CHATTANOOGA, Tenn., Jan. 24, 2008 (PRIME NEWSWIRE) -- First Security Group, Inc. (Nasdaq:FSGI), a community bank holding company serving middle and east Tennessee and north Georgia, today reported fiscal year 2007 net income of $11.4 million, an increase of 2.2 percent from the $11.1 million reported for fiscal year 2006. Earnings per diluted share were $0.66, compared with $0.63 reported for fiscal year 2006, an increase of 4.8 percent.
For the fourth quarter of 2007, First Security reported net income of $3.1 million, an increase of 6.0 percent from the $2.9 million reported for the fourth quarter of 2006. Earnings per diluted share were $0.18, up 5.9 percent from the $0.17 reported for the 2006 fourth quarter. Compared with the third quarter of 2007, net income increased 2.3 percent.
Highlights of 2007 and the fourth quarter include:
* Loans grew $105.5 million, or 12.4 percent, to $953.1 million
at December 31, 2007 over year-end 2006. Fourth quarter loans
grew $13.1 million, or 1.4 percent (5.6 percent annualized)
compared with linked quarter. Year-over-year growth was led
by construction and development (C&D), up $42.9 million or
24.7 percent, and commercial real estate (CRE), up $45.2 or
26.0 percent. CRE loans accounted for the majority of the
growth in the fourth quarter.
* Noninterest income was $11.3 million for 2007 compared with
$10.6 million for 2006. Fourth quarter noninterest income
rose 21.9 percent and 7.9 percent, respectively, from the
prior year and linked quarters. Noninterest income accounted
for 18.8 percent of 2007 revenue compared with 18.1 percent
of 2006 revenue.
* First Security continued to improve its operating efficiencies
throughout 2007, with the core efficiency ratio improving
to 64.05 percent compared with 64.27 percent for fiscal
year 2006.
* Asset quality remained sound. Nonperforming assets plus
delinquencies totaled $9.9 million, or 0.82 percent of
assets at December 31, 2007 compared with $7.4 million or
0.62 percent of total assets at September 30, 2007 and $8.2
million, or 0.72 percent of total assets, at December 31,
2006. Net charge-offs for the year were $1.1 million, or 0.12
percent of average loans, a 16 basis point improvement over
2006.
Rodger B. Holley, Chairman and CEO of First Security Group, Inc., commented on the year: "In this challenging environment, First Security is more than holding its own. For fiscal year and fourth quarter 2007, we reported earnings growth year-over-year, quarter-over-quarter, and even from the linked quarter. Our improvement has been steady and stable. In this market, we believe that consistency is king. We have had no surprises on our balance sheet: no subprime exposure, no impairment of our mortgage-backed securities, and we hold no preferred stock of Fannie Mae or Freddie Mac that might require a write-down. We plan to continue with the same strategy we have used in the past - namely, leveraging our hometown advantage to build quality relationships, maintaining a diversified revenue stream, and focusing on improving operating efficiency. This strategy served us well in 2007 and we believe that it will continue to do so in 2008."
Total revenue, comprised of net interest income and noninterest income, was $60.2 million for 2007, an increase of $1.6 million, or 2.8 percent, over 2006. Net interest income was $48.9 million, a 2.0 percent increase over the prior fiscal year. Results reflect an 8.3 percent increase in average earning assets to $1.0 billion, partially offset by a 30 basis point, or 5.9 percent, decline in the net interest margin, to 4.79 percent. Mr. Holley added, "The decline in our net interest margin reflects the 100 basis point decline in the prime rate during the third and fourth quarters of 2007. Our balance sheet is asset-sensitive, so our loans reprice more quickly than our deposits, causing compression until the Federal Reserve stabilizes the overnight fed funds rate."
For the fourth quarter of 2007, total revenue was $15.6 million, an increase of $1.0 million, or 6.9 percent, over the fourth quarter of 2006. Net interest income was $12.3 million, a 3.4 percent increase over the prior year period. While average earning assets increased 8.4 percent to $1.1 million from the fourth quarter of 2006, the impact of this increase was partially offset by the net interest margin declining to 4.61 percent in the fourth quarter of 2007, a 23 basis point decline compared with the same quarter in 2006. Compared to the linked quarter, the net interest margin declined 19 basis points in the fourth quarter.
Noninterest income continues to increase as a component of First Security's revenue stream. For the 2007 fiscal year, noninterest income was $11.3 million, up $683 thousand or 6.4 percent from the fiscal year 2006. Growth in 2007 noninterest income reflected moderate to strong growth in almost all of First Security's fee-based businesses, including deposit fees, trust fees and mortgage loan fees.
For the fourth quarter of 2007, noninterest income was $3.3 million compared with $3.1 million for the linked quarter, and $2.7 million for the prior-year fourth quarter. Fourth quarter 2007 noninterest income rose 7.9 percent from the linked quarter; compared with the prior year fourth quarter, noninterest income rose 21.9 percent.
Noninterest expenses for 2007 were $41.4 million, an increase of $1.4 million, or 3.6 percent from 2006. Year-over-year, salaries and benefits expense increased $728 thousand, or 3.3 percent, accounting for approximately half of the $1.4 million increase; over the last twelve months, the average number of full-time equivalent (FTE) employees increased by twelve, or 3.3 percent, to 372; First Security ended 2007 with 371 FTE's. Other expenses increasing on a year-over-year basis include write-downs, losses and expenses on foreclosed real estate and repossessed assets, as well as higher FDIC insurance premium assessments and occupancy expense.
For the fourth quarter of 2007, noninterest expense was $10.5 million compared with $10.6 million for the linked quarter, and $9.9 million for the year-earlier quarter. The decrease from the third quarter to the fourth quarter reflects lower salaries and benefits, lower professional fees and lower equipment expense, which were partially offset by additional write-downs and losses on foreclosed real estate and repossessed assets.
First Security's revenue growth has exceeded increases in expenses, resulting in improvement in the Company's operating efficiency. For 2007, the core efficiency ratio was 64.05 percent, compared with 64.27 percent for 2006.
Total assets were $1.2 billion at December 31, 2007, an increase of $82.2 million, or 7.3 percent, from 12 months prior. Loans grew $105.5 million, or 12.4 percent, to $953.1 million; fourth quarter loan growth was $13.1 million, or 1.4 percent (5.5 percent annualized). Year-over-year loan growth was balanced among the sectors that First Security serves, preserving its highly diversified portfolio. Year-over-year growth was led by C&D, up $42.9 million or 24.7 percent, and CRE, up $45.2 or 26.0 percent.
The majority of the growth in the fourth quarter was in CRE loans, up $11.3 million or 5.5 percent (21.9 percent annualized) from the linked quarter; in total, CRE loans accounted for 86.7 percent of the $13.1 million of linked quarter loan growth. At period end, residential real estate loans remained the largest component of the loan portfolio, accounting for 27.5 percent of loans, followed by C&D (22.7 percent), CRE (23.0 percent), and commercial and industrial loans (14.5 percent).
"Overall, our asset quality remains sound," Mr. Holley commented. "Net charge-offs have improved from last year and our nonperforming assets remain in line with portfolio growth, and in line with our prior experience." Twelve month 2007 charge-offs were $1.1 million or 0.12 percent of average loans, compared with $2.2 million or 0.28 percent of average loans for 2006. Net charge-offs for the fourth quarter of 2007 were $419 thousand, or 0.18 percent of average loans on an annualized basis.
Nonperforming assets plus 90-day delinquent loans rose $1.8 million year-over-year, and $2.5 million from the linked quarter, to $9.9 million or 0.82 percent at December 31, 2007. Nonperforming and delinquent loans jumped $3.4 million from the linked quarter to $5.7 million at year-end. The majority of the increases are real estate-related loans. Other real estate and repossessed assets decreased on a linked quarter basis. Loan loss reserves were 1.15 percent of total loans at December 31, 2007, up from 1.13 percent at the end of the linked quarter.
Mr. Holley concluded, "We ended a record year with three consecutive quarters of increased earnings. With our excellent staff, our strong capital position and our well diversified loan portfolio, we are positioned for quality performance into the New Year."
Web Cast and Conference Call Information
First Security's executive management team will host a conference call and simultaneous web cast on Thursday, January 24 at 3:00 PM Eastern Time to discuss fourth quarter and annual results. The web cast can be accessed live on the First Security's website, www.FSGBank.com, on the Corporate Information/Investor Relations page. A replay will be available approximately two hours after the live conference call ends, and will be archived on the First Security's website for one month.
About First Security Group, Inc.
First Security Group, Inc. is a bank holding company headquartered in Chattanooga, Tennessee with $1.2 billion in assets. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A. has 40 full-service banking offices along the interstate corridors of middle and east Tennessee and north Georgia. In Dalton, Georgia, FSGBank operates six full-service banking offices under the name of Dalton Whitfield Bank and two offices under the name Primer Banco Seguro (PBS); PBS serves the region's rapidly growing Latino population. FSGBank also operates six branches under the name of Jackson Bank & Trust along the I-40 corridor. FSGBank provides retail and commercial banking services, trust and investment management, mortgage banking, financial planning, Internet banking (www.FSGBank.com) and equipment leasing through its wholly-owned subsidiaries, Kenesaw Leasing, Inc. and J & S Leasing, Inc.
The First Security Group, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=1833
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America (GAAP). First Security's management uses these "non-GAAP" measures in their analysis of First Security's performance. Non-GAAP measures typically adjust GAAP performance measures to exclude the effects of charges, expenses and gains related to the consummation of mergers and acquisitions, and costs related to the integration of merged entities. These non-GAAP measures may also exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Since these items and their impact on First Security's performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of First Security's core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Forward-Looking Statements
This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by First Security with the Securities and Exchange Commission. First Security undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
First Security Group, Inc. and Subsidiary
Consolidated Balance Sheets
Dec. 31, Dec. 31,
(in thousands, except share data) 2007 2006
---------------------------------------------------------------------
(unaudited)
ASSETS
Cash & Due from Banks $ 27,394 $ 26,512
Federal Funds Sold and Securities
Purchased under Agreements to
Resell -- 1,600
------------ -----------
Cash and Cash Equivalents 27,394 28,112
------------ -----------
Interest-Bearing Deposits in Bank 296 481
------------ -----------
Securities Available-for-Sale 131,849 153,759
------------ -----------
Loans Held for Sale 4,396 7,524
Loans 948,709 840,069
------------ -----------
Total Loans 953,105 847,593
Less: Allowance for Loan and Lease
Losses 10,956 9,970
------------ -----------
942,149 837,623
------------ -----------
Premises and Equipment, net 34,751 35,835
------------ -----------
Goodwill 27,156 27,156
------------ -----------
Intangible Assets 3,200 4,185
------------ -----------
Other Assets 45,160 42,652
------------ -----------
TOTAL ASSETS $ 1,211,955 $ 1,129,803
============ ===========
LIABILITIES
Deposits
Noninterest Bearing Demand $ 159,790 $ 168,654
Interest Bearing Demand 62,637 66,787
------------ -----------
222,427 235,441
------------ -----------
Savings and Money Market Accounts 131,352 135,784
------------ -----------
Time Deposits:
Certificates of Deposit of $100
thousand or more 225,491 205,428
Certificates of Deposit of less
than $100 thousand 259,628 258,456
Brokered Certificates of Deposit 63,731 86,892
------------ -----------
548,850 550,776
------------ -----------
Total Deposits 902,629 922,001
Federal Funds Purchased and
Securities Sold under Agreements
to Repurchase 62,286 20,851
Security Deposits 2,799 3,920
Other Borrowings 80,459 24,838
Other Liabilities 16,089 13,405
------------ -----------
Total Liabilities 1,064,262 985,015
------------ -----------
STOCKHOLDERS' EQUITY
Common stock - $.01 par value
50,000,000 shares authorized
as of December 31, 2007 and
December 31, 2006; 16,774,728
issued as of December 31, 2007;
17,762,278 issued as of
December 31, 2006; 116 123
Paid-In Surplus 114,631 124,293
Unallocated ESOP Shares (4,310) (5,094)
Retained Earnings 34,279 26,337
Accumulated Other Comprehensive
Gain /(Loss) 2,977 (871)
------------ -----------
Total Stockholders' Equity 147,693 144,788
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,211,955 $ 1,129,803
============ ===========
First Security Group, Inc. and Subsidiary
Consolidated Statements of Income
(in thousands except per share amounts)
Three Months Ended Year-to-Date
December 31, December 31,
2007 2006 2007 2006
---------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
INTEREST INCOME
Loans, including
fees $ 19,737 $ 17,970 $ 77,288 $ 67,972
Debt Securities -
taxable 1,076 1,333 4,473 5,253
Debt Securities -
non-taxable 410 430 1,628 1,596
Other 32 48 134 306
-------- -------- -------- --------
Total Interest
Income 21,255 19,781 83,523 75,127
-------- -------- -------- --------
INTEREST EXPENSE
Interest Bearing
Demand Deposits 121 125 536 589
Savings Deposits
and Money
Market Accounts 805 750 3,168 2,861
Certificates of
Deposit of $100
thousand or more 2,861 2,508 11,147 8,378
Certificates of
Deposit of less
than $100 thousand 3,256 3,039 13,021 10,417
Brokered
Certificates
of Deposit 915 959 3,711 3,649
Other 996 508 3,018 1,251
-------- -------- -------- --------
Total Interest
Expense 8,954 7,889 34,601 27,145
-------- -------- -------- --------
NET INTEREST INCOME 12,301 11,892 48,922 47,982
Provision for Loan
and Lease Losses 746 441 2,155 2,184
-------- -------- -------- --------
NET INTEREST INCOME
AFTER PROVISION
FOR LOAN AND LEASE
LOSSES 11,555 11,451 46,767 45,798
-------- -------- -------- --------
NONINTEREST INCOME
Service Charges on
Deposit Accounts 1,387 1,249 5,199 4,843
Loss on Sales of
Available-for-
Sale Securities,
net -- (197) (168) (197)
Other-than-
Temporary
Impairment of
Securities -- -- (584) --
Other 1,951 1,687 6,853 5,971
-------- -------- -------- --------
Total Noninterest
Income 3,338 2,739 11,300 10,617
-------- -------- -------- --------
NONINTEREST EXPENSE
Salaries and
Employee Benefits 5,261 5,339 22,836 22,108
Expense on
Premises
and Fixed Assets,
net of rental
income 1,712 1,568 6,807 6,613
Other 3,501 2,964 11,798 11,296
-------- -------- -------- --------
Total Noninterest
Expense 10,474 9,871 41,441 40,017
-------- -------- --------- -------
INCOME BEFORE
INCOME TAX
PROVISION 4,419 4,319 16,626 16,398
Income Tax
Provision 1,327 1,403 5,270 5,286
-------- -------- -------- --------
NET INCOME 3,092 2,916 11,356 11,112
======== ======== ======== ========
NET INCOME PER
SHARE:
Net Income Per
Share - basic $ 0.19 $ 0.17 $ 0.67 $ 0.64
Net Income Per
Share - diluted $ 0.18 $ 0.17 $ 0.66 $ 0.63
Dividends Declared
Per Common Share $ 0.05 $ 0.05 $ 0.20 $ 0.13
First Security Group, Inc. and Subsidiary
Consolidated Financial Highlights
(unaudited)
(in thousands, except per share amounts and
full-time equivalent employees)
4th 3rd 2nd 1st 4th
Quarter Quarter Quarter Quarter Quarter
2007 2007 2007(3) 2007(3) 2006
---------- ---------- ---------- ---------- ----------
Earnings:
Net interest
income $ 12,301 $ 12,526 $ 12,236 $ 11,859 $ 11,892
Provision
for loan
and lease
losses $ 746 $ 576 $ 416 $ 417 $ 441
Non-
interest
income $ 3,338 $ 3,094 $ 2,654 $ 2,214 $ 2,739
Non-
interest
expense $ 10,474 $ 10,556 $ 10,213 $ 10,198 $ 9,871
Net income $ 3,092 $ 3,022 $ 2,888 $ 2,354 $ 2,916
Earnings -
Normalized
Non-
interest
operating
income(1) $ 3,338 $ 3,094 $ 2,654 $ 2,214 $ 2,739
Non-
interest
operating
expense
(1) $ 10,474 $ 10,556 $ 10,213 $ 10,198 $ 9,807
Net
operating
income,
net of
tax(1) $ 3,092 $ 3,022 $ 2,888 $ 2,354 $ 2,960
Per Share
Data:
Net income,
basic $ 0.19 $ 0.18 $ 0.17 $ 0.14 $ 0.17
Net income,
diluted $ 0.18 $ 0.18 $ 0.17 $ 0.13 $ 0.17
Cash
dividends
declared $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05
Book value $ 8.80 $ 8.59 $ 8.28 $ 8.28 $ 8.15
Tangible
book
value $ 6.99 $ 6.82 $ 6.52 $ 6.52 $ 6.39
Per Share
Data
- Normalized:
Net
operating
income,
basic(1) $ 0.19 $ 0.18 $ 0.17 $ 0.14 $ 0.17
Net
operating
income,
diluted
(1) $ 0.18 $ 0.18 $ 0.17 $ 0.13 $ 0.17
Performance
Ratios:
Return on
average
assets 1.03% 1.03% 1.01% 0.83% 1.04%
Return on
average
equity 8.37% 8.27% 7.89% 6.46% 8.15%
Return on
average
tangible
assets 1.05% 1.05% 1.04% 0.85% 1.07%
Return on
average
tangible
equity 10.54% 10.48% 10.01% 8.22% 10.44%
Net
interest
margin,
taxable
equivalent 4.61% 4.80% 4.91% 4.86% 4.84%
Efficiency
ratio 66.97% 67.58% 68.59% 72.47% 67.47%
Non-interest
income
to net
interest
income
and non-
interest
income 21.34% 19.81% 17.82% 15.73% 18.72%
Performance
Ratios -
Normalized:
Operating
return on
average
assets(1) 1.03% 1.03% 1.01% 0.83% 1.06%
Operating
return on
average
equity(1) 8.37% 8.27% 7.89% 6.46% 8.27%
Operating
return on
average
tangible
assets(1) 1.05% 1.05% 1.04% 0.85% 1.09%
Operating
return on
average
tangible
equity(1) 10.54% 10.48% 10.01% 8.22% 10.60%
Core
efficiency
ratio(2) 60.55% 64.68% 64.95% 66.12% 62.46%
Capital &
Liquidity:
Total
equity
to total
assets 12.19% 12.38% 12.51% 12.76% 12.82%
Tangible
equity to
tangible
assets 9.93% 10.08% 10.12% 10.33% 10.33%
Total
loans
to total
deposits 105.59% 99.90% 98.22% 93.27% 91.93%
Asset
Quality:
Net charge
-offs $ 419 $ 298 $ 201 $ 211 $ 303
Net loans
charged-
off to
average
loans,
annualized 0.18% 0.13% 0.09% 0.10% 0.15%
Non-accrual
loans $ 3,372 $ 1,687 $ 938 $ 1,755 $ 2,653
Other real
estate
owned $ 2,452 $ 2,646 $ 2,014 $ 2,796 $ 1,982
Repossessed
assets $ 1,834 $ 2,489 $ 1,707 $ 1,734 $ 2,231
Non-
performing
assets
(NPA) $ 7,658 $ 6,822 $ 4,659 $ 6,285 $ 6,866
NPA to
total
assets 0.63% 0.57% 0.40% 0.55% 0.61%
Loans 90
days
past due $ 2,289 $ 585 $ 1,639 $ 1,640 $ 1,325
NPA +
loans 90
days past
due to
total
assets 0.82% 0.62% 0.54% 0.69% 0.72%
Allowance
for loan
losses to
total loans 1.15% 1.13% 1.14% 1.18% 1.18%
Allowance
for loan
losses
to NPA 143.07% 155.89% 222.43% 161.56% 145.21%
Period
End
Balances:
Loans $ 953,105 $ 940,025 $ 909,177 $ 863,940 $ 847,593
Intangible
assets $ 30,356 $ 30,579 $ 30,822 $ 31,077 $ 31,341
Assets $1,211,955 $1,198,465 $1,157,919 $1,147,777 $1,129,803
Deposits $ 902,629 $ 940,988 $ 925,628 $ 926,313 $ 922,001
Stockholders'
equity $ 147,693 $ 148,318 $ 144,894 $ 146,399 $ 144,788
Common
stock
market
capital-
ization $ 150,640 $ 172,750 $ 188,978 $ 201,176 $ 204,796
Full-time
equivalent
employees 371 373 375 369 369
Shares
outstanding 16,775 17,275 17,498 17,678 17,762
Average
Balances:
Loans $ 950,640 $ 926,216 $ 884,383 $ 855,569 $ 834,494
Intangible
assets $ 30,475 $ 30,708 $ 30,958 $ 31,220 $ 31,482
Earning
assets $1,080,278 $1,053,908 $1,018,666 $1,010,315 $ 996,189
Assets $1,204,038 $1,178,298 $1,141,946 $1,137,915 $1,120,233
Deposits $ 926,149 $ 934,034 $ 917,215 $ 920,718 $ 907,284
Stockholders'
equity $ 147,832 $ 146,101 $ 146,412 $ 145,778 $ 143,161
Shares
outstanding,
basic - wtd 16,585 16,901 17,117 17,241 17,216
Shares
outstanding,
diluted -
wtd 16,849 17,223 17,482 17,641 17,600
YTD YTD
Dec. 31, Dec. 31,
2007 2006
---------- ----------
Earnings:
Net interest income $ 48,922 $ 47,982
Provision for loan and lease losses $ 2,155 $ 2,184
Non-interest income $ 11,300 $ 10,617
Non-interest expense $ 41,441 $ 40,017
Net income $ 11,356 $ 11,112
Earnings - Normalized
Non-interest operating income(1) $ 11,300 $ 10,617
Non-interest operating expense(1) $ 41,441 $ 39,953
Net operating income, net of tax(1) $ 11,356 $ 11,156
Per Share Data
Net income, basic $ 0.67 $ 0.64
Net income, diluted $ 0.66 $ 0.63
Cash dividends declared $ 0.20 $ 0.13
Book value $ 8.80 $ 8.15
Tangible book value $ 6.99 $ 6.39
Per Share Data - Normalized:
Net operating income, basic(1) $ 0.67 $ 0.64
Net operating income, diluted(1) $ 0.66 $ 0.63
Performance Ratios:
Return on average assets 0.97% 1.03%
Return on average equity 7.75% 7.91%
Return on average tangible assets 1.00% 1.06%
Return on average tangible equity 9.81% 10.22%
Net interest margin, taxable equivalent 4.79% 5.09%
Efficiency ratio 68.81% 68.29%
Non-interest income to net interest income
and non-interest income 18.76% 18.12%
Performance Ratios - Normalized:
Operating return on average assets(1) 0.97% 1.03%
Operating return on average equity(1) 7.75% 7.94%
Operating return on average tangible assets(1) 1.00% 1.06%
Operating return on average tangible equity(1) 9.81% 10.26%
Core efficiency ratio(2) 64.05% 64.27%
Capital & Liquidity:
Total equity to total assets 12.19% 12.82%
Tangible equity to tangible assets 9.93% 10.33%
Total loans to total deposits 105.59% 91.93%
Asset Quality:
Net charge-offs $ 1,129 $ 2,215
Net loans charged-off to average loans,
annualized 0.12% 0.28%
Non-accrual loans $ 3,372 $ 2,653
Other real estate owned $ 2,452 $ 1,982
Repossessed assets $ 1,834 $ 2,231
Non-performing assets (NPA) $ 7,658 $ 6,866
NPA to total assets 0.63% 0.61%
Loans 90 days past due $ 2,289 $ 1,325
NPA + loans 90 days past due to total assets 0.82% 0.72%
Allowance for loan losses to total loans 1.15% 1.18%
Allowance for loan losses to NPA 143.07% 145.21%
Period End Balances:
Loans $ 953,105 $ 847,593
Intangible assets $ 30,356 $ 31,341
Assets $1,211,955 $1,129,803
Deposits $ 902,629 $ 922,001
Stockholders' equity $ 147,693 $ 144,788
Common stock market capitalization $ 150,640 $ 204,796
Full-time equivalent employees 371 369
Shares outstanding $ 16,775 $ 17,762
Average Balances:
Loans $ 904,490 $ 796,866
Intangible assets $ 30,838 $ 31,699
Earning assets $1,041,078 $ 960,966
Assets $1,165,950 $1,081,375
Deposits $ 924,587 $ 887,319
Stockholders' equity $ 146,582 $ 140,467
Shares outstanding, basic - wtd 16,959 17,315
Shares outstanding, diluted - wtd 17,293 17,680
(1) These amounts and ratios are calculated using net operating
income (net of tax) which excludes certain non-recurring items.
Since these items and their impact on First Security's
performance are difficult to predict, management believes
presentation of financial measures excluding the impact of these
items provide useful supplemental information that is important
for a proper understanding of the operating results of First
Security's core business. Refer to the following non-GAAP
reconciliation table for a detail of the non-recurring items.
(2) In accordance with SNL Financial practice, the core efficiency
ratio is calculated on a fully tax equivalent basis excluding
non-recurring items (see footnote (1) and non-GAAP reconciliation
table) and certain non-cash items, such as amortization of
intangibles, gains or losses on investment securities and gains,
losses and write-downs on foreclosed and repossessed properties.
(3) Amounts reflect the Form 10-Q/A's filed on December 18, 2007.
Non-GAAP Reconciliation Table
(in thousands, except per share data)
4th 3rd 2nd 1st 4th
Quarter Quarter Quarter Quarter Quarter
2007 2007 2007(3) 2007(3) 2006
------- ------- ------- ------- -------
Return on
average
assets 1.03% 1.03% 1.01% 0.83% 1.04%
Effect of
intangible
assets 0.02% 0.02% 0.03% 0.02% 0.03%
------- ------- ------- ------- -------
Return on
average
tangible
assets 1.05% 1.05% 1.04% 0.85% 1.07%
======= ======= ======= ======= =======
Return of
average
equity 8.37% 8.27% 7.89% 6.46% 8.15%
Effect of
intangible
assets 2.17% 2.21% 2.12% 1.76% 2.29%
------- ------- ------- ------- -------
Return on
average
tangible
equity 10.54% 10.48% 10.01% 8.22% 10.44%
======= ======= ======= ======= =======
Return on
average
assets 1.03% 1.03% 1.01% 0.83% 1.04%
Effect of
non-recur-
ring items -- -- -- -- 0.02%
------- ------- ------- ------- -------
Operating
return on
average
assets 1.03% 1.03% 1.01% 0.83% 1.06%
Effect of
average
intangible
assets 0.02% 0.02% 0.03% 0.02% 0.03%
------- ------- ------- ------- -------
Operating
return on
average
tangible
assets 1.05% 1.05% 1.04% 0.85% 1.09%
======= ======= ======= ======= =======
Return on
average
equity 8.37% 8.27% 7.89% 6.46% 8.15%
Effect of
non-recur-
ring items -- -- -- -- 0.12%
------- ------- ------- ------- -------
Operating
return on
average
equity 8.37% 8.27% 7.89% 6.46% 8.27%
Effect on
average
intangible
assets 2.17% 2.21% 2.12% 1.76% 2.33%
------- ------- ------- ------- -------
Operating
return on
average
tangible
equity 10.54% 10.48% 10.01% 8.22% 10.60%
======= ======= ======= ======= =======
Total equity
to total
assets 12.19% 12.38% 12.51% 12.76% 12.82%
Effect of
intangible
assets -2.26% -2.30% -2.39% -2.43% -2.49%
------- ------- ------- ------- -------
Tangible
equity to
tangible
assets 9.93% 10.08% 10.12% 10.33% 10.33%
======= ======= ======= ======= =======
Efficiency
ratio 66.97% 67.58% 68.59% 72.47% 67.47%
Effect of
non-recur-
ring items -- -- -- -- -0.44%
Effect of
non-cash
items -5.46% -1.91% -2.61% -5.24% -3.44%
Effect of
net
interest
income,
tax
equivalent
adjustment -0.96% -0.99% -1.03% -1.11% -1.13%
------- ------- ------- ------- -------
Core
efficiency
ratio 60.55% 64.68% 64.95% 66.12% 62.46%
======= ======= ======= ======= =======
Non-interest
income $ 3,338 $ 3,094 $ 2,654 $ 2,214 $ 2,739
------- ------- ------- ------- -------
Non-interest
operating
income $ 3,338 $ 3,094 $ 2,654 $ 2,214 $ 2,739
======= ======= ======= ======= =======
Non-interest
expense $10,474 $10,556 $10,213 $10,198 $ 9,871
Corporate
headquarters
relocation
costs -- -- -- -- (64)
======= ======= ======= ======= =======
Non-interest
operating
expense $10,474 $10,556 $10,213 $10,198 $ 9,807
======= ======= ======= ======= =======
Net income $ 3,092 $ 3,022 $ 2,888 $ 2,354 $ 2,916
Non-recurring
expenses,
net of tax -- -- -- -- 44
------- ------- ------- ------- -------
Net operating
income, net
of tax $ 3,092 $ 3,022 $ 2,888 $ 2,354 $ 2,960
======= ======= ======= ======= =======
Per Share Data
Book value $ 8.80 $ 8.59 $ 8.28 $ 8.28 $ 8.15
Effect of
intangible
assets (1.81) (1.77) (1.76) (1.76) (1.76)
------- ------- ------- ------- -------
Tangible book
value $ 6.99 $ 6.82 $ 6.52 $ 6.52 $ 6.39
======= ======= ======= ======= =======
Net income,
basic $ 0.19 $ 0.18 $ 0.17 $ 0.14 $ 0.17
Effect of
non-recur-
ring items,
net of tax -- -- -- -- --
------- ------- ------- ------- -------
Net operating
income, basic $ 0.19 $ 0.18 $ 0.17 $ 0.14 $ 0.17
======= ======= ======= ======= =======
Net income,
diluted $ 0.18 $ 0.18 $ 0.17 $ 0.13 $ 0.17
Effect of
non-recurring
items, net of
tax -- -- -- -- --
------- ------- ------- ------- -------
Net operating
income,
diluted $ 0.18 $ 0.18 $ 0.17 $ 0.13 $ 0.17
======= ======= ======= ======= =======
Supplemental
Data (in
thousands)
Allowance for
loan losses $10,956 $10,635 $10,363 $10,154 $ 9,970
Net interest
income, tax
equivalent $12,541 $12,761 $12,474 $12,102 $12,152
Amortization
of
intangibles $ 223 $ 243 $ 254 $ 265 $ 256
(Gain) Loss on
sales of
available-for
-sale
securities
and
corporate
stock, net $ -- $ -- $ 168 $ -- $ (7)
Other-than-
temporary
impairment of
securities $ -- $ -- $ -- $ 584 $ --
Gain on
foreclosed
and
repossessed
property,
leased
equipment,
premises
and equipment
and loans $ (508) $ (210) $ (68) $ (188) $ (178)
Losses on
foreclosed
and
repossessed
property and
premises and
equipment $ 370 $ 156 $ 8 $ 7 $ 301
Write-downs on
foreclosed
and
repossessed
property $ 574 $ 38 $ 60 $ 199 $ 64
Mortgage loan
and related
fees $ 352 $ 396 $ 388 $ 458 $ 375
Year-to-Date Year-to-Date
Dec. 31, Dec. 31,
2007 2006
------- -------
Return on
average
assets 0.97% 1.03%
Effect of
intangible
assets 0.03% 0.03%
------- -------
Return on
average
tangible
assets 1.00% 1.06%
======= =======
Return of
average
equity 7.75% 7.91%
Effect of
intangible
assets 2.06% 2.31%
------- -------
Return on
average
tangible
equity 9.81% 10.22%
======= =======
Return on
average
assets 0.97% 1.03%
Effect of
non-recur-
ring items -- --
------- -------
Operating
return on
average
assets 0.97% 1.03%
Effect of
average
intangible
assets 0.03% 0.03%
------- -------
Operating
return on
average
tangible
assets 1.00% 1.06%
======= =======
Return on
average
equity 7.75% 7.91%
Effect of
non-recur-
ring items -- 0.03%
------- -------
Operating
return on
average
equity 7.75% 7.94%
Effect on
average
intangible
assets 2.06% 2.32%
------- -------
Operating
return on
average
tangible
equity 9.81% 10.26%
======= =======
Total equity
to total
assets 12.19% 12.82%
Effect of
intangible
assets -2.26% -2.49%
------- -------
Tangible
equity to
tangible
assets 9.93% 10.33%
======= =======
Efficiency
ratio 68.81% 68.29%
Effect of
non-recur-
ring items -- (0.11)%
Effect of
non-cash
items -3.74% -2.83%
Effect of
net interest
income,
tax
equivalent
adjustment -1.02% -1.08%
------- -------
Core
efficiency
ratio 64.05% 64.27%
======= =======
Non-interest
income $11,300 $10,617
------- -------
Non-interest
operating
income $11,300 $10,617
======= =======
Non-interest
expense $41,441 $40,017
Corporate
headquarters
relocation
costs -- (64)
------- -------
Non-interest
operating
expense $41,441 $39,953
======= =======
Net income $11,356 $11,112
Non-recurring
expenses,
net of tax -- 44
------- -------
Net operating
income, net
of tax $11,356 $11,156
======= =======
Per Share Data
Book value $ 8.80 $ 8.15
Effect of
intangible
assets (1.81) (1.75)
------- -------
Tangible book
value $ 6.99 $ 6.39
======= =======
Net income,
basic $ 0.67 $ 0.64
Effect of
non-recur-
ring items,
net of tax -- --
------- -------
Net operating
income, basic $ 0.67 $ 0.64
======= =======
Net income,
diluted $ 0.66 $ 0.63
Effect of
non-recurring
items, net of
tax -- --
------- -------
Net operating
income,
diluted $ 0.66 $ 0.63
======= =======
Supplemental
Data (in
thousands)
Allowance for
loan losses $10,956 $ 9,970
Net interest
income, tax
equivalent $49,880 $48,955
Amortization
of
intangibles $ 985 $ 1,246
(Gain) Loss on
sales of
available-for
-sale
securities
and
corporate
stock, net $ 168 $ (7)
Other-than-
temporary
impairment of
securities $ 584 $ --
Gain on
foreclosed
and
repossessed
property,
leased
equipment,
premises
and equipment
and loans $ (974) $ (618)
Losses on
foreclosed
and
repossessed
property and
premises and
equipment $ 541 $ 414
Write-downs on
foreclosed
and
repossessed
property $ 871 $ 407
Mortgage loan
and related
fees $ 1,594 $ 1,446