PRESS RELEASE
Available for Immediate Publication: October 23, 2006
Contacts:
Thomas T. Hawker, President / Chief Executive Officer (209) 725-2276
David A. Heaberlin, EVP / Treasurer and Chief Financial Officer (209) 725-7435
Web Site www.ccow.com
Capital Corp of the West Announces Third Quarter Results
Merced, California, October 23, 2006-Capital Corp of the West NASDAQ:NMS: CCOW) today announced $5,829,000 in net income for the third quarter ended September 30, 2006. This represents an increase of 7% when compared to the third quarter 2005. For the nine months ended September 30, 2006, net income grew by 13% to $17.640 million from $15.567 million in 2005. Fully diluted earnings per share for the third quarter of 2006 was $0.53 compared with $0.50 for the same period in 2005. For the first nine months of 2006, fully diluted earnings per share increased 12% to $1.61 versus $1.44 for the same period in 2005.
During the third quarter, the Company recorded a benefit payment related to bank owned life insurance of $179,000; an OREO after tax gain of $110,000 ($190,000 pretax); specific tax benefits associated with prior period state tax returns in the amount of $187,000 as well as certain loan interest reversals primarily related to prior periods in the after tax amount of $131,000 ($225,000 pretax). Excluding these matters, the third quarter earnings would have been $5.484 million or $0.50 per fully diluted share. In addition to this Q3 activity, the nine months results include the second quarter of 2006 net after tax gain of $361,000 related to the sale of a portion of our agency preferred stock investments and an ARM mutual fund. Without these Q2 and Q3 items, earnings for the first nine months of 2006 would have been $16.934 million or $1.55 per fully diluted share.
Tom Hawker, Chief Executive Officer, stated: “As with other financial institutions, Capital Corp of the West is experiencing the effects of 17 consecutive ¼ point increases in interest rates by the Federal Reserve since June 2004. In our last three earnings announcements, we have discussed the fact that, eventually, the rising interest rate environment could lead to a flattened yield curve and compression of our net interest margin. Although loan demand remains strong, the current competitive landscape creates a situation where we are limited in what we can charge our borrowers, while at the same time; our costs for deposits have risen significantly.”
“Our $99 million growth in deposits this quarter was aided by our ability to return an additional $50 million in deposits to our balance sheet that previously were being swept each day into an external third party investment. In addition, our continuing loan growth of $69 million is a testament to the economic vitality of the Central Valley. I look forward to discussing these and other matters at our scheduled conference call on October 23”, continued Mr. Hawker.
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Dave Heaberlin, Chief Financial Officer, commented that “the net interest margin for the third quarter 2006 was 4.37% compared with 4.75% for the same period in 2005 and 4.84% for the second quarter of 2006. If the interest adjustment related to prior periods, as discussed above, is removed, the third quarter net interest margin equates to 4.43%. While interest earning assets have continued to grow; yields on interest earning assets increased to 7.42% for Q3 (7.51% for Q2) compared with 6.54% for Q3 2005 or a 13% increase. However, while interest bearing liabilities have also grown; the cost associated with these liabilities increased to 3.69% in Q3 (3.27% for Q2) compared with 2.24% for Q3 2005 or an increase of 65%. This margin compression appears primarily a function of the flattening of rising rate environment combined with the lagged impact of the repricing of our interest bearing liabilities.”
“Clearly the last several quarters have represented an ideal market for our margin performance during this interest rate cycle. It is interesting to note that the net interest margin for the first nine months of 2006 of 4.64% has now retreated to the approximate level of that reported for the same period in 2005.” stated Mr. Heaberlin.
Earnings Discussion
Net earnings were $5,829,000 or $0.53 per diluted share for the three months ended September 30, 2006. This compares to earnings of $5,453,000 or $0.50 per diluted share for the same period in 2005. Annualized return on average assets and return on average equity were 1.29% and 17.05% for the third quarter of 2006 compared with 1.39% and 18.84% for the same period in 2005.
The 2006 third quarter earnings of $5,829,000 reflect an increase in net interest income of $1,183,000 from the same period in 2005 that was driven by a $229,109,000 or a 16% increase in average interest earning assets. The taxable equivalent net interest margin for the third quarter of 2006 was 4.37%, a decrease of 38 basis points from the 4.75% achieved during the same period during 2005.
In comparing the 2006 to 2005 third quarter, noninterest expenses increased by $2,692,000 due primarily to increases in salaries and benefits of $1,755,000 that were the result of management and support staff increases necessary to accommodate branch expansion, normal salary progression, the addition of an asset based lending group in 2006, the addition of a General Counsel to the senior management team and equity compensation expense. In the third quarter of 2006, stock option expense of $131,000 was recorded. Equity compensation expense for the first nine months of 2006 aggregated $566,000. The $217,000 increase in premises and occupancy expense was due primarily to branch expansion and remodeling costs.
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Our effective tax rate was 28% for the third quarter of 2006 compared with 34% for the same quarter of 2005. Income tax expense decreased $561,000 to $2,284,000 compared to the $2,845,000 recorded during the same quarter in 2005. The decrease in the 2006 tax rate compared to 2005 was primarily attributable to prior period tax credits recorded in the current quarter of $187,000 related to state housing tax credits earned between 2002 and 2004 that were not previously claimed on the Company’s state income tax returns. Amended returns will be filed with a corresponding claim for refund.
Credit Quality
The Company’s allowance for loan losses was $14,796,000 or 1.17% of total loans at September 30, 2006. Nonperforming assets totaled $3,393,000 or 0.18% of total assets while nonperforming loans stood at $3,333,000 or 0.26% of total loans. At September 30, 2006, the allowance for loan losses totaled 444% of nonperforming loans. This compares to an allowance for loan losses of $14,598,000 or 1.42% of total loans at September 30, 2005. At September 30, 2005, nonperforming assets totaled $2,111,000 or 0.13% of total assets, nonperforming loans totaled $2,051,000 or 0.20% of total loans and the allowance for loan losses totaled 712% of nonperforming loans.
Charge-offs for the third quarter of 2006 were $619,000 compared with charge-offs of $197,000 for the same period in 2005. The increased charge-offs occurred primarily in the commercial segment of the loan portfolio.
Book Values - Capital
The Company’s capital at September 30, 2006 stood at $142,073,000 compared with $117,979,000 as of September 30, 2005. Book value and tangible book value per share totaled $13.23 and $13.10 as of September 30, 2006 compared to $11.20 and $11.06 as of September 30, 2005. The Company’s tangible leverage capital ratio stood at 9.60% at September 30, 2006, compared with 8.53% as of September 30, 2005. The Company’s risk based capital ratio stood at 11.79% at September 30, 2006, compared with 11.50% as of September 30, 2005.
Conference Call Recording
Capital Corp of the West’s third quarter 2006 earnings conference call is scheduled for October 23, 2006 at 8:00 am PDT. Investors have the opportunity to listen to a recording of the conference call by going the web site of the company www.ccow.com just after the call and following the instructions to play back the recorded conference call. The recording will be available on the web site for 30 days following the conference call.
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Safe Harbor
In addition to historical information, this discussion and analysis includes certain forward-looking statements that are subject to risks and uncertainties and include information about possible or assumed future results of operations. Many possible events or factors could affect the future financial results and performance of the Company. This could cause results or performance to differ materially from those expressed in our forward-looking statements. Words such as “expects”, “anticipates”, “believes”, “estimates”, “intends”, “plans”, “assumes”, “projects”, “predicts”, “forecasts”, variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements.
These statements are representative only on the date hereof, and the Company undertakes no obligation to update any forward-looking statements made. Some possible events or factors that could occur that may cause differences from expected results include the following: the Company’s loan growth is dependent on economic conditions, as well as various discretionary factors, such as decisions to sell, or purchase certain loans or loan portfolios; or sell or buy participations of loans; the quality and adequacy of management of the borrower, developments in the industry the borrower is involved in, product and geographic concentrations and the mix of the loan portfolio. The rate of charge-offs and provision expense can be affected by local, regional and international economic and market conditions, concentrations of borrowers, industries, products and geographical conditions, the mix of the loan portfolio and management’s judgments regarding the collectibility of loans. Liquidity requirements may change as a result of fluctuations in assets and liabilities and off-balance sheet exposures, which will impact the capital and debt financing needs of the Company and the mix of funding sources. Decisions to purchase, hold, or sell securities are also dependent on liquidity requirements and market volatility, as well as on and off-balance sheet positions. Factors that may impact interest rate risk include local, regional and international economic conditions, levels, mix, maturities, yields or rates of assets and liabilities and the wholesale and retail funding sources of the Company. The Company is also exposed to the potential of losses arising from adverse changes in market rates and prices which can adversely impact the value of financial products, including securities, loans, and deposits. In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation and state regulators, whose policies and regulations could affect the Company’s results.
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Other factors that may cause actual results to differ from the forward-looking statements include the following: competition with other local and regional banks, savings and loan associations, credit unions and other non-bank financial institutions, such as investment banking firms, investment advisory firms, brokerage firms, mutual funds and insurance companies, as well as other entities which offer financial services; interest rate, market and monetary fluctuations; inflation; market volatility; general economic conditions; introduction and acceptance of new banking-related products, services and enhancements; fee pricing strategies, mergers and acquisitions and their integration into the Company; civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences or acts of this type; outbreak or escalation of hostilities in which the United States is involved, any declaration of war by the U.S. Congress or any other national or international calamity, crisis or emergency; changes in laws and regulations; recently issued accounting pronouncements; government policies, regulations, and their enforcement (including Bank Secrecy Act-related matters, taxing statutes and regulations); restrictions on dividends that our subsidiaries are allowed to pay to us; the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control; and management’s ability to manage these and other risks.
Reference Information
Capital Corp of the West, a bank holding company established November 1, 1995, is the parent company of County Bank, which has more than 28 years of service as “Central California’s Community Bank.” Currently County Bank has twenty three branch offices serving the counties of Fresno, Madera, Mariposa, Merced, Sacramento, Stanislaus, San Joaquin, San Francisco, Santa Clara and Tuolumne. As of the latest FDIC data, County Bank has 6.5% market share in the six Central California counties in which it has significant retail branches. This ranks County Bank fifth out of thirty-seven banking institutions in this market area. For further information about the Company’s financial performance, contact Tom Hawker, President and Chief Executive Officer at (209) 725-2276, or Dave Heaberlin, Treasurer and Chief Financial Officer, at (209) 725-7435.
-Financial Tables Follow-
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Capital Corp of the West
Consolidated Balance Sheets
(Unaudited)
At September 30, | At June 30, | |||||||||||||||
(Dollars in thousands, except per share data) | 2006 | 2005 | One Year Change | 2006 | Three Month Change | |||||||||||
Assets | ||||||||||||||||
Cash and noninterest-bearing deposits in other banks | $ | 46,104 | $ | 51,916 | $ | (5,812 | ) | $ | 50,390 | $ | (4,286 | ) | ||||
Federal funds sold | 49,690 | 4,760 | 44,930 | 25,185 | 24,505 | |||||||||||
Time deposits at other financial institutions | 350 | 350 | - | 350 | - | |||||||||||
Investment securities available for sale, at fair value | 263,526 | 237,792 | 25,734 | 265,746 | (2,220 | ) | ||||||||||
Investment securities held to maturity at cost, fair value of $170,327 and $184,634 at September 30, 2006 and 2005 | 172,578 | 183,779 | (11,201 | ) | 176,152 | (3,574 | ) | |||||||||
Loans, net of allowance for loan losses of $14,796 and $14,598 at September 30, 2006 and 2005 | 1,251,404 | 1,012,633 | 238,771 | 1,182,358 | 69,046 | |||||||||||
Interest receivable | 8,571 | 6,613 | 1,958 | 8,228 | 343 | |||||||||||
Premises and equipment, net | 38,833 | 26,725 | 12,108 | 36,007 | 2,826 | |||||||||||
Intangible assets | 1,405 | 1,439 | (34 | ) | 1,405 | - | ||||||||||
Cash value of life insurance | 42,762 | 31,525 | 11,237 | 32,396 | 10,366 | |||||||||||
Investment in housing tax credit limited partnerships | 8,440 | 8,217 | 223 | 8,623 | (183 | ) | ||||||||||
Other assets | 29,996 | 15,335 | 14,661 | 19,713 | 10,283 | |||||||||||
Total assets | $ | 1,913,659 | $ | 1,581,084 | $ | 332,575 | $ | 1,806,553 | $ | 107,106 | ||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||
Deposits | ||||||||||||||||
Noninterest-bearing demand | $ | 277,152 | $ | 288,791 | $ | (11,639 | ) | $ | 295,016 | $ | (17,864 | ) | ||||
Negotiable orders of withdrawal | 197,142 | 189,776 | 7,366 | 197,652 | (510 | ) | ||||||||||
Savings | 404,199 | 372,761 | 31,438 | 332,740 | 71,459 | |||||||||||
Time, under $100 | 247,061 | 210,446 | 36,615 | 247,883 | (822 | ) | ||||||||||
Time, $100 and over | 324,084 | 205,768 | 128,955 | 276,719 | 47,365 | |||||||||||
Brokered CD’s | 124,258 | 20,966 | 103,292 | $ | 124,724 | (466 | ) | |||||||||
Total deposits | 1,573,896 | 1,288,508 | 285,388 | 1,474,734 | 99,162 | |||||||||||
Federal funds purchased | - | 21,750 | (21,750 | ) | - | - | ||||||||||
Other borrowings and subordinated debentures | 184,589 | 139,895 | 25,835 | 187,351 | (21,621 | ) | ||||||||||
Accrued interest, taxes and other liabilities | 13,101 | 12,952 | 149 | 11,538 | 1,563 | |||||||||||
Total liabilities | 1,771,586 | 1,463,105 | 308,481 | 1,673,623 | 97,963 | |||||||||||
Preferred stock, no par value; 10,000,000 shares authorized; none Outstanding | - | - | - | - | - | |||||||||||
Common stock, no par value; 20,000,000 shares authorized; 10,736,497 and 10,534,205 issued & outstanding at September 30, 2006 and 2005 | 63,904 | 58,982 | 4,922 | 63,276 | 628 | |||||||||||
Retained earnings | 80,440 | 60,194 | 20,246 | 75,473 | 4,967 | |||||||||||
Accumulated other comprehensive (loss) | (2,271 | ) | (1,197 | ) | (1,074 | ) | (5,819 | ) | 3,548 | |||||||
Total shareholders’ equity | 142,073 | 117,979 | 24,094 | 132,930 | 9,143 | |||||||||||
Total liabilities and shareholders’ equity | $ | 1,913,659 | $ | 1,581,084 | $ | 332,575 | $ | 1,806,553 | $ | 107,106 |
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Capital Corp of the West
Consolidated Statements of Income
(Unaudited)
For the Three Months Ended September 30, | For the Three Months Ended June 30, | |||||||||||||||
(Dollars in thousands) | 2006 | 2005 | One Year Change | 2006 | Three Month Change | |||||||||||
Interest income | $ | 31,021 | $ | 23,487 | $ | 7,534 | $ | 30,406 | $ | 615 | ||||||
Interest expense | 12,871 | 6,520 | 6,351 | 10,930 | 1,941 | |||||||||||
Net interest income | 18,150 | 16,967 | 1,183 | 19,476 | (1,326 | ) | ||||||||||
Provision for loan losses | 200 | 1,035 | (835 | ) | 200 | - | ||||||||||
Noninterest income: | ||||||||||||||||
Service charges on accounts | 1,550 | 1,554 | (4 | ) | 1,504 | 46 | ||||||||||
Gain on sale of securities | - | - | - | 622 | (622 | ) | ||||||||||
Gain on other real estate owned | 190 | - | 190 | - | 190 | |||||||||||
Bank owned life insurance benefit payment | 179 | - | 179 | - | 179 | |||||||||||
Gain on the sale of loans | 11 | 60 | (49 | ) | 72 | (61 | ) | |||||||||
All other income | 1,225 | 1,052 | 173 | 1,225 | - | |||||||||||
Noninterest expenses: | ||||||||||||||||
Salaries and related benefits | 7,293 | 5,538 | 1,755 | 7,335 | (42 | ) | ||||||||||
Premises and occupancy | 1,422 | 1,205 | 217 | 1,256 | 166 | |||||||||||
Equipment | 1,096 | 1,035 | 61 | 1,042 | 54 | |||||||||||
Professional fees | 478 | 418 | 60 | 554 | (76 | ) | ||||||||||
Marketing | 360 | 231 | 129 | 466 | (106 | ) | ||||||||||
Intangible amortization | - | 11 | (11 | ) | 12 | (12 | ) | |||||||||
Supplies | 237 | 236 | 1 | 303 | (66 | ) | ||||||||||
Charitable donations | 264 | 178 | 86 | 291 | (27 | ) | ||||||||||
Other expenses | 1,842 | 1,448 | 394 | 1,848 | (6 | ) | ||||||||||
Total noninterest expenses | 12,992 | 10,300 | 2,692 | 13,107 | (115 | ) | ||||||||||
Income before income taxes | 8,113 | 8,298 | (185 | ) | 9,592 | (1,479 | ) | |||||||||
Provision for income taxes | 2,284 | 2,845 | (561 | ) | 3,338 | (1,054 | ) | |||||||||
NET INCOME | $ | 5,829 | $ | 5,453 | $ | 376 | $ | 6,254 | $ | (425 | ) | |||||
Average common shares outstanding | 10,731 | 10,506 | 225 | 10,687 | 44 | |||||||||||
EPS | $ | 0.54 | $ | 0.52 | $ | 0.02 | $ | 0.59 | $ | (0.05 | ) | |||||
Effect of stock options | 239 | 342 | (103 | ) | 264 | (25 | ) | |||||||||
Diluted EPS | $ | 0.53 | $ | 0.50 | $ | 0.03 | $ | 0.57 | $ | (0.04 | ) |
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Capital Corp of the West
Consolidated Statements of Income
(Unaudited)
Nine Months Ended | ||||||||||
(Dollars in thousands) | September 2006 | September 2005 | One Year Change | |||||||
Interest income | $ | 89,073 | $ | 65,151 | $ | 23,922 | ||||
Interest expense | 33,090 | 17,243 | 15,847 | |||||||
Net interest income | 55,983 | 47,908 | 8,075 | |||||||
Provision for loan losses | 400 | 1,356 | (956 | ) | ||||||
Noninterest income: | ||||||||||
Service charges on accounts | 4,475 | 4,447 | 28 | |||||||
Gain on sale of securities | 622 | - | 622 | |||||||
Gain on other real estate owned | 190 | - | 190 | |||||||
Bank owned life insurance benefit payment | 179 | 539 | (360 | ) | ||||||
Gain on the sale of loans | 123 | 155 | (32 | ) | ||||||
All other income | 3,621 | 2,534 | 1,087 | |||||||
Noninterest expenses: | ||||||||||
Salaries and related benefits | 21,487 | 16,748 | 4,739 | |||||||
Premises and occupancy | 3,866 | 3,256 | 610 | |||||||
Equipment | 3,129 | 2,936 | 193 | |||||||
Professional fees | 1,952 | 1,620 | 332 | |||||||
Marketing | 1,213 | 855 | 358 | |||||||
Intangible amortization | 23 | 34 | (11 | ) | ||||||
Supplies | 776 | 808 | (32 | ) | ||||||
Charitable donations | 773 | 573 | 200 | |||||||
Other expenses | 5,355 | 4,480 | 875 | |||||||
Total noninterest expenses | 38,574 | 31,310 | 7,264 | |||||||
Income before income taxes | 26,219 | 22,917 | 3,302 | |||||||
Provision for income taxes | 8,579 | 7,350 | 1,229 | |||||||
NET INCOME | $ | 17,640 | $ | 15,567 | $ | 2,073 | ||||
Average common shares outstanding | 10,673 | 10,480 | 193 | |||||||
EPS | $ | 1.65 | $ | 1.49 | $ | 0.16 | ||||
Effect of stock options | 274 | 329 | 55 | |||||||
Diluted EPS | $ | 1.61 | $ | 1.44 | $ | 0.17 |
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Capital Corp of the West
Selected Financial Data
Three Months Ended, | Nine Months Ended, | |||||||||||||||
September 30, 2006 | June 30, 2006 | September 30, 2005 | September 30, 2006 | September 30, 2005 | ||||||||||||
Basic Earnings Per Share | $ | 0.54 | $ | 0.59 | $ | 0.52 | $ | 1.65 | $ | 1.49 | ||||||
Diluted Earnings Per Share | $ | 0.53 | $ | 0.57 | $ | 0.50 | $ | 1.61 | $ | 1.44 | ||||||
Annualized Return on: | ||||||||||||||||
Average Assets | 1.29 | % | 1.41 | % | 1.39 | % | 1.33 | % | 1.37 | % | ||||||
Average Equity | 17.05 | % | 19.10 | % | 18.84 | % | 17.91 | % | 18.77 | % | ||||||
Net Interest Margin | 4.37 | % | 4.84 | % | 4.75 | % | 4.64 | % | 4.67 | % | ||||||
Efficiency Ratio | 61 | % | 57 | % | 52 | % | 59 | % | 56 | % | ||||||
Loan to Deposit Ratio | ||||||||||||||||
Annualized Net Charge-offs to Average Loans | 0.15 | % | 0.09 | % | (0.06 | )% | 0.04 | % | 0.05 | % |
Capital / Shareholder information
September 30, | June 30, | |||||||||
2006 | 2005 | 2006 | ||||||||
Book Value Per Share | $ | 13.23 | $ | 11.20 | $ | 12.40 | ||||
Tangible Book Value Per Share | $ | 13.10 | $ | 11.06 | $ | 12.27 | ||||
Leverage Capital Ratio | 9.60 | % | 8.53 | % | 9.57 | % | ||||
Risk Based Capital Ratio | 11.79 | % | 11.50 | % | 12.30 | % | ||||
Loan Portfolio Composition
(Dollars in thousands) | September 30, 2006 | September 30, 2005 | June 30, 2006 | ||||||||||||||||
Loan Categories: | Dollar Amount | Percent of loans | Dollar Amount | Percent Of loans | Dollar Amount | Percent of loans | |||||||||||||
Commercial | $ | 334,688 | 26 | % | $ | 262,875 | 26 | % | $ | 324,846 | 27 | % | |||||||
Agricultural | 87,039 | 7 | 75,654 | 7 | 82,241 | 7 | |||||||||||||
Real estate construction | 133,744 | 11 | 104,816 | 10 | 123,690 | 10 | |||||||||||||
Real estate construction residential | 38,949 | 3 | 53,476 | 5 | 38,286 | 3 | |||||||||||||
Real estate mortgage | 525,879 | 42 | 410,373 | 40 | 495,755 | 41 | |||||||||||||
Real estate mortgage residential | 41,602 | 3 | 38,831 | 4 | 39,258 | 3 | |||||||||||||
Consumer | 104,299 | 8 | 81,206 | 8 | 93,366 | 8 | |||||||||||||
Total | 1,266,200 | 100 | % | 1,027,231 | 100 | % | 1,197,442 | 100 | % | ||||||||||
Less allowance for loan losses | (14,796 | ) | (14,598 | ) | (15,084 | ) | |||||||||||||
Net loans | $ | 1,251,404 | $ | 1,012,633 | $ | 1,182,358 |
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Nonperforming Assets/Loan to Deposit Ratio
September 30, | June 30, | |||||||||
(Dollars in thousands) | 2006 | 2005 | 2006 | |||||||
Nonaccrual loans | $ | 3,333 | $ | 2,042 | $ | 1,593 | ||||
Accruing loans past due 90 days or more | - | 9 | - | |||||||
Total nonperforming loans | 3,333 | 2,051 | 1,593 | |||||||
Other real estate owned | 60 | 60 | 527 | |||||||
Total nonperforming assets | $ | 3,393 | $ | 2,111 | $ | 2,119 | ||||
Nonperforming loans to total loans | 0.26 | % | 0.20 | % | 0.13 | % | ||||
Nonperforming assets to total assets | 0.18 | % | 0.13 | % | 0.12 | % | ||||
Loan to deposit ratio | 80.5 | % | 79.7 | % | 81.2 | % |
Allowance for Loan Loss Activity
Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||
(Dollars in thousands) | 2006 | 2005 | 2006 | 2005 | |||||||||
Allowance for Loan Losses: | |||||||||||||
Balance at beginning of period | $ | 14,776 | $ | 13,605 | $ | 15,084 | $ | 13,404 | |||||
Provision for loan losses | 400 | 1,356 | 200 | 1,035 | |||||||||
Charge-offs | (1,261 | ) | (1,318 | ) | (619 | ) | (197 | ) | |||||
Recoveries | 881 | 955 | 131 | 356 | |||||||||
Net (charge-offs) recoveries | (380 | ) | (363 | ) | (488 | ) | 159 | ||||||
Balance at end of period | $ | 14,796 | $ | 14,598 | $ | 14,796 | $ | 14,598 | |||||
Loans outstanding at period-end | $ | 1,266,200 | $ | 1,027,231 | $ | 1,266,200 | $ | 1,027,231 | |||||
Average loans outstanding | $ | 1,168,887 | $ | 947,022 | $ | 1,225,723 | $ | 1,009,056 | |||||
Annualized net charge-offs to average loans | 0.04 | % | 0.05 | % | 0.15 | % | (0.06 | )% | |||||
Allowance for loan losses / total loans | 1.17 | % | 1.42 | % | 1.17 | % | 1.42 | % | |||||
Allowance for loan losses / nonperforming loans | 443.98 | % | 711.97 | % | 443.98 | % | 711.97 | % |
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AVERAGE BALANCE SHEET & ANALYSIS OF NET INTEREST EARNINGS
Three months ended | Three months ended | ||||||||||||||||||
September 30, 2006 | September 30, 2005 | ||||||||||||||||||
Average Balance | Taxable Equivalent Interest | Taxable Equivalent Yield/rate | Average Balance | Taxable Equivalent Interest | Taxable Equivalent Yield/rate | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Assets | |||||||||||||||||||
Federal funds sold | $ | 7,613 | 100 | 5.21 | % | $ | 2,101 | $ | 19 | 3.59 | % | ||||||||
Time deposits at other financial institutions | 350 | 5 | 5.67 | 350 | 2 | 2.27 | |||||||||||||
Taxable investment securities | 337,085 | 3,958 | 4.66 | 338,311 | 3,474 | 4.07 | |||||||||||||
Nontaxable investment securities | 103,312 | 1,249 | 4.80 | 95,153 | 1,205 | 5.02 | |||||||||||||
Loans, gross: | 1,225,723 | 26,010 | 8.42 | 1,009,059 | 19,106 | 7.51 | |||||||||||||
Total interest-earning assets | $ | 1,674,083 | $ | 31,322 | 7.42 | $ | 1,444,974 | $ | 23,806 | 6.54 | |||||||||
Allowance for loan losses | (14,868 | ) | (13,968 | ) | |||||||||||||||
Cash and due from banks | 43,274 | 46,720 | |||||||||||||||||
Premises and equipment, net | 37,647 | 25,860 | |||||||||||||||||
Interest receivable and other assets | 73,820 | 60,418 | |||||||||||||||||
Total assets | $ | 1,813,956 | $ | 1,564,004 | |||||||||||||||
Liabilities And Shareholders' Equity | |||||||||||||||||||
Negotiable order of withdrawal | $ | 197,546 | $ | 372 | 0.75 | $ | 180,577 | $ | 102 | 0.22 | |||||||||
Savings deposits | 333,695 | 2,259 | 2.69 | 371,188 | 1,406 | 1.50 | |||||||||||||
Time deposits | 666,501 | 7,507 | 4.47 | 430,752 | 3,321 | 3.06 | |||||||||||||
Other borrowings | 155,091 | 2,066 | 5.29 | 155,234 | 1,364 | 3.49 | |||||||||||||
Subordinated Debentures | 31,960 | 667 | 8.28 | 16,496 | 327 | 7.86 | |||||||||||||
Total interest-bearing liabilities | 1,384,793 | 12,871 | 3.69 | 1,154,247 | 6,520 | 2.24 | |||||||||||||
Noninterest-bearing deposits | 276,923 | 281,328 | |||||||||||||||||
Accrued interest, taxes and other liabilities | 15,471 | 12,660 | |||||||||||||||||
Total liabilities | 1,677,187 | 1,448,235 | |||||||||||||||||
Total shareholders' equity | 136,769 | 115,769 | |||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,813,956 | $ | 1,564,004 | |||||||||||||||
Net interest income and margin | $ | 18,451 | 4.37 | % | $ | 17,286 | 4.75 | % |
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AVERAGE BALANCE SHEET & ANALYSIS OF NET INTEREST EARNINGS
Nine months ended | Nine months ended | ||||||||||||||||||
September 30, 2006 | September 30, 2005 | ||||||||||||||||||
Average Balance | Taxable Equivalent Interest | Taxable Equivalent Yield/rate | Average Balance | Taxable Equivalent Interest | Taxable Equivalent Yield/rate | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Assets | |||||||||||||||||||
Federal funds sold | $ | 5,250 | 193 | 4.92 | % | $ | 4,411 | $ | 91 | 2.76 | % | ||||||||
Time deposits at other financial institutions | 350 | 14 | 5.35 | 855 | 17 | 2.66 | |||||||||||||
Taxable investment securities | 362,508 | 12,608 | 4.65 | 356,963 | 11,043 | 4.14 | |||||||||||||
Nontaxable investment securities | 102,481 | 3,757 | 4.90 | 87,993 | 3,344 | 5.08 | |||||||||||||
Loans, gross: | 1,168,887 | 73,440 | 8.40 | 947,022 | 51,572 | 7.28 | |||||||||||||
Total interest-earning assets | $ | 1,639,476 | $ | 90,012 | 7.34 | $ | 1,397,244 | $ | 66,067 | 6.32 | |||||||||
Allowance for loan losses | (15,074 | ) | (13,658 | ) | |||||||||||||||
Cash and due from banks | 46,146 | 43,495 | |||||||||||||||||
Premises and equipment, net | 33,733 | 24,465 | |||||||||||||||||
Interest receivable and other assets | 69,644 | 59,095 | |||||||||||||||||
Total assets | $ | 1,773,925 | $ | 1,510,641 | |||||||||||||||
Liabilities And Shareholders' Equity | |||||||||||||||||||
Negotiable order of withdrawal | $ | 205,209 | $ | 1,038 | 0.68 | $ | 174,734 | $ | 160 | 0.12 | |||||||||
Savings deposits | 353,195 | 6,041 | 2.29 | 363,763 | 3,515 | 1.29 | |||||||||||||
Time deposits | 577,631 | 17,749 | 4.11 | 398,930 | 8,444 | 2.83 | |||||||||||||
Other borrowings | 187,414 | 6,856 | 4.89 | 166,113 | 4,152 | 3.34 | |||||||||||||
Subordinated Debentures | 22,160 | 1,407 | 8.49 | 16,496 | 972 | 7.88 | |||||||||||||
Total interest-bearing liabilities | 1,345,609 | 33,091 | 3.29 | 1,120,036 | 17,243 | 2.06 | |||||||||||||
Noninterest-bearing deposits | 281,828 | 268,343 | |||||||||||||||||
Accrued interest, taxes and other liabilities | 15,169 | 11,657 | |||||||||||||||||
Total liabilities | 1,400,036 | ||||||||||||||||||
Total shareholders' equity | 131,319 | 110,605 | |||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,773,925 | $ | 1,510,641 | |||||||||||||||
Net interest income and margin | $ | 56,921 | 4.64 | % | $ | 48,824 | 4.67 | % |
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