RESTON, Va.--(BUSINESS WIRE)--

WashingtonFirst Bankshares, Inc. (“WashingtonFirst” or the “Company”) (NASDAQ: WFBI), the parent company of WashingtonFirst Bank, WashingtonFirst Mortgage, and 1st Portfolio Inc., reports net income of $5.3 million and $9.8 million for the three and six months ended June 30, 2017, respectively. Earnings per share were $0.40 and $0.74 per share on a fully-diluted basis for the three and six months ended June 30, 2017, respectively, resulting in 18% and 16% increases over the comparable periods last year. Loans held for investment grew by $104.2 million to $1.6 billion, and total deposits increased $222.0 million, an increase of 15%, to $1.7 billion during the first half of 2017. Net interest margin increased 14 basis points to 3.51% for the three months ended June 30, 2017 and 5 basis points to 3.49% for the six months ended June 30, 2017, compared to the same periods in 2016. On July 3, 2017, the Company paid its 15th consecutive quarterly cash dividend to its shareholders.

Core net income per diluted common share for the three and six months ended June 30, 2017, was $0.42 and $0.76, respectively, representing increases of 23.5% and 18.8%, respectively, compared to the same periods in the prior year. Core net income is calculated as net income adjusted for the after-tax impact of merger expenses.

Commenting on the Company’s second quarter performance, Shaza Andersen, the Company's President and CEO, said “Immediately following the announcement of the decision to merge with Sandy Spring Bancorp, our team began the work that will be needed to ensure a smooth and successful closing; however, we never lost sight of our commitments to deliver exceptional customer service and enhance shareholder value. I am so pleased to report that even with the added costs and attention associated with the merger, we have been able to meet and exceed our financial performance goals. Core net income for the second quarter were $5.7 million, or $0.42 per share on a fully diluted basis, an increase of 29% over the prior quarter."

Return on average shareholders equity was 10.54% and 9.86% during the three and six months ended June 30, 2017, respectively, compared to 9.42% and 9.01% for the same periods last year. Management attributed this increase to the continued organic growth of the loan portfolio over the past twelve months. For the three and six months ended June 30, 2017, net interest income after provision for loan losses increased $2.6 million and $4.4 million, or 19% and 16%, over the same periods ended June 30, 2016.

Total assets reached $2.1 billion as of June 30, 2017, an increase of 12% over the last twelve months. Net loans held-for-investment and total deposits ended the first half of 2017 at $1.6 billion and $1.7 billion, respectively, representing increases of 18% and 13%, respectively, over the same period last year.

About The Company

WashingtonFirst Bankshares, Inc., headquartered in Reston, Virginia, is the holding company for WashingtonFirst Bank, which operates 19 full-service banking offices throughout the Washington, D.C. metropolitan area. In addition, the Company provides wealth management services through its subsidiary, 1^st Portfolio Wealth Advisors, and mortgage banking services through the Bank's subsidiary, WashingtonFirst Mortgage Corporation. The Company's common stock is traded on the NASDAQ Stock Market under the quotation symbol "WFBI" and is included in the ABA NASDAQ Community Bank Index and the Russell 2000® index. For more information about the Company, please visit: www.wfbi.com.

Cautionary Statements About Forward-Looking Information

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements of the goals, intentions, and expectations of the Company as to future trends, plans, events, results of operations and policies and regarding general economic conditions. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents we file with the Securities and Exchange Commission from time to time. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon the beliefs of the management of the Company as to the expected outcome of future events, current and anticipated economic conditions, nationally and in the Company’s market, and their impact on the operations, assets and earnings of the Company, interest rates and interest rate policy, competitive factors, judgments about the ability of the Company to successfully integrate its operations following significant transactions including, but not limited to, mergers and acquisitions, the ability to avoid customer dislocation during the period leading up to and following such transactions, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Readers are cautioned against placing undue reliance on such forward-looking statements. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Additional Information About the Merger and Where to Find It

In connection with the proposed merger transaction, Sandy Spring Bancorp, Inc. filed with the Securities and Exchange Commission on July 19, 2017 a Registration Statement on Form S-4 which included a Preliminary Joint Proxy Statement of Sandy Spring and the Company, and a Preliminary Prospectus of Sandy Spring, as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the Registration Statement, the Preliminary Joint Proxy Statement/Prospectus, which is available now, and the Final Joint Proxy Statement/Prospectus, when it becomes available, regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain or will contain important information about Sandy Spring, the Company and the proposed merger.

A free copy of the Joint Proxy Statement/Prospectus, as well as other filings containing information about Sandy Spring and the Company, may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Sandy Spring at www.sandyspringbank.com under the tab “Investor Relations,” and then under the heading “SEC Filings” or from the Company by accessing the Company’s website at www.wfbi.com under the tab “Investor Relations,” and then selecting “SEC Filings” under the heading “Documents and Filings.” Alternatively, these documents, when available, can be obtained free of charge from Sandy Spring upon written request to Sandy Spring Bancorp, Inc., Corporate Secretary, 17801 Georgia Avenue, Olney, Maryland 20832 or by calling (800) 399-5919, or from the Company, upon written request to WashingtonFirst Bankshares, Inc., Corporate Secretary, 11921 Freedom Drive, Suite 250, Reston, Virginia 20190 or by calling (703) 840-2410.

Participants in the Solicitation

Sandy Spring and the Company and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Sandy Spring and the Company in connection with the proposed merger. Information about the directors and executive officers of Sandy Spring is set forth in the proxy statement for Sandy Spring’s 2017 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 22, 2017. Information about the directors and executive officers of WashingtonFirst is set forth in the proxy statement for the Company’s 2017 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 14, 2017. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Preliminary Joint Proxy Statement/Prospectus and, when available, the Final Joint Proxy Statement/Prospectus regarding the proposed merger. Free copies of this document may be obtained as described in the preceding paragraph.

Additional Discussion and Analysis

Consolidated net income for the three and six months ended June 30, 2017, was $5.3 million and $9.8 million, respectively, representing increases of $0.9 million and $1.5 million, or 21% and 17%, respectively, over the $4.4 million and $8.3 million earned during the three and six months ended June 30, 2016, respectively. Net income per diluted common share for the three and six months ended June 30, 2017 was $0.40 and $0.74, respectively, representing increases of 18% and 16%, respectively, over the $0.34 and $0.64 per diluted common share earning during the three and six months ended June 30, 2016, respectively.

As of June 30, 2017, total assets were $2.1 billion, compared to $2.0 billion as of December 31, 2016, and $1.9 billion as of June 30, 2016. During the six months ended June 30, 2017, total loans held for investment increased $104.2 million or 6.8% to $1.6 billion. This increase is attributable to organic loan growth from our existing lending team. During the six months ended June 30, 2017, total deposits increased $222.0 million or 14.6% to $1.7 billion. The increase in deposits is primarily attributable to deposit growth in our branch network and commercial customers.

The net interest margin was 3.51% and 3.49% for the three and six months ended June 30, 2017, respectively, compared to 3.37% and 3.44% for the same periods in 2016. This increase is primarily attributable to increases in market rates. On a linked quarter basis, our net interest margin increased from 3.47% for the three months ended March 31, 2017, to 3.51% for the three months ended June 30, 2017. The Company remains focused on its pricing discipline on both sides of the balance sheet and on all factors contributing to net income.

The adjusted allowance for loan losses to adjusted total loans held for investment, which includes credit purchase accounting marks, was 1.05% as of June 30, 2017, compared to 1.22% as of June 30, 2016. This decrease is attributable to net charge-offs of $1.4 million, which had been substantially reserved for previously, and credit mark accretion during the quarter ended June 30, 2017. A reconciliation of the allowance for loan losses and related ratios to the adjusted allowance for loan losses and related ratios is included herein. Non-performing assets increased by $10.5 million during the quarter ended June 30, 2017, primarily due to the default of two commercial real estate loans, related to a common guarantor, totaling $13.1 million. The Company is pursuing collection efforts on these loans and believes the collateral to be of sufficient value to protect the Company against loss with tenant rent payments sufficient to service the loans. As a result of these payment defaults, the ratio of non-performing assets to total assets increased to 0.92% as of June 30, 2017, compared to 0.71% as of June 30, 2016.

Non-interest income for the three and six months ended June 30, 2017, was $6.6 million and $11.4 million, respectively, each representing a decrease of $1.9 million compared to the $8.5 million and $13.3 million of non-interest income for the three and six month periods ended June 30, 2016, respectively. Non-interest income was negatively impacted by higher interest rates which resulted in lower mortgage origination volume during the first half of 2017, compared to the same period last year. During the three and six months ended June 30, 2017, the mortgage subsidiary originated $200.0 million and $314.3 million in total mortgage loan volume, a slight decrease from the $216.9 million and $339.6 million in total mortgage volume originated during the three and six months ended June 30, 2016, respectively. As of June 30, 2017, the Company's wealth management business unit had $313.8 million in assets under management, an increase of 28.0% over the same period last year. The Company did not sell any investment securities during 2017; however, during the three and six months ended June 30, 2016, the Company sold investment securities resulting in $1.1 million and $1.2 million, respectively, of gains on the sale of investments.

Non-interest expense decreased during the three months ended June 30, 2017, by $0.5 million, and increased during the six months ended June 30, 2017, by $0.7 million compared to the same periods ended June 30, 2016, primarily as a result of $0.5 million in merger expenses incurred during the second quarter of 2017 and a one-time $1.0 million debt termination expense incurred during the second quarter of 2016.

During the six months ended June 30, 2017, total shareholders’ equity increased $10.9 million, or 5.7%, to $203.6 million due primarily to earnings and additional paid in capital from the exercise of stock options offset by dividends of $1.8 million and changes in accumulated other comprehensive loss. Tangible book value per common share increased to $14.58 as of June 30, 2017, compared to $13.62 as of June 30, 2016. The Company remains "well-capitalized" under the regulatory framework.

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