THIRD QUARTER HIGHLIGHTS
Key highlights of the third quarter ended
- Net interest margin stabilized at 3.35%
- Noninterest-bearing demand deposits comprised 33% of total deposits
- Deposits were stable at
$1.2 billion - Loans increased
$22.3 million , or 10% annualized - Efficiency ratio of 70.67%
- Return on average equity of 10.96%
- Return on average assets of 0.91%
- Nonperforming assets increased to 0.23% of total assets
- Tangible book value per common share totaled
$17.38 , up$2.07 from one year ago
“We are pleased with the Company’s performance during the third quarter considering we operated in a challenging interest rate environment,” said
NET INTEREST INCOME
Net interest income decreased by
The
The
The net interest margin stabilized at 3.35% as the cost of funds increased 14-basis points, which was almost entirely offset by a 12-basis point increase in the yield on earning assets. Although the interest rate environment continued to be challenging during the period, the net interest margin stabilized as the rising cost of deposits slowed to a pace that was aligned with rising earning asset yields.
Net accretion of discounts on loans acquired through business combinations was included in interest income and fees on loans and totaled
NONINTEREST INCOME
Noninterest income totaled
NONINTEREST EXPENSE
Noninterest expense increased
ASSET QUALITY
Overview
Nonperforming assets (“NPAs”) as a percentage of total assets increased to 0.23% on
Nonperforming Assets
NPAs increased to
Nonaccrual loans | $ | 3,116 | $ | 677 | $ | 566 | ||||||
Other real estate owned, net | - | 45 | 1,578 | |||||||||
Total nonperforming assets | $ | 3,116 | $ | 722 | $ | 2,144 |
Past Due Loans
Loan past due greater than 30 days and still accruing interest increased to
Net Charge-offs (Recoveries)
Net charge-offs totaled
Provision for Credit Losses
The Bank recorded a
Allowance for Credit Losses on Loans
At
The following table provides the changes in the allowance for credit losses on loans for the three-month periods ended (dollars in thousands):
Allowance for credit losses on loans, beginning of period | $ | 8,858 | $ | 8,717 | $ | 6,202 | ||||||
Net (charge-offs) recoveries | (83 | ) | 96 | (110 | ) | |||||||
Provision for credit losses on loans | 121 | 45 | 200 | |||||||||
Allowance for credit losses on loans, end of period | $ | 8,896 | $ | 8,858 | $ | 6,292 |
The allowance for credit losses on loans as a percentage of total loans totaled 0.93% on
Allowance for Credit Losses on Unfunded Commitments
The allowance for credit losses on unfunded commitments totaled
Allowance for Credit Losses on Securities
The allowance for credit losses on securities totaled
LIQUIDITY
Liquidity sources available to the Bank, including interest-bearing deposits in banks, unpledged securities available for sale, at fair value, unpledged securities held-to-maturity, at par, eligible to be pledged to the
The Bank maintains liquidity to fund loan growth and to meet potential demand from deposit customers, including potential volatile deposits. The estimated amount of uninsured customer deposits totaled
BALANCE SHEET
At
Total assets decreased
Loans, net of the allowance for credit losses, totaled
Deposits totaled
Deposits decreased
Shareholders’ equity totaled
The following table provides capital ratios at the periods ended:
Total capital ratio (2) | 14.80 | % | 14.85 | % | 14.18 | % | ||||||
Tier 1 capital ratio (2) | 13.86 | % | 13.93 | % | 13.52 | % | ||||||
Common equity Tier 1 capital ratio (2) | 13.86 | % | 13.93 | % | 13.52 | % | ||||||
Leverage ratio (2) | 9.97 | % | 9.72 | % | 9.27 | % | ||||||
Common equity to total assets (5) | 8.20 | % | 8.21 | % | 7.19 | % | ||||||
Tangible common equity to tangible assets (5) (6) | 7.98 | % | 8.00 | % | 6.95 | % |
STOCK REPURCHASE PLAN
The Board of Directors authorized a stock repurchase plan to purchase up to
NON-GAAP FINANCIAL MEASURES
In addition to financial statements prepared in accordance with
The Company believes certain non-GAAP financial measures enhance the understanding of its business and performance. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions. A reconciliation of tax-exempt net interest income is included at the end of this release.
ABOUT
FORWARD-LOOKING STATEMENTS
Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including the rapidly changing uncertainties related to the COVID-19 pandemic and its potential adverse effect on the economy, our employees and customers, and our financial performance. For details on other factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended
CONTACTS
President and CEO | Executive Vice President and CFO | |
(540) 465-9121 | (540) 465-9121 | |
sharvard@fbvirginia.com | sbell@fbvirginia.com | |
Quarterly Performance Summary
(in thousands, except share and per share data)
(unaudited) | ||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
Income Statement | ||||||||||||||||||||
Interest income | ||||||||||||||||||||
Interest and fees on loans | $ | 12,640 | $ | 11,886 | $ | 11,512 | $ | 11,502 | $ | 10,759 | ||||||||||
Interest on deposits in banks | 338 | 759 | 344 | 522 | 380 | |||||||||||||||
Interest on securities | ||||||||||||||||||||
Taxable interest | 1,323 | 1,306 | 1,339 | 1,381 | 1,323 | |||||||||||||||
Tax-exempt interest | 304 | 307 | 306 | 308 | 307 | |||||||||||||||
Dividends | 26 | 28 | 27 | 27 | 23 | |||||||||||||||
Total interest income | $ | 14,631 | $ | 14,286 | $ | 13,528 | $ | 13,740 | $ | 12,792 | ||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | $ | 3,810 | $ | 3,402 | $ | 2,216 | $ | 1,593 | $ | 927 | ||||||||||
Interest on subordinated debt | 69 | 69 | 69 | 69 | 70 | |||||||||||||||
Interest on junior subordinated debt | 69 | 67 | 67 | 68 | 68 | |||||||||||||||
Interest on other borrowings | — | 3 | — | — | — | |||||||||||||||
Total interest expense | $ | 3,948 | $ | 3,541 | $ | 2,352 | $ | 1,730 | $ | 1,065 | ||||||||||
Net interest income | $ | 10,683 | $ | 10,745 | $ | 11,176 | $ | 12,010 | $ | 11,727 | ||||||||||
Provision for credit losses | 100 | 100 | — | 1,250 | 200 | |||||||||||||||
Net interest income after provision for credit losses | $ | 10,583 | $ | 10,645 | $ | 11,176 | $ | 10,760 | $ | 11,527 | ||||||||||
Noninterest income | ||||||||||||||||||||
Service charges on deposit accounts | $ | 733 | $ | 683 | $ | 646 | $ | 662 | $ | 708 | ||||||||||
ATM and check card fees | 976 | 848 | 800 | 838 | 915 | |||||||||||||||
Wealth management fees | 811 | 749 | 776 | 706 | 739 | |||||||||||||||
Fees for other customer services | 122 | 220 | 196 | 238 | 180 | |||||||||||||||
Brokered mortgage fees | 38 | 35 | — | 21 | 72 | |||||||||||||||
Income from bank owned life insurance | 175 | 135 | 149 | 155 | 166 | |||||||||||||||
Net losses on securities available for sale | — | — | — | (2,004 | ) | — | ||||||||||||||
Gain on sale of other investment | — | — | — | 2,885 | — | |||||||||||||||
Other operating income | 198 | 214 | 211 | 631 | 247 | |||||||||||||||
Total noninterest income | $ | 3,053 | $ | 2,884 | $ | 2,778 | $ | 4,132 | $ | 3,027 | ||||||||||
Noninterest expense | ||||||||||||||||||||
Salaries and employee benefits | $ | 5,505 | $ | 5,189 | $ | 5,346 | $ | 5,325 | $ | 5,174 | ||||||||||
Occupancy | 534 | 524 | 528 | 562 | 539 | |||||||||||||||
Equipment | 598 | 571 | 587 | 575 | 546 | |||||||||||||||
Marketing | 204 | 248 | 268 | 228 | 211 | |||||||||||||||
Supplies | 128 | 147 | 148 | 144 | 117 | |||||||||||||||
Legal and professional fees | 439 | 422 | 343 | 339 | 361 | |||||||||||||||
ATM and check card expense | 440 | 425 | 400 | 388 | 332 | |||||||||||||||
161 | 212 | 106 | 70 | 109 | ||||||||||||||||
Bank franchise tax | 262 | 262 | 254 | 238 | 238 | |||||||||||||||
Data processing expense | 266 | 252 | 202 | 289 | 243 | |||||||||||||||
Amortization expense | 5 | 4 | 5 | 4 | 5 | |||||||||||||||
Other real estate owned (income) expense, net | 15 | (219 | ) | 3 | (189 | ) | 14 | |||||||||||||
Other operating expense | 1,227 | 1,121 | 1,010 | 1,007 | 1,194 | |||||||||||||||
Total noninterest expense | $ | 9,784 | $ | 9,158 | $ | 9,200 | $ | 8,980 | $ | 9,083 | ||||||||||
Income before income taxes | $ | 3,852 | $ | 4,371 | $ | 4,754 | $ | 5,912 | $ | 5,471 | ||||||||||
Income tax expense | 731 | 866 | 905 | 1,132 | 1,017 | |||||||||||||||
Net income | $ | 3,121 | $ | 3,505 | $ | 3,849 | $ | 4,780 | $ | 4,454 | ||||||||||
Quarterly Performance Summary
(in thousands, except share and per share data)
(unaudited) | ||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
Common Share and Per Common Share Data | ||||||||||||||||||||
Earnings per common share, basic | $ | 0.50 | $ | 0.56 | $ | 0.61 | $ | 0.76 | $ | 0.71 | ||||||||||
Weighted average shares, basic | 6,256,663 | 6,269,668 | 6,273,913 | 6,262,821 | 6,257,040 | |||||||||||||||
Earnings per common share, diluted | $ | 0.50 | $ | 0.56 | $ | 0.61 | $ | 0.76 | $ | 0.71 | ||||||||||
Weighted average shares, diluted | 6,271,351 | 6,277,161 | 6,281,116 | 6,272,409 | 6,264,107 | |||||||||||||||
Shares outstanding at period end | 6,260,934 | 6,250,613 | 6,281,935 | 6,264,912 | 6,262,381 | |||||||||||||||
Tangible book value at period end (4) | $ | 17.38 | $ | 17.55 | $ | 17.30 | $ | 16.79 | $ | 15.31 | ||||||||||
Cash dividends | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.14 | $ | 0.14 | ||||||||||
Key Performance Ratios | ||||||||||||||||||||
Return on average assets | 0.91 | % | 1.02 | % | 1.15 | % | 1.37 | % | 1.27 | % | ||||||||||
Return on average equity | 10.96 | % | 12.56 | % | 14.20 | % | 18.38 | % | 17.27 | % | ||||||||||
Net interest margin | 3.35 | % | 3.36 | % | 3.60 | % | 3.70 | % | 3.58 | % | ||||||||||
Efficiency ratio (1) | 70.67 | % | 68.37 | % | 65.50 | % | 59.56 | % | 61.10 | % | ||||||||||
Average Balances | ||||||||||||||||||||
Average assets | $ | 1,355,113 | $ | 1,372,781 | $ | 1,351,630 | $ | 1,386,841 | $ | 1,393,308 | ||||||||||
Average earning assets | 1,275,112 | 1,290,828 | 1,267,830 | 1,297,223 | 1,309,794 | |||||||||||||||
Average shareholders’ equity | 112,987 | 111,917 | 109,924 | 103,132 | 102,341 | |||||||||||||||
Asset Quality | ||||||||||||||||||||
Loan charge-offs | $ | 143 | $ | 110 | $ | 975 | $ | 135 | $ | 181 | ||||||||||
Loan recoveries | 60 | 206 | 60 | 40 | 70 | |||||||||||||||
Net charge-offs (recoveries) | 83 | (96 | ) | 915 | 95 | 111 | ||||||||||||||
Non-accrual loans | 3,116 | 677 | 1,591 | 2,673 | 566 | |||||||||||||||
Other real estate owned, net | — | 45 | 185 | 185 | 1,578 | |||||||||||||||
Nonperforming assets (3) | 3,116 | 722 | 1,776 | 2,858 | 2,144 | |||||||||||||||
Loans 30 to 89 days past due, accruing | 1,395 | 970 | 1,816 | 1,532 | 2,117 | |||||||||||||||
Loans over 90 days past due, accruing | 370 | 226 | 47 | — | 306 | |||||||||||||||
Special mention loans | — | 2,754 | — | 1,959 | 3,183 | |||||||||||||||
Substandard loans, accruing | 1,683 | 418 | 296 | 301 | 304 | |||||||||||||||
Capital Ratios (2) | ||||||||||||||||||||
Total capital | $ | 146,163 | $ | 144,278 | $ | 141,501 | $ | 139,549 | $ | 134,882 | ||||||||||
Tier 1 capital | 136,947 | 135,079 | 132,784 | 132,103 | 128,590 | |||||||||||||||
Common equity tier 1 capital | 136,947 | 135,079 | 132,784 | 132,103 | 128,590 | |||||||||||||||
Total capital to risk-weighted assets | 14.80 | % | 14.88 | % | 14.85 | % | 14.60 | % | 14.18 | % | ||||||||||
Tier 1 capital to risk-weighted assets | 13.86 | % | 13.93 | % | 13.94 | % | 13.82 | % | 13.52 | % | ||||||||||
Common equity tier 1 capital to risk-weighted assets | 13.86 | % | 13.93 | % | 13.94 | % | 13.82 | % | 13.52 | % | ||||||||||
Leverage ratio | 9.97 | % | 9.72 | % | 9.70 | % | 9.57 | % | 9.27 | % | ||||||||||
Quarterly Performance Summary
(in thousands, except share and per share data)
(unaudited) | ||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
Balance Sheet | ||||||||||||||||||||
Cash and due from banks | $ | 17,168 | $ | 17,697 | $ | 17,950 | $ | 20,784 | $ | 22,809 | ||||||||||
Interest-bearing deposits in banks | 32,931 | 54,379 | 59,851 | 46,130 | 52,976 | |||||||||||||||
Securities available for sale, at fair value | 148,175 | 156,745 | 162,355 | 162,907 | 176,403 | |||||||||||||||
Securities held to maturity, at amortized cost (net of allowance for credit losses) | 149,948 | 151,677 | 151,301 | 153,158 | 154,894 | |||||||||||||||
Restricted securities, at cost | 2,077 | 1,803 | 1,803 | 1,908 | 1,908 | |||||||||||||||
Loans, net of allowance for credit losses | 943,603 | 921,336 | 909,250 | 913,076 | 900,222 | |||||||||||||||
Other real estate owned, net | — | 45 | 185 | 185 | 1,578 | |||||||||||||||
Premises and equipment, net | 21,363 | 21,556 | 21,637 | 21,876 | 21,693 | |||||||||||||||
Accrued interest receivable | 4,502 | 4,248 | 4,389 | 4,543 | 4,247 | |||||||||||||||
Bank owned life insurance | 24,734 | 24,559 | 24,424 | 24,531 | 24,375 | |||||||||||||||
3,030 | 3,030 | 3,030 | 3,030 | 3,030 | ||||||||||||||||
Core deposit intangibles, net | 122 | 127 | 131 | 136 | 140 | |||||||||||||||
Other assets | 18,567 | 17,022 | 16,026 | 17,119 | 19,320 | |||||||||||||||
Total assets | $ | 1,366,220 | $ | 1,374,224 | $ | 1,372,332 | $ | 1,369,383 | $ | 1,383,595 | ||||||||||
Noninterest-bearing demand deposits | $ | 403,774 | $ | 396,137 | $ | 410,019 | $ | 427,344 | $ | 438,306 | ||||||||||
Savings and interest-bearing demand deposits | 646,980 | 670,005 | 676,875 | 677,139 | 693,970 | |||||||||||||||
Time deposits | 184,419 | 176,226 | 154,631 | 136,849 | 133,770 | |||||||||||||||
Total deposits | $ | 1,235,173 | $ | 1,242,368 | $ | 1,241,525 | $ | 1,241,332 | $ | 1,266,046 | ||||||||||
Subordinated debt, net | 4,997 | 4,996 | 4,996 | 4,995 | 4,995 | |||||||||||||||
Junior subordinated debt | 9,279 | 9,279 | 9,279 | 9,279 | 9,279 | |||||||||||||||
Accrued interest payable and other liabilities | 4,792 | 4,721 | 4,675 | 5,417 | 4,198 | |||||||||||||||
Total liabilities | $ | 1,254,241 | $ | 1,261,364 | $ | 1,260,475 | $ | 1,261,023 | $ | 1,284,518 | ||||||||||
Preferred stock | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Common stock | 7,826 | 7,813 | 7,842 | 7,831 | 7,828 | |||||||||||||||
Surplus | 32,840 | 32,601 | 32,992 | 32,716 | 32,620 | |||||||||||||||
Retained earnings | 95,988 | 93,805 | 91,239 | 90,284 | 86,382 | |||||||||||||||
Accumulated other comprehensive (loss), net | (24,675 | ) | (21,359 | ) | (20,216 | ) | (22,471 | ) | (27,753 | ) | ||||||||||
Total shareholders’ equity | $ | 111,979 | $ | 112,860 | $ | 111,857 | $ | 108,360 | $ | 99,077 | ||||||||||
Total liabilities and shareholders’ equity | $ | 1,366,220 | $ | 1,374,224 | $ | 1,372,332 | $ | 1,369,383 | $ | 1,383,595 | ||||||||||
Loan Data | ||||||||||||||||||||
Mortgage real estate loans: | ||||||||||||||||||||
Construction and land development | $ | 50,405 | $ | 49,282 | $ | 48,610 | $ | 51,840 | $ | 51,352 | ||||||||||
Secured by farmland | 7,113 | 3,563 | 3,150 | 3,343 | 3,432 | |||||||||||||||
Secured by 1-4 family residential | 340,773 | 337,601 | 334,302 | 331,421 | 317,414 | |||||||||||||||
Other real estate loans | 426,065 | 418,409 | 412,851 | 415,112 | 414,072 | |||||||||||||||
Loans to farmers (except those secured by real estate) | 667 | 714 | 739 | 900 | 745 | |||||||||||||||
Commercial and industrial loans (except those secured by real estate) | 116,463 | 112,088 | 110,198 | 110,325 | 111,400 | |||||||||||||||
Consumer installment loans | 4,596 | 4,505 | 4,206 | 4,128 | 4,192 | |||||||||||||||
Deposit overdrafts | 368 | 251 | 179 | 197 | 163 | |||||||||||||||
All other loans | 6,049 | 3,781 | 3,732 | 3,256 | 3,744 | |||||||||||||||
Total loans | $ | 952,499 | $ | 930,194 | $ | 917,967 | $ | 920,522 | $ | 906,514 | ||||||||||
Allowance for credit losses | (8,896 | ) | (8,858 | ) | (8,717 | ) | (7,446 | ) | (6,292 | ) | ||||||||||
Loans, net | $ | 943,603 | $ | 921,336 | $ | 909,250 | $ | 913,076 | $ | 900,222 | ||||||||||
Quarterly Performance Summary
(in thousands, except share and per share data)
(unaudited) | ||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
Reconciliation of Tax-Equivalent Net Interest Income (7) | ||||||||||||||||||||
GAAP measures: | ||||||||||||||||||||
Interest income – loans | $ | 12,640 | $ | 11,886 | $ | 11,512 | $ | 11,502 | $ | 10,759 | ||||||||||
Interest income – investments and other | 1,991 | 2,400 | 2,016 | 2,238 | 2,033 | |||||||||||||||
Interest expense – deposits | (3,810 | ) | (3,402 | ) | (2,216 | ) | (1,593 | ) | (927 | ) | ||||||||||
Interest expense – subordinated debt | (69 | ) | (69 | ) | (69 | ) | (69 | ) | (70 | ) | ||||||||||
Interest expense – junior subordinated debt | (69 | ) | (67 | ) | (67 | ) | (68 | ) | (68 | ) | ||||||||||
Interest expense – other borrowings | — | (3 | ) | — | — | — | ||||||||||||||
Total net interest income | $ | 10,683 | $ | 10,745 | $ | 11,176 | $ | 12,010 | $ | 11,727 | ||||||||||
Non-GAAP measures: | ||||||||||||||||||||
Tax benefit realized on non-taxable interest income – municipal securities | $ | 81 | $ | 81 | $ | 82 | $ | 82 | $ | 82 | ||||||||||
Total tax benefit realized on non-taxable interest income | 81 | 81 | 82 | 82 | 82 | |||||||||||||||
Total tax-equivalent net interest income | $ | 10,764 | $ | 10,826 | $ | 11,258 | $ | 12,092 | $ | 11,809 | ||||||||||
Year-to-Date Performance Summary
(in thousands, except share and per share data)
(unaudited) | ||||||||
For the Nine Months Ended | ||||||||
2023 | 2022 | |||||||
Income Statement | ||||||||
Interest income | ||||||||
Interest and fees on loans | $ | 36,038 | $ | 30,218 | ||||
Interest on deposits in banks | 1,441 | 701 | ||||||
Interest on securities | ||||||||
Taxable interest | 3,968 | 3,750 | ||||||
Tax-exempt interest | 917 | 921 | ||||||
Dividends | 81 | 65 | ||||||
Total interest income | $ | 42,445 | $ | 35,655 | ||||
Interest expense | ||||||||
Interest on deposits | $ | 9,428 | $ | 1,680 | ||||
Interest on subordinated debt | 207 | 208 | ||||||
Interest on junior subordinated debt | 203 | 202 | ||||||
Interest on other borrowings | 3 | — | ||||||
Total interest expense | $ | 9,841 | $ | 2,090 | ||||
Net interest income | $ | 32,604 | $ | 33,565 | ||||
Provision for credit losses | 200 | 600 | ||||||
Net interest income after provision for credit losses | $ | 32,404 | $ | 32,965 | ||||
Noninterest income | ||||||||
Service charges on deposit accounts | $ | 2,062 | $ | 2,015 | ||||
ATM and check card fees | 2,624 | 2,462 | ||||||
Wealth management fees | 2,336 | 2,302 | ||||||
Fees for other customer services | 538 | 601 | ||||||
Brokered mortgage fees | 73 | 224 | ||||||
Income from bank owned life insurance | 459 | 441 | ||||||
Other operating income | 623 | 473 | ||||||
Total noninterest income | $ | 8,715 | $ | 8,518 | ||||
Noninterest expense | ||||||||
Salaries and employee benefits | $ | 16,040 | $ | 15,384 | ||||
Occupancy | 1,586 | 1,656 | ||||||
Equipment | 1,756 | 1,725 | ||||||
Marketing | 720 | 585 | ||||||
Supplies | 423 | 384 | ||||||
Legal and professional fees | 1,204 | 1,075 | ||||||
ATM and check card expense | 1,265 | 982 | ||||||
479 | 393 | |||||||
Bank franchise tax | 778 | 692 | ||||||
Data processing expense | 720 | 700 | ||||||
Amortization expense | 14 | 15 | ||||||
Other real estate owned (income) expense, net | (201 | ) | 83 | |||||
Net losses on disposal of premises and equipment | — | — | ||||||
Other operating expense | 3,358 | 2,971 | ||||||
Total noninterest expense | $ | 28,142 | $ | 26,645 | ||||
Income before income taxes | $ | 12,977 | $ | 14,838 | ||||
Income tax expense | 2,502 | 2,820 | ||||||
Net income | $ | 10,475 | $ | 12,018 | ||||
Year-to-Date Performance Summary
(in thousands, except share and per share data)
(unaudited) | ||||||||
For the Nine Months Ended | ||||||||
2023 | 2022 | |||||||
Common Share and Per Common Share Data | ||||||||
Net income, basic | $ | 1.67 | $ | 1.92 | ||||
Weighted average shares, basic | 6,266,707 | 6,248,847 | ||||||
Net income, diluted | $ | 1.67 | $ | 1.92 | ||||
Weighted average shares, diluted | 6,276,502 | 6,254,968 | ||||||
Shares outstanding at period end | 6,260,934 | 6,262,381 | ||||||
Tangible book value at period end (4) | $ | 17.38 | $ | 15.31 | ||||
Cash dividends | $ | 0.45 | $ | 0.42 | ||||
Key Performance Ratios | ||||||||
Return on average assets | 1.03 | % | 1.14 | % | ||||
Return on average equity | 12.57 | % | 15.12 | % | ||||
Net interest margin | 3.44 | % | 3.57 | % | ||||
Efficiency ratio (1) | 68.17 | % | 62.66 | % | ||||
Average Balances | ||||||||
Average assets | $ | 1,360,154 | $ | 1,415,169 | ||||
Average earning assets | 1,278,136 | 1,265,509 | ||||||
Average shareholders’ equity | 111,460 | 106,285 | ||||||
Asset Quality | ||||||||
Loan charge-offs | $ | 1,228 | $ | 394 | ||||
Loan recoveries | 326 | 375 | ||||||
Net charge-offs | 902 | 19 | ||||||
Reconciliation of Tax-Equivalent Net Interest Income (7) | ||||||||
GAAP measures: | ||||||||
Interest income – loans | $ | 36,038 | $ | 30,218 | ||||
Interest income – investments and other | 6,407 | 5,437 | ||||||
Interest expense – deposits | (9,428 | ) | (1,680 | ) | ||||
Interest expense – subordinated debt | (207 | ) | (208 | ) | ||||
Interest expense – junior subordinated debt | (203 | ) | (202 | ) | ||||
Interest expense – other borrowings | (3 | ) | — | |||||
Total net interest income | $ | 32,604 | $ | 33,565 | ||||
Non-GAAP measures: | ||||||||
Tax benefit realized on non-taxable interest income – loans | $ | — | $ | 8 | ||||
Tax benefit realized on non-taxable interest income – municipal securities | 244 | 245 | ||||||
Total tax benefit realized on non-taxable interest income | $ | 244 | $ | 253 | ||||
Total tax-equivalent net interest income | $ | 32,848 | $ | 33,818 |
(1) The efficiency ratio is computed by dividing noninterest expense excluding other real estate owned income/expense, amortization of intangibles, gains and losses on disposal of premises and equipment, and merger related expenses by the sum of net interest income on a tax-equivalent basis and noninterest income, excluding gains on sales of securities and gains on other investments. The efficiency ratio is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency. Such information is not prepared in accordance with
(2) Capital ratios are for
(3) Nonperforming assets are comprised of nonaccrual loans and other real estate owned.
(4) Tangible book value is calculated by subtracting goodwill and other intangibles from total shareholders' equity. Tangible book value is a non-GAAP financial measure that management believes provides investors with important information that may be related to the valuation of common stock.
(5) Capital ratios presented are for
(6) The ratio of tangible common equity to tangible assets, or TCE ratio, is calculated by dividing consolidated total common shareholders’ equity by consolidated total assets, after reducing both amounts by goodwill and other intangible assets. The TCE ratio is not required by GAAP or by bank regulations, but is a metric used by management to evaluate the adequacy of the Company’s capital levels. Since there is no authoritative requirement to calculate the TCE ratio, our TCE ratio is not necessarily comparable to similar capital measures disclosed or used by other companies in the financial services industry. Tangible common equity and tangible assets are non-GAAP financial measures and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.
(7) Tax-equivalent net interest income is calculated by adding the tax benefit realized from interest income that is nontaxable to total interest income then subtracting total interest expense. The tax rate utilized in calculating the tax benefit is 21%. See the tables above for tax-equivalent net interest income and reconciliations of net interest income to tax-equivalent net interest income.
Source:
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