Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE | Contact: Bernard H. Clineburg, |
Tysons Corner, Virginia | | Chairman, Chief Executive Officer |
July 18, 2012 | | or |
| | Mark A. Wendel, |
| | EVP, Chief Financial Officer |
| | 703-584-3400 |
CARDINAL ANNOUNCES SECOND QUARTER EARNINGS;
LOANS GROW 21%; ASSET QUALITY REMAINS STRONG,
Cardinal Financial Corporation (NASDAQ: CFNL) (the “Company”) today announced quarterly earnings of $10.2 million, or $0.34 per diluted share, for the period ended June 30, 2012. This is a 72% increase over earnings of $5.9 million, or $0.20 per diluted share, from the second quarter of last year. On a year-to-date basis, earnings were $17.8 million, or $0.59 per diluted share through June 30, 2012, versus $11.1 million, or $0.37 per diluted share, in 2011.
Selected Highlights
· At June 30, 2012, total assets of the Company were $2.7 billion, an increase of 25% from total assets of $2.2 billion at June 30, 2011.
· Loans held for investment grew to $1.75 billion, an increase of $303 million, or 21%, compared to June 30, 2011.
· Asset quality continues to be strong. Nonperforming loans remained low at 0.43% of total assets, and annualized net loan charge offs were 0.41% of average loans outstanding. Real estate owned increased slightly to $3.1 million from $2.5 million at March 31, 2012, and the Company currently has no loans receivable past due 90 days or more.
· Total deposits grew to $1.99 billion, an increase of 37% compared to June 30, 2011; demand deposit account balances increased 32% year over year.
· The results of our mortgage banking operations were exceptional, contributing net income of $4.4 million for the current quarter as the Company was positively
impacted by mortgage rates remaining near record lows, leading to a continuation of strong refinance activity and an increase in local home buying.
· The Company’s tax equivalent net interest margin decreased to 3.57% for the current quarter, down from 3.71% for the previous quarter and 3.84% for the year ago quarter.
· All capital ratios substantially exceed the requirements of banking regulators to be considered well-capitalized. Tangible common equity capital (TCE) as a percentage of total assets was 9.32%.
Income Statement Review
Net Interest Income
Compared to the year ago quarter, net interest income for the second quarter of 2012 increased 15% to $21.4 million from $18.7 million. Tax equivalent net interest margin for the three months ended June 30, 2012 decreased to 3.57% from 3.84% a year ago and from 3.71% for the first quarter of 2012. Comparing the current quarter to the first quarter of 2012, average loan balances increased $45 million, the average loan yield decreased 0.05%, the average yield on all earning assets decreased 0.13% and the average costs of interest-bearing liabilities increased 0.03%. The yield on earning assets decreased as the Company’s average short term investments increased $70.6 million in anticipation of upcoming funding requirements associated with its mortgage banking activities. Interest bearing liability rates increased primarily due to the success of the Company’s high yield “First Choice” checking campaign that began early in 2012. This promotion attracted approximately 2,200 new accounts and over $173 million in deposits.
Provision for Loan Losses
The allowance for loan losses was 1.52% of loans outstanding at June 30, 2012 compared to 1.56% at June 30, 2011. The provision for loan losses was $2.2 million for the current quarter versus $750,000 for the second quarter of last year. The Company’s nonperforming loans stood at 0.43% of total assets at June 30, 2012 compared to 0.53% at March 31, 2012 and 0.42% at June 30, 2011. Year-to-date 2012 net loan charge-offs totaled $3.6 million compared to $3.4 million for the first six months of 2011. There were no loans receivable past due 90 days or more and early stage loan delinquencies at 30-89 days past due at June 30, 2012 totaled $340,000.
Non-Interest Income
Commercial Banking: Non-interest income was $1.0 million for the current quarter compared to $1.3 million for the year ago quarter ended June 30, 2011. For the six months ended June 30, 2012 and 2011, non-interest income was $1.3 million and $2.1 million, respectively. For the three month comparable periods, deposit fees and loan fees increased $40,000 and $162,000, respectively. For the six month comparable periods, deposit and loan fees increased $72,000 and $312,000, respectively. These increases were offset by fewer gains realized from the sale of investment securities of $423,000 and $826,000 during the three and six month periods last year.
Mortgage Banking: Mortgage banking activities continued to be strong. Gains on sales of mortgage loans totaled $13.5 million for the second quarter of 2012 which consisted of realized gains of $6.9 million and unrealized gains of $6.6 million resulting from its locked commitments and closings. This compares to $4.3 million for the year ago quarter of 2011, which included realized gains of $2.9 million and unrealized gains of $1.4 million. For the year ended June 30, 2012, gains on sales of mortgage loans totaled $20.4 million, comprised of $12.0 million in realized gains and $8.4 million in unrealized gains. For year-to-date 2011, gains on sales of mortgage loans totaled $7.4 million which included realized gains of $5.1 million and unrealized gains of $2.3 million. For the current quarter and year to date 2012, the Company closed $1.4 billion and $2.8 billion, respectively, of loans for itself and on behalf of its managed mortgage company affiliates. This compares to $722 million and $1.2 billion during the same year ago time periods. Refinance activity represented approximately 50% of the originations during the second quarter of 2012, a decrease from over 65% experienced during the two previous quarters. Title insurance and other income increased $262,000 and $497,000 for the three and six months ended June 30, 2012 compared to the same periods of 2011. Managed mortgage company affiliate fee income increased $200,000 and $910,000 for the three and six months ended 2012 over the year ago three and six month periods.
Non-Interest Expense
Commercial Banking: Non-interest expense was $10.2 million for the current quarter compared to $10.4 million for the year ago quarter ended June 30, 2011. For the respective six month periods ended June 30, 2012 and 2011, non-interest expense was $21.8 million and $19.4 million. This has partially resulted from changes in personnel cost due to salary and incentive adjustments and due to increases in the number of employees hired to support the Bank’s growth. Marketing expenses increased approximately $407,000 and $910,000 for the three and six months ended June 30, 2012 compared to the year ago three and six month periods primarily due to advertising associated with the Company’s high yield “First Choice” checking campaign.
Mortgage Banking: For the three months ended June 30, 2012, non-interest expense increased to $8.7 million compared to $3.8 million for the quarter ended June 30, 2011. For the respective six month periods ended June 30, 2012 and 2011, non-interest expense was $13.6 million and $7.1 million, representing an increase of $6.5 million. For the three and six month comparable periods, salary, benefits and incentive expenses increased approximately $3.7 million and $4.5 million, respectively, as total employees increased to 297 at June 30, 2012 from 197 a year ago, which includes over 60 new loan officers that assisted with the dramatic increase in production mentioned above. Occupancy expense increased $239,000 and $451,000 for the three and six months ended June 30, 2012 versus the comparable periods of 2011 as a result of opening seven new locations since early 2011 for the new loan officers and their staff. The Company now has 15 mortgage banking offices. Other expense increases are primarily volume related.
Review of Balance Sheet
At June 30, 2012, total assets of the Company were $2.7 billion, an increase of 25% from total assets of $2.2 billion at June 30, 2011. Loans held for investment grew 21% to over $1.7 billion at June 30, 2012, from $1.4 billion at June 30, 2011. During this period, the Bank’s investment
portfolio decreased slightly to $313 million compared to $357 million a year ago. Loans held for sale were $519 million compared to $249 million at June 30, 2011.
The Bank’s asset growth was primarily funded by a 37% increase in deposits, which grew $542 million and totaled $1.99 billion at June 30, 2012 compared to $1.45 billion a year earlier. The deposit growth primarily resulted from the previously mentioned checking campaign. Additionally, the Company added approximately $155 million in traditional, longer term brokered CDs to establish permanent funding for the recent growth in loans held for investment. Demand deposit account balances increased 32% year over year, reflecting the Bank’s continued focus on generating lower funding costs.
Other Information
With respect to the previously disclosed matter involving the U.S. Department of Justice (the “DOJ”), the Company disclosed on May 14, 2012 that the DOJ has determined that it will not file a lawsuit at this time alleging that Cardinal Bank or George Mason Mortgage, LLC violated either the Fair Housing Act or the Equal Credit Opportunity Act. No further action on this matter is required by the Company and there were no requirements or effect on the Company associated with the resolution of this matter.
MANAGEMENT COMMENTS
Bernard H. Clineburg, Chairman and Chief Executive Officer of the Company, said:
“We are pleased to announce another solid quarter for Cardinal with strong balance sheet growth and earnings. Our Company’s loan portfolio growth and our mortgage banking production continued to be exemplary. Loan losses remained minimal as we maintain our ‘conservative on risk’ philosophy. We are also excited to welcome 1,700 new customers to our bank as a result of our First Choice Checking campaign.
Moving forward, our Company will continue to concentrate on gaining core market share and increasing franchise value for shareholders. We remain committed to building a great financial services company for our employees, clients, shareholders and the communities we serve.”
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements contain information related to matters such as the Company’s intent, belief or expectation with regard to such matters as financial and operational performance, credit quality and branch expansion. Such statements are necessarily based on management’s assumptions and estimates and are inherently subject to a variety of risks and uncertainties concerning the Company’s operations and business environment, which are difficult to predict and beyond the control of the Company. Such risks and uncertainties
could cause actual results of the Company to differ materially from those matters expressed or implied in such forward-looking statements. For an explanation of the risks and uncertainties associated with forward-looking statements, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and other reports filed with and furnished to the Securities and Exchange Commission.
About Cardinal Financial Corporation: Cardinal Financial Corporation, a financial holding company headquartered in Tysons Corner, Virginia with assets of $2.71 billion at June 30, 2012, serves the Washington Metropolitan region through its wholly-owned subsidiary, Cardinal Bank, with 27 conveniently located banking offices. Cardinal also operates several other subsidiaries: George Mason Mortgage, LLC, and Cardinal First Mortgage, LLC, residential mortgage lending companies based in Fairfax, with 15 offices throughout the Washington Metropolitan region; Cardinal Trust and Investment Services, a trust division; Cardinal Wealth Services, Inc., a full-service brokerage company; and Wilson/Bennett Capital Management, Inc., an asset management company. The Company’s stock is traded on NASDAQ (CFNL). For additional information please visit our Web site at www.cardinalbank.com or call (703) 584-3400.
Cardinal Financial Corporation and Subsidiaries
Summary Statements of Condition
June 30, 2012, December 31, 2011 and June 30, 2011
(Dollars in thousands)
| | (Unaudited) | | | | (Unaudited) | | % Change | |
| | June 30, 2012 | | December 31, 2011 | | June 30, 2011 | | Current Year | | Year Over Year | |
Cash and due from banks | | $ | 13,257 | | $ | 16,745 | | $ | 16,846 | | -20.8 | % | -21.3 | % |
Federal funds sold | | 16,164 | | 20,394 | | 6,208 | | -20.7 | % | 160.4 | % |
| | | | | | | | | | | |
Investment securities available-for-sale | | 297,826 | | 295,560 | | 339,020 | | 0.8 | % | -12.2 | % |
Investment securities held-to-maturity | | 12,236 | | 12,918 | | 15,601 | | -5.3 | % | -21.6 | % |
Investment securities — trading | | 2,969 | | 2,065 | | 2,291 | | 43.8 | % | 29.6 | % |
Total investment securities | | 313,031 | | 310,543 | | 356,912 | | 0.8 | % | -12.3 | % |
| | | | | | | | | | | |
Other investments | | 15,534 | | 17,120 | | 16,457 | | -9.3 | % | -5.6 | % |
Loans held for sale | | 519,349 | | 529,500 | | 248,649 | | -1.9 | % | 108.9 | % |
| | | | | | | | | | | |
Loans receivable, net of fees | | 1,748,715 | | 1,631,882 | | 1,445,921 | | 7.2 | % | 20.9 | % |
Allowance for loan losses | | (26,660 | ) | (26,159 | ) | (22,626 | ) | 1.9 | % | 17.8 | % |
Loans receivable, net | | 1,722,055 | | 1,605,723 | | 1,423,295 | | 7.2 | % | 21.0 | % |
| | | | | | | | | | | |
Premises and equipment, net | | 19,123 | | 19,302 | | 17,705 | | -0.9 | % | 8.0 | % |
Goodwill and intangibles, net | | 10,391 | | 10,490 | | 10,589 | | -0.9 | % | -1.9 | % |
Bank-owned life insurance | | 35,497 | | 35,154 | | 34,744 | | 1.0 | % | 2.2 | % |
Prepaid FDIC insurance premiums | | 2,771 | | 3,350 | | 3,430 | | -17.3 | % | -19.2 | % |
Other real estate owned | | 3,126 | | 3,046 | | 719 | | 2.6 | % | 334.8 | % |
Other assets | | 43,872 | | 31,349 | | 29,393 | | 39.9 | % | 49.3 | % |
| | | | | | | | | | | |
TOTAL ASSETS | | $ | 2,714,170 | | $ | 2,602,716 | | $ | 2,164,947 | | 4.3 | % | 25.4 | % |
| | | | | | | | | | | |
Non-interest bearing deposits | | $ | 303,138 | | $ | 263,752 | | $ | 230,431 | | 14.9 | % | 31.6 | % |
Interest bearing deposits | | 1,686,352 | | 1,511,508 | | 1,217,384 | | 11.6 | % | 38.5 | % |
Total deposits | | 1,989,490 | | 1,775,260 | | 1,447,815 | | 12.1 | % | 37.4 | % |
| | | | | | | | | | | |
Other borrowed funds | | 352,399 | | 510,385 | | 444,930 | | -31.0 | % | -20.8 | % |
Mortgage funding checks | | 50,088 | | 25,989 | | 11,634 | | 92.7 | % | 330.5 | % |
Escrow liabilities | | 3,409 | | 4,095 | | 2,057 | | -16.8 | % | 65.7 | % |
Other liabilities | | 42,362 | | 29,170 | | 20,981 | | 45.2 | % | 101.9 | % |
| | | | | | | | | | | |
Shareholders’ equity | | 276,422 | | 257,817 | | 237,530 | | 7.2 | % | 16.4 | % |
| | | | | | | | | | | |
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | | $ | 2,714,170 | | $ | 2,602,716 | | $ | 2,164,947 | | 4.3 | % | 25.4 | % |
Cardinal Financial Corporation and Subsidiaries
Summary Income Statements
Three and Six Months Ended June 30, 2012 and 2011
(Dollars in thousands, except share and per share data)
(Unaudited)
| | For the Three Months Ended | | | | For the Six Months Ended | | | |
| | June 30, | | | | June 30, | | | |
| | 2012 | | 2011 | | % Change | | 2012 | | 2011 | | % Change | |
Net interest income | | $ | 21,441 | | $ | 18,663 | | 14.9 | % | $ | 43,179 | | $ | 36,324 | | 18.9 | % |
Provision for loan losses | | (2,225 | ) | (750 | ) | 196.7 | % | (4,123 | ) | (1,860 | ) | 121.7 | % |
Net interest income after provision for loan losses | | 19,216 | | 17,913 | | 7.3 | % | 39,056 | | 34,464 | | 13.3 | % |
| | | | | | | | | | | | | |
Service charges on deposit accounts | | 473 | | 433 | | 9.2 | % | 918 | | 846 | | 8.5 | % |
Loan fees | | 441 | | 279 | | 58.1 | % | 825 | | 513 | | 60.8 | % |
Title insurance & other income | | 506 | | 244 | | 107.4 | % | 964 | | 467 | | 106.4 | % |
Investment fee income | | 649 | | 711 | | -8.7 | % | 1,262 | | 1,259 | | 0.2 | % |
Realized and unrealized gains on mortgage banking activities | | 13,513 | | 4,301 | | 214.2 | % | 20,395 | | 7,392 | | 175.9 | % |
Management fee income | | 883 | | 683 | | 29.3 | % | 1,892 | | 982 | | 92.7 | % |
Income from bank owned life insurance | | 171 | | 207 | | -17.4 | % | 343 | | 387 | | -11.4 | % |
Net realized gains (losses) on investment securities | | (29 | ) | 425 | | -106.8 | % | 158 | | 876 | | -82.0 | % |
Loss on sale of real estate | | — | | — | | 0.0 | % | (473 | ) | — | | -100.0 | % |
Other non-interest loss | | (44 | ) | (9 | ) | 388.9 | % | (40 | ) | (3 | ) | 1233.3 | % |
Total non-interest income | | 16,563 | | 7,274 | | 127.7 | % | 26,244 | | 12,719 | | 106.3 | % |
| | | | | | | | | | | | | |
Net interest income and non-interest income | | 35,779 | | 25,187 | | 42.1 | % | 65,300 | | 47,183 | | 38.4 | % |
| | | | | | | | | | | | | |
Salaries and benefits | | 10,872 | | 7,900 | | 37.6 | % | 20,384 | | 14,553 | | 40.1 | % |
Occupancy | | 1,751 | | 1,414 | | 23.8 | % | 3,460 | | 2,886 | | 19.9 | % |
Depreciation | | 643 | | 760 | | -15.4 | % | 1,244 | | 1,216 | | 2.3 | % |
Data processing & communications | | 1,031 | | 924 | | 11.6 | % | 2,197 | | 1,843 | | 19.2 | % |
Professional fees | | 832 | | 946 | | -12.1 | % | 1,571 | | 1,478 | | 6.3 | % |
FDIC insurance assessment | | 326 | | 610 | | -46.6 | % | 653 | | 1,244 | | -47.5 | % |
Mortgage loan repurchases and settlements | | 185 | | 400 | | -53.8 | % | 300 | | 500 | | -40.0 | % |
Loss on extinguishment of debt | | — | | — | | 0.0 | % | — | | 450 | | -100.0 | % |
Other operating expense | | 4,731 | | 3,330 | | 42.1 | % | 8,642 | | 6,253 | | 38.2 | % |
Total non-interest expense | | 20,371 | | 16,284 | | 25.1 | % | 38,451 | | 30,423 | | 26.4 | % |
Net income before income taxes | | 15,408 | | 8,903 | | 73.1 | % | 26,849 | | 16,760 | | 60.2 | % |
Provision for income taxes | | 5,257 | | 2,998 | | 75.4 | % | 9,045 | | 5,634 | | 60.5 | % |
NET INCOME | | $ | 10,151 | | $ | 5,905 | | 71.9 | % | $ | 17,804 | | $ | 11,126 | | 60.0 | % |
| | | | | | | | | | | | | |
Earnings per common share - basic | | $ | 0.34 | | $ | 0.20 | | 70.4 | % | $ | 0.60 | | $ | 0.38 | | 58.5 | % |
| | | | | | | | | | | | | |
Earnings per common share - diluted | | $ | 0.34 | | $ | 0.20 | | 70.7 | % | $ | 0.59 | | $ | 0.37 | | 58.9 | % |
| | | | | | | | | | | | | |
Weighted-average common shares outstanding - basic | | 29,639,938 | | 29,382,149 | | 0.9 | % | 29,612,979 | | 29,337,032 | | 0.9 | % |
| | | | | | | | | | | | | |
Weighted-average common shares outstanding - diluted | | 30,103,480 | | 29,884,189 | | 0.7 | % | 30,043,009 | | 29,841,614 | | 0.7 | % |
Cardinal Financial Corporation and Subsidiaries
Selected Financial Information
(Dollars in thousands, except per share data and ratios)
(unaudited)
| | For the Three Months Ended | | For the Six Months Ended | |
| | June 30, | | June 30, | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
Income Statements: | | | | | | | | | |
Interest income | | $ | 27,582 | | $ | 24,517 | | $ | 55,252 | | $ | 48,302 | |
Interest expense | | 6,141 | | 5,854 | | 12,073 | | 11,978 | |
Net interest income | | 21,441 | | 18,663 | | 43,179 | | 36,324 | |
Provision for loan losses | | 2,225 | | 750 | | 4,123 | | 1,860 | |
Net interest income after provision for loan losses | | 19,216 | | 17,913 | | 39,056 | | 34,464 | |
Non-interest income | | 16,563 | | 7,274 | | 26,244 | | 12,719 | |
Non-interest expense | | 20,371 | | 16,284 | | 38,451 | | 30,423 | |
Net income before income taxes | | 15,408 | | 8,903 | | 26,849 | | 16,760 | |
Provision (benefit) for income taxes | | 5,257 | | 2,998 | | 9,045 | | 5,634 | |
Net income | | $ | 10,151 | | $ | 5,905 | | $ | 17,804 | | $ | 11,126 | |
| | | | | | | | | |
Per Common Share Data: | | | | | | | | | |
Basic net income | | $ | 0.34 | | $ | 0.20 | | $ | 0.60 | | $ | 0.38 | |
Fully diluted net income | | 0.34 | | 0.20 | | 0.59 | | 0.37 | |
Book value | | 9.45 | | 8.21 | | 9.45 | | 8.21 | |
Tangible book value (1) | | 8.62 | | 7.58 | | 8.62 | | 7.58 | |
Common shares outstanding | | | | | | 29,253 | | 28,932 | |
| | | | | | | | | |
Performance Ratios: | | | | | | | | | |
Return on average assets | | 1.59 | % | 1.14 | % | 1.42 | % | 1.08 | % |
Return on average equity | | 14.78 | % | 9.99 | % | 13.18 | % | 9.59 | % |
Net interest margin (2) | | 3.57 | % | 3.84 | % | 3.64 | % | 3.75 | % |
Efficiency ratio (3) | | 53.60 | % | 62.78 | % | 55.39 | % | 62.03 | % |
Non-interest income to average assets | | 2.60 | % | 1.41 | % | 2.09 | % | 1.24 | % |
Non-interest expense to average assets | | 3.20 | % | 3.15 | % | 3.06 | % | 2.96 | % |
| | | | | | | | | |
Mortgage Banking Select Data: | | | | | | | | | |
$ of loans closed - George Mason Mortgage | | $ | 890,017 | | $ | 357,830 | | $ | 1,638,064 | | $ | 596,133 | |
$ of loans closed - Managed Mortgage Company Affiliates | | 505,219 | | 364,444 | | 1,168,754 | | 598,869 | |
Total | | 1,395,236 | | 722,274 | | 2,806,818 | | 1,195,002 | |
| | | | | | | | | |
# of loans closed - George Mason Mortgage | | 2,666 | | 1,024 | | 4,859 | | 1,764 | |
# of loans closed - Managed Mortgage Company Affiliates | | 1,336 | | 919 | | 3,103 | | 1,598 | |
Total | | 4,002 | | 1,943 | | 7,962 | | 3,362 | |
| | | | | | | | | |
Refi % of loans closed - George Mason Mortgage | | 52 | % | 27 | % | 60 | % | 33 | % |
Refi % of loans closed - Managed Mortgage Company Affiliates | | 46 | % | 19 | % | 56 | % | 23 | % |
Total | | 50 | % | 23 | % | 58 | % | 28 | % |
| | | | | | | | | |
$ of loan applications - George Mason Mortgage | | $ | 1,258,000 | | $ | 490,000 | | $ | 2,308,000 | | $ | 887,000 | |
$ of loan applications - Managed Mortgage Company Affiliates | | 652,000 | | 497,000 | | 1,427,000 | | 976,000 | |
Total | | 1,910,000 | | 987,000 | | 3,735,000 | | 1,863,000 | |
| | | | | | | | | |
Locked Pipeline at period end - George Mason Mortgage | | | | | | $ | 473,255 | | $ | 151,490 | |
| | | | | | | | | |
Asset Quality Data: | | | | | | | | | |
Annualized net charge-offs to average loans receivable, net of fees | | | | | | 0.41 | % | 0.49 | % |
Total nonaccrual loans | | | | | | $ | 11,536 | | $ | 9,145 | |
Real estate owned | | | | | | $ | 3,126 | | $ | 719 | |
Nonperforming loans to loans receivable, net of fees | | | | | | 0.66 | % | 0.63 | % |
Nonperforming loans to total assets | | | | | | 0.43 | % | 0.42 | % |
Nonperforming assets to total assets | | | | | | 0.54 | % | 0.46 | % |
Total loans receivable past due 30 to 89 days | | | | | | $ | 340 | | $ | — | |
Total loans receivable past due 90 days or more | | | | | | $ | — | | $ | — | |
Allowance for loan losses to loans receivable, net of fees | | | | | | 1.52 | % | 1.56 | % |
Allowance for loan losses to nonperforming loans | | | | | | 231.10 | % | 247.41 | % |
| | | | | | | | | |
Capital Ratios: | | | | | | | | | |
Tier 1 risk-based capital | | | | | | 11.74 | % | 12.46 | % |
Total risk-based capital | | | | | | 12.92 | % | 13.67 | % |
Leverage capital ratio | | | | | | 10.57 | % | 11.42 | % |
(1) Tangible book value is calculated as total shareholders’ equity, adjusted for changes in other comprehensive income, less goodwill and other intangible assets, divided by common shares outstanding.
(2) Net interest margin is calculated as net interest income divided by total average earning assets and reported on a tax equivalent basis at a rate of 35% for 2012 and 2011.
(3) Efficiency ratio is calculated as total non-interest expense (less nonrecurring expense) divided by the total of net interest income and non-interest income.
Cardinal Financial Corporation and Subsidiaries
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
Three and Six Months Ended June 30, 2012 and 2011
(Dollars in thousands)
(Unaudited)
| | For��the Three Months Ended | | For the Six Months Ended | |
| | June 30, 2012 | | June 30, 2011 | | June 30, 2012 | | June 30, 2011 | |
| | Average
Balance | | Average
Yield | | Average
Balance | | Average
Yield | | Average
Balance | | Average
Yield | | Average
Balance | | Average
Yield | |
Interest-earning assets: | | | | | | | | | | | | | | | | | |
Loans receivable, net of fees (1) | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 227,242 | | 4.02 | % | $ | 189,683 | | 4.50 | % | $ | 238,039 | | 4.12 | % | $ | 187,640 | | 4.47 | % |
Real estate - commercial | | 745,343 | | 5.42 | % | 641,619 | | 6.01 | % | 741,280 | | 5.47 | % | 635,671 | | 5.99 | % |
Real estate - construction | | 322,140 | | 5.45 | % | 245,202 | | 5.39 | % | 313,254 | | 5.35 | % | 243,220 | | 5.46 | % |
Real estate - residential | | 259,044 | | 4.85 | % | 212,046 | | 5.09 | % | 238,050 | | 4.94 | % | 213,655 | | 5.15 | % |
Home equity lines | | 120,038 | | 3.74 | % | 123,013 | | 3.71 | % | 120,653 | | 3.72 | % | 122,331 | | 3.71 | % |
Consumer | | 2,935 | | 5.48 | % | 3,162 | | 5.08 | % | 2,994 | | 5.24 | % | 3,090 | | 5.29 | % |
Total loans | | 1,676,742 | | 5.03 | % | 1,414,725 | | 5.37 | % | 1,654,270 | | 5.05 | % | 1,405,607 | | 5.38 | % |
| | | | | | | | | | | | | | | | | |
Loans held for sale | | 345,951 | | 4.16 | % | 166,131 | | 4.56 | % | 371,759 | | 4.11 | % | 137,661 | | 4.64 | % |
Investment securities - available-for-sale (1) | | 266,377 | | 4.39 | % | 336,561 | | 4.39 | % | 268,323 | | 4.41 | % | 333,497 | | 4.40 | % |
Investment securities - held-to-maturity | | 12,387 | | 2.56 | % | 16,007 | | 2.69 | % | 12,576 | | 2.60 | % | 18,343 | | 2.86 | % |
Other investments | | 16,332 | | 1.51 | % | 15,721 | | 0.80 | % | 16,394 | | 1.35 | % | 15,724 | | 0.80 | % |
Federal funds sold (1) | | 109,077 | | 0.24 | % | 19,834 | | 0.22 | % | 73,756 | | 0.24 | % | 48,547 | | 0.24 | % |
Total interest-earning assets | | 2,426,866 | | 4.58 | % | 1,968,979 | | 5.03 | % | 2,397,078 | | 4.65 | % | 1,959,379 | | 4.98 | % |
| | | | | | | | | | | | | | | | | |
Non-interest earning assets: | | | | | | | | | | | | | | | | | |
Cash and due from banks | | 15,422 | | | | 14,316 | | | | 16,087 | | | | 14,465 | | | |
Premises and equipment, net | | 18,673 | | | | 17,504 | | | | 18,466 | | | | 17,126 | | | |
Goodwill and intangibles, net | | 10,419 | | | | 10,616 | | | | 10,445 | | | | 10,642 | | | |
Accrued interest and other assets | | 103,100 | | | | 82,921 | | | | 100,949 | | | | 81,163 | | | |
Allowance for loan losses | | (26,894 | ) | | | (24,695 | ) | | | (26,978 | ) | | | (24,656 | ) | | |
| | | | | | | | | | | | | | | | | |
TOTAL ASSETS | | $ | 2,547,586 | | | | $ | 2,069,641 | | | | $ | 2,516,047 | | | | $ | 2,058,119 | | | |
| | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | |
Interest checking | | $ | 292,467 | | 1.04 | % | $ | 136,053 | | 0.19 | % | $ | 237,823 | | 0.88 | % | $ | 133,708 | | 0.19 | % |
Money markets | | 278,168 | | 0.36 | % | 164,827 | | 0.41 | % | 230,755 | | 0.38 | % | 158,092 | | 0.42 | % |
Statement savings | | 216,689 | | 0.31 | % | 241,493 | | 0.36 | % | 217,194 | | 0.34 | % | 248,344 | | 0.36 | % |
Certificates of deposit | | 812,593 | | 1.30 | % | 656,591 | | 1.75 | % | 890,161 | | 1.24 | % | 656,678 | | 1.79 | % |
Total interest-bearing deposits | | 1,599,917 | | 0.96 | % | 1,198,964 | | 1.11 | % | 1,575,933 | | 0.94 | % | 1,196,822 | | 1.13 | % |
| | | | | | | | | | | | | | | | | |
Other borrowed funds | | 316,301 | | 2.96 | % | 370,220 | | 2.75 | % | 329,388 | | 2.87 | % | 367,023 | | 2.88 | % |
Total interest-bearing liabilities | | 1,916,218 | | 1.29 | % | 1,569,184 | | 1.50 | % | 1,905,321 | | 1.27 | % | 1,563,845 | | 1.54 | % |
| | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | 321,424 | | | | 242,366 | | | | 306,542 | | | | 237,785 | | | |
Other liabilities | | 35,133 | | | | 21,759 | | | | 34,095 | | | | 24,541 | | | |
| | | | | | | | | | | | | | | | | |
Shareholders’ equity | | 274,811 | | | | 236,332 | | | | 270,089 | | | | 231,948 | | | |
| | | | | | | | | | | | | | | | | |
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | | $ | 2,547,586 | | | | $ | 2,069,641 | | | | $ | 2,516,047 | | | | $ | 2,058,119 | | | |
| | | | | | | | | | | | | | | | | |
NET INTEREST MARGIN (1) | | | | 3.57 | % | | | 3.84 | % | | | 3.64 | % | | | 3.75 | % |
(1) The average yields for loans receivable and investment securities available-for-sale are reported on a fully taxable-equivalent basis at a rate of 35% for 2012 and 2011.
Cardinal Financial Corporation and Subsidiaries
Segment Reporting at and for the Three and Six Months Ended June 30, 2012 and 2011
(Dollars in thousands)
(Unaudited)
At and for the Three Months Ended June 30, 2012:
| | Commercial | | Mortgage | | Wealth Management & | | | | Intersegment | | | |
| | Banking | | Banking | | Trust Services | | Other | | Elimination | | Consolidated | |
Net interest income | | $ | 21,056 | | $ | 593 | | $ | — | | $ | (208 | ) | $ | — | | $ | 21,441 | |
Provision for loan losses | | 2,225 | | — | | — | | — | | — | | 2,225 | |
Non-interest income | | 1,009 | | 14,936 | | 649 | | (24 | ) | (7 | ) | 16,563 | |
Non-interest expense | | 10,186 | | 8,684 | | 596 | | 912 | | (7 | ) | 20,371 | |
Provision for income taxes | | 3,193 | | 2,448 | | 16 | | (400 | ) | — | | 5,257 | |
Net income (loss) | | $ | 6,461 | | $ | 4,397 | | $ | 37 | | $ | (744 | ) | $ | — | | $ | 10,151 | |
| | | | | | | | | | | | | |
Average Assets | | $ | 2,553,766 | | $ | 347,048 | | $ | 556 | | $ | 283,807 | | $ | (637,591 | ) | $ | 2,547,586 | |
At and for the Three Months Ended June 30, 2011:
| | Commercial | | Mortgage | | Wealth Management & | | | | Intersegment | | | |
| | Banking | | Banking | | Trust Services | | Other | | Elimination | | Consolidated | |
Net interest income | | $ | 18,291 | | $ | 575 | | $ | — | | $ | (203 | ) | $ | — | | $ | 18,663 | |
Provision for loan losses | | 750 | | — | | — | | — | | — | | 750 | |
Non-interest income | | 1,300 | | 5,268 | | 711 | | 6 | | (11 | ) | 7,274 | |
Non-interest expense | | 10,359 | | 3,821 | | 690 | | 1,425 | | (11 | ) | 16,284 | |
Provision for income taxes | | 2,838 | | 722 | | 5 | | (567 | ) | — | | 2,998 | |
Net income (loss) | | $ | 5,644 | | $ | 1,300 | | $ | 16 | | $ | (1,055 | ) | $ | — | | $ | 5,905 | |
| | | | | | | | | | | | | |
Average Assets | | $ | 2,060,008 | | $ | 161,130 | | $ | 604 | | $ | 250,904 | | $ | (403,052 | ) | $ | 2,069,594 | |
At and for the Six Months Ended June 30, 2012:
| | Commercial | | Mortgage | | Wealth Management & | | | | Intersegment | | | |
| | Banking | | Banking | | Trust Services | | Other | | Elimination | | Consolidated | |
Net interest income | | $ | 42,357 | | $ | 1,239 | | $ | — | | $ | (417 | ) | $ | — | | $ | 43,179 | |
Provision for loan losses | | 3,865 | | 258 | | — | | — | | — | | 4,123 | |
Non-interest income | | 1,343 | | 23,487 | | 1,263 | | 167 | | (16 | ) | 26,244 | |
Non-interest expense | | 21,760 | | 13,593 | | 1,253 | | 1,861 | | (16 | ) | 38,451 | |
Provision for income taxes | | 5,894 | | 3,888 | | 2 | | (739 | ) | — | | 9,045 | |
Net income (loss) | | $ | 12,181 | | $ | 6,987 | | $ | 8 | | $ | (1,372 | ) | $ | — | | $ | 17,804 | |
| | | | | | | | | | | | | |
Average Assets | | $ | 2,524,295 | | $ | 371,186 | | $ | 566 | | $ | 283,440 | | $ | (663,440 | ) | $ | 2,516,047 | |
At and for the Six Months Ended June 30, 2011:
| | Commercial | | Mortgage | | Wealth Management & | | | | Intersegment | | | |
| | Banking | | Banking | | Trust Services | | Other | | Elimination | | Consolidated | |
Net interest income | | $ | 35,728 | | $ | 1,000 | | $ | — | | $ | (404 | ) | $ | — | | $ | 36,324 | |
Provision for loan losses | | 1,860 | | — | | — | | — | | — | | 1,860 | |
Non-interest income | | 2,076 | | 8,909 | | 1,259 | | 58 | | (33 | ) | 12,269 | |
Non-interest expense | | 19,354 | | 7,073 | | 1,463 | | 2,116 | | (33 | ) | 29,973 | |
Provision for income taxes | | 5,530 | | 1,011 | | (71 | ) | (836 | ) | — | | 5,634 | |
Net income (loss) | | $ | 11,060 | | $ | 1,825 | | $ | (133 | ) | $ | (1,626 | ) | $ | — | | $ | 11,126 | |
| | | | | | | | | | | | | |
Average Assets | | $ | 2,047,850 | | $ | 136,500 | | $ | 590 | | $ | 252,146 | | $ | (378,967 | ) | $ | 2,058,119 | |
