Delmarva Bancshares, Inc. Second Quarter 2017 Earnings

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July 24, 2017 3:44 PM EDT

CAMBRIDGE, Md., July 24, 2017 /PRNewswire/ -- Delmarva Bancshares, Inc. (the "Company" or "Delmarva"), parent company for 1880 Bank, today reported net income of $746 thousand or $0.13 per share for the quarter ended June 30, 2017, compared to $1.6 million or $0.27 per share for the quarter ended March 31, 2017 and net income of $4.9 million or $0.82 per share for the second quarter of 2016.  First quarter 2017 and second quarter 2016 net income included the recapture of $991 thousand ($0.17 per share) and $4.1 million ($0.69 per share) in deferred tax assets (DTAs), respectively. Additionally, the Company did not incur tax expense for the entire second quarter of 2016. Excluding the DTA recapture impact and assuming a comparable effective tax rate for the entire June 2016 quarter, net income would have been approximately $605 thousand or $0.10 per share for the March 2017 quarter and $659 thousand or $0.11 per share for June 2016 quarter.

Delmarva's total assets were $324 million at June 30, 2017, compared to $326 million and $305 million at March 31, 2017 and June 30, 2016, respectively.  Total loans increased by $13 million or 5.9% to $241 million from June 2016.  Total deposits were $270 million at June 30, 2017, compared to $273 million at March 31, 2017 and $255 million at June 30, 2016.  Non-interest bearing deposits represented 29% of total deposits at June 30, 2017.  As of June 30, 2017, non-performing assets were 1.80% of total assets compared to 1.86% at March 31, 2017 and 2.57% at June 30, 2016.  The remaining valuation allowance on DTAs at June 30, 2017 was $3.4 million, primarily relating to net operating loss carryforwards (NOLs) that may not be available to the Company until periods beyond five years due to certain tax code limitations.

Strong core earnings resulted in continued improvement in fully diluted tangible book value per share which increased to $6.47 at June 30, 2017 from $6.30 and $5.72 at March 31, 2017 and June 30, 2016, respectively. 

Second Quarter Performance Highlights:

  • Net income was $746 thousand compared to net income of $659 thousand in the second quarter of 2016, adjusted to exclude the DTA recapture and to assume tax expense for the entire quarter.
  • Total loans increased by $13 million, or 5.9%, to $241 million compared to the second quarter of 2016.
  • Non-performing assets were 1.80% of total assets at June 30, 2017, compared to 1.86% and 2.57% of total assets at March 31, 2017 and June 30, 2016, respectively.
  • Total assets at June 30, 2017 were $324 million versus $326 million and $305 million at March 31, 2017 and June 30, 2016, respectively.
  • Cost of funds at the Bank was 0.23% for the quarter ended June 30, 2017 compared to 0.14% for the quarter ended June 30, 2016.
  • Net interest margin at the Bank was 4.10% and 4.16% for the quarters ended June 30, 2017 and 2016, respectively.
  • Return on average assets (ROA) was 0.92% and return on equity (ROE) was 7.33% for the three months ended June 30, 2017 versus 0.86% and 8.16%, respectively, for the three months ended June 30, 2016, adjusted to exclude the DTA recapture and to assume tax expense for the entire quarter.
  • The efficiency ratio improved to 65.59% for the three months ended June 30, 2017, compared to 70.08% and 69.81% for the March 2017 and June 2016 quarters, respectively.
  • Fully diluted tangible book value per share was $6.47 at June 30, 2017 compared to $6.30 and $5.72 at March 31, 2017 and June 30, 2016, respectively.
  • Liquidity remained strong and capital ratios exceeded all regulatory guidelines for a "well-capitalized" financial institution.

"Net income for the second quarter 2017 was strong, and reflects continued improvement in the Company's operating performance.  Loan and deposit growth year over year were solid and consistent with our approach to prudent lending and relationship building.  We continue to whittle away the legacy loans that make up the nonperforming assets.  We believe 1880 Bank is well positioned for opportunistic growth in 2017," said Kim C. Liddell, Delmarva's Chairman and President.

Delmarva Bancshares, Inc. and Subsidiary

Consolidated Balance Sheets

June 30, 2017

June 30, 2017

June 30, 2016

 March 31, 2017 

Assets

Cash and due from banks

$        4,012,049

$        2,227,440

$        3,911,347

Interest-bearing deposits in other banks

16,736,817

7,028,177

18,429,991

Federal funds sold

7,000

5,476

66,666

Total cash and cash equivalents

20,755,866

9,261,093

22,408,004

Investment securities available-for-sale, at fair value

32,410,599

41,360,352

34,319,969

Restricted stock, at cost

1,689,400

1,800,052

1,640,000

Total investment securities

34,099,999

43,160,404

35,959,969

Loans receivable, gross

240,677,930

227,303,901

241,167,855

Allowance for loan losses

(1,616,207)

(1,461,363)

(1,603,537)

Loans receivable, net of allowance for loan losses

239,061,723

225,842,538

239,564,318

Bank premises and equipment, net

5,325,078

5,627,198

5,361,044

Other real estate owned, net of valuation allowance 

289,421

1,145,321

467,037

Accrued interest receivable

702,445

582,309

546,513

Cash surrender value of life insurance

13,769,470

10,986,233

11,152,912

Goodwill

1,852,120

1,852,120

1,852,120

Core Deposit Intangible

750,505

1,110,164

833,841

Deferred tax asset

5,733,143

5,019,180

6,125,643

Other assets

1,316,274

715,896

1,467,143

Total Assets

$        323,656,044

$        305,302,456

$        325,738,544

Liabilities and Stockholders' Equity

Liabilities:

Deposits:

Non-interest-bearing

$        79,561,193

$        77,730,542

$        81,106,667

Interest-bearing

190,630,973

177,040,870

192,111,463

Total deposits

270,192,166

254,771,412

273,218,130

Accrued interest payable

150,904

564,934

77,118

Accrued benefit obligations

4,697,361

4,779,468

4,679,537

FRB/FHLB Borrowings

-

-

4,679,537

Noncumulative subordinated notes

4,100,000

4,100,000

4,100,000

Trust preferred 

2,487,574

2,445,959

2,478,270

Other liabilities

770,947

1,750,396

(3,863,180)

Total Liabilities

282,398,952

268,412,169

285,369,412

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, 3,883,593, 3,872,168 and

3,883,593 issued and outstanding, respectively

38,836

38,721

38,836

Additional paid-in capital

43,603,597

43,473,178

43,562,921

Retained earnings (deficit)

(2,415,459)

(6,864,121)

(3,161,216)

Accumulated other comprehensive income 

9,521

221,912

(92,006)

Total Stockholders' Equity

41,257,092

36,890,287

40,369,132

Total Liabilities and Stockholders' Equity

$        323,656,044

$        305,302,456

$        325,738,544

 

Delmarva Bancshares, Inc. and Subsidiary

Consolidated Statements of Operations

June 30, 2017

Three Months Ended

Year to Date

June 30, 2017

June 30, 2016

June 30, 2017

June 30, 2016

Interest and Dividend Income

Loans, including fees

$        2,906,481

$        2,773,352

$        5,790,071

$        5,529,678

Investment securities

152,832

199,667

307,813

413,760

Dividends on restricted stock

45,414

37,530

50,887

41,498

Interest on deposits in other banks

45,595

8,606

64,595

23,392

Interest on federal funds sold/due from banks

96

9

283

18

Total interest income

3,150,418

3,019,164

6,213,649

6,008,346

Interest Expense

Deposits

152,884

88,801

293,073

179,374

Junior subordinated debt

40,288

40,922

81,760

80,211

Senior subordinated debt

72,547

72,547

144,297

145,094

Borrowed funds

-

31

2

33

Total interest expense

265,719

202,301

519,132

404,712

Net interest income

2,884,699

2,816,863

5,694,517

5,603,634

Provision for Loan Losses 

12,952

-

12,952

-

Net interest income after provision 

for loan losses

2,871,747

2,816,863

5,681,565

5,603,634

Noninterest Income

Service charges on deposit accounts

192,170

164,559

369,286

327,887

Other fees and commissions

155,693

183,846

300,877

293,675

Net gains on sale of securities

-

148,216

-

150,033

Income on bank owned life insurance

116,559

70,929

166,313

154,978

Other income

22,065

27,793

44,146

84,244

Total noninterest income

486,487

595,343

880,622

1,010,817

Noninterest Expense

Salaries and employee benefits

1,018,755

992,379

1,985,130

1,988,969

Premises and equipment

273,725

371,702

547,824

698,990

Data processing

376,723

269,653

722,752

524,096

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

(66,925)

(11,688)

15,563

47,176

Professional fees

204,661

311,664

381,677

570,879

Director fees 

70,000

54,249

124,249

101,498

Core deposit amortization

83,335

100,266

171,057

206,146

FDIC assessments

30,000

65,492

54,514

133,667

Regulatory examination assessments

10,287

10,287

20,574

20,574

Other insurance expense

27,630

27,750

55,253

55,618

Other expense

182,823

190,420

377,902

373,332

Total noninterest expense

2,211,014

2,382,174

4,456,495

4,720,945

Net Income before income taxes

1,147,220

1,030,032

2,105,692

1,893,506

Provision for Income Taxes

401,462

(3,847,864)

(235,595)

(3,847,864)

Net Income

$           745,758

$         4,877,896

$         2,341,287

$        5,741,370

Net Income Per Common Share: Basic

$                 0.13

$                  0.82

$                 0.39

$                 0.97

Net Income Per Common Share: Diluted

$                  0.13

$                  0.82

$                 0.39

$                 0.97

Average Common Shares Outstanding: Basic

5,943,306

5,931,881

5,936,458

5,931,881

Average Common Shares Outstanding: Diluted

5,951,589

5,931,881

5,945,382

5,931,881

 

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

 

View original content with multimedia:http://www.prnewswire.com/news-releases/delmarva-bancshares-inc-second-quarter-2017-earnings-300493043.html

SOURCE Delmarva Bancshares, Inc.


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