The board of directors of
“The company’s earnings came under pressure, as expected, during the quarter with the reduction in PPP interest and fees and mortgage banking income as well as the continued impact of a low rate environment. While the 25 basis point increase by the
“We remain focused on growing non-cash earning assets including organic loan growth as well as wholesale purchases by pursuing opportunities within our markets and continuing to build new and existing customer relationships. Our core values of teamwork, integrity and respect for others, professionalism, accountability and commitment provide a foundation for the building of those relationships, allowing our employees to show that we care about our customers,” said Portmann. “We continue to navigate the economic environment with a disciplined approach and a strong risk culture. Our credit quality metrics remain strong depicting our ongoing commitment to sound underwriting and disciplined approach to client selection and underwriting. We are generating new client relationships and adding to our core funding position while maintaining a moderate risk profile.”
First Quarter 2022 Financial Highlights
- Net income was
$1.7 million , or$0.16 per diluted share, for the first quarter of 2022, compared to$2.1 million , or$0.20 per diluted share, for the fourth quarter of 2021, and$4.2 million , or$0.40 per diluted share, for the first quarter of 2021. - Return on average assets (“ROAA”) was 0.51% for the first quarter of 2022, compared to 0.63% in the fourth quarter of 2021 and 1.44% for the first quarter of 2021.
- Net interest margin (“NIM”) was 2.71% for the first quarter of 2022, compared to 2.79% for the linked quarter, and 3.35% for the first quarter of 2021.
- Net gain-on-sale of loans from mortgage banking activities was
$678,000 for the first quarter of 2022, compared to$1.5 million for the fourth quarter of 2021, and$3.5 million for the first quarter a year ago. - Gross loans excluding PPP loans increased 3% quarter-over-quarter on an annualized basis and totaled
$608.3 million atMarch 31, 2022 , compared to$604.7 million atDecember 31, 2021 , and decreased from$614.3 million atMarch 31, 2021 . - Core deposits (non-interest bearing and interest-bearing transaction and savings accounts) increased 2% from
$1.12 billion atDecember 31, 2021 and increased 11% from$1.03 billion atMarch 31, 2021 to$1.14 billion atMarch 31, 2022 . Core deposits represented 95% of total deposits, with non-interest-bearing deposits representing 41% of total deposits, atMarch 31, 2022 . - Asset quality continued to improve and remains strong. Non-impaired watch loans, or other loans especially mentioned, decreased
$2.8 million , or by 9%, to$30.0 million atMarch 31, 2022 , compared to$32.8 million atDecember 31, 2021 , and declined$49.6 million , or by 62%, from a year earlier. Delinquent loans to gross loans remained minimal at 0.01% forMarch 31, 2022 andDecember 31, 2021 , compared to 0.21% atMarch 31, 2021 . - The Company’s consolidated capital ratios exceed regulatory guidelines for a well-capitalized financial institution with leverage ratio at 8.9% and total risk-based capital ratio at 17.4% as of quarter end.
- Tangible book value per share of
$9.15 as ofMarch 31, 2022 declined during the quarter from$10.03 atDecember 31, 2021 due primarily to increase in the unrealized loss on available-for-sale securities, net of tax. - Available-for-sale securities were
$226.0 million atMarch 31, 2022 , compared to$232.9 million atDecember 31, 2021 . Unrealized losses on the available-for-sale were$10.5 million atMarch 31, 2022 compared to net unrealized gains of$1.7 million atDecember 31, 2021 , due to increases in market interest rates.
Income Statement Review
Net interest income was
Net interest margin (“NIM”) was 2.71% for the first quarter of 2022, compared to 2.79% for the fourth quarter of 2021, and 3.35% for the first quarter of 2021. The yield on average earnings assets declined from 3.49% during the first quarter of 2021 to 2.78% during first quarter of 2022 primarily due to the reduced loans yields mainly reflecting a lower level of PPP loan fee amortization, and a change in earning asset mix with an increase in lower yielding interest-earning deposits and federal funds sold. Average loan yields for the current quarter were relatively stable at 4.81% compared to the linked quarter of 4.82%, and down 6 basis points from 4.87% for the first quarter of 2021. Yields on investment securities increased during the quarter to 1.72% compared to 1.65% for the fourth quarter 2021, and declined from 2.45% for the first quarter 2021. Interest income from investment securities and federal funds sold increased
The Bank’s total cost of funds remained low, decreasing one basis point during the quarter to 0.08% compared to the linked quarter at 0.09% and decreasing seven basis points from 0.15% a year earlier. “While our NIM has been adversely impacted by the decrease in earning asset yield, it has benefited from a low costs of funds, which is a function of a low interest rate environment combined with continued discipline in lowering our offered deposit rates during the past several years,” said
Noninterest income was
Noninterest expenses were
Federal and
Balance Sheet Review
Total Assets remained relatively flat at
Gross loans balances excluding PPP loans increased 3% quarter-over-quarter on an annualized basis and totaled
Gross loan balances including PPP loans were
Credit Quality continues the improvement seen throughout 2021 with nonperforming assets at
The Allowance for Loan Losses (“ALL”) was
Total Deposits increased 1% to
Noninterest-bearing deposits increased 1%, or
Shareholder’s Equity was
Balance Sheet Overview | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | ||||||||||||||||||||
Assets: | (Dollars in thousands, except per share data) | ||||||||||||||||||||||
Cash on hand and in banks | $ | 19,007 | $ | 18,528 | $ | 479 | 3 | % | $ | 15,175 | $ | 3,832 | 25 | % | |||||||||
Interest bearing deposits | 312,194 | 320,207 | (8,013 | ) | -3 | % | 280,129 | 32,065 | 11 | % | |||||||||||||
Federal funds sold | 81,339 | 50,881 | 30,458 | 60 | % | 23,316 | 58,023 | 249 | % | ||||||||||||||
Investment securities | 236,542 | 233,859 | 2,683 | 1 | % | 137,454 | 99,088 | 72 | % | ||||||||||||||
Loans held-for-sale | 3,703 | 6,104 | (2,401 | ) | -39 | % | 19,439 | (15,736 | ) | -81 | % | ||||||||||||
Loans, net of deferred fees | 615,891 | 628,333 | (12,442 | ) | -2 | % | 719,182 | (103,291 | ) | -14 | % | ||||||||||||
Allowance for loan losses | (8,276 | ) | (8,297 | ) | 21 | 0 | % | (10,721 | ) | 2,445 | -23 | % | |||||||||||
Net loans | 607,615 | 620,036 | (12,421 | ) | -2 | % | 708,461 | (100,846 | ) | -14 | % | ||||||||||||
2,598 | 2,416 | 182 | 8 | % | 2,421 | 177 | 7 | % | |||||||||||||||
Other assets | 62,471 | 67,935 | (5,464 | ) | -8 | % | 58,679 | 3,792 | 6 | % | |||||||||||||
Total assets | $ | 1,325,469 | $ | 1,319,966 | $ | 5,503 | 0 | % | $ | 1,245,074 | $ | 80,395 | 6 | % | |||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||||
Total deposits | $ | 1,196,106 | $ | 1,178,940 | $ | 17,166 | 1 | % | $ | 1,099,287 | $ | 96,819 | 9 | % | |||||||||
Borrowings | 13,769 | 13,806 | (37 | ) | 0 | % | 13,919 | (150 | ) | -1 | % | ||||||||||||
Accrued interest payable and other liabilities | 7,108 | 9,578 | (2,470 | ) | -26 | % | 16,772 | (9,664 | ) | -58 | % | ||||||||||||
Shareholders' equity | 108,486 | 117,642 | (9,156 | ) | -8 | % | 115,096 | (6,610 | ) | -6 | % | ||||||||||||
Total liabilities and shareholders' equity | $ | 1,325,469 | $ | 1,319,966 | $ | 5,503 | 0 | % | $ | 1,245,074 | $ | 80,395 | 6 | % | |||||||||
Common Shares Outstanding | 10,392,738 | 10,388,267 | 4,471 | 0 | % | 10,437,378 | (44,640 | ) | 0 | % | |||||||||||||
Book value per common share (1) | $ | 10.44 | $ | 11.32 | $ | (0.88 | ) | -8 | % | $ | 11.03 | $ | (0.59 | ) | -5 | % | |||||||
Tangible book value per common share (2) | $ | 9.15 | $ | 10.03 | $ | (0.88 | ) | -9 | % | $ | 9.74 | $ | (0.59 | ) | -6 | % | |||||||
Gross loans to deposits ratio | 51.5 | % | 53.3 | % | -1.8 | % | 65.4 | % | -13.9 | % | |||||||||||||
(1) Book value per common share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding. | |||||||||||||||||||||||
(2) Tangible book value per common share is calculated as the total common shareholders' equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. | |||||||||||||||||||||||
Income Statement Overview | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | ||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Interest and dividend income | $ | 8,526 | $ | 9,040 | $ | (514 | ) | -6 | % | $ | 9,612 | $ | (1,086 | ) | -11 | % | |||||||
Interest expense | 239 | 259 | (20 | ) | -8 | % | 387 | (148 | ) | -38 | % | ||||||||||||
Net interest income | 8,287 | 8,781 | (494 | ) | -6 | % | 9,225 | (938 | ) | -10 | % | ||||||||||||
Loan loss provision | - | (150 | ) | 150 | -100 | % | (1,400 | ) | 1,400 | -100 | % | ||||||||||||
Noninterest income | 2,112 | 2,998 | (886 | ) | -30 | % | 5,164 | (3,052 | ) | -59 | % | ||||||||||||
Noninterest expense | 8,577 | 9,325 | (748 | ) | -8 | % | 10,504 | (1,927 | ) | -18 | % | ||||||||||||
Income before income taxes | 1,822 | 2,604 | (782 | ) | -30 | % | 5,285 | (3,463 | ) | -66 | % | ||||||||||||
Income tax expense | 166 | 483 | (317 | ) | -66 | % | 1,057 | (891 | ) | -84 | % | ||||||||||||
Net Income | $ | 1,656 | $ | 2,121 | $ | (465 | ) | -22 | % | $ | 4,228 | $ | (2,572 | ) | -61 | % | |||||||
Average common shares outstanding - basic | 10,390,498 | 10,385,414 | 5,084 | 0 | % | 10,432,040 | (41,542 | ) | 0 | % | |||||||||||||
Average common shares outstanding - diluted | 10,415,689 | 10,412,013 | 3,676 | 0 | % | 10,458,794 | (43,105 | ) | 0 | % | |||||||||||||
Income per common share | |||||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.20 | $ | (0.04 | ) | -20 | % | $ | 0.41 | $ | (0.25 | ) | -61 | % | |||||||
Diluted | $ | 0.16 | $ | 0.20 | $ | (0.04 | ) | -20 | % | $ | 0.40 | $ | (0.24 | ) | -60 | % | |||||||
Effective tax rate | 9.1 | % | 18.5 | % | -9.4 | % | 20.0 | % | -10.9 | % | |||||||||||||
Noninterest Income | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||
$ Change | % Change | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Service charges on deposits | $ | 382 | $ | 387 | $ | (5 | ) | -1 | % | $ | 342 | $ | 40 | 12 | % | ||||
Gain on sale of loans, net | 678 | 1,469 | (791 | ) | -54 | % | 3,535 | (2,857 | ) | -81 | % | ||||||||
Earnings on bank owned life insurance | 184 | 129 | 55 | 43 | % | 126 | 58 | 46 | % | ||||||||||
Other noninterest income | |||||||||||||||||||
Fee income | 867 | 1,007 | (140 | ) | -14 | % | 1,133 | (266 | ) | -23 | % | ||||||||
Other | 1 | 6 | (5 | ) | -83 | % | 28 | (27 | ) | -96 | % | ||||||||
Total noninterest income | $ | 2,112 | $ | 2,998 | $ | (886 | ) | -30 | % | $ | 5,164 | $ | (3,052 | ) | -59 | % | |||
Noninterest Expense | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||
$ Change | % Change | $ Change | % Change | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Salaries and employee benefits | $ | 5,516 | $ | 6,057 | $ | (541 | ) | -9 | % | $ | 7,333 | $ | (1,817 | ) | -25 | % | |||
Occupancy | 521 | 483 | 38 | 8 | % | 511 | 10 | 2 | % | ||||||||||
Equipment | 286 | 295 | (9 | ) | -3 | % | 319 | (33 | ) | -10 | % | ||||||||
Data processing | 855 | 813 | 42 | 5 | % | 829 | 26 | 3 | % | ||||||||||
Professional services | 202 | 171 | 31 | 18 | % | 234 | (32 | ) | -14 | % | |||||||||
State and local taxes | 158 | 197 | (39 | ) | -20 | % | 202 | (44 | ) | -22 | % | ||||||||
100 | 174 | (74 | ) | -43 | % | 81 | 19 | 23 | % | ||||||||||
Other noninterest expense: | |||||||||||||||||||
Director fees | 74 | 69 | 5 | 7 | % | 77 | (3 | ) | -4 | % | |||||||||
Communication | 67 | 75 | (8 | ) | -11 | % | 71 | (4 | ) | -6 | % | ||||||||
Advertising | 25 | 22 | 3 | 14 | % | 29 | (4 | ) | -14 | % | |||||||||
Professional liability insurance | 60 | 59 | 1 | 2 | % | 59 | 1 | 2 | % | ||||||||||
Amortization | 47 | 41 | 6 | 15 | % | 105 | (58 | ) | -55 | % | |||||||||
Other | 666 | 869 | (203 | ) | -23 | % | 654 | 12 | 2 | % | |||||||||
Total noninterest expense | $ | 8,577 | $ | 9,325 | $ | (748 | ) | -8 | % | $ | 10,504 | $ | (1,927 | ) | -18 | % | |||
Financial Performance Overview | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
Change | Change | |||||||||||||||
Performance Ratios | ||||||||||||||||
Return on average assets, annualized | 0.51 | % | 0.63 | % | (0.12 | ) | 1.44 | % | (0.93 | ) | ||||||
Return on average equity, annualized | 5.81 | % | 7.16 | % | (1.35 | ) | 14.90 | % | (9.09 | ) | ||||||
Efficiency ratio (1) | 82.48 | % | 79.17 | % | 3.31 | 73.00 | % | 9.48 | ||||||||
(1) Non-interest expense divided by net interest income plus noninterest income. | ||||||||||||||||
LIQUIDITY
Cash and | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
2022 | % of Total | 2021 | % of Total | $ Change | % Change | 2021 | Total | $ Change | % Change | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||
Cash on hand and in banks | $ | 19,007 | 3 | % | $ | 18,528 | 3 | % | $ | 479 | 3 | % | $ | 15,175 | 3 | % | $ | 3,832 | 25 | % | ||||||||||
Interest bearing deposits | 308,944 | 48 | % | 316,957 | 51 | % | (8,013 | ) | -3 | % | 276,879 | 62 | % | 32,065 | 12 | % | ||||||||||||||
Other interest earning deposits | 3,250 | 1 | % | 3,250 | 1 | % | - | 0 | % | 3,250 | 1 | % | - | 0 | % | |||||||||||||||
Federal funds sold | 81,339 | 13 | % | 50,881 | 8 | % | 30,458 | 60 | % | 23,316 | 5 | % | 58,023 | 249 | % | |||||||||||||||
Total | 412,540 | 65 | % | 389,616 | 63 | % | 22,924 | 6 | % | 318,620 | 71 | % | 93,920 | 29 | % | |||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||
Collateralized mortgage obligations | 73,142 | 11 | % | 79,614 | 13 | % | (6,472 | ) | -8 | % | 47,870 | 10 | % | 25,272 | 53 | % | ||||||||||||||
Mortgage backed securities | 24,741 | 4 | % | 20,612 | 3 | % | 4,129 | 20 | % | 13,441 | 3 | % | 11,300 | 84 | % | |||||||||||||||
70,003 | 10 | % | 59,164 | 9 | % | 10,839 | 18 | % | 15,263 | 3 | % | 54,740 | 359 | % | ||||||||||||||||
Municipal securities | 66,544 | 10 | % | 72,335 | 12 | % | (5,791 | ) | -8 | % | 58,761 | 13 | % | 7,783 | 13 | % | ||||||||||||||
Corporate debt securities | 2,004 | 0 | % | 2,010 | 0 | % | (6 | ) | 0 | % | 2,018 | 0 | % | (14 | ) | -1 | % | |||||||||||||
Equity securities | 108 | 0 | % | 124 | 0 | % | (16 | ) | -13 | % | 101 | 0 | % | 7 | 7 | % | ||||||||||||||
Total | 236,542 | 35 | % | 233,859 | 37 | % | 2,683 | 1 | % | 137,454 | 29 | % | 99,088 | 72 | % | |||||||||||||||
Total cash equivalents and investment securities | $ | 649,082 | 100 | % | $ | 623,475 | 100 | % | $ | 25,607 | 4 | % | $ | 456,074 | 100 | % | $ | 193,008 | 42 | % | ||||||||||
Total cash equivalents and investment securities as a percent of total assets | 49 | % | 45 | % | 37 | % | ||||||||||||||||||||||||
LOANS
Loans by Category | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
2022 | % of Gross Loans | 2021 | % of Gross Loans | $ Change | % Change | 2021 | % of Gross Loans | $ Change | % Change | ||||||||||||||||||||||||
Commercial: | (Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial and agricultural | $ | 83,324 | 14 | % | $ | 85,309 | 14 | % | $ | (1,985 | ) | -2 | % | $ | 83,675 | 12 | % | $ | (351 | ) | 0 | % | |||||||||||
PPP | 8,290 | 1 | % | 25,081 | 4 | % | (16,791 | ) | -67 | % | 108,377 | 15 | % | (100,087 | ) | -92 | % | ||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||
Construction and development | 31,169 | 5 | % | 28,318 | 3 | % | 2,851 | 10 | % | 20,936 | 3 | % | 10,233 | 49 | % | ||||||||||||||||||
Residential 1-4 family | 66,338 | 11 | % | 67,393 | 11 | % | (1,055 | ) | -2 | % | 71,567 | 10 | % | (5,229 | ) | -7 | % | ||||||||||||||||
Multi-family | 43,226 | 7 | % | 39,854 | 6 | % | 3,372 | 8 | % | 33,950 | 5 | % | 9,276 | 27 | % | ||||||||||||||||||
Commercial real estate -- owner occupied | 152,301 | 25 | % | 154,901 | 25 | % | (2,600 | ) | -2 | % | 154,850 | 21 | % | (2,549 | ) | -2 | % | ||||||||||||||||
Commercial real estate -- non owner occupied | 151,637 | 25 | % | 148,730 | 24 | % | 2,907 | 2 | % | 166,072 | 22 | % | (14,435 | ) | -9 | % | |||||||||||||||||
Farmland | 22,734 | 3 | % | 23,905 | 4 | % | (1,171 | ) | -5 | % | 27,418 | 4 | % | (4,684 | ) | -17 | % | ||||||||||||||||
Consumer | 57,590 | 9 | % | 56,269 | 9 | % | 1,321 | 2 | % | 55,868 | 8 | % | 1,722 | 3 | % | ||||||||||||||||||
Gross Loans | 616,609 | 100 | % | 629,760 | 100 | % | (13,151 | ) | -2 | % | 722,713 | 100 | % | (106,104 | ) | -15 | % | ||||||||||||||||
Less: allowance for loan losses | (8,276 | ) | (8,297 | ) | 21 | (10,721 | ) | 2,445 | |||||||||||||||||||||||||
Less: deferred fees | (718 | ) | (1,427 | ) | 709 | (3,531 | ) | 2,813 | |||||||||||||||||||||||||
Net loans | $ | 607,615 | $ | 620,036 | $ | (12,421 | ) | $ | 708,461 | $ | (100,846 | ) | |||||||||||||||||||||
Loan Concentration | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
2022 | % of Risk Based Capital | 2021 | % of Risk Based Capital | Change | 2021 | % of Risk Based Capital | Change | ||||||||||||||||||||||||||
Commercial: | (Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial and agricultural | $ | 83,324 | 67 | % | $ | 85,309 | 69 | % | -2 | % | $ | 83,675 | 69 | % | -2 | % | |||||||||||||||||
PPP | 8,290 | 7 | % | 25,081 | 20 | % | -13 | % | 108,377 | 90 | % | -83 | % | ||||||||||||||||||||
Real estate: | |||||||||||||||||||||||||||||||||
Construction and development | 31,169 | 25 | % | 28,318 | 23 | % | 2 | % | 20,936 | 17 | % | 8 | % | ||||||||||||||||||||
Residential 1-4 family | 66,338 | 53 | % | 67,393 | 54 | % | -1 | % | 71,567 | 59 | % | -6 | % | ||||||||||||||||||||
Multi-family | 43,226 | 35 | % | 39,854 | 32 | % | 3 | % | 33,950 | 28 | % | 7 | % | ||||||||||||||||||||
Commercial real estate -- owner occupied | 152,301 | 122 | % | 154,901 | 125 | % | -3 | % | 154,850 | 128 | % | -6 | % | ||||||||||||||||||||
Commercial real estate -- non owner occupied | 151,637 | 122 | % | 148,730 | 120 | % | 2 | % | 166,072 | 137 | % | -15 | % | ||||||||||||||||||||
Farmland | 22,734 | 18 | % | 23,905 | 19 | % | -1 | % | 27,418 | 23 | % | -5 | % | ||||||||||||||||||||
Consumer | 57,590 | 46 | % | 56,269 | 45 | % | 1 | % | 55,868 | 46 | % | 0 | % | ||||||||||||||||||||
Gross Loans | $ | 616,609 | $ | 629,760 | $ | 722,713 | |||||||||||||||||||||||||||
Regulatory | $ | 223,799 | 180 | % | $ | 214,910 | 173 | % | 7 | % | $ | 216,687 | 179 | % | 1 | % | |||||||||||||||||
Total Risk Based Capital* | $ | 124,636 | $ | 124,235 | $ | 120,934 | |||||||||||||||||||||||||||
* | |||||||||||||||||||||||||||||||||
DEPOSITS
Deposits by Category | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
2022 | % of Total | 2021 | % of Total | $ Change | % Change | 2021 | % of Total | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Interest-bearing demand | $ | 255,120 | 21 | % | $ | 242,789 | 21 | % | $ | 12,331 | 5 | % | $ | 305,137 | 28 | % | $ | (50,017 | ) | -16 | % | |||||||
Money market | 214,840 | 18 | % | 210,343 | 17 | % | 4,497 | 2 | % | 186,887 | 17 | % | 27,953 | 15 | % | |||||||||||||
Savings | 176,753 | 15 | % | 174,929 | 15 | % | 1,824 | 1 | % | 149,325 | 14 | % | 27,428 | 18 | % | |||||||||||||
Time deposits (CDs) | 53,885 | 5 | % | 58,724 | 5 | % | (4,839 | ) | -8 | % | 67,861 | 6 | % | (13,976 | ) | -21 | % | |||||||||||
Total interest-bearing deposits | 700,598 | 59 | % | 686,785 | 58 | % | 13,813 | 2 | % | 709,210 | 65 | % | (8,612 | ) | -1 | % | ||||||||||||
Non-interest bearing demand | 495,508 | 41 | % | 492,155 | 42 | % | 3,353 | 1 | % | 390,077 | 35 | % | 105,431 | 27 | % | |||||||||||||
Total deposits | $ | 1,196,106 | 100 | % | $ | 1,178,940 | 100 | % | $ | 17,166 | 1 | % | $ | 1,099,287 | 100 | % | $ | 96,819 | 9 | % | ||||||||
The following table summarizes the capital measures of the Company and the Bank respectively, at the dates listed below.
Capital Measures | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
2022 | 2021 | Change | 2021 | Change | Well Capitalized Under Prompt Correction Action Regulations | ||||||||||||||
Total risk-based capital ratio | 17.4 | % | 17.6 | % | (0.2 | ) | 16.8 | % | 0.6 | N/A | |||||||||
Tier 1 risk-based capital ratio | 16.3 | % | 16.4 | % | (0.1 | ) | 15.5 | % | 0.8 | N/A | |||||||||
Common equity tier 1 ratio | 14.4 | % | 14.6 | % | (0.2 | ) | 13.7 | % | 0.7 | N/A | |||||||||
Leverage ratio | 8.9 | % | 8.8 | % | 0.1 | 9.5 | % | (0.6 | ) | N/A | |||||||||
Tangible common equity ratio | 7.2 | % | 8.0 | % | (0.8 | ) | 8.3 | % | (1.1 | ) | N/A | ||||||||
Total risk-based capital ratio | 17.4 | % | 17.6 | % | (0.2 | ) | 16.7 | % | 0.7 | 10.5% | |||||||||
Tier 1 risk-based capital ratio | 16.2 | % | 16.4 | % | (0.2 | ) | 15.4 | % | 0.8 | 8.5% | |||||||||
Common equity tier 1 ratio | 16.2 | % | 16.4 | % | (0.2 | ) | 15.4 | % | 0.8 | 7.0% | |||||||||
Leverage ratio | 8.8 | % | 8.8 | % | - | 9.5 | % | (0.7 | ) | 7.5% | |||||||||
The following tables set forth information regarding average balances of interest-earning assets and interest-bearing liabilities and the resultant yields or cost, and the net interest margin on a tax equivalent basis. Loans held for sale and non-accrual loans are included in total loans.
Net Interest Margin | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Annualized, tax-equivalent basis) | ||||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | 2021 | $ Change | % Change | ||||||||||||||||
Average Balances | (Dollars in thousands) | |||||||||||||||||||||
Gross loans | $ | 621,412 | $ | 653,908 | $ | (32,496 | ) | -5 | % | $ | 724,259 | $ | (102,847 | ) | -14 | % | ||||||
Gross loans without PPP | $ | 603,998 | $ | 617,857 | $ | (13,859 | ) | -2 | % | $ | 620,808 | $ | (16,810 | ) | -3 | % | ||||||
Loans held for sale | $ | 3,670 | $ | 12,142 | $ | (8,472 | ) | -70 | % | $ | 27,203 | $ | (23,533 | ) | -87 | % | ||||||
Investment securities | $ | 242,084 | $ | 232,083 | $ | 10,001 | 4 | % | $ | 129,178 | $ | 112,906 | 87 | % | ||||||||
Federal funds sold & interest bearing deposits in banks | $ | 388,902 | $ | 363,643 | $ | 25,259 | 7 | % | $ | 248,252 | $ | 140,650 | 57 | % | ||||||||
Total interest-earning assets | $ | 1,256,068 | $ | 1,261,776 | $ | (5,708 | ) | 0 | % | $ | 1,128,892 | $ | 127,176 | 11 | % | |||||||
Non-interest bearing demand deposits | $ | 496,833 | $ | 501,686 | $ | (4,853 | ) | -1 | % | $ | 360,175 | $ | 136,658 | 38 | % | |||||||
Interest bearing deposits | $ | 693,350 | $ | 685,789 | $ | 7,561 | 1 | % | $ | 689,302 | $ | 4,048 | 1 | % | ||||||||
Total Deposits | $ | 1,190,183 | $ | 1,187,475 | $ | 2,708 | 0 | % | $ | 1,049,477 | $ | 140,706 | 13 | % | ||||||||
Borrowings | $ | 13,782 | $ | 13,819 | $ | (37 | ) | 0 | % | $ | 13,931 | $ | (149 | ) | -1 | % | ||||||
Total interest-bearing liabilities | $ | 707,132 | $ | 699,608 | $ | 7,524 | 1 | % | $ | 703,233 | $ | 3,899 | 1 | % | ||||||||
Total Equity | $ | 115,664 | $ | 117,600 | $ | (1,936 | ) | -2 | % | $ | 115,095 | $ | 569 | 0 | % | |||||||
For the Three Months Ended, | ||||||||||||||||||||||
2022 | 2021 | Change | 2021 | Change | ||||||||||||||||||
Yield on average gross loans (1) | 4.81 | % | 4.82 | % | (0.01 | ) | 4.87 | % | (0.06 | ) | ||||||||||||
Yield on average gross loans without PPP (1) | 4.45 | % | 4.45 | % | - | 4.63 | % | (0.18 | ) | |||||||||||||
Yield on average investment securities (1) | 1.72 | % | 1.65 | % | 0.07 | 2.45 | % | (0.73 | ) | |||||||||||||
Yield on Fed funds sold & interest bearing deposits in banks | 0.20 | % | 0.16 | % | 0.04 | 0.12 | % | 0.08 | ||||||||||||||
Cost of average interest bearing deposits | 0.10 | % | 0.12 | % | (0.02 | ) | 0.19 | % | (0.09 | ) | ||||||||||||
Cost of average borrowings | 1.85 | % | 1.69 | % | 0.16 | 1.83 | % | 0.02 | ||||||||||||||
Cost of average total deposits and borrowings | 0.08 | % | 0.09 | % | (0.01 | ) | 0.15 | % | (0.07 | ) | ||||||||||||
Yield on average interest-earning assets | 2.78 | % | 2.87 | % | (0.09 | ) | 3.49 | % | (0.71 | ) | ||||||||||||
Cost of average interest-bearing liabilities | 0.14 | % | 0.15 | % | (0.01 | ) | 0.22 | % | (0.08 | ) | ||||||||||||
Net interest spread | 2.64 | % | 2.72 | % | (0.08 | ) | 3.27 | % | (0.63 | ) | ||||||||||||
Net interest spread without PPP | 2.44 | % | 2.48 | % | (0.04 | ) | 2.98 | % | (0.54 | ) | ||||||||||||
Net interest margin (1) | 2.71 | % | 2.79 | % | (0.08 | ) | 3.35 | % | (0.64 | ) | ||||||||||||
Net interest margin without PPP (1) | 2.50 | % | 2.55 | % | (0.05 | ) | 3.05 | % | (0.55 | ) | ||||||||||||
(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. | ||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
$ Change | % Change | $ Change | % Change | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Rated substandard or worse, but not impaired, beginning of three month period | $ | 8,980 | $ | 8,785 | $ | 195 | 2 | % | $ | 14,200 | $ | (5,220 | ) | -37 | % | ||||||
Addition of previously classified pass graded loans | 174 | 363 | (189 | ) | -52 | % | 304 | (130 | ) | -43 | % | ||||||||||
Upgrades to pass or other loans especially mentioned status | (789 | ) | - | (789 | ) | -100 | % | - | (789 | ) | -100 | % | |||||||||
Moved to nonaccrual | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Principal payments, net | (243 | ) | (168 | ) | (75 | ) | 45 | % | (1,806 | ) | 1,563 | -87 | % | ||||||||
Rated substandard or worse, but not impaired, end of three month period | $ | 8,122 | $ | 8,980 | $ | (858 | ) | -10 | % | $ | 12,698 | $ | (4,576 | ) | -36 | % | |||||
Impaired | 2,821 | 2,854 | (33 | ) | -1 | % | 3,748 | (927 | ) | -25 | % | ||||||||||
Total adversely classified loans¹ | $ | 10,943 | $ | 11,834 | $ | (891 | ) | -8 | % | $ | 16,446 | $ | (5,503 | ) | -33 | % | |||||
Other loans especially mentioned or watch, but not impaired | $ | 30,018 | $ | 32,848 | $ | (2,830 | ) | -9 | % | $ | 79,603 | $ | (49,585 | ) | -62 | % | |||||
Gross loans (excluding deferred loan fees) | $ | 616,609 | $ | 629,760 | $ | (13,151 | ) | -2 | % | $ | 722,713 | $ | (106,104 | ) | -15 | % | |||||
Adversely classified loans to gross loans | 1.77 | % | 1.88 | % | 2.28 | % | |||||||||||||||
Adversely classified loans to gross loans without PPP | 1.80 | % | 1.96 | % | 2.68 | % | |||||||||||||||
Allowance for loan losses | $ | 8,276 | $ | 8,297 | $ | (21 | ) | 0 | % | $ | 10,721 | $ | (2,445 | ) | -23 | % | |||||
Allowance for loan losses as a percentage of adversely classified loans | 75.63 | % | 70.11 | % | 65.19 | % | |||||||||||||||
Allowance for loan losses to total impaired loans | 293.37 | % | 290.71 | % | 286.05 | % | |||||||||||||||
Adversely classified loans to total assets | 0.83 | % | 0.90 | % | 1.32 | % | |||||||||||||||
Delinquent loans to gross loans, not in nonaccrual status 2 | 0.01 | % | 0.01 | % | 0.21 | % | |||||||||||||||
Delinquent loans to gross loans without PPP, not in nonaccrual status | 0.01 | % | 0.01 | % | 0.24 | % | |||||||||||||||
1 Adversely classified loans are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. Note that any loans internally rated worse than substandard are included in the impaired loan totals. | |||||||||||||||||||||
2 Delinquent loans are defined as loans past due 30-90 days and still accruing |
Nonperforming Assets | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Total nonaccrual loans, beginning of three month period | $ | 1,221 | $ | 1,800 | $ | (579 | ) | -32 | % | $ | 2,392 | $ | (1,171 | ) | -49 | % | ||||||
Transfer to performing loans | - | (113 | ) | 113 | -100 | % | - | - | 0 | % | ||||||||||||
Addition of nonaccrual loans | - | - | - | 0 | % | 202 | (202 | ) | -100 | % | ||||||||||||
Moved to other assets owned | - | - | - | 0 | % | (265 | ) | 265 | -100 | % | ||||||||||||
Principal payments, net | (23 | ) | (466 | ) | 443 | -95 | % | (126 | ) | 103 | -82 | % | ||||||||||
Charge-offs, net | - | - | - | 0 | % | - | - | 0 | % | |||||||||||||
Total nonaccrual loans, end of three month period | $ | 1,198 | $ | 1,221 | $ | (23 | ) | -2 | % | $ | 2,203 | $ | (1,005 | ) | -46 | % | ||||||
Other real estate owned and foreclosed assets | 122 | 200 | (78 | ) | -39 | % | 265 | (143 | ) | -54 | % | |||||||||||
Total nonperforming assets | $ | 1,320 | $ | 1,421 | $ | (101 | ) | -7 | % | $ | 2,468 | $ | (1,148 | ) | -47 | % | ||||||
Total restructured performing loans, beginning of period | $ | 1,633 | $ | 1,531 | $ | 102 | 7 | % | $ | 168 | $ | 1,465 | 872 | % | ||||||||
Transfer to nonaccrual loans | - | - | - | 0 | % | - | - | 0 | % | |||||||||||||
Addition of restructured performing loans | - | 109 | (109 | ) | -100 | % | 1,382 | (1,382 | ) | -100 | % | |||||||||||
Principal payments, net | (10 | ) | (7 | ) | (3 | ) | 43 | % | (5 | ) | (5 | ) | 100 | % | ||||||||
Charge-offs, net | - | - | - | 0 | % | - | - | 0 | % | |||||||||||||
Total restructured performing loans, end of period | $ | 1,623 | $ | 1,633 | $ | (10 | ) | -1 | % | $ | 1,545 | $ | 78 | 5 | % | |||||||
Accruing loans past due 90 days or more | $ | - | $ | - | $ | - | 0 | % | $ | - | $ | - | #DIV/0! | |||||||||
Percentage of nonperforming assets to total assets | 0.10 | % | 0.11 | % | 0.20 | % | ||||||||||||||||
Nonperforming loans to total loans | 0.19 | % | 0.19 | % | 0.30 | % | ||||||||||||||||
Nonperforming loans to total loans without PPP | 0.20 | % | 0.20 | % | 0.36 | % | ||||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||||
$ Change | % Change | $ Change | % Change | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Gross loans outstanding at end of period | $ | 616,609 | $ | 629,760 | $ | (13,151 | ) | -2 | % | $ | 722,713 | $ | (106,104 | ) | -15 | % | ||||||
Average loans outstanding, gross | $ | 621,412 | $ | 653,908 | $ | (32,496 | ) | -5 | % | $ | 724,259 | $ | (102,847 | ) | -14 | % | ||||||
Allowance for loan losses, beginning of period | $ | 8,297 | $ | 8,527 | $ | (230 | ) | -3 | % | $ | 12,068 | $ | (3,771 | ) | -31 | % | ||||||
Commercial | - | - | - | 0 | % | - | - | 0 | % | |||||||||||||
- | - | - | 0 | % | - | - | 0 | % | ||||||||||||||
- | - | - | 0 | % | - | - | 0 | % | ||||||||||||||
Consumer | (25 | ) | (81 | ) | 56 | -69 | % | (46 | ) | 21 | -46 | % | ||||||||||
Total charge-offs | (25 | ) | (81 | ) | 56 | -69 | % | (46 | ) | 21 | -46 | % | ||||||||||
Commercial | - | - | - | 0 | % | 38 | (38 | ) | -100 | % | ||||||||||||
- | - | - | 0 | % | - | - | 0 | % | ||||||||||||||
- | - | - | 0 | % | 49 | (49 | ) | -100 | % | |||||||||||||
Consumer | 4 | 1 | 3 | 300 | % | 12 | (8 | ) | -67 | % | ||||||||||||
Total recoveries | 4 | 1 | 3 | 300 | % | 99 | (95 | ) | -96 | % | ||||||||||||
Net recoveries/(charge-offs) | (21 | ) | (80 | ) | 59 | -74 | % | 53 | (74 | ) | -140 | % | ||||||||||
Provision (benefit) to income | - | (150 | ) | 150 | -100 | % | (1,400 | ) | 1,400 | -100 | % | |||||||||||
Allowance for loan losses, end of period | $ | 8,276 | $ | 8,297 | $ | (21 | ) | 0 | % | $ | 10,721 | $ | (2,445 | ) | -23 | % | ||||||
Ratio of net loans charged-off to average gross loans outstanding, annualized | 0.01 | % | 0.05 | % | -0.04 | % | -0.03 | % | 0.04 | % | ||||||||||||
Ratio of net loans charged-off to average gross loans outstanding without PPP, annualized | 0.01 | % | 0.05 | % | -0.04 | % | -0.03 | % | 0.04 | % | ||||||||||||
Ratio of allowance for loan losses to gross loans outstanding | 1.34 | % | 1.32 | % | 0.02 | % | 1.48 | % | -0.14 | % | ||||||||||||
Ratio of allowance for loan losses to gross loans without PPP outstanding | 1.36 | % | 1.37 | % | -0.01 | % | 1.75 | % | -0.39 | % | ||||||||||||
ABOUT
Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of
Contacts:
Denise Portmann, President & CEO
Carla Tucker, EVP & CFO
360.533.8873
Source:
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