Xenith Bankshares, Inc. (Nasdaq:XBKS), parent company of Xenith
Bank, a business-focused bank serving the Greater Washington, D.C.,
Richmond and Greater Hampton Roads, Virginia markets, today
announced financial results for the three months ended March 31,
2016.
Xenith Bankshares reported net income of $367 thousand, or $0.03
per common share, for the first quarter of 2016 compared to $921
thousand, or $0.07 per common share, in the first quarter of 2015
and net income of $1.5 million, or $0.11 per common share, in the
fourth quarter of 2015. Results in the first quarter of 2016
include $1.0 million ($0.08 per common share, after tax) of pre-tax
merger-related costs related to the company’s previously-announced
proposed merger with Hampton Roads Bankshares, Inc.
T. Gaylon Layfield, III, President and Chief Executive Officer,
commented: “Excluding our investments in two alternative asset
classes, mortgage warehouse lending and guaranteed student loans,
gross loans increased $44.1 million, or 7.0%, since the end of
first quarter 2015. During this same period, guaranteed student
loans declined $14.3 million and mortgage warehouse loans declined
$8.1 million. Excluding these same two asset classes, our
annualized loan growth was 1.6% during the first quarter of 2016.
While we certainly target a higher level of loan growth, pricing
competition remains intense. However, our loan pipeline
remains healthy and I’m pleased that, for the most part, loan
yields have stabilized.”
First Quarter 2016 Highlights
- Income before income tax for the three months ended March 31,
2016 was $895 thousand compared to pre-tax income of $1.3 million
for the same period of 2015 and pre-tax income of $1.9 million for
the three months ended December 31, 2015. Pre-tax income for the
2016 period included $1.0 million of merger-related costs, as
previously noted.
- Net interest income in the three months ended March 31, 2016
was $7.7 million compared to $7.3 million in the three months ended
March 31, 2015 and $8.2 million in the three months ended December
31, 2015. Accretion of acquired loan discounts in the three months
ended March 31, 2016 was $445 thousand compared to $483 thousand in
the same period of 2015 and $1.0 million in the three months ended
December 31, 2015.
- Net loans were $772.0 million at March 31, 2016, a slight
decrease from $772.2 million at December 31, 2015, and an increase
of $21.7 million from $751.0 million at March 31, 2015. Excluding
the company’s investments in a mortgage warehouse lending program
through a participation arrangement, which increased $583 thousand,
and guaranteed student loans, which declined $3.7 million, net
loans at March 31, 2016 increased $2.9 million from December 31,
2015. Excluding the decline in mortgage warehouse loans and
guaranteed student loans of $8.1 million and $14.3 million,
respectively, net loans at March 31, 2016 increased $43.5 million
from March 31, 2015.
- Average interest-earning assets in the three months ended March
31, 2016 were $1.00 billion, an increase of 14.2% from $876.3
million in the three months ended March 31, 2015. Total assets at
March 31, 2016 were $1.02 billion compared to $1.04 billion at
December 31, 2015. Total assets at March 31, 2016 increased $28.3
million from total assets of $992.7 million at March 31, 2015.
- Total deposits at March 31, 2016 were $872.3 million compared
to $889.0 million at December 31, 2015 and $843.4 million at March
31, 2015.
- Asset quality and coverage for loan and lease losses remained
strong at March 31, 2016 with ratios of nonperforming assets to
total assets of 0.85%, nonperforming assets to total loans of
1.11%, and allowance for loan and lease losses to nonaccrual loans
of 88.31%.
- Net charge-offs as a percentage of average loans were 0.06% for
the three months ended March 31, 2016 compared to 0.18% for the
year ended December 31, 2015.
- The company’s combined capital strength was reflected in ratios
that were well above regulatory standards for "well-capitalized"
banks, with a common equity Tier 1 capital ratio of 9.82%, a Tier 1
leverage ratio of 8.55%, a Tier 1 risk-based capital ratio of
9.82%, and a total risk-based capital ratio of 11.57% at March 31,
2016. Xenith Bank had a common equity Tier 1 capital ratio of
11.77%, a Tier 1 leverage ratio of 10.24%, a Tier 1 risk-based
capital ratio of 11.77%, and a total risk-based capital ratio of
12.60% at March 31, 2016.
Operating Results
First Quarter 2016 compared to First Quarter 2015
Total interest income for the three months ended March 31, 2016
was $9.6 million compared to $8.7 million for the three months
ended March 31, 2015. For the three-month period of 2016, total
interest income reflected average interest-earning assets of $1.00
billion compared to $876.3 million in interest-earning assets in
the same period of 2015, a 14.2% increase. Asset yields in the 2016
period were 3.89% compared to yields of 4.05% in the 2015 period.
The decline in asset yields was primarily due to higher average
balances of interest-bearing cash deposits, including fed funds
sold, in the 2016 period, partially offset by higher average
balances of investments and loans held for investment and lower
average balances of loans associated with the company’s
participation in a mortgage warehouse lending program in the 2016
period, which have lower yields than other loan categories.
Accretion from acquired loan discounts was $445 thousand in the
first quarter of 2016 compared to $483 thousand in the first
quarter of 2015.
Total interest expense for the three months ended March 31, 2016
was $1.9 million compared to $1.5 million for the three months
ended March 31, 2015. Average interest-bearing liabilities in the
2016 period increased to $795.2 million from $696.9 million in the
same period of 2015, a 14.1% increase. The cost of liabilities was
0.93% in the 2016 period compared to cost of 0.85% in the 2015
period. The higher cost of liabilities in the 2016 period is
primarily due to the cost related to the previously-reported
issuance and sale of the company’s $8.5 million aggregate principal
amount of subordinated notes due 2025 in the second quarter of
2015.
Net interest margin in first quarter of 2016 was 3.15% compared
to 3.38% in first quarter of 2015. Net interest margin excluding
accretion of acquired loan discounts was 2.97% in the first quarter
of 2016, down from 3.15% in the first quarter of 2015.
Net interest income after provision for loan and lease losses
was $7.5 million for the three months ended March 31, 2016 compared
to $6.7 million in the same period of 2015. Net interest income
after provision for loan and lease losses in the 2016 period
reflected $190 thousand in loan and lease loss provision expense
compared to $565 thousand of provision expense in the 2015 period.
Provision for loan and lease losses in the 2015 period reflected
greater loan growth and higher provision for the unguaranteed
portion of the company’s student loan portfolio compared to the
2016 period.
Total noninterest income was $365 thousand in the first quarter
of 2016 compared to $412 thousand in the first quarter of 2015.
Noninterest income in the 2015 included gains on sales of
investment securities, for which there were none in the 2016
period, while in the 2016 period, noninterest income included
higher earnings from bank owned life insurance due to additional
investment in the second quarter of 2015.
Noninterest expense in the first quarter of 2016 was $7.0
million, which included $1.0 million of costs related to the
proposed merger with Hampton Roads Bankshares, Inc., compared to
$5.8 million in the first quarter of 2015.
First Quarter 2016 compared to Fourth Quarter 2015
Total interest income for the three months ended March 31, 2016
and December 31, 2015 was $9.6 million and $10.0 million,
respectively. For the first quarter of 2016, total interest income
reflected average interest-earning assets of $1.00 billion compared
to $980.7 million in interest-earning assets in the fourth quarter
of 2015. Asset yields were 3.89% in the first quarter of 2016
compared to asset yields of 4.14% in the last quarter of 2015.
Accretion from acquired loans was $445 thousand in the first
quarter of 2016 and $1.04 million in the fourth quarter of
2015.
Total interest expense for the three months ended March 31, 2016
and December 31, 2015 was $1.9 million and $1.8 million,
respectively. Average interest-bearing liabilities in the first
quarter of 2016 increased to $795.2 million from $791.1 million in
the fourth quarter of 2015. The cost of total liabilities was 0.93%
and 0.90% in the first quarter of 2016 and fourth quarter of 2015,
respectively.
Net interest margin in the first of quarter 2016 was 3.15%
compared to 3.42% in the fourth quarter of 2015. Net interest
margin excluding accretion of acquired loan discounts was 2.97% in
the first quarter of 2016 compared to 2.99% in the fourth quarter
of 2015.
Net interest income after provision for loan and lease losses
was $7.5 million for the three months ended March 31, 2016 compared
to $7.2 million in the three months ended December 31, 2015. Net
interest income after provision in the first quarter of 2016
reflected $190 thousand in loan and lease loss provision, while net
interest income after provision in the fourth quarter of 2015
included $991 thousand in provision expense. Lower provision
expense in the first quarter of 2016 was primarily the result of
lower specific reserves for and upgrades in risk ratings on certain
loans and lower loan growth.
Total noninterest income was $365 thousand in the first quarter
of 2016 compared to $461 thousand in the fourth quarter of 2015.
Noninterest income in the first quarter of 2016 reflected losses on
the valuation of customer-related derivatives, whereas in the
fourth quarter of 2015, noninterest income included gains from
these derivatives and rabbi trust assets.
Noninterest expense in the first quarter of 2016 was $7.0
million, including $1.0 million in merger-related costs, compared
to $5.8 million in the fourth quarter of 2016. The company’s
efficiency ratio for the first quarter of 2016 was 87% (74%1
excluding merger-related costs) compared to 76% for the first
quarter of 2015 and 66% for the fourth quarter of 2015.
Balance Sheet
Loans after allowance for loan and lease losses remained
relatively flat at $772.0 million at March 31, 2016 from $772.2
million at December 31, 2015. Net loan balances at March 31, 2016
included $53.6 million of guaranteed student loans, a decrease of
$3.7 million from December 31, 2015 and a decrease of $40.2 million
since December 31, 2013, the first year the company invested in the
asset class.
Securities available for sale were $133.6 million at March 31,
2016 compared to $130.9 million at December 31, 2015. Securities
held to maturity were $9.3 million at March 31, 2016 and at
December 31, 2015. Total securities as a percentage of the
company’s total assets was 14.0% at March 31, 2016.
Total assets were $1.02 billion at March 31, 2016 compared to
$1.04 billion at December 31, 2015. Total deposits were $872.3
million at March 31, 2016 compared to $889.0 million at December
31, 2015.
Asset and Credit Quality
At March 31, 2016, the ratio of nonperforming assets to total
assets was 0.85%, the ratio of nonperforming assets to total loans
was 1.11%, and the ratio of the company’s allowance for loan and
lease losses (ALLL) to nonaccrual loans was 88.31%. Net charge-offs
as a percentage of average loans were 0.06% for the three months
ended March 31, 2016, which includes the charge-off of the
unguaranteed portion of the company’s guaranteed student loans that
were more than 120 days past due and were deemed to have a high
probability of default. The company’s ALLL as a percentage of total
loans was 0.91% at March 31, 2016, and this measure excluding
guaranteed student loans was 0.96%.1 Provision for loan and lease
losses on guaranteed student loans is calculated on that portion of
carrying values that is not covered by the federal government
guarantee. Additionally, the company does not record provision for
loan and lease losses on loans held pursuant to the company’s
participation in a mortgage warehouse lending program with a
national bank. Loans pursuant to this program are made to mortgage
originators that seek funding to facilitate the origination of
residential mortgage loans for sale in the secondary market and are
generally held for less than 30 days. ALLL plus remaining discounts
(credit-related fair value adjustments) on acquired loans as a
percentage of total loans was 1.31%1 as of March 31, 2016.
Capital and Shareholder Value Measures
The company’s combined capital ratios remained well above
regulatory standards for "well-capitalized" banks, with a common
equity Tier 1 capital ratio of 9.82%, a Tier 1 leverage ratio of
8.55%, a Tier 1 risk-based capital ratio of 9.82%, and a total
risk-based capital ratio of 11.57% at March 31, 2016. Capital
ratios for Xenith Bank were also strong, with a common equity Tier
1 capital ratio of 11.77%, a Tier 1 leverage ratio of 10.24%, a
Tier 1 risk-based capital ratio of 11.77%, and a total risk-based
capital ratio of 12.60% at March 31, 2016.
Total shareholders' equity was $105.5 million at March 31, 2016
compared to $102.7 million at December 31, 2015. Tangible book
value at March 31, 2016 was $6.851 per share of common stock
compared to $6.691 at December 31, 2015. Return on average assets
was 0.14% (0.55%1 excluding merger-related expenses) for the first
quarter of 2016 compared to 0.57% for the fourth quarter of 2015
and 0.39% for the first quarter of 2015. Return on average common
equity was 1.41% (5.57%1 excluding merger-related expenses) for the
first quarter 2016 compared to 5.94% for the fourth quarter of 2015
and 3.73% for the first quarter of 2015.
Outlook
Layfield concluded: “Perhaps the most important news this
quarter was our February 10, 2016 announcement of our strategic
merger with Hampton Roads Bankshares. I believe this merger has the
potential to be transformational for both of our organizations. The
combined company, with approximately $3.0 billion in assets and
$2.5 billion in deposits as of December 31, 2015, should have the
scale required to compete in today’s marketplace with a combination
of capital, core deposits and lending capabilities to drive
performance. With respect to commercial and corporate banking, the
pro forma capital base allows for a substantial increase in our
house lending limits, which further leverages our commercial and
industrial and commercial real estate focus in all our markets.
Hampton Roads brings important attributes to the combination,
including a strong consumer platform, a well-developed business
banking capability, and the ability to source core deposits, which
are vital to building franchise value. Our combined geographic
footprint will place us squarely in attractive and growing markets.
And, I believe the combination of our management teams is the right
prescription for success and will allow us to drive value for all
of our constituencies, especially our shareholders.”
Profile
Xenith Bankshares, Inc. is the holding company for Xenith Bank.
Xenith Bank is a full-service, locally-managed commercial bank,
specifically targeting the banking needs of middle market and small
businesses, local real estate developers and investors, private
banking clients, and select retail banking clients. As of March 31,
2016, the company had total assets of $1.02 billion, total deposits
of $872.3 million, and total shareholders’ equity of $105.5
million. Xenith Bank's target markets are Greater Washington, D.C.,
Richmond, Virginia, and Greater Hampton Roads, Virginia
metropolitan statistical areas. The company is headquartered in
Richmond, Virginia and currently has eight branch locations in
Herndon, Richmond, Suffolk and Gloucester, Virginia, and one loan
production office in Newport News, Virginia. Xenith Bankshares
common stock trades on the NASDAQ Capital Market under the symbol
"XBKS."
For more information about Xenith Bankshares and Xenith Bank,
visit our website: https://www.xenithbank.com/
Forward-Looking Statements
All statements other than statements of historical facts
contained in this press release are forward-looking statements.
Forward-looking statements made in this press release reflect
beliefs, assumptions and expectations of future events or results,
taking into account the information currently available to Xenith
Bankshares, Inc. (“XBKS”). These beliefs, assumptions and
expectations may change as a result of many possible events,
circumstances or factors, not all of which are currently known to
XBKS. If a change occurs, XBKS’s business, financial condition,
liquidity, results of operations and prospects may vary materially
from those expressed in, or implied by, the forward-looking
statements. Accordingly, you should not place undue reliance
on these forward-looking statements. Factors that may cause actual
results to differ materially from those contemplated by these
forward-looking statements include among others: the ability to
obtain regulatory approvals and meet other closing conditions to
the merger with Hampton Roads Bankshares, Inc. (“HRB”), including
approval by HRB and XBKS shareholders, on the expected terms and
schedule; delays in closing the merger; difficulties and delays in
integrating the HRB and XBKS businesses or fully realizing cost
savings and other benefits; business disruptions following the
proposed transaction; changes in asset quality and credit risk; the
inability to sustain revenue and earnings growth; changes in
interest rates and capital markets; inflation; customer borrowing,
repayment, investment and deposit practices; customer
disintermediation; the introduction, withdrawal, success and timing
of business initiatives; competitive conditions; HRB’s and XBKS’s
businesses experiencing disruptions due to transaction-related
uncertainty or other factors making it more difficult to maintain
relationships with employees, customers, other business partners or
governmental entities; the inability to realize cost savings or
revenues or to implement integration plans and other consequences
associated with mergers, acquisitions and divestitures; economic
conditions; the inability to realize deferred tax assets within
expected time frames or at all; and the impact, extent and timing
of technological changes, capital management activities and other
actions of the Federal Reserve Board and legislative and regulatory
actions and reforms; and the risks discussed in XBKS’s public
filings with the Securities and Exchange Commission (“SEC”),
including those outlined in Part I, Item 1A, “Risk Factors” of
XBKS’s Annual Report on Form 10-K for the year ended December 31,
2015 that was filed with the SEC on March 9, 2016. Except as
required by applicable law or regulations, XBKS does not undertake,
and specifically disclaims any obligation, to update or revise any
forward-looking statement.
1 Please see the discussion of non-GAAP financial measures at
the end of the financial tables.
-Selected Financial Tables Follow-
|
|
|
|
|
|
XENITH BANKSHARES, INC. AND
SUBSIDIARY |
CONSOLIDATED BALANCE SHEETS |
AS OF MARCH 31, 2016 AND DECEMBER 31,
2015 |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
(in
thousands, except share data) |
March 31, 2016 |
|
December 31, 2015 |
Assets |
Cash and
cash equivalents |
|
|
|
|
|
Cash and due from banks |
$ |
27,608 |
|
$ |
|
40,242 |
|
Federal funds sold |
|
13,457 |
|
|
|
21,703 |
|
Total cash and cash
equivalents |
|
41,065 |
|
|
|
61,945 |
|
Securities available for sale, at fair value |
|
133,568 |
|
|
|
130,863 |
|
Securities held to maturity, at amortized cost (fair value: 2016 -
$10,071; 2015 - $9,769) |
|
9,268 |
|
|
|
9,270 |
|
Loans,
net of allowance for loan and lease losses, 2016 - $7,072; 2015 -
$7,350 |
|
772,044 |
|
|
|
772,178 |
|
Premises
and equipment, net |
|
7,602 |
|
|
|
7,544 |
|
Other
real estate owned, net |
|
632 |
|
|
|
533 |
|
Goodwill |
|
12,989 |
|
|
|
12,989 |
|
Other
intangible assets, net |
|
2,582 |
|
|
|
2,697 |
|
Accrued
interest receivable |
|
4,236 |
|
|
|
4,430 |
|
Deferred
tax asset |
|
5,538 |
|
|
|
6,260 |
|
Bank
owned life insurance |
|
19,739 |
|
|
|
19,603 |
|
Other
assets |
|
11,779 |
|
|
|
11,184 |
|
Total assets |
$ |
1,021,042 |
|
$ |
|
1,039,496 |
|
Liabilities and Shareholders’ Equity |
Deposits |
|
|
|
|
|
Demand and money market |
$ |
567,868 |
|
$ |
|
568,366 |
|
Savings |
|
11,617 |
|
|
|
10,564 |
|
Time |
|
292,776 |
|
|
|
310,100 |
|
Total deposits |
|
872,261 |
|
|
|
889,030 |
|
Accrued
interest payable |
|
282 |
|
|
|
426 |
|
Borrowed
funds |
|
36,576 |
|
|
|
36,861 |
|
Supplemental executive retirement plan |
|
2,194 |
|
|
|
2,217 |
|
Other
liabilities |
|
4,237 |
|
|
|
8,273 |
|
Total
liabilities |
|
915,550 |
|
|
|
936,807 |
|
Shareholders’ equity |
|
|
|
|
|
Common stock, $1.00 par value,
100,000,000 shares authorized as of March 31, 2016 and |
|
|
|
|
|
December 31, 2015; 13,129,239
shares issued and outstanding as of March 31, 2016 and |
|
|
|
|
|
12,996,622 shares issued and
outstanding as of December 31, 2015 |
|
13,129 |
|
|
|
12,997 |
|
Additional paid-in capital |
|
86,968 |
|
|
|
86,684 |
|
Retained earnings |
|
3,948 |
|
|
|
3,581 |
|
Accumulated other comprehensive
income (loss), net of tax |
|
1,447 |
|
|
|
(573 |
) |
Total shareholders’
equity |
|
105,492 |
|
|
|
102,689 |
|
Total liabilities and
shareholders’ equity |
$ |
1,021,042 |
|
$ |
|
1,039,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
XENITH BANKSHARES, INC.
AND SUBSIDIARY |
CONSOLIDATED STATEMENTS
OF INCOME |
FOR THE THREE MONTHS
ENDED MARCH 31, 2016 AND 2015 |
(Unaudited) |
|
|
|
|
|
|
(in
thousands, except per share data) |
March 31, 2016 |
|
March 31, 2015 |
Interest income |
|
|
|
|
|
Interest
and fees on loans |
$ |
8,477 |
|
$ |
|
8,206 |
|
Interest
on securities |
|
965 |
|
|
|
446 |
|
Interest
on federal funds sold and deposits in other banks |
|
132 |
|
|
|
86 |
|
Total interest
income |
|
9,574 |
|
|
|
8,738 |
|
Interest expense |
|
|
|
|
|
Interest
on deposits |
|
1,505 |
|
|
|
1,266 |
|
Interest
on federal funds purchased and borrowed funds |
|
349 |
|
|
|
210 |
|
Total interest
expense |
|
1,854 |
|
|
|
1,476 |
|
Net interest
income |
|
7,720 |
|
|
|
7,262 |
|
Provision for loan and lease losses |
|
190 |
|
|
|
565 |
|
Net interest income after
provision for loan and lease losses |
|
7,530 |
|
|
|
6,697 |
|
Noninterest income |
|
|
|
|
|
Service
charges on deposit accounts |
|
153 |
|
|
|
163 |
|
Gain on
sales of securities |
|
- |
|
|
|
67 |
|
Increase
in cash surrender value of bank owned life insurance |
|
136 |
|
|
|
97 |
|
Other
income |
|
76 |
|
|
|
85 |
|
Total noninterest
income |
|
365 |
|
|
|
412 |
|
Noninterest expense |
|
|
|
|
|
Compensation and benefits |
|
3,517 |
|
|
|
3,282 |
|
Occupancy |
|
402 |
|
|
|
418 |
|
FDIC
insurance |
|
186 |
|
|
|
177 |
|
Bank
franchise taxes |
|
270 |
|
|
|
246 |
|
Technology |
|
514 |
|
|
|
535 |
|
Communications |
|
99 |
|
|
|
102 |
|
Insurance |
|
82 |
|
|
|
93 |
|
Professional fees |
|
271 |
|
|
|
275 |
|
Amortization of intangible assets |
|
114 |
|
|
|
114 |
|
Guaranteed student loan servicing |
|
92 |
|
|
|
123 |
|
Merger-related expenses |
|
1,008 |
|
|
|
- |
|
Other |
|
445 |
|
|
|
447 |
|
Total noninterest
expense |
|
7,000 |
|
|
|
5,812 |
|
Income before income
tax |
|
895 |
|
|
|
1,297 |
|
Income tax expense |
|
528 |
|
|
|
376 |
|
Net income |
|
367 |
|
|
|
921 |
|
Preferred stock
dividend |
|
- |
|
|
|
(21 |
) |
Net income available to
common shareholders |
$ |
367 |
|
$ |
|
900 |
|
Earnings per common
share (basic and diluted): |
$ |
0.03 |
|
$ |
|
0.07 |
|
|
|
|
|
|
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS (Unaudited) |
|
|
|
|
|
($ in thousands, except
per share data) |
|
|
|
|
|
|
PERFORMANCE
MEASURES |
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
|
2015 |
|
|
Net interest margin
(1) |
|
3.15 |
% |
|
3.42 |
% |
|
3.25 |
% |
|
3.23 |
% |
|
3.38 |
% |
|
|
3.31 |
% |
|
Return on average
assets (2) |
|
0.14 |
% |
|
0.57 |
% |
|
0.37 |
% |
|
0.33 |
% |
|
0.39 |
% |
|
|
0.42 |
% |
|
Return on average
assets, excluding merger-related costs (5) |
|
0.55 |
% |
|
0.57 |
% |
|
0.37 |
% |
|
0.33 |
% |
|
0.39 |
% |
|
|
0.42 |
% |
|
Return on average
common equity (3) |
|
1.41 |
% |
|
5.94 |
% |
|
3.72 |
% |
|
3.32 |
% |
|
3.73 |
% |
|
|
4.19 |
% |
|
Return on average
common equity, excluding merger-related costs (5) |
|
5.57 |
% |
|
5.94 |
% |
|
3.72 |
% |
|
3.32 |
% |
|
3.73 |
% |
|
|
4.19 |
% |
|
Efficiency ratio
(4) |
|
87 |
% |
|
66 |
% |
|
79 |
% |
|
76 |
% |
|
76 |
% |
|
|
74 |
% |
|
Efficiency ratio,
excluding merger-related costs (5) |
|
74 |
% |
|
66 |
% |
|
79 |
% |
|
76 |
% |
|
76 |
% |
|
|
74 |
% |
|
Net income |
$ |
367 |
|
|
1,511 |
|
|
928 |
|
|
823 |
|
|
921 |
|
|
|
4,183 |
|
|
Earnings per common
share (basic) |
$ |
0.03 |
|
|
0.12 |
|
|
0.07 |
|
|
0.06 |
|
|
0.07 |
|
|
|
0.32 |
|
|
Earnings per common
share (diluted) |
$ |
0.03 |
|
|
0.11 |
|
|
0.07 |
|
|
0.06 |
|
|
0.07 |
|
|
|
0.31 |
|
|
Earnings per common
share, excluding merger-related costs (basic) (5) |
$ |
0.11 |
|
|
0.12 |
|
|
0.07 |
|
|
0.06 |
|
|
0.07 |
|
|
|
0.32 |
|
|
Earnings per common
share, excluding merger-related costs (diluted) (5) |
$ |
0.11 |
|
|
0.11 |
|
|
0.07 |
|
|
0.06 |
|
|
0.07 |
|
|
|
0.31 |
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1) Net interest margin is net interest income divided by
average interest-earning assets. |
|
(2) Return on average assets is net income for the respective
period (annualized for quarter periods) divided by average assets
for the respective period. |
|
(3) Return on average common equity is net income for the
respective period (annualized for quarter periods) divided by
average common equity for the respective period. |
|
(4) Efficiency ratio is noninterest expense divided by the sum
of net interest income and noninterest income. |
|
(5) Non-GAAP financial measure. See discussion of
non-GAAP financial measures below. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
MEASURES |
Quarter Ended |
|
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
|
|
Net charge-offs as a
percentage of average loans (year to date) |
|
0.06 |
% |
|
0.18 |
% |
|
0.09 |
% |
|
0.07 |
% |
|
0.04 |
% |
|
|
|
Allowance for loan and
lease losses (ALLL) as a percentage of loans (1) |
|
0.91 |
% |
|
0.94 |
% |
|
0.93 |
% |
|
0.89 |
% |
|
0.85 |
% |
|
|
|
ALLL as a percentage of
loans excluding guaranteed student loans (2) |
|
0.96 |
% |
|
1.01 |
% |
|
1.00 |
% |
|
0.97 |
% |
|
0.92 |
% |
|
|
|
ALLL plus remaining
discounts (credit-related fair value adjustments) on acquired loans
as a percentage of gross loans (3) |
|
1.31 |
% |
|
1.42 |
% |
|
1.55 |
% |
|
1.56 |
% |
|
1.58 |
% |
|
|
|
ALLL to nonaccrual
loans (1) |
|
88.31 |
% |
|
88.83 |
% |
|
104.70 |
% |
|
100.01 |
% |
|
82.78 |
% |
|
|
|
Nonperforming assets as
a percentage of loans |
|
1.11 |
% |
|
1.13 |
% |
|
1.01 |
% |
|
1.04 |
% |
|
1.18 |
% |
|
|
|
Nonperforming assets as
a percentage of total assets |
|
0.85 |
% |
|
0.85 |
% |
|
0.79 |
% |
|
0.81 |
% |
|
0.90 |
% |
|
|
|
Troubled debt
restructurings |
$ |
5,933 |
|
|
6,822 |
|
|
7,929 |
|
|
7,387 |
|
|
5,031 |
|
|
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1) ALLL excludes discounts (fair value adjustments) on
acquired loans. |
|
|
|
|
|
|
(2) Ratio is a non-GAAP financial measure calculated as ALLL,
excluding the portion of ALLL attributable to guaranteed student
loans, divided by gross loans excluding guaranteed student
loans. See discussion of non-GAAP financial measures
below. |
|
|
|
(3) Ratio is a non-GAAP financial measure calculated as the
sum of ALLL and discounts (credit-related fair value adjustments)
on acquired loans divided by the sum of gross loans and discounts
on loans. See discussion of non-GAAP financial measures
below. |
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
MEASURES |
Quarter Ended |
|
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
|
|
Common Equity Tier 1
capital ratio - Consolidated |
|
9.82 |
% |
|
9.91 |
% |
|
10.13 |
% |
|
10.11 |
% |
|
10.23 |
% |
|
|
|
Common Equity Tier 1
capital ratio - Bank only |
|
11.77 |
% |
|
11.87 |
% |
|
12.15 |
% |
|
12.12 |
% |
|
11.34 |
% |
|
|
|
Tier 1 risk-based
capital ratio - Consolidated |
|
9.82 |
% |
|
9.91 |
% |
|
10.13 |
% |
|
10.11 |
% |
|
11.23 |
% |
|
|
|
Tier 1 risk-based
capital ratio - Bank only |
|
11.77 |
% |
|
11.87 |
% |
|
12.15 |
% |
|
12.12 |
% |
|
12.24 |
% |
|
|
|
Total risk-based
capital ratio - Consolidated |
|
11.57 |
% |
|
11.71 |
% |
|
11.98 |
% |
|
11.96 |
% |
|
12.00 |
% |
|
|
|
Total risk-based
capital ratio - Bank only |
|
12.60 |
% |
|
12.74 |
% |
|
13.03 |
% |
|
12.98 |
% |
|
13.02 |
% |
|
|
|
Tier 1 leverage ratio -
Consolidated |
|
8.55 |
% |
|
8.58 |
% |
|
8.78 |
% |
|
8.86 |
% |
|
10.11 |
% |
|
|
|
Tier 1 leverage ratio -
Bank only |
|
10.24 |
% |
|
10.28 |
% |
|
10.53 |
% |
|
10.64 |
% |
|
11.04 |
% |
|
|
|
Book value per common
share (1) |
$ |
8.04 |
|
|
7.90 |
|
|
7.76 |
|
|
7.59 |
|
|
7.60 |
|
|
|
|
Tangible book value per
common share (2) |
$ |
6.85 |
|
|
6.69 |
|
|
6.54 |
|
|
6.37 |
|
|
6.37 |
|
|
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1) Book value per common share is total shareholders' equity
less preferred stock divided by common shares outstanding at the
end of the respective period. |
|
(2) Tangible book value per common share is a non-GAAP
financial measure calculated as total shareholders' equity less the
sum of preferred stock and goodwill and other intangible assets
divided by common shares outstanding at the end of the respective
period. See discussion of non-GAAP financial measures
below. |
|
|
|
|
|
|
|
|
|
|
AVERAGE
BALANCES (1) |
Quarter Ended |
|
Year Ended |
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
|
2015 |
|
|
Total assets |
$ |
1,066,407 |
|
|
1,055,546 |
|
|
1,009,981 |
|
|
989,210 |
|
|
940,892 |
|
|
|
999,252 |
|
|
Average
interest-earning assets |
$ |
1,000,949 |
|
|
980,715 |
|
|
939,945 |
|
|
922,313 |
|
|
876,328 |
|
|
|
930,138 |
|
|
Loans, net of allowance
for loan and lease losses |
$ |
748,178 |
|
|
760,724 |
|
|
758,972 |
|
|
749,294 |
|
|
743,829 |
|
|
|
753,267 |
|
|
Total deposits |
$ |
917,144 |
|
|
906,387 |
|
|
862,050 |
|
|
841,630 |
|
|
794,197 |
|
|
|
851,404 |
|
|
Shareholders'
equity |
$ |
104,397 |
|
|
101,673 |
|
|
99,888 |
|
|
107,484 |
|
|
107,044 |
|
|
|
103,996 |
|
|
Common shareholders'
equity |
$ |
104,397 |
|
|
101,673 |
|
|
99,888 |
|
|
99,195 |
|
|
98,663 |
|
|
|
99,806 |
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1) Average balances
are computed on a daily basis. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
END OF PERIOD
BALANCES |
Quarter Ended |
|
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
|
|
Total assets |
$ |
1,021,042 |
|
|
1,039,496 |
|
|
970,988 |
|
|
993,073 |
|
|
992,737 |
|
|
|
|
Loans, net of allowance
for loan and lease losses |
$ |
772,044 |
|
|
772,178 |
|
|
753,466 |
|
|
761,140 |
|
|
750,957 |
|
|
|
|
Total deposits |
$ |
872,261 |
|
|
889,030 |
|
|
824,523 |
|
|
847,605 |
|
|
843,399 |
|
|
|
|
Shareholders'
equity |
$ |
105,492 |
|
|
102,689 |
|
|
100,772 |
|
|
98,715 |
|
|
107,096 |
|
|
|
|
Common shareholders'
equity |
$ |
105,492 |
|
|
102,689 |
|
|
100,772 |
|
|
98,715 |
|
|
98,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
Earnings per
share effect of merger-related costs (1) |
|
2016 |
|
|
|
|
|
|
|
|
Income before income
tax |
$ |
895 |
|
|
|
|
|
|
|
|
Add: merger-related costs |
$ |
1,008 |
|
|
|
|
|
|
|
|
Income before income
tax, excluding merger-related costs |
$ |
1,903 |
|
|
|
|
|
|
|
|
Income tax expense
(2) |
$ |
457 |
|
|
|
|
|
|
|
|
Net income available to
common shareholders, excluding merger-related costs |
$ |
1,446 |
|
|
|
|
|
|
|
|
Weighted average shares
outstanding, basic |
|
13,209 |
|
|
|
|
|
|
|
|
Weighted average shares
outstanding, diluted |
|
13,443 |
|
|
|
|
|
|
|
|
Earnings per common
share, excluding merger-related costs (basic and diluted) |
$ |
0.11 |
|
|
|
|
|
|
|
|
Earnings per common
share (basic and diluted) |
$ |
0.03 |
|
|
|
|
|
|
|
|
Earnings per common
share effect of merger-related costs (basic and diluted) |
$ |
0.08 |
|
|
|
|
|
|
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1)
Merger-related costs impacted the quarter ended March 31, 2016
only. |
(2)
Assumes an annual effective tax rate of 24%, which approximates the
company's effective tax rate if no merger-related costs had
been incurred. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
Return on
average assets and return on average common equity, excluding
merger-related costs (1) |
March 31, 2016 |
|
|
|
|
|
|
|
Net income available to
common shareholders, excluding merger-related costs |
$ |
1,446 |
|
|
|
|
|
|
|
|
Average total
assets |
$ |
1,066,407 |
|
|
|
|
|
|
|
|
Average common
shareholders' equity |
$ |
104,397 |
|
|
|
|
|
|
|
|
Return on average
assets, excluding merger-related costs (2) |
|
0.55 |
% |
|
|
|
|
|
|
|
Return on average
common equity, excluding merger-related costs (2) |
|
5.57 |
% |
|
|
|
|
|
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1)
Merger-related costs impacted the quarter ended March 31, 2016
only. |
(2) Net
income available to common shareholders, excluding
merger-related costs for the quarter ended March 31, 2016 has
been annualized for this calculation. |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
|
|
|
Efficiency
ratio, excluding merger-related costs (1) |
March 31, 2016 |
|
|
|
|
|
|
|
Noninterest expense |
$ |
7,000 |
|
|
|
|
|
|
|
|
Deduct: merger-related costs |
$ |
1,008 |
|
|
|
|
|
|
|
|
Noninterest expense,
excluding merger-related costs |
$ |
5,992 |
|
|
|
|
|
|
|
|
Net interest income |
$ |
7,720 |
|
|
|
|
|
|
|
|
Noninterest income |
$ |
365 |
|
|
|
|
|
|
|
|
Efficiency ratio,
excluding merger-related costs |
|
74 |
% |
|
|
|
|
|
|
|
______________________________ |
|
|
|
|
|
|
|
|
(1)
Merger-related costs impacted the quarter ended March 31, 2016
only. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|
|
|
|
|
2016 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
2015 |
|
|
|
|
ALLL as a % of
Loans excluding guaranteed student loans |
|
|
|
|
|
|
|
|
Allowance for loan and
lease losses |
$ |
7,072 |
|
|
7,350 |
|
$ |
7,064 |
|
|
6,849 |
|
|
6,443 |
|
|
|
|
Deduct: ALLL attributable to
guaranteed student loans |
$ |
81 |
|
|
60 |
|
$ |
71 |
|
|
49 |
|
|
71 |
|
|
|
|
ALLL excluding amount
attributable to guaranteed student loans |
$ |
6,991 |
|
|
7,290 |
|
$ |
6,993 |
|
|
6,800 |
|
|
6,372 |
|
|
|
|
Gross loans |
$ |
779,116 |
|
|
779,528 |
|
$ |
760,530 |
|
|
767,989 |
|
|
757,400 |
|
|
|
|
Deduct: Guaranteed student
loans |
$ |
53,674 |
|
|
57,308 |
|
$ |
61,388 |
|
|
64,236 |
|
|
67,977 |
|
|
|
|
Gross loans, excluding
guaranteed student loans |
$ |
725,442 |
|
|
722,220 |
|
$ |
699,142 |
|
|
703,753 |
|
|
689,423 |
|
|
|
|
ALLL as a percentage of
gross loans, excluding guaranteed student loans |
|
0.96 |
% |
|
1.01 |
% |
|
1.00 |
% |
|
0.97 |
% |
|
0.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ALLL + Discount
/ Gross Loans |
|
|
|
|
|
|
|
|
Allowance for loan and
lease losses |
$ |
7,072 |
|
|
7,350 |
|
$ |
7,064 |
|
|
6,849 |
|
|
6,443 |
|
|
|
|
Add: Discounts
(credit-related fair value adjustments) on acquired loans |
$ |
3,184 |
|
|
3,779 |
|
$ |
4,836 |
|
|
5,207 |
|
|
5,606 |
|
|
|
|
Total ALLL + discounts
on acquired loans |
$ |
10,256 |
|
|
11,129 |
|
$ |
11,900 |
|
|
12,056 |
|
|
12,049 |
|
|
|
|
Gross loans + discounts
(credit-related fair value adjustments) on acquired loans |
$ |
782,300 |
|
|
783,307 |
|
$ |
765,366 |
|
|
773,196 |
|
|
763,006 |
|
|
|
|
ALLL plus discounts
(credit-related fair value adjustments) on acquired loans as a
percentage of gross loans |
|
1.31 |
% |
|
1.42 |
% |
|
1.55 |
% |
|
1.56 |
% |
|
1.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book
value per common share |
|
|
|
|
|
|
|
|
Total shareholders'
equity |
$ |
105,492 |
|
|
102,689 |
|
$ |
100,772 |
|
|
98,715 |
|
|
107,096 |
|
|
|
|
Deduct: Preferred stock |
$ |
- |
|
|
- |
|
$ |
- |
|
|
- |
|
|
8,381 |
|
|
|
|
Common shareholders'
equity |
$ |
105,492 |
|
|
102,689 |
|
$ |
100,772 |
|
|
98,715 |
|
|
98,715 |
|
|
|
|
Deduct: Goodwill and other
intangible assets, net |
$ |
15,571 |
|
|
15,686 |
|
$ |
15,800 |
|
|
15,916 |
|
|
16,029 |
|
|
|
|
Tangible common
shareholders' equity |
$ |
89,921 |
|
|
87,003 |
|
$ |
84,972 |
|
|
82,799 |
|
|
82,686 |
|
|
|
|
Common shares
outstanding |
|
13,129 |
|
|
12,997 |
|
|
12,989 |
|
|
12,998 |
|
|
12,990 |
|
|
|
|
Tangible book value per
common share |
$ |
6.85 |
|
|
6.69 |
|
$ |
6.54 |
|
|
6.37 |
|
|
6.37 |
|
|
|
|
______________________________ |
|
|
|
|
|
|
|
|
Return on average assets, excluding merger-related costs,
return on average common equity, excluding merger-related costs,
efficiency ratio, excluding merger-related costs, and earnings per
share, excluding merger-related costs are non-GAAP financial
measures and are not required by or presented in accordance with
GAAP. Management believes that these measures excluding
merger-related costs are meaningful as they present the performance
of the company without the additive merger costs that are
non-recurring and would not be incurred if the company were not
contemplating the HRB Merger. Allowance for loan and lease losses
(ALLL) as a percentage of gross loans excluding guaranteed student
loans, ALLL plus discounts on acquired loans as a percentage of
gross loans, and tangible book value per share are supplemental
financial measures that are not required by, or presented in
accordance with, U.S. GAAP. Management believes that ALLL as
a percentage of gross loans excluding guaranteed student loans, and
ALLL plus discounts on acquired loans as a percentage of gross
loans are meaningful because they are two measures management uses
to assess asset quality. Management believes that tangible
book value per common share is meaningful because it is one of the
measures management uses to assess capital adequacy. Set
forth above are reconciliations of each of these non-GAAP financial
measures calculated and reported in accordance with GAAP.
Book value is the same as shareholders' equity presented on
consolidated balance sheets. Calculations of these non-GAAP
financial measures may not be comparable to the calculation of
similarly titled measures reported by other companies. |
|
|
|
|
|
|
|
|
|
Contact:
Thomas W. Osgood
Executive Vice President, Chief Financial Officer,
Chief Administrative Officer and Treasurer
(804) 433-2209
tosgood@xenithbank.com
Xenith Bankshares, Inc. NEW (NASDAQ:XBKS)
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