Delmarva Bancshares, Inc. Third Quarter 2017 Earnings

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November 1, 2017 9:22 AM EDT

CAMBRIDGE, Md., Nov. 1, 2017 /PRNewswire/ -- Delmarva Bancshares, Inc. (the "Company" or "Delmarva"), parent company for 1880 Bank, today reported net income of $597 thousand or $0.10 per share for the quarter ended September 30, 2017, compared to $746 thousand or $0.13 per share for the quarter ended June 30, 2017 and net income of $1.3 million or $0.22 per share for the third quarter of 2016.  The Company's net income for the nine months ended September 30, 2017 was $2.9 million or $0.49 per share, compared to $7.0 million or $1.18 per share for the September 2016 nine month period. Excluding the impact of recapturing deferred tax assets (DTAs) and assuming a comparable full year's tax effect on 2016 earnings, core net income was $597 thousand and $1.9 million, or $0.10 and $0.33 per share respectively, for the September 2017 three and nine month periods, compared to $460 thousand and $1.7 million, or $0.08 and $0.28 respectively, for the September 2016 three and nine month periods.

(PRNewsfoto/Delmarva Bancshares, Inc.)

Delmarva's total assets were $328 million at September 30, 2017, compared to $324 million and $315 million at June 30, 2017 and September 30, 2016, respectively.  Total loans increased by $5.6 million or 2.4% to $242 million from September 2016.  Total deposits were $274 million at September 30, 2017, compared to $270 million at June 30, 2017 and $263 million at September 30, 2016.  Non-interest bearing deposits represented 28% of total deposits at September 30, 2017.  As of September 30, 2017, non-performing assets were 1.69% of total assets compared to 1.80% at June 30, 2017 and 2.44% at September 30, 2016.  The remaining valuation allowance on DTAs at September 30, 2017 was $3.4 million.

Core earnings resulted in continued improvement in fully diluted tangible book value per share, which increased to $6.60 at September 30, 2017 from $6.47 and $5.96 at June 30, 2017 and September 30, 2016, respectively. 

Third Quarter Performance Highlights:

  • Core net income was $597 thousand or $0.10 per share for the September 2017 quarter, compared to core net income of $460 thousand or $0.08 per share in the third quarter of 2016.
  • Core net income was $1.9 million or $0.33 per share for the September 2017 nine month period, compared to core net income of $1.7 million or $0.28 per share for the nine months ended September 30, 2016.
  • Total loans increased by $5.6 million, or 2.4%, to $242 million compared to the third quarter of 2016.
  • Non-performing assets were 1.69% of total assets at September 30, 2017, compared to 1.80% and 2.44% of total assets at June 30, 2017 and September 30, 2016, respectively.
  • Total assets at September 30, 2017 were $328 million versus $324 million and $315 million at June 30, 2017 and September 30, 2016, respectively.
  • Cost of funds at the Bank was 0.25% and 0.23% for the three and nine months ended September 30, 2017, respectively, compared to 0.18% and 0.15% for the September 30, 2016 three and nine month periods, respectively.
  • Net interest margin at the Bank was 4.13% and 4.09% for the three and nine months ended September 30, 2017, respectively, compared to 4.27% and 4.15% for the three and nine months ended September 30, 2016, respectively.
  • Core return on assets (ROA) was 0.74% and core return on equity (ROE) was 5.73% for the three months ended September 30, 2017, compared to 0.60% and 4.96%, respectively, for the three months ended September 30, 2016.
  • Core ROA was 0.80% and core ROE was 6.38% for the nine months ended September 30, 2017, compared to 0.73% and 6.64%, respectively, for the nine months ended September 30, 2016.
  • The efficiency ratio was 70.47% and 68.69% for the three and nine months ended September 30, 2017, respectively, compared to 72.87% and 71.87% for the September 2016 three and nine month periods, respectively.
  • Fully diluted tangible book value per share was $6.60 at September 30, 2017 compared to $6.47 and $5.96 at June 30, 2017 and September 30, 2016, respectively.
  • Liquidity remained strong and capital ratios exceeded all regulatory guidelines for a "well-capitalized" financial institution.

"Our approach to prudent loan growth and relationship building continues to produce solid performance results.  The strength of our franchise is the core deposits and strong banking relationships that take time to cultivate.  Those cultivation activities and effort of our team should bear more future business.  The Company is well positioned for organic growth and acquisition opportunities," said Kim C. Liddell, Delmarva's Chairman and President.

Delmarva Bancshares, Inc. and Subsidiary

Consolidated Balance Sheets

September 30, 2017

September 30, 2017

September 30, 2016

June 30, 2017

Assets

Cash and due from banks

$                  4,631,945

$                  2,714,456

$            4,012,049

Interest-bearing deposits in other banks

16,633,128

8,423,535

16,736,817

Federal funds sold

126,629

7,000

7,000

Total cash and cash equivalents

21,391,702

11,144,991

20,755,866

Investment securities available-for-sale, at fair value

35,926,265

39,394,611

32,410,599

Restricted stock, at cost

1,706,600

1,951,952

1,689,400

Total investment securities

37,632,865

41,346,563

34,099,999

Loans receivable, gross

241,528,168

235,944,318

240,677,930

Allowance for loan losses

(1,639,922)

(1,607,559)

(1,616,207)

Loans receivable, net of allowance for loan losses

239,888,246

234,336,759

239,061,723

Bank premises and equipment, net

5,221,651

5,547,194

5,325,078

Other real estate owned, net of valuation allowance 

516,671

1,164,221

289,421

Accrued interest receivable

658,804

627,746

702,445

Cash surrender value of life insurance

13,834,802

11,052,842

13,769,470

Goodwill

1,852,120

1,852,120

1,852,120

Core Deposit Intangible

671,556

1,013,670

750,505

Deferred tax asset

5,432,586

4,977,300

5,733,143

Other assets

1,160,949

1,827,306

1,316,274

Total Assets

$             328,261,952

$             314,890,712

$        323,656,044

Liabilities and Stockholders' Equity

Liabilities:

Deposits:

Non-interest-bearing

$                77,881,183

$                79,447,979

$          79,561,193

Interest-bearing

196,209,163

183,211,015

190,630,973

Total deposits

274,090,346

262,658,994

270,192,166

Accrued interest payable

90,795

678,404

150,904

Accrued benefit obligations

4,748,619

4,786,215

4,697,361

FRB/FHLB Borrowings

-

-

-

Noncumulative subordinated notes

4,100,000

4,100,000

4,100,000

Trust preferred 

2,495,753

2,455,621

2,487,574

Other liabilities

926,012

1,965,783

770,947

Total Liabilities

286,451,525

276,645,017

282,398,952

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

43,616,099

43,498,431

43,603,597

Retained earnings (deficit)

(1,818,074)

(5,583,677)

(2,415,459)

Accumulated other comprehensive income 

(47,031)

271,623

9,521

Total Stockholders' Equity

41,810,427

38,245,695

41,257,092

Total Liabilities and Stockholders' Equity

$             328,261,952

$             314,890,712

$        323,656,044

 

Delmarva Bancshares, Inc. and Subsidiary

Consolidated Statements of Operations

September 30, 2017

Three Months Ended

Year to Date

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

Interest and Dividend Income

Loans, including fees

$              2,938,258

$              2,915,041

$              8,728,329

$              8,447,094

Investment securities

175,611

172,342

483,424

586,662

Dividends on restricted stock

7,804

2,121

58,691

43,059

Interest on deposits in other banks

38,089

9,282

102,684

32,673

Interest on federal funds sold/due from banks

314

27

597

45

Total interest income

3,160,076

3,098,813

9,373,725

9,109,533

Interest Expense

Deposits

164,393

113,004

457,466

292,378

Junior subordinated debt

40,691

41,964

122,451

122,175

Senior subordinated debt

73,345

72,813

217,642

217,907

Borrowed funds

-

279

2

311

Total interest expense

278,429

228,060

797,561

632,771

Net interest income

2,881,647

2,870,753

8,576,164

8,476,762

Provision for Loan Losses 

52,000

150,401

64,952

150,071

Net interest income after provision 

for loan losses

2,829,647

2,720,352

8,511,212

8,326,691

Noninterest Income

Service charges on deposit accounts

206,385

170,839

575,671

498,726

Other fees and commissions

154,867

180,598

455,744

442,085

Net gains on sale of securities

-

-

-

150,033

Income on bank owned life insurance

65,332

34,420

231,645

221,586

Other income

35,211

26,535

79,357

108,403

Total noninterest income

461,795

412,392

1,342,417

1,420,833

Noninterest Expense

Salaries and employee benefits

1,009,781

996,088

2,994,911

2,985,056

Premises and equipment

328,607

368,357

876,431

1,062,779

Data processing

396,472

329,437

1,119,224

854,933

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

10,303

53,037

25,866

100,214

Professional fees

184,123

192,751

565,800

765,718

Director fees 

77,876

54,249

202,125

155,747

Core deposit amortization

78,949

97,108

250,006

302,640

FDIC assessments

25,473

63,168

79,987

196,835

Regulatory examination assessments

10,287

10,287

30,861

30,861

Other insurance expense

28,140

28,508

83,393

84,126

Other expense

206,265

199,378

584,167

574,403

Total noninterest expense

2,356,276

2,392,368

6,812,771

7,113,312

Net Income before income taxes

935,166

740,376

3,040,858

2,634,212

Provision for Income Taxes

337,781

(539,738)

102,186

(4,387,602)

Net Income

$                      597,385

$                  1,280,114

$                  2,938,672

$                  7,021,814

Net Income Per Common Share: Basic

$                             0.10

$                             0.22

$                             0.49

$                             1.18

Net Income Per Common Share: Diluted

$                             0.10

$                             0.22

$                             0.49

$                             1.18

Average Common Shares Outstanding: Basic

5,943,306

5,931,881

5,938,057

5,931,881

Average Common Shares Outstanding: Diluted

5,953,704

5,931,881

5,948,021

5,931,881

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

 

View original content with multimedia:http://www.prnewswire.com/news-releases/delmarva-bancshares-inc-third-quarter-2017-earnings-300547368.html

SOURCE Delmarva Bancshares, Inc.


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