The Community Financial Corporation (NASDAQ: TCFC) (the “Company”),
the holding company for Community Bank of the Chesapeake (the
“Bank”), today reported its results of operations for the three
months ended March 31, 2021. Net income for the three months
ended March 31, 2021 was $6.3 million, or $1.07 per diluted
common share compared with net income of $6.1 million, or $1.04 per
diluted common share for the fourth quarter of 2020, and net income
of $2.7 million or $0.47 per diluted common share for the quarter
ended March 31, 2020.
Management Commentary
"I am proud of the results our team has
delivered during the prolonged pandemic while remaining committed
to our communities, our shareholders and each other. This was the
second consecutive quarter of record ROAA performance for the
Company, despite these challenging economic conditions," stated
William J. Pasenelli, Chief Executive Officer. "In addition to
delivering strong results during the first quarter, we
significantly reduced nonperforming assets, introduced two new
product lines, continued to optimize our branch and virtual banking
operations, and continued to drive operating efficiency."
During March 2021, the Bank introduced a new
residential mortgage program and retail and commercial credit card
program that merge the technology and expertise of two proven
FinTech firms with our business development team's demonstrated
capabilities. “These two new programs are the result of outstanding
collaboration between our team and two great partners and a great
example of how our community bank can provide local businesses and
consumers best of class FinTech products and services,” stated
James M. Burke, President.
The Bank’s expansion into Virginia has been a
growth engine for the last five years. “Since opening our downtown
Fredericksburg branch in 2016, our lenders and business development
teams have done an incredible job driving deposit and loan growth
in this market,” said William J. Pasenelli, Chief Executive
Officer. “We believe Fredericksburg provides significant
opportunities for continued organic growth supported by our
efficient operating model and ability to leverage technology." At
March 31, 2021, loans in the greater Fredericksburg, Virginia area
accounted for approximately 40% of the Bank's outstanding portfolio
loans, and Fredericksburg branch deposits were $89 million
with an average cost of deposits of six basis points.
On April 21, 2021, the Bank purchased its second
location in Virginia at 5831 Plank Road, Spotsylvania. The
full-service branch is expected to open in late 2021 and will
provide banking, lending and wealth management services with a
focus on digital banking. Effective March 31, 2021, the Bank
consolidated its St. Patrick's Drive branch in Waldorf, Maryland
into the Bank's nearby main office branch. This realignment of our
branches will enable the Company to serve a wider customer base.
The net financial impact of the new Spotsylvania branch and the
closing of the St. Patrick's Drive branch is expected to be neutral
to the Company's expense run rate.
Results of Operations
| |
|
(UNAUDITED) |
|
|
|
|
| |
|
Three Months Ended March 31, |
|
|
|
|
|
(dollars in thousands) |
|
2021 |
|
2020 |
|
$ Change |
|
% Change |
|
Interest and dividend income |
|
$ |
17,678 |
|
|
$ |
18,039 |
|
|
$ |
(361 |
) |
|
(2.0 |
)% |
| Interest expense |
|
1,169 |
|
|
3,686 |
|
|
(2,517 |
) |
|
(68.3 |
)% |
| Net interest income |
|
16,509 |
|
|
14,353 |
|
|
2,156 |
|
|
15.0 |
% |
| Provision for loan losses |
|
295 |
|
|
4,100 |
|
|
(3,805 |
) |
|
(92.8 |
)% |
| Noninterest income |
|
2,360 |
|
|
2,121 |
|
|
239 |
|
|
11.3 |
% |
| Noninterest expense |
|
10,148 |
|
|
9,683 |
|
|
465 |
|
|
4.8 |
% |
| Income before income
taxes |
|
8,426 |
|
|
2,691 |
|
|
5,735 |
|
|
213.1 |
% |
| Income tax expense
(benefit) |
|
2,127 |
|
|
(57 |
) |
|
2,184 |
|
|
(3,831.6 |
)% |
| Net
income |
|
$ |
6,299 |
|
|
$ |
2,748 |
|
|
$ |
3,551 |
|
|
129.2 |
% |
Net Interest Income
Net interest income increased $2.16 million or
15.0% for the three months ended March 31, 2021 compared
to the three months ended March 31, 2020. Net interest
margin of 3.50% for the three months ended March 31,
2021 increased seven basis points from 3.43% for the
comparable period. The increase in net interest income resulted
primarily from significant decreases in interest expense from lower
funding costs. Interest income decreased from significantly lower
asset yields partially offset by increased interest income from
larger average balances and accelerated loan fee recognition
following the forgiveness of U.S. SBA PPP loans.
The sharp decline in interest rates in 2020 not
only reduced interest income on floating-rate commercial loans and
liquid interest-earning assets, but it also reduced competitive
pressures and depositor expectations concerning deposit interest
rates. In 2020, the Company increased its net interest margin in
the first quarter, had stable margins during the second and third
quarters and slightly increased margins during the fourth quarter
of 2020 after adjusting for U.S. SBA PPP loan and funding activity.
Net interest margin increased from 3.40% for the three months ended
December 31, 2020 to 3.50% for the three months ended
March 31, 2021. For the three months ended March 31,
2021, net interest margin increased 18 basis points as a result of
net U.S. SBA PPP loan interest income and accelerated loan fee
recognition compared to seven basis points for the three months
ended December 31, 2020.
Loan yields decreased from 4.56% for the
three months ended March 31, 2020 to 4.17% for the
three months ended March 31, 2021. Loan yields were 4.25%
for the fourth quarter of 2020. Loan yields, excluding U.S. SBA PPP
loan interest income, were 4.01% for the three months ended
March 31, 2021 compared to 4.24% for the three months ended
December 31, 2020.
The Company’s cost of funds continued to
decrease during the first quarter of 2021. The prepayment of
$30.0 million of FHLB advances with a 2.2% average rate in the
last six months of 2020, the repricing of time deposits, the
increase in non-interest bearing accounts as a percentage of total
deposits and lower costs for transaction deposit accounts all
contributed to lowering the Bank's cost of funds in 2020 and 2021.
Cost of funds decreased from 0.93% for the three months ended
March 31, 2020 to 0.25% for the three months ended
March 31, 2021. During the first quarter of 2021, the
Company's cost of funds decreased 17 basis points from 0.42% for
the three months ended December 31, 2020.
Excluding the acceleration of interest income
with U.S. SBA PPP loan forgiveness, compression of our net interest
margin is probable in the second quarter of 2021 as
interest-earning assets reprice faster than interest-bearing
liabilities. We expect U.S. SBA PPP loan forgiveness to positively
impact margins and net interest income in the second and third
quarters of 2021 with the recognition of remaining net deferred
fees.
Noninterest Income
Noninterest income increased $239,000 or 11.3%
for the three months ended March 31, 2021 compared to the
three months ended March 31, 2020. The increase for the
comparable periods was primarily due to increased gains on the sale
of investment securities and increased fees on deposit accounts
partially offset by a loss on the sale of impaired loans. During
the quarter ended March 31, 2021, the Bank sold non-accrual
and classified commercial real estate and residential mortgage
loans with an amortized cost, net of charge-offs, of
$9.1 million and recognized a loss on the sale of
$191,000.
Noninterest income as a percentage of average
assets was 0.46% and 0.47%, respectively, for the three months
ended March 31, 2021 and 2020.
Noninterest Expense
Noninterest expense of $10.1 million for the
three months ended March 31, 2021, increased $465,000 or 4.8%,
compared to $9.7 million the three months ended March 31,
2020. The increase in noninterest expense for the comparable
periods was primarily due to increases in other expenses of $1.4
million and FDIC insurance of $82,000, partially offset by
decreases in compensation and benefits of $400,000 and OREO of
$600,000. FDIC insurance increased due to the overall significant
increase in FDIC insured deposit accounts that began in the second
quarter of 2020. OREO expenses have moderated as the Bank has been
successful at disposing foreclosed assets over the last 12 month
period, which have been reduced from $6.3 million at
March 31, 2020 to $2.3 million at March 31,
2021.
Noninterest expense in the first quarter of 2021
included two non-recurring expenses. First, during the first
quarter of 2021, the Company incurred an expense of
$1.3 million related to an isolated wire transfer fraud
incident. Our investigation determined that no information systems
of the Bank were compromised and no employee fraud was involved. No
additional expense is expected to be incurred relating to this
incident and the Company is submitting an insurance claim which
could result in a recovery of a portion of the expense. Any
recovery of insurance proceeds would be recognized in the quarter
received. Second, compensation and benefits were decreased $250,000
as the Company recorded the deferred costs to underwrite U.S. SBA
PPP loans. Deferred costs are being amortized as a component of
interest income through the contractual maturity date of each
individual U.S. SBA PPP loan. Excluding the impact of these two
non-recurring expenses, the Company's first quarter 2021
noninterest expense was $9.1 million. The Company's projected
quarterly expense run rate for the second quarter of 2021 remains
between $9.2-$9.4 million.
The Company’s efficiency ratio was 53.78% for
the three months ended March 31, 2021 compared to 58.78% for
the three months ended March 31, 2020. The Company’s net
operating expense ratio was 1.50% for the three months ended
March 31, 2021 compared to 1.68% for the three months ended
March 31, 2020. The efficiency and net operating expense
ratios have improved (decreased) as the Company has been able to
generate more noninterest income while controlling expense
growth.
Income Tax Expense
The effective tax rate for the three months
ended March 31, 2021 was 25.24% compared to an effective tax
rate of (2.1%) for the three months ended March 31, 2020. The
Company's new state tax apportionment approach was implemented
during the first quarter of 2020 and included the impact of amended
income tax filings of the Company and Bank. Management evaluated
the tax position and determined the change in tax position
qualified as a change in estimate under FASB ASC Section 250. The
following table shows a breakdown of income tax expense for the
three months ended March 31, 2020 split between the
apportionment adjustment and a normalized 2020 income tax
provision:
| |
|
(UNAUDITED) |
| |
|
Three Months Ended March 31, 2020 |
|
(dollars in thousands) |
|
Tax Provision |
|
Effective Tax Rate |
|
Income tax apportionment adjustment |
|
$ |
(743 |
) |
|
(27.6 |
)% |
| Income taxes before
apportionment adjustment |
|
686 |
|
|
25.5 |
% |
| Income tax expense as
reported |
|
$ |
(57 |
) |
|
(2.1 |
)% |
| |
|
|
|
|
| Income before income
taxes |
|
$ |
2,691 |
|
|
|
Balance Sheet
Assets
Total assets increased $123.1 million, or 6.1%,
to $2.15 billion at March 31, 2021 compared to total assets of
$2.03 billion at December 31, 2020 primarily due to increased
cash of $110.8 million. The increase in cash was principally driven
by the cash received from the SBA from the forgiveness of U.S. SBA
PPP loans, as well as an increase to our customer deposits accounts
from the recent legislation that authorized another round of
federal government funding for U.S. SBA PPP loans in December 2020.
In addition, net loans and investments increased $8.2 million and
$6.4 million, respectively, partially offset by decreases to OREO
of $780,000 and all other assets of $1.6 million. The
Company’s loan pipeline was $133.3 million
at March 31, 2021.
During the first quarter of 2021, total net
loans, which include portfolio loans and U.S. SBA PPP loans,
increased 2.1% annualized or $8.2 million from $1,594.1 million
at December 31, 2020 to $1,602.3 million at
March 31, 2021. Gross portfolio loans increased 0.8%
annualized or $2.9 million from $1,504.3 million
at December 31, 2020 to $1,507.2 million at
March 31, 2021. Portfolio loans include all loan
portfolios except the U.S. SBA PPP loan portfolio.
Non-owner occupied commercial real estate as a
percentage of risk-based capital at March 31, 2021 and
December 31, 2020 were $741 million or 328% and $696 million
or 316%, respectively. Construction loans as a percentage of
risk-based capital at March 31, 2021 and December 31,
2020 were $126 million or 56% and $139 million or 63%,
respectively.
Funding
The Bank uses retail deposits and wholesale
funding. Retail deposits continue to be the most significant source
of funds totaling $1,859.9 million or 98.1% of funding at
March 31, 2021 compared to $1,737.6 million or 98.0% of
funding at December 31, 2020. Wholesale funding, which
consisted of FHLB advances and brokered deposits, were $35.3
million or 1.9% of funding at March 31, 2021 compared to $35.3
million or 2.0% of funding at December 31, 2020.
Total deposits increased $122.3 million
or 7.0% (28.0% annualized) at March 31, 2021
compared to December 31, 2020. The increase comprised a $127.5
million increase to transaction deposits offsetting a $5.2 million
decrease to time deposits. Non-interest-bearing demand deposits
increased $44.2 million or 12.2% at March 31, 2021,
representing 21.8% of deposits, compared to 20.7% of
deposits at December 31, 2020. Customer deposit balances
have increased during the last 12 months due to customer
acquisition as well as lower levels of consumer and business
spending related to the COVID-19 pandemic.
Stockholders' Equity and Regulatory
Capital
During the three months ended March 31,
2021, total stockholders’ equity increased $2.7 million due to net
income of $6.3 million and net stock related activities in
connection with stock-based compensation and ESOP activity of $0.2
million. These increases to equity were partially offset by common
dividends paid of $0.7 million and a decrease in accumulated other
comprehensive income of $2.8 million due to decreased unrealized
gains in the investment portfolio.
The Company's common equity to assets ratio
decreased to 9.34% at March 31, 2021 from 9.77%
at December 31, 2020. The Company’s ratio of
tangible common equity ("TCE") to tangible assets decreased to
8.82% at March 31, 2021 from 9.22%
at December 31, 2020 (see Non-GAAP reconciliation
schedules). The decrease in the TCE ratio is due primarily to
significant increases in cash and loans from COVID-19 government
stimulus.
In April 2020, banking regulators issued an
interim final rule that excluded U.S. SBA PPP loans pledged under
the PPPLF from the calculation of the leverage ratio. The Bank did
not have any PPPLF advances at March 31, 2021 and
December 31, 2020. In addition, the interim final rule
excluded U.S. SBA PPP loans from the calculation of risk-based
capital ratios by assigning a zero percent risk weight. The Company
remains well capitalized at March 31, 2021 with
a Tier 1 capital to average assets ("leverage ratio")
of 9.70% at March 31, 2021 compared to
9.56% at December 31, 2020.
Asset Quality
COVID-19 Loan Programs
While the outbreak of COVID-19 adversely
impacted a range of industries in the Company's footprint, we have
taken steps to protect the health and well-being of our employees
and customers and to assist customers who have been impacted by the
COVID-19 pandemic. The Coronavirus Aid, Relief and Economic
Security ("CARES") Act was signed into law on March 27, 2020. There
have been additional clarifications to regulation and legislation
since the original law was passed, including the recent legislation
that authorized another round of federal government funding for
U.S. SBA PPP loans in December 2020.
U.S. SBA PPP balances increased a net of $5.4
million during the first quarter of 2021 which resulted in 865 of
loans with balances of $115.7 million at March 31, 2021. No
credit issues are anticipated with U.S. SBA PPP loans as they are
guaranteed by the SBA and the Bank's allowance for loan loss does
not include an allowance for U.S. SBA PPP loans. During the three
months ended March 31, 2021, the Company originated
$53.4 million or 456 of new U.S. SBA PPP loans under the
recent round of authorized funding and processed forgiveness for
$48.0 million or 447 of U.S. SBA PPP loans.
Beginning in April of 2020, the Company added
COVID-19 payment deferral programs for impacted customers. The
Company deferred either the full loan payment or the principal
component of the loan payment for a period of between 90 and 180
days with most deferrals set to a six month period. As of
March 31, 2021, $23.1 million or 1.5% of gross portfolio loans
had deferral agreements, down $12.3 million from the
$35.4 million or 2.4% of gross portfolio loans at
December 31, 2020. All COVID-19 deferred loans were current
prior to the crisis and will not be considered delinquent loans or
troubled debt restructures ("TDRs") upon completion of the
modification agreements due to provisions in the CARES Act and
regulations that permit U.S. financial institutions to temporarily
suspend U.S. GAAP requirements to treat such loan modifications as
TDRs.
Allowance for loan losses ("ALLL") and
provision for loan losses ("PLL") and Non-Performing
Assets
The Company's allowance reflects the continued
economic uncertainty from the COVID-19 pandemic. The ALLL increased
in 2020 primarily due to the economic effects of the COVID-19
pandemic. The Company's allowance methodology considers
quantitative historical loss factors and qualitative factors to
determine the estimated level of incurred losses in the Company's
loan portfolios. ALLL levels decreased to 1.21% of portfolio loans
at March 31, 2021 compared to 1.29% at December 31, 2020.
At and for the three months ended March 31, 2021, the
Company's ALLL decreased $1.2 million or 6.0% to $18.3 million at
March 31, 2021 from $19.4 million at December 31, 2020.
The decrease in the general allowance was primarily due to
improvements in the qualitative factors of delinquency and risk
classification rating, as well as slower loan growth partially
offset by higher charge-offs in the first quarter.
The Company recorded a $295,000 PLL for the
three months ended March 31, 2021 compared to $4.1 million for
the three months ended March 31, 2020. Net charge-offs also
increased for the comparable periods from a $19,000 recovery in the
first quarter of 2020 to $1.5 million in net charge-offs in
the first quarter of 2021. During the three months ended
March 31, 2021, the Bank sold non-accrual and classified
commercial real estate and residential mortgage loans with an
amortized cost of $9.1 million, net of charge-offs of
$1.4 million, and recognized a loss on the sale of $191,000.
The Company's sale of these impaired loans decreased the specific
reserve, improved asset quality and improved several ALLL
qualitative factors.
Management believes that loans included in the
COVID-19 deferral program in 2020 and 2021 are more likely to
default in the future and that the identification and resolution of
problem credits could be delayed. In our evaluation of current and
previously deferred loans, we considered the length of the deferral
period, the type and amount of collateral and customer industries.
Consistent with regulatory guidance, if new information during the
deferral period indicates that there is evidence of default, the
Bank may change the classification rating (e.g., change from
passing credit to substandard) and accrual status (e.g., change
from accrual to non-accrual status) as deemed appropriate. As of
March 31, 2021 and December 31, 2020, there were $1.0
million and $3.4 million, respectively, of COVID-19 deferred
loans deemed to be non-accrual and substandard based on
reviews.
Management believes that the allowance is adequate at
March 31, 2021.
During 2020, classified assets decreased
$12.3 million. The sale of $9.1 million in impaired loans
during the first quarter of 2021 was a continuation of management's
intent to expeditiously resolve non-performing or substandard
credits that were not likely to become performing or passing
credits in a reasonable timeframe. Classified assets decreased $6.2
million from $22.4 million at December 31, 2020 to $16.1
million at March 31, 2021. Management considers
classified assets to be an important measure of asset quality. The
Company's risk rating process for classified loans is an important
input into the Company's allowance methodology. Risk ratings are
expected to be an important indicator in assessing ongoing credit
risks of COVID-19 deferred loans.
Non-accrual loans and OREO to total gross
portfolio loans and OREO decreased 36 basis points from
1.42% at December 31, 2020 to 1.06%
at March 31, 2021. Non-accrual loans, OREO and TDRs to
total assets decreased 31 basis points from
1.08% at December 31, 2020 to 0.77%
at March 31, 2021.
Non-accrual loans decreased $4.6 million from
$18.2 million at December 31, 2020 to $13.6 million at
March 31, 2021. Non-accrual loans of $8.2 million (60%) were
current with all payments of principal and interest with specific
reserves of $42,000 at March 31, 2021. Delinquent non-accrual
loans were $5.5 million (40%) with specific reserves of $742,000 at
March 31, 2021.
The OREO balance decreased $780,000 from $3.1
million at December 31, 2020 to $2.3 million at March 31,
2021.
About The Community Financial
Corporation - Headquartered in Waldorf, MD, The Community
Financial Corporation is the bank holding company for Community
Bank of the Chesapeake, a full-service commercial bank with assets
of approximately $2.1 billion. Through its branch offices and
commercial lending centers, Community Bank of the Chesapeake offers
a broad range of financial products and services to individuals and
businesses. The Company’s branches are located at its main office
in Waldorf, Maryland, and branch offices in Bryans Road, Dunkirk,
Leonardtown, La Plata, Charlotte Hall, Prince Frederick, Lusby and
California, Maryland; and downtown Fredericksburg, Virginia. More
information about Community Bank of the Chesapeake can be found at
www.cbtc.com.
Use of non-GAAP Financial
Measures - Statements included in this press release
include non-GAAP financial measures and should be read along with
the accompanying tables, which provide a reconciliation of non-GAAP
financial measures to GAAP financial measures. The Company’s
management uses these non-GAAP financial measures, and believes
that non-GAAP financial measures provide additional useful
information that allows readers to evaluate the ongoing performance
of the Company. Non-GAAP financial measures should not be
considered as an alternative to any measure of performance or
financial condition as promulgated under GAAP, and investors should
consider the Company’s performance and financial condition as
reported under GAAP and all other relevant information when
assessing the performance or financial condition of the Company.
Non-GAAP financial measures have limitations as analytical tools,
and investors should not consider them in isolation or as a
substitute for analysis of the results or financial condition as
reported under GAAP.
Forward-looking Statements -
This news release contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
can generally be identified by the fact that they do not relate
strictly to historical or current facts. They often include words
like “believe,” “expect,” “anticipate,” “estimate” and “intend” or
future or conditional verbs such as “will,” “would,” “should,”
“could” or “may.” Statements in this release that are not strictly
historical are forward-looking and are based upon current
expectations that may differ materially from actual results. These
forward-looking statements include, without limitation, those
relating to the Company’s and the Bank’s future growth and
management’s outlook or expectations for revenue, assets, asset
quality, profitability, business prospects, net interest margin,
non-interest revenue, allowance for loan losses, the level of
credit losses from lending, liquidity levels, capital levels, or
other future financial or business performance strategies or
expectations, and any statements of the plans and objectives of
management for future operations products or services, including
the expected benefits from, and/or the execution of integration
plans relating to any acquisition we have undertaking or that we
undertake in the future; plans and cost savings regarding branch
closings or consolidation; any statement of expectation or belief;
projections related to certain financial metrics; and any statement
of assumptions underlying the foregoing. These forward-looking
statements express management’s current expectations or forecasts
of future events, results and conditions, and by their nature are
subject to and involve risks and uncertainties that could cause
actual results to differ materially from those anticipated by the
statements made herein. Factors that might cause actual results to
differ materially from those made in such statements include, but
are not limited to: risks, uncertainties and other factors relating
to the COVID-19 pandemic (including the length of time that the
pandemic continues, the ability of states and local governments to
successfully implement the lifting of restrictions on movement and
the potential imposition of further restrictions on movement and
travel in the future, the effect of the pandemic on the general
economy and on the businesses of our borrowers and their ability to
make payments on their obligations; the remedial actions and
stimulus measures adopted by federal, state and local governments,
and the inability of employees to work due to illness, quarantine,
or government mandates); the synergies and other expected financial
benefits from any acquisition that we have undertaken or may
undertake in the future; may or may not be realized within the
expected time frames; changes in the Company's or the Bank's
strategy, costs or difficulties related to integration matters
might be greater than expected; availability of and costs
associated with obtaining adequate and timely sources of liquidity;
the ability to maintain credit quality; general economic trends;
changes in interest rates; loss of deposits and loan demand to
other financial institutions; substantial changes in financial
markets; changes in real estate value and the real estate market;
regulatory changes; the impact of government shutdowns or
sequestration; the possibility of unforeseen events affecting the
industry generally; the uncertainties associated with newly
developed or acquired operations; the outcome of pending or
threatened litigation, or of matters before regulatory agencies,
whether currently existing or commencing in the future; market
disruptions and other effects of terrorist activities; and the
matters described in “Item 1A Risk Factors” in the Company’s Annual
Report on Form 10-K for the Year Ended December 31, 2020, and
in its other Reports filed with the Securities and Exchange
Commission (the “SEC”). The Company’s forward-looking statements
may also be subject to other risks and uncertainties, including
those that it may discuss elsewhere in this news release or in its
filings with the SEC, accessible on the SEC’s Web site at
www.sec.gov. The Company undertakes no obligation to update these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unforeseen events,
except as required under the rules and regulations of the SEC.
Data is unaudited as of March 31, 2021.
This selected information should be read in conjunction with the
financial statements and notes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2020.
CONTACTS:William J. Pasenelli,
Chief Executive OfficerTodd L. Capitani, Chief Financial
Officer888.745.2265
SUPPLEMENTAL QUARTERLY FINANCIAL
DATA CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
| |
|
Three Months Ended |
|
(dollars in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
16,592 |
|
|
|
$ |
16,776 |
|
|
|
$ |
16,176 |
|
|
$ |
16,277 |
|
|
$ |
16,502 |
|
|
|
Interest and dividends on securities |
|
1,064 |
|
|
|
1,091 |
|
|
|
1,269 |
|
|
1,341 |
|
|
1,469 |
|
|
|
Interest on deposits with banks |
|
22 |
|
|
|
46 |
|
|
|
38 |
|
|
20 |
|
|
68 |
|
|
| Total Interest and
Dividend Income |
|
17,678 |
|
|
|
17,913 |
|
|
|
17,483 |
|
|
17,638 |
|
|
18,039 |
|
|
| Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
802 |
|
|
|
1,166 |
|
|
|
1,534 |
|
|
1,937 |
|
|
3,044 |
|
|
|
Short-term borrowings |
|
— |
|
|
|
— |
|
|
|
14 |
|
|
28 |
|
|
69 |
|
|
|
Long-term debt |
|
367 |
|
|
|
775 |
|
|
|
567 |
|
|
449 |
|
|
573 |
|
|
| Total Interest
Expense |
|
1,169 |
|
|
|
1,941 |
|
|
|
2,115 |
|
|
2,414 |
|
|
3,686 |
|
|
| Net Interest Income
("NII") |
|
16,509 |
|
|
|
15,972 |
|
|
|
15,368 |
|
|
15,224 |
|
|
14,353 |
|
|
|
Provision for loan losses |
|
295 |
|
|
|
600 |
|
|
|
2,500 |
|
|
3,500 |
|
|
4,100 |
|
|
| NII After Provision
For Loan Losses |
|
16,214 |
|
|
|
15,372 |
|
|
|
12,868 |
|
|
11,724 |
|
|
10,253 |
|
|
| Noninterest
Income |
|
|
|
|
|
|
|
|
|
|
|
Loan appraisal, credit, and misc. charges |
|
198 |
|
|
|
76 |
|
|
|
49 |
|
|
35 |
|
|
14 |
|
|
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
6 |
|
|
— |
|
|
— |
|
|
|
Net gains on sale of investment securities |
|
586 |
|
|
|
714 |
|
|
|
229 |
|
|
112 |
|
|
329 |
|
|
|
Unrealized gain (losses) on equity securities |
|
(85 |
) |
|
|
(14 |
) |
|
|
— |
|
|
40 |
|
|
75 |
|
|
|
Income from bank owned life insurance |
|
214 |
|
|
|
220 |
|
|
|
222 |
|
|
220 |
|
|
219 |
|
|
|
Service charges |
|
1,187 |
|
|
|
960 |
|
|
|
839 |
|
|
709 |
|
|
982 |
|
|
|
Referral fee income |
|
451 |
|
|
|
414 |
|
|
|
321 |
|
|
1,143 |
|
|
502 |
|
|
|
Loss on sale of loans |
|
(191 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
| Total Noninterest
Income |
|
2,360 |
|
|
|
2,370 |
|
|
|
1,666 |
|
|
2,259 |
|
|
2,121 |
|
|
| Noninterest
Expense |
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
4,788 |
|
|
|
4,552 |
|
|
|
5,099 |
|
|
4,714 |
|
|
5,188 |
|
|
|
OREO valuation allowance and expenses |
|
181 |
|
|
|
897 |
|
|
|
421 |
|
|
1,100 |
|
|
782 |
|
|
| Sub
Total |
|
4,969 |
|
|
|
5,449 |
|
|
|
5,520 |
|
|
5,814 |
|
|
5,970 |
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Occupancy expense |
|
761 |
|
|
|
806 |
|
|
|
734 |
|
|
736 |
|
|
734 |
|
|
|
Advertising |
|
79 |
|
|
|
145 |
|
|
|
129 |
|
|
130 |
|
|
121 |
|
|
|
Data processing expense |
|
936 |
|
|
|
829 |
|
|
|
990 |
|
|
924 |
|
|
928 |
|
|
|
Professional fees |
|
640 |
|
|
|
658 |
|
|
|
652 |
|
|
477 |
|
|
626 |
|
|
|
Depreciation of premises and equipment |
|
147 |
|
|
|
154 |
|
|
|
142 |
|
|
151 |
|
|
158 |
|
|
|
Telephone communications |
|
58 |
|
|
|
49 |
|
|
|
43 |
|
|
53 |
|
|
43 |
|
|
|
Office supplies |
|
29 |
|
|
|
28 |
|
|
|
31 |
|
|
30 |
|
|
31 |
|
|
|
FDIC Insurance |
|
252 |
|
|
|
260 |
|
|
|
249 |
|
|
260 |
|
|
170 |
|
|
|
Core deposit intangible amortization |
|
133 |
|
|
|
139 |
|
|
|
144 |
|
|
151 |
|
|
157 |
|
|
|
Other |
|
2,144 |
|
|
|
955 |
|
|
|
817 |
|
|
671 |
|
|
745 |
|
|
| Total Operating
Expenses |
|
5,179 |
|
|
|
4,023 |
|
|
|
3,931 |
|
|
3,583 |
|
|
3,713 |
|
|
| Total Noninterest
Expense |
|
10,148 |
|
|
|
9,472 |
|
|
|
9,451 |
|
|
9,397 |
|
|
9,683 |
|
|
|
Income before income taxes |
|
8,426 |
|
|
|
8,270 |
|
|
|
5,083 |
|
|
4,586 |
|
|
2,691 |
|
|
|
Income tax expense (benefit) |
|
2,127 |
|
|
|
2,131 |
|
|
|
1,284 |
|
|
1,136 |
|
|
(57 |
) |
|
| Net
Income |
|
$ |
6,299 |
|
|
|
$ |
6,139 |
|
|
|
$ |
3,799 |
|
|
$ |
3,450 |
|
|
$ |
2,748 |
|
|
SUPPLEMENTAL QUARTERLY FINANCIAL DATA -
Continued CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
(dollars in thousands, except per share amounts) |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
|
$ |
126,834 |
|
|
|
$ |
56,887 |
|
|
|
$ |
93,130 |
|
|
|
$ |
103,914 |
|
|
|
$ |
15,498 |
|
|
| Federal funds sold |
|
43,614 |
|
|
|
— |
|
|
|
69,431 |
|
|
|
29,456 |
|
|
|
— |
|
|
| Interest-bearing deposits with
banks |
|
17,390 |
|
|
|
20,178 |
|
|
|
25,132 |
|
|
|
13,051 |
|
|
|
10,344 |
|
|
| Securities available for sale
("AFS"), at fair value |
|
253,348 |
|
|
|
246,105 |
|
|
|
229,620 |
|
|
|
234,982 |
|
|
|
214,163 |
|
|
| Equity securities carried at
fair value through income |
|
4,787 |
|
|
|
4,855 |
|
|
|
4,851 |
|
|
|
4,831 |
|
|
|
4,768 |
|
|
| Non-marketable equity
securities held in other financial institutions |
|
207 |
|
|
|
207 |
|
|
|
209 |
|
|
|
209 |
|
|
|
209 |
|
|
| Federal Home Loan Bank
("FHLB") stock - at cost |
|
2,036 |
|
|
|
2,777 |
|
|
|
3,415 |
|
|
|
4,691 |
|
|
|
5,627 |
|
|
| Net U.S. Small Business
Administration ("SBA") Paycheck Protection ("PPP") Loans |
|
112,485 |
|
|
|
107,960 |
|
|
|
127,811 |
|
|
|
125,638 |
|
|
|
— |
|
|
| Portfolio Loans Receivable net
of allowance for loan losses of $18,256, $19,424, $18,829, $16,319,
and $15,061 |
|
1,489,806 |
|
|
|
1,486,115 |
|
|
|
1,479,313 |
|
|
|
1,478,498 |
|
|
|
1,477,087 |
|
|
| Net Loans |
|
1,602,291 |
|
|
|
1,594,075 |
|
|
|
1,607,124 |
|
|
|
1,604,136 |
|
|
|
1,477,087 |
|
|
| Goodwill |
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
| Premises and equipment,
net |
|
20,540 |
|
|
|
20,271 |
|
|
|
20,671 |
|
|
|
20,972 |
|
|
|
21,305 |
|
|
| Premises and equipment held
for sale |
|
430 |
|
|
|
430 |
|
|
|
430 |
|
|
|
430 |
|
|
|
430 |
|
|
| Other real estate owned
("OREO") |
|
2,329 |
|
|
|
3,109 |
|
|
|
3,998 |
|
|
|
3,695 |
|
|
|
6,338 |
|
|
| Accrued interest
receivable |
|
7,337 |
|
|
|
8,717 |
|
|
|
8,975 |
|
|
|
6,773 |
|
|
|
5,077 |
|
|
| Investment in bank owned life
insurance |
|
38,275 |
|
|
|
38,061 |
|
|
|
37,841 |
|
|
|
37,619 |
|
|
|
37,399 |
|
|
| Core deposit intangible |
|
1,394 |
|
|
|
1,527 |
|
|
|
1,666 |
|
|
|
1,810 |
|
|
|
1,961 |
|
|
| Net deferred tax assets |
|
8,671 |
|
|
|
7,909 |
|
|
|
7,307 |
|
|
|
6,565 |
|
|
|
6,421 |
|
|
| Right of use assets -
operating leases |
|
6,391 |
|
|
|
7,831 |
|
|
|
8,005 |
|
|
|
8,132 |
|
|
|
8,257 |
|
|
| Other assets |
|
2,822 |
|
|
|
2,665 |
|
|
|
4,797 |
|
|
|
1,655 |
|
|
|
902 |
|
|
| Total
Assets |
|
$ |
2,149,531 |
|
|
|
$ |
2,026,439 |
|
|
|
$ |
2,137,437 |
|
|
|
$ |
2,093,756 |
|
|
|
$ |
1,826,621 |
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
|
|
|
|
|
|
|
|
|
| Non-interest-bearing
deposits |
|
$ |
406,319 |
|
|
|
$ |
362,079 |
|
|
|
$ |
360,839 |
|
|
|
$ |
356,196 |
|
|
|
$ |
254,114 |
|
|
| Interest-bearing deposits |
|
1,461,577 |
|
|
|
1,383,523 |
|
|
|
1,418,767 |
|
|
|
1,314,168 |
|
|
|
1,258,475 |
|
|
| Total deposits |
|
1,867,896 |
|
|
|
1,745,602 |
|
|
|
1,779,606 |
|
|
|
1,670,364 |
|
|
|
1,512,589 |
|
|
| Short-term borrowings |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
|
|
27,000 |
|
|
| Long-term debt |
|
27,285 |
|
|
|
27,302 |
|
|
|
42,319 |
|
|
|
67,336 |
|
|
|
67,353 |
|
|
| Paycheck Protection Program
Liquidity Facility ("PPPLF") Advance |
|
— |
|
|
|
— |
|
|
|
85,893 |
|
|
|
126,801 |
|
|
|
— |
|
|
| Guaranteed preferred
beneficial interest in junior subordinated debentures
("TRUPs") |
|
12,000 |
|
|
|
12,000 |
|
|
|
12,000 |
|
|
|
12,000 |
|
|
|
12,000 |
|
|
| Subordinated notes -
4.75% |
|
19,468 |
|
|
|
19,526 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
| Lease liabilities - operating
leases |
|
6,614 |
|
|
|
8,088 |
|
|
|
8,193 |
|
|
|
8,296 |
|
|
|
8,397 |
|
|
| Accrued expenses and other
liabilities |
|
15,509 |
|
|
|
15,908 |
|
|
|
16,576 |
|
|
|
14,517 |
|
|
|
14,015 |
|
|
| Total
Liabilities |
|
1,948,772 |
|
|
|
1,828,426 |
|
|
|
1,944,587 |
|
|
|
1,904,314 |
|
|
|
1,641,354 |
|
|
| Stockholders'
Equity |
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
59 |
|
|
|
59 |
|
|
|
59 |
|
|
|
59 |
|
|
|
59 |
|
|
| Additional paid in
capital |
|
96,181 |
|
|
|
95,965 |
|
|
|
95,799 |
|
|
|
95,687 |
|
|
|
95,581 |
|
|
| Retained earnings |
|
103,294 |
|
|
|
97,944 |
|
|
|
92,814 |
|
|
|
89,781 |
|
|
|
87,070 |
|
|
| Accumulated other
comprehensive income |
|
1,684 |
|
|
|
4,504 |
|
|
|
4,780 |
|
|
|
4,517 |
|
|
|
3,159 |
|
|
| Unearned ESOP shares |
|
(459 |
) |
|
|
(459 |
) |
|
|
(602 |
) |
|
|
(602 |
) |
|
|
(602 |
) |
|
| Total Stockholders'
Equity |
|
200,759 |
|
|
|
198,013 |
|
|
|
192,850 |
|
|
|
189,442 |
|
|
|
185,267 |
|
|
| Total Liabilities and
Stockholders' Equity |
|
$ |
2,149,531 |
|
|
|
$ |
2,026,439 |
|
|
|
$ |
2,137,437 |
|
|
|
$ |
2,093,756 |
|
|
|
$ |
1,826,621 |
|
|
| Common shares issued and
outstanding |
|
5,897,685 |
|
|
|
5,903,613 |
|
|
|
5,911,940 |
|
|
|
5,911,715 |
|
|
|
5,910,064 |
|
|
SUPPLEMENTAL QUARTERLY FINANCIAL DATA -
Continued SELECTED FINANCIAL INFORMATION AND
RATIOS (UNAUDITED)
| |
|
Three Months Ended |
|
(dollars in thousands, except per share amounts) |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
KEY OPERATING RATIOS |
|
|
|
|
|
|
|
|
|
|
| Return on average assets
("ROAA") |
|
1.22 |
% |
|
1.18 |
% |
|
0.73 |
% |
|
0.69 |
% |
|
0.61 |
% |
| Pre-tax Pre-Provision
ROAA** |
|
1.68 |
|
|
1.71 |
|
|
1.46 |
|
|
1.62 |
|
|
1.51 |
|
| Return on average common
equity ("ROACE") |
|
12.53 |
|
|
12.51 |
|
|
7.86 |
|
|
7.27 |
|
|
6.00 |
|
| Pre-tax Pre-Provision
ROACE** |
|
17.34 |
|
|
18.08 |
|
|
15.69 |
|
|
17.03 |
|
|
14.82 |
|
| Return on Average Tangible
Common Equity ("ROATCE")** |
|
13.56 |
|
|
13.58 |
|
|
8.65 |
|
|
8.05 |
|
|
6.69 |
|
| Average total equity to
average total assets |
|
9.71 |
|
|
9.46 |
|
|
9.33 |
|
|
9.52 |
|
|
10.20 |
|
| Interest rate spread |
|
3.43 |
|
|
3.29 |
|
|
3.15 |
|
|
3.21 |
|
|
3.21 |
|
| Net interest margin |
|
3.50 |
|
|
3.40 |
|
|
3.27 |
|
|
3.34 |
|
|
3.43 |
|
| Cost of funds |
|
0.25 |
|
|
0.42 |
|
|
0.46 |
|
|
0.54 |
|
|
0.93 |
|
| Cost of deposits |
|
0.18 |
|
|
0.26 |
|
|
0.37 |
|
|
0.48 |
|
|
0.82 |
|
| Cost of debt |
|
2.50 |
|
|
3.45 |
|
|
1.16 |
|
|
1.06 |
|
|
2.61 |
|
| Efficiency ratio |
|
53.78 |
|
|
51.64 |
|
|
55.48 |
|
|
53.75 |
|
|
58.78 |
|
| Non-interest expense to
average assets |
|
1.96 |
|
|
1.83 |
|
|
1.82 |
|
|
1.88 |
|
|
2.15 |
|
| Net operating expense to
average assets |
|
1.50 |
|
|
1.37 |
|
|
1.50 |
|
|
1.43 |
|
|
1.68 |
|
| Avg. int-earning assets to
avg. int-bearing liabilities |
|
128.84 |
|
|
126.18 |
|
|
125.40 |
|
|
125.51 |
|
|
124.44 |
|
| Net charge-offs to average
portfolio loans |
|
0.40 |
|
|
0.00 |
|
|
0.00 |
|
|
0.61 |
|
|
0.00 |
|
| COMMON SHARE
DATA |
|
|
|
|
|
|
|
|
|
|
| Basic net income per common
share |
|
$ |
1.07 |
|
|
$ |
1.04 |
|
|
$ |
0.64 |
|
|
$ |
0.59 |
|
|
$ |
0.47 |
|
| Diluted net income per common
share |
|
1.07 |
|
|
1.04 |
|
|
0.64 |
|
|
0.59 |
|
|
0.47 |
|
| Cash dividends paid per common
share |
|
0.125 |
|
|
0.125 |
|
|
0.125 |
|
|
0.13 |
|
|
0.13 |
|
| Basic - weighted average
common shares outstanding |
|
5,888,250 |
|
|
5,892,751 |
|
|
5,895,074 |
|
|
5,894,009 |
|
|
5,886,981 |
|
| Diluted - weighted average
common shares outstanding |
|
5,897,698 |
|
|
5,894,494 |
|
|
5,895,074 |
|
|
5,894,009 |
|
|
5,886,981 |
|
| ASSET
QUALITY |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
2,149,531 |
|
|
$ |
2,026,439 |
|
|
$ |
2,137,437 |
|
|
$ |
2,093,756 |
|
|
$ |
1,826,621 |
|
| Gross portfolio loans (1) |
|
1,507,183 |
|
|
1,504,275 |
|
|
1,496,532 |
|
|
1,492,745 |
|
|
1,490,089 |
|
| Classified assets |
|
16,145 |
|
|
22,358 |
|
|
24,600 |
|
|
25,115 |
|
|
33,489 |
|
| Allowance for loan losses |
|
18,256 |
|
|
19,424 |
|
|
18,829 |
|
|
16,319 |
|
|
15,061 |
|
| Past due loans - 31 to 89
days |
|
1,373 |
|
|
179 |
|
|
838 |
|
|
5,843 |
|
|
7,921 |
|
| Past due loans >=90
days |
|
5,453 |
|
|
11,965 |
|
|
17,230 |
|
|
20,072 |
|
|
12,877 |
|
| Total past due loans (2)
(3) |
|
6,826 |
|
|
12,144 |
|
|
18,068 |
|
|
25,915 |
|
|
20,798 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Non-accrual loans (4) |
|
13,623 |
|
|
18,222 |
|
|
20,148 |
|
|
22,896 |
|
|
16,349 |
|
| Accruing troubled debt
restructures ("TDRs") |
|
504 |
|
|
572 |
|
|
573 |
|
|
593 |
|
|
641 |
|
| Other real estate owned
("OREO") |
|
2,329 |
|
|
3,109 |
|
|
3,998 |
|
|
3,695 |
|
|
6,338 |
|
|
Non-accrual loans, OREO and TDRs |
|
$ |
16,456 |
|
|
$ |
21,903 |
|
|
$ |
24,719 |
|
|
$ |
27,184 |
|
|
$ |
23,328 |
|
** Non-GAAP financial measure. See
reconciliation of GAAP and NON-GAAP measures.
____________________________________
(1) Portfolio loans include all loan portfolios
except the U.S. SBA PPP loan portfolio. Asset quality ratios for
loans exclude U.S. SBA PPP loans.
(2) Delinquency excludes Purchase Credit
Impaired ("PCI") loans.
(3) There were no COVID-19 deferred loans in
process as of April 23, 2021 that were reported as delinquent
as of March 31, 2021.
(4) Non-accrual loans include all loans that are
90 days or more delinquent and loans that are non-accrual due to
the operating results or cash flows of a customer. Non-accrual
loans can include loans that are current with all loan payments. At
March 31, 2021 and December 31, 2020, the Company had
current non-accrual loans of $8.2 million and $6.3 million,
respectively.
SUPPLEMENTAL QUARTERLY FINANCIAL DATA -
Continued SELECTED FINANCIAL INFORMATION AND
RATIOS (UNAUDITED)
| |
|
Three Months Ended |
|
(dollars in thousands, except per share amounts) |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
ASSET QUALITY RATIOS (1) |
|
|
|
|
|
|
|
|
|
|
| Classified assets to total
assets |
|
0.75 |
% |
|
1.10 |
% |
|
1.15 |
% |
|
1.20 |
% |
|
1.83 |
% |
| Classified assets to
risk-based capital |
|
6.81 |
|
|
9.61 |
|
|
11.89 |
|
|
12.49 |
|
|
17.00 |
|
| Allowance for loan losses to
total loans |
|
1.21 |
|
|
1.29 |
|
|
1.26 |
|
|
1.09 |
|
|
1.01 |
|
| Allowance for loan losses to
non-accrual loans |
|
134.01 |
|
|
106.60 |
|
|
93.45 |
|
|
71.27 |
|
|
92.12 |
|
| Past due loans - 31 to 89 days
to total loans |
|
0.09 |
|
|
0.01 |
|
|
0.06 |
|
|
0.39 |
|
|
0.53 |
|
| Past due loans >=90 days to
total loans |
|
0.36 |
|
|
0.80 |
|
|
1.15 |
|
|
1.34 |
|
|
0.86 |
|
| Total past due (delinquency)
to total loans |
|
0.45 |
|
|
0.81 |
|
|
1.21 |
|
|
1.74 |
|
|
1.40 |
|
| Non-accrual loans to total
loans |
|
0.90 |
|
|
1.21 |
|
|
1.35 |
|
|
1.53 |
|
|
1.10 |
|
| Non-accrual loans and TDRs to
total loans |
|
0.94 |
|
|
1.25 |
|
|
1.38 |
|
|
1.57 |
|
|
1.14 |
|
| Non-accrual loans and OREO to
total assets |
|
0.74 |
|
|
1.05 |
|
|
1.13 |
|
|
1.27 |
|
|
1.24 |
|
| Non-accrual loans and OREO to
total loans and OREO |
|
1.06 |
|
|
1.42 |
|
|
1.61 |
|
|
1.78 |
|
|
1.52 |
|
| Non-accrual loans, OREO and
TDRs to total assets |
|
0.77 |
|
|
1.08 |
|
|
1.16 |
|
|
1.30 |
|
|
1.28 |
|
| COMMON SHARE
DATA |
|
|
|
|
|
|
|
|
|
|
| Book value per common
share |
|
$ |
34.04 |
|
|
$ |
33.54 |
|
|
$ |
32.62 |
|
|
$ |
32.05 |
|
|
$ |
31.35 |
|
| Tangible book value per common
share** |
|
31.97 |
|
|
31.45 |
|
|
30.51 |
|
|
29.91 |
|
|
29.18 |
|
| Common shares outstanding at
end of period |
|
5,897,685 |
|
|
5,903,613 |
|
|
5,911,940 |
|
|
5,911,715 |
|
|
5,910,064 |
|
| OTHER
DATA |
|
|
|
|
|
|
|
|
|
|
| Full-time equivalent
employees |
|
|
192 |
|
|
|
189 |
|
|
|
189 |
|
|
|
194 |
|
|
|
196 |
|
| Branches |
|
|
11 |
|
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
| Loan Production Offices |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
| CAPITAL
RATIOS |
|
|
|
|
|
|
|
|
|
|
| Tier 1 capital to average
assets |
|
9.70 |
% |
|
9.56 |
% |
|
9.73 |
% |
|
9.76 |
% |
|
10.20 |
% |
| Tier 1 common capital to
risk-weighted assets |
|
11.72 |
|
|
11.47 |
|
|
11.11 |
|
|
11.12 |
|
|
11.04 |
|
| Tier 1 capital to
risk-weighted assets |
|
12.47 |
|
|
12.23 |
|
|
11.87 |
|
|
11.89 |
|
|
11.82 |
|
| Total risk-based capital to
risk-weighted assets |
|
14.83 |
|
|
14.69 |
|
|
13.06 |
|
|
12.94 |
|
|
12.80 |
|
| Common equity to assets |
|
9.34 |
|
|
9.77 |
|
|
9.02 |
|
|
9.05 |
|
|
10.14 |
|
| Tangible common equity to
tangible assets ** |
|
8.82 |
|
|
9.22 |
|
|
8.49 |
|
|
8.50 |
|
|
9.51 |
|
** Non-GAAP financial measure. See
reconciliation of GAAP and NON-GAAP measures.
____________________________________
(1) Asset quality ratios are calculated using
total portfolio loans. Portfolio loans include all loan portfolios
except the U.S. SBA PPP loan portfolio.
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Reconciliation of US GAAP total assets,
common equity, common equity to assets and book value to Non-GAAP
tangible assets, tangible common equity, tangible common equity to
tangible assets and tangible book value.
This press release, including the accompanying
financial statement tables, contains financial information
determined by methods other than in accordance with generally
accepted accounting principles, or GAAP. This financial information
includes certain performance measures, which exclude intangible
assets. These non-GAAP measures are included because the Company
believes they may provide useful supplemental information for
evaluating the underlying performance trends of the Company.
|
(dollars in thousands, except per share amounts) |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Total assets |
|
$ |
2,149,531 |
|
|
$ |
2,026,439 |
|
|
$ |
2,137,437 |
|
|
$ |
2,093,756 |
|
|
$ |
1,826,621 |
|
| Less: intangible assets |
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
10,835 |
|
|
10,835 |
|
|
10,835 |
|
|
10,835 |
|
|
10,835 |
|
|
Core deposit intangible |
|
1,394 |
|
|
1,527 |
|
|
1,666 |
|
|
1,810 |
|
|
1,961 |
|
| Total intangible assets |
|
12,229 |
|
|
12,362 |
|
|
12,501 |
|
|
12,645 |
|
|
12,796 |
|
| Tangible assets |
|
$ |
2,137,302 |
|
|
$ |
2,014,077 |
|
|
$ |
2,124,936 |
|
|
$ |
2,081,111 |
|
|
$ |
1,813,825 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Total common equity |
|
$ |
200,759 |
|
|
$ |
198,013 |
|
|
$ |
192,850 |
|
|
$ |
189,442 |
|
|
$ |
185,267 |
|
| Less: intangible assets |
|
12,229 |
|
|
12,362 |
|
|
12,501 |
|
|
12,645 |
|
|
12,796 |
|
| Tangible common equity |
|
$ |
188,530 |
|
|
$ |
185,651 |
|
|
$ |
180,349 |
|
|
$ |
176,797 |
|
|
$ |
172,471 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Common shares outstanding at
end of period |
|
5,897,685 |
|
|
5,903,613 |
|
|
5,911,940 |
|
|
5,911,715 |
|
|
5,910,064 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Common equity to assets |
|
9.34 |
% |
|
9.77 |
% |
|
9.02 |
% |
|
9.05 |
% |
|
10.14 |
% |
| Tangible common equity to
tangible assets |
|
8.82 |
% |
|
9.22 |
% |
|
8.49 |
% |
|
8.50 |
% |
|
9.51 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Common book value per
share |
|
$ |
34.04 |
|
|
$ |
33.54 |
|
|
$ |
32.62 |
|
|
$ |
32.05 |
|
|
$ |
31.35 |
|
| Tangible common book value per
share |
|
$ |
31.97 |
|
|
$ |
31.45 |
|
|
$ |
30.51 |
|
|
$ |
29.91 |
|
|
$ |
29.18 |
|
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Pre-Tax Pre-Provision ("PTPP") Income,
PTPP Return on Average Assets ("ROAA"), PTPP Return on Average
Common Equity ("ROACE"), and Return on Average Tangible Common
Equity ("ROATCE")
We believe that pre-tax pre-provision income,
which reflects our profitability before income taxes and loan loss
provisions, allows investors to better assess our operating income
and expenses in relation to our core operating revenue by removing
the volatility that is associated with credit provisions and
different state income tax rates for comparable institutions. We
also believe that during a crisis such as the COVID-19 pandemic,
this information is useful as the impact of the pandemic on the
loan loss provisions of various institutions will likely vary based
on the geography of the communities served by a particular
institution.
| |
|
Three Months Ended |
|
(dollars in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Net income (as reported) |
|
$ |
6,299 |
|
|
$ |
6,139 |
|
|
$ |
3,799 |
|
|
$ |
3,450 |
|
|
$ |
2,748 |
|
| Provision for loan losses |
|
295 |
|
|
600 |
|
|
2,500 |
|
|
3,500 |
|
|
4,100 |
|
| Income tax expenses |
|
2,127 |
|
|
2,131 |
|
|
1,284 |
|
|
1,136 |
|
|
(57 |
) |
| Non-GAAP PTPP
income |
|
$ |
8,721 |
|
|
$ |
8,870 |
|
|
$ |
7,583 |
|
|
$ |
8,086 |
|
|
$ |
6,791 |
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP ROAA |
|
1.22 |
% |
|
1.18 |
% |
|
0.73 |
% |
|
0.69 |
% |
|
0.61 |
% |
| Pre-tax Pre-Provision
ROAA |
|
1.68 |
% |
|
1.71 |
% |
|
1.46 |
% |
|
1.62 |
% |
|
1.51 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| GAAP ROACE |
|
12.53 |
% |
|
12.51 |
% |
|
7.86 |
% |
|
7.27 |
% |
|
6.00 |
% |
| Pre-tax Pre-Provision
ROACE |
|
17.34 |
% |
|
18.08 |
% |
|
15.69 |
% |
|
17.03 |
% |
|
14.82 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| ROATCE |
|
13.56 |
% |
|
13.58 |
% |
|
8.65 |
% |
|
8.05 |
% |
|
6.69 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Average assets |
|
$ |
2,070,575 |
|
|
$ |
2,074,707 |
|
|
$ |
2,071,487 |
|
|
$ |
1,995,552 |
|
|
$ |
1,797,426 |
|
| Average equity |
|
$ |
201,124 |
|
|
$ |
196,279 |
|
|
$ |
193,351 |
|
|
$ |
189,890 |
|
|
$ |
183,272 |
|
| Average tangible common
equity |
|
$ |
188,808 |
|
|
$ |
183,827 |
|
|
$ |
180,755 |
|
|
$ |
177,146 |
|
|
$ |
170,373 |
|
AVERAGE CONSOLIDATED BALANCE SHEETS AND
NET INTEREST INCOME (UNAUDITED)
| |
|
For the Three Months Ended March 31, |
|
For the Three Months Ended |
| |
|
2021 |
|
2020 |
|
March 31, 2021 |
|
December 31, 2020 |
|
(dollars in thousands) |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,059,803 |
|
|
|
$ |
10,696 |
|
|
4.04 |
% |
|
$ |
955,035 |
|
|
|
$ |
11,245 |
|
|
4.71 |
% |
|
$ |
1,059,803 |
|
|
|
$ |
10,696 |
|
|
4.04 |
% |
|
$ |
1,027,831 |
|
|
|
$ |
10,833 |
|
|
4.22 |
% |
|
Residential first mortgages |
|
124,984 |
|
|
|
914 |
|
|
2.93 |
% |
|
170,994 |
|
|
|
1,512 |
|
|
3.54 |
% |
|
124,984 |
|
|
|
914 |
|
|
2.93 |
% |
|
140,303 |
|
|
|
1,132 |
|
|
3.23 |
% |
|
Residential rentals |
|
139,220 |
|
|
|
1,445 |
|
|
4.15 |
% |
|
131,920 |
|
|
|
1,353 |
|
|
4.10 |
% |
|
139,220 |
|
|
|
1,445 |
|
|
4.15 |
% |
|
134,564 |
|
|
|
1,468 |
|
|
4.36 |
% |
|
Construction and land development |
|
36,091 |
|
|
|
402 |
|
|
4.46 |
% |
|
37,106 |
|
|
|
467 |
|
|
5.03 |
% |
|
36,091 |
|
|
|
402 |
|
|
4.46 |
% |
|
35,910 |
|
|
|
435 |
|
|
4.85 |
% |
|
Home equity and second mortgages |
|
29,272 |
|
|
|
248 |
|
|
3.39 |
% |
|
36,028 |
|
|
|
453 |
|
|
5.03 |
% |
|
29,272 |
|
|
|
248 |
|
|
3.39 |
% |
|
30,045 |
|
|
|
268 |
|
|
3.57 |
% |
|
Commercial and equipment loans |
|
105,284 |
|
|
|
1,070 |
|
|
4.07 |
% |
|
126,535 |
|
|
|
1,459 |
|
|
4.61 |
% |
|
105,284 |
|
|
|
1,070 |
|
|
4.07 |
% |
|
107,245 |
|
|
|
1,320 |
|
|
4.92 |
% |
|
U.S. SBA PPP loans |
|
116,003 |
|
|
|
1,802 |
|
|
6.21 |
% |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
116,003 |
|
|
|
1,802 |
|
|
6.21 |
% |
|
120,473 |
|
|
|
1,308 |
|
|
4.34 |
% |
|
Consumer loans |
|
1,320 |
|
|
|
15 |
|
|
4.55 |
% |
|
1,118 |
|
|
|
13 |
|
|
4.65 |
% |
|
1,320 |
|
|
|
15 |
|
|
4.55 |
% |
|
1,058 |
|
|
|
12 |
|
|
4.54 |
% |
|
Allowance for loan losses |
|
(19,614 |
) |
|
|
— |
|
|
0.00 |
% |
|
(11,203 |
) |
|
|
— |
|
|
0.00 |
% |
|
(19,614 |
) |
|
|
— |
|
|
0.00 |
% |
|
(19,138 |
) |
|
|
— |
|
|
0.00 |
% |
| Loan portfolio (1) |
|
$ |
1,592,363 |
|
|
|
$ |
16,592 |
|
|
4.17 |
% |
|
$ |
1,447,533 |
|
|
|
$ |
16,502 |
|
|
4.56 |
% |
|
$ |
1,592,363 |
|
|
|
$ |
16,592 |
|
|
4.17 |
% |
|
$ |
1,578,291 |
|
|
|
$ |
16,776 |
|
|
4.25 |
% |
| Taxable investment
securities |
|
229,810 |
|
|
|
951 |
|
|
1.66 |
% |
|
215,500 |
|
|
|
1,482 |
|
|
2.75 |
% |
|
229,810 |
|
|
|
951 |
|
|
1.66 |
% |
|
211,101 |
|
|
|
978 |
|
|
1.85 |
% |
| Nontaxable investment
securities |
|
20,841 |
|
|
|
114 |
|
|
2.19 |
% |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
20,841 |
|
|
|
114 |
|
|
2.19 |
% |
|
20,378 |
|
|
|
113 |
|
|
2.22 |
% |
| Interest-bearing deposits in
other banks |
|
25,064 |
|
|
|
14 |
|
|
0.22 |
% |
|
6,547 |
|
|
|
39 |
|
|
2.38 |
% |
|
25,064 |
|
|
|
14 |
|
|
0.22 |
% |
|
28,970 |
|
|
|
23 |
|
|
0.32 |
% |
| Federal funds sold |
|
18,721 |
|
|
|
7 |
|
|
0.15 |
% |
|
4,028 |
|
|
|
16 |
|
|
1.59 |
% |
|
18,721 |
|
|
|
7 |
|
|
0.15 |
% |
|
42,841 |
|
|
|
23 |
|
|
0.21 |
% |
| Total Interest-Earning
Assets |
|
1,886,799 |
|
|
|
17,678 |
|
|
3.75 |
% |
|
1,673,608 |
|
|
|
18,039 |
|
|
4.31 |
% |
|
1,886,799 |
|
|
|
17,678 |
|
|
3.75 |
% |
|
1,881,581 |
|
|
|
17,913 |
|
|
3.81 |
% |
| Cash and cash equivalents |
|
82,669 |
|
|
|
|
|
|
|
24,108 |
|
|
|
|
|
|
|
82,669 |
|
|
|
|
|
|
|
88,963 |
|
|
|
|
|
|
| Goodwill |
|
10,835 |
|
|
|
|
|
|
|
10,835 |
|
|
|
|
|
|
|
10,835 |
|
|
|
|
|
|
|
10,835 |
|
|
|
|
|
|
| Core deposit intangible |
|
1,481 |
|
|
|
|
|
|
|
2,064 |
|
|
|
|
|
|
|
1,481 |
|
|
|
|
|
|
|
1,617 |
|
|
|
|
|
|
| Other assets |
|
88,791 |
|
|
|
|
|
|
|
86,811 |
|
|
|
|
|
|
|
88,791 |
|
|
|
|
|
|
|
91,711 |
|
|
|
|
|
|
| Total
Assets |
|
$ |
2,070,575 |
|
|
|
|
|
|
|
$ |
1,797,426 |
|
|
|
|
|
|
|
$ |
2,070,575 |
|
|
|
|
|
|
|
$ |
2,074,707 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing demand
deposits |
|
$ |
381,059 |
|
|
|
$ |
— |
|
|
0.00 |
% |
|
$ |
246,304 |
|
|
|
$ |
— |
|
|
0.00 |
% |
|
$ |
381,059 |
|
|
|
$ |
— |
|
|
0.00 |
% |
|
$ |
366,726 |
|
|
|
$ |
— |
|
|
0.00 |
% |
| Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
101,782 |
|
|
|
13 |
|
|
0.05 |
% |
|
71,086 |
|
|
|
18 |
|
|
0.10 |
% |
|
101,782 |
|
|
|
13 |
|
|
0.05 |
% |
|
96,529 |
|
|
|
17 |
|
|
0.07 |
% |
|
Interest-bearing demand and money market accounts |
|
952,554 |
|
|
|
195 |
|
|
0.08 |
% |
|
784,758 |
|
|
|
1,324 |
|
|
0.67 |
% |
|
952,554 |
|
|
|
195 |
|
|
0.08 |
% |
|
948,449 |
|
|
|
268 |
|
|
0.11 |
% |
|
Certificates of deposit |
|
351,365 |
|
|
|
594 |
|
|
0.68 |
% |
|
390,528 |
|
|
|
1,702 |
|
|
1.74 |
% |
|
351,365 |
|
|
|
594 |
|
|
0.68 |
% |
|
356,261 |
|
|
|
881 |
|
|
0.99 |
% |
| Total interest-bearing
deposits |
|
1,405,701 |
|
|
|
802 |
|
|
0.23 |
% |
|
1,246,372 |
|
|
|
3,044 |
|
|
0.98 |
% |
|
1,405,701 |
|
|
|
802 |
|
|
0.23 |
% |
|
1,401,239 |
|
|
|
1,166 |
|
|
0.33 |
% |
| Total Deposits |
|
1,786,760 |
|
|
|
802 |
|
|
0.18 |
% |
|
1,492,676 |
|
|
|
3,044 |
|
|
0.82 |
% |
|
1,786,760 |
|
|
|
802 |
|
|
0.18 |
% |
|
1,767,965 |
|
|
|
1,166 |
|
|
0.26 |
% |
| Long-term debt |
|
27,291 |
|
|
|
41 |
|
|
0.60 |
% |
|
55,095 |
|
|
|
260 |
|
|
1.89 |
% |
|
27,291 |
|
|
|
41 |
|
|
0.60 |
% |
|
28,341 |
|
|
|
457 |
|
|
6.45 |
% |
| Short-term debt |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
16,533 |
|
|
|
69 |
|
|
1.67 |
% |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
— |
|
|
|
— |
|
|
0.00 |
% |
| PPPLF Advance |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
— |
|
|
|
— |
|
|
0.00 |
% |
|
32,677 |
|
|
|
29 |
|
|
0.35 |
% |
| Subordinated Notes |
|
19,490 |
|
|
|
251 |
|
|
5.15 |
% |
|
14,912 |
|
|
|
184 |
|
|
4.94 |
% |
|
19,490 |
|
|
|
251 |
|
|
5.15 |
% |
|
16,888 |
|
|
|
211 |
|
|
5.00 |
% |
| Guaranteed preferred
beneficial interest in junior subordinated debentures |
|
12,000 |
|
|
|
75 |
|
|
2.50 |
% |
|
12,000 |
|
|
|
129 |
|
|
4.30 |
% |
|
12,000 |
|
|
|
75 |
|
|
2.50 |
% |
|
12,000 |
|
|
|
78 |
|
|
2.60 |
% |
| Total Debt |
|
58,781 |
|
|
|
367 |
|
|
2.50 |
% |
|
98,540 |
|
|
|
642 |
|
|
2.61 |
% |
|
58,781 |
|
|
|
367 |
|
|
2.50 |
% |
|
89,906 |
|
|
|
775 |
|
|
3.45 |
% |
| Interest-Bearing
Liabilities |
|
1,464,482 |
|
|
|
1,169 |
|
|
0.32 |
% |
|
1,344,912 |
|
|
|
3,686 |
|
|
1.10 |
% |
|
1,464,482 |
|
|
|
1,169 |
|
|
0.32 |
% |
|
1,491,145 |
|
|
|
1,941 |
|
|
0.52 |
% |
| Total Funds |
|
1,845,541 |
|
|
|
1,169 |
|
|
0.25 |
% |
|
1,591,216 |
|
|
|
3,686 |
|
|
0.93 |
% |
|
1,845,541 |
|
|
|
1,169 |
|
|
0.25 |
% |
|
1,857,871 |
|
|
|
1,941 |
|
|
0.42 |
% |
| Other liabilities |
|
23,910 |
|
|
|
|
|
|
|
22,938 |
|
|
|
|
|
|
|
23,910 |
|
|
|
|
|
|
|
20,557 |
|
|
|
|
|
|
| Stockholders' equity |
|
201,124 |
|
|
|
|
|
|
|
183,272 |
|
|
|
|
|
|
|
201,124 |
|
|
|
|
|
|
|
196,279 |
|
|
|
|
|
|
| Total Liabilities and
Stockholders' Equity |
|
$ |
2,070,575 |
|
|
|
|
|
|
|
$ |
1,797,426 |
|
|
|
|
|
|
|
$ |
2,070,575 |
|
|
|
|
|
|
|
$ |
2,074,707 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
|
$ |
16,509 |
|
|
|
|
|
|
$ |
14,353 |
|
|
|
|
|
|
$ |
16,509 |
|
|
|
|
|
|
$ |
15,972 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest rate spread |
|
|
|
|
|
3.43 |
% |
|
|
|
|
|
3.22 |
% |
|
|
|
|
|
3.43 |
% |
|
|
|
|
|
3.29 |
% |
| Net yield on interest-earning
assets |
|
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.43 |
% |
|
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.40 |
% |
| Average interest-earning
assets to average interest-bearing liabilities |
|
|
|
|
|
128.84 |
% |
|
|
|
|
|
124.44 |
% |
|
|
|
|
|
128.84 |
% |
|
|
|
|
|
126.18 |
% |
| Average loans to average
deposits |
|
|
|
|
|
89.12 |
% |
|
|
|
|
|
96.98 |
% |
|
|
|
|
|
89.12 |
% |
|
|
|
|
|
89.27 |
% |
| Average transaction deposits
to total average deposits ** |
|
|
|
|
|
80.34 |
% |
|
|
|
|
|
73.84 |
% |
|
|
|
|
|
80.34 |
% |
|
|
|
|
|
79.85 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of funds |
|
|
|
|
|
0.25 |
% |
|
|
|
|
|
0.93 |
% |
|
|
|
|
|
0.25 |
% |
|
|
|
|
|
0.42 |
% |
| Cost of deposits |
|
|
|
|
|
0.18 |
% |
|
|
|
|
|
0.82 |
% |
|
|
|
|
|
0.18 |
% |
|
|
|
|
|
0.26 |
% |
| Cost of debt |
|
|
|
|
|
2.50 |
% |
|
|
|
|
|
2.61 |
% |
|
|
|
|
|
2.50 |
% |
|
|
|
|
|
3.45 |
% |
(1) Loan average balance includes non-accrual
loans. There are no tax equivalency adjustments. There was $90,000,
$222,000 and $96,000 of accretion interest for the three months
ended March 31, 2021 and 2020, and December 31, 2020,
respectively.
** Transaction deposits exclude time
deposits.
SUMMARY OF LOAN PORTFOLIO
(UNAUDITED)(dollars in thousands)
|
BY LOAN TYPE |
|
March 31, 2021 |
|
% |
|
December 31, 2020 |
|
% |
|
September 30, 2020 |
|
% |
|
June 30, 2020 |
|
% |
|
March 31, 2020 |
|
% |
|
Portfolio Type: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,081,111 |
|
|
|
71.74 |
% |
|
$ |
1,049,147 |
|
|
|
69.75 |
% |
|
$ |
1,021,987 |
|
|
|
68.29 |
% |
|
$ |
996,111 |
|
|
|
66.73 |
% |
|
$ |
977,678 |
|
|
|
65.61 |
% |
|
Residential first mortgages |
|
115,803 |
|
|
|
7.68 |
% |
|
133,779 |
|
|
|
8.89 |
% |
|
147,756 |
|
|
|
9.87 |
% |
|
165,670 |
|
|
|
11.10 |
% |
|
170,795 |
|
|
|
11.46 |
% |
|
Residential rentals |
|
137,522 |
|
|
|
9.12 |
% |
|
139,059 |
|
|
|
9.24 |
% |
|
137,950 |
|
|
|
9.22 |
% |
|
132,590 |
|
|
|
8.88 |
% |
|
133,016 |
|
|
|
8.93 |
% |
|
Construction and land development |
|
38,446 |
|
|
|
2.55 |
% |
|
37,520 |
|
|
|
2.49 |
% |
|
36,061 |
|
|
|
2.41 |
% |
|
37,580 |
|
|
|
2.52 |
% |
|
38,627 |
|
|
|
2.59 |
% |
|
Home equity and second mortgages |
|
29,363 |
|
|
|
1.95 |
% |
|
29,129 |
|
|
|
1.94 |
% |
|
31,427 |
|
|
|
2.10 |
% |
|
33,873 |
|
|
|
2.27 |
% |
|
35,937 |
|
|
|
2.41 |
% |
|
Commercial loans |
|
42,689 |
|
|
|
2.83 |
% |
|
52,921 |
|
|
|
3.52 |
% |
|
58,894 |
|
|
|
3.94 |
% |
|
63,249 |
|
|
|
4.24 |
% |
|
70,971 |
|
|
|
4.76 |
% |
|
Consumer loans |
|
1,415 |
|
|
|
0.09 |
% |
|
1,027 |
|
|
|
0.07 |
% |
|
1,081 |
|
|
|
0.07 |
% |
|
1,117 |
|
|
|
0.07 |
% |
|
1,134 |
|
|
|
0.08 |
% |
|
Commercial equipment |
|
60,834 |
|
|
|
4.04 |
% |
|
61,693 |
|
|
|
4.10 |
% |
|
61,376 |
|
|
|
4.10 |
% |
|
62,555 |
|
|
|
4.19 |
% |
|
61,931 |
|
|
|
4.16 |
% |
| Gross portfolio loans |
|
1,507,183 |
|
|
|
100.00 |
% |
|
1,504,275 |
|
|
|
100.00 |
% |
|
1,496,532 |
|
|
|
100.00 |
% |
|
1,492,745 |
|
|
|
100.00 |
% |
|
1,490,089 |
|
|
|
100.00 |
% |
| Net deferred costs |
|
879 |
|
|
|
0.08 |
% |
|
1,264 |
|
|
|
0.08 |
% |
|
1,610 |
|
|
|
0.11 |
% |
|
2,072 |
|
|
|
0.14 |
% |
|
2,059 |
|
|
|
0.14 |
% |
| Allowance for loan losses |
|
(18,256 |
) |
|
|
(1.21 |
)% |
|
(19,424 |
) |
|
|
(1.29 |
)% |
|
(18,829 |
) |
|
|
(1.26 |
)% |
|
(16,319 |
) |
|
|
(1.09 |
)% |
|
(15,061 |
) |
|
|
(1.01 |
)% |
| |
|
(17,377 |
) |
|
|
|
|
(18,160 |
) |
|
|
|
|
(17,219 |
) |
|
|
|
|
(14,247 |
) |
|
|
|
|
(13,002 |
) |
|
|
|
| Net portfolio loans |
|
$ |
1,489,806 |
|
|
|
|
|
$ |
1,486,115 |
|
|
|
|
|
$ |
1,479,313 |
|
|
|
|
|
$ |
1,478,498 |
|
|
|
|
|
$ |
1,477,087 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. SBA PPP loans |
|
$ |
115,700 |
|
|
|
|
|
$ |
110,320 |
|
|
|
|
|
$ |
131,088 |
|
|
|
|
|
$ |
129,384 |
|
|
|
|
|
$ |
— |
|
|
|
|
| Net deferred fees |
|
(3,215 |
) |
|
|
|
|
(2,360 |
) |
|
|
|
|
(3,277 |
) |
|
|
|
|
(3,746 |
) |
|
|
|
|
— |
|
|
|
|
| Net U.S. SBA PPP loans |
|
$ |
112,485 |
|
|
|
|
|
$ |
107,960 |
|
|
|
|
|
$ |
127,811 |
|
|
|
|
|
$ |
125,638 |
|
|
|
|
|
$ |
— |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total net loans |
|
$ |
1,602,291 |
|
|
|
|
|
$ |
1,594,075 |
|
|
|
|
|
$ |
1,607,124 |
|
|
|
|
|
$ |
1,604,136 |
|
|
|
|
|
$ |
1,477,087 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross loans |
|
$ |
1,622,883 |
|
|
|
|
|
$ |
1,614,595 |
|
|
|
|
|
$ |
1,627,620 |
|
|
|
|
|
$ |
1,622,129 |
|
|
|
|
|
$ |
1,490,089 |
|
|
|
|
END OF PERIOD CONTRACTUAL RATES
(UNAUDITED)
The following table is based on contractual
interest rates and does not include the amortization of deferred
costs and fees or assumptions regarding non-accrual
interest:
| |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
(dollars in thousands) |
|
EOP ContractualInterest rate |
|
EOP ContractualInterest rate |
|
EOP ContractualInterest rate |
|
EOP ContractualInterest rate |
|
EOP ContractualInterest rate |
|
Commercial real estate |
|
4.02 |
% |
|
4.11 |
% |
|
4.20 |
% |
|
4.32 |
% |
|
4.52 |
% |
| Residential first
mortgages |
|
3.87 |
% |
|
3.93 |
% |
|
3.93 |
% |
|
3.93 |
% |
|
3.93 |
% |
| Residential rentals |
|
4.20 |
% |
|
4.26 |
% |
|
4.30 |
% |
|
4.45 |
% |
|
4.69 |
% |
| Construction and land
development |
|
4.32 |
% |
|
4.28 |
% |
|
4.40 |
% |
|
4.46 |
% |
|
5.02 |
% |
| Home equity and second
mortgages |
|
3.52 |
% |
|
3.54 |
% |
|
3.56 |
% |
|
3.56 |
% |
|
4.89 |
% |
| Commercial loans |
|
4.63 |
% |
|
4.56 |
% |
|
4.51 |
% |
|
4.53 |
% |
|
4.92 |
% |
| Consumer loans |
|
5.75 |
% |
|
5.99 |
% |
|
5.94 |
% |
|
6.05 |
% |
|
6.17 |
% |
| Commercial equipment |
|
4.40 |
% |
|
4.42 |
% |
|
4.42 |
% |
|
4.44 |
% |
|
4.46 |
% |
| U.S. SBA PPP loans |
|
1.00 |
% |
|
1.00 |
% |
|
1.00 |
% |
|
1.00 |
% |
|
0.00 |
% |
| Total
Loans |
|
3.84 |
% |
|
3.92 |
% |
|
3.94 |
% |
|
4.03 |
% |
|
4.51 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Yields without U.S.
SBA PPP Loans |
|
4.06 |
% |
|
4.13 |
% |
|
4.20 |
% |
|
4.29 |
% |
|
0.00 |
% |
ALLOWANCE FOR LOAN LOSSES
(UNAUDITED)
|
(dollars in thousands) |
|
For the Three Months Ended |
| |
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
Beginning of period |
|
$ |
19,424 |
|
|
$ |
18,829 |
|
|
$ |
16,319 |
|
|
$ |
15,061 |
|
|
$ |
10,942 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Charge-offs |
|
(1,485 |
) |
|
(30 |
) |
|
(65 |
) |
|
(2,262 |
) |
|
— |
|
| Recoveries |
|
22 |
|
|
25 |
|
|
75 |
|
|
20 |
|
|
19 |
|
| Net charge-offs |
|
(1,463 |
) |
|
(5 |
) |
|
10 |
|
|
(2,242 |
) |
|
19 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Provision for loan losses |
|
295 |
|
|
600 |
|
|
2,500 |
|
|
3,500 |
|
|
4,100 |
|
| End of period |
|
$ |
18,256 |
|
|
$ |
19,424 |
|
|
$ |
18,829 |
|
|
$ |
16,319 |
|
|
$ |
15,061 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net charge-offs to average
portfolio loans (annualized)1 |
|
(0.40 |
)% |
|
— |
% |
|
— |
% |
|
(0.61 |
)% |
|
0.01 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Breakdown
of general and specific allowance as a percentage of gross
portfolio loans1 |
|
|
|
|
|
|
|
|
| General allowance |
|
$ |
17,365 |
|
|
$ |
18,068 |
|
|
$ |
18,319 |
|
|
$ |
16,215 |
|
|
$ |
13,412 |
|
| Specific allowance |
|
891 |
|
|
1,356 |
|
|
510 |
|
|
104 |
|
|
1,649 |
|
| |
|
$ |
18,256 |
|
|
$ |
19,424 |
|
|
$ |
18,829 |
|
|
$ |
16,319 |
|
|
$ |
15,061 |
|
| |
|
|
|
|
|
|
|
|
|
|
| General allowance |
|
1.15 |
% |
|
1.20 |
% |
|
1.22 |
% |
|
1.09 |
% |
|
|
0.90 |
% |
| Specific allowance |
|
0.06 |
% |
|
0.09 |
% |
|
0.03 |
% |
|
0.01 |
% |
|
|
0.11 |
% |
| Allowance to gross portfolio
loans |
|
1.21 |
% |
|
1.29 |
% |
|
1.26 |
% |
|
1.09 |
% |
|
1.01 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Allowance to non-acquired
gross loans |
|
1.26 |
% |
|
1.35 |
% |
|
1.31 |
% |
|
1.14 |
% |
|
1.06 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Allowance+ Non-PCI FV
Mark |
|
$ |
18,939 |
|
|
$ |
20,174 |
|
|
$ |
19,643 |
|
|
$ |
17,208 |
% |
|
$ |
16,096 |
|
| Allowance+ Non-PCI FV Mark to
gross portfolio loans |
|
1.26 |
% |
|
1.34 |
% |
|
1.31 |
% |
|
1.15 |
% |
|
1.08 |
% |
_______________________________1 Portfolio loans
include all loan portfolios except the U.S. SBA PPP loan
portfolio
Below are several schedules that provide
information on the COVID-19 deferred loans. The schedules summarize
the COVID-19 loan modifications by loan portfolio, maturity or next
payment due dates and the Banks's industry classification using the
North American Industry Classification System ("NAICS"). The NAICS
is the standard used by Federal statistical agencies in classifying
business establishments for the purpose of collecting, analyzing,
and publishing statistical data related to the U.S. business
economy.
| |
|
(UNAUDITED) |
|
COVID-19 Deferred Loans |
|
March 31, 2021 |
|
Accrual Loans |
|
Non-Accrual Loans |
|
(dollars in thousands) |
|
Loan Balances |
|
% of DeferredLoans |
|
% of Gross PortfolioLoans |
|
Loan Balances |
|
Number of Loans |
|
Loan Balances |
|
Number of Loans |
|
Commercial real estate |
|
$ |
17,970 |
|
|
77.71 |
% |
|
1.19 |
% |
|
$ |
16,993 |
|
|
5 |
|
$ |
977 |
|
|
1 |
|
| Residential first
mortgages |
|
1,402 |
|
|
6.06 |
% |
|
0.09 |
% |
|
1,402 |
|
|
3 |
|
— |
|
|
— |
|
| Commercial equipment |
|
3,754 |
|
|
16.23 |
% |
|
0.25 |
% |
|
3,754 |
|
|
15 |
|
— |
|
|
— |
|
| Total |
|
$ |
23,126 |
|
|
100.00 |
% |
|
1.53 |
% |
|
$ |
22,149 |
|
|
23 |
|
$ |
977 |
|
|
1 |
|
|
COVID-19 Deferred Loans - Scheduled Month off
Deferral |
|
(UNAUDITED) |
|
(dollars in thousands) |
|
Loan Balances |
|
% |
|
Number of Loans |
|
April-21 |
|
$ |
5,305 |
|
|
22.94 |
% |
|
5 |
| May-21 |
|
9,736 |
|
|
42.10 |
% |
|
4 |
| June-21 |
|
4,580 |
|
|
19.80 |
% |
|
4 |
| December-21 |
|
3,505 |
|
|
15.16 |
% |
|
11 |
| Total |
|
$ |
23,126 |
|
|
100.00 |
% |
|
24 |
|
COVID-19 Deferred Loans by NAICS Industry |
|
(UNAUDITED) |
|
(dollars in thousands) |
|
March 31, 2021 |
|
Number of Loans |
|
Real Estate Rental and Leasing |
|
$ |
5,257 |
|
|
1 |
| Accommodation and Food
Services |
|
11,599 |
|
|
4 |
| Arts, Entertainment, and
Recreation |
|
977 |
|
|
1 |
| Transportation and
Warehousing |
|
3,505 |
|
|
11 |
| Retail Trade |
|
386 |
|
|
4 |
| Other Industries, Residential
Mortgages and Consumer ** |
|
1,402 |
|
|
3 |
| Total |
|
$ |
23,126 |
|
|
24 |
| ** No NAICS code has been
assigned. |
|
|
|
|
CLASSIFIED AND SPECIAL MENTION ASSETS
(UNAUDITED)
The following is a breakdown of the Company’s classified and
special mention assets at March 31, 2021
and December 31, 2020, 2019, 2018, and 2017,
respectively:
| |
|
As of |
|
(dollars in thousands) |
|
3/31/2021 |
|
12/31/2020 |
|
12/31/2019 |
|
12/31/2018 |
|
12/31/2017 |
|
Classified loans |
|
|
|
|
|
|
|
|
|
|
|
Substandard |
|
$ |
13,816 |
|
|
$ |
19,249 |
|
|
$ |
26,863 |
|
|
$ |
32,226 |
|
|
$ |
40,306 |
|
|
Doubtful |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total classified loans |
|
13,816 |
|
|
19,249 |
|
|
26,863 |
|
|
32,226 |
|
|
40,306 |
|
| Special mention loans |
|
7,769 |
|
|
7,672 |
|
|
— |
|
|
— |
|
|
96 |
|
| Total classified and special
mention loans |
|
$ |
21,585 |
|
|
$ |
26,921 |
|
|
$ |
26,863 |
|
|
$ |
32,226 |
|
|
$ |
40,402 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Classified loans |
|
$ |
13,816 |
|
|
$ |
19,249 |
|
|
$ |
26,863 |
|
|
$ |
32,226 |
|
|
$ |
40,306 |
|
| Classified securities |
|
— |
|
|
— |
|
|
— |
|
|
482 |
|
|
651 |
|
| Other real estate owned |
|
2,329 |
|
|
3,109 |
|
|
7,773 |
|
|
8,111 |
|
|
9,341 |
|
| Total classified assets |
|
$ |
16,145 |
|
|
$ |
22,358 |
|
|
$ |
34,636 |
|
|
$ |
40,819 |
|
|
$ |
50,298 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Total classified
assets as a percentage of total assets |
|
0.75 |
% |
|
1.10 |
% |
|
1.93 |
% |
|
2.42 |
% |
|
3.58 |
% |
| Total classified
assets as a percentage of Risk Based Capital |
|
6.81 |
% |
|
9.61 |
% |
|
16.21 |
% |
|
21.54 |
% |
|
32.10 |
% |
SUMMARY OF DEPOSITS
(UNAUDITED)
| |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
(dollars in thousands) |
|
Balance |
|
% |
|
Balance |
|
% |
|
Balance |
|
% |
|
Balance |
|
% |
|
Balance |
|
% |
|
Noninterest-bearing demand |
|
$ |
406,319 |
|
|
21.75 |
% |
|
$ |
362,079 |
|
|
20.74 |
% |
|
$ |
360,839 |
|
|
20.28 |
% |
|
$ |
356,196 |
|
|
21.32 |
% |
|
$ |
254,114 |
|
|
16.80 |
% |
| Interest-bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
651,639 |
|
|
34.89 |
% |
|
590,159 |
|
|
33.81 |
% |
|
635,176 |
|
|
35.69 |
% |
|
547,639 |
|
|
32.79 |
% |
|
517,069 |
|
|
34.19 |
% |
|
Money market deposits |
|
355,680 |
|
|
19.04 |
% |
|
340,725 |
|
|
19.52 |
% |
|
329,617 |
|
|
18.52 |
% |
|
314,781 |
|
|
18.85 |
% |
|
281,656 |
|
|
18.62 |
% |
|
Savings |
|
105,590 |
|
|
5.65 |
% |
|
98,783 |
|
|
5.66 |
% |
|
90,514 |
|
|
5.09 |
% |
|
85,257 |
|
|
5.10 |
% |
|
73,874 |
|
|
4.88 |
% |
|
Certificates of deposit |
|
348,668 |
|
|
18.67 |
% |
|
353,856 |
|
|
20.27 |
% |
|
363,460 |
|
|
20.42 |
% |
|
366,491 |
|
|
21.94 |
% |
|
385,876 |
|
|
25.51 |
% |
| Total interest-bearing |
|
1,461,577 |
|
|
78.25 |
% |
|
1,383,523 |
|
|
79.26 |
% |
|
1,418,767 |
|
|
79.72 |
% |
|
1,314,168 |
|
|
78.68 |
% |
|
1,258,475 |
|
|
83.20 |
% |
| Total Deposits |
|
$ |
1,867,896 |
|
|
100.00 |
% |
|
$ |
1,745,602 |
|
|
100.00 |
% |
|
$ |
1,779,606 |
|
|
100.00 |
% |
|
$ |
1,670,364 |
|
|
100.00 |
% |
|
$ |
1,512,589 |
|
|
100.00 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Transaction
accounts |
|
$ |
1,519,228 |
|
|
81.33 |
% |
|
$ |
1,391,746 |
|
|
79.73 |
% |
|
$ |
1,416,146 |
|
|
79.58 |
% |
|
$ |
1,303,873 |
|
|
78.06 |
% |
|
$ |
1,126,713 |
|
|
74.49 |
% |
Community Financial (NASDAQ:TCFC)
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