ASHEVILLE, N.C.,
Oct. 31, 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 nine-month periods ended
September 30, 2014. The Company
reported net income of $502,000 for
the quarter ended September 30, 2014 compared to
$560,000 for the quarter ended
September 30, 2013. On a per share
basis, net income was $0.12 per diluted share for the third quarter of
2014 compared to $0.12 per diluted
share for the third quarter of 2013. For the nine
months ended September 30, 2014, the
Company reported net income of $1.8 million compared
to net income of $1.1 million for the
same period of 2013. For the year-to-date periods, net
income per share increased 87.0% to $0.43 per diluted share for the nine months ended
September 30, 2014 from $0.23 per diluted share for the nine months ended
September 30, 2013.
![ASB Bancorp Logo. ASB Bancorp Logo.](http://photos.prnewswire.com/prnvar/20111031/CL96775LOGO)
Suzanne DeFerie, President
and CEO, noted, "Our latest quarterly financial results show
increased net interest income over the previous four
quarters with a continued improvement in our net interest margin
to 2.84% compared to 2.82% in the previous quarter and
2.72% in the comparable quarter of 2013. Over the
first nine months of 2014, we also grew loans by 8.6% that
included a diversified mix of commercial, adjustable
rate residential mortgage and consumer loans, which were funded in
large part by a 7.0% growth in lower cost core
deposits. Our loan growth initiatives continue to produce
meaningful results as our interest income from loans
increased 6.2% over the same quarter in the prior year. We remain
vigilant and disciplined in our approach to profitable
growth at reasonable risks."
2014 Third Quarter Highlights
- While net income per share remained at $0.12 per diluted share for the third quarter of
2014 compared to the third quarter of 2013, year-to-date net income
per share increased 87.0% to $0.43
per diluted share in 2014 from $0.23
per diluted share in 2013.
- Net interest income increased 5.4% to $5.0 million for the three months ended September
30, 2014 from $4.7 million for
the three months ended September 30,
2013. The net interest margin improved to 2.84% for the
third quarter of 2014 compared to 2.72% for the third quarter of
2013.
- Interest income from loans increased 6.2% in the third quarter
of 2014 compared to the third quarter of 2013, primarily
reflecting a $47.4 million increase
in average loan balances when comparing the two quarters.
- Interest expense decreased 13.2% in the third quarter of 2014
compared to the third quarter of 2013.
- The Company recorded a $240,000
provision for loan losses in the third quarter of 2014 compared to
a recovery of loan losses of $(863,000) in the third quarter of 2013. The
allowance for loan losses declined to 1.20% of total loans at
September 30, 2014 from 1.63% at
December 31, 2013, and the allowance
coverage of nonperforming loans was 170.9% at September 30, 2014 compared to 610.4% at
December 31, 2013.
- Total loan balances increased $15.9
million, or 3.4%, to $487.9
million during the third quarter of 2014. Loans increased
$38.7 million, or 8.6%, since
December 31, 2013 and $58.1 million, or 13.5%, since September 30, 2013 as new loan originations
exceeded loan repayments, prepayments and foreclosures.
- Noninterest expenses decreased 13.5% to $5.6 million for the third quarter of 2014 from
$6.5 million for the third quarter of
2013, due to decreases in foreclosed property expenses and overhead
expense reduction initiatives.
- Delinquent and nonperforming loans were 0.78% and 0.70%,
respectively, of total loans at September
30, 2014, compared to 0.48% and 0.27%, respectively, of
total loans at December 31,
2013.
- Nonperforming assets, including foreclosed properties,
decreased to 1.68% of total assets at September 30, 2014 from 2.10% of total assets at
December 31, 2013 and 2.27% of
total assets at September 30,
2013.
- Core deposits, which exclude certificates of deposit, increased
$28.3 million, or 7.0%, since
December 31, 2013 and $27.3 million, or 6.7%, since September 30, 2013. Noninterest-bearing deposits
have increased $20.1 million since
December 31, 2013.
- Book value per share increased to $21.53 during the third quarter of 2014 from
$21.06 at June 30, 2014 and
$20.06 at December 31, 2013.
- Capital remained strong with consolidated regulatory capital
ratios of 13.17% Tier 1 leverage capital, 21.17% Tier 1 risk-based
capital and 22.42% total risk-based capital.
- During July 2014, the Company
repurchased a total of 452,900 shares of its common stock from two
of its larger institutional stockholders in previously announced
privately negotiated transactions at an average cost of
$19.96 per share.
DeFerie commented, "Our third quarter results are indicative of
our efforts to improve core performance and diligent management of
funding costs as we build a larger diverse loan portfolio. We
continue to be mindful of capital management opportunities that we
believe create value for our stockholders."
Income Statement Analysis
Net Interest Income. Net interest income increased
by $257,000, or 5.4%, to $5.0 million for the three months ended
September 30, 2014 compared to
$4.7 million for the three months
ended September 30, 2013. Interest
expense decreased $135,000, or 13.2%,
to $886,000 for the three months
ended September 30, 2014 from
$1.0 million for the three months
ended September 30, 2013, primarily
due to an 8 basis point reduction in the average rate paid on
interest-bearing liabilities and an $8.7
million decrease in the average balance of total
interest-bearing liabilities. Total interest and dividend income
increased $122,000, or 2.1%, to
$5.9 million for the three months
ended September 30, 2014 from
$5.8 million for the three months
ended September 30, 2013, primarily
as a result of an increase of $47.4
million in average loan balances, which was partially offset
by a 19 basis point decrease in the average yield on loans. Average
investment portfolio balances decreased $60.5 million for the three months ended
September 30, 2014, which was
partially offset by an increase of 14 basis points in the average
portfolio yield compared to the same period of 2013.
"Interest income grew year-over-year in the third quarter of
2014 and the expansion of lower cost core deposit funding reduced
our cost of funds," DeFerie explained. "We believe we have a robust
loan pipeline entering the fourth quarter, which should support
growth in interest income throughout the remainder of the
year."
Net interest income increased by $787,000, or 5.6%, to $14.7 million for the nine months ended
September 30, 2014 compared to
$13.9 million for the nine months
ended September 30, 2013. Interest
expense decreased $578,000, or 17.9%,
to $2.7 million for the nine months
ended September 30, 2014 from
$3.2 million for the nine months
ended September 30, 2013, due to a 14
basis point reduction in the average rate paid on interest-bearing
deposits and a decrease of $12.4
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 20 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 slightly offset by
increases in the average balances of NOW, money market and savings
accounts as the Company continued its focus on core deposit growth.
Total interest and dividend income increased $209,000 to $17.4
million for the nine months ended September 30, 2014 compared to $17.2 million for the nine months ended
September 30, 2013. The average
balance of total interest-earning assets decreased $3.1 million, which was significantly offset by a
5 basis point increase in the average yields on interest-earning
assets. Interest income on loans increased $958,000, primarily attributable to a
$52.3 million increase in the average
balance of loans, partially offset by a 23 basis point reduction in
the yield earned on loans in 2014. Interest on securities
decreased $810,000 in 2014 primarily
as a result of an $84.6 million
decrease in average investment portfolio balances, partially offset
by a 23 basis point increase in yield earned on the investment
portfolio.
DeFerie commented, "We believe an important measure of our
performance is the improvement demonstrated in lowering interest
expense through diligent deposit repricing and core deposit
growth."
Noninterest Income. Noninterest income decreased
$226,000, or 12.1%, to $1.6 million for the three months ended
September 30, 2014 from $1.9 million for the three months ended
September 30, 2013. Factors that
contributed to the decrease in noninterest income during the 2014
period included decreases of $197,000
in mortgage banking income, $180,000
in gains from the sale of investment securities and $36,000 in deposit and other service charge
income, which were partially offset by increases of $78,000 in loan fees, $71,000 in gains on sales of foreclosed
properties and $29,000 in debit card
services. The decrease in investment security gains resulted from
having no sales of investment securities during the third quarter
of 2014. The decrease in mortgage banking income was attributable
to lower volumes of residential mortgage loans sold due to a
decline in residential mortgage originations. The decrease in
deposit and other service charge income was primarily the result of
lower ATM and deposit overdraft fees.
Noninterest income decreased $1.6
million, or 25.9%, to $4.7
million for the nine months ended September 30, 2014 from $6.3 million for the nine months ended
September 30, 2013. Factors that
contributed to the decrease in noninterest income during the 2014
nine-month period included decreases of $912,000 in mortgage banking income, $662,000 in securities gains, $174,000 in income from an investment in a Small
Business Investment Company and $122,000 in deposit fees, which were partially
offset by $77,000 in higher income
from debit card services, $49,000 in
higher brokerage referral fees and $47,000 in higher consumer and small business
administrative loan fees. The decrease in mortgage banking income
was attributable to lower volumes of residential mortgage loans
originated and sold. The decrease in deposit fees was primarily the
result of lower ATM and deposit overdraft fees.
Noninterest Expenses. Noninterest expenses
decreased $879,000, or 13.5%, to
$5.6 million for the three months
ended September 30, 2014 from
$6.5 million for the three months
ended September 30, 2013. The
decrease was primarily attributable to decreases of $541,000 in foreclosed property expenses,
$219,000 in in salaries and employee
benefits, $120,000 in data processing
expenses, $71,000 in various other
expenses and $40,000 in occupancy
expenses, which were partially offset by an increase of
$110,000 in professional and outside services. The
decrease in salaries and benefits was primarily due to decreases of
$207,000 in compensation expenses and
$12,000 in employee benefits. The
decrease in foreclosed property expenses primarily related to a
reduction of $447,000 in valuation
write-downs of foreclosed properties.
Noninterest expenses decreased $1.5
million, or 7.9%, to $17.8
million for the nine months ended September 30, 2014 from $19.4 million for the nine months ended
September 30, 2013. The lower 2014
noninterest expenses primarily reflected decreases in foreclosed
property expenses of $1.8 million,
various other expenses of $208,000,
occupancy expenses of $142,000 and
data processing expenses of $122,000,
which were partially offset by higher compensation expenses of
$560,000 and higher professional and
outside services expenses of $147,000. The decrease in foreclosed property
expenses primarily related to a reduction of $1.7 million in valuation write-downs of
foreclosed properties. Compensation expenses in the first nine
months of 2014 included an increase of $380,000 in equity incentive plan expenses
related to accelerated vesting for disability of an executive
officer and an increase of $672,000
in other employee benefit plan expenses, which were partially
offset by a decrease of $492,000 in
compensation expenses and reductions in most other expense
categories. Compensation expenses in the first nine 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 $16.0 million, or 2.2%, to $749.0 million at September 30, 2014 from $733.0 million at December
31, 2013. Cash and cash equivalents increased $25.6 million, or 48.5%, to $78.4 million at September
30, 2014 from $52.8 million at
December 31, 2013 in anticipation of
loan growth. Investment securities decreased $40.1 million, or 21.1%, to $149.5 million at September 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 $38.7 million, or
8.6%, to $487.9 million at
September 30, 2014 from $449.2 million at December
31, 2013 as new loan originations exceeded loan repayments,
prepayments and foreclosures.
Liabilities. Total deposits increased $22.0 million, or 3.8%, to $594.8 million at September 30, 2014 from $572.8 million at December
31, 2013. During the nine months ended September 30, 2014, the Company continued its
focus on core deposit growth, from which it excludes certificates
of deposit. Core deposits increased $28.3
million, or 7.0%, to $434.0
million at September 30, 2014
from $405.7 million at December 31, 2013.
Commercial checking and money market accounts increased
$21.0 million, or 22.1%, to
$116.2 million at September 30, 2014 from $95.2 million at December
31, 2013, reflecting expanded sources of lower cost funding.
The Company's initiatives to obtain new commercial deposit
relationships in conjunction with making 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
$6.3 million, or 3.8%, to
$160.8 million at September 30, 2014 from $167.1 million at December
31, 2013. Accounts payable and other liabilities increased
$1.4 million, or 17.0%, to
$9.8 million at September 30, 2014 from $8.4 million at December
31, 2013.
Asset Quality
Provision for Loan Losses. The provision for loan
losses was $240,000 for the three
months ended September 30, 2014 compared to a recovery of loan
losses of $(863,000) for the three
months ended September 30, 2013. The
provision expense recorded in the third quarter of 2014 was
primarily due to higher charge-offs during the period. The
significant decrease in the provision for the third quarter of 2013
was primarily supported by declines in the Company's trailing
three-year loss history and recent trends of substantially improved
levels of delinquent and nonperforming loans used to estimate
general loan loss reserves. The allowance for loan losses totaled
$5.9 million, or 1.20% of total
loans, at September 30, 2014 compared
to $7.3 million, or 1.63% of total
loans, at December 31, 2013. The
Company charged off $172,000 in loans
during the three months ended September 30,
2014 compared to $86,000
during the three months ended September 30,
2013.
The Company recorded a recovery of loan losses in the amount of
$(1.2) million for the nine months
ended September 30, 2014 compared to
a recovery of loan losses of $(735,000) for the nine months ended September 30, 2013. In the nine-month period of
2014, the Company assessed 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
Company. Specifically, additional sub-segments were identified
where the Company made (i) loans in excess of $2.5 million to construct commercial mixed-use
buildings in small communities with low population growth, (ii)
speculative loans to construct one-to-four family residences for
the greater of 80% of the appraised value of the completed
residence or 100% of the actual costs of construction, and (iii)
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 Company's reserves for loans not considered
impaired in the second quarter of 2014. Charge-offs were
$322,000 for the first nine months of
2014 compared to $278,000 for the
first nine months of 2013.
DeFerie noted, "Our year-over-year earnings comparisons reflect
the positive impact of a reduced provision for loan losses
resulting from modifications of our loan loss methodology in the
first nine months of 2014 and 2013 that were attributable to
improvements in the credit quality of our loans."
Nonperforming Assets. Nonperforming assets totaled
$12.6 million, or 1.68% of total
assets, at September 30, 2014,
compared to $15.4 million, or 2.10%
of total assets, at December 31,
2013. Nonperforming assets included $3.4 million in nonperforming loans and
$9.2 million in foreclosed real
estate at September 30, 2014 compared
to $1.2 million and $14.2 million, respectively, at December 31, 2013.
Nonperforming loans increased $2.2
million to $3.4 million, or
0.70% of total loans, at September 30,
2014 from $1.2 million, or
0.27% of total loans, at December 31,
2013. At September 30, 2014,
nonperforming loans included 12 residential mortgage loans that
totaled $2.0 million, two commercial
mortgage loans that totaled $900,000,
five revolving home equity loans that totaled $240,000 and four commercial and industrial loans
that totaled $236,000. As of
September 30, 2014, the nonperforming
loans had specific reserves totaling $198,000.
Foreclosed real estate at September 30,
2014 included 11 properties with a total recorded amount of
$9.2 million compared to 11
properties with a total recorded amount of $14.2 million at December
31, 2013. During the nine months ended September 30, 2014, three new properties totaling
$173,000 were added to foreclosed
real estate, while three properties totaling $1.6 million were sold including a large parcel
with a recorded amount of $1.2
million. 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 nine
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 nine months ended September 30, 2014, the Bank recorded an
additional write-down of $133,000 on
the property and sold 28 residential condominium units. At
September 30, 2014, the adjusted
recorded amount was $4.6 million for
the remaining 8 retail units and 8 office units.
Outlook
DeFerie concluded, "While we are pleased with the continued
improvement in the Company's balance sheet during 2014 and the
strength of our loan portfolio, we remain focused on creating
stockholder value through increased profitability from loan growth
funded by core deposits and greater efficiencies in our
operations."
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 the 2014 #1 Best Bank and #1
Best Bank for Small Business Services by the readers of the
Mountain Xpress newspaper in Western North Carolina and was also awarded
the Best Bank in McDowell County
for 2014 by the readers of The McDowell News 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.
Contact:
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Suzanne S.
DeFerie
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Chief Executive
Officer
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(828)
254-7411
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Selected Financial
Condition Data
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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September
30,
|
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December
31,
|
|
|
(Dollars in
thousands)
|
|
|
|
|
2014
|
|
2013*
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% Change
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|
|
|
|
|
|
|
|
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Total
assets
|
|
|
|
|
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$ 749,033
|
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$ 733,035
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|
2.2%
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Cash and cash
equivalents
|
|
|
|
78,412
|
|
52,791
|
|
48.5%
|
Investment
securities
|
|
|
|
|
149,530
|
|
189,570
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|
-21.1%
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Loans receivable, net
of deferred fees
|
|
487,904
|
|
449,234
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|
8.6%
|
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Allowance for loan
losses
|
|
|
|
(5,852)
|
|
(7,307)
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|
19.9%
|
Deposits
|
|
|
|
|
|
|
|
594,798
|
|
572,786
|
|
3.8%
|
Core
deposits**
|
|
|
|
|
|
433,983
|
|
405,722
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|
7.0%
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FHLB
advances
|
|
|
|
|
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50,000
|
|
50,000
|
|
0.0%
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Accounts payable and
other liabilities
|
|
9,795
|
|
8,374
|
|
17.0%
|
|
Total
equity
|
|
|
|
|
|
|
94,285
|
|
101,088
|
|
-6.7%
|
* Derived
from audited consolidated financial statements.
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** Core deposits are
defined as total deposits excluding certificates of
deposit.
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Selected Operating
Data
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(Dollars in
thousands,
|
|
Three Months
Ended
|
Nine Months
Ended
|
except per share
data)
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
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|
|
|
|
|
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Interest
and
|
|
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dividend
income
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$ 5,873
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|
$ 5,751
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2.1%
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|
$ 17,385
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|
$ 17,176
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1.2%
|
Interest
expense
|
|
886
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|
1,021
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|
-13.2%
|
|
2,659
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|
3,237
|
|
-17.9%
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Net interest
income
|
|
4,987
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|
4,730
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|
5.4%
|
|
14,726
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|
13,939
|
|
5.6%
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Provision
for
|
|
|
|
|
|
|
|
|
|
|
|
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(recovery of)
loan losses
|
|
240
|
|
(863)
|
|
127.8%
|
|
(1,218)
|
|
(735)
|
|
-65.7%
|
Net interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
after
provision for
|
|
|
|
|
|
|
|
|
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|
|
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(recovery of)
loan losses
|
|
4,747
|
|
5,593
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|
-15.1%
|
|
15,944
|
|
14,674
|
|
8.7%
|
Noninterest
income
|
|
1,642
|
|
1,868
|
|
-12.1%
|
|
4,652
|
|
6,278
|
|
-25.9%
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Noninterest
expenses
|
|
5,624
|
|
6,503
|
|
-13.5%
|
|
17,834
|
|
19,364
|
|
-7.9%
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Income
before
|
|
|
|
|
|
|
|
|
|
|
|
|
income
tax
|
|
|
|
|
|
|
|
|
|
|
|
|
provision
|
|
|
|
765
|
|
958
|
|
-20.1%
|
|
2,762
|
|
1,588
|
|
73.9%
|
Income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provision
|
|
|
|
263
|
|
398
|
|
-33.9%
|
|
915
|
|
494
|
|
85.2%
|
Net income
|
|
|
|
$ 502
|
|
$ 560
|
|
-10.4%
|
|
$ 1,847
|
|
$ 1,094
|
|
68.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per
|
|
|
|
|
|
|
|
|
|
|
|
|
common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$ 0.13
|
|
$ 0.12
|
|
8.3%
|
|
$ 0.44
|
|
$ 0.23
|
|
91.3%
|
Diluted
|
|
|
|
$ 0.12
|
|
$ 0.12
|
|
0.0%
|
|
$ 0.43
|
|
$ 0.23
|
|
87.0%
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
3,938,629
|
|
4,668,228
|
|
-15.6%
|
|
4,245,176
|
|
4,756,780
|
|
-10.8%
|
Diluted
|
|
|
|
4,017,345
|
|
4,700,725
|
|
-14.5%
|
|
4,289,164
|
|
4,756,859
|
|
-9.8%
|
Ending shares
outstanding
|
4,378,411
|
|
5,223,823
|
|
-16.2%
|
|
4,378,411
|
|
5,223,823
|
|
-16.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances and Yields/Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months
Ended September 30,
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
(Dollars in
thousands)
|
|
|
|
|
|
Balance
|
|
Cost
|
|
Balance
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
receivable
|
|
|
|
|
|
$ 480,074
|
|
4.27%
|
|
$ 432,659
|
|
4.46%
|
Investment
securities, including tax-exempt (1)
|
|
152,142
|
|
1.88%
|
|
212,636
|
|
1.74%
|
Other
interest-earning assets
|
|
|
|
78,551
|
|
0.39%
|
|
60,567
|
|
0.48%
|
Total
interest-earning assets (1)
|
|
|
|
710,767
|
|
3.33%
|
|
705,862
|
|
3.30%
|
Interest-bearing
deposits
|
|
|
|
|
|
501,698
|
|
0.31%
|
|
510,286
|
|
0.41%
|
Federal Home Loan
Bank advances
|
|
|
|
50,000
|
|
3.93%
|
|
50,000
|
|
3.94%
|
Total
interest-bearing liabilities
|
|
|
|
551,969
|
|
0.64%
|
|
560,687
|
|
0.72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(1)
|
|
|
|
|
|
|
|
2.69%
|
|
|
|
2.58%
|
Net interest margin
(1)
|
|
|
|
|
|
|
|
2.84%
|
|
|
|
2.72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
(Dollars in
thousands)
|
|
|
|
|
|
Balance
|
|
Cost
|
|
Balance
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
receivable
|
|
|
|
|
|
$ 466,076
|
|
4.34%
|
|
$ 413,785
|
|
4.57%
|
Investment
securities, including tax-exempt (1)
|
|
159,057
|
|
1.97%
|
|
243,652
|
|
1.74%
|
Other
interest-earning assets
|
|
|
|
80,110
|
|
0.42%
|
|
50,868
|
|
0.51%
|
Total
interest-earning assets (1)
|
|
|
|
705,243
|
|
3.36%
|
|
708,305
|
|
3.31%
|
Interest-bearing
deposits
|
|
|
|
|
|
500,979
|
|
0.32%
|
|
513,355
|
|
0.46%
|
Federal Home Loan
Bank advances
|
|
|
|
50,000
|
|
3.93%
|
|
50,000
|
|
3.93%
|
Total
interest-bearing liabilities
|
|
|
|
551,570
|
|
0.64%
|
|
563,911
|
|
0.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(1)
|
|
|
|
|
|
|
|
2.72%
|
|
|
|
2.54%
|
Net interest margin
(1)
|
|
|
|
|
|
|
|
2.85%
|
|
|
|
2.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
Nine Months
Ended
|
Allowance for Loan
Losses
|
|
|
|
September
30,
|
|
September
30,
|
(Dollars in
thousands)
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses, beginning of period
|
|
$ 5,770
|
|
$ 8,523
|
|
$ 7,307
|
|
$ 8,513
|
Provision for
(recovery of) loan losses
|
|
|
|
240
|
|
(863)
|
|
(1,218)
|
|
(735)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs
|
|
|
|
|
|
|
(172)
|
|
(86)
|
|
(322)
|
|
(278)
|
Recoveries
|
|
|
|
|
|
|
|
14
|
|
15
|
|
85
|
|
89
|
Net
charge-offs
|
|
|
|
|
|
(158)
|
|
(71)
|
|
(237)
|
|
(189)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses, end of period
|
|
|
$ 5,852
|
|
$ 7,589
|
|
$ 5,852
|
|
$ 7,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a percent of:
|
|
|
|
|
|
|
|
|
Total
loans
|
|
|
|
|
|
|
1.20%
|
|
1.77%
|
|
1.20%
|
|
1.77%
|
Total
nonperforming loans
|
|
|
|
170.91%
|
|
454.43%
|
|
170.91%
|
|
454.43%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
Assets
|
|
|
|
|
|
|
|
September
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
|
|
|
|
|
|
|
|
900
|
|
373
|
|
141.3%
|
Commercial and
industrial
|
|
|
|
|
|
236
|
|
139
|
|
69.8%
|
Total
commercial
|
|
|
|
|
|
|
|
1,136
|
|
523
|
|
117.2%
|
Non-commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgage
|
|
|
|
|
|
|
|
2,041
|
|
549
|
|
271.8%
|
Revolving
mortgage
|
|
|
|
|
|
|
|
240
|
|
116
|
|
106.9%
|
Consumer
|
|
|
|
|
|
|
|
|
|
7
|
|
9
|
|
-22.2%
|
Total
non-commercial
|
|
|
|
|
|
|
|
2,288
|
|
674
|
|
239.5%
|
Total nonaccruing
loans (1)
|
|
|
|
|
|
3,424
|
|
1,197
|
|
186.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans past due
90 or more days
|
|
|
|
|
|
|
|
|
|
|
and still accruing
|
|
|
|
|
|
|
|
-
|
|
-
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans
|
|
|
|
|
|
|
3,424
|
|
1,197
|
|
186.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed real
estate
|
|
|
|
|
|
|
|
9,169
|
|
14,233
|
|
-35.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
|
|
|
|
|
12,593
|
|
15,430
|
|
-18.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing troubled
debt restructurings (2)
|
|
|
|
4,889
|
|
5,255
|
|
-7.0%
|
Performing troubled
debt restructurings and
|
|
|
|
|
|
|
|
|
total
nonperforming assets
|
|
|
|
|
|
$ 17,482
|
|
$ 20,685
|
|
-15.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
as a percent of total loans
|
|
|
|
0.70%
|
|
0.27%
|
|
|
Nonperforming assets
as a percent of total assets
|
|
|
|
1.68%
|
|
2.10%
|
|
|
Performing troubled
debt restructurings and
|
|
|
|
|
|
|
|
|
total
nonperforming assets to total assets
|
|
|
|
2.33%
|
|
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
|
September 30,
2014
|
|
December 31,
2013
|
(Dollars in
thousands)
|
|
|
|
|
|
Number
|
|
Amount
|
|
Number
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land development
|
|
9
|
|
$ 9,007
|
|
9
|
|
$ 13,822
|
Residential
mortgage
|
|
|
|
|
|
2
|
|
162
|
|
2
|
|
411
|
Total
|
|
|
|
|
|
|
|
11
|
|
$ 9,169
|
|
11
|
|
$ 14,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed Real
Estate
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
September 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
|
|
|
|
|
|
$ 14,233
|
|
|
|
|
Transfers from
loans
|
|
|
|
|
|
|
|
173
|
|
|
|
|
Capitalized
cost
|
|
|
|
|
|
|
|
269
|
|
|
|
|
Loss
provisions
|
|
|
|
|
|
|
|
(154)
|
|
|
|
|
Gain on sale of
foreclosed properties
|
|
|
|
|
|
25
|
|
|
|
|
Net proceeds from
sales of foreclosed properties
|
|
|
|
(5,377)
|
|
|
|
|
Ending
balance
|
|
|
|
|
|
|
|
$ 9,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances and Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
(Dollars in
thousands)
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances
|
|
|
|
|
|
|
|
|
|
|
Average total
loans
|
|
|
|
|
|
$ 480,074
|
|
$ 432,659
|
|
$ 466,076
|
|
$ 413,785
|
Average total
interest-earning assets
|
|
|
|
710,767
|
|
705,862
|
|
705,243
|
|
708,305
|
Average total
assets
|
|
|
|
|
|
747,794
|
|
749,515
|
|
745,015
|
|
753,886
|
Average total
interest-bearing deposits
|
|
|
|
501,698
|
|
510,286
|
|
500,979
|
|
513,355
|
Average total
deposits
|
|
|
|
|
|
591,883
|
|
584,682
|
|
584,905
|
|
583,354
|
Average total
interest-bearing liabilities
|
|
|
|
551,969
|
|
560,687
|
|
551,570
|
|
563,911
|
Average total
stockholders' equity
|
|
|
|
95,756
|
|
103,568
|
|
100,106
|
|
107,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
|
|
0.27%
|
|
0.30%
|
|
0.33%
|
|
0.19%
|
Return on average
equity (1)
|
|
|
|
2.08%
|
|
2.15%
|
|
2.47%
|
|
1.36%
|
Interest rate spread
(1) (2)
|
|
|
|
|
2.69%
|
|
2.58%
|
|
2.72%
|
|
2.54%
|
Net interest margin
(1) (3)
|
|
|
|
|
2.84%
|
|
2.72%
|
|
2.85%
|
|
2.70%
|
Noninterest expense
to average assets (1)
|
|
2.98%
|
|
3.44%
|
|
3.20%
|
|
3.43%
|
Efficiency ratio
(4)
|
|
|
|
|
|
83.68%
|
|
96.83%
|
|
90.53%
|
|
94.16%
|
(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,
|
|
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
except per share
data)
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement
Data:
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income
|
|
$ 5,873
|
|
$ 5,771
|
|
$ 5,741
|
|
$ 5,776
|
|
$ 5,751
|
Interest
expense
|
|
|
|
886
|
|
886
|
|
887
|
|
957
|
|
1,021
|
Net interest
income
|
|
|
|
4,987
|
|
4,885
|
|
4,854
|
|
4,819
|
|
4,730
|
Provision for
(recovery of) loan losses
|
|
240
|
|
(1,390)
|
|
(68)
|
|
54
|
|
(863)
|
Net interest income
after provision for
|
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
|
|
4,747
|
|
6,275
|
|
4,922
|
|
4,765
|
|
5,593
|
Noninterest
income
|
|
|
|
1,642
|
|
1,554
|
|
1,456
|
|
1,756
|
|
1,868
|
Noninterest
expenses
|
|
|
|
5,624
|
|
6,350
|
|
5,860
|
|
6,030
|
|
6,503
|
Income before
income
|
|
|
|
|
|
|
|
|
|
|
|
|
tax
provision
|
|
|
|
765
|
|
1,479
|
|
518
|
|
491
|
|
958
|
Income tax
provision
|
|
|
|
263
|
|
538
|
|
114
|
|
131
|
|
398
|
Net income
|
|
|
|
|
|
$ 502
|
|
$ 941
|
|
$ 404
|
|
$ 360
|
|
$ 560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
– Basic
|
|
$ 0.13
|
|
$ 0.22
|
|
$ 0.09
|
|
$ 0.08
|
|
$ 0.12
|
Net income per share
– Diluted
|
|
$ 0.12
|
|
$ 0.21
|
|
$ 0.09
|
|
$ 0.08
|
|
$ 0.12
|
Book value per
share
|
|
|
|
$ 21.53
|
|
$ 21.06
|
|
$ 20.53
|
|
$ 20.06
|
|
$ 19.69
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
3,938,629
|
|
4,341,124
|
|
4,461,521
|
|
4,497,671
|
|
4,668,228
|
Diluted
|
|
|
|
|
|
4,017,345
|
|
4,382,660
|
|
4,493,617
|
|
4,542,024
|
|
4,700,725
|
Ending shares
outstanding
|
|
|
4,378,411
|
|
4,831,311
|
|
4,964,611
|
|
5,040,057
|
|
5,223,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
Financial Condition Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
(Dollars in
thousands)
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013*
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
|
$ 749,033
|
|
$ 754,496
|
|
$ 748,089
|
|
$ 733,035
|
|
$ 751,302
|
Cash and cash
equivalents
|
|
|
78,412
|
|
93,825
|
|
98,554
|
|
52,791
|
|
77,890
|
Investment
securities
|
|
|
|
149,530
|
|
153,921
|
|
156,036
|
|
189,570
|
|
195,973
|
Loans receivable, net
of deferred fees
|
|
487,904
|
|
472,012
|
|
455,434
|
|
449,234
|
|
429,778
|
Allowance for loan
losses
|
|
|
|
(5,852)
|
|
(5,770)
|
|
(7,189)
|
|
(7,307)
|
|
(7,589)
|
Deposits
|
|
|
|
|
|
594,798
|
|
592,683
|
|
585,752
|
|
572,786
|
|
583,859
|
Core
deposits**
|
|
|
|
433,983
|
|
432,201
|
|
423,567
|
|
405,722
|
|
406,730
|
FHLB
advances
|
|
|
|
50,000
|
|
50,000
|
|
50,000
|
|
50,000
|
|
50,000
|
Total
equity
|
|
|
|
|
|
94,285
|
|
101,727
|
|
101,947
|
|
101,088
|
|
102,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory Capital
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage
capital
|
|
|
|
13.17%
|
|
14.16%
|
|
14.38%
|
|
14.35%
|
|
14.45%
|
Tier 1 risk-based
capital
|
|
|
|
21.17%
|
|
23.69%
|
|
24.29%
|
|
24.14%
|
|
24.73%
|
Total risk-based
capital
|
|
|
|
22.42%
|
|
24.94%
|
|
25.54%
|
|
25.39%
|
|
25.99%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
|
|
$ 3,424
|
|
$ 2,034
|
|
$ 1,905
|
|
$ 1,197
|
|
$ 1,670
|
Nonperforming
assets
|
|
|
|
12,593
|
|
12,409
|
|
15,516
|
|
15,430
|
|
17,041
|
Nonperforming loans
to total loans
|
|
0.70%
|
|
0.43%
|
|
0.42%
|
|
0.27%
|
|
0.39%
|
Nonperforming assets
to total assets
|
|
1.68%
|
|
1.64%
|
|
2.07%
|
|
2.10%
|
|
2.27%
|
Allowance for loan
losses
|
|
|
|
$ 5,852
|
|
$ 5,770
|
|
$ 7,189
|
|
$ 7,307
|
|
$ 7,589
|
Allowance for loan
losses to total loans
|
|
1.20%
|
|
1.22%
|
|
1.58%
|
|
1.63%
|
|
1.77%
|
Allowance for loan
losses to
|
|
|
|
|
|
|
|
|
|
|
nonperforming
loans
|
|
|
|
170.91%
|
|
283.68%
|
|
377.38%
|
|
610.44%
|
|
454.43%
|
*
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Photo -
http://photos.prnewswire.com/prnh/20111031/CL96775LOGO
SOURCE ASB Bancorp, Inc.