Bay Banks of Virginia Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow

bayk-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 0-22955

BAY BANKS OF VIRGINIA, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Virginia

54-1838100

(STATE OR OTHER JURISDICTION OF

INCORPORATION OR ORGANIZATION)

(I.R.S. EMPLOYER

IDENTIFICATION NO.)

1801 BAYBERRY COURT, SUITE 101

RICHMOND, Virginia 23226

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(804) 325-3775

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

N/A

(FORMER NAME, FORMER ADDRESS, AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ yes ☐ no

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ yes ☐ no

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ yes ☒ no

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,329,695 shares of common stock on October 30, 2020.

FORM 10-Q

For the interim period ending September 30, 2020

INDEX

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS		3

CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2020 (UNAUDITED) AND DECEMBER 31, 2019		3

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)		4

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)		5

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)		6

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)		8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		9

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		30

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		43

ITEM 4. CONTROLS AND PROCEDURES		43

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS		44

ITEM 1A. RISK FACTORS		44

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		46

ITEM 3. DEFAULTS UPON SENIOR SECURITIES		46

ITEM 4. MINE SAFETY DISCLOSURES		46

ITEM 5. OTHER INFORMATION		46

ITEM 6. EXHIBITS		47

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

BAY BANKS OF VIRGINIA, INC.

CONSOLIDATED BALANCE SHEETS

	(unaudited)
(Dollars in thousands, except share data)	September 30, 2020			December 31, 2019 (1)
ASSETS
Cash and due from banks	$	9,324		$	6,096
Interest-earning deposits		50,069			34,358
Federal funds sold		152			1,359
Certificates of deposit		1,266			2,754
Available-for-sale securities, at fair value		87,853			99,454
Restricted securities		5,022			5,706
Loans receivable, net of allowance for loan losses of $12,899 and $7,562, respectively		1,041,711			916,628
Loans held for sale		2,687			1,231
Premises and equipment, net		17,859			20,141
Accrued interest receivable		4,664			3,035
Other real estate owned, net		1,113			1,916
Bank owned life insurance		20,103			19,752
Goodwill		—			10,374
Mortgage servicing rights		845			935
Core deposit intangible		1,094			1,518
Other assets		7,820			6,666
Total assets	$	1,251,582		$	1,131,923
LIABILITIES
Noninterest-bearing demand deposits	$	190,843		$	137,933
Savings and interest-bearing demand deposits		424,001			382,607
Time deposits		412,837			389,900
Total deposits		1,027,681			910,440
Securities sold under repurchase agreements		1,117			6,525
Federal Home Loan Bank advances		25,000			45,000
Federal Reserve Bank advances		32,637			—
Subordinated notes, net of issuance costs		31,083			31,001
Other liabilities		12,635			12,772
Total liabilities		1,130,153			1,005,738
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
Additional paid-in capital		36,816			36,658
Unearned employee stock ownership plan shares		(1,326	)		(1,525	)
Retained earnings		18,012			24,660
Accumulated other comprehensive income, net		1,216			83
Total shareholders’ equity		121,429			126,185
Total liabilities and shareholders’ equity	$	1,251,582		$	1,131,923

(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.

See Notes to Consolidated Financial Statements.

BAY BANKS OF VIRGINIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the Three Months Ended					For the Nine Months Ended
(Dollars in thousands, except per share data)	September 30, 2020		September 30, 2019			September 30, 2020			September 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
Trust management		220		201			615			621
Service charges and fees on deposit accounts		155		243			529			727
Wealth management		350		185			824			654
Interchange fees, net		149		108			378			330
Other service charges and fees		33		32			94			88
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

Price	7.85	EPS	0
Shares	13	P/E	21
MCap	105	P/FCF	11
Net Debt	-31	EBIT	17
TEV	73	TEV/EBIT	4
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-06
10-Q	2020-06-30	Filed 2020-08-07
10-Q	2020-03-31	Filed 2020-05-11
10-K	2019-12-31	Filed 2020-03-06
10-Q	2019-09-30	Filed 2019-11-07
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-08
10-K	2018-12-31	Filed 2019-03-08
10-Q	2018-09-30	Filed 2018-11-09
10-Q	2018-06-30	Filed 2018-08-14
10-Q	2018-03-31	Filed 2018-05-11
10-K	2017-12-31	Filed 2018-04-09
10-Q	2017-09-30	Filed 2017-11-09
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-15
10-K	2016-12-31	Filed 2017-03-22
10-Q	2016-09-30	Filed 2016-11-14
10-Q	2016-06-30	Filed 2016-08-10
10-Q	2016-03-31	Filed 2016-05-13
10-K	2015-12-31	Filed 2016-03-28
10-Q	2015-09-30	Filed 2015-11-12
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-03-25
10-Q	2014-09-30	Filed 2014-11-13
10-Q	2014-06-30	Filed 2014-08-11
10-Q	2014-03-31	Filed 2014-05-13
10-K	2013-12-31	Filed 2014-03-28
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-14
10-Q	2013-03-31	Filed 2013-05-14
10-K	2012-12-31	Filed 2013-03-28
10-Q	2012-09-30	Filed 2012-11-13
10-Q	2012-06-30	Filed 2012-08-14
10-Q	2012-03-31	Filed 2012-05-14
10-K	2011-12-31	Filed 2012-03-28
10-Q	2011-09-30	Filed 2011-11-10
10-Q	2011-06-30	Filed 2011-08-12
10-Q	2011-03-31	Filed 2011-05-12
10-K	2010-12-31	Filed 2011-03-22
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-06
10-Q	2010-03-31	Filed 2010-05-06
10-K	2009-12-31	Filed 2010-03-30

8-K	2020-11-06
8-K	2020-10-29
8-K	2020-09-21
8-K	2020-08-13
8-K	2020-08-12
8-K	2020-08-03
8-K	2020-06-15
8-K	2020-06-15
8-K	2020-05-07
8-K	2020-01-28
8-K	2020-01-28
8-K	2020-01-02
8-K	2019-11-13
8-K	2019-11-12
8-K	2019-10-29
8-K	2019-10-18
8-K	2019-10-09
8-K	2019-10-07
8-K	2019-09-05
8-K	2019-07-30
8-K	2019-05-20
8-K	2019-05-13
8-K	2019-04-30
8-K	2019-04-08
8-K	2019-02-06
8-K	2019-01-29
8-K	2018-12-03
8-K	2018-11-06
8-K	2018-10-30
8-K	2018-10-29
8-K	2018-09-25
8-K	2018-09-04
8-K	2018-08-01
8-K	2018-07-06
8-K	2018-06-11
8-K	2018-05-09
8-K	2018-03-28
8-K	2018-03-27
8-K	2018-03-22
8-K	2018-03-12
8-K	2018-03-02
8-K	2018-02-08
8-K	2018-01-31

EX-31.1	bayk-ex311_9.htm
EX-31.2	bayk-ex312_8.htm
EX-32.1	bayk-ex321_7.htm

BAYK 10Q Quarterly Report

Bay Banks of Virginia Earnings 2020-09-30