MACON, Ga., July 25, 2007 (PRIME NEWSWIRE) -- Security Bank Corporation (Nasdaq:SBKC) today announced its financial results for the second quarter and six months ended June 30, 2007.
Summary
* Net income of $6.1 million for the second quarter was unchanged when compared to the second quarter of 2006 * Diluted earnings per share of $0.31 for the second quarter of the current year compared to $0.36 in the same quarter of 2006 * Net interest margin declined to 4.11% for the second quarter versus 4.22% for the first quarter * Sequential quarter loan growth of $77.3 million or approximately 15% on an annualized basis * Nonperforming assets increased to $54.7 million at the end of the second quarter from $42.5 million at end of the first quarter. However, we believe substantive progress has been made on NPA's after the end of the second quarter * Earnings guidance for 2007 lowered to a range of $1.31 to $1.35
Earnings Summary
Net income for the second quarter of 2007 was unchanged at $6.1 million, compared to the second quarter of 2006. Diluted earnings per share were $0.31 versus $0.36 for the same quarter of 2006, a decrease of 13.9%. The decrease in diluted earnings per share is primarily due to a lower net interest margin, a higher loan loss provision and higher collection expenses versus the second quarter of a year ago. For the six months ended June 30, 2007, net income increased 14.7% to $12.9 million compared to the same period of 2006, but on a diluted per share basis declined 7% to $0.66 per diluted share from the same period of 2006.
The Company's annualized returns on average tangible equity and average assets for the second quarter of 2007 were 13.42% and 0.97%, respectively, compared to 18.81% and 1.28%, respectively, for the second quarter of 2006. For the six months ended June 30, 2007, the annualized returns on average tangible equity and average assets were 14.57% and 1.05%, respectively, versus 19.30% and 1.26% for the same period in 2006.
Rett Walker, Security Bank Corporation President and CEO, remarked, "A weak housing market, in particular a housing market in Atlanta that we believe has dramatically weakened in the last 90 days, is creating strong earnings headwinds for us in the short run. What's critical for us during this challenging period is that we continue to take a long-term view of our business and run our community banking business accordingly every day."
Balance Sheet
Loans receivable were $2.1 billion at June 30, 2007, up from $1.5 billion at June 30, 2006, an increase of 40%. Excluding acquisitions, loans increased $357.3 million or 24% since June 30, 2006.
Total deposits were $2.2 billion at June 30, 2007, an increase of 37% from $1.6 billion at June 30, 2006. Excluding acquisitions, deposits increased $348.8 million or 22% since June 30, 2006. Total assets increased 35% to $2.7 billion at June 30, 2007, compared to $2.0 billion at June 30, 2006. Excluding acquisitions, total assets increased $389.3 million or 19.7%, compared to June 30, 2006.
Shareholders' equity increased $56.9 million to $314.7 million, an increase of 22% compared to June 30, 2006. The primary reason for the increase was common stock issued in the acquisition of Homestead Bank during the third quarter of 2006, which contributed approximately $37.5 million of the increase. The remaining increase of $19.4 million is primarily attributable to earnings, net of dividends paid.
Net Interest Income
Net interest income for the second quarter of 2007 was $23.4 million, an increase of 23% when compared to the second quarter of 2006. The increase is primarily the result of the continued growth in the Company's loan portfolio, both from organic growth and growth from acquisitions. The net interest margin (on a fully tax-equivalent basis ("FTE")) was 4.11% for the quarter ended June 30, 2007, compared to 4.52% for the comparable period one year ago and 4.22% for the first quarter of 2007. The decrease in the net interest margin in the second quarter of 2007 as compared to the first quarter of 2007 is the result of the increase in nonperforming assets (see "Asset Quality" section below) which reduced the margin by approximately 22 basis points as well as the aforementioned negative effects of loan pricing and fees. For the six months ended June 30, 2007, the net interest margin (FTE) was 4.16% compared to 4.53% for the six months ended June 30, 2006.
Noninterest Income and Expense
Noninterest income for the second quarter of 2007 was $4.6 million compared to the $4.9 million recognized during the second quarter of 2006. The decrease resulted from decreases in mortgage banking income and other noninterest income of $162,000 and $193,000, respectively.
Noninterest expense for the second quarter of 2007 was $16.4 million, an increase of 20% over the second quarter 2006 level of $13.6 million. The increase is primarily attributable to a $1.3 million increase in salaries and benefits, which is the direct result of the Company's organic growth and growth from the acquisition of Homestead Bank during 2006. Furthermore, the increase is related to increased costs with respect to foreclosed property expense ($532,000), director's fees ($177,000) and software amortization ($138,000). The remainder of the increase is spread over various expense categories.
Asset Quality
During the quarter ended June 30, 2007, the Company moved properties totaling approximately $15.8 million to other real estate owned. As a result, total nonperforming assets (nonaccrual loans and other real estate owned) at June 30, 2007 were $54.7 million, or 2.59% of total loans plus other real estate owned compared to 2.11% and 1.27% at the end of the first quarter of 2007 and the second quarter of 2006, respectively. In addition, the Company charged off approximately $1.3 million in loans receivable resulting in net charge-offs to average loans of 0.24% annualized for the second quarter of 2007. Net charge-offs to average loans was 0.10% annualized for the second quarter of 2006. For the first six months of 2007, net charge-offs to average loans were 0.14% on annualized basis. The allowance for loan losses was $24.1 million, or 1.15% of loans receivable at June 30, 2007, up from $18.2 million at June 30, 2006. The increase in the allowance for loan losses is primarily attributable to growth in the Company's loan portfolio and management's assessment of the current risks in the loan portfolio.
Rett Walker, President and CEO, commenting on the increase in nonperforming assets: "We are disappointed with the increase in nonperforming assets for the quarter, however we also recognize that residential construction and A&D activity is slowing dramatically, particularly in the Metro Atlanta market. Some of our builders and developers are feeling this slow down and as a result are not performing on their loans. While the current real estate environment has resulted in a net addition to the overall level of NPA's in the second quarter, we believe we are continuing to take appropriate action on problem credits and to recognize problems early. After quarter end and at the present time, we have entered into or are negotiating contracts to dispose of approximately $11 million of other real estate owned at what we believe to be a minimal loss."
2007 Earnings Guidance
Based on its current expectations, management is reducing its previously announced earnings guidance for 2007 from a range of $1.51 to $1.55 down to a range of $1.31 to $1.35. In reducing earnings guidance, management has modified its assumptions relating to the following factors:
* The net interest margin is projected to be in the range of 3.9% to 4.1% for the balance of 2007 versus the previous estimate of 4.1% to 4.3% due to competitive pricing pressures on loans and higher than previously anticipated nonperforming assets over the second half of the year * A reduction in the Company's projected loan growth over the second half of the year to a more sustainable range of 10% to 12% * Higher than originally estimated provision for loan losses due to higher than previously expected nonperforming assets. Net charge-offs for 2007 are expected to increase from our previous estimate of 14 basis points to 20 basis points
Rett Walker, commenting on the lowered earnings guidance remarked, "We are operating in a difficult period where the cyclical effects of a weak housing market are having a profound impact on our earnings in the short run. However, we will continue to manage our banking operations with a long-term perspective. Based on this long-term view we believe we have a dynamic and strong institution and believe that the combination of our state's strong demographics, our seasoned management team with incentive compensation tied to double digit EPS growth, our dedicated employees who are focused on customer service and our solid fundamental approach to the banking business all bode well for Security Bank's success over the long run."
Other Information
Security Bank Corporation management will host a conference call to discuss these results at 8:30 AM Eastern Daylight Time on Thursday, July 26, 2007. This call is open to all interested parties. From locations within the United States, the call-in number is 877-407-8031 (201-689-8031 from outside the United States). Please call in 10 minutes prior to the beginning of the conference call and ask for the Security Bank Corporation conference call.
A recorded playback of the conference call will be available by calling 877-660-6853, (201-612-7415 from outside the United States) from approximately 12:00 PM EDT, Thursday, July 26th, until 11:59 PM EDT Thursday, August 2, 2007. The reservation numbers for this playback are Account #286 and Conference ID # 246819.
This press release, including the attached selected unaudited financial tables, which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are "tangible book value", "return on average tangible equity", "net operating income", and "operating earnings per diluted share." Security Bank's management uses these non-GAAP measures in its analysis of Security Bank's performance.
Tangible book value is defined as total equity reduced by recorded intangible assets, net of related deferred tax benefits. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Security Bank that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Return on average tangible equity is defined as earnings for the period (annualized for the quarterly period or year-to-date period, as applicable) divided by average equity reduced by average goodwill and other intangible assets, net of related deferred tax benefits. Security Bank's management includes this measure because it believes that it is important when measuring the Company's performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and this measure is used by many investors as part of their analysis of Security Bank.
Further, Non-GAAP measures typically adjust GAAP performance measures to exclude the effects of significant gains, losses or expenses that are unusual in nature and not expected to recur. Other non-GAAP financial measures included in this release are referred to as "net operating income" and "operating earnings per diluted share", which exclude losses on the sale of investment securities and gains on the early prepayment of advances with the Federal Home Loan Bank. Since these items and their impact on the Company's performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of the Company's core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the "Reconciliation Table" in the attached schedules for a more detailed analysis of these non-GAAP performance measures and the most directly comparable GAAP measures.
About Security Bank Corporation
Based in Macon, Georgia, Security Bank Corporation is a multi-bank holding company with assets of $2.7 billion at June 30, 2007. Security Bank Corporation operates 6 community banks with banking offices located throughout middle Georgia, coastal Georgia and north metropolitan Atlanta. In addition, Security Bank Corporation operates an interim real estate and development lender and traditional mortgage originator, Fairfield Financial Services, Inc., with offices throughout Georgia.
Security Bank Corporation common stock is traded on the NASDAQ Global Select Market under the ticker symbol "SBKC."
You may obtain copies of all documents that Security Bank files with the Securities and Exchange Commission, free of charge, at the SEC's website at www.sec.gov. In addition, copies of these documents may also be obtained from us without charge by directing a written request to Security Bank Corporation, 4219 Forsyth Road, Macon, Georgia 31210, attention: Chief Financial Officer.
Safe Harbor
This press release contains forward-looking statements as defined by federal securities laws, including statements about Security Bank's earnings projections, its financial outlook and assumptions, the current business environment and real estate markets, the proposed closing of the First Commerce transaction, and Security Bank's long-term prospects, among others. Statements contained in this press release that are not historical facts are forward-looking statements. Forward-looking statements may address issues involving significant risks, uncertainties, estimates and assumptions made by management. Security Bank's ability to accurately project results or predict the effects of future plans or strategies is inherently limited. Although Security Bank believes that the expectations and estimates reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Please refer to Security Bank Corporation's public filings with the Securities and Exchange Commission for a summary of important factors that could affect Security Bank Corporation's financial results and operations and its forward-looking statements. Security Bank Corporation does not intend to and assumes no responsibility, except as required by law, for updating or revising any forward-looking statements contained in this press release, whether as a result of new information, changes in assumptions, future events or otherwise.
Security Bank Corporation
Selected Consolidated Financial Data
(Dollars in Thousands, except Per Share Amounts)
Unaudited
Quarters Ended Six Months Ended
June 30, June 30,
% %
2007 2006 Change 2007 2006 Change
---- ---- ------ ---- ---- ------
EARNINGS SUMMARY:
Net interest
income $23,383 $19,072 22.6% 46,160 35,785 29.0%
Provision for
Loan Losses 2,000 739 170.6% 3,260 1,369 138.1%
Noninterest
Income 4,603 4,917 -6.4% 9,725 9,834 -1.1%
Noninterest
Expense 16,397 13,614 20.4% 32,315 26,495 22.0%
Provision for
Income Taxes 3,489 3,546 -1.6% 7,424 6,525 13.8%
Net Income 6,100 6,090 0.2% 12,886 11,230 14.7%
PER COMMON SHARE:
Basic
earnings $ 0.32 $ 0.36 -11.1% $ 0.67 $ 0.72 -6.9%
Diluted
earnings 0.31 0.36 -13.9% 0.66 $ 0.71 -7.0%
Cash
dividends
declared 0.088 0.075 16.7% 0.18 0.15 16.7%
Book value 16.38 14.71 11.3% 16.38 14.71 11.3%
Tangible
book
value 9.54 8.66 10.2% 9.54 8.66 10.2%
KEY PERFORMANCE
RATIOS (a):
Return on
average
tangible
equity (b) 13.42% 18.81% 14.57% 19.30%
Return on
average
assets 0.97% 1.28% 1.05% 1.26%
Efficiency
ratio 58.59% 56.75% 57.82% 58.08%
Net interest
margin
(FTE) 4.11% 4.52% 4.16% 4.53%
Net charge-
offs to
average loans 0.24% 0.10% 0.15% 0.08%
BALANCE SHEET
SUMMARY - END
OF PERIOD
Investment
securities $ 219,185 $ 163,378 34.2%
Loans Held
for Resale 9,052 12,201 -25.8%
Loans, gross 2,094,254 1,500,963 39.5%
Allowance
for loan
losses 24,108 18,190 32.5%
Total assets 2,672,177 1,974,376 35.3%
Deposits 2,161,078 1,576,009 37.1%
Other
borrowed
money 177,873 132,495 34.2%
Shareholders'
equity 314,687 257,780 22.1%
ASSET QUALITY - END OF
PERIOD
Nonaccrual
loans $ 35,450 $ 17,269 105.3%
Loans 90
Days Past
Due and
Accruing -- -- 0.0%
Other real
estate
owned 19,229 1,817 958.3%
Total
nonper-
forming
assets 54,679 19,086 186.5%
Allowance
for loan
losses
/NPA's 44.09% 95.31%
Allowance
for loan
losses
/loans 1.15% 1.21%
(a) Annualized based on number of days in the period, except
efficiency ratio
(b) Calculation of this measure is illustrated in the attached GAAP
to non-GAAP reconciliation
Security Bank Corporation
Average Balance Sheet and Net Interest Income Analysis
(Dollars in Thousands)
Unaudited
Quarter Ended Six Months Ended
June 30, 2007 June 30, 2007
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
------- ------- ------ ------- ------- -----
ASSETS
Earning assets:
Interest-
bearing
deposits
and fed
funds sold $ 33,042 $ 431 5.23% $ 41,998 $ 1,105 5.31%
Investment
securities 195,031 2,538 5.22% 194,642 5,044 5.23%
Loans Held
for Resale 8,728 156 7.17% 6,654 229 6.94%
Loans 2,052,273 45,138 8.82% 2,001,849 88,006 8.87%
Other
earning
assets 1,238 24 7.78% 1,238 47 7.66%
Total
earning
assets 2,290,312 48,287 8.46% 2,246,381 94,431 8.48%
Non-earning
assets 238,830 239,095
------------ -----------
Total
assets $ 2,529,142 $ 2,485,476
============ ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Savings and
interest-
bearing
transaction $ 537,322 $ 4,837 3.61% $ 529,867 $ 9,436 3.59%
Time
deposits 1,350,602 17,923 5.32% 1,323,090 34,709 5.29%
Other
borrowings 135,959 2,032 5.99% 130,805 3,903 6.02%
Total
interest-
bearing
liabil-
ities 2,023,883 24,792 4.91% 1,983,762 48,048 4.88%
Noninterest-
bearing
liabilities:
Noninterest
bearing
deposits 168,589 166,931
Other
noninterest-
bearing
liabilities 22,793 23,485
Total
liabil-
ities $ 2,215,265 $ 2,174,178
------------ -----------
Shareholders'
Equity 313,877 311,298
------------ -----------
Total
liabilities
and
shareholders'
equity $ 2,529,142 $ 2,485,476
=========== ===========
Interest rate
spread 3.55% 3.60%
Net interest
income $ 23,495 $ 46,383
Net interest
margin (FTE) 4.11% 4.16%
Security Bank Corporation (SBKC)
Selected Financial Information
(Amounts in thousands, except per share data)
2007
-------------------------
2nd Quarter 1st Quarter
-------------------------
Period-End Balance Sheet
------------------------
Total Assets $2,672,177 $2,541,603
Total Securities 219,185 191,945
Mortgage Loans held for Sale 9,052 8,341
Loans:
Commercial:
Real-Estate (5) 843,477 932,971
Construction/A&D (5) 892,315 703,703
All Other 134,031 154,406
Residential:
Real-Estate 152,726 152,217
Construction/A&D 28,329 28,470
All Other 43,376 45,230
Total Loans 2,094,254 2,016,997
Allowance for loan losses 24,108 23,336
Other Assets:
Other earning assets: 84,060 78,319
Total Earning Assets: 2,406,551 2,295,602
Intangibles:
Goodwill 128,601 128,553
Core-Deposit 4,617 4,863
Deposits:
Demand Deposits 171,427 176,658
Interest bearing deposits 1,989,651 1,842,431
Total Deposits 2,161,078 2,019,089
Fed Funds purchased
& repo agreements 58,985 59,065
Other borrowed funds 118,888 129,888
Common Equity 314,687 311,729
=====================================================================
Average Balance Sheet
---------------------
Total Assets $2,529,142 $2,441,326
Total Securities 195,031 194,248
Mortgage Loans held for Sale 8,728 4,557
Loans:
Commercial:
Real-Estate 890,191 937,948
Construction/A&D 781,274 627,003
Other 152,784 156,406
Residential:
Real-Estate 152,519 151,018
Construction/A&D 28,848 29,134
Other 46,657 49,355
Total Loans 2,052,273 1,950,864
Other assets:
Other earning assets: 34,280 52,292
Total Earning Assets: 2,290,312 2,201,961
Deposits:
Demand Deposits 168,589 165,255
Interest bearing deposits
Savings 16,810 16,612
NOW 375,605 367,657
Money Market 144,907 138,060
Time deposits greater than $100,000 833,758 779,136
Time deposits less than $100,000 516,844 516,137
Total Deposits 2,056,513 1,982,857
Fed Funds purchased
& repo agreements 43,682 34,158
Other borrowed funds 92,277 91,436
Common Equity 313,877 308,691
=====================================================================
Income Statement
----------------
Interest Income $ 48,175 $ 46,033
Interest Expense 24,792 23,256
Net Interest Income 23,383 22,777
Loan loss provision 2,000 1,260
Service charges on deposit accounts 2,376 2,098
Mortgage banking revenues 1,271 1,039
Securities Gains (Losses) -- 2
Other income 956 1,983
Total noninterest income 4,603 5,122
Salaries and benefits 9,094 9,551
Occupancy and equipment 1,547 1,488
Other noninterest expense 5,756 4,879
Total noninterest expense 16,397 15,918
Pre-tax earnings 9,589 10,721
Income Taxes 3,489 3,935
Net income $ 6,100 $ 6,786
Basic earnings per share (3) $ 0.32 $ 0.35
Diluted earnings per share (3) 0.31 0.35
Operating diluted earnings per
share (3), (4) 0.31 0.35
End of period shares outstanding (3) 19,212,139 19,181,241
Weighted average diluted
shares o/s (3) 19,463,979 19,456,857
Tax equivalent adjustment 112 111
Net interest income (FTE) 23,495 22,888
Effective Tax Rate 36.39% 36.70%
=====================================================================
Stock and related per share data: (3)
-------------------------------------
Book value $ 16.38 $ 16.25
Tangible book value 9.54 9.39
Dividends declared per share 0.0875 0.0875
=====================================================================
Other Key Ratios/Data:
----------------------
Return on average tangible
equity (2), (4) 13.42% 15.78%
Return on average assets (2) 0.97% 1.13%
Net interest margin (FTE) (2) 4.11% 4.22%
Efficiency ratio (FTE) 58.36% 56.83%
Tangible Equity/Tangible Assets (4) 7.21% 7.48%
=====================================================================
Loan Performance Data:
----------------------
Nonaccrual loans $ 35,450 $ 39,139
Loans 90 Days Past Due and Accruing -- --
Other real estate owned (ORE) 19,229 3,403
Total nonperforming assets 54,679 42,542
Net charge-offs 1,228 260
Allowance for loan losses/NPA's 44.09% 54.85%
Allowance for loan losses/loans 1.15% 1.16%
NPA's/Loans plus ORE 2.59% 2.11%
Nonperforming assets/total assets 2.05% 1.67%
Net charge-offs to average loans (1) 0.24% 0.05%
=====================================================================
2006
----------------------------------------------------------
Dec. 31/ 4th 3rd 2nd 1st
YTD Quarter Quarter Quarter Quarter
----------------------------------------------------------
Period-End
Balance Sheet
-------------
Total
Assets $2,494,071 $2,494,071 $2,314,913 $1,974,376 $1,912,841
Total
Securities 229,940 229,940 211,005 163,378 146,932
Mortgage
Loans held
for Sale 8,878 8,878 8,947 12,201 7,776
Loans:
Commercial:
Real-
Estate(5) 916,919 916,919 884,417 705,072 699,215
Construc-
tion/A&D
(5) 602,712 602,712 553,296 460,131 430,585
All Other 152,289 152,289 125,468 115,968 103,396
Residential:
Real-
Estate 150,398 150,398 151,559 151,633 155,031
Construc-
tion/A&D 30,262 30,262 30,332 32,057 30,376
All Other 48,521 48,521 45,892 36,102 51,089
Total
Loans 1,901,101 1,901,101 1,790,964 1,500,963 1,469,692
Allowance
for loan
losses 22,336 22,336 21,477 18,190 17,812
Other
Assets:
Other
earning
assets: 97,808 97,808 49,612 82,265 78,567
Total
Earning
Assets: 2,237,727 2,237,727 2,060,528 1,758,807 1,702,967
Intangibles:
Goodwill 127,984 127,984 131,162 103,014 102,659
Core-Deposit 5,110 5,110 5,356 4,907 5,129
Deposits:
Demand
Deposits 178,967 178,967 173,129 172,023 168,235
Interest
bearing
deposits 1,791,960 1,791,960 1,659,876 1,403,986 1,362,149
Total De-
posits 1,970,927 1,970,927 1,833,005 1,576,009 1,530,384
Fed Funds
purchased
& repo
agreements 50,917 50,917 35,819 20,030 18,271
Other
borrowed
funds 124,688 124,688 123,988 112,465 125,665
Common
Equity 306,408 306,408 302,273 257,780 217,641
=====================================================================
Average
Balance Sheet
-------------
Total
Assets $2,028,906 $2,368,642 $2,157,297 $1,906,800 $1,673,006
Total
Securities 173,665 216,433 183,291 151,542 142,473
Mortgage
Loans held
for Sale 6,576 6,064 7,015 8,011 5,200
Loans:
Commercial:
Real-
Estate 760,925 894,885 818,912 701,309 624,990
Construc-
tion/A&D 490,964 600,693 524,265 450,386 385,784
Other 116,591 136,109 122,750 109,873 93,284
Residential:
Real-
Estate 153,480 151,938 151,332 153,272 157,463
Construc-
tion/A&D 27,767 29,520 30,658 30,279 20,480
Other 49,781 51,282 49,191 49,693 52,788
Total
Loans 1,599,508 1,864,427 1,697,108 1,494,812 1,334,789
Other
Assets:
Other
earning
assets: 35,756 37,051 39,313 45,829 20,624
Total
Earning
Assets: 1,815,505 2,123,975 1,926,727 1,700,194 1,503,086
Deposits:
Demand
Deposits 166,190 169,410 172,393 166,941 155,181
Interest
bearing
deposits
Savings 19,268 17,085 18,645 20,359 21,036
NOW 310,624 358,114 335,152 307,630 240,033
Money
Market 127,456 146,241 132,302 103,540 127,480
Time
deposits
greater
than
$100K 571,992 688,977 608,483 542,530 445,970
Time
deposits
less than
$100K 423,708 506,804 471,973 386,389 325,379
Total De-
posits 1,619,238 1,886,631 1,738,948 1,527,389 1,315,079
Fed Funds
purchased
& repo
agreements 29,874 45,112 26,036 23,230 24,608
Other
borrowed
funds 108,997 108,338 89,927 102,493 136,740
Common
Equity 252,004 304,362 283,937 235,731 182,219
=====================================================================
Income Statement
----------------
Interest
Income $ 148,081 $ 44,415 $ 40,669 $ 34,214 $ 28,783
Interest
Expense 68,647 22,353 19,082 15,142 12,070
Net Interest
Income 79,434 22,062 21,587 19,072 16,713
Loan loss
provision 4,468 1,873 1,226 739 630
Service
charges on
deposit
accounts 9,162 2,336 2,387 2,335 2,104
Mortgage
banking
revenues 4,922 1,007 1,231 1,433 1,251
Securities
Gains
(Losses) (1,601) (1,331) (270) -- --
Other income 5,423 1,074 1,638 1,149 1,562
Total non-
interest
income 17,906 3,086 4,986 4,917 4,917
Salaries and
benefits 32,376 8,313 8,497 7,804 7,762
Occupancy
and equip-
ment 5,622 1,471 1,396 1,459 1,296
Other non-
interest
expense 17,604 4,891 4,539 4,351 3,823
Total non-
interest
expense 55,602 14,675 14,432 13,614 12,881
Pre-tax
earnings 37,270 8,600 10,915 9,636 8,119
Income Taxes 13,878 3,378 3,975 3,546 2,979
Net
income $ 23,392 $ 5,222 $ 6,940 $ 6,090 $ 5,140
Basic
earnings
per share
(3) $ 1.36 $ 0.26 $ 0.38 $ 0.36 $ 0.36
Diluted
earnings per
share (3) 1.33 0.26 0.37 0.36 0.35
Operating
diluted
earnings
per share
(3), (4) 1.38 0.31 0.37 0.36 0.35
End of
period
shares out-
standing
(3) 19,166,314 19,166,314 19,161,507 17,519,112 15,782,125
Weighted
average
diluted
shares
o/s (3) 17,564,990 19,528,891 18,971,126 16,910,380 14,784,856
Tax
equivalent
adjustment 414 106 107 100 101
Net interest
income
(FTE) 79,848 22,168 21,694 19,172 16,814
Effective
Tax Rate 37.24% 39.28% 36.42% 36.80% 36.69%
=====================================================================
Stock and
related per
share data: (3)
---------------
Book value $ 15.99 $ 15.99 $ 15.78 $ 14.71 $ 13.79
Tangible
book value 8.99 8.99 8.76 8.66 7.08
Dividends
declared
per share 0.30 0.0750 0.075 0.075 0.075
=====================================================================
Other Key
Ratios/Data:
------------
Return on
average
tangible
equity (2),
(4) 16.53% 12.19% 17.13% 18.81% 19.92%
Return on
average
assets (2) 1.15% 0.87% 1.28% 1.28% 1.25%
Net interest
margin
(FTE) (2) 4.40% 4.14% 4.47% 4.52% 4.54%
Efficiency
ratio (FTE) 56.88% 58.11% 54.09% 56.51% 59.27%
Tangible
Equity/Tan-
gible
Assets (4) 7.42% 7.42% 7.70% 8.12% 6.19%
=====================================================================
Loan
Performance Data:
-----------------
Nonaccrual
loans $ 34,401 $ 34,401 $ 16,946 $ 17,269 $ 8,171
Loans 90
Days Past
Due and
Accruing -- -- -- -- --
Other real
estate
owned (ORE) 2,775 2,775 1,867 1,817 2,488
Total non-
performing
assets 37,176 37,176 18,813 19,086 10,659
Net charge-
offs 2,362 1,014 789 361 198
Allowance
for loan
losses/NPAs 60.08% 60.08% 114.16% 95.31% 167.11%
Allowance for
loan losses/
loans 1.18% 1.18% 1.20% 1.21% 1.21%
NPAs/Loans
plus ORE 1.95% 1.95% 1.05% 1.27% 0.72%
Nonperforming
assets/total
assets 1.49% 1.49% 0.81% 0.97% 0.56%
Net charge-
offs to
average
loans (1) 0.15% 0.22% 0.18% 0.10% 0.06%
=====================================================================
2005
-------------------------------------------------
YTD 4th Quarter 3rd Quarter 2nd Quarter
-------------------------------------------------
Period-End
Balance Sheet
------------------
Total Assets $1,662,413 $1,662,413 $1,345,566 $1,329,629
Total Securities 150,986 150,986 121,374 122,763
Mortgage Loans held
for Sale 5,562 5,562 9,372 7,413
Loans:
Commercial:
Real-Estate (5) 609,010 609,010 418,020 423,720
Construction/
A&D (5) 334,114 334,114 316,701 309,270
All Other 95,688 95,688 137,879 126,290
Residential:
Real-Estate 163,874 163,874 118,679 116,119
Construction/A&D 19,750 19,750 19,371 20,041
All Other 49,683 49,683 53,420 46,285
Total Loans 1,272,119 1,272,119 1,064,070 1,041,725
Allowance for
loan losses 16,148 16,148 13,628 13,264
Other Assets:
Other earning
assets: 41,330 41,330 23,928 45,141
Total Earning
Assets: 1,469,997 1,469,997 1,218,744 1,217,042
Intangibles:
Goodwill 74,582 74,582 49,677 50,507
Core-Deposit 4,687 4,687 1,498 1,580
Deposits:
Demand Deposits 156,698 156,698 137,295 121,600
Interest bearing
deposits 1,134,555 1,134,555 949,084 952,487
Total Deposits 1,291,253 1,291,253 1,086,379 1,074,087
Fed Funds purchased
& repo agreements 43,876 43,876 10,052 5,714
Other borrowed funds 128,265 128,265 100,207 94,007
Common Equity 179,305 179,305 140,408 137,019
=====================================================================
Average Balance Sheet
---------------------
Total Assets $1,238,033 $1,353,208 $1,326,590 $1,184,441
Total Securities 116,110 117,857 123,002 115,694
Mortgage Loans held
for Sale 6,726 6,754 8,769 6,132
Loans:
Commercial:
Real-Estate 432,199 472,728 423,215 420,250
Construction/A&D 284,620 331,779 319,456 270,505
Other 99,034 102,402 134,147 87,386
Residential:
Real-Estate 116,890 119,560 117,944 115,347
Construction/A&D 18,883 19,189 19,539 18,662
Other 45,900 45,985 50,465 44,783
Total Loans 997,526 1,091,643 1,064,766 956,933
Other Assets:
Other earning
assets: 16,840 17,800 17,327 18,467
Total Earning
Assets: 1,137,202 1,234,054 1,213,864 1,097,226
Deposits:
Demand Deposits 119,867 131,616 122,600 116,899
Interest bearing
deposits
Savings 19,969 18,648 19,646 20,821
NOW 158,264 198,465 175,373 141,396
Money Market 80,640 78,800 83,961 81,233
Time deposits
greater than
$100,000 317,143 355,908 349,889 304,208
Time deposits
less than
$100,000 305,609 312,576 324,000 298,644
Total Deposits 1,001,492 1,096,013 1,075,469 963,201
Fed Funds purchased
& repo agreements 16,295 19,704 12,224 15,899
Other borrowed funds 83,754 86,260 89,601 76,511
Common Equity 126,461 141,576 138,246 118,365
=====================================================================
Income Statement
----------------
Interest Income $ 78,192 $ 22,860 $ 21,444 $ 18,023
Interest Expense 27,839 8,864 7,976 6,162
Net Interest Income 50,353 13,996 13,468 11,861
Loan loss provision 2,833 630 624 804
Service charges on
deposit accounts 7,351 1,940 1,956 1,858
Mortgage banking
revenues 4,539 1,040 1,333 1,207
Securities Gains
(Losses) (6) -- -- --
Other income 4,719 1,117 1,121 1,517
Total noninterest
income 16,603 4,097 4,410 4,582
Salaries and benefits 22,811 6,044 6,115 5,598
Occupancy and
equipment 3,785 1,048 985 906
Other noninterest
expense 12,032 3,485 3,156 2,828
Total noninterest
expense 38,628 10,577 10,256 9,332
Pre-tax earnings 25,495 6,886 6,998 6,307
Income Taxes 9,310 2,507 2,509 2,397
Net income $ 16,185 $ 4,379 $ 4,489 $ 3,910
Basic earnings per
share (3) $ 1.31 $ 0.34 $ 0.36 $ 0.32
Diluted earnings
per share (3) 1.27 0.33 0.33 0.32
Operating diluted
earnings per
share (3), (4) 1.27 0.33 0.33 0.32
End of period
shares out-
standing (3) 14,386,960 14,386,960 12,911,550 12,851,640
Weighted average
diluted shares
o/s (3) 12,736,544 13,316,163 13,218,030 12,374,075
Tax equivalent
adjustment 324 81 79 82
Net interest
income (FTE) 50,677 14,077 13,547 11,943
Effective Tax Rate 36.52% 36.41% 35.85% 38.00%
=====================================================================
Stock and related
per share data: (3)
-------------------
Book value $ 12.46 $ 12.46 $ 10.87 $ 10.66
Tangible book value 7.08 7.08 6.94 6.65
Dividends declared
per share 0.26 0.065 0.065 0.065
=====================================================================
Other Key Ratios/Data:
---------------------
Return on average
tangible equity
(2), (4) 19.30% 19.15% 20.46% 19.64%
Return on average
assets (2) 1.31% 1.28% 1.34% 1.32%
Net interest margin
(FTE) (2) 4.46% 4.53% 4.43% 4.37%
Efficiency ratio
(FTE) 57.42% 58.20% 57.11% 56.47%
Tangible Equity/
Tangible Assets (4) 6.42% 6.42% 6.93% 6.69%
=====================================================================
Loan Performance Data:
Nonaccrual loans $ 6,997 $ 6,997 $ 5,746 $ 5,200
Loans 90 Days Past
Due and Accruing -- -- -- 59
Other real estate
owned (ORE) 2,394 2,394 1,722 1,467
Total nonper-
forming assets 9,391 9,391 7,468 6,726
Net charge-offs 1,219 321 260 317
Allowance for loan
losses/NPAs 171.95% 171.95% 182.49% 197.20%
Allowance for loan
losses/loans 1.27% 1.27% 1.28% 1.27%
NPA's/Loans plus ORE 0.74% 0.74% 0.70% 0.64%
Nonperforming assets/
total assets 0.56% 0.56% 0.56% 0.51%
Net charge-offs to
average loans (1) 0.12% 0.12% 0.10% 0.13%
=====================================================================
(1) Annualized
(2) The actual number of days in the period were used to annualize
income
(3) Adjusted for 2-for-1 stock split effective May 27, 2005
(4) Calculation of this measure is illustrated in the attached GAAP
to non-GAAP reconciliation
(5) During quarter ended 6/30/07, certain loans were reclassified
between these two categories and thus the resulting quarterly
change is not meaningful
2007
--------------------------
2nd Quarter 1st Quarter
----------- -----------
Reconciliation Table- GAAP to non-GAAP:
--------------------------------------
Book Value per share $ 16.38 $ 16.25
Effect of intangible assets per share (6.84) (6.86)
Tangible book value $ 9.54 $ 9.39
Equity $ 314,687 $ 311,729
Intangible assets 133,218 133,416
Less tax effect of Core-Deposit
Intangible (38%) (1,754) (1,848)
Tangible equity $ 183,223 $ 180,161
Assets $2,672,177 $2,541,603
Intangible assets 131,464 131,568
Tangible assets $2,540,713 $2,410,035
Equity/Assets 11.78% 12.27%
Effect of intangible assets -4.57% -4.79%
Tangible Equity/Tangible Assets 7.21% 7.48%
Average Equity $ 313,877 $ 308,691
Average Intangible assets 133,363 136,228
Less tax effect of Core-Deposit
Intangible (38%) (1,813) (1,896)
Average tangible equity $ 182,327 $ 174,359
Net Income (a) $ 24,467 $ 27,521
Return on average tangible equity 13.42% 15.78%
Diluted earnings per share $ 0.31 $ 0.35
Effect of securities (gains) losses,
net of tax -- --
Effect of prepayment of FHLB advances,
net of tax -- --
Diluted operating earnings per share $ 0.31 $ 0.35
Net income $ 6,100 $ 6,786
Effect of securities (gains) losses,
net of tax -- (1)
Effect of prepayment of FHLB advances,
net of tax -- --
Net operating income $ 6,100 $ 6,785
2006
----------------------------------------------------------
Dec 31/ 4th 3rd 2nd 1st
YTD Quarter Quarter Quarter Quarter
---------- ---------- ---------- ---------- ----------
Reconciliation
Table- GAAP
to non-GAAP:
--------------
Book Value
per
share $ 15.99 $ 15.99 $ 15.78 $ 14.71 $ 13.79
Effect of
intangible
assets per
share (7.00) (7.00) (7.02) (6.05) (6.71)
Tangible
book
value $ 8.99 $ 8.99 $ 8.76 $ 8.66 $ 7.08
Equity $ 306,408 $ 306,408 $ 302,273 $ 257,780 $ 217,641
Intangible
assets 133,094 133,094 136,518 107,921 107,788
Less tax
effect of
Core-Deposit
Intangible
(38%) (1,942) (1,942) (2,035) (1,865) (1,949)
Tangible
equity $ 175,256 $ 175,256 $ 167,790 $ 151,724 $ 111,802
Assets $2,494,071 $2,494,071 $2,314,913 $1,974,376 $1,912,841
Intangible
assets 131,152 131,152 134,483 106,056 105,839
Tangible
assets $2,362,919 $2,362,919 $2,180,430 $1,868,320 $1,807,002
Equity/Assets 12.29% 12.29% 13.06% 13.06% 11.38%
Effect of
intangible
assets -4.87% -4.87% -5.36% -4.94% -5.19%
Tangible
Equity/Tan-
gible Assets 7.42% 7.42% 7.70% 8.12% 6.19%
Average
Equity $ 252,004 $ 304,362 $ 283,937 $ 235,731 $ 182,219
Average
Intangible
assets 112,385 136,443 125,227 107,763 79,313
Less tax
effect of
Core-Deposit
Intangible
(38%) (1,921) (2,001) (2,006) (1,918) (1,754)
Average
tangible
equity $ 141,540 $ 169,920 $ 160,716 $ 129,886 $ 104,660
Net Income
(a) $ 23,392 $ 20,718 $ 27,534 $ 24,427 $ 20,846
Return on
average
tangible
equity 16.53% 12.19% 17.13% 18.81% 19.92%
Diluted
earnings per
share $ 1.33 $ 0.26 $ 0.37 $ 0.36 $ 0.35
Effect of
securities
(gains)
losses, net
of tax 0.06 0.05 0.01 -- --
Effect of
prepayment
of FHLB
advances,
net of tax (0.01) -- (0.01) -- --
Diluted
operating
earnings per
share $ 1.38 $ 0.31 $ 0.37 $ 0.36 $ 0.35
Net
income $ 23,392 $ 5,222 $ 6,940 $ 6,090 $ 5,140
Effect of
securities
(gains)
losses, net
of tax 980 808 172 -- --
Effect of
prepayment
of FHLB
advances,
net of tax (174) -- (174) -- --
Net operating
income $ 24,198 $ 6,030 $ 6,938 $ 6,090 $ 5,140
2005
----------------------------------------------------
Dec 31/YTD 4th Quarter 3rd Quarter 2nd Quarter
---------- ----------- ----------- -----------
Reconciliation Table-
GAAP to non-GAAP:
---------------------
Book Value per
share $ 12.46 $ 12.46 $ 10.87 $ 10.66
Effect of intan-
gible assets per
share (5.38) (5.39) (3.93) (4.01)
Tangible book
value $ 7.08 $ 7.08 $ 6.94 $ 6.65
Equity $ 179,305 $ 179,305 $ 140,408 $ 137,019
Intangible assets 79,269 79,269 51,175 52,087
Less tax effect
of Core-Deposit
Intangible (38%) (1,781) (1,781) (569) (600)
Tangible equity $ 101,817 $ 101,817 $ 89,802 $ 85,532
Assets $1,662,413 $1,662,413 $1,345,566 $1,329,629
Intangible assets 77,488 77,488 50,606 51,487
Tangible assets $1,584,925 $1,584,925 $1,294,960 $1,278,142
Equity/Assets 10.79% 10.79% 10.43% 10.31%
Effect of intan-
gible assets -4.36% -4.36% -3.50% -3.61%
Tangible Equity/
Tangible Assets 6.42% 6.42% 6.93% 6.69%
Average Equity $ 126,461 $ 141,576 $ 138,246 $ 118,365
Average Intangible
assets 43,025 51,446 51,782 38,851
Less tax effect of
Core-Deposit
Intangible (38%) (429) (571) (587) (337)
Average tangible
equity $ 83,865 $ 90,701 $ 87,051 $ 79,851
Net Income (a) $ 16,185 $ 17,373 $ 17,810 $ 15,685
Return on average
tangible equity 19.30% 19.15% 20.46% 19.64%
Diluted earnings
per share $ 1.27 $ 0.33 $ 0.33 $ 0.32
Effect of
securities (gains)
losses, net of tax -- -- -- --
Effect of prepay-
ment of FHLB
advances, net of
tax -- -- -- --
Diluted operating
earnings per
share $ 1.27 $ 0.33 $ 0.33 $ 0.32
Net income $ 16,185 $ 4,379 $ 4,489 $ 3,910
Effect of
securities (gains)
losses, net of
tax 4 -- -- --
Effect of prepay-
ment of FHLB
advances, net of
tax -- -- -- --
Net operating
income $ 16,189 $ 4,379 $ 4,489 $ 3,910
(a) The actual number of days in the period were used to annualize
income