PRINCE
GEORGE, Va., July 31,
2024 /PRNewswire/ -- Touchstone Bankshares, Inc. (the
"Company") (OTC Pink: TSBA), and its wholly owned subsidiary,
Touchstone Bank (the "Bank"), reported unaudited results for the
three and six months ended June 30,
2024.
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The Company reported net income available to common shareholders
of $451 thousand for the three months
ended June 30, 2024.
Basic and diluted earnings
per common share for the three months ended
June 30, 2024, was $0.14,
while return on average assets (annualized), return on average
common equity (annualized) and the efficiency ratio was 0.27%,
4.08%, and 87%, respectively. By comparison, the Company reported
net income available to common shareholders for the three months
ended June 30, 2023 of $285 thousand, and basic and diluted earnings per
common share was $0.09. Return on
average assets (annualized), return on average common equity
(annualized), and the efficiency ratio was 0.18%, 2.61%, and 93%,
respectively, for the three months ended June 30, 2023.
The Company's results of operations for the three months ended
June 30, 2024 were negatively
impacted by incurring $186 thousand
in provision for credit losses and $202
thousand in merger related expenses in connection with its
pending merger with First National Corporation ("First National")
(NASDAQ: FXNC). Excluding the impact of the merger related
expenses, for the three months ended June
30, 2024, the Company would have reported adjusted net
income available to common shareholders of $611 thousand, adjusted basic
and diluted earnings per common share of
$0.19, and an adjusted return on
average assets (annualized), an adjusted return on average common
equity (annualized) and an adjusted efficiency ratio of 0.37%,
5.52%, and 83%, respectively.
For the six months ended June 30,
2024, the Company reported net income available to common
shareholders of $778 thousand. Basic
and diluted earnings per common share for
the six months ended June 30,
2024, was $0.24, while return on average assets
(annualized), return on average common equity (annualized) and the
efficiency ratio was 0.24%, 3.50%, and 90%, respectively. By
comparison, the Company reported net income available to common
shareholders for the six months ended June
30, 2023 of $89 thousand, and
basic and diluted earnings per common share was $0.03. Return on average assets (annualized),
return on average common equity (annualized), and the efficiency
ratio was 0.03%, 0.42%, and 91%, respectively, for the six months
ended June 30, 2023.
The Company's results of operations for the six months ended
June 30, 2024 were negatively
impacted by incurring $186 thousand
in provision for credit losses and $745
thousand in merger related expenses in connection with its
pending merger with First National. Excluding the impact of the
merger related expenses, for the six months ended June 30, 2024, the Company would have reported
adjusted net income available to common shareholders of
$1.4 million, adjusted
basic and diluted earnings per common
share of $0.42 and $0.41, respectively, and an adjusted return on
average assets (annualized), an adjusted return on average common
equity (annualized) and an adjusted efficiency ratio of 0.42%,
6.14%, and 84%, respectively.
As previously disclosed, on March
25, 2024, the Company and First National, the parent
holding company for First Bank, entered into an Agreement and Plan
of Merger (the "Agreement"), which provides that, subject to the
terms and conditions set forth in the Agreement, the Company will
merge with and into First National (the "Merger") with First
National being the surviving corporation in the Merger. In
addition, simultaneously with or immediately following the Merger
of the Company with and into First National, the Bank will be
merged with and into First Bank.
The Agreement and the transactions contemplated thereby are
subject to the approval of the respective shareholders of the
Company and First National, approval by the Bureau of Financial
Institutions division of the State Corporation Commission of the
Commonwealth of Virginia, and
other customary closing conditions. The Company and First National
anticipate closing the mergers in the fourth quarter of 2024.
James R. Black, the Company's
President and CEO commented, "I am pleased with the team's ability
to show continual improvement for the Company on a standalone basis
while simultaneously working with First National on merger
integration and transition processes. The team's resiliency and
efforts continue to demonstrate the cultural strength that fits
well with our future partner's culture and mission. Together the
combined entity should create and offer many valuable aspects for
all stakeholders. Again, I am thankful and proud of the hard work
and dedication from the Company's team, they are doing an amazing
job."
Earnings Analysis
Three Months Ended June 30,
2024, and 2023
As noted above, net income available to common shareholders for
the three months ended June 30, 2024,
was $451 thousand, or $0.14 per basic and diluted common share. This
represents an increase of $166
thousand, or 58.2%, when compared with the net income
available to common shareholders of $285
thousand, or $0.09 per basic
and diluted common share for the same period in 2023.
Net interest income for the three months ended June 30, 2024, and 2023, was $5.2 million and $5.1
million, respectively, representing an increase of
$44 thousand, or 0.9%. The net
interest margin increased 3 basis points from 3.44% in the second
quarter of 2023 to 3.47% for the same quarter in 2024 due primarily
to the yields on interest-earning assets continuing to reprice
higher, which was partially offset by repricing on interest-bearing
liabilities driven by competitive pressures in the higher interest
rate environment and the negative banking industry developments
associated with multiple high-profile bank failures that occurred
during the first six months of 2023. While the Company's
overall cost of funds for the second quarter of 2024 increased as
compared to prior periods, the yields on interest-earning assets
continued to reprice higher and at a slightly faster pace. As a
result, net interest income increased by $58
thousand, or 1.1%, and the net interest margin increased by
1 basis point when compared to the first quarter of 2024.
The Company recorded $186 thousand
in provision for credit losses for the three months ended
June 30, 2024, an increase of
$86 thousand, or 86.0%, when compared
to the same period in 2023. The increase in the provision for
credit losses was primarily due to the Company recording a full
impairment in the amount of $243
thousand on one C&I loan that was moved to nonaccrual
status and downgraded to a risk grade 8 late in the second quarter
of 2024 and a higher required reserve on unfunded credit
commitments, which were partially offset by a decrease in total
loans and recording net (recoveries) during the second quarter of
2024 as compared to recording net charge-offs for the same period
in 2023. As of June 30, 2024,
the Company's credit quality metrics remained strong with minimal
nonperforming assets and past due loans.
Noninterest income totaled $871
thousand for the three months ended June 30, 2024, a decrease of
$85 thousand, or 8.9%, when compared to the same period in 2023.
The following table is a comparison of the components
of noninterest income for the three
months ended June 30, 2024, and 2023:
|
|
For the Three Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Change
$
|
|
Change
%
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
$
511
|
|
$
506
|
|
$
5
|
|
1.0 %
|
Secondary market
origination fees
|
|
41
|
|
170
|
|
(129)
|
|
-75.9 %
|
Bank-owned life
insurance
|
|
40
|
|
75
|
|
(35)
|
|
-46.7 %
|
Bank-owned life
insurance death benefits
|
|
-
|
|
19
|
|
(19)
|
|
-100.0 %
|
Gain on the sale of
other real estate owned
|
|
13
|
|
-
|
|
13
|
|
100.0 %
|
Other operating
income
|
|
266
|
|
186
|
|
80
|
|
43.0 %
|
Total
|
|
$
871
|
|
$
956
|
|
$
(85)
|
|
-8.9 %
|
Notable variances for the noninterest income table above
are as follows:
- The decrease in secondary market origination fees was primarily
due to the continued slowing of home refinancing and purchases,
partially offset by prior year investments in personnel and related
products and services.
- The decrease in bank-owned life insurance was primarily due to
adjustments recorded during the second quarter of 2024 to adjust
the recorded amount that can be realized under the life insurance
contracts to their cash surrender values as reported by the
insurance carriers.
- The increase in other operating income was primarily due to
increases in income from other investments, partially offset by a
decrease in merchant services fees.
Noninterest expense totaled $5.2
million for the three months ended June 30, 2024, a decrease of
$417 thousand, or 7.4%, when compared to the same period in 2023.
The following table is a comparison of the components of
noninterest expense for the three months ended June 30, 2024, and 2023:
|
|
For the Three Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Change
$
|
|
Change
%
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
$
2,642
|
|
$
3,103
|
|
$
(461)
|
|
-14.9 %
|
Occupancy
expense
|
|
300
|
|
319
|
|
(19)
|
|
-6.0 %
|
Furniture and equipment
expense
|
|
270
|
|
282
|
|
(12)
|
|
-4.3 %
|
Data
processing
|
|
393
|
|
346
|
|
47
|
|
13.6 %
|
Telecommunications
|
|
147
|
|
138
|
|
9
|
|
6.5 %
|
Legal and professional
fees
|
|
143
|
|
187
|
|
(44)
|
|
-23.5 %
|
FDIC insurance
assessments
|
|
85
|
|
113
|
|
(28)
|
|
-24.8 %
|
Merger related
expenses
|
|
202
|
|
-
|
|
202
|
|
100.0 %
|
Other noninterest
expenses
|
|
1,035
|
|
1,146
|
|
(111)
|
|
-9.7 %
|
Total
|
|
$
5,217
|
|
$
5,634
|
|
$
(417)
|
|
-7.4 %
|
Notable variances for the noninterest expense table above are as
follows:
- The decrease in salaries and employee benefits was primarily
due to managements focused efforts to streamline operations and
improve efficiencies after the core conversion was completed during
the first quarter of 2023. These efforts lead to a reduction in the
work force that was implemented during the third quarter of 2023,
with full cost savings becoming accretive in the fourth quarter of
2023. In addition, this decrease was driven by employee attrition
during the second quarter of 2024, and lower expenses related to
bonus accruals, payroll taxes, benefit costs including 401(k)
contributions, and deferred incentive compensation, which were
partially offset by merit increases, wage inflation, and a lower
impact from deferred loan origination costs.
- The increase in data processing was primarily due to additional
services, as well as volume based and other one-time charges.
- The decrease in legal and professional fees was primarily due
to lower expenses related to professional fees, which was partially
offset by higher expenses related to legal, audit and
compliance.
- The decrease in FDIC insurance assessments was primarily due to
a decrease in the Bank's assessment base, which was partially
offset by an increase to the initial base deposit insurance
assessment rate schedules that began with the first quarterly
assessment period of 2023.
- The increase in merger related expenses was primarily due to
legal fees, as well as other costs associated with the pending
merger with First National that were incurred during the second
quarter of 2024, as compared to no merger related expenses being
incurred during the same period of 2023.
- The decrease in other noninterest expenses was primarily due to
lower expenses related to insurance, deposits, meals and
entertainment, marketing and advertising, miscellaneous other
operating, and core deposit intangible amortization, which were
partially offset by higher expenses related to state franchise
taxes.
Six Months Ended June 30, 2024,
and 2023
As noted above, net income available to common shareholders for
the six months ended June 30, 2024,
was $778 thousand, or $0.24 per basic and diluted common share. This
represents an increase of $689
thousand, or 774.2%, when compared with the net income
available to common shareholders of $89
thousand, or $0.03 per basic
and diluted common share for the same period in 2023.
Net interest income for the six months ended June 30, 2024, and 2023, was $10.2 million and $10.5
million, respectively, representing a decrease of
$295 thousand, or 2.8%. The net
interest margin decreased 15 basis points from 3.61% in the first
six months of 2023 to 3.46% for the same period in 2024 due
primarily to material repricing on interest-bearing liabilities
driven by competitive pressures in the higher interest rate
environment and the negative banking industry developments
associated with multiple high-profile bank failures that occurred
during the first six months of 2023 and the time needed for
interest-earning assets to reprice higher.
The Company recorded $186 thousand
in provision for credit losses for the six months ended
June 30, 2024, a decrease of
$923 thousand, or 83.2%, when
compared to the same period in 2023. The decrease in the provision
for credit losses was primarily due to $1.0
million in provision for credit losses related to the
Company's previous investment in Signature Bank of New York subordinated debt that was fully
charged-off in the first quarter of 2023 and subsequently sold in
the fourth quarter of 2023, a decrease in total loans, and
recording net (recoveries) during the first six months of 2024 as
compared to recording net charge-offs for the same period in 2023,
which were partially offset by the Company recording a full
impairment in the amount of $243
thousand on one C&I loan that was moved to nonaccrual
status and downgraded to a risk grade 8 late in the second quarter
of 2024 and a higher required reserve on unfunded credit
commitments.
Noninterest income totaled $1.7
million for the six months ended June
30, 2024, a decrease of
$39 thousand, or 2.3%, when compared to the same period in 2023.
The following table is a comparison of the components
of noninterest income for the six
months ended June 30, 2024, and 2023:
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Change
$
|
|
Change
%
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
|
$
1,003
|
|
$
979
|
|
$
24
|
|
2.5 %
|
Secondary market
origination fees
|
|
100
|
|
170
|
|
(70)
|
|
-41.2 %
|
Bank-owned life
insurance
|
|
100
|
|
150
|
|
(50)
|
|
-33.3 %
|
Bank-owned life
insurance death benefits
|
|
-
|
|
19
|
|
(19)
|
|
-100.0 %
|
Gain on the sale of
other real estate owned
|
|
13
|
|
-
|
|
13
|
|
100.0 %
|
Other operating
income
|
|
469
|
|
406
|
|
63
|
|
15.5 %
|
Total
|
|
$
1,685
|
|
$
1,724
|
|
$
(39)
|
|
-2.3 %
|
Notable variances for the noninterest income table above are as
follows:
- The increase in service charges on deposit accounts was
primarily due to an increase in ATM and debit card interchange
fees, partially offset by small business and commercial accounts
receiving higher earnings credit rates which offset previous fee
opportunities.
- The decrease in secondary market origination fees was primarily
due to the continued slowing of home refinancing and purchases,
partially offset by prior year investments in personnel and related
products and services.
- The decrease in bank-owned life insurance was primarily due to
adjustments recorded during the first six months of 2024 to adjust
the recorded amount that can be realized under the life insurance
contracts to their cash surrender values as reported by the
insurance carriers.
- The increase in other operating income was primarily due to
increases in income from other investments, partially offset by a
decrease in merchant services fees.
Noninterest expense totaled $10.7
million for the six months ended June
30, 2024, a decrease of
$458 thousand, or 4.1%, when compared to the same period in 2023.
The following table is a comparison of the components of
noninterest expense for the six months ended June 30, 2024, and 2023:
|
|
For the Six
Months Ended
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Change
$
|
|
Change
%
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
$
5,276
|
|
$
6,185
|
|
$
(909)
|
|
-14.7 %
|
Occupancy
expense
|
|
636
|
|
632
|
|
4
|
|
0.6 %
|
Furniture and equipment
expense
|
|
550
|
|
559
|
|
(9)
|
|
-1.6 %
|
Data
processing
|
|
758
|
|
653
|
|
105
|
|
16.1 %
|
Telecommunications
|
|
293
|
|
287
|
|
6
|
|
2.1 %
|
Legal and professional
fees
|
|
278
|
|
362
|
|
(84)
|
|
-23.2 %
|
FDIC insurance
assessments
|
|
183
|
|
166
|
|
17
|
|
10.2 %
|
Merger related
expenses
|
|
745
|
|
-
|
|
745
|
|
100.0 %
|
Other noninterest
expenses
|
|
1,982
|
|
2,315
|
|
(333)
|
|
-14.4 %
|
Total
|
|
$
10,701
|
|
$
11,159
|
|
$
(458)
|
|
-4.1 %
|
Notable variances for the noninterest expense table above are as
follows:
- The decrease in salaries and employee benefits was primarily
due to managements focused efforts to streamline operations and
improve efficiencies after the core conversion was completed during
the first quarter of 2023. These efforts lead to a reduction in the
work force that was implemented during the third quarter of 2023,
with full cost savings becoming accretive in the fourth quarter of
2023. In addition, this decrease was driven by employee attrition
during the second quarter of 2024, and lower expenses related to
bonus accruals, payroll taxes, benefit costs including 401(k)
contributions, and deferred incentive compensation, which were
partially offset by merit increases, wage inflation, and a lower
impact from deferred loan origination costs.
- The increase in data processing was primarily due to additional
services, as well as volume based and other one-time charges.
- The decrease in legal and professional fees was primarily due
to lower expenses related to professional fees, which was partially
offset by higher expenses related to legal, audit and
compliance.
- The increase in merger related expenses was primarily due to
legal and investment banker fees, as well as other costs associated
with the pending merger with First National that were incurred
during the first six months of 2024, as compared to no merger
related expenses being incurred during the same period of
2023.
- The decrease in other noninterest expenses was primarily due to
lower expenses related to printing and supplies, network management
services, marketing and advertising, loans, meals and
entertainment, other losses, miscellaneous other operating, and
core deposit intangible amortization, which were partially offset
by higher expenses related to internet banking, shareholder
relations, customer service, and state franchise taxes.
Balance Sheet
At June 30, 2024, total assets
were $662.7 million, compared to
$658.7 million at December 31, 2023, an increase of $4.0
million, or 0.6%.
Cash and cash equivalents as of June 30,
2024, were $57.7 million, an
increase of $15.4 million, or 36.4%,
from December 31, 2023. Key drivers
of this change were deposit growth outpacing loan growth and a
decrease in investment securities available for sale, at fair
value. Cash and cash equivalents represented 8.7% and 6.4% of total
assets as of June 30, 2024, and
December 31, 2023, respectively.
Investment securities available for sale, at fair value as of
June 30, 2024, were $70.7 million, a decrease of $2.5 million, or 3.4%, from December 31, 2023. Key drivers of this change
were scheduled payments of principal and an increase in unrealized
losses on the investment securities available for sale portfolio
because of increases in market interest rates.
Total loans as of June 30, 2024,
were $500.6 million, a decrease of
$8.2 million, or 1.6%, from
December 31, 2023. The key driver of
this change was higher than expected payoffs, which were partially
offset by organic growth. The Company's loan to deposit ratio was
91.6% as of June 30, 2024, as
compared to 93.8% as of December 31,
2023.
Total deposits as of June 30,
2024, were $546.7 million, an
increase of $4.5 million, or 0.8%,
from December 31, 2023. Key drivers
of this change were organic growth due to our continued focus on
total relationship banking, which was partially offset by deposit
outflows due to competitive pressures in the higher interest rate
environment. While the Company has continued to see the deposit mix
shift into higher yielding products, particularly interest-bearing
checking and money market accounts, the balance and level of
noninterest-bearing deposits to total deposits has remained
relatively stable. As of June 30,
2024, total noninterest-bearing deposits were $135.3 million, a decrease of $2.0 million, or 1.5%, from December 31, 2023. These deposits represented
24.7% and 25.3% of total deposits as of June
30, 2024, and December 31,
2023, respectively. As of June 30,
2024, and December 31, 2023,
there were no brokered deposits outstanding.
Total Federal Home Loan Bank borrowings as of June 30, 2024, were $49.0
million, representing no change from December 31, 2023.
Total subordinated debt, net of issuance costs as of
June 30, 2024, were $17.8 million, an increase of $55 thousand, or 0.3%, from December 31, 2023. The key driver of this change
was the amortization of the issuance costs. In August 2020, the Company issued $8.0 million of subordinated debt with a 10-year
maturity and
an initial 6.00% coupon. In February 2021, the Company
redeemed the $3.5 million of legacy subordinated
debt issued in February 2016, which
notes carried a 7% coupon. In January 2022, the Company issued an additional
$10.0 million of subordinated debt.
These notes have a maturity date of January
30, 2032, and carry an initial coupon of 4%.
Total shareholders' equity as of June 30, 2024, was $45.1
million, an increase of $282
thousand, or 0.6%, from December 31,
2023. Key drivers of this change were the net income
attributable to the Company for the six months ended June 30, 2024, and stock-based compensation
expense related to restricted stock awards, which were partially
offset by an increase in accumulated other comprehensive (loss),
net of tax. Total accumulated other comprehensive (loss), net of
tax as of June 30, 2024, was
$10.1 million, an increase of
$547 thousand, or 5.7%, from
December 31, 2023. The key driver of
this change was increases in market interest rates over the
comparable periods.
The Bank's Community Bank Leverage Ratio
was 9.92% as of June 30, 2024, as compared to
9.68% as of December 31, 2023. The
Bank continues to remain well capitalized as defined
by regulatory guidelines.
Asset Quality
The allowance for credit losses as of June 30, 2024, was $5.1
million, or 1.02%, of total loans, as compared to
$5.0 million as of December 31, 2023, or 0.98%, of total loans.
Loans past due 30 days or more and still accruing interest were
$287 thousand as of June 30, 2024, while nonaccrual loans, excluding
purchased credit deteriorated loans, totaled $490 thousand. The Company believes the current
level of the allowance for credit losses is adequate to
cover expected losses as credit metrics remain stable.
Source: Touchstone Bankshares, Inc.
About Touchstone Bankshares, Inc.
Touchstone Bankshares, Inc. (the "Company") is the bank holding
company for Touchstone Bank (the "Bank"). Most of
the Company's business
activities are conducted through the Bank.
The Bank is a full-service community bank
headquartered in Prince George,
Virginia. The Bank has ten branches serving
Southern and Central Virginia
and two branches and two loan centers
serving Northern North Carolina. Visit www.touchstone.bank for more information.
Forward-Looking Statements
In addition to historical information, this press release may
contain certain forward-looking statements as defined by
the Private Securities Litigation Reform
Act of 1995. For this purpose, any statement that is not
a statement
of historical fact may be deemed to be a forward-looking statement. Forward-looking statements
are subject to numerous assumptions, risks and uncertainties, and
actual results could differ materially from historical results
or those anticipated by such statements. Factors that may
cause
actual results to differ materially from those contemplated by such forward-looking statements include, but are not
limited to, the completion and benefits of the Merger
with First National; the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the Agreement between the Company and
First National; the outcome of any legal proceedings that may be
instituted against the Company or First National; the possibility
that the proposed transaction will not close when expected or at
all because required regulatory, shareholder or other approvals are
not received or other conditions to the closing are not satisfied
on a timely basis or at all, or are obtained subject to conditions
that are not anticipated (and the risk that required regulatory
approvals may result in the imposition of conditions that could
adversely affect the combined company or the expected benefits of
the proposed transaction); the ability of the Company and First
National to meet expectations regarding the timing, completion and
accounting and tax treatments of the proposed transaction; the risk
that any announcements relating to the proposed transaction could
have adverse effects on the market price of the common stock of
either or both parties to the proposed transaction; the possibility
that the anticipated benefits of the proposed transaction will not
be realized when expected or at all, including as a result of the
impact of, or problems arising from, the integration of the two
companies or as a result of the strength of the economy and
competitive factors in the areas where the Company and First
National do business; certain restrictions during the pendency of
the proposed transaction that may impact the parties' ability to
pursue certain business opportunities or strategic transactions;
the possibility that the transaction may be more expensive to
complete than anticipated, including as a result of unexpected
factors or events; diversion of management's attention from ongoing
business operations and opportunities; the possibility that the
parties may be unable to achieve expected synergies and operating
efficiencies in the Merger within the expected timeframes or at all
and to successfully integrate the Company's operations and those of
First National, which may be more difficult, time-consuming or
costly than expected; revenues following the proposed transaction
may be lower than expected; the Company's and First National's
success in executing their respective business plans and strategies
and managing the risks involved in the foregoing; effects of the
announcement, pendency or completion of the proposed transaction on
the ability of the Company and First National to retain customers
and retain and hire key personnel and maintain relationships with
their suppliers, and on their operating results and businesses
generally;
changes in interest rates and general
economic conditions; the legislative/regulatory climate;
monetary and fiscal policies of the U.S. Government; the quality or
composition of the loan or investment securities portfolios; demand
for loan products; deposit flows; competition; demand for financial
services in the Company's market area; mergers, acquisitions and
dispositions; implementation of new technologies and the ability to
develop and maintain secure and reliable electronic systems; and
tax and accounting rules, principles, policies and guidelines.
|
|
|
|
|
|
|
|
|
|
|
Touchstone
Bankshares, Inc.
|
Consolidated
Financial Highlights
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
(in thousands, except
per share data)
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
Selected Operating
Data:
|
|
2024
|
|
2024
|
|
2023
|
|
2023
|
|
2023
|
Net interest
income
|
|
$
5,152
|
|
$
5,094
|
|
$
5,229
|
|
$
5,078
|
|
$
5,108
|
Provision for (recovery
of) credit losses
|
|
186
|
|
-
|
|
(206)
|
|
75
|
|
100
|
Noninterest
income
|
|
871
|
|
814
|
|
876
|
|
930
|
|
956
|
Noninterest
expense
|
|
5,217
|
|
5,483
|
|
5,075
|
|
5,321
|
|
5,634
|
Income before income
tax
|
|
620
|
|
425
|
|
1,236
|
|
612
|
|
330
|
Income tax
expense
|
|
169
|
|
98
|
|
170
|
|
159
|
|
45
|
Net income
|
|
451
|
|
327
|
|
1,066
|
|
453
|
|
285
|
Less: Preferred
dividends
|
|
-
|
|
-
|
|
9
|
|
-
|
|
-
|
Net income available to
common shareholders
|
|
$
451
|
|
$
327
|
|
$
1,057
|
|
$
453
|
|
$
285
|
|
|
|
|
|
|
|
|
|
|
|
Income per share
available to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.14
|
|
$
0.10
|
|
$
0.32
|
|
$
0.14
|
|
$
0.09
|
Diluted
|
|
$
0.14
|
|
$
0.10
|
|
$
0.32
|
|
$
0.14
|
|
$
0.09
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding, basic
|
|
3,271,219
|
|
3,270,982
|
|
3,273,588
|
|
3,260,093
|
|
3,258,230
|
Average common shares
outstanding, diluted
|
|
3,300,103
|
|
3,300,130
|
|
3,302,736
|
|
3,289,241
|
|
3,287,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
Net interest
income
|
|
$
10,247
|
|
$
10,542
|
|
|
|
|
|
|
Provision for credit
losses
|
|
186
|
|
1,109
|
|
|
|
|
|
|
Noninterest
income
|
|
1,685
|
|
1,724
|
|
|
|
|
|
|
Noninterest
expense
|
|
10,701
|
|
11,159
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
1,045
|
|
(2)
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
267
|
|
(91)
|
|
|
|
|
|
|
Net
income
|
|
778
|
|
89
|
|
|
|
|
|
|
Less: Preferred
dividends
|
|
-
|
|
-
|
|
|
|
|
|
|
Net income available to
common shareholders
|
|
$
778
|
|
$
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share
available to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.24
|
|
$
0.03
|
|
|
|
|
|
|
Diluted
|
|
$
0.24
|
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding, basic
|
|
3,271,103
|
|
3,253,077
|
|
|
|
|
|
|
Average common shares
outstanding, diluted
|
|
3,300,119
|
|
3,282,225
|
|
|
|
|
|
|
Touchstone
Bankshares, Inc.
|
Consolidated
Financial Highlights (continued)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per share data)
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
Balance Sheet
Data:
|
|
2024
|
|
2024
|
|
2023
|
|
2023
|
|
2023
|
Total assets
|
|
$
662,717
|
|
$
673,182
|
|
$
658,695
|
|
$
660,883
|
|
$
644,415
|
Total loans
|
|
500,571
|
|
506,028
|
|
508,810
|
|
512,478
|
|
505,661
|
Allowance for credit
losses
|
|
(5,089)
|
|
(4,981)
|
|
(4,979)
|
|
(4,999)
|
|
(4,973)
|
Core deposit
intangible
|
|
285
|
|
326
|
|
369
|
|
416
|
|
464
|
Deposits
|
|
546,732
|
|
557,598
|
|
542,239
|
|
549,876
|
|
529,752
|
Borrowings
|
|
49,000
|
|
49,000
|
|
49,000
|
|
49,000
|
|
51,000
|
Subordinated debt, net
of issuance costs
|
|
17,787
|
|
17,759
|
|
17,731
|
|
17,704
|
|
17,676
|
Preferred
stock
|
|
58
|
|
58
|
|
58
|
|
58
|
|
58
|
Other comprehensive
(loss)
|
|
(10,115)
|
|
(9,982)
|
|
(9,568)
|
|
(13,111)
|
|
(11,605)
|
Shareholders'
equity
|
|
45,091
|
|
44,750
|
|
44,809
|
|
41,209
|
|
42,208
|
Book value per common
share
|
|
$
13.77
|
|
$
13.67
|
|
$
13.68
|
|
$
12.61
|
|
$
12.94
|
Tangible book value per
common share
|
|
$
13.68
|
|
$
13.57
|
|
$
13.57
|
|
$
12.48
|
|
$
12.79
|
Total common shares
outstanding
|
|
3,271,442
|
|
3,270,141
|
|
3,270,676
|
|
3,263,794
|
|
3,258,230
|
Total preferred shares
outstanding
|
|
28,848
|
|
29,148
|
|
29,148
|
|
29,148
|
|
29,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
|
2024
|
|
2024
|
|
2023
|
|
2023
|
|
2023
|
Performance
Ratios:
|
|
(QTD
annualized)
|
|
(QTD
annualized)
|
|
(QTD
annualized)
|
|
(QTD
annualized)
|
|
(QTD
annualized)
|
Return on average
assets
|
|
0.27 %
|
|
0.20 %
|
|
0.63 %
|
|
0.28 %
|
|
0.18 %
|
Return on average
common equity
|
|
4.08 %
|
|
2.93 %
|
|
9.85 %
|
|
4.34 %
|
|
2.61 %
|
Net interest
margin
|
|
3.47 %
|
|
3.46 %
|
|
3.47 %
|
|
3.45 %
|
|
3.44 %
|
Overhead efficiency
(non-GAAP)
|
|
87 %
|
|
93 %
|
|
83 %
|
|
89 %
|
|
93 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
Performance
Ratios:
|
|
(YTD
Annualized)
|
|
(YTD
Annualized)
|
|
|
|
|
|
|
Return on average
assets
|
|
0.24 %
|
|
0.03 %
|
|
|
|
|
|
|
Return on average
common equity
|
|
3.50 %
|
|
0.42 %
|
|
|
|
|
|
|
Net interest
margin
|
|
3.46 %
|
|
3.61 %
|
|
|
|
|
|
|
Overhead efficiency
(non-GAAP)
|
|
90 %
|
|
91 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
Asset Quality
Data:
|
|
2024
|
|
2024
|
|
2023
|
|
2023
|
|
2023
|
Allowance for credit
losses
|
|
$
5,089
|
|
$
4,981
|
|
$
4,979
|
|
$
4,999
|
|
$
4,973
|
Nonperforming loans
(excluding PCD loans)
|
|
491
|
|
141
|
|
326
|
|
314
|
|
332
|
Other real estate
owned, net of allowance
|
|
-
|
|
32
|
|
-
|
|
-
|
|
-
|
Nonperforming
assets
|
|
491
|
|
173
|
|
326
|
|
314
|
|
332
|
Net (recoveries)
charge-offs, QTD
|
|
(3)
|
|
(2)
|
|
20
|
|
50
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses to total loans
|
|
1.02 %
|
|
0.98 %
|
|
0.98 %
|
|
0.98 %
|
|
0.98 %
|
Nonperforming loans to
total loans
|
|
0.10 %
|
|
0.03 %
|
|
0.06 %
|
|
0.06 %
|
|
0.07 %
|
Nonperforming assets to
total assets
|
|
0.07 %
|
|
0.03 %
|
|
0.05 %
|
|
0.05 %
|
|
0.05 %
|
YTD net charge-offs to
average loans, annualized
|
|
0.00 %
|
|
0.00 %
|
|
0.02 %
|
|
0.02 %
|
|
<0.01%
|
|
|
|
|
|
|
|
|
|
|
|
Community Bank
Leverage Ratio
|
|
9.92 %
|
|
9.89 %
|
|
9.68 %
|
|
9.71 %
|
|
9.99 %
|
Tangible common
equity/tangible assets ratio
|
|
6.76 %
|
|
6.59 %
|
|
6.74 %
|
|
6.17 %
|
|
6.47 %
|
|
|
Quarter to
Date
|
|
Year to
Date
|
(in thousands, except
per share data)
|
|
June
30,
|
|
June
30,
|
Reconciliation of
non-GAAP Financial Measures (1):
|
|
2024
|
|
2024
|
|
|
|
|
|
Net income before
one-time adjustments
|
|
$
451
|
|
$
778
|
Merger related
expenses, net of tax effect
|
|
160
|
|
589
|
Core earnings
(1)
|
|
$
611
|
|
$
1,367
|
|
|
|
|
|
Core earnings per share
available to common shareholders:
|
|
|
Basic
|
|
$
0.19
|
|
$
0.42
|
Diluted
|
|
$
0.19
|
|
$
0.41
|
|
|
|
|
|
Average common shares
outstanding, basic
|
|
3,271,219
|
|
3,271,103
|
Average common shares
outstanding, diluted
|
|
3,300,103
|
|
3,300,119
|
|
|
|
|
|
Performance
Ratios:
|
|
|
|
|
Return on average
assets (annualized)
|
|
0.37 %
|
|
0.42 %
|
Return on average
common equity (annualized)
|
|
5.52 %
|
|
6.14 %
|
Overhead efficiency
(non-GAAP)
|
|
83 %
|
|
84 %
|
|
|
|
|
|
(1) Core earnings is
determined by methods other than in accordance with U.S.
generally
|
accepted accounting
principles ("GAAP"). Non-GAAP measures should not be viewed
as
|
a substitute for
operating results determined in accordance with GAAP, nor are
they
|
|
necessarily comparable
to non-GAAP performance measures that may be presented by
other
|
companies.
|
|
|
|
|
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SOURCE Touchstone Bankshares, Inc.