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Cardinal Announces Q1 2017 Earnings

Cardinal Financial Corporation (NASDAQ: CFNL) (the “Company”) today reported earnings of $12.4 million for the three month period ended March 31, 2017. This compares to $13.1 million for the three month period ended March 31, 2016. Diluted earnings per share were $0.36 and $0.39 for these same time periods respectively.

Other Selected Highlights

  • Total assets of the Company were $4.3 billion, increasing 5.5% from March 31, 2016.
  • Loans held for investment were $3.3 billion, increasing 6.9% from a year ago and 4.2% annualized from December 31, 2016.
  • Loans held for sale were $296 million versus $365 million a year ago.
  • Total deposits increased 8.8%, to $3.4 billion from $3.1 billion at March 31, 2017 and 2016, respectively.
  • Non-interest bearing demand deposit accounts increased 10.8% over the past year, to $762 million.
  • The Company’s net interest margin was 3.30% for the quarter ended March 31, 2017.
  • The Company had nonperforming loans of 0.14% of total assets.
  • During the quarter, George Mason Mortgage had $625 million loan closings and originated over $1.20 billion applications. The gain on sale margin was 3.03%.

Cardinal’s shareholders approved the merger with United Bankshares, Inc. (“United”) (NASDAQ: UBSI) during a special shareholder meeting on April 7, 2017, which followed United’s obtaining regulatory approval of the merger by the Board of Governors of the Federal Reserve System and the Virginia Bureau of Financial Institutions. The companies expect to complete the transaction on April 21, 2017.

CAUTION ABOUT FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements contain information related to matters such as the Company’s intent, belief or expectation with regard to such matters as financial and operational performance, cost savings, credit quality and branch expansion. Such statements are necessarily based on management’s assumptions and estimates and are inherently subject to a variety of risks and uncertainties concerning the Company’s operations and business environment, which are difficult to predict and beyond the control of the Company. Such risks and uncertainties could cause actual results of the Company to differ materially from those matters expressed or implied in such forward-looking statements.

Risk and uncertainties related to the pending merger with United include, among others, that: the businesses of United and Cardinal may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the expected growth opportunities or cost savings from the merger may not be fully realized or may take longer to realize than expected; deposit attrition, operating costs, customer losses and business disruption following the merger, including adverse effects on relationships with employees, may be greater than expected.

For an explanation of some of the additional risks and uncertainties associated with forward-looking statements, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and other reports filed with and furnished to the Securities and Exchange Commission. The Company has no obligation and does not undertake to update, revise or correct any of the forward-looking statements after the date of this press release, or after the respective dates on which such statements otherwise are made.

About Cardinal Financial Corporation: Cardinal Financial Corporation, a financial holding company headquartered in Tysons Corner, Virginia with assets of $4.21 billion at December 31, 2016, serves the Washington Metropolitan region through its wholly-owned subsidiary, Cardinal Bank. Cardinal also operates several other subsidiaries: George Mason Mortgage, LLC, a residential mortgage lending company based in Fairfax, Virginia and Cardinal Wealth Services, Inc., a wealth management services company. The Company's stock is traded on NASDAQ (CFNL). For additional information please visit our Web site at www.cardinalbank.com or call (703) 584-3400.

Table 1.
Cardinal Financial Corporation and Subsidiaries
Summary Consolidated Statements of Condition
(Dollars in thousands)
(Unaudited)
% Change
CurrentFrom
03/31/1712/31/1603/31/16QuarterYear Ago
Cash and due from banks $ 24,347 $ 21,104 $ 19,379 15.4 % 25.6 %
Federal funds sold 145,246 76,728 41,489 89.3 % 250.1 %
Investment securities available-for-sale 380,799 388,191 407,980 -1.9 % -6.7 %
Investment securities held-to-maturity 3,510 3,543 3,814 -0.9 % -8.0 %
Investment securities – trading 8,935 8,383 6,221 6.6 % 43.6 %
Total investment securities 393,244 400,117 418,015 -1.7 % -5.9 %
Other investments 16,429 16,420 19,411 0.1 % -15.4 %
Loans held for sale 296,348 297,766 365,489 -0.5 % -18.9 %
Loans receivable, net of fees:
Commercial and industrial 346,171 373,637 363,405 -7.4 % -4.7 %
Real estate - commercial 1,867,334 1,685,001 1,555,985 10.8 % 20.0 %
Real estate - construction 472,057 587,089 560,114 -19.6 % -15.7 %
Real estate - residential 469,429 468,463 455,952 0.2 % 3.0 %
Home equity lines 155,287 161,135 161,691 -3.6 % -4.0 %
Consumer 5,058 5,834 4,831 -13.3 % 4.7 %
Total loans, net of fees 3,315,336 3,281,159 3,101,978 1.0 % 6.9 %
Allowance for loan losses (32,299 ) (31,767 ) (32,407 ) 1.7 % -0.3 %
Loans receivable, net 3,283,037 3,249,392 3,069,571 1.0 % 7.0 %
Premises and equipment, net 22,462 22,736 24,845 -1.2 % -9.6 %
Goodwill and intangibles, net 35,855 35,981 36,415 -0.4 % -1.5 %
Bank-owned life insurance 33,501 33,388 33,102 0.3 % 1.2 %
Other assets 48,662 56,882 46,829 -14.5 % 3.9 %
TOTAL ASSETS $ 4,299,131 $ 4,210,514 $ 4,074,545 2.1 % 5.5 %
Non-interest bearing deposits $ 761,522 $ 733,475 $ 687,493 3.8 % 10.8 %
Interest checking 451,596 453,863 459,377 -0.5 % -1.7 %
Money markets 497,819 466,290 447,565 6.8 % 11.2 %
Statement savings 342,746 346,463 310,055 -1.1 % 10.5 %
Certificates of deposit 725,533 738,658 788,756 -1.8 % -8.0 %
Brokered certificates of deposit 641,754 543,951 451,781 18.0 % 42.0 %
Total deposits 3,420,970 3,282,700 3,145,027 4.2 % 8.8 %
Other borrowed funds 357,894 426,671 437,065 -16.1 % -18.1 %
Mortgage funding checks 13,643 13,762 28,765 -0.9 % -52.6 %
Escrow liabilities 1,227 1,506 2,777 -18.5 % -55.8 %
Other liabilities 43,615 33,698 34,366 29.4 % 26.9 %
Shareholders' equity 461,782 452,177 426,545 2.1 % 8.3 %
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 4,299,131 $ 4,210,514 $ 4,074,545 2.1 % 5.5 %
Table 2.
Cardinal Financial Corporation and Subsidiaries
Summary Consolidated Income Statements
(In thousands, except share data and per share data)
(Unaudited)
For the Three Months Ended
March 31,
20172016% Change
Net interest income $ 31,825 $ 30,706 3.6 %
Provision for loan losses 785250214.0%
Net interest income after provision for loan losses 31,04030,456 1.9 %
Non-interest income:
Service charges on deposit accounts 591 551 7.3 %
Loan fees 334 309 8.1 %
Income from bank-owned life insurance 113 124 -8.9 %
Net realized gains (losses) on investment securities 67 (84 ) 179.8 %
Other non-interest income 17614521.4%
Commercial banking & other segment non-interest income 1,281 1,045 22.6 %
Gains from mortgage banking activities 22,408 27,041 -17.1 %
Less: mortgage loan origination expenses (9,925)(12,902)-23.1%
Mortgage banking segment non-interest income 12,483 14,139 -11.7 %
Wealth management segment non-interest income 93859.4%
Total non-interest income 13,85715,269 -9.2 %
Net interest income and non-interest income 44,89745,725 -1.8 %
Salaries and benefits 15,088 15,497 -2.6 %
Occupancy 2,735 2,592 5.5 %
Depreciation 689 844 -18.4 %
Data processing & communications 1,347 1,346 0.1 %
Professional fees 1,487 1,135 31.0 %
FDIC insurance assessment 366 516 -29.1 %
Mortgage loan repurchases and settlements - 100 -100.0 %
Merger and acquisition expense 112 - 100.0 %
Other operating expense 3,9244,262-7.9%
Total non-interest expense 25,74826,292-2.1%
Income before income taxes 19,149 19,433 -1.5 %
Provision for income taxes 6,772 6,366 6.4%
NET INCOME $ 12,377 $ 13,067 -5.3 %
Earnings per common share - basic $ 0.37 $ 0.40 -7.1 %
Earnings per common share - diluted $ 0.36 $ 0.39 -7.2 %
Weighted-average common shares outstanding - basic 33,632,302 32,977,970 2.0 %
Weighted-average common shares outstanding - diluted 34,110,602 33,435,858 2.0 %

Contacts:

Cardinal Financial Corporation
Bernard H. Clineburg
Executive Chairman
703-584-3400
or
Christopher Bergstrom
Chief Executive Officer
703-584-3400
or
Mark A. Wendel
EVP, Chief Financial Officer
703-584-3400

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