Access National Corporation CORRECTS the fully tax
equivalent (non-GAAP) net interest margin found in the fourth
paragraph following “Highlights” and found on the tables titled
“Performance and Capital Ratios” and “Reconciliation of Non-GAAP
Financial Measures” in release dated October 25, 2017.
The paragraph should read:
The net interest margin on a fully tax equivalent (non-GAAP)
basis decreased to 3.86% from 3.97% when comparing third quarter to
second quarter 2017. Third quarter net interest margin on a fully
tax equivalent (non-GAAP) basis exclusive of the $1.2 million
credit mark accretion for the acquired loan portfolio and the $19
thousand in liability discount amortization was 3.68% for the three
months ended September 30, 2017.
The figures in the referenced tables should read:
Performance and Capital Ratios
Three Months Three Months Three Months
Nine Months Nine Months Twelve Months
Ended Ended Ended Ended Ended
Ended September 30, June 30, March 31,
September 30, September 30, December 31,
(Dollars In Thousands)
2017
2017 2017 2017
2016 2016 Net interest margin - fully tax
equivalent basis (1)
3.86
%
3.97
%
3.52
%
3.91
%
3.55
%
3.55
%
Reconciliation of Non-GAAP Financial
Measures
Three Months
Three Months Three Months Nine Months Nine
Months Twelve Months Ended Ended
Ended Ended Ended Ended September
30, June 30, March 31, September 30,
September 30, December 31, (Dollars In Thousands)
2017 2017 2017
2017 2016 2016 Net interest
margin 3.76 % 3.91 % 3.46 % 3.84 %
3.54 % 3.52 % Effect of tax exempt securities and
loans
0.10
%
0.06
%
0.06
%
0.07
%
0.01
%
0.03
% Net interest margin - fully tax equivalent basis
3.86
%
3.97
%
3.52
%
3.91
%
3.55
%
3.55
%
The correct release reads:
ACCESS NATIONAL ANNOUNCES THIRD QUARTER 2017
EARNINGS
Access National Corporation (NASDAQ: ANCX) (the
“Corporation” or “Access”), parent company for Access National Bank
(the “Bank”) and Middleburg Investment Group, reported third
quarter 2017 net income of $7.0 million, or $0.34 per diluted
share. Excluding merger related one-time charges and impairment
charges, net income was $8.62 million or $0.42 per diluted share.
This represents the Corporation’s 69th consecutive quarterly profit
over its 71 quarter history. Consistent with management’s stated
objective of a 40% to 50% dividend payout ratio against core
earnings, the Board of Directors declared a dividend of $0.15 per
share for common shareholders of record as of November 9, 2017 and
payable on November 24, 2017.
Highlights
- Strategic merger with Middleburg
Financial Corporation (NASDAQ: MBRG) closed on schedule April 1,
2017 and data/office integrations completed on schedule as of
August 4, 2017;
- Reported third quarter earnings of $7.0
million or $0.34 per diluted share. Excluding $993 thousand in
pre-tax merger related costs ($646 thousand after-tax and $0.03 per
diluted share) and $1.5 million of pre-tax impairment charges ($969
thousand after-tax and $0.05 per diluted share), earnings were $8.6
million or $0.42 per diluted share;
- Tangible book value1 per common share
was $11.64 at September 30, 2017, an increase of $0.32 from the
prior period after considering merger costs;
- Loans held for investment were $1.97
billion at September 30, 2017 compared to $967 million at September
30, 2016, a year-over-year growth of 204.0%. Linked quarter growth
was $43.0 million or 8.9% annualized; and
- Non-interest bearing demand deposits of
$711 million were 31.1% of total deposits at September 30, 2017
compared to $410 million at September 30, 2016, a year-over-year
growth of 173.5%.
The transformative combination of Access National with
Middleburg Financial continues on a successful progression. “While
the recent quarter contained many integration related distractions,
we are pleased to report meaningful organic growth in loans and
core deposits that generate long-term value. The positive migration
of the acquired customer base is best reflected in the deposit
growth and composition. We will continue to sharpen our retail
focus on the consumer market that values a relationship based
approach to private banking,” said Michael Clarke, President and
Chief Executive Officer of Access. He continued, “While realization
of expected cost savings is choppy, we remain confident in
fulfilling our objectives for 2017 and 2018 such that we meet or
exceed EPS accretion estimates in 2018 and beyond.”
Third quarter 2017 pre-tax earnings were $9.4 million, up $3.5
million from second quarter 2017, and included pre-tax merger
related costs of $993 thousand. The commercial banking segment’s
net interest income grew $294 thousand when compared to the second
quarter of 2017 while other revenues grew by $274 thousand due
mainly to an increase in miscellaneous loan fees. An increase in
the commercial banking segment’s other expense of $802 thousand
when compared to the second quarter of 2017 was due mainly to
accelerated amortization on abandoned leasehold improvements
related to branch restructuring, and was complimented by a decrease
in salaries and employee benefits of $906 thousand when compared to
the second quarter of 2017.
The earnings and balance sheet impact of departed wealth
services personnel and loss of select underpriced accounts was
reflected in the current quarter’s financial results. When
comparing the third quarter of 2017 to the second quarter of 2017,
the wealth services segment saw a $206 thousand decrease in revenue
as well as a $359 thousand decrease in salaries and employee
benefits which was offset by an increase in operating expenses of
$1.4 million due to a $1.5 million impairment of goodwill connected
with the unprofitable operations of the legacy Access segment.
While management believes the full impact from these changes is
reflected in this reporting period, continued analysis of goodwill
impairment will be made to determine if the complete write-off
remains warranted and will make any recapture adjustments in the
fourth quarter. According to Access CEO Michael Clarke, “The loss
of subject wealth services personnel and related accounts enables a
sharper focus of the organization on the go-forward strategy,
closely aligning the marketing and delivery of wealth and banking
services to a common target market. The leadership of Middleburg
Investment Group and the expanded capabilities resulting from the
merger are enhancing the client value proposition in a way that
management expects will produce consistent and growing fee income
in future periods.”
The net interest margin on a fully tax equivalent (non-GAAP)
basis decreased to 3.86% from 3.97% when comparing third quarter to
second quarter 2017. Third quarter net interest margin on a fully
tax equivalent (non-GAAP) basis exclusive of the $1.2 million
credit mark accretion for the acquired loan portfolio and the $19
thousand in liability discount amortization was 3.68% for the three
months ended September 30, 2017.
Total assets were $2.9 billion at September 30, 2017, up from
$2.8 billion at June 30, 2017 due mainly to growth in the
interest-bearing balances of $70.3 million and loans held for
investment portfolio of $40.3 million. Organic growth in loans held
for investment was $42.7 million on a linked quarter basis due
mainly to growth in commercial real estate.
Total deposits at September 30, 2017 were $2.3 billion, an
increase of $99.0 million when compared to June 30, 2017. At
September 30, 2017, non-interest bearing deposits, which represent
31.1% of the deposit portfolio, were $710.7 million, an increase of
$50.2 million from the linked quarter. While non-interest bearing
demand deposits remain the largest and most attractive source of
funding for the Corporation, the combination of legacy Middleburg’s
significant low cost interest-bearing demand deposits and legacy
Access’ non-interest bearing demand deposits accounted for $1.2
billion or 52.6% of total deposits at September 30, 2017.
Interest-bearing deposits totaled $1.6 billion at September 30,
2017, an increase of $48.8 million from the prior quarter. Brokered
deposits as a percentage of the deposit portfolio decreased quarter
over quarter, from 4.6% of the portfolio at June 30, 2017 to 3.1%
at September 30, 2017. The go-forward strategy places a high
priority on the maintenance and expansion of core deposits,
particularly high value demand deposit relationships.
Non-performing assets (“NPAs”) decreased to $7.8 million at
September 30, 2017 from $9.0 million at June 30, 2017, representing
0.27% and 0.32% of total assets, respectively. Included in the NPAs
total is $2.0 million in other real estate owned. The allowance for
loan loss was $15.7 million and $14.7 million at September 30, 2017
and June 30, 2017, respectively, and represented 0.80% and 0.76% of
total loans held for investment at September 30, 2017 and June 30,
2017, respectively. The remaining credit and fair value marks on
the loans acquired in the merger totaled $13.1 million at September
30, 2017.
Tangible book value2 per common share increased from $11.32 at
June 30, 2017 to $11.64 at September 30, 2017. The tangible common
equity ratio for Access National Corporation and its subsidiary
bank was 8.85% at September 30, 2017, within the Corporation’s
target range of 8.00% to 10.50%.
Access National Corporation is the parent company of Access
National Bank and Middleburg Investment Group serving Northern and
Central Virginia. Additional information is available on our
website at www.AccessNationalBank.com. Shares of Access National
Corporation are traded on the NASDAQ Global Market under the symbol
"ANCX".
Forward-Looking Statements
The information presented herein contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 regarding expectations or predictions of future
financial or business performance or conditions. Forward-looking
statements may be identified by words such as "may," "could,"
"will," "expect," "believe," "anticipate," "forecast," "intend,"
"plan," "prospects," "estimate," "potential," or by variations of
such words or by similar expressions. These forward-looking
statements are subject to numerous assumptions, risks and
uncertainties which change over time. Forward-looking statements in
this report may include, but are not limited to, statements about
projected impacts of and financial results generated by the merger
of Access and Middleburg Financial Corporation (“Middleburg”).
Forward-looking statements speak only as of the date they are made
and Access assumes no duty to update forward-looking
statements.
In addition to factors previously disclosed in Access's reports
filed with the SEC and those identified elsewhere in this release,
the following factors, among others, could cause actual results to
differ materially from the results expressed in or implied by
forward-looking statements and historical performance: changes in
asset quality and credit risk; changes in interest rates and
capital markets; the introduction, timing and success of business
initiatives; competitive conditions; and the inability to recognize
cost savings or revenues or to implement integration plans
associated with the merger of Access and Middleburg.
______________
1 Non-GAAP financial information. See “Reconciliation of
Non-GAAP Financial Measures” at end of release. 2 Non-GAAP
financial information. See “Reconciliation of Non-GAAP Financial
Measures” at end of release.
Access
National Corporation Consolidated Balance Sheet
September 30, December
31, September 30, 2017 2016 2016 (In Thousands Except for Share and
Per Share Data) (Unaudited) (Audited)
(Unaudited)
ASSETS Cash and due from banks $
12,774 $ 9,186 $ 14,109 Interest-bearing balances and
federal funds sold 117,159 81,873 67,801 Investment
securities: Available-for-sale, at fair value 395,040 194,090
190,265 Held-to-maturity, at amortized cost (fair value of $16,416,
$9,293 and $9,475) 15,778 9,200
9,214 Total investment securities 410,818 203,290 199,479
Restricted Stock, at amortized cost 14,447 10,092 6,309
Loans held for sale - at fair value 26,234 35,676 70,998
Loans held for investment net of allowance
for loan losses of $15,692, $16,008 and $14,696, respectively
1,953,968 1,033,690 951,849 Premises, equipment and land,
net 26,400 7,084 6,875 Goodwill and intangible assets
182,156 1,833 1,845 Other assets 129,113 47,984 43,573
Total assets $ 2,873,069 $ 1,430,708
$ 1,362,838
LIABILITIES AND SHAREHOLDERS'
EQUITY LIABILITIES Noninterest-bearing deposits $
710,691 $ 362,036 $ 409,558 Interest-bearing demand deposits
490,759 126,189 134,858 Savings and interest-bearing
deposits 658,799 314,396 302,007 Time deposits
425,963 251,706 268,630 Total
deposits 2,286,212 1,054,327 1,115,053 Short-term borrowings
79,527 186,009 41,336 Long-term borrowings 60,000 60,000
75,000 Trust preferred debentures 3,863 - - Other
liabilities and accrued expenses 23,294 9,842 10,118
Total Liabilities 2,452,896 1,310,178
1,241,507
SHAREHOLDERS' EQUITY
Common stock $0.835 par value; 60,000,000
authorized; issued and outstanding, 20,449,738, 10,636,242 and
10,610,279, respectively
17,076 8,881 8,860 Additional paid in capital 305,682 21,779
21,159 Retained earnings 98,607 91,439 90,026
Accumulated other comprehensive income (loss), net (1,192 ) (1,569
) 1,286 Total shareholders' equity
420,173 120,530 121,331
Total liabilities and shareholders' equity $ 2,873,069
$ 1,430,708 $ 1,362,838
Access
National Corporation Consolidated Statement of
Operations Three Months Ended
Nine Months Ended September 30, 2017 September
30, 2016 September 30, 2017 September 30, 2016 (In
Thousands Except for Share and Per Share Data)
(unaudited) (unaudited)
INTEREST INCOME
Interest and fees on loans $ 24,306 $ 11,647 $ 60,251 $ 33,877
Interest on federal funds sold and bank balances 394 98 746
264 Interest and dividends on securities 2,992
1,033 7,388 2,954 Total interest income 27,692 12,778
68,385 37,095
INTEREST EXPENSE Interest on deposits
2,639 1,349 6,560 3,774 Interest on other borrowings
459 286 1,366 867 Total interest expense
3,098 1,635 7,926 4,641 Net interest
income 24,594 11,143 60,459 32,454 Provision for loan losses
900 750 3,200 870 Net interest income
after provision for loan losses 23,694 10,393 57,259 31,584
NONINTEREST INCOME Service charges and fees 560 249 1,509
748 Gain on sale of loans 5,594 8,316 14,985 19,419
Other Income 2,369 120 6,917 4,510
Total noninterest income 8,523 8,685 23,411 24,677
NONINTEREST EXPENSE Salaries and benefits 11,100 8,208
31,800 24,283 Occupancy and equipment 3,019 768 5,820 2,278
Other operating expense 8,674 3,193
23,594 9,040 Total noninterest expense 22,793
12,169 61,214 35,601 Income before income tax 9,424
6,909 19,456 20,660 Income tax expense 2,422
2,484 6,001 7,262
NET INCOME 7,002
4,425 13,455 13,398 Earnings per common
share: Basic $ 0.34 $ 0.42 $ 0.77 $ 1.27 Diluted $ 0.34 $ 0.41 $
0.77 $ 1.26 Average outstanding shares: Basic 20,409,696
10,595,599 17,156,521 10,575,088 Diluted 20,508,875 10,689,167
17,273,367 10,644,897
Performance and Capital
Ratios Three Months Three
Months Three Months Nine Months
Nine Months Twelve Months Ended
Ended Ended Ended Ended Ended
September 30, June 30, March 31, September
30, September 30, December 31, (Dollars In
Thousands)
2017 2017 2017
2017 2016 2016
Return on average assets (annualized) 0.96 % 0.55 % 0.74 % 0.75 %
1.41 % 1.27 % Return on average equity (annualized) 6.69 % 3.73 %
8.57 % 4.72 % 15.56 % 14.11 % Return on average tangible equity
(annualized) (1) 11.89 % 6.73 % 8.70 % 6.96 % 15.81 % 14.33 % Net
interest margin - fully tax equivalent basis (1)
3.86
%
3.97
%
3.52
%
3.91
%
3.55
%
3.55
% Net interest margin 3.76 % 3.91 % 3.46 % 3.84 % 3.54 % 3.52 %
Efficiency ratio - Bank only 57.56 % 59.23 % 53.26 % 57.41 % 50.48
% 49.59 % Total average equity to earning assets 16.00 % 16.68 %
8.99 % 18.10 % 9.38 % 9.36 % Tangible common equity ratio (1) 8.85
% 8.97 % 8.65 % 8.85 % 8.78 % 8.31 %
Averages Assets
$ 2,922,105 $ 2,789,088 $ 1,401,652 $ 2,396,103 $ 1,267,482 $
1,288,582 Loans held for investment 2,002,842 1,896,824 1,052,167
1,614,893 922,821 939,837 Loans held for sale 28,734 28,254 24,461
27,165 47,935 47,060 Interest-bearing deposits & federal funds
sold 136,222 121,572 64,628 103,360 69,860 67,457 Investment
securities 437,628 422,792 209,533 343,360 184,479 189,585 Earning
assets 2,617,443 2,471,036 1,353,360 2,101,947 1,223,798 1,242,923
Interest-bearing deposits 1,566,286 1,523,997 761,075 1,257,364
648,844 662,271 Total deposits 2,277,759 2,163,567 1,096,309
1,810,139 998,183 1,021,624 Repurchase agreements & federal
funds purchased 58,149 53,949 28,369 46,209 15,433 16,270 FHLB
short term borrowings 59,697 57,824 86,200 67,774 58,467 56,522
FHLB long-term borrowings 82,790 79,892 59,556 73,040 71,332 68,525
Trust Preferred debt 3,029 3,824 - 2,289 - - Equity $ 418,678 $
412,146 $ 121,724 $ 380,378 $ 114,838 $ 116,296 Tangible equity (1)
$ 235,526 $ 228,480 $ 119,896 $ 257,919 $ 112,973 $ 114,437
Allowance for loan losses $ 15,692 $ 14,671 $ 13,727 $ 15,692 $
14,696 $ 16,008 Allowance for loan losses/loans held for investment
0.80 % 0.76 % 1.28 % 0.80 % 1.52 % 1.53 % Remaining fair value
marks on purchased performing loans $ 12,444 $ 13,584 NA $ 12,444
NA NA Purchased credit impaired loans $ 5,184 $ 7,237 NA $ 5,184 NA
NA Remaining fair value marks on purchased credit impaired loans $
694 $ 2,296 NA $ 694 NA NA Total NPA $ 7,817 $ 8,954 $ 5,244 $
7,817 $ 5,845 $ 6,922 NPA to total assets 0.27 % 0.32 % 0.37 % 0.27
% 0.43 % 0.48 % Mortgage loan originations and brokered
loans $ 107,706 $ 116,958 $ 94,500 $ 319,164 $ 429,418 $ 544,866
Gain on sale of mortgage loans net hedging activity $ 5,371 $
10,792 $ 3,416 $ 14,208 $ 16,936 $ 23,835 Allowance for losses on
mortgage loans sold $ 987 $ 1,029 $ 1,029 $ 987 $ 1,029 $ 1,029
Wealth Services segment - assets under management $
1,935,780 $ 1,927,629 $ 676,865 $ 1,935,780 $ 655,000 $ 667,300
Book value per common share $ 20.55 $ 20.36 $ 11.40 $ 20.55
$ 11.44 $ 11.33 Tangible book value per common share (1) $
11.64 $ 11.32 $ 11.23 $ 11.64 $ 11.26 $ 11.16
(1) Non-GAAP financial information. See
"Reconciliation of Non-GAAP Financial Measures" at end of release.
Composition of Loan Portfolio
September 30, 2017 June 30, 2017
March 31, 2017 December 31, 2016
September 30, 2016 (Dollars In Thousands)
Amount Percentage of Total
Amount Percentage of Total
Amount Percentage of Total
Amount Percentage of Total
Amount Percentage of Total Commercial
real estate - owner occupied $ 443,128 22.50 % $ 401,853 20.84 % $
262,431 24.46 % $ 250,440 23.87 % $ 238,224 24.65 % Commercial real
estate - non-owner occupied 435,181 22.09 377,037 19.55 205,452
19.15 184,688 17.59 174,342 18.04 Residential real estate 512,621
26.03 525,649 27.26 212,007 19.76 204,413 19.47 202,605 20.96
Commercial 449,450 22.82 476,055 24.69 294,451 27.45 311,486 29.67
264,794 27.40 Real estate construction 104,193 5.29 124,186 6.44
91,614 8.54 91,822 8.75 79,621 8.24 Consumer 25,087
1.27 23,565 1.22 6,836
0.64 6,849 0.65 6,959
0.71
Total loans $ 1,969,660 100.00 % $ 1,928,345
100.00 % $ 1,072,791 100.00 % $ 1,049,698 100.00 % $ 966,545 100.00
% Less allowance for loan losses 15,692 14,671
13,727 16,008 14,696 $ 1,953,968 $ 1,913,674 $
1,059,064 $ 1,033,690 $ 951,849
Composition of Deposits
September 30, 2017
June 30, 2017 March 31, 2017
December 31, 2016 September 30, 2016 (Dollars
In Thousands)
Amount Percentage of
Total Amount Percentage of Total
Amount Percentage of Total
Amount Percentage of Total
Amount Percentage of Total Demand
deposits $ 710,691 31.09 % $ 660,481 30.20 % $ 376,674 32.56 % $
362,036 34.34 % $ 409,558 36.73 % Interest-bearing demand deposits
480,620 21.02 454,675 20.79 141,981 12.27 126,189 11.97 124,856
11.20 Savings and money market 616,596 26.97 562,581 25.72 284,182
24.56 270,310 25.64 265,308 23.79 CDARS time deposits 37,836 1.65
39,746 1.82 41,369 3.58 34,290 3.25 36,948 3.31 CDARS/ICS
non-maturity deposits 47,219 2.07 44,009 2.01 42,960 3.71 40,925
3.88 46,156 4.14 Brokered deposits 71,090 3.11 101,419 4.64 110,254
9.53 57,389 5.44 68,483 6.14 Time deposits 322,160
14.09 324,295 14.82
159,570 13.79 163,188
15.48 163,744 14.69 Total
Deposits $ 2,286,212 100.00 % $ 2,187,206
100.00 % $ 1,156,990 100.00 % $ 1,054,327
100.00 % $ 1,115,053 100.00 %
Yield on Average Earning Assets and Rates on Average
Interest-Bearing Liabilities Three Months Ended
September 30, 2017
September 30, 2016
Average
Income / Yield / Average
Income /
Yield /
(Dollars In Thousands)
Balance
Expense Rate Balance
Expense
Rate
Assets: Interest-earning assets: Securities $
449,645 $ 2,992 2.66 % $ 191,794 $ 1,033 2.15 % Loans held for sale
28,734 299 4.16 % 63,667 574 3.61 % Loans(1) 2,002,842 24,007 4.79
% 947,622 11,073 4.67 % Interest-bearing balances and federal funds
sold 136,222 394 1.16 %
72,680 98 0.54 %
Total
interest-earning assets 2,617,443 27,692 4.23 %
1,275,763 12,778 4.01 %
Noninterest-earning
assets: Cash and due from banks 36,260 13,251 Premises, land
and equipment 30,382 6,819 Other assets 253,424 42,642 Less:
allowance for loan losses (15,404 ) (13,964 )
Total noninterest-earning assets 304,662
48,748 Total Assets $
2,922,105 $ 1,324,511
Liabilities and Shareholders' Equity: Interest-bearing
deposits: Interest-bearing demand deposits $ 483,370 $ 412 0.34
% $ 137,387 $ 127 0.37 % Money market deposit accounts 435,241 821
0.75 % 224,548 257 0.46 % Savings accounts 199,109 90 0.18 % 37,892
47 0.50 % Time deposits 448,566 1,316
1.17 % 277,014 918 1.33 %
Total interest-bearing deposits 1,566,286
2,639 0.67 %
676,841 1,349 0.80 %
Borrowings: FHLB short-term borrowings and subordinated debt
62,726 242 1.54 % 38,043 69 0.73 % Securities sold under agreements
to repurchase and federal funds purchased 58,149 16 0.11 % 14,881 4
0.11 % FHLB long-term borrowings 82,790
201 0.97 % 75,000 213
1.14 %
Total borrowings 203,665
459 0.90 %
127,924
286 0.89 %
Total interest-bearing deposits
and borrowings 1,769,951 3,098 0.70 %
804,765 1,635 0.81 %
Noninterest-bearing
liabilities: Demand deposits 711,474 390,997 Other liabilities
22,002 10,095
Total liabilities
2,503,427 1,205,857 Shareholders' Equity
418,678 118,654
Total Liabilities and
Shareholders' Equity $ 2,922,105 $
1,324,511 Interest Spread(2) 3.53 % 3.19 %
Net Interest Margin(3) $ 24,594 3.76 % $ 11,143
3.49 %
(1) Loans placed on nonaccrual status are
included in loan balances.
(2) Interest spread is the average yield
earned on earning assets, less the average rate incurred on
interest-bearing liabilities.
(3) Net interest margin is net interest
income, expressed as a percentage of average earning assets.
Yield on Average Earning Assets and Rates on
Average Interest-Bearing Liabilities Nine Months Ended
September 30, 2017
September 30, 2016 Average
Income / Yield / Average
Income / Yield / (Dollars In Thousands)
Balance Expense Rate
Balance Expense Rate
Assets: Interest-earning assets: Securities $ 354,529
$ 7,388 2.78 % $ 183,182 $ 2,954 2.15 % Loans held for sale 27,165
846 4.15 % 47,935 1,355 3.77 % Loans(1) 1,614,893 59,405 4.90 %
922,821 32,522 4.70 % Interest-bearing balances and federal funds
sold 105,360 746 0.94 %
69,860 264 0.50 %
Total
interest-earning assets 2,101,947
68,385 4.34 %
1,223,798 37,095 4.04 %
Noninterest-earning
assets: Cash and due from banks 21,552 12,493 Premises, land
and equipment 21,692 6,782 Other assets 265,578 38,142 Less:
allowance for loan losses (14,666 ) (13,733 )
Total noninterest-earning assets 294,156
43,684 Total Assets $ 2,396,103
$ 1,267,482 Liabilities and
Shareholders' Equity: Interest-bearing deposits:
Interest-bearing demand deposits $ 352,647 $ 910 0.34 % $ 131,859 $
360 0.36 % Money market deposit accounts 352,525 1,644 0.62 %
185,839 522 0.37 % Savings accounts 146,773 392 0.36 % 35,047 137
0.52 % Time deposits 405,419 3,614
1.19 % 296,099 2,755 1.24
%
Total interest-bearing deposits 1,257,364
6,560
0.70 %
648,844 3,774 0.78 %
Borrowings: FHLB
short-term borrowings and subordinated debt 70,063 739 1.41 %
58,467 280 0.64 % Securities sold under agreements to repurchase
and federal funds purchased 46,209 58 0.17 % 15,433 11 0.10 % FHLB
long-term borrowings 73,040 569
1.04 % 71,332 576 1.08 %
Total borrowings 189,312
1,366 0.96 %
145,232
867 0.80 %
Total interest-bearing deposits
and borrowings 1,446,676
7,926 0.73 %
794,076
4,641 0.78 %
Noninterest-bearing liabilities: Demand
deposits 552,775 349,339 Other liabilities 16,274
9,229
Total liabilities 2,015,725
1,152,644 Shareholders' Equity 380,378
114,838
Total Liabilities and Shareholders' Equity $
2,396,103
$ 1,267,482 Interest
Spread(2) 3.61 % 3.26 % Net Interest Margin(3) $ 60,459
3.84 % $ 32,454 3.54 %
(1) Loans placed on nonaccrual status are included in loan
balances.
(2) Interest spread is the average yield
earned on earning assets, less the average rate incurred on
interest-bearing liabilities.
(3) Net interest margin is net interest income, expressed as a
percentage of average earning assets.
Segment Reporting
Three Months Ended Commercial Mortgage
Trust & Wealth Consolidated September 30,
2017 Banking Banking Management
Other Eliminations Totals (In
Thousands) Revenues: Interest income $ 27,429 $ 299 $ 4 $ 5 $ (45 )
$ 27,692 Gain on sale of loans - 5,594 - - - 5,594 Other revenues
1,977 (740 ) 1,617 312
(237 ) 2,929 Total revenues 29,406
5,153 1,621 317 (282 )
36,215 Expenses: Interest expense 3,072 (25 ) - 96
(45 ) 3,098 Salaries and employee benefits 7,334 2,898 868 - -
11,100 Other expenses 8,724 1,149 1,850
1,107 (237 ) 12,593 Total
operating expenses 19,130 4,022 2,718
1,203 (282 ) 26,791
Income (loss) before income taxes $ 10,276 $ 1,131 $ (1,097
) $ (886 ) $ - $ 9,424 Total assets $ 2,810,037
$ 26,485 $ 41,002 $ 19,756
$ (24,211 ) $ 2,873,069
Three Months
Ended Commercial Mortgage Wealth
Consolidated September 30, 2016 Banking
Banking Management Other
Eliminations Totals (In Thousands) Revenues: Interest
income $ 12,531 $ 574 $ - $ 5 $ (332 ) $ 12,778 Gain on sale of
loans - 8,316 - - - 8,316 Other revenues 682 (1,060 )
773 289 (315 ) 369 Total
revenues 13,213 7,830 773
294 (647 ) 21,463 Expenses: Interest
expense 1,640 261 - 66 (332 ) 1,635 Salaries and employee benefits
3,977 3,664 567 - - 8,208 Other expenses 2,578 1,491
233 724 (315 )
4,711 Total operating expenses 8,195 5,416
800 790 (647 ) 14,554
Income (loss) before income taxes $ 5,018 $ 2,414 $
(27 ) $ (496 ) $ - $ 6,909 Total assets $ 1,290,518 $
74,195 $ 2,894 $ 18,420 $ (23,189 ) $
1,362,838
Segment Reporting
Nine Months Ended
Commercial Mortgage Trust & Wealth
Consolidated September 30, 2017 Banking
Banking Management Other Eliminations
Totals (In Thousands) Revenues: Interest income $ 67,740 $
846 $ 7 $ 17 $ (225 ) $ 68,385 Gain on sale of loans - 14,985 - - -
14,985 Other revenues 4,445 (306 ) 4,195
975 (883 ) 8,426 Total revenues
72,185 15,525 4,202 992
(1,108 ) 91,796 Expenses: Interest
expense 7,796 18 - 337 (225 ) 7,926 Salaries and employee benefits
19,992 9,122 2,686 - - 31,800 Other expenses 20,173
3,246 2,541 7,537 (883 )
32,614 Total operating expenses 47,961 12,386
5,227 7,874 (1,108 )
72,340 Income (loss) before income taxes $ 24,224 $
3,139 $ (1,025 ) $ (6,882 ) $ - $ 19,456 Total
assets $ 2,810,037 $ 26,485 $ 41,002 $ 19,756
$ (24,211 ) $ 2,873,069
Nine Months Ended
Commercial Mortgage Wealth Consolidated
September 30, 2016 Banking Banking
Management Other Eliminations Totals
(In Thousands) Revenues: Interest income $ 36,379 $ 1,355 $ - $ 15
$ (654 ) $ 37,095 Gain on sale of loans - 19,419 - - - 19,419 Other
revenues 2,908 53 2,269
978 (950 ) 5,258 Total revenues 39,287
20,827 2,269 993
(1,604 ) 61,772 Expenses: Interest expense 4,656 439
- 200 (654 ) 4,641 Salaries and employee benefits 12,065 10,563
1,655 - - 24,283 Other expenses 6,285 4,127
783 1,943 (950 ) 12,188
Total operating expenses 23,006 15,129
2,438 2,143 (1,604 ) 41,112
Income (loss) before income taxes $ 16,281 $ 5,698 $
(169 ) $ (1,150 ) $ - $ 20,660 Total assets $
1,290,518 $ 74,195 $ 2,894 $ 18,420 $ (23,189
) $ 1,362,838
Reconciliation of Non-GAAP Financial
Measures
The press release contains certain financial information
determined by methods other than in accordance with generally
accepted accounting policies in the United States (GAAP). These
non-GAAP financial measures are “tangible book value per common
share”, “tangible common equity ratio”, and “net interest margin on
a fully tax equivalent basis.” This non-GAAP disclosure has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for analysis of the Corporation’s
results as reported under GAAP, nor is it necessarily comparable to
non-GAAP performance measures that may be presented by other
companies. Our management uses these non-GAAP measures in its
analysis of our performance because it believes these measures are
material and will be used as a measure of our performance by
investors.
Three Months
Three Months Three Months Nine Months Nine
Months Twelve Months Ended Ended
Ended Ended Ended Ended September
30, June 30, March 31, September 30,
September 30, December 31, (Dollars In Thousands)
2017 2017 2017
2017 2016 2016
Book value per common share $ 20.55 $ 20.36 $ 11.40 $ 20.55 $ 11.44
$ 11.33 Effect of intangible assets $ (8.91 ) $ (9.04 ) $ (0.17 ) $
(8.91 ) $ (0.18 ) $ (0.17 ) Tangible book value per common share $
11.64 $ 11.32 $ 11.23 $ 11.64 $ 11.26 $ 11.16 Common equity
ratio 14.62 % 15.05 % 8.77 % 14.62 % 8.90 % 8.42 % Effect of
intangible assets -5.77 % -6.08 % -0.12 % -5.77 % -0.12 % -0.11 %
Tangible common equity ratio 8.85 % 8.97 % 8.65 % 8.85 % 8.78 %
8.31 % Net interest margin 3.76 % 3.91 % 3.46 % 3.84 % 3.54
% 3.52 % Effect of tax exempt securities and loans
0.10
%
0.06
%
0.06
%
0.07
%
0.01
%
0.03
% Net interest margin - fully tax equivalent basis
3.86
%
3.97
%
3.52
%
3.91
%
3.55
%
3.55
% Return on average equity 6.69 % 3.73 % 8.57 % 4.72 % 15.56
% 14.11 % Effect of intangible assets 5.20 % 3.00 % 0.13 % 2.24 %
0.25 % 0.22 % Return on average tangible equity 11.89 % 6.73 % 8.70
% 6.96 % 15.81 % 14.33 % Average equity $ 418,678 $ 412,146
$ 121,724 $ 380,378 $ 114,838 $ 116,296 Effect of average
intangible assets $ 183,152 $ 183,666 $ 1,828 $ 122,459 $ 1,865 $
1,859 Average tangible equity $ 235,526 $ 228,480 $ 119,896 $
257,919 $ 112,973 $ 114,437
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version on businesswire.com: http://www.businesswire.com/news/home/20171025006381/en/
Access National CorporationMichael Clarke, 703-871-2100
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