WALDORF, Md., Jan. 29, 2018 (GLOBE NEWSWIRE) -- The Community Financial Corporation (NASDAQ:TCFC) (the “Company”), the holding company for Community Bank of the Chesapeake (the “Bank”), reported its results of operations for the fourth quarter and year ended December 31, 2017. The Company reported a net loss for the fourth quarter of 2017 of $459,000 or a diluted loss per share of $0.10 compared to net income of $2.0 million or $0.44 per diluted share for the fourth quarter of 2016. The current quarter’s results included $2.7 million in additional income tax expense from the revaluation of deferred tax assets as a result of the reduction in the corporate income tax rate under the recently enacted Tax Cuts and Jobs Act and merger and acquisition costs of $230,000, net of tax. The combined impact of these items resulted in a reduction to quarterly earnings per share of approximately $0.64 per share.
Net income for year ended December 31, 2017 was $7.2 million or $1.56 per diluted share after the inclusion of the additional tax expense under the recently enacted Tax Cuts and Jobs Act and the expenses associated with the pending acquisition of County First Bank. The additional income tax and merger and acquisition costs of $724,000, net of tax, resulted in a reduction of earnings per share of approximately $0.75 per share for 2017. Net income for the year ended December 31, 2016 was $7.3 million or $1.59 per diluted share.
Income before taxes (pretax income) increased $619,000 or 18.3% to $4.0 million for the three months ended December 31, 2017 compared to $3.4 million for the three months ended December 31, 2016. The Company’s pretax returns on average assets and common stockholders’ equity for the fourth quarter of 2017 were 1.14% and 14.15%, respectively, compared to 1.04% and 12.84%, respectively, for the fourth quarter of 2016. The Company’s after-tax returns on average assets and common stockholders’ equity for the fourth quarter of 2017 were (0.13%) and (1.62%), respectively, compared to 0.62% and 7.68%, respectively, for the fourth quarter of 2016. Pretax income increased $4.6 million or 39.3% to $16.3 million for the year ended December 31, 2017 compared to $11.7 million for the year ended December 31, 2016. The Company’s pretax returns on average assets and common stockholders’ equity for 2017 were 1.19% and 14.88%, respectively, compared to 0.96% and 11.36%, respectively, for 2016. The Company’s after-tax returns on average assets and common stockholders’ equity for 2017 were 0.52% and 6.55%, respectively, compared to 0.60% and 7.09%, respectively, for 2016.
“Although the increased tax expense related to the deferred tax revaluation and merger and acquisition costs decreased net income, earnings per share and returns on average assets and common equity for the quarter and the year, we believe the reduced federal income tax rate and the efficiencies from the County First acquisition will be accretive in 2018. We completed a very strong 2017 with operating net income1 growing at a record pace for the Company. Operating earnings per share increased to $2.31 per share, an increase of $0.72 or 45% from $1.59 per share in 2016. Operating return on average assets and operating return on average common equity increased to 0.78% and 9.70%, respectively, compared to 0.60% and 7.09% in 2016,” stated William J. Pasenelli, Chief Executive Officer and Vice-Chairman of the Board. “We accomplished this primarily by controlling expense growth and improved asset quality. The Company’s efficiency ratio2 averaged in the low 60s for the year ended December 31, 2017.”
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1 The Company defines operating net income as net income before merger and acquisition costs and the deferred tax adjustment for Tax Cuts and Jobs Act. Operating earnings per share, operating return on average assets and operating return on average common equity is calculated using adjusted operating net income. See Non-GAAP reconciliation schedules.
2 Efficiency Ratio - noninterest expense divided by the sum of net interest income and noninterest income. The Company maintains a GAAP and Non-GAAP ratio. See Non-GAAP reconciliation schedules.
Average loans increased $125.5 million or 12.7% from $988.3 million for the year ended December 31, 2016 to $1,113.8 million for the year ended December 31, 2017. Overall end of period loan growth for 2017 of $61.1 million or 5.6% was lower than the Company’s planned 8% to 9% growth. The Company’s two largest portfolios, commercial real estate and residential rentals grew $60.2 million or 9.0% to $727.3 million and $8.3 million or 8.2% to $110.2 million, respectively, for the year ended December 31, 2017. Other portfolios decreased a net of $7.5 million or 2.3% to $312.5 million. The decrease in other portfolios included a $630,000 decrease in the residential first mortgage portfolio to $170.4 million and a $9.1 million decrease in the construction and land development to $27.9 million. During 2017, management directed its focus to higher yielding commercial real estate and construction loans and deemphasized residential first mortgage lending.
“We had a very positive year originating construction loans, but funding of construction projects was slower in 2017 than the prior year. As of December 31, 2017, our commercial construction and construction and land development loans had $24.8 million more unfunded than the prior year end. Available and unfunded settled construction loans were $77.2 million at year end compared to $52.4 million at December 31, 2016, stated,” Gregory Cockerham, Chief Lending Officer and Executive Vice President. “We are optimistic that settled construction loans will begin funding in 2018 and positively impact loan growth. In addition, we had over $31 million in expected settlements in commercial real estate and construction loans in our pipeline move from the third and fourth quarter of 2017 to the first quarter of 2018.”
Net interest margin decreased during the fourth quarter of 2017 compared to the third quarter of 2017, decreasing nine basis points from 3.38% to 3.29%, respectively. The NIM compression was primarily attributable to a decrease in loans yields of five basis points to 4.44% and an increase in the Company’s cost of funds of four basis points to 0.88%. Loan yields decreased three basis points due to approximately $80,000 in nonaccrual interest reversals during the quarter. The decreases in loan yields were partially offset by increased yields due to the scheduled repricing of loans at higher rates, the purchase of securities and the production of commercial real estate loans. During the second half of 2017, due to rising interest rates, the Company’s commercial portfolios with pricing tied to the prime rate began exceeding interest rate floors that were established when rates were much lower. This is expected to have a positive impact on yields in 2018.
Loan yields on repricing and new loans began to rise in the second half of 2017, influenced by increases in the federal funds target rate (1.50% as of December 13, 2017) and loan growth in higher yielding portfolios. End of period projected loan yields increased between the third and fourth quarter of 2017. The following table is based on contractual interest rates and does not include the amortization of deferred costs and fees or assumptions regarding non-accrual interest:
| December 31, 2017 | September 30, 2017 | ||||||
| EOP Contractual | EOP Contractual | ||||||
| (dollars in thousands) | Interest rate | Interest rate | |||||
| Commercial real estate | 4.43 | % | 4.38 | % | |||
| Residential first mortgages | 3.88 | % | 3.87 | % | |||
| Residential rentals | 4.63 | % | 4.60 | % | |||
| Construction and land development | 4.99 | % | 4.88 | % | |||
| Home equity and second mortgages | 4.77 | % | 4.54 | % | |||
| Commercial loans | 5.01 | % | 4.89 | % | |||
| Consumer loans | 7.57 | % | 7.47 | % | |||
| Commercial equipment | 4.41 | % | 4.49 | % | |||
| Total Loans | 4.41 | % | 4.37 | % | |||
The increase in cost of funds to 0.88% for the three months ended December 31, 2017 from 0.84% for the third quarter 2017 was primarily due to rising short-term wholesale funding rates during 2017.
“We completed our acquisition of County First Bank on January 1, 2018. We are very excited about opportunities for the Bank in 2018 to enhance net interest income and continue our focus on creating operating leverage by growing top line revenue faster than operating expenses. Cash and securities acquired of approximately $72 million will allow the Bank to pay down more costly wholesale funding in the first quarter of 2018,” stated Todd L. Capitani, Chief Financial Officer and Executive Vice-President. “In addition, we added $200 million of deposits of which approximately $160 million were stable low-cost transaction accounts that will fund planned loan growth in 2018. The closing of four of the five acquired branches this spring should begin to positively impact the Company’s expense run rate in the second half of 2018.”
County First Acquisition
On January 1, 2018, the Company completed its previously announced merger of County First Bank (“County First”) with and into the Bank, with the Bank as the surviving bank (the “Merger”) pursuant to the Agreement and Plan of Merger, dated as of July 31, 2017, by and among the Company, the Bank and County First. Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, par value $1.00 per share, of County First issued and outstanding immediately prior to the Effective Time was converted into the right to receive 0.9543 shares of Company common stock and $2.20 in cash (the “Merger Consideration”). The $2.20 in cash represents the sum of (i) $1.00 in cash consideration (the “Cash Consideration”) plus (ii) $1.20 in Contingent Cash Consideration that was determined before the completion of the Merger in accordance with the terms of the Merger Agreement. The aggregate merger consideration consisted of approximately 919,000 shares of the Company’s common stock and approximately $2.1 million in cash. Based upon the $38.78 per share closing price of the Company’s common stock on December 28, 2017, the transaction value was approximately $37.7 million.
The County First Bank acquisition is being accounted for under the acquisition method of accounting with the Company treated as the acquirer. Under the acquisition method of accounting, the assets and liabilities of County First Bank, as of January 1, 2018, will be recorded by the Company at their respective fair values, and the excess of the merger consideration over the fair value of County First Bank's net assets will be allocated to goodwill. At December 31, 2017, County First had total assets of approximately $227 million, total loans of $143 million and total deposits of $200 million. County First has five branch offices in La Plata, Waldorf, New Market, Prince Frederick and California, Maryland. The Bank intends to keep the La Plata branch open and consolidate the remaining four branches with legacy Community Bank of the Chesapeake branch offices in May of 2018. The calculations to determine fair values are not expected to be complete at the time of filing of the 2017 Annual Report on Form 10-K. Until the determination of the fair values is complete, it is impractical to include disclosures related to the fair value of the assets acquired and liabilities assumed as required by the accounting guidance.
Merger related costs, which included mainly professional fees and investment banking costs, for the three months and year ended December 31, 2017 were $335,000 and $829,000, respectively.
Net Interest Income
Net interest income increased 2.9% or $300,000 to $10.8 million for the three months ended December 31, 2017 compared to $10.5 million for the three months ended December 31, 2016. Net interest margin at 3.29% for the three months ended December 31, 2017 decreased 16 basis points from 3.45% for the three months ended December 31, 2016. Average interest-earning assets were $1,307.9 million for the fourth quarter of 2017, an increase of $94.4 million or 7.8%, compared to $1,213.5 million for the same quarter of 2016.
Net interest income increased 8.7% or $3.5 million to $43.4 million for the year ended December 31, 2017 compared to $39.9 million for the year ended December 31, 2016. Net interest margin at 3.37% for the year ended December 31, 2017, decreased 11 basis points from 3.48% for the year ended December 31, 2016. Average interest-earning assets were $1,288.8 million for 2017, an increase of $143.3 million or 12.5%, compared to $1,145.5 million for 2016.
Net interest margin declined during the year ended December 31, 2017, primarily due to reduced yields on loans and an increase in cost of funds. Yields on the loan portfolio decreased from 4.55% for the year ended December 31, 2016 to 4.45% for year ended December 31, 2017. Yields were reduced compared to the prior year due primarily to the Bank’s increased investment in residential mortgages during 2016, competition for commercial real estate loans and other commercial loans and the timing of scheduled repricing of the Bank’s loan portfolios.
An increase in the cost of funds impacted net interest margin for the comparable periods. The cost of funds increased eight basis points to 0.81% for the year ended December 31, 2017 compared to 0.73% for the year ended December 31, 2016. The Company continued to control deposit costs by increasing transaction deposits as a percentage of overall deposits. Average transaction deposits, which include savings, money market, interest-bearing demand and noninterest bearing demand accounts, for the years ended December 31, 2017 increased $56.0 million, or 9.8%, to $627.6 million compared to $571.6 million for the comparable period in 2016. Average transaction accounts as a percentage of total deposits remained stable at 58.3% for the year ended December 31, 2016 compared to 58.6% for the years ended December 31, 2017.
Wholesale and time-based funding rates are typically more sensitive to rising interest rates than transactional deposits. Compared to the year ended December 31, 2016, average interest rates in 2017 increased by 14 basis points to 1.00% on certificates of deposit, while interest-bearing transactional deposits increased by five basis points to 0.32%. Federal Home Loan Bank (“FHLB”) short-term borrowings increased by 66 basis points to 1.15% for the year ended December 31, 2017 compared to 0.49% for the same period during 2016. The Company’s increases in transaction deposits during the last twelve months have decreased downward pressure on net interest margin. The ability to increase transaction deposits faster than wholesale funding could mitigate possible downward pressure on net interest margin in a rising rate environment.
Noninterest Income and Noninterest Expense
Noninterest income increased by $109,000 to $1.0 million for the three months ended December 31, 2017 compared to $891,000 for the three months ended December 31, 2016. Noninterest income increased by $724,000 to $4.1 million for the year ended December 31, 2017 compared to $3.4 million for the year ended December 31, 2016. The increase in income for the year was principally due to OREO losses recognized in 2016 not recognized in 2017 and gains on loans held for sale in 2017 and investment gains, partially offset by a small reduction in service charge income.
For the three months ended December 31, 2017, noninterest expense increased 5.9%, or $430,000, to $7.7 million from $7.3 million for the comparable period in 2016. Fourth quarter 2017 noninterest expense included $335,000 of merger related costs, comprising primarily of professional fees and investment banking costs. The Company’s GAAP efficiency ratio for the three months ended December 31, 2017 and 2016 was 65.79% and 64.38%, respectively. The Non-GAAP efficiency ratio, which excludes merger and acquisition costs, OREO gains and losses and other non-core activities, was 62.16% and 62.18% for the same comparable periods.
Noninterest expense averaged just below $7.3 million per quarter during 2016. During 2016, the Company focused on controlling the growth of expenses by streamlining internal processes and reviewing vendor relationships. These efforts resulted in a reduction in nine FTEs, from 171 employees to 162 employees, during the year ended December 31, 2016. The Company’s strategy to create operating leverage through continued asset growth combined with controlling the growth in expenses continued during 2017.
The Company’s GAAP net operating expense ratio3 as a percentage of average assets for the three months ended December 31, 2017 and 2016 was 1.93% and 1.98%, respectively. The Non-GAAP net operating expense ratio, which excludes merger and acquisition costs, OREO gains and losses and other non-core activities, was 1.81% and 1.90% for the same comparable periods.
The following is a summary breakdown of noninterest expense:
| Three Months Ended December 31, | |||||||||||||
| (dollars in thousands) | 2017 | 2016 | $ Change | % Change | |||||||||
| Compensation and Benefits | $ | 4,191 | $ | 4,193 | $ | (2 | ) | (0.0 | %) | ||||
| OREO Valuation Allowance and Expenses | 123 | 252 | (129 | ) | (51.2 | %) | |||||||
| Merger and acquisition costs | 335 | - | 335 | n/a | |||||||||
| Operating Expenses | 3,097 | 2,871 | 226 | 7.9 | % | ||||||||
| Total Noninterest Expense | $ | 7,746 | $ | 7,316 | $ | 430 | 5.9 | % | |||||
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3 Net Operating Expense Ratio - noninterest expense less noninterest income divided by average assets. The Company maintains a GAAP and Non-GAAP ratio. See Non-GAAP reconciliation schedules.
For the year ended December 31, 2017, noninterest expense increased 3.2%, or $938,000, to $30.1 million from $29.2 million for the comparable period in 2016. The Company controlled growth in 2017 in compensation and benefits expense, reducing expense $52,000 or 0.3%, compared to the same period in the prior year. Total growth in compensation and benefit costs was 2.7% and 3.2%, respectively for the years ended December 31, 2016 and 2015. Year to date 2017 noninterest expense included $829,000 of merger related costs, comprising primarily professional fees and investment banking costs. The Company’s GAAP efficiency ratio for the year ended December 31, 2017 and 2016 was 63.40% and 67.40%, respectively. The Non-GAAP efficiency ratio was 60.42% and 64.82% for the same comparable periods. The Company’s GAAP net operating expense ratio as a percentage of average assets for the year ended December 31, 2017 and 2016 was 1.89% and 2.10%, respectively. The Non-GAAP net operating expense ratio was 1.79% and 2.00% for the same comparable periods.
The following is a summary breakdown of noninterest expense:
| Years Ended December 31, | |||||||||||||
| (dollars in thousands) | 2017 | 2016 | $ Change | % Change | |||||||||
| Compensation and Benefits | $ | 16,758 | $ | 16,810 | $ | (52 | ) | (0.3 | %) | ||||
| OREO Valuation Allowance and Expenses | 746 | 861 | (115 | ) | (13.4 | %) | |||||||
| Merger and acquisition costs | 829 | - | 829 | n/a | |||||||||
| Operating Expenses | 11,764 | 11,488 | 276 | 2.4 | % | ||||||||
| Total Noninterest Expense | $ | 30,097 | $ | 29,159 | $ | 938 | 3.2 | % | |||||
Balance Sheet and Asset Quality
Balance Sheet
Total assets at December 31, 2017 were $1.40 billion, an increase of $71.7 million or 5.4%, compared to total assets of $1.33 billion at December 31, 2016. The increase in total assets was primarily attributable to growth in loans. Net loans increased $61.1 million, or 5.7%, from $1,079.5 million at December 31, 2016 to $1,140.6 million at December 31, 2017, principally due to increases in the commercial real estate and residential rentals portfolios. The following is a breakdown of the Company’s loan portfolio at December 31, 2017 and December 31, 2016:
| (dollars in thousands) | December 31, 2017 | % | December 31, 2016 | % | $ Change | % Change | |||||||||||||||
| Commercial real estate | $ | 727,314 | 63.25 | % | $ | 667,105 | 61.25 | % | $ | 60,209 | 9.03 | % | |||||||||
| Residential first mortgages | 170,374 | 14.81 | % | 171,004 | 15.70 | % | (630 | ) | -0.37 | % | |||||||||||
| Residential rentals | 110,228 | 9.58 | % | 101,897 | 9.36 | % | 8,331 | 8.18 | % | ||||||||||||
| Construction and land development | 27,871 | 2.42 | % | 36,934 | 3.39 | % | (9,063 | ) | -24.54 | % | |||||||||||
| Home equity and second mortgages | 21,351 | 1.86 | % | 21,399 | 1.97 | % | (48 | ) | -0.22 | % | |||||||||||
| Commercial loans | 56,417 | 4.91 | % | 50,484 | 4.64 | % | 5,933 | 11.75 | % | ||||||||||||
| Consumer loans | 573 | 0.05 | % | 422 | 0.04 | % | 151 | 35.78 | % | ||||||||||||
| Commercial equipment | 35,916 | 3.12 | % | 39,737 | 3.65 | % | (3,821 | ) | -9.62 | % | |||||||||||
| 1,150,044 | 100.00 | % | 1,088,982 | 100.00 | % | 61,062 | 5.61 | % | |||||||||||||
| Less: | |||||||||||||||||||||
| Deferred loan fees and premiums | (1,086 | ) | -0.09 | % | (397 | ) | -0.04 | % | (689 | ) | 173.55 | % | |||||||||
| Allowance for loan losses | 10,515 | 0.91 | % | 9,860 | 0.91 | % | 655 | 6.64 | % | ||||||||||||
| 9,429 | 9,463 | (34 | ) | -0.36 | % | ||||||||||||||||
| $ | 1,140,615 | $ | 1,079,519 | $ | 61,096 | 5.66 | % | ||||||||||||||
Deposits increased by 6.5%, or $67.4 million, to $1,106.2 million at December 31, 2017 compared to $1,038.8 million at December 31, 2016. The Company uses both traditional and reciprocal brokered deposits. Traditional brokered deposits at December 31, 2017 and December 31, 2016 were $118.9 million and $131.0 million, respectively. Reciprocal brokered deposits are used to maximize FDIC insurance available to our customers. Reciprocal brokered deposits at December 31, 2017 and December 31, 2016 were $92.9 million and $70.7 million, respectively. The following is a breakdown of the Company’s deposit portfolio at December 31, 2017 and December 31, 2016:
| December 31, 2017 | December 31, 2016 | ||||||||||||||||||
| (dollars in thousands) | Balance | % | Balance | % | $ Change | % Change | |||||||||||||
| Noninterest-bearing demand | $ | 159,843 | 14.45 | % | $ | 144,877 | 13.95 | % | $ | 14,966 | 10.33 | % | |||||||
| Interest-bearing: | |||||||||||||||||||
| Demand | 215,448 | 19.48 | % | 162,823 | 15.67 | % | 52,625 | 32.32 | % | ||||||||||
| Money market deposits | 226,351 | 20.46 | % | 248,049 | 23.88 | % | (21,698 | ) | -8.75 | % | |||||||||
| Savings | 52,990 | 4.79 | % | 50,284 | 4.84 | % | 2,706 | 5.38 | % | ||||||||||
| Certificates of deposit | 451,605 | 40.82 | % | 432,792 | 41.66 | % | 18,813 | 4.35 | % | ||||||||||
| Total interest-bearing | 946,394 | 85.55 | % | 893,948 | 86.05 | % | 52,446 | 5.87 | % | ||||||||||
| Total Deposits | $ | 1,106,237 | 100.00 | % | $ | 1,038,825 | 100.00 | % | $ | 67,412 | 6.49 | % | |||||||
| Transaction accounts | $ | 654,632 | 59.18 | % | $ | 606,033 | 58.34 | % | 48,599 | 8.02 | % | ||||||||
FHLB long-term debt and short-term borrowings decreased $1.6 million from $144.6 million at December 31, 2016 to $143.0 million at December 31, 2017. The Company uses brokered deposits and other wholesale funding to supplement funding when loan growth exceeds core deposit growth and for asset-liability management purposes.
During the year ended December 31, 2017, stockholders’ equity increased $5.5 million to $110.0 million. The increase in stockholders’ equity was due to net income of $7.2 million, net stock related activities related to stock-based compensation of $670,000 and a net fair market value adjustment of $110,000 for leveraged ESOP shares. These increases to capital were partially offset by quarterly common dividends paid of $1.8 million, a current year increase in accumulated other comprehensive loss of $67,000 and the net increase in unearned ESOP shares of $586,000. During the year ended December 31, 2017, $237,000 or 10,157 ESOP shares were allocated with the payment of promissory notes. This was offset by the purchase of 23,503 shares of the Company’s common shares for $823,000 by the Employee Stock Ownership Plan (“ESOP”) during the third quarter of 2017. The ESOP has promissory notes with the Company for the purchase of TCFC common stock for the benefit of the participants in the Plan. Loan terms are at prime rate plus one-percentage point and amortize over seven (7) years. As principal is repaid, common shares are allocated to participants based on the participant account allocation rules described in the Plan. The Bank is a guarantor of the ESOP debt with the Company. Unencumbered shares held by the ESOP are treated as outstanding in computing earnings per share. Shares issued to the ESOP but pledged as collateral for loans obtained to provide funds to acquire the shares are not treated as outstanding in computing earnings per share.
Common stockholders' equity of $110.0 million at December 31, 2017 resulted in a book value of $23.65 per common share compared to $22.54 at December 31, 2016. The Company remains well-capitalized at December 31, 2017 with a Tier 1 capital to average assets ratio of 8.77%.
Asset Quality
The Company continues to pursue its approach of maximizing contractual rights with individual classified customer relationships. The objective is to move non-performing or substandard credits that are not likely to become performing or passing credits in a reasonable timeframe off the balance sheet. Management believes this strategy is in the best long-term interest of the Company. Because of these efforts, non-accrual loans and OREO to total assets have decreased from 1.83% at December 31, 2015, to 1.21% at December 31, 2016, and to 1.00% at December 31, 2017. Non-accrual loans, OREO and TDRs to total assets decreased from 2.98% at December 31, 2015, to 1.99%, at December 31, 2016, and to 1.71% at December 31, 2017. Classified assets increased $9.8 million from $30.6 million at December 31, 2016 to $40.4 million at December 31, 2017. The net increase was primarily due to two customer relationships that that are well-secured by commercial real estate that were downgraded to substandard in the third quarter ($4.9 million) and fourth quarter ($10.4 million). There was no impairment on these relationships based on our analysis at December 31, 2017.
Management considers classified assets to be an important measure of asset quality. The following is a breakdown of the Company’s classified and special mention assets at December 31, 2017, 2016, 2015, 2014 and 2013, respectively:
| Classified Assets and Special Mention Assets | |||||||||||||||
| (dollars in thousands) | As of 12/31/2017 | As of 12/31/2016 | As of 12/31/2015 | As of 12/31/2014 | As of 12/31/2013 | ||||||||||
| Classified loans | |||||||||||||||
| Substandard | $ | 40,306 | $ | 30,463 | $ | 31,943 | $ | 46,735 | $ | 47,645 | |||||
| Doubtful | - | 137 | 861 | - | - | ||||||||||
| Loss | - | - | - | - | - | ||||||||||
| Total classified loans | 40,306 | 30,600 | 32,804 | 46,735 | 47,645 | ||||||||||
| Special mention loans | 96 | - | 1,642 | 5,460 | 9,246 | ||||||||||
| Total classified and special mention loans | $ | 40,402 | $ | 30,600 | $ | 34,446 | $ | 52,195 | $ | 56,891 | |||||
| Classified loans | 40,306 | 30,600 | 32,804 | 46,735 | 47,645 | ||||||||||
| Classified securities | 651 | 883 | 1,093 | 1,404 | 2,438 | ||||||||||
| Other real estate owned | 9,341 | 7,763 | 9,449 | 5,883 | 6,797 | ||||||||||
| Total classified assets | $ | 50,298 | $ | 39,246 | $ | 43,346 | $ | 54,022 | $ | 56,880 | |||||
| As a percentage of Total Assets | 3.58% | 2.94% | 3.79% | 4.99% | 5.56% | ||||||||||
| As a percentage of Risk Based Capital | 32.14% | 26.13% | 30.19% | 39.30% | 43.11% | ||||||||||
The allowance for loan losses was 0.91% of gross loans at December 31, 2017 and December 31, 2016. Management’s determination of the adequacy of the allowance is based on a periodic evaluation of the portfolio with consideration given to: overall loss experience; current economic conditions; size, growth and composition of the loan portfolio; financial condition of the borrowers; current appraised values of underlying collateral and other relevant factors that, in management’s judgment, warrant recognition in determining an adequate allowance. Improvements to baseline charge-off factors for the periods used to evaluate the adequacy of the allowance as well as improvements in some qualitative factors, such as slower portfolio growth, were offset by increases in other qualitative factors, such as concentration to capital factors. The specific allowance is based on management’s estimate of realizable value for particular loans. Management believes that the allowance is adequate.
The following is a breakdown of the Company’s general and specific allowances as a percentage of gross loans at December 31, 2017 and December 31, 2016, respectively:
| % of Gross | % of Gross | ||||||||||
| (dollar in thousands) | December 31, 2017 | Loans | December 31, 2016 | Loans | |||||||
| General Allowance | $ | 9,491 | 0.82% | $ | 8,571 | 0.79% | |||||
| Specific Allowance | 1,024 | 0.09% | 1,289 | 0.12% | |||||||
| Total Allowance | $ | 10,515 | 0.91% | $ | 9,860 | 0.91% | |||||
The historical loss experience factor is tracked over various time horizons for each portfolio segment. The following table provides net charge-offs as a percentage of average loans for the three months and years ended December 31, 2017 and 2016, respectively, and a five-year trend:
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2017 | 2016 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||
| Average loans | $ | 1,132,232 | $ | 1,049,998 | $ | 1,113,822 | $ | 988,288 | $ | 874,186 | $ | 819,381 | $ | 741,369 | $ | 719,798 | |||||||||||||||||
| Net charge-offs | (50 | ) | 472 | 355 | 1,039 | 1,374 | 2,309 | 1,049 | 1,937 | ||||||||||||||||||||||||
| Net charge-offs to average loans | -0.02 | % | 0.18 | % | 0.03 | % | 0.11 | % | 0.16 | % | 0.28 | % | 0.14 | % | 0.27 | % | |||||||||||||||||
About The Community Financial Corporation - Headquartered in Waldorf, MD, The Community Financial Corporation is the bank holding company for Community Bank of the Chesapeake, a full-service commercial bank with assets of approximately $1.6 billion. Through its branch offices and commercial lending centers, Community Bank of the Chesapeake offers a broad range of financial products and services to individuals and businesses. The Company’s banking centers are located at its main office in Waldorf, Maryland, and branch offices in Waldorf, Bryans Road, Dunkirk, Leonardtown, La Plata, Charlotte Hall, Prince Frederick, Lusby and California, Maryland; and downtown Fredericksburg, Virginia. More information about Community Bank of the Chesapeake can be found at www.cbtc.com.
Use of Non-GAAP Financial Measures - Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. The Company’s management uses these non-GAAP financial measures, and believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.
Forward-looking Statements - This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements include, without limitation, those relating to the Company’s and Community Bank of the Chesapeake’s future growth and management’s outlook or expectations for revenue, assets, asset quality, profitability, business prospects, net interest margin, non-interest revenue, allowance for loan losses, the level of credit losses from lending, liquidity levels, capital levels, or other future financial or business performance strategies or expectations. These forward-looking statements may also include: any statements of the plans and objectives of management for future operations products or services, including the execution of integration plans relating to the County First acquisition; plans regarding branch closings or consolidation; any statement of expectation or belief; projections related to certain financial metrics; and any statement of assumptions underlying the foregoing. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends, changes in interest rates; loss of deposits and loan demand to other financial institutions; substantial changes in financial markets; changes in real estate value and the real estate market; regulatory changes; the possibility of unforeseen events affecting the industry generally; the uncertainties associated with newly developed or acquired operations; the outcome of litigation that may arise; market disruptions and other effects of terrorist activities; and the matters described in “Item 1A Risk Factors” in the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2016, and in its other Reports filed with the Securities and Exchange Commission (the “SEC”). The Company’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required under the rules and regulations of the SEC.
Data is unaudited as of December 31, 2017. This selected information should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
CONTACTS:
William J. Pasenelli, Chief Executive Officer
Todd L. Capitani, Chief Financial Officer
888.745.2265
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| (dollars in thousands, except per share amounts ) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Interest and Dividend Income | ||||||||||||||||
| Loans, including fees | $ | 12,560 | $ | 11,744 | $ | 49,611 | $ | 44,919 | ||||||||
| Interest and dividends on investment securities | 999 | 835 | 3,906 | 3,108 | ||||||||||||
| Interest on deposits with banks | 14 | 5 | 53 | 20 | ||||||||||||
| Total Interest and Dividend Income | 13,573 | 12,584 | 53,570 | 48,047 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 1,712 | 1,210 | 5,946 | 4,695 | ||||||||||||
| Short-term borrowings | 323 | 73 | 1,057 | 196 | ||||||||||||
| Long-term debt | 765 | 828 | 3,179 | 3,251 | ||||||||||||
| Total Interest Expense | 2,800 | 2,111 | 10,182 | 8,142 | ||||||||||||
| Net Interest Income | 10,773 | 10,473 | 43,388 | 39,905 | ||||||||||||
| Provision for loan losses | 30 | 670 | 1,010 | 2,359 | ||||||||||||
| Net Interest Income After Provision For Loan Losses | 10,743 | 9,803 | 42,378 | 37,546 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Loan appraisal, credit, and miscellaneous charges | 73 | 66 | 157 | 289 | ||||||||||||
| Gain on sale of asset | - | 8 | 47 | 12 | ||||||||||||
| Net gains (losses) on sale of OREO | 7 | 4 | 43 | (436 | ) | |||||||||||
| Net gains on sale of investment securities | 42 | (8 | ) | 175 | 31 | |||||||||||
| Income from bank owned life insurance | 192 | 196 | 773 | 789 | ||||||||||||
| Service charges | 686 | 625 | 2,595 | 2,675 | ||||||||||||
| Gain on sale of loans held for sale | - | - | 294 | - | ||||||||||||
| Total Noninterest Income | 1,000 | 891 | 4,084 | 3,360 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salary and employee benefits | 4,191 | 4,193 | 16,758 | 16,810 | ||||||||||||
| Occupancy expense | 691 | 666 | 2,632 | 2,488 | ||||||||||||
| Advertising | 139 | 138 | 543 | 647 | ||||||||||||
| Data processing expense | 588 | 589 | 2,354 | 2,267 | ||||||||||||
| Professional fees | 472 | 455 | 1,662 | 1,568 | ||||||||||||
| Merger and acquisition costs | 335 | - | 829 | - | ||||||||||||
| Depreciation of furniture, fixtures, and equipment | 192 | 204 | 786 | 812 | ||||||||||||
| Telephone communications | 49 | 41 | 191 | 174 | ||||||||||||
| Office supplies | 33 | 31 | 119 | 136 | ||||||||||||
| FDIC Insurance | 133 | 97 | 638 | 739 | ||||||||||||
| OREO valuation allowance and expenses | 123 | 252 | 746 | 861 | ||||||||||||
| Other | 800 | 650 | 2,839 | 2,657 | ||||||||||||
| Total Noninterest Expense | 7,746 | 7,316 | 30,097 | 29,159 | ||||||||||||
| Income before income taxes | 3,997 | 3,378 | 16,365 | 11,747 | ||||||||||||
| Income tax expense | 4,456 | 1,356 | 9,157 | 4,416 | ||||||||||||
| Net (Loss) Income | $ | (459 | ) | $ | 2,022 | $ | 7,208 | $ | 7,331 | |||||||
| Earnings Per Common Share | ||||||||||||||||
| Basic | $ | (0.10 | ) | $ | 0.44 | $ | 1.56 | $ | 1.59 | |||||||
| Diluted | $ | (0.10 | ) | $ | 0.44 | $ | 1.56 | $ | 1.59 | |||||||
| Cash dividends paid per common share | $ | 0.10 | $ | 0.10 | $ | 0.40 | $ | 0.40 | ||||||||
| THE COMMUNITY FINANCIAL CORPORATION | |||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | |||||||||||||||
| Reconciliation of US GAAP Net Income, Earnings Per Share (EPS), Return on Average Assets (ROAA) and Return on Average Common Equity (ROACE) to Non-GAAP Operating Net Income, EPS, ROAA and ROACE(a) | |||||||||||||||
| This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger and acquisition costs, primarily the additional income tax expense from the revaluation of deferred tax assets as a result of the reduction in the corporate income tax rate under the recently enacted Tax Cuts and Jobs Act, that are not considered part of recurring operations, such as “operating net income,” “operating earnings per share,” “operating return on average assets,” and “operating return on average common equity.” These non-GAAP measures are included because the Company believes they may provide useful supplemental information for evaluating the underlying performance trends of the Company. | |||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||
| December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | ||||||||||||
| GAAP Net (loss) income | $ | (459 | ) | $ | 2,022 | $ | 7,208 | $ | 7,331 | ||||||
| Impact of Tax Cuts and Jobs Act | 2,740 | - | 2,740 | - | |||||||||||
| Merger and acquisition costs (net of tax) | 230 | - | 724 | - | |||||||||||
| Non-GAAP Operating Net income before merger and acquisition | $ | 2,511 | $ | 2,022 | $ | 10,672 | $ | 7,331 | |||||||
| costs and deferred tax adjustment for Tax Cuts and Jobs Act | |||||||||||||||
| GAAP diluted EPS | $ | (0.10 | ) | $ | 0.44 | $ | 1.56 | $ | 1.59 | ||||||
| Non-GAAP Operating diluted EPS before merger and acquisition costs and deferred tax adjustment for Tax Cuts and Jobs Act | $ | 0.54 | $ | 0.44 | $ | 2.31 | $ | 1.59 | |||||||
| GAAP ROAA | -0.13 | % | 0.62 | % | 0.52 | % | 0.60 | % | |||||||
| Non-GAAP Operating ROAA before merger and acquisition costs and deferred tax adjustment for Tax Cuts and Jobs Act | 0.72 | % | 0.62 | % | 0.78 | % | 0.60 | % | |||||||
| GAAP ROACE | -1.62 | % | 7.68 | % | 6.55 | % | 7.09 | % | |||||||
| Non-GAAP Operating ROACE before merger and acquisition costs and deferred tax adjustment for Tax Cuts and Jobs Act | 8.89 | % | 7.68 | % | 9.70 | % | 7.09 | % | |||||||
| Weighted average common shares outstanding: | 4,616,515 | 4,606,676 | 4,629,228 | 4,599,502 | |||||||||||
| Average Assets | $ | 1,398,945 | $ | 1,297,729 | $ | 1,376,983 | $ | 1,229,470 | |||||||
| Average Equity | 113,017 | 105,245 | 109,979 | 103,397 | |||||||||||
| (a) There were no merger and acquisition costs or deferred tax adjustments for the year ended December 31, 2016. | |||||||||||||||
| THE COMMUNITY FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||
| AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST INCOME | |||||||||||||||||||||||||||||||||||
| UNAUDITED | |||||||||||||||||||||||||||||||||||
| For the Three Months Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||||||||
| dollars in thousands | Balance | Interest | Cost | Balance | Interest | Cost | Balance | Interest | Cost | Balance | Interest | Cost | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
| Loan portfolio | $ | 1,132,232 | $ | 12,560 | 4.44 | % | $ | 1,049,998 | $ | 11,744 | 4.47 | % | $ | 1,113,822 | $ | 49,611 | 4.45 | % | $ | 988,288 | $ | 44,919 | 4.55 | % | |||||||||||
| Investment securities, federal funds | |||||||||||||||||||||||||||||||||||
| sold and interest-bearing deposits | 175,663 | 1,013 | 2.31 | % | 163,548 | 840 | 2.05 | % | 175,027 | 3,959 | 2.26 | % | 157,173 | 3,128 | 1.99 | % | |||||||||||||||||||
| Total Interest-Earning Assets | 1,307,895 | 13,573 | 4.15 | % | 1,213,546 | 12,584 | 4.15 | % | 1,288,849 | 53,570 | 4.16 | % | 1,145,461 | 48,047 | 4.19 | % | |||||||||||||||||||
| Cash and cash equivalents | 16,368 | 12,725 | 15,012 | 11,858 | |||||||||||||||||||||||||||||||
| Other assets | 74,682 | 71,458 | 73,122 | 72,151 | |||||||||||||||||||||||||||||||
| Total Assets | $ | 1,398,945 | $ | 1,297,729 | $ | 1,376,983 | $ | 1,229,470 | |||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Savings | $ | 54,127 | $ | 7 | 0.05 | % | $ | 50,631 | $ | 7 | 0.06 | % | $ | 53,560 | $ | 27 | 0.05 | % | $ | 48,878 | $ | 39 | 0.08 | % | |||||||||||
| Interest-bearing demand and money | |||||||||||||||||||||||||||||||||||
| market accounts | 424,767 | 408 | 0.38 | % | 408,823 | 291 | 0.28 | % | 419,817 | 1,481 | 0.35 | % | 380,592 | 1,128 | 0.30 | % | |||||||||||||||||||
| Certificates of deposit | 445,467 | 1,297 | 1.16 | % | 415,251 | 912 | 0.88 | % | 443,181 | 4,438 | 1.00 | % | 409,621 | 3,528 | 0.86 | % | |||||||||||||||||||
| Long-term debt | 55,503 | 286 | 2.06 | % | 65,564 | 373 | 2.28 | % | 58,704 | 1,313 | 2.24 | % | 60,503 | 1,456 | 2.41 | % | |||||||||||||||||||
| Short-term debt | 95,767 | 323 | 1.35 | % | 58,658 | 73 | 0.50 | % | 91,797 | 1,057 | 1.15 | % | 39,802 | 196 | 0.49 | % | |||||||||||||||||||
| Subordinated Notes | 23,000 | 359 | 6.24 | % | 23,000 | 360 | 6.26 | % | 23,000 | 1,438 | 6.25 | % | 23,000 | 1,438 | 6.25 | % | |||||||||||||||||||
| Guaranteed preferred beneficial interest | |||||||||||||||||||||||||||||||||||
| in junior subordinated debentures | 12,000 | 120 | 4.00 | % | 12,000 | 95 | 3.17 | % | 12,000 | 428 | 3.57 | % | 12,000 | 357 | 2.98 | % | |||||||||||||||||||
| Total Interest-Bearing Liabilities | 1,110,631 | 2,800 | 1.01 | % | 1,033,927 | 2,111 | 0.82 | % | 1,102,059 | 10,182 | 0.92 | % | 974,396 | 8,142 | 0.84 | % | |||||||||||||||||||
| Noninterest-bearing demand deposits | 164,515 | 148,327 | 154,225 | 142,116 | |||||||||||||||||||||||||||||||
| Other liabilities | 10,782 | 10,230 | 10,720 | 9,561 | |||||||||||||||||||||||||||||||
| Stockholders' equity | 113,017 | 105,245 | 109,979 | 103,397 | |||||||||||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,398,945 | $ | 1,297,729 | $ | 1,376,983 | $ | 1,229,470 | |||||||||||||||||||||||||||
| Net interest income | $ | 10,773 | $ | 10,473 | $ | 43,388 | $ | 39,905 | |||||||||||||||||||||||||||
| Interest rate spread | 3.14 | % | 3.33 | % | 3.24 | % | 3.35 | % | |||||||||||||||||||||||||||
| Net yield on interest-earning assets | 3.29 | % | 3.45 | % | 3.37 | % | 3.48 | % | |||||||||||||||||||||||||||
| Ratio of average interest-earning | |||||||||||||||||||||||||||||||||||
| assets to average interest bearing | |||||||||||||||||||||||||||||||||||
| liabilities | 117.76 | % | 117.37 | % | 116.95 | % | 117.56 | % | |||||||||||||||||||||||||||
| Cost of funds | 0.88 | % | 0.71 | % | 0.81 | % | 0.73 | % | |||||||||||||||||||||||||||
| Cost of deposits | 0.63 | % | 0.47 | % | 0.56 | % | 0.48 | % | |||||||||||||||||||||||||||
| Cost of debt | 2.34 | % | 2.26 | % | 2.28 | % | 2.55 | % | |||||||||||||||||||||||||||
| Note: Loan average balance includes non-accrual loans. There are no tax equivalency adjustments. | |||||||||||||||||||||||||||||||||||
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| December 31, 2017 | ||||||||
| (dollars in thousands, except per share amounts) | (Unaudited) | December 31, 2016 | ||||||
| Assets | ||||||||
| Cash and due from banks | $ | 13,315 | $ | 9,948 | ||||
| Interest-bearing deposits with banks | 2,102 | 1,315 | ||||||
| Securities available for sale (AFS), at fair value | 68,285 | 53,033 | ||||||
| Securities held to maturity (HTM), at amortized cost | 99,246 | 109,247 | ||||||
| Federal Home Loan Bank (FHLB) stock - at cost | 7,276 | 7,235 | ||||||
| Loans receivable - net of allowance for loan losses of $10,515 and $9,860 | 1,140,615 | 1,079,519 | ||||||
| Premises and equipment, net | 21,391 | 22,205 | ||||||
| Premises and equipment held for sale | - | 345 | ||||||
| Other real estate owned (OREO) | 9,341 | 7,763 | ||||||
| Accrued interest receivable | 4,511 | 3,979 | ||||||
| Investment in bank owned life insurance | 29,398 | 28,625 | ||||||
| Other assets | 10,481 | 11,043 | ||||||
| Total Assets | $ | 1,405,961 | $ | 1,334,257 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Liabilities | ||||||||
| Deposits | ||||||||
| Non-interest-bearing deposits | $ | 159,844 | $ | 144,877 | ||||
| Interest-bearing deposits | 946,393 | 893,948 | ||||||
| Total deposits | 1,106,237 | 1,038,825 | ||||||
| Short-term borrowings | 87,500 | 79,000 | ||||||
| Long-term debt | 55,498 | 65,559 | ||||||
| Guaranteed preferred beneficial interest in | ||||||||
| junior subordinated debentures (TRUPs) | 12,000 | 12,000 | ||||||
| Subordinated notes - 6.25% | 23,000 | 23,000 | ||||||
| Accrued expenses and other liabilities | 11,769 | 11,447 | ||||||
| Total Liabilities | 1,296,004 | 1,229,831 | ||||||
| Stockholders' Equity | ||||||||
| Common stock - par value $.01; authorized - 15,000,000 shares; | ||||||||
| issued 4,649,658 and 4,633,868 shares, respectively | 46 | 46 | ||||||
| Additional paid in capital | 48,209 | 47,377 | ||||||
| Retained earnings | 63,452 | 58,100 | ||||||
| Accumulated other comprehensive loss | (995 | ) | (928 | ) | ||||
| Unearned ESOP shares | (755 | ) | (169 | ) | ||||
| Total Stockholders' Equity | 109,957 | 104,426 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 1,405,961 | $ | 1,334,257 | ||||
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||||||||||
| SELECTED CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
| Three Months Ended (Unaudited) | Years Ended (Unaudited) | |||||||||||||||
| December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | |||||||||||||
| KEY OPERATING RATIOS | ||||||||||||||||
| Return on average assets | (0.13 | )% | 0.62 | % | 0.52 | % | 0.60 | % | ||||||||
| Return on average common equity | (1.62 | ) | 7.68 | 6.55 | 7.09 | |||||||||||
| Average total equity to average total assets | 8.08 | 8.11 | 7.99 | 8.41 | ||||||||||||
| Interest rate spread | 3.14 | 3.33 | 3.24 | 3.35 | ||||||||||||
| Net interest margin | 3.29 | 3.45 | 3.37 | 3.48 | ||||||||||||
| Cost of funds | 0.88 | 0.71 | 0.81 | 0.73 | ||||||||||||
| Cost of deposits | 0.63 | 0.47 | 0.56 | 0.48 | ||||||||||||
| Cost of debt | 2.34 | 2.26 | 2.28 | 2.55 | ||||||||||||
| Efficiency ratio | 65.79 | 64.38 | 63.40 | 67.40 | ||||||||||||
| Efficiency ratio - Non-GAAP | 62.16 | 62.18 | 60.42 | 64.82 | ||||||||||||
| Non-interest expense to average assets | 2.21 | 2.26 | 2.19 | 2.37 | ||||||||||||
| Net operating expense to average assets | 1.93 | 1.98 | 1.89 | 2.10 | ||||||||||||
| Net operating exp. to average assets - Non-GAAP | 1.81 | 1.90 | 1.79 | 2.00 | ||||||||||||
| Avg. int-earning assets to avg. int-bearing liabilities | 117.76 | 117.37 | 116.95 | 117.56 | ||||||||||||
| Net charge-offs to average loans | (0.02 | ) | 0.18 | 0.03 | 0.11 | |||||||||||
| COMMON SHARE DATA | ||||||||||||||||
| Basic net income per common share | $ | (0.10 | ) | $ | 0.44 | $ | 1.56 | $ | 1.59 | |||||||
| Diluted net income per common share | (0.10 | ) | 0.44 | 1.56 | 1.59 | |||||||||||
| Cash dividends paid per common share | 0.10 | 0.10 | 0.40 | 0.40 | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 4,616,515 | 4,574,707 | 4,627,776 | 4,599,502 | ||||||||||||
| Diluted | 4,616,515 | 4,606,676 | 4,629,228 | 4,599,502 | ||||||||||||
| (Unaudited) | ||||||||||||||||
| (dollars in thousands, except per share amounts) | December 31, 2017 | December 31, 2016 | $ Change | % Change | ||||||||||||
| ASSET QUALITY | ||||||||||||||||
| Total assets | $ | 1,405,961 | $ | 1,334,257 | $ | 71,704 | 5.4 | % | ||||||||
| Gross loans | 1,150,044 | 1,088,982 | 61,062 | 5.6 | ||||||||||||
| Classified Assets | 39,172 | 39,246 | (74 | ) | (0.2 | ) | ||||||||||
| Allowance for loan losses | 10,515 | 9,860 | 655 | 6.6 | ||||||||||||
| Past due loans (PDLs) (31 to 89 days) | 9,227 | 1,034 | 8,193 | 792.4 | ||||||||||||
| Nonperforming loans (NPLs) (>=90 days) | 2,483 | 7,705 | (5,222 | ) | (67.8 | ) | ||||||||||
| Non-accrual loans (a) | 4,693 | 8,374 | (3,681 | ) | (44.0 | ) | ||||||||||
| Accruing troubled debt restructures (TDRs) (b) | 10,021 | 10,448 | (427 | ) | (4.1 | ) | ||||||||||
| Other real estate owned (OREO) | 9,341 | 7,763 | 1,578 | 20.3 | ||||||||||||
| Non-accrual loans, OREO and TDRs | $ | 24,055 | $ | 26,585 | $ | (2,530 | ) | (9.5 | ) | |||||||
| ASSET QUALITY RATIOS | ||||||||||||||||
| Classified assets to total assets | 3.58 | % | 2.94 | % | ||||||||||||
| Classified assets to risk-based capital | 32.14 | 26.13 | ||||||||||||||
| Allowance for loan losses to total loans | 0.91 | 0.91 | ||||||||||||||
| Allowance for loan losses to nonperforming loans | 423.48 | 127.97 | ||||||||||||||
| Past due loans (PDLs) to total loans | 0.80 | 0.09 | ||||||||||||||
| Nonperforming loans (NPLs) to total loans | 0.22 | 0.71 | ||||||||||||||
| Loan delinquency (PDLs + NPLs) to total loans | 1.02 | 0.80 | ||||||||||||||
| Non-accrual loans to total loans | 0.41 | 0.77 | ||||||||||||||
| Non-accrual loans and TDRs to total loans | 1.28 | 1.73 | ||||||||||||||
| Non-accrual loans and OREO to total assets | 1.00 | 1.21 | ||||||||||||||
| Non-accrual loans, OREO and TDRs to total assets | 1.71 | 1.99 | ||||||||||||||
| COMMON SHARE DATA | ||||||||||||||||
| Book value per common share | $ | 23.65 | $ | 22.54 | ||||||||||||
| Common shares outstanding at end of period | 4,649,658 | 4,633,868 | ||||||||||||||
| OTHER DATA | ||||||||||||||||
| Full-time equivalent employees | 165 | 162 | ||||||||||||||
| Branches | 11 | 12 | ||||||||||||||
| Loan Production Offices | 5 | 5 | ||||||||||||||
| REGULATORY CAPITAL RATIOS | ||||||||||||||||
| Tier 1 capital to average assets | 8.77 | % | 9.02 | % | ||||||||||||
| Tier 1 common capital to risk-weighted assets | 9.49 | 9.54 | ||||||||||||||
| Tier 1 capital to risk-weighted assets | 10.51 | 10.62 | ||||||||||||||
| Total risk-based capital to risk-weighted assets | 13.38 | 13.60 | ||||||||||||||
| (a) Non-accrual loans include all loans that are 90 days or more delinquent and loans that are non-accrual due to the operating results or cash flows of a customer. Non-accrual loans can include loans that are current with all loan payments. | ||||||||||||||||
| (b) At December 31, 2017 and December 31, 2016, the Bank had total TDRs of $10.8 million and $15.1 million, respectively, with $769,000 and $4.7 million, respectively, in non-accrual status. These loans are classified as non-accrual loans for the calculation of financial ratios. | ||||||||||||||||
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||||||||||
| SELECTED CONSOLIDATED FINANCIAL DATA (UNAUDITED) - Continued | ||||||||||||||||
| This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger and acquisition costs, OREO gains and losses and OREO expenses, and gains and losses on sales of investments or other assets, that are not considered part of recurring operations. These non-GAAP measures are included because the Company believes they may provide useful supplemental information for evaluating the underlying performance trends of the Company. | ||||||||||||||||
| Three Months Ended (Unaudited) | Years Ended (Unaudited) | |||||||||||||||
| December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | |||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| Efficiency ratio - GAAP basis | ||||||||||||||||
| Noninterest expense | $ | 7,746 | $ | 7,316 | $ | 30,097 | $ | 29,159 | ||||||||
| Net interest income plus noninterest income | 11,773 | 11,364 | 47,472 | 43,265 | ||||||||||||
| Efficiency ratio - GAAP basis | 65.79 | % | 64.38 | % | 63.40 | % | 67.40 | % | ||||||||
| Efficiency ratio - Non-GAAP basis | ||||||||||||||||
| Noninterest Expense | $ | 7,746 | $ | 7,316 | $ | 30,097 | $ | 29,159 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Merger and acquisition costs | (335 | ) | - | (829 | ) | - | ||||||||||
| OREO valuation allowance and expenses | (123 | ) | (252 | ) | (746 | ) | (861 | ) | ||||||||
| Noninterest expense - as adjusted | 7,288 | 7,064 | 28,522 | 28,298 | ||||||||||||
| Net interest income plus noninterest income | 11,773 | 11,364 | 47,472 | 43,265 | ||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| (Gains) losses on sale of asset | - | (8 | ) | (47 | ) | (12 | ) | |||||||||
| Net (gains) losses on sale of OREO | (7 | ) | (4 | ) | (43 | ) | 436 | |||||||||
| Net (gains) losses on sale of investment securities | (42 | ) | 8 | (175 | ) | (31 | ) | |||||||||
| Net interest income plus noninterest income - adjusted | $ | 11,724 | $ | 11,360 | $ | 47,207 | $ | 43,658 | ||||||||
| Efficiency ratio -Non-GAAP basis | 62.16 | % | 62.18 | % | 60.42 | % | 64.82 | % | ||||||||
| Net operating exp. to average assets ratio - GAAP basis | ||||||||||||||||
| Average Assets | $ | 1,398,945 | $ | 1,297,729 | $ | 1,376,983 | $ | 1,229,470 | ||||||||
| Noninterest expense | 7,746 | 7,316 | 30,097 | 29,159 | ||||||||||||
| less: noninterest income | (1,000 | ) | (891 | ) | (4,084 | ) | (3,360 | ) | ||||||||
| Net operating exp. | $ | 6,746 | $ | 6,425 | $ | 26,013 | $ | 25,799 | ||||||||
| Net operating exp. to average assets - GAAP basis | 1.93 | % | 1.98 | % | 1.89 | % | 2.10 | % | ||||||||
| Net operating exp. to average assets ratio -Non-GAAP basis | ||||||||||||||||
| Average Assets | $ | 1,398,945 | $ | 1,297,729 | $ | 1,376,983 | $ | 1,229,470 | ||||||||
| Net operating exp. | 6,746 | 6,425 | 26,013 | 25,799 | ||||||||||||
| Non-GAAP adjustments noninterest expense: | ||||||||||||||||
| Merger and acquisition costs | (335 | ) | - | (829 | ) | - | ||||||||||
| OREO valuation allowance and expenses | (123 | ) | (252 | ) | (746 | ) | (861 | ) | ||||||||
| Non-GAAP adjustments noninterest income: | ||||||||||||||||
| Gains (losses) on sale of asset | - | 8 | 47 | 12 | ||||||||||||
| Net gains (losses) on sale of OREO | 7 | 4 | 43 | (436 | ) | |||||||||||
| Net gains (losses) on sale of investment securities | 42 | (8 | ) | 175 | 31 | |||||||||||
| Net operating exp.-adjusted | $ | 6,337 | $ | 6,177 | $ | 24,703 | $ | 24,545 | ||||||||
| Net operating exp. to average assets - Non-GAAP basis | 1.81 | % | 1.90 | % | 1.79 | % | 2.00 | % | ||||||||
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||||||||||||||
| SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share amounts ) | 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||
| Interest and Dividend Income | ||||||||||||||||||||
| Loans, including fees | $ | 12,560 | $ | 12,671 | $ | 12,410 | $ | 11,970 | $ | 11,744 | ||||||||||
| Interest and dividends on securities | 999 | 988 | 973 | 946 | 835 | |||||||||||||||
| Interest on deposits with banks | 14 | 21 | 12 | 6 | 5 | |||||||||||||||
| Total Interest and Dividend Income | 13,573 | 13,680 | 13,395 | 12,922 | 12,584 | |||||||||||||||
| Interest Expense | ||||||||||||||||||||
| Deposits | 1,712 | 1,563 | 1,403 | 1,269 | 1,210 | |||||||||||||||
| Short-term borrowings | 323 | 304 | 283 | 147 | 73 | |||||||||||||||
| Long-term debt | 765 | 805 | 776 | 832 | 828 | |||||||||||||||
| Total Interest Expense | 2,800 | 2,672 | 2,462 | 2,248 | 2,111 | |||||||||||||||
| Net Interest Income (NII) | 10,773 | 11,008 | 10,933 | 10,674 | 10,473 | |||||||||||||||
| Provision for loan losses | 30 | 224 | 376 | 380 | 670 | |||||||||||||||
| NII After Provision For Loan Losses | 10,743 | 10,784 | 10,557 | 10,294 | 9,803 | |||||||||||||||
| Noninterest Income | ||||||||||||||||||||
| Loan appraisal, credit, and misc. charges | 73 | 28 | 9 | 47 | 66 | |||||||||||||||
| Gain on sale of asset | - | - | 47 | - | 8 | |||||||||||||||
| Net gains (losses) on sale of OREO | 7 | - | 9 | 27 | 4 | |||||||||||||||
| Net gains (losses) on sale of investment securities | 42 | - | 133 | - | (8 | ) | ||||||||||||||
| Income from bank owned life insurance | 192 | 196 | 194 | 191 | 196 | |||||||||||||||
| Service charges | 686 | 639 | 660 | 610 | 625 | |||||||||||||||
| Gain on sale of loans held for sale | - | 294 | - | - | - | |||||||||||||||
| Total Noninterest Income | 1,000 | 1,157 | 1,052 | 875 | 891 | |||||||||||||||
| Noninterest Expense | ||||||||||||||||||||
| Salary and employee benefits | 4,191 | 4,056 | 4,198 | 4,313 | 4,193 | |||||||||||||||
| Occupancy expense | 691 | 630 | 658 | 653 | 666 | |||||||||||||||
| Advertising | 139 | 156 | 140 | 108 | 138 | |||||||||||||||
| Data processing expense | 588 | 555 | 634 | 577 | 589 | |||||||||||||||
| Professional fees | 472 | 510 | 360 | 320 | 455 | |||||||||||||||
| Merger & acquisition costs | 335 | 239 | 238 | 17 | ||||||||||||||||
| Depr.of furniture, fixtures, and equipment | 192 | 191 | 204 | 199 | 204 | |||||||||||||||
| Telephone communications | 49 | 46 | 45 | 51 | 41 | |||||||||||||||
| Office supplies | 33 | 26 | 28 | 32 | 31 | |||||||||||||||
| FDIC Insurance | 133 | 178 | 161 | 166 | 97 | |||||||||||||||
| OREO valuation allowance and expenses | 123 | 283 | 145 | 195 | 252 | |||||||||||||||
| Other | 800 | 572 | 719 | 748 | 650 | |||||||||||||||
| Total Noninterest Expense | 7,746 | 7,442 | 7,530 | 7,379 | 7,316 | |||||||||||||||
| Income before income taxes | 3,997 | 4,499 | 4,079 | 3,790 | 3,378 | |||||||||||||||
| Income tax expense | 4,456 | 1,717 | 1,536 | 1,448 | 1,356 | |||||||||||||||
| Net (Loss) Income | $ | (459 | ) | $ | 2,782 | $ | 2,543 | $ | 2,342 | $ | 2,022 | |||||||||
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||||||||||||||
| SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share amounts ) | 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||
| KEY OPERATING RATIOS | ||||||||||||||||||||
| Return on average assets | (0.13 | )% | 0.80 | % | 0.74 | % | 0.70 | % | 0.62 | % | ||||||||||
| Return on average common equity | (1.62 | ) | 9.99 | 9.36 | 8.78 | 7.68 | ||||||||||||||
| Average total equity to average total assets | 8.08 | 7.97 | 7.91 | 7.98 | 8.11 | |||||||||||||||
| Interest rate spread | 3.14 | 3.24 | 3.27 | 3.29 | 3.33 | |||||||||||||||
| Net interest margin | 3.29 | 3.38 | 3.39 | 3.40 | 3.45 | |||||||||||||||
| Cost of funds | 0.88 | 0.84 | 0.79 | 0.74 | 0.71 | |||||||||||||||
| Cost of deposits | 0.63 | 0.58 | 0.53 | 0.48 | 0.47 | |||||||||||||||
| Cost of debt | 2.34 | 2.34 | 2.22 | 2.24 | 2.26 | |||||||||||||||
| Efficiency ratio | 65.79 | 61.18 | 62.83 | 63.89 | 64.38 | |||||||||||||||
| Efficiency ratio - Non-GAAP | 62.16 | 56.88 | 60.59 | 62.20 | 62.18 | |||||||||||||||
| Non-interest expense to average assets | 2.21 | 2.13 | 2.19 | 2.21 | 2.26 | |||||||||||||||
| Net operating expense to average assets | 1.93 | 1.80 | 1.89 | 1.94 | 1.98 | |||||||||||||||
| Net operating expense to average assets - Non-GAAP | 1.81 | 1.65 | 1.83 | 1.89 | 1.90 | |||||||||||||||
| Avg. int-earning assets to avg. int-bearing liabilities | 117.76 | 116.64 | 117.07 | 116.29 | 117.37 | |||||||||||||||
| Net charge-offs to average loans | (0.02 | ) | 0.08 | 0.02 | 0.05 | 0.18 | ||||||||||||||
| COMMON SHARE DATA | ||||||||||||||||||||
| Basic net income per common share | $ | (0.10 | ) | $ | 0.60 | $ | 0.55 | $ | 0.51 | $ | 0.44 | |||||||||
| Diluted net income per common share | (0.10 | ) | 0.60 | 0.55 | 0.51 | 0.44 | ||||||||||||||
| Cash dividends paid per common share | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | |||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 4,616,515 | 4,633,391 | 4,632,911 | 4,628,357 | 4,574,707 | |||||||||||||||
| Diluted | 4,616,515 | 4,633,417 | 4,635,483 | 4,630,398 | 4,606,676 | |||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Total assets | $ | 1,405,961 | $ | 1,402,172 | $ | 1,392,688 | $ | 1,356,073 | $ | 1,334,257 | ||||||||||
| Gross loans | 1,150,044 | 1,145,406 | 1,142,010 | 1,113,742 | 1,088,982 | |||||||||||||||
| Classified Assets | 39,172 | 39,172 | 35,413 | 36,458 | 39,246 | |||||||||||||||
| Allowance for loan losses | 10,515 | 10,435 | 10,434 | 10,109 | 9,860 | |||||||||||||||
| Past due loans (PDLs) (31 to 89 days) | 9,227 | 1,642 | 1,081 | 231 | 1,034 | |||||||||||||||
| Nonperforming loans (NPLs) (>=90 days) | 2,483 | 2,741 | 3,782 | 7,168 | 7,705 | |||||||||||||||
| Non-accrual loans | 4,693 | 3,012 | 4,442 | 7,830 | 8,374 | |||||||||||||||
| Accruing troubled debt restructures (TDRs) | 10,021 | 10,069 | 10,228 | 10,264 | 10,448 | |||||||||||||||
| Other real estate owned (OREO) | 9,341 | 9,741 | 9,154 | 6,747 | 7,763 | |||||||||||||||
| Non-accrual loans, OREO and TDRs | $ | 24,055 | $ | 22,822 | $ | 23,824 | $ | 24,841 | $ | 26,585 | ||||||||||
| ASSET QUALITY RATIOS | ||||||||||||||||||||
| Classified assets to total assets | 3.58 | % | 2.79 | % | 2.54 | % | 2.69 | % | 2.94 | % | ||||||||||
| Classified assets to risk-based capital | 32.14 | 24.97 | 22.81 | 23.91 | 26.13 | |||||||||||||||
| Allowance for loan losses to total loans | 0.91 | 0.91 | 0.91 | 0.91 | 0.91 | |||||||||||||||
| Allowance for loan losses to nonperforming loans | 423.48 | 380.70 | 275.89 | 141.03 | 127.97 | |||||||||||||||
| Past due loans (PDLs) to total loans | 0.80 | 0.14 | 0.09 | 0.02 | 0.09 | |||||||||||||||
| Nonperforming loans (NPLs) to total loans | 0.22 | 0.24 | 0.33 | 0.64 | 0.71 | |||||||||||||||
| Loan delinquency (PDLs + NPLs) to total loans | 1.02 | 0.38 | 0.43 | 0.66 | 0.80 | |||||||||||||||
| Non-accrual loans to total loans | 0.41 | 0.26 | 0.39 | 0.70 | 0.77 | |||||||||||||||
| Non-accrual loans and TDRs to total loans | 1.28 | 1.14 | 1.28 | 1.62 | 1.73 | |||||||||||||||
| Non-accrual loans and OREO to total assets | 1.00 | 0.91 | 0.98 | 1.07 | 1.21 | |||||||||||||||
| Non-accrual loans, OREO and TDRs to total assets | 1.71 | 1.63 | 1.71 | 1.83 | 1.99 | |||||||||||||||
| COMMON SHARE DATA | ||||||||||||||||||||
| Book value per common share | $ | 23.65 | $ | 23.85 | $ | 23.51 | $ | 22.96 | $ | 22.54 | ||||||||||
| Common shares outstanding at end of period | 4,649,658 | 4,649,302 | 4,648,199 | 4,641,342 | 4,633,868 | |||||||||||||||
| OTHER DATA | ||||||||||||||||||||
| Full-time equivalent employees | 165 | 169 | 165 | 165 | 162 | |||||||||||||||
| Branches | 11 | 11 | 12 | 12 | 12 | |||||||||||||||
| Loan Production Offices | 5 | 5 | 5 | 5 | 5 | |||||||||||||||
| REGULATORY CAPITAL RATIOS | ||||||||||||||||||||
| Tier 1 capital to average assets | 8.77 | % | 8.82 | % | 8.85 | % | 8.91 | % | 9.02 | % | ||||||||||
| Tier 1 common capital to risk-weighted assets | 9.49 | 9.81 | 9.70 | 9.62 | 9.54 | |||||||||||||||
| Tier 1 capital to risk-weighted assets | 10.51 | 10.87 | 10.77 | 10.69 | 10.62 | |||||||||||||||
| Total risk-based capital to risk-weighted assets | 13.38 | 13.81 | 13.72 | 13.66 | 13.60 | |||||||||||||||
| THE COMMUNITY FINANCIAL CORPORATION | ||||||||||||||||||||
| SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED) - Continued | ||||||||||||||||||||
| This press release, including the accompanying financial statement tables, contains financial information determined by methods other than in accordance with generally accepted accounting principles, or GAAP. This financial information includes certain operating performance measures, which exclude merger and acquisition costs, OREO gains and losses and OREO expenses, and gains and losses on sales of investments or other assets, that are not considered part of recurring operations. These non-GAAP measures are included because the Company believes they may provide useful supplemental information for evaluating the underlying performance trends of the Company. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| (dollars in thousands, except per share amounts ) | 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
| Efficiency ratio - GAAP basis | ||||||||||||||||||||
| Noninterest expense | $ | 7,746 | $ | 7,442 | $ | 7,530 | $ | 7,379 | $ | 7,316 | ||||||||||
| Net interest income plus noninterest income | 11,773 | 12,165 | 11,985 | 11,549 | 11,364 | |||||||||||||||
| Efficiency ratio - GAAP basis | 65.79 | % | 61.18 | % | 62.83 | % | 63.89 | % | 64.38 | % | ||||||||||
| Efficiency ratio - Non-GAAP basis | ||||||||||||||||||||
| Noninterest Expense | $ | 7,746 | $ | 7,442 | $ | 7,530 | $ | 7,379 | $ | 7,316 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Merger and acquisition costs | (335 | ) | (239 | ) | (238 | ) | (17 | ) | - | |||||||||||
| OREO valuation allowance and expenses | (123 | ) | (283 | ) | (145 | ) | (195 | ) | (252 | ) | ||||||||||
| Noninterest expense - as adjusted | 7,288 | 6,920 | 7,147 | 7,167 | 7,064 | |||||||||||||||
| Net interest income plus noninterest income | 11,773 | 12,165 | 11,985 | 11,549 | 11,364 | |||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| (Gains) losses on sale of asset | - | - | (47 | ) | - | (8 | ) | |||||||||||||
| Net (gains) losses on sale of OREO | (7 | ) | - | (9 | ) | (27 | ) | (4 | ) | |||||||||||
| Net (gains) losses on sale of investment securities | (42 | ) | - | (133 | ) | - | 8 | |||||||||||||
| Net interest income plus noninterest income - adjusted | $ | 11,724 | $ | 12,165 | $ | 11,796 | $ | 11,522 | $ | 11,360 | ||||||||||
| Efficiency ratio -Non-GAAP basis | 62.16 | % | 56.88 | % | 60.59 | % | 62.20 | % | 62.18 | % | ||||||||||
| Net operating exp. to average assets ratio - GAAP basis | ||||||||||||||||||||
| Average Assets | $ | 1,398,945 | $ | 1,396,459 | $ | 1,373,832 | $ | 1,337,814 | $ | 1,297,729 | ||||||||||
| Noninterest expense | 7,746 | 7,442 | 7,530 | 7,379 | 7,316 | |||||||||||||||
| less: noninterest income | (1,000 | ) | (1,157 | ) | (1,052 | ) | (875 | ) | (891 | ) | ||||||||||
| Net operating exp. | $ | 6,746 | $ | 6,285 | $ | 6,478 | $ | 6,504 | $ | 6,425 | ||||||||||
| Net operating exp. to average assets - GAAP basis | 1.93 | % | 1.80 | % | 1.89 | % | 1.94 | % | 1.98 | % | ||||||||||
| Net operating exp. to average assets ratio -Non-GAAP basis | ||||||||||||||||||||
| Average Assets | $ | 1,398,945 | $ | 1,396,459 | $ | 1,373,832 | $ | 1,337,814 | $ | 1,297,729 | ||||||||||
| Net operating exp. | 6,746 | 6,285 | 6,478 | 6,504 | 6,425 | |||||||||||||||
| Non-GAAP adjustments noninterest expense: | ||||||||||||||||||||
| Merger and acquisition costs | (335 | ) | (239 | ) | (238 | ) | (17 | ) | - | |||||||||||
| OREO valuation allowance and expenses | (123 | ) | (283 | ) | (145 | ) | (195 | ) | (252 | ) | ||||||||||
| Non-GAAP adjustments noninterest income: | ||||||||||||||||||||
| Gains (losses) on sale of asset | - | - | 47 | - | 8 | |||||||||||||||
| Net gains (losses) on sale of OREO | 7 | - | 9 | 27 | 4 | |||||||||||||||
| Net gains (losses) on sale of investment securities | 42 | - | 133 | - | (8 | ) | ||||||||||||||
| Net operating exp.-adjusted | $ | 6,337 | $ | 5,763 | $ | 6,284 | $ | 6,319 | $ | 6,177 | ||||||||||
| Net operating exp. to average assets - Non-GAAP basis | 1.81 | % | 1.65 | % | 1.83 | % | 1.89 | % | 1.90 | % | ||||||||||