The Community Financial Corporation (NASDAQ: TCFC) (the “Company”),
the holding company for Community Bank of the Chesapeake (the
“Bank”), today reported net income for the three months ended
March 31, 2022 of $6.3 million, or $1.10 per diluted common
share. This compares to net income of $6.8 million, or $1.18 per
diluted common share for the fourth quarter of 2021, and net income
of $6.3 million or $1.07 per diluted common share for the quarter
ended March 31, 2021.
Management Commentary
"Our work over the past few years to reposition
the Bank continues to deliver on our commitments to our
communities, our customers, and our shareholders,” stated William
J. Pasenelli, Chief Executive Officer. “We believe we are
well-positioned for rising rates. We have considerable asset
sensitivity with a large percentage of loans scheduled to reprice
in the coming quarters. And our low-cost deposit franchise
continues to improve with significant growth in non-interest
bearing deposits. Continued cost discipline combined with a
successful expansion strategy should deliver significant operating
leverage for the remainder of the year.”
“Our successful expansion into Virginia
continues with plans to open a new branch in Fredericksburg and a
new loan production office in Charlottesville in the second
quarter,” stated James M. Burke, President. “Loans in Virginia now
account for almost 50% of our loan portfolio and have significantly
contributed to our growth and profitability over the last several
years. Our team in Virginia continues to drive the expansion
forward by finding new ways to serve the financial needs of their
communities.”
Results of Operations
|
|
(UNAUDITED) |
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
(dollars in thousands) |
|
2022 |
|
2021 |
|
$ Change |
|
% Change |
Interest and dividend income |
|
$ |
17,336 |
|
|
$ |
17,678 |
|
$ |
(342 |
) |
|
(1.9 |
)% |
Interest expense |
|
|
867 |
|
|
|
1,169 |
|
|
(302 |
) |
|
(25.8 |
)% |
Net interest income |
|
|
16,469 |
|
|
|
16,509 |
|
|
(40 |
) |
|
(0.2 |
)% |
Provision for credit losses |
|
|
450 |
|
|
|
295 |
|
|
155 |
|
|
52.5 |
% |
Provision (recovery) for unfunded commitments |
|
|
(31 |
) |
|
|
— |
|
|
(31 |
) |
|
0.0 |
% |
Noninterest income |
|
|
1,451 |
|
|
|
2,360 |
|
|
(909 |
) |
|
(38.5 |
)% |
Noninterest expense |
|
|
9,080 |
|
|
|
10,148 |
|
|
(1,068 |
) |
|
(10.5 |
)% |
Income before income taxes |
|
|
8,421 |
|
|
|
8,426 |
|
|
(36 |
) |
|
(0.4 |
)% |
Income tax expense |
|
|
2,133 |
|
|
|
2,127 |
|
|
6 |
|
|
0.3 |
% |
Net income |
|
$ |
6,288 |
|
|
$ |
6,299 |
|
$ |
(42 |
) |
|
(0.7 |
)% |
Net Interest Income
The stability in net interest income resulted
primarily from decreases in interest expense from lower funding
costs partially offsetting lower interest income. Interest income
decreased due to lower asset yields and lower U.S. SBA PPP income
due to loan payoffs partially offset by increased interest income
from larger average commercial real estate and residential rental
loan portfolios and investment securities balance.
Net interest margin of 3.12% for the three
months ended March 31, 2022 decreased 38
basis points from 3.50% for the three months ended
March 31, 2021 and decreased 10 basis points from 3.22% for
the three months ended December 31, 2021. Interest income from
the Company's participation in the U.S. SBA PPP program was $0.5
million and $1.8 million for the three months ended March 31,
2022 and March 31, 2021, respectively and $0.8 million for the
three months ended December 31, 2021. For the three months
ended March 31, 2022, net interest margin increased six basis
points as a result of U.S. SBA PPP loan interest income compared to
increasing 18 basis points and 10 basis points for the three months
ended March 31, 2021 and December 31, 2021.
The Company’s cost of funds was flat at 0.17%
during the first quarter of 2022 compared to the prior quarter and
decreased from 0.25% for the three months ended March 31,
2021. The Bank's interest rate asset sensitivity improved as
average non-interest bearing deposit accounts increased to 29.6% of
total average deposits for the first quarter of 2022 compared to
21.3% for the comparable period in 2021 and 22.2% for the previous
quarter. Management is optimistic that improvements in the Bank's
funding composition should benefit margins and profitability in an
increasing interest-rate environment.
We expect U.S. SBA PPP loan forgiveness to
modestly contribute to margins and net interest income in the
second and third quarters of 2022 with the recognition of remaining
net deferred fees. Excluding the acceleration of interest income
with U.S. SBA PPP loan forgiveness, a stable to increasing net
interest margin is possible during the balance of 2022 assuming
interest-earning assets reprice faster than interest-bearing
liabilities and the Bank maintains its current favorable funding
mix.
Noninterest Income
The decrease in noninterest income in the
current quarter was primarily due to gains on the sale of
investment securities in the first quarter of 2021 and unrealized
losses on securities invested in a Community Reinvestment Act
mutual fund in the first quarter of 2022 due to changes in interest
rates. In addition, there were small decreases in service charges
and referral fee income. Also in the first quarter of 2021, the
Bank sold non-accrual and classified commercial real estate and
residential mortgage loans and recognized a loss on the sale of
$191,000.
Noninterest income as a percentage of average
assets was 0.25% and 0.46%, respectively, for the three months
ended March 31, 2022 and 2021.
Noninterest Expense
Noninterest expense of $9.1 million for the
three months ended March 31, 2022, decreased $1.1 million or
10.5%, compared to $10.1 million for the three months ended
March 31, 2021. The decrease in noninterest expense for the
comparable periods was primarily due to a fraud loss of
$1.3 million in the first quarter of 2021. OREO expenses have
moderated as the Bank has been successful at disposing foreclosed
assets over the last two years, which have been reduced from
$2.3 million at March 31, 2021 to $0.0 million OREO
assets at March 31, 2022.
Noninterest expense in the first quarter of 2021
included a non-recurring expense and expenses associated with the
origination phase of the SBA PPP program. 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.
Any recovery of insurance proceeds would be recognized in the
quarter received. Second, compensation and benefits 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 expenses, the Company's first quarter 2021 noninterest expense
was $9.1 million.
Noninterest expense in the first quarter of 2022
at $9.1 million, was lower than anticipated due primarily to lower
compensation and benefits and no credit-related costs for OREO.
Lower than anticipated health care costs, a lower average full-time
equivalent headcount and lower benefit and incentive accruals all
contributed to a lower expense run rate. Management's projected
quarterly expense run rate for the second quarter of 2022 is
estimated between $9.4 million and $9.6 million and
includes the base compensation increases given to select employee
groups in January 2022 to address local wage competitive
pressures.
The Company’s efficiency ratio was 50.67% for
the three months ended March 31, 2022 compared to 53.78% for
the three months ended March 31, 2021. The Company’s net
operating expense ratio was 1.31% for the three months ended
March 31, 2022 compared to 1.50% for the three months ended
March 31, 2021. The efficiency and net operating expense
ratios have improved (decreased) as the Company has been able to
improve asset quality and generate more operating revenues while
controlling expense growth.
Income Tax Expense
The effective tax rate for the three months
ended March 31, 2022 was 25.33% compared to an effective tax
rate of 25.24% for the three months ended March 31, 2021.
Balance Sheet
Assets
Total assets increased $24.6 million, or 1.1%,
to $2.35 billion at March 31, 2022 compared to total assets of
$2.33 billion at December 31, 2021. Cash decreased a net of
$26.5 million and was used to fund net loan and investment growth
of $36.6 million and $9.7 million, respectively. In addition,
deferred tax assets increased $6.5 million to $15.5 million
primarily due to the day one CECL adjustment and increases in
unrealized losses of the Bank's AFS investment portfolio related to
changes in interest rates. Other assets decreased $1.8 million due
to a decrease in income tax receivables.
During the first quarter of 2022, total net
loans, which include portfolio loans and U.S. SBA PPP loans,
increased 9.2% annualized or $36.6 million from $1,586.8 million
at December 31, 2021 to $1,623.4 million at
March 31, 2022. Net portfolio loans increased 12.2%
annualized or $47.8 million from $1,560.4 million
at December 31, 2021 to $1,608.2 million at
March 31, 2022. Portfolio loans include all loan
portfolios except the U.S. SBA PPP loan portfolio. The
Company’s loan pipeline was $193.0 million
at March 31, 2022.
Non-owner occupied commercial real estate as a
percentage of risk-based capital at March 31, 2022 and
December 31, 2021 were $872.3 million or 347% and $813.0
million or 331%, respectively. Construction loans as a percentage
of risk-based capital at March 31, 2022 and December 31,
2021 were $138.0 million or 55% and $140.4 million or 57%,
respectively.
Funding
Total deposits increased $38.9 million
or 1.9% (7.6% annualized) at March 31, 2022 compared
to December 31, 2021. The increase included a $46.2 million
increase to transaction deposits offset by a $7.3 million decrease
to time deposits. During the first quarter of 2022,
non-interest-bearing demand deposits increased $198.6 million to
$644.4 million at March 31, 2022, representing 30.8% of
deposits, compared to 21.7% of deposits at December 31,
2021 as management efforts to optimize the deposit franchise
achieved results.
Stockholders' Equity and Regulatory
Capital
During the three months ended March 31,
2022, total stockholders’ equity decreased $15.0 million. Equity
increased 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. The decrease in equity was primarily due
to an increase of $17.0 million in AOCL in the Bank's AFS
securities portfolio due to changes in market interest rates. In
addition, equity decreased for common dividends paid of $0.9
million, stock repurchases of $1.6 million and $2.0 million for the
adoption of the current expected credit loss ("CECL") accounting
standard on January 1, 2022.
The Company's common equity to assets ratio
decreased to 8.21% at March 31, 2022 from 8.94%
at December 31, 2021. The Company’s ratio of
tangible common equity ("TCE") to tangible assets decreased to
7.75% at March 31, 2022 from 8.48%
at December 31, 2021 (see Non-GAAP reconciliation
schedules) due primarily to increases in AOCL. Regulatory capital
was not impacted by the increase in AOCL and Tier 1 capital to
average asset ratios at the Bank and the Company remained strong at
9.93% and 9.17% at March 31, 2022 compared to 9.95% and 9.23%
at December 31, 2021.
On December 9, 2021, the Company announced its
Board of Directors approved the resumption of repurchases allowed
under the stock repurchase plan originally adopted in October 2020
(the "2020 Repurchase Plan"). The Company may repurchase the 99,450
shares remaining under the 2020 Repurchase Plan using up to
$4.0 million in the aggregate and up to $1.5 million in
the aggregate on a quarterly basis. During the first quarter of
2022, the Company repurchased 39,049 shares at an average price of
$39.70 per share. At March 31, 2022 the Company had 51,664
shares available to be repurchased under the 2020 Repurchase
Plan.
Asset Quality
Allowance for credit losses ("ACL") and
provision for credit losses ("PCL"); Allowance for Loan Losses
("ALLL") and provision for loan losses
("PLL")2
On January 1, 2022, the Company adopted ASU
2016-13 "Financial Instruments - Credit Losses (Topic
326) - Measurement of Credit Losses on Financial Instruments,
which replaced the incurred loss methodology for determining our
provision for credit losses and ACL with an expected loss
methodology that is referred to as the current expected credit loss
model ("CECL"). The measurement of expected credit losses under the
CECL methodology applies to financial assets subject to credit
losses and measured at amortized cost, and certain off-balance
sheet credit exposures. This includes, but is not limited to,
loans, leases, held-to-maturity securities, loan commitments, and
financial guarantees. In addition, ASU 2016-13 made changes to the
accounting for available-for-sale ("AFS") debt securities. Credit-
related impairments on AFS debt securities are now recognized as an
allowance for credit loss rather than a write-down of the
securities amortized cost basis when management does not intend to
sell or believes that it is not likely that they will be required
to sell the securities prior to recovery of the securities
amortized cost basis.
We adopted ASU 2016-13 using the modified
retrospective method. Results for reporting periods beginning after
January 1, 2022 are presented under ASU 2016-13 while prior period
amounts continue to be reported in accordance with previously
applicable GAAP. At adoption, the Company did not hold Held to
Maturity ("HTM") investment debt securities.
The following table shows the impact of the
Company's adoption of ASC 326:
|
|
January 1, 2022 |
(dollars in thousands) |
|
As Reported Under ASC 326 |
|
Pre-ASC 326 Adoption |
|
Impact of ASC 326 Adoption |
Portfolio Loans: |
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,113,793 |
|
|
$ |
1,115,485 |
|
|
|
(1,692 |
) |
Residential first mortgages |
|
|
92,710 |
|
|
|
91,120 |
|
|
|
1,590 |
|
Residential rentals |
|
|
194,911 |
|
|
|
195,035 |
|
|
|
(124 |
) |
Construction and land development |
|
|
35,502 |
|
|
|
35,590 |
|
|
|
(88 |
) |
Home equity and second mortgages |
|
|
25,661 |
|
|
|
25,638 |
|
|
|
23 |
|
Commercial loans |
|
|
50,512 |
|
|
|
50,574 |
|
|
|
(62 |
) |
Consumer loans |
|
|
3,015 |
|
|
|
3,002 |
|
|
|
13 |
|
Commercial equipment |
|
|
62,706 |
|
|
|
62,499 |
|
|
|
207 |
|
Total Portfolio Loans |
|
|
1,578,810 |
|
|
|
1,578,943 |
|
|
|
(133 |
) |
Adjustments: |
|
|
|
|
|
|
Net deferred costs |
|
|
— |
|
|
|
(133 |
) |
|
|
133 |
|
Allowance for credit losses |
|
|
(20,913 |
) |
|
|
(18,417 |
) |
|
|
(2,496 |
) |
Net Portfolio Loans |
|
|
1,557,897 |
|
|
|
1,560,393 |
|
|
|
(2,496 |
) |
|
|
|
|
|
|
|
U.S. Small Business Administration ("SBA") Paycheck Protection
Program ("PPP") loans |
|
|
26,398 |
|
|
|
27,276 |
|
|
|
(878 |
) |
Net deferred fees |
|
|
— |
|
|
|
(878 |
) |
|
|
878 |
|
Net U.S. SBA PPP Loans |
|
|
26,398 |
|
|
|
26,398 |
|
|
|
— |
|
Total Net Loans |
|
$ |
1,584,295 |
|
|
$ |
1,586,791 |
|
|
$ |
(2,496 |
) |
|
|
|
|
|
|
|
Liabilities: Reserve for Unfunded Commitments |
|
$ |
268 |
|
|
$ |
51 |
|
|
$ |
217 |
|
ACL balances increased to 1.31% of portfolio
loans at March 31, 2022 compared to ALLL of 1.17% of portfolio
loans at December 31, 2021. At and for the three months ended
March 31, 2022, the Company's allowance increased $3.0 million
or 16.1% to $21.4 million at March 31, 2022 from $18.4 million
at December 31, 2021.
The Company recorded a $0.5 million PCL for the
three months ended March 31, 2022 compared to $0.3 million PLL
for the three months ended March 31, 2021. There were no net
charge-offs during the first quarter of 2022 compared to $1.5
million in net charge-offs for the three months ended
March 31, 2021.
Management closely monitors previously COVID-19
deferred loans in reviews of credit quality indicators as part of
individual loan and relationship reviews and changes classification
ratings as needed. We believe these loans are more likely to
default in the future and that the identification and resolution of
problem credits could be delayed.
Management believes that the allowance is adequate
at March 31, 2022.
_______________________2 The Company
implemented the CECL accounting standard effective January 1, 2022.
The Company used an incurred loss methodology for all periods
compared before March 31, 2022.
Classified and Non-Performing
Assets
Classified assets decreased $0.5 million from
$5.2 million at December 31, 2021 to $4.7 million
at March 31, 2022. Management considers classified
assets to be an important measure of asset quality. The Company's
risk rating process for classified loans is an important factor in
the Company's ACL qualitative framework. In addition, risk ratings
are expected to be an important indicator in assessing ongoing
credit risks of previously deferred COVID-19 deferred loans.
Management remains committed to expeditiously resolving
non-performing or substandard credits that are not likely to become
performing or passing credits in a reasonable timeframe.
During 2021, classified assets decreased
$17.1 million. Asset quality improved with the resolution of
$16.9 million in non-accrual and impaired loans through loan
sales and negotiated payoffs as well as the resolution of
$3.1 million in OREO. The Company's sale of impaired loans
decreased the specific reserve, improved asset quality, and
improved several ALLL qualitative factors.
Non-accrual loans and OREO to total portfolio
loans and OREO decreased two basis points from 0.48%
at December 31, 2021 to 0.46% at March 31,
2022. Non-accrual loans, OREO and TDRs to total
assets decreased one basis points from
0.35% at December 31, 2021 to 0.34%
at March 31, 2022.
Non-accrual loans decreased $0.2 million from
$7.6 million at December 31, 2021 to $7.5 million at
March 31, 2022. There were no OREO balances at March 31,
2022 and December 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 $2.4 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”, “assume” 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: (i) 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; (ii) 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 undertaken or that we
undertake in the future; (iii) plans and cost savings regarding
branch closings or consolidation; (iv) projections related to
certain financial metrics; (v) expected benefits of programs we
introduce, including residential mortgage programs and retail and
commercial credit card programs; and (vi) any statement of
expectation or belief, and any 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: (i)
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; (ii) 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); (iii) the impacts related to or resulting
from Russia’s military action in Ukraine, including the broader
impacts to financial markets and the global macroeconomic and
geopolitical environments; (iv) assumptions that interest-earning
assets will reprice faster than interest-bearing liabilities and
the Bank’s ability to maintain its current favorable funding mix;
(v) 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; (vi)
changes in the Company's or the Bank's strategy, costs or
difficulties related to integration matters might be greater than
expected; (vii) availability of and costs associated with obtaining
adequate and timely sources of liquidity; (viii) the ability to
maintain credit quality; (ix) general economic trends and
conditions, including inflation and its impacts; (x) changes in
interest rates; (xi) loss of deposits and loan demand to other
financial institutions; (xii) substantial changes in financial
markets; (xiii) changes in real estate value and the real estate
market; (xiv) regulatory changes; (xv) the impact of government
shutdowns or sequestration; (xvi) the possibility of unforeseen
events affecting the industry generally; (xvii) the uncertainties
associated with newly developed or acquired operations; (xviii) the
outcome of pending or threatened litigation, or of matters before
regulatory agencies, whether currently existing or commencing in
the future; (xix) market disruptions and other effects of terrorist
activities; and (xx) the matters described in “Item 1A Risk
Factors” in the Company’s Annual Report on Form 10-K for the Year
Ended December 31, 2021, 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, 2022.
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, 2021.
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, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
15,610 |
|
|
$ |
16,222 |
|
|
$ |
16,342 |
|
|
$ |
16,320 |
|
|
$ |
16,592 |
|
Interest and dividends on securities |
|
|
1,666 |
|
|
|
1,531 |
|
|
|
1,296 |
|
|
|
1,101 |
|
|
|
1,064 |
|
Interest on deposits with banks |
|
|
60 |
|
|
|
25 |
|
|
|
21 |
|
|
|
23 |
|
|
|
22 |
|
Total Interest and Dividend Income |
|
|
17,336 |
|
|
|
17,778 |
|
|
|
17,659 |
|
|
|
17,444 |
|
|
|
17,678 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
513 |
|
|
|
565 |
|
|
|
594 |
|
|
|
640 |
|
|
|
802 |
|
Long-term debt |
|
|
354 |
|
|
|
332 |
|
|
|
456 |
|
|
|
369 |
|
|
|
367 |
|
Total Interest Expense |
|
|
867 |
|
|
|
897 |
|
|
|
1,050 |
|
|
|
1,009 |
|
|
|
1,169 |
|
Net Interest Income ("NII") |
|
|
16,469 |
|
|
|
16,881 |
|
|
|
16,609 |
|
|
|
16,435 |
|
|
|
16,509 |
|
Provision for credit losses |
|
|
450 |
|
|
|
— |
|
|
|
— |
|
|
|
291 |
|
|
|
295 |
|
Provision (recovery) for unfunded commitments |
|
|
(31 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
NII After Provision For Credit Losses |
|
|
16,050 |
|
|
|
16,881 |
|
|
|
16,609 |
|
|
|
16,144 |
|
|
|
16,214 |
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
Loan appraisal, credit, and misc. charges |
|
|
176 |
|
|
|
257 |
|
|
|
29 |
|
|
|
44 |
|
|
|
198 |
|
Gain on sale of assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
68 |
|
|
|
— |
|
Net gains on sale of investment securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
586 |
|
Unrealized (losses) gain on equity securities |
|
|
(222 |
) |
|
|
(45 |
) |
|
|
(22 |
) |
|
|
13 |
|
|
|
(85 |
) |
Loss on premises and equipment held for sale |
|
|
— |
|
|
|
(5 |
) |
|
|
(20 |
) |
|
|
— |
|
|
|
— |
|
Income from bank owned life insurance |
|
|
214 |
|
|
|
219 |
|
|
|
220 |
|
|
|
218 |
|
|
|
214 |
|
Service charges |
|
|
926 |
|
|
|
1,235 |
|
|
|
987 |
|
|
|
892 |
|
|
|
1,187 |
|
Referral fee income |
|
|
361 |
|
|
|
574 |
|
|
|
176 |
|
|
|
621 |
|
|
|
451 |
|
Net (losses) gain on sale of loans originated for sale |
|
|
(4 |
) |
|
|
55 |
|
|
|
30 |
|
|
|
— |
|
|
|
— |
|
Loss on sale of loans |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(191 |
) |
Total Noninterest Income |
|
|
1,451 |
|
|
|
2,290 |
|
|
|
1,400 |
|
|
|
1,856 |
|
|
|
2,360 |
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
5,055 |
|
|
|
5,265 |
|
|
|
5,650 |
|
|
|
5,332 |
|
|
|
4,788 |
|
OREO valuation allowance and expenses |
|
|
6 |
|
|
|
767 |
|
|
|
20 |
|
|
|
488 |
|
|
|
181 |
|
Sub Total |
|
|
5,061 |
|
|
|
6,032 |
|
|
|
5,670 |
|
|
|
5,820 |
|
|
|
4,969 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
Occupancy expense |
|
|
732 |
|
|
|
656 |
|
|
|
731 |
|
|
|
688 |
|
|
|
761 |
|
Advertising |
|
|
64 |
|
|
|
128 |
|
|
|
145 |
|
|
|
148 |
|
|
|
79 |
|
Data processing expense |
|
|
1,007 |
|
|
|
1,006 |
|
|
|
840 |
|
|
|
990 |
|
|
|
936 |
|
Professional fees |
|
|
731 |
|
|
|
937 |
|
|
|
676 |
|
|
|
604 |
|
|
|
640 |
|
Depreciation of premises and equipment |
|
|
149 |
|
|
|
139 |
|
|
|
137 |
|
|
|
135 |
|
|
|
147 |
|
FDIC Insurance |
|
|
179 |
|
|
|
90 |
|
|
|
120 |
|
|
|
140 |
|
|
|
252 |
|
Core deposit intangible amortization |
|
|
109 |
|
|
|
115 |
|
|
|
121 |
|
|
|
126 |
|
|
|
133 |
|
Fraud losses (recovery) |
|
|
40 |
|
|
|
16 |
|
|
|
133 |
|
|
|
(218 |
) |
|
|
1,329 |
|
Other expenses |
|
|
1,008 |
|
|
|
1,060 |
|
|
|
874 |
|
|
|
945 |
|
|
|
902 |
|
Total Operating Expenses |
|
|
4,019 |
|
|
|
4,147 |
|
|
|
3,777 |
|
|
|
3,558 |
|
|
|
5,179 |
|
Total Noninterest Expense |
|
|
9,080 |
|
|
|
10,179 |
|
|
|
9,447 |
|
|
|
9,378 |
|
|
|
10,148 |
|
Income before income taxes |
|
|
8,421 |
|
|
|
8,992 |
|
|
|
8,562 |
|
|
|
8,622 |
|
|
|
8,426 |
|
Income tax expense |
|
|
2,133 |
|
|
|
2,241 |
|
|
|
2,158 |
|
|
|
2,190 |
|
|
|
2,127 |
|
Net Income |
|
$ |
6,288 |
|
|
$ |
6,751 |
|
|
$ |
6,404 |
|
|
$ |
6,432 |
|
|
$ |
6,299 |
|
SUPPLEMENTAL QUARTERLY FINANCIAL DATA -
Continued CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(dollars in thousands, except per share amounts) |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
80,702 |
|
|
$ |
108,990 |
|
|
$ |
112,314 |
|
|
$ |
40,881 |
|
|
$ |
126,834 |
|
Federal funds sold |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
79,404 |
|
|
|
43,614 |
|
Interest-bearing deposits with banks |
|
|
32,460 |
|
|
|
30,664 |
|
|
|
34,929 |
|
|
|
18,626 |
|
|
|
17,390 |
|
Securities available for sale ("AFS"), at fair value |
|
|
507,527 |
|
|
|
497,839 |
|
|
|
456,664 |
|
|
|
347,678 |
|
|
|
253,348 |
|
Equity securities carried at fair value through income |
|
|
4,562 |
|
|
|
4,772 |
|
|
|
4,805 |
|
|
|
4,814 |
|
|
|
4,787 |
|
Non-marketable equity securities held in other financial
institutions |
|
|
207 |
|
|
|
207 |
|
|
|
207 |
|
|
|
207 |
|
|
|
207 |
|
Federal Home Loan Bank ("FHLB") stock - at cost |
|
|
1,685 |
|
|
|
1,472 |
|
|
|
1,472 |
|
|
|
2,036 |
|
|
|
2,036 |
|
Loans held for sale |
|
|
373 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net U.S. Small Business Administration ("SBA") Paycheck Protection
("PPP") Loans |
|
|
15,279 |
|
|
|
26,398 |
|
|
|
54,807 |
|
|
|
86,482 |
|
|
|
112,485 |
|
Portfolio Loans Receivable net of allowance for credit losses of
$21,382, $18,417, $18,579, $18,516, and $18,256 |
|
|
1,608,156 |
|
|
|
1,560,393 |
|
|
|
1,514,837 |
|
|
|
1,515,893 |
|
|
|
1,489,806 |
|
Net Loans |
|
|
1,623,435 |
|
|
|
1,586,791 |
|
|
|
1,569,644 |
|
|
|
1,602,375 |
|
|
|
1,602,291 |
|
Goodwill |
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
Premises and equipment, net |
|
|
21,304 |
|
|
|
21,427 |
|
|
|
21,795 |
|
|
|
21,630 |
|
|
|
20,540 |
|
Other real estate owned ("OREO") |
|
|
— |
|
|
|
— |
|
|
|
1,536 |
|
|
|
1,536 |
|
|
|
2,329 |
|
Accrued interest receivable |
|
|
5,389 |
|
|
|
5,588 |
|
|
|
6,045 |
|
|
|
6,590 |
|
|
|
7,337 |
|
Investment in bank owned life insurance |
|
|
39,145 |
|
|
|
38,932 |
|
|
|
38,713 |
|
|
|
38,493 |
|
|
|
38,275 |
|
Core deposit intangible |
|
|
924 |
|
|
|
1,032 |
|
|
|
1,147 |
|
|
|
1,267 |
|
|
|
1,394 |
|
Net deferred tax assets |
|
|
15,523 |
|
|
|
9,033 |
|
|
|
8,790 |
|
|
|
8,139 |
|
|
|
8,671 |
|
Right of use assets - operating leases |
|
|
6,033 |
|
|
|
6,124 |
|
|
|
6,215 |
|
|
|
6,305 |
|
|
|
6,391 |
|
Other assets |
|
|
1,819 |
|
|
|
3,600 |
|
|
|
3,581 |
|
|
|
4,243 |
|
|
|
3,252 |
|
Total Assets |
|
$ |
2,351,923 |
|
|
$ |
2,327,306 |
|
|
$ |
2,278,692 |
|
|
$ |
2,195,059 |
|
|
$ |
2,149,531 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
644,385 |
|
|
$ |
445,778 |
|
|
$ |
432,606 |
|
|
$ |
423,165 |
|
|
$ |
406,319 |
|
Interest-bearing deposits |
|
|
1,450,698 |
|
|
|
1,610,386 |
|
|
|
1,572,001 |
|
|
|
1,484,973 |
|
|
|
1,461,577 |
|
Total deposits |
|
|
2,095,083 |
|
|
|
2,056,164 |
|
|
|
2,004,607 |
|
|
|
1,908,138 |
|
|
|
1,867,896 |
|
Long-term debt |
|
|
12,213 |
|
|
|
12,231 |
|
|
|
12,249 |
|
|
|
27,267 |
|
|
|
27,285 |
|
Guaranteed preferred beneficial interest in junior subordinated
debentures ("TRUPs") |
|
|
12,000 |
|
|
|
12,000 |
|
|
|
12,000 |
|
|
|
12,000 |
|
|
|
12,000 |
|
Subordinated notes - 4.75% |
|
|
19,524 |
|
|
|
19,510 |
|
|
|
19,496 |
|
|
|
19,482 |
|
|
|
19,468 |
|
Lease liabilities - operating leases |
|
|
6,266 |
|
|
|
6,343 |
|
|
|
6,418 |
|
|
|
6,512 |
|
|
|
6,614 |
|
Accrued expenses and other liabilities |
|
|
13,697 |
|
|
|
12,925 |
|
|
|
19,794 |
|
|
|
17,698 |
|
|
|
15,509 |
|
Total Liabilities |
|
|
2,158,783 |
|
|
|
2,119,173 |
|
|
|
2,074,564 |
|
|
|
1,991,097 |
|
|
|
1,948,772 |
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
57 |
|
|
|
57 |
|
|
|
57 |
|
|
|
58 |
|
|
|
59 |
|
Additional paid in capital |
|
|
97,189 |
|
|
|
96,896 |
|
|
|
96,649 |
|
|
|
96,411 |
|
|
|
96,181 |
|
Retained earnings |
|
|
115,179 |
|
|
|
113,448 |
|
|
|
107,890 |
|
|
|
104,889 |
|
|
|
103,294 |
|
Accumulated other comprehensive (loss) income |
|
|
(18,969 |
) |
|
|
(1,952 |
) |
|
|
(9 |
) |
|
|
3,063 |
|
|
|
1,684 |
|
Unearned ESOP shares |
|
|
(316 |
) |
|
|
(316 |
) |
|
|
(459 |
) |
|
|
(459 |
) |
|
|
(459 |
) |
Total Stockholders' Equity |
|
|
193,140 |
|
|
|
208,133 |
|
|
|
204,128 |
|
|
|
203,962 |
|
|
|
200,759 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
2,351,923 |
|
|
$ |
2,327,306 |
|
|
$ |
2,278,692 |
|
|
$ |
2,195,059 |
|
|
$ |
2,149,531 |
|
Common shares issued and outstanding |
|
|
5,686,799 |
|
|
|
5,718,528 |
|
|
|
5,724,011 |
|
|
|
5,786,928 |
|
|
|
5,897,685 |
|
SUPPLEMENTAL QUARTERLY FINANCIAL DATA -
Continued SELECTED FINANCIAL INFORMATION AND
RATIOS (UNAUDITED)
|
|
Three Months Ended |
(dollars in thousands, except per share amounts) |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
KEY OPERATING RATIOS |
|
|
|
|
|
|
|
|
|
|
Return on average assets ("ROAA") |
|
|
1.08 |
% |
|
|
1.18 |
% |
|
|
1.17 |
% |
|
|
1.22 |
% |
|
|
1.22 |
% |
Pre-tax Pre-Provision ROAA** |
|
|
1.53 |
|
|
|
1.57 |
|
|
|
1.57 |
|
|
|
1.68 |
|
|
|
1.68 |
|
Return on average common equity ("ROACE") |
|
|
12.30 |
|
|
|
13.00 |
|
|
|
12.45 |
|
|
|
12.62 |
|
|
|
12.53 |
|
Pre-tax Pre-Provision ROACE** |
|
|
17.35 |
|
|
|
17.31 |
|
|
|
16.65 |
|
|
|
17.49 |
|
|
|
17.34 |
|
Return on Average Tangible Common Equity ("ROATCE")** |
|
|
13.22 |
|
|
|
13.97 |
|
|
|
13.41 |
|
|
|
13.62 |
|
|
|
13.56 |
|
Average total equity to average total assets |
|
|
8.79 |
|
|
|
9.06 |
|
|
|
9.40 |
|
|
|
9.63 |
|
|
|
9.71 |
|
Interest rate spread |
|
|
3.05 |
|
|
|
3.17 |
|
|
|
3.22 |
|
|
|
3.30 |
|
|
|
3.43 |
|
Net interest margin |
|
|
3.12 |
|
|
|
3.22 |
|
|
|
3.28 |
|
|
|
3.37 |
|
|
|
3.50 |
|
Cost of funds |
|
|
0.17 |
|
|
|
0.17 |
|
|
|
0.21 |
|
|
|
0.21 |
|
|
|
0.25 |
|
Cost of deposits |
|
|
0.10 |
|
|
|
0.11 |
|
|
|
0.12 |
|
|
|
0.14 |
|
|
|
0.18 |
|
Cost of debt |
|
|
3.24 |
|
|
|
3.04 |
|
|
|
3.19 |
|
|
|
2.51 |
|
|
|
2.50 |
|
Efficiency ratio |
|
|
50.67 |
|
|
|
53.10 |
|
|
|
52.46 |
|
|
|
51.27 |
|
|
|
53.78 |
|
Non-interest expense to average assets |
|
|
1.56 |
|
|
|
1.78 |
|
|
|
1.73 |
|
|
|
1.77 |
|
|
|
1.96 |
|
Net operating expense to average assets |
|
|
1.31 |
|
|
|
1.38 |
|
|
|
1.47 |
|
|
|
1.42 |
|
|
|
1.50 |
|
Average interest-earning assets to average interest-bearing
liabilities |
|
|
141.56 |
|
|
|
129.68 |
|
|
|
132.54 |
|
|
|
131.36 |
|
|
|
128.84 |
|
Net charge-offs (recoveries) to average portfolio loans |
|
|
0.00 |
|
|
|
0.04 |
|
|
|
(0.02 |
) |
|
|
0.01 |
|
|
|
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
COMMON SHARE DATA |
|
|
|
|
|
|
|
|
|
|
Basic net income per common share |
|
$ |
1.11 |
|
|
$ |
1.18 |
|
|
$ |
1.12 |
|
|
$ |
1.10 |
|
|
$ |
1.07 |
|
Diluted net income per common share |
|
|
1.10 |
|
|
|
1.18 |
|
|
|
1.12 |
|
|
|
1.10 |
|
|
|
1.07 |
|
Cash dividends paid per common share |
|
|
0.175 |
|
|
|
0.150 |
|
|
|
0.150 |
|
|
|
0.15 |
|
|
|
0.13 |
|
Basic - weighted average common shares outstanding |
|
|
5,688,221 |
|
|
|
5,711,746 |
|
|
|
5,709,814 |
|
|
|
5,845,009 |
|
|
|
5,888,250 |
|
Diluted - weighted average common shares outstanding |
|
|
5,699,038 |
|
|
|
5,723,011 |
|
|
|
5,720,001 |
|
|
|
5,856,954 |
|
|
|
5,897,698 |
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,351,923 |
|
|
$ |
2,327,306 |
|
|
$ |
2,278,692 |
|
|
$ |
2,195,059 |
|
|
$ |
2,149,531 |
|
Total portfolio loans (1) |
|
|
1,629,538 |
|
|
|
1,578,810 |
|
|
|
1,533,416 |
|
|
|
1,534,409 |
|
|
|
1,508,062 |
|
Classified assets |
|
|
4,745 |
|
|
|
5,211 |
|
|
|
6,663 |
|
|
|
14,918 |
|
|
|
16,145 |
|
Allowance for credit losses |
|
|
21,382 |
|
|
|
18,417 |
|
|
|
18,579 |
|
|
|
18,516 |
|
|
|
18,256 |
|
|
|
|
|
|
|
|
|
|
|
|
Past due loans - 31 to 89 days |
|
|
386 |
|
|
|
568 |
|
|
|
189 |
|
|
|
101 |
|
|
|
1,373 |
|
Past due loans >=90 days |
|
|
1,233 |
|
|
|
961 |
|
|
|
1,400 |
|
|
|
5,836 |
|
|
|
5,453 |
|
Total past due loans (2) (3) |
|
|
1,619 |
|
|
|
1,529 |
|
|
|
1,589 |
|
|
|
5,937 |
|
|
|
6,826 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans (4) |
|
|
7,465 |
|
|
|
7,631 |
|
|
|
5,160 |
|
|
|
13,802 |
|
|
|
13,623 |
|
Accruing troubled debt restructures ("TDRs") |
|
|
442 |
|
|
|
447 |
|
|
|
455 |
|
|
|
503 |
|
|
|
504 |
|
Other real estate owned ("OREO") |
|
|
— |
|
|
|
— |
|
|
|
1,536 |
|
|
|
1,536 |
|
|
|
2,329 |
|
Non-accrual loans, OREO and TDRs |
|
$ |
7,907 |
|
|
$ |
8,078 |
|
|
$ |
7,151 |
|
|
$ |
15,841 |
|
|
$ |
16,456 |
|
** 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. December 31,
2021, September 30, 2021, June 30, 2021 and March 31, 2021 reported
balance are shown net of deferred costs and fees to conform with
the current period's presentation.
(2) Delinquency excludes
Purchase Credit Impaired ("PCI") loans.
(3) There were no COVID-19
deferred loans in process as of April 28, 2022 that were
reported as delinquent as of March 31, 2022.
(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, 2022 and December 31,
2021, the Company had current non-accrual loans of $6.0 million and
$6.7 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, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
ASSET QUALITY RATIOS (1) |
|
|
|
|
|
|
|
|
|
|
Classified assets to total assets |
|
|
0.20 |
% |
|
|
0.22 |
% |
|
|
0.29 |
% |
|
|
0.68 |
% |
|
|
0.75 |
% |
Classified assets to risk-based capital |
|
|
1.87 |
|
|
|
2.10 |
|
|
|
2.75 |
|
|
|
6.24 |
|
|
|
6.81 |
|
Allowance for credit losses to total portfolio loans |
|
|
1.31 |
|
|
|
1.17 |
|
|
|
1.21 |
|
|
|
1.21 |
|
|
|
1.21 |
|
Allowance for credit losses to non-accrual loans |
|
|
286.43 |
|
|
|
241.34 |
|
|
|
360.06 |
|
|
|
134.15 |
|
|
|
134.01 |
|
Past due loans - 31 to 89 days to total portfolio loans |
|
|
0.02 |
|
|
|
0.04 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.09 |
|
Past due loans >=90 days to total portfolio loans |
|
|
0.08 |
|
|
|
0.06 |
|
|
|
0.09 |
|
|
|
0.38 |
|
|
|
0.36 |
|
Total past due (delinquency) to total portfolio loans |
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.39 |
|
|
|
0.45 |
|
Non-accrual loans to total portfolio loans |
|
|
0.46 |
|
|
|
0.48 |
|
|
|
0.34 |
|
|
|
0.90 |
|
|
|
0.90 |
|
Non-accrual loans and TDRs to total portfolio loans |
|
|
0.49 |
|
|
|
0.51 |
|
|
|
0.37 |
|
|
|
0.93 |
|
|
|
0.94 |
|
Non-accrual loans and OREO to total portfolio assets |
|
|
0.32 |
|
|
|
0.33 |
|
|
|
0.29 |
|
|
|
0.70 |
|
|
|
0.74 |
|
Non-accrual loans and OREO to total portfolio loans and OREO |
|
|
0.46 |
|
|
|
0.48 |
|
|
|
0.44 |
|
|
|
1.00 |
|
|
|
1.06 |
|
Non-accrual loans, OREO and TDRs to total assets |
|
|
0.34 |
|
|
|
0.35 |
|
|
|
0.31 |
|
|
|
0.72 |
|
|
|
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
COMMON SHARE DATA |
|
|
|
|
|
|
|
|
|
|
Book value per common share |
|
$ |
33.96 |
|
|
$ |
36.40 |
|
|
$ |
35.66 |
|
|
$ |
35.25 |
|
|
$ |
34.04 |
|
Tangible book value per common share** |
|
|
31.90 |
|
|
|
34.32 |
|
|
|
33.57 |
|
|
|
33.15 |
|
|
|
31.97 |
|
Common shares outstanding at end of period |
|
|
5,686,799 |
|
|
|
5,718,528 |
|
|
|
5,724,011 |
|
|
|
5,786,928 |
|
|
|
5,897,685 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER DATA |
|
|
|
|
|
|
|
|
|
|
Full-time equivalent employees |
|
|
191 |
|
|
|
186 |
|
|
|
196 |
|
|
|
189 |
|
|
|
192 |
|
Branches |
|
|
11 |
|
|
|
11 |
|
|
|
11 |
|
|
|
11 |
|
|
|
11 |
|
Loan Production Offices |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL RATIOS |
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to average assets |
|
|
9.17 |
% |
|
|
9.23 |
% |
|
|
9.41 |
% |
|
|
9.57 |
% |
|
|
9.70 |
% |
Tier 1 common capital to risk-weighted assets |
|
|
11.58 |
|
|
|
11.92 |
|
|
|
11.89 |
|
|
|
11.56 |
|
|
|
11.72 |
|
Tier 1 capital to risk-weighted assets |
|
|
12.28 |
|
|
|
12.64 |
|
|
|
12.64 |
|
|
|
12.30 |
|
|
|
12.47 |
|
Total risk-based capital to risk-weighted assets |
|
|
14.65 |
|
|
|
14.92 |
|
|
|
14.99 |
|
|
|
14.62 |
|
|
|
14.83 |
|
Common equity to assets |
|
|
8.21 |
|
|
|
8.94 |
|
|
|
8.96 |
|
|
|
9.29 |
|
|
|
9.34 |
|
Tangible common equity to tangible assets ** |
|
|
7.75 |
|
|
|
8.48 |
|
|
|
8.48 |
|
|
|
8.79 |
|
|
|
8.82 |
|
** 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, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
Total assets |
|
$ |
2,351,923 |
|
|
$ |
2,327,306 |
|
|
$ |
2,278,692 |
|
|
$ |
2,195,059 |
|
|
$ |
2,149,531 |
|
Less: intangible assets |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
|
|
10,835 |
|
Core deposit intangible |
|
|
924 |
|
|
|
1,032 |
|
|
|
1,147 |
|
|
|
1,267 |
|
|
|
1,394 |
|
Total intangible assets |
|
|
11,759 |
|
|
|
11,867 |
|
|
|
11,982 |
|
|
|
12,102 |
|
|
|
12,229 |
|
Tangible assets |
|
$ |
2,340,164 |
|
|
$ |
2,315,439 |
|
|
$ |
2,266,710 |
|
|
$ |
2,182,957 |
|
|
$ |
2,137,302 |
|
|
|
|
|
|
|
|
|
|
|
|
Total common equity |
|
$ |
193,140 |
|
|
$ |
208,133 |
|
|
$ |
204,128 |
|
|
$ |
203,962 |
|
|
$ |
200,759 |
|
Less: intangible assets |
|
|
11,759 |
|
|
|
11,867 |
|
|
|
11,982 |
|
|
|
12,102 |
|
|
|
12,229 |
|
Tangible common equity |
|
$ |
181,381 |
|
|
$ |
196,266 |
|
|
$ |
192,146 |
|
|
$ |
191,860 |
|
|
$ |
188,530 |
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at end of period |
|
|
5,686,799 |
|
|
|
5,718,528 |
|
|
|
5,724,011 |
|
|
|
5,786,928 |
|
|
|
5,897,685 |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity to assets |
|
|
8.21 |
% |
|
|
8.94 |
% |
|
|
8.96 |
% |
|
|
9.29 |
% |
|
|
9.34 |
% |
Tangible common equity to tangible assets |
|
|
7.75 |
% |
|
|
8.48 |
% |
|
|
8.48 |
% |
|
|
8.79 |
% |
|
|
8.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
Common book value per share |
|
$ |
33.96 |
|
|
$ |
36.40 |
|
|
$ |
35.66 |
|
|
$ |
35.25 |
|
|
$ |
34.04 |
|
Tangible common book value per share |
|
$ |
31.90 |
|
|
$ |
34.32 |
|
|
$ |
33.57 |
|
|
$ |
33.15 |
|
|
$ |
31.97 |
|
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")
Management believes that PTPP income, which
reflects the Company's profitability before income taxes and loan
loss provisions, allows investors to better assess the Company's
operating income and expenses in relation to the Company's core
operating revenue by removing the volatility that is associated
with credit provisions and different state income tax rates for
comparable institutions. ROATCE is computed by dividing net
earnings applicable to common shareholders by average tangible
common shareholders' equity. Management believes that ROATCE is
meaningful because it measures the performance of a business
consistently, whether acquired or internally developed. ROATCE is a
non-GAAP measure and may not be comparable to similar non-GAAP
measures used by other companies. Management also believes 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, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
Net income (as reported) |
|
$ |
6,288 |
|
|
$ |
6,751 |
|
|
$ |
6,404 |
|
|
$ |
6,432 |
|
|
$ |
6,299 |
|
Provision for credit losses |
|
|
450 |
|
|
|
— |
|
|
|
— |
|
|
|
291 |
|
|
|
295 |
|
Income tax expenses |
|
|
2,133 |
|
|
|
2,241 |
|
|
|
2,158 |
|
|
|
2,190 |
|
|
|
2,127 |
|
Non-GAAP PTPP income |
|
$ |
8,871 |
|
|
$ |
8,992 |
|
|
$ |
8,562 |
|
|
$ |
8,913 |
|
|
$ |
8,721 |
|
|
|
|
|
|
|
|
|
|
|
|
ROAA |
|
|
1.08 |
% |
|
|
1.18 |
% |
|
|
1.17 |
% |
|
|
1.22 |
% |
|
|
1.22 |
% |
Pre-tax Pre-Provision ROAA |
|
|
1.53 |
% |
|
|
1.57 |
% |
|
|
1.57 |
% |
|
|
1.68 |
% |
|
|
1.68 |
% |
|
|
|
|
|
|
|
|
|
|
|
ROACE |
|
|
12.30 |
% |
|
|
13.00 |
% |
|
|
12.45 |
% |
|
|
12.62 |
% |
|
|
12.53 |
% |
Pre-tax Pre-Provision ROACE |
|
|
17.35 |
% |
|
|
17.31 |
% |
|
|
16.65 |
% |
|
|
17.49 |
% |
|
|
17.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
2,325,992 |
|
|
$ |
2,293,264 |
|
|
$ |
2,187,989 |
|
|
$ |
2,116,939 |
|
|
$ |
2,070,575 |
|
Average equity |
|
$ |
204,554 |
|
|
$ |
207,745 |
|
|
$ |
205,723 |
|
|
$ |
203,893 |
|
|
$ |
201,124 |
|
|
|
Three Months Ended |
(dollars in thousands) |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
Net income (as reported) |
|
$ |
6,288 |
|
|
$ |
6,751 |
|
|
$ |
6,404 |
|
|
$ |
6,432 |
|
|
$ |
6,299 |
|
Core deposit intangible amortization (net of tax) |
|
|
81 |
|
|
|
86 |
|
|
|
91 |
|
|
|
94 |
|
|
|
99 |
|
Net earnings applicable to common shareholders |
|
$ |
6,369 |
|
|
$ |
6,837 |
|
|
$ |
6,495 |
|
|
$ |
6,526 |
|
|
$ |
6,398 |
|
|
|
|
|
|
|
|
|
|
|
|
ROATCE |
|
|
13.22 |
% |
|
|
13.97 |
% |
|
|
13.41 |
% |
|
|
13.62 |
% |
|
|
13.56 |
% |
|
|
|
|
|
|
|
|
|
|
|
Average tangible common equity |
|
$ |
192,725 |
|
|
$ |
195,803 |
|
|
$ |
193,662 |
|
|
$ |
191,708 |
|
|
$ |
188,808 |
|
AVERAGE CONSOLIDATED BALANCE SHEETS AND
NET INTEREST INCOME (UNAUDITED)
|
|
For the Three Months Ended March 31, |
|
For the Three Months Ended |
|
|
2022 |
|
2021 |
|
March 31, 2022 |
|
December 31, 2021 |
(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 |
|
$ |
1,112,108 |
|
|
$ |
10,737 |
|
3.86 |
% |
|
$ |
1,059,803 |
|
|
$ |
10,696 |
|
4.04 |
% |
|
$ |
1,112,108 |
|
|
$ |
10,737 |
|
3.86 |
% |
|
$ |
1,099,088 |
|
|
$ |
10,911 |
|
3.97 |
% |
Residential first mortgages |
|
|
86,805 |
|
|
|
713 |
|
3.29 |
% |
|
|
124,984 |
|
|
|
914 |
|
2.93 |
% |
|
|
86,805 |
|
|
|
713 |
|
3.29 |
% |
|
|
93,997 |
|
|
|
756 |
|
3.22 |
% |
Residential rentals |
|
|
197,312 |
|
|
|
1,831 |
|
3.71 |
% |
|
|
139,220 |
|
|
|
1,445 |
|
4.15 |
% |
|
|
197,312 |
|
|
|
1,831 |
|
3.71 |
% |
|
|
173,238 |
|
|
|
1,760 |
|
4.06 |
% |
Construction and land development |
|
|
33,669 |
|
|
|
407 |
|
4.84 |
% |
|
|
36,091 |
|
|
|
402 |
|
4.46 |
% |
|
|
33,669 |
|
|
|
407 |
|
4.84 |
% |
|
|
38,345 |
|
|
|
431 |
|
4.50 |
% |
Home equity and second mortgages |
|
|
25,946 |
|
|
|
245 |
|
3.78 |
% |
|
|
29,272 |
|
|
|
248 |
|
3.39 |
% |
|
|
25,946 |
|
|
|
245 |
|
3.78 |
% |
|
|
26,160 |
|
|
|
232 |
|
3.55 |
% |
Commercial loans |
|
|
46,668 |
|
|
|
550 |
|
4.71 |
% |
|
|
44,740 |
|
|
|
551 |
|
4.93 |
% |
|
|
46,668 |
|
|
|
550 |
|
4.71 |
% |
|
|
52,765 |
|
|
|
626 |
|
4.75 |
% |
Commercial equipment loans |
|
|
61,715 |
|
|
|
642 |
|
4.16 |
% |
|
|
60,544 |
|
|
|
519 |
|
3.43 |
% |
|
|
61,715 |
|
|
|
642 |
|
4.16 |
% |
|
|
61,851 |
|
|
|
634 |
|
4.10 |
% |
U.S. SBA PPP loans |
|
|
20,444 |
|
|
|
452 |
|
8.84 |
% |
|
|
116,003 |
|
|
|
1,802 |
|
6.21 |
% |
|
|
20,444 |
|
|
|
452 |
|
8.84 |
% |
|
|
40,376 |
|
|
|
847 |
|
8.39 |
% |
Consumer loans |
|
|
3,213 |
|
|
|
33 |
|
4.11 |
% |
|
|
1,320 |
|
|
|
15 |
|
4.55 |
% |
|
|
3,213 |
|
|
|
33 |
|
4.11 |
% |
|
|
2,629 |
|
|
|
25 |
|
3.80 |
% |
Allowance for credit losses |
|
|
(21,043 |
) |
|
|
— |
|
0.00 |
% |
|
|
(19,614 |
) |
|
|
— |
|
0.00 |
% |
|
|
(21,043 |
) |
|
|
— |
|
0.00 |
% |
|
|
(18,434 |
) |
|
|
— |
|
0.00 |
% |
Loan portfolio (1) |
|
$ |
1,566,837 |
|
|
$ |
15,610 |
|
3.99 |
% |
|
$ |
1,592,363 |
|
|
$ |
16,592 |
|
4.17 |
% |
|
$ |
1,566,837 |
|
|
$ |
15,610 |
|
3.99 |
% |
|
$ |
1,570,015 |
|
|
$ |
16,222 |
|
4.13 |
% |
Taxable investment securities |
|
|
484,157 |
|
|
|
1,572 |
|
1.30 |
% |
|
|
229,810 |
|
|
|
951 |
|
1.66 |
% |
|
|
484,157 |
|
|
|
1,572 |
|
1.30 |
% |
|
|
465,771 |
|
|
|
1,441 |
|
1.24 |
% |
Nontaxable investment securities |
|
|
17,513 |
|
|
|
94 |
|
2.15 |
% |
|
|
20,841 |
|
|
|
114 |
|
2.19 |
% |
|
|
17,513 |
|
|
|
94 |
|
2.15 |
% |
|
|
17,509 |
|
|
|
90 |
|
2.06 |
% |
Interest-bearing deposits in other banks |
|
|
42,608 |
|
|
|
60 |
|
0.56 |
% |
|
|
25,064 |
|
|
|
14 |
|
0.22 |
% |
|
|
42,608 |
|
|
|
60 |
|
0.56 |
% |
|
|
41,736 |
|
|
|
25 |
|
0.24 |
% |
Federal funds sold |
|
|
— |
|
|
|
— |
|
0.00 |
% |
|
|
18,721 |
|
|
|
7 |
|
0.15 |
% |
|
|
— |
|
|
|
— |
|
0.00 |
% |
|
|
— |
|
|
|
— |
|
0.00 |
% |
Total Interest-Earning Assets |
|
|
2,111,115 |
|
|
|
17,336 |
|
3.28 |
% |
|
|
1,886,799 |
|
|
|
17,678 |
|
3.75 |
% |
|
|
2,111,115 |
|
|
|
17,336 |
|
3.28 |
% |
|
|
2,095,031 |
|
|
|
17,778 |
|
3.39 |
% |
Cash and cash equivalents |
|
|
116,560 |
|
|
|
|
|
|
|
82,669 |
|
|
|
|
|
|
|
116,560 |
|
|
|
|
|
|
|
100,480 |
|
|
|
|
|
Goodwill |
|
|
10,835 |
|
|
|
|
|
|
|
10,835 |
|
|
|
|
|
|
|
10,835 |
|
|
|
|
|
|
|
10,835 |
|
|
|
|
|
Core deposit intangible |
|
|
994 |
|
|
|
|
|
|
|
1,481 |
|
|
|
|
|
|
|
994 |
|
|
|
|
|
|
|
1,107 |
|
|
|
|
|
Other assets |
|
|
86,488 |
|
|
|
|
|
|
|
88,791 |
|
|
|
|
|
|
|
86,488 |
|
|
|
|
|
|
|
85,811 |
|
|
|
|
|
Total Assets |
|
$ |
2,325,992 |
|
|
|
|
|
|
$ |
2,070,575 |
|
|
|
|
|
|
$ |
2,325,992 |
|
|
|
|
|
|
$ |
2,293,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
$ |
609,945 |
|
|
$ |
— |
|
0.00 |
% |
|
$ |
381,059 |
|
|
$ |
— |
|
0.00 |
% |
|
$ |
609,945 |
|
|
$ |
— |
|
0.00 |
% |
|
$ |
449,272 |
|
|
$ |
— |
|
0.00 |
% |
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
|
121,236 |
|
|
|
15 |
|
0.05 |
% |
|
|
101,782 |
|
|
|
13 |
|
0.05 |
% |
|
|
121,236 |
|
|
|
15 |
|
0.05 |
% |
|
|
114,123 |
|
|
|
14 |
|
0.05 |
% |
Demand deposits |
|
|
625,241 |
|
|
|
103 |
|
0.07 |
% |
|
|
602,836 |
|
|
|
97 |
|
0.06 |
% |
|
|
625,241 |
|
|
|
103 |
|
0.07 |
% |
|
|
754,656 |
|
|
|
87 |
|
0.05 |
% |
Money market deposits |
|
|
378,781 |
|
|
|
100 |
|
0.11 |
% |
|
|
349,718 |
|
|
|
98 |
|
0.11 |
% |
|
|
378,781 |
|
|
|
100 |
|
0.11 |
% |
|
|
|
|
|
0.11 |
% |
Certificates of deposit |
|
|
322,346 |
|
|
|
295 |
|
0.37 |
% |
|
|
351,365 |
|
|
|
594 |
|
0.68 |
% |
|
|
322,346 |
|
|
|
295 |
|
0.37 |
% |
|
|
333,658 |
|
|
|
364 |
|
0.44 |
% |
Total interest-bearing deposits |
|
|
1,447,604 |
|
|
|
513 |
|
0.14 |
% |
|
|
1,405,701 |
|
|
|
802 |
|
0.23 |
% |
|
|
1,447,604 |
|
|
|
513 |
|
0.14 |
% |
|
|
1,571,851 |
|
|
|
565 |
|
0.14 |
% |
Total Deposits |
|
|
2,057,549 |
|
|
|
513 |
|
0.10 |
% |
|
|
1,786,760 |
|
|
|
802 |
|
0.18 |
% |
|
|
2,057,549 |
|
|
|
513 |
|
0.10 |
% |
|
|
2,021,123 |
|
|
|
565 |
|
0.11 |
% |
Long-term debt |
|
|
12,219 |
|
|
|
25 |
|
0.82 |
% |
|
|
27,291 |
|
|
|
41 |
|
0.60 |
% |
|
|
12,219 |
|
|
|
25 |
|
0.82 |
% |
|
|
12,237 |
|
|
|
6 |
|
0.20 |
% |
Subordinated Notes |
|
|
19,515 |
|
|
|
251 |
|
5.14 |
% |
|
|
19,490 |
|
|
|
251 |
|
5.15 |
% |
|
|
19,515 |
|
|
|
251 |
|
5.14 |
% |
|
|
19,501 |
|
|
|
252 |
|
5.17 |
% |
Guaranteed preferred beneficial interest in junior subordinated
debentures |
|
|
12,000 |
|
|
|
78 |
|
2.60 |
% |
|
|
12,000 |
|
|
|
75 |
|
2.50 |
% |
|
|
12,000 |
|
|
|
78 |
|
2.60 |
% |
|
|
12,000 |
|
|
|
74 |
|
2.47 |
% |
Total Debt |
|
|
43,734 |
|
|
|
354 |
|
3.24 |
% |
|
|
58,781 |
|
|
|
367 |
|
2.50 |
% |
|
|
43,734 |
|
|
|
354 |
|
3.24 |
% |
|
|
43,738 |
|
|
|
332 |
|
3.04 |
% |
Interest-Bearing Liabilities |
|
|
1,491,338 |
|
|
|
867 |
|
0.23 |
% |
|
|
1,464,482 |
|
|
|
1,169 |
|
0.32 |
% |
|
|
1,491,338 |
|
|
|
867 |
|
0.23 |
% |
|
|
1,615,589 |
|
|
|
897 |
|
0.22 |
% |
Total Funds |
|
|
2,101,283 |
|
|
|
867 |
|
0.17 |
% |
|
|
1,845,541 |
|
|
|
1,169 |
|
0.25 |
% |
|
|
2,101,283 |
|
|
|
867 |
|
0.17 |
% |
|
|
2,064,861 |
|
|
|
897 |
|
0.17 |
% |
Other liabilities |
|
|
20,155 |
|
|
|
|
|
|
|
23,910 |
|
|
|
|
|
|
|
20,155 |
|
|
|
|
|
|
|
20,658 |
|
|
|
|
|
Stockholders' equity |
|
|
204,554 |
|
|
|
|
|
|
|
201,124 |
|
|
|
|
|
|
|
204,554 |
|
|
|
|
|
|
|
207,745 |
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
2,325,992 |
|
|
|
|
|
|
$ |
2,070,575 |
|
|
|
|
|
|
$ |
2,325,992 |
|
|
|
|
|
|
$ |
2,293,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
16,469 |
|
|
|
|
|
$ |
16,509 |
|
|
|
|
|
$ |
16,469 |
|
|
|
|
|
$ |
16,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
|
3.05 |
% |
|
|
|
|
|
3.43 |
% |
|
|
|
|
|
3.05 |
% |
|
|
|
|
|
3.17 |
% |
Net yield on interest-earning assets |
|
|
|
|
|
3.12 |
% |
|
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.12 |
% |
|
|
|
|
|
3.22 |
% |
Average interest-earning assets to average interest-bearing
liabilities |
|
|
|
|
|
141.56 |
% |
|
|
|
|
|
128.84 |
% |
|
|
|
|
|
141.56 |
% |
|
|
|
|
|
129.68 |
% |
Average loans to average deposits |
|
|
|
|
|
76.15 |
% |
|
|
|
|
|
89.12 |
% |
|
|
|
|
|
76.15 |
% |
|
|
|
|
|
77.68 |
% |
Average transaction deposits to total average deposits ** |
|
|
|
|
|
84.33 |
% |
|
|
|
|
|
80.34 |
% |
|
|
|
|
|
84.33 |
% |
|
|
|
|
|
83.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds |
|
|
|
|
|
0.17 |
% |
|
|
|
|
|
0.25 |
% |
|
|
|
|
|
0.17 |
% |
|
|
|
|
|
0.17 |
% |
Cost of deposits |
|
|
|
|
|
0.10 |
% |
|
|
|
|
|
0.18 |
% |
|
|
|
|
|
0.10 |
% |
|
|
|
|
|
0.11 |
% |
Cost of debt |
|
|
|
|
|
3.24 |
% |
|
|
|
|
|
2.50 |
% |
|
|
|
|
|
3.24 |
% |
|
|
|
|
|
3.04 |
% |
(1) Loan average balance includes non-accrual
loans. There are no tax equivalency adjustments. There was $50,000,
$90,000 and $161,000 of accretion interest for the three months
ended March 31, 2022 and 2021, and December 31, 2021,
respectively.
** Transaction deposits exclude time
deposits.
SUMMARY OF LOAN PORTFOLIO
(UNAUDITED)(dollars in thousands)
Portfolio loans, net of deferred costs and fees,
are summarized by type as follows:
BY LOAN TYPE |
|
March 31, 2022 |
|
% |
|
December 31, 2021* |
|
% |
|
September 30, 2021* |
|
% |
|
June 30, 2021* |
|
% |
|
March 31, 2021* |
|
% |
Portfolio Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,177,761 |
|
|
72.28 |
% |
|
$ |
1,113,793 |
|
|
70.54 |
% |
|
$ |
1,087,102 |
|
|
70.89 |
% |
|
$ |
1,110,011 |
|
|
72.34 |
% |
|
$ |
1,079,561 |
|
|
71.60 |
% |
Residential first mortgages |
|
|
86,416 |
|
|
5.30 |
|
|
|
92,710 |
|
|
5.87 |
|
|
|
98,590 |
|
|
6.43 |
|
|
|
107,435 |
|
|
7.00 |
|
|
|
117,977 |
|
|
7.82 |
|
Residential rentals |
|
|
191,065 |
|
|
11.73 |
|
|
|
194,911 |
|
|
12.35 |
|
|
|
172,073 |
|
|
11.22 |
|
|
|
142,252 |
|
|
9.27 |
|
|
|
137,573 |
|
|
9.12 |
|
Construction and land development |
|
|
30,649 |
|
|
1.88 |
|
|
|
35,502 |
|
|
2.25 |
|
|
|
37,070 |
|
|
2.42 |
|
|
|
36,839 |
|
|
2.40 |
|
|
|
38,377 |
|
|
2.54 |
|
Home equity and second mortgages |
|
|
26,445 |
|
|
1.62 |
|
|
|
25,661 |
|
|
1.63 |
|
|
|
26,542 |
|
|
1.73 |
|
|
|
28,751 |
|
|
1.87 |
|
|
|
29,387 |
|
|
1.95 |
|
Commercial loans |
|
|
48,948 |
|
|
3.00 |
|
|
|
50,512 |
|
|
3.20 |
|
|
|
48,287 |
|
|
3.15 |
|
|
|
47,530 |
|
|
3.10 |
|
|
|
42,698 |
|
|
2.83 |
|
Consumer loans |
|
|
3,592 |
|
|
0.22 |
|
|
|
3,015 |
|
|
0.19 |
|
|
|
2,183 |
|
|
0.14 |
|
|
|
1,459 |
|
|
0.10 |
|
|
|
1,432 |
|
|
0.09 |
|
Commercial equipment |
|
|
64,662 |
|
|
3.97 |
|
|
|
62,706 |
|
|
3.97 |
|
|
|
61,569 |
|
|
4.02 |
|
|
|
60,132 |
|
|
3.92 |
|
|
|
61,057 |
|
|
4.05 |
|
Total portfolio loans |
|
|
1,629,538 |
|
|
100.00 |
% |
|
|
1,578,810 |
|
|
100.00 |
% |
|
|
1,533,416 |
|
|
100.00 |
% |
|
|
1,534,409 |
|
|
100.00 |
% |
|
|
1,508,062 |
|
|
100.00 |
% |
Less: Allowance for Credit Losses |
|
|
(21,382 |
) |
|
(1.31 |
) |
|
|
(18,417 |
) |
|
(1.17 |
) |
|
|
(18,579 |
) |
|
(1.21 |
) |
|
|
(18,516 |
) |
|
(1.21 |
) |
|
|
(18,256 |
) |
|
(1.21 |
) |
Total net portfolio loans |
|
|
1,608,156 |
|
|
|
|
|
1,560,393 |
|
|
|
|
|
1,514,837 |
|
|
|
|
|
1,515,893 |
|
|
|
|
|
1,489,806 |
|
|
|
U.S. SBA PPP loans |
|
|
15,279 |
|
|
|
|
|
26,398 |
|
|
|
|
|
54,807 |
|
|
|
|
|
86,482 |
|
|
|
|
|
112,485 |
|
|
|
Total net loans |
|
$ |
1,623,435 |
|
|
|
|
$ |
1,586,791 |
|
|
|
|
$ |
1,569,644 |
|
|
|
|
$ |
1,602,375 |
|
|
|
|
$ |
1,602,291 |
|
|
|
* December 31, 2021, September 30, 2021, June 30,
2021 and March 31, 2021 reported balance are shown net of
deferred costs and fees to conform with the current period's
presentation.
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, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
(dollars in thousands) |
|
EOP Contractual Interest rate |
|
EOP Contractual Interest rate |
|
EOP Contractual Interest rate |
|
EOP Contractual Interest rate |
|
EOP Contractual Interest rate |
Commercial real estate |
|
3.79 |
% |
|
3.79 |
% |
|
3.91 |
% |
|
3.96 |
% |
|
4.02 |
% |
Residential first mortgages |
|
3.80 |
% |
|
3.80 |
% |
|
3.84 |
% |
|
3.87 |
% |
|
3.87 |
% |
Residential rentals |
|
3.78 |
% |
|
3.81 |
% |
|
3.97 |
% |
|
4.11 |
% |
|
4.20 |
% |
Construction and land development |
|
4.36 |
% |
|
4.38 |
% |
|
4.32 |
% |
|
4.31 |
% |
|
4.32 |
% |
Home equity and second mortgages |
|
3.50 |
% |
|
3.51 |
% |
|
3.51 |
% |
|
3.50 |
% |
|
3.52 |
% |
Commercial loans |
|
4.47 |
% |
|
4.48 |
% |
|
4.48 |
% |
|
4.44 |
% |
|
4.63 |
% |
Consumer loans |
|
4.33 |
% |
|
4.37 |
% |
|
5.26 |
% |
|
5.65 |
% |
|
5.75 |
% |
Commercial equipment |
|
4.29 |
% |
|
4.32 |
% |
|
4.39 |
% |
|
4.42 |
% |
|
4.40 |
% |
U.S. SBA PPP loans |
|
1.00 |
% |
|
1.00 |
% |
|
1.00 |
% |
|
1.00 |
% |
|
1.00 |
% |
Total Loans |
|
3.81 |
% |
|
3.80 |
% |
|
3.85 |
% |
|
3.84 |
% |
|
3.84 |
% |
|
|
|
|
|
|
|
|
|
|
|
Yields without U.S. SBA PPP Loans |
|
3.85 |
% |
|
3.84 |
% |
|
3.95 |
% |
|
4.00 |
% |
|
4.06 |
% |
ALLOWANCE FOR CREDIT LOSSES AND ALLOWANCE
FOR LOAN LOSSES (UNAUDITED)
(dollars in thousands) |
|
For the Three Months Ended** |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
Beginning of period |
|
$ |
18,417 |
|
|
$ |
18,579 |
|
|
$ |
18,516 |
|
|
$ |
18,256 |
|
|
$ |
19,424 |
|
|
|
|
|
|
|
|
|
|
|
|
Impact of ASC 326 Adoption |
|
|
2,496 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Charge-offs |
|
|
— |
|
|
|
(181 |
) |
|
|
(491 |
) |
|
|
(61 |
) |
|
|
(1,485 |
) |
Recoveries |
|
|
19 |
|
|
|
19 |
|
|
|
554 |
|
|
|
30 |
|
|
|
22 |
|
Net charge-offs |
|
|
19 |
|
|
|
(162 |
) |
|
|
63 |
|
|
|
(31 |
) |
|
|
(1,463 |
) |
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
|
450 |
|
|
|
— |
|
|
|
— |
|
|
|
291 |
|
|
|
295 |
|
End of period |
|
$ |
21,382 |
|
|
$ |
18,417 |
|
|
$ |
18,579 |
|
|
$ |
18,516 |
|
|
$ |
18,256 |
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs to average portfolio loans (annualized)2 |
|
|
— |
% |
|
(0.04 |
)% |
|
|
0.02 |
% |
|
(0.01 |
)% |
|
(0.40 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Breakdown of general and specific allowance as a percentage
of total portfolio loans3 |
General allowance |
|
$ |
21,087 |
|
|
$ |
18,151 |
|
|
$ |
18,204 |
|
|
$ |
17,686 |
|
|
$ |
17,365 |
|
Specific allowance |
|
|
295 |
|
|
|
266 |
|
|
|
323 |
|
|
|
778 |
|
|
|
891 |
|
|
|
$ |
21,382 |
|
|
$ |
18,417 |
|
|
$ |
18,527 |
|
|
$ |
18,464 |
|
|
$ |
18,256 |
|
|
|
|
|
|
|
|
|
|
|
|
General allowance |
|
|
1.29 |
% |
|
|
1.15 |
% |
|
|
1.19 |
% |
|
|
1.15 |
% |
|
|
1.15 |
% |
Specific allowance |
|
|
0.02 |
% |
|
|
0.02 |
% |
|
|
0.02 |
% |
|
|
0.05 |
% |
|
|
0.06 |
% |
Allowance to total portfolio loans |
|
|
1.31 |
% |
|
|
1.17 |
% |
|
|
1.21 |
% |
|
|
1.20 |
% |
|
|
1.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
Allowance to non-acquired loans |
|
n/a (1) |
|
|
1.20 |
% |
|
|
1.25 |
% |
|
|
1.25 |
% |
|
|
1.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
Allowance + Non-PCI FV Mark |
|
n/a (1) |
|
$ |
18,815 |
|
|
$ |
19,070 |
|
|
$ |
19,090 |
|
|
$ |
18,939 |
|
Allowance + Non-PCI FV Mark to total portfolio loans |
|
n/a (1) |
|
|
1.19 |
% |
|
|
1.24 |
% |
|
|
1.24 |
% |
|
|
1.26 |
% |
* The Company implemented the CECL accounting standard effective
January 1, 2022. The Company used an incurred loss methodology for
quarters displayed before March 31, 2022.
(1) Allowance to non-acquired
loans and Non-PCI FV Mark are no longer relevant as all the ACL
considers all loan portfolios.
________________3 Portfolio loans include
all loan portfolios except the U.S. SBA PPP loan portfolio.
CLASSIFIED AND SPECIAL MENTION ASSETS
(UNAUDITED)
The following is a breakdown of the Company’s
classified and special mention assets at March 31, 2022
and December 31, 2021, 2020, 2019, and 2018,
respectively:
|
|
As of |
(dollars in thousands) |
|
3/31/20224 |
|
12/31/2021 |
|
12/31/2020 |
|
12/31/2019 |
|
12/31/2018 |
Classified loans |
|
|
|
|
|
|
|
|
|
|
Substandard |
|
$ |
4,745 |
|
|
$ |
5,211 |
|
|
$ |
19,249 |
|
|
$ |
26,863 |
|
|
$ |
32,226 |
|
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total classified loans |
|
|
4,745 |
|
|
|
5,211 |
|
|
|
19,249 |
|
|
|
26,863 |
|
|
|
32,226 |
|
Special mention loans |
|
|
— |
|
|
|
— |
|
|
|
7,672 |
|
|
|
— |
|
|
|
— |
|
Total classified and special mention loans |
|
$ |
4,745 |
|
|
$ |
5,211 |
|
|
$ |
26,921 |
|
|
$ |
26,863 |
|
|
$ |
32,226 |
|
|
|
|
|
|
|
|
|
|
|
|
Classified loans |
|
$ |
4,745 |
|
|
$ |
5,211 |
|
|
$ |
19,249 |
|
|
$ |
26,863 |
|
|
$ |
32,226 |
|
Classified securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
482 |
|
Other real estate owned |
|
|
— |
|
|
|
— |
|
|
|
3,109 |
|
|
|
7,773 |
|
|
|
8,111 |
|
Total classified assets |
|
$ |
4,745 |
|
|
$ |
5,211 |
|
|
$ |
22,358 |
|
|
$ |
34,636 |
|
|
$ |
40,819 |
|
|
|
|
|
|
|
|
|
|
|
|
Total classified assets as a percentage of total
assets |
|
|
0.20 |
% |
|
|
0.22 |
% |
|
|
1.10 |
% |
|
|
1.93 |
% |
|
|
2.42 |
% |
Total classified assets as a percentage of Risk Based
Capital |
|
|
1.87 |
% |
|
|
2.10 |
% |
|
|
9.61 |
% |
|
|
16.21 |
% |
|
|
21.54 |
% |
___________________4 Classified loans are
not net of deferred costs and fees before the
quarter ended March 31, 2022.
SUMMARY OF DEPOSITS
(UNAUDITED)
|
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
(dollars in thousands) |
|
Balance |
|
% |
|
Balance |
|
% |
|
Balance |
|
% |
|
Balance |
|
% |
|
Balance |
|
% |
Noninterest-bearing demand |
|
$ |
644,385 |
|
30.75 |
% |
|
$ |
445,778 |
|
21.68 |
% |
|
$ |
432,606 |
|
21.58 |
% |
|
$ |
423,165 |
|
22.18 |
% |
|
$ |
406,319 |
|
21.75 |
% |
Interest-bearing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
618,869 |
|
29.54 |
% |
|
|
790,481 |
|
38.45 |
% |
|
|
764,482 |
|
38.14 |
% |
|
|
685,023 |
|
35.90 |
% |
|
|
651,639 |
|
34.89 |
% |
Money market deposits |
|
|
387,700 |
|
18.51 |
% |
|
|
372,717 |
|
18.13 |
% |
|
|
355,582 |
|
17.74 |
% |
|
|
351,262 |
|
18.41 |
% |
|
|
355,680 |
|
19.04 |
% |
Savings |
|
|
124,038 |
|
5.92 |
% |
|
|
119,767 |
|
5.82 |
% |
|
|
112,282 |
|
5.60 |
% |
|
|
107,288 |
|
5.62 |
% |
|
|
105,590 |
|
5.65 |
% |
Certificates of deposit |
|
|
320,091 |
|
15.28 |
% |
|
|
327,421 |
|
15.92 |
% |
|
|
339,655 |
|
16.94 |
% |
|
|
341,400 |
|
17.89 |
% |
|
|
348,668 |
|
18.67 |
% |
Total interest-bearing |
|
|
1,450,698 |
|
69.25 |
% |
|
|
1,610,386 |
|
78.32 |
% |
|
|
1,572,001 |
|
78.42 |
% |
|
|
1,484,973 |
|
77.82 |
% |
|
|
1,461,577 |
|
78.25 |
% |
Total Deposits |
|
$ |
2,095,083 |
|
100.00 |
% |
|
$ |
2,056,164 |
|
100.00 |
% |
|
$ |
2,004,607 |
|
100.00 |
% |
|
$ |
1,908,138 |
|
100.00 |
% |
|
$ |
1,867,896 |
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction accounts |
|
$ |
1,774,992 |
|
84.72 |
% |
|
$ |
1,728,743 |
|
84.08 |
% |
|
$ |
1,664,952 |
|
83.06 |
% |
|
$ |
1,566,738 |
|
82.11 |
% |
|
$ |
1,519,228 |
|
81.33 |
% |
Community Financial (NASDAQ:TCFC)
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