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8-K - CURRENT REPORT - Paragon Commercial CORP | pbnc_8k.htm |
Exhibit 99.1
NEWS RELEASE
Paragon Commercial Corporation Reports 21% Increase in
Net Income for the Third Quarter of 2017
Highlights:
■
Third quarter 2017
net income of $4.2 million, a $717,000 or 20.8% increase over the
same period in the prior year, mostly due to higher levels of
interest income as a result of loan portfolio growth
■
Loan growth of
$50.1 million in the third quarter of 2017 and $198.7 million
year-to-date, an annualized increase of 22.3%
year-to-date
■
Third quarter 2017
earnings per share of $0.77, a $0.13 or 20.3% increase over the
same period in the prior year
■
Net interest income
of $13.8 million for the third quarter of 2017, an increase of
17.6% over the same period in the prior year
■
Credit quality
remains strong with nonperforming loans at only 0.03% of total
loans at September 30, 2017
■
Annualized third
quarter 2017 ROAA of 0.99% and ROAE of 11.34%
RALEIGH,
N.C., October 26, 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 September 30, 2017. Net
income during the three-month period increased 20.8% to $4.2
million compared to $3.5 million for the same period in 2016. The
increase in earnings was primarily driven by a $2.1 million
increase in net interest income, which was a result of continued
loan growth. Income during the third quarter of 2017 was impacted
by loan loss provision of $405,000, compared to $391,000 for the
same period in 2016. In addition, the Company incurred $98,000 in
additional costs directly attributable to its pending merger with
TowneBank. Fully diluted earnings per share (“EPS”)
were $0.77 for the third quarter of 2017 compared to $0.64 for the
same period in 2016.
“Once
again our quarterly results reflected outstanding growth, earnings,
efficiency and quality. Our year-to-date loan growth is an
impressive 17%. We recorded a return on average assets of 0.99% or
$4.1 million, which is the largest earnings quarter in our history.
Our efficiency ratio is among the lowest in NC and our credit
quality is at levels not seen since 2007. Our dependence on
brokered deposits is now at an all-time low of 1.76%. These are
outstanding quarterly results which would make any bank CEO very
proud.” said Robert C. Hatley, President and
CEO.
The
annualized return on average assets for the third quarter of 2017
was 0.99% and the annualized return on average equity was 11.34%
compared to 0.95% and 10.35%, respectively, for the same ratios in
the third quarter of 2016. The improvements in the third quarter
and first nine months of 2017, compared to the respective periods
of 2016, primarily reflect the benefit of balance sheet
growth.
Consolidated Assets
Total
consolidated assets as of September 30, 2017 were $1.74 billion
compared to $1.50 billion as of December 31, 2016. Assets increased
during the quarter by $108.4 million from $1.64 billion as of June
30, 2017 to the current level primarily as a result of strong loan
demand and increased cash as a result of strong deposit growth
during the quarter.
Loan Portfolio
Loans
outstanding increased by $50.1 million during the third quarter
from $1.34 billion at June 30, 2017 to $1.39 billion
at
September
30, 2017. For the nine months ended September 30, 2017, loans have
increased $198.7 million, an annualized rate of 22.3%. All loan
categories experienced strong growth, except commercial and
industrial loans, which decreased $2.9 million during the third
quarter of 2017. Growth for some of the other loan categories for
the same period was as follows: commercial real estate - $32.7
million, construction and land development - $4.8 million and
consumer real estate - $15.5 million. The Company continues to see
strong loan growth throughout the Raleigh, Charlotte and Cary
markets.
Page 1
Deposit Portfolio
Total
deposits increased by $113.4 million during the third quarter of
2017. For the first nine months of 2017, deposits are up $115.9
million despite the Company’s continued effort to pay down
wholesale deposits, which have decreased by $54.1 million
year-to-date. During the third quarter of 2017, demand account
balances increased $52.6 million and money market and interest
checking accounts increased $71.1 million. Time deposits decreased
$10.3 million, driven by reduction in the brokered deposit
portfolio of $17.3 million. As a result of the strong deposit
growth, the Company was able to decrease its Federal Home Loan Bank
advances by $10.0 million during the quarter despite its strong
loan growth during the same period.
Credit Quality
The
Company recorded a $405,000 loan loss provision for the third
quarter of 2017 as a result of the growth in total loans. There was
$391,000 in provision for loan losses for the quarter ended
September 30, 2016. The allowance for loan losses as a percentage
of total loans at September 30, 2017 and December 31, 2016 was
0.68% and 0.66%, respectively.
Asset
quality continued to remain strong as nonperforming loans were
0.03% of total loans and the ratio of total nonperforming assets to
total assets including foreclosed real estate was 0.22% at
September 30, 2017.
Net Interest Income
Net
interest income increased by $2.1 million or 17.6% during the third
quarter of 2017 compared to the third quarter of 2016. Net interest
income totaled $13.8 million during the third quarter of 2017,
representing a net interest margin of 3.47% on a tax-equivalent
basis, unchanged from the third quarter of 2016. Net interest
margin was the same primarily as a result of increased rates in
Federal Home Loan Bank borrowings offset by higher yields on
average total interest earning assets. The yield on these assets
was 4.20% in the third quarter of 2017 compared to 4.07% for the
same period in 2016.
Non-Interest Income
For the
third quarter of 2017, non-interest income was $274,000 compared to
$438,000 for the same period in 2016. The third quarter of 2017 was
negatively impacted by $311,000, primarily as a result of the
write-down and loss on foreclosed real estate. There were no such
losses in the third quarter of 2016.
Non-Interest Expense
Non-interest
expense in the third quarter of 2017 was $7.4 million compared to
$6.8 million in the third quarter of 2016. Personnel expense
increased by $353,000 as the Company added temporary personnel to
compensate for the departure of employees who have left the Bank
due to the pending merger with TowneBank. The Bank also added more
lenders and staff to support its strong growth. In addition, the
Company incurred $98,000 in additional merger-related costs in the
third quarter of 2017 as a result of the pending merger with
TowneBank. There were no such costs in the third 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 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
|
|||||
|
Sept. 30,
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
as of
September 30,
|
|
(Dollars in thousands, except per
share data)
|
2017
|
2017
|
2017
|
2016
|
2016
|
2017
|
2016
|
Loans
and loan fees
|
$15,241
|
$14,014
|
$13,070
|
$13,261
|
$12,544
|
$42,325
|
$35,574
|
Investment
securities
|
1,501
|
1,465
|
1,403
|
1,264
|
1,214
|
4,369
|
3,802
|
Federal
funds and other interest income
|
73
|
71
|
159
|
48
|
97
|
303
|
218
|
Total Interest and Dividend Income
|
16,815
|
15,550
|
14,632
|
14,573
|
13,855
|
46,997
|
39,594
|
Interest-bearing
checking and money markets
|
1,125
|
1,127
|
1,074
|
1,064
|
966
|
3,326
|
2,659
|
Time
deposits
|
472
|
458
|
511
|
560
|
588
|
1,441
|
1,711
|
Borrowings
and repurchase agreements
|
1,376
|
947
|
728
|
530
|
534
|
3,051
|
1,605
|
Total Interest Expense
|
2,973
|
2,532
|
2,313
|
2,154
|
2,088
|
7,818
|
5,975
|
Net Interest Income
|
13,842
|
13,018
|
12,319
|
12,419
|
11,767
|
39,179
|
33,619
|
Provision
for loan losses
|
405
|
650
|
159
|
200
|
391
|
1,214
|
391
|
Net Interest Income after Provision for Loan Losses
|
13,437
|
12,368
|
12,160
|
12,219
|
11,376
|
37,965
|
33,228
|
Non-interest Income
|
|
|
|
|
|
|
|
Increase
in cash surrender value of bank owned life insurance
|
258
|
255
|
258
|
247
|
220
|
771
|
669
|
Net
gain on sale of securities
|
-
|
-
|
-
|
21
|
-
|
-
|
85
|
Deposit
service charges and other fees
|
75
|
68
|
62
|
64
|
65
|
205
|
179
|
Mortgage
banking revenues
|
6
|
26
|
51
|
48
|
59
|
83
|
124
|
Net
loss on sale or write-down of other real estate
|
(311)
|
-
|
-
|
(443)
|
-
|
(311)
|
(257)
|
Other
noninterest income
|
246
|
145
|
132
|
272
|
94
|
523
|
285
|
Total Non-interest Income
|
274
|
494
|
503
|
209
|
438
|
1,271
|
1,085
|
|
|
|
|
|
|
|
|
Non-interest Expense
|
|
|
|
|
|
|
|
Salaries
and employee benefits
|
4,265
|
4,310
|
4,462
|
4,083
|
3,912
|
13,037
|
11,521
|
Occupancy
|
390
|
373
|
359
|
393
|
362
|
1,122
|
1,048
|
Furniture
and equipment
|
418
|
451
|
502
|
473
|
430
|
1,371
|
1,312
|
Data
processing
|
547
|
580
|
530
|
438
|
339
|
1,657
|
1,159
|
Directors
fees and expenses
|
226
|
253
|
224
|
193
|
219
|
703
|
690
|
Professional
fees
|
149
|
244
|
203
|
429
|
208
|
596
|
627
|
FDIC
and other supervisory assessments
|
176
|
201
|
166
|
71
|
220
|
543
|
632
|
Advertising
and public relations
|
228
|
297
|
221
|
210
|
239
|
746
|
661
|
Unreimbursed
loan costs and foreclosure related expenses
|
214
|
104
|
174
|
145
|
172
|
492
|
383
|
Merger
related costs
|
98
|
368
|
-
|
-
|
-
|
466
|
-
|
Other
expenses
|
663
|
676
|
771
|
573
|
677
|
2,110
|
1,833
|
Total Non-interest Expenses
|
7,374
|
7,857
|
7,612
|
7,008
|
6,778
|
22,843
|
19,866
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
6,337
|
5,005
|
5,051
|
5,420
|
5,036
|
16,393
|
14,447
|
Income
tax expense
|
2,165
|
1,722
|
1,697
|
1,798
|
1,581
|
5,584
|
4,679
|
Net income
|
$4,172
|
$3,283
|
$3,354
|
$3,622
|
$3,455
|
$10,809
|
$9,768
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
$0.77
|
$0.61
|
$0.62
|
$0.67
|
$0.64
|
$2.00
|
$2.02
|
Diluted earnings per share
|
$0.77
|
$0.61
|
$0.62
|
$0.67
|
$0.64
|
$2.00
|
$2.00
|
Page 4
PARAGON COMMERCIAL CORPORATION
|
|||||
CONSOLIDATED BALANCE SHEETS
|
|||||
(Unaudited)
|
|||||
|
|
|
|
|
|
|
Sept. 30,
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
(Dollars and shares in thousands)
|
2017
|
2017
|
2017
|
2016
|
2016
|
Assets
|
|
|
|
|
|
Cash
and due from banks
|
$83,428
|
$17,564
|
$56,478
|
$43,005
|
$73,706
|
Investment
securities - available for sale, at fair value
|
197,159
|
203,544
|
194,008
|
197,441
|
178,606
|
Loans-net
of unearned income and deferred fees
|
1,389,987
|
1,339,860
|
1,230,953
|
1,191,280
|
1,165,345
|
Allowance
for loan losses
|
(9,402)
|
(8,921)
|
(8,125)
|
(7,909)
|
(7,925)
|
|
1,380,585
|
1,330,939
|
1,222,828
|
1,183,371
|
1,157,420
|
Premises
and equipment, net
|
15,296
|
15,233
|
15,420
|
15,642
|
15,858
|
Bank
owned life insurance
|
34,961
|
34,703
|
34,448
|
34,190
|
28,943
|
Federal
Home Loan Bank stock, at cost
|
12,403
|
12,828
|
5,603
|
8,400
|
5,425
|
Accrued
interest receivable
|
4,840
|
4,690
|
4,403
|
4,368
|
4,022
|
Deferred
tax assets
|
4,270
|
3,882
|
4,734
|
4,841
|
3,361
|
Other
real estate owned and repossessed property
|
3,399
|
4,690
|
4,740
|
4,740
|
5,183
|
Other
assets
|
7,584
|
7,494
|
7,365
|
7,769
|
6,335
|
Total Assets
|
$1,743,925
|
$1,635,567
|
$1,550,027
|
$1,503,767
|
$1,478,859
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Demand,
non-interest bearing
|
$253,511
|
$200,944
|
$222,904
|
$211,202
|
$188,398
|
Money
market accounts and interest checking
|
865,355
|
794,255
|
848,705
|
742,046
|
767,124
|
Time
deposits
|
169,277
|
179,531
|
193,249
|
219,007
|
243,563
|
Total
deposits
|
1,288,143
|
1,174,730
|
1,264,858
|
1,172,255
|
1,199,085
|
Repurchase
agreements and federal funds purchased
|
21,064
|
21,256
|
19,529
|
20,174
|
19,796
|
Borrowings
|
260,000
|
270,000
|
100,000
|
150,000
|
100,000
|
Subordinated
debentures
|
18,558
|
18,558
|
18,558
|
18,558
|
18,558
|
Other
liabilities
|
7,107
|
5,730
|
6,937
|
6,679
|
6,398
|
Total Liabilities
|
1,594,872
|
1,490,274
|
1,409,882
|
1,367,666
|
1,343,837
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
Common
stock, $0.008 par value
|
44
|
44
|
44
|
44
|
44
|
Additional
paid in capital
|
80,822
|
80,721
|
80,323
|
80,147
|
80,015
|
Retained
earnings
|
69,559
|
65,387
|
62,104
|
58,750
|
55,128
|
Accumulated
other comprehensive (loss) income
|
(1,372)
|
(859)
|
(2,326)
|
(2,840)
|
(165)
|
Total Stockholders' Equity
|
149,053
|
145,293
|
140,145
|
136,101
|
135,022
|
Total Liabilities and Stockholders' Equity
|
$1,743,925
|
$1,635,567
|
$1,550,027
|
$1,503,767
|
$1,478,859
|
PARAGON COMMERCIAL CORPORATION
|
|||||
LOANS
|
|||||
(Unaudited)
|
|||||
|
|
|
|
|
|
|
Sept. 30,
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
(In thousands except per share data)
|
2017
|
2017
|
2017
|
2016
|
2016
|
Loans
|
|
|
|
|
|
Construction
and land development
|
$75,465
|
$70,661
|
$78,552
|
$79,738
|
$74,605
|
Commercial
real estate:
|
|
|
|
|
|
Commercial
real estate
|
448,762
|
433,486
|
391,795
|
365,569
|
356,833
|
Commercial
real estate - owner occupied
|
221,661
|
202,982
|
193,291
|
186,892
|
178,631
|
Multifamily,
nonresidential and junior liens
|
104,892
|
106,106
|
91,368
|
89,191
|
96,643
|
Total
commercial real estate
|
775,315
|
742,574
|
676,454
|
641,652
|
632,107
|
Consumer
real estate:
|
|
|
|
|
|
Home
equity lines
|
92,285
|
87,229
|
86,550
|
87,489
|
86,361
|
Secured
by 1-4 family residential, secured by 1st deeds of
trust
|
242,655
|
231,903
|
208,504
|
195,343
|
190,913
|
Secured
by 1-4 family residential, secured by 2nd deeds of
trust
|
4,425
|
4,712
|
4,247
|
4,289
|
4,358
|
Total
consumer real estate
|
339,365
|
323,844
|
299,301
|
287,121
|
281,632
|
Commercial
and industrial loans
|
178,765
|
181,644
|
162,580
|
170,709
|
164,913
|
Consumer
and other
|
21,077
|
21,137
|
14,066
|
12,060
|
12,088
|
Total loans
|
1,389,987
|
1,339,860
|
1,230,953
|
1,191,280
|
1,165,345
|
Page 5
PARAGON COMMERCIAL CORPORATION
|
|||||
OTHER FINANCIAL HIGHLIGHTS
|
|||||
(Unaudited)
|
|||||
|
|
|
|
|
|
|
Three Months Ended
|
||||
|
Sept. 30,
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
(In thousands, except per share data)
|
2017
|
2017
|
2017
|
2016
|
2016
|
Selected Average Balances:
|
|
|
|
|
|
Average
total assets
|
$1,681,192
|
$1,586,566
|
$1,557,830
|
$1,489,487
|
$1,452,526
|
Average
earning assets
|
1,615,475
|
1,527,475
|
1,492,181
|
1,409,467
|
1,378,081
|
Average
loans
|
1,359,440
|
1,272,604
|
1,209,314
|
1,184,790
|
1,135,448
|
Average
total deposits
|
1,176,609
|
1,197,472
|
1,165,010
|
1,169,062
|
1,123,277
|
Average
stockholders' equity
|
147,212
|
142,832
|
138,005
|
135,656
|
133,494
|
|
|
|
|
|
|
Performance Ratios:
|
|
|
|
|
|
Return
on average assets
|
0.99%
|
0.83%
|
0.86%
|
0.97%
|
0.95%
|
Return
on average equity
|
11.34%
|
9.19%
|
9.72%
|
10.68%
|
10.35%
|
Tangible
common equity ratio
|
8.55%
|
8.88%
|
9.04%
|
9.05%
|
9.13%
|
Total
interest-earning assets
|
$1,678,994
|
$1,569,602
|
$1,482,570
|
$1,435,505
|
$1,408,456
|
Tax
equivalent net interest margin
|
3.47%
|
3.51%
|
3.44%
|
3.58%
|
3.47%
|
Overhead
to average assets (1)
|
1.73%
|
1.89%
|
1.95%
|
1.88%
|
1.87%
|
Efficiency
ratio (1)
|
49.50%
|
54.09%
|
57.88%
|
52.66%
|
54.38%
|
|
|
|
|
|
|
Credit Ratios:
|
|
|
|
|
|
Non-accrual
loans
|
$466
|
$492
|
$500
|
$968
|
$948
|
Other
real estate owned
|
$3,399
|
$4,690
|
$4,740
|
$4,740
|
$5,183
|
Nonperforming
assets to total assets
|
0.22%
|
0.32%
|
0.34%
|
0.38%
|
0.41%
|
Nonperforming
loans to total loans
|
0.03%
|
0.04%
|
0.04%
|
0.08%
|
0.08%
|
Loans
past due >30 days and still accruing
|
$149
|
$-
|
$59
|
$-
|
$499
|
Net
loan charge-offs (recoveries)
|
$(76)
|
$(146)
|
$(57)
|
$216
|
$452
|
Annualized
net charge-offs/average loans
|
-0.02%
|
-0.05%
|
-0.02%
|
0.07%
|
0.16%
|
Allowance
for loan losses/total loans
|
0.68%
|
0.67%
|
0.66%
|
0.66%
|
0.68%
|
Allowance
for loan losses/nonperforming loans
|
2018%
|
1813%
|
1625%
|
817%
|
836%
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
Average
diluted common shares outstanding
|
5,421,388
|
5,413,270
|
5,422,590
|
5,422,817
|
5,439,596
|
End of
quarter common shares outstanding
|
5,459,982
|
5,458,528
|
5,452,088
|
5,450,713
|
5,450,042
|
Book
value per common share
|
$27.30
|
$26.62
|
$25.70
|
$24.97
|
$24.77
|
(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
|
||||
|
Sept. 30,
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
(Dollars
in thousands)
|
2017
|
2017
|
2017
|
2016
|
2016
|
Overhead to Average Assets
|
|
|
|
|
|
Non-interest
expense
|
$7,374
|
$7,857
|
$7,612
|
$7,008
|
$6,778
|
Less
merger related costs
|
98
|
368
|
-
|
-
|
-
|
Adjusted
non-interest expense
|
$7,276
|
$7,489
|
$7,612
|
$7,008
|
$6,778
|
|
|
|
|
|
|
Average
Assets
|
$1,681,192
|
$1,586,566
|
$1,557,830
|
$1,489,487
|
$1,452,526
|
|
|
|
|
|
|
Overhead
to Average Assets
|
1.73%
|
1.89%
|
1.95%
|
1.88%
|
1.87%
|
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
|
||||
|
Sept. 30,
|
June 30,
|
March 31,
|
Dec. 31,
|
Sept. 30,
|
(Dollars
in thousands)
|
2017
|
2017
|
2017
|
2016
|
2016
|
Efficiency Ratio
|
|
|
|
|
|
Non-interest
expense
|
$7,374
|
$7,857
|
$7,612
|
$7,008
|
$6,778
|
Less
merger related costs
|
98
|
368
|
-
|
-
|
-
|
Adjusted
non-interest expense
|
$7,276
|
$7,489
|
$7,612
|
$7,008
|
$6,778
|
|
|
|
|
|
|
Net
interest taxable equivalent income
|
$14,114
|
$13,351
|
$12,649
|
$12,676
|
$12,026
|
Non-interest
income
|
274
|
494
|
503
|
209
|
438
|
Less
gain on investment securities
|
-
|
-
|
-
|
(21)
|
-
|
Plus
loss on sale or writedown of foreclosed real estate
|
311
|
-
|
-
|
443
|
-
|
Adjusted
operating revenue
|
$14,699
|
$13,845
|
$13,152
|
$13,307
|
$12,464
|
|
|
|
|
|
|
Efficiency
ratio
|
49.50%
|
54.09%
|
57.88%
|
52.66%
|
54.38%
|
Page 7