PASO ROBLES, Calif., Jan. 23, 2008 (PRIME NEWSWIRE) -- Heritage Oaks Bancorp (Nasdaq:HEOP), the parent company of Heritage Oaks Bank, today reported preliminary financial results for 2007. Substantial loan and deposit growth, both organic and through its acquisition of Business First National Bank of Santa Barbara, contributed to record profits for the year ended December 31, 2007. In 2007, the company earned $6.9 million, or $1.00 per diluted share, compared to $6.6 million, or $1.01 per diluted share, in 2006. For the fourth quarter of 2007 net income increased 20% to $2.0 million, or $0.26 per diluted share, compared to $1.6 million, or $0.25 per diluted share, in the fourth quarter of 2006.
On October 12, 2007, 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. The company issued 850,213 new shares in conjunction with this acquisition, adding two full-service branches, $133 million in deposits and $124 million in loans. 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.
"Completing our acquisition of Business First National Bank of Santa Barbara in the fourth quarter enabled us to expand our branch network into a larger and more affluent market and added a complementary mix of loans and deposits to our balance sheet," stated Lawrence P. Ward, President and CEO. "With excellent asset quality and a well diversified portfolio of commercial loans, we are continuing to build a strong platform for growth in the attractive Central Coast markets."
2007 Highlights:
* Net income increased 4% to $6.9 million, or $1.00 per diluted share. * Asset quality remained strong, with non-performing assets equaling just 0.05% of total assets. * Core deposits increased by 46% over a year ago, and represent 88% of total deposits. * Gross loans increased 38% to $613 million. * Return on average equity was 12.4% and return on average assets was 1.14%. * Net interest margin was 5.47%.
Balance Sheet
Loans
The following table illustrates Loan Growth excluding the Business First Division:
Variance vs.
Excludes Business First Heritage 2006
Bank Account Type 12/31/07 12/31/06 $ %
--------------------- -------------------
Commercial, financial and
agricultural $ 94,968 $ 84,976 $ 9,992 11.76%
Real estate - construction 110,073 105,712 $ 4,361 4.13%
Real estate - commercial 242,193 237,401 $ 4,792 2.02%
Home equity lines of credit 9,167 10,792 $ (1,625) -15.06%
Installment loans to
individuals 5,040 5,598 $ (558) -9.96%
All other loans (including
overdrafts) 455 504 $ (49) -9.73%
--------- --------- --------- -------
Total Gross Loans $ 461,896 $ 444,983 $ 16,913 3.80%
========= ========= ========= =======
The following Table illustrates Loan Growth including the Business First Division:
Variance vs.
Includes Business First Total 2006
Bank Account Type 12/31/07 12/31/06 $ %
--------------------- -------------------
Commercial, financial and
agricultural $ 146,080 $ 84,976 $ 61,104 71.91%
Real estate - construction 118,200 105,712 $ 12,488 11.81%
Real estate - commercial 322,928 237,401 $ 85,527 36.03%
Home equity lines of credit 17,470 10,792 $ 6,678 61.88%
Installment loans to
individuals 7,977 5,598 $ 2,379 42.50%
All other loans (including
overdrafts) 562 504 $ 58 11.55%
--------- --------- --------- -------
Total Gross Loans $ 613,217 $ 444,983 $ 168,234 37.81%
========= ========= ========= =======
"The loans added from Business First are primarily Real Estate loans, all of which have undergone a thorough underwriting by our lenders to make sure they conform to our standards," said Ward. "These loans, along with our internally generated loans, combined to increase the Real Estate (other) loans in our portfolio by 36%." Net loans grew 38% to $605 million at December 31, 2007, from $439 million a year earlier. Of the total growth in loans 34% came from the Business First acquisition and 4% came from organic growth.
The following tables provide a break-down of the Bank's Construction / Land and Commercial Real Estate loan portfolios as of December 31, 2007:
Construction / Land:
----------------------------------------------------------------------
Single
Single Family
Family Residences Owner
Residences - Spec. Tract Land Other Occupied Hospitality
----------------------------------------------------------------------
10% 11% 1% 26% 26% 12% 14%
----------------------------------------------------------------------
Commercial Real Estate:
----------------------------------------------------------------------
Commercial/ Multi- Farm
Industrial Retail Professional Hospitality Family Land Other
----------------------------------------------------------------------
21% 17% 21% 18% 4% 4% 15%
----------------------------------------------------------------------
Deposits
"Building core deposits to fund our loan growth will continue to be a focal point for us in 2008," said Ward. "Last year we implemented a strategy of funding our increased loan demand through a new variable interest rate money market account. We also used this new account to help replace higher cost borrowings. Consequently, savings, NOW and money market balances more than doubled and total deposits increased 53% since the end of December 2006. Of that deposit growth, 29% came from the Business First acquisition and 24% came from internal growth. Additionally, these deposits vary with market rate changes, and are thus, a much more complementary funding source for our primarily floating rate loan portfolio." Total deposits grew 53% to $645 million at the end of 2007, compared to $421 million at the end of 2006 and total assets increased 38% to a record $746 million at year-end, compared to $542 million a year earlier.
The following table illustrates Deposit Growth excluding the Business First Division:
Excludes Business First Variance vs.
Bank Account Type Heritage 2006
12/31/07 12/31/06 $ %
--------------------- -------------------
Demand Deposits $ 123,392 $ 153,005 $ (29,613) -19.35%
Interest Checking 57,369 45,164 $ 12,205 27.02%
Savings 18,830 23,406 $ (4,576) -19.55%
Money Market 180,077 77,540 $ 102,537 132.24%
Time Deposits 141,515 121,406 $ 20,109 16.56%
--------- --------- --------- -------
Total Deposits $ 521,184 $ 420,521 $ 100,663 23.94%
========= ========= ========= =======
The following Table illustrates Deposit Growth including the Business First Division:
Variance vs.
Includes Business First Total 2006
Bank Account Type 12/31/07 12/31/06 $ %
--------------------- -------------------
Demand Deposits $ 153,684 $ 153,005 $ 679 0.44%
Interest Checking 69,558 45,164 $ 24,394 54.01%
Savings 41,599 23,406 $ 18,193 77.73%
Money Market 206,754 77,540 $ 129,214 166.64%
Time Deposits 173,214 121,406 $ 51,808 42.67%
--------- --------- --------- -------
Total Deposits $ 644,808 $ 420,521 $ 224,287 53.34%
========= ========= ========= =======
Due to the significant deposit growth, Heritage Oaks reduced its Federal Home Loan Bank (FHLB) borrowings by $42 million in 2007. "We believe that we saved approximately 20-30 basis points by replacing FHLB borrowings with relationship core deposits," Ward noted. On September 20, 2007, the company issued $5.0 million in trust preferred securities. The Company is using the funds for general corporate purposes, including the acquisition of Business First.
Asset Quality
Asset quality remains strong with non-performing assets totaling only $338,000, or 0.05% of total assets at year-end. Three months earlier, Heritage Oaks' non-performing assets totaled $641,000, or 0.11% of total assets. Despite the strong asset quality, Heritage Oaks has increased its allowance for loan losses to $6.1 million, or 1.00% of total loans at year-end compared to $4.1 million or 0.92% of total loans at December 31, 2006. "Our non-performing loans consist of four loans, of which, one for approximately $260 thousand that is real estate secured has a Loan To Value (LTV) of approximately less than 65% and is current, two loans that are less than $20 thousand each and are paying as agreed, and one less than $50 thousand that is in the process of collection. We are closely monitoring all delinquent loans, reviewing them weekly and do not anticipate at this time any significant increase in non-performing loans. As a business bank, we do not hold any residential mortgages in our portfolio and have no direct exposure to the subprime mortgage situation. We are keeping a close eye on all our lending relationships, and frequently review our loan portfolio to maintain strong asset quality," added Ward.
Operating Results
"Although our net interest margin contracted as a result of our acquisition of Business First, the decline was not as significant as we thought it would be," Ward said. "Core deposit growth, generated by the success of our program to increase money market account balances contributed to keeping our margin above peer levels." In 2007, the net interest margin was 5.47% compared to 5.94% in 2006. For the fourth quarter, the net interest margin was 5.33% compared to 5.44% in the previous quarter and 5.72% in the fourth quarter a year ago.
Total revenues, consisting of net interest income before the provision for loan losses and non-interest income, increased 12% to $35.8 million in 2007 compared to $32.0 million a year ago. For the year, approximately 4% of the revenue increase was the result of the acquisition of Business First. Fourth quarter revenues grew 24% to $10.2 million from $8.3 million in the same quarter of 2006. For the quarter, approximately 15% of the revenue increase was the result of the acquisition of Business First. Net interest income increased 12% to $30.4 million in 2007 compared to $27.1 million in 2006. In the fourth quarter, net interest income increased 26% to $8.8 million, from $7.0 million a year ago. Interest and fees on loans increased 31% for the fourth quarter and 25% for the year compared to last year while interest expense increased by 47% and 58% for that same 3 month and 12 month time frame.
Non-interest income was $5.3 million in 2007, compared to $5.0 million in 2006. A recovery of approximately $200,000 from a 2001 operational loss is included in other non-interest income during the fourth quarter of 2006. For the fourth quarter of 2007, non-interest income increased 11% to $1.4 million, compared to $1.3 million in the fourth quarter of 2006.
Total non-interest expense increased 14% to $23.9 million in 2007, from $21.0 million in 2006. In the fourth quarter, non-interest expenses were $6.9 million compared to $5.5 million in the fourth quarter a year ago. "Our increase in salary and employee benefits and the increased occupancy costs are directly a result of our larger organization due to both the acquisition of Business First and our organic growth in 2007," said Ward. "Additionally, our occupancy expense increased in the second half of 2007 due to a sale leaseback transaction that was finalized in June 2007. The offset to this additional expense is an increase in interest income resulting from the investment of the funds we received by selling the properties."
The provision for income tax was approximately 200 basis points higher at 38.26 % in 2007 compared to 36.27 % in 2006. The amount of the tax provision is determined by applying the Company's statutory income tax rates to pre-tax book income, adjusted for permanent differences between pre-tax book income and actual taxable income. Such permanent differences include but are not limited to tax-exempt interest income, and increases in the cash surrender value of bank-owned life insurance.
Performance Measures
Return on average assets was 1.11% in the fourth quarter and 1.14% for the year, compared to 1.23% and 1.32% for the respective periods in 2006. Return on average equity was 11.7% for the fourth quarter of 2007 and 12.4% for the year, compared to 13.5% and 14.1% in their respective periods in 2006.
The efficiency ratio was 67.3% in the fourth quarter of 2007 compared to 66.9% in the previous quarter and 67.1% in the fourth quarter a year ago. For all of 2007, the efficiency ratio was 66.8% compared to 65.5% in 2006. The efficiency ratio measures operating expenses as a percent of revenues.
Shareholders' equity increased 40% to $69.5 million compared to $49.5 million a year ago. Book value per share was $9.49 at December 31, 2007, compared to $7.80 per share a year earlier. Tangible book value per share was $7.32 at December 31, 2007, compared to $6.84 a year earlier.
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) (unaudited) (audited) Percentage Change vs.
-------------------------------- --------------------
12/31/07 9/30/07 12/31/06 9/30/07 12/31/06
-------------------------------- --------------------
Assets
Cash and due
from banks $ 23,254 $ 20,316 $ 19,164 14.5% 21.3%
Federal funds
sold 23,165 14,260 3,870 62.4% 498.6%
-------- -------- -------- ----- -----
Total cash
and cash
equivalents 46,419 34,576 23,034 34.3% 101.5%
-------- -------- -------- ----- -----
Interest bearing
deposits with
other banks 330 1,718 318 -80.8% 3.8%
Securities
available for
sale 47,556 34,854 38,445 36.4% 23.7%
Federal Home
Loan Bank Stock,
at cost 3,045 2,171 2,350 40.3% 29.6%
Loans held for
sale 902 902 1,764 0.0% -48.9%
Loans, net (1) 605,342 468,966 439,277 29.1% 37.8%
Property,
premises and
equipment 6,390 5,017 14,581 27.4% -56.2%
Cash surrender
value of life
insurance 9,923 9,716 9,435 2.1% 5.2%
Deferred tax
assets 5,084 4,964 2,414 2.4% 110.6%
Goodwill 11,117 4,865 4,865 128.5% 128.5%
Core deposit
intangible 4,551 883 1,148 415.4% 296.4%
Other assets 4,895 4,058 4,143 20.6% 18.2%
-------- -------- -------- ----- -----
Total assets $745,554 $572,690 $541,774 30.2% 37.6%
======== ======== ======== ===== =====
Liabilities
Deposits:
Non-interest
bearing
demand $153,684 $130,221 $153,005 18.0% 0.4%
Savings, NOW,
and money
market 317,911 215,576 146,110 47.5% 117.6%
Time deposits
of $100K or
more 75,966 50,666 30,630 49.9% 148.0%
Time deposits
under $100K 97,247 99,847 90,776 -2.6% 7.1%
-------- -------- -------- ----- -----
Total deposits 644,808 496,310 420,521 29.9% 53.3%
-------- -------- -------- ----- -----
FHLB advances
and other
borrowings 8,000 -- 50,000 -- -84.0%
Securities sold
under agreements
to repurchase 1,936 1,464 1,364 32.2% 41.9%
Junior sub-
ordinated
debentures 13,403 13,403 16,496 0.0% -18.8%
Other
liabilities 7,957 7,663 3,921 3.8% 102.9%
-------- -------- -------- ----- -----
Total
liabilities 676,104 518,840 492,302 30.3% 37.3%
-------- -------- -------- ----- -----
Stockholders'
equity
Common stock,
no par value;
20,000,000
shares
authorized;
issued and
outstanding
7,317,932;
6,469,653; and
6,345,639 for
Dec. 31, 2007;
Sept. 30, 2007
and Dec. 31,
2006 re-
spectively 43,996 29,976 29,247 46.8% 50.4%
Additional paid
in capital 672 600 336 12.0% 100.0%
Retained
earnings 24,598 23,205 19,809 6.0% 24.2%
Accumulated
other com-
prehensive
income 184 69 80 166.7% 130.0%
-------- -------- -------- ----- -----
Total stock-
holders'
equity 69,450 53,850 49,472 29.0% 40.4%
-------- -------- -------- ----- -----
Total liabili-
ties and
stockholders'
equity $745,554 $572,690 $541,774 30.2% 37.6%
======== ======== ======== ===== =====
(1) Loans are net of deferred loan fees of $1,732; $1,941; $1,625
and allowance for loan losses of $6,143; $4,720; $4,081. for
December 31, 2007, September 30, 2007, and December 31, 2006
respectively.
Heritage Oaks Bancorp
Consolidated Statements of Income
(dollars in thousands except share data)
(unaudited)
For the Three Months Ended Percentage Change Vs.
----------------------------- --------------------
12/31/07 9/30/07 12/31/06 9/30/07 12/31/06
----------------------------- --------------------
Interest Income:
Interest and
fees on loans $12,337 $10,058 $ 9,423 22.7% 30.9%
Investment
securities 609 426 426 43.0% 43.0%
Federal funds
sold and
commercial
paper 208 385 35 -46.0% 494.3%
Time certificates
of deposit 1 1 48 0.0% -97.9%
------- ------- ------- ----- -----
Total interest
income 13,155 10,870 9,932 21.0% 32.5%
------- ------- ------- ----- -----
Interest Expense:
NOW accounts 135 55 20 145.5% 575.0%
MMDA accounts 1,582 1,216 622 30.1% 154.3%
Savings accounts 169 21 24 704.8% 604.2%
Time deposits
of $100K or
more 926 610 199 51.8% 365.3%
Other time
deposits 1,198 1,229 1,174 -2.5% 2.0%
Other borrowed
funds 364 411 942 -11.4% -61.4%
------- ------- ------- ----- -----
Total interest
expense 4,374 3,542 2,981 23.5% 46.7%
------- ------- ------- ----- -----
Net interest
income before
provision for
loan losses 8,781 7,328 6,951 19.8% 26.3%
Provision for
loan losses 140 210 120 -33.3% 16.7%
------- ------- ------- ----- -----
Net interest
income after
provision for
loan losses 8,641 7,118 6,831 21.4% 26.5%
------- ------- ------- ----- -----
Non Interest
Income:
Service charges
on deposit
accounts 829 645 581 28.5% 42.7%
Other income 610 664 720 -8.1% -15.3%
------- ------- ------- ----- -----
Total non-
interest income 1,439 1,309 1,301 9.9% 10.6%
------- ------- ------- ----- -----
Non-Interest
Expense:
Salaries and
employee
benefits 3,819 3,238 3,039 17.9% 25.7%
Occupancy and
equipment 1,130 830 706 36.1% 60.1%
Other expenses 1,925 1,709 1,794 12.6% 7.3%
------- ------- ------- ----- -----
Total non-
interest
expenses 6,874 5,777 5,539 19.0% 24.1%
------- ------- ------- ----- -----
Income before
provision for
income taxes 3,206 2,650 2,593 21.0% 23.6%
Provision for
income taxes 1,228 1,022 944 20.2% 30.1%
------- ------- ------- ----- -----
Net Income $ 1,978 $ 1,628 $ 1,649 21.5% 20.0%
======= ======= ======= ===== =====
Average basic
shares
outstanding 7,316,866 6,472,653 6,355,466
Average diluted
shares
outstanding 7,511,625 6,679,114 6,598,355
Basic earnings
per share $ 0.27 $ 0.25 $ 0.26
Fully diluted
earnings per
share $ 0.26 $ 0.24 $ 0.25
Heritage Oaks Bancorp
Consolidated Statements of Income
(dollars in thousands except share data)
(unaudited) Percent Change
For the Years Ended 12/31/07 12/31/06
------------------------------ vs. vs.
12/31/07 12/31/06 12/31/05 12/31/06 12/31/05
------------------------------ -------- --------
Interest Income:
Interest and fees
on loans $42,425 $33,897 $27,399 25.2% 23.7%
Investment
securities 1,956 1,927 2,100 1.5% -8.2%
Federal funds
sold and
commercial paper 785 539 667 45.6% -19.2%
Time certificates
of deposit 8 9 9 -11.1% 0.0%
------- ------- ------- ------ ------
Total interest
income 45,174 36,372 30,175 24.2% 20.5%
------- ------- ------- ------ ------
Interest Expense:
NOW accounts 262 86 89 204.7% -3.4%
MMDA accounts 4,411 2,309 1,504 91.0% 53.5%
Savings accounts 238 102 102 133.3% 0.0%
Time deposits of
$100K or more 2,046 626 413 226.8% 51.6%
Other time
deposits 4,914 3,845 1,371 27.8% 180.5%
Other borrowed
funds 2,880 2,348 1,537 22.7% 52.8%
------- ------- ------- ------ ------
Total interest
expense 14,751 9,316 5,016 58.3% 85.7%
------- ------- ------- ------ ------
Net interest
income before
provision for
loan losses 30,423 27,056 25,159 12.4% 7.5%
Provision for
loan losses 660 600 710 10.0% -15.5%
------- ------- ------- ------ ------
Net interest
income after
provision for
loan losses 29,763 26,456 24,449 12.5% 8.2%
------- ------- ------- ------ ------
Non Interest
Income:
Service charges
on deposit
accounts 2,774 2,427 2,430 14.3% -0.1%
Other income 2,575 2,525 2,579 2.0% -2.1%
------- ------- ------- ------ ------
Total non-interest
income 5,349 4,952 5,009 8.0% -1.1%
------- ------- ------- ------ ------
Non-Interest
Expense:
Salaries and
employee
benefits 13,501 11,573 9,746 16.7% 18.7%
Occupancy and
equipment 3,381 2,607 2,491 29.7% 4.7%
Other expenses 7,026 6,775 6,481 3.7% 4.5%
------- ------- ------- ------ ------
Total non-interest
expenses 23,908 20,955 18,718 14.1% 12.0%
------- ------- ------- ------ ------
Income before
provision for
income taxes 11,204 10,453 10,740 7.2% -2.7%
Provision for
income taxes 4,287 3,791 4,103 13.1% -7.6%
------- ------- ------- ------ ------
Net Income $ 6,917 $ 6,662 $ 6,637 3.8% 0.4%
======= ======= ======= ====== ======
Average basic
shares out-
standing 6,651,594 6,333,924 6,167,937
Average diluted
shares out-
standing 6,884,575 6,595,793 6,551,389
Basic earnings
per share $ 1.04 $ 1.05 $ 1.08
Fully diluted
earnings per
share $ 1.00 $ 1.01 $ 1.01
Additional Financial Information
(dollars in thousands)
Percentage
For the Quarters Ended Change vs.
----------------------------- ----------------
12/31/07 9/30/07 12/31/06 9/30/07 12/31/06
-------- -------- -------- ----------------
LOANS
Commercial,
financial and
agricultural $146,080 $101,748 $ 84,976 43.6% 71.9%
Real estate -
construction/land 118,200 105,054 105,712 12.5% 11.8%
Real estate - other 322,928 253,860 237,401 27.2% 36.0%
Home equity lines
of credit 17,470 8,897 10,792 96.4% 61.9%
Installment loans
to individuals 7,977 5,580 5,598 43.0% 42.5%
All other loans
(including overdrafts) 562 488 504 15.2% 11.5%
-------- -------- -------- ---------------
Total gross loans $613,217 $475,627 $444,983 28.9% 37.8%
======== ======== ======== ===============
Loans held for sale $ 902 $ 902 $ 1,764 0.0% -48.9%
ALLOWANCE FOR LOAN
LOSSES
Balance, beginning
of period $ 4,720 $ 4,520 $ 3,863 4.4% 22.2%
Provision expense 140 210 120 -33.3% 16.7%
Credit losses charged
against allowance (213) (16) (42) 1231.3% 407.1%
Recoveries of loans
previously charged
off 115 6 140 1816.7% -17.9%
Credit from purchase
of Business First
Bank 1,381 -- -- -- --
-------- -------- -------- ---------------
Balance, end of
period $ 6,143 $ 4,720 $ 4,081 30.1% 50.5%
======== ======== ======== ===============
Net (charge-offs)/
recoveries $ (98) $ (10) $ 98 880.0% -200.0%
Net charge-offs/
average loans
outstanding 0.02% 0.00% -0.02% 681.3% --
Allowance for loan
losses/total loans
outstanding 1.00% 0.99% 0.92% 0.9% 9.2%
NON-PERFORMING ASSETS
Loans on non-accrual
status $ 338 $ 641 $ 55 -47.3% 514.5%
Loans more than 90
days delinquent,
still accruing -- -- -- -- --
-------- -------- -------- ---------------
Total non-per-
forming loans 338 641 55 -47.3% 514.5%
-------- -------- -------- ---------------
Other real estate
owned (OREO)/re-
possessed assets -- -- -- -- --
-------- -------- -------- ---------------
Total non-per-
forming assets $ 338 $ 641 $ 55 -47.3% 514.5%
======== ======== ======== ===============
Total non-performing
assets to total
assets 0.05% 0.11% 0.01% -59.5% 346.6%
DEPOSITS
Non-interest bearing
demand $153,684 $130,221 $153,005 18.0% 0.4%
-------- -------- -------- ---------------
Interest-bearing
demand 69,558 56,931 45,164 22.2% 54.0%
Regular savings
accounts 41,599 21,606 23,406 92.5% 77.7%
Money market accounts 206,754 137,039 77,540 50.9% 166.6%
-------- -------- -------- ---------------
Total interest-
bearing transaction
and savings
accounts 317,911 215,576 146,110 47.5% 117.6%
-------- -------- -------- ---------------
Time deposits under
$100 thousand 97,247 99,847 90,776 -2.6% 7.1%
Time deposits of
$100 thousand or
more 75,966 50,666 30,630 49.9% 148.0%
-------- -------- -------- ---------------
Total time deposits 173,213 150,513 121,406 15.1% 42.7%
-------- -------- -------- ---------------
Total deposits $644,808 $496,310 $420,521 29.9% 53.3%
======== ======== ======== ===============
For the
For the Three Months Ended Twelve Months Ended
------------------------------ --------------------
12/31/07 9/30/07 12/31/06 12/31/07 12/31/06
------------------------------ --------------------
PROFITABILITY/
PERFORMANCE
RATIOS
Operating
efficiency 67.26% 66.89% 67.12% 66.83% 65.47%
Return on average
equity 11.65% 12.09% 13.53% 12.37% 14.10%
Return on average
tangible equity 14.51% 13.54% 15.46% 14.36% 16.22%
Return on average
assets 1.11% 1.12% 1.23% 1.14% 1.32%
Other operating
income to average
assets 0.80% 0.90% 0.97% 0.88% 0.98%
Other operating
expense to average
assets 3.84% 3.97% 4.14% 3.95% 4.16%
Net interest
income to average
assets 4.91% 5.04% 5.20% 5.02% 5.37%
Non-interest
income to total
net revenue 14.08% 15.16% 15.77% 14.95% 15.47%
ASSET QUALITY AND
CAPITAL RATIOS
Non-performing
loans to total
gross loans 0.06% 0.13% 0.01%
Non-performing
loans as a %
of ALLL 5.50% 13.58% 1.35%
Non-performing
loans to primary
capital 0.49% 1.19% 0.11%
Leverage ratio 9.60% 10.69% 11.00%
Tier I Risk-Based
Capital Ratio 10.08% 11.65% 11.51%
Total Risk-Based
Capital Ratio 11.03% 12.58% 12.36%
AVERAGE BALANCES
AND RATES
(dollars in thousands)
Average
Investments $ 50,525 $ 38,166 $ 41,981 $ 42,619 $ 44,089
Average federal
funds sold 18,137 29,447 2,534 15,878 11,179
Average loans 585,484 466,749 437,623 497,374 400,229
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Average earning
assets 654,146 534,362 482,138 555,871 455,497
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Average non-
earning assets 61,090 46,858 52,629 54,649 52,311
Allowance for
loan losses (5,932) (4,600) (3,938) (4,784) (3,931)
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Average assets 709,304 576,620 530,829 605,736 503,877
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Average non-
interest bearing
demand deposits 151,483 133,432 142,582 141,123 146,458
Average interest
bearing deposits 458,143 353,845 274,081 353,249 267,183
Average borrowings 23,634 26,804 60,638 48,363 38,568
Average non-
interest bearing
liabilities 8,701 9,098 5,186 7,074 4,432
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Average
liabilities 641,961 523,179 482,487 549,809 456,641
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Average equity 67,343 53,441 48,342 55,927 47,236
-------- -------- -------- -------- --------
Average
liabilities
and equity $709,304 $576,620 $530,829 $605,736 $503,877
======== ======== ======== ======== ========
Interest rate
yield on loans 8.36% 8.55% 8.54% 8.53% 8.47%
Interest rate yield
on investments 4.79% 4.44% 4.48% 4.61% 4.39%
Interest rate
yield on federal
funds sold 4.55% 5.19% 5.48% 4.94% 4.82%
Interest rate
yield on interest-
earning assets 7.98% 8.07% 8.17% 8.13% 7.99%
Interest rate
expense on
deposits 2.61% 2.55% 1.94% 2.40% 1.68%
Interest rate
expense on other
borrowings 6.11% 6.08% 6.16% 5.95% 6.09%
Interest rate
expense on
interest-bearing
liabilities 3.60% 3.69% 3.53% 3.67% 3.05%
Average equity to
average assets 9.49% 9.27% 9.11% 9.23% 9.37%
Net interest margin 5.33% 5.44% 5.72% 5.47% 5.94%