Level One Bancorp, Inc. reports third quarter 2018 net income of $3.3 million, representing $0.41 of earnings per diluted share

October 30, 2018

Loan growth of 13.69% in the last twelve months and the size of the mortgage team doubled

FARMINGTON HILLS, Mich., Oct. 30, 2018 (GLOBE NEWSWIRE) -- Level One Bancorp, Inc. (“Level One”) (Nasdaq: LEVL) today reported net income of $3.3 million, or $0.41 per diluted share, in the third quarter of 2018. This compares with net income of $4.0 million, or $0.53 per diluted share, in the preceding quarter and $2.8 million, or $0.43 per diluted share, in the third quarter of 2017.

Patrick J. Fehring, President and Chief Executive Officer, commented, "Our total loans increased 13.69% in the past twelve months. In addition, our noninterest income increased 32.51% over the second quarter as a result of the previously announced expansion of our mortgage banking activities. However, as a result of this expansion, our noninterest expense increased due to the increase in salaries and benefits expense from the expansion. We remain committed to providing shareholder returns with a strategy of quality growth."

Third Quarter 2018 Financial Highlights

  • Net income was $3.3 million, or $0.41 per diluted share, for the third quarter of 2018
  • Net interest margin, on a fully taxable equivalent ("FTE") basis, was 3.97%, compared to 3.99% in the preceding quarter and 4.07% in the third quarter of 2017
  • Annualized return on average assets was 0.95%, compared to 0.94% in the third quarter of 2017
  • Annualized return on average equity was 8.95%, compared to 10.58% in the third quarter of 2017
  • Total assets increased 14.16% to $1.45 billion at September 30, 2018, compared to $1.27 billion at September 30, 2017
  • Total loans increased 13.69% to $1.11 billion at September 30, 2018, compared to $980.7 million at September 30, 2017
  • Total deposits increased 5.65% to $1.13 billion at September 30, 2018, compared to $1.07 billion at September 30, 2017
  • Book value per share increased 12.13% to $18.77 per share compared to $16.74 per share at September 30, 2017
  • Tangible book value per share increased 15.44% to $17.50 per share compared to $15.16 per share at September 30, 2017

Balance Sheet Review

Level One's total assets were $1.45 billion at September 30, 2018, an increase of $123.4 million, or 9.32%, from $1.32 billion at June 30, 2018, and up $179.4 million, or 14.16%, from $1.27 billion at September 30, 2017.

The investment securities portfolio was $199.1 million at September 30, 2018, an increase of $3.1 million, or 1.53%, from $196.0 million at June 30, 2018, and up $57.4 million, or 40.47%, from $141.7 million at September 30, 2017.

Total loans were $1.11 billion at September 30, 2018, an increase of $69.2 million, or 6.62%, from $1.05 billion at June 30, 2018, and up $134.3 million, or 13.69%, from $980.7 million at September 30, 2017. The growth in total loans compared to September 30, 2017 was primarily due to growth in our commercial real estate and residential real estate loan portfolios.

Total deposits were $1.13 billion at September 30, 2018, an increase of $65.1 million, or 6.11%, from $1.07 billion at June 30, 2018, and up $60.4 million, or 5.65%, from $1.07 billion at September 30, 2017. Total deposit composition at September 30, 2018 consisted of 38.10% of demand deposit accounts, 21.09% of savings and money market accounts and 40.81% of time deposits.

Operating Results

Level One's net interest income increased $654 thousand, or 5.27%, to $13.1 million in the third quarter of 2018, compared to $12.4 million in the preceding quarter, and increased $1.4 million, or 11.91%, compared to $11.7 million in the third quarter of 2017, primarily as a result of increased income on originated loans, partially offset by increased expense on deposits.

Level One’s net interest margin, on a FTE basis, was 3.97% in the third quarter of 2018, compared to 3.99% in the preceding quarter and 4.07% in the third quarter of 2017, primarily as a result of higher cost of funds.

Level One's noninterest income increased $472 thousand, or 32.51%, to $1.9 million in the third quarter of 2018, compared to $1.5 million in the preceding quarter, and decreased $17 thousand, or 0.88%, compared to $1.9 million in the third quarter of 2017. The change in noninterest income compared to the preceding quarter was primarily due to an increase in mortgage banking activities as a result of the expansion of the mortgage team.

Level One’s noninterest expenses increased $749 thousand, or 7.72%, to $10.5 million in the third quarter of 2018, compared to $9.7 million in the preceding quarter, and increased $1.1 million, or 12.04%, compared to $9.3 million in the third quarter of 2017, predominantly as a result of increased salary and employee benefits. This increase is due to doubling the size of the mortgage division during the third quarter. The efficiency ratio, which is a measure of operating expenses as a percentage of net interest income and noninterest income, for the third quarter of 2018 was 69.73%, compared to 69.99% for the preceding quarter and 68.51% in the third quarter of 2017.

Level One's income tax provision was $665 thousand, or 16.96% of pretax income, in the third quarter of 2018, as compared to $860 thousand, or 17.65% of pretax income, in the preceding quarter and $1.3 million, or 30.75% of pretax income, in the third quarter of 2017. The decrease in tax expense during the three months ended September 30, 2018, as compared to the third quarter of 2017, is primarily a result of the change in federal corporate income tax rates from 35% to 21% due to the enactment of the Tax Cuts and Jobs Act in December 2017.

Asset Quality

Level One's asset quality remained solid during the third quarter of 2018. Total nonperforming loans were $12.9 million, or 1.15% of total loans, at September 30, 2018, an increase of $1.6 million from nonperforming loans of $11.3 million, or 1.08% of total loans, at June 30, 2018, and a decrease of $2.8 million from nonperforming loans of $15.6 million, or 1.59% of total loans, at September 30, 2017. Level One had no other real estate owned assets at September 30, 2018 or June 30, 2018, compared to $384 thousand at September 30, 2017. Nonperforming assets, consisting of nonaccrual loans and other real estate owned, as a percentage of total assets were 0.89% at September 30, 2018, compared to 0.85% at June 30, 2018, and 1.26% at September 30, 2017.

In addition, we had $354 thousand in loans 90 days or more past due and still accruing at September 30, 2018, compared to $259 thousand at June 30, 2018 and $486 thousand at September 30, 2017.

Performing troubled debt restructured loans that were not included in nonaccrual loans at September 30, 2018 were $2.5 million, compared to $2.5 million in the preceding quarter and $2.3 million at September 30, 2017. Borrowers who are in financial difficulty and who have been granted concessions that may include interest rate reductions, forbearance agreements, and principal deferral or reduction, are categorized as troubled debt restructured loans.

Net chargeoffs in the third quarter of 2018 were $194 thousand, or 0.07% of average loans on an annualized basis, compared to $669 thousand of net recoveries, or 0.26% of average loans on an annualized basis, for the preceding quarter and $32 thousand of net recoveries, or 0.01% of average loans on an annualized basis, for the quarter ended September 30, 2017.

Level One's third quarter provision for loan losses was a provision expense of $619 thousand, compared to a provision benefit of $710 thousand in the preceding quarter and a provision expense of $194 thousand in the third quarter of 2017. The change in provision for loan losses was primarily due to a large recovery in the second quarter of 2018. The allowance for loan losses was $11.9 million, or 1.07% of total loans, at September 30, 2018, compared to $11.5 million, or 1.10% of total loans, at June 30, 2018, and $11.6 million, or 1.19% of total loans, at September 30, 2017. As of September 30, 2018, the allowance for loan losses as a percentage of nonperforming loans was 92.36%, compared to 101.67% at June 30, 2018, and 74.38% at September 30, 2017.

Capital

Total shareholders’ equity was $145.5 million at September 30, 2018, an increase of $2.0 million, or 1.40%, compared with $143.4 million at June 30, 2018 and an increase of $38.5 million, or 35.96%, from $107.0 million at September 30, 2017, primarily as the result of our initial public offering of 1,150,765 shares of common stock in April 2018.

Recent Developments

Third Quarter Dividend: On September 20, 2018, Level One’s Board of Directors declared a quarterly cash dividend of $0.03 per share. This dividend was paid out on October 15, 2018, to stockholders of record at the close of business on September 30, 2018.

About Level One Bancorp, Inc.

Level One Bancorp, Inc. is the holding company for Level One Bank, a full-service commercial and consumer bank headquartered in Michigan with assets of approximately $1.45 billion as of September 30, 2018. It operates eleven banking centers throughout southeast Michigan and west Michigan. Level One Bank's success has been recognized both locally and nationally as the U.S. Small Business Administration's (SBA) "Community Lender of the Year" and "Export Finance Lender of the Year" and one of S&P Global's Top 10 "Best-Performing Community Banks" in the nation. Level One's commercial division provides a menu of products including lines of credit, term loans, leases, commercial mortgages, SBA loans, export-import financing, and a full suite of treasury management and private banking services. The consumer division offers personal savings and checking accounts and a complete array of consumer loan products including residential mortgages, home equity, auto, and credit card services. Level One Bank offers a variety of online banking services and a robust mobile banking application for individuals and businesses. Level One Bank offers the sophistication of a big bank, the heart of a community bank, and the spirit of an entrepreneur. For more information, visit www.levelonebank.com.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect management’s current views of future events and operations. These forward-looking statements are based on the information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve risk and uncertainties, including, but not limited to, the ability of the Company to implement its strategy and expand its lending operations, changes in interest rates and other general economic, business and political conditions, including changes in the financial markets, as well as other risks described in the Company's filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

Summary Consolidated Financial Information
(Unaudited) As of or for the quarter ended,
(Dollars in thousands, except per share data) September 30,
2018
  June 30,
2018
  March 31,
2018
  December 31,
2017
  September 30,
2017
Earnings Summary                  
Interest income $ 16,629     $ 15,380     $ 14,774     $ 14,378     $ 13,752  
Interest expense 3,560     2,965     2,647     2,374     2,074  
Net interest income 13,069     12,415     12,127     12,004     11,678  
Provision for loan losses 619     (710 )   554     956     194  
Noninterest income 1,924     1,452     1,372     1,395     1,941  
Noninterest expense 10,454     9,705     9,135     9,193     9,331  
Income before income taxes 3,920     4,872     3,810     3,250     4,094  
Income tax provision 665     860     642     2,317     1,259  
Net income 3,255     $ 4,012     $ 3,168     $ 933     $ 2,835  
Per Share Data                  
Basic earnings per common share $ 0.42     $ 0.54     $ 0.48     $ 0.15     $ 0.44  
Diluted earnings per common share 0.41     0.53     0.47     0.14     0.43  
Book value per common share 18.77     18.51     16.78     16.78     16.74  
Tangible book value per share (1) 17.50     17.23     15.27     15.21     15.16  
Shares outstanding (in thousands) 7,749     7,749     6,585     6,435     6,392  
Average basic common shares (in thousands) 7,749     7,456     6,539     6,403     6,392  
Average diluted common shares (in thousands) 7,901     7,613     6,699     6,630     6,610  
Selected Period End Balances                  
Total assets 1,446,269     $ 1,322,913     $ 1,300,629     $ 1,301,291     $ 1,266,919  
Securities available-for-sale 199,051     196,047     160,349     150,969     141,700  
Total loans 1,114,999     1,045,789     1,051,354     1,034,923     980,721  
Total deposits 1,130,311     1,065,216     1,112,644     1,120,382     1,069,874  
Total liabilities 1,300,810     1,179,468     1,190,106     1,193,331     1,159,934  
Total shareholders' equity 145,459     143,445     110,523     107,960     106,985  
Tangible shareholders' equity (1) 135,570     133,501     100,524     97,906     96,872  
Performance and Capital Ratios                  
Return on average assets (annualized) 0.95 %   1.23 %   1.00 %   0.29 %   0.94 %
Return on average equity (annualized) 8.95     11.97     11.64     3.40     10.58  
Net interest margin (fully taxable equivalent) (2) 3.97     3.99     4.03     4.01     4.07  
Efficiency ratio (noninterest expense/net interest income plus noninterest income) 69.73     69.99     67.67     68.61     68.51  
Total shareholders' equity to total assets 10.06     10.84     8.50     8.30     8.44  
Tangible equity to tangible assets (1) 9.44     10.17     7.79     7.58     7.71  
Common equity tier 1 capital 11.75     12.11     9.47     9.10     9.33  
Tier 1 leverage ratio 10.31     10.60     8.15     7.92     8.14  
Tier 1 risk-based capital 11.75     12.11     9.47     9.10     9.33  
Total risk-based capital 14.00     14.44     11.87     11.55     11.86  
Asset Quality Ratios:                  
Net charge-offs (recoveries) to average loans 0.07 %   (0.26 )%   0.29 %   0.35 %   (0.01 )%
Nonperforming assets as a percentage of total assets 0.89     0.85     1.00     1.13     1.26  
Nonperforming loans as a percent of total loans 1.15     1.08     1.23     1.36     1.59  
Allowance for loan losses as a percentage of period-end loans 1.07     1.10     1.09     1.13     1.19  
Allowance for loan losses as a percentage of nonperforming loans 92.36     101.67     88.67     83.38     74.38  
Allowance for loan losses as a percentage of nonperforming loans, excluding allowance allocated to loans accounted for under ASC 310-30 84.72     92.93     80.36     75.68     66.62  

(1) See section entitled "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below.
(2) Presented on a tax equivalent basis using a 35% tax rate for 2017 time periods and 21% tax rate for 2018 time periods.

 

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

Some of the financial measures included in this earnings release are not measures of financial performance recognized by GAAP. These non-GAAP financial measures include tangible shareholders' equity, tangible book value per share, and the ratio of tangible shareholders' equity to tangible assets. Our management uses these non-GAAP financial measures in its analysis of our performance, and we believe financial analysts and others frequently use these measures, and other similar measures, to evaluate capital adequacy. We calculate: (i) tangible shareholders' equity as total shareholders' equity less core deposit intangibles and goodwill; (ii) tangible book value per share as tangible shareholders' equity divided by shares of common stock outstanding; and (iii) tangible assets as total assets, less core deposit intangibles and goodwill.

The following presents these non-GAAP financial measures along with their most directly comparable financial measure calculated in accordance with GAAP:

Reconciliation of Non-GAAP Financial Measures
(Unaudited) As of
(Dollars in thousands, except per share data) September 30,
2018
  June 30,
2018
  March 31,
2018
  December 31,
2017
  September 30,
2017
                   
Total shareholders' equity $ 145,459     $ 143,445     $ 110,523     $ 107,960     $ 106,985  
Less:                  
Goodwill 9,387     9,387     9,387     9,387     9,387  
Core deposit intangibles 502     557     612     667     726  
Tangible shareholders' equity $ 135,570     $ 133,501     $ 100,524     $ 97,906     $ 96,872  
                   
Shares outstanding (in thousands) 7,749     7,749     6,585     6,435     6,392  
Tangible book value per share $ 17.50     $ 17.23     $ 15.27     $ 15.21     $ 15.16  
                   
Total assets $ 1,446,269     $ 1,322,913     $ 1,300,629     $ 1,301,291     $ 1,266,919  
Less:                  
Goodwill 9,387     9,387     9,387     9,387     9,387  
Core deposit intangibles 502     557     612     667     726  
Tangible assets $ 1,436,380     $ 1,312,969     $ 1,290,630     $ 1,291,237     $ 1,256,806  
                   
Tangible equity to tangible assets 9.44 %   10.17 %   7.79 %   7.58 %   7.71 %

 

 

Consolidated Balance Sheets
(Unaudited) As of
  September 30,   June 30,   December 31,   September 30,
(Dollars in thousands, except share data) 2018     2018     2017     2017  
Assets              
Cash and cash equivalents $ 77,837     $ 34,767     $ 63,661     $ 92,750  
Securities available-for-sale 199,051     196,047     150,969     141,700  
Federal Home Loan Bank stock 8,325     8,303     8,303     8,303  
Mortgage loans held for sale, at fair value 9,392     3,991     4,548     4,459  
Loans:              
Originated loans 1,022,119     946,724     920,895     857,104  
Acquired loans 92,880     99,065     114,028     123,617  
Total loans 1,114,999     1,045,789     1,034,923     980,721  
Less: Allowance for loan losses (11,890 )   (11,465 )   (11,713 )   (11,630 )
Net loans 1,103,109     1,034,324     1,023,210     969,091  
Premises and equipment, net 13,506     13,144     13,435     13,758  
Goodwill 9,387     9,387     9,387     9,387  
Other intangible assets, net 502     557     667     726  
Bank-owned life insurance 11,785     11,703     11,542     11,460  
Income tax benefit 3,201     2,510     3,102     3,780  
Other assets 10,174     8,180     12,467     11,505  
Total assets $ 1,446,269     $ 1,322,913     $ 1,301,291     $ 1,266,919  
Liabilities              
Deposits:              
Noninterest-bearing demand deposits $ 380,369     $ 320,213     $ 324,923     $ 318,610  
Interest-bearing demand deposits 50,226     57,060     62,644     57,798  
Money market and savings deposits 238,351     247,542     289,363     267,075  
Time deposits 461,365     440,401     443,452     426,391  
Total deposits 1,130,311     1,065,216     1,120,382     1,069,874  
Borrowings 146,483     86,594     47,833     62,896  
Subordinated notes 14,882     14,867     14,844     14,830  
Other liabilities 9,134     12,791     10,272     12,334  
Total liabilities 1,300,810     1,179,468     1,193,331     1,159,934  
Shareholders' equity              
Common stock:              
Authorized - 20,000,000 shares              
Issued and outstanding - 7,749,216 shares at 9/30/2018, 7,748,641 shares at 6/30/2018, 6,435,461 shares at 12/31/2017 and 6,392,041 shares at 9/30/2017 90,411     90,201     59,511     58,922  
Retained earnings 59,173     56,383     49,232     48,299  
Accumulated other comprehensive loss, net of tax (4,125 )   (3,139 )   (783 )   (236 )
Total shareholders' equity 145,459     143,445     107,960     106,985  
Total liabilities and shareholders' equity $ 1,446,269     $ 1,322,913     $ 1,301,291     $ 1,266,919  

 

 

Consolidated Statements of Income
(Unaudited)
  Three months ended   Nine months ended
  September 30,   June 30,   September 30,   September 30,   September 30,
(In thousands, except per share data) 2018   2018   2017   2018   2017
Interest income                  
Originated loans, including fees $ 12,653     $ 11,833   $ 10,172     $ 35,664     $ 29,265  
Acquired loans, including fees 2,454     2,293   2,610     7,173     9,441  
Securities:                  
Taxable 816     667   422     2,057     1,238  
Tax-exempt 450     380   260     1,181     641  
Federal funds sold and other 256     207   288     708     648  
Total interest income 16,629     15,380   13,752     46,783     41,233  
Interest Expense                  
Deposits 2,802     2,487   1,604     7,467     4,332  
Borrowed funds 502     225   214     946     614  
Subordinated notes 256     253   256     759     759  
Total interest expense 3,560     2,965   2,074     9,172     5,705  
Net interest income 13,069     12,415   11,678     37,611     35,528  
Provision expense (benefit) for loan losses 619     (710   194     463     460  
Net interest income after provision for loan losses 12,450     13,125   11,484     37,148     35,068  
Noninterest income                  
Service charges on deposits 655     618   607     1,915     1,905  
Net gain on sale of securities       118         176  
Mortgage banking activities 754     404   548     1,394     1,260  
Net gain on sale of commercial loans     11       11     146  
Other charges and fees 515     419   668     1,428     1,618  
Total noninterest income 1,924     1,452   1,941     4,748     5,105  
Noninterest expense                  
Salary and employee benefits 6,888     6,169   5,413     19,013     16,003  
Occupancy and equipment expense 1,173     1,074   1,106     3,293     3,130  
Professional service fees 494     471   603     1,231     1,683  
Marketing expense 264     291   289     697     768  
Printing and supplies expense 127     112   137     343     371  
Data processing expense 565     511   492     1,512     1,384  
Other expense 943     1,077   1,291     3,205     3,520  
Total noninterest expense 10,454     9,705   9,331     29,294     26,859  
Income before income taxes 3,920     4,872   4,094     12,602     13,314  
Income tax provision 665     860   1,259     2,167     4,406  
Net income $ 3,255     $ 4,012   $ 2,835     $ 10,435     $ 8,908  
Earnings per common share:                  
Basic $ 0.42     $ 0.54   $ 0.44     $ 1.44     $ 1.40  
Diluted $ 0.41     $ 0.53   $ 0.43     $ 1.41     $ 1.35  
Average common shares outstanding - basic 7,749     7,456   6,392     7,264     6,383  
Average common shares outstanding - diluted 7,901     7,613   6,610     7,414     6,602  

 

 

Net Interest Income and Net Interest Margin
(Unaudited) For the three months ended,
  September 30, 2018   June 30, 2018   September 30, 2017
(Dollars in thousands) Average
Balance
Interest (1) Average
Rate (2)
  Average
Balance
Interest (1) Average
Rate (2)
  Average
Balance
Interest (1) Average
Rate (2)
Interest-earning assets:                      
Gross loans (3) $ 1,075,642   $ 15,107   5.57 %   $ 1,045,715   $ 14,126   5.42 %   $ 965,149   $ 12,782   5.25 %
Investment securities (4):                      
Taxable 134,619   817   2.41     114,957   667   2.33     83,402   424   2.01  
Tax-exempt 67,599   449   3.13     58,976   380   3.10     42,300   260   3.60  
Interest earning cash balances 28,685   157   2.17     25,828   119   1.85     50,213   160   1.27  
Federal Home Loan Bank Stock 8,303   99   4.73     8,303   88   4.25     8,303   126   6.02  
Total interest-earning assets $ 1,314,848   $ 16,629   5.04 %   $ 1,253,779   $ 15,380   4.94 %   $ 1,149,367   $ 13,752   4.79 %
Non-earning assets:                      
Cash and due from banks 22,358         17,800         18,905      
Premises and equipment 13,465         12,621         13,846      
Goodwill 9,387         9,387         9,387      
Other intangible assets, net 533         589         761      
Bank-owned life insurance 11,732         11,650         11,406      
Allowance for loan losses (11,591 )       (11,473 )       (11,594 )    
Other non-earning assets 7,414         7,839         14,039      
Total assets $ 1,368,146         $ 1,302,192         $ 1,206,117      
Interest-bearing liabilities:                      
Interest-bearing demand deposits $ 60,022   $ 52   0.34 %   $ 64,394   $ 48   0.30 %   $ 59,684   $ 41   0.27 %
Money market and savings deposits 249,595   625   0.99     276,496   678   0.98     241,819   405   0.66  
Time deposits 463,373   2,125   1.82     445,894   1,761   1.58     375,839   1,158   1.22  
Borrowings 95,371   502   2.09     48,604   225   1.86     74,892   214   1.13  
Subordinated notes 14,874   256   6.83     14,859   253   6.83     14,821   256   6.85  
Total interest-bearing liabilities $ 883,235   $ 3,560   1.60 %   $ 850,247   $ 2,965   1.40 %   $ 767,055   $ 2,074   1.07 %
Noninterest-bearing liabilities and shareholders' equity:                      
Noninterest bearing demand deposits 329,459         306,547         319,822      
Other liabilities 9,956         10,923         12,939      
Shareholders' equity 145,496         134,475         106,301      
Total liabilities and shareholders' equity $ 1,368,146         $ 1,302,192         $ 1,206,117      
Net interest income   $ 13,069         $ 12,415         $ 11,678    
Interest spread     3.44 %       3.54 %       3.72 %
Net interest margin (5)     3.94         3.97         4.03  
Tax equivalent effect     0.03         0.02         0.04  
Net interest margin on a fully tax equivalent basis     3.97         3.99         4.07  

(1) Interest income is shown on actual basis and does not include taxable equivalent adjustments.
(2) Average rates and yields are presented on an annual basis and includes a taxable equivalent adjustment to interest income of $84 thousand, $76 thousand and $124 thousand on tax-exempt securities for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017, respectively, using a federal income tax rate of 21% for the 2018 periods and 35% for the 2017 period.
(3) Includes nonaccrual loans.
(4) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.

 

 

  For the nine months ended,
  September 30, 2018   September 30, 2017
(Dollars in thousands) Average
Balance
Interest (1) Average
Rate (2)
  Average
Balance
Interest (1) Average
Rate (2)
Interest-earning assets:              
Gross loans (3) $ 1,052,942   $ 42,837   5.44 %   $ 960,445   $ 38,706   5.39 %
Investment securities (4):              
Taxable 117,356   2,057   2.34     80,470   1,239   2.06  
Tax-exempt 60,570   1,181   3.13     35,015   641   3.61  
Interest earning cash balances 27,207   382   1.88     45,760   381   1.11  
Federal Home Loan Bank Stock 8,303   326   5.25     8,116   266   4.38  
Total interest-earning assets $ 1,266,378   $ 46,783   4.96 %   $ 1,129,806   $ 41,233   4.92 %
Non-earning assets:              
Cash and due from banks 19,577         18,828      
Premises and equipment 13,150         14,897      
Goodwill 9,387         9,387      
Other intangible assets, net 588         819      
Company-owned life insurance 11,651         11,324      
Allowance for loan losses (11,628 )       (11,429 )    
Other non-earning assets 9,132         11,681      
Total assets $ 1,318,235         $ 1,185,313      
Interest-bearing liabilities:              
Deposits:              
Interest-bearing demand deposits $ 62,626   $ 151   0.32 %   $ 58,418   $ 119   0.27 %
Money market and savings deposits 266,508   1,851   0.93     264,389   1,184   0.60  
Time deposits 455,299   5,465   1.60     351,073   3,029   1.15  
Borrowings 67,073   946   1.89     88,280   614   0.93  
Subordinated notes 14,859   759   6.83     14,806   759   6.85  
Total interest-bearing liabilities $ 866,365   $ 9,172   1.42 %   $ 776,966   $ 5,705   0.98 %
Noninterest-bearing liabilities and shareholders' equity:              
Noninterest bearing demand deposits 311,675         295,413      
Other liabilities 9,941         10,396      
Shareholders' equity 130,254         102,538      
Total liabilities and shareholders' equity $ 1,318,235         $ 1,185,313      
Net interest income   $ 37,611         $ 35,528    
Interest spread     3.54 %       3.94 %
Net interest margin (5)     3.97         4.20  
Tax equivalent effect     0.02         0.04  
Net interest margin on a fully tax equivalent basis     3.99         4.24  

(1) Interest income is shown on actual basis and does not include taxable equivalent adjustments.
(2) Average rates and yields are presented on an annual basis and includes a taxable equivalent adjustment to interest income of $235 thousand and $306 thousand on tax-exempt securities for the nine months ended September 30, 2018 and September 30, 2017, respectively, using a federal income tax rate of 21% for the 2018 period and 35% for the 2017 period.
(3) Includes nonaccrual loans.
(4) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.

 

 

Loan Composition
(Unaudited)
As of
  September 30,   June 30,   March 31,   December 31,   September 30,
(Dollars in thousands) 2018   2018   2018   2017   2017
Commercial real estate                  
Non-owner occupied $ 362,450   $ 361,341   $ 360,014   $ 343,420   $ 312,644
Owner-occupied 190,131   172,615   172,608   168,342   156,690
Total commercial real estate 552,581   533,956   532,622   511,762   469,334
Commercial and industrial 397,060   363,239   371,464   377,686   380,512
Residential real estate 164,356   147,763   146,436   144,439   130,117
Consumer 1,002   831   832   1,036   758
Total loans $ 1,114,999   $ 1,045,789   $ 1,051,354   $ 1,034,923   $ 980,721

 

Impaired Assets
(Unaudited)
As of
  September 30,   June 30,   March 31,   December 31,   September 30,
(Dollars in thousands) 2018   2018   2018   2017   2017
Nonaccrual loans                  
Commercial real estate $ 4,559     $ 2,557     $ 1,946     $ 2,257     $ 1,998  
Commercial and industrial 5,763     5,983     8,192     9,024     11,911  
Residential real estate 2,546     2,737     2,838     2,767     1,727  
Consumer 5                  
Total nonperforming loans 12,873     11,277     12,976     14,048     15,636  
Other real estate owned             652     384  
Total nonperforming assets 12,873     11,277     12,976     14,700     16,020  
Performing troubled debt restructurings                  
Commercial real estate 1,511     1,517     1,525         287  
Commercial and industrial 574     578     582     961     975  
Residential real estate 365     364     258     261     1,049  
Total performing troubled debt restructurings 2,450     2,459     2,365     1,222     2,311  
Total impaired assets $ 15,323     $ 13,736     $ 15,341     $ 15,922     $ 18,331  
                   
Loans 90 days or more past due and still accruing $ 354     $ 259     $ 263     $ 440     $ 486  

 

Media Contact:
Nicole Ransom
(248) 538-2183

Investor Relations Contact:
Peter Root
(248) 538-2186

Level-One-Logo.png

 

Source: Level One Bancorp, Inc.


Search Investor Relations