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Section 1: 8-K (BAYK-8K_ER-20200331)

bayk-8k_20200507.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): May 7, 2020

 

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))

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

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 May 7, 2020, Bay Banks of Virginia, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2020.

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 May 7, 2020, announcing the Company’s financial results for the three months ended March 31, 2020.

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

 

May 7, 2020

 

(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 2020 Results

Response to COVID-19 Pandemic

RICHMOND, VA, May 7, 2020 /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 of 2020 and the company’s response to the COVID-19 pandemic.

The company reported a net loss of $14 thousand, or $0.00 per diluted share, for the first quarter of 2020 compared to net income of $2.0 million, or $0.15 per diluted share, for the fourth quarter of 2019 and net income of $1.5 million, or $0.11 per diluted share, for the first quarter of 2019. The net loss for the first quarter of 2020 includes loan loss provision expense of $2.8 million (pre-tax), a significant portion of which related to estimated reserve needs as a result of the COVID-19 pandemic.

The company reported that it has been operating under a pre-determined pandemic plan since the beginning of March. From the onset of the national pandemic, it proactively addressed the needs of its commercial and individual borrowers modifying nearly 180 loans, with balances of approximately $86.5 million, in the month of March 2020. The modifications allow for the short-term deferral of principal payments or of principal and interest payments.  

Beginning on March 20, 2020, the company’s retail branch lobbies were accessible by appointment; all its drive-through access points were open, as well as access to banking services using readily-available technology. On April 13, 2020, the company temporarily closed four retail branches and reduced hours of certain other branches. The company anticipates the branches will be re-opened during the third quarter of this year. These adjustments were primarily in response to the ‘stay-at-home’ order issued by the governor of Virginia on March 30, 2020. The changes in branch staffing along with certain other positions result in noninterest expense savings of approximately $225 thousand, which will be realized over the second and third quarters of 2020.  

Beginning on April 3, 2020, the company actively participated in the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, closing 405 loans totaling $45.3 million and earning $1.8 million in processing fees, pursuant to the first appropriation of government funding, which was depleted on April 16, 2020. Beginning on April 27, 2020 and through the end of April, an additional 107 loans were closed totaling $5.5 million and resulting in $250 thousand in processing fees, pursuant to the second appropriation of PPP government funding. Through the PPP, the federal government partnered with banks to provide over $650 billion to small businesses to support payrolls and other operating expenses.

Randal R. Greene, President and Chief Executive Officer, commented: “2020 started strong; with vibrant economies in our markets and with the leadership of our new Chief Revenue Officer, we were off to a great year. On a pre-tax, pre-provision basis, we earned $2.7 million1 in the first quarter of 2020 compared to $2.8 million1 in the fourth quarter of 2019. Excluding the higher accretion of loan discounts of $740 thousand in the fourth quarter of 2019, pre-tax, pre-provision earnings improved $663 thousand. Of the $2.8 million we recorded in provision for loan losses during the quarter, $1.5 million was an estimate of credit issues related to the impact of the virus on our borrowers’ businesses and their ability to repay us. First quarter loan growth, on an annualized basis, was nearly 20%, and we, like other banks our size, were feeling loan yield pressure as market rates were coming down. We aggressively reduced deposit rates, bringing overall deposit costs down 10 basis points in this first quarter.

“At the beginning of 2020, few would have predicted our economy would come to a halt due to a pandemic. As a nimble community bank, our focus quickly shifted to supporting our customers, modifying their loans, and assisting them in deciphering the many stimulus programs rolled out by our federal government. I couldn’t be more proud of how our teams responded, both the team that executed the Paycheck Protection Program loans for our customers and our branch employees that interface day-to-day with the public during this complicated situation. As of the end of April, 100% of our customers that applied for a PPP loan had been approved for one. I have received an overwhelming amount of positive feedback from customers we’ve helped, many that have temporarily lost revenues they’ve worked years to build.”

 

Operating Results

First Quarter 2020 compared to Fourth Quarter 2019

 

•

Loss before income taxes for the first quarter of 2020 was $72 thousand compared to income before income taxes of $2.5 million for the fourth quarter of 2019.

 

•

Interest income for the three months ended March 31, 2020 was $12.2 million, on average interest-earning assets of $1.08 billion, compared to $13.0 million, on average interest-earning assets of $1.06 billion, for the three months ended December 31, 2019. Interest income in the first quarter of 2020 included accretion of acquired loan discounts of $189 thousand, while interest income in the fourth quarter of 2019 included $929 thousand of accretion of acquired loan discounts. Higher accretion in the fourth quarter of 2019 was primarily attributable to significant paydowns and payoffs of loans acquired in the company’s 2017 merger with Virginia BanCorp, Inc. Yields on average interest-earning assets were 4.56% and 4.87% for the first quarter of 2020 and the fourth quarter of 2019, respectively, including the effect of accretion. Yields on average interest-earning assets in the fourth quarter of 2019 were positively affected by higher accretion of acquired loan discounts, which had a positive 28 basis point effect compared to yields in the first quarter of 2020. Yields on average interest-earning assets, excluding the effect of accretion, in the first quarter of 2020 were also negatively affected by lower yielding investment securities due to calls of higher yielding securities, and lower yields on loans originated in late 2019 and in the first quarter of 2020. Partially offsetting the decline in yields excluding accretion was higher average balances of loans.

 

•

Interest expense was $3.6 million and $3.9 million for the three months ended March 31, 2020 and December 31, 2019, respectively, and cost of funds was 1.44% and 1.54% for the sequential quarter periods. Average interest-bearing liabilities were $871.6 million and $860.4 million for the first quarter of 2020 and the fourth quarter of 2019, respectively. Cost of deposits was 1.24% for the first quarter of 2020, down 10 basis points from 1.34% for the fourth quarter of 2019, reflective of the company’s efforts to reduce deposit rates since mid-2019.

 

•

Net interest margin (“NIM”) was 3.22% for the first quarter of 2020 compared to 3.43% for the fourth quarter of 2019. Higher accretion in the fourth quarter of 2019 contributed 28 basis points to the sequential quarter decline, which was partially offset by lower cost of funds.

 

•

Provision for loan losses was $2.8 million for the first quarter of 2020 compared to $311 thousand for the fourth quarter of 2019. Of the first quarter 2020 amount, approximately $1.5 million was attributable to estimated reserve needs due to the negative economic impact of the COVID-19 pandemic. Of this $1.5 million, approximately $200 thousand was due to risk rating downgrades of loans to borrowers in industry segments highly affected by COVID-19, such as hotels, restaurants, churches, and assisted-living facilities; the remaining $1.3 million relates to a qualitative loss factor applied to the majority of the company’s loan portfolio for negative COVID-19 economic implications, such as unemployment. The remaining $1.3 million of the provision for loan losses was primarily due to gross loan growth of $46.0 million and higher specific reserves recorded in the quarter.

 

•

Noninterest income for both the three months ended March 31, 2020 and December 31, 2019 was $1.4 million. The 2020 quarter included approximately $471 thousand of fee income for referring loan customers to a third-party financial institution to execute interest rate swaps, while the 2019 quarter included no income from such activities. Partially offsetting this increase was a $263 thousand unrealized loss in the 2020 quarter on assets held in a rabbi trust for the benefit of participants in the company’s deferred compensation plan compared to an unrealized gain of $62 thousand in the 2019 quarter. Additionally, lower secondary market sales and servicing income of $202 thousand in the first quarter of 2020 compared to $309 thousand in the fourth quarter of 2019 was primarily the result of a $161 thousand negative valuation adjustment to the company’s mortgage servicing rights asset in the first quarter of 2020 compared to a $25 thousand gain in the fourth quarter of 2019.

 

•

Noninterest expense for the three months ended March 31, 2020 and December 31, 2019 was $7.3 million and $7.7 million, respectively. Lower noninterest expense in the first quarter of 2020 was primarily attributable to lower salaries and employee benefits, primarily due to a lower management incentive accrual recorded in the first quarter of 2020 and the unrealized loss on rabbi trust assets. The company’s efficiency ratio was 73.0% and 73.5% for the first quarter of 2020 and fourth quarter of 2019, respectively.

 

•

Income tax benefit for the first quarter of 2020 was $58 thousand, reflective of an 80.6% effective income tax rate, while income tax expense for the fourth quarter of 2019 was $469 thousand, reflective of a 19.0% effective income tax rate. The effective income tax rate of 80.6% in the first quarter of 2020 was primarily due to the amount of tax-exempt income relative to the company’s pre-tax net loss for the quarter.

 

First Quarter 2020 compared to First Quarter 2019

 

•

Loss before income taxes for the first quarter of 2020 was $72 thousand compared to income before income taxes of $1.8 million for the first quarter of 2019.

 

•

Interest income for the three months ended March 31, 2020 was $12.2 million, on average interest-earning assets of $1.08 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 first quarters of 2020 and 2019 included accretion of acquired loan discounts of $189 thousand

 

and $439 thousand, respectively. Yields on average interest-earning assets were 4.56% and 4.90% for the first quarters of 2020 and 2019, respectively. The decrease in yield on average interest-earning assets was primarily due to lower yields on loans in the 2020 period and higher accretion of acquired loan discounts in the 2019 period, which had a positive 11 basis point effect compared to the first quarter of 2020.  

 

•

Interest expense was $3.6 million and $3.7 million for the three months ended March 31, 2020 and 2019, respectively, and cost of funds was 1.44% and 1.54%, for the respective periods. Average interest-bearing liabilities were $871.6 million and $853.6 million for the first quarters of 2020 and 2019, respectively. Interest expense on the company’s $25 million of 5.625% subordinated notes issued on October 7, 2019 and maturing on October 15, 2029 (the “2029 Notes”) contributed $375 thousand and 12 basis points to interest expense and cost of funds, respectively, in the first quarter of 2020. Offsetting the higher funding cost contributed by the 2029 Notes was lower deposit costs, which declined 10 basis points to the first quarter of 2020 from the first quarter of 2019. Higher average balances of noninterest-bearing deposits, which increased $24.1 million to March 31, 2020 from March 31, 2019, contributed to the decline in deposit cost.

 

•

NIM was 3.22% for the first quarter of 2020 compared to 3.45% for the first quarter of 2019. The decrease in NIM was primarily attributable to lower accretion of acquired loan discounts and lower yields on interest-earning assets, partially offset by lower cost of funds.

 

•

Provision for loan losses was $2.8 million in the first quarter of 2020 compared to $314 thousand in the first quarter of 2019. Higher provision for loan losses in the 2020 quarter was primarily attributable to estimated reserve needs related to COVID-19, gross loan growth, and higher specific reserves, as noted above.

 

•

Noninterest income for the three months ended March 31, 2020 and 2019 was $1.4 million and $1.1 million, respectively. Higher noninterest income in the 2020 quarter was primarily due to referral fee income for customer interest rate swaps and higher secondary market sales and servicing income, partially offset by a net unrealized loss on rabbi trust assets of $263 thousand in the 2020 quarter compared to a $90 thousand net unrealized gain in the 2019 quarter.

 

•

Noninterest expense for the three months ended March 31, 2020 and 2019 was $7.3 million and $7.6 million, respectively, primarily due to lower salaries and employee benefits in the 2020 quarter. The company’s efficiency ratio for the first quarter of 2020 was 73.0% compared to 78.1% for the same quarter of 2019.

 

•

Income tax benefit for the first quarter of 2020 was $58 thousand, reflective of an 80.6% effective income tax rate. Income tax expense for the first quarter of 2019 was $337 thousand, reflective of an 18.4% effective rate.

 

Balance Sheet

 

•

Total assets were $1.18 billion and $1.13 billion at March 31, 2020 and December 31, 2019, respectively.

 

•

Loans, net of allowance for loan losses, were $960.0 million at March 31, 2020 compared to $916.6 million at December 31, 2019, a $43.4 million increase and an annualized growth rate of 19%.

 

•

Deposits were $964.5 million at March 31, 2020 compared to $910.4 million at December 31, 2019. Noninterest-bearing demand accounts comprised 14.1% of total deposits at March 31, 2020, a decrease from 15.2% at December 31, 2019, and an increase from 13.1% at March 31, 2019.

 

•

Shareholders’ equity was $127.4 million and $126.2 million at March 31, 2020 and December 31, 2019, respectively, an increase of $1.2 million. The increase in shareholders’ equity in the first quarter of 2020 was primarily attributable to $866 thousand of net 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 $8.691 and $8.641 at March 31, 2020 and December 31, 2019, respectively.

 

•

The company made no repurchases of its common stock outstanding in the first quarter of 2020, pursuant to a share repurchase program authorized by its board of directors in the fourth quarter of 2019.

 

•

Capital ratios for Virginia Commonwealth Bank were above regulatory minimum guidelines for well-capitalized banks as of March 31, 2020 and December 31, 2019.

 

•

Annualized return on average assets for the quarters ended March 31, 2020, December 31, 2019, and March 31, 2019 was 0.00%, 0.71%, and 0.55%, respectively, while annualized return on average shareholders’ equity for the same periods was (0.04)%, 6.39%, and 5.05%, respectively.  

Asset Quality

 

•

Loans in industry segments highly affected by the COVID-19 pandemic, which include primarily hotels, restaurants, churches, and assisted-living facilities, were subject to risk rating downgrades as of March 31, 2020. Loans to borrowers in these segments totaled approximately $88.5 million, or 9% of the company’s gross loans as of March 31, 2020.

 

•

Nonperforming assets were $7.1 million, or 0.60% of total assets, as of March 31, 2020, compared to $6.4 million, or 0.56% of total assets, as of December 31, 2019, and $9.1 million, or 0.82% of total assets, as of March 31, 2019. The company previously reported it participated in a loan to a professional service firm that filed for Chapter 7 bankruptcy in the third quarter of 2019. As of March 31, 2020, the loan had been resolved and the company collected all principal and interest to which it was due.

 

•

The ratio of allowance for loan losses to total gross loans was 1.05%, 0.82%, and 0.86% at March 31, 2020, December 31, 2019, and March 31, 2019, respectively. The 23 basis point increase in the ratio of allowance for loan losses to total gross

 

loans for the first quarter of 2020 was primarily due to a qualitative loss factor applied to the majority of the company’s loan portfolio for negative economic implications, such as unemployment, from the COVID-19 pandemic. The company’s allowance for loan losses does not include discounts recorded on loans acquired in the company’s 2017 merger with Virginia BanCorp, Inc., which were $1.8 million, $1.9 million, and $3.5 million as of March 31, 2020, December 31, 2019, and March 31, 2019, respectively.

Outlook

Greene concluded: “At the end of March, our asset quality measures would not suggest we are facing the credit challenges that likely lie ahead. This level of economic slow-down supported by significant government intervention is unprecedented in recent history. How long the slow-down will last is on all of our minds and recent discussions of getting the country back to work are encouraging. As we have supported our employees, customers and communities during this difficult time, we are cognizant that we too have a business to manage. Having a strong balance sheet, healthy capital levels, and good liquidity are key as we move through the next several 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 18 banking offices, including one loan production office, located throughout the greater Richmond region of Virginia, the Northern Neck region of Virginia, Middlesex County, and the Hampton Roads region of Virginia, 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: the effect of the COVID-19 pandemic, including its potential adverse effect on economic conditions, and the company’s employees, customers, loan losses, and financial performance; 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)

 

March 31, 2020

 

 

December 31, 2019 (1)

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

9,976

 

 

$

6,096

 

Interest-earning deposits

 

 

44,711

 

 

 

34,358

 

Federal funds sold

 

 

1,319

 

 

 

1,359

 

Certificates of deposit

 

 

2,754

 

 

 

2,754

 

Available-for-sale securities, at fair value

 

 

94,618

 

 

 

99,454

 

Restricted securities

 

 

5,752

 

 

 

5,706

 

Loans receivable, net of allowance for loan losses of $10,172 and

   $7,562, respectively

 

 

960,023

 

 

 

916,628

 

Loans held for sale

 

 

747

 

 

 

1,231

 

Premises and equipment, net

 

 

19,462

 

 

 

20,141

 

Accrued interest receivable

 

 

3,139

 

 

 

3,035

 

Other real estate owned, net

 

 

1,679

 

 

 

1,916

 

Bank owned life insurance

 

 

19,870

 

 

 

19,752

 

Goodwill

 

 

10,374

 

 

 

10,374

 

Mortgage servicing rights

 

 

774

 

 

 

935

 

Core deposit intangible

 

 

1,369

 

 

 

1,518

 

Other assets

 

 

6,986

 

 

 

6,666

 

Total assets

 

$

1,183,553

 

 

$

1,131,923

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

$

136,437

 

 

$

137,933

 

Savings and interest-bearing demand deposits

 

 

394,637

 

 

 

382,607

 

Time deposits

 

 

433,393

 

 

 

389,900

 

Total deposits

 

 

964,467

 

 

 

910,440

 

 

 

 

 

 

 

 

 

 

Securities sold under repurchase agreements

 

 

3,284

 

 

 

6,525

 

Federal Home Loan Bank advances

 

 

45,000

 

 

 

45,000

 

Subordinated notes, net of unamortized issuance costs

 

 

31,029

 

 

 

31,001

 

Other liabilities

 

 

12,371

 

 

 

12,772

 

Total liabilities

 

 

1,056,151

 

 

 

1,005,738

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

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

   outstanding - 13,346,789 and 13,261,801 shares, respectively) (2)

 

 

66,734

 

 

 

66,309

 

Additional paid-in capital

 

 

36,536

 

 

 

36,658

 

Unearned employee stock ownership plan shares

 

 

(1,463

)

 

 

(1,525

)

Retained earnings

 

 

24,646

 

 

 

24,660

 

Accumulated other comprehensive income, net

 

 

949

 

 

 

83

 

Total shareholders' equity

 

 

127,402

 

 

 

126,185

 

Total liabilities and shareholders' equity

 

$

1,183,553

 

 

$

1,131,923

 

 

(1) Derived from audited December 31, 2019 Consolidated Financial Statements.

(2) Preferred stock is authorized; however, none was outstanding as of March 31, 2020 and December 31, 2019.

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, 2020

 

 

December 31, 2019

 

 

March 31, 2019

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

11,352

 

 

$

12,149

 

 

$

11,461

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

652

 

 

 

573

 

 

 

595

 

Tax-exempt

 

 

94

 

 

 

98

 

 

 

118

 

Federal funds sold

 

 

2

 

 

 

12

 

 

 

7

 

Interest-earning deposit accounts

 

 

104

 

 

 

149

 

 

 

135

 

Certificates of deposit

 

 

14

 

 

 

16

 

 

 

20

 

Total interest income

 

 

12,218

 

 

 

12,997

 

 

 

12,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,848

 

 

 

3,056

 

 

 

2,809

 

Securities sold under repurchase agreements

 

 

2

 

 

 

3

 

 

 

3

 

Subordinated notes and other borrowings

 

 

512

 

 

 

494

 

 

 

137

 

Federal Home Loan Bank advances

 

 

234

 

 

 

301

 

 

 

704

 

Total interest expense

 

 

3,596

 

 

 

3,854

 

 

 

3,653

 

Net interest income

 

 

8,622

 

 

 

9,143

 

 

 

8,683

 

Provision for loan losses

 

 

2,777

 

 

 

311

 

 

 

314

 

Net interest income after provision for loan losses

 

 

5,845

 

 

 

8,832

 

 

 

8,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Trust management

 

 

193

 

 

 

209

 

 

 

214

 

Service charges and fees on deposit accounts

 

 

236

 

 

 

250

 

 

 

238

 

Wealth management

 

 

247

 

 

 

254

 

 

 

206

 

Interchange fees, net

 

 

98

 

 

 

108

 

 

 

101

 

Other service charges and fees

 

 

33

 

 

 

27

 

 

 

29

 

Secondary market sales and servicing

 

 

202

 

 

 

309

 

 

 

71

 

Increase in cash surrender value of bank owned life insurance

 

 

118

 

 

 

119

 

 

 

120

 

Net gains on sales and calls of available-for-sale securities

 

 

26

 

 

 

—

 

 

 

—

 

Net losses on disposition of other assets

 

 

(7

)

 

 

(1

)

 

 

(1

)

Net (losses) gains on rabbi trust assets

 

 

(263

)

 

 

62

 

 

 

90

 

Referral fees

 

 

471

 

 

 

—

 

 

 

—

 

Other

 

 

37

 

 

 

36

 

 

 

22

 

Total noninterest income

 

 

1,391

 

 

 

1,373

 

 

 

1,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,628

 

 

 

4,065

 

 

 

4,001

 

Occupancy

 

 

751

 

 

 

809

 

 

 

868

 

Data processing

 

 

537

 

 

 

530

 

 

 

588

 

Bank franchise tax

 

 

256

 

 

 

209

 

 

 

216

 

Telecommunications and other technology

 

 

358

 

 

 

313

 

 

 

207

 

FDIC assessments

 

 

148

 

 

 

112

 

 

 

216

 

Foreclosed property

 

 

7

 

 

 

35

 

 

 

43

 

Consulting

 

 

71

 

 

 

108

 

 

 

115

 

Advertising and marketing

 

 

67

 

 

 

84

 

 

 

67

 

Directors' fees

 

 

192

 

 

 

153

 

 

 

164

 

Audit and accounting

 

 

140

 

 

 

236

 

 

 

204

 

Legal

 

 

191

 

 

 

69

 

 

 

83

 

Core deposit intangible amortization

 

 

149

 

 

 

157

 

 

 

180

 

Net other real estate owned losses (gains)

 

 

—

 

 

 

19

 

 

 

(6

)

Other

 

 

813

 

 

 

835

 

 

 

684

 

Total noninterest expense

 

 

7,308

 

 

 

7,734

 

 

 

7,630

 

(Loss) income before income taxes

 

 

(72

)

 

 

2,471

 

 

 

1,829

 

Income tax (benefit) expense

 

 

(58

)

 

 

469

 

 

 

337

 

Net (loss) income

 

$

(14

)

 

$

2,002

 

 

$

1,492

 

Basic and diluted earnings per share

 

$

—

 

 

$

0.15

 

 

$

0.11

 

 

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the

 

 

 

As of and for the Three Months Ended

 

 

Year Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

(Dollars in thousands, except per share amounts)

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

Select Consolidated Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,183,553

 

 

$

1,131,923

 

 

$

1,112,219

 

 

$

1,094,260

 

 

$

1,103,840

 

 

 

 

 

 

 

 

 

Cash, interest-earning deposits and federal funds sold

 

 

56,006

 

 

 

41,813

 

 

 

31,405

 

 

 

24,604

 

 

 

30,677

 

 

 

 

 

 

 

 

 

Available-for-sale securities, at fair value

 

 

94,618

 

 

 

99,454

 

 

 

80,748

 

 

 

81,169

 

 

 

82,030

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans on real estate

 

 

762,404

 

 

 

730,788

 

 

 

731,280

 

 

 

713,247

 

 

 

725,494

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

198,278

 

 

 

181,730

 

 

 

186,281

 

 

 

187,531

 

 

 

173,360

 

 

 

 

 

 

 

 

 

Consumer

 

 

9,846

 

 

 

11,985

 

 

 

14,471

 

 

 

16,889

 

 

 

20,095

 

 

 

 

 

 

 

 

 

Loans receivable

 

 

970,528

 

 

 

924,503

 

 

 

932,032

 

 

 

917,667

 

 

 

918,949

 

 

 

 

 

 

 

 

 

Unamortized net deferred loan fees

 

 

(333

)

 

 

(313

)

 

 

(269

)

 

 

(275

)

 

 

(329

)

 

 

 

 

 

 

 

 

Allowance for loan losses (ALL)

 

 

(10,172

)

 

 

(7,562

)

 

 

(7,495

)

 

 

(7,479

)

 

 

(7,858

)

 

 

 

 

 

 

 

 

Net loans

 

 

960,023

 

 

 

916,628

 

 

 

924,268

 

 

 

909,913

 

 

 

910,762

 

 

 

 

 

 

 

 

 

Loans held for sale

 

 

747

 

 

 

1,231

 

 

 

268

 

 

 

593

 

 

 

—

 

 

 

 

 

 

 

 

 

Other real estate owned, net

 

 

1,679

 

 

 

1,916

 

 

 

2,178

 

 

 

3,168

 

 

 

3,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

1,056,151

 

 

$

1,005,738

 

 

$

987,362

 

 

$

971,643

 

 

$

983,903

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

136,437

 

 

 

137,933

 

 

 

124,670

 

 

 

116,229

 

 

 

112,315

 

 

 

 

 

 

 

 

 

Savings and interest-bearing demand deposits

 

 

394,637

 

 

 

382,607

 

 

 

372,404

 

 

 

374,175

 

 

 

371,587

 

 

 

 

 

 

 

 

 

Time deposits

 

 

433,393

 

 

 

389,900

 

 

 

396,614

 

 

 

385,218

 

 

 

372,751

 

 

 

 

 

 

 

 

 

Total deposits

 

 

964,467

 

 

 

910,440

 

 

 

893,688

 

 

 

875,622

 

 

 

856,653

 

 

 

 

 

 

 

 

 

Securities sold under repurchase agreements

 

 

3,284

 

 

 

6,525

 

 

 

6,323

 

 

 

6,983

 

 

 

7,220

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

 

45,000

 

 

 

45,000

 

 

 

68,000

 

 

 

70,000

 

 

 

100,000

 

 

 

 

 

 

 

 

 

Subordinated notes, net of unamortized issuance costs

 

 

31,029

 

 

 

31,001

 

 

 

6,906

 

 

 

6,902

 

 

 

6,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

127,402

 

 

 

126,185

 

 

 

124,857

 

 

 

122,617

 

 

 

119,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

12,218

 

 

$

12,997

 

 

$

12,765

 

 

$

12,321

 

 

$

12,336

 

 

$

50,418

 

 

$

43,803

 

Interest expense

 

 

3,596

 

 

 

3,854

 

 

 

3,734

 

 

 

3,844

 

 

 

3,653

 

 

 

15,085

 

 

 

10,225

 

Net interest income

 

 

8,622

 

 

 

9,143

 

 

 

9,031

 

 

 

8,477

 

 

 

8,683

 

 

 

35,333

 

 

 

33,578

 

Provision for loan losses

 

 

2,777

 

 

 

311

 

 

 

495

 

 

 

62

 

 

 

314

 

 

 

1,182

 

 

 

1,351

 

Noninterest income

 

 

1,391

 

 

 

1,373

 

 

 

1,200

 

 

 

1,295

 

 

 

1,090

 

 

 

4,958

 

 

 

4,303

 

Noninterest expense

 

 

7,308

 

 

 

7,734

 

 

 

7,447

 

 

 

7,592

 

 

 

7,630

 

 

 

30,402

 

 

 

32,119

 

(Loss) income before income taxes

 

 

(72

)

 

 

2,471

 

 

 

2,289

 

 

 

2,118

 

 

 

1,829

 

 

 

8,707

 

 

 

4,411

 

Income tax (benefit) expense

 

 

(58

)

 

 

469

 

 

 

448

 

 

 

395

 

 

 

337

 

 

 

1,649

 

 

 

533

 

Net (loss) income

 

$

(14

)

 

$

2,002

 

 

$

1,841

 

 

$

1,723

 

 

$

1,492

 

 

$

7,058

 

 

$

3,878

 

 

BAY BANKS OF VIRGINIA, INC.

Supplemental Financial Data (Unaudited) – Continued

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the

 

 

 

As of and for the Three Months Ended

 

 

Year Ended

 

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

December 31,

 

(Dollars in thousands, except per share amounts)

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

Basic earnings per share

 

$

—

 

 

$

0.15

 

 

$

0.14

 

 

$

0.13

 

 

$

0.11

 

 

$

0.54

 

 

$

0.30

 

Diluted earnings per share

 

 

—

 

 

 

0.15

 

 

 

0.14

 

 

 

0.13

 

 

 

0.11

 

 

 

0.54

 

 

 

0.30

 

Book value per share

 

 

9.55

 

 

 

9.51

 

 

 

9.36

 

 

 

9.20

 

 

 

9.01

 

 

 

 

 

 

 

 

 

Tangible book value per share (1)

 

 

8.69

 

 

 

8.64

 

 

 

8.49

 

 

 

8.31