Exhibit 99.1
CONTACT:
B. Grant Yarber
President and Chief Executive Officer
Phone: (919) 645-3494
Email: gyarber@capitalbank-nc.com
FOR IMMEDIATE RELEASE
Capital Bank Corporation Announces 2007 Financial Results
RALEIGH, N.C. – January 22, 2008 – Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, today reported net income for the year ended December 31, 2007 of $7.9 million compared to $12.3 million for the year ended December 31, 2006. Earnings per share on a fully diluted basis were $0.68 for 2007 compared to $1.06 for 2006. The decline in earnings is primarily attributed to a $2.1 million decrease in net interest income, a $3.0 million increase in the provision for loan losses, which reflects a $2.8 million write down in the fourth quarter, and $1.4 million in restructuring costs during the fourth quarter of 2007. The restructuring costs included $0.8 million for occupancy expense, $0.3 million for equipment expense and $0.3 million of salary and benefit expense.
Multiple factors contributed to the decline in profitability in 2007. The net interest margin declined to 3.53% in 2007 from 3.94% in 2006, causing a decrease in net interest income. As the prime rate fell 100 basis points during the year, market rates for short term retail deposits remained elevated due to liquidity concerns in the wholesale credit markets. While Capital Bank does not normally utilize funding in the wholesale credit markets, many larger national banks that are dependant on wholesale funding moved aggressively into the retail deposit market, keeping retail deposit rates from declining in line with loan rates.
Commenting on the year, B. Grant Yarber, President and CEO stated, “Margin compression and the dramatic changes in the housing market had a significant impact on the operating environment for all banks, including Capital Bank. Responding to the market conditions, we undertook a number of projects during the year to improve competitiveness and profitability. These initiatives included various expense control measures, a restructuring of our investment portfolio, and many process improvements. Although those efforts could not offset the significant decline in net interest income due to the increase in interest expenses, we believe they will place our company in a much improved operating position in 2008 and beyond. We also continued our efforts in recruiting and retaining the best talent in our markets. Total loans for 2007 increased approximately 8.6% over total loans in 2006, with extraordinary growth coming in the Triangle and Western North Carolina regions of the franchise.”
As market conditions throughout 2007 declined, Capital Bank continued to monitor its loan portfolio. As a result of a review of all nonperforming assets conducted during the fourth quarter of 2007, Capital Bank decided to write-down approximately $2.8 million worth of non-performing assets, all of which were disclosed in prior quarters. Mark Redmond, Chief Credit Officer for Capital Bank, stated, “We decided to write these assets down after taking into account broad macro-economic conditions that began having a material impact on the resolution of these problem credits. Beyond these previously identified loans, no significant new problem loans were identified within the portfolio.” As a result of the $2.8 million write down plus other normal loan activity, the provision increased $3.0 million compared to 2006. Nonperforming assets at December 31, 2007 were 0.50% of total assets compared to 0.71% at September 30, 2007, and 0.42% at December 31, 2006. Past due loans as percent of total loans at the end of 2007 were 0.98% of total loans compared to 1.23% at September 30, 2007 and 1.11% at December 31, 2006.
Noninterest income declined approximately $427 thousand compared to 2006 with two significant items accounting for the change. During 2006, the Bank realized a gain on the early extinguishment of debt in the amount of approximately $276 thousand. In addition, during 2006 the Bank realized a gain on the sale of investments of approximately $188 thousand, and during 2007, the Bank realized a loss on the sale of investments of approximately $49 thousand, leading to a decrease in gain on sale of securities income in 2007 of approximately $237 thousand compared to 2006.
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The $2.1 million increase in noninterest expense was impacted by a number of efforts to improve future efficiency. Occupancy expense increased $1.2 million, of which approximately $0.8 million was the result of increased lease expense and depreciation of leasehold improvements due to changes in the remaining economic life of certain leased facilities. The economic life changes reflect management’s plans to close or restructure the facilities. Furniture and equipment expense increased $0.5 million, of which approximately $0.3 million was an increase in equipment expense due to a review of existing computer equipment, for which management changed its projections of its estimated useful life. Salaries and employee benefits expenses increased $1.3 million, of which approximately $0.3 was related to the retirement and replacement of the company’s Chief Financial Officer during the fourth quarter.
Total assets increased 6.7% from $1.42 billion at December 31, 2006 to $1.52 billion at December 31, 2007. Commercial loans, including commercial loans and loans for commercial real estate, were the predominate driver of growth for the year increasing $101.4 million, or 12.2%, between December 31, 2006 and December 31, 2007. This growth was partially offset by a net decline of $14.0 million in the other loan products. On a twelve month average balance basis, the average commercial loan portfolio increased $89.2 million, or 11.3%, while the average balance of all other loans decreased $14.5 million, or 8.1%.
The allowance for loan losses as a percent of total loans was 1.24% as of December 31, 2007 compared to 1.32% as of December 31, 2006 and 1.25% as of September 2007. The allowance for loan losses as a percent of nonperforming loans was 227% as of the end of the year compared to 131% at the end of September 2007 and 272% as of December 31, 2006.
“Capital Bank continues to analyze and evaluate its loan portfolio on a quarterly basis. With the volatility in the housing markets, particular attention was paid to our borrowers that engage in the construction and acquisition and development business during the third and fourth quarters in 2007. At the end of 2007, 11.4%, or $124 million, of the loan portfolio was in residential construction, while 13.3%, or $144.9 million, is in acquisition and development loans. Upon review of our loan files and extensive and ongoing conversations with our borrowers, we remain confident in the continued success of the portfolio. We continue to believe that the markets we serve in North Carolina are among the best and strongest economies in the nation,” stated B. Grant Yarber, President and CEO.
Deposits increased 4.1% from $1.06 billion at December 31, 2006 to $1.10 billion at December 31, 2007. On a twelve month average basis, average deposits increased 6.5% from $1.0 billion to $1.1 million. Core deposits excluding certificate of deposits increased $8.9 million on a comparative basis from December 31, 2006 to December 31, 2007; however on a twelve month average basis, the same accounts increased $67.3 million, or 15.4%, over the prior year’s average.
Capital Bank remains well capitalized by all measures, with total equity of $164.3 million as of December 31, 2007 compared to $161.7 million at the end of 2006. Equity as a percent of total assets was 10.8% as of December 31, 2007 compared to 11.4% as of December 31, 2006. On a tangible basis, which excludes goodwill and intangible assets from equity, equity was $101.0 million at December 31, 2007 compared to $97.1 million one year ago. On a percentage basis, tangible equity to tangible assets was 6.9% as of the end of 2007 compared to 7.2% the prior year end. During 2007, Capital Bank bought back 303,082 shares and rewarded its shareholders with $3.6 million in dividends. As of December 31, 2007, the book value of Capital Bank shares was $14.71 compared to $14.19 as of December 31, 2006. On a tangible basis, the book value per share was $9.04 at the end of 2007 compared to $8.53 in 2006.
Capital Bank Corporation, headquartered in Raleigh, N.C., with approximately $1.5 billion in total assets, offers a broad range of financial services. Capital Bank operates 26 banking offices in Asheville (3), Burlington (4), Cary, Graham (2), Hickory, Mebane, Morrisville, Oxford, Pittsboro, Raleigh (5), Sanford (3), Siler City, Wake Forest and Zebulon. The Company’s website is http://www.capitalbank-nc.com.
Information in this press release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Capital Bank Corporation’s filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward-looking statements in this press release.
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CAPITAL BANK CORPORATION
Summary of Operations
Three Months Ended December 31, 2007 | Three Months Ended December 31, 2006 | Year Ended December 31, 2007 | Year Ended December 31, 2006 | ||||||||||
(In thousands except per share data) | (Unaudited) | (Audited) | |||||||||||
Interest income | $ | 23,840 | $ | 23,505 | $ | 94,537 | $ | 86,952 | |||||
Interest expense | 12,871 | 11,898 | 50,406 | 40,754 | |||||||||
Net interest income | 10,969 | 11,607 | 44,131 | 46,198 | |||||||||
Provision for loan losses | 3,099 | 154 | 3,606 | 587 | |||||||||
Net interest income after provision for loan losses | 7,870 | 11,453 | 40,525 | 45,611 | |||||||||
Noninterest income | 2,176 | 2,448 | 8,906 | 9,333 | |||||||||
Noninterest expense | 10,126 | 9,098 | 38,449 | 36,335 | |||||||||
(Loss) income before taxes | (80 | ) | 4,803 | 10,982 | 18,609 | ||||||||
Income tax (benefit) expense | (125 | ) | 1,546 | 3,124 | 6,271 | ||||||||
Net income | $ | 45 | $ | 3,257 | $ | 7,858 | $ | 12,338 | |||||
Income per share – basic | $ | – | $ | 0.28 | $ | 0.69 | $ | 1.06 | |||||
Income per share – fully diluted | $ | – | $ | 0.28 | $ | 0.68 | $ | 1.06 | |||||
Weighted average shares outstanding: | |||||||||||||
Basic | 11,252 | 11,536 | 11,424 | 11,599 | |||||||||
Fully diluted | 11,316 | 11,619 | 11,493 | 11,684 |
End of Period Balances
2007 | 2006 | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(Dollars in thousands except per share data) | (Unaudited) | (Audited) | ||||||||||||||
Total assets | $ | 1,517,603 | $ | 1,490,244 | $ | 1,440,240 | $ | 1,481,141 | $ | 1,422,384 | ||||||
Investment securities | 259,116 | 249,083 | 241,666 | 248,726 | 239,047 | |||||||||||
Loans (gross)* | 1,095,107 | 1,070,656 | 1,022,147 | 1,025,464 | 1,008,052 | |||||||||||
Allowance for loan losses | 13,571 | 13,366 | 13,339 | 13,531 | 13,347 | |||||||||||
Total earning assets | 1,362,048 | 1,335,434 | 1,285,715 | 1,329,792 | 1,267,927 | |||||||||||
Deposits | 1,098,698 | 1,090,589 | 1,072,979 | 1,120,251 | 1,055,209 | |||||||||||
Shareholders’ equity | 164,300 | 164,089 | 162,402 | 163,855 | 161,681 | |||||||||||
Book value per share | $ | 14.71 | $ | 14.58 | $ | 14.17 | $ | 14.32 | $ | 14.19 | ||||||
Tangible book value per share | $ | 9.04 | $ | 8.93 | $ | 8.59 | $ | 8.71 | $ | 8.53 | ||||||
*Includes loans held for sale |
Average Balances
2007 | 2006 | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(Dollars in thousands) | (Unaudited) | (Audited) | ||||||||||||||
Total assets | $ | 1,492,563 | $ | 1,445,915 | $ | 1,436,584 | $ | 1,437,234 | $ | 1,410,668 | ||||||
Investments | 242,272 | 252,090 | 248,850 | 243,732 | 219,765 | |||||||||||
Loans (gross)* | 1,090,801 | 1,042,635 | 1,021,517 | 1,012,483 | 1,008,053 | |||||||||||
Total earning assets | 1,347,727 | 1,302,859 | 1,292,651 | 1,292,811 | 1,258,780 | |||||||||||
Deposits | 1,066,438 | 1,064,174 | 1,078,430 | 1,084,418 | 1,050,139 | |||||||||||
Shareholders’ equity | 166,222 | 163,850 | 164,877 | 163,291 | 162,525 | |||||||||||
*Includes loans held for sale |
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CAPITAL BANK CORPORATION
Quarterly Results
2007 | 2006 | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(In thousands except per share data) | (Unaudited) | (Audited) | ||||||||||||||
Interest income | $ | 23,840 | $ | 23,855 | $ | 23,668 | $ | 23,175 | $ | 23,505 | ||||||
Interest expense | 12,871 | 12,670 | 12,414 | 12,452 | 11,898 | |||||||||||
Net interest income | 10,969 | 11,185 | 11,254 | 10,723 | 11,607 | |||||||||||
Provision (credit) for loan losses | 3,099 | 261 | (91 | ) | 337 | 154 | ||||||||||
Net interest income after provision for loan losses | 7,870 | 10,924 | 11,345 | 10,386 | 11,453 | |||||||||||
Noninterest income | 2,176 | 2,233 | 2,307 | 2,190 | 2,448 | |||||||||||
Noninterest expense | 10,126 | 9,299 | 9,788 | 9,236 | 9,098 | |||||||||||
(Loss) income before taxes | (80 | ) | 3,858 | 3,864 | 3,340 | 4,803 | ||||||||||
Income tax (benefit) expense | (125 | ) | 1,105 | 1,188 | 956 | 1,546 | ||||||||||
Net income | $ | 45 | $ | 2,753 | $ | 2,676 | $ | 2,384 | $ | 3,257 | ||||||
Income per share – basic | $ | – | $ | 0.24 | $ | 0.23 | $ | 0.21 | $ | 0.28 | ||||||
Income per share – fully diluted | $ | – | $ | 0.24 | $ | 0.23 | $ | 0.21 | $ | 0.28 | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 11,252 | 11,451 | 11,503 | 11,493 | 11,536 | |||||||||||
Fully diluted | 11,316 | 11,510 | 11,574 | 11,573 | 11,619 |
Quarterly Net Interest Margin*
2007 | 2006 | ||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||||||
(Unaudited) | (Audited) | ||||||||||
Yield on earning assets | 7.17% | 7.42% | 7.51% | 7.43% | 7.53% | ||||||
Cost of interest bearing liabilities | 4.33% | 4.32% | 4.34% | 4.36% | 4.18% | ||||||
Net interest spread | 2.84% | 3.10% | 3.17% | 3.07% | 3.35% | ||||||
Net interest margin | 3.38% | 3.57% | 3.65% | 3.52% | 3.78% | ||||||
*Annualized and on a fully taxable equivalent basis |
Nonperforming Assets
2007 | 2006 | ||||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||
(Dollars in thousands) | (Unaudited) | (Audited) | |||||||||||||||
Commercial and commercial real estate | $ | 4,488 | $ | 7,304 | $ | 6,089 | $ | 5,725 | $ | 2,783 | |||||||
Consumer | 361 | 23 | 67 | 241 | 50 | ||||||||||||
Equity lines | 397 | 491 | 471 | 433 | 410 | ||||||||||||
Construction | 230 | – | – | – | 616 | ||||||||||||
Mortgage | 507 | 2,414 | 975 | 957 | 1,043 | ||||||||||||
Total nonperforming loans | 5,982 | 10,232 | 7,602 | 7,356 | 4,902 | ||||||||||||
Other real estate owned | 1,571 | 309 | 866 | 1,961 | 1,111 | 1 | |||||||||||
Total nonperforming assets | $ | 7,553 | $ | 10,541 | $ | 8,468 | $ | 9,317 | $ | 6,013 | |||||||
Nonperforming assets include loans that are 90 days or more past due or in nonaccrual status and other real estate owned. | |||||||||||||||||
1Other real estate owned excludes $739 as of December 31, 2006 related to branch locations held for sale. |
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CAPITAL BANK CORPORATION
Key Ratios
2007 | 2006 | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | ||||||||||||
(Dollars in thousands) | (Unaudited) | (Audited) | ||||||||||||||
Past due loans | $ | 10,769 | $ | 13,157 | $ | 13,008 | $ | 16,241 | $ | 11,237 | ||||||
Past due loans as a percent of total loans | 0.98% | 1.23% | 1.27% | 1.58% | 1.11% | |||||||||||
Net charge-offs | $ | 2,894 | $ | 234 | $ | 101 | $ | 153 | $ | 4,584 | ||||||
Net charge-offs as a percent of average loans (annualized) | 1.06% | 0.09% | 0.04% | 0.06% | 1.82% | |||||||||||
Allowance for loan losses as a percent of total loans | 1.24% | 1.25% | 1.30% | 1.32% | 1.32% | |||||||||||
Nonperforming assets as a percent of total assets | 0.50% | 0.71% | 0.59% | 0.63% | 0.42% | |||||||||||
Allowance for loan losses as a percent of nonperforming loans | 227% | 131% | 175% | 184% | 272% |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2007 and December 31, 2006
December 31, 2007 | December 31, 2006 | 2007–2006 Change | 2007–2006 % Change | |||||||||||||
(Dollars in thousands) | (Unaudited) | (Audited) | ||||||||||||||
ASSETS | ||||||||||||||||
Cash and due from banks: | ||||||||||||||||
Interest earning | $ | 7,815 | $ | 12,348 | $ | (4,533 | ) | (36.7 | )% | |||||||
Noninterest earning | 32,347 | 33,504 | (1,157 | ) | (3.5 | )% | ||||||||||
Federal funds sold and short term investments | 10 | 8,480 | (8,470 | ) | (99.9 | )% | ||||||||||
Investment securities – available for sale, at fair value | 249,094 | 228,214 | 20,880 | 9.1 | % | |||||||||||
Investment securities – held to maturity, at amortized cost | 10,022 | 10,833 | (811 | ) | (7.5 | )% | ||||||||||
Loans – net of unearned income and deferred fees | 1,095,107 | 1,008,052 | 87,055 | 8.6 | % | |||||||||||
Allowance for loan losses | (13,571 | ) | (13,347 | ) | (224 | ) | 1.7 | % | ||||||||
Net loans | 1,081,536 | 994,705 | 86,831 | 8.7 | % | |||||||||||
Premises and equipment, net | 23,863 | 23,125 | 738 | 3.2 | % | |||||||||||
Bank owned life insurance | 21,589 | 20,662 | 927 | 4.5 | % | |||||||||||
Deposit premium and goodwill, net | 63,345 | 64,543 | (1,198 | ) | (1.9 | )% | ||||||||||
Deferred tax assets | 5,829 | 6,150 | (321 | ) | (5.2 | )% | ||||||||||
Other assets | 22,153 | 19,820 | 2,333 | 11.8 | % | |||||||||||
Total assets | $ | 1,517,603 | $ | 1,422,384 | $ | 95,219 | 6.7 | % | ||||||||
LIABILITIES | ||||||||||||||||
Deposits: | ||||||||||||||||
Demand, noninterest bearing | $ | 114,780 | $ | 120,945 | $ | (6,165 | ) | (5.1 | )% | |||||||
Savings and interest-bearing demand deposits | 381,258 | 366,243 | 15,015 | 4.1 | % | |||||||||||
Time deposits | 602,660 | 568,021 | 34,639 | 6.1 | % | |||||||||||
Total deposits | 1,098,698 | 1,055,209 | 43,489 | 4.1 | % | |||||||||||
Repurchase agreements and federal funds purchased | 39,900 | 34,238 | 5,662 | 16.5 | % | |||||||||||
Borrowings | 163,347 | 125,924 | 37,423 | 29.7 | % | |||||||||||
Overnight Fed funds purchased | 5,395 | – | 5,395 | – | ||||||||||||
Subordinated debentures | 30,930 | 30,930 | – | 0.0 | % | |||||||||||
Other liabilities | 15,033 | 14,402 | 631 | 4.4 | % | |||||||||||
Total liabilities | 1,353,303 | 1,260,703 | 92,600 | 7.3 | % | |||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Common stock, no par value; 20,000,000 authorized; 11,169,777and 11,393,990issued and outstanding as of December 31, 2007 and December 31, 2006, respectively | 136,132 | 139,484 | (3,352 | ) | (2.4 | )% | ||||||||||
Retained earnings | 28,007 | 23,754 | 4,253 | 17.9 | % | |||||||||||
Accumulated other comprehensive loss | 161 | (1,557 | ) | 1,718 | (110.3 | )% | ||||||||||
Total shareholders’ equity | 164,300 | 161,681 | 2,619 | 1.6 | % | |||||||||||
Total liabilities and shareholders’ equity | $ | 1,517,603 | $ | 1,422,384 | $ | 95,219 | 6.7 | % |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Twelve Months Ended December 31, 2007 and 2006
2007 | 2006 | 2007–2006 Change | 2007–2006 % Change | ||||||||||
(Dollars in thousands, except share and per share data) | (Unaudited) | (Audited) | |||||||||||
Interest income: | |||||||||||||
Loans and loan fees | $ | 82,066 | $ | 76,180 | $ | 5,886 | 7.7% | ||||||
Investment securities | 11,418 | 9,049 | 2,369 | 26.2% | |||||||||
Federal funds and other interest income | 1,053 | 1,723 | (670) | (38.9)% | |||||||||
Total interest income | 94,537 | 86,952 | 7,585 | 8.7% | |||||||||
Interest expense: | |||||||||||||
Deposits | 39,700 | 31,424 | 8,276 | 26.3% | |||||||||
Borrowings and repurchase agreements | 10,706 | 9,330 | 1,376 | 14.7% | |||||||||
Total interest expense | 50,406 | 40,754 | 9,652 | 23.7% | |||||||||
Net interest income | 44,131 | 46,198 | (2,067) | (4.5)% | |||||||||
Provision for loan losses | 3,606 | 587 | 3,019 | 514.3% | |||||||||
Net interest income after provision for loan losses | 40,525 | 45,611 | (5,086) | (11.2)% | |||||||||
Noninterest income: | |||||||||||||
Service charges and other fees | 4,058 | 3,865 | 193 | 5.0% | |||||||||
Mortgage fees and revenues | 2,029 | 2,102 | (73) | (3.5)% | |||||||||
Net (loss) gain on sale of securities | (49) | 188 | (237) | (126.1)% | |||||||||
Bank owned life insurance | 740 | 833 | (93) | (11.2)% | |||||||||
Gain on early extinguishment of debt | – | 276 | (276) | (100.0)% | |||||||||
Other | 2,128 | 2,069 | 59 | 2.9% | |||||||||
Total noninterest income | 8,906 | 9,333 | (427) | (4.6)% | |||||||||
Noninterest expense: | |||||||||||||
Salaries and employee benefits | 19,877 | 18,532 | 1,345 | 7.3% | |||||||||
Occupancy | 4,870 | 3,693 | 1,177 | 31.9% | |||||||||
Furniture and equipment | 2,859 | 2,342 | 517 | 22.1% | |||||||||
Director fees | 424 | 1,264 | (840) | (66.5)% | |||||||||
Data processing | 1,353 | 1,070 | 283 | 26.4% | |||||||||
Advertising | 1,137 | 1,041 | 96 | 9.2% | |||||||||
Amortization of deposit premiums | 1,198 | 1,370 | (172) | (12.6)% | |||||||||
Professional fees | 1,426 | 1,164 | 262 | 22.5% | |||||||||
Other | 5,305 | 5,859 | (554) | (9.5)% | |||||||||
Total noninterest expenses | 38,449 | 36,335 | 2,114 | 5.8% | |||||||||
Net income before tax expense | 10,982 | 18,609 | (7,627) | (41.0)% | |||||||||
Income tax expense | 3,124 | 6,271 | (3,147) | (50.2)% | |||||||||
Net income | $ | 7,858 | $ | 12,338 | $ | (4,480) | (36.3)% | ||||||
Earnings per share – basic | $ | 0.69 | $ | 1.06 | $ | (0.37) | |||||||
Earnings per share – diluted | $ | 0.68 | $ | 1.06 | $ | (0.38) | |||||||
Weighted average shares: | |||||||||||||
Basic | 11,424,171 | 11,598,502 | (174,331) | ||||||||||
Fully diluted | 11,492,728 | 11,683,674 | (190,946) |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31, 2007 and 2006
2007 | 2006 | 2007–2006 Change | 2007–2006 % Change | ||||||||||
(Dollars in thousands, except share and per share data) | (Unaudited) | (Audited) | |||||||||||
Interest income: | |||||||||||||
Loans and loan fees | $ | 20,835 | $ | 20,534 | $ | 301 | 1.5% | ||||||
Investment securities | 2,835 | 2,561 | 274 | 10.7% | |||||||||
Federal funds and other interest income | 170 | 410 | (240) | (58.5)% | |||||||||
Total interest income | 23,840 | 23,505 | 335 | 1.4% | |||||||||
Interest expense: | |||||||||||||
Deposits | 9,929 | 9,309 | 620 | 6.7% | |||||||||
Borrowings and repurchase agreements | 2,942 | 2,589 | 353 | 13.6% | |||||||||
Total interest expense | 12,871 | 11,898 | 973 | 8.2% | |||||||||
Net interest income | 10,969 | 11,607 | (638) | (5.5)% | |||||||||
Provision for loan losses | 3,099 | 154 | 2,945 | 1912.3% | |||||||||
Net interest income after provision for loan losses | 7,870 | 11,453 | (3,583) | (31.3)% | |||||||||
Noninterest income: | |||||||||||||
Service charges and other fees | 1,111 | 944 | 167 | 17.7% | |||||||||
Mortgage fees and revenues | 347 | 577 | (230) | (39.9)% | |||||||||
Net (loss) gain on sale of securities | (49) | 60 | (109) | (181.7)% | |||||||||
Bank owned life insurance | 192 | 236 | (44) | (18.6)% | |||||||||
Gain on early extinguishment of debt | – | 276 | (276) | (100.0)% | |||||||||
Other | 575 | 355 | 220 | 62.0% | |||||||||
Total noninterest income | 2,176 | 2,448 | (272) | (11.1)% | |||||||||
Noninterest expense: | |||||||||||||
Salaries and employee benefits | 4,579 | 4,852 | (273) | (5.6)% | |||||||||
Occupancy | 1,841 | 933 | 908 | 97.3% | |||||||||
Furniture and equipment | 933 | 613 | 320 | 52.2% | |||||||||
Director fees | (145) | 236 | (381) | (161.4)% | |||||||||
Data processing | 381 | 256 | 125 | 48.8% | |||||||||
Advertising | 366 | 228 | 138 | 60.5% | |||||||||
Amortization of deposit premiums | 298 | 342 | (44) | (12.9)% | |||||||||
Professional fees | 470 | 308 | 162 | 52.6% | |||||||||
Other | 1,403 | 1,330 | 73 | 5.5% | |||||||||
Total noninterest expenses | 10,126 | 9,098 | 1,028 | 11.3% | |||||||||
Net (loss) income before tax expense | (80) | 4,803 | (4,883) | (101.7)% | |||||||||
Income tax (benefit) expense | (125) | 1,546 | (1,671) | (108.1)% | |||||||||
Net income | $ | 45 | $ | 3,257 | $ | (3,212) | (98.6)% | ||||||
Earnings per share – basic | $ | 0.00 | $ | 0.28 | $ | (0.28) | |||||||
Earnings per share – diluted | $ | 0.00 | $ | 0.28 | $ | (0.28) | |||||||
Weighted average shares: | |||||||||||||
Basic | 11,251,525 | 11,535,931 | (284,406) | ||||||||||
Fully diluted | 11,315,934 | 11,618,603 | (302,669) |
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