EXHIBIT 99.1
INTERVEST BANCSHARES CORPORATION
Reports 2013 First Quarter Earnings of $3.4 Million or $0.16 per share
Business Editors—New York—(Business Wire—April 15, 2013)
Intervest Bancshares Corporation (NASDAQ-GS: IBCA), parent company of Intervest National Bank (“INB”), today reported that its net earnings for the first quarter of 2013 (“Q1-13”) increased to $3.4 million, or $0.16 per common share, from $2.8 million, or $0.13 per common share, for the first quarter of 2012 (“Q1-12”). The $0.6 million increase in net earnings was driven by a $1.0 million credit for loan losses and a $1.4 million decrease in net real estate expenses. These items were largely offset by a $0.9 million decrease in net interest and dividend income, a $0.4 million decrease in noninterest income, a $0.4 million increase in income tax expense and a $0.1 million increase in the provision for real estate losses.
Key points regarding the quarter’s results follow:
| • | A credit for loan losses of $1.0 million was recorded in Q1-13, compared to no provision for loan losses in Q1-12. The credit was the result of $1.1 million of recoveries of prior loan charge offs (from settlements of various litigation on two foreclosure actions commenced prior to 2011). |
| • | Expenses, net of rental income, associated with real estate owned through foreclosure (“REO”) totaled $0.5 million in Q1-12, compared to net income of $0.9 million in Q1-13. The amount for Q1-13 included a $1.5 million recovery of real estate expenses from prior periods associated with one property (that was sold in 2008) due to the litigation settlement noted above. |
| • | Net interest and dividend income decreased to $9.0 million in Q1-13, from $9.9 million in Q1-12, primarily due to a planned reduction in INB’s assets. The decrease in assets contributed to a significant increase in INB’s regulatory capital ratios. The net interest margin (exclusive of loan prepayment income) improved to 2.37% in Q1-13, from 2.16% in Q1-12. |
| • | Noninterest income decreased to $0.7 million in Q1-13, from $1.1 million in Q1-12. The decrease was due to $0.2 million of less income from loan prepayments and other lending fees, and a $0.2 million increase in security impairment charges. |
| • | Income tax expense increased to $3.1 million in Q1-13, from $2.7 million in Q1-12 due to higher pre-tax income. |
| • | A provision for real estate losses of $0.6 million was recorded in Q1-13, compared to $0.5 million in Q1-12. |
| • | Operating expenses for Q1-13 totaled $4.2 million, unchanged from Q1-12 as a $0.1 million increase in salaries and benefits expense was offset by a $0.1 million decrease in FDIC insurance expense. The Company’s efficiency ratio (which measures its ability to control expenses as a percentage of revenues) continued to be favorable but increased slightly to 42% in Q1-13, from 38% in Q1-12. |
| • | Nonaccrual loans decreased to $41 million at March 31, 2013, from $46 million at December 31, 2012. Nonaccrual loans include certain restructured loans (“TDRs”) that are current as to payments and performing in accordance with their renegotiated terms, but are required to be reported nonaccrual based on regulatory guidance. At March 31, 2013, such loans totaled $33 million compared to $36 million at December 31, 2012. These loans were yielding 4.82% at March 31, 2013. |
| • | REO increased to $18.3 million at March 31, 2013, from $15.9 million at December 31, 2012, reflecting the addition of one property for $3.0 million, partially offset by $0.6 million of write-downs (recorded as a provision for real estate losses) in the carrying value of several properties. |
| • | New loan originations for Q1-13 increased to $62 million, from $50 million in Q1-12. Total loan repayments increased to $86 million in Q1-13, from $57 million in Q1-12. |
| • | Book value per common share (after subtracting preferred dividends in arrears) was $8.48 at March 31, 2013 and $8.44 at December 31, 2012. |
As previously announced, on March 21, 2013, INB’s primary regulator, the Office of the Comptroller of the Currency, terminated its Formal Agreement with INB and INB is no longer subject to any related operating restrictions. INB is also no longer subject to heightened regulatory capital requirements which had been in effect since February 2010. INB’s regulatory capital ratios at March 31, 2013 were as follows: Tier One Leverage—15.55%; Tier One Risk-Based—20.90%; and Total Risk-Based Capital—22.17%, well above the minimum requirements to be considered a well-capitalized institution. As of March 31, 2013, Intervest Bancshares Corporation (“IBC”) remained subject to its written agreement with the Federal Reserve Bank of New York (the “FRB”) and the restrictions contained therein.
The U.S. Treasury is currently conducting periodic, individual auctions of TARP securities it owns, including those of IBC. IBC is exploring opportunities to repurchase its TARP securities held by the Treasury through such auctions. In order to repurchase the securities, IBC would need to first repay $6.7 million of accrued interest on its $55 million of outstanding junior subordinated debentures as well as approximately $4.6 million of dividends in arrears on its $25 million of preferred stock held by the Treasury. Both IBC and INB have received approvals from their regulators to undertake the necessary steps, including making a necessary one-time cash dividend payment from INB to IBC of $31 million, to permit IBC to participate in such auctions and make a bid to purchase its securities. IBC would use INB’s cash dividend and a large portion of its $8.5 million of available cash on hand at March 31, 2013 to fund the foregoing actions. IBC expects to make a bid in the second quarter of 2013.
The $0.9 million decrease in net interest and dividend income was due to INB’s smaller balance sheet, partially offset by a higher net interest margin. In Q1-13, total average interest-earning assets decreased by $308 million from Q1-12, reflecting decreases of $68 million in loans and $240 million in total securities and overnight investments. At the same time, average deposits and borrowed funds decreased by $306 million and $13 million, respectively, while average stockholders’ equity increased by $14 million. The net interest margin increased by 21 basis points, reflecting an 18 basis point improvement in the interest rate spread and a higher ratio of interest-earning assets to interest-bearing liabilities, or an $11 million increase in net earning assets. The higher spread was due to a steady reduction since 2010 in rates paid on deposits and the run-off of higher-cost CDs and borrowings, largely offset by payoffs of higher yielding loans and calls of security investments, coupled with the re-investment of a large portion of these cash inflows into new loans and securities at significantly lower market interest rates. Overall, the average cost of funds decreased by 41 basis points to 2.13% in Q1-13, from 2.54% in Q1-12, while the average yield on earning assets decreased at a slower pace or by 23 basis points to 4.27% in Q1-13, from 4.50% in Q1-12.
Total assets at March 31, 2013 decreased to $1.63 billion from $1.67 billion at December 31, 2012, primarily reflecting a $35 million decrease in security investments and a $26 million decrease in loans, partially offset by a $24 million increase in cash and short-term investments to $84 million, a significant portion of which is expected to be used for the purposes noted earlier.
Securities held to maturity decreased to $409 million at March 31, 2013 from $444 million at December 31, 2012, reflecting calls of securities exceeding new purchases. The bulk of the resulting proceeds were used to fund planned deposit outflow. At March 31, 2013, the securities portfolio, which represented 25% of total assets and was comprised almost entirely of U.S. government agency debt ($327 million) and residential mortgage-backed pass-through securities ($78 million), had a weighted-average expected yield, remaining life and remaining contractual maturity of 1.06%, 2.4 years and 6.9 years, respectively.
Loans totaled $1.08 billion at March 31, 2013, compared to $1.11 billion at December 31, 2012. The decrease reflected $77.6 million of payoffs, $8.1 million of amortization, $0.1 million of chargeoffs and $3.0 million of transfers to REO, mostly offset by $61.6 million of new loans and $1.2 million of recoveries of prior loan charge offs. Loans paid off had a weighted-average yield of 6.14%. New loans in Q1-13, nearly all with fixed interest rates, had a weighted-average yield, term and loan-to-value ratio of 4.60%, 5.1 years and 58%, respectively, compared to 4.83%, 5.5 years and 60%, respectively, in Q1-12.
Nonaccrual loans and REO aggregated to $59 million, or 3.6% of total assets, at March 31, 2013, compared to $62 million, or 3.7%, at December 31, 2012. Nonaccrual loans totaled $41 million at March 31, 2013, down from $46 million at December 31, 2012. Nonaccrual loans included $33 million (8 loans) and $36 million (10 loans) of TDRs that were current at each date, respectively.
The allowance for loan losses at March 31, 2013 was $28.2 million, representing 2.61% of total net loans, compared to $28.1 million, or 2.54%, at December 31, 2012. The allowance included specific reserves for impaired loans (comprised of all nonaccrual loans as well as accruing TDRs) at each date totaling $5.8 million and $5.9 million, respectively.
At March 31, 2013, the Company had a consolidated deferred tax asset totaling $26 million, which included remaining unused NOL and AMT credit carryforwards totaling $10 million for Federal tax purposes and $40 million for State and Local tax purposes. These carryforwards are available to reduce taxes payable on future taxable income.
Deposits at March 31, 2013 decreased to $1.32 billion from $1.36 billion at December 31, 2012, primarily reflecting a $30 million decrease in CD accounts, of which $8 million were brokered. At March 31, 2013, there were $70 million of brokered CDs outstanding with a rate of 4.89%, of which $33 million mature within one year.
Borrowed funds and related interest payable at March 31, 2013 increased to $63.4 million, from $62.9 million at December 31, 2012, due to a $0.5 million increase in accrued interest payable on outstanding junior subordinated debentures (TRUPs). Stockholders’ equity increased to $215 million at March 31, 2013 from $211 million at December 31, 2012, primarily due to $3.9 million of net earnings before preferred dividend requirements. Since February 2010, as required by the FRB and as permitted by the underlying documents, IBC has suspended the payment of interest on its TRUPs as well as the declaration and payment of dividends on $25 million of its preferred stock held by the Treasury.
Intervest Bancshares Corporation (IBC) is a bank holding company. Its operating subsidiary is Intervest National Bank (INB), a nationally chartered commercial bank that has its headquarters and full-service banking office at One Rockefeller Plaza, in New York City, and a total of six full-service banking offices in Clearwater and Gulfport, Florida. IBC’s Common Stock is listed on the NASDAQ Global Select Market: Trading Symbol IBCA.
This release may contain forward-looking information. Words such as “may,” “will,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “assume,” “indicate,” “continue,” “target,” “goal,” and similar words or expressions of the future are intended to identify forward-looking statements. Except for historical information, the matters discussed herein are subject to certain risks and uncertainties that may adversely affect our business, financial condition and results of operations. The following factors, among others, could cause actual results to differ materially from those set forth in forward looking statements: the regulatory agreement to which IBC is subject and any operating restrictions arising therefrom including availability of regulatory approvals or waivers; changes in economic conditions and real estate values both nationally and in our market areas; changes in our borrowing facilities, volume of loan originations and deposit flows; changes in the levels of our non-interest income and provisions for loan and real estate losses; changes in the composition and credit quality of our loan portfolio; legislative or regulatory changes, including increased expenses arising therefrom; changes in interest rates which may reduce our net interest margin and net interest income; increases in competition; technological changes which we may not be able to implement; changes in accounting or regulatory principles, policies or guidelines; changes in tax laws and our ability to utilize our deferred tax asset, including NOL and AMT carryforwards; and our ability to attract and retain key members of management. Reference is made to IBC’s filings with the SEC for further discussion of risks and uncertainties regarding our business. We assume no obligation to update any forward looking statements. Historical results are not necessarily indicative of our future prospects.
Contact: Lowell S. Dansker, Chairman; Phone 212-218-2800 Fax 212-218-2808.
Selected Consolidated Financial Information Follows.
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INTERVEST BANCSHARES CORPORATION
Selected Consolidated Financial Information
| (Dollars in thousands, except per share amounts) | Quarter Ended March 31, | |||||||||
| Selected Operating Data: | 2013 | 2012 | ||||||||
Interest and dividend income | $ | 16,249 | $ | 20,698 | ||||||
Interest expense | 7,245 | 10,740 | ||||||||
Net interest and dividend income | 9,004 | 9,958 | ||||||||
(Credit) provision for loan losses | (1,000 | ) | - | |||||||
Noninterest income | 743 | 1,125 | ||||||||
Noninterest expenses: | ||||||||||
Provision for real estate losses | 629 | 511 | ||||||||
Real estate (income) expenses, net | (986 | ) | 460 | |||||||
Operating expenses | 4,138 | 4,164 | ||||||||
Earnings before income taxes | 6,966 | 5,948 | ||||||||
Provision for income taxes | 3,075 | 2,694 | ||||||||
Net earnings before preferred dividend requirements | 3,891 | 3,254 | ||||||||
Preferred dividend requirements (1) | 462 | 444 | ||||||||
Net earnings available to common stockholders | $ | 3,429 | $ | 2,810 | ||||||
Basic and diluted earnings per common share | $ | 0.16 | $ | 0.13 | ||||||
Average shares used for basic earnings per share | 21,832,200 | 21,493,518 | ||||||||
Average shares used for diluted earnings per share (2) | 21,854,455 | 21,493,518 | ||||||||
Common shares outstanding at end of period | 21,925,089 | 21,590,689 | ||||||||
Common stock options/warrants outstanding at end of period (2) | 1,069,022 | 1,085,022 | ||||||||
Yield on interest-earning assets | 4.27% | 4.50% | ||||||||
Cost of funds | 2.13% | 2.54% | ||||||||
Net interest margin (3) | 2.37% | 2.16% | ||||||||
Return on average assets (annualized) | 0.95% | 0.67% | ||||||||
Return on average common equity (annualized) | 8.29% | 7.46% | ||||||||
Effective income tax rate | 44% | 45% | ||||||||
Efficiency ratio (4) | 42% | 38% | ||||||||
Average loans outstanding | $ | 1,096,881 | $ | 1,165,330 | ||||||
Average securities outstanding | 435,611 | 678,844 | ||||||||
Average short-term investments outstanding | 10,869 | 7,664 | ||||||||
Average assets outstanding | 1,638,065 | 1,945,130 | ||||||||
Average interest-bearing deposits outstanding | $ | 1,325,942 | $ | 1,631,664 | ||||||
Average borrowings outstanding | 56,702 | 70,356 | ||||||||
Average stockholders’ equity | 212,510 | 198,746 | ||||||||
| At Mar 31, | At Dec 31, | At Sep 30, | At Jun 30, | At Mar 31, | ||||||||||||||||
Selected Financial Condition Information: | 2013 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||
Total assets | $ | 1,627,787 | $ | 1,665,792 | $ | 1,751,880 | $ | 1,862,110 | $ | 1,909,052 | ||||||||||
Cash and short-term investments | 83,945 | 60,395 | 94,268 | 122,378 | 89,839 | |||||||||||||||
Securities held to maturity | 409,184 | 443,777 | 440,002 | 535,056 | 590,959 | |||||||||||||||
Loans, net of unearned fees | 1,081,482 | 1,107,466 | 1,155,171 | 1,137,780 | 1,155,437 | |||||||||||||||
Allowance for loan losses | 28,210 | 28,103 | 28,382 | 28,844 | 29,169 | |||||||||||||||
Allowance for loan losses/net loans | 2.61% | 2.54% | 2.46% | 2.54% | 2.52% | |||||||||||||||
Deposits | 1,318,215 | 1,362,619 | 1,432,209 | 1,554,615 | 1,599,653 | |||||||||||||||
Borrowed funds and accrued interest payable | 63,373 | 62,930 | 69,487 | 72,528 | 72,064 | |||||||||||||||
Preferred stockholder’s equity | 24,720 | 24,624 | 24,528 | 24,431 | 24,335 | |||||||||||||||
Common stockholders’ equity | 190,545 | 186,323 | 182,580 | 179,690 | 176,716 | |||||||||||||||
Common book value per share (5) | 8.48 | 8.44 | 8.28 | 8.16 | 8.04 | |||||||||||||||
Loan chargeoffs for the quarter | $ | 115 | $ | 676 | $ | 548 | $ | 498 | $ | 1,430 | ||||||||||
Loan recoveries for the quarter | 1,222 | 397 | 86 | 173 | 184 | |||||||||||||||
Real estate chargeoffs for the quarter | - | 1,124 | 3,642 | - | - | |||||||||||||||
Security impairment writedowns for the quarter | 366 | 425 | - | - | 157 | |||||||||||||||
Nonaccrual loans (6) | $ | 40,931 | $ | 45,898 | $ | 47,957 | $ | 50,643 | $ | 53,208 | ||||||||||
Real estate owned, net of valuation allowance | 18,334 | 15,923 | 21,858 | 26,370 | 27,767 | |||||||||||||||
Investment securities on a cash basis | 3,292 | 3,721 | 4,221 | 4,221 | 4,221 | |||||||||||||||
Accruing troubled debt restructured (TDR) loans (7) | 13,906 | 20,076 | 14,167 | 14,596 | 8,980 | |||||||||||||||
Loans 90 days past due and still accruing | 5,916 | 4,391 | 6,503 | 5,290 | 2,798 | |||||||||||||||
Loans 60-89 days past due and still accruing | - | - | 15,477 | 1,902 | 6,303 | |||||||||||||||
Loans 31-59 days past due and still accruing | 12,998 | 15,497 | 50 | - | 11,840 | |||||||||||||||
| (1) | Represents dividend requirements on cumulative preferred stock held by the U.S. Treasury and amortization of related preferred stock discount. |
| (2) | Outstanding options/warrants to purchase 928,112 shares and 1,085,622 shares were not dilutive for the 2013 and 2012 periods, respectively. |
| (3) | Net interest margin is reported exclusive of income from loan prepayments, which is included as a component of noninterest income. Inclusive of such income, the margin would compute to 2.54% and 2.37%, respectively. |
| (4) | Represents operating expenses as a percentage of net interest and dividend income plus noninterest income. |
| (5) | Represents common stockholders’ equity less preferred dividends in arrears of $4.6 million, $4.2 million, $3.8 million, $3.5 million and $3.1 million, respectively, divided by common shares outstanding. |
| (6) | Include performing TDRs maintained on nonaccrual status of $33 million, $36 million, $39 million, $39 million and $44 million, respectively. |
| (7) | Represent loans whose terms have been modified mostly through the deferral of principal and/or a partial reduction in interest payments, or extension of maturity date. At March 31, 2013, all loans were performing and were yielding approximately 5%. One loan in the amount of $2.1 million matured and was in the process of renewal at March 31, 2013. Such loan was also included in the “Loans 90 days past due and still accruing” category. |
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INTERVEST BANCSHARES CORPORATION
Consolidated Financial Highlights
| At or For The Period Ended | ||||||||||||||||||||
| ($ in thousands, except per share amounts) | Quarter Ended Mar 31, 2013 | Year Ended Dec 31, 2012 | Year Ended Dec 31, 2011 | Year Ended Dec 31, 2010 | Year Ended Dec 31, 2009 | |||||||||||||||
Balance Sheet Highlights: | ||||||||||||||||||||
Total assets | $ | 1,627,787 | $ | 1,665,792 | $ | 1,969,540 | $ | 2,070,868 | $ | 2,401,204 | ||||||||||
Cash and short-term investments | 83,945 | 60,395 | 29,863 | 23,911 | 7,977 | |||||||||||||||
Securities held to maturity | 409,184 | 443,777 | 700,444 | 614,335 | 634,856 | |||||||||||||||
Loans, net of unearned fees | 1,081,482 | 1,107,466 | 1,163,790 | 1,337,326 | 1,686,164 | |||||||||||||||
Allowance for loan losses | 28,210 | 28,103 | 30,415 | 34,840 | 32,640 | |||||||||||||||
Allowance for loan losses/net loans | 2.61% | 2.54% | 2.61% | 2.61% | 1.94% | |||||||||||||||
Deposits | 1,318,215 | 1,362,619 | 1,662,024 | 1,766,083 | 2,029,984 | |||||||||||||||
Borrowed funds and accrued interest payable | 63,373 | 62,930 | 78,606 | 84,676 | 118,552 | |||||||||||||||
Preferred stockholder’s equity | 24,720 | 24,624 | 24,238 | 23,852 | 23,466 | |||||||||||||||
Common stockholders’ equity | 190,545 | 186,323 | 173,293 | 162,108 | 190,588 | |||||||||||||||
Common book value per share (1) | 8.48 | 8.44 | 8.07 | 7.61 | 23.04 | |||||||||||||||
Market price per common share | 5.88 | 3.89 | 2.65 | 2.93 | 3.28 | |||||||||||||||
Asset Quality Highlights | ||||||||||||||||||||
Nonaccrual loans | $ | 40,931 | $ | 45,898 | $ | 57,240 | $ | 52,923 | $ | 123,877 | ||||||||||
Real estate owned, net of valuation allowance | 18,334 | 15,923 | 28,278 | 27,064 | 31,866 | |||||||||||||||
Investment securities on a cash basis | 3,292 | 3,721 | 4,378 | 2,318 | 1,385 | |||||||||||||||
Accruing troubled debt restructured loans (2) | 13,906 | 20,076 | 9,030 | 3,632 | 97,311 | |||||||||||||||
Loans 90 days past due and still accruing | 5,916 | 4,391 | 1,925 | 7,481 | 6,800 | |||||||||||||||
Loans 31-89 days past due and still accruing | 12,998 | 15,497 | 28,770 | 11,364 | 5,925 | |||||||||||||||
Loan chargeoffs | 115 | 3,152 | 9,598 | 100,146 | 8,103 | |||||||||||||||
Loan recoveries | 1,222 | 840 | 155 | 883 | 1,354 | |||||||||||||||
Real estate chargeoffs | — | 4,766 | — | 15,614 | — | |||||||||||||||
Impairment writedowns on security investments | 366 | 582 | 201 | 1,192 | 2,258 | |||||||||||||||
Statement of Operations Highlights: | ||||||||||||||||||||
Interest and dividend income | $ | 16,249 | $ | 77,284 | $ | 92,837 | $ | 107,072 | $ | 123,598 | ||||||||||
Interest expense | 7,245 | 38,067 | 50,540 | 62,692 | 81,000 | |||||||||||||||
Net interest and dividend income | 9,004 | 39,217 | 42,297 | 44,380 | 42,598 | |||||||||||||||
(Credit) provision for loan losses | (1,000 | ) | — | 5,018 | 101,463 | 10,865 | ||||||||||||||
Noninterest income | 743 | 6,194 | 4,308 | 2,110 | 297 | |||||||||||||||
Noninterest expenses: | ||||||||||||||||||||
Provision for real estate losses | 629 | 4,068 | 3,349 | 15,509 | 2,275 | |||||||||||||||
Real estate (income) expenses, net | (986 | ) | 2,146 | 1,619 | 4,105 | 4,945 | ||||||||||||||
Operating expenses | 4,138 | 16,668 | 15,861 | 19,069 | 19,864 | |||||||||||||||
Earnings (loss) before income taxes | 6,966 | 22,529 | 20,758 | (93,656 | ) | 4,946 | ||||||||||||||
Provision (benefit) for income taxes | 3,075 | 10,307 | 9,512 | (40,348 | ) | 1,816 | ||||||||||||||
Net earnings (loss) before preferred dividend requirements | 3,891 | 12,222 | 11,246 | (53,308 | ) | 3,130 | ||||||||||||||
Preferred dividend requirements (3) | 462 | 1,801 | 1,730 | 1,667 | 1,632 | |||||||||||||||
Net earnings (loss) available to common stockholders | $ | 3,429 | $ | 10,421 | $ | 9,516 | $ | (54,975 | ) | $ | 1,498 | |||||||||
Basic earnings (loss) per common share | $ | 0.16 | $ | 0.48 | $ | 0.45 | $ | (4.95 | ) | $ | 0.18 | |||||||||
Diluted earnings (loss) per common share | $ | 0.16 | $ | 0.48 | $ | 0.45 | $ | (4.95 | ) | $ | 0.18 | |||||||||
Average common shares used to calculate: | ||||||||||||||||||||
Basic earnings (loss) per common share | 21,832,200 | 21,566,009 | 21,126,187 | 11,101,196 | 8,270,812 | |||||||||||||||
Diluted earnings (loss) per common share | 21,854,455 | 21,568,196 | 21,126,187 | 11,101,196 | 8,270,812 | |||||||||||||||
Common shares outstanding | 21,925,089 | 21,589,589 | 21,125,289 | 21,126,489 | 8,270,812 | |||||||||||||||
Other ratios: | ||||||||||||||||||||
Net interest margin (4) | 2.37% | 2.29% | 2.18% | 2.11% | 1.83% | |||||||||||||||
Return on average assets | 0.95% | 0.66% | 0.56% | -2.42% | 0.13% | |||||||||||||||
Return on average common equity | 8.29% | 6.82% | 6.74% | -32.20% | 1.65% | |||||||||||||||
Effective income tax rate | 44% | 46% | 46% | 43% | 37% | |||||||||||||||
Efficiency ratio (5) | 42% | 37% | 34% | 41% | 46% | |||||||||||||||
| (1) | Represents common stockholders’ equity less preferred dividends in arrears ($4.6 million at March 31, 2013, $4.2 million at December 31, 2012 and $2.8 million at December 31, 2011) divided by common shares outstanding. |
| (2) | Represent loans whose terms have been modified mostly through the deferral of principal and/or a partial reduction in interest payments. At March 31, 2013, all loans were performing and were yielding approximately 5%. One loan in the amount of $2.1 million matured and was in the process of renewal at March 31, 2013. Such loan was also included in the “Loans 90 days past due and still accruing” category. |
| (3) | Represents dividend requirements on cumulative preferred stock held by the U.S. Treasury and amortization of related preferred stock discount. |
| (4) | Net interest margin is reported exclusive of income from loan prepayments, which is included as a component of noninterest income. Inclusive of such income, the margin would compute to 2.54%, 2.59%, 2.31%, 2.17% and 1.89%, respectively. |
| (5) | Represents operating expenses as a percentage of net interest and dividend income plus noninterest income. |
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