2015 Annual Report. Our Newly Opened Bedford Branch.

Transcription

1 2015 Annual Report Our Newly Opened Bedford Branch.

2 Table of Contents Chief Executive Officer s Report... 3 Consolidated Balance Sheets... 4 Consolidated Statements of Income... 5 Board of s / Executive Officers... 6 Community Giving

3 Chief Executive Officer s Report Dear Fellow Shareholder, It is my sincere pleasure to share our results from 2015, which included record balances for Assets, Loans, Deposits and Net Income all of which are contributors to increasing shareholder value. For the 12 months ended December 31, 2015, Net Income increased 44.8% to a record $1,018,489. We have delivered three consecutive years of 40% plus growth in net income. Our ability to achieve significant growth in earning assets while also controlling our total overhead cost continues to drive improved income results. Total assets grew $12,603,687 (9.19%) to $149,755,417. Total loans grew $18,290,686 (15.24%) to $138,326,512. Total deposits grew $9,652,337 (7.76%) to $134,047,029. Our mortgage lending operation grew total loan originations $4,302,291 (29%) to $19,037,697. Even with the growth in all of our balance sheet categories we are happy to report significant growth in our capital ratios as well. Capital is a key mitigator of risk and we continue to be well above the regulatory minimums for a well capitalized bank. While we are very pleased with the growth in our loan portfolio, we are especially happy to report that our asset quality continues to be strong across the board. At year end 2015 we outperformed our peers both locally and nationally in many key asset quality metrics. While no one can predict future economic events we have a robust credit management process in place to continually monitor and measure the risk in our loan portfolio and to make changes as necessary. Our Bedford Branch located at 1387 American Way Court officially opened for business on May 16th! We are excited about the opportunity this represents to expand our presence and grow our market share in the $1.06 billion Bedford County deposit market. Select Bank is the only bank headquartered in Bedford County, and we are currently ranked #1 in Community Bank deposit market share for the Bedford area. We plan to leverage this opportunity to continue our growth in the very attractive Forest/Bedford market. In keeping with our commitment to offering the most advanced and secure banking environment for our customers, we have recently launched a new completely redesigned website. The new website offers our customers easier navigation, responsive design, the opportunity to initiate online account opening, powerful financial tracking tools and an overall better customer experience that is rich in content. We have expanded our ATM network by offering free withdrawals to our relationship customers for the use of any ATM throughout the country. During 2016, we will launch Card Valet, a card management and fraud mitigation tool that will enable cardholders to control when, where and how their Select Debit card is used through their smartphones. Customers will be able to monitor and control card transactions and receive interactive alerts through an app. Card Valet will deepen connections with our cardholders and increase the use of Select Bank debit cards, bringing them to the front of the wallet. Our retail online banking will rebrand by year-end and will offer customers enhanced online services that will reflect the level of personalized service we strive for each day. We ended first quarter 2016 with net income of $299,000, an increase of 15.9% over first quarter In the first quarter of all locally headquartered banks, we are proud to report your bank had the best return on assets, the lowest overhead rates efficiency ratio as well as highest assets per employee. These efficiencies are achieved through the quality of our outstanding employees and our commitment to technology and training, which results in greater productivity at a lower cost. The result of these efficiencies, coupled with our outstanding growth, is a continued enhancement of shareholder value. Enhancing shareholder value is one of the core goals in our strategic vision we call The Path. Over the course of 2015 we have welcomed several new shareholders and we have also had a number of existing shareholders add to their holdings. I greatly appreciate your trust and confidence in Select Bank and am excited about our success and how we are positioned for the future. It is truly an honor and a privilege to serve this great organization and the customers, shareholders and employees that make it what it is. As always, my door is open any time that you would like to meet with me or have questions. Over the course of the year, I make it a point to meet with many of you, face-to-face and always welcome the opportunity to update our shareholders on the bank s progress. Sincerely, Chief Executive Officer 3

4 Consolidated Balance Sheets Years Ended December 31, 2015 and 2014 ASSETS C ash and amounts due from banks $ 2,495,647 $ 7,602,044 Interest bearing deposits in other banks 1,356,590 1,367,565 Federal funds sold 15,003 5,000 T otal cash and cash equivalents 3,867,240 8,974,609 Investments: Securities available-for-sale at approximate market value 110, ,587 Loans 138,326, ,035,826 L ess allowance for loan losses (1,235,602) (1,216,872) N et loans 137,090, ,818,954 Bank premises, furniture and equipment, net Restricted equity securities Other real estate owned Deferred tax assets Cash surrender value of life insurance Accrued interest receivable and other assets 3,629, , , ,497 2,664, ,915 3,734, , ,896 1,269,750 2,596, ,533 T otal other assets 8,687,139 9,247,580 T otal assets $ 149,755,417 $ 137,151,730 LIABILITIES Deposits: I nterest bearing $ 122,234,308 $ 108,862,124 Non-interest bearing 11,812,721 15,532,568 T otal deposits 134,047, ,394,692 Subordinated debt Interest, taxes and other liabilities 1,820, , ,879 T otal liabilities 136,303, ,718,571 STOCKHOLDERS' EQUITY Common stock, $5.00 par value, 20,000,000 shares authorized, 1,501,216 shares issued and outstanding in 2015 and ,506,080 7,506,080 S urplus 8,016,935 8,016,935 R etained earnings (deficit) (2,071,351) (3,089,840) A ccumulated other comprehensive income (loss) 20 (16) T otal stockholders' equity 13,451,684 12,433,159 T otal liabilities and stockholders' equity $ 149,755,417 $ 137,151,730 4

5 Consolidated Statements of Income Years Ended December 31, 2015 and Interest income: Interest and fees on loans $ 6,168,481 $ 5,638,488 Interest on deposits in other banks 26,537 26,831 Federal funds sold 5 99 Investment securities - taxable Dividends on restricted equity securities 56,031 52,392 6,251,640 5,718,380 Interest expense: Interest on deposits Interest on borrowed funds 1,361,780 42,426 1,208,684 - Net interest income 4,847,434 4,509,696 Provision for loan losses 153, ,600 Net interest income after provision for loan losses 4,693,890 3,991,096 Other income: Service charges on deposit accounts 106, ,567 Other customer service fees 33,476 28,694 Mortgage brokerage fees 303, ,757 Gain (loss) on sale of other real estate owned 29,197 (35,199) Increase in cash surrender value of life insurance 67,861 67,404 Total other income 540, ,223 Total other expenses 3,741,721 3,363,541 Income before income taxes 1,492,316 1,036,778 Income tax expense 473, ,740 Net income $ 1,018,489 $ 703,038 5

6 Executive Officers / Community Giving Board of s Investing In Our Community We invest our time, resources and passion to support local community causes. As a community bank, we invest in the future of the community we serve. During 2015 we contributed to over 60 local charities and causes, including The Boys and Girls Club, Lynchburg Daily Bread, Relay for Life, The United Way, Jubilee Family Development Center, The Academy of Fine Arts, Central VA Community College Educational Foundation, The YMCA, The Fall Classic and The Goode Recreation Association, to name a few. Left: Lynchburg Beacon of Hope - Heidi Vande Hoef, future Center E.C. Glass High School, Laura Hamilton, Mike Thomas, and Joan Foster (Not pictured: Wayne L. Carpenter and T. Scott Garrett) Executive Officers Board of directors Chief Executive Officer Wayne L. Carpenter Vice Chairman C. Letcher Newcomb II Loan Investment Audit Loan Executive T. Clay Davis President Chief Financial Officer T. Clay Davis Executive Investment Asset Liability T. Scott Garrett, M.D. Audit Jennipher B. Lucado Loan Robert K. Pearson, Jr. Investment Audit Alan W. Pettigrew Loan Larry H. Redmond, M.D. Asset Liability Right: Fall Classic participants Nick Farrone, Alan Pettigrew and Joe Becht with Sherri Sackett, VP of Marketing. Daniel P. Thornton Chairman Loan Executive M. Ralph Wilkes Loan Executive Audit Bucky Falls Retires After 50 Years of Service in the Banking Industry. Pictured above: Left: Mike Thomas, CEO, Sandra Franklin and Denise Berry, Goode Recreation Association, and Clay Davis,President. Congratulations on your well deserved retirement! Middle: Mike Forren, SVP Commercial Lending, with customers Brent Lilly, Chris Mowry and Dr. Joshua Bailey. Left to right: Clay Davis, Bucky Falls and Mike Thomas. Right: Letcher Newcomb shows off his Select Bank support. 6 Mike Bradford, VP Institutional Advancement for CVCC, Mike Thomas, CEO, and Danny Thornton, Chairman, present the Select Bank in Memory of Peter P. Thornton Scholarship Recipients, Sommer Stephens and Jordan Nicholas their scholarship awards. 7

7 Executive Officers / Community Giving Board of s Investing In Our Community We invest our time, resources and passion to support local community causes. As a community bank, we invest in the future of the community we serve. During 2015 we contributed to over 60 local charities and causes, including The Boys and Girls Club, Lynchburg Daily Bread, Relay for Life, The United Way, Jubilee Family Development Center, The Academy of Fine Arts, Central VA Community College Educational Foundation, The YMCA, The Fall Classic and The Goode Recreation Association, to name a few. Left: Lynchburg Beacon of Hope - Heidi Vande Hoef, future Center E.C. Glass High School, Laura Hamilton, Mike Thomas, and Joan Foster (Not pictured: Wayne L. Carpenter and T. Scott Garrett) Executive Officers Board of directors Chief Executive Officer Wayne L. Carpenter Vice Chairman C. Letcher Newcomb II Loan Investment Audit Loan Executive T. Clay Davis President Chief Financial Officer T. Clay Davis Executive Investment Asset Liability T. Scott Garrett, M.D. Audit Jennipher B. Lucado Loan Robert K. Pearson, Jr. Investment Audit Alan W. Pettigrew Loan Larry H. Redmond, M.D. Asset Liability Right: Fall Classic participants Nick Farrone, Alan Pettigrew and Joe Becht with Sherri Sackett, VP of Marketing. Daniel P. Thornton Chairman Loan Executive M. Ralph Wilkes Loan Executive Audit Bucky Falls Retires After 50 Years of Service in the Banking Industry. Pictured above: Left: Mike Thomas, CEO, Sandra Franklin and Denise Berry, Goode Recreation Association, and Clay Davis,President. Congratulations on your well deserved retirement! Middle: Mike Forren, SVP Commercial Lending, with customers Brent Lilly, Chris Mowry and Dr. Joshua Bailey. Left to right: Clay Davis, Bucky Falls and Mike Thomas. Right: Letcher Newcomb shows off his Select Bank support. 6 Mike Bradford, VP Institutional Advancement for CVCC, Mike Thomas, CEO, and Danny Thornton, Chairman, present the Select Bank in Memory of Peter P. Thornton Scholarship Recipients, Sommer Stephens and Jordan Nicholas their scholarship awards. 7

8 Select Bank is the only bank headquartered in Bedford County and we are currently ranked #1 in Community Bank deposit market share for the Bedford area. We plan to leverage this opportunity to continue our growth in the very attractive Forest/Bedford market. -, CEO Shareholder Relations Contact: Sherri A. Sackett