PASO ROBLES, Calif., Oct. 22, 2007 (PRIME NEWSWIRE) -- Heritage Oaks Bancorp (Nasdaq:HEOP), the parent company of Heritage Oaks Bank, today reported that solid core deposit growth and continued strong asset quality contributed to third quarter profits. For the third quarter of 2007 net income was $1.6 million, or $0.24 per diluted share, compared to $1.7 million, or $0.26 per diluted share, in the third quarter of 2006. For the first nine months of 2007, net income was $4.9 million, or $0.74 per diluted share, compared to $5.0 million, or $0.76 per diluted share for the first nine months of 2006.
On October 12, Heritage Oaks Bancorp closed its acquisition of Business First National Bank of Santa Barbara in a stock and cash transaction valued at approximately $20 million. In connection with the transaction, Business First National Bank was merged with and into Heritage Oaks Bank and now operates as a division of Heritage Oaks Bank. The merger is expected to be accretive to earnings in 2008. The financial results presented in this release for the quarter ended September 30, 2007, do not include the assets, liabilities or results of operations for the acquired company.
"Acquiring Business First National Bank of Santa Barbara, a well established and highly respected community bank located in a premium, high-growth area, is consistent with our ongoing strategy of expanding our community banking franchise," stated Lawrence P. Ward, President and CEO. "Business First establishes us as the #1 publicly owned community bank in the Santa Barbara market. It brings a sizeable loan portfolio, which has been assembled by a skilled team of commercial lenders, a strong deposit base and a healthy share of a robust market."
Third Quarter 2007 Highlights:
* Core deposits increased by 12% over a year ago, and represent 69% of total deposits. * Revenues increased 5% to $8.6 million. * Return on average equity was 12.1% and return on average assets was 1.12%. * Net interest margin was 5.44%. * Gross loans increased 12% to $475 million. * Asset quality remained strong, non-performing assets were 0.11% of total assets.
Balance Sheet
"Despite heavy competition for loans we continue to be very stringent in our underwriting standards, and as a result, we expect our loan portfolio to grow at a more moderate pace," noted Ward. The loan portfolio grew 12% to $469 million at September 30, 2007, from $419 million a year earlier. The growth was fueled by a 35% increase in commercial, financial and agricultural loans, as well as an 11% increase in commercial real estate loans. Below is a breakout of these loans illustrating the diversification within the particular portfolios:
Construction / Land
---------------------------------------------------------------------
Single
Family Single Family
Residences Residences - Spec. Land Owner Occupied Other
---------------------------------------------------------------------
8% 8% 18% 26% 40%
---------------------------------------------------------------------
Commercial Real Estate
---------------------------------------------------------------------
Commercial
Farmland Industrial Retail Professional Hospitality Other
---------------------------------------------------------------------
5% 17% 20% 23% 18% 17%
---------------------------------------------------------------------
"We implemented a strategy earlier this year of funding our loan demand through a new variable interest rate money market account, also with the intention of replacing higher cost borrowing," said Ward. "We have increased savings, NOW and money market balances 48% and increased total deposits 18% since the end of 2006. Additionally, we are able to re-price these deposits immediately after a rate change, making them a more favorable deposit to the Bank than a long-term CD. We believe that we can save approximately 20-30 basis points by replacing FHLB borrowings with relationship core deposits." Total deposits increased 15% to $496 million at the end of September, compared to $430 million at the end of September 2006. Non-interest bearing accounts represent 26% of total deposits and savings, money market and NOW accounts represent 43% of total deposits.
Due to the significant deposit growth, Heritage Oaks reduced its FHLB borrowings by $30 million during the third quarter, and $50 million year-to-date. On September 20, 2007, the company issued $5.0 million in trust preferred securities. The securities were issued by a special purpose business trust formed by Heritage Oaks and were sold to a pooled investment vehicle sponsored by Keefe, Bruyette & Woods in a private transaction. The Company intends to use the funds for general corporate purposes including the acquisition of Business First.
Notwithstanding the payoff of FHLB borrowing, total assets increased 8% to $573 million at quarter-end, compared to $532 million a year earlier and increased 6% compared to $542 million in total assets at December 31, 2006.
Asset Quality
Asset quality remains strong with non-performing assets totaling $641,000, or 0.11% of total assets at September 30, 2007. Three months earlier, Heritage Oaks' non-performing assets totaled $555,000, or 0.09% of total assets. The allowance for loan losses increased to $4.7 million, or 0.99% of total loans held for investment at quarter-end compared to $3.9 million or 0.91% of total loans held for investment at September 30, 2006. "Our non-performing loans consist of seven loans to six borrowers, of which one for approximately $186,000 is in process of refinance, one for approximately $272,000 that is real estate secured and has a loan to value of less than 65% and is current, two loans that are less than $20,000 each and are paying as agreed, one less than $50,000 that is paying and one borrower's loan is collateralized and is in process of workout. We are keeping a close eye on all delinquent loans, reviewing them weekly and do not see any major changes in the make up or quantity of these loans," added Ward.
Operating Results
"Core deposit growth, generated by the success of our program to increase money market account balances and continued growth in our banking relationships, is helping to moderate the impact of the yield curve on our margin," said Ward. Third quarter net interest margin was 5.44% compared to 5.56% in the previous quarter and 6.02% in the third quarter a year ago. Year-to-date, the net interest margin was 5.53% compared to 6.02% for the same period in 2006. "On a percentage basis, the single largest factor that is negatively impacting net income for the Company for both quarter to date and year to date results is the increase in interest expense. Because of the changes made to the balance sheet, specifically on the liability funding side, we can already see improvement on a linked quarter basis," Ward reported.
"Occupancy expense has increased due primarily to the sale leaseback transaction that was finalized on June 27, 2007. The offset to this additional expense is an increase in interest income from investment of the funds received. As reported in the June 30, 2007 10Q, this continues to be an accretive transaction to the bottom line," Ward indicated.
"While salary and employee benefits have increased by $273,000 for the three months ended September 30, 2007 compared to the same period in 2006, it should be noted that on a linked quarter basis, the increase was only $44,000," noted Ward.
The provision for income tax was approximately 200 basis points higher at 38.2% for the nine months ended September 30, 2007 compared to 36.2% for the same period in 2006. The lower rate in 2006 was impacted by timing differences on certain tax issues that flowed through the Income Statement.
Performance Measures
The efficiency ratio was 66.9% in the third quarter of 2007 compared to 64.3% in the previous quarter and 65.3% in the third quarter a year ago. Year-to-date, the efficiency ratio was 66.7% compared to 64.9% in the first nine months of 2006. The efficiency ratio measures operating expenses as a percent of revenues.
Return on average assets was 1.12% in the third quarter and 1.16% for the first nine months of the year, compared to 1.33% and 1.35% for the respective periods last year. Return on average equity was 12.1% for the third quarter of 2007 and 12.7% year-to-date, compared to 14.4% and 14.3% in their respective periods a year ago.
Book value per share was $ 8.32 at September 30, 2007, compared to $7.62 per share a year earlier. Tangible book value per share was $7.44 at September 30, 2007, compared to $6.66 a year earlier. Shareholders' equity increased 11% to $53.9 million compared to $48.4 million a year ago.
Heritage Oaks Bancorp is the holding company for Heritage Oaks Bank which operates as Heritage Oaks Bank and Business First, a division of Heritage Oaks Bank. Heritage Oaks Bank has its headquarters plus two branch offices in Paso Robles, two branch offices in San Luis Obispo, single branch offices in Cambria, Arroyo Grande, Atascadero, Templeton and Morro Bay and three branch offices in Santa Maria. Heritage conducts commercial banking business in San Luis Obispo County and Northern Santa Barbara County. The Business First division has two branch offices in Santa Barbara. Visit Heritage Oaks Bancorp on the Web at www.heritageoaksbancorp.com.
Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to the ability to successfully integrate the operations of Business First National Bank, increased profitability, continued growth, the Bank's beliefs as to the adequacy of its existing and anticipated allowances for loan losses, beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Bank's operations, interest rates and financial policies of the United States government, general economic conditions and California's energy crisis. Additional information on these and other factors that could affect financial results are included in Heritage Oaks Bancorp's Securities and Exchange Commission filings. If any of these risks or uncertainties materialize or if any of the assumptions underlying such forward-looking statements proves to be incorrect, Heritage Oaks Bancorp's results could differ materially from those expressed in, implied or projected by such forward-looking statements. Heritage Oaks Bancorp assumes no obligation to update such forward-looking statements.
Heritage Oaks Bancorp
Consolidated Balance Sheets
(dollars in thousands except share data)
(unaudited) (audited) (unaudited) Percentage Change Vs.
------------------------------- --------------------
9/30/2007 12/31/2006 9/30/2006 12/31/2006 9/30/2006
--------- --------- --------- --------- ---------
Assets
Cash and due
from banks $ 20,316 $ 19,164 $ 17,972 6.0% 13.0%
Federal
funds sold 14,260 3,870 14,195 268.5% 0.5%
--------- --------- --------- --------- ---------
Total cash
and cash
equivalents 34,576 23,034 32,167 50.1% 7.5%
--------- --------- --------- --------- ---------
Interest
bearing
deposits
with
other banks 1,718 318 318 440.3% 440.3%
Securities
available
for sale 34,854 38,445 40,294 -9.3% -13.5%
Federal Home
Loan Bank
Stock,
at cost 2,171 2,350 1,955 -7.6% 11.0%
Loans held
for sale 902 1,764 2,069 -48.9% -56.4%
Loans,
net (a) 468,966 439,277 419,314 6.8% 11.8%
Property,
premises
and
equipment 5,017 14,581 14,801 -65.6% -66.1%
Cash surrender
value of
life
insurance 9,716 9,435 9,344 3.0% 4.0%
Deferred
tax assets 4,964 2,414 2,515 105.6% 97.4%
Goodwill 4,864 4,865 4,864 0.0% 0.0%
Core deposit
intangible 883 1,148 1,223 -23.1% -27.8%
Other assets 4,059 4,143 3,517 -2.0% 15.4%
--------- --------- --------- --------- ---------
Total
assets $ 572,690 $ 541,774 $ 532,381 5.7% 7.6%
========= ========= ========= ========= =========
Liabilities
Deposits:
Non-interest
bearing
demand $ 130,221 $ 153,005 $ 157,180 -14.9% -17.2%
Savings, NOW,
and money
market 215,576 146,110 152,033 47.5% 41.8%
Time deposits
of $100K
or more 50,666 30,630 31,782 65.4% 59.4%
Time deposits
under $100K 99,847 90,776 89,277 10.0% 11.8%
--------- --------- --------- --------- ---------
Total
deposits 496,310 420,521 430,272 18.0% 15.3%
--------- --------- --------- --------- ---------
FHLB advances
and other
borrowings -- 50,000 40,000 -100.0% -100.0%
Securities sold
under
agreements to
repurchase 1,464 1,364 1,219 7.3% 20.1%
Junior
subordinated
debentures 13,403 16,496 8,248 -18.8% 62.5%
Other
liabilities 7,663 3,921 4,215 95.4% 81.8%
--------- --------- --------- --------- ---------
Total
liabilities 518,840 492,302 483,954 5.4% 7.2%
--------- --------- --------- --------- ---------
Stockholders' equity
Common stock,
no par value;
20,000,000
shares
authorized;
issued and
outstanding
6,469,653;
6,345,639
and 6,356,021
for September
30, 2007;
December
31, 2006
and September
30, 2006
respectively 29,976 29,247 29,648 2.5% 1.1%
Additional paid
in capital 600 336 -- 78.6% --
Retained
earnings 23,205 19,809 18,668 17.1% 24.3%
Accumulated
other
comprehensive
income 69 80 111 -13.8% -37.8%
--------- --------- --------- --------- ---------
Total
stockholders'
equity 53,850 49,472 48,427 8.8% 11.2%
--------- --------- --------- --------- ---------
Total
liabilities
and
stockholders'
equity $ 572,690 $ 541,774 $ 532,381 5.7% 7.6%
========= ========= ========= ========= =========
(a) Loans are net of deferred loan fees of $1,941; $1,625; $1,489 and
allowance for loan losses of $4,720; $4,081; $3,863 for
September 30, 2007, December 31, 2006, and September 30, 2006
respectively.
Heritage Oaks Bancorp
Consolidated Statements of Income
(dollars in thousands except share data)
(unaudited)(unaudited)(unaudited)
For the Three Months Ended Percentage Change Vs.
------------------------------- --------------------
9/30/2007 6/30/2007 9/30/2006 6/30/2007 9/30/2006
Interest Income:
Interest and
fees on
loans $ 10,058 $ 10,214 $ 8,968 -1.5% 12.2%
Investment
securities 426 437 467 -2.5% -8.8%
Federal funds
sold and
commercial
paper 385 162 131 137.7% 193.9%
Time
certificates
of deposit 1 10 2 -90.0% -50.0%
--------- --------- --------- --------- ---------
Total
interest
income 10,870 10,823 9,568 0.4% 13.6%
--------- --------- --------- --------- ---------
Interest Expense:
NOW accounts 55 43 22 27.9% 150.0%
MMDA accounts 1,216 946 567 28.5% 114.5%
Savings accounts 21 23 25 -8.7% -16.0%
Time deposits
of $100K
or more 610 301 172 102.7% 254.7%
Other time
deposits 1,229 1,276 1,132 -3.7% 8.6%
Other borrowed
funds 411 976 628 -57.9% -34.6%
--------- --------- --------- --------- ---------
Total
interest
expense 3,542 3,565 2,546 -0.6% 39.1%
--------- --------- --------- --------- ---------
Net interest
income before
provision for
loan losses 7,328 7,258 7,022 1.0% 4.4%
Provision
for loan
losses 210 170 180 23.5% 16.7%
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 7,118 7,088 6,842 0.4% 4.0%
--------- --------- --------- --------- ---------
Non Interest
Income:
Service
charges on
deposit
accounts 645 686 644 -6.0% 0.2%
Other income 664 705 578 -5.8% 14.9%
--------- --------- --------- --------- ---------
Total non-
interest
income 1,309 1,391 1,222 -5.9% 7.1%
--------- --------- --------- --------- ---------
Non-Interest
Expense:
Salaries and
employee
benefits 3,238 3,194 2,965 1.4% 9.2%
Occupancy and
equipment 830 706 633 17.6% 31.1%
Other
expenses 1,709 1,663 1,786 2.8% -4.3%
--------- --------- --------- --------- ---------
Total non-
interest
expenses 5,777 5,563 5,384 3.8% 7.3%
--------- --------- --------- --------- ---------
Income before
provision for
income taxes 2,650 2,916 2,680 -9.1% -1.1%
Provision
for
income
taxes 1,022 1,116 947 -8.4% 7.9%
--------- --------- --------- --------- ---------
Net Income $ 1,628 $ 1,800 $ 1,733 -9.6% -6.1%
========= ========= ========= ========= =========
Average basic
shares
outstanding 6,472,653 6,432,687 6,350,727
Average diluted
shares
outstanding 6,679,114 6,692,467 6,594,626
Basic earnings
per share $ 0.25 $ 0.28 $ 0.27
Fully diluted
earnings
per share $ 0.24 $ 0.27 $ 0.26
Heritage Oaks Bancorp
Consolidated Statements of Income
(dollars in thousands except share data)
(unaudited)(unaudited)
For the Nine Months Percentage
Ended Change Vs.
-------------------- ---------
9/30/2007 9/30/2006 9/30/2006
-------------------- ---------
Interest Income:
Interest and fees
on loans $ 30,087 $ 24,475 22.9%
Investment securities 1,324 1,446 -8.4%
Federal funds sold and
commercial paper 577 513 12.5%
Time certificates
of deposit 7 6 16.7%
--------- --------- ---------
Total interest income 31,995 26,440 21.0%
--------- --------- ---------
Interest Expense:
NOW accounts 126 66 90.9%
MMDA accounts 2,830 1,687 67.8%
Savings accounts 69 78 -11.5%
Time deposits of $100K
or more 1,120 428 161.7%
Other time deposits 3,716 2,671 39.1%
Other borrowed funds 2,516 1,406 78.9%
--------- --------- ---------
Total interest expense 10,377 6,336 63.8%
--------- --------- ---------
Net interest income before
provision for loan losses 21,618 20,104 7.5%
Provision for loan losses 520 480 8.3%
--------- --------- ---------
Net interest income after
provision for loan losses 21,098 19,624 7.5%
--------- --------- ---------
Non Interest Income:
Service charges on
deposit accounts 1,944 1,826 6.5%
Other income 1,988 1,826 8.9%
--------- --------- ---------
Total non-interest income 3,932 3,652 7.7%
--------- --------- ---------
Non-Interest Expense:
Salaries and employee
benefits 9,681 8,534 13.4%
Occupancy and equipment 2,251 1,901 18.4%
Other expenses 5,101 4,982 2.4%
--------- --------- ---------
Total non-interest expenses 17,033 15,417 10.5%
--------- --------- ---------
Income before provision
for income taxes 7,997 7,859 1.8%
Provision for income
taxes 3,058 2,846 7.4%
--------- --------- ---------
Net Income $ 4,939 $ 5,013 -1.5%
========= ========= =========
Average basic shares
outstanding 6,429,830 6,326,743
Average diluted shares
outstanding 6,679,987 6,594,800
Basic earnings per share $ 0.77 $ 0.79
Fully diluted earnings
per share $ 0.74 $ 0.76
Additional Financial Information
(dollars in thousands)
LOANS (including For the Quarters Ended Percentage Change Vs.
loans held ------------------------------- --------------------
for sale) 9/30/2007 12/31/2006 9/30/2006 12/31/2006 9/30/2006
------------------------------- --------------------
Commercial,
financial and
agricultural $ 101,748 $ 84,976 $ 75,627 19.7% 34.5%
Real estate -
construction/
land 105,054 105,712 101,665 -0.6% 3.3%
Real estate -
other 253,860 237,401 229,070 6.9% 10.8%
Home equity lines
of credit 8,897 10,792 11,777 -17.6% -24.5%
Installment loans
to individuals 5,580 5,598 5,660 -0.3% -1.4%
All other loans
(including
overdrafts) 488 504 867 -3.2% -43.7%
--------- --------- --------- --------- ---------
Total loans $ 475,627 $ 444,983 $ 424,666 6.9% 12.0%
========= ========= ========= ========= =========
Loans held
for sale $ 902 $ 1,764 $ 2,069 -48.9% -56.4%
--------- --------- --------- --------- ---------
Quarter Year Quarter
Ended Ended Ended Percentage Change Vs.
ALLOWANCE FOR ------------------------------- --------------------
LOAN LOSSES 9/30/2007 12/31/2006 9/30/2006 12/31/2006 9/30/2006
------------------------------- --------------------
Balance,
beginning
of period $ 4,520 $ 3,881 $ 3,695 16.5% 22.3%
Provision expense 210 600 180 -65.0% 16.7%
Credit losses
charged against
allowance (16) (561) (17) -97.1% -5.9%
Recoveries of
loans previously
charged off 6 161 5 -96.3% 20.0%
--------- --------- --------- --------- ---------
Balance, end
of period $ 4,720 $ 4,081 $ 3,863 15.7% 22.2%
--------- --------- --------- --------- ---------
Net (charge-offs)/
recoveries $ (10) $ (400) $ (12) -- --
Net charge-offs/
average loans
outstanding 0.00% 0.09% 0.00% -97.7% -26.8%
Allowance for
loan losses/
total loans
outstanding 0.99% 0.92% 0.91% 8.2% 9.1%
For the Quarters Ended Percentage Change Vs.
NON-PERFORMING ------------------------------- --------------------
ASSETS 9/30/2007 12/31/2006 9/30/2006 12/31/2006 9/30/2006
------------------------------- --------------------
Loans on non-
accrual
status $ 641 $ 55 $ 183 1065.5% 250.3%
Loans more than
90 days
delinquent,
still
accruing -- -- -- -- --
--------- --------- --------- --------- ---------
Total non-
performing
loans 641 55 183 1065.5% 250.3%
--------- --------- --------- --------- ---------
Other real estate
owned (OREO)/
repossessed
assets -- -- -- -- --
--------- --------- --------- --------- ---------
Total non-
performing
assets $ 641 $ 55 $ 183 1065.5% 250.3%
========= ========= ========= ========= =========
Total non-
performing
assets to
total assets 0.11% 0.01% 0.04% 1019.3% 179.8%
For the Quarters Ended Percentage Change Vs.
------------------------------- --------------------
DEPOSITS 9/30/2007 12/31/2006 9/30/2006 12/31/2006 9/30/2006
------------------------------- --------------------
Non-interest
bearing
demand $ 130,221 $ 153,005 $ 157,180 -14.9% -17.2%
--------- --------- --------- --------- ---------
Interest-bearing
demand 56,931 45,164 46,100 26.1% 23.5%
Regular savings
accounts 21,606 23,406 24,755 -7.7% -12.7%
Money market
accounts 137,039 77,540 81,178 76.7% 68.8%
--------- --------- --------- --------- ---------
Total interest-
bearing
transaction
and savings
accounts 215,576 146,110 152,033 47.5% 41.8%
--------- --------- --------- --------- ---------
Time deposits
under
$100 thousand 99,847 90,776 89,277 10.0% 11.8%
Time deposits of
$100 thousand
or more 50,666 30,630 31,782 65.4% 59.4%
--------- --------- --------- --------- ---------
Total time
deposits 150,513 121,406 121,059 24.0% 24.3%
--------- --------- --------- --------- ---------
Total deposits $ 496,310 $ 420,521 $ 430,272 18.0% 15.3%
========= ========= ========= ========= =========
PROFITABILITY /
PERFORMANCE
RATIOS Three Months Ended Nine Months Ended
------------------------------- --------------------
9/30/2007 6/30/2007 9/30/2006 9/30/2007 9/30/2006
------------------------------- --------------------
Operating
efficiency 66.89% 64.32% 65.31% 66.67% 64.90%
Return on
average equity 12.09% 13.84% 14.43% 12.68% 14.31%
Return on
average
tangible equity 13.54% 15.58% 16.54% 14.25% 16.45%
Return on
average assets 1.12% 1.25% 1.33% 1.16% 1.35%
Other operating
income to
average assets 0.90% 0.96% 0.94% 0.92% 0.99%
Other operating
expense to
average assets 3.97% 3.86% 4.15% 3.99% 4.16%
Net interest
income to
average assets 5.04% 5.03% 5.41% 5.06% 5.43%
Non-interest
income to total
net revenue 15.16% 16.08% 14.82% 15.39% 15.37%
ASSET QUALITY
AND CAPITAL
RATIOS
Non-performing
loans to total
gross loans 0.13% 0.12% 0.04%
ALLL to total
gross loans 0.99% 1.00% 0.91%
Non-performing
loans as a %
of ALLL 13.58% 12.28% 4.74%
Net charge-offs
to average loans 0.00% -0.01% 0.00%
Non-performing
loans to
primary capital 1.19% 1.06% 0.38%
Leverage ratio 10.69% 9.52% 9.86%
Tier I Risk-Based
Capital Ratio 11.65% 10.58% 10.35%
Total Risk-Based
Capital Ratio 12.58% 11.48% 11.18%
AVERAGE BALANCES
AND RATES For the Three Months Ended
---------------------------------------------
(dollars in thousands) 9/30/2007 9/30/2006
--------------------- ---------------------
Balance Income Balance Income
--------- --------- --------- ---------
Investments with
other banks $ 481 $ 1 $ 318 $ 7
Investment securities
taxable 21,649 251 26,366 285
Investment securities
non-taxable 16,036 175 16,467 177
Federal funds sold 29,447 385 9,966 131
Loans 466,749 10,058 409,897 8,968
--------- --------- --------- ---------
Total interest
earning assets 534,362 10,870 463,014 9,568
--------- --------- --------- ---------
Allowance for possible
loan losses (4,600) (3,767)
Other assets 46,858 56,073
--------- ---------
Total assets $ 576,620 $ 515,320
========= =========
Savings/NOW/money
market accounts $ 206,186 $ 1,292 $ 154,539 $ 614
Time deposits 147,659 1,839 119,162 1,304
Other borrowings 17,940 251 32,195 429
Federal funds purchased -- -- 652 10
Long-term debt 8,864 160 8,248 189
--------- --------- --------- ---------
Total interest
bearing
liabilities 380,649 3,542 314,796 2,546
--------- --------- --------- ---------
Demand deposits 133,432 148,215
Other liabilities 9,098 4,646
--------- ---------
Total shareholders'
equity 53,441 47,663
--------- ---------
Total liabilities and
shareholders' equity $ 576,620 $ 515,320
========= =========
Yield on investments 4.44% 4.31%
Yield on federal funds sold 5.19% 5.22%
Yield on loans 8.55% 8.68%
Yield on interest earning assets 8.07% 8.20%
Rate on deposits 2.55% 1.80%
Rate on borrowings 6.08% 6.06%
Rate on long-term debt 7.16% 9.09%
Rate on interest-bearing liabilities 3.69% 3.21%
Cost of funds 2.73% 2.18%
Average equity to average assets 9.27% 9.25%
Net interest margin 5.44% 6.02%
AVERAGE BALANCES
AND RATES For the Nine Months Ended
---------------------------------------------
(dollars in thousands) 9/30/2007 9/30/2006
--------------------- ---------------------
Balance Income Balance Income
--------- --------- --------- ---------
Investments with
other banks $ 373 $ 7 $ 314 $ 22
Investment securities
taxable 23,157 794 28,161 905
Investment securities
non-taxable 16,434 530 16,209 525
Federal funds sold 15,117 577 14,217 513
Loans 468,007 30,087 387,627 24,475
--------- --------- --------- ---------
Total interest
earning assets 523,088 31,995 446,528 26,440
--------- --------- --------- ---------
Allowance for possible
loan losses (4,401) (3,928)
Other assets 52,443 52,319
--------- ---------
Total assets $ 571,130 $ 494,919
========= =========
Savings/NOW/money
market accounts $ 182,369 $ 3,025 $ 163,506 $ 1,831
Time deposits 135,749 4,836 101,354 3,099
Other borrowings 43,453 1,771 22,577 851
Federal funds purchased 1,408 60 305 13
Long-term debt 11,839 685 8,248 542
--------- --------- --------- ---------
Total interest
bearing
liabilities 374,818 10,377 295,990 6,336
--------- --------- --------- ---------
Demand deposits 137,706 147,908
Other liabilities 6,525 4,178
--------- ---------
Total shareholders'
equity 52,081 46,843
--------- ---------
Total liabilities and
shareholders'
equity $ 571,130 $ 494,919
========= =========
Yield on investments 4.45% 4.34%
Yield on federal
funds sold 5.10% 4.82%
Yield on loans 8.60% 8.44%
Yield on interest
earning assets 8.18% 7.92%
Rate on deposits 2.31% 1.60%
Rate on borrowings 5.93% 6.04%
Rate on long-term debt 7.74% 8.79%
Rate on interest-bearing
liabilities 3.70% 2.86%
Cost of funds 2.71% 1.91%
Average equity to
average assets 9.12% 9.46%
Net interest margin 5.53% 6.02%