EXHIBIT 99.1
[LOGO OF CARVER BANCORP, INC.]
Contact: David Lilly / Joseph Kuo William Gray
Kekst and Company Carver Bancorp, Inc.
(212) 521-4800 (212) 360-8840
CARVER BANCORP, INC. ANNOUNCES FISCAL YEAR 2005 RESULTS
REPORTS EPS OF $0.15 AND $1.03 FOR THE FOURTH QUARTER AND FISCAL YEAR,
RESPECTIVELY ANNOUNCES QUARTERLY DIVIDEND OF $0.07
NEW YORK, NEW YORK, APRIL 28, 2005 - Carver Bancorp, Inc. (the "Company" or
"Carver") (AMEX: CNY), the holding company for Carver Federal Savings Bank (the
"Bank"), today announced its results of operations for the three- and
twelve-month periods ended March 31, 2005 ("fiscal 2005").The Company reported
net income available to common stockholders for the three-month period ended
March 31, 2005 of $392,000 and diluted earnings per share of $0.15 compared to
the same period last year of $1.0 million and $0.42, respectively. For fiscal
2005 net income available to common stockholders was $2.5 million and diluted
earnings per share was $1.03 compared to the same period last year of $4.6
million and $1.87, respectively.
Commenting on the Company's results, Chairman, President and Chief Executive
Officer Deborah C. Wright stated: "In the fourth quarter, Carver's retail
banking and lending business units produced solid results, realizing growth in
deposits and related fees as well as loan balances. However, this performance
was more than offset by margin compression and a reduction in loan fees related
to refinancing activity, consistent with industry trends that may continue to
have some impact on earnings in the near term. More importantly, our performance
was significantly impacted by the expenses of opening a new branch this quarter
and the full impact of opening three branches over the last 15 months. In
addition, as previously announced, we recorded one-time severance and related
charges in the quarter in connection with changes to our management team. We
have realigned the team's responsibilities to enhance efficiency, and are
finalizing a plan to aggressively outsource operations where cost savings can be
realized," said Ms. Wright.
"In a fiercely competitive marketplace, Carver is continuing on a path of
prudent growth in order to leverage its unique advantages in urban markets and
enable us to continue to thrive. That growth requires investments in products,
marketing, technology, physical plant and talent that we are committed to making
as a leading community bank. Our customers have made it clear that they need
greater access to Carver's products and services. We have responded by opening
three new branches and three new 24/7 ATM centers in high-traffic locations in
the last 15 months--a 60% increase in branches and a 120% increase in delivery
channels. While this investment in our future franchise value, as well as an
acquisition we pursued to provide greater scale that was unrealized, increased
operating expenses substantially during the quarter and the fiscal year, our
organic growth strategy is already bearing fruit," said Ms. Wright.
Ms. Wright continued, "I am pleased to note that total deposits increased 21%
over the fiscal year, including an increase of 9% in core deposits. Importantly,
net deposit accounts grew 4%, reversing a two-year downward trend. Checking
accounts led the way, increasing 12%, which
contributed to a 67% increase in monthly debit card fees during this period.
Carver's ATM expansion resulted in ATM fee increases of 20% despite the
well-advertised decision of some financial institutions to waive ATM fees. We
also increased our lending activities, boosting total mortgage loans by 20%,
while maintaining excellent loan quality. We are very pleased with these results
and believe these factors point to the advantages that Carver's unique knowledge
and relationships in these markets can produce, despite an increasingly
competitive marketplace."
"We are committed to building a more efficient and profitable business that
will deliver higher value to our stockholders over the long term. We are working
hard to capitalize on our investments over time through the substantial growth
of our business. We are committed to and focused on accelerating the growth and
profitability of our three new branches as quickly as is consistent with our
marketplace. We do not anticipate opening additional branches in fiscal 2006,
though we will opportunistically add ATMs to high traffic sites. As we start the
new fiscal year we plan to build on the momentum achieved in our lending
division with a strong pipeline of new products that will target consumers as
well as institutional customers," Ms. Wright concluded.
The Board has declared a $0.07 per share dividend for the quarter ended March
31, 2005. The dividend is payable on May 20, 2005 to holders of record at the
close of business on May 6, 2005.
INCOME STATEMENT HIGHLIGHTS
FOURTH QUARTER RESULTS
- ----------------------
Net income available to common stockholders decreased $649,000, or 62.3%, to
$392,000 compared to $1.0 million for the same period last year. An increase in
net interest income of $371,000 and a reduction in income tax expense of
$357,000 was more than offset by an increase in non-interest expense of $1.3
million.
Net interest income before the provision for loan losses increased by $371,000,
or 8.3%, to $4.9 million compared to $4.5 million for the same period last year.
Interest income increased $964,000, or 14.5%, compared to the same period last
year. Partially offsetting the increase in interest income was an increase in
interest expense of $593,000, or 27.7%. Interest income rose primarily as a
result of increased mortgage loan balances compared to the same period last
year. Interest expense increased as a result of both a higher interest rate
environment and an increase in the balance of deposits.
Non-interest income decreased $85,000, or 8.6%, to $901,000 compared to $986,000
for the same period last year. This decline was largely due to a decrease of
$111,000 in loan fees and service charges, and a $50,000 lower gain on sale of
mortgage loans. Additionally, a $75,000 other-than-temporary charge related to
the Company's holdings of IFSB common stock was taken this quarter. Partially
offsetting the decrease in non-interest income were increases in depository fees
and charges of $84,000 and other income of $69,000, such other income primarily
derived from the Bank's investment in a bank owned life insurance program.
Non-interest expense increased $1.3 million, or 34.9%, to $5.2 million for the
current quarter compared to $3.8 million for the same period last year. The rise
in non-interest expense was largely due to increased employee compensation and
benefits expense of $1.0 million. The
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increase resulted primarily from additions to staff that were required for the
recent branch expansions, severance and related costs of $355,000 and additional
incentive compensation expenses of $188,000 due to the timing of accruals that
were made evenly over each quarter in the prior fiscal year. Net occupancy
expense increased $165,000, or 42.3%, to $555,000 compared to $390,000 for the
same period last year and equipment expenses rose $70,000, or 18.8%, to $443,000
compared to $373,000 for the same period last year. The increases in occupancy
and equipment were primarily due to the opening of three new branches and three
new 24/7 ATM centers. Additionally, other non-interest expense increased $75,000
in several expense categories primarily as a result of franchise expansion.
Income before taxes decreased $1.1 million, or 64.4%, to $582,000 compared to
$1.6 million for the same period last year. Income taxes decreased $357,000, or
65.3%, to $190,000 compared to $547,000 for the same period last year primarily
due to a reduction in the Company's pre-tax income.
FISCAL 2005 RESULTS
Net income available to common stockholders decreased $2.1 million, or 45.4%, to
$2.5 million compared to $4.6 million for the same period last year. An increase
in net interest income of $1.3 million and a decrease in income tax expense of
$975,000 was more than offset by increased non-interest expense of $3.2 million
and a decrease in non-interest income of $1.2 million.
Net interest income before the provision for loan losses increased by $1.3
million, or 7.2%, to $18.8 million compared to $17.5 million for the same period
last year. Interest income rose $2.3 million, or 8.8%, compared to the same
period last year. Partially offsetting the rise in interest income was an
increase in interest expense of $1.1 million, or 12.2%. Interest income
increased primarily as a result of growth in the mortgage loan portfolio
compared to the same period last year. The rise in interest expense resulted
primarily from deposit growth used to fund the mortgage loan additions and, to a
lesser extent, a higher interest rate environment that resulted in certain
deposit rate increases.
The Company did not provide for additional loan loss reserves for the quarter or
fiscal year as the Company considers the current overall allowance for loan
losses to be adequate.
Non-interest income decreased $1.2 million, or 22.8%, to $4.1 million compared
to $5.3 million for the same period last year. The decline in non-interest
income was primarily attributable to an other-than-temporary charge related to
the Company's holdings of IFSB common stock of $1.5 million, a reduction of
$739,000 in loan fees and service charges primarily due to lower mortgage
prepayment penalties. Additionally, other non-interest income declined $373,000
compared to the same period last year when a recovery of $558,000 from the
recognition of previously unrecognized mortgage loan income was recorded. These
declines were partially offset by the receipt of a net $1.1 million grant from
the Department of the Treasury's Community Development Financial Institution
Fund and an increase of $287,000 in depository fees and charges, primarily ATM
fees, debit card income and commissions from the sale of investments and
insurance. Additionally, in an effort to reposition its balance sheet and manage
interest rate risk, the Bank sold investment securities that generated a net
gain of $94,000 and sold certain fixed rate one- to four-family mortgage loans
that generated a net gain of $84,000 during fiscal 2005.
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Non-interest expense increased $3.2 million, or 20.8%, to $18.7 million compared
to $15.5 million for the same period last year. The rise in non-interest expense
was largely due to increased employee compensation and benefits expense of $1.9
million. The increase resulted primarily from additions to staff that were
required for the recent branch expansions and back office operations, severance
and related costs of $355,000 and additional expenses resulting from salary
increases and the increased costs of benefits plans. Net occupancy and equipment
expenses increased $514,000 and $122,000, respectively, primarily due to the
opening of three new branches and three new 24/7 ATM centers. Additionally,
included in the fiscal 2005 results is a charge for IFSB merger-related expenses
of $847,000. These increases were offset by a decrease of $141,000 in other
non-interest expense primarily due to lower consulting fees.
Income before taxes decreased $3.2 million, or 43.2%, to $4.2 million compared
to $7.3 million for the same period last year. Income taxes decreased $975,000,
or 39.1%, to $1.5 million compared to $2.5 million for the same period last year
primarily due to a reduction in the Company's fiscal 2005 pre tax income.
FINANCIAL CONDITION HIGHLIGHTS
At March 31, 2005, total assets increased by $87.6 million, or 16.3%, to $626.4
million compared to $538.8 million at March 31, 2004. The asset growth primarily
reflects an increase in total loans receivable, net, of $70.1 million, or 19.9%,
as mortgage loan originations and purchases exceeded mortgage loan repayments.
Additionally, total securities increased $9.5 million primarily as a result of
additional purchases of mortgage-backed securities to collateralize certain
deposits. The increase of $7.6 million in other assets primarily reflects the
Bank's investment in a bank owned life insurance program and the increase of
$2.0 million in office properties and equipment reflects the Bank's investment
in new branches and 24/7 ATM centers. The increase in assets was partially
offset by a decrease in cash and cash equivalents, as federal funds were
re-deployed primarily to fund loan growth.
At March 31, 2005, total liabilities increased by $86.4 million, or 17.5%, to
$580.6 million from $494.2 million at March 31, 2004. The increase in
liabilities is a result of deposit growth of $79.8 million, or 21.4%, primarily
as a result of our new branches, the net addition of $11.0 in borrowings from
the Federal Home Loan Bank of New York and a decrease of $4.4 million in other
liabilities resulting primarily from the payment of bank checks.
At March 31, 2005, total stockholders' equity increased $1.2 million, or 2.6%,
to $45.8 million compared to $44.6 million at March 31, 2004. The increase in
total stockholders' equity was primarily attributable to an increase in retained
earnings of $1.9 million from net income derived during fiscal 2005. Partially
offsetting the increase to stockholder's equity is a decrease of $493,000 in
accumulated other comprehensive income related to the mark-to-market of the
Bank's available-for-sale securities and net repurchases of the Company's common
stock of $263,000.
During the quarter ended March 31, 2005, the Company purchased 22,034 additional
shares of its common stock in the open market or through other privately
negotiated transactions as part of its stock repurchase program announced on
August 6, 2002. Since inception of the stock repurchase program, the Company has
purchased 83,584 shares of its common stock in open market transactions at an
average price of $17.03 per share. The Company intends to use the repurchased
shares to fund its stock-based benefit and compensation plans and for any other
4
purpose the Board of Directors of the Company deems advisable in compliance with
applicable law.
ASSET QUALITY
At March 31, 2005, non-performing assets totaled $998,000, or 0.23% of total
loans receivable, compared to $2.1 million, or 0.60% of total loans receivable,
at March 31, 2004. At March 31, 2005, the allowance for loan losses of $4.1
million was substantially unchanged from March 31, 2004. At March 31, 2005, the
ratio of the allowance for loan losses to non-performing loans was 410.7%
compared to 194.3% at March 31, 2004 and the ratio of the allowance for loan
losses to total loans receivable at March 31, 2005 was 0.96% compared to 1.16%
at March 31, 2004.
ANNUAL MEETING DATE ANNOUNCED
The Company will hold its annual meeting of stockholders for fiscal 2005 on
September 20, 2005, at a location to be announced.
Carver, the largest African- and Caribbean-American operated bank in the United
States, is the holding company for Carver Federal Savings Bank, a federally
chartered stock savings bank (the "Bank"). The Bank operates eight full-service
branches in the New York City boroughs of Brooklyn, Queens and Manhattan. For
further information, please visit the Company's website at www.carverbank.com.
STATEMENTS CONTAINED IN THIS NEWS RELEASE, WHICH ARE NOT HISTORICAL FACTS ARE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED. THESE FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF
SUCH WORDS AS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND," "SHOULD," "WILL,"
"WOULD," "COULD," "MAY," "PLANNED," "ESTIMATED," "POTENTIAL," "OUTLOOK,"
"PREDICT," "PROJECT" AND SIMILAR TERMS AND PHRASES, INCLUDING REFERENCES TO
ASSUMPTIONS. FORWARD-LOOKING STATEMENTS ARE BASED ON VARIOUS ASSUMPTIONS AND
ANALYSES MADE BY THE COMPANY IN LIGHT OF MANAGEMENT'S EXPERIENCE AND ITS
PERCEPTION OF HISTORICAL TRENDS, CURRENT CONDITIONS AND EXPECTED FUTURE
DEVELOPMENTS, AS WELL AS OTHER FACTORS BELIEVED TO BE APPROPRIATE UNDER THE
CIRCUMSTANCES. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE
SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS, MANY OF WHICH ARE BEYOND THE
COMPANY'S CONTROL, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FACTORS
WHICH COULD RESULT IN MATERIAL VARIATIONS INCLUDE, WITHOUT LIMITATION, THE
COMPANY'S SUCCESS IN IMPLEMENTING ITS INITIATIVES, INCLUDING EXPANDING ITS
PRODUCT LINE, ADDING NEW BRANCHES AND ATM CENTERS, SUCCESSFULLY RE-BRANDING ITS
IMAGE AND ACHIEVING GREATER OPERATING EFFICIENCIES; INCREASES IN COMPETITIVE
PRESSURE AMONG FINANCIAL INSTITUTIONS OR NON-FINANCIAL INSTITUTIONS; LEGISLATIVE
OR REGULATORY CHANGES WHICH MAY ADVERSELY AFFECT THE COMPANY'S BUSINESS OR
INCREASE THE COST OF DOING BUSINESS; TECHNOLOGICAL CHANGES WHICH MAY BE MORE
DIFFICULT OR EXPENSIVE THAN WE ANTICIPATE; CHANGES IN INTEREST RATES WHICH MAY
REDUCE NET INTEREST MARGINS AND NET INTEREST INCOME; CHANGES IN DEPOSIT FLOWS,
LOAN DEMAND OR REAL ESTATE VALUES WHICH MAY ADVERSELY AFFECT THE COMPANY'S
BUSINESS; CHANGES IN ACCOUNTING PRINCIPLES, POLICIES OR GUIDELINES WHICH MAY
CAUSE THE COMPANY'S CONDITION TO BE PERCEIVED DIFFERENTLY; LITIGATION OR OTHER
MATTERS BEFORE REGULATORY AGENCIES, WHETHER CURRENTLY EXISTING OR COMMENCING IN
THE FUTURE, WHICH MAY DELAY THE OCCURRENCE OR NON-OCCURRENCE OF EVENTS LONGER
THAN ANTICIPATED; THE ABILITY OF THE COMPANY TO ORIGINATE AND PURCHASE LOANS
WITH ATTRACTIVE TERMS AND ACCEPTABLE CREDIT QUALITY; AND GENERAL ECONOMIC
CONDITIONS, EITHER NATIONALLY OR LOCALLY IN SOME OR ALL AREAS IN WHICH THE
COMPANY DOES BUSINESS, OR CONDITIONS IN THE SECURITIES MARKETS OR THE BANKING
INDUSTRY WHICH COULD AFFECT LIQUIDITY IN THE CAPITAL MARKETS, THE VOLUME OF LOAN
ORIGINATION, DEPOSIT FLOWS, REAL ESTATE VALUES, THE LEVELS OF NON-INTEREST
INCOME AND THE AMOUNT OF LOAN LOSSES. THE FORWARD-LOOKING STATEMENTS CONTAINED
IN THIS NEWS RELEASE ARE MADE AS OF THE DATE OF THIS REPORT, AND THE COMPANY
ASSUMES NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT
ACTUAL RESULTS, CHANGES IN ASSUMPTIONS OR CHANGES IN OTHER FACTORS AFFECTING
SUCH FORWARD-LOOKING STATEMENTS OR TO UPDATE THE REASONS WHY ACTUAL RESULTS
COULD DIFFER FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. YOU SHOULD
CONSIDER THESE RISKS AND UNCERTAINTIES IN EVALUATING FORWARD-LOOKING STATEMENTS
AND YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE STATEMENTS.
# # #
5
CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
MARCH 31, MARCH 31,
2005 2004
------------------ -----------------
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 13,020 $ 11,574
Federal funds sold 6,800 8,200
Interest Earning Deposits 600 3,000
------------------ -----------------
Total cash and cash equivalents 20,420 22,774
Securities:
Available-for-sale, at fair value (including pledged as collateral
of $112,503 at March 31, 2005 and $82,325 at March 31, 2004 ) 118,033 96,403
Held-to-maturity, at amortized cost (including pledged as collateral
of $30,900 at March 31, 2005 and $42,189 at March 31, 2004; fair value of
$31,310 at March 31, 2005 and $43,794 at March 31, 2004 ) 31,302 43,474
------------------ -----------------
Total securities 149,335 139,877
Loans receivable:
Real estate mortgage loans 424,387 350,015
Consumer and commercial business loans 1,697 6,010
Allowance for loan losses (4,097) (4,125)
------------------ -----------------
Total loans receivable, net 421,987 351,900
Office properties and equipment, net 13,658 11,682
Federal Home Loan Bank of New York stock, at cost 5,125 4,576
Accrued interest receivable 2,702 2,489
Other assets 13,150 5,532
------------------ -----------------
Total assets $ 626,377 $ 538,830
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 453,454 $ 373,665
Advances from the Federal Home Loan Bank of New York and other borrowed money 115,299 104,282
Other liabilities 11,823 16,238
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Total liabilities 580,576 494,185
Stockholders' equity:
Preferred stock (par value $0.01 per share; 1,000,000 shares authorized; 0
issued and outstanding
at March 31, 2005 and 100,000 issued and outstanding at March 31, 2004) - 1
Common stock (par value $0.01 per share: 10,000,000 shares authorized;
2,524,691 and 2,316,358 shares issued at March 31, 2005 and March 31, 2004,
respectively; 2,501,338 and 2,285,267 outstanding at March 31, 2005 and
March 31, 2004, respectively) 25 23
Additional paid-in capital 23,937 23,882
Retained earnings 22,748 20,892
Unamortized awards of common stock under management recognition plan (128) (21)
Treasury stock, at cost (23,353 shares at March 31, 2005
and 31,091 shares at March 31, 2004) (546) (390)
Accumulated other comprehensive income (235) 258
------------------ -----------------
Total stockholders' equity 45,801 44,645
------------------ -----------------
Total liabilities and stockholders' equity $ 626,377 $ 538,830
================== =================
6
CARVER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------------------- --------------------------------
2005 2004 2005 2004
-------------- -------------- --------------- ---------------
Interest Income:
Loans $ 6,043 $ 5,165 $ 22,940 $ 20,117
Total securities 1,470 1,444 5,432 5,950
Federal funds sold 84 24 174 167
-------------- -------------- --------------- ---------------
Total interest income 7,597 6,633 28,546 26,234
Interest expense:
Deposits 1,569 1,089 5,455 4,649
Advances and other borrowed money 1,168 1,055 4,303 4,051
-------------- -------------- --------------- ---------------
Total interest expense 2,737 2,144 9,758 8,700
Net interest income 4,860 4,489 18,788 17,534
Provision for loan losses - - - -
-------------- -------------- --------------- ---------------
Net interest income after provision for loan losses 4,860 4,489 18,788 17,534
Non-interest income:
Depository fees and charges 556 472 2,212 1,925
Loan fees and service charges 321 432 1,868 2,607
Gain on sale of securities - - 94 31
Impairment of securities (75) - (1,547) -
Gain on sale of loans 10 60 84 116
Gain on sale of fixed assets - 2 - 2
Grant income - - 1,140 -
Other 89 20 224 597
-------------- -------------- --------------- ---------------
Total non-interest income 901 986 4,075 5,278
Non-interest expense:
Employee compensation and benefits 3,026 1,995 9,461 7,587
Net occupancy expense 555 390 1,957 1,443
Equipment 443 373 1,608 1,486
Merger related expenses - - 847 -
Other 1,155 1,080 4,823 4,964
-------------- -------------- --------------- ---------------
Total non-interest expense 5,179 3,838 18,696 15,480
Income before income taxes 582 1,637 4,167 7,332
Income taxes 190 547 1,518 2,493
-------------- -------------- --------------- ---------------
Net income $ 392 $ 1,090 $ 2,649 $ 4,839
============== ============== =============== ===============
Dividends applicable to preferred stock $ - $ 49 $ 114 $ 197
Net income available to common stockholders $ 392 $ 1,041 $ 2,535 $ 4,642
============== ============== =============== ===============
Earnings per common share:
Basic $ 0.16 $ 0.45 $ 1.06 $ 2.03
============== ============== =============== ===============
Diluted $ 0.15 $ 0.42 $ 1.03 $ 1.87
============== ============== =============== ===============
7
CARVER BANCORP, INC. AND SUBSIDIARIES
SELECTED KEY RATIOS
(Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
KEY OPERATING RATIOS: MARCH 31, MARCH 31,
---------------------------- -----------------------------
2005 2004 2005 2004
------------- ----------- ------------- ------------
Return on average assets (1) 0.25 % 0.83 % 0.45 % 0.93
Return on average equity (2) 3.39 10.07 5.80 11.40
Interest rate spread (3) 3.20 3.48 3.26 3.40
Net interest margin (4) 3.35 3.63 3.41 3.56
Operating expenses to average assets (5) 3.35 2.91 3.21 2.97
Equity-to-assets (6) 7.31 8.29 7.31 8.29
Efficiency ratio (7) 89.90 70.09 81.77 67.86
Average interest-earning assets to
interest-bearing liabilities 1.08 1.08 1.09 1.09
ASSET QUALITY RATIOS: MARCH 31,
-------------------------
2005 2004
---------- ---------
Non performing assets to total assets (8) 0.16 0.39
Non performing assets to total loans receivable (8) 0.23 0.60
Allowance for loan losses to total loans receivable 0.96 1.16
Allowance for loan losses to non-performing loans (8) 410.7 194.3
(1) Net income divided by average total assets, annualized
(2) Net income divided by average total equity, annualized
(3) Combined weighted average interest rate earned less combined weighted
average interest rate cost
(4) Net interest income divided by average interest-earning assets annualized
(5) Non-interest expenses less loss on foreclosed real estate divided by average
total assets, annualized. Excluding merger related expenses the ratio would
be 3.06% for the year
(6) Total equity divided by assets at period end
(7) Operating expenses divided by sum of net interest income plus non-interest
income. Excluding the Independence stock impairment charge, grant income and
merger related expenses, the ratio would be 88.74% and 76.70% for the
quarter and year, respectively
(8) Non performing assets consist of non-accrual loans, loans accruing 90 days
or more past due and property acquired in settlement of loans