Highlands Bankshares, Inc (HBKA) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $0.16 million, or $ 0.02 a share in the quarter, against a net loss of $0.81 million, or $0.08 a share in the last year period. Revenue during the quarter surged 34.63 percent to $6.15 million from $4.57 million in the previous year period. Net interest income for the quarter rose 11.59 percent over the prior year period to $4.84 million. Non-interest income for the quarter rose 34.70 percent over the last year period to $1.35 million.
Highlands Bankshares has made provision of $0.04 million for loan losses during the quarter, down 94.82 percent from $0.77 million in the same period last year.
Net interest margin improved 42 basis points to 3.66 percent in the quarter from 3.24 percent in the last year period. Efficiency ratio for the quarter improved to 97.34 percent from 109.23 percent in the previous year period. A decline in efficiency ratio indicates a rise in profitability.
"Fourth quarter included a number of major accomplishments completing a year of transition for Highlands. This groundwork positions Highlands very well for 2017 and into the future," said Timothy K. Schools, President and Chief Executive Officer. "At the outset of last year, Highlands' new management team set out to restore the company's net income and profitability which had been hampered by poor credit quality and excessive expenses since prior to the recession. Throughout 2016, management: 1. proactively improved elevated credit metrics to industry levels and instilled a strong credit culture, 2. thoughtfully lowered staffing levels closer to industry levels, and 3. diligently reviewed the services the company was procurring for opportunities to eliminate or reduce expenses. In many cases, these actions came with a cost. I feel very fortunate and am impressed that Highlands' employees were able to remedy material risk management deficiencies and reset the future earnings power of the company, overcome the associated costs to do so, and still increase each of the three regulatory capital ratios."
Assets, liabilities fall
Total assets stood at $612.68 million as on Dec. 31, 2016, down 0.70 percent compared with $616.98 million on Dec. 31, 2015. On the other hand, total liabilities stood at $558.92 million as on Dec. 31, 2016, down 0.80 percent from $563.42 million on Dec. 31, 2015.
Deposits outpace loan growth
Net loans stood at $404.84 million as on Dec. 31, 2016, down 5.06 percent compared with $426.43 million on Dec. 31, 2015. Deposits stood at $489.87 million as on Dec. 31, 2016, down 1.02 percent compared with $494.91 million on Dec. 31, 2015. Noninterest-bearing deposit liabilities were $134.49 million or 27.45 percent of total deposits on Dec. 31, 2016, compared with $129.63 million or 26.19 percent of total deposits on Dec. 31, 2015.
Investments stood at $101.71 million as on Dec. 31, 2016, up 17.65 percent or $15.26 million from year-ago. Shareholders equity stood at $53.76 million as on Dec. 31, 2016, up 0.37 percent or $0.20 million from year-ago.
Return on average assets was at 0.10 percent in the quarter against a negative 0.52 percent in the last year period. Return on average equity was at 1.14 percent in the quarter against a negative 5.95 percent in the last year period.
Nonperforming assets moved down 55.42 percent or $8.41 million to $6.77 million on Dec. 31, 2016 from $15.18 million on Dec. 31, 2015.
Book value per share was $5.71 for the quarter, down 3.87 percent or $0.23 compared to $5.94 for the same period last year.
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