NEWS RELEASE
CONTACT: Kenneth J. Wagner, SVP Investor Relations
Provident Financial Services, Inc.
(201) 915-5344
FOR RELEASE: 7:43 A.M. Eastern Time: May 1, 2009
Provident Financial Services, Inc. Announces Quarterly Results and Declares
Quarterly Cash Dividend
JERSEY CITY, NJ, May 1, 2009---/PRNewswire/First Call/ - Provident Financial
Services, Inc. (NYSE:PFS) (the "Company") reported operating income, excluding a
non-cash goodwill impairment charge, of $8.9 million, or $0.16 per basic and
diluted share for the three months ended March 31, 2009. Due to the continued
decline in the first quarter of 2009 in stock prices in the financial services
sector and in the Company's common stock price, the Company recognized a $152.5
million, or $2.72 per share goodwill impairment charge during the quarter ended
March 31, 2009. This accounting charge resulted in a net loss of $143.6 million,
or $2.56 per basic and diluted share for the quarter ended March 31, 2009. This
compares with net income of $10.7 million, or basic and diluted earnings per
share of $0.19 for the same period in 2008. The goodwill impairment charge was a
non-cash accounting adjustment to the Company's financial statements which did
not affect cash flows, liquidity, or tangible capital. As goodwill is excluded
from regulatory capital, the impairment charge did not impact the regulatory
capital ratios of the Company or its wholly owned subsidiary, The Provident
Bank, both of which remain "well-capitalized" under regulatory requirements.
Compared with the three months ended March 31, 2008, earnings and per share data
for the three months ended March 31, 2009 also reflect an increase to the
provision for loan losses due to the following: an increase in non-performing
loans; growth in the loan portfolio; an increase in commercial loans as a
percentage of the loan portfolio; and the impact of current macroeconomic
conditions. The provision for loan losses was $5.8 million for the three months
ended March 31, 2009, compared with $1.3 million for the same period in 2008.
Earnings and per share data for the three months ended March 31, 2009 also
include severance costs totaling $320,000, net of tax.
Results for the prior year first quarter ended March 31, 2008 were favorably
impacted by a $180,000 net after-tax gain recorded in connection with the
ownership and mandatory redemption of a portion of the Company's Class B Visa,
Inc. shares as part of Visa's initial public offering, and a $175,000 net
after-tax gain resulting from the sale of the deposits of a branch office.
Paul M. Pantozzi, Chairman and Chief Executive Officer, commented, "Faced with a
challenging economy, we continue to manage our balance sheet and overhead cost
structure with a view toward long-term profitable growth. While our stock
continued to trade down with the market during the quarter, necessitating the
recognition under accounting rules of a non-cash goodwill impairment charge, our
core business operations remained strong and our operating earnings performance
positive. We experienced increases in every major deposit category, and we
continued to originate loans to quality borrowers. In addition, we have
continued to diligently assess the risks inherent in our loan portfolios and to
supplement our loan loss reserves accordingly while maintaining well-capitalized
status, as defined by our regulators. I am pleased that based on core results
and this capital position our Board of Directors maintained the quarterly cash
dividend at a level unchanged from prior quarters."
Declaration of Quarterly Dividend
The Company's Board of Directors declared a quarterly cash dividend of $0.11 per
common share payable on May 29, 2009, to stockholders of record as of the close
of business on May 15, 2009.
Balance Sheet Summary
Total assets decreased $24.8 million, or 0.4%, to $6.52 billion at March 31,
2009, from $6.55 billion at December 31, 2008, primarily as a result of the
decrease in intangible assets resulting from the goodwill impairment charge,
partially offset by an increase in cash and cash equivalents resulting from
deposit inflows and sales and repayments of loans. Cash and cash equivalents
increased $235.8 million to $304.3 million at March 31, 2009, from $68.5 million
at December 31, 2008. At quarter-end, these balances were pending redeployment
to fund loan originations, investment purchases and the repayment of maturing
borrowings.
1
Total investments increased $46.0 million, or 3.8%, during the three months
ended March 31, 2009. The increase was due to $84.9 million of residential
mortgage loan pools that were securitized by the Company and are now held as
securities available for sale, partially offset by repayments, sales, calls and
maturities. The Company sold $12.3 million of Agency mortgage-backed securities
during the first quarter of 2009, realizing net gains of $187,000.
The Company's net loans decreased $156.0 million, or 3.5%, to $4.32 billion at
March 31, 2009, from $4.48 billion at December 31, 2008, largely as a result of
the securitization of $84.9 million of conforming one- to four-family 30-year
fixed-rate residential mortgage loans. Loan originations totaled $268.9 million
and loan purchases totaled $12.9 million for the three months ended March 31,
2009. The loan portfolio had net increases of $34.9 million in commercial and
multi-family mortgage loans, that were more than offset by decreases of $135.0
million in residential mortgage loans, $22.8 million in commercial loans, $14.2
million in consumer loans and $13.1 million in construction loans. Commercial
real estate, construction and commercial loans represented 48.1% of the loan
portfolio at March 31, 2009, compared to 46.5% at December 31, 2008.
At March 31, 2009, the Company's unfunded loan commitments totaled $708.7
million, including $242.0 million in commercial loan commitments, $101.1 million
in construction loan commitments and $90.0 million in commercial mortgage
commitments. Unfunded loan commitments at December 31, 2008 were $699.7 million.
Intangible assets decreased $153.8 million to $360.9 million at March 31, 2009,
from $514.7 million at December 31, 2008, primarily due to the aforementioned
$152.5 million goodwill impairment charge. At March 31, 2009, the Company had
goodwill totaling $346.3 million, compared to $498.8 million at December 31,
2008, resulting primarily from acquisitions completed in 2004 and 2007. U.S.
generally accepted accounting principles require companies to perform an annual
test for goodwill impairment. As previously reported in the Company's Annual
Report on Form 10-K for the year ended December 31, 2008, the Company performed
an annual goodwill impairment test at September 30, 2008, and a subsequent test
at December 31, 2008. The results of both analyses indicated that goodwill was
not impaired. As a result of the continued decline in the first quarter of 2009
in stock prices in the financial services sector and in the Company's common
stock price, the Company initiated a goodwill impairment test as of March 31,
2009, indicating that goodwill resulting from these acquisitions was impaired.
Total deposits increased $290.5 million, or 6.9%, during the three months ended
March 31, 2009 to $4.52 billion. Core deposits, consisting of savings and demand
deposit accounts, represented 62.6% of total deposits at March 31, 2009,
compared to 63.7% at December 31, 2008. Core deposits increased $134.1 million,
or 5.0%, to $2.83 billion at March 31, 2009, from $2.69 billion at December 31,
2008.
Borrowed funds decreased $164.9 million, or 13.2% during the three months ended
March 31, 2009, to $1.08 billion. Borrowed funds represented 16.6% of total
assets at March 31, 2009, a reduction from 19.1% at December 31, 2008.
Common stock repurchases for the three months ended March 31, 2009, totaled
5,000 shares at an average cost of $11.36 per share. At March 31, 2009, 2.1
million shares remained eligible for repurchase under the current authorization.
At March 31, 2009, book value per share and tangible book value per share were
$14.57 and $8.54, respectively, compared with $17.09 and $8.45, respectively, at
December 31, 2008.
Results of Operations
Net Interest Margin
The net interest margin decreased 10 basis points to 3.10% for the quarter ended
March 31, 2009, from 3.20% for the quarter ended December 31, 2008. The decrease
in the net interest margin for the three months ended March 31, 2009 versus the
trailing quarter was attributable to reductions in earning asset yields, an
increase in the average balance of lower-yielding short-term investments and an
increase in the average balance of non-performing loans. The weighted average
rate for interest-earning assets was 5.21% for the three months ended March 31,
2009, compared with 5.38% for the three months ended December 31, 2008. The
weighted average rate for interest-bearing liabilities was 2.39% for the quarter
ended March 31, 2009, compared with 2.47% for the trailing quarter. The average
cost of deposits for the three months ended March 31, 2009 was 2.06%, compared
with 2.14% for the trailing quarter. The average cost of borrowed funds for the
three months ended March 31, 2009 was 3.47%, compared with 3.45% for the three
months ended December 31, 2008.
The net interest margin for the quarter ended March 31, 2009 increased 23 basis
points compared with the net interest margin of 2.87% for the quarter ended
March 31, 2008. The weighted average rate for interest-earning assets declined
42 basis points to 5.21% for the three months ended March 31, 2009, compared
with 5.63% for the three months ended March 31, 2008, however the weighted
average rate for interest-bearing liabilities declined 75 basis points to 2.39%
for the quarter ended March 31, 2009, compared with 3.14% for the first quarter
of 2008. The average cost of deposits for the three months ended March 31, 2009
2
was 2.06%, compared with 2.87% for the same period last year. The average cost
of borrowed funds for the three months ended March 31, 2009 was 3.47%, compared
with 4.06% for the same period last year.
Non-Interest Income
Non-interest income totaled $7.0 million for the quarter ended March 31, 2009, a
decrease of $1.8 million, or 20.7%, compared to the same period in 2008. Other
income decreased $886,000 to $381,000 for the three months ended March 31, 2009,
from $1.3 million for the three months ended March 31, 2008, due to the
realization of non-recurring earnings in the first quarter of 2008, including
$660,000 in pre-tax gains associated with the ownership and mandatory redemption
of a portion of the Company's Class B Visa, Inc. shares as part of Visa's
initial public offering, and $400,000 in pre-tax gains on the sale of deposits
associated with the sale of an under-performing branch. Fee income decreased
$885,000 to $5.2 million for the three months ended March 31, 2009, from $6.1
million for the three months ended March 31, 2008, due primarily to lower
deposit and loan prepayment fees and reductions in income on funds underlying
outstanding official checks as a result of lower short-term interest rates.
Income from the appreciation of the cash surrender value of Bank-owned life
insurance decreased $139,000 to $1.2 million for the quarter ended March 31,
2009, compared with the same period in 2008, primarily as a result of lower
carrier crediting rates due to the lower interest rate environment.
Non-Interest Expense
Excluding the $152.5 million non-cash goodwill impairment charge recorded for
the quarter ended March 31, 2009, non-interest expense increased $1.3 million,
or 4.2%, to $33.3 million, compared to $32.0 million for the three months ended
March 31, 2008. Compensation and benefits expense increased $764,000 to $17.5
million for the three months ended March 31, 2009, from $16.7 million for the
three months ended March 31, 2008, due primarily to pre-tax severance costs of
$541,000 recognized in the first quarter of 2009 and increases in pension and
healthcare benefits expense. Other operating expenses increased $476,000 to $5.8
million for the quarter ended March 31, 2009, from $5.3 million for the same
period last year, primarily due to increases in deposit insurance costs and
expenses related to foreclosed assets.
Excluding the goodwill impairment charge, the Company's annualized non-interest
expense as a percentage of average assets was 2.07% for the quarter ended March
31, 2009, compared with 2.03% for the same period in 2008. Excluding the
goodwill impairment charge, the efficiency ratio (non-interest expense divided
by the sum of net interest income and non-interest income) was 65.42% for the
quarter ended March 31, 2009, compared with 66.60% for the same period in 2008.
Asset Quality
Total non-performing loans at March 31, 2009 were $63.8 million, or 1.46% of
total loans, compared with $59.1 million, or 1.31% of total loans at December
31, 2008, and $27.4 million, or 0.64% of total loans at March 31, 2008. At March
31, 2009, impaired loans totaled $38.5 million with related specific reserves of
$8.4 million. At March 31, 2009, the Company's allowance for loan losses was
1.20% of total loans, compared with 1.05% of total loans at December 31, 2008,
and 0.96% of total loans at March 31, 2008. The Company recorded a provision for
loan losses of $5.8 million for the quarter ended March 31, 2009, compared with
a provision of $1.3 million for the quarter ended March 31, 2008. For each of
the three-month periods ended March 31, 2009 and 2008, the Company had net
charge-offs of $1.2 million. The increase in the loan loss provision for the
three months ended March 31, 2009, compared with the same period in 2008, was
attributable to an increase in non-performing loans, downgrades in risk ratings,
year-over-year growth in the loan portfolio and an increase in commercial loans
as a percentage of the loan portfolio to 48.1% at March 31, 2009, from 46.4% at
March 31, 2008. At March 31, 2009, the Company held $4.8 million of foreclosed
assets, compared with $3.4 million at December 31, 2008.
Income Tax Expense
For the three months ended March 31, 2009, the Company's income tax expense was
$2.9 million. This compared with $4.0 million for the same period in 2008. The
decrease in income tax expense was attributable to lower pre-tax income and a
lower effective tax rate. Excluding the impact of the goodwill impairment
charge, which is not tax-deductible, the Company's effective tax rate was 24.7%
for the three months ended March 31, 2009, compared with 27.4% for the three
months ended March 31, 2008. The reduction in the Company's effective tax rate
was primarily the result of a larger proportion of the Company's income being
derived from tax-exempt sources.
3
Annual Meeting of Stockholders
At the Company's 2009 Annual Meeting of Stockholders held on April 22, 2009, the
stockholders elected Geoffrey M. Connor, Christopher Martin, Edward O'Donnell
and Jeffries Shein to the Board of Directors, each for a three-year term. The
Company's stockholders also ratified the appointment of KPMG LLP as the
Company's independent registered public accounting firm for the year ending
December 31, 2009.
About the Company
Provident Financial Services, Inc. is the holding company for The Provident
Bank, a community-oriented bank offering a full range of retail and commercial
loan and deposit products. At March 31, 2009, the Bank operated 82 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 May 1, 2009 regarding highlights of the Company's
first quarter 2009 financial results. The call may be accessed by dialing
1-800-860-2442 (Domestic) or 1-412-858-4600 (International). Internet access to
the call is also available (listen only) at www.providentnj.com by going to
Investor Relations and clicking on Webcast.
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
March 31, 2009 (Unaudited) and December 31, 2008
(Dollars in Thousands)
Assets March 31, 2009 December 31, 2008
--------------------------------- ----------------------------
Cash and due from banks $ 171,838 $ 66,315
Federal funds sold 125,000 --
Short-term investments 7,484 2,231
--------------------------------- ----------------------------
Total cash and cash equivalents 304,322 68,546
--------------------------------- ----------------------------
Investment securities held to maturity (market value of $342,199 at March 31,
2009 (unaudited) and $351,623
at December 31, 2008) 335,665 347,484
Securities available for sale, at fair value 885,803 820,329
Federal Home Loan Bank stock 35,180 42,833
Loans 4,375,366 4,526,748
Less allowance for loan losses 52,350 47,712
--------------------------------- ----------------------------
Net loans 4,323,016 4,479,036
--------------------------------- ----------------------------
Foreclosed assets, net 4,758 3,439
Banking premises and equipment, net 75,893 75,750
Accrued interest receivable 23,571 23,866
Intangible assets 360,852 514,684
Bank-owned life insurance 128,125 126,956
Other assets 46,745 45,825
--------------------------------- ----------------------------
Total assets $ 6,523,930 $ 6,548,748
================================= ============================
Liabilities and Stockholders' Equity
Deposits:
Demand deposits $ 1,937,527 $ 1,821,437
Savings deposits 890,438 872,388
Certificates of deposit of $100,000 or more 531,216 445,466
Other time deposits 1,157,696 1,087,045
--------------------------------- ----------------------------
Total deposits 4,516,877 4,226,336
Mortgage escrow deposits 14,239 20,074
Borrowed funds 1,082,762 1,247,681
Other
liabilities 38,035 36,067
--------------------------------- ----------------------------
Total liabilities 5,651,913 5,530,158
--------------------------------- ----------------------------
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,
83,209,293 shares issued and 59,834,229 shares outstanding at
March 31, 2009, and 59,610,623 shares outstanding at
December 31, 2008 832 832
Additional paid-in capital 1,013,676 1,013,293
Retained earnings 304,178 454,444
Accumulated other comprehensive income (loss) 2,197 (485)
Treasury stock at cost (384,914) (384,854)
Unallocated common stock held by Employee Stock
Ownership Plan (63,952) (64,640)
Common Stock acquired by the Directors' Deferred Fee Plan (7,644) (7,667)
Deferred compensation - Directors' Deferred Fee Plan 7,644 7,667
-------------------------------- ----------------------------
5
Total stockholders' equity 872,017 1,018,590
-------------------------------- ----------------------------
Total liabilities and stockholders'
equity $ 6,523,930 $ 6,548,748
================================ ============================
6
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Operations
Three Months Ended March 31, 2009 and 2008
(Dollars in thousands, except per share data)
Three Months Ended
March 31
------------------------------
2009 2008
------------- ----------------
(Unaudited)
Interest income:
Real estate secured loans $ 40,605 41,387
Commercial loans 10,498 11,282
Consumer loans 8,174 9,679
Investment securities 3,449 3,653
Securities available for sale 10,711 10,287
Other short-term investments 7 226
Federal funds 13 148
------------- ----------------
Total interest income 73,457 76,662
------------- ----------------
Interest expense:
Deposits 19,570 26,590
Borrowed funds 9,956 10,883
------------- ----------------
Total interest expense 29,526 37,473
------------- ----------------
Net interest income 43,931 39,189
Provision for loan losses 5,800 1,300
------------- ----------------
Net interest income after
provision for loan losses 38,131 37,889
------------- ----------------
Non-interest income:
Fees 5,229 6,114
Bank-owned life insurance 1,169 1,308
Net gain on securities transactions 187 96
Other income 381 1,267
------------- ----------------
Total non-interest income 6,966 8,785
------------- ----------------
Non-interest expense:
Goodwill impairment 152,502 --
Compensation and employee benefits 17,477 16,713
Net occupancy expense 5,392 5,257
Data processing expense 2,356 2,363
Amortization of intangibles 1,594 1,776
Advertising and promotion expense 674 517
Other operating expenses 5,802 5,326
------------- ----------------
Total non-interest expense 185,797 31,952
------------- ----------------
(Loss) income before income
tax expense (140,700) 14,722
Income tax expense 2,919 4,029
------------- ----------------
Net (loss) income $ (143,619) 10,693
============= ================
Basic (loss) earnings per share $(2.56) $0.19
Average basic shares outstanding 56,169,573 55,924,581
Diluted (loss) earnings per share $(2.56) $0.19
Average diluted shares outstanding 56,169,573 55,924,581
7
PROVIDENT FINANCIAL SERVICES, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share data) (Unaudited)
At or for the Three
Months Ended
March 31,
-------------------------------
2009 2008
---- ----
STATEMENTS OF OPERATIONS:
Net interest income $43,931 $39,189
Provision for loan losses 5,800 1,300
Non-interest income 6,966 8,785
Non-interest expense (1) 33,295 31,952
Operating income before income tax expense (2) 11,802 14,722
Operating income (2) 8,883 10,693
Goodwill impairment charge 152,502 --
Net (loss) income $(143,619) 10,693
Operating basic and diluted earnings per share (1) $0.16 $0.19
Per share impact of goodwill impairment charge $(2.72) --
Basic and diluted (loss) earnings per share $(2.56) $0.19
Interest rate spread 2.82% 2.49%
Net interest margin 3.10% 2.87%
PROFITABILITY:
Annualized return on average assets (1) 0.55% 0.68%
Annualized return on average equity (1) 3.53% 4.28%
Annualized non-interest expense to average assets (1) 2.07% 2.03%
Efficiency ratio (1), (3) 65.42% 66.60%
ASSET QUALITY:
Non-accrual loans 63,753 27,401
Non-performing loans 63,753 27,401
Foreclosed assets 4,758 3,160
Non-performing loans to
total loans 1.46% 0.64%
Non-performing assets to
total assets 1.03% 0.48%
Allowance for loan losses $52,350 $40,857
Allowance for loan losses to
non-performing loans 82.11% 149.11%
Allowance for loan losses to
total loans 1.20% 0.96%
AVERAGE BALANCE SHEET DATA:
Assets $6,537,760 $6,324,774
Loans, net 4,362,467 4,237,200
Interest-Earning assets 5,678,197 5,463,739
Core deposits 2,714,808 2,578,987
Borrowed funds 1,163,140 1,078,838
Interest-bearing liabilities 5,013,652 4,805,002
Stockholders' equity 1,019,231 1,005,833
Average yield on interest-
earning assets 5.21% 5.63%
8
Average cost of interest-
bearing liabilities 2.39% 3.14%
9
Notes
- -----
(1) Excluding a $152.5 non-cash goodwill impairment charge
(2) Operating Income Reconciliation
Three Months Ended
March 31,
---------
2009 2008
---- ----
Net (loss) income $(143,619) $10,693
Goodwill impairment 152,502 --
------- --
Operating income 8,883 10,693
===== ======
(3) Efficiency Ratio Calculation
Three Months Ended
March 31,
2009 2008
---- ----
Net interest income $43,931 $39,189
Non-interest income 6,966 8,785
----- -----
Total income $50,897 $47,974
======= =======
Non-interest expense (1) $33,295 $31,952
======= =======
Expense/Income (1): 65.42% 66.60%
====== ======
10
Average Quarterly Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) (Dollars in thousands) March 31, 2009 December 31, 2008
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------------------------------------------ ----------------------------------------
Interest-Earning Assets:
Federal Funds Sold and
Other Short-Term
Investments $ 40,640 $ 20 0.20 % $ 4,490 $ 17 1.37 %
Investment Securities (1) 343,360 3,449 4.02 352,361 3,571 4.05
Securities Available for Sale 893,274 10,386 4.65 826,271 9,859 4.77
Federal Home Loan Bank Stock 38,456 325 3.42 43,069 359 3.32
Net Loans (2)
Total Mortgage Loans 3,022,253 40,605 5.40 3,088,659 42,657 5.51
Total Commercial Loans 724,545 10,498 5.88 672,103 10,431 6.17
Total Consumer Loans 615,669 8,174 5.38 625,677 8,795 5.59
------------- ----------- -------------- ----------
Total Interest-Earning Assets 5,678,197 73,457 5.21 5,612,630 75,689 5.38
----------- -------------- ---------- --------------
Non-Interest Earning Assets:
Cash and Due from Banks 82,195 70,890
Other Assets 777,368 785,672
------------- --------------
Total Assets $ 6,537,760 $ 6,469,192
============= ==============
Interest-Bearing Liabilities:
Demand Deposits $ 1,383,678 5,514 1.62 % $ 1,314,577 5,958 1.80 %
Savings Deposits 871,710 1,884 0.88 881,182 2,086 0.94
Time Deposits 1,595,124 12,172 3.09 1,509,066 11,898 3.14
------------- ----------- -------------- ----------
Total Deposits 3,850,512 19,570 2.06 3,704,825 19,942 2.14
----------- ----------
Borrowed Funds 1,163,140 9,956 3.47 1,243,879 10,787 3.45
------------- ----------- -------------- ----------
Total Interest-Bearing Liabilities 5,013,652 29,526 2.39 4,948,704 30,729 2.47
----------- -------------- ---------- --------------
Non-Interest Bearing Liabilities 504,877 504,233
------------- --------------
Total Liabilities 5,518,529 5,452,937
Stockholders' Equity 1,019,231 1,016,255
------------- --------------
Total Liabilities & $ 6,537,760 $ 6,469,192
Stockholders' Equity
============= ==============
Net interest income $ 43,931 $ 44,960
=========== ==========
Net interest rate spread 2.82 % 2.91 %
==== ====
Net interest-earning assets $ 664,545 $ 663,878
============= ==============
Net interest margin (3) 3.10 % 3.20 %
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.13 x 1.13 x
- ------------------------------------------------------------------------------------------------------------------------------------
(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.
11
The following table summarizes the net interest margin for the previous year,
inclusive.
3/31/09 12/31/08 9/30/08 6/30/08 3/31/08
1stQtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
------- -------- -------- -------- --------
Interest-Earning Assets:
Securities 4.31% 4.50% 4.59% 4.66% 4.67%
Net Loans 5.48% 5.63% 5.78% 5.76% 5.90%
Total Interest-Earning Assets 5.21% 5.38% 5.51% 5.50% 5.63%
Interest-Bearing Liabilities
Total Deposits 2.06% 2.14% 2.19% 2.41% 2.87%
Borrowed Funds 3.47% 3.45% 3.62% 3.84% 4.06%
Total Interest-Bearing Liabilities 2.39% 2.47% 2.55% 2.74% 3.14%
Interest Rate Spread 2.82% 2.91% 2.96% 2.76% 2.49%
Net Interest Margin 3.10% 3.20% 3.27% 3.10% 2.87%
Ratio of Interest-Earning Assets to
Interest-Bearing Liabilities 1.13x 1.13x 1.13x 1.14x 1.14x
12