Exhibit 99.1
Heritage Commerce Corp Earns $2.4 Million in Third Quarter
San Jose, CA – October 23, 2008 — Heritage Commerce Corp (Nasdaq: HTBK), parent company of Heritage Bank of Commerce, today reported net income of $2.4 million, or $0.21 per diluted share in the third quarter ended September 30, 2008, compared to $3.2 million, or $0.24 per diluted share, for the same quarter a year ago, and a net loss of $3.1 million, or ($0.26) per diluted share for the second quarter of 2008. For the first nine months of 2008, net income was $1.1 million, or $0.09 per diluted share, compared to $11.3 million, or $0.91 per diluted share, for the same period a year ago.
Third Quarter 2008 Financial Highlights
¨ | Total assets were $1.51 billion, an increase of 14% from September 30, 2007, and 2% from June 30, 2008. |
¨ | Loans increased 31% to $1.25 billion, an increase of $295 million from the third quarter of 2007 and an increase of $41 million or 3% compared to June 30, 2008. |
¨ | Commercial loans accounted for 43% of the loan portfolio, compared to 40% a year ago. |
¨ | The Company has no direct exposure to subprime loans or securities, nor does it own any Fannie Mae or Freddie Mac equity securities. |
¨ | Capital ratios qualify as well capitalized by regulatory standards. The leverage ratio was 8.27% at September 30, 2008. |
¨ | The regular quarterly cash dividend of $0.08 per share was maintained in the quarter. |
“Despite poor economic conditions and a volatile rate environment, I am happy to report that our third quarter earnings demonstrate solid performance, primarily due to the continued focus of our people on our customers,” said Walter Kaczmarek, President and Chief Executive Officer.
Balance Sheet and Capital Management
Heritage’s assets totaled $1.51 billion at September 30, 2008, compared to $1.33 billion a year ago, and $1.49 billion at June 30, 2008. Total loans were $1.25 billion at September 30, 2008, compared to $0.95 billion at September 30, 2007, and $1.21 billion at June 30, 2008. Deposits totaled $1.19 billion at September 30, 2008, compared to $1.10 billion at September 30, 2007, and $1.16 billion at June 30, 2008.
The securities portfolio of $107.6 million at September 30, 2008 consisted primarily of short term U.S. Treasury securities, U.S. government sponsored entities’ debt securities, mortgage-backed securities, collateralized mortgage obligations, and municipal bonds.
The Company’s loan portfolio at September 30, 2008 consisted of 43% commercial loans, 32% commercial real estate mortgage loans, 20% land and construction, and 5% consumer and other loans.
The Company’s deposits increased by 8% in the past year.
The Company’s loan growth in the nine months ended September 30, 2008 outpaced deposit growth, resulting in an increase in brokered deposits of $145 million for the first nine months of 2008, and $76 million for the third quarter of 2008. The Company’s noncore funding (which consists of time deposits, $100,000 and over, brokered deposits, securities sold under agreement to repurchase, and other short-term borrowings) to total assets ratio was 32% at September 30, 2008, compared to 15% a year ago. The Company’s loan to deposit ratio was 105% at September 30, 2008, compared to 87% a year ago.
Shareholders’ equity decreased to $144.3 million, or $8.18 tangible book value per share, at September 30, 2008, compared to $168.4 million, or $9.18 tangible book value per share, a year ago, and increased from $141.7 million, or $7.96 tangible book value per share, at June 30, 2008. Shareholders’ equity and regulatory capital ratios were lower at September 30, 2008, compared to the prior year because of the buyback of 1.4 million common shares during the period for $23.9 million. Capital ratios continue to be above the well-capitalized guidelines established by regulatory agencies. The leverage ratio at September 30, 2008 was 8.27%, compared to 11.19% at September 30, 2007, and 8.36% at June 30, 2008.
Credit Quality
Primarily due to a softening in the real estate market, which is expected to continue well into 2009, nonperforming assets (“NPAs”) increased by $10.8 million from June 30, 2008 to September 30, 2008. Nonperforming assets totaled $25.1 million, or 1.66% of total assets, at September 30, 2008, compared to $3.4 million, or 0.25% of total assets at September 30, 2007, and $14.3 million, or 0.96% of total assets at June 30, 2008.
Net charge-offs in the third quarter of 2008 were $129,000 or 0.04% of average loans, compared to net recoveries of $868,000 or (0.37%) of average loans in the third quarter of 2007. Net charge-offs in the second quarter of 2008 were $370,000 or 0.13% of average loans.
The Company’s provision for loan losses in the third quarter of 2008 was $1.6 million, which is primarily due to the $41 million in loan growth for the quarter, and additional risk in the loan portfolio reflected in the increase in nonperforming loans. The Company had a reverse provision of $500,000 in the third quarter of 2007. The provision for loan losses was $7.8 million in the second quarter of 2008. The total allowance for loan losses was $22.3 million at September 30, 2008, compared to $11.5 million at September 30, 2007, and $20.9 million at June 30, 2008.
Operating Results
Net income during 2008 has been impacted by net interest margin compression, a higher provision for loan losses, and lower noninterest income resulting from the Company’s strategic decision to retain, rather than sell, SBA loan production.
Net interest income decreased to $13.0 million for the third quarter of 2008 from $13.8 million for the third quarter of 2007 and increased by $78,000 from the second quarter of 2008. The third quarter of 2008 net interest margin was 3.83%, down 17 basis points, compared to 4.00% for the second quarter this year, and 82 basis points from 4.65% in the third quarter a year ago. For 2008 year-to-date, the net interest margin decreased 88 basis points to 4.04% from 4.92% for the first nine months of 2007. Decreases in the net interest margin are primarily the result of the 325 basis points decline in short-term interest rates from September 1, 2007 through April 30, 2008. On October 8, 2008, the Federal Reserve lowered the targeted federal funds rate by another 50 basis points, to 1.50%.
Noninterest income was $1.7 million for the third quarter of 2008, compared to $1.6 million for the third quarter of 2007, and $1.8 million for the prior quarter. In the first nine months of 2008, noninterest income was $5.0 million, compared to $6.4 million in the first nine months a year ago. Gains on sales of SBA loans were $1.8 million in the first nine months of 2007, with no corresponding income in 2008. Noninterest income was primarily comprised of loan servicing income, the increase in cash surrender value of Company owned life insurance, and service charges on deposit accounts.
Noninterest expense was $10.4 million for the third quarter of 2008, compared to $10.5 million for the third quarter of 2007, and $11.0 million for the second quarter of 2008. In the first nine months of 2008, noninterest expense increased to $32.0 million from $27.3 million for the first nine months a year ago. Operating expenses increased in 2008 due to the acquisition of Diablo Valley Bank on June 20, 2007, the new office in Walnut Creek, the addition of experienced banking professionals, and the write-off of leasehold improvements in the third quarter of 2008 due to the consolidation of our two offices in Los Altos.
Income tax expense for the quarter and nine months ended September 30, 2008 was $309,000 and $39,000, respectively, as compared to income tax expense of $2.2 million and $6.5 million for the same periods in 2007. The effective income tax rate for the quarter and nine months ended September 30, 2008 was 11.2% and 3.5%, respectively, as compared to an effective income tax rate of 40.0% and 36.4% for the same periods in 2007. For the quarter ended June 30, 2008, there was an income tax benefit of $955,000, due to the pre-tax loss of $4.0 million. The difference in the effective tax rate compared to the combined federal and state statutory tax rate of 42% is primarily the result of the Company’s investment in life insurance policies whose earnings are not subject to taxes, tax credits related to investments in low income housing limited partnerships and investments in tax-free municipal securities. The effective tax rates in 2008 are lower compared to 2007 because pre-tax income decreased substantially while benefits from tax advantaged investments did not.
The efficiency ratio was 70.56% in the third quarter of 2008, compared to 74.51% in the second quarter of 2008, and 68.21% in the third quarter of 2007. The efficiency ratio for the first nine months of 2008 increased to 72.48% from 61.64% a year ago. The efficiency ratio increased in 2008 primarily due to compression of the net interest margin, a decrease in noninterest income, and an increase in expenses, as discussed above.
The annualized returns on average assets (ROAA) and average equity (ROAE) for the third quarter of 2008 were 0.65% and 6.78%, compared to 0.96% and 7.56% for the quarter ended September 30, 2007, respectively. ROAA and ROAE for the first nine months of 2008 were 0.10% and 0.95%, compared to 1.31% and 10.60% for the first nine months of 2007, respectively. The annualized returns on average tangible assets (ROATA) and average tangible equity (ROATE) for the third quarter of 2008 were 0.67% and 10.15%, compared to 1.00% and 10.55% for the quarter ended September 30, 2007, respectively. ROATA and ROATE for the first nine months of 2008 were 0.10% and 1.39%, compared to 1.33% and 12.12% for the first nine months of 2007, respectively.
Heritage Commerce Corp, a bank holding company established in February 1998, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose with full-service branches in Los Gatos, Fremont, Danville, Pleasanton, Walnut Creek, Morgan Hill, Gilroy, Mountain View, and Los Altos. Heritage Bank of Commerce is an SBA Preferred Lender with Loan Production Offices in Fresno, Sacramento, Oakland, and Santa Rosa, California. For more information, please visit www.heritagecommercecorp.com.
Forward Looking Statement Disclaimer
This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to, the Company’s ability to sustain dividend payments, fluctuations in interest rates and monetary policy established by the Federal Reserve, inflation, government regulations, general economic conditions, competition within the business areas in which the Company is conducting its operations, including the real estate market in California, the ability to recognize identified cost savings, and other factors beyond the Company's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. For a discussion of factors which could cause results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company's press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
Member FDIC
For the Three Months Ended: | Percent Change From: | For the Nine Months Ended: | ||||||||||||||||||||||
CONSOLIDATED INCOME STATEMENTS | Sept. 30, | June 30, | Sept. 30, | June 30, | Sept. 30, | Sept. 30, | Sept. 30, | Percent | ||||||||||||||||
(in $000's, unaudited) | 2008 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | Change | ||||||||||||||||
Interest Income | $ | 19,197 | $ | 18,699 | $ | 22,105 | 3% | -13% | $ | 57,791 | $ | 57,656 | 0% | |||||||||||
Interest Expense | 6,151 | 5,731 | 8,324 | 7% | -26% | 18,673 | 19,751 | -5% | ||||||||||||||||
Net Interest Income | 13,046 | 12,968 | 13,781 | 1% | -5% | 39,118 | 37,905 | 3% | ||||||||||||||||
Provision for Loan Losses | 1,587 | 7,800 | (500) | -80% | 417% | 11,037 | (736) | 1600% | ||||||||||||||||
Net Interest Income after Provision for Loan Losses | 11,459 | 5,168 | 14,281 | 122% | -20% | 28,081 | 38,641 | -27% | ||||||||||||||||
Noninterest Income: | ||||||||||||||||||||||||
Gain on Sale of SBA Loans | 0 | 0 | 60 | N/A | -100% | 0 | 1,766 | -100% | ||||||||||||||||
Servicing Income | 491 | 377 | 546 | 30% | -10% | 1,347 | 1,596 | -16% | ||||||||||||||||
Increase in Cash Surrender Value of Life Insurance | 416 | 418 | 374 | 0% | 11% | 1,232 | 1,071 | 15% | ||||||||||||||||
Service Charges and Fees on Deposit Accounts | 505 | 537 | 344 | -6% | 47% | 1,457 | 954 | 53% | ||||||||||||||||
Other | 276 | 460 | 315 | -40% | -12% | 958 | 1,028 | -7% | ||||||||||||||||
Total Noninterest Income | 1,688 | 1,792 | 1,639 | -6% | 3% | 4,994 | 6,415 | -22% | ||||||||||||||||
Noninterest Expense: | ||||||||||||||||||||||||
Salaries & Employee Benefits | 5,665 | 5,970 | 5,840 | -5% | -3% | 17,694 | 15,413 | 15% | ||||||||||||||||
Occupancy & Equipment | 1,348 | 1,044 | 1,168 | 29% | 15% | 3,511 | 2,933 | 20% | ||||||||||||||||
Other | 3,384 | 3,984 | 3,510 | -15% | -4% | 10,769 | 8,972 | 20% | ||||||||||||||||
Total Noninterest Expense | 10,397 | 10,998 | 10,518 | -5% | -1% | 31,974 | 27,318 | 17% | ||||||||||||||||
Income (Loss) Before Income Taxes | 2,750 | (4,038) | 5,402 | 168% | -49% | 1,101 | 17,738 | -94% | ||||||||||||||||
Income Tax Expense (Benefit) | 309 | (955) | 2,162 | 132% | -86% | 39 | 6,450 | -99% | ||||||||||||||||
Net Income (Loss) | $ | 2,441 | $ | (3,083) | $ | 3,240 | 179% | -25% | $ | 1,062 | $ | 11,288 | -91% | |||||||||||
PER SHARE DATA | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Basic Earnings (Loss) Per Share | $ | 0.21 | $ | (0.26) | $ | 0.24 | 181% | -13% | $ | 0.09 | $ | 0.92 | -90% | |||||||||||
Diluted Earnings (Loss) Per Share | $ | 0.21 | $ | (0.26) | $ | 0.24 | 181% | -13% | $ | 0.09 | $ | 0.91 | -90% | |||||||||||
Common Shares Outstanding at Period End | 11,820,509 | 11,806,167 | 13,123,396 | 0% | -10% | 11,820,509 | 13,123,396 | -10% | ||||||||||||||||
Book Value Per Share | $ | 12.21 | $ | 12.01 | $ | 12.83 | 2% | -5% | $ | 12.21 | $ | 12.83 | -5% | |||||||||||
Tangible Book Value Per Share | $ | 8.18 | $ | 7.96 | $ | 9.18 | 3% | -11% | $ | 8.18 | $ | 9.18 | -11% | |||||||||||
KEY FINANCIAL RATIOS | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Annualized Return on Average Equity | 6.78% | -8.34% | 7.56% | 181% | -10% | 0.95% | 10.60% | -91% | ||||||||||||||||
Annualized Return on Average Tangible Equity | 10.15% | -12.30% | 10.55% | 183% | -4% | 1.39% | 12.12% | -89% | ||||||||||||||||
Annualized Return on Average Assets | 0.65% | -0.85% | 0.96% | 176% | -32% | 0.10% | 1.31% | -92% | ||||||||||||||||
Annualized Return on Average Tangible Assets | 0.67% | -0.88% | 1.00% | 176% | -33% | 0.10% | 1.33% | -92% | ||||||||||||||||
Net Interest Margin | 3.83% | 4.00% | 4.65% | -4% | -18% | 4.04% | 4.92% | -18% | ||||||||||||||||
Efficiency Ratio | 70.56% | 74.51% | 68.21% | -5% | 3% | 72.48% | 61.64% | 18% | ||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||
(in $000's, unaudited) | ||||||||||||||||||||||||
Average Assets | $ | 1,499,734 | $ | 1,456,396 | $ | 1,336,195 | 3% | 12% | $ | 1,443,641 | $ | 1,150,486 | 25% | |||||||||||
Average Tangible Assets | $ | 1,452,044 | $ | 1,408,536 | $ | 1,287,936 | 3% | 13% | $ | 1,395,761 | $ | 1,132,664 | 23% | |||||||||||
Average Earning Assets | $ | 1,353,730 | $ | 1,304,987 | $ | 1,175,396 | 4% | 15% | $ | 1,292,758 | $ | 1,029,042 | 26% | |||||||||||
Average Total Loans | $ | 1,231,931 | $ | 1,170,274 | $ | 933,675 | 5% | 32% | $ | 1,159,535 | $ | 788,180 | 47% | |||||||||||
Average Loans Held-For-Sale | $ | 0 | $ | 0 | $ | 5,348 | N/A | -100% | $ | 0 | $ | 12,288 | -100% | |||||||||||
Average Deposits | $ | 1,191,151 | $ | 1,169,860 | $ | 1,107,662 | 2% | 8% | $ | 1,154,705 | $ | 944,822 | 22% | |||||||||||
Average Demand Deposits - Noninterest Bearing | $ | 261,578 | $ | 260,361 | $ | 263,465 | 0% | -1% | $ | 257,054 | $ | 234,943 | 9% | |||||||||||
Average Interest Bearing Deposits | $ | 929,573 | $ | 909,499 | $ | 844,197 | 2% | 10% | $ | 897,651 | $ | 709,879 | 26% | |||||||||||
Average Interest Bearing Liabilities | $ | 1,066,264 | $ | 1,018,685 | $ | 878,799 | 5% | 21% | $ | 1,008,692 | $ | 749,847 | 35% | |||||||||||
Average Equity | $ | 143,318 | $ | 148,660 | $ | 170,136 | -4% | -16% | $ | 150,110 | $ | 142,377 | 5% | |||||||||||
AverageTangible Equity | $ | 95,628 | $ | 100,800 | $ | 121,877 | -5% | -22% | $ | 102,230 | $ | 124,555 | -18% |
End of Period: | Percent Change From: | |||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | Sept. 30, | June 30, | Sept. 30, | June 30, | Sept. 30, | |||||||||||||||
(in $000's, unaudited) | 2008 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and Due from Banks | $ | 35,718 | $ | 42,642 | $ | 51,627 | -16 | % | -31 | % | ||||||||||
Federal Funds Sold | 100 | 150 | 42,600 | -33 | % | -100 | % | |||||||||||||
Securities Available-for-Sale, at Fair Value | 107,565 | 116,594 | 150,116 | -8 | % | -28 | % | |||||||||||||
Loans: | ||||||||||||||||||||
Commercial Loans | 532,367 | 509,887 | 378,777 | 4 | % | 41 | % | |||||||||||||
Real Estate-Mortgage | 405,897 | 403,526 | 325,327 | 1 | % | 25 | % | |||||||||||||
Real Estate-Land and Construction | 253,134 | 243,731 | 205,925 | 4 | % | 23 | % | |||||||||||||
Home Equity | 51,981 | 45,991 | 39,771 | 13 | % | 31 | % | |||||||||||||
Consumer Loans | 5,549 | 4,686 | 4,131 | 18 | % | 34 | % | |||||||||||||
Loans | 1,248,928 | 1,207,821 | 953,931 | 3 | % | 31 | % | |||||||||||||
Deferred Loan Costs, Net | 1,412 | 1,301 | 727 | 9 | % | 94 | % | |||||||||||||
Total Loans, Net of Deferred Costs | 1,250,340 | 1,209,122 | 954,658 | 3 | % | 31 | % | |||||||||||||
Allowance for Loan Losses | (22,323 | ) | (20,865 | ) | (11,472 | ) | 7 | % | 95 | % | ||||||||||
Net Loans | 1,228,017 | 1,188,257 | 943,186 | 3 | % | 30 | % | |||||||||||||
Company Owned Life Insurance | 40,236 | 39,819 | 38,270 | 1 | % | 5 | % | |||||||||||||
Premises & Equipment, Net | 9,318 | 9,052 | 9,441 | 3 | % | -1 | % | |||||||||||||
Goodwill | 43,181 | 43,181 | 42,996 | 0 | % | 0 | % | |||||||||||||
Intangible Assets | 4,407 | 4,584 | 4,863 | -4 | % | -9 | % | |||||||||||||
Accrued Interest Receivable and Other Assets | 43,339 | 42,708 | 43,320 | 1 | % | 0 | % | |||||||||||||
Total Assets | $ | 1,511,881 | $ | 1,486,987 | $ | 1,326,419 | 2 | % | 14 | % | ||||||||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Demand Deposits-Noninterest Bearing | $ | 257,739 | $ | 262,813 | $ | 263,244 | -2 | % | -2 | % | ||||||||||
Demand Deposits-Interest Bearing | 139,377 | 145,151 | 146,410 | -4 | % | -5 | % | |||||||||||||
Savings and Money Market | 400,863 | 435,754 | 468,263 | -8 | % | -14 | % | |||||||||||||
Time Deposits, Under $100 | 34,792 | 33,911 | 32,341 | 3 | % | 8 | % | |||||||||||||
Time Deposits, $100 and Over | 168,361 | 173,766 | 138,327 | -3 | % | 22 | % | |||||||||||||
Brokered Deposits | 185,052 | 108,623 | 52,179 | 70 | % | 255 | % | |||||||||||||
Total Deposits | 1,186,184 | 1,160,018 | 1,100,764 | 2 | % | 8 | % | |||||||||||||
Securities Sold Under Agreement to Repurchase | 35,000 | 35,000 | 10,900 | 0 | % | 221 | % | |||||||||||||
Other Short-term Borrowings | 95,000 | 98,000 | 0 | -3 | % | N/ | A | |||||||||||||
Notes Payable To Subsidiary Grantor Trusts | 23,702 | 23,702 | 23,702 | 0 | % | 0 | % | |||||||||||||
Accrued Interest Payable and Other Liabilities | 27,711 | 28,518 | 22,678 | -3 | % | 22 | % | |||||||||||||
Total Liabilities | 1,367,597 | 1,345,238 | 1,158,044 | 2 | % | 18 | % | |||||||||||||
Shareholders' Equity: | ||||||||||||||||||||
Common Stock | 76,490 | 75,941 | 98,093 | 1 | % | -22 | % | |||||||||||||
Accumulated Other Comprehensive Loss | (512 | ) | (930 | ) | (1,258 | ) | -45 | % | -59 | % | ||||||||||
Retained Earnings | 68,306 | 66,738 | 71,540 | 2 | % | -5 | % | |||||||||||||
Total Shareholders' Equity | 144,284 | 141,749 | 168,375 | 2 | % | -14 | % | |||||||||||||
Total Liabilities & Shareholders' Equity | $ | 1,511,881 | $ | 1,486,987 | $ | 1,326,419 | 2 | % | 14 | % | ||||||||||
CREDIT QUALITY DATA | ||||||||||||||||||||
(in $000's, unaudited) | ||||||||||||||||||||
Nonaccrual Loans | $ | 23,095 | $ | 12,226 | $ | 2,862 | 89 | % | 707 | % | ||||||||||
Loans Over 90 Days Past Due and Still Accruing | 1,016 | 1,488 | 18 | -32 | % | 5544 | % | |||||||||||||
Total Nonperforming Loans | 24,111 | 13,714 | 2,880 | 76 | % | 737 | % | |||||||||||||
Other Real Estate Owned | 970 | 580 | 487 | 67 | % | 99 | % | |||||||||||||
Total Nonperforming Assets | $ | 25,081 | $ | 14,294 | $ | 3,367 | 75 | % | 645 | % | ||||||||||
Net Charge-offs (Recoveries) | $ | 129 | $ | 370 | $ | (868 | ) | -65 | % | 115 | % | |||||||||
Net Charge-offs as Percent of Average Loans | 0.04 | % | 0.13 | % | -0.37 | % | -69 | % | 111 | % | ||||||||||
Allowance for Loan Losses to Total Loans | 1.79 | % | 1.73 | % | 1.20 | % | 3 | % | 49 | % | ||||||||||
Allowance for Loan Losses to Nonperforming Loans | 92.58 | % | 152.14 | % | 398.33 | % | -39 | % | -77 | % | ||||||||||
Nonperforming Assets to Total Assets | 1.66 | % | 0.96 | % | 0.25 | % | 73 | % | 564 | % | ||||||||||
Nonperforming Loans to Total Loans | 1.93 | % | 1.13 | % | 0.30 | % | 71 | % | 543 | % | ||||||||||
OTHER PERIOD-END STATISTICS | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Shareholders' Equity / Total Assets | 9.54 | % | 9.53 | % | 12.69 | % | 0 | % | -25 | % | ||||||||||
Loan to Deposit Ratio | 105.41 | % | 104.23 | % | 86.73 | % | 1 | % | 22 | % | ||||||||||
Noninterest Bearing Deposits / Total Deposits | 21.73 | % | 22.66 | % | 23.91 | % | -4 | % | -9 | % | ||||||||||
Leverage Ratio | 8.27 | % | 8.36 | % | 11.19 | % | -1 | % | -26 | % |
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||
September 30, 2008 | September 30, 2007 | |||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||
NET INTEREST INCOME AND NET INTEREST MARGIN | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
(in $000's, unaudited) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||
Assets: | ||||||||||||||||||||
Loans, gross | $ | 1,231,931 | $ | 17,919 | 5.79 | % | $ | 939,023 | $ | 19,282 | 8.15 | % | ||||||||
Securities | 119,582 | 1,267 | 4.22 | % | 166,782 | 1,919 | 4.56 | % | ||||||||||||
Interest bearing deposits in other financial institutions | 182 | 1 | 2.19 | % | 2,908 | 31 | 4.23 | % | ||||||||||||
Federal funds sold | 2,035 | 10 | 1.95 | % | 66,683 | 873 | 5.19 | % | ||||||||||||
Total interest earning assets | 1,353,730 | $ | 19,197 | 5.64 | % | 1,175,396 | $ | 22,105 | 7.46 | % | ||||||||||
Cash and due from banks | 34,234 | 40,334 | ||||||||||||||||||
Premises and equipment, net | 9,185 | 9,430 | ||||||||||||||||||
Goodwill and other intangible assets | 47,690 | 48,264 | ||||||||||||||||||
Other assets | 54,895 | 62,771 | ||||||||||||||||||
Total assets | $ | 1,499,734 | $ | 1,336,195 | ||||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Demand, interest bearing | $ | 144,809 | $ | 308 | 0.85 | % | $ | 153,352 | $ | 863 | 2.23 | % | ||||||||
Savings and money market | 415,826 | 1,624 | 1.55 | % | 460,596 | 3,981 | 3.43 | % | ||||||||||||
Time deposits, under $100 | 33,893 | 224 | 2.63 | % | 33,379 | 327 | 3.89 | % | ||||||||||||
Time deposits, $100 and over | 170,045 | 1,138 | 2.66 | % | 137,605 | 1,786 | 5.15 | % | ||||||||||||
Brokered time deposits | 165,000 | 1,617 | 3.90 | % | 59,265 | 706 | 4.73 | % | ||||||||||||
Notes payable to subsidiary grantor trusts | 23,702 | 527 | 8.85 | % | 23,702 | 585 | 9.79 | % | ||||||||||||
Securities sold under agreement to repurchase | 35,000 | 264 | 3.00 | % | 10,900 | 76 | 2.77 | % | ||||||||||||
Other short-term borrowings | 77,989 | 449 | 2.29 | % | 0 | 0 | N | /A | ||||||||||||
Total interest bearing liabilities | 1,066,264 | $ | 6,151 | 2.29 | % | 878,799 | $ | 8,324 | 3.76 | % | ||||||||||
Demand, noninterest bearing | 261,578 | 263,465 | ||||||||||||||||||
Other liabilities | 28,574 | 23,795 | ||||||||||||||||||
Total liabilities | 1,356,416 | 1,166,059 | ||||||||||||||||||
Shareholders' equity: | 143,318 | 170,136 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,499,734 | $ | 1,336,195 | ||||||||||||||||
Net interest income / margin | $ | 13,046 | 3.83 | % | $ | 13,781 | 4.65 | % | ||||||||||||
For the Nine Months Ended | For the Nine Months Ended | |||||||||||||||||||
September 30, 2008 | September 30, 2007 | |||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||
NET INTEREST INCOME AND NET INTEREST MARGIN | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
(in $000's, unaudited) | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||
Assets: | ||||||||||||||||||||
Loans, gross | $ | 1,159,535 | $ | 53,524 | 6.17 | % | $ | 800,468 | $ | 49,541 | 8.27 | % | ||||||||
Securities | 129,570 | 4,201 | 4.33 | % | 170,650 | 5,853 | 4.59 | % | ||||||||||||
Interest bearing deposits in other financial institutions | 571 | 10 | 2.34 | % | 2,928 | 104 | 4.75 | % | ||||||||||||
Federal funds sold | 3,082 | 56 | 2.43 | % | 54,996 | 2,158 | 5.25 | % | ||||||||||||
Total interest earning assets | 1,292,758 | $ | 57,791 | 5.97 | % | 1,029,042 | $ | 57,656 | 7.49 | % | ||||||||||
Cash and due from banks | 36,085 | 36,299 | ||||||||||||||||||
Premises and equipment, net | 9,200 | 5,116 | ||||||||||||||||||
Goodwill and other intangible assets | 47,880 | 17,981 | ||||||||||||||||||
Other assets | 57,718 | 62,048 | ||||||||||||||||||
Total assets | $ | 1,443,641 | $ | 1,150,486 | ||||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Demand, interest bearing | $ | 149,451 | $ | 1,276 | 1.14 | % | $ | 143,685 | $ | 2,409 | 2.24 | % | ||||||||
Savings and money market | 453,146 | 6,375 | 1.88 | % | 369,268 | 8,721 | 3.16 | % | ||||||||||||
Time deposits, under $100 | 34,340 | 815 | 3.17 | % | 31,873 | 917 | 3.85 | % | ||||||||||||
Time deposits, $100 and over | 163,793 | 3,891 | 3.17 | % | 113,694 | 3,865 | 4.55 | % | ||||||||||||
Brokered time deposits | 96,921 | 2,928 | 4.04 | % | 51,359 | 1,757 | 4.57 | % | ||||||||||||
Notes payable to subsidiary grantor trusts | 23,702 | 1,610 | 9.07 | % | 23,702 | 1,749 | 9.87 | % | ||||||||||||
Securities sold under agreement to repurchase | 31,033 | 674 | 2.90 | % | 16,266 | 333 | 2.74 | % | ||||||||||||
Other short-term borrowings | 56,306 | 1,104 | 2.62 | % | 0 | 0 | N/ | A | ||||||||||||
Total interest bearing liabilities | 1,008,692 | $ | 18,673 | 2.47 | % | 749,847 | $ | 19,751 | 3.52 | % | ||||||||||
Demand, noninterest bearing | 257,054 | 234,943 | ||||||||||||||||||
Other liabilities | 27,785 | 23,319 | ||||||||||||||||||
Total liabilities | 1,293,531 | 1,008,109 | ||||||||||||||||||
Shareholders' equity: | 150,110 | 142,377 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,443,641 | $ | 1,150,486 | ||||||||||||||||
Net interest income / margin | $ | 39,118 | 4.04 | % | $ | 37,905 | 4.92 | % | ||||||||||||