EVERETT, Wash., July 22, 2008 (PRIME NEWSWIRE) -- Cascade Financial Corporation (Nasdaq:CASB), parent company of Cascade Bank, today reported it earned $3.6 million, or $0.30 per diluted share, in the second quarter of 2008, compared to record earnings of $4.0 million, or $0.32 per diluted share in the second quarter a year ago. For the first six months of 2008 net income was $6.2 million, or $0.51 per diluted share, compared to $7.7 million, or $0.63 per diluted share, in the first six months of 2007. Second quarter results include a $1.2 million loan loss provision compared to $250,000 for the same quarter last year. The loan loss provision for the first six months of the year was $3.6 million versus $500,000 in the first half of 2007. This provision reflects an increase in nonperforming loans and the general slowdown in the local housing market.
"Our second quarter results were solid as we continue to strengthen our franchise. Loan and deposit totals hit record levels. The strong growth in checking account balances, 20% year-over-year and 12% over the prior quarter, was particularly gratifying," stated Carol K. Nelson, President and CEO. "However, the quarterly operating results were below the record setting earnings from the second quarter a year ago due to the addition to the provision for loan losses. Despite the increase in the loan loss provision, Cascade is well positioned to pursue its strategies through this challenging economic environment."
Nonperforming loans (NPLs) increased by $14.8 million during the quarter to $32.0 million and represented 2.68% of total loans at June 30, 2008, compared to 1.50% three months earlier and 0.09% a year ago. NPLs were $17.3 million at the end of the preceding quarter and $955,000 at the end of June 2007. The increase in nonperforming loans during the quarter consisted of seven loans to five borrowers, all secured by real estate. See Subsequent Event for details on a reduction in nonperforming loans that occurred following the end of the quarter.
Net charge-offs (NCOs) were $448,000 or four basis points of total loans during the quarter compared to $1.5 million, or 13 basis points, in the first quarter of 2008 and $75,000, or one basis point, in the second quarter of 2007.
2Q08 Financial Highlights: (compared to 2Q07)
* Total loans increased 17% to $1.19 billion.
* Total deposits grew 10% to $991 million.
* Personal checking account balances grew 27%.
* Business checking account balances grew 14%.
* Strong growth in new checking accounts resulted in 33% growth in
checking fees.
* Total assets increased 15% to $1.55 billion.
Loan Growth
Compared to a year ago, total loans increased 17% to $1.19 billion at the end of the quarter, from $1.02 billion at June 30, 2007.
Construction loans outstanding grew 21% to $392 million at June 30, 2008, compared to $323 million a year ago. Business loans increased 7% over the same period to $487 million. Commercial real estate loans increased 6% to $117 million. Permanent multifamily loans increased substantially from year ago levels to $64 million, partly as a result of the reclassifications noted below. Home equity and consumer loans increased 6% to $29 million, while residential loans grew 14% to $106 million.
Cascade has not engaged in the practice of subprime residential lending and the loan portfolio does not contain any such loans.
"While we have greatly curtailed our construction and land development lending, the balances have grown on a year over year basis as construction draws have continued to exceed payoffs," said Lars Johnson, Chief Financial Officer.
Total loans outstanding increased $42 million for the quarter ended June 30, 2008, or 14% on an annualized basis. Construction loans were down $19 million from March 31, 2008. Construction loans totaling $42 million were transferred to other loan categories during the quarter as the construction phase was completed and reached the requisite level of occupancy. These transfers included $33 million to multi-family, $5 million to commercial real estate and $4 million to residential real estate.
The following table shows loans in each category: (6/30/08 compared to 3/31/08 and 6/30/07)
One Year
LOANS ($ in 000s) June 30, March 31, June 30, Change
2008 2008 2007
Business $ 486,876 $ 469,940 $ 453,186 7%
R/E Construction 391,765 411,189 323,417 21%
Commercial R/E 117,043 115,087 110,561 6%
Multifamily 63,905 26,964 12,727 402%
Home equity/consumer 29,250 28,143 27,545 6%
Residential 106,043 101,767 92,667 14%
---------- ---------- ---------- ----
Total loans $1,194,882 $1,153,090 $1,020,103 17%
Loan growth contributed to a 15% increase in total assets to $1.55 billion. The investment portfolio increased 26% to $273 million at June 30, 2008, compared to a year ago, as Cascade sought to take advantage of increased credit spreads available on investment securities. The investment portfolio contains no collateralized debt obligations or other securities secured by subprime loans.
Credit Quality
"Like most of our peers, we have seen a significant increase in our nonperforming loans due to the slowdown in the local real estate market. While we are disappointed by these additions to our nonperforming loans, we are diligently managing and monitoring these credits to mitigate the ultimate loss to the Bank," said Robert Disotell, Chief Credit Officer.
Nonperforming assets were 2.07% of total assets, compared to 1.16% at the end of the preceding quarter, and 0.07% a year ago. The provision for loan losses at $1.2 million exceeded NCOs by $752,000 for the second quarter. Of the $448,000 in charge-offs, $117,000 came from the loss on the liquidation of inventory on a business loan, $200,000 came from a partial write-off of a construction loan, and the balance from consumer and deposit related charge-offs, e.g. overdrafts. Total allowance for loan losses, which includes an allowance for off-balance sheet loan commitments, totaled $13.4 million at quarter-end, equal to 1.12% of total loans compared to 1.10% at March 31, 2008 and 1.11% as of June 30, 2007.
Loans delinquent 31-90 days were 10 basis points of total loans as of June 30, 2008, compared to 27 basis points as of March 31, 2008. All loans over 90 days delinquent are on non-accrual status.
"We continue to monitor our entire loan portfolio, but especially our construction portfolio in an attempt to spot and act upon deteriorating credits in a timely manner," said Disotell. "While we have not taken the very large reserves and charge-offs as some of our peers have, we feel our allowance is adequate given our analysis of our portfolio and current market conditions."
Deposit Growth
"Our continued marketing and sales management efforts directed at core deposit products has resulted in dramatic growth in our DDA balances, which grew by $28 million year-over-year and almost $18 million on a sequential quarter basis," said Nelson. "We increased our personal checking account balances 27% over the past twelve months, and our business account balances grew by 14%. Additionally, we had a 33% increase in checking account fees in the second quarter compared to the same period last year."
Total deposits were $991 million at quarter-end, up 10% from $898 million a year earlier.
The following table shows deposits in each category: (6/30/08 compared to 3/31/08 and 6/30/07)
June 30, March 31, June 30, One Year
DEPOSITS ($ in 000s) 2008 2008 2007 Change
Personal checking accounts $ 77,591 $ 64,827 $ 61,125 27%
Business checking accounts 89,071 84,247 77,810 14%
Savings and MMDA 340,911 358,646 301,923 13%
CDs 482,988 443,755 457,050 6%
-------- -------- -------- ------
Total deposits $990,561 $951,475 $897,908 10%
Capital Position
Cascade remains well capitalized for regulatory purposes with a Tier 1 Capital ratio of 8.41%, as of June 30, 2008. Stockholders' GAAP equity increased 9% to $126 million, compared to $116 million at the end of June 2007. Book value per share grew to $10.43 at quarter-end from $9.63 a year ago. Tangible book value was $8.34 per share at the end of the quarter, compared to $7.52 a year earlier.
No Cascade stock was repurchased during the first half of 2008, under Cascade's existing repurchase plan. Since May 31, 2007, Cascade has repurchased 52,293 shares, or 14% of the amount of stock permitted under the plan. The repurchased shares represent 0.4% of the total stock outstanding. To preserve capital, Cascade has no plans to repurchase stock in the near future.
Operating Results
Second quarter net income was down by 9% from the second quarter of 2007 to $3.6 million. Results were hampered by an increase of $950,000 in the provision for loan losses. Net interest income for the second quarter increased 4% to $11.4 million, compared to $11.0 million for the second quarter of 2007. Total other income increased 21% to $2.2 million for the quarter, compared to $1.8 million in the second quarter a year ago. The increase was primarily due to the 33% increase in checking fees resulting from growth in the number of new accounts, and increased activity fees. Total other expenses were up 11% to $7.3 million in the second quarter of 2008, compared to $6.5 million in the same quarter last year. A major source of the increase was FDIC deposit insurance premiums. "We began paying FDIC insurance premiums during the second quarter of 2008, which contributed to a $148,000 increase in second quarter expenses," said Johnson. "Previously, we had received a credit against our insurance assessment based upon premiums that we had paid over 10 years ago."
For the first six months of 2008, the $3.1 million increase in the provision for loan losses led to a 19% decline in net income from 2007 levels to $6.2 million. The amount of net interest income increased 3% to $21.9 million during the first half of 2008 compared to $21.3 million in the first half of 2007. An increase in earning assets offset the decline in net interest margin. Other income increased 20% to $4.7 million for the first half of 2008 compared to $3.9 million in the first half of 2007, largely due to the 26% growth in checking fees for the first half of the year and the income from Bank owned life insurance (BOLI) income as Cascade added $5 million of BOLI in December 2007 and transferred the majority of the existing policies to a new, higher yielding structure. In terms of earnings comparisons, the gain on the sale of securities of $483,000 in the first half of the year offset the net gains from the implementation of FAS 159 in the first half of 2007. For the first six months of 2008, total other expenses increased 9% to $14.2 million compared to $13.0 million in the first half of 2007. The increase was largely due to additional expenses related to the Burlington and Shoreline branches during the first half of 2008.
Cascade's respective profit after tax numbers were impacted by the effective tax rate. In the second quarter of 2008, the tax rate was 30% compared to 34% in the second quarter of 2007, and 27% in the first quarter of 2008. The tax rate in 2008 has been lower due to increased tax credits generated by CRA investments in low income housing, higher balances of BOLI which increased tax exempt BOLI income, and an investment of $20 million in preferred stocks, whose dividends are eligible for a 70% dividend exclusion from federal income tax.
Net Interest Margin & Interest Rate Risk
Cascade's net interest margin was 3.17% for the second quarter of 2008, compared to 3.37% in the second quarter a year ago. "Of the 20 basis point drop in the margin on a year over year basis, 16 basis points can be attributed to the reversal of accrued interest on and the drag from nonperforming loans," said Johnson. "Our yield on loans decreased 141 basis points compared to a year earlier, as the Federal Reserve lowered the target Fed funds rate by 325 basis points in the past 15 months, taking the Prime rate and the yield on our approximately $400 million of Prime-based loans down with it. The result was the yield on all earning assets decreased by 99 basis points but our cost of funds decreased by 88 basis points from the second quarter 2007 to the second quarter of 2008. However, our deposit costs decreased 133 basis points from the year over year quarter while our cost of FHLB advances declined only 14 basis points." For the first half of 2008 the net interest margin was 3.09% compared to 3.32% in the first half of 2007.
2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06
-----------------------------------------------------
Asset yield 6.31% 6.62% 7.20% 7.29% 7.30% 7.17% 7.03% 6.95% 6.76%
Liability
cost 3.51% 4.03% 4.32% 4.42% 4.39% 4.38% 4.26% 4.15% 3.94%
Spread 2.80% 2.59% 2.88% 2.87% 2.91% 2.79% 2.77% 2.80% 2.82%
Margin 3.17% 3.02% 3.38% 3.37% 3.37% 3.26% 3.23% 3.24% 3.24%
"Our interest rate risk management models continue to show that we have moderate exposure to interest rate movements," Johnson said. "Without further significant rate cuts by the Fed and the stabilization in our levels of NPLs, we anticipate our net interest margin to remain within a range of 3.05% to 3.25% in the next quarter."
Performance Measures
Cascade's return on average GAAP equity (ROE) was 11.6% in the second quarter, compared to 13.8% a year earlier. Year-to-date, ROE was 10.0% compared to 13.5% in the first half of 2007. Return on average tangible equity (ROTE) was 14.4% for the second quarter of 2008, compared to 17.6% a year ago. For the first six months of 2008, ROTE was 12.5% compared to 17.3% in the first six months of 2007. Management uses ROTE, a non-GAAP performance measure, to exclude the goodwill created by the 2004 acquisition of Issaquah Bancshares and believes that it provides a more consistent comparison with pre-merger performance. Return on average assets (ROA) was 0.96% for the second quarter of 2008 versus 1.15% for the same quarter of 2007. For the first half of 2008, ROA was 0.84%, versus 1.14% in the first half of 2007. The efficiency ratio was 53.1% in the second quarter of 2008, compared to 51.1% in the same quarter a year ago, and 53.4% for the first half of the year compared to 51.6% in the same period last year.
Subsequent Event
After the close of the second quarter, on July 18, 2008, Cascade's nonperforming loans were reduced by $8 million to $24 million, through the assumption by a qualified borrower of two loans secured by residential real estate developments located in Snohomish County. This assumption will result in the recognition of $583,000 in interest in the third quarter, and a $250,000 recovery of principal which will be added back to the Allowance for Loan Losses.
Quarterly Cash Dividend
On July 1, 2008, Cascade announced a quarterly cash dividend of $0.09 per share, equal to the amount paid per share in the prior quarter. The dividend will be paid on July 28, to shareholders of records on July 14, 2008.
Conference Call
Cascade's management team will host a conference call on Wednesday, July 23, at 11:00 a.m. PDT (2:00 p.m. EDT). Interested investors may listen to the call live or via replay at www.cascadebank.com under shareholder information. Investment professionals are invited to dial (303) 262-2139 to participate in the live call. A telephone replay of the call will be available for a month at (303) 590-3000, using passcode 11115858#.
KBW Community Bank Investor Conference Presentation
Cascade's management team is scheduled to present at the Keefe, Bruyette & Woods Ninth Annual Community Bank Investor Conference in New York. Carol K. Nelson, Lars Johnson and Rob Disotell will present on Tuesday July 29, 2008, at 8:30 a.m. PDT (11:30 a.m. EDT). The live and archived presentation can be viewed at www.cascadebank.com or www.kbw.com.
About Cascade Financial
Established in 1916, Cascade Bank, the only operating subsidiary of Cascade Financial Corporation, is a state chartered commercial bank headquartered in Everett, Washington. Cascade Bank has proudly served the Puget Sound region for over 90 years and operates 21 full service branches in Everett, Lynnwood, Marysville, Mukilteo, Shoreline, Smokey Point, Issaquah, Clearview, Woodinville, Lake Stevens, Bellevue, Snohomish, North Bend and Burlington.
In June 2008, Cascade was ranked #44 on the Seattle Times' Northwest 100, a list of public companies. In January 2008 Cascade was ranked #10 on Washington CEO magazine's list of Top 25 Washington Banks. In September 2007, U.S. Banker magazine named President and CEO Carol Nelson one of the 25 Most Powerful Women in Banking. In July 2007, Cascade was named to Sandler O'Neill's Bank and Thrift Sm-All Stars - Class of 2007, which recognized Cascade as one of the top 24 best performing small capitalization institutions from a field of 610 publicly traded banks and thrifts in the U.S. with market capitalizations less than $2 billion. In making their selections, Sandler focused on growth, profitability, credit quality and capital strength.
Non-GAAP Financial Measures
This news release contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles ("GAAP"). These measures include return on tangible equity and tangible book value per share. These measures should not be construed as a substitute for GAAP measures; they should be read and used in conjunction with Cascade's GAAP financial information. A reconciliation of the included non-GAAP financial measures to GAAP measures is included elsewhere in this release.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This document contains forward-looking statements, including, but not limited to, Cascade's expectations regarding credit quality and losses and its belief that the allowance for loan and lease losses is adequate given current market conditions. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Those factors include, but are not limited to: Cascade's expectation for continued strong demand for its products and services, the risks inherent in significant construction and commercial RE lending, the ability to attract low-cost deposits and commercial loans, expectations for the net interest margin, maintaining asset quality, management's ability to minimize interest rate exposure and the impact of interest rate movements, the ability to attract and retain qualified people, general economic conditions and Cascade's ability to successfully adjust to any changes in these conditions, and other factors. Any factor described in this news release could, by itself or together with one or more other factors, adversely affect Cascade's business, earnings and/or financial condition. For a discussion of factors that could cause actual results to differ, please see the Company's publicly available Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2007.
BALANCE SHEET
(Dollars in
thousands Three One
except per June 30, March 31, Month June 30, Year
share amounts) 2008 2008 Change 2007 Change
---------- ---------- ------ ---------- ------
(Unaudited)
Cash and due
from banks $ 13,921 $ 13,235 5% $ 21,040 -34%
Interest bearing
deposits 1,850 9,256 -80% 30,075 -94%
Securities
available-for-
trading -- -- NA 46,784 -100%
Securities
available-for-
sale 123,630 117,509 5% 74,450 66%
Securities held
-to-maturity 137,065 134,574 2% 83,938 63%
Federal Home
Loan Bank stock 11,920 11,920 0% 11,920 0%
---------- ---------- ---------
Total securities 272,615 264,003 3% 217,092 26%
---------- ---------- ---------
Loans
Business 486,876 469,940 4% 453,186 7%
R/E
construction 391,765 411,189 -5% 323,417 21%
Commercial real
estate 117,043 115,087 2% 110,561 6%
Multifamily 63,905 26,964 137% 12,727 402%
Home equity/
consumer 29,250 28,142 4% 27,545 6%
Residential 106,043 101,768 4% 92,667 14%
---------- ---------- ---------
Total loans 1,194,882 1,153,090 4% 1,020,103 17%
Deferred loan
fees (3,471) (3,722) -7% (3,586) -3%
Allowance for
loan losses (13,318) (12,544) 6% (11,097) 20%
---------- ---------- ---------
Loans, net 1,178,093 1,136,824 4% 1,005,420 17%
---------- ---------- ---------
Premises and
equipment 15,778 15,222 4% 13,916 13%
Bank owned life
insurance 23,133 22,890 1% 18,309 26%
Other assets 17,081 16,518 3% 13,845 23%
Goodwill and
intangible
assets 25,149 25,184 0% 25,290 -1%
---------- ---------- ---------
Total assets $1,547,620 $1,503,132 3% $1,344,987 15%
========== ========== ==========
Deposits
Personal
checking
accounts $ 77,591 $ 64,827 20% $ 61,125 27%
Business
checking
accounts 89,071 84,247 6% 77,810 14%
---------- ---------- ---------
Total checking
accounts $ 166,662 $ 149,074 12% $ 138,935 20%
Savings and
money market
accounts 340,911 358,646 -5% 301,923 13%
Certificates of
deposit 482,988 443,755 9% 457,050 6%
---------- ---------- ---------
Total deposits 990,561 951,475 4% 897,908 10%
---------- ---------- ---------
FHLB advances 250,000 249,000 0% 197,000 27%
Securities sold
under agreement
to repurchase 145,641 140,633 4% 95,728 52%
Jr. Sub. Deb
(Trust
Preferred
Securities) 15,465 15,465 0% 15,465 0%
Jr. Sub. Deb
(Trust
Preferred
Securities) at
fair value 10,924 11,117 -2% 11,843 -8%
Other
liabilities 9,381 11,732 -20% 11,358 -17%
---------- ---------- ---------
Total
liabilities 1,421,972 1,379,422 3% 1,229,302 16%
---------- ---------- ---------
Stockholders'
equity
Common stock
and paid in
capital 40,669 40,591 0% 40,074 1%
Retained
earnings 87,456 83,822 4% 76,792 14%
Accumulated
other
comprehensive
loss, net (2,477) (703) 252% (1,181) 110%
---------- ---------- ---------
Total
stockholders'
equity 125,648 123,710 2% 115,685 9%
---------- ---------- ---------
Total
liabilities and
stockholders'
equity $1,547,620 $1,503,132 3% $1,344,987 15%
========== ========== ==========
Income Statement
(Dollars in
thousands except
per share Three One
amounts) June 30, March 31, Month June 30, Year
2008 2008 Change 2007 Change
----------- ----------- ------ ----------- ------
(Unaudited)
Interest income $ 22,793 $ 23,014 -1% $ 23,789 -4%
Interest expense 11,348 12,539 -9% 12,798 -11%
----------- ----------- -----------
Net interest
income 11,445 10,475 9% 10,991 4%
Provision for
loan losses 1,200 2,390 -50% 250 380%
----------- ----------- -----------
Net interest
income after
provision for
loan losses 10,245 8,085 27% 10,741 -5%
Other income
Checking fees 1,277 1,036 23% 960 33%
Service
fees 313 231 35% 275 14%
Bank owned life
insurance 259 260 0% 200 30%
Gain/(loss) on
sale of
securities 19 464 -96% (459) -104%
Gain on sale of
loans 45 37 22% 33 36%
Fair value gains 193 305 -37% 138 40%
Gain on FHLB
advances -- -- NA 569 NA
Other 111 121 -8% 118 -6%
----------- ----------- -----------
Total other
income 2,217 2,454 -10% 1,834 21%
----------- ----------- -----------
Total income 12,462 10,539 18% 12,575 -1%
----------- ----------- -----------
Compensation
expense 3,609 3,641 -1% 3,441 5%
Other operating
expenses 3,642 3,294 11% 3,107 17%
----------- ----------- -----------
Total other
expense 7,251 6,935 5% 6,548 11%
----------- ----------- -----------
Net income before
provision for
income tax 5,211 3,604 45% 6,027 -14%
Provision for
income tax 1,577 990 59% 2,044 -23%
----------- ----------- -----------
Net income $ 3,634 $ 2,614 39% $ 3,983 -9%
=========== =========== ===========
EARNINGS PER
SHARE
INFORMATION
Earnings per
share, basic $ 0.30 $ 0.22 36% $ 0.33 -9%
Earnings per
share, diluted $ 0.30 $ 0.21 43% $ 0.32 -6%
Weighted average
number of
shares
outstanding
Basic 12,047,927 12,035,806 12,055,728
Diluted 12,162,848 12,206,374 12,305,667
Quarter Quarter Quarter
Ended Ended Ended
June 30, Mar 31, June 30,
PERFORMANCE MEASURES AND RATIOS 2008 2008 2007
-------- -------- --------
Return on average equity 11.57% 8.42% 13.76%
Return on average tangible equity 14.36% 10.50% 17.55%
Return on average assets 0.96% 0.71% 1.15%
Efficiency ratio 53.07% 53.64% 51.06%
Net interest margin 3.17% 3.02% 3.37%
INCOME STATEMENT
Six Months Ended One Year
(Dollars in thousands except June 30, June 30, --------
per share amounts) 2008 2007 Change
----------- ----------- ------
(Unaudited)
Interest income $ 45,807 $ 46,420 -1%
Interest expense 23,887 25,152 -5%
----------- -----------
Net interest income 21,920 21,268 3%
Provision for loan losses 3,590 500 618%
----------- -----------
Net interest income after
provision for loan losses 18,330 20,768 -12%
Other income
Checking fees 2,312 1,834 26%
Service fees 545 529 3%
Bank owned
life
insurance 519 395 31%
Gain/(loss) on sale of
securities 483 (459) -205%
Gain on sale of loans 83 121 -31%
Fair value gains 498 653 -24%
Gain on FHLB advances -- 569 -100%
Other 231 243 -5%
----------- -----------
Total other income 4,671 3,885 20%
----------- -----------
Total income 23,001 24,653 -7%
----------- -----------
Compensation expense 7,250 6,814 6%
Other operating expenses 6,936 6,157 13%
----------- -----------
Total other expense 14,186 12,971 9%
----------- -----------
Income before provision for
income taxes 8,815 11,682 -25%
Provision for income taxes 2,567 3,934 -35%
----------- -----------
Net income $ 6,248 $ 7,748 -19%
=========== ===========
EARNINGS PER SHARE
INFORMATION
Earnings per share, basic $ 0.52 $ 0.64 -19%
Earnings per share, diluted $ 0.51 $ 0.63 -19%
Weighted average number of
shares outstanding
Basic 12,041,001 12,075,413
Diluted 12,185,563 12,342,216
Six Months Six Months
Ended Ended
PERFORMANCE MEASURES AND June 30, June 30,
RATIOS 2008 2007
----------- -----------
Return on average equity 10.01% 13.54%
Return on average tangible
equity 12.45% 17.26%
Return on average assets 0.84% 1.14%
Efficiency ratio 53.35% 51.57%
Net interest margin 3.09% 3.32%
(Dollars in Thousands except per share amounts) (Unaudited)
AVERAGE BALANCES Quarter Quarter Quarter
Ended Ended Ended
June 30, March 31, June 30,
2008 2008 2007
----------- ----------- -----------
Average assets $ 1,527,947 $ 1,472,087 $ 1,383,852
Average earning assets 1,453,058 1,397,180 1,307,036
Average total loans 1,173,781 1,130,012 1,031,697
Average deposits 968,873 927,501 903,888
Average equity 126,384 124,771 116,110
Average tangible equity 101,219 99,566 90,799
June 30, March 31, June 30,
2008 2008 2007
EQUITY ANALYSIS ----------- ----------- -----------
Total equity $ 125,648 $ 123,710 $ 115,685
Less: goodwill and
intangibles 25,149 25,184 25,290
----------- ----------- -----------
Tangible equity $ 100,499 $ 98,526 $ 90,395
Common stock outstanding 12,047,927 12,047,927 12,015,411
Book value per common share $ 10.43 $ 10.27 $ 9.63
Tangible book value per
share $ 8.34 $ 8.18 $ 7.52
Capital/asset ratio (inc
jr. sub deb) 9.73% 10.52% 10.93%
Capital/asset ratio (Tier 1,
inc. jr. sub deb) 8.41% 8.59% 8.60%
Tangible cap/asset ratio
(ex. sub deb) 6.60% 6.67% 6.85%
June 30, March 31, June 30,
2008 2008 2007
ASSET QUALITY ----------- ----------- -----------
Nonperforming loans (NPLs) $ 32,019 $ 17,268 $ 955
Nonperforming loans/total
loans 2.68% 1.50% 0.09%
Real estate/repossessed
assets owned $ 25 $ 154 $ --
Nonperforming assets $ 32,044 $ 17,422 $ 955
Nonperforming assets/total
assets 2.07% 1.16% 0.07%
Net loan charge-offs
(recoveries) in the quarter $ 448 $ 1,506 $ 75
Net charge-offs/total loans 0.04% 0.13% 0.01%
Allowance for loan losses $ 13,318 $ 12,544 $ 11,097
Plus: Allowance for off
balance sheet commitments 113 135 249
----------- ----------- -----------
Total allowance for loan
losses $ 13,431 $ 12,679 $ 11,346
Total allowance for loan
losses/total loans 1.12% 1.10% 1.11%
Total allowance for loan
losses/nonperforming loans 42% 73% 1188%
Quarter Quarter Quarter
Ended Ended Ended
June 30, March 31, June 30,
2008 2008 2007
INTEREST SPREAD ANALYSIS ----------- ----------- -----------
Yield on loans 6.52% 6.87% 7.93%
Yield on investments 5.54% 5.65% 4.81%
Yield on earning assets 6.31% 6.62% 7.30%
Cost of deposits 2.74% 3.45% 4.07%
Cost of FHLB advances 4.30% 4.28% 4.44%
Cost of other borrowings 4.29% 4.22% 2.35%
Cost of jr. sub. debentures 8.03% 7.94% 7.74%
Cost of interest bearing
liabilities 3.51% 4.03% 4.39%
Net interest spread 2.80% 2.59% 2.91%
Net interest margin 3.17% 3.02% 3.37%