Commerce Union Bancshares, Inc. (Nasdaq: CUBN), parent of Reliant Bank, today reported record net income and loans for its second quarter ended June 30, 2016. Second quarter net income attributable to common shareholders rose 47.3% to $2.4 million, or $0.31 per fully diluted share, from $1.6 million, or $0.22 per fully diluted share for the second quarter 2015. Loans rose 13.1% to a record $649.3 million at June 30, 2016, compared with $574.0 million at June 30, 2015.

"Our second quarter results reflect the progress we've made in growing loans, expanding our net interest income and enhancing our asset quality since we completed the merger of Reliant Bank and Commerce Union Bank last year," stated William R. DeBerry, Chairman and CEO of the Company. "This is the first quarter that our results are directly comparable to the prior year quarter following the merger and highlight our solid growth in assets and earnings since that time."

Second Quarter Revenue Growth

Total interest income rose 6.5% to a record $9.5 million in the second quarter of 2016 compared with $8.9 million in the first quarter of 2016, and up 16.7% compared with $8.1 million in the second quarter of 2015. The growth in interest income over the prior year was fueled by a combination of higher yields on loans and securities available for sale, and strong growth in earning assets. Interest income was also positively impacted from $619,000 in income related to the payoff of a purchase credit impaired loan.

Noninterest income declined to $2.5 million in the second quarter of 2016 compared with $3.8 million in the first quarter of 2016 and $3.3 million in the second quarter of 2015. The decrease in noninterest income was due primarily to lower sales of mortgage loans resulting from the transition of the majority of out-of-state mortgage offices to another bank early in the second quarter of 2016.

"We completed the transition of a majority of our out-of-market mortgage offices to better focus our resources in our core Middle Tennessee markets while reducing non-core personnel and related office costs to improve our efficiency ratio," stated DeVan Ard, President of the Company and CEO of Reliant Bank. "We did not record a gain or loss on the transition of the mortgage offices, but the net effect was a decrease in mortgage loans sold and mortgage loans held for sale. This was partially offset by lower associated salary and occupancy expenses compared with prior quarters and we believe we have further opportunities to improve the profitability of our mortgage operations and efficiency ratio in the future."

Net Interest Income and Margins Increase

Net interest income was a record $8.7 million in the second quarter of 2016, up 7.5% from $8.1 million in the first quarter of 2016 and up 17.6% compared with $7.4 million in the second quarter of 2015. The increase in net interest income over the prior year was driven by growth in earning assets and a higher net interest margin. In addition, the second quarter of 2016 benefited from the pay-off of a purchased credit impaired loan. The second quarter of 2016, first quarter of 2016 and second quarter of 2015 also benefited from net discount accretion of $442,000 per quarter associated with the merger of Commerce Union Bank and Reliant Bank. Net interest margin rose 25 basis points to 4.33% in the second quarter of 2016 compared with 4.08% in the first quarter of 2016 and was up 27 basis points compared to 4.06% in the second quarter of 2015.

Provision for Loan Losses - Asset Quality Improves

Provision for loan losses was $450,000 for the second quarter of 2016 compared with a negative provision of $500,000 for the second quarter of 2015. The increase in the provision since last year reflects loan growth that accelerated in the second quarter of 2016. Provision for the first quarter of 2016 was $165,000 and benefited from a net recovery position.

Asset quality improved from prior quarters based on reductions in other real estate owned and a decrease in non-performing assets.

"Our asset quality is at its best level since the recession," continued Ard. "Our allowance for loan losses remained strong at 1.34% of gross loans at the end of the second quarter. Non-performing assets were only 0.71% of total loans and other real estate, and were down 11.5% since the second quarter of last year. Other real estate owned was down 56.6% to $475,000 at June 30, 2016, and was at the lowest level in years. In addition, we had no accruing loans past due 90 days or more at the end of the second quarter of 2016. We believe this is a solid indication of our strong credit culture and focus on asset quality as part of our strategy to protect future earnings. We remain focused on maintaining the high quality of our assets as we grow our loan portfolio."

Noninterest Expenses Decline

Noninterest expenses declined 7.1% to $8.0 million in the second quarter of 2016 compared with $8.6 million in the first quarter of 2016 and declined 7.8% compared with $8.7 million in the second quarter of 2015. The Company reported lower advertising and public relations expenses; audit, legal and consulting expenses; provision for losses on other real estate and lower other operating expenses compared with the second quarter of 2015. The Bank's efficiency ratio, excluding its mortgage subsidiary, improved to 58.58% in the second quarter of 2016 from 58.99% in the first quarter of 2016 and from 67.03% in the second quarter of 2015. The decrease in noninterest expense also benefited from lower expenses associated with the transitioning of several out-of-market mortgage offices to another bank.

The Bank's effective income tax rate for the second quarter of 2016 was 21.6% compared with 18.2% for the first quarter of 2016 and down from 36.5% in the second quarter of 2015. The tax rate for the first two quarters of 2016 was favorably impacted by a credit to income tax expense arising from the early adoption of ASC Topic 718 relating to recognition of excess tax benefits on the exercise of stock options that totaled $100,000 in the second quarter of 2016 and $324,000 in the first quarter of 2016. The tax rate for the second quarter of 2016 also benefited from a state tax credit of $217,000 related to the origination of an interest-free loan to a local housing authority.

Balance Sheet Growth

Loans rose to a record $649.3 million at June 30, 2016, compared with $622.7 million at March 31, 2016, and $574.0 million at June 30, 2015. Loan growth accelerated in the second quarter of 2016 and is highlighted by total loan growth of 4.3% over the first quarter of 2016. Average loans rose 13.1% to $637.8 million in the second quarter compared with $564.1 million at June 30, 2015.

The Bank's average earnings assets grew 11.3% to $830.5 million in the second quarter of 2016 compared with $745.9 million at June 30, 2015. The growth in earning assets benefited from a 13.1% increase in loans and a 31.8% increase in securities available for sale compared with the second quarter of last year. Securities available for sale totaled $147.7 million at June 30, 2016, compared with $139.9 million at March 31, 2016, and $112.0 million at June 30, 2015.

Mortgage loans held for sale declined to $15.0 million at June 30, 2016, compared with $24.7 million at March 31, 2016, and $41.7 million at June 30, 2015. The decline in mortgage loans in the latest quarter was due to the transition of the majority of the Bank's out-of-market mortgage loan production offices to another bank early in the second quarter of 2016.

Total deposits were $647.9 million at June 30, 2016, compared with $657.8 million at March 31, 2016. The decrease in deposits was primarily related to lower funding requirements for mortgage loans held for sale. Total deposits increased 7.5% to $647.9 million at June 30, 2016, compared with June 30, 2015. The loan to deposit ratio was 100.2% at June 30, 2016, compared with 94.7% at March 31, 2016, and 95.3% at June 30, 2015.

"Non-interest bearing deposits rose 62.4% (% annualized) in the second quarter of 2016 due to increased marketing emphasis on demand deposit accounts and strong new account openings. Non-interest bearing deposits grew to 20.8% of total deposits at the end of the second quarter and have grown by 38.0% since the second quarter of 2015. We expect our growth in non-interest bearing deposits to have a positive effect on our net interest margin as rates begin to rise," concluded Ard.

Stockholders' equity rose to $106.0 million at the end of the second quarter 2016. Tangible book value per share grew to $12.17 at June 30, 2016.

Strong Capital Position

The Company's and Bank's capital position remained strong at June 30, 2016. During the second quarter, the Company raised $656,000 of capital through the exercise of Company stock options. The additional capital was pushed down to the Bank and when combined with the accretion of earnings to capital led to an increase in the Bank's June 30, 2016, Tier 1 leverage ratio to 10.59% compared with 10.34% at March 31, 2016. The Bank's capital ratios are expected to be maintained significantly above the ratios of a "well-capitalized" institution.

"Our outlook for the second half of 2016 is positive based on our accelerating loan growth, the robust economy in middle Tennessee and our plans to open a new office in a fast growing market in Nashville later this year. We also remain focused on maintaining our asset quality as we grow our asset base. We believe our focus on growing quality assets will be an important part in building future long-term shareholder value," concluded DeBerry.

Accounting Treatment for Merger and Mortgage Subsidiary

The second quarter's results for 2016 and 2015 are for Commerce Union Bancshares, Inc. (Company) and include the combined results of Reliant Bank and Commerce Union Bank following their merger that was effective April 1, 2015. The results for the six month period ended June 30, 2015, include the operations of Reliant Bank only for the first quarter 2015 and the combined results of Reliant Bank and Commerce Union Bancshares, Inc. for the second quarter 2015.

The consolidated balance sheets and statements of operations include the operation of the Bank's majority-controlled subsidiary, Reliant Mortgage Ventures, LLC. For financial accounting purposes the subsidiary is treated as a variable interest entity for which the Bank is deemed to be the primary beneficiary. The venture is operated under a joint venture arrangement. The Bank receives 30% of the net income from the subsidiary once the noncontrolling member has recovered any previous losses incurred by the venture. The Bank does not absorb any losses incurred by the venture. Revenue and expenses related to the subsidiary are included in noninterest income and expenses of the Bank and the noncontrolling portion of the net income or loss of the subsidiary is reflected in the "noncontrolling interest in net (income) loss of the subsidiary" on the Consolidated Statements of Operations. For the second quarter of 2016, the mortgage subsidiary generated a net loss of $223,000 compared with a net loss of $32,000 for the second quarter of 2015. For the six months ending June 30, 2016, the subsidiary generated a net income of $98,000 compared with a net loss of $103,000 for the six months ending June 30, 2015.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures. The non-GAAP measures presented below include "adjusted net interest margin" and "efficiency ratio." We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe certain purchase accounting adjustments and non-recurring income relating to the payoff of an impaired loan do not reflect the operational performance of the business in this period and, accordingly, it is useful to consider these line items with and without such adjustments. We believe this presentation also increases comparability of period-to-period results.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP.

About Commerce Union Bancshares, Inc. and Reliant Bank

Commerce Union Bancshares, Inc. (NASDAQ: CUBN) is a Brentwood, Tennessee-based bank holding company which operates banking centers in Davidson, Robertson, Rutherford, Sumner and Williamson Counties, Tennessee through its wholly-owned subsidiary Reliant Bank. Reliant Bank is a full-service commercial bank that offers a variety of deposit, lending and mortgage products and services to business and consumer customers. For additional information, locations and hours of operation, please visit our website found at www.reliantbank.com.

Forward-Looking Statements

Statements in this press release relating to Commerce Union Bancshares Inc.'s plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "may," "should," "anticipate," "estimate," "expect," "intend," "objective," "possible," "seek," "plan," "strive" or similar words, or negatives of these words, identify forward-looking statements. These forward-looking statements are based on management's current expectations. The Company's actual results in future periods may differ materially from those indicated by forward-looking statements due to various risks and uncertainties, including those related to the combination of Commerce Union Bank and Reliant Bank following the merger. These and other risks and uncertainties are described in greater detail under "Risk Factors" in the Company's 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of the release and the Company does not assume any responsibility to update these statements.
           
COMMERCE UNION BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2016, MARCH 31, 2016 AND JUNE 30, 2015

(Dollar Amounts In Thousands)

(Unaudited)
 
 

ASSETS
June 30,

2016

March 31,

2016
June 30,

2015
 
Cash and due from banks $ 16,571 $ 26,107 $ 21,638
Federal funds sold   69     434     326  
Total cash and cash equivalents 16,640 26,541 21,964
Securities available for sale 147,675 139,899 112,039
Loans, net of unearned income 649,277 622,733 574,046
Allowance for loan losses   (8,688 )   (8,090 )   (7,424 )
Loans, net 640,589 614,643 566,622
Mortgage loans held for sale 14,961 24,682 41,715
Accrued interest receivable 3,179 3,035 2,670
Premises and equipment, net 9,088 9,213 8,973
Restricted equity securities, at cost 7,060 6,244 5,326
Other real estate, net 475 1,139 1,094
Cash surrender value of life insurance contracts 24,439 24,247 19,752
Deferred tax assets, net 1,708 2,274 2,411
Goodwill 11,404 11,404 11,404
Core deposit intangibles 1,760 1,849 2,117
Other assets   4,226     3,375     2,843  
 
TOTAL ASSETS $ 883,204   $ 868,545   $ 798,930  
 

LIABILITIES AND STOCKHOLDERS' EQUITY
 
LIABILITIES
Deposits
Demand $ 134,515 $ 116,362 $ 97,489
Interest-bearing demand 86,090 90,622 103,692
Savings and money market deposit accounts 186,009 199,988 171,138
Time   241,237     250,805     230,184  
Total deposits 647,851 657,777 602,503
Accrued interest payable 127 139 112
Federal Home Loan Bank advances 124,871 104,798 102,854
Other liabilities   4,331     3,809     1,608  
 
TOTAL LIABILITIES   777,180     766,523     707,077  
 
STOCKHOLDERS' EQUITY

Common stock, $1 par value; 10,000,000 shares authorized; 7,627,777, 7,560,594 and 7,070,821 shares issued and outstanding at June 30, 2016, March 31, 2016 and June 30, 2015, respectively
7,628 7,561 7,071
Additional paid-in capital 87,736 87,098 82,952
Retained earnings 9,584 7,224 3,115
Accumulated other comprehensive income (loss)   1,076     139     (1,285 )
 
TOTAL STOCKHOLDERS' EQUITY   106,024     102,022     91,853  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 883,204   $ 868,545   $ 798,930  
 

       
COMMERCE UNION BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS INDICATED

(Dollar Amounts In Thousands, Except Per Share Amounts)

(Unaudited)
 
Three Months Ended Six Months Ended
June 30,     March 31,     June 30, June 30,     June 30,
2016 2016 2015 2016 2015
INTEREST INCOME
Interest and fees on loans $ 8,698 $ 8,138 $ 7,551 $ 16,836 $ 11,587
Interest on investment securities, taxable 216 236 218 452 421
Interest on investment securities, nontaxable 490 438 299 928 481
Federal funds sold and other   93   102     67     195     119  
 
TOTAL INTEREST INCOME   9,497   8,914     8,135     18,411     12,608  
 
INTEREST EXPENSE
Deposits
Demand 47 44 57 91 79
Savings and money market deposit accounts 163 166 124 329 189
Time 407 423 393 830 617
Federal Home Loan Bank advances and other   188   199     169     387     262  
 
TOTAL INTEREST EXPENSE   805   832     743     1,637     1,147  
 
NET INTEREST INCOME 8,692 8,082 7,392 16,774 11,461
 
PROVISION FOR LOAN LOSSES   450   165     (500 )   615     (500 )
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   8,242   7,917     7,892     16,159     11,961  
 
NONINTEREST INCOME
Service charges on deposit accounts 321 285 341 606 488
Gains on mortgage loans sold, net 1,782 3,342 2,756 5,124 4,533
Gain (loss) on securities transactions, net 60 - - 60 (396 )
Gain on sale of other real estate 156 - - 156 -
Other   191   219     187     410     293  
 
TOTAL NONINTEREST INCOME   2,510   3,846     3,284     6,356     4,918  
 
NONINTEREST EXPENSE
Salaries and employee benefits 4,883 5,394 5,075 10,277 7,914
Occupancy 810 829 906 1,639 1,606
Information technology 636 627 633 1,263 1,041
Advertising and public relations 160 265 289 425 498
Audit, legal and consulting 384 281 520 665 744
Federal deposit insurance 126 114 113 240 183
Provision for losses on other real estate 27 26 90 53 110
Other operating   1,001   1,101     1,078     2,102     1,586  
 
TOTAL NONINTEREST EXPENSE   8,027   8,637     8,704     16,664     13,682  
 
INCOME BEFORE PROVISION FOR INCOME TAXES 2,725 3,126 2,472 5,851 3,197
 
INCOME TAX EXPENSE   588   568     902     1,156     1,086  
 
CONSOLIDATED NET INCOME   2,137   2,558     1,570     4,695     2,111  
 

NONCONTROLLING INTEREST IN NET (INCOME) LOSS OF SUBSIDIARY
  223   (321 )   32     (98 )   103  
 
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 2,360 $ 2,237   $ 1,602   $ 4,597   $ 2,214  
 
Basic net income attributable to common shareholders, per share $ 0.31 $ 0.30   $ 0.23   $ 0.61   $ 0.40  
Diluted net income attributable to common shareholders, per share $ 0.31 $ 0.30   $ 0.22   $ 0.60   $ 0.39  
 

       
COMMERCE UNION BANCSHARES, INC.
SEGMENT FINANCIAL INFORMATION
FOR THE PERIODS INDICATED

(Dollar Amounts In Thousands)

(Unaudited)
 

Retail Banking
Three Months Ended Six Months Ended
June 30,     March 31,     June 30, June 30,     June 30,
2016 2016 2015 2016 2015
Net interest income $ 8,545 $ 7,788 $ 7,109 $ 16,332 $ 10,969
Provision for loan losses 450 165 (500 ) 615 (500 )
Noninterest income 728 502 528 1,229 385
Noninterest expense 5,859 5,342 5,633 11,200 8,554
Income tax expense   604     546     902     1,149     1,086  
Net income $ 2,360   $ 2,237   $ 1,602   $ 4,597   $ 2,214  
 
 

Residential Mortgage Banking
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
Net interest income $ 147 $ 294 $ 283 $ 442 $ 492
Provision for loan losses - - - - -
Noninterest income 1,782 3,344 2,756 5,127 4,533
Noninterest expense 2,168 3,295 3,071 5,464 5,128
Income tax expense   (16 )   22     -     7     -  
Net income (loss) (223 ) 321 (32 ) 98 (103 )
Noncontrolling interest in net income of subsidiary   223     (321 )   32     (98 )   103  
Net income attributable to common shareholders $ -   $ -   $ -   $ -   $ -  
 

                   
COMMERCE UNION BANCSHARES, INC.
SELECTED QUARTERLY FINANCIAL DATA
AT OR FOR THE THREE MONTHS ENDED

(Dollar Amounts In Thousands, Except Per Share Amounts)

(Unaudited)
 
June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
Selected Income Statement Data
Total interest income $ 9,497 $ 8,914 $ 8,708 $ 8,483 $ 8,135
Total interest expense 805 832 807 764 743
Net interest income 8,692 8,082 7,901 7,719 7,392
Provision for loan losses 450 165 230 - (500 )

Net interest income after provision for loan losses
8,242 7,917 7,671 7,719 7,892
Noninterest income 2,510 3,846 3,534 4,019 3,284
Noninterest expense 8,027 8,637 9,047 8,840 8,704
Income tax expense 588 568 627 558 902
Consolidated net income 2,137 2,558 1,531 2,340 1,570

Noncontrolling interest in net (income) loss of subsidiary
223 (321 ) (3 ) (507 ) 32
Net income attributable to common shareholders 2,360 2,237 1,528 1,833 1,602
 
Per Common Share Data

Net income attributable to common shareholders, per share
Basic $ 0.31 $ 0.30 $ 0.21 $ 0.26 $ 0.23
Diluted $ 0.31 $ 0.30 $ 0.21 $ 0.25 $ 0.22
Book value per common share $ 13.90 $ 13.49 $ 13.29 $ 13.31 $ 12.99
Tangible book value per common share $ 12.17 $ 11.74 $ 11.46 $ 11.42 $ 11.08
Basic weighted average common shares 7,560,503 7,450,400 7,130,665 7,086,798 7,063,771
Diluted weighted average common shares 7,678,508 7,563,666 7,291,960 7,286,069 7,308,668
Common shares outstanding at period end 7,627,777 7,560,594 7,279,620 7,092,294 7,070,821
 
Selected Balance Sheet Data
Total assets $ 883,204 $ 868,545 $ 876,404 $ 852,689 $ 798,930
Securities available for sale 147,675 139,899 133,825 130,019 112,039
Loans, net of unearned income 649,277 622,733 616,570 593,817 574,046
Allowance for loan losses 8,688 8,090 7,823 7,511 7,424
Mortgage loans held for sale 14,961 24,682 55,093 44,745 41,715
Other real estate 475 1,139 1,149 528 1,094
Goodwill 11,404 11,404 11,404 11,404 11,404
Core deposit intangibles 1,760 1,849 1,938 2,028 2,117
Non-interest bearing deposits 134,515 116,362 111,309 95,883 97,489
Total deposits 647,851 657,777 640,008 608,990 602,503
Federal Home Loan Bank advances 124,871 104,798 135,759 145,646 102,854
Total stockholders' equity 106,024 102,022 96,751 94,403 91,853
Average loans 637,787 617,600 603,329 582,145 564,056
Average earnings assets (1) 830,501 821,181 813,473 775,313 745,899
Average total assets 880,657 871,961 863,798 823,228 789,129
Average stockholders' equity 103,297 99,237 92,492 93,030 91,336
 

(1)

Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, investment securities and restricted equity securities.
 

                   

COMMERCE UNION BANCSHARES, INC.
SELECTED QUARTERLY FINANCIAL DATA
AT OR FOR THE THREE MONTHS ENDED

(Dollar Amounts In Thousands, Except Per Share Amounts)

(Unaudited)
 
June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
Selected Asset Quality Measures
Nonaccrual loans $ 4,126 $ 4,342 $ 5,004 $ 4,266 $ 4,103
Total nonperforming assets (1) 4,601 5,481 6,153 4,794 5,197
Net charge offs (recoveries) (149 ) (102 ) (82 ) (87 ) (516 )
Nonaccrual loans to total loans 0.64 % 0.70 % 0.81 % 0.72 % 0.71 %
Nonperforming assets to total assets 0.52 % 0.63 % 0.70 % 0.56 % 0.65 %
Nonperforming assets to total loans and other real estate 0.71 % 0.88 % 1.00 % 0.81 % 0.90 %
Allowance for loan losses to total loans 1.34 % 1.30 % 1.27 % 1.26 % 1.29 %
Allowance for loan losses to nonaccrual loans 210.57 % 186.32 % 156.33 % 176.07 % 180.94 %
Net charge offs (recoveries) to average loans (2) (0.09 %) (0.07 %) (0.05 %) (0.06 %) (0.37 %)
 
Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage 10.59 % 10.34 % 9.88 % 10.26 % 10.54 %
Common equity tier 1 12.49 % 12.75 % 11.97 % 12.23 % 13.24 %
Tier 1 risk-based capital 12.49 % 12.75 % 11.97 % 12.23 % 13.24 %
Total risk-based capital 13.67 % 13.91 % 13.08 % 13.33 % 14.46 %
 
Selected Performance Ratios (2) (3)
Return on average assets 1.07 % 1.03 % 0.71 % 0.89 % 0.81 %
Return on average stockholders' equity 9.14 % 9.02 % 6.61 % 7.88 % 7.02 %
Net interest margin 4.33 % 4.08 % 3.98 % 4.03 % 4.06 %
 
NON-GAAP FINANCIAL MEASURES
Adjusted net interest margin (4)
Net interest income $ 8,692 $ 8,082 $ 7,901 $ 7,719 $ 7,392
Purchase accounting adjustments (442 ) (442 ) (442 ) (442 ) (442 )

Interest income recognized on payoff of purchased credit impaired loan
(619 ) - - - -
State tax credit on tax exempt loan   233     -     -     -     -  
Adjusted net interest income $ 7,864 $ 7,640 $ 7,459 $ 7,277 $ 6,950
Adjusted net interest margin 3.93 % 3.86 % 3.76 % 3.80 % 3.82 %
 

Efficiency ratio (subsidiary bank only excluding mortgage segment) (4)
Non-interest expense $ 5,499 $ 5,039 $ 5,077 $ 4,939 $ 5,243
Net interest income 8,545 7,788 7,540 7,334 7,109

Tax equivalent adjustment for tax exempt interest income
304 272 245 193 185
Non-interest income 728 502 522 565 528
Less gain on sale of other real estate and other assets (130 ) (20 ) (5 ) (1 ) -
Less (gain) loss on sale of securities   (60 )   -     7     (15 )   -  
Adjusted operating income $ 9,387 $ 8,542 $ 8,309 $ 8,076 $ 7,822
 
Efficiency Ratio 58.58 % 58.99 % 61.10 % 61.16 % 67.03 %
 

(1)

Nonperforming assets consist of nonaccrual loans and other real estate.

(2)

Data has been annualized.

(3)

Return on average assets is defined as net income attributable to common shareholders divided by average total assets; return on average stockholders' equity is defined as net income attributable to common shareholders divided by average stockholders' equity; net interest margin is defined as net interest income divided by average earning assets.

(4)

Not a recognized measure under generally accepted accounting principles (GAAP).
 

           
COMMERCE UNION BANCSHARES, INC.
YIELD TABLES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(Dollar Amounts In Thousands)

(Unaudited)
 

Three Months Ended

June 30, 2016

Three Months Ended

June 30, 2015
Change

Average

Balances
   

Rates /

Yields

(%)
   

Interest

Income /

Expense

Average

Balances
   

Rates /

Yields

(%)
   

Interest

Income /

Expense

Due to

Volume
   

Due to

Rate
    Total
Interest Earning Assets                        
Loans $ 637,787 5.06 $ 8,018 $ 564,056 4.83 $ 6,790 $ 900 $ 328 $ 1,228
Loan fees   -     0.31       494   -     0.29       410   84         -         84  
Loans with fees 637,787 5.37 8,512 564,056 5.12 7,200 984 328 1,312
Mortgage loans held for sale 20,733 3.61 186 36,408 3.87 351 (143 ) (22 ) (165 )
Federal funds sold 356 1.13 1 542 2.22 3 (1 ) (1 ) (2 )
Deposits with banks 20,357 0.32 16 26,171 0.17 11 (15 ) 20 5
Investment securities - taxable 48,754 1.78 216 48,712 1.80 218 2 (4 ) (2 )
Investment securities - tax-exempt 95,590 3.12 490 64,698 2.81 299 155 36 191
Other   6,924     4.41       76   5,312     4.00       53   17         6         23  
Total Earning Assets   830,501     4.72       9,497   745,899     4.46       8,135   999         363         1,362  
Nonearning Assets   50,156   43,230
$ 880,657 $ 789,129
Interest bearing liabilities
Interest bearing demand $ 89,385 0.21 47 $ 103,615 0.22 57 (8 ) (2 ) (10 )
Savings and money market 191,630 0.34 163 173,093 0.29 124 15 24 39
Time deposits - retail 143,953 0.67 240 141,164 0.76 268 32 (60 ) (28 )
Time deposits - wholesale   105,560     0.64       167   93,030     0.54       125   18         24         42  
Total interest bearing deposits 530,528 0.47 617 510,902 0.45 574 57 (14 ) 43
Federal Home Loan Bank advances   115,855     0.65       188   94,360     0.72       169   106         (87 )       19  
Total borrowed funds 115,855 0.65 188 94,360 0.72 169 106 (87 ) 19
Total interest-bearing liabilities   646,383     0.50       805   605,262     0.49       743   163         (101 )       62  
 
Net interest rate spread (%) / Net Interest Income ($) 4.22     $ 8,692 3.97     $ 7,392 $ 836       $ 464       $ 1,300  
Non-interest bearing deposits 126,175 90,073
Other non-interest bearing liabilities 4,802 2,458
Stockholder's equity   103,297   91,336
$ 880,657 $ 789,129
   
Net interest margin 4.33 4.06
 

           
COMMERCE UNION BANCSHARES, INC.
YIELD TABLES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(Dollar Amounts In Thousands)

(Unaudited)
 

Six Months Ended

June 30, 2016

Six Months Ended

June 30, 2015
Change

Average

Balances
   

Rates /

Yields

(%)
   

Interest

Income /

Expense

Average

Balances
   

Rates /

Yields

(%)
   

Interest

Income /

Expense

Due to

Volume
   

Due to

Rate
    Total
Interest Earning Assets                        
Loans $ 627,694 4.91 $ 15,326 $ 441,558 4.74 $ 10,376 $ 4,562 $ 388 $ 4,950
Loan fees   -     0.31       956   -     0.28       609   347         -         347  
Loans with fees 627,694 5.22 16,282 441,558 5.02 10,985 4,909 388 5,297
Mortgage loans held for sale 30,124 3.70 554 29,209 4.16 602 49 (97 ) (48 )
Federal funds sold 333 0.60 1 597 1.35 4 (1 ) (2 ) (3 )
Deposits with banks 20,750 0.34 35 20,633 0.17 17 - 18 18
Investment securities - taxable 49,004 1.85 452 43,401 1.96 421 88 (57 ) 31
Investment securities - tax-exempt 92,116 3.07 928 54,026 2.72 481 378 69 447
Other   6,584     4.86       159   4,322     4.57       98   54         7         61  
Total Earning Assets   826,605     4.60       18,411   593,746     4.37       12,608   5,477         326         5,803  
Nonearning Assets   49,704   29,566
$ 876,309 $ 623,312
Interest bearing liabilities
Interest bearing demand $ 89,620 0.20 91 $ 77,275 0.21 79 21 (9 ) 12
Savings and money market 192,673 0.34 329 142,320 0.27 189 81 59 140
Time deposits - retail 142,231 0.68 484 91,091 0.80 363 268 (147 ) 121
Time deposits - wholesale   110,663     0.63       346   97,853     0.52       254   35         57         92  
Total interest bearing deposits 535,187 0.47 1,250 408,539 0.44 885 405 (40 ) 365
Federal Home Loan Bank advances and other   116,540     0.67       387   75,707     0.70       262   158         (33 )       125  
Total borrowed funds 116,540 0.67 387 75,707 0.70 262 158 (33 ) 125
Total interest-bearing liabilities   651,727     0.51       1,637   484,246     0.48       1,147   563         (73 )       490  
 
Net interest rate spread (%) / Net Interest Income ($) 4.09     $ 16,774 3.89     $ 11,461 $ 4,914       $ 399       $ 5,313  
Non-interest bearing deposits 118,118 69,754
Other non-interest bearing liabilities 5,197 1,873
Stockholder's equity   101,267   67,439
$ 876,309 $ 623,312
   
Net interest margin 4.20 3.98

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