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Merchants Bancshares Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 6, 2012 03:35PM
Merchants Bancshares Inc. (MBVT) filed Quarterly Report for the period ended 2012-09-30. Merchants Bancshares Inc. has a market cap of $178.7 million; its shares were traded at around $29.25 with a P/E ratio of 11.8 and P/S ratio of 2.6. The dividend yield of Merchants Bancshares Inc. stocks is 3.9%. Merchants Bancshares Inc. had an annual average earning growth of 4.1% over the past 10 years.
Highlight of Business Operations:This discussion should be read in conjunction with the tables on the following three pages. Our taxable equivalent net interest income was $13.15 million and $38.97 million for the three and nine months ended September 30, 2012, respectively, compared to $13.27 million and $38.39 million for the same periods in 2011, and $12.86 million for the second quarter of 2012. Our taxable equivalent net interest margin increased slightly during the third quarter of 2012 to 3.29% from 3.27% for the second quarter of this year. This quarter-over-quarter increase in the margin is a result of FHLB prepayments discussed below, combined with a reduction in the costs associated with our customer repurchase agreements. Year-to-date the net interest margin has decreased 26 basis points to 3.30% compared to 3.56% for the first nine months of 2011. Our continued growth in earning assets has helped to offset margin compression and allowed us to increase net interest income for the first nine months of 2012 compared to the first nine months of 2011. Average earning assets for the first three and nine months of 2012 were $1.59 billion and $1.58 billion, respectively, an increase of $129.39 million and $135.06 million over the same periods in 2011, and an increase of $8.38 million over the second quarter of 2012.
Noninterest Income: Total noninterest income decreased $213 thousand to $3.20 million for the third quarter of 2012 compared to 2011, and increased $658 thousand for the first nine months of 2012 compared to 2011. During the third quarter of 2012, we recognized a gain on the sale of one of our branch locations of $749 thousand. Additionally, during the second quarter of 2012, we recognized a gain of $334 thousand on the sale of the mineral rights we owned on properties in Oklahoma which we acquired in a bank acquisition in 1971. We also recognized gains (losses) on investment securities $(26) thousand and $422 thousand during the quarter and nine months ended September 30, 2012, respectively. Excluding net gains (losses) on investment securities and the gains on the sale of the branch location and mineral rights, noninterest income decreased $16 thousand to $2.48 million for the third quarter of 2012 compared to $2.49 million for the third quarter of 2011, and increased $200 thousand to $7.22 million for the first nine months of 2012 compared to $7.02 million for the first nine months of 2011. The change for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011 is primarily a result of increases in net debit card income and Trust division income, offset in part by decreased overdraft fee revenue. Additionally, the timing of investments in low income housing partnerships lead to a reduction in equity in losses of real estate limited partnerships to $(370) thousand for the third quarter of 2012 from $(441) thousand for the third quarter of last year, and $(1.19) million for the first nine months of 2012, compared to $(1.32) million for the same period in 2011. Trust assets under management have continued to grow through 2012 and now total $531 million.
Stocks Discussed: MBVT,