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MVB Financial Corp. Reports 58.5% Increase in Annual Earnings with Success Executing MVB 3.0 Strategy

FAIRMONT, W. Va.--(BUSINESS WIRE)--

For the year ended December 31, 2018, MVB Financial Corp. (the “Company”) (MVBF) reported net income of $12.0 million, or $1.04 and $1.00 basic and diluted earnings per share, respectively, compared to $7.6 million, or $0.69 and $0.68 basic and diluted earnings per share, respectively, for the same period in 2017. This represents a 58.5% increase over prior year. For the quarter ended December 31, 2018, the Company reported net income of $3.0 million, or $0.25 and $0.24 basic and diluted earnings per share, respectively, compared to $1.4 million, or $0.12 basic and diluted earnings per share, for the quarter ended December 31, 2017.

Noninterest-bearing deposits increased $87.6 million, or 69.6%, from December 31, 2017, to a balance of $213.6 million as of December 31, 2018. The growth in noninterest-bearing deposits was primarily driven by MVB’s continued strategic initiatives in fintech and specialty deposits. As of December 31, 2018, noninterest-bearing deposits were 16.3% of total deposits, compared to 10.9% as of December 31, 2017.

Loans increased $198.4 million, or 17.9%, from December 31, 2017, to a balance of $1.3 billion as of December 31, 2018. The increase in loans has been driven by strong growth in MVB’s West Virginia and Northern Virginia markets. In addition to the increase in loan volume during 2018, loan yield increased by 45 basis points. The Company continues to leverage industry consolidation to capitalize on market disruptions to attract talent with extensive experience and established relationships in MVB’s markets.

MANAGEMENT OVERVIEW

“MVB’s solid performance for 2018, featured strong loan growth, higher net income and continued success in the war for deposits, especially in noninterest-bearing deposits,” said Larry F. Mazza, CEO and President, MVB Financial Corp. “Our MVB 3.0 strategic focus on ‘blue ocean’ opportunities in the fintech and specialty deposits arena reached a tipping point in 2018 and has generated great momentum for 2019.”

FOURTH QUARTER 2018 HIGHLIGHTS

  • Net interest margin remains strong at 3.54% for the quarter ended December 31, 2018, an increase of 11 basis points versus the quarter ended September 30, 2018, and an increase of 25 basis points versus the quarter ended December 31, 2017.
  • Loans of $1.3 billion as of December 31, 2018, increased $7.9 million, or 0.6%, from September 30, 2018, and increased $198.4 million, or 17.9% from December 31, 2017.
  • Very good asset quality as demonstrated by the 0.54% ratio of nonperforming loans to total loans as of December 31, 2018.
  • Assets of $1.8 billion as of December 31, 2018, increased $27.9 million, or 1.6%, from September 30, 2018, and increased $216.7 million, or 14.1%, from December 31, 2017.
  • Net interest income of $14.4 million increased $886 thousand, or 6.6%, from September 30, 2018, and increased $2.7 million, or 23.3%, from the fourth quarter ended December 31, 2017.
  • $1 million of subordinated debt was converted to common stock, which provided an annual interest expense savings of $70 thousand, and resulted in issuing 62,500 new common shares.

LOANS

Loans totaled $1.3 billion as of December 31, 2018, an increase of $7.9 million, or 0.6%, from September 30, 2018, and an increase of $198.4 million, or 17.9% from December 31, 2017. Organic growth and the addition of commercial lenders within the Company’s primary lending areas contributed to the loan growth. The yield on loans was 4.94% for the year ended December 31, 2018, an increase of 45 basis points from the year ended December 31, 2017. The yield on loans was 5.18% for the quarter ended December 31, 2018, an increase of 21 basis points, from the quarter ended September 30, 2018, and an increase of 56 basis points, from the quarter ended December 31, 2017. Of the 21-basis point increase in loan yield for the quarter ended December 31, 2018, 4 basis points were attributable to an increase in loan fees.

DEPOSITS

Deposits totaled $1.3 billion as of December 31, 2018, a decrease $70.0 million, or 5.1%, from September 30, 2018, and an increase of $149.6 million, or 12.9%, from December 31, 2017. Noninterest-bearing deposits totaled $213.6 million as of December 31, 2018, or 16.3%, of the total deposit base, a decrease of $27.3 million, or 11.3%, from September 30, 2018, and an increase of $87.6 million, or 69.6%, from December 31, 2017. The fourth quarter decline was due, in part, to the seasonality in public funds, which decreased $43.4 million, and the cyclical nature of fintech and title deposits, which decreased $8.7 million. Noninterest-bearing deposits remain a core funding source for the Company. Of the $213.6 million in noninterest-bearing balances in 2018, $91.9 million are related to fintech and title business.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2018 was $14.4 million, an increase of $886 thousand, or 6.6%, from September 30, 2018, and an increase of $2.7 million, or 23.3%, from the fourth quarter ended December 31, 2017. Net interest income of $52.1 million for the full year 2018 increased $7.8 million, or 17.5%, from the year ended December 31, 2017. Net interest margin of 3.54% for the quarter ended December 31, 2018, increased 11 basis points versus the quarter ended September 30, 2018, and increased 25 basis points versus the quarter ended December 31, 2017. Net interest margin of 3.41% for the year ended December 31, 2018, increased 14 basis points from the year ended December 31, 2017.

Interest expense increased 11.3% during the fourth quarter of 2018, compared to the quarter ended September 30, 2018, due to an increase of 14 basis points in the cost of interest-bearing liabilities, and increased 52.1% for the quarter ended December 31, 2018, compared to the quarter ended December 31, 2017, due to an increase of 45 basis points in the cost of interest-bearing liabilities. Interest expense increased 43.9% for the year ended December 31, 2018, compared to the same time period in 2017, based on a 33-basis point increase in the cost of interest-bearing liabilities. The increased cost of interest-bearing liabilities is the result of an increase in borrowings due to loan growth. Increased interest rates and an emphasis on loan yields more than offset the increase in cost of interest-bearing liabilities, driving the net interest margin expansion.

In November 2018, $1 million of subordinated debt was converted to common stock, which caused the issuance of 62,500 new shares and will provide an annual interest expense savings of $70 thousand. Including this conversion, in 2018, $16 million of subordinated debt was converted into common stock, which caused the issuance of 1,000,000 new shares and will provide an annual interest expense savings of $1.1 million.

ASSET QUALITY

Asset quality remained very good in 2018. Nonperforming loans decreased $2.6 million, to 0.54% of total loans as of December 31, 2018, compared to 0.99% as of September 30, 2018, and 0.88% as of December 31, 2017. In addition, net charge-offs for 2018 decreased $17 thousand compared to 2017, resulting in a net loan charge-offs to total loans ratio of 0.11% as of December 31, 2018, and 0.13% as of December 31, 2017.

Provision for loan loss was $292 thousand for the quarter ended December 31, 2018, a decrease of $777 thousand, or 72.7%, from the quarter ended September 30, 2018, and a decrease of $744 thousand, or 71.8%, from the quarter ended December 31, 2017. Provision was $2.4 million for the full year ended December 31, 2018, a $267 thousand increase from the same time period in 2017.

NONINTEREST INCOME

Noninterest income for the fourth quarter of 2018 was $8.3 million, a decrease of $2.2 million, or 21.1%, from the quarter ended September 30, 2018, and a decrease of $1.9 million, or 18.3%, from the quarter ended December 31, 2017. Noninterest income of $38.6 million for the full year 2018 decreased $2.1 million, or 5.1%, from the year ended December 31, 2017.

The decrease from the quarter ended September 30, 2018, was the result of a $1.3 million decrease in mortgage fee income, a $616 thousand decrease in the holding gain on equity securities, and a $296 thousand decrease in income on bank owned life insurance. The decrease in mortgage fee income was the result of a decrease in mortgage production volume of $32.3 million, or 8.7%, from the quarter ended September 30, 2018, to the quarter ended December 31, 2018.

The decrease from the quarter ended December 31, 2017, was the result of an $842 thousand decrease in mortgage fee income, a $303 thousand decrease in other operating income, a $281 thousand decrease in the gain on derivative, a $276 thousand decrease in the gain on sale of securities and a $164 thousand decrease in interchange income. The decrease in mortgage fee income was the result of a decrease in mortgage production volume of $32.8 million, or 8.8%, from the quarter ended December 31, 2017, to the quarter ended December 31, 2018.

The year over year decrease was primarily the result of a $4.8 million decrease in mortgage fee income, due to mortgage production volume decreasing by $93.8 million or 6.1% in 2018. This decrease was partially offset by a gain on derivative of $2.4 million. Excluding the decrease in mortgage fee income and increase in the gain on derivative, noninterest income for 2018 increased $302 thousand and was primarily due to increases in the holding gain on equity securities, and income on bank-owned life insurance.

With the challenge of lower mortgage fee income and production volumes, the Company’s mortgage subsidiary did remain profitable during each quarter of 2018.

NONINTEREST EXPENSE

Noninterest expense for the fourth quarter of 2018 was $18.5 million, an increase of $56 thousand, or 0.3%, from the quarter ended September 30, 2018, and an increase of $759 thousand, or 4.3%, from the quarter ended December 31, 2017. Noninterest expense for the full year 2018 was $72.9 million, an increase of$2.4 million, or 3.4%, from the year ended December 31, 2017. The increase from the quarter ended September 30, 2018 was the result of an increase in salaries and employee benefits of $217 thousand, which was partially offset by a decrease in other operating expense of $133 thousand. The increase from the quarter ended December 31, 2017 was a result of an increase in salaries and employee benefits of $638 thousand and an increase in travel, entertainment, dues, and subscriptions of $217 thousand. An increase in salaries and employee benefits of $2.1 million and an increase in equipment and occupancy expense of $384 thousand attributed to the year over year increase.

DIVIDEND

As previously announced, on November 21, 2018, the Company declared a quarterly cash dividend of $0.03 per share to shareholders of record at the close of business on December 1, 2018, payable December 15, 2018. This was the fourth quarterly dividend for 2018 and was equal to the September 2018 payout of $0.03 per share. The cash dividend of $0.11 for the full year 2018, increased $0.01, or 10%, compared to the same time period in 2017.

About MVB Financial Corp.

MVB Financial Corp. (“MVB Financial” or “MVB”), the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® under the ticker “MVBF.”

MVB is a financial holding company headquartered in Fairmont, W.Va. Through its subsidiary, MVB Bank, Inc., and the bank’s subsidiaries, MVB Mortgage and MVB Community Development Corporation, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region.

Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.

For more information about MVB, please visit ir.mvbbanking.com.

Forward-looking Statements

MVB Financial Corp. has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this Earnings Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” “may,” or similar expressions occur in this Earnings Release, the Company is making forward-looking statements. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Earnings Release. Those factors include, but are not limited to credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession, and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements.

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information in this announcement is subject to change.

Questions or comments concerning this Earnings Release should be directed to:

MVB Financial Corp.

Donald T. Robinson, Executive Vice President and CFO
(304) 598-3500
drobinson@mvbbanking.com

 

MVB Financial Corp.

Financial Highlights

 
Condensed Consolidated Statements of Income

(Unaudited) (Dollars in thousands, except per share data)

 
    Quarterly     Year-to-Date
2018     2018     2018     2018     2017 2018     2017
 

Fourth
Quarter

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Interest income $ 19,586 $ 18,176 $ 16,944 $ 15,054 $ 15,086 $ 69,760 $ 56,598
Interest expense   5,176   4,652   4,289   3,589   3,403 17,706 12,301
Net interest income 14,410 13,524 12,655 11,465 11,683 52,054 44,297
Provision for loan losses 292 1,069 605 474 1,036 2,440 2,173
Noninterest income 8,295 10,511 10,795 9,039 10,157 38,640 40,706
Noninterest expense   18,473   18,417   19,249   16,739   17,714 72,878 70,500
Income before income taxes 3,940 4,549 3,596 3,291 3,090 15,376 12,330
Income tax expense   941   970   765   697   1,667 3,373 4,755
Net income $ 2,999 $ 3,579 $ 2,831 $ 2,594 $ 1,423 $ 12,003 $ 7,575
Preferred dividends 123 123 122 121 124 489 498
Net income available to common shareholders $ 2,876 $ 3,456 $ 2,709 $ 2,473 $ 1,299 $ 11,514 $ 7,077
 
Earnings per share - basic $ 0.25 $ 0.30 $ 0.25 $ 0.24 $ 0.12 $ 1.04 $ 0.69
Earnings per share - diluted $ 0.24 $ 0.29 $ 0.25 $ 0.23 $ 0.12 $ 1.00 $ 0.68
 
 
Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

 
      December 31, 2018     September 30, 2018     December 31, 2017
Cash and cash equivalents $ 22,221 $ 22,045 $ 20,305
Certificates of deposit with other banks 14,778 14,778 14,778
Investment securities 231,213 226,306 231,507
Loans held for sale 75,807 63,706 66,794
Loans 1,304,366 1,296,460 1,105,941
Allowance for loan losses (10,939 ) (11,439 ) (9,878 )
Net loans 1,293,427 1,285,021 1,096,063
Premises and equipment, net 26,545 26,706 26,686
Goodwill 18,480 18,480 18,480
Other assets 68,498   66,062   59,689  
Total assets $ 1,750,969   $ 1,723,104   $ 1,534,302  
 
Deposits $ 1,309,154 $ 1,379,186 $ 1,159,580
Borrowed funds 214,887 122,000 152,169
Other liabilities 50,155 51,042 72,361

Shareholders’ equity

176,773   170,876   150,192  

Total liabilities and shareholders’ equity

$ 1,750,969   $ 1,723,104   $ 1,534,302  
 
 
Reportable Segments

(Unaudited)

 
Twelve Months Ended December 31, 2018    

Commercial &
Retail Banking

   

Mortgage
Banking

   

Financial
Holding
Company

   

Intercompany
Eliminations

    Consolidated
(Dollars in thousands)
Interest income $ 63,762 $ 6,667 $ 5 $ (674 ) $ 69,760
Interest expense 13,667   4,085   1,756   (1,802 ) 17,706
Net interest income 50,095 2,582 (1,751 ) 1,128 52,054
Provision for loan losses 2,386   54       2,440
Net interest income after provision for loan losses 47,709 2,528 (1,751 ) 1,128 49,614
 
Noninterest Income:
Mortgage fee income 585 32,880 (1,128 ) 32,337
Other income 6,479   (243 ) 6,411   (6,344 ) 6,303
Total noninterest income 7,064 32,637 6,411 (7,472 ) 38,640
 
Noninterest Expenses:
Salaries and employee benefits 14,924 23,927 7,373 46,224
Other expense 20,081   8,608   4,309   (6,344 ) 26,654
Total noninterest expenses 35,005 32,535 11,682 (6,344 ) 72,878
 
Income (loss) before income taxes 19,768 2,630 (7,022 ) 15,376
Income tax expense (benefit) 4,265   677   (1,569 )   3,373
Net income (loss) $ 15,503   $ 1,953   $ (5,453 ) $   $ 12,003
Preferred stock dividends     489     489
Net income (loss) available to common shareholders $ 15,503   $ 1,953   $ (5,942 ) $   $ 11,514
 
 
Reportable Segments

(Unaudited)

 
Twelve Months Ended December 31, 2017    

Commercial &
Retail Banking

   

Mortgage
Banking

   

Financial
Holding
Company

   

Intercompany
Eliminations

    Consolidated
(Dollars in thousands)
Interest income $ 52,423 $ 4,698 $ 4 $ (527 ) $ 56,598
Interest expense 9,118   2,317   2,241   (1,375 ) 12,301
Net interest income 43,305 2,381 (2,237 ) 848 44,297
Provision for loan losses 1,967   206       2,173
Net interest income after provision for loan losses 41,338 2,175 (2,237 ) 848 42,124
 
Noninterest Income:
Mortgage fee income 736 37,262 (849 ) 37,149
Other income 5,866   (2,372 ) 5,466   (5,403 ) 3,557
Total noninterest income 6,602 34,890 5,466 (6,252 ) 40,706
 
Noninterest Expenses:
Salaries and employee benefits 12,266 26,196 5,646 44,108
Other expense 19,523   8,188   4,085   (5,404 ) 26,392
Total noninterest expenses 31,789 34,384 9,731 (5,404 ) 70,500
 
Income (loss) before income taxes 16,151 2,681 (6,502 ) 12,330
Income tax expense (benefit) 5,820   1,082   (2,147 )   4,755
Net income (loss) $ 10,331   $ 1,599   $ (4,355 ) $   $ 7,575
Preferred stock dividends     498     498
Net income (loss) available to common shareholders $ 10,331   $ 1,599   $ (4,853 ) $   $ 7,077
 
 
Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 
   

Three Months Ended
December 31, 2018

   

Three Months Ended
September 30, 2018

   

Three Months Ended
December 31, 2017

 

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Assets
Interest-bearing deposits in banks $ 8,123 $ 45 2.17 % $ 5,178 $ 30 2.30 % $ 4,636 $ 15 1.28 %
CDs with other banks 14,778 74 1.99 14,778 73 1.96 14,778 75 2.01
Investment securities:
Taxable 146,488 924 2.50 148,499 869 2.32 147,459 774 2.08
Tax-exempt 79,906 723 3.59 79,961 715 3.55 68,759 572 3.30
Loans and loans held for sale: 1
Commercial 924,547 12,518 5.37 883,051 11,323 5.09 770,664 9,042 4.65
Tax exempt 14,454 128 3.51 14,231 125 3.48 14,679 128 3.46
Real estate 415,502 5,039 4.81 408,719 4,909 4.77 374,047 4,300 4.56
Consumer 10,215   135   5.24   10,844   132   4.83   13,006   180   5.49  
Total loans 1,364,718   17,820   5.18   1,316,845   16,489   4.97   1,172,396   13,650   4.62  
Total earning assets 1,614,013   19,586   4.81   1,565,261   18,176   4.61   1,408,028   15,086   4.25  
Less: Allowance for loan losses (11,268 ) (10,717 ) (9,579 )
Cash and due from banks 16,515 18,020 16,969
Other assets 109,146   108,618   96,103  
Total assets $ 1,728,406   $ 1,681,182   $ 1,511,521  
 
Liabilities
Deposits:
NOW $ 414,997 $ 865 0.83 $ 413,121 $ 773 0.74 $ 467,095 $ 807 0.69
Money market checking 261,928 852 1.29 246,624 676 1.09 238,262 432 0.72
Savings 40,494 1 0.01 42,760 1 0.01 44,685 19 0.17
IRAs 17,937 78 1.73 17,950 75 1.66 17,200 59 1.36
CDs 384,540 1,902 1.96 348,467 1,585 1.80 278,446 1,025 1.46
Repurchase agreements and federal funds sold 15,573 6 0.15 17,911 10 0.22 24,727 19 0.30
FHLB and other borrowings 173,110 1,150 2.64 202,670 1,199 2.35 122,388 474 1.54
Subordinated debt 17,861   322   7.15   19,932   333   6.63   33,524   568   6.72  
Total interest-bearing liabilities 1,326,440   5,176   1.55   1,309,435   4,652   1.41   1,226,327   3,403   1.10  
Noninterest bearing demand deposits 217,527 193,116 127,417
Other liabilities 11,903   10,710   7,419  
Total liabilities 1,555,870   1,513,261   1,361,163  
 
Stockholders’ equity
Preferred stock 7,834 7,834 7,834
Common stock 11,633 11,467 10,496
Paid-in capital 116,254 113,482 99,123
Treasury stock (1,084 ) (1,084 ) (1,084 )
Retained earnings 46,852 43,793 36,982
Accumulated other comprehensive income (8,953 ) (7,571 ) (2,993 )
Total stockholders’ equity 172,536   167,921   150,358  
Total liabilities and stockholders’ equity $ 1,728,406   $ 1,681,182   $ 1,511,521  
 
Net interest spread 3.26 3.20 3.15
Net interest income-margin $ 14,410   3.54 % $ 13,524   3.43 % $ 11,683   3.29 %
 

1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

 
 
Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 
   

Twelve Months Ended
December 31, 2018

   

Twelve Months Ended
December 31, 2017

   

Twelve Months Ended
December 31, 2016

(Dollars in thousands)

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Assets
Interest-bearing deposits in banks $ 5,176 $ 108 2.09 % $ 3,790 $ 52 1.37 % $ 16,347 $ 94 0.58 %
CDs with other banks 14,778 295 2.00 14,619 288 1.97 11,694 228 1.95
Investment securities:
Taxable 150,134 3,580 2.38 125,797 2,658 2.11 76,525 1,366 1.79
Tax-exempt 79,161 2,810 3.55 58,786 1,863 3.17 64,108 1,853 2.89
Loans and loans held for sale: 1
Commercial 854,108 43,099 5.05 751,444 33,896 4.51 734,829 32,620 4.44
Tax exempt 14,352 499 3.48 15,064 520 3.45 16,326 564 3.45
Real estate 395,302 18,794 4.75 373,360 16,612 4.45 398,766 16,594 4.16
Consumer 11,349   575   5.07   13,660   709   5.19   16,762   804   4.80  
Total loans 1,275,111   62,967   4.94   1,153,528   51,737   4.49   1,166,683   50,582   4.34  
Total earning assets 1,524,360   69,760   4.58   1,356,520   56,598   4.17   1,335,357   54,123   4.05  
Less: Allowance for loan losses (10,530 ) (9,626 ) (8,939 )
Cash and due from banks 16,828 16,287 13,765
Other assets 106,600   90,585   87,815  
Total assets $ 1,637,258   $ 1,453,766   $ 1,427,998  
 
Liabilities
Deposits:
NOW $ 432,789 $ 3,246 0.75 $ 438,123 $ 2,608 0.60 % $ 454,320 $ 2,413 0.53 %
Money market checking 245,008 2,455 1.00 239,632 1,781 0.74 163,630 1,282 0.78
Savings 44,049 29 0.07 47,034 78 0.17 43,870 88 0.20
IRAs 17,894 285 1.59 16,678 217 1.30 16,319 208 1.27
CDs 319,720 5,620 1.76 262,417 3,610 1.38 314,542 3,757 1.19
Repurchase agreements and federal funds sold 18,536 56 0.30 23,559 75 0.32 27,066 72 0.27
FHLB and other borrowings 190,686 4,259 2.23 122,144 1,690 1.38 139,736 1,086 0.78
Subordinated debt 25,774   1,756   6.81   33,524   2,242   6.69   33,524   2,226   6.64  
Total interest-bearing liabilities 1,294,456   17,706   1.37   1,183,111   12,301   1.04   1,193,007   11,132   0.93  
Noninterest bearing demand deposits 171,631 117,696 99,826
Other liabilities 10,304   8,006   12,220  
Total liabilities 1,476,391   1,308,813   1,305,053  
 
Stockholders’ equity
Preferred stock 7,834 7,927 16,334
Common stock 11,082 10,355 8,263
Paid-in capital 107,669 96,987 75,799
Treasury stock (1,084 ) (1,084 ) (1,084 )
Retained earnings 42,509 34,155 25,943
Accumulated other comprehensive income (7,143 ) (3,387 ) (2,310 )
Total stockholders’ equity 160,867   144,953   122,945  
Total liabilities and stockholders’ equity $ 1,637,258   $ 1,453,766   $ 1,427,998  
 
Net interest spread 3.21 3.13 3.12
Net interest income-margin $ 52,054   3.41 % $ 44,297   3.27 % $ 42,991   3.22 %
 

1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

 
 
Selected Financial Data

(Unaudited) (Dollars in thousands, except per share data)

 
    Quarterly     Year-to-Date
2018     2018     2018     2018     2017 2018     2017
 

Fourth
Quarter

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Earnings and Per Share Data:
Net income $ 2,999 $ 3,579 $ 2,831 $ 2,594 $ 1,423 $ 12,003 $ 7,575
Net income available to common shareholders 2,876 3,456 2,709 2,473 1,299 11,514 7,077
Earnings per share - basic 0.25 0.30 0.25 0.24 0.12 1.04 0.69
Earnings per share - diluted 0.24 0.29 0.25 0.23 0.12 1.00 0.68
Cash dividends paid per common share 0.03 0.03 0.025 0.025 0.025 0.11 0.10
Book value per common share 14.55 14.13 13.93 13.53 13.63 14.55 13.63
Tangible book value per common share 12.92 12.48 12.25 11.72 11.80 12.92 11.80
Weighted average shares outstanding - basic 11,582,378 11,416,202 10,634,805 10,474,138 10,444,627 11,030,984 10,308,738
Weighted average shares outstanding - diluted

12,772,222

13,113,259 11,502,148 12,714,353 10,823,994

12,722,003

10,440,228
 
Performance Ratios:
Return on average assets 1 0.69 % 0.85 % 0.70 % 0.68 % 0.38 % 0.73 % 0.52 %
Return on average equity 1 6.95 % 8.53 % 7.40 % 6.94 % 3.79 % 7.46 % 5.23 %
Net interest margin 2 3.54 % 3.43 % 3.38 % 3.29 % 3.29 % 3.41 % 3.27 %
Efficiency ratio 3 81.36 % 76.63 % 82.09 % 81.64 % 81.11 % 80.36 % 82.94 %
Overhead ratio 1 4 4.28 % 4.38 % 4.76 % 4.40 % 4.69 % 4.45 % 4.85 %
 
Asset Quality Data and Ratios:
Charge-offs $ 801 $ 294 $ 29 $ 356 $ 572 $ 1,480 $ 1,497
Recoveries 9 13 8 71 18 101 101
Net loan charge-offs to total loans 1 5 0.24 % 0.09 % 0.01 % 0.10 % 0.20 % 0.11 % 0.13 %
Allowance for loan losses 10,939 11,439 10,651 10,067 9,878 10,939 9,878
Allowance for loan losses to total loans 6 0.84 % 0.88 % 0.88 % 0.87 % 0.89 % 0.84 % 0.89 %
Nonperforming loans 7,103 12,846 9,419 9,102 9,699 7,103 9,699
Nonperforming loans to total loans 0.54 % 0.99 % 0.78 % 0.79 % 0.88 % 0.54 % 0.88 %
 
Capital Ratios:
Equity to assets 10.10 % 9.92 % 9.84 % 9.51 % 9.79 % 10.10 % 9.79 %
Leverage ratio 9.87 % 9.91 % 9.90 % 9.50 % 9.27 % 9.87 % 9.27 %
Common equity Tier 1 capital ratio 11.16 % 11.27 % 11.28 % 10.60 % 10.55 % 11.16 % 10.55 %
Tier 1 risk-based capital ratio 12.02 % 12.15 % 12.20 % 11.57 % 11.54 % 12.02 % 11.54 %
Total risk-based capital ratio 13.78 % 14.10 % 14.34 % 14.80 % 14.87 % 13.78 % 14.87 %
 

1 annualized for the quarterly periods presented

2 net interest income as a percentage of average interest earning assets

3 noninterest expense as a percentage of net interest income and noninterest income

4 noninterest expense as a percentage of average assets

5 charge-offs less recoveries

6 excludes loans held for sale

 
 
Non-GAAP Reconciliation: Tangible Book Value per Common Share
 
    Quarterly     Year-to-Date
2018     2018     2018     2018     2017 2018     2017
(Dollars in thousands)

Fourth
Quarter

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Goodwill $ 18,480 $ 18,480 $ 18,480 $ 18,480 $ 18,480 $   18,480 $   18,480
Core deposit intangibles   550     574     598     622     646   550   646  
Total intangibles 19,030 19,054 19,078 19,102 19,126 19,030 19,126
 
Total Equity 176,773 170,876 165,795 150,421 150,192 176,773 150,192
Less: Preferred equity (7,834 ) (7,834 ) (7,834 ) (7,834 ) (7,834 ) (7,834 ) (7,834 )
Less: Total intangibles   (19,030 )   (19,054 )   (19,078 )   (19,102 )   (19,126 ) (19,030 ) (19,126 )
Tangible common equity 149,909 143,988 138,883 123,485 123,232 149,909 123,232
 
Tangible common equity 149,909 143,988 138,883 123,485 123,232 149,909 123,232
Common shares outstanding (000s)   11,607     11,537     11,338     10,539     10,445   11,607   10,445  
Tangible book value per common share ($) 12.92 12.48 12.25 11.72 11.80 12.92 11.80
 

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