Exhibit 99.1
Company Contact:
Michael J. Fitzpatrick
Chief Financial Officer
OceanFirst Financial Corp.
Tel: (732)240-4500, ext. 7506
Fax: (732)349-5070
email:Mfitzpatrick@oceanfirst.com
FOR IMMEDIATE RELEASE
OceanFirst Financial Corp.
ANNOUNCES A RETURN TO PROFITABILITY
AND CONTINUATION OF QUARTERLY DIVIDEND
TOMS RIVER, NEW JERSEY, July 30, 2007…OceanFirst Financial Corp. (NASDAQ:OCFC), the holding company for OceanFirst Bank, today announced that diluted earnings per share for the quarter ended June 30, 2007 amounted to $.02 as compared to $.41 for the corresponding prior year period. For the six months ended June 30, 2007 the loss per share was $.45 as compared to diluted earnings per share of $.77 for the corresponding prior year period. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $.20 per share—covering the three month period ended June 30, 2007—to be paid on August 17, 2007, to shareholders of record on August 3, 2007.
During the quarter, the Bank agreed to discontinue operations at the Westchester County, New York office of Columbia Home Loans, LLC (“Columbia”), the Bank’s mortgage banking subsidiary. The Bank is retaining Columbia’s loan servicing portfolio and two small loan production offices, which will be incorporated into the Bank’s lending operations. This planned
shutdown was the result of the significant operating losses incurred by Columbia in the past two quarters related to their origination of subprime mortgage loans. The loan production offices retained by the Bank were not heavily involved in subprime lending operations, which were discontinued Bank-wide during the first quarter. For the three and six months ended June 30, 2007, Columbia recorded a net loss of $4.2 million and $12.6 million, respectively. Absent the closure, the Company expected Columbia to continue to incur operating losses for the foreseeable future. The elimination of Columbia’s Westchester Headquarters operation is planned to be completed by September 30, 2007, although a portion of the revenue and expenses related to the retained loan servicing portfolio and loan production offices are expected to continue.
Discussing the improved results from the quarter, CEO John R. Garbarino commented on the welcome return to profitability and expressed confidence that the previous subprime lending losses at Columbia had been recognized, contained and provided for. “The Company’s return to profitability over the past three months demonstrates the resilience of our core banking operations after accounting for the Columbia subprime losses and associated expenses.” Mr. Garbarino continued, “I am also pleased to announce our forty-second consecutive quarterly cash dividend, reflective of our confidence in the future performance of the Company.”
Results of Operations
Net interest income for the three and six months ended June 30, 2007 decreased to $12.7 million and $27.1 million, respectively, as compared to $14.4 million and $29.8 million, respectively, in the same prior year periods, reflecting a lower net interest margin and, for the three months ended June 30, 2007, lower levels of average interest-earning assets. The net
interest margin decreased to 2.64% and 2.79%, respectively, for the three and six months ended June 30, 2007 from 2.96% and 3.10%, respectively, in the same prior year periods. The yield on interest-earning assets increased to 5.94% and 6.07%, respectively, for the three and six months ended June 30, 2007, as compared to 5.86% for the same prior year periods. The cost of interest-bearing liabilities increased, however, to 3.59% and 3.58%, respectively, for the three and six months ended June 30, 2007, as compared to 3.19% and 3.03%, respectively, in the same prior year periods. Average interest-earning assets decreased by $26.4 million for the three months ended June 30, 2007, as compared to the same prior year period. For the six months ended June 30, 2007 average interest-earning assets increased $17.6 million as compared to the same prior year period.
Other income decreased to $225,000 for the three months ended June 30, 2007 and a loss of $6.1 million for the six months ended June 30, 2007, as compared to other income of $6.5 million and $11.0 million, respectively, in the same prior year periods. For the three and six months ended June 30, 2007, the Company recorded losses of $3.2 million and $12.8 million, respectively, on the sale of loans and lower of cost or market adjustment, as compared to gains of $3.3 million and $5.0 million, respectively, in the same prior year periods. The losses relate to the origination of subprime mortgage loans by Columbia. These loans were originated for sale to investors, however, some loans were not able to be sold as planned and remained in inventory. Columbia was able to subsequently sell most of these loans in a bulk sale transaction during the second quarter. Included in the bulk sale were subprime loans with a stated principal balance of $42.6 million for which Columbia recognized a loss on sale, net of reserves, of $1.3 million. Additionally, included in the loss on sale of loans for the three and six months ended June 30, 2007 are mark-to-market charges of $2.3 million and $9.4 million, respectively, incurred by Columbia to reduce loans held for sale to their current fair market value.
Columbia has also established a reserve for repurchased loans to account for Columbia’s obligation to repurchase loans which experienced an “early payment default,” defined as the failure by the borrower to make a payment within a designated period early in the loan term. In July 2006, Columbia renegotiated and tightened investor loan sale agreements to generally define early payment default as the failure of the borrower to make the first payment following sale of the loan. In addition to early payment defaults, Columbia must also repurchase a loan in the event of a breach of a representation or warranty or a misrepresentation during the loan origination process. The early payment defaults primarily relate to subprime mortgage loans, especially those with 100% financing relative to the value of the underlying property. In March 2007, the Company discontinued the origination of all subprime loans. There was no provision for repurchased loans for the quarter ended June 30, 2007. For the six months ended June 30, 2007 the provision for repurchased loans was $4.0 million which is included as part of the gain (loss) on sale of loans.
The reserve for repurchased loans, which is included in other liabilities in the Company’s consolidated statement of financial condition, was $5.4 million at June 30, 2007 and outstanding loan repurchase requests totaled $13.2 million at the same date. This compares to a reserve for repurchased loans of $9.8 million at March 31, 2007 and outstanding loan repurchase requests of $40.5 million. The reserve for repurchased loans is established to provide for expected losses related to outstanding loan repurchase requests and additional repurchase requests which may be received on loans previously sold to investors.
Since March 31, 2007, the Company has negotiated numerous cash payment settlements for repurchase claims without the requirement to repurchase the subprime loans. After repurchasing a principal balance of $13.9 million in subprime loans during the first quarter of 2007, Columbia repurchased only $1.0 million in the second quarter of 2007. Additionally, for the period May 1 through July 27, 2007, the Company has received only two valid claims for repurchase for a total of $370,000 in loan principal. At June 30, 2007, Columbia was holding subprime loans with a gross principal balance of $7.8 million and a carrying value, net of reserves, of $4.9 million.
Fees and service charges increased $154,000, or 5.4%, and $604,000, or 11.7%, for the three and six months ended June 30, 2007, respectively, as compared to the same prior year period primarily related to increased fees from trust services and checking accounts.
Operating expenses amounted to $13.7 million and $28.8 million, respectively, for the three and six months ended June 30, 2007, as compared to $13.5 million and $26.7 million, respectively, for the corresponding prior year periods. The increase in operating expenses was due to the cost of three new branches, higher professional fees and total severance costs of $778,000; $404,000 incurred at Columbia and $374,000 incurred by the Bank. Also, general and administrative expense for the six months ended June 30, 2007 includes $1.0 million relating to the write-off of the previously established goodwill on the August, 2000 acquisition of Columbia.
The Company recorded tax benefits of $1.2 million and $3.2 million for the three and six months ended June 30, 2007. Tax benefits were determined based on an estimated annual effective tax rate, however, in the second quarter of 2007 it was determined that the actual effective tax rate for the year-to-date period was the best estimate of the annual effective tax rate.
Financial Condition
Mortgage loans held for sale decreased by $68.0 million at June 30, 2007 as compared to December 31, 2006 due to reduced loan origination volume at Columbia. Deposits decreased to $1,306.9 million at June 30, 2007 from $1,372.3 million at December 31, 2006 as the Bank moderated its pricing relating to certificates of deposit. Total Federal Home Loan Bank borrowings decreased by $35.5 million to $429.0 million at June 30, 2007, as compared to $464.5 million at December 31, 2006 due to the lower loan balances. Additionally, during the quarter ended June 30, 2007, the Company issued $10.0 million of Trust Preferred Securities to provide additional liquidity at the holding company.
Stockholders’ equity decreased by $8.6 million to $123.7 million at June 30, 2007, as compared to $132.3 million at December 31, 2006. For the six months ended June 30, 2007, 49,701 common shares were repurchased at a total cost of $1.1 million. All of these shares were repurchased in the first quarter of 2007. Under the 5% repurchase program authorized by the Board of Directors in July 2006, 489,062 shares remain to be purchased as of June 30, 2007. Stockholders’ equity was further reduced by the net loss and the cash dividend.
Asset Quality
The Company’s non-performing assets totaled $11.9 million at June 30, 2007, an increase from $4.8 million at December 31, 2006. The June 30, 2007 amount includes $1.2 million of loans repurchased by Columbia due to early payment default. These loans were written down to market value on the date of repurchase, which included an assessment of each loan’s credit impairment. As a result, these loans do not require an adjustment to the allowance for loan losses. For the six months ended June 30, 2007 the Company realized a net loan charge-off of $69,000.
Conference Call
As previously announced, the Company will host an earnings conference call on Monday, July 30, 2007 at 11:00 a.m. Eastern time. The direct dial number for the call is (877) 407-8035. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877)660-6853, Account #286, Conference ID#248305, from one hour after the end of the call until midnight on Monday, August 6, 2007.
OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered stock savings bank with $2.0 billion in assets and twenty branches located in Ocean, Monmouth and Middlesex counties, New Jersey. The Bank is the largest and oldest community-based financial institution headquartered in Ocean County, New Jersey.
OceanFirst Financial Corp.’s press releases are available at no charge by visiting us on the worldwide web athttp://www.oceanfirst.com.
Forward-Looking Statements
This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and the subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake – and specifically disclaims any obligation – to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
June 30, 2007 | December 31, 2006 | June 30, 2006 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 28,346 | $ | 32,204 | $ | 33,211 | ||||||
Investment securities available for sale | 66,813 | 82,384 | 84,265 | |||||||||
Federal Home Loan Bank of New York stock, at cost | 24,073 | 25,346 | 25,694 | |||||||||
Mortgage-backed securities available for sale | 61,336 | 68,369 | 74,374 | |||||||||
Loans receivable, net | 1,698,515 | 1,701,425 | 1,741,230 | |||||||||
Mortgage loans held for sale | 14,975 | 82,943 | 62,282 | |||||||||
Interest and dividends receivable | 7,920 | 8,083 | 7,559 | |||||||||
Real estate owned, net | 329 | 288 | 225 | |||||||||
Premises and equipment, net | 17,684 | 18,196 | 17,072 | |||||||||
Servicing asset | 9,650 | 9,787 | 9,537 | |||||||||
Bank Owned Life Insurance | 37,763 | 37,145 | 36,551 | |||||||||
Intangible Assets | 48 | 1,114 | 1,221 | |||||||||
Other assets | 10,310 | 9,718 | 7,524 | |||||||||
Total assets | $ | 1,977,762 | $ | 2,077,002 | $ | 2,100,745 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Deposits | $ | 1,306,893 | $ | 1,372,328 | $ | 1,377,935 | ||||||
Securities sold under agreements to repurchase with retail customers | 69,823 | 50,982 | 59,529 | |||||||||
Securities sold under agreements to repurchase with the Federal Home Loan Bank | 13,000 | 34,000 | 44,000 | |||||||||
Federal Home Loan Bank advances | 416,000 | 430,500 | 450,000 | |||||||||
Other Borrowings | 28,200 | 17,500 | 11,100 | |||||||||
Advances by borrowers for taxes and insurance | 9,000 | 7,743 | 9,608 | |||||||||
Other liabilities | 11,172 | 31,629 | 14,539 | |||||||||
Total liabilities | 1,854,088 | 1,944,682 | 1,966,711 | |||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock, $.01 par value, 5,000,000 shares authorized, no shares issued | — | — | — | |||||||||
Common stock, $.01 par value, 55,000,000 shares authorized, 27,177,372 shares issued and 12,319,120, 12,262,307, and 12,317,657 shares outstanding at June 30, 2007, December 31, 2006 and June 30, 2006, respectively | 272 | 272 | 272 | |||||||||
Additional paid-in capital | 202,841 | 201,936 | 199,680 | |||||||||
Retained earnings | 153,584 | 164,121 | 167,535 | |||||||||
Accumulated other comprehensive loss | (802 | ) | (470 | ) | (1,560 | ) | ||||||
Less: Unallocated common stock held by Employee Stock Ownership Plan | (5,864 | ) | (6,369 | ) | (6,920 | ) | ||||||
Treasury stock, 14,858,252, 14,915,065 and 14,859,715 shares at June 30, 2007, December 31, 2006 and June 30, 2006, respectively | (226,357 | ) | (227,170 | ) | (224,973 | ) | ||||||
Common stock acquired by Deferred Compensation Plan | 1,588 | 1,457 | 1,504 | |||||||||
Deferred Compensation Plan Liability | (1,588 | ) | (1,457 | ) | (1,504 | ) | ||||||
Total stockholders’ equity | 123,674 | 132,320 | 134,034 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,977,762 | $ | 2,077,002 | $ | 2,100,745 | ||||||
OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
Interest income: | ||||||||||||||
Loans | $ | 26,239 | $ | 26,207 | $ | 53,583 | $ | 51,227 | ||||||
Mortgage-backed securities | 714 | 831 | 1,438 | 1,705 | ||||||||||
Investment securities and other | 1,600 | 1,530 | 3,904 | 3,422 | ||||||||||
Total interest income | 28,553 | 28,568 | 58,925 | 56,354 | ||||||||||
Interest expense: | ||||||||||||||
Deposits | 9,123 | 8,021 | 18,452 | 15,101 | ||||||||||
Borrowed funds | 6,731 | 6,136 | 13,365 | 11,425 | ||||||||||
Total interest expense | 15,854 | 14,157 | 31,817 | 26,526 | ||||||||||
Net interest income | 12,699 | 14,411 | 27,108 | 29,828 | ||||||||||
Provision for loan losses | 110 | — | 450 | 50 | ||||||||||
Net interest income after provision for loan losses | 12,589 | 14,411 | 26,658 | 29,778 | ||||||||||
Other income (loss): | ||||||||||||||
Loan servicing income | 108 | 147 | 230 | 273 | ||||||||||
Fees and service charges | 2,984 | 2,830 | 5,782 | 5,178 | ||||||||||
Net (loss) gain and lower of cost or market adjustment on sales of loans and securities available for sale | (3,248 | ) | 3,280 | (12,832 | ) | 4,959 | ||||||||
Net income from other real estate operations | 38 | — | 19 | — | ||||||||||
Income from Bank Owned Life Insurance | 313 | 280 | 618 | 548 | ||||||||||
Other | 30 | 4 | 35 | 10 | ||||||||||
Total other income (loss) | 225 | 6,541 | (6,148 | ) | 10,968 | |||||||||
Operating expenses: | ||||||||||||||
Compensation and employee benefits | 7,612 | 7,877 | 15,471 | 15,255 | ||||||||||
Occupancy | 1,252 | 1,136 | 2,458 | 2,320 | ||||||||||
Equipment | 535 | 582 | 1,088 | 1,208 | ||||||||||
Marketing | 370 | 391 | 686 | 699 | ||||||||||
Federal deposit insurance | 141 | 134 | 277 | 267 | ||||||||||
Data processing | 859 | 805 | 1,765 | 1,710 | ||||||||||
General and administrative | 2,975 | 2,610 | 7,089 | 5,252 | ||||||||||
Total operating expenses | 13,744 | 13,535 | 28,834 | 26,711 | ||||||||||
(Loss) income before (benefit) provision for income taxes | (930 | ) | 7,417 | (8,324 | ) | 14,035 | ||||||||
(Benefit) provision for income taxes | (1,207 | ) | 2,565 | (3,179 | ) | 4,869 | ||||||||
Net income (loss) | $ | 277 | $ | 4,852 | $ | (5,145 | ) | $ | 9,166 | |||||
Basic earnings (loss) per share | $ | 0.02 | $ | 0.42 | $ | (0.45 | ) | $ | 0.79 | |||||
Diluted earnings (loss) per share | $ | 0.02 | $ | 0.41 | $ | (0.45 | ) | $ | 0.77 | |||||
Average basic shares outstanding | 11,520 | 11,518 | 11,503 | 11,619 | ||||||||||
Average diluted shares outstanding | 11,607 | 11,831 | 11,503 | 11,956 | ||||||||||
Cash earnings (loss) (1) | $ | 815 | $ | 5,625 | $ | (3,323 | ) | $ | 10,651 | |||||
Diluted cash earnings (loss) per share | $ | 0.07 | $ | 0.48 | $ | (0.29 | ) | $ | 0.89 | |||||
(1) | Cash earnings are determined by adding (net of taxes) to reported earnings the non-cash expenses stemming from the amortization and appreciation of allocated shares in the company’s stock-related benefit plans and the amortization of intangible assets. |
OceanFirst Financial Corp.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)
At June 30, 2007 | At December 31, 2006 | At June 30, 2006 | ||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Stockholders’ equity to total assets | 6.25 | % | 6.37 | % | 6.38 | % | ||||||
Common shares outstanding (in thousands) | 12,319 | 12,262 | 12,318 | |||||||||
Stockholders’ equity per common share | $ | 10.04 | $ | 10.79 | $ | 10.88 | ||||||
Tangible stockholders’ equity per common share | 10.04 | 10.70 | 10.78 | |||||||||
ASSET QUALITY | ||||||||||||
Allowance for loan losses | $ | 10,619 | $ | 10,238 | $ | 10,686 | ||||||
Nonperforming loans | 11,527 | (1) | 4,525 | 1,799 | ||||||||
Nonperforming assets | 11,856 | (1) | 4,813 | 2,024 | ||||||||
Allowance for loan losses as a percent of total loans receivable | 0.62 | % | 0.57 | % | 0.59 | % | ||||||
Allowance for loan losses as a percent of nonperforming loans | 92.12 | 226.25 | 594.00 | |||||||||
Nonperforming loans as a percent of total loans receivable | 0.67 | 0.25 | 0.10 | |||||||||
Nonperforming assets as a percent of total assets | 0.60 | 0.23 | 0.10 |
(1) | Includes $1.2 million of repurchased loans which have been written down to their fair market value. |
For the three months ended June 30, | For the six months ended June 30, | |||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||
PERFORMANCE RATIOS (ANNUALIZED) | ||||||||||||
Return on average assets | 0.05 | % | 0.95 | % | (0.50 | )% | 0.91 | % | ||||
Return on average stockholders’ equity | 0.90 | 14.61 | (8.10 | ) | 13.61 | |||||||
Interest rate spread | 2.35 | 2.67 | 2.49 | 2.83 | ||||||||
Interest rate margin | 2.64 | 2.96 | 2.79 | 3.10 | ||||||||
Operating expenses to average assets | 2.71 | 2.65 | 2.83 | 2.65 | ||||||||
Efficiency ratio | 106.34 | 64.60 | 137.57 | 65.47 |
CASH EARNINGS
Although reported earnings and return on stockholders’ equity are traditional measures of performance, the Company believes that the change in stockholders’ equity or “cash earnings,” and related return measures are also a significant measure of a company’s performance. Cash earnings exclude the effects of various non-cash expenses, such as the employee stock plans amortization expense and related tax benefit, as well as the amortization of intangible assets. The following table reconciles the Company’s net income with cash earnings. The table is a pro forma calculation which is not in accordance with GAAP.
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net income (loss) | $ | 277 | $ | 4,852 | $ | (5,145 | ) | $ | 9,166 | |||||||
Add: Employee stock plans amortization Expense | 654 | 919 | 1,385 | 1,720 | ||||||||||||
Amortization of intangible assets | 26 | 26 | 1,065 | 52 | ||||||||||||
Less: Tax benefit(2) | (142 | ) | (172 | ) | (628 | ) | (287 | ) | ||||||||
Cash earnings (loss) | $ | 815 | $ | 5,625 | $ | (3,323 | ) | $ | 10,651 | |||||||
Basic cash earnings (loss) per share | $ | 0.07 | $ | 0.49 | $ | (0.29 | ) | $ | 0.92 | |||||||
Diluted cash earnings (loss) per share | $ | 0.07 | $ | 0.48 | $ | (0.29 | ) | $ | 0.89 | |||||||
(2) | The Company does not receive any tax benefit for that portion of employee stock plan amortization expense relating to the ESOP fair market value adjustment. |
OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(in thousands)
LOANS RECEIVABLE
At June 30, 2007 | At December 31, 2006 | |||||||
Real estate: | ||||||||
One- to four-family | $ | 1,135,513 | $ | 1,231,716 | ||||
Commercial real estate, multi- family and land | 329,495 | 306,288 | ||||||
Construction | 11,401 | 13,475 | ||||||
Consumer | 202,657 | 190,029 | ||||||
Commercial | 42,886 | 49,693 | ||||||
Total loans | 1,721,952 | 1,791,201 | ||||||
Loans in process | (3,035 | ) | (2,318 | ) | ||||
Deferred origination costs, net | 5,192 | 5,723 | ||||||
Allowance for loan losses | (10,619 | ) | (10,238 | ) | ||||
Total loans, net | 1,713,490 | 1,784,368 | ||||||
Less: mortgage loans held for sale | 14,975 | 82,943 | ||||||
Loans receivable, net | $ | 1,698,515 | $ | 1,701,425 | ||||
Mortgage loans serviced for others | $ | 1,033,988 | $ | 992,658 | ||||
Loan pipeline | 135,416 | 294,646 |
For the three months ended June 30, | For the six month ended June 30, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||
Loan originations | $ | 179,413 | $ | 356,651 | $ | 446,559 | $ | 594,640 | ||||||
Loans sold | 134,559 | 164,063 | 295,811 | 259,798 | ||||||||||
Net charge-offs (recovery) | 68 | (172 | ) | 69 | (176 | ) |
DEPOSITS
At June 30, 2007 | At December 31, 2006 | |||||
Type of Account | ||||||
Non-interest bearing | $ | 118,823 | $ | 114,950 | ||
Interest-bearing checking | 404,297 | 408,666 | ||||
Money market deposit | 92,723 | 105,571 | ||||
Savings | 197,553 | 200,544 | ||||
Time deposits | 493,497 | 542,597 | ||||
$ | 1,306,893 | $ | 1,372,328 | |||
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
FOR THE QUARTERS ENDED JUNE 30, | ||||||||||||||||||
2007 | 2006 | |||||||||||||||||
AVERAGE BALANCE | INTEREST | AVERAGE COST | AVERAGE BALANCE | INTEREST | AVERAGE COST | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Assets | ||||||||||||||||||
Interest-earnings assets: | ||||||||||||||||||
Interest-earning deposits and short-term investments | $ | 8,080 | $ | 105 | 5.20 | % | $ | 8,898 | $ | 109 | 4.90 | % | ||||||
Investment securities (1) | 71,673 | 1,018 | 5.68 | 84,894 | 1,130 | 5.32 | ||||||||||||
FHLB stock | 25,540 | 477 | 7.47 | 24,411 | 291 | 4.77 | ||||||||||||
Mortgage-backed securities (1) | 63,936 | 714 | 4.47 | 79,710 | 831 | 4.17 | ||||||||||||
Loans receivable, net (2) | 1,754,821 | 26,239 | 5.98 | 1,752,543 | 26,207 | 5.98 | ||||||||||||
Total interest-earning assets | 1,924,050 | 28,553 | 5.94 | 1,950,456 | 28,568 | 5.86 | ||||||||||||
Non-interest-earning assets | 102,469 | 96,101 | ||||||||||||||||
Total assets | $ | 2,026,519 | $ | 2,046,557 | ||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Transaction deposits | $ | 720,363 | 3,622 | 2.01 | $ | 707,409 | 2,793 | 1.58 | ||||||||||
Time deposits | 496,341 | 5,501 | 4.43 | 538,382 | 5,228 | 3.88 | ||||||||||||
Total | 1,216,704 | 9,123 | 3.00 | 1,245,791 | 8,021 | 2.58 | ||||||||||||
Borrowed funds | 550,029 | 6,731 | 4.90 | 526,889 | 6,136 | 4.66 | ||||||||||||
Total interest-bearing liabilities | 1,766,733 | 15,854 | 3.59 | 1,772,680 | 14,157 | 3.19 | ||||||||||||
Non-interest-bearing deposits | 115,996 | 130,568 | ||||||||||||||||
Non-interest-bearing liabilities | 20,281 | 10,445 | ||||||||||||||||
Total liabilities | 1,903,010 | 1,913,693 | ||||||||||||||||
Stockholders’ equity | 123,509 | 132,864 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,026,519 | $ | 2,046,557 | ||||||||||||||
Net interest income | $ | 12,699 | $ | 14,411 | ||||||||||||||
Net interest rate spread (3) | 2.35 | % | 2.67 | % | ||||||||||||||
Net interest margin (4) | 2.64 | % | 2.96 | % | ||||||||||||||
FOR THE SIX MONTHS ENDED JUNE 30, | ||||||||||||||||||
2007 | 2006 | |||||||||||||||||
AVERAGE BALANCE | INTEREST | AVERAGE COST | AVERAGE BALANCE | INTEREST | AVERAGE COST | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Assets | ||||||||||||||||||
Interest-earnings assets: | ||||||||||||||||||
Interest-earning deposits and short-term investments | $ | 8,173 | $ | 213 | 5.21 | % | $ | 8,555 | $ | 198 | 4.63 | % | ||||||
Investment securities (1) | 73,611 | 2,765 | 7.51 | 84,766 | 2,667 | 6.29 | ||||||||||||
FHLB stock | 25,664 | 926 | 7.22 | 23,450 | 557 | 4.75 | ||||||||||||
Mortgage-backed securities (1) | 65,626 | 1,438 | 4.38 | 81,960 | 1,705 | 4.16 | ||||||||||||
Loans receivable, net (2) | 1,767,281 | 53,583 | 6.06 | 1,723,984 | 51,227 | 5.94 | ||||||||||||
Total interest-earning assets | 1,940,355 | 58,925 | 6.07 | 1,922,715 | 56,354 | 5.86 | ||||||||||||
Non-interest-earning assets | 100,867 | 95,201 | ||||||||||||||||
Total assets | $ | 2,041,222 | $ | 2,017,916 | ||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Transaction deposits | $ | 721,127 | 7,279 | 2.02 | $ | 723,908 | 5,505 | 1.52 | ||||||||||
Time deposits | 508,310 | 11,173 | 4.40 | 518,573 | 9,596 | 3.70 | ||||||||||||
Total | 1,229,437 | 18,452 | 3.00 | 1,242,481 | 15,101 | 2.43 | ||||||||||||
Borrowed funds | 549,876 | 13,365 | 4.86 | 505,560 | 11,425 | 4.52 | ||||||||||||
Total interest-bearing liabilities | 1,779,313 | 31,817 | 3.58 | 1,748,041 | 26,526 | 3.03 | ||||||||||||
Non-interest-bearing deposits | 114,501 | 124,263 | ||||||||||||||||
Non-interest-bearing liabilities | 20,331 | 10,885 | ||||||||||||||||
Total liabilities | 1,914,145 | 1,883,189 | ||||||||||||||||
Stockholders’ equity | 127,077 | 134,727 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,041,222 | $ | 2,017,916 | ||||||||||||||
Net interest income | $ | 27,108 | $ | 29,828 | ||||||||||||||
Net interest rate spread (3) | 2.49 | % | 2.83 | % | ||||||||||||||
Net interest margin (4) | 2.79 | % | 3.10 | % | ||||||||||||||
(1) | Amounts are recorded at average amortized cost. |
(2) | Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans. |
(3) | Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |
(4) | Net interest margin represents net interest income divided by average interest-earning assets. |