Eastern Virginia Bankshares, Inc. Releases Second Quarter 2016 Results

TAPPAHANNOCK, Va., July 25, 2016

Performance Summary

				Three Months Ended June 30,
(dollars in thousands, except per share data)				2016		2015
Net income (1) ARIVA.DE Börsen-Geflüster Kurse Eastn Virg. Bankshs -   0,00%				$                 1,910		$                1,507
Net income available to common shareholders (1)				$                 1,910		$                1,341
Basic and diluted net income per common share				$                   0.11		$                  0.07
Return on average assets (annualized)				0.59%		0.45%
Return on average common shareholders' equity (annualized)				6.97%		5.29%
Net interest margin (tax equivalent basis)(2)				3.71%		3.93%
				Six Months Ended June 30,
(dollars in thousands, except per share data)				2016		2015
Net income (1)				$                 4,137		$                3,116
Net income available to common shareholders (1)				$                 4,137		$                2,730
Basic and diluted net income per common share				$                   0.23		$                  0.15
Return on average assets (annualized)				0.65%		0.46%
Return on average common shareholders' equity (annualized)				7.65%		5.46%
Net interest margin (tax equivalent basis)(2)				3.74%		3.97%
(1) The difference between net income and net income available to common shareholders is the effective dividend to holders of the Company's Series A Preferred Stock paid during the 2015 periods.
(2) For more information on the calculation of net interest margin on a tax equivalent basis, see the average balance sheet and net interest margin analysis for the three and six month periods ended  June 30, 2016 and 2015 contained in this release.

The Company's results for the three and six months ended June 30, 2016 were directly impacted by increases in the average balances of loans, deposits, short-term borrowings and senior subordinated debt during the three and six months ended June 30, 2016 as compared to the same periods in 2015.  Loan yields declined 23 and 18 basis points for the three and six months ended June 30, 2016 as compared to the same periods in 2015, with 13 and 9 basis points, respectively, of the decline resulting from the lower accretion of fair value adjustments related to the acquisition of Virginia Company Bank ("VCB") in November 2014.  Also, as previously disclosed, the Company engaged an independent consultant to conduct a comprehensive assessment of its operations during the first half of 2015.  The assessment identified operating efficiencies and revenue enhancement opportunities.  The Company has leveraged the assessment's findings, and since the second half of 2015, has continued to realize targeted increases in revenues and declines in certain noninterest expenses, particularly salaries and employee benefits expense.

In announcing these results, Joe A. Shearin, President and Chief Executive Officer commented, "I am pleased with our Company's results during the first half of 2016 and the continued company-wide focus to grow our balance sheet, improve profitability and enhance the quality of products and services we offer to our customers. For the first six months of 2016, as compared to the same period of 2015, we are reporting an increase in net income available to common shareholders of 51.5%, an increase in annualized return on average assets of 19 basis points to 0.65%, and an increase in annualized return on average common shareholders' equity of 219 basis points to 7.65%.  Net income declined during the second quarter of 2016 as compared to the first quarter of 2016 and was primarily driven by a lower net interest margin and higher current period expenses.  The lower net interest margin was driven by lower loan yields as a result of competitive pressures in the historically low rate environment.  In addition, loan growth was lower than expected during the second quarter of 2016 and was driven primarily by the payoff of several large commercial loans late in the period.  Despite this, we have generated loan growth of 3.3% during the first half of 2016 and 8.2% during the last twelve months, which outpaced our internal targets.  Given our current pipeline of loan opportunities and our focus on total relationship banking, we believe that we are poised to deliver quality growth throughout the balance of 2016.  Salaries and employee benefits in the current period were impacted by annual merit increases as well as higher group insurance expense due to claims, while other operating expenses in the current period were impacted by increases in director compensation, legal services related to equity compensation plans, securities and corporate governance matters and shareholder services related to our conversion to a new transfer agent.  Many of the other operating expenses which were elevated this quarter are expected to level off during the remainder of 2016."

Shearin continued, "Last month we made the exciting announcement that we will be relocating our corporate headquarters to the Innsbrook business park in Glen Allen, Virginia in early fall 2016.  Our new corporate headquarters will allow us to integrate corporate departments from other locations throughout our footprint.  Currently, key members of our Executive Leadership Team, as well as other corporate departments, are remotely located in various locations.  We believe this relocation will increase collaboration and productivity and capture operating efficiencies throughout the Company.  Our new headquarters will also provide us the space and flexibility needed to continue to grow and reach new customers.  The main office of EVB will remain in Tappahannock, Virginia and continue our heritage of serving the Northern Neck and Middle Peninsula markets since 1910.  I am also pleased to announce that the Board of Directors declared another cash dividend of $0.02 per share of common stock and Series B Preferred Stock payable August 26, 2016 to shareholders of record as of August 12, 2016."

For the three months ended June 30, 2016, the following were significant factors in the Company's reported results:

• Increase in net interest income of $359 thousand from the same period in 2015, principally due to an increase in interest and fees on loans driven primarily by loan growth, partially offset by increases in interest expense associated with our short-term borrowings and the issuance of $20.0 million in senior subordinated debt during the second quarter of 2015;
• Net interest margin (tax equivalent basis) decreased 22 basis points to 3.71% during the second quarter of 2016 as compared to 3.93% for the same period of 2015 primarily due to a decline in yields on the loan portfolio and the impact of interest incurred on the senior subordinated debt;
• Net accretion attributable to accounting adjustments related to the VCB acquisition was $61 thousand for the second quarter of 2016, as compared to $223 thousand in the same period of 2015;
• Nonperforming assets at June 30, 2016 increased $2.0 million from March 31, 2016, primarily due to a $1.4 million increase in loans past due 90 days and accruing interest (of which the majority of this increase came from a single purchased credit-impaired loan that is well secured) and a $1.4 million increase in other real estate owned (of which the majority of this increase came from foreclosures on several one to four family residential investment properties owned by a single borrower), partially offset by a $819 thousand decrease in nonaccrual loans;
• Net gain on sale of available for sale securities of $172 thousand as compared to $26 thousand in the same period of 2015 were higher due to the adjustments of the composition of the investment securities portfolio as part of our overall asset/liability management strategy;
• Decrease in salaries and employee benefits of $37 thousand from the same period in 2015, primarily due to reductions in staff levels during 2015 and 2016 that were driven by operating efficiencies identified in the aforementioned comprehensive assessment of our operations, partially offset by increased group insurance expense from increased claims activity during the second quarter of 2016;
• Decrease in FDIC expense due to billing adjustments in the prior year related to the VCB acquisition;
• Increased collection, repossession and other real estate owned expense of $41 thousand from the same period in 2015 due to increased collections costs associated with classified assets; and
• No effective dividend on preferred stock in the second quarter of 2016 as compared to $166 thousand from the same period of 2015.  This was due to the redemption of the remaining 9,000 shares of the Company's Series A Preferred Stock in a transaction completed during the second quarter of 2015.

For the six months ended June 30, 2016, the following were significant factors in the Company's reported results:

• Increase in net interest income of $800 thousand from the same period in 2015, principally due to an increase in interest and fees on loans driven primarily by loan growth, partially offset by an increase in interest expense associated with our short-term borrowings and the issuance of $20.0 million in senior subordinated debt during the second quarter of 2015;
• Net interest margin (tax equivalent basis) decreased 23 basis points to 3.74% during the six months ended June 30, 2016 as compared to 3.97% for the same period of 2015 primarily due to a decline in yields on the loan portfolio and the impact of interest incurred on the senior subordinated debt;
• Nonperforming assets at June 30, 2016 increased $2.8 million from December 31, 2015, primarily due to a $1.5 million increase in loans past due 90 days and accruing interest (of which the majority of this increase came from a single purchased credit-impaired loan this is well secured) and a $1.8 million increase in other real estate owned (of which the majority of this increase came from foreclosures on several one to four family residential investment properties owned by a single borrower).  Nonperforming assets at June 30, 2016 increased $1.8 million from June 30, 2015, primarily due to a $2.3 million increase in loans past due 90 days and accruing interest and a $936 thousand increase in other real estate owned, partially offset by a decrease of $1.5 million in nonaccrual loans.  The increase in loans past due 90 days and accruing interest was due to the nonpayment of a large one to four family residential real estate loan and a large non-farm, non-residential real estate loan as a result of the deteriorating financial condition of the borrowers;
• Net gain on sale of available for sale securities of $237 thousand as compared to $51 thousand in the same period of 2015 were higher due to the adjustments of the composition of the investment securities portfolio as part of our overall asset/liability management strategy;
• Increased collection, repossession and other real estate owned expense of $117 thousand from the same period in 2015 due to increased collections costs associated with classified assets;
• Decrease in merger and merger related expenses of $224 thousand due to certain costs incurred during the first quarter of 2015 associated with the VCB acquisition that were not repeated in 2016; and
• No effective dividend on preferred stock in the first six months of 2016 as compared to $386 thousand from the same period of 2015.  This was due to the redemption of the remaining 14,000 shares of the Company's Series A Preferred Stock in transactions completed during the first half of 2015.

Operations Analysis

The following tables present average balances of assets and liabilities, the average yields earned on such assets (on a tax equivalent basis) and rates paid on such liabilities, and the net interest margin for the three and six months ended June 30, 2016 and 2015:

Average Balance Sheet and Net Interest Margin Analysis
(dollars in thousands)
	Three Months Ended June 30,
	2016					2015
	Average		Income/	Yield/		Average		Income/	Yield/
	Balance		Expense	Rate (1)		Balance		Expense	Rate (1)
Assets:
Securities
Taxable	$      259,530		$         1,463	2.27%		$     221,747		$         1,185	2.14%
Restricted securities	9,096		127	5.62%		7,198		96	5.35%
Tax exempt (2)	3,754		34	3.59%		38,794		385	3.99%
Total securities	272,380 Werbung Mehr Nachrichten zur Eastn Virg. Bankshs Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 06.05.24 - ARIVA.DE Redaktion Aktien USA: S&P 500 profitiert gegenwärtig leicht (5.167 Pkt.) 06.05.24 - ARIVA.DE Redaktion Kursgewinne für den Anteilsschein von Infineon (31,92 €) 06.05.24 - ARIVA.DE Redaktion Volkswagen-Aktie gewinnt 2,08 Prozent (117,90 €) Unverzichtbar für Ihr Depot    Steigende Nachfrage sorgt JETZT für Tenbaggerpotenzial weiterlesen» Anzeige wo-site-teaser-box-16860_site-teaser-box_2024-05-06_07%253A00%253A00_2024-05-07_09%253A00%253A59