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 Solid Earnings, Improved Asset Quality Despite Economy
RALEIGH, N.C. – July 22, 2008 – Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, today reported net income for the six months ended June 30, 2008 of $4.4 million compared to $5.1 million for the six months ended June 30, 2007. Earnings per share on a fully diluted basis were $.39 for the first six months of 2008 compared to $.44 for the first six months of 2007. Net income was $2.2 million, or $.20 per share on a fully diluted basis, for the second quarter ended June 30, 2008 compared to $2.7 million, or $.23 per share on a fully diluted basis, for the second quarter ended June 30, 2007.
“In spite of the current negative economic trends, Capital Bank continues to experience strong credit quality in our portfolio. We attribute our success in this arena to our ongoing strong commitment to prudent credit management and our franchise being located within the best markets in the country. We remain cautiously optimistic that our clients will be able to withstand this economic downturn. In addition to asset quality, we continue to manage our capital position and do not anticipate a need to raise additional capital in the foreseeable future,” stated B. Grant Yarber, president and CEO.
Asset quality continued to improve during the second quarter of 2008 compared to both the first quarter of 2008 and the second quarter of 2007. Past due loans as a percent of total loans declined to 0.78% at June 30, 2008 from 0.82% at March 31, 2008 and 1.27% at June 30, 2007. Nonperforming assets, which include loans on nonaccrual and other real estate owned, decreased to 0.37% as a percent of total assets at the end of June 2008 compared to 0.59% at June 30, 2007 and increased slightly from 0.33% at March 31, 2008. Allowance for loan losses totaled 1.18% of total loans at June 30, 2008 compared to 1.30% at June 30, 2007 and 1.18% at March 31, 2008. The allowance for loan losses was 267% of nonperforming loans as of June 30, 2008 compared to 175% at the end of the second quarter 2007 and 319% at the end of March 2008.
Capital Bank achieved $83.1 million in loan growth during the first half of 2008. Much of the growth has occurred in the Triangle and Western North Carolina markets which we believe continue to present excellent growth opportunities. Deposits increased $83.9 million during the first half of 2008 from $1.10 billion at December 31, 2007 to $1.18 billion at June 30, 2008. Checking accounts increased $38.4 million from December 31, 2007 as the bank continued to emphasize growth in this critical product area. Time deposits increased $75.2 million over the same period. Some of the growth in time deposits was due to retail customers shifting funds from money market savings products to CDs. Money market deposits decreased $29.7 million over the same period.
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Net interest income for the first six months of 2008 decreased $132 thousand compared to the first six months of 2007. This decline was due to the impact of a decrease in net interest margin from 3.59% to 3.21% for the first six months of 2007 and 2008, respectively. Nearly offsetting this decline in net interest margin was 9.7% growth in average earning assets for the comparable periods.
Provision for loan losses increased $1.2 million for the six months ended June 30, 2008 compared to the same period in 2007. During 2007, Capital Bank enhanced its methodology for calculating the allowance for loan losses based on updated guidance issued through an interagency policy statement by the Federal Reserve, the FDIC and other regulatory agencies. Largely due to the enhancements in methodology, the allowance was reduced during the second quarter of 2007, creating a credit for loan losses of $91 thousand compared to a provision for loan losses of $850 thousand during the second quarter of 2008. Management continues to thoroughly review its loan portfolio and the adequacy of its allowance for loan losses.
Noninterest income increased $627 thousand or approximately 13.7% on a year-to-date basis compared to the same period one year ago despite a $470 thousand decline in mortgage revenue. Service charge income, bank card income and brokerage income increased a combined $721 thousand, or 28.5%, compared to the same period one year ago primarily as a result of management’s continued emphasis on increasing income from these sources.
“We are very pleased that our concentrated effort to improve noninterest income is showing success. The improvements are based on fee collection efforts, restructured pricing and innovative product enhancements, including our Smart Checking product,” stated B. Grant Yarber.
Noninterest expense increased a modest 2.5% to $19.6 million during the first six months of 2008 compared to $19.1 million for the same period one year ago. Increased FDIC deposit insurance premiums of $101 thousand accounted for approximately 21% of the increased noninterest expense.
Capital Bank Corporation, headquartered in Raleigh, N.C., with approximately $1.6 billion in total assets, offers a broad range of financial services. Capital Bank operates 27 banking offices in Asheville (4), 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
(Unaudited) | Three Months Ended June 30, 2008 | Three Months Ended June 30, 2007 | Six Months Ended June 30, 2008 | Six Months Ended June 30, 2007 | |||||||||
(In thousands except per share data) | |||||||||||||
Interest income | $ | 21,283 | $ | 23,567 | $ | 44,001 | $ | 46,742 | |||||
Interest expense | 10,355 | 12,321 | 22,164 | 24,773 | |||||||||
Net interest income | 10,928 | 11,246 | 21,837 | 21,969 | |||||||||
Provision (credit) for loan losses | 850 | (91 | ) | 1,415 | 246 | ||||||||
Net interest income after provision for loan losses | 10,078 | 11,337 | 20,422 | 21,723 | |||||||||
Noninterest income | 2,974 | 2,384 | 5,201 | 4,574 | |||||||||
Noninterest expense | 9,968 | 9,857 | 19,573 | 19,093 | |||||||||
Income before taxes | 3,084 | 3,864 | 6,050 | 7,204 | |||||||||
Income tax expense | 869 | 1,188 | 1,668 | 2,144 | |||||||||
Net income | $ | 2,215 | $ | 2,676 | $ | 4,382 | $ | 5,060 | |||||
Income per share – basic | $ | 0.20 | $ | 0.23 | $ | 0.39 | $ | 0.44 | |||||
Income per share – fully diluted | $ | 0.20 | $ | 0.23 | $ | 0.39 | $ | 0.44 | |||||
Weighted average shares outstanding: | |||||||||||||
Basic | 11,310 | 11,503 | 11,300 | 11,498 | |||||||||
Fully diluted | 11,324 | 11,574 | 11,315 | 11,574 |
End of Period Balances
(Unaudited) | 2008 | 2007 | ||||||||||||||
June 30 | March 31 | December 31(a) | September 30 | June 30 | ||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||
Total assets | $ | 1,592,034 | $ | 1,575,301 | $ | 1,517,603 | $ | 1,490,244 | $ | 1,440,240 | ||||||
Investment securities | 246,468 | 258,086 | 259,116 | 249,083 | 241,666 | |||||||||||
Loans (gross)* | 1,178,157 | 1,150,497 | 1,095,107 | 1,070,656 | 1,022,147 | |||||||||||
Allowance for loan losses | 13,910 | 13,563 | 13,571 | 13,366 | 13,339 | |||||||||||
Total earning assets | 1,435,020 | 1,419,174 | 1,362,048 | 1,335,434 | 1,285,715 | |||||||||||
Deposits | 1,182,615 | 1,150,897 | 1,098,698 | 1,090,589 | 1,072,979 | |||||||||||
Shareholders’ equity | 165,731 | 167,967 | 164,300 | 164,089 | 162,402 | |||||||||||
Book value per share | $ | 14.76 | $ | 14.95 | $ | 14.71 | $ | 14.58 | $ | 14.17 | ||||||
Tangible book value per share | $ | 9.16 | $ | 9.33 | $ | 9.04 | $ | 8.93 | $ | 8.59 | ||||||
(a) Derived from audited consolidated financial statements
*Includes loans held for sale
Average Balances
(Unaudited) | 2008 | 2007 | ||||||||||||||
June 30 | March 31 | December 31(a) | September 30 | June 30 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Total assets | $ | 1,578,357 | $ | 1,555,986 | $ | 1,492,563 | $ | 1,445,915 | $ | 1,436,584 | ||||||
Investments | 256,406 | 256,538 | 242,272 | 252,090 | 248,850 | |||||||||||
Loans (gross)* | 1,166,795 | 1,142,728 | 1,090,801 | 1,042,635 | 1,021,517 | |||||||||||
Total earning assets | 1,429,301 | 1,407,345 | 1,347,727 | 1,302,859 | 1,292,651 | |||||||||||
Deposits | 1,148,671 | 1,139,106 | 1,066,438 | 1,064,174 | 1,078,430 | |||||||||||
Shareholders’ equity | 170,945 | 167,610 | 166,222 | 163,850 | 164,877 | |||||||||||
(a) Derived from audited consolidated financial statements
*Includes loans held for sale
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CAPITAL BANK CORPORATION
Quarterly Results
(Unaudited) | 2008 | 2007 | ||||||||||||||
June 30 | March 31 | December 31(a) | September 30 | June 30 | ||||||||||||
(In thousands except per share data) | ||||||||||||||||
Net interest income | $ | 10,928 | $ | 10,909 | $ | 10,952 | $ | 11,185 | $ | 11,246 | ||||||
Provision (credit) for loan losses | 850 | 565 | 3,099 | 261 | (91 | ) | ||||||||||
Net interest income after provision for loan losses | 10,078 | 10,344 | 7,853 | 10,924 | 11,337 | |||||||||||
Noninterest income | 2,974 | 2,227 | 2,176 | 2,233 | 2,384 | |||||||||||
Noninterest expense | 9,968 | 9,605 | 10,109 | 9,299 | 9,857 | |||||||||||
Income (loss) before taxes | 3,084 | 2,966 | (80 | ) | 3,858 | 3,864 | ||||||||||
Income tax expense (benefit) | 869 | 799 | (125 | ) | 1,105 | 1,188 | ||||||||||
Net income | $ | 2,215 | $ | 2,167 | $ | 45 | $ | 2,753 | $ | 2,676 | ||||||
Income per share – basic | $ | 0.20 | $ | 0.19 | $ | – | $ | 0.24 | $ | 0.23 | ||||||
Income per share – fully diluted | $ | 0.20 | $ | 0.19 | $ | – | $ | 0.24 | $ | 0.23 | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 11,310 | 11,289 | 11,252 | 11,451 | 11,503 | |||||||||||
Fully diluted | 11,324 | 11,306 | 11,316 | 11,510 | 11,574 | |||||||||||
(a) Derived from audited consolidated financial statements
Quarterly Net Interest Margin*
(Unaudited) | 2008 | 2007 | ||||||||||||||
June 30 | March 31 | December 31(a) | September 30 | June 30 | ||||||||||||
Yield on earning assets | 6.09 | % | 6.60 | % | 7.17 | % | 7.42 | % | 7.51 | % | ||||||
Cost of interest bearing liabilities | 3.24 | 3.76 | 4.33 | 4.32 | 4.34 | |||||||||||
Net interest spread | 2.85 | 2.83 | 2.84 | 3.10 | 3.17 | |||||||||||
Net interest margin | 3.18 | 3.23 | 3.38 | 3.57 | 3.65 | |||||||||||
*Annualized and on a fully taxable equivalent basis
(a) Derived from audited consolidated financial statements
Nonperforming Assets
(Unaudited) | 2008 | 2007 | ||||||||||||||
June 30 | March 31 | December 31(a) | September 30 | June 30 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and commercial real estate | $ | 3,650 | $ | 2,919 | $ | 4,489 | $ | 7,304 | $ | 6,089 | ||||||
Consumer | 42 | 61 | 28 | 23 | 67 | |||||||||||
Equity lines | 515 | 579 | 397 | 491 | 471 | |||||||||||
Construction | 418 | 230 | 562 | – | – | |||||||||||
Mortgage | 582 | 463 | 506 | 2,414 | 975 | |||||||||||
Total nonperforming loans | 5,207 | 4,252 | 5,982 | 10,232 | 7,602 | |||||||||||
Other real estate owned | 633 | 890 | 1,571 | 309 | 866 | |||||||||||
Total nonperforming assets | $ | 5,870 | $ | 5,142 | $ | 7,553 | $ | 10,541 | $ | 8,468 | ||||||
Nonperforming assets include loans that are 90 days or more past due or in nonaccrual status and other real estate owned.
(a) Derived from audited consolidated financial statements
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CAPITAL BANK CORPORATION
Key Ratios
(Unaudited) | 2008 | 2007 | ||||||||||||||
June 30 | March 31 | December 31(a) | September 30 | June 30 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Past due loans | $ | 9,239 | $ | 9,380 | $ | 10,769 | $ | 13,157 | $ | 13,008 | ||||||
Past due loans as a percent of total loans | 0.78 | % | 0.82 | % | 0.98 | % | 1.23 | % | 1.27 | % | ||||||
Net charge-offs | $ | 504 | $ | 573 | $ | 2,894 | $ | 234 | $ | 101 | ||||||
Net charge-offs as a percent of average loans (annualized) | 0.17 | % | 0.20 | % | 1.06 | % | 0.09 | % | 0.04 | % | ||||||
Allowance for loan losses as a percent of total loans | 1.18 | % | 1.18 | % | 1.24 | % | 1.25 | % | 1.30 | % | ||||||
Nonperforming assets as a percent of total assets | 0.37 | % | 0.33 | % | 0.50 | % | 0.71 | % | 0.59 | % | ||||||
Allowance for loan losses as a percent of nonperforming loans | 267 | % | 319 | % | 227 | % | 131 | % | 175 | % | ||||||
(a) Derived from audited consolidated financial statements
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2008 and December 31, 2007
June 30, 2008 | December 31, 2007 | ||||||
(Dollars in thousands except share data) | (Unaudited) | ||||||
Assets | |||||||
Cash and due from banks: | |||||||
Interest earning | $ | 10,377 | $ | 7,815 | |||
Noninterest earning | 32,257 | 32,347 | |||||
Federal funds sold and short term investments | 18 | 10 | |||||
Total cash and cash equivalents | 42,652 | 40,172 | |||||
Investment securities – available for sale, at fair value | 240,940 | 249,094 | |||||
Investment securities – held to maturity, at amortized cost | 5,528 | 10,022 | |||||
Loans – net of unearned income and deferred fees | 1,178,157 | 1,095,107 | |||||
Allowance for loan losses | (13,910 | ) | (13,571 | ) | |||
Net loans | 1,164,247 | 1,081,536 | |||||
Premises and equipment, net | 24,726 | 23,863 | |||||
Bank-owned life insurance | 21,952 | 21,589 | |||||
Goodwill and deposit premium, net | 62,831 | 63,345 | |||||
Deferred income tax | 7,198 | 5,829 | |||||
Accrued interest receivable | 6,479 | 7,789 | |||||
Other assets | 15,481 | 14,364 | |||||
Total assets | $ | 1,592,034 | $ | 1,517,603 | |||
Liabilities | |||||||
Deposits: | |||||||
Demand, noninterest bearing | $ | 116,987 | $ | 114,780 | |||
Savings and interest bearing checking | 187,940 | 151,698 | |||||
Money market deposit accounts | 199,839 | 229,560 | |||||
Time deposits less than $100,000 | 420,168 | 370,416 | |||||
Time deposits $100,000 and greater | 257,681 | 232,244 | |||||
Total deposits | 1,182,615 | 1,098,698 | |||||
Repurchase agreements and federal funds purchased | 30,297 | 45,295 | |||||
Borrowings | 171,000 | 163,347 | |||||
Subordinated debentures | 30,930 | 30,930 | |||||
Other liabilities | 11,461 | 15,033 | |||||
Total liabilities | 1,426,303 | 1,353,303 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity | |||||||
Common stock, no par value; 20,000,000 shares authorized; 11,229,085 and 11,169,777 shares issued and outstanding as of June 30, 2008 and December 31, 2007, respectively | 136,781 | 136,154 | |||||
Retained earnings | 30,567 | 27,985 | |||||
Accumulated other comprehensive income | (1,617 | ) | 161 | ||||
Total shareholders’ equity | 165,731 | 164,300 | |||||
Total liabilities and shareholders’ equity | $ | 1,592,034 | $ | 1,517,603 |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2008 and 2007 (Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
(Dollars in thousands except per share data) | |||||||||||||
Interest income: | |||||||||||||
Loans and loan fees | $ | 18,111 | $ | 20,519 | $ | 37,610 | $ | 40,402 | |||||
Investment securities: | |||||||||||||
Taxable interest income | 2,216 | 1,842 | 4,434 | 3,768 | |||||||||
Tax-exempt interest income | 805 | 810 | 1,634 | 1,584 | |||||||||
Dividends | 118 | 106 | 235 | 213 | |||||||||
Federal funds and other interest income | 33 | 290 | 88 | 775 | |||||||||
Total interest income | 21,283 | 23,567 | 44,001 | 46,742 | |||||||||
Interest expense: | |||||||||||||
Deposits | 8,026 | 9,918 | 17,098 | 19,924 | |||||||||
Borrowings and repurchase agreements | 2,329 | 2,403 | 5,066 | 4,849 | |||||||||
Total interest expense | 10,355 | 12,321 | 22,164 | 24,773 | |||||||||
Net interest income | 10,928 | 11,246 | 21,837 | 21,969 | |||||||||
Provision (credit) for loan losses | 850 | (91 | ) | 1,415 | 246 | ||||||||
Net interest income after provision for loan losses | 10,078 | 11,337 | 20,422 | 21,723 | |||||||||
Noninterest income: | |||||||||||||
Service charges and other fees | 1,237 | 929 | 2,196 | 1,806 | |||||||||
Mortgage fees and revenues | 354 | 568 | 626 | 1,096 | |||||||||
Brokerage fees | 245 | 150 | 401 | 253 | |||||||||
Bank card services | 354 | 254 | 653 | 470 | |||||||||
Net gain on sale of securities | 69 | – | 140 | – | |||||||||
Bank-owned life insurance | 260 | 208 | 562 | 405 | |||||||||
Other | 455 | 275 | 623 | 544 | |||||||||
Total noninterest income | 2,974 | 2,384 | 5,201 | 4,574 | |||||||||
Noninterest expense: | |||||||||||||
Salaries and employee benefits | 5,326 | 5,198 | 10,362 | 10,240 | |||||||||
Occupancy | 996 | 1,035 | 1,954 | 1,991 | |||||||||
Furniture and equipment | 793 | 647 | 1,540 | 1,262 | |||||||||
Data processing and telecommunications | 528 | 397 | 960 | 785 | |||||||||
Advertising | 205 | 300 | 520 | 598 | |||||||||
Office expenses | 315 | 386 | 680 | 719 | |||||||||
Professional fees | 281 | 422 | 651 | 605 | |||||||||
Business development and travel | 340 | 344 | 673 | 657 | |||||||||
Amortization of deposit premiums | 257 | 300 | 514 | 600 | |||||||||
Miscellaneous loan handling costs | 224 | 112 | 318 | 298 | |||||||||
Directors fees | 132 | 229 | 399 | 497 | |||||||||
Insurance | 103 | 87 | 198 | 177 | |||||||||
FDIC deposit insurance | 181 | 77 | 228 | 127 | |||||||||
Other | 287 | 323 | 576 | 537 | |||||||||
Total noninterest expense | 9,968 | 9,857 | 19,573 | 19,093 | |||||||||
Net income before tax expense | 3,084 | 3,864 | 6,050 | 7,204 | |||||||||
Income tax expense | 869 | 1,188 | 1,668 | 2,144 | |||||||||
Net income | $ | 2,215 | $ | 2,676 | $ | 4,382 | $ | 5,060 | |||||
Earnings per share – basic | $ | 0.20 | $ | 0.23 | $ | 0.39 | $ | 0.44 | |||||
Earnings per share – diluted | $ | 0.20 | $ | 0.23 | $ | 0.39 | $ | 0.44 |
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Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Three Months Ended June 30, 2008, March 31, 2008 and June 30, 2007
Tax Equivalent Basis (1)
June 30, 2008 | March 31, 2008 | June 30, 2007 | ||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | |||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Loans receivable: (2) | ||||||||||||||||||||||||||||
Commercial | $ | 1,010,809 | $ | 15,713 | 6.23 | % | $ | 986,205 | $ | 16,777 | 6.82 | % | $ | 861,872 | 17,359 | 8.08 | % | |||||||||||
Consumer | 46,344 | 869 | 7.53 | 46,700 | 910 | 7.81 | 31,300 | 677 | 8.68 | |||||||||||||||||||
Home equity | 80,842 | 1,101 | 5.46 | 79,564 | 1,321 | 6.66 | 81,736 | 1,727 | 8.47 | |||||||||||||||||||
Residential mortgages | 28,710 | 427 | 5.95 | 30,259 | 491 | 6.51 | 46,609 | 756 | 6.51 | |||||||||||||||||||
Total loans | 1,166,795 | 18,111 | 6.23 | 1,142,728 | 19,499 | 6.84 | 1,021,517 | 20,519 | 8.06 | |||||||||||||||||||
Investment securities (3) | 256,406 | 3,555 | 5.55 | 256,538 | 3,590 | 5.61 | 248,850 | 3,282 | 5.29 | |||||||||||||||||||
Federal funds sold and other interest on short-term investments | 6,100 | 33 | 2.18 | 8,079 | 55 | 2.72 | 22,284 | 290 | 5.22 | |||||||||||||||||||
Total interest-earning assets | 1,429,301 | $ | 21,699 | 6.09 | % | 1,407,345 | $ | 23,144 | 6.60 | % | 1,292,651 | $ | 24,091 | 7.48 | % | |||||||||||||
Cash and due from banks | 26,736 | 26,232 | 27,489 | |||||||||||||||||||||||||
Other assets | 135,976 | 136,071 | 129,972 | |||||||||||||||||||||||||
Allowance for loan losses | (13,656 | ) | (13,662 | ) | (13,528 | ) | ||||||||||||||||||||||
Total assets | $ | 1,578,357 | $ | 1,555,986 | $ | 1,436,584 | ||||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||
Savings deposits | $ | 30,540 | $ | 35 | 0.46 | % | $ | 30,382 | $ | 46 | 0.61 | % | $ | 33,664 | $ | 44 | 0.52 | % | ||||||||||
Interest-bearing demand deposits | 335,851 | 1,635 | 1.95 | 333,108 | 1,855 | 2.23 | 377,274 | 3,264 | 3.47 | |||||||||||||||||||
Time deposits | 668,690 | 6,356 | 3.81 | 657,609 | 7,171 | 4.37 | 554,979 | 6,610 | 4.78 | |||||||||||||||||||
Total interest-bearing deposits | 1,035,081 | 8,025 | 3.11 | 1,021,099 | 9,072 | 3.56 | 965,917 | 9,918 | 4.12 | |||||||||||||||||||
Borrowed funds | 181,841 | 1,820 | 4.01 | 171,645 | 2,022 | 4.73 | 119,978 | 1,570 | 5.25 | |||||||||||||||||||
Subordinated debt | 30,930 | 403 | 5.23 | 30,930 | 526 | 6.82 | 30,930 | 496 | 6.43 | |||||||||||||||||||
Repurchase agreements and fed funds purchased | 35,183 | 106 | 1.21 | 35,563 | 189 | 2.13 | 31,696 | 337 | 4.26 | |||||||||||||||||||
Total interest-bearing liabilities | 1,283,035 | $ | 10,355 | 3.24 | % | 1,259,237 | $ | 11,809 | 3.76 | % | 1,148,521 | $ | 12,321 | 4.30 | % | |||||||||||||
Noninterest-bearing deposits | 113,590 | 118,007 | 112,513 | |||||||||||||||||||||||||
Other liabilities | 10,787 | 11,132 | 10,673 | |||||||||||||||||||||||||
Total liabilities | 1,407,412 | 1,388,376 | 1,271,707 | |||||||||||||||||||||||||
Shareholders’ equity | 170,945 | 167,610 | 164,877 | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,578,357 | $ | 1,555,986 | $ | 1,436,584 | ||||||||||||||||||||||
Net interest spread (4) | 2.85 | % | 2.83 | % | 3.17 | % | ||||||||||||||||||||||
Tax equivalent adjustment | $ | 416 | $ | 426 | $ | 524 | ||||||||||||||||||||||
Net interest income and net interest margin (5) | $ | 11,344 | 3.18 | % | $ | 11,335 | 3.23 | % | $ | 11,778 | 3.65 | % |
(1) | The tax equivalent basis is computed using a blended federal and state tax rate of approximately 34%. |
(2) | Loans receivable include nonaccrual loans for which accrual of interest has not been recorded. |
(3) | The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any. |
(4) | Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. |
(5) | Net interest margin represents net interest income divided by average interest-earning assets. |
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Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Six Months Ended June 30, 2008 and 2007
Tax Equivalent Basis (1)
June 30, 2008 | June 30, 2007 | ||||||||||||||||||
(Dollars in thousands) | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | |||||||||||||
Assets | |||||||||||||||||||
Loans receivable: (2) | |||||||||||||||||||
Commercial | $ | 998,552 | $ | 32,490 | 6.53 | % | $ | 857,000 | $ | 34,115 | 8.03 | % | |||||||
Consumer | 46,522 | 1,779 | 7.67 | 31,061 | 1,329 | 8.63 | |||||||||||||
Home equity | 80,203 | 2,422 | 6.06 | 82,017 | 3,454 | 8.49 | |||||||||||||
Residential mortgages | 29,485 | 919 | 6.23 | 46,922 | 1,504 | 6.46 | |||||||||||||
Total Loans | 1,154,762 | 37,610 | 6.53 | 1,017,000 | 40,402 | 8.01 | |||||||||||||
Investment securities (3) | 256,472 | 7,145 | 5.57 | 246,291 | 6,585 | 5.39 | |||||||||||||
Federal funds sold and other interest on short-term investments | 7,090 | 88 | 2.49 | 29,440 | 775 | 5.31 | |||||||||||||
Total interest-earnings assets | 1,418,323 | $ | 44,842 | 6.34 | % | 1,292,731 | $ | 47,762 | 7.45 | % | |||||||||
Cash and due from banks | 26,484 | 27,541 | |||||||||||||||||
Other assets | 136,024 | 130,049 | |||||||||||||||||
Allowance for loan losses | (13,659 | ) | (13,412 | ) | |||||||||||||||
Total assets | $ | 1,567,172 | $ | 1,436,909 | |||||||||||||||
Liabilities and Equity | |||||||||||||||||||
Savings deposits | $ | 30,461 | $ | 81 | 0.53 | % | $ | 34,017 | $ | 86 | 0.51 | % | |||||||
Interest-bearing demand deposits | 334,480 | 3,489 | 2.09 | 360,044 | 6,186 | 3.46 | |||||||||||||
Time deposits | 663,150 | 13,527 | 4.09 | 577,922 | 13,652 | 4.76 | |||||||||||||
Total interest-bearing deposits | 1,028,090 | 17,097 | 3.34 | 971,983 | 19,924 | 4.13 | |||||||||||||
Borrowed funds | 176,743 | 3,842 | 4.36 | 116,832 | 3,070 | 5.30 | |||||||||||||
Subordinated debt | 30,930 | 929 | 6.02 | 30,930 | 1,085 | 7.07 | |||||||||||||
Repurchase agreements and fed funds purchased | 35,373 | 294 | 1.67 | 33,012 | 694 | 4.24 | |||||||||||||
Total interest-bearing liabilities | 1,271,136 | $ | 22,163 | 3.50 | % | 1,152,757 | $ | 24,773 | 4.33 | % | |||||||||
Noninterest-bearing deposits | 115,799 | 109,441 | |||||||||||||||||
Other liabilities | 10,960 | 10,627 | |||||||||||||||||
Total liabilities | 1,397,894 | 1,272,825 | |||||||||||||||||
Shareholders’ equity | 169,278 | 164,084 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,567,172 | $ | 1,436,909 | |||||||||||||||
Net interest spread (4) | 2.84 | % | 3.12 | % | |||||||||||||||
Tax equivalent adjustment | $ | 841 | $ | 1,020 | |||||||||||||||
Net interest income and net interest margin (5) | $ | 22,679 | 3.21 | % | $ | 22,989 | 3.59 | % |
(1) | The tax equivalent basis is computed using a blended federal and state tax rate of approximately 34%. |
(2) | Loans receivable include nonaccrual loans for which accrual of interest has not been recorded. |
(3) | The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any. |
(4) | Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. |
(5) | Net interest margin represents net interest income divided by average interest-earning assets. |
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