EASTERN VIRGINIA BANKSHARES, INC. TAPPAHANNOCK, Va., April 24, 2015 /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, 2015.
Performance Summary
Three Months Ended
March 31,
(dollars in thousands, except
per share data) 2015 2014
----------------------------- ---- ----
Net income (1) $1,609 $1,996
Net income available to
common shareholders (1) $1,389 $1,478
Basic income per common share $0.11 $0.12
Diluted income per common
share $0.08 $0.09
Return on average assets
(annualized) 0.48% 0.57%
Return on average common
shareholders' equity
(annualized) 5.63% 6.64%
Net interest margin (tax
equivalent basis)(2) 4.00% 3.93%
(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, 2015 and 2014 contained in this
release.
The Company's results for the three months ended March 31, 2015 were directly impacted by the acquisition and integration of Virginia Company Bank ("VCB"), which was effective November 14, 2014, including additional legal fees and integration costs of $219 thousand, and increased average loan and deposit balances during the first quarter of 2015 as compared to the same period in 2014. While the Company expects that it has recognized the majority of the expenses related to the acquisition and integration of VCB, the Company anticipates that additional legal and other transition expenses related to this acquisition will likely be incurred through the second quarter of 2015.
In announcing these results, Joe A. Shearin, President and Chief Executive Officer commented, "I am pleased with our Company's results for the first quarter of 2015 and the continued focus and execution of our strategic plans. Our overall asset quality remains very healthy and we continue to strengthen our balance sheet through the execution of our previously disclosed strategic initiatives. While net income declined during the first quarter of 2015 as compared to the first quarter of 2014, these results were directly impacted by current period legal and other transition expenses related to our November 2014 acquisition and subsequent integration of VCB. Excluding these expenses, our overall profitability for the first quarter of 2015 compared favorably to the fourth quarter of 2014. Despite a 14% increase in net interest income and a 7 basis point improvement in our net interest margin during the current period, loan growth came in lower than our expectations. Loan growth in our rural markets, primarily on the consumer side, 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. Our competitors, both large and small, continue to pursue loan growth by relaxing their credit standards and offering very low, long term pricing. As a company we are committed to our long term success and enhancing shareholder value. We plan to deliver this by continuing to focus on building profitable relationships through quality growth all while maintaining our credit culture and pricing discipline. I remain very encouraged about the trends we began to see late in the first quarter, and given our current pipeline of loan opportunities, remain optimistic that this momentum will continue throughout the balance of 2015."
Shearin continued, "2015 is shaping up to be another very exciting year for our Company. We continue to implement strategies to strengthen our financial condition and increase profitability going forward. Earlier this year we announced the redemption of an additional $5.0 million of the Company's Series A Preferred Stock that was originally issued to the U.S. Treasury under TARP. This redemption, combined with our previous $10.0 million redemption in October 2014, eliminates $15.0 million of the original $24.0 million issuance, and significantly reduced a high cost source of capital. We successfully completed the data processing integration of VCB's systems into EVB's during late January, 2015, and we continue to focus our efforts on and expect to realize future cost savings and revenue enhancement opportunities from the VCB acquisition. In March 2015, we paid our first quarterly common stock dividend since 2010. This dividend was a reflection of the great progress we have made over the past few years in implementing our strategic plan and of the strength and financial stability of our Company. I am pleased to announce that the Board of Directors declared another cash dividend of $0.01 per share of common stock and Series B Preferred Stock payable on May 22, 2015 to shareholders of record as of May 8, 2015. Lastly, we recently announced the completion of a private placement of $20.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes to institutional accredited investors. These subordinated notes, which qualify as Tier 2 capital for regulatory purposes, were assigned an investment grade rating of BBB- by Kroll Bond Rating Agency. Subject to regulatory approval, we plan to use a portion of the net proceeds from the subordinated notes to redeem the remaining $9.0 million of the Company's Series A Preferred Stock. In addition, the remaining proceeds from the subordinated notes will enhance the Company's overall financial flexibility and serve general corporate purposes, including supporting growth and potential acquisitions."
For the three months ended March 31, 2015, the following were significant factors in the Company's reported results:
-- Increase in net interest income of $1.3 million from the same period in
2014, principally due to a $1.6 million increase in interest and fees on
loans driven primarily by loans acquired through the acquisition of VCB,
partially offset by a decrease in interest on investment securities;
-- Net interest margin (tax equivalent basis) increased 7 basis points to
4.00% during the first quarter of 2015 as compared to 3.93% for the same
period in 2014;
-- Increase in salaries and employee benefits of $1.0 million from the same
period in 2014, primarily due to increased staff levels and support
positions associated with the addition of three branches through the
acquisition of VCB;
-- Operating results were impacted by accounting adjustments which were
recorded in relation to the VCB acquisition. As a result, yields on
acquired loans increased and were partially offset by amortization of
the core deposit intangible and the time deposit premium. The net
accretion attributable to these adjustments was $178 thousand;
-- No provision for loan losses was recorded during the first quarter of
2015 compared to $250 thousand for the same period in 2014. Net
charge-offs increased to $363 thousand for the first quarter of 2015
from $111 thousand in the same period of 2014;
-- Increase in nonperforming assets of $1.4 million from December 31, 2014
to March 31, 2015 due primarily to the Company placing several loans
(primarily one to four family residential real estate) on nonaccrual
status as a result of the continued deteriorating financial condition of
the respective borrowers in the first quarter of 2015;
-- Gain of $25 thousand on the sale of available for sale securities during
the first quarter of 2015 compared to $380 thousand during the first
quarter of 2014. This decrease was primarily due to the sale of a
portion of the Company's previously impaired agency preferred securities
(FNMA & FHLMC) during the first quarter of 2014, and the Company did not
generate comparable gains on sales of securities during 2015;
-- Expenses related to FDIC insurance premiums declined to $172 thousand,
compared to $332 thousand for the same period in 2014, as the Company
faced lower FDIC insurance assessment rates following termination of its
memorandum of understanding with its federal and state banking
regulators (the "MOU");
-- Other operating expenses increased $676 thousand during the first
quarter of 2015 as compared to the same period in 2014 and were driven
primarily by increased costs associated with outsourcing of the Bank's
core information technology processing and increased marketing and
advertising expenses, including expenses associated with the acquisition
of VCB. Additionally, other operating expenses during the first quarter
of 2015 increased as compared to the same period in 2014 due to higher
franchise taxes, postage, dues and subscriptions, consulting fees, legal
expenses and core deposit intangible amortization expense; and
-- Decrease in the effective dividend on preferred stock of $298 thousand
from the same period in 2014. This was primarily due to the redemption
of 10,000 shares of the Company's Series A Preferred Stock on October
15, 2014 and the redemption of another 5,000 shares on January 15, 2015,
partially offset by the dividend rate on the Series A Preferred Stock
increasing from 5% to 9% in the first quarter of 2014.
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, 2015 and 2014.
Average Balance Sheet and Net Interest Margin Analysis
(dollars in thousands)
Three Months Ended March 31,
2015 2014
---- ----
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate (1) Balance Expense Rate (1)
------- ------- ------- ------- ------- -------
Assets:
Securities
Taxable $213,674 $1,202 2.28% $241,088 $1,507 2.54%
Restricted securities 7,787 108 5.62% 7,237 102 5.72%
Tax exempt (2) 38,211 375 3.98% 30,269 306 4.10%
------ --- ------ ---
Total securities 259,672 1,685 2.63% 278,594 1,915 2.79%
Interest bearing deposits in other banks 6,966 4 0.23% 7,492 4 0.22%
Federal funds sold 277 - 0.00% 143 - 0.00%
Loans, net of unearned income (3) 817,046 10,191 5.06% 678,110 8,550 5.11%
------- ------ ------- -----
Total earning assets 1,083,961 11,880 4.44% 964,339 10,469 4.40%
Less allowance for loan losses (12,906) (14,784)
Total non-earning assets 113,691 99,493
------- ------
Total assets $1,184,746 $1,049,048
========== ==========
Liabilities & Shareholders' Equity:
Interest-bearing deposits
Checking $281,337 $254 0.37% $257,179 $228 0.36%
Savings 91,325 30 0.13% 90,185 30 0.13%
Money market savings 165,751 194 0.47% 119,087 125 0.43%
Time deposits 242,114 573 0.96% 225,860 604 1.08%
------- --- ------- ---
Total interest-bearing deposits 780,527 1,051 0.55% 692,311 987 0.58%
Federal funds purchased and repurchase
agreements 11,735 18 0.62% 3,218 5 0.63%
Short-term borrowings 82,435 42 0.21% 72,985 35 0.19%
Trust preferred debt 10,310 80 3.15% 10,310 88 3.46%
------ --- ------ ---
Total interest-bearing liabilities 885,007 1,191 0.55% 778,824 1,115 0.58%
Noninterest-bearing liabilities
Demand deposits 161,643 129,514
Other liabilities 6,754 4,854
----- -----
Total liabilities 1,053,404 913,192
Shareholders' equity 131,342 135,856
------- -------
Total liabilities and shareholders' equity $1,184,746 $1,049,048
========== ==========
Net interest income (2) $10,689 $9,354
======= ======
Interest rate spread (2)(4) 3.89% 3.82%
Interest expense as a percent of
average earning assets 0.45% 0.47%
Net interest margin (2)(5) 4.00% 3.93%
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
$115 adjustment for 2015 and a $93 adjustment in 2014.
(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
Net interest income in the first quarter of 2015 increased $1.3 million, or 14.2%, when compared to the first quarter of 2014. The Company's net interest margin increased to 4.00% for the three months ended March 31, 2015, representing a 7 basis point increase over the Company's net interest margin for the three months ended March 31, 2014. The most significant factors impacting net interest income during these periods were as follows:
Positive Impacts:
-- Average loan balances increased primarily due to the acquisition of VCB;
and
-- Average rates paid on total interest-bearing deposits decreased for the
three months ended March 31, 2015. However, higher average
interest-bearing deposit balances during the first quarter of 2015 over
the comparable 2014 period due to interest-bearing deposits added from
the VCB acquisition offset the favorable impacts of the lower rates paid
on interest-bearing deposits and drove a slight increase in interest
expense attributable to the Company's deposit portfolio.
Negative Impacts:
-- Decreasing yields on the Company's loan portfolio; and
-- Decreases in the average balances of and average rates earned on total
investment securities for the three months ended March 31, 2015.
Total interest income
Total interest income increased 13.4% for the three months ended March 31, 2015, as compared to the same period in 2014. The increase in total interest income during the three months ended March 31, 2015 was primarily driven by an increase in average loan balances and partially offset by a decrease in average investment securities balances and declines in loan and investment securities yields.
Loans
Average loan balances increased for the three month period ended March 31, 2015, as compared to the same period in 2014, due primarily to the acquisition of VCB loans totaling $101.5 million, net of credit and liquidity marks, the purchase of $27.2 million in performing one-to-four family residential mortgage loans in the first quarter of 2014, the opening of a new loan production office in Chesterfield County, Virginia in the second quarter of 2014 and the origination of a line of credit to fund loan originations through Southern Trust Mortgage, LLC (balance of $12.4 million as of March 31, 2015) in the second quarter of 2014. These additions to the Company's loan portfolio were partially offset by weak loan demand in the Company's markets as a result of the continuing challenging economic conditions, such that the Company's average loan balances increased $138.9 million for the three months ended March 31, 2015, as compared to average loan balances for the same period in 2014. In addition, due to the continuing low interest rate environment and competitive pressures, loans were originated during the first quarter of 2015 at much lower yields than seasoned loans in the Company's loan portfolio, which has contributed significantly to average yields on the loan portfolio declining 5 basis points for the three months ended March 31, 2015, as compared to the same period in 2014. Total average loans were 75.4% of total average interest-earning assets for the three months ended March 31, 2015, compared to 70.3% for the three months ended March 31, 2014.
Investment securities
Average investment securities balances declined 6.8% for the three month period ended March 31, 2015, as compared to the same period in 2014. This decline was the result of the Company moving towards its long term target of the investment securities portfolio comprising 20% of the Company's total assets, the lack of investment opportunities with acceptable risk-adjusted rates of return and liquidity needs to support our operations and strategic initiatives. The yields on investment securities decreased 16 basis points for the three months ended March 31, 2015, as compared to the same period in 2014, driven by lower interest rates over the comparable period and sales/calls of higher yielding municipal securities since the first quarter of 2014.
Interest-bearing deposits
Average total interest-bearing deposit balances increased for the three month period ended March 31, 2015, as compared to the same period in 2014, primarily due to the acquisition of VCB's interest-bearing deposit liabilities, which totaled $85.6 million.
Borrowings
Average total borrowings increased for the three month period ended March 31, 2015, as compared to the same period in 2014, primarily due to short-term FHLB advances assumed in the VCB acquisition ($8.7 million) and increased repurchase agreement balances related to a significant customer deposit relationship.
Noninterest Income
The following table depicts the components of noninterest income for the three months ended March 31, 2015 and 2014:
Three Months Ended March 31,
(dollars in thousands) 2015 2014 Change $ Change %
--------------------- ---- ---- -------- -------
Service charges and fees on deposit accounts $663 $822 $(159) -19.3%
Debit/credit card fees 363 309 54 17.5%
Gain on sale of available for sale securities, net 25 380 (355) -93.4%
Gain on sale of bank premises and equipment 3 5 (2) -40.0%
Other operating income 465 376 89 23.7%
---------------------- --- --- --- ----
Total noninterest income $1,519 $1,892 $(373) -19.7%
====== ====== ===== =====
Key changes in the components of noninterest income for the three months ended March 31, 2015, as compared to the same period in 2014, are discussed below:
-- Service charges and fees on deposit accounts declined due to decreases
in service charge and overdraft fees on checking accounts;
-- Debit/credit card fees increased primarily due to an increase in debit
card fees driven by the acquisition of VCB and a higher utilization rate
of debit cards by our customer base;
-- Gain on sale of available for sale securities, net decreased as the
Company recognized gains during the first quarter of 2014 primarily due
to the sale of a portion of its previously impaired agency preferred
securities (FNMA & FHLMC), and the Company did not generate comparable
gains during 2015; and
-- Other operating income increased primarily due to higher earnings from
the Bank's subsidiaries, its investment in Bankers Insurance, LLC and
bank owned life insurance policies, partially offset by higher losses
from the Bank's investments in Housing Equity Funds. Additionally,
other operating income includes earnings from the Bank's investments in
Southern Trust Mortgage, LLC (acquired 4.9% ownership on May 15, 2014)
and Bankers Title, LLC (acquired 6.0% ownership on October 1, 2014).
Noninterest Expense
The following table depicts the components of noninterest expense for the three months ended March 31, 2015 and 2014:
Three Months Ended March 31,
(dollars in thousands) 2015 2014 Change $ Change %
--------------------- ---- ---- -------- -------
Salaries and employee benefits $5,590 $4,586 $1,004 21.9%
Occupancy and equipment expenses 1,521 1,319 202 15.3%
FDIC expense 172 332 (160) -48.2%
Collection, repossession and other real estate owned 89 67 22 32.8%
Loss (gain) on sale of other real estate owned 32 (13) 45 346.2%
Impairment losses on other real estate owned 5 5 - 0.0%
Other operating expenses 2,558 1,882 676 35.9%
------------------------ ----- ----- --- ----
Total noninterest expenses $9,967 $8,178 $1,789 21.9%
====== ====== ====== ====
Key changes in the components of noninterest expense for the three months ended March 31, 2015, as compared to the same period in 2014, are discussed below:
-- Salaries and employee benefits increased due to annual merit salary
increases, increased restricted stock compensation expense, increased
bonuses, commissions and other incentive compensation, higher group term
insurance costs and valuation adjustments related to pension plan
liabilities, partially offset by an increase in deferred compensation on
loan originations and reduced expense related to paid time off accrual
adjustments. Additionally, the Bank incurred higher personnel costs
associated with increased staff levels and support positions associated
with the addition of three branches through the acquisition of VCB;
-- Occupancy and equipment expenses increased primarily due to depreciation
expense associated with certain acquired VCB assets and increased rent
and real estate tax expenses related to the acquired VCB branch
locations;
-- FDIC insurance expense decreased due to lower base assessment rates
resulting from the improvement in the Bank's overall composite rating in
connection with the termination of the MOU in March 2014, and
corresponding decreases in FDIC insurance assessment rates;
-- Collection, repossession and other real estate owned expenses increased
due to increases in carrying balances of and costs associated with other
real estate owned and classified assets;
-- Loss (gain) on the sale of other real estate owned increased primarily
due to the resolution and disposition of a distressed property that was
sold during the first quarter of 2015; and
-- Other operating expenses increased primarily due to elevated costs
associated with outsourcing of the Bank's core information technology
processing and increased marketing and advertising expenses. Marketing
and advertising expenses were higher due to the timing of campaigns and
costs associated with the acquisition of VCB. Other operating expenses
also increased due to higher franchise taxes, postage, dues and
subscriptions, consultant fees, legal expenses and core deposit
intangible amortization expense.
Balance Sheet and Asset Quality
Balance Sheet
Key balance sheet components as of March 31, 2015 and December 31, 2014 are as follows:
March 31, December 31,
(dollars in thousands) 2015 2014 Change $ Change %
--------------------- ---- ---- -------- -------
Total assets $1,194,158 $1,181,972 $12,186 1.0%
Securities available for sale, at fair value 225,797 214,011 11,786 5.5%
Securities held to maturity, at carrying value 31,495 32,163 (668) -2.1%
Total loans 816,207 820,569 (4,362) -0.5%
Total deposits 958,157 939,254 18,903 2.0%
Total borrowings 97,722 102,013 (4,291) -4.2%
Total shareholders' equity 131,958 134,274 (2,316) -1.7%
Key balance sheet components as of March 31, 2015 and 2014 are as follows:
March 31, March 31,
(dollars in thousands) 2015 2014 Change $ Change %
--------------------- ---- ---- -------- -------
Total assets $1,194,158 $1,057,471 $136,687 12.9%
Securities available for sale, at fair value 225,797 235,057 (9,260) -3.9%
Securities held to maturity, at carrying value 31,495 34,780 (3,285) -9.4%
Total loans 816,207 682,952 133,255 19.5%
Total deposits 958,157 826,934 131,223 15.9%
Total borrowings 97,722 88,610 9,112 10.3%
Total shareholders' equity 131,958 137,374 (5,416) -3.9%
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 potential future loan losses.
The following table depicts the net charge-off activity for the three months ended March 31, 2015 and 2014.
Three months ended
March 31,
(dollars in thousands) 2015 2014
--------------------- ---- ----
Net charge-offs $363 $111
Net charge-offs to average
loans 0.18% 0.07%
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) 2015 2014 2014
--------------------- ---- ---- ----
Allowance for loan losses $12,658 $13,021 $14,906
Allowance for loan losses to period end loans 1.55% 1.59% 2.18%
Allowance for loan losses to nonaccrual loans 159.41% 196.63% 180.42%
Allowance for loan losses to nonperforming loans 154.75% 195.07% 180.42%
The following table depicts the level of nonperforming assets as of the dates presented.
March 31, December 31, March 31,
(dollars in thousands) 2015 2014 2014
--------------------- ---- ---- ----
Nonaccrual loans $7,940 $6,622 $8,262
Loans past due 90 days and accruing interest 240 53 -
--- --- ---
Total nonperforming loans $8,180 $6,675 $8,262
Other real estate owned ("OREO") 1,755 1,838 557
----- ----- ---
Total nonperforming assets $9,935 $8,513 $8,819
====== ====== ======
Nonperforming assets to total loans and OREO 1.21% 1.04% 1.29%
The following tables present the change in the balances of OREO and nonaccrual loans for the three months ended March 31, 2015.
OREO: Nonaccrual
Loans:
----- -----------
(dollars in (dollars in
thousands) thousands)
Balance at $1,838 Balance at
December 31, December 31,
2014 2014 $6,622
Transfers from 384 Loans
loans returned to
accrual
status (676)
Capitalized costs 1 Net principal
curtailments (884)
Sales proceeds (431) Charge-
offs (131)
Impairment losses (5) Loan
on valuation collateral
adjustments moved to
OREO (384)
Loss on Loans placed
disposition on
nonaccrual
during
(32) period 3,393
--- -----
Balance at March $1,755 Balance at
31, 2015 March 31,
2015 $7,940
====== ======
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) 2015 2014 2014
--------------------- ---- ---- ----
Performing TDRs $14,881 $15,223 $17,440
Nonperforming TDRs* 3,685 3,438 2,560
----- ----- -----
Total TDRs $18,566 $18,661 $20,000
======= ======= =======
* 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, 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 Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings 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 or disposition of portions of the Company's asset portfolio, future changes to the Bank's branch network, the payment of dividends, and the ability to realize deferred tax assets; (iii) statements of future financial performance and economic conditions; (iv) statements regarding the adequacy of the allowance for loan losses; (v) statements regarding the effect of future sales of investment securities or foreclosed properties; (vi) statements regarding the Company's liquidity; (vii) statements of management's expectations regarding future trends in interest rates, real estate values, and economic conditions generally and in the Company's markets; (viii) statements regarding future asset quality, including expected levels of charge-offs; (ix) statements regarding potential changes to laws, regulations or administrative guidance; (x) statements regarding strategic initiatives of the Company or the Bank and the results of these initiatives, including the Company's integration of VCB and transactions to redeem or refinance the Company's Series A Preferred Stock; and (xi) 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 the Company's integration of VCB and
other factors that could impact the business of the combined
organization, 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, or 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, the implementation of the Basel III capital
framework and for calculating risk-weighted assets, and compliance with
laws and regulations to which the Company is subject;
-- adverse reactions in financial markets related to the budget deficit of
the United States government;
-- 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;
-- changes in the Company's competitive position, competitive actions by
other financial institutions and the competitive nature of the financial
services industry and the Company's ability to compete effectively
against other financial institutions in its banking markets;
-- 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;
-- 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, 2014 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 2015 2014
-------------------- ---- ----
Interest and dividend income $11,765 $10,376
Interest expense 1,191 1,115
----- -----
Net interest income 10,574 9,261
Provision for loan losses - 250
--- ---
Net interest income after
provision for loan losses 10,574 9,011
Service charges and fees on
deposit accounts 663 822
Other operating income 465 376
Debit/credit card fees 363 309
Gain on sale of available for
sale securities, net 25 380
Gain on sale of bank premises
and equipment 3 5
Noninterest income 1,519 1,892
----- -----
Salaries and employee benefits 5,590 4,586
Occupancy and equipment
expenses 1,521 1,319
FDIC expense 172 332
Collection, repossession and
other real estate owned 89 67
Loss (gain) on sale of other
real estate owned 32 (13)
Impairment losses on other
real estate owned 5 5
Other operating expenses 2,558 1,882
----- -----
Noninterest expenses 9,967 8,178
----- -----
Income before income taxes 2,126 2,725
Income tax expense 517 729
--- ---
Net income $1,609 $1,996
Less: Effective dividend on
preferred stock 220 518
--- ---
Net income available to common
shareholders $1,389 $1,478
====== ======
Income per common share: basic $0.11 $0.12
diluted $0.08 $0.09
Selected Ratios
---------------
Return on average assets 0.48% 0.57%
Return on average common
shareholders' equity 5.63% 6.64%
Net interest margin (tax
equivalent basis) 4.00% 3.93%
Period End Balances
-------------------
Investment securities $264,707 $276,898
Loans, net of unearned income 816,207 682,952
Total assets 1,194,158 1,057,471
Total deposits 958,157 826,934
Total borrowings 97,722 88,610
Total shareholders' equity 131,958 137,374
Book value per common share 7.87 7.79
Average Balances
----------------
Investment securities $259,672 $278,594
Loans, net of unearned income 817,046 678,110
Total earning assets 1,083,961 964,339
Total assets 1,184,746 1,049,048
Total deposits 942,170 821,825
Total borrowings 104,480 86,513
Total shareholders' equity 131,342 135,856
Asset Quality at Period End
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Allowance for loan losses $12,658 $14,906
Nonperforming assets 9,935 8,819
Net charge-offs 363 111
Net charge-offs to average
loans 0.18% 0.07%
Allowance for loan losses to
period end loans 1.55% 2.18%
Allowance for loan losses to
nonaccrual loans 159.41% 180.42%
Allowance for loan losses to
nonperforming loans 154.75% 180.42%
Nonperforming assets to total
assets 0.83% 0.83%
Nonperforming assets to total
loans and other real estate
owned 1.21% 1.29%
Other Information
-----------------
Number of shares outstanding -
period end 13,023,550 11,862,367
Average shares outstanding -
basic 12,985,429 11,862,367
Average shares outstanding -
diluted 18,225,621 17,102,559
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-2015-results-300071800.html
SOURCE Eastern Virginia Bankshares, Inc.
