EXHIBIT 99.1
Encore Bancshares Reports Third Quarter 2010 Results and Announces Agreement to Sell $25.3 Million of Florida Problem Loans
HOUSTON, Oct. 29, 2010 (GLOBE NEWSWIRE) -- Encore Bancshares, Inc. (Nasdaq:EBTX) today announced its financial results for the third quarter of 2010.
Texas franchise shows strong growth
- Demand deposits grew 49.0% compared with September 30, 2009
- Commercial loans grew 5.1% compared with September 30, 2009
- Assets under management grew 8.5% compared with September 30, 2009
Florida branch transaction expected to close in the fourth quarter 2010
- Loans held for sale of $66.3 million
- Deposits held for sale of $187.4 million
Agreement to sell majority of the Florida problem loans
- Agreed to sell approximately $25.3 million of Florida loans in a bulk sale
- Mark to market charge of $8.5 million recorded in the third quarter 2010
- Upon completion of sale, nonperforming loans reduced by $19.8 million
Capital position and credit reserves remain strong
- Estimated tier 1 capital of 13.51% and tangible common equity ratio of 6.19%
- Allowance for loan losses of 2.27% of loans, excluding loans held for sale
"We believe that we have recognized substantially all of the cost associated with exiting the Florida market," said James S. D'Agostino, Jr., Chairman and Chief Executive Officer of Encore Bancshares, Inc. "We see good opportunities to grow in Houston and we plan to devote all our resources to increasing our franchise and improving profitability."
Earnings
For the three months ended September 30, 2010, our net loss was $8.4 million, compared with a net loss of $1.8 million for the same period of 2009. Loss per diluted common share for the third quarter of 2010 was $0.79, after deducting preferred dividends, compared with a loss per diluted common share of $0.22 for the same period of 2009. During the third quarter, we marked-to-market certain Florida loans, including those we recently agreed to sell, and repossessed real estate, resulting in a charge of $11.3 million to the allowance for loan losses, a charge to the income statement of $1.0 million for the write down of loans held for sale, and a $2.8 million write down of repossessed real estate. Additionally, we provisioned $9.6 million to the allowance for loan losses.
For the nine months ended September 30, 2010, the net loss was $23.3 million, compared with net earnings of $203,000 for the same period of 2009. The loss per diluted common share, after deducting preferred dividends, was $2.25, compared with a net loss of $0.14 per diluted common share for the comparable period of 2009. The loss was due primarily to credit costs and write downs of assets held for sale in Florida.
Net Interest Income
Net interest income on a tax equivalent basis (TE) for the third quarter of 2010 was $11.1 million, a decrease of $993,000, or 8.2% compared with the same period of 2009. The net interest margin (TE) contracted 30 basis points to 2.83% during the same comparison period. Net interest income (TE) for the nine months ended September 30, 2010 was $33.8 million, a decrease of $1.4 million, or 4.1%, compared with the same period of 2009. The net interest margin (TE) contracted 17 basis points during this same comparison period. The decrease in margin for both periods was due primarily to the decrease in loans and an offsetting increase in short term lower yielding investments. On a linked quarter basis (compared with the immediately preceding quarter), net interest income (TE) was essentially flat, as average earning assets increased by approximately $34.9 million, but the net interest margin decreased 9 basis points. The decrease in margin was due to a combination of lower securitie s yields, which was a result of securities maturing and having to be reinvested at lower yields, and an increase in low yielding temporary investments. Average temporary investments, which we are holding partly in anticipation of the remaining Florida branch sale, were $290.5 million or 18.7% of average interest earning assets for the third quarter of 2010.
Noninterest Income
Noninterest income was $7.0 million for the third quarter of 2010, an increase of $215,000, or 3.2%, compared with the same period of 2009. The increase was due primarily to a combination of trust and investment management fees, which increased $138,000, or 3.1%, as assets under management grew 8.5% due primarily to the improvements in the equity markets, and insurance commissions, which increased $159,000, or 11.6%, because of new commercial business.
Noninterest Expense
Noninterest expense was $20.7 million for the third quarter of 2010, an increase of $7.4 million, compared with the same period of 2009. The increase was due primarily to a combination of higher compensation expense, foreclosed real estate expense, FDIC assessment and write down of loans held for sale. Compensation expense rose in part due to the addition of new lenders earlier in the year to grow the bank's commercial lending platform in Houston. The increase in FDIC assessment reflects a higher assessment rate and a more rapid amortization of the prepaid FDIC assessment. The rise in foreclosed real estate expense reflected $3.2 million in write downs of primarily Florida real estate. In addition, we incurred a $1.0 million charge in write downs of loans held for sale.
Segment Earnings
On a segment basis, our banking segment showed a net loss of $9.3 million, compared with a net loss of $2.6 million in the same period of 2009, due primarily to credit costs and write downs of loans and real estate in Florida. Our wealth management group had net earnings of $792,000 for the third quarter of 2010, a decrease of $74,000 or 8.5%. Wealth management fees increased due to rising equity valuations, but were offset by higher expense, which was primarily compensation related. Our insurance agency showed net earnings of $251,000 for the third quarter of 2010, an increase of $76,000, due to higher insurance commissions, associated with new commercial customers.
Loans
Period end loans, including loans held for sale, were $1.0 billion at September 30, 2010, a decrease of $70.1 million, or 6.3%, compared with September 30, 2009. The decrease was due primarily to lower construction, land loans and commercial real estate loans. Commercial loans in Texas grew 5.1% in the same comparison period, and grew 8.9% year to date. Additionally, we have entered into an agreement to sell $25.3 million of Florida problem loans. These loans are classified as held-for-sale at September 30, 2010.
Deposits
Period end deposits, including deposits held for sale, were $1.2 billion, at September 30, 2010, an increase of $66.7 million, or 5.7%, compared with September 30, 2009. Noninterest bearing accounts in Texas were $205.9 million, an increase of $67.7 million, or 49.0%, and represent 19.7% of total deposits in Texas at September 30, 2010. Average deposits were $1.2 billion for the third quarter of 2010, an increase of $64.1 million, or 5.5%, compared with the same period of 2009.
Credit Quality and Capital Ratios
The provision for loan losses was $9.6 million for the third quarter of 2010, compared with $7.7 million for the same period of 2009. Net charge-offs for the third quarter were $15.3 million, or 5.75% of average total loans on an annualized basis, compared with $5.3 million, or 1.88% of average total loans on an annualized basis in the same period of 2009. Commercial loan charge-offs were $13.6 million, primarily reflecting the $11.3 million in mark to market write downs of certain Florida loans reclassified to held-for-sale. Consumer loan charge-offs were $2.1 million, which reflected a $1.4 million decrease compared with the second quarter, due primarily to our semiannual review of the purchased loan portfolio in the second quarter. The allowance for loan losses was $21.0 million, or 2.27% of loans, excluding loans held for sale, at September 30, 2010, compared with $27.6 million, or 2.49% of loans at September 30, 2009.
At September 30, 2010, nonperforming assets were $62.5 million compared with $77.8 million at June 30, 2010 and $45.3 million at September 30, 2009. The following provides proforma nonperforming asset data reflecting the announced sale:
| Total nonperforming assets before sale | $ 62,548 |
| Sale of Florida nonaccrual loans | (19,803) |
| Total nonperforming assets after sale | $ 42,745 |
| | |
| Nonperforming assets to total loans | |
| and investment in real estate after sale | 4.18% |
Nonperforming loans in Texas were $17.4 million at September 30, 2010, compared with $22.4 million at June 30, 2010. The decrease was due primarily to the repossession of a $3.9 million home loan. Nonperforming loans in Florida were $34.3 million at September 30, 2010, compared with $41.8 million at June 30, 2010. Proforma nonperforming loans in Florida (giving effect to the announced loan sale) were $14.4 million, a decrease of $27.3 million, or 65.4% compared with June 30, 2010.
In addition, during the third quarter, we sold a $3.2 million land loan and a $1.0 million commercial real estate loan. The remaining $14.4 million in nonperforming Florida loans have been written down to 54.2% of the legal loan balance. After the sales, the balance of portfolio loans in Florida total $29.1 million, of which $11.7 million is held-for-sale.
Investment in real estate was $10.9 million at September 30, 2010, compared with $13.6 million at June 30, 2010, a decrease of $2.8 million, or 20.2%. The decrease was due primarily to the write down of Florida real estate. Restructured loans still accruing were $2.6 million at September 30, 2010, compared with $1.1 million at June 30, 2010. The increase was due primarily to a land loan in Florida.
As of September 30, 2010, our estimated Tier 1 risk-based, total risk-based and leverage capital ratios were 13.51%, 14.77%, and 9.18%, respectively. In addition, Encore Bank was considered "well capitalized" pursuant to regulatory capital definitions. Book value per share and tangible book value per share were $12.33 and $8.76 at September 30, 2010, compared with $13.06 and $9.47 at June 30, 2010. The decrease was primarily due to the loss for the quarter.
Conference Call
Encore will host a conference call for investors and analysts that will be broadcast live via the Internet on Friday, October 29, 2010, at 10:00 a.m. Eastern Time. Interested parties may participate by calling 877-303-6295 at least ten minutes prior to the start time.
To listen to this conference call live via the Internet, please visit the Investor Relations section of the Company's web site at http://www.encorebank.com at least fifteen minutes prior to the call to register, download and install any necessary audio software. An audio archive of the call will also be available on the web site on or before Monday, November 1, 2010.
About Encore Bancshares, Inc.
Encore Bancshares, Inc. is a financial holding company headquartered in Houston, Texas and offers a broad range of banking, wealth management and insurance services through Encore Bank, N.A., and its affiliated companies. Encore Bank operates 11 private client offices in the Greater Houston area and four in southwest Florida. Headquartered in Houston and with $1.7 billion in assets, Encore Bank builds relationships with professional firms, privately-owned businesses, investors and affluent individuals. Encore Bank offers a full range of business and personal banking products and services, as well as financial planning, wealth management, trust and insurance products through its trust division, Encore Trust, and its affiliated companies, Linscomb & Williams and Town & Country Insurance. Products and services offered by Encore Bank's affiliates are not FDIC insured. The Company's common stock is listed on the NASDAQ Global Market under the symbol "EBTX".
The Encore Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4257
This press release contains certain financial information determined by methods other than in accordance with GAAP. Specifically, Encore reviews tangible book value per share, return on average tangible common equity and the tangible common equity to tangible assets ratio for internal planning and forecasting purposes. Encore reviews its net interest income, net interest spread and net interest margin on a tax equivalent basis, which is standard practice in the banking industry. Encore has included in this press release information relating to these non-GAAP financial measures for the applicable periods presented. Encore's management believes these non-GAAP financial measures provide information useful to investors in understanding our financial results and believes that its presentation, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Additionally, Encore has reviewed and presented non-GAAP financial information related to its Florida operations held-for-sale on pages 11 and 12. Encore's management believes this non-GAAP financial information is useful to investors in understanding our financial results. These non-GAAP measures should not be considered a substitute for operating results determined in accordance with GAAP and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
This press release contains certain forward-looking information about Encore Bancshares that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: competitive pressure among financial institutions; volatility and disruption in national and international financial markets; government intervention in the U.S. financial system; our ability to expand and grow our businesses and operations and to realize the cost savings and revenue enhancements expected from such activities; a deterioration of credit quality or a reduced demand for credit; the failure to complete the pending transactions for the sale of certain Florida problem loans and the sale of our Florida operations; incorrect assumptions underlying the establishment of and provisions made to the allowance for loan losses; changes in the interest rate environment; the continued service of key management personnel; our ability to attract, motivate and retain key employees; the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; changes in availability of funds; general economic conditions, either nationally, regionally or in the market areas in which we operate; legislative or regulatory developments or changes in laws; changes in the securities markets and other risks that are described from time to time in our 2009 Annual Report on Form 10-K and other reports and documents filed with the Securities and Exchange Commission.
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| Encore Bancshares, Inc. and Subsidiaries |
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| FINANCIAL HIGHLIGHTS |
| | | | | |
| (Unaudited, amounts in thousands, except per share data) |
| | | |
| | As of and for the Three | As of and for the Nine |
| | Months Ended September 30, | Months Ended September 30, |
| | 2010 | 2009 | 2010 | 2009 |
| | | | | |
| Operations Statement Data: | | | | |
| Interest income | $ 16,922 | $ 19,517 | $ 52,078 | $ 58,671 |
| Interest expense | 5,953 | 7,562 | 18,680 | 23,797 |
| Net interest income | 10,969 | 11,955 | 33,398 | 34,874 |
| Provision for loan losses | 9,599 | 7,685 | 32,572 | 13,651 |
| Net interest income after provision for loan losses | 1,370 | 4,270 | 826 | 21,223 |
| Noninterest income | 7,028 | 6,813 | 21,884 | 19,244 |
| Noninterest expense | 20,728 | 13,289 | 58,387 | 39,737 |
| Net earnings (loss) before income taxes | (12,330) | (2,206) | (35,677) | 730 |
| Income tax expense (benefit) | (3,904) | (453) | (12,347) | 527 |
| Net earnings (loss) | $ (8,426) | $ (1,753) | $ (23,330) | $ 203 |
| Earnings (loss) available to common shareholders | $ (8,981) | $ (2,306) | $ (24,997) | $ (1,457) |
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| Common Share Data: | | | | |
| Basic earnings (loss) per share (1) | $ (0.79) | $ (0.22) | $ (2.25) | $ (0.14) |
| Diluted earnings (loss) per share (1) | (0.79) | (0.22) | (2.25) | (0.14) |
| Book value per share | 12.33 | 15.01 | 12.33 | 15.01 |
| Tangible book value per share (2) | 8.76 | 11.83 | 8.76 | 11.83 |
| | | | | |
| Average common shares outstanding | 11,380 | 10,441 | 11,108 | 10,337 |
| Diluted average common shares outstanding | 11,380 | 10,441 | 11,108 | 10,337 |
| Shares outstanding at end of period | 11,380 | 10,499 | 11,380 | 10,499 |
| | | | | |
| Selected Performance Ratios: | | | | |
| Return on average assets | (2.01)% | (0.43)% | (1.91)% | 0.02% |
| Return on average common equity (1) | (24.02)% | (5.72)% | (21.45)% | (1.22)% |
| Return on average tangible common equity (1)(2) | (33.13)% | (7.24)% | (29.10)% | (1.55)% |
| Taxable-equivalent net interest margin (2) | 2.83% | 3.13% | 2.95% | 3.12% |
| Efficiency ratio | 110.27% | 71.37% | 96.06% | 73.00% |
| Noninterest income to total revenue | 39.05% | 36.30% | 39.59% | 35.56% |
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| (1) Using earnings (loss) available to common shareholders. |
| (2) Non-GAAP measure. See calculation of tangible common equity and taxable-equivalent amounts in subsequent tables. |
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| Encore Bancshares, Inc. and Subsidiaries |
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| CONSOLIDATED BALANCE SHEETS |
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| (Unaudited, dollars in thousands, except per share data) |
| | | | | | |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, |
| | 2010 | 2010 | 2010 | 2009 | 2009 |
| | | | | | |
| ASSETS | | | | | |
| Cash and due from banks | $ 16,825 | $ 14,718 | $ 18,420 | $ 16,796 | $ 15,035 |
| Interest-bearing deposits in banks | 231,866 | 314,624 | 237,771 | 172,984 | 144,238 |
| Federal funds sold and other | 993 | 902 | 1,695 | 7,396 | 6,818 |
| Cash and cash equivalents | 249,684 | 330,244 | 257,886 | 197,176 | 166,091 |
| Securities available-for-sale, at estimated fair value | 198,530 | 72,153 | 138,495 | 140,651 | 134,079 |
| Securities held-to-maturity, at amortized cost | 55,436 | 68,628 | 88,454 | 117,171 | 117,316 |
| Loans held-for-sale | 111,505 | 77,914 | 81,953 | 1,058 | -- |
| Loans receivable | 924,589 | 972,765 | 974,301 | 1,078,205 | 1,106,169 |
| Allowance for loan losses | (20,967) | (26,675) | (25,132) | (26,501) | (27,575) |
| Net loans receivable | 903,622 | 946,090 | 949,169 | 1,051,704 | 1,078,594 |
| Federal Home Loan Bank of Dallas stock, at cost | 9,602 | 9,593 | 9,578 | 9,569 | 9,565 |
| Investment in real estate | 10,852 | 13,602 | 11,054 | 14,639 | 6,952 |
| Premises and equipment, net | 7,284 | 7,567 | 9,327 | 15,484 | 15,953 |
| Cash surrender value of life insurance policies | 15,786 | 15,637 | 15,489 | 15,339 | 15,182 |
| Goodwill | 35,799 | 35,799 | 35,799 | 35,799 | 27,873 |
| Other intangible assets, net | 4,876 | 5,034 | 5,192 | 5,351 | 5,521 |
| Accrued interest receivable and other assets | 44,430 | 40,085 | 32,176 | 31,414 | 23,594 |
| Other assets held-for-sale | 3,256 | 3,269 | 3,344 | -- | -- |
| | $ 1,650,662 | $ 1,625,615 | $ 1,637,916 | $ 1,635,355 | $ 1,600,720 |
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| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | |
| Deposits: | | | | | |
| Noninterest-bearing | $ 205,927 | $ 182,729 | $ 156,071 | $ 174,102 | $ 152,367 |
| Interest-bearing | 838,125 | 832,876 | 802,597 | 1,017,734 | 1,012,466 |
| Deposits held-for-sale | 187,433 | 184,106 | 242,755 | -- | -- |
| Total deposits | 1,231,485 | 1,199,711 | 1,201,423 | 1,191,836 | 1,164,833 |
| Borrowings and repurchase agreements | 220,818 | 219,602 | 218,560 | 220,612 | 221,492 |
| Junior subordinated debentures | 20,619 | 20,619 | 20,619 | 20,619 | 20,619 |
| Accrued interest payable and other liabilities | 8,028 | 7,804 | 7,094 | 15,620 | 7,316 |
| Other liabilities held-for-sale | 6 | 6 | 10 | -- | -- |
| Total liabilities | 1,480,956 | 1,447,742 | 1,447,706 | 1,448,687 | 1,414,260 |
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| Commitments and contingencies | | | | | |
| Shareholders' equity: | | | | | |
| Preferred stock | 29,368 | 29,238 | 29,107 | 28,976 | 28,847 |
| Common stock | 11,421 | 11,416 | 11,195 | 10,527 | 10,508 |
| Additional paid-in capital | 121,939 | 121,533 | 121,345 | 116,084 | 115,860 |
| Retained earnings | 6,098 | 15,079 | 28,288 | 31,095 | 30,066 |
| Common stock in treasury, at cost | (389) | (346) | (319) | (233) | (123) |
| Accumulated other comprehensive income | 1,269 | 953 | 594 | 219 | 1,302 |
| Shareholders' equity | 169,706 | 177,873 | 190,210 | 186,668 | 186,460 |
| | $ 1,650,662 | $ 1,625,615 | $ 1,637,916 | $ 1,635,355 | $ 1,600,720 |
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| Ratios and Per Share Data: | | | | | |
| Leverage ratio (1) | 9.18% | 9.93% | 10.73% | 10.55% | 10.94% |
| Tier 1 risk-based capital ratio (1) | 13.51% | 14.59% | 15.56% | 14.80% | 15.30% |
| Total risk-based capital ratio (1) | 14.77% | 15.86% | 16.82% | 16.07% | 16.57% |
| Book value per share | $ 12.33 | $ 13.06 | $ 14.43 | $ 15.01 | $ 15.01 |
| Tangible book value per share (2) | 8.76 | 9.47 | 10.76 | 11.10 | 11.83 |
| Tangible common equity to tangible assets (2) | 6.19% | 6.80% | 7.52% | 7.31% | 7.93% |
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| (1) Estimated at September 30, 2010. |
| (2) Non-GAAP measure. See calculation of tangible common equity in subsequent table. |
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| Encore Bancshares, Inc. and Subsidiaries |
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| CONSOLIDATED STATEMENTS OF OPERATIONS |
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| (Unaudited, amounts in thousands, except per share data) |
| | | | | | | | |
| | Three Months Ended | Nine Months Ended |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | September 30, |
| | 2010 | 2010 | 2010 | 2009 | 2009 | 2010 | 2009 |
| Interest income: | | | | | | | |
| Loans, including fees | $ 14,196 | $ 14,111 | $ 14,316 | $ 16,157 | $ 17,045 | $ 42,623 | $ 51,744 |
| Loans held-for-sale | 1,212 | 1,330 | 1,378 | 11 | 34 | 3,920 | 94 |
| Securities | 1,276 | 1,526 | 2,046 | 2,177 | 2,258 | 4,848 | 6,341 |
| Federal funds sold and other | 238 | 234 | 215 | 210 | 180 | 687 | 492 |
| Total interest income | 16,922 | 17,201 | 17,955 | 18,555 | 19,517 | 52,078 | 58,671 |
| Interest expense: | | | | | | | |
| Deposits | 2,827 | 2,962 | 3,042 | 4,507 | 5,131 | 8,831 | 16,506 |
| Deposits held-for-sale | 698 | 863 | 1,010 | -- | -- | 2,571 | -- |
| Borrowings and repurchase agreements | 2,127 | 2,139 | 2,116 | 2,129 | 2,129 | 6,382 | 6,364 |
| Junior subordinated debentures | 301 | 298 | 297 | 298 | 302 | 896 | 927 |
| Total interest expense | 5,953 | 6,262 | 6,465 | 6,934 | 7,562 | 18,680 | 23,797 |
| Net interest income | 10,969 | 10,939 | 11,490 | 11,621 | 11,955 | 33,398 | 34,874 |
| Provision for loan losses | 9,599 | 18,013 | 4,960 | 3,009 | 7,685 | 32,572 | 13,651 |
| Net interest income after provision for loan losses | 1,370 | (7,074) | 6,530 | 8,612 | 4,270 | 826 | 21,223 |
| Noninterest income: | | | | | | | |
| Trust and investment management fees | 4,639 | 4,591 | 4,618 | 4,557 | 4,501 | 13,848 | 12,337 |
| Mortgage banking | 150 | 78 | 36 | 41 | 110 | 264 | 612 |
| Insurance commissions and fees | 1,524 | 1,488 | 1,639 | 1,098 | 1,365 | 4,651 | 4,379 |
| Net gain on sale of available-for-sale securities | 261 | 120 | 99 | 1,937 | 387 | 480 | 387 |
| Gain on sale of branches | -- | 1,115 | -- | -- | -- | 1,115 | -- |
| Other | 454 | 555 | 517 | 460 | 450 | 1,526 | 1,529 |
| Total noninterest income | 7,028 | 7,947 | 6,909 | 8,093 | 6,813 | 21,884 | 19,244 |
| Noninterest expense: | | | | | | | |
| Compensation | 8,503 | 8,638 | 8,551 | 7,657 | 7,761 | 25,692 | 22,506 |
| Occupancy | 1,395 | 1,454 | 1,478 | 1,546 | 1,496 | 4,327 | 4,504 |
| Equipment | 274 | 330 | 363 | 383 | 430 | 967 | 1,312 |
| Advertising and promotion | 146 | 153 | 181 | 177 | 214 | 480 | 630 |
| Outside data processing | 874 | 897 | 870 | 829 | 797 | 2,641 | 2,344 |
| Professional fees | 1,325 | 1,435 | 921 | 1,126 | 912 | 3,681 | 2,891 |
| Intangible amortization | 158 | 159 | 158 | 170 | 171 | 475 | 511 |
| FDIC assessment | 1,532 | 703 | 655 | 1,047 | 270 | 2,890 | 1,068 |
| Foreclosed real estate expenses, net | 4,458 | 1,402 | 1,124 | 675 | 183 | 6,984 | 828 |
| Write down of assets held-for-sale | 1,012 | 2,793 | 2,535 | -- | -- | 6,340 | -- |
| Other | 1,051 | 1,431 | 1,428 | 1,077 | 1,055 | 3,910 | 3,143 |
| Total noninterest expense | 20,728 | 19,395 | 18,264 | 14,687 | 13,289 | 58,387 | 39,737 |
| Net earnings (loss) before income taxes | (12,330) | (18,522) | (4,825) | 2,018 | (2,206) | (35,677) | 730 |
| Income tax expense (benefit) | (3,904) | (5,869) | (2,574) | 435 | (453) | (12,347) | 527 |
| Net earnings (loss) | $ (8,426) | $ (12,653) | $ (2,251) | $ 1,583 | $ (1,753) | $ (23,330) | $ 203 |
| Earnings (loss) available to common shareholders | $ (8,981) | $ (13,209) | $ (2,807) | $ 1,029 | $ (2,306) | $ (24,997) | $ (1,457) |
| Earnings (loss) per common share: | | | | | | | |
| Basic | $ (0.79) | $ (1.16) | $ (0.27) | $ 0.10 | $ (0.22) | $ (2.25) | $ (0.14) |
| Diluted | (0.79) | (1.16) | (0.27) | 0.09 | (0.22) | (2.25) | (0.14) |
| Average common shares outstanding | 11,380 | 11,375 | 10,558 | 10,513 | 10,441 | 11,108 | 10,337 |
| Diluted average common shares outstanding | 11,380 | 11,375 | 10,558 | 11,536 | 10,441 | 11,108 | 10,337 |
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| Encore Bancshares, Inc. and Subsidiaries |
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| SELECTED FINANCIAL DATA OF FLORIDA OPERATIONS HELD-FOR-SALE (1) |
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| (Unaudited, amounts in thousands) |
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| | Three Months Ended | Nine Months Ended |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | September 30, |
| Income and Expense Data | 2010 | 2010 | 2010 | 2009 | 2009 | 2010 | 2009 |
| Interest income on loans, including fees | $ 1,189 | $ 1,308 | $ 1,366 | $ 1,396 | $ 1,377 | $ 3,863 | $ 4,071 |
| Interest expense on deposits | 698 | 863 | 1,010 | 1,139 | 1,380 | 2,571 | 4,700 |
| Net interest income (expense) | 491 | 445 | 356 | 257 | (3) | 1,292 | (629) |
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| Write down of loans | -- | -- | 1,792 | -- | -- | 1,792 | -- |
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| Noninterest income | 8 | 31 | 25 | 21 | 15 | 64 | 38 |
| Noninterest expense: | | | | | | | |
| Compensation | 395 | 544 | 571 | 485 | 499 | 1,510 | 1,498 |
| Occupancy | 151 | 239 | 261 | 263 | 270 | 651 | 783 |
| Equipment | 11 | 20 | 53 | 56 | 65 | 84 | 188 |
| Advertising and promotion | 7 | 6 | 6 | 8 | 57 | 19 | 93 |
| Outside data processing | 2 | 2 | 10 | 1 | 3 | 14 | 3 |
| FDIC assessment | 231 | 139 | 127 | 213 | 203 | 497 | 227 |
| Write down of assets held-for-sale | 1,012 | 2,793 | 2,535 | -- | -- | 6,340 | -- |
| Other | 102 | 183 | 261 | 113 | 108 | 546 | 293 |
| Total noninterest expense | 1,911 | 3,926 | 3,824 | 1,139 | 1,205 | 9,661 | 3,085 |
| | | | | | | | |
| Net expense from Florida operations held-for-sale | (1,412) | (3,450) | (5,235) | (861) | (1,193) | (10,097) | (3,676) |
| | | | | | | | |
| Average Balances of Assets and Liabilities | | | | | | | |
| Assets: | | | | | | | |
| Loans | $ 72,468 | $ 79,981 | $ 84,594 | $ 86,543 | $ 85,413 | | |
| Noninterest-earning assets | 4,196 | 4,481 | 7,377 | 7,532 | 7,607 | | |
| Total assets | $ 76,664 | $ 84,462 | $ 91,971 | $ 94,075 | $ 93,020 | | |
| Liabilities: | | | | | | | |
| Interest checking | $ 42,361 | $ 45,770 | $ 46,780 | $ 43,461 | $ 37,078 | | |
| Money market and savings | 38,304 | 45,146 | 48,704 | 50,517 | 48,982 | | |
| Time deposits | 91,140 | 111,003 | 124,325 | 124,952 | 139,859 | | |
| Total interest-bearing deposits | 171,805 | 201,919 | 219,809 | 218,930 | 225,919 | | |
| Noninterest-bearing deposits | 14,983 | 17,830 | 17,213 | 14,412 | 14,455 | | |
| Other liabilities | 216 | 253 | 303 | 350 | 436 | | |
| Total liabilities | $ 187,004 | $ 220,002 | $ 237,325 | $ 233,692 | $ 240,810 | | |
| | | | | | | | |
(1) This data represents a non-GAAP presentation of Florida operations held-for-sale that we believe provides selected information
useful to investors in understanding our financial results. This information should not be considered a substitute for operating
results determined in accordance with GAAP. This table includes certain direct income and expense of our Florida operations
held-for-sale for all prior periods for comparison purposes and no corporate income or expense allocations have been made. |
| | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | |
| AVERAGE CONSOLIDATED BALANCE SHEETS |
| | | | | | |
| (Unaudited, dollars in thousands) |
| | | | | | |
| | Three Months Ended |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, |
| | 2010 | 2010 | 2010 | 2009 | 2009 |
| | | | | | |
| Assets: | | | | | |
| Interest-earning assets: | | | | | |
| Loans | $ 983,011 | $ 978,547 | $ 979,171 | $ 998,519 | $ 1,038,069 |
| Loans held-for-sale (1) | 73,646 | 81,148 | 85,204 | 87,097 | 87,129 |
| Total loans | 1,056,657 | 1,059,695 | 1,064,375 | 1,085,616 | 1,125,198 |
| Securities | 209,365 | 186,777 | 230,390 | 241,267 | 235,819 |
| Federal funds sold and other | 290,541 | 275,148 | 220,019 | 205,944 | 168,213 |
| Total interest-earning assets | 1,556,563 | 1,521,620 | 1,514,784 | 1,532,827 | 1,529,230 |
| Less: Allowance for loan losses | (27,144) | (24,796) | (26,672) | (27,197) | (23,972) |
| Noninterest-earning assets | 128,197 | 122,236 | 126,284 | 103,938 | 102,245 |
| Noninterest-earning assets held-for-sale (1) | 4,196 | 4,481 | 7,377 | 7,532 | 7,607 |
| Total assets | $ 1,661,812 | $ 1,623,541 | $ 1,621,773 | $ 1,617,100 | $ 1,615,110 |
| | | | | | |
| Liabilities and shareholders' equity: | | | | | |
| Interest-bearing liabilities: | | | | | |
| Interest checking | $ 139,820 | $ 145,856 | $ 153,023 | $ 151,181 | $ 154,475 |
| Money market and savings | 279,084 | 238,000 | 240,292 | 262,470 | 257,807 |
| Time deposits | 410,318 | 415,615 | 400,451 | 382,150 | 385,962 |
| Interest-bearing deposits held-for-sale (1) | 171,805 | 201,919 | 219,809 | 218,930 | 225,919 |
| Total interest-bearing deposits | 1,001,027 | 1,001,390 | 1,013,575 | 1,014,731 | 1,024,163 |
| Borrowings and repurchase agreements | 220,068 | 218,794 | 220,759 | 222,428 | 222,978 |
| Junior subordinated debentures | 20,619 | 20,619 | 20,619 | 20,619 | 20,619 |
| Total interest-bearing liabilities | 1,241,714 | 1,240,803 | 1,254,953 | 1,257,778 | 1,267,760 |
| Noninterest-bearing liabilities: | | | | | |
| Noninterest-bearing deposits | 220,166 | 168,021 | 146,779 | 148,921 | 133,433 |
| Noninterest-bearing deposits held-for-sale (1) | 14,983 | 17,830 | 17,213 | 14,412 | 14,455 |
| Other liabilities | 7,132 | 6,384 | 15,412 | 8,572 | 10,356 |
| Other liabilities held-for-sale (1) | 216 | 253 | 303 | 350 | 436 |
| Total liabilities | 1,484,211 | 1,433,291 | 1,434,660 | 1,430,033 | 1,426,440 |
| Shareholders' equity | 177,601 | 190,250 | 187,113 | 187,067 | 188,670 |
| Total liabilities and shareholders' equity | $ 1,661,812 | $ 1,623,541 | $ 1,621,773 | $ 1,617,100 | $ 1,615,110 |
| | | | | | |
(1) Portions of this table represent a non-GAAP presentation of Florida operations held-for-sale that we believe provide information
useful to investors in understanding our financial results. This table includes average balances of Florida operations held-for-sale
for all prior periods for comparison purposes. |
| | | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | | |
| SELECTED FINANCIAL DATA |
| | | | | | | |
| (Unaudited, dollars in thousands) |
| | | | | | | |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | |
| Loan Portfolio: | 2010 | 2010 | 2010 | 2009 | 2009 | |
| Commercial: | | | | | | |
| Commercial | $ 138,594 | $ 131,712 | $ 115,653 | $ 115,431 | $ 107,034 | |
| Commercial real estate | 154,476 | 189,471 | 199,166 | 259,480 | 253,634 | |
| Real estate construction | 54,140 | 55,332 | 66,618 | 87,008 | 118,513 | |
| Total commercial | 347,210 | 376,515 | 381,437 | 461,919 | 479,181 | |
| Consumer: | | | | | | |
| Residential real estate first lien | 207,386 | 215,911 | 211,366 | 222,337 | 228,090 | |
| Residential real estate second lien | 280,245 | 290,934 | 289,344 | 291,433 | 292,265 | |
| Home equity lines | 63,983 | 66,311 | 68,677 | 74,356 | 76,369 | |
| Consumer installment - indirect | 5,520 | 6,311 | 7,339 | 8,372 | 9,743 | |
| Consumer other | 20,245 | 16,783 | 16,138 | 19,788 | 20,521 | |
| Total consumer | 577,379 | 596,250 | 592,864 | 616,286 | 626,988 | |
| Loans receivable | 924,589 | 972,765 | 974,301 | 1,078,205 | 1,106,169 | |
| Loans held-for-sale | 111,505 | 77,914 | 81,953 | 1,058 | -- | |
| Total loans | $ 1,036,094 | $ 1,050,679 | $ 1,056,254 | $ 1,079,263 | $ 1,106,169 | |
| | | | | | | |
| Asset Quality: | | | | | | |
| Nonaccrual loans - Texas (1) | $ 17,445 | $ 22,441 | $ 8,860 | $ 9,908 | $ 9,128 | |
| Nonaccrual loans - Florida (1) | 34,251 | 41,773 | 31,851 | 26,080 | 29,241 | |
| Total nonaccrual loans (1) | 51,696 | 64,214 | 40,711 | 35,988 | 38,369 | |
| Investment in real estate - Texas | 5,762 | 6,194 | 6,954 | 9,494 | 4,054 | |
| Investment in real estate - Florida | 5,090 | 7,408 | 4,100 | 5,145 | 2,898 | |
| Total investment in real estate | 10,852 | 13,602 | 11,054 | 14,639 | 6,952 | |
| Total nonperforming assets | $ 62,548 | $ 77,816 | $ 51,765 | $ 50,627 | $ 45,321 | |
| | | | | | | |
| Accruing loans past due 90 days or more | $ -- | $ -- | $ -- | $ 1,489 | $ -- | |
| | | | | | | |
| Restructured loans still accruing | $ 2,570 | $ 1,072 | $ 5,710 | $ 530 | $ -- | |
| | | | | | | |
| Asset Quality Ratios: | | | | | | |
Nonperforming assets to total loans and
investment in real estate | 5.97% | 7.31% | 4.85% | 4.63% | 4.07% | |
| Net charge-offs to average total loans | 5.75% | 6.23% | 2.41% | 1.49% | 1.88% | |
Allowance for loan losses to period end
loans (excluding loans held-for-sale) | 2.27% | 2.74% | 2.58% | 2.46% | 2.49% | |
Allowance for loan losses to nonperforming
loans (excluding loans held-for-sale) | 88.89% | 45.47% | 61.73% | 73.64% | 71.87% | |
| | | | | | | |
| Deposits: | | | | | | |
| Noninterest-bearing deposits | $ 205,927 | $ 182,729 | $ 156,071 | $ 174,102 | $ 152,367 | |
| Interest checking | 145,257 | 152,041 | 157,796 | 211,174 | 189,143 | |
| Money market and savings | 293,381 | 259,189 | 237,204 | 294,840 | 312,206 | |
| Time deposits less than $100 | 124,132 | 132,514 | 130,898 | 191,372 | 193,005 | |
| Core deposits | 768,697 | 726,473 | 681,969 | 871,488 | 846,721 | |
| Time deposits $100 and greater | 251,271 | 265,076 | 251,089 | 298,163 | 293,041 | |
| Brokered deposits | 24,084 | 24,056 | 25,610 | 22,185 | 25,071 | |
| Deposits held-for-sale | 187,433 | 184,106 | 242,755 | -- | -- | |
| Total deposits | $ 1,231,485 | $ 1,199,711 | $ 1,201,423 | $ 1,191,836 | $ 1,164,833 | |
| | | | | | | |
| Assets Under Management | $ 2,732,757 | $ 2,592,186 | $ 2,786,220 | $ 2,673,832 | $ 2,519,458 | |
| | | | | | | |
| (1) Nonaccrual troubled debt restructurings are included in nonaccrual loans. | |
| | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | |
| ALLOWANCE FOR LOAN LOSSES |
| | | | | | |
| (Unaudited, dollars in thousands) |
| | | | | | |
| | Three Months Ended |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, |
| | 2010 | 2010 | 2010 | 2009 | 2009 |
| | | | | | |
| Allowance for loan losses at beginning of quarter | $ 26,675 | $ 25,132 | $ 26,501 | $ 27,575 | $ 25,214 |
| | | | | | |
| Charge-offs: | | | | | |
| Commercial: | | | | | |
| Commercial | (160) | (402) | (382) | (326) | (1,475) |
| Commercial real estate | (10,049) | (10,118) | (4,346) | (701) | (64) |
| Real estate construction | (3,407) | (3,101) | (322) | (3,142) | (2,679) |
| Total commercial | (13,616) | (13,621) | (5,050) | (4,169) | (4,218) |
| | | | | | |
| Consumer: | | | | | |
| Residential real estate first lien | (503) | (1,707) | (618) | (813) | (474) |
| Residential real estate second lien | (879) | (1,301) | (434) | (626) | (829) |
| Home equity lines | (664) | (237) | (699) | (677) | (344) |
| Consumer installment - indirect | (53) | (68) | (77) | (100) | (145) |
| Consumer other | (20) | (180) | (7) | (3) | (18) |
| Total consumer | (2,119) | (3,493) | (1,835) | (2,219) | (1,810) |
| | | | | | |
| Total charge-offs | (15,735) | (17,114) | (6,885) | (6,388) | (6,028) |
| | | | | | |
| Recoveries: | | | | | |
| Commercial: | | | | | |
| Commercial | 157 | 543 | 131 | 2,269 | 564 |
| Commercial real estate | -- | 17 | -- | -- | -- |
| Real estate construction | 1 | 3 | 46 | -- | -- |
| Total commercial | 158 | 563 | 177 | 2,269 | 564 |
| | | | | | |
| Consumer: | | | | | |
| Residential real estate first lien | 161 | 9 | 134 | 1 | 74 |
| Residential real estate second lien | 36 | 27 | 132 | 12 | 28 |
| Home equity lines | 11 | 11 | 78 | 4 | 15 |
| Consumer installment - indirect | 33 | 33 | 34 | 18 | 22 |
| Consumer other | 29 | 1 | 1 | 1 | 1 |
| Total consumer | 270 | 81 | 379 | 36 | 140 |
| | | | | | |
| Total recoveries | 428 | 644 | 556 | 2,305 | 704 |
| | | | | | |
| Net charge-offs | (15,307) | (16,470) | (6,329) | (4,083) | (5,324) |
| | | | | | |
| Provision for loan losses | 9,599 | 18,013 | 4,960 | 3,009 | 7,685 |
| | | | | | |
| Allowance for loan losses at end of quarter | $ 20,967 | $ 26,675 | $ 25,132 | $ 26,501 | $ 27,575 |
| | | | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | | | |
| SEGMENT OPERATIONS |
| | | | | | | | |
| (Unaudited, dollars in thousands) |
| | | | | | | | |
| | As of and for the Three Months Ended | As of and for the Nine |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, | Months Ended September 30, |
| | 2010 | 2010 | 2010 | 2009 | 2009 | 2010 | 2009 |
| Banking | | | | | | | |
| Net interest income | $ 11,231 | $ 11,191 | $ 11,742 | $ 11,873 | $ 12,213 | $ 34,164 | $ 35,675 |
| Provision for loan losses | 9,599 | 18,013 | 4,960 | 3,009 | 7,685 | 32,572 | 13,651 |
| Noninterest income | 857 | 1,800 | 647 | 2,423 | 937 | 3,304 | 2,358 |
| Noninterest expense | 16,133 | 14,747 | 13,675 | 10,591 | 9,090 | 44,555 | 27,310 |
| Earnings (loss) before income taxes | (13,644) | (19,769) | (6,246) | 696 | (3,625) | (39,659) | (2,928) |
| Income tax expense (benefit) | (4,370) | (6,311) | (3,076) | (57) | (1,028) | (13,757) | (839) |
| Net earnings (loss) | $ (9,274) | $ (13,458) | $ (3,170) | $ 753 | $ (2,597) | $ (25,902) | $ (2,089) |
| Total assets at quarter end | $ 1,650,297 | $ 1,628,706 | $ 1,645,468 | $ 1,644,083 | $ 1,608,348 | $ 1,650,297 | $ 1,608,348 |
| | | | | | | | |
| Wealth Management | | | | | | | |
| Net interest income | $ 34 | $ 41 | $ 40 | $ 40 | $ 39 | $ 115 | $ 115 |
| Noninterest income | 4,638 | 4,593 | 4,618 | 4,570 | 4,501 | 13,849 | 12,337 |
| Noninterest expense | 3,442 | 3,547 | 3,562 | 3,022 | 3,088 | 10,551 | 9,226 |
| Earnings before income taxes | 1,230 | 1,087 | 1,096 | 1,588 | 1,452 | 3,413 | 3,226 |
| Income tax expense | 438 | 385 | 388 | 575 | 586 | 1,211 | 1,213 |
| Net earnings | $ 792 | $ 702 | $ 708 | $ 1,013 | $ 866 | $ 2,202 | $ 2,013 |
| Total assets at quarter end | $ 63,933 | $ 62,518 | $ 61,316 | $ 59,618 | $ 50,174 | $ 63,933 | $ 50,174 |
| | | | | | | | |
| Insurance | | | | | | | |
| Net interest income | $ 5 | $ 5 | $ 5 | $ 6 | $ 5 | $ 15 | $ 11 |
| Noninterest income | 1,533 | 1,554 | 1,644 | 1,100 | 1,375 | 4,731 | 4,549 |
| Noninterest expense | 1,153 | 1,101 | 1,027 | 1,074 | 1,111 | 3,281 | 3,201 |
| Earnings before income taxes | 385 | 458 | 622 | 32 | 269 | 1,465 | 1,359 |
| Income tax expense | 134 | 161 | 218 | 21 | 94 | 513 | 477 |
| Net earnings | $ 251 | $ 297 | $ 404 | $ 11 | $ 175 | $ 952 | $ 882 |
| Total assets at quarter end | $ 9,063 | $ 8,714 | $ 8,053 | $ 7,962 | $ 7,390 | $ 9,063 | $ 7,390 |
| | | | | | | | |
| Other | | | | | | | |
| Net interest expense | $ (301) | $ (298) | $ (297) | $ (298) | $ (302) | $ (896) | $ (927) |
| Loss before income taxes | (301) | (298) | (297) | (298) | (302) | (896) | (927) |
| Income tax benefit | (106) | (104) | (104) | (104) | (105) | (314) | (324) |
| Net loss | $ (195) | $ (194) | $ (193) | $ (194) | $ (197) | $ (582) | $ (603) |
| Total assets at quarter end | $ (72,631) | $ (74,323) | $ (76,921) | $ (76,308) | $ (65,192) | $ (72,631) | $ (65,192) |
| | | | | | | | |
| Consolidated | | | | | | | |
| Net interest income | $ 10,969 | $ 10,939 | $ 11,490 | $ 11,621 | $ 11,955 | $ 33,398 | $ 34,874 |
| Provision for loan losses | 9,599 | 18,013 | 4,960 | 3,009 | 7,685 | 32,572 | 13,651 |
| Noninterest income | 7,028 | 7,947 | 6,909 | 8,093 | 6,813 | 21,884 | 19,244 |
| Noninterest expense | 20,728 | 19,395 | 18,264 | 14,687 | 13,289 | 58,387 | 39,737 |
| Earnings (loss) before income taxes | (12,330) | (18,522) | (4,825) | 2,018 | (2,206) | (35,677) | 730 |
| Income tax expense (benefit) | (3,904) | (5,869) | (2,574) | 435 | (453) | (12,347) | 527 |
| Net earnings (loss) | $ (8,426) | $ (12,653) | $ (2,251) | $ 1,583 | $ (1,753) | $ (23,330) | $ 203 |
| Total assets at quarter end | $ 1,650,662 | $ 1,625,615 | $ 1,637,916 | $ 1,635,355 | $ 1,600,720 | $ 1,650,662 | $ 1,600,720 |
| | | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | | |
| TAXABLE-EQUIVALENT (TE) YIELD ANALYSIS (1) |
| | | | | | | |
| (Unaudited, dollars in thousands) |
| | | | | | | |
| | Three Months Ended September 30, |
| | 2010 | 2009 |
| | Average | Interest | Average | Average | Interest | Average |
| | Outstanding | Income/ | Yield/ | Outstanding | Income/ | Yield/ |
| | Balance | Expense | Rate | Balance | Expense | Rate |
| Assets: | | | | | | |
| Interest-earning assets: | | | | | | |
| Loans - TE yield | $ 983,011 | $ 14,254 | 5.75% | $ 1,123,482 | $ 17,114 | 6.04% |
| Loans held-for-sale | 73,646 | 1,212 | 6.53% | 1,716 | 34 | 7.86% |
| Total loans - TE yield | 1,056,657 | 15,466 | 5.81% | 1,125,198 | 17,148 | 6.05% |
| Securities - TE yield | 209,365 | 1,337 | 2.53% | 235,819 | 2,315 | 3.89% |
| Federal funds sold and other | 290,541 | 238 | 0.32% | 168,213 | 180 | 0.42% |
| Total interest-earning assets - TE yield | 1,556,563 | 17,041 | 4.34% | 1,529,230 | 19,643 | 5.10% |
| Less: Allowance for loan losses | (27,144) | | | (23,972) | | |
| Noninterest-earning assets | 128,197 | | | 109,852 | | |
| Noninterest-earning assets held-for-sale | 4,196 | | | -- | | |
| Total assets | $ 1,661,812 | | | $ 1,615,110 | | |
| | | | | | | |
| Liabilities and shareholders' equity: | | | | | | |
| Interest-bearing liabilities: | | | | | | |
| Interest checking | $ 139,820 | $ 90 | 0.26% | $ 191,553 | $ 227 | 0.47% |
| Money market and savings | 279,084 | 442 | 0.63% | 306,789 | 833 | 1.08% |
| Time deposits | 410,318 | 2,295 | 2.22% | 525,821 | 4,071 | 3.07% |
| Interest-bearing deposits held-for-sale | 171,805 | 698 | 1.61% | -- | -- | |
| Total interest-bearing deposits | 1,001,027 | 3,525 | 1.40% | 1,024,163 | 5,131 | 1.99% |
| Borrowings and repurchase agreements | 220,068 | 2,127 | 3.83% | 222,978 | 2,129 | 3.79% |
| Junior subordinated debentures | 20,619 | 301 | 5.79% | 20,619 | 302 | 5.81% |
| Total interest-bearing liabilities | 1,241,714 | 5,953 | 1.90% | 1,267,760 | 7,562 | 2.37% |
| Noninterest-bearing liabilities: | | | | | | |
| Noninterest-bearing deposits | 220,166 | | | 147,888 | | |
| Noninterest-bearing deposits held-for-sale | 14,983 | | | -- | | |
| Other liabilities | 7,132 | | | 10,792 | | |
| Other liabilities held-for-sale | 216 | | | -- | | |
| Total liabilities | 1,484,211 | | | 1,426,440 | | |
| Shareholders' equity | 177,601 | | | 188,670 | | |
| Total liabilities and shareholders' equity | $ 1,661,812 | | | $ 1,615,110 | | |
| | | | | | | |
| Net interest income - TE | | $ 11,088 | | | $ 12,081 | |
| | | | | | | |
| Net interest spread - TE | | | 2.44% | | | 2.73% |
| Net interest margin - TE | | | 2.83% | | | 3.13% |
| | | | | | | |
| (1) Non-GAAP measure. See calculation of taxable-equivalent amounts in subsequent table. |
| | | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | | |
| TAXABLE-EQUIVALENT (TE) YIELD ANALYSIS (1) |
| | | | | | | |
| (Unaudited, dollars in thousands) |
| | | | | | | |
| | Nine Months Ended September 30, |
| | 2010 | 2009 |
| | Average | Interest | Average | Average | Interest | Average |
| | Outstanding | Income/ | Yield/ | Outstanding | Income/ | Yield/ |
| | Balance | Expense | Rate | Balance | Expense | Rate |
| Assets: | | | | | | |
| Interest-earning assets: | | | | | | |
| Loans - TE yield | $ 980,257 | $ 42,811 | 5.84% | $ 1,165,897 | $ 51,949 | 5.96% |
| Loans held-for-sale | 79,957 | 3,920 | 6.55% | 1,574 | 94 | 7.98% |
| Total loans - TE yield | 1,060,214 | 46,731 | 5.89% | 1,167,471 | 52,043 | 5.96% |
| Securities - TE yield | 208,767 | 5,029 | 3.22% | 213,257 | 6,461 | 4.05% |
| Federal funds sold and other | 262,161 | 687 | 0.35% | 128,552 | 492 | 0.51% |
| Total interest-earning assets - TE yield | 1,531,142 | 52,447 | 4.58% | 1,509,280 | 58,996 | 5.23% |
| Less: Allowance for loan losses | (26,206) | | | (24,932) | | |
| Noninterest-earning assets | 125,579 | | | 110,792 | | |
| Noninterest-earning assets held-for-sale | 5,340 | | | -- | | |
| Total assets | $ 1,635,855 | | | $ 1,595,140 | | |
| | | | | | | |
| Liabilities and shareholders' equity: | | | | | | |
| Interest-bearing liabilities: | | | | | | |
| Interest checking | $ 146,185 | $ 325 | 0.30% | $ 183,676 | $ 652 | 0.47% |
| Money market and savings | 252,601 | 1,395 | 0.74% | 259,776 | 2,196 | 1.13% |
| Time deposits | 408,831 | 7,111 | 2.33% | 548,363 | 13,658 | 3.33% |
| Interest-bearing deposits held-for-sale | 197,668 | 2,571 | 1.74% | -- | -- | |
| Total interest-bearing deposits | 1,005,285 | 11,402 | 1.52% | 991,815 | 16,506 | 2.23% |
| Borrowings and repurchase agreements | 219,871 | 6,382 | 3.88% | 234,755 | 6,364 | 3.62% |
| Junior subordinated debentures | 20,619 | 896 | 5.81% | 20,619 | 927 | 6.01% |
| Total interest-bearing liabilities | 1,245,775 | 18,680 | 2.00% | 1,247,189 | 23,797 | 2.55% |
| Noninterest-bearing liabilities: | | | | | | |
| Noninterest-bearing deposits | 178,591 | | | 149,348 | | |
| Noninterest-bearing deposits held-for-sale | 16,667 | | | -- | | |
| Other liabilities | 9,612 | | | 10,810 | | |
| Other liabilities held-for-sale | 257 | | | -- | | |
| Total liabilities | 1,450,902 | | | 1,407,347 | | |
| Shareholders' equity | 184,953 | | | 187,793 | | |
| Total liabilities and shareholders' equity | $ 1,635,855 | | | $ 1,595,140 | | |
| | | | | | | |
| Net interest income - TE | | $ 33,767 | | | $ 35,199 | |
| | | | | | | |
| Net interest spread - TE | | | 2.58% | | | 2.68% |
| Net interest margin - TE | | | 2.95% | | | 3.12% |
| | | | | | | |
| (1) Non-GAAP measure. See calculation of taxable-equivalent amounts in subsequent table. |
| | | | | | |
| Encore Bancshares, Inc. and Subsidiaries |
| | | | | | |
| NON-GAAP FINANCIAL MEASURES |
| | | | | | |
| (Unaudited, amounts in thousands) |
| | | | | | |
| | Sept 30, | June 30, | March 31, | Dec 31, | Sept 30, |
| | 2010 | 2010 | 2010 | 2009 | 2009 |
| | | | | | |
| Shareholders' equity (GAAP) | $ 169,706 | $ 177,873 | $ 190,210 | $ 186,668 | $ 186,460 |
| Less: Preferred stock | 29,368 | 29,238 | 29,107 | 28,976 | 28,847 |
| Goodwill and other intangible assets, net | 40,675 | 40,833 | 40,991 | 41,150 | 33,394 |
| Tangible common equity (1) | $ 99,663 | $ 107,802 | $ 120,112 | $ 116,542 | $ 124,219 |
| | | | | | |
| Total assets (GAAP) | $ 1,650,662 | $ 1,625,615 | $ 1,637,916 | $ 1,635,355 | $ 1,600,720 |
| Less: Goodwill and other intangible assets, net | 40,675 | 40,833 | 40,991 | 41,150 | 33,394 |
| Tangible assets | $ 1,609,987 | $ 1,584,782 | $ 1,596,925 | $ 1,594,205 | $ 1,567,326 |
| | | | | | |
| Shares outstanding at end of period | 11,380 | 11,380 | 11,162 | 10,504 | 10,499 |
| | | | | | |
(1) Tangible common equity, a non-GAAP financial measure, includes total equity, less preferred equity,
goodwill and other intangible assets. Management reviews tangible common equity along with other
measures of capital as part of its financial analyses and has included this information because of current
interest on the part of market participants in tangible common equity as a measure of capital. The
methodology of determining tangible common equity may differ among companies. |
| | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2010 | 2009 | | 2010 | 2009 |
| Net interest income (GAAP) | $ 10,969 | $ 11,955 | | $ 33,398 | $ 34,874 |
| Taxable-equivalent adjustment (1) | 119 | 126 | | 369 | 325 |
| Net interest income on a taxable-equivalent basis | $ 11,088 | $ 12,081 | | $ 33,767 | $ 35,199 |
| | | | | | |
(1) Net interest income, net interest spread and net interest margin are reported on a
taxable-equivalent basis. The taxable-equivalent adjustment to net interest income recognizes
the income tax savings when comparing taxable and tax-exempt assets. Management believes
that it is a standard practice in the banking industry to present net interest income, net interest
spread and net interest margin on a fully taxable-equivalent basis. Management believes these
measures provide useful information to investors by allowing them to make peer comparisons. |
CONTACT: Encore Bancshares, Inc.
L. Anderson Creel, Chief Financial Officer
713.787.3138
James S. D'Agostino, Jr., Chairman and CEO
713.787.3103