CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQ:CBFV),
the holding company of Community Bank (the “Bank”) and Exchange
Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of
Community Bank, today announced the first quarter 2017 financial
results.
First Quarter 2017 Financial Highlights
- Noninterest income increased $228,000, or 12.3%, to $2.1
million for the three months ended March 31, 2017 compared to $1.8
million for the three months ended March 31, 2016.
- Provision for loan losses decreased $430,000, or 50.6%, to
$420,000 for the three months ended March 31, 2017 compared to
$850,000 for the three months ended March 31, 2016.
- Total deposits increased $27.2 million, or 3.9%, to $725.5
million at March 31, 2017 compared to $698.2 million at December
31, 2016.
- The first quarter of 2017 does not have the significant benefit
of OREO activity seen in the first quarter of 2016, thus increasing
OREO expense significantly as compared to last year.
The Company reported net income of $1.7 million for the three
months ended March 31, 2017 compared to $2.0 million for the three
months ended March 31, 2016, a decrease of $341,000, or 16.7%.
Earnings per share (basic and diluted) decreased $0.08, or 16.6%,
to $0.42 for the three months ended March 31, 2017 compared to
$0.50 for the three months ended March 31, 2016. The quarterly
results benefited from an increase in noninterest income related to
additional commissions and fees, and contingency fees received by
Exchange Underwriters. Quarterly pre-tax income decreased by
$469,000 due in part by the pre-tax gain recognized in the first
quarter of 2016 because of the successful resolution of two problem
commercial real estate loans. In the case of each of these
loans, the Bank took ownership of the collateral, then sold one
property at a gain and took the other property into fixed assets
based on an appraised fair market value. The result of these two
events had decreased OREO expense by $566,000 in the first quarter
of 2016.
“We are pleased to report on our first quarter financial
performance. The first quarter produced solid results,
although the first quarter failed to enjoy the $566,000 pretax gain
from the OREO transactions of the first quarter of 2016. Because of
this and other factors, our net income in the current quarter is
down compared to the prior year quarter” said Barron P. McCune,
Jr., Vice Chairman, President and Chief Executive Officer. “CB
Financial Services recorded net income of $1.7 million in the first
quarter, which represents projected annualized results of ROA of
0.81% and ROE of 7.66%. The local economy is improving as the
Marcellus/Utica gas exploration activity picks up.
Correspondingly, our commercial lending activity is picking
up. We also have enjoyed a material increase in our deposits,
as our deposit strategies have taken hold. Our insurance
subsidiary, Exchange Underwriters, also had an excellent first
quarter. Our credit quality continues to be strong as
nonperforming loans and nonperforming assets declined in the
current quarter. Nonperforming loans to total loans decreased 13
basis points to 1.11% and nonperforming assets to total assets
decreased 12 basis points to 0.90%. Along with the credit mark from
the FedFirst transaction, our loan loss reserve/credit mark was at
1.36% of total loans at the end of the current period. Our
loan loss reserve and credit mark are 122.22% of nonperforming
loans. Community Bank has weathered the last several quarters
of a poor local economy in good shape. With increasing
lending and deposit activity, as well as strong performance from
EU, we are confident that the remainder of 2017 will yield positive
results.”
STATEMENT OF INCOME REVIEW
First Quarter Results
Net Interest Income. Net interest income
decreased $424,000, or 5.7%, to $7.0 million for the three months
ended March 31, 2017 compared to $7.4 million for the three months
ended March 31, 2016.
Interest and dividend income decreased $331,000, or 4.1%, to
$7.8 million for the three months ended March 31, 2017 compared to
$8.1 million for the three months ended March 31, 2016. Interest
income on loans decreased $355,000 due to a decrease in average
loans outstanding of $12.5 million for the three months ended March
31, 2017 compared to the three months ended March 31, 2016. The
decrease in average loans was due to loan payoffs within the
commercial and installment loan portfolios, partially offset by
increases in indirect auto loans, lines of credit, mortgage and
student loans mainly due to loan originations. The decrease in
higher yielding average loans resulted in an overall decrease of 10
basis points in yield on the loan portfolio. Contributing to the
yield decrease this quarter was the reduced accretion on the
acquired loan portfolio credit mark. The impact of the accretion
for the three months ended March 31, 2017 was 14 basis points
compared to 23 basis points for the three months ended March 31,
2016. The remaining credit mark balance for acquired loans was $1.4
million as of March 31, 2017. Since the prior quarter interest rate
hike by the Federal Reserve Board (“FRB”) of 25 basis points in the
discount rate, loan demand was deficient in the first quarter.
Interest income on securities exempt from federal tax decreased
$43,000 due to deploying proceeds from security calls and
maturities into higher yielding taxable security purchases in the
current period. There was a decrease of $2.7 million in the average
balance on securities exempt from federal tax and a decrease of 43
basis points in yield as a result of security calls and maturities
that had higher yields. Interest income on taxable securities
increased $37,000 mainly due to an increase of $20.5 million in the
average balance for taxable securities in the current period. The
increase in the average balance offset a decrease of 43 basis
points in yield on taxable securities. This is a result of new
purchases with lower prevailing yields replacing security calls and
maturities with higher yields within the portfolio. In addition,
other interest and dividend income increased $19,000 as a result of
increased interest earned with correspondent deposit banks and FHLB
dividends in the current period.
Interest expense increased $93,000, or 13.2%, to $796,000 for
the three months ended March 31, 2017 compared to $703,000 for the
three months ended March 31, 2016. Interest expense on deposits
increased $94,000 due to an increase in average interest-bearing
deposits of $12.9 million, primarily due to increases in time
deposits, savings and interest-bearing demand deposit accounts. Due
to the increases in the average deposit balances, the average cost
of interest-bearing deposits increased 6 basis points. This was
related to time deposit growth, a direct result of the Bank’s
promotional deposit program, the Chairman’s Challenge, which
increased new growth and retained maturing certificates of deposit
due to the promotional rate of 1.25% for a 25-month certificate of
deposit. Interest expense on short-term borrowings increased $5,000
mainly due to securities sold under agreements to repurchase.
Interest expense on other borrowed funds decreased $5,000 primarily
due to a maturing FHLB long-term borrowing for $3.5 million that
was paid off in the current period.
Provision for Loan Losses. The provision
for loan losses was $420,000 for the three months ended March 31,
2017 compared to $850,000 for the three months ended March 31,
2016. Net charge-offs for the three months ended March 31, 2017
were $438,000, which includes $237,000 of net charge-offs on
automobile loans, compared to $367,000 of net charge-offs, which
includes $163,000 of net charge-offs on automobile loans for the
three months ended March 31, 2016. The increase in net charge-offs
during the current period was due to partial charge-offs of
$129,000 for a commercial real estate relationship and $64,000 for
a residential mortgage loan. The provision for loan losses was
impacted in the current quarter by the recording of $250,000 of
provision for the acquired loan portfolio. This was due to the
above-mentioned partial loan charge-offs and to appropriately
reflect risk associated with the acquired loan portfolio in the
current quarter. Management analyzes the loan portfolio on a
quarterly basis to determine the adequacy of the allowance for loan
losses and the need for additional provisions for loan losses. It
was determined that a decrease in the current quarter provision was
needed for the three months ended March 31, 2017 compared to the
three months ended March 31, 2016. This was due to improvements in
the loan portfolio and the local economy which had a positive
impact on the quantitative factors within the allowance
calculation. In addition, average loans decreased during the
current period compared to the prior period, which was a
contributing factor in reducing the provision.
Noninterest Income. Noninterest income
increased $228,000, or 12.3% to $2.1 million for the three months
ended March 31, 2017 compared to $1.8 million for the three months
ended March 31, 2016. Insurance commissions from Exchange
Underwriters increased $214,000 due to increased commercial lines
commission and fee income of $109,000 and $99,000 of contingency
fees received in the current period. Contingency fees are
commissions that are contingent upon several factors including, but
not limited to, eligible written premiums, earned premiums,
incurred losses and stop loss charges. Net gains on the sales of
investments increased $52,000 due to the sale of equity securities.
These sales were transacted to recognize capital gains that will be
offset by a capital loss carry forward deferred tax asset that was
acquired in the merger. Partially offsetting these increases was a
decrease in the net gains on the sales of residential mortgage
loans of $35,000. The decrease in gains was primarily due to a
decrease in the number of loans originated and subsequently sold to
the FHLB as part of the MPF® program due to recent increases in the
10 year treasury rate.
Noninterest Expense. Noninterest expense
increased $703,000, or 12.7%, to $6.2 million for the three months
ended March 31, 2017 compared to $5.5 million for the three months
ended March 31, 2016. Other real estate owned expense increased
$550,000 due to prior period recognition of the $566,000 pre-tax
gain on the foreclosure procedures of two commercial real estate
loans that transferred into other real estate owned properties in
the prior period. This was partially offset by other real estate
owned expenses in the current period. Salaries and employee
benefits increased $120,000 primarily due to normal salary
increases, employee stock options and retirement benefits expense.
This increase was partially offset by decreases in group health
insurance and restricted stock awards expense. Occupancy increased
$74,000 primarily due to accelerated depreciation taken on
leasehold improvements in the Bank’s current operation center that
will not transfer over to the new Ralph J. Sommers Jr. Operations
Center (“Operations Center”) currently under construction for the
Bank. Other increases in occupancy expense were related to property
insurance expense. Other noninterest expense increased $29,000
primarily due to overdraft and debit card fraud losses, customer
supplies related to the Bank-wide issuance of embedded “chip” debit
cards, and dues and subscriptions in the current period. These were
partially offset by decreases in the “CB Cares” loan program
donation expenses directly related to decreased loan originations,
other insurance, non-employee restricted stock awards and travel
expense. Equipment increased $17,000 related to equipment
maintenance contact expense. The Federal Deposit Insurance
Corporation (“FDIC”) assessment expense decreased $45,000 due to a
factor reduction by the FDIC in the computation of the insurance
assessment. Advertising decreased $40,000 due to current marketing
and advertising initiatives.
Income Tax Expense. Income taxes
decreased $128,000 to $730,000 for the three months ended March 31,
2017 compared to $858,000 for the three months ended March 31,
2016. The effective tax rate for the three months ended March 31,
2017 was 30.0% compared to 29.6% for the three months ended March
31, 2016. The decrease in income taxes was due to a decrease of
$469,000 in pre-tax income. The increase in the effective tax rate
was related to the increase in taxable securities income due to new
purchases and a decrease in tax exempt income from calls and
maturities in the current period.
STATEMENT OF FINANCIAL CONDITION REVIEW
Assets. Total assets increased $22.7
million, or 2.7%, to $868.8 million at March 31, 2017 compared to
$846.1 million at December 31, 2016.
Investment securities classified as available-for-sale increased
$8.3 million, or 7.8%, to $114.5 million at March 31, 2017 compared
to $106.2 million at December 31, 2016. This increase was primarily
the result of new security purchases to invest deposit growth and
replace calls and maturities of U.S. government agencies and
obligations of states and political subdivisions. These security
activities were mainly funded by deposit growth, calls, maturities
and loan portfolio payoffs.
Loans, net, decreased $7.3 million, or 1.1%, to $666.8 million
at March 31, 2017 compared to $674.1 million at December 31, 2016.
This was primarily due to net paydowns of $7.3 million on
commercial real estate loans and $5.2 million in consumer loans
(mainly indirect auto loans), partially offset by net originations
of $2.8 million in commercial and industrial and $2.7 million in
construction loans. The net loan payoffs were utilized to fund loan
originations and security purchases during the current period.
Premises and equipment, net, increased $1.4 million, or 9.7%, to
$15.5 million at March 31, 2017 compared to $14.1 million at
December 31, 2016. This was mainly due to additions related to the
new Operations Center currently under construction for the
Bank.
Liabilities. Total liabilities increased
$21.6 million, or 2.9%, to $778.2 million at March 31, 2017
compared to $756.6 million at December 31, 2016.
Total deposits increased $27.2 million, or 3.9%, to $725.5
million at March 31, 2017 compared to $698.2 million at December
31, 2016. There were increases of $11.3 million in NOW accounts,
$9.8 million in demand deposits, $6.1 million in savings accounts
and $2.6 million in time deposits, partially offset by decreases of
$1.5 million in money market accounts and $1.1 million in brokered
deposits. Due to the evolving interest rate environment and recent
interest rate hikes by the FRB over the past year, the Bank
continues to monitor the portfolio of deposit products by being
selective on offering promotional interest rates and has
concentrated its efforts on increasing noninterest-bearing accounts
by building strong customer relationships. To stimulate deposit
growth and keep maturing certificates from leaving the Bank, the
Chairman’s Challenge promotional deposit program has continued in
the current period.
Short-term borrowings decreased $2.2 million, or 8.1%, to $24.8
million at March 31, 2017 compared to $27.0 million at December 31,
2016. At March 31, 2017, short-term borrowings were comprised of
$24.8 million of securities sold under agreements to repurchase
compared to $27.0 million at December 31, 2016. The decrease is
related to business deposit customers whose funds, above designated
target balances, are transferred into an overnight interest-earning
investment account by purchasing securities from the Bank’s
investment portfolio under an agreement to repurchase. Other
borrowed funds decreased $3.5 million due to a FHLB long-term
borrowing maturing and paying off during the current period. As a
result of the FHLB matured long-term borrowing, the weighted
average interest rate on long-term borrowings increased 12 basis
points from 1.80% to 1.92% in the current period.
Stockholders’ Equity. Stockholders’
equity increased $1.1 million, or 1.2%, to $90.6 million at March
31, 2017 compared to $89.5 million at December 31, 2016. During the
period, net income was $1.7 million and the Company paid $899,000
in dividends to stockholders.
About CB Financial Services, Inc
CB Financial Services, Inc. is the bank holding company for
Community Bank, a Pennsylvania-chartered commercial bank. Community
Bank operates 16 offices in Greene, Allegheny, Washington, Fayette,
and Westmoreland Counties in southwestern Pennsylvania. Community
Bank offers a broad array of retail and commercial lending and
deposit services and provides commercial and personal insurance
brokerage services through Exchange Underwriters, Inc., its wholly
owned subsidiary. Financial highlights of the Company are
attached.
For more information about CB and Community Bank, visit our
website at www.communitybank.tv.
Statements contained in this press release that are not
historical facts may constitute forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995 and such forward-looking statements are subject to significant
risks and uncertainties. The Company intends such forward-looking
statements to be covered by the safe harbor provisions contained in
the Act. The Company’s ability to predict results or the actual
effect of future plans or strategies is inherently uncertain.
Factors which could have a material adverse effect on the
operations and future prospects of the Company and its subsidiaries
include, but are not limited to, changes in market interest rates,
general economic conditions, changes in federal and state
regulation, actions by our competitors, loan delinquency rates, our
ability to control costs and expenses, and other factors that may
be described in the Company’s periodic reports as filed with the
Securities and Exchange Commission. These risks and uncertainties
should be considered in evaluating forward-looking statements and
undue reliance should not be placed on such statements. The Company
assumes no obligation to update any forward-looking statements
except as may be required by applicable law or regulation.
|
|
|
|
|
|
|
SELECTED FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
(Dollars in thousands,
except share and per share data) |
|
March 31, |
|
|
December 31, |
|
Selected Financial
Condition Data: |
|
2017 |
|
|
2016 |
|
Total Assets |
|
$ |
868,823 |
|
|
$ |
846,075 |
|
|
Cash and Cash
Equivalents |
|
|
35,595 |
|
|
|
14,282 |
|
|
Securities
Available-for-Sale |
|
|
114,521 |
|
|
|
106,208 |
|
|
|
|
|
|
|
|
|
Loans |
|
|
|
|
|
|
Real
Estate: |
|
|
|
|
|
|
Residential |
|
|
271,383 |
|
|
|
271,588 |
|
|
Commercial |
|
|
193,704 |
|
|
|
201,010 |
|
|
Construction |
|
|
13,338 |
|
|
|
10,646 |
|
|
Commercial and Industrial |
|
|
83,567 |
|
|
|
80,812 |
|
|
Consumer |
|
|
109,011 |
|
|
|
114,204 |
|
|
Other |
|
|
3,580 |
|
|
|
3,637 |
|
|
Total
Loans |
|
|
674,583 |
|
|
|
681,897 |
|
|
Allowance
for Loan Losses |
|
|
7,785 |
|
|
|
7,803 |
|
|
Loans,
Net |
|
|
666,798 |
|
|
|
674,094 |
|
|
|
|
|
|
|
|
|
Premises and Equipment,
Net |
|
|
15,505 |
|
|
|
14,132 |
|
|
Goodwill and Core
Deposit Intangible |
|
|
8,638 |
|
|
|
8,772 |
|
|
Deposits |
|
|
725,461 |
|
|
|
698,218 |
|
|
Borrowings |
|
|
49,328 |
|
|
|
55,027 |
|
|
Stockholders'
Equity |
|
|
90,574 |
|
|
|
89,469 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
Selected Operations
Data: |
|
2017 |
|
|
2016 |
|
Interest and Dividend
Income |
|
$ |
7,791 |
|
|
$ |
8,122 |
|
|
Interest Expense |
|
|
796 |
|
|
|
703 |
|
|
Net Interest
Income |
|
|
6,995 |
|
|
|
7,419 |
|
|
Provision for Loan
Losses |
|
|
420 |
|
|
|
850 |
|
|
Net Interest Income
After Provision for Loan Losses |
|
|
6,575 |
|
|
|
6,569 |
|
|
Noninterest
Income: |
|
|
|
|
|
|
Service
Fees on Deposit Accounts |
|
|
584 |
|
|
|
586 |
|
|
Insurance
Commissions |
|
|
1,086 |
|
|
|
872 |
|
|
Other
Commissions |
|
|
104 |
|
|
|
117 |
|
|
Net Gains
on Sales of Loans |
|
|
90 |
|
|
|
125 |
|
|
Net Gains
on Sales of Investments |
|
|
52 |
|
|
|
- |
|
|
Net Gains
on Purchased Tax Credits |
|
|
14 |
|
|
|
- |
|
|
Income
from Bank-Owned Life Insurance |
|
|
116 |
|
|
|
120 |
|
|
Other |
|
|
30 |
|
|
|
28 |
|
|
Total
noninterest income |
|
|
2,076 |
|
|
|
1,848 |
|
|
|
|
|
|
|
|
|
Noninterest Expense: |
|
|
|
|
|
|
Salaries
and Employee Benefits |
|
|
3,489 |
|
|
|
3,369 |
|
|
Occupancy |
|
|
548 |
|
|
|
474 |
|
|
Equipment |
|
|
439 |
|
|
|
422 |
|
|
FDIC
Assessment |
|
|
81 |
|
|
|
126 |
|
|
PA Shares
Tax |
|
|
190 |
|
|
|
202 |
|
|
Contracted Services |
|
|
132 |
|
|
|
133 |
|
|
Legal and
Professional Fees |
|
|
141 |
|
|
|
141 |
|
|
Advertising |
|
|
125 |
|
|
|
165 |
|
|
Bankcard
Processing Expense |
|
|
123 |
|
|
|
112 |
|
|
Other
Real Estate Owned Expense (Income) |
|
|
5 |
|
|
|
(545 |
) |
|
Amortization of Core Deposit Intangible |
|
|
134 |
|
|
|
134 |
|
|
Other |
|
|
810 |
|
|
|
781 |
|
|
Total
noninterest expense |
|
|
6,217 |
|
|
|
5,514 |
|
|
Income Before Income
Taxes |
|
|
2,434 |
|
|
|
2,903 |
|
|
Income Taxes |
|
|
730 |
|
|
|
858 |
|
|
Net Income |
|
$ |
1,704 |
|
|
$ |
2,045 |
|
|
|
|
|
|
|
|
|
Dividends Per
Share |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
Earnings Per Share -
Basic |
|
|
0.42 |
|
|
|
0.50 |
|
|
Earnings Per Share -
Diluted |
|
|
0.42 |
|
|
|
0.50 |
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding - Basic |
|
|
4,087,289 |
|
|
|
4,081,017 |
|
|
Weighted Average Shares
Outstanding - Diluted |
|
|
4,098,276 |
|
|
|
4,081,869 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
Selected Financial
Ratios(1): |
|
2017 |
|
|
2016 |
|
Return on Average
Assets |
|
|
0.81 |
|
% |
|
0.98 |
|
% |
Return on Average
Equity |
|
|
7.66 |
|
|
|
9.36 |
|
|
Average
Interest-Earning Assets to Average Interest-Bearing
Liabilities |
|
|
133.86 |
|
|
|
134.15 |
|
|
Average Equity to
Average Assets |
|
|
10.56 |
|
|
|
10.51 |
|
|
Net Interest Rate
Spread |
|
|
3.48 |
|
|
|
3.78 |
|
|
Net Interest
Margin |
|
|
3.62 |
|
|
|
3.90 |
|
|
Net Charge-Offs to
Average Loans |
|
|
0.26 |
|
|
|
0.22 |
|
|
Efficiency Ratio |
|
|
68.54 |
|
|
|
59.50 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
Allowance For Loan
Losses to Total Loans (2) |
|
|
1.15 |
|
% |
|
1.14 |
|
% |
Allowance For Loan
Losses to Nonperforming Loans (2) |
|
|
103.52 |
|
|
|
92.60 |
|
|
Allowance For Loan
Losses and Accrued Credit Mark to Total Loans (3) |
|
|
1.36 |
|
|
|
1.38 |
|
|
Allowance For Loan
Losses and Accrued Credit Mark to Nonperforming Loans (3) |
|
|
122.22 |
|
|
|
112.06 |
|
|
Nonperforming Loans to
Total Loans |
|
|
1.11 |
|
|
|
1.24 |
|
|
Nonperforming Assets to
Total Assets |
|
|
0.90 |
|
|
|
1.02 |
|
|
Common Equity Tier 1
Capital (to Risk Weighted Assets) (4) |
|
|
13.48 |
|
|
|
13.38 |
|
|
Tier 1 Capital (to Risk
Weighted Assets) (4) |
|
|
13.48 |
|
|
|
13.38 |
|
|
Total Capital (to Risk
Weighted Assets) (4) |
|
|
14.73 |
|
|
|
14.63 |
|
|
Tier 1 Leverage (to
Adjusted Total Assets) (4) |
|
|
9.70 |
|
|
|
9.80 |
|
|
Common Equity Tier 1
Capital (to Risk Weighted Assets) (5) |
|
|
13.86 |
|
|
|
13.72 |
|
|
Tier 1 Capital (to Risk
Weighted Assets) (5) |
|
|
13.86 |
|
|
|
13.72 |
|
|
Total Capital (to Risk
Weighted Assets) (5) |
|
|
15.13 |
|
|
|
14.99 |
|
|
Tier 1 Leverage (to
Adjusted Total Assets) (5) |
|
|
9.99 |
|
|
|
10.07 |
|
|
Book Value Per
Share |
|
$ |
22.16 |
|
|
$ |
21.89 |
|
|
Outstanding Shares |
|
|
4,088,025 |
|
|
|
4,086,625 |
|
|
|
|
|
|
|
|
|
(1) Interim period
ratios are calculated on an annualized basis. |
|
|
|
|
|
|
(2) Loans
acquired in connection with the merger with FedFirst Financial
Corporation were recorded at their estimated fair value at the
acquisition date and did not include a carryover of the
pre-merger allowance for loan losses. |
(3)
Accrued credit mark for loans acquired at fair market value in
connection with the merger with FedFirst Financial Corporation has
been included in the calculation of the ratios. |
(4) Capital ratios are
for Community Bank only. |
|
|
|
|
|
|
(5) Capital ratios are
for CB Financial Services, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: |
|
|
|
|
|
|
Certain
items previously reported may have been reclassified to conform
with the current reporting period’s format. |
|
|
|
AVERAGE BALANCES AND YIELDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following table presents information regarding average balances of
assets and liabilities, the total dollar amounts of interest income
and dividends from average interest-earning assets, the total
dollar amounts of interest expense on average interest-bearing
liabilities, and the resulting average yields and costs. Average
balances are derived from daily balances over the periods
indicated. The yields set forth below include the effect of
deferred fees, discounts, and premiums that are amortized or
accreted to interest income or interest expense. Tax-equivalent
yield adjustments have been made for tax exempt loan and securities
income utilizing a marginal federal tax rate of 34%. As such,
amounts will not agree to income as reported in the consolidated
financial statements. Average balances for loans are net of the
allowance for loan losses, but include nonaccrual loans. The yields
and costs for the periods indicated are derived by dividing income
or expense by the average balances of assets or liabilities,
respectively, for the periods presented. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) (Unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
Average |
|
and |
|
Yield/ |
|
Average |
|
and |
|
Yield/ |
|
|
|
|
|
Balance |
|
Dividends |
|
Cost (4) |
|
Balance |
|
Dividends |
|
Cost (4) |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
Net |
$ |
666,961 |
|
$ |
7,164 |
|
4.36 |
% |
|
$ |
679,494 |
|
$ |
7,527 |
|
4.46 |
% |
|
|
Investment
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
76,044 |
|
|
361 |
|
1.90 |
|
|
|
55,585 |
|
|
324 |
|
2.33 |
|
|
|
|
Exempt From
Federal Tax |
|
35,593 |
|
|
322 |
|
3.62 |
|
|
|
38,255 |
|
|
387 |
|
4.05 |
|
|
|
Other
Interest-Earning Assets |
|
19,567 |
|
|
71 |
|
1.47 |
|
|
|
8,750 |
|
|
41 |
|
1.88 |
|
|
|
|
Total
Interest-Earning Assets |
|
798,165 |
|
|
7,918 |
|
4.02 |
|
|
|
782,084 |
|
|
8,279 |
|
4.26 |
|
|
Noninterest-Earning Assets |
|
56,302 |
|
|
|
|
|
|
|
54,310 |
|
|
|
|
|
|
|
|
Total
Assets |
$ |
854,467 |
|
|
|
|
|
|
$ |
836,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Demand Deposits |
$ |
118,548 |
|
|
70 |
|
0.24 |
% |
|
$ |
117,675 |
|
|
49 |
|
0.17 |
% |
|
|
Savings |
|
124,533 |
|
|
56 |
|
0.18 |
|
|
|
123,344 |
|
|
56 |
|
0.18 |
|
|
|
Money
Market |
|
142,557 |
|
|
93 |
|
0.26 |
|
|
|
146,286 |
|
|
89 |
|
0.24 |
|
|
|
Time
Deposits |
|
157,903 |
|
|
436 |
|
1.12 |
|
|
|
143,346 |
|
|
367 |
|
1.03 |
|
|
|
|
Total
Interest-Bearing Deposits |
|
543,541 |
|
|
655 |
|
0.49 |
|
|
|
530,651 |
|
|
561 |
|
0.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
52,727 |
|
|
141 |
|
1.08 |
|
|
|
52,329 |
|
|
142 |
|
1.09 |
|
|
|
|
Total
Interest-Bearing Liabilities |
|
596,268 |
|
|
796 |
|
0.54 |
|
|
|
582,980 |
|
|
703 |
|
0.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing Demand Deposits |
|
164,459 |
|
|
|
|
|
|
|
161,255 |
|
|
|
|
|
|
Other
Liabilities |
|
3,482 |
|
|
|
|
|
|
|
4,288 |
|
|
|
|
|
|
|
|
Total
Liabilities |
|
764,209 |
|
|
|
|
|
|
|
748,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
90,258 |
|
|
|
|
|
|
|
87,871 |
|
|
|
|
|
|
|
|
Total
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
$ |
854,467 |
|
|
|
|
|
|
$ |
836,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Income |
|
|
$ |
7,122 |
|
|
|
|
|
|
$ |
7,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Rate Spread (1) |
|
|
|
|
3.48 |
% |
|
|
|
|
|
3.78 |
% |
|
Net
Interest-Earning Assets (2) |
$ |
201,897 |
|
|
|
|
|
|
$ |
199,104 |
|
|
|
|
|
|
Net
Interest Margin (3) |
|
|
|
|
3.62 |
|
|
|
|
|
|
3.90 |
|
|
Return on
Average Assets |
|
|
|
|
0.81 |
|
|
|
|
|
|
0.98 |
|
|
Return on
Average Equity |
|
|
|
|
7.66 |
|
|
|
|
|
|
9.36 |
|
|
Average
Equity to Average Assets |
|
|
|
|
10.56 |
|
|
|
|
|
|
10.51 |
|
|
Average
Interest-Earning Assets to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Interest-Bearing Liabilities |
|
|
|
|
133.86 |
|
|
|
|
|
|
134.15 |
|
|
____________ |
|
(1) Net
interest rate spread represents the difference between the weighted
average yield on interest-earning assets and the weighted average
cost of interest-bearing liabilities. |
|
(2) Net
interest-earning assets represent total interest-earning assets
less total interest-bearing liabilities. |
|
(3) Net
interest margin represents net interest income divided by average
total interest-earning assets. |
|
(4)
Annualized. |
|
Contact:
Barron P. McCune, Jr.
Vice Chairman, President and Chief Executive Officer
Phone: (724) 225-2400
Fax: (724) 225-4903
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