ASB BANCORP INC ASHEVILLE, N.C., July 31, 2015 /PRNewswire/ -- ASB Bancorp, Inc. (the "Company") (NASDAQ GM: ASBB), the holding company for Asheville Savings Bank, S.S.B. (the "Bank"), announced today its operating results for the three- and six-month periods ended June 30, 2015. The Company reported net income of $865,000, or $0.22 per diluted common share, for the quarter ended June 30, 2015 compared to $941,000, or $0.21 per diluted common share, for the same quarter of 2014. For the six months ended June 30, 2015, the Company reported net income of $1.5 million compared to net income of $1.3 million for the same period of 2014. For the year-to-date periods, net income per share increased 23.3% to $0.37 per diluted common share for the six months ended June 30, 2015 from $0.30 per diluted common share for the six months ended June 30, 2014. The three- and six-month periods ended June 30, 2014 included net nonrecurring after-tax earnings credits of $601,000 and $702,000, respectively, that were primarily attributable to the release of loan loss reserves, which significantly distorted the comparisons of the quarterly and year-over-year loan loss provisions and earnings.
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Suzanne DeFerie, President and CEO, commented, "Our latest quarterly financial results are indicative of our diligent focus on enhancing our core operating results in tandem with strengthening our balance sheet with a year-over-year total loan growth of 17.2% and core deposit growth of 9.6%. Our net interest income increased over the previous four quarters as we increased interest income from loans by 12.7% compared to the second quarter of 2014. As we continue our endeavors to improve efficiencies, we will remain vigilant in our approach to profitable growth at reasonable risks."
2015 Second Quarter Highlights
-- Net income for the second quarter of 2015 was $865,000, or $0.22 per
diluted common share, compared to $941,000, or $0.21 per diluted common
share, for the second quarter of 2014. The second quarter of 2014
included a net nonrecurring after-tax earnings credit of $601,000 that
was primarily attributable to the release of loan loss reserves.
Excluding the 2014 nonrecurring earnings credit, net income for the
second quarter of 2015 exceeded net income for the second quarter of
2014.
-- Net interest income increased 10.7% to $5.4 million for the three months
ended June 30, 2015 from $4.9 million for the three months ended June
30, 2014. The net interest margin improved to 2.96% for the second
quarter of 2015 compared to 2.82% for the second quarter of 2014.
-- Interest income from loans increased 12.7% in the second quarter of 2015
compared to the second quarter of 2014, which primarily reflected a
$90.3 million increase in average loan balances when comparing the two
quarters.
-- The Company recorded a $65,000 provision for loan losses in the second
quarter of 2015 compared to a recovery of loan losses of $(1.4) million
in the second quarter of 2014. The allowance for loan losses declined to
1.11% of total loans at June 30, 2015 from 1.14% at December 31, 2014,
and the allowance coverage of nonperforming loans was 210.3% at June 30,
2015 compared to 221.3% at December 31, 2014.
-- Loan balances increased $11.3 million, or 2.1%, to $553.0 million from
March 31, 2015. Loans increased $31.2 million, or 6.0%, since December
31, 2014 and increased $81.0 million, or 17.2%, since June 30, 2014 as
new loan originations exceeded loan repayments, prepayments and
foreclosures. The 2015 increase in loan balances is net of a decrease in
the indirect auto lending portfolio due to a strategic decision during
the second quarter of 2015 to cease production in this lending area.
-- Noninterest income increased 26.6% to $2.0 million for the second
quarter of 2015 from $1.6 million for the second quarter of 2014,
primarily due to the increase in mortgage banking income.
-- Noninterest expenses decreased 5.4% to $6.0 million for the second
quarter of 2015 from $6.4 million for the second quarter of 2014,
primarily due to decreases in foreclosed property expenses and
compensation expenses.
-- Delinquent and nonperforming loans were 0.50% and 0.53%, respectively,
of total loans at June 30, 2015, compared to 0.60% and 0.52%,
respectively, of total loans at December 31, 2014.
-- Nonperforming assets, including foreclosed properties, were 1.57% of
total assets at June 30, 2015 compared to 1.51% of total assets at
December 31, 2014 and 1.64% of total assets at June 30, 2014.
-- Core deposits, which exclude certificates of deposit, increased $24.4
million, or 5.4%, since December 31, 2014 and $41.5 million, or 9.6%,
since June 30, 2014. Noninterest-bearing deposits have increased $16.5
million, or 17.0%, since December 31, 2014, while commercial
non-maturity deposits increased $18.6 million, or 15.3%, over the same
period.
-- Book value per common share increased to $21.96 at June 30, 2015 from
$21.56 at December 31, 2014 and $21.06 at June 30, 2014.
-- Capital remained strong with consolidated regulatory capital ratios of
18.40% common equity tier 1 capital, 13.02% tier 1 leverage capital,
18.40% tier 1 risk-based capital and 19.49% total risk-based capital.
DeFerie noted, "We are excited about our success in continuing to build a growing and more diversified loan portfolio, while strengthening asset quality, diligently managing funding costs and prudently managing capital."
Income Statement Analysis
Net Interest Income. Net interest income increased by $524,000, or 10.7%, to $5.4 million for the three months ended June 30, 2015 compared to $4.9 million for the three months ended June 30, 2014. Total interest and dividend income increased $518,000, or 9.0%, to $6.3 million for the three months ended June 30, 2015 from $5.8 million for the three months ended June 30, 2014, primarily as a result of an increase of $90.3 million in average loan balances, which was partially offset by a 25 basis point decrease in the average yield on loans. Average mortgage-backed security balances decreased $20.2 million for the three months ended June 30, 2015, and the average yield on mortgage-backed securities decreased 8 basis points compared to the same period of 2014. Interest expense decreased $6,000, or 0.7%, to $880,000 for the three months ended June 30, 2015 from $886,000 for the three months ended June 30, 2014, primarily due to an $8.0 million decrease in the average balances of certificates of deposit.
Net interest income increased by $963,000, or 9.9%, to $10.7 million for the six months ended June 30, 2015 compared to $9.7 million for the six months ended June 30, 2014. Interest income on loans increased $1.2 million, primarily resulting from an $85.4 million increase in the average loan balances, partially offset by a 23 basis point decrease in the average yield on loans. Interest on securities decreased $264,000, attributable to a $27.2 million decrease in the average balance in mortgage-backed and other investment securities and a 4 basis point reduction in the average yield earned on the investment portfolio. Interest expense decreased $32,000, or 1.8%, to $1.7 million for the six months ended June 30, 2015. The lower interest expense was primarily attributable to lower average balances of certificates of deposit, as well as an average rate reduction of 1 basis point on certificates of deposit and 1 basis point on NOW accounts. The decreases in interest expense were partially offset by higher average balances of NOW, money market and savings accounts and an increase of 1 basis point in the average rate paid on money market accounts.
"Our efforts in core deposit growth and vigilant deposit repricing have provided funding for our loan growth," DeFerie explained. "We believe we have a strong loan pipeline entering the third quarter, which should support growth in interest income throughout the remainder of the year."
Noninterest Income. Noninterest income increased $414,000, or 26.6%, to $2.0 million for the three months ended June 30, 2015 from $1.6 million for the three months ended June 30, 2014. Factors that contributed to the increase in noninterest income during the 2015 period included increases of $282,000 in mortgage banking income, $50,000 in net gains from the sale of investment securities, $37,000 in income from debit card services, $28,000 in loan fees and $19,000 in gain on sale of other assets, which were partially offset by a decrease of $8,000 in deposit and other service charge income. The increase in mortgage banking income was attributable to higher volumes of residential mortgage loans originated and sold. Increased transaction volume also drove the rise in income from debit card services.
Noninterest income increased $568,000, or 18.9%, to $3.6 million for the six months ended June 30, 2015 from $3.0 million for the six months ended June 30, 2014. Factors that contributed to the increase in noninterest income during the 2015 period included increases of $417,000 in mortgage banking income, $83,000 in income from debit card services and $21,000 in income from an investment in a Small Business Investment Company, which were partially offset by lower securities net gains and lower deposit and service charge income. As was the case for the second quarter of 2015, the increase in mortgage banking income was attributable to higher volumes of residential mortgage loans originated and sold, and increased transaction volume that resulted in increased income from debit card services.
Noninterest Expenses. Noninterest expenses decreased $340,000, or 5.4%, to $6.0 million for the three months ended June 30, 2015 from $6.4 million for the three months ended June 30, 2014. The decrease for the second quarter of 2015 was primarily attributable to decreases of $188,000 in foreclosed property expenses, $177,000 in salaries and employee benefits, $51,000 in data processing expenses and $71,000 in various other expenses, which were partially offset by increases of $63,000 in mortgage software expenses, $35,000 in consumer loan expenses and $22,000 in indirect auto expenses. The decrease in salaries and benefits was primarily due to a $380,000 additional expense during the second quarter of 2014 for accelerated vesting related to the disability of an equity incentive plan participant. The decrease was partially offset by a $145,000 increase in compensation expense for employee incentives and $61,000 in increased pension plan expenses in 2015. The decrease in foreclosed property expenses included a reduction of $135,000 in valuation write-downs of foreclosed properties.
Noninterest expenses decreased $428,000, or 3.5%, to $11.8 million for the six months ended June 30, 2015 from $12.2 million for the six months ended June 30, 2014. The lower 2015 noninterest expenses primarily reflected decreases of $272,000 in foreclosed property expenses, $131,000 in compensation and employee benefits, $122,000 in data processing expenses and $57,000 in occupancy expenses, which were partially offset by increases of $68,000 in consumer loan expenses, $63,000 in mortgage software expenses and $36,000 in indirect auto expenses. The decrease in foreclosed property expenses included a reduction of $154,000 in valuation write-downs of foreclosed properties. As was the case for the second quarter of 2015, the decrease in salaries and benefits was attributable to a $380,000 additional expense during the second quarter of 2014 for accelerated vesting related to the disability of an equity incentive plan participant. The decrease for the six months was partially offset by a $145,000 increase in incentive compensation expenses and a $122,000 increase in pension plan expenses in 2015.
Balance Sheet Review
Assets. Total assets increased $23.2 million, or 3.1%, to $783.3 million at June 30, 2015 from $760.1 million at December 31, 2014. Cash and cash equivalents decreased $3.9 million, or 6.8%, to $53.0 million at June 30, 2015 from $56.9 million at December 31, 2014. Investment securities decreased $6.7 million, or 4.6%, to $138.7 million at June 30, 2015 from $145.4 million at December 31, 2014, primarily due to the sale of investment securities to fund anticipated loan growth. Loans receivable, net of deferred fees, increased $31.2 million, or 6.0%, to $553.0 million at June 30, 2015 from $521.8 million at December 31, 2014 as new loan originations exceeded loan repayments, prepayments and foreclosures.
Liabilities. Total deposits increased $20.6 million, or 3.4%, to $624.0 million at June 30, 2015 from $603.4 million at December 31, 2014. During the six months ended June 30, 2015, the Company continued its focus on core deposit growth, from which it excludes certificates of deposit. Core deposits increased $24.4 million, or 5.4%, to $473.7 million at June 30, 2015 from $449.3 million at December 31, 2014.
Commercial checking and money market accounts increased $18.6 million, or 15.3%, to $140.2 million at June 30, 2015 from $121.6 million at December 31, 2014, reflecting expanded sources of lower cost funding. The Company's initiatives to obtain new commercial deposit relationships in conjunction with making new commercial loans significantly contributed to this increase and reflects a commitment to establishing diversified relationships with business clients.
Over the same period, certificates of deposit decreased $3.8 million, or 2.5%, to $150.3 million at June 30, 2015 from $154.1 million at December 31, 2014 as the Company continued its focus on core deposit growth. Accounts payable and other liabilities increased $1.3 million, or 11.5%, to $12.9 million at June 30, 2015 from $11.6 million at December 31, 2014. The increase in accounts payable and other liabilities at June 30, 2015 was primarily attributable to a $906,000 increase in escrowed payments from mortgage borrowers and a $403,000 increase in pension plan liabilities.
"We believe our 15.3% increase in commercial checking and money market accounts during the first six months of 2015 demonstrates our ability to create full relationships with our business clients and reflects the complementary nature of our business banking strategy," DeFerie explained.
Asset Quality
Provision for Loan Losses. The provision for loan losses was $65,000 for the three months ended June 30, 2015 compared to a recovery of loan losses of $(1.4) million for the three months ended June 30, 2014. The increase in the provision for loan losses for the second quarter of 2015 was primarily due to growth in loan volume. In the second quarter of 2014, the Bank modified its loan loss methodology for unimpaired commercial construction and land development, unimpaired residential construction and land development, and unimpaired commercial and industrial loans, which resulted in a nonrecurring reduction of approximately $1.3 million in the Bank's reserves for loans not considered impaired in the second quarter of 2014. The allowance for loan losses totaled $6.1 million, or 1.11% of total loans, at June 30, 2015 compared to $5.9 million, or 1.14% of total loans, at December 31, 2014. The Company charged off $137,000 in loans during the three months ended June 30, 2015 compared to $56,000 during the three months ended June 30, 2014.
The Company recorded a provision for loan losses in the amount of $259,000 for the six months ended June 30, 2015 compared to a recovery of loan losses of $(1.5) million for the six months ended June 30, 2014. Net charge-offs were $84,000 for the first six months of 2015 compared to $79,000 for the first six months of 2014. As was the case for the second quarter of 2014, the increase in the six-month provision for loan losses primarily resulted from a $1.3 million reduction in loan loss reserves due to a modification of the loan loss methodology during the second quarter of 2014, and the increase in the provision for loan losses for the six-month period of 2015 was primarily due to growth in loan volume.
Nonperforming Assets. Nonperforming assets totaled $12.3 million, or 1.57% of total assets, at June 30, 2015, compared to $11.5 million, or 1.51% of total assets, at December 31, 2014. Nonperforming assets included $2.9 million in nonperforming loans and $9.4 million in foreclosed real estate at June 30, 2015 compared to $2.7 million and $8.8 million, respectively, at December 31, 2014.
Nonperforming loans increased $224,000 to $2.9 million, or 0.53% of total loans, at June 30, 2015 from $2.7 million, or 0.52% of total loans, at December 31, 2014. Of the $224,000 increase in nonperforming loans for the six months, $235,000 related to additional nonperforming residential mortgage loans, which was partially offset by decreases in commercial mortgages, revolving mortgages and consumer loans. Collateral on nonperforming loans in the amount of $812,000 was moved into foreclosed real estate, while performing troubled debt restructurings ("TDRs") decreased $80,000, or 1.7%, when comparing the same periods. Total performing TDRs and nonperforming assets increased $711,000, or 4.4%, to $17.0 million, or 2.17% of total assets, at June 30, 2015 compared to $16.3 million, or 2.15% of total assets, at December 31, 2014.
At June 30, 2015, nonperforming loans included seven residential mortgage loans that totaled $1.6 million, two commercial mortgage loans that totaled $840,000, three revolving home equity loans that totaled $221,000 and four commercial and industrial loans that totaled $262,000. As of June 30, 2015, the nonperforming loans had specific reserves totaling $108,000.
Foreclosed real estate at June 30, 2015 included nine properties with a total recorded amount of $9.4 million compared to ten properties with a total recorded amount of $8.8 million at December 31, 2014. During the six months ended June 30, 2015, two new properties that totaled $812,000 were added to foreclosed real estate, while three properties that totaled $156,000 were sold. In addition, the Bank sold one of its 15 units in a mixed-use condominium complex for net proceeds of $89,000. The Bank recorded no capital additions and no loss provisions on foreclosed real estate during the first six months of 2015.
The Bank's largest foreclosed property resulted from a loan relationship that had an original purpose of constructing a mixed-use retail, commercial office, and residential condominium project located in Western North Carolina. As a result of this foreclosure, the Bank acquired 44 of the 48 condominium units in the building. Following an additional write-down of approximately $630,000 on the loans secured by this collateral in the fourth quarter of 2012, the Bank recorded this foreclosed property in the amount of $9.8 million. During 2013, the Bank recorded additional write-downs totaling $1.6 million, which resulted in an adjusted recorded amount of $8.2 million at December 31, 2013. During the year ended December 31, 2014, the Bank recorded an additional write-down of $133,000 on the property and sold 28 residential condominium units and one office unit. During the first six months of 2015, the Bank sold one office unit. At June 30, 2015, the adjusted recorded amount was $4.4 million for the remaining eight retail units and six office units.
Outlook
DeFerie concluded, "We are enthusiastic with the progress we have made so far in 2015 to create value for ASB Bancorp's shareholders through the combination of loan and deposit growth, expense management, asset quality improvement and a demonstrated commitment to prudent capital management as are supported by our year-over-year improvement in earnings and book value per share. With laser focus on the achievement of the key strategies of our business plan, commercial/small business banking, mortgage banking and increased efficiencies, we look forward to continued improvement in the second half of 2015."
Profile
The Bank is a North Carolina chartered stock savings bank offering traditional financial services through 13 full-service banking centers located in Buncombe, Madison, McDowell, Henderson and Transylvania counties in Western North Carolina and a loan production office in Mecklenburg County. Originally chartered in 1936 and headquartered in Asheville, North Carolina, the Bank is locally managed with a focus on fostering strong relationships with its customers, its employees and the communities it serves. The Bank was recognized as the 2014 #1 Best Bank and #1 Best Bank for Small Business Services by the readers of the Mountain Xpress newspaper in Western North Carolina and was also awarded the Best Bank in McDowell County for 2014 by the readers of The McDowell News newspaper.
This news release, as well as other written communications made from time to time by the Company and its subsidiaries and oral communications made from time to time by authorized officers of the Company, may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the PSLRA). Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.
The Company cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and geopolitical conditions; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services and other factors described in the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
Contact: Suzanne S. DeFerie
Chief Executive Officer
(828) 254-7411
Selected Financial Condition Data
June 30, December 31,
(Dollars in thousands) 2015 2014* % Change
---- ---- --------
Total assets $783,299 $760,050 3.1%
Cash and cash equivalents 52,990 56,858 -6.8%
Investment securities 138,712 145,461 -4.6%
Loans receivable, net of deferred fees 552,999 521,820 6.0%
Allowance for loan losses (6,124) (5,949) -2.9%
Deposits 623,963 603,379 3.4%
Core deposits** 473,674 449,286 5.4%
FHLB advances 50,000 50,000 0.0%
Accounts payable and other liabilities 12,949 11,614 11.5%
Total equity 96,163 94,397 1.9%
------------
* Derived from audited consolidated financial statements.
** Core deposits are defined as total deposits excluding certificates of deposit.
Selected Operating Data
(Dollars in thousands, Three Months Ended Six Months Ended
except per share data) June 30, June 30,
-------- --------
2015 2014 % Change 2015 2014 % Change
---- ---- -------- ---- ---- --------
Interest and
dividend income $6,289 $5,771 9.0% $12,443 $11,512 8.1%
Interest expense 880 886 -0.7% 1,741 1,773 -1.8%
Net interest income 5,409 4,885 10.7% 10,702 9,739 9.9%
Provision for
(recovery of) loan losses 65 (1,390) 104.7% 259 (1,458) 117.8%
--- ------
Net interest income
after provision for
(recovery of) loan losses 5,344 6,275 -14.8% 10,443 11,197 -6.7%
Noninterest income 1,968 1,554 26.6% 3,578 3,010 18.9%
Noninterest expenses 6,010 6,350 -5.4% 11,782 12,210 -3.5%
----- -----
Income before
income tax
provision 1,302 1,479 -12.0% 2,239 1,997 12.1%
Income tax
provision 437 538 -18.8% 752 652 15.3%
Net income $865 $941 -8.1% $1,487 $1,345 10.6%
==== ==== ====== ======
Net income per
common share:
Basic $0.22 $0.22 0.0% $0.38 $0.31 22.6%
Diluted $0.22 $0.21 4.8% $0.37 $0.30 23.3%
Average shares outstanding:
Basic 3,923,199 4,342,618 -9.7% 3,911,375 4,401,741 -11.1%
Diluted 4,013,332 4,384,154 -8.5% 3,995,090 4,441,010 -10.0%
Ending shares outstanding 4,378,411 4,831,311 -9.4% 4,378,411 4,831,311 -9.4%
Selected Average Balances and Yields/Costs
For The Three Months Ended June 30,
-----------------------------------
2015 2014
---- ----
Average Yield/ Average Yield/
(Dollars in thousands) Balance Cost Balance Cost
------- ---- ------- ----
Loans receivable $553,522 4.10% $463,251 4.35%
Investment securities, including tax-exempt (1) 132,935 2.00% 153,487 1.99%
Other interest-earning assets 59,923 0.46% 93,543 0.40%
Total interest-earning assets (1) 746,380 3.44% 710,281 3.32%
Interest-bearing deposits 512,270 0.31% 502,168 0.32%
Federal Home Loan Bank advances 50,000 3.93% 50,000 3.93%
Total interest-bearing liabilities 562,921 0.63% 552,790 0.64%
Interest rate spread (1) 2.81% 2.68%
Net interest margin (1) 2.96% 2.82%
For The Six Months Ended June 30,
---------------------------------
2015 2014
---- ----
Average Yield/ Average Yield/
(Dollars in thousands) Balance Cost Balance Cost
------- ---- ------- ----
Loans receivable $544,377 4.14% $458,960 4.37%
Investment securities, including tax-exempt (1) 135,325 1.97% 162,571 2.01%
Other interest-earning assets 56,097 0.48% 80,902 0.44%
Total interest-earning assets (1) 735,799 3.46% 702,433 3.37%
Interest-bearing deposits 509,185 0.30% 500,614 0.32%
Federal Home Loan Bank advances 50,000 3.93% 50,000 3.93%
Total interest-bearing liabilities 559,986 0.63% 551,367 0.65%
Interest rate spread (1) 2.83% 2.72%
Net interest margin (1) 2.99% 2.86%
----------------------
(1) Yields on tax-exempt securities have been included on a tax-equivalent basis using a 34% federal marginal tax rate.
Selected Asset Quality Data
Three Months Ended Six Months Ended
Allowance for Loan Losses June 30, June 30,
-------- --------
(Dollars in thousands) 2015 2014 2015 2014
---- ---- ---- ----
Allowance for loan losses, beginning of period $6,042 $7,189 $5,949 $7,307
Provision for (recovery of) loan losses 65 (1,390) 259 (1,458)
Charge-offs (137) (56) (389) (150)
Recoveries 154 27 305 71
Net charge-offs (recoveries) 17 (29) (84) (79)
--- --- --- ---
Allowance for loan losses, end of period $6,124 $5,770 $6,124 $5,770
====== ====== ====== ======
Allowance for loan losses as a percent of:
Total loans 1.11% 1.22% 1.11% 1.22%
Total nonperforming loans 210.30% 283.68% 210.30% 283.68%
Nonperforming Assets June 30, December 31,
(Dollars in thousands) 2015 2014 % Change
---- ---- --------
Nonperforming loans:
Nonaccruing loans (1)
Commercial:
Commercial mortgage $840 $881 -4.7%
Commercial and industrial 262 221 18.6%
Total commercial 1,102 1,102 0.0%
----- -----
Non-commercial:
Residential mortgage 1,589 1,354 17.4%
Revolving mortgage 221 230 -3.9%
Consumer - 2 -100.0%
Total non-commercial 1,810 1,586 14.1%
----- -----
Total nonaccruing loans (1) 2,912 2,688 8.3%
----- -----
Total loans past due 90 or more days
and still accruing - - 0.0%
--- ---
Total nonperforming loans 2,912 2,688 8.3%
Foreclosed real estate 9,381 8,814 6.4%
----- -----
Total nonperforming assets 12,293 11,502 6.9%
Performing troubled debt restructurings (2) 4,724 4,804 -1.7%
Performing troubled debt restructurings and
total nonperforming assets $17,017 $16,306 4.4%
======= =======
Nonperforming loans as a percent of total loans 0.53% 0.52%
Nonperforming assets as a percent of total assets 1.57% 1.51%
Performing troubled debt restructurings and
total nonperforming assets to total assets 2.17% 2.15%
(1) Nonaccruing loans include nonaccruing troubled debt restructurings.
(2) Performing troubled debt restructurings exclude nonaccruing troubled debt restructurings.
Foreclosed Real Estate by Loan Type June 30, 2015 December 31, 2014
------------- -----------------
(Dollars in thousands) Number Amount Number Amount
------ ------ ------ ------
Commercial construction and land development 7 $8,606 8 $8,706
Residential mortgage 2 775 2 108
Total 9 $9,381 10 $8,814
=== ====== === ======
Foreclosed Real Estate Six Months Ended
(Dollars in thousands) June 30, 2015
-------------
Beginning balance $8,814
Transfers from loans 812
Loss on sale of foreclosed properties (1)
Net proceeds from sales of foreclosed properties (244)
Ending balance $9,381
======
Selected Average Balances and Performance Ratios
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
(Dollars in thousands) 2015 2014 2015 2014
---- ---- ---- ----
Selected Average Balances
Average total loans $553,522 $463,251 $544,377 $458,960
Average total interest-earning assets 746,380 710,281 735,799 702,433
Average total assets 782,252 748,806 771,606 743,602
Average total interest-bearing deposits 512,270 502,168 509,185 500,614
Average total deposits 620,762 586,593 610,743 581,359
Average total interest-bearing liabilities 562,921 552,790 559,986 551,367
Average total shareholders' equity 96,908 102,003 96,361 102,318
Selected Performance Ratios
Return on average assets (1) 0.44% 0.50% 0.39% 0.36%
Return on average equity (1) 3.58% 3.70% 3.11% 2.65%
Interest rate spread (1) (2) 2.81% 2.68% 2.83% 2.72%
Net interest margin (1) (3) 2.96% 2.82% 2.99% 2.86%
Noninterest expense to average assets (1) 3.08% 3.40% 3.08% 3.31%
Efficiency ratio (4) 80.32% 96.96% 81.40% 94.08%
(1) Ratios are annualized.
(2) Represents the difference between the weighted average yield on average interest-earning assets and the
weighted average cost of average interest-bearing liabilities. Yields on tax-exempt securities have been
included on a tax-equivalent basis using a 34% federal marginal tax rate.
(3) Represents net interest income as a percent of average interest-earning assets. Yields on tax-exempt
securities have been included on a tax-equivalent basis using a 34% federal marginal tax rate.
(4) Represents noninterest expenses divided by the sum of net interest income, on a tax-equivalent basis
using a 34% federal marginal tax rate, and noninterest income.
Quarterly Earnings Data
Three Month Periods Ended
-------------------------
(Dollars in thousands, June 30, March 31, December 31, September 30, June 30,
except per share data) 2015 2015 2014 2014 2014
---- ---- ---- ---- ----
Income Statement Data:
Interest and dividend income $6,289 $6,154 $6,117 $5,873 $5,771
Interest expense 880 861 877 886 886
Net interest income 5,409 5,293 5,240 4,987 4,885
Provision for (recovery of) loan losses 65 194 220 240 (1,390)
Net interest income after provision for
(recovery of) loan losses 5,344 5,099 5,020 4,747 6,275
Noninterest income 1,968 1,610 1,681 1,642 1,554
Noninterest expenses 6,010 5,772 5,714 5,624 6,350
Income before income
tax provision 1,302 937 987 765 1,479
Income tax provision 437 315 345 263 538
Net income $865 $622 $642 $502 $941
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Data Per Common Share:
Net income per share - Basic $0.22 $0.16 $0.17 $0.13 $0.22
Net income per share - Diluted $0.22 $0.16 $0.16 $0.12 $0.21
Book value per share $21.96 $21.93 $21.56 $21.53 $21.06
Weighted average shares outstanding:
Basic 3,923,199 3,899,419 3,867,296 3,940,229 4,342,618
Diluted 4,013,332 3,975,886 3,952,660 4,018,945 4,384,154
Ending shares outstanding 4,378,411 4,378,411 4,378,411 4,378,411 4,831,311
Quarterly Financial Condition Data
As Of As Of As Of As Of As Of
June 30, March 31, December 31, September 30, June 30,
(Dollars in thousands) 2015 2015 2014 (1) 2014 2014
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Ending Balance Sheet Data:
Total assets $783,299 $774,420 $760,050 $749,033 $754,496
Cash and cash equivalents 52,990 60,061 56,858 78,412 93,825
Investment securities 138,712 133,118 145,461 149,530 153,921
Loans receivable, net of deferred fees 552,999 541,706 521,820 487,904 472,012
Allowance for loan losses (6,124) (6,042) (5,949) (5,852) (5,770)
Deposits 623,963 612,287 603,379 594,798 592,683
Core deposits (2) 473,674 458,465 449,286 433,983 432,201
FHLB advances 50,000 50,000 50,000 50,000 50,000
Total equity 96,163 96,008 94,397 94,285 101,727
Regulatory Capital Ratios (3):
Common equity tier 1 capital 18.40% 18.42% n/a n/a n/a
Tier 1 leverage capital 13.02% 13.16% 13.17% 13.17% 14.16%
Tier 1 risk-based capital 18.40% 18.42% 19.83% 21.17% 23.69%
Total risk-based capital 19.49% 19.53% 21.01% 22.42% 24.94%
Asset Quality:
Nonperforming loans $2,912 $3,059 $2,688 $3,424 $2,034
Nonperforming assets 12,293 12,442 11,502 12,593 12,409
Nonperforming loans to total loans 0.53% 0.56% 0.52% 0.70% 0.43%
Nonperforming assets to total assets 1.57% 1.61% 1.51% 1.68% 1.64%
Allowance for loan losses $6,124 $6,042 $5,949 $5,852 $5,770
Allowance for loan losses to total loans 1.11% 1.12% 1.14% 1.20% 1.22%
Allowance for loan losses to
nonperforming loans 210.30% 197.52% 221.32% 170.91% 283.68%
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(1) Ending balance sheet data as of December 31, 2014 was derived from audited consolidated financial statements.
(2) Core deposits are defined as total deposits excluding certificates of deposit.
(3) 2015 quarterly capital ratios are based on BASEL III and prior quarters are based on BASEL I.
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SOURCE ASB Bancorp, Inc.
