BAY BANKS OF VIRGINIA INC

CIK:0001034594|SEC Filings

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
INTEREST INCOME
Loans, including fees	$ 11,371	$ 11,930	$ 34,013	$ 34,849
Securities:
Taxable	596	553	1,821	1,725
Tax-exempt	88	113	270	327
Federal funds sold		6	2	31
Interest-bearing deposit accounts	6	145	119	432
Certificates of deposit	9	18	37	57
Total interest income	12,070	12,765	36,262	37,421
INTEREST EXPENSE
Deposits	2,104	3,123	7,364	9,019
Securities sold under repurchase agreements		4	3	11
Subordinated notes	510	142	1,531	417
Federal Home Loan Bank advances	50	465	374	1,784
Federal Reserve Bank advances	29		49
Total interest expense	2,693	3,734	9,321	11,231
Net interest income	9,377	9,031	26,941	26,190
Provision for loan losses	869	495	5,673	871
Net interest income after provision for loan losses	8,508	8,536	21,268	25,319
NONINTEREST INCOME
Secondary market sales and servicing	1,082	293	2,015	632
Increase in cash surrender value of bank owned life insurance	117	122	351	362
Net gains (losses) on sales and calls of available-for-sale securities		1	29	(1)
Net gains (losses) on disposition of other assets	12		5	(2)
Net gains (losses) gains on rabbi trust assets	74		(76)	130
Referral fees	86		1,052
Other	8	15	54	44
Total noninterest income	2,286	1,200	5,870	3,585
NONINTEREST EXPENSE
Salaries and employee benefits	3,801	3,666	11,267	11,532
Occupancy	700	805	2,156	2,510
Data processing	491	541	1,526	1,738
Bank franchise tax	256	209	770	655
Telecommunications and other technology	396	258	1,176	727
FDIC assessments	262	(7)	557	371
Foreclosed property	22	48	58	110
Consulting	54	156	195	418
Advertising and marketing	47	124	140	300
Directors’ fees	187	148	568	525
Audit and accounting	92	193	402	586
Legal	(210)	20	135	130
Core deposit intangible amortization	134	164	425	517
Net other real estate owned losses	176	375	256	441
Goodwill impairment			10,374
Merger-related	1,456		1,456
Other	782	747	1,947	2,108
Total noninterest expense	8,646	7,447	33,408	22,668
Income (loss) before income taxes	2,148	2,289	(6,270)	6,236
Income tax expense	655	448	378	1,180
Net income (loss)	$ 1,493	$ 1,841	$ (6,648)	$ 5,056
Basic and diluted earnings (loss) per share	$ 0.11	$ 0.14	$ (0.51)	$ 0.39
Trust Management
NONINTEREST INCOME
Non-Interest Income	$ 220	$ 201	$ 615	$ 621
Service Charges and Fees on Deposit Accounts
NONINTEREST INCOME
Non-Interest Income	155	243	529	727
Wealth Management
NONINTEREST INCOME
Non-Interest Income	350	185	824	654
Interchange Fees, Net
NONINTEREST INCOME
Non-Interest Income	149	108	378	330
Other Service Charges and Fees
NONINTEREST INCOME
Non-Interest Income	$ 33	$ 32	$ 94	$ 88

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash Flows From Operating Activities
Net (loss) income	$ (6,648)	$ 5,056
Adjustments to reconcile net income to net cash provided by operating activities:
Goodwill impairment charge	10,374
Depreciation and amortization	1,075	1,279
Net premium amortization on available-for-sale securities	361	397
Amortization of subordinated notes issuance costs	82	13
Amortization of core deposit intangible	425	517
Accretion of fair value adjustment on acquired time deposits	(59)	(96)
Accretion of fair value adjustments on acquired loans	(381)	(993)
Provision for loan losses	5,673	871
Share-based compensation expense	333	315
Deferred income tax benefit	(590)
Increase in other real estate owned valuation allowance	290	423
(Gains) losses on sale of other real estate owned	(34)	18
Net (gain) loss on the disposition of fixed and other assets	(5)	2
Decrease in value of mortgage servicing rights	90	67
Increase in cash surrender value of bank owned life insurance	(351)	(362)
Net (gains) losses on sales and calls of available-for-sale securities	(29)	1
Originations of loans held for sale (HFS)	(147,289)	(42,847)
Proceeds from HFS loan sales	147,527	43,411
Gain on HFS sold loans	(1,694)	(464)
Increase in other assets and accrued interest receivable	(702)	(2,914)
(Decrease) increase in other liabilities	(117)	4,438
Net cash provided by operating activities	8,331	9,132
Cash Flows From Investing Activities
Proceeds from maturities, calls, and principal paydowns of available-for-sale securities	24,921	8,196
Purchases of available-for-sale securities	(12,227)	(5,000)
Purchases of restricted securities, net	684	916
Maturities of certificates of deposit	1,488	248
Decrease in federal funds sold	1,207	533
Net increase in loans	(130,921)	(30,300)
Proceeds from sale of other real estate owned	1,093	1,324
Net purchases of premises and equipment	(206)	(167)
Net cash used in investing activities	(113,961)	(24,250)
Cash Flows From Financing Activities
Increase in demand, savings, and other interest-bearing demand deposits	94,304	23,552
Net increase in time deposits	22,996	28,040
Stock options exercised, net	88	9
Net (decrease) increase in securities sold under repurchase agreements and other borrowings	(5,431)	164
Shares repurchased pursuant to ESOP	(25)
Decrease in Federal Home Loan Bank advances	(20,000)	(32,000)
Increase in Federal Reserve Bank advances	32,637
Net cash provided by financing activities	124,569	19,765
Net increase in cash and due from banks	18,939	4,647
Cash and cash equivalents (including interest-earning deposits) at beginning of period	40,454	26,666
Cash and cash equivalents (including interest-earning deposits) at end of period	59,393	31,313
Cash paid for:
Interest	9,425	11,264
Income taxes	650
Non-cash investing and financing activities:
Unrealized gain on available-for-sale securities	1,425	2,109
Loans transferred to other real estate owned	546	346
Changes in deferred taxes resulting from other comprehensive income transactions	(301)	(443)
Cumulative effect adjustment of adoption of accounting principle		(45)
Employee stock ownership plan transactions	(199)	(141)
Director and executive stock grant	$ 164	$ 148

Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 30, 2020

Dec. 31, 2019

ASSETS

Cash and due from banks

$ 9,324

$ 6,096

^[1]

Interest-earning deposits

50,069

34,358

^[1]

Federal funds sold

152

1,359

^[1]

Certificates of deposit

1,266

2,754

^[1]

Available-for-sale securities, at fair value

87,853

99,454

^[1]

Restricted securities

5,022

5,706

^[1]

Loans receivable, net of allowance for loan losses of $12,899 and $7,562, respectively

1,041,711

916,628

^[1]

Loans held for sale

2,687

1,231

^[1]

Premises and equipment, net

17,859

20,141

^[1]

Accrued interest receivable

4,664

3,035

^[1]

Other real estate owned, net

1,113

1,916

^[1]

Bank owned life insurance

20,103

19,752

^[1]

Goodwill

^[1]

10,374

Mortgage servicing rights

845

935

^[1]

Other assets

7,820

6,666

^[1]

Total assets

1,251,582

1,131,923

^[1]

LIABILITIES

Noninterest-bearing demand deposits

190,843

137,933

^[1]

Savings and interest-bearing demand deposits

424,001

382,607

^[1]

Time deposits

412,837

389,900

^[1]

Total deposits

1,027,681

910,440

^[1]

Securities sold under repurchase agreements

1,117

6,525

^[1]

Federal Home Loan Bank advances

25,000

45,000

^[1]

Federal Reserve Bank advances

32,637

Subordinated notes, net of issuance costs

31,083

31,001

^[1]

Other liabilities

12,635

12,772

^[1]

Total liabilities

1,130,153

1,005,738

^[1]

SHAREHOLDERS’ EQUITY

Common stock ($5 par value; authorized - 30,000,000 shares; outstanding - 13,342,104 and 13,261,801 shares, respectively)

^[2]

66,711

66,309

^[1]

Additional paid-in capital

36,816

36,658

^[1]

Unearned employee stock ownership plan shares

(1,326)

(1,525)

^[1]

Retained earnings

18,012

24,660

^[1]

Accumulated other comprehensive income, net

1,216

^[1]

Total shareholders’ equity

121,429

126,185

^[1]

Total liabilities and shareholders’ equity

1,251,582

1,131,923

^[1]

Core Deposits

ASSETS

Intangible

$ 1,094

$ 1,518

^[1]

[1]	Derived from audited December 31, 2019 Consolidated Financial Statements.
[2]	Preferred stock is authorized; however, none was outstanding as of September 30, 2020 and December 31, 2019.