Exhibit 99.1
San Joaquin Bancorp Continues Growth in the Third Quarter
BAKERSFIELD, Calif.--(BUSINESS WIRE)--Oct. 18, 2006--San Joaquin
Bancorp (OTCBB:SJQU), a bank holding company with $711 million in
assets, today announced financial results for the third quarter ended
September 30, 2006.
Net income after tax for the third quarter was $1.9 million, a 14%
increase from $1.7 million in net income reported for the third
quarter of 2005. Earnings per share for the third quarter of 2006 were
$0.52 per diluted share compared to $0.46 per diluted share reported
in the third quarter of 2005, which is an increase of 13%.
For the nine months ended September 30, 2006, net income after tax
was $6.7 million, an increase of 40% compared to $4.8 million in net
income reported for the same period in 2005. Earnings per share for
the period were $1.81 per diluted share compared to $1.31 per diluted
share reported through the third quarter of 2005, which is an increase
of 38%.
Bart Hill, President and CEO said, "San Joaquin Bank is having
another excellent year of earnings and asset growth. The bank also
continues to be a leader in market share gains for Kern County
commercial bank deposits. San Joaquin Bank has a market share of 10.5%
and is the fourth largest of 22 FDIC insured institutions in the
county."
Highlights for the Quarter Compared to Third Quarter 2005:
-- Net income - up 14% to $1.9 million
-- Loans, net of unearned fees - up 44% to $506 million
-- Deposits - up 6% to $575 million
-- Assets - up 20% to $711 million
Income Statement
Total interest income for the third quarter of 2006 was $12.2
million compared to $8.5 million reported in the same quarter 2005, an
increase of $3.7 million, or 44%. Strong loan demand and rising
interest rates were the primary driving factors while loan and
investment yields continue to improve. Average earning assets
increased from $525 million in the third quarter of 2005 to $636
million at the end of the third quarter of 2006 led by continued
strength in loan demand.
Interest expense for the third quarter of 2006 was $4.9 million
compared to $2.6 million for the third quarter of 2005. Interest rate
increases accounted for approximately 52% of the change; however,
growth in money market and non-core funding comprised the remainder.
Net interest margin increased in the comparative third quarters
from 4.48% in 2005 to 4.53% in 2006. The rise is the result of growth
in earning assets, primarily loans, which carry more favorable yields.
Improvement in investment yields also contributed.
Non-interest income was $725,000 for the third quarter of 2006
compared to $680,000 for the same period in 2005. The improvement was
due to an increase in other customer service fees. Fees from deposit
accounts were down $24,000 compared to the third quarter in 2005.
Non-interest expense was $3.8 million for the third quarter of
2006 compared to $3.3 million in the same period of 2005. Increases in
salaries and employee benefits, including normal adjustments and staff
additions, account for most of the change. The Company's efficiency
ratio improved on a year over year basis from 50.26% in the third
quarter 2005 to 48.08% in 2006, demonstrating increases in overall
operating efficiency as compared to the prior year.
In the third quarter of 2006, the provision for loan losses was
increased to $600,000 compared to $300,000 in 2005. The additional
provision was prompted by significant growth in the loan portfolio.
Allowance for loan loss adequacy is determined by the application of
various factors such as historical loss and industry default rates,
peer group comparisons, and loan quality classifications.
Annualized return on average assets decreased from 1.18% in the
third quarter 2005 compared to 1.11% for the same period in 2006.
Return on average equity decreased from 18.46% in 2005 to 17.01% in
2006 on an annualized basis. The decline is due primarily to
additional provision for loan losses.
Balance Sheet
Total loans, net of unearned fees, increased $155 million to $506
million, or 44%, compared to $351 million at the end of the third
quarter of 2005. The increase was primarily attributable to growth in
loans on existing commercial real estate and construction and land
development.
As of September 30, 2006, total deposits were $575 million as
compared to $543 million at September 30, 2005. The increase of $32
million, or 6%, was primarily due to growth in money market accounts.
Interest-bearing deposits increased by $36 million while
noninterest-bearing deposits declined by $4 million.
For the Bank, non-core funding consisting of time deposits of
$100,000 or more, Federal Home Loan Bank (FHLB) advances and other
borrowings, increased as strong loan demand outpaced deposit growth.
FHLB advances made up the majority of the increase. At September 30,
2006, non-core funds were $99 million compared to $26 million at
September 30, 2005. Non-core funding accounted for approximately 15%
of total funding at September 30, 2006.
Asset Quality
The Company had net recoveries of previously charged off loans of
$66,000 in the first nine months of 2006 compared to $277,000 net
charge-offs for the same period in 2005. The allowance for loan losses
was $8.2 million and $6.1 million or 1.62% and 1.74% of loans at
September 30, 2006 and 2005, respectively.
Nonperforming and restructured loans were $330,000 at September
30, 2006, compared to $3.4 million at September 30, 2005. The
percentage of nonperforming and restructured loans to total loans, net
of unearned income, was .07% at the end of the third quarter of 2006
compared to .97% at the end of the third quarter in 2005.
Total nonperforming and restructured assets were $1.0 million at
September 30, 2006, compared to $4 million at September 30, 2005.
Nonperforming and restructured assets as a percentage of total assets
were 0.14% and 0.67% at the third quarter of 2006 and 2005,
respectively.
San Joaquin Bancorp, (the "Company"), assesses and manages credit
risk on an ongoing basis through a formal credit review program and
approval policies, internal monitoring and formal lending policies of
its bank subsidiary, San Joaquin Bank. The Company believes that the
Bank's ability to identify and assess risk and return characteristics
of the loan portfolio is critical for profitability and growth of the
consolidated group. The Company, through the Bank, emphasizes credit
quality in the loan approval process, active credit administration and
regular monitoring. The Bank has designed and implemented a
comprehensive loan review and grading system that functions to monitor
and assess the credit risk inherent in the loan portfolio.
Capital
Total shareholders' equity at September 30, 2006 was $46 million
compared to $37 million at September 30, 2005. Capital ratios for the
Company continue to remain above the well-capitalized guidelines
established by bank regulatory agencies.
Additional Information
On September 1, 2006, the Company issued $10 million in trust
preferred securities. The Company made a capital injection into San
Joaquin Bank on September 12, 2006 in the amount of $9.7 million. The
injection was recorded as capital surplus by the Bank. The trust
preferred securities, in the form of a junior subordinated note,
qualify as Tier I Capital under regulatory guidelines.
San Joaquin Bancorp is a bank holding company subject to the
regulatory oversight of the Federal Reserve System. San Joaquin Bank
is a state-chartered bank wholly-owned by San Joaquin Bancorp. It was
established in 1980 and is headquartered in Bakersfield, California.
San Joaquin Bank is a full-service, community bank with three banking
offices in Bakersfield and one in Delano. San Joaquin Bank emphasizes
professional, personal banking service directed primarily to small and
medium-sized businesses and professionals. The Bank also provides a
full range of banking services that are available to individuals,
public entities, and non-profit organizations.
On October 12, 2006, San Joaquin Bank became a member of the
Federal Reserve System. As a member bank, the Federal Reserve Bank of
San Francisco will assume federal regulatory oversight of the Bank.
FORWARD-LOOKING INFORMATION:
The following appears in accordance with the Private Securities
Litigation Reform Act of 1995:
This press release contains forward-looking statements about San
Joaquin Bancorp for which it claims the protection of the safe harbor
provisions contained in the Private Securities Litigation Reform Act
of 1995, including statements with regard to descriptions of our plans
or objectives for future operations, products or services, and
forecasts of our revenues, earnings or other measures of economic
performance. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. They
often include the words "believe," "expect," "anticipate," "intend,"
"plan," "estimate," or words of similar meaning, or future or
conditional verbs such as "will," "would," "should," "could," or
"may."
Forward-looking statements, by their nature, are subject to risks
and uncertainties. A number of factors -- many of which are beyond our
control -- could cause actual conditions, events or results to differ
significantly from those described in the forward-looking statements
and reported results should not be considered an indication of our
future performance. Some of these risk factors include, among others,
certain credit, market, operational and liquidity risks associated
with our business and operations, changes in business and economic
conditions in California and nationally, rising interest rates,
potential acts of terrorism (which are beyond our control), volatility
of rate sensitive deposits and assets, value of real estate collateral
securing many of our loans, accounting estimates and judgments,
compliance costs associated with the company's internal control
structure and procedures for financial reporting. These risk factors
are not exhaustive and additional factors that could have an adverse
effect on our business and financial performance are set forth under
"Risk Factors" and elsewhere in this quarterly report and in our
annual report on Form 10-K for the year ended December 31, 2005.
Forward-looking statements speak only as of the date they are
made. We do not undertake to update forward-looking statements to
reflect circumstances or events that occur after the date
forward-looking statements are made.
San Joaquin Bancorp and Subsidiaries
Consolidated Balance Sheet (unaudited)
As of September 30
2006 2005
- ----------------------------------------------------------------------
ASSETS
Cash and due from banks $30,416,000 $31,948,000
Interest-bearing deposits in banks 2,037,000 1,594,000
Federal funds sold - 6,700,000
------------- -------------
Total cash and cash equivalents 32,453,000 40,242,000
Investment securities:
Held to maturity 141,914,000 177,398,000
Available for sale 7,001,000 2,479,000
------------- -------------
Total Investment Securities 148,915,000 179,877,000
Loans, net of unearned income 505,546,000 350,777,000
Less: allowance for loan losses (8,199,000) (6,110,000)
------------- -------------
Net Loans 497,347,000 344,667,000
Premises and equipment 7,707,000 7,617,000
Investment in real estate 659,000 584,000
Interest receivable and other assets 23,785,000 19,836,000
------------- -------------
TOTAL ASSETS $710,866,000 $592,823,000
============= =============
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LIABILITIES
Deposits:
Noninterest-bearing $172,117,000 $175,894,000
Interest-bearing deposits 403,325,000 366,962,000
------------- -------------
Total Deposits 575,442,000 542,856,000
Short-term borrowings 65,600,000 -
Accrued interest payable and other
liabilities 7,108,000 5,770,000
Long-term debt 17,100,000 6,800,000
------------- -------------
Total Liabilities 665,250,000 555,426,000
------------- -------------
SHAREHOLDERS' EQUITY
Common stock, no par value - 10,000,000
shares authorized; 3,479,722 and 3,435,896
issued and outstanding at September 30,
2006 and 2005, respectively 10,308,000 9,970,000
Additional paid-in capital 104,000 -
Retained earnings 35,321,000 27,560,000
Accumulated other comprehensive income
(loss) (117,000) (133,000)
------------- -------------
Total Shareholders' Equity 45,616,000 37,397,000
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $710,866,000 $592,823,000
============= =============
San Joaquin Bancorp and Subsidiaries
Consolidated Statement of Income (unaudited)
Three Months ended Sept 30 Nine Months ended Sept 30
-------------------------- -------------------------
2006 2005 2006 2005
-------------- ----------- ------------ ------------
INTEREST INCOME
Loans (including
fees) $10,558,000 $6,859,000 $28,742,000 $18,696,000
Investment
securities 1,610,000 1,427,000 4,859,000 3,649,000
Fed funds & other
interest-bearing
balances 22,000 202,000 365,000 493,000
-------------- ----------- ------------ ------------
Total Interest
Income 12,190,000 8,488,000 33,966,000 22,838,000
-------------- ----------- ------------ ------------
INTEREST EXPENSE
Deposits 4,212,000 2,456,000 11,165,000 5,716,000
Short-term
borrowings 526,000 - 805,000 35,000
Long-term
borrowings 189,000 99,000 421,000 272,000
-------------- ----------- ------------ ------------
Total Interest
Expense 4,927,000 2,555,000 12,391,000 6,023,000
-------------- ----------- ------------ ------------
Net Interest
Income 7,263,000 5,933,000 21,575,000 16,815,000
Provision for loan
losses 600,000 300,000 1,130,000 900,000
-------------- ----------- ------------ ------------
Net Interest
Income After Loan
Loss Provision 6,663,000 5,633,000 20,445,000 15,915,000
-------------- ----------- ------------ ------------
NONINTEREST INCOME
Service charges &
fees on deposits 200,000 224,000 591,000 682,000
Other customer
service fees 317,000 214,000 949,000 846,000
Other 208,000 242,000 694,000 519,000
-------------- ----------- ------------ ------------
Total
Noninterest
Income 725,000 680,000 2,234,000 2,047,000
-------------- ----------- ------------ ------------
NONINTEREST
EXPENSE
Salaries and
employee
benefits 2,445,000 1,981,000 7,008,000 5,711,000
Occupancy 245,000 283,000 681,000 655,000
Furniture &
equipment 257,000 171,000 780,000 799,000
Promotional 131,000 126,000 433,000 428,000
Professional 305,000 145,000 885,000 725,000
Other 458,000 618,000 1,405,000 1,453,000
-------------- ----------- ------------ ------------
Total
Noninterest
Expense 3,841,000 3,324,000 11,192,000 9,771,000
-------------- ----------- ------------ ------------
Income Before
Taxes 3,547,000 2,989,000 11,487,000 8,191,000
Income Taxes 1,625,000 1,298,000 4,777,000 3,403,000
-------------- ----------- ------------ ------------
NET INCOME $1,922,000 $1,691,000 $6,710,000 $4,788,000
============== =========== ============ ============
Basic Earnings per
Share $0.55 $0.49 $1.93 $1.40
============== =========== ============ ============
Diluted Earnings
per Share $0.52 $0.46 $1.81 $1.31
============== =========== ============ ============
Financial Highlights - September 30, 2006
- ----------------------------------------------------------------------
(data in thousands except per share
data) ---First 9 Months--- % Variance
--------------------
(unaudited) 2006 2005 2006 vs. 2005
---------- --------- -------------
Net Interest Income $21,575 $16,815 28.3%
Non Interest Income $2,234 $2,047 9.1%
Addition to Provision for Loan
Losses $1,130 $900 25.6%
Net Income $6,710 $4,788 40.1%
Total Assets $710,866 $592,823 19.9%
Total Net Loans $497,347 $344,667 44.3%
Total Deposits $575,442 $542,856 6.0%
Total Shareholders' Equity $45,616 $37,397 22.0%
Basic Earnings per Share $1.93 $1.40 37.9%
Diluted Earnings per Share $1.81 $1.31 38.2%
Book Value per Share $13.11 $10.88 20.5%
Key Ratios:
Annualized Return on Average Equity 21.11% 18.16% 16.2%
Annualized Return on Average Assets 1.35% 1.17% 15.0%
Annualized Net Interest Margin 4.68% 4.53% 3.3%
Efficiency Ratio 47.01% 51.80% -9.3%
CONTACT: San Joaquin Bancorp
Bart Hill, President
661-281-0300
Stephen M. Annis, Executive Vice President & CFO
661-281-0360
www.sjbank.com