DACOTAH BANKS, INC. THIRD QUARTER REPORT

Transcription

1 DACOTAH BANKS, INC. THIRD QUARTER REPORT SEPTEMBER 30, 2017

2 FINANCIAL HIGHLIGHTS (Dollar and share amounts in thousands, except per share data) Nine months ended September % change PERFORMANCE Net interest income... $66,262 62, % Provision for loan and lease losses... 4,200 2, Non-interest income... 13,536 12, Non-interest expenses... 49,173 47, Net income... 16,946 16, Per share Cash dividends declared... 4,794 4, Per share Net interest margin % 4.01% 0.7 Return on average assets (5.0) Return on average equity (2.9) AT SEPTEMBER 30 Total assets... $2,404,148 2,280, % Investment securities and deposits with banks , ,159 (9.4) Loans, net... 1,965,045 1,819, Deposits... 2,011,121 1,909, Overnight borrowings... 55,500 47, Long term borrowings... 38,000 44,000 (13.6) Stockholders equity , , Book value per share Shares of common stock outstanding... 11,169 11, Tier I leverage % 10.97% 1.7 Tier I capital % 12.29% 0.8 Total capital % 13.54% 0.7

3 CONSOLIDATED STATEMENTS OF INCOME (Dollar and share amounts in thousands, except per share data) Three months ended Nine months ended September 30 September INTEREST INCOME Loans... $24,325 22,176 69,919 64,811 Securities: Taxable ,668 2,760 Exempt from federal income taxes Deposits in banks Federal funds sold ,542 23,381 73,640 68,624 INTEREST EXPENSE Deposits... 2,369 1,794 6,306 5,153 Borrowings , ,832 2,120 7,378 5,959 NET INTEREST INCOME... 22,710 21,261 66,262 62,665 PROVISION FOR LOAN AND LEASE LOSSES... 1, ,200 2,400 NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES... 21,210 20,361 62,062 60,265 NON-INTEREST INCOME Income from fiduciary activities ,914 1,679 Service charges on deposit accounts ,487 2,720 Insurance commissions... 1,268 1,218 3,403 3,236 Fees on sale of residential mortgages Servicing fees on residential mortgages Other income... 1,676 1,433 4,661 4,154 4,926 4,502 13,536 12,726 NON-INTEREST EXPENSES Salaries and employee benefits... 10,841 10,421 33,188 31,756 Occupancy, net... 1,183 1,152 3,525 3,448 Furniture and equipment ,529 1,561 FDIC assessment ,082 Other expenses... 3,462 3,403 10,379 9,798 16,197 15,910 49,173 47,645 INCOME BEFORE INCOME TAXES... 9,939 8,953 26,425 25,346 Applicable income taxes: Current... 4,296 3,464 11,429 9,592 Deferred (credit)... (716) (227) (1,950) (462)... 3,580 3,237 9,479 9,130 NET INCOME... $ 6,359 5,716 16,946 16,216 PER SHARE OF COMMON STOCK Net income - basic... $ Cash dividends declared

4 CONSOLIDATED STATEMENTS OF CONDITION (Dollars in thousands) September 30 December 31 September ASSETS Cash and due from banks... $ 36,364 49,877 38,082 Interest-bearing deposits in banks ,000 - Time deposits in banks... 10,438 9,438 9,685 Securities: Taxable , , ,894 Tax exempt... 59,551 61,565 61,265 Total securities , , ,159 Loans held for sale Loans... 1,994,651 1,837,677 1,845,024 Allowance for loan and lease losses... (30,381) (26,165) (26,633) Net loans... 1,964,270 1,811,512 1,818,391 Interest receivable... 26,275 22,503 24,730 Premises and equipment, net... 47,259 45,185 45,619 Foreclosed assets ,290 1,640 Investment in life insurance contracts... 42,754 41,828 41,332 Deferred income tax asset... 13,075 13,648 12,129 Goodwill... 6,415 6,415 6,415 Intangible assets... 1,264 1,499 1,620 Mortgage servicing rights Other assets... 3,531 3,869 3,874 Total assets... $ 2,404,148 2,297,173 2,280,464 LIABILITIES AND STOCKHOLDERS EQUITY Deposits: Noninterest-bearing... $ 494, , ,732 Interest-bearing... 1,516,657 1,446,306 1,405,306 Total deposits... 2,011,121 1,974,415 1,909,038 Borrowings... 93,500 38,000 91,000 Interest payable... 3,438 3,003 3,111 Accrued expenses and other liabilities... 22,012 21,730 21,432 Total liabilities... 2,130,071 2,037,148 2,024,581 Stockholders equity: Common stock, $4 par value; 30,000,000 shares authorized, 14,285,980 shares issued and outstanding... 57,144 57,144 57,144 Capital surplus... 14,686 13,851 13,630 Retained earnings , , ,547 Unrealized gain (loss) on securities available for sale, net... (141) (1,190) 1,677 Treasury stock, 3,116,884 shares at September 30, 2017, 3,149,075 shares at December 31, 2016, and 3,159,480 shares at September 30, 2016, at cost... (16,064) (16,081) (16,115) Total stockholders equity , , ,883 Total liabilities and stockholders equity... $ 2,404,148 2,297,173 2,280,464

5 CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Nine months ended September Operating Activities: Net income... $ 16,946 16,216 Adjustments to reconcile net income to net cash flows from operating activities: Provision for loan and lease losses... 4,200 2,400 Depreciation and amortization... 3,517 4,803 Benefit from deferred income taxes... (1,950) (462) Increase in investment in life insurance contracts... (926) (4,409) (Increase) decrease in loans held for sale... (269) 305 Increase in interest receivable... (3,772) (3,778) Decrease (increase) other assets, net... 2,221 (1,818) Increase in interest payable Increase in other accrued expenses and liabilities, net ,492 Net cash from operating activities... 20,684 15,408 Investing Activities: Proceeds from maturities and calls of securities available for sale, interest-bearing deposits with banks and federal funds sold... 62,767 95,690 Purchases of securities available for sale and interest-bearing deposits with banks... (34,042) (78,987) Net increase in loans... (156,958) (99,869) Purchases of premises and equipment... (4,865) (2,221) Sale (purchase) of foreclosed assets, net (592) Net cash used by investing activities... (132,462) (85,979) Financing Activities: Decrease in noninterest-bearing deposits, net... (33,645) (38,160) Increase (decrease) in interest-bearing deposits, net... 31,957 (18,099) Increase in certificates of deposit, net... 38,394 38,407 Increase in overnight borrowings, net ,000 Advances of borrowings... 55,500 - Sale of treasury stock, net ,199 Dividends paid to stockholders... (4,794) (4,441) Net cash from financing activities... 88,265 25,906 Net change in cash and cash equivalents... (23,513) (44,665) Cash and cash equivalents, beginning of year... 59,877 82,747 Cash and cash equivalents, end of year... $ 36,364 38,082 CONSOLIDATED STATEMENTS OF CHANGES IN THE ALLOWANCE FOR LOAN AND LEASE LOSSES Balance, January 1... $ 26,165 26,667 Provision for loan and lease losses... 4,200 2,400 Recoveries Loans charged off... (889) (2,681) Balance, September $ 30,381 26,633 As a % of loans % 1.44%

6 DIRECTORS RICHARD L. WESTRA Chairman of the Board JOSEPH A. SENGER President and Chief Executive Officer RODNEY W. FOUBERG Retired Chairman ARTHUR R. RUSSO President E.C. Rhodes Properties, Inc. and E.C Rhodes Insurance, Inc. WILLIAM S. LAMONT Planning Consultant Lamont Associates KENT E. EDSON Retired President and Chief Financial Officer BRADFORD J. WHEELER President Wheeler Manufacturing, Inc. Lemmon, SD CATHERINE O. DUTENHOFFER Co-owner Evolution Powersports Watertown, SD ELIZABETH A. LEWIS Attorney Woods, Fuller, Shultz & Smith P.C. Sioux Falls, SD LORI LAMONT LANGE Independent Travel Director St. Cloud, MN Corporate Secretary ROBERT J. FOUBERG Executive Vice President AFFILIATED DACOTAH BANKS MID-DAKOTA REGION BRADLEY D. MOORE, Regional President ABERDEEN, CRESBARD, FAULKTON KIP J. HANSEN, Market President LEMMON, BISON, HETTINGER, REGENT TRAVIS J. ELLISON, Market President MOBRIDGE DARRELL D. SCHLEPP, Market President SISSETON, NEW EFFINGTON KEVIN B. WEGEHAUPT, Market President WEBSTER, ROSLYN DANIEL N. MENKING, Market President NORTHERN REGION DANIEL R. VOLLMER, Regional President DICKINSON JEFF C. MOORE, Market President JAMESTOWN CASEY L. HENDERSON, Market President MINOT, BOWBELLS RYAN J. HERTZ, Market President ROLLA, BELCOURT KELLY J. BURSINGER, Market President VALLEY CITY DICK A. GULMON, Market President SOUTHERN REGION DAVID W. BANGASSER, Regional President BROOKINGS STEVEN J. CARNES, Market President CLARK, HENRY, WILLOW LAKE THOMAS R. LABRIE, Market President MORRIS, CHOKIO LARRY D. RINGGENBERG, Market President RAPID CITY, CUSTER RANDY L. SILVER, Market President SIOUX FALLS MATTHEW J. SMITH, Market President WATERTOWN TROY J. ZEBROSKI, Market President

7 DACOTAH TERRITORY DACOTAH BANKS, INC. P. O. BOX 1496 ABERDEEN, SOUTH DAKOTA