Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - Paragon Commercial CORP | pbnc_8k.htm |
Exhibit 99.1
NEWS RELEASE
Paragon Commercial Corporation Reports Loan Growth of
9%
for the Second Quarter of 2017
Highlights:
■
Loan growth of
$108.9 million in the second quarter of 2017, an increase of 13%
year-to-date
■
Credit quality
remains strong with nonperforming loans at only 0.04% of total
loans and no accruing loans past due greater than 30 days at June
30, 2017
■
Net interest income
of $13.0 million for the second quarter of 2017, an increase of 15%
over the same period in the prior year
■
Second quarter 2017
net income of $3.3 million, only a $192,000 decrease over the same
period in the prior year despite a $650,000 increase in loan loss
provisions and $368,000 in merger related costs
■
Second quarter 2017
ROAA of 0.83% and ROAE of 9.19%
RALEIGH,
N.C., July 19, 2017 – Paragon Commercial Corporation (the
“Company”) (Nasdaq: PBNC), parent company of Paragon
Bank (the “Bank”), today reported unaudited financial
results for the three-month period ended June 30, 2017. Net income
during the three-month period decreased 6% to $3.3 million compared
to $3.5 million for the same period in 2016. The decrease in
earnings was primarily driven by a $650,000 loan loss provision as
the Company increased its allowance for loan losses commensurate
with loan growth. There were no such loan loss provisions recorded
during the same period in 2016. In addition, the Company incurred
$368,000 in costs directly attributable to its pending merger with
TowneBank. These increased costs were mostly offset by an increase
in net interest income which was a result of continued loan growth.
Fully diluted earnings per share (“EPS”) were $0.61 for
the second quarter of 2017 compared to $0.75 for the same period in
2016. The decrease in EPS was directly attributable to the impact
on average shares outstanding as a result of the additional shares
issued as a result of the Company’s initial public offering
(“IPO”) and listing on Nasdaq during the second quarter
of 2016.
“Paragon’s
loan growth continues to be outstanding. A major driver in the
pending merger with TowneBank is our ability to generate growth in
our loan portfolio to take advantage of our dynamic markets,”
said Robert C. Hatley, President and CEO.
The
annualized return on average assets for the second quarter of 2017
was 0.83% and the annualized return on average equity was 9.19%,
compared to 1.00% and 13.41%, respectively, for the same ratios in
the second quarter of 2016. Those ratios were impacted by the
additional capital as a result of the IPO as well as the added loan
loss provisions and merger related costs previously
discussed.
Consolidated Assets
Total
consolidated assets on June 30, 2017 were $1.64 billion compared to
$1.50 billion as of December 31, 2016. Assets increased during the
quarter by $85.5 million primarily as a result of strong loan
demand.
Loan Portfolio
Loans
outstanding increased by $108.9 million during the second quarter
from $1.23 billion at March 31, 2017 to $1.34 billion at June 30,
2017. For the six months ended June 30, 2017, loans have increased
$148.6 million, an annualized rate of 25.0%. All loan categories
experienced strong growth except construction and land development,
which decreased $7.9 million during the second quarter of 2017.
Growth for the other loan categories for the same period was as
follows: commercial real estate - $41.7 million, owner occupied
commercial real estate - $9.7 million, multifamily - $14.7 million,
consumer real estate - $24.5 million, commercial and industrial -
$19.1 million and consumer and other loans - $7.1 million. The
Company continues to see strong loan growth throughout the Raleigh,
Charlotte and Cary markets.
Page 1
Deposit Portfolio
Total
deposits decreased by $90.1 million during the second quarter
offsetting strong deposit growth in the first quarter. The first
quarter’s growth was primarily driven by temporary increases
in the balances of several existing deposit customers. For the
year, deposits are up $2.5 million despite the Company’s
continued effort to pay down wholesale deposits which have
decreased by $36.8 million year-to-date. During the second quarter,
demand account balances decreased $22.0 million and money market
and interest checking accounts decreased $54.5 million. In
addition, time deposits decreased $13.7 million, as the Company
reduced its brokered deposit portfolio by $15.0 million or 27%. The
decline in deposits required the Company to increase its Federal
Home Loan Bank advances by $170.0 million during the
quarter.
Credit Quality
The
Company recorded a $650,000 loan loss provision for the second
quarter of 2017 as a result of the growth in total loans. There was
no provision for loan losses for the quarter ended June 30, 2016.
The allowance for loan losses as a percentage of total loans at
June 30, 2017 and December 31, 2016 was 0.67% and 0.66%,
respectively.
Asset
quality continued to remain strong as nonperforming loans were
0.04% of total loans at June 30, 2017. There were no loans past due
30 days or greater at quarter-end and the ratio of total
nonperforming assets to total assets including foreclosed real
estate was 0.32%.
Net Interest Income
Net
interest income increased by $1.7 million or 15% during the second
quarter of 2017 compared to the second quarter of 2016. Net
interest income totaled $13.0 million during the period,
representing a net interest margin of 3.51% on a tax-equivalent
basis, which was down 0.04% when compared to 3.55% in the second
quarter of 2016. Net interest margin decreased primarily as a
result of increased rates in FHLB borrowings as a result of the
recent moves in target rates by the Federal Reserve.
Non-Interest Income
For the
second quarter of 2017, non-interest income was $494,000, compared
to $381,000 for the same period in 2016. The second quarter of 2016
was negatively impacted by $45,000 in write-downs or loss on sale
of foreclosed real estate. There were no losses on foreclosed real
estate in the second quarter of 2017.
Non-Interest Expense
Non-interest
expenses in the second quarter of 2017 were $7.9 million compared
to $6.5 million in the second quarter of 2016. Personnel expense
increased by $568,000 as the Company added lenders and staff to
support its strong growth. In addition, the Company incurred
$368,000 in merger related costs in 2017 as a result of the pending
merger with TowneBank. There were no such costs in the second
quarter of 2016.
MEDIA
INQUIRIES:
Blair
Kelly – MMI Public Relations, 919.233.6600 or BKelly@MMIpublicrelations.com
Meghan
Killela – Paragon Bank, 919.534.7402 or MKillela@ParagonBank.com
INVESTOR
INQUIRIES:
Steve
Crouse – Paragon Bank, Chief Financial Officer, 919.534.7404
or SCrouse@ParagonBank.com
NEW
MEDIA CONTENT:
Paragon
Bank LinkedIn Page: http://linkd.in/P0o9Wc
Page 2
ABOUT PARAGON COMMERCIAL CORPORATION
Paragon
Commercial Corporation is the parent company of Paragon Bank, which
provides a private banking experience to businesses, professionals,
executives, entrepreneurs and other individuals. Founded in
Raleigh, North Carolina in 1999, Paragon Bank provides banking
services through highly responsive professionals, an extensive
courier service, online and mobile technologies, free worldwide ATM
access, and a select number of strategically placed offices in
Raleigh, Cary and Charlotte, NC. For more information, visit
http://ParagonBank.com.
FORWARD-LOOKING STATEMENTS
Except
for historical information, all of the statements, expectations,
and assumptions contained in this press release are forward-looking
statements. Actual results might differ materially from those
explicit or implicit in the forward-looking statements. Important
factors that could cause actual results to differ materially
include, without limitation: failure to obtain all regulatory
approvals and meet other closing conditions pursuant to the
Agreement and Plan of Reorganization, dated as of April 26, 2017,
by and among TowneBank, TB Acquisition, LLC, and the Company (the
"TowneBank Merger"), including approval by the stockholders of the
Company, on the expected terms and time schedule: delay in closing
the TowneBank Merger; difficulties and delays in integrating
TowneBank’ s and the Company's businesses or fully realizing
cost savings and other benefits; business disruption as a result of
the TowneBank Merger; customer acceptance of TowneBank products and
services; potential difficulties encountered in expanding into a
new market following the TowneBank Merger; the effects of future
economic conditions; governmental fiscal and monetary policies;
legislative and regulatory changes; the risks of changes in
interest rates; management of growth; fluctuations in our financial
results; reliance on key personnel; our ability to compete
effectively; privacy, security and other risks associated with our
business; and the other factors set forth from time to time in our
SEC filings, copies of which are available free of charge within
the Investor Relations section of our website at
https://paragonbank.com/investor-relations/ or upon request from
our investor relations department. Paragon Commercial Corporation
assumes no obligation and does not intend to update these
forward-looking statements, except as required by law.
USE OF NON-GAAP FINANCIAL MEASURES
Some of
the financial measures included in this press release are not
measures of financial performance recognized by the United States
generally accepted accounting principles, or GAAP. These non-GAAP
financial measures are “overhead to average assets” and
“efficiency ratio.” Our management uses these non-GAAP
financial measures in its analysis of our performance and because
of market expectations of use of these ratios to evaluate the
Company. Management believes each of these non-GAAP financial
measures provides useful information about our financial condition
and results of operation.
“Overhead
to average assets” reflects the amount of non-interest
expenses incurred in comparison to the total size of the Company
and provides investors with an additional measure of our
productivity.
The
efficiency ratio shows the amount of revenue generated for each
dollar spent and provides investors with a measure of our
productivity.
These
non-GAAP disclosures should not be viewed as a substitute for
financial results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies. Reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP financial
measures are included in the tables at the end of this release
under the caption “Reconciliation of Non-GAAP Financial
Measures.”
Page 3
|
PARAGON COMMERCIAL CORPORATION
|
|||||||
|
CONSOLIDATED STATEMENTS OF INCOME
|
|||||||
|
(Unaudited)
|
|
|
Three Months Ended
|
Year to Date
|
|||||
|
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
as of June 30,
|
|
|
(Dollars in thousands, except per share data)
|
2017
|
2017
|
2016
|
2016
|
2016
|
2017
|
2016
|
|
Loans
and loan fees
|
$14,014
|
$13,070
|
$13,261
|
$12,544
|
$11,840
|
$27,084
|
$23,030
|
|
Investment
securities
|
1,465
|
1,403
|
1,264
|
1,214
|
1,369
|
2,868
|
2,588
|
|
Federal
funds and other interest income
|
71
|
159
|
48
|
97
|
63
|
230
|
121
|
|
Total Interest and Dividend Income
|
15,550
|
14,632
|
14,573
|
13,855
|
13,272
|
30,182
|
25,739
|
|
Interest-bearing
checking and money markets
|
1,127
|
1,074
|
1,064
|
966
|
836
|
2,201
|
1,693
|
|
Time
deposits
|
458
|
511
|
560
|
588
|
556
|
969
|
1,123
|
|
Borrowings
and repurchase agreements
|
947
|
728
|
530
|
534
|
579
|
1,675
|
1,071
|
|
Total Interest Expense
|
2,532
|
2,313
|
2,154
|
2,088
|
1,971
|
4,845
|
3,887
|
|
Net Interest Income
|
13,018
|
12,319
|
12,419
|
11,767
|
11,301
|
25,337
|
21,852
|
|
Provision
for loan losses
|
650
|
159
|
200
|
391
|
-
|
809
|
-
|
|
Net Interest Income after Provision for Loan Losses
|
12,368
|
12,160
|
12,219
|
11,376
|
11,301
|
24,528
|
21,852
|
|
Non-interest Income
|
|
|
|
|
|
|
|
|
Increase
in cash surrender value of bank owned life insurance
|
255
|
258
|
247
|
220
|
226
|
513
|
449
|
|
Net
gain (loss) on sale of securities
|
-
|
-
|
21
|
-
|
-
|
-
|
85
|
|
Deposit
service charges and other fees
|
68
|
62
|
64
|
65
|
56
|
130
|
114
|
|
Mortgage
banking revenues
|
26
|
51
|
48
|
59
|
33
|
77
|
65
|
|
Net
loss on sale or write-down of other real estate
|
-
|
-
|
(443)
|
-
|
(45)
|
-
|
(257)
|
|
Other
noninterest income
|
145
|
132
|
272
|
94
|
111
|
277
|
191
|
|
Total Non-interest Income
|
494
|
503
|
209
|
438
|
381
|
997
|
647
|
|
|
|
|
|
|
|
|
|
|
Non-interest Expense
|
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
4,310
|
4,462
|
4,083
|
3,912
|
3,742
|
8,772
|
7,609
|
|
Occupancy
|
373
|
359
|
393
|
362
|
342
|
732
|
686
|
|
Furniture
and equipment
|
451
|
502
|
473
|
430
|
390
|
953
|
882
|
|
Data
processing
|
580
|
530
|
438
|
339
|
524
|
1,110
|
820
|
|
Directors
fees and expenses
|
253
|
224
|
193
|
219
|
219
|
477
|
471
|
|
Professional
fees
|
244
|
203
|
429
|
208
|
182
|
447
|
419
|
|
FDIC
and other supervisory assessments
|
201
|
166
|
71
|
220
|
217
|
367
|
412
|
|
Advertising
and public relations
|
297
|
221
|
210
|
239
|
234
|
518
|
422
|
|
Unreimbursed
loan costs and foreclosure related expenses
|
104
|
174
|
145
|
172
|
142
|
278
|
211
|
|
Merger
related costs
|
368
|
-
|
-
|
-
|
-
|
368
|
-
|
|
Other
expenses
|
676
|
771
|
573
|
677
|
496
|
1,447
|
1,156
|
|
Total Non-interest Expenses
|
7,857
|
7,612
|
7,008
|
6,778
|
6,488
|
15,469
|
13,088
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
5,005
|
5,051
|
5,420
|
5,036
|
5,194
|
10,056
|
9,411
|
|
Income
tax expense
|
1,722
|
1,697
|
1,798
|
1,581
|
1,719
|
3,419
|
3,098
|
|
Net income
|
$3,283
|
$3,354
|
$3,622
|
$3,455
|
$3,475
|
$6,637
|
$6,313
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
$0.61
|
$0.62
|
$0.67
|
$0.64
|
$0.76
|
$1.23
|
$1.38
|
|
Diluted earnings per share
|
$0.61
|
$0.62
|
$0.67
|
$0.64
|
$0.75
|
$1.23
|
$1.37
|
Page 4
|
PARAGON COMMERCIAL CORPORATION
|
|||||
|
CONSOLIDATED BALANCE SHEETS
|
|||||
|
(Unaudited)
|
|||||
|
|
|
|
|||
|
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
|
(Dollars and shares in thousands)
|
2017
|
2017
|
2016
|
2016
|
2016
|
|
Assets
|
|
|
|
|
|
|
Cash
and due from banks
|
$17,564
|
$56,478
|
$43,005
|
$73,706
|
$100,115
|
|
Investment
securities - available for sale, at fair value
|
203,534
|
194,008
|
197,441
|
178,606
|
186,323
|
|
Loans-net
of unearned income and deferred fees
|
1,339,860
|
1,230,953
|
1,191,280
|
1,165,345
|
1,105,344
|
|
Allowance
for loan losses
|
(8,921)
|
(8,125)
|
(7,909)
|
(7,925)
|
(7,986)
|
|
|
1,330,939
|
1,222,828
|
1,183,371
|
1,157,420
|
1,097,358
|
|
Premises
and equipment, net
|
15,233
|
15,420
|
15,642
|
15,858
|
16,124
|
|
Bank
owned life insurance
|
34,703
|
34,448
|
34,190
|
28,943
|
28,723
|
|
Federal
Home Loan Bank stock, at cost
|
12,828
|
5,603
|
8,400
|
5,425
|
8,613
|
|
Accrued
interest receivable
|
4,690
|
4,403
|
4,368
|
4,022
|
4,092
|
|
Deferred
tax assets
|
3,882
|
4,734
|
4,841
|
3,361
|
3,264
|
|
Other
real estate owned and repossessed property
|
4,690
|
4,740
|
4,740
|
5,183
|
5,183
|
|
Other
assets
|
7,504
|
7,365
|
7,769
|
6,335
|
4,538
|
|
Total Assets
|
$1,635,567
|
$1,550,027
|
$1,503,767
|
$1,478,859
|
$1,454,333
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Demand,
non-interest bearing
|
$200,944
|
$222,904
|
$211,202
|
$188,398
|
$179,070
|
|
Money
market accounts and interest checking
|
794,255
|
848,705
|
742,046
|
767,124
|
654,954
|
|
Time
deposits
|
179,531
|
193,249
|
219,007
|
243,563
|
266,177
|
|
Total
deposits
|
1,174,730
|
1,264,858
|
1,172,255
|
1,199,085
|
1,100,201
|
|
Repurchase
agreements and federal funds purchased
|
21,256
|
19,529
|
20,174
|
19,796
|
22,690
|
|
Borrowings
|
270,000
|
100,000
|
150,000
|
100,000
|
175,000
|
|
Subordinated
debentures
|
18,558
|
18,558
|
18,558
|
18,558
|
18,558
|
|
Other
liabilities
|
5,730
|
6,937
|
6,679
|
6,398
|
6,175
|
|
Total Liabilities
|
1,490,274
|
1,409,882
|
1,367,666
|
1,343,837
|
1,322,624
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
Common
stock, $0.008 par value
|
44
|
44
|
44
|
44
|
43
|
|
Additional
paid in capital
|
80,721
|
80,323
|
80,147
|
80,015
|
79,845
|
|
Retained
earnings
|
65,387
|
62,104
|
58,750
|
55,128
|
51,673
|
|
Accumulated
other comprehensive (loss) income
|
(859)
|
(2,326)
|
(2,840)
|
(165)
|
148
|
|
Total Stockholders' Equity
|
145,293
|
140,145
|
136,101
|
135,022
|
131,709
|
|
Total Liabilities and Stockholders' Equity
|
$1,635,567
|
$1,550,027
|
$1,503,767
|
$1,478,859
|
$1,454,333
|
|
PARAGON COMMERCIAL CORPORATION
|
|||||
|
LOANS
|
|||||
|
(Unaudited)
|
|
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
|
(In thousands except per share data)
|
2017
|
2017
|
2016
|
2016
|
2016
|
|
Loans
|
|
|
|
|
|
|
Construction
and land development
|
$70,661
|
$78,552
|
$79,738
|
$74,605
|
$63,819
|
|
Commercial
real estate:
|
|
|
|
|
|
|
Commercial
real estate
|
433,486
|
391,795
|
365,569
|
355,839
|
340,475
|
|
Commercial
real estate - owner occupied
|
202,982
|
193,291
|
186,892
|
178,631
|
158,612
|
|
Farmland
|
-
|
-
|
-
|
994
|
1,002
|
|
Multifamily,
nonresidential and junior liens
|
106,106
|
91,368
|
89,191
|
96,643
|
93,945
|
|
Total
commercial real estate
|
742,574
|
676,454
|
641,652
|
632,107
|
594,034
|
|
Consumer
real estate:
|
|
|
|
|
|
|
Home
equity lines
|
87,229
|
86,550
|
87,489
|
86,361
|
85,883
|
|
Secured
by 1-4 family residential, secured by 1st deeds of
trust
|
231,903
|
208,504
|
195,343
|
190,913
|
186,054
|
|
Secured
by 1-4 family residential, secured by 2nd deeds of
trust
|
4,712
|
4,247
|
4,289
|
4,358
|
3,656
|
|
Total
consumer real estate
|
323,844
|
299,301
|
287,121
|
281,632
|
275,593
|
|
Commercial
and industrial loans
|
181,644
|
162,580
|
170,709
|
164,913
|
157,640
|
|
Consumer
and other
|
21,137
|
14,066
|
12,060
|
12,088
|
14,258
|
|
Total loans
|
1,339,860
|
1,230,953
|
1,191,280
|
1,165,345
|
1,105,344
|
Page 5
|
PARAGON COMMERCIAL CORPORATION
|
|||||
|
OTHER FINANCIAL HIGHLIGHTS
|
|||||
|
(Unaudited)
|
|||||
|
|
|||||
|
|
Three Months Ended
|
||||
|
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
|
(In thousands, except per share data)
|
2017
|
2017
|
2016
|
2016
|
2016
|
|
Selected Average Balances:
|
|
|
|
|
|
|
Average
total assets
|
$1,586,566
|
$1,557,830
|
$1,489,487
|
$1,452,526
|
$1,393,722
|
|
Average
earning assets
|
1,527,475
|
1,492,181
|
1,409,467
|
1,378,081
|
1,310,510
|
|
Average
loans
|
1,272,604
|
1,209,314
|
1,184,790
|
1,135,448
|
1,071,325
|
|
Average
total deposits
|
1,197,472
|
1,165,010
|
1,169,062
|
1,123,277
|
1,019,133
|
|
Average
stockholders' equity
|
142,832
|
138,005
|
135,656
|
133,494
|
103,682
|
|
|
|
|
|
|
|
|
Performance Ratios:
|
|
|
|
|
|
|
Return
on average assets
|
0.83%
|
0.86%
|
0.97%
|
0.95%
|
1.00%
|
|
Return
on average equity
|
9.19%
|
9.72%
|
10.68%
|
10.35%
|
13.41%
|
|
Tangible
common equity ratio
|
8.88%
|
9.04%
|
9.05%
|
9.13%
|
9.06%
|
|
Total
interest-earning assets
|
$1,569,602
|
$1,482,570
|
$1,435,505
|
$1,408,456
|
$1,373,728
|
|
Tax
equivalent net interest margin
|
3.51%
|
3.44%
|
3.58%
|
3.47%
|
3.55%
|
|
Overhead
to average assets (1)
|
1.98%
|
1.95%
|
1.88%
|
1.87%
|
1.86%
|
|
Efficiency
ratio (1)
|
54.09%
|
57.88%
|
52.66%
|
54.38%
|
54.13%
|
|
|
|
|
|
|
|
|
Credit Ratios:
|
|
|
|
|
|
|
Non-accrual
loans
|
$492
|
$500
|
$968
|
$948
|
$1,220
|
|
Other
real estate owned
|
$4,690
|
$4,740
|
$4,740
|
$5,183
|
$5,183
|
|
Nonperforming
assets to total assets
|
0.32%
|
0.34%
|
0.38%
|
0.41%
|
0.44%
|
|
Nonperforming
loans to total loans
|
0.04%
|
0.04%
|
0.08%
|
0.08%
|
0.11%
|
|
Loans
past due >30 days and still accruing
|
$-
|
$59
|
$-
|
$499
|
$346
|
|
Net
loan charge-offs (recoveries)
|
$(146)
|
$(57)
|
$216
|
$452
|
$(56)
|
|
Annualized
net charge-offs/average loans
|
-0.05%
|
-0.02%
|
0.07%
|
0.16%
|
-0.02%
|
|
Allowance
for loan losses/total loans
|
0.67%
|
0.66%
|
0.66%
|
0.68%
|
0.72%
|
|
Allowance
for loan losses/nonperforming loans
|
1813%
|
1625%
|
817%
|
836%
|
655%
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
Average
diluted common shares outstanding
|
5,413,270
|
5,422,590
|
5,422,817
|
5,445,641
|
4,624,326
|
|
End
of quarter common shares outstanding
|
5,458,528
|
5,452,088
|
5,450,713
|
5,450,042
|
5,449,886
|
|
Book
value per common share
|
$26.62
|
$25.70
|
$24.97
|
$24.77
|
$24.17
|
(1)
This measure is not
a measure recognized under United States generally accepted
accounting principles, or GAAP, and is therefore considered to be a
non-GAAP financial measure. Please see “Reconciliation of
Non-GAAP Financial Measures” below for a reconciliation of
this measure to the most directly comparable GAAP
measure.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
“Overhead
to average assets” is defined as non-interest expense less
merger related costs divided by total average assets. We believe
overhead to average assets is an important indicator of the
Company’s level of non-interest expenses relative to the
Company’s overall size, which assists in the evaluation of
our productivity. While the overhead to average assets ratio is a
measure of productivity, its value reflects the attributes of the
business model we employ.
|
|
Three Months Ended
|
||||
|
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
|
(Dollars
in thousands)
|
2017
|
2017
|
2016
|
2016
|
2016
|
|
Overhead to Average Assets
|
|
|
|
|
|
|
Non-interest
expense
|
$7,857
|
$7,612
|
$7,008
|
$6,778
|
$6,488
|
|
Less
merger related costs
|
368
|
-
|
-
|
-
|
-
|
|
Adjusted
non-interest expense
|
$7,489
|
$7,612
|
$7,008
|
$6,778
|
$6,488
|
|
|
|
|
|
|
|
|
Average
Assets
|
$1,586,566
|
$1,557,830
|
$1,489,487
|
$1,452,526
|
$1,393,722
|
|
|
|
|
|
|
|
|
Overhead
to Average Assets
|
1.89%
|
1.95%
|
1.88%
|
1.87%
|
1.86%
|
Page 6
“Efficiency
ratio” is defined as total non-interest expense less merger
related costs divided by adjusted operating revenue. Adjusted
operating revenue is equal to net interest income (taxable
equivalent) plus non-interest income, adjusted to exclude the
impacts of gains and losses on the sale of securities and gains and
losses on the sale or write-down of foreclosed real estate because
we believe the timing of the recognition of those items to be
discretionary. We believe the efficiency ratio is important as an
indicator of productivity because it shows the amount of revenue
generated by our operations for each dollar spent. While the
efficiency ratio is a measure of productivity, its value reflects
the attributes of the business model we employ.
|
|
Three Months Ended
|
||||
|
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
June 30,
|
|
(Dollars
in thousands)
|
2017
|
2017
|
2016
|
2016
|
2016
|
|
Efficiency Ratio
|
|
|
|
|
|
|
Non-interest
expense
|
$7,857
|
$7,612
|
$7,008
|
$6,778
|
$6,488
|
|
Less
merger related costs
|
368
|
-
|
-
|
-
|
-
|
|
Adjusted
non-interest expense
|
$7,489
|
$7,612
|
$7,008
|
$6,778
|
$6,488
|
|
|
|
|
|
|
|
|
Net
interest taxable equivalent income
|
$13,351
|
$12,649
|
$12,676
|
$12,026
|
$11,560
|
|
Non-interest
income
|
494
|
503
|
209
|
438
|
381
|
|
Less
gain on investment securities
|
-
|
-
|
(21)
|
-
|
-
|
|
Plus
loss on sale or writedown of foreclosed real estate
|
-
|
-
|
443
|
-
|
45
|
|
Adjusted operating revenue
|
$13,845
|
$13,152
|
$13,307
|
$12,464
|
$11,986
|
|
|
|
|
|
|
|
|
Efficiency
ratio
|
54.09%
|
57.88%
|
52.66%
|
54.38%
|
54.13%
|
Page 7