For Immediate Release
Thursday, October 12, 2006
| Contact: | David G. Ratz, Executive Vice President |
| | (740) 286-3283 |
Oak Hill Financial Reports 3rd Quarter Results
Jackson, Ohio -- Oak Hill Financial, Inc. (Nasdaq NMS: OAKF) today reported net earnings for the three months ended September 30, 2006 of $3,180,000, or $0.58 per diluted share. The third quarter 2006 earnings compare to the $3,939,000, or $0.68 per diluted share, in net earnings that the company recorded for the quarter ended September 30, 2005.
For the nine months ended September 30, 2006, Oak Hill Financial recorded net earnings of $9,668,000, or $1.74 per diluted share, as compared to the $7,800,000, or $1.34 per diluted share, in net earnings for the first nine months of 2005.
The net earnings for the third quarter and first nine months of 2005 include gains of $24,000 and $205,000, respectively, on the sale of a former branch facilities and other fixed assets, and non-recurring tax savings of $261,000 and $783,000, respectively, resulting from a one-time tax savings of $1.0 million for the full year 2005. Also, the prior year’s earnings include $49,000 and $502,000 of merger-related charges for the three and nine months ended September 30, 2005, respectively, resulting primarily from the company’s acquisition of Lawrence Financial Holdings, Inc. on April 1, 2005. Including the non-recurring items, the company’s net income was $3,787,000 or $0.65 per diluted share, for the third quarter of 2005 and $7,485,000, or $1.29 per diluted share, for the first nine months of 2005.
The company’s total assets ended the third quarter of 2006 at $1.26 billion, as compared to the $1.23 billion in total assets recorded at September 30, 2005. Net loans at September 30, 2006 were $1.02 billion, as compared to the $995.6 million in loans on the books at September 30, 2005.
Discussing Oak Hill Financial’s third quarter results, President and CEO R. E. Coffman, Jr. said, “We continue to focus on improving asset quality, and I am pleased to report that we were able to further reduce our non-performing assets by $3.1 million, or 16%, during the third quarter. Combined with the $5.5 million reduction in non-performing assets in the second quarter, we’ve cut non-performing assets by 35% since March 31. The result is a substantial improvement in the non-performing assets ratio from 2.01% at March 31, to 1.55% at June 30, and now to 1.31% at September 30.”
“Net earnings for the third quarter were up 6.2% over the second quarter,” Coffman added. “While total loans were flat, we did see a linked-quarter increase in commercial real estate loans, which is the largest component of our portfolio. In other areas, the net interest margin held steady at the second quarter level, and net charge-offs were in line with our expectations.” Looking forward, Coffman said, “We are very optimistic about further reductions in our nonperforming assets, and we continue to explore various avenues to further improve asset quality. While we expect continued pressure on the net interest margin, we believe that the recent enhancements we have implemented with respect to loan and deposit pricing will help to mitigate the effects of the inverted yield curve. In addition, loan demand in our market areas is beginning to show signs of rebounding, although loan volume is expected to be moderate through year end. Also, growth in the loan portfolio may be tempered by potential sales of nonperforming and classified loans, which we are actively pursuing, and net charge-offs may be similarly affected in the short term.”
Key Issue Review and Outlook
Net Interest Margin - Oak Hill Financial’s net interest margin for the third quarter was 3.34%, as compared to the 3.72% posted in the third quarter of 2005 and unchanged from the 3.34% recorded for the second quarter of 2006. Although the current interest rate environment continues to constrain asset yields, the company has been able to slow the rate of increase in liability costs by repricing certain core deposit accounts and maintaining a disciplined approach to time deposit pricing. In addition, the company has taken advantage of opportunities to substitute lower-cost term borrowings for retail time deposits.
Operating Expenses - Non-interest expenses from continuing operations were 2.66% of average assets for the third quarter of 2006, which compares to 2.72% for the third quarter of 2005 and 2.64% for the second quarter of 2006. On a linked-quarter basis, operating expenses increased 2.3%. During the third quarter, compensation and benefits expense increased due primarily to a reduction in deferred loan origination costs, and depreciation and other occupancy expenses increased as a result of the opening of new branch and administrative facilities. Conversely, the third quarter saw decreases in various other expense categories, including supplies, core processing amortization, credit and collections, and marketing. The company’s efficiency ratio from operations for the third quarter of 2006 was 61.9%, as compared to 57.3% in the prior year’s quarter and 59.8% in the second quarter of 2006.
Non-Interest Income - Non-interest income from operations, including gain on sale of loans, was $3.3 million in the third quarter, an increase of 10.9% over the third quarter of 2005 but a decrease of 5.4% from the second quarter of 2006. The linked-quarter change resulted from a decrease in gain on sale of loans, the company’s receipt in the second quarter of a settlement payment related to its 2004 acquisition of Ripley National Bank, and increased amortization of mortgage servicing rights, which the company accounts for as a reduction in other non-interest income. Offsetting these items were linked-quarter increases in deposit service charges, insurance and investment services commissions, gain on sale of investments, and mortgage origination income.
Asset Quality - At the end of the third quarter, the nonperforming loans/total loans and nonperforming assets/total assets ratios were 1.33% and 1.31%, respectively, a decrease from the 1.79% and 1.55%, respectively, recorded at June 30, 2006. The improvement reflects a $4.8 million reduction in nonperforming loans during the quarter, and a $3.1 million decrease in total nonperforming assets. The reductions in nonperforming loans were primarily the result of the sale of commercial real estate securing loans of $1.8 million, $750,000, and $319,000, coupled with aggressive charge-offs and charge-downs in the nonperforming portfolio. Two of these properties were purchased by the company, which resulted in a $1.7 million linked-quarter increase in other real estate owned.
Bolstered by strong recoveries, the company’s net charge-offs (non-annualized) were 0.05% of average loans for the third quarter of 2006, as compared to 0.11% in the second quarter. Annualized net charge-offs stand at 0.23% through the first nine months of 2006, which is within the company’s historical range of 0.20% to 0.25%. However, the potential sale of additional nonperforming loans could increase net charge-offs in the fourth quarter.
Consistent with generally accepted accounting principles and regulatory guidelines, the company uses various formulas to determine its allowance for loan losses (ALL). The methodology takes into consideration not only charge-offs but also the rated quality of the company’s loans based on loan review grades and the types and amounts of loans comprising the portfolio, while allowing some discretion by management to make adjustments based on near-term economic conditions. Management’s ongoing analysis of the above factors indicated that an ALL/total loans ratio of 1.32% remained appropriate at September 30, 2006.
Asset/Loan Growth - Oak Hill Financial’s total assets and net loans declined slightly during the third quarter. The linked-quarter change was the result of the reduction in nonperforming assets and continued below-average loan demand in the company’s market areas. In addition, management continues to maintain tighter underwriting standards and a conservative approach to loan pricing.
Total deposits decreased on a linked-quarter basis at an annualized 5.9% as the company experienced seasonal decline in several core deposit categories and maintained a conservative approach to pricing interest-bearing deposits.
Stock Buyback - On February 21, 2006, the company announced that its board of directors authorized the repurchase of 278,000 shares, or approximately 5.0 percent, of its outstanding common stock. During the third quarter, 16,700 shares were repurchased under the program, bringing the total number of shares repurchased since February 21 to 214,300.
Oak Hill Financial is a financial holding company headquartered in Jackson, Ohio. Its subsidiary, Oak Hill Banks, operates 36 full-service banking offices and one bank loan production office in 16 counties across southern and central Ohio. A second subsidiary, Oak Hill Financial Insurance Agency, provides group health plans, benefits administration, and other insurance services to business and public-sector organizations throughout the same region. The company also holds 49% of Oak Hill Title Agency, LLC, which provides title services for commercial and residential real estate transactions. Additional information about Oak Hill Financial can be found on the company’s website at www.oakf.com.
Forward-Looking Statements Disclosure
This release contains certain forward-looking statements related to the future performance and condition of Oak Hill Financial, Inc. These statements, which are subject to numerous risks and uncertainties, are presented in good faith based on the company’s current condition and management’s understanding, expectations, and assumptions regarding its future prospects as of the date of this release. Actual results could differ materially from those projected or implied by the statements contained herein. The factors that could affect the company’s future results are set forth in the periodic reports and registration statements filed by the company with the Securities and Exchange Commission.
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | | | | |
| | | At September 30, | |
(In thousands) | | 2006 | | 2005 | |
| | | | | | |
SUMMARY OF FINANCIAL CONDITION | | | | | |
| | | | | | |
| Total assets | | $ | 1,255,520 | | $ | 1,229,228 | |
| Interest-bearing deposits and federal funds sold | | | 1,884 | | | 4,802 | |
| Investment securities | | | 144,574 | | | 131,066 | |
| Loans receivable - net | | | 1,016,913 | | | 995,632 | |
| Deposits | | | 963,522 | | | 980,246 | |
| Federal Home Loan Bank advances and other borrowings | | | 193,422 | | | 149,921 | |
| Stockholders’ equity | | | 94,172 | | | 93,860 | |
The Company discloses net earnings, diluted earnings per share and certain performance ratios adjusted for non-recurring items. Management believes that presenting this information is an additional measure of performance that investors can use to compare operating results between reporting periods. These measures should not be considered an alternative to measurements required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). In accordance with Securities and Exchange Commission Regulation G, reconciliation of the Company’s U.S. GAAP information to its operating information is presented in the table below.
| | | For the | | For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(In thousands, except share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
RECONCILIATION OF NON-GAAP NET EARNINGS, | | | | | | | | | |
DILUTED EARNINGS PER SHARE AND OTHER PERFORMANCE MEASURES | | | | | | | | | |
| | | | | | | | | | |
| Net earnings (U.S. GAAP) | | $ | 3,180 | | $ | 3,939 | | $ | 9,668 | | $ | 7,800 | |
| | | | | | | | | | | | | | |
| Non-recurring items, net of tax: | | | | | | | | | | | | | |
| Gain on sale of branch locations and other fixed assets | | | - | | | (16 | ) | | - | | | (133 | ) |
| Merger-related expenses | | | | | | 33 | | | | | | 327 | |
| Reduction in tax expense | | | - | | | (169 | ) | | - | | | (509 | ) |
| | | | | | | | | | | | | | |
| Net earnings from operations | | $ | 3,180 | | $ | 3,787 | | $ | 9,668 | | $ | 7,485 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Diluted earnings per share (U.S. GAAP) | | $ | 0.58 | | $ | 0.68 | | $ | 1.74 | | $ | 1.34 | |
| | | | | | | | | | | | | | |
| Non-recurring items, net of tax: | | | | | | | | | | | | | |
| Gain on sale of branch locations and other fixed assets | | | - | | | - | | | - | | | (0.02 | ) |
| Merger-related expenses | | | - | | | - | | | - | | | 0.06 | |
| Reduction in tax expense | | | - | | | (0.03 | ) | | - | | | (0.09 | ) |
| | | | | | | | | | | | | | |
| Diluted earnings per share from operations | | $ | 0.58 | | $ | 0.65 | | $ | 1.74 | | $ | 1.29 | |
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | For the | | For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(In thousands, except share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
RECONCILIATION OF NON-GAAP NET EARNINGS, | | | | | | | | | |
DILUTED EARNINGS PER SHARE AND OTHER PERFORMANCE MEASURES (continued) | |
| | | | | | | | | | |
| Non-interest income (U.S. GAAP) | | $ | 3,316 | | $ | 3,013 | | $ | 10,110 | | $ | 8,556 | |
| | | | | | | | | | | | | | |
| Non-recurring items: | | | | | | | | | | | | | |
Gain on sale of branch locations and other fixed assets | | | | | | (24 | ) | | | | | (205 | ) |
| | | | | | | | | | | | | | |
| Non-interest income from operations | | $ | 3,316 | | $ | 2,989 | | $ | 10,110 | | $ | 8,351 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Non-interest expense (U.S. GAAP) | | $ | 8,455 | | $ | 8,144 | | $ | 24,971 | | $ | 22,938 | |
| | | | | | | | | | | | | | |
| Non-recurring items: | | | | | | | | | | | | | |
Merger-related expenses | | | | | | (49 | ) | | | | | (502 | ) |
Reduction in tax expense | | | | | | 261 | | | | | | 783 | |
| | | | | | | | | | | | | | |
| Non-interest expense from operations | | $ | 8,455 | | $ | 8,356 | | $ | 24,971 | | $ | 23,219 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
SUMMARY OF OPERATIONS (1)(2)(3) | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Interest income | | $ | 20,482 | | $ | 18,179 | | $ | 59,100 | | $ | 51,046 | |
| Interest expense | | | 10,846 | | | 7,760 | | | 30,253 | | | 20,955 | |
| | | | | | | | | | | | | | |
Net interest income | | | 9,636 | | | 10,419 | | | 28,847 | | | 30,091 | |
| Provision for losses on loans | | | 456 | | | 212 | | | 1,729 | | | 5,671 | |
| | | | | | | | | | | | | | |
Net interest income after provision for losses on loans | | | 9,180 | | | 10,207 | | | 27,118 | | | 24,420 | |
| Gain on sale of loans | | | 200 | | | 327 | | | 742 | | | 869 | |
| Commissions income | | | 891 | | | 710 | | | 2,584 | | | 2,071 | |
| Other non-interest income | | | 2,225 | | | 1,952 | | | 6,784 | | | 5,411 | |
| General, administrative and other expense | | | 8,455 | | | 8,356 | | | 24,971 | | | 23,219 | |
| | | | | | | | | | | | | | |
Earnings before federal income taxes | | | 4,041 | | | 4,840 | | | 12,257 | | | 9,552 | |
| Federal income taxes | | | 1,111 | | | 1,428 | | | 3,339 | | | 2,692 | |
| Federal new markets tax credit | | | (250 | ) | | (375 | ) | | (750 | ) | | (625 | ) |
| | | | | | | | | | | | | | |
| Net earnings from operations | | $ | 3,180 | | $ | 3,787 | | $ | 9,668 | | $ | 7,485 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
SELECTED PERFORMANCE RATIOS FROM OPERATIONS (1)(2)(3)(5)(6) |
| | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.58 | | $ | 0.65 | | $ | 1.74 | | $ | 1.29 | |
| | | | | | | | | | | | | | |
| Return on average assets | | | 1.00 | % | | 1.23 | % | | 1.03 | % | | 0.86 | % |
| Return on average equity | | | 13.62 | % | | 16.03 | % | | 13.87 | % | | 10.96 | % |
| Non-interest expense to average assets | | | 2.66 | % | | 2.72 | % | | 2.67 | % | | 2.65 | % |
| Efficiency ratio | | | 61.88 | % | | 58.86 | % | | 60.59 | % | | 57.67 | % |
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | At or For the | | At or For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(In thousands, except share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
PER SHARE INFORMATION (U.S. GAAP) | | | | | | | | | |
| | | | | | | | | | |
Basic earnings per share (4) | | $ | 0.59 | | $ | 0.69 | | $ | 1.77 | | $ | 1.37 | |
| | | | | | | | | | | | | | |
Diluted earnings per share (5) | | $ | 0.58 | | $ | 0.68 | | $ | 1.74 | | $ | 1.34 | |
| | | | | | | | | | | | | | |
| Dividends per share | | $ | 0.19 | | $ | 0.17 | | $ | 0.58 | | $ | 0.51 | |
| | | | | | | | | | | | | | |
| Book value per share | | | | | | | | $ | 17.55 | | $ | 16.62 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
OTHER STATISTICAL AND OPERATING DATA (U.S. GAAP) (6) | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Return on average assets | | | 1.00 | % | | 1.28 | % | | 1.03 | % | | 0.89 | % |
| Return on average equity | | | 13.62 | % | | 16.67 | % | | 13.87 | % | | 11.43 | % |
| Non-interest expense to average assets | | | 2.66 | % | | 2.66 | % | | 2.67 | % | | 2.62 | % |
| Net interest margin (fully-taxable equivalent) | | | 3.34 | % | | 3.72 | % | | 3.39 | % | | 3.73 | % |
| Total allowance for losses on loans to non-performing loans | | | | | | | | | 99.28 | % | | 79.32 | % |
| Total allowance for losses on loans to total loans | | | | | | | | | 1.32 | % | | 1.32 | % |
| Non-performing loans to total loans | | | | | | | | | 1.33 | % | | 1.67 | % |
| Non-performing assets to total assets | | | | | | | | | 1.31 | % | | 1.41 | % |
| Net charge-offs to average loans (actual for the period) | | | 0.05 | % | | 0.02 | % | | 0.17 | % | | 0.48 | % |
| Net charge-offs to average loans (annualized) | | | 0.19 | % | | 0.10 | % | | 0.23 | % | | 0.64 | % |
| Equity to assets at period end | | | | | | | | | 7.50 | % | | 7.64 | % |
| Efficiency ratio | | | 61.88 | % | | 57.31 | % | | 60.59 | % | | 56.96 | % |
| | | | | | | | | | | | | | |
(1)Excludes $261,000 and $783,000 reduction in tax expense for the three and nine months ended September 30, 2005 resulting from a tax savings of $1.0 million for 2005.
(2)Does not include $49,000 and $502,000 of merger-related charges for the three and nine months ended September 30, 2005.
(3)Does not include $24,000 and $205,000 of gains on the sale of branch locations and other fixed assets for the three and nine months ended September 30, 2005.
(4)Based on 5,379,089, 5,688,601, 5,467,480 and 5,684,826 weighted-average shares outstanding for the three and nine months ended September 30, 2006 and 2005, respectively.
(5)Based on 5,459,761, 5,797,053, 5,556,903 and 5,812,934 weighted-average shares outstanding for the three and nine months ended September 30, 2006 and 2005, respectively.
(6)Annualized where appropriate.
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | | | | |
| | | At September 30, | |
(In thousands, except share data) | | 2006 | | 2005 | |
| | | | | | |
SUPPLEMENTAL DETAIL | | | | | | | |
| | | | | | | | |
| BALANCE SHEET - ASSETS | | | | | | | |
| | | | | | | | |
| Cash and cash equivalents | | | 21,243 | | | 26,889 | |
| Trading account securities | | | - | | | - | |
| Securities available for sale | | | 140,972 | | | 127,442 | |
| Securities held to maturity | | | 3,602 | | | 3,624 | |
| Other securities | | | 7,958 | | | 7,517 | |
| Total securities | | | 152,532 | | | 138,583 | |
| Total cash and securities | | | 173,775 | | | 165,472 | |
Loans and leases held for investment (1) | | | 1,026,136 | | | 1,005,795 | |
Loans and leases held for sale (1) | | | 1,004 | | | 75 | |
Total loans and leases (1) | | | 1,027,140 | | | 1,005,870 | |
| Allowance for losses on loans | | | 13,631 | | | 13,347 | |
| Goodwill | | | 7,935 | | | 7,441 | |
| Other intangible assets | | | 3,328 | | | 4,351 | |
| Total intangible assets | | | 11,263 | | | 11,792 | |
| Mortgage servicing rights | | | 3,404 | | | 3,109 | |
| Purchased credit card relationships | | | - | | | - | |
| Other real estate owned | | | 2,682 | | | 498 | |
| Bank owned life insurance | | | 13,343 | | | 12,836 | |
| Other assets | | | 37,544 | | | 42,998 | |
| Total assets | | | 1,255,520 | | | 1,229,228 | �� |
| | | | | | | | |
| | | | | | | | |
| BALANCE SHEET - LIABILITIES | | | | | | | |
| | | | | | | | |
| Deposits | | | 963,522 | | | 980,246 | |
| Borrowings | | | 170,422 | | | 126,921 | |
| Other liabilities | | | 4,396 | | | 5,193 | |
| Total liabilities | | | 1,138,340 | | | 1,112,360 | |
| Redeemable preferred stock | | | - | | | - | |
| Trust preferred securities | | | 23,000 | | | 23,000 | |
| Minority interests | | | 8 | | | 8 | |
| Other mezzanine level items | | | - | | | - | |
| Total mezzanine level items | | | 23,008 | | | 23,008 | |
| Total liabilities and mezzanine level items | | | 1,161,348 | | | 1,135,368 | |
| | | | | | | | |
| | | | | | | | |
| BALANCE SHEET - EQUITY | | | | | | | |
| | | | | | | | |
| Preferred equity | | | - | | | - | |
| Common equity | | | 94,172 | | | 93,860 | |
| MEMO ITEM: Net unrealized gain (loss) on securities | | | | | | | |
available for sale, net of tax | | | 305 | | | (217 | ) |
End of period shares outstanding (2) | | | 5,365,974 | | | 5,647,760 | |
| Options outstanding | | | 444,583 | | | 498,783 | |
| Treasury shares held by the Company | | | 508,660 | | | 226,874 | |
| | | | | | | | |
(1)Data is net of unearned interest, gross of allowance for losses on loans
(2)Excludes treasury shares
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | At or For the | | At or For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(In thousands, except share data) | | 2005 | | 2006 | | 2005 | | 2006 | |
| | | | | | | | | | |
SUPPLEMENTAL DETAIL (continued) | | | | | | | | | |
| | | | | | | | | | |
| Repurchase plan announced? | | | No | | | No | | | Yes | | | Yes | |
Number of shares to be repurchased in plan(1) | | | N/A | | | N/A | | | 278,000 | | | 290,000 | |
Number of shares repurchased during the period(1) | | | 16,700 | | | 79,644 | | | 266,355 | | | 216,295 | |
Average price of shares repurchased(1) | | $ | 24.82 | | $ | 29.96 | | $ | 28.89 | | $ | 28.61 | |
| INCOME STATEMENT | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Interest income | | | 20,482 | | | 18,179 | | | 59,100 | | | 51,046 | |
| Interest expense | | | 10,846 | | | 7,760 | | | 30,253 | | | 20,955 | |
| Net interest income | | | 9,636 | | | 10,419 | | | 28,847 | | | 30,091 | |
| Net interest income (fully-taxable equivalent) | | | 10,007 | | | 10,767 | | | 29,969 | | | 30,985 | |
| Provision for losses on loans | | | 456 | | | 212 | | | 1,729 | | | 5,671 | |
| Non-recurring expense: | | | | | | | | | | | | | |
| Merger-related expenses | | | - | | | 49 | | | - | | | 502 | |
| Non-recurring income: | | | | | | | | | | | | | |
| Gain on sale of branch locations and other fixed assets | | | - | | | 24 | | | - | | | 205 | |
| Trading account income | | | - | | | - | | | - | | | - | |
| Foreign exchange income | | | - | | | - | | | - | | | - | |
| Trust income | | | - | | | - | | | - | | | - | |
| Commissions income | | | 891 | | | 710 | | | 2,584 | | | 2,071 | |
| Service charges on deposits | | | 1,442 | | | 1,226 | | | 4,007 | | | 3,186 | |
| Gain on sale of loans | | | 200 | | | 327 | | | 742 | | | 869 | |
| Gain on investment securities transactions | | | 41 | | | 138 | | | 145 | | | 508 | |
| Other non-interest income | | | 742 | | | 588 | | | 2,632 | | | 1,717 | |
| Total non-interest income | | | 3,316 | | | 2,989 | | | 10,110 | | | 8,351 | |
| Employee compensation and benefits | | | 4,545 | | | 4,437 | | | 12,949 | | | 12,012 | |
| Occupancy and equipment expense | | | 1,063 | | | 1,037 | | | 3,043 | | | 3,090 | |
| Foreclosed property expense | | | - | | | - | | | - | | | - | |
| Amortization of intangibles | | | 229 | | | 299 | | | 741 | | | 670 | |
| Other general, administrative and other expense | | | 2,618 | | | 2,322 | | | 8,238 | | | 6,664 | |
| Total non-interest expenses | | | 8,455 | | | 8,095 | | | 24,971 | | | 22,436 | |
| Net income before taxes | | | 4,041 | | | 5,076 | | | 12,257 | | | 10,038 | |
| Federal income taxes | | | 1,111 | | | 1,512 | | | 3,339 | | | 2,863 | |
| Federal new markets tax credit | | | (250 | ) | | (375 | ) | | (750 | ) | | (625 | ) |
| Net income before extraordinary items | | | 3,180 | | | 3,939 | | | 9,668 | | | 7,800 | |
| Extraordinary items | | | | | | | | | | | | | |
| Net income | | | 3,180 | | | 3,939 | | | 9,668 | | | 7,800 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| CHARGE-OFFS | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | |
| Loan charge-offs | | | 1,520 | | | 1,665 | | | 3,688 | | | 6,908 | |
| Recoveries on loans | | | 1,017 | | | 1,413 | | | 1,937 | | | 2,214 | |
| Net loan charge-offs | | | 503 | | | 252 | | | 1,751 | | | 4,694 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| AVERAGE BALANCE SHEET | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Average loans and leases | | | 1,030,925 | | | 1,012,772 | | | 1,031,747 | | | 984,481 | |
| Average other earning assets | | | 158,141 | | | 136,153 | | | 151,532 | | | 125,175 | |
| (1) | There were 52,055 shares repurchased at an average price of $32.40 under the plan announced on May 26, 2005. These shares completed the plan, and a new plan was announced on February 21, 2006. There were 16,700 and 214,300 shares repurchased at an average price of $24.82 and $28.02 for the three and nine months ended September 30, 2006 under the new plan. |
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | For the | | At or For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(In thousands, except share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
SUPPLEMENTAL DETAIL (continued) | | | | | | | | | |
| | | | | | | | | | |
AVERAGE BALANCE SHEET (continued) | | | | | | | | | |
| | | | | | | | | | |
| Average total earning assets | | | 1,189,066 | | | 1,148,925 | | | 1,183,279 | | | 1,109,656 | |
| Average total assets | | | 1,259,584 | | | 1,216,862 | | | 1,250,926 | | | 1,169,568 | |
| Average non-interest bearing deposits | | | 90,785 | | | 92,647 | | | 91,977 | | | 88,362 | |
| Average total time deposits | | | 541,593 | | | 592,743 | | | 556,058 | | | 583,770 | |
| Average other interest-bearing deposits | | | 330,911 | | | 282,853 | | | 325,550 | | | 256,424 | |
| Average total interest-bearing deposits | | | 872,504 | | | 875,596 | | | 881,608 | | | 840,194 | |
| Average borrowings | | | 199,146 | | | 148,873 | | | 179,870 | | | 143,916 | |
| Average interest-bearing liabilities | | | 1,071,650 | | | 1,024,469 | | | 1,061,478 | | | 984,110 | |
| Average preferred equity | | | - | | | - | | | - | | | - | |
| Average common equity | | | 92,612 | | | 93,745 | | | 93,217 | | | 91,275 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| ASSET QUALITY AND OTHER DATA | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Non-accrual loans | | | | | | | | | 13,514 | | | 16,021 | |
| Renegotiated loans | | | | | | | | | - | | | - | |
| Loans 90+ days past due and still accruing | | | | | | | | | 217 | | | 806 | |
| Total non-performing loans | | | | | | | | | 13,731 | | | 16,827 | |
| Other real estate owned | | | | | | | | | 2,682 | | | 498 | |
| Total non-performing assets | | | | | | | | | 16,413 | | | 17,325 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| ADDITIONAL DATA | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| 1 - 4 family mortgage loans serviced for others | | | | | | | | | 237,043 | | | 247,505 | |
| Proprietary mutual fund balances | | | | | | | | | - | | | - | |
| Fair value of securities held to maturity | | | | | | | | | 3,884 | | | 3,881 | |
| Full-time equivalent employees | | | | | | | | | 432 | | | 439 | |
| Total number of full-service banking offices | | | | | | | | | 36 | | | 34 | |
| Total number of bank and thrift subsidiaries | | | | | | | | | 1 | | | 1 | |
| Total number of ATMs | | | | | | | | | 41 | | | 40 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| LOANS RECEIVABLE | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| 1 - 4 family residential | | | | | | | | | 234,290 | | | 236,898 | |
| Home equity | | | | | | | | | 42,578 | | | 43,038 | |
| Multi-family residential | | | | | | | | | 41,397 | | | 32,751 | |
| Commercial real estate | | | | | | | | | 399,341 | | | 373,992 | |
| Construction and land development | | | | | | | | | 51,830 | | | 57,298 | |
| Commercial and other | | | | | | | | | 146,428 | | | 157,497 | |
| Consumer | | | | | | | | | 109,133 | | | 102,348 | |
| Credit cards | | | | | | | | | 2,143 | | | 2,049 | |
| | | | | | | | | | | | | | |
| Loans receivable - gross | | | | | | | | | 1,027,140 | | | 1,005,871 | |
| Unearned interest | | | | | | | | | - | | | (1 | ) |
| | | | | | | | | | | | | | |
| Loans receivable - net of unearned interest | | | | | | | | | 1,027,140 | | | 1,005,870 | |
| Allowance for losses on loans | | | | | | | | | (13,631 | ) | | (13,347 | ) |
| | | | | | | | | | | | | | |
Loans receivable - net (1) | | | | | | | | | 1,013,509 | | | 992,523 | |
| (1) | Does not include mortgage servicing rights. |
Oak Hill Financial, Inc.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 12, 2006 Press Release
| | | For the | | At or For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
(In thousands, except share data) | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | |
SUPPLEMENTAL DETAIL (continued) | | | | | | | | | |
| | | | | | | | | | |
| DEPOSITS | | | | | | | | | |
| | | | | | | | | | |
| Transaction accounts | | | | | | | | | | | | | |
| Non-interest bearing | | | | | | | | | 89,970 | | | 100,872 | |
| Interest-bearing | | | | | | | | | 75,787 | | | 79,425 | |
| Savings accounts | | | | | | | | | 52,541 | | | 69,946 | |
| Money market deposit accounts | | | | | | | | | 203,593 | | | 138,084 | |
| Other core interest-bearing | | | | | | | | | 384,742 | | | 420,786 | |
| | | | | | | | | | | | | | |
| Total core deposit accounts | | | | | | | | | 806,633 | | | 809,113 | |
| Brokered deposits | | | | | | | | | 45,549 | | | 90,535 | |
| Other non-core interest-bearing accounts | | | | | | | | | 111,340 | | | 80,598 | |
| | | | | | | | | | | | | | |
| Total deposits | | | | | | | | | 963,522 | | | 980,246 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Yield/average earning assets (fully-taxable equivalent) | | | 6.96 | % | | 6.40 | % | | 6.81 | % | | 6.26 | % |
| Cost/average earning assets | | | 3.62 | % | | 2.68 | % | | 3.42 | % | | 2.53 | % |
| | | | | | | | | | | | | | |
| Net interest income (fully-taxable equivalent) | | | 3.34 | % | | 3.72 | % | | 3.39 | % | | 3.73 | % |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| NEW MARKETS TAX CREDIT | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Qualified equity investment in Oak Hill Banks Community Development Corp. | | | | | | | | | 20,000 | | | 10,000 | |
| | | | | | | | | | | | | | |
| | | Aggregate | | | | | | | | | | | | | | |
| | | QEI | | | New Markets Tax Credit | |
| Year | | Amount | | | 2006 | | 2007 | | 2008 | | 2009 | | 2010 | | 2011 | |
| | | | | | | | | | | | | | | | | |
| 2004 | | | 10,000 | | | | 500 | | | 600 | | | 600 | | | 600 | | | 600 | | | - | |
| 2005 | | | 10,000 | | | | 500 | | | 500 | | | 600 | | | 600 | | | 600 | | | 600 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Totals | | | 20,000 | | | | 1,000 | | | 1,100 | | | 1,200 | | | 1,200 | | | 1,200 | | | 600 | |
