Exhibit 99.1
FOR IMMEDIATE RELEASE
January 29, 2007
CenterState Banks of Florida, Inc. Announces
Fourth Quarter 2006 Operating Results
WINTER HAVEN, FL. – January 29, 2007 — CenterState Banks of Florida, Inc. (NASDAQ SYMBOL: CSFL) reported net income for the fourth quarter 2006 of $2,191,000, up 19%, compared to $1,835,000 earned in the fourth quarter of 2005. Earnings per share for the current quarter was $0.19, up 12%, compared to $0.17 for the same quarter last year.
Net income for 2006 was $8,459,000, up 34% compared to $6,330,000 reported for 2005. Earnings per share for 2006 was $0.75, up 14.5%, compared to $0.655 for 2005. All per share data is presented herein on a diluted basis, unless otherwise stated. Quarterly condensed consolidated income statements (unaudited) are shown below for the periods indicated.
Quarterly Condensed Consolidated Income Statements (unaudited)
Amounts in thousands of dollars (except per share data)
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For the quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Net interest income | | $ | 9,622 | | | $ | 9,636 | | | $ | 9,581 | | | $ | 8,264 | | | $ | 7,955 | |
Provision for loan losses | | | (142 | ) | | | (129 | ) | | | (206 | ) | | | (240 | ) | | | (270 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net interest income after loan loss provision | | | 9,480 | | | | 9,507 | | | | 9,375 | | | | 8,024 | | | | 7,685 | |
Non interest income | | | 1,584 | | | | 1,550 | | | | 1,507 | | | | 1,495 | | | | 1,313 | |
Non interest expense | | | (7,854 | ) | | | (7,463 | ) | | | (7,297 | ) | | | (6,590 | ) | | | (6,117 | ) |
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Income before income tax | | | 3,210 | | | | 3,594 | | | | 3,585 | | | | 2,929 | | | | 2,881 | |
Income tax expense | | | (1,019 | ) | | | (1,343 | ) | | | (1,378 | ) | | | (1,119 | ) | | | (1,046 | ) |
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NET INCOME | | $ | 2,191 | | | $ | 2,251 | | | $ | 2,207 | | | $ | 1,810 | | | $ | 1,835 | |
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EPS (basic) | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.17 | | | $ | 0.17 | |
EPS (diluted) | | $ | 0.19 | | | $ | 0.20 | | | $ | 0.19 | | | $ | 0.17 | | | $ | 0.17 | |
Pending acquisition
During November the Company entered into a definitive agreement to purchase Valrico Bancorp, Inc. (“VBI”) and it’s wholly owned subsidiary Valrico State Bank for a combination of cash and stock. Each VBI shareholder of record will have an option to elect payment in stock, cash or a combination of stock and cash, but in no event will more than 1,333,741 CSFL common shares (70%) nor less than 1,238,475 CSFL common shares (65%) be issued in the aggregate. VBI shareholders electing CSFL stock consideration will be entitled to receive 5.25 shares of CSFL common stock for each share of VBI common stock exchanged. Those electing cash consideration will be entitled to receive $105.06 for each share of VBI common stock exchanged. VBI is a one bank holding company operating through its subsidiary, Valrico State Bank (the “Bank”). The Bank opened for business in 1989 and operates through four banking locations in Hillsborough County, Florida. At September 30, 2006, VBI reported total consolidated assets of approximately $152,000,000. The transaction is expected to close in April 2007, subject to regulatory approval and approval by VBI shareholders. The Company intends to operate the Bank as a separate wholly owned subsidiary, similar to the Company’s other subsidiary banks.
Branch activity
At the beginning of the fourth quarter, the Company had 30 banking locations, four of which are
referred to as “freedom offices,” which are small offices located inside gated retirement communities in central Florida. The office is usually located in a small room or area of the community’s “club house,” and caters to the needs of that particular community. Two of the four are very successful. The other two have not performed as well. Consequently, those two locations were closed during October 2006. Those two offices combined had total deposits of less than $1,500,000, which were transferred to another branch office. During the current quarter, the Company expensed approximately $30,000 for disposal of fixed assets related to closing the two locations.
Also during October, the Company opened a newly constructed branch office in Polk County (south of Lakeland, Florida) as well as a second new branch office in Polk County in a temporary facility on U.S. Highway 27 near Interstate 4. Construction has begun on a permanent facility, which is expected to be completed late in 2007.
Another branch office is nearing completion of construction in Osceola County (St. Cloud, Florida area) which is expected to be completed and opened during the first quarter of 2007. Several other site locations have been purchased or are in the process of being purchased for future branches in 2007 and 2008.
Dividend
On January 9, 2007, the board of directors declared a quarterly dividend of $0.035 per share payable on March 30, 2007 to all shareholders of record as of March 15, 2007.
Financial highlights
At December 31, 2006 total loans were $657,963,000, which represents a 27% increase compared to December 31, 2005. Exclusive of the $53,336,000 of loans acquired through the March 31, 2006 acquisition of CenterState Bank Mid Florida (“Mid FL”), organic loan growth during the year was approximately $87,969,000, or 17%.
At December 31, 2006 total deposits were $892,806,000, which represents a 24% increase compared to December 31, 2005. Exclusive of the $78,302,000 deposits acquired through the Mid FL acquisition, organic deposit growth during the year was approximately $97,167,000, or 14%.
The net interest margin (“NIM”) for the current quarter was 4.07% compared to 4.10% for the comparable quarter in 2005, and 4.13% for the previous quarter. After six consecutive quarters of margin expansion, the Company experienced its second quarter of margin compression (6 basis points each of the last two quarters). This is consistent with what appears to be occurring in the industry as a result of the changing yield curve and shift in deposit mix. Management believes that as local market competition placed upward pressure on time deposit rates, customers tended to shift deposits from low cost deposits to higher cost time deposit products. To address this, management has initiated incentive and other marketing plans focusing on checking account and other non time deposit account growth. These initiatives have resulted in increases in incentive compensation expense and marketing expense (see quarterly condensed consolidated non interest expense table included in this release).
Annualized return on average assets was 0.84% for the current quarter compared to 0.87% for the same quarter last year. Presented below are condensed consolidated balance sheets, condensed consolidated average balance sheets, and selected financial ratios for the periods indicated.
Condensed Consolidated Balance Sheets (unaudited)
Amounts in thousands of dollars
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At quarter ended: | | 12/31/2006 | | | 9/30/2006 | | | 6/30/2006 | | | 3/31/2006 | | | 12/31/2005 | |
Cash and due from banks | | $ | 40,385 | | | $ | 35,345 | | | $ | 36,625 | | | $ | 35,165 | | | $ | 41,949 | |
Fed funds and money market | | | 79,636 | | | | 48,250 | | | | 80,285 | | | | 91,294 | | | | 52,977 | |
Investments | | | 238,015 | | | | 242,921 | | | | 232,063 | | | | 222,305 | | | | 218,841 | |
Loans | | | 657,963 | | | | 637,684 | | | | 621,638 | | | | 599,884 | | | | 516,658 | |
Allowance for loan losses | | | (7,355 | ) | | | (7,367 | ) | | | (7,310 | ) | | | (7,095 | ) | | | (6,491 | ) |
Goodwill | | | 9,863 | | | | 9,863 | | | | 9,863 | | | | 10,080 | | | | 4,675 | |
Core deposit intangible | | | 3,083 | | | | 3,249 | | | | 3,414 | | | | 3,580 | | | | 479 | |
Bank owned life insurance | | | 7,320 | | | | 7,246 | | | | 6,172 | | | | 6,108 | | | | 6,043 | |
Other assets | | | 48,192 | | | | 47,499 | | | | 45,880 | | | | 43,392 | | | | 36,390 | |
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TOTAL ASSETS | | $ | 1,077,102 | | | $ | 1,024,690 | | | $ | 1,028,630 | | | $ | 1,004,713 | | | $ | 871,521 | |
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Deposits | | $ | 892,806 | | | $ | 845,849 | | | $ | 855,031 | | | $ | 829,667 | | | $ | 717,337 | |
Other borrowings | | | 62,792 | | | | 59,605 | | | | 58,595 | | | | 56,973 | | | | 52,811 | |
Other liabilities | | | 4,172 | | | | 4,424 | | | | 3,932 | | | | 8,146 | | | | 4,012 | |
Minority interest | | | — | | | | — | | | | — | | | | — | | | | 120 | |
Stockholders’ equity | | | 117,332 | | | | 114,812 | | | | 111,072 | | | | 109,927 | | | | 97,241 | |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,077,102 | | | $ | 1,024,690 | | | $ | 1,028,630 | | | $ | 1,004,713 | | | $ | 871,521 | |
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Condensed Consolidated Average Balance Sheets (unaudited) Amounts in thousands of dollars | |
At quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Investments and fed funds | | $ | 299,467 | | | $ | 300,846 | | | $ | 287,099 | | | $ | 268,788 | | | $ | 264,232 | |
Loans | | | 645,103 | | | | 632,568 | | | | 611,379 | | | | 531,895 | | | | 511,339 | |
Allowance for loan losses | | | (7,398 | ) | | | (7,371 | ) | | | (7,226 | ) | | | (6,524 | ) | | | (6,444 | ) |
All other assets | | | 100,502 | | | | 97,844 | | | | 99,470 | | | | 80,120 | | | | 76,612 | |
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TOTAL ASSETS | | $ | 1,037,674 | | | $ | 1,023,887 | | | $ | 990,722 | | | $ | 874,279 | | | $ | 845,739 | |
| | | | | | | | | | | | | | | | | | | | |
Deposits- interest bearing | | $ | 657,654 | | | $ | 654,009 | | | $ | 611,678 | | | $ | 519,587 | | | $ | 498,465 | |
Deposits- non interest bearing | | | 196,093 | | | | 191,057 | | | | 204,138 | | | | 195,670 | | | | 193,218 | |
Other borrowings | | | 62,399 | | | | 60,486 | | | | 59,413 | | | | 57,022 | | | | 52,880 | |
Other liabilities | | | 4,989 | | | | 4,825 | | | | 4,726 | | | | 3,520 | | | | 4,123 | |
Minority interest | | | — | | | | — | | | | — | | | | 120 | | | | 120 | |
Stockholders’ equity | | | 116,539 | | | | 113,510 | | | | 110,767 | | | | 98,360 | | | | 96,933 | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,037,674 | | | $ | 1,023,887 | | | $ | 990,722 | | | $ | 874,279 | | | $ | 845,739 | |
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Selected financial ratios (unaudited)
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As of or for the quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Return on average assets | | | 0.84 | % | | | 0.88 | % | | | 0.89 | % | | | 0.83 | % | | | 0.87 | % |
Return on average equity | | | 7.52 | % | | | 7.93 | % | | | 7.97 | % | | | 7.36 | % | | | 7.57 | % |
Net interest margin | | | 4.07 | % | | | 4.13 | % | | | 4.27 | % | | | 4.13 | % | | | 4.10 | % |
Loan / deposit ratio | | | 73.7 | % | | | 75.4 | % | | | 72.7 | % | | | 72.3 | % | | | 72.0 | % |
Stockholders’ equity / total assets | | | 10.9 | % | | | 11.2 | % | | | 10.8 | % | | | 10.9 | % | | | 11.2 | % |
Efficiency ratio | | | 70 | % | | | 67 | % | | | 66 | % | | | 68 | % | | | 66 | % |
Book value per share | | $ | 10.54 | | | $ | 10.32 | | | $ | 10.00 | | | $ | 9.91 | | | $ | 9.26 | |
The Company’s credit quality remains good. Net charge-offs for the twelve month period ending December 31, 2006 were $500,000, or 0.08% of average loans for the period. During the current quarter, net charge-offs were $154,000. Allowance for loan losses was $7,355,000 at December 31, 2006, or 1.12% of loans outstanding. Nonperforming assets (which the Company defines as (1) non-accrual loans; (2) accruing loans that are 90 days or more delinquent and are deemed by management to be adequately secured and in the process of collection; (3) OREO (i.e. real estate acquired through foreclosure or deed in lieu of foreclosure); and (4) other repossessed assets that is not real estate), was $645,000 at December 31, 2006, compared to $1,549,000 at December 31, 2005. Non performing assets as a percentage of total assets was 0.06% at December 31, 2006, compared to 0.18% at December 31, 2005.
The Company defines non performing loans as non accrual loans plus loans past due 90 days or more and still accruing interest. Non performing loans as a percentage of total loans was 0.09% at December 31, 2006, compared to 0.29% at December 31, 2005. The ratio of allowance for loan losses to non performing loans was 1,206% at December 31, 2006, compared to 430% at December 31, 2005.
The table below summarizes selected credit quality data for the periods indicated.
Selected credit quality ratios, dollars are in thousands
(unaudited)
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As of or for the quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Non-accrual loans | | $ | 448 | | | $ | 696 | | | $ | 850 | | | $ | 647 | | | $ | 852 | |
Past due loans 90 days or more and still accruing interest | | | 162 | | | | 458 | | | | 1 | | | | 551 | | | | 658 | |
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Total non performing loans | | | 610 | | | | 1,154 | | | | 851 | | | | 1,198 | | | | 1,510 | |
Other real estate owned (“OREO”) | | | — | | | | — | | | | — | | | | — | | | | — | |
Repossessed assets other than real estate | | | 35 | | | | 35 | | | | 50 | | | | 65 | | | | 39 | |
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Total non performing assets | | $ | 645 | | | $ | 1,189 | | | $ | 901 | | | $ | 1,263 | | | $ | 1,549 | |
Non performing assets as a percentage of total assets | | | 0.06 | % | | | 0.12 | % | | | 0.09 | % | | | 0.13 | % | | | 0.18 | % |
Non performing loans as a percentage of total loans | | | 0.09 | % | | | 0.18 | % | | | 0.14 | % | | | 0.20 | % | | | 0.29 | % |
Net charge-offs (recoveries) | | $ | 154 | | | $ | 72 | | | $ | (9 | ) | | $ | 283 | | | $ | 205 | |
Net charge-offs as a percentage of average loans for the period | | | 0.02 | % | | | 0.01 | % | | | 0.00 | % | | | 0.05 | % | | | 0.04 | % |
Allowance for loan losses as a percentage of period end loans | | | 1.12 | % | | | 1.16 | % | | | 1.18 | % | | | 1.18 | % | | | 1.26 | % |
Loan growth and deposit growth over the previous twelve months were 27% and 24% respectively. Exclusive of the $53,336,000 loans and $78,302,000 deposits acquired from the Mid FL acquisition, the previous twelve month loan and deposit growth rates were 17% and 14%, respectively. The Company does not use broker deposits nor does it solicit deposits nationally. All deposits, as well as loans, are generated from its local markets in central Florida. The tables below summarize the loan and deposit mix over the most recent five quarter ends.
Loan mix (in thousands of dollars)
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At quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Real estate loans | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 180,869 | | | $ | 181,579 | | | $ | 173,011 | | | $ | 172,895 | | | $ | 148,090 | |
Commercial | | | 291,536 | | | | 277,888 | | | | 267,834 | | | | 256,598 | | | | 219,094 | |
Construction, development and land loans | | | 60,950 | | | | 56,112 | | | | 60,289 | | | | 51,304 | | | | 36,352 | |
| | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 533,355 | | | | 515,579 | | | | 501,134 | | | | 480,797 | | | | 403,536 | |
Commercial | | | 68,948 | | | | 67,642 | | | | 64,978 | | | | 65,173 | | | | 63,475 | |
Consumer and other loans | | | 56,684 | | | | 55,489 | | | | 56,567 | | | | 54,917 | | | | 50,413 | |
| | | | | | | | | | | | | | | | | | | | |
Total loans before unearned fees and costs | | | 658,987 | | | | 638,710 | | | | 622,679 | | | | 600,887 | | | | 517,424 | |
Unearned fees and costs | | | (1,024 | ) | | | (1,026 | ) | | | (1,041 | ) | | | (1,003 | ) | | | (766 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 657,963 | | | $ | 637,684 | | | $ | 621,638 | | | $ | 599,884 | | | $ | 516,658 | |
Deposit mix (in thousands of dollars) | |
At quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Checking accounts | | | | | | | | | | | | | | | | | | | | |
Non interest bearing | | $ | 223,602 | | | $ | 198,386 | | | $ | 207,804 | | | $ | 220,541 | | | $ | 219,444 | |
Interest bearing | | | 110,627 | | | | 97,060 | | | | 107,035 | | | | 123,214 | | | | 89,309 | |
Savings deposits | | | 46,806 | | | | 47,562 | | | | 48,471 | | | | 45,899 | | | | 47,350 | |
Money market accounts | | | 100,528 | | | | 102,114 | | | | 111,445 | | | | 107,449 | | | | 96,082 | |
Time deposits | | | 411,243 | | | | 400,727 | | | | 380,276 | | | | 332,564 | | | | 265,152 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | $ | 892,806 | | | $ | 845,849 | | | $ | 855,031 | | | $ | 829,667 | | | $ | 717,337 | |
Non interest income and non interest expense
The tables below summarize the Company’s non interest income and non interest expense for the periods indicated.
Quarterly Condensed Consolidated Non Interest Income (unaudited)
Amounts in thousands of dollars
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For the quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Service charges on deposit accounts | | $ | 876 | | | $ | 902 | | | $ | 875 | | | $ | 748 | | | $ | 809 | |
Commissions from mortgage broker activities | | | 71 | | | | 79 | | | | 106 | | | | 85 | | | | 106 | |
Loan related fees | | | 91 | | | | 70 | | | | 75 | | | | 79 | | | | 63 | |
Commissions from sale of mutual funds and annuities | | | 202 | | | | 142 | | | | 81 | | | | 270 | | | | 39 | |
Rental income | | | 50 | | | | 53 | | | | 50 | | | | 50 | | | | 49 | |
Debit card and ATM fees | | | 176 | | | | 138 | | | | 141 | | | | 137 | | | | 134 | |
BOLI income | | | 75 | | | | 74 | | | | 63 | | | | 65 | | | | 43 | |
Gain (loss) on sale of investments | | | — | | | | — | | | | 17 | | | | — | | | | (3 | ) |
Other service charges and fees | | | 43 | | | | 92 | | | | 99 | | | | 61 | | | | 73 | |
| | | | | | | | | | | | | | | | | | | | |
Total non interest income | | $ | 1,584 | | | $ | 1,550 | | | $ | 1,507 | | | $ | 1,495 | | | $ | 1,313 | |
Quarterly Condensed Consolidated Non Interest Expense (unaudited) Amounts in thousands of dollars | |
For the quarter ended: | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | |
Employee salaries and wages | | $ | 3,200 | | | $ | 3,116 | | | $ | 3,000 | | | $ | 2,748 | | | $ | 2,584 | |
Employee incentive/bonus compensation | | | 586 | | | | 515 | | | | 523 | | | | 438 | | | | 465 | |
Employee stock option expense | | | 136 | | | | 147 | | | | 181 | | | | 130 | | | | — | |
Health insurance and other employee benefits | | | 537 | | | | 432 | | | | 419 | | | | 372 | | | | 351 | |
Payroll taxes | | | 210 | | | | 214 | | | | 220 | | | | 289 | | | | 174 | |
Other employee related expenses | | | 189 | | | | 159 | | | | 149 | | | | 147 | | | | 119 | |
Incremental direct cost of loan origination | | | (276 | ) | | | (248 | ) | | | (324 | ) | | | (248 | ) | | | (253 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total salaries, wages and employee benefits | | $ | 4,582 | | | $ | 4,335 | | | $ | 4,168 | | | $ | 3,876 | | | $ | 3,440 | |
| | | | | |
Occupancy expense | | | 912 | | | | 907 | | | | 856 | | | | 768 | | | | 730 | |
Depreciation of premises and equipment | | | 497 | �� | | | 484 | | | | 498 | | | | 456 | | | | 428 | |
Supplies, stationary and printing | | | 146 | | | | 141 | | | | 174 | | | | 146 | | | | 130 | |
Marketing expenses | | | 249 | | | | 98 | | | | 106 | | | | 132 | | | | 119 | |
Data processing expenses | | | 280 | | | | 300 | | | | 273 | | | | 252 | | | | 240 | |
Legal, auditing and other professional fees | | | 187 | | | | 190 | | | | 165 | | | | 131 | | | | 175 | |
Bank regulatory related expenses | | | 93 | | | | 96 | | | | 79 | | | | 58 | | | | 75 | |
Postage and delivery | | | 65 | | | | 66 | | | | 66 | | | | 79 | | | | 54 | |
ATM related expenses | | | 94 | | | | 110 | | | | 114 | | | | 116 | | | | 110 | |
Amortization of CDI | | | 166 | | | | 165 | | | | 166 | | | | 17 | | | | 18 | |
Other expenses | | | 583 | | | | 571 | | | | 632 | | | | 559 | | | | 598 | |
| | | | | | | | | | | | | | | | | | | | |
Total non interest expense | | $ | 7,854 | | | $ | 7,463 | | | $ | 7,297 | | | $ | 6,590 | | | $ | 6,117 | |
CenterState Banks of Florida, Inc. is a multi bank holding company which operates through four wholly owned subsidiary banks with thirty locations in eight counties throughout Central Florida. The Company’s stock is listed on the NASDAQ national market under the symbol CSFL. Request for information regarding the purchase or sale of the common stock can be obtained from James Stevens, at Keefe, Bruyette & Woods (800-221-3246), Chris Cerniglia, at Ryan Beck & Co (800-793-7226), Michael Acampora, at Raymond James (800-363-9652), or Eric Lawless, at FIG Partners, LLC (866-344-2657). For additional information contact Ernest S. Pinner, CEO, or James J. Antal, CFO, at 863-293-2600.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Some of the statements in this report constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These statements related to future events, other future financial performance or business strategies, and may be identified by terminology such as “may,” “will,” “should,” “expects,” “scheduled,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “potential,” or “continue” or the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should specifically consider the factors described throughout this report. We cannot be assured that future results, levels of activity, performance or goals will be achieved.
