Cardinal Bankshares Corporation Announces Third Quarter 2015 Earnings

Nov 02, 2015, 15:26 ET from Cardinal Bankshares Corporation

FLOYD, Va., Nov. 2, 2015 /PRNewswire/ -- Cardinal Bankshares Corporation (OTC-QB: CDBK), parent company of Bank of Floyd, announced its consolidated financial results for the third quarter ended September 30, 2015.  The Company reported consolidated net income of $180 thousand for the third quarter and $353 thousand for the nine months ended September 30, 2015. 

Third quarter financial highlights include:

  • Annualized net interest margin improved to 3.34% for the three months ended September 30, 2015 as compared to 3.02% for the same three month period in 2014. Annualized net interest margin also improved when compared to the 3.25% reported for the three month period ended June 30, 2015.
  • Non-performing Assets as a percentage of total assets declined to .07% at September 30, 2015 showing continued significant improvement when compared to 1.44% at September 30, 2014.
  • Total loans declined $6.8 million from $177.3 million at June 30, 2015 to $170.5 million at September 30, 2015. The decline resulted from unusually high payoffs during the quarter.
  • New checking account acquisition efforts resulted in the addition of over 400 net new accounts during the first nine months of 2015, a 5.72% increase for the nine month period.
  • Interest bearing deposits declined from by $7.0 million from December 31, 2014 to $188.3 million at September 30, 2015, as high priced certificates of deposit continued to run-off. As a result, interest expense on deposits declined 14.23% for the nine month period ended September 30, 2015 as compared to the same period in 2014.

According to Mark A. Smith, Interim President & CEO, "We are pleased that our strategies to improve profitability and attract new customers to the Bank continued to produce improved results during the third quarter.  We are also pleased with the additional progress that was made in eliminating legacy credit issues.  The credit issues that negatively impacted earnings and capital are behind us.  Unusually high payoffs adversely impacted our goals for loan growth during the quarter.  As a result, we are working to ensure our product offerings remain competitive and our delivery methods exceed customer expectations so that we can achieve our desired growth in the loan portfolio."   

A Warning about Forward-Looking Statements
This news release contains forward-looking statements. The Company may also make written forward-looking statements in proxy statements, offering circulars and prospectuses, press releases and other written materials and oral statements made by Cardinal Bankshares' officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These statements are based on beliefs and assumptions of the Company's management, and on information currently available to such management. Forward-looking statements include statements preceded by, followed by or that include the words "believes," "expects," "estimates," "anticipates," "plans," or similar expressions. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. Management cautions the readers that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: competitive pressures among depository and other financial institutions may increase significantly; changes in the interest rate environment may reduce margins; general economic or business conditions may lead to a deterioration in credit quality or a reduced demand for credit; legislative or regulatory changes, including changes in accounting standards, may adversely affect the business in which Cardinal is engaged; changes may occur in the securities markets; and competitors of the Company may have greater financial resources and develop products that enable such competitors to compete more successfully than Cardinal.

Other factors that may cause actual results to differ from the forward-looking statements include the following: the timely development of competitive new products and services by the Company and the acceptance of such products and services by customers; changes in consumer spending and savings habits; the effects of competitors' pricing policies; the Company's success in managing the costs associated with the expansion of existing distribution channels and developing new ones, and in realizing increased revenues from such distribution channels, including cross-selling initiatives; and mergers and acquisitions and their integration into the Company and management's ability to manage these other risks.

Management of Cardinal believes these forward-looking statements are reasonable; however undue reliance should not be placed on such forward-looking statements, which are based on current expectations. Forward-looking statements are not guarantees of performance.  They involve risks, uncertainties and assumptions. The future results and stockholder values of Cardinal may differ materially from those expressed in forward-looking statements contained in this report. Many of the factors that will determine these results and values are beyond the Company's ability to control or predict.

 

 







Consolidated Balance Sheets

(in thousands, except share data)




September 30,


December 31,




2015


2014


Assets






Cash and due from banks


$             4,239


$            3,578


Interest-bearing deposits in banks


6,979


6,034


Investment securities, available for sale


67,665


82,845


Restricted equity securites


1,237


1,535








Total loans


170,569


170,062


Allowance for loan losses


(2,175)


(3,098)


     Net loans


168,394


166,964








Bank premises and equipment, net


5,520


5,776


Accrued interest receivable


615


669


Foreclosed assets


195


735


Bank owned life insurance


6,859


6,737


Deferred tax asset


5,208


5,487


Reserve deferred tax asset


(5,052)


(5,139)


Prepaid assets


736


490


Other assets


1,360


1,105


     Total assets


$          263,955


$          276,816








Liabilities and Stockholders' Equity












Liabilities






Noninterest-bearing deposits


$            39,241


$             39,785


Interest-bearing deposits


188,351


195,325


     Total deposits


227,592


235,110


FHLB advances


14,000


20,000


Accrued interest payable


49


57


Bank owned life insurance SERP


711


727


Other liabilities


545


589


     Total liabilities


242,897


$            256,483








Stockholders' Equity






Common stock, $10 par value; 5,000,000






Shares authorized; 1,535,733 shares issued






Issued and outstanding


15,357


15,357


Additional paid-in capital


2,925


2,925


Retained earnings


3,079


2,726


Accumulated other comprehensive income


(303)


(675)


     Total stockholders' equity


21,058


20,333


     Total liabilities and stockholders' equity


$            263,955


$            276,816








 

 

 










Consolidated Statements of Operations

(in thousands, except share data)




Three Months Ended September 30,


Nine Months Ended September 30,



2015


2014


2015


2014










Interest and dividend income









  Loans and fees on loans


$          2,162


$          1,937


$          6,297


$          5,550

  Federal funds sold


-


-


-


-

  Investment Securities


348


439


1,135


1,486

  Dividend income


18


(2)


46


15

  Deposits with banks


4


23


11


30

    Total interest income


2,532


2,397


7,489


7,081










Interest expense









   Deposits


392


468


1,228


1,432

   Borrowings


10


5


31


14

          Total interest expense


402


473


1,259


1,446

          Net interest income


2,130


1,924


6,230


5,635



















Provision for loan losses


-


(177)


(526)


(1,737)

     Net interest income after provision









          for loan losses


2,130


2,101


6,756


7,372










Noninterest income


80


67


225


150

     Service charges on deposit accounts


87


33


258


85

     Other service charges and fees


-


-


33


(56)

     Net realized gains on sales of securities


41


41


122


125

     Income on bank owned life insurance


183


22


245


164

     Other income


391


163


883


468

          Total noninterest income


















Noninterest expense









     Salaries and employee benefits


1,167


1,155


3,443


3,400

     Occupancy and equipment


323


274


1,022


841

     Legal and professional


269


97


499


239

     Data processing services


161


154


492


419

     FDIC insurance premiums


93


93


279


274

     Foreclosed assets, net


6


37


554


476

     Other operating expense


322


322


997


991

          Total noninterest expense


2,341


2,132


7,286


6,640

          Income (loss) before income taxes


180


132


353


1,200

          Income tax expense (benefit)


-


-


-


(2)

Net income (loss)


$             180


$           132


$           353


$          1,202

Basic earnings (loss) per share


$            0.12


$          0.09


$          0.23


$            0.78

 

 

 

Cardinal Bankshares Corporation









Financial Highlights (Unaudited)









(in thousands)









Three Months Ended


Nine Months Ended



September 30,

2015


September 30,

2014


September 30,

2015


September 30,

2014










Per Share









Earnings per share, basic and diluted


$          0.12


$           0.09


$           0.23


$           0.78

Book value






$         13.71


$         13.36










Financial Ratios









Annualized Return on Average Assets


0.26%


0.20%





Annualized Return on Average Equity


3.45%


2.72%





Annualized Net Interest Margin for the quarter ended1


3.34%


3.02%





Efficiency Ratio2


92.62%


100.45%














Capital Ratios









Tier 1 risk-based capital - Bank only


11.11%


10.99%





Total risk-based capital - Bank only


12.31%


12.19%














Tier 1 risk-based capital - consolidated


12.05%


12.07%





Total risk-based capital - consolidated


13.28%


13.28%














Allowance for Loan Losses at Beginning of Period


$        2,159


$         2,884


$         3,098


$         2,862

Loans Charged-off, net of Recoveries


16


(508)


(398)


1,075

Provision for Loan Losses


-


(176)


(525)


(1,737)

Allowance for Loan Losses at End of Period


$        2,175


$         2,200


$         2,175


$         2,200










Credit Quality Ratios









Nonperforming Assets as a % of Total Assets






0.07%


1.44%

Total Allowance for Loan Losses as a % of Total Loans






1.28%


1.37%

Total Allowance for Loan Losses as a % of Nonperforming Loans






0.00%


71.11%

Annualized Net Charge-offs as a % of Average Loans






-0.04%


1.34%










Nonperforming Assets









Nonaccrual Loans






$              -


$         3,094

Loans Past Due 90 Days+, still accruing






-












Total Nonperforming Loans






-


3,094

Other Real Estate Owned






195


795

Total Nonperforming Assets






$            195


$         3,889










1Net interest margin equals net interest income divided by interest-earning average assets.





2Efficiency ratio equals noninterest expense (excluding OREO valuations and OREO operating expenses) divided by net interest income plus noninterest income (excluding net realized gains on sales of securities).





 

For Further Information Contact:

Mark A. Smith, Interim President and Chief Executive Officer
J. Alan Dickerson, Chief Financial Officer
(540) 745-4191

 

SOURCE Cardinal Bankshares Corporation



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