NEWS RELEASE
CONTACT: Kenneth J. Wagner, SVP Investor Relations
Provident Financial Services, Inc.
(201) 915-5344
FOR RELEASE 7:43 A.M. Eastern Time: January 26, 2006
Provident Financial Services, Inc. Announces Fourth Quarter and Full-Year
Earnings for 2005
JERSEY CITY, NJ, January 26 /PRNewswire-First Call/ - Provident Financial
Services, Inc. (NYSE:PFS) (the "Company") reported basic and diluted earnings
per share of $0.23 for the quarter ended December 31, 2005, representing
decreases of 7.1% and 7.2%, respectively, compared to basic and diluted earnings
per share of $0.25 and $0.24, respectively for the quarter ended December 31,
2004. Basic and diluted earnings per share were $0.89 and $0.88, respectively,
for the year ended December 31, 2005, representing increases of 10.6% and 10.0%,
respectively, compared to basic and diluted earnings per share of $0.80 for the
year ended December 31, 2004. Net income for the three months ended December 31,
2005 totaled $14.8 million, a decrease of $2.3 million, or 13.5%, compared to
$17.1 million reported for the same period in 2004. Net income was $58.5 million
for the year ended December 31, 2005, an increase of $9.2 million, or 18.7%,
compared to $49.3 million for the same period in 2004.
The earnings and per share data reflect the inclusion of the operations of First
Sentinel Bancorp, Inc. ("First Sentinel") which merged with the Company on July
14, 2004, and the related issuance of 18.5 million shares of the Company's
common stock in connection with the merger, from the July 14, 2004 merger date.
Earnings for the year ended December 31, 2005 also reflect the acceptance of a
Voluntary Resignation Initiative ("VRI") by certain officers of the Company in
the second quarter of 2005, which resulted in an after-tax charge of $815,000.
Fourth quarter and full year 2004 earnings were impacted by one-time expenses
related to the merger and integration of First Sentinel's operations of
approximately $291,000 and $1.2 million, respectively, net of tax. Furthermore,
fourth quarter and full year 2004 earnings included a $1.9 million reduction in
income tax expense resulting from a reduction in a valuation allowance against a
deferred tax asset.
Paul M. Pantozzi, Chairman and Chief Executive Officer, commented, "In the
fourth quarter we maintained our disciplined response to a challenging economic
and competitive environment. While solid, our earnings results reflect the
impact of a flat yield curve that continued to put pressure on our net interest
margin during the quarter, as it did throughout 2005. To minimize margin
compression, we adhered to our strategies of pricing deposit offerings
conservatively and of using cash flows from maturing securities to reduce
wholesale borrowings. These strategies constrained asset growth in general and
deposit growth in particular, but we viewed margin preservation as a priority in
the current interest rate environment. In addition, we sought to sustain
earnings momentum and to enhance operating efficiency by continuing to manage
non-interest expenses."
Declaration of Quarterly Dividend
The Company's Board of Directors declared a quarterly cash dividend of $0.09 per
common share payable on February 28, 2006, to stockholders of record as of the
close of business on February 15, 2006.
Balance Sheet Summary
Total assets were $6.05 billion at December 31, 2005, compared to $6.43 billion
at December 31, 2004, as reductions in cash and securities balances were used to
fund loan originations, repayments of borrowings, net deposit outflows and
common stock repurchases.
Cash and cash equivalents decreased $46.4 million, or 28.4%, during the year
ended December 31, 2005.
Total investments decreased $358.1 million, or 19.3%, during the year ended
December 31, 2005. The decrease was primarily attributable to paydowns on
mortgage-backed securities and maturities of debt securities. In addition, the
Company sold $34.3 million of primarily mortgage-backed securities during the
year as part of its ongoing interest rate risk management process.
The Company's net loans increased $33.7 million, or 0.9%, to $3.71 billion at
December 31, 2005, from $3.67 billion at December 31, 2004, driven by loan
originations of $1.17 billion and loan purchases of $137.4 million. The Company
1
sold $36.2 million in 20- and 30-year fixed-rate residential mortgage loans
during the year ended December 31, 2005, as another component of the Company's
ongoing interest rate risk management process.
At December 31, 2005, the Company's unfunded loan pipeline totaled $696.2
million, including $211.2 million in construction loan commitments, $168.9
million in commercial loan commitments and $97.4 million in commercial mortgage
commitments. This compares with an unfunded loan pipeline of $793.8 million at
September 30, 2005.
Borrowed funds decreased $196.0 million, or 16.8%, during the year ended
December 31, 2005, as a result of maturities and paydowns on amortizing
obligations.
Total deposits decreased $129.0 million, or 3.2%, during the year ended December
31, 2005. Total deposits were $3.92 billion at December 31, 2005, with core
deposits, consisting of savings and demand deposit accounts, representing 63.1%
of total deposits.
Treasury stock increased $96.3 million for the year-to-date. Common stock
repurchases for the three and twelve months ended December 31, 2005, totaled
711,000 shares at an average cost of $18.24 per share, and 5.4 million shares at
an average cost of $17.92 per share, respectively. At December 31, 2005, book
value per share and tangible book value per share were $15.68 and $9.33,
respectively. An additional 2.0 million shares remain eligible for repurchase
under the current common stock repurchase authorization.
Results of Operations
Net Interest Margin
The net interest margin compressed four basis points to 3.27% for the quarter
ended December 31, 2005, from 3.31% for the quarter ended September 30, 2005.
This was a decrease of 11 basis points compared with the net interest margin of
3.38% for the quarter ended December 31, 2004. The weighted average rate for
interest-earning assets was 5.20% for the three months ended December 31, 2005,
compared with 5.11% for the trailing quarter and 4.90% for the three months
ended December 31, 2004. The weighted average rate for interest-bearing
liabilities was 2.29% for the quarter ended December 31, 2005, compared with
2.13% for the trailing quarter and 1.79% for the fourth quarter of 2004.
For the year ended December 31, 2005, the net interest margin was 3.34%. This
was a decrease of six basis points compared with the net interest margin of
3.40% for the year ended December 31, 2004. The weighted average rate for
interest-earning assets was 5.08% for the year ended December 31, 2005, compared
with 4.81% for the year ended December 31, 2004. The weighted average rate for
interest-bearing liabilities was 2.07% for the year ended December 31, 2005,
compared with 1.72% for the year ended December 31, 2004. The higher rates on
interest-earning assets and interest-bearing liabilities reflect the increases
in market interest rates experienced throughout the past year.
Non-Interest Income
Non-interest income totaled $7.7 million for the quarter ended December 31,
2005, an increase of $1.1 million, or 16.7%, compared to the same period in
2004. Fee income increased $384,000 for the quarter ended December 31, 2005,
compared with the same period in 2004, while net gains on securities sales
increased $159,000 and other income increased $536,000. The increase in fee
income was primarily attributable to deposit fees and fees related to the
outsourcing of the official check function. The increase in other income was
primarily attributable to a gain recognized on the call of an FHLB advance.
For the year ended December 31, 2005, non-interest income totaled $29.2 million,
an increase of $70,000, or 0.2%, compared to 2004. Increases in fee income of
$2.1 million and income on Bank Owned Life Insurance ("BOLI") of $666,000 were
largely offset by a reduction in securities gains of $1.0 million and a decline
in other income of $1.7 million. The increase in fee income was primarily
attributable to deposit fees, loan prepayment fees, ATM and debit card income
and fees related to the outsourcing of the official check function. The increase
in BOLI income was primarily a result of additional BOLI acquired from the First
Sentinel merger. Other income for the year ended December 31, 2005, included
losses on loan sales of $152,000, compared with gains of $1.5 million recorded
in 2004.
Non-Interest Expense
For the three months ended December 31, 2005, non-interest expense decreased
$2.7 million, or 8.4%, to $29.5 million, compared to $32.3 million for the three
months ended December 31, 2004. Other non-interest expense decreased $2.0
million for the quarter ended December 31, 2005, compared with the same period
2
in 2004, with significant reductions in consultant fees, insurance, printing and
supplies expense. Amortization of intangibles decreased $639,000 for the quarter
ended December 31, 2005, compared with the same period in 2004, as a result of
scheduled reductions in core deposit intangible amortization and a reduction in
mortgage servicing rights amortization resulting from slower principal
repayments.
For the year ended December 31, 2005, non-interest expense increased $4.8
million, or 4.1%, to $124.2 million, compared to $119.3 million for the year
ended December 31, 2004. Compensation and employee benefits expense increased
$3.7 million for the year ended December 31, 2005, compared with the same period
in 2004, as a result of increased staffing following the First Sentinel
acquisition and a $1.4 million expense recognized in the second quarter of 2005
in connection with the VRI. Amortization of intangibles increased $1.9 million
for the year ended December 31, 2005, compared with the same period in 2004,
primarily as a result of amortization of the core deposit intangible recorded in
connection with the First Sentinel acquisition. Additional increases in
occupancy expense of $2.4 million and data processing expense of $530,000 for
the year ended December 31, 2005, compared with the same period in 2004, were
also due primarily to the acquisition and integration of First Sentinel's
operations. As a result of the First Sentinel acquisition, the Company added 22
full-service branch locations, including the former headquarters building, which
serves as the Provident Loan Center. Partially offsetting these increases,
advertising and promotions expense declined $1.7 million for the year ended
December 31, 2005, compared with the same period in 2004 and other non-interest
expense declined $2.0 million. The decline in other non-interest expense
included significant reductions in consultant and audit related fees, insurance
costs and ATM processing expense.
The Company's annualized non-interest expense as a percentage of average assets
improved to 1.93% for the quarter ended December 31, 2005, compared with 1.97%
for the same period in 2004. For the year ended December 31, 2005, non-interest
expense as a percentage of average assets was 2.00%, compared with 2.24% for the
same period in 2004. The efficiency ratio (non-interest expense divided by the
sum of net interest income and non-interest income) was 57.72% for the quarter
ended December 31, 2005, compared with 58.52% for the same period in 2004. For
the year ended December 31, 2005, the efficiency ratio was 58.94%, compared with
62.31% for the same period in 2004.
Income Tax Expense
For the three and twelve months ended December 31, 2005, the Company's effective
tax rates were 31.4% and 31.9%, respectively, compared with 22.2% and 28.1% for
the three and twelve months ended December 31, 2004, respectively. In the fourth
quarter of 2004, the Company reduced a valuation allowance against a deferred
tax asset related to charitable contributions. The reduction in valuation
allowance resulted in a decrease in fourth quarter 2004 income tax expense of
$1.9 million.
Asset Quality
The Company continues to emphasize asset quality. Total non-performing loans at
December 31, 2005 were $6.0 million, or 0.16% of total loans, compared to $6.5
million, or 0.18% of total loans at September 30, 2005, and $6.2 million, or
0.17% of total loans at December 31, 2004. At December 31, 2005, the Company's
allowance for loan losses was 0.86% of total loans, compared with 0.89% of total
loans at September 30, 2005, and 0.91% of total loans at December 31, 2004. The
Company recorded provisions for loan losses of $100,000 and $600,000 for the
three and twelve months ended December 31, 2005, respectively, compared with
provisions of $900,000 and $3.6 million for the three and twelve months ended
December 31, 2004, respectively. For the three and twelve months ended December
31, 2005, net charge-offs totaled $741,000 and $2.4 million, respectively,
compared with net charge-offs of $764,000 and $3.4 million for the same periods
in 2004.
About the Company
Provident Financial Services, Inc. is the holding company for The Provident
Bank, a community-oriented bank that offers a full range of retail and
commercial loan and deposit products. The Bank currently operates 76 full
service branches throughout northern and central New Jersey.
Post Earnings Conference Call
Representatives of the Company will hold a conference call for investors at
10:00 a.m. Eastern Time on January 26, 2006 regarding highlights of the
Company's fourth quarter and year-end 2005 financial results. The call may be
accessed by dialing 1-877-407-8035 (Domestic) or 1-201-689-8035 (International).
Internet access to the call is also available (listen only) at
www.providentnj.com by going to Investor Relations and clicking on Webcast.
3
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may be
identified by reference to a future period or periods, or by the use of
forward-looking terminology, such as "may," "will," "believe," "expect,"
"estimate," "anticipate," "continue," or similar terms or variations on those
terms, or the negative of those terms. Forward-looking statements are subject to
numerous risks and uncertainties, including, but not limited to, those related
to the economic environment, particularly in the market areas in which the
Company operates, competitive products and pricing, fiscal and monetary policies
of the U.S. Government, changes in government regulations affecting financial
institutions, including regulatory fees and capital requirements, changes in
prevailing interest rates, acquisitions and the integration of acquired
businesses, credit risk management, asset-liability management, the financial
and securities markets and the availability of and costs associated with sources
of liquidity.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company
wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements. The Company does not
undertake and specifically declines any obligation to publicly release the
result of any revisions, which may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.
4
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Condition
December 31, 2005 (Unaudited) and December 31, 2004
(Dollars in Thousands)
Assets December 31, 2005 December 31, 2004
--------------------------------- ----------------------------
Cash and due from banks $ 107,353 $ 121,187
Federal funds sold -- 16,000
Short-term investments 9,915 26,507
--------------------------------- ----------------------------
Total cash and cash equivalents 117,268 163,694
--------------------------------- ----------------------------
Investment securities (market value of $407,972
at December 31, 2005 (unaudited) and $450,071
at December 31, 2004) 410,914 445,633
Securities available for sale, at fair value 1,082,957 1,406,340
Federal Home Loan Bank stock 43,794 48,283
Loans 3,739,122 3,707,211
Less allowance for loan losses 31,980 33,766
--------------------------------- ----------------------------
Net loans 3,707,142 3,673,445
--------------------------------- ----------------------------
Foreclosed assets, net 670 140
Banking premises and equipment, net 60,949 64,605
Accrued interest receivable 23,155 23,865
Intangible assets 435,838 443,148
Bank-owned life insurance 111,075 105,932
Other assets 58,612 58,237
--------------------------------- ----------------------------
Total assets $ 6,052,374 $ 6,433,322
================================= ============================
Liabilities and Stockholders' Equity
Deposits:
Demand deposits $ 1,109,507 $ 1,116,812
Savings deposits 1,363,997 1,538,466
Certificates of deposit of $100,000 or more 304,229 253,024
Other time deposits 1,143,725 1,142,171
--------------------------------- ----------------------------
Total deposits 3,921,458 4,050,473
Mortgage escrow deposits 18,121 15,389
Borrowed funds 970,108 1,166,064
Subordinated debentures 26,444 27,113
Other liabilities 39,948 37,507
--------------------------------- ----------------------------
Total liabilities 4,976,079 5,296,546
--------------------------------- ----------------------------
Stockholders' Equity:
Preferred stock, $0.01 par value,
50,000,000 shares authorized, none issued -- --
Common stock, $0.01 par value, 200,000,000 shares authorized,
79,879,017 shares issued and 68,661,800 shares outstanding at
December 31, 2005, and 74,078,784 shares outstanding
at December 31, 2004 799 799
Additional paid-in capital 964,555 960,792
Retained earnings 395,589 358,678
Accumulated other comprehensive (loss) income (8,906) 3,767
Treasury stock at cost (167,113) (70,810)
Unallocated common stock held by Employee Stock
Ownership Plan (73,316) (76,101)
Common Stock acquired by the Stock Award Plan (35,313) (40,349)
Common Stock acquired by the Directors' Deferred Fee Plan (13,224) (13,379)
5
Deferred compensation - Directors' Deferred Fee Plan 13,224 13,379
-------------------------------- ----------------------------
Total stockholders' equity 1,076,295 1,136,776
-------------------------------- ----------------------------
Total liabilities and stockholders'
equity $ 6,052,374 $ 6,433,322
================================ ============================
6
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Three Months and Year Ended December 31, 2005 and 2004 (Unaudited)
(Dollars in Thousands, Except Per Share Data)
Three Months Ended Year Ended
December 31, December 31,
----------------------------- ----------------------------
2005 2004 2005 2004
------------- --------------- ------------- --------------
(Unaudited) (Unaudited)
Interest income:
Real estate secured loans $ 38,659 $ 39,313 $ 154,332 $ 121,291
Commercial loans 5,996 5,025 21,923 18,309
Consumer loans 8,133 7,136 30,523 23,084
Investment securities 4,260 4,661 17,185 19,183
Securities available for sale 11,797 14,072 50,698 46,675
Other short-term investments 94 72 513 480
Federal funds 469 52 1,288 521
------------- --------------- ------------- --------------
Total interest income 69,408 70,331 276,462 229,543
------------- --------------- ------------- --------------
Interest expense:
Deposits 17,155 12,383 59,774 39,506
Borrowed funds 8,354 9,099 33,759 27,107
Subordinated debentures 391 319 1,474 572
------------- --------------- ------------- --------------
Total interest expense 25,900 21,801 95,007 67,185
------------- --------------- ------------- --------------
Net interest income 43,508 48,530 181,455 162,358
Provision for loan losses 100 900 600 3,600
------------- --------------- ------------- --------------
Net interest income after
provision for loan losses 43,408 47,630 180,855 158,758
------------- --------------- ------------- --------------
Non-interest income:
Fees 5,707 5,323 22,968 20,859
Net gain (loss) on securities transactions 157 (2) 308 1,310
Bank-owned life insurance 1,305 1,284 5,143 4,477
Other income 510 (26) 802 2,505
------------- --------------- ------------- --------------
Total non-interest income 7,679 6,579 29,221 29,151
------------- --------------- ------------- --------------
Non-interest expense:
Compensation and employee benefits 14,614 14,747 64,800 61,098
Net occupancy expense 4,933 4,653 19,456 17,008
Data processing expense 2,302 2,414 8,764 8,234
Amortization of intangibles 1,579 2,218 7,160 5,266
Advertising and promotion 987 1,072 4,277 5,969
Other operating expenses 5,128 7,147 19,721 21,759
------------- --------------- ------------- --------------
Total non-interest expense 29,543 32,251 124,178 119,334
------------- --------------- ------------- --------------
Income before income tax expense 21,544 21,958 85,898 68,575
Income tax expense 6,773 4,875 27,399 19,274
------------- --------------- ------------- --------------
Net income $ 14,771 $ 17,083 $ 58,499 $ 49,301
============= =============== ============= ==============
Basic earnings per share $0.23 $0.25 $0.89 $0.80
Average basic shares outstanding 64,282,046 69,031,409 66,083,173 61,576,544
Diluted earnings per share $0.23 $0.24 $0.88 $0.80
Average diluted shares outstanding 65,022,636 69,766,411 66,836,536 61,932,173
7
PROVIDENT FINANCIAL SERVICES, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share data) (Unaudited)
At or for the Three At or for the
Months Ended Year Ended
December 31, December 31,
-------------------------------------------------------------
2005 2004 2005 2004
---- ---- ---- ----
INCOME STATEMENT:
Net interest income $43,508 $48,530 $181,455 $162,358
Provision for loan losses 100 900 600 3,600
Non-interest income 7,679 6,579 29,221 29,151
Non-interest expense 29,543 32,251 124,178 119,334
Income before income tax expense 21,544 21,958 85,898 68,575
Net income 14,771 17,083 58,499 49,301
Basic earnings per share $0.23 $0.25 $0.89 $0.80
Diluted earnings per share $0.23 $0.24 $0.88 $0.80
Interest rate spread 2.91% 3.11% 3.01% 3.09%
Net interest margin 3.27% 3.38% 3.34% 3.40%
PROFITABILITY:
Annualized return on average assets 0.96% 1.05% 0.94% 0.93%
Annualized return on average equity 5.45% 6.01% 5.32% 5.06%
Annualized non-interest expense to
average assets 1.93% 1.97% 2.00% 2.24%
Efficiency ratio (1) 57.72% 58.52% 58.94% 62.31%
ASSET QUALITY:
Non-performing loans $6,005 $6,195
Foreclosed assets 670 140
Non-performing loans to
total loans 0.16% 0.17%
Non-performing assets to
total assets 0.11% 0.10%
Allowance for loan losses $31,980 $33,766
Allowance for loan losses to
non-performing loans 532.56% 545.05%
Allowance for loan losses to
total loans 0.86% 0.91%
AVERAGE BALANCE SHEET DATA:
Assets $6,084,665 $6,485,607 $6,220,912 $5,315,860
Loans, net 3,661,156 3,711,983 3,658,930 2,906,982
Earning assets 5,315,713 5,705,720 5,439,779 4,774,031
Core deposits 2,498,879 2,654,426 2,560,690 2,178,806
Borrowings 1,029,271 1,246,652 1,105,948 956,922
Interest-bearing liabilities 4,484,223 4,835,099 4,597,539 3,909,188
Stockholders' equity 1,075,263 1,128,147 1,099,842 974,963
Average yield on interest-
earning assets 5.20% 4.90% 5.08% 4.81%
Average cost of interest-
bearing liabilities 2.29% 1.79% 2.07% 1.72%
8
Notes
(1) Efficiency Ratio Calculation
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2005 2004 2005 2004
---- ---- ---- ----
Net interest income $43,508 $48,530 $ 181,455 $162,358
Non-interest income 7,679 6,579 29,221 29,151
---------- ---------- ---------- -----------
Total income $ 51,187 $ 55,109 $ 210,676 $ 191,509
====== ====== ======= =======
Non-interest expense $ 29,543 $ 32,251 $ 124,178 $ 119,334
====== ====== ======= =======
Expense/Income: 57.72% 58.52% 58.94% 62.31%
====== ====== ====== ======
9
Average Quarterly Balances
NET INTEREST MARGIN ANALYSIS
(Unaudited)(Dollars in Thousands)
December 31, 2005 September 30, 2005
Average Average Average Average
Balance Interest Yield Balance Interest Yield
--------------------------------------- ---------------------------------
Interest-Earning Assets:
Federal Funds Sold and
Other Short-Term Investments $ 57,859 $ 563 3.86% $ 46,332 $ 386 3.31%
Investment Securities (1) 419,244 4,260 4.06% 429,596 4,275 3.99%
Securities Available for Sale 1,135,151 11,208 3.95% 1,222,842 11,705 3.83%
Federal Home Loan Bank Stock 42,303 589 5.52% 44,213 566 5.08%
Net Loans (2)
Total Mortgage Loans 2,747,964 38,659 5.61% 2,747,397 38,759 5.63%
Total Commercial Loans 363,745 5,996 6.45% 371,342 5,691 6.00%
Total Consumer Loans 549,447 8,133 5.88% 541,025 7,889 5.79%
-------------- ------------ ----------- ----------
Total Interest-Earning Assets 5,315,713 69,408 5.20% 5,402,747 69,271 5.11%
-------------- ------------ ----------- ----------
Non-Interest Earning Assets:
Cash and Due from Banks 89,474 102,519
Other Assets 679,478 683,507
-------------- -----------
Total Assets $ 6,084,665 $ 6,188,773
============== ===========
Interest-Bearing Liabilities:
Demand Deposits $ 637,084 2,084 1.30% $ 614,294 1,698 1.10%
Savings Deposits 1,389,260 3,912 1.12% 1,468,944 4,119 1.11%
Time Deposits 1,428,608 11,159 3.10% 1,378,586 9,786 2.82%
-------------- ------------ ----------- ----------
Total Deposits 3,454,952 17,155 1.97% 3,461,824 15,603 1.79%
-------------- ------------ ----------- ----------
Borrowed Funds 1,029,271 8,745 3.37% 1,103,611 8,857 3.18%
-------------- ------------ ----------- ----------
Total Borrowings 1,029,271 8,745 3.37% 1,103,611 8,857 3.18%
-------------- ------------ ----------- ----------
Total Interest-Bearing Liabilities 4,484,223 25,900 2.29% 4,565,435 24,460 2.13%
-------------- ------------ ----------- ----------
Non-Interest Bearing Liabilities 525,179 530,462
-------------- -----------
Total Liabilities 5,009,402 5,095,897
Stockholders' Equity 1,075,263 1,092,876
-------------- -----------
Total Liabilities &
Stockholders' Equity $ 6,084,665 $ 6,188,773
============== ===========
Net interest income $ 43,508 $ 44,811
============ ==========
Net interest rate spread 2.91% 2.98%
==== ====
Net interest-earning assets $ 831,490 $ 837,312
============== ===========
Net interest margin (3) 3.27% 3.31%
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.19x 1.18x
============== ===========
<FN>
- ----------------------------------------------
(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances are net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Annualized net interest income divided by average interest-earning
assets.
</FN>
10
The following table summarizes the quarterly net interest margin for the
previous year, inclusive.
12/31/05 9/30/05 6/30/05 3/31/05 12/31/04
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
-------- -------- -------- -------- --------
Interest-Earning Assets:
Securities 4.02% 3.88% 3.86% 3.90% 3.76%
Net Loans 5.73% 5.69% 5.58% 5.53% 5.52%
Total Interest-Earning Assets 5.20% 5.11% 5.01% 4.97% 4.90%
Interest-Bearing Liabilities:
Total Deposits 1.97% 1.79% 1.61% 1.48% 1.37%
Total Borrowings 3.37% 3.18% 3.12% 3.08% 3.01%
Total Interest-Bearing Liabilities 2.29% 2.13% 1.97% 1.88% 1.79%
Interest Rate Spread 2.91% 2.98% 3.04% 3.09% 3.11%
Net Interest Margin 3.27% 3.31% 3.34% 3.38% 3.38%
Ratio of Interest-Earning Assets to
Total Interest-Bearing Liabilities 1.19x 1.18x 1.18x 1.18x 1.18x
11
Average YTD Balances
NET INTEREST MARGIN ANALYSIS
(Unaudited)(Dollars in Thousands)
December 31, 2005 December 31, 2004
Average Average Average Average
Balance Interest Yield Balance Interest Yield
--------------------------------------- ---------------------------------
Interest-Earning Assets:
Federal Funds Sold and
Other Short-Term Investments $ 58,156 $ 1,801 3.10% $ 87,635 $ 1,001 1.14%
Investment Securities (1) 428,461 17,185 4.01% 484,583 19,183 3.96%
Securities Available for Sale 1,249,419 48,607 3.89% 1,253,570 45,968 3.67%
Federal Home Loan Bank Stock 44,813 2,091 4.67% 41,261 707 1.71%
Net Loans (2)
Total Mortgage Loans 2,763,222 154,332 5.59% 2,183,550 121,291 5.55%
Total Commercial Loans 360,166 21,923 6.09% 320,669 18,309 5.71%
Total Consumer Loans 535,542 30,523 5.70% 402,763 23,084 5.73%
-------------- ------------ ----------- ----------
Total Interest-Earning Assets 5,439,779 276,462 5.08% 4,774,031 229,543 4.81%
-------------- ------------ ----------- ----------
Non-Interest Earning Assets:
Cash and Due from Banks 98,854 93,511
Other Assets 682,279 448,318
-------------- -----------
Total Assets $ 6,220,912 $ 5,315,860
============== ===========
Interest-Bearing Liabilities:
Demand Deposits $ 618,280 6,223 1.01% $ 541,120 4,274 0.79%
Savings Deposits 1,474,053 15,657 1.06% 1,254,758 11,011 0.88%
Time Deposits 1,399,258 37,894 2.71% 1,156,388 24,221 2.09%
-------------- ------------ ----------- ----------
Total Deposits 3,491,591 59,774 1.71% 2,952,266 39,506 1.34%
-------------- ------------ ----------- ----------
Borrowed Funds 1,105,948 35,233 3.19% 956,922 27,679 2.89%
-------------- ------------ ----------- ----------
Total Borrowings 1,105,948 35,233 3.19% 956,922 27,679 2.89%
-------------- ------------ ----------- ----------
Total Interest-Bearing Liabilities 4,597,539 95,007 2.07% 3,909,188 67,185 1.72%
-------------- ------------ ----------- ----------
Non-Interest Bearing Liabilities 523,531 431,709
-------------- -----------
Total Liabilities 5,121,070 4,340,897
Stockholders' Equity 1,099,842 974,963
-------------- -----------
Total Liabilities &
Stockholders' Equity $ 6,220,912 $ 5,315,860
============== ===========
Net interest income $ 181,455 $ 162,358
============ ==========
Net interest rate spread 3.01% 3.09%
==== ====
Net interest-earning assets $ 842,240 $ 864,843
============== ===========
Net interest margin (3) 3.34% 3.40%
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.18x 1.22x
============== ===========
<FN>
- ----------------------------------------------
(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances are net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Annualized net interest income divided by average interest-earning
assets.
</FN>
12
The following table summarizes the YTD net interest margin for the previous
three years, inclusive.
Year Ended
----------------------------------------
12/31/05 12/31/04 12/31/03
-------- -------- --------
Interest-Earning Assets:
Securities 3.91% 3.58% 3.31%
Net Loans 5.65% 5.60% 6.13%
Total Interest-Earning Assets 5.08% 4.81% 4.78%
Interest-Bearing Liabilities:
Total Deposits 1.71% 1.34% 1.66%
Total Borrowings 3.19% 2.89% 2.72%
Total Interest-Bearing Liabilities 2.07% 1.72% 1.87%
Interest Rate Spread 3.01% 3.09% 2.91%
Net Interest Margin 3.34% 3.40% 3.37%
Ratio of Interest-Earning Assets to
Total Interest-Bearing Liabilities 1.18x 1.22x 1.32x