YONKERS, N.Y., July 25, 2014 /PRNewswire/ --Hudson Valley Holding Corp. (NYSE: HVB) reported second quarter 2014 earnings, benefiting from loan and investment portfolio growth, credit quality improvement, and continued low funding costs.
The parent company of Hudson Valley Bank earned $2.4 million, or $0.12 per diluted share, in the second quarter of 2014, compared to $1.6 million, or $0.08 per diluted share, in the first quarter of 2014, and $3.5 million, or $0.18 per diluted share, in the second quarter of 2013. The Company recorded approximately $0.5 million ($0.3 million after tax, or $0.02 per diluted share) of charges related to executive severance payments as well as professional fees incurred to expand its residential lending operation.
"We are pleased that our strategy to deploy liquidity, diversify our product offerings and expand our customer base is positioning the Company to generate enhanced profitability and growth," President and Chief Executive Officer Stephen R. Brown said. "The addition of our recently announced Chief Banking Officer rounds out our management team, and enables us to strengthen our relationships with our long standing customers as well as bring our successful high touch banking experience to an expanded customer base."
Balance Sheet
Cash and cash equivalents totaled $507.4 million at June 30, 2014, decreasing 15.6 percent during the second quarter and 27.5 percent from December 31, 2013.
Investment securities totaled $844.7 million at June 30, 2014, increasing 56.9 percent during the second quarter and 54.0 percent from December 31, 2013. During June 2014, the Company purchased $304 million of high quality U.S. government agency bonds, mortgage-backed securities and collateralized mortgage-backed obligations. The securities had a 1.79 percent yield, a 4.8 year average life and duration of 3.8 years. The purchase enabled the Company to deploy liquidity into higher yielding assets with strong cash flows that can be reinvested into loans over the next 18 to 24 months.
Net loans totaled $1.74 billion at June 30, 2014, increasing 6.7 percent during the second quarter and 8.1 percent from December 31, 2013.
Commercial and industrial loans of $308.6 million represented 17.4 percent of total loans at June 30, 2014, compared to 17.1 percent at the end of the linked quarter and 17.7 percent at the end of the year-ago quarter.
Loans secured by 1-4 family residential mortgages of $302.4 million at June 30, 2014, represented 17.1 percent of total loans, compared to 19.0 percent at the end of the linked quarter and 15.0 percent at the end of the year-ago quarter.
Deposits totaled $2.86 billion at June 30, 2014, increasing 11.7 percent during the second quarter and 8.7 percent from December 31, 2013.
The Company maintained very high levels of core deposits, which represented 97 percent of total deposits at the end of the second quarter of 2014. Core deposits, which exclude time deposits greater than $100,000, totaled $2.8 billion at June 30, 2014, compared to $2.5 billion at both December 31, 2013 and June 30, 2013.
Portfolio Credit Quality
Overall portfolio trends continue to reflect a gradually improving credit environment.
Nonperforming assets (NPAs), which include nonaccrual loans, accruing loans delinquent over 90 days and other real estate owned (OREO), were $20.5 million at June 30, 2014, compared to $23.5 million at December 31, 2013 and $30.3 million at June 30, 2013. NPAs totaled 0.64 percent of total assets at June 30, 2014, compared to 0.78 percent at December 31, 2013 and 1.01 percent at June 30, 2013.
Net charge-offs were $0.1 million for the second quarter of 2014, compared to net recoveries of $0.8 million in the linked quarter and net charge-offs of $0.5 million in the year-ago quarter. As a percentage of average loans, annualized net charge-offs were 0.02 percent for the second quarter of 2014, and annualized net charge-offs were 0.13 percent in the year-ago quarter.
The Company's allowance for loan losses was $27.3 million at June 30, 2014 compared to $26.0 million at December 31, 2013 and $25.9 million at June 30, 2013. The allowance measured 1.54 percent, 1.59 percent and 1.75 percent of total loans at each of those dates, respectively, reflecting both loan growth and continued improvement in overall credit quality.
Classified assets at June 30, 2014 represented 16.4 percent of Tier 1 capital plus the allowance for loan losses, compared to 20.7 percent at December 31, 2013 and 30.8 percent at June 30, 2013.
The Company's provision for loan losses in the second quarter of 2014 was $0.5 million, compared to $0.1 million in the linked quarter and $0.3 million in the year-ago quarter.
Revenues and Margin
Net interest income was $22.1 million in the second quarter of 2014, compared to $21.7 million in the linked quarter and $21.1 million in the year-ago quarter.
The Company's net interest margin was 3.05 percent in the second quarter of 2014, compared to 3.14 percent in the linked quarter and 3.06 percent in the year-ago quarter.
The yield on interest-earning assets averaged 3.22 percent in the second quarter of 2014, compared to 3.30 percent in the linked quarter and 3.27 percent in the year-ago quarter. Lower asset yields continued to be partially offset by the Company's historically low average cost of deposits of 0.17 percent in both the second quarter of 2014, and the linked quarter and 0.20 percent in the year-ago quarter.
Non-interest income was $3.9 million for the second quarter of 2014, compared to $2.5 million for the linked quarter, which included a $1.9 million prepayment penalty on FHLB borrowings, and $3.9 million in the year-ago quarter.
Non-Interest Expense
Total non-interest expense for the second quarter of 2014 was $22.1 million, compared to $21.8 million in the linked quarter and $19.8 million in the year-ago quarter. Expense savings achieved in 2013 through the elimination of non-profitable operations, have been reinvested into new strategic initiatives designed to diversify our product offering and customer base. These initiatives are already producing value as a result of the activity of the new hires in Hudson Valley's asset based lending and equipment financing units. As such, salaries and employee benefits expense was $12.7 million in the second quarter of 2014, compared to $13.0 million in the linked quarter and $11.1 million in the year-ago quarter. We believe any incremental increases in non-interest expense will be largely dependent upon expanding into new products and businesses.
Quarterly Cash Dividend and Capital Management
The Company's board of directors declared a quarterly cash dividend of $0.08 per share, payable on August 15, 2014, to all common stock shareholders of record as of the close of business on August 8, 2014.
At June 30, 2014, the Company maintained a total risk-based capital ratio of 16.0 percent, a Tier 1 risk-based capital ratio of 14.7 percent, and a Tier 1 leverage ratio of 9.4 percent. Its Hudson Valley Bank subsidiary at June 30, 2014 maintained a total risk-based capital ratio of 15.7 percent, a Tier 1 risk-based capital ratio of 14.4 percent, and a Tier 1 leverage ratio of 9.2 percent.
Non-GAAP Financial Disclosures and Reconciliation to GAAP
In addition to evaluating the Company's results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), management routinely supplements this evaluation 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, the Company will hold its quarterly conference call to review the Company's financial results on Monday, July 28, 2014 at 10:00 AM ET:
Domestic (toll free): 1-877-508-9602; International (toll): +1-412-317-1076.
All participants should dial in at least ten minutes prior to the call and request the "Hudson Valley Second Quarter Earnings Call."
A replay of the call will be available one hour from the close of the conference through August 8, 2014 at 9:00 AM ET:
Domestic Toll Free: 1-877-344-7529 - Conference # 10048930; International Toll: +1-412-317-0088 - Conference # 10048930.
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 atwww.hudsonvalleybank.com.
About Hudson Valley Holding Corp. Through its Hudson Valley Bank subsidiary, headquartered in Yonkers, N.Y., Hudson Valley Holding Corp (NYSE: HVB) serves small- and mid-sized businesses, professional services firms, not-for-profit organizations and their principalsthroughout metropolitan New York. The Company focuses on building strategic relationships with its niche customers, providing a full range of banking, deposit, financing, trust and investment management services, in addition to specialized services, such as asset based lending and equipment financing, across varied industries nationwide. With $3.2 billion in assets, $2.9 billion in deposits and 28 branches, Hudson Valley is the largest bank headquartered in Westchester County. 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.
Forward Looking Statements
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 June 30, 2014. 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, 2013 include, but are not limited to:
- the Office of the Comptroller of the Currency (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 ability 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;
- inability to effectively integrate and manage the new businesses and lending teams;
- 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 additional 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 ability 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, or such higher capital levels as may be required;
- proposed legislative and regulatory action may adversely affect us and the financial services industry;
- legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) may subject us to additional regulatory oversight which may result in increased compliance costs and/or require us to change our business model;
- future increased Federal Deposit Insurance Corporation, or FDIC, special assessments or changes to regular assessments;
- potential liabilities under federal and state environmental laws;
- legislative and regulatory changes to laws governing New York State's taxation of HVB's REIT subsidiary.
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 June 30, 2014 and 2013 | ||
(In thousands, except per share data) | ||
Three Months Ended | ||
June 30 | ||
2014 | 2013 | |
Interest Income: | ||
Loans, including fees | $19,505 | $18,826 |
Securities: | ||
Taxable | 2,755 | 2,390 |
Exempt from Federal income taxes | 622 | 780 |
Federal funds sold | 8 | 11 |
Deposits in banks | 391 | 540 |
Total interest income | 23,281 | 22,547 |
Interest Expense: | ||
Deposits | 1,172 | 1,292 |
Securities sold under repurchase agreements and other short-term borrowings | 9 | 7 |
Other borrowings | - | 180 |
Total interest expense | 1,181 | 1,479 |
Net Interest Income | 22,100 | 21,068 |
Provision for loan losses | 460 | 289 |
Net interest income after provision for loan losses | 21,640 | 20,779 |
Non-Interest Income: | ||
Service charges | 1,415 | 1,394 |
Investment advisory fees | 1,871 | 1,959 |
Realized gains on securities available for sale, net | 12 | - |
Other income | 633 | 528 |
Total non-interest income | 3,931 | 3,881 |
Non-Interest Expense: | ||
Salaries and employee benefits | 12,693 | 11,120 |
Occupancy | 2,365 | 2,101 |
Professional services | 1,928 | 1,731 |
Equipment | 980 | 1,001 |
Business development | 927 | 591 |
FDIC assessment | 522 | 949 |
Other operating expenses | 2,675 | 2,325 |
Total non-interest expense | 22,090 | 19,818 |
Income Before Income Taxes | 3,481 | 4,842 |
Income Taxes | 1,041 | 1,355 |
Net Income | $2,440 | $3,487 |
Basic Earnings Per Common Share | $0.12 | $0.18 |
Diluted Earnings Per Common Share | $0.12 | $0.18 |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||
For the six months ended June 30, 2014 and 2013 | |||||
(In thousands, except per share data) | |||||
Six Months Ended | |||||
June 30 | |||||
2014 | 2013 | ||||
Interest Income: | |||||
Loans, including fees | $39,043 | $38,085 | |||
Securities: | |||||
Taxable | 5,073 | 4,585 | |||
Exempt from Federal income taxes | 1,252 | 1,548 | |||
Federal funds sold | 16 | 22 | |||
Deposits in banks | 732 | 988 | |||
Total interest income | 46,116 | 45,228 | |||
Interest Expense: | |||||
Deposits | 2,262 | 2,539 | |||
Securities sold under repurchase agreements and other short-term borrowings | 15 | 16 | |||
Other borrowings | 10 | 359 | |||
Total interest expense | 2,287 | 2,914 | |||
Net Interest Income | 43,829 | 42,314 | |||
Provision for loan losses | 538 | 1,061 | |||
Net interest income after provision for loan losses | 43,291 | 41,253 | |||
Non-Interest Income: | |||||
Service charges | 3,198 | 3,133 | |||
Investment advisory fees | 3,798 | 3,892 | |||
Realized gains on securities available for sale, net | 38 | - | |||
Gains on sales and revaluation of loans held for sale and other real estate owned, net | - | 17 | |||
Prepayment penalty - FHLB Borrowings | (1,860) | - | |||
Other income | 1,236 | 1,356 | |||
Total non-interest income | 6,410 | 8,398 | |||
Non-Interest Expense: | |||||
Salaries and employee benefits | 25,732 | 22,402 | |||
Occupancy | 4,384 | 4,210 | |||
Professional services | 3,621 | 3,236 | |||
Equipment | 1,978 | 2,057 | |||
Business development | 1,598 | 1,043 | |||
FDIC assessment | 1,128 | 1,893 | |||
Other operating expenses | 5,439 | 4,588 | |||
Total non-interest expense | 43,880 | 39,429 | |||
Income Before Income Taxes | 5,821 | 10,222 | |||
Income Taxes | 1,779 | 3,084 | |||
Net Income | $4,042 | $7,138 | |||
Basic Earnings Per Common Share | $0.20 | $0.36 | |||
Diluted Earnings Per Common Share | $0.20 | $0.36 | |||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2014 and December 31, 2013 | |||||
(In thousands, except share and per share data) | |||||
June 30 | December 31 | ||||
2014 | 2013 | ||||
ASSETS | |||||
Cash and non-interest earning due from banks | $52,856 | $37,711 | |||
Interest earning deposits in banks | 454,577 | 661,643 | |||
Total cash and cash equivalents | 507,433 | 699,354 | |||
Federal funds sold | 15,539 | 27,134 | |||
Securities available for sale, at estimated fair value (amortized cost of $839,454 in | |||||
2014 and $550,785 in 2013) | 839,193 | 542,198 | |||
Securities held to maturity, at amortized cost (estimated fair value of $5,758 in | |||||
2014 and $6,556 in 2013) | 5,466 | 6,238 | |||
Federal Home Loan Bank of New York (FHLB) stock | 3,212 | 3,478 | |||
Loans (net of allowance for loan losses of $27,275 in 2014 and $25,990 in 2013) | 1,742,569 | 1,606,179 | |||
Accrued interest and other receivables | 17,394 | 14,663 | |||
Premises and equipment, net | 15,039 | 15,103 | |||
Deferred income tax, net | 24,513 | 31,433 | |||
Bank owned life insurance | 42,387 | 41,224 | |||
Goodwill | 5,142 | 5,142 | |||
Other intangible assets | 618 | 713 | |||
Other assets | 6,879 | 6,340 | |||
TOTAL ASSETS | $3,225,384 | $2,999,199 | |||
LIABILITIES | |||||
Deposits: | |||||
Non-interest bearing | $1,082,169 | $1,069,631 | |||
Interest bearing | 1,777,707 | 1,564,113 | |||
Total deposits | 2,859,876 | 2,633,744 | |||
Securities sold under repurchase agreements and other short-term borrowings | 46,072 | 34,379 | |||
Other borrowings | - | 16,388 | |||
Accrued interest and other liabilities | 27,390 | 30,379 | |||
TOTAL LIABILITIES | 2,933,338 | 2,714,890 | |||
STOCKHOLDERS' EQUITY | |||||
Preferred Stock, $0.01 par value; authorized 15,000,000 shares; no shares | |||||
outstanding in 2014 and 2013, respectively | - | - | |||
Common stock, $0.20 par value; authorized 25,000,000 shares: outstanding | |||||
19,984,352 and 19,935,559 shares in 2014 and 2013, respectively | 4,257 | 4,247 | |||
Additional paid-in capital | 351,860 | 351,108 | |||
Retained earnings (deficit) | (5,465) | (7,111) | |||
Accumulated other comprehensive loss | (1,042) | (6,371) | |||
Treasury stock, at cost; 1,299,414 shares in 2014 and 2013 | (57,564) | (57,564) | |||
TOTAL STOCKHOLDERS' EQUITY | 292,046 | 284,309 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,225,384 | $2,999,199 | |||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||||||
Average Balances and Interest Rates | ||||||||||||
For the three months ended June 30, 2014 and 2013 | ||||||||||||
(Dollars in thousands) | ||||||||||||
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 June 30, | ||||||||||||
2014 | 2013 | |||||||||||
(Unaudited) | Average | Yield/ | Average | Yield/ | ||||||||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | |||||||
ASSETS | ||||||||||||
Interest earning assets: | ||||||||||||
Deposits in Banks | $579,589 | $391 | 0.27% | $822,288 | $540 | 0.26% | ||||||
Federal funds sold | 19,898 | 8 | 0.16% | 23,279 | 11 | 0.19% | ||||||
Securities: (1) | ||||||||||||
Taxable | 530,332 | 2,755 | 2.08% | 421,394 | 2,390 | 2.27% | ||||||
Exempt from federal income taxes | 96,053 | 957 | 3.99% | 82,236 | 1,200 | 5.84% | ||||||
Loans, net (2) | 1,671,938 | 19,505 | 4.67% | 1,409,875 | 18,826 | 5.34% | ||||||
Total interest earning assets | 2,897,810 | 23,616 | 3.26% | 2,759,072 | 22,967 | 3.33% | ||||||
Non-interest earning assets: | ||||||||||||
Cash & due from banks | 55,965 | 60,270 | ||||||||||
Other assets | 108,621 | 132,272 | ||||||||||
Total non-interest earning assets | 164,586 | 192,542 | ||||||||||
Total assets | $3,062,396 | $2,951,614 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Interest bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Money market | $951,827 | $793 | 0.33% | $894,878 | $784 | 0.35% | ||||||
Savings | 122,539 | 36 | 0.12% | 123,925 | 95 | 0.31% | ||||||
Time | 113,904 | 132 | 0.46% | 124,058 | 155 | 0.50% | ||||||
Checking with interest | 510,645 | 211 | 0.17% | 442,048 | 258 | 0.23% | ||||||
Securities sold under repo & other s/t borrowings | 32,297 | 9 | 0.11% | 26,115 | 7 | 0.11% | ||||||
Other borrowings | 0 | 0 | 0.00% | 16,412 | 180 | 4.39% | ||||||
Total interest bearing liabilities | 1,731,212 | 1,181 | 0.27% | 1,627,436 | 1,479 | 0.36% | ||||||
Non-interest bearing liabilities: | ||||||||||||
Demand deposits | 1,014,081 | 1,001,674 | ||||||||||
Other liabilities | 25,947 | 27,658 | ||||||||||
Total non-interest bearing liabilities | 1,040,028 | 1,029,332 | ||||||||||
Stockholders' equity (1) | 291,156 | 294,846 | ||||||||||
Total liabilities and stockholders' equity | $3,062,396 | $2,951,614 | ||||||||||
Net interest earnings | $22,435 | $21,488 | ||||||||||
Net yield on interest earning assets | 3.10% | 3.12% | ||||||||||
----------------------------------------------------- (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. | ||||||||||||
(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 six months ended June 30, 2014 and 2013 | ||||||||||||
(Dollars in thousands) | ||||||||||||
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. | ||||||||||||
Six Months Ended June 30, | ||||||||||||
2014 | 2013 | |||||||||||
(Unaudited) | Average | Yield/ | Average | Yield/ | ||||||||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | |||||||
ASSETS | ||||||||||||
Interest earning assets: | ||||||||||||
Deposits in Banks | $582,369 | $732 | 0.25% | $787,982 | $988 | 0.25% | ||||||
Federal funds sold | 20,141 | 16 | 0.16% | 24,415 | 22 | 0.18% | ||||||
Securities: (1) | ||||||||||||
Taxable | 493,825 | 5,073 | 2.05% | 403,689 | 4,585 | 2.27% | ||||||
Exempt from federal income taxes | 93,621 | 1,926 | 4.11% | 83,058 | 2,382 | 5.74% | ||||||
Loans, net (2) | 1,644,048 | 39,043 | 4.75% | 1,415,970 | 38,085 | 5.38% | ||||||
Total interest earning assets | 2,834,004 | 46,790 | 3.30% | 2,715,114 | 46,062 | 3.39% | ||||||
Non-interest earning assets: | ||||||||||||
Cash & due from banks | 57,671 | 56,284 | ||||||||||
Other assets | 110,092 | 134,438 | ||||||||||
Total non-interest earning assets | 167,763 | 190,722 | ||||||||||
Total assets | $3,001,767 | $2,905,836 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Interest bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Money market | $923,728 | $1,538 | 0.33% | $878,399 | $1,625 | 0.37% | ||||||
Savings | 123,420 | 79 | 0.13% | 127,108 | 187 | 0.29% | ||||||
Time | 114,468 | 265 | 0.46% | 126,521 | 318 | 0.50% | ||||||
Checking with interest | 483,674 | 380 | 0.16% | 405,065 | 409 | 0.20% | ||||||
Securities sold under repo & other s/t borrowings | 30,608 | 15 | 0.10% | 28,019 | 16 | 0.11% | ||||||
Other borrowings | 453 | 10 | 4.42% | 16,417 | 359 | 4.37% | ||||||
Total interest bearing liabilities | 1,676,351 | 2,287 | 0.27% | 1,581,529 | 2,914 | 0.37% | ||||||
Non-interest bearing liabilities: | ||||||||||||
Demand deposits | 1,006,537 | 1,002,967 | ||||||||||
Other liabilities | 28,375 | 28,458 | ||||||||||
Total non-interest bearing liabilities | 1,034,912 | 1,031,425 | ||||||||||
Stockholders' equity (1) | 290,504 | 292,882 | ||||||||||
Total liabilities and stockholders' equity | $3,001,767 | $2,905,836 | ||||||||||
Net interest earnings | $44,503 | $43,148 | ||||||||||
Net yield on interest earning assets | 3.14% | 3.18% | ||||||||||
----------------------------------------------------- | ||||||||||||
(2) Includes loans classified as non-accrual. | ||||||||||||
(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 | ||||||||||||
Second Quarter 2014 and 2013 | ||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
Three Months Ended Jun 30, 2014 | Three Months Ended Jun 30, 2013 | Six Months Ended Jun 30, 2014 | Six Months Ended Jun 30, 2013 | |||||||||
Earnings: | ||||||||||||
Net Interest Income | $22,100 | $21,068 | $43,829 | $42,314 | ||||||||
Non-Interest Income | $3,931 | $3,881 | $6,410 | $8,398 | ||||||||
Non-Interest Expense | $22,090 | $19,818 | $43,880 | $39,429 | ||||||||
Net Income | $2,440 | $3,487 | $4,042 | $7,138 | ||||||||
Net Interest Margin | 3.05% | 3.06% | 3.10% | 3.12% | ||||||||
Net Interest Margin (FTE) (1) | 3.10% | 3.12% | 3.14% | 3.18% | ||||||||
Diluted Earnings Per Share | $0.12 | $0.18 | $0.20 | $0.36 | ||||||||
Dividends Per Share | $0.06 | $0.06 | $0.12 | $0.12 | ||||||||
Return on Average Equity | 3.37% | 4.75% | 2.80% | 4.88% | ||||||||
Return on Average Assets | 0.32% | 0.47% | 0.27% | 0.49% | ||||||||
Efficiency Ratio (2) | 83.82% | 78.12% | 83.21% | 76.52% | ||||||||
Average Balances: | ||||||||||||
Average Assets | $3,060,221 | $2,949,423 | $2,998,209 | $2,904,681 | ||||||||
Average Net Loans | $1,671,938 | $1,409,875 | $1,644,048 | $1,415,970 | ||||||||
Average Investments | $626,385 | $503,630 | $587,446 | $486,747 | ||||||||
Average Interest Earning Assets | $2,895,635 | $2,756,881 | $2,830,446 | $2,713,959 | ||||||||
Average Deposits | $2,712,996 | $2,586,583 | $2,651,827 | $2,540,060 | ||||||||
Average Borrowings | $32,297 | $42,527 | $31,061 | $44,436 | ||||||||
Average Interest Bearing Liabilities | $1,731,212 | $1,627,436 | $1,676,351 | $1,581,529 | ||||||||
Average Stockholders' Equity | $289,761 | $293,616 | $288,258 | $292,290 | ||||||||
Asset Quality - During Period: | ||||||||||||
Provision for Loan Losses | $460 | $289 | $538 | $1,061 | ||||||||
Net Charge-offs (Recoveries) | $90 | $452 | ($746) | $1,748 | ||||||||
(1) See Non-GAAP financial measures and reconciliation to GAAP below. | ||||||||||||
(2) The efficiency ratio (a lower ratio indicates greater efficiency) compares non-interest expense to adjusted total revenue (taxable equivalent net interest income, plus non-interest income, excluding gains or losses on sales or revaluations of investment securities and other assets and penalties on prepayment of borrowings. | ||||||||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
Selected Quarterly Balance Sheet Data | |||||
(Dollars in thousands except per share data) | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
2014 | 2014 | 2013 | 2013 | 2013 | |
Period End Balances: | |||||
Total Assets | $3,225,359 | $2,906,201 | $2,999,199 | $3,021,520 | $2,981,975 |
Total Investments | $844,659 | $538,292 | $548,436 | $536,339 | $530,704 |
Net Loans | $1,742,569 | $1,632,795 | $1,606,179 | $1,552,125 | $1,454,191 |
Goodwill and Other Intangible Assets | $5,760 | $5,807 | $5,855 | $24,602 | $24,650 |
Total Deposits | $2,859,876 | $2,562,018 | $2,633,744 | $2,664,940 | $2,625,115 |
Total Stockholders' Equity | $292,046 | $287,553 | $284,309 | $290,702 | $289,466 |
Tangible Common Equity (1) | $286,286 | $281,746 | $278,454 | $266,100 | $264,816 |
Common Shares Outstanding | 19,984,352 | 20,032,431 | 19,935,559 | 19,903,337 | 19,898,145 |
Book Value Per Share | $14.61 | $14.35 | $14.26 | $14.61 | $14.55 |
Tangible Book Value Per Share (1) | $14.33 | $14.06 | $13.97 | $13.37 | $13.31 |
Tangible Common Equity Ratio - HVHC (1) | 8.9% | 9.7% | 9.3% | 8.9% | 9.0% |
Tier 1 Leverage Ratio - HVHC | 9.4% | 9.7% | 9.5% | 9.2% | 9.3% |
Tier 1 Risk Based Capital Ratio - HVHC | 14.7% | 16.2% | 16.2% | 15.9% | 16.5% |
Total Risk Based Capital Ratio - HVHC | 16.0% | 17.5% | 17.5% | 17.2% | 17.7% |
Tier 1 Leverage Ratio - HVB | 9.2% | 9.5% | 9.3% | 9.0% | 9.1% |
Tier 1 Risk Based Capital Ratio - HVB | 14.4% | 15.9% | 15.8% | 15.7% | 16.2% |
Total Risk Based Capital Ratio - HVB | 15.7% | 17.2% | 17.1% | 16.9% | 17.4% |
Gross Loans (excluding Loans Held-For-Sale): | |||||
Commercial Real Estate | $622,615 | $587,366 | $593,476 | $598,996 | $594,301 |
Construction | 87,146 | 81,331 | 88,311 | 82,310 | 72,337 |
Residential Multi-Family | 295,008 | 249,661 | 226,898 | 214,853 | 196,438 |
Residential Other | 417,297 | 429,379 | 432,999 | 396,477 | 328,922 |
Commercial and Industrial | 308,555 | 284,025 | 258,578 | 254,723 | 261,469 |
Individuals | 11,427 | 12,908 | 17,388 | 17,352 | 16,752 |
Lease Financing | 27,049 | 14,000 | 13,140 | 12,068 | 10,154 |
Total Loans | $1,769,097 | $1,658,670 | $1,630,790 | $1,576,779 | $1,480,373 |
Asset Quality - Period End: | |||||
Allowance for Loan Losses | $27,275 | $26,904 | $25,990 | $25,863 | $25,926 |
Loans 31-89 Days Past Due Accruing | $5,572 | $9,590 | $4,625 | $3,704 | $8,824 |
Loans 90 Days or More Past Due Accruing (90 PD) | $0 | $0 | $0 | $0 | $0 |
Nonaccrual Loans (NAL) | $20,546 | $21,006 | $23,489 | $33,964 | $30,267 |
Other Real Estate Owned (OREO) | $0 | $0 | $0 | $0 | $0 |
Nonperforming Loans Held For Sale (HFS) | $0 | $0 | $0 | $0 | $0 |
Nonperforming Assets (90 PD+NAL+OREO+HFS) | $20,546 | $21,006 | $23,489 | $33,964 | $30,267 |
Allowance / Total Loans | 1.54% | 1.62% | 1.59% | 1.64% | 1.75% |
NAL / Total Loans | 1.16% | 1.27% | 1.44% | 2.15% | 2.04% |
NAL + 90 PD / Total Loans | 1.16% | 1.27% | 1.44% | 2.15% | 2.04% |
NAL + 90 PD + OREO / Total Assets | 0.64% | 0.72% | 0.78% | 1.12% | 1.01% |
Nonperforming Assets / Total Assets | 0.64% | 0.72% | 0.78% | 1.12% | 1.01% |
(1) See Non-GAAP financial disclosures and reconciliation to GAAP below. | |||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||
Selected Quarterly Income Statement Data | |||||||
(Dollars in thousands except per share data) | |||||||
Three Months Ended Jun 30, 2014 | Three Months Ended Mar 31, 2014 | Three Months Ended Dec 31, 2013 | Three Months Ended Sep 30, 2013 | Three Months Ended Jun 30, 2013 | |||
Interest Income | $23,281 | $22,835 | $21,946 | $22,409 | $22,547 | ||
Interest Expense | 1,181 | 1,106 | 1,336 | 1,396 | 1,479 | ||
Net Interest Income | 22,100 | 21,729 | 20,610 | 21,013 | 21,068 | ||
Provision for Loan Losses | 460 | 78 | 648 | 767 | 289 | ||
Non-Interest Income | 3,931 | 2,479 | 2,557 | 4,189 | 3,881 | ||
Non-Interest Expense | 22,090 | 21,790 | 39,126 | 21,546 | 19,818 | ||
Income (Loss) Before Income Taxes | 3,481 | 2,340 | (16,607) | 2,889 | 4,842 | ||
Income Taxes | 1,041 | 738 | (8,104) | 394 | 1,355 | ||
Net Income (Loss) | $2,440 | $1,602 | ($8,503) | $2,495 | $3,487 | ||
Diluted Earnings (Loss) Per Share | $0.12 | $0.08 | ($0.43) | $0.13 | $0.18 | ||
Net Interest Margin | 3.05% | 3.14% | 2.95% | 2.99% | 3.06% | ||
Average Cost of Deposits (1) | 0.17% | 0.17% | 0.18% | 0.18% | 0.20% | ||
(1) Includes noninterest bearing deposits | |||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||
Non-GAAP Financial Measures and Reconciliation to GAAP | ||||
(Dollars in thousands) | ||||
Three Months Ended | Six Months Ended | |||
June 30 | June 30 | |||
2014 | 2013 | 2014 | 2013 | |
Total interest earning assets: | ||||
As reported | $2,895,635 | $2,756,881 | $2,830,446 | $2,713,959 |
Unrealized (loss) gain on securities | ||||
available-for-sale (a) | (2,175) | (2,191) | (3,558) | (1,155) |
Adjusted total interest earning assets (1) | $2,897,810 | $2,759,072 | $2,834,004 | $2,715,114 |
Net interest income: | ||||
As reported | $22,100 | $21,068 | $43,829 | $42,314 |
Adjustment to tax equivalency basis (b) | 335 | 420 | 674 | 834 |
Adjusted net interest income (1) | $22,435 | $21,488 | $44,503 | $43,148 |
Net yield on interest earning assets: | ||||
As reported | 3.05% | 3.06% | 3.10% | 3.12% |
Effects of (a) and (b) above | 0.05% | 0.06% | 0.04% | 0.06% |
Adjusted net yield on interest earning assets (1) | 3.10% | 3.12% | 3.14% | 3.18% |
Average stockholders' equity: | ||||
As reported | $289,761 | $293,616 | $288,258 | $292,290 |
Effects of (a) and (b) above | (1,395) | (1,230) | (2,246) | (592) |
Adjusted average stockholders' equity (1) | $291,156 | $294,846 | $290,504 | $292,882 |
Interest income: | ||||
As reported | $23,281 | $22,547 | $46,116 | $45,228 |
Adjustment to tax equivalency basis (b) | 335 | 420 | 674 | 834 |
Adjusted interest income (1) | $23,616 | $22,967 | $46,790 | $46,062 |
Gross yield on interest earning assets: | ||||
As reported | 3.22% | 3.27% | 3.26% | 3.33% |
Effects of (a) and (b) above | 0.04% | 0.06% | 0.04% | 0.06% |
Adjusted gross yield on interest earning assets (1) | 3.26% | 3.33% | 3.30% | 3.39% |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||
Non-GAAP Financial Measures and Reconciliation to GAAP - (Continued) | |||||||
(Dollars in thousands, except per share data) | |||||||
June 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |||
2014 | 2014 | 2013 | 2013 | 2013 | |||
Tangible Equity Ratio: | |||||||
Total Stockholders' Equity: | |||||||
As reported | $292,046 | $287,553 | $284,309 | $290,702 | $289,466 | ||
Less: Goodwill and other intangible assets | 5,760 | 5,807 | 5,855 | 24,602 | 24,650 | ||
Tangible stockholders' equity | $286,286 | $281,746 | $278,454 | $266,100 | $264,816 | ||
Total Assets: | |||||||
As reported | $3,225,412 | $2,906,201 | $2,999,199 | $3,021,520 | $2,981,975 | ||
Less: Goodwill and other intangible assets | 5,760 | 5,807 | 5,855 | 24,602 | 24,650 | ||
Tangible Assets | $3,219,652 | $2,900,394 | $2,993,344 | $2,996,918 | $2,957,325 | ||
Tangible equity ratio (2) | 8.9% | 9.7% | 9.3% | 8.9% | 9.0% | ||
Tangible Book Value Per Share: | |||||||
Tangible stockholders' equity | $286,286 | $281,746 | $278,454 | $266,100 | $264,816 | ||
Common shares outstanding | 19,984,352 | 20,032,431 | 19,935,559 | 19,903,337 | 19,898,145 | ||
Tangible book value per share (2) | $14.33 | $14.06 | $13.97 | $13.37 | $13.31 | ||
(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 2014 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.
