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Delmarva Bancshares, Inc. Third Quarter 2017 Earnings

CAMBRIDGE, Md., Nov. 1, 2017 /PRNewswire/ -- Delmarva Bancshares, Inc. (the "Company" or "Delmarva"), parent company for 1880 Bank, today reported net income of $597 thousand or $0.10 per share for the quarter ended September 30, 2017, compared to $746 thousand or $0.13 per share for the quarter ended June 30, 2017 and net income of $1.3 million or $0.22 per share for the third quarter of 2016. The Company's net income for the nine months ended September 30, 2017 was $2.9 million or $0.49 per share, compared to $7.0 million or $1.18 per share for the September 2016 nine month period. Excluding the impact of recapturing deferred tax assets (DTAs) and assuming a comparable full year's tax effect on 2016 earnings, core net income was $597 thousand and $1.9 million, or $0.10 and $0.33 per share respectively, for the September 2017 three and nine month periods, compared to $460 thousand and $1.7 million, or $0.08 and $0.28 respectively, for the September 2016 three and nine month periods.

Delmarva's total assets were $328 million at September 30, 2017, compared to $324 million and $315 million at June 30, 2017 and September 30, 2016, respectively. Total loans increased by $5.6 million or 2.4% to $242 million from September 2016. Total deposits were $274 million at September 30, 2017, compared to $270 million at June 30, 2017 and $263 million at September 30, 2016. Non-interest bearing deposits represented 28% of total deposits at September 30, 2017. As of September 30, 2017, non-performing assets were 1.69% of total assets compared to 1.80% at June 30, 2017 and 2.44% at September 30, 2016. The remaining valuation allowance on DTAs at September 30, 2017 was $3.4 million.

Core earnings resulted in continued improvement in fully diluted tangible book value per share, which increased to $6.60 at September 30, 2017 from $6.47 and $5.96 at June 30, 2017 and September 30, 2016, respectively.

Third Quarter Performance Highlights:

  • Core net income was $597 thousand or $0.10 per share for the September 2017 quarter, compared to core net income of $460 thousand or $0.08 per share in the third quarter of 2016.
  • Core net income was $1.9 million or $0.33 per share for the September 2017 nine month period, compared to core net income of $1.7 million or $0.28 per share for the nine months ended September 30, 2016.
  • Total loans increased by $5.6 million, or 2.4%, to $242 million compared to the third quarter of 2016.
  • Non-performing assets were 1.69% of total assets at September 30, 2017, compared to 1.80% and 2.44% of total assets at June 30, 2017 and September 30, 2016, respectively.
  • Total assets at September 30, 2017 were $328 million versus $324 million and $315 million at June 30, 2017 and September 30, 2016, respectively.
  • Cost of funds at the Bank was 0.25% and 0.23% for the three and nine months ended September 30, 2017, respectively, compared to 0.18% and 0.15% for the September 30, 2016 three and nine month periods, respectively.
  • Net interest margin at the Bank was 4.13% and 4.09% for the three and nine months ended September 30, 2017, respectively, compared to 4.27% and 4.15% for the three and nine months ended September 30, 2016, respectively.
  • Core return on assets (ROA) was 0.74% and core return on equity (ROE) was 5.73% for the three months ended September 30, 2017, compared to 0.60% and 4.96%, respectively, for the three months ended September 30, 2016.
  • Core ROA was 0.80% and core ROE was 6.38% for the nine months ended September 30, 2017, compared to 0.73% and 6.64%, respectively, for the nine months ended September 30, 2016.
  • The efficiency ratio was 70.47% and 68.69% for the three and nine months ended September 30, 2017, respectively, compared to 72.87% and 71.87% for the September 2016 three and nine month periods, respectively.
  • Fully diluted tangible book value per share was $6.60 at September 30, 2017 compared to $6.47 and $5.96 at June 30, 2017 and September 30, 2016, respectively.
  • Liquidity remained strong and capital ratios exceeded all regulatory guidelines for a "well-capitalized" financial institution.

"Our approach to prudent loan growth and relationship building continues to produce solid performance results. The strength of our franchise is the core deposits and strong banking relationships that take time to cultivate. Those cultivation activities and effort of our team should bear more future business. The Company is well positioned for organic growth and acquisition opportunities," said Kim C. Liddell, Delmarva's Chairman and President.

Delmarva Bancshares, Inc. and Subsidiary






Consolidated Balance Sheets







September 30, 2017





























September 30, 2017


September 30, 2016


June 30, 2017


Assets














Cash and due from banks

$ 4,631,945


$ 2,714,456


$ 4,012,049


Interest-bearing deposits in other banks

16,633,128


8,423,535


16,736,817


Federal funds sold

126,629


7,000


7,000


Total cash and cash equivalents

21,391,702


11,144,991


20,755,866









Investment securities available-for-sale, at fair value

35,926,265


39,394,611


32,410,599


Restricted stock, at cost

1,706,600


1,951,952


1,689,400


Total investment securities

37,632,865


41,346,563


34,099,999









Loans receivable, gross

241,528,168


235,944,318


240,677,930


Allowance for loan losses

(1,639,922)


(1,607,559)


(1,616,207)


Loans receivable, net of allowance for loan losses

239,888,246


234,336,759


239,061,723


Bank premises and equipment, net

5,221,651


5,547,194


5,325,078


Other real estate owned, net of valuation allowance

516,671


1,164,221


289,421


Accrued interest receivable

658,804


627,746


702,445


Cash surrender value of life insurance

13,834,802


11,052,842


13,769,470


Goodwill

1,852,120


1,852,120


1,852,120


Core Deposit Intangible

671,556


1,013,670


750,505


Deferred tax asset

5,432,586


4,977,300


5,733,143


Other assets

1,160,949


1,827,306


1,316,274









Total Assets

$ 328,261,952


$ 314,890,712


$ 323,656,044









Liabilities and Stockholders' Equity














Liabilities:







Deposits:







Non-interest-bearing

$ 77,881,183


$ 79,447,979


$ 79,561,193


Interest-bearing

196,209,163


183,211,015


190,630,973


Total deposits

274,090,346


262,658,994


270,192,166









Accrued interest payable

90,795


678,404


150,904


Accrued benefit obligations

4,748,619


4,786,215


4,697,361


FRB/FHLB Borrowings

-


-


-


Noncumulative subordinated notes

4,100,000


4,100,000


4,100,000


Trust preferred

2,495,753


2,455,621


2,487,574


Other liabilities

926,012


1,965,783


770,947


Total Liabilities

286,451,525


276,645,017


282,398,952









Commitments and Contingent Liabilities

-


-


-









Stockholders' Equity:







Preferred stock, $.01 par value per share -







2,059,713 shares authorized, issued and outstanding

20,597


20,597


20,597


Common stock, $.01 par value per share -







10,000,000 shares authorized, 3,883,593, 3,872,168 and







3,883,593 issued and outstanding, respectively

38,836


38,721


38,836


Additional paid-in capital

43,616,099


43,498,431


43,603,597


Retained earnings (deficit)

(1,818,074)


(5,583,677)


(2,415,459)


Accumulated other comprehensive income

(47,031)


271,623


9,521


Total Stockholders' Equity

41,810,427


38,245,695


41,257,092









Total Liabilities and Stockholders' Equity

$ 328,261,952


$ 314,890,712


$ 323,656,044









Delmarva Bancshares, Inc. and Subsidiary







Consolidated Statements of Operations







September 30, 2017





























Three Months Ended


Year to Date



September 30, 2017


September 30, 2016


September 30, 2017


September 30, 2016

Interest and Dividend Income









Loans, including fees


$ 2,938,258


$ 2,915,041


$ 8,728,329


$ 8,447,094

Investment securities


175,611


172,342


483,424


586,662

Dividends on restricted stock


7,804


2,121


58,691


43,059

Interest on deposits in other banks


38,089


9,282


102,684


32,673

Interest on federal funds sold/due from banks


314


27


597


45

Total interest income


3,160,076


3,098,813


9,373,725


9,109,533










Interest Expense









Deposits


164,393


113,004


457,466


292,378

Junior subordinated debt


40,691


41,964


122,451


122,175

Senior subordinated debt


73,345


72,813


217,642


217,907

Borrowed funds


-


279


2


311

Total interest expense


278,429


228,060


797,561


632,771










Net interest income


2,881,647


2,870,753


8,576,164


8,476,762










Provision for Loan Losses


52,000


150,401


64,952


150,071










Net interest income after provision









for loan losses


2,829,647


2,720,352


8,511,212


8,326,691










Noninterest Income









Service charges on deposit accounts


206,385


170,839


575,671


498,726

Other fees and commissions


154,867


180,598


455,744


442,085

Net gains on sale of securities


-


-


-


150,033

Income on bank owned life insurance


65,332


34,420


231,645


221,586

Other income


35,211


26,535


79,357


108,403

Total noninterest income


461,795


412,392


1,342,417


1,420,833










Noninterest Expense









Salaries and employee benefits


1,009,781


996,088


2,994,911


2,985,056

Premises and equipment


328,607


368,357


876,431


1,062,779

Data processing


396,472


329,437


1,119,224


854,933

OREO write-downs, net losses on sales and operating expenses


10,303


53,037


25,866


100,214

Professional fees


184,123


192,751


565,800


765,718

Director fees


77,876


54,249


202,125


155,747

Core deposit amortization


78,949


97,108


250,006


302,640

FDIC assessments


25,473


63,168


79,987


196,835

Regulatory examination assessments


10,287


10,287


30,861


30,861

Other insurance expense


28,140


28,508


83,393


84,126

Other expense


206,265


199,378


584,167


574,403

Total noninterest expense


2,356,276


2,392,368


6,812,771


7,113,312










Net Income before income taxes


935,166


740,376


3,040,858


2,634,212










Provision for Income Taxes


337,781


(539,738)


102,186


(4,387,602)










Net Income


$ 597,385


$ 1,280,114


$ 2,938,672


$ 7,021,814










Net Income Per Common Share: Basic


$ 0.10


$ 0.22


$ 0.49


$ 1.18










Net Income Per Common Share: Diluted


$ 0.10


$ 0.22


$ 0.49


$ 1.18










Average Common Shares Outstanding: Basic


5,943,306


5,931,881


5,938,057


5,931,881

Average Common Shares Outstanding: Diluted


5,953,704


5,931,881


5,948,021


5,931,881










CONTACT: Kim C. Liddell, 443-225-4727

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SOURCE Delmarva Bancshares, Inc.