Aquesta Financial Holdings, Inc Reports First Quarter 2021 Operating Results


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CORNELIUS, North Carolina, April 7, 2021 (GLOBE NEWSWIRE) – Aquesta Financial Holdings, Inc and subsidiaries (“Aquesta”) (OTC market symbol AQFH) – including its subsidiary Aquesta Bank today announced net income for the first quarter of 2021 (three monthly periods ending March 31, 2021). For the first quarter of 2021, Aquesta had unaudited net income of $ 2.5 million (46 cents per share) compared to the first quarter of 2020 net income of $ 881 thousand (16 cents per share). Thus, profits increased by 186.5% in the first quarter of 2021 compared to the first quarter of 2020.

Jim Engel, CEO and President of Aquesta, said: “I am pleased to report another quarter of excellent earnings and balance sheet growth at Aquesta. As we did in 2020, we are kicking off 2021 with a focus on helping our customers and communities as the COVID-19 pandemic continues to negatively impact the global economy. Our service is exemplified by Aquesta, which is once again actively participating in the Paycheck Protection Program (“PPP”). Aquesta funded 461 PPP loans totaling $ 68.5 million in the first quarter of 2021, which is in addition to 1053 PPP loans totaling $ 146.6 million funded in 2020. We are delighted with this opportunity to serve and look forward to continue to provide superior service and value to our customers, communities and shareholders. “

Highlights

  • Total loan growth of $ 22.1 million for the three months ended March 31, 2021 or 3.99 percent (16.0 percent annualized). The growth in loans was mainly due to PPP loans, as Aquesta focused its resources on helping our communities. The increase in the total loan portfolio size associated with these PPP loans is expected to be temporary and will decrease as the PPP loans are canceled and / or repaid. However, the gross production of non-PPP organic loans for the first quarter of 2021 was $ 25.6 million. This non-PPP production was offset by non-PPP gains totaling approximately $ 20.8 million.
  • Total growth in core deposits of $ 91.5 million for the three months ended March 31, 2021 or 18.5 percent (74.0 percent annualized). The growth of base fields is due to fields linked to PPP as well as to organic growth.
  • No deferred loans as of March 31, 2021.
  • Earnings growth for the quarter ended March 31, 2021 compared to the quarter ended March 31, 2020 of $ 1.6 million or 186.5%.

Strong balance sheet growthAs of March 31, 2021, Aquesta’s total assets were $ 752.3 million, compared to $ 680.2 million as of December 31, 2020. Total loans were $ 576.4 million as at March 31, 2021 compared to $ 554.3 million as at December 31, 2020. Loan growth in the first quarter of 2021 was mainly driven by PPP loans, which totaled $ 68.5 million as at March 31, 2021. Base deposits amounted to $ 585.8 million as of March 31, 2021 compared to $ 494.3 million as of December 31, 2020.

Asset qualityNon-performing assets stood at $ 5.7 million as at March 31, 2021, compared to $ 6.1 million as at December 31, 2020. Aquesta had $ 5.3 million in non-accrual loans as at March 31 2021 compared to $ 5.7 million as at December 31, 2020. Aquesta held other real estate (ie “OREO” or foreclosed property) of $ 381,000 as at March 31, 2021 and December 31, 2020.

Net interest incomeNet interest income was $ 6.1 million for the quarter ended March 31, 2021, compared to $ 4.3 million for the quarter ended March 31, 2020. This is a increase of $ 1.9 million or 44.4%. The increase in net interest income is associated with an increased reliance on low-cost core deposits to replace higher-cost funding. Additionally, Aquesta was able to increase $ 1.3 million in PPP fees in interest income for PPP loans that were held, canceled or repaid during the first quarter of 2021.

Allowance for loan lossesThe allowance for loan losses was $ 207,000 for the quarter ended March 31, 2021 compared to $ 325,000 for the quarter ended March 31, 2020. The ALLL / total loans ratio is 0.92% as at March 31, 2021 . ALLL’s ratio on total loans, excluding PPP loans, is 1.20% as at March 31, 2021. ALLL’s ratio on total loans, excluding PPP loans and balances guaranteed by the SBA, is 1.47% as of March 31, 2021.

Non-interest incomeNon-interest income was $ 1.3 million for the quarter ended March 31, 2021, compared to $ 629 thousand for the quarter ended March 31, 2020. This is an increase of $ 664 thousand or 105.6 percent. The increase is largely attributable to SBA loan sales revenues which totaled $ 690K and $ 165K as at March 31, 2021 and March 31, 2020, respectively. This is an increase of $ 525,000 or 318.1 percent.

Non-interest chargesNon-interest expense amounted to $ 3.9 million for the quarter ended March 31, 2021 compared to $ 3.4 million for the quarter ended March 31, 2020. Personnel costs amounted to $ 2.3 million as at March 31, 2021 compared to $ 2.1 million as at March 31. 2020.

Occupancy costs increased by $ 55,000 for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The increase is due to the addition of Mt. Pleasant, South Carolina branch in January 2021. While the lease began in January 2021, Mt. The Pleasant branch is not scheduled to open until summer 2021.

Here are the financial highlights for comparison:

Aquesta Financial Holdings, Inc.
Select financial highlights
(Dollars in thousands, except per share data)
03/31/21 12/31/20
(unaudited) (checked)
End of period balance sheet data:
Loans $ 576,405 $ 554,295
Provision for losses on loans and rentals 5,290 5,319
Investment security 68 768 52,535
Total assets 752 284 680 168
Core deposits 585,803 494,345
CD and IRA 50 653 63 623
Equity 60 281 58,549
Final shares outstanding * 5,504,165 5,473,205
Book value per share * 10.95 10.70
Tangible book value per share * 10.95 10.69
* assumes conversion of Series A convertible perpetual preferred shares
For the three months ended
03/31/21 03/31/20
(unaudited) (checked)
Income and data per share:
Interest income $ 6,944 $ 5 676
Interest expense 795 1,419
Net interest income 6,149 4,257
Allowance for loan losses 207 325
Net interest income after
allowance for loan losses 5,942 3 932
Non-interest income 1,293 629
Non-interest expenses 3 947 3,443
Income before taxes 3,288 1,118
Income tax expense 764 237
Net revenue 2,524 881
For the three months ended
03/31/21 03/31/20
(unaudited) (checked)
Earnings per share – basic * $ 0.46 $ 0.16
Earnings per share – diluted * 0.43 0.15
Weighted Average Equities – Basic * 5,493,458 5,464,992
Weighted average equities – diluted * 5 839 531 5 819 614
* assumes conversion of Series A convertible perpetual preferred shares
03/31/21 12/31/20
(unaudited) (checked)
Select the performance ratios:
Return on average assets 1.41 % 0.87 %
Return on average equity 16.99 % 9.41 %
Data on asset quality:
90 days or more and accumulating $ $ 40
Loans without accrual accounting 5,270 5 655
Other real estate held 381 381
Total non-performing assets 5 651 6,076
Troubled debt restructuring $ 52 $ 54
Non-performing assets / total assets 0.75 % 0.89 %
Allowance for loan losses / total loans 0.92 % 0.96 %

Aquesta Financial Holdings, Inc. is the holding company of 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. North Carolina, as well as Greenville and Charleston, South Carolina.

For more information, please contact Kristin Couch (Executive Vice President and Chief Financial Officer) at 704-439-4343 or visit us online at www.aquesta.com.

The information contained in this press release may contain forward-looking statements that could involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, the effects of future economic conditions, government fiscal and monetary policies, legislative and regulatory changes and changes in interest rates.

Source: Aquesta Bank


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