Commencement Bank announced a net income of $2,102,000 today, its highest yet despite accounting for charges brought about by new tax legislation.
The bank’s pre-deferred tax asset (DTA) adjusted net income of $3,041,000 for 2017. Like most banks across the country, net income was impacted by a deferred tax asset (DTA) revaluation, resulting in a one-time charge of $940,000. Although the decreased corporate tax rate from 34% to 21% will have a positive impact on future earnings, the DTA revaluation requires the Bank adjust 2017 earnings and report adjusted net income of $2,102,000.
The adjusted 2017 net income of $2,102,000 and $0.61 per share still reflects an increase compared to $1,168,000 and $0.48 per share for 2016. The Bank’s total assets for 2017 were $328 million compared to $343.5 million for 2016. Total loans for 2017 increased to $254.7 million compared to $232.7 million one-year earlier. Total deposits decreased to $283.9 million compared to $300.1 million for 2016 resulting from a concerted effort to eliminate institutional and brokered deposits while increasing core customer deposits and decreasing cost of funds. Demand deposits, or non-interest-bearing deposits, improved by 16 percent when compared to the same period one-year earlier.
“This was an outstanding year for the Bank. We saw strong growth in loans and favorably rebalanced our asset mix. At the same time, we dramatically improved our deposit composition towards greater core deposits and relationships with our customers. Despite the deferred tax asset revaluation, we finished the year with an increase in net income and saw the Bank’s stock value improve. We look forward to continued progress in 2018 as we anticipate another solid year with a positive impact on earnings from the corporate tax rate reduction,” said H.R. “Hal” Russell, CEO of Commencement.