Exhibit 99.1
 | Contact: | NEWS RELEASE Chairman, President and CEO (419) 782-5015 bsmall@first-fed.com |
For Immediate Release
FIRST DEFIANCE ANNOUNCES 2007
THIRD QUARTER EARNINGS
DEFIANCE, OHIO (October 15, 2007) – First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for its third fiscal quarter ended September 30, 2007 totaled $3.13 million, or $0.44 per diluted share, compared to $3.82 million or $0.53 per diluted share for the third quarter ended September 30, 2006. For the nine months ended September 30, 2007 First Defiance had net income of $10.35 million or $1.44 per diluted share compared to $11.63 million or $1.62 per diluted share for the nine month period ended September 30, 2006.
“The results for our third quarter were disappointing,” said William J. Small Chairman, President and Chief Executive Officer. “Our net interest margin dropped 11 basis points from the second quarter of this year, we recognized a higher than normal level of provision expense, and we had write-downs in the value of our other real estate owned. Start-up costs associated with our new branch in Fort Wayne, Indiana also added to expense in the third quarter. And on top of those items, we’re dealing with the costs of some of the worst flooding our market area has ever experienced.”
Mr. Small continued, “Looking at some of the quarter’s positive accomplishments, our commercial loan activity has picked up significantly and we continue to generate strong deposit growth, including growth in non-interest bearing accounts. Also, we recently announced the signing of a definitive agreement to acquire Adrian, Michigan based Pavilion Bancorp, which extends our First Federal footprint into Michigan.”
Net Interest Income Declines, Quarterly Net Interest Margin Down by 12 Basis Points
Net interest income for the quarter ended September 30, 2007 was $12.0 million compared to $12.2 million in the 2006 third quarter, a decrease of 1.5%. Between the third quarter of 2006 and the third quarter of 2007, average interest-earning assets increased by $33.8 million while interest-bearing liabilities increased by $18.2 million. The average yields on those interest-earning assets increased by nine basis points (from 7.05% for the quarter ended September 30, 2006 to 7.14% for the three month period ended September 30, 2007) while the average cost of interest-bearing liabilities was up 29 basis points period over period (from 3.78% in the 2006 third quarter to 4.07% in the same period of 2007).
Net interest margin for the quarter ended September 30, 2007 was 3.47%, a 12 basis point decline from the 2006 third quarter margin of 3.59% and an 11 basis point drop from the 2007
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Exhibit 99.1
second quarter margin of 3.58%. The interest-rate spread dropped to 3.07% in the 2007 third quarter from 3.27% in the same period in 2006 and from 3.19% in the 2007 second quarter.
“Margin pressure remains a major challenge,” said Mr. Small. “While the yields on our loans dropped slightly from last quarter, our cost of interest-bearing liabilities continued to increase, up six basis points from the 2007 second quarter. Net interest income this quarter also was negatively impacted by an increase in the balance of loans that were delinquent by more than 90 days. Our policy is to reverse interest accrued on loans when they become 90 days past due. Those adjustments reduced our interest income by $325,000 in the 2007 third quarter compared to $93,000 in last year’s third quarter and $167,000 in the 2007 second quarter.”
“Growth of non-interest bearing deposits is one of our most important initiatives. I am pleased to report that the average balance of our non-interest bearing deposits increased to $103.2 million in the 2007 third quarter, up from $94.0 million during the same period of 2006 and $101.6 million in the 2007 second quarter.”
“Although loan growth continues to be slower than we planned, commercial real estate and commercial loan balances both grew markedly in the 2007 third quarter,” added Mr. Small. “The combined balances of our commercial real estate and commercial loans totaled $860.8 million at September 30, 2007, up $22.7 million since the end of June and up $48.0 million from the beginning of the year. That growth has been partially offset by a decline in our one-to-four family mortgage loan balances, which at $230.1 million are $20.7 million lower than what it was at the end of December.”
Provision for Loan Losses Increased, Credit Quality Ratios Decline
First Defiance increased its provision for loan losses by $298,000 from the level recorded in the 2006 third quarter and also recorded $285,000 related to either write-downs in value of or expenses associated with other real estate owned (OREO). By comparison, OREO related expenses in the 2006 third quarter were just $19,000.
Non-performing assets increased to $11.9 million at September 30, 2007 from $9.8 million at June 30, 2007. Non performing loans increased to $8.5 million at September 30, 2007 from $6.4 million at June 30, 2007 while OREO increased to $3.4 million from $3.3 million. Credit quality ratios declined from the previous quarter as the allowance for loan losses to non-performing assets decreased to 112.7% at September 30, 2007, from 137.6% at June 30, 2007, and non-performing assets to total assets increased to 0.75% at September 30, 2007, from 0.63% at June 30, 2007.
“This level of non-performing assets is not acceptable to us,” said Mr. Small. “We are monitoring our asset quality on a continuous basis through our asset review committee and we have developed work-out strategies on a number of these loans. Of the $8.5 million in non-accrual loans, two relationships make up $5 million. And while we believe both relationships are adequately reserved, they will each take time to work out.”
“We do not make and have not made sub-prime loans, but that does not mean we are immune to the problems caused by the issues in that market,” stated Mr. Small. “Residential
2
Exhibit 99.1
property values in our area are under pressure. Related to that, we recognized $215,000 of losses or write-downs in the value of OREO property. We will continue to monitor this situation very closely.”
First Defiance’s level of net charge-offs in the 2007 third quarter was $661,000 ($749,000 of charge-offs, netted with $88,000 of recoveries) compared to net charge-offs of $910,000 in the 2007 second quarter and $314,000 in the 2006 third quarter. Of the $749,000 of gross loans charged off in the 2007 third quarter, $363,000 had no previously recorded allowance. The $671,000 provision for loan losses in the 2007 third quarter is slightly higher than recent quarterly provisions. Of the $671,000 of provision expense, $163,000 relates to general reserves recorded against growth in the loan portfolio and $363,000 relates to the charge-off of loans not previously included in the allowance.
“We’re reiterating the outlook that we announced last quarter. Over time, we believe the level of our non-performing assets will decline but that I don’t anticipate any substantial improvement in this area over the next few quarters,” said Mr. Small. “Several of the large credits that are past due are difficult ones to resolve, primarily because of the collateral involved and the length of time it is taking for foreclosure proceedings in certain counties in our market area. I remain confident that our credit quality is sound and that our allowance for loan losses is appropriate. With a commercial portfolio the size of ours, credit issues like the ones we’re dealing with will happen in the normal course of business.”
Fee Income Continues to Improve
Total non-interest income increased to $5.6 million in the 2007 third quarter, compared with $5.1 million in the same period in 2006. The increase in non-interest income resulted from service charges, which increased by $184,000 or 7.1% and insurance and investment sales commissions, which increased by $199,000 or 20.3%. The growth in insurance and investment income is due to the February acquisition of the Huber, Harger, Welt and Smith Insurance Agency, located in Bowling Green, Ohio.
“Non-interest income growth is critical to our success with the margin pressure we’re experiencing,” said Mr. Small. “Initiatives to improve fee income continued to produce results in the just-completed quarter. Our overdraft privilege program continues to be a success and we have implemented more competitive fees in other areas. The level of non-interest income generated in the 2007 third quarter is consistent with our quarterly expectation for income from these areas.”
Non-Interest Expenses Up by 10.9%, Including $240,000 related to Northwest Ohio Flooding
Non-interest expense in the 2007 third quarter included $220,000 of direct expenses related to late August flooding which significantly damaged the Company’s branch facilities in downtown Findlay, Ohio and in Ottawa, Ohio. The quarterly after-tax impact of the flooding was $156,000, or $0.02 per diluted share. These amounts included the write-off of damaged furniture and computer equipment at both branches, clean-up expenses, and expenses to repair or replace heating and air conditioning units, drywall, window coverings, wallpaper and carpet. In addition to the direct flood expenses, First Defiance made contributions totaling $20,000 to social service agencies in Hancock and Putnam Counties to assist with the disaster recovery efforts in those
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Exhibit 99.1
communities. Management estimates that additional pre-tax expense of $290,000 will be incurred in the fourth quarter to restore the downtown Findlay facility to its pre-flood condition. The expenses recorded are net of anticipated insurance proceeds. The damage was caused by the worst flooding in a century of Ohio’s Blanchard River and was not covered by insurance.
Overall, non-interest expense increased to $12.3 million for the 2007 third quarter compared to $11.1 million for the same period in 2006. Compensation and benefits accounted for $213,000 of the increase, the result of the acquisition of the Bowling Green insurance agency and the staffing of the Fort Wayne, Indiana branch which opened in August. Occupancy costs increased from $1.28 million in the 2006 third quarter to $1.52 million primarily due to the recording of clean-up costs and repairs associated with the flood which totaled $133,000, net of insurance proceeds, as well as costs associated with the newly leased facility in Fort Wayne and occupancy costs of the Bowling Green insurance agency. Other significant increases between the 2006 and 2007 third quarters include OREO expenses (up $266,000), advertising and public relations expense (up $179,000) and attorney fees (up $90,000). First Defiance’s efficiency ratio for the 2007 third quarter was 69.16%.
Year-To-Date Results
For the nine month period ended September 30, 2007, net interest income totaled $36.2 million, a $603,000 decline from the first nine months of 2006. Net interest income declined despite the fact that average earning assets increased by more than $35 million between the first nine months of 2006 and the same period in 2007. Net interest margin for year to date through September 30, 2007 was 3.56%, down 15 basis points from the 3.71% margin realized in same year-to-date period in 2006
The provision for loan losses for the first nine months of 2007 was $1.7 million, which was $266,000 higher than the provision recorded during that same period in 2006.
Non-interest income for the 2007 nine-month period was $16.9 million compared to $14.7 million during the same period of 2006. The increase is especially significant considering that the 2006 period included the non-recurring gain of $400,000 from the sale of the Company’s credit card portfolio. Most of the increase was in service fees and other charges, which were $8.0 million for the nine months of 2007 compared to $6.7 million during that period in 2006. In addition, mortgage banking income increased by $236,000 and insurance commission income increased by $601,000 between 2006 and 2007.
Non-interest expense increased to $36.0 million for nine-month period ended September 30, 2007 from $32.6 million in 2006. Compensation and benefits increased by $1.4 million year-over-year, to $19.6 million for the nine months of 2007 from $18.3 million in the same period in 2006. Other significant increases in non-interest expense over the first nine months of 2007 included occupancy costs (up $531,000 to $4.3 million), advertising and public relations (up $354,000 to $1.35 million) and check charge-offs and other related costs (up $85,000 to $340,000). In addition, First Defiance recorded $359,000 for a full nine months of expense associated with its overdraft privilege program in 2007 compared to just $252,000 recorded in 2006 for less than seven full months of the program.
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Exhibit 99.1
Total Assets at $1.58 Billion
Total assets at September 30, 2007 totaled $1.58 billion, an increase from $1.53 billion at December 31, 2006. Net loans receivable (excluding loans held for sale) were $1.25 billion at September 30, 2007 compared to $1.23 billion at December 31, 2006. Deposits over that time period increased to $1.21 billion at September 30, 2007 from $1.14 billion at December 31, 2006. Retail deposits (excluding brokered Certificates of Deposit) at September 30, 2007 were $1.20 billion compared to $1.12 billion at December 31, 2006. Federal Home Loan Bank advances were $128.5 million at September 30, 2007 compared with $162.2 million at December 31, 2006 while subordinated debt was $36.1 million at September 30, 2007 compared to $20.7 million at December 31, 2006. Total shareholders’ equity increased to $164.7 million at September 30, 2007 compared to $159.8 million at the end of 2006. Also at September 30, 2007, goodwill and other intangible assets totaled $40.2 million compared to $38.5 million at December 31, 2006.
Pavilion Bancorp Acquisition, Pending Charter Conversion Announced
On October 2, 2007, First Defiance entered into an agreement to acquire Pavilion Bancorp, Inc. and its wholly owned subsidiary The Bank of Lenawee, both headquartered in Adrian, Michigan. The Bank of Lenawee has six banking offices in Lenawee County, Michigan: two in Adrian, two in Tecumseh and one each in Morenci and Hudson; and two banking offices in Hillsdale County, Michigan: one each in Hillsdale and Waldron. Combined, those offices had $232 million in deposits and $243 million in loans as of June 30, 2007. The purchase price of Pavilion is valued at $55.7 million based on the October 2, 2007 First Defiance stock price. Pavilion shareholders will receive $37.50 in cash and 1.4209 shares of First Defiance stock for each share of Pavilion Bancorp they own. First Defiance expects the transaction to be accretive to earnings in 2008 with no repurchase assumptions or revenue synergies assumed. Annual pre-tax expense reductions are estimated to be approximately $3.5 million with approximately 75% of those to be realized in 2008. It is estimated that one-time costs, including acquisition-related and restructuring charges, will not exceed $3.8 million on a pre-tax basis over the integration period.
“The Pavilion Bancorp acquisition is consistent with our strategy to grow in existing and adjacent markets and this acquisition brings us good opportunities,” said Mr. Small. “Bank of Lenawee has a solid reputation and a base of commercial and retail customers that is similar to our existing franchise. We will continue with a local decision-making strategy that the market is accustomed to and we look forward to working with the staff, customers and shareholders for a successful transition.”
Management anticipates closing the Pavilion transaction late in the 2008 first quarter following the required regulatory and shareholder approvals. Upon completion of the transaction, on a pro forma basis using June 30, 2007 data, First Defiance will have $1.83 billion in assets and $1.40 billion in total deposits.
The Company also announced its intent to convert from its current thrift charter to a national bank charter. It is expected that that conversion will be completed prior to the closing of the Pavilion acquisition. The charter conversion should have minimal impact on the Company’s business plan, operations, and branding.
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Exhibit 99.1
Looking Ahead
“This continues to be a very difficult banking environment,” stated Mr. Small. “Margins will continue to be under pressure, delinquencies will remain higher than we are comfortable with and competition will continue to be fierce. Overall I am optimistic about our markets. Loan demand on the commercial side is strong, but the inventory of unsold homes in our market remains high, which is impacting some economic growth. As that situation works its way out, which I expect will happen gradually over the next 12 to 18 months, I think we’ll see improvement and stronger growth in our local economy. Our priorities are to grow core deposits, especially non-interest bearing deposits, and continue to grow non-interest income. We are focused on building franchise value through the execution of our strategy. Our managers are committed to our goal of being the best community bank in each of the markets we serve.”
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, October 16, 2007 to discuss the earnings results and business trends. The conference call may be accessed by calling 877-407-0782. The conference identification number for the call is 257073. Participants should be prepared to provide the conference identification number to join the call.
Internet access to the call is also available (in listen-only mode) at the following Web address: http://www.vcall.com/IC/CEPage.asp?ID=121543.
The audio replay of the Internet Webcast will be available at www.fdef.com until November 2, 2007
About First Defiance Financial Corp.
First Defiance Financial Corp., headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance & Investments. First Federal operates 27 full service branches and 35 ATM locations in northwest Ohio. First Insurance & Investments is a full service insurance agency with offices in Defiance and Bowling Green Ohio.
For more information, visit the company’s Web site at www.fdef.com.
-Financial Statements and Highlights Follow-
Safe Harbor Statement
This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: future movements of interest rates and particularly 10-year Treasury notes, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a rising interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell REO properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability of the Company to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those inherent in general and local banking, insurance and mortgage conditions, competitive factors specific to markets in which the Company and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions and other risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission (SEC) filings, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. One or more of these factors have affected or could in the future affect the Company’s business and
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financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
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Consolidated Balance Sheets | ||||||||||||
First Defiance Financial Corp. | ||||||||||||
September 30, | December 31, | September 30, | ||||||||||
(in thousands) | 2007 | 2006 | 2006 | |||||||||
Assets | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Cash and amounts due from depository institutions | $ | 30,558 | $ | 47,668 | $ | 41,579 | ||||||
| Interest-bearing deposits | 29,379 | 2,355 | 163 | |||||||||
59,937 | 50,023 | 41,742 | ||||||||||
| Securities | ||||||||||||
| Available-for sale, carried at fair value | 111,236 | 110,682 | 118,429 | |||||||||
| Held-to-maturity, carried at amortized cost | 1,236 | 1,441 | 1,588 | |||||||||
112,472 | 112,123 | 120,017 | ||||||||||
| Loans | 1,264,872 | 1,239,889 | 1,236,712 | |||||||||
| Allowance for loan losses | (13,427 | ) | (13,579 | ) | (14,298 | ) | ||||||
| Loans, net | 1,251,445 | 1,226,310 | 1,222,414 | |||||||||
| Loans held for sale | 7,426 | 3,426 | 3,669 | |||||||||
| Mortgage servicing rights | 5,917 | 5,529 | 5,430 | |||||||||
| Accrued interest receivable | 8,102 | 6,984 | 7,430 | |||||||||
| Federal Home Loan Bank stock and other interest-bearing assets | 18,586 | 18,586 | 18,309 | |||||||||
| Bank Owned Life Insurance | 28,315 | 25,326 | 25,076 | |||||||||
| Office properties and equipment | 38,287 | 34,899 | 34,893 | |||||||||
| Real estate and other assets held for sale | 3,392 | 2,392 | 3,026 | |||||||||
| Goodwill | 36,515 | 35,090 | 35,124 | |||||||||
| Core deposit and other intangibles | 3,717 | 3,397 | 3,577 | |||||||||
| Other assets | 5,835 | 3,794 | 3,972 | |||||||||
Total Assets | $ | 1,579,946 | $ | 1,527,879 | $ | 1,524,679 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
| Non-interest-bearing deposits | $ | 109,128 | $ | 106,328 | $ | 102,664 | ||||||
| Interest-bearing deposits | 1,099,036 | 1,032,117 | 1,027,862 | |||||||||
| Total deposits | 1,208,164 | 1,138,445 | 1,130,526 | |||||||||
| Advances from Federal Home Loan Bank | 128,461 | 162,228 | 176,442 | |||||||||
| Notes payable and other interest-bearing liabilities | 24,645 | 30,424 | 23,607 | |||||||||
| Subordinated debentures | 36,083 | 20,619 | 20,619 | |||||||||
| Advance payments by borrowers for tax and insurance | 430 | 667 | 393 | |||||||||
| Deferred taxes | 1,292 | 1,295 | 1,050 | |||||||||
| Other liabilities | 16,165 | 14,376 | 13,887 | |||||||||
Total liabilities | 1,415,240 | 1,368,054 | 1,366,524 | |||||||||
| Stockholders’ Equity | ||||||||||||
| Preferred stock | - | - | - | |||||||||
| Common stock, net | 117 | 117 | 117 | |||||||||
| Additional paid-in-capital | 112,587 | 110,285 | 110,147 | |||||||||
| Stock acquired by ESOP | (202 | ) | (628 | ) | (629 | ) | ||||||
| Accumulated other comprehensive income | (699 | ) | (671 | ) | (67 | ) | ||||||
| Retained earnings | 124,899 | 120,112 | 117,912 | |||||||||
| Treasury stock, at cost | (71,996 | ) | (69,390 | ) | (69,325 | ) | ||||||
Total stockholders’ equity | 164,706 | 159,825 | 158,155 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,579,946 | $ | 1,527,879 | $ | 1,524,679 | ||||||
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Consolidated Statements of Income (Unaudited) | ||||||||||||||||
First Defiance Financial Corp. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(in thousands, except per share amounts) | 2007 | 2006 | 2007 | 2006 | ||||||||||||
| Interest Income: | ||||||||||||||||
| Loans | $ | 22,983 | $ | 22,341 | $ | 67,882 | $ | 63,605 | ||||||||
| Investment securities | 1,439 | 1,482 | 4,290 | 4,240 | ||||||||||||
| Interest-bearing deposits | 262 | 7 | 483 | 145 | ||||||||||||
| FHLB stock dividends | 305 | 262 | 898 | 765 | ||||||||||||
| Total interest income | 24,989 | 24,092 | 73,553 | 68,755 | ||||||||||||
| Interest Expense: | ||||||||||||||||
| Deposits | 10,536 | 9,140 | 30,130 | 23,835 | ||||||||||||
| FHLB advances and other | 1,636 | 2,256 | 5,253 | 6,778 | ||||||||||||
| Subordinated debentures | 597 | 343 | 1,518 | 962 | ||||||||||||
| Notes Payable | 193 | 144 | 519 | 403 | ||||||||||||
| Total interest expense | 12,962 | 11,883 | 37,420 | 31,978 | ||||||||||||
| Net interest income | 12,027 | 12,209 | 36,133 | 36,777 | ||||||||||||
| Provision for loan losses | 671 | 373 | 1,704 | 1,438 | ||||||||||||
| Net interest income after provision for loan losses | 11,356 | 11,836 | 34,429 | 35,339 | ||||||||||||
| Non-interest Income: | ||||||||||||||||
| Service fees and other charges | 2,764 | 2,580 | 7,997 | 6,658 | ||||||||||||
| Mortgage banking income | 921 | 923 | 2,780 | 2,544 | ||||||||||||
| Gain on sale of non-mortgage loans | 138 | 63 | 204 | 500 | ||||||||||||
| Gain on sale of securities | 21 | - | 21 | - | ||||||||||||
| Insurance and investment sales commissions | 1,180 | 981 | 4,244 | 3,643 | ||||||||||||
| Trust income | 95 | 76 | 280 | 232 | ||||||||||||
| Income from Bank Owned Life Insurance | 321 | 250 | 929 | 730 | ||||||||||||
| Other non-interest income | 144 | 187 | 407 | 395 | ||||||||||||
| Total Non-interest Income | 5,584 | 5,060 | 16,862 | 14,702 | ||||||||||||
| Non-interest Expense: | ||||||||||||||||
| Compensation and benefits | 6,424 | 6,211 | 19,610 | 18,251 | ||||||||||||
| Occupancy | 1,516 | 1,278 | 4,324 | 3,793 | ||||||||||||
| State franchise tax | 355 | 331 | 1,074 | 995 | ||||||||||||
| Data processing | 941 | 903 | 2,838 | 2,760 | ||||||||||||
| Amortization of intangibles | 167 | 180 | 481 | 539 | ||||||||||||
| Other non-interest expense | 2,893 | 2,188 | 7,623 | 6,291 | ||||||||||||
| Total Non-interest Expense | 12,296 | 11,091 | 35,950 | 32,629 | ||||||||||||
| Income before income taxes | 4,644 | 5,805 | 15,341 | 17,412 | ||||||||||||
| Income taxes | 1,515 | 1,982 | 4,995 | 5,785 | ||||||||||||
| Net Income | $ | 3,129 | $ | 3,823 | $ | 10,346 | $ | 11,627 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.44 | $ | 0.54 | $ | 1.46 | $ | 1.66 | ||||||||
| Diluted | $ | 0.44 | $ | 0.53 | $ | 1.44 | $ | 1.62 | ||||||||
| Average Shares Outstanding: | ||||||||||||||||
| Basic | 7,080 | 7,032 | 7,101 | 7,020 | ||||||||||||
| Diluted | 7,171 | 7,146 | 7,201 | 7,161 | ||||||||||||
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Financial Summary and Comparison | ||||||||||||||||||||||||
First Defiance Financial Corp. | ||||||||||||||||||||||||
Three Months Ended | Nine months ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
(dollars in thousands, except per share data) | 2007 | 2006 | % change | 2007 | 2006 | % change | ||||||||||||||||||
Summary of Operations | ||||||||||||||||||||||||
| Tax-equivalent interest income (1) | 25,177 | 24,240 | 3.9 | 74,092 | 69,202 | 7.1 | ||||||||||||||||||
| Interest expense | 12,962 | 11,883 | 9.1 | 37,420 | 31,978 | 17.0 | ||||||||||||||||||
| Tax-equivalent net interest income (1) | 12,215 | 12,357 | (1.1 | ) | 36,672 | 37,224 | (1.5 | ) | ||||||||||||||||
| Provision for loan losses | 671 | 373 | 79.9 | 1,704 | 1,438 | 18.5 | ||||||||||||||||||
| Tax-equivalent NII after provision for loan loss (1) | 11,544 | 11,984 | (3.7 | ) | 34,968 | 35,786 | (2.3 | ) | ||||||||||||||||
| Securities gains | 21 | - | NM | 21 | - | NM | ||||||||||||||||||
| Non-interest income-excluding securities gains | 5,563 | 5,060 | 9.9 | 16,841 | 14,702 | 14.5 | ||||||||||||||||||
| Non-interest expense | 12,296 | 11,091 | 10.9 | 35,950 | 32,629 | 10.2 | ||||||||||||||||||
| Income taxes | 1,515 | 1,982 | (23.6 | ) | 4,995 | 5,785 | (13.7 | ) | ||||||||||||||||
| Net Income | 3,129 | 3,823 | (18.2 | ) | 10,346 | 11,627 | (11.0 | ) | ||||||||||||||||
| Tax equivalent adjustment (1) | 188 | 148 | 27.0 | 539 | 447 | 20.6 | ||||||||||||||||||
At Period End | ||||||||||||||||||||||||
| Assets | 1,579,946 | 1,524,679 | 3.6 | |||||||||||||||||||||
| Earning assets | 1,432,735 | 1,378,870 | 3.9 | |||||||||||||||||||||
| Loans | 1,264,872 | 1,236,712 | 2.3 | |||||||||||||||||||||
| Allowance for loan losses | 13,427 | 14,298 | (6.1 | ) | ||||||||||||||||||||
| Deposits | 1,208,164 | 1,130,526 | 6.9 | |||||||||||||||||||||
| Stockholders’ equity | 164,706 | 158,155 | 4.1 | |||||||||||||||||||||
Average Balances | ||||||||||||||||||||||||
| Assets | 1,550,174 | 1,512,644 | 2.5 | 1,529,404 | 1,488,779 | 2.7 | ||||||||||||||||||
| Earning assets | 1,397,521 | 1,363,714 | 2.5 | 1,377,499 | 1,342,146 | 2.6 | ||||||||||||||||||
| Deposits and interest-bearing liabilities | 1,367,421 | 1,340,020 | 2.0 | 1,347,872 | 1,319,138 | 2.2 | ||||||||||||||||||
| Loans | 1,244,531 | 1,225,456 | 1.6 | 1,233,987 | 1,204,142 | 2.5 | ||||||||||||||||||
| Deposits | 1,177,594 | 1,124,397 | 4.7 | 1,154,718 | 1,093,469 | 5.6 | ||||||||||||||||||
| Stockholders’ equity | 164,751 | 156,017 | 5.6 | 163,490 | 154,293 | 6.0 | ||||||||||||||||||
| Stockholders’ equity / assets | 10.63 | % | 10.31 | % | 3.0 | 10.69 | % | 10.36 | % | 3.1 | ||||||||||||||
Per Common Share Data | ||||||||||||||||||||||||
| Net Income | ||||||||||||||||||||||||
| Basic | $ | 0.44 | $ | 0.54 | (18.5 | ) | $ | 1.46 | $ | 1.66 | (12.0 | ) | ||||||||||||
| Diluted | 0.44 | 0.53 | (17.0 | ) | $ | 1.44 | 1.62 | (11.1 | ) | |||||||||||||||
| Dividends | 0.25 | 0.24 | 4.2 | 0.75 | 0.72 | 4.2 | ||||||||||||||||||
| Market Value: | ||||||||||||||||||||||||
| High | $ | 29.64 | $ | 28.69 | 3.3 | $ | 30.25 | $ | 30.29 | (0.1 | ) | |||||||||||||
| Low | 23.99 | 25.18 | (4.7 | ) | 23.99 | 25.09 | (4.4 | ) | ||||||||||||||||
| Close | 27.00 | 28.53 | (5.4 | ) | 27.00 | 28.53 | (5.4 | ) | ||||||||||||||||
| Book Value | 23.21 | 22.16 | 4.7 | 23.21 | 22.16 | 4.7 | ||||||||||||||||||
| Tangible Book Value | 17.54 | 16.74 | 4.8 | 17.54 | 16.74 | 4.8 | ||||||||||||||||||
| Shares outstanding, end of period (000) | 7,095 | 7,140 | (0.6 | ) | 7,095 | 7,140 | (0.6 | ) | ||||||||||||||||
| Performance Ratios (annualized) | ||||||||||||||||||||||||
| Tax-equivalent net interest margin (1) | 3.47 | % | 3.59 | % | (3.5 | ) | 3.56 | % | 3.71 | % | (4.1 | ) | ||||||||||||
| Return on average assets | 0.80 | % | 1.00 | % | (19.9 | ) | 0.90 | % | 1.04 | % | (13.0 | ) | ||||||||||||
| Return on average equity | 7.53 | % | 9.72 | % | (22.5 | ) | 8.46 | % | 10.08 | % | (16.1 | ) | ||||||||||||
| Efficiency ratio (2) | 69.16 | % | 63.68 | % | 8.6 | 67.18 | % | 62.84 | % | 6.9 | ||||||||||||||
| Effective tax rate | 32.62 | % | 34.14 | % | (4.4 | ) | 32.56 | % | 33.22 | % | (2.0 | ) | ||||||||||||
| Dividend payout ratio (basic) | 56.82 | % | 44.44 | % | 27.9 | 51.37 | % | 43.37 | % | 18.4 | ||||||||||||||
| (1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35% | ||||||||||||||||||||||||
| (2) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net and asset sales gains, net. | ||||||||||||||||||||||||
| NM Percentage change not meaningful | ||||||||||||||||||||||||
10
Income from Mortgage Banking | ||||||||||||||||
| Revenue from sales and servicing of mortgage loans consisted of the following: | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollars in thousands) | 2007 | 2006 | 2007 | 2006 | ||||||||||||
| Gain from sale of mortgage loans | $ | 674 | $ | 688 | $ | 1,992 | $ | 1,808 | ||||||||
| Mortgage loan servicing revenue (expense): | ||||||||||||||||
| Mortgage loan servicing revenue | 422 | 405 | 1,266 | 1,165 | ||||||||||||
| Amortization of mortgage servicing rights | (150 | ) | (154 | ) | (480 | ) | (455 | ) | ||||||||
| Mortgage servicing rights valuation adjustments | (25 | ) | (16 | ) | 2 | 26 | ||||||||||
247 | 235 | 788 | 736 | |||||||||||||
| Total revenue from sale and servicing of mortgage loans | $ | 921 | $ | 923 | $ | 2,780 | $ | 2,544 | ||||||||
11
Yield Analysis | ||||||||||||||||||||||||
First Defiance Financial Corp. | ||||||||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||
| Average | Yield | Average | Yield | |||||||||||||||||||||
| Balance | Interest(1) | Rate(2) | Balance | Interest(1) | Rate(2) | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
| Loans receivable | $ | 1,244,531 | $ | 22,995 | 7.33 | % | $ | 1,225,456 | $ | 22,346 | 7.23 | % | ||||||||||||
| Securities | 112,645 | 1,615 | 5.66 | % | 119,628 | 1,625 | 5.35 | % | ||||||||||||||||
| Interest Bearing Deposits | 21,760 | 262 | 4.78 | % | 580 | 7 | 4.79 | % | ||||||||||||||||
| FHLB stock | 18,585 | 305 | 6.51 | % | 18,050 | 262 | 5.76 | % | ||||||||||||||||
| Total interest-earning assets | 1,397,521 | 25,177 | 7.14 | % | 1,363,714 | 24,240 | 7.05 | % | ||||||||||||||||
| Non-interest-earning assets | 152,653 | 148,930 | ||||||||||||||||||||||
| Total assets | $ | 1,550,174 | $ | 1,512,644 | ||||||||||||||||||||
Deposits and Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest bearing deposits | $ | 1,074,413 | $ | 10,536 | 3.89 | % | $ | 1,030,433 | $ | 9,140 | 3.52 | % | ||||||||||||
| FHLB advances and other | 128,597 | 1,636 | 5.05 | % | 175,255 | 2,256 | 5.11 | % | ||||||||||||||||
| Other Borrowings | 24,935 | 193 | 3.07 | % | 19,749 | 144 | 2.89 | % | ||||||||||||||||
| Subordinated debentures | 36,295 | 597 | 6.53 | % | 20,619 | 343 | 6.60 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,264,240 | 12,962 | 4.07 | % | 1,246,056 | 11,883 | 3.78 | % | ||||||||||||||||
| Non-interest bearing deposits | 103,181 | - | - | 93,964 | - | - | ||||||||||||||||||
| Total including non-interest-bearing demand deposits | 1,367,421 | 12,962 | 3.76 | % | 1,340,020 | 11,883 | 3.52 | % | ||||||||||||||||
| Other non-interest-bearing liabilities | 18,002 | 16,607 | ||||||||||||||||||||||
| Total liabilities | 1,385,423 | 1,356,627 | ||||||||||||||||||||||
| Stockholders' equity | 164,751 | 156,017 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,550,174 | $ | 1,512,644 | ||||||||||||||||||||
| Net interest income; interest rate spread | $ | 12,215 | 3.07 | % | $ | 12,357 | 3.27 | % | ||||||||||||||||
| Net interest margin (3) | 3.47 | % | 3.59 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest bearing liabilities | 111 | % | 109 | % | ||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||
| Average | Yield | Average | Yield | |||||||||||||||||||||
| Balance | Interest(1) | Rate(2) | Balance | Interest(1) | Rate(2) | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
| Loans receivable | $ | 1,233,987 | $ | 67,916 | 7.36 | % | $ | 1,204,142 | $ | 63,622 | 7.06 | % | ||||||||||||
| Securities | 112,466 | 4,795 | 5.68 | % | 116,215 | 4,670 | 5.34 | % | ||||||||||||||||
| Interest Bearing Deposits | 12,461 | 483 | 5.18 | % | 3,992 | 145 | 4.86 | % | ||||||||||||||||
| FHLB stock | 18,585 | 898 | 6.46 | % | 17,797 | 765 | 5.75 | % | ||||||||||||||||
| Total interest-earning assets | 1,377,499 | 74,092 | 7.19 | % | 1,342,146 | 69,202 | 6.89 | % | ||||||||||||||||
| Non-interest-earning assets | 151,905 | 146,633 | ||||||||||||||||||||||
| Total assets | $ | 1,529,404 | $ | 1,488,779 | ||||||||||||||||||||
Deposits and Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest bearing deposits | $ | 1,053,810 | $ | 30,130 | 3.82 | % | $ | 999,977 | $ | 23,835 | 3.19 | % | ||||||||||||
| FHLB advances and other | 139,087 | 5,253 | 5.05 | % | 185,826 | 6,778 | 4.88 | % | ||||||||||||||||
| Other Borrowings | 22,920 | 519 | 3.03 | % | 19,224 | 403 | 2.80 | % | ||||||||||||||||
| Subordinated debentures | 31,147 | 1,518 | 6.52 | % | 20,619 | 962 | 6.24 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,246,964 | 37,420 | 4.01 | % | 1,225,646 | 31,978 | 3.49 | % | ||||||||||||||||
| Non-interest bearing deposits | 100,908 | - | - | 93,492 | - | - | ||||||||||||||||||
| Total including non-interest-bearing demand deposits | 1,347,872 | 37,420 | 3.71 | % | 1,319,138 | 31,978 | 3.24 | % | ||||||||||||||||
| Other non-interest-bearing liabilities | 18,042 | 15,348 | ||||||||||||||||||||||
| Total liabilities | 1,365,914 | 1,334,486 | ||||||||||||||||||||||
| Stockholders' equity | 163,490 | 154,293 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,529,404 | $ | 1,488,779 | ||||||||||||||||||||
| Net interest income; interest rate spread | $ | 36,672 | 3.18 | % | $ | 37,224 | 3.40 | % | ||||||||||||||||
| Net interest margin (3) | 3.56 | % | 3.71 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest bearing liabilities | 110 | % | 110 | % | ||||||||||||||||||||
(1) Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%. | ||||||||||||||||||||||||
| (2) Annualized | ||||||||||||||||||||||||
| (3) Net interest margin is net interest income divided by average interest-earning assets. | ||||||||||||||||||||||||
12
Selected Quarterly Information | ||||||||||||||||||||
First Defiance Financial Corp. | ||||||||||||||||||||
(dollars in thousands, except per share data) | 3rd Qtr 2007 | 2nd Qtr 2007 | 1st Qtr 2007 | 4th Qtr 2006 | 3rd Qtr 2006 | |||||||||||||||
Summary of Operations | ||||||||||||||||||||
| Tax-equivalent interest income (1) | $ | 25,177 | $ | 24,709 | $ | 24,207 | $ | 24,459 | $ | 24,240 | ||||||||||
| Interest expense | 12,962 | 12,410 | 12,049 | 12,065 | 11,883 | |||||||||||||||
| Tax-equivalent net interest income (1) | 12,215 | 12,299 | 12,158 | 12,394 | 12,357 | |||||||||||||||
| Provision for loan losses | 671 | 575 | 457 | 318 | 373 | |||||||||||||||
| Tax-equivalent NII after provision for loan losses (1) | 11,544 | 11,724 | 11,701 | 12,076 | 11,984 | |||||||||||||||
| Investment securities gains | 21 | - | - | (2 | ) | - | ||||||||||||||
| Non-interest income (excluding securities gains/losses) | 5,563 | 5,670 | 5,607 | 4,924 | 5,060 | |||||||||||||||
| Non-interest expense | 12,296 | 11,882 | 11,771 | 11,210 | 11,091 | |||||||||||||||
| Income taxes | 1,515 | 1,724 | 1,757 | 1,666 | 1,982 | |||||||||||||||
| Net income | 3,129 | 3,611 | 3,606 | 3,973 | 3,823 | |||||||||||||||
| Tax equivalent adjustment (1) | 188 | 177 | 174 | 149 | 148 | |||||||||||||||
At Period End | ||||||||||||||||||||
| Total assets | $ | 1,579,946 | $ | 1,540,675 | $ | 1,518,414 | $ | 1,527,879 | $ | 1,524,679 | ||||||||||
| Earning assets | 1,432,735 | 1,385,803 | 1,372,475 | 1,376,379 | 1,378,707 | |||||||||||||||
| Loans | 1,264,872 | 1,245,027 | 1,237,072 | 1,239,889 | 1,236,712 | |||||||||||||||
| Allowance for loan losses | 13,427 | 13,417 | 13,752 | 13,579 | 14,298 | |||||||||||||||
| Deposits | 1,208,164 | 1,167,198 | 1,146,319 | 1,138,445 | 1,130,526 | |||||||||||||||
| Stockholders’ equity | 164,706 | 164,657 | 164,540 | 159,825 | 158,155 | |||||||||||||||
| Stockholders’ equity / assets | 10.42 | % | 10.69 | % | 10.84 | % | 10.46 | % | 10.37 | % | ||||||||||
| Goodwill | 36,515 | 36,551 | 36,464 | 35,090 | 35,124 | |||||||||||||||
Average Balances | ||||||||||||||||||||
| Total assets | $ | 1,550,174 | $ | 1,527,863 | $ | 1,510,176 | $ | 1,516,709 | $ | 1,512,644 | ||||||||||
| Earning assets | 1,397,521 | 1,376,030 | 1,358,948 | 1,364,064 | 1,363,714 | |||||||||||||||
| Deposits and interest-bearing liabilities | 1,367,421 | 1,344,186 | 1,332,005 | 1,340,179 | 1,340,020 | |||||||||||||||
| Loans | 1,244,531 | 1,231,192 | 1,226,240 | 1,225,567 | 1,225,456 | |||||||||||||||
| Deposits | 1,177,594 | 1,157,793 | 1,128,765 | 1,125,641 | 1,124,397 | |||||||||||||||
| Stockholders’ equity | 164,751 | 164,591 | 161,128 | 159,314 | 156,017 | |||||||||||||||
| Stockholders’ equity / assets | 10.63 | % | 10.77 | % | 10.67 | % | 10.50 | % | 10.31 | % | ||||||||||
Per Common Share Data | ||||||||||||||||||||
| Net Income: | ||||||||||||||||||||
| Basic | $ | 0.44 | $ | 0.51 | $ | 0.51 | $ | 0.56 | $ | 0.54 | ||||||||||
| Diluted | 0.44 | 0.50 | 0.50 | 0.55 | 0.53 | |||||||||||||||
| Dividends | 0.25 | 0.25 | 0.25 | 0.25 | 0.24 | |||||||||||||||
| Market Value: | ||||||||||||||||||||
| High | $ | 29.64 | $ | 30.00 | $ | 30.25 | $ | 30.70 | $ | 28.69 | ||||||||||
| Low | 23.99 | 26.71 | 27.25 | 26.87 | 25.18 | |||||||||||||||
| Close | 27.00 | 29.82 | 28.70 | 30.25 | 28.53 | |||||||||||||||
| Book Value | 23.21 | 22.94 | 22.77 | 22.38 | 22.16 | |||||||||||||||
| Shares outstanding, end of period (in thousands) | 7,095 | 7,178 | 7,227 | 7,142 | 7,140 | |||||||||||||||
Performance Ratios (annualized) | ||||||||||||||||||||
| Tax-equivalent net interest margin (1) | 3.47 | % | 3.58 | % | 3.59 | % | 3.60 | % | 3.59 | % | ||||||||||
| Return on average assets | 0.80 | % | 0.95 | % | 0.97 | % | 1.04 | % | 1.00 | % | ||||||||||
| Return on average equity | 7.53 | % | 8.80 | % | 9.08 | % | 9.89 | % | 9.72 | % | ||||||||||
| Efficiency ratio (2) | 69.16 | % | 66.12 | % | 66.26 | % | 64.73 | % | 63.68 | % | ||||||||||
| Effective tax rate | 32.62 | % | 32.31 | % | 32.76 | % | 29.54 | % | 34.14 | % | ||||||||||
| Dividend payout ratio (basic) | 56.82 | % | 49.02 | % | 49.02 | % | 44.64 | % | 44.44 | % | ||||||||||
| (1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35% | ||||||||||||||||||||
| (2) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net and asset sales gains, net. | ||||||||||||||||||||
13
Selected Quarterly Information | ||||||||||||||||||||
First Defiance Financial Corp. | ||||||||||||||||||||
(dollars in thousands, except per share data) | 3rd Qtr 2007 | 2nd Qtr 2007 | 1st Qtr 2007 | 4th Qtr 2006 | 3rd Qtr 2006 | |||||||||||||||
Loan Portfolio Composition | ||||||||||||||||||||
| One to four family residential real estate | $ | 230,075 | $ | 234,819 | $ | 243,632 | $ | 250,808 | $ | 260,028 | ||||||||||
| Construction | 15,392 | 16,346 | 14,277 | 17,339 | 16,578 | |||||||||||||||
| Commercial real estate | 592,914 | 583,046 | 579,463 | 579,860 | 568,346 | |||||||||||||||
| Commercial | 267,897 | 255,022 | 242,543 | 232,914 | 231,232 | |||||||||||||||
| Consumer finance | 38,280 | 40,693 | 40,857 | 43,770 | 46,969 | |||||||||||||||
| Home equity and improvement | 127,641 | 123,936 | 123,404 | 122,789 | 120,883 | |||||||||||||||
| Total loans | 1,272,199 | 1,253,862 | 1,244,176 | 1,247,480 | 1,244,036 | |||||||||||||||
| Less: | ||||||||||||||||||||
| Loans in process | 6,301 | 7,761 | 6,012 | 6,409 | 6,118 | |||||||||||||||
| Deferred loan origination fees | 1,026 | 1,074 | 1,092 | 1,182 | 1,206 | |||||||||||||||
| Allowance for loan loss | 13,427 | 13,417 | 13,752 | 13,579 | 14,298 | |||||||||||||||
| Net Loans | $ | 1,251,445 | $ | 1,231,610 | $ | 1,223,320 | $ | 1,226,310 | $ | 1,222,414 | ||||||||||
Allowance for loan loss activity | ||||||||||||||||||||
| Beginning allowance | $ | 13,417 | $ | 13,752 | $ | 13,579 | $ | 14,298 | $ | 14,239 | ||||||||||
| Provision for loan losses | 671 | 575 | 457 | 318 | 373 | |||||||||||||||
| Credit loss charge-offs: | ||||||||||||||||||||
| One to four family residential real estate | 128 | 10 | 85 | 244 | 58 | |||||||||||||||
| Commercial real estate | 586 | 936 | 146 | 664 | 134 | |||||||||||||||
| Commercial | 11 | 81 | 62 | 85 | ||||||||||||||||
| Consumer finance | 25 | 23 | 71 | 95 | 67 | |||||||||||||||
| Home equity and improvement | 10 | 41 | - | 65 | 48 | |||||||||||||||
| Total charge-offs | 749 | 1,021 | 383 | 1,130 | 392 | |||||||||||||||
| Total recoveries | 88 | 111 | 99 | 93 | 78 | |||||||||||||||
| Net charge-offs (recoveries) | 661 | 910 | 284 | 1,037 | 314 | |||||||||||||||
| Ending allowance | $ | 13,427 | $ | 13,417 | $ | 13,752 | $ | 13,579 | $ | 14,298 | ||||||||||
Credit Quality | ||||||||||||||||||||
| Non-accrual loans | $ | 8,523 | $ | 6,427 | $ | 8,211 | $ | 7,283 | $ | 7,018 | ||||||||||
| Loans over 90 days past due and still accruing | - | - | - | - | - | |||||||||||||||
| Total non-performing loans (1) | 8,523 | 6,427 | 8,211 | 7,283 | 7,018 | |||||||||||||||
| Real estate owned (REO) | 3,392 | 3,324 | 2,581 | 2,392 | 3,026 | |||||||||||||||
| Total non-performing assets (1) | $ | 11,915 | $ | 9,751 | $ | 10,792 | $ | 9,675 | $ | 10,044 | ||||||||||
| Net charge-offs | 661 | 910 | 284 | 1,037 | 314 | |||||||||||||||
| Allowance for loan losses / loans | 1.06 | % | 1.08 | % | 1.11 | % | 1.10 | % | 1.16 | % | ||||||||||
| Allowance for loan losses / non-performing assets | 112.69 | % | 137.60 | % | 127.43 | % | 140.35 | % | 142.35 | % | ||||||||||
| Allowance for loan losses / non-performing loans | 157.54 | % | 208.76 | % | 167.48 | % | 186.45 | % | 203.73 | % | ||||||||||
| Non-performing assets / loans plus REO | 0.94 | % | 0.78 | % | 0.87 | % | 0.78 | % | 0.81 | % | ||||||||||
| Non-performing assets / total assets | 0.75 | % | 0.63 | % | 0.71 | % | 0.64 | % | 0.66 | % | ||||||||||
| Net charge-offs / average loans (annualized) | 0.21 | % | 0.30 | % | 0.09 | % | 0.34 | % | 0.10 | % | ||||||||||
Deposit Balances | ||||||||||||||||||||
| Non-interest-bearing demand deposits | $ | 109,128 | $ | 107,111 | $ | 101,089 | $ | 106,328 | $ | 102,664 | ||||||||||
| Interest-bearing demand deposits and money market | 330,168 | 314,923 | 313,327 | 306,003 | 300,680 | |||||||||||||||
| Savings deposits | 98,719 | 97,004 | 88,345 | 74,491 | 73,518 | |||||||||||||||
| Retail time deposits less than $100,000 | 524,347 | 504,301 | 498,136 | 493,594 | 469,939 | |||||||||||||||
| Retail time deposits greater than $100,000 | 142,645 | 136,319 | 136,248 | 140,392 | 141,889 | |||||||||||||||
| National/Brokered time deposits | 3,157 | 7,540 | 9,174 | 17,637 | 41,836 | |||||||||||||||
| Total deposits | $ | 1,208,164 | $ | 1,167,198 | $ | 1,146,319 | $ | 1,138,445 | $ | 1,130,526 | ||||||||||
| (1) Non-performing loans consist of non-accrual loans that are contractually past due 90 days or more and loans that are deemed impaired under the criteria of FASB Statement No. 114. Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof. | ||||||||||||||||||||
14