Total Loans Rise 26.2% to $830 Million
Expects Strong Fourth Quarter
NASHVILLE, Tenn., Oct. 22, 2015 (GLOBE NEWSWIRE) -- Avenue Financial Holdings, Inc. (NASDAQ:AVNU) ("Avenue Financial" or "the Company") announced its results for the third quarter and nine months ended September 30, 2015. Net income available to common stockholders was $1.79 million, or $0.18 per diluted share for the third quarter of 2015, compared with $1.59 million, or $0.16 per diluted share, for the second quarter of 2015 and $2.37 million, or $0.28 per diluted share, for the third quarter of 2014. Total loans, including loans held for sale, rose 26.2% to a record $830.4 million in the third quarter of 2015 compared with $658.2 million at September 30, 2014.
"We are pleased with Avenue Financial's excellent performance in the third quarter," stated Ronald L. Samuels, Chairman and Chief Executive Officer. "Loan demand remained strong with solid growth from our key vertical markets in music and entertainment, healthcare, and not-for-profit. We also continue to benefit from improved credit metrics, including a significant decline in non-accruing loans and other real estate owned.
"Our earnings for the third quarter showed solid progress from the second quarter's results and were up 12.6% to $1.79 million compared with $1.59 million in the second quarter of this year. Our third quarter's earnings growth benefited from an increase in net interest income and a reduction in our provision for loan losses. Last year's third quarter results included a credit to the provision for loan losses and a net gain generated by the sale of the guaranteed portion of one SBA loan. These two items accounted for over $1.3 million in the difference in income before tax compared with last year's third quarter. We remain on track for Avenue Financial to report record net income for 2015.
"We expect to have a strong fourth quarter based on our momentum of scheduled loan closings during the last three months of the year. The Nashville market remains very strong with solid economic metrics; including continued growth in home sales, reduced vacancies for commercial and residential real estate, and lower unemployment rates. These factors are driving increased loan demand for commercial and industrial loans, loans to the small business market and mortgage loans in the Nashville area. Our improved asset quality also reflects our focus on solid underwriting and our decline in non-performing assets that has benefited from the robust Nashville economy," continued Samuels.
| Balance Sheet Growth | |||||
| ($ millions) | |||||
| Quarterly % | Annual % | ||||
| Q3 2015 | Q2 2015 | Change | Q3 2014 | Change | |
| Total Assets | $1,108.2 | $1,076.0 | 3.0 % | $973.4 | 13.8 % |
| Loans held for investment | $812.0 | $773.4 | 5.0 % | $653.2 | 24.3 % |
| Loans held for sale | $18.4 | $26.4 | -30.3 % | $5.0 | 268.0 % |
| Total loans | $830.4 | $799.8 | 3.8 % | $658.2 | 26.2 % |
| Cash surrender value of company owned life insurance | $25.6 | $25.4 | 0.8 % | $16.4 | 56.1 % |
| Total Deposits | $900.8 | $851.5 | 5.8 % | $820.9 | 9.7 % |
| Demand Deposits | $286.4 | $270.3 | 6.0 % | $238.9 | 19.9 % |
"We benefited from growth across all sectors with our verticals in music and entertainment, healthcare, and not-for-profit accounting for the majority of our loan and deposit growth in the third quarter," continued Samuels. "We expect our fourth quarter results to benefit from SBA loan sales scheduled to close before year-end, increased commercial real estate funding and increased residential loan demand from broad-based growth across our Nashville market."
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Total assets increased $32.2 million, or 3.0%, to $1.11 billion at September 30, 2015, rising from $1.08 billion at June 30, 2015, and $134.8 million, or 13.8%, compared with $973.4 million at September 30, 2014. The growth in assets was due primarily to higher loans compared with prior quarters.
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Loans held for investment increased $38.6 million, or 5.0%, to a record $812.0 million at September 30, 2015 compared with $773.4 million at June 30, 2015, and were up $158.8 million from $653.2 million at September 30, 2014, for a year-over-year growth rate of 24.3%. Mortgage loans held-for-sale were $18.4 million compared with $26.4 million at June 30, 2015, and $5.0 million at September 30, 2014.
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Cash surrender value of company owned life insurance totaled $25.6 million at September 30, 2015, up from $25.4 million from June 30, 2015 and up $9.2 million, or 56.1%, compared with $16.4 million at September 30, 2014.
- Deposits rose to $900.8 million at September 30, 2015, an increase of $49.3 million, or 5.8% compared with $851.5 million at June 30, 2015. Deposits grew $79.9 million, or 9.7%, compared with $820.9 million at September 30, 2014. Demand deposits rose $47.5 million, or 19.9% to $286.4 million at September 30, 2015 compared with $238.9 million at September 30, 2014. For the third quarter of 2015, demand deposits represented 32.0% of average deposits compared with 28.5% for the third quarter of 2014.
| Revenue Growth and Profitability | |||||
| ($ millions, except EPS) | |||||
| Quarterly % | Annual % | ||||
| Q3 2015 | Q2 2015 | Change | Q3 2014 | Change | |
| Net income available to common stockholders | $1.79 | $1.59 | 12.6 % | $2.37 | -24.5 % |
| Fully diluted EPS | $0.18 | $0.16 | 12.5 % | $0.28 | -35.7 % |
| Net interest income | $8.50 | $8.09 | 5.1 % | $7.53 | 12.9 % |
| Net interest margin | 3.30 % | 3.29 % | +1 BP | 3.36 % | -6 BP |
| Non-interest income | $1.75 | $1.88 | -6.7 % | $1.90 | -7.9 % |
| Provision (credit) for loan losses | $0.61 | $0.86 | -29.1 % | $-0.22 | 377.3 % |
| Non-interest expense | $7.00 | $6.82 | 2.6 % | $6.12 | 14.4 % |
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For the third quarter of 2015, net income available to common stockholders rose 12.6% to $1.79 million compared with $1.59 million for the second quarter of 2015. The increase was attributable primarily to growth in loan volume, higher mortgage banking income from sales and a decline in the provision for loan losses, offset slightly by lower net gain on sale of securities and higher non-interest expenses compared with the second quarter of 2015. Diluted net income per share rose 12.5% to $0.18 on 10.20 million weighted average shares outstanding in the third quarter of 2015 from $0.16 on 10.16 million weighted average shares outstanding in the second quarter of 2015. Net income was down from the third quarter of last year due primarily to a $222.0 thousand credit in the provision for loan losses in the third quarter of 2014 compared with a $613.7 thousand provision in the third quarter of 2015 resulting in a $835.7 thousand swing in the provision, and a $441.8 thousand decrease in net gain on sales of SBA loans compared with the third quarter of last year. Diluted earnings per share were also impacted by a 19.6% increase in weighted average shares outstanding attributable to Avenue Financial's initial public stock offering in February 2015.
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Net interest income increased 12.9% to $8.5 million for the third quarter of 2015, compared with $7.5 million for the third quarter of 2014 and was attributable primarily to growth in loans, offset partially by higher interest costs associated with $20.0 million in subordinated debt issued in December 2014.
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The tax equivalent net interest margin rose 1 basis point to 3.30% in the third quarter of 2015 compared with 3.29% in the second quarter of 2015. The increase was due primarily to growth in average non-interest bearing demand deposits over the past quarter. Cost of the subordinated debt was the primary driver for the 6 basis point reduction in the net interest margin compared with 3.36% reported for the third quarter of 2014. This was partially offset by an increase in the yield on earning assets driven by a higher loan/deposit ratio and a 9 basis point improvement in the yield on investment securities.
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Non-interest income decreased 7.9%, or $154.8 thousand, to $1.75 million from $1.90 million at September 30, 2014. Avenue Financial reported growth in every major non-interest income category since last year except for net gain on sales of SBA loans. Customer service fees rose 19.4% to $721.5 thousand, mortgage banking fees jumped 53.9% to $503.5 thousand, and cash surrender value of life insurance rose 57.9% to $190.9 thousand. Net loan sale gains decreased 63.1% to $314.1 thousand for the third quarter of 2015 compared with $851.7 thousand in the third quarter of 2014. The third quarter of 2014 included $441.8 thousand in net gains on SBA loans compared with no sales in the third quarter of 2015. Net gain on sale of securities totaled $19.2 thousand in the third quarter of 2015 with no comparable securities gains in the third quarter of 2014.
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The provision for loan losses was $613.7 thousand for the third quarter of 2015, compared with a credit of $222.0 thousand for the third quarter of 2014.
- Non-interest expense for the third quarter of 2015 increased $180.7 thousand, or 2.6%, to $7.0 million from $6.8 million for the second quarter of 2015, and increased $882.7 thousand from the third quarter of 2014. The increase was due primarily to higher compensation costs related to growth in employee headcount, merit increases, and higher legal, accounting and insurance related to public company expenses.
| Asset Quality | |||||
| ($ millions) | |||||
| Quarterly % | Annual % | ||||
| Q3 2015 | Q2 2015 | Change | Q3 2014 | Change | |
| Non-accruing loans | $0.318 | $0.776 | -59.0 % | $0.889 | -64.2 % |
| Ratio of non-performing assets to total assets | 0.12 % | 0.32 % | -20 BP | 0.28 % | -16 BP |
| Other real estate owned | $0.992 | $2.71 | -63.4 % | $1.85 | -46.5 % |
| Net loan charge-offs | $0.293 | $0.213 | 38.0 % | ($0.005) | N/M % |
| Allowance for loan losses | $9.63 | $9.31 | 3.4 % | $8.41 | 14.5 % |
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Asset quality improved in the third quarter compared with the second quarter of 2015 and third quarter of 2014 as measured by reductions in nonaccruing loans, non-performing loans to total loans and other real estate owned. Nonaccruing loans declined to $318.0 thousand, or 0.04% of total loans at September 30, 2015, compared with $775.7 thousand, or 0.10% of total loans, at June 30, 2015, and $888.9 thousand, or 0.14% of total loans, at September 30, 2014. Our ratio of non-performing assets (nonaccruing loans plus other real estate owned) to total assets decreased to 0.12% at September 30, 2015, compared with 0.32% at June 30, 2015, and 0.28% at September 30, 2014 due primarily to a decrease in other real estate owned and growth in total assets. Total other real estate owned declined to $992.0 thousand at September 30, 2015 compared with $2.7 million at June 30, 2015 due to sales contracts that closed in the third quarter of 2015. Troubled-debt restructurings declined slightly during the third quarter and now total $423.7 thousand at September 30, 2015 and include one loan.
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Net loan charge-offs for the third quarter of 2015 were $294.0 thousand, or 0.15% of average loans for the quarter, compared with $212.6 thousand, or 0.12% of average loans for the quarter ended June 30, 2015. There were no past dues greater than 90 days at September 30, 2015.
- The allowance for loan losses was $9.6 million, or 1.19% of loans, at September 30, 2015, compared with $9.3 million, or 1.20% of loans at June 30, 2015 and $8.4 million, or 1.29% of loans at September 30, 2014. The decrease in the allowance percentage to loans was due primarily to the resolution of certain problem credits and a lower historical loss ratio offset somewhat by growth in the loan portfolio since last year.
"We remain very positive about the future for Avenue Financial," stated Samuels. "Our focused teams continue to gain market share in Nashville. We believe our success is due to our collaborative and proactive approach in working with our commercial and private banking clients, our areas of market focus and the strength of the Nashville market.
"Avenue Financial was recently selected by American Banker as one of the five best banks to work for in the United States, for the second year in a row. Our success, in part, is due to our personal touch environment that extends through our employee teams. We believe our culture is a competitive advantage in attracting new customers and the top bankers to our team. It's also a key part of our strategy to grow earnings and build shareholder value," concluded Samuels.
About Avenue Financial Holdings, Inc.
Avenue Financial Holdings, Inc., headquartered in Nashville, Tennessee, was formed as a single-bank holding company in 2006 and operates primarily through its subsidiary, Avenue Bank. The Company's operations are concentrated in the Nashville MSA, with the vision of building Nashville's signature bank and serving clients who value creativity, expertise, and an exceptional level of personal service. Avenue Bank embodies Nashville's creative spirit - redefining how clients experience banking through a unique "Concierge Banking" model. The bank provides a wide range of business and personal banking services, including mortgage loans, with a special emphasis on Commercial, Private Client, Healthcare, and Music & Entertainment banking. The Company serves clients through five locations (a corporate headquarters and four retail branches), a limited deposit courier service (mobile branch) for select commercial clients, and mobile and online banking services. The Company's stock is traded on the NASDAQ Global Select Market under the ticker symbol "AVNU."
Forward-Looking Statements
Certain statements in this press release contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would," and "outlook," or the negative version of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
You should not place undue reliance on any forward-looking statement. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following: market and economic conditions (including interest rate environment, levels of public offerings, mergers and acquisitions, or M&A, and venture capital financing activities) and the associated impact on us; changes in management personnel; deterioration of our asset quality;our overall management of interest rate risk, including managing the sensitivity of our interest-earning assets and interest-bearing liabilities to interest rates, and the impact to earnings from a change in interest rates; our ability to execute our strategy and to achieve organic loan and deposit growth;the adequacy of reserves (including allowance for loan and lease losses) and the appropriateness of our methodology for calculating such reserves;volatility and direction of market interest rates;the sufficiency of our capital, including sources of capital (such as funds generated through retained earnings) and the extent to which capital may be used or required; our overall investment plans, strategies and activities, including our investment of excess cash/liquidity; operational, liquidity and credit risks associated with our business; increased competition in the financial services industry, nationally, regionally or locally, which may adversely affect pricing and terms; the level of client investment fees and associated margins; changes in the regulatory environment; changes in trade, monetary and fiscal policies and laws; governmental legislation and regulation, including changes in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank Act, Basel guidelines, capital requirements and other applicable laws and regulations; changes in interpretation of existing law and regulation; further government intervention in the U.S. financial system; and other factors that are discussed under the heading "Risk Factors" in our filings with the Securities and Exchange Commission.
The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in the Company's Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY | |||
| Consolidated Balance Sheets | |||
| (unaudited) | |||
| September 30, | June 30, | September 30, | |
| 2015 | 2015 | 2014 | |
| Assets | |||
| Cash and due from banks | $ 21,308,316 | $ 18,360,874 | $ 66,117,738 |
| Federal funds sold | 2,333,803 | -- | 3,237,164 |
| Cash and cash equivalents | 23,642,119 | 18,360,874 | 69,354,902 |
| Interest-bearing time deposits in banks | 215,610 | 215,203 | 210,754 |
| Securities available-for-sale, at fair value | 210,010,981 | 213,095,723 | 211,499,674 |
|
Securities held-to-maturity (fair value of $4,938,566, $3,869,505, and $2,851,518 as of September 30, 2015, June 30, 2015 and September 30, 2014, respectively) |
4,862,285 | 3,802,440 | 2,719,122 |
| Mortgage loans held-for-sale | 18,389,280 | 26,363,485 | 5,036,218 |
| Loans, net of deferred fees | 812,059,281 | 773,441,243 | 653,235,053 |
| Less allowance for loan losses | (9,631,617) | (9,311,870) | (8,406,887) |
| Net loans | 802,427,664 | 764,129,373 | 644,828,166 |
| Accrued interest receivable | 2,647,542 | 2,627,076 | 2,169,586 |
| Federal Home Loan Bank stock, at cost | 3,320,400 | 3,320,400 | 2,924,400 |
| Premises and equipment, net | 3,310,784 | 3,098,276 | 3,457,229 |
| Other real estate owned | 992,001 | 2,708,961 | 1,854,811 |
| Deferred tax assets | 7,994,832 | 8,614,624 | 8,062,241 |
| Cash surrender value of company owned life insurance | 25,553,529 | 25,362,673 | 16,403,593 |
| Goodwill | 2,966,063 | 2,966,063 | 2,966,063 |
| Other assets | 1,878,003 | 1,312,753 | 1,884,023 |
| Total assets | $ 1,108,211,093 | $ 1,075,977,924 | $ 973,370,782 |
| Liabilities and Stockholders' Equity | |||
| Liabilities: | |||
| Deposits: | |||
| Noninterest-bearing demand deposits | $ 226,049,032 | $ 208,415,520 | $ 186,210,126 |
| Interest-bearing demand deposits | 60,386,697 | 61,924,397 | 52,672,601 |
| Savings and money market accounts | 451,836,452 | 412,171,638 | 422,429,840 |
| Time | 162,487,542 | 168,979,034 | 159,568,781 |
| Total deposits | 900,759,723 | 851,490,589 | 820,881,348 |
| Accrued interest payable | 544,094 | 514,855 | 166,958 |
| Federal funds purchased | -- | 460,000 | -- |
| Federal Home Loan Bank advances | 85,300,000 | 105,300,000 | 55,000,000 |
| Subordinated debt | 19,606,227 | 19,595,584 | -- |
| Other liabilities | 8,675,930 | 8,926,068 | 7,707,257 |
| 1,014,885,974 | 986,287,096 | 883,755,563 | |
| Commitments and Contingent Liabilities | |||
| Stockholders' equity: | |||
|
Preferred Stock, no par value; 10,000,000 shares authorized, Series C, senior noncumulative perpetual preferred stock; 0, 0 and 18,950 issued and outstanding at September 30, 2015, June 30, 2015 and September 30, 2014, respectively |
-- | -- | 18,950,000 |
|
Common Stock, no par value. Authorized 100,000,000 shares: issued and outstanding 10,300,172, 10,256,340 and 8,633,588 shares at September 30, 2015, June 30, 2015 and September 30, 2014, respectively |
90,105,473 | 89,935,473 | 75,407,157 |
| Additional paid-in-capital | 1,742,083 | 1,623,211 | 1,182,558 |
| Accumulated profit (deficit) | 3,223,301 | 1,428,859 | (2,826,418) |
| Accumulated other comprehensive loss | (1,745,738) | (3,296,715) | (3,098,078) |
| Total stockholders' equity | 93,325,119 | 89,690,828 | 89,615,219 |
| Total liabilities and stockholders' equity | $ 1,108,211,093 | $ 1,075,977,924 | $ 973,370,782 |
| This information is preliminary and based on company data available at the time of the presentation. | |||
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY | ||||
| Consolidated Statements of Income | ||||
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Interest and dividend income: | ||||
| Loans, including fees | $ 8,669,585 | $ 7,326,129 | $ 24,548,507 | $ 20,826,144 |
| Taxable securities | 907,043 | 924,639 | 2,739,302 | 2,942,420 |
| Tax-exempt securities | 258,859 | 187,503 | 704,068 | 669,317 |
| Federal Funds sold and other | 33,647 | 29,841 | 94,535 | 87,613 |
| Total interest and dividend income | 9,869,134 | 8,468,112 | 28,086,412 | 24,525,494 |
| Interest expense: | ||||
| Deposits | 855,422 | 782,904 | 2,390,001 | 2,325,655 |
| Subordinated debt | 348,143 | -- | 1,044,428 | -- |
| Other borrowings | 160,908 | 151,837 | 495,500 | 505,002 |
| Total interest expense | 1,364,473 | 934,741 | 3,929,929 | 2,830,657 |
| Net interest income | 8,504,661 | 7,533,371 | 24,156,483 | 21,694,837 |
| Provision (credit) for loan losses | 613,705 | (222,024) | 1,622,338 | 1,186,916 |
| Net interest income after provision (credit) for loan losses | 7,890,956 | 7,755,395 | 22,534,145 | 20,507,921 |
| Noninterest income: | ||||
| Customer service fees | 721,473 | 604,095 | 2,135,388 | 1,813,804 |
| Mortgage banking income from sales, net of commissions | 503,533 | 327,275 | 1,125,932 | 566,629 |
| Increase in cash surrender value of life insurance | 190,856 | 120,908 | 517,776 | 362,206 |
| Net gain on sales of bulk mortgage loans | 314,096 | 409,896 | 866,385 | 409,896 |
| Net gain of sale of SBA loans | -- | 441,789 | -- | 441,789 |
| Net gain on sale of available-for-sale securities | 19,247 | -- | 234,447 | 11,917 |
| Total noninterest income | 1,749,205 | 1,903,963 | 4,879,928 | 3,606,241 |
| Noninterest expenses: | ||||
| Salaries and employee benefits | 4,118,021 | 3,543,388 | 12,033,108 | 10,399,376 |
| Equipment and occupancy | 818,517 | 827,692 | 2,472,222 | 2,583,453 |
| Data processing | 414,196 | 356,692 | 1,218,911 | 1,039,308 |
| Advertising, promotion, and public relations | 166,531 | 148,648 | 547,414 | 444,733 |
| Legal and accounting | 460,651 | 250,131 | 1,143,933 | 655,218 |
| FDIC insurance and other regulatory assessments | 195,381 | 190,125 | 613,503 | 553,907 |
| Other real estate income | (12,228) | (35,043) | (29,904) | (18,956) |
| Other expenses | 843,210 | 839,987 | 2,302,493 | 2,171,752 |
| Total noninterest expenses | 7,004,279 | 6,121,620 | 20,301,680 | 17,828,791 |
| Income before taxes | 2,635,882 | 3,537,738 | 7,112,393 | 6,285,371 |
| Income tax expense | 841,441 | 1,122,393 | 2,275,333 | 1,964,968 |
| Net income | 1,794,441 | 2,415,345 | 4,837,060 | 4,320,403 |
| Preferred stock dividends | -- | (47,375) | (32,110) | (142,125) |
| Net income available to common stockholders | $ 1,794,441 | $ 2,367,970 | $ 4,804,950 | $ 4,178,278 |
| Per share information: | ||||
| Basic net income per common share available to common stockholders | $ 0.18 | $ 0.28 | $ 0.49 | $ 0.49 |
| Diluted net income per common share available to common stockholders | $ 0.18 | $ 0.28 | $ 0.48 | $ 0.49 |
| Weighted average common shares outstanding: | ||||
| Basic | 10,078,172 | 8,487,516 | 9,823,554 | 8,485,195 |
| Diluted | 10,197,416 | 8,528,926 | 9,932,347 | 8,526,605 |
| This information is preliminary and based on company data available at the time of the presentation. | ||||
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY | |||||||||||
| SELECTED QUARTERLY FINANCIAL DATA | |||||||||||
| (unaudited) | |||||||||||
| At or for the Three Months | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | 2014 | ||||||
| (Dollars in thousands, except employee data) | |||||||||||
| SELECTED INCOME STATEMENT DATA | |||||||||||
| Interest income | $ 9,869 | $ 9,383 | $ 8,834 | $ 8,498 | $ 8,468 | $ 8,237 | |||||
| Interest expense | 1,365 | 1,296 | 1,269 | 938 | 935 | 952 | |||||
| Net interest income | 8,504 | 8,087 | 7,565 | 7,560 | 7,533 | 7,285 | |||||
| Provision for loan losses | 614 | 855 | 154 | 456 | (222) | 549 | |||||
| Net interest income after provision for loan losses | 7,890 | 7,232 | 7,411 | 7,104 | 7,755 | 6,736 | |||||
| Non-interest income | 1,749 | 1,875 | 1,256 | 1,059 | 1,904 | 915 | |||||
| Non-interest expense | 7,004 | 6,824 | 6,474 | 6,297 | 6,122 | 5,862 | |||||
| Income tax expense | 841 | 698 | 736 | 573 | 1,122 | 555 | |||||
| Net income | 1,794 | 1,585 | 1,457 | 1,293 | 2,415 | 1,234 | |||||
| Dividends on preferred shares | -- | -- | (32) | (48) | (47) | (48) | |||||
| Net income available to common stockholders | $ 1,794 | $ 1,585 | $ 1,425 | $ 1,245 | $ 2,368 | $ 1,186 | |||||
| PER COMMON SHARE DATA: | |||||||||||
| Basic earnings per share | $ 0.18 | $ 0.16 | $ 0.15 | $ 0.15 | $ 0.28 | $ 0.14 | |||||
| Diluted earnings per share | 0.18 | 0.16 | 0.15 | 0.15 | 0.28 | 0.14 | |||||
| Book value per common share | 9.06 | 8.74 | 8.79 | 8.41 | 8.18 | 7.96 | |||||
| Tangible book value per common share (1) | 8.77 | 8.45 | 8.50 | 8.07 | 7.84 | 7.62 | |||||
| Basic weighted average common shares | 10,078,172 | 10,064,840 | 9,319,312 | 8,487,515 | 8,487,516 | 8,487,516 | |||||
| Diluted weighted average common shares | 10,197,416 | 10,161,167 | 9,656,971 | 8,540,856 | 8,528,926 | 8,487,516 | |||||
| Common shares outstanding at period end | 10,300,172 | 10,256,340 | 10,227,340 | 8,636,682 | 8,633,588 | 8,619,588 | |||||
| SELECTED BALANCE SHEET DATA | |||||||||||
| Total assets | $ 1,108,211 | $ 1,075,978 | $ 1,036,544 | $ 998,367 | $ 973,371 | $ 955,100 | |||||
| Residential real estate - Mortgage | 128,526 | 120,208 | 103,728 | 110,929 | 122,128 | 127,462 | |||||
| Residential real estate - Multi-family | 9,259 | 10,399 | 13,480 | 11,310 | 20,960 | 15,605 | |||||
| Commercial and industrial | 285,381 | 272,783 | 247,722 | 235,911 | 181,688 | 188,421 | |||||
| Commercial real estate | 297,385 | 284,653 | 289,404 | 271,001 | 268,907 | 275,526 | |||||
| Construction and land development | 81,580 | 78,473 | 54,515 | 58,843 | 55,174 | 65,874 | |||||
| Consumer | 10,126 | 7,052 | 7,319 | 5,915 | 4,221 | 4,817 | |||||
| Other, including deferred fees | (197) | (127) | 85 | (1) | 157 | 130 | |||||
| Total loans, net of deferred fees | 812,060 | 773,441 | 716,253 | 693,908 | 653,235 | 677,835 | |||||
| Allowance for loan losses | (9,632) | (9,312) | (8,669) | (8,518) | (8,407) | (8,625) | |||||
| Securities available for sale | 210,011 | 213,096 | 218,118 | 220,462 | 211,500 | 217,478 | |||||
| Mortgage loans held for sale | 18,389 | 26,363 | 33,484 | 27,237 | 5,036 | 7,457 | |||||
| Goodwill and other intangible assets | 2,966 | 2,966 | 2,966 | 2,966 | 2,966 | 2,966 | |||||
| Demand deposits | 226,049 | 208,416 | 200,316 | 170,647 | 186,209 | 166,181 | |||||
| Interest checking accounts | 60,387 | 61,924 | 60,135 | 55,653 | 52,673 | 51,675 | |||||
| Savings accounts | 15,668 | 15,146 | 15,197 | 11,919 | 10,613 | 8,434 | |||||
| Money market accounts | 264,160 | 241,182 | 227,999 | 240,646 | 263,947 | 268,417 | |||||
| Reciprocal ICS Money Market | 172,009 | 155,844 | 155,572 | 163,214 | 147,870 | 139,017 | |||||
| CDs | 70,748 | 74,516 | 70,064 | 82,012 | 82,075 | 82,116 | |||||
| Reciprocal CDARs | 46,880 | 49,967 | 51,602 | 44,081 | 41,662 | 39,780 | |||||
| Brokered CDs | 44,859 | 44,496 | 35,000 | 35,000 | 35,832 | 29,097 | |||||
| Total Deposits | 900,760 | 851,491 | 815,885 | 803,172 | 820,881 | 784,717 | |||||
| Advances from FHLB/FRB | 85,300 | 105,300 | 99,300 | 70,300 | 55,000 | 75,500 | |||||
| Subordinated debt | 19,606 | 19,596 | 19,585 | 19,577 | -- | -- | |||||
| Preferred stock | -- | -- | -- | 18,950 | 18,950 | 18,950 | |||||
| Tangible common stockholders' equity (1) | 90,359 | 86,725 | 86,967 | 69,700 | 67,699 | 65,661 | |||||
| Total stockholders' equity | 93,325 | 89,691 | 89,933 | 91,616 | 89,615 | 87,577 | |||||
| Average total assets | 1,097,049 | 1,055,912 | 1,014,663 | 976,497 | 952,248 | 932,603 | |||||
| Average common stockholders' equity | 91,355 | 90,298 | 94,659 | 72,447 | 69,902 | 66,973 | |||||
| Full time employees | 141 | 145 | 132 | 134 | 130 | 125 | |||||
| SELECTED PERFORMANCE RATIOS | |||||||||||
| Return on average assets (2) (5) | 0.65 % | 0.60 % | 0.57 % | 0.51 % | 0.99 % | 0.51 % | |||||
| Return on average common stockholders' equity (2) (5) | 7.79 | 7.04 | 6.11 | 6.82 | 13.44 | 7.10 | |||||
| Net interest margin (fully tax equivalent) (2) | 3.30 | 3.29 | 3.23 | 3.35 | 3.36 | 3.33 | |||||
| Efficiency ratio (1) (3) | 68.44 | 70.01 | 73.39 | 73.06 | 64.87 | 71.47 | |||||
| This information is preliminary and based on company data available at the time of the presentation. | |||||||||||
| AVENUE FINANCIAL HOLDINGS, INC. AND SUBSIDIARY | |||||||||||
| SELECTED QUARTERLY FINANCIAL DATA | |||||||||||
| (unaudited) | |||||||||||
| At or for the Three Months | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | 2014 | ||||||
| (Dollars in thousands, except per share data) | |||||||||||
| SELECTED ASSET QUALITY DATA | |||||||||||
| Nonaccruing loans | $ 318 | $ 776 | $ 854 | $ 695 | $ 889 | $ 897 | |||||
| Past due loans over 90 days and still accruing interest | -- | -- | -- | -- | -- | -- | |||||
| Net loans charge-offs | 294 | 213 | 2 | 345 | (5) | (5) | |||||
| Nonaccruing loans to total loans | 0.04 % | 0.10 % | 0.12 % | 0.10 % | 0.14 % | 0.13 % | |||||
| Nonaccruing loans and loans past due 90 days and still accruing to total loans | 0.04 | 0.10 | 0.12 | 0.10 | 0.14 | 0.13 | |||||
| Non-performing assets to total assets (4) | 0.12 | 0.32 | 0.35 | 0.41 | 0.28 | 0.30 | |||||
| Non-performing assets to loans and OREO | 0.16 | 0.45 | 0.51 | 0.58 | 0.42 | 0.42 | |||||
| Allowance for loan losses to total loans | 1.19 | 1.20 | 1.21 | 1.23 | 1.29 | 1.27 | |||||
| Allowance for loan losses to nonaccruing loans | 3,028.93 | 1,200.00 | 1,015.15 | 1,224.87 | 945.67 | 961.54 | |||||
| Net loan charge-offs to average loans (2) | 0.15 | 0.12 | -- | 0.20 | -- | -- | |||||
| CAPITAL RATIOS (Consolidated) | |||||||||||
| Tier 1 Leverage ratio (6) | 8.41 % | 8.55 % | 8.73 % | 9.21 % | 9.16 % | 8.78 % | |||||
| Tier 1 Risk-based capital ratio (6) | 9.64 | 9.85 | 10.38 | 10.62 | 11.38 | 10.65 | |||||
| Total Risk-based capital ratio (6) | 12.75 | 13.06 | 13.77 | 14.00 | 12.49 | 11.77 | |||||
| Tangible common stockholders' equity to tangible assets (1) | 8.18 | 8.08 | 8.41 | 7.00 | 6.98 | 6.90 | |||||
| The information set forth above contains certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are "tangible book value per common share," "tangible common stockholders' equity," "efficiency ratio," and "tangible common stockholders' equity to tangible assets." Although we believe these non-GAAP financial measures provide a greater understanding of our business, these measures are not necessarily comparable to similar measures that may be presented by other companies. | |||||||||||
| "Efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income excluding gains and losses on sales of securities. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain non-recurring items and other discrete items that are unrelated to our core business. | |||||||||||
| "Tangible common stockholders' equity" is defined as common stockholders' equity reduced by goodwill. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in common stockholders' equity exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both common stockholders' equity and assets while not increasing our tangible common stockholders' equity or tangible assets. | |||||||||||
| "Tangible common stockholders' equity to tangible assets" is defined as the ratio of common stockholders' equity reduced by goodwill divided by total assets reduced by goodwill. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period to period in common stockholders' equity and total assets, each exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing both common stockholders' equity and assets while not increasing our tangible common equity or tangible assets. | |||||||||||
| "Tangible book value per common share" is defined as tangible common stockholders' equity divided by total common shares outstanding. We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing book value while not increasing our tangible book value. | |||||||||||
| The information provided below reconciles each non-GAAP measure to its most comparable GAAP measure. | |||||||||||
| NON-GAAP FINANCIAL MEASURES | |||||||||||
| Efficiency Ratio | |||||||||||
| Non-interest expense (numerator) | $ 7,004 | $ 6,824 | $ 6,474 | $ 6,297 | $ 6,122 | $ 5,862 | |||||
| Net interest income | 8,504 | 8,087 | 7,565 | 7,560 | 7,533 | 7,285 | |||||
| Non-interest income | 1,749 | 1,875 | 1,256 | 1,059 | 1,904 | 915 | |||||
| Less: gains (losses) on sales of securities | (19) | (215) | -- | -- | -- | 2 | |||||
| Adjusted operating revenue (denominator) | 10,234 | 9,747 | 8,821 | 8,619 | 9,437 | 8,202 | |||||
| Efficiency Ratio | 68.44 % | 70.01 % | 73.39 % | 73.06 % | 64.87 % | 71.47 % | |||||
| Tangible Common Stockholders' Equity and Tangible Common Stockholders' Equity/Tangible Assets | |||||||||||
| Common equity | $ 93,325 | $ 89,691 | $ 89,933 | $ 72,666 | $ 70,665 | $ 68,627 | |||||
| Less: intangible assets | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) | |||||
| Tangible common stockholders' equity | 90,359 | 86,725 | 86,967 | 69,700 | 67,699 | 65,661 | |||||
| Total assets | 1,108,211 | 1,075,978 | 1,036,544 | 998,367 | 973,371 | 955,100 | |||||
| Less: Intangible assets | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) | (2,966) | |||||
| Tangible assets | 1,105,245 | 1,073,012 | 1,033,578 | 995,401 | 970,405 | 952,134 | |||||
| Tangible Common Stockholders' Equity/Tangible Assets | 8.18 % | 8.08 % | 8.41 % | 7.00 % | 6.98 % | 6.90 % | |||||
| Tangible Book Value per Common Share | |||||||||||
| Book Value Per Common Share | $ 9.06 | $ 8.74 | $ 8.79 | $ 8.41 | $ 8.18 | $ 7.96 | |||||
| Less: Effects of intangible assets | (0.29) | (0.29) | (0.29) | (0.34) | (0.34) | (0.34) | |||||
| Tangible Book Value per Common Share | 8.77 | 8.45 | 8.50 | 8.07 | 7.84 | 7.62 | |||||
| (1) These measures are not measures recognized under generally accepted accounting principles (United States) ("GAAP"), and are therefore considered to be non-GAAP financial measures. | |||||||||||
| (2) Data has been annualized. | |||||||||||
| (3) Efficiency ratio is total non-interest expense divided by the sum of net interest income and total non-interest income, (excluding securities and loan sale gains/(losses)) and is not a GAAP measure. | |||||||||||
| (4) Non-performing assets are deemed to be nonaccruing loans and OREO. | |||||||||||
| (5) Return on average assets is defined as net income available to common stockholders divided by average total assets; Return on average common stockholders equity is defined by net income available to common stockholders divided by average common stockholders' equity. | |||||||||||
| (6) Capital ratios as of September 30, 2015 are estimated. | |||||||||||
| This information is preliminary and based on company data available at the time of the presentation. | |||||||||||
| Average Balance Sheets and Net Interest Analysis | ||||||
| On a Fully Taxable-Equivalent Basis | ||||||
| Three Months Ended September 30, | ||||||
| 2015 | 2014 | |||||
| Average Balance | Interest Earned / Paid | Average Yield / Rate | Average Balance | Interest Earned / Paid | Average Yield / Rate | |
| (In thousands, except Average Yields and Rates) | ||||||
| Assets: | ||||||
| Interest earning assets: | ||||||
| Interest-bearing time deposits in banks | $ 215 | $ -- | 0.75 % | $ 223 | $ -- | 0.76 % |
| Investments (1) (3) | 218,908 | 1,332 | 2.41 | 223,127 | 1,239 | 2.20 |
| Federal funds sold | 223 | -- | 0.23 | 791 | -- | 0.24 |
| Loans held-for-sale | 30,715 | 252 | 3.26 | 6,293 | -- | -- |
| Total loans (2) | 789,023 | 8,418 | 4.23 | 669,620 | 7,326 | 4.34 |
| Total interest earning assets | 1,039,084 | 10,002 | 3.82 | 900,054 | 8,565 | 3.78 |
| Allowance for loan losses | (9,503) | (8,620) | ||||
| Non-interest earning assets | 67,468 | 60,814 | ||||
| Total assets | $ 1,097,049 | $ 952,248 | ||||
| Interest bearing liabilities: | ||||||
| Interest bearing deposits: | ||||||
| Checking | $ 61,527 | $ 54 | 0.35 % | $ 50,653 | $ 52 | 0.41 % |
| Savings | 15,613 | 4 | 0.11 | 9,340 | 3 | 0.12 |
| Money market | 412,307 | 452 | 0.43 | 398,529 | 427 | 0.43 |
| Time deposits | 167,136 | 345 | 0.82 | 153,808 | 301 | 0.78 |
| Federal funds purchased | 1,975 | 3 | 0.56 | 2,608 | 4 | 0.55 |
| Subordinated debt | 19,601 | 348 | 7.05 | -- | -- | -- |
| Other borrowings | 100,234 | 158 | 0.63 | 67,397 | 148 | 0.87 |
| Total interest bearing liabilities | 778,393 | 1,364 | 0.70 | 682,335 | 935 | 0.54 |
| Non-interest bearing checking | 218,437 | 173,489 | ||||
| Other liabilities | 8,864 | 7,572 | ||||
| Stockholders' equity | 91,355 | 88,852 | ||||
| Total liabilities and stockholders' equity | $ 1,097,049 | $ 952,248 | ||||
| Net interest spread | 3.12 % | 3.24 % | ||||
| Net interest margin | 3.30 | 3.36 | ||||
| (1) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%. | ||||||
| (2) Non-accrual loans are included in average loan balances in all periods. Loan fees of $258,000 and $181,000 are included in interest income in 2015 and 2014, respectively | ||||||
| (3) Unrealized gains/(losses) of ($1,086,000) and ($2,298,000) are excluded from the yield calculation in 2015 and 2014, respectively. | ||||||
| This information is preliminary and based on company data available at the time of the presentation. | ||||||
| Average Balance Sheets and Net Interest Analysis | ||||||
| On a Fully Taxable-Equivalent Basis | ||||||
| Nine Months Ended September 30, | ||||||
| 2015 | 2014 | |||||
| Average Balance | Interest Earned / Paid | Average Yield / Rate | Average Balance | Interest Earned / Paid | Average Yield / Rate | |
| (In thousands, except Average Yields and Rates) | ||||||
| Assets: | ||||||
| Interest earning assets: | ||||||
| Interest-bearing time deposits in banks | $ 214 | $ 1 | 0.75 % | $ 506 | $ 4 | 1.14 % |
| Investments (1) (3) | 222,282 | 3,897 | 2.34 | 238,098 | 4,039 | 2.27 |
| Federal funds sold | 353 | 1 | 0.27 | 560 | 1 | 0.24 |
| Loans held-for-sale | 32,858 | 835 | 3.40 | 3,976 | -- | -- |
| Total loans (2) | 744,425 | 23,714 | 4.26 | 641,104 | 20,826 | 4.34 |
| Total interest earning assets | 1,000,132 | 28,448 | 3.80 | 884,244 | 24,870 | 3.76 |
| Allowance for loan losses | (9,064) | (8,153) | ||||
| Non-interest earning assets | 64,807 | 54,478 | ||||
| Total assets | $ 1,055,875 | $ 930,569 | ||||
| Interest bearing liabilities: | ||||||
| Interest bearing deposits: | ||||||
| Checking | $ 60,147 | $ 158 | 0.35 % | $ 49,312 | $ 155 | 0.42 % |
| Savings | 14,649 | 12 | 0.11 | 8,561 | 9 | 0.14 |
| Money market | 396,511 | 1,227 | 0.41 | 393,043 | 1,348 | 0.46 |
| Time deposits | 163,650 | 994 | 0.81 | 143,595 | 814 | 0.76 |
| Federal funds purchased | 6,392 | 28 | 0.59 | 8,224 | 41 | 0.67 |
| Subordinated debt | 19,866 | 1,044 | 7.03 | -- | -- | -- |
| Other borrowings | 95,554 | 467 | 0.65 | 72,632 | 464 | 0.85 |
| Total interest bearing liabilities | 756,769 | 3,930 | 0.69 | 675,367 | 2,831 | 0.56 |
| Non-interest bearing checking | 198,438 | 161,717 | ||||
| Other liabilities | 8,564 | 7,009 | ||||
| Stockholders' equity | 92,104 | 86,476 | ||||
| Total liabilities and stockholders' equity | $ 1,055,875 | $ 930,569 | ||||
| Net interest spread | 3.11 % | 3.20 % | ||||
| Net interest margin | 3.28 | 3.33 | ||||
| (1) Interest income and yields are presented on a fully taxable equivalent basis using a tax rate of 34%. | ||||||
| (2) Non-accrual loans are included in average loan balances in all periods. Loan fees of $712,000 and $445,000 are included in interest income in 2015 and 2014, respectively | ||||||
| (3) Unrealized gains/(losses) of ($166,000) and ($3,511,000) are excluded from the yield calculation in 2015 and 2014, respectively. | ||||||
| This information is preliminary and based on company data available at the time of the presentation. | ||||||