-- Quarterly Net Income Improves 77% over the Same Quarter Last Year -- Total Assets Exceed $1 Billion -- Efficiency Ratio Remains Low at 47% -- Net Interest Margin of 4.41% Reflects Solid Loan Growth -- Asset Quality Continues to be Strong
ALPHARETTA, Ga., Oct. 19, 2006 (PRIMEZONE) -- Integrity Bancshares, Inc. (Nasdaq:ITYC) today announced record earnings for the third quarter and nine-month period ended September 30, 2006.
Net earnings for the third quarter rose to $3,366,000, or $0.22 per diluted share, reflecting an increase of 77% over the same period last year of $1,898,000, or $0.12 per diluted share. Year to date earnings results also reached a record level. For the first nine months of 2006, net earnings were $8,324,000 compared to $4,707,000 for the same period last year, also an increase of 77%. Diluted earnings per share for the year to date increased as well to $.54 compared to $.33 for the same period last year, reflecting a 64% increase.
Total assets also surpassed a milestone. As of September 30, 2006 total assets were over $1 billion. This represented an increase of 6% in assets during the third quarter, 35% for the year to date and 54% for the previous twelve months. Total assets at September 30, 2005 were $662 million.
The annualized year-to-date return on average assets (ROA) and average equity (ROE) improved to 1.24% and 15.58%, respectively, compared to 1.12% and 11.91% for the same period last year. These increases were due to strong earnings during this year, resulting primarily from continued growth and improvement in our net interest margin. For the year to date, the net interest margin was 4.41% compared to 4.25% for the corresponding nine-month period last year.
Increased earnings have largely been the result of steady high quality asset growth and a consistent net interest rate margin. Asset growth has been primarily due to loan growth. Interest income on loans for the third quarter of 2006 was $20 million, 84% higher than the same period last year. Our efficiency ratio for the current year to date was 47%, level with the same period in 2005.
Noninterest expenses include our charitable contributions that are generally targeted at 10% of the previous year's net income. Our bank subsidiary donates the tithed funds through a foundation to organizations in our community and around the world that are primarily faith-based, as well as individuals in need that have some relationship with us.
"We have been successful by focusing on real estate-backed lending, adhering to meticulous underwriting practices, hiring the best people and empowering them to provide outstanding customer service. This strategy has allowed us to grow rapidly and reach the $1 billion assets milestone in less than six years," said CEO Steve Skow. "We are grateful to our employees and our board for their dedicated hard work, our customers for their loyalty, and our shareholders for having faith in our ability to perform."
"We have matured as a public company to the point where we meet the standards for listing on the Nasdaq Global market. During the third quarter, our listing application was approved, and we began trading on Nasdaq on September 6. This is an important step in our development because it provides our shareholders with greater liquidity and should, over the longer-term, increase our access to the capital markets," Skow noted.
Asset quality, an important factor in our successes, has remained strong. Non-performing loans decreased to $513,000 at September 30, 2006 from $2,885,000 at September 30, 2005 and $1,652,000 at December 31, 2005. Additionally, there have been no charged-off loans during the nine month period ended September 30, 2006. The loan loss provision for third quarter 2006 was lower than the same period in 2005 mainly because the allowance for loan losses was adequate at .93% of total loans. For the year to date through September 30, the loan loss provision was $2.5 million compared to $2 million in 2005 through September 30, a result of our loan growth of 48% during the trailing twelve months.
Total loans grew to $855 million, or 5% for the third quarter and 31% for the year to date. Although loan production was down somewhat in the third quarter, management believes the commercial real estate market in metro Atlanta is still robust and loan demand remains strong. Funding for the loans added in the third quarter came primarily from wholesale funding sources, including attractively priced restructured repurchase agreements which totaled $30 million and additional Federal Home Loan Bank advances of $25 million. Funding for loan growth during the first nine months of this year consisted of deposit growth of 20%, as well as wholesale funds. Total deposits at September 30, 2006 were $810 million.
About Integrity Bancshares, Inc.
Integrity Bancshares, Inc. is the holding company for Integrity Bank, headquartered in Alpharetta, Georgia. The bank began operations on November 1, 2000, and its main office is located at 11140 State Bridge Road. We also have full service financial centers at 900 Woodstock Road in Roswell, Georgia, 1650 Cumberland Parkway in Smyrna, Georgia, and 1581 Satellite Blvd in Duluth, Georgia. A loan production office opened in Cumming (Forsyth County), Georgia during the fourth quarter of 2005.
The primary investor contact at Integrity Bancshares, Inc. is Ms. Suzanne Long, Senior Vice-President & C.F.O. For additional information and a list of primary market makers of Integrity Bancshares, Inc., please access the Investor Relations section of our website at www.myintegritybank.com.
This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to present or future trends or factors generally affecting the banking industry and specifically affecting our operations, markets, and products. Without limiting the foregoing, the words "believes," "expects," "anticipates," "estimates," "projects," "intends," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those projected for many reasons, including without limitation, changing events and trends that have influenced our assumptions. These trends and events include (i) changes in the interest rate environment which may reduce margins, (ii) non-achievement of expected growth, (iii) less favorable than anticipated changes in the national and local business environment and securities markets, (iv) adverse changes in the regulatory requirements affecting Integrity, (v) greater competitive pressures among financial institutions in our market, (vi) changes in fiscal, monetary, regulatory, and tax policies, (vii) changes in political, legislative, and economic conditions, (viii) inflation, and (ix) greater loan losses than historic levels and (x) failure to achieve the revenue increases expected to result from our recent investments in its transaction deposit and lending businesses. Investors are encouraged to read the related section in Integrity Bancshares, Inc.'s 2005 Annual Report to Shareholders and the 2005 Annual Report on Form 10-K, including the "Risk Factors" set forth therein. Additional information and other factors that could affect future financial results are included in Integrity's filings with the Securities and Exchange Commission.
Integrity Bank (ITYC)
Selected Financial Information
September 30, 2006
(In thousands, except per share data)
Sept. 30, 2006 Sept. 30, 2005 Change
-------------- -------------- ------
Total Assets 1,018,622 661,879 53.90%
Net Loans 846,847 573,174 47.75%
Investments 115,649 62,260 85.75%
Total Deposits 810,289 586,917 38.06%
Noninterest-Bearing 21,183 12,073
Interest-Bearing 789,106 574,844 37.27%
Stockholders' Equity 77,045 64,388 19.66%
Allowance for Loan Losses 7,991 5,279 51.37%
Nonperforming Loans 513 2,885 -63.43%
Common Shares Outstanding 14,643,342 14,361,542 1.96%
Loans as % Deposits 104.51% 97.66%
Allowance for Loan Losses as
% Total Loans .93% .91%
Nonperforming Assets as %
Total Loans and ORE .06% 0.50%
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Three Months Ended
September 30, %
2006 2005 Change
---- ---- ------
Interest Income 21,046 11,369 85.12%
Interest Expense 11,042 4,926 124.16%
Net Interest Income 10,004 6,443 55.27%
Provision for Loan Losses 351 764 -54.06%
Noninterest Income 466 190 145.26%
Noninterest Expenses 4,939 2,867 72.27%
Income Before Taxes 5,180 3,001 72.61%
Tax Expense 1,814 1,103 64.46%
Net Income 3,366 1,898 77.34%
Basic Earnings Per Share 0.23 .13 76.92%
Diluted Earnings Per Share 0.22 .12 83.33%
Weighted-Avg Shares Outstanding
- Basic 14,637,472 14,361,542 1.92%
Weighted-Avg Shares Outstanding
- Diluted 15,209,363 15,256,556 -.31%
Nine Months Ended
September 30, %
2006 2005 Change
---- ---- ------
Interest Income 56,883 29,650 91.85%
Interest Expense 28,268 12,250 130.76%
Net Interest Income 28,615 17,400 64.45%
Provision for Loan Losses 2,490 2,001 24.44%
Noninterest Income 948 577 64.30%
Noninterest Expenses 13,759 8,507 61.74%
Income Before Taxes 13,314 7,469 78.26%
Tax Expense 4,990 2,762 80.67%
Net Income 8,324 4,707 76.84%
Basic Earnings Per Share .57 .35 62.86%
Diluted Earnings Per Share .54 .33 63.64%
Weighted-Avg Shares Outstanding
- Basic 14,567,824 13,530,746 7.66%
Weighted-Avg Shares Outstanding
- Diluted 15,374,109 14,421,482 6.60%
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Nine Months Ended
September 30, %
2006 2005 Change
---- ---- ------
Average Assets 900,865 567,668 58.59%
Average Net Loans 761,231 483,211 57.54%
Average Earning Assets 866,788 547,023 58.46%
Average Deposits 776,278 472,451 64.31%
Average Total Funds 791,856 498,917 58.71%
Average Equity 71,438 52,726 35.49%
Net Charge-offs (recoveries) (50) 155 -132.26%
Return on Average Assets 1.24% 1.12%
Return on Average Equity 15.58% 11.91%
Net Interest Margin 4.41% 4.25%