09.05.2017 20:29:00

First Quarter 2017 Earnings

CAMBRIDGE, Md., May 9, 2017 /PRNewswire/ -- Delmarva Bancshares, Inc. (the "Company" or "Delmarva"), parent company for 1880 Bank, today reported net income of $1.6 million or $0.27 per share for the quarter ended March 31, 2017, compared to $827 thousand or $0.14 per share for the quarter ended December 31, 2016 and net income of $863 thousand or $0.15 per share for the first quarter of 2016.  First quarter 2017 net income was impacted by the recapture of $991 thousand, $0.17 per share, in deferred tax assets (DTAs), representing an increase when compared to $333 thousand in DTA recapture during fourth quarter 2016. 

Delmarva's total assets were $326 million at March 31, 2017, compared to $325 million and $314 million at December 31, 2016 and March 31, 2016, respectively.  Total loans increased by $13 million or 5.6% to $241 million from March 2016.  Total deposits were $273 million at March 31, 2017, compared to $273 million at December 31, 2016 and $268 million at March 31, 2016.  Non-interest bearing deposits represented 30% of total deposits at March 31, 2017.  As of March 31, 2017, non-performing assets were 1.86% of total assets compared to 2.06% at December 31, 2016 and 2.69% at March 31, 2016.  Non-performing assets decreased by $2.4 million or 28% year over year.

During the first quarter 2017, management determined that continued improvement in the Company's financial condition and performance allowed for the recapture of additional reserves on the DTAs. Factors contributing to management's conclusion included 13 consecutive quarters of positive core earnings, a steady decline in non-performing assets, significant improvement in the bank's regulatory metrics such as capital levels and liquidity and management's belief that the Company will continue to realize positive earnings in the near term. The remaining valuation allowance on DTAs at March 31, 2017 was $3.4 million, primarily relating to net operating loss carryforwards (NOLs) that will not be available to the Company until periods beyond five years due to certain tax code limitations.

The additional realization of the DTAs and strong core earnings resulted in continued improvement in fully diluted tangible book value per share which increased to $6.35 at March 31, 2017 from $6.06 and $4.75 at December 31, 2016 and March 31, 2016, respectively. 

First Quarter Performance Highlights:

  • Net income increased by $732 thousand to $1.6 million compared to net income of $863 thousand in the first quarter of 2016.
  • Total loans increased by $13 million, or 5.6%, to $241 million compared to the first quarter of 2016.
  • Non-performing assets were 1.86% of total assets at March 31, 2017, compared to 2.06% and 2.69% of total assets at December 31, 2016 and March 31, 2016, respectively.
  • Total assets at March 31, 2017 were $326 million versus $325 million and $314 million at December 31, 2016 and March 31, 2016, respectively.
  • Cost of funds at the Bank was 0.21% for the quarter ended March 31, 2017 compared to 0.13% for the quarter ended March 31, 2016.
  • Net interest margin at the Bank was 4.06% and 4.04% for the quarters ended March 31, 2017 and 2016, respectively.
  • Return on average assets (ROA) was 2.04% and return on equity (ROE) was 16.62% for the three months ended March 31, 2017 versus 1.11% and 11.11%, respectively, for the three months ended March 31, 2016.
  • The efficiency ratio improved to 64.96% for the three months ended March 31, 2017, compared to 67.52% and 69.50% for the December 2016 and March 2016 quarters, respectively.
  • Fully diluted tangible book value per share was $6.35 at March 31, 2017 compared to $6.06 and $4.75 at December 31, 2016 and March 31, 2016, respectively.
  • Liquidity remained strong and capital ratios exceeded all regulatory guidelines for a "well-capitalized" financial institution.

We are pleased to report first quarter results with net income of $1.6 million and loan growth of $13 million.  Nonperforming assets to total assets decreased to the lowest level since 2010 to 1.86%.  Our team works diligently to manage expenses and the liability side of the balance sheet.  It requires considerable effort to build high quality loan and deposit relationships into long-term customers.  If you do it right, the effort pays off.  Delmarva's strategic objectives remain profitable and prudent growth with an eye on acquisition opportunities in Maryland and Delaware," said Kim C. Liddell, Delmarva's Chairman and President.

 

Delmarva Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
March 31, 2017









Current Year Versus Prior Year


Prior Quarter








 March 2017 


 March 2016 


 December 2016 

Assets












Cash and due from banks

$   3,911,347


$   3,544,657


$   4,531,309

Interest-bearing deposits in other banks

18,429,991


10,671,871


14,740,230

Federal funds sold

66,666


3,778


116,690

Total cash and cash equivalents

22,408,004


14,220,306


19,388,229







Investment securities available-for-sale, at fair value

34,319,969


48,433,623


36,068,361

Restricted stock, at cost

1,640,000


1,759,152


1,618,450

Total investment securities

35,959,969


50,192,775


37,686,811







Loans receivable, gross

241,167,855


228,429,429


241,412,915

Allowance for loan losses

(1,603,537)


(1,540,744)


(1,625,759)

Loans receivable, net of allowance for loan losses

239,564,318


226,888,685


239,787,156

Bank premises and equipment, net

5,361,044


5,717,142


5,443,228

Other real estate owned, net of valuation allowance 

467,037


969,821


819,037

Accrued interest receivable

546,513


627,636


670,135

Cash surrender value of life insurance

11,152,912


10,882,622


11,103,157

Goodwill

1,852,120


2,539,260


1,852,120

Core Deposit Intangible

833,841


1,211,044


921,562

Deferred tax asset

6,125,643


-


5,543,126

Other assets

1,467,143


799,388


1,579,577







Total Assets

$   325,738,544


$   314,048,679


$   324,794,138







Liabilities and Stockholders' Equity












Liabilities:






Deposits:






Non-interest-bearing

$   81,106,667


$   82,914,065


$   81,050,026

Interest-bearing

192,111,463


185,396,226


192,097,274

Total deposits

273,218,130


268,310,291


273,147,300







Accrued interest payable

77,118


528,163


626,257

Accrued benefit obligations

4,679,537


4,772,890


4,660,596

Noncumulative subordinated notes

4,100,000


4,100,000


4,100,000

Trust preferred 

2,478,270


2,439,666


2,468,546

Other liabilities

816,357


1,945,235


1,106,353

Total Liabilities

285,369,412


282,096,245


286,109,052







Commitments and Contingent Liabilities

-


-


-







Stockholders' Equity:






Preferred stock, $.01 par value per share - 






2,059,713 shares authorized,  issued and  outstanding 

20,597


20,597


20,597

Common stock, $.01 par value per share - 






10,000,000 shares authorized, 3,872,168 issued and outstanding

38,721


38,721


38,721

Additional paid-in capital

43,563,036


43,454,469


43,508,713

Retained earnings (deficit)

(3,161,216)


(11,742,015)


(4,741,775)

Accumulated other comprehensive income 

(92,006)


180,662


(141,170)

Total Stockholders' Equity

40,369,132


31,952,434


38,685,086







Total Liabilities and Stockholders' Equity

$   325,738,544


$   314,048,679


$   324,794,138

 

Delmarva Bancshares, Inc. and Subsidiary
Consolidated Statements of Operations
March 31, 2017








Three Months Ended



March 31, 2017



March 31, 2016

Interest and Dividend Income






Loans, including fees


$   2,883,590



$   2,758,701

Investment securities


154,981



214,653

Dividends on restricted stock


5,473



3,408

Interest on deposits in other banks


19,000



14,785

Interest on federal funds sold/due from banks


187



9

Total interest income


3,063,231



2,991,556







Interest Expense






Deposits


140,189



90,573

Junior subordinated debt


41,472



39,289

Senior subordinated debt


71,750



72,547

Borrowed funds


2



2

Total interest expense


253,413



202,411







Net interest income


2,809,818



2,789,145







Provision for Loan Losses 


-



-







Net interest income (loss) after provision 






for loan losses


2,809,818



2,789,145







Noninterest Income






Service charges on deposit accounts


177,116



163,328

Other fees and commissions


145,184



176,229

Net gains on sale of securities


-



1,817

Income on bank owned life insurance


49,754



17,649

Other income


22,081



23,975

Total noninterest income


394,135



382,998







Noninterest Expense






Salaries and employee benefits


966,375



996,589

Premises and equipment


274,099



322,720

    Data processing


346,029



255,843

OREO write-downs, net losses on sales and operating expenses


82,488



28,765

Professional fees


177,016



261,303

Director fees 


54,249



47,249

Core deposit amortization


87,722



105,266

FDIC assessments


24,514



68,175

Regulatory examination assessments


10,287



10,287

Other insurance expense


27,623



27,868

Other expense


195,079



184,605

Total noninterest expense


2,245,481



2,308,670







Net Income (loss) before income taxes


958,472



863,473







Provision for Income Taxes


(637,057)



-







Net Income (loss)


$   1,595,529



$   863,473







Net Income Per Common Share: Basic and Diluted


$            0.27



$         0.15







Average Common Shares Outstanding: Basic and Diluted


5,931,881



5,931,881

 

CONTACT: Kim C. Liddell, 443-225-4727

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/first-quarter-2017-earnings-300454529.html

SOURCE Delmarva Bancshares, Inc.

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