UWHR 8-K
Uwharrie Capital Corp (UWHR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 15, 2020
UWHARRIE CAPITAL CORP
(Exact name of Registrant as Specified in Its Charter)
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North Carolina |
000-22062 |
56-1814206 |
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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132 North First Street Albemarle, North Carolina |
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28001 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: 704-983-6181
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Item 2.02 Results of Operations and Financial Condition
On May 15, 2020, Uwharrie Capital Corp (the "Registrant") released a quarterly report to its shareholders that included a letter to the shareholders from President and CEO Roger L. Dick and unaudited financial information for the period ended March 31, 2020.
A copy of this report is attached hereto as Exhibit 99.1 and incorporated by reference herein.
This Current Report on Form 8-K (including information included or incorporated by reference herein) may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Registrant’s goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. These statements are based upon the current belief and expectations of the Registrant’s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Registrant’s control).
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
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Exhibit Number |
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Description |
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99.1 |
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Quarterly report to shareholders for the period ended March 31, 2020. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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UWHARRIE CAPITAL CORP |
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Date: May 15, 2020 |
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By: |
/s/ Roger L. Dick |
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Roger L. Dick |
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Chief Executive Officer |
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Exhibit 99.1
May 15, 2020
Dear Shareholder:
The first quarter of 2020 will permanently be remembered as a period of change. Covid-19 has brought many changes to our communities, affecting the ways we live, work and interact. Roughly 40% of our team is currently working from home, and we have become more accustomed to online meetings and conference calls. While our customers are adapting to accessing our branches predominately with our drive-thru facilities, we have seen a significant increase in online account opening and mobile banking activity. Our efforts to provide electronic services, compared to traditional brick and mortar services, have allowed us to social distance and continue to meet our customers’ needs while sustaining business operations.
A large focus during the first quarter and into the second quarter of 2020 for Uwharrie Bank, has been to help provide capital to the businesses that make up our local economies with the help of the Small Business Administration (SBA) Paycheck Protection Program (PPP). As a Preferred SBA lender, our team has been able to react quickly to the program’s requirements. This has helped our Main Street businesses gain access to funds they so badly need and put payroll dollars into the hands of families that depend on them. Additionally, we are providing various payment deferrals for current consumer and business customers to help them bridge the interruption of income they are experiencing during these financially turbulent times.
During the first quarter of 2020, the United States experienced a near overnight drop in short-term interest rates of 150 basis points and historical low interest rates all across the US Treasury yield curve. This has fueled a refinance boom for our mortgage division as families take advantage of both the decline in interest rates and lower home ownership cost. Income from mortgage production increased from $492,000 at March 31, 2019 to $1.1 million at March 31, 2020, a 116% improvement.
Uwharrie Investment Advisors (UIA), our wealth management division, showed improvement in revenue, as well as expense reductions in the first quarter of 2020, as compared to the same period last year. Our advisors are staying in close contact with our clients to help them manage the risk of their portfolios in these challenging markets. For the third consecutive year, UIA has been recognized by the Centre for Fiduciary Excellence (CEFEX) for demonstrating adherence to professional practices and remains in good standing.
As of the end of first quarter 2020, your Company’s earnings from all divisions before income tax and loan loss provisions were $1.0 million, an increase of $285,000 or 38% when compared to the same period in 2019. However, due to the increased risk and uncertainty associated with the effects of COVID-19, your Company added $632,000 to its provision for loan losses. The resulting Net Income Available to Common Shareholders after dividends for the first quarter 2020 was $187,000, compared to $550,000 reported for the same quarter 2019, a decrease of 66%. The Company grew assets from $656.8 million at December 31, 2019 to $674.7 million at March 31, 2020.
Although the damage of COVID-19 is wreaking havoc and changing our world, it has been good to see the many acts of kindness throughout our communities, and I am sure we will continue to see our neighbors and friends step up where there are needs. In the words of Winston Churchill, “Don’t let a good crisis go to waste,” so maybe we can find some good in all the chaos. For many of us, who are spending more time with loved ones, we know that the world is creating less pollution, and the sounds of the breeze and of birds are being heard in our cities as nature reclaims some of the space that we have occupied. Spiritually, we are witnessing an awakening, as we watch and listen to accounts of human caring and kindness.
It is unclear when a recovery will take place and what type of normalcy will resume when the economy returns and the pandemic is over; however, just know that your Company will continue to do its part in relief efforts and provide financial services for long term sustainability in our communities … we are all in this together!
Thank you for your continued support.
Sincerely,
UWHARRIE CAPITAL CORP
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/s/ Roger L. Dick |
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President and Chief Executive Officer |
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This Report may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Company's goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may," ”could," ”should,” “would,” “believe," ”anticipate," "estimate," "expect," “intend,” ”plan,” ”projects," ”outlook," or similar expressions. These statements are based upon the current belief and expectations of the Company‘s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control).
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Consolidated Balance Sheets |
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March 31, |
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March 31, |
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(Amounts in thousands except share and per share data) |
2020 |
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2019 |
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Assets |
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Cash and due from banks |
$ |
6,364 |
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$ |
8,518 |
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Interest-earning deposits with banks |
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132,644 |
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134,878 |
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Securities available for sale |
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108,204 |
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90,737 |
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Securities held to maturity (fair value $15,864 and $10,677, respectively) |
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15,798 |
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10,673 |
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Equity security, at fair value |
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1,132 |
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- |
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Loans held for sale |
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5,142 |
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3,567 |
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Loans held for investment |
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368,252 |
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367,962 |
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Less: Allowance for loan losses |
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2,627 |
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2,233 |
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Net loans held for investment |
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365,625 |
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365,729 |
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Interest receivable |
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1,759 |
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1,649 |
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Premises and equipment, net |
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16,965 |
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16,467 |
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Restricted stock |
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1,166 |
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1,144 |
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Bank-owned life insurance |
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8,832 |
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8,699 |
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Other real estate owned |
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438 |
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781 |
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Other assets |
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10,584 |
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12,139 |
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Total assets |
$ |
674,653 |
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$ |
654,981 |
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Liabilities |
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Deposits: |
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Demand, noninterest-bearing |
$ |
153,962 |
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$ |
145,279 |
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Interest checking and money market accounts |
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323,638 |
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277,609 |
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Savings accounts |
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57,521 |
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57,568 |
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Time deposits, $250,000 and over |
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12,160 |
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53,200 |
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Other time deposits |
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57,045 |
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52,856 |
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Total deposits |
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604,326 |
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586,512 |
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Interest payable |
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38 |
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41 |
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Short-term borrowed funds |
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525 |
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1,403 |
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Long-term debt |
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9,992 |
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9,974 |
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Other liabilities |
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9,735 |
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10,738 |
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Total liabilities |
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624,616 |
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608,668 |
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Shareholders' Equity |
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Common stock, $1.25 par value: 20,000,000 shares authorized; |
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issued and outstanding or in process of issuance |
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6,984,582 and 7,097,227 shares, respectively. |
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Book value per share $5.64 in 2020 and $4.93 in 2019 (1) |
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8,731 |
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8,871 |
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Additional paid-in capital |
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12,311 |
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12,776 |
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Undivided profits |
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16,413 |
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14,971 |
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Accumulated other comprehensive income (loss) |
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1,927 |
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(960 |
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Total Uwharrie Capital Corp shareholders' equity |
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39,382 |
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35,658 |
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Noncontrolling interest |
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10,655 |
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10,655 |
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Total shareholders' equity |
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50,037 |
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46,313 |
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Total liabilities and shareholders' equity |
$ |
674,653 |
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$ |
654,981 |
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(1) Net income per share, book value per share and weighted average shares outstanding have been adjusted to reflect the 2% stock dividend in 2019. |
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Uwharrie Capital Corp and Subsidiaries |
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Consolidated Statements of Income |
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Three Months Ended |
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March 31, |
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(Amounts in thousands except share and per share data) |
2020 |
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2019 |
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Interest Income |
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Interest and fees on loans |
$ |
4,553 |
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$ |
4,667 |
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Interest on investment securities |
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591 |
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496 |
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Interest-earning deposits with banks and federal funds sold |
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552 |
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793 |
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Total interest income |
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5,696 |
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5,956 |
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Interest Expense |
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Interest paid on deposits |
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728 |
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597 |
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Interest paid on borrowed funds |
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132 |
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147 |
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Total interest expense |
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860 |
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744 |
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Net Interest Income |
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4,836 |
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5,212 |
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Provision for (recovery of) loan losses |
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632 |
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(113 |
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Net interest income after provision (recovery of) |
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for loan losses |
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4,204 |
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5,325 |
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Noninterest Income |
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Service charges on deposit accounts |
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313 |
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327 |
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Interchange and card transaction fees |
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192 |
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194 |
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Other service fees and commissions |
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765 |
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756 |
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Gain (loss) on sale of securities |
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58 |
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- |
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Unrealized gain on equity security |
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231 |
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- |
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Income from mortgage loan sales |
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1,065 |
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492 |
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Other income (loss) |
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382 |
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(21 |
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Total noninterest income |
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3,006 |
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1,748 |
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Noninterest Expense |
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Salaries and employee benefits |
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4,424 |
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4,133 |
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Occupancy expense |
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415 |
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405 |
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Equipment expense |
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183 |
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176 |
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Data processing |
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158 |
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222 |
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Other operating expenses |
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1,617 |
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1,264 |
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Total noninterest expense |
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6,797 |
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6,200 |
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Income before income taxes |
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413 |
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873 |
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Provision for income taxes |
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85 |
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183 |
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Net Income |
$ |
328 |
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$ |
690 |
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Consolidated net income |
$ |
328 |
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$ |
690 |
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Less: Net income attributable to noncontrolling interest |
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(141 |
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(140 |
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Net income attributable to Uwharrie Capital Corp and common shareholders |
$ |
187 |
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$ |
550 |
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Net Income Per Common Share (1) |
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Basic |
$ |
0.03 |
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$ |
0.08 |
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Assuming dilution |
$ |
0.03 |
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$ |
0.08 |
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Weighted Average Common Shares Outstanding (1) |
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Basic |
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7,067,752 |
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7,268,075 |
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Assuming dilution |
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7,067,752 |
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7,268,075 |
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