DANVILLE, VA--(Marketwired - Oct 21, 2014) - American National Bankshares Inc. (
- Q3 net income of $3.2 million and diluted EPS of $0.40
- Net interest margin of 3.68% for Q3 2014
- Nonperforming assets 0.52% of total assets
- Tangible common equity to tangible assets 10.32%
American National Bankshares Inc. (
Net income for the first nine months of 2014 was $9,851,000 compared to $12,604,000 for the comparable period of 2013, a $2,753,000 or 21.8% decrease. Diluted earnings per share were $1.25 for the 2014 period compared to $1.60 for the 2013 period.
Earnings for the 2014 and 2013 quarters and nine month periods were favorably impacted by the July 2011 merger between American National and MidCarolina Financial Corporation ("MidCarolina"). However, as anticipated, the magnitude of that favorable impact is rapidly declining and was much greater in the 2013 periods than the 2014 periods.
Financial Performance and Overview
Jeffrey V. Haley, President and Chief Executive Officer, reported, "Growth, organic and by acquisition, has been and continues to be one of our key strategic objectives. We are pleased this quarter to have both, but most notably we are delighted to report good progress on our recently announced plans to acquire MainStreet BankShares, Inc., parent company of Franklin Community Bank. This acquisition will expand our footprint into the Roanoke MSA and add three banking offices in the Franklin County and Smith Mountain Lake area. We expect the merger will close in early 2015 and will bring our total assets to approximately $1.5 billion.
"Changing focus from the future to the very recent past, at September 30, 2014, American National had $816,588,000 in loans compared to $798,996,000 at September 30, 2013, an increase of $17,592,000 or 2.2%.
"We consider the increase in loan volume and demand, even though modest, to be an indicator of slowly improving local and regional economic and business conditions.
"At September 30, 2014, American National had $1,051,060,000 in deposits compared to $1,071,083,000 at September 30, 2013, a decrease of $20,023,000 or 1.9%.
"The decline in deposits is primarily related to lower levels of time deposits. We adjust our pricing strategy appropriately with current market conditions and the liquidity requirements for our bank. Our primary focus on the liability side of the balance sheet is growing core deposits and their affiliated relationships. The challenge in this low rate environment is to fund our bank in a cost effective and yet competitive manner. Our cost of deposits for the third quarter 2014 was 0.55%, down from 0.64% for the third quarter 2013.
"Our earnings for the third quarter were $3,168,000. This is down 25.3% from the same quarter of 2013. On a diluted per share basis earnings were $0.40 per share for the 2014 quarter compared to $0.54 per share for the 2013 quarter.
"Earnings continue to be impacted by the mid-2011 merger with MidCarolina. The impact of the fair value accounting from the merger continues to be favorable, though rapidly and significantly decreasing quarter to quarter as we move into our fourth year post-merger. We had a pretax merger related benefit of $337,000 for the third quarter of 2014, compared to $1,522,000 for the third quarter of 2013. This is mostly related to the acquired loan portfolio and we expect this benefit will continue to diminish in magnitude rapidly over the next few quarters.
"Loan loss provision expense was zero for the 2014 and 2013 quarters. No additional provision was necessary due to continuing improvement in various asset quality metrics.
"Noninterest income increased $214,000 or 7.7%. Mortgage banking income fell $122,000 or 26.3% with the decline in the overall market. This was more than offset by an increase in net securities gains of $311,000. These gains are one-time in nature.
"Noninterest expense increased $372,000 or 4.4%. This was mostly related to $268,000 in merger related expense associated with our recently announced plans to acquire MainStreet BankShares, Inc. We anticipate having additional nonrecurring merger related expenses in the fourth quarter of 2014 and the first quarter of 2015."
Haley concluded, "This has been an exciting quarter for American National. We have a wonderful opportunity to grow our bank by adding a quality and compatible community bank in a contiguous market. At the same time, we're continuing to see some organic growth in our loan portfolio, though at a slower pace than during the second quarter. We are continuously open to opportunities to grow this banking franchise, organically and through acquisitions. We know the operating environment is challenging, but we are optimistic about the future. We look forward to serving our customers and continuing to build and improve one of the best community banks in America."
Capital
American National's capital ratios remain strong and exceed all regulatory requirements.
Average shareholders' equity for the third quarter was 13.18% of average assets at September 30, 2014, compared to 12.48% for the comparable quarter of 2013.
Book value per common share was $22.08 at September 30, 2014, compared to $21.03 at September 30, 2013.
Tangible book value per common share was $16.81 at September 30, 2014, compared to $15.63 at September 30, 2013.
Tangible common equity to tangible assets was 10.32% at September 30, 2014, compared to 9.62% at September 30, 2013.
Credit Quality Measurements
Non-performing assets, consisting of $4,494,000 of non-performing loans and $2,364,000 of foreclosed real estate, represented 0.52% of total assets at September 30, 2014, compared to 0.67% at September 30, 2013.
Annualized net charge-offs for the third quarter of 2014 were seven basis points 0.07% of average loans, compared to net charge-offs of zero basis points (0.00%) for the third quarter of 2013.
Annualized net (recoveries) charge-offs for the nine-month period ended September 30, 2014, were 0.02% compared to (0.05)% for the comparable period for 2013.
Net Interest Income
Net interest income before provision for loan losses decreased to $10,460,000 in the third quarter of 2014 from $11,493,000 in third quarter of 2013, a decrease of $1,033,000 or 9.0%.
For the 2014 quarter, the net interest margin was 3.68% compared to 4.06% for the same quarter in 2013, a decrease of 38 basis points (0.38%).
The decline in net interest income and net interest margin was driven by substantial decreases in accretion income and was partially mitigated by higher average loan balances and reduced cost of interest bearing liabilities.
Provision expense
Provision expense for the third quarter of 2014 and 2013 was zero.
The allowance for loan losses as a percentage of total loans was 1.55% at September 30, 2014, compared to 1.59% at September 30, 2013. The gradual decrease in the allowance was due to continued low loss experience and by improving qualitative factors, including strong asset quality metrics and some improvement in local and national economic factors.
Noninterest Income
Noninterest income totaled $2,981,000 in the third quarter of 2014, compared with $2,767,000 in the third quarter of 2013, an increase of $214,000 or 7.7%.
A variety of factors impacted noninterest income during the quarter. Mortgage banking income declined $122,000 or 26.3%, related to the overall change in the marketplace. This was offset by an increase of $311,000 in net securities gains during the quarter. These gains were a combination of selective sales for asset liability strategy reasons and calls prior to maturity.
Noninterest Expense
Noninterest expense totaled $8,827,000 in the third quarter of 2014, compared to $8,455,000 in the third quarter of 2013, an increase of $372,000 or 4.4%.
Major factors impacting noninterest expense during the quarter included a favorable variance of $103,000 in core deposit intangible amortization; a favorable variance of $104,000 in foreclosed real estate expense; and an unfavorable variance in merger related expense of $268,000. The merger related expenses are related to the recently announced plan to acquire MainStreet BankShares, Inc. and its banking subsidiary, Franklin County Bank, N.A. These specific expenses are mostly non-deductible for income tax purposes.
About American National
American National Bankshares Inc. is a multi-state bank holding company with total assets of approximately $1.3 billion. Headquartered in Danville, Virginia, American National is the parent company of American National Bank and Trust Company. American National Bank is a community bank serving southern and central Virginia and north central North Carolina with 24 banking offices and two loan production offices. American National Bank and Trust Company also manages an additional $643 million of trust, investment and brokerage assets in its Trust and Investment Services Division. Additional information about the company and the bank is available on the bank's website at www.amnb.com.
Shares of American National are traded on the NASDAQ Global Select Market under the symbol "AMNB."
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of federal securities laws. Certain of the statements involve significant risks and uncertainties. The statements herein are based on certain assumptions and analyses by American National and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies or guidelines; significant changes in the economic scenario; significant changes in regulatory requirements; significant changes in securities markets; and changes regarding acquisitions and dispositions. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in American National's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. American National Bankshares Inc. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Merger with MainStreet BankShares, Inc.
American National has filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 to register the shares of American National common stock to be issued to the shareholders of MainStreet BankShares, Inc. ("MainStreet") in connection with the proposed merger with MainStreet. The registration statement includes a preliminary proxy statement/prospectus, which is not yet final and will be amended. American National may file other relevant documents concerning the proposed merger with the SEC.
SHAREHOLDERS OF MAINSTREET AND INVESTORS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ALL OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT AMERICAN NATIONAL, MAINSTREET AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents, when they become available, through the website maintained by the SEC at www.sec.gov. Free copies of the definitive proxy statement/prospectus, when it becomes available, also may be obtained by directing a request by telephone or mail to American National Bankshares Inc., 628 Main Street, Danville, Virginia 24541, Attention: Investor Relations (telephone: (434) 792-5111) or MainStreet BankShares, Inc., 1075 Spruce Street, Martinsville, Virginia 24112, Attention: Investor Relations (telephone: (276) 632-8054) or by accessing American National's website at www.amnb.com under "Investments" or MainStreet's website at www.msbsinc.com under "SEC Filings."
| American National Bankshares Inc. and Subsidiaries | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| (Dollars in thousands, except share and per share data) | ||||||||||
| Unaudited | ||||||||||
| September 30 | ||||||||||
| ASSETS | 2014 | 2013 | ||||||||
| Cash and due from banks | $ | 22,699 | $ | 24,071 | ||||||
| Interest-bearing deposits in other banks | 58,278 | 54,198 | ||||||||
| Securities available for sale, at fair value | 328,534 | 347,618 | ||||||||
| Restricted stock, at cost | 4,529 | 4,885 | ||||||||
| Loans held for sale | 811 | 3,919 | ||||||||
| Loans | 816,588 | 798,996 | ||||||||
| Less allowance for loan losses | (12,620 | ) | (12,684 | ) | ||||||
| Net Loans | 803,968 | 786,312 | ||||||||
| Premises and equipment, net | 23,085 | 23,982 | ||||||||
| Other real estate owned, net | 2,364 | 4,215 | ||||||||
| Goodwill | 39,043 | 39,043 | ||||||||
| Core deposit intangibles, net | 2,271 | 3,489 | ||||||||
| Bank owned life insurance | 15,044 | 14,597 | ||||||||
| Accrued interest receivable and other assets | 18,531 | 17,856 | ||||||||
| Total assets | $ | 1,319,157 | $ | 1,324,185 | ||||||
| Liabilities | ||||||||||
| Demand deposits -- noninterest-bearing | $ | 244,469 | $ | 231,583 | ||||||
| Demand deposits -- interest-bearing | 185,982 | 170,641 | ||||||||
| Money market deposits | 173,192 | 181,559 | ||||||||
| Savings deposits | 88,226 | 85,016 | ||||||||
| Time deposits | 359,191 | 402,284 | ||||||||
| Total deposits | 1,051,060 | 1,071,083 | ||||||||
| Customer repurchase agreements | 51,945 | 44,026 | ||||||||
| Long-term borrowings | 9,930 | 9,983 | ||||||||
| Trust preferred capital notes | 27,495 | 27,394 | ||||||||
| Accrued interest payable and other liabilities | 5,562 | 5,873 | ||||||||
| Total liabilities | 1,145,992 | 1,158,359 | ||||||||
| Shareholders' equity | ||||||||||
| Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding | - | - | ||||||||
| Common stock, $1 par, 20,000,000 shares authorized, 7,843,454 shares outstanding at September 30, 2014 and 7,886,476 shares outstanding at September 30, 2013 | 7,843 |
7,886 |
||||||||
| Capital in excess of par value | 57,087 | 57,905 | ||||||||
| Retained earnings | 103,515 | 97,762 | ||||||||
| Accumulated other comprehensive income, net | 4,720 | 2,273 | ||||||||
| Total shareholders' equity | 173,165 | 165,826 | ||||||||
| Total liabilities and shareholders' equity | $ | 1,319,157 | $ | 1,324,185 | ||||||
| American National Bankshares Inc. and Subsidiaries | |||||||||||||||
| Consolidated Statements of Income | |||||||||||||||
| (Dollars in thousands, except share and per share data) | |||||||||||||||
| Unaudited | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30 | September 30 | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| Interest and Dividend Income: | |||||||||||||||
| Interest and fees on loans | $ | 9,864 | $ | 11,100 | $ | 29,398 | $ | 33,853 | |||||||
| Interest and dividends on securities: | |||||||||||||||
| Taxable | 918 | 845 | 2,850 | 2,574 | |||||||||||
| Tax-exempt | 966 | 1,056 | 3,017 | 3,153 | |||||||||||
| Dividends | 72 | 67 | 221 | 176 | |||||||||||
| Other interest income | 32 | 38 | 100 | 106 | |||||||||||
| Total interest and dividend income | 11,852 | 13,106 | 35,586 | 39,862 | |||||||||||
| Interest Expense: | |||||||||||||||
| Interest on deposits | 1,120 | 1,338 | 3,510 | 4,143 | |||||||||||
| Interest on short-term borrowings | 4 | 3 | 8 | 38 | |||||||||||
| Interest on long-term borrowings | 82 | 82 | 243 | 246 | |||||||||||
| Interest on trust preferred capital notes | 186 | 190 | 555 | 567 | |||||||||||
| Total interest expense | 1,392 | 1,613 | 4,316 | 4,994 | |||||||||||
| Net Interest Income | 10,460 | 11,493 | 31,270 | 34,868 | |||||||||||
| Provision for loan losses | - | - | 150 | 294 | |||||||||||
| Net Interest Income After Provision for Loan Losses | 10,460 |
11,493 |
31,120 |
34,574 |
|||||||||||
| Noninterest Income: | |||||||||||||||
| Trust fees | 992 | 1,077 | 3,131 | 2,609 | |||||||||||
| Service charges on deposit accounts | 441 | 452 | 1,285 | 1,290 | |||||||||||
| Other fees and commissions | 479 | 471 | 1,416 | 1,393 | |||||||||||
| Mortgage banking income | 342 | 464 | 880 | 1,713 | |||||||||||
| Securities gains, net | 315 | 4 | 504 | 203 | |||||||||||
| Other | 412 | 299 | 1,168 | 1,015 | |||||||||||
| Total noninterest income | 2,981 | 2,767 | 8,384 | 8,223 | |||||||||||
| Noninterest Expense: | |||||||||||||||
| Salaries | 3,714 | 3,610 | 10,890 | 10,552 | |||||||||||
| Employee benefits | 799 | 856 | 2,621 | 2,622 | |||||||||||
| Occupancy and equipment | 933 | 933 | 2,779 | 2,721 | |||||||||||
| FDIC assessment | 157 | 163 | 486 | 485 | |||||||||||
| Bank franchise tax | 216 | 187 | 669 | 559 | |||||||||||
| Core deposit intangible amortization | 227 | 330 | 888 | 1,171 | |||||||||||
| Data processing | 361 | 305 | 1,054 | 892 | |||||||||||
| Software | 248 | 198 | 745 | 659 | |||||||||||
| Foreclosed real estate, net | 141 | 245 | 148 | 681 | |||||||||||
| Merger related expenses | 268 | - | 268 | - | |||||||||||
| Other | 1,763 | 1,628 | 5,067 | 4,859 | |||||||||||
| Total noninterest expense | 8,827 | 8,455 | 25,615 | 25,201 | |||||||||||
| Income Before Income Taxes | 4,614 | 5,805 | 13,889 | 17,596 | |||||||||||
| Income Taxes | 1,446 | 1,562 | 4,038 | 4,992 | |||||||||||
| Net Income | $ | 3,168 | $ | 4,243 | $ | 9,851 | $ | 12,604 | |||||||
| Net Income Per Common Share: | |||||||||||||||
| Basic | $ | 0.40 | $ | 0.54 | $ | 1.25 | $ | 1.60 | |||||||
| Diluted | $ | 0.40 | $ | 0.54 | $ | 1.25 | $ | 1.60 | |||||||
| Average Common Shares Outstanding: | |||||||||||||||
| Basic | 7,841,078 | 7,877,901 | 7,871,016 | 7,867,835 | |||||||||||
| Diluted | 7,851,735 | 7,892,015 | 7,881,441 | 7,878,961 | |||||||||||
| American National Bankshares Inc. and Subsidiaries | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| (In thousands, except share, ratio and nonfinancial data, unaudited) | 3rd Qtr | 2nd Qtr | 3rd Qtr | YTD | YTD | |||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
| EARNINGS | ||||||||||||||||||||||
| Interest income | $ | 11,852 | $ | 11,780 | $ | 13,106 | $ | 35,586 | $ | 39,862 | ||||||||||||
| Interest expense | 1,392 | 1,429 | 1,613 | 4,316 | 4,994 | |||||||||||||||||
| Net interest income | 10,460 | 10,351 | 11,493 | 31,270 | 34,868 | |||||||||||||||||
| Provision for loan losses | - | 150 | - | 150 | 294 | |||||||||||||||||
| Noninterest income | 2,981 | 2,700 | 2,767 | 8,384 | 8,223 | |||||||||||||||||
| Noninterest expense | 8,827 | 8,365 | 8,455 | 25,615 | 25,201 | |||||||||||||||||
| Income taxes | 1,446 | 1,303 | 1,562 | 4,038 | 4,992 | |||||||||||||||||
| Net income | 3,168 | 3,233 | 4,243 | 9,851 | 12,604 | |||||||||||||||||
| PER COMMON SHARE | ||||||||||||||||||||||
| Earnings per share - basic | $ | 0.40 | $ | 0.41 | $ | 0.54 | $ | 1.25 | $ | 1.60 | ||||||||||||
| Earnings per share - diluted | 0.40 | 0.41 | 0.54 | 1.25 | 1.60 | |||||||||||||||||
| Cash dividends paid | 0.23 | 0.23 | 0.23 | 0.69 | 0.69 | |||||||||||||||||
| Book value per share | 22.08 | 21.95 | 21.03 | 22.08 | 21.03 | |||||||||||||||||
| Book value per share - tangible (a) | 16.81 | 16.65 | 15.63 | 16.81 | 15.63 | |||||||||||||||||
| Closing market price | 22.75 | 21.73 | 23.20 | 22.75 | 23.20 | |||||||||||||||||
| FINANCIAL RATIOS | ||||||||||||||||||||||
| Return on average assets | 0.97 | % | 1.00 | % | 1.30 | % | 1.01 | % | 1.29 | % | ||||||||||||
| Return on average equity | 7.35 | 7.53 | 10.40 | 7.66 | 10.21 | |||||||||||||||||
| Return on average tangible equity (b) | 10.12 | 10.67 | 14.90 | 10.72 | 14.76 | |||||||||||||||||
| Average equity to average assets | 13.18 | 13.22 | 12.48 | 13.15 | 12.64 | |||||||||||||||||
| Tangible equity to tangible assets (a) | 10.32 | 10.37 | 9.62 | 10.32 | 9.62 | |||||||||||||||||
| Net interest margin, taxable equivalent | 3.68 | 3.68 | 4.06 | 3.69 | 4.14 | |||||||||||||||||
| Efficiency ratio (e) | 64.35 | 62.87 | 56.60 | 63.01 | 56.02 | |||||||||||||||||
| Effective tax rate | 31.34 | 28.73 | 26.91 | 29.07 | 28.37 | |||||||||||||||||
| PERIOD-END BALANCES | ||||||||||||||||||||||
| Securities | $ | 333,063 | $ | 354,783 | $ | 352,502 | $ | 333,063 | $ | 352,502 | ||||||||||||
| Loans held for sale | 811 | 118 | 3,919 | 811 | 3,919 | |||||||||||||||||
| Loans, net of unearned income | 816,588 | 813,057 | 798,996 | 816,588 | 798,996 | |||||||||||||||||
| Goodwill and other intangibles | 41,314 | 41,541 | 42,532 | 41,314 | 42,532 | |||||||||||||||||
| Assets | 1,319,157 | 1,300,648 | 1,324,185 | 1,319,157 | 1,324,185 | |||||||||||||||||
| Assets - tangible (a) | 1,277,843 | 1,259,107 | 1,281,653 | 1,277,843 | 1,281,653 | |||||||||||||||||
| Deposits | 1,051,060 | 1,035,800 | 1,071,083 | 1,051,060 | 1,071,083 | |||||||||||||||||
| Customer repurchase agreements | 51,945 | 38,420 | 44,026 | 51,945 | 44,026 | |||||||||||||||||
| Long-term borrowings | 37,425 | 37,394 | 37,377 | 37,425 | 37,377 | |||||||||||||||||
| Shareholders' equity | 173,165 | 172,083 | 165,826 | 173,165 | 165,826 | |||||||||||||||||
| Shareholders' equity - tangible (a) | 131,851 | 130,542 | 123,294 | 131,851 | 123,294 | |||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||
| Securities | $ | 329,455 | $ | 347,726 | $ | 339,582 | $ | 340,720 | $ | 333,785 | ||||||||||||
| Loans held for sale | 1,998 | 1,685 | 5,109 | 1,905 | 6,053 | |||||||||||||||||
| Loans, net of unearned income | 815,564 | 793,060 | 790,846 | 799,114 | 788,192 | |||||||||||||||||
| Interest-earning assets | 1,191,761 | 1,183,559 | 1,189,844 | 1,186,763 | 1,179,680 | |||||||||||||||||
| Goodwill and other intangibles | 41,455 | 41,738 | 42,731 | 41,754 | 43,133 | |||||||||||||||||
| Assets | 1,309,120 | 1,299,535 | 1,307,347 | 1,303,788 | 1,302,070 | |||||||||||||||||
| Assets - tangible (a) | 1,267,665 | 1,257,797 | 1,264,616 | 1,262,034 | 1,258,937 | |||||||||||||||||
| Interest-bearing deposits | 806,267 | 820,342 | 834,305 | 818,858 | 829,029 | |||||||||||||||||
| Deposits | 1,044,913 | 1,043,479 | 1,053,124 | 1,046,644 | 1,045,623 | |||||||||||||||||
| Customer repurchase agreements | 45,725 | 40,720 | 46,712 | 41,443 | 48,016 | |||||||||||||||||
| Long-term borrowings | 37,406 | 37,376 | 37,388 | 37,385 | 37,393 | |||||||||||||||||
| Shareholders' equity | 172,493 | 171,784 | 163,130 | 171,450 | 164,595 | |||||||||||||||||
| Shareholders' equity - tangible (a) | 131,038 | 130,046 | 120,399 | 129,696 | 121,462 | |||||||||||||||||
| American National Bankshares Inc. and Subsidiaries | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| (In thousands, except share, ratio and nonfinancial data, unaudited) | 3rd Qtr | 2nd Qtr | 3rd Qtr | YTD | YTD | |||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
| CAPITAL | ||||||||||||||||||||||
| Average shares outstanding - basic | 7,841,078 | 7,872,079 | 7,877,901 | 7,871,016 | 7,867,835 | |||||||||||||||||
| Average shares outstanding - diluted | 7,851,735 | 7,879,854 | 7,892,015 | 7,881,441 | 7,878,961 | |||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||
| Beginning balance | $ | 12,763 | $ | 12,614 | $ | 12,676 | $ | 12,600 | $ | 12,118 | ||||||||||||
| Provision for loan losses | - | 150 | - | 150 | 294 | |||||||||||||||||
| Charge-offs | (230 | ) | (95 | ) | (162 | ) | (398 | ) | (629 | ) | ||||||||||||
| Recoveries | 87 | 94 | 170 | 268 | 901 | |||||||||||||||||
| Ending balance | $ | 12,620 | $ | 12,763 | $ | 12,684 | $ | 12,620 | $ | 12,684 | ||||||||||||
| LOANS | ||||||||||||||||||||||
| Construction and land development | $ | 47,060 | $ | 50,856 | $ | 43,386 | $ | 47,060 | $ | 43,386 | ||||||||||||
| Commercial real estate | 371,743 | 366,722 | 361,968 | 371,743 | 361,968 | |||||||||||||||||
| Residential real estate | 175,091 | 175,387 | 173,695 | 175,091 | 173,695 | |||||||||||||||||
| Home equity | 90,952 | 89,725 | 89,154 | 90,952 | 89,154 | |||||||||||||||||
| Commercial and industrial | 126,437 | 125,163 | 124,504 | 126,437 | 124,504 | |||||||||||||||||
| Consumer | 5,305 | 5,204 | 6,289 | 5,305 | 6,289 | |||||||||||||||||
| Total | $ | 816,588 | $ | 813,057 | $ | 798,996 | $ | 816,588 | $ | 798,996 | ||||||||||||
| NONPERFORMING ASSETS AT PERIOD-END | ||||||||||||||||||||||
| Nonperforming loans: | ||||||||||||||||||||||
| 90 days past due and accruing | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
| Nonaccrual | 4,494 | 5,224 | 4,647 | 4,494 | 4,647 | |||||||||||||||||
| Foreclosed real estate | 2,364 | 2,622 | 4,215 | 2,364 | 4,215 | |||||||||||||||||
| Nonperforming assets | $ | 6,858 | $ | 7,846 | $ | 8,862 | $ | 6,858 | $ | 8,862 | ||||||||||||
| ASSET QUALITY RATIOS | ||||||||||||||||||||||
| Allowance for loan losses to total loans | 1.55 | 1.57 | 1.59 | 1.55 | 1.59 | |||||||||||||||||
| Allowance for loan losses to | ||||||||||||||||||||||
| nonperforming loans | 280.82 | 244.31 | 272.95 | 280.82 | 272.95 | |||||||||||||||||
| Nonperforming assets to total assets | 0.52 | 0.60 | 0.67 | 0.52 | 0.67 | |||||||||||||||||
| Nonperforming loans to total loans | 0.55 | 0.64 | 0.58 | 0.55 | 0.58 | |||||||||||||||||
| Annualized net charge-offs (recoveries) | ||||||||||||||||||||||
| to average loans | 0.07 | % | 0.00 | % | 0.00 | % | 0.02 | % | (0.05 | )% | ||||||||||||
| OTHER DATA | ||||||||||||||||||||||
| Fiduciary assets at period-end (c) | $ | 441,753 | $ | 450,352 | $ | 430,853 | $ | 441,753 | $ | 430,853 | ||||||||||||
| Retail brokerage assets at period-end (c) | $ | 201,327 | $ | 197,625 | $ | 175,856 | $ | 201,327 | $ | 175,856 | ||||||||||||
| Number full-time equivalent employees (d) | 292 | 291 | 290 | 292 | 290 | |||||||||||||||||
| Number of full service offices | 24 | 25 | 25 | 24 | 25 | |||||||||||||||||
| Number of loan production offices | 2 | 2 | 2 | 2 | 2 | |||||||||||||||||
| Number of ATM's | 30 | 31 | 31 | 30 | 31 | |||||||||||||||||
| Notes: | |
| (a) - Excludes goodwill and other intangible assets | |
| (b) - Excludes amortization expense, net of tax, of intangible assets | |
| (c) - Market value | |
| (d) - Average for quarter | |
| (e) - The efficiency ratio is calculated by dividing noninterest expense excluding gains or losses on the sale of OREO by net interest income including tax equivalent income on nontaxable loans and securities and excluding (a) gains or losses on securities and (b) gains or losses on sale of premises and equipment. | |
| Net Interest Income Analysis | ||||||||||||||||||||
| For the Three Months Ended September 30, 2014 and 2013 | ||||||||||||||||||||
| (in thousands, except rates) | ||||||||||||||||||||
| Interest | ||||||||||||||||||||
| Average Balance | Income/Expense | Yield/Rate | ||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | $ | 126,340 | $ | 126,745 | $ | 1,339 | $ | 1,511 | 4.20 | % | 4.73 | % | ||||||||
| Real estate | 686,682 | 663,539 | 8,451 | 9,517 | 4.92 | 5.74 | ||||||||||||||
| Consumer | 4,540 | 5,671 | 85 | 104 | 7.43 | 7.28 | ||||||||||||||
| Total loans | 817,562 | 795,955 | 9,875 | 11,132 | 4.83 | 5.59 | ||||||||||||||
| Securities: | ||||||||||||||||||||
| Federal agencies & GSEs | 72,828 | 55,543 | 212 | 126 | 1.16 | 0.91 | ||||||||||||||
| Mortgage-backed & CMOs | 58,365 | 72,505 | 345 | 322 | 2.36 | 1.78 | ||||||||||||||
| State and municipal | 183,679 | 195,673 | 1,783 | 1,945 | 3.88 | 3.98 | ||||||||||||||
| Other | 14,583 | 15,861 | 114 | 116 | 3.36 | 2.93 | ||||||||||||||
| Total securities | 329,455 | 339,582 | 2,454 | 2,509 | 2.99 | 2.96 | ||||||||||||||
| Deposits in other banks | 45,744 | 54,307 | 32 | 38 | 0.28 | 0.28 | ||||||||||||||
| Total interest-earning assets | 1,192,761 | 1,189,844 | 12,361 | 13,679 | 4.14 | 4.59 | ||||||||||||||
| Non-earning assets | 116,359 | 117,503 | ||||||||||||||||||
| Total assets | $ | 1,309,120 | $ | 1,307,347 | ||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 189,208 | $ | 163,825 | 15 | 25 | 0.03 | 0.06 | ||||||||||||
| Money market | 167,777 | 184,428 | 51 | 83 | 0.12 | 0.18 | ||||||||||||||
| Savings | 88,456 | 84,390 | 10 | 17 | 0.04 | 0.08 | ||||||||||||||
| Time | 360,826 | 401,662 | 1,044 | 1,213 | 1.15 | 1.20 | ||||||||||||||
| Total deposits | 806,267 | 834,305 | 1,120 | 1,338 | 0.55 | 0.64 | ||||||||||||||
| Customer repurchase agreements | 45,725 | 46,712 | 2 | 3 | 0.02 | 0.03 | ||||||||||||||
| Other short-term borrowings | 2,215 | - | 2 | - | 0.36 | - | ||||||||||||||
| Long-term borrowings | 37,406 | 37,388 | 268 | 272 | 2.87 | 2.91 | ||||||||||||||
| Total interest-bearing liabilities | 891,613 | 918,405 | 1,392 | 1,613 | 0.62 | 0.70 | ||||||||||||||
| Noninterest bearing demand deposits | 238,646 | 218,819 | ||||||||||||||||||
| Other liabilities | 6,368 | 6,993 | ||||||||||||||||||
| Shareholders' equity | 172,493 | 163,130 | ||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,309,120 | $ | 1,307,347 | ||||||||||||||||
| Interest rate spread | 3.52 | % | 3.89 | % | ||||||||||||||||
| Net interest margin | 3.68 | % | 4.06 | % | ||||||||||||||||
| Net interest income (taxable equivalent basis) | 10,969 | 12,066 | ||||||||||||||||||
| Less: Taxable equivalent adjustment | 509 | 573 | ||||||||||||||||||
| Net interest income | $ | 10,460 | $ | 11,493 | ||||||||||||||||
| Net Interest Income Analysis | ||||||||||||||||||||
| For the Nine Months Ended September 30, 2014 and 2013 | ||||||||||||||||||||
| (in thousands, except rates) | ||||||||||||||||||||
| Interest | ||||||||||||||||||||
| Average Balance | Income/Expense | Yield/Rate | ||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Loans: | ||||||||||||||||||||
| Commercial | $ | 122,441 | $ | 127,592 | $ | 4,096 | $ | 4,706 | 4.49 | % | 4.95 | % | ||||||||
| Real estate | 673,745 | 660,698 | 25,072 | 28,927 | 4.96 | 5.84 | ||||||||||||||
| Consumer | 4,833 | 5,955 | 261 | 316 | 7.25 | 7.12 | ||||||||||||||
| Total loans | 801,019 | 794,245 | 29,429 | 33,949 | 4.90 | 5.70 | ||||||||||||||
| Securities: | ||||||||||||||||||||
| Federal agencies & GSEs | 73,506 | 51,668 | 617 | 368 | 1.12 | 0.95 | ||||||||||||||
| Mortgage-backed & CMOs | 62,420 | 76,286 | 1,116 | 1,040 | 2.38 | 1.82 | ||||||||||||||
| State and municipal | 189,311 | 192,113 | 5,548 | 5,804 | 3.91 | 4.03 | ||||||||||||||
| Other | 15,483 | 13,718 | 362 | 306 | 3.33 | 2.97 | ||||||||||||||
| Total securities | 340,720 | 333,785 | 7,643 | 7,518 | 3.00 | 3.00 | ||||||||||||||
| Deposits in other banks | 46,024 | 51,650 | 100 | 106 | 0.29 | 0.28 | ||||||||||||||
| Total interest-earning assets | 1,187,763 | 1,179,680 | 37,172 | 41,573 | 4.18 | 4.70 | ||||||||||||||
| Non-earning assets | 116,025 | 122,390 | ||||||||||||||||||
| Total assets | $ | 1,303,788 | $ | 1,302,070 | ||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Demand | $ | 181,040 | $ | 160,858 | 56 | 85 | 0.04 | 0.07 | ||||||||||||
| Money market | 177,279 | 175,486 | 176 | 254 | 0.13 | 0.19 | ||||||||||||||
| Savings | 88,286 | 83,859 | 35 | 54 | 0.05 | 0.09 | ||||||||||||||
| Time | 372,253 | 408,826 | 3,243 | 3,750 | 1.17 | 1.23 | ||||||||||||||
| Total deposits | 818,858 | 829,029 | 3,510 | 4,143 | 0.58 | 0.67 | ||||||||||||||
| Customer repurchase agreements | 41,443 | 48,016 | 5 | 38 | 0.02 | 0.11 | ||||||||||||||
| Other short-term borrowings | 937 | - | 3 | - | 0.43 | - | ||||||||||||||
| Long-term borrowings | 37,385 | 37,393 | 798 | 813 | 2.85 | 2.90 | ||||||||||||||
| Total interest-bearing liabilities | 898,623 | 914,438 | 4,316 | 4,994 | 0.64 | 0.73 | ||||||||||||||
| Noninterest bearing demand deposits | 227,786 | 216,594 | ||||||||||||||||||
| Other liabilities | 5,929 | 6,443 | ||||||||||||||||||
| Shareholders' equity | 171,450 | 164,595 | ||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,303,788 | $ | 1,302,070 | ||||||||||||||||
| Interest rate spread | 3.54 | % | 3.97 | % | ||||||||||||||||
| Net interest margin | 3.69 | % | 4.14 | % | ||||||||||||||||
| Net interest income (taxable equivalent basis) | 32,856 | 36,579 | ||||||||||||||||||
| Less: Taxable equivalent adjustment | 1,586 | 1,711 | ||||||||||||||||||
| Net interest income | $ | 31,270 | $ | 34,868 | ||||||||||||||||