Community Heritage Financial, Inc. Reports Results for the Second Quarter of 2019

 July 19, 2019 - 3:04 PM EDT
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Community Heritage Financial, Inc. Reports Results for the Second Quarter of 2019

MIDDLETOWN, Md., July 19, 2019 /PRNewswire/ -- Community Heritage Financial, Inc. ("the Company") (OTCPink: 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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SOURCE Community Heritage Financial, Inc.


Source: PR Newswire (July 19, 2019 - 3:04 PM EDT)

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