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Act of 1934
þ | Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 | |
for the fiscal year endedDECEMBER 31, 2005 or |
o | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 | |
for the transition period from to |
RHODE ISLAND | 05-0404671 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
23 BROAD STREET | ||
WESTERLY, RHODE ISLAND | 02891 | |
(Address of principal executive offices) | (Zip Code) |
(Title of class)
WASHINGTON TRUST BANCORP, INC.
For the Year Ended December 31, 2005
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Residential mortgages | Telephone banking services | |
Commercial loans | Internet banking services | |
Construction loans | Commercial and consumer demand deposits | |
Home equity lines of credit | Savings, NOW and money market deposits | |
Home equity loans | Certificates of deposit | |
Consumer installment loans | Retirement accounts | |
Merchant credit card services | Cash management services | |
Automated teller machines (ATMs) | Safe deposit boxes |
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(1) | These acquisitions have been accounted for as a purchase and, accordingly, the operations of the acquired companies are included in the Consolidated Financial Statements from their dates of acquisition. |
(2) | These acquisitions were accounted for as poolings of interests and, accordingly, all financial data was restated to reflect the combined financial condition and results of operations as if these acquisitions were in effect for all periods presented. |
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§ | In the case of one such affiliate, the aggregate amount of covered transactions of the insured depository institution and its subsidiaries cannot exceed 10% of the capital stock and surplus of the insured depository institution. | ||
§ | In the case of all affiliates, the aggregate amount of covered transactions of the insured depository institution and its subsidiaries cannot exceed 20% of the capital stock and surplus of the insured depository institution. |
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§ | The creation of an independent accounting oversight board; | |
§ | Auditor independence provisions which restrict non-audit services that accountants may provide to their audit clients; | |
§ | Additional corporate governance and responsibility measures, including the requirement that the chief executive officer and chief financial officer of a public company certify financial statements; | |
§ | The forfeiture of bonuses or other incentive-based compensation and profits from the sale of a public company’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement; | |
§ | An increase in the oversight of, and enhancement of certain requirements relating to, audit committees of public companies and how they interact with the company’s independent auditors; | |
§ | Requirements that audit committee members be independent and are barred from accepting consulting, advisory or other compensatory fees from public companies; |
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§ | Requirements that public companies disclose whether at least one member of the audit committee is a “financial expert” (as such term is defined by the SEC) and if not, why not; | |
§ | Expanded disclosure requirements for corporate insiders, including accelerated reporting of stock transactions by insiders and a prohibition on insider trading during pension blackout periods; | |
§ | A prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions, such as the Bank, on nonpreferential terms and in compliance with other bank regulatory requirements; | |
§ | Disclosure of a code of ethics and filing a Form 8-K for a change to or waiver of such code; and | |
§ | A range of enhanced penalties for fraud and other violations. |
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• | Regional credit concentration — We are exposed to real estate and economic factors in southern New England, primarily Rhode Island and, to a lesser extent, Connecticut and Massachusetts, because a significant portion of our loan portfolio is concentrated among borrowers in these markets. Further, because a substantial portion of our loan portfolio is secured by real estate in this area, including residential mortgages, most consumer loans, commercial mortgages and other commercial loans, the value of our collateral is also subject to regional real estate market conditions and other factors that might affect the value of real estate, including natural disasters. | |
• | Industry concentration — A portion of our loan portfolio consists of loans to the hospitality, tourism and recreation industries. Loans to companies in this industry may have a somewhat higher risk of loss than some other industries because these businesses are seasonal, with a substantial portion of commerce concentrated in the summer season. Accordingly, the ability of borrowers to meet their repayment terms is more dependent on economic, climate and other conditions and may be subject to a higher degree of volatility from year to year. |
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Page | ||||||
I. | Distribution of Assets, Liabilities and Stockholder Equity; | |||||
Interest Rates and Interest Differentials | 26, 27 | |||||
II. | Investment Portfolio | 34, 60-63 | ||||
III. | Loan Portfolio | 35-37, 65 | ||||
IV. | Summary of Loan Loss Experience | 38-39, 66 | ||||
V. | Deposits | 26, 70 | ||||
VI. | Return on Equity and Assets | 18 | ||||
VII. | Short-Term Borrowings | N/A |
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Years of | ||||||
Name | Title | Age | Service | |||
John C. Warren | Chairman and Chief Executive Officer of the Bancorp and the Bank | 60 | 10 | |||
John F. Treanor | President and Chief Operating Officer of the Bancorp and the Bank | 58 | 7 | |||
Galan G. Daukas | Executive Vice President of Wealth Management of the Bancorp and the Bank | 42 | — | |||
David V. Devault | Executive Vice President, Secretary, Treasurer and Chief Financial Officer of the Bancorp and the Bank | 51 | 19 | |||
Stephen M. Bessette | Executive Vice President – Retail Lending of the Bank | 58 | 9 | |||
B. Michael Rauh, Jr. | Executive Vice President – Corporate Sales, Planning & Delivery of the Bank | 46 | 14 | |||
Dennis L. Algiere | Senior Vice President – Chief Compliance Officer and Director of Community Affairs of the Bank | 45 | 11 | |||
Vernon F. Bliven | Senior Vice President – Human Resources of the Bank | 56 | 33 | |||
Elizabeth B. Eckel | Senior Vice President – Marketing of the Bank | 45 | 14 | |||
William D. Gibson | Senior Vice President – Credit Administration of the Bank | 59 | 7 | |||
Barbara J. Perino, CPA | Senior Vice President – Operations and Technology of the Bank | 44 | 17 | |||
James M. Vesey | Senior Vice President and Chief Credit Officer of the Bank | 58 | 7 |
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2005 Quarters | 1 | 2 | 3 | 4 | ||||||||||||
Stock prices: | ||||||||||||||||
High | $ | 29.99 | $ | 28.81 | $ | 30.38 | $ | 29.98 | ||||||||
Low | 27.00 | 23.94 | 26.08 | 25.77 | ||||||||||||
Cash dividend declared per share | $ | .18 | $ | .18 | $ | .18 | $ | .18 | ||||||||
2004 Quarters | 1 | 2 | 3 | 4 | ||||||||||||
Stock prices: | ||||||||||||||||
High | $ | 27.60 | $ | 27.56 | $ | 26.81 | $ | 30.50 | ||||||||
Low | 23.80 | 24.28 | 23.20 | 25.82 | ||||||||||||
Cash dividend declared per share | $ | .17 | $ | .17 | $ | .17 | $ | .17 |
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Selected Operating Data and Financial Ratios: | (Dollars in thousands, except per share amounts) |
At or for the years ended December 31, | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||
Financial Results: | ||||||||||||||||||||
Interest income | $ | 115,693 | $ | 96,853 | $ | 86,245 | $ | 87,339 | $ | 87,527 | ||||||||||
Interest expense | 55,037 | 42,412 | 37,446 | 43,057 | 48,160 | |||||||||||||||
Net interest income | 60,656 | 54,441 | 48,799 | 44,282 | 39,367 | |||||||||||||||
Provision for loan losses | 1,200 | 610 | 460 | 400 | 550 | |||||||||||||||
Net interest income after provision for loan losses | 59,456 | 53,831 | 48,339 | 43,882 | 38,817 | |||||||||||||||
Noninterest income | 30,946 | 26,905 | 26,735 | 23,258 | 21,485 | |||||||||||||||
Net interest and noninterest income | 90,402 | 80,736 | 75,074 | 67,140 | 60,302 | |||||||||||||||
Noninterest expense | 56,393 | 50,373 | 47,632 | 42,990 | 41,653 | |||||||||||||||
Income before income taxes | 34,009 | 30,363 | 27,442 | 24,150 | 18,649 | |||||||||||||||
Income tax expense | 10,985 | 9,534 | 8,519 | 7,393 | 5,541 | |||||||||||||||
Net income | $ | 23,024 | $ | 20,829 | $ | 18,923 | $ | 16,757 | $ | 13,108 | ||||||||||
Per share information ($): | ||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | 1.73 | 1.57 | 1.44 | 1.32 | 1.09 | |||||||||||||||
Diluted | 1.69 | 1.54 | 1.41 | 1.30 | 1.07 | |||||||||||||||
Cash dividends declared (1) | .72 | .68 | .62 | .56 | .52 | |||||||||||||||
Book value | 11.86 | 11.44 | 10.46 | 9.87 | 8.15 | |||||||||||||||
Market value — closing stock price | 26.18 | 29.31 | 26.20 | 19.53 | 19.00 | |||||||||||||||
Performance Ratios (%): | ||||||||||||||||||||
Return on average assets | .98 | .97 | 1.03 | 1.07 | 1.01 | |||||||||||||||
Return on average shareholders’ equity | 14.80 | 14.40 | 14.15 | 14.25 | 13.86 | |||||||||||||||
Average equity to average total assets | 6.62 | 6.73 | 7.24 | 7.50 | 7.28 | |||||||||||||||
Dividend payout ratio (2) | 42.60 | 44.16 | 43.97 | 43.08 | 48.60 | |||||||||||||||
Asset Quality Ratios (%): | ||||||||||||||||||||
Nonperforming loans to total loans | .17 | .38 | .29 | .53 | .63 | |||||||||||||||
Nonperforming assets to total assets | .10 | .21 | .14 | .24 | .28 | |||||||||||||||
Allowance for loan losses to nonaccrual loans | 742.25 | 354.49 | 580.17 | 370.78 | 355.20 | |||||||||||||||
Allowance for loan losses to total loans | 1.28 | 1.34 | 1.66 | 1.95 | 2.24 | |||||||||||||||
Net (recoveries) charge-offs to average loans | (.01 | ) | (.02 | ) | — | .05 | .02 | |||||||||||||
Capital Ratios (%): | ||||||||||||||||||||
Tier 1 leverage capital ratio | 5.45 | 5.35 | 5.65 | 5.63 | 6.84 | |||||||||||||||
Tier 1 risk-based capital ratio | 9.06 | 9.15 | 10.00 | 10.13 | 12.63 | |||||||||||||||
Total risk-based capital ratio | 10.51 | 10.72 | 11.57 | 11.55 | 14.22 |
(1) | Represents historical per share dividends declared by the Bancorp. |
(2) | Represents the ratio of historical per share dividends declared by the Bancorp to diluted earnings per share. |
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Selected Balance Sheet Data: | (Dollars in thousands) |
December 31, | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 66,163 | $ | 52,081 | $ | 61,110 | $ | 51,048 | $ | 50,899 | ||||||||||
Total securities | 783,941 | 890,058 | 839,421 | 795,833 | 629,061 | |||||||||||||||
FHLB stock | 34,966 | 34,373 | 31,464 | 24,582 | 23,491 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial and other | 554,734 | 507,711 | 408,477 | 382,169 | 260,633 | |||||||||||||||
Residential real estate | 582,708 | 513,695 | 389,855 | 280,886 | 235,359 | |||||||||||||||
Consumer | 264,466 | 228,270 | 162,649 | 132,071 | 109,653 | |||||||||||||||
Total loans | 1,401,908 | 1,249,676 | 960,981 | 795,126 | 605,645 | |||||||||||||||
Less allowance for loan losses | 17,918 | 16,771 | 15,914 | 15,487 | 13,593 | |||||||||||||||
Net loans | 1,383,990 | 1,232,905 | 945,067 | 779,639 | 592,052 | |||||||||||||||
Goodwill and other intangibles | 54,372 | 23,900 | 24,544 | 25,260 | 669 | |||||||||||||||
Other | 78,571 | 74,503 | 72,201 | 69,299 | 66,057 | |||||||||||||||
Total assets | $ | 2,402,003 | $ | 2,307,820 | $ | 1,973,807 | $ | 1,745,661 | $ | 1,362,229 | ||||||||||
Liabilities: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Demand deposits | $ | 196,102 | $ | 189,588 | $ | 194,144 | $ | 157,539 | $ | 134,783 | ||||||||||
NOW accounts | 178,677 | 174,727 | 153,344 | 120,092 | 96,288 | |||||||||||||||
Money market accounts | 223,255 | 196,775 | 83,037 | 75,446 | 77,947 | |||||||||||||||
Savings accounts | 212,499 | 251,920 | 257,497 | 275,816 | 142,718 | |||||||||||||||
Time deposits | 828,725 | 644,875 | 518,119 | 481,600 | 365,140 | |||||||||||||||
Total deposits | 1,639,258 | 1,457,885 | 1,206,141 | 1,110,493 | 816,876 | |||||||||||||||
FHLB advances | 545,323 | 672,748 | 607,104 | 480,080 | 431,490 | |||||||||||||||
Junior subordinated debentures | 22,681 | — | — | — | — | |||||||||||||||
Other borrowings | 9,774 | 3,417 | 2,311 | 9,183 | 2,087 | |||||||||||||||
Other liabilities | 26,521 | 21,918 | 20,196 | 17,184 | 13,839 | |||||||||||||||
Shareholders’ equity | 158,446 | 151,852 | 138,055 | 128,721 | 97,937 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,402,003 | $ | 2,307,820 | $ | 1,973,807 | $ | 1,745,661 | $ | 1,362,229 | ||||||||||
Asset Quality: | ||||||||||||||||||||
Nonaccrual loans | $ | 2,414 | $ | 4,731 | $ | 2,743 | $ | 4,177 | $ | 3,827 | ||||||||||
Other real estate owned, net | — | 4 | 11 | 86 | 30 | |||||||||||||||
Total nonperforming assets | $ | 2,414 | $ | 4,735 | $ | 2,754 | $ | 4,263 | $ | 3,857 | ||||||||||
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Selected Quarterly Financial Data | (Dollars in thousands, except per share amounts) |
2005 | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||
Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 17,825 | $ | 19,096 | $ | 20,418 | $ | 21,592 | $ | 78,931 | ||||||||||
Income on securities | 8,619 | 8,489 | 8,306 | 8,406 | 33,820 | |||||||||||||||
Dividends on corporate stock and FHLB stock | 619 | 625 | 594 | 653 | 2,491 | |||||||||||||||
Interest on federal funds sold and other short-term investments | 55 | 79 | 187 | 130 | 451 | |||||||||||||||
Total interest income | 27,118 | 28,289 | 29,505 | 30,781 | 115,693 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 6,932 | 7,627 | 8,241 | 9,386 | 32,186 | |||||||||||||||
FHLB advances | 5,549 | 5,670 | 5,741 | 5,273 | 22,233 | |||||||||||||||
Junior subordinated debentures | — | — | 124 | 334 | 458 | |||||||||||||||
Other | 16 | 20 | 39 | 85 | 160 | |||||||||||||||
Total interest expense | 12,497 | 13,317 | 14,145 | 15,078 | 55,037 | |||||||||||||||
Net interest income | 14,621 | 14,972 | 15,360 | 15,703 | 60,656 | |||||||||||||||
Provision for loan losses | 300 | 300 | 300 | 300 | 1,200 | |||||||||||||||
Net interest income after provision for loan losses | 14,321 | 14,672 | 15,060 | 15,403 | 59,456 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Wealth management and trust services | 3,212 | 3,486 | 4,074 | 5,649 | 16,421 | |||||||||||||||
Service charges on deposit accounts | 1,011 | 1,168 | 1,158 | 1,165 | 4,502 | |||||||||||||||
Merchant processing fees | 778 | 1,337 | 1,932 | 1,156 | 5,203 | |||||||||||||||
Net gains on loan sales | 487 | 418 | 415 | 359 | 1,679 | |||||||||||||||
Income from bank-owned life insurance | 272 | 279 | 282 | 277 | 1,110 | |||||||||||||||
Net realized gains on securities | — | 3 | 17 | 337 | 357 | |||||||||||||||
Other income | 319 | 303 | 496 | 556 | 1,674 | |||||||||||||||
Total noninterest income | 6,079 | 6,994 | 8,374 | 9,499 | 30,946 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 7,459 | 7,450 | 8,194 | 9,030 | 32,133 | |||||||||||||||
Net occupancy | 853 | 802 | 828 | 977 | 3,460 | |||||||||||||||
Equipment | 882 | 869 | 832 | 873 | 3,456 | |||||||||||||||
Merchant processing costs | 636 | 1,098 | 1,623 | 962 | 4,319 | |||||||||||||||
Advertising and promotion | 303 | 733 | 460 | 481 | 1,977 | |||||||||||||||
Legal, audit and professional fees | 392 | 520 | 513 | 475 | 1,900 | |||||||||||||||
Outsourced services | 413 | 444 | 406 | 460 | 1,723 | |||||||||||||||
Amortization of intangibles | 147 | 99 | 196 | 410 | 852 | |||||||||||||||
Other | 1,359 | 1,358 | 1,758 | 2,098 | 6,573 | |||||||||||||||
Total noninterest expense | 12,444 | 13,373 | 14,810 | 15,766 | 56,393 | |||||||||||||||
Income before income taxes | 7,956 | 8,293 | 8,624 | 9,136 | 34,009 | |||||||||||||||
Income tax expense | 2,546 | 2,654 | 2,802 | 2,983 | 10,985 | |||||||||||||||
Net income | $ | 5,410 | $ | 5,639 | $ | 5,822 | $ | 6,153 | $ | 23,024 | ||||||||||
Weighted average shares outstanding — basic | 13,282.7 | 13,296.0 | 13,330.3 | 13,352.4 | 13,315.2 | |||||||||||||||
Weighted average shares outstanding — diluted | 13,617.3 | 13,592.3 | 13,671.9 | 13,659.6 | 13,626.7 | |||||||||||||||
Per share information: | ||||||||||||||||||||
Basic earnings per share | $ | .41 | $ | .42 | $ | .44 | $ | .46 | $ | 1.73 | ||||||||||
Diluted earnings per share | $ | .40 | $ | .41 | $ | .43 | $ | .45 | $ | 1.69 | ||||||||||
Cash dividends declared per share | $ | .18 | $ | .18 | $ | .18 | $ | .18 | $ | .72 |
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Selected Quarterly Financial Data | (Dollars in thousands, except per share amounts) |
2004 | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||
Interest income: | ||||||||||||||||||||
Interest and fees on loans | $ | 13,641 | $ | 14,287 | $ | 15,762 | $ | 17,138 | $ | 60,828 | ||||||||||
Income on securities | 8,255 | 8,107 | 8,742 | 8,683 | 33,787 | |||||||||||||||
Dividends on corporate stock and FHLB stock | 474 | 506 | 562 | 563 | 2,105 | |||||||||||||||
Interest on federal funds sold and other short-term investments | 20 | 20 | 47 | 46 | 133 | |||||||||||||||
Total interest income | 22,390 | 22,920 | 25,113 | 26,430 | 96,853 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 4,747 | 5,024 | 5,936 | 6,490 | 22,197 | |||||||||||||||
FHLB advances | 4,545 | 4,789 | 5,281 | 5,538 | 20,153 | |||||||||||||||
Other | 15 | 15 | 14 | 18 | 62 | |||||||||||||||
Total interest expense | 9,307 | 9,828 | 11,231 | 12,046 | 42,412 | |||||||||||||||
Net interest income | 13,083 | 13,092 | 13,882 | 14,384 | 54,441 | |||||||||||||||
Provision for loan losses | 120 | 120 | 120 | 250 | 610 | |||||||||||||||
Net interest income after provision for loan losses | 12,963 | 12,972 | 13,762 | 14,134 | 53,831 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Wealth management and trust services | 3,055 | 3,320 | 3,218 | 3,455 | 13,048 | |||||||||||||||
Service charges on deposit accounts | 1,170 | 1,192 | 1,066 | 1,055 | 4,483 | |||||||||||||||
Merchant processing fees | 597 | 1,095 | 1,643 | 924 | 4,259 | |||||||||||||||
Net gains on loan sales | 349 | 560 | 348 | 644 | 1,901 | |||||||||||||||
Income from bank-owned life insurance | 299 | 295 | 293 | 288 | 1,175 | |||||||||||||||
Net realized (losses) gains on securities | — | (240 | ) | 101 | 387 | 248 | ||||||||||||||
Other income | 470 | 702 | 398 | 221 | 1,791 | |||||||||||||||
Total noninterest income | 5,940 | 6,924 | 7,067 | 6,974 | 26,905 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits | 6,977 | 7,218 | 7,439 | 7,182 | 28,816 | |||||||||||||||
Net occupancy | 816 | 796 | 770 | 819 | 3,201 | |||||||||||||||
Equipment | 770 | 788 | 837 | 872 | 3,267 | |||||||||||||||
Merchant processing costs | 466 | 882 | 1,398 | 788 | 3,534 | |||||||||||||||
Advertising and promotion | 466 | 538 | 429 | 315 | 1,748 | |||||||||||||||
Legal, audit and professional fees | 258 | 245 | 379 | 653 | 1,535 | |||||||||||||||
Outsourced services | 376 | 467 | 357 | 416 | 1,616 | |||||||||||||||
Amortization of intangibles | 161 | 161 | 161 | 161 | 644 | |||||||||||||||
Other | 1,390 | 1,450 | 1,284 | 1,888 | 6,012 | |||||||||||||||
Total noninterest expense | 11,680 | 12,545 | 13,054 | 13,094 | 50,373 | |||||||||||||||
Income before income taxes | 7,223 | 7,351 | 7,775 | 8,014 | 30,363 | |||||||||||||||
Income tax expense | 2,268 | 2,308 | 2,442 | 2,516 | 9,534 | |||||||||||||||
Net income | $ | 4,955 | $ | 5,043 | $ | 5,333 | $ | 5,498 | $ | 20,829 | ||||||||||
Weighted average shares outstanding — basic | 13,202.6 | 13,216.1 | 13,235.7 | 13,259.7 | 13,227.8 | |||||||||||||||
Weighted average shares outstanding — diluted | 13,513.3 | 13,517.0 | 13,514.0 | 13,605.1 | 13,542.7 | |||||||||||||||
Per share information: | ||||||||||||||||||||
Basic earnings per share | $ | .38 | $ | .38 | $ | .40 | $ | .41 | $ | 1.57 | ||||||||||
Diluted earnings per share | $ | .37 | $ | .37 | $ | .39 | $ | .40 | $ | 1.54 | ||||||||||
Cash dividends declared per share | $ | .17 | $ | .17 | $ | .17 | $ | .17 | $ | .68 |
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Years ended December 31, | 2005 | 2004 | ||||||
Earnings: | ||||||||
Net income | $ | 23,024 | $ | 20,829 | ||||
Diluted earnings per share | $ | 1.69 | $ | 1.54 | ||||
Dividends declared per common share | $ | 0.72 | $ | 0.68 | ||||
Book value per share | $ | 11.86 | $ | 11.44 | ||||
Tangible book value per common share | $ | 7.79 | $ | 9.64 | ||||
Weighted average shares – Basic | 13,315.2 | 13,227.8 | ||||||
Weighted average shares – Diluted | 13,626.7 | 13,542.7 | ||||||
Select Ratios: | ||||||||
Return on average assets | 0.98 | % | 0.97 | % | ||||
Return on average shareholders equity | 14.80 | % | 14.40 | % | ||||
Interest rate spread (taxable equivalent basis) | 2.49 | % | 2.48 | % | ||||
Net interest margin (taxable equivalent basis) | 2.79 | % | 2.74 | % |
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Years ended December 31, | 2005 | 2004 | 2003 | |||||||||||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Residential real estate loans | $ | 562,838 | $ | 27,890 | 4.96 | $ | 450,898 | $ | 22,737 | 5.04 | $ | 321,442 | $ | 18,044 | 5.61 | |||||||||||||||||||||
Commercial and other loans | 531,434 | 37,244 | 7.01 | 454,251 | 29,266 | 6.44 | 396,148 | 27,009 | 6.82 | |||||||||||||||||||||||||||
Consumer loans | 246,959 | 13,983 | 5.66 | 198,857 | 8,984 | 4.52 | 143,370 | 6,703 | 4.68 | |||||||||||||||||||||||||||
Total loans | 1,341,231 | 79,117 | 5.90 | 1,104,006 | 60,987 | 5.52 | 860,960 | 51,756 | 6.01 | |||||||||||||||||||||||||||
Federal funds sold and other short-term investments | 14,703 | 451 | 3.07 | 12,371 | 133 | 1.08 | 14,911 | 131 | 0.88 | |||||||||||||||||||||||||||
Taxable debt securities | 783,662 | 32,934 | 4.20 | 835,091 | 33,125 | 3.97 | 781,425 | 31,755 | 4.06 | |||||||||||||||||||||||||||
Nontaxable debt securities | 23,329 | 1,362 | 5.84 | 16,430 | 1,018 | 6.20 | 16,079 | 1,038 | 6.46 | |||||||||||||||||||||||||||
Corporate stocks and FHLB stock | 50,763 | 2,858 | 5.63 | 54,706 | 2,543 | 4.65 | 51,372 | 2,534 | 4.93 | |||||||||||||||||||||||||||
Total securities | 872,457 | 37,605 | 4.31 | 918,598 | 36,819 | 4.01 | 863,787 | 35,458 | 4.10 | |||||||||||||||||||||||||||
Total interest-earning assets | 2,213,688 | 116,722 | 5.27 | 2,022,604 | 97,806 | 4.84 | 1,724,747 | 87,214 | 5.06 | |||||||||||||||||||||||||||
Noninterest-earning assets | 137,460 | 126,302 | 121,192 | |||||||||||||||||||||||||||||||||
Total assets | $ | 2,351,148 | $ | 2,148,906 | $ | 1,845,939 | ||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity: | ||||||||||||||||||||||||||||||||||||
NOW accounts | $ | 176,706 | 295 | 0.17 | $ | 162,714 | 341 | 0.21 | $ | 134,432 | 322 | 0.24 | ||||||||||||||||||||||||
Money market accounts | 203,799 | 4,386 | 2.15 | 152,664 | 2,205 | 1.44 | 74,435 | 731 | 0.98 | |||||||||||||||||||||||||||
Savings accounts | 234,311 | 1,392 | 0.59 | 257,274 | 1,581 | 0.61 | 269,927 | 2,168 | 0.80 | |||||||||||||||||||||||||||
Time deposits | 741,456 | 26,113 | 3.52 | 575,877 | 18,070 | 3.14 | 485,126 | 15,333 | 3.16 | |||||||||||||||||||||||||||
FHLB advances | 611,177 | 22,233 | 3.64 | 644,520 | 20,153 | 3.13 | 556,689 | 18,819 | 3.38 | |||||||||||||||||||||||||||
Junior subordinated debentures | 7,767 | 458 | 5.90 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Other | 3,581 | 160 | 4.48 | 2,014 | 62 | 3.10 | 2,454 | 73 | 2.94 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,978,797 | 55,037 | 2.78 | 1,795,063 | 42,412 | 2.36 | 1,523,063 | 37,446 | 2.46 | |||||||||||||||||||||||||||
Demand deposits | 197,245 | 193,905 | 174,338 | |||||||||||||||||||||||||||||||||
Other liabilities | 19,498 | 15,281 | 14,813 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 155,608 | 144,657 | 133,725 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,351,148 | $ | 2,148,906 | $ | 1,845,939 | ||||||||||||||||||||||||||||||
Net interest income | $ | 61,685 | $ | 55,394 | $ | 49,768 | ||||||||||||||||||||||||||||||
Interest rate spread | 2.49 | 2.48 | 2.60 | |||||||||||||||||||||||||||||||||
Net interest margin | 2.79 | 2.74 | 2.89 | |||||||||||||||||||||||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Commercial and other loans | $ | 186 | $ | 159 | $ | 153 | ||||||
Nontaxable debt securities | 476 | 356 | 363 | |||||||||
Corporate stocks and FHLB stock | 367 | 438 | 453 |
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2005/2004 | 2004/2003 | |||||||||||||||||||||||
(Dollars in thousands) | Volume | Rate | Net Change | Volume | Rate | Net Change | ||||||||||||||||||
Interest on interest-earning assets: | ||||||||||||||||||||||||
Residential real estate loans | $ | 5,521 | $ | (368 | ) | $ | 5,153 | $ | 6,674 | $ | (1,981 | ) | $ | 4,693 | ||||||||||
Commercial and other loans | 5,246 | 2,732 | 7,978 | 3,817 | (1,560 | ) | 2,257 | |||||||||||||||||
Consumer loans | 2,447 | 2,552 | 4,999 | 2,518 | (237 | ) | 2,281 | |||||||||||||||||
Federal funds sold and other short-term investments | 30 | 288 | 318 | (25 | ) | 27 | 2 | |||||||||||||||||
Taxable debt securities | (2,078 | ) | 1,887 | (191 | ) | 2,099 | (729 | ) | 1,370 | |||||||||||||||
Nontaxable debt securities | 406 | (62 | ) | 344 | 22 | (42 | ) | (20 | ) | |||||||||||||||
Corporate stocks and FHLB stock | (193 | ) | 508 | 315 | 158 | (149 | ) | 9 | ||||||||||||||||
Total interest income | 11,379 | 7,537 | 18,916 | 15,263 | (4,671 | ) | 10,592 | |||||||||||||||||
Interest on interest-bearing liabilities: | ||||||||||||||||||||||||
NOW accounts | 26 | (72 | ) | (46 | ) | 62 | (43 | ) | 19 | |||||||||||||||
Money market accounts | 1,004 | 1,177 | 2,181 | 1,064 | 410 | 1,474 | ||||||||||||||||||
Savings accounts | (138 | ) | (51 | ) | (189 | ) | (95 | ) | (492 | ) | (587 | ) | ||||||||||||
Time deposits | 5,660 | 2,383 | 8,043 | 2,835 | (98 | ) | 2,737 | |||||||||||||||||
FHLB advances | (1,083 | ) | 3,163 | 2,080 | 2,803 | (1,469 | ) | 1,334 | ||||||||||||||||
Junior subordinated debentures | 458 | — | 458 | — | — | — | ||||||||||||||||||
Other | 62 | 36 | 98 | (14 | ) | 3 | (11 | ) | ||||||||||||||||
Total interest expense | 5,989 | 6,636 | 12,625 | 6,655 | (1,689 | ) | 4,966 | |||||||||||||||||
Net interest income | $ | 5,390 | $ | 901 | $ | 6,291 | $ | 8,608 | $ | (2,982 | ) | $ | 5,626 | |||||||||||
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(Dollars in thousands) | 2005 | 2004 | $ Change | % Change | ||||||||||||
Noninterest income: | ||||||||||||||||
Wealth management and trust services | $ | 16,421 | $ | 13,048 | 3,373 | 26 | % | |||||||||
Service charges on deposit accounts | 4,502 | 4,483 | 19 | — | % | |||||||||||
Merchant processing fees | 5,203 | 4,259 | 944 | 22 | % | |||||||||||
Net gains on loan sales | 1,679 | 1,901 | (222 | ) | (12 | )% | ||||||||||
Income from BOLI | 1,110 | 1,175 | (65 | ) | (6 | )% | ||||||||||
Other income | 1,674 | 1,791 | (117 | ) | (7 | )% | ||||||||||
Subtotal | 30,589 | 26,657 | 3,932 | 15 | % | |||||||||||
Net realized gains on securities | 357 | 248 | 109 | 44 | % | |||||||||||
Total noninterest income | $ | 30,946 | $ | 26,905 | $ | 4,041 | 15 | % | ||||||||
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(Dollars in thousands) | 2005 | 2004 | $ Change | % Change | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | $ | 32,133 | $ | 28,816 | $ | 3,317 | 12 | % | ||||||||
Net occupancy | 3,460 | 3,201 | 259 | 8 | % | |||||||||||
Equipment | 3,456 | 3,267 | 189 | 6 | % | |||||||||||
Merchant processing costs | 4,319 | 3,534 | 785 | 22 | % | |||||||||||
Advertising and promotion | 1,977 | 1,748 | 229 | 13 | % | |||||||||||
Legal, audit and professional fees | 1,900 | 1,535 | 365 | 24 | % | |||||||||||
Outsourced services | 1,723 | 1,616 | 107 | 7 | % | |||||||||||
Amortization of intangibles | 852 | 644 | 208 | 32 | % | |||||||||||
Other | 6,573 | 6,012 | 561 | 9 | % | |||||||||||
Total noninterest expense | $ | 56,393 | $ | 50,373 | $ | 6,020 | 12 | % | ||||||||
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(Dollars in thousands) | 2004 | 2003 | $ Change | % Change | ||||||||||||
Noninterest income: | ||||||||||||||||
Wealth management and trust services | $ | 13,048 | $ | 10,769 | $ | 2,279 | 21 | % | ||||||||
Service charges on deposit accounts | 4,483 | 4,920 | (437 | ) | (9 | )% | ||||||||||
Merchant processing fees | 4,259 | 3,410 | 849 | 25 | % | |||||||||||
Net gains on loan sales | 1,901 | 4,690 | (2,789 | ) | (59 | )% | ||||||||||
Income from BOLI | 1,175 | 1,161 | 14 | 1 | % | |||||||||||
Other income | 1,791 | 1,155 | 636 | 55 | % | |||||||||||
Subtotal | 26,657 | 26,105 | 552 | 2 | % | |||||||||||
Net realized gains on securities | 248 | 630 | (382 | ) | (61 | )% | ||||||||||
Total noninterest income | $ | 26,905 | $ | 26,735 | $ | 170 | 1 | % | ||||||||
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(Dollars in thousands) | 2004 | 2003 | $ Change | % Change | ||||||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | $ | 28,816 | $ | 26,945 | $ | 1,871 | 7 | % | ||||||||
Net occupancy | 3,201 | 2,979 | 222 | 7 | % | |||||||||||
Equipment | 3,267 | 3,380 | (113 | ) | (3 | )% | ||||||||||
Merchant processing costs | 3,534 | 2,716 | 818 | 30 | % | |||||||||||
Advertising and promotion | 1,748 | 1,440 | 308 | 21 | % | |||||||||||
Outsourced services | 1,616 | 1,333 | 283 | 21 | % | |||||||||||
Legal, audit and professional fees | 1,535 | 1,242 | 293 | 24 | % | |||||||||||
Amortization of intangibles | 644 | 719 | (75 | ) | (10 | )% | ||||||||||
Other | 6,012 | 5,937 | 75 | 1 | % | |||||||||||
Subtotal | 50,373 | 46,691 | 3,682 | 8 | % | |||||||||||
Debt prepayment penalties | — | 941 | (941 | ) | (100 | )% | ||||||||||
Total noninterest expense | $ | 50,373 | $ | 47,632 | $ | 2,741 | 6 | % | ||||||||
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(Dollars in thousands) | 2005 | 2004 | 2003 | |||||||||||||||||||||
December 31, | Amount | % | Amount | % | Amount | % | ||||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | $ | 107,651 | 18 | % | $ | 137,663 | 19 | % | $ | 99,094 | 15 | % | ||||||||||||
Mortgage-backed securities | 428,174 | 69 | % | 491,847 | 67 | % | 464,825 | 69 | % | |||||||||||||||
Corporate bonds | 63,195 | 10 | % | 78,834 | 10 | % | 79,938 | 12 | % | |||||||||||||||
Corporate stocks | 20,214 | 3 | % | 27,322 | 4 | % | 29,988 | 4 | % | |||||||||||||||
Total securities available for sale | $ | 619,234 | 100 | % | $ | 735,666 | 100 | % | $ | 673,845 | 100 | % | ||||||||||||
(Dollars in thousands) | 2005 | 2004 | 2003 | |||||||||||||||||||||
December 31, | Amount | % | Amount | % | Amount | % | ||||||||||||||||||
Securities Held to Maturity: | ||||||||||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | $ | 47,250 | 29 | % | $ | 30,000 | 19 | % | $ | 8,000 | 5 | % | ||||||||||||
Mortgage-backed securities | 84,960 | 52 | % | 105,753 | 69 | % | 143,162 | 86 | % | |||||||||||||||
States and political subdivisions | 32,497 | 19 | % | 18,639 | 12 | % | 14,414 | 9 | % | |||||||||||||||
Total securities held to maturity | $ | 164,707 | 100 | % | $ | 154,392 | 100 | % | $ | 165,576 | 100 | % | ||||||||||||
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(Dollars in thousands) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||||||||||||||||
December 31, | Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||
Mortgages | $ | 291,292 | 21 | % | $ | 266,670 | 21 | % | $ | 227,334 | 24 | % | $ | 197,814 | 25 | % | $ | 118,999 | 20 | % | ||||||||||||||||||||
Construction & development | 37,190 | 3 | % | 29,263 | 2 | % | 12,486 | 1 | % | 10,337 | 1 | % | 1,930 | — | % | |||||||||||||||||||||||||
Other (1) | 226,252 | 16 | % | 211,778 | 18 | % | 168,657 | 18 | % | 174,018 | 22 | % | 139,704 | 23 | % | |||||||||||||||||||||||||
Total commercial | 554,734 | 40 | % | 507,711 | 41 | % | 408,477 | 43 | % | 382,169 | 48 | % | 260,633 | 43 | % | |||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||||||||||||||||
Mortgages | 565,680 | 40 | % | 494,720 | 40 | % | 375,706 | 39 | % | 269,548 | 34 | % | 223,681 | 37 | % | |||||||||||||||||||||||||
Homeowner construction | 17,028 | 2 | % | 18,975 | 1 | % | 14,149 | 2 | % | 11,338 | 1 | % | 11,678 | 2 | % | |||||||||||||||||||||||||
Total residential real estate | 582,708 | 42 | % | 513,695 | 41 | % | 389,855 | 41 | % | 280,886 | 35 | % | 235,359 | 39 | % | |||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||
Home equity lines | 161,100 | 11 | % | 155,001 | 12 | % | 80,523 | 12 | % | 81,503 | 10 | % | 56,410 | 9 | % | |||||||||||||||||||||||||
Home equity loans | 72,288 | 5 | % | 54,297 | 4 | % | 35,935 | 4 | % | 39,010 | 5 | % | 40,508 | 7 | % | |||||||||||||||||||||||||
Other (2) | 31,078 | 2 | % | 18,972 | 2 | % | 46,191 | — | % | 11,558 | 2 | % | 12,735 | 2 | % | |||||||||||||||||||||||||
Total consumer loans | 264,466 | 18 | % | 228,270 | 18 | % | 162,649 | 16 | % | 132,071 | 17 | % | 109,653 | 18 | % | |||||||||||||||||||||||||
Total loans | $ | 1,401,908 | 100 | % | $ | 1,249,676 | 100 | % | $ | 960,981 | 100 | % | $ | 795,126 | 100 | % | $ | 605,645 | 100 | % | ||||||||||||||||||||
(1) | Loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate. | |
(2) | Other consumer loans include personal installment loans and loans to individuals secured by general aviation aircraft and automobiles |
(Dollars in thousands) | 1 Year | 1 to 5 | After 5 | |||||||||||||
Matures in: | or Less | Years | Years | Totals | ||||||||||||
Construction and development (1) | $ | 9,595 | $ | 11,048 | $ | 33,575 | $ | 54,218 | ||||||||
Commercial — other | 96,839 | 91,419 | 37,994 | 226,252 | ||||||||||||
$ | 106,434 | $ | 102,467 | $ | 71,569 | $ | 280,470 | |||||||||
(1) | Includes homeowner construction and commercial construction and development. Maturities of homeowner construction loans are included based on their contractual conventional mortgage repayment terms following the completion of construction. |
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Floating or | ||||||||||||
Predetermined | Adjustable | |||||||||||
(Dollars in thousands) | Rates | Rates | Totals | |||||||||
Principal due after one year | $ | 106,143 | $ | 67,893 | $ | 174,036 | ||||||
(Dollars in thousands) | ||||||||||||||||||||
December 31, | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||
Residential real estate | $ | 1,147 | $ | 1,027 | $ | 946 | $ | 1,202 | $ | 1,161 | ||||||||||
Commercial and other: | ||||||||||||||||||||
Mortgages | 394 | 2,357 | 342 | 1,356 | 1,472 | |||||||||||||||
Construction and development | — | 390 | — | — | — | |||||||||||||||
Other | 624 | 730 | 1,236 | 1,354 | 509 | |||||||||||||||
Consumer | 249 | 227 | 219 | 265 | 685 | |||||||||||||||
Total nonaccrual loans | 2,414 | 4,731 | 2,743 | 4,177 | 3,827 | |||||||||||||||
Other real estate owned, net | — | 4 | 11 | 86 | 30 | |||||||||||||||
Total nonperforming assets | $ | 2,414 | $ | 4,735 | $ | 2,754 | $ | 4,263 | $ | 3,857 | ||||||||||
Loans past due 90 days or more and accruing | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
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(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Nonaccrual loans 90 days or more past due | $ | 1,257 | $ | 3,498 | ||||
Nonaccrual loans less than 90 days past due | 1,157 | 1,233 | ||||||
Total nonaccrual loans | $ | 2,414 | $ | 4,731 | ||||
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(Dollars in thousands) | ||||||||||||||||||||
December 31, | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||
Balance at beginning of year | $ | 16,771 | $ | 15,914 | $ | 15,487 | $ | 13,593 | $ | 13,135 | ||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial: | ||||||||||||||||||||
Mortgages | 85 | 215 | — | 27 | 122 | |||||||||||||||
Construction and development | — | — | — | — | — | |||||||||||||||
Other | 198 | 257 | 200 | 284 | 121 | |||||||||||||||
Residential: | ||||||||||||||||||||
Mortgages | — | — | — | 29 | — | |||||||||||||||
Homeowner construction | — | — | — | — | — | |||||||||||||||
Consumer | 86 | 95 | 94 | 157 | 190 | |||||||||||||||
Total charge-offs | 369 | 567 | 294 | 497 | 433 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial: | ||||||||||||||||||||
Mortgages | 71 | 36 | 17 | 72 | — | |||||||||||||||
Construction and development | — | 34 | — | — | — | |||||||||||||||
Other | 389 | 569 | 177 | — | 273 | |||||||||||||||
Residential: | ||||||||||||||||||||
Mortgages | — | — | — | — | 15 | |||||||||||||||
Homeowner construction | — | — | — | — | — | |||||||||||||||
Consumer | 106 | 175 | 67 | 90 | 53 | |||||||||||||||
Total recoveries | 566 | 814 | 261 | 162 | 341 | |||||||||||||||
Net (recoveries) charge-offs | (197 | ) | (247 | ) | 33 | 335 | 92 | |||||||||||||
Allowance on acquired loans | — | — | — | 1,829 | — | |||||||||||||||
Reclassification of allowance on off-balance sheet exposures | (250 | ) | — | — | — | — | ||||||||||||||
Provision charged to earnings | 1,200 | 610 | 460 | 400 | 550 | |||||||||||||||
Balance at end of year | $ | 17,918 | $ | 16,771 | $ | 15,914 | $ | 15,487 | $ | 13,593 | ||||||||||
Net (recoveries) charge-offs to average loans | (.01 | )% | (.02 | )% | — | % | .05 | % | .02 | % | ||||||||||
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(Dollars in thousands) | ||||||||||||||||||||
December 31, | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||
Commercial: | ||||||||||||||||||||
Mortgages | $ | 4,467 | $ | 4,385 | $ | 4,102 | $ | 3,161 | $ | 2,195 | ||||||||||
% of these loans to all loans | 20.8 | % | 21.3 | % | 23.7 | % | 24.9 | % | 19.6 | % | ||||||||||
Construction and development | 713 | 729 | 294 | 243 | 33 | |||||||||||||||
% of these loans to all loans | 2.7 | % | 2.3 | % | 1.3 | % | 1.3 | % | .3 | % | ||||||||||
Other | 3,263 | 3,633 | 3,248 | 2,832 | 3,024 | |||||||||||||||
% of these loans to all loans | 16.1 | % | 16.9 | % | 17.6 | % | 21.9 | % | 23.1 | % | ||||||||||
Residential: | ||||||||||||||||||||
Mortgages | 1,642 | 1,447 | 1,965 | 1,457 | 1,230 | |||||||||||||||
% of these loans to all loans | 40.3 | % | 39.7 | % | 39.0 | % | 33.9 | % | 36.9 | % | ||||||||||
Homeowner construction | 43 | 47 | 74 | 61 | 64 | |||||||||||||||
% of these loans to all loans | 1.2 | % | 1.5 | % | 1.5 | % | 1.4 | % | 2.0 | % | ||||||||||
Consumer | 1,585 | 1,323 | 1,507 | 1,305 | 1,222 | |||||||||||||||
% of these loans to all loans | 18.9 | % | 18.3 | % | 16.9 | % | 16.6 | % | 18.1 | % | ||||||||||
Unallocated | 6,205 | 5,207 | 4,724 | 6,428 | 5,825 | |||||||||||||||
Balance at end of year | $ | 17,918 | $ | 16,771 | $ | 15,914 | $ | 15,487 | $ | 13,593 | ||||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
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Payments Due by Period | ||||||||||||||||||||
Less Than | After | |||||||||||||||||||
(Dollars in thousands) | Total | 1 Year | 1-3 Years | 4-5 Years | 5 Years | |||||||||||||||
Contractual Obligations: | ||||||||||||||||||||
FHLB advances (1) | $ | 545,323 | $ | 144,635 | $ | 213,151 | $ | 109,310 | $ | 78,227 | ||||||||||
Junior subordinated debentures | 22,681 | — | — | — | 22,681 | |||||||||||||||
Operating lease obligations | 2,263 | 870 | 969 | 384 | 40 | |||||||||||||||
Software licensing arrangements | 884 | 602 | 170 | 96 | 16 | |||||||||||||||
Treasury, tax and loan demand note | 3,794 | 3,794 | — | — | — | |||||||||||||||
Other borrowings | 5,980 | 63 | 3,819 | 1,805 | 293 | |||||||||||||||
Total contractual obligations | $ | 580,925 | $ | 149,964 | $ | 218,109 | $ | 111,595 | $ | 101,257 | ||||||||||
(1) | All FHLB advances are shown in the period corresponding to their scheduled maturity. |
Amount of Commitment Expiration — Per Period | ||||||||||||||||||||
Less Than | After | |||||||||||||||||||
(Dollars in thousands) | Total | 1 Year | 1-3 Years | 4-5 Years | 5 Years | |||||||||||||||
Other Commitments: | ||||||||||||||||||||
Commercial loans | $ | 105,971 | $ | 78,049 | $ | 12,195 | $ | 4,867 | $ | 10,860 | ||||||||||
Home equity lines | 174,073 | 1,778 | 7,975 | 8,217 | 156,103 | |||||||||||||||
Other loans | 17,271 | 14,845 | — | 2,426 | — | |||||||||||||||
Standby letters of credit | 10,986 | 1,308 | 9,188 | 490 | — | |||||||||||||||
Forward loan commitments to: | ||||||||||||||||||||
Originate loans | 2,188 | 2,188 | — | — | — | |||||||||||||||
Sell loans | 2,626 | 2,626 | — | — | — | |||||||||||||||
Total commitments | $ | 313,115 | $ | 100,794 | $ | 29,358 | $ | 16,000 | $ | 166,963 | ||||||||||
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2005 | 2004 | |||||||||||||||
December 31, | Months 1 - 12 | Months 13 - 24 | Months 1 - 12 | Months 13 - 24 | ||||||||||||
100 basis point rate decrease | -0.08 | % | -1.18 | % | -1.31 | % | -4.07 | % | ||||||||
100 basis point rate increase | 0.93 | % | -0.14 | % | 1.26 | % | 0.76 | % | ||||||||
200 basis point rate increase | 1.59 | % | -1.31 | % | 2.26 | % | 0.27 | % |
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Down 100 | Up 200 | |||||||
(Dollars in thousands) | Basis | Basis | ||||||
Security Type | Points | Points | ||||||
U.S. Treasury and government-sponsored agency securities (noncallable) | 2,607 | (4,669 | ) | |||||
U.S. government-sponsored agency securities (callable) | 1,036 | (3,949 | ) | |||||
Mortgage-backed securities | 9,266 | (24,522 | ) | |||||
Corporate securities | 624 | (1,187 | ) | |||||
Total change in market value as of December 31, 2005 | $ | 13,533 | $ | (34,327 | ) | |||
Total change in market value as of December 31, 2004 | $ | 9,611 | $ | (37,247 | ) | |||
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Description | Page | |||
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/s/ John C. Warren | /s/ David V. Devault | |
John C. Warren | David V. Devault | |
Chairman and | Executive Vice President, Secretary, | |
Chief Executive Officer | Treasurer and Chief Financial Officer |
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Washington Trust Bancorp, Inc.:
March 15, 2006
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Washington Trust Bancorp, Inc.:
March 15, 2006
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WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARIES | (Dollars in thousands) |
December 31, | 2005 | 2004 | ||||||
Assets: | ||||||||
Cash and due from banks | $ | 48,997 | $ | 34,801 | ||||
Federal funds sold and other short-term investments | 17,166 | 17,280 | ||||||
Mortgage loans held for sale | 439 | 1,095 | ||||||
Securities: | ||||||||
Available for sale, at fair value; amortized cost $620,638 in 2005 and $724,209 in 2004 | 619,234 | 735,666 | ||||||
Held to maturity, at cost; fair value $162,756 in 2005 and $156,270 in 2004 | 164,707 | 154,392 | ||||||
Total securities | 783,941 | 890,058 | ||||||
Federal Home Loan Bank stock, at cost | 34,966 | 34,373 | ||||||
Loans: | ||||||||
Commercial and other | 554,734 | 507,711 | ||||||
Residential real estate | 582,708 | 513,695 | ||||||
Consumer | 264,466 | 228,270 | ||||||
Total loans | 1,401,908 | 1,249,676 | ||||||
Less allowance for loan losses | 17,918 | 16,771 | ||||||
Net loans | 1,383,990 | 1,232,905 | ||||||
Premises and equipment, net | 23,737 | 24,248 | ||||||
Accrued interest receivable | 10,594 | 9,367 | ||||||
Investment in bank-owned life insurance | 30,360 | 29,249 | ||||||
Goodwill | 39,963 | 22,591 | ||||||
Identifiable intangible assets | 14,409 | 1,309 | ||||||
Other assets | 13,441 | 10,544 | ||||||
Total assets | $ | 2,402,003 | $ | 2,307,820 | ||||
Liabilities: | ||||||||
Deposits: | ||||||||
Demand deposits | $ | 196,102 | $ | 189,588 | ||||
NOW accounts | 178,677 | 174,727 | ||||||
Money market accounts | 223,255 | 196,775 | ||||||
Savings accounts | 212,499 | 251,920 | ||||||
Time deposits | 828,725 | 644,875 | ||||||
Total deposits | 1,639,258 | 1,457,885 | ||||||
Dividends payable | 2,408 | 2,257 | ||||||
Federal Home Loan Bank advances | 545,323 | 672,748 | ||||||
Junior subordinated debentures | 22,681 | — | ||||||
Other borrowings | 9,774 | 3,417 | ||||||
Accrued expenses and other liabilities | 24,113 | 19,661 | ||||||
Total liabilities | 2,243,557 | 2,155,968 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ Equity: | ||||||||
Common stock of $.0625 par value; authorized 30,000,000 shares in 2005 and 2004; issued 13,372,295 shares in 2005 and 13,278,685 shares in 2004 | 836 | 830 | ||||||
Paid-in capital | 33,676 | 31,718 | ||||||
Retained earnings | 126,735 | 113,314 | ||||||
Unearned stock-based compensation | (898 | ) | (737 | ) | ||||
Accumulated other comprehensive (loss) income | (1,653 | ) | 6,937 | |||||
Treasury stock, at cost; 10,519 shares in 2005 and 9,309 shares in 2004 | (250 | ) | (210 | ) | ||||
Total shareholders’ equity | 158,446 | 151,852 | ||||||
Total liabilities and shareholders’ equity | $ | 2,402,003 | $ | 2,307,820 | ||||
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WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARIES | (Dollars and shares in thousands, | |
CONSOLIDATED STATEMENTS OF INCOME | except per share amounts) |
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Interest income: | ||||||||||||
Interest and fees on loans | $ | 78,931 | $ | 60,828 | $ | 51,603 | ||||||
Interest on securities | 33,820 | 33,787 | 32,430 | |||||||||
Dividends on corporate stock and Federal Home Loan Bank stock | 2,491 | 2,105 | 2,081 | |||||||||
Interest on federal funds sold and other short-term investments | 451 | 133 | 131 | |||||||||
Total interest income | 115,693 | 96,853 | 86,245 | |||||||||
Interest expense: | ||||||||||||
Deposits | 32,186 | 22,197 | 18,554 | |||||||||
Federal Home Loan Bank advances | 22,233 | 20,153 | 18,819 | |||||||||
Junior subordinated debentures | 458 | — | — | |||||||||
Other | 160 | 62 | 73 | |||||||||
Total interest expense | 55,037 | 42,412 | 37,446 | |||||||||
Net interest income | 60,656 | 54,441 | 48,799 | |||||||||
Provision for loan losses | 1,200 | 610 | 460 | |||||||||
Net interest income after provision for loan losses | 59,456 | 53,831 | 48,339 | |||||||||
Noninterest income: | ||||||||||||
Wealth management and trust services | 16,421 | 13,048 | 10,769 | |||||||||
Service charges on deposit accounts | 4,502 | 4,483 | 4,920 | |||||||||
Merchant processing fees | 5,203 | 4,259 | 3,410 | |||||||||
Net gains on loan sales | 1,679 | 1,901 | 4,690 | |||||||||
Income from bank-owned life insurance | 1,110 | 1,175 | 1,161 | |||||||||
Net realized gains on securities | 357 | 248 | 630 | |||||||||
Other income | 1,674 | 1,791 | 1,155 | |||||||||
Total noninterest income | 30,946 | 26,905 | 26,735 | |||||||||
Noninterest expense: | ||||||||||||
Salaries and employee benefits | 32,133 | 28,816 | 26,945 | |||||||||
Net occupancy | 3,460 | 3,201 | 2,979 | |||||||||
Equipment | 3,456 | 3,267 | 3,380 | |||||||||
Merchant processing costs | 4,319 | 3,534 | 2,716 | |||||||||
Advertising and promotion | 1,977 | 1,748 | 1,440 | |||||||||
Legal, audit and professional fees | 1,900 | 1,535 | 1,242 | |||||||||
Outsourced services | 1,723 | 1,616 | 1,333 | |||||||||
Amortization of intangibles | 852 | 644 | 719 | |||||||||
Debt prepayment penalties | — | — | 941 | |||||||||
Other | 6,573 | 6,012 | 5,937 | |||||||||
Total noninterest expense | 56,393 | 50,373 | 47,632 | |||||||||
Income before income taxes | 34,009 | 30,363 | 27,442 | |||||||||
Income tax expense | 10,985 | 9,534 | 8,519 | |||||||||
Net income | $ | 23,024 | $ | 20,829 | $ | 18,923 | ||||||
Weighted average shares outstanding — basic | 13,315.2 | 13,227.8 | 13,114.1 | |||||||||
Weighted average shares outstanding — diluted | 13,626.7 | 13,542.7 | 13,393.6 | |||||||||
Per share information: | ||||||||||||
Basic earnings per share | $ | 1.73 | $ | 1.57 | $ | 1.44 | ||||||
Diluted earnings per share | $ | 1.69 | $ | 1.54 | $ | 1.41 | ||||||
Cash dividends declared per share | $ | .72 | $ | .68 | $ | .62 |
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WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARIES | (Dollars in thousands) |
Accumulated | ||||||||||||||||||||||||||||
Unearned | Other | |||||||||||||||||||||||||||
Common | Paid-in | Retained | Stock-Based | Comprehensive | Treasury | |||||||||||||||||||||||
Stock | Capital | Earnings | Compensation | Income (Loss) | Stock | Total | ||||||||||||||||||||||
Balance at January 1, 2003 | $ | 818 | $ | 28,767 | $ | 90,717 | $ | (24 | ) | $ | 9,294 | $ | (851 | ) | $ | 128,721 | ||||||||||||
Net income | 18,923 | 18,923 | ||||||||||||||||||||||||||
Unrealized losses on securities, net of $1,002 income tax benefit | (2,499 | ) | (2,499 | ) | ||||||||||||||||||||||||
Reclassification adjustments for net realized gains included in net income, net of $220 income tax expense | (410 | ) | (410 | ) | ||||||||||||||||||||||||
Minimum pension liability adjustment, net of $153 income tax benefit | (284 | ) | (284 | ) | ||||||||||||||||||||||||
Comprehensive income | 15,730 | |||||||||||||||||||||||||||
Cash dividends declared | (8,148 | ) | (8,148 | ) | ||||||||||||||||||||||||
Restricted stock award | 29 | (29 | ) | — | ||||||||||||||||||||||||
Amortization of restricted stock | 31 | 31 | ||||||||||||||||||||||||||
Shares issued | 7 | 1,072 | 851 | 1,930 | ||||||||||||||||||||||||
Shares repurchased | (209 | ) | (209 | ) | ||||||||||||||||||||||||
Balance at December 31, 2003 | $ | 825 | $ | 29,868 | $ | 101,492 | $ | (22 | ) | $ | 6,101 | $ | (209 | ) | $ | 138,055 | ||||||||||||
Net income | 20,829 | 20,829 | ||||||||||||||||||||||||||
Unrealized gains on securities, net of $383 income tax expense | 1,006 | 1,006 | ||||||||||||||||||||||||||
Reclassification adjustments for net realized gains included in net income, net of $87 income tax expense | (161 | ) | (161 | ) | ||||||||||||||||||||||||
Minimum pension liability adjustment, net of $5 income tax benefit | (9 | ) | (9 | ) | ||||||||||||||||||||||||
Comprehensive income | 21,665 | |||||||||||||||||||||||||||
Cash dividends declared | (9,007 | ) | (9,007 | ) | ||||||||||||||||||||||||
Restricted stock unit award | 850 | (850 | ) | — | ||||||||||||||||||||||||
Amortization of restricted stock | 135 | 135 | ||||||||||||||||||||||||||
Shares issued | 5 | 1,000 | 154 | 1,159 | ||||||||||||||||||||||||
Shares repurchased | (155 | ) | (155 | ) | ||||||||||||||||||||||||
Balance at December 31, 2004 | $ | 830 | $ | 31,718 | $ | 113,314 | $ | (737 | ) | $ | 6,937 | $ | (210 | ) | $ | 151,852 | ||||||||||||
Net income | 23,024 | 23,024 | ||||||||||||||||||||||||||
Unrealized losses on securities, net of $4,443 income tax benefit | (8,061 | ) | (8,061 | ) | ||||||||||||||||||||||||
Reclassification adjustments for net realized gains included in net income, net of $125 income tax expense | (232 | ) | (232 | ) | ||||||||||||||||||||||||
Minimum pension liability adjustment, net of $160 income tax benefit | (297 | ) | (297 | ) | ||||||||||||||||||||||||
Comprehensive income | 14,434 | |||||||||||||||||||||||||||
Cash dividends declared | (9,603 | ) | (9,603 | ) | ||||||||||||||||||||||||
Restricted stock and stock unit awards, net | 533 | (533 | ) | — | ||||||||||||||||||||||||
Amortization of restricted stock | 372 | 372 | ||||||||||||||||||||||||||
Shares issued | 6 | 1,425 | 29 | 1,460 | ||||||||||||||||||||||||
Shares repurchased | (69 | ) | (69 | ) | ||||||||||||||||||||||||
Balance at December 31, 2005 | $ | 836 | $ | 33,676 | $ | 126,735 | $ | (898 | ) | $ | (1,653 | ) | $ | (250 | ) | $ | 158,446 | |||||||||||
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WASHINGTON TRUST BANCORP, INC. AND SUBSIDIARIES | (Dollars in thousands) |
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 23,024 | $ | 20,829 | $ | 18,923 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Provision for loan losses | 1,200 | 610 | 460 | |||||||||
Depreciation of premises and equipment | 3,020 | 3,124 | 3,162 | |||||||||
Net amortization of premium and discount | 2,295 | 2,758 | 5,355 | |||||||||
Net amortization of intangibles | 852 | 644 | 719 | |||||||||
Amortization of restricted stock | 372 | 135 | 31 | |||||||||
Deferred income tax benefit | 1,296 | (296 | ) | (701 | ) | |||||||
Net gains on loan sales | (1,679 | ) | (1,901 | ) | (4,690 | ) | ||||||
Net realized gains on securities | (357 | ) | (248 | ) | (630 | ) | ||||||
Earnings from bank-owned life insurance | (1,110 | ) | (1,175 | ) | (1,161 | ) | ||||||
Proceeds from sales of loans | 65,000 | 67,426 | 185,214 | |||||||||
Loans originated for sale | (63,045 | ) | (64,456 | ) | (178,979 | ) | ||||||
(Increase) decrease in accrued interest receivable, excluding purchased interest | (1,008 | ) | (1,075 | ) | 222 | |||||||
Decrease (increase) in other assets | 2,379 | (1,755 | ) | 2,081 | ||||||||
(Decrease) increase in accrued expenses and other liabilities | (3,145 | ) | 1,578 | 2,042 | ||||||||
Other, net | — | 557 | (260 | ) | ||||||||
Net cash provided by operating activities | 29,094 | 26,755 | 31,788 | |||||||||
Cash flows from investing activities: | ||||||||||||
Securities available for sale: Purchases | (142,253 | ) | (297,287 | ) | (456,596 | ) | ||||||
Proceeds from sales | 67,542 | 4,604 | 42,858 | |||||||||
Maturities and principal repayments | 177,014 | 230,396 | 289,901 | |||||||||
Securities held to maturity: Purchases | (45,689 | ) | (44,537 | ) | (62,347 | ) | ||||||
Maturities and principal repayments | 35,009 | 55,190 | 137,416 | |||||||||
Purchases of Federal Home Loan Bank stock | (593 | ) | (2,909 | ) | (6,882 | ) | ||||||
Net increase in loans | (78,822 | ) | (169,228 | ) | (34,534 | ) | ||||||
Purchases of loans, including purchased interest | (73,520 | ) | (119,796 | ) | (132,317 | ) | ||||||
Proceeds from the sale of other real estate owned | 4 | 6 | 87 | |||||||||
Purchases of premises and equipment | (2,443 | ) | (2,431 | ) | (3,687 | ) | ||||||
Purchases of bank-owned life insurance | — | — | (4,900 | ) | ||||||||
Equity investment in capital trusts | (681 | ) | — | — | ||||||||
Cash paid for acquisition, including deferred acquisition obligations, net of cash acquired | (19,827 | ) | — | — | ||||||||
Net cash used in investing activities | (84,259 | ) | (345,992 | ) | (231,001 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Net increase in deposits | 181,384 | 251,767 | 95,855 | |||||||||
Net (decrease) increase in other borrowings | 970 | 1,106 | (6,872 | ) | ||||||||
Proceeds from Federal Home Loan Bank advances | 669,643 | 1,077,228 | 1,395,331 | |||||||||
Repayment of Federal Home Loan Bank advances | (796,919 | ) | (1,011,465 | ) | (1,268,143 | ) | ||||||
Purchase of treasury stock | (69 | ) | (155 | ) | (209 | ) | ||||||
Net effect of common stock issuances | 1,009 | 590 | 1,174 | |||||||||
Proceeds from the issuance of junior subordinated debentures | 22,681 | — | — | |||||||||
Cash dividends paid | (9,452 | ) | (8,863 | ) | (7,861 | ) | ||||||
Net cash provided by financing activities | 69,247 | 310,208 | 209,275 | |||||||||
Net increase (decrease) in cash and cash equivalents | 14,082 | (9,029 | ) | 10,062 | ||||||||
Cash and cash equivalents at beginning of year | 52,081 | 61,110 | 51,048 | |||||||||
Cash and cash equivalents at end of year | $ | 66,163 | $ | 52,081 | $ | 61,110 | ||||||
Noncash Investing and Financing Activities: | ||||||||||||
Loans charged off | $ | 369 | $ | 567 | $ | 294 | ||||||
In conjunction with the purchase acquisition detailed in Note 2 to the Consolidated Financial Statements, assets were acquired and liabilities were assumed as follows: | ||||||||||||
Fair value of assets acquired | 33,763 | — | — | |||||||||
Fair value of liabilities assumed | 7,347 | — | — | |||||||||
Supplemental Disclosures:Interest payments | 53,722 | 41,305 | 37,311 | |||||||||
Income tax payments | 11,962 | 9,731 | 7,834 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands, except per share amounts) | ||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Net income, as reported | $ | 23,024 | $ | 20,829 | $ | 18,923 | ||||||
Less: | ||||||||||||
Total stock–based compensation expense determined under fair value based method for all awards, net of related tax effects | (1,586 | ) | (776 | ) | (1,033 | ) | ||||||
Pro forma net income | 21,438 | $ | 20,053 | $ | 17,890 | |||||||
Earnings per share: | ||||||||||||
Basic – as reported | $ | 1.73 | $ | 1.57 | $ | 1.44 | ||||||
Basic – pro forma | $ | 1.61 | $ | 1.52 | $ | 1.36 | ||||||
Diluted – as reported | $ | 1.69 | $ | 1.54 | $ | 1.41 | ||||||
Diluted – pro forma | $ | 1.57 | $ | 1.48 | $ | 1.34 | ||||||
Weighted average fair value | $ | 7.30 | $ | 8.95 | $ | 6.56 | ||||||
Expected life | 4.8 year | 6.3 year | 6.3 years | |||||||||
Risk-free interest rate | 4.13 | % | 3.97 | % | 3.13 | % | ||||||
Expected volatility | 33.0 | % | 35.4 | % | 39.8 | % | ||||||
Expected dividend yield | 2.7 | % | 2.8 | % | 2.8 | % |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||
Assets: | ||||
Cash and due from banks | $ | 1,060 | ||
Short-term investments | 142 | |||
Equipment, net | 72 | |||
Goodwill | 17,372 | |||
Other identified intangible assets | 13,952 | |||
Other assets | 1,165 | |||
Total assets acquired | $ | 33,763 | ||
Liabilities: | ||||
Accrued expenses and other liabilities | 7,347 | |||
Total liabilities acquired | $ | 7,347 | ||
Net assets acquired | $ | 26,416 | ||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
December 31, 2005 | Cost | Gains | Losses | Value | ||||||||||||
Securities Available for Sale: | ||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | $ | 107,135 | $ | 1,332 | $ | (816 | ) | $ | 107,651 | |||||||
Mortgage-backed securities | 436,142 | 1,019 | (8,987 | ) | 428,174 | |||||||||||
Corporate bonds | 63,565 | 346 | (716 | ) | 63,195 | |||||||||||
Corporate stocks | 13,796 | 6,573 | (155 | ) | 20,214 | |||||||||||
Total securities available for sale | 620,638 | 9,270 | (10,674 | ) | 619,234 | |||||||||||
Securities Held to Maturity: | ||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | 47,250 | — | (797 | ) | 46,453 | |||||||||||
Mortgage-backed securities | 84,960 | 768 | (1,527 | ) | 84,201 | |||||||||||
States and political subdivisions | 32,497 | 72 | (467 | ) | 32,102 | |||||||||||
Total securities held to maturity | 164,707 | 840 | (2,791 | ) | 162,756 | |||||||||||
Total securities | $ | 785,345 | $ | 10,110 | $ | (13,465 | ) | $ | 781,990 | |||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
December 31, 2004 | Cost | Gains | Losses | Value | ||||||||||||
Securities Available for Sale: | ||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | $ | 135,513 | $ | 2,771 | $ | (621 | ) | $ | 137,663 | |||||||
Mortgage-backed securities | 492,364 | 2,944 | (3,461 | ) | 491,847 | |||||||||||
Corporate bonds | 78,364 | 953 | (483 | ) | 78,834 | |||||||||||
Corporate stocks | 17,968 | 9,443 | (89 | ) | 27,322 | |||||||||||
Total securities available for sale | 724,209 | 16,111 | (4,654 | ) | 735,666 | |||||||||||
Securities Held to Maturity: | ||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | 30,000 | 3 | (127 | ) | 29,876 | |||||||||||
Mortgage-backed securities | 105,753 | 1,927 | (208 | ) | 107,472 | |||||||||||
States and political subdivisions | 18,639 | 348 | (65 | ) | 18,922 | |||||||||||
Total securities held to maturity | 154,392 | 2,278 | (400 | ) | 156,270 | |||||||||||
Total securities | $ | 878,601 | $ | 18,389 | $ | (5,054 | ) | $ | 891,936 | |||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||||||||||
At December 31, 2005 | # | Value | Losses | # | Value | Losses | # | Value | Losses | |||||||||||||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | 12 | $ | 70,586 | $ | 827 | 6 | $ | 43,464 | $ | 786 | 18 | $ | 114,050 | $ | 1,613 | |||||||||||||||||||||
Mortgage-backed securities | 56 | 178,688 | 2,565 | 47 | 238,844 | 7,949 | 103 | 417,532 | 10,514 | |||||||||||||||||||||||||||
States and political subdivisions | 33 | 19,129 | 349 | 5 | 3,557 | 118 | 38 | 22,686 | 467 | |||||||||||||||||||||||||||
Corporate bonds | 5 | 10,929 | 75 | 9 | 25,019 | 641 | 14 | 35,948 | 716 | |||||||||||||||||||||||||||
Subtotal, debt securities | 106 | 279,332 | 3,816 | 67 | 310,884 | 9,494 | 173 | 590,216 | 13,310 | |||||||||||||||||||||||||||
Corporate stocks | 6 | 2,617 | 126 | 1 | 483 | 28 | 7 | 3,100 | 155 | |||||||||||||||||||||||||||
Total temporarily impaired securities | 112 | $ | 281,949 | $ | 3,942 | 68 | $ | 311,367 | $ | 9,522 | 180 | $ | 593,316 | $ | 13,465 | |||||||||||||||||||||
(Dollars in thousands) | Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||||||||||||||
At December 31, 2004 | # | Value | Losses | # | Value | Losses | # | Value | Losses | |||||||||||||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies | 10 | $ | 73,436 | $ | 497 | 1 | $ | 11,749 | $ | 251 | 11 | $ | 85,185 | $ | 748 | |||||||||||||||||||||
Mortgage-backed securities | 40 | 271,485 | 2,310 | 19 | 88,313 | 1,359 | 59 | 359,798 | 3,669 | |||||||||||||||||||||||||||
States and political subdivisions | 6 | 3,982 | 65 | — | — | — | 6 | 3,982 | 65 | |||||||||||||||||||||||||||
Corporate bonds | 7 | 20,183 | 182 | 5 | 11,737 | 301 | 12 | 31,920 | 483 | |||||||||||||||||||||||||||
Subtotal, debt securities | 63 | 369,086 | 3,054 | 25 | 111,799 | 1,911 | 88 | 480,885 | 4,965 | |||||||||||||||||||||||||||
Corporate stocks | 4 | 2,207 | 68 | 1 | 479 | 21 | 5 | 2,686 | 89 | |||||||||||||||||||||||||||
Total temporarily impaired securities | 67 | $ | 371,293 | $ | 3,122 | 26 | $ | 112,278 | $ | 1,932 | 93 | $ | 483,571 | $ | 5,054 | |||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | Due in | After 1 Year | After 5 Years | |||||||||||||||||
1 Year | but within | but within | After | |||||||||||||||||
or Less | 5 Years | 10 Years | 10 Years | Totals | ||||||||||||||||
Securities Available for Sale: | ||||||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies: | ||||||||||||||||||||
Amortized cost | $ | 2,979 | $ | 74,372 | $ | 29,784 | $ | — | $ | 107,135 | ||||||||||
Weighted average yield | 7.43 | % | 4.70 | % | 5.45 | % | — | % | 4.98 | % | ||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Amortized cost | 94,003 | 219,444 | 98,605 | 24,090 | 436,142 | |||||||||||||||
Weighted average yield | 4.52 | % | 4.66 | % | 4.62 | % | 4.47 | % | 4.61 | % | ||||||||||
Corporate bonds: | ||||||||||||||||||||
Amortized cost | 2,027 | 21,686 | 9,121 | 30,731 | 63,565 | |||||||||||||||
Weighted average yield | 6.54 | % | 4.73 | % | 5.22 | % | 4.94 | % | 4.96 | % | ||||||||||
Total debt securities: | ||||||||||||||||||||
Amortized cost | $ | 99,009 | $ | 315,502 | $ | 137,510 | $ | 54,821 | $ | 606,842 | ||||||||||
Weighted average yield | 4.65 | % | 4.67 | % | 4.84 | % | 4.73 | % | 4.71 | % | ||||||||||
Fair value | $ | 97,294 | $ | 311,726 | $ | 135,799 | $ | 54,201 | $ | 599,020 | ||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | Due in | After 1 Year | After 5 Years | |||||||||||||||||
1 Year | but within | but within | After | |||||||||||||||||
or Less | 5 Years | 10 Years | 10 Years | Totals | ||||||||||||||||
Securities Held to Maturity: | ||||||||||||||||||||
U.S. Treasury obligations and obligations of U.S. government-sponsored agencies: | ||||||||||||||||||||
Amortized cost | $ | 5,250 | $ | 42,000 | $ | — | $ | — | $ | 47,250 | ||||||||||
Weighted average yield | 3.25 | % | 3.58 | % | — | % | — | % | 3.55 | % | ||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
Amortized cost | 17,914 | 42,140 | 20,705 | 4,201 | 84,960 | |||||||||||||||
Weighted average yield | 5.24 | % | 5.00 | % | 4.59 | % | 4.11 | % | 4.91 | % | ||||||||||
States and political subdivisions: | ||||||||||||||||||||
Amortized cost | 4,733 | 2,909 | 9,175 | 15,680 | 32,497 | |||||||||||||||
Weighted average yield | 4.19 | % | 3.52 | % | 3.46 | % | 3.83 | % | 3.75 | % | ||||||||||
Total debt securities: | ||||||||||||||||||||
Amortized cost | $ | 27,897 | $ | 87,049 | $ | 29,880 | $ | 19,881 | $ | 164,707 | ||||||||||
Weighted average yield | 4.69 | % | 4.27 | % | 4.25 | % | 3.89 | % | 4.29 | % | ||||||||||
Fair value | $ | 27,591 | $ | 85,927 | $ | 29,584 | $ | 19,654 | $ | 162,756 | ||||||||||
(Dollars in thousands) | ||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Proceeds from sales | $ | 67,542 | $ | 4,604 | $ | 42,858 | ||||||
Gross realized gains | $ | 1,840 | $ | 937 | $ | 630 | ||||||
Gross realized losses | (1,451 | ) | (689 | ) | — | |||||||
Other than temporary write-downs | (32 | ) | — | — | ||||||||
Net realized gains | $ | 357 | $ | 248 | $ | 630 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | December 31, 2005 | December 31, 2004 | ||||||||||||||
Amount | % | Amount | % | |||||||||||||
Commercial: | ||||||||||||||||
Mortgages (1) | $ | 291,292 | 21 | % | $ | 266,670 | 21 | % | ||||||||
Construction and development (2) | 37,190 | 3 | % | 29,263 | 3 | % | ||||||||||
Other (3) | 226,252 | 16 | % | 211,778 | 17 | % | ||||||||||
Total commercial | 554,734 | 40 | % | 507,711 | 41 | % | ||||||||||
Residential real estate: | ||||||||||||||||
Mortgages (4) | 565,680 | 40 | % | 494,720 | 40 | % | ||||||||||
Homeowner construction | 17,028 | 2 | % | 18,975 | 1 | % | ||||||||||
Total residential real estate | 582,708 | 42 | % | 513,695 | 41 | % | ||||||||||
Consumer | ||||||||||||||||
Home equity lines | 161,100 | 11 | % | 155,001 | 12 | % | ||||||||||
Home equity loans | 72,288 | 5 | % | 54,297 | 4 | % | ||||||||||
Other (5) | 31,078 | 2 | % | 18,972 | 2 | % | ||||||||||
Total consumer | 264,466 | 18 | % | 228,270 | 18 | % | ||||||||||
Total loans (6) | $ | 1,401,908 | 100 | % | $ | 1,249,676 | 100 | % | ||||||||
(1) | Amortizing mortgages, primarily secured by income producing property. | |
(2) | Loans for construction of residential and commercial properties and for land development. | |
(3) | Loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate. | |
(4) | A substantial portion of these loans is used as qualified collateral for FHLB borrowings (See Note 12 for additional discussion of FHLB borrowings). | |
(5) | Fixed rate home equity loans and other consumer installment loans. | |
(6) | Net of unamortized loan origination fees, net of costs, totaling $373 thousand and $507 thousand at December 31, 2005 and December 31, 2004, respectively. Also includes $753 thousand and $729 thousand of premium, net of discount, on purchased loans at December 31, 2005 and December 31, 2004, respectively. |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Impaired loans requiring an allowance | $ | 332 | $ | 589 | ||||
Impaired loans not requiring an allowance | 686 | 2,888 | ||||||
Total recorded investment in impaired loans | $ | 1,018 | $ | 3,477 | ||||
(Dollars in thousands) | ||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Average recorded investment in impaired loans | $ | 1,076 | $ | 3,300 | $ | 2,274 | ||||||
Interest income recognized on impaired loans | $ | 94 | $ | 222 | $ | 111 | ||||||
(Dollars in thousands) | Loan | |||||||||||
Servicing | Valuation | |||||||||||
Rights | Allowance | Total | ||||||||||
Balance at December 31, 2002 | $ | 1,259 | $ | (497 | ) | $ | 762 | |||||
Loan servicing rights capitalized | 302 | — | 302 | |||||||||
Amortization (1) | (261 | ) | — | (261 | ) | |||||||
Increase in impairment reserve (2) | — | (82 | ) | (82 | ) | |||||||
Balance at December 31, 2003 | 1,300 | (579 | ) | 721 | ||||||||
Loan servicing rights capitalized | 487 | — | 487 | |||||||||
Amortization (1) | (311 | ) | — | (311 | ) | |||||||
Direct write-down | (146 | ) | 146 | — | ||||||||
Decrease in impairment reserve (2) | — | 102 | 102 | |||||||||
Balance at December 31, 2004 | 1,330 | (331 | ) | 999 | ||||||||
Loan servicing rights capitalized | 391 | — | 391 | |||||||||
Amortization (1) | (375 | ) | — | (375 | ) | |||||||
Decrease in impairment reserve (2) | — | 71 | 71 | |||||||||
Balance at December 31, 2005 | $ | 1,346 | $ | (260 | ) | $ | 1,086 | |||||
(1) | Amortization expense is charged against loan servicing fee income. | |
(2) | (Increases) and decreases in the impairment reserve are recorded as (reductions) and additions to loan servicing fee income. |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||
Years ending December 31: | 2006 | $ | 267 | |||
2007 | 217 | |||||
2008 | 175 | |||||
2009 | 141 | |||||
2010 | 113 |
(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Residential mortgages | $ | 66,533 | $ | 63,709 | ||||
Commercial loans | 35,705 | 29,316 | ||||||
Total | $ | 102,238 | $ | 93,025 | ||||
(Dollars in thousands) | ||||
Balance at beginning of year | $ | 18,042 | ||
Additions | 12,045 | |||
Reductions | (12,718 | ) | ||
Balance at end of year | $ | 17,369 | ||
(Dollars in thousands) | ||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Balance at beginning of year | $ | 16,771 | $ | 15,914 | $ | 15,487 | ||||||
Reclassification of allowance on off-balance sheet exposures | (250 | ) | — | — | ||||||||
Provision charged to expense | 1,200 | 610 | 460 | |||||||||
Recoveries of loans previously charged off | 566 | 814 | 261 | |||||||||
Loans charged off | (369 | ) | (567 | ) | (294 | ) | ||||||
Balance at end of year | $ | 17,918 | $ | 16,771 | $ | 15,914 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Land and improvements | $ | 4,026 | $ | 4,014 | ||||
Premises and improvements | 28,921 | 27,956 | ||||||
Furniture, fixtures and equipment | 20,634 | 19,145 | ||||||
53,581 | 51,115 | |||||||
Less accumulated depreciation | 29,844 | 26,867 | ||||||
Total premises and equipment, net | $ | 23,737 | $ | 24,248 | ||||
Wealth | ||||||||||||
(Dollars in thousands) | Commercial | Management | ||||||||||
Banking | Service | |||||||||||
Segment | Segment | Total | ||||||||||
Balance at December 31, 2004 | $ | 22,591 | $ | — | $ | 22,591 | ||||||
Acquisition | — | 17,372 | 17,372 | |||||||||
Balance at December 31, 2005 | $ | 22,591 | $ | 17,372 | $ | 39,963 | ||||||
(Dollars in thousands) | Non-compete Agreements | |||||||||||||||||||
Core Deposit | Advisory | Weston | ||||||||||||||||||
Intangible | Contracts | Financial | Other | Total | ||||||||||||||||
Balance at December 31, 2003 | $ | 1,574 | $ | — | $ | — | $ | 379 | $ | 1,953 | ||||||||||
Amortization | 360 | — | — | 284 | 644 | |||||||||||||||
Balance at December 31, 2004 | 1,214 | — | — | 95 | 1,309 | |||||||||||||||
Acquisition | — | 13,657 | 295 | — | 13,952 | |||||||||||||||
Amortization | 303 | 437 | 17 | 95 | 852 | |||||||||||||||
Balance at December 31, 2005 | $ | 911 | $ | 13,220 | $ | 278 | $ | — | $ | 14,409 | ||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||||||||||
Core | Advisory | Non-compete | ||||||||||||||
Estimated amortization expense | Deposits | Contracts | Agreements | Total | ||||||||||||
2006 | $ | 261 | $ | 1,283 | $ | 49 | $ | 1,593 | ||||||||
2007 | 140 | 1,194 | 49 | 1,383 | ||||||||||||
2008 | 120 | 1,111 | 49 | 1,280 | ||||||||||||
2009 | 120 | 1,040 | 49 | 1,209 | ||||||||||||
2010 | 120 | 922 | 49 | 1,091 |
(Dollars in thousands) | ||||||||||||||||
Core | Advisory | Non-compete | ||||||||||||||
Deposits | Contracts | Agreements | Total | |||||||||||||
December 31, 2005: | ||||||||||||||||
Gross carrying amount | $ | 2,997 | $ | 13,657 | $ | 1,147 | $ | 17,801 | ||||||||
Accumulated amortization | 2,086 | 437 | 869 | 3,392 | ||||||||||||
Net amount | $ | 911 | $ | 13,220 | $ | 278 | $ | 14,409 | ||||||||
December 31, 2004: | ||||||||||||||||
Gross carrying amount | $ | 2,997 | $ | — | $ | 852 | $ | 3,837 | ||||||||
Accumulated amortization | 1,783 | — | 757 | 2,528 | ||||||||||||
Net amount | $ | 1,214 | $ | — | $ | 95 | $ | 1,309 | ||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Financial instruments whose contract amounts represent credit risk: | ||||||||
Commitments to extend credit: | ||||||||
Commercial loans | $ | 105,971 | $ | 87,249 | ||||
Home equity lines | 174,073 | 150,175 | ||||||
Other loans | 17,271 | 20,870 | ||||||
Standby letters of credit | 10,986 | 9,737 | ||||||
Financial instruments whose notional amounts exceed the amount of credit risk: | ||||||||
Forward loan commitments: | ||||||||
Commitments to originate fixed rate mortgage loans to be sold | 2,188 | 2,846 | ||||||
Commitments to sell fixed rate mortgage loans | 2,626 | 3,947 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||
Years ending December 31: | 2006 | $ | 449,163 | |||
2007 | 134,081 | |||||
2008 | 139,702 | |||||
2009 | 70,826 | |||||
2010 | 28,527 | |||||
2011 and thereafter | 6,426 | |||||
Balance at December 31, 2005 | $ | 828,725 | ||||
(Dollars in thousands) | ||||||
Maturing: | January 1, 2006 to March 31, 2006 | $ | 91,344 | |||
April 1, 2006 to June 30, 2006 | 55,873 | |||||
July 1, 2006 to December 31, 2006 | 54,975 | |||||
January 1, 2007 and beyond | 222,393 | |||||
Balance at December 31, 2005 | $ | 424,585 | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | December 31, 2005 | December 31, 2004 | ||||||||||||||||||||||
Scheduled | Redeemed at | Weighted | Scheduled | Redeemed at | Weighted | |||||||||||||||||||
Maturity | Call Date (1) | Average Rate (2) | Maturity | Call Date (1) | Average Rate (2) | |||||||||||||||||||
2006 | $ | 152,437 | $ | 202,937 | 3.43 | % | $ | 222,137 | $ | 272,637 | 2.52 | % | ||||||||||||
2007 | 109,970 | 119,970 | 3.51 | % | 106,810 | 111,810 | 3.02 | % | ||||||||||||||||
2008 | 107,508 | 107,508 | 3.72 | % | 102,313 | 112,313 | 3.48 | % | ||||||||||||||||
2009 | 81,160 | 69,160 | 4.17 | % | 90,796 | 90,796 | 3.64 | % | ||||||||||||||||
2010 | 28,395 | 13,895 | 5.51 | % | 79,513 | 67,513 | 4.21 | % | ||||||||||||||||
2011 and after | 65,853 | 31,853 | 4.59 | % | 71,179 | 17,679 | 4.90 | % | ||||||||||||||||
$ | 545,323 | $ | 545,323 | $ | 672,748 | $ | 672,748 | |||||||||||||||||
(1) | Callable FHLB advances are shown in the respective periods assuming that the callable debt is redeemed at the call date while all other advances are shown in the periods corresponding to their scheduled maturity date. | |
(2) | Weighted average rate based on scheduled maturity dates. |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Treasury, Tax and Loan demand note balance | $ | 3,794 | $ | 2,835 | ||||
Deferred acquisition obligations | 5,469 | — | ||||||
Other | 511 | 582 | ||||||
Other borrowings | $ | 9,774 | $ | 3,417 | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | Qualified | Non-Qualified | ||||||||||||||
Pension Plan | Retirement Plans | |||||||||||||||
At December 31, | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Change in Benefit Obligation: | ||||||||||||||||
Benefit obligation at beginning of period | $ | 25,777 | $ | 22,785 | $ | 7,396 | $ | 6,538 | ||||||||
Service cost | 1,871 | 1,592 | 311 | 292 | ||||||||||||
Interest cost | 1,522 | 1,367 | 436 | 390 | ||||||||||||
Amendments | (552 | ) | — | (121 | ) | — | ||||||||||
Actuarial loss (gain) | 2,708 | 920 | 938 | 497 | ||||||||||||
Benefits paid | (805 | ) | (777 | ) | (332 | ) | (321 | ) | ||||||||
Administrative expenses | (105 | ) | (110 | ) | — | — | ||||||||||
Benefit obligation at end of period | $ | 30,416 | $ | 25,777 | $ | 8,628 | $ | 7,396 | ||||||||
Change in Plan Assets: | ||||||||||||||||
Fair value of plan assets at beginning of period | $ | 21,301 | $ | 18,818 | $ | — | $ | — | ||||||||
Actual return on plan assets | 1,532 | 1,870 | — | — | ||||||||||||
Employer contribution | 1,300 | 1,500 | 332 | 321 | ||||||||||||
Benefits paid | (805 | ) | (777 | ) | (332 | ) | (321 | ) | ||||||||
Administrative expenses | (105 | ) | (110 | ) | — | — | ||||||||||
Fair value of plan assets at end of period | $ | 23,223 | $ | 21,301 | $ | — | $ | — | ||||||||
Funded status | $ | (7,194 | ) | $ | (4,476 | ) | $ | (8,628 | ) | $ | (7,396 | ) | ||||
Unrecognized transition asset | (13 | ) | (19 | ) | — | — | ||||||||||
Unrecognized prior service (benefit) cost | (459 | ) | 122 | 328 | 525 | |||||||||||
Unrecognized net actuarial loss | 5,790 | 3,051 | 2,577 | 1,770 | ||||||||||||
Net amount recognized | $ | (1,876 | ) | $ | (1,322 | ) | $ | (5,723 | ) | $ | (5,101 | ) | ||||
(Dollars in thousands) | Qualified | Non-Qualified | ||||||||||||||
Pension Plan | Retirement Plans | |||||||||||||||
December 31, | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Accrued benefit cost | $ | (1,876 | ) | $ | (1,322 | ) | $ | (6,683 | ) | $ | (5,802 | ) | ||||
Intangible asset | — | — | 51 | 250 | ||||||||||||
Deferred tax asset | — | — | 318 | 158 | ||||||||||||
Accumulated other comprehensive income | — | — | 591 | 293 | ||||||||||||
Net amount recognized | $ | (1,876 | ) | $ | (1,322 | ) | $ | (5,723 | ) | $ | (5,101 | ) | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | Non-Qualified | |||||||
Retirement Plans | ||||||||
December 31, | 2005 | 2004 | ||||||
Projected benefit obligation | $ | 8,628 | $ | 7,396 | ||||
Accumulated benefit obligation | 6,684 | 5,802 | ||||||
Fair value of plan assets | — | — |
(Dollars in thousands) | Qualified | Non-Qualified | ||||||||||||||||||||||
Pension Plan | Retirement Plans | |||||||||||||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 | ||||||||||||||||||
Service cost | $ | 1,871 | $ | 1,592 | $ | 1,273 | $ | 311 | $ | 292 | $ | 184 | ||||||||||||
Interest cost | 1,522 | 1,367 | 1,226 | 436 | 390 | 369 | ||||||||||||||||||
Expected return on plan assets | (1,686 | ) | (1,564 | ) | (1,416 | ) | — | — | — | |||||||||||||||
Amortization of transition asset | (6 | ) | (6 | ) | (6 | ) | — | — | — | |||||||||||||||
Amortization of prior service cost | 30 | 30 | 33 | 76 | 76 | 111 | ||||||||||||||||||
Recognized net actuarial (gain) loss | 123 | 37 | — | 131 | 63 | 28 | ||||||||||||||||||
Net periodic benefit cost | $ | 1,854 | $ | 1,456 | $ | 1,110 | $ | 954 | $ | 821 | $ | 692 | ||||||||||||
(Dollars in thousands) | Qualified | Non-Qualified | ||||||||||||||||||||||
Pension Plan | Retirement Plans | |||||||||||||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 | ||||||||||||||||||
Increase in minimum liability included in other comprehensive income | $ | — | $ | — | $ | — | $ | 297 | $ | 9 | $ | 284 |
Qualified Pension Plan | Non-Qualified Retirement Plans | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Measurement date | Sept. 30, 2005 | Sept. 30, 2004 | Sept. 30, 2005 | Sept. 30, 2004 | ||||||||||||
Discount rate | 5.50 | % | 6.00 | % | 5.50 | % | 6.00 | % | ||||||||
Rate of compensation increase | 4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % |
Qualified Pension Plan | Non-Qualified Retirement Plans | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | 2003 | |||||||||||||||||||
Measurement date | Sept. 30, 2004 | Sept. 30, 2003 | Sept. 30, 2002 | Sept. 30, 2004 | Sept. 30, 2003 | Sept. 30, 2002 | ||||||||||||||||||
Discount rate | 6.00 | % | 6.10 | % | 6.75 | % | 6.00 | % | 6.10 | % | 6.75 | % | ||||||||||||
Expected long-term return on plan assets | 8.25 | % | 8.25 | % | 8.00 | % | — | — | — | |||||||||||||||
Rate of compensation increase | 4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % | 4.25 | % |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
December 31, | 2005 | 2004 | ||||||
Asset Category: | ||||||||
Equity securities | 59.7 | % | 57.2 | % | ||||
Debt securities | 39.0 | % | 41.4 | % | ||||
Other | 1.3 | % | 1.4 | % | ||||
Total | 100.0 | % | 100.0 | % | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | Qualified | Non-Qualified | ||||||
Pension Plan | Plans | |||||||
2006 | $ | 814 | $ | 335 | ||||
2007 | 873 | 368 | ||||||
2008 | 927 | 415 | ||||||
2009 | 926 | 413 | ||||||
2010 | 1,107 | 519 | ||||||
Years 2011 - 2015 | 8,324 | 3,628 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Current tax expense: | ||||||||||||
Federal | $ | 12,106 | $ | 9,826 | $ | 9,206 | ||||||
State | 175 | 4 | 14 | |||||||||
Total current tax expense | 12,281 | 9,830 | 9,220 | |||||||||
Deferred tax benefit: | ||||||||||||
Federal | (1,261 | ) | (296 | ) | (701 | ) | ||||||
State | (35 | ) | — | — | ||||||||
Total deferred tax benefit | (1,296 | ) | (296 | ) | (701 | ) | ||||||
Total income tax expense | $ | 10,985 | $ | 9,534 | $ | 8,519 | ||||||
(Dollars in thousands) | ||||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Tax expense at Federal statutory rate | $ | 11,903 | $ | 10,627 | $ | 9,605 | ||||||
(Decrease) increase in taxes resulting from: | ||||||||||||
Tax-exempt income | (383 | ) | (305 | ) | (306 | ) | ||||||
Dividends received deduction | (240 | ) | (288 | ) | (300 | ) | ||||||
Bank-owned life insurance | (389 | ) | (411 | ) | (406 | ) | ||||||
State tax, net of Federal income tax benefit | 114 | 3 | 9 | |||||||||
Other | (20 | ) | (92 | ) | (83 | ) | ||||||
Total income tax expense | $ | 10,985 | $ | 9,534 | $ | 8,519 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
(Dollars in thousands) | ||||||||
December 31, | 2005 | 2004 | ||||||
Gross deferred tax assets: | ||||||||
Allowance for loan losses | $ | 6,257 | $ | 5,813 | ||||
Supplemental retirement benefits | 2,191 | 2,031 | ||||||
Deferred loan origination fees | 864 | 801 | ||||||
Pension | 975 | 621 | ||||||
Deferred compensation | 760 | 671 | ||||||
Securities available for sale | 341 | — | ||||||
Net operating loss carryover from acquired bank | 39 | 81 | ||||||
Other | 906 | 665 | ||||||
Gross deferred tax assets | 12,333 | 10,683 | ||||||
Gross deferred tax liabilities: | ||||||||
Securities available for sale | — | (4,226 | ) | |||||
Deferred loan origination costs | (1,758 | ) | (1,629 | ) | ||||
Premises and equipment | (683 | ) | (990 | ) | ||||
Amortization of intangibles | (5,778 | ) | (209 | ) | ||||
Other | (557 | ) | (468 | ) | ||||
Gross deferred tax liabilities | (8,776 | ) | (7,522 | ) | ||||
Net deferred tax asset | $ | 3,557 | $ | 3,161 | ||||
(Dollars in thousands) | ||||||
Years ending December 31: | 2006 | $ | 870 | |||
2007 | 636 | |||||
2008 | 333 | |||||
2009 | 299 | |||||
2010 | 85 | |||||
2011 | and thereafter | 40 | ||||
Total minimum lease payments | $ | 2,263 | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Stock Repurchase Plan
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Number | Average | Number | Average | Number | Average | |||||||||||||||||||
of | Exercise | of | Exercise | of | Exercise | |||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||
Outstanding at January 1 | 1,049,075 | $ | 17.86 | 1,133,600 | $ | 17.07 | 1,149,739 | $ | 15.61 | |||||||||||||||
Granted | 258,980 | 27.52 | 32,050 | 27.42 | 235,755 | 20.18 | ||||||||||||||||||
Exercised | (101,323 | ) | 13.42 | (110,171 | ) | 12.38 | (234,784 | ) | 12.87 | |||||||||||||||
Cancelled | (8,621 | ) | 19.22 | (6,404 | ) | 21.04 | (17,110 | ) | 19.31 | |||||||||||||||
Outstanding at December 31 | 1,198,111 | $ | 20.31 | 1,049,075 | $ | 17.86 | 1,133,600 | $ | 17.07 | |||||||||||||||
Exercisable at December 31 | 1,079,577 | $ | 20.12 | 814,113 | $ | 16.91 | 767,588 | $ | 15.74 | |||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
Range of | Number | Remaining | Exercise | Number | Exercise | |||||||||||||||
Exercise Prices | Outstanding | Contractual Life | Price | Exercisable | Price | |||||||||||||||
$9.33 to $11.58 | 56,420 | 0.9 years | $ | 10.70 | 56,420 | $ | 10.70 | |||||||||||||
$11.59 to $14.47 | 9,242 | 1.5 years | 12.38 | 9,242 | 12.38 | |||||||||||||||
$14.48 to $17.36 | 146,345 | 4.2 years | 15.37 | 146,345 | 15.37 | |||||||||||||||
$17.37 to $20.26 | 649,344 | 5.5 years | 19.08 | 586,146 | 18.98 | |||||||||||||||
$20.27 to $23.15 | 42,780 | 5.3 years | 20.92 | 18,780 | 21.31 | |||||||||||||||
$23.16 to $26.05 | 1,000 | 8.5 years | 24.90 | 333 | 24.90 | |||||||||||||||
$26.06 to $28.94 | 292,980 | 9.5 years | 27.51 | 262,311 | 27.51 | |||||||||||||||
Total | 1,198,111 | 6.1 years | $ | 20.31 | 1,079,577 | $ | 20.12 | |||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
To Be Well Capitalized | ||||||||||||||||||||||||
For Capital Adequacy | Under Prompt Corrective | |||||||||||||||||||||||
(Dollars in thousands) | Actual | Purposes | Action Provisions | |||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
As of December 31, 2005: | ||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets): | ||||||||||||||||||||||||
Corporation | $ | 147,454 | 10.51 | % | $ | 112,221 | 8.00 | % | $ | 140,277 | 10.00 | % | ||||||||||||
Bank | $ | 151,383 | 10.80 | % | $ | 112,152 | 8.00 | % | $ | 140,190 | 10.00 | % | ||||||||||||
Tier 1 Capital (to Risk-Weighted Assets): | ||||||||||||||||||||||||
Corporation | $ | 127,023 | 9.06 | % | $ | 56,111 | 4.00 | % | $ | 84,166 | 6.00 | % | ||||||||||||
Bank | $ | 130,962 | 9.34 | % | $ | 56,076 | 4.00 | % | $ | 84,114 | 6.00 | % | ||||||||||||
Tier 1 Capital (to Average Assets): (1) | ||||||||||||||||||||||||
Corporation | $ | 127,023 | 5.45 | % | $ | 93,285 | 4.00 | % | $ | 116,606 | 5.00 | % | ||||||||||||
Bank | $ | 130,962 | 5.62 | % | $ | 93,254 | 4.00 | % | $ | 116,568 | 5.00 | % | ||||||||||||
As of December 31, 2004: | ||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets): | ||||||||||||||||||||||||
Corporation | $ | 141,312 | 10.72 | % | $ | 105,453 | 8.00 | % | $ | 131,816 | 10.00 | % | ||||||||||||
Bank | $ | 139,389 | 10.57 | % | $ | 105,453 | 8.00 | % | $ | 131,816 | 10.00 | % | ||||||||||||
Tier 1 Capital (to Risk-Weighted Assets): | ||||||||||||||||||||||||
Corporation | $ | 120,622 | 9.15 | % | $ | 52,726 | 4.00 | % | $ | 79,090 | 6.00 | % | ||||||||||||
Bank | $ | 118,699 | 9.00 | % | $ | 52,726 | 4.00 | % | $ | 79,090 | 6.00 | % | ||||||||||||
Tier 1 Capital (to Average Assets): (1) | ||||||||||||||||||||||||
Corporation | $ | 120,622 | 5.35 | % | $ | 90,234 | 4.00 | % | $ | 112,792 | 5.00 | % | ||||||||||||
Bank | $ | 118,699 | 5.26 | % | $ | 90,237 | 4.00 | % | $ | 112,796 | 5.00 | % |
(1) | Leverage ratio |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Years ended December 31, | 2005 | 2004 | 2003 | ||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||||
Net income | $ | 23,024 | $ | 23,024 | $ | 20,829 | $ | 20,829 | $ | 18,923 | $ | 18,923 | |||||||||||||
Share amounts, in thousands: | |||||||||||||||||||||||||
Average outstanding | 13,315.2 | 13,315.2 | 13,227.8 | 13,227.8 | 13,114.1 | 13,114.1 | |||||||||||||||||||
Common stock equivalents | — | 311.5 | — | 314.9 | — | 279.5 | |||||||||||||||||||
Weighted average outstanding | 13,315.2 | 13,626.7 | 13,227.8 | 13,542.7 | 13,114.1 | 13,393.6 | |||||||||||||||||||
Earnings per share | $ | 1.73 | $ | 1.69 | $ | 1.57 | $ | 1.54 | $ | 1.44 | $ | 1.41 | |||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Year ended December 31, 2005 | Wealth | |||||||||||||||
Commercial | Management | Consolidated | ||||||||||||||
(Dollars in thousands) | Banking | Services | Corporate | Total | ||||||||||||
Net interest income | $ | 53,509 | $ | (60 | ) | $ | 7,207 | $ | 60,656 | |||||||
Noninterest income | 13,114 | 16,662 | 1,170 | 30,946 | ||||||||||||
Total income | 66,623 | 16,602 | 8,377 | 91,602 | ||||||||||||
Provision for loan losses | 1,200 | — | — | 1,200 | ||||||||||||
Depreciation and amortization expense | 3,076 | 904 | 264 | 4,244 | ||||||||||||
Other noninterest expenses | 33,496 | 11,085 | 7,568 | 52,149 | ||||||||||||
Total noninterest expenses | 37,772 | 12,989 | 7,832 | 57,593 | ||||||||||||
Income before income taxes | 28,851 | 4,613 | 545 | 34,009 | ||||||||||||
Income tax expense (benefit) | 10,072 | 1,725 | (812 | ) | 10,985 | |||||||||||
Net income | $ | 18,779 | $ | 2,888 | $ | 1,357 | $ | 23,024 | ||||||||
Total assets at period end | $ | 1,489,154 | $ | 32,201 | $ | 880,648 | $ | 2,402,003 | ||||||||
Expenditures for long-lived assets | 1,920 | 238 | 285 | 2,443 |
Year ended December 31, 2004 | Wealth | |||||||||||||||
Commercial | Management | Consolidated | ||||||||||||||
(Dollars in thousands) | Banking | Services | Corporate | Total | ||||||||||||
Net interest income | $ | 49,451 | $ | (62 | ) | $ | 5,052 | $ | 54,441 | |||||||
Noninterest income | 12,168 | 13,048 | 1,689 | 26,905 | ||||||||||||
Total income | 61,619 | 12,986 | 6,741 | 81,346 | ||||||||||||
Provision for loan losses | 610 | — | — | 610 | ||||||||||||
Depreciation and amortization expense | 3,192 | 434 | 277 | 3,903 | ||||||||||||
Other noninterest expenses | 31,154 | 8,398 | 6,918 | 46,470 | ||||||||||||
Total noninterest expenses | 34,956 | 8,832 | 7,195 | 50,983 | ||||||||||||
Income (loss) before income taxes | 26,663 | 4,154 | (454 | ) | 30,363 | |||||||||||
Income tax expense (benefit) | 9,295 | 1,463 | (1,223 | ) | 9,534 | |||||||||||
Net income | $ | 17,368 | $ | 2,691 | $ | 769 | $ | 20,829 | ||||||||
Total assets at period end | $ | 1,323,870 | $ | 4,566 | $ | 979,384 | $ | 2,307,820 | ||||||||
Expenditures for long-lived assets | $ | 2,095 | $ | 166 | $ | 170 | $ | 2,431 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Year ended December 31, 2003 | Wealth | |||||||||||||||
Commercial | Management | Consolidated | ||||||||||||||
(Dollars in thousands) | Banking | Services | Corporate | Total | ||||||||||||
Net interest income | $ | 46,633 | $ | (65 | ) | $ | 2,231 | $ | 48,799 | |||||||
Noninterest income | 14,196 | 10,769 | 1,770 | 26,735 | ||||||||||||
Total income | 60,829 | 10,704 | 4,001 | 75,534 | ||||||||||||
Provision for loan losses | 460 | — | — | 460 | ||||||||||||
Depreciation and amortization expense | 3,160 | 491 | 261 | 3,912 | ||||||||||||
Other noninterest expenses | 29,568 | 7,123 | 7,029 | 43,720 | ||||||||||||
Total noninterest expenses | 33,188 | 7,614 | 7,290 | 48,092 | ||||||||||||
Income (loss) before income taxes | 27,641 | 3,090 | (3,289 | ) | 27,442 | |||||||||||
Income tax expense (benefit) | 9,644 | 1,090 | (2,214 | ) | 8,519 | |||||||||||
Net income | $ | 17,997 | $ | 2,000 | $ | (1,075 | ) | $ | 18,923 | |||||||
Total assets at period end | $ | 1,042,448 | $ | 3,942 | $ | 927,417 | $ | 1,973,807 | ||||||||
Expenditures for long-lived assets | $ | 3,177 | $ | 252 | $ | 258 | $ | 3,687 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
December 31, | 2005 | 2004 | ||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||
(Dollars in thousands) | Amount | Fair Value | Amount | Fair Value | ||||||||||||
Financial Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 48,997 | $ | 48,997 | $ | 52,081 | $ | 52,081 | ||||||||
Mortgage loans held for sale | 439 | 439 | 1,095 | 1,108 | ||||||||||||
Securities available for sale | 619,234 | 619,234 | 735,666 | 735,666 | ||||||||||||
Securities held to maturity | 164,707 | 162,756 | 154,392 | 156,270 | ||||||||||||
FHLB stock | 34,966 | 34,966 | 34,373 | 34,373 | ||||||||||||
Loans, net of allowance for loan losses | 1,383,990 | 1,389,113 | 1,232,905 | 1,251,977 | ||||||||||||
Bank-owned life insurance | 30,360 | 30,360 | 29,249 | 29,249 | ||||||||||||
Financial Liabilities: | ||||||||||||||||
Noninterest bearing demand deposits | $ | 196,102 | $ | 196,102 | $ | 189,588 | $ | 189,588 | ||||||||
NOW accounts | 178,677 | 178,677 | 174,727 | 174,727 | ||||||||||||
Money market accounts | 223,255 | 223,255 | 196,775 | 196,775 | ||||||||||||
Savings accounts | 212,499 | 212,499 | 251,920 | 251,920 | ||||||||||||
Time deposits | 828,725 | 828,404 | 644,875 | 658,996 | ||||||||||||
FHLB advances | 545,323 | 539,249 | 672,748 | 683,668 | ||||||||||||
Junior subordinated debentures | 22,681 | 21,537 | — | — | ||||||||||||
Other borrowings | 9,774 | 9,774 | 3,417 | 3,417 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Balance Sheets | (Dollars in thousands) | |||||||||
December 31, | 2005 | 2004 | ||||||||
Assets: | ||||||||||
Cash on deposit with bank subsidiary | $ | 1,617 | $ | 1,931 | ||||||
Investment in subsidiaries at equity value | 185,340 | 149,928 | ||||||||
Dividends receivable from subsidiaries | 2,100 | 2,250 | ||||||||
Other assets | 59 | — | ||||||||
Total assets | $ | 189,116 | $ | 154,109 | ||||||
Liabilities: | ||||||||||
Junior subordinated debentures | $ | 22,681 | $ | — | ||||||
Other borrowings | 5,468 | — | ||||||||
Dividends payable | 2,408 | 2,257 | ||||||||
Accrued expenses and other liabilities | 113 | — | ||||||||
Total liabilities | 30,670 | 2,257 | ||||||||
Shareholders’ Equity: | ||||||||||
Common stock of $.0625 par value; authorized 30,000,000 shares in 2005 and 2004; issued 13,372,295 shares in 2005 and 13,278,685 shares in 2004 | 836 | 830 | ||||||||
Paid-in capital | 33,676 | 31,718 | ||||||||
Retained earnings | 126,735 | 113,314 | ||||||||
Unearned stock-based compensation | (898 | ) | (737 | ) | ||||||
Accumulated other comprehensive (loss) income | (1,653 | ) | 6,937 | |||||||
Treasury stock, at cost; 10,519 shares in 2005 and 9,309 shares in 2004 | (250 | ) | (210 | ) | ||||||
Total shareholders’ equity | 158,446 | 151,852 | ||||||||
Total liabilities and shareholders’ equity | $ | 189,116 | $ | 154,109 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2005 and 2004
Statements of Income | (Dollars in thousands) | |||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Income: | ||||||||||||
Dividends from subsidiaries | $ | 8,530 | $ | 9,000 | $ | 6,300 | ||||||
Expenses: | ||||||||||||
Interest on junior subordinated debentures | 458 | — | — | |||||||||
Interest on other borrowings | 82 | — | — | |||||||||
Legal and professional fees | 35 | — | — | |||||||||
Other | 6 | — | — | |||||||||
Total expenses | 581 | — | — | |||||||||
Income before income taxes | 7,949 | 9,000 | 6,300 | |||||||||
Income tax benefit | 198 | — | — | |||||||||
Income before equity in undistributed earnings of subsidiaries | 8,147 | 9,000 | 6,300 | |||||||||
Equity in undistributed earnings of subsidiaries | 14,877 | 11,829 | 12,623 | |||||||||
Net income | $ | 23,024 | $ | 20,829 | $ | 18,923 | ||||||
Statements of Cash Flows | (Dollars in thousands) | |||||||||||
Years ended December 31, | 2005 | 2004 | 2003 | |||||||||
Cash flow from operating activities: | ||||||||||||
Net income | $ | 23,024 | $ | 20,829 | $ | 18,923 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity effect of undistributed earnings of subsidiary | (14,877 | ) | (11,829 | ) | (12,623 | ) | ||||||
Decrease (increase) in dividend receivable | 150 | (450 | ) | (300 | ) | |||||||
Increase in other assets | (59 | ) | — | — | ||||||||
Increase in accrued expenses and other liabilities | 113 | — | — | |||||||||
Other, net | 82 | — | — | |||||||||
Net cash provided by operating activities | 8,433 | 8,550 | 6,000 | |||||||||
Cash flows from investing activities: | ||||||||||||
Cash paid for acquisition, including deferred acquisition obligations, net of cash acquired | (22,949 | ) | — | — | ||||||||
Net cash used in investing activities | (22,949 | ) | — | — | ||||||||
Cash flows from financing activities: | ||||||||||||
Purchase of treasury stock | (36 | ) | (125 | ) | — | |||||||
Proceeds from the issuance of common stock | 1,009 | 590 | 1,174 | |||||||||
Proceeds from the issuance of junior subordinated debentures | 22,681 | — | — | |||||||||
Cash dividends paid | (9,452 | ) | (8,863 | ) | (7,861 | ) | ||||||
Net cash provided by (used in) financing activities | 14,202 | (8,398 | ) | (6,687 | ) | |||||||
Net (decrease) increase in cash | (314 | ) | 152 | (687 | ) | |||||||
Cash at beginning of year | 1,931 | 1,779 | 2,466 | |||||||||
Cash at end of year | $ | 1,617 | $ | 1,931 | $ | 1,779 | ||||||
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ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Equity Compensation Plan Information | |||||||||||||
Number of securities | |||||||||||||
remaining available for | |||||||||||||
Number of securities to | Weighted average | future issuance under equity | |||||||||||
be issued upon exercise | exercise price of | compensation plan | |||||||||||
of outstanding options, | outstanding options, | securities (excluding | |||||||||||
Plan category | warrants and rights (1) | warrants and rights | referenced in column (a)) | ||||||||||
(a) | (b) | (c) | |||||||||||
Equity compensation plans approved by security holders (2) | 1,249,149 | (3) | $ | 20.31 | (4) | 233,276 | (5) | ||||||
Equity compensation plans not approved by security holders (6) | 13,542 | N/A | (7) | 11,458 | |||||||||
Total | 1,262,691 | $ | 20.31 | (4)(7) | 244,734 | ||||||||
(1) | Does not include any restricted stock as such shares are already reflected in the Bancorp’s outstanding shares. | |
(2) | Consists of the 1988 Plan, the 1997 Plan and the 2003 Plan. | |
(3) | Includes 51,038 restricted stock units outstanding under the 1997 Plan. | |
(4) | Does not include the effect of the restricted stock units awarded under the 1997 Plan because these units do not have an exercise price. | |
(5) | Includes up to 200,000 securities that may be issued in the form of restricted stock. | |
(6) | Consists of the Deferred Compensation Plan, which is described below. | |
(7) | Does not include information about the phantom stock units outstanding under the Deferred Compensation Plan as such units do not have any exercise price. |
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(a) | 1. | Financial Statements. The financial statements of the Corporation required in response to this Item are listed in response to Part II, Item 8 of this Annual Report on Form 10-K. | ||||
2. | Financial Statement Schedules. All schedules normally required by Article 9 of Regulation S-X and all other schedules to the consolidated financial statements of the Corporation have been omitted because the required information is either not required, not applicable, or is included in the consolidated financial statements or notes thereto. | |||||
3. | Exhibits. The following exhibits are included as part of this Form 10-K. |
Exhibit | ||
Number | ||
2.1 | Stock Purchase Agreement, dated March 18, 2005, by and between Washington Trust Bancorp, Inc., Weston Financial Group, Inc., and the shareholders of Weston Financial Group, Inc. filed as Exhibit No. 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-13091), as with the Securities and Exchange Commission on March 22, 2005. (1) | |
3.1 | Restated Articles of Incorporation of the Registrant – Filed as Exhibit 3.a to the Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the fiscal year ended December 31, 2000. (1) | |
3.2 | Amendment to Restated Articles of Incorporation – Filed as Exhibit 3.b to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002. (1) | |
3.3 | Amended and Restated By-Laws of the Registrant – Filed as Exhibit 3.c to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002. (1) | |
4.1 | Amended and Restated Agreement, between the Registrant and Mellon Investor Services LLC, dated March 1, 2002 – Filed as Exhibit 4.a to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002. (1) | |
10.1 | Supplemental Pension Benefit and Profit Sharing Plan – Filed as Exhibit 10.a to the Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the fiscal year ended December 31, 2000. (1) (2) | |
10.2 | Annual Performance Plan – Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated January 20, 2005. (1) (2) | |
10.3 | Amended and Restated Nonqualified Deferred Compensation Plan – Filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-8 (File No. 333-72277) filed with the Commission on February 12, 1999. (1) (2) | |
10.4 | Amended and Restated 1988 Stock Option Plan – Filed as Exhibit 10.d to the Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the fiscal year ended December 31, 2000. (1) (2) | |
10.5 | Vote of the Board of Directors of the Registrant, which constitutes the 1996 Directors’ Stock Plan – Filed as Exhibit 10.e to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002. (1) (2) | |
10.6 | The Registrant’s 1997 Equity Incentive Plan – Filed as Exhibit 10.f to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002. (1) (2) |
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Exhibit | ||
Number | ||
10.7 | Amendment to the Registrant’s 1997 Equity Incentive Plan — Filed as Exhibit 10.b to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000. (1) (2) | |
10.8 | Amendment to the Registrant’s Supplemental Pension Benefit and Profit Sharing Plan — Filed as Exhibit 10.j to the Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the fiscal year ended December 31, 2000. (1) (2) | |
10.9 | July 2000 Amendment to the Registrant’s Supplemental Pension Benefit and Profit Sharing Plan — Filed as Exhibit 10.k to the Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the fiscal year ended December 31, 2000. (1) (2) | |
10.10 | Amendment to the Registrant’s Nonqualified Deferred Compensation Plan — Filed as Exhibit 10.l to the Registrant’s Annual Report on Form 10-K (File No. 000-13091) for the fiscal year ended December 31, 2000. (1) (2) | |
10.11 | Supplemental Executive Retirement Plan — Filed as Exhibit 10.b to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001. (1) (2) | |
10.12 | Amendment to the Registrant’s Trust Agreement Under The Washington Trust Company’s Supplemental Pension Benefit and Profit Sharing Plan — Filed as Exhibit 10.b to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002. (1) (2) | |
10.13 | 2003 Stock Incentive Plan — Filed as Exhibit 10 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003. (1) (2) | |
10.14 | First Amendment to 2003 Stock Incentive Plan — Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated December 16, 2004. (1) (2) | |
10.15 | Amendment to the Registrant’s Nonqualified Deferred Compensation Plan — Filed as Exhibit 10.t to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. (2) | |
10.16 | Form of Executive Severance Agreement — Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated November 23, 2005. (1) (2) | |
10.17 | Form of Restricted Stock Units Certificate under the Washington Trust Bancorp, Inc. 1997 Equity Incentive Plan, as amended (employees), filed as exhibit 10.1 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.18 | Form of Nonqualified Stock Option Certificate under the Washington Trust Bancorp, Inc. 2003 Stock Incentive Plan, as amended (employees), filed as Exhibit No. 10.2 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.19 | Form of Nonqualified Stock Option Certificate under the Washington Trust Bancorp, Inc. 1997 Equity Incentive Plan, as amended (members of the Board of Directors), filed as Exhibit No. 10.3 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.20 | Form of Nonqualified Stock Option Certificate under the Washington Trust Bancorp, Inc. 1997 Equity Incentive Plan, as amended (employees), filed as Exhibit No. 10.4 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.21 | Form of Incentive Stock Option Certificate under the Washington Trust Bancorp, Inc. 1997 Equity Incentive Plan, as amended, filed as Exhibit No. 10.5 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.22 | Form of Restricted Stock Units Certificate under the Washington Trust Bancorp, Inc. 1997 Equity Incentive Plan, as amended (members of the Board of Directors), filed as Exhibit No. 10.6 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.23 | Form of Restricted Stock Agreement under the Washington Trust Bancorp, Inc. 1997 Equity Incentive Plan, as amended, filed as Exhibit No. 10.7 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) |
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Exhibit | ||
Number | ||
10.24 | Form of Nonqualified Stock Option Certificate under the Washington Trust Bancorp, Inc. 2003 Stock Incentive Plan, as amended (members of the Board of Directors), filed as Exhibit No. 10.8 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.25 | Form of Incentive Stock Option Certificate under the Washington Trust Bancorp, Inc. 2003 Stock Incentive Plan, as amended, filed as Exhibit No. 10.9 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on June 17, 2005. (1) | |
10.26 | Compensatory agreement with Galan G. Daukas, dated July 28, 2005, filed as Exhibit 10.1 to the Bancorp’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. (1) (2) | |
10.27 | Amended and Restated Declaration of Trust of WT Capital Trust I dated August 29, 2005, by and among Wilmington Trust Company, as Delaware Trustee and Institutional Trustee, Washington Trust Bancorp, Inc., as Sponsor, and the Administrators listed therein, filed as exhibit 10.1 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.28 | Indenture dated as of August 29, 2005, between Washington Trust Bancorp, Inc., as Issuer, and Wilmington Trust Company, as Trustee, filed as exhibit 10.2 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.29 | Guaranty Agreement dated August 29, 2005, by and between Washington Trust Bancorp, Inc. and Wilmington Trust Company, filed as exhibit 10.3 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.30 | Certificate Evidencing Fixed/Floating Rate Capital Securities of WT Capital Trust I dated August 29, 2005, filed as exhibit 10.4 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.31 | Fixed/Floating Rate Junior Subordinated Deferrable Interest Debenture of Washington Trust Bancorp, Inc. dated August 29, 2005, filed as exhibit 10.5 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.32 | Amended and Restated Declaration of Trust of WT Capital Trust II dated August 29, 2005, by and among Wilmington Trust Company, as Delaware Trustee and Institutional Trustee, Washington Trust Bancorp, Inc., as Sponsor, and the Administrators listed therein, filed as exhibit 10.6 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.33 | Indenture dated as of August 29, 2005, between Washington Trust Bancorp, Inc., as Issuer, and Wilmington Trust Company, as Trustee, filed as exhibit 10.7 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.34 | Guaranty Agreement dated August 29, 2005, by and between Washington Trust Bancorp, Inc. and Wilmington Trust Company, filed as exhibit 10.8 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.35 | Certificate Evidencing Capital Securities of WT Capital Trust II (Number of Capital Securities – 10,000) dated August 29, 2005, filed as exhibit 10.9 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.36 | Certificate Evidencing Capital Securities of WT Capital Trust II (Number of Capital Securities – 4,000) dated August 29, 2005, filed as exhibit 10.10 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
10.37 | Fixed/Floating Rate Junior Subordinated Debt Security due 2035 of Washington Trust Bancorp, Inc. dated August 29, 2005, filed as exhibit 10.11 to the Bancorp’s Current Report on Form 8-K (File No. 0-13091), as filed with the Securities and Exchange Commission on September 1, 2005. (1) | |
14.1 | Code of Ethics — Filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K dated December 16, 2004. (1) | |
21.1 | Subsidiaries of the Registrant — Filed herewith. | |
23.1 | Consent of Independent Accountants — Filed herewith. | |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — Filed herewith. |
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Exhibit | ||
Number | ||
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — Filed herewith. | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Filed herewith. (3) |
(1) | Not filed herewith. In accordance with Rule 12b-32 promulgated pursuant to the Exchange Act, reference is made to the documents previously filed with the SEC, which are incorporated by reference herein. | |
(2) | Management contract or compensatory plan or arrangement. | |
(3) | These certifications are not “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing under the Securities Act or the Exchange Act. |
(c) Financial Statement Schedules. None.
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WASHINGTON TRUST BANCORP, INC. | ||||||
(Registrant) | ||||||
Date: March 15, 2006 | By | /s/ John C. Warren | ||||
John C. Warren | ||||||
Chairman, Chief Executive Officer and Director | ||||||
(principal executive officer) | ||||||
Date: March 15, 2006 | By | /s/ David V. Devault | ||||
David V. Devault | ||||||
Executive Vice President, Secretary, | ||||||
Treasurer and Chief Financial Officer | ||||||
(principal financial and principal accounting officer) |
Date: March 15, 2006 | /s/ Gary P. Bennett | |||
Gary P. Bennett, Director | ||||
Date: March 15, 2006 | /s/ Steven J. Crandall | |||
Steven J. Crandall, Director | ||||
Date: March 15, 2006 | /s/ Larry J. Hirsch | |||
Larry J. Hirsch, Director | ||||
Date: March 15, 2006 | /s/ Barry G. Hittner | |||
Barry G. Hittner, Director | ||||
Date: March 15, 2006 | /s/ Katherine W. Hoxsie | |||
Katherine W. Hoxsie, Director | ||||
Date: March 15, 2006 | /s/ Mary E. Kennard | |||
Mary E. Kennard, Director | ||||
Date: March 15, 2006 | /s/ Edward M. Mazze | |||
Edward M. Mazze, Director | ||||
Date: March 15, 2006 | /s/ Kathleen McKeough | |||
Kathleen McKeough, Director |
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Date: March 15, 2006 | /s/ Victor J. Orsinger II | |||
Victor J. Orsinger II, Director | ||||
Date: March 15, 2006 | /s/ H. Douglas Randall III | |||
H. Douglas Randall, III, Director | ||||
Date: March 15, 2006 | /s/ Joyce Olson Resnikoff | |||
Joyce Olson Resnikoff, Director | ||||
Date: March 15, 2006 | /s/ Patrick J. Shanahan, Jr. | |||
Patrick J. Shanahan, Jr., Director | ||||
Date: March 15, 2006 | /s/ James P. Sullivan | |||
James P. Sullivan, Director | ||||
Date: March 15, 2006 | /s/ Neil H. Thorp | |||
Neil H. Thorp, Director | ||||
Date: March 15, 2006 | /s/ John F. Treanor | |||
John F. Treanor, Director | ||||
Date: March 15, 2006 | /s/ John C. Warren | |||
John C. Warren, Director |
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