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.

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

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SOURCE Delmarva Bancshares, Inc.