EXHIBIT 99
PRESS RELEASE OF PROVIDENT NEW YORK BANCORP
| | |
| FOR IMMEDIATE RELEASE | | Stock Symbol: PBNY |
| July 28, 2008 | | Traded on NASDAQ Global Select Market |
PROVIDENT BANK CONTACT:
Paul A. Maisch, EVP & Chief Financial Officer
Miranda Grimm, VP & Controller
845.369.8040
PROVIDENT NEW YORK BANCORP: 23% INCREASE IN QUARTERLY EPS TO $0.16.
MONTEBELLO, NY – July 28, 2008 – Provident New York Bancorp (Nasdaq-Global Select Market: PBNY), the parent company of Provident Bank today announced third quarter results for the fiscal year ending September 30, 2008. Net income for the quarter was $6.3 million, or $0.16 per diluted share, compared to net income of $5.4 million, or $0.13 per diluted share for the third quarter of fiscal 2007. On a year-to-date basis, net income was $17.3 million or $0.44 per diluted share for fiscal 2008, compared to $14.5 million or $0.35 per diluted share in fiscal 2007. This represents increases of 19.4% and 25.7% respectively over the same period for fiscal 2007.
Highlights for the quarter include:
| • | | Net interest margin on a fully tax-equivalent basis was 4.04% for the third quarter of fiscal 2008, as compared to 3.80% for the third quarter of fiscal 2007, and 3.89% for the linked quarter ended March 31, 2008. |
| • | | The Company experienced 3.6% and 3.1% deposit growth over both fiscal year-end 2007 and the second quarter of fiscal 2008, respectively. Transaction accounts of $584.1 million have grown 11.0% since September 30, 2007. |
| • | | Loans grew $49.8million or 3.0% over year end 2007, mainly in the Commercial sector. |
| • | | Expense control continues to be strong as non-interest expense decreased in the prior year quarterly comparison, and increased by less than 1% on an annual basis. As a result the quarter’s efficiency ratio continued to improve from 69.7% in the third quarter of fiscal 2007 to 64.9% in the current year. |
| • | | Net charge-offs for the quarter were down to $812,000 from $1.9 million for the linked quarter and were up from $136,000 for the third quarter of fiscal 2007. |
President’s Comments
George Strayton, President and CEO commented: “Our business model is performing well in this challenging economic environment as evidenced by the significant increase in earnings. During the quarter, we grew our commercial loans by $31 million, or 3%, and our transaction account balances increased by $56 million, or 11% and continue to average 31% of our quarterly deposits. While achieving this growth, we are beginning to benefit from the absence of the loan conduits and institutional lenders, enabling us to obtain improved loan terms and conditions. Consistent with its
longstanding credit policies, Provident Bank does not originate or invest in subprime loans, although we will continue to build loan loss reserves in light of the current slowing of the economy. Disciplined management of interest expense, coupled with our loan growth, enabled us to return to a 4% net interest margin. Solid fee income, coupled with expense control, has led to an overall improvement in our efficiency ratio of almost five percentage points compared to the same quarter last year”.
Net Interest Income and Margin
Third quarter of fiscal 2008 compared with third quarter of fiscal 2007
Net interest income was $24.2 million for the third quarter of fiscal 2008, a $1.9 million increase from the same quarter of fiscal 2007. The net interest margin on a tax-equivalent basis was 4.04% for the third quarter of fiscal 2008, compared to 3.80% for the prior year’s third quarter. The third quarter of fiscal 2007 included a $500,000 reduction in interest expense associated with repayment of borrowings connected to prior acquisitions. Due to decreases in the federal funds target rate, the yield on loan balances declined 85 basis points. For the same period, the cost of interest bearing deposits decreased 84 basis points to 1.76% and the cost of borrowings decreased 86 basis points to 3.64%. The tax-equivalent yield on investments increased 31 basis points compared to the same quarter in 2007.
Third quarter fiscal 2008 compared with linked quarter ended March 31, 2008
Net interest income increased $947,000 from the quarter ended March 31, 2008. The tax-equivalent net interest margin increased 15 basis points from 3.89% for the quarter ended March 31, 2008. As a result of the recent reductions in the federal funds target rate, the tax-equivalent yield on average interest earning assets decreased by 23 basis points compared to the quarter ended March 31, 2008. The cost of average interest bearing liabilities decreased 48 basis points from the same linked quarter end. We attribute a substantial portion of this decrease to a continuing disciplined approach of pricing interest-bearing deposits.
Year-to-date comparison fiscal 2008 to fiscal 2007
On a year-to-date basis, net interest income increased $7.3 million for the nine-month period ended June 30, 2008 as compared to the same period in 2007, with the tax-equivalent net interest margin increasing from 3.52% to 3.89%.
Non-Interest Income
Third quarter of fiscal 2008 compared with third quarter of fiscal 2007
Non-interest income increased $36,000 to $5.0 million, relatively unchanged from the third quarter of fiscal 2007. Deposit service charges and fees increased $252,000, or 8.8%, which were offset by a decline in title insurance fees associated with a lower level of mortgage loan originations and lower “other” non-interest income, due to $235,000 in interest recorded on an IRS refund received in the third quarter of fiscal 2007.
Third quarter fiscal 2008 compared with linked quarter ended March 31, 2008
Non-interest income decreased $729,000 due to a net gain on the sale of securities of $961,000 realized in the linked quarter. Deposit service charges and fees, title insurance fees and investment management fees all increased over the linked quarter.
Year-to-date comparison fiscal 2008 to fiscal 2007
Non-interest income increased 5.4% compared to the same period in 2007. The largest increases were seen in deposit fees and service charges, investment management fees and net gains on security sales. Declines were seen in title insurance fees, and bank owned life insurance (due to a death benefit received in 2007) and “other” non-interest income (due to an IRS interest refund and exiting the student loan business in 2007).
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Non-Interest Expense
Third quarter of fiscal 2008 compared with third quarter of fiscal 2007
Non-interest expense decreased $95,000 over the third quarter of fiscal 2007. The primary reason for the decrease was the maturity of the Company’s first step ESOP loan in December 2007, in addition to lower advertising and promotion expense. Compensation and employee benefits increased due to employee related benefits and additional employees hired, as the Company added resources to its municipality business and opened a branch location in Tarrytown, Westchester County. Occupancy expense increased as the Company invested in branch relocations and recorded closure costs of $175,000.
Third quarter fiscal 2008 compared with linked quarter ended March 31, 2008
On a quarter-to-quarter basis, non-interest expense remained relatively unchanged with modest increases seen in compensation and benefits, and advertising and promotion, which were offset by declines in occupancy, professional fees, and data and check processing.
Year-to-date comparison fiscal 2008 to fiscal 2007
Non-interest expense increased by $457,000 or 0.8%, over year-to-date 2007 primarily due to compensation and benefits, and occupancy expense from indexed increases in rental costs and the costs of branch relocations and closures. These categories were partially offset by decreases in stock based compensation, the ESOP loan maturity, professional fees and advertising and promotion.
Income Taxes
The company’s effective tax rate was 28.8% for the third quarter of fiscal 2008, compared to 30.9% for the same period last year. The decrease was due to increased investment in tax-exempt securities as compared to the prior period and the maturity of the first step ESOP loan which was primarily non-deductible expense, as well as the Company recording a tax expense credit for expired reserves. The Company’s effective tax rate for the linked quarter ended March 31, 2008 was 28.1%. The effective tax rate for year-to-date 2008 was 29.3% compared to 30.0% for fiscal 2007.
Key Balance Sheet Changes at June 30, 2008 vs. September 30, 2007
| | • | | Gross loans grew $49.8 million to $1.7 billion, largely due to a 4.6% increase in commercial loans and a 2.0% increase in residential mortgage loans. |
| | • | | Securities decreased $13.8 million to $818.6 million, primarily due to the maturity of government agency securities. |
| | • | | Period end deposits increased $62.0 million at June 30, 2008, as compared to September 30, 2007, primarily due to increases in transaction accounts of $57.8 million or 11.0%, which in turn has benefited net interest income. |
| | • | | The Company invested an additional $5.0 million in bank owned life insurance during the quarter. |
Capital
Capital decreased $3.9 million from September 30, 2007 to $401.1 million at June 30, 2008, due to purchases of treasury stock. Treasury stock repurchases during the third quarter of fiscal 2008 totaled 306,443 shares and 1,570,757 shares fiscal year-to-date, at a cost of $3.9 million and $19.8 million, respectively. These purchases were partially offset by increases in the Company’s net income of $17.3 million, after dividends of $7.1 million, stock based compensation credits of $4.1 million and an improvement in other comprehensive income (loss) of $1.2 million, net of a reduction during the quarter of $8.3 million. As of June 30, 2008, 1,165,901 shares remain available for repurchase under the Company’s current stock repurchase program.
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Credit Quality
Net charge-offs for the quarter were $812,000, down from $1.9 million in the prior linked quarter and up from $136,000 for the quarter ended June 30, 2007. Net charge-offs year-to-date are $3.5 million or an annualized 0.28% of the average loan portfolio. Losses continue to be concentrated in the credit-scored community business loan portfolio. Net charge-offs in this portfolio for the third quarter were $731,800 on average outstandings of $99.2 million. During the quarter the Company provided $1.4 million in loan loss provisions, which was $588,000 in excess of net charge-offs. This resulted in an increase in the allowance for loan losses to $22.0 million, or 1.30% of loans outstanding, and 154% of non-performing loans. The primary reasons for increasing the allowance for loan losses were growth in the commercial and industrial and construction loan portfolios, and to a lesser degree an increase in classified loans. Nonperforming assets increased $692,000 to $14.4 million compared to March 31, 2008.
Additional Information
The Company does not hold any preferred stock of either FNMA or FHLMC (Fannie Mae or Freddie Mac) and currently has 120 shares of FNMA common stock. The Company holds $5 million in FNMA debentures in its securities portfolio and holds $615.7 million in mortgage backed securities issued by FHLMC and FNMA.
Note:
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company’s actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
Headquartered in Montebello, New York, Provident Bank is an independent full-service community bank. Provident Bank operates 33 branches that serve the Hudson Valley region and Bergen County, New Jersey. The bank offers a complete line of commercial, retail and investment management and trust services. Visit the Provident Bank web site atwww.providentbanking.com.
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Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | |
| | | June 30,
2008 | | | September 30,
2007 | | | June 30,
2007 | |
Assets: | | | | | | | | | | | | |
Cash and due from banks | | $ | 46,208 | | | $ | 47,291 | | | $ | 44,485 | |
Total securities | | | 818,603 | | | | 832,443 | | | | 836,365 | |
Loans: | | | | | | | | | | | | |
One- to four-family residential mortgage loans | | | 510,832 | | | | 500,825 | | | | 501,795 | |
Commercial real estate, commercial business and construction loans | | | 936,567 | | | | 895,233 | | | | 876,023 | |
Consumer loans | | | 240,452 | | | | 242,000 | | | | 236,023 | |
| | | | | | | | | | | | |
Total loans, gross | | | 1,687,851 | | | | 1,638,058 | | | | 1,613,841 | |
Allowance for loan losses | | | (22,001 | ) | | | (20,389 | ) | | | (20,699 | ) |
| | | | | | | | | | | | |
Total loans, net | | | 1,665,850 | | | | 1,617,669 | | | | 1,593,142 | |
Federal Home Loan Bank stock, at cost | | | 31,823 | | | | 32,801 | | | | 29,827 | |
Premises and equipment, net | | | 34,625 | | | | 30,079 | | | | 30,004 | |
Goodwill | | | 160,861 | | | | 161,154 | | | | 161,154 | |
Other amortizable intangibles | | | 8,966 | | | | 11,041 | | | | 11,782 | |
Bank owned life insurance | | | 47,135 | | | | 40,818 | | | | 40,387 | |
Other assets | | | 36,483 | | | | 28,803 | | | | 35,655 | |
| | | | | | | | | | | | |
Total assets | | $ | 2,850,554 | | | $ | 2,802,099 | | | $ | 2,782,801 | |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | |
Demand deposits | | $ | 384,381 | | | $ | 363,731 | | | $ | 355,990 | |
NOW deposits | | | 199,681 | | | | 162,537 | | | | 164,790 | |
| | | | | | | | | | | | |
Total transaction accounts | | | 584,062 | | | | 526,268 | | | | 520,780 | |
Savings | | | 351,431 | | | | 346,430 | | | | 369,886 | |
Money market deposits | | | 300,919 | | | | 277,793 | | | | 268,424 | |
Certificates of deposit | | | 539,308 | | | | 563,193 | | | | 589,737 | |
| | | | | | | | | | | | |
Total deposits | | | 1,775,720 | | | | 1,713,684 | | | | 1,748,827 | |
Borrowings | | | 635,596 | | | | 661,242 | | | | 595,411 | |
Mortgage escrow funds and other | | | 38,097 | | | | 22,084 | | | | 36,244 | |
| | | | | | | | | | | | |
Total liabilities | | | 2,449,413 | | | | 2,397,010 | | | | 2,380,482 | |
Stockholders’ equity | | | 401,141 | | | | 405,089 | | | | 402,319 | |
| | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,850,554 | | | $ | 2,802,099 | | | $ | 2,782,801 | |
| | | | | | | | | | | | |
Shares of common stock outstanding at period end | | | 39,839,335 | | | | 41,230,618 | | | | 41,666,538 | |
Book value per share | | $ | 10.07 | | | $ | 9.82 | | | $ | 9.66 | |
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Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, | | Quarter Ended
March 31,
2008 | | Year to Date Ended June 30, |
| | | 2008 | | 2007 | | | 2008 | | 2007 |
Interest and dividend income: | | | | | | | | | | | | | | | |
Loans and loan fees | | $ | 25,630 | | $ | 27,896 | | $ | 26,840 | | $ | 81,101 | | $ | 80,847 |
Securities | | | 9,774 | | | 9,449 | | | 9,799 | | | 29,123 | | | 29,923 |
Other earning assets | | | 662 | | | 641 | | | 726 | | | 2,052 | | | 1,819 |
| | | | | | | | | | | | | | | |
| | | 36,066 | | | 37,986 | | | 37,365 | | | 112,276 | | | 112,589 |
Interest expense: | | | | | | | | | | | | | | | |
Deposits | | | 6,187 | | | 9,010 | | | 7,785 | | | 22,895 | | | 26,985 |
Borrowings | | | 5,691 | | | 6,645 | | | 6,339 | | | 19,578 | | | 23,111 |
| | | | | | | | | | | | | | | |
Total interest expense | | | 11,878 | | | 15,655 | | | 14,124 | | | 42,473 | | | 50,096 |
| | | | | | | | | | | | | | | |
Net interest income | | | 24,188 | | | 22,331 | | | 23,241 | | | 69,803 | | | 62,493 |
Provision for loan losses | | | 1,400 | | | 400 | | | 3,000 | | | 5,100 | | | 1,200 |
| | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 22,788 | | | 21,931 | | | 20,241 | | | 64,703 | | | 61,293 |
Non-interest income: | | | | | | | | | | | | | | | |
Deposit fees and service charges | | | 3,100 | | | 2,848 | | | 3,061 | | | 9,183 | | | 8,478 |
Net gain on sales of securities | | | 22 | | | 0 | | | 961 | | | 983 | | | 4 |
Title insurance fees | | | 274 | | | 308 | | | 76 | | | 619 | | | 855 |
Bank owned life insurance | | | 455 | | | 432 | | | 428 | | | 1,317 | | | 1,613 |
Investment management fees | | | 750 | | | 759 | | | 729 | | | 2,242 | | | 2,107 |
Other | | | 423 | | | 641 | | | 498 | | | 1,392 | | | 1,871 |
| | | | | | | | | | | | | | | |
Total non-interest income | | | 5,024 | | | 4,988 | | | 5,753 | | | 15,736 | | | 14,928 |
Non-interest expense: | | | | | | | | | | | | | | | |
Compensation and benefits | | | 9,245 | | | 8,567 | | | 9,061 | | | 26,936 | | | 24,517 |
Stock-based compensation plans | | | 973 | | | 1,433 | | | 924 | | | 2,893 | | | 4,286 |
Occupancy and office operations | | | 3,090 | | | 2,827 | | | 3,294 | | | 9,309 | | | 8,670 |
Advertising and promotion | | | 933 | | | 1,267 | | | 828 | | | 2,628 | | | 3,024 |
Professional fees | | | 813 | | | 914 | | | 892 | | | 2,588 | | | 2,982 |
Data and check processing | | | 646 | | | 659 | | | 694 | | | 1,913 | | | 1,949 |
Amortization of intangible assets | | | 636 | | | 746 | | | 662 | | | 1,988 | | | 2,323 |
ATM/debit card expense | | | 456 | | | 471 | | | 455 | | | 1,412 | | | 1,365 |
Other | | | 2,163 | | | 2,166 | | | 2,114 | | | 6,334 | | | 6,428 |
| | | | | | | | | | | | | | | |
Total non-interest expense | | | 18,955 | | | 19,050 | | | 18,924 | | | 56,001 | | | 55,544 |
| | | | | |
Income before income tax expense | | | 8,857 | | | 7,869 | | | 7,070 | | | 24,438 | | | 20,677 |
| | | | | | | | | | | | | | | |
Income tax expense | | | 2,551 | | | 2,433 | | | 1,987 | | | 7,155 | | | 6,199 |
| | | | | | | | | | | | | | | |
Net income | | $ | 6,306 | | $ | 5,436 | | $ | 5,083 | | $ | 17,283 | | $ | 14,478 |
| | | | | | | | | | | | | | | |
Per common share: | | | | | | | | | | | | | | | |
Basic earnings | | $ | 0.16 | | $ | 0.13 | | $ | 0.13 | | $ | 0.44 | | $ | 0.35 |
Diluted earnings | | | 0.16 | | | 0.13 | | | 0.13 | | | 0.44 | | | 0.35 |
Dividends declared | | | 0.06 | | | 0.05 | | | 0.06 | | | 0.18 | | | 0.15 |
Weighted average common shares: | | | | | | | | | | | | | | | |
Basic | | | 38,719,917 | | | 40,722,093 | | | 38,847,528 | | | 39,014,150 | | | 41,012,030 |
Diluted | | | 39,110,353 | | | 41,223,958 | | | 39,214,041 | | | 39,402,248 | | | 41,551,464 |
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Selected Financial Condition Data:
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| (in thousands except share and per share data) | | 06/30/08 | | | 03/31/08 | | 12/31/07 | | 09/30/07 | | | 06/30/07 | |
| | | (In thousands) | |
End of Period | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,850,554 | | | $ | 2,823,506 | | $ | 2,799,342 | | $ | 2,802,099 | | | $ | 2,782,801 | |
Loans, gross (1) | | | 1,687,851 | | | | 1,653,638 | | | 1,655,437 | | | 1,638,058 | | | | 1,613,841 | |
Securities available for sale | | | 777,161 | | | | 801,784 | | | 780,714 | | | 794,997 | | | | 794,949 | |
Securities held to maturity | | | 41,442 | | | | 35,484 | | | 35,573 | | | 37,446 | | | | 41,416 | |
Bank owned life insurance | | | 47,135 | | | | 41,680 | | | 41,252 | | | 40,818 | | | | 40,387 | |
Goodwill | | | 160,861 | | | | 161,214 | | | 161,154 | | | 161,154 | | | | 161,154 | |
Other amortizable intangibles | | | 8,966 | | | | 9,633 | | | 10,324 | | | 11,041 | | | | 11,782 | |
Other non-earning assets | | | 71,108 | | | | 63,906 | | | 58,033 | | | 58,882 | | | | 65,659 | |
Deposits | | | 1,775,720 | | | | 1,722,101 | | | 1,672,538 | | | 1,713,684 | | | | 1,748,827 | |
Borrowings | | | 635,596 | | | | 664,115 | | | 686,508 | | | 661,242 | | | | 595,411 | |
Equity | | | 401,141 | | | | 408,163 | | | 401,923 | | | 405,089 | | | | 402,319 | |
Average Balances | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,822,885 | | | $ | 2,813,448 | | $ | 2,780,360 | | $ | 2,783,640 | | | $ | 2,772,666 | |
Loans, gross: | | | | | | | | | | | | | | | | | | |
Real estate- residential mortgage | | | 510,383 | | | | 500,930 | | | 499,915 | | | 500,261 | | | | 489,998 | |
Real estate- commercial mortgage | | | 528,308 | | | | 530,267 | | | 537,440 | | | 539,618 | | | | 541,364 | |
Real estate- construction & land development | | | 150,900 | | | | 153,816 | | | 152,615 | | | 144,615 | | | | 123,774 | |
Commercial and industrial | | | 229,122 | | | | 219,782 | | | 210,425 | | | 205,832 | | | | 197,493 | |
Consumer loans | | | 240,488 | | | | 243,552 | | | 243,456 | | | 238,073 | | | | 232,508 | |
Loans total (1) | | | 1,659,201 | | | | 1,648,347 | | | 1,643,851 | | | 1,628,399 | | | | 1,585,137 | |
Securities (taxable) | | | 653,292 | | | | 661,947 | | | 644,336 | | | 660,937 | | | | 695,016 | |
Securities (non-taxable) | | | 177,933 | | | | 168,968 | | | 164,144 | | | 156,328 | | | | 149,125 | |
Total earning assets | | | 2,503,004 | | | | 2,494,913 | | | 2,467,655 | | | 2,458,422 | | | | 2,441,036 | |
Non earning assets | | | 319,881 | | | | 318,535 | | | 312,705 | | | 325,218 | | | | 331,630 | |
Non-interest bearing checking | | | 357,515 | | | | 370,843 | | | 357,246 | | | 360,705 | | | | 348,698 | |
Interest bearing NOW accounts | | | 189,629 | | | | 169,187 | | | 143,396 | | | 152,926 | | | | 160,187 | |
Total transaction accounts | | | 547,144 | | | | 540,030 | | | 500,642 | | | 513,631 | | | | 508,885 | |
Savings (including mortgage escrow funds) | | | 364,763 | | | | 342,412 | | | 348,670 | | | 380,749 | | | | 383,955 | |
Money market deposits | | | 311,120 | | | | 267,310 | | | 259,931 | | | 266,714 | | | | 256,541 | |
Certificates of deposit | | | 545,413 | | | | 561,935 | | | 581,204 | | | 585,115 | | | | 589,733 | |
Total deposits and mortgage escrow | | | 1,768,440 | | | | 1,711,687 | | | 1,690,447 | | | 1,746,209 | | | | 1,739,114 | |
Total interest bearing deposits | | | 1,410,925 | | | | 1,340,844 | | | 1,333,201 | | | 1,385,504 | | | | 1,390,416 | |
Borrowings | | | 629,325 | | | | 675,150 | | | 665,380 | | | 612,274 | | | | 593,467 | |
Equity | | | 405,692 | | | | 405,326 | | | 403,146 | | | 401,617 | | | | 409,528 | |
Other comprehensive income / (loss) (SFAS 115), reflected in stockholders’ equity | | | (2,708 | ) | | | 5,638 | | | 1,477 | | | (3,917 | ) | | | (4,696 | ) |
Selected Operating Data: | | | | | | | | | | | | | | | | | | |
Condensed Tax Equivalent Income Statement | | | | | | | | | | | | | | | | | | |
Interest and dividend income | | $ | 36,066 | | | $ | 37,365 | | $ | 38,845 | | $ | 39,035 | | | $ | 37,986 | |
Tax equivalent adjustment* | | | 929 | | | | 918 | | | 880 | | | 832 | | | | 807 | |
Interest expense | | | 11,878 | | | | 14,124 | | | 16,471 | | | 16,792 | | | | 15,655 | |
| | | | | | | | �� | | | | | | | | | | |
Net interest income (tax equivalent) | | | 25,117 | | | | 24,159 | | | 23,254 | | | 23,075 | | | | 23,138 | |
Provision for loan losses | | | 1,400 | | | | 3,000 | | | 700 | | | 600 | | | | 400 | |
| | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 23,717 | | | | 21,159 | | | 22,554 | | | 22,475 | | | | 22,738 | |
Non-interest income | | | 5,024 | | | | 5,753 | | | 4,959 | | | 4,918 | | | | 4,988 | |
Non-interest expense | | | 18,955 | | | | 18,924 | | | 18,122 | | | 19,045 | | | | 19,050 | |
| | | | | | | | | | | | | | | | | | |
Income before income tax expense | | | 9,786 | | | | 7,988 | | | 9,391 | | | 8,348 | | | | 8,676 | |
Income tax expense (tax equivalent)* | | | 3,480 | | | | 2,905 | | | 3,497 | | | 3,200 | | | | 3,240 | |
| | | | | | | | | | | | | | | | | | |
Net income | | $ | 6,306 | | | $ | 5,083 | | $ | 5,894 | | $ | 5,148 | | | $ | 5,436 | |
| | | | | | | | | | | | | | | | | | |
| (1) | Does not reflect allowance for loan losses of $22,001, $21,413, $20,325, $20,389 and $20,699 |
| * | Tax exempt income assumed at a 35% federal rate |
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| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | 06/30/08 | | | 03/31/08 | | | 12/31/07 | | | 09/30/07 | | | 06/30/07 | |
Performance Ratios (annualized) | | | | | | | | | | | | | | | | | | | | |
Return on Average Assets | | | 0.90 | % | | | 0.73 | % | | | 0.84 | % | | | 0.73 | % | | | 0.78 | % |
Return on Average Equity | | | 6.25 | % | | | 5.04 | % | | | 5.80 | % | | | 5.09 | % | | | 5.32 | % |
Non-Interest Income to Average Assets | | | 0.72 | % | | | 0.82 | % | | | 0.71 | % | | | 0.70 | % | | | 0.72 | % |
Non-Interest Expense to Average Assets | | | 2.70 | % | | | 2.71 | % | | | 2.59 | % | | | 2.71 | % | | | 2.75 | % |
Operating Efficiency | | | 64.9 | % | | | 65.3 | % | | | 66.3 | % | | | 70.1 | % | | | 69.7 | % |
| | | | | |
Analysis of Net Interest Income | | | | | | | | | | | | | | | | | | | | |
Yield on: | | | | | | | | | | | | | | | | | | | | |
Loans | | | 6.30 | % | | | 6.63 | % | | | 7.00 | % | | | 7.18 | % | | | 7.15 | % |
Investment Securities- Tax Equivalent | | | 5.18 | % | | | 5.19 | % | | | 5.12 | % | | | 4.94 | % | | | 4.87 | % |
Earning Assets- Tax Equivalent | | | 5.94 | % | | | 6.17 | % | | | 6.39 | % | | | 6.43 | % | | | 6.37 | % |
Cost of: | | | | | | | | | | | | | | | | | | | | |
Interest Bearing Deposits | | | 1.76 | % | | | 2.34 | % | | | 2.66 | % | | | 2.70 | % | | | 2.60 | % |
Borrowings | | | 3.64 | % | | | 3.78 | % | | | 4.50 | % | | | 4.76 | % | | | 4.50 | % |
Interest Bearing Liabilities | | | 2.34 | % | | | 2.82 | % | | | 3.27 | % | | | 3.33 | % | | | 3.16 | % |
Net Interest Tax Equivalent: | | | | | | | | | | | | | | | | | | | | |
Net Interest Rate Spread- Tax Equivalent Basis | | | 3.60 | % | | | 3.35 | % | | | 3.12 | % | | | 3.10 | % | | | 3.21 | % |
Net Interest Margin- Tax Equivalent Basis | | | 4.04 | % | | | 3.89 | % | | | 3.74 | % | | | 3.72 | % | | | 3.80 | % |
| | | | | |
Capital Information Data | | | | | | | | | | | | | | | | | | | | |
Tier 1 Leverage Ratio- Bank Only | | | 8.32 | % | | | 8.14 | % | | | 8.22 | % | | | 8.07 | % | | | 8.16 | % |
Tier 1 Risk-Based Capital- Bank Only | | | 223,391 | | | | 215,420 | | | | 215,920 | | | | 212,497 | | | | 212,906 | |
Total Risk-Based Capital- Bank Only | | | 245,392 | | | | 236,833 | | | | 236,245 | | | | 232,886 | | | | 233,605 | |
Tangible Capital Consolidated | | | 231,314 | | | | 237,316 | | | | 231,186 | | | | 233,662 | | | | 230,175 | |
Tangible Capital as a % of Tangible Assets Consolidated | | | 8.63 | % | | | 8.95 | % | | | 8.80 | % | | | 8.88 | % | | | 8.75 | % |
Shares Outstanding | | | 39,839,335 | | | | 40,086,491 | | | | 40,125,457 | | | | 41,230,618 | | | | 41,666,538 | |
Shares Repurchased Per Stock Repurchase Program | | | 306,443 | | | | 147,514 | | | | 1,116,800 | | | | 460,490 | | | | 757,500 | |
Basic weighted common shares outstanding | | | 38,719,917 | | | | 38,847,528 | | | | 39,469,995 | | | | 40,101,720 | | | | 40,722,093 | |
Diluted common shares outstanding | | | 39,110,353 | | | | 39,214,041 | | | | 39,805,026 | | | | 40,543,035 | | | | 41,223,958 | |
Per Common Share: | | | | | | | | | | | | | | | | | | | | |
Basic Earnings | | $ | 0.16 | | | $ | 0.13 | | | $ | 0.15 | | | $ | 0.13 | | | $ | 0.13 | |
Diluted Earnings | | | 0.16 | | | | 0.13 | | | | 0.15 | | | | 0.13 | | | | 0.13 | |
Dividends Paid | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | 0.05 | | | | 0.05 | |
Book Value | | | 10.07 | | | | 10.18 | | | | 10.02 | | | | 9.82 | | | | 9.66 | |
Tangible Book Value | | | 5.81 | | | | 5.92 | | | | 5.76 | | | | 5.67 | | | | 5.52 | |
| | | | | |
Asset Quality Measurements | | | | | | | | | | | | | | | | | | | | |
Non-performing loans (NPLs): non-accrual | | | 9,595 | | | | 9,014 | | | | 6,053 | | | | 3,509 | | | | 3,956 | |
Non-performing loans (NPLs): still accruing | | | 4,647 | | | | 4,536 | | | | 3,317 | | | | 3,749 | | | | 3,716 | |
Non-performing assets (NPAs) | | | 14,380 | | | | 13,688 | | | | 9,507 | | | | 7,397 | | | | 8,377 | |
Net Charge-offs | | | 812 | | | | 1,912 | | | | 764 | | | | 910 | | | | 136 | |
Net Charge-offs as % of average loans (annualized) | | | 0.20 | % | | | 0.46 | % | | | 0.19 | % | | | 0.22 | % | | | 0.03 | % |
NPLs as % of total loans | | | 0.84 | % | | | 0.82 | % | | | 0.57 | % | | | 0.44 | % | | | 0.48 | % |
NPAs as % of total assets | | | 0.50 | % | | | 0.48 | % | | | 0.34 | % | | | 0.26 | % | | | 0.30 | % |
Allowance for loan losses as % of NPLs | | | 154 | % | | | 158 | % | | | 217 | % | | | 281 | % | | | 270 | % |
Allowance for loan losses as % of total loans | | | 1.30 | % | | | 1.29 | % | | | 1.23 | % | | | 1.26 | % | | | 1.28 | % |
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