LUTHERVILLE, Md., May 1, 2015 (GLOBE NEWSWIRE) -- Bay Bancorp, Inc. ("Bay") (Nasdaq:BYBK), the savings and loan holding company for Bay Bank, FSB ("Bank"), announced today net income of $0.34 million or $0.03 per basic and diluted share for the quarter ended March 31, 2015, compared to net income of $0.08 million or $0.01 per basic and diluted share for the quarter ended March 31, 2014.
According to Joseph J. Thomas, Chairman, President and CEO, "Our management team remains committed to executing a differentiated business strategy articulated as the bank built by entrepreneurs for entrepreneurs in the Baltimore/Washington corridor, and executed by having lead relationships with businesses, real estate owners and professionals via an optimal network of sales offices and technology solutions to provide loans, deposits, e-services, mortgage banking and financial advisory services." "For the quarter ended March 31, 2015, we continued to progress toward our goal of improved profitability resulting in expanded market capitalization. Our goal is to achieve the improvement through capital utilization with a keen eye on expense efficiency. While seeking growth, we preserved a very high quality balance sheet by reporting a 16.2% tier one risk-based capital to asset ratio, a 46.3% Adversely Classified Asset ratio and a 202.7% Commercial Real Estate loans to Capital ratio," Thomas continued.
Highlights from the First Three Months of 2015
The Bank's relationship management activities resulted in the growth of new loans in the Bank's originated portfolio by a 32.8% annualized pace in the first quarter of 2015. Deposit growth, and particularly noninterest-bearing deposit growth, was strong during the first quarter of 2015, as the Bank recorded annualized growth of over 16%. Bay has a very strong capital position and capacity for future growth with total regulatory capital to risk weighted assets of 16.6% as of March 31, 2015. The Bank has a proven record of success in acquisitions and acquired problem asset resolutions and, at March 31, 2015, had $13.4 million in remaining net purchase discounts on the acquired loan portfolios.
Specific highlights are listed below:
- The return on average assets for the three months ended March 31, 2015 was 0.29%, as compared to 1.09% for the three months ended December 31, 2014 and 0.08% for the same period of 2014. The return on average equity for the three-months ended March 31, 2015 was 2.08% compared to 7.87% for the three-months ended December 31, 2014 and 0.61%, for the first quarter of 2014.
- Total assets were $487 million at March 31, 2015 compared to $480 million at December 31, 2014 and increased by $57 million from $430 million at March 31, 2014.
- Total loans were $392 million at March 31, 2015, a decrease of 0.4% from $393 million at December 31, 2014 and an increase of 26% from $312 million at March 31, 2014.
- Total deposits were $404 million at March 31, 2015, an increase of 4% from $388 million at December 31, 2014 and an increase of 9% from $372 million at March 31, 2014. Non-interest bearing deposits were $101 million, an increase of 10% from $92 million at December 31, 2014.
- Net interest income for the three-months ended March 31, 2015 totaled $5.3 million compared to $5.2 million for the same period of 2014. Interest income associated with discount accretion on purchased loans, deferred costs and deferred fees will vary due to the timing and nature of loan principal payments. Earning asset leverage was the primary driver in year-over-year results, as average earning loans and investments increased to $428 million for the quarter ended March 31, 2015, compared to $354 million for the same period of 2014.
- Net interest margin for the three-months ended March 31, 2015 was 4.73%, compared to 5.40% for the same period of 2014. The margin for the first quarter of 2015 reflects the variable pace of discount accretion recognition within interest income and the impact of fair value amortization on the interest expense of acquired deposits. For the quarter ended March 31, 2015, the earning asset portfolio yield was influenced by a $.42 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $.35 million decrease in the fair value amortization on deposits when compared to the same period of 2014. The margin declined by 67 basis points during the quarter compared to a year earlier, nearly all related to loan and deposit accretion fluctuations.
- Nonperforming assets increased to $15.61 million at March 31, 2015, from $14.34 million at December 31, 2014. The first quarter of 2015 increase resulted from the Bank's delayed resolution of several acquired nonperforming loans from previous acquisitions.
- The provision for loan losses for the three-months ended March 31, 2015 was $275,000, compared to $219,000 for the same period of 2014. The increase for the 2015 period was primarily the result of an increase in loan originations. As a result, the allowance for loan losses was $1.35 million at March 31, 2015, representing 0.35% of total loans, compared to $1.29 million, or 0.33% of total loans, at December 31, 2014. Management expects both the allowance for loan losses and the related provision for loan losses to increase in the future due to the gradual accretion of the discount on the acquired loan portfolios and an increase in new loan originations.
Balance Sheet Review
Total assets were $487 million at March 31, 2015, an increase of $7 million, or 1.48%, when compared to December 31, 2014. Loans held for sale increased by $5.3 million or 73% during the quarter and were offset by a $1.5 million or 0.39% decline in loans held for investment and a $2.5 million or 6.96% decline in investments available for sale.
Total deposits were $404 million at March 31, 2015, an increase of $16 million, or 4.25%, when compared to December 31, 2014. The increase was primarily assisted by a $9.5 million or 10.38% increase in non-interest bearing accounts. The increase in deposits resulted in a $10 million decrease in short-term borrowings over the quarter.
Stockholders' equity decreased to $65.7 million at March 31, 2015 from $66.6 million at December 31, 2014 and increased from $54.9 million at March 31, 2014. The decrease over the first quarter of 2015 related to an increase in the Bay Bank retirement income plan liability due to changes in actuarial assumptions, offset by related deferred taxes. The book value of Bay's common stock was $5.96 per share at March 31, 2015, compared to $6.05 per share at December 31, 2014.
Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and real estate acquired through foreclosure, increased slightly to $15.61 million at March 31, 2015 from $14.34 million at December 31, 2014. The increase related to a $.8 million reclassification of troubled debt restructurings to impaired loans offset by a decrease in nonaccrual loans. Nonperforming assets represented 3.22% of total assets at March 31, 2015, which was slightly elevated from the 2.99% recorded at December 31, 2014.
At March 31, 2015, the Bank remained above all "well-capitalized" regulatory requirement levels. The Bank's tier 1 risk-based capital ratio was 16.22% at March 31, 2015 as compared to 16.31% at December 31, 2014 and 15.23% at March 31, 2014. Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the investment portfolio.
Review of Financial Results
Net income for the three-months ended March 31, 2015 was $0.34 million compared to net income of $0.08 million for the same period of 2014. Individual categories reflect variability between years.
Net interest income increased by $0.2 million for the quarter ended March 31, 2015 when compared to the same period of 2014. The increase was supported by a $69 million growth in average interest-earning assets largely due to the Slavie Bank Acquisition ("the Slavie Acquisition") in May 30, 2014, offset by a $.42 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $.35 million decrease in the fair value amortization on deposits. Excluding the impact of the fair value accounting, net interest income increased by $.93 million from the quarter ended March 31, 2014. The net interest margin for the first quarter of 2015 decreased to 4.73% from 5.40% for the first quarter of 2014 due to the decline in discount accretion on loans and deposits. As of March 31, 2015, the remaining net loan discounts on the Bank's loan portfolio, including loans acquired in "the Slavie Acquisition," totaled $13.4 million.
Noninterest income for the three-months ended March 31, 2015 was $1.2 million compared to $1.3 million for the same quarter of 2014. This decrease was primarily the result of $.06 million decrease in electronic banking fees and a $.09 million decrease in other income partially offset by a $.08 million increase in mortgage banking fees and gains. Expectations are for increased mortgage fees and gains to expand in 2015.
Noninterest expense reduction is a key focus for 2015 net income improvement. For the three-months ended March 31, 2015 noninterest expense was $5.7 million compared to $6.3 million for the first quarter of 2014. The primary contributors to the decrease when compared to the first quarter of 2014 decreases of $.45 million in salary and employee benefits, $.14 million in foreclosed property expenses and a decrease of $.11 million in Merger-related expenses.
In the fourth quarter of 2014, Bay filed amended 2011 and 2012 Federal and Maryland tax returns for the former Carrollton Bancorp, resulting in the accrual of $.6 million in tax refunds. Combined with a reversal of a deferred tax valuation allowance, the Bank recognized $1.2 million in favorable tax benefits in the fourth quarter of 2014.
Bay Bancorp, Inc. Information
Bay Bancorp, Inc. is a financial holding company and a savings and loan holding company headquartered in Lutherville, Maryland. Through Bay Bank, FSB, its federal savings bank subsidiary, Bay Bancorp, Inc. serves the community with a network of 10 branches strategically located throughout the Baltimore Metropolitan Statistical Area, particularly Baltimore City and the Maryland counties of Baltimore, Anne Arundel, Howard, Carroll, and Harford. The Bank serves local consumers, small and medium size businesses, professionals and other valued customers by offering a broad suite of financial products and services, including on-line and mobile banking, commercial banking, cash management, mortgage lending and retail banking. The Bank funds a variety of loan types including commercial and residential real estate loans, commercial term loans and lines of credit, consumer loans and letters of credit. The Bank's subsidiary, Bay Financial Services, Inc., provides investment advisory and brokerage services. Additional information is available at www.baybankmd.com.
The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Bay Bancorp, Inc. with the Securities and Exchange Commission entitled "Risk Factors".
|Bay Bancorp, Inc.|
|Consolidated Balance Sheets|
|March 31,||March 31,|
|2015||December 31,||2014||December 31,|
|Cash and due from banks||$ 6,335,049||$ 7,062,943||$ 7,706,885||$ 7,126,720|
|Interest bearing deposits with banks and federal funds sold||17,250,151||9,794,382||43,371,284||16,146,340|
|Total Cash and Cash Equivalents||23,585,200||16,857,325||51,078,169||23,273,060|
|Time deposits with banks||--||34,849||--||--|
|Investment securities available for sale, at fair value||32,890,719||35,349,889||36,040,327||36,586,669|
|Investment securities held to maturity, at amortized cost||1,296,793||1,315,718||--||--|
|Restricted equity securities, at cost||1,291,095||1,862,995||791,195||1,009,695|
|Loans held for sale||12,494,787||7,233,306||4,983,638||12,836,234|
|Loans, net of deferred fees and costs||391,537,271||393,051,192||311,969,640||320,680,332|
|Less: Allowance for loan losses||(1,353,849)||(1,294,976)||(941,715)||(851,000)|
|Real estate acquired through foreclosure||1,501,135||1,480,472||1,529,334||1,290,120|
|Premises and equipment, net||5,398,901||5,553,957||5,771,667||5,998,532|
|Bank owned life insurance||5,516,549||5,485,377||5,388,898||5,356,575|
|Core deposit intangible||3,223,737||3,478,282||3,719,384||3,993,679|
|Deferred tax assets, net||4,117,563||3,214,100||5,364,441||6,564,121|
|Accrued interest receivable||1,300,297||1,306,111||1,045,383||1,186,748|
|Accrued taxes receivable||2,819,468||3,122,885||539,781||--|
|Defined benefit pension asset||--||680,668||--||--|
|Total Assets||$ 487,030,660||$ 479,942,985||$ 429,592,997||$ 419,089,303|
|Noninterest-bearing deposits||$ 101,629,926||$ 91,676,534||$ 95,090,887||$ 90,077,139|
|Defined benefit pension liability||1,731,102||--||131||42,492|
|Accrued expenses and other liabilities||3,194,319||3,319,567||2,707,149||3,499,072|
|Common stock - par value $1.00, authorized 20,000,000 shares, issued and outstanding 11,014,517, 11,014,517, 9,379,753 and 9,379,753 shares as of March 31, 2015, December 31, 2014, March 31, 2014 and December 31, 2013, respectively.||11,014,517||11,014,517||9,379,753||9,379,753|
|Additional paid-in capital||43,372,280||43,228,950||36,497,449||36,357,001|
|Accumulated other comprehensive income||184,285||1,663,514||1,285,760||1,113,917|
|Total Stockholders' Equity||65,650,640||66,643,286||54,948,294||54,554,268|
|Total Liabilities and Stockholders' Equity||$ 487,030,660||$ 479,942,985||$ 429,592,997||$ 419,089,303|
|Bay Bancorp, Inc.|
|Consolidated Statements of Income (Loss)|
|Three Months Ended March 31,|
|Interest and fees on loans||$ 5,507,767||$ 5,140,386|
|Interest on loans held for sale||61,511||85,801|
|Interest and dividends on securities||257,436||247,349|
|Interest on deposits with banks and federal funds sold||10,612||13,368|
|Total Interest Income||5,837,326||5,486,904|
|Interest on deposits||484,401||309,059|
|Interest on short-term borrowings||13,776||--|
|Total Interest Expense||498,177||309,059|
|Net Interest Income||5,339,149||5,177,845|
|Provision for loan losses||275,109||219,165|
|Net interest income after provision for loan losses||5,064,040||4,958,680|
|Electronic banking fees||576,190||639,994|
|Mortgage banking fees and gains||393,642||312,675|
|(Loss) gain on sale of real estate acquired through foreclosure||(628)||1,829|
|Service charges on deposit accounts||79,017||92,513|
|Gain on securities sold||77,490||--|
|Total Noninterest Income||1,237,220||1,253,372|
|Salary and employee benefits||2,919,119||3,365,432|
|Furniture and equipment expenses||275,401||312,129|
|Legal, accounting and other professional fees||368,028||394,120|
|Data processing and item processing services||342,673||275,150|
|FDIC insurance costs||106,311||67,709|
|Advertising and marketing related expenses||28,749||39,405|
|Foreclosed property expenses||60,363||199,363|
|Loan collection costs||87,510||47,179|
|Core deposit intangible amortization||254,546||274,295|
|Merger and acquisition related expenses||--||111,323|
|Total Noninterest Expenses||5,699,884||6,339,673|
|Income (loss) before income taxes||601,376||(127,621)|
|Income tax (benefit) expense||258,123||(209,356)|
|Net income||$ 343,253||$ 81,735|
|Basic net (loss) income per common share||$ 0.03||$ 0.01|
|Diluted net (loss) income per common share||$ 0.03||$ 0.01|
|Bay Bancorp, Inc.|
|Consolidated Statements of Stockholders' Equity|
|For the Three Months Ended March 31, 2015 and 2014|
|Balance December 31, 2013||$ 9,379,753||$ 36,357,001||$ 7,703,597||$ 1,113,917||$ 54,554,268|
|Other comprehensive income||--||171,843||171,843|
|Balance March 31, 2014||$ 9,379,753||$ 36,497,449||$ 7,785,332||$ 1,285,760||$ 54,948,294|
|Balance December 31, 2014||$ 11,014,517||$ 43,228,950||$ 10,736,305||$ 1,663,514||$ 66,643,286|
|Other comprehensive income||--||(1,479,229)||(1,479,229)|
|Balance March 31, 2015||$ 11,014,517||$ 43,372,280||$ 11,079,558||$ 184,285||$ 65,650,640|
|Bay Bank, FSB|
|To Be Well|
|To Be Considered||Prompt Corrective|
|Actual||Adequately Capitalized||Action Provisions|
|As of March 31, 2015:|
|Total Risk-Based Capital Ratio||$ 64,172||16.57 %||$ 30,982||8.00 %||$ 38,728||10.00 %|
|Tier I Risk-Based Capital Ratio||$ 62,818||16.22 %||$ 15,491||4.00 %||$ 23,237||6.00 %|
|Leverage Ratio||$ 62,818||13.01 %||$ 19,314||4.00 %||$ 24,142||5.00 %|
|As of December 31, 2014:|
|Total Risk-Based Capital Ratio||$ 62,743||16.66 %||$ 30,129||8.00 %||$ 37,661||10.00 %|
|Tier I Risk-Based Capital Ratio||$ 61,448||16.31 %||$ 15,070||4.00 %||$ 22,605||6.00 %|
|Leverage Ratio||$ 61,448||12.94 %||$ 18,995||4.00 %||$ 23,743||5.00 %|
|As of September 30, 2014:|
|Total Risk-Based Capital Ratio||$ 60,376||16.14 %||$ 29,922||8.00 %||$ 37,402||10.00 %|
|Tier I Risk-Based Capital Ratio||$ 59,247||15.84 %||$ 14,961||4.00 %||$ 22,441||6.00 %|
|Leverage Ratio||$ 59,247||12.51 %||$ 18,943||4.00 %||$ 23,679||5.00 %|
|As of June 30, 2014:|
|Total Risk-Based Capital Ratio||$ 60,205||15.99 %||$ 30,122||8.00 %||$ 37,653||10.00 %|
|Tier I Risk-Based Capital Ratio||$ 59,105||15.70 %||$ 15,061||4.00 %||$ 22,592||6.00 %|
|Leverage Ratio||$ 59,105||12.27 %||$ 19,263||4.00 %||$ 24,079||5.00 %|
|As of March 31, 2014:|
|Total Risk-Based Capital Ratio||$ 49,354||15.53 %||$ 25,423||8.00 %||$ 31,778||10.00 %|
|Tier I Risk-Based Capital Ratio||$ 48,412||15.23 %||$ 12,711||4.00 %||$ 19,067||6.00 %|
|Leverage Ratio||$ 48,412||11.44 %||$ 16,927||4.00 %||$ 21,159||5.00 %|
|As of December 31, 2013:|
|Total Risk-Based Capital Ratio||$ 47,815||14.68 %||$ 26,079||8.00 %||$ 32,562||10.00 %|
|Tier I Risk-Based Capital Ratio||$ 46,964||14.42 %||$ 13,025||4.00 %||$ 19,537||6.00 %|
|Leverage Ratio||$ 46,964||11.41 %||$ 16,461||4.00 %||$ 20,577||5.00 %|
|Bay Bancorp, Inc.|
|Selected Financial Data|
|Three Months Ended||Twelve Months Ended|
|March 31, 2015||March 31, 2014||December 31, 2014||December 31, 2014||December 31, 2013|
|Loans (net of deferred fees and costs)||391,537,271||311,969,640||393,051,192||393,051,192||320,680,332|
|Allowance for loan losses||1,353,849||941,715||1,294,976||1,294,976||851,000|
|Net income (loss)||343,253||81,735||1,310,327||3,032,708||3,241,134|
|Loans (net of deferred fees and costs)||392,780,700||317,227,783||392,275,709||364,511,290||259,698,504|
|Return on average assets||0.29%||0.08%||1.09%||0.66%||0.90%|
|Return on average equity||2.08%||0.61%||7.87%||4.93%||6.68%|
|Yield on average interest-earning assets||5.17%||5.72%||5.90%||5.60%||5.71%|
|Rate on average interest-bearing liabilities||0.63%||0.46%||0.43%||0.42%||0.55%|
|Net interest spread||4.54%||5.26%||5.47%||5.18%||5.16%|
|Net interest margin||4.73%||5.40%||5.59%||5.31%||5.33%|
|Book value per share||$ 5.96||$ 4.99||$ 6.05||$ 6.05||$ 5.83|
|Basic net income per share||0.03||0.01||0.12||0.29||0.39|
|Diluted net income per share||0.03||0.01||0.12||0.29||0.39|
|March 31, 2015||March 31, 2014||December 31, 2014|
|Asset Quality Ratios:|
|Allowance for loan losses to loans||0.35%||0.30%||0.33%|
|Nonperforming loans to total loans||3.59%||3.34%||3.27%|
|Nonperforming assets to total assets||3.22%||2.69%||2.99%|
|Net charge-offs annualized to avg. loans||0.06%||0.17%||0.06%|
|Capital Ratios (Bay Bank, FSB):|
|Total risk-based capital ratio||16.57%||15.53%||16.66%|
|Tier 1 risk-based capital ratio||16.22%||15.23%||16.31%|
CONTACT: For investor inquiries contact: Joseph J. Thomas, Chairman, President and CEO 410-536-7336 firstname.lastname@example.org 7151 Columbia Gateway Drive, Suite A Columbia, MD 21046 For further information contact: Larry D. Pickett, Chief Financial Officer email@example.com 410-427-3726