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Shore Bancshares Reports 2018 Results

EASTON, Md., Jan. 31, 2019 /PRNewswire/ -- Shore Bancshares, Inc. (SHBI) reported net income of $12.094 million or $0.95 per diluted common share for the fourth quarter of 2018, which included the sale of its retail insurance business, Avon Dixon, LLC ("Avon") on December 31, 2018 for net proceeds of $25.2 million and a net gain after tax of $8.2 million, or $0.64 per diluted common share.  Absent the sale of Avon, the Company reported net income of $3.905 million or $0.31 per diluted common share for the fourth quarter of 2018. This compared to net income of $4.454 million or $0.35 per diluted common share for the third quarter of 2018, and net income of $2.698 million or $0.21 per diluted common share for the fourth quarter of 2017.  The Company reported net income of $24.997 million or $1.96 per diluted common share for fiscal year 2018. Excluding the sale of Avon, the Company reported net income of $16.832 million or $1.32 per diluted common share for fiscal year 2018.  This compared to net income of $11.262 million, or $0.89 per diluted common share for fiscal year 2017, an increase of $5.6 million, or $0.43 per diluted common share.

Shore Bancshares Logo (PRNewsfoto/Shore Bancshares, Inc.)

When comparing the fourth quarter of 2018 to the third quarter of 2018, excluding the sale of Avon, net income decreased due to higher interest expenses on deposits and borrowings coupled with a higher provision for credit losses.  When comparing the fourth quarter of 2018 to the fourth quarter of 2017, excluding the sale of Avon, the improved results were driven by an increase in net interest income due to higher loan volume, partially offset by an increase in interest expenses which included competitive pressure to increase core deposit rates.  When comparing fiscal year 2018 to fiscal year 2017, excluding the sale of Avon, improved earnings were due to increases in net interest income of $5.1 million and noninterest income of $603 thousand. In addition, the provision for credit losses declined $617 thousand. Partially offsetting these positive variances were increases in interest expenses of $3.0 million and noninterest expenses of $3.5 million.  The reduced corporate income tax rate from 35% in 2017 to 21% for 2018 was also a contributing factor for improved earnings when comparing the fourth quarter and fiscal year 2018 to the fourth quarter and fiscal year 2017.

"This has been a significant year for the Company, in terms of loan growth, core earnings and the divesture of our insurance agency Avon-Dixon," said Lloyd L. "Scott" Beatty Jr., CEO. "The proceeds from the sale of our insurance agency will provide the opportunity to fund new loan growth and expand our activities in some of our new markets. As we look forward to 2019, we are committed to our strategic plan for growing the Company both organically and through opportunistic acquisitions."

Balance Sheet Review
Total assets were $1.483 billion at December 31, 2018, a $89.2 million, or 6.4%, increase when compared to $1.394 billion at the end of 2017.  The primary reason for the increase was the addition of $101.8 million in loans or 9.3%, which were funded by a decrease in investment securities available for sale of $42.5 million, and an increase in short-term and long-term borrowings of $54.1 million.

Total deposits at December 31, 2018 increased $9.6 million, or less than 1%, when compared to December 31, 2017.  The increase was due to increases in rates paid on core deposits as well as a new insured cash sweep ("ICS") product for customers.

Total stockholders' equity increased $19.5 million, or 11.9%, when compared to the end of 2017 primarily due to current year's earnings which included the sale of Avon, partially offset by common stock dividends paid to shareholders of $4.1 million.  At December 31, 2018, the ratio of total equity to total assets was 12.35% and the ratio of total tangible equity to total tangible assets was 11.13%, higher than the ratios of 11.75% and 9.65%, respectively, at December 31, 2017. These ratios were significantly impacted by the sale of Avon on December 31, 2018, which resulted in the transition of intangible assets to tangible assets.

Review of Quarterly Financial Results
Net interest income was $12.5 million for the fourth quarter of 2018, compared to $12.9 million for the third quarter of 2018 and $12.4 million for the fourth quarter of 2017.  The decrease in net interest income when compared to the third quarter of 2018 was primarily due to an increase in interest on deposits of $751 thousand and borrowings of $128 thousand.  The increase in interest on core deposits was implemented late in the third quarter and the entire fourth quarter of 2018 to combat competitive market rates.  This had a significant impact on the net interest margin, resulting in a decline of 18 bps. The increase in net interest income when compared to the fourth quarter of 2017 was due to significant increases in average loans of $126.5 million, or 11.9%.  Total interest income on loans increased $1.7 million, or 13.0% in the fourth quarter of 2018 as compared to the fourth quarter of 2017, which was mostly offset by an increase in interest expense of $1.6 million, or 261.9%.  In addition, the yield on total earning assets increased 21 bps, while the cost of interest-bearing liabilities increased 64 bps quarter over quarter.  These variances resulted in a net interest margin of 3.58% for the fourth quarter of 2018, compared to 3.81% for the fourth quarter of 2017. 

The provision for credit losses was $460 thousand for the fourth quarter of 2018, $307 thousand for the third quarter of 2018 and $545 thousand for the fourth quarter of 2017.  The higher level of provision for credit losses when comparing the fourth quarter of 2018 to the third quarter of 2018 was primarily due to one large credit of approximately $7.5 million, transitioning to nonaccrual during the fourth quarter. The Company took a partial charge-off on this relationship and no additional loss is anticipated. The decline in the provision for credit losses when comparing the fourth quarter of 2018 to the fourth quarter of 2017, was due to significant growth in the portfolio and overall improved credit quality despite the large nonaccrual added in the fourth quarter of 2018.  Net charge-offs were $445 thousand for the fourth quarter of 2018, $100 thousand for the third quarter of 2018 and $59 thousand for the fourth quarter of 2017.  The increase in net charge-offs was directly related to the one large credit discussed above. The ratio of annualized net charge-offs to average loans was 0.15% for the fourth quarter of 2018, 0.03% for the third quarter of 2018 and 0.02% for the fourth quarter of 2017.  The ratio of the allowance for credit losses to period-end loans for both December 31, 2018 and September 30, 2018 was 0.87% and was 0.89% at December 31, 2017.  

At December 31, 2018, nonperforming assets, excluding accruing TDRs, were $18.0 million, an increase of $9.1 million, or 102.8%, when compared to September 30, 2018 and an increase of $10.6 million, or 143.3%, when compared to December 31, 2017.  Additionally, accruing TDRs were $8.7 million at December 31, 2018, a decrease of $270 thousand, or 3.0%, when compared to September 30, 2018 and a decrease of $4.7 million, or 35.0%, when compared to December 31, 2017.  Although a significant nonaccrual loan was added late in the fourth quarter of 2018, the Company had been experiencing positive trends through continued workout efforts and charge-offs on persistent troubled borrowers for the last 12 months.  At December 31, 2018, the ratio of nonperforming assets to total assets was 1.21%, higher than the 0.60% at September 30, 2018 and 0.53% at December 31, 2017.  However, the ratio of accruing TDRs to total assets at December 31, 2018 was 0.58%, compared to 0.61% at September 30, 2018 and 0.96% at December 31, 2017.

Total noninterest income for the fourth quarter of 2018, excluding the sale of Avon, decreased $292 thousand, or 6.2%, when compared to the third quarter of 2018 and increased $79 thousand, or 1.8%, when compared to the fourth quarter of 2017.  The decrease from the third quarter of 2018 was primarily due to a decline in insurance agency commissions of $179 thousand, which is typical during the last quarter of the year, and the additional distraction of the sale of Avon.  The increase from the fourth quarter of 2017, excluding the sale of Avon, of $79 thousand was the result of increases in insurance agency commissions of $93 thousand and service charges on deposit accounts of $74 thousand, partially offset by a decrease in trust and investment fee income of $50 thousand.

Total noninterest expense for the fourth quarter of 2018 decreased $112 thousand, or 1.0%, when compared to the third quarter of 2018 and increased $542 thousand, or 5.1%, when compared to the fourth quarter of 2017.  The decrease from the third quarter of 2018 was primarily due to lower costs associated with employee benefits due to reduced medical claims from the Company's self-funded insurance program and lower salaries and wages due to lower accrued bonus and incentive payouts.  Partially offsetting these decreases in noninterest expense were higher legal and professional fees, mostly related to negotiating the sale of Avon, and a write-down of a single other real estate owned property of $212 thousand. The increase from the fourth quarter of 2017 was primarily due to increases in other real estate owned write-downs, higher legal fees due to the sale of Avon and additional amortization of intangibles acquired in the Northwest branch acquisition in 2017. 

Review of 2018 Financial Results
Net interest income for 2018 was $50.6 million, an increase of $5.1 million, or 11.2%, when compared to 2017 primarily due to an increase in average loans of $169.7 million, or 17.3%.  The significant increase in loans generated higher interest income of approximately $7.7 million, or 17.7%. Although the yields on loans remained flat when compared to 2017, the growth and the transition of lower yielding assets to higher yielding loans resulted in a higher overall yield on earning assets of 18bps. This was offset by higher rates paid on interest-bearing deposits and increased borrowings resulting in compression of the net interest margin to 3.74% for fiscal 2018 from 3.76% for fiscal 2017. 

The provision for credit losses for 2018 and 2017 was $1.7 million and $2.3 million, respectively, while net charge-offs were $1.1 million and $1.2 million, respectively.  The ratio of annualized net charge-offs to average loans was 0.10% for 2018 and 0.13% for 2017.

Total noninterest income, excluding the sale of Avon, for 2018 increased $603 thousand, or 3.4%, when compared to 2017.  The increase was primarily due to increases in service charges on deposit accounts of $251 thousand and insurance agency commissions of $169 thousand.

Total noninterest expense for 2018 increased $3.5 million, or 8.6%, when compared to 2017.  The increase was primarily due to the cost of operating four additional branches for an entire year which caused increases in almost all noninterest expense line items, offset by lower fees for data processing due to renegotiating the core processor contract in 2018 and lower legal/professional fees related to the branch acquisition in 2017. 

Shore Bancshares Information
Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland's Eastern Shore. It is the parent company of Shore United Bank and an insurance premium finance company, Mubell Finance, LLC. Shore Bancshares engages in trust and wealth management services through Wye Financial & Trust, a division of Shore United Bank.  Additional information is available at www.shorebancshares.com.

Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled "Risk Factors".

The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

 

 

Shore Bancshares, Inc.













Financial Highlights













(Dollars in thousands, except per share data)








































   For the Three Months Ended


For the Twelve Months Ended



December 31, 


December 31, 



2018


2017

 Change


2018


2017

 Change


PROFITABILITY FOR THE PERIOD













     Net interest income

$          12,726


$          12,369


2.9

%

$       50,635


$       45,528


11.2

%

     Provision for credit losses

460


545


(15.6)


1,674


2,291


(26.9)


     Noninterest income

16,910


4,339


289.7


31,089


17,750


75.1


     Noninterest expense

11,174


10,632


5.1


44,750


41,202


8.6


     Income before income taxes

18,002


5,531


225.5


35,300


19,785


78.4


     Income tax expense 

5,908


2,833


108.5


10,303


8,523


20.9


     Net income 

$          12,094


$             2,698


348.3


$       24,997


$       11,262


122.0




























     Return on average assets 

3.28

%

0.78

%

250

bp

1.74

%

0.87

%

87

bp

     Return on average equity 

27.70


6.53


2,117


14.81


7.05


776


     Return on average tangible equity (1)

34.42


8.36


2,606


18.78


8.36


1,042


     Net interest margin

3.58


3.81


(23)


3.74


3.76


(2)


     Efficiency ratio - GAAP 

37.70


63.63


(2,593)


54.76


65.11


(1,035)


     Efficiency ratio - Non-GAAP (1)

36.72


62.73


(2,601)


53.57


64.37


(1,080)




























PER SHARE DATA













     Basic net income per common share

$              0.95


$               0.21


352.4

%

$           1.96


$           0.89


120.2

%

     Diluted net income per common share

0.95


0.21


352.4


1.96


0.89


120.2


     Dividends paid per common share

0.09


0.07


28.6


0.32


0.22


45.5


     Book value per common share at period end

14.37


12.90


11.4








     Tangible book value per common share at period end (1)

12.77


10.36


23.3








     Market value at period end

14.54


16.70


(12.9)


14.54






     Market range:













       High

18.32


18.49


(0.9)


20.09


18.49


8.7


       Low

12.95


15.74


(17.7)


12.95


14.64


(11.5)




























AVERAGE BALANCE SHEET DATA













     Loans

$    1,189,504


$     1,062,980


11.9

%

$ 1,153,169


$     983,484


17.3

%

     Investment securities

177,700


211,910


(16.1)


189,879


201,879


(5.9)


     Earning assets

1,385,368


1,294,768


7.0


1,357,755


1,216,182


11.6


     Assets

1,463,839


1,378,553


6.2


1,435,914


1,287,751


11.5


     Deposits

1,197,445


1,202,260


(0.4)


1,180,288


1,118,075


5.6


     Stockholders' equity

173,214


163,893


5.7


168,782


159,741


5.7




























CREDIT QUALITY DATA 













     Net charge-offs

$               445


$                  59


654.2

%

$         1,112


$         1,236


(10.0)

%














     Nonaccrual loans 

$          16,655


$             4,971


235.0








     Loans 90 days past due and still accruing

139


639


(78.2)








     Other real estate owned

1,222


1,794


(31.9)








     Total nonperforming assets 

18,016


7,404


143.3








     Accruing troubled debt restructurings (TDRs) 

8,663


13,326


(35.0)








     Total nonperforming assets and accruing TDRs 

$          26,679


$          20,730


28.7


































CAPITAL AND CREDIT QUALITY RATIOS













     Period-end equity to assets

12.35

%

11.75

%

60

bp







     Period-end tangible equity to tangible assets (1)

11.13


9.65


148





















     Annualized net charge-offs to average loans

0.15


0.02


13


0.10

%

0.13

%

(3)

bp














     Allowance for credit losses as a percent of:













     Period-end loans

0.87


0.89


(2)








     Nonaccrual loans 

62.10


196.76


(13,466)








     Nonperforming assets 

57.41


132.10


(7,469)








     Accruing TDRs 

119.39


73.40


4,599








     Nonperforming assets and accruing TDRs 

38.77


47.18


(841)





















     As a percent of total loans:













     Nonaccrual loans 

1.39


0.45


94








     Accruing TDRs  

0.72


1.22


(50)








     Nonaccrual loans and accruing TDRs 

2.12


1.67


45





















     As a percent of total loans+other real estate owned:













     Nonperforming assets

1.51


0.68


83








     Nonperforming assets and accruing TDRs 

2.23


1.89


34





















     As a percent of total assets:













     Nonaccrual loans 

1.12


0.36


76








     Nonperforming assets 

1.21


0.53


68








     Accruing TDRs 

0.58


0.96


(38)








     Nonperforming assets and accruing TDRs 

1.80


1.49


31





















(1)  See the reconciliation table on page 12 of 12.













 

 

Shore Bancshares, Inc.







Consolidated Balance Sheets







(In thousands, except per share data)


























December 31, 2018



December 31, 


December 31, 


compared to



2018


2017


 December 31, 2017


ASSETS







    Cash and due from banks

$            16,294


$          21,534


(24.3)

%

    Interest-bearing deposits with other banks

50,931


10,286


395.1


  Cash and cash equivalents

67,225


31,820


111.3









    Investment securities available for sale (at fair value)

154,432


196,955


(21.6)


    Investment securities held to maturity 

6,043


6,247


(3.3)


    Equity securities, at fair value

1,269


-


-


    Federal Reserve and Federal Home Loan Bank stock

6,476


3,735


73.4









    Loans

1,195,355


1,093,514


9.3


    Less: allowance for credit losses

(10,343)


(9,781)


5.7


    Loans, net

1,185,012


1,083,733


9.3









    Premises and equipment, net

22,711


23,054


(1.5)


    Goodwill

17,526


27,618


(36.5)


    Other intangible assets, net

2,857


4,719


(39.5)


    Other real estate owned, net

1,222


1,794


(31.9)


    Other assets

18,303


14,185


29.0









                         Total assets

$      1,483,076


$    1,393,860


6.4









LIABILITIES







    Noninterest-bearing deposits

$          330,466


$        328,322


0.7


    Interest-bearing deposits

881,875


874,459


0.8


                Total deposits

1,212,341


1,202,781


0.8









    Short-term borrowings

60,812


21,734


179.8


    Long-term borrowings

15,000


-


-


    Accrued expenses and other liabilities

11,738


5,609


109.3


                          Total liabilities

1,299,891


1,230,124


5.7









STOCKHOLDERS' EQUITY







    Common stock, par value $0.01; authorized  







       35,000,000 shares

127


127


-


    Additional paid in capital

65,434


65,256


0.3


    Retained earnings

120,574


99,662


21.0


    Accumulated other comprehensive (loss) 

(2,950)


(1,309)


(125.4)


                          Total stockholders' equity

183,185


163,736


11.9









                          Total liabilities and stockholders' equity

$      1,483,076


$    1,393,860


6.4









Period-end common shares outstanding

12,749


12,688


0.5


Book value per common share

$              14.37


$            12.90


11.4


 

 

Shore Bancshares, Inc.











Consolidated Statements of Income











(In thousands, except per share data)


































For the Three Months Ended


For the Twelve Months Ended



December 31, 


December 31, 



2018


2017

% Change


2018


2017

% Change


INTEREST INCOME











    Interest and fees on loans 

$    13,452


$    11,855

13.5

%

$    51,332


$    43,617

17.7

%

    Interest on investment securities:











        Taxable

1,339


1,048

27.8


4,289


3,847

11.5


        Tax-exempt 

-


-

-


-


3

(100.0)


    Interest on deposits with other banks

103


65

58.5


286


334

(14.4)


                   Total interest income

14,894


12,968

14.9


55,907


47,801

17.0













INTEREST EXPENSE











    Interest on deposits

1,577


586

169.1


3,531


2,242

57.5


    Interest on short-term borrowings

486


13

3,638.5


1,636


31

5,177.4


    Interest on long-term borrowings

105


-

-


105


-

-


                   Total interest expense

2,168


599

261.9


5,272


2,273

131.9













NET INTEREST INCOME

12,726


12,369

2.9


50,635


45,528

11.2


Provision for credit losses

460


545

(15.6)


1,674


2,291

(26.9)













NET INTEREST INCOME AFTER PROVISION 











  FOR CREDIT LOSSES

12,266


11,824

3.7


48,961


43,237

13.2













NONINTEREST INCOME











    Service charges on deposit accounts

1,045


971

7.6


3,879


3,628

6.9


    Trust and investment fee income

360


410

(12.2)


1,557


1,532

1.6


    Gains on sales and calls of investment securities

-


-

-


-


5

-


    Gain on sale of insurance agency

12,736


-

-


12,736


-

-


    Insurance agency commissions

1,991


1,898

4.9


9,006


8,837

1.9


    Other noninterest income

778


1,060

(26.6)


3,911


3,748

4.3


                      Total noninterest income

16,910


4,339

289.7


31,089


17,750

75.1













NONINTEREST EXPENSE











    Salaries and wages

5,319


5,503

(3.3)


21,691


20,011

8.4


    Employee benefits

1,017


1,081

(5.9)


5,174


4,645

11.4


    Occupancy expense 

747


746

0.1


3,050


2,696

13.1


    Furniture and equipment expense

271


232

16.8


1,084


1,035

4.7


    Data processing

875


871

0.5


3,455


3,680

(6.1)


    Directors' fees

145


99

46.5


556


380

46.3


    Amortization of intangible assets

281


112

150.9


912


315

189.5


    FDIC insurance premium expense

159


201

(20.9)


771


599

28.7


    Other real estate owned expenses, net

228


(86)

365.1


353


272

29.8


    Legal and professional fees

626


453

38.2


2,058


2,308

(10.8)


    Other noninterest expenses

1,506


1,420

6.1


5,646


5,261

7.3


                      Total noninterest expense

11,174


10,632

5.1


44,750


41,202

8.6













Income before income taxes

18,002


5,531

225.5


35,300


19,785

78.4


Income tax expense 

5,908


2,833

108.5


10,303


8,523

20.9













NET INCOME 

$    12,094


$      2,698

348.3


$    24,997


$    11,262

122.0













Weighted average shares outstanding - basic

12,749


12,688

0.5


12,739


12,682

0.4


Weighted average shares outstanding - diluted

12,766


12,750

0.1


12,753


12,718

0.3













Basic net income per common share

$        0.95


$        0.21

352.4


$        1.96


$        0.89

120.2


Diluted net income per common share

0.95


0.21

352.4


1.96


0.89

120.2


Dividends paid per common share

0.09


0.07

28.6


0.32


0.22

45.5


 

 

Shore Bancshares, Inc.


















Consolidated Average Balance Sheets


















(Dollars in thousands)























































For the Three Months Ended


For the Twelve Months Ended




December 31, 


December 31, 




2018


2017


2018


2017




Average 


Yield/


Average 


Yield/


Average 


Yield/


Average 


Yield/




balance


rate 


balance


rate 


balance


rate


balance


rate



Earning assets


















  Loans (1), (2), (3)

$ 1,189,504


4.50

%

$ 1,062,980


4.45

%

$ 1,153,169


4.46

%

$     983,484


4.46

%


  Investment securities (1)


















   Taxable

177,700


2.46


211,910


1.98


189,879


2.26


201,792


1.91



   Tax-exempt

-


-


-


-


-


-


87


5.42



  Interest-bearing deposits

18,164


2.25


19,878


1.30


14,707


1.94


30,819


1.08



    Total earning assets

1,385,368


4.20

%

1,294,768


3.99

%

1,357,755


4.13

%

1,216,182


3.95

%


Cash and due from banks

18,204




18,589




17,327




15,896





Other assets

70,858




74,700




71,110




64,854





Allowance for credit losses

(10,591)




(9,504)




(10,278)




(9,181)





Total assets

$ 1,463,839




$ 1,378,553




$ 1,435,914




$ 1,287,751









































Interest-bearing liabilities


















  Demand deposits

$     218,519


0.53

%

$     222,321


0.24

%

$     215,600


0.32

%

$     210,139


0.20

%


  Money market and savings deposits 

378,163


0.68


382,438


0.12


378,344


0.27


339,971


0.12



  Brokered deposits

22,816


2.17


-


-


14,844


2.12


-


-



  Certificates of deposit $100,000 or more

97,023


0.94


110,458


0.49


98,331


0.67


118,723


0.51



  Other time deposits

141,702


0.80


158,241


0.49


146,492


0.57


152,959


0.53



    Interest-bearing deposits

858,223


0.73


873,458


0.27


853,611


0.41


821,792


0.27



  Short-term borrowings

72,462


2.66


6,087


0.86


77,311


2.12


4,525


0.68



  Long-term borrowings

14,348


2.89


-


-


3,616


2.89


-


-



    Total interest-bearing liabilities

945,033


0.91

%

879,545


0.27

%

934,538


0.56

%

826,317


0.28

%


Noninterest-bearing deposits

339,222




328,802




326,677




296,283





Accrued expenses and other liabilities

6,370




6,313




5,917




5,410





Stockholders' equity

173,214




163,893




168,782




159,741





Total liabilities and stockholders' equity

$ 1,463,839




$ 1,378,553




$ 1,435,914




$ 1,287,751























Net interest spread



3.29

%



3.72

%



3.57

%



3.67

%


Net interest margin



3.58

%



3.81

%



3.74

%



3.76

%




















(1) All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, 









      for the fourth quarter of 2018 and the year to date period in 2018 and 35% for all quarters during 2017, exclusive of the alternative minimum tax rate

     and nondeductible interest expense.


















(2) Average loan balances include nonaccrual loans.

















(3) Interest income on loans includes amortized loan fees, net of costs and accretion of discounts on acquired loans, 









     which are included in the yield calculations.









 

 

Shore Bancshares, Inc.















Financial Highlights By Quarter















(Dollars in thousands, except per share data)














































4th Quarter


3rd Quarter


2nd Quarter


1st Quarter


4th Quarter


Q4 2018


Q4 2018



2018


2018


2018


2018


2017


compared to


compared to



Q4 2018


Q3 2018


Q2 2018


Q1 2018


Q4 2017


Q3 2018


Q4 2017


PROFITABILITY FOR THE PERIOD















     Taxable-equivalent net interest income

$           12,756


$           12,975


$          12,661


$          12,357


$          12,430


(1.7)

%

2.6

%

     Less:  Taxable-equivalent adjustment

30


28


28


28


61


7.1


(50.8)


     Net interest income

12,726


12,947


12,633


12,329


12,369


(1.7)


2.9


     Provision for credit losses

460


307


418


489


545


49.8


(15.6)


     Noninterest income

16,910


4,710


4,540


4,929


4,339


259.0


289.7


     Noninterest expense

11,174


11,286


10,828


11,462


10,632


(1.0)


5.1


     Income before income taxes

18,002


6,064


5,927


5,307


5,531


196.9


225.5


     Income tax expense 

5,908


1,610


1,536


1,249


2,833


267.0


108.5


     Net income

$           12,094


$             4,454


$            4,391


$            4,058


$            2,698


171.5


348.3
































     Return on average assets 

3.28

%

1.21

%

1.24

%

1.18

%

0.78

%

207

bp

250

bp

     Return on average equity 

27.70


10.38


10.58


9.97


6.53


1,732


2,117


     Return on average tangible equity (1)

34.42


13.36


13.65


12.70


8.36


2,106


2,606


     Net interest margin

3.58


3.76


3.79


3.83


3.81


(18)


(23)


     Efficiency ratio - GAAP 

37.70


63.92


63.05


66.42


63.63


(2,622)


(2,593)


     Efficiency ratio - Non-GAAP (1)

36.72


62.23


61.56


65.67


62.73


(2,551)


(2,601)
































PER SHARE DATA















     Basic net income per common share

$               0.95


$               0.35


$              0.34


$              0.32


$              0.21


171.4

%

352.4

%

     Diluted net income per common share

0.95


0.35


0.34


0.32


0.21


171.4


352.4


     Dividends paid per common share

0.09


0.08


0.08


0.07


0.07


12.5


28.6


     Book value per common share at period end

14.37


13.45


13.19


12.95


12.90


6.8


11.4


     Tangible book value per common share at period end (1)

12.77


10.96


10.68


10.42


10.36


16.5


23.3


     Market value at period end

14.54


17.82


19.02


18.86


16.70


(18.4)


(12.9)


     Market range:















        High

18.32


19.84


20.09


19.80


18.49


(7.7)


(0.9)


        Low

12.95


16.63


17.92


16.28


15.74


(22.1)


(17.7)
































AVERAGE BALANCE SHEET DATA















     Loans

$     1,189,504


$     1,174,513


$    1,141,296


$    1,106,213


$    1,062,980


1.3

%

11.9

%

     Investment securities

177,700


178,572


186,453


197,285


211,910


(0.5)


(16.1)


     Earning assets

1,385,368


1,370,573


...