EXHIBIT 99.1
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| |  |
| | | (NASDAQ: BOCH)
Company Press Release |
Company Profile
| • | | Founded 1982 |
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| • | | Five offices — three markets |
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| • | | Redding Bank of Commerce™ |
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| • | | Roseville Bank of Commerce™ |
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| • | | Sutter Bank of Commerce™ |
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| • | | Bank of Commerce Mortgage™ |
Investor Highlights
| • | | 5% stock dividend — 1986 |
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| • | | Annual cash dividends — since 1988 |
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| • | | Two for one stock split — 1995 |
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| • | | Three for one stock split — 1998 |
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| • | | 10% stock dividend — 2000 |
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| • | | Three for one stock split — 2004 |
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| • | | Quarterly dividends — since 2005 |
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| • | | ACQB Index — America’s Community Bank Index |
Business Overview
Bank of Commerce Holdings (the “Holding Company”) is a financial holding company (“FHC”) registered under the Bank Holding Company Act of 1956, as amended, and was incorporated in California on January 21, 1982. The Company ownsRedding Bank of Commerce™, Roseville Bank of Commerce™, Sutter Bank of Commerce™andBank of Commerce Mortgage™.
Contact Information
Patrick J. Moty, President & CEO
Telephone (530) 722-3950
Linda J. Miles, CFO
Telephone (530) 722-3955
www.reddingbankofcommerce.com
For immediate release:
Bank of Commerce Holdings™ reports income of $6.1 million for 2007
REDDING, California, January 31, 2008/ PR Newswire—Bank of Commerce Holdings (NASDAQ: BOCH), a $618.3 million asset financial holding company, and parent company of Redding Bank of Commerce™, Roseville Bank of Commerce™, Sutter Bank of Commerce™ and Bank of Commerce Mortgage™ today announced income of $6.1 million for 2007.
2007 Highlights
| | • | | Assets of $618.3 million |
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| | • | | Income of $6.1 million |
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| | • | | Record loan growth of $77.3 million |
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| | • | | Core deposit growth of $32.9 million |
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| | • | | “Bank of Commerce —Bank of Choice™” reflecting a renewed commitment to making Bank of Commerce thebank of choice™for local businesses with a fresh focus on family and personal finances |
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| | • | | Treasury stock repurchase program announced |
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| | • | | Quarterly dividends of $0.08 per share |
“The strength of our core banking business continued to serve us very well through 2007. Top line revenues increased to $45.8 million in 2007 compared with $39.5 million in 2006, a 15.9% increase over the prior year. Removing a non-recurring income item of $2.3 million, top line revenues are still up 9.9% or $3.9 million over the prior year’s performance. Overall, our performance remains above average and consistent with our goal of achieving upper quartile performance compared with our peers.”
“Our loan and deposit growth trends were solid and our team continued to earn more of our customers business. We maintained our conservative risk management practices and our strong balance sheet and capital ratios. We are not immune to the evolving slowdown in the housing sector, yet we had another solid quarter despite turbulent credit markets. During the fourth quarter we strengthened our reserves by funding $3.3 million in provisions for loan losses.
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Market Data
Exchange: NASDAQ
Symbol:BOCH
Shares outstanding at 12/31/07: 8,757,445
Market Cap: $74,438,283
Recent Price : $8.50
52 week range: $7.75 — $12.50
Price/ Book (%): 157.25
SNL™ Peer Price/Book (%): 133.63
Price/Earnings (x): 13.37
SNL™ Peer Price/Earnings (x): 11.79
Dividend Yield (%): 3.99
SNL ™ Peer Dividend Yield(%): 2.30
YTD Volume traded: 924,097
Insider Ownership: 32.10%
Although two credits from our real estate development portfolio were placed into non-accrual status in the fourth quarter, no loan losses occurred during 2007. Looking ahead, we are taking appropriate steps to ensure we focus intently on actively managing our exposures and controlling costs.”
“Net income for 2007 was $6.1 million, a decrease of 7.0% or $461,000 over the prior year. Return on average assets was 1.04% and return on average equity was 13.39% in 2007 compared with 1.20% and 15.59% respectively in 2006. Diluted earnings per share for 2007 and 2006 were $0.68 and $0.74, respectively.”
“We continue to invest in our business for the long term and to introduce new products and services in our marketplace. You will notice the bank’s colorful, contemporary redesign in everything from our fresh logo mark, branch signage and account statements to our newly re-launched website.
Our new Buenaventura office located in an upscale shopping district on the Westside of Redding opened on January 14, 2008.”saidPatrick J. Moty, President and CEO of the Company.
Financial Performance
Diluted earnings per share was $0.68 compared to $0.74 in 2006, a decrease of 8.1%. Our balance sheet grew by 6.0% or $34.9 million over the prior year end. Loans, the single largest asset of the Company grew by $77.3 million or 18.9%, an all-time high for the Company. Deposit growth was up 7.8% or $34.2 million of which $32.9 million was centered incorechecking and savings deposits.
Revenue
Top line revenues increased to $45.8 million in 2007 compared to $39.5 in 2006. Removing a non-recurring income item of $2.3 million, top line revenues are still up 9.9% or $3.9 million over the prior year.
Loans
Net portfolio loans increased $77.3 million or 18.9% to $486.3 million. The increase is primarily in the commercial and industrial portfolio. Our Company concentrates its lending activities primarily within Shasta, El Dorado, Placer, Sacramento, Sutter, Yuba and Tehama counties, in California, and the location of the five full service offices of the Bank. Our Company has a diversified loan portfolio and a significant portion of its customers’ ability to repay the loans is dependent upon the professional services and investor commercial real estate sectors. Generally, the loans are secured by real estate or other assets and are expected to be repaid from cash flows of the borrower’s business or cash flows from real estate investments.
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Net Interest Income
Net interest income modestly decreased by $23,000 over the prior year, a -0.10% decrease. The average balance of total earning assets increased to $552.9 million in 2007 compared to $517.5 million in 2006, a 6.8% increase.
Yields on portfolio loans increased 4 basis points to 8.26% compared to 8.22% in 2006. Yields on all earning assets increased 18 basis points to 7.45% compared to 7.27% in 2006. Likewise, funding costs increased 39 basis points to 4.08% compared with 3.69% in 2006, reflective of the highly competitive market for deposit accounts.
Non Interest Income
Noninterest income consists of earnings on key man life insurance, payroll and benefit processing fees, processing fees for merchants who accept credit card payments for goods and services, service charge on deposit accounts, mortgage servicing fees and other service fees. During the fourth quarter 2007, key life proceeds of $2.3 million were recognized. This revenue is exempt from federal and state income tax.
For the year ended December 31, 2007, non-interest income represented 9.9% of the Company’s revenues versus 4.9% in 2006 and 7.1% in 2005. Mortgage activities continued to slow during 2007 reflective in the fee income of $50,000 compared to $71,000 in 2006, a 29.6% decrease year over year.
Non Interest Expense
Noninterest expense consists of salaries and related employee benefits, occupancy and equipment expenses, data processing fees, professional fees, directors’ fees and other operating expenses. The increase in salary and benefit expense for 2007 over 2006 is primarily due to a one time executive severance package, coupled with staff increases to support the new westside office. The increase in professional service fees is reflective of professional services utilized to redesign the Company logo, website and collateral pieces.
Credit Quality
During the fourth quarter 2007, two credits in the real estate development portfolio were placed into non-accrual status. The gross interest income that would have been recorded during the period had the loans been current in accordance with their original terms was approximately $96,000. The Company’s OREO (Other Real Estate Owned) remained at $0 during 2007, 2006 and 2005. During the fourth quarter we strengthened our reserves by funding $3.3 million in provisions for loan losses.
The Company’s allowance for loan losses was 1.66% of total loans at December 31, 2007 and 1.18% at December 31, 2006. Provisions for loan losses were $3,291,250 compared to $226,000 for the year ended 2006.
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Facilities
During the first quarter 2008, the Company has opened a new contemporary, consumer friendlyexpress officewith extended hours located at 3455 Placer Street, Redding, California 96001. (TheWestsidelocation).
Dividends
On December 19, 2007, the Company announced a $0.08 quarterly cash dividend payable to shareholders of record as of December 31, 2007 and payable on January 11, 2008.
Capital
The capital ratios of Bank of Commerce continue to be above the well-capitalized guidelines established by bank regulatory agencies.
Bank of Commerce Holdings, with administrative offices in Redding, California is a financial service holding company that owns Redding Bank of Commerce™, Roseville Bank of Commerce™, Sutter Bank of Commerce™ and Bank of Commerce Mortgage™. The Company is a federally insured California banking corporation and opened on October 22, 1982.
BOCH is a NASDAQ Global Market listed stock. Please contact your local investment advisor for purchases and sales. Investment firms making a market in BOCH stock are:
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| Howe Barnes Hoefer & Arnett/ John Cavender | | Morgan Stanley/ Rick Hill |
| 555 Market Street | | 310 Hemsted Drive, Suite 100 |
| San Francisco, CA | | Redding, CA |
| (800) 346-5544 | | (800) 733-6126 |
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| Wachovia Securities/ Ken Myers, Rick Hansen | | Raymond James Financial |
| 10466 Brunswick Road | | 1805 Hilltop Drive, Suite 106 |
| Grass Valley, CA | | Redding, CA |
| (888) 383-3112 | | (800) 926-5040 |
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This press release includes forward-looking information, which is subject to the “safe harbor” created by the Securities Act of 1933, and Securities Act of 1934. These forward-looking statements (which involve the Company’s plans, beliefs and goals, refer to estimates or use similar terms) involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors:
| | • | | Competitive pressure in the banking industry and changes in the regulatory environment. |
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| | • | | Changes in the interest rate environment and volatility of rate sensitive assets and liabilities. |
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| | • | | The health of the economy declines nationally or regionally which could reduce the demand for loans or reduce the value of real estate collateral securing most of the Company’s loans. |
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| | • | | Credit quality deteriorates which could cause an increase in the provision for loan losses. |
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| | • | | Losses in the Company’s merchant credit card processing business. |
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| | • | | Asset/Liability matching risks and liquidity risks. |
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| | • | | Changes in the securities markets. |
For additional information concerning risks and uncertainties related to the Company and its operations please refer to the Company’s Annual Report onForm 10-K for the year ended December 31, 2007 and under the heading “Risk factors that may affect results” and subsequent reports on Form 10-Q and current reports onForm 8-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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Condensed Consolidated Balance Sheets
(Unaudited)
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| ASSETS | | 2007 | | | 2006 | |
| | | | | | | | | |
| Cash and due from banks | | $ | 13,839,123 | | | $ | 14,661,386 | |
| Federal funds sold and securities purchased under agreements to resell | | | 8,395,000 | | | | 24,605,000 | |
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| Cash and cash equivalents | | | 22,234,123 | | | | 39,266,386 | |
| Securities available-for-sale (including pledged collateral of $61,329,000 at December 31, 2007 and $71,686,000 at December 31, 2006) | | | 67,906,386 | | | | 95,601,107 | |
| Securities held-to-maturity, at cost (estimated fair value of $10,632,208 at December 31 2007 and $10,792,938 at December 31 2006) | | | 10,558,765 | | | | 10,810,113 | |
| Loans, net of the allowance for loan and lease losses of $8,232,970 at December 31, 2007 and $4,904,266 at December 31, 2006 | | | 486,282,571 | | | | 408,989,228 | |
| Bank premises and equipment, net | | | 10,963,975 | | | | 8,595,044 | |
| Other assets | | | 20,381,095 | | | | 20,180,149 | |
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| TOTAL ASSETS | | $ | 618,326,915 | | | $ | 583,442,027 | |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Deposits: | | | | | | | | |
| Demand — noninterest bearing | | $ | 75,717,742 | | | $ | 84,778,916 | |
| Demand — interest bearing | | | 142,820,773 | | | | 119,437,370 | |
| Savings accounts | | | 41,376,296 | | | | 22,748,885 | |
| Certificates of deposit | | | 213,716,486 | | | | 212,442,258 | |
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| Total Deposits | | | 473,631,297 | | | | 439,407,429 | |
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| Securities sold under agreements to repurchase | | | 15,513,211 | | | | 37,116,610 | |
| Federal Home Loan Bank borrowings | | | 60,000,000 | | | | 40,000,000 | |
| Other liabilities | | | 7,553,559 | | | | 7,536,738 | |
| Junior subordinated debt payable to unconsolidated subsidiary grantor trust | | | 15,465,000 | | | | 15,465,000 | |
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| Total liabilities | | | 572,163,067 | | | | 539,525,777 | |
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| Stockholders’ equity: | | | | | | | | |
| Preferred stock, no par value; 2,000,000 shares authorized; no shares issued and outstanding in 2007 and 2006 | | | — | | | | — | |
| Common stock, no par value; 50,000,000 shares authorized; 8,757,445 shares issued and outstanding in 2007 and 8,847,042 shares issued and outstanding in 2006 | | | 9,995,517 | | | | 11,517,368 | |
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| Retained earnings | | | 36,604,902 | | | | 33,336,032 | |
| Accumulated other comprehensive (loss) income, net of tax | | | (436,571 | ) | | | (937,150 | ) |
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| Total stockholders’ equity | | | 46,163,848 | | | | 43,916,250 | |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 618,326,915 | | | $ | 583,442,027 | |
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Condensed Consolidated Statements of Income
(Unaudited)
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| | | Dec. 31, 2007 | | | Dec. 31, 2006 | | | Dec. 31, 2005 | |
| Interest income: | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 36,134,170 | | | $ | 32,394,766 | | | $ | 24,069,980 | |
| Interest on tax-exempt securities | | | 1,228,944 | | | | 786,972 | | | | 332,385 | |
| Interest on U.S. government securities | | | 3,084,672 | | | | 3,421,191 | | | | 2,910,695 | |
| Interest on federal funds sold and securities purchased under agreement to resell | | | 680,578 | | | | 871,879 | | | | 491,019 | |
| Interest on other securities | | | 89,686 | | | | 135,651 | | | | 59,909 | |
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| Total interest income | | | 41,218,050 | | | | 37,610,459 | | | | 27,863,988 | |
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| Interest expense: | | | | | | | | | | | | |
| Interest on demand deposits | | | 2,735,170 | | | | 1,504,180 | | | | 938,532 | |
| Interest on savings deposits | | | 1,215,920 | | | | 288,883 | | | | 182,994 | |
| Interest on certificates of deposit | | | 10,570,776 | | | | 8,485,799 | | | | 4,331,468 | |
| Interest on securities sold under repurchase agreements | | | 1,177,417 | | | | 1,138,242 | | | | 430,754 | |
| Interest on FHLB borrowings | | | 2,421,636 | | | | 3,079,432 | | | | 1,161,762 | |
| Interest on junior subordinated debt payable to unconsolidated subsidiary grantor trusts | | | 1,084,990 | | | | 1,078,884 | | | | 580,935 | |
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| Total interest expense | | | 19,205,909 | | | | 15,575,420 | | | | 7,626,445 | |
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| Net interest income | | | 22,012,141 | | | | 22,035,039 | | | | 20,237,543 | |
| Provision for loan and lease losses | | | 3,291,250 | | | | 225,900 | | | | 447,700 | |
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| Net interest income after provision for loan and lease losses | | | 18,720,891 | | | | 21,809,139 | | | | 19,789,843 | |
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| Noninterest income: | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 277,769 | | | | 345,737 | | | | 393,661 | |
| Payroll and benefit processing fees | | | 382,738 | | | | 385,867 | | | | 356,957 | |
| Earnings on cash surrender value — Bank owned life insurance | | | 2,731,251 | | | | 328,743 | | | | 209,322 | |
| Net (loss) gain on sale of securities available-for-sale | | | 45,670 | | | | (170,524 | ) | | | (1,537 | ) |
| Net gain on sale of loans | | | 0 | | | | 89,851 | | | | 145,594 | |
| Merchant credit card service income, net | | | 388,438 | | | | 380,066 | | | | 345,721 | |
| Mortgage brokerage fee income | | | 49,995 | | | | 71,350 | | | | 249,049 | |
| Other income | | | 658,893 | | | | 497,141 | | | | 424,973 | |
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| Total noninterest income | | | 4,534,754 | | | | 1,928,231 | | | | 2,123,740 | |
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| Noninterest expense: | | | | | | | | | | | | |
| Salaries and related benefits | | | 8,665,679 | | | | 8,020,136 | | | | 6,883,754 | |
| Occupancy and equipment expense | | | 2,372,617 | | | | 1,845,664 | | | | 1,572,458 | |
| FDIC insurance premium | | | 51,077 | | | | 47,670 | | | | 48,659 | |
| Data processing fees | | | 395,558 | | | | 216,313 | | | | 303,316 | |
| Professional service fees | | | 1,027,671 | | | | 683,602 | | | | 648,871 | |
| Payroll processing fees | | | 107,856 | | | | 103,518 | | | | 110,376 | |
| Deferred compensation expense | | | 411,191 | | | | 368,809 | | | | 321,321 | |
| Stationery and supplies | | | 256,799 | | | | 230,843 | | | | 241,144 | |
| Postage | | | 137,740 | | | | 112,740 | | | | 104,439 | |
| Directors’ expenses | | | 311,777 | | | | 243,428 | | | | 219,687 | |
| Other expenses | | | 2,005,729 | | | | 1,460,008 | | | | 1,294,684 | |
| | | | | | | | | | |
| Total noninterest expense | | | 15,743,694 | | | | 13,332,731 | | | | 11,748,709 | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
| Income before provision for income taxes | | | 9,011,951 | | | | 10,404,639 | | | | 10,164,874 | |
| Provision for income taxes | | | 1,405,053 | | | | 3,836,930 | | | | 3,886,504 | |
| | | | | | | | | | |
| Net Income | | $ | 6,106,898 | | | $ | 6,567,709 | | | $ | 6,278,370 | |
| | | | | | | | | | |
| Basic earnings per share | | $ | 0.69 | | | $ | 0.75 | | | $ | 0.73 | |
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| | | | | | | | | | | | | |
| | | Dec. 31, 2007 | | | Dec. 31, 2006 | | | Dec. 31, 2005 | |
| Weighted average shares — basic | | | 8,857,627 | | | | 8,759,568 | | | | 8,600,270 | |
| Diluted earnings per share | | $ | 0.68 | | | $ | 0.74 | | | $ | 0.71 | |
| | | | | | | | | | |
| Weighted average shares — diluted | | | 8,937,736 | | | | 8,931,584 | | | | 8,844,626 | |
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Quarterly Financial Condition Data
(Unaudited)
For the Quarter Ended
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| | | Dec. 31, 2007 | | | Sept 30, 2007 | | | June 30, 2007 | | | March 31, 2007 | | | Dec. 31, 2006 | | | Sept 30, 2006 | | | June 30, 2006 | |
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Cash and due from banks | | $ | 13,839 | | | $ | 12,366 | | | $ | 18,206 | | | $ | 12,597 | | | $ | 14,661 | | | $ | 17,535 | | | $ | 12,668 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal funds sold and securities purchased under agreements to resell | | | 8,395 | | | | 7,980 | | | | 14,115 | | | | 21,195 | | | | 24,605 | | | | 28,010 | | | | 14,155 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Cash & Equivalents | | | 22,234 | | | | 20,346 | | | | 32,321 | | | | 33,792 | | | | 39,266 | | | | 45,545 | | | | 26,823 | |
| Securities available-for-sale | | | 67,906 | | | | 93,423 | | | | 94,029 | | | | 92,769 | | | | 95,601 | | | | 97,614 | | | | 97,366 | |
| Securities held to maturity, at cost | | | 10,559 | | | | 10,592 | | | | 10,637 | | | | 10,673 | | | | 10,810 | | | | 10,841 | | | | 11,141 | |
| Loans, net of allowance for loan losses | | | 486,283 | | | | 461,171 | | | | 437,821 | | | | 411,357 | | | | 408,990 | | | | 403,657 | | | | 401,185 | |
| Bank premises and equipment, net | | | 10,964 | | | | 10,464 | | | | 10,329 | | | | 9,992 | | | | 8,595 | | | | 7,350 | | | | 6,690 | |
| Other assets | | | 20,381 | | | | 19,979 | | | | 20,440 | | | | 19,513 | | | | 20,180 | | | | 20,211 | | | | 20,942 | |
| | | | | | | | | | | | | | | | | | | | | | |
| TOTAL ASSETS | | $ | 618,327 | | | $ | 615,975 | | | $ | 605,577 | | | $ | 578,096 | | | $ | 583,442 | | | $ | 585,218 | | | $ | 564,147 | |
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| Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand — noninterest bearing | | $ | 75,718 | | | $ | 70,809 | | | $ | 69,842 | | | $ | 70,035 | | | $ | 84,779 | | | $ | 81,125 | | | $ | 74,505 | |
| Demand — interest bearing | | | 142,821 | | | | 136,219 | | | | 114,530 | | | | 112,550 | | | | 119,437 | | | | 111,439 | | | | 101,492 | |
| Savings | | | 41,376 | | | | 44,406 | | | | 45,082 | | | | 41,537 | | | | 22,749 | | | | 22,610 | | | | 23,111 | |
| Certificates of deposit | | | 213,716 | | | | 220,803 | | | | 211,794 | | | | 211,422 | | | | 212,442 | | | | 214,019 | | | | 189,577 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total deposits | | | 473,631 | | | | 472,237 | | | | 441,248 | | | | 435,544 | | | | 439,407 | | | | 429,193 | | | | 388,685 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities sold under agreements to repurchase | | | 15,513 | | | | 26,755 | | | | 46,655 | | | | 35,053 | | | | 37,117 | | | | 35,260 | | | | 32,507 | |
| Federal Home Loan Bank borrowings | | | 60,000 | | | | 50,000 | | | | 50,000 | | | | 40,000 | | | | 40,000 | | | | 55,000 | | | | 80,000 | |
| Other liabilities | | | 7,554 | | | | 6,734 | | | | 7,114 | | | | 6,646 | | | | 7,537 | | | | 6,352 | | | | 6,536 | |
| Junior subordinated debt payable to subsidiary grantor trust | | | 15,465 | | | | 15,465 | | | | 15,465 | | | | 15,465 | | | | 15,465 | | | | 15,465 | | | | 15,465 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities | | | 572,163 | | | | 571,191 | | | | 560,482 | | | | 532,708 | | | | 539,526 | | | | 541,270 | | | | 523,193 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | 9,996 | | | | 10,252 | | | | 11,966 | | | | 11,940 | | | | 11,517 | | | | 12,416 | | | | 11,442 | |
| Retained earnings | | | 36,605 | | | | 35,617 | | | | 34,997 | | | | 34,110 | | | | 33,336 | | | | 32,526 | | | | 31,479 | |
| Accumulated other comprehensive income (loss), net | | | (437 | ) | | | (1,085 | ) | | | (1,868 | ) | | | (662 | ) | | | (937 | ) | | | (994 | ) | | | (1,967 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| Total stockholders’ equity | | | 46,164 | | | | 44,784 | | | | 45,095 | | | | 45,388 | | | | 43,916 | | | | 43,948 | | | | 40,954 | |
| | | | | | | | | | | | | | | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 618,327 | | | $ | 615,975 | | | $ | 605,577 | | | $ | 578,096 | | | $ | 583,442 | | | $ | 585,218 | | | $ | 564,147 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 5,585 | | | | 5,641 | | | | 5,461 | | | $ | 5,327 | | | $ | 5,418 | | | $ | 5,530 | | | $ | 5,674 | |
| Provision for loan losses | | | 3,170 | | | | 115 | | | | 0 | | | | 6 | | | | 0 | | | | 72 | | | | 143 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 2,415 | | | | 5,526 | | | | 5,461 | | | | 5,321 | | | | 5,418 | | | | 5,458 | | | | 5,531 | |
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest Income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges | | | 63 | | | | 70 | | | | 76 | | | | 69 | | | | 91 | | | | 81 | | | | 86 | |
| Merchant credit card service income, net | | | 91 | | | | 109 | | | | 89 | | | | 92 | | | | 100 | | | | 89 | | | | 93 | |
| Net gain (loss) on sale of securities available-for-sale | | | 0 | | | | 0 | | | | 0 | | | | 46 | | | | 0 | | | | (171 | ) | | | 0 | |
| Mortgage brokerage fee income | | | (6 | ) | | | 21 | | | | 29 | | | | 6 | | | | (13 | ) | | | 32 | | | | 35 | |
| Other income | | | 2,745 | | | | 326 | | | | 424 | | | | 285 | | | | 363 | | | | 397 | | | | 298 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total noninterest income | | | 2,893 | | | | 526 | | | | 618 | | | | 498 | | | | 541 | | | | 428 | | | | 512 | |
Noninterest Expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and related benefits | | | 2,208 | | | | 2,402 | | | | 1,959 | | | | 2,097 | | | | 2,150 | | | | 1,996 | | | | 1,996 | |
| Net Occupancy and equipment expense | | | 737 | | | | 635 | | | | 543 | | | | 458 | | | | 496 | | | | 467 | | | | 448 | |
| Professional service fees | | | 365 | | | | 216 | | | | 252 | | | | 195 | | | | 181 | | | | 149 | | | | 150 | |
| Other expenses | | | 1,218 | | | | 775 | | | | 947 | | | | 738 | | | | 659 | | | | 687 | | | | 716 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total noninterest expense | | | 4,528 | | | | 4,028 | | | | 3,701 | | | | 3,488 | | | | 3,486 | | | | 3,299 | | | | 3,310 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 780 | | | | 2,024 | | | | 2,378 | | | | 2,331 | | | | 2,473 | | | | 2,587 | | | | 2,733 | |
| Provision for income taxes | | | (910 | ) | | | 693 | | | | 778 | | | | 844 | | | | 858 | | | | 915 | | | | 1,044 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net Income | | $ | 1,690 | | | $ | 1,331 | | | $ | 1600 | | | $ | 1,487 | | | $ | 1,615 | | | $ | 1,672 | | | $ | 1,689 | |
| | | | | | | | | | | | | | | | | | | | | | |
11
Average Balances, Interest Income/Expense and Yields/Rates Paid
(Unaudited, Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Average | | | | | | | Yield/ | | | Average | | | | | | | Yield/ | | | Average | | | | | | | Yield/ | |
| | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| |
Interest Earning Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio loans | | $ | 437,217 | | | $ | 36,134 | | | | 8.26 | % | | $ | 394,152 | | | $ | 32,394 | | | | 8.22 | % | | $ | 337,284 | | | $ | 24,070 | | | | 7.14 | % |
| Tax-exempt securities | | | 30,727 | | | | 1,229 | | | | 4.00 | % | | | 21,112 | | | | 787 | | | | 3.73 | % | | | 9,966 | | | | 332 | | | | 3.33 | % |
| US government securities | | | 26,782 | | | | 1,112 | | | | 4.15 | % | | | 39,576 | | | | 1,593 | | | | 4.03 | % | | | 35,779 | | | | 1,272 | | | | 3.56 | % |
| Mortgage backed securities | | | 43,122 | | | | 1,973 | | | | 4.58 | % | | | 42,476 | | | | 1,828 | | | | 4.30 | % | | | 41,181 | | | | 1,639 | | | | 3.98 | % |
| Federal funds sold | | | 13,099 | | | | 681 | | | | 5.20 | % | | | 17,124 | | | | 872 | | | | 5.09 | % | | | 15,225 | | | | 491 | | | | 3.22 | % |
| Other securities | | | 2,000 | | | | 90 | | | | 4.50 | % | | | 3,075 | | | | 136 | | | | 4.42 | % | | | 1,384 | | | | 60 | | | | 4.34 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Earning Assets | | $ | 552,947 | | | $ | 41,219 | | | | 7.45 | % | | $ | 517,515 | | | $ | 37,610 | | | | 7.27 | % | | $ | 440,819 | | | $ | 27,864 | | | | 6.32 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash & due from banks | | | 14,273 | | | | | | | | | | | | 14,113 | | | | | | | | | | | | 15,208 | | | | | | | | | |
| Bank premises and fixed assets | | | 10,155 | | | | | | | | | | | | 6,878 | | | | | | | | | | | | 5,563 | | | | | | | | | |
| Other assets | | | 17,986 | | | | | | | | | | | | 11,022 | | | | | | | | | | | | 7,172 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Total Assets | | $ | 595,361 | | | | | | | | | | | $ | 549,528 | | | | | | | | | | | $ | 468,762 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing demand | | $ | 121,281 | | | $ | 2,735 | | | | 2.26 | % | | $ | 108,066 | | | $ | 1,504 | | | | 1.39 | % | | $ | 112,236 | | | $ | 939 | | | | 0.84 | % |
| Savings deposits | | | 39,565 | | | | 1,216 | | | | 3.07 | % | | | 24,633 | | | | 289 | | | | 1.17 | % | | | 26,542 | | | | 183 | | | | 0.69 | % |
| Certificates of deposit | | | 215,511 | | | | 10,571 | | | | 4.91 | % | | | 190,568 | | | | 8,486 | | | | 4.45 | % | | | 149,204 | | | | 4,331 | | | | 2.90 | % |
| Repurchase Agreements | | | 32,237 | | | | 1,177 | | | | 3.65 | % | | | 29,708 | | | | 1,138 | | | | 3.83 | % | | | 17,892 | | | | 63 | | | | 0.36 | % |
| Other borrowings | | | 62,095 | | | | 3,507 | | | | 5.65 | % | | | 69,014 | | | | 4,158 | | | | 6.02 | % | | | 34,042 | | | | 2,110 | | | | 6.20 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Interest Liabilities | | $ | 470,689 | | | $ | 19,206 | | | | 4.08 | % | | $ | 421,989 | | | | 15,575 | | | | 3.69 | % | | $ | 339,916 | | | | 7,626 | | | | 2.24 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing Demand | | | 72,545 | | | | | | | | | | | | 79,245 | | | | | | | | | | | | 80,219 | | | | | | | | | |
| Other liabilities | | | 6,502 | | | | | | | | | | | | 6,154 | | | | | | | | | | | | 4,417 | | | | | | | | | |
| Stockholders’ equity | | | 45,625 | | | | | | | | | | | | 42,140 | | | | | | | | | | | | 44,210 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Liabilities and Stockholders’ equity | | $ | 595,361 | | | | | | | | | | | $ | 549,528 | | | | | | | | | | | $ | 468,762 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Income and Net Interest Margin | | | | | | $ | 22,013 | | | | 3.98 | % | | | | | | $ | 22,035 | | | | 4.26 | % | | | | | | $ | 20,238 | | | | 4.59 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income on loans includes fee income of approximately $241,000, $429,000 and $556,000 for the years ended December 31, 2007, 2006, and 2005 respectively. The Company’s average total assets increased to $590.0 million in 2007 from $549.5 million in 2006 and $468.8 million in 2005, representing a 6.1% increase in 2007 over 2006 and a 17.2% increase in 2006 over 2005.
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