UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): April 24, 2018
Eagle Bancorp Montana, Inc
(Exact Name of Registrant as Specified in Charter)
Delaware | 1-34682 | 27-1449820 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1400 Prospect Ave., Helena, Montana 59601 |
(Address of Principal Executive Offices) (Zip Code) |
(406) 442-3080
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On April 24, 2018, Eagle Bancorp Montana, Inc. announced its results of operations for the quarter ended March 31, 2018. A copy of the press release announcing Eagle’s results for the quarter ended March 31, 2018, and dated April 24, 2018 is attached as Exhibit 99.1 and incorporated herein by reference. The information in Item 2.02, as well as Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 99.1 Eagle Bancorp press release issued April 24, 2018.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Eagle Bancorp Montana, Inc | ||
Date: April 24, 2018 | By: | /s/ Laura F. Clark |
Laura F. Clark | ||
Senior Vice President & CFO | ||
EXHIBIT 99.1
Eagle Bancorp Montana Earns $573,000 in the First Quarter; Highlighted by Ruby Valley Bank Acquisition; Declares Regular Quarterly Cash Dividend of $0.09 per Share
HELENA, Montana, April 24, 2018 (GLOBE NEWSWIRE) -- Eagle Bancorp Montana, Inc. (NASDAQ:EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana, today reported net income was $573,000, or $0.11 per diluted share, in the first quarter of 2018, compared to $763,000, or $0.20 per diluted share, in the first quarter of 2017. First quarter 2018 operating results were impacted by $234,000 of acquisition-related expenses which reduced net income by $0.04 per diluted share. This compares to no acquisition expenses in the first quarter of 2017. In the fourth quarter of 2017, following a writedown of its deferred tax asset, which resulted in an additional tax expense of $715,000, or $0.15 per diluted share, net income was $553,000, or $0.11 per diluted share. The preceding quarter results were also impacted by $400,000 of acquisition-related expenses which reduced net income by $0.08 per diluted share.
Additionally, Eagle’s board of directors declared its regular quarterly cash dividend of $0.09 per share. The dividend will be payable June 1, 2018 to shareholders of record May 11, 2018. The current annualized yield is 1.73% based on recent market prices.
“The highlight of the first quarter was completing the acquisition of Ruby Valley Bank,” said Peter J. Johnson, President and CEO. “The closed acquisition added approximately $94 million in assets, $82 million in deposits and $55 million in gross loans. Additionally, it provided us a unique opportunity to expand our market presence, and lending activities, particularly agricultural lending in the Ruby Valley. Our larger branching network will allow us to better serve our new and existing customers.”
The acquisition of Ruby Valley Bank makes Opportunity Bank the fifth largest Montana-based bank based on asset size.
First Quarter 2018 Highlights (at or for the three-month period ended March 31, 2018, except where noted)
Balance Sheet Results
The Ruby Valley Bank acquisition, combined with healthy organic growth, generated a 13.8% increase in total assets which grew to $815.9 million at March 31, 2018, compared to $716.8 million at December 31, 2017, and increased 19.3% compared to $683.7 million a year ago.
“Total loans increased by 10.5%, during the quarter and increased 16.0% year-over-year due to the Ruby Valley acquisition and strong organic growth. Loan production remained solid, and we continue to see significant potential for growth in our loan origination pipelines,” said Johnson. Total loans were $567.0 million at March 31, 2018, compared to $513.2 million three months earlier and $488.9 million a year earlier.
Eagle originated $50.9 million in new residential mortgages during the quarter, excluding construction loans, and sold $49.0 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.06%. This production compares to residential mortgage originations of $75.9 million in the preceding quarter with sales of $73.2 million.
Commercial real estate loans increased 8.4% to $247.5 million at March 31, 2018, compared to $228.4 million a year earlier, while residential mortgage loans were $112.9 million, the same as a year earlier. Commercial loans increased 32.6% to $69.5 million, home equity loans increased 6.1% to $52.0 million and construction loans increased 10.3% to $26.6 million, compared to a year ago. Loans related to agriculture increased as a result of the acquisition.
Total deposits were $625.9 million at March 31, 2018, a 20.2% increase compared to $520.6 million at December 31, 2017 and an 18.9% increase compared to $526.3 million a year ago. At March 31, 2018, checking and money market accounts represent 56.5%, savings accounts represent 17,0%, and CDs comprise 26.5% of the total deposit portfolio.
Shareholders’ equity increased 8.8% to $90.9 million at March 31, 2018, compared to $83.6 million three months earlier and increased 51.5% compared to $60.0 million one year earlier. Tangible book value was $14.09 per share at March 31, 2018, compared to $15.22 per share at December 31, 2017, and $13.81 per share a year earlier.
Operating Results
“The net interest margin improved two basis points compared to the preceding quarter, and it expanded 11 basis points compared to the year ago quarter, largely due to growth in non-maturing deposits,” Johnson said. Eagle’s net interest margin was 3.77% in the first quarter, compared to 3.75% in the preceding quarter, and 3.66% in the first quarter a year ago. The investment securities portfolio increased to $158.4 million at March 31, 2018, compared to $127.2 million a year ago, which had a negative impact on the average yields on earning assets.
Eagle’s first quarter revenues were $9.5 million, compared to $9.8 million in the preceding quarter and increased 9.6% when compared to $8.7 million in the first quarter a year ago. Net interest income before the provision for loan loss increased 24.9% to $6.8 million in the first quarter compared to $5.5 million in the first quarter one year ago, and increased 9.7% compared to $6.2 million in the preceding quarter.
Noninterest income decreased 24.2% to $2.7 million in the first quarter, compared to $3.6 million in the preceding quarter, and decreased 15.7% compared to $3.2 million in the first quarter a year ago. The net gain on sale of mortgage loans totaled $1.4 million in the first quarter, compared to $2.1 million in the preceding quarter and $1.8 million in the first quarter a year ago.
First quarter noninterest expenses were $8.3 million compared to $8.0 million in the preceding quarter and $7.4 million in the year ago quarter. Acquisition costs totaled $234,000 for the current quarter, compared to $400,000 for the preceding quarter. There were no acquisition costs in the first quarter one year ago.
For the first quarter of 2018, Eagle recorded $127,000 in income tax expense for an effective tax rate of 18.1%, reflecting the new lower corporate tax rates. For the fourth quarter of 2017, Eagle recorded $940,000 in income tax expense, which, in addition to the normal provision for income taxes related to pre-tax income, included a $715,000 net charge related to the revaluation of its deferred tax assets and liabilities as a result of the Tax Cuts and Jobs act. In the first quarter a year ago, Eagle recorded $188,000 in income tax expense.
“We expect our effective tax rate to be approximately 18.3% in 2018, including estimated impact of our completed acquisition,” added Johnson. “We plan to invest a portion of our 2018 tax savings into expansion opportunities and other corporate purposes.”
Credit Quality
Eagle’s first quarter provision for loan losses was $502,000, compared to $294,000 in the preceding quarter and $301,000 in the first quarter a year ago. The allowance for loan losses represented 182.3% of nonperforming loans at March 31, 2018, compared to 588.5% three months earlier and 300.1% a year earlier.
Nonperforming loans (NPLs) were $3.4 million at March 31, 2018, compared to $977,000 three months earlier, and $1.7 million a year earlier. A portion of the increase was a result of the Ruby Valley Bank acquisition.
Net charge-offs were $122,000 in the first quarter, compared to $44,000 in the preceding quarter. In the first quarter a year ago, Eagle had net recoveries of $4,000. The allowance for loan losses was $6.1 million, or 1.08% of total loans at March 31, 2018, compared to $5.8 million, or 1.12% of total loans at December 31, 2017 and $5.1 million, or 1.04% of total loans a year ago.
Total OREO and other repossessed assets was $639,000 at March 31, 2018, compared to $525,000 at December 31, 2017 and $668,000 a year ago. Nonperforming assets (NPAs), consisting of nonperforming loans, OREO and other repossessed assets, loans delinquent 90 days or more, and restructured loans, increased to $4.0 million at March 31, 2018 or 0.49% of total assets, compared to $1.5 million, or 0.21% of total assets three months earlier and $2.4 million, or 0.35% of total assets a year earlier.
Capital Management
Eagle Bancorp Montana continues to be well capitalized with the ratio of tangible common shareholders’ equity to tangible asset of 9.60% at March 31, 2018. (Shareholders’ equity, less goodwill and core deposit intangible to tangible assets).
On October 13, 2017, Eagle successfully completed a public offering of its common stock, and issued 1,189,041 shares and received approximately $20.1 million in net cash proceeds.
On February 13, 2017, the Company completed the issuance of $10 million of senior unsecured debt. The net proceeds of $9.8 million was used as capital contribution to its bank subsidiary to support growth.
About the Company
Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana and is the holding company of Opportunity Bank, a community bank established in 1922 that serves consumers and small businesses in Montana through 17 banking offices. Additional information is available on the bank’s website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the Nasdaq Global Market under the symbol “EBMT.”
Forward Looking Statements
This release may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and may be identified by the use of such words as "believe," “will”’ "expect," "anticipate," "should," "planned," "estimated," and "potential." These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, merger with Ruby Valley Bank, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; loan demand or residential and commercial real estate values in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; the effect of our acquisition of Ruby Valley Bank including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations and the diversion of management time on issues related to the integration. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.
Balance Sheet | (Unaudited) | (Audited) | (Unaudited) | ||||||||||
(Dollars in thousands, except per share data) | March 31, | December 31, | March 31, | ||||||||||
2018 | 2017 | 2017 | |||||||||||
Assets: | |||||||||||||
Cash and due from banks | $ | 7,679 | $ | 5,517 | $ | 5,353 | |||||||
Interest-bearing deposits with banks | 1,641 | 1,920 | 813 | ||||||||||
Federal funds sold | 3,591 | - | - | ||||||||||
Total cash and cash equivalents | 12,911 | 7,437 | 6,166 | ||||||||||
Securities available-for-sale, at market value | 158,417 | 132,044 | 127,212 | ||||||||||
FHLB stock, at cost | 3,704 | 4,086 | 3,344 | ||||||||||
FRB stock | 2,019 | 1,465 | 871 | ||||||||||
Investment in Eagle Bancorp Statutory Trust I | 155 | 155 | 155 | ||||||||||
Loans held-for-sale | 8,979 | 8,949 | 8,432 | ||||||||||
Loans: | |||||||||||||
Real estate loans: | |||||||||||||
Residential mortgage (1-4 family) | 112,891 | 109,911 | 112,872 | ||||||||||
Commercial real estate | 247,516 | 233,156 | 228,363 | ||||||||||
Construction | 26,608 | 25,306 | 24,118 | ||||||||||
Agricultural | 25,399 | 11,627 | 6,104 | ||||||||||
Other loans: | |||||||||||||
Home equity | 52,028 | 52,672 | 49,037 | ||||||||||
Consumer | 17,252 | 15,712 | 14,786 | ||||||||||
Commercial | 69,538 | 63,300 | 52,423 | ||||||||||
Agricultural | 16,758 | 2,563 | 2,191 | ||||||||||
Unearned loan fees | (1,008 | ) | (1,093 | ) | (1,036 | ) | |||||||
Total loans | 566,982 | 513,154 | 488,858 | ||||||||||
Allowance for loan losses | (6,130 | ) | (5,750 | ) | (5,075 | ) | |||||||
Net loans | 560,852 | 507,404 | 483,783 | ||||||||||
Accrued interest and dividends receivable | 3,212 | 2,555 | 2,101 | ||||||||||
Mortgage servicing rights, net | 6,613 | 6,578 | 5,892 | ||||||||||
Premises and equipment, net | 27,364 | 21,958 | 19,750 | ||||||||||
Cash surrender value of life insurance | 14,575 | 14,481 | 14,191 | ||||||||||
Real estate and other assets acquired in settlement of loans, net | 639 | 525 | 668 | ||||||||||
Goodwill | 12,124 | 7,034 | 7,034 | ||||||||||
Core deposit intangible | 1,859 | 273 | 356 | ||||||||||
Deferred tax asset, net | 2,040 | 1,360 | 2,036 | ||||||||||
Other assets | 472 | 478 | 1,686 | ||||||||||
Total assets | $ | 815,935 | $ | 716,782 | $ | 683,677 | |||||||
Liabilities: | |||||||||||||
Deposit accounts: | |||||||||||||
Noninterest bearing | 133,933 | 99,799 | 95,737 | ||||||||||
Interest bearing | 492,002 | 420,765 | 430,548 | ||||||||||
Total deposits | 625,935 | 520,564 | 526,285 | ||||||||||
Accrued expense and other liabilities | 4,697 | 4,822 | 4,309 | ||||||||||
FHLB advances and other borrowings | 69,528 | 82,969 | 68,266 | ||||||||||
Other long-term debt, net | 24,827 | 24,811 | 24,782 | ||||||||||
Total liabilities | 724,987 | 633,166 | 623,642 | ||||||||||
Shareholders' Equity: | |||||||||||||
Preferred stock (par value $0.01 per share; 1,000,000 shares authorized; | |||||||||||||
no shares issued or outstanding) | - | - | - | ||||||||||
Common stock (par value $0.01; 8,000,000 shares authorized; | |||||||||||||
5,718,942, 5,272,168 and 4,083,127 shares issued; 5,460,452, 5,013,678, | |||||||||||||
and 3,811,409 shares outstanding at March 31, 2018, December 31, 2017 | |||||||||||||
and March 31, 2017, respectively) | 57 | 53 | 41 | ||||||||||
Additional paid-in capital | 51,849 | 42,780 | 22,407 | ||||||||||
Unallocated common stock held by employee stock ownership plan (ESOP) | (601 | ) | (643 | ) | (767 | ) | |||||||
Treasury stock, at cost (258,490, 258,490, and 271,718 shares at | |||||||||||||
March 31, 2018, December 31, 2017 and March 31, 2017, respectively) | (2,826 | ) | (2,826 | ) | (2,971 | ) | |||||||
Retained earnings | 44,020 | 43,939 | 41,699 | ||||||||||
Accumulated other comprehensive (loss) income | (1,551 | ) | 313 | (374 | ) | ||||||||
Total shareholders' equity | 90,948 | 83,616 | 60,035 | ||||||||||
Total liabilities and shareholders' equity | $ | 815,935 | $ | 716,782 | $ | 683,677 | |||||||
Income Statement | (Unaudited) | ||||||||||||||
(Dollars in thousands, except per share data) | Three Months Ended | ||||||||||||||
March 31, | December 31, | March 31, | |||||||||||||
2018 | 2017 | 2017 | |||||||||||||
Interest and dividend Income: | |||||||||||||||
Interest and fees on loans | $ | 6,872 | $ | 6,554 | $ | 5,570 | |||||||||
Securities available-for-sale | 989 | 762 | 729 | ||||||||||||
FRB and FHLB dividends | 79 | 46 | 40 | ||||||||||||
Interest on deposits with banks | 17 | 4 | - | ||||||||||||
Other interest income | - | 1 | 1 | ||||||||||||
Total interest and dividend income | 7,957 | 7,367 | 6,340 | ||||||||||||
Interest Expense: | |||||||||||||||
Interest expense on deposits | 426 | 411 | 380 | ||||||||||||
FHLB advances and other borrowings | 337 | 361 | 205 | ||||||||||||
Other long-term debt | 347 | 351 | 272 | ||||||||||||
Total interest expense | 1,110 | 1,123 | 857 | ||||||||||||
Net interest income | 6,847 | 6,244 | 5,483 | ||||||||||||
Loan loss provision | 502 | 294 | 301 | ||||||||||||
Net interest income after loan loss provision | 6,345 | 5,950 | 5,182 | ||||||||||||
Noninterest income: | |||||||||||||||
Service charges on deposit accounts | 226 | 233 | 232 | ||||||||||||
Net gain on sale of loans | 1,439 | 2,141 | 1,825 | ||||||||||||
Mortgage loan servicing fees | 560 | 546 | 547 | ||||||||||||
Wealth management income | 132 | 161 | 141 | ||||||||||||
Interchange and ATM fees | 225 | 208 | 206 | ||||||||||||
Appreciation in cash surrender value of life insurance | 124 | 125 | 124 | ||||||||||||
Net (loss) gain on sale of available-for-sale securities | (105 | ) | 51 | - | |||||||||||
Net loss on sale/disposal of real estate owned and other repossessed property | (25 | ) | (4 | ) | (1 | ) | |||||||||
Other noninterest income | 103 | 104 | 134 | ||||||||||||
Total noninterest income | 2,679 | 3,565 | 3,208 | ||||||||||||
Noninterest expense: | |||||||||||||||
Salaries and employee benefits | 4,909 | 4,530 | 4,433 | ||||||||||||
Occupancy and equipment expense | 828 | 665 | 717 | ||||||||||||
Data processing | 637 | 567 | 567 | ||||||||||||
Advertising | 278 | 253 | 189 | ||||||||||||
Amortization of mortgage servicing fees | 241 | 274 | 262 | ||||||||||||
Amortization of core deposit intangible and tax credits | 102 | 105 | 107 | ||||||||||||
Federal insurance premiums | 69 | 86 | 84 | ||||||||||||
Postage | 50 | 46 | 48 | ||||||||||||
Legal, accounting and examination fees | 142 | 183 | 85 | ||||||||||||
Consulting fees | 17 | 58 | 49 | ||||||||||||
Acquisition costs | 234 | 400 | - | ||||||||||||
Write-down on real estate owned and other repossessed property | - | - | 36 | ||||||||||||
Other noninterest expense | 817 | 855 | 862 | ||||||||||||
Total noninterest expense | 8,324 | 8,022 | 7,439 | ||||||||||||
Income before income taxes | 700 | 1,493 | 951 | ||||||||||||
Income tax expense | 127 | 940 | 188 | ||||||||||||
Net income | $ | 573 | $ | 553 | $ | 763 | |||||||||
Basic earnings per share | $ | 0.11 | $ | 0.11 | $ | 0.20 | |||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.11 | $ | 0.20 | |||||||||
Weighted average shares | |||||||||||||||
outstanding (basic EPS) | 5,311,527 | 4,854,128 | 3,811,409 | ||||||||||||
Weighted average shares | |||||||||||||||
outstanding (diluted EPS) | 5,375,987 | 4,912,701 | 3,875,677 | ||||||||||||
ADDITIONAL FINANCIAL INFORMATION | Three Months Ended | ||||||||||
(Dollars in thousands, except per share data)(Unaudited) | March 31, | December 31, | March 31, | ||||||||
2018 | 2017 | 2017 | |||||||||
Performance Ratios: | |||||||||||
Return on average assets | 0.28 | % | 0.31 | % | 0.46 | % | |||||
Return on average equity | 2.58 | % | 2.72 | % | 5.19 | % | |||||
Net interest margin*** | 3.77 | % | 3.75 | % | 3.66 | % | |||||
Efficiency ratio* | 86.31 | % | 80.71 | % | 84.36 | % | |||||
Asset Quality Ratios and Data: | As of or for the Three Months Ended | ||||||||||
March 31, | December 31, | March 31, | |||||||||
2018 | 2017 | 2017 | |||||||||
Nonaccrual loans | $ | 1,740 | $ | 977 | $ | 651 | |||||
Loans 90 days past due and still accruing | - | - | 998 | ||||||||
Restructured loans, net | 1,622 | - | 42 | ||||||||
Total nonperforming loans | 3,362 | 977 | 1,691 | ||||||||
Other real estate owned and other repossessed assets | 639 | 525 | 668 | ||||||||
Total nonperforming assets | $ | 4,001 | $ | 1,502 | $ | 2,359 | |||||
Nonperforming loans / portfolio loans | 0.59 | % | 0.19 | % | 0.35 | % | |||||
Nonperforming assets / assets | 0.49 | % | 0.21 | % | 0.35 | % | |||||
Allowance for loan losses / portfolio loans | 1.08 | % | 1.12 | % | 1.04 | % | |||||
Allowance / nonperforming loans | 182.33 | % | 588.54 | % | 300.12 | % | |||||
Gross loan charge-offs for the quarter | $ | 130 | $ | 53 | $ | 9 | |||||
Gross loan recoveries for the quarter | $ | 8 | $ | 9 | $ | 13 | |||||
Net loan charge-offs for the quarter | $ | 122 | $ | 44 | $ | (4 | ) | ||||
Capital Data (At quarter end): | |||||||||||
Tangible book value per share | $ | 14.09 | $ | 15.22 | $ | 13.81 | |||||
Shares outstanding | 5,460,452 | 5,013,678 | 3,811,409 | ||||||||
Tangible common equity to tangible assets | 9.60 | % | 10.76 | % | 7.78 | % | |||||
Other Information: | |||||||||||
Average total assets for the quarter | $ | 816,688 | $ | 714,832 | $ | 662,541 | |||||
Average total assets year to date | $ | 816,688 | $ | 696,835 | $ | 662,541 | |||||
Average earning assets for the quarter | $ | 736,002 | $ | 660,442 | $ | 607,048 | |||||
Average earning assets year to date | $ | 736,002 | $ | 641,141 | $ | 607,048 | |||||
Average loans for the quarter ** | $ | 573,015 | $ | 524,057 | $ | 474,439 | |||||
Average loans year to date ** | $ | 573,015 | $ | 507,980 | $ | 474,439 | |||||
Average equity for the quarter | $ | 88,677 | $ | 81,415 | $ | 58,752 | |||||
Average equity year to date | $ | 88,677 | $ | 66,200 | $ | 58,752 | |||||
Average deposits for the quarter | $ | 605,572 | $ | 523,866 | $ | 515,851 | |||||
Average deposits year to date | $ | 605,572 | $ | 518,638 | $ | 515,851 | |||||
* The efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of | |||||||||||
intangible asset amortization, by the sum of net interest income and non-interest income. | |||||||||||
** Includes loans held for sale. | |||||||||||
*** Based on actual days. Previously calculated on a 360 day basis. | |||||||||||
Use of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains our efficiency ratio and tangible book value per share, which are non-GAAP financial measures. The numerator for the efficiency ratio is calculated by subtracting intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders’ equity are calculated by excluding intangible assets from assets and shareholders’ equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios, and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison to our competitors.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders’ equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.
Efficiency Ratio | (Unaudited) | |||||||||||
(Dollars in thousands, except per share data) | Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | ||||||||||
2018 | 2017 | 2017 | ||||||||||
Calculation of Efficiency Ratio: | ||||||||||||
Noninterest expense | $ | 8,324 | $ | 8,022 | $ | 7,439 | ||||||
Intangible asset amortization | (102 | ) | (105 | ) | (107 | ) | ||||||
Efficiency ratio numerator | 8,222 | 7,917 | 7,332 | |||||||||
Net interest income | 6,847 | 6,244 | 5,483 | |||||||||
Noninterest income | 2,679 | 3,565 | 3,208 | |||||||||
Efficiency ratio denominator | 9,526 | 9,809 | 8,691 | |||||||||
Efficiency ratio | 86.31 | % | 80.71 | % | 84.36 | % |
Tangible Book Value and Tangible Assets | (Unaudited) | |||||||||||
(Dollars in thousands, except per share data) | March 31, | December 31, | March 31, | |||||||||
2018 | 2017 | 2017 | ||||||||||
Tangible Book Value: | ||||||||||||
Shareholders' equity | $ | 90,948 | $ | 83,616 | $ | 60,035 | ||||||
Goodwill and core deposit intangible, net | (13,983 | ) | (7,307 | ) | (7,390 | ) | ||||||
Tangible common shareholders' equity | $ | 76,965 | $ | 76,309 | $ | 52,645 | ||||||
Common shares outstanding at end of period | 5,460,452 | 5,013,678 | 3,811,409 | |||||||||
Common shareholders' equity (book value) per share (GAAP) | $ | 16.66 | $ | 16.68 | $ | 15.75 | ||||||
Tangible common shareholders' equity (tangible book value) | ||||||||||||
per share (non-GAAP) | $ | 14.09 | $ | 15.22 | $ | 13.81 | ||||||
Tangible Assets: | ||||||||||||
Total assets | $ | 815,935 | $ | 716,782 | $ | 683,677 | ||||||
Goodwill and core deposit intangible, net | (13,983 | ) | (7,307 | ) | (7,390 | ) | ||||||
Tangible assets (non-GAAP) | $ | 801,952 | $ | 709,475 | $ | 676,287 | ||||||
Tangible common shareholders' equity to tangible assets | ||||||||||||
(non-GAAP) | 9.60 | % | 10.76 | % | 7.78 | % | ||||||
Contacts:
Peter J. Johnson, President and CEO
(406) 457-4006
Laura F. Clark, EVP and CFO
(406) 457-4007