EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Date: January 31, 2008
Contacts: | Kevin T. Bottomley | L. Mark Panella |
| President and CEO | Chief Financial Officer |
|
|
|
Phone: | (978) 739-0263 | (978) 739-0217 |
Email: | kevin.bottomley@danversbank.com | mark.panella@danversbank.com |
Danvers Bancorp, Inc. Reports Results for the Year Ended December 31, 2007
DANVERS, MASSACHUSETTS (January 31, 2008): Danvers Bancorp, Inc. (the “Company”) (NASDAQ: DNBK), the holding company for Danversbank (the “Bank”), today reported net income of $1.1 million for the quarter ended December 31, 2007, which represents an increase of $283,000, or 32.7% from net income of $866,000 in the fourth quarter of 2006. For 2007, the Company reported net income of $4.4 million, an increase of $117,000, or 2.8% compared to 2006. The increase in net income in both periods is primarily a result of increases in both net interest and non-interest income.
On January 9, 2008 Danvers Bancorp, Inc. completed its conversion from a mutual holding company to a stock holding company through an offering of shares to the Company’s depositors. The offering, which was oversubscribed, closed at the adjusted maximum of the offering range. Danvers Bancorp, Inc. issued 17,192,500 shares of common stock to subscribers in the offering at an offering price of $10.00 per share.
Commenting on the Company’s mutual to stock conversion, Chairman, President and Chief Executive Officer Kevin T. Bottomley stated, “We are pleased with the reception afforded our subscription offering especially given the difficulties in the financial markets during the same time period. As a result of the transaction, we have the requisite capital resources to continue the expansion of our franchise in the highly competitive Eastern Massachusetts market and to diversify the sources of our revenue.”
2007 Earnings Summary
The Company’s net interest income reflected an increase of $663,000, or 7.1%, during the fourth quarter of 2007 compared with the same period in 2006. The Company’s net interest margin (“NIM”) was 3.09% for the quarter ended December 31, 2007, a 4 basis point increase when compared to the third quarter of 2007, and a 3 basis point increase when compared to the fourth quarter of 2006. For 2007, net interest income increased by $614,000, or 1.7%, compared to 2006. The Company’s NIM was 3.08% for the year ended December 31, 2007. This represents a decrease of 2 basis points from the same period in 2006.
Non-interest income for the fourth quarter of 2007 totaled $1.8 million, an increase of $543,000, or 42.6%, compared to the fourth quarter of 2006. The majority of the increase resulted from higher levels of cash surrender value income from the Company’s bank-owned life insurance holdings and gains on the sale of securities. In addition, service charges on deposit accounts increased by $90,000, or 15.4%. The Company continues to expand the depth and breadth of its deposit account services and related fees, especially as it pertains to our commercial account services. For the year ended December 31, 2007, non-interest income reflected an increase of $768,000, or 15.3% compared with the same time period in 2006 due to the same factors that contributed to the Company’s fourth quarter results as noted above.
“The stability in our net interest margin was a welcome development during 2007, though it remains narrow by historical standards,” Mr. Bottomley noted, “and equally welcome was the improvement, on a relative basis, in our non-interest income.”
Operating expenses increased by $881,000, or 9.5%, for the fourth quarter of 2007 as compared to the same period of 2006, and by $1.4 million, or 3.9% for the full year. Expenses increased primarily in the salaries and benefit area which increased $995,000 or 18.5% in the fourth quarter and by $1.2 million, or 5.6% for the full year when compared to the respective 2006 periods. The increased salary and benefits expense is primarily related to the opening of the Company’s Saugus branch during the second quarter and the addition of an asset-based lending group during the fourth quarter. The annualized cost of the Saugus branch and scheduled relocation of several branches in 2008 will continue to increase the Company’s overall premises expense. The Company’s efficiency ratio in 2007 increased slightly to 85.82% from 85.31% for 2006 primarily as a result of the increased personnel and occupancy expenses noted above.
Balance Sheet Summary
The Company’s total assets increased by $185.7 million, or 14.7%, from $1,262.6 million at December 31, 2006 to $1,448.3 million at December 31, 2007. Net loans increased by $28.3 million, or 3.2% during 2007 and securities increased $133.6 million during the same time period. Deposit balances increased by $44.9 million in 2007 as a result of expanded marketing efforts and new product initiatives.
Overall loan demand was lower than anticipated during 2007, but the Company did experience an increase in loan production during the fourth quarter. For the year, a decrease in the Bank’s construction loan portfolio of $28.4 million was largely offset by increases in commercial and industrial (C&I) loans, commercial real estate loans and residential real estate loans of $35.6 million, $14.8 million and $8.5 million, respectively. The Company continues to reduce its construction loan portfolio without replacement amidst concerns about the inventory of single-family residential properties and residential condominiums in our primary lending markets.
In light of the deterioration seen in many facets of the credit markets, the Company’s asset quality metrics remained strong at December 31, 2007, with non-performing assets as a percentage of total assets of 55 basis points, up from 31 basis points at September 30, 2007. Non-performing assets totaled $7.9 million at December 31, 2007. The Bank foreclosed on a construction loan associated with a residential subdivision in August of 2007. At the time of the foreclosure, the amount of the loan was $3.6 million and a charge to the allowance of $1.4 million was recorded. This charge-off had been identified as a specific reserve prior to June 2007. The other major component of the Company’s non-performing assets is a $2.6 million construction lending relationship involving multiple properties. The allowance for loan losses increased by $225,000, or 2.5%, during the fourth quarter of 2007 but decreased by $1.3 million, or 12.6%, for the full year as compared to December 31, 2006 as a result of the $1.4 million charge. The allowance for loan losses to total loans was 1.00% at December 31, 2007, compared to 1.18% at December 31, 2006.
“Until recently, our non-performing assets had been tracking at extremely low levels and at the lower end of our historic basis point range,” Bottomley said. “During the fourth quarter of 2007, our non-performing assets increased to 55 basis points. Most of the rise was construction-related due to softening in our primary markets. Overall, our credit quality this quarter is a reflection of the current environment. Our primary markets have been affected by a slow down in housing and construction and we continue to see a slow return of inventory to historical levels in the Boston and more specifically the Essex County region. New construction lending activity in our area has slowed significantly. Because we cannot predict the length of this current cycle, it is uncertain when we might return to our historical lows relative to non-performing assets. Even with the recent rise in non-performers, our credit quality ratios remain at manageable levels and we have an experienced team in place to address these issues.”
2
Deposits increased by $44.9 million, or 4.7%, to $998.1million, due to new deposit balances, which resulted from the Company’s Rewards Checking (a retail checking product), Snap Deposit (our commercial remote deposit capture initiative) and indexed Money Market product introductions. Stock subscriptions of $162.9 million represent funds being held pending closing of the Company’s recent stock offering. Advances from the Federal Home Loan Bank of Boston (FHLBB) decreased by $22.9 million, or 13.6% at December 31, 2007 compared to December 31, 2006. With the inflow of deposits, the Company’s funding and liquidity goals in 2007 were more than adequately accomplished and as such management chose to retire any FHLBB advances that were scheduled to mature or were called.
Company Profile
Danvers Bancorp, Inc. is the holding company for Danversbank, a Massachusetts-chartered savings bank headquartered in Danvers, Massachusetts. Originally founded in 1850 as a Massachusetts-chartered mutual savings bank, we have grown to $1.4 billion in assets through acquisitions and internal growth, including de novo branching. We conduct business from our main office located at One Conant Street, Danvers, Massachusetts, and our 14 branch offices located in Andover, Beverly, Boston, Chelsea, Danvers, Malden, Middleton, Peabody, Reading, Revere, Salem, Saugus, Wilmington, and Woburn, Massachusetts. Our business consists primarily of making loans to our customers, including commercial and industrial loans, commercial real estate loans, owner-occupied residential mortgages and consumer loans, and investing in a variety of investment securities. We fund these lending and investment activities with deposits from our customers; funds generated from operations and selected borrowings. We also provide non-deposit investment products and services, cash management, debit and credit card products and online banking services. Additional information about the Company and its subsidiaries is available at www.danversbank.com.
Forward Looking Statements
Certain statements herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. As a result, actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,’ and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes and the risk factors described in the Company’s November 13, 2007 prospectus that adversely affect the business in which Danvers Bancorp is engaged and changes in the securities market. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release and the associated conference call. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise.
3
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| December 31, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
| (In thousands) |
| ||||
ASSETS |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 65,862 |
| $ | 45,120 |
|
Securities available for sale |
| 406,715 |
| 273,083 |
| ||
Loans held for sale |
| — |
| 751 |
| ||
Loans |
| 908,497 |
| 881,526 |
| ||
Less allowance for loan losses |
| (9,096 | ) | (10,412 | ) | ||
Loans, net |
| 899,401 |
| 871,114 |
| ||
Federal Home Loan Bank stock, at cost |
| 10,021 |
| 10,742 |
| ||
Premises and equipment, net |
| 19,706 |
| 17,973 |
| ||
Bank-owned life insurance |
| 23,665 |
| 22,694 |
| ||
Other real estate owned |
| 3,513 |
| — |
| ||
Accrued interest receivable |
| 6,862 |
| 6,627 |
| ||
Deferred tax asset, net |
| 5,908 |
| 8,274 |
| ||
Other assets |
| 6,650 |
| 6,219 |
| ||
|
| $ | 1,448,303 |
| $ | 1,262,597 |
|
|
|
|
|
|
| ||
LIABILITIES AND RETAINED EARNINGS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Deposits: |
|
|
|
|
| ||
Demand deposits |
| $ | 124,040 |
| $ | 116,292 |
|
Savings and NOW accounts |
| 171,353 |
| 155,998 |
| ||
Money market accounts |
| 337,847 |
| 301,922 |
| ||
Term certificates over $100,000 |
| 228,793 |
| 248,172 |
| ||
Other term certificates |
| 136,115 |
| 130,836 |
| ||
Total deposits |
| 998,148 |
| 953,220 |
| ||
Stock subscriptions |
| 162,859 |
| — |
| ||
Short-term borrowings |
| 23,800 |
| 30,934 |
| ||
Long-term debt |
| 145,042 |
| 167,899 |
| ||
Subordinated debt |
| 29,965 |
| 29,965 |
| ||
Accrued expenses and other liabilities |
| 14,993 |
| 15,500 |
| ||
Total liabilities |
| 1,374,807 |
| 1,197,518 |
| ||
Retained earnings |
| 71,213 |
| 66,859 |
| ||
Accumulated other comprehensive income (loss) |
| 2,283 |
| (1,780 | ) | ||
Total retained earnings |
| 73,496 |
| 65,079 |
| ||
|
| $ | 1,448,303 |
| $ | 1,262,597 |
|
4
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| Three Months Ended |
| Years Ended |
| ||||||||
|
| December 31, |
| December 31, |
| ||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
|
| (In thousands) |
| ||||||||||
Interest and dividend income: |
|
|
|
|
|
|
|
|
| ||||
Interest and fees on loans |
| $ | 16,128 |
| $ | 16,649 |
| $ | 63,946 |
| $ | 62,736 |
|
Interest on debt securities: |
|
|
|
|
|
|
|
|
| ||||
Taxable |
| 4,502 |
| 2,715 |
| 14,532 |
| 9,344 |
| ||||
Non-taxable |
| 188 |
| 49 |
| 588 |
| 121 |
| ||||
Dividends on equity securities |
| 220 |
| 242 |
| 752 |
| 697 |
| ||||
Interest on cash equivalents |
| 129 |
| 159 |
| 506 |
| 828 |
| ||||
Total interest and dividend income |
| 21,167 |
| 19,814 |
| 80,324 |
| 73,726 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
Interest on deposits: |
|
|
|
|
|
|
|
|
| ||||
Savings and NOW accounts |
| 559 |
| 260 |
| 1,616 |
| 872 |
| ||||
Money market accounts |
| 3,512 |
| 2,824 |
| 13,764 |
| 9,795 |
| ||||
Term certificates |
| 4,369 |
| 4,535 |
| 17,140 |
| 15,630 |
| ||||
Interest on short-term borrowings |
| 478 |
| 277 |
| 1,141 |
| 1,439 |
| ||||
Interest on long-term debt and subordinated debt |
| 2,310 |
| 2,642 |
| 9,507 |
| 9,448 |
| ||||
Total interest expense |
| 11,228 |
| 10,538 |
| 43,168 |
| 37,184 |
| ||||
Net interest income |
| 9,939 |
| 9,276 |
| 37,156 |
| 36,542 |
| ||||
Provision for loan losses |
| 350 |
| 325 |
| 800 |
| 1,000 |
| ||||
Net interest income, after provision for loan losses |
| 9,589 |
| 8,951 |
| 36,356 |
| 35,542 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Non-interest income: |
|
|
|
|
|
|
|
|
| ||||
Service charges on deposits |
| 676 |
| 586 |
| 2,583 |
| 2,314 |
| ||||
Loan servicing fees |
| 62 |
| 75 |
| 259 |
| 264 |
| ||||
Gain on sales of loans |
| 35 |
| 35 |
| 221 |
| 331 |
| ||||
Net gain on sales of securities |
| 381 |
| 47 |
| 365 |
| 47 |
| ||||
Change in fair value of derivative financial instruments |
| — |
| — |
| — |
| 225 |
| ||||
Loss on limited partnership investments |
| (81 | ) | (46 | ) | (81 | ) | (44 | ) | ||||
Net increase in cash surrender value of bank-owned life insurance |
| 337 |
| 183 |
| 971 |
| 742 |
| ||||
Other operating income |
| 407 |
| 394 |
| 1,462 |
| 1,133 |
| ||||
Total non-interest income |
| 1,817 |
| 1,274 |
| 5,780 |
| 5,012 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Non-interest expenses: |
|
|
|
|
|
|
|
|
| ||||
Salaries and employee benefits |
| 6,363 |
| 5,368 |
| 22,335 |
| 21,159 |
| ||||
Occupancy |
| 1,197 |
| 1,135 |
| 4,504 |
| 4,432 |
| ||||
Equipment |
| 726 |
| 618 |
| 2,817 |
| 2,500 |
| ||||
Other operating expense |
| 1,891 |
| 2,175 |
| 7,311 |
| 7,492 |
| ||||
Total non-interest expenses |
| 10,177 |
| 9,296 |
| 36,967 |
| 35,583 |
| ||||
Income before provision for income taxes |
| 1,229 |
| 929 |
| 5,169 |
| 4,971 |
| ||||
Provision for income taxes |
| 80 |
| 63 |
| 815 |
| 734 |
| ||||
Net income |
| $ | 1,149 |
| $ | 866 |
| $ | 4,354 |
| $ | 4,237 |
|
5
(Unaudited)
|
| Years Ended December 31, |
| ||||||||||||||
|
| 2007 |
| 2006 |
| ||||||||||||
|
|
|
| Interest |
| Average |
|
|
| Interest |
| Average |
| ||||
|
| Average |
| Earned/ |
| Yield/ |
| Average |
| Earned/ |
| Yield/ |
| ||||
|
| Balance |
| Paid |
| Rate |
| Balance |
| Paid |
| Rate |
| ||||
|
| (Dollars in thousands) |
| ||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest-earning cash equivalents |
| $ | 10,072 |
| $ | 506 |
| 5.02 | % | $ | 17,502 |
| $ | 828 |
| 4.73 | % |
Debt securities: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Government |
| 2,341 |
| 109 |
| 4.66 |
| 2,604 |
| 102 |
| 3.92 |
| ||||
Gov’t Sponsored Enterprises |
| 201,700 |
| 9,203 |
| 4.56 |
| 242,093 |
| 7,987 |
| 3.30 |
| ||||
Mortgage-backed |
| 97,324 |
| 5,200 |
| 5.34 |
| 27,484 |
| 1,236 |
| 4.50 |
| ||||
Municipal bonds |
| 14,584 |
| 588 |
| 4.03 |
| 3,234 |
| 121 |
| 3.74 |
| ||||
Other |
| 359 |
| 20 |
| 5.57 |
| 361 |
| 19 |
| 5.26 |
| ||||
Equity securities |
| 10,536 |
| 752 |
| 7.14 |
| 11,058 |
| 697 |
| 6.30 |
| ||||
Real estate mortgages (2) |
| 553,920 |
| 39,299 |
| 7.09 |
| 576,649 |
| 40,679 |
| 7.05 |
| ||||
C&I loans (2) |
| 263,667 |
| 21,750 |
| 8.25 |
| 254,634 |
| 19,821 |
| 7.78 |
| ||||
IRB’s (2) |
| 43,106 |
| 2,117 |
| 4.91 |
| 32,514 |
| 1,541 |
| 4.74 |
| ||||
Consumer loans (2) |
| 9,876 |
| 780 |
| 7.90 |
| 9,353 |
| 695 |
| 7.43 |
| ||||
Total interest-earning assets |
| 1,207,485 |
| 80,324 |
| 6.65 |
| 1,177,486 |
| 73,726 |
| 6.26 |
| ||||
Allowance for loan losses |
| (9,840 | ) |
|
|
|
| (10,320 | ) |
|
|
|
| ||||
Total earning assets less allowance for loan losses |
| 1,197,645 |
|
|
|
|
| 1,167,166 |
|
|
|
|
| ||||
Non-interest-earning assets |
| 80,898 |
|
|
|
|
| 73,663 |
|
|
|
|
| ||||
Total assets |
| $ | 1,278,543 |
|
|
|
|
| $ | 1,240,829 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Savings and NOW accounts |
| $ | 165,386 |
| 1,616 |
| 0.98 |
| $ | 174,372 |
| 872 |
| 0.50 |
| ||
Money market accounts |
| 335,448 |
| 13,764 |
| 4.10 |
| 279,208 |
| 9,795 |
| 3.51 |
| ||||
Term certificates (3) |
| 352,319 |
| 17,140 |
| 4.86 |
| 363,853 |
| 15,630 |
| 4.30 |
| ||||
Total deposits |
| 853,153 |
| 32,520 |
| 3.81 |
| 817,433 |
| 26,297 |
| 3.22 |
| ||||
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Short-term borrowings |
| 43,655 |
| 1,141 |
| 2.61 |
| 53,875 |
| 1,439 |
| 2.67 |
| ||||
Long-term debt |
| 148,265 |
| 6,914 |
| 4.66 |
| 158,634 |
| 7,151 |
| 4.51 |
| ||||
Subordinated debt |
| 29,965 |
| 2,593 |
| 8.65 |
| 26,251 |
| 2,297 |
| 8.75 |
| ||||
Total Interest-bearing liabilities |
| 1,075,038 |
| 43,168 |
| 4.02 |
| 1,056,193 |
| 37,184 |
| 3.52 |
| ||||
Non-interest-bearing deposits |
| 126,965 |
|
|
|
|
| 113,925 |
|
|
|
|
| ||||
Other non-interest bearing liabilities |
| 9,543 |
|
|
|
|
| 9,267 |
|
|
|
|
| ||||
Total non-interest-bearing liabilities |
| 136,508 |
|
|
|
|
| 123,192 |
|
|
|
|
| ||||
Total liabilities |
| 1,211,546 |
|
|
|
|
| 1,179,385 |
|
|
|
|
| ||||
Retained earnings |
| 66,997 |
|
|
|
|
| 61,444 |
|
|
|
|
| ||||
Total liabilities and retained earnings |
| $ | 1,278,543 |
|
|
|
|
| $ | 1,240,829 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest income |
|
|
| $ | 37,156 |
|
|
|
|
| $ | 36,542 |
|
|
| ||
Net interest rate spread (4) |
|
|
|
|
| 2.63 | % |
|
|
|
| 2.74 | % | ||||
Net interest-earning assets (5) |
| $ | 132,447 |
|
|
|
|
| $ | 121,293 |
|
|
|
|
| ||
Net interest margin (6) |
|
|
|
|
| 3.08 | % |
|
|
|
| 3.10 | % | ||||
Ratio of interest-earning assets to total interest-bearing liabilities |
| 1.12 | x |
|
|
|
| 1.11 | x |
|
|
|
| ||||
(1) | Average balances are presented at average amortized cost. |
(2) | Average loans include non-accrual loans and are net of average deferred loan fees/costs. |
(3) | Term certificates include brokered and non-brokered CDs. |
(4) | Net interest rate spread represents the difference between the yield on interest earning assets and the cost of interest-bearing liabilities at the period indicated. |
(5) | Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. |
(6) | Net interest margin represents net interest income divided by average total interest-earning assets. |
6
(Unaudited)
|
| Three Months Ended |
| ||||||||||||||
|
| December 31, 2007 |
| September 30, 2007 |
| ||||||||||||
|
|
|
| Interest |
| Average |
|
|
| Interest |
| Average |
| ||||
|
| Average |
| Earned/ |
| Yield/ |
| Average |
| Earned/ |
| Yield/ |
| ||||
|
| Balance |
| Paid |
| Rate (1) |
| Balance |
| Paid |
| Rate (1) |
| ||||
|
| (Dollars in thousands) |
| ||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest-earning cash equivalents |
| $ | 12,759 |
| $ | 129 |
| 4.01 | % | $ | 9,869 |
| $ | 119 |
| 4.80 | % |
Debt securities: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Government |
| 2,000 |
| 23 |
| 4.56 |
| 2,005 |
| 24 |
| 4.67 |
| ||||
Gov’t Sponsored Enterprises |
| 193,996 |
| 2,493 |
| 5.10 |
| 203,492 |
| 2,423 |
| 4.72 |
| ||||
Mortgage-backed |
| 148,108 |
| 1,981 |
| 5.31 |
| 106,548 |
| 1,431 |
| 5.33 |
| ||||
Municipal bonds |
| 18,452 |
| 188 |
| 4.04 |
| 18,246 |
| 185 |
| 4.03 |
| ||||
Other |
| 328 |
| 5 |
| 6.05 |
| 328 |
| 4 |
| 5.11 |
| ||||
Equity securities |
| 10,664 |
| 220 |
| 8.18 |
| 10,495 |
| 171 |
| 6.46 |
| ||||
Real estate mortgages (3) |
| 558,463 |
| 9,663 |
| 6.86 |
| 554,118 |
| 9,889 |
| 7.08 |
| ||||
C&I loans (3) |
| 276,532 |
| 5,699 |
| 8.18 |
| 258,510 |
| 5,434 |
| 8.34 |
| ||||
IRB’s (3) |
| 45,811 |
| 571 |
| 4.95 |
| 44,310 |
| 549 |
| 4.92 |
| ||||
Consumer loans (3) |
| 9,595 |
| 195 |
| 8.06 |
| 9,571 |
| 192 |
| 7.95 |
| ||||
Total interest-earning assets |
| 1,276,708 |
| 21,167 |
| 6.58 |
| 1,217,492 |
| 20,421 |
| 6.65 |
| ||||
Allowance for loan losses |
| (8,928 | ) |
|
|
|
| (9,680 | ) |
|
|
|
| ||||
Total earning assets less allowance for loan losses |
| 1,267,780 |
|
|
|
|
| 1,207,812 |
|
|
|
|
| ||||
Non-interest-earning assets |
| 88,144 |
|
|
|
|
| 82,350 |
|
|
|
|
| ||||
Total assets |
| $ | 1,355,924 |
|
|
|
|
| $ | 1,290,162 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Savings and NOW accounts |
| $ | 171,910 |
| 559 |
| 1.29 |
| $ | 166,948 |
| 452 |
| 1.07 |
| ||
Money market accounts |
| 353,150 |
| 3,512 |
| 3.95 |
| 349,224 |
| 3,642 |
| 4.14 |
| ||||
Term certificates (4) |
| 360,763 |
| 4,369 |
| 4.80 |
| 348,146 |
| 4,273 |
| 4.87 |
| ||||
Total deposits |
| 885,823 |
| 8,440 |
| 3.78 |
| 864,318 |
| 8,367 |
| 3.84 |
| ||||
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Short-term borrowings |
| 55,251 |
| 478 |
| 3.43 |
| 45,089 |
| 244 |
| 2.15 |
| ||||
Long-term debt |
| 146,390 |
| 1,703 |
| 4.62 |
| 149,110 |
| 1,782 |
| 4.74 |
| ||||
Subordinated debt |
| 29,965 |
| 607 |
| 8.04 |
| 29,965 |
| 662 |
| 8.76 |
| ||||
Total Interest-bearing liabilities |
| 1,117,429 |
| 11,228 |
| 3.99 |
| 1,088,482 |
| 11,055 |
| 4.03 |
| ||||
Non-interest-bearing deposits |
| 156,506 |
|
|
|
|
| 125,433 |
|
|
|
|
| ||||
Other non-interest bearing liabilities |
| 10,589 |
|
|
|
|
| 9,122 |
|
|
|
|
| ||||
Total non-interest-bearing liabilities |
| 167,095 |
|
|
|
|
| 134,555 |
|
|
|
|
| ||||
Total liabilities |
| 1,284,524 |
|
|
|
|
| 1,223,037 |
|
|
|
|
| ||||
Retained earnings |
| 71,399 |
|
|
|
|
| 67,125 |
|
|
|
|
| ||||
Total liabilities and retained earnings |
| $ | 1,355,923 |
|
|
|
|
| $ | 1,290,162 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest income |
|
|
| $ | 9,939 |
|
|
|
|
| $ | 9,366 |
|
|
| ||
Net interest rate spread (5) |
|
|
|
|
| 2.59 | % |
|
|
|
| 2.62 | % | ||||
Net interest-earning assets (6) |
| $ | 159,279 |
|
|
|
|
| $ | 129,010 |
|
|
|
|
| ||
Net interest margin (7) |
|
|
|
|
| 3.09 | % |
|
|
|
| 3.05 | % | ||||
Ratio of interest-earning assets to total interest-bearing liabilities |
| 1.14 | x |
|
|
|
| 1.12 | x |
|
|
|
| ||||
(1) Yields are annualized.
(2) Average balances are presented at average amortized cost.
(3) Average loans include non-accrual loans and are net of average deferred loan fees/costs.
(4) Term certificates include brokered and non-brokered CDs.
(5) Net interest rate spread represents the difference between the yield on interest earning assets and the cost of interest-bearing liabilities at the period indicated.
(6) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(7) Net interest margin represents net interest income divided by average total interest-earning assets.
7
(Unaudited)
|
| Three Months Ended |
| ||||||||||||||
|
| December 31, 2007 |
| December 31, 2006 |
| ||||||||||||
|
|
|
| Interest |
| Average |
|
|
| Interest |
| Average |
| ||||
|
| Average |
| Earned/ |
| Yield/ |
| Average |
| Earned/ |
| Yield/ |
| ||||
|
| Balance |
| Paid |
| Rate (1) |
| Balance |
| Paid |
| Rate (1) |
| ||||
|
| (Dollars in thousands) |
| ||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest-earning cash equivalents |
| $ | 12,759 |
| $ | 129 |
| 4.01 | % | $ | 12,966 |
| $ | 159 |
| 4.87 | % |
Debt securities: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
U.S. Government |
| 2,000 |
| 23 |
| 4.56 |
| 2,243 |
| 26 |
| 4.60 |
| ||||
Gov’t Sponsored Enterprises |
| 193,996 |
| 2,493 |
| 5.10 |
| 236,639 |
| 2,181 |
| 3.66 |
| ||||
Mortgage-backed |
| 148,108 |
| 1,981 |
| 5.31 |
| 40,844 |
| 505 |
| 4.91 |
| ||||
Municipal bonds |
| 18,452 |
| 188 |
| 4.04 |
| 5,054 |
| 49 |
| 3.85 |
| ||||
Other |
| 328 |
| 5 |
| 6.05 |
| 360 |
| 3 |
| 3.30 |
| ||||
Equity securities |
| 10,664 |
| 220 |
| 8.18 |
| 11,221 |
| 242 |
| 8.56 |
| ||||
Real estate mortgages (3) |
| 558,463 |
| 9,663 |
| 6.86 |
| 576,420 |
| 10,433 |
| 7.18 |
| ||||
C&I loans (3) |
| 276,532 |
| 5,699 |
| 8.18 |
| 269,969 |
| 5,565 |
| 8.18 |
| ||||
IRB’s (3) |
| 45,811 |
| 571 |
| 4.95 |
| 37,457 |
| 456 |
| 4.83 |
| ||||
Consumer loans (3) |
| 9,595 |
| 195 |
| 8.06 |
| 10,388 |
| 195 |
| 7.45 |
| ||||
Total interest-earning assets |
| 1,276,708 |
| 21,167 |
| 6.58 |
| 1,203,561 |
| 19,814 |
| 6.53 |
| ||||
Allowance for loan losses |
| (8,928 | ) |
|
|
|
| (10,508 | ) |
|
|
|
| ||||
Total earning assets less allowance for loan losses |
| 1,267,780 |
|
|
|
|
| 1,193,053 |
|
|
|
|
| ||||
Non-interest-earning assets |
| 88,144 |
|
|
|
|
| 76,845 |
|
|
|
|
| ||||
Total assets |
| $ | 1,355,924 |
|
|
|
|
| $ | 1,269,898 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Savings and NOW accounts |
| $ | 171,910 |
| 559 |
| 1.29 |
| $ | 161,085 |
| 260 |
| 0.64 |
| ||
Money market accounts |
| 353,150 |
| 3,512 |
| 3.95 |
| 286,591 |
| 2,824 |
| 3.91 |
| ||||
Term certificates (4) |
| 360,763 |
| 4,369 |
| 4.80 |
| 384,047 |
| 4,535 |
| 4.68 |
| ||||
Total deposits |
| 885,823 |
| 8,440 |
| 3.78 |
| 831,723 |
| 7,619 |
| 3.63 |
| ||||
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Short-term borrowings |
| 55,251 |
| 478 |
| 3.43 |
| 45,006 |
| 277 |
| 2.44 |
| ||||
Long-term debt |
| 146,390 |
| 1,703 |
| 4.62 |
| 171,735 |
| 1,989 |
| 4.59 |
| ||||
Subordinated debt |
| 29,965 |
| 607 |
| 8.04 |
| 29,965 |
| 653 |
| 8.65 |
| ||||
Total Interest-bearing liabilities |
| 1,117,429 |
| 11,228 |
| 3.99 |
| 1,078,429 |
| 10,538 |
| 3.88 |
| ||||
Non-interest-bearing deposits |
| 156,506 |
|
|
|
|
| 116,192 |
|
|
|
|
| ||||
Other non-interest bearing liabilities |
| 10,589 |
|
|
|
|
| 10,921 |
|
|
|
|
| ||||
Total non-interest-bearing liabilities |
| 167,095 |
|
|
|
|
| 127,113 |
|
|
|
|
| ||||
Total liabilities |
| 1,284,524 |
|
|
|
|
| 1,205,542 |
|
|
|
|
| ||||
Retained earnings |
| 71,399 |
|
|
|
|
| 64,356 |
|
|
|
|
| ||||
Total liabilities and retained earnings |
| $ | 1,355,923 |
|
|
|
|
| $ | 1,269,898 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net interest income |
|
|
| $ | 9,939 |
|
|
|
|
| $ | 9,276 |
|
|
| ||
Net interest rate spread (5) |
|
|
|
|
| 2.59 | % |
|
|
|
| 2.65 | % | ||||
Net interest-earning assets (6) |
| $ | 159,279 |
|
|
|
|
| $ | 125,132 |
|
|
|
|
| ||
Net interest margin (7) |
|
|
|
|
| 3.09 | % |
|
|
|
| 3.06 | % | ||||
Ratio of interest-earning assets to total interest-bearing liabilities |
| 1.14 | x |
|
|
|
| 1.12 | x |
|
|
|
| ||||
(1) Yields are annualized.
(2) Average balances are presented at average amortized cost.
(3) Average loans include non-accrual loans and are net of average deferred loan fees/costs.
(4) Term certificates include brokered and non-brokered CDs.
(5) Net interest rate spread represents the difference between the yield on interest earning assets and the cost of interest-bearing liabilities at the period indicated.
(6) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(7) Net interest margin represents net interest income divided by average total interest-earning assets.
8
(Unaudited)
|
| At or For the Years Ended |
| At or For the Three Months Ended |
| ||||||
|
| December 31, |
| December 31, |
| September 30, |
| December 31, |
| ||
|
| 2007 |
| 2006 |
| 2007 |
| 2007 |
| 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Return on assets (ratio of income to average total assets) (1) |
| 0.34 | % | 0.34 | % | 0.34 | % | 0.41 | % | 0.27 | % |
Return on equity (ratio of income to average equity) (1) |
| 6.50 | % | 6.90 | % | 6.38 | % | 7.90 | % | 5.34 | % |
Net interest rate spread (1) (2) |
| 2.63 | % | 2.74 | % | 2.59 | % | 2.62 | % | 2.65 | % |
Net interest margin (1) (3) |
| 3.08 | % | 3.10 | % | 3.09 | % | 3.05 | % | 3.06 | % |
Efficiency Ratio (4) |
| 85.82 | % | 85.31 | % | 86.31 | % | 82.90 | % | 87.80 | % |
Non-interest expenses to average total assets (1) |
| 2.89 | % | 2.87 | % | 2.98 | % | 2.76 | % | 2.90 | % |
Average interest -earning assets to interest bearing liabilities |
| 1.12 | x | 1.11 | x | 1.14 | x | 1.12 | x | 1.12 | x |
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets to total assets |
| 0.55 | % | 0.46 | % | 0.55 | % | 0.31 | % | 0.46 | % |
Non-performing loans to total loans |
| 0.48 | % | 0.65 | % | 0.48 | % | 0.15 | % | 0.65 | % |
Allowance for loan losses to non-performing loans |
| 207.34 | % | 181.02 | % | 207.34 | % | 692.51 | % | 181.02 | % |
Allowance for loan losses to total loans |
| 1.00 | % | 1.18 | % | 1.00 | % | 1.01 | % | 1.18 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
Risk-based capital (to risk-weighted assets) |
| 10.99 | % | 11.09 | % | 10.49 | % | 11.49 | % | 11.09 | % |
Tier 1 risk-based capital (to risk-weighted assets) |
| 9.57 | % | 9.19 | % | 9.57 | % | 10.01 | % | 9.19 | % |
Tier 1 leverage capital (to average assets) |
| 6.94 | % | 6.87 | % | 6.94 | % | 7.25 | % | 6.87 | % |
Retained earnings to total assets |
| 5.07 | % | 5.15 | % | 5.07 | % | 5.28 | % | 5.15 | % |
Average retained earnings to average assets |
| 5.24 | % | 4.95 | % | 5.24 | % | 5.20 | % | 4.95 | % |
(1) Ratios for the three months ended December 31, and September 30, 2007 and December 31, 2006 are annualized.
(2) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(3) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(4) The efficiency ratio represents non-interest expense for the period minus expenses related to the amortization of intangible assets divided by the sum of net interest income (before the loan loss provision) plus non-interest income.
9
