MIDDLETOWN, Md., July 19, 2019 /PRNewswire/ — Community Heritage Financial, Inc. (“the Company”) (CMHF), the parent company for Middletown Valley Bank (“MVB”) and Millennium Financial Group, Inc. (“Mlend”,) announced today that, for the quarter ended June 30, 2019, the Company earned net income of $758.8 thousand or $0.34 per share compared to net income of $701.5 thousand and earnings per share of $0.31 recorded for the second quarter of 2018. The net income for the quarter ended June 30, 2019 was positively impacted by lower income tax expense due to Bank Holding Company expenses and an adjustment to the first quarter 2019 tax accrual that more than offset the $107 thousand decline in pre-tax income.

(PRNewsfoto/Community Heritage Financial)

Net income for the first six months of 2019 was $1.06 million or $0.47 per share compared to $1.2 million or $0.54 per share in 2018. The decline in net income versus the first six months of 2018 was primarily due to the increase in noninterest expense in 2019 related to the opening of a new branch (Paramount), converting to a Bank Holding Company in late 2018, and opening a new operations center in the first quarter of 2019 as well as continued spending to support the Company’s growth.   

2Q19 vs. 1Q19 Quarterly Highlights

  • Net book value per share increased by $0.47 per share or 2% to $20.92. Tangible book value per share increased by $0.47 or 2% to $20.18.  
  • Net loans grew by $20.4 million or 5.6% which was primarily funded by a $13.2 million reduction in cash and $5.9 million increase in deposits and $1.1 million reduction in investment securities.
  • Deposits grew by 5.9 million or 1.4% while net interest margin grew to 3.82%, up from 3.60% in 1Q19.
  • Provision expense was an increase of $235.9 thousand driven by loan growth during the quarter while the Allowance for Loan Losses declined slightly to 0.99% from 1.00% in 1Q19. Nonperforming Assets decreased by $735 thousand primarily due to a $727 thousand nonaccrual loan reduction from a payoff.
  • Net interest income grew by $394.3 thousand due to loan growth and net interest margin improvements mentioned above which more than offset the $236 thousand growth in noninterest expense.
  • Mlend continued to positively contribute to the consolidated earnings of Community Heritage Financial, Inc. during the second quarter.

2Q19 vs. 2Q18 Year over Year Highlights

  • Net book value per share increased by $1.23 per share or 6% to $20.92. Tangible book value per share increased by $0.49 or 3% to $20.18.
  • Net loans grew by $69.9 million or 22.4% which was funded by strong growth in deposits of $75.9 million or 21.9%.    
  • Deposits grew 22%, or $75.9 million while net interest margin grew by 5 basis points to 3.70%, up from 3.65% in 1H18.   
  • Provision expense increased by $298.6 thousand driven by a slight 1 basis point increase in the Allowance for Loan Losses to 0.99% and the significant loan growth over that period. Nonperforming assets decreased by $1.8 million compared to the second quarter 2018 primarily driven by $1.65 million in nonaccrual loan reductions and $167 thousand in foreclosed properties being sold.  
  • Net interest income grew by $1.7 million in the six months ended June 30, 2019 vs. 2018 due to robust loan growth and boost in net interest margin previously mentioned.

A dividend of $0.03 per share was declared by the Board of Directors on July 19, 2019 for stockholders of record as of August 2, 2019 and payable on August 9, 2019.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by the use of forward- looking terminology such as “believes,” “expects,” “intends,” “may,” “will,” “should,” “anticipates” or similar terminology. Such statements, specifically regarding the Company’s intentions regarding transparency, growth and market expansion, are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, changes in interest rates, stock market liquidity, deposit flows, loan demand and real estate values, as well as changes in economic, competitive, governmental, regulatory, technological and other factors which may affect the Company specifically, its existing and target market areas or the banking industry in general. The realization or occurrence of these risks or uncertainties could cause actual results to differ materially from those addressed in the forward-looking statements.

Community Heritage Financial, Inc
Brian M. Ropp
Executive Vice President, Chief Financial Officer
(301) 371-3029

 

Community Heritage Financial, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands)

Balance Sheet

June 30,

June 30,

March 31,

December 31,

2019

2018

2019

2018

(unaudited)

(unaudited)

(unaudited)

(audited)

Cash

$                24,578

$               22,095

$              37,789

$              18,546

FHLB Stock

392

325

392

325

Investments, at market value

45,809

44,122

46,958

47,967

Loans, net of Reserve

382,120

312,191

361,722

354,149

Loans Held for Sale

3,499

3,446

Fixed assets

10,244

5,868

10,330

6,286

Goodwill

1,659

1,655

Other assets

8,202

8,386

8,413

8,386

Total Assets

$              476,504

$             392,987

$            470,706

$            435,658

Deposits

$              423,188

$             347,290

$            417,255

$            388,544

Borrowings

Other liabilities

6,224

1,722

7,416

2,170

Total Liabilities

429,412

349,012

424,670

390,714

Equity

46,980

44,969

46,289

45,666

Unrealized gain(loss), net of tax

112

(994)

(254)

(722)

Total Equity

47,092

43,975

46,035

44,944

Total Liabilities & Equity

$              476,504

$             392,987

$            470,706

$            435,658

Community Heritage Financial, Inc. and Subsidiaries

Consolidated Statements of Income

For the Three Months Ended

For the Six Months Ended

Income Statement

June 30,

June 30,

June 30,

June 30,

2019

2018

2019

2018

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Total interest and fee income

$           5,369,419

$          3,820,067

$       10,260,802

$         7,366,360

Total interest expense

1,117,455

505,312

2,151,152

949,625

Net interest income 

4,251,964

3,314,755

8,109,650

6,416,735

Provision for loan losses

358,290

(21,735)

480,649

182,000

Net interest income after provision

3,893,674

3,336,490

7,629,001

6,234,735

Non-interest income

1,047,091

288,829

1,798,851

570,654

Non-interest expense

4,092,036

2,669,634

7,947,661

5,171,837

Merger expenses & one-time items

77,596

Pre-tax net income

848,729

955,685

1,402,595

1,633,552

Income taxes

89,907

254,149

338,307

430,693

Net income

$              758,822

$             701,536

$         1,064,288

$         1,202,859

Earnings per common share, basic 

  and diluted

$0.34

$0.31

$0.47

$0.54

 

 

Community Heritage Financial, Inc. and Subsidiaries

Selected Financial Data 

June 30,

June 30,

March 31,

December 31,

2019

2018

2019

2018

(dollars in thousands)

(unaudited)

(unaudited)

(unaudited)

(audited)

Total Assets 

$           476,504

$          392,987

$         470,706

$            435,574

Loans 

382,120

314,706

361,722

354,147

Goodwill

1,659

1,655

Deposits 

423,188

347,289

417,255

388,544

Shareholder’s equity 

47,092

43,975

46,035

44,944

Nonperforming Assets:

Accruing troubled debt restructures

$                  715

$                 745

$                723

$                   731

Loans 90 past due and still accruing 

Nonaccrual loans 

1,373

3,020

2,100

2,453

Foreclosed properties 

167

Total nonperforming assets 

$               2,088

$              3,932

$             2,823

$                3,184

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

June 30,

June 30,

Summary of Operating Results 

2019

2018

2019

2018

(dollars in thousands)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Pre-allowance for loan loss provision, pre-tax net
income

$        1,207,019

$          933,950

$      1,883,245

$         1,815,553

Allowance for loan loss provision, pre-tax

358,290

(21,735)

480,649

182,000

Tax expense

89,907

254,149

338,307

430,693

Net Income

$           758,822

$          701,536

$      1,064,289

$         1,202,860

Charge-Offs 

$                  119

$                   90

$                143

$                   110

(Recoveries)

(8)

(2)

(14)

(7)

Net charge-offs

$                  111

$                   88

$                129

$                   103

Per Common Share Data 

Basic earnings per share

$0.34

$0.31

$0.47

$0.54

Common shares outstanding 

2,251,320

2,233,820

2,251,320

2,233,820

Weighted average shares outstanding

2,251,137

2,233,820

2,247,220

2,233,820

Dividends declared 

$0.03

$0.03

$0.06

$0.06

Book value per share

$20.92

$19.69

$20.92

$19.69

Tangible Book Value per Share

$20.18

$19.69

$20.18

$19.69

Selected Unaudited Financial Ratios

Return on average assets

0.45%

0.74%

0.46%

0.66%

Return on average equity 

4.54%

6.38%

4.60%

5.61%

Allowance for loan losses to total loans

0.99%

0.98%

0.99%

0.98%

Nonperforming assets to total loans

0.54%

1.20%

0.54%

1.20%

Net charge-offs to average loans

0.03%

0.02%

0.03%

0.02%

Common equity tier 1 to risk-weighted assets 

12.36%

15.52%

12.36%

15.52%

Tier 1 capital to risk-weighted assets 

12.36%

15.52%

12.36%

15.52%

Total capital to risk-weighted assets 

13.59%

16.77%

13.59%

16.77%

Average equity to average assets 

9.87%

11.19%

9.96%

11.19%

Net interest margin 

3.82%

3.68%

3.70%

3.65%

Loan to deposit ratio

91.20%

90.88%

91.20%

90.88%

 

 

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