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 Announces Strong Loan Growth, Solid Earnings and Improved Asset Quality
RALEIGH, N.C., October 21, 2008 – Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, today reported net income for the nine months ended September 30, 2008 of $6.4 million compared to $7.8 million for the nine months ended September 30, 2007. Earnings per share on a fully diluted basis was $0.57 for the first nine months of 2008 compared to $0.68 for the first nine months of 2007. Net income was $2.0 million, or $0.18 per share on a fully diluted basis, for the third quarter ended September 30, 2008 compared to $2.8 million, or $0.24 per share on a fully diluted basis, for the third quarter ended September 30, 2007.
“Although economic conditions continue to deteriorate beyond all of our expectations, Capital Bank continues to focus on asset quality and revenue enhancements, and this focus paid off with stable financial performance. During this time of financial crisis, many of our customers have come to see us as a refuge of trust and consistency which has enabled us to exceed our loan and deposit growth objectives. In addition, we were presented with the opportunity to expand into our neighboring market, Fayetteville, through the acquisition of four branches currently belonging to Omni National Bank. We look forward to the completion of this transaction late in the fourth quarter,” stated B. Grant Yarber, president and CEO.
Asset quality continued to improve compared to both the second quarter of 2008 and the third quarter of 2007. Past due loans as a percent of total loans declined to 0.75% at September 30, 2008 from 0.78% at June 30, 2008 and 1.23% at September 30, 2007. Nonperforming assets, which include loans on nonaccrual and other real estate owned, decreased to 0.47% as a percent of total assets at the end of September 30, 2008 compared to 0.71% at September 30, 2007 and increased from 0.37% at June 30, 2008. Allowance for loan losses totaled 1.17% of total loans at September 30, 2008 compared to 1.25% at September 30, 2007 and 1.18% at June 30, 2008. The allowance for loan losses was 219% of nonperforming loans as of September 30, 2008 compared to 131% at the end of the third quarter 2007 and 267% at the end of June 2008.
Capital Bank achieved $99.0 million in loan growth during the nine months ended September 30, 2008. Much of the growth has occurred in the Triangle and Western North Carolina markets, which we believe continue to present quality growth opportunities. Deposits also increased $99.0 million during the nine months ended September 30, 2008, rising from $1.10 billion at December 31, 2007 to $1.20 billion at September 30, 2008. Checking and savings accounts increased $19.0 million from December 31, 2007 as the bank continued to emphasize growth in this critical product area. Time deposits increased $111.2 million over the same period. Some of the growth in time deposits was due to a new deposit product offering through CDARS, which provides large-balance customers the opportunity for increased FDIC insurance through the convenience of working with one financial institution. Another reason for growth in time deposits was due to retail customers electing to shift funds from money market savings products to CDs. Money market deposits decreased $31.2 million during the first nine months of 2008.
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Net interest income for the first nine months of 2008 decreased $485 thousand compared to the first nine months of 2007. This decline was due to the impact of a decrease in net interest margin from 3.58% to 3.18% for the first nine months of 2007 and 2008, respectively. The decline in net interest margin was primarily a result of the reduction in the prime rate over the periods under comparison and competitive pressures in the marketplace for retail deposits. Partially offsetting this decline in net interest margin was 9.6% growth in average earning assets for the comparable periods.
Provision for loan losses increased $1.7 million for the nine months ended September 30, 2008 compared to the same period one year ago. The increase in the provision was partially due to loan growth but was also partially due to enhancements in the methodology for calculating the allowance for loan losses, which reduced the allowance and related provision for the nine months ended September 30, 2007. The enhancements to the allowance methodology were implemented during 2007 based on updated guidance issued through an interagency policy statement by the FDIC, Federal Reserve, and other regulatory agencies. Management continues to thoroughly review its loan portfolio and the adequacy of its allowance for loan losses.
Noninterest income increased $1.7 million, or approximately 24%, on a year-to-date basis compared to the same period one year ago despite an $877 thousand decline in mortgage revenue. Service charge income, bank card income and other loan-related fees increased a combined $1.4 million, or 34.2%, compared to the same period one year ago primarily as a result of management’s continued emphasis on increasing income from these sources. Gains on the sale of certain investment securities and the sale of a branch in Greensboro contributed $249 thousand and $426 thousand, respectively, to noninterest income.
“Our noninterest income improvement strategies, which were implemented early in the second quarter, continue to show success. These strategies are based on fee collection efforts, restructured pricing and innovative product enhancements, including our Smart Checking product,” stated B. Grant Yarber.
Noninterest expense increased from $28.6 million during the first nine months of 2007 to $30.4 million during the first nine months of 2008. Salaries, furniture and equipment, and data processing costs increased a combined $1.1 million over the same periods. Salaries increased 2.4% from last year due to routine annual compensation adjustments while furniture and equipment expense rose due to equipment and building upgrades as well as higher maintenance costs. Data processing costs increased with the implementation of an internet-based phone system. In addition, FDIC deposit insurance rose $243 thousand as the regulatory agency continued to increase premiums to cover higher monitoring costs and claims.
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 September 30, | Nine Months Ended September 30, | |||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
(In thousands except per share data) | |||||||||||||
Interest income | $ | 20,931 | $ | 23,955 | $ | 64,932 | $ | 70,697 | |||||
Interest expense | 10,104 | 12,775 | 32,268 | 37,548 | |||||||||
Net interest income | 10,827 | 11,810 | 32,664 | 33,149 | |||||||||
Provision for loan losses | 760 | 261 | 2,175 | 507 | |||||||||
Net interest income after provision for loan losses | 10,067 | 10,919 | 30,489 | 32,642 | |||||||||
Noninterest income | 3,267 | 2,522 | 8,754 | 7,056 | |||||||||
Noninterest expense | 10,517 | 9,583 | 30,376 | 28,636 | |||||||||
Income before taxes | 2,817 | 3,858 | 8,867 | 11,062 | |||||||||
Income tax expense | 805 | 1,105 | 2,473 | 3,249 | |||||||||
Net income | $ | 2,012 | $ | 2,753 | $ | 6,394 | $ | 7,813 | |||||
Income per share – basic | $ | 0.18 | $ | 0.24 | $ | 0.57 | $ | 0.68 | |||||
Income per share – fully diluted | $ | 0.18 | $ | 0.24 | $ | 0.57 | $ | 0.68 | |||||
Weighted average shares outstanding: | |||||||||||||
Basic | 11,302 | 11,451 | 11,301 | 11,482 | |||||||||
Fully diluted | 11,313 | 11,510 | 11,314 | 11,552 |
End of Period Balances
(Unaudited) | 2008 | 2007 | ||||||||||||||
September 30 | June 30 | March 31 | December 31(a) | September 30 | ||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||
Total assets | $ | 1,594,402 | $ | 1,592,034 | $ | 1,575,301 | $ | 1,517,603 | $ | 1,490,244 | ||||||
Investment securities | 244,310 | 246,468 | 258,086 | 259,116 | 249,083 | |||||||||||
Loans (gross)* | 1,194,149 | 1,178,157 | 1,150,497 | 1,095,107 | 1,070,656 | |||||||||||
Allowance for loan losses | 14,017 | 13,910 | 13,563 | 13,571 | 13,366 | |||||||||||
Total earning assets | 1,444,727 | 1,435,020 | 1,419,174 | 1,362,048 | 1,335,434 | |||||||||||
Deposits | 1,197,721 | 1,182,615 | 1,150,897 | 1,098,698 | 1,090,589 | |||||||||||
Shareholders’ equity | 166,521 | 165,731 | 167,967 | 164,300 | 164,089 | |||||||||||
Book value per share | $ | 14.83 | $ | 14.76 | $ | 14.95 | $ | 14.71 | $ | 14.58 | ||||||
Tangible book value per share | $ | 9.26 | $ | 9.16 | $ | 9.33 | $ | 9.04 | $ | 8.93 | ||||||
(a) Derived from audited consolidated financial statements
*Includes loans held for sale
Average Balances
(Unaudited) | 2008 | 2007 | ||||||||||||||
September 30 | June 30 | March 31 | December 31(a) | September 30 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Total assets | $ | 1,574,810 | $ | 1,578,357 | $ | 1,555,986 | $ | 1,492,563 | $ | 1,445,915 | ||||||
Investments | 245,408 | 256,406 | 256,538 | 242,272 | 252,090 | |||||||||||
Loans (gross)* | 1,176,491 | 1,166,795 | 1,142,728 | 1,090,801 | 1,042,635 | |||||||||||
Total earning assets | 1,425,516 | 1,429,301 | 1,407,345 | 1,347,727 | 1,302,859 | |||||||||||
Deposits | 1,164,362 | 1,148,671 | 1,139,106 | 1,066,438 | 1,064,174 | |||||||||||
Shareholders’ equity | 166,570 | 170,945 | 167,610 | 166,222 | 163,850 | |||||||||||
(a) Derived from audited consolidated financial statements
*Includes loans held for sale
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CAPITAL BANK CORPORATION
Quarterly Results
(Unaudited) | 2008 | 2007 | ||||||||||||||
September 30 | June 30 | March 31 | December 31(a) | September 30 | ||||||||||||
(In thousands except per share data) | ||||||||||||||||
Net interest income | $ | 10,827 | $ | 10,928 | $ | 10,909 | $ | 10,952 | $ | 11,810 | ||||||
Provision for loan losses | 760 | 850 | 565 | 3,099 | 261 | |||||||||||
Net interest income after provision for loan losses | 10,067 | 10,078 | 10,344 | 7,853 | 10,919 | |||||||||||
Noninterest income | 3,267 | 2,974 | 2,227 | 2,176 | 2,522 | |||||||||||
Noninterest expense | 10,517 | 9,968 | 9,605 | 10,109 | 9,583 | |||||||||||
Income (loss) before taxes | 2,817 | 3,084 | 2,966 | (80 | ) | 3,858 | ||||||||||
Income tax expense (benefit) | 805 | 869 | 799 | (125 | ) | 1,105 | ||||||||||
Net income | $ | 2,012 | $ | 2,215 | $ | 2,167 | $ | 45 | $ | 2,753 | ||||||
Income per share – basic | $ | 0.18 | $ | 0.20 | $ | 0.19 | $ | – | $ | 0.24 | ||||||
Income per share – fully diluted | $ | 0.18 | $ | 0.20 | $ | 0.19 | $ | – | $ | 0.24 | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 11,302 | 11,310 | 11,289 | 11,252 | 11,451 | |||||||||||
Fully diluted | 11,313 | 11,324 | 11,306 | 11,316 | 11,510 | |||||||||||
(a) Derived from audited consolidated financial statements
Quarterly Net Interest Margin*
(Unaudited) | 2008 | 2007 | ||||||||||||||
September 30 | June 30 | March 31 | December 31(a) | September 30 | ||||||||||||
Yield on earning assets | 5.94 | % | 6.09 | % | 6.60 | % | 7.17 | % | 7.45 | % | ||||||
Cost of interest bearing liabilities | 3.12 | 3.24 | 3.76 | 4.33 | 4.36 | |||||||||||
Net interest spread | 2.82 | 2.85 | 2.83 | 2.84 | 3.10 | |||||||||||
Net interest margin | 3.13 | 3.18 | 3.23 | 3.38 | 3.56 | |||||||||||
*Annualized and on a fully taxable equivalent basis
(a) Derived from audited consolidated financial statements
Nonperforming Assets
(Unaudited) | 2008 | 2007 | ||||||||||||||
September 30 | June 30 | March 31 | December 31(a) | September 30 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial | $ | 4,343 | $ | 3,650 | $ | 2,919 | $ | 4,489 | $ | 7,304 | ||||||
Construction | 1,570 | 418 | 230 | 562 | – | |||||||||||
Consumer | 25 | 42 | 61 | 28 | 23 | |||||||||||
Home equity | 275 | 515 | 579 | 397 | 491 | |||||||||||
Residential mortgage | 198 | 582 | 463 | 506 | 2,414 | |||||||||||
Total nonperforming loans | 6,411 | 5,207 | 4,252 | 5,982 | 10,232 | |||||||||||
Other real estate owned | 1,019 | 663 | 890 | 1,571 | 309 | |||||||||||
Total nonperforming assets | $ | 7,430 | $ | 5,870 | $ | 5,142 | $ | 7,553 | $ | 10,541 | ||||||
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 | ||||||||||||||
September 30 | June 30 | March 31 | December 31(a) | September 30 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Past due loans | $ | 8,933 | $ | 9,239 | $ | 9,380 | $ | 10,769 | $ | 13,157 | ||||||
Past due loans as a percent of total loans | 0.75 | % | 0.78 | % | 0.82 | % | 0.98 | % | 1.23 | % | ||||||
Net charge-offs | $ | 653 | $ | 503 | $ | 573 | $ | 2,894 | $ | 234 | ||||||
Net charge-offs as a percent of average loans (annualized) | 0.22 | % | 0.17 | % | 0.20 | % | 1.06 | % | 0.09 | % | ||||||
Allowance for loan losses as a percent of total loans | 1.17 | % | 1.18 | % | 1.18 | % | 1.24 | % | 1.25 | % | ||||||
Nonperforming assets as a percent of total assets | 0.47 | % | 0.37 | % | 0.33 | % | 0.50 | % | 0.71 | % | ||||||
Allowance for loan losses as a percent of nonperforming loans | 219 | % | 267 | % | 319 | % | 227 | % | 131 | % | ||||||
(a) Derived from audited consolidated financial statements
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2008 and December 31, 2007
September 30, 2008 | December 31, 2007 | ||||||
(Dollars in thousands except share data) | (Unaudited) | ||||||
Assets | |||||||
Cash and due from banks: | |||||||
Interest earning | $ | 6,245 | $ | 7,815 | |||
Noninterest earning | 29,255 | 32,347 | |||||
Federal funds sold and short term investments | 23 | 10 | |||||
Total cash and cash equivalents | 35,523 | 40,172 | |||||
Investment securities – available for sale, at fair value | 238,963 | 249,094 | |||||
Investment securities – held to maturity, at amortized cost | 5,347 | 10,022 | |||||
Loans – net of unearned income and deferred fees | 1,194,149 | 1,095,107 | |||||
Allowance for loan losses | (14,017 | ) | (13,571 | ) | |||
Net loans | 1,180,132 | 1,081,536 | |||||
Premises and equipment, net | 20,701 | 23,863 | |||||
Bank-owned life insurance | 22,215 | 21,589 | |||||
Goodwill and deposit premium, net | 62,575 | 63,345 | |||||
Deferred income tax | 7,396 | 5,829 | |||||
Accrued interest receivable | 6,683 | 7,789 | |||||
Other assets | 14,867 | 14,364 | |||||
Total assets | $ | 1,594,402 | $ | 1,517,603 | |||
Liabilities | |||||||
Deposits: | |||||||
Demand, noninterest bearing | $ | 109,056 | $ | 114,780 | |||
Savings and interest bearing checking | 176,396 | 151,698 | |||||
Money market deposit accounts | 198,391 | 229,560 | |||||
Time deposits less than $100,000 | 463,498 | 370,416 | |||||
Time deposits $100,000 and greater | 250,380 | 232,244 | |||||
Total deposits | 1,197,721 | 1,098,698 | |||||
Repurchase agreements and federal funds purchased | 22,290 | 45,295 | |||||
Borrowings | 164,000 | 163,347 | |||||
Subordinated debentures | 30,930 | 30,930 | |||||
Other liabilities | 12,940 | 15,033 | |||||
Total liabilities | 1,427,881 | 1,353,303 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity | |||||||
Common stock, no par value; 20,000,000 shares authorized; 11,227,085 and 11,169,777 shares issued and outstanding as of September 30, 2008 and December 31, 2007, respectively | 136,771 | 136,154 | |||||
Retained earnings | 31,682 | 27,985 | |||||
Accumulated other comprehensive (loss) income | (1,932 | ) | 161 | ||||
Total shareholders’ equity | 166,521 | 164,300 | |||||
Total liabilities and shareholders’ equity | $ | 1,594,402 | $ | 1,517,603 |
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CAPITAL BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2008 and 2007 (Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
(Dollars in thousands except per share data) | |||||||||||||
Interest income: | |||||||||||||
Loans and loan fees | $ | 17,875 | $ | 20,830 | $ | 55,485 | $ | 61,231 | |||||
Investment securities: | |||||||||||||
Taxable interest income | 2,182 | 2,074 | 6,616 | 5,842 | |||||||||
Tax-exempt interest income | 801 | 828 | 2,435 | 2,412 | |||||||||
Dividends | 58 | 116 | 293 | 329 | |||||||||
Federal funds and other interest income | 15 | 107 | 103 | 883 | |||||||||
Total interest income | 20,931 | 23,955 | 64,932 | 70,697 | |||||||||
Interest expense: | |||||||||||||
Deposits | 7,837 | 9,847 | 24,935 | 29,771 | |||||||||
Borrowings and repurchase agreements | 2,267 | 2,928 | 7,333 | 7,777 | |||||||||
Total interest expense | 10,104 | 12,775 | 32,268 | 37,548 | |||||||||
Net interest income | 10,827 | 11,180 | 32,664 | 33,149 | |||||||||
Provision for loan losses | 760 | 261 | 2,175 | 507 | |||||||||
Net interest income after provision for loan losses | 10,067 | 10,919 | 30,489 | 32,642 | |||||||||
Noninterest income: | |||||||||||||
Service charges and other fees | 1,209 | 963 | 3,405 | 2,769 | |||||||||
Mortgage fees and revenues | 142 | 549 | 768 | 1,645 | |||||||||
Other loan fees | 392 | 150 | 892 | 431 | |||||||||
Brokerage fees | 169 | 156 | 570 | 409 | |||||||||
Bank card services | 357 | 285 | 1,010 | 755 | |||||||||
Net gain on sale of investment securities | 109 | – | 249 | – | |||||||||
Gain on sale of branch | 426 | – | 426 | – | |||||||||
Bank-owned life insurance | 255 | 218 | 817 | 623 | |||||||||
Other | 208 | 201 | 617 | 424 | |||||||||
Total noninterest income | 3,267 | 2,522 | 8,754 | 7,056 | |||||||||
Noninterest expense: | |||||||||||||
Salaries and employee benefits | 5,122 | 4,881 | 15,484 | 15,121 | |||||||||
Occupancy | 1,097 | 1,062 | 3,297 | 3,053 | |||||||||
Furniture and equipment | 778 | 664 | 2,318 | 1,926 | |||||||||
Data processing and telecommunications | 565 | 416 | 1,525 | 1,201 | |||||||||
Advertising | 480 | 394 | 1,000 | 992 | |||||||||
Office expenses | 298 | 345 | 978 | 1,064 | |||||||||
Professional fees | 362 | 264 | 1,013 | 869 | |||||||||
Business development and travel | 360 | 252 | 1,033 | 909 | |||||||||
Amortization of deposit premiums | 256 | 300 | 770 | 900 | |||||||||
Miscellaneous loan handling costs | 252 | 247 | 570 | 545 | |||||||||
Directors fees | 303 | 72 | 702 | 569 | |||||||||
Insurance | 138 | 86 | 336 | 263 | |||||||||
FDIC deposit insurance | 214 | 72 | 442 | 199 | |||||||||
Other | 292 | 528 | 908 | 1,025 | |||||||||
Total noninterest expense | 10,517 | 9,583 | 30,376 | 28,636 | |||||||||
Net income before tax expense | 2,817 | 3,858 | 8,867 | 11,062 | |||||||||
Income tax expense | 805 | 1,105 | 2,473 | 3,249 | |||||||||
Net income | $ | 2,012 | $ | 2,753 | $ | 6,394 | $ | 7,813 | |||||
Earnings per share – basic | $ | 0.18 | $ | 0.24 | $ | 0.57 | $ | 0.68 | |||||
Earnings per share – diluted | $ | 0.18 | $ | 0.24 | $ | 0.57 | $ | 0.68 |
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Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Three Months Ended September 30, 2008, June 30, 2008 and September 30, 2007
Tax Equivalent Basis (1)
September 30, 2008 | June 30, 2008 | September 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 | $ | 1,018,947 | $ | 15,469 | 6.02 | % | $ | 1,010,809 | $ | 15,713 | 6.23 | % | $ | 880,319 | $ | 17,620 | 7.94 | % | ||||||||||
Consumer | 46,480 | 875 | 7.47 | 46,344 | 869 | 7.53 | 40,490 | 881 | 8.63 | |||||||||||||||||||
Home equity | 84,441 | 1,133 | 5.32 | 80,842 | 1,101 | 5.46 | 78,453 | 1,682 | 8.51 | |||||||||||||||||||
Residential mortgages | 26,623 | 398 | 5.98 | 28,710 | 427 | 5.95 | 43,373 | 646 | 5.91 | |||||||||||||||||||
Total loans | 1,176,491 | 17,875 | 6.03 | 1,166,795 | 18,111 | 6.23 | 1,042,635 | 20,829 | 7.93 | |||||||||||||||||||
Investment securities (3) | 245,408 | 3,452 | 5.63 | 256,406 | 3,555 | 5.55 | 252,090 | 3,543 | 5.58 | |||||||||||||||||||
Federal funds sold and other interest on short-term investments | 3,617 | 15 | 1.65 | 6,100 | 33 | 2.18 | 8,134 | 108 | 5.27 | |||||||||||||||||||
Total interest-earning assets | 1,425,516 | $ | 21,342 | 5.94 | % | 1,429,301 | $ | 21,699 | 6.09 | % | 1,302,859 | $ | 24,480 | 7.45 | % | |||||||||||||
Cash and due from banks | 25,554 | 26,736 | 28,261 | |||||||||||||||||||||||||
Other assets | 137,792 | 135,976 | 128,078 | |||||||||||||||||||||||||
Allowance for loan losses | (14,052 | ) | (13,656 | ) | (13,283 | ) | ||||||||||||||||||||||
Total assets | $ | 1,574,810 | $ | 1,578,357 | $ | 1,445,915 | ||||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||
Savings deposits | $ | 30,169 | $ | 30 | 0.39 | % | $ | 30,540 | $ | 35 | 0.46 | % | $ | 33,402 | $ | 51 | 0.61 | % | ||||||||||
Interest-bearing demand deposits | 342,575 | 1,802 | 2.09 | 335,851 | 1,635 | 1.95 | 366,824 | 3,230 | 3.49 | |||||||||||||||||||
Time deposits | 679,162 | 6,005 | 3.51 | 668,690 | 6,356 | 3.81 | 549,968 | 6,566 | 4.74 | |||||||||||||||||||
Total interest-bearing deposits | 1,051,906 | 7,837 | 2.96 | 1,035,081 | 8,025 | 3.11 | 950,194 | 9,847 | 4.11 | |||||||||||||||||||
Borrowed funds | 174,735 | 1,786 | 4.06 | 181,841 | 1,820 | 4.01 | 147,843 | 1,946 | 5.22 | |||||||||||||||||||
Subordinated debt | 30,930 | 407 | 5.22 | 30,930 | 403 | 5.23 | 30,930 | 599 | 7.68 | |||||||||||||||||||
Repurchase agreements and fed funds purchased | 27,039 | 74 | 1.09 | 35,183 | 106 | 1.21 | 34,233 | 383 | 4.44 | |||||||||||||||||||
Total interest-bearing liabilities | 1,284,610 | $ | 10,104 | 3.12 | % | 1,283,035 | $ | 10,355 | 3.24 | % | 1,163,200 | $ | 12,775 | 4.36 | % | |||||||||||||
Noninterest-bearing deposits | 112,456 | 113,590 | 113,980 | |||||||||||||||||||||||||
Other liabilities | 11,174 | 10,787 | 4,885 | |||||||||||||||||||||||||
Total liabilities | 1,408,240 | 1,407,412 | 1,282,065 | |||||||||||||||||||||||||
Shareholders’ equity | 166,570 | 170,945 | 163,850 | |||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,574,810 | $ | 1,578,357 | $ | 1,445,915 | ||||||||||||||||||||||
Net interest spread (4) | 2.82 | % | 2.85 | % | 3.10 | % | ||||||||||||||||||||||
Tax equivalent adjustment | $ | 411 | $ | 416 | $ | 525 | ||||||||||||||||||||||
Net interest income and net interest margin (5) | $ | 11,238 | 3.13 | % | $ | 11,344 | 3.18 | % | $ | 11,705 | 3.56 | % |
(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 Nine Months Ended September 30, 2008 and 2007
Tax Equivalent Basis (1)
September 30, 2008 | September 30, 2007 | ||||||||||||||||||
(Dollars in thousands) | Average Balance | Amount Earned | Average Rate | Average Balance | Amount Earned | Average Rate | |||||||||||||
Assets | |||||||||||||||||||
Loans receivable: (2) | |||||||||||||||||||
Commercial | $ | 1,005,400 | $ | 47,959 | 6.35 | % | $ | 859,219 | $ | 51,383 | 8.00 | % | |||||||
Consumer | 46,508 | 2,654 | 7.60 | 39,758 | 2,563 | 8.62 | |||||||||||||
Home equity | 81,626 | 3,555 | 5.80 | 80,829 | 5,135 | 8.49 | |||||||||||||
Residential mortgages | 28,524 | 1,317 | 6.15 | 45,739 | 2,150 | 6.28 | |||||||||||||
Total Loans | 1,162,058 | 55,485 | 6.36 | 1,025,545 | 61,231 | 7.98 | |||||||||||||
Investment securities (3) | 252,757 | 10,597 | 5.59 | 248,224 | 10,128 | 5.46 | |||||||||||||
Federal funds sold and other interest on short-term investments | 5,924 | 103 | 2.32 | 22,338 | 883 | 5.29 | |||||||||||||
Total interest-earnings assets | 1,420,738 | $ | 66,184 | 6.21 | % | 1,296,107 | $ | 72,243 | 7.45 | % | |||||||||
Cash and due from banks | 26,172 | 27,781 | |||||||||||||||||
Other assets | 136,617 | 129,392 | |||||||||||||||||
Allowance for loan losses | (13,791 | ) | (13,369 | ) | |||||||||||||||
Total assets | $ | 1,569,736 | $ | 1,439,911 | |||||||||||||||
Liabilities and Equity | |||||||||||||||||||
Savings deposits | $ | 30,363 | $ | 112 | 0.49 | % | $ | 33,812 | $ | 138 | 0.55 | % | |||||||
Interest-bearing demand deposits | 337,198 | 5,291 | 2.09 | 362,304 | 9,415 | 3.47 | |||||||||||||
Time deposits | 668,526 | 19,532 | 3.89 | 568,604 | 20,218 | 4.75 | |||||||||||||
Total interest-bearing deposits | 1,036,087 | 24,935 | 3.21 | 964,720 | 29,771 | 4.13 | |||||||||||||
Borrowed funds | 176,069 | 5,628 | 4.26 | 127,169 | 4,923 | 5.18 | |||||||||||||
Subordinated debt | 30,930 | 1,336 | 5.75 | 30,930 | 1,777 | 7.68 | |||||||||||||
Repurchase agreements and fed funds purchased | 32,575 | 368 | 1.51 | 33,419 | 1,077 | 4.31 | |||||||||||||
Total interest-bearing liabilities | 1,275,660 | $ | 32,268 | 3.37 | % | 1,156,238 | $ | 37,548 | 4.34 | % | |||||||||
Noninterest-bearing deposits | 114,676 | 110,954 | |||||||||||||||||
Other liabilities | 11,032 | 8,713 | |||||||||||||||||
Total liabilities | 1,401,368 | 1,275,905 | |||||||||||||||||
Shareholders’ equity | 168,368 | 164,006 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,569,736 | $ | 1,439,911 | |||||||||||||||
Net interest spread (4) | 2.84 | % | 3.11 | % | |||||||||||||||
Tax equivalent adjustment | $ | 1,252 | $ | 1,546 | |||||||||||||||
Net interest income and net interest margin (5) | $ | 33,916 | 3.18 | % | $ | 34,695 | 3.58 | % |
(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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