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Section 1: 8-K (8-K)

bayk-8k_20190630.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): July 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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      yes      no

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

 


Item 2.02Results of Operations and Financial Condition.

On July 30, 2019, Bay Banks of Virginia, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 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 July 30, 2019 announcing the Company’s financial results for the quarter ended June 30, 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

 

July 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 Second Quarter and First Half 2019 Results

RICHMOND, VA, July 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 three and six months ended June 30, 2019.

The company reported net income of $1.7 million, or $0.13 per diluted share, for the second quarter of 2019 compared to $1.5 million, or $0.11 per diluted share, for the first quarter of 2019 and $946 thousand, or $0.07 per diluted share, for the second quarter of 2018. For the first half of 2019, the company reported net income of $3.2 million, or $0.25 per diluted share, compared to $2.1 million, or $0.16 per diluted share, for the first half of 2018. Net income in the first half of 2018 included $363 thousand ($287 thousand1 after income tax) of merger-related expenses incurred in connection with the company’s merger with Virginia BanCorp, Inc. on April 1, 2017 (the “Merger”).

Randal R. Greene, President and Chief Executive Officer, commented: “I am again pleased to report improved quarterly results. As noted in our first quarter report, we have intentionally slowed loan growth preserving our liquidity for higher yielding opportunities.  In the second quarter, we experienced a higher than usual level of loan payoffs. However, loans to new relationships and advances under current lines were strong in the quarter and we are earning slightly higher yields on these loans. Deposit costs in our markets appear to be stabilizing, and as a result, we have taken actions to lower the cost of this funding source. We are experiencing some success in growing noninterest-bearing accounts, though this growth is not at the pace we would like. We are focused on growing these accounts.”

Operating Results

Second Quarter 2019 compared to First Quarter 2019

 

Income before income taxes for the second quarter of 2019 was $2.1 million compared to $1.8 million for the first quarter of 2019.

 

Interest income for the three months ended June 30, 2019 was $12.3 million, on average interest-earning assets of $1.04 billion, compared to $12.3 million, on average interest-earning assets of $1.02 billion, for the three months ended March 31, 2019. Interest income in the second quarter of 2019 included accretion of acquired loan discounts of $197 thousand, while interest income in the first quarter of 2019 included $439 thousand of accretion of acquired loan discounts. Higher accretion in the first quarter of 2019 was primarily attributable to early payoffs of loans acquired in the Merger. Yields on average interest-earning assets were 4.77% and 4.90% for the linked quarter periods, including the effect of accretion. Of the decline in yield from the first quarter to the second quarter of 2019, 11 basis points were attributable to lower accretion of acquired loan discounts of $242 thousand.

 

Interest expense was $3.8 million and $3.7 million for the three months ended June 30, 2019 and March 31, 2019, respectively, and cost of funds was 1.58% and 1.54% for the linked quarter periods. Average interest-bearing liabilities were $857.4 million and $853.6 million for the second and first quarters of 2019, respectively.

 

Net interest margin (“NIM”) was 3.29% for the second quarter of 2019 compared to 3.45% for the first quarter of 2019. Of the decline in NIM from the first quarter to the second quarter of 2019, 9 basis points were attributable to lower accretion of acquired loan discounts, while the remaining decline was primarily due to higher cost of funds.

 

Provision for loan losses was $62 thousand in the second quarter of 2019, while provision for loan losses in the first quarter of 2019 was $314 thousand. Provision for loan losses in the second quarter of 2019 was primarily attributable to adjustments to certain qualitative loan loss factors to adjust for the change in the composition of the company’s loan portfolio. Provision for loan losses in the first quarter of 2019 was primarily attributable to gross loan growth of $16.5 million.

 

Noninterest income for the three months ended June 30, 2019 and March 31, 2019 was $1.3 million and $1.1 million, respectively. Greater noninterest income in the second quarter of 2019 compared to the first quarter of 2019 was primarily due to higher secondary market mortgage sales and servicing income, which increased $196 thousand, as the company sold a greater volume of originated loans and due to general seasonality in the mortgage banking business.


 

Noninterest expenses for the three months ended June 30, 2019 and March 31, 2019 were $7.6 million and $7.6 million, respectively. Noninterest expenses for the second quarter of 2019 included a net loss on the sale and valuation of other real estate owned of $72 thousand, while the first quarter of 2019 included a $6 thousand net gain on the sale and valuation of other real estate owned. The company’s efficiency ratio for the second quarter of 2019 was 77.7% compared to 78.1% for the first quarter of 2019.

 

Income tax expense for the second quarter of 2019 was $395 thousand, reflective of an 18.6% effective income tax rate, while income tax expense for the first quarter of 2019 was $337 thousand, reflective of an 18.4% effective income tax rate.

 

First Half 2019 compared to First Half 2018

 

 

Income before income taxes for the first half of 2019 was $3.9 million compared to $2.5 million for the first half of 2018.

 

Interest income for the six months ended June 30, 2019 was $24.7 million, on average interest-earning assets of $1.03 billion, compared to $21.2 million for the six months ended June 30, 2018, on average interest-earning assets of $909.0 million. Interest income in the first half of 2019 included accretion of acquired loan discounts of $636 thousand, while interest income in the first half of 2018 included $1.1 million of accretion of acquired loan discounts. Yields on average interest-earning assets were 4.83% and 4.68% for the first half of 2019 and 2018, respectively. The higher yield on average interest-earning assets in the 2019 period was primarily due to higher loan yields, partially offset by lower accretion of acquired loan discounts of $414 thousand, which had a negative 11 basis point effect.

 

Interest expense was $7.5 million and $4.4 million for the six months ended June 30, 2019 and 2018, respectively, and cost of funds was of 1.56% and 0.98% for the respective periods. Higher cost of funds in the first half of 2019 was primarily due to competition for deposits in the company’s markets, the repricing of maturing time deposits, and higher interest rates in general. Average interest-bearing liabilities were $855.5 million and $747.7 million for the first half of 2019 and 2018, respectively.

 

NIM was 3.37% for the first half of 2019 compared to 3.75% for the first half of 2018. Lower NIM in the 2019 period was primarily due to higher cost of funds and lower accretion of acquired loan discounts, which had a negative 23 basis point effect, partially offset by higher loan yields.

 

Provision for loan losses was $376 thousand for the first half of 2019, primarily attributable to gross loan growth of $15.3 million. Provision for loan losses in the first half of 2018 was a recovery of $28 thousand, which included a $580 thousand benefit to correct for an overstatement in the company’s allowance for loan losses as of December 31, 2017, as previously reported, and the decline in reserve levels for a select portfolio of purchased consumer loans.

 

Noninterest income for the six months ended June 30, 2019 and 2018 was $2.4 million and $2.3 million, respectively. The 2018 period included a gain of $352 thousand on the curtailment of the company’s post-retirement benefit plan.

 

Noninterest expenses for the six months ended June 30, 2019 and 2018 were $15.2 million and $16.7 million, respectively. Merger-related expenses were $0 and $363 thousand for the six months ended June 30, 2019 and 2018, respectively. Expenses associated with the succession of the company’s CFO and in the completion of the company’s 2017 year-end reporting incurred in the first half of 2018 were approximately $1.2 million.

 

Income tax expense for the second half of 2019 was $732 thousand, reflective of an 18.6% effective income tax rate, while income tax expense for the second half of 2018 was $447 thousand, reflective of an 17.8% effective income tax rate.

Second Quarter 2019 compared to Second Quarter 2018

 

Income before income taxes for the second quarter of 2019 was $2.1 million compared to $1.1 million for the second quarter of 2018.

 

Interest income for the three months ended June 30, 2019 was $12.3 million, on average interest-earning assets of $1.04 billion, compared to $10.5 million, on average interest-earning assets of $913.5 million, for the three months ended June 30, 2018. Interest income in the second quarter of 2019 included accretion of acquired loan discounts of $197 thousand, while interest income in the second quarter of 2018 included $547 thousand of accretion of acquired loan discounts and negative adjustments totaling $145 thousand for amounts incorrectly reported in the first quarter of 2018, as previously reported. Yields on average interest-earning assets were 4.77% and 4.61% for the second quarters of 2019 and 2018, respectively. Higher loan yields in the 2019 period were partially offset by lower accretion of acquired loan discounts.

 

Interest expense was $3.8 million and $2.3 million for the three months ended June 30, 2019 and 2018, respectively, and cost of funds was 1.58% and 1.08%, for the respective periods. Higher costs of funds 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 $857.4 million and $747.2 million for the second quarters of 2019 and 2018, respectively.

 

NIM was 3.29% for the second quarter of 2019 compared to 3.60% for the second quarter of 2018. The decline in NIM was primarily attributable to higher cost of funds and lower accretion of acquired loan discounts, partially offset by higher loan yields in the 2019 period.

 

Provision for loan losses was $62 thousand for the three months ended June 30, 2019, primarily attributable to adjustments to certain qualitative loan loss factors, as noted above. Provision for loan losses for the three months ended June 30, 2018 was a recovery of $348 thousand, primarily attributable to a $580 thousand benefit to correct for an overstatement in the company’s allowance for loan losses as of December 31, 2017, as noted above.


 

Noninterest income for the three months ended June 30, 2019 and 2018 was $1.3 million and $1.2 million, respectively. The increase of $132 thousand was primarily attributable to higher service charges and fees on deposit accounts and a gain on rabbi trust assets of $40 thousand in the second quarter of 2019 compared to a loss of $25 thousand in the 2018 period.

 

Noninterest expenses for the three months ended June 30, 2019 and 2018 were $7.6 million and $8.6 million, respectively. Noninterest expenses associated with the succession of the company’s CFO was approximately $200 thousand in the second quarter of 2018. Higher consulting and audit and accounting fees in the 2018 period were primarily related to projects, such as the implementation of an enterprise risk management platform and a Sarbanes-Oxley readiness assessment. The company’s efficiency ratio for the second quarter of 2019 was 77.7% compared to 91.5% for the same quarter of 2018.

 

Income tax expense for the second quarter of 2019 and 2018 was $395 thousand and $197 thousand, respectively, reflective of an 18.6% and 17.2% effective income tax rate, respectively.

 

Balance Sheet

 

Total assets were $1.1 billion at June 30, 2019 and at December 31, 2018.

 

Loans, net of allowance for loan losses, were $909.9 million at June 30, 2019 compared to $894.2 million at December 31, 2018, an annualized growth rate of over 3%. Excluding the payoff of approximately $19.5 million in the first half of 2019 of purchased portfolio loans, including those acquired in the Merger, loan growth, annualized, was approximately 8% for the first half of 2019.

 

Deposits were $875.6 million at June 30, 2019 compared to $842.2 million at December 31, 2018. Noninterest-bearing demand accounts comprised 13.3% of total deposits at June 30, 2019, down slightly from 13.6% at December 31, 2018.

 

Shareholders' equity was $122.6 million and $117.5 million at June 30, 2019 and December 31, 2018, respectively, an increase of $5.1 million. The increase in shareholders’ equity in the first half of 2019 was primarily attributable to net income of $3.2 million and $1.4 million of unrealized gains on the company’s available-for-sale securities portfolio. 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 $8.311 and $7.981 at June 30, 2019 and December 31, 2018, respectively. Capital ratios for Virginia Commonwealth Bank were above regulatory minimum guidelines for well-capitalized banks as of June 30, 2019 and December 31, 2018.

 

Annualized return on average assets for the quarters ended June 30, 2019, March 31, 2019, and June 30, 2018 was 0.62%, 0.55%, and 0.38%, respectively, while annualized return on average equity for the same periods was 5.72%, 5.05%, and 3.28%, respectively.

Asset Quality

 

Nonperforming assets were $7.7 million, or 0.71% of total assets, as of June 30, 2019, compared to $8.8 million, or 0.81% of total assets, as of December 31, 2018, and $7.0 million, or 0.71% of total assets, as of June 30, 2018.

 

The ratio of allowance for loan losses to total gross loans was 0.82%, 0.88%, and 0.89% at June 30, 2019, December 31, 2018, and June 30, 2018, respectively. The company's allowance for loan losses does not include discounts recorded on loans acquired in the Merger, which were $3.3 million, $3.9 million, and $4.7 million as of June 30, 2019, December 31, 2018, and June 30, 2018, respectively.

Outlook

Greene concluded: “Our loan pipeline continues to be strong and we expect to selectively grow loans in the second half of the year.  We will continue our strategy of emphasizing residential loan originations that can be sold in the secondary market and adding residential loans to our portfolio that have favorable yields. Deposit costs are being strategically lowered, which we expect will provide support to our net interest margin in the coming quarters.”


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 [email protected]

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

 

 

(unaudited)

 

 

 

 

 

(Dollars in thousands, except share data)

 

June 30, 2019

 

 

December 31, 2018 (1)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

8,139

 

 

$

7,685

 

Interest-earning deposits

 

 

15,869

 

 

 

18,891

 

Federal funds sold

 

 

596

 

 

 

625

 

Certificates of deposit

 

 

3,498

 

 

 

3,746

 

Available-for-sale securities, at fair value

 

 

81,169

 

 

 

82,232

 

Restricted securities

 

 

6,769

 

 

 

7,600

 

Loans receivable, net of allowance for loan losses of $7,479 and

   $7,902, respectively

 

 

909,913

 

 

 

894,191

 

Loans held for sale

 

 

593

 

 

 

368

 

Premises and equipment, net

 

 

21,001

 

 

 

18,169

 

Accrued interest receivable

 

 

3,191

 

 

 

3,172

 

Other real estate owned, net

 

 

3,168

 

 

 

3,597

 

Bank owned life insurance

 

 

19,511

 

 

 

19,270

 

Goodwill

 

 

10,374

 

 

 

10,374

 

Mortgage servicing rights

 

 

916

 

 

 

977

 

Core deposit intangible

 

 

1,840

 

 

 

2,193

 

Deferred tax asset, net

 

 

1,128

 

 

 

1,510

 

Other assets

 

 

6,585

 

 

 

5,927

 

Total assets

 

$

1,094,260

 

 

$

1,080,617

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

116,229

 

 

$

114,122

 

Savings and interest-bearing demand deposits

 

 

374,175

 

 

 

359,400

 

Time deposits

 

 

385,218

 

 

 

368,670

 

Total deposits

 

 

875,622

 

 

 

842,192

 

 

 

 

 

 

 

 

 

 

Securities sold under repurchase agreements

 

 

6,983

 

 

 

6,089

 

Federal Home Loan Bank advances

 

 

70,000

 

 

 

100,000

 

Subordinated notes, net of unamortized issuance costs

 

 

6,902

 

 

 

6,893

 

Other liabilities

 

 

12,136

 

 

 

7,967

 

Total liabilities

 

 

971,643

 

 

 

963,141

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

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

   outstanding - 13,332,484 and 13,201,682 shares, respectively) (2)

 

 

66,662

 

 

 

66,008

 

Additional paid-in capital

 

 

36,699

 

 

 

36,972

 

Unearned employee stock ownership plan shares

 

 

(1,668

)

 

 

(1,734

)

Retained earnings

 

 

20,817

 

 

 

17,557

 

Accumulated other comprehensive income (loss), net

 

 

107

 

 

 

(1,327

)

Total shareholders' equity

 

 

122,617

 

 

 

117,476

 

Total liabilities and shareholders' equity

 

$

1,094,260

 

 

$

1,080,617

 

 

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

(2) Preferred stock is authorized; however, none was outstanding as of June 30, 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)

 

June 30, 2019

 

 

March 31, 2019

 

 

June 30, 2018

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

11,458

 

 

$

11,461

 

 

$

9,745

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

577

 

 

 

595

 

 

 

497

 

Tax-exempt

 

 

97

 

 

 

118

 

 

 

117

 

Federal funds sold

 

 

18

 

 

 

7

 

 

 

5

 

Interest-earning deposit accounts

 

 

152

 

 

 

135

 

 

 

127

 

Certificates of deposit

 

 

19

 

 

 

20

 

 

 

17

 

Total interest income

 

 

12,321

 

 

 

12,336

 

 

 

10,508

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,088

 

 

 

2,809

 

 

 

1,796

 

Securities sold under repurchase agreements

 

 

4

 

 

 

3

 

 

 

4

 

Subordinated notes and other borrowings

 

 

138

 

 

 

137

 

 

 

128

 

Federal Home Loan Bank advances

 

 

614

 

 

 

704

 

 

 

386

 

Total interest expense

 

 

3,844

 

 

 

3,653

 

 

 

2,314

 

Net interest income

 

 

8,477

 

 

 

8,683

 

 

 

8,194

 

Provision for (recovery of) loan losses

 

 

62

 

 

 

314

 

 

 

(348

)

Net interest income after provision for loan losses

 

 

8,415

 

 

 

8,369

 

 

 

8,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Income from fiduciary activities

 

 

206

 

 

 

214

 

 

 

198

 

Service charges and fees on deposit accounts

 

 

246

 

 

 

238

 

 

 

152

 

Wealth management

 

 

262

 

 

 

206

 

 

 

282

 

Interchange fees, net

 

 

121

 

 

 

101

 

 

 

124

 

Other service charges and fees

 

 

27

 

 

 

29

 

 

 

30

 

Secondary market sales and servicing

 

 

267

 

 

 

71

 

 

 

243

 

Increase in cash surrender value of bank owned life insurance

 

 

121

 

 

 

120

 

 

 

124

 

Net losses on sale of available-for-sale securities

 

 

(2

)

 

 

 

 

 

 

Net losses on disposition of other assets

 

 

(1

)

 

 

(1

)

 

 

 

Gain (loss) on rabbi trust assets

 

 

40

 

 

 

90

 

 

 

(25

)

Other

 

 

8

 

 

 

22

 

 

 

35

 

Total noninterest income

 

 

1,295

 

 

 

1,090

 

 

 

1,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,892

 

 

 

4,001

 

 

 

4,273

 

Occupancy

 

 

837

 

 

 

868

 

 

 

874

 

Data processing

 

 

609

 

 

 

588

 

 

 

834

 

Bank franchise tax

 

 

230

 

 

 

216

 

 

 

177

 

Telecommunications and other technology

 

 

262

 

 

 

207

 

 

 

166

 

FDIC assessments

 

 

162

 

 

 

216

 

 

 

187

 

Foreclosed property

 

 

19

 

 

 

43

 

 

 

53

 

Consulting

 

 

147

 

 

 

115

 

 

 

341

 

Advertising and marketing

 

 

109

 

 

 

67

 

 

 

153

 

Directors' fees

 

 

213

 

 

 

164

 

 

 

68

 

Audit and accounting

 

 

189

 

 

 

204

 

 

 

240

 

Legal

 

 

27

 

 

 

83

 

 

 

119

 

Core deposit intangible amortization

 

 

173

 

 

 

180

 

 

 

203

 

Net other real estate owned losses (gains)

 

 

72

 

 

 

(6

)

 

 

84

 

Other

 

 

651

 

 

 

684

 

 

 

790

 

Total noninterest expense

 

 

7,592

 

 

 

7,630

 

 

 

8,562

 

Income before income taxes

 

 

2,118

 

 

 

1,829

 

 

 

1,143

 

Income tax expense

 

 

395

 

 

 

337

 

 

 

197

 

Net income

 

$

1,723

 

 

$

1,492

 

 

$

946

 

Basic and diluted earnings per share

 

$

0.13

 

 

$

0.11

 

 

$

0.07

 


BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

For the Six Months Ended

 

(Dollars in thousands, except per share data)

 

June 30, 2019

 

 

June 30, 2018

 

INTEREST INCOME

 

 

 

 

 

 

 

 

Loans, including fees

 

$

22,919

 

 

$

19,729

 

Securities:

 

 

 

 

 

 

 

 

Taxable

 

 

1,172

 

 

 

894

 

Tax-exempt

 

 

214

 

 

 

237

 

Federal funds sold

 

 

25

 

 

 

11

 

Interest-earning deposit accounts

 

 

287

 

 

 

293

 

Certificates of deposit

 

 

39

 

 

 

36

 

Total interest income

 

 

24,656

 

 

 

21,200

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

Deposits

 

 

5,896

 

 

 

3,400

 

Securities sold under repurchase agreements

 

 

7

 

 

 

7

 

Subordinated notes

 

 

275

 

 

 

256

 

Federal Home Loan Bank advances

 

 

1,319

 

 

 

699

 

Total interest expense

 

 

7,497

 

 

 

4,362

 

Net interest income

 

 

17,159

 

 

 

16,838

 

Provision for (recovery of) loan losses

 

 

376

 

 

 

(28

)

Net interest income after provision for loan losses

 

 

16,783

 

 

 

16,866

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

Income from fiduciary activities

 

 

420

 

 

 

445

 

Service charges and fees on deposit accounts

 

 

484

 

 

 

287

 

Wealth management

 

 

469

 

 

 

414

 

Interchange fees, net

 

 

222

 

 

 

116

 

Other service charges and fees

 

 

56

 

 

 

61

 

Secondary market sales and servicing

 

 

339

 

 

 

376

 

Increase in cash surrender value of bank owned life insurance

 

 

240

 

 

 

251

 

Net losses on sale of available-for-sale securities

 

 

(2

)

 

 

 

Net losses on disposition of other assets

 

 

(1

)

 

 

(69

)

Gain on rabbi trust assets

 

 

130

 

 

 

27

 

Gain on curtailment of post-retirement benefit plan

 

 

 

 

 

352

 

Other

 

 

28

 

 

 

74

 

Total noninterest income

 

 

2,385

 

 

 

2,334

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

7,893

 

 

 

8,379

 

Occupancy

 

 

1,705

 

 

 

1,659

 

Data processing

 

 

1,197

 

 

 

1,306

 

Bank franchise tax

 

 

446

 

 

 

353

 

Telecommunications and other technology

 

 

469

 

 

 

362

 

FDIC assessments

 

 

378

 

 

 

370

 

Foreclosed property

 

 

62

 

 

 

65

 

Consulting

 

 

262

 

 

 

723

 

Advertising and marketing

 

 

176

 

 

 

221

 

Directors' fees

 

 

377

 

 

 

236

 

Audit and accounting

 

 

393

 

 

 

603

 

Legal

 

 

110

 

 

 

249

 

Merger-related

 

 

 

 

 

363

 

Core deposit intangible amortization

 

 

353

 

 

 

414

 

Net other real estate owned losses (gains)

 

 

66

 

 

 

(57

)

Other

 

 

1,335

 

 

 

1,437

 

Total noninterest expense

 

 

15,222

 

 

 

16,683

 

Income before income taxes

 

 

3,946

 

 

 

2,517

 

Income tax expense

 

 

732

 

 

 

447

 

Net income

 

$

3,214

 

 

$

2,070

 

Basic and diluted earnings per share

 

$

0.25

 

 

$

0.16

 

 


BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Six

 

 

 

As of and for the Three Months Ended

 

 

Months Ended

 

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

(Dollars in thousands, except per share amounts)

 

2019

 

 

2019

 

 

2018

 

 

2018

 

 

2018

 

 

2019

 

 

2018

 

Select Consolidated Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,094,260

 

 

$

1,103,840

 

 

$

1,080,617

 

 

$

1,027,440

 

 

$

983,216

 

 

 

 

 

 

 

 

 

Cash, interest-earning deposits and federal funds sold

 

 

27,506

 

 

 

30,677

 

 

 

28,061

 

 

 

22,713

 

 

 

38,526

 

 

 

 

 

 

 

 

 

Available-for-sale securities, at fair value

 

 

81,169

 

 

 

82,030

 

 

 

82,232

 

 

 

81,215

 

 

 

74,322

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans on real estate

 

 

713,247

 

 

 

725,494

 

 

 

713,997

 

 

 

682,321

 

 

 

644,202

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

187,531

 

 

 

173,360

 

 

 

164,608

 

 

 

144,118

 

 

 

124,563

 

 

 

 

 

 

 

 

 

Consumer

 

 

16,889

 

 

 

20,095

 

 

 

23,740

 

 

 

27,920

 

 

 

32,767

 

 

 

 

 

 

 

 

 

Loans receivable

 

 

917,667

 

 

 

918,949

 

 

 

902,345

 

 

 

854,359

 

 

 

801,532

 

 

 

 

 

 

 

 

 

Unamortized net deferred loan (fees) costs

 

 

(275

)

 

 

(329

)

 

 

(252

)

 

 

(79

)

 

 

24

 

 

 

 

 

 

 

 

 

Allowance for loan losses (ALL)

 

 

(7,479

)

 

 

(7,858

)

 

 

(7,902

)

 

 

(7,287

)

 

 

(7,113

)

 

 

 

 

 

 

 

 

Net loans

 

 

909,913

 

 

 

910,762

 

 

 

894,191

 

 

 

846,993

 

 

 

794,443

 

 

 

 

 

 

 

 

 

Loans held for sale

 

 

593

 

 

 

 

 

 

368

 

 

 

 

 

 

669

 

 

 

 

 

 

 

 

 

Other real estate owned, net

 

 

3,168

 

 

 

3,718

 

 

 

3,597

 

 

 

3,663

 

 

 

3,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

971,643

 

 

$

983,903

 

 

$

963,141

 

 

$

910,893

 

 

$

867,492

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

116,229

 

 

 

112,315

 

 

 

114,122

 

 

 

108,602

 

 

 

108,943

 

 

 

 

 

 

 

 

 

Savings and interest-bearing demand deposits

 

 

374,175

 

 

 

371,587

 

 

 

359,400

 

 

 

330,690

 

 

 

296,206

 

 

 

 

 

 

 

 

 

Time deposits

 

 

385,218

 

 

 

372,751

 

 

 

368,670

 

 

 

369,836

 

 

 

369,917

 

 

 

 

 

 

 

 

 

Total deposits

 

 

875,622

 

 

 

856,653

 

 

 

842,192

 

 

 

809,128

 

 

 

775,066

 

 

 

 

 

 

 

 

 

Securities sold under repurchase agreements

 

 

6,983

 

 

 

7,220

 

 

 

6,089

 

 

 

6,083

 

 

 

7,008

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

 

70,000

 

 

 

100,000

 

 

 

100,000

 

 

 

80,000

 

 

 

70,000

 

 

 

 

 

 

 

 

 

Subordinated notes, net of unamortized issuance costs

 

 

6,902

 

 

 

6,897

 

 

 

6,893

 

 

 

6,889

 

 

 

6,885