January 25, 2007
Edward J. Swotek, Senior Vice President
Immediately
LINCOLN, NE – January 25, 2007 — TierOne Corporation (NASDAQ: TONE) (“Company”), the holding company for TierOne Bank (“Bank”), reported a 22.3 percent increase in diluted earnings per share to $2.41 for the fiscal year ended December 31, 2006 compared to $1.97 for 2005. Net income for 2006 reached a record $41.3 million, a 25.8 percent increase above the $32.8 million in net income earned in 2005.
For the three months ended December 31, 2006, diluted earnings per share increased 12.5 percent to $0.63 compared to $0.56 for the same period in 2005. Net income for the fourth quarter 2006 increased 14.8 percent to $10.9 million compared to $9.5 million for the same period in 2005.
The three- and twelve-month periods ended December 31, 2006 were positively impacted by a $1.0 million pre-tax (approximately $630,000 net of tax) gain on sale of two north-central Kansas bank offices and related deposits. Offsetting this positive impact were expenses related to employee stock options which totaled $0.02 and $0.06 for the three-month and fiscal year periods ended December 31, 2006. The Company began expensing employee stock options in the first quarter of 2006 following the implementation of new accounting guidelines.
Highlights from the fourth quarter of 2006 included:
| • | Quarterly loan originations, excluding warehouse lines of credit, reached a record level of $558.2 million; |
| • | Net loans increased $66.5 million to $3.1 billion compared to $3.0 billion at September 30, 2006; |
| • | Quarterly net interest income increased 10.7 percent to $31.2 million compared to $28.2 million earned during the fourth quarter of 2005; |
| • | In late October, the United States Court of Federal Claims issued a favorable opinion, which is now on appeal, awarding the Bank $4.5 million in damages related to its 1995 goodwill litigation against the federal government; and |
| • | In mid-December, the Company opened its thirteenth full-service banking office in the Omaha, Nebraska metropolitan area. |
“Results generated from core operations enabled our Company to achieve record performance in 2006,” said Gilbert G. Lundstrom, chairman and chief executive officer. “We expect to continue to successfully execute on our core fundamentals and leverage our proven business model which will allow us to further strengthen shareholder value.”
For thirteen consecutive quarters, the Company has achieved double-digit earnings per share growth when measured on a quarter-over-comparable-quarter basis.
For the three months ended December 31, 2006, net interest income totaled $31.2 million, an increase of 10.7 percent, compared to $28.2 million for the same period one year ago. Net interest income for the year ended December 31, 2006 increased 20.0 percent to $125.9 million, compared to $104.9 million in 2005. The increase in net interest income for the three- and twelve-month periods ended December 31, 2006 was primarily attributable to the Bank’s overall higher average yield earned on its loan portfolio combined with an increase in net loan receivables.
Net interest margin and average interest rate spread were 3.96 percent and 3.56 percent, respectively, for the three months ended December 31, 2006 compared to 3.73 percent and 3.45 percent, respectively, for the same period ended December 31, 2005. For fiscal year 2006, net interest margin and average interest rate spread were 4.07 percent and 3.72 percent, respectively, compared to 3.58 percent and 3.33 percent, respectively, for 2005. Excluding the $2.7 million pre-tax prepayment fee collected in the third quarter, net interest margin and average interest rate spread would have been 3.99 percent and 3.63 percent, respectively, for the year ended December 31, 2006. Increases in the Bank’s yield on its loan portfolio continued to offset increases in the average rate on interest-bearing liabilities and contributed to the gain in both net interest margin and average interest rate spread during both comparable periods.
Noninterest income for the three months ended December 31, 2006 was $8.6 million, an increase of 11.6 percent, compared to $7.7 million for the three months ended December 31, 2005. Contributing to the fourth quarter 2006 increase in noninterest income was a $1.0 million gain on sale of two north-central Kansas bank offices and related deposits combined with increases of $381,000 in deposit and debit card-related fees and $327,000 in other non-lending-related fees. The increase in quarter-over-quarter noninterest income was partially offset by no mortgage servicing rights (“MSR”) valuation recapture for the three-months ended December 31, 2006 compared to a MSR recapture of $729,000 recorded during the fourth quarter of 2005.
For the year ended December 31, 2006, noninterest income increased 9.4 percent to $29.1 million compared to $26.6 million in 2005. Increases of $1.9 million in deposit and debit card-related fees, a gain on sale of $1.0 million reflecting the sale of two Kansas bank offices and an increase of $537,000 in other non-lending-related fees contributed to the rise in 2006 noninterest income. These increases were partially offset by no MSR valuation recapture in 2006 compared to $800,000 of recapture during the year ended December 31, 2005.
Noninterest expense for the quarter ended December 31, 2006 increased 8.3 percent to $20.3 million compared to $18.8 million for the same period one year ago. The increase in fourth quarter 2006 noninterest expense was primarily attributable to a $1.8 million increase in employee salaries and benefits expense. Included in the salary and benefit expense were increases of $1.2 million in salaries and health-related insurance benefit expenses associated with increases in the number of full-time equivalent employees and normal salary increases combined with a $420,000 charge related to the expensing of stock options.
Total noninterest expense for the year ended December 31, 2006 was $81.8 million, an increase of 12.9 percent, compared to $72.5 million for 2005. The increase in 2006 noninterest expense was primarily due to increases of $7.4 million in employee salaries and benefits, $1.4 million in other operating expense and $366,000 in occupancy expense. Of the $7.4 million increase in 2006 employee salaries and benefits, $4.3 million was associated with an increase in salaries and health-related insurance benefits resulting from an increase in the total number of employees and normal salary increases, $1.7 million related to the expensing of stock options and $907,000 was linked to an increase in the employee stock ownership plan expense. Other operating expenses in 2006 increased primarily due to an increase of $874,000 in legal expense primarily related to the Company’s preparation and trial of the damage portion of the goodwill claims the Bank has pursued against the federal government as disclosed in the Company’s December 31, 2005 Annual Report on Form 10-K.
At December 31, 2006, nonperforming loans were $30.1 million, or 0.99 percent of net loans, compared to $14.4 million, or 0.51 percent of net loans, at year-end 2005. Nonperforming assets were $35.3 million, or 1.03 percent of total assets, at December 31, 2006 compared to $16.9 million, or 0.52 percent of total assets, at December 31, 2005. The increase in non-performing loans and assets was primarily attributable to a $16.2 million increase in nonperforming residential construction loans. These loans were made primarily to individual homebuyers on the west coast of Florida which has and continues to experience a price correction in housing values and delays in housing construction.
Charged off loans, net of recoveries, were $993,000 and $3.8 million for the three- and twelve-month periods ended December 31, 2006, respectively, compared to $611,000 and $2.4 million for the same respective periods in 2005. Consumer- and business-related loans comprised the majority of charged off loans during both 2006 comparable periods.
The provision for loan losses was $1.8 million for the three months ended December 31, 2006 compared to $2.0 million for the same period in 2005. For the year ended December 31, 2006, the provision for loan losses was $6.1 million compared to $6.4 million for 2005. The allowance for loan losses as a percent of net loans at December 31, 2006 remained unchanged at 1.09 percent as compared to one year ago.
Total assets at December 31, 2006 amounted to $3.4 billion, an increase of $208.9 million, or 6.5 percent, compared to $3.2 billion at December 31, 2005. The year-over-year increase in total assets was primarily the result of a $205.5 million increase in net loan receivables.
Total liabilities grew 5.6 percent, or $164.5 million, to $3.1 billion at December 31, 2006 compared to $2.9 billion one year ago. The annual increase in 2006 total liabilities was primarily attributable to increases of $147.5 million in FHLBank Topeka advances and other borrowings and $105.6 million in retail deposits partially offset by a $78.0 million decline in brokered time deposits and the reduction of $21.7 million in deposits associated with the sale of two Kansas bank offices. At December 31, 2006, the Company had no remaining brokered time deposit balances.
Stockholders’ equity at December 31, 2006 was $353.3 million, an increase of $44.4 million, or 14.4 percent, compared to $308.9 million at December 31, 2005. An increase of $36.8 million in retained earnings resulting from record 2006 net income of $41.3 million was primarily responsible for the annual increase in stockholders’ equity.
During the three months ended December 31, 2006, the Company repurchased 131,260 shares of its common stock as part of a Board-approved repurchase program and to support employee benefit programs. For the year ended December 31, 2006, the Company repurchased 152,984 total shares. Over 1.5 million shares remain eligible for repurchase under the Company’s stock buyback plan. To date, nearly 4.6 million shares have been repurchased since the initiation of the Company’s stock buyback activity in late 2003.
On December 29, 2006, shareholders of record on December 15, 2006 were paid a $0.07 per share cash dividend. The December dividend payment brings total dividends paid to $0.27 per share for 2006 and marks the twelfth consecutive quarterly cash dividend paid to shareholders.
In mid-December, the Bank completed the sale of its Plainville and Stockton, Kansas, bank offices to Stockton National Bank of Stockton, Kansas. The sale included all related deposits, real estate and other fixed assets; however, the Bank retained all loans and investment accounts associated with the Plainville and Stockton offices. The sale allows the Bank to better focus its resources and management into its existing and more contiguous bank office network and to better leverage other growth opportunities.
The Bank also opened in mid-December a new, full-service banking facility located in Papillion, Nebraska. The new office is positioned in one of the fastest growing suburban population markets in the Bank’s tri-state region and becomes the thirteenth facility in the Omaha, Nebraska metropolitan area. Papillion consumer and business customers are now offered an extensive selection of lending, deposit and investment services, drive-up teller and ATM convenience and extended hours to serve their banking needs.
In late October, the United States Court of Federal Claims issued an opinion awarding the Bank $4.5 million in damages related to a 1995 breach of contract lawsuit filed by the Bank against the federal government following the enactment of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”). Under FIRREA, the federal government eliminated nearly $30.0 million of goodwill remaining from three supervisory mergers the Bank completed in 1982. The loss of the goodwill, which had been included as part of the Bank’s regulatory capital under federally-approved guidelines at the time of the mergers, forced the Bank to shrink in size, reduce personnel and close several banking offices in order to meet FIRREA’s new, stricter capital requirements. The ruling was appealed to the United States Court of Appeals for the Federal Circuit by the federal government on December 29, 2006. The Bank has subsequently filed a cross-appeal seeking review of earlier liability rulings which reduced the amount of the Bank’s claims. The Court has established a timetable requiring all legal briefs on appeal to be submitted to the Court in the second quarter of 2007.
TierOne Corporation is the parent company of TierOne Bank, a $3.4 billion federally chartered savings bank and the largest publicly-traded financial institution headquartered in Nebraska. Celebrating its 100th Anniversary in 2007, TierOne Bank offers customers a wide variety of full-service consumer, commercial and agricultural banking products and services through a network of 69 banking offices located in Nebraska, Iowa and Kansas and nine loan production offices located in Arizona, Colorado, Florida, Minnesota, Nevada and North Carolina.
Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Factors which could result in material variations include, but are not limited to, changes in interest rates or other competitive factors which could affect net interest margins, net interest income and noninterest income; changes in demand for loans, deposits and other financial services in the Company’s market area; changes in asset quality and general economic conditions; unanticipated issues associated with the execution of the Company’s strategic plan, including issues associated with the growth of a more diversified loan portfolio; unanticipated issues associated with increases in the levels of losses, customer bankruptcies, claims and assessments; as well as other factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
| (Dollars in thousands, except per share data) | December 31, 2006 | December 31, 2005 | ||||||
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Cash and due from banks | $ | 86,808 | $ | 83,534 | ||||
| Federal funds sold | -- | 4,500 | ||||||
| Total cash and cash equivalents | 86,808 | 88,034 | ||||||
| Investment securities: | ||||||||
| Held to maturity, at cost which approximates fair value | 90 | 111 | ||||||
| Available for sale, at fair value | 105,000 | 102,614 | ||||||
| Mortgage-backed securities, available for sale, at fair value | 12,272 | 19,752 | ||||||
| Loans receivable: | ||||||||
| Net loans (includes loans held for sale of $19,285 and $8,666 | ||||||||
| at December 31, 2006 and December 31, 2005, respectively) | 3,050,160 | 2,844,670 | ||||||
| Allowance for loan losses | (33,129 | ) | (30,870 | ) | ||||
| Net loans after allowance for loan losses | 3,017,031 | 2,813,800 | ||||||
| FHLBank Topeka stock, at cost | 62,022 | 58,491 | ||||||
| Premises and equipment, net | 39,821 | 39,509 | ||||||
| Accrued interest receivable | 23,023 | 19,190 | ||||||
| Goodwill | 42,228 | 42,283 | ||||||
| Other intangible assets, net | 8,391 | 10,041 | ||||||
| Other assets | 34,483 | 28,450 | ||||||
| Total assets | $ | 3,431,169 | $ | 3,222,275 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Deposits | $ | 2,052,343 | $ | 2,038,319 | ||||
| FHLBank Topeka advances and other borrowings | 962,376 | 814,924 | ||||||
| Advance payments from borrowers for taxes, insurance and | ||||||||
| other escrow funds | 27,203 | 24,864 | ||||||
| Accrued interest payable | 6,620 | 7,289 | ||||||
| Accrued expenses and other liabilities | 29,344 | 28,012 | ||||||
| Total liabilities | 3,077,886 | 2,913,408 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.01 par value. 10,000,000 shares | ||||||||
| authorized; none issued | -- | -- | ||||||
| Common stock, $0.01 par value. 60,000,000 shares authorized; | ||||||||
| 18,041,413 and 18,150,773 shares issued and outstanding | ||||||||
| at December 31, 2006 and December 31, 2005, respectively | 226 | 226 | ||||||
| Additional paid-in capital | 358,733 | 358,587 | ||||||
| Retained earnings, substantially restricted | 112,111 | 75,282 | ||||||
| Treasury stock, at cost; 4,533,662 and 4,424,302 shares at | ||||||||
| December 31, 2006 and December 31, 2005, respectively | (105,406 | ) | (101,584 | ) | ||||
| Unallocated common stock held by Employee Stock | ||||||||
| Ownership Plan | (11,664 | ) | (13,169 | ) | ||||
| Unearned common stock held by Management Recognition | ||||||||
| and Retention Plan | -- | (9,368 | ) | |||||
| Accumulated other comprehensive loss, net | (717 | ) | (1,107 | ) | ||||
| Total stockholders’ equity | 353,283 | 308,867 | ||||||
| Total liabilities and stockholders’ equity | $ | 3,431,169 | $ | 3,222,275 | ||||
| For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share data) | 2006 | 2005 | 2006 | 2005 | ||||||||||
| Interest income: | ||||||||||||||
| Loans receivable | $ | 56,394 | $ | 46,874 | $ | 214,727 | $ | 169,177 | ||||||
| Investment securities | 2,474 | 2,034 | 9,075 | 8,165 | ||||||||||
| Other interest-earning assets | 6 | 1 | 85 | 1 | ||||||||||
| Total interest income | 58,874 | 48,909 | 223,887 | 177,343 | ||||||||||
| Interest expense: | ||||||||||||||
| Deposits | 17,204 | 12,207 | 60,227 | 41,947 | ||||||||||
| FHLBank Topeka advances and other borrowings | 10,483 | 8,520 | 37,792 | 30,481 | ||||||||||
| Total interest expense | 27,687 | 20,727 | 98,019 | 72,428 | ||||||||||
| Net interest income | 31,187 | 28,182 | 125,868 | 104,915 | ||||||||||
| Provision for loan losses | 1,763 | 2,034 | 6,053 | 6,436 | ||||||||||
| Net interest income after provision | ||||||||||||||
| for loan losses | 29,424 | 26,148 | 119,815 | 98,479 | ||||||||||
| Noninterest income: | ||||||||||||||
| Fees and service charges | 5,962 | 6,477 | 22,230 | 21,783 | ||||||||||
| Debit card fees | 733 | 573 | 2,736 | 2,104 | ||||||||||
| Income (loss) from real estate operations, net | (148 | ) | (13 | ) | (268 | ) | (7 | ) | ||||||
| Net gain (loss) on sales of: | ||||||||||||||
| Investment securities | -- | -- | 21 | 14 | ||||||||||
| Loans held for sale | 518 | 403 | 2,084 | 1,928 | ||||||||||
| Real estate owned | (69 | ) | 36 | (135 | ) | 85 | ||||||||
| Other operating income | 1,558 | 192 | 2,416 | 678 | ||||||||||
| Total noninterest income | 8,554 | 7,668 | 29,084 | 26,585 | ||||||||||
| Noninterest expense: | ||||||||||||||
| Salaries and employee benefits | 12,595 | 10,802 | 49,064 | 41,663 | ||||||||||
| Occupancy, net | 2,227 | 2,234 | 8,912 | 8,546 | ||||||||||
| Data processing | 552 | 514 | 2,200 | 2,024 | ||||||||||
| Advertising | 817 | 1,331 | 4,455 | 4,483 | ||||||||||
| Other operating expense | 4,130 | 3,882 | 17,138 | 15,734 | ||||||||||
| Total noninterest expense | 20,321 | 18,763 | 81,769 | 72,450 | ||||||||||
| Income before income taxes | 17,657 | 15,053 | 67,130 | 52,614 | ||||||||||
| Income tax expense | 6,768 | 5,570 | 25,815 | 19,782 | ||||||||||
| Net income | $ | 10,889 | $ | 9,483 | $ | 41,315 | $ | 32,832 | ||||||
| Net income per common share, basic | $ | 0.66 | $ | 0.58 | $ | 2.50 | $ | 2.02 | ||||||
| Net income per common share, diluted | $ | 0.63 | $ | 0.56 | $ | 2.41 | $ | 1.97 | ||||||
| Dividends declared per common share | $ | 0.07 | $ | 0.06 | $ | 0.27 | $ | 0.23 | ||||||
| Average common shares outstanding, basic (000’s) | 16,582 | 16,308 | 16,494 | 16,221 | ||||||||||
| Average common shares outstanding, diluted (000’s) | 17,221 | 16,840 | 17,147 | 16,690 | ||||||||||
| (Dollars in thousands) | December 31, 2006 | December 31, 2005 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial and Other Data: | ||||||||||||||
| Total assets | $ | 3,431,169 | $ | 3,222,275 | ||||||||||
| Cash and cash equivalents | 86,808 | 88,034 | ||||||||||||
| Investment securities: | ||||||||||||||
| Held to maturity, at cost which approximates fair value | 90 | 111 | ||||||||||||
| Available for sale, at fair value | 105,000 | 102,614 | ||||||||||||
| Mortgage-backed securities, available for sale, at fair value | 12,272 | 19,752 | ||||||||||||
| Loans receivable: | ||||||||||||||
| Loans held for sale | 19,285 | 8,666 | ||||||||||||
| Total loans receivable | 3,662,950 | 3,499,813 | ||||||||||||
| Unamortized premiums, discounts and deferred loan fees | 5,602 | 4,778 | ||||||||||||
| Undisbursed portion of construction and land | ||||||||||||||
| development loans in process | (637,677 | ) | (668,587 | ) | ||||||||||
| Net loans | 3,050,160 | 2,844,670 | ||||||||||||
| Allowance for loan losses | (33,129 | ) | (30,870 | ) | ||||||||||
| Net loans after allowance for loan losses | 3,017,031 | 2,813,800 | ||||||||||||
| Deposits | 2,052,343 | 2,038,319 | ||||||||||||
| FHLBank Topeka advances and other borrowings | 962,376 | 814,924 | ||||||||||||
| Stockholders’ equity | 353,283 | 308,867 | ||||||||||||
Nonperforming loans | 30,050 | 14,405 | ||||||||||||
| Nonperforming assets | 35,314 | 16,851 | ||||||||||||
| Allowance for loan losses | 33,129 | 30,870 | ||||||||||||
| Nonperforming loans as a percent of net loans | 0.99 | % | 0.51 | % | ||||||||||
| Nonperforming assets as a percent of total assets | 1.03 | % | 0.52 | % | ||||||||||
| Allowance for loan losses as a percent of | ||||||||||||||
| nonperforming loans | 110.25 | % | 214.30 | % | ||||||||||
| Allowance for loan losses as a percent of net loans | 1.09 | % | 1.09 | % | ||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Operating Ratios: | 2006 | 2005 | 2006 | 2005 | ||||||||||
| Average yield on interest-earning assets | 7.47 | % | 6.47 | % | 7.24 | % | 6.05 | % | ||||||
| Average rate on interest-bearing liabilities | 3.91 | % | 3.02 | % | 3.52 | % | 2.72 | % | ||||||
| Average interest rate spread (1) | 3.56 | % | 3.45 | % | 3.72 | % | 3.33 | % | ||||||
| Net interest margin (1) | 3.96 | % | 3.73 | % | 4.07 | % | 3.58 | % | ||||||
| Average interest-earning assets to average | ||||||||||||||
| interest-bearing liabilities | 111.39 | % | 110.21 | % | 110.95 | % | 110.10 | % | ||||||
| Net interest income after provision for loan | ||||||||||||||
| losses to noninterest expense | 144.80 | % | 139.36 | % | 146.53 | % | 135.93 | % | ||||||
| Total noninterest expense to average assets (2) | 2.42 | % | 2.33 | % | 2.48 | % | 2.31 | % | ||||||
| Efficiency ratio (2)(3) | 50.07 | % | 51.10 | % | 51.64 | % | 53.70 | % | ||||||
| Return on average assets (2) | 1.30 | % | 1.18 | % | 1.25 | % | 1.05 | % | ||||||
| Return on average equity (2) | 12.48 | % | 12.49 | % | 12.48 | % | 11.28 | % | ||||||
| Average equity to average assets (2) | 10.38 | % | 9.42 | % | 10.04 | % | 9.29 | % | ||||||
| Return on tangible equity (2)(4) | 14.45 | % | 14.87 | % | 14.59 | % | 13.58 | % | ||||||
| (1) | Excluding the receipt of the $2.7 million loan prepayment fee, our average interest rate spread would have been 3.63% for the year ended December 31, 2006. Our net interest margin would have been 3.99% for the year ended December 31, 2006 after excluding the loan prepayment fee. |
| (2) | Employee stock options were expensed beginning January 1, 2006. |
| (3) | Efficiency ratio is calculated as total noninterest expense, less amortization expense of intangible assets, as a percentage of the sum of net interest income and noninterest income. |
| (4) | Return on tangible equity is calculated as annualized net income as a percentage of average stockholders' equity adjusted for goodwill and other intangible assets. |
| Three Months Ended December 31, | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2005 | |||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | ||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Federal funds sold | 478 | 6 | 5.26 | % | 100 | 1 | 4.00 | % | ||||||||||||
| Investment securities (1) | 173,450 | 2,340 | 5.40 | 166,830 | 1,840 | 4.41 | ||||||||||||||
| Mortgage-backed securities (1) | 13,412 | 134 | 4.00 | 21,574 | 194 | 3.60 | ||||||||||||||
| Loans receivable (2) | 2,965,929 | 56,394 | 7.61 | 2,833,664 | 46,874 | 6.62 | ||||||||||||||
| Total interest-earning assets | 3,153,269 | 58,874 | 7.47 | % | 3,022,168 | 48,909 | 6.47 | % | ||||||||||||
| Noninterest-earning assets | 209,350 | 202,801 | ||||||||||||||||||
| Total assets | 3,362,619 | 3,224,969 | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing checking accounts | 342,269 | 996 | 1.16 | % | 390,992 | 1,063 | 1.09 | % | ||||||||||||
| Savings accounts | 46,444 | 57 | 0.49 | 60,184 | 87 | 0.58 | ||||||||||||||
| Money market accounts | 387,918 | 2,908 | 3.00 | 311,957 | 1,585 | 2.03 | ||||||||||||||
| Time deposits | 1,114,746 | 13,243 | 4.75 | 1,091,450 | 9,472 | 3.47 | ||||||||||||||
| Total interest-bearing deposits | 1,891,377 | 17,204 | 3.64 | 1,854,583 | 12,207 | 2.63 | ||||||||||||||
| FHLBank Topeka advances and | ||||||||||||||||||||
| other borrowings | 939,343 | 10,483 | 4.46 | 887,535 | 8,520 | 3.84 | ||||||||||||||
| Total interest-bearing liabilities | 2,830,720 | 27,687 | 3.91 | % | 2,742,118 | 20,727 | 3.02 | % | ||||||||||||
| Noninterest-bearing accounts | 123,185 | 117,089 | ||||||||||||||||||
| Other liabilities | 59,793 | 61,989 | ||||||||||||||||||
| Total liabilities | 3,013,698 | 2,921,196 | ||||||||||||||||||
| Stockholders’ equity | 348,921 | 303,773 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | 3,362,619 | 3,224,969 | ||||||||||||||||||
| Net interest-earning assets | 322,549 | 280,050 | ||||||||||||||||||
Net interest income; average interest rate spread | 31,187 | 3.56 | % | 28,182 | 3.45 | % | ||||||||||||||
Net interest margin (3) | 3.96 | % | 3.73 | % | ||||||||||||||||
Average interest-earning assets to average | ||||||||||||||||||||
| interest-bearing liabilities | 111.39 | % | 110.21 | % | ||||||||||||||||
| (1) | Includes securities available for sale and held to maturity. Investment securities also includes FHLBank Topeka stock. |
| (2) | Includes nonperforming loans during the respective periods. Calculated net of unamortized premiums, discounts and deferred fees, undisbursed portion of construction and land development loans in process and allowance for loan losses. |
| (3) | Equals net interest income (annualized) divided by average interest-earning assets. |
| Year Ended December 31, | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2005 | |||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | ||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Federal funds sold | 1,934 | 85 | 4.40 | % | 25 | 1 | 4.00 | % | ||||||||||||
| Investment securities (1) | 167,587 | 8,422 | 5.03 | 173,012 | 7,143 | 4.13 | ||||||||||||||
| Mortgage-backed securities (1) | 16,200 | 653 | 4.03 | 27,961 | 1,022 | 3.66 | ||||||||||||||
| Loans receivable (2) | 2,904,606 | 214,727 | 7.39 | 2,732,360 | 169,177 | 6.19 | ||||||||||||||
| Total interest-earning assets | 3,090,327 | 223,887 | 7.24 | % | 2,933,358 | 177,343 | 6.05 | % | ||||||||||||
| Noninterest earning assets | 205,289 | 196,703 | ||||||||||||||||||
| Total assets | 3,295,616 | 3,130,061 | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing checking accounts | 361,056 | 4,147 | 1.15 | % | 386,968 | 3,055 | 0.79 | % | ||||||||||||
| Savings accounts | 51,643 | 263 | 0.51 | 68,909 | 410 | 0.59 | ||||||||||||||
| Money market accounts | 393,807 | 11,102 | 2.82 | 313,802 | 5,095 | 1.62 | ||||||||||||||
| Time deposits | 1,085,350 | 44,715 | 4.12 | 1,059,876 | 33,387 | 3.15 | ||||||||||||||
| Total interest-bearing deposits | 1,891,856 | 60,227 | 3.18 | 1,829,555 | 41,947 | 2.29 | ||||||||||||||
| Federal Home Loan Bank | ||||||||||||||||||||
| advances and other borrowings | 893,420 | 37,792 | 4.23 | 834,595 | 30,481 | 3.65 | ||||||||||||||
| Total interest-bearing liabilities | 2,785,276 | 98,019 | 3.52 | % | 2,664,150 | 72,428 | 2.72 | % | ||||||||||||
| Noninterest-bearing accounts | 119,394 | 112,902 | ||||||||||||||||||
| Other liabilities | 59,929 | 62,074 | ||||||||||||||||||
| Total liabilities | 2,964,599 | 2,839,126 | ||||||||||||||||||
| Shareholders’ equity | 331,017 | 290,935 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | 3,295,616 | 3,130,061 | ||||||||||||||||||
| Net interest-earnings assets | 305,051 | 269,208 | ||||||||||||||||||
Net interest income; average interest rate spread | 125,868 | 3.72 | % | 104,915 | 3.33 | % | ||||||||||||||
Net interest margin (3) | 4.07 | % | 3.58 | % | ||||||||||||||||
Average interest-earning assets to average | ||||||||||||||||||||
| interest-bearing liabilities | 110.95 | % | 110.10 | % | ||||||||||||||||
| (1) | Includes securities available for sale and held to maturity. Investment securities also includes Federal Home Loan Bank stock. |
| (2) | Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses. |
| (3) | Equals net interest income (annualized) divided by average interest-earning assets. |
The following table shows the composition of our loan portfolio by type of loan at the dates indicated.
| December 31, 2006 | December 31, 2005 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | Amount | % | Amount | % | ||||||||||
| Real estate loans: | ||||||||||||||
| One-to-four family residential (1) | $ | 339,080 | 9.21 | % | $ | 384,722 | 10.96 | % | ||||||
| Second mortgage residential | 120,510 | 3.27 | 160,208 | 4.57 | ||||||||||
| Multi-family residential | 148,922 | 4.05 | 166,579 | 4.75 | ||||||||||
| Commercial real estate | 396,620 | 10.77 | 402,504 | 11.47 | ||||||||||
| Land and land development | 494,887 | 13.44 | 289,916 | 8.27 | ||||||||||
| Residential construction | 780,991 | 21.21 | 943,378 | 26.89 | ||||||||||
| Commercial construction | 491,997 | 13.36 | 351,767 | 10.03 | ||||||||||
| Agriculture | 68,459 | 1.86 | 57,008 | 1.62 | ||||||||||
| Total real estate loans | 2,841,466 | 77.17 | 2,756,082 | 78.56 | ||||||||||
| Business | 220,669 | 5.99 | 177,592 | 5.06 | ||||||||||
| Agriculture - operating | 94,455 | 2.56 | 72,518 | 2.07 | ||||||||||
| Warehouse mortgage lines of credit | 112,645 | 3.06 | 95,174 | 2.71 | ||||||||||
| Consumer loans: | ||||||||||||||
| Home equity | 71,476 | 1.94 | 61,600 | 1.75 | ||||||||||
| Home equity line of credit | 130,071 | 3.53 | 141,021 | 4.02 | ||||||||||
| Home improvement | 55,513 | 1.51 | 69,165 | 1.97 | ||||||||||
| Automobile | 87,575 | 2.38 | 85,515 | 2.44 | ||||||||||
| Other | 68,365 | 1.86 | 49,812 | 1.42 | ||||||||||
| Total consumer loans | 413,000 | 11.22 | 407,113 | 11.60 | ||||||||||
| Total loans | 3,682,235 | 100.00 | % | 3,508,479 | 100.00 | % | ||||||||
| Unamortized premiums, discounts | ||||||||||||||
| and deferred loan fees | 5,602 | 4,778 | ||||||||||||
| Undisbursed portion of construction and | ||||||||||||||
| land development loans in process | (637,677 | ) | (668,587 | ) | ||||||||||
| Net loans | 3,050,160 | 2,844,670 | ||||||||||||
| Allowance for loan losses | (33,129 | ) | (30,870 | ) | ||||||||||
| Net loans after allowance for loan losses | 3,017,031 | 2,813,800 | ||||||||||||
| (1) Includes loans held for sale | $ | 19,285 | $ | 8,666 | ||||||||||
| CONTACT: | Edward J. Swotek, Senior Vice President Investor Relations Department (402)473-6250 investorrelations@tieronecorp.com |
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