Exhibit 99.1
Harrington West Announces December 2006 Quarter and Full Year 2006 Earnings and
Declares a Regular Cash Dividend Per Share of 12.5 Cents
SOLVANG, Calif.--(BUSINESS WIRE)--Jan. 25, 2007--Harrington West
Financial Group, Inc. (Nasdaq: HWFG) today announced that it earned
$2.0 million or 35 cents per share on a fully diluted basis in the
December 2006 quarter and $8.2 million or $1.48 per diluted share for
the full year of 2006. These results compare to the $2.1 million or 36
cents per diluted share recorded in the December 2005 quarter and the
$8.3 million or $1.48 per diluted share for the full year of 2005.
Return on average equity was 12.9% in 2006 compared to 14.6% in 2005.
Book value per share was $12.40 at December 31, 2006, rising 12.1%
from $11.06 at December 2005, due to the additional mark-to-market
gains on LIBOR swap hedges net of available for sale investments,
which are recorded in the equity account. The Board of Directors today
declared a regular quarterly dividend per share of 12.5 cents payable
on February 15, 2007 to holders of record on February 5, 2007. The
repurchase program of up to 200,000 shares announced on May 3, 2005
remains in effect. No HWFG shares have been repurchased under this
program.
HWFG's net earnings have been affected by the strategic decision
to reduce the investment securities portfolio in 2006 by $77.6 million
to a $309.8 million balance at December 31, 2006 and to allow all of
HWFG's $129.0 million of total return mortgage and asset backed swaps
to mature in 2006. This reduction of earning investment assets was
undertaken for two reasons: (1) the net margins on these investments
had tightened to the extent that holding them did not present a
favorable risk return tradeoff, and (2) the reduction of these
investments allowed HWFG to substantially grow its diversified net
loan portfolio by $84.1 million or 12.5% in 2006 to $757.0 million,
thus deploying its equity capital in the community banking franchise.
The reduction in the net interest income from investments and the
positive carry on total return swaps was substantially offset by the
net interest income from the loan growth, resulting in nominal growth
in net interest income from 2005 to 2006. HWFG anticipates that
incremental net interest income from loan growth will exceed any
reduction in net interest income from the further reduction of
investments in 2007 if investment spreads remain tight. HWFG is
focused on further building a diversified loan portfolio, low and
non-costing deposits, and Harrington Wealth Management (HWM) and other
banking fees.
The highlights of the 2006 year and the December 2006 quarter are
as follows:
1. Net loan growth was $84.1 million or 12.5% in 2006 and $13.7
million or 1.8% in the December 2006 quarter, resulting in an ending
net loan balance of $757.0 million at December 31, 2006.
2. Deposit growth was $63.6 million or 9.5% in 2006 and $24.3
million or 3.4% in the December 2006 quarter, resulting in an ending
deposit balance of $732.8 million at December 31, 2006.
3. Non-interest bearing deposits grew 10.1% in 2006 from $49.9
million at December 31, 2005 to $55.0 million at December 31, 2006. On
an average balance basis, these deposits grew 17.0% to $48.7 in 2006
from $41.6 in 2005.
4. HWM assets under management grew 22.5% in 2006 to $175.3
million and trust fee income grew 17.1% to $848 thousand from $724
thousand in 2005. HWM reached profitability in 2006.
Financial Performance Analysis
HWFG seeks to grow a diversified loan portfolio and deposits at
high single to low double-digit rates through its controlled expansion
of banking operations in the markets of the Central Coast of
California, the Phoenix, Arizona metro, and the Kansas City metro.
HWFG also endeavors to maintain banking related risks (credit,
interest rate, operational) at a relatively low level. HWFG also seeks
to grow its HWM and other banking fees at double-digit rates. With the
controlled growth of operating expenses, HWFG can then improve
franchise value and core earnings performance.
In 2006, with the reduction of investment assets and the
offsetting growth in loans, net interest margin was 2.84% compared to
2.83% in 2005. Although the asset mix change contributed favorably to
net interest margin, deposit cost pressure (spread to LIBOR rates) and
some lag in the re-pricing of loans and securities (COFI, lagging
prime, one year adjustables) caused the net interest margin to be
relatively unchanged. In the December 2006 quarter, the net interest
margin was stable at 2.81% compared to the December 2005 quarter, but
down by 7 basis points from the September 2006 quarter. The reduction
in the linked quarters was due to the maturity of the remaining CMBS
total return swaps, loan portfolio growth closing near quarter-end,
and some year-end pricing pressure on deposit and borrowing costs. Net
interest income was $30.8 million in 2006 compared to $30.2 million in
2005 and was $7.6 million in December 2006 quarter, compared to $7.6
million in the December 2005 quarter.
Banking fee and other income was $4.1 million in 2006 versus $3.9
million in 2005, a 3.5% increase. For the December 2006 quarter,
banking fee and other income was $1.0 million compared to $931
thousand and $957 thousand in the September 2006 and December 2005
quarters, respectively. HWM fees, deposit related fees, and other
retail banking fees demonstrated strong growth in 2006, while
prepayment penalty fees were down $583 thousand in 2006 from 2005, as
refinancing activity waned. A summary of banking fee and other income
is shown in the following table:
Banking Fee & Other Income
(Dollars in thousands)
December December December December
2006 2005 % 2006 2005 %
Quarter Quarter Change YTD YTD Change
- ----------------------------------------------------------------------
Banking Fee
Type
Mortgage
Brokerage Fee,
Prepayment
Penalties &
Other Loan
Fees $276 $270 2.2% $826 $1,310 -36.9%
Deposit, Other
Retail Banking
Fees & Other
Fee Income 363 325 11.7% 1,666 1,293 28.8%
Harrington
Wealth
Management
Fees 230 188 22.3% 848 724 17.1%
BOLI Income,
net 178 174 2.3% 745 621 20.0%
-------- -------- --------- -------- -------- ---------
Total Banking
Fee & Other
Income $1,047 $957 9.4% $4,085 $3,948 3.5%
======== ======== ======== ========
As HWFG reduced the investment and total rate of return swap
portfolio in 2006, it realized net gains from sales and expiring total
rate of return swaps of $411 thousand in 2006 compared to $936
thousand in 2005. These gains emanate from the purchase of securities
and total rate of return swaps at relatively wide spread to LIBOR
based benchmarks, and as the spreads tighten, gains are realized.
Operating expenses were controlled in 2006, in light of the
expansion of banking operations in the year and the expensing of stock
options. Operating expenses were $22.2 million in 2006 compared to
$21.1 million in 2005, a 5.1% increase, including the opening and
ongoing expenses for a new Harrington banking office in the Kansas
City metro, and $447 thousand of stock option expense not incurred in
2005 due to implementing FAS 123R in 2006. For the December 2006
quarter, operating expenses were $5.7 million compared to $5.3 million
in the quarter a year ago, or a 6.1% increase.
HWFG's combined tax rate was 34.1% in 2006 and 32.2% in the
December 2006 quarter. HWFG benefited from a favorable tax ruling from
the Franchise Tax Board of California, confirming the apportionment of
income to states in which HWFG does business and from higher income
being reported in states with lower tax rates, a benefit of HWFG's
multiple market strategy. Tax exempt income from bank-owned life
insurance and tax advantaged loans also helped lower HWFG's combined
tax rate. In 2007, the combined tax rate is expected to normalize to
approximately 37%.
Community Banking Update
HWFG achieved loan and deposit growth in line with its goals for
2006. Further diversification of the loan portfolio was evident in
business and construction loans, and HWFG increased the level of
non-costing deposits in a very competitive deposit gathering
environment. The mix and growth of the loan portfolio is shown in the
following chart:
HWFG Net Loan Growth and Mix
(Dollars in millions)
December 31, September 30, December 31,
2006 2006 2005
- ------------------------ --------------- -------------- --------------
% of % of % of
Loan Type Total Total Total Total Total Total
Commercial Real Estate $264.9 34.6% $260.5 34.7% $253.2 37.2%
Multi-family Real Estate 79.9 10.4% 78.7 10.5% 80.9 11.9%
Construction (1) 112.6 14.7% 106.9 14.2% 70.9 10.4%
Single-family Real
Estate 106.7 13.9% 115.1 15.3% 115.9 17.0%
Commercial and
Industrial Loans 119.1 15.6% 112.1 14.9% 96.5 14.2%
Land Acquisition and
Development 54.7 7.1% 50.5 6.7% 36.1 5.3%
Consumer Loans 25.3 3.3% 25.7 3.4% 26.7 3.9%
Other Loans (2) 2.2 0.4% 2.2 0.3% 1.3 0.1%
-------- ------ -------------- ------- ------
Total Gross Loans $765.4 100.0% $751.7 100.0% $681.5 100.0%
Allowance for loan loss (5.9) (5.9) (5.7)
Deferred fees (2.1) (2.1) (2.5)
Discounts/Premiums (0.4) (0.4) (0.4)
-------- ------- -------
Net Loans Receivable $757.0 $743.3 $672.9
======== ======= =======
(1) Includes loans collateralized by residential, commercial and land
properties.
(2) Includes loans collateralized by deposits and consumer line of
credit loans.
HWFG's asset quality remained favorable with $98 thousand in
non-performing loans at December 31, 2006 compared to $101 thousand
and none at September 30, 2006 and December 31, 2005, respectively.
HWFG recognized a provision for loan losses of $75 thousand in the
December 2006 quarter and $565 thousand in 2006 to reflect the growth
and mix of loans in its portfolio. HWFG completed the sale of its real
estate owned on October 24, 2006 for approximately the net book value
of $1.1 million, resulting in a nominal loss of $8 thousand at
closing.
HWFG continued to grow deposits at a high single-digit pace in
2006 and core non-costing deposits at a double-digit annual rate. With
the steady rise in market interest rates and competition for insured
deposits, the spreads on certificates of deposits did increase to
LIBOR rates, somewhat affecting margins.
In 2006, HWFG opened its third Harrington banking office in the
Kansas City metro and its 16th in all markets. The Company has plans
to open three more banking offices in the Phoenix metro through 2008
to bring the offices in this market to five. An office in Surprise,
Arizona in the Northeast Valley is scheduled to commence construction
in March 2007 and be completed in the fall of 2007. A parcel in
Gilbert, Arizona in the Southeast Valley was acquired in December
2006, and a banking office is expected to be completed thereon in mid
2008. A banking office in North Phoenix in the Deer Valley Airpark
will likely be completed near the end of 2008 or early 2009.
Closing Comments
In commenting on the results for the December 2006 quarter, Craig
J. Cerny, Chairman and CEO of HWFG stated: "2006 can be characterized
as a year in which HWFG made steady progress in growing its core
franchise with 12.5% loan growth, 9.5% deposit growth, and 17.1% HWM
fee growth. Although our net earnings performance did not reflect this
growth in the core franchise due to the substantial reduction of
earning investment assets and total rate of return swaps, we believe
it was prudent to reduce these assets in the tight spread environment
and to conserve equity capital for growth in the banking franchise. In
2007, we are fully focused on our strategies to substantially grow low
and non-costing deposits, maintain our strong loan growth, further
increase banking fee and other income, while we seek to control
operating costs. We firmly believe these steps will lead to improved
core earnings and franchise value."
Harrington West Financial Group, Inc. is a $1.2 billion,
diversified, financial institution holding company for Los Padres Bank
and its division Harrington Bank. HWFG operates 16 full service
banking offices on the central coast of California, Scottsdale,
Arizona, and the Kansas City metro. The Company also owns Harrington
Wealth Management Company, a trust and investment management company
with $175.3 million in assets under management or custody.
This Release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act. All of the statements
contained in the Release, other than statements of historical fact,
should be considered forward-looking statements, including, but not
limited to, those concerning (i) the Company's strategies, objectives
and plans for expansion of its operations, products and services, and
growth of its portfolio of loans, investments and deposits, (ii) the
Company's beliefs and expectations regarding actions that may be taken
by regulatory authorities having oversight of the operation, (iii) the
Company's beliefs as to the adequacy of its existing and anticipated
allowances for loan and real estate losses, (iv) the Company's beliefs
and expectations concerning future operating results and (v) other
factors referenced in the Company's filings with the Securities and
Exchange Commission. Although the Company believes the expectations
reflected in those forward-looking statements are reasonable, it can
give no assurance that those expectations will prove to have been
correct. Investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof and
are not intended to give any assurance as to future results. The
Company undertakes no obligation to publicly release any revisions to
these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
Consolidated Financial Data - Harrington West Financial Group, Inc.
(unaudited)
Quarter ended Year-to-date
(In thousands, except Dec. 31, Dec. 31, Dec. 31, Dec. 31,
per share data) 2006 2005 2006 2005
- ------------------------ ---------------------- ----------------------
Interest income $19,250 $16,738 $74,095 $62,056
Interest expense 11,700 9,186 43,341 31,898
---------------------- ----------------------
Net interest income 7,550 7,552 30,754 30,158
Provision for loan
losses 75 85 565 435
---------------------- ----------------------
Net interest income
after provision for
loan losses 7,475 7,467 30,189 29,723
Non-interest income:
Gain/loss on sale of
AFS - 150 (613) 933
Income (loss) from
trading assets 42 (86) 1,024 3
Other gain (loss) (11) (2) (39) (15)
Banking fee & other
income 1,047 957 4,085 3,948
---------------------- ----------------------
Non-interest income 1,078 1,019 4,457 4,869
Non-interest expense 5,674 5,349 22,160 21,076
---------------------- ----------------------
Income before income
taxes 2,879 3,137 12,486 13,516
Provision for income
taxes 926 1,085 4,258 5,180
---------------------- ----------------------
Net income $1,953 $2,052 $8,228 $8,336
====================== ======================
Quarter ended Year-to-date
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
---------------------- ----------------------
Per share:
Net income - basic $0.36 $0.38 $1.51 $1.56
Net income - diluted $0.35 $0.36 $1.48 $1.48
Weighted average shares
used in Basic EPS
calculation 5,458,397 5,373,936 5,441,075 5,347,757
Weighted average shares
used in Diluted EPS
calculation 5,614,468 5,642,716 5,572,664 5,620,556
Cash dividends $0.13 $0.13 $0.50 $0.49
Book value at period-end $12.40 $11.06 $12.40 $11.06
Tangible Book Value at
period end $11.22 $9.82 $11.22 $9.82
Ending shares 5,460,393 5,384,843 5,460,393 5,384,843
Financial ratios
Return on average assets 0.68% 0.72% 0.72% 0.75%
Return on average equity 11.66% 13.76% 12.85% 14.61%
Average equity to
average assets
(leverage ratio) 5.81% 5.23% 5.62% 5.14%
Net interest margin 2.81% 2.81% 2.84% 2.83%
Efficiency ratio 66.00% 62.86% 63.61% 61.80%
Period averages
Total assets $1,143,344 $1,132,138 $1,139,400 $1,109,895
Securities and trading
assets $317,809 $400,823 $347,917 $408,753
Total loans, net of
allowance $748,376 $659,093 $715,520 $636,490
Total earning assets $1,092,419 $1,086,463 $1,090,084 $1,071,082
Total deposits $713,173 $672,020 $696,670 $636,695
Total equity $66,457 $59,181 $64,027 $57,076
Consolidated Financial Data - Harrington West Financial Group, Inc.
(unaudited)
Quarter Ended
-------------------------------------------------------
(In thousands,
except per
share data) Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2006 2006 2006 2006 2005
- ----------------------------------------------------------------------
Interest income $19,250 $18,978 $18,207 $17,664 $16,738
Interest
expense 11,700 11,275 10,510 9,858 9,186
-------------------------------------------------------
Net interest
income 7,550 7,703 7,697 7,806 7,552
Provision for
loan losses 75 200 150 140 85
-------------------------------------------------------
Net interest
income after
provision for
loan losses 7,475 7,503 7,547 7,666 7,467
Non-interest
income:
Gain/loss on
sale of AFS - - (147) (466) 150
Income (loss)
from trading
assets 42 150 113 721 (86)
Other gain
(loss) (11) (26) 2 (4) (2)
Banking fee &
other income 1,047 931 1,194 915 957
-------------------------------------------------------
Non-interest
income 1,078 1,055 1,162 1,166 1,019
Non-interest
expense 5,674 5,543 5,560 5,392 5,349
-------------------------------------------------------
Income before
income taxes 2,879 3,015 3,149 3,440 3,137
Provision for
income taxes 926 913 1,076 1,342 1,085
-------------------------------------------------------
Net income $1,953 $2,102 $2,073 $2,098 $2,052
=======================================================
Per share:
Net income -
basic $0.36 $0.39 $0.38 $0.39 $0.38
Net income -
diluted $0.35 $0.38 $0.37 $0.38 $0.36
Weighted
average shares
used in Basic
EPS
calculation 5,458,397 5,448,820 5,446,100 5,410,370 5,373,936
Weighted
average shares
used in
Diluted EPS
calculation 5,614,468 5,585,527 5,588,019 5,564,236 5,642,716
Cash dividends
per share $0.13 $0.13 $0.13 $0.13 $0.13
Book value at
period-end $12.40 $12.08 $11.87 $11.51 $11.06
Tangible Book
value at
period-end $11.22 $10.89 $10.67 $10.29 $9.82
Ending shares 5,460,393 5,449,593 5,447,643 5,418,843 5,384,843
Financial
ratios
Return on
average assets 0.68% 0.73% 0.73% 0.74% 0.72%
Return on
average equity 11.66% 12.81% 13.04% 14.02% 13.76%
Average equity
to average
assets
(leverage
ratio) 5.81% 5.73% 5.64% 5.29% 5.23%
Net interest
margin 2.81% 2.88% 2.85% 2.83% 2.81%
Efficiency
ratio 66.00% 64.20% 62.54% 61.83% 62.86%
Period averages
Total assets $1,143,344 $1,135,802 $1,131,525 $1,147,547 $1,132,138
Securities and
trading assets $317,809 $329,143 $357,127 $388,578 $400,823
Total loans,
net of
allowance $748,376 $730,840 $697,804 $684,183 $659,093
Total earning
assets $1,092,419 $1,085,258 $1,082,200 $1,100,599 $1,086,463
Total deposits $713,173 $704,644 $694,226 $674,124 $672,020
Total equity $66,457 $65,102 $63,781 $60,700 $59,181
Consolidated Financial Data - Harrington West Financial Group, Inc.
(unaudited)
Quarter Ended
-------------------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
(In thousands, 2006 2006 2006 2006 2005
except per
share data)
- ----------------------------------------------------------------------
Balance sheet
at period-end
Cash and due
from banks $21,178 $16,181 $16,508 $18,540 $19,312
Investments and
fed funds sold 310,635 321,512 327,329 367,127 388,407
Loans, before
allowance for
loan losses 762,947 749,144 721,790 689,668 678,551
Allowance for
loan losses (5,914) (5,845) (5,614) (5,800) (5,661)
Goodwill and
core deposit
intangibles 6,431 6,494 6,557 6,620 6,683
Other assets 59,196 58,715 58,983 57,898 52,895
-------------------------------------------------------
Total assets $1,154,473 $1,146,201 $1,125,553 $1,134,053 $1,140,187
=======================================================
Interest
bearing
deposits $677,767 $654,342 $663,168 $645,390 $619,213
Non-interest
bearing
deposits 54,990 54,117 47,954 51,373 49,932
Other
borrowings 347,915 364,662 343,856 369,908 403,787
Other
liabilities 6,103 7,225 5,898 5,024 7,681
Shareholders'
equity 67,698 65,855 64,677 62,358 59,574
-------------------------------------------------------
Total
liabilities
and
shareholders'
equity $1,154,473 $1,146,201 $1,125,553 $1,134,053 $1,140,187
=======================================================
Asset quality
and capital -
at period-end
Non-accrual
loans $- $- $- $- $-
Loans past due
90 days or
more 98 101 - 466 -
Other real
estate owned - 1,071 1,021 1,050 -
-------------------------------------------------------
Total non
performing
assets $98 $1,172 $1,021 $1,516 $-
=======================================================
Allowance for
losses to
loans 0.78% 0.78% 0.78% 0.84% 0.83%
Non-accrual
loans to total
loans 0.00% 0.00% 0.00% 0.00% 0.00%
Non-performing
assets total
assets 0.01% 0.10% 0.09% 0.13% 0.00%
Consolidated Financial Data - Harrington West Financial Group, Inc.
(unaudited)
Three months ended
(In thousands) December 31, 2006
----------------------------------
Balance Income Rate (6)
----------------------------------
Interest earning assets:
Loans receivable (1) $748,376 $14,708 7.85%
FHLB stock 14,557 219 5.97%
Securities and trading account
assets (2) 317,809 4,261 5.36%
Cash and cash equivalents (3) 11,677 62 2.11%
------------- ---------
Total interest earning assets 1,092,419 19,250 7.04%
---------
Non-interest-earning assets 50,925
-------------
Total assets $1,143,344
=============
Interest bearing liabilities:
Deposits:
NOW and money market accounts $96,621 $611 2.51%
Passbook accounts and
certificates of deposit 564,669 6,747 4.74%
------------- ---------
Total deposits 661,290 7,358 4.41%
FHLB advances (4) 267,565 3,326 4.93%
Reverse repurchase agreements 63,156 447 2.77%
Other borrowings (5) 25,774 569 8.64%
------------- ---------
Total interest-bearing
liabilities 1,017,785 11,700 4.54%
---------
Non-interest-bearing deposits 51,883
Non-interest-bearing liabilities 7,219
-------------
Total liabilities 1,076,887
Stockholders' equity 66,457
-------------
Total liabilities and stockholders'
equity $1,143,344
=============
Net interest-earning assets
(liabilities) $74,634
=============
Net interest income/interest rate
spread $7,550 2.50%
========= =========
Net interest margin 2.81%
=========
Ratio of average interest-earning
assets to average interest-bearing
liabilities 107.33%
=========
Three months ended
(In thousands) December 31, 2005
-------------------------------
Balance Income Rate (6)
-------------------------------
Interest earning assets:
Loans receivable (1) $659,093 $11,641 7.05%
FHLB stock 16,293 193 4.70%
Securities and trading account assets
(2) 400,823 4,856 4.85%
Cash and cash equivalents (3) 10,254 48 1.86%
----------- ---------
Total interest earning assets 1,086,463 16,738 6.15%
---------
Non-interest-earning assets 45,675
-----------
Total assets $1,132,138
===========
Interest bearing liabilities:
Deposits:
NOW and money market accounts $117,873 $562 1.89%
Passbook accounts and certificates
of deposit 504,099 4,291 3.38%
----------- ---------
Total deposits 621,972 4,853 3.10%
FHLB advances (4) 308,696 3,444 4.43%
Reverse repurchase agreements 59,064 447 2.96%
Other borrowings (5) 25,774 442 6.71%
----------- ---------
Total interest-bearing
liabilities 1,015,506 9,186 3.57%
---------
Non-interest-bearing deposits 50,048
Non-interest-bearing liabilities 7,403
-----------
Total liabilities 1,072,957
Stockholders' equity 59,181
-----------
Total liabilities and stockholders'
equity $1,132,138
===========
Net interest-earning assets
(liabilities) $70,957
===========
Net interest income/interest rate
spread $7,552 2.58%
========= =========
Net interest margin 2.81%
=========
Ratio of average interest-earning
assets to average interest-bearing
liabilities 106.99%
=========
1) Balance includes non-accrual loans. Income includes fees earned on
loans originated and accretion of deferred loan fees.
2) Consists of securities classified as available for sale, held to
maturity and trading account assets. Excludes SFAS 115
adjustments to fair value, which are included in other assets.
3) Consists of cash and due from banks and Federal funds sold.
4) Interest on FHLB advances is net of hedging costs. Hedging costs
include interest income and expense and ineffectiveness
adjustments for cash flow hedges. The Company uses pay-fixed,
receive floating LIBOR swaps to hedge the short term repricing
characteristics of the floating FHLB advances.
5) Consists of other debt and a note payable under a revolving line
of credit.
6) Annualized.
Consolidated Financial Data - Harrington West Financial Group, Inc.
(unaudited)
Twelve Months Ended
(In thousands) December 31, 2006
----------------------------------
Balance Income Rate
----------------------------------
Interest earning assets:
Loans receivable (1) $715,520 $54,963 7.68%
FHLB stock 15,395 826 5.37%
Securities and trading account
assets (2) 347,917 18,051 5.19%
Cash and cash equivalents (3) 11,252 255 2.27%
-------------- ---------
Total interest earning assets 1,090,084 74,095 6.80%
---------
Non-interest-earning assets 49,316
--------------
Total assets $1,139,400
==============
Interest bearing liabilities:
Deposits:
NOW and money market accounts $99,226 $2,214 2.23%
Passbook accounts and
certificates of deposit 548,784 23,376 4.26%
-------------- ---------
Total deposits 648,010 25,590 3.95%
FHLB advances (4) 286,452 13,912 4.86%
Reverse repurchase agreements 60,212 1,772 2.90%
Other borrowings (5) 25,774 2,067 7.91%
-------------- ---------
Total interest-bearing
liabilities 1,020,448 43,341 4.23%
---------
Non-interest-bearing deposits 48,660
Non-interest-bearing liabilities 6,265
--------------
Total liabilities 1,075,373
Stockholders' equity 64,027
--------------
Total liabilities and stockholders'
equity $1,139,400
==============
Net interest-earning assets
(liabilities) $69,636
==============
Net interest income/interest rate
spread $30,754 2.57%
========= =========
Net interest margin 2.84%
=========
Ratio of average interest-earning
assets to average interest-bearing
liabilities 106.82%
=========
Twelve Months Ended
(In thousands) December 31, 2005
----------------------------------
Balance Income Rate
----------------------------------
Interest earning assets:
Loans receivable (1) $636,490 $43,269 6.80%
FHLB stock 16,237 709 4.37%
Securities and trading account
assets (2) 408,753 17,914 4.38%
Cash and cash equivalents (3) 9,602 164 1.71%
------------ -----------
Total interest earning assets 1,071,082 62,056 5.79%
-----------
Non-interest-earning assets 38,813
------------
Total assets $1,109,895
============
Interest bearing liabilities:
Deposits:
NOW and money market accounts $119,742 $1,945 1.62%
Passbook accounts and
certificates of deposit 475,374 13,723 2.89%
------------ -----------
Total deposits 595,116 15,668 2.63%
FHLB advances (4) 314,066 12,732 4.05%
Reverse repurchase agreements 69,720 1,928 2.77%
Other borrowings (5) 25,774 1,570 6.09%
------------ -----------
Total interest-bearing
liabilities 1,004,676 31,898 3.16%
-----------
Non-interest-bearing deposits 41,579
Non-interest-bearing liabilities 6,564
------------
Total liabilities 1,052,819
Stockholders' equity 57,076
------------
Total liabilities and
stockholders' equity $1,109,895
============
Net interest-earning assets
(liabilities) $66,406
============
Net interest income/interest rate
spread $30,158 2.63%
=========== =========
Net interest margin 2.83%
=========
Ratio of average interest-earning
assets to average interest-
bearing liabilities 106.61%
=========
1) Balance includes non-accrual loans. Income includes fees earned on
loans originated and accretion of deferred loan fees.
2) Consists of securities classified as available for sale, held to
maturity and trading account assets. Excludes SFAS 115
adjustments to fair value, which are included in other assets.
3) Consists of cash and due from banks and Federal funds sold.
4) Interest on FHLB advances is net of hedging costs. Hedging costs
include interest income and expense and ineffectiveness
adjustments for cash flow hedges. The Company uses pay-fixed,
receive floating LIBOR swaps to hedge the short term repricing
characteristics of the floating FHLB advances.
5) Consists of other debt and a note payable under a revolving line
of credit.
CONTACT: Harrington West Financial Group, Inc.
Craig J. Cerny, 480/596-6555
or
For share transfer information contact:
Lisa F. Watkins 805/688-6644