| FOR IMMEDIATE RELEASE: | CONTACT: | Robert K. Chapman, |
| APRIL 22, 2011 | President and Chief Executive Officer | |
| United Bancorp, Inc. | ||
| 734-214-3801 |
UNITED BANCORP, INC. ANNOUNCES
UNAUDITED FIRST QUARTER 2011 RESULTS
Company reports profitable quarter
Continued improvement in credit quality trends
Continued strong core earnings
ANN ARBOR, MI – United Bancorp, Inc. (UBMI.ob) reported consolidated net income of $359,000, or $0.01 per share of common stock, for the first quarter of 2011, compared to a consolidated net loss of $809,000, or $0.21 per share, for the first quarter of 2010 and a consolidated net loss for the fourth quarter of 2010 of $427,000, or $0.11 per share.
Robert K. Chapman, President and Chief Executive Officer of United Bancorp, Inc. (“United” or the “Company”), credited United’s ongoing proactive efforts to resolve nonperforming loans, improving economic conditions and the Company’s diverse income stream for its positive earnings for the first quarter of 2011 and the favorable trends of recent quarters. In addition, Chapman noted that the Company’s capital ratios remained strong, and the Company and its subsidiary bank continued to exceed the capital levels required by its regulators.
United has exhibited positive trends in several key measures of the Company’s credit quality. The Company’s provision for loan losses of $2.8 million for the first quarter of 2011 was at its lowest level since the second quarter of 2008 and continued its trend of covering net charge-offs. United’s allowance for loan losses coverage of nonperforming loans at March 31, 2011 surpassed 90% for the first time since 2007. Nonperforming loans and nonperforming assets at March 31, 2011 were at their lowest levels since the second quarter of 2009, and other credit quality measures also continued to show improvement.
Mr. Chapman noted that the Company’s core earnings, as measured by its pre-tax, pre-provision return on average assets, remained strong. He indicated that United’s four business lines -- banking, wealth management, mortgage and structured finance – continued to make solid contributions to the Company’s profitability.
Results of Operations
The Company achieved consolidated net income of $359,000 in the first quarter of 2011, as a result of strong pre-tax, pre-provision income and reduced levels of provision to the Company’s allowance for loan losses. This compared to a consolidated net loss of $809,000 for the first quarter of 2010.
Net interest margin declined from 3.69% for the quarter ended March 31, 2010 to 3.62% for the quarter ended March 31, 2011. For the first three months of 2011, net interest income of $7.4 million was down 4.0% compared to the same period of 2010. Noninterest income for the most
1
recent quarter of $3.9 million improved by 21.7% compared to the first quarter of 2010, as Wealth Management revenue and income from loan sales and servicing provided the biggest share of the increase. Noninterest income represented 34.7% of the Company’s net revenues for the first quarter of 2011, compared to 29.5% for the same period of 2010.
Total noninterest expense of $8.2 million for the first quarter of 2011 was substantially unchanged from the fourth quarter of 2010, but was up 7.3% over the first three months of 2010. Contributing to the increase were higher expenses associated with salaries and employee benefits and professional fees and expenses related to nonperforming loans. Salaries and employee benefit costs for the three months ended March 31, 2011 reflected, in part, the reinstatement of the Company’s 401(k) match effective January 1, 2011, and commission costs relating to an increased volume of loans originated and sold on the secondary market during the quarter.
The Company’s provision for loan losses of $2.8 million in the first quarter of 2011 was down from $4.8 million for the first quarter of 2010 and $4.9 million for the fourth quarter of 2010. Return on average assets (“ROA”) for the first quarter of 2011 was 0.17%, compared to -0.36% for the first quarter of 2010. Return on average shareholders’ equity (“ROE”) for the most recent quarter was 1.57%, compared to -4.05% for the same quarter of 2010.
Balance Sheet
Total consolidated assets of the Company were $885.5 million at March 31, 2011, up 2.8% from $861.7 million at December 31, 2010, and down 1.7% from $900.8 million at March 31, 2010. Gross portfolio loans of $578.1 million at March 31, 2011 have declined in the first three months of 2011 and over the most recent twelve months as a result of slowing loan demand, charge-offs and the Company’s effective use of loan sales and servicing to mitigate credit and interest rate risk. The Company generally sells its fixed rate long-term residential mortgages on the secondary market, and retains adjustable rate mortgages in its loan portfolio. While the Company’s portfolio loans have declined by $55.9 million, or 8.8%, since March 31, 2010, the balance of loans serviced for others has increased by $138.2 million, or 25.4%, during the same time period.
The Company continued to hold elevated levels of investments, federal funds sold and cash equivalents in order to protect the balance sheet during this prolonged period of economic uncertainty. United’s balances in federal funds sold and other short-term investments were $126.2 million at March 31, 2011, compared to $95.6 million at December 31, 2010 and $115.0 million at March 31, 2010. Securities available for sale of $140.6 million at March 31, 2011 were up 12.9% from December 31, 2010 and were up 45.8% from March 31, 2010 levels.
Total deposits of $760.2 million at March 31, 2011 were up $26.2 million, or 3.6%, from $734.0 million at December 31, 2010, with substantially all of the increase in non-interest bearing deposit balances, which accounted for 17.7% of total deposits at March 31, 2011. The majority of the Bank’s deposits are derived from core client sources, relating to long-term relationships with local individual, business and public clients. As a result of its strong core funding, the Company’s cost of interest bearing deposits was 0.92% for the first quarter of 2011, down from 1.29% for the first quarter of 2010.
2
Asset Quality
Within the Company’s loan portfolio, $27.8 million of loans were classified as nonperforming at March 31, 2011, compared to $29.2 million as of December 31, 2010. Total nonperforming loans declined by $1.5 million, or 5.0%, since December 31, 2010 and $3.9 million, or 12.2%, since March 31, 2010. Total nonperforming loans as a percent of total portfolio loans improved from 4.99% at March 31, 2010 and 4.94% at the end of 2010 to 4.80% at March 31, 2011. For purposes of this presentation, nonperforming loans consist of nonaccrual loans and accruing loans that are past due 90 days or more, and exclude accruing restructured loans. Balances of accruing restructured loans at March 31, 2011 and 2010 were $18.5 million and $17.5 million, respectively.
The Company’s ratio of allowance for loan losses to total portfolio loans at March 31, 2011 was 4.36%, and covered 90.7% of nonperforming loans, compared to 3.37% and 67.5%, respectively, at March 31, 2010. The Company’s allowance for loan losses of $25.2 million at March 31, 2011 increased by $3.8 million from March 31, 2010. The Company’s provision for loan losses for the first quarter of 2011 continued its trend of covering net charge-offs. Net charge-offs during the first quarter of 2011 were $2.8 million, down from $3.5 million for the first quarter of 2010. United’s allowance coverage of nonperforming loans improved from 67.5% at March 31, 2010 and 86.0% at December 31, 2010 to 90.7% at March 31, 2011.
Capital Management
The Company has contributed a total of $11.5 million of the proceeds of its fourth quarter 2010 public stock offering to the capital of United Bank & Trust (the “Bank”) to increase the Bank’s capital and regulatory capital ratios. As a result of the additional capital, the Bank continues to be in compliance with the capital requirements of its Memorandum of Understanding with the FDIC and the Michigan Office of Financial and Insurance Regulation. At March 31, 2011, the Bank’s Tier 1 leverage capital ratio was 9.17%, and its ratio of total capital to risk-weighted assets was 15.27%.
About United Bancorp, Inc.
United Bancorp, Inc. is a community-based financial services company that provides financial solutions to the markets and clients that we serve, based on their unique circumstances and needs. We provide our services through the Bank’s system of sixteen banking offices, one trust office, and 20 automated teller machines, located in Washtenaw, Lenawee and Monroe Counties, Michigan. For more information, visit the company’s website at www.ubat.com.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and United Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as “improve,” “continue,” “ongoing,” “proactive, “ “trend” and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These
3
statements include, among others, statements related to credit quality trends and measures, future levels of nonperforming loans and nonperforming assets and economic trends.
Management’s determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including mortgage servicing rights and deferred tax assets) and other real estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated or that other real estate owned can be sold at its carrying value. Our ability to improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and on United Bancorp, Inc., specifically, are also inherently uncertain. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. United Bancorp, Inc. undertakes no obligation to update, clarify or revise forward-looking statements to reflect developments that occur or information obtained after the date of this report.
Risk factors include, but are not limited to, the risk factors described in “Item 1A – Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2010. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
Non-GAAP Financial Information
This press release includes disclosures about our pre-tax, pre-provision income and return on average assets. These disclosures are non-GAAP financial measures. For additional information about our pre-tax, pre-provision income and return on average assets, please see the unaudited consolidated financial statements that follow.
Unaudited Consolidated Financial Statements Follow.
4
| United Bancorp, Inc. and Subsidiary | ||||||||||||||||||||||||||||
| Comparative Consolidated Balance Sheet Data (Unaudited) | ||||||||||||||||||||||||||||
| Dollars in thousands | Mar. 31, | Dec. 31, | Change | Mar. 31, | Change | |||||||||||||||||||||||
| Period-end Balance Sheet | 2011 | 2010 | Dollars | Percent | 2010 | Dollars | Percent | |||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||
| Cash and due from banks | $ | 11,758 | $ | 10,623 | $ | 1,135 | 10.7 | % | $ | 11,796 | $ | (38 | ) | -0.3 | % | |||||||||||||
| Interest bearing bal. with banks | 126,227 | 95,599 | 30,628 | 32.0 | % | 114,986 | 11,241 | 9.8 | % | |||||||||||||||||||
| Federal funds sold | - | - | - | 0.0 | % | - | - | 0.0 | % | |||||||||||||||||||
| Total cash & cash equivalents | 137,985 | 106,222 | 31,763 | 29.9 | % | 126,782 | 11,203 | 8.8 | % | |||||||||||||||||||
| Securities available for sale | 140,635 | 124,544 | 16,091 | 12.9 | % | 96,444 | 44,191 | 45.8 | % | |||||||||||||||||||
| FHLB Stock | 2,788 | 2,788 | - | 0.0 | % | 2,992 | (204 | ) | -6.8 | % | ||||||||||||||||||
| Loans held for sale | 519 | 10,289 | (9,770 | ) | -95.0 | % | 10,231 | (9,712 | ) | -94.9 | % | |||||||||||||||||
| Portfolio loans | ||||||||||||||||||||||||||||
| Personal | 108,072 | 108,544 | (472 | ) | -0.4 | % | 111,238 | (3,166 | ) | -2.8 | % | |||||||||||||||||
| Business | 379,460 | 392,577 | (13,117 | ) | -3.3 | % | 431,055 | (51,595 | ) | -12.0 | % | |||||||||||||||||
| Residential mortgage | 90,579 | 90,864 | (285 | ) | -0.3 | % | 91,721 | (1,142 | ) | -1.2 | % | |||||||||||||||||
| Total portfolio loans | 578,111 | 591,985 | (13,874 | ) | -2.3 | % | 634,014 | (55,903 | ) | -8.8 | % | |||||||||||||||||
| Allowance for loan losses | 25,194 | 25,163 | 31 | 0.1 | % | 21,351 | 3,843 | 18.0 | % | |||||||||||||||||||
| Net loans | 552,917 | 566,822 | (13,905 | ) | -2.5 | % | 612,663 | (59,746 | ) | -9.8 | % | |||||||||||||||||
| Premises and equipment, net | 11,062 | 11,241 | (179 | ) | -1.6 | % | 12,024 | (962 | ) | -8.0 | % | |||||||||||||||||
| Bank owned life insurance | 13,496 | 13,391 | 105 | 0.8 | % | 13,052 | 444 | 3.4 | % | |||||||||||||||||||
| Other assets | 26,074 | 26,413 | (339 | ) | -1.3 | % | 26,602 | (528 | ) | -2.0 | % | |||||||||||||||||
| Total Assets | $ | 885,476 | $ | 861,710 | $ | 23,766 | 2.8 | % | $ | 900,790 | $ | (15,314 | ) | -1.7 | % | |||||||||||||
| Liabilities | ||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||
| Non-interest bearing | $ | 134,471 | $ | 113,206 | $ | 21,265 | 18.8 | % | $ | 101,841 | $ | 32,630 | 32.0 | % | ||||||||||||||
| Interest bearing | 625,762 | 620,792 | 4,970 | 0.8 | % | 680,095 | (54,333 | ) | -8.0 | % | ||||||||||||||||||
| Total deposits | 760,233 | 733,998 | 26,235 | 3.6 | % | 781,936 | (21,703 | ) | -2.8 | % | ||||||||||||||||||
| Short term borrowings | - | 1,234 | (1,234 | ) | -100.0 | % | - | - | 100.0 | % | ||||||||||||||||||
| FHLB advances outstanding | 29,321 | 30,321 | (1,000 | ) | -3.3 | % | 35,598 | (6,277 | ) | -17.6 | % | |||||||||||||||||
| Other liabilities | 3,091 | 3,453 | (362 | ) | -10.5 | % | 3,427 | (336 | ) | -9.8 | % | |||||||||||||||||
| Total Liabilities | 792,645 | 769,006 | 23,639 | 3.1 | % | 820,961 | (28,316 | ) | -3.4 | % | ||||||||||||||||||
| Shareholders' Equity | 92,831 | 92,704 | 127 | 0.1 | % | 79,829 | 13,002 | 16.3 | % | |||||||||||||||||||
| Total Liabilities and Equity | $ | 885,476 | $ | 861,710 | $ | 23,766 | 2.8 | % | $ | 900,790 | $ | (15,314 | ) | -1.7 | % | |||||||||||||
| 1st Qtr | 4th Qtr | 1st Qtr | ||||||||||||||||||||||||||
| Average Balance Data | 2011 | 2010 | % Change | 2010 | % Change | |||||||||||||||||||||||
| Total loans | $ | 589,974 | $ | 612,534 | -3.7 | % | $ | 654,936 | -9.9 | % | ||||||||||||||||||
| Earning assets | 841,824 | 818,646 | 2.8 | % | 865,738 | -2.8 | % | |||||||||||||||||||||
| Total assets | 879,695 | 863,555 | 1.9 | % | 909,196 | -3.2 | % | |||||||||||||||||||||
| Deposits | 752,724 | 747,188 | 0.7 | % | 787,294 | -4.4 | % | |||||||||||||||||||||
| Shareholders' Equity | 92,824 | 79,808 | 16.3 | % | 81,072 | 14.5 | % | |||||||||||||||||||||
| Asset Quality | ||||||||||||||||||||||||||||
| Net charge offs | $ | 2,769 | $ | 3,258 | -15.0 | % | $ | 3,469 | -20.2 | % | ||||||||||||||||||
| Non-accrual loans | 25,451 | 28,661 | -11.2 | % | 29,712 | -14.3 | % | |||||||||||||||||||||
| Non-performing loans | 27,777 | 29,244 | -5.0 | % | 31,642 | -12.2 | % | |||||||||||||||||||||
| Non-performing assets | 32,418 | 33,548 | -3.4 | % | 34,995 | -7.4 | % | |||||||||||||||||||||
| Nonperforming loans/total loans | 4.80 | % | 4.94 | % | -2.7 | % | 4.99 | % | -3.7 | % | ||||||||||||||||||
| Nonperforming assets/total assets | 3.66 | % | 3.89 | % | -6.0 | % | 3.88 | % | -5.8 | % | ||||||||||||||||||
| Allowance for loan loss/total loans | 4.36 | % | 4.25 | % | 2.5 | % | 3.37 | % | 29.4 | % | ||||||||||||||||||
| Allowance/nonperforming loans | 90.7 | % | 86.0 | % | 5.4 | % | 67.5 | % | 34.4 | % | ||||||||||||||||||
5
| United Bancorp, Inc. and Subsidiary | ||||||||||||
| Comparative Consolidated Income Statement and Performance Data (Unaudited) | ||||||||||||
| Dollars in thousands except per share data | Three months ended Mar. 31, | |||||||||||
| Consolidated Income Statement | 2011 | 2010 | % Change | |||||||||
| Interest Income | ||||||||||||
| Interest and fees on loans | $ | 8,204 | $ | 9,406 | -12.8 | % | ||||||
| Interest on investment securities | 811 | 769 | 5.5 | % | ||||||||
| Interest on fed funds sold & bank balances | 74 | 73 | 1.4 | % | ||||||||
| Total interest income | 9,089 | 10,248 | -11.3 | % | ||||||||
| Interest Expense | ||||||||||||
| Interest on deposits | 1,410 | 2,194 | -35.7 | % | ||||||||
| Interest on short term borrowings | 11 | - | 100.0 | % | ||||||||
| Interest on FHLB advances | 266 | 347 | -23.3 | % | ||||||||
| Total interest expense | 1,687 | 2,541 | -33.6 | % | ||||||||
| Net Interest Income | 7,402 | 7,707 | -4.0 | % | ||||||||
| Provision for loan losses | 2,800 | 4,800 | -41.7 | % | ||||||||
| Net Interest Income After Provision | 4,602 | 2,907 | 58.3 | % | ||||||||
| Noninterest Income | ||||||||||||
| Service charges on deposit accounts | 503 | 539 | -6.7 | % | ||||||||
| Trust & Investment fee income | 1,263 | 1,043 | 21.1 | % | ||||||||
| Gains (losses) on securities transactions | - | - | 0.0 | % | ||||||||
| Income from loan sales and servicing | 1,311 | 892 | 47.0 | % | ||||||||
| ATM, debit and credit card fee income | 513 | 445 | 15.3 | % | ||||||||
| Income from bank-owned life insurance | 105 | 113 | -7.1 | % | ||||||||
| Other income | 230 | 192 | 19.8 | % | ||||||||
| Total noninterest income | 3,925 | 3,224 | 21.7 | % | ||||||||
| Noninterest Expense | ||||||||||||
| Salaries and employee benefits | 4,575 | 3,938 | 16.2 | % | ||||||||
| Occupancy and equipment expense | 1,252 | 1,336 | -6.3 | % | ||||||||
| External data processing | 320 | 294 | 8.8 | % | ||||||||
| Advertising and marketing expenses | 160 | 167 | -4.2 | % | ||||||||
| Attorney & other professional fees | 433 | 351 | 23.4 | % | ||||||||
| Director fees | 102 | 88 | 15.9 | % | ||||||||
| Expenses relating to ORE property | 257 | 315 | -18.4 | % | ||||||||
| FDIC Insurance premiums | 431 | 437 | -1.4 | % | ||||||||
| Other expense | 688 | 733 | -6.1 | % | ||||||||
| Total noninterest expense | 8,218 | 7,659 | 7.3 | % | ||||||||
| Income (Loss) Before Federal Income Tax | 309 | (1,528 | ) | -120.2 | % | |||||||
| Federal income tax (benefit) | (50 | ) | (719 | ) | -93.0 | % | ||||||
| Net Income (Loss) | $ | 359 | $ | (809 | ) | -144.4 | % | |||||
| Performance Ratios | ||||||||||||
| Return on average assets | 0.17 | % | -0.36 | % | ||||||||
| Return on average equity | 1.57 | % | -4.05 | % | ||||||||
| Pre-tax, pre-provision ROA (1) (2) | 1.43 | % | 1.44 | % | -0.5 | % | ||||||
| Net interest margin (FTE) | 3.62 | % | 3.69 | % | -1.8 | % | ||||||
| Efficiency ratio | 71.8 | % | 69.0 | % | 4.1 | % | ||||||
| Common Stock Performance | ||||||||||||
| Basic & diluted earnings (loss) per share | $ | 0.01 | $ | (0.21 | ) | |||||||
| Dividends per share | 0.00 | 0.00 | 0.0 | % | ||||||||
| Dividend payout ratio | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
| Book value per share | $ | 5.72 | $ | 11.76 | -51.4 | % | ||||||
| Tangible book value per share | 5.72 | 11.76 | -51.4 | % | ||||||||
| Market value per share (3) | 3.75 | 7.00 | -46.4 | % | ||||||||
6
| United Bancorp, Inc. and Subsidiary | ||||||||||||||||||||
| Trends of Selected Consolidated Financial Data (Unaudited) | ||||||||||||||||||||
| Dollars in thousands except per share data | 2011 | 2010 | ||||||||||||||||||
| Balance Sheet Data | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||||||
| Period-end: | ||||||||||||||||||||
| Portfolio loans | $ | 578,111 | 591,985 | 604,284 | $ | 622,812 | $ | 634,014 | ||||||||||||
| Total loans | 578,630 | 602,274 | 619,958 | 641,395 | 644,245 | |||||||||||||||
| Allowance for loan losses | 25,194 | 25,163 | 23,491 | 23,362 | 21,351 | |||||||||||||||
| Earning assets | 848,280 | 825,205 | 812,492 | 808,546 | 858,667 | |||||||||||||||
| Total assets | 885,476 | 861,710 | 852,668 | 849,111 | 900,790 | |||||||||||||||
| Deposits | 760,233 | 733,998 | 740,502 | 730,204 | 781,936 | |||||||||||||||
| Shareholders' Equity | 92,831 | 92,704 | 77,395 | 76,397 | 79,829 | |||||||||||||||
| Average: | ||||||||||||||||||||
| Total loans | $ | 589,974 | 612,534 | 629,067 | $ | 642,702 | $ | 654,936 | ||||||||||||
| Earning assets | 841,824 | 818,646 | 807,964 | 832,478 | 865,738 | |||||||||||||||
| Total assets | 879,695 | 863,555 | 846,756 | 878,427 | 909,196 | |||||||||||||||
| Deposits | 752,724 | 747,188 | 732,339 | 763,731 | 787,294 | |||||||||||||||
| Shareholders' Equity | 92,824 | 79,808 | 77,597 | 79,945 | 81,072 | |||||||||||||||
| Income Statement Summary | ||||||||||||||||||||
| Net interest income | $ | 7,402 | 7,735 | 7,964 | $ | 7,677 | $ | 7,708 | ||||||||||||
| Non-interest income | 3,925 | 4,553 | 4,812 | 3,709 | 3,224 | |||||||||||||||
| Non-interest expense | 8,218 | 8,225 | 8,315 | 8,298 | 7,659 | |||||||||||||||
| Pre-tax, pre-provision income (1) (2) | 3,109 | 4,063 | 4,461 | 3,088 | 3,273 | |||||||||||||||
| Provision for loan losses | 2,800 | 4,930 | 3,150 | 8,650 | 4,800 | |||||||||||||||
| Federal income tax | (50 | ) | -440 | 284 | (2,063 | ) | (719 | ) | ||||||||||||
| Net income (loss) | 359 | -427 | 1,027 | (3,499 | ) | (809 | ) | |||||||||||||
| Basic & diluted income (loss) per share | $ | 0.01 | $ | (0.11 | ) | $ | 0.14 | $ | (0.74 | ) | $ | (0.21 | ) | |||||||
| Performance Ratios and Liquidity | ||||||||||||||||||||
| Return on average assets | 0.17 | % | -0.20 | % | 0.47 | % | -1.60 | % | -0.36 | % | ||||||||||
| Return on average common equity | 1.57 | % | -2.12 | % | 5.25 | % | -17.56 | % | -4.05 | % | ||||||||||
| Pre-tax, pre-provision ROA (1) (2) | 1.41 | % | 1.88 | % | 2.08 | % | 1.41 | % | 1.44 | % | ||||||||||
| Net interest margin (FTE) | 3.62 | % | 3.81 | % | 3.97 | % | 3.76 | % | 3.69 | % | ||||||||||
| Efficiency ratio | 71.8 | % | 66.3 | % | 64.5 | % | 72.1 | % | 69.0 | % | ||||||||||
| Ratio of loans to deposits | 76.0 | % | 80.7 | % | 81.6 | % | 85.3 | % | 81.1 | % | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Net charge offs | $ | 2,769 | 3,258 | 3,021 | $ | 6,639 | $ | 3,469 | ||||||||||||
| Non-accrual loans | 25,451 | 28,661 | 27,680 | 30,319 | 29,712 | |||||||||||||||
| Non-performing loans | 27,777 | 29,244 | 29,606 | 31,876 | 31,642 | |||||||||||||||
| Non-performing assets | 32,418 | 33,548 | 33,292 | 34,956 | 34,995 | |||||||||||||||
| Nonperforming loans/portfolio loans | 4.80 | % | 4.94 | % | 4.90 | % | 5.12 | % | 4.99 | % | ||||||||||
| Nonperforming assets/total assets | 3.66 | % | 3.89 | % | 3.90 | % | 4.12 | % | 3.88 | % | ||||||||||
| Allowance for loan loss/portfolio loans | 4.36 | % | 4.25 | % | 3.89 | % | 3.75 | % | 3.37 | % | ||||||||||
| Allowance/nonperforming loans | 90.7 | % | 86.0 | % | 79.3 | % | 73.3 | % | 67.5 | % | ||||||||||
| Market Data for Common Stock | ||||||||||||||||||||
| Book value per share | $ | 5.72 | 5.72 | 11.25 | $ | 11.05 | $ | 11.76 | ||||||||||||
| Market value per share (3) | ||||||||||||||||||||
| High | 4.05 | 4.00 | 6.25 | 7.00 | 8.50 | |||||||||||||||
| Low | 3.35 | 2.65 | 3.65 | 4.50 | 4.35 | |||||||||||||||
| Period-end | 3.75 | 3.50 | 3.65 | 6.25 | 7.00 | |||||||||||||||
| Period-end shares outstanding | 12,692 | 12,667 | 5,083 | 5,083 | 5,072 | |||||||||||||||
| Average shares outstanding | 12,675 | 6,320 | 5,077 | 5,078 | 5,068 | |||||||||||||||
7
| Trends of Selected Consolidated Financial Data (continued) | 2011 | 2010 | ||||||||||||||||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | ||||||||||||||||
| Capital and Stock Performance | ||||||||||||||||||||
| Tier 1 Leverage Ratio | 10.0 | % | 10.2 | % | 8.5 | % | 8.1 | % | 8.4 | % | ||||||||||
| Tangible common equity to total assets | 8.2 | % | 8.4 | % | 6.7 | % | 6.6 | % | 6.6 | % | ||||||||||
| Total capital to risk-weighted assets | 16.5 | % | 16.3 | % | 13.3 | % | 12.9 | % | 13.4 | % | ||||||||||
| Dividends per common share | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
| Dividend payout ratio | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||
| Price/earnings ratio (TTM) | NA | NA | NA | NA | NA | |||||||||||||||
| Period-end common stock market price/book value | 65.6 | % | 61.2 | % | 32.5 | % | 56.5 | % | 59.5 | % | ||||||||||
| (1) | In an attempt to evaluate the trends of net interest income, noninterest income and noninterest expense, the Company's management focuses on pre-tax, pre-provision income and return on average assets as useful and consistent measures of the Company's earning capacity. This calculation adjusts net income before tax by the amount of the Company's provision for loan losses. While this information is not consistent with, or intended to replace, presentation under generally accepted accounting principles, it is presented here for comparison. |
A reconciliation of pre-tax, pre-provision income for the year to date periods ended March 31, 2011 and 2010 follows: | |||||||||
| 2011 | 2010 | ||||||||
| Pre-tax, pre-provision income | $ | 3,109 | $ | 3,272 | |||||
| Provision for loan losses | 2,800 | 4,800 | |||||||
| Income (loss) before income taxes | 309 | (1,528 | ) | ||||||
| Income taxes | (50 | ) | (719 | ) | |||||
| Net income (loss) | $ | 359 | $ | (809 | ) | ||||
| (2) | Net income before provision for loan loss and income taxes, divided by average total assets. | |||||||||
| (3) | Market value per share is based on the last reported transaction on OTCBB before period end. | |||||||||
8