YONKERS, N.Y., Feb. 3, 2015 /PRNewswire/ -- Hudson Valley Holding Corp. (NYSE: HVB) reported fourth quarter and twelve month results for 2014 including growth of Hudson Valley Bank's loan and securities portfolios and core deposits, lower recurring operating expenses and continued improvement in asset quality.
The parent company of Hudson Valley Bank earned $0.6 million, or $0.03 per diluted share, in the fourth quarter of 2014, compared to a loss of $8.5 million, or $0.43 loss per diluted share, in the fourth quarter of 2013. During the fourth quarter of 2014, the Company incurred a $2.4 million after tax expense in connection with its pending merger with Sterling Bancorp and a $1.2 million after tax loss in connection with the sale of A.R. Schmeidler, which closed on January 22, 2015. During the fourth quarter of 2013, the Company incurred an $11.1 million after tax, or $0.55 per diluted share goodwill impairment charge and a $0.7 million after tax loss, or $0.04 per diluted share, other than temporary impairment charge on the Company's $10 million portfolio of collateralized debt obligation bank issued trust preferred securities.
The following table details the Company's net income and diluted earnings per common share and the effect of the loss on the sale of A.R. Schmeidler and the merger related charges.
(In thousands, except per share data) | ||||||||
Three Months Ended | Year Ended | |||||||
December 31, 2014 | December 31, 2014 | |||||||
Net Income | Diluted Earnings Per Common Share | Net Income | Diluted Earnings Per Common Share | |||||
Net income before loss on sale of subsidiary and merger related expenses | $ 4,265 | $ 0.21 | $ 11,569 | $ 0.58 | ||||
Loss on sale of subsidiary, net of tax | (1,231) | (0.06) | (1,231) | (0.06) | ||||
Merger related expenses, net of tax | (2,396) | (0.12) | (2,396) | (0.12) | ||||
Net income, as reported | $ 638 | $ 0.03 | $ 7,942 | $ 0.40 | ||||
Balance Sheet
Cash and cash equivalents totaled $292.9 million at December 31, 2014, decreasing 14.1 percent during the fourth quarter and 58.1 percent from December 31, 2013. Cash and cash equivalents totaled 9.3 percent of total assets at December 31, 2014, compared to 10.9 percent at September 30, 2014, and 23.3 percent at December 31, 2013.
Investment securities totaled $819.9 million at December 31, 2014, decreasing 3.2 percent during the fourth quarter and increasing 49.5 percent from December 31, 2013. As previously reported the Company purchased $304 million of high quality investment securities in June 2014.
Net loans totaled $1.9 billion at December 31, 2014, increasing 5.6 percent during the fourth quarter of 2014 and 18.3 percent from December 31, 2013.
Commercial and industrial loans of $448.6 million at December 31, 2014, represented 23.3 percent of total loans, compared to 17.4 percent at the end of the linked quarter and 15.9 percent at the end of the year-ago quarter. The growth in commercial and industrial loans was primarily due to the production generated by the asset based lending team.
Loans secured by 1-4 family residential mortgages of $278.6 million at December 31, 2014, represented 14.5 percent of total loans, compared to 15.8 percent at the end of the linked quarter and 19.7 percent at the end of the year-ago quarter.
Deposits totaled $2.8 billion at December 31, 2014, increasing 0.5 percent during the fourth quarter and 5.6 percent from December 31, 2013.
Core deposits represented 97 percent of total deposits at the end of the fourth quarter of 2014, unchanged from the linked and year-ago quarters. Core deposits, which exclude time deposits greater than $100,000, totaled $2.7 billion at both December 31, 2014 and September 30, 2014, compared to $2.5 billion at December 31, 2013.
Portfolio Credit Quality
Nonperforming assets (NPAs), which include non-accrual loans, accruing loans delinquent over 90 days and other real estate owned (OREO), were $22.4 million at December 31, 2014, compared to $27.0 million at September 30, 2014 and $23.5 million at December 31, 2013. NPAs totaled 0.71 percent of total assets at December 31, 2014, compared to 0.87 percent at September 30, 2014 and 0.78 percent at December 31, 2013.
Net charge-offs were $1.0 million for the fourth quarter of 2014, compared to $0.2 million in the linked quarter and $0.5 million in the year-ago quarter. As a percentage of average loans, annualized net charge-offs were 0.21 percent for the fourth quarter of 2014, 0.05 percent in the linked quarter, and 0.13 percent in the year-ago quarter.
The Company's allowance for loan losses was $27.3 million at December 31, 2014 compared to $27.7 million at September 30, 2014 and $26.0 million at December 31, 2013. The allowance measured 1.42 percent, 1.52 percent and 1.59 percent of total loans at each of those dates, respectively.
Classified assets at December 31, 2014 represented 16.5 percent of Tier 1 capital plus the allowance for loan losses, compared to 19.1 percent at September 30, 2014 and 20.7 percent at December 31, 2013.
The Company's provision for loan losses in the fourth quarter of 2014 was $0.6 million, compared to $0.7 million in the linked quarter and $0.6 million in the year-ago quarter.
Revenues and Margin
Net interest income was $24.9 million in the fourth quarter of 2014, compared to $23.6 million in the linked quarter and $20.6 million in the year-ago quarter.
The Company's net interest margin was 3.34 percent in the fourth quarter of 2014, compared to 3.12 percent in the linked quarter and 2.95 percent in the year-ago quarter. The increase was primarily a result of the Company deploying liquidity into higher yielding assets.
The yield on interest-earning assets averaged 3.51 percent in the fourth quarter of 2014, compared to 3.28 percent in the linked quarter and 3.14 percent in the year-ago quarter. The yield on interest-earning assets included the effects of loan prepayment penalties of $0.7 million, $0.1 million, and $0.4 million for the quarters ended December 31, 2014, September 30, 2014, and December 31, 2013, respectively. The average cost of deposits was 0.18 percent in the fourth quarter of 2014, 0.17 percent in the linked quarter, and 0.18 percent in the year-ago quarter.
Non-interest income was $2.1 million for the fourth quarter of 2014, compared to $4.0 million for the linked quarter, and $2.6 million in the year-ago quarter. The decline in non-interest income in the fourth quarter of 2014 was primarily attributable to the $2.0 million loss the Company recognized on the sale of A.R. Schmeidler, the Company's asset management subsidiary, which closed on January 22, 2015.
Non-Interest Expense
Total non-interest expense for the fourth quarter of 2014 was $25.1 million, compared to $22.2 million in the linked quarter and $39.1 million in the year-ago quarter. Expense savings achieved in 2013 through the elimination of non-profitable operations, were reinvested into the asset based lending and equipment financing units. Salaries and employee benefits expense was $14.5 million in the fourth quarter of 2014, compared to $12.6 million in the linked quarter and $11.5 million in the year-ago quarter. The increase in salaries and employee benefits expense was primarily attributable to the recognition of $3.0 million of accelerated vesting expense related to the pending merger with Sterling Bancorp, partially offset by employee turnover. Professional fees included approximately $0.8 million merger related legal and advisory fees.
Quarterly Cash Dividend and Capital Management
The Company's board of directors declared a quarterly cash dividend of $0.08 per share, payable on February 23, 2015, to all common stock shareholders of record as of the close of business on February 6, 2015.
At December 31, 2014, the Company maintained a total risk-based capital ratio of 15.1 percent, a Tier 1 risk-based capital ratio of 13.9 percent, and a Tier 1 leverage ratio of 9.3 percent. Its Hudson Valley Bank subsidiary at December 31, 2014 maintained a total risk-based capital ratio of 14.8 percent, a Tier 1 risk-based capital ratio of 13.6 percent, and a Tier 1 leverage ratio of 9.1 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.
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 principals throughout 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 $3.1 billion in assets, $2.8 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.
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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 December 31, 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;
- ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by Sterling Bancorp and Hudson Valley Holding Corp. stockholders, on the expected terms and schedule; and
- delay in closing the merger.
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 December 31, 2014 and 2013 | ||
(In thousands, except per share data) | ||
Three Months Ended | ||
December 31 | ||
2014 | 2013 | |
Interest Income: | ||
Loans, including fees | $ 21,877 | $ 18,319 |
Securities: | ||
Taxable | 3,521 | 2,499 |
Exempt from federal income taxes | 551 | 671 |
Federal funds sold | 8 | 8 |
Deposits in banks | 191 | 449 |
Total interest income | 26,148 | 21,946 |
Interest Expense: | ||
Deposits | 1,228 | 1,149 |
Securities sold under repurchase agreements and other short-term borrowings | 13 | 5 |
Other borrowings | - | 182 |
Total interest expense | 1,241 | 1,336 |
Net Interest Income | 24,907 | 20,610 |
Provision for loan losses | 603 | 648 |
Net interest income after provision for loan losses | 24,304 | 19,962 |
Non-Interest Income: | ||
Service charges | 1,547 | 1,246 |
Investment advisory fees | 1,910 | 1,924 |
Realized gains on securities available for sale, net | 11 | - |
Net impairment loss recognized in earnings | - | (1,240) |
Loss on sale of subsidiary company | (2,006) | - |
Other income | 642 | 627 |
Total non-interest income | 2,104 | 2,557 |
Non-Interest Expense: | ||
Salaries and employee benefits | 14,501 | 11,494 |
Occupancy | 2,052 | 2,287 |
Professional services | 2,812 | 1,631 |
Equipment | 1,058 | 1,050 |
Business development | 707 | 575 |
FDIC assessment | 624 | 979 |
Goodwill impairment | - | 18,700 |
Other operating expenses | 3,328 | 2,410 |
Total non-interest expense | 25,082 | 39,126 |
Income (Loss) Before Income Taxes | 1,326 | (16,607) |
Income Tax Expense (Benefit) | 688 | (8,104) |
Net Income (Loss) | $ 638 | $ (8,503) |
Basic Earnings (Loss) Per Common Share | $ 0.03 | $ (0.43) |
Diluted Earnings (Loss) Per Common Share | $ 0.03 | $ (0.43) |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||
For the years ended December 31, 2014 and 2013 | |||||
(In thousands, except per share data) | |||||
Year Ended | |||||
December 31 | |||||
2014 | 2013 | ||||
Interest Income: | |||||
Loans, including fees | $ 81,393 | $ 75,209 | |||
Securities: | |||||
Taxable | 12,115 | 9,436 | |||
Exempt from federal income taxes | 2,388 | 2,915 | |||
Federal funds sold | 31 | 38 | |||
Deposits in banks | 1,164 | 1,985 | |||
Total interest income | 97,091 | 89,583 | |||
Interest Expense: | |||||
Deposits | 4,714 | 4,895 | |||
Securities sold under repurchase agreements and other short-term borrowings | 39 | 27 | |||
Other borrowings | 10 | 724 | |||
Total interest expense | 4,763 | 5,646 | |||
Net Interest Income | 92,328 | 83,937 | |||
Provision for loan losses | 1,792 | 2,476 | |||
Net interest income after provision for loan losses | 90,536 | 81,461 | |||
Non-Interest Income: | |||||
Service charges | 6,184 | 5,813 | |||
Investment advisory fees | 7,630 | 7,731 | |||
Realized gains on securities available for sale, net | 50 | - | |||
Net impairment loss recognized in earnings | - | (1,240) | |||
Loss on sale of subsidiary company | (2,006) | - | |||
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 | 2,535 | 2,823 | |||
Total non-interest income | 12,533 | 15,144 | |||
Non-Interest Expense: | |||||
Salaries and employee benefits | 52,836 | 45,109 | |||
Occupancy | 8,567 | 8,590 | |||
Professional services | 8,229 | 6,846 | |||
Equipment | 4,101 | 4,139 | |||
Business development | 3,061 | 2,165 | |||
FDIC assessment | 2,311 | 3,879 | |||
Goodwill impairment | - | 18,700 | |||
Other operating expenses | 12,040 | 10,673 | |||
Total non-interest expense | 91,145 | 100,101 | |||
Income (Loss) Before Income Taxes | 11,924 | (3,496) | |||
Income Tax Expense (Benefit) | 3,982 | (4,626) | |||
Net Income | $ 7,942 | $ 1,130 | |||
Basic Earnings Per Common Share | $ 0.40 | $ 0.06 | |||
Diluted Earnings Per Common Share | $ 0.40 | $ 0.06 | |||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||
December 31, 2014 and December 31, 2013 | |||||
(In thousands, except share and per share data) | |||||
December 31 | December 31 | ||||
2014 | 2013 | ||||
ASSETS | |||||
Cash and non-interest earning due from banks | $ 33,208 | $ 37,711 | |||
Interest earning deposits in banks | 259,660 | 661,643 | |||
Total cash and cash equivalents | 292,868 | 699,354 | |||
Federal funds sold | 13,673 | 27,134 | |||
Securities available for sale, at estimated fair value (amortized cost of $815,077 in | |||||
2014 and $550,785 in 2013) | 815,716 | 542,198 | |||
Securities held to maturity, at amortized cost (estimated fair value of $4,404 in | |||||
2014 and $6,556 in 2013) | 4,158 | 6,238 | |||
Federal Home Loan Bank of New York (FHLB) stock | 2,409 | 3,478 | |||
Loans (net of allowance for loan losses of $27,342 in 2014 and $25,990 in 2013) | 1,900,814 | 1,606,179 | |||
Accrued interest and other receivables | 13,814 | 14,663 | |||
Premises and equipment, net | 15,251 | 15,103 | |||
Deferred income tax, net | 25,770 | 31,433 | |||
Bank owned life insurance | 43,058 | 41,224 | |||
Goodwill | 3,989 | 5,142 | |||
Other intangible assets | 523 | 713 | |||
Other assets | 6,527 | 6,340 | |||
Total Assets | $ 3,138,570 | $ 2,999,199 | |||
LIABILITIES | |||||
Deposits: | |||||
Non-interest bearing | $ 1,081,251 | $ 1,069,631 | |||
Interest bearing | 1,699,821 | 1,564,113 | |||
Total deposits | 2,781,072 | 2,633,744 | |||
Securities sold under repurchase agreements and other short-term borrowings | 28,161 | 34,379 | |||
Other borrowings | - | 16,388 | |||
Accrued interest and other liabilities | 31,771 | 30,379 | |||
Total Liabilities | 2,841,004 | 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 | |||||
20,082,568 and 19,935,559 shares in 2014 and 2013, respectively | 4,276 | 4,247 | |||
Additional paid-in capital | 356,339 | 351,108 | |||
Retained deficit | (4,764) | (7,111) | |||
Accumulated other comprehensive loss | (721) | (6,371) | |||
Treasury stock, at cost; 1,299,414 shares in 2014 and 2013 | (57,564) | (57,564) | |||
Total Stockholders' Equity | 297,566 | 284,309 | |||
Total Liabilities and Stockholders' Equity | $ 3,138,570 | $ 2,999,199 | |||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||||
Average Balances and Interest Rates | |||||||
For the three months ended December 31, 2014 and 2013 | |||||||
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 (dollars in thousands). | |||||||
Three Months Ended December 31, | |||||||
2014 | 2013 | ||||||
(Unaudited) | Average | Yield/ | Average | Yield/ | |||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | ||
ASSETS | |||||||
Interest earning assets: | |||||||
Deposits in Banks | $ 283,339 | $ 191 | 0.27% | $ 653,258 | $ 449 | 0.27% | |
Federal funds sold | 15,833 | 8 | 0.20% | 20,905 | 8 | 0.15% | |
Securities: (1) | |||||||
Taxable | 738,745 | 3,521 | 1.91% | 468,687 | 2,499 | 2.13% | |
Exempt from federal income taxes | 102,822 | 848 | 3.30% | 89,447 | 1,033 | 4.62% | |
Loans, net (2) | 1,842,898 | 21,877 | 4.75% | 1,572,554 | 18,319 | 4.66% | |
Total interest earning assets | 2,983,637 | 26,445 | 3.55% | 2,804,851 | 22,308 | 3.18% | |
Non-interest earning assets: | |||||||
Cash & due from banks | 58,070 | 56,861 | |||||
Other assets | 108,164 | 123,598 | |||||
Total non-interest earning assets | 166,234 | 180,459 | |||||
Total assets | $ 3,149,871 | $ 2,985,310 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Interest bearing liabilities: | |||||||
Deposits: | |||||||
Money market | $ 982,562 | $ 846 | 0.34% | $ 898,246 | $ 880 | 0.39% | |
Savings | 121,714 | 34 | 0.11% | 125,393 | 63 | 0.20% | |
Time | 109,748 | 126 | 0.46% | 117,324 | 130 | 0.44% | |
Checking with interest | 489,473 | 222 | 0.18% | 451,279 | 76 | 0.07% | |
Securities sold under repo & other s/t borrowings | 38,472 | 13 | 0.14% | 23,213 | 5 | 0.09% | |
Other borrowings | - | - | 0.00% | 16,392 | 182 | 4.44% | |
Total interest bearing liabilities | 1,741,969 | 1,241 | 0.28% | 1,631,847 | 1,336 | 0.33% | |
Non-interest bearing liabilities: | |||||||
Demand deposits | 1,078,777 | 1,030,419 | |||||
Other liabilities | 33,154 | 30,414 | |||||
Total non-interest bearing liabilities | 1,111,931 | 1,060,833 | |||||
Stockholders' equity (1) | 295,971 | 292,630 | |||||
Total liabilities and stockholders' equity | $ 3,149,871 | $ 2,985,310 | |||||
Net interest earnings | $ 25,204 | $ 20,972 | |||||
Net yield on interest earning assets | 3.38% | 2.99% | |||||
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(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 ("TE") 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 years ended December 31, 2014 and 2013 | |||||||
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 (dollars in thousands). | |||||||
Years Ended December 31, | |||||||
2014 | 2013 | ||||||
(Unaudited) | Average | Yield/ | Average | Yield/ | |||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | ||
ASSETS | |||||||
Interest earning assets: | |||||||
Deposits in Banks | $ 461,196 | $ 1,164 | 0.25% | $ 759,011 | $ 1,985 | 0.26% | |
Federal funds sold | 18,179 | 31 | 0.17% | 22,256 | 38 | 0.17% | |
Securities: (1) | |||||||
Taxable | 619,856 | 12,115 | 1.95% | 434,926 | 9,436 | 2.17% | |
Exempt from federal income taxes | 97,917 | 3,674 | 3.75% | 84,825 | 4,485 | 5.29% | |
Loans, net (2) | 1,722,948 | 81,393 | 4.72% | 1,464,100 | 75,209 | 5.14% | |
Total interest earning assets | 2,920,096 | 98,377 | 3.37% | 2,765,118 | 91,153 | 3.30% | |
Non-interest earning assets: | |||||||
Cash & due from banks | 58,701 | 57,258 | |||||
Other assets | 109,920 | 131,197 | |||||
Total non-interest earning assets | 168,621 | 188,455 | |||||
Total assets | $ 3,088,717 | $ 2,953,573 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Interest bearing liabilities: | |||||||
Deposits: | |||||||
Money market | $ 957,298 | $ 3,209 | 0.34% | $ 885,502 | $ 3,244 | 0.37% | |
Savings | 121,935 | 147 | 0.12% | 126,605 | 330 | 0.26% | |
Time | 112,539 | 518 | 0.46% | 122,761 | 596 | 0.49% | |
Checking with interest | 501,474 | 840 | 0.17% | 437,673 | 725 | 0.17% | |
Securities sold under repo & other s/t borrowings | 33,654 | 39 | 0.12% | 26,738 | 27 | 0.10% | |
Other borrowings | 225 | 10 | 4.44% | 16,407 | 724 | 4.41% | |
Total interest bearing liabilities | 1,727,125 | 4,763 | 0.28% | 1,615,686 | 5,646 | 0.35% | |
Non-interest bearing liabilities: | |||||||
Demand deposits | 1,038,886 | 1,013,154 | |||||
Other liabilities | 30,206 | 30,823 | |||||
Total non-interest bearing liabilities | 1,069,092 | 1,043,977 | |||||
Stockholders' equity (1) | 292,500 | 293,910 | |||||
Total liabilities and stockholders' equity | $ 3,088,717 | $ 2,953,573 | |||||
Net interest earnings | $ 93,614 | $ 85,507 | |||||
Net yield on interest earning assets | 3.21% | 3.09% | |||||
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(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 ("TE") 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 | ||||
Fourth quarter 2014 and 2013 | ||||
(Dollars in thousands, except per share data) | ||||
Three Months | Three Months | Year | Year | |
Ended | Ended | Ended | Ended | |
Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2014 | Dec 31, 2013 | |
Earnings: | ||||
Net Interest Income | $ 24,907 | $ 20,610 | $ 92,328 | $ 83,937 |
Non-Interest Income | 2,104 | 2,557 | 12,533 | 15,144 |
Non-Interest Expense | 25,082 | 39,126 | 91,145 | 100,101 |
Net Income (Loss) | 638 | (8,503) | 7,942 | 1,130 |
Net Interest Margin | 3.34% | 2.95% | 3.16% | 3.04% |
Net Interest Margin (TE) (1) | 3.38% | 2.99% | 3.21% | 3.09% |
Diluted Earnings (Loss) Per Share | $ 0.03 | $ (0.43) | $ 0.40 | $ 0.06 |
Dividends Per Share | $ 0.08 | $ 0.06 | $ 0.28 | $ 0.24 |
Return on Average Equity | 0.86% | -11.90% | 2.73% | 0.39% |
Return on Average Assets | 0.08% | -1.14% | 0.26% | 0.04% |
Efficiency Ratio (2) | 84.54% | 82.47% | 82.57% | 79.90% |
Average Balances (1): | ||||
Average Assets | $ 3,149,579 | $ 2,973,970 | $ 3,086,387 | $ 2,946,892 |
Average Net Loans | 1,842,898 | 1,572,554 | 1,722,948 | 1,464,100 |
Average Investments | 841,567 | 558,134 | 717,773 | 519,751 |
Average Interest Earning Assets | 2,983,345 | 2,793,511 | 2,917,766 | 2,758,437 |
Average Deposits | 2,782,274 | 2,622,661 | 2,732,132 | 2,585,695 |
Average Borrowings | 38,472 | 39,605 | 33,879 | 43,145 |
Average Interest Bearing Liabilities | 1,741,969 | 1,631,847 | 1,727,125 | 1,615,686 |
Average Stockholders' Equity | 295,733 | 285,800 | 291,010 | 289,925 |
Asset Quality - During Period: | ||||
Provision for Loan Losses | $ 603 | $ 648 | $ 1,792 | $ 2,476 |
Net Charge-offs | 983 | 520 | 440 | 3,098 |
(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) | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
2014 | 2014 | 2014 | 2014 | 2013 | |
Period End Balances: | |||||
Total Assets | $ 3,138,570 | $ 3,120,097 | $ 3,225,384 | $ 2,906,201 | $ 2,999,199 |
Total Investments | 819,874 | 847,325 | 844,659 | 538,292 | 548,436 |
Net Loans | 1,900,814 | 1,800,653 | 1,742,569 | 1,632,795 | 1,606,179 |
Goodwill and Other Intangible Assets | 4,512 | 5,712 | 5,760 | 5,807 | 5,855 |
Total Deposits | 2,781,072 | 2,768,651 | 2,859,876 | 2,562,018 | 2,633,744 |
Total Stockholders' Equity | 297,566 | 291,344 | 292,046 | 287,553 | 284,309 |
Tangible Common Equity (1) | 293,054 | 285,632 | 286,286 | 281,746 | 278,454 |
Common Shares Outstanding | 20,082,568 | 19,984,957 | 19,984,352 | 20,032,431 | 19,935,559 |
Book Value Per Share | $ 14.82 | $ 14.58 | $ 14.61 | $ 14.35 | $ 14.26 |
Tangible Book Value Per Share (1) | $ 14.59 | $ 14.29 | $ 14.33 | $ 14.06 | $ 13.97 |
Tangible Common Equity Ratio - HVHC (1) | 9.4% | 9.2% | 8.9% | 9.7% | 9.3% |
Tier 1 Leverage Ratio - HVHC | 9.3% | 9.1% | 9.4% | 9.7% | 9.5% |
Tier 1 Risk Based Capital Ratio - HVHC | 13.9% | 14.3% | 14.7% | 16.2% | 16.2% |
Total Risk Based Capital Ratio - HVHC | 15.1% | 15.6% | 16.0% | 17.5% | 17.5% |
Tier 1 Leverage Ratio - HVB | 9.1% | 8.8% | 9.2% | 9.5% | 9.3% |
Tier 1 Risk Based Capital Ratio - HVB | 13.6% | 14.0% | 14.4% | 15.9% | 15.8% |
Total Risk Based Capital Ratio - HVB | 14.8% | 15.3% | 15.7% | 17.2% | 17.1% |
Gross Loans: | |||||
Commercial Real Estate | $ 617,299 | $ 639,049 | $ 622,615 | $ 587,366 | $ 593,476 |
Construction | 101,802 | 84,723 | 87,146 | 81,331 | 88,311 |
Residential Multi-Family | 326,416 | 328,063 | 295,008 | 249,661 | 226,898 |
Residential Other | 394,819 | 404,470 | 417,297 | 429,379 | 432,999 |
Commercial and Industrial | 448,629 | 318,257 | 308,555 | 284,025 | 258,578 |
Individuals | 13,497 | 10,905 | 11,427 | 12,908 | 17,388 |
Lease Financing | 24,942 | 42,377 | 27,049 | 14,000 | 13,140 |
Total Loans | $ 1,927,404 | $ 1,827,844 | $ 1,769,097 | $ 1,658,670 | $ 1,630,790 |
Asset Quality - Period End: | |||||
Allowance for Loan Losses | $ 27,342 | $ 27,722 | $ 27,275 | $ 26,904 | $ 25,990 |
Loans 31-89 Days Past Due Accruing | 7,923 | 7,003 | 5,572 | 9,590 | 4,625 |
Loans 90+ Days Past Due Accruing (90 PD) | - | - | - | - | - |
Nonaccrual Loans (NAL) | 22,384 | 27,027 | 20,546 | 21,006 | 23,489 |
Other Real Estate Owned (OREO) | - | - | - | - | - |
Nonperforming Loans Held For Sale (HFS) | - | - | - | - | - |
Nonperforming Assets (90 PD+NAL+OREO+HFS) | 22,384 | 27,027 | 20,546 | 21,006 | 23,489 |
Allowance / Total Loans | 1.42% | 1.52% | 1.54% | 1.62% | 1.59% |
NAL / Total Loans | 1.16% | 1.48% | 1.16% | 1.27% | 1.44% |
NAL + 90 PD / Total Loans | 1.16% | 1.48% | 1.16% | 1.27% | 1.44% |
NAL + 90 PD + OREO / Total Assets | 0.71% | 0.87% | 0.64% | 0.72% | 0.78% |
Nonperforming Assets / Total Assets | 0.71% | 0.87% | 0.64% | 0.72% | 0.78% |
(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 | Three Months | Three Months | Three Months | Three Months | |||||||
Ended | Ended | Ended | Ended | Ended | |||||||
Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | |||||||
Interest Income | $ 26,148 | $ 24,827 | $ 23,281 | $ 22,835 | $ 21,946 | ||||||
Interest Expense | 1,241 | 1,235 | 1,181 | 1,106 | 1,336 | ||||||
Net Interest Income | 24,907 | 23,592 | 22,100 | 21,729 | 20,610 | ||||||
Provision for Loan Losses | 603 | 651 | 460 | 78 | 648 | ||||||
Non-Interest Income | 2,104 | 4,019 | 3,931 | 2,479 | 2,557 | ||||||
Non-Interest Expense | 25,082 | 22,183 | 22,090 | 21,790 | 39,126 | ||||||
Income (Loss) Before Income Taxes | 1,326 | 4,777 | 3,481 | 2,340 | (16,607) | ||||||
Income Taxes | 688 | 1,515 | 1,041 | 738 | (8,104) | ||||||
Net Income (Loss) | $ 638 | $ 3,262 | $ 2,440 | $ 1,602 | $ (8,503) | ||||||
Diluted Earnings (Loss) Per Share | $ 0.03 | $ 0.16 | $ 0.12 | $ 0.08 | $ (0.43) | ||||||
Net Interest Margin | 3.34% | 3.12% | 3.05% | 3.14% | 2.95% | ||||||
Average Cost of Deposits (1) | 0.18% | 0.17% | 0.17% | 0.17% | 0.18% | ||||||
(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 | Year Ended | |||||||||||||
December 31 | December 31 | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Total average interest earning assets: | ||||||||||||||
As reported | $ 2,983,345 | $ 2,793,511 | $ 2,917,766 | $ 2,758,437 | ||||||||||
Unrealized loss on securities available-for-sale (a) | (292) | (11,340) | (2,330) | (6,681) | ||||||||||
Adjusted average total interest earning assets (1) | $ 2,983,637 | $ 2,804,851 | $ 2,920,096 | $ 2,765,118 | ||||||||||
Net interest income: | ||||||||||||||
As reported | $ 24,907 | $ 20,610 | $ 92,328 | $ 83,937 | ||||||||||
Adjustment to tax equivalency basis (b) | 297 | 362 | 1,286 | 1,570 | ||||||||||
Adjusted net interest income (1) | $ 25,204 | $ 20,972 | $ 93,614 | $ 85,507 | ||||||||||
Net yield on average interest earning assets: | ||||||||||||||
As reported | 3.34% | 2.95% | 3.16% | 3.04% | ||||||||||
Effects of (a) and (b) above | 0.04% | 0.04% | 0.05% | 0.05% | ||||||||||
Adjusted net yield on average interest earning assets (1) | 3.38% | 2.99% | 3.21% | 3.09% | ||||||||||
Average stockholders' equity: | ||||||||||||||
As reported | $ 295,733 | $ 285,800 | $ 291,010 | $ 289,925 | ||||||||||
Effects of (a) and (b) above | (238) | (6,830) | (1,490) | (3,985) | ||||||||||
Adjusted average stockholders' equity (1) | $ 295,971 | $ 292,630 | $ 292,500 | $ 293,910 | ||||||||||
Interest income: | ||||||||||||||
As reported | $ 26,148 | $ 21,946 | $ 97,091 | $ 89,583 | ||||||||||
Adjustment to tax equivalency basis (b) | 297 | 362 | 1,286 | 1,570 | ||||||||||
Adjusted interest income (1) | $ 26,445 | $ 22,308 | $ 98,377 | $ 91,153 | ||||||||||
Gross yield on average interest earning assets: | ||||||||||||||
As reported | 3.51% | 3.14% | 3.33% | 3.25% | ||||||||||
Effects of (a) and (b) above | 0.04% | 0.04% | 0.04% | 0.05% | ||||||||||
Adjusted gross yield on average interest earning assets (1) | 3.55% | 3.18% | 3.37% | 3.30% | ||||||||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | |||||
Non-GAAP Financial Measures and Reconciliation to GAAP (Continued) | |||||
(Dollars in thousands, except per share data) | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
2014 | 2014 | 2014 | 2014 | 2013 | |
Tangible Equity Ratio: | |||||
Total Stockholders' Equity: | |||||
As reported | $ 297,566 | $ 291,344 | $ 292,046 | $ 287,553 | $ 284,309 |
Less: Goodwill and other intangible assets | 4,512 | 5,712 | 5,760 | 5,807 | 5,855 |
Tangible stockholders' equity | $ 293,054 | $ 285,632 | $ 286,286 | $ 281,746 | $ 278,454 |
Total Assets: | |||||
As reported | $ 3,138,570 | $ 3,120,097 | $ 3,225,384 | $ 2,906,201 | $ 2,999,199 |
Less: Goodwill and other intangible assets | 4,512 | 5,712 | 5,760 | 5,807 | 5,855 |
Tangible Assets | $ 3,134,058 | $ 3,114,385 | $ 3,219,624 | $ 2,900,394 | $ 2,993,344 |
Tangible equity ratio (2) | 9.4% | 9.2% | 8.9% | 9.7% | 9.3% |
Tangible Book Value Per Share: | |||||
Tangible stockholders' equity | $ 293,054 | $ 285,632 | $ 286,286 | $ 281,746 | $ 278,454 |
Common shares outstanding | 20,082,568 | 19,984,957 | 19,984,352 | 20,032,431 | 19,935,559 |
Tangible book value per share (2) | $ 14.59 | $ 14.29 | $ 14.33 | $ 14.06 | $ 13.97 |
(1) Adjusted total average interest earning assets, net interest earnings, net yield on average 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. | |||||
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SOURCE Hudson Valley Holding Corp.
