WashingtonFirst Bankshares, Inc. (“WashingtonFirst” or the
“Company”) (NASDAQ: WFBI), the parent company of WashingtonFirst
Bank, WashingtonFirst Mortgage, and 1st Portfolio Inc., reports net
income of $5.3 million and $9.8 million for the three and six
months ended June 30, 2017, respectively. Earnings per share
were $0.40 and $0.74 per share on a fully-diluted basis for the
three and six months ended June 30, 2017, respectively,
resulting in 18% and 16% increases over the comparable periods last
year. Loans held for investment grew by $104.2 million to $1.6
billion, and total deposits increased $222.0 million, an increase
of 15%, to $1.7 billion during the first half of 2017. Net interest
margin increased 14 basis points to 3.51% for the three months
ended June 30, 2017 and 5 basis points to 3.49% for the six
months ended June 30, 2017, compared to the same periods in
2016. On July 3, 2017, the Company paid its 15th consecutive
quarterly cash dividend to its shareholders.
Core net income per diluted common share for the three and six
months ended June 30, 2017, was $0.42 and $0.76, respectively,
representing increases of 23.5% and 18.8%, respectively, compared
to the same periods in the prior year. Core net income is
calculated as net income adjusted for the after-tax impact of
merger expenses.
Commenting on the Company’s second quarter performance, Shaza
Andersen, the Company's President and CEO, said “Immediately
following the announcement of the decision to merge with Sandy
Spring Bancorp, our team began the work that will be needed to
ensure a smooth and successful closing; however, we never lost
sight of our commitments to deliver exceptional customer service
and enhance shareholder value. I am so pleased to report that even
with the added costs and attention associated with the merger, we
have been able to meet and exceed our financial performance goals.
Core net income for the second quarter were $5.7 million, or $0.42
per share on a fully diluted basis, an increase of 29% over the
prior quarter."
Return on average shareholders equity was 10.54% and 9.86%
during the three and six months ended June 30, 2017,
respectively, compared to 9.42% and 9.01% for the same periods last
year. Management attributed this increase to the continued organic
growth of the loan portfolio over the past twelve months. For the
three and six months ended June 30, 2017, net interest income
after provision for loan losses increased $2.6 million and $4.4
million, or 19% and 16%, over the same periods ended June 30,
2016.
Total assets reached $2.1 billion as of June 30, 2017, an
increase of 12% over the last twelve months. Net loans
held-for-investment and total deposits ended the first half of 2017
at $1.6 billion and $1.7 billion, respectively, representing
increases of 18% and 13%, respectively, over the same period last
year.
About The Company
WashingtonFirst Bankshares, Inc., headquartered in Reston,
Virginia, is the holding company for WashingtonFirst Bank, which
operates 19 full-service banking offices throughout the Washington,
D.C. metropolitan area. In addition, the Company provides wealth
management services through its subsidiary, 1st Portfolio Wealth
Advisors, and mortgage banking services through the Bank's
subsidiary, WashingtonFirst Mortgage Corporation. The Company's
common stock is traded on the NASDAQ Stock Market under the
quotation symbol "WFBI" and is included in the ABA NASDAQ Community
Bank Index and the Russell 2000® index. For more information about
the Company, please visit: www.wfbi.com.
Cautionary Statements About Forward-Looking
Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements of the goals, intentions, and
expectations of the Company as to future trends, plans, events,
results of operations and policies and regarding general economic
conditions. Forward-looking information is inherently subject to
risks and uncertainties, and actual results could differ materially
from those currently anticipated due to a number of factors which
include, but are not limited to, factors discussed in our Annual
Report on Form 10-K and in other documents we file with the
Securities and Exchange Commission from time to time. In some
cases, forward-looking statements can be identified by use of words
such as “may,” “will,” “anticipates,” “believes,” “expects,”
“plans,” “estimates,” “potential,” “continue,” “should,” and
similar words or phrases. These statements are based upon the
beliefs of the management of the Company as to the expected outcome
of future events, current and anticipated economic conditions,
nationally and in the Company’s market, and their impact on the
operations, assets and earnings of the Company, interest rates and
interest rate policy, competitive factors, judgments about the
ability of the Company to successfully integrate its operations
following significant transactions including, but not limited to,
mergers and acquisitions, the ability to avoid customer dislocation
during the period leading up to and following such transactions,
and other conditions which by their nature, are not susceptible to
accurate forecast and are subject to significant uncertainty.
Readers are cautioned against placing undue reliance on such
forward-looking statements. The Company assumes no obligation to
revise, update, or clarify forward-looking statements to reflect
events or conditions after the date of this release.
Additional Information About the Merger and Where to Find
It
In connection with the proposed merger transaction, Sandy Spring
Bancorp, Inc. filed with the Securities and Exchange Commission on
July 19, 2017 a Registration Statement on Form S-4 which
included a Preliminary Joint Proxy Statement of Sandy Spring and
the Company, and a Preliminary Prospectus of Sandy Spring, as well
as other relevant documents concerning the proposed transaction.
Shareholders are urged to read the Registration Statement, the
Preliminary Joint Proxy Statement/Prospectus, which is available
now, and the Final Joint Proxy Statement/Prospectus, when it
becomes available, regarding the merger and any other relevant
documents filed with the SEC, as well as any amendments or
supplements to those documents, because they contain or will
contain important information about Sandy Spring, the Company and
the proposed merger.
A free copy of the Joint Proxy Statement/Prospectus, as well as
other filings containing information about Sandy Spring and the
Company, may be obtained at the SEC’s Internet site
(http://www.sec.gov). You will also be able to obtain these
documents, free of charge, from Sandy Spring at
www.sandyspringbank.com under the tab “Investor Relations,” and
then under the heading “SEC Filings” or from the Company by
accessing the Company’s website at www.wfbi.com under the tab
“Investor Relations,” and then selecting “SEC Filings” under the
heading “Documents and Filings.” Alternatively, these documents,
when available, can be obtained free of charge from Sandy Spring
upon written request to Sandy Spring Bancorp, Inc., Corporate
Secretary, 17801 Georgia Avenue, Olney, Maryland 20832 or by
calling (800) 399-5919, or from the Company, upon written request
to WashingtonFirst Bankshares, Inc., Corporate Secretary, 11921
Freedom Drive, Suite 250, Reston, Virginia 20190 or by calling
(703) 840-2410.
Participants in the Solicitation
Sandy Spring and the Company and certain of their directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Sandy Spring and
the Company in connection with the proposed merger. Information
about the directors and executive officers of Sandy Spring is set
forth in the proxy statement for Sandy Spring’s 2017 annual meeting
of shareholders, as filed with the SEC on a Schedule 14A on March
22, 2017. Information about the directors and executive officers of
WashingtonFirst is set forth in the proxy statement for the
Company’s 2017 annual meeting of shareholders, as filed with the
SEC on a Schedule 14A on March 14, 2017. Additional information
regarding the interests of those participants and other persons who
may be deemed participants in the transaction may be obtained by
reading the Preliminary Joint Proxy Statement/Prospectus and, when
available, the Final Joint Proxy Statement/Prospectus regarding the
proposed merger. Free copies of this document may be obtained as
described in the preceding paragraph.
WashingtonFirst Bankshares,
Inc.
Consolidated Balance Sheets
(unaudited)
June 30, 2017 December 31, 2016 June 30, 2016 ($ in
thousands)
Assets:
Cash and cash equivalents: Cash and due from bank balances $ 4,049
$ 3,614 $ 3,164 Federal funds sold 25,901 93,659 96,177 Interest
bearing deposits 100 100 100 Cash and cash
equivalents 30,050 97,373 99,441 Investment securities,
available-for-sale, at fair value 309,107 280,204 260,675
Restricted stock, at cost 10,182 11,726 4,481 Loans held for sale,
at lower of cost or fair value 48,399 32,109 52,198 Loans held for
investment: Loans held for investment, at amortized cost 1,638,751
1,534,543 1,391,523 Allowance for loan losses (14,074 ) (13,582 )
(12,595 ) Total loans held for investment, net of allowance
1,624,677 1,520,961 1,378,928 Premises and equipment, net 6,396
6,955 7,476 Goodwill 11,420 11,420 11,420 Identifiable intangibles
1,484 1,619 1,753 Deferred tax asset, net 7,525 8,944 6,901 Accrued
interest receivable 5,778 5,243 4,546 Other real estate owned 725
1,428 2,159 Bank-owned life insurance 16,572 13,880 13,701 Other
assets 10,862 11,049 9,987 Total Assets $
2,083,177 $ 2,002,911 $ 1,853,666
Liabilities and
Shareholders' Equity:
Liabilities:
Non-interest bearing deposits $ 515,861 $ 381,887 $ 418,404
Interest bearing deposits 1,228,830 1,140,854
1,130,473
Total deposits
1,744,691 1,522,741 1,548,877 Other borrowings 15,275 5,852 9,021
FHLB advances 73,103 232,097 61,589 Long-term borrowings 32,757
32,638 32,953 Accrued interest payable 1,390 947 969 Other
liabilities 12,383 15,976 11,957 Total
Liabilities 1,879,599 1,810,251 1,665,366 Commitments and
contingent liabilities — — —
Shareholders'
Equity:
Common stock: Common Stock Voting, $0.01 par value, 50,000,000
shares authorized, 12,334,863, 10,987,652 and 10,431,016 shares
issued and outstanding, respectively 123 109 104 Common Stock
Non-Voting, $0.01 par value, 10,000,000 shares authorized, 742,278,
1,908,733 and 1,817,842 shares issued and outstanding, respectively
7 19 18 Additional paid-in capital 179,915 177,924 161,679
Accumulated earnings 25,140 17,187 24,594 Accumulated other
comprehensive income (loss) (1,607 ) (2,579 ) 1,905 Total
Shareholders' Equity 203,578 192,660 188,300
Total Liabilities and Shareholders'
Equity
$ 2,083,177 $ 2,002,911 $ 1,853,666
WashingtonFirst Bankshares,
Inc.
Consolidated Statements of
Income
(unaudited)
For the Three Months Ended For the Six Months Ended June 30, 2017
June 30, 2016 June 30, 2017 June 30, 2016 ($ in
thousands)
Interest and
dividend income:
Interest and fees on loans $ 19,872 $ 16,836 $ 38,651 $ 33,227
Interest and dividends on investments: Taxable 1,354 1,178 2,619
2,170 Tax-exempt 61 19 126 41 Dividends on other equity securities
161 81 357 152 Interest on Federal funds sold and other short-term
investments 81 68 155 136 Total interest and
dividend income 21,529 18,182 41,908 35,726
Interest
expense:
Interest on deposits 2,902 2,200 5,319 4,195 Interest on borrowings
1,052 981 2,277 1,977 Total interest expense
3,954 3,181 7,596 6,172 Net interest income
17,575 15,001 34,312 29,554 Provision for loan losses 925
980 1,940 1,605 Net interest income after provision
for loan losses 16,650 14,021 32,372 27,949
Non-interest
income:
Service charges on deposit accounts 40 81 88 160 Earnings on
bank-owned life insurance 107 90 192 180 Gain on sale of loans, net
4,601 5,287 7,250 8,029 Mortgage banking activities 925 1,358 1,869
2,557 Wealth management income 519 443 1,019 871 Gain on sale of
available-for-sale investment securities, net — 1,077 — 1,152 Gain
on debt extinguishment — — 301 — Other operating income 372
154 678 322 Total non-interest income 6,564 8,490
11,397 13,271
Non-interest
expense:
Compensation and employee benefits 7,134 7,251 14,568 13,949
Mortgage commission 2,140 2,102 3,410 3,208 Premises and equipment
1,849 1,863 3,563 3,680 Data processing 1,164 1,121 2,170 2,125
Professional fees 194 350 465 669 Merger expenses 532 — 532 —
Mortgage loan processing expenses 318 354 517 550 Debt
extinguishment — 1,044 — 1,044 Other operating expenses 1,737
1,450 3,539 2,811 Total non-interest expense
15,068 15,535 28,764 28,036 Income before
provision for income taxes 8,146 6,976 15,005 13,184 Provision for
income taxes 2,809 2,578 5,232 4,862 Net
income $ 5,337 $ 4,398 $ 9,773 $ 8,322
Earnings per common share: (1) Basic earnings per common share $
0.41 $ 0.34 $ 0.75 $ 0.65 Diluted earnings per common share $ 0.40
$ 0.34 $ 0.74 $ 0.64 (1) Prior periods adjusted for 5% stock
dividend issued in December 2016 For
the Three Months Ended For the Six Months Ended June 30, 2017
June 30, 2016 June 30, 2017 June 30, 2016 ($ in
thousands, except per share data)
Performance
Ratios:
Return on average assets
1.05
% 0.98 % 0.98 % 0.96 % Return on average shareholders' equity
10.54
% 9.42 % 9.86 % 9.01 % Yield on average interest-earning assets
4.31
% 4.10 % 4.27 % 4.17 % Rate on average interest-earning liabilities
1.16
% 1.02 % 1.11 % 1.02 % Net interest spread
3.15
% 3.08 % 3.16 % 3.15 % Net interest margin
3.51
% 3.37 % 3.49 % 3.44 % Efficiency ratio (1)
62.42
% 64.65 % 63.35 % 64.77 % Net charge-offs to average loans held for
investment (2)
0.34
% 0.21 % 0.18 % 0.19 %
Mortgage origination volume $ 200,006 $ 216,927 $ 314,345 $ 339,563
Assets under management $ 313,811 $ 245,074 $ 313,811 $
245,074
Per Share
Data: (3)
Basic earnings per common share $ 0.41 $ 0.34 $ 0.75 $ 0.65 Fully
diluted earnings per common share $ 0.40 $ 0.34 $ 0.74 $ 0.64
Weighted average basic shares outstanding
13,024,517
12,851,828 12,972,120 12,836,294 Weighted average diluted shares
outstanding
13,334,847
13,075,908 13,292,573 13,064,628
(1) The efficiency ratio is calculated as
total non-interest expense (less debt extinguishment costs) divided
by the sum of net interest income and total non-interest income
(less gain on sale of AFS securities and gain on debt
extinguishment). This non-GAAP financial measure is presented to
facilitate an understanding of the Company's performance.
(2) Annualized
(3) 2016 amounts have been adjusted to
reflect the 5% stock dividend issued in December 2016
June 30, 2017 December 31, 2016
June 30, 2016
Capital
Ratios:
Total risk-based capital ratio
13.65
%
13.99
%
14.52
% Tier 1 risk-based capital ratio
11.40
%
%
12.02
% Common equity tier 1 risk-based capital ratio
10.95
%
11.15
%
11.49
%
Tier 1 leverage ratio
9.89
%
10.14
%
10.07
% Tangible common equity to tangible assets (1)
9.21
%
9.03
%
9.52
%
Per Share Capital
Data: (2)
Book value per common share $ 15.57 $ 14.94 $ 14.64 Tangible book
value per common share $ 14.58 $ 13.93 $ 13.62 Common shares
outstanding
13,077,141
12,896,385
12,860,836
(1) This is a non-GAAP financial measure.
Refer to the table below outlining the reconciliation of tangible
common equity to tangible assets.
(2) June 30, 2016, amounts have been
adjusted to reflect the 5% stock dividend issued in December
2016
Average Balances, Interest Income and Expense and
Average Yield and Rates (QTD) For the Three
Months Ended June 30, 2017 June 30, 2016 AverageBalance
Income/Expense Yield/Rate (6) AverageBalance
Income/Expense Yield/Rate (6) ($ in thousands) Assets
Interest-earning assets: Loans held for sale $ 33,778 $ 348 4.08 %
$ 45,638 $ 438 3.79 % Loans held for investment (1) 1,593,774
19,524 4.85 % 1,366,656 16,398 4.75 % Investment securities -
taxable 287,861 1,354 1.86 % 278,690 1,178 1.67 % Investment
securities - tax-exempt (2) 14,346 91 2.52 % 3,822 29 3.01 % Other
equity securities 12,454 161 5.16 % 6,636 81 4.89 %
Interest-bearing balances 100 — 1.02 % 100 — 0.60 % Federal funds
sold 38,976 81 0.82 % 55,722
68 0.49 %
Total interest earning assets
1,981,289 21,559 4.31 % 1,757,264 18,192 4.10 % Non-interest
earning assets: Cash and due from banks 3,168 2,712 Premises and
equipment 6,655 7,713 Other real estate owned 794 2,044 Other
assets (3) 53,062 45,829 Less: allowance for loan losses
(14,578 ) (12,153 ) Total non-interest earning assets
49,101 46,145 Total Assets $ 2,030,390
$ 1,803,409 Liabilities and Shareholders’ Equity
Interest-bearing liabilities: Interest-bearing demand deposits $
144,326 $ 114 0.32 % $ 124,079 $ 90 0.29 % Money market deposit
accounts 276,650 636 0.92 % 265,727 393 0.59 % Savings accounts
202,785 359 0.71 % 215,544 382 0.71 % Time deposits 574,495
1,793 1.25 % 485,482
1,335 1.11 % Total interest-bearing deposits 1,198,256 2,902
0.97 % 1,090,832 2,200 0.81 % FHLB advances 128,519 503 1.55 %
114,435 445 1.54 % Other borrowings and long-term borrowings
39,668 549 5.54 % 39,372
536 5.45 %
Total interest-bearing liabilities
1,366,443 3,954 1.16 % 1,244,639 3,181 1.02 % Non-interest-bearing
liabilities: Demand deposits 448,835 361,191 Other liabilities
11,974 9,786 Total non-interest-bearing
liabilities 460,809 370,977 Total
Liabilities 1,827,252 1,615,616 Shareholders’ Equity 203,138
187,793 Total Liabilities and Shareholders’
Equity $ 2,030,390 $ 1,803,409 Interest
Spread (4) $ 17,605 3.15 % $ 15,011 3.08 % Net
Interest Margin (2)(5) 3.51 % 3.37 %
(1)
Includes loans placed on non-accrual
status.
(2)
Yield and income presented on a fully
taxable equivalent basis using a federal statutory rate of 35
percent.
(3)
Includes intangibles, deferred tax asset,
accrued interest receivable, bank-owned life insurance and other
assets.
(4)
Interest spread is the average yield
earned on earning assets, less the average rate incurred on
interest bearing liabilities.
(5)
Net interest margin is net interest
income, expressed as a percentage of average earning assets.
(6)
Annualized income/expense is used for the
yield/rate.
Average Balances, Interest Income and Expense and
Average Yield and Rates (YTD) For the Six Months
Ended June 30, 2017 June 30, 2016 AverageBalance
Income/Expense Yield/Rate (6) AverageBalance
Income/Expense Yield/Rate (6) ($ in thousands)
Assets
Interest-earning
assets:
Loans held for sale $ 27,817 $ 573 4.09 % $ 37,326 $ 728 3.86 %
Loans held for investment (1) $ 1,580,216 $ 38,078 4.79 % $
1,349,597 $ 32,499 4.76 % Investment securities - taxable 279,218
2,619 1.87 % 250,511 2,170 1.71 % Investment securities -
tax-exempt (2) 14,486 187 2.58 % 3,955 61 3.03 % Other equity
securities 14,069 357 5.11 % 6,429 152 4.77 % Interest-bearing
balances 100 — 0.79 % 71 1 2.96 % Federal funds sold 39,195
155 0.79 % 48,656 135
0.56 % Total interest earning assets 1,955,101 41,969 4.27 %
1,696,545 35,746 4.17 %
Non-interest earning
assets:
Cash and due from banks 3,283 2,346 Premises and equipment 6,799
7,672 Other real estate owned 938 1,238 Other assets (3) 51,510
47,376 Less: allowance for loan losses (14,259 )
(12,283 ) Total non-interest earning assets 48,271
46,349 Total Assets $ 2,003,372 $ 1,742,894
Liabilities and
Shareholders’ Equity
Interest-bearing
liabilities:
Interest-bearing demand deposits $ 136,926 $ 223 0.33 % $ 119,396 $
176 0.30 % Money market deposit accounts 267,431 1,088 0.82 %
281,590 831 0.59 % Savings accounts 205,081 721 0.71 % 193,493 681
0.71 % Time deposits 554,373 3,287 1.20
% 462,137 2,507 1.09 %
Total interest-bearing deposits
1,163,811 5,319 0.92 % 1,056,616 4,195 0.80 % FHLB advances 174,646
1,185 1.35 % 113,072 899 1.57 % Other borrowings and long-term
borrowings 39,417 1,092 5.57 %
39,485 1,078 5.47 % Total interest-bearing
liabilities 1,377,874 7,596 1.11 % 1,209,173 6,172 1.02 %
Non-interest-bearing
liabilities:
Demand deposits 413,091 335,292 Other liabilities 12,554
12,787 Total non-interest-bearing liabilities
425,645 348,079 Total Liabilities
1,803,519 1,557,252 Shareholders’ Equity 199,853
185,642 Total Liabilities and Shareholders’ Equity $
2,003,372 $ 1,742,894 Interest Spread
(4) $ 34,373 3.16 % $ 29,574 3.15 % Net Interest
Margin (2)(5) 3.49 % 3.44 %
(1)
Includes loans placed on non-accrual
status.
(2)
Yield and income presented on a fully
taxable equivalent basis using a federal statutory rate of 35
percent.
(3)
Includes intangibles, deferred tax asset,
accrued interest receivable, bank-owned life insurance and other
assets.
(4)
Interest spread is the average yield
earned on earning assets, less the average rate incurred on
interest bearing liabilities.
(5)
Net interest margin is net interest
income, expressed as a percentage of average earning assets.
(6)
Annualized income/expense is used for the
yield/rate.
Composition of Loans Held for Investment
June 30, 2017
December 31,2016
June 30, 2016 ($ in thousands) Construction and development
$ 285,277 $ 288,193 $ 270,476 Commercial real estate- owner
occupied 264,358 231,414 226,949 Commercial real estate- non-owner
occupied 607,206 557,846 465,445 Residential real estate 307,575
287,250 254,520 Real estate loans 1,464,416 1,364,703 1,217,390
Commercial and industrial 170,260 165,172 166,941 Consumer 4,075
4,668 7,192 Total loans 1,638,751 1,534,543 1,391,523 Less:
allowance for loan losses 14,074 13,582 12,595 Net loans $
1,624,677 $ 1,520,961 $ 1,378,928
Composition of
Deposits June 30, 2017
December 31,2016
June 30, 2016 ($ in thousands) Demand deposit accounts $
515,861 $ 381,887 $ 418,404 NOW accounts 189,903 134,938 153,261
Money market accounts 278,148 270,794 253,207 Savings accounts
194,551 209,961 231,934 Time deposits up to $250,000 408,919
386,095 349,306 Time deposits over $250,000 157,309 139,066 142,765
Total deposits $ 1,744,691 $ 1,522,741 $ 1,548,877
Allowance and Asset Quality Ratios June 30,
2017
December 31,2016
June 30, 2016 Allowance for loan losses to loans held for
investment 0.86 % 0.89 % 0.91 % Adjusted allowance for loan losses
to loans held for investment (1) 1.05 % 1.11 % 1.22 % Allowance for
loan losses to non-accrual loans 348.11 % 236.37 % 169.81 %
Allowance for loan losses to non-performing assets 73.77 % 159.10 %
95.38 % Non-performing assets to total assets 0.92 % 0.43 % 0.71 %
(1)
This is a non-GAAP financial measure.
Refer to the table below outlining the reconciliation of GAAP
Allowance Ratio to Adjusted Allowance Ratio.
Non-Performing Assets June 30, 2017
December 31,2016
June 30, 2016 ($ in thousands) Non-accrual loans $ 4,043 $
5,746 $ 7,417 90+ days still accruing 13,057 2 13 Trouble debt
restructurings still accruing 1,252 1,361 3,616 Other real estate
owned 725 1,428 2,159 Total non-performing assets $
19,077 $ 8,537 $ 13,205
Reconciliation of Net Income to Core Net Income (1)
For the Three Months Ended For the Six Months
Ended June 30, 2017 June 30, 2016 June 30, 2017 June
30, 2016 ($ in thousands) Net Income $ 5,337 $ 4,398 $ 9,773 8,322
Add: Merger Expenses 532 — 532 — Less: Tax effect (212 ) — (212 ) —
Core Net Income 5,657 4,398 10,093 8,322
(1)
Core net income is calculated as net
income adjusted for the after-tax impact of merger expenses and is
a non-GAAP financial measure that is presented to facilitate a
comparison of the Company's earnings without merger expenses. This
table provides a reconciliation between GAAP Net Income amounts and
this non-GAAP financial measure.
Reconciliation of Tangible Common Equity to
Tangible Assets Ratio (1) June 30, 2017
December 31,2016
June 30, 2016 ($ in thousands)
Tangible Common
Equity:
Common Stock Voting $ 123 $ 109 $ 104 Common Stock Non-Voting 7 19
18 Additional paid-in capital - common 179,915 177,924 161,679
Accumulated earnings 25,140 17,187 24,594 Accumulated other
comprehensive income/(loss) (1,607 ) (2,579 ) 1,905 Total
Common Equity $ 203,578 $ 192,660 $ 188,300
Less
Intangibles:
Goodwill $ 11,420 $ 11,420 $ 11,420 Identifiable intangibles 1,484
1,619 1,753 Total Intangibles $ 12,904
$ 13,039 $ 13,173 Tangible Common Equity $
190,674 $ 179,621 $ 175,127
Tangible
Assets:
Total Assets $ 2,083,177 $ 2,002,911 $ 1,853,666
Less
Intangibles:
Goodwill $ 11,420 $ 11,420 $ 11,420 Identifiable intangibles 1,484
1,619 1,753 Total Intangibles $ 12,904
$ 13,039 $ 13,173 Tangible Assets $ 2,070,273
$ 1,989,872 $ 1,840,493 Tangible Common
Equity to Tangible Assets (1) 9.21 % 9.03 % 9.52 %
(1)
Tangible common equity to tangible assets
ratio is a non-GAAP financial measure that is presented to
facilitate an understanding of the Company's capital structure.
This table provides a reconciliation between certain GAAP amounts
and this non-GAAP financial measure.
Reconciliation of GAAP Allowance Ratio to Adjusted
Allowance Ratio (1) June 30, 2017
December 31,2016
June 30, 2016 ($ in thousands) GAAP allowance for loan
losses $ 14,074 $ 13,582 $ 12,595 GAAP loans held for investment,
at amortized cost 1,638,751 1,534,543 1,391,523 GAAP
allowance for loan losses to total loans held for investment 0.86 %
0.89 % 0.91 % GAAP allowance for loan losses $ 14,074 $
13,582 $ 12,595 Plus: Credit purchase accounting marks 3,138
3,537 4,383 Adjusted allowance for loan losses $
17,212 $ 17,119 $ 16,978 GAAP loans
held for investment, at amortized cost $ 1,638,751 $ 1,534,543 $
1,391,523 Plus: Credit purchase accounting marks 3,138 3,537
4,383 Adjusted loans held for investment, at
amortized cost $ 1,641,889 $ 1,538,080 $ 1,395,906
Adjusted allowance for loan losses to total loans
held for investment (1) 1.05 % 1.11 % 1.22 %
(1)
This is a non-GAAP financial measure.
Credit purchase accounting marks are GAAP marks under purchase
accounting guidance.
Segment Reporting - 2017 (QTD)
For the Three Months Ended June 30, 2017 CommercialBank
MortgageBank WealthManagement
Other (1)
ConsolidatedTotals ($ in thousands) Interest and dividend
income 21,180 349 — — 21,529 Interest expense 3,408 — — 546
3,954 Net interest income 17,772 349 — (546 ) 17,575 Provision for
loan losses 925 — — — 925 Net interest income after
provision for loan losses 16,847 349 — (546 ) 16,650
Non-interest income 482 5,525 519 38 6,564 Compensation and
employee benefits 4,912 1,722 243 257 7,134 Mortgage commission —
2,140 — — 2,140 Premises and equipment 1,611 165 32 41 1,849 Data
processing 1,087 61 16 — 1,164 Professional fees 101 7 2 84 194
Merger expenses 14 — — 518 532 Mortgage loan processing expenses —
318 — — 318 Other operating expenses 1,381 237 67 52 1,737
Income/(loss) before provision for income taxes 8,223 1,224 159
(1,460 ) 8,146 Total assets 2,017,556 60,759 3,904 958
2,083,177
(1)
Includes parent company and intercompany
eliminations
Segment Reporting - 2017 (YTD)
For the Six Months Ended June 30, 2017 CommercialBank
MortgageBank WealthManagement
Other (1)
ConsolidatedTotals
($ in thousands)
Interest and dividend income 41,335 573 — — 41,908 Interest expense
6,511 — — 1,085 7,596 Net interest income 34,824 573 —
(1,085 ) 34,312 Provision for loan losses 1,940 — — — 1,940
Net interest income after provision for loan losses 32,884 573 —
(1,085 ) 32,372 Non-interest income 1,222 9,118 1,019 38
11,397 Compensation and employee benefits 10,159 3,369 546 494
14,568 Mortgage commission — 3,410 — — 3,410 Premises and equipment
3,083 333 65 82 3,563 Data processing 2,026 121 23 — 2,170
Professional fees 270 18 3 174 465 Merger expenses 14 — — 518 532
Mortgage loan processing expenses — 517 — — 517 Other operating
expenses 2,761 522 141 115 3,539 Income/(loss) before
provision for income taxes 15,793 1,401 241 (2,430 ) 15,005
Total assets 2,017,556 60,759 3,904 958 2,083,177
(1)
Includes parent company and intercompany
eliminations
Additional Discussion and Analysis
Consolidated net income for the three and six months ended
June 30, 2017, was $5.3 million and $9.8 million,
respectively, representing increases of $0.9 million and $1.5
million, or 21% and 17%, respectively, over the $4.4 million and
$8.3 million earned during the three and six months ended
June 30, 2016, respectively. Net income per diluted common
share for the three and six months ended June 30, 2017 was
$0.40 and $0.74, respectively, representing increases of 18% and
16%, respectively, over the $0.34 and $0.64 per diluted common
share earning during the three and six months ended June 30, 2016,
respectively.
As of June 30, 2017, total assets were $2.1 billion,
compared to $2.0 billion as of December 31, 2016, and $1.9
billion as of June 30, 2016. During the six months ended
June 30, 2017, total loans held for investment increased
$104.2 million or 6.8% to $1.6 billion. This increase is
attributable to organic loan growth from our existing lending team.
During the six months ended June 30, 2017, total deposits
increased $222.0 million or 14.6% to $1.7 billion. The increase in
deposits is primarily attributable to deposit growth in our branch
network and commercial customers.
The net interest margin was 3.51% and 3.49% for the three and
six months ended June 30, 2017, respectively, compared to
3.37% and 3.44% for the same periods in 2016. This increase is
primarily attributable to increases in market rates. On a linked
quarter basis, our net interest margin increased from 3.47% for the
three months ended March 31, 2017, to 3.51% for the three
months ended June 30, 2017. The Company remains focused on its
pricing discipline on both sides of the balance sheet and on all
factors contributing to net income.
The adjusted allowance for loan losses to adjusted total loans
held for investment, which includes credit purchase accounting
marks, was 1.05% as of June 30, 2017, compared to 1.22% as of
June 30, 2016. This decrease is attributable to net
charge-offs of $1.4 million, which had been substantially reserved
for previously, and credit mark accretion during the quarter ended
June 30, 2017. A reconciliation of the allowance for loan
losses and related ratios to the adjusted allowance for loan losses
and related ratios is included herein. Non-performing assets
increased by $10.5 million during the quarter ended June 30,
2017, primarily due to the default of two commercial real estate
loans, related to a common guarantor, totaling $13.1 million. The
Company is pursuing collection efforts on these loans and believes
the collateral to be of sufficient value to protect the Company
against loss with tenant rent payments sufficient to service the
loans. As a result of these payment defaults, the ratio of
non-performing assets to total assets increased to 0.92% as of
June 30, 2017, compared to 0.71% as of June 30, 2016.
Non-interest income for the three and six months ended
June 30, 2017, was $6.6 million and $11.4 million,
respectively, each representing a decrease of $1.9 million compared
to the $8.5 million and $13.3 million of non-interest income for
the three and six month periods ended June 30, 2016,
respectively. Non-interest income was negatively impacted by higher
interest rates which resulted in lower mortgage origination volume
during the first half of 2017, compared to the same period last
year. During the three and six months ended June 30, 2017, the
mortgage subsidiary originated $200.0 million and $314.3 million in
total mortgage loan volume, a slight decrease from the $216.9
million and $339.6 million in total mortgage volume originated
during the three and six months ended June 30, 2016,
respectively. As of June 30, 2017, the Company's wealth
management business unit had $313.8 million in assets under
management, an increase of 28.0% over the same period last year.
The Company did not sell any investment securities during 2017;
however, during the three and six months ended June 30, 2016,
the Company sold investment securities resulting in $1.1 million
and $1.2 million, respectively, of gains on the sale of
investments.
Non-interest expense decreased during the three months ended
June 30, 2017, by $0.5 million, and increased during the six
months ended June 30, 2017, by $0.7 million compared to the
same periods ended June 30, 2016, primarily as a result of
$0.5 million in merger expenses incurred during the second quarter
of 2017 and a one-time $1.0 million debt termination expense
incurred during the second quarter of 2016.
During the six months ended June 30, 2017, total
shareholders’ equity increased $10.9 million, or 5.7%, to $203.6
million due primarily to earnings and additional paid in capital
from the exercise of stock options offset by dividends of $1.8
million and changes in accumulated other comprehensive loss.
Tangible book value per common share increased to $14.58 as of
June 30, 2017, compared to $13.62 as of June 30, 2016.
The Company remains "well-capitalized" under the regulatory
framework.
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version on businesswire.com: http://www.businesswire.com/news/home/20170720006416/en/
WashingtonFirst Bankshares Inc.Matthew R. Johnson,
703-840-2410Executive Vice President & Chief Financial
OfficerMJohnson@wfbi.com
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