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Community bank earnings: NIM, NPAs drop at Central Pacific Financial

In this feature, S&P Global Market Intelligence takes a look at earnings releases from a handful of community banks from around the country.

Southeast

Birmingham, Ala-based National Commerce Corp. reported net income to common shareholders of $4.9 million, or 44 cents per share, in the fourth quarter of 2016. It was $2.9 million, or 28 cents per share, in the year-ago period.

Taxable equivalent net interest margin was 3.99% in the fourth quarter of 2016, down from 4.18% in the third quarter and 4.06% in the fourth quarter of 2015.

The company's return on average assets in the period ticked to 1.05% from 0.72% a year ago, while its return on average equity was 8.33%, up from 5.76% a year ago.

The quarter's provision for loan losses stood at $441,000, compared to $631,000 in the year-ago period.

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Franklin, Tenn.-based Franklin Financial Network Inc. posted fourth-quarter 2016 net income available to common shareholders of $7.2 million, or 58 cents per share, up 54.8% from $4.6 million, or 41 cents per share, in the fourth quarter of 2015.

Net interest income increased 26.2% to $21.7 million from $17.2 million in the year-ago period. The increase resulted from growth in interest-earning assets, partly offset by a slight decrease in yield on interest-earning assets, reflecting an increase in tax-exempt municipal debt in the securities portfolio.

Net interest margin, adjusted for tax equivalent yield, was 3.27% in the recent quarter, compared to 3.55% in the fourth quarter of 2015. Meanwhile, noninterest income totaled $2.5 million, down from $3.0 million in the same quarter a year ago.

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WesBanco Inc. reported fourth-quarter 2016 net income of $24.2 million, or 55 cents per share, compared to $23.0 million, or 60 cents per share, in the year-ago period.

The Wheeling, W.Va.-based company's total assets were $9.79 billion in the fourth quarter, up 15.6% from $8.47 billion a year ago, due to the completion of its acquisition of New Albany, Ind.-based Your Community Bankshares Inc.

The quarter's provision for loan losses was $2.1 million, up from $2.6 million in the fourth quarter of 2015, primarily due to loan growth. Meanwhile, net interest margin was 3.42% in the recent quarter, compared to 3.32% in the year-ago quarter.

WesBanco also reported an efficiency ratio of 58.13%, compared to 56.34% in the previous year.

Southwest

Stillwater, Okla.-based Southwest Bancorp Inc. reported net income of $6.2 million, or 33 cents per share, in the fourth quarter of 2016, a 34% increase from $4.6 million, or 23 cents per share, in the year-ago quarter.

The company recorded a $3.7 million decrease in nonperforming loans, bringing the figure to $16.6 million, from $20.4 million in the year-ago period. The quarter's net interest margin was 3.40%, down from 3.42% in the prior quarter and 3.48% a year ago.

Total loans for the period were $1.88 billion, compared to $1.78 billion a year ago. Additionally, the company's efficiency ratio was 64.34% in the most recent quarter, compared to 72.17% in the fourth quarter of 2015.

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At Plano, Texas-based LegacyTexas Financial Group Inc., fourth-quarter 2016 GAAP net income available to common shareholders was $25.2 million, or 54 cents per share, in the fourth quarter, compared to $16.3 million, or 35 cents per share, in the same quarter a year ago.

The company's total assets were $8.36 billion in the recent quarter, up from $7.69 billion in the prior year. Meanwhile, nonperforming assets totaled $122.2 million, up from $44.9 million in the year-ago period. Net interest income was $74.1 million, compared to $63.7 million a year ago.

The quarter's provision for credit losses stood at $7.8 million, down from $11.2 million a year ago. Additionally, the net interest margin was 3.70%, down from 3.80% in the third quarter and 3.94% in the fourth quarter of 2015.

Midwest

Lakeland Financial Corp. recorded fourth-quarter 2016 net income of $13.5 million, or 53 cents per share, up 10% from $12.3 million, or 49 cents per share, in the year-ago period.

The Warsaw, Ind.-based company's fully tax equivalent net interest income was $31.5 million, compared to $27.9 million in the same quarter in 2015. The net interest margin was reported at 3.18%, up from 3.08% in the prior quarter and 3.16% in the year-ago quarter.

Nonperforming assets totaled $6.9 million, down from $13.2 million in the fourth quarter of 2015. Meanwhile total assets were $4.29 billion, compared to $3.77 billion a year ago.

The quarter's provision for loan losses was $1.15 million, compared to no provision recorded for the year-ago period.

West

Honolulu-based Central Pacific Financial Corp. reported net income of $12.2 million, or 39 cents per share, in the fourth quarter of 2016. In the year-ago period it was $10.9 million, or 34 cents per share. The efficiency ratio for the period was 70.08%, compared to 67.24% in the fourth quarter of 2015.

The net interest margin for the quarter was 3.22%, compared to 3.25% in the previous quarter and 3.30% in the year-ago quarter. Meanwhile, net interest income was $39.7 million, compared to $38.2 million a year ago, supported by loan portfolio growth.

The company's total nonperforming assets were $9.2 million, down from $16.2 million in the year-ago period. Net-charge offs in the period totaled $108,000, compared to $1.4 million a year ago.