Exhibit 99.1
NEWS RELEASE | CONTACT: | Michael McNeil, President |
| | | HMN Financial, Inc. (507) 535-1202 |
| | | FOR IMMEDIATE RELEASE |
HMN FINANCIAL, INC. ANNOUNCES SECOND QUARTER RESULTS
Second Quarter Highlights |
• | Net income of $2.9 million, up $444,000, or 17.8%, over second quarter 2005 |
• | Diluted earnings per share of $0.73, up $0.11, over second quarter of 2005 |
• | Net interest income up $1.0 million, or 11.5%, over second quarter of 2005 |
• | Net interest margin of 4.08%, up 38 basis points over second quarter of 2005 |
• | Income tax expense up $436,000, or 31.3%, over second quarter of 2005 |
Year to Date Highlights |
• | Net income of $5.7 million, up $369,000, or 6.9%, over first six months of 2005 |
• | Diluted earnings per share of $1.41, up $0.08, over first six months of 2005 |
• | Net interest income up $1.7 million, or 9.9%, over first six months of 2005 |
• | Net interest margin of 4.09%, up 34 basis points over first six months of 2005 |
• | Income tax expense up $760,000, or 27.6%, over first six months of 2005 |
Earnings Summary | | | | | | | | | | | | | |
| | Three months ended June 30, | Six months ended June 30, |
| | | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
Net income | | $ | 2,943,370 | | | 2,499,453 | | $ | 5,683,776 | | | 5,314,517 | |
Diluted earnings per share | | | 0.73 | | | 0.62 | | | 1.41 | | | 1.33 | |
Return on average assets | | | 1.18 | % | | 1.01 | % | | 1.16 | % | | 1.09 | % |
Return on average equity | | | 12.34 | % | | 11.38 | % | | 12.08 | % | | 12.29 | % |
Book value per share | | $ | 21.38 | | $ | 19.64 | | $ | 21.38 | | $ | 19.64 | |
| | | | | | | | | | | | | | |
ROCHESTER, MINNESOTA, July 20, 2006. . . HMN Financial, Inc. (HMN) (NASDAQ:HMNF), the $1 billion holding company for Home Federal Savings Bank (the Bank), today reported net income of $2.9 million for the second quarter of 2006, up $444,000, or 17.8%, over net income of $2.5 million for the second quarter of 2005. Diluted earnings per common share for the second quarter of 2006 were $0.73, up $0.11, or 17.7%, from $0.62 for the second quarter of 2005.
Second Quarter Results
Net Interest Income
Net interest income was $9.7 million for the second quarter of 2006, an increase of $1.0 million, or 11.5%, compared to $8.7 million for the second quarter of 2005. Interest income was $17.0 million for the second quarter of 2006, an increase of $2.2 million, or 15.2%, from $14.8 million for the same period in 2005. Interest income increased because of an increase in the average interest rates earned on loans and investments. Interest rates increased primarily because of the 200 basis point increase in the prime interest rate between the periods. Increases in the prime rate, which is the rate that banks charge their prime business customers, generally increase the rates on adjustable rate consumer and commercial loans in the portfolio and on new loans originated. The increase in interest income due to increased rates was partially offset by a $37 million decrease in the average outstanding loan portfolio balances between the periods. The average yield earned on interest-earning assets was 7.11% for the second quarter of 2006, an increase of 86 basis points from the 6.25% average yield for the second quarter of 2005.
Interest expense was $7.3 million for the second quarter of 2006, an increase of $1.3 million, or 20.5%, compared to $6.0 million for the second quarter of 2005. Interest expense increased because of the higher interest rates paid on deposits which were caused by the 200 basis point increase in the federal funds rate between the periods. Increases in the federal funds rate, which is the rate that banks charge other banks for short term loans, generally increase the rates banks pay for deposits. The average interest rate paid on interest-bearing liabilities was 3.23% for the second quarter of 2006, an increase of 53 basis points from the 2.70% average interest rate paid in the second quarter of 2005. Net interest margin (net interest income divided by average interest earning assets) for the second quarter of 2006 was 4.08%, an increase of 38 basis points, compared to 3.70% for the second quarter of 2005.
Provision for Loan Losses
The provision for loan losses was $980,000 for the second quarter of 2006, an increase of $73,000, or 8.0%, from $907,000 for the second quarter of 2005. The provision for loan losses increased primarily because $10.0 million of related commercial real estate loans were downgraded and classified as non-accruing during the quarter. These loans are collateralized by real estate and are guaranteed by the borrowers. The increase in the provision related to the commercial loan risk rating downgrades was partially offset by a decrease in the provision related to the $11 million reduction in the commercial loan portfolio in the second quarter of 2006 compared to the $12 million in growth that was experienced in the second quarter of 2005. The reduction in loan growth was the result of management’s decision not to pursue long-term, low fixed-rate commercial loans in an environment of rising short-term interest rates. Total non-performing assets were $13.5 million at June 30, 2006, an increase of $9.6 million from $3.9 million at December 31, 2005. Non-performing loans increased $10.0 million, foreclosed and repossessed assets decreased $275,000 and other non performing assets decreased $106,000 during the period.
Non-Interest Income and Expense
Non-interest income was $1.8 million for the second quarter of 2006, an increase of $191,000, or 12.2%, from $1.6 million for the same period in 2005. Fees and service charges increased $110,000 between the periods primarily because of increased retail deposit account activity and fees. Security gains increased $48,000 due to increased security sales. Gain on sale of loans decreased $22,000 between the periods due to a decrease in the number of single-family mortgage loans sold and a decrease in the profit margins realized on the loans that were sold. Competition in the single-family loan origination market has increased as the overall market has slowed and profit margins have been lowered in order to remain competitive and maintain origination volumes. Other non-interest income increased $59,000 primarily because of increased revenues from the sale of uninsured investment products.
Non-interest expense was $5.8 million for the second quarter of 2006, an increase of $242,000, or 4.4%, from $5.6 million for the same period of 2005. Compensation expense increased $333,000 primarily because of annual payroll increases and increased pension costs. Occupancy expense increased $62,000 due primarily to additional costs associated with new branch and loan origination offices opened in Rochester in the first quarter of 2006. Data processing costs increased $42,000 due to increases in the internet and other banking services provided by the Bank’s third party processor between the periods. Other non-interest expense decreased $152,000 primarily because of decreased mortgage loan expenses and professional fees incurred during the second quarter of 2006. Income tax expense increased $436,000 between the periods due to an increase in taxable income and an effective tax rate that increased from 35.8% for the second quarter of 2005 to 38.3% for the second quarter of 2006. The increase in the effective tax rate was primarily the result of state tax law changes that were enacted in the third quarter of 2005.
Return on Assets and Equity
Return on average assets for the second quarter of 2006 was 1.18%, compared to 1.01% for the second quarter of 2005. Return on average equity was 12.34% for the second quarter of
2006, compared to 11.38% for the same quarter in 2005. Book value per common share at June 30, 2006 was $21.38, compared to $19.64 at June 30, 2005.
Six Month Period Results
Net Income
Net income was $5.7 million for the six month period ended June 30, 2006, an increase of $369,000, or 6.9%, compared to $5.3 million for the six month period ended June 30, 2005. Diluted earnings per share for the six month period in 2006 were $1.41, up $0.08, or 6.0%, from $1.33 for the same period in 2005.
Net Interest Income
Net interest income was $19.1 million for the first six months of 2006, an increase of $1.7 million, or 9.9%, from $17.4 million for the same period in 2005. Interest income was $33.0 million for the six month period ended June 30, 2006, an increase of $4.0 million, or 13.9%, from $29.0 million for the same six month period in 2005. Interest income increased because of an increase in the average interest rates earned on loans and investments. Interest rates increased primarily because of the 200 basis point increase in the prime interest rate between the periods. The increase in interest income due to increased rates was partially offset by a $30 million decrease in the average outstanding loan portfolio balance between the periods. The average yield earned on interest-earning assets was 7.05% for the first six months of 2006, an increase of 82 basis points from the 6.23% average yield for the first six months of 2005.
Interest expense was $13.9 million for the first six months of 2006, an increase of $2.3 million, or 19.9%, compared to $11.6 million for the first six months of 2005. Interest expense increased because of the higher interest rates paid on deposits which were caused by the 200 basis point increase in the federal funds rate between the periods. The average interest rate paid on interest-bearing liabilities was 3.15% for the first six months of 2006, an increase of 52 basis points from the 2.63% average interest rate paid in the first six months of 2005. Net interest margin (net interest income divided by average interest earning assets) for the first six months of 2006 was 4.09%, an increase of 34 basis points, compared to 3.75% for the first six months of 2005.
Provision for Loan Losses
The provision for loan losses was $1.5 million for the first six months of 2006, a decrease of $48,000, from $1.5 million for the same six month period in 2005. The provision for loan losses decreased primarily because of the $23 million reduction in the commercial loan portfolio in the first six months of 2006 compared to the $52 million in growth that was experienced in the first six months of 2005. The reduction in loan growth was the result of management’s decision not to pursue long-term, low fixed-rate commercial loans in an environment of rising short-term interest rates. The decrease in the provision related to the reduced loan growth was partially offset by an increase in the provision due to increased commercial loan risk rating downgrades in the first six months of 2006 when compared to the same period of 2005. Total non-performing assets were $13.5 million at June 30, 2006, an increase of $9.6 million from $3.9 million at December 31, 2005. Non-performing loans increased $10.0 million, foreclosed and repossessed assets decreased $275,000 and other non performing assets decreased $106,000 during the period.
Non-Interest Income and Expense
Non-interest income was $3.3 million for the first six months of 2006, an increase of $251,000, or 8.4%, from $3.0 million for the same period in 2005. Fees and service charges increased $223,000 between the periods primarily because of increased retail deposit account activity and fees. Security gains increased $48,000 due to increased security sales. Gain on sale of loans decreased $69,000 between the periods due to a decrease in the number of single-family mortgage loans sold and a decrease in the profit margins realized on the loans that were sold. Competition in the single-family loan origination market has increased as the overall market has slowed and profit margins have been lowered in order to remain competitive and maintain origination volumes. Other non-interest income increased $42,000 primarily because of increased revenues from the sale of uninsured investment products.
Non-interest expense was $11.7 million for the first six months of 2006, an increase of $891,000, or 8.2%, from $10.8 million for the same period of 2005. Compensation expense increased $818,000 primarily because of annual payroll increases and increased pension costs. Occupancy expense increased $167,000 due primarily to additional costs associated with new branch and loan origination offices opened in Rochester in the first quarter of 2006. Data processing costs increased $93,000 due to increases in the internet and other banking services provided by the Bank’s third party processor between the periods. Other non-interest expense decreased $172,000 primarily because of a decrease in mortgage loan expenses and professional fees. Income tax expense increased $760,000 between the periods due to an increase in taxable income and an effective tax rate that increased from 34.1% for the first six months of 2005 to 38.2% for the first six months of 2006. The increase in the effective tax rate was primarily the result of state tax law changes that were enacted in the third quarter of 2005.
Return on Assets and Equity
Return on average assets for the six month period ended June 30, 2006 was 1.16%, compared to 1.09% for the same period in 2005. Return on average equity was 12.08% for the six month period ended in 2006, compared to 12.29% for the same period in 2005.
President’s Statement
“Net earnings continued to improve despite the challenging interest rate environment,” said HMN President, Mike McNeil. “The increase in net income was primarily the result of an improved net interest margin that reflected an improved deposit mix. We believe that actively managing our net interest margin will continue to have a positive effect on earnings.”
General Information
HMN Financial, Inc. and Home Federal Savings Bank are headquartered in Rochester, Minnesota. The Bank operates ten full service offices in southern Minnesota located in Albert Lea, Austin, LaCrescent, Rochester, Spring Valley and Winona and two full service offices in Iowa located in Marshalltown and Toledo. Home Federal Savings Bank also operates loan origination offices located in Sartell and Rochester, Minnesota. Eagle Crest Capital Bank, a division of Home Federal Savings Bank, operates branches in Edina and Rochester, Minnesota.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to those relating to the Company’s financial expectations for earnings and revenues and the management of net interest margin. A number of factors could cause actual results to differ materially from the Company's assumptions and expectations. These factors include possible legislative changes and adverse economic, business and competitive developments such as shrinking interest margins; deposit outflows; reduced demand for financial services and loan products; changes in accounting policies and guidelines, changes in monetary and fiscal policies of the federal government, or changes in tax laws. Additional factors that may cause actual results to differ from the Company's assumptions and expectations include those set forth in the Company's most recent filings with the Securities and Exchange Commission. All forward-looking statements are qualified by, and should be considered in conjunction with, such cautionary statements.
(Three pages of selected consolidated financial information are included with this release.)
HMN FINANCIAL, INC. AND SUBSIDIARIESConsolidated Balance Sheets |
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| | | June 30, 2006 | | | December 31, 2005 | |
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| | | | | | | |
Assets | | | | | | | |
| Cash and cash equivalents | | $ | 62,608,169 | | | 47,268,795 | |
| Securities available for sale: | | | | | | | |
| Mortgage-backed and related securities (amortized cost $7,055,100 and $7,428,504) | | | 6,267,160 | | | 6,879,756 | |
| Other marketable securities (amortized cost $139,615,255 and $113,749,841) | | | 138,953,180 | | | 112,778,813 | |
| | | | 145,220,340 | | | 119,658,569 | |
| | | | | | | | |
| Loans held for sale | | | 7,128,570 | | | 1,435,141 | |
| Loans receivable, net | | | 757,621,273 | | | 785,678,461 | |
| Accrued interest receivable | | | 4,396,521 | | | 4,460,014 | |
| Real estate, net | | | 1,101,060 | | | 1,214,621 | |
| Federal Home Loan Bank stock, at cost | | | 8,400,700 | | | 8,364,600 | |
| Mortgage servicing rights, net | | | 2,296,433 | | | 2,653,635 | |
| Premises and equipment, net | | | 12,025,027 | | | 11,941,863 | |
| Investment in limited partnerships | | | 125,489 | | | 141,048 | |
| Goodwill | | | 3,800,938 | | | 3,800,938 | |
| Core deposit intangible, net | | | 162,831 | | | 219,760 | |
| Prepaid expenses and other assets | | | 2,530,750 | | | 1,854,948 | |
| Deferred tax asset | | | 2,516,800 | | | 2,544,400 | |
| Total assets | | $ | 1,009,934,901 | | | 991,236,793 | |
| | | | | | | | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | |
| Deposits | | $ | 748,355,396 | | | 731,536,560 | |
| Federal Home Loan Bank advances | | | 160,900,000 | | | 160,900,000 | |
| Accrued interest payable | | | 1,568,173 | | | 2,085,573 | |
| Advance payments by borrowers for taxes and insurance | | | 779,722 | | | 1,038,575 | |
| Accrued expenses and other liabilities | | | 4,707,906 | | | 4,947,816 | |
| Total liabilities | | | 916,311,197 | | | 900,508,524 | |
| Commitments and contingencies | | | | | | | |
| Stockholders’ equity: | | | | | | | |
Serial preferred stock ($.01 par value): authorized 500,000 shares; issued and outstanding none | | | 0 | | | 0 | |
Common stock ($.01 par value): authorized 11,000,000; issued shares 9,128,662 | | | 91,287 | | | 91,287 | |
| Additional paid-in capital | | | 57,689,740 | | | 58,011,099 | |
| Retained earnings, subject to certain restrictions | | | 102,784,471 | | | 98,951,777 | |
| Accumulated other comprehensive (loss) | | | (875,415 | ) | | (917,577 | ) |
| Unearned employee stock ownership plan shares | | | (4,254,285 | ) | | (4,350,999 | ) |
| Unearned compensation restricted stock awards | | | 0 | | | (182,521 | ) |
| Treasury stock, at cost 4,748,698 and 4,721,402 shares | | | (61,812,094 | ) | | (60,874,797 | ) |
| Total stockholders’ equity | | | 93,623,704 | | | 90,728,269 | |
| Total liabilities and stockholders’ equity | | $ | 1,009,934,901 | | | 991,236,793 | |
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HMN FINANCIAL, INC. AND SUBSIDIARIES Consolidated Statements of Income (unaudited) |
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| | | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
| Interest income: | | | | | | | | | | | | | |
| Loans receivable | | $ | 15,081,511 | | | 13,769,340 | | | 29,784,291 | | | 27,102,359 | |
| Securities available for sale: | | | | | | | | | | | | | |
| Mortgage-backed and related | | | 68,869 | | | 84,288 | | | 139,431 | | | 174,056 | |
| Other marketable | | | 1,322,547 | | | 654,182 | | | 2,212,178 | | | 1,295,938 | |
| Cash equivalents | | | 452,434 | | | 175,671 | | | 708,860 | | | 227,940 | |
| Other | | | 85,984 | | | 89,232 | | | 148,805 | | | 168,760 | |
| Total interest income | | | 17,011,345 | | | 14,772,713 | | | 32,993,565 | | | 28,969,053 | |
| | | | | | | | | | | | | | |
| Interest expense: | | | | | | | | | | | | | |
| Deposits | | | 5,516,428 | | | 4,199,791 | | | 10,384,109 | | | 7,902,422 | |
| Federal Home Loan Bank advances | | | 1,744,879 | | | 1,826,501 | | | 3,470,735 | | | 3,649,192 | |
| Total interest expense | | | 7,261,307 | | | 6,026,292 | | | 13,854,844 | | | 11,551,614 | |
| Net interest income | | | 9,750,038 | | | 8,746,421 | | | 19,138,721 | | | 17,417,439 | |
| Provision for loan losses | | | 980,000 | | | 907,000 | | | 1,495,000 | | | 1,543,000 | |
| Net interest income after provision for loan losses | | | 8,770,038 | | | 7,839,421 | | | 17,643,721 | | | 15,874,439 | |
| | | | | | | | | | | | | | |
| Non-interest income: | | | | | | | | | | | | | |
| Fees and service charges | | | 795,808 | | | 685,357 | | | 1,510,586 | | | 1,287,954 | |
| Mortgage servicing fees | | | 301,259 | | | 303,363 | | | 604,934 | | | 596,343 | |
| Securities gains, net | | | 48,122 | | | 0 | | | 48,122 | | | 0 | |
| Gains on sales of loans | | | 302,608 | | | 324,173 | | | 548,585 | | | 617,489 | |
| Losses in limited partnerships | | | (9,059 | ) | | (6,500 | ) | | (15,559 | ) | | (14,210 | ) |
| Other | | | 327,223 | | | 268,206 | | | 555,627 | | | 513,754 | |
| Total non-interest income | | | 1,765,961 | | | 1,574,599 | | | 3,252,295 | | | 3,001,330 | |
| | | | | | | | | | | | | | |
| Non-interest expense: | | | | | | | | | | | | | |
| Compensation and benefits | | | 3,117,702 | | | 2,784,578 | | | 6,376,573 | | | 5,558,682 | |
| Occupancy | | | 1,103,392 | | | 1,041,460 | | | 2,203,684 | | | 2,036,714 | |
| Deposit insurance premiums | | | 24,792 | | | 34,619 | | | 55,989 | | | 62,525 | |
| Advertising | | | 107,501 | | | 105,765 | | | 238,159 | | | 189,673 | |
| Data processing | | | 287,043 | | | 245,351 | | | 575,758 | | | 482,839 | |
| Amortization of mortgage servicing rights, net | | | 236,551 | | | 271,089 | | | 453,091 | | | 510,122 | |
| Other | | | 886,648 | | | 1,038,805 | | | 1,799,786 | | | 1,971,497 | |
| Total non-interest expense | | | 5,763,629 | | | 5,521,667 | | | 11,703,040 | | | 10,812,052 | |
| Income before income tax expense | | | 4,772,370 | | | 3,892,353 | | | 9,192,976 | | | 8,063,717 | |
| Income tax expense | | | 1,829,000 | | | 1,392,900 | | | 3,509,200 | | | 2,749,200 | |
| Net income | | $ | 2,943,370 | | | 2,499,453 | | | 5,683,776 | | | 5,314,517 | |
| Basic earnings per share | | $ | 0.77 | | | 0.65 | | | 1.48 | | | 1.39 | |
| Diluted earnings per share | | $ | 0.73 | | | 0.62 | | | 1.41 | | | 1.33 | |
HMN FINANCIAL, INC. AND SUBSIDIARIES |
Selected Consolidated Financial Information |
| (unaudited) |
| | |
| | | Three Months Ended | | Six Months Ended | |
| SELECTED FINANCIAL DATA: | | June 30, | | June 30, | |
| (dollars in thousands; except per share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
| I. OPERATING DATA: | | | | | | | | | |
| Interest income | | $ | 17,011 | | | 14,773 | | | 32,994 | | | 28,969 | |
| Interest expense | | | 7,261 | | | 6,027 | | | 13,855 | | | 11,552 | |
| Net interest income | | | 9,750 | | | 8,746 | | | 19,139 | | | 17,417 | |
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| II. AVERAGE BALANCES: | | | | | | | | | | | | | |
Assets (1) | | | 1,003,183 | | | 991,455 | | | 988,229 | | | 980,045 | |
| Loans receivable, net | | | 767,774 | | | 806,267 | | | 772,993 | | | 803,334 | |
Mortgage-backed and related securities (1) | | | 7,162 | | | 8,823 | | | 7,261 | | | 9,056 | |
Interest-earning assets (1) | | | 959,477 | | | 948,304 | | | 944,295 | | | 937,875 | |
| Interest-bearing liabilities | | | 900,825 | | | 896,210 | | | 886,081 | | | 886,447 | |
Equity (1) | | | 95,690 | | | 88,100 | | | 94,876 | | | 87,227 | |
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III. PERFORMANCE RATIOS: (1) | | | | | | | | | | | | | |
| Return on average assets (annualized) | | | 1.18 | % | | 1.01 | % | | 1.16 | % | | 1.09 | % |
| Interest rate spread information: | | | | | | | | | | | | | |
| Average during period | | | 3.88 | | | 3.55 | | | 3.89 | | | 3.60 | |
| End of period | | | 3.92 | | | 3.65 | | | 3.92 | | | 3.65 | |
| Net interest margin | | | 4.08 | | | 3.70 | | | 4.09 | | | 3.75 | |
| Ratio of operating expense to average | | | | | | | | | | | | | |
| total assets (annualized) | | | 2.30 | | | 2.23 | | | 2.39 | | | 2.22 | |
| Return on average equity (annualized) | | | 12.34 | | | 11.38 | | | 12.08 | | | 12.29 | |
| Efficiency | | | 50.05 | | | 53.50 | | | 52.27 | | | 52.95 | |
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| | | | June 30, | | | December 31, | | | June 30, | | | | |
| | | | 2006 | | | 2005 | | | 2005 | | | | |
| IV. ASSET QUALITY: | | | | | | | | | | | | | |
| Total non-performing assets | | $ | 13,491 | | | 3,883 | | | 12,475 | | | | |
| Non-performing assets to total assets | | | 1.34 | % | | 0.39 | % | | 1.27 | % | | | |
| Non-performing loans to total loans | | | | | | | | | | | | | |
| receivable, net | | | 1.62 | % | | 0.30 | % | | 1.38 | % | | | |
| Allowance for loan losses | | $ | 10,216 | | | 8,778 | | | 10,223 | | | | |
| Allowance for loan losses to total loans | | | | | | | | | | | | | |
| receivable, net | | | 1.35 | % | | 1.11 | % | | 1.25 | % | | | |
| Allowance for loan losses to | | | | | | | | | | | | | |
| non-performing loans | | | 82.93 | | | 376.88 | | | 90.26 | | | | |
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| V. BOOK VALUE PER SHARE: | | | | | | | | | | | | | |
| Book value per share | | $ | 21.38 | | | 20.59 | | | 19.64 | | | | |
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| | | Six Months Ended | | | Year Ended | | | Six Months Ended | | | | |
| | | | June 30, 2006 | | | Dec 31, 2005 | | | June 30, 2005 | | | | |
| VI. CAPITAL RATIOS: | | | | | | | | | | | | | |
| Stockholders' equity to total assets, | | | | | | | | | | | | | |
| at end of period | | | 9.27 | % | | 9.15 | % | | 8.78 | % | | | |
| Average stockholders' equity to | | | | | | | | | | | | | |
average assets(1) | | | 9.60 | | | 9.05 | | | 8.90 | | | | |
| Ratio of average interest-earning assets to | | | | | | | | | | | | | |
average interest-bearing liabilities(1) | | | 106.57 | | | 105.96 | | | 105.80 | | | | |
| | | | June 30, | | | December 31, | | | June 30, | | | | |
| | | | 2006 | | | 2005 | | | 2005 | | | | |
| VII. EMPLOYEE DATA: | | | | | | | | | | | | | |
| Number of full time equivalent employees | | | 212 | | | 208 | | | 209 | | | | |
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| (1) | Average balances were calculated based upon amortized cost without the market value impact of SFAS 115 |
