MERCHANTS BANCSHARES,INC. SOUTH BURLINGTON, Vt., Jan. 26, 2017 /PRNewswire/ -- Merchants Bancshares, Inc. (NASDAQ: MBVT) (the "Company"), the parent company of Merchants Bank, today announced net income of $3.1 million and $0.45 per diluted share for the fourth quarter of 2016 compared to net income of $3.9 million or $0.57 per diluted share in the third quarter of 2016 and $2.3 million in net income or $0.36 per diluted share in the fourth quarter of 2015. Excluding acquisition, merger, severance and retirement costs, net of tax, the Company's adjusted net income was $5.1 million or $0.73 per diluted share for the fourth quarter of 2016. This compares to adjusted net income of $4.3 million or $0.62 per diluted share on a linked quarter basis and adjusted net income of $3.9 million or $0.61 per diluted share in the fourth quarter of 2015.
For the year ended December 31, 2016, net income was $14.9 million, or $2.16 per diluted share, compared to net income of $12.6 million, or $1.98 per diluted share for the year ended December 31, 2015. Excluding acquisition, merger, severance and retirement costs, net of tax, the Company's adjusted net income was $17.3 million or $2.52 per diluted share for the year ended December 31, 2016. This compares to adjusted net income of $14.9 million or $2.34 per diluted share for the year ended December 31, 2015.
For the year ended December 31, 2016, the return on average assets was 0.76% compared to 0.71% in 2015. For the year ended December 31, 2016, the return on average equity was 9.61% compared to 9.69% for the year ended December 31, 2015.
The Company's Board of Directors approved a dividend of $0.28 per share, payable February 23, 2017, to stockholders of record as of February 9, 2017. Based on the closing price of $54.20 per share on December 30, 2016 and the annual dividend payout of $1.12 per share, the dividend represents an annualized yield of 2.07%.
Due to the pending transaction with Community Bank System, Inc., Merchants Bancshares will not have an earnings call for its fourth quarter results.
2016 Financial Highlights
Balance Sheet:
-- Total assets were $2.07 billion as of December 31, 2016, an increase of
$72.0 million over the linked quarter and $45.4 million increase from
December 31, 2015. The increase in total assets over the linked quarter
was mainly driven by loan growth and new investment purchases. The
increase in total assets from December 31, 2015 was due primarily to an
increase in loan balances offset by a decrease in interest earning cash
and other short-term investments.
-- Gross loans as of December 31, 2016 totaled $1.51 billion, an increase
of $36.9 million over the linked quarter and a $99.9 million increase
from December 31, 2015. The increase in gross loans over the linked
quarter consisted primarily of growth in commercial real estate loans.
Total commercial loans, defined as commercial, commercial real estate
and construction, increased $38.2 million over the linked quarter. The
increase in gross loans from December 31, 2015 was primarily due to an
increase of $116.1 million in total commercial loans partially offset by
a decline in residential real estate loans.
-- Total deposits were $1.53 billion as of December 31, 2016, an increase
of $23.6 million over the linked quarter and a decrease of $24.0 million
from December 31, 2015. The increase in total deposits over the linked
quarter was attributable to growth in money market and demand deposit
balances partially offset by planned decrease in higher cost acquired
time deposits at the NUVO division. The decrease in total deposits from
December 31, 2015 was due to the planned decrease in higher cost time
deposits at the NUVO division partially offset by growth in money market
and demand deposit balances.
-- Total stockholders' equity as of December 31, 2016 was $156.8 million.
Tangible book value per share increased by $1.20 to $21.58 per share at
December 31, 2016 from $20.38 per share at December 31, 2015. The
increase in tangible book value since December 31, 2015 was due
primarily to $2.16 per share of net income, offset by dividends paid of
$1.12 per share. Book value per share was $22.77 per share at December
31, 2016 as compared to $21.59 per share at December 31, 2015.
Income Statement:
-- Taxable equivalent net interest income was $14.4 million for the fourth
quarter of 2016, which was consistent with the linked quarter and an
increase of $1.1 million over the same period in 2015. GAAP net interest
income in the fourth quarter of 2016 was $13.9 million, compared to
$13.8 million in the linked quarter and $12.7 million in the same period
of 2015. The increase in GAAP net interest income over the same period
in 2015 was due to the increase in gross loans.
-- Taxable equivalent net interest margin for the fourth quarter of 2016
was 2.98%, a decrease of 5 basis points over the linked quarter and an
increase of 9 basis points from the same period in 2015. The linked
quarter decrease reflected lower asset yields. The increase from the
same period in 2015 was driven by higher yields on interest-earning
assets.
-- Provision for credit losses was $200 thousand for the fourth quarter of
2016, compared to $500 thousand in the linked quarter and $0 in the same
period in 2015. The decrease in the provision for credit losses over the
linked quarter reflected strong loan quality offset by new loan growth.
The increase in the provision for credit losses over the same period in
2015 was primarily due to new loan growth.
-- Noninterest income for the fourth quarter of 2016 was $3.4 million, an
increase of $281 thousand over the linked quarter and an increase of
$325 thousand from the same period in 2015. These increases were
primarily due to an increase in trust fees.
-- Noninterest expense was $13.1 million for the fourth quarter of 2016,
compared to $11.4 million in the linked quarter and $12.9 million in the
same period in 2015. The increases in noninterest expense over the
linked quarter and the same period in 2015 was due primarily to expenses
incurred in connection with the pending merger with Community Bank
System, Inc. Adjusted noninterest expense (excluding acquisition,
merger, severance and retirement costs) was $10.6 million for the fourth
quarter of 2016, compared to $10.9 million in the linked quarter and
$10.9 million in the same period in 2015.
-- The effective tax rate for the year ended December 31, 2016 was 24%
compared to 20% for the year ended December 31, 2015. The increase was
due primarily to higher pre-tax income and relatively consistent levels
of tax exempt income which increased the taxable portion of pre-tax
income and related tax provision.
Credit Quality and Capital Ratios:
-- The allowance for loan losses ("ALL") as of December 31, 2016 was $12.7
million, or 0.84% of gross loans, compared to $12.5 million, or 0.85% of
gross loans as of September 30, 2016 and $12.0 million, or 0.85% of
gross loans, as of December 31, 2015.
-- Nonperforming loans were $3.2 million, or 0.21% of gross loans, at
December 31, 2016, compared to $4.2 million, or 0.29% of gross loans at
September 30, 2016 and $4.0 million, or 0.28% of gross loans at December
31, 2015. ALL as a percentage of nonperforming loans was 398% at
December 31, 2016 compared to 296% at September 30, 2016 and 302% at
December 31, 2015. Accruing loans 31 to 90 days past due as a percent of
total loans were 0.03% at December 31, 2016 compared to 0.06% at
September 30, 2016 and 0.05% at December 31, 2015. Merchants Bank
continues to experience excellent credit quality.
-- Estimated regulatory capital ratios at December 31, 2016:
-- Common Equity Tier 1 - 12.43%
-- Tier 1 Leverage - 8.71%
-- Total Risk-Based Capital - 15.15%
-- Tangible Capital - 7.22%
Proposed Transaction with Community Bank System, Inc.
On October 22, 2016, Merchants Bancshares and Community Bank System, Inc. (NYSE: CBU) entered into a definitive agreement under which Community Bank System, Inc. will acquire Merchants Bancshares in a cash and stock transaction. The combination will provide natural market extension for both companies, joining two high-quality, low-risk franchises with long histories of service to their customers and communities.
Under the terms of the agreement, shareholders of Merchants Bancshares will have the option to receive, at their election, consideration per share equal to (i) 0.963 shares of Community Bank System, Inc. common stock, (ii) $40.00 in cash or (iii) the combination of 0.6741 shares of Community Bank System, Inc. common stock and $12.00 in cash, subject to an overall proration to 70% stock and 30% cash. The merger is expected to close in the second quarter of 2017 and is subject to customary closing conditions, including approval by the shareholders of Merchants Bancshares and required regulatory approvals. Additional information about the transaction can be found in the joint press release issued on October 24, 2016, which is available on the Investor Relations section of the Company's website at www.mbvt.com.
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures, such as core net income, tangible capital ratio and fully taxable equivalent net interest income. Net interest income is presented on a fully taxable equivalent basis, specifically included in interest income was tax-exempt interest income from certain tax-exempt loans. An amount equal to the tax benefit derived from this tax exempt income is added back to the interest income total, to produce net interest income on a fully taxable equivalent basis. Merchants Bancshares believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Additionally, capital ratios as presented are preliminary and will not be finalized until the Company completes and files its regulatory reporting.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press 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, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements, which are based on certain assumptions and describe Merchants Bancshares' future plans, strategies and expectations, can generally be identified by the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. Actual results could differ materially from those projected in the forward-looking statements as a result of, among others; costs or difficulties related to the integration of NUVO; weakness in general, national, regional or local economic conditions, the performance of the investment portfolio, quality of credits or the overall demand for services; changes in loan default and charge-off rates which could affect the allowance for credit losses; declines in the equity and financial markets; reductions in deposit levels which could necessitate increased and/or higher cost borrowing to fund loans and investments; declines in mortgage loan refinancing, equity loan and line of credit activity which could reduce net interest and non-interest income; changes in the domestic interest rate environment and inflation; changes in the carrying value of investment securities and other assets; misalignment of interest-bearing assets and liabilities; increases in loan repayment rates affecting interest income and the value of mortgage servicing rights; changing business, banking, or regulatory conditions or policies, or new legislation affecting the financial services industry that could lead to changes in the competitive balance among financial institutions, restrictions on bank activities, changes in costs (including deposit insurance premiums), increased regulatory scrutiny, declines in consumer confidence in depository institutions, or changes in the secondary market for bank loan and other products; changes in accounting rules, federal and state laws, IRS regulations, and other regulations and policies governing financial holding companies and their subsidiaries which may impact Merchants Bancshares' ability to take appropriate action to protect financial interests in certain loan situations; the ability of the Company and Community Bank System, Inc. ("CBU") to satisfy the conditions set forth in the Merger Agreement (as defined and discussed below), disruptions to the Company's business during the pendency of the Merger (as defined and discussed below; and the proposed merger with CBU.
You should not place undue reliance on forward-looking statements, and are cautioned that forward-looking statements are inherently uncertain. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, which are included in more detail in the Annual Report on Form 10-K, as updated by Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). Merchants Bancshares' does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger with CBU, CBU has filed with the SEC a registration statement on Form S-4 that includes a proxy statement of the Company and a prospectus of CBU, as well as other relevant documents concerning the proposed merger. Investors and stockholders are urged to read the registration statement and the proxy statement/prospectus and the other relevant materials filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information. A free copy of the proxy statement/prospectus, as well as other filings containing information about the Company and CBU, may be obtained at the SEC's Internet site (http://www.sec.gov). You will also be able to obtain these documents, when available, free of charge from the Company at http://www.mbvt.com/ under the heading "Investor Relations" and then "SEC Filings" or from CBU by accessing its website at www.communitybankna.com under the heading of "Investor Relations" and then "SEC Filings & Annual Report." Copies of the proxy statement/prospectus can also be obtained, free of charge and when available, by directing a request to Merchants Bancshares, Inc., P.O. Box 1009, Burlington, Vermont 05402, Attention: Investor Relations, Telephone: (900) 322-5222 or to Community Bank System, Inc., 5790 Widewaters Parkway, DeWitt, New York 13214, Attention: Investor Relations, Telephone: (315) 445-2282.
PARTICIPANTS IN SOLICITATION
The Company and CBU and certain of their respective directors and executive officers may be deemed to participate in the solicitation of proxies from the stockholders of the Company in connection with the proposed merger. Information about the directors and executive officers of the Company and their ownership of the Company common stock is set forth in the proxy statement for its 2016 annual meeting of stockholders, as filed with the SEC on Schedule 14A on April 15, 2016 and the definitive additional proxy soliciting materials for the Company's 2016 annual meeting of stockholders, as filed with the SEC on May 3, 2016. Information about the directors and executive officers of CBU and their ownership of CBU common stock is set forth in the proxy statement for its 2016 annual meeting of stockholders, as filed with the SEC on Schedule 14A on April 1, 2016. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed merger. Free copies of this document when available may be obtained as described in the preceding paragraph.
Merchants Bancshares, Inc.
Financial Highlights (unaudited)
(Dollars in thousands except share and per share data)
December 31, September 30, December 31, September 30,
2016 2016 2015 2015
---- ---- ---- ----
Balance Sheets - Period End
Cash and due from banks $26,116 $31,166 $30,605 $21,541
Interest earning cash and other short-term investments 56,727 47,551 119,578 89,918
Investments-available for sale, taxable 333,998 298,973 283,454 282,083
Investments-held to maturity, taxable 85,694 90,672 119,674 123,929
Loans 1,514,209 1,477,285 1,414,280 1,257,932
Allowance for loan losses ("ALL") 12,659 12,540 12,040 12,210
Net loans 1,501,550 1,464,745 1,402,240 1,245,722
Federal Home Loan Bank ("FHLB") stock 5,086 4,844 3,797 4,378
Bank premises and equipment, net 13,078 13,624 15,030 15,019
Investment in real estate limited partnerships 6,356 5,352 5,687 5,982
Bank owned life insurance 10,758 10,709 10,551 10,492
Core deposit intangible 1,156 1,207 1,360 -
Goodwill 7,011 7,011 6,967 -
Other assets 19,144 18,801 22,294 19,277
Total assets 2,066,674 1,994,655 2,021,237 1,818,341
Non-interest bearing deposits 640,922 632,847 631,244 575,492
Savings, interest bearing checking and money market accounts 687,340 661,962 665,623 620,224
Time deposits 199,208 209,031 254,572 191,757
Total deposits 1,527,470 1,503,840 1,551,439 1,387,473
Short-term borrowings 40,000 22,000 - -
Securities sold under agreement to repurchase, short-term 312,118 276,083 286,639 267,794
Other long-term debt 3,651 3,673 5,238 2,258
Junior subordinated debentures issued to unconsolidated subsidiary trust 20,619 20,619 20,619 20,619
Other liabilities 6,010 10,153 9,248 7,551
Total liabilities 1,909,868 1,836,368 1,873,183 1,685,695
Stockholders' equity 156,806 158,287 148,054 132,646
Balance Sheets - Quarter-to-Date Averages
Cash and due from banks $30,138 $30,221 $28,380 $26,049
Interest earning cash and other short-term investments 48,894 40,879 106,681 52,795
Investments-available for sale, taxable 296,292 274,990 279,416 264,633
Investments-held to maturity, taxable 88,391 102,868 122,924 126,549
Loans 1,488,960 1,451,612 1,306,613 1,245,861
Allowance for loan losses 12,600 12,468 12,269 12,223
Net loans 1,476,360 1,439,144 1,294,344 1,233,638
FHLB stock 5,105 7,786 3,571 4,378
Bank owned life insurance 10,728 10,680 10,515 10,456
Other assets 49,228 51,214 45,312 41,245
Total assets 2,005,136 1,957,782 1,891,143 1,759,743
Non-interest bearing deposits 635,512 620,142 610,499 586,773
Savings, interest bearing checking and money market accounts 671,126 662,250 632,481 613,337
Time deposits 203,969 213,853 210,527 195,044
Total deposits 1,510,607 1,496,245 1,453,507 1,395,154
Short-term borrowings 13,380 63,130 - 9,649
Securities sold under agreement to repurchase, short-term 288,343 206,181 268,614 195,410
Other long-term debt 3,659 3,680 3,255 2,265
Junior subordinated debentures issued to unconsolidated subsidiary trust 20,619 20,619 20,619 20,619
Other liabilities 10,219 10,131 7,972 7,388
Total liabilities 1,846,827 1,799,986 1,753,967 1,630,485
Stockholders' equity 158,309 157,796 137,176 129,258
Earning assets 1,927,642 1,878,135 1,819,205 1,694,216
Interest bearing liabilities 1,201,096 1,169,713 1,135,496 1,036,324
Merchants Bancshares, Inc.
Financial Highlights (unaudited)
(Dollars in thousands except share and per share data)
For the Twelve Months Ended
---------------------------
December 31, December 31,
2016 2015
---- ----
Balance Sheets - Year-to-
Date Averages
Cash and due from banks $29,529 $25,901
Interest earning cash and other
short-term investments 50,242 81,961
Investments-available for
sale, taxable 284,091 252,215
Investments-held to maturity,
taxable 105,459 129,416
Loans 1,446,443 1,240,386
Allowance for loan losses 12,349 12,116
Net loans 1,434,094 1,228,270
FHLB stock 5,746 4,175
Bank owned life insurance 10,652 10,426
Other assets 51,080 43,132
Total assets 1,970,893 1,775,496
Non-interest bearing deposits 620,456 588,698
Savings, interest bearing
checking and money market
accounts 667,613 590,988
Time deposits 220,044 203,851
Total deposits 1,508,113 1,383,537
Short-term borrowings 25,425 3,953
Securities sold under agreement
to repurchase, short-term 247,610 226,913
Other long-term debt 4,090 2,529
Junior subordinated debentures
issued to unconsolidated
subsidiary trust 20,619 20,619
Other liabilities 10,086 7,725
Total liabilities 1,815,943 1,645,276
Stockholders' equity 154,950 130,220
Earning assets 1,891,981 1,708,153
Interest bearing liabilities 1,185,401 1,048,853
Ratios and Supplemental Information:
December 31, September 30, December 31, September 30,
2016 2016 2015 2015
---- ---- ---- ----
Ratios and Supplemental Information - Period End
Book value per share $22.77 $22.99 $21.59 $20.93
Tangible book value per share $21.58 $21.80 $20.38 $20.93
Common Equity Tier 1 12.43% 12.78% 12.86% 13.83%
Tier I leverage ratio 8.71% 8.84% 8.77% 8.93%
Total risk-based capital ratio 15.15% 15.59% 15.77% 17.10%
Tangible capital ratio (1) 7.22% 7.55% 6.94% 7.29%
Period end common shares outstanding 6,887,856 6,883,644 6,855,294 6,338,158
Credit Quality - Period End
Nonperforming loans ("NPLs") (2) $3,182 $4,236 $3,985 $764
Nonperforming assets ("NPAs") (2) $3,259 $4,236 $3,997 $764
NPLs as a percent of total loans (2) 0.21% 0.29% 0.28% 0.06%
NPAs as a percent of total assets (2) 0.16% 0.21% 0.20% 0.04%
ALL as a percent of NPLs (2) 398% 296% 302% 1,598%
ALL as a percent of total loans 0.84% 0.85% 0.85% 0.97%
Accruing loans 31 to 90 days past due as a percent of total loans 0.03% 0.06% 0.05% 0.01%
(1) The tangible capital ratio is calculated by dividing tangible equity by tangible assets. See Tangible Capital Ratio reconciliation below.
(2) Non-performing loans have been updated to exclude accruing troubled debt-restructure loans. Prior periods have been reclassified to be consistent with the current period presentation.
Merchants Bancshares, Inc.
Financial Highlights (unaudited)
(Dollars in thousands except share and per share data)
Loan Portfolios:
December 31, September 30, December 31, September 30,
2016 2016 2015 2015
---- ---- ---- ----
Period End
Commercial, financial and agricultural $257,078 $268,530 $237,451 $207,067
Municipal loans 114,509 112,007 105,421 108,423
Real estate loans - residential 447,527 450,584 468,443 448,632
Real estate loans - commercial 636,755 584,392 558,004 450,673
Real estate loans - construction 52,533 55,210 34,802 40,748
Installment loans 5,790 6,547 10,115 2,370
All other loans 17 15 44 19
--- --- --- ---
Total Loans $1,514,209 $1,477,285 $1,414,280 $1,257,932
---------- ---------- ---------- ----------
Tangible Capital Ratio (Non-GAAP):
December 31, September 30, December 31, September 30,
Period End 2016 2016 2015 2015
---- ---- ---- ----
Total assets $2,066,674 $1,994,655 $2,021,237 $1,818,341
Core deposit intangible 1,156 1,207 1,360 -
Goodwill 7,011 7,011 6,967 -
----- ----- ----- ---
Tangible assets 2,058,507 1,986,437 2,012,910 1,818,341
Total stockholders' equity 156,806 158,287 148,054 132,646
Core deposit intangible 1,156 1,207 1,360 -
Goodwill 7,011 7,011 6,967 -
----- ----- ----- ---
Tangible stockholders' equity 148,639 150,069 139,727 132,646
Tangible capital ratio 7.22% 7.55% 6.94% 7.29%
Merchants Bancshares, Inc.
Financial Highlights (unaudited)
(Dollars in thousands except share and per share data)
For the Three Months Ended For the Twelve Months Ended
-------------------------- ---------------------------
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Operating Results
Interest income
Interest and fees on loans $13,170 $13,058 $11,608 $51,929 $44,087
Interest and dividends on investments 1,752 1,818 1,995 7,555 7,779
Interest on interest earning deposits with banks and other short-term investments 63 54 94 256 250
Total interest and dividend income 14,985 14,930 13,697 59,740 52,116
Interest expense
Savings, interest bearing checking and money market accounts 442 413 358 1,719 1,433
Time deposits 295 321 337 1,347 1,312
Total deposits 737 734 695 3,066 2,745
Short-term borrowings 16 79 - 126 13
Securities sold under agreement to repurchase, short-term 135 107 108 454 497
Long-term debt 217 213 202 854 797
Total interest expense 1,105 1,133 1,005 4,500 4,052
Net interest income 13,880 13,797 12,692 55,240 48,064
Provision for credit losses 200 500 - 1,105 250
Net interest income after provision for credit losses 13,680 13,297 12,692 54,135 47,814
Noninterest income
Trust division income 1,164 843 858 3,709 3,525
Net, debit card income 802 765 779 3,028 3,080
Overdraft income 638 667 678 2,613 2,004
Service charges on deposits 433 427 396 1,699 1,504
Other noninterest income 375 429 376 1,639 1,847
Total noninterest income 3,412 3,131 3,087 12,688 11,960
Noninterest expense
Compensation and benefits 5,427 5,785 6,133 22,976 21,879
Occupancy expense 1,128 1,050 1,023 4,342 4,251
Equipment expense 635 676 747 2,734 2,971
Telephone expense 159 187 179 736 789
Legal and professional fees 632 651 596 2,607 1,991
Mobile & internet banking 333 345 402 1,380 1,597
Core / Item processing 496 425 476 1,897 1,765
Marketing expenses 206 196 125 801 561
State franchise taxes 390 399 408 1,585 1,503
FDIC insurance 133 248 233 916 886
Community Bank System, Inc. merger costs 2,543 476 - 3,019 -
NUVO Bank & Trust Company acquisition costs - - 1,511 61 1,875
Core deposit intangible amortization 51 51 17 204 17
Other noninterest expense 946 931 1,041 3,993 3,886
Total noninterest expense 13,079 11,420 12,891 47,251 43,971
Income before provision for income taxes 4,013 5,008 2,888 19,572 15,803
Provision for income taxes 897 1,097 579 4,689 3,185
Net income 3,116 3,911 2,309 14,883 12,618
Amounts reported for prior periods are reclassified, where necessary, to be consistent with the current period presentation.
Merchants Bancshares, Inc.
Financial Highlights (unaudited)
(Dollars in thousands except share and per share data)
For the Three Months Ended For the Twelve Months Ended
-------------------------- ---------------------------
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Ratios and Supplemental Information
Weighted average common shares outstanding 6,886,127 6,877,536 6,493,180 6,871,372 6,373,122
Weighted average diluted shares outstanding 6,923,006 6,899,116 6,498,071 6,896,474 6,386,128
Basic earnings per common share $0.45 $0.57 $0.36 $2.17 $1.98
Diluted earnings per common share $0.45 $0.57 $0.36 $2.16 $1.98
Return on average assets 0.62% 0.80% 0.49% 0.76% 0.71%
Return on average stockholders' equity 7.83% 9.91% 6.73% 9.61% 9.69%
Average yield on loans 3.67% 3.74% 3.69% 3.74% 3.72%
Average yield on investments 1.80% 1.89% 1.97% 1.91% 2.02%
Average yield of earning assets 3.21% 3.29% 3.12% 3.27% 3.17%
Average cost of interest bearing deposits 0.33% 0.33% 0.33% 0.35% 0.35%
Average cost of borrowed funds 0.45% 0.54% 0.42% 0.48% 0.51%
Average cost of interest bearing liabilities 0.37% 0.39% 0.35% 0.38% 0.39%
Net interest rate spread 2.84% 2.90% 2.77% 2.89% 2.78%
Net interest margin 2.98% 3.03% 2.89% 3.04% 2.94%
Net interest income on a fully taxable equivalent basis $14,358 $14,386 $13,247 $57,463 $50,153
Net (charge-offs) recoveries to average loans (0.02)% (0.06)% 0.00% (0.03)% (0.01)%
Net (charge-offs) recoveries $(66) $(226) $(43) $(381) $(109)
Efficiency ratio (1) 57.13% 59.80% 63.70% 60.20% 64.02%
(1) The efficiency ratio excludes amortization of intangibles, OREO expenses, gain/loss on sales of securities, state franchise taxes and any significant nonrecurring items.
Adjusted Net Income (Non-GAAP):
For the Three Months Ended For the Twelve Months Ended
-------------------------- ---------------------------
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Adjusted Net Income
Community Bank System, Inc. merger costs $2,543 $476 $ - $3,019 $ -
NUVO Bank & Trust Company acquisition costs - - 1,511 61 1,875
Severance and retirement costs (24) 9 528 162 1,007
Tax effect 563 106 408 777 576
--- --- --- --- ---
Adjustments, net of tax $1,956 $379 $1,631 $2,465 $2,306
GAAP net income as reported 3,116 3,911 2,309 14,883 12,618
----- ----- ----- ------ ------
Adjusted net income $5,072 $4,290 $3,940 $17,348 $14,924
Weighted average common shares outstanding 6,886 6,878 6,493 6,871 6,373
Weighted average diluted shares outstanding 6,923 6,899 6,498 6,896 6,386
Adjusted basic earnings per common share $0.74 $0.62 $0.61 $2.52 $2.34
Adjusted diluted earnings per common share $0.73 $0.62 $0.61 $2.52 $2.34
Contact: Jamie Oberle, Merchants Bank, at (802) 865-1603
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/merchants-bancshares-inc-reports-fourth-quarter-and-year-end-2016-results-declares-dividend-300397626.html
SOURCE Merchants Bancshares, Inc.
