OLD POINT FINANCIAL CORPORATION Net income increases $953 thousand
Net loans increase $35.1 million
Interest margin improves to 3.57%
January 27, 2015 Hampton, VA Old Point Financial Corporation (NASDAQ "OPOF") reported net income of $4.1 million, or $0.83 per diluted share, for the year ended December 31, 2014, up $953 thousand from the year ended December 31, 2013. Higher net interest income and a lower provision for loan losses, partially offset by higher noninterest expense, were the factors behind the 30.13% increase in net income when comparing 2013 and 2014.
Assets as of December 31, 2014 were $876.3 million, an increase of $12.0 million or 1.39% when compared to December 31, 2013. During 2014, Old Point continued to grow loans, funding this growth mainly from the securities portfolio. Net loans grew $35.1 million, or 7.10%, over the year, while securities declined $23.1 million. As loans typically bear higher yields than securities, total interest and dividend income increased $466 thousand when comparing 2013 and 2014. This shift from securities to loans increased Old Point's net interest margin for 2014 to 3.57%, from 3.23% for 2013.
Also during 2014, Old Point's efforts to reduce high‐cost time deposits, as well as to shift assets from securities to loans, contributed to the improved interest margin. The increase in interest income and decrease in interest expense led to an increase in net interest income (before the provision) of $1.3 million when comparing the year ended December 31, 2014 to the year ended December 31, 2013. Recoveries in 2014 contributed to the reduced provision for loan losses by more than half, compared to
2013. The combination of the improved net interest margin and reduced provision resulted in an increase of $2.0 million, or 8.38%, to net interest income after the provision for loan losses when comparing the years ended December 31, 2013 and December 31, 2014.
Noninterest expense increased $1.1 million for the year ended December 31, 2014, as compared to
2013. The largest increases were in employer‐provided healthcare benefits, included on the income statement in salaries and employee benefits, and occupancy and equipment expenses. Occupancy and equipment expenses increased $490 thousand, or 11.15% when comparing 2014 and 2013, due to the
completion of Old Point's new corporate headquarters. These increases in noninterest expense were
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partially offset by a decrease in loss on write‐down/sale of other real estate owned. Losses on other real estate owned were elevated in 2013 due to the write‐down on a single piece of property. The value of this property declined sharply due to the foreclosure by other banks of similar property in the area. There were no similar write‐offs in 2014.
As a community bank, we believe that to succeed, the community around us must thrive. Old Point National Bank supports many organizations through sponsorships and charitable donations. Approximately 29% of our giving is earmarked for education, 30% for community development, 13 % for arts & culture, and 28% for health & wellness.
For more information about our commitment to the community, pick up a copy of Old Point's Community Engagement Report in any of our branches or request a PDF via email (lwright@oldpoint.com). For information about upcoming initiatives, please visit our website (www.oldpoint.com), our Facebook page (www.facebook.com/oldpoint), or join us on Twitter
(www.twitter.com/opnb).
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Other items of note: Non‐Performing Assets (NPAs) decreased from $18.3 million as of December 31, 2013 to $11.8 million as of December 31, 2014. NPAs do not include restructured loans that are performing in accordance with their modified terms. Loans past due 90 days or more but still accruing interest, a component of NPAs, totaled $1.1 million as of December 31, 2014, of which $1.0 million were student loans that are
97‐98% guaranteed by the U.S. Government. Old Point expects to experience minimal losses on these government‐guaranteed loans. None of the guaranteed loans were 90 days past due as of December 31,
2013, as Old Point purchased the portfolio in November of 2013.
1.32% and 1.36% of total loans, respectively.
Net loans charged off as a percent of total loans (annualized) were 0.07% for the year ended December31, 2014, compared to 0.36% in 2013. This decline in net charge‐offs was partially due to loan recoveries received during 2014.
Safe Harbor Statement Regarding Forward‐Looking Statements. Statements in this press release which express "belief," "intention," "expectation," and similar expressions, identify forward‐looking statements. These forward‐looking statements are based on the beliefs of Old Point's management, as well as estimates and assumptions made by, and information currently available to, management. These statements are inherently uncertain, and there can be no assurance that the underlying estimates or assumptions will prove to be accurate. Actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of Old Point include, but are not limited to, changes in: interest rates; general economic and business conditions, including unemployment levels; demand for loan products;
the legislative/regulatory climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of the loan or investment portfolios; the level of net charge‐offs on loans; deposit flows; competition; demand for financial
services in Old Point's market area; technology; reliance on third parties for key services; the real estate market; Old Point's expansion initiatives; accounting principles, policies and guidelines; and other
factors detailed in Old Point's publicly filed documents, including its Annual Report on Form 10‐K for the year ended December 31, 2013. These risks and uncertainties should be considered in evaluating the forward‐looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of date of the release.
Old Point Financial Corporation ("OPOF" ‐ Nasdaq) is the parent company of The Old Point National Bank of Phoebus, a locally owned and managed community bank serving all of Hampton Roads and Old Point Trust & Financial Services, N.A., a Hampton Roads wealth management services provider. Web: www.oldpoint.com. For more information, contact Erin Black, Vice President/Marketing Director, Old Point National Bank at 757‐ 251‐2792.
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Old Point Financial Corporation and Subsidiaries | ||
Consolidated Balance Sheets | December 31, | December 31, |
(dollars in thousands, except per share data) | 2014 | 2013 |
(unaudited) | (audited) | |
Assets | ||
Cash and due from banks | $ 31,081 | $ 11,802 |
Interest-bearing due from banks | 833 | 18,045 |
Federal funds sold | 1,391 | 1,478 |
Cash and cash equivalents | 33,305 | 31,325 |
Securities available-for-sale, at fair value | 139,346 | 155,639 |
Securities held-to-maturity (fair value approximates $94,406 and $97,453) | 90,089 | 96,847 |
Restricted securities | 2,293 | 2,378 |
Loans, net of allowance for loan losses of $7,075 and $6,831 | 528,919 | 493,868 |
Premises and equipment, net | 42,075 | 40,546 |
Bank-owned life insurance | 23,525 | 22,673 |
Other real estate owned, net of valuation allowance of $2,908 and $2,775 | 5,106 | 6,415 |
Other assets | 11,622 | 14,597 |
Total assets | $ 876,280 | $ 864,288 |
Liabilities & Stockholde rs' Equity | ||
Deposits: | ||
Noninterest-bearing deposits | $ 186,280 | $ 182,513 |
Savings deposits | 307,078 | 286,085 |
Time deposits | 223,296 | 256,807 |
Total deposits | 716,654 | 725,405 |
Overnight repurchase agreements | 37,404 | 31,175 |
Term repurchase agreements | 412 | 411 |
Federal Home Loan Bank advances | 30,000 | 25,000 |
Accrued expenses and other liabilities | 3,313 | 1,536 |
Total liabilities | 787,783 | 783,527 |
Commitments and contingencies | 0 | 0 |
Stockholders' equity: | ||
Common stock, $5 par value, 10,000,000 shares authorized; | ||
4,959,009 shares issued and outstanding | 24,795 | 24,795 |
Additional paid-in capital | 16,392 | 16,392 |
Retained earnings | 53,203 | 50,376 |
Accumulated other comprehensive loss, net | (5,893) | (10,802) |
Total stockholders' equity | 88,497 | 80,761 |
Total liabilities and stockholders' equity | $ 876,280 | $ 864,288 |
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Old Point Fina ncia l Corpora tion a nd Subsidia rie s | ||
Consolidated Statements of Income | ||
(dollars in thousands, except per share data) | Year Ended | |
December 31, | ||
2014 | 2013 | |
(unaudited) | (audited) | |
Inte re st a nd Divide nd Income : | ||
Interest and fees on loans | $ 24,881 | $ 23,735 |
Interest on due from banks | 13 | 96 |
Interest on federal funds sold | 5 | 1 |
Interest on securities: | ||
Taxable | 3,562 | 4,547 |
Tax-exempt | 1,703 | 1,348 |
Dividends and interest on all other securities | 125 | 96 |
Total interest and dividend income | 30,289 | 29,823 |
Inte re st Ex pe nse : | ||
Interest on savings deposits | 230 | 302 |
Interest on time deposits | 2,354 | 3,119 |
Interest on federal funds purchased, securities sold under | ||
agreements to repurchase and other borrowings | 32 | 35 |
Interest on Federal Home Loan Bank advances | 1,233 | 1,224 |
Total interest expense | 3,849 | 4,680 |
Net interest income | 26,440 | 25,143 |
Provision for loan losses | 600 | 1,300 |
Net interest income after provision for loan losses | 25,840 | 23,843 |
Noninte re st Income : | ||
Income from fiduciary activities | 3,506 | 3,553 |
Service charges on deposit accounts | 4,119 | 4,183 |
Other service charges, commissions and fees | 3,940 | 3,562 |
Income from bank-owned life insurance | 851 | 848 |
Income from Old Point Mortgage | 46 | 439 |
Gain (loss) on sale of available-for-sale securities, net | 2 | (26) |
Other operating income | 180 | 214 |
Total noninterest income | 12,644 | 12,773 |
Noninte re st Ex pe nse : | ||
Salaries and employee benefits | 19,884 | 19,108 |
Occupancy and equipment | 4,886 | 4,396 |
Data processing | 1,663 | 1,630 |
FDIC insurance | 704 | 719 |
Customer development | 822 | 809 |
Legal and audit expenses | 606 | 539 |
Other outside service fees | 584 | 459 |
Employee professional development | 721 | 595 |
Postage and courier | 445 | 481 |
Stationery and supplies | 446 | 457 |
Capital stock tax | 499 | 400 |
Loss on write-down/sale of other real estate owned | 872 | 1,345 |
Other operating expenses | 2,040 | 2,167 |
Total noninterest expense | 34,172 | 33,105 |
Income before income taxes | 4,312 | 3,511 |
Income tax expense | 196 | 348 |
Net income | $ 4,116 | $ 3,163 |
Ba sic Ea rnings pe r Sha re : | ||
Average shares outstanding | 4,959,009 | 4,959,009 |
Net income per share of common stock | $ 0.83 | $ 0.64 |
Dilute d Ea rnings pe r Sha re : | ||
Average shares outstanding | 4,959,009 | 4,959,009 |
Net income per share of common stock | $ 0.83 | $ 0.64 |
Ca sh Divide nds De cla re d pe r Sha re : | $ 0.26 | $ 0.22 |
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Old Point Financial Corporation and Subsidiaries | ||
Selected Ratios (unaudited) | December 31, | |
2014 | 2013 | |
Net Interest Margin Year-to-Date | 3.57% | 3.23% |
NPAs/Total Assets | 1.35% | 2.12% |
Annualized Net Charge Offs/Total Loans | 0.07% | 0.36% |
Allow ance for Loan Losses/Total Loans | 1.32% | 1.36% |
Non-Pe rforming Assets (NPAs) (in thousands) | ||
Nonaccrual Loans | $ 5,570 | $ 11,324 |
Loans > 90 days past due, but still accruing intere st | 1,141 | 546 |
Non-Performing Restructured Loans | 0 | 0 |
Other real e state ow ned | 5,106 | 6,415 |
Total Non-Performing Assets | $ 11,817 | $ 18,285 |
Other Sele cted Numbers (in thousands) | ||
Loans Charge d Off Year-to-Date, net of recoveries | $ 356 | $ 1,793 |
Year-to-Date Average Loans | $ 517,183 | $ 471,203 |
Year-to-Date Average Assets | $ 869,965 | $ 881,378 |
Year-to-Date Average Earning Asse ts | $ 767,865 | $ 799,723 |
Year-to-Date Average Deposits | $ 720,599 | $ 737,358 |
Year-to-Date Average Equity | $ 85,550 | $ 84,695 |
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