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Section 1: 8-K (8-K)

bayk-8k_20190430.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): April 30, 2019

 

BAY BANKS OF VIRGINIA, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

Virginia

 

0-22955

 

54-1838100

(State or Other Jurisdiction

 

(Commission File Number)

 

(IRS Employer

of Incorporation)

 

 

 

Identification No.)

 

1801 Bayberry Court, Suite 101, Richmond, VA 23226

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (844) 404-9668

N/A

(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 or Rule 12b-2 of the Securities Exchange Act of 1934.

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 2.02Results of Operations and Financial Condition.

On April 30, 2019, Bay Banks of Virginia, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2019.

A copy of the Company’s press release is attached and furnished herewith as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

 

 

Exhibit No.

 

Description

 

 

 

 

 

99.1

 

Press release, dated April 30, 2019 announcing the Company’s financial results for the quarter ended March 31, 2019.


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.

 

 

 

BAY BANKS OF VIRGINIA, INC.

 

 

 

 

 

 

 

 

 

By:

  /s/ Judy C. Gavant

 

 

Judy C. Gavant

 

Executive Vice President and Chief Financial Officer

 

April 30, 2019

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

bayk-ex991_6.htm

Exhibit 99.1

Bay Banks of Virginia, Inc. Reports First Quarter 2019 Results

Improved Performance

RICHMOND, VA, April 30, 2019 /PRNewswire/ -- Bay Banks of Virginia, Inc. (OTCQB: BAYK), holding company of Virginia Commonwealth Bank and VCB Financial Group, Inc., announced financial results for the first quarter ended March 31, 2019.

The company reported net income of $1.5 million, or $0.11 per diluted share, for the first quarter of 2019 compared to $782 thousand, or $0.06 per diluted share, for the fourth quarter of 2018 and $1.1 million, or $0.09 per diluted share, for the first quarter of 2018. Net income for the fourth quarter of 2018 included $483 thousand ($382 thousand1 after income tax) of expenses incurred in connection with the company’s previously announced early retirement program. Net income in the first quarter of 2018 included $363 thousand ($287 thousand1 after income tax) of merger-related expenses in connection with the company’s merger with Virginia BanCorp, Inc. on April 1, 2017 (the “Merger”). Costs associated with the succession of the company's CFO and costs related to fees incurred relating to the completion of the company's 2017 year-end financial reporting in the first quarter of 2018 totaled approximately $1.0 million.

Randal R. Greene, President and Chief Executive Officer, commented: “I am pleased to report improved first quarter 2019 results, which reflect the strongest quarterly earnings reported since the Merger. Our results reflect an intentional slowing of loan growth as we exercise a disciplined approach of investing our liquidity in higher yielding loans. Growing deposits, particularly noninterest-bearing accounts, continues to be challenging in a fiercely competitive environment and our deposit costs continue to increase due to both this competition and the natural repricing of our maturing time deposits. In the first quarter of 2019, higher loan yields contributed to some stability in our net interest margin, when excluding accretion of loan discounts. Also, in the first quarter of 2019, we completed the closure of our Hopewell, Virginia branch, as planned.”

Operating Results

First Quarter 2019 compared to Fourth Quarter 2018

 

Income before income taxes for the first quarter of 2019 was $1.8 million compared to $670 thousand for the fourth quarter of 2018. Income before income taxes, excluding the costs incurred to implement the company’s early retirement program, was $1.2 million1 for the fourth quarter of 2018.

 

Interest income for the three months ended March 31, 2019 was $12.3 million, on average interest-earning assets of $1.0 billion, compared to $11.7 million on average interest-earning assets of $989.3 million for the three months ended December 31, 2018. Interest income in the first quarter of 2019 included accretion of acquired loan discounts of $439 thousand, while interest income in the fourth quarter of 2018 included $352 thousand of accretion of acquired loan discounts. Yields on average interest-earning assets were 4.90% and 4.72% for the linked quarter periods.

 

Interest expense was $3.7 million and $3.3 million for the three months ended March 31, 2019 and December 31, 2018, respectively, and cost of funds was 1.54% and 1.40% for the linked quarter periods. Average interest-bearing liabilities were $853.6 million and $817.3 million for the first and fourth quarters of 2019 and 2018, respectively. Higher funding costs in the first quarter of 2019 was primarily due to competition for deposits in the company's markets, higher interest rates in general, and the repricing of maturing time deposits.

 

Net interest margin (“NIM”) was 3.45% for the first quarter of 2019 compared to 3.41% for the fourth quarter of 2018. NIM excluding accretion of acquired loan discounts and amortization of fair value marks on acquired time deposits (“Core NIM”) for the first quarter of 2019 was 3.26%1 compared to 3.25%1 for the fourth quarter of 2018.

 

Provision for loan losses was $314 thousand in the first quarter of 2019, while provision for loan losses in the fourth quarter of 2018 was $870 thousand. Provision for loan losses in both periods was primarily attributable to loan growth of $16.5 million and $48.0 million for the first quarter of 2019 and the fourth quarter of 2018, respectively.

 

Noninterest income for the three months ended March 31, 2019 and December 31, 2018 was $1.1 million and $1.0 million, respectively. Wealth management and secondary market sales and servicing income were higher in the fourth quarter of


 

2018 compared to the first quarter of 2019 by $78 thousand and $60 thousand, respectively, offset by a $138 thousand loss in the fourth quarter of 2018 on rabbi trust assets associated with the company’s deferred compensation plan.

 

Noninterest expenses for the three months ended March 31, 2019 and December 31, 2018 were $7.6 million and $7.9 million, respectively. Noninterest expenses for the fourth quarter of 2018 included $483 thousand incurred to implement the company’s early retirement program. Additionally, fourth quarter of 2018 noninterest expenses included the reversal of approximately $300 thousand of costs related to certain management incentives, as the basis for these were not met. The company’s efficiency ratio for the three months ended March 31, 2019 was 78.1% compared to 83.7% (78.6%1 excluding expenses incurred to implement the early retirement program) for the three months ended December 31, 2018.

 

Income tax expense in the first quarter of 2019 was $337 thousand, reflective of an 18.4% effective income tax rate, while income tax expense for the fourth quarter of 2018 was a benefit of $112 thousand. The income tax benefit was primarily attributable to higher than estimated tax deductions reported in the company’s 2017 federal income tax return at the higher 2017 corporate tax rate and a lower effective income tax rate for the full year of 2018 than was recorded for the 2018 period through the third quarter of 2018.

 

First Quarter 2019 compared to First Quarter 2018

 

Income before income taxes for the first quarter of 2019 was $1.8 million compared to $1.4 million for the first quarter of 2018.

 

Interest income for the three months ended March 31, 2019 was $12.3 million, on average interest-earning assets of $1.0 billion, compared to $10.7 million on average interest-earning assets of $905.0 million for the three months ended March 31, 2018. Interest income in the first quarter of 2019 included accretion of acquired loan discounts of $439 thousand, while interest income in the first quarter of 2018 included $503 thousand of accretion of acquired loan discounts and approximately $330 thousand of additional fee income and other adjustments, a portion of which was reversed in the second quarter of 2018. Yields on average interest-earning assets were 4.90% and 4.74% for the first quarters of 2019 and 2018, respectively.

 

Interest expense was $3.7 million and $2.0 million for the three months ended March 31, 2019 and 2018, respectively, and the cost of funds was 1.54% and 0.95% for the quarter-over-quarter periods. Higher funding costs in the 2019 period was primarily due to higher cost of deposits, as noted above, and greater use of FHLB borrowings. Average interest-bearing liabilities were $853.6 million and $747.8 million for the first quarters of 2019 and 2018, respectively.

 

NIM was 3.45% for the first quarter of 2019 compared to 3.83% for the first quarter of 2018. Core NIM for the first quarter of 2019 was 3.26%1 compared to 3.58%1 for the same quarter of 2018. The decline in Core NIM was primarily attributable to higher cost of funds (59 basis points), partially offset by higher yields on interest-earning assets (16 basis points). The effect of the interest income adjustments, noted above, on NIM in the first quarter of 2018 was approximately 14 basis points.

 

Provision for loan losses was $314 thousand for the first quarter of 2019, while provision for loan losses in the first quarter of 2018 was $320 thousand.

 

Noninterest income for the first quarters of 2019 and 2018 was $1.1 million and $1.2 million, respectively. Contributing to higher noninterest income in the 2018 period was a gain on the curtailment of the company’s post-retirement benefit plan of $352 thousand. Partially offsetting this gain in the first quarter of 2018 was higher service charges and fees on deposit accounts and interchange fee income, net, in the first quarter of 2019 of $103 thousand and $109 thousand, respectively.

 

Noninterest expenses for the first quarters of 2019 and 2018 were $7.6 million and $8.1 million, respectively. Noninterest expenses in the first quarter of 2018 included $363 thousand of merger-related expenses, while there were no merger-related expenses in the first quarter of 2019. Costs associated with the succession of the company's CFO and costs related to fees incurred in the first quarter of 2018 in the completion of the company's 2017 year-end financial reporting totaled approximately $1.0 million. First quarter of 2019 noninterest expenses compared to the same period of 2018, excluding these items, were higher due to the company’s expansion into the Virginia Beach market, expansion of VCB Financial Group in the Richmond, Virginia market, and costs for general infrastructure to support the company’s growing operations. Additionally, the first quarter of 2018 included a net gain on the sale of other real estate owned of $141 thousand compared to a $6 thousand gain in the first quarter of 2019. The company’s efficiency ratio for the first quarter of 2019 was 78.1% compared to 82.7% for the same quarter of 2018 (79.0%1 excluding merger-related expenses).

 

Income tax expense in the first quarter of 2019 and 2018 was $337 thousand and $250 thousand, respectively, reflective of an 18.4% and 18.2% effective income tax rate, respectively.

 

Balance Sheet

 

Loans, net of allowance for loan losses, were $910.8 million at March 31, 2019 compared to $894.2 million at December 31, 2018, an annualized growth rate of over 7%. Excluding the pay-down of approximately $16.4 million in the first quarter of 2019 of purchased portfolio loans, including those acquired in the Merger, loan growth, annualized, was approximately 14.5% for the first quarter ended March 31, 2019.


 

Total assets were $1.1 billion at March 31, 2019 and at December 31, 2018.

 

Deposits were $856.7 million at March 31, 2019 compared to $842.2 million at December 31, 2018. Noninterest-bearing accounts comprised 13.1% of total deposits at March 31, 2019, down slightly from 13.6% at December 31, 2018.

 

Shareholders' equity was $119.9 million and $117.5 million at March 31, 2019 and December 31, 2018, respectively, an increase of $2.5 million. The increase in shareholders’ equity in the first quarter of 2019 was primarily attributable to net income of $1.5 million and $806 thousand of unrealized gains on the company’s available-for-sale securities portfolio due to declining long-term interest rates. Tangible book value, calculated as shareholders' equity less goodwill and core deposit intangible assets, net of the associated deferred tax liability, divided by common shares outstanding, was $8.111 and $7.981 at March 31, 2019 and December 31, 2018, respectively. Capital ratios for Virginia Commonwealth Bank were above regulatory minimum guidelines for well-capitalized banks as of March 31, 2019 and December 31, 2018.

 

Annualized return on average assets for the quarters ended March 31, 2019, December 31, 2018, and March 31, 2018 was 0.55%, 0.30%, and 0.46%, respectively, while annualized return on average equity for the same periods was 5.05%, 2.69%, and 3.92%, respectively. Annualized operating return on average assets, which excludes expenses incurred implementing the early retirement program and merger-related expenses, for the quarters ended March 31, 2019, December 31, 2018, and March 31, 2018 was 0.55%1, 0.44%1, and 0.57%1, respectively.

Asset Quality

 

Nonperforming assets were $9.1 million, or 0.82% of total assets, as of March 31, 2019, compared to $8.8 million, or 0.81% of total assets, as of December 31, 2018, and $9.5 million, or 0.95% of total assets, as of March 31, 2018.

 

The ratio of allowance for loan losses to total gross loans was 0.86%, 0.88%, and 1.00% at March 31, 2019, December 31, 2018, and March 31, 2018, respectively. The company's allowance for loan losses does not include discounts recorded on acquired loans. The ratio of allowance for loan losses plus remaining discounts on acquired loans to total gross loans (adding the remaining discounts on acquired loans) was 1.23%1, 1.31%1, and 1.65%1, as of the same three period ends, respectively.

Outlook

Greene concluded: “As noted, we expect to slow 2019 loan growth when compared to 2018 to preserve liquidity for higher yielding loans. In particular, we will place a greater emphasis on residential loan originations that can be sold in the secondary market. Secondary market sales are an important source of fee income and allow us to avoid higher incremental funding costs. We’ve also restructured our residential lending group to align with this shift. We are addressing deposit growth on a number of fronts; we have dedicated deposit managers and have in place 2019 incentive plans for our lenders that are heavily weighted on noninterest-bearing account generation.

“Additionally, we continue to evaluate the transaction activity in our branches. To align staffing with the needs of our customers, we recently moved to staffing certain of our branches with part-time personnel. We believe this model will allow us to operate more efficiently, while continuing to provide our customers with the quality service they expect. The changes in our retail staffing and residential lending group should result in annualized savings of approximately $400,000, which we expect to begin to realize in the second quarter of 2019.”

About Bay Banks of Virginia, Inc.

Bay Banks of Virginia, Inc. is the bank holding company for Virginia Commonwealth Bank and VCB Financial Group, Inc. Founded in the 1930s, Virginia Commonwealth Bank is headquartered in Richmond, Virginia. With 19 banking offices, including one production office, located throughout the greater Richmond area, the Northern Neck region, Middlesex County, the Tri-Cities area of Petersburg, Hopewell and Colonial Heights, Suffolk, and Virginia Beach, the bank serves businesses, professionals, and consumers with a wide variety of financial services, including retail and commercial banking, and mortgage banking. VCB Financial Group provides management services for personal and corporate trusts, including estate planning, estate settlement and trust administration, and investment and wealth management services.

Caution About Forward-Looking Statements

This press release contains statements concerning the company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements may constitute "forward-looking statements" as defined by federal securities laws. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the company include, but are not limited to: changes in interest rates and general economic conditions; the legislative/regulatory climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and Federal Reserve Board; the quality or composition of the loan or investment portfolios; demand for loan products; deposit flows; competition; demand for financial services in the company's market area; acquisitions and dispositions; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; and tax and accounting rules, principles, policies and guidelines. These risks and uncertainties should be


considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

For further information, contact Randal R. Greene, President and Chief Executive Officer, at 844-404-9668 or Judy C. Gavant, Executive Vice President and Chief Financial Officer, at 804-518-2606 or inquiries@baybanks.com.

1 See discussion of non-GAAP financial measures at the end of the Supplemental Financial Data tables that follow.


BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31, 2019

 

 

December 31, 2018 (1)

 

(Dollars in thousands, except share data)

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

7,404

 

 

$

7,685

 

Interest-earning deposits

 

 

23,091

 

 

 

18,891

 

Certificates of deposit

 

 

3,746

 

 

 

3,746

 

Federal funds sold

 

 

182

 

 

 

625

 

Available-for-sale securities, at fair value

 

 

82,030

 

 

 

82,232

 

Restricted securities

 

 

7,804

 

 

 

7,600

 

Loans receivable, net of allowance for loan losses of $7,858 and

   $7,902, respectively

 

 

910,762

 

 

 

894,191

 

Loans held for sale

 

 

 

 

 

368

 

Premises and equipment, net

 

 

21,822

 

 

 

18,169

 

Accrued interest receivable

 

 

3,274

 

 

 

3,172

 

Other real estate owned, net

 

 

3,718

 

 

 

3,597

 

Bank owned life insurance

 

 

19,390

 

 

 

19,270

 

Goodwill

 

 

10,374

 

 

 

10,374

 

Mortgage servicing rights

 

 

923

 

 

 

977

 

Core deposit intangible

 

 

2,013

 

 

 

2,193

 

Deferred tax asset, net

 

 

1,295

 

 

 

1,510

 

Other assets

 

 

6,012

 

 

 

5,927

 

Total assets

 

$

1,103,840

 

 

$

1,080,617

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

112,315

 

 

$

114,122

 

Savings and interest-bearing demand deposits

 

 

371,587

 

 

 

359,400

 

Time deposits

 

 

372,751

 

 

 

368,670

 

Total deposits

 

 

856,653

 

 

 

842,192

 

 

 

 

 

 

 

 

 

 

Securities sold under repurchase agreements

 

 

7,220

 

 

 

6,089

 

Federal Home Loan Bank advances

 

 

100,000

 

 

 

100,000

 

Subordinated notes, net of unamortized issuance costs

 

 

6,897

 

 

 

6,893

 

Other liabilities

 

 

13,133

 

 

 

7,967

 

Total liabilities

 

 

983,903

 

 

 

963,141

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock ($5 par value; authorized - 30,000,000 shares;

   outstanding - 13,313,537 and 13,201,682 shares, respectively) (2)

 

 

66,568

 

 

 

66,008

 

Additional paid-in capital

 

 

36,493

 

 

 

36,972

 

Unearned employee stock ownership plan shares

 

 

(1,697

)

 

 

(1,734

)

Retained earnings

 

 

19,094

 

 

 

17,557

 

Accumulated other comprehensive loss, net

 

 

(521

)

 

 

(1,327

)

Total shareholders' equity

 

 

119,937

 

 

 

117,476

 

Total liabilities and shareholders' equity

 

$

1,103,840

 

 

$

1,080,617

 

 

(1) Derived from audited December 31, 2018 Consolidated Financial Statements.

(2) Preferred stock is authorized; however, none was outstanding as of March 31, 2019 and December 31, 2018.


BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

For the Three Months Ended

 

(Dollars in thousands, except per share data)

 

March 31, 2019

 

 

December 31, 2018

 

 

March 31, 2018

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

11,461

 

 

$

10,899

 

 

$

9,984

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

595

 

 

 

569

 

 

 

397

 

Tax-exempt

 

 

118

 

 

 

119

 

 

 

120

 

Federal funds sold

 

 

56

 

 

 

62

 

 

 

74

 

Interest-bearing deposit accounts

 

 

86

 

 

 

69

 

 

 

98

 

Certificates of deposit

 

 

20

 

 

 

17

 

 

 

19

 

Total interest income

 

 

12,336

 

 

 

11,735

 

 

 

10,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,809

 

 

 

2,565

 

 

 

1,604

 

Securities sold under repurchase agreements

 

 

3

 

 

 

3

 

 

 

3

 

Subordinated notes and other borrowings

 

 

137

 

 

 

128

 

 

 

128

 

Federal Home Loan Bank advances

 

 

704

 

 

 

568

 

 

 

313

 

Total interest expense

 

 

3,653

 

 

 

3,264

 

 

 

2,048

 

Net interest income

 

 

8,683

 

 

 

8,471

 

 

 

8,644

 

Provision for loan losses

 

 

314

 

 

 

870

 

 

 

320

 

Net interest income after provision for loan losses

 

 

8,369

 

 

 

7,601

 

 

 

8,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Income from fiduciary activities

 

 

214

 

 

 

114

 

 

 

247

 

Service charges and fees on deposit accounts

 

 

238

 

 

 

261

 

 

 

135

 

Wealth management

 

 

206

 

 

 

284

 

 

 

132

 

Interchange fees, net

 

 

101

 

 

 

118

 

 

 

(8

)

Other service charges and fees

 

 

29

 

 

 

25

 

 

 

30

 

Secondary market sales and servicing

 

 

71

 

 

 

131

 

 

 

133

 

Increase in cash surrender value of bank owned life insurance

 

 

120

 

 

 

123

 

 

 

127

 

Net (loss) gain on disposition of other assets

 

 

(1

)

 

 

11

 

 

 

(69

)

Gain (loss) on rabbi trust assets

 

 

90

 

 

 

(138

)

 

 

(52

)

Gain on curtailment of post-retirement benefit plan

 

 

 

 

 

 

 

 

352

 

Other

 

 

22

 

 

 

75

 

 

 

143

 

Total noninterest income

 

 

1,090

 

 

 

1,004

 

 

 

1,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

4,001

 

 

 

3,826

 

 

 

4,106

 

Occupancy

 

 

868

 

 

 

1,015

 

 

 

785

 

Data processing

 

 

588

 

 

 

581

 

 

 

472

 

Bank franchise tax

 

 

216

 

 

 

195

 

 

 

176

 

Telecommunications and other technology

 

 

207

 

 

 

212

 

 

 

195

 

FDIC assessments

 

 

216

 

 

 

198

 

 

 

183

 

Foreclosed property

 

 

43

 

 

 

66

 

 

 

12

 

Consulting

 

 

115

 

 

 

133

 

 

 

382

 

Advertising and marketing

 

 

67

 

 

 

92

 

 

 

68

 

Directors' fees

 

 

164

 

 

 

179

 

 

 

168

 

Audit and accounting

 

 

204

 

 

 

290

 

 

 

363

 

Legal

 

 

83

 

 

 

120

 

 

 

133

 

Merger-related

 

 

 

 

 

 

 

 

363

 

Core deposit intangible amortization

 

 

180

 

 

 

188

 

 

 

211

 

Net other real estate owned (gains) losses

 

 

(6

)

 

 

62

 

 

 

(141

)

Other

 

 

684

 

 

 

778

 

 

 

644

 

Total noninterest expense

 

 

7,630

 

 

 

7,935

 

 

 

8,120

 

Income before income taxes

 

 

1,829

 

 

 

670

 

 

 

1,374

 

Income tax expense (benefit)

 

 

337

 

 

 

(112

)

 

 

250

 

Net income

 

$

1,492

 

 

$

782

 

 

$

1,124

 

Basic and diluted earnings per share

 

$

0.11

 

 

$

0.06

 

 

$

0.09

 


BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

 

 

As of and for the Three Months Ended

 

 

As of and for the Year Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

(Dollars in thousands, except per share amounts)

 

2019

 

 

2018

 

 

2018

 

 

2018

 

 

2018

 

 

2018

 

Select Consolidated Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,103,840

 

 

$

1,080,617

 

 

$

1,027,440

 

 

$

983,216

 

 

$

994,676

 

 

 

 

 

Cash, interest-bearing deposits and federal funds sold

 

 

30,677

 

 

 

28,061

 

 

 

22,713

 

 

 

38,526

 

 

 

63,696

 

 

 

 

 

Available-for-sale securities, at fair value

 

 

82,030

 

 

 

82,232

 

 

 

81,215

 

 

 

74,322

 

 

 

75,434

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans on real estate

 

 

725,494

 

 

 

713,997

 

 

 

682,321

 

 

 

644,202

 

 

 

624,424

 

 

 

 

 

Commercial and industrial

 

 

173,360

 

 

 

164,608

 

 

 

144,118

 

 

 

124,563

 

 

 

129,225

 

 

 

 

 

Consumer

 

 

20,095

 

 

 

23,740

 

 

 

27,920

 

 

 

32,767

 

 

 

37,011

 

 

 

 

 

Loans receivable

 

 

918,949

 

 

 

902,345

 

 

 

854,359

 

 

 

801,532

 

 

 

790,660

 

 

 

 

 

Unamortized net deferred loan (fees) costs

 

 

(329

)

 

 

(252

)

 

 

(79

)

 

 

24

 

 

 

228

 

 

 

 

 

Allowance for loan losses (ALL)

 

 

(7,858

)

 

 

(7,902

)

 

 

(7,287

)

 

 

(7,113

)

 

 

(7,923

)

 

 

 

 

Net loans

 

 

910,762

 

 

 

894,191

 

 

 

846,993

 

 

 

794,443

 

 

 

782,965

 

 

 

 

 

Loans held for sale

 

 

 

 

 

368

 

 

 

 

 

 

669

 

 

 

414

 

 

 

 

 

Other real estate owned, net

 

 

3,718

 

 

 

3,597

 

 

 

3,663

 

 

 

3,501

 

 

 

2,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

983,903

 

 

$

963,141

 

 

$

910,893

 

 

$

867,492

 

 

$

879,757

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

112,315

 

 

 

114,122

 

 

 

108,602

 

 

 

108,943

 

 

 

124,572

 

 

 

 

 

Savings and interest-bearing demand deposits

 

 

371,587

 

 

 

359,400

 

 

 

330,690

 

 

 

296,206

 

 

 

299,216

 

 

 

 

 

Time deposits

 

 

372,751

 

 

 

368,670

 

 

 

369,836

 

 

 

369,917

 

 

 

373,163

 

 

 

 

 

Total deposits

 

 

856,653

 

 

 

842,192

 

 

 

809,128

 

 

 

775,066

 

 

 

796,951

 

 

 

 

 

Securities sold under repurchase agreements

 

 

7,220

 

 

 

6,089

 

 

 

6,083

 

 

 

7,008

 

 

 

6,551

 

 

 

 

 

Federal Home Loan Bank advances

 

 

100,000

 

 

 

100,000

 

 

 

80,000

 

 

 

70,000

 

 

 

60,000

 

 

 

 

 

Subordinated notes, net of unamortized issuance costs

 

 

6,897

 

 

 

6,893

 

 

 

6,889

 

 

 

6,885

 

 

 

6,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

119,937

 

 

 

117,476

 

 

 

116,547

 

 

 

115,724

 

 

 

114,919

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

12,336

 

 

$

11,735

 

 

$

10,870

 

 

$

10,508

 

 

$

10,692

 

 

$

43,803

 

Interest expense

 

 

3,653

 

 

 

3,264

 

 

 

2,599

 

 

 

2,314

 

 

 

2,048

 

 

 

10,225

 

Net interest income

 

 

8,683

 

 

 

8,471

 

 

 

8,271

 

 

 

8,194

 

 

 

8,644

 

 

 

33,578

 

Provision for (recovery of) loan losses

 

 

314

 

 

 

870

 

 

 

509

 

 

 

(348

)

 

 

320

 

 

 

1,351

 

Noninterest income

 

 

1,090

 

 

 

1,004

 

 

 

994

 

 

 

1,164

 

 

 

1,170

 

 

 

4,303

 

Noninterest expense

 

 

7,630

 

 

 

7,935

 

 

 

7,532

 

 

 

8,563

 

 

 

8,120

 

 

 

32,119

 

Income before income taxes

 

 

1,829

 

 

 

670

 

 

 

1,224

 

 

 

1,143

 

 

 

1,374

 

 

 

4,411

 

Income tax expense (benefit)

 

 

337

 

 

 

(112

)

 

 

198

 

 

 

197

 

 

 

250

 

 

 

533

 

Net income

 

$

1,492

 

 

$

782

 

 

$

1,026

 

 

$

946

 

 

$

1,124

 

 

$

3,878

 


BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

 

 

As of and for the Three Months Ended

 

 

As of and for the Year Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

(Dollars in thousands, except per share amounts)

 

2019

 

 

2018

 

 

2018

 

 

2018

 

 

2018

 

 

2018

 

Basic earnings per share

 

$

0.11

 

 

$

0.06

 

 

$

0.08

 

 

$

0.07

 

 

$

0.09

 

 

$

0.30

 

Diluted earnings per share

 

 

0.11

 

 

 

0.06

 

 

 

0.08

 

 

 

0.07

 

 

 

0.09

 

 

 

0.30

 

Book value per share

 

 

9.01

 

 

 

8.90

 

 

 

8.80

 

 

 

8.75

 

 

 

8.69

 

 

 

 

 

Tangible book value per share (1)

 

 

8.11

 

 

 

7.98

 

 

 

7.88

 

 

 

7.81

 

 

 

7.74

 

 

 

 

 

Shares outstanding at end of period

 

 

13,313,537

 

 

 

13,201,682

 

 

 

13,238,716

 

 

 

13,226,096

 

 

 

13,223,096

 

 

 

13,201,682

 

Weighted average shares outstanding, basic

 

 

12,972,850

 

 

 

13,050,791

 

 

 

13,080,372

 

 

 

13,059,604

 

 

 

13,038,593

 

 

 

13,057,537

 

Weighted average shares outstanding, diluted

 

 

13,008,817

 

 

 

13,099,707

 

 

 

13,142,549

 

 

 

13,126,419

 

 

 

13,106,214

 

 

 

13,122,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Measures (tax-equivalent basis):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yield on average interest-earning assets

 

 

4.90

%

 

 

4.72

%

 

 

4.66

%

 

 

4.61

%

 

 

4.74

%

 

 

4.70

%

Cost of funds

 

 

1.54

%

 

 

1.40

%

 

 

1.19

%

 

 

1.08

%

 

 

0.95

%

 

 

1.17

%

Cost of deposits

 

 

1.34

%

 

 

1.22