inc., added, “We experienced strong deposit growth during the quarter, reflective of our funding strategies and business development efforts. We anticipate these funds being deployed into loans during the second fiscal quarter but will note that carrying the excess cash on our balance sheet had an 11 basis point dampening effect on the margin for the first quarter.”

 

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Highlights for the quarter include:

 

The annualized return on average assets (“ROAA”) was 0.74 percent for the three months ended December 31, 2018, compared to 0.15 percent for the three months ended December 31, 2017, and annualized return on average equity (“ROAE”) was 6.00 percent for the three months ended December 31, 2018, compared with 1.55 percent for the three months ended December 31, 2017. Excluding the additional provision expense, first quarter 2019 adjusted annualized return on average assets was 1.10% and adjusted annualized return on average equity was 8.89%.

 

The Company originated $64.7 million in new loans in the first quarter of fiscal 2019, which was offset in part by $41.9 million in participations, payoffs, prepayments and maturities from its portfolio, resulting in net portfolio growth of $22.8 million over the fourth quarter of fiscal 2018; new loan originations in the first quarter of fiscal 2019 consisted of $51.3 million in commercial loans, $5.6 million in residential mortgage loans, $5.4 million in construction and development loans and $2.4 million in consumer loans.

 

Non-performing assets (“NPAs”) were 0.81 percent of total assets at December 31, 2018, compared to 0.30 percent at September 30, 2018 and 0.24 percent at December 31, 2017. The allowance for loan losses as a percentage of total non-performing loans was 278.4 percent at December 31, 2018, compared to 294.7 percent at September 30, 2018 and 326.1 percent at December 31, 2017.

 

The Company’s ratio of shareholders’ equity to total assets was 12.02 percent at December 31, 2018, compared to 10.72 percent at September 30, 2018, and 9.76 percent at December 31, 2017.

 

Book value per common share amounted to $17.45 at December 31, 2018, compared to $16.84 at September 30, 2018 and $15.70 at December 31, 2017. The efficiency ratio, a non-GAAP measure, was 48.1 percent for the first quarter of fiscal 2019, compared to 58.3 percent for the fourth quarter of fiscal 2018 and 64.0 percent in the first quarter of fiscal 2018.

 

The Company’s total assets increased by $94.5 million at December 31, 2018, compared to September 30, 2018 coupled with stable asset quality, and capital levels that exceeded regulatory standards for a well-capitalized institution.

 

As previously disclosed in the Company’s Form 8-K filed on October 9, 2018, the Company closed an underwritten public offering of shares of our common stock for gross proceeds of $25.0 million and net proceeds of approximately $23.4 million (after deducting the underwriting discount and other estimated offering expenses).

 

The effective tax rate for the first quarter of 2019 decreased to 21.0% from 88.9% for the first quarter of 2018. In the first quarter of fiscal 2018, the Company revised its estimated annual effective rate to reflect a change in the federal statutory rate from 35% to 21%, resulting from the Tax Cuts and Jobs Act that was enacted on December 22, 2017. In addition, we recognized a tax expense in our tax provision for the quarter ended December 31, 2017 related to adjusting our deferred tax balance to reflect the new corporate tax rate. Income tax expense reported for the first three months of fiscal 2018 reflected the effects of the change in the tax law and resulted in an increase in income tax expense of $2.0 million during the quarter ended December 31, 2017. This $2.0 million amount was the result of a reduction of $323,000 in income tax expense for the three-month period ended December 31, 2017 related to the lower corporate rate and a $2.3 million increase related to the application of the newly enacted rates to existing deferred tax assets balances.

 

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Selected Financial Ratios

(unaudited; annualized where applicable)

 

As of or for the quarter ended :

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Return on average assets (1)

     0.74     1.02     0.85     0.77     0.15

Return on average equity (1)

     6.00     9.63     8.40     7.71     1.55

Net interest margin (tax equivalent basis) (2)

     2.65     2.85     2.75     2.58     2.47

Loans / deposits ratio

     110.70     117.62     114.46     102.38     102.19

Shareholders’ equity / total assets

     12.02     10.72     10.25     9.73     9.76

Efficiency ratio (1)

     48.1     58.3     52.9     57.9     64.0

Book value per common share

   $ 17.45     $ 16.84     $ 16.42     $ 16.03     $ 15.70  

 

(1)

Annualized.

(2)

Information reconciling non-GAAP measures to GAAP measures is presented elsewhere in this press release.

Net Interest Income

Net interest income was $6.9 million for the three months ended December 31, 2018, increasing $565,000, or 8.9 percent, from $6.4 million for the comparable three-month period in fiscal 2018. Net interest income on a fully tax-equivalent basis, a non-GAAP measure, was $7.0 million for the three months ended December 31, 2018, increasing $565,000, or 8.8 percent, from $6.4 million for the comparable three-month period in fiscal 2018. The change for the three months ended December 31, 2018 primarily was the result of an increase in the average balance of loans, which increased $89.3 million. The net interest spread on an annualized tax-equivalent basis was at 2.40 percent and 2.31 percent for the three months ended December 31, 2018 and 2017, respectively. For the quarter ended December 31, 2018, the Company’s net interest margin on a tax-equivalent basis increased to 2.65 percent as compared to 2.47 percent for the same three-month period in fiscal 2018.

For the three months ended December 31, 2018, total interest income both as reported and on a fully tax-equivalent basis, a non-GAAP measure, increased $1.4 million, or 14.7 percent, to $10.9 million, compared to the three months ended December 31, 2017. Interest income rose in the quarter ended December 31, 2018, compared to the comparable period in fiscal 2017, primarily due to a $89.3 million increase in the average balance of our loans. Total interest expense increased by $836,000, or 26.7 percent, to $4.0 million, for the three months ended December 31, 2018, compared to the same period in fiscal 2018 primarily due to the increase in average rates.

The average cost of funds was 1.76 percent for the quarter ended December 31, 2018 compared to 1.37 percent for the same three-month period in fiscal 2018 and, on a linked sequential quarter basis, increased from 1.60 percent or 16 basis points compared to the fourth quarter of fiscal 2018.

 

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Earnings Summary for the Period Ended December 31, 2018

The following table presents condensed consolidated statements of income data for the periods indicated.

(dollars in thousands, except share and

per share data)

 

For the quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Net interest income

   $ 6,947      $ 7,109      $ 6,976      $ 6,568      $ 6,382  

Provision for loan losses

     1,453        125        589        240        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     5,494        6,984        6,387        6,328        6,382  

Other income

     1,146        429        715        449        1,711  

Other expense

     4,094        4,437        4,790        4,105        4,471  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax expense

     2,546        2,976        2,312        2,672        3,622  

Income tax expense

     535        334        69        654        3,219  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 2,011      $ 2,642      $ 2,243      $ 2,018      $ 403  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per common share

              

Basic

   $ 0.27      $ 0.41      $ 0.35      $ 0.31      $ 0.06  

Diluted

   $ 0.27      $ 0.41      $ 0.35      $ 0.31      $ 0.06  

Weighted average common shares outstanding:

 

  

Basic

     7,555,810        6,464,326        6,453,031        6,448,691        6,445,264  

Diluted

     7,555,969        6,467,628        6,456,048        6,452,246        6,450,513  

Other Income

Other income decreased $565,000, or 33.0 percent, during the first quarter of fiscal 2019 compared with the same period in fiscal 2018. The decrease in total other income was due to a $1.2 million decrease in the net gain on sale of real estate, a $49,000 decrease in net gains on sale of loans, partially offset by a $669,000 increase in service charges and other fees, and a $1,000 increase in rental income. The increase in service charges and other fees is primarily due to the recognition of approximately $708,000 of net swap fees through the Bank’s commercial loan hedging program. The primary benefit of the loan hedging program is to eliminate the interest rate risk on long term fixed rate loans while allowing Malvern to compete in the market and offer competitive financing to our clients.

The following table presents the components of other income for the periods indicated.

 

(in thousands, unaudited)                                   

For the quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Service charges and other fees

   $ 940      $ 230      $ 530      $ 237      $ 271  

Rental income – other

     67        72        63        67        66  

Net gains on sale of real estate

                                 1,186  

Net gains on sale of loans

     18        6        3        26        67  

Bank-owned life insurance

     121        121        119        119        121  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total other income

   $ 1,146      $ 429      $ 715      $ 449      $ 1,711  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Expense

Total other expense for the three months ended December 31, 2018, decreased $377,000, or 8.4 percent, when compared to the quarter ended December 31, 2017. The decrease was primarily due to a $289,000 decrease in professional fees, a $49,000 decrease in other operating expense, a $24,000 decrease in data processing expense, a $24,000 decrease in advertising expense, a $23,000 decrease in occupancy expense, and a $7,000 decrease in federal

 

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deposit insurance premium, partially offset by a $18,000 increase in salaries and employee benefits, and a $21,000 increase in net other real estate owned expense. The decrease in professional fees was primarily due to lower legal expense. The increase in salaries and employee benefits primarily reflects higher compensation to officers and employees to support overall franchise growth.

The following table presents the components of other expense for the periods indicated.

 

(in thousands, unaudited)                                   

For the quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Salaries and employee benefits

   $ 2,008      $ 2,178      $ 2,024      $ 2,001      $ 1,990  

Occupancy expense

     539        570        577        586        562  

Federal deposit insurance premium

     69        71        76        75        76  

Advertising

     30        30        30        38        54  

Data processing

     254        279        274        267        278  

Professional fees

     499        565        1,088        450        788  

Net other real estate owned expense

     21                              

Other operating expenses

     674        744        721        688        723  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total other expense

   $ 4,094      $ 4,437      $ 4,790      $ 4,105      $ 4,471  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income Taxes

The Company recorded $535,000 in income tax expense during the three months ended December 31, 2018 compared to $3.2 million in income tax expense during the three months ended December 31, 2017. The effective tax rates for the Company for the three months ended December 31, 2018 and 2017 were 21.0 percent and 88.9 percent, respectively. In the first quarter of fiscal 2018, the Company revised its estimated annual effective rate to reflect a change in the federal statutory rate from 34% to 21%, resulting from the Tax Cuts and Jobs Act that was enacted on December 22, 2017.

 

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Statement of Condition Highlights at December 31, 2018

Highlights as of December 31, 2018, included:

 

 

Balance sheet strength, with total assets amounting to $1.1 billion at December 31, 2018, increasing $94.5 million, or 9.1 percent, compared to September 30, 2018 coupled with stable asset quality, and capital levels that exceeded regulatory standards for a well-capitalized institution.

 

 

The Company’s gross loans were $933.4 million at December 31, 2018, increasing $22.8 million, or 2.5 percent, from September 30, 2018.

 

 

Total investments were $48.6 million at December 31, 2018, a decrease of $5.8 million, or 10.7 percent, compared to September 30, 2018.

 

 

Deposits totaled $843.2 million at December 31, 2018, an increase of $69.0 million, or 8.9 percent, compared to September 30, 2018.

 

 

Federal Home Loan Bank (FHLB) advances totaled $118.0 million at December 31, 2018 and September 30, 2018.

 

 

Subordinated debt totaled $24.5 million at December 31, 2018 and September 30, 2018.

 

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Condensed Consolidated Statements of Condition

The following table presents condensed consolidated statements of condition data as of the dates indicated.

 

Condensed Consolidated Statements of Condition (unaudited)                                   
(in thousands)                                   

At quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Cash and due from depository institutions

   $ 1,377      $ 1,563      $ 1,447      $ 1,566      $ 1,636  

Interest bearing deposits in depository institutions

     98,499        29,271        45,934        120,144        127,006  

Investment securities, available for sale, at fair value

     19,231        24,298        34,348        44,341        44,503  

Investment securities held to maturity

     29,323        30,092        31,004        33,052        33,893  

Restricted stock, at cost

     9,493        8,537        8,781        8,583        5,930  

Loans receivable, net of allowance for loan losses

     924,639        902,136        893,355        837,314        806,764  

Other real estate owned

     5,796                              

Accrued interest receivable

     3,724        3,800        3,571        3,583        3,344  

Property and equipment, net

     7,067        7,181        7,240        7,357        7,374  

Deferred income taxes, net

     3,367        3,195        3,920        3,713        3,791  

Bank-owned life insurance

     19,524        19,403        19,282        19,163        19,045  

Other assets

     6,452        4,475        4,693        4,500        3,872  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 1,128,492      $ 1,033,951      $ 1,053,575      $ 1,083,316      $ 1,057,158  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Deposits

   $ 843,200      $ 774,163      $ 787,932      $ 825,569      $ 797,099  

FHLB advances

     118,000        118,000        123,000        118,000        118,000  

Other short-term borrowings

            2,500        2,500        2,500        5,000  

Subordinated debt

     24,500        24,461        24,421        24,382        24,342  

Other liabilities

     7,113        4,004        7,749        7,503        9,521  

Shareholders’ equity

     135,679        110,823        107,973        105,362        103,196  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 1,128,492      $ 1,033,951      $ 1,053,575      $ 1,083,316      $ 1,057,158  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The following table reflects the composition of the Company’s deposits as of the dates indicated.

 

Deposits (unaudited)                                   
(in thousands)                                   

At quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Demand:

              

Non-interest bearing

   $ 39,734      $ 41,677      $ 48,296      $ 38,444      $ 45,756  

Interest-bearing

     261,025        184,073        198,410        190,602        161,278  

Savings

     44,438        44,642        44,629        44,716        41,631  

Money market

     253,436        270,834        276,807        293,813        293,674  

Time

     244,567        232,937        219,790        257,994        254,760  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total deposits

   $ 843,200      $ 774,163      $ 787,932      $ 825,569      $ 797,099  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Loans

Total net loans amounted to $924.6 million at December 31, 2018 compared to $902.1 million at September 30, 2018, for a net increase of $22.5 million or 2.5 percent for the period. The allowance for loan losses amounted to $9.2 million and $9.0 million at December 31, 2018 and September 30, 2018, respectively. Average loans during the first quarter of fiscal 2019 totaled $912.3 million as compared to $822.9 million during the first quarter of fiscal 2018, representing a 10.9 percent increase.

At the end of the first quarter of fiscal 2019, the loan portfolio remained weighted toward two primary components: commercial and the core residential portfolio, with commercial loans accounting for 69.6 percent and single-family residential real estate loans accounting for 21.7 percent of the loan portfolio. Construction and development loans amounted to 5.2 percent and consumer loans represented 3.5 percent of the loan portfolio at such date. Total gross loans increased $22.8 million, to $933.4 million at December 31, 2018 compared to $910.6 million at September 30, 2018. The increase in the loan portfolio at December 31, 2018 compared to September 30, 2018, primarily reflected an increase of $18.6 million in commercial loans, a $5.1 million increase in residential mortgage loans, a $1.6 million increase in construction and development loans partially offset by a $2.5 million reduction in consumer loans at December 31, 2018 as compared to September 30, 2018.

For the quarter ended December 31, 2018, the Company originated total new loan volume of $64.7 million, which was offset by loan payoffs of $16.8 million, prepayments totaling $13.1 million, and amortization of $12.0 million.

The following reflects the composition of the Company’s loan portfolio as of the dates indicated.

 

Loans (unaudited)

(in thousands)

At quarter ended:

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Residential mortgage

   $ 202,306     $ 197,219     $ 192,901     $ 184,318     $ 186,831  

Construction and Development:

          

Residential and commercial

     41,140       37,433       39,845       35,213       34,627  

Land

     7,180       9,221       15,565       21,727       18,599  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total construction and development

     48,320       46,654       55,410       56,940       53,226  

Commercial:

          

Commercial real estate

     508,448       493,929       477,584       445,995       427,610  

Farmland

     12,054       12,066       12,058       12,069       1,711  

Multi-family

     44,989       45,102       45,204       32,608       32,716  

Other

     84,236       80,059       82,856       75,368       71,933  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total commercial

     649,727       631,156       617,702       566,040       533,970  

Consumer:

          

Home equity lines of credit

     14,484       14,884       14,446       15,538       16,811  

Second mortgages

     16,674       18,363       19,063       19,960       21,304  

Other

     1,915       2,315       2,311       2,404       2,435  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total consumer

     33,073       35,562       35,820       37,902       40,550  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     933,426       910,591       901,833       845,200       814,577  

Deferred loan costs, net

     460       566       546       579       624  

Allowance for loan losses

     (9,247     (9,021     (9,024     (8,465     (8,437
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans Receivable, net

   $ 924,639     $ 902,136     $ 893,355     $ 837,314     $ 806,764  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At December 31, 2018, the Company had $140.8 million in overall undisbursed loan commitments, which consisted primarily of unused commercial lines of credit, home equity lines of credit and available usage from active construction facilities. The Company’s current “Approved, Accepted but Unfunded” pipeline at December 31, 2018 included approximately $81.0 million in commercial and construction loans and $3.0 million in residential mortgage loans expected to fund over the following the quarter.

 

-9-


Asset Quality

Non-accrual loans were $2.6 million at December 31, 2018 a decrease of $125,000 or 4.7 percent, as compared to $2.7 million at September 30, 2018. OREO was $5.8 million at December 31, 2018 and zero at September 30, 2018. TDR loans were $12.2 million at December 31, 2018 and $18.6 million at September 30, 2018. As previously disclosed in the Company’s Annual Report on Form 10-K filed on December 14, 2018, one TDR with an aggregate outstanding balance of approximately $7.0 million ceased to perform under modified terms and as a result the Company accepted a deed in lieu.

At December 31, 2018, $718,000 of loans past due greater than 90 days and still accruing is attributed to one residential mortgage. Malvern Bank had a promise of repayment at quarter end December 31,2018 for the beginning of January. On January 4, 2019 the Bank received three payments for the loan bringing the loan under 30 days delinquent for principal and interest due. Net of this loan, non-performing loans would have been $2.6 million or a reduction of approximately 15 percent.

At December 31, 2018, non-performing assets totaled $9.1 million, or 0.81 percent of total assets, as compared with $3.1 million, or 0.30 percent of total assets, at September 30, 2018. The increase in non-performing assets at December 31, 2018 compared to September 30, 2018 was primarily due to the transfer to OREO of one commercial real estate loan in the amount of $5.8 million. The portfolio of non-accrual loans at December 31, 2018 was comprised of fourteen residential real estate loans with an aggregate outstanding balance of approximately $1.8 million, one commercial real estate loan with an outstanding balance of $520,000, and eleven consumer loans with an aggregate outstanding balance of approximately $260,000.

The following table presents the components of non-performing assets and other asset quality data for the periods indicated.

 

(dollars in thousands, unaudited)

As of or for the quarter ended:

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Non-accrual loans(1)

   $ 2,562     $ 2,687     $ 2,023     $ 2,129     $ 2,242  

Loans 90 days or more past due and still accruing

     759       374       1,338       475       345  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans

     3,321       3,061       3,361       2,604       2,587  

Other real estate owned

     5,796       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing assets

   $ 9,117     $ 3,061     $ 3,361     $ 2,604     $ 2,587  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Performing troubled debt restructured loans

   $ 12,164     $ 18,640     $ 18,693     $ 18,666     $ 2,222  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-performing assets / total assets

     0.81     0.30     0.32     0.24     0.24

Non-performing loans / total loans

     0.36     0.34     0.37     0.31     0.32

Net charge-offs (recoveries)

   $ 1,227     $ 128     $ 30     $ 212     $ (32

Net charge-offs (recoveries) / average loans(2)

     0.54     0.06     0.01     0.10     (0.02 )% 

Allowance for loan losses / total loans

     0.99     0.99     1.00     1.00     1.04

Allowance for loan losses / non-performing loans

     278.4     294.7     268.5     325.1     326.1

Total assets

   $ 1,128,492     $ 1,033,951     $ 1,053,575     $ 1,083,316     $ 1,057,158  

Total gross loans

     933,426       910,591       901,833       845,200       814,577  

Average loans

     912,259       908,962       864,348       827,483       822,941  

Allowance for loan losses

     9,247       9,021       9,024       8,465       8,437  

 

(1)

23 loans totaling approximately $2.0 million, or 78.3% of the total non-accrual loan balance, were making payments at December 31, 2018.

(2)

Annualized.

 

-10-


The allowance for loan losses at December 31, 2018 amounted to approximately $9.2 million, or 0.99 percent of total loans, compared to $9.0 million, or 0.99 percent of total loans, at September 30, 2018. The Company had a $1.5 million provision for loan losses during the quarter ended December 31, 2018 compared to $125,000 for the quarter ended September 30, 2018. Provision expense was higher during the first quarter fiscal 2019 due primarily to the write-down of one commercial loan that was moved from TDR to OREO and continued growth in the loan portfolio during the quarter. At the same time the Company added a new qualitative factor, defined as Regulatory Oversight, to its allowance methodology to address the difference in the required allowance based on asset quality and the directionally consistent level of the allowance. Unique to the other factors, this is a single calculation figure which is subsequently applied to the loan portfolio by loan type (Commercial, Residential and Consumer) based upon the percent of each to total loans. It is derived from a review of a peer group consisting of 10 banks with similar asset size within the same general geographic area of Malvern Bank. This new factor amounted for an additional $390,000 added to the provision for the period.

Capital

At December 31, 2018, our total shareholders’ equity amounted to $135.7 million, or 12.02 percent of total assets, compared to $110.8 million at September 30, 2018. The Company’s book value per common share increased to $17.45 at December 31, 2018, compared to $16.84 at September 30, 2018. At December 31, 2018, the Bank’s common equity tier 1 ratio was 15.54 percent, tier 1 leverage ratio was 13.35 percent, tier 1 risk-based capital ratio was 15.54 percent and the total risk-based capital ratio was 16.55 percent. At September 30, 2018, the Bank’s common equity tier 1 ratio was 15.09 percent, tier 1 leverage ratio was 12.71 percent, tier 1 risk-based capital ratio was 15.09 percent and the total risk-based capital ratio was 16.13 percent. At December 31, 2018, the Bank was in compliance with all applicable regulatory capital requirements.

As previously disclosed in the Company’s Form 8-K filed on October 9, 2018, the Company closed an underwritten public offering of shares of our common stock for gross proceeds of $25.0 million and net proceeds of approximately $23.4 million (after deducting the underwriting discount and other estimated offering expenses).

Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management believes that the supplemental non-GAAP information provided in this press release is utilized by market analysts and others to evaluate a company’s financial condition and, therefore, that such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures presented by other companies.

 

-11-


The Company’s net income is presented in the table below including non-core income and expense items.

 

(in thousands)

For the quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Net income as reported under GAAP

   $ 2,011      $ 2,642      $ 2,243      $ 2,018      $ 403  

Non-core items, net of tax:

              

Tax Act related expenses(1)

     —          —          —          —          2,000  

Prior period restatement costs(2)

     —          —          667        —          —    

Audit expenses(3)

     110        —          —          —          —    

Net gains on sale of real estate(4)

     —          —          —          —          (787

Other(5)

     100        15        24        32        48  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Core net income, non-GAAP

   $ 2,221      $ 2,657      $ 2,934      $ 2,050      $ 1,664  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per common share:

              

Diluted

   $ 0.29      $ 0.41      $ 0.45      $ 0.32      $ 0.26  

Weighted average common shares outstanding:

              

Diluted

     7,555,969        6,467,628        6,456,048        6,452,246        6,450,513  

 

(1)

The Company recognized a tax expense in our tax provision for the quarter ended December 31, 2017 related to adjusting our deferred tax balance to reflect a change in the federal statutory rate from 35% to 21%, resulting from the Tax Act that was enacted on December 22, 2017. Income tax expense reported for the first three months of the Company’s prior fiscal year gave effect to the change in the tax law which resulted in an increase in income tax expense of $2.0 million during the quarter ended December 31, 2017.

(2)

Non-core items for the quarter ended June 30, 2018 consisted of additional legal and accounting fees arising out of matters pertaining to prior period restatements.

(3)

Non-core items for the quarter ended December 31, 2018 consisted of expenses arising out of the dismissal of the Company’s Certifying Accountant, as previously announced in the Company’s Form 8-K filed on July 9, 2018, which required issuance of consent on previously audited consolidated financial statements.

(4)

Sale of Exton, PA branch.

(5)

Included in non-core items such as accelerated payoff and non-accrual interest amounts.

The Company’s other income is presented in the table below excluding net gains on sale of real estate. The Company’s management believes that many investors desire to evaluate other income without regard to such gains.

 

(in thousands)

For the quarter ended:

   12/31/18      9/30/18      6/30/18      3/31/18      12/31/17  

Other income as reported under GAAP

   $ 1,146      $ 429      $ 715      $ 449      $ 1,711  

Less: Net gains on sale of real estate

     —          —          —          —          1,186  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other income, excluding net gains on sale of real estate, non-GAAP

   $ 1,146      $ 429      $ 715      $ 449      $ 525  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

-12-


“Efficiency ratio” is a non-GAAP financial measure and is defined as other expense, excluding certain non-core items, as a percentage of net interest income on a tax equivalent basis plus other income, excluding net securities gains, calculated as follows:

 

(dollars in thousands)

For the quarter ended:

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Other expense as reported under GAAP

   $ 4,094     $ 4,437     $ 4,790     $ 4,105     $ 4,471  

Less: non-core items(1)

     139       —         688       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other expense, excluding non-core items, non-GAAP

   $ 3,955     $ 4,437     $ 4,102     $ 4,105     $ 4,471  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income (tax

equivalent basis), non-GAAP

   $ 6,958     $ 7,172     $ 7,021     $ 6,597     $ 6,393  

Non-core items(2)

     127       16       25       43       72  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income (tax equivalent basis), excluding non-core items, non-GAAP

     7,085       7,188       7,046       6,640       6,465  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income, excluding net gains on sale of real estate, non-GAAP

     1,146       429       715       449       525  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 8,231     $ 7,617     $ 7,761     $ 7,089     $ 6,990  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency ratio, non-GAAP

     48.1     58.3     52.9     57.9     64.0

 

(1)

Non-core items for the quarter ended December 31, 2018 consisted of expenses arising out of the dismissal of the Company’s Certifying Accountant, as previously announced in the Company’s Form 8-K filed on July 9, 2018, which required issuance of consent on previously audited consolidated financial statements. Non-core items for the quarter ended June 30, 2018 consisted of additional legal and accounting fees arising out of matters pertaining to prior period restatements. The Company believes these adjustments are helpful to provide insight into core operating results as a means to evaluate comparative results.

(2)

Included in non-core items such as accelerated payoff and non-accrual interest amounts.

The Company’s efficiency ratio, calculated on a GAAP basis without excluding net investment securities gains and without deducting non-core items from other expense, follows:

 

For the quarter ended:

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Efficiency ratio on a GAAP basis

     50.6     58.9     62.3     58.5     55.2

Net interest margin, which is non-interest income as a percentage of average interest-earning assets, is presented on a fully tax equivalent (“TE”) basis as we believe this non-GAAP measure is the preferred industry measurement for this item. The Company revised its estimated annual effective tax rate to reflect a change in the federal statutory rate from 35% to 21%, resulting from the enactment of the Tax Cuts and Jobs Act of 2017. The TE basis adjusts GAAP interest income and yields for the tax benefit of income on certain tax-exempt investments using the blended statutory rate of 24.5% for the current period and 34% for each of the prior periods presented. Below is a reconciliation of GAAP net interest income to the TE basis and the related GAAP basis and TE net interest margins for the periods presented.

 

(dollars in thousands)

For the quarter ended:

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Net interest income (GAAP)

   $ 6,947     $ 7,109     $ 6,976     $ 6,568     $ 6,382  

Tax-equivalent adjustment(1)

     11       63       45       29       11  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TE net interest income, non-GAAP

   $ 6,958     $ 7,172     $ 7,021     $ 6,597     $ 6,393  

Net interest income margin (GAAP)

     2.65     2.82     2.73     2.57     2.46
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tax-equivalent effect

     —         0.03       0.02       0.01       0.01  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest margin (TE), non-GAAP

     2.65     2.85     2.75     2.58     2.47
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Reflects tax-equivalent adjustment for tax exempt loans and investments.

 

-13-


The following table sets forth the Company’s consolidated average statements of condition for the periods presented.

Condensed Consolidated Average Statements of Condition (unaudited)

 

(in thousands)

For the quarter ended:

   12/31/18     9/30/18     6/30/18     3/31/18     12/31/17  

Investment securities

   $ 53,882     $ 64,848     $ 75,932     $ 77,961     $ 59,453  

Loans

     912,259       908,962       864,348       827,483       822,941  

Allowance for loan losses

     (8,638     (9,077     (8,589     (8,426     (8,419

All other assets

     123,643       72,535       120,730       157,126       194,017  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     1,081,146       1,037,268       1,052,421       1,054,144       1,067,992  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest bearing deposits

   $ 40,420     $ 43,330     $ 45,124     $ 40,034     $ 42,760  

Interest-bearing deposits

     758,813       732,489       746,341       754,820       766,105  

FHLB advances

     116,859       118,326       118,121       118,000       118,000  

Other short-term borrowings

     761       2,522       2,555       4,945       5,000  

Subordinated debt

     24,483       24,440       24,399       24,360       24,322  

Other liabilities

     5,750       6,457       9,072       7,283       8,086  

Shareholders’ equity

     134,060       109,704       106,809       104,702       103,719  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,081,146     $ 1,037,268     $ 1,052,421     $ 1,054,144     $ 1,067,992  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

-14-


About Malvern Bancorp, Inc.

Malvern Bancorp, Inc. is the holding company for Malvern Bank, National Association, a national bank that was originally organized in 1887 as a federally-chartered savings bank. Malvern Bank, National Association now serves as one of the oldest banks headquartered on the Philadelphia Main Line. For more than a century, Malvern Bank has been committed to helping people build prosperous communities as a trusted financial partner, forging lasting relationships through teamwork, respect and integrity.

Malvern Bank conducts business from its headquarters in Paoli, Pennsylvania, a suburb of Philadelphia and through its nine other banking locations in Chester, Delaware and Bucks counties, Pennsylvania, Palm Beach, Florida, and Morristown, New Jersey, its New Jersey regional headquarters. The Bank also operates a representative office in Montchanin, Delaware and recently announced a new Private Banking Office in West Chester Pennsylvania. Its primary market niche is providing personalized service to its client base.

Malvern Bank, through its Private Banking division and strategic partnership with Bell Rock Capital in Rehoboth Beach, Delaware, provides personalized wealth management and advisory services to high net worth individuals and families. These services include banking, liquidity management, investment services, 401(k) accounts and planning, custody, tailored lending, wealth planning, trust and fiduciary services, family wealth advisory services and philanthropic advisory services. The Bank offers insurance services though Malvern Insurance Associates, LLC, which provides clients a rich array of financial services, including commercial and personal insurance and commercial and personal lending.

For further information regarding Malvern Bancorp, Inc., please visit our web site at http://ir.malvernbancorp.com. For information regarding Malvern Bank, National Association, please visit our web site at http://www.mymalvernbank.com.

Forward-Looking Statements

This press release contains certain forward looking statements including the statements regarding the speed of disposing of REO property, growth in the Company’s loan pipeline and the rapidity of deploying deposits into loans. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of Malvern Bancorp, Inc., changes in the securities markets and other risk factors disclosed by the Company in its filings with the Securities and Exchange Commission. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in beliefs, expectations or events.

 

-15-


MALVERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION

 

(in thousands, except for share and per share data)

(unaudited)

   December 31,
2018
    September 30,
2018
 

ASSETS

    

Cash and due from depository institutions

   $ 1,377     $ 1,563  

Interest bearing deposits in depository institutions

     98,499       29,271  
  

 

 

   

 

 

 

Total cash and cash equivalents

     99,876       30,834  

Investment securities available for sale, at fair value (amortized cost of $19,768 and $24,804 at December 31, 2018 and September 30, 2018, respectively)

     19,231       24,298  

Investment securities held to maturity (fair value of $28,532 and $28,968 at December 31, 2018 and September 30, 2018, respectively)

     29,323       30,092  

Restricted stock, at cost

     9,493       8,537  

Loans receivable, net of allowance for loan losses

     924,639       902,136  

Other real estate owned

     5,796       —    

Accrued interest receivable

     3,724       3,800  

Property and equipment, net

     7,067       7,181  

Deferred income taxes, net

     3,367       3,195  

Bank-owned life insurance

     19,524       19,403  

Other assets

     6,452       4,475  
  

 

 

   

 

 

 

Total assets

   $ 1,128,492     $ 1,033,951  
  

 

 

   

 

 

 

LIABILITIES

    

Deposits:

    

Non-interest bearing

   $ 39,734     $ 41,677  

Interest-bearing

     803,466       732,486  
  

 

 

   

 

 

 

Total deposits

     843,200       774,163  

FHLB advances

     118,000       118,000  

Other short-term borrowings

     —         2,500  

Subordinated debt

     24,500       24,461  

Advances from borrowers for taxes and insurance

     2,142       1,305  

Accrued interest payable

     1,251       784  

Other liabilities

     3,720       1,915  
  

 

 

   

 

 

 

Total liabilities

     992,813       923,128  

SHAREHOLDERS’ EQUITY

    

Preferred stock, $0.01 par value, 10,000,000 shares, authorized, none issued

     —         —    

Common stock, $0.01 par value, 50,000,000 shares authorized, issued and outstanding: 7,774,594 shares at December 31, 2018 and 6,580,879 shares at September 30, 2018

     66       66  

Additional paid in capital

     84,493       61,099  

Retained earnings

     52,423       50,412  

Unearned Employee Stock Ownership Plan (ESOP) shares

     (1,302     (1,338

Accumulated other comprehensive (loss) income

     (1     584  
  

 

 

   

 

 

 

Total shareholders’ equity

     135,679       110,823  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,128,492     $ 1,033,951  
  

 

 

   

 

 

 

 

-16-


MALVERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

 

     Three Months Ended
December 31,
 

(in thousands, except for share and per share data)

(unaudited)

   2018      2017  

Interest and Dividend Income

     

Loans, including fees

   $ 10,095      $ 8,701  

Investment securities, taxable

     251        230  

Investment securities, tax-exempt

     61        65  

Dividends, restricted stock

     133        69  

Interest-bearing cash accounts

     372        446  
  

 

 

    

 

 

 

Total Interest and Dividend Income

     10,912        9,511  
  

 

 

    

 

 

 

Interest Expense

     

Deposits

     2,944        2,155  

Short-term borrowings

     5        19  

Long-term borrowings

     633        563  

Subordinated debt

     383        392  
  

 

 

    

 

 

 

Total Interest Expense

     3,965        3,129  
  

 

 

    

 

 

 

Net interest income

     6,947        6,382  

Provision for Loan Losses

     1,453        —    
  

 

 

    

 

 

 

Net Interest Income after Provision for

Loan Losses

     5,494        6,382  
  

 

 

    

 

 

 

Other Income

     

Service charges and other fees

     940        271  

Rental income-other

     67        66  

Net gains on sale of real estate

     —          1,186  

Net gains on sale of loans, net

     18        67  

Earnings on bank—owned life insurance

     121        121  
  

 

 

    

 

 

 

Total Other Income

     1,146        1,711  
  

 

 

    

 

 

 

Other Expense

     

Salaries and employee benefits

     2,008        1,990  

Occupancy expense

     539        562  

Federal deposit insurance premium

     69        76  

Advertising

     30        54  

Data processing

     254        278  

Professional fees

     499        788  

Net other real estate owned expense

     21        —    

Other operating expenses

     674        723  
  

 

 

    

 

 

 

Total Other Expense

     4,094        4,471  
  

 

 

    

 

 

 

Income before income tax expense

     2,546        3,622  

Income tax expense

     535        3,219  
  

 

 

    

 

 

 

Net Income

   $ 2,011      $ 403  
  

 

 

    

 

 

 

Earnings per common share

     

Basic

   $ 0.27      $ 0.06  

Diluted

   $ 0.27      $ 0.06  

Weighted Average Common Shares Outstanding

     

Basic

     7,555,810        6,445,264  

Diluted

     7,555,969        6,450,513  

 

-17-


MALVERN BANCORP, INC AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

 

     Three Months Ended  

(in thousands, except for ratios, non-financial data and share and per

share data) (annualized where applicable) (unaudited)

   12/31/2018     9/30/2018     12/31/2017  

Statements of Operations Data

      

Interest income

   $ 10,912     $ 10,617     $ 9,511  

Interest expense

     3,965       3,508       3,129  
  

 

 

   

 

 

   

 

 

 

Net interest income

     6,947       7,109       6,382  

Provision for loan losses

     1,453       125       —    
  

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     5,494       6,984       6,382  

Other income

     1,146       429       1,711  

Other expense

     4,094       4,437       4,471  
  

 

 

   

 

 

   

 

 

 

Income before income tax expense

     2,546       2,976       3,622  

Income tax expense

     535       334       3,219  
  

 

 

   

 

 

   

 

 

 

Net income

   $ 2,011     $ 2,642     $ 403  

Earnings (per Common Share)

      

Basic

   $ 0.27     $ 0.41     $ 0.06  

Diluted

   $ 0.27     $ 0.41     $ 0.06  

Statements of Condition Data (Period-End)

      

Investment securities available for sale, at fair value

   $ 19,231     $ 24,298     $ 44,503  

Investment securities held to maturity (fair value of $28,532, $28,968 and $33,291)

     29,323       30,092       33,893  

Loans, net of allowance for loan losses

     924,639       902,136       806,764  

Total assets

     1,128,492       1,033,951       1,057,836  

Deposits

     843,200       774,163       797,099  

FHLB advances

     118,000       118,000       118,000  

Short-term borrowings

     —         2,500       5,000  

Subordinated debt

     24,500       24,461       24,342  

Shareholders’ equity

     135,679       110,823       103,196  

Common Shares Dividend Data

      

Cash dividends

   $ —       $ —       $ —    

Weighted Average Common Shares Outstanding

      

Basic

     7,555,810       6,464,326       6,445,264  

Diluted

     7,555,969       6,467,628       6,450,513  

Operating Ratios

      

Return on average assets

     0.74     1.02     0.15

Return on average equity

     6.00     9.63     1.55

Average equity / average assets

     12.40     10.58     9.71

Book value per common share (period-end)

   $ 17.45     $ 16.84     $ 15.70  

Non-Financial Information (Period-End)

      

Common shareholders of record

     402       405       422  

Full-time equivalent staff

     87       85       85  

 

-18-

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