UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 28, 2015
AUBURN
NATIONAL BANCORPORATION, INC.
(Exact Name of Registrant as Specified in Charter)
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Delaware |
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0-26486 |
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63-0885779 |
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(State or Other Jurisdiction
of Incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
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100 North Gay Street, P.O. Drawer 3110, Auburn, Alabama 36831-3110
(Addresses of Principal Executive Offices, including Zip Code)
(334) 821-9200
(Registrants Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
The information, including the exhibits attached hereto, in this Current
Report on Form 8-K is being furnished and shall not be deemed filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The
information in this Current Report shall not be incorporated by reference into any registration statement or other document filed by the Company pursuant to the Securities Act of 1933, as amended, or into any other filing or document made by the
Company pursuant to the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.
Attached and incorporated herein by reference as Exhibit 99.1 is a copy of the press release of Auburn National Bancorporation, Inc., dated
July 28, 2015, reporting the Companys financial results for the quarter and six months ended June 30, 2015.
Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) |
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Exhibits. The following exhibit is furnished herewith: |
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Exhibit No. |
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Exhibit Description |
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99.1 |
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Press Release, dated July 28, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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AUBURN NATIONAL BANCORPORATION, INC. |
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(Registrant) |
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/s/ E.L. Spencer, Jr. |
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E.L. Spencer, Jr. |
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Chairman, President and Chief Executive Officer |
Date: July 28, 2015
EXHIBIT INDEX
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Exhibit No. |
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Exhibit Description |
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99.1 |
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Press Release, dated July 28, 2015 |
Exhibit 99.1
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For additional information, contact: E.L.
Spencer, Jr. President, CEO and Chairman of the Board
(334) 821-9200 |
Press Release July 28, 2015
Auburn National Bancorporation, Inc. Reports Record Quarterly Net Earnings
Second Quarter 2015 Highlights:
● |
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Record quarterly net earnings of $2.2 million, or $0.59 per share |
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Earnings per share increased 16% compared to second quarter 2014 |
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Net interest income (tax-equivalent) increased 10% compared to second quarter 2014 |
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Interest recoveries of $225 thousand realized on payoff of two impaired loans |
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Average loans increased $23.5 million or 6% compared to second quarter 2014 |
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Annualized net recoveries as a % of average loans were 0.16% compared to 0.02% in second quarter 2014 |
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Nonperforming assets were 0.23% of total assets at June 30, 2015 compared to 0.57% a year earlier |
AUBURN, Alabama Auburn National Bancorporation, Inc. (Nasdaq: AUBN) reported record quarterly net earnings of $2.2 million, or $0.59
per share, for the second quarter of 2015, compared to $1.9 million, or $0.51 per share, for the second quarter of 2014. Net earnings for the first six months of 2015 were $4.0 million, or $1.10 per share, compared to $3.7 million, or $1.01 per
share, for the first six months of 2014.
In addition to the interest recoveries on two problem loans, the Companys record
quarterly results reflect solid loan growth, strong asset quality, and improved net interest margin, said E.L. Spencer, Jr., President, CEO and Chairman of the Board.
Net interest income (tax-equivalent) was $6.1 million for the second quarter of 2015, an increase of 10% compared to the second quarter of
2014. This increase reflects managements efforts to increase earnings by shifting the Companys asset mix through loan growth, focusing on deposit pricing, and repaying higher-cost wholesale funding. Net interest income (tax-equivalent)
for the second quarter of 2015 included $0.2 million in recoveries of interest related to payoffs received on two previously impaired loans. Excluding the impact of these recoveries, net interest income (tax-equivalent) would have been $5.9 million
for the second quarter of 2015, an increase of 6% compared to the second quarter of 2014. Average loans were $402.5 million in the second quarter of 2015, an increase of $23.5 million or 6%, from the second quarter of 2014. Average deposits were
$699.5 million in the second quarter of 2015, an increase of $14.9 million or 2%, from the first six months of 2014.
Nonperforming assets
were $1.9 million, or 0.23% of total assets, at June 30, 2015, compared to $4.4 million, or 0.57% of total assets, at June 30, 2014. Annualized net recoveries were 0.16% of average loans for the second quarter of 2015, compared to 0.02% of
average loans for the second quarter of 2014. The Company recorded no provision for loan losses in the second quarter of 2015 and 2014. Provision expense reflects the absolute level of loans, loan growth, the credit quality of the loan portfolio,
and the amount of net charge-offs. Our allowance for loan losses was 360% of nonperforming loans and 1.20% of total loans at June 30, 2015, compared to 169% of nonperforming loans and 1.23% of total loans at June 30, 2014.
Noninterest income was $1.2 million for the second quarter of 2015, compared to $1.1 million in the second quarter of 2014. The increase was
primarily due to an increase in mortgage lending income of $0.1 million. The increase in mortgage lending income was primarily due to an increase in origination income and a decrease in the mortgage servicing rights (MSR) valuation
allowance. These improvements were partially offset by a decrease in servicing fees, net of related amortization expense. Although servicing fees were largely unchanged, amortization expense increased as mortgage refinance activity resulted in
faster prepayment speeds.
-more-
Reports Record Quarterly Net Earnings/page
2
Noninterest expense was $4.0 million in the second quarter of 2015, compared to $3.8 million
in the second quarter of 2014. The increase was primarily due to an increase in net expenses related to OREO of $0.1 million and an increase in other noninterest expense of $0.1 million. OREO expense, net increased compared to the second quarter of
2014 primarily due to gains realized on the sale of certain OREO properties in the second quarter of 2014.
Income tax expense was $0.8
million for the second quarter of 2015, compared to $0.7 million for the second quarter of 2014. The Companys income tax expense for the second quarter of 2015 reflects an effective income tax rate of 26.52%, compared to 26.87% for the second
quarter of 2014. The Companys income tax expense is principally impacted by tax-exempt earnings on municipal securities investments and bank-owned life insurance.
The Company paid cash dividends of $0.22 per share in the second quarter of 2015, an increase of 2.3% from the same period in 2014. At
June 30, 2015, the Banks regulatory capital was well above the minimum amounts required to be well capitalized under current regulatory standards.
About Auburn National Bancorporation, Inc.
Auburn National Bancorporation, Inc. (the Company) is the parent company of AuburnBank (the Bank), with total assets
of approximately $806 million. The Bank is an Alabama state-chartered bank that is a member of the Federal Reserve System and has operated continuously since 1907. Both the Company and the Bank are headquartered in Auburn, Alabama. The Bank conducts
its business in East Alabama, including Lee County and surrounding areas. The Bank operates full-service branches in Auburn, Opelika, Valley, Hurtsboro and Notasulga, Alabama. In-store branches are located in the Kroger in Opelika and Wal-Mart
SuperCenter stores in both Auburn and Opelika. The Bank also operates a commercial loan production office in Phenix City, Alabama. Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.
Cautionary
Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, costs and revenues, economic conditions in our markets, loan demand, mortgage lending
activity, changes in the mix of our earning assets (including those generating tax exempt income) and our deposit liabilities, net interest margin, yields on earning assets, securities valuations and performance, interest rates (generally and those
applicable to our assets and liabilities), loan performance, nonperforming assets, other real estate owned, loan losses, charge-offs, other-than-temporary impairments, collateral values, credit quality, asset sales, and market trends, as well as
statements with respect to our objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements, with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions,
involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, achievements, or financial condition of the Company or the Bank to be materially different from
future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice,
together with those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2014 and otherwise in our other SEC reports and filings.
Explanation of Certain Unaudited Non-GAAP Financial Measures
This press release contains financial information determined by methods other than U.S. generally accepted accounting principles
(GAAP). The attached financial highlights include certain designated net interest income amounts presented on a tax-equivalent basis, a non-GAAP financial measure, including the presentation and calculation of the efficiency ratio.
Management uses these non-GAAP financial measures in its analysis of the Companys performance and believes the presentation of net interest income on a tax-equivalent basis provides comparability of net interest income from both taxable and
tax-exempt sources and facilitates comparability within the industry. Although the Company believes these non-GAAP financial measures enhance investors understanding of its business and performance, these non-GAAP financial measures should not
be considered an alternative to GAAP. Along with the attached financial highlights, the Company provides reconciliations between the GAAP financial measures and these non-GAAP financial measures.
-more-
Reports Record Quarterly Net Earnings/page
3
Financial Highlights (unaudited)
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Quarter ended June 30, |
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Six Months Ended June 30, |
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(Dollars in thousands, except per share amounts) |
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2015 |
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2014 |
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2015 |
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2014 |
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Results of Operations |
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Net interest income (a) |
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$ |
6,126 |
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$ |
5,565 |
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$ |
11,984 |
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$ |
11,159 |
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Less: tax-equivalent adjustment |
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338 |
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312 |
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673 |
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636 |
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Net interest income (GAAP) |
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5,788 |
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5,253 |
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11,311 |
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10,523 |
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Noninterest income |
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1,167 |
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1,081 |
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2,488 |
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1,837 |
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Total revenue |
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6,955 |
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6,334 |
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13,799 |
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12,360 |
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Provision for loan losses |
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(400) |
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Noninterest expense |
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4,029 |
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3,792 |
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8,343 |
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7,740 |
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Income tax expense |
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776 |
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683 |
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1,444 |
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1,340 |
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Net earnings |
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$ |
2,150 |
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$ |
1,859 |
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$ |
4,012 |
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$ |
3,680 |
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Per share data: |
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Basic and diluted net earnings: |
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$ |
0.59 |
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$ |
0.51 |
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$ |
1.10 |
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$ |
1.01 |
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Cash dividends declared |
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$ |
0.22 |
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$ |
0.215 |
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$ |
0.44 |
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$ |
0.43 |
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Weighted average shares outstanding: |
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Basic and diluted |
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3,643,413 |
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3,643,295 |
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3,643,389 |
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3,643,228 |
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Shares outstanding, at period end |
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3,643,428 |
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3,643,328 |
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3,643,428 |
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3,643,328 |
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Book value |
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$ |
21.15 |
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$ |
19.84 |
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$ |
21.15 |
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$ |
19.84 |
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Common stock price: |
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High |
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$ |
25.75 |
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$ |
25.00 |
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$ |
25.75 |
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$ |
25.80 |
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Low |
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24.51 |
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22.90 |
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23.15 |
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22.90 |
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Period-end: |
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25.73 |
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24.02 |
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25.73 |
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24.02 |
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To earnings ratio |
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12.08 |
x |
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12.19 |
x |
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12.08 |
x |
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12.19 |
x |
To book value |
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122 |
% |
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|
121 |
% |
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|
122 |
% |
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|
121 |
% |
Performance ratios: |
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Return on average equity (annualized) |
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10.91 |
% |
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10.72 |
% |
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|
10.31 |
% |
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|
10.91 |
% |
Return on average assets (annualized) |
|
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1.09 |
% |
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0.96 |
% |
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|
1.01 |
% |
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|
0.96 |
% |
Dividend payout ratio |
|
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37.29 |
% |
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42.16 |
% |
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40.00 |
% |
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42.57 |
% |
Other financial data: |
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Net interest margin (a) |
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3.29 |
% |
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3.09 |
% |
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3.22 |
% |
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3.14 |
% |
Effective income tax rate |
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26.52 |
% |
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26.87 |
% |
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26.47 |
% |
|
|
26.69 |
% |
Efficiency ratio (b) |
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55.24 |
% |
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57.06 |
% |
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57.65 |
% |
|
|
59.56 |
% |
Asset Quality: |
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Nonperforming assets: |
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Nonperforming (nonaccrual) loans |
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$ |
1,359 |
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$ |
2,804 |
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$ |
1,359 |
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$ |
2,804 |
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Other real estate owned |
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|
499 |
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1,584 |
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499 |
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1,584 |
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Total nonperforming assets |
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$ |
1,858 |
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$ |
4,388 |
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$ |
1,858 |
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$ |
4,388 |
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Net (recoveries) charge-offs |
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$ |
(164) |
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$ |
(17) |
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$ |
(50) |
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$ |
140 |
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Allowance for loan losses as a % of: |
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Loans |
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1.20 |
% |
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|
1.23 |
% |
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1.20 |
% |
|
|
1.23 |
% |
Nonperforming loans |
|
|
360 |
% |
|
|
169 |
% |
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|
360 |
% |
|
|
169 |
% |
Nonperforming assets as a % of: |
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Loans and other real estate owned |
|
|
0.45 |
% |
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|
1.13 |
% |
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|
0.45 |
% |
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|
1.13 |
% |
Total assets |
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|
0.23 |
% |
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|
0.57 |
% |
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|
0.23 |
% |
|
|
0.57 |
% |
Nonperforming loans as a % of total loans |
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|
0.33 |
% |
|
|
0.73 |
% |
|
|
0.33 |
% |
|
|
0.73 |
% |
Net (recoveries) charge-offs as % of avg. loans (c) |
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|
(0.16) |
% |
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(0.02) |
% |
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|
(0.02) |
% |
|
|
0.07 |
% |
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|
Selected average balances: |
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Securities |
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$ |
259,376 |
|
|
$ |
274,305 |
|
|
$ |
261,809 |
|
|
$ |
271,177 |
|
Loans, net of unearned income |
|
|
402,482 |
|
|
|
378,994 |
|
|
|
401,327 |
|
|
|
378,163 |
|
Total assets |
|
|
791,889 |
|
|
|
772,326 |
|
|
|
796,947 |
|
|
|
767,268 |
|
Total deposits |
|
|
699,453 |
|
|
|
684,613 |
|
|
|
702,582 |
|
|
|
681,487 |
|
Long-term debt |
|
|
7,217 |
|
|
|
12,217 |
|
|
|
9,372 |
|
|
|
12,217 |
|
Total stockholders equity |
|
|
78,791 |
|
|
|
69,367 |
|
|
|
77,858 |
|
|
|
67,472 |
|
Selected period end balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
$ |
252,906 |
|
|
$ |
276,953 |
|
|
$ |
252,906 |
|
|
$ |
276,953 |
|
Loans, net of unearned income |
|
|
408,495 |
|
|
|
385,826 |
|
|
|
408,495 |
|
|
|
385,826 |
|
Allowance for loan losses |
|
|
4,886 |
|
|
|
4,728 |
|
|
|
4,886 |
|
|
|
4,728 |
|
Total assets |
|
|
806,233 |
|
|
|
775,128 |
|
|
|
806,233 |
|
|
|
775,128 |
|
Total deposits |
|
|
715,994 |
|
|
|
684,181 |
|
|
|
715,994 |
|
|
|
684,181 |
|
Long-term debt |
|
|
7,217 |
|
|
|
12,217 |
|
|
|
7,217 |
|
|
|
12,217 |
|
Total stockholders equity |
|
|
77,053 |
|
|
|
72,291 |
|
|
|
77,053 |
|
|
|
72,291 |
|
(a) Tax equivalent. See Explanation of Certain Unaudited Non-GAAP Financial Measures and
Reconciliation of GAAP to non-GAAP Measures (unaudited).
(b) |
Efficiency ratio is the result of operating noninterest expense divided by the sum of operating noninterest income and tax-equivalent net interest income. |
(c) |
Net (recoveries) charge-offs are annualized. |
Reports Record Quarterly Net Earnings/page 4
Reconciliation of GAAP to non-GAAP Measures (unaudited):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
|
Six Months Ended June 30, |
|
(Dollars in thousands, except per share amounts) |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
Net interest income, as reported (GAAP) |
|
$ |
5,788 |
|
|
$ |
5,253 |
|
|
$ |
11,311 |
|
|
$ |
10,523 |
|
Tax-equivalent adjustment |
|
|
338 |
|
|
|
312 |
|
|
|
673 |
|
|
|
636 |
|
|
|
Net interest income (tax-equivalent) |
|
$ |
6,126 |
|
|
$ |
5,565 |
|
|
$ |
11,984 |
|
|
$ |
11,159 |
|
|
|
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