EASTERN VIRGINIA BANKSHARES, INC. TAPPAHANNOCK, Va., April 25, 2016 /PRNewswire/ -- Eastern Virginia Bankshares, Inc. (NASDAQ: EVBS) (the "Company"), the one bank holding company of EVB (the "Bank"), reported today its results of operations for the three months ended March 31, 2016.
Performance Summary
Three Months Ended
March 31,
(dollars in thousands, except
per share data) 2016 2015
----------------------------- ---- ----
Net income (1) $2,227 $1,609
Net income available to
common shareholders (1) $2,227 $1,389
Basic and diluted net income
per common share $0.12 $0.08
Return on average assets
(annualized) 0.70% 0.48%
Return on average common
shareholders' equity
(annualized) 8.34% 5.63%
Net interest margin (tax
equivalent basis)(2) 3.78% 4.00%
(1) The difference between net income and net income available to common
shareholders is the effective dividend to holders of the Company's Series A
Preferred Stock.
(2) For more information on the calculation of net interest margin on a tax
equivalent basis, see the average balance sheet and net interest margin analysis
for the three month periods ended March 31, 2016 and 2015 contained in this
release.
The Company's results for the three months ended March 31, 2016 were directly impacted by an increase in average balances of loans, senior subordinated debt and short-term borrowings during the three months ended March 31, 2016 as compared to the same period in 2015. Loan yields declined 14 basis points for the three months ended March 31, 2016 as compared to the same period of 2015, with 8 basis points of the decline a result of lower accretion of fair value adjustments related to the acquisition of Virginia Company Bank ("VCB") in November 2014. Also, as previously disclosed, the Company engaged an independent consultant to conduct a comprehensive assessment of its operations during the first half of 2015. The assessment identified operating efficiencies and revenue enhancement opportunities. The Company has leveraged the assessment's findings and, since the second half of 2015, has begun to realize targeted increases in revenues and declines in certain noninterest expenses, particularly salaries and employee benefits expense.
Additionally, during the second quarter of 2015, the Company completed a private placement of $20.0 million in senior subordinated debt. A portion of these proceeds were used to redeem both its outstanding warrants with the U.S. Department of Treasury ("Treasury") and the remaining $9.0 million of its Series A Preferred Stock related to the Troubled Asset Relief Program ("TARP") that was originally issued during January 2009. During the fourth quarter of 2015, the Company completed an offer to exchange all $20.0 million of the senior subordinated notes for identical notes that were registered under the Securities Act of 1933. The issuance of the senior subordinated debt was a significant driver of higher interest expense and a lower net interest margin during the three months ended March 31, 2016 as compared to the same period in 2015.
In announcing these results, Joe A. Shearin, President and Chief Executive Officer commented, "I am very pleased and encouraged with the continued progress we have made as a Company during the first quarter of 2016. Our employees and Board of Directors are focused and passionately working together on our company-wide efforts to grow and improve profitability while enhancing the quality of the products and services we offer to our customers. We generated strong loan growth of 3.2% during the fourth quarter of 2016, which was our fourth straight quarter of loan growth, and which contributed to loan growth of 11.4% during the last twelve months. We firmly believe that our focus on total relationship banking is a driving force of our growth."
Shearin continued, "We have kept our strategic initiatives in the forefront and continue to drive operating efficiencies and revenue enhancements that are reflected in both our bottom line and other key profitability metrics. For the first quarter of 2016, as compared to the same period of 2015, we are reporting an increase in net income available to common shareholders of 60.3%, an increase in annualized return on average assets of 22 basis points to 0.70%, and an increase in annualized return on average common shareholders' equity of 271 basis points to 8.34%. In conjunction with loan growth driving our profitability, we have focused internally on maximizing our efficiencies and enhancing our customer experience. The impact of our internal improvements is evident in the reduction of noninterest expenses by 5.5% during the first quarter of 2016 when compared to the same period of 2015. Throughout the balance of 2016 and forward, as a company we will continue to use our strategic and financial flexibility to take advantage of growth opportunities that we expect to emerge through improving market conditions and industry consolidation that we believe will improve our performance, profitability and increase the value of our company. Given our overall financial performance, I am also pleased to announce that the Board of Directors declared another cash dividend of $0.02 per share of common stock and Series B Preferred Stock payable on May 20, 2016 to shareholders of record as of May 6, 2016."
For the three months ended March 31, 2016, the following were significant factors in the Company's reported results:
-- Increase in net interest income of $441 thousand from the same period in
2015, principally due to a $762 thousand increase in interest and fees
on loans driven primarily by loan growth, partially offset by an
increase in interest expense primarily associated with the issuance of
$20.0 million in senior subordinated debt during the second quarter of
2015;
-- Net interest margin (tax equivalent basis) decreased 22 basis points to
3.78% during the first quarter of 2016 as compared to 4.00% for the same
period of 2015 primarily due to a decline in yields on the loan
portfolio and the impact of interest incurred on the senior subordinated
debt;
-- Net accretion attributable to accounting adjustments related to the VCB
acquisition was $56 thousand for the first quarter of 2016, as compared
to $179 thousand in the same period of 2015;
-- Nonperforming assets at March 31, 2016 increased $841 thousand from
December 31, 2015, primarily due to a $453 thousand increase in
nonaccrual loans and a $378 thousand increase in other real estate
owned. Nonperforming assets at March 31, 2016 decreased $1.3 million
from March 31, 2015, primarily due to a $1.3 million decrease in
nonaccrual loans and a $857 thousand decrease in other real estate
owned, partially offset by an increase of $887 thousand in loans past
due 90 days and accruing interest;
-- Decrease in salaries and employee benefits of $240 thousand from the
same period in 2015, primarily due to reductions in staff levels during
2015 that were driven by operating efficiencies identified in the
aforementioned comprehensive assessment of our operations;
-- Increased collection, repossession and other real estate owned expense
of $76 thousand from the same period in 2015 due to increased
collections costs associated with classified assets;
-- Decrease in merger and merger related expenses of $221 thousand due to
certain costs incurred during the first quarter of 2015 associated with
the VCB acquisition that were not repeated in 2016; and
-- No effective dividend on preferred stock in the first quarter of 2016 as
compared to $220 thousand from the same period of 2015. This was due to
the redemption of the remaining 14,000 shares of the Company's Series A
Preferred Stock in transactions completed during the first and second
quarters of 2015.
Operations Analysis
The following table presents average balances of assets and liabilities, the average yields earned on such assets (on a tax equivalent basis) and rates paid on such liabilities, and the net interest margin for the three months ended March 31, 2016 and 2015.
Average Balance Sheet and Net Interest Margin Analysis
(dollars in thousands)
Three Months Ended March 31,
2016 2015
---- ----
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate (1) Balance Expense Rate (1)
------- ------- ------- ------- ------- -------
Assets:
Securities
Taxable $251,217 $1,506 2.41% $213,674 $1,202 2.28%
Restricted securities 8,984 115 5.15% 7,787 108 5.62%
Tax exempt (2) 10,508 100 3.84% 38,211 375 3.98%
------ --- ------ ---
Total securities 270,709 1,721 2.56% 259,672 1,685 2.63%
Interest bearing deposits in other banks 8,321 10 0.48% 6,966 4 0.23%
Federal funds sold 142 - 0.00% 277 - 0.00%
Loans, net of unearned income (3) 895,742 10,953 4.92% 817,046 10,191 5.06%
------- ------ ------- ------
Total earning assets 1,174,914 12,684 4.34% 1,083,961 11,880 4.44%
Less allowance for loan losses (11,221) (12,906)
Total non-earning assets 111,556 113,691
------- -------
Total assets $1,275,249 $1,184,746
========== ==========
Liabilities & Shareholders' Equity:
Interest-bearing deposits
Checking $303,348 $276 0.37% $281,337 $254 0.37%
Savings 99,422 41 0.17% 91,325 30 0.13%
Money market savings 164,539 196 0.48% 165,751 194 0.47%
Time deposits 241,798 558 0.93% 242,114 573 0.96%
------- --- ------- ---
Total interest-bearing deposits 809,107 1,071 0.53% 780,527 1,051 0.55%
Federal funds purchased and repurchase
agreements 5,530 7 0.51% 11,735 18 0.62%
Short-term borrowings 114,696 122 0.43% 82,435 42 0.21%
Junior subordinated debt 10,310 88 3.43% 10,310 80 3.15%
Senior subordinated debt 19,033 351 7.42% - - 0.00%
------ --- --- ---
Total interest-bearing liabilities 958,676 1,639 0.69% 885,007 1,191 0.55%
Noninterest-bearing liabilities
Demand deposits 180,038 161,643
Other liabilities 7,591 6,754
----- -----
Total liabilities 1,146,305 1,053,404
Shareholders' equity 128,944 131,342
------- -------
Total liabilities and shareholders' equity $1,275,249 $1,184,746
========== ==========
Net interest income (2) $11,045 $10,689
======= =======
Interest rate spread (2)(4) 3.65% 3.89%
Interest expense as a percent of
average earning assets 0.56% 0.45%
Net interest margin (2)(5) 3.78% 4.00%
Notes:
(1) Yields are annualized and based on average daily balances.
(2) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%, with a $30 adjustment for 2016 and a $115 adjustment in 2015.
(3) Nonaccrual loans have been included in the computations of average loan balances.
(4) Interest rate spread is the average yield on earning assets, calculated on a fully taxable basis, less the average rate incurred on interest-bearing liabilities.
(5) Net interest margin is the net interest income, calculated on a fully taxable basis, expressed as a percentage of average earning assets.
Interest Income and Expense
Net interest income and net interest margin
Net interest income in the first quarter of 2016 increased $441 thousand, or 4.2%, when compared to the first quarter of 2015. The Company's net interest margin (tax equivalent basis) decreased to 3.78% for the three months ended March 31, 2016, representing a 22 basis point decrease over the Company's net interest margin (tax equivalent basis) for the three months ended March 31, 2015. The quarter-over-quarter decline in the net interest margin (tax equivalent basis) was primarily driven by lower loan yields as a result of competitive pressures in the historically low rate environment, lower accretion of fair value adjustments related to the VCB acquisition and increased interest expense as a result of the private placement of $20.0 million of senior subordinated debt in April 2015. These margin pressures were largely offset in the Company's results for the quarter ended March 31, 2016, as compared to 2015, by the impact of increases in average loan balances. The most significant factors impacting net interest income during the three month period ended March 31, 2016 were as follows:
Positive Impacts:
-- Increases in average loan balances, primarily due to organic loan growth
and loan purchases, partially offset by lower loan yields; and
-- Increases in average balances of total investment securities, partially
offset by decreases in average yields earned.
Negative Impact:
-- Private placement of $20.0 million of senior subordinated debt resulting
in increases to total average interest-bearing liabilities and related
interest expense;
-- Increases in average short-term borrowings balances and rates paid,
primarily due to loan growth outpacing deposit growth and other
strategic initiatives; and
-- The Company experienced higher average interest-bearing deposit balances
during the three months ended March 31, 2016 over the comparable 2015
period, primarily due to customer growth. However, average rates paid on
total interest-bearing deposits decreased 2 basis points for the three
months ended March 31, 2016 over the comparable period in 2015. The
result was a slight increase in interest expense attributable to the
Company's deposit portfolio.
Total interest and dividend income
Total interest and dividend income increased 7.6% for the three months ended March 31, 2016, as compared to the same period in 2015. The increase in total interest and dividend income during the three months ended March 31, 2016 was primarily driven by an increase in average loan and investment securities balances, partially offset by a decrease in average loan and investment securities yields.
Loans
Average loan balances increased for the three month period ended March 31, 2016, as compared to the same period in 2015, primarily due to organic loan growth and the purchase of $29.5 million in performing one-to-four family residential mortgage loans, consumer loans and government guaranteed loans between June 2015 and March 2016. Loan growth during the first quarter of 2016 outpaced our internal targets. However, loan growth in our rural markets, especially with respect to consumer loans, remains weak while competition for commercial loans, especially in the Richmond and Tidewater markets, has been and we expect will continue to be intense given the historically low rate environment. The Company's average loan balances increased $78.7 million for the three months ended March 31, 2016 as compared to average loan balances for the same period in 2015. Total average loans were 76.2% of total average interest-earning assets for the three months ended March 31, 2016, compared to 75.4% for the three months ended March 31, 2015.
Investment securities
Average total investment securities balances increased 4.3% for the three month period ended March 31, 2016 as compared to the same period in 2015. The overall increase was the result of measured loan demand in the Company's markets, management of the Company's liquidity needs to support its operations and funds provided by deposit growth, partially offset by a lack of investment opportunities with acceptable risk-adjusted rates of return. The Company remains committed to its long-term target of managing the investment securities portfolio to comprise 20% of the Company's total assets. The yields on average investment securities decreased 7 basis points for the three months ended March 31, 2016, as compared to the same period in 2015. The decrease in yields on average investment securities during the three month period ended March 31, 2016, as compared to the same period in 2015, was driven by a lower allocation of the investment securities portfolio to SBA Pool securities and tax exempt municipal securities, both of which also tend to be higher-yielding segments of the Company's investment securities portfolio. These decreases were partially offset by higher interest rates and a greater allocation of the investment securities portfolio to higher yielding Agency CMO securities, Agency CMBS securities and taxable municipal securities.
Interest-bearing deposits
Average total interest-bearing deposit balances increased for the three month period ended March 31, 2016, as compared to the same period in 2015, primarily due to organic deposit growth that was in part driven by the Company's marketing and advertising initiatives.
Borrowings
Average total borrowings increased for the three month period ended March 31, 2016, as compared to the same period in 2015, primarily due to the issuance of $20.0 million in senior subordinated debt in April 2015 and increased short-term borrowings. Average short-term borrowings increased for the three month period ended March 31, 2016, as compared to the same period in 2015, due to additional short-term FHLB advances to fund loan growth and other strategic initiatives.
Noninterest Income
The following table depicts the components of noninterest income for the three months ended March 31, 2016 and 2015:
Three Months Ended March 31,
(dollars in thousands) 2016 2015 Change $ Change %
--------------------- ---- ---- -------- -------
Service charges and fees on deposit
accounts $739 $663 $76 11.5%
Other operating income 354 465 (111) -23.9%
Debit card/ATM fees 397 363 34 9.4%
Gain on sale of available for sale
securities, net 65 25 40 160.0%
(Loss) gain on sale of bank
premises and equipment (4) 3 (7) -233.3%
---------------------------
Total noninterest income $1,551 $1,519 $32 2.1%
====== ====== === ===
Key changes in the components of noninterest income the three months ended March 31, 2016, as compared to the same period in 2015, are discussed below:
-- Service charges and fees on deposit accounts increased primarily due to
increases in service charge, overdraft and NSF fees on checking
accounts;
-- Other operating income decreased primarily due to lower earnings from
the Bank's subsidiaries and its investment in Bankers Insurance, LLC,
partially offset by higher earnings from the Bank's investment in
Southern Trust Mortgage, LLC. Additionally, other operating income
includes earnings from the Bank's investment in Bankers Title, LLC and
losses from the Bank's investment in housing equity funds;
-- Debit card/ATM fees increased primarily due to an increase in debit card
fees driven by a higher utilization rate of debit cards by our customer
base; and
-- Gain on sale of available for sale securities, net increased for the
first quarter of 2016 compared to the same period of 2015 primarily as a
result of the Company adjusting the composition of the investment
securities portfolio as part of the Company's overall asset/liability
management strategy.
Noninterest Expense
The following table depicts the components of noninterest expense for the three months ended March 31, 2016 and 2015:
Three Months Ended March 31,
(dollars in thousands) 2016 2015 Change $ Change %
--------------------- ---- ---- -------- -------
Salaries and employee benefits $5,248 $5,488 $(240) -4.4%
Occupancy and equipment expenses 1,430 1,514 (84) -5.5%
FDIC expense 203 172 31 18.0%
Collection, repossession and other
real estate owned 165 89 76 85.4%
Loss on sale of other real estate
owned 1 32 (31) -96.9%
Impairment losses on other real
estate owned - 5 (5) -100.0%
Merger and merger related expenses - 221 (221) -100.0%
Other operating expenses 2,372 2,446 (74) -3.0%
------------------------ ----- ----- --- ----
Total noninterest expenses $9,419 $9,967 $(548) -5.5%
====== ====== ===== ====
Key changes in the components of noninterest expense for the three months ended March 31, 2016, as compared to the same period in 2015, are discussed below:
-- Salaries and employee benefits decreased primarily due to the reduction
in staff levels initiated in the second half of 2015 (which was driven
by operating efficiencies identified in the aforementioned comprehensive
assessment of our operations), increased deferred compensation on loan
originations and reduced commissions. These decreases were partially
offset by an increase in group insurance expense, recruiter fees,
bonuses and other incentive compensation;
-- FDIC expense increased due to a higher assessment base in the first
quarter of 2016 as compared to the first quarter of 2015;
-- Collection, repossession and other real estate owned expenses increased
for the first quarter of 2016 due to increases in collection costs
associated with classified assets;
-- Loss on sale of other real estate owned recorded during the first
quarter of 2015 was primarily due to the resolution and disposition of a
distressed property that was sold during that period, with minimal
losses occurring during the same period in 2016; and
-- Merger and merger related expenses incurred during the first quarter of
2015 were related to the acquisition of VCB in 2014, and no similar
expenses were incurred during the same period in 2016.
Balance Sheet and Asset Quality
Balance Sheet
Key balance sheet components as of March 31, 2016 and December 31, 2015 are as follows:
March 31, December 31,
(dollars in thousands) 2016 2015 Change $ Change %
--------------------- ---- ---- -------- -------
Total assets $1,286,185 $1,270,384 $15,801 1.2%
Interest bearing deposits with
banks 3,067 18,304 (15,237) -83.2%
Securities available for sale, at
fair value 236,496 230,943 5,553 2.4%
Securities held to maturity, at
carrying value 29,472 29,698 (226) -0.8%
Total loans 908,950 880,778 28,172 3.2%
Total deposits 998,880 988,719 10,161 1.0%
Total borrowings 149,925 148,760 1,165 0.8%
Total shareholders' equity 130,514 126,275 4,239 3.4%
Key balance sheet components as of March 31, 2016 and 2015 are as follows:
March 31, March 31,
(dollars in thousands) 2016 2015 Change $ Change %
--------------------- ---- ---- -------- -------
Total assets $1,286,185 $1,194,158 $92,027 7.7%
Interest bearing deposits with
banks 3,067 11,772 (8,705) -73.9%
Securities available for sale, at
fair value 236,496 225,797 10,699 4.7%
Securities held to maturity, at
carrying value 29,472 31,495 (2,023) -6.4%
Total loans 908,950 816,207 92,743 11.4%
Total deposits 998,880 958,157 40,723 4.3%
Total borrowings 149,925 97,722 52,203 53.4%
Total shareholders' equity 130,514 131,958 (1,444) -1.1%
Asset Quality
The asset quality measures depicted below continue to reflect the Company's efforts to prudently charge-off loans as losses are identified and maintain an appropriate allowance for loan losses.
The following table depicts the net charge-off activity for the three months ended March 31, 2016 and 2015:
Three months ended March 31,
(dollars in thousands) 2016 2015
--------------------- ---- ----
Net charge-offs $408 $363
Net charge-offs to average loans
(annualized) 0.18% 0.18%
The following table depicts the level of the allowance for loan losses as of the dates presented:
March 31, December 31, March 31,
(dollars in thousands) 2016 2015 2015
--------------------- ---- ---- ----
Allowance for loan losses $10,936 $11,327 $12,658
Allowance for loan losses to period
end loans 1.20% 1.29% 1.55%
Allowance for loan losses to
nonaccrual loans 165.31% 183.43% 159.41%
Allowance for loan losses to
nonperforming loans 141.25% 155.34% 154.75%
The following table depicts the level of nonperforming assets as of the dates presented:
March 31, December 31, March 31,
(dollars in thousands) 2016 2015 2015
--------------------- ---- ---- ----
Nonaccrual loans $6,616 $6,175 $7,940
Loans past due 90 days
and accruing interest 1,127 1,117 240
----- ----- ---
Total nonperforming
loans $7,743 $7,292 $8,180
Other real estate
owned ("OREO") 898 520 1,755
--- --- -----
Total nonperforming
assets $8,641 $7,812 $9,935
====== ====== ======
Nonperforming assets
to total loans and
OREO 0.95% 0.89% 1.21%
The following tables present the change in the balances of OREO and nonaccrual loans for the three months ended March 31, 2016:
OREO: Nonaccrual
Loans:
----- -----------
(dollars in (dollars in
thousands) thousands)
Balance at December $520 Balance at
31, 2015 December 31,
2015 $6,175
Transfers from loans 466 Loans
returned to
accrual
status (489)
Capitalized costs - Net principal
curtailments (787)
Sales proceeds (87) Charge-
offs (654)
Impairment losses on - Loan
valuation collateral
adjustments moved to
OREO (466)
Loans placed
on
nonaccrual
during
Loss on disposition (1) period 2,837
--- -----
Balance at March 31, $898 Balance at
2016 March 31,
2016 $6,616
==== ======
In general, the modification or restructuring of a loan constitutes a troubled debt restructuring ("TDR") when we grant a concession to a borrower experiencing financial difficulty. The following table depicts the balances of TDRs as of the dates presented:
March 31, December 31, March 31,
(dollars in thousands) 2016 2015 2015
--------------------- ---- ---- ----
Performing TDRs $15,158 $15,535 $14,881
Nonperforming TDRs* 1,209 1,300 3,685
----- ----- -----
Total TDRs $16,367 $16,835 $18,566
======= ======= =======
* Included in nonaccrual loans.
Forward Looking Statements
Certain statements contained in this release that are not historical facts may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended. In addition, certain statements may be contained in the Company's future filings with the Securities and Exchange Commission (the "SEC"), in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute forward-looking statements within the meaning of the Exchange Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, income or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of the Company or its management or Board of Directors, including those relating to products or services, the performance of portions of the Company's asset portfolio, future changes to the Bank's branch network and the payment of dividends; (iii) statements of future financial performance and economic conditions; (iv) statements regarding the adequacy of the allowance for loan losses; (v) statements regarding the Company's liquidity; (vi) statements of management's expectations regarding future trends in interest rates, real estate values, business opportunities and economic conditions generally and in the Company's markets; (vii) statements regarding future asset quality, including expected levels of charge-offs; (viii) statements regarding potential changes to laws, regulations or administrative guidance; (ix) statements regarding strategic initiatives of the Company or the Bank and the results of these initiatives; and (x) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
-- factors that adversely affect the Company's and the Bank's strategic and
business initiatives, including, without limitation, changes in the
economic or business conditions in the Company's markets;
-- the Company's ability and efforts to assess, manage and improve its
asset quality;
-- the strength of the economy in the Company's target market area, as well
as general economic, market, political, or business factors;
-- changes in the quality or composition of the Company's loan or
investment portfolios, including adverse developments in borrower
industries or in the repayment ability of individual borrowers or
issuers;
-- concentrations in segments of the loan portfolio or declines in real
estate values in the Company's markets;
-- the effects of the Company's adjustments to the composition of its
investment portfolio;
-- the strength of the Company's counterparties;
-- an insufficient allowance for loan losses;
-- the Company's ability to meet the capital requirements of its regulatory
agencies;
-- changes in laws, regulations and the policies of federal or state
regulators and agencies, including with respect to the implementation of
the Basel III capital framework and related rules for calculating
risk-weighted assets;
-- changes in the interest rates affecting the Company's deposits and
loans;
-- the loss of any of the Company's key employees;
-- failure, interruption or breach of any of the Company's communication or
information systems, including those provided by external vendors;
-- the effects of cyber-attacks or other security breaches;
-- the Company's potential growth, including its entrance or expansion into
new markets, the opportunities that may be presented to and pursued by
it and the need for sufficient capital to support that growth;
-- future mergers or acquisitions, if any;
-- changes in government monetary policy, interest rates, deposit flow, the
cost of funds, and demand for loan products and financial services;
-- the Company's ability to maintain internal control over financial
reporting;
-- the Company's ability to realize its deferred tax assets, including in
the event the Company experiences an ownership change as defined by
section 382 of the code;
-- the Company's ability to raise capital as needed by its business;
-- the Company's reliance on secondary sources, such as Federal Home Loan
Bank advances, sales of securities and loans, and federal funds lines of
credit from correspondent banks to meet its liquidity needs; and
-- other circumstances, many of which are beyond the Company's control.
Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions and projections within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance, actions or achievements of the Company will not differ materially from any future results, performance, actions or achievements expressed or implied by such forward-looking statements. Readers should not place undue reliance on such statements, which speak only as of the date of this report. The Company does not undertake any steps to update any forward-looking statement that may be made from time to time by it or on its behalf. For additional information on risk factors that could affect the Company's forward-looking statements, see the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and other reports filed with the SEC.
Selected Financial
Information
(dollars in thousands,
except per share
data) Three months ended March 31,
Statements of Income 2016 2015
-------------------- ---- ----
Interest and dividend
income $12,654 $11,765
Interest expense 1,639 1,191
----- -----
Net interest income 11,015 10,574
Provision for loan
losses 17 -
--- ---
Net interest income
after provision for
loan losses 10,998 10,574
Service charges and
fees on deposit
accounts 739 663
Other operating income 354 465
Debit card/ATM fees 397 363
Gain on sale of
available for sale
securities, net 65 25
(Loss) gain on sale of
bank premises and
equipment (4) 3
Noninterest income 1,551 1,519
----- -----
Salaries and employee
benefits 5,248 5,488
Occupancy and
equipment expenses 1,430 1,514
FDIC expense 203 172
Collection,
repossession and
other real estate
owned 165 89
Loss on sale of other
real estate owned 1 32
Impairment losses on
other real estate
owned - 5
Merger and merger
related expenses - 221
Other operating
expenses 2,372 2,446
----- -----
Noninterest expenses 9,419 9,967
----- -----
Income before income
taxes 3,130 2,126
Income tax expense 903 517
--- ---
Net income $2,227 $1,609
Less: Effective
dividend on preferred
stock - 220
--- ---
Net income available
to common
shareholders $2,227 $1,389
====== ======
Net income per common
share: basic and
diluted $0.12 $0.08
Selected Ratios
---------------
Return on average
assets (annualized) 0.70% 0.48%
Return on average
common shareholders'
equity (annualized) 8.34% 5.63%
Net interest margin
(tax equivalent
basis) 3.78% 4.00%
Period End Balances
-------------------
Investment securities $275,013 $264,707
Loans, net of unearned
income 908,950 816,207
Total assets 1,286,185 1,194,158
Total deposits 998,880 958,157
Total borrowings 149,925 97,722
Total shareholders'
equity 130,514 131,958
Book value per common
share 8.44 7.87
Average Balances
----------------
Investment securities $270,709 $259,672
Loans, net of unearned
income 895,742 817,046
Total earning assets 1,174,914 1,083,961
Total assets 1,275,249 1,184,746
Total deposits 989,145 942,170
Total borrowings 149,569 104,480
Total shareholders'
equity 128,944 131,342
Asset Quality at
Period End
----------------
Allowance for loan
losses $10,936 $12,658
Nonperforming assets 8,641 9,935
Net charge-offs 408 363
Net charge-offs to
average loans 0.18% 0.18%
Allowance for loan
losses to period end
loans 1.20% 1.55%
Allowance for loan
losses to nonaccrual
loans 165.31% 159.41%
Allowance for loan
losses to
nonperforming loans 141.25% 154.75%
Nonperforming assets
to total assets 0.67% 0.83%
Nonperforming assets
to total loans and
other real estate
owned 0.95% 1.21%
Other Information
-----------------
Number of shares
outstanding -period
end 13,093,135 13,023,550
Average shares
outstanding -basic 13,035,249 12,985,429
Average shares
outstanding -diluted 18,275,441 18,225,621
Contact: Adam Sothen
Chief Financial Officer
Voice: (804) 443-8404
Fax: (804) 445-1047
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/eastern-virginia-bankshares-inc-releases-first-quarter-2016-results-300256239.html
SOURCE Eastern Virginia Bankshares, Inc.
