ASHEVILLE, N.C., Oct. 28, 2016 /PRNewswire/ -- ASB Bancorp,
Inc. (the "Company") (NASDAQ GM: ASBB), the holding company for
Asheville Savings Bank, S.S.B. (the "Bank"), announced today its
unaudited preliminary operating results for the three- and
nine-month periods ended September 30,
2016. The Company reported net income of $1.7 million, or $0.48 per diluted common share, for the quarter
ended September 30, 2016 compared to
net income of $1.1 million, or
$0.28 per diluted common share, for
the same quarter of 2015. For the nine months ended September 30, 2016, the Company reported net
income of $4.5 million compared to
net income of $2.6 million for the
same period of 2015 or an increase of 72.8%. For the
year-to-date periods, net income per common share increased to
$1.23 per diluted common share for
the nine months ended September 30,
2016 from $0.65 per diluted
common share for the nine months ended September 30, 2015.
Suzanne S. DeFerie, President and
Chief Executive Officer, commented: "During the third quarter, we
grew earnings and improved asset quality and expense efficiency,
all while maintaining a strong balance sheet. These solid results
demonstrate that our momentum has continued from the first half of
the year.
"While total loans grew in the third quarter over last year, we
experienced a slight decline from the second quarter as a result of
prepayments and the delay of certain anticipated loan closings into
the fourth quarter. However, our loan production pipeline continues
to be robust and we expect loan originations to be strong for the
rest of the year.
"We produced improved results consistently this year and have
made good progress in increasing returns on average assets and
average equity as well as improving our efficiency ratio. We
are confident that we will be able to capitalize on the positive
trends in our markets and continue to produce profitable growth and
attractive returns for our shareholders."
2016 Third Quarter Highlights
- Net income for the third quarter of 2016 increased 51.1% to
$1.7 million, or $0.48 per diluted common share, from $1.1 million, or $0.28 per diluted common share, for the third
quarter of 2015. Third quarter 2016 earnings improved over
each of the previous four quarters.
- Excluding net gains realized from the sale of investment
securities, net of income taxes, earnings for the third quarter of
2016 increased 60.8% to $1.6 million,
or $0.46 per diluted common share,
from $1.0 million, or $0.25 per diluted common share, for the third
quarter of 2015.
- Net interest income increased 9.5% to $6.1 million for the three months ended
September 30, 2016 from $5.6 million for the three months ended
September 30, 2015. The net interest
margin improved to 3.28% for the third quarter of 2016 compared to
3.00% for the same quarter of 2015.
- Interest income from loans increased 10.0% in the third quarter
of 2016 compared to the third quarter of 2015, which primarily
reflected a $35.6 million increase in
average loan balances when comparing the two quarters.
- Interest expense was $871,000 for
the third quarter of 2016 compared to $877,000 for the same quarter of 2015, a decrease
of 0.7%, due to lower volumes of time
deposits.
- The Company recorded a recovery of loan losses in the amount of
$92,000 in the third quarter of 2016
compared to a provision for loan losses of $191,000 in the third quarter of 2015. The
allowance for loan losses was 1.08% of total loans at September 30, 2016 and 1.09% at December 31, 2015, and the allowance coverage of
nonperforming loans was 522.6% at September
30, 2016 compared to 246.8% at December 31, 2015.
- Loan balances increased $21.8
million, or 3.8%, to $597.9
million at September 30,
2016 from $576.1 million at
December 31, 2015 and increased
$28.9 million, or 5.1%, since
September 30, 2015 as new loan
originations exceeded loan repayments, prepayments and
foreclosures. However, loans decreased $8.3 million since June
30, 2016, primarily due to prepayments during the third
quarter of 2016.
- Noninterest income increased 9.9% to $2.3 million for the third quarter of 2016 from
$2.1 million for the third quarter of
2015, primarily due to increases in collected loan fees, income
from investment in bank owned life insurance, and deposit and other
service charge income, which were partially offset by decreases in
gains realized from the sale of investment securities and income
from debit card services.
- Noninterest expenses increased 0.4% to $5.9 million for the third quarter of 2016 from
$5.8 million for the third quarter of
2015, primarily due to increases in data processing fees and
advertising, partially offset by decreases in other expense
categories.
- Delinquent and nonperforming loans were 0.29% and 0.21%,
respectively, of total loans at September
30, 2016 compared to 0.49% and 0.44%, respectively, of total
loans at December 31, 2015.
- Nonperforming assets, including foreclosed properties, were
0.75% of total assets at September 30,
2016 compared to 1.05% of total assets at December 31, 2015 and 1.47% of total assets at
September 30, 2015.
- Core deposits, which exclude certificates of deposit, increased
$15.2 million, or 3.1%, since
December 31, 2015 and $21.3 million, or 4.4%, since September 30, 2015. Noninterest-bearing deposits
increased $15.6 million, or 13.7%,
and commercial non-maturity deposits increased $16.4 million, or 11.1%, since December 31, 2015.
- Book value per common share increased to $24.12 at September 30,
2016 from $22.50 at
December 31, 2015 and $22.41 at September 30,
2015.
- Capital remained strong with consolidated regulatory capital
ratios of 15.92% common equity tier 1 capital, 11.97% tier 1
leverage capital, 15.92% tier 1 risk-based capital and 16.99% total
risk-based capital.
- During the third quarter, the Company completed a program to
repurchase 200,000 shares of its common stock under Rule 10b5-1 of
the Securities Exchange Act of 1934 at an average purchase price of
$24.62 per share.
Income Statement Analysis
Net Interest Income. Net interest income
increased by $529,000, or 9.5%, to
$6.1 million for the three months
ended September 30, 2016 compared to
$5.6 million for the three months
ended September 30, 2015. Total
interest and dividend income increased $523,000, or 8.1%, to $7.0
million for the three months ended September 30, 2016 from $6.5 million for the three months ended
September 30, 2015, primarily as a
result of an increase of $35.6
million in average loan balances and a 15 basis point
increase in the average yield on loans. Interest on
investment securities decreased $76,000, attributable to a $27.4 million decrease in the average balance of
investment securities primarily to fund loan growth, which was
partially offset by a 24 basis point increase in the average yield
earned on the investment portfolio. Interest expense decreased
$6,000, or 0.7%, to $871,000 for the three months ended September 30, 2016 from $877,000 for the three months ended September 30, 2015, primarily due to a
$15.5 million decrease in the average
balances of certificates of deposit and a decrease in rates paid on
NOW and money market accounts, which were partially offset by
increases in the average balances of other deposits and an increase
of 8 basis points in the average rate paid on certificates of
deposits. When comparing these same three-month periods,
average noninterest-bearing deposits grew $11.7 million, or 10.0%, which contributed to
minimizing deposit interest expense while deposit funding
grew.
Net interest income increased by $1.5
million, or 9.6%, to $17.8
million for the nine months ended September 30, 2016 compared to $16.3 million for the nine months ended
September 30, 2015. Interest
income on loans increased $1.5
million, primarily resulting from a $48.0 million increase in average loan balances
and a 1 basis point increase in the average yield on loans.
Interest on investment securities decreased $53,000, attributable to an $18.3 million decrease in the average balance of
investment securities primarily to fund loan growth, which was
partially offset by a 29 basis point increase in the average yield
earned on the investment portfolio. Interest expense decreased
$49,000, or 1.9%, for the nine months
ended September 30, 2016 compared to
the nine months ended September 30,
2015. The lower interest expense was primarily attributable
to $19.6 million in lower average
balances of certificates of deposit, as well as an average rate
reduction of 1 basis point on total interest-bearing deposits. The
decrease in average balances of certificates of deposit was
partially offset by higher average balances of NOW, money market
and savings accounts. For the same comparable nine-month periods,
average noninterest-bearing deposits grew $13.8 million, or 13.0%, which contributed to the
reduction of deposit interest expense while deposit funding
grew.
Noninterest Income. Noninterest income
increased $206,000, or 9.9%, to
$2.3 million for the three months
ended September 30, 2016 from
$2.1 million for the three months
ended September 30, 2015. Factors
that contributed to the increase in noninterest income during the
2016 quarterly period included increases of $174,000 in collected loan fees, $87,000 in income from investment in bank owned
life insurance, and $38,000 in
deposit and other service charge income, which were partially
offset by decreases of $55,000 in
gains realized from the sale of investment securities and
$36,000 in income from debit card
services. Increased income on deposit and other fees primarily
related to ATM and overdraft fees.
Noninterest income increased $1.1
million, or 20.4%, to $6.8
million for the nine months ended September 30, 2016 from $5.7 million for the nine months ended
September 30, 2015. Factors that
contributed to the increase in noninterest income during the 2016
period included increases of $918,000
in gains realized from the sale of investment securities,
$234,000 in deposit and other service
charge income, $101,000 in collected
loan fees and $96,000 in income from
an investment in bank owned life insurance, which were partially
offset by a decrease of $141,000 in
mortgage banking income. Increased income on deposit and other fees
primarily related to retail checking accounts. The decrease in
mortgage banking income was attributable to lower volumes of
residential mortgage loans originated and sold during the 2016
period.
Noninterest Expenses. Noninterest expenses
increased $24,000, or 0.4%, to
$5.9 million for the three months
ended September 30, 2016 from
$5.8 million for the three months
ended September 30, 2015. The
increase for the third quarter of 2016 was primarily due to
increases of $89,000 in data
processing fees, $46,000 in
advertising and $33,000 in recruiting
expenses, which were partially offset by decreases of $69,000 in compensation and employee benefits,
$32,000 in loan expenses and
$31,000 in deposit insurance
premiums. The decrease in compensation and employee benefits was
primarily attributable to lower employee compensation expenses.
Noninterest expenses decreased $360,000, or 2.0%, to $17.3 million for the nine months ended
September 30, 2016 from $17.6 million for the nine months ended
September 30, 2015. The lower
2016 noninterest expenses primarily reflected decreases of
$173,000 in salaries and employee
benefits, $168,000 in loan expenses,
$84,000 in mortgage software
expenses, $77,000 in deposit
insurance premiums, $43,000 in
indirect auto loan dealer expenses and $39,000 in foreclosed property expenses, which
were partially offset by increases of $204,000 in data processing fees and $69,000 in professional and outside services
primarily due to revenue enhancement consulting fees.
In April 2016, the Bank decided to
settle its qualified pension plan liability for all remaining
participants effective July 1,
2016. The settlement is expected to be recognized in the
fourth quarter of 2016 when participants receive annuities or lump
sum payments of their accrued benefit balances. Based on the
most recently available information, the estimate of the one-time
settlement charge is in the range of $7.6
million to $7.7 million before income taxes, or $4.8 million to $4.9 million after income taxes,
of which $8.0 million before income
taxes, or $5.1 million after income
taxes, was recognized as a reduction of tangible common
shareholders' equity in the form of accumulated other comprehensive
loss as of December 31, 2015.
The most recently available estimate of the range of earnings per
share dilution is $1.34 to $1.36 per
share, while little or no common equity book value dilution is
expected. For periods following the settlement in the fourth
quarter of 2016, the Bank estimates annual periodic expense savings
of approximately $810,000 before
income taxes, or $513,000 after
income taxes, or $0.14 per
share. The Bank contributed $4.8
million to the qualified pension plan during the third
quarter of 2016. Actual settlement expenses may differ from
the estimates provided.
Balance Sheet Review
Assets. Total assets increased $14.3 million, or 1.8%, to $797.2 million at September 30, 2016 from $782.9 million at December
31, 2015. Cash and cash equivalents increased $11.4 million, or 34.0%, to $44.8 million at September
30, 2016 from $33.4 million at
December 31, 2015, primarily
attributable to the sale of investment securities. Investment
securities decreased $31.3 million,
or 22.2%, to $110.0 million at
September 30, 2016 from $141.3 million at December
31, 2015, primarily due to the sale of investment securities
to fund loan growth. Loans receivable, net of deferred fees,
increased $21.8 million, or 3.8%, to
$597.9 million at September 30, 2016 from $576.1 million at December
31, 2015 as new loan originations, primarily residential
mortgage and commercial real estate loan originations, exceeded
loan repayments, prepayments and foreclosures. The increase in
other assets was primarily attributable to a $10.0 million investment in general account bank
owned life insurance during the second quarter of 2016 and
$4.1 million in securities sold but
not settled at September 30,
2016.
Liabilities. Total deposits increased $11.7 million, or 1.9%, to $642.6 million at September 30, 2016 from $630.9 million at December
31, 2015. During the nine months ended September 30, 2016, we continued our focus on
core deposit growth, from which we exclude certificates of
deposit. Core deposits increased $15.2
million, or 3.1%, to $510.8
million at September 30, 2016
from $495.6 million at December 31, 2015.
Commercial checking and money market accounts increased
$16.3 million, or 11.1%, to
$163.3 million at September 30, 2016 from $147.0 million at December
31, 2015, reflecting expanded sources of lower cost
funding. Our efforts to obtain new commercial deposit
relationships in conjunction with making new commercial loans
significantly contributed to this increase and reflects our
commitment to establishing diversified relationships with business
clients.
Certificates of deposit decreased to $131.8 million at September 30, 2016 from $135.3 million at December
31, 2015 as we continued our focus on core deposit growth in
addition to increasing longer term brokered deposits by
$6.4 million since December 31, 2015. Accounts payable and
other liabilities decreased $3.3
million, or 27.9%, to $8.6
million at September 30, 2016
from $11.9 million at December 31, 2015. The decrease in accounts
payable and other liabilities at September
30, 2016 was primarily attributable to a $4.8 million contribution to the Bank's employee
pension plan during the third quarter. At September 30, 2016, $4.5
million in investment securities were purchased but not
settled.
Asset Quality
Provision for Loan Losses. The recovery of loan
losses was $92,000 for the three
months ended September 30, 2016
compared to a provision for loan losses of $191,000 for the three months ended September 30, 2015. The decrease in the
provision for loan losses for the third quarter of 2016 was
primarily due to continued improvement in asset quality and a
decline in loan volume since the second quarter of 2016. The
allowance for loan losses totaled $6.5
million, or 1.08% of total loans, at September 30, 2016 compared to $6.3 million, or 1.09% of total loans, at
December 31, 2015. We charged off
$43,000 in loans during the three
months ended September 30, 2016
compared to $46,000 during the three
months ended September 30, 2015.
The Company recorded a provision for loan losses in the amount
of $411,000 for the nine months ended
September 30, 2016 compared to
$450,000 for the nine months ended
September 30, 2015. The Company
charged off $311,000 in loans for the
first nine months of 2016 compared to $435,000 for the first nine months of 2015.
The decrease in the nine-month provision for loan losses was
primarily due to continued improvement in asset quality and slower
growth in loans.
Nonperforming Assets. Nonperforming assets totaled
$6.0 million, or 0.75% of total
assets, at September 30, 2016
compared to $8.2 million, or 1.05% of
total assets, at December 31, 2015.
Nonperforming assets included $1.2
million in nonperforming loans and $4.8 million in foreclosed real estate at
September 30, 2016 compared to
$2.5 million and $5.6 million, respectively, at December 31, 2015.
Nonperforming loans decreased $1.3
million and were $1.2 million,
or 0.21% of total loans, at September 30,
2016 compared to $2.5 million,
or 0.44% of total loans, at December
31, 2015. Commercial mortgage nonperforming loans
decreased $818,000, and residential
and revolving nonperforming mortgage loans decreased $543,000 for the first nine months of 2016.
Performing troubled debt restructurings ("TDRs") decreased
$119,000, or 2.6%, when comparing the
same periods. Total performing TDRs and nonperforming assets
decreased $2.3 million, or 18.1%, to
$10.4 million, or 1.31% of total
assets, at September 30, 2016 from
$12.7 million, or 1.63% of total
assets, at December 31, 2015.
At September 30, 2016,
nonperforming loans included four residential mortgage loans that
totaled $731,000, three revolving
home equity loans that totaled $229,000, four commercial and industrial loans
that totaled $200,000, one consumer
loan in the amount of $42,000, and
two construction and land development loans that totaled
$35,000. As of September 30, 2016, the nonperforming loans had
specific reserves totaling $92,000.
TDRs were $4.6 million at
September 30, 2016 and $5.5 million at December
31, 2015. There were no additions to TDRs during the
nine months ended September 30,
2016. At September 30, 2016,
$4.4 million of the $4.6 million TDRs were performing.
Foreclosed real estate at September 30,
2016 included seven properties with a total recorded amount
of $4.8 million compared to six
properties with a total recorded amount of $5.6 million at December
31, 2015. During the nine months ended September 30, 2016, two new properties totaling
$663,000 were added to foreclosed
real estate, while one property in the amount of $685,000 was sold with an additional loss of
$2,000. In addition, during the
nine months ended September 30, 2016,
the Bank sold four of its residential lots in a mixed-use lot
subdivision for net proceeds of $139,000 and one unit in a mixed-use condominium
for net proceeds of $701,000.
The Bank recorded $18,000 in
additional loss provisions on foreclosed real estate during the
first nine months of 2016, and there were no capital additions
during the period.
The Bank's largest foreclosed property resulted from a loan
relationship that had an original purpose of constructing a
mixed-use retail, commercial office, and residential condominium
project located in Western North
Carolina. As a result of this foreclosure, the Bank acquired
44 of the 48 condominium units in the building. Following an
additional write-down of approximately $630,000 on the loans secured by this collateral
in the fourth quarter of 2012, the Bank recorded this foreclosed
property in the amount of $9.8
million. During 2013, the Bank recorded additional
write-downs totaling $1.6 million,
which resulted in an adjusted recorded amount of $8.2 million at December
31, 2013. During 2014, the Bank recorded an additional
write-down of $133,000 on the
property and sold 28 residential condominium units and one office
unit. During 2015, the Bank sold one retail unit and two
office units. During the nine months ended September 30, 2016, the Bank sold one retail
unit. As of September 30, 2016,
the adjusted recorded amount was $3.3
million for the remaining six retail units and five office
units.
Profile
The Bank is a North Carolina
chartered stock savings bank offering traditional financial
services through 13 full-service banking centers located in
Buncombe, Madison, McDowell, Henderson and Transylvania counties in Western North Carolina and a loan production
office in Mecklenburg County. Originally chartered in 1936
and headquartered in Asheville, North
Carolina, the Bank is locally managed with a focus on
fostering strong relationships with its customers, its employees
and the communities it serves. The Bank was recognized as the
2016 #1 Best Overall Bank, #1 Best Mortgage Company, #1 Best Bank
Services For Small Businesses and #1 Best Business That Gives Back
To The Community by the readers of the Mountain Xpress
newspaper in Western North
Carolina.
This news release, as well as other written communications made
from time to time by the Company and its subsidiaries and oral
communications made from time to time by authorized officers of the
Company, may contain statements relating to the future results of
the Company (including certain projections, performance and growth
targets and business trends) that are considered "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements may be identified by the use of such words as "believe,"
"expect," "anticipate," "should," "planned," "estimated," "intend"
and "potential," and are subject to the protections of the safe
harbors created by such acts.
The Company cautions you that a number of important factors
could cause actual results to differ materially from those
currently anticipated in any forward-looking statement. Such
factors include, but are not limited to: prevailing economic
and geopolitical conditions; changes in interest rates, loan
demand, real estate values and competition; changes in accounting
principles, policies, and guidelines; changes in any applicable
law, rule, regulation or practice with respect to tax or legal
issues; and other economic, competitive, governmental, regulatory
and technological factors affecting the Company's operations,
pricing, products and services and other factors described in the
Company's filings with the Securities and Exchange Commission,
including its Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q. The forward-looking statements are made as of the date
of this release, and, except as may be required by applicable law
or regulation, the Company assumes no obligation to update the
forward-looking statements or to update the reasons why actual
results could differ from those projected in the forward-looking
statements.
Contact:
Suzanne S. DeFerie
Chief Executive Officer
(828) 254-7411
Selected Financial
Condition Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
2016
|
|
2015 (1)
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
|
|
|
|
|
$ 797,240
|
|
$ 782,853
|
|
1.8%
|
Cash and cash
equivalents
|
|
|
|
|
|
|
44,752
|
|
33,401
|
|
34.0%
|
Investment
securities
|
|
|
|
|
|
|
|
110,035
|
|
141,364
|
|
-22.2%
|
Loans receivable, net
of deferred fees
|
|
|
|
|
|
597,935
|
|
576,087
|
|
3.8%
|
Allowance for loan
losses
|
|
|
|
|
|
|
|
(6,464)
|
|
(6,289)
|
|
-2.8%
|
Deposits
|
|
|
|
|
|
|
|
|
|
642,603
|
|
630,904
|
|
1.9%
|
Core deposits
(2)
|
|
|
|
|
|
|
|
510,842
|
|
495,628
|
|
3.1%
|
FHLB
advances
|
|
|
|
|
|
|
|
50,000
|
|
50,000
|
|
0.0%
|
Accounts payable and
other liabilities
|
|
|
|
|
|
8,609
|
|
11,940
|
|
-27.9%
|
Total
equity
|
|
|
|
|
|
|
|
|
|
91,343
|
|
89,682
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived
from audited consolidated financial statements.
|
(2) Core
deposits are defined as total deposits excluding certificates of
deposit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Operating
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands,
|
|
Three Months
Ended
|
Nine Months
Ended
|
except per share
data)
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dividend
income
|
|
$
6,982
|
|
$
6,459
|
|
8.1%
|
|
$
20,414
|
|
$
18,902
|
|
8.0%
|
Interest
expense
|
|
871
|
|
877
|
|
-0.7%
|
|
2,569
|
|
2,618
|
|
-1.9%
|
Net interest
income
|
|
6,111
|
|
5,582
|
|
9.5%
|
|
17,845
|
|
16,284
|
|
9.6%
|
Provision
for
|
|
|
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
|
(92)
|
|
191
|
|
-148.2%
|
|
411
|
|
450
|
|
-8.7%
|
Net interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
after
provision for
|
|
|
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
|
6,203
|
|
5,391
|
|
15.1%
|
|
17,434
|
|
15,834
|
|
10.1%
|
Noninterest
income
|
|
2,290
|
|
2,084
|
|
9.9%
|
|
6,815
|
|
5,662
|
|
20.4%
|
Noninterest
expenses
|
|
5,861
|
|
5,837
|
|
0.4%
|
|
17,259
|
|
17,619
|
|
-2.0%
|
Income
before
|
|
|
|
|
|
|
|
|
|
|
|
|
income
tax
|
|
|
|
|
|
|
|
|
|
|
|
|
provision
|
|
|
|
2,632
|
|
1,638
|
|
60.7%
|
|
6,990
|
|
3,877
|
|
80.3%
|
Income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provision
|
|
|
|
907
|
|
496
|
|
82.9%
|
|
2,448
|
|
1,248
|
|
96.2%
|
Net income
|
|
|
|
$
1,725
|
|
$
1,142
|
|
51.1%
|
|
$
4,542
|
|
$
2,629
|
|
72.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per
|
|
|
|
|
|
|
|
|
|
|
|
|
common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
0.51
|
|
$
0.29
|
|
75.9%
|
|
$
1.29
|
|
$
0.67
|
|
92.5%
|
Diluted
|
|
|
|
$
0.48
|
|
$
0.28
|
|
71.4%
|
|
$
1.23
|
|
$
0.65
|
|
89.2%
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
3,422,798
|
|
3,947,445
|
|
-13.3%
|
|
3,534,129
|
|
3,923,531
|
|
-9.9%
|
Diluted
|
|
|
|
3,573,937
|
|
4,079,029
|
|
-12.4%
|
|
3,678,585
|
|
4,025,431
|
|
-8.6%
|
Ending shares
outstanding
|
3,787,322
|
|
4,405,266
|
|
-14.0%
|
|
3,787,322
|
|
4,405,266
|
|
-14.0%
|
Selected Average
Balances and Yields/Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months
Ended September 30,
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
(Dollars in
thousands)
|
|
|
|
|
|
Balance
|
|
Cost
|
|
Balance
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
receivable
|
|
|
|
|
|
$ 600,192
|
|
4.20%
|
|
$ 564,562
|
|
4.05%
|
Investment
securities, including tax-exempt (1)
|
|
111,550
|
|
2.43%
|
|
138,923
|
|
2.19%
|
Other
interest-earning assets
|
|
|
|
45,644
|
|
0.74%
|
|
52,843
|
|
0.49%
|
Total
interest-earning assets (1)
|
|
|
|
757,386
|
|
3.73%
|
|
756,328
|
|
3.46%
|
Interest-bearing
deposits
|
|
|
|
|
|
512,830
|
|
0.29%
|
|
513,519
|
|
0.30%
|
Federal Home Loan
Bank advances
|
|
|
|
50,000
|
|
3.93%
|
|
50,000
|
|
3.93%
|
Total
interest-bearing liabilities
|
|
|
|
563,130
|
|
0.62%
|
|
563,678
|
|
0.62%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(1)
|
|
|
|
|
|
|
|
3.11%
|
|
|
|
2.84%
|
Net interest margin
(1)
|
|
|
|
|
|
|
|
3.28%
|
|
|
|
3.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Average
|
|
Yield/
|
|
Average
|
|
Yield/
|
(Dollars in
thousands)
|
|
|
|
|
|
Balance
|
|
Cost
|
|
Balance
|
|
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
receivable
|
|
|
|
|
|
$ 599,227
|
|
4.12%
|
|
$ 551,179
|
|
4.11%
|
Investment
securities, including tax-exempt (1)
|
|
118,257
|
|
2.34%
|
|
136,537
|
|
2.05%
|
Other
interest-earning assets
|
|
|
|
35,858
|
|
0.84%
|
|
55,000
|
|
0.48%
|
Total
interest-earning assets (1)
|
|
|
|
753,342
|
|
3.68%
|
|
742,716
|
|
3.46%
|
Interest-bearing
deposits
|
|
|
|
|
|
510,648
|
|
0.29%
|
|
510,645
|
|
0.30%
|
Federal Home Loan
Bank advances
|
|
|
|
50,000
|
|
3.94%
|
|
50,000
|
|
3.93%
|
Total
interest-bearing liabilities
|
|
|
|
561,529
|
|
0.61%
|
|
561,230
|
|
0.62%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(1)
|
|
|
|
|
|
|
|
3.07%
|
|
|
|
2.84%
|
Net interest margin
(1)
|
|
|
|
|
|
|
|
3.23%
|
|
|
|
2.99%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Yields on
tax-exempt securities have been included on a tax-equivalent basis
using a 34% federal marginal tax rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Asset
Quality Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
Allowance for Loan
Losses
|
|
|
|
September
30,
|
|
September
30,
|
(Dollars in
thousands)
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses, beginning of period
|
|
$
6,583
|
|
$
6,124
|
|
$
6,289
|
|
$
5,949
|
Provision for
(recovery of) loan losses
|
|
|
|
(92)
|
|
191
|
|
411
|
|
450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs
|
|
|
|
|
|
|
(43)
|
|
(46)
|
|
(311)
|
|
(435)
|
Recoveries
|
|
|
|
|
|
|
|
16
|
|
28
|
|
75
|
|
333
|
Net
charge-offs
|
|
|
|
|
|
(27)
|
|
(18)
|
|
(236)
|
|
(102)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses, end of period
|
|
|
$
6,464
|
|
$
6,297
|
|
$
6,464
|
|
$
6,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a percent of:
|
|
|
|
|
|
|
|
|
Total
loans
|
|
|
|
|
|
|
1.08%
|
|
1.11%
|
|
1.08%
|
|
1.11%
|
Total
nonperforming loans
|
|
|
|
522.55%
|
|
223.69%
|
|
522.55%
|
|
223.69%
|
Nonperforming
Assets
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
2016
|
|
2015 (1)
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccruing loans
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land development
|
|
|
$
35
|
|
$
-
|
|
n/a
|
Commercial
mortgage
|
|
|
|
|
|
|
|
-
|
|
818
|
|
-100.0%
|
Commercial and
industrial
|
|
|
|
|
|
200
|
|
227
|
|
-11.9%
|
Total
commercial
|
|
|
|
|
|
|
|
235
|
|
1,045
|
|
-77.5%
|
Non-commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgage
|
|
|
|
|
|
|
|
731
|
|
1,309
|
|
-44.2%
|
Revolving
mortgage
|
|
|
|
|
|
|
|
229
|
|
194
|
|
18.0%
|
Consumer
|
|
|
|
|
|
|
|
|
|
42
|
|
-
|
|
n/a
|
Total
non-commercial
|
|
|
|
|
|
|
|
1,002
|
|
1,503
|
|
-33.3%
|
Total nonaccruing
loans (2)
|
|
|
|
|
|
1,237
|
|
2,548
|
|
-51.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans past due
90 or more days
|
|
|
|
|
|
|
|
|
|
|
and still accruing
|
|
|
|
|
|
|
|
-
|
|
-
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans
|
|
|
|
|
|
|
1,237
|
|
2,548
|
|
-51.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed real
estate
|
|
|
|
|
|
|
|
4,764
|
|
5,646
|
|
-15.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
|
|
|
|
|
6,001
|
|
8,194
|
|
-26.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing troubled
debt restructurings (3)
|
|
|
|
4,433
|
|
4,552
|
|
-2.6%
|
Performing troubled
debt restructurings and
|
|
|
|
|
|
|
|
|
total
nonperforming assets
|
|
|
|
|
|
$
10,434
|
|
$
12,746
|
|
-18.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
as a percent of total loans
|
|
|
0.21%
|
|
0.44%
|
|
|
Nonperforming assets
as a percent of total assets
|
|
|
0.75%
|
|
1.05%
|
|
|
Performing troubled
debt restructurings and
|
|
|
|
|
|
|
|
|
total
nonperforming assets to total assets
|
|
|
|
1.31%
|
|
1.63%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived from
audited consolidated financial statements.
|
(2) Nonaccruing loans
include nonaccruing troubled debt restructurings.
|
(3) Performing
troubled debt restructurings exclude nonaccruing troubled debt
restructurings.
|
Foreclosed Real
Estate by Loan Type
|
|
|
September 30,
2016
|
|
December 31,
2015
|
(Dollars in
thousands)
|
|
|
|
|
|
Number
|
|
Amount
|
|
Number
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
construction and land development
|
|
6
|
|
$
4,106
|
|
5
|
|
$
4,941
|
Residential
mortgage
|
|
|
|
|
|
1
|
|
658
|
|
1
|
|
705
|
Total
|
|
|
|
|
|
|
|
7
|
|
$
4,764
|
|
6
|
|
$
5,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreclosed Real
Estate
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
September 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
|
|
|
|
|
|
$
5,646
|
|
|
|
|
Transfers from
loans
|
|
|
|
|
|
|
|
663
|
|
|
|
|
Loss
provisions
|
|
|
|
|
|
|
|
(18)
|
|
|
|
|
Loss on sale of
foreclosed properties
|
|
|
|
|
|
(2)
|
|
|
|
|
Net proceeds from
sales of foreclosed properties
|
|
|
|
(1,525)
|
|
|
|
|
Ending
balance
|
|
|
|
|
|
|
|
$
4,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances and Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
(Dollars in
thousands)
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average
Balances
|
|
|
|
|
|
|
|
|
|
|
Average total
loans
|
|
|
|
|
|
$ 600,192
|
|
$ 564,562
|
|
$ 599,227
|
|
$ 551,179
|
Average total
interest-earning assets
|
|
|
|
757,386
|
|
756,328
|
|
753,342
|
|
742,716
|
Average total assets
(1)
|
|
|
|
|
|
796,833
|
|
791,984
|
|
787,228
|
|
778,427
|
Average total
interest-bearing deposits
|
|
|
|
512,830
|
|
513,519
|
|
510,648
|
|
510,645
|
Average total
deposits
|
|
|
|
|
|
641,760
|
|
630,733
|
|
631,324
|
|
617,479
|
Average total
interest-bearing liabilities
|
|
|
|
563,130
|
|
563,678
|
|
561,529
|
|
561,230
|
Average total
shareholders' equity
|
|
|
|
91,692
|
|
97,813
|
|
92,249
|
|
96,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (2)
|
|
|
|
0.86%
|
|
0.57%
|
|
0.77%
|
|
0.45%
|
Return on average
equity (2)
|
|
|
|
7.48%
|
|
4.63%
|
|
6.58%
|
|
3.63%
|
Interest rate spread
(2)(3)
|
|
|
|
|
3.11%
|
|
2.84%
|
|
3.07%
|
|
2.84%
|
Net interest margin
(2)(4)
|
|
|
|
|
3.28%
|
|
3.00%
|
|
3.23%
|
|
2.99%
|
Noninterest expense
to average assets (2)
|
|
2.93%
|
|
2.92%
|
|
2.93%
|
|
3.03%
|
Efficiency ratio
(5)
|
|
|
|
|
|
69.96%
|
|
76.80%
|
|
72.80%
|
|
80.54%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Certain amounts for
prior periods were reclassified to conform to the September 30,
2016 presentation. The reclassifications had no effect on net
income or equity as previously reported.
|
(2)
|
Ratios are
annualized.
|
(3)
|
Represents the
difference between the weighted average yield on average
interest-earning assets and the weighted average cost on average
interest-bearing liabilities. Yields on tax-exempt securities have
been included on a tax-equivalent basis using a 34% federal
marginal tax rate.
|
(4)
|
Represents net
interest income as a percent of average interest-earning assets.
Yields on tax-exempt securities have been included on a
tax-equivalent basis using a 34% federal marginal tax
rate.
|
(5)
|
Represents
noninterest expenses divided by the sum of net interest income on a
tax-equivalent basis using a 34% federal marginal tax rate and
noninterest income, excluding realized gains and losses on the sale
of securities.
|
Quarterly Earnings
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Month
Periods Ended
|
(Dollars in
thousands,
|
|
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
except per share
data)
|
|
|
|
2016
|
|
2016
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement
Data:
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income
|
|
$
6,982
|
|
$
6,755
|
|
$
6,677
|
|
$
6,533
|
|
$
6,459
|
Interest
expense
|
|
|
|
871
|
|
854
|
|
844
|
|
867
|
|
877
|
Net interest
income
|
|
|
|
6,111
|
|
5,901
|
|
5,833
|
|
5,666
|
|
5,582
|
Provision for
(recovery of) loan losses
|
|
(92)
|
|
104
|
|
399
|
|
(89)
|
|
191
|
Net interest income
after provision for
|
|
|
|
|
|
|
|
|
|
|
(recovery of)
loan losses
|
|
|
6,203
|
|
5,797
|
|
5,434
|
|
5,755
|
|
5,391
|
Noninterest
income
|
|
|
|
2,290
|
|
2,476
|
|
2,049
|
|
1,847
|
|
2,084
|
Noninterest
expenses
|
|
|
|
5,861
|
|
5,637
|
|
5,761
|
|
5,921
|
|
5,837
|
Income before
income
|
|
|
|
|
|
|
|
|
|
|
|
|
tax
provision
|
|
|
|
2,632
|
|
2,636
|
|
1,722
|
|
1,681
|
|
1,638
|
Income tax
provision
|
|
|
|
907
|
|
940
|
|
601
|
|
735
|
|
496
|
Net income
|
|
|
|
|
|
$
1,725
|
|
$
1,696
|
|
$
1,121
|
|
$
946
|
|
$
1,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Per Common
Share:
|
|
|
|
|
|
|
|
|
|
|
Net income per share
– Basic
|
|
$
0.51
|
|
$
0.47
|
|
$
0.31
|
|
$
0.25
|
|
$
0.29
|
Net income per share
– Diluted
|
|
$
0.48
|
|
$
0.45
|
|
$
0.30
|
|
$
0.24
|
|
$
0.28
|
Book value per
share
|
|
|
|
$
24.12
|
|
$
23.80
|
|
$
23.10
|
|
$
22.50
|
|
$
22.41
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
3,422,798
|
|
3,602,449
|
|
3,578,367
|
|
3,769,438
|
|
3,947,445
|
Diluted
|
|
|
|
|
|
3,573,937
|
|
3,742,458
|
|
3,720,127
|
|
3,931,470
|
|
4,079,029
|
Ending shares
outstanding
|
|
|
3,787,322
|
|
3,987,322
|
|
3,985,475
|
|
3,985,475
|
|
4,405,266
|
Quarterly
Financial Condition Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
As
Of
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
(Dollars in
thousands)
|
|
|
|
2016
|
|
2016
|
|
2016
|
|
2015 (1)
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
Total assets
(2)
|
|
|
|
$
797,240
|
|
$
805,568
|
|
$
783,523
|
|
$
782,853
|
|
$
797,386
|
Cash and cash
equivalents
|
|
|
44,752
|
|
51,561
|
|
37,091
|
|
33,401
|
|
55,765
|
Investment
securities
|
|
|
|
110,035
|
|
110,869
|
|
122,374
|
|
141,364
|
|
138,459
|
Loans receivable, net
of deferred fees
|
|
597,935
|
|
606,212
|
|
595,832
|
|
576,087
|
|
569,085
|
Allowance for loan
losses
|
|
|
|
(6,464)
|
|
(6,583)
|
|
(6,722)
|
|
(6,289)
|
|
(6,297)
|
Deposits
|
|
|
|
|
|
642,603
|
|
640,685
|
|
628,415
|
|
630,904
|
|
635,083
|
Core deposits
(3)
|
|
|
|
510,842
|
|
505,438
|
|
500,330
|
|
495,628
|
|
489,519
|
FHLB
advances
|
|
|
|
50,000
|
|
50,000
|
|
50,000
|
|
50,000
|
|
50,000
|
Total
equity
|
|
|
|
|
|
91,343
|
|
94,907
|
|
92,064
|
|
89,682
|
|
98,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory Capital
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital
|
|
15.92%
|
|
16.41%
|
|
16.65%
|
|
16.66%
|
|
18.33%
|
Tier 1 leverage
capital
|
|
|
|
11.97%
|
|
12.43%
|
|
12.33%
|
|
11.87%
|
|
13.09%
|
Tier 1 risk-based
capital
|
|
|
|
15.92%
|
|
16.41%
|
|
16.65%
|
|
16.66%
|
|
18.33%
|
Total risk-based
capital
|
|
|
|
16.99%
|
|
17.50%
|
|
17.81%
|
|
17.77%
|
|
19.44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
loans
|
|
|
|
$
1,237
|
|
$
2,481
|
|
$
2,362
|
|
$
2,548
|
|
$
2,815
|
Nonperforming
assets
|
|
|
|
6,001
|
|
7,274
|
|
7,959
|
|
8,194
|
|
11,686
|
Nonperforming loans
to total loans
|
|
0.21%
|
|
0.41%
|
|
0.40%
|
|
0.44%
|
|
0.49%
|
Nonperforming assets
to total assets
|
|
0.75%
|
|
0.90%
|
|
1.02%
|
|
1.05%
|
|
1.47%
|
Allowance for loan
losses
|
|
|
|
$
6,464
|
|
$
6,583
|
|
$
6,722
|
|
$
6,289
|
|
$
6,297
|
Allowance for loan
losses to total loans
|
|
1.08%
|
|
1.09%
|
|
1.13%
|
|
1.09%
|
|
1.11%
|
Allowance for loan
losses to
|
|
|
|
|
|
|
|
|
|
|
nonperforming
loans
|
|
|
|
522.55%
|
|
265.34%
|
|
284.59%
|
|
246.82%
|
|
223.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived
from audited consolidated financial statements.
|
(2) Certain
amounts for prior periods were reclassified to conform to the
September 30, 2016 presentation. The
|
reclassifications had no effect on net income or equity as
previously reported.
|
(3) Core
deposits are defined as total deposits excluding certificates of
deposit.
|
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SOURCE ASB Bancorp, Inc.