CORNELIUS, N.C., April 30, 2020 (GLOBE NEWSWIRE) -- Aquesta Financial Holdings, Inc and subsidiaries (“Aquesta”) (OTC Market symbol AQFH) – including its subsidiary Aquesta Bank announced today net income for the first quarter of 2020 (three month period ending March 31, 2020). For the first quarter of 2020, Aquesta had unaudited net income of $881,000 (16 cents per share) compared to first quarter of 2019 net income of $1,068,000 (22 cents per share).
Jim Engel, CEO & President of Aquesta said, “Aquesta has continued to perform well despite the unprecedented economic strain put on the global economy by the COVID-19 pandemic. We anticipate that as a result of this global pandemic, many of our customers will face economic uncertainty. Accordingly, we have been proactive is assisting our customers and community through our own initiatives and then became one of the leading community banks in participating in the Paycheck Protection Program (PPP).”
Through the PPP, Aquesta is funding almost $130 million of these government guaranteed loans. While not reflected in our first quarter numbers, our participation in the program began in mid-March with personnel reassignments and training as well as systems upgrades. This was accomplished with 85 percent of our employees working from their homes. Working through the night and on weekends, the Aquesta team filed almost 1,000 applications helping 11,000 families.
Continued Balance Sheet Growth
At March 31, 2020, Aquesta’s total assets were $525.9 million compared to $523.0 million at December 31, 2019. Total loans were $404.6 million at March 31, 2020 compared to $415.1 million at December 31, 2019. Core deposits were $346.0 million at March 31, 2020 compared to $373.6 million at December 31, 2019. Loan production during the quarter was strong, but a large number of normal loan payoffs (e.g., projects sold) hindered loan growth. Core deposit growth remains strong. The apparent decrease in core deposits in the 2020 first quarter relates to large cash deposits by a limited number of customers in the fourth quarter of 2019 that temporarily increased the 2019 year end balances, resulting in the quarter over quarter apparent decrease. These fluctuations are normal activity and have subsequently been replaced.
Strong Asset Quality
Asset quality remains strong. Nonperforming assets were at $8.8 million as of March 31, 2020 compared to $1.2 million as of December 31, 2019. The Company held $536 thousand of foreclosed real estate as of March 31, 2020 while there was no foreclosed real estate as of December 31, 2019. The increase in nonperforming assets is related to one large relationship where the bank’s position is well secured based on most recent appraisals of collateral. Reversal of accrued income on that relationship during the quarter negatively impacted earnings by about $44,000.
Net Interest Income
Net interest income was $3.9 million as of March 31, 2020 compared to $3.7 million as of March 31, 2019. This is an increase of $200 thousand or 5.3 percent. The increase in net interest income is associated with Aquesta’s loan growth during 2019 such that matched quarterly net interest income was higher in the current year.
Non Interest Income
Non interest income was $629 thousand as of March 31, 2020 compared to $776 thousand as of March 31, 2019. The decrease in noninterest income is related to a bank owned life insurance payment received in the first quarter of 2019 but not repeated in the first quarter of 2020.
Non Interest Expense
Non interest expense was $3.4 million for the three months ended March 31, 2020 compared to $3.2 million for the three months ended March 31, 2019. Personnel expense was at $2.1 million for the three months ended March 31, 2020 compared to $1.9 million for the three months ended March 31, 2019. The increase was primarily due to Aquesta’s continued growth, specifically the addition of the Rea Farms branch in third quarter of 2019.
Occupancy expense was $350 thousand for the three months ended March 31, 2020 compared to $338 thousand for the three months ending March 31, 2019. Again, this increase is related to the additional branch that opened in the third quarter of 2019.
Below are the following financial highlights for comparison:
| Aquesta Financial Holdings, Inc. | ||||
| Select Financial Highlights | ||||
| (Dollars in thousands, except per share data) | ||||
| 03/31/20 | 12/31/19 | |||
| (unaudited) | (audited) | |||
| Period End Balance Sheet Data: | ||||
| Loans | $ | 404,624 | $ | 415,071 |
| Allowance for loan and lease losses | 4,130 | 3,868 | ||
| Investment securities | 52,335 | 56,688 | ||
| Total assets | 525,857 | 523,010 | ||
| Core deposits | 346,025 | 373,557 | ||
| CDs and IRAs | 55,560 | 46,413 | ||
| Shareholders equity | 54,902 | 53,367 | ||
| Ending shares outstanding* | 5,473,585 | 5,450,585 | ||
| Book value per share* | 10.03 | 9.79 | ||
| Tangible book value per share* | 10.03 | 9.79 | ||
| *assumes conversion of Series A Convertible Perpetual Preferred Stock | ||||
| For the three months ended | ||||
| 03/31/20 | 03/31/19 | |||
| (unaudited) | (audited) | |||
| Income and Per Share Data: | ||||
| Interest income | $ | 5,676 | $ | 5,445 |
| Interest expense | 1,419 | 1,542 | ||
| Net interest income | 4,257 | 3,903 | ||
| Provision for loan losses | 325 | 170 | ||
| Net interest income after | ||||
| provision for loan losses | 3,932 | 3,733 | ||
| Non interest income | 629 | 776 | ||
| Non interest expense | 3,443 | 3,161 | ||
| Income before income taxes | 1,118 | 1,348 | ||
| Income tax expense | 237 | 280 | ||
| Net income | $ | 881 | $ | 1,068 |
| For the three months ended | ||||||
| 03/31/20 | 03/31/19 | |||||
| (unaudited) | (audited) | |||||
| Earnings per share - basic* | $ | 0.16 | $ | 0.22 | ||
| Earnings per share - diluted* | 0.15 | 0.20 | ||||
| Weighted average shares - basic* | 5,464,992 | 4,926,061 | ||||
| Weighted average shares - diluted* | 5,819,614 | 5,319,936 | ||||
| * assumes conversion of Series A Convertible Perpetual Preferred Stock | ||||||
| 03/31/20 | 12/31/19 | |||||
| (unaudited) | (audited) | |||||
| Select performance ratios: | ||||||
| Return on average assets | 0.67 | % | 0.89 | % | ||
| Return on average equity | 6.51 | % | 10.03 | % | ||
| Asset quality data: | ||||||
| 90 days or more and accruing | $ | 2,359 | $ | - | ||
| Non accrual loans | 5,856 | 1,192 | ||||
| Other real estate loans | 536 | - | ||||
| Total non performing assets | 8,751 | 1,192 | ||||
| Troubled debt restructurings | $ | 68 | $ | 84 | ||
| Non performing assets / total assets | 1.66 | % | 0.23 | % | ||
| Allowance for loan losses / total loans | 1.02 | % | 0.93 | % | ||
Aquesta Financial Holdings, Inc. is the holding company to its wholly owned subsidiary, Aquesta Bank. Aquesta Bank is a full-service community bank headquartered in Cornelius, North Carolina with eight branches in the Charlotte, Lake Norman and Wilmington, North Carolina areas and loan production offices in Raleigh, North Carolina, as well as Greenville and Charleston, South Carolina.
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.
Information in this press release may contain forward looking statements that might involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, and changes in interest rates.