YONKERS, N.Y., Oct. 22, 2013 /PRNewswire/ --Hudson Valley Holding Corp. (NYSE: HVB) reported third quarter 2013 financial results, including growth of the bank's loan and securities portfolios and core deposits.
The parent company of Hudson Valley Bank earned $2.5 million, or $0.13 per diluted share, in the third quarter of 2013, including the impact of a non-recurring $1.3 million pre-tax write-off associated with branch consolidations completed earlier this year. The company earned $3.5 million, or $0.18 per share, in the second quarter of 2013 and $3.1 million, or $0.16 per share, in the third quarter of 2012.
"We're pleased to have already surpassed our $200 million loan origination and purchase target for the year, as we drive total loan growth in 2013 and beyond by providing more comprehensive lending products focused on middle-market companies, professionals and not-for-profit entities," President and Chief Executive Officer Stephen R. Brown said. "We continue to hold the line on operating expenses and again lowered funding costs thanks to our solid core deposit base, strong existing customer relationships and expanding client base."
Liquidity Deployment
As previously announced, the bank is targeting total loan growth of about 10 percent in 2013, compared to the year prior, with total loan originations and purchases to date of $280 million already exceeding Hudson Valley's $200 million full-year target. The bank has also targeted expansion of its investment securities portfolio by $100 million this year.
Summary of Earning Asset Balances | ||||
(Excludes Loans-Held-For-Sale) | ||||
(dollars in thousands) | Year-to- Date | Third Quarter | Second Quarter | First Quarter |
2013 | 2013 | 2013 | 2013 | |
Starting loans, gross | $1,469,783 | $1,480,373 | $1,414,986 | $1,469,783 |
Loan originations | 164,858 | 64,195 | 75,933 | 24,730 |
Loan purchases | 114,797 | 78,474 | 36,323 | 0 |
Payoffs, paydowns and other changes | (172,659) | (46,263) | (46,869) | (79,527) |
Increase (decrease) in gross loans | 106,996 | 96,406 | 65,387 | (54,797) |
Ending loans, gross | $1,576,779 | $1,576,779 | $1,480,373 | $1,414,986 |
Starting securities | $455,295 | $530,704 | $483,792 | $455,295 |
Securities purchases | 253,299 | 42,923 | 110,137 | 100,239 |
Paydowns, maturities and other changes | (172,255) | (37,288) | (63,225) | (71,742) |
Increase in securities | 81,044 | 5,635 | 46,912 | 28,497 |
Ending securities | $536,339 | $536,339 | $530,704 | $483,792 |
Hudson Valley continues to focus capital and investment on developing new middle market, small business and other lending products to successfully grow and diversify its loan portfolio beyond its traditional strength in commercial real estate (CRE). The company remains committed to a prudent timeline for deployment of excess liquidity, without compromising credit quality, risk management or market strength.
Newly originated loans in the first nine months of 2013 totaled $164.9 million and included $90.2 million of commercial real estate loans, $48.8 million of business loans and $25.9 million of residential 1-4 family loans.
Loans purchased in the third quarter of 2013 totaled $78.5 million and are largely fixed rate single-family mortgage loans. Prior to their acquisition late in the third quarter, Hudson Valley carried out a thorough credit and compliance review of each of these loans, which Hudson Valley believes exhibited high-quality credit risk characteristics, and carried an average yield of 3.1 percent.
The company believes its investment securities purchases continue to exhibit conservative interest rate and credit risk characteristics. Including recently acquired securities, Hudson Valley's total portfolio yield averaged 2.52 percent in the third quarter of 2013, with an average duration of just 3.7 years.
Core Deposits
Even as the bank executed its liquidity deployment and loan growth strategy, Hudson Valley continued to maintain its solid core deposit franchise in the third quarter of 2013. These low-cost core deposits, which exclude time deposits greater than $100,000, were $2.6 billion, or 96.8 percent of total deposits, at September 30, 2013, compared to $2.5 billion at June 30, 2013 and $2.5 billion at September 30, 2012.
Continued improvement in the company's historically low average cost of deposits to 18 basis points in the third quarter of 2013 from 20 basis points in the second quarter of 2013 and 22 basis points in the third quarter of 2012 continues to help mitigate the impact of remaining excess liquidity on net interest margin.
Profitability
Hudson Valley's net interest margin was 2.99 percent in the third quarter of 2013, compared to 3.06 percent in the second quarter of 2013 and 3.60 percent in the third quarter of 2012. As previously disclosed, the company continues to expect the pace of margin compression to moderate for the remainder of 2013, as compared to the prior year. Looking ahead, Hudson Valley expects stabilizing net interest margin as the bank continues to make progress on deploying cash into earning assets and as the effect of the third quarter originations and purchases are reflected in future net interest income.
Average net loans totaled $1.45 billion in the third quarter of 2013, compared to $1.41 billion in the second quarter of 2013 and $1.51 billion in the third quarter of 2012. The yield on the loan portfolio declined by 15 basis points to 5.19 percent for the third quarter of 2013, compared to 5.34 percent for the second quarter of 2013 and declined by 55 basis points compared to 5.74 percent for the third quarter of 2012.
Net interest income totaled $21.0 million for the third quarter of 2013, compared to $21.1 million for the second quarter of 2013 and $24.1 million in the third quarter of 2012.
Hudson Valley's total non-interest income was $4.2 million in the third quarter of 2013, compared to $3.9 million in the second quarter of 2013 and $4.4 million in the third quarter of 2012. Investment advisory fees were $1.9 million in the third quarter of 2013, compared to $2.0 million in the second quarter of 2013 and $2.3 million in the year-ago quarter on lower balances.
Non-interest expense was $21.5 million and $61.0 million for the three and nine months ended September 30, 2013, respectively, compared to $20.0 million and $61.9 million for the three and nine months ended September 30, 2012, respectively. The increase during the third quarter of 2013 was due to a non-recurring $1.3 million pre-tax write-off associated with branch consolidations completed earlier this year. Non-interest expense was reduced by 1.6% for the nine months ended September 30, 2013, compared to the same period in the prior year.
The bank's efficiency ratio, which since the first half of 2012 has reflected the impact of excess liquidity on net interest income, was 84.2 percent in the third quarter of 2013, compared to 78.1 percent in the second quarter of 2013 and 69.3 percent in the third quarter of 2012.
Credit Quality
Overall portfolio trends continue to reflect an uneven but generally improving credit environment across Hudson Valley's niche commercial franchise in metropolitan New York. Hudson Valley's total nonperforming assets (NPAs), including nonaccrual loans, nonaccrual loans held for sale, accruing loans delinquent over 90 days and other real estate owned (OREO), were $34.0 million at September 30, 2013, compared to $30.3 million at June 30, 2013 and $42.6 million at September 30, 2012. NPAs totaled 1.12 percent of total assets at September 30, 2013, compared to 1.01 percent at June 30, 2013 and 1.45 percent at September 30, 2012. The increase during the third quarter of 2013 was primarily due to the transfer of one loan totaling $4.1 million to non-accrual status.
Reflecting generally improving credit trends, net charge-offs were $0.8 million for the third quarter of 2013, compared to $0.5 million and $4.3 million in the linked and year-ago quarters, respectively. As a percentage of average loans, annualized net charge-offs were 0.23 percent in the third quarter of 2013, compared to 0.13 percent in the second quarter of 2013 and 1.16 percent in the third quarter of 2012.
The bank's provision for loan losses in the third quarter of 2013 was $0.8 million, compared to $0.3 million in the linked quarter and $3.7 million in the year-ago quarter.
The bank's allowance for loan losses was $25.9 million at September 30, 2013, compared to $25.9 million at June 30, 2013 and $28.1 million at September 30, 2012. The allowance measured 1.64 percent, 1.75 percent and 1.86 percent of total loans at each of those dates, respectively. At September 30, 2013, classified assets represented 29.1 percent of Tier 1 capital plus the allowance, down from 30.8 percent at June 30, 2013.
Quarterly Cash Dividend
Hudson Valley's board of directors declared a cash dividend of $0.06 per share, payable on November 15, 2013 to all common stockholders of record as of the close of business on November 4, 2013.
Capital Strength
At September 30, 2013, Hudson Valley Holding Corp. posted a total risk-based capital ratio of 17.2 percent, a Tier 1 risk-based capital ratio of 15.9 percent, and a Tier 1 leverage ratio of 9.2 percent. Its Hudson Valley Bank subsidiary at September 30, 2013 posted a total risk-based capital ratio of 16.9 percent, a Tier 1 risk-based capital ratio of 15.7 percent, and a Tier 1 leverage ratio of 9.0 percent.
Non-GAAP Financial Disclosures and Reconciliation to GAAP
In addition to disclosing Hudson Valley Holding Corp's results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements this disclosure with an analysis of certain non-GAAP financial measures, such as the tangible equity ratio and tangible book value per share. Management believes these non-GAAP financial measures provide information useful to investors in understanding Hudson Valley Holding Corp's underlying operating performance and trends, and facilitates comparisons with the performance of other banks. Further, the tangible equity ratio and tangible book value per share are used by management to analyze the relative strength of Hudson Valley Holding Corp's capital position.
In light of diversity in presentation among financial institutions, the methodologies used by Hudson Valley Holding Corp. for determining the non-GAAP financial measures discussed above may differ from those used by other financial institutions.
Conference Call
As previously announced, Hudson Valley will hold its quarterly conference call to review the company's financial results on Wednesday, October 23, 2013 at 10:00 AM ET:
Domestic (toll free): 1-888-317-6016; International (toll): +1-412-317-6016.
All participants should dial in at least ten minutes prior to the call and request the "Hudson Valley - Third Quarter 2013 Earnings Call."
A replay of the call will be available one hour from the close of the conference through November 8, 2013 at 9:00 AM ET:
Domestic Toll Free: 1-877-344-7529 - Conference # 10033935; International Toll: +1-412-317-0088- Conference # 10033935.
Participants will be required to state their name and company upon entering call.
The company webcast will be available live at 10:00 AM ET, and archived after the call through its website at www.hudsonvalleybank.com.
About Hudson Valley Holding Corp.
Through its Hudson Valley Bank subsidiary, Hudson Valley Holding Corp. (NYSE: HVB) serves small- and mid-sized businesses, professional services firms, not-for-profit organizations and select individuals in metropolitan New York. Headquartered in Yonkers, N.Y., the company provides a full range of banking, trust and investment management services to niche commercial customers and their principals throughout Westchester and Rockland counties, the Bronx, Brooklyn and Manhattan. Hudson Valley is the largest bank headquartered in Westchester County, with $3.0 billion in assets, $2.7 billion in deposits and 28 branches. Its common stock is traded on the New York Stock Exchange and is a Russell 3000® Index component. More information is available at www.hudsonvalleybank.com.
**************************************************************************************
Hudson Valley Holding Corp. ("Hudson Valley") has made in this press release various forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to earnings, credit quality and other financial and business matters for periods subsequent to September 30, 2013. These statements may be identified by such forward-looking terminology as "expect", "may", "will", "anticipate", "continue", "believe" or similar statements or variations of such terms. Hudson Valley cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, and that statements relating to subsequent periods increasingly are subject to greater uncertainty because of the increased likelihood of changes in underlying factors and assumptions. Actual results could differ materially from forward-looking statements.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, in addition to those risk factors disclosed in the Hudson Valley's Annual Report on Form 10-K for the year ended December 31, 2012 include, but are not limited to:
- our inability to comply with the formal agreement entered into with the Office of the Comptroller of the Currency (the "OCC") and any additional restrictions placed on us as a result of future regulatory exams or changes in regulatory policy implemented by the OCC or other bank regulators;
- the OCC and other bank regulators may require us to further modify or change our mix of assets, including our concentration in certain types of loans, or require us to take further remedial actions;
- our inability to deploy our excess cash, reduce our expenses and improve our operating leverage and efficiency;
- our inability to pay quarterly cash dividends to shareholders in light of our earnings, the current and future economic environment, Federal Reserve Board guidance, our Bank's capital plan and other regulatory requirements applicable to Hudson Valley or Hudson Valley Bank;
- the possibility that we may need to raise additional capital in the future and our ability to raise such capital on terms that are favorable to us;
- further increases in our non-performing loans and allowance for loan losses;
- ineffectiveness in managing our commercial real estate portfolio;
- lower than expected future performance of our investment portfolio;
- a lack of opportunities for growth, plans for expansion (including opening new branches) and increased or unexpected competition in attracting and retaining customers;
- continued poor economic conditions generally and in our market area in particular, which may adversely affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans;
- lower than expected demand for our products and services;
- possible impairment of our goodwill and other intangible assets;
- our inability to manage interest rate risk;
- increased expense and burdens resulting from the regulatory environment in which we operate and our inability to comply with existing and future regulatory requirements;
- our inability to maintain regulatory capital above the minimum levels Hudson Valley Bank has set as its minimum capital levels in its capital plan provided to the OCC, or such higher capital levels as may be required;
- proposed legislative and regulatory action may adversely affect us and the financial services industry;
- future increased Federal Deposit Insurance Corporation, or FDIC, special assessments or changes to regular assessments;
- potential liabilities under federal and state environmental laws;
- regulatory limitations on dividends payable by Hudson Valley or Hudson Valley Bank.
We assume no obligation for updating any such forward-looking statements at any given time.
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||
For the three months ended September 30, 2013 and 2012 | ||
Dollars in thousands, except per share amounts | ||
Three Months Ended | ||
September 30 | ||
2013 | 2012 | |
Interest Income: | ||
Loans, including fees | $18,805 | $21,619 |
Securities: | ||
Taxable | 2,352 | 2,902 |
Exempt from Federal income taxes | 696 | 796 |
Federal funds sold | 8 | 11 |
Deposits in banks | 548 | 381 |
Total interest income | 22,409 | 25,709 |
Interest Expense: | ||
Deposits | 1,207 | 1,393 |
Securities sold under repurchase agreements and other short-term borrowings | 6 | 18 |
Other borrowings | 183 | 183 |
Total interest expense | 1,396 | 1,594 |
Net Interest Income | 21,013 | 24,115 |
Provision for loan losses | 767 | 3,723 |
Net interest income after provision for loan losses | 20,246 | 20,392 |
Non Interest Income: | ||
Service charges | 1,434 | 1,454 |
Investment advisory fees | 1,915 | 2,303 |
Other-than-temporary impairment loss: | ||
Total impairment loss | - | - |
Loss recognized in comprehensive income | - | - |
Net impairment loss recognized in earnings | - | - |
Losses on sales and revaluations of loans and other real estate owned, net | - | - |
Other income | 840 | 596 |
Total non interest income | 4,189 | 4,353 |
Non Interest Expense: | ||
Salaries and employee benefits | 11,213 | 11,366 |
Occupancy | 2,093 | 2,121 |
Professional services | 1,979 | 1,739 |
Equipment | 1,032 | 1,071 |
Business development | 547 | 545 |
FDIC assessment | 1,007 | 811 |
Other operating expenses | 3,675 | 2,382 |
Total non interest expense | 21,546 | 20,035 |
Income Before Income Taxes | 2,889 | 4,710 |
Income Taxes | 394 | 1,576 |
Net Income | $2,495 | $3,134 |
Basic Earnings Per Common Share | $0.13 | $0.16 |
Diluted Earnings Per Common Share | $0.13 | $0.16 |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||
For the nine months ended September 30, 2013 and 2012 | ||
Dollars in thousands, except per share amounts | ||
Nine Months Ended | ||
September 30 | ||
2013 | 2012 | |
Interest Income: | ||
Loans, including fees | $56,890 | $73,197 |
Securities: | ||
Taxable | 6,937 | 9,355 |
Exempt from Federal income taxes | 2,244 | 2,792 |
Federal funds sold | 30 | 28 |
Deposits in banks | 1,536 | 735 |
Total interest income | 67,637 | 86,107 |
Interest Expense: | ||
Deposits | 3,746 | 4,557 |
Securities sold under repurchase agreements and other short-term borrowings | 22 | 85 |
Other borrowings | 542 | 546 |
Total interest expense | 4,310 | 5,188 |
Net Interest Income | 63,327 | 80,919 |
Provision for loan losses | 1,828 | 6,976 |
Net interest income after provision for loan losses | 61,499 | 73,943 |
Non Interest Income: | ||
Service charges | 4,567 | 4,850 |
Investment advisory fees | 5,807 | 7,213 |
Other-than-temporary impairment loss: | ||
Total impairment loss | - | (528) |
Loss recognized in comprehensive income | - | - |
Net impairment loss recognized in earnings | - | (528) |
Gains on sales and revaluation of loans held for sale and other real estate owned, net | 17 | 15,920 |
Other income | 2,196 | 2,041 |
Total non interest income | 12,587 | 29,496 |
Non Interest Expense: | ||
Salaries and employee benefits | 33,615 | 33,544 |
Occupancy | 6,303 | 6,563 |
Professional services | 5,215 | 5,646 |
Equipment | 3,089 | 3,300 |
Business development | 1,590 | 1,899 |
FDIC assessment | 2,900 | 2,165 |
Other operating expenses | 8,263 | 8,828 |
Total non interest expense | 60,975 | 61,945 |
Income Before Income Taxes | 13,111 | 41,494 |
Income Taxes | 3,478 | 15,386 |
Net Income | $9,633 | $26,108 |
Basic Earnings Per Common Share | $0.49 | $1.33 |
Diluted Earnings Per Common Share | $0.49 | $1.33 |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||
September 30, 2013 and December 31, 2012 | ||
Dollars in thousands, except per share and share amounts | ||
Sep 30 | Dec 31 | |
2013 | 2012 | |
ASSETS | ||
Cash and non interest earning due from banks | $57,981 | $57,836 |
Interest earning deposits in banks | 719,149 | 769,687 |
Total cash and cash equivalents | 777,130 | 827,523 |
Federal funds sold | 18,393 | 19,251 |
Securities available for sale, at estimated fair value (amortized cost of $541,104 in | ||
2013 and $444,243 in 2012) | 529,400 | 445,070 |
Securities held to maturity, at amortized cost (estimated fair value of $7,292 in | ||
2013 and $10,825 in 2012) | 6,939 | 10,225 |
Federal Home Loan Bank of New York (FHLB) stock | 3,478 | 4,826 |
Loans (net of allowance for loan losses of $25,863 in 2013 and $26,612 in 2012) | 1,552,125 | 1,440,760 |
Loans held for sale | - | 2,317 |
Accrued interest and other receivables | 22,125 | 24,826 |
Premises and equipment, net | 15,686 | 23,996 |
Other real estate owned | - | 250 |
Deferred income tax, net | 24,654 | 19,263 |
Bank owned life insurance | 40,852 | 39,257 |
Goodwill | 23,842 | 23,842 |
Other intangible assets | 760 | 903 |
Other assets | 6,136 | 8,937 |
TOTAL ASSETS | $3,021,520 | $2,891,246 |
LIABILITIES | ||
Deposits: | ||
Non interest bearing | $989,995 | $1,035,847 |
Interest bearing | 1,674,945 | 1,484,114 |
Total deposits | 2,664,940 | 2,519,961 |
Securities sold under repurchase agreements and other short-term borrowings | 21,038 | 34,624 |
Other borrowings | 16,398 | 16,428 |
Accrued interest and other liabilities | 28,442 | 29,262 |
TOTAL LIABILITIES | 2,730,818 | 2,600,275 |
STOCKHOLDERS' EQUITY | ||
Preferred Stock, $0.01 par value; authorized 15,000,000 shares; no shares | ||
outstanding in 2013 and 2012, respectively | - | - |
Common stock, $0.20 par value; authorized 25,000,000 shares: outstanding | ||
19,903,337 and 19,761,426 shares in 2013 and 2012, respectively | 4,241 | 4,212 |
Additional paid-in capital | 349,712 | 348,643 |
Retained earnings (deficit) | 2,589 | (3,471) |
Accumulated other comprehensive loss | (8,276) | (849) |
Treasury stock, at cost; 1,299,414 shares in 2013 and 2012 | (57,564) | (57,564) |
TOTAL STOCKHOLDERS' EQUITY | 290,702 | 290,971 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,021,520 | $2,891,246 |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||
Average Balances and Interest Rates | |||||||
For the three months ended September 30, 2013 and 2012 | |||||||
The following table sets forth the average balances of interest earning assets and interest bearing liabilities for the periods indicated, as well as total interest and corresponding yields and rates. | |||||||
Three Months Ended September 30, | |||||||
2013 | 2012 | ||||||
(Unaudited) | Average | Yield/ | Average | Yield/ | |||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | ||
ASSETS | |||||||
Interest earning assets: | |||||||
Deposits in Banks | $807,764 | $548 | 0.27% | $696,798 | $381 | 0.22% | |
Federal funds sold | 19,360 | 8 | 0.17% | 22,782 | 11 | 0.19% | |
Securities: (1) | |||||||
Taxable | 462,622 | 2,352 | 2.03% | 367,206 | 2,902 | 3.16% | |
Exempt from federal income taxes | 83,681 | 1,070 | 5.11% | 86,429 | 1,224 | 5.66% | |
Loans, net (2) | 1,450,338 | 18,805 | 5.19% | 1,505,942 | 21,619 | 5.74% | |
Total interest earning assets | 2,823,765 | 22,783 | 3.23% | 2,679,157 | 26,137 | 3.90% | |
Non interest earning assets: | |||||||
Cash & due from banks | 59,577 | 50,526 | |||||
Other assets | 132,410 | 146,062 | |||||
Total non interest earning assets | 191,987 | 196,588 | |||||
Total assets | $3,015,752 | $2,875,745 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Interest bearing liabilities: | |||||||
Deposits: | |||||||
Money market | $886,735 | $739 | 0.33% | $874,877 | $841 | 0.38% | |
Savings | 126,827 | 80 | 0.25% | 125,759 | 146 | 0.46% | |
Time | 120,797 | 148 | 0.49% | 136,459 | 194 | 0.57% | |
Checking with interest | 488,219 | 240 | 0.20% | 383,258 | 212 | 0.22% | |
Securities sold under repo & other s/t borrowings | 27,743 | 6 | 0.09% | 48,082 | 18 | 0.15% | |
Other borrowings | 16,402 | 183 | 4.46% | 16,441 | 183 | 4.45% | |
Total interest bearing liabilities | 1,666,723 | 1,396 | 0.34% | 1,584,876 | 1,594 | 0.40% | |
Non interest bearing liabilities: | |||||||
Demand deposits | 1,015,931 | 969,025 | |||||
Other liabilities | 35,887 | 31,204 | |||||
Total non interest bearing liabilities | 1,051,818 | 1,000,229 | |||||
Stockholders' equity (1) | 297,211 | 290,640 | |||||
Total liabilities and stockholders' equity | $3,015,752 | $2,875,745 | |||||
Net interest earnings | $21,387 | $24,543 | |||||
Net yield on interest earning assets | 3.03% | 3.66% | |||||
----------------------------------------------------- | |||||||
(1) Excludes unrealized gains (losses) on securities available for sale. Management believes that this presentation more closely reflects actual performance, as it is more consistent with the Company's stated asset/liability management strategies, which have not resulted in significant realization of temporary market gains or losses on securities available for sale which were primarily related to changes in interest rates. Effects of these adjustments are presented in the table below. | |||||||
(2) Includes loans classified as non-accrual and loans held-for-sale. | |||||||
(3) The data contained in the table has been adjusted to a tax equivalent basis, based on the Company's federal statutory rate of 35 percent. Management believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules. Effects of these adjustments are presented in the table below. | |||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||
Average Balances and Interest Rates | |||||||
For the nine months ended September 30, 2013 and 2012 | |||||||
The following table sets forth the average balances of interest earning assets and interest bearing liabilities for the periods indicated, as well as total interest and corresponding yields and rates. | |||||||
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
(Unaudited) | Average | Yield/ | Average | Yield/ | |||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | ||
ASSETS | |||||||
Interest earning assets: | |||||||
Deposits in Banks | $794,649 | $1,536 | 0.26% | $451,380 | $735 | 0.22% | |
Federal funds sold | 22,711 | 30 | 0.18% | 18,707 | 28 | 0.20% | |
Securities: (1) | |||||||
Taxable | 423,549 | 6,937 | 2.18% | 378,363 | 9,355 | 3.30% | |
Exempt from federal income taxes | 83,268 | 3,452 | 5.53% | 94,650 | 4,295 | 6.05% | |
Loans, net (2) | 1,427,552 | 56,890 | 5.31% | 1,692,823 | 73,197 | 5.77% | |
Total interest earning assets | 2,751,729 | 68,845 | 3.34% | 2,635,923 | 87,610 | 4.43% | |
Non interest earning assets: | |||||||
Cash & due from banks | 57,393 | 48,748 | |||||
Other assets | 133,755 | 151,766 | |||||
Total non interest earning assets | 191,148 | 200,514 | |||||
Total assets | $2,942,877 | $2,836,437 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Interest bearing liabilities: | |||||||
Deposits: | |||||||
Money market | $881,208 | $2,364 | 0.36% | $904,794 | $2,997 | 0.44% | |
Savings | 127,014 | 267 | 0.28% | 122,711 | 407 | 0.44% | |
Time | 124,591 | 466 | 0.50% | 140,774 | 659 | 0.62% | |
Checking with interest | 433,088 | 649 | 0.20% | 347,664 | 494 | 0.19% | |
Securities sold under repo & other s/t borrowings | 27,926 | 22 | 0.11% | 48,791 | 85 | 0.23% | |
Other borrowings | 16,412 | 542 | 4.40% | 16,450 | 546 | 4.43% | |
Total interest bearing liabilities | 1,610,239 | 4,310 | 0.36% | 1,581,184 | 5,188 | 0.44% | |
Non interest bearing liabilities: | |||||||
Demand deposits | 1,007,336 | 938,938 | |||||
Other liabilities | 30,960 | 28,421 | |||||
Total non interest bearing liabilities | 1,038,296 | 967,359 | |||||
Stockholders' equity (1) | 294,342 | 287,894 | |||||
Total liabilities and stockholders' equity | $2,942,877 | $2,836,437 | |||||
Net interest earnings | $64,535 | $82,422 | |||||
Net yield on interest earning assets | 3.13% | 4.17% | |||||
----------------------------------------------------- | |||||||
(1) Excludes unrealized gains (losses) on securities available for sale. Management believes that this presentation more closely reflects actual performance, as it is more consistent with the Company's stated asset/liability management strategies, which have not resulted in significant realization of temporary market gains or losses on securities available for sale which were primarily related to changes in interest rates. Effects of these adjustments are presented in the table below. | |||||||
(2) Includes loans classified as non-accrual and loans held-for-sale. | |||||||
(3) The data contained in the table has been adjusted to a tax equivalent basis, based on the Company's federal statutory rate of 35 percent. Management believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules. Effects of these adjustments are presented in the table below. | |||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||
Financial Highlights | ||||
Third Quarter 2013 | ||||
(Dollars in thousands, except per share amounts) | ||||
3 mos end | 3 mos end | 9 mos end | 9 mos end | |
Sep 30 | Sep 30 | Sep 30 | Sep 30 | |
2013 | 2012 | 2013 | 2012 | |
Earnings: | ||||
Net Interest Income | $21,013 | $24,115 | $63,327 | $80,919 |
Non Interest Income | $4,189 | $4,353 | $12,587 | $29,496 |
Non Interest Expense | $21,546 | $20,035 | $60,975 | $61,945 |
Net Income | $2,495 | $3,134 | $9,633 | $26,108 |
Net Interest Margin | 2.99% | 3.60% | 3.07% | 4.09% |
Net Interest Margin (FTE) (1) | 3.03% | 3.66% | 3.13% | 4.17% |
Diluted Earnings Per Share | $0.13 | $0.16 | $0.49 | $1.33 |
Dividends Per Share | $0.06 | $0.18 | $0.18 | $0.54 |
Return on Average Equity | 3.45% | 4.32% | 4.41% | 12.03% |
Return on Average Assets | 0.33% | 0.44% | 0.44% | 1.23% |
Average Balances: | ||||
Average Assets | $3,002,857 | $2,874,634 | $2,937,766 | $2,838,448 |
Average Net Loans | $1,450,338 | $1,505,942 | $1,427,552 | $1,692,823 |
Average Investments | $546,303 | $453,635 | $506,817 | $473,013 |
Average Interest Earning Assets | $2,810,870 | $2,678,046 | $2,746,618 | $2,637,934 |
Average Deposits | $2,638,509 | $2,489,378 | $2,573,237 | $2,454,881 |
Average Borrowings | $44,145 | $64,523 | $44,338 | $65,241 |
Average Interest Bearing Liabilities | $1,666,723 | $1,584,876 | $1,610,239 | $1,581,184 |
Average Stockholders' Equity | $289,395 | $290,189 | $291,315 | $289,345 |
Asset Quality - During Period: | ||||
Provision for Loan Losses | $767 | $3,723 | $1,828 | $6,976 |
Net Charge-offs | $830 | $4,349 | $2,578 | $9,554 |
Annualized Net Charge-offs/Avg Net Loans | 0.23% | 1.16% | 0.24% | 0.75% |
(1) See Non-GAAP financial measures and reconciliation to GAAP below. | ||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||||||
Selected Balance Sheet Data | |||||||||||
Third Quarter 2013 | |||||||||||
(Dollars in thousands except per share amounts) | |||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||
2013 | 2013 | 2013 | 2012 | 2012 | |||||||
Period End Balances: | |||||||||||
Total Assets | $3,021,520 | $2,981,975 | $2,828,809 | $2,891,246 | $2,929,042 | ||||||
Total Investments | $536,339 | $530,704 | $483,792 | $455,295 | $458,355 | ||||||
Net Loans | $1,552,125 | $1,454,191 | $1,386,694 | $1,440,760 | $1,476,814 | ||||||
Goodwill and Other Intangible Assets | $24,602 | $24,650 | $24,697 | $24,745 | $24,932 | ||||||
Total Deposits | $2,664,940 | $2,625,115 | $2,464,197 | $2,519,961 | $2,548,610 | ||||||
Total Stockholders' Equity | $290,702 | $289,466 | $292,895 | $290,971 | $292,900 | ||||||
Tangible Common Equity (1) | $266,100 | $264,816 | $268,198 | $266,226 | $267,968 | ||||||
Common Shares Outstanding | 19,903,337 | 19,898,145 | 19,880,657 | 19,761,426 | 19,638,090 | ||||||
Book Value Per Share | $14.61 | $14.55 | $14.73 | $14.72 | $14.91 | ||||||
Tangible Book Value Per Share (1) | $13.37 | $13.31 | $13.49 | $13.47 | $13.65 | ||||||
Tangible Common Equity Ratio - HVHC (1) | 8.9% | 9.0% | 9.6% | 9.3% | 9.2% | ||||||
Tier 1 Leverage Ratio - HVHC | 9.2% | 9.3% | 9.5% | 9.3% | 9.4% | ||||||
Tier 1 Risk Based Capital Ratio - HVHC | 15.9% | 16.5% | 17.1% | 16.5% | 16.1% | ||||||
Total Risk Based Capital Ratio - HVHC | 17.2% | 17.7% | 18.3% | 17.7% | 17.4% | ||||||
Tier 1 Leverage Ratio - HVB | 9.0% | 9.1% | 9.3% | 9.2% | 9.2% | ||||||
Tier 1 Risk Based Capital Ratio - HVB | 15.7% | 16.2% | 16.8% | 16.2% | 15.9% | ||||||
Total Risk Based Capital Ratio - HVB | 16.9% | 17.4% | 18.0% | 17.4% | 17.2% | ||||||
Gross Loans (excluding Loans Held-For-Sale): | |||||||||||
Commercial Real Estate | $598,996 | $594,301 | $576,409 | $550,786 | $583,653 | ||||||
Construction | 82,310 | 72,337 | 70,212 | 74,727 | 91,241 | ||||||
Residential Multi-Family |
214,853 | 196,438 | 195,016 | 196,199 | 209,192 | ||||||
Residential Other | 396,477 | 328,922 | 294,798 | 325,774 | 322,841 | ||||||
Commercial and Industrial | 254,723 | 261,469 | 249,794 | 288,809 | 266,118 | ||||||
Individuals | 17,352 | 16,752 | 17,696 | 21,725 | 22,270 | ||||||
Lease Financing | 12,068 | 10,154 | 11,043 | 11,763 | 12,373 | ||||||
Total Loans | $1,576,779 | $1,480,373 | $1,414,968 | $1,469,783 | $1,507,688 | ||||||
Asset Quality - Period End: | |||||||||||
Allowance for Loan Losses | $25,863 | $25,926 | $26,088 | $26,612 | $28,107 | ||||||
Loans 31-89 Days Past Due Accruing | $3,704 | $8,824 | $19,323 | $12,630 | $7,557 | ||||||
Loans 90 Days or More Past Due Accruing (90 PD) | $0 | $0 | $0 | $0 | $0 | ||||||
Nonaccrual Loans (NAL) | $33,964 | $30,267 | $32,140 | $34,808 | $42,305 | ||||||
Other Real Estate Owned (OREO) | $0 | $0 | $0 | $250 | $250 | ||||||
Nonperforming Loans Held For Sale (HFS) | $0 | $0 | $0 | $0 | $0 | ||||||
Nonperforming Assets (90 PD+NAL+OREO+HFS) | $33,964 | $30,267 | $32,140 | $35,058 | $42,555 | ||||||
Allowance / Total Loans | 1.64% | 1.75% | 1.84% | 1.81% | 1.86% | ||||||
NAL / Total Loans | 2.15% | 2.04% | 2.27% | 2.37% | 2.81% | ||||||
NAL + 90 PD / Total Loans | 2.15% | 2.04% | 2.27% | 2.37% | 2.81% | ||||||
NAL + 90 PD + OREO / Total Assets | 1.12% | 1.01% | 1.14% | 1.21% | 1.45% | ||||||
Nonperforming Assets / Total Assets | 1.12% | 1.01% | 1.14% | 1.21% | 1.45% | ||||||
(1) See Non-GAAP financial disclosures and reconciliation to GAAP below. | |||||||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||||||
Selected Income Statement Data | |||||||||||
Third Quarter 2013 | |||||||||||
(Dollars in thousands except per share amounts) | |||||||||||
3 mos end | 3 mos end | 3 mos end | 3 mos end | 3 mos end | |||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||
2013 | 2013 | 2013 | 2012 | 2012 | |||||||
Interest Income | $22,409 | $22,547 | $22,681 | $23,945 | $25,709 | ||||||
Interest Expense | 1,396 | 1,479 | 1,435 | 1,535 | 1,594 | ||||||
Net Interest Income | 21,013 | 21,068 | 21,246 | 22,410 | 24,115 | ||||||
Provision for Loan Losses | 767 | 289 | 772 | 1,531 | 3,723 | ||||||
Non Interest Income | 4,189 | 3,881 | 4,517 | 4,346 | 4,353 | ||||||
Non Interest Expense | 21,546 | 19,818 | 19,611 | 20,593 | 20,035 | ||||||
Income Before Income Taxes | 2,889 | 4,842 | 5,380 | 4,632 | 4,710 | ||||||
Income Taxes | 394 | 1,355 | 1,729 | 1,559 | 1,576 | ||||||
Net Income | $2,495 | $3,487 | $3,651 | $3,073 | $3,134 | ||||||
Diluted Earnings Per Share | $0.13 | $0.18 | $0.18 | $0.16 | $0.16 | ||||||
Net Interest Margin | 2.99% | 3.06% | 3.18% | 3.28% | 3.60% | ||||||
Average Cost of Deposits (1) | 0.18% | 0.20% | 0.20% | 0.21% | 0.22% | ||||||
(1) Includes noninterest bearing deposits | |||||||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||
Non-GAAP Financial Measures and Reconciliation to GAAP | ||||
(Dollars in thousands except per share amounts) | ||||
Three Months Ended | Nine Months Ended | |||
September 30 | September 30 | |||
2013 | 2012 | 2013 | 2012 | |
Total interest earning assets: | ||||
As reported | $2,810,870 | $2,678,046 | $2,746,618 | $2,637,934 |
Unrealized (loss) gain on securities | ||||
available-for-sale (a) | (12,895) | (1,111) | (5,111) | 2,011 |
Adjusted total interest earning assets (1) | $2,823,765 | $2,679,157 | $2,751,729 | $2,635,923 |
Net interest earnings: | ||||
As reported | $21,012 | $24,114 | $63,327 | $80,919 |
Adjustment to tax equivalency basis (b) | 375 | 429 | 1,208 | 1,503 |
Adjusted net interest earnings (1) | $21,387 | $24,543 | $64,535 | $82,422 |
Net yield on interest earning assets: | ||||
As reported | 2.99% | 3.60% | 3.07% | 4.09% |
Effects of (a) and (b) above | 0.04% | 0.06% | 0.06% | 0.08% |
Adjusted net yield on interest earning assets (1) | 3.03% | 3.66% | 3.13% | 4.17% |
Average stockholders' equity: | ||||
As reported | $289,395 | $290,189 | $291,315 | $289,345 |
Effects of (a) and (b) above | (7,816) | (451) | (3,027) | 1,451 |
Adjusted average stockholders' equity (1) | $297,211 | $290,640 | $294,342 | $287,894 |
Interest income: | ||||
As reported | $22,408 | $25,708 | $67,637 | $86,107 |
Adjustment to tax equivalency basis (b) | 375 | 429 | 1,208 | 1,503 |
Adjusted interest income (1) | $22,783 | $26,137 | $68,845 | $87,610 |
Gross yield on interest earning assets: | ||||
As reported | 3.19% | 3.84% | 3.28% | 4.35% |
Effects of (a) and (b) above | 0.04% | 0.06% | 0.06% | 0.08% |
Adjusted gross yield on interest earning assets (1) | 3.23% | 3.90% | 3.34% | 4.43% |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
Non-GAAP Financial Measures and Reconciliation to GAAP - (Continued) | |||||
(Dollars in thousands except per share amounts) | |||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |
2013 | 2013 | 2013 | 2012 | 2012 | |
Tangible Equity Ratio: | |||||
Total Stockholders' Equity: | |||||
As reported | $290,702 | $289,466 | $292,895 | $290,971 | $292,900 |
Less: Goodwill and other intangible assets | 24,602 | 24,650 | 24,697 | 24,745 | 24,932 |
Tangible stockholders' equity | $266,100 | $264,816 | $268,198 | $266,226 | $267,968 |
Total Assets: | |||||
As reported | $3,021,520 | $2,981,975 | $2,828,809 | $2,891,246 | $2,929,042 |
Less: Goodwill and other intangible assets | 24,602 | 24,650 | 24,697 | 24,745 | 24,932 |
Tangible Assets | $2,996,918 | $2,957,325 | $2,804,112 | $2,866,501 | $2,904,110 |
Tangible equity ratio (2) | 8.9% | 9.0% | 9.6% | 9.3% | 9.2% |
Tangible Book Value Per Share: | |||||
Tangible stockholders' equity | $266,100 | $264,816 | $268,198 | $266,226 | $267,968 |
Common shares outstanding | 19,903,337 | 19,898,145 | 19,880,657 | 19,761,426 | 19,638,090 |
Tangible book value per share (2) | $13.37 | $13.31 | $13.49 | $13.47 | $13.65 |
(1) Adjusted total interest earning assets, net interest earnings, net yield on interest earning assets and average stockholders equity exclude the effects of unrealized net gains and losses on securities available for sale. These are non-GAAP financial measures. Management believes that this alternate presentation more closely reflects actual performance, as it is more consistent with the Company's stated asset/liability management strategies which have not resulted in significant realization of temporary market gains or losses on securities available for sale which were primarily related to changes in interest rates. As noted in the Company's 2013 Proxy Statement, net income as a percentage of adjusted average stockholders' equity is one of several factors utilized by management to determine total compensation. | |||||
(2) Tangible equity ratio and tangible book value for share are non-GAAP financial measurements. Management believes these non-GAAP financial measures provide information useful to investors in understanding the Company's underlying operating performance and trends, and facilitates comparisons with the performance of other banks and are used by management to analyze the relative strength of the Company's capital position. | |||||
SOURCE Hudson Valley Holding Corp.
