ES Bancshares reports net income of $867 thousand, or $0.26 per share, and an increase in book value per share to $5.10 for the six months ended June 30, 2017.

Net income was driven by the gain on branch sale and 13% loan growth for the first six months ended June 30, 2017. 

Quarterly earnings of $744 thousand, or $0.22 per common share for the quarter ended June 30, 2017, as compared to $129 thousand or $0.04 per common shares for the quarter ended June 30, 2016. 

NEWBURGH, N.Y., July 27, 2017 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTC:ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today announced a $615 thousand increase in net income to $744 thousand, or $0.22 per common share for the quarter ended June 30, 2017, as compared to $129 thousand, or $0.04 per common share for the quarter ended June 30, 2016.  The improvement for the quarter was driven by a $1.7 million increase in non-interest income primarily as a result of the sale of its New Paltz, NY branch.  In addition, net interest income increased $422 thousand, or 23.9% resulting from a $42.2 million or 22.7% increase in loans receivable to $228.3 million as of June 30 2017 compared to $186.1 million as of June 30, 2016.  The increase in non-interest and net interest income was partially offset by higher provision for loan losses of $975 thousand as well as non-interest expenses of $223 thousand and higher income taxes.

Net income for the six months ended June 30, 2017 was $867 thousand, or $0.26 per share compared to $214 thousand, or $0.06 per share for the period ended June 30, 2016.  The primary drivers for the increase was a $1.7 million increase in non-interest income resulting largely from the sale of the New Paltz, NY branch, and a $731 thousand, or 21.0% increase in net interest income resulting from the above mentioned increase in loans receivable. This increase was partially offset by higher provision for loan losses of $1.0 million as well as non-interest expenses of $390 thousand and higher income taxes.

Chief Executive Officer Philip Guarnieri stated, “We are pleased with the progress the Bank has made in the past eighteen months.  The sale of the New Paltz Branch was a significant strategic move for the Bank, and the settlement of that transaction was successfully completed this quarter.  Also, our loan portfolio continues to grow while asset quality has remains strong.” He continued, “We are further encouraged by the improvement in core earnings for the Bank, and look forward to continued growth.”

President & Chief Operating Officer Thomas Sperzel commented, “…the sale of our New Paltz Branch has contributed significantly to the Bank’s earnings and capital, and has provided flexibility for the Bank’s strategic initiatives.  We continue to focus on the core drivers of earnings growth and shareholder value, and we also have successfully opened a loan production office in Brooklyn during the second quarter of 2017.”

Financial Highlights

  • Net gain on the sale of the New Paltz, NY branch of $1.8 million.
  • Net income of $744 thousand for the quarter ended June 30, 2017 compared to $129 thousand for the comparable period in 2016, representing an increase of $615 thousand.
  • Net income of $867 thousand for the year to date ended June 30, 2017 compared to $214 thousand for the comparable period in 2016.
  • Net income before taxes of $1.18 million for the quarter ended June 30, 2017 compared to $262 thousand for the comparable period in 2016, representing an increase of $918 thousand.
  • Net income before taxes of $1.47 million for the year to date ended June 30, 2017 compared to $480 thousand for the comparable period in 2016, representing an increase of $987 thousand.
  • Net interest income of $2.19 million for the quarter ended June 30, 2017 compared to $1.76 million for the comparable period in 2016, representing an increase of $422 thousand, or 23.9%
  • Provision for loan losses of $1.1 million for the quarter ended June 30, 2017 compared to $150 thousand for the comparable period in 2016.
  • Net margin of 3.49% for the quarter ended June 30, 2017 compared to 3.47% for the comparable period in 2016, representing an increase of 2 bps, or 0.6%.
  • Capital ratios of 9.0%, 11.5% and 12.8% for each of the Tier 1 Leverage ratio, Tier 1 Risk Based Capital ratio and Total risk Based Capital ratio, respectively.

Comparison of Financial Condition at June 30, 2017 and December 31, 2016

Total assets at June 30, 2017, amounted to $258.9 million, representing an increase of $22.0 million, or 9.3%, from $236.9 million at December 31, 2016.  The increase in assets consisted primarily of increases in total loans receivable, net of $25.6 million and cash and cash equivalents of $3.3 million. These increases were offset by a decrease in loans held for sale of $6.6 million and in total securities of $1.1 million.  The loans held for sale were those sold in the New Paltz branch sale.

Loans receivable, net, increased $25.6 million, or 12.8%, to $225.0 million at June 30, 2017 from $199.4 million at December 31, 2016. Commercial and multifamily real estate loans increased $26.9 million, or 22.8%, from $118.1 million to $145.0 million. Residential real estate mortgage loans increased $5.1 million, or 13.2%, from $38.8 million to $43.9 million. Commercial loans and commercial lines of credit decreased $6.5 million, or 17.4%, from $37.1 million to $30.7 million. Home equity and consumer loans decreased $1.0 million to $4.6 million at June 30, 2017. Management continues to emphasize the origination of high quality loans for retention in the loan portfolio.

Deposits decreased by $1.4 million to $204.3 million at June 30, 2017 from $205.7 million at December 31, 2016. Non-interest bearing deposits increased $1.3 million and interest bearing deposits decreased $2.7 million. Over this six month period the net deposit activity consisted mainly of increases in savings accounts of $7.9 million and in DDA and NOW accounts of $3.1 million, partially offset by a decrease in money market accounts of $10.5 million and in certificates of deposit of $1.8 million.  These fluctuations were impacted by the sale of the New Paltz branch and the corresponding $31.3 million transfer of deposits.

Borrowings increased by $19.3 million to $31.5 million at June 30, 2017 from $12.3 million at December 31, 2016. This increase was primarily utilized to fund the New Paltz branch sale and the corresponding transfer of deposits.

Stockholders’ equity increased by $899 thousand to $16.9 million at June 30, 2017, from $16.0 million at December 31, 2016. The increase was primarily attributable to a $867 thousand increase in retained earnings. The ratio of stockholders’ equity to total assets decreased to 6.5% at June 30, 2017 from 6.8% at December 31, 2016.  Book value per share increased to $5.10 at June 30, 2017, from $4.82 at December 31, 2016.

STATEMENTS OF CONDITION            
(In Thousands)              
(Unaudited)              
               
               
  6/30/2017   3/31/2017   12/31/2016   9/30/2016
ASSETS              
Cash and cash equivalents: $ 14,042     $ 12,773     $ 10,768     $ 24,872  
               
Securities – Available For Sale   4,530       5,052       5,024       5,200  
Securities – Held To Maturity   5,762       6,069       6,402       6,831  
Total Securities   10,292       11,121       11,426       12,031  
               
Loans held for sale         6,659       6,592        
               
Loans   228,302       217,177       202,055       203,459  
Less:  allowance for loan losses   (3,335 )     (2,881 )     (2,685 )     (2,497 )
Loans, net   224,967       214,296       199,370       200,962  
               
Premises and equipment, net   3,035       3,084       3,151       3,214  
Other assets   6,587       6,051       5,552       5,946  
Total Assets $ 258,923     $ 253,984     $ 236,859     $ 247,025  
               
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Deposits:              
Demand and NOW deposit accounts $ 77,988     $ 82,137     $ 74,915     $ 77,328  
Money market accounts   18,572       28,774       29,121       29,840  
Savings accounts   53,757       47,877       45,865       47,911  
Certificates of deposit   53,935       55,535       55,767       58,761  
Total Deposits   204,252       214,323       205,668       213,840  
               
Borrowings   31,500       20,250       12,250       13,250  
Other Liabilities   6,289       3,313       2,958       4,260  
Total Liabilities   242,041       237,886       220,876       231,350  
               
Total Shareholders’ Equity   16,882       16,098       15,983       15,675  
Total Liabilities and Shareholders’ Equity $ 258,923     $ 253,984     $ 236,859     $ 247,025  
               

Results of Operations for the Quarters Ended June 30, 2017 and June 30, 2016

General.  For the quarter ended June 30, 2017, the Company recognized net income of $744 thousand, or $0.22 per basic and diluted share, as compared to net income of $129 thousand, or $0.04 per basic and diluted share, for the quarter ended June 30, 2016.

Interest Income.  Interest income increased to $2.71 million for the quarter ended June 30, 2017 compared to $2.11 million for the quarter ended June 30, 2016.

The average balance of the loan portfolio increased $48.4 million, or 26.9% to $228.4 million for the quarter ended June 30, 2017 from $180.0 million for the quarter ended June 30, 2016 while the average yield increased to 4.52% for the quarter ended June 30, 2017 from 4.39% for the quarter ended June 30, 2016. The average balance and yield of the Bank’s investment securities for the quarter ended June 30, 2017 was $10.6 million and 3.03%, respectively, as compared to an average balance of $13.0 million and a yield of 3.25% for the comparable quarter ended one-year earlier.
           
Interest Expense.  Total interest expense for the quarter ended June 30, 2017 increased by $173 thousand to $519 thousand from $346 thousand for the prior year period. Average balances of total interest-bearing liabilities increased $32.1 million, or 22.5% to $174.4 million for the quarter ended June 30, 2017, from $142.3 million for the quarter ended June 30, 2016. The average cost for those liabilities increased to 1.19% from 0.97% for the same respective period one year earlier.

Regular savings account average balances increased $17.3 million, or 53.2% to $49.8 million, from $32.5 million for the quarter ended June 30, 2016. These had an average cost of 0.98% for the quarter ended June 30, 2017 compared to an average cost of 0.81% for the quarter ended June 30, 2016.  The Bank has promoted savings accounts during the current period in efforts to improve core deposit funding. 

The average balances of the Bank’s certificates of deposit portfolio increased to $56.8 million at an average cost of 1.33% over the quarter ended June 30, 2017, from $55.5 million at an average cost of 1.24% over the same quarter ended one-year earlier.

Average money market account balances increased $2.1 million to $26.0 million at an average cost of 0.45% for the quarter ended June 30, 2017, from $23.9 million at an average cost of 0.44% for the quarter ended June 30, 2016.

For the quarter ended June 30, 2017, the average balance of the Company’s borrowed funds was $23.1 million with an average cost of 2.74%, as compared to $17.8 million and an average cost of 1.51% for the quarter ended June 30, 2016The Bank has utilized Federal Home Loan Bank advances to provide funding for the sale of the New Paltz branch.  Further, the Company has a line of credit with a correspondent bank.  This credit facility is used primarily to provide funds to downstream to the Bank to enable it to maintain strong capital ratios and leverage the balance sheet by increasing assets. 

Net Interest Income.  Net interest income was approximately $2.2 million for the quarter ended June 30, 2017, as compared to $1.8 million for the same quarter in the prior yearThe average interest rate spread decreased to 3.12% for the quarter ended June 30, 2017, from 3.18% for the quarter ended June 30, 2016, while the net interest margin increased to 3.49%, from 3.47% over the same respective periods.

Provision for Loan Losses.  For the quarter ended June 30, 2017, management recorded a $1.1 million provision for loan losses. The increase in the provision was largely to accommodate certain restructurings within the Bank’s Taxi Medallion loan portfolio. 

While all loans in the portfolio are performing as agreed, certain loans were targeted for restructure to avoid any potential future criticism.  The provision recorded in the second quarter is sufficient to accommodate any anticipated charge-offs associated with those restructures.  

As of June 30, 2017, the Taxi Medallion portfolio equals $6.2 million representing 2.7% of the Bank’s total loan portfolio.

Comparatively, there was a $150 thousand provision for loan loss for the quarter ended June 30, 2016.

The provision recorded during the period was done so in conjunction with the Bank’s allowance for loan loss methodology. It is calculated using a historical charge-off basis as well as other qualitative factors which reflect management’s overall perceived risk in the portfolio.

Non-Interest Income.  Non-interest income for the quarter ended June 30, 2017 increased $1.7 million to $2.1 million as compared to $353 thousand for the quarter ended June 30, 2016. This increase is primarily resulting from a net increase in gain on branch sale of $1.8 million, partially offset by decreases in deposit account service charges of $17 thousand and in other income of $13 thousand.

Non-Interest Expense.  Non-interest expense for the quarter ended June 30, 2017 increased $223 thousand when compared to the same quarter in 2016, primarily resulting from net increases of $61 thousand in other expenses, professional fees of $58 thousand, compensation and benefits of $56 thousand, and loan origination and servicing of $24 thousand.

Income Tax Expense.  Income tax expense was $436 thousand for the quarter ended June 30, 2017 as compared to $133 thousand for the quarter ended June 30, 2016.  The increase was due to a higher level of pre-tax income.

Results of Operations for the Six Months Ended June 30, 2017 and June 30, 2016

General.  For the six months ended June 30, 2017, the Company recognized net income of $867 thousand, or $0.26 per basic and diluted share, as compared to net gain of $214 thousand, or $0.06 per basic and diluted share, for the six months ended June 30, 2016.

Interest Income.  Interest income increased by $1.1 million, from $4.1 million to $5.2 million, for the six months ended June 30, 2017 compared to the six months ended June 30, 2016. This increase was primarily attributable to increase in interest income from loans of $1.0 million.

The average balance of the loan portfolio increased $45.9 million, or 26.3% to $220.4 million for the six months ended June 30, 2017 from $174.5 million for the six months ended June 30, 2016, while the average yield increased from 4.43% for the six months ended June 30, 2016 to 4.46% for the six ended June 30, 2017. The average balance and yield of the Bank’s investment securities for the six months ended June 30, 2017, was $10.9 million and 3.13%, respectively, as compared to an average balance of $14.1 million and a yield of 3.23% for the comparable six month period one-year earlier.

Interest Expense.  Total interest expense for the six months ended June 30, 2017, increased by $298 thousand, from $669 thousand to $967 thousand, when compared to the prior year period. Average balances of total interest-bearing liabilities increased $30.0 million to $167.9 million for the six months ended June 30, 2017, from $137.9 million for the six months ended June 30, 2016. The average cost for those liabilities increased to 1.16% from 0.98% for the same respective period one year earlier.

Regular savings account average balances increased by $19.9 million to $48.1 million. These had an average cost of 0.97% for the six months ended June 30, 2017 compared to an average cost of 0.79% for the six months ended June 30, 2016.  The Bank has promoted savings accounts during the current period in efforts to improve core deposit funding. 

The average balances of the Bank’s certificates of deposit portfolio increased to $56.0 million at an average cost of 1.28% over the six months ended June 30, 2017, from $54.0 million at an average cost of 1.26% over the same period one-year earlier.

Average money market account balances increased $3.8 million to $27.9 million at an average cost of 0.44% for the six months ended June 30, 2017, from $24.1 million at an average cost of 0.43% for the six months ended June 30, 2016.

For the six months ended June 30, 2017, the average balance of the Company’s borrowed funds was $17.8 million and its average cost was 3.10%, as compared to $18.8 million and an average cost of 1.47% for the six months ended June 30, 2016.

Net Interest Income.  Net interest income increased $731 thousand, or 21.0% to $4.2 million for the six months ended June 30, 2017, as compared to $3.5 million for the same period in the prior year. The interest rate spread decreased to 3.08% for the six months ended June 30, 2017, from 3.20% for the six months ended June 30, 2016, while the net interest margin decreased to 3.45% from 3.51%, over the same respective periods.

Provision for Loan Losses.  For the six months ended June 30, 2017 the Company recorded a $1.3 million provision for loan losses. The increase in the provision was largely to accommodate certain restructurings within the Bank’s Taxi Medallion loan portfolio. 

While all loans in the portfolio are performing as agreed, certain loans were targeted for restructure to avoid any potential future criticism.  The provision recorded in the second quarter is sufficient to accommodate any anticipated charge-offs associated with those restructures.  

As of June 30, 2017, the Taxi Medallion portfolio equals $6.2 million representing 2.7% of the Bank’s total loan portfolio.

Comparatively, the provision was $288 thousand for the six months ended June 30, 2016.

Management records loan loss provision to reflect the overall growth in the portfolio as well as the evaluated risk in the portfolio. The provision recorded during the period was done so in conjunction with the Bank’s allowance for loan loss methodology. It is calculated using a historical charge-off basis as well as other qualitative factors which reflect management’s overall perceived risk in the portfolio.

Non-Interest Income.  Non-interest income for the six months ended June 30, 2017 increased $1.7 million to approximately $2.4 million as compared to $674 thousand for the six months ended June 30, 2016. This increase was primarily the result of a net increase in gain on branch sale of $1.8 million. These increases were partially offset by decreases in gain on sale of securities $102 thousand and deposit account service charges of $24 thousand.

Non-Interest Expense.  Non-interest expense for the six months ended June 30, 2017 increased $390 thousand when compared to the same period in 2016. This increase was primarily the result of net increases in professional fees of $113 thousand, compensation and benefits of $107 thousand, and other expense of $80 thousand.

Income Tax Expense.  Income tax expense was $600 thousand for the six months ended June 30, 2017 as compared to $266 for the six months ended June 30, 2016. The increase was due to a higher level of pre-tax income.

ES BANCSHARES, INC.              
STATEMENTS OF INCOME              
(In Thousands)              
(Unaudited)              
               
  Quarter to Date   Quarter to Date   Year to Date   Year to Date
  6/30/2017   6/30/2016   6/30/2017   6/30/2016
               
Total interest income $ 2,705     $ 2,110     $ 5,176     $ 4,147  
Total interest expense   519       346       967       669  
Net interest income   2,186       1,764       4,209       3,478  
Provision for loan losses   1,125       150       1,320       288  
               
Net interest income after              
provision for loan loss   1,061       1,614       2,889       3,190  
               
Total non-interest income   2,047       353       2,352       674  
               
Compensation and benefits   979       923       1,998       1,891  
Occupancy and equipment   245       248       516       504  
Professional fees   186       128       336       223  
Data processing service fees   111       96       220       176  
NYS Banking & FDIC Assessment   56       56       116       108  
Other operating expenses   351       254       588       482  
Total non-interest expense   1,928       1,705       3,774       3,384  
               
Net Income Before Taxes   1,180       262       1,467       480  
               
Provision for income taxes   436       133       600       266  
Net income   744       129       867       214  
               
               
               
  Quarter Ended   Quarter Ended   Quarter Ended   Quarter Ended
  6/30/2017   3/31/2017   12/31/2016   9/30/2016
               
Total interest income $ 2,705     $ 2,471     $ 2,405     $ 2,271  
Total interest expense   519       448       458       424  
Net interest income   2,186       2,023       1,947       1,847  
Provision for loan losses   1,125       195       185       100  
               
Net interest income after              
provision for loan loss   1,061       1,828       1,762       1,747  
               
Total non-interest income   2,047       305       495       247  
               
Compensation and benefits   979       1,019       1,049       957  
Occupancy and equipment   245       271       262       259  
Professional fees   186       150       99       125  
Data processing service fees   111       109       104       96  
NYS Banking & FDIC Assessment   56       60       61       54  
Other operating expenses   351       237       277       248  
Total non-interest expense   1,928       1,846       1,852       1,739  
               
Net Income Before Taxes   1,180       287       405       255  
               
Provision for income taxes   436       164       72       130  
Net income   744       123       333       125  
               
Basic Earnings per Share $ 0.22     $ 0.04     $ 0.10     $ 0.04  
               
Diluted Earnings per Share $ 0.22     $ 0.04     $ 0.10     $ 0.04  
               
               
ES BANCSHARES, INC.              
OTHER FINANCIAL MEASURES            
(In Thousands)              
(Unaudited)              
  Quarter Ended   Quarter Ended   Quarter Ended   Quarter Ended
  6/30/2017   3/31/2017   12/31/2016   9/30/2016
Asset Quality              
Allowance for Loan Losses $ 3,335     $ 2,881     $ 2,685     $ 2,497  
Nonperforming Loans / Total Loans   1.3 %     0.9 %     1.0 %     1.0 %
Nonperforming Assets / Total Assets   1.2 %     0.9 %     1.0 %     1.0 %
ALLL / Nonperforming Loans   113.2 %     136.9 %     127.6 %     118.7 %
ALLL / Loans, Gross   1.5 %     1.29 %     1.29 %     1.23 %
               
Capital              
Shares Issue – Basic   3,312,867       3,312,867       3,312,867       3,312,867  
Book Value per Share $ 5.10     $ 4.86     $ 4.82     $ 4.73  
Tier 1 Capital Ratio   8.97 %     8.59 %     8.41 %     8.59 %
Tier 1 Risk Based Capital Ratio   11.50 %     10.44 %     11.04 %     10.96 %
Total Risk Based Capital Ratio   12.76 %     11.70 %     12.29 %     12.21 %
               
               
  Quarter Ended   Quarter Ended   Quarter Ended   Quarter Ended
  6/30/2017   3/31/2017   12/31/2016   9/30/2016
Profitability              
Yield on Average Earning Assets   4.32 %     4.20 %     4.08 %     4.09 %
Cost of Avg. Interest Bearing Liabilities   1.19 %     1.13 %     1.09 %     1.07 %
Net Spread   3.12 %     3.08 %     2.99 %     3.02 %
Net Margin   3.49 %     3.44 %     3.31 %     3.32 %
               
               

This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within Empire State Bank’s control. The forward looking statements included in this report are made only as of the date of this report. We have no intention, and do not assume any obligation, to update these forward-looking statements.

Contacts:
Philip Guarnieri, CEO
Thomas Sperzel, President & COO
Frank J. Gleeson, SVP & CFO
(845) 451-7800

Primary Logo

Trading statement for the quarter-ended 30 June 2017

OXFORD, United Kingdom, July 27, 2017 (GLOBE NEWSWIRE) — Sophos Group plc (the “Group”) (LSE:SOPH), a leading provider of cloud enabled enduser and network security solutions, today issues its trading update for the first quarter ended 30 June 2017.

Financial and operational highlights

  • Q1 billings1 increased by 16% (+19% at constant currency), reflecting continued strong momentum despite a demanding prior-year comparative
    • Continued strong performance in enduser security, with billings growth in excess of 30%
    • Intercept X, our next-generation endpoint solution, and Sophos Central cloud management platform both showed continued strong momentum in the quarter
    • High single-digit growth in network security, reflecting a temporary shift in our go to market effort to appropriately respond to the surge in customer interest in our next-generation anti-ransomware endpoint solutions
    • At constant currency, the Americas increased by over 25%, with mid-teens billings growth in both EMEA and APJ
  • Revenue increased 14% at constant currency with the subscription component up 20%, reflecting the contribution from prior-periods subscription billings growth now feeding into revenue
  • Adjusted operating profit2 declined to $3.4 million, reflecting a higher proportion of subscription billings in the mix, the majority of which are deferred and recognised as revenue in future periods
  • Continued strong cash generation in the period, with unlevered free cash flow3 of $30.3 million
  • Reaffirm outlook for FY18:
    • Mid to high-teens billings growth
    • 50-100 bps improvement in Cash EBITDA4 margin
    • Free cash flow broadly unchanged, from a high FY17 base

Financial highlights

  Q1 FY18       Q1 FY17     Growth
GAAP measures $M   $M   %
Revenue 141.8   127.4   11.3
Operating loss (15.6)   (4.9)   218.4
Net cash flow from operating activities             30.3   29.5   2.7
 

Non GAAP measures

     
Billings 164.3   141.9   15.8
Cash EBITDA 27.3   25.6   6.6
Adjusted operating profit 3.4   9.4   (63.8)
Unlevered free cash flow 30.3   28.8   5.2

Kris Hagerman, Chief Executive Officer, commented:
“We are encouraged to report a first quarter financial performance ahead of our expectations.  The demand environment in cybersecurity remained strong, particularly in the enduser segment, where we saw continued significant customer and partner interest in our leading next-generation anti-ransomware solutions, with awareness further raised following recent high-profile global attacks like WannaCry and Petya.  Our core strategy continues to be differentiated and effective:  we work in partnership with our channel to deliver innovative, simple, and highly effective cybersecurity solutions for mid-market enterprises, synchronizing across enduser and network security. Sophos continues to grow faster than the overall industry and gain share.  We are well-positioned to continue our momentum and deliver against our full-year expectations and we are pleased to reaffirm our outlook.”

About
The Sophos Group is a leading global provider of cloud-enabled enduser and network security solutions, offering organisations end-to-end protection against known and unknown IT security threats through products that are easy to install, configure, update and maintain.  For further information please visit: www.sophos.com.  The Group has over 30 years of experience in enterprise security and has built a portfolio of products that protects over 260,000 organisations and over 100 million endusers in 150 countries, across a variety of industries.

Forward-looking statements
Certain statements in this announcement constitute “forward-looking statements”.  These forward-looking statements involve risks, uncertainties and other factors that may cause the Group’s actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements.  These factors include: general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance or programmes, or the delivery of products or services under them; structural change in the security industry; relationships with customers; competition; and ability to attract personnel.  You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement.  The Group undertakes no obligation to update or revise any forward-looking statement to reflect any change in expectations or any change in events, conditions or circumstances.

Contact

Sophos Group plc
Tel: +44 (0) 1235 559 933
Kris Hagerman, Chief Executive Officer
Nick Bray, Chief Financial Officer
Derek Brown, VP Investor Relations
    Financial Public Relations
Tulchan Communications
Tel: +44 (0) 20 7353 4200

 

Conference call and webcast
Sophos management will host a conference call and audio-webcast, for registered participants, at 09:30 (GMT) today.  A replay of the audio-webcast will be also accessible via the Sophos investor website following the presentation.

To register for the webcast and access the presentation materials please visit:

https://investors.sophos.com/events-and-presentations

Conference calls dial in details:

Telephone:
+44 (0) 20 3427 1916 (UK)
+1 646 254 3367 (US)
Conference call confirmation code: 9489030

Participants are advised to visit the website at least 15 minutes prior to the commencement of the call in order to register and, for those accessing the webcast, in order to download and install any audio software that may be required.

NB: Conference call participants will be able to ask questions during the Q&A session, but those on the webcast will be in a listen-only mode.

  1. Billings represents the value of products and services invoiced to customers after receiving a purchase order from the customer and delivering products and services to them, or for which there is no right to a refund.  Billings does not equate to statutory revenue.
  2. Adjusted operating profit represents the Group’s operating profit / (loss) adjusted for amortisation charges, share option charges and exceptional items.
  3. Unlevered free cash flow represents Cash EBITDA less purchases of property, plant and equipment and intangibles, plus cash flows in relation to changes in working capital and taxation.
  4. Cash earnings before interest, taxation, depreciation and amortisation (“Cash EBITDA”) is defined as the Group’s operating profit/ (loss) adjusted for depreciation and amortisation charges, any gain or loss on the sale of tangible and intangible assets, share option charges, unrealised foreign exchange differences and exceptional items, with billings replacing recognised revenue.

Primary Logo

First Mid-Illinois Bancshares, Inc. Announces Second Quarter 2017 Results and Organizational Changes

MATTOON, Ill., July 27, 2017 (GLOBE NEWSWIRE) — First Mid-Illinois Bancshares, Inc. (NASDAQ:FMBH) (the “Company”) today announced its financial results for the quarter and year-to-date period ended June 30, 2017 and organizational changes within the leadership team.

Highlights

  • Strong Year-Over-Year Growth in Net Income and Earnings per Share
  • Book Value per Share Increased by 9.3% Compared to Second Quarter Last Year
  • Improved Asset Quality Metrics Building Upon the Company’s Strong Credit Culture
  • Awarded 2016 Central/Southern Illinois Community Bank of the Year by U.S. Small Business Administration

Second Quarter Financial Summary

  • Net income of $8.2 million, or $0.66 diluted earnings per share
  • Net interest income of $24.0 million
  • Non-interest income of $8.0 million
  • Return on average assets of 1.16%

“We delivered another strong quarter of both financial and operational results,” said Joe Dively, Chairman and Chief Executive Officer.  “We continue to execute on our strategic plan to fulfill the financial needs of our communities and customers, while driving positive shareholder value.”

“The second quarter marked the first full quarter of operations following the merger and integration of our subsidiary banks.  During the period, special focus was given to improving asset quality metrics and realizing acquisition related cost savings.  These efforts by our team led to an improved efficiency ratio and net interest margin growth, which helped drive a very strong quarter of net income.”

“Finally, I am extremely proud that First Mid was awarded the 2016 Central/Southern Illinois Community Bank of the Year Award by the U.S. Small Business Administration.  This is the fourth consecutive year we have received the award and it reflects our commitment to the small businesses in the communities we serve,” Dively concluded.

Net Interest Income

Net interest income for the second quarter of 2017 increased by $1.2 million, or 5.2% compared to the first quarter of 2017.  The increase was primarily driven by higher yields in both the loan and the investment portfolio and higher accretion income from First Clover Leaf.  The second quarter 2017 included approximately $1.2 million in accelerated accretion income, which was primarily tied to one credit.  The first quarter of 2017 included accelerated accretion income of $0.9 million.

In comparison to the second quarter of 2016, net interest income increased by $8.0 million, or 50.0%.  The increase was primarily attributable to the First Clover Leaf acquisition and associated accretion income as well as loan growth and higher yields.   

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.84% for the second quarter compared to 3.37% in the same period last year.  The ratio was higher due to growth in loans and investments, as well as the First Clover Leaf acquisition, including the associated accretion income. 

Loan Portfolio

The Company continued to maintain a well-diversified loan portfolio.  Total loans were $1.83 billion at June 30, 2017 compared to $1.80 billion at the end of the prior quarter.  The increase was mostly in the categories of commercial and industrial and commercial real estate.  Loans increased from $1.32 billion in the second quarter of 2016 driven by both organic growth and the First Clover Leaf acquisition.    

Asset Quality

At June 30, 2017, nonperforming loans were 0.94% of total loans compared to 1.54% at March 31, 2017.  The Company’s allowance for loan losses was 1.00% of total loans at the end of the second quarter compared to 0.99% at March 31, 2017.   The allowance for loan losses to non-performing loans was 106.3% at June 30, 2017 versus 64.5% at March 31, 2017.  Non-performing loans were reduced by $10.5 million primarily due to the foreclosure and sale of certain assets tied to the $9.2 million credit mentioned in last quarter’s report.  The actions taken on this credit contributed to the higher provisioning expense and charge-offs, which was offset by the accelerated accretion income.      

Net charge-offs totaled $1.5 million during the second quarter compared to $0.6 million for the first quarter 2017.  The increase in net charge-offs was primarily from two credits, including the credit mentioned above where a majority of the assets were sold.

The Company recorded a provision for loan losses of $1.8 million during the second quarter compared to $1.7 million during the first quarter of 2017 and $0.7 million in the second quarter of last year.  The increase in the year-over-year provision expense is primarily related to the acquisition of First Clover Leaf and the larger overall loan portfolio as well as a higher level of non-performing loans and net charge-offs.       

Deposits

Total deposits ended the quarter at $2.29 billion, which represented a decrease of approximately $40.1 million from the prior quarter and an increase of $585.2 million from the same quarter last year.  The decrease in the current quarter was primarily seasonal and across multiple customers.  The increase from the prior year was mostly attributable to the acquisition of First Clover Leaf and the benefit of the larger combined organization where certain customers had previously maintained deposits at other financial institutions for concentration risk mitigation.  

Noninterest Income

Noninterest income for the second quarter of 2017 was $8.0 million compared to $7.5 million in the first quarter.  Increases in the second quarter were primarily in electronic banking, securities gains and a $0.9 million tax refund in other income.  As expected, insurance commissions were lower compared to the prior quarter due to the nature and seasonality of some of the business lines.  Compared to the second quarter of 2016, noninterest income increased by $1.5 million.  The year-over-year increase was primarily driven by the First Clover Leaf acquisition, the tax refund and growth in both wealth management and insurance.    

Noninterest Expenses    

Noninterest expense for the second quarter totaled $18.0 million, which was a decrease of $1.2 million versus the first quarter.  The decrease was primarily attributable to cost savings achieved from the bank merger and system integration in March and the higher acquisition related costs that were recognized in the first quarter.  The second quarter included $0.2 million in acquisition related costs. 

Noninterest expense increased by $3.8 million when compared to the second quarter of 2016 primarily due to the First Clover Leaf acquisition and related costs.  The Company’s efficiency ratio, on a tax equivalent basis, for the second quarter 2017 was 53.2% compared to 60.9% for the same period last year.

 Regulatory Capital Levels and Dividend

The Company’s capital levels remained strong at “well capitalized” levels and ended the period as follows: 

Total capital to risk-weighted assets   12.81 %
Tier 1 capital to risk-weighted assets   11.98 %
Common equity tier 1 capital to risk-weighted assets   10.88 %
Leverage ratio   9.44 %

During the second quarter, the Company paid its semi-annual dividend of $0.32, which represented a 6.7% increase over its dividend in the second quarter of last year.

Organizational Changes

First Mid announced today that Michael L. Taylor has been named Chief Operating Officer.  Mr. Taylor joined the Company in 2000 and had been serving as the Chief Financial Officer since that time.  Taylor’s expertise in the financial, operational, risk management, and regulatory compliance of the Company have been and will continue to be critical to the organization’s success.  Taylor received his Bachelor’s Degree in Finance from the University of Illinois.  He also graduated from the Graduate School of Banking in Wisconsin.  He served two terms on the Accounting Board of the American Bankers Association in Washington D.C. and also served on the Eastern Illinois University Accounting Advisory Board.  Taylor has volunteered and been involved in a number of local community events and organizations and currently serves on the Coles Together Board and First Baptist Church Diaconate.

First Mid also announced today that Matthew K. Smith has been named Chief Financial Officer.  Mr. Smith joined the Company in 2016 and has been serving as Executive Vice President, Director of Finance where he has played a role in expanding First Mid’s participation and activity in the capital markets and providing strategic guidance within the organization.  Before joining First Mid, he was the Corporate Treasurer and Vice President of Finance and Investor Relations for Consolidated Communications Holdings, Inc., a publicly traded company on NASDAQ.  Smith earned his Bachelor’s Degree in Finance and an MBA from Eastern Illinois University.  Smith also received a Master’s Degree in Accounting and Financial Management from DeVry University and is a Certified Public Accountant.  Along with volunteering in youth sports and Special Olympics, he has been involved in a number of local community boards and currently serves on the Eastern Illinois University School of Business Advisory Board.       

“Over the last couple of years the Company has grown its asset size by over 70% and significantly increased its activity and relevance in the public capital markets.  This, along with our strategic growth initiatives, is a key driver behind these organizational changes.  I am excited about the well-deserved promotions and expanded roles for Mike and Matt.  They position us well for both merger and acquisition activity and operational execution,” said Dively.

About First Mid-Illinois Bancshares, Inc.: First Mid-Illinois Bancshares, Inc. is the parent company of First Mid-Illinois Bank & Trust, N.A. (“First Mid Bank”), Mid-Illinois Data Services, Inc., and First Mid Insurance Group.  Our mission is to fulfill the financial needs of our communities with exceptional personal service, professionalism and integrity, and deliver meaningful value and results for customers and shareholders. 

First Mid Bank was first chartered in 1865 and has since grown into a more than $2.8 billion community-focused organization that provides financial services through a network of 52 banking centers in 37 Illinois and Missouri communities.  More information about the Company is available on our website at www.firstmid.com.  Our stock is traded in The NASDAQ Stock Market LLC under the ticker symbol “FMBH”.

Forward Looking Statements: This news release contains forward-looking statements about First Mid-Illinois Bancshares, Inc. for which the Company claims protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions.  Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including those described in Item 1A – “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K and the Company’s other filings with the SEC.  Furthermore, forward-looking statements speak only as of the date they are made.  Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligations to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Non-GAAP Measures:  In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures.  The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance.  Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported.  These non-GAAP financial measures are detailed as supplemental tables and include “Net Interest Margin, tax equivalent,” Tangible Book Value per Common Share,” and “Common Equity Tier 1 Capital to Risk Weighted Assets”.  While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP.  These non-GAAP financial measures may also differ from the similar measures presented by other companies.

– Tables Follow –

               
FIRST MID-ILLINOIS BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
               
      As of
      June 30,   December 31,   June 30,
        2017       2016       2016  
      (unaudited)   (audited)   (unaudited)
               
Assets              
Cash and cash equivalents   $ 73,889     $ 175,902     $ 53,072  
Investment securities     758,106       708,722       643,045  
Loans (including loans held for sale)   1,825,634       1,825,992       1,315,187  
Less allowance for loan losses     (18,209 )     (16,753 )     (15,164 )
Net loans       1,807,425       1,809,239       1,300,023  
Premises and equipment, net     39,076       40,292       29,569  
Goodwill and intangibles, net     69,517       70,623       49,147  
Bank owned life insurance     41,881       41,318       25,183  
Other assets       35,410       38,439       19,744  
Total assets     $ 2,825,304     $ 2,884,535     $ 2,119,783  
               
Liabilities and Stockholders’ Equity          
Deposits:              
Non-interest bearing   $ 425,344     $ 471,206     $ 340,576  
Interest bearing       1,864,062       1,858,681       1,363,623  
Total deposits       2,289,406       2,329,887       1,704,199  
Repurchase agreement with customers   142,411       185,763       131,099  
Other borrowings     57,254       58,157       40,000  
Junior subordinated debentures     23,959       23,917       20,620  
Other liabilities       11,383       6,138       7,245  
Total liabilities       2,524,413       2,603,862       1,903,163  
               
Total stockholders’ equity     300,891       280,673       216,620  
Total liabilities and stockholders’ equity $ 2,825,304     $ 2,884,535     $ 2,119,783  
               

FIRST MID-ILLINOIS BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
                         
          Three Months Ended   Six Months Ended
          June 30   June 30
              2017     2016     2017     2016  
Interest income:                        
Interest and fees on loans         $ 21,025   $ 13,610   $ 40,952   $ 27,202  
Interest on investment securities           4,366     3,172     8,406     6,393  
Interest on federal funds sold & other deposits         55     101     270     267  
Total interest income             25,446     16,883     49,628     33,862  
Interest expense:                        
Interest on deposits             933     575     1,812     1,154  
Interest on securities sold under agreements to repurchase         46     21     86     39  
Interest on other borrowings           287     168     561     318  
Interest on subordinated debt           227     149     444     294  
Total interest expense             1,493     913     2,903     1,805  
Net interest income             23,953     15,970     46,725     32,057  
Provision for loan losses           1,840     733     3,562     846  
Net interest income after provision for loan           22,113     15,237     43,163     31,211  
Non-interest income:                        
Trust revenues             841     794     1,771     1,775  
Brokerage commissions             509     466     1,014     914  
Insurance commissions             853     735     2,478     2,068  
Service charges             1,690     1,644     3,402     3,153  
Securities gains, net             335     404     335     664  
Mortgage banking revenues           335     238     528     333  
ATM/debit card revenue             1,665     1,472     3,233     2,961  
Other             1,741     706     2,704     1,235  
Total non-interest income           7,969     6,459     15,465     13,103  
Non-interest expense:                        
Salaries and employee benefits           10,102     7,602     20,037     15,449  
Net occupancy and equipment expense           3,116     2,646     6,249     5,525  
Net other real estate owned (income) expense         127     10     145     (9 )
FDIC insurance             290     281     469     547  
Amortization of intangible assets           559     402     1,106     857  
Stationary and supplies             186     190     371     391  
Legal and professional expense           894     917     1,725     1,701  
Marketing and donations           277     239     571     1,201  
Other             2,404     1,856     6,484     3,652  
Total non-interest expense           17,955     14,143     37,157     29,314  
Income before income taxes           12,127     7,553     21,471     15,000  
Income taxes             3,927     2,624     7,007     5,265  
Net income           $ 8,200   $ 4,929   $ 14,464   $ 9,735  
                         
Per Share Information                        
Basic earnings per common share         $ 0.66   $ 0.51   $ 1.16   $ 1.01  
Diluted earnings per common share           0.66     0.50     1.16     0.99  
                         
Weighted average shares outstanding           12,491,757     9,152,709     12,483,788     8,804,107  
Diluted weighted average shares outstanding         12,499,931     9,844,982     12,491,962     9,831,591  
                         

FIRST MID-ILLINOIS BANCSHARES, INC. 
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
 
      As of and for the Quarter Ended
      June 30   March 31   December 31,   September 30,   June 30,
        2017       2017       2016       2016       2016  
                       
Loan Portfolio                      
Construction and land development   $ 68,681     $ 58,304     $ 49,104     $ 49,019     $ 33,812  
Farm loans       123,420       123,061       126,108       128,829       122,311  
1-4 Family residential properties     310,522       319,713       326,415       341,900       220,487  
Multifamily residential properties     72,492       74,714       83,200       83,697       47,215  
Commercial real estate     632,492       624,372       630,135       636,686       445,832  
Loans secured by real estate     1,207,607       1,200,164       1,214,962       1,240,131       869,657  
Agricultural loans     79,759       76,757       86,685       81,414       72,776  
Commercial and industrial loans     421,280       400,810       409,033       371,800       301,087  
Consumer loans       32,814       34,962       38,028       40,881       38,049  
All other loans       84,174       82,969       77,284       72,519       33,618  
Total loans       1,825,634       1,795,662       1,825,992       1,806,745       1,315,187  
                       
Deposit Portfolio                    
Non-interest bearing demand deposits   $ 425,344     $ 456,037     $ 471,206     $ 431,480     $ 340,576  
Interest bearing demand deposits     714,918       718,699       716,204       641,327       464,732  
Savings deposits       368,220       372,815       356,740       352,489       335,230  
Money Market       450,685       440,551       432,656       458,019       313,854  
Time deposits       330,239       341,427       353,081       381,944       249,807  
Total deposits       2,289,406       2,329,529       2,329,887       2,265,259       1,704,199  
                       
Asset Quality                      
Non-performing loans   $ 17,125     $ 27,652     $ 18,241     $ 15,787     $ 4,630  
Non-performing assets     21,558       30,085       20,226       17,888       5,112  
Net charge-offs       1,477       629       307       85       306  
Allowance for loan losses to non-performing loans   106.33%       64.54%       91.84%       102.37%       327.52%  
Allowance for loan losses to total loans outstanding   1.00%       0.99%       0.92%       0.89%       1.15%  
Nonperforming loans to total loans     0.94%       1.54%       1.00%       0.87%       0.35%  
Nonperforming assets to total assets     0.76%       1.06%       0.70%       0.64%       0.24%  
                       
Common Share Data                    
Common shares outstanding     12,505,873       12,483,787       12,470,999       12,457,462       9,843,652  
Book value per common share   $ 24.06     $ 23.29     $ 22.51     $ 23.06     $ 22.01  
Tangible book value per common share   $ 18.50     $ 17.68     $ 16.84     $ 17.34     $ 17.01  
Market price of stock   $ 34.10     $ 33.84     $ 34.00     $ 27.26     $ 25.00  
                       
Key Performance Ratios and Metrics                    
End of period earning assets   $ 2,604,505     $ 2,624,399     $ 2,652,628     $ 2,557,109     $ 1,964,167  
Average earning assets     2,615,792       2,633,227       2,590,488       2,134,471       1,967,281  
Average rate on average earning assets (tax equivalent)   4.08%       3.85%       3.66%       3.58%       3.56%  
Average rate on cost of funds     0.24%       0.22%       0.23%       0.18%       0.19%  
Net interest margin (tax equivalent)     3.84%       3.63%       3.43%       3.40%       3.37%  
Return on average assets     1.16%       0.88%       0.97%       0.92%       0.93%  
Return on average common equity     11.11%       8.77%       9.22%       9.02%       9.44%  
Efficiency ratio (tax equivalent) 1     53.17%       59.90%       55.67%       60.17%       60.90%  
Full-time equivalent employees     590       590       598       596       520  
                       
1 Represents non-interest expense divided by the sum of fully tax equivalent net interest income and non-interest income.  Non-interest expense adjustments exclude foreclosed property expense
and amortization of intangibles.  Non-interest income includes tax equivalent adjustments and non-interest income excludes gains and losses on the sale of investment securities.

FIRST MID-ILLINOIS BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
                           
          As of and for the Quarter Ended
          June 30   March 31   December 31,   September 30,   June 30,
            2017       2017       2016       2016       2016  
                           
Net interest income as reported     $ 23,953     $ 22,772     $ 21,524     $ 17,623     $ 15,970  
Net interest income, (tax equivalent)     24,844       23,620       22,324       18,221       16,493  
Average earning assets       2,615,792       2,633,227       2,590,488       2,134,471       1,967,281  
Net interest margin (tax equivalent) 1     3.84%       3.63%       3.43%       3.40%       3.37%  
                           
                           
Common stockholder’s equity     $ 300,891     $ 290,738     $ 280,673     $ 287,265     $ 216,620  
Goodwill and intangibles, net       69,517       70,076       70,623       71,209       49,147  
Common shares outstanding       12,506       12,484       12,471       12,457       9,844  
Tangible Book Value per common share   $ 18.50     $ 17.68     $ 16.84     $ 17.34     $ 17.01  
                           
                           
Common equity tier 1 capital     $ 237,764     $ 238,102     $ 229,341     $ 222,884     $ 176,377  
Risk weighted assets         2,185,041       2,171,056       2,111,787       2,053,118       1,499,731  
Common equity tier 1 capital to risk weighted assets  2   10.88%       10.97%       10.86%       10.86%       11.76%  
                           
1 Annualized and calculated on a tax equivalent basis where interest earned on tax-exempt securities and loans is adjusted to an amount comparable to interest subject
to normal income taxes assuming a federal tax rate of 35% and includes the impact of non-interest bearing funds. 
                           
2 Defined as total common equity adjusted for gains/(losses) less goodwill and intangibles divided by risk weighted assets as of period end. 

 

 

Investor Contact:  Aaron Holt
VP, Shareholder Relations
217-258-0463 
aholt@firstmid.com