EXHIBIT 99.1
FENTURA FINANCIAL, INC.
P.O. BOX 725
FENTON, MI 48430-0725
P.O. BOX 725
FENTON, MI 48430-0725
Contact: | Ronald L. Justice SVP Corporate Governance & Investor Relations Fentura Financial, Inc. (810) 714-3902 July 17, 2006 |
For Immediate Release
FENTURA FINANCIAL, INC. ANNOUNCES SECOND QUARTER EARNINGS
Fentura Financial, Inc. reported net income of $1,258,000 or $.59 per diluted share* for the three months ended June 30, 2006 compared to net income of $1,293,000 or $.62 per diluted share* reported for the second quarter of 2005. Net interest income increased $157,000 due to the continued growth of loans while non interest income increased $95,000 principally due to increases in trust and investment income and in service charges on deposit accounts. These quarter to quarter increases were offset by a $389,000 increase in non interest expense due to additional staff and operating costs associated with a new branch office of The State Bank which opened in April. Provision expense to the allowance for loan losses declined $89,000 during the quarter ended June 30, 2006 comparing to the same quarter in 2005 based on the estimated adequacy of the allowance.
Fentura reported 2006 year to date earnings of $2,465,000 or $1.15 per diluted share*, a 0.8% increase over the $2,446,000 or $1.17 per diluted share* reported for the first half of 2005. During this period, the Company achieved net interest income of $11,711,000 an increase of 5.7% over the $11,077,000 reported in the first half of 2005. Interest income from continued loan growth accounts for the increase. Non interest income of $3,659,000 increased compared to the $3,354,000 reported for the six months ended June 30, 2005 primarily due to increases in both service charges on deposit accounts and trust and investment income and a non recurring security portfolio loss recognized in 2005 on the sale of securities to fund an investment in higher yielding instruments. Non interest expense of $11,256,000 increased in the first half of 2006 compared to the $10,392,000 reported in 2005 due
principally to the additional staff and operating costs associated with the new branch office at The State Bank.
Total assets increased 4.6% from $601,271,000 at June 30, 2005 to $629,165,000 at June 30, 2006 driven principally by an 8.1% increase in total loans and a substantial 12.4% increase in commercial loans. Total deposits increased $31,293,000 or 6.2%, and total stockholders equity increased $3,369,000 or 7.5% to $48,045,000 at June 30, 2006.
Fentura is a bank holding company headquartered in Fenton, Michigan. Subsidiary banks include The State Bank headquartered in Fenton with offices serving Fenton, Linden, Holly, Grand Blanc and Brighton; Davison State Bank headquartered in Davison, Michigan with offices serving Davison; and West Michigan Community Bank headquartered in Hudsonville, Michigan with offices serving Hudsonville, Holland, Jenison, and Grandville. Fentura Financial, Inc. shares are traded over the counter under the FETM trading symbol.
*Per share data adjusted for 10% stock dividend payable August 4, 2006.
# # #
CAUTIONARY STATEMENT: This press release contains certain forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services pricing. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Further information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filing with the Securities and Exchange Commission.
Fentura Financial Inc.
Consolidated Balance Sheets
(Dollars in thousands)
UNAUDITED
Consolidated Balance Sheets
(Dollars in thousands)
UNAUDITED
June 30 | Mar 31 | Dec 31 | Sep 30 | June 30 | ||||||||||||||||
2006 | 2006 | 2005 | 2005 | 2005 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Cash and due from banks | $ | 19,346 | $ | 19,156 | $ | 21,327 | $ | 22,885 | $ | 21,799 | ||||||||||
Short term investments | 6,900 | 8,650 | 9,750 | 8,300 | 550 | |||||||||||||||
Total cash & cash equivalents | 26,246 | 27,806 | 31,077 | 31,185 | 22,349 | |||||||||||||||
Securities: | ||||||||||||||||||||
Securities available for sale | 92,646 | 93,217 | 99,542 | 94,705 | 99,910 | |||||||||||||||
Securities held to maturity | 16,958 | 15,395 | 14,851 | 13,663 | 18,607 | |||||||||||||||
Total securities | 109,604 | 108,612 | 114,393 | 108,368 | 118,517 | |||||||||||||||
Loans held for sale | 679 | 1,695 | 1,042 | 2,442 | 3,722 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial | 265,097 | 260,054 | 254,498 | 241,190 | 235,823 | |||||||||||||||
Real estate — construction | 87,908 | 86,449 | 76,386 | 81,156 | 76,658 | |||||||||||||||
Real estate — mortgage | 37,076 | 36,347 | 37,627 | 39,529 | 37,605 | |||||||||||||||
Consumer | 66,896 | 69,534 | 70,845 | 72,541 | 72,726 | |||||||||||||||
Total loans | 456,977 | 452,384 | 439,356 | 434,416 | 422,812 | |||||||||||||||
Less: Allowance for loan losses | (6,682 | ) | (6,518 | ) | (6,301 | ) | (6,294 | ) | (5,996 | ) | ||||||||||
Net loans | 450,295 | 445,866 | 433,055 | 428,122 | 416,816 | |||||||||||||||
Bank owned life insurance | 6,683 | 6,642 | 6,579 | 6,417 | 6,941 | |||||||||||||||
Bank premises and equipment | 16,665 | 15,350 | 14,617 | 14,245 | 14,279 | |||||||||||||||
Federal Home Loan Bank stock | 2,432 | 2,300 | 2,300 | 2,300 | 2,300 | |||||||||||||||
Accrued interest receivable | 2,837 | 2,830 | 2,676 | 2,550 | 2,438 | |||||||||||||||
Goodwill | 7,955 | 7,955 | 7,955 | 7,955 | 7,955 | |||||||||||||||
Acquisition intangibles | 912 | 988 | 1,075 | 1,162 | 1,248 | |||||||||||||||
Other assets | 4,857 | 4,276 | 4,320 | 4,441 | 4,706 | |||||||||||||||
TOTAL ASSETS | $ | 629,165 | $ | 624,320 | $ | 619,089 | $ | 609,187 | $ | 601,271 | ||||||||||
LIABILITIES & SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non-interest bearing deposits | 77,463 | 77,652 | 76,792 | 81,532 | 81,930 | |||||||||||||||
Interest bearing deposits | 456,937 | 456,313 | 451,262 | 435,404 | 421,177 | |||||||||||||||
Total deposits | 534,400 | 533,965 | 528,054 | 516,936 | 503,107 | |||||||||||||||
Short-term borrowings | 6,565 | 20 | 1,537 | 1,950 | 8,384 | |||||||||||||||
Federal Home Loan Bank Advances | 12,130 | 14,189 | 14,228 | 16,267 | 18,806 | |||||||||||||||
Repurchase agreements | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | |||||||||||||||
Subordinated debentures | 14,000 | 14,000 | 14,000 | 14,000 | 12,000 | |||||||||||||||
Accrued interest, taxes & other liabilities | 4,025 | 4,420 | 4,375 | 3,893 | 4,298 | |||||||||||||||
Total liabilities | 581,120 | 576,594 | 572,194 | 563,046 | 556,595 | |||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Common stock — no par value 5,000,000 shares authorized | 41,811 | 34,798 | 34,491 | 34,359 | 33,467 | |||||||||||||||
Retained earnings | 8,358 | 14,431 | 13,729 | 12,882 | 12,048 | |||||||||||||||
Accumulated other comprehensive income (loss) | (2,124 | ) | (1,503 | ) | (1,325 | ) | (1,100 | ) | (839 | ) | ||||||||||
Total stockholders’ equity | 48,045 | 47,726 | 46,895 | 46,141 | 44,676 | |||||||||||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | 629,165 | $ | 624,320 | $ | 619,089 | $ | 609,187 | $ | 601,271 | ||||||||||
* Common stock shares issued & outstanding | 2,142,496 | 2,130,564 | 2,124,427 | 2,119,374 | 2,088,220 | |||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Non-Performing Loans as a % of Total Loans | 0.44 | % | 0.46 | % | 0.67 | % | 0.46 | % | 0.43 | % | ||||||||||
Allowance for Loan Losses as a % of Non-Performing Loans | 330.14 | % | 312.91 | % | 213.09 | % | 317.40 | % | 329.27 | % | ||||||||||
Accruing Loans Past Due 90 Days More to Total Loans | 0.04 | % | 0.02 | % | 0.02 | % | 0.01 | % | 0.02 | % | ||||||||||
Non-Performing Assets as a % of Total Assets | 0.44 | % | 0.35 | % | 0.56 | % | 0.45 | % | 0.45 | % | ||||||||||
Quarterly Average Balances: | ||||||||||||||||||||
Total Loans | 450,361 | 446,889 | 436,632 | 429,357 | 426,132 | |||||||||||||||
Total Earning Assets | 573,687 | 570,751 | 559,834 | 551,618 | 548,971 | |||||||||||||||
Total Shareholders’ Equity | 48,223 | 47,937 | 47,497 | 45,294 | 43,839 | |||||||||||||||
Total Assets | 622,474 | 619,398 | 610,275 | 603,683 | 598,698 | |||||||||||||||
Diluted Shares Outstanding | 2,135,056 | 2,137,265 | 2,128,215 | 2,091,588 | 2,093,868 |
*Per share data adjusted for 10% stock dividend payable August 4, 2006
Fentura Financial Inc.
Consolidated Income Statements
(Dollars in thousands, except per share data)
UNAUDITED
Consolidated Income Statements
(Dollars in thousands, except per share data)
UNAUDITED
Three Months ended | Six months ended | |||||||||||||||||||||||
June 30 | Mar 31 | Dec 31 | June 30 | June 30 | June 30 | |||||||||||||||||||
2006 | 2006 | 2005 | 2005 | 2006 | 2005 | |||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Interest & fees on loans | $ | 8,852 | $ | 8,430 | $ | 8,154 | $ | 7,226 | $ | 17,282 | $ | 13,767 | ||||||||||||
Interest & dividends on securities: | ||||||||||||||||||||||||
Taxable | 852 | 883 | 764 | 811 | 1,735 | 1,663 | ||||||||||||||||||
Tax-exempt | 196 | 207 | 112 | 233 | 403 | 477 | ||||||||||||||||||
Interest on federal funds sold | 79 | 94 | 110 | 8 | 173 | 18 | ||||||||||||||||||
Total interest income | 9,979 | 9,614 | 9,140 | 8,278 | 19,593 | 15,925 | ||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Deposits | 3,594 | 3,241 | 2,941 | 2,111 | 6,835 | 3,911 | ||||||||||||||||||
Borrowings | 540 | 507 | 473 | 479 | 1,047 | 937 | ||||||||||||||||||
Total interest expense | 4,134 | 3,748 | 3,414 | 2,590 | 7,882 | 4,848 | ||||||||||||||||||
Net interest income | 5,845 | 5,866 | 5,726 | 5,688 | 11,711 | 11,077 | ||||||||||||||||||
Provision for loan losses | 240 | 400 | 387 | 329 | 640 | 598 | ||||||||||||||||||
Net interest income after provision for loan losses | 5,605 | 5,466 | 5,339 | 5,359 | 11,071 | 10,479 | ||||||||||||||||||
Non-interest income: | ||||||||||||||||||||||||
Service charges on deposit accounts | 942 | 831 | 874 | 879 | 1,773 | 1,664 | ||||||||||||||||||
Gain on sale of mortgage loans | 157 | 163 | 212 | 166 | 320 | 348 | ||||||||||||||||||
Trust & investment services income | 417 | 383 | 372 | 294 | 800 | 588 | ||||||||||||||||||
Loss on sale of securities | — | — | (41 | ) | 1 | — | (110 | ) | ||||||||||||||||
Other income and fees | 346 | 420 | 227 | 427 | 766 | 864 | ||||||||||||||||||
Total non-interest income | 1,862 | 1,797 | 1,644 | 1,767 | 3,659 | 3,354 | ||||||||||||||||||
Non-interest expense: | ||||||||||||||||||||||||
Salaries & employee benefits | 3,307 | 3,334 | 2,922 | 3,003 | 6,641 | 5,967 | ||||||||||||||||||
Occupancy | 511 | 432 | 349 | 420 | 943 | 884 | ||||||||||||||||||
Furniture and equipment | 551 | 508 | 504 | 536 | 1,059 | 1,080 | ||||||||||||||||||
Loan and collection | 84 | 71 | 133 | 99 | 155 | 168 | ||||||||||||||||||
Advertising and promotional | 201 | 153 | 118 | 229 | 354 | 356 | ||||||||||||||||||
Other operating expenses | 1,033 | 1,071 | 1,109 | 1,011 | 2,104 | 1,937 | ||||||||||||||||||
Total non-interest expense | 5,687 | 5,569 | 5,135 | 5,298 | 11,256 | 10,392 | ||||||||||||||||||
Income before federal income taxes | 1,780 | 1,694 | 1,848 | 1,828 | 3,474 | 3,441 | ||||||||||||||||||
Federal income taxes | 522 | 487 | 538 | 535 | 1,009 | 995 | ||||||||||||||||||
Net Income | $ | 1,258 | $ | 1,207 | $ | 1,310 | $ | 1,293 | $ | 2,465 | $ | 2,446 | ||||||||||||
*Per Share Data: | ||||||||||||||||||||||||
Basic earnings | $ | 0.59 | $ | 0.56 | $ | 0.62 | $ | 0.62 | $ | 1.15 | $ | 1.17 | ||||||||||||
Diluted earnings | $ | 0.59 | $ | 0.56 | $ | 0.62 | $ | 0.62 | $ | 1.15 | $ | 1.17 | ||||||||||||
Cash dividends declared | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.22 | $ | 0.45 | $ | 0.44 | ||||||||||||
Performance Ratios: | ||||||||||||||||||||||||
Return on Average Assets | 0.81 | % | 0.79 | % | 0.85 | % | 0.87 | % | 0.79 | % | 0.84 | % | ||||||||||||
Return on Average Equity | 10.46 | % | 10.21 | % | 10.94 | % | 11.83 | % | 10.26 | % | 11.30 | % | ||||||||||||
Net Interest Margin (FTE) | 4.17 | % | 4.26 | % | 4.11 | % | 4.26 | % | 4.22 | % | 4.29 | % | ||||||||||||
Book Value Per Share | $ | 22.42 | $ | 22.40 | $ | 22.07 | $ | 21.39 | $ | 22.42 | $ | 21.39 | ||||||||||||
Net Charge-offs | 76 | 183 | 380 | 113 | 259 | 103 | ||||||||||||||||||
Ratio of Net charge-offs to Gross Loans | 0.02 | % | 0.04 | % | 0.09 | % | 0.02 | % | 0.06 | % | 0.02 | % |
*Per share data adjusted for 10% stock dividend payable August 4, 2006