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CORNELIUS, N.C., Oct. 25, 2016 -- Aquesta Financial Holdings, Inc and subsidiaries – including its primary subsidiary Aquesta Bank (“Aquesta”) (OTC Market:AQFH) announced today record earnings and excellent loan growth for the third quarter of 2016 (three month period ending September 30, 2016). For the third quarter, Aquesta had unaudited net income of $635,000 (21 cents per share) compared to third quarter of 2015 net income of $507,000 (17 cents per share).
Jim Engel, CEO & President of Aquesta said, “I’m very happy to announce continued excellent earnings combined with excellent loan growth. Our strategy of investing in our people and our commitment to providing the very best banking services are allowing Aquesta to capture both increased market share and profitability.”
Key Highlights
- Excellent loan and deposit growth of over 30% annualized
- Solid asset quality
- Earnings growth for current quarter over prior year quarter of over 30 %
- Combined offices of the Wilmington insurance office into the Wilmington bank branch. Grand opening on November 5th
Excellent Balance Sheet Growth
At September 30, 2016, Aquesta’s total assets were $346.5 million compared to $293.1 million at December 31, 2015. This represents an annualized increase of 24%. Total loans were $240.1 million at September 30, 2016 compared to $195.6 million at December 31, 2015 or a 30% annualized increase. Core deposits were $183.9 million at September 30, 2016 compared to $147.4 million at December 31, 2015 or an annualized increase of 33%.
Strong Asset Quality
Asset quality remains very strong. Nonperforming assets decreased to $1.8 million as of September 30, 2016 as compared to $2.3 million at June 31, 2016. Other real estate owned (i.e., foreclosed property) was $1.7 million at September 30, 2016.
Net Interest Income
Net interest income was $2.9 million as of September 30, 2016 compared to $2.6 million as of September 30, 2015. This is an increase of $304 thousand or 12%. The increase in net interest income continues to be directly associated with the Company’s loan growth over the past year.
Non Interest Expense
Non-interest expense was $3.2 million for the third quarter of 2016 compared to $2.8 million for the third quarter of 2015. The increase in expense was due to the additional personnel and occupancy cost associated with the addition of two new branches.
Personnel expense was at $2.0 million for the third quarter of 2016 compared to $1.6 million for the third quarter of 2015.
Occupancy expense increased $56 thousand for the third quarter of 2016 compared to the second quarter of 2016. This was mainly due to the addition of the SouthPark and Wilmington branches. Aquesta had losses on OREO of $35 thousand as compared to no OREO losses for the third quarter of 2015. The losses recognized during the third quarter 2016 were due to the sale of a piece of OREO property.
Below are the following financial highlights for comparison:
| Aquesta Financial Holdings, Inc. | ||||||
| Select Financial Highlights | ||||||
| (Dollars in thousands, except per share data) | ||||||
| 09/30/16 | 12/31/15 | |||||
| (unaudited) | (audited) | |||||
| Period End Balance Sheet Data: | ||||||
| Loans | $ | 240,057 | $ | 195,638 | ||
| Allowance for loan and lease losses | 2,564 | 2,561 | ||||
| Investment securities | 70,236 | 65,275 | ||||
| Goodwill | 687 | 687 | ||||
| Insurance agency intangible | 1,851 | 1,067 | ||||
| Total assets | 346,542 | 293,065 | ||||
| Core deposits | 183,892 | 147,435 | ||||
| CDs and IRAs | 63,858 | 64,458 | ||||
| Shareholders equity | 25,500 | 23,461 | ||||
| Ending shares outstanding | 3,075,852 | 3,048,170 | ||||
| Book value per share | 8.29 | 7.70 | ||||
| Tangible book value per share | 7.46 | 7.12 | ||||
| For the three months ended | For the nine months ended | |||||||||||
| 09/30/16 | 09/30/15 | 09/30/16 | 09/30/15 | |||||||||
| (unaudited) | (audited) | (unaudited) | (audited) | |||||||||
| Income and Per Share Data: | ||||||||||||
| Interest income | $ | 3,424 | $ | 2,899 | $ | 9,555 | $ | 8,319 | ||||
| Interest expense | 569 | 348 | 1,479 | 1,063 | ||||||||
| Net interest income | 2,855 | 2,551 | 8,076 | 7,256 | ||||||||
| Provision for loan losses | 156 | 50 | 196 | 186 | ||||||||
| Net interest income after provision for loan losses | 2,699 | 2,501 | 7,880 | 7,070 | ||||||||
| Non interest income | 1,447 | 1,044 | 3,938 | 2,974 | ||||||||
| Non interest expense | 3,170 | 2,755 | 9,331 | 7,511 | ||||||||
| Income before income taxes | 976 | 790 | 2,487 | 2,533 | ||||||||
| Income tax expense | 341 | 283 | 861 | 935 | ||||||||
| Net income | $ | 635 | $ | 507 | $ | 1,626 | $ | 1,598 | ||||
| Earnings per share - basic | $ | 0.21 | $ | 0.17 | $ | 0.53 | $ | 0.52 | ||||
| Earnings per share - diluted | 0.20 | 0.16 | 0.51 | 0.51 | ||||||||
| Weighted average shares - basic | 3,075,092 | 3,072,005 | 3,059,074 | 3,073,573 | ||||||||
| Weighted average shares - diluted | 3,215,241 | 3,133,250 | 3,199,223 | 3,134,818 | ||||||||
| 09/30/16 | 12/31/15 | |||||||||
| (unaudited) | (audited) | |||||||||
| Select performance ratios: | ||||||||||
| Return on average assets | 0.68 | % | 0.76 | % | ||||||
| Return on average equity | 8.86 | % | 8.75 | % | ||||||
| Asset quality data: | ||||||||||
| 90 days or more and accruing | $ | - | $ | - | ||||||
| Non accrual loans | 122 | - | ||||||||
| Other real estate loans | 1,689 | 900 | ||||||||
| Total non performing assets | 1,811 | 900 | ||||||||
| Troubled debt restructurings | $ | 227 | $ | 277 | ||||||
| Non performing assets / total assets | 0.52 | % | 0.31 | % | ||||||
| Allowance for loan losses / total loans | 1.07 | % | 1.31 | % | ||||||
Aquesta Financial Holdings, Inc. is the holding company to its wholly owned subsidiaries, Aquesta Bank and Aquesta Insurance Services, Inc. Aquesta Bank is a full service community bank headquartered in Cornelius, North Carolina about 20 miles north of Charlotte with 8 full service locations. Aquesta Insurance Services, Inc. offers property, casualty and health insurance products as an independent agency. Aquesta Financial Holdings Inc. common stock is publicly traded and is quoted on OTC under the symbol “AQFH”.
For additional information, please contact Kristin Couch (Executive Vice President and Chief Financial Officer) at 704-439-4343 or visit us online at www.aquesta.com.
