EXHIBIT 99.1
January 16, 2007
NB&T Financial Group, Inc. (Nasdaq: NBTF), parent company of The National Bank and Trust Company, Wilmington, Ohio, announced net income for 2006 of $1.86 million, or $.58 per diluted share, compared to net income of $4.10 million, or $1.30 per diluted share, for 2005. In 2006, the Company undertook several initiatives to restructure its balance sheet, which reduced earnings for 2006. The Company incurred approximately $1.4 million in prepayment penalties from the early payoff of approximately $47.2 million in Federal Home Loan Bank debt. In addition, the Bank sold securities to reduce borrowings and fund a branch sale. The security losses were approximately $1.3 million, which was partially offset by a $1.1 million pre-tax gain on the branch sale in the fourth quarter of 2006. The Company also experienced a decline in its net interest income in 2006 and an increase in its provision for loan losses in 2006 from the previous year.
Net interest income was $18.30 million for 2006, a decrease of $817,000 compared to 2005. Net interest margin, however, increased to 3.26% for 2006 from 3.16% for 2005. Interest income increased to $34.1 million for 2006 from $32.9 million last year. Average interest-earning assets decreased approximately 7.5% to $561.5 million; however, the average yield increased from 5.44% for 2005 to 6.07% for 2006. Total interest expense increased $2.03 million to $15.80 million during 2006 from $13.77 million last year. Although average interest-bearing liabilities decreased 7.2% from last year to $554.5 million, their cost increased to 3.21% during 2006 from 2.57% last year. This is largely the result of increased rates on money market accounts, certificates of deposit and borrowings.
The provision for loan losses was $1.33 million in 2006 and $775,000 in 2005. The higher provision for loan losses in 2006 is a result of increased bankruptcy filings by bank customers associated with recent bankruptcy law changes and additional specific reserves on commercial loans. Net charge-offs were $626,000, or 0.15% of total average loans, in 2006, compared to $929,000, or 0.23% of total average loans, in 2005. Non-performing loans totaled $8.4 million at December 31, 2006, compared to $8.5 million at December 31, 2005. The allowance for loan losses to total loans was 1.16% at December 31, 2006.
Total non-interest income was $7.85 million for 2006 and $8.37 million for 2005. Non-interest income for 2006 includes $1.10 million from a branch sale and net security losses of $1.34 million, compared to a $101,000 security gain in 2005. Other non-interest income was $8.1 million in 2006, compared to $8.3 million in 2005.
Total non-interest expense was $23.31 for 2006, compared to $21.87 million for 2005. Most of the increase is due to Federal Home Loan Bank prepayment penalties of $1.36 million and additional marketing and printing expenses in 2006 related to the Company’s new brand launch.
On December 19, 2006 the Board of Directors declared a dividend of $0.27 per share, payable January 26, 2007 to shareholders of record on December 31, 2006. This amount of dividend represents a 3.8% increase from the fourth quarter of 2005.
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
(Unaudited)
| Three Months Ending | Twelve Months Ending | |||||||||||||||||||||||||||
| 12/31/2006 | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 | 12/31/2006 | 12/31/2005 | ||||||||||||||||||||||
Statements of Income | ||||||||||||||||||||||||||||
Interest income | $ | 8,292 | $ | 8,665 | $ | 8,600 | $ | 8,539 | $ | 8,526 | $ | 34,096 | $ | 32,886 | ||||||||||||||
Interest expense | 3,675 | 4,103 | 4,078 | 3,939 | 3,812 | 15,795 | 13,768 | |||||||||||||||||||||
Net interest income | 4,617 | 4,562 | 4,522 | 4,600 | 4,714 | 18,301 | 19,118 | |||||||||||||||||||||
Provision for loan losses | 180 | 270 | 270 | 610 | 300 | 1,330 | 775 | |||||||||||||||||||||
Other non-interest income | 1,966 | 1,988 | 2,010 | 2,131 | 1,986 | 8,095 | 8,266 | |||||||||||||||||||||
Net gains/(losses) on sales of securities | — | (1,192 | ) | — | (150 | ) | 81 | (1,342 | ) | 101 | ||||||||||||||||||
Gain on sale of branch | 1,099 | 1,099 | ||||||||||||||||||||||||||
Total non-interest income | 3,065 | 796 | 2,010 | 1,981 | 2,067 | 7,852 | 8,367 | |||||||||||||||||||||
Other non-interest expenses | 5,522 | 5,526 | 5,504 | 5,397 | 5,376 | 21,949 | 21,868 | |||||||||||||||||||||
FHLB prepayment penalties | — | — | — | 1,363 | — | 1,363 | — | |||||||||||||||||||||
Total non-interest expenses | 5,522 | 5,526 | 5,504 | 6,760 | 5,376 | 23,312 | 21,868 | |||||||||||||||||||||
Income before income taxes | 1,980 | (438 | ) | 758 | (789 | ) | 1,105 | 1,511 | 4,842 | |||||||||||||||||||
Income taxes | 451 | (350 | ) | 39 | (485 | ) | 144 | (345 | ) | 737 | ||||||||||||||||||
Net income | $ | 1,529 | $ | (88 | ) | $ | 719 | $ | (304 | ) | $ | 961 | $ | 1,856 | $ | 4,105 | ||||||||||||
Per Share Data | ||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.48 | $ | (0.03 | ) | $ | 0.23 | $ | (0.10 | ) | $ | 0.30 | $ | 0.58 | $ | 1.30 | ||||||||||||
Diluted earnings per share | 0.48 | (0.03 | ) | 0.23 | (0.10 | ) | 0.30 | 0.58 | 1.30 | |||||||||||||||||||
Dividends per share | 0.27 | 0.27 | 0.27 | 0.27 | 0.26 | 1.08 | 1.04 | |||||||||||||||||||||
Book value at quarter end | 18.01 | 17.76 | 17.59 | 18.08 | 18.10 | 18.01 | 18.10 | |||||||||||||||||||||
Average basic shares outstanding | 3,175 | 3,176 | 3,174 | 3,174 | 3,164 | 3,175 | 3,162 | |||||||||||||||||||||
Average diluted shares outstanding | 3,176 | 3,177 | 3,175 | 3,175 | 3,166 | 3,176 | 3,168 | |||||||||||||||||||||
Balance Sheet Items (Quarter End) | ||||||||||||||||||||||||||||
Total assets | $ | 555,168 | $ | 570,831 | $ | 633,168 | $ | 633,667 | $ | 650,248 | $ | 555,168 | $ | 650,248 | ||||||||||||||
Securities | 82,897 | 84,050 | 142,077 | 149,242 | 171,567 | 82,897 | 171,567 | |||||||||||||||||||||
Loans | 410,365 | 427,797 | 427,876 | 424,947 | 417,623 | 410,365 | 417,623 | |||||||||||||||||||||
Allowance for loan losses | 4,763 | 4,741 | 4,641 | 4,493 | 4,058 | 4,763 | 4,058 | |||||||||||||||||||||
Deposits | 453,268 | 460,593 | 469,060 | 474,542 | 447,626 | 453,268 | 447,626 | |||||||||||||||||||||
Borrowings | 39,598 | 49,331 | 103,251 | 98,281 | 139,066 | 39,598 | 139,066 | |||||||||||||||||||||
Total shareholders’ equity | 58,223 | 57,468 | 56,881 | 57,125 | 58,498 | 58,223 | 58,498 | |||||||||||||||||||||
Selected Financial Ratios | ||||||||||||||||||||||||||||
Return on average assets | 1.09 | % | (0.06 | )% | 0.45 | % | (0.19 | )% | 0.58 | % | 0.30 | % | 0.63 | % | ||||||||||||||
Return on average equity | 10.44 | (0.61 | ) | 5.03 | (2.11 | ) | 6.37 | 3.21 | 6.98 | |||||||||||||||||||
Dividend payout ratio | 56.25 | NM | 117.39 | NM | 86.67 | 186.21 | 80.00 | |||||||||||||||||||||
Net interest margin | 3.58 | 3.25 | 3.12 | 3.13 | 3.08 | 3.26 | 3.16 | |||||||||||||||||||||
Average loans to average total assets | 74.51 | 70.70 | 67.62 | 65.15 | 63.10 | 69.34 | 62.26 | |||||||||||||||||||||
Average equity to average total assets | 10.43 | 9.47 | 9.09 | 9.05 | 9.05 | 9.48 | 8.99 | |||||||||||||||||||||
Non-performing loans to total loans | 2.04 | 2.12 | 1.81 | 1.90 | 1.96 | 2.04 | 1.96 | |||||||||||||||||||||
Loan loss allowance to total loans | 1.16 | 1.11 | 1.08 | 1.06 | 0.97 | 1.16 | 0.97 | |||||||||||||||||||||
Loan loss allowance to non-performing loans | 56.94 | 52.33 | 59.81 | 55.52 | 49.62 | 56.94 | 50.00 | |||||||||||||||||||||
Net charge-offs to average loans | 0.15 | 0.16 | 0.11 | 0.17 | 0.30 | 0.15 | 0.23 | |||||||||||||||||||||
