ASHEVILLE,
N.C., July 28, 2014
/PRNewswire/ -- ASB Bancorp, Inc. (the "Company") (NASDAQ GM:
ASBB), the holding company for Asheville Savings Bank, S.S.B. (the
"Bank"), announced today its preliminary operating results for the
three- and six-month periods ended June 30,
2014. The Company reported net income of $941,000, or $0.21
per diluted share, for the quarter ended June 30, 2014, compared to a net loss of
$206,000, or $0.04 per diluted share, for the same quarter of
2013. The second quarter of 2013 included an additional
$1.2 million pre-tax write-down of
the Bank's largest foreclosed property, which significantly
influenced quarterly year-over-year net income and noninterest
expense comparisons. For the six months ended June 30, 2014, the Company reported net income of
$1.3 million, or $0.30 per diluted share, up 151.9%, compared to
net income of $534,000, or
$0.11 per diluted share, for the same
period of 2013.
![ASB Bancorp Logo. ASB Bancorp Logo.](http://photos.prnewswire.com/prnvar/20111031/CL96775LOGO)
Suzanne DeFerie, President
and CEO, commented: "The Company's latest quarterly financial
results were positively impacted by a $1.3 million reversal of the Company's provision
for loan losses due to improved asset quality. Asset
quality was also improved during the quarter by the bulk sale of
two floors of residential condominium units of the
Company's largest longstanding foreclosed property.
"We also demonstrated gains in core deposit growth, and in
particular lower-cost core deposits, utilized to fund
our lending activity and reduce the Company's cost of funds.
Partially reflecting core deposit gains, our net
interest margin expanded to 2.82% in the recent quarter compared to
2.65% in the second quarter of 2013. Loans receivable
increased 5.1% since the beginning of the year, and new lending
activity includes a mix of retail and commercial
loans. Our particular focus on commercial lending continues to
produce positive results and contributed to
year-over-year quarterly growth in our interest income from loans.
We are attending to asset quality, while maintaining a
clear focus on prudent growth. We have also been
focused on reducing exposure to interest rate risk and are
better positioning the Company to withstand a rising
interest rate environment."
2014 Second Quarter Highlights
- Net income for the second quarter of 2014 was
$941,000, or $0.21 per diluted share, compared to
a net loss of $206,000, or
$0.04 per diluted share, for the
second quarter of 2013.
- Net interest income before loan loss provision increased
6.7% to $4.9 million for the
three months ended June 30,
2014 from $4.6 million for the
three months ended June 30,
2013.
- Interest income from loans increased 7.1% in the second
quarter of 2014 compared to the second quarter of
2013, primarily reflecting a $54.6
million increase in average loan balances when
comparing the two quarters.
- The Company reduced interest expense by 19.4% in the
second quarter of 2014 compared to the second quarter
of 2013.
- Net interest margin improved to 2.82% for the second
quarter of 2014 compared to 2.65% for the second
quarter of 2013.
- The Company recorded a $1.4
million net recovery of loan losses in the second quarter
of 2014. The allowance for loan losses declined to
1.22% of total loans at June 30,
2014, from 1.63% at December 31, 2013, and the allowance for loan
losses was 283.7% of nonperforming loans at
June 30, 2014 compared to 610.4% at
December 31, 2013.
- Total ending loan balances increased $16.6 million, or 3.6%, to $472.0 million in the second quarter
of 2014. Loans increased $22.8
million, or 5.1%, since December 31,
2013 and $54.2 million, or 13.0%, since
June 30, 2013 as new loan
originations exceeded loan repayments, prepayments and
foreclosures.
- Noninterest expenses decreased to $6.4 million for the second quarter of 2014 from
$7.5 million for the second quarter of 2013, primarily
due to the 2013 write-down on foreclosed properties
related to residential condominium units of a mixed-use property.
These residential condominium units were sold during
the second quarter of 2014.
- Delinquent and nonperforming loans remained low at 0.48%
and 0.43%, respectively, of total loans at
June 30, 2014, compared to 0.48% and
0.27%, respectively, of total loans at December 31, 2013.
- Nonperforming assets, including foreclosed properties,
decreased to 1.64% of total assets at June 30, 2014 from 2.10% of total assets at
December 31, 2013 and 2.42% of total
assets at June 30, 2013.
The ratio of nonperforming assets to total assets has improved in
each of the last four quarters.
- Core deposits, which exclude certificates of deposit,
increased $26.5 million, or 6.5%,
since December 31, 2013
and $30.4 million, or 7.6%, since
June 30, 2013.
Noninterest-bearing deposits have increased
$14.8 million since December 31, 2013.
- Book value per share increased to $21.06 during the second quarter of 2014 from
$20.53
at March 31, 2014
and $20.06 at December 31, 2013.
- Capital remained strong with consolidated regulatory
capital ratios of 14.16% Tier 1 leverage capital,
23.69% Tier 1 risk-based capital and 24.94% total risk-based
capital.
DeFerie commented: "Our improving core performance and
asset quality reflect ongoing initiatives to increase
shareholder value through prudent loan, core deposit, and fee
income growth. We continue to build a more diversified
loan portfolio, while diligently managing interest expense and
strengthening asset quality. As disclosed previously,
we used a portion of our excess capital to repurchase shares of our
common stock, both through open market and privately
negotiated transactions. Going forward, we are excited about
the potential for increasing net income as we execute our
strategic initiatives to build shareholder value."
Income Statement Analysis
Net Interest Income. Net interest income
increased by $305,000, or 6.7%, to
$4.9 million for the three
months ended June 30, 2014
compared to $4.6 million for the
three months ended June 30, 2013.
Interest expense decreased $213,000, or 19.4%, to $886,000 for the three months ended June 30, 2014 from $1.1 million for the three months ended
June 30, 2013, primarily due to a 14
basis point reduction in the average rate paid on
interest-bearing liabilities and a decrease of $15.1 million in the average balance of
total interest-bearing liabilities. Total interest and
dividend income increased $92,000, or
1.6%, to $5.8 million for
the three months ended June 30,
2014 from $5.7 million for the
three months ended June 30,
2013, primarily as a result of an increase of
$54.6 million in average loan
balances, which was partially offset by a decrease of
25 basis points in the average yield on loans. The average balance
of mortgage-backed and similar securities decreased
$92.0 million for the three months
ended June 30, 2014, which was
partially offset by an increase of 14 basis points in
the average yield compared to the same period of 2013.
"Although interest income grew year-over-year in the
second quarter of 2014, it did not fully reflect interest
income contributions from a meaningful number of commercial
loans that closed late in the second quarter of 2014,"
DeFerie explained. "We believe we have a strong loan pipeline,
giving us confidence in our ability to grow interest
income as we move through the second half of 2014."
Net interest income increased by $530,000, or 5.8%, to $9.7
million for the six months ended June
30, 2014 compared to $9.2 million for the six months ended
June 30, 2013. Interest expense
decreased $443,000, or
20.0%, to $1.8 million for the
six months ended June 30, 2014 from
$2.2 million for the six months
ended June 30, 2013,
primarily due to a 17 basis point reduction in the average rate
paid on interest-bearing deposits and a decrease of
$14.3 million in the average balance
of total interest-bearing deposits. The lower cost of
interest-bearing deposits was primarily attributable to an average
rate reduction of 23 basis points on certificates of
deposit, as well as a lower average balance of certificates of
deposit, and reductions in average rates paid on NOW
and money market accounts, which were partially offset by increases
in the average balances of NOW, money market and
savings accounts as the Company continued its focus on
core deposit growth, from which it excludes certificates of
deposit. Total interest and dividend income increased
$87,000 to $11.5 million for the six months ended
June 30, 2014 compared to
$11.4 million for the
six months ended June 30, 2013. The
average balance of total interest-earning assets decreased
$7.1 million, which was partially offset by a 6 basis
point increase in the average yields on interest-earning
assets. Interest income on loans increased
$655,000, primarily attributable to a
$54.8 million increase in the
average balance of loans, partially offset by a 27
basis point reduction in the yield earned on loans in 2014.
Interest on securities decreased $625,000 in 2014 primarily as a result of an
$86.4 million decrease in the
average balance of mortgage-backed and similar
securities, coupled with a 2 basis point reduction in yield earned
on these securities.
DeFerie commented: "To fund anticipated lending activity,
the Company liquidated certain investment securities
and increased levels of available cash. While the timing on the
closing of some loans has been slower than expected,
we expect to deploy more of the excess cash for lending in the
coming periods, and we believe this will further
expand the Company's net interest margin and improve
profitability."
Noninterest Income. Noninterest income
decreased $968,000, or 38.4%, to
$1.6 million for the
three months ended June
30, 2014 from $2.5 million for
the three months ended June 30, 2013.
Factors that contributed to the decrease in
noninterest income during the 2014 period were decreases of
$603,000 in gains from
the sale of investment securities, $347,000 in mortgage banking income and
$41,000 in deposit and
other service charge income, which were partially offset by an
increase of $29,000 in debit
card services. The decrease in investment security
gains resulted primarily from sales of fewer investment
securities at smaller net gains to fund loan growth, and the
decrease in mortgage banking income was attributable
to lower volumes of mortgage loans sold. The decrease in deposit
and other service charge income was primarily the
result of lower ATM and deposit overdraft fees.
Noninterest income decreased $1.4
million to $3.0 million for
the six months ended June 30, 2014
from $4.4 million for the six months ended
June 30, 2013. Factors that
contributed to the decrease in noninterest income
during the 2014 period were decreases of $715,000 in mortgage banking income, $482,000 in securities gains,
$174,000 in other income from an
investment in a Small Business Investment Company and
$86,000 in deposit fees, which
were partially offset by $48,000 in
higher income from debit card services. The decrease
in mortgage banking income was attributable to lower volumes of
mortgage loans sold.
Noninterest Expenses. Noninterest
expenses decreased $1.2 million, or
15.8%, to $6.4 million for the
three months ended June 30,
2014 from $7.5 million for the
three months ended June 30, 2013. The
decrease was primarily attributable to decreases of
$1.2 million in foreclosed property
expenses, $67,000 in
advertising and $54,000 in
occupancy expenses, which were partially offset by increases of
$168,000 in salaries and
employee benefits and $58,000 in
professional and outside services. The increase in
salaries and benefits was primarily due to a
$380,000 additional expense for
accelerated vesting related to the disability of an
executive officer participating in the Bank's equity incentive
plan, which was partially offset by a net decrease of
$212,000 in other employee
compensation expenses. The decrease in foreclosed
property expenses related to a $1.2
million write-down in the prior year on the Bank's largest
foreclosed property comprised of condominium units
compared to a write-down of $133,000
in 2014. The residential condominium units of
this property were sold during the second quarter of
2014.
Noninterest expenses decreased $651,000, or 5.1%, to $12.2 million for the six months ended June
30, 2014 from $12.9
million for the six months ended June
30, 2013. The lower 2014 noninterest expenses
primarily reflected a decrease in foreclosed property
expenses of $1.2 million compared to
the first six months of 2013, which was partially
offset by higher compensation expenses. As discussed
above, compensation expenses in the first six months
of 2014 included an increase of $380,000 in equity incentive plan
expenses related to accelerated vesting for disability and an
increase of $69,000 in other
employee benefit plan expenses, which were partially
offset by a decrease of $285,000 in
employee compensation expenses and expense reductions
in most other categories. Compensation expenses in the first six
months of 2013 included a $499,000 one-time credit to pension expense
resulting from the curtailment of benefits for future
service.
Balance Sheet Review
Assets. Total assets increased
$21.5 million, or 2.9%, to
$754.5 million at June 30, 2014 from $733.0 million at
December 31, 2013. Cash and cash
equivalents increased $41.0 million,
or 77.7%, to $93.8 million
at June 30, 2014 from
$52.8 million at December 31, 2013 in anticipation of loan growth.
Investment securities decreased $35.7 million, or 18.8%, to $153.9 million at June 30,
2014 from $189.6
million at December 31,
2013, primarily due to the sale of investment securities to
fund anticipated loan growth. Loans receivable, net of
deferred fees, increased $22.8
million, or 5.1%, to $472.0
million at June 30,
2014 from $449.2
million at December 31, 2013
as new loan originations exceeded loan repayments,
prepayments and foreclosures.
Liabilities. Total deposits increased
$19.9 million, or 3.5%, to
$592.7 million at June 30, 2014 from $572.8 million at
December 31, 2013. During the six
months ended June 30, 2014, the
Company continued its focus on core deposit growth,
from which it excludes certificates of deposit. Core deposits
increased $26.5
million, or 6.5%, to $432.2
million at June 30, 2014 from
$405.7 million at December 31, 2013.
Commercial checking and money market accounts increased
$15.9 million to $111.1 million at June 30, 2014 from
$95.2 million at December 31, 2013, reflecting expanded sources of
lower cost funding. The addition of deposit
relationships in conjunction with new commercial loans
significantly contributed to this increase and
reflects a commitment to establishing diversified relationships
with business clients.
Over the same period, certificates of deposit decreased
$6.6 million, or 3.9%, to
$160.5 million at June 30,
2014 from $167.1 million at
December 31, 2013. Accounts
payable and other liabilities increased $1.3 million,
or 15.5%, to $9.7 million at
June 30, 2014 from $8.4 million at December
31, 2013.
Asset Quality
Provision for Loan Losses. The
provision for loan losses was a credit of $(1.4) million for the three months
ended June 30, 2014 compared to a
provision expense of $16,000 for the
three months ended June
30, 2013. In the second quarter of 2014, the Bank accessed
and modified its loan loss methodology for unimpaired
commercial construction and land development, unimpaired
residential construction and land development, and
unimpaired commercial and industrial loans. This modification
resulted in further sub-segmentation of these classes
of loans and the related historical charge-off rates. The purpose
was to allocate the substantial historical charge-off
rates created by three sub-segments of these loan classes
against the significantly diminished or nonexistent current
balances within these same loan sub-segments
reflecting no continued credit exposure to the Bank.
Specifically, additional sub-segments were identified
where the Bank made (1) loans in excess of $2.5 million to construct commercial mixed-use
buildings in small communities with low population
growth, (2) speculative loans to construct 1-4 family residences
for the greater of 80% of the appraised value of the
completed residence or 100% of the actual costs of
construction, and (3) loans secured by equity securities that
do not have a readily determinable fair
value. This change in methodology resulted in a
nonrecurring reduction of approximately $1.3
million in the Bank's reserves for loans not
considered impaired in the second quarter of 2014. The
allowance for loan losses totaled $5.8 million, or 1.22% of total loans, at
June 30, 2014 compared to
$7.3 million, or 1.63% of
total loans, at December 31,
2013. The Company charged off $56,000 in loans during the three months
ended June 30, 2014
compared to $87,000 during the three
months ended June 30,
2013.
The Bank recorded a credit to its loan losses in the
amount of $(1.5) million for the six
months ended June 30,
2014 compared to a provision expense of $128,000 for the six months ended June 30, 2013. As was the case
for the second quarter of 2014, the decrease in the six-month
provision for loan losses primarily resulted from a
$1.3 million reduction in the Bank's
loan loss reserves due to a modification of its loan
loss methodology for unimpaired commercial construction and land
development, unimpaired residential construction and
land development, and unimpaired commercial and industrial loans.
Charge-offs were $150,000 for the first six months of 2014
compared to $192,000 for the first
six months of 2013.
Nonperforming assets. Nonperforming
assets totaled $12.4 million, or
1.64% of total assets, at June 30, 2014, compared
to $15.4 million, or 2.10% of total
assets, at December 31, 2013.
Nonperforming assets included $2.0 million in nonperforming loans and
$10.4 million in foreclosed real
estate at June 30, 2014
compared to $1.2 million and
$14.2 million, respectively, at
December 31, 2013.
Nonperforming loans increased $837,000 to $2.0
million, or 0.43% of total loans, at June 30, 2014 from $1.2 million, or 0.27% of total loans, at
December 31, 2013. At
June 30, 2014, nonperforming
loans included seven residential mortgage loans that
totaled $627,000, two commercial
mortgage loans that totaled $914,000, three revolving home equity loans that
totaled $144,000 and five commercial
and industrial loans that totaled $342,000. As of June
30, 2014, the nonperforming loans had specific reserves
totaling $132,000.
Foreclosed real estate at June 30,
2014 included 12 properties with a total recorded amount of
$10.4 million compared
to 11 properties with a total recorded amount of $14.2 million at December
31, 2013. During the six months ended
June 30, 2014, three new properties
totaling $173,000 were added to
foreclosed real estate, while two properties totaling
$388,000 were sold. In
addition, the Bank sold 28 of its 44 units in a
mixed-use condominium complex for net proceeds of
$3.7 million. The Bank also
recorded $269,000 in
capital additions and $154,000
in loss provisions during the first six months of
2014.
The Bank's largest foreclosed property resulted from a
loan relationship that had an original purpose of
constructing a mixed-use retail, commercial office, and
residential condominium project located in western
North Carolina. As a result
of this foreclosure, the Bank acquired 44 of the 48 condominium
units in the building. Following an additional
write-down of approximately $630,000
on the loans secured by this collateral in the fourth
quarter of 2012, the Bank recorded this foreclosed property in the
amount of $9.8 million. During 2013, the Bank
recorded additional write-downs totaling $1.6 million, which resulted in an
adjusted recorded amount of $8.2
million at December 31,
2013. During the three months ended June 30,
2014, the Bank recorded an additional write-down of
$133,000 on the property and sold the
remaining 26 residential condominium units. At
June 30, 2014, the adjusted recorded
amount was $4.6 million for
the remaining 8 retail units and 8 office
units.
Share Repurchases
On January 30, 2014, the
Company's Board of Directors approved an additional 5% stock
repurchase plan. During the second quarter of 2014,
134,900 shares of common stock were repurchased at an average
cost of $18.74. On
July 18, 2014, the Company entered
into a privately negotiated stock repurchase agreement to
repurchase 392,900 shares of its common stock from one of its
large institutional shareholders for an aggregate
purchase price of $7,858,000, or
$20.00 per share. The stock
repurchased on July 18, 2014
caused the holdings of the Company's largest shareholder to
exceed 10%, so on July 24, 2014 the
Company entered into a privately negotiated stock
repurchase agreement to repurchase 60,000 shares of its
common stock from its largest shareholder in order to
reduce the shareholder's position to an amount below
10%.
Outlook
DeFerie concluded: "We are pleased with the tremendous
gains we have made to improve the Company's balance
sheet. The ongoing strength in our loan portfolio, and asset
quality improvements, should enable us to further
reduce the cost of managing non-performing assets. We believe
this will have a direct positive impact on future
earnings and the Company's ability to deliver increasing value to
shareholders. Our utmost focus remains on
enhancing franchise value to benefit our shareholders."
Profile
The Bank is a North
Carolina chartered stock savings bank offering traditional
financial services through thirteen full-service
banking centers located in Buncombe, Madison, McDowell, Henderson, and Transylvania counties in Western North Carolina and a loan production
office in Charlotte, North
Carolina. Originally chartered in 1936 and
headquartered in Asheville, North
Carolina, the Bank is locally managed with a
focus on fostering strong relationships with its customers, its
employees and the communities it serves. The
Bank was recognized as a 2013 North Carolina Best Employer from
Business North Carolina
magazine and the 2013 #1 Best Bank and #1 Best Bank Services
for Small Business from Mountain Xpress
newspaper.
This news release, as well as other written communications
made from time to time by the Company and its
subsidiaries and oral communications made from time to time
by authorized officers of the Company, may contain
statements relating to the future results of the Company (including
certain projections and business trends) that are
considered "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 (the PSLRA).
Such forward-looking statements may be identified by the use of
such words as "believe," "expect," "anticipate,"
"should," "planned," "estimated," "intend" and "potential."
For these statements, the Company claims the
protection of the safe harbor for forward-looking statements
contained in the PSLRA.
The Company cautions you that a number of important
factors could cause actual results to differ materially
from those currently anticipated in any forward-looking
statement. Such factors include, but are not limited
to: prevailing economic and geopolitical conditions; changes
in interest rates, loan demand, real estate
values and competition; changes in accounting
principles, policies, and guidelines; changes in any applicable
law, rule, regulation or practice with respect to tax
or legal issues; and other economic, competitive,
governmental, regulatory and technological factors affecting
the Company's operations, pricing, products and
services and other factors described in the Company's Annual
Reports on Form 10-K and Quarterly Reports on Form
10-Q as filed with the Securities and Exchange Commission. The
forward-looking statements are made as of the date of
this release, and, except as may be required by applicable law
or regulation, the Company assumes no obligation to
update the forward-looking statements or to update the
reasons why actual results could differ from those projected
in the forward-looking statements.
Selected Financial
Condition Data
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
(dollars in
thousands)
|
2014
|
|
2013*
|
|
% change
|
|
|
|
|
|
|
Total
assets
|
$ 754,496
|
|
$ 733,035
|
|
2.9%
|
Cash and cash
equivalents
|
93,825
|
|
52,791
|
|
77.7%
|
Investment
securities
|
153,921
|
|
189,570
|
|
-18.8%
|
Loans receivable, net
of deferred fees
|
472,012
|
|
449,234
|
|
5.1%
|
Allowance for loan
losses
|
(5,770)
|
|
(7,307)
|
|
21.0%
|
Deposits
|
592,683
|
|
572,786
|
|
3.5%
|
Core
deposits**
|
432,201
|
|
405,722
|
|
6.5%
|
FHLB
advances
|
50,000
|
|
50,000
|
|
0.0%
|
Accounts payable and
other liabilities
|
9,695
|
|
8,374
|
|
15.8%
|
Total
equity
|
101,727
|
|
101,088
|
|
0.6%
|
* Derived from
audited consolidated financial statements.
|
** Core deposits are
defined as total deposits excluding certificates of
deposit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Operating
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands,
|
Three Months
Ended
|
Six Months
Ended
|
except per share
data)
|
June
30,
|
|
June
30,
|
|
|
2014
|
|
2013
|
|
% change
|
|
2014
|
|
2013
|
|
% change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and
|
|
|
|
|
|
|
|
|
|
|
|
dividend
income
|
$ 5,771
|
|
$ 5,679
|
|
1.6%
|
|
$ 11,512
|
|
$ 11,425
|
|
0.8%
|
Interest
expense
|
886
|
|
1,099
|
|
-19.4%
|
|
1,773
|
|
2,216
|
|
-20.0%
|
Net interest
income
|
4,885
|
|
4,580
|
|
6.7%
|
|
9,739
|
|
9,209
|
|
5.8%
|
Provision
for
|
|
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
(1,390)
|
|
16
|
|
n/m
|
|
(1,458)
|
|
128
|
|
n/m
|
Net interest
income
|
|
|
|
|
|
|
|
|
|
|
|
after
provision for
|
|
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
6,275
|
|
4,564
|
|
37.5%
|
|
11,197
|
|
9,081
|
|
23.3%
|
Noninterest
income
|
1,554
|
|
2,522
|
|
-38.4%
|
|
3,010
|
|
4,410
|
|
-31.7%
|
Noninterest
expenses
|
6,350
|
|
7,541
|
|
-15.8%
|
|
12,210
|
|
12,861
|
|
-5.1%
|
Income (loss)
before
|
|
|
|
|
|
|
|
|
|
|
|
income
tax
|
|
|
|
|
|
|
|
|
|
|
|
provision
(benefit)
|
1,479
|
|
(455)
|
|
425.1%
|
|
1,997
|
|
630
|
|
217.0%
|
Income tax
|
|
|
|
|
|
|
|
|
|
|
|
provision
(benefit)
|
538
|
|
(249)
|
|
316.1%
|
|
652
|
|
96
|
|
579.2%
|
Net income
(loss)
|
$ 941
|
|
$ (206)
|
|
556.8%
|
|
$ 1,345
|
|
$ 534
|
|
151.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per
|
|
|
|
|
|
|
|
|
|
|
|
common
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.22
|
|
$ (0.04)
|
|
650.0%
|
|
$ 0.31
|
|
$ 0.11
|
|
181.8%
|
Diluted
|
|
$ 0.21
|
|
$ (0.04)
|
|
625.0%
|
|
$ 0.30
|
|
$ 0.11
|
|
172.7%
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
4,341,124
|
|
4,683,950
|
|
-7.3%
|
|
4,400,990
|
|
4,801,789
|
|
-8.3%
|
Diluted
|
|
4,382,660
|
|
4,683,950
|
|
-6.4%
|
|
4,440,259
|
|
4,801,888
|
|
-7.5%
|
Ending shares
outstanding
|
4,831,311
|
|
5,284,323
|
|
-8.6%
|
|
4,831,311
|
|
5,284,323
|
|
-8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances and Yields/Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30,
|
|
2014
|
|
2013
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
(dollars in
thousands)
|
Balance
|
|
Cost
|
|
Balance
|
|
Cost
|
|
|
|
|
|
|
|
|
Loans
receivable
|
$ 463,251
|
|
4.35%
|
|
$ 408,688
|
|
4.60%
|
Investment
securities, including tax-exempt (1)
|
153,487
|
|
1.99%
|
|
258,407
|
|
1.63%
|
Other
interest-earning assets
|
93,543
|
|
0.40%
|
|
45,102
|
|
0.52%
|
Total
interest-earning assets (1)
|
710,281
|
|
3.32%
|
|
712,197
|
|
3.27%
|
Interest-bearing
deposits
|
502,168
|
|
0.32%
|
|
517,200
|
|
0.47%
|
Federal Home Loan
Bank advances
|
50,000
|
|
3.93%
|
|
50,000
|
|
3.92%
|
Total
interest-bearing liabilities
|
552,790
|
|
0.64%
|
|
567,842
|
|
0.78%
|
|
|
|
|
|
|
|
|
Interest rate spread
(1)
|
|
|
2.68%
|
|
|
|
2.49%
|
Net interest margin
(1)
|
|
|
2.82%
|
|
|
|
2.65%
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
2014
|
|
2013
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
(dollars in
thousands)
|
Balance
|
|
Cost
|
|
Balance
|
|
Cost
|
|
|
|
|
|
|
|
|
Loans
receivable
|
$ 458,960
|
|
4.37%
|
|
$ 404,192
|
|
4.64%
|
Investment
securities, including tax-exempt (1)
|
162,571
|
|
2.01%
|
|
259,416
|
|
1.74%
|
Other
interest-earning assets
|
80,902
|
|
0.44%
|
|
45,939
|
|
0.53%
|
Total
interest-earning assets (1)
|
702,433
|
|
3.37%
|
|
709,547
|
|
3.31%
|
Interest-bearing
deposits
|
500,614
|
|
0.32%
|
|
514,915
|
|
0.49%
|
Federal Home Loan
Bank advances
|
50,000
|
|
3.93%
|
|
50,000
|
|
3.92%
|
Total
interest-bearing liabilities
|
551,367
|
|
0.65%
|
|
565,550
|
|
0.79%
|
|
|
|
|
|
|
|
|
Interest rate spread
(1)
|
|
|
2.72%
|
|
|
|
2.52%
|
Net interest margin
(1)
|
|
|
2.86%
|
|
|
|
2.68%
|
|
|
|
|
|
|
|
|
(1) Yields on
tax-exempt securities have been included on a tax-equivalent basis
using a 34% federal marginal tax rate.
|
|
|
|
|
|
|
|
|
Selected Asset
Quality Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
Allowance for Loan
Losses
|
June
30,
|
|
June
30,
|
(dollars in
thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses, beginning of period
|
$ 7,189
|
|
$ 8,553
|
|
$ 7,307
|
|
$ 8,513
|
Provision for
(recovery of) loan losses
|
(1,390)
|
|
16
|
|
(1,458)
|
|
128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs
|
|
|
|
|
(56)
|
|
(87)
|
|
(150)
|
|
(192)
|
Recoveries
|
|
|
|
27
|
|
41
|
|
71
|
|
74
|
Net
charge-offs
|
|
|
(29)
|
|
(46)
|
|
(79)
|
|
(118)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses, end of period
|
$ 5,770
|
|
$ 8,523
|
|
$ 5,770
|
|
$ 8,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a percent of:
|
|
|
|
|
|
|
|
Total
loans
|
|
|
|
1.22%
|
|
2.04%
|
|
1.22%
|
|
2.04%
|
Total
nonperforming loans
|
|
283.68%
|
|
552.01%
|
|
283.68%
|
|
552.01%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
Assets
|
|
|
|
June
30,
|
|
December
31,
|
|
|
(dollars in
thousands)
|
|
|
|
2014
|
|
2013
|
|
% change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
Loans:
|
|
|
|
|
|
|
|
|
|
Nonaccruing Loans
(1)
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land development
|
$
-
|
|
$ 11
|
|
-100.0%
|
Commercial
mortgage
|
|
|
|
|
|
914
|
|
373
|
|
145.0%
|
Commercial and
industrial
|
|
|
|
|
|
342
|
|
139
|
|
146.0%
|
Total
commercial
|
|
|
|
|
|
|
1,256
|
|
523
|
|
140.2%
|
Non-commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgage
|
|
|
|
|
|
|
627
|
|
549
|
|
14.2%
|
Revolving
mortgage
|
|
|
|
|
|
|
144
|
|
116
|
|
24.1%
|
Consumer
|
|
|
|
|
|
|
|
7
|
|
9
|
|
-22.2%
|
Total
non-commercial
|
|
|
|
|
|
778
|
|
674
|
|
15.4%
|
Total nonaccruing
loans (1)
|
|
|
|
|
|
2,034
|
|
1,197
|
|
69.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans past due
90 or more days
|
|
|
|
|
|
|
and still accruing
|
|
|
|
|
|
-
|
|
-
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans
|
|
|
|
2,034
|
|
1,197
|
|
69.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed real
estate
|
|
|
|
10,375
|
|
14,233
|
|
-27.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
|
|
|
|
|
12,409
|
|
15,430
|
|
-19.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing troubled
debt restructurings (2)
|
|
4,993
|
|
5,255
|
|
-5.0%
|
Performing troubled
debt restructurings and
|
|
|
|
|
|
|
total
nonperforming assets
|
|
$ 17,402
|
|
$ 20,685
|
|
-15.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
as a percent of total loans
|
0.43%
|
|
0.27%
|
|
|
Nonperforming assets
as a percent of total assets
|
1.64%
|
|
2.10%
|
|
|
Performing troubled
debt restructurings and
|
|
|
|
|
|
total
nonperforming assets to total assets
|
2.31%
|
|
2.82%
|
|
|
(1) Nonaccruing loans
include nonaccruing troubled debt restructurings.
|
|
(2) Performing
troubled debt restructurings exclude nonaccruing troubled debt
restructurings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed Real
Estate by Loan Type
|
June 30,
2014
|
|
December 31,
2013
|
(dollars in
thousands)
|
|
Number
|
|
Amount
|
|
Number
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By foreclosed loan
type:
|
|
|
|
|
|
|
|
|
Commercial
construction and land development
|
10
|
|
$ 10,213
|
|
9
|
|
$ 13,822
|
Residential
mortgage
|
|
2
|
|
162
|
|
2
|
|
411
|
Total
|
|
|
|
12
|
|
$ 10,375
|
|
11
|
|
$ 14,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed Real
Estate
|
|
|
|
Six Months
Ended
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
|
|
|
|
$ 14,233
|
|
|
|
|
Transfers from
loans
|
|
|
|
|
|
173
|
|
|
|
|
Capitalized
cost
|
|
|
|
|
|
269
|
|
|
|
|
Loss
provisions
|
|
|
|
|
|
(154)
|
|
|
|
|
Loss on sale of
foreclosed properties
|
|
|
|
(25)
|
|
|
|
|
Net proceeds from
sales of foreclosed properties
|
|
|
(4,121)
|
|
|
|
|
Ending
balance
|
|
|
|
|
|
$ 10,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances and Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
June
30,
|
(dollars in
thousands)
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances
|
|
|
|
|
|
|
|
|
Average total
loans
|
|
|
|
$ 463,251
|
|
$ 408,688
|
|
$ 458,960
|
|
$ 404,192
|
Average total
interest-earning assets
|
|
710,281
|
|
712,197
|
|
702,433
|
|
709,547
|
Average total
assets
|
|
|
|
748,806
|
|
755,420
|
|
743,602
|
|
756,108
|
Average total
interest-bearing deposits
|
|
502,168
|
|
517,200
|
|
500,614
|
|
514,915
|
Average total
deposits
|
|
|
|
586,593
|
|
586,511
|
|
581,359
|
|
582,678
|
Average total
interest-bearing liabilities
|
|
552,790
|
|
567,842
|
|
551,367
|
|
565,550
|
Average total
stockholders' equity
|
|
102,003
|
|
107,840
|
|
102,318
|
|
109,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Performance Ratios
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.50%
|
|
-0.11%
|
|
0.36%
|
|
0.14%
|
Return on average
equity (1)
|
|
3.70%
|
|
-0.77%
|
|
2.65%
|
|
0.99%
|
Interest rate spread
(1) (2)
|
|
|
2.68%
|
|
2.49%
|
|
2.72%
|
|
2.52%
|
Net interest margin
(1) (3)
|
|
|
2.82%
|
|
2.65%
|
|
2.86%
|
|
2.68%
|
Noninterest expense
to average assets (1)
|
|
3.40%
|
|
4.00%
|
|
3.31%
|
|
3.43%
|
Efficiency ratio
(4)
|
|
|
|
96.96%
|
|
104.40%
|
|
94.08%
|
|
92.87%
|
(1) Ratios are
annualized.
|
|
|
|
|
|
|
|
|
|
(2) Represents the
difference between the weighted average yield on average
interest-earning assets and the
|
weighted average cost
of average interest-bearing liabilities. Yields on tax-exempt
securities have been
|
included on a
tax-equivalent basis using a 34% federal marginal tax
rate.
|
(3) Represents net
interest income as a percent of average interest-earning assets.
Yields on tax-exempt
|
securities have been
included on a tax-equivalent basis using a 34% federal marginal tax
rate.
|
(4) Represents
noninterest expenses divided by the sum of net interest income, on
a tax equivalent basis
|
using a federal
marginal tax rate of 34%, and noninterest income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Earnings
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month
Periods Ended
|
(dollars in
thousands,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
except per share
data)
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement
Data:
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income
|
|
$ 5,771
|
|
$ 5,741
|
|
$ 5,776
|
|
$ 5,751
|
|
$ 5,679
|
Interest
expense
|
|
886
|
|
887
|
|
957
|
|
1,021
|
|
1,099
|
Net interest
income
|
|
4,885
|
|
4,854
|
|
4,819
|
|
4,730
|
|
4,580
|
Provision for
(recovery of) loan losses
|
(1,390)
|
|
(68)
|
|
54
|
|
(863)
|
|
16
|
Net interest income
after provision for
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
6,275
|
|
4,922
|
|
4,765
|
|
5,593
|
|
4,564
|
Noninterest
income
|
|
1,554
|
|
1,456
|
|
1,756
|
|
1,868
|
|
2,522
|
Noninterest
expenses
|
|
6,350
|
|
5,860
|
|
6,030
|
|
6,503
|
|
7,541
|
Income (loss) before
income
|
|
|
|
|
|
|
|
|
|
tax provision
(benefit)
|
|
1,479
|
|
518
|
|
491
|
|
958
|
|
(455)
|
Income tax provision
(benefit)
|
538
|
|
114
|
|
131
|
|
398
|
|
(249)
|
Net income
(loss)
|
|
$ 941
|
|
$ 404
|
|
$ 360
|
|
$ 560
|
|
$ (206)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share – Basic
|
$ 0.22
|
|
$ 0.09
|
|
$ 0.08
|
|
$ 0.12
|
|
$ (0.04)
|
Net income (loss) per
share – Diluted
|
$ 0.21
|
|
$ 0.09
|
|
$ 0.08
|
|
$ 0.12
|
|
$ (0.04)
|
Book value per
share
|
|
$ 21.06
|
|
$ 20.53
|
|
$ 20.06
|
|
$ 19.69
|
|
$ 19.65
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
4,341,124
|
|
4,461,521
|
|
4,497,671
|
|
4,668,228
|
|
4,683,950
|
Diluted
|
|
|
|
4,382,660
|
|
4,493,617
|
|
4,542,024
|
|
4,700,725
|
|
4,683,950
|
Ending shares
outstanding
|
4,831,311
|
|
4,964,611
|
|
5,040,057
|
|
5,223,823
|
|
5,284,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Financial Condition Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
(dollars in
thousands)
|
|
2014
|
|
2014
|
|
2013*
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
$ 754,496
|
|
$ 748,089
|
|
$ 733,035
|
|
$ 751,302
|
|
$ 752,634
|
Cash and cash
equivalents
|
93,825
|
|
98,554
|
|
52,791
|
|
77,890
|
|
38,289
|
Investment
securities
|
|
153,921
|
|
156,036
|
|
189,570
|
|
195,973
|
|
248,501
|
Loans receivable, net
of deferred fees
|
472,012
|
|
455,434
|
|
449,234
|
|
429,778
|
|
417,790
|
Allowance for loan
losses
|
|
(5,770)
|
|
(7,189)
|
|
(7,307)
|
|
(7,589)
|
|
(8,523)
|
Deposits
|
|
|
|
592,683
|
|
585,752
|
|
572,786
|
|
583,859
|
|
588,156
|
Core
deposits**
|
|
432,201
|
|
423,567
|
|
405,722
|
|
406,730
|
|
401,808
|
FHLB
advances
|
|
50,000
|
|
50,000
|
|
50,000
|
|
50,000
|
|
50,000
|
Total
equity
|
|
|
|
101,727
|
|
101,947
|
|
101,088
|
|
102,876
|
|
103,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory Capital
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage
capital
|
|
14.16%
|
|
14.38%
|
|
14.35%
|
|
14.45%
|
|
14.24%
|
Tier 1 risk-based
capital
|
|
23.69%
|
|
24.29%
|
|
24.14%
|
|
24.73%
|
|
25.25%
|
Total risk-based
capital
|
|
24.94%
|
|
25.54%
|
|
25.39%
|
|
25.99%
|
|
26.51%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
$ 2,034
|
|
$ 1,905
|
|
$ 1,197
|
|
$ 1,670
|
|
$ 1,544
|
Nonperforming
assets
|
|
12,409
|
|
15,516
|
|
15,430
|
|
17,041
|
|
18,204
|
Nonperforming loans
to total loans
|
0.43%
|
|
0.42%
|
|
0.27%
|
|
0.39%
|
|
0.37%
|
Nonperforming assets
to total assets
|
1.64%
|
|
2.07%
|
|
2.10%
|
|
2.27%
|
|
2.42%
|
Allowance for loan
losses
|
|
$ 5,770
|
|
$ 7,189
|
|
$ 7,307
|
|
$ 7,589
|
|
$ 8,523
|
Allowance for loan
losses to total loans
|
1.22%
|
|
1.58%
|
|
1.63%
|
|
1.77%
|
|
2.04%
|
Allowance for loan
losses to
|
|
|
|
|
|
|
|
|
|
nonperforming
loans
|
|
283.68%
|
|
377.38%
|
|
610.44%
|
|
454.43%
|
|
552.01%
|
*
Ending balance sheet data as of December 31, 2013 was derived from
audited consolidated financial statements.
|
** Core
deposits are defined as total deposits excluding certificates of
deposit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact:
|
|
Suzanne S.
DeFerie
|
|
|
Chief Executive
Officer
|
|
|
(828)
254-7411
|
|
|
|
|
|
Logo -
http://photos.prnewswire.com/prnh/20111031/CL96775LOGO
SOURCE ASB Bancorp, Inc.