MACON, Ga., Jan. 24, 2008 (PRIME NEWSWIRE) -- Security Bank Corporation (Nasdaq:SBKC) today reported a quarterly net loss of $6.9 million for the fourth quarter ended December 31, 2007, versus net income of $5.2 million for the fourth quarter of 2006. Diluted earnings per share for the fourth quarter of 2007 were a loss of $0.36 compared to earnings per share of $0.26 for the comparable year ago period. The decrease in diluted earnings per share is primarily attributable to an $18 million increase in the provision for loan losses versus the fourth quarter a year ago. For the year ended December 31, 2007 net income decreased to $6.6 million compared to $23.4 million a year ago and on a diluted per share basis decreased to $0.34 versus $1.33 for the comparable year ago period.
Security Bank's return on average tangible equity and average assets for the twelve months ended December 31, 2007 were 3.63% and 0.25% respectively, versus 16.53% and 1.15% for the same period in 2006. Tangible book value increased 3% to $9.28 per share at December 31, 2007 compared to $8.99 a year ago. Tangible equity to tangible assets was 6.5% at December 31, 2007 versus 7.4% at December 31, 2006 and all bank subsidiaries were "well-capitalized" as defined by regulatory standards at year-end 2007.
Asset Quality
During the fourth quarter of 2007, nonperforming assets ("NPAs" or nonaccrual loans and other real estate owned) increased to $79 million, or 3.58% of total loans plus other real estate owned compared to 2.99% and 1.95% at the end of the third quarter of 2007 and the fourth quarter of 2006, respectively. While Security Bank did sell $8 million of other real estate owned during the quarter, new properties totaling approximately $13 million were moved to other real estate owned. Nonaccrual loans increased by $10 million to $51 million during the fourth quarter. In addition, the Company charged off approximately $15 million (net) in loans receivable resulting in net charge-offs to average loans of 2.79% annualized for the fourth quarter of 2007. Net charge-offs to average loans were 0.22% annualized for the fourth quarter of 2006. For the year ended December 31, 2007, net charge-offs to average loans were 1.12%. Security Bank increased its allowance for loan losses to $31.7 million, or 1.45% of loans receivable at December 31, 2007, up from $22.3 million at December 31, 2006.
Rett Walker, Security Bank Corporation President and CEO, remarked, "It's been another difficult quarter in terms of overall credit market conditions and the continued downturn in the Atlanta residential real estate construction and development market. Given the uncertainty about the timing of the recovery of the Atlanta real estate market, we expect that NPAs will continue to be elevated in 2008. We intend to prudently limit our growth in 2008 with minimal loan growth, no additional branch openings, and no anticipated acquisitions. All of our efforts near term will be focused on controlling our NPAs and keeping our banks well capitalized. As part of our capital strategy we have recently updated our shelf registration statement to give us flexibility to take advantage of favorable opportunities to raise capital through the issuance of a variety of securities."
Balance Sheet
Loans receivable were approximately $2.2 billion at December 31, 2007, up from roughly $1.9 billion at December 31, 2006, an increase of 15%. On a sequential basis loans increased by roughly $17 million or approximately 3% on an annualized basis with all of the growth occurring in our Middle and Coastal Georgia markets.
Total deposits were roughly $2.3 billion at December 31, 2007, an increase of approximately 17% from $2.0 billion at December 31, 2006. Total assets increased roughly 14% to $2.8 billion at December 31, 2007, compared to approximately $2.5 billion at December 31, 2006.
Shareholders' equity at December 31, 2007 was roughly unchanged at $306.7 million compared to December 31, 2006, as earnings, net of dividends paid and changes in other comprehensive income, were offset by $4.9 million in reduced equity as a result of shares purchased during the year under a share repurchase program.
Net Interest Income
Net interest income for the fourth quarter of 2007 was $21.6 million, a decrease of 2% when compared to the fourth quarter of 2006. The decrease is primarily the result of a decline in the net interest margin. The net interest margin (on a fully tax-equivalent basis ("FTE")) was 3.46% for the quarter ended December 31, 2007, compared to 4.14% for the comparable period one year ago and 3.81% for the third quarter of 2007. The decrease in the net interest margin in the fourth quarter of 2007 as compared to the third quarter of 2007 is the result of the increase in NPAs and the negative effect of very competitive loan pricing in the form of rate and fees. For year ended December 31, 2007, the net interest margin (FTE) was 3.88% compared to 4.40% for the year ended December 31, 2006.
Noninterest Income and Expense
Noninterest income for the fourth quarter of 2007 was unchanged at $3.1 million compared to the fourth quarter of 2006. An increase in the loss on sale of other real estate owned of $1.5 million was offset by a decline in losses on securities sales of $1.3 million.
Noninterest expense for the fourth quarter of 2007 was $16.2 million, an increase of $l.5 million, or 10% over the fourth quarter 2006 level of $14.7 million. The increase is primarily attributable to a $1.2 million increase in other noninterest expense associated primarily with foreclosure expenses from higher levels of nonperforming assets.
2008 Guidance
Beginning with fiscal year 2008, management will no longer issue annual earnings per share guidance. Management will, however, continue to give guidance on certain metrics that impact earnings, specifically loan growth, net interest margin, provision for loan losses, net charge offs and noninterest expenses. Management's current outlook for 2008 assumes the following:
* A continued difficult credit environment for the company for the first half of 2008, tempered by current market research that suggests improvement in the second half of the year. * Higher NPAs and net charge-offs for 2008, with charge-off levels as much as double our 2007 level, and commensurate increases in provision expense. * Continued margin pressure, given recent and anticipated interest rate reductions by the Federal Reserve, along with elevated levels of NPAs and related interest reversals. * A reduction in projected loan growth for 2008 to 0%-3%. * Noninterest expense levels to be reduced 2%-4% versus 2007.
Other Information
Security Bank Corporation management will host a conference call to discuss these results at 2:00 p.m. Eastern Standard Time on Thursday, January 24, 2008. This call is open to all interested parties. From locations within the United States the call-in number is 800.860.2442 (412.858.4600 from outside the United States). Please call in 10 minutes prior to the beginning of the conference call and ask for Security Bank Corporation.
A recorded playback of the conference call will be available by calling 877.344.7529, or 412.317.0088 from outside the United States, from approximately 4:00 p.m. EST, Thursday, January 24, until 11:59 p.m. EST Thursday, January 31, 2008. The passcode for this playback is 415163#.
This press release, including the attached selected unaudited financial tables, which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are "tangible book value," "tangible equity to tangible assets" and "return on average tangible equity." Security Bank's management uses these non-GAAP measures in its analysis of Security Bank's performance.
Tangible book value is defined as total equity reduced by recorded intangible assets, net of related deferred tax benefits. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Security Bank that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Tangible equity to tangible assets is the ratio of tangible equity defined as total equity reduced by recorded intangible assets, net of related deferred tax benefits, to tangible assets defined as total assets reduced by recorded intangible assets, net of related deferred tax benefits. Tangible equity to tangible assets is an important measure of Security Bank's capital strength without the effects of purchase accounting as noted above. Return on average tangible equity is defined as earnings for the period (annualized for the quarterly period or year-to-date period, as applicable) divided by average equity reduced by average goodwill and other intangible assets, net of related deferred tax benefits. Security Bank's management includes this measure because it believes that it is important when measuring the Company's performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and many investors use this measure as part of their analysis of Security Bank.
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. Please refer to the "Reconciliation Table" in the attached schedules for a more detailed analysis of these non-GAAP measures and the most directly comparable GAAP measures.
About Security Bank Corporation
Based in Macon, Georgia, Security Bank Corporation is a multi-bank holding company with assets of $2.8 billion at December 31, 2007. Security Bank Corporation operates six community banks with banking offices located throughout middle Georgia, coastal Georgia and north metropolitan Atlanta. In addition, Security Bank Corporation operates an investment management and planning firm, CFS Wealth Management, LLC, in addition to operating its interim real estate and development lender and traditional mortgage originator, Fairfield Financial Services, Inc., with offices throughout Georgia.
Security Bank Corporation common stock is traded on the NASDAQ Global Select Market under the ticker symbol "SBKC". You may obtain copies of all documents that Security Bank files with the Securities and Exchange Commission, free of charge, at the SEC's website at www.sec.gov. In addition, copies of these documents may also be obtained from us without charge by directing a written request to Security Bank Corporation, 4219 Forsyth Road, Macon, Georgia 31210, attention: Investor Relations.
Safe Harbor
This press release contains forward-looking statements as defined by federal securities laws, including statements about Security Bank's loan loss provisions, net charge-offs, non-performing assets net interest margin changes, the overall economic cycle and its impact on real estate values in Security Bank's markets, loan growth, introduction and success of new products and Security Bank's long-term prospects, among others. Statements contained in this press release that are not historical facts are forward looking statements. Forward-looking statements may address issues involving significant risks, uncertainties, estimates and assumptions made by management. Security Bank's ability to accurately project results or predict the effects of future plans or strategies is inherently limited. Although Security Bank believes that the expectations and estimates reflected in its forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Please refer to Security Bank Corporation's public filings with the Securities and Exchange Commission for a summary of important factors that could affect Security Bank Corporation's financial results and operations and its forward-looking statements. Security Bank Corporation does not intend to and assumes no responsibility, except as required by law, for updating or revising any forward-looking statements contained in this press release, whether as a result of new information, changes in assumptions, future events or otherwise.
Security Bank Corporation Selected Consolidated Financial Data (Dollars in Thousands, except Per Share Amounts) Unaudited Quarters Ended Year Ended December 31, December 31, 2007 2006 % Change 2007 2006 % Change ---- ---- -------- ---- ---- -------- EARNINGS SUMMARY: Net interest income $ 21,583 $ 22,062 -2.2% 90,524 $79,434 14.0% Provision for Loan Losses 20,000 1,873 967.8% 32,660 4,468 631.0% Noninterest Income 3,121 3,086 1.1% 17,106 17,906 -4.5% Noninterest Expense 16,165 14,675 10.2% 65,199 55,602 17.3% Provision for Income Taxes (4,588) 3,378 -235.8% 3,183 13,878 -77.1% Net Income (6,873) 5,222 -231.6% 6,588 23,392 -71.8% PER COMMON SHARE: Basic earnings $ (0.36) $ 0.26 -238.5% $ 0.35 $ 1.36 -74.3% Diluted earnings (0.36) 0.26 -238.5% 0.34 $ 1.33 -74.4% Cash dividends declared 0.088 0.075 17.3% 0.35 0.30 16.7% Book value 16.22 15.99 1.4% 16.22 15.99 1.4% Tangible book value 9.28 8.99 3.2% 9.28 8.99 3.2% KEY PERFORMANCE RATIOS(a): Return on average tangible equity(b) -14.77% 12.19% 3.63% 16.53% Return on average assets -0.99% 0.87% 0.25% 1.15% Efficiency ratio 65.43% 58.35% 60.58% 57.12% Net interest margin (FTE) 3.46% 4.14% 3.88% 4.40% Net charge- offs to average loans 2.79% 0.22% 1.12% 0.15% BALANCE SHEET SUMMARY - END OF PERIOD Investment securities $ 305,399 $ 229,940 32.8% Loans Held for Resale 7,605 8,878 -14.3% Loans, gross 2,182,313 1,901,101 14.8% Allowance for loan losses 31,698 22,336 41.9% Total assets 2,833,071 2,494,071 13.6% Deposits 2,298,705 1,970,927 16.6% Other borrowed money 206,327 175,605 17.5% Shareholders' equity 306,693 306,408 0.1% Tangible equity to tangible assets 6.50% 7.42% -12.4% ASSET QUALITY - END OF PERIOD Nonaccrual loans $ 50,635 $ 34,401 47.2% Loans 90 Days Past Due and Accruing 242 -- 100.0% Other real estate owned 28,175 2,775 915.3% Total non- performing assets 79,052 37,176 112.6% Allowance for loan losses/ NPA's 40.10% 60.08% Allowance for loan losses/ loans 1.45% 1.18% (a) Annualized based on number of days in the period, except efficiency ratio (b) Calculation of this measure is illustrated in the attached GAAP to non-GAAP reconciliation Security Bank Corporation Average Balance Sheet and Net Interest Income Analysis (Dollars in Thousands) Unaudited Quarter Ended Year Ended December 31, 2007 December 31, 2007 Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate ------- ------- ---- ------- ------- ---- ASSETS Earning assets: Interest-bearing deposits and fed funds sold $ 26,946 $ 309 4.55% $ 35,628 $ 1,837 5.16% Investment securities 256,061 3,341 5.18% 216,610 11,338 5.23% Loans Held for Resale 5,647 105 7.38% 6,328 453 7.16% Loans 2,198,071 45,322 8.18% 2,081,999 179,562 8.62% Other earning assets 1,238 24 7.69% 1,238 95 7.67% Total earning assets 2,487,963 49,101 7.83% 2,341,803 193,285 8.25% Non-earning assets 257,124 250,144 ---------- ---------- Total assets $2,745,087 $2,591,947 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Savings and interest- bearing transaction $ 536,286 $ 4,586 3.39% $ 535,146 $ 19,138 3.58% Time deposits 1,534,788 20,302 5.25% 1,414,171 74,736 5.28% Other borrowings 180,870 2,518 5.52% 144,311 8,442 5.85% Total interest- bearing liabilities 2,251,944 27,406 4.83% 2,093,628 102,316 4.89% Noninterest- bearing liabilities: Noninterest bearing deposits 159,891 163,712 Other noninterest- bearing liabilities 17,461 21,103 Total liabilities $2,429,296 $2,278,443 ---------- ---------- Shareholders' Equity 315,791 313,504 ---------- ---------- Total liabilities and shareholders' equity $2,745,087 $2,591,947 ========== ========== Interest rate spread 3.00% 3.37% Net interest income $21,695 $ 90,969 Net interest margin (FTE) 3.46% 3.88% Security Bank Corporation (SBKC) Selected Financial Information (Amounts in thousands, except per share data) 2007 ----------------------------------------------------------- Dec. 31 4th 3rd 2nd 1st /YTD Quarter Quarter Quarter Quarter ----------------------------------------------------------- Period-End Balance Sheet ---------- Total Assets $2,833,071 $2,833,071 $2,723,986 $2,672,177 $2,541,603 Total Securities 305,399 305,399 227,694 219,185 191,945 Mortgage Loans held for Sale 7,605 7,605 8,867 9,052 8,341 Loans: Commercial: Real- Estate(4) 959,671 959,671 900,969 843,477 932,971 Construc- tion/A&D (4) 861,013 861,013 896,563 892,315 703,703 All Other 135,585 135,585 141,656 134,031 154,406 Residential: Real- Estate 158,244 158,244 155,508 152,726 152,217 Construc- tion/A&D 25,377 25,377 24,758 28,329 28,470 All Other 42,423 42,423 45,758 43,376 45,230 Total Loans 2,182,313 2,182,313 2,165,212 2,094,254 2,016,997 Allowance for loan losses 31,698 31,698 27,132 24,108 23,336 Other Assets: Other earning assets: 14,866 14,866 59,968 84,060 78,319 Total Earning Assets: 2,510,183 2,510,183 2,461,741 2,406,551 2,295,602 Intangibles: Goodwill 128,571 128,571 128,571 128,601 128,553 Core- Deposit 4,125 4,125 4,371 4,617 4,863 Deposits: Demand Deposits 158,759 158,759 161,749 171,427 176,658 Interest bearing deposits 2,139,946 2,139,946 2,029,351 1,989,651 1,842,431 Total Deposits 2,298,705 2,298,705 2,191,100 2,161,078 2,019,089 Fed Funds purchased & repo agreements 68,417 68,417 81,995 58,985 59,065 Other borrowed funds 137,910 137,910 121,388 118,888 129,888 Common Equity 306,693 306,693 312,036 314,687 311,729 ====================================================================== Average Balance Sheet -------- Total Assets $2,591,947 $2,745,087 $2,648,300 $2,529,142 $2,441,326 Total Securities 216,610 256,061 220,379 195,031 194,248 Mortgage Loans held for Sale 6,328 5,647 6,367 8,728 4,557 Loans: Commercial: Real- Estate 907,729 939,330 863,915 890,191 937,948 Construc- tion/A&D 797,692 886,581 892,021 781,274 627,003 Other 148,064 142,903 140,395 152,784 156,406 Residential: Real- Estate 153,682 156,468 154,652 152,519 151,018 Construc- tion/A&D 27,610 26,112 26,307 28,848 29,134 Other 47,222 46,677 46,322 46,657 49,355 Total Loans 2,081,999 2,198,071 2,123,612 2,052,273 1,950,864 Other Assets: Other earning assets: 36,866 28,184 33,016 34,280 52,292 Total Earning Assets: 2,341,803 2,487,963 2,383,374 2,290,312 2,201,961 Deposits: Demand Deposits 163,712 159,891 161,225 168,589 165,255 Interest bearing deposits Savings 16,005 15,104 15,513 16,810 16,612 NOW 373,522 373,274 377,448 375,605 367,657 Money Market 145,619 147,908 151,428 144,907 138,060 Time deposits greater than $100,000 892,248 1,003,681 949,323 833,758 779,136 Time deposits less than $100,000 521,923 531,107 523,421 516,844 516,137 Total Deposits 2,113,029 2,230,965 2,178,358 2,056,513 1,982,857 Fed Funds purchased & repo agreements 43,881 55,528 41,945 43,682 34,158 Other borrowed funds 100,430 125,342 92,383 92,277 91,436 Common Equity 313,504 315,791 316,060 313,877 308,691 ====================================================================== Income Statement ---------- Interest Income $ 192,840 $ 48,989 $ 49,643 $ 48,175 $ 46,033 Interest Expense 102,316 27,406 26,862 24,792 23,256 Net Interest Income 90,524 21,583 22,781 23,383 22,777 Loan loss provision 32,660 20,000 9,400 2,000 1,260 Service charges on deposit accounts 9,363 2,533 2,356 2,376 2,098 Mortgage banking revenues 4,475 995 1,170 1,271 1,039 Securities Gains (Losses) (3) -- (5) -- 2 Gains (Losses) on Foreclosed Property (1,943) (1,434) (375) (164) 30 Other income 5,214 1,027 1,114 1,120 1,953 Total non- interest income 17,106 3,121 4,260 4,603 5,122 Salaries and benefits 35,061 7,564 8,852 9,094 9,551 Occupancy and equipment 6,189 1,595 1,559 1,547 1,488 Other noninterest expense 23,949 7,006 6,308 5,756 4,879 Total non- interest expense 65,199 16,165 16,719 16,397 15,918 Pre-tax earnings 9,771 (11,461) 922 9,589 10,721 Income Taxes 3,183 (4,588) 347 3,489 3,935 Net income $ 6,588 $ (6,873) $ 575 $ 6,100 $ 6,786 Basic earnings per share $ 0.35 $ (0.36) $ 0.03 $ 0.32 $ 0.35 Diluted earnings per share 0.34 (0.36) 0.03 0.31 0.35 Operating diluted earnings per share(3) 0.34 (0.36) 0.03 0.31 0.35 End of period shares outstan- ding 18,912,264 18,912,264 18,889,227 19,212,139 19,181,241 Weighted average diluted shares o/s 19,225,069 18,958,448 19,184,272 19,463,979 19,456,857 Tax equivalent adjustment 445 112 110 112 111 Net interest income (FTE) 90,969 21,695 22,891 23,495 22,888 Effective Tax Rate 32.58% 40.03% 37.64% 36.39% 36.70% ====================================================================== Stock and related per share data: ---------- Book value $ 16.22 $ 16.22 $ 16.52 $ 16.38 $ 16.25 Tangible book value 9.28 9.28 9.57 9.54 9.39 Dividends declared per share 0.35 0.0875 0.0875 0.0875 0.0875 ====================================================================== Other Key Ratios/ Data: --------- Return on average tangible equity(2), (3) 3.63% -14.77% 1.24% 13.42% 15.78% Return on average assets(2) 0.25% -0.99% 0.09% 0.97% 1.13% Net interest margin (FTE)(2) 3.88% 3.46% 3.81% 4.11% 4.22% Efficiency ratio (FTE) 60.33% 65.14% 61.58% 58.36% 56.83% Tangible Equity/ Tangible Assets(3) 6.50% 6.50% 6.97% 7.21% 7.48% ====================================================================== Loan Performance Data: ------------ Nonaccrual loans $ 50,635 $ 50,635 $ 41,492 $ 35,450 $ 39,139 Loans 90 Days Past Due and Accruing 242 242 -- -- -- Other real estate owned (ORE) 28,175 28,175 23,891 19,229 3,403 Total non- performing assets 79,052 79,052 65,383 54,679 42,542 Net charge- offs 23,298 15,434 6,376 1,228 260 Allowance for loan losses/ NPA's 40.10% 40.10% 41.50% 44.09% 54.85% Allowance for loan losses/ loans 1.45% 1.45% 1.25% 1.15% 1.16% NPA's/Loans plus ORE 3.58% 3.58% 2.99% 2.59% 2.11% Non- performing assets/ total assets 2.79% 2.79% 2.40% 2.05% 1.67% Net charge- offs to average loans(1) 1.12% 2.79% 1.19% 0.24% 0.05% ====================================================================== 2006 ----------------------------------------------------------- Dec. 31 4th 3rd 2nd 1st /YTD Quarter Quarter Quarter Quarter ----------------------------------------------------------- Period-End Balance Sheet ---------- Total Assets $2,494,071 $2,494,071 $2,314,913 $1,974,376 $1,912,841 Total Securities 229,940 229,940 211,005 163,378 146,932 Mortgage Loans held for Sale 8,878 8,878 8,947 12,201 7,776 Loans: Commercial: Real- Estate(4) 916,919 916,919 884,417 705,072 699,215 Construc- tion/A&D (4) 602,712 602,712 553,296 460,131 430,585 All Other 152,289 152,289 125,468 115,968 103,396 Residential: Real- Estate 150,398 150,398 151,559 151,633 155,031 Construc- tion/A&D 30,262 30,262 30,332 32,057 30,376 All Other 48,521 48,521 45,892 36,102 51,089 Total Loans 1,901,101 1,901,101 1,790,964 1,500,963 1,469,692 Allowance for loan losses 22,336 22,336 21,477 18,190 17,812 Other Assets: Other earning assets: 97,808 97,808 49,612 82,265 78,567 Total Earning Assets: 2,237,727 2,237,727 2,060,528 1,758,807 1,702,967 Intangibles: Goodwill 127,984 127,984 131,162 103,014 102,659 Core- Deposit 5,110 5,110 5,356 4,907 5,129 Deposits: Demand Deposits 178,967 178,967 173,129 172,023 168,235 Interest bearing deposits 1,791,960 1,791,960 1,659,876 1,403,986 1,362,149 Total Deposits 1,970,927 1,970,927 1,833,005 1,576,009 1,530,384 Fed Funds purchased & repo agreements 50,917 50,917 35,819 20,030 18,271 Other borrowed funds 124,688 124,688 123,988 112,465 125,665 Common Equity 306,408 306,408 302,273 257,780 217,641 ====================================================================== Average Balance Sheet -------- Total Assets $2,028,906 $2,368,642 $2,157,297 $1,906,800 $1,673,006 Total Securities 173,665 216,433 183,291 151,542 142,473 Mortgage Loans held for Sale 6,576 6,064 7,015 8,011 5,200 Loans: Commercial: Real- Estate 760,925 894,885 818,912 701,309 624,990 Construc- tion/A&D 490,964 600,693 524,265 450,386 385,784 Other 116,591 136,109 122,750 109,873 93,284 Residential: Real- Estate 153,480 151,938 151,332 153,272 157,463 Construc- tion/A&D 27,767 29,520 30,658 30,279 20,480 Other 49,781 51,282 49,191 49,693 52,788 Total Loans 1,599,508 1,864,427 1,697,108 1,494,812 1,334,789 Other Assets: Other earning assets: 35,756 37,051 39,313 45,829 20,624 Total Earning Assets: 1,815,505 2,123,975 1,926,727 1,700,194 1,503,086 Deposits: Demand Deposits 166,190 169,410 172,393 166,941 155,181 Interest bearing deposits Savings 19,268 17,085 18,645 20,359 21,036 NOW 310,624 358,114 335,152 307,630 240,033 Money Market 127,456 146,241 132,302 103,540 127,480 Time deposits greater than $100,000 571,992 688,977 608,483 542,530 445,970 Time deposits less than $100,000 423,708 506,804 471,973 386,389 325,379 Total Deposits 1,619,238 1,886,631 1,738,948 1,527,389 1,315,079 Fed Funds purchased & repo agreements 29,874 45,112 26,036 23,230 24,608 Other borrowed funds 108,997 108,338 89,927 102,493 136,740 Common Equity 252,004 304,362 283,937 235,731 182,219 ====================================================================== Income Statement ---------- Interest Income $ 148,081 $ 44,415 $ 40,669 $ 34,214 $ 28,783 Interest Expense 68,647 22,353 19,082 15,142 12,070 Net Interest Income 79,434 22,062 21,587 19,072 16,713 Loan loss provision 4,468 1,873 1,226 739 630 Service charges on deposit accounts 9,162 2,336 2,387 2,335 2,104 Mortgage banking revenues 4,922 1,007 1,231 1,433 1,251 Securities Gains (Losses) (1,601) (1,331) (270) -- -- Gains (Losses) on Foreclosed Property (57) 10 (45) (24) 2 Other income 5,480 1,064 1,683 1,173 1,560 Total non- interest income 17,906 3,086 4,986 4,917 4,917 Salaries and benefits 32,376 8,313 8,497 7,804 7,762 Occupancy and equipment 5,622 1,471 1,396 1,459 1,296 Other noninterest expense 17,604 4,891 4,539 4,351 3,823 Total non- interest expense 55,602 14,675 14,432 13,614 12,881 Pre-tax earnings 37,270 8,600 10,915 9,636 8,119 Income Taxes 13,878 3,378 3,975 3,546 2,979 Net income $ 23,392 $ 5,222 $ 6,940 $ 6,090 $ 5,140 Basic earnings per share $ 1.36 $ 0.26 $ 0.38 $ 0.36 $ 0.36 Diluted earnings per share 1.33 0.26 0.37 0.36 0.35 Operating diluted earnings per share(3) 1.38 0.31 0.37 0.36 0.35 End of period shares outstan- ding 19,166,314 19,166,314 19,161,507 17,519,112 15,782,125 Weighted average diluted shares o/s 17,564,990 19,528,891 18,971,126 16,910,380 14,784,856 Tax equivalent adjustment 414 106 107 100 101 Net interest income (FTE) 79,848 22,168 21,694 19,172 16,814 Effective Tax Rate 37.24% 39.28% 36.42% 36.80% 36.69% ====================================================================== Stock and related per share data: ---------- Book value $ 15.99 $ 15.99 $ 15.78 $ 14.71 $ 13.79 Tangible book value 8.99 8.99 8.76 8.66 7.08 Dividends declared per share 0.30 0.0750 0.0750 0.0750 0.0750 ====================================================================== Other Key Ratios/ Data: --------- Return on average tangible equity(2), (3) 16.53% 12.19% 17.13% 18.81% 19.92% Return on average assets(2) 1.15% 0.87% 1.28% 1.28% 1.25% Net interest margin (FTE)(2) 4.40% 4.14% 4.47% 4.52% 4.54% Efficiency ratio (FTE) 56.88% 58.11% 54.09% 56.51% 59.27% Tangible Equity/ Tangible Assets(3) 7.42% 7.42% 7.70% 8.12% 6.19% ====================================================================== Loan Performance Data: ------------ Nonaccrual loans $ 34,401 $ 34,401 $ 16,946 $ 17,269 $ 8,171 Loans 90 Days Past Due and Accruing -- -- -- -- Other real estate owned (ORE) 2,775 2,775 1,867 1,817 2,488 Total non- performing assets 37,176 37,176 18,813 19,086 10,659 Net charge- offs 2,362 1,014 789 361 198 Allowance for loan losses/ NPA's 60.08% 60.08% 114.16% 95.31% 167.11% Allowance for loan losses/ loans 1.18% 1.18% 1.20% 1.21% 1.21% NPA's/Loans plus ORE 1.95% 1.95% 1.05% 1.27% 0.72% Non- performing assets/ total assets 1.49% 1.49% 0.81% 0.97% 0.56% Net charge- offs to average loans(1) 0.15% 0.22% 0.18% 0.10% 0.06% ====================================================================== (1) Annualized (2) The actual number of days in the period were used to annualize income (3) Calculation of this measure is illustrated in the attached GAAP to non-GAAP reconciliation (4) During quarter ended 6/30/07, certain loans were reclassified between these two categories and thus the resulting quarterly change is not meaningful 2007 ---------------------------------------------------------------------- Dec 31/YTD 4th 3rd 2nd 1st Quarter Quarter Quarter Quarter ---------------------------------------------------------------------- Reconciliation Table- GAAP to non-GAAP: -------------- Book Value per share $ 16.22 $ 16.22 $ 16.52 $ 16.38 $ 16.25 Effect of intangible assets per share (6.94) (6.94) (6.95) (6.84) (6.86) Tangible book value $ 9.28 $ 9.28 $ 9.57 $ 9.54 $ 9.39 Equity $ 306,693 $ 306,693 $ 312,036 $ 314,687 $ 311,729 Intangible assets 132,696 132,696 132,942 133,218 133,416 Less tax effect of Core- Deposit Intangible (38%) (1,568) (1,568) (1,661) (1,754) (1,848) Tangible equity $ 175,565 $ 175,565 $ 180,755 $ 183,223 $ 180,161 Assets $2,833,071 $2,833,071 $2,723,986 $2,672,177 $2,541,603 Intangible assets 131,129 131,129 131,281 131,464 131,568 Tangible assets $2,701,942 $2,701,942 $2,592,705 $2,540,713 $2,410,035 Equity/ Assets 10.83% 10.83% 11.46% 11.78% 12.27% Effect of intangible assets -4.33% -4.33% -4.49% -4.57% -4.79% Tangible Equity/ Tangible Assets 6.50% 6.50% 6.97% 7.21% 7.48% Average Equity $ 313,504 $ 315,791 $ 316,060 $ 313,877 $ 308,691 Average Intangible assets 133,878 132,849 133,117 133,363 136,228 Less tax effect of Core- Deposit Intangible (38%) (1,763) (1,626) (1,720) (1,813) (1,896) Average tangible equity $ 181,389 $ 184,568 $ 184,663 $ 182,327 $ 174,359 Net Income(a) $ 6,588 $ (27,268) $ 2,281 $ 24,467 $ 27,521 Return on average tangible equity 3.63% -14.77% 1.24% 13.42% 15.78% Diluted earnings per share $ 0.34 $ (0.36) $ 0.03 $ 0.31 $ 0.35 Effect of securities (gains) losses, net of tax -- -- -- -- -- Effect of prepayment of FHLB advances, net of tax -- -- -- -- -- Diluted operating earnings per share $ 0.34 $ (0.36) $ 0.03 $ 0.31 $ 0.35 Net income $ 6,588 $ (6,873) $ 575 $ 6,100 $ 6,786 Effect of securities (gains) losses, net of tax 2 -- 3 -- (1) Effect of prepayment of FHLB advances, net of tax -- -- -- -- -- Net operating income $ 6,590 $ (6,873) $ 578 $ 6,100 $ 6,785 (a) The actual number of days in the period were used to annualize income 2006 ---------------------------------------------------------------------- Dec 31/YTD 4th 3rd 2nd 1st Quarter Quarter Quarter Quarter ---------------------------------------------------------------------- Reconciliation Table- GAAP to non-GAAP: -------------- Book Value per share $ 15.99 $ 15.99 $ 15.78 $ 14.71 $ 13.79 Effect of intangible assets per share (7.00) (7.00) (7.02) (6.05) (6.71) Tangible book value $ 8.99 $ 8.99 $ 8.76 $ 8.66 $ 7.08 Equity $ 306,408 $ 306,408 $ 302,273 $ 257,780 $ 217,641 Intangible assets 133,094 133,094 136,518 107,921 107,788 Less tax effect of Core- Deposit Intangible (38%) (1,942) (1,942) (2,035) (1,865) (1,949) Tangible equity $ 175,256 $ 175,256 $ 167,790 $ 151,724 $ 111,802 Assets $2,494,071 $2,494,071 $2,314,913 $1,974,376 $1,912,841 Intangible assets 131,152 131,152 134,483 106,056 105,839 Tangible assets $2,362,919 $2,362,919 $2,180,430 $1,868,320 $1,807,002 Equity/ Assets 12.29% 12.29% 13.06% 13.06% 11.38% Effect of intangible assets -4.87% -4.87% -5.36% -4.94% -5.19% Tangible Equity/ Tangible Assets 7.42% 7.42% 7.70% 8.12% 6.19% Average Equity $ 252,004 $ 304,362 $ 283,937 $ 235,731 $ 182,219 Average Intangible assets 112,385 136,443 125,227 107,763 79,313 Less tax effect of Core- Deposit Intangible (38%) (1,921) (2,001) (2,006) (1,918) (1,754) Average tangible equity $ 141,540 $ 169,920 $ 160,716 $ 129,886 $ 104,660 Net Income(a) $ 23,392 $ 20,718 $ 27,534 $ 24,427 $ 20,846 Return on average tangible equity 16.53% 12.19% 17.13% 18.81% 19.92% Diluted earnings per share $ 1.33 $ 0.26 $ 0.37 $ 0.36 $ 0.35 Effect of securities (gains) losses, net of tax 0.06 0.05 0.01 -- -- Effect of prepayment of FHLB advances, net of tax (0.01) -- (0.01) -- -- Diluted operating earnings per share $ 1.38 $ 0.31 $ 0.37 $ 0.36 $ 0.35 Net income $ 23,392 $ 5,222 $ 6,940 $ 6,090 $ 5,140 Effect of securities (gains) losses, net of tax 980 808 172 -- -- Effect of prepayment of FHLB advances, net of tax (174) -- (174) -- -- Net operating income $ 24,198 $ 6,030 $ 6,938 $ 6,090 $ 5,140 (a) The actual number of days in the period were used to annualize income