UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July16, 2008
RAINIER PACIFIC FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
| Washington | 000-50362 | 87-0700148 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 1498 Pacific Avenue, Tacoma, Washington | 98402 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (253) 926-4000
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions. |
| |
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On July 16, 2008, Rainier Pacific Financial Group, Inc. issued its earnings release for the quarter ended June 30, 2008. A copy of the press release is attached as Exhibit 99.1 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release of Rainier Pacific Financial Group, Inc. dated July 16, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | RAINIER PACIFIC FINANCIAL GROUP, INC. |
| | |
| | |
| Date: July 16, 2008 | /s/John A. Hall |
| | John A. Hall |
| | President and Chief Executive Officer |
| | (Principal Executive Officer) |
EXHIBIT 99.1
| | For more information, contact: |
| | John Hall: (253) 926-4007 |
| | jhall@rainierpac.com |
| **For Immediate Release** | or |
| | Vic Toy: (253) 926-4038 |
| | vtoy@rainierpac.com |
Rainier Pacific Financial Group, Inc.
Reports Second Quarter Earnings
Tacoma, Washington – July 16, 2008 – Rainier Pacific Financial Group, Inc. (the “Company”) (NASDAQ GM: RPFG) announced today its second quarter results for the period ended June 30, 2008. Net income for the quarter ended June 30, 2008 increased 3.6% to $1.0 million, or $0.17 per diluted share, compared to net income of $982,000, or $0.16 per diluted share, for the same period in 2007. For the six months ended June 30, 2008, the Company’s net income increased 31.6% to $2.5 million, or $0.41 per diluted share, compared to net income of $1.9 million, or $0.31 per diluted share, for the same six month period in 2007.
The Company’s revenue, (i.e., net interest income before provision for loan losses plus non-interest income) for the quarter ended June 30, 2008 was $9.0 million, compared to $8.8 million for the same period a year ago. Net interest income before the provision for loan losses for the quarter ended June 30, 2008 was $6.4 million, relatively unchanged compared to the same period a year ago. For the quarter ended June 30, 2008, the Company’s net interest margin was 3.13%, compared to 3.20% and 3.01% for the quarters ended March 31, 2008 and June 30, 2007, respectively. The yield on the Company’s interest-earning assets was 6.32% for the quarter ended June 30, 2008, compared to
6.71% for both quarters ended March 31, 2008 and June 30, 2007. For the quarter ended June 30, 2008, the Company’s cost of interest-bearing liabilities was 3.51%, compared to 3.89% and 4.11% for the quarters ended March 31, 2008 and June 30, 2007, respectively.
Non-interest income for the quarter ended June 30, 2008 was $2.6 million, or $257,000 more than the $2.3 million for the same quarter in 2007. The increase in non-interest income was primarily due to the result of a higher level of one- to four-family residential loan sales in 2008 that resulted in a $384,000 increase in the net gains generated on the loan sales.
Non-interest expenses were $6.9 million for the quarter ended June 30, 2008, or $202,000 less than the $7.1 million during the same period in 2007, as the Company continued to effectively manage its operating expenses.
During the second quarter, the Company was less aggressive in the pricing of its customer deposits. For the quarter ended June 30, 2008, the average cost of interest-bearing deposits declined to 2.84%, compared to 3.48% for the quarter ended March 31, 2008 and 3.83% for the quarter ended June 30, 2007. Consequently, total deposits declined by $7.7 million to $463.7 million at June 30, 2008, compared to $471.4 million at March 31, 2008 and $460.3 million at June 30, 2007. Core deposits (comprised of checking, savings, money market, and individual retirement accounts) were $238.3 million, or 51.4% of total deposits at June 30, 2008, compared to $242.4 million, or 52.7% of total deposits at June 30, 2007. Brokered deposit balances were $61.2 million at June 30, 2008, compared to $61.3 million at March 31, 2008 and $50.6 million at June 30, 2007.
Total loans were $664.0 million at June 30, 2008, compared to $655.6 million at March 31, 2008 and $637.0 million at December 31, 2007. Multi-family and commercial real estate loans of $36.6 million, one- to four-family mortgage loans of $17.4 million, and land development and real estate construction loans of $9.6 million were the primary contributors to second quarter loan originations. Total loan originations were $66.3 million during the quarter ended June 30, 2008, compared to $80.3 million and $61.1 million for the quarters ended March 31, 2008 and June 30, 2007, respectively.
For the quarter ended June 30, 2008, the yield on loans was 6.80%, compared to 7.12% and 7.27% for the quarters ended March 31, 2008 and June 30, 2007, respectively.
At June 30, 2008, the loan portfolio consisted of 37.0% commercial real estate loans, 22.0% multi-family real estate loans, 12.6% land development and real estate construction loans, 11.4% one- to four-family real estate loans, 6.8% consumer loans (excluding home equity loans), 6.4% home equity loans, and 3.8% commercial business loans.
The Company sold $22.9 million of fixed-rate one- to four-family residential loans during the quarter ended June 30, 2008, which generated $450,000 in net gains, compared to $5.6 million in loan sales and $66,000 in net gains during the same period in 2007. The portfolio of loans serviced for others increased to $127.8 million at June 30, 2008, compared to $115.2 million and $113.4 million at March 31, 2008 and June 30, 2007, respectively.
During the second quarter, the Company classified $13.5 million of real estate construction loans as non-performing and placed the loans on non-accrual status. These loans were classified as a result of
cash flow problems experienced by two local residential builders during the quarter resulting in their inability to fully meet the debt service requirements of the loans. The $13.5 million in loans classified as non-performing relating to these two builders consist of $6.6 million in land for future development, $5.5 million in one- to four-family residential construction loans with houses in varying states of completion, and $1.3 million in developed one- to four-family residential lots. Other non-performing loans, comprised exclusively of consumer and home equity loans totaling $415,000, were relatively unchanged compared to the $426,000 at March 31, 2008. As a result of these classifications, total non-performing loans (i.e., loans 90 days or more past due or non-accrual loans) increased to $13.9 million, or 2.09% of total loans at June 30, 2008, compared to $426,000, or 0.06% of total loans, at March 31, 2008, and $217,000, or 0.03% of total loans, at June 30, 2007.
Non-performing assets, which include the previously mentioned non-performing loans, along with repossessed assets and other real estate owned, increased to $14.3 million, or 1.65% of total assets at June 30, 2008, compared to $1.7 million, or 0.19% of total assets, at March 31, 2008, and $233,000, or 0.03% of total assets, at June 30, 2007.
The ratio of loans more than 30 days delinquent as a percentage of total loans increased to 1.07% at June 30, 2008, compared to 0.26% at both March 31, 2008 and June 30, 2007. The increase in delinquent loans was the result of increased delinquencies with land development and construction loans. Net charge-offs increased only modestly to $258,000 for the quarter ended June 30, 2008, compared to $250,000 for the quarter ended March 31, 2008 and $191,000 for the quarter ended June 30, 2007.
While the Company has not incurred any specific losses associated with the $13.5 million in recently classified loans, it did increase its provision for loan losses to $550,000 for the quarter ended June 30, 2008, compared to $150,000 for the quarters ended March 31, 2008 and June 30, 2007. Based upon the Company’s quarterly analysis of the allowance for loan losses, this increased provision was made to ensure the adequacy of the allowance as of June 30, 2008. The allowance for loan losses at June 30, 2008 was $8.3 million, representing an allowance to total loans ratio of 1.25%, compared to $8.0 million at March 31, 2008, or 1.22% of total loans, and $8.2 million at June 30, 2007, or 1.27% of total loans.
The investment securities portfolio at June 30, 2008 was $132.0 million (excluding $13.7 million in Federal Home Loan Bank of Seattle stock holdings), compared to $150.1 million at March 31, 2008 and $190.7 million at June 30, 2007. The decline in the investment securities portfolio during the second quarter was primarily attributable to a mark-to-market valuation adjustment of $13.7 million ($9.0 million net of federal income taxes) relating to the Company’s $108.5 million portfolio of pooled trust preferred securities issued by FDIC-insured financial institutions and insurance companies, as well as $2.6 million in principal payments received on our mortgage-backed securities held in the portfolio. The Company has evaluated the decline in the market value of the trust preferred securities, which is directly related to the credit and liquidity crises being experienced in the financial services industry over the past three calendar quarters, and believes the impairment in value to be temporary. Under U.S. generally accepted accounted principles, the Company has reflected this temporary market value decline in a valuation allowance component of shareholders’ equity.
Total shareholders’ equity at June 30, 2008 was $75.5 million, compared to $84.0 million at March 31, 2008 and $89.9 million at June 30, 2007. The decline in shareholders’ equity was due primarily to the mark-to-market value adjustment to the Company’s portfolio of investment securities. During the quarter ended June 30, 2008, the Company purchased and retired 29,793 shares of its outstanding shares of common stock at an average price of $13.58 per share. At June 30, 2008, the Company had the authority to purchase an additional 70,390 shares of common stock under its currently approved stock repurchase program.
The Company’s capital ratio (i.e., equity divided by assets) was 8.68% at June 30, 2008, compared to 9.56% and 9.88% at March 31, 2008 and December 31, 2007, respectively. Tangible equity to assets was 8.30% at June 30, 2008, compared to 9.18% and 9.48% at March 31, 2008 and December 31, 2007, respectively. As of June 30, 2008, the Bank remained categorized “well capitalized” under regulatory standards.
The Company’s book value and tangible book value per share as of June 30, 2008 were $12.46 and $11.91 per share, respectively, based upon 6,065,625 outstanding shares of common stock. The number of outstanding shares includes 63,423 restricted shares granted to participants under the Company’s 2004 Management Recognition Plan that have not yet vested or were not ratably earned, and excludes 356,315 unallocated shares held by the Rainier Pacific 401(k) Employee Stock Ownership Plan.
“The current operating environment remains very difficult, and we expect the economic slowdown and lower consumer confidence to continue to place pressure on the financial services industry over
the near term. These conditions, along with a weaker local housing market exhibited by slowing sales and lower prices, are expected to persist at least through the balance of the year. As a result, we will continue to closely monitor and proactively manage our construction lending relationships in particular, and will continue to underwrite new loans prudently. We do, however, remain optimistic regarding our ability to navigate through these current market challenges and will continue to focus on preserving and enhancing the value of the Rainier Pacific franchise,” said John A. Hall, President and CEO.
Rainier Pacific Financial Group, Inc. is the bank holding company for Rainier Pacific Bank, a Tacoma, Washington-based state-chartered savings bank operating 14 full-service locations in the Tacoma-Pierce County and City of Federal Way market areas.
For additional information, visit Rainier Pacific’s website at www.rainierpac.com.
Forward-looking statements:
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company’s mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. The Company’s actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to, the credit risk of lending activities, including changes in the level and trend of loan delinquencies and write-offs; results of examinations by our banking regulators; interest rate fluctuations; economic conditions in the Company’s primary market area; demand for residential, commercial real estate, consumer, and other types of loans; success of new products; competitive conditions between banks and non-bank financial service providers; regulatory and accounting changes; technological factors affecting operations; pricing of products and services; and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2007. Accordingly, these factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company undertakes no responsibility to update or revise any forward-looking statement.
Rainier Pacific Financial Group, Inc. & Subsidiary
Consolidated Statements of Condition
(Dollars in Thousands)
| ASSETS | |
| | | At June 30, | | | At March 31, | | | At December 31, | |
| | | 2008 | | | 2008 | | | 2007 | |
| | | | | | | | | | |
| Cash and cash equivalents | | $ | 11,832 | | | $ | 8,462 | | | $ | 8,724 | |
| Interest-bearing deposits with banks | | | 539 | | | | 7,003 | | | | 90 | |
| Securities available-for-sale | | | 94,056 | | | | 109,545 | | | | 131,287 | |
Securities held-to-maturity (fair value at June 30, 2008: $37,226; at March 31, 2008: $40,744; and at December 31, 2007: $45,541) | | | 37,946 | | | | 40,557 | | | | 45,756 | |
Federal Home Loan Bank of Seattle (“FHLB”) stock, at cost | | | 13,712 | | | | 13,712 | | | | 13,712 | |
| | | | | | | | | | | | | |
| Loans | | | 663,974 | | | | 655,624 | | | | 637,000 | |
Less: allowance for loan losses | | | (8,271 | ) | | | (7,979 | ) | | | (8,079 | ) |
Loans, net | | | 655,703 | | | | 647,645 | | | | 628,921 | |
| | | | | | | | | | | | | |
| Premises and equipment, net | | | 34,286 | | | | 33,602 | | | | 33,813 | |
| Accrued interest receivable | | | 3,400 | | | | 3,635 | | | | 3,980 | |
| Other assets | | | 19,139 | | | | 14,761 | | | | 12,581 | |
| | | | | | | | | | | | | |
TOTAL ASSETS | | $ | 870,613 | | | $ | 878,922 | | | $ | 878,864 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| LIABILITIES: | | | | | | | | | |
| Deposits | | | | | | | | | |
Non-interest bearing | | $ | 40,736 | | | $ | 37,145 | | | $ | 33,924 | |
Interest-bearing | | | 422,989 | | | | 434,227 | | | | 427,563 | |
Total deposits | | | 463,725 | | | | 471,372 | | | | 461,487 | |
| | | | | | | | | | | | | |
Borrowed funds | | | 324,238 | | | | 314,353 | | | | 320,454 | |
Corporate drafts payable | | | 2,110 | | | | 4,121 | | | | 2,510 | |
| Accrued compensation and benefits | | | 969 | | | | 948 | | | | 1,758 | |
Other liabilities | | | 4,022 | | | | 4,085 | | | | 5,835 | |
| | | | | | | | | | | | | |
TOTAL LIABILITIES | | | 795,064 | | | | 794,879 | | | | 792,044 | |
| | | | | | | | | | | | | |
| SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | |
Common stock, no par value: 49,000,000 shares authorized; 6,421,940 shares issued and 6,002,202 shares outstanding at June 30, 2008; 6,451,733 shares issued and 5,998,116 shares outstanding at March 31, 2008; 6,466,633 shares issued and 5,977,645 shares outstanding at December 31, 2007 | | | 50,636 | | | | 50,668 | | | | 50,458 | |
Unearned Employee Stock Ownership Plan (“ESOP”) shares | | | (3,563 | ) | | | (3,733 | ) | | | (3,903 | ) |
Accumulated other comprehensive loss, net of tax | | | (17,921 | ) | | | (8,723 | ) | | | (4,575 | ) |
Retained earnings | | | 46,397 | | | | 45,831 | | | | 44,840 | |
| | | | | | | | | | | | | |
TOTAL SHAREHOLDERS’ EQUITY | | | 75,549 | | | | 84,043 | | | | 86,820 | |
| | | | | | | | | | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 870,613 | | | $ | 878,922 | | | $ | 878,864 | |
Rainier Pacific Financial Group, Inc. & Subsidiary
Consolidated Statements of Income
(Dollars in Thousands, except per share data)
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| INTEREST INCOME | | | | | | | | | | | | |
| Loans | | $ | 11,191 | | | $ | 11,645 | | | $ | 22,468 | | | $ | 23,244 | |
| Securities available-for-sale | | | 1,276 | | | | 2,032 | | | | 3,133 | | | | 4,084 | |
| Securities held-to-maturity | | | 420 | | | | 546 | | | | 871 | | | | 1,111 | |
| Interest-bearing deposits | | | 6 | | | | 70 | | | | 33 | | | | 80 | |
| FHLB dividends | | | 48 | | | | 20 | | | | 82 | | | | 34 | |
| Total interest income | | | 12,941 | | | | 14,313 | | | | 26,587 | | | | 28,553 | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Deposits | | | 2,979 | | | | 4,053 | | | | 6,566 | | | | 8,164 | |
| Borrowed funds | | | 3,524 | | | | 3,841 | | | | 7,040 | | | | 7,584 | |
| Total interest expense | | | 6,503 | | | | 7,894 | | | | 13,606 | | | | 15,748 | |
| Net interest income | | | 6,438 | | | | 6,419 | | | | 12,981 | | | | 12,805 | |
| PROVISION FOR LOAN LOSSES | | | 550 | | | | 150 | | | | 700 | | | | 300 | |
Net interest income after provision for loan losses | | | 5,888 | | | | 6,269 | | | | 12,281 | | | | 12,505 | |
| NON-INTEREST INCOME | | | | | | | | | | | | | | | | |
| Deposit service fees | | | 908 | | | | 879 | | | | 1,747 | | | | 1,705 | |
| Loan service fees | | | 287 | | | | 346 | | | | 602 | | | | 638 | |
| Insurance service fees | | | 529 | | | | 622 | | | | 1,079 | | | | 1,165 | |
| Investment service fees | | | 121 | | | | 144 | | | | 285 | | | | 257 | |
| Real estate lease income | | | 262 | | | | 271 | | | | 508 | | | | 565 | |
| Gain on sale of securities, net | | | - | | | | - | | | | 11 | | | | - | |
| Gain on sale of loans, net | | | 450 | | | | 66 | | | | 685 | | | | 202 | |
| Gain on sale of premises and equipment, net | | | 6 | | | | - | | | | 6 | | | | 10 | |
| Other operating income | | | 38 | | | | 16 | | | | 499 | | | | 44 | |
| Total non-interest income | | | 2,601 | | | | 2,344 | | | | 5,422 | | | | 4,586 | |
| NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 4,042 | | | | 4,068 | | | | 8,102 | | | | 8,061 | |
| Office operations | | | 937 | | | | 956 | | | | 1,892 | | | | 1,942 | |
| Occupancy | | | 616 | | | | 624 | | | | 1,230 | | | | 1,259 | |
| Loan servicing | | | 123 | | | | 129 | | | | 232 | | | | 239 | |
| Outside and professional services | | | 248 | | | | 258 | | | | 696 | | | | 690 | |
| Marketing | | | 218 | | | | 289 | | | | 502 | | | | 532 | |
| Other operating expenses | | | 716 | | | | 778 | | | | 1,204 | | | | 1,488 | |
| Total non-interest expense | | | 6,900 | | | | 7,102 | | | | 13,858 | | | | 14,211 | |
| | | | | | | | | | | | | | | | | |
| INCOME BEFORE PROVISION FOR FEDERAL INCOME TAX | | | 1,589 | | | | 1,511 | | | | 3,845 | | | | 2,880 | |
| | | | | | | | | | | | | | | | | |
| PROVISION FOR FEDERAL INCOME TAX | | | 572 | | | | 529 | | | | 1,384 | | | | 1,008 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME | | $ | 1,017 | | | $ | 982 | | | $ | 2,461 | | | $ | 1,872 | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER COMMON SHARE | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.17 | | | $ | 0.16 | | | $ | 0.41 | | | $ | 0.31 | |
| Diluted | | $ | 0.17 | | | $ | 0.16 | | | $ | 0.41 | | | $ | 0.31 | |
| Weighted average shares outstanding – Basic | | | 5,987,866 | (1) | | | 5,995,114 | (2) | | | 5,985,629 | (1) | | | 5,985,772 | (2) |
| Weighted average shares outstanding – Diluted | | | 5,987,866 | | | | 6,073,991 | | | | 5,985,629 | | | | 6,072,146 | |
| (1) | Weighted average shares outstanding – Basic includes 262,877 vested and ratably earned shares of the 326,300 restricted shares granted and issued |
| | under the 2004 Management Recognition Plan (“MRP”), net of forfeited shares. |
| | |
| (2) | Weighted average shares outstanding – Basic includes 196,818 vested and ratably earned shares of the 329,300 restricted shares granted and issued |
| | under the MRP, net of forfeited shares. |
Rainier Pacific Financial Group, Inc. & Subsidiary
Selected Information and Ratios
(Dollars in Thousands, except per share data)
| | | Three Months Ended | |
| | | June 30, 2008 | | | March 31, 2008 | | | December 31, 2007 | | | September 30, 2007 | |
| INTEREST INCOME | | | | | | | | | | | | |
| Loans | | $ | 11,191 | | | $ | 11,277 | | | $ | 11,808 | | | $ | 12,127 | |
| Securities available-for-sale | | | 1,276 | | | | 1,857 | | | | 2,102 | | | | 2,015 | |
| Securities held-to-maturity | | | 420 | | | | 451 | | | | 512 | | | | 527 | |
| Interest-bearing deposits | | | 6 | | | | 27 | | | | 23 | | | | 28 | |
| FHLB dividends | | | 48 | | | | 34 | | | | 27 | | | | 21 | |
| Total interest income | | | 12,941 | | | | 13,646 | | | | 14,472 | | | | 14,718 | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Deposits | | | 2,979 | | | | 3,587 | | | | 3,960 | | | | 4,104 | |
| Borrowed funds | | | 3,524 | | | | 3,516 | | | | 3,751 | | | | 3,881 | |
| Total interest expense | | | 6,503 | | | | 7,103 | | | | 7,711 | | | | 7,985 | |
| Net interest income | | | 6,438 | | | | 6,543 | | | | 6,761 | | | | 6,733 | |
| PROVISION FOR LOAN LOSSES | | | 550 | | | | 150 | | | | 150 | | | | 150 | |
Net interest income after provision for loan loss | | | 5,888 | | | | 6,393 | | | | 6,611 | | | | 6,583 | |
| NON-INTEREST INCOME | | | | | | | | | | | | | | | | |
| Deposit service fees | | | 908 | | | | 839 | | | | 885 | | | | 906 | |
| Loan service fees | | | 287 | | | | 315 | | | | 295 | | | | 381 | |
| Insurance service fees | | | 529 | | | | 550 | | | | 595 | | | | 552 | |
| Investment service fees | | | 121 | | | | 164 | | | | 134 | | | | 189 | |
| Real estate lease income | | | 262 | | | | 246 | | | | 249 | | | | 298 | |
| Gain on sale of securities, net | | | - | | | | 11 | | | | - | | | | - | |
| Gain on sale of loans, net | | | 450 | | | | 235 | | | | 117 | | | | 60 | |
| Gain (loss) on sale of premises and equipment, net | | | 6 | | | | - | | | | (1 | ) | | | 1 | |
| Other operating income | | | 38 | | | | 461 | | | | 354 | | | | 25 | |
| Total non-interest income | | | 2,601 | | | | 2,821 | | | | 2,628 | | | | 2,412 | |
| NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 4,042 | | | | 4,060 | | | | 4,043 | | | | 4,237 | |
| Office operations | | | 937 | | | | 955 | | | | 1,014 | | | | 1,006 | |
| Occupancy | | | 616 | | | | 614 | | | | 672 | | | | 649 | |
| Loan servicing | | | 123 | | | | 109 | | | | 129 | | | | 130 | |
| Outside and professional services | | | 248 | | | | 448 | | | | 426 | | | | 250 | |
| Marketing | | | 218 | | | | 284 | | | | 226 | | | | 278 | |
| Other operating expenses | | | 716 | | | | 488 | | | | 943 | | | | 799 | |
| Total non-interest expense | | | 6,900 | | | | 6,958 | | | | 7,453 | | | | 7,349 | |
| | | | | | | | | | | | | | | | | |
| INCOME BEFORE PROVISION FOR FEDERAL INCOME TAX | | | 1,589 | | | | 2,256 | | | | 1,786 | | | | 1,646 | |
| | | | | | | | | | | | | | | | | |
| PROVISION FOR FEDERAL INCOME TAX | | | 572 | | | | 812 | | | | 876 | | | | 574 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME | | $ | 1,017 | | | $ | 1,444 | | | $ | 910 | | | $ | 1,072 | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER COMMON SHARE | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.17 | | | $ | 0.24 | | | $ | 0.15 | | | $ | 0.18 | |
| Diluted | | $ | 0.17 | | | $ | 0.24 | | | $ | 0.15 | | | $ | 0.18 | |
| Weighted average shares outstanding – Basic | | | 5,987,866 | (1) | | | 5,983,393 | (2) | | | 5,979,580 | (3) | | | 5,983,586 | (4) |
| Weighted average shares outstanding – Diluted | | | 5,987,866 | | | | 5,983,393 | | | | 5,979,580 | | | | 5,983,586 | |
| (1) | Weighted average shares outstanding – Basic includes 262,877 vested and ratably earned shares of the 326,300 restricted shares granted and issued under the MRP, net of forfeited shares. |
| (2) | Weighted average shares outstanding – Basic includes 245,972 vested and ratably earned shares of the 326,300 restricted shares granted and issued under the MRP, net of forfeited shares. |
| (3) | Weighted average shares outstanding – Basic includes 228,175 vested and ratably earned shares of the 326,900 restricted shares granted and issued under the MRP, net of forfeited shares. |
| (4) | Weighted average shares outstanding – Basic includes 212,593 vested and ratably earned shares of the 327,700 restricted shares granted and issued under the MRP, net of forfeited shares. |
Rainier Pacific Financial Group, Inc. & Subsidiary
Selected Information and Ratios
(Dollars in Thousands, except per share data)
| | | As of | |
| | | June 30, | | | March 31, | | | December 31, | | | September 30, | | | June 30, | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | |
| Loan portfolio composition: | | | | | | | | | | | | | | | |
| Real estate: | | | | | | | | | | | | | | | |
| One- to four-family residential | | $ | 75,879 | | | $ | 84,211 | | | $ | 76,882 | | | $ | 78,621 | | | $ | 79,018 | |
| Five or more family residential | | | 146,050 | | | | 148,991 | | | | 149,080 | | | | 149,474 | | | | 159,137 | |
| Commercial | | | 245,522 | | | | 223,076 | | | | 212,901 | | | | 214,130 | | | | 215,442 | |
| Total real estate | | | 467,451 | | | | 456,278 | | | | 438,863 | | | | 442,225 | | | | 453,597 | |
| Real estate construction: | | | | | | | | | | | | | | | | | | | | |
| One- to four-family residential | | | 79,581 | | | | 78,607 | | | | 73,114 | | | | 70,867 | | | | 72,838 | |
| Five or more family residential | | | - | | | | - | | | | 1,839 | | | | 2,019 | | | | 3,187 | |
| Commercial | | | 4,032 | | | | 4,157 | | | | 3,827 | | | | 1,834 | | | | - | |
| Total real estate construction | | | 83,613 | | | | 82,764 | | | | 78,780 | | | | 74,720 | | | | 76,025 | |
| Consumer: | | | | | | | | | | | | | | | | | | | | |
| Automobile | | | 15,621 | | | | 18,027 | | | | 20,798 | | | | 23,711 | | | | 26,623 | |
| Home equity | | | 42,344 | | | | 43,980 | | | | 45,293 | | | | 44,537 | | | | 44,610 | |
| Credit cards | | | 22,063 | | | | 22,120 | | | | 23,172 | | | | 22,601 | | | | 22,018 | |
| Other | | | 7,962 | | | | 7,812 | | | | 7,411 | | | | 7,383 | | | | 7,310 | |
| Total consumer | | | 87,990 | | | | 91,939 | | | | 96,674 | | | | 98,232 | | | | 100,561 | |
| Commercial business | | | 24,920 | | | | 24,643 | | | | 22,683 | | | | 18,142 | | | | 17,202 | |
| Subtotal | | | 663,974 | | | | 655,624 | | | | 637,000 | | | | 633,319 | | | | 647,385 | |
| Less: Allowance for loan losses | | | (8,271 | ) | | | (7,979 | ) | | | (8,079 | ) | | | (8,142 | ) | | | (8,235 | ) |
| Total loans, net | | $ | 655,703 | | | $ | 647,645 | | | $ | 628,921 | | | $ | 625,177 | | | $ | 639,150 | |
| Sold loans, serviced for others | | $ | 127,824 | | | $ | 115,214 | | | $ | 114,629 | | | $ | 113,306 | | | $ | 113,434 | |
| Non-performing assets: | | | | | | | | | | | | | | | | | | | | |
Loans 90 days or more past due or non-accrual loans (1): | | | | | | | | | | | | | | | | | | | | |
| Real estate | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| Real estate construction | | | 13,461 | | | | - | | | | - | | | | - | | | | - | |
| Consumer | | | 415 | | | | 426 | | | | 497 | | | | 197 | | | | 217 | |
| Commercial business | | | - | | | | - | | | | - | | | | - | | | | - | |
| Repossessed assets | | | - | | | | 6 | | | | 49 | | | | 23 | | | | 16 | |
| Other real estate owned | | | 446 | | | | 1,222 | | | | - | | | | - | | | | - | |
| Total non-performing assets | | $ | 14,322 | | | $ | 1,654 | | | $ | 546 | | | $ | 220 | | | $ | 233 | |
Loans greater than 30 days delinquent (1) | | $ | 7,091 | | | $ | 1,678 | | | $ | 2,125 | | | $ | 1,762 | | | $ | 1,651 | |
| Loans greater than 30 days delinquent as a percentage of loans | | | 1.07 | % | | | 0.26 | % | | | 0.33 | % | | | 0.28 | % | | | 0.26 | % |
| Non-performing loans as a percentage of loans | | | 2.09 | % | | | 0.06 | % | | | 0.08 | % | | | 0.03 | % | | | 0.03 | % |
| Non-performing assets as a percentage of assets | | | 1.65 | % | | | 0.19 | % | | | 0.06 | % | | | 0.02 | % | | | 0.03 | % |
| Allowance for loan loss as a percentage of non-performing loans | | | 59.61 | % | | | 1,873.00 | % | | | 1,625.55 | % | | | 4,132.99 | % | | | 3,794.93 | % |
| Allowance for loan loss as a percentage of non-performing assets | | | 57.75 | % | | | 482.41 | % | | | 1,479.67 | % | | | 3,700.91 | % | | | 3,534.33 | % |
| Allowance for loan loss as a percentage of total loans | | | 1.25 | % | | | 1.22 | % | | | 1.27 | % | | | 1.29 | % | | | 1.27 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Core deposits (all deposits, excluding CDs) | | $ | 238,271 | | | $ | 229,401 | | | $ | 226,743 | | | $ | 236,411 | | | $ | 242,446 | |
| Non-core deposits (CDs) | | | 225,454 | | | | 241,971 | | | | 234,744 | | | | 224,506 | | | | 217,870 | |
| Total deposits | | $ | 463,725 | | | $ | 471,372 | | | $ | 461,487 | | | $ | 460,917 | | | $ | 460,316 | |
| Loans/Deposits | | | 143.18 | % | | | 139.09 | % | | | 138.03 | % | | | 137.40 | % | | | 140.64 | % |
| Equity/Assets | | | 8.68 | % | | | 9.56 | % | | | 9.88 | % | | | 10.16 | % | | | 9.94 | % |
| Tangible Equity/Assets | | | 8.30 | % | | | 9.18 | % | | | 9.48 | % | | | 9.80 | % | | | 9.58 | % |
| | (1) | The Company may classify selected loans as non-accrual eventhough the contractual payments on the loans are not past due, based upon other factors or characteristics known to the Company relating to the loan or the borrower. Therefore, the amount of loans reported as “90 days or more past due or non-accrual loans” may exceed the amount of loans reported as “greater than 30 days delinquent”. |
Rainier Pacific Financial Group, Inc. & Subsidiary
Selected Information and Ratios
(Dollars in Thousands, except per share data)
| | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Loan growth | | | 1.27% | | | | 1.39% | | | | 4.23% | | | | 1.25% | |
| Deposit growth (decline) | | | (1.62%) | | | | (1.38%) | | | | 0.48% | | | | 0.63% | |
| Equity growth (decline) | | | (10.11%) | | | | 1.26% | | | | (12.98%) | | | | 2.37% | |
| Asset growth (decline) | | | (0.95%) | | | | (0.19%) | | | | (0.95%) | | | | 0.24% | |
| | | | | | | | | | | | | | | | | |
| Loans originated | | $ | 66,267 | | | $ | 61,072 | | | $ | 146,521 | | | $ | 101,437 | |
| Loans sold | | $ | 22,878 | | | $ | 5,558 | | | $ | 36,456 | | | $ | 12,377 | |
| Loans charged-off, net | | $ | 258 | | | $ | 191 | | | $ | 508 | | | $ | 348 | |
| | | | | | | | | | | | | | | | | |
| Increase in non-interest income | | | 10.96% | | | | 5.49% | | | | 18.23% | | | | 8.11% | |
| Decrease in non-interest expense | | | (2.84%) | | | | (0.01%) | | | | (2.48%) | | | | (1.20%) | |
| Net charge-offs to average loans | | | 0.16% | | | | 0.12% | | | | 0.16% | | | | 0.11% | |
| Efficiency ratio | | | 76.34% | | | | 81.05% | | | | 75.30% | | | | 81.71% | |
| Return on assets | | | 0.46% | | | | 0.43% | | | | 0.56% | | | | 0.41% | |
| Return on equity | | | 5.00% | | | | 4.39% | | | | 5.87% | | | | 4.21% | |
| | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | |
| Yield on loans | | | 6.80% | | | | 7.27% | | | | 6.96% | | | | 7.26% | |
| Yield on investments | | | 4.63% | | | | 5.34% | | | | 5.19% | | | | 5.34% | |
| Yield on FHLB stock | | | 1.40% | | | | 0.60% | | | | 1.20% | | | | 0.50% | |
| Yield on interest-earning assets | | | 6.32% | | | | 6.71% | | | | 6.52% | | | | 6.70% | |
| | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | |
| Cost of deposits | | | 2.84% | | | | 3.83% | | | | 3.16% | | | | 3.86% | |
| Cost of borrowed funds | | | 4.38% | | | | 4.45% | | | | 4.39% | | | | 4.45% | |
| Cost of interest-bearing liabilities | | | 3.51% | | | | 4.11% | | | | 3.69% | | | | 4.12% | |
| Net interest rate spread | | | 2.81% | | | | 2.60% | | | | 2.83% | | | | 2.58% | |
| | | | | | | | | | | | | | | | | |
| Net interest margin | | | 3.13% | | | | 3.01% | | | | 3.17% | | | | 2.98% | |
| | | | | | | | | | | | | | | | | |
| Net interest margin-quarter ended 06/30/2008 | | | 3.13% | | | | | | | | | | | | | |
| Net interest margin-quarter ended 03/31/2008 | | | 3.20% | | | | | | | | | | | | | |
| Net interest margin-quarter ended 12/31/2007 | | | 3.23% | | | | | | | | | | | | | |
| Net interest margin-quarter ended 09/30/2007 | | | 3.20% | | | | | | | | | | | | | |
| | | As of | |
| | | June 30, | | | March 31, | | | December 31, | | | September 30, | | | June 30, | |
| | | 2008 | | | 2008 | | | 2007 | | | 2007 | | | 2007 | |
| Shares outstanding at end of period | | | 6,065,625 | (1) | | | 6,078,444 | (2) | | | 6,076,370 | (3) | | | 6,109,633 | (4) | | | 6,144,259 | (5) |
| Book value per share | | $ | 12.46 | | | $ | 13.83 | | | $ | 14.29 | | | $ | 14.67 | | | $ | 14.63 | |
| Tangible book value per share | | $ | 11.91 | | | $ | 13.27 | | | $ | 13.77 | | | $ | 14.15 | | | $ | 14.11 | |
| (1) | Shares outstanding represent 6,421,940 shares issued (including 63,423 unvested restricted shares granted under the MRP), less 356,315 unallocated shares under the ESOP. |
| (2) | Shares outstanding represent 6,451,733 shares issued (including 80,328 unvested restricted shares granted under the MRP), less 373,289 unallocated shares under the ESOP. |
| (3) | Shares outstanding represent 6,466,633 shares issued (including 98,725 unvested restricted shares granted under the MRP), less 390,263 unallocated shares under the ESOP. |
| (4) | Shares outstanding represent 6,516,870 shares issued (including 115,108 unvested restricted shares granted under the MRP), less 407,237 unallocated shares under the ESOP. |
| (5) | Shares outstanding represent 6,568,470 shares issued (including 132,482 unvested restricted shares granted under the MRP), less 424,211 unallocated shares under the ESOP. |
