HOUSTON, Jan. 25, 2008 (PRIME NEWSWIRE) -- Encore Bancshares, Inc. (Nasdaq:EBTX) today announced its financial results for the fourth quarter of 2007.
Highlights of the fourth quarter 2007 compared with fourth quarter of 2006:
* Net earnings grew 46% * Loans increased 21% * Net interest margin improved 46 basis points * Wealth management earnings increased 60%
"We performed in line with our long term expectation for growth and profitability, despite a challenging environment," said James S. D'Agostino, Jr., Chairman and Chief Executive Officer. "In addition, our strong capital position, as a result of our recent IPO, leaves us well positioned for the challenges and opportunities ahead."
Earnings
For the three months ended December 31, 2007, net earnings were $1.7 million, or $0.16 per diluted share, compared with $1.2 million, or $0.15 per diluted share, for the same period of 2006. The improvement in net earnings was due primarily to greater net interest income resulting from an improved asset and funding mix and growth in wealth management earnings. The change in net earnings was different than earnings per share primarily because of the additional shares issued in the initial public offering in the third quarter of 2007.
For the year ended December 31, 2007, net earnings were $7.4 million, or $0.79 per diluted share, compared with $7.5 million, or $0.94 per diluted share, for the 2006 year. The decline in net earnings was due primarily to a decrease in mortgage banking income.
Net Interest Income
Net interest income for the fourth quarter of 2007 was $9.4 million, up $2.0 million, or 27.7%, compared with the fourth quarter of 2006. The net interest margin expanded 46 basis points to 2.85% for the same comparison period, reflecting an improved asset mix resulting from the replacement of lower yielding first mortgage loans and securities with higher yielding loans. For the year ended December 31, 2007, net interest income was $34.2 million, an increase of $4.0 million, or 13.3%, compared with the year ended December 31, 2006. The net interest margin increased 28 basis points to 2.74%, due primarily to improvements in the asset mix. On a linked quarter basis (compared with the immediately preceding quarter), net interest income rose $365,000, or 4.0%, although the net interest margin declined one basis point reflecting the lag in deposit repricing, compared with the immediate change in rates on our floating rate commercial loans.
Noninterest Income
Noninterest income was $6.3 million in the fourth quarter of 2007, a decrease of $2.0 million, or 24.0%, compared with the fourth quarter of 2006. Noninterest income for the full year ended December 31, 2007 was $31.0 million, down $4.1 million, or 11.7% compared with 2006. The decrease in noninterest income for both periods was due primarily to a reduction in mortgage banking income, which was partially offset by improvements in fees from our wealth management and insurance operations.
Noninterest Expense
Noninterest expense was $12.4 million in the fourth quarter of 2007, a reduction of $282,000, or 2.2% from the fourth quarter of 2006. Noninterest expense for the fourth quarter of 2007 included termination payments of $235,000, related to the previously announced staff reduction. Noninterest expense was $50.6 million for the year ended December 31, 2007, an increase of $269,000, or 0.5%, compared with the year ended December 31, 2006. This modest increase over the prior year was attributable to expenses related to the opening of two new private client offices as well as professional fees associated with being a public company.
Segment Earnings
On a segment basis, our wealth management group showed net earnings of $1.1 million for the fourth quarter of 2007, an increase of $421,000, or 60.2%, compared with the prior year quarter. The growth in net earnings was due primarily to an 11.0% growth in assets under management and a 4.6% expense reduction. Our banking net earnings were $526,000 for the fourth quarter of 2007, a decrease of $85,000, or 13.9%, compared with the same period of 2006. The decrease in net earnings resulted from a decline in mortgage banking income. The decrease in noninterest income was partially offset by higher net interest income, as the bank improved its balance sheet mix. Our insurance group had net earnings of $238,000, an increase of $227,000, which resulted primarily from growth in commercial lines.
Loans
Period end loans were $1.1 billion at December 31, 2007, an increase of $188.9 million, or 20.8%, compared with December 31, 2006 and up $67.1 million, or 6.5%, on a linked quarter basis. Average loans were $1.1 billion for the fourth quarter of 2007, an increase of $173.5 million, or 19.5%, compared with the prior year quarter.
Deposits
Period end deposits were $1.0 billion, up $10.6 million, or 1.0%, compared with December 31, 2006 and up $9.2 million, or 0.9%, on a linked quarter basis. Average deposits were $1.0 billion for the fourth quarter of 2007, an increase of $64.8 million, or 6.6%, compared with the prior year quarter.
Credit Quality
Net charge-offs for the fourth quarter of 2007 were $726,000, or 0.27% of average total loans on an annualized basis, compared with $2.3 million, or 1.02% of average total loans on an annualized basis for the fourth quarter of 2006. The provision for loan losses was $1.2 million in the fourth quarter of 2007, essentially unchanged from the prior year quarter. The allowance for loan losses was $11.2 million, or 1.02% of total loans at December 31, 2007, compared with $10.7 million, or 1.04% of total loans at September 30, 2007, and $9.1 million, or 1.00% of total loans, at December 31, 2006.
At December 31, 2007, nonperforming assets, including loans past due 90 days or more and still accruing, were $14.2 million, or 1.30% of total loans and investment in real estate, compared with $9.5 million, or 0.92% of total loans and investment in real estate at September 30, 2007. At December 31, 2007, non-accrual loans were $11.2 million compared with $8.7 million at September 30, 2007. The increase in non-accrual loans was primarily attributable to purchased residential mortgages and three commercial loans. Included in non-accrual loans was a loan in the amount of $6.3 million to a law firm. Repayment of this loan is primarily dependant on a lawsuit which has been settled and the proceeds are in escrow, but distribution of the attorneys fee to our client is pending final court action. Loans 90 days past due and still accruing were $2.2 million at December 31, 2007 compared with $20,000 at September 30, 2007. The increase was due primarily to one loan in the amount of $1.5 million, which is now current. Investment in real estate was essentially unchanged.
Conference Call
A conference call will be held on Friday, January 25, 2008 at 10:30 a.m., Central time to discuss fourth quarter 2007 results. A question and answer session will follow the prepared remarks. Individuals may access the call by dialing 1-888-224-1121, or access the live webcast by visiting www.encorebank.com/investorrelations.shtml or www.bestcalls.com
About Encore Bancshares, Inc.
Encore Bancshares, Inc. is a bank holding company headquartered in Houston, Texas, with $1.4 billion in consolidated assets. We focus on building relationships with professional firms, privately-owned businesses, investors and affluent individuals. We offer a full range of business and personal banking products and services, as well as financial planning, wealth management, trust and insurance products through Encore Bank, N.A. and its subsidiaries Linscomb & Williams and Town & Country Insurance. Encore Bank operates eleven private client offices in Houston and six in southwest Florida. Encore Bancshares' common stock is listed on the NASDAQ Global Market under the symbol "EBTX."
The Encore Bancshares, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4257
This press release contains certain forward-looking information about Encore Bancshares that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in or implied by such forward-looking statements. Risks and uncertainties include, but are not limited to: competitive pressure among financial institutions; our ability to expand and grow our businesses and operations and to realize the cost savings and revenue enhancements expected from such activities; a deterioration of credit quality or a reduced demand for credit; changes in the interest rate environment; the continued service of key management personnel; our ability to attract, motivate and retain key employees; general economic conditions, either nationally, regionally or in the market areas in which we operate; legislative or regulatory developments or changes in laws; changes in the securities markets and other risks that are described in our public filings with the Securities and Exchange Commission.
Encore Bancshares, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Unaudited, dollars in thousands, except per share data)
As of and for As of and for
the Three Months the Years
Ended December 31, Ended December 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Earnings Statement Data:
Interest income $ 21,240 $ 19,590 $ 81,427 $ 75,810
Interest expense 11,809 12,202 47,252 45,637
---------- ---------- ---------- ----------
Net interest income 9,431 7,388 34,175 30,173
Provision for loan
losses 1,176 1,204 4,029 3,491
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 8,255 6,184 30,146 26,682
Noninterest income 6,269 8,244 30,966 35,083
Noninterest expense 12,367 12,649 50,607 50,338
---------- ---------- ---------- ----------
Net earnings before
income taxes 2,157 1,779 10,505 11,427
Income tax expense 454 615 3,121 3,949
---------- ---------- ---------- ----------
Net earnings $ 1,703 $ 1,164 $ 7,384 $ 7,478
========== ========== ========== ==========
Common Share Data:
Basic earnings
per share $ 0.17 $ 0.16 $ 0.86 $ 1.00
Diluted earnings
per share 0.16 0.15 0.79 0.94
Book value per share 15.56 13.57 15.56 13.57
Tangible book value
per share 12.13 9.01 12.13 9.01
Weighted average
shares outstanding
(basic) 9,808,483 7,501,526 8,575,595 7,501,131
Weighted average
shares outstanding
(diluted) 10,660,621 7,981,883 9,296,224 7,925,685
Shares outstanding
at end of period 10,123,840 7,786,315 10,123,840 7,786,315
Selected Performance
Ratios:
Return on average
assets 0.48% 0.35% 0.55% 0.57%
Return on average
equity 4.33% 4.43% 5.71% 7.42%
Return on average
tangible equity 5.57% 6.67% 7.84% 11.40%
Net interest margin 2.85% 2.39% 2.74% 2.46%
Efficiency ratio 77.44% 79.41% 76.19% 75.68%
Noninterest income
to total revenue 39.93% 52.74% 47.54% 53.76%
Encore Bancshares, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands, except per share data)
Dec 31, Sept 30, June 30, March 31, Dec 31,
2007 2007 2007 2007 2006
---------- ---------- ---------- ---------- ----------
ASSETS
Cash and
due from
banks $ 18,817 $ 19,044 $ 23,972 $ 23,912 $ 27,428
Interest-
bearing
deposits
in banks 18,581 1,804 2,903 7,122 2,904
Federal
funds sold
and other 41,017 100,630 9,862 888 8,764
---------- ---------- ---------- ---------- ----------
Cash and
cash
equivalents 78,415 121,478 36,737 31,922 39,096
Securities
available-
for-sale,
at
estimated
fair value 12,207 12,205 15,298 51,439 83,701
Securities
held-to-
maturity,
at
amortized
cost 134,056 140,507 148,983 156,472 172,555
Mortgages
held-for-
sale 1,396 2,244 54,004 45,954 57,769
Loans
receivable 1,097,268 1,030,133 952,838 932,793 908,368
Allowance
for loan
losses (11,161) (10,711) (10,168) (9,790) (9,056)
---------- ---------- ---------- ---------- ----------
Net loans
receivable 1,086,107 1,019,422 942,670 923,003 899,312
Federal
Home Loan
Bank of
Dallas
stock, at
cost 5,880 5,805 6,424 6,611 7,719
Investments
in real
estate 835 731 1,785 1,785 235
Premises
and
equipment,
net 16,831 15,814 15,790 13,051 12,639
Goodwill 27,942 27,922 27,905 27,894 27,869
Other
intangible
assets,
net 6,780 6,991 7,200 7,408 7,618
Cash
surrender
value of
life
insurance
policies 14,091 13,951 13,818 13,684 13,551
Accrued
interest
receivable
and other
assets 16,657 16,062 16,587 15,764 14,779
---------- ---------- ---------- ---------- ----------
$1,401,197 $1,383,132 $1,287,201 $1,294,987 $1,336,843
========== ========== ========== ========== ==========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Deposits:
Noninterest-
bearing $ 106,382 $ 115,742 $ 106,064 $ 112,585 $ 131,476
Interest-
bearing 934,992 916,442 914,208 884,713 899,335
---------- ---------- ---------- ---------- ----------
Total deposits 1,041,374 1,032,184 1,020,272 997,298 1,030,811
Borrowings and
repurchase
agreements 173,395 166,359 125,753 157,505 171,732
Junior
subordinated
debentures 20,619 20,619 20,619 20,619 20,619
Accrued
interest
payable and
other
liabilities 8,330 8,538 9,447 10,621 8,004
---------- ---------- ---------- ---------- ----------
Total
liabilities 1,243,718 1,227,700 1,176,091 1,186,043 1,231,166
Commitments
and
contingencies -- -- -- -- --
Puttable
common stock -- -- -- -- 774
Puttable
common stock
in excess of
par -- -- -- -- 9,492
---------- ---------- ---------- ---------- ----------
Total
puttable
common stock -- -- -- -- 10,266
Shareholders'
equity:
Preferred
stock -- -- -- -- --
Common stock 10,128 10,124 7,925 7,901 7,016
Additional
paid-in
capital 108,173 107,954 68,188 67,670 57,585
Retained
earnings 39,763 38,060 35,812 34,154 32,529
Common stock
in treasury,
at cost (69) (69) (69) (69) (69)
Accumulated
other
comprehensive
loss (516) (637) (746) (712) (1,650)
---------- ---------- ---------- ---------- ----------
Total
shareholders'
equity 157,479 155,432 111,110 108,944 95,411
---------- ---------- ---------- ---------- ----------
$1,401,197 $1,383,132 $1,287,201 $1,294,987 $1,336,843
========== ========== ========== ========== ==========
Ratios:
Leverage ratio 10.47% 10.71% 7.66% 7.40% 6.35%
Tier 1 risk-
based capital
ratio 13.59% 14.20% 10.31% 10.28% 9.20%
Total risk-
based capital
ratio 14.65% 15.28% 11.40% 11.35% 11.37%
Book value per
share $ 15.56 $ 15.36 $ 14.03 $ 13.80 $ 13.57
Tangible book
value per
share 12.13 11.91 9.60 9.33 9.01
Tangible
common equity
to tangible
assets 8.98% 8.94% 6.07% 5.85% 5.39%
Encore Bancshares, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, dollars in thousands, except per share data)
Three Months Ended
------------------------------------------------------
Dec 31, Sept 30, June 30, March 31, Dec 31,
2007 2007 2007 2007 2006
---------- ---------- ---------- ---------- ----------
Interest income:
Loans,
including
fees $ 18,536 $ 17,309 $ 16,346 $ 15,808 $ 15,283
Mortgages
held-for-sale 64 1,346 1,202 1,121 1,442
Securities 1,442 1,463 1,745 2,273 2,583
Federal funds
sold and other 1,198 914 382 278 282
---------- ---------- ---------- ---------- ----------
Total
interest
income 21,240 21,032 19,675 19,480 19,590
Interest
expense:
Deposits 9,731 9,947 9,525 9,456 9,441
Borrowings and
repurchase
agreements 1,710 1,651 1,779 1,889 2,318
Junior
subordinated
debentures 368 368 373 455 443
---------- ---------- ---------- ---------- ----------
Total
interest
expense 11,809 11,966 11,677 11,800 12,202
---------- ---------- ---------- ---------- ----------
Net interest
income 9,431 9,066 7,998 7,680 7,388
Provision for
loan losses 1,176 1,008 945 900 1,204
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision
for loan
losses 8,255 8,058 7,053 6,780 6,184
Noninterest
income:
Trust and
investment
management
fees 4,533 4,501 4,268 4,244 4,159
Mortgage
banking 95 1,167 2,052 2,192 2,643
Insurance
commissions
and fees 1,217 1,450 1,562 1,713 1,114
Real estate
operations,
including
net gain
on sales 63 178 107 18 (21)
Net loss on
sale of
available-
for-sale
securities -- -- (32) (149) --
Other 361 225 764 437 349
---------- ---------- ---------- ---------- ----------
Total
noninterest
income 6,269 7,521 8,721 8,455 8,244
Noninterest
expense:
Compensation 7,081 7,318 7,855 7,863 7,272
Occupancy 1,428 1,438 1,499 1,399 1,634
Equipment 553 506 497 520 516
Advertising
and promotion 223 328 271 196 374
Outside data
processing 883 884 904 808 834
Professional
fees 797 401 458 390 405
Intangible
amortization 209 209 211 209 236
Loss on early
debt
extinguishment -- -- 391 -- --
Other 1,193 1,405 1,203 1,077 1,378
---------- ---------- ---------- ---------- ----------
Total
noninterest
expense 12,367 12,489 13,289 12,462 12,649
---------- ---------- ---------- ---------- ----------
Net earnings
before
income
taxes 2,157 3,090 2,485 2,773 1,779
Income tax
expense 454 842 827 998 615
---------- ---------- ---------- ---------- ----------
NET EARNINGS $ 1,703 $ 2,248 $ 1,658 $ 1,775 $ 1,164
========== ========== ========== ========== ==========
Earnings Per
Common Share:
Basic $ 0.17 $ 0.24 $ 0.22 $ 0.23 $ 0.16
Diluted 0.16 0.22 0.20 0.22 0.15
Average common
shares
outstanding 9,808,483 9,347,162 7,558,597 7,554,893 7,501,526
Diluted average
common shares
outstanding 10,660,621 10,156,090 8,199,564 8,131,379 7,981,883
Years Ended
December 31,
----------------------
2007 2006
--------- ---------
Interest income:
Loans, including fees $ 67,999 $ 56,753
Mortgages held-for-sale 3,733 6,546
Securities 6,923 11,239
Federal funds sold and other 2,772 1,272
--------- ---------
Total interest income 81,427 75,810
Interest expense:
Deposits 38,659 30,520
Borrowings and repurchase agreements 7,029 13,378
Junior subordinated debentures 1,564 1,739
--------- ---------
Total interest expense 47,252 45,637
--------- ---------
Net interest income 34,175 30,173
Provision for loan losses 4,029 3,491
--------- ---------
Net interest income after provision
for loan losses 30,146 26,682
Noninterest income:
Trust and investment management fees 17,546 17,315
Mortgage banking 5,506 10,661
Insurance commissions and fees 5,942 5,456
Real estate operations, including net
gain on sales 366 334
Net loss on sale of available-for-sale
securities (181) --
Other 1,787 1,317
--------- ---------
Total noninterest income 30,966 35,083
Noninterest expense:
Compensation 30,117 31,047
Occupancy 5,764 5,465
Equipment 2,076 2,050
Advertising and promotion 1,018 1,092
Outside data processing 3,479 3,253
Professional fees 2,046 1,809
Intangible amortization 838 955
Loss on early debt extinguishment 391 --
Other 4,878 4,667
--------- ---------
Total noninterest expense 50,607 50,338
--------- ---------
Net earnings before income taxes 10,505 11,427
Income tax expense 3,121 3,949
--------- ---------
NET EARNINGS $ 7,384 $ 7,478
========= =========
Earnings Per Common Share:
Basic $ 0.86 $ 1.00
Diluted 0.79 0.94
Average common shares outstanding 8,575,595 7,501,131
Diluted average common shares outstanding 9,296,224 7,925,685
Encore Bancshares, Inc. and Subsidiaries
AVERAGE CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands)
Three Months Ended
------------------------------------------------------
Dec 31, Sept 30, June 30, March 31, Dec 31,
2007 2007 2007 2007 2006
---------- ---------- ---------- ---------- ----------
Assets:
Interest-
earning
assets:
Loans $1,060,927 $ 973,641 $ 938,356 $ 916,523 $ 887,439
Mortgages
held-for-
sale 2,693 60,959 53,926 52,273 59,042
Securities 148,912 156,159 183,008 232,154 262,873
Federal funds
sold and
other 98,789 68,347 27,755 19,412 18,448
---------- ---------- ---------- ---------- ----------
Total interest-
earning assets 1,311,321 1,259,106 1,203,045 1,220,362 1,227,802
Less: Allowance
for loan
losses (10,754) (10,391) (9,843) (9,268) (10,110)
Noninterest-
earning assets 101,783 102,667 103,512 102,234 104,350
---------- ---------- ---------- ---------- ----------
Total assets $1,402,350 $1,351,382 $1,296,714 $1,313,328 $1,322,042
========== ========== ========== ========== ==========
Liabilities,
shareholders'
equity and
puttable
common stock:
Interest-
bearing
liabilities:
Interest
checking $ 169,823 $ 169,860 $ 167,956 $ 183,335 $ 175,640
Money market
and savings 359,217 358,732 340,950 334,971 331,517
Time deposits 399,224 375,896 373,669 374,389 369,385
---------- ---------- ---------- ---------- ----------
Total
interest-
bearing
deposits 928,264 904,488 882,575 892,695 876,542
Borrowings and
repurchase
agreements 170,141 158,203 161,698 172,660 205,667
Junior
subordinated
debentures 20,619 20,619 20,930 20,619 20,619
---------- ---------- ---------- ---------- ----------
Total
interest-
bearing
liabilities 1,119,024 1,083,310 1,065,203 1,085,974 1,102,828
---------- ---------- ---------- ---------- ----------
Noninterest-
bearing
liabilities:
Noninterest-
bearing
deposits 113,849 108,168 109,753 105,950 100,773
Other
liabilities 13,428 16,128 12,127 13,685 14,091
---------- ---------- ---------- ---------- ----------
Total
liabilities 1,246,301 1,207,606 1,187,083 1,205,609 1,217,692
Shareholders'
equity and
puttable
common stock 156,049 143,776 109,631 107,719 104,350
---------- ---------- ---------- ---------- ----------
Total
liabilities,
shareholders'
equity and
puttable
common stock $1,402,350 $1,351,382 $1,296,714 $1,313,328 $1,322,042
========== ========== ========== ========== ==========
Encore Bancshares, Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(Unaudited, dollars in thousands)
Loan Dec 31, Sept 30, June 30, March 31, Dec 31,
Portfolio: 2007 2007 2007 2007 2006
---------- ---------- ---------- ---------- ----------
Commercial:
Commercial $ 127,583 $ 111,072 $ 113,370 $ 115,896 $ 113,526
Commercial
real estate 277,047 249,576 225,985 210,992 190,550
Real estate
construction 100,975 132,557 130,168 134,781 121,848
---------- ---------- ---------- ---------- ----------
Total
commercial 505,605 493,205 469,523 461,669 425,924
Consumer:
Residential
real estate 466,929 411,260 355,279 334,156 336,077
Home equity
lines 79,023 76,096 76,452 78,430 78,158
Consumer
installment
- indirect 25,262 29,210 33,622 39,204 44,360
Consumer
other 20,449 20,362 17,962 19,334 23,849
---------- ---------- ---------- ---------- ----------
Total
consumer 591,663 536,928 483,315 471,124 482,444
---------- ---------- ---------- ---------- ----------
Total loans
receivable $1,097,268 $1,030,133 $ 952,838 $ 932,793 $ 908,368
========== ========== ========== ========== ==========
Nonperforming
Assets:
Nonaccrual
loans $ 11,208 $ 8,734 $ 9,111 $ 8,446 $ 9,411
Accruing
loans past
due 90 days
or more 2,183 20 2,178 100 96
Restructured
loans -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total
nonperforming
loans 13,391 8,754 11,289 8,546 9,507
---------- ---------- ---------- ---------- ----------
Investment in
real estate 835 731 1,785 1,785 235
---------- ---------- ---------- ---------- ----------
Total
nonperforming
assets $ 14,226 $ 9,485 $ 13,074 $ 10,331 $ 9,742
========== ========== ========== ========== ==========
Asset Quality
Ratios:
Nonperforming
assets to
total loans
and
investment in
real estate 1.30% 0.92% 1.37% 1.11% 1.07%
Net charge-
offs to
average loans 0.27% 0.19% 0.24% 0.07% 1.02%
Allowance for
loan losses
to period-end
loans 1.02% 1.04% 1.07% 1.05% 1.00%
Allowance for
loan losses
to
nonperforming
loans 83.35% 122.36% 90.07% 114.56% 95.26%
Deposits:
Noninterest-
bearing
deposits $ 106,382 $ 115,742 $ 106,064 $ 112,585 $ 131,476
Interest
checking 179,486 169,646 172,079 174,602 191,683
Money market
and savings 345,066 362,289 368,682 329,414 332,605
Time deposits
less than
$100,000 193,900 175,071 166,482 174,281 178,216
---------- ---------- ---------- ---------- ----------
Core
deposits 824,834 822,748 813,307 790,882 833,980
---------- ---------- ---------- ---------- ----------
Time deposits
$100,000 and
greater 201,932 194,619 188,075 195,894 187,864
Brokered
deposits 14,608 14,817 18,890 10,522 8,967
---------- ---------- ---------- ---------- ----------
Total
deposits $1,041,374 $1,032,184 $1,020,272 $ 997,298 $1,030,811
========== ========== ========== ========== ==========
Assets Under
Management $2,784,617 $2,792,894 $2,683,841 $2,609,893 $2,509,185
========== ========== ========== ========== ==========
Encore Bancshares, Inc. and Subsidiaries
ALLOWANCE FOR LOAN LOSSES
(Unaudited, dollars in thousands)
Three Months Ended
------------------------------------------------
Dec 31, Sept 30, June 30, March 31, Dec 31,
2007 2007 2007 2007 2006
-------- -------- -------- -------- --------
Allowance for
loan losses at
beginning of
quarter $ 10,711 $ 10,168 $ 9,790 $ 9,056 $ 10,123
Charge-offs:
Commercial:
Commercial (20) (42) -- -- (1,488)
Commercial real
estate -- -- -- -- --
Real estate
construction (79) -- -- -- --
-------- -------- -------- -------- --------
Total commercial (99) (42) -- -- (1,488)
-------- -------- -------- -------- --------
Consumer:
Residential real
estate (110) (340) (416) (84) (66)
Home equity lines (299) (25) -- (10) (61)
Consumer
installment -
indirect (360) (307) (215) (80) (439)
Consumer other (45) (13) (24) (144) (340)
-------- -------- -------- -------- --------
Total consumer (814) (685) (655) (318) (906)
-------- -------- -------- -------- --------
Total charge-offs (913) (727) (655) (318) (2,394)
-------- -------- -------- -------- --------
Recoveries:
Commercial:
Commercial 40 6 -- -- --
Commercial real
estate -- -- -- -- --
Real estate
construction -- -- -- -- --
-------- -------- -------- -------- --------
Total commercial 40 6 -- -- --
-------- -------- -------- -------- --------
Consumer:
Residential real
estate 22 157 7 26 3
Home equity lines -- -- -- 43 --
Consumer
installment -
indirect 109 76 45 64 100
Consumer other 16 23 36 19 20
-------- -------- -------- -------- --------
Total consumer 147 256 88 152 123
-------- -------- -------- -------- --------
Total recoveries 187 262 88 152 123
-------- -------- -------- -------- --------
Net charge-offs (726) (465) (567) (166) (2,271)
-------- -------- -------- -------- --------
Provision for loan
losses 1,176 1,008 945 900 1,204
-------- -------- -------- -------- --------
Allowance for loan
losses at end of
quarter $ 11,161 $ 10,711 $ 10,168 $ 9,790 $ 9,056
======== ======== ======== ======== ========
Encore Bancshares, Inc. and Subsidiaries
SEGMENT OPERATIONS
(Unaudited, dollars in thousands)
As of and for the Three Months Ended
------------------------------------------------------
Dec 31, Sept 30, June 30, March 31, Dec 31,
2007 2007 2007 2007 2006
---------- ---------- ---------- ---------- ----------
Banking
-------
Net interest
income $ 9,674 $ 9,315 $ 8,258 $ 8,035 $ 7,732
Provision for
loan losses 1,176 1,008 945 900 1,204
Noninterest
income 509 1,559 2,807 2,481 2,978
Noninterest
expense 8,378 8,338 8,853 8,453 8,522
---------- ---------- ---------- ---------- ----------
Earnings
before
income taxes 629 1,528 1,267 1,163 984
Income tax
expense 103 261 370 396 373
---------- ---------- ---------- ---------- ----------
Net earnings $ 526 $ 1,267 $ 897 $ 767 $ 611
========== ========== ========== ========== ==========
Total assets
at quarter
end $1,411,934 $1,392,156 $1,292,112 $1,301,562 $1,342,446
========== ========== ========== ========== ==========
Wealth
Management
-----------
Net interest
income $ 89 $ 82 $ 77 $ 73 $ 73
Noninterest
income 4,533 4,501 4,268 4,244 4,160
Noninterest
expense 3,042 3,137 2,988 3,027 3,190
---------- ---------- ---------- ---------- ----------
Earnings
before
income taxes 1,580 1,446 1,357 1,290 1,043
Income tax
expense 460 531 483 467 344
---------- ---------- ---------- ---------- ----------
Net earnings $ 1,120 $ 915 $ 874 $ 823 $ 699
========== ========== ========== ========== ==========
Total assets
at quarter
end $ 46,270 $ 45,425 $ 44,395 $ 43,935 $ 42,684
========== ========== ========== ========== ==========
Insurance
---------
Net interest
income $ 36 $ 37 $ 36 $ 27 $ 26
Noninterest
income 1,222 1,460 1,637 1,716 1,117
Noninterest
expense 947 1,014 1,057 982 937
---------- ---------- ---------- ---------- ----------
Earnings
before
income taxes 311 483 616 761 206
Income tax
expense 73 167 232 272 195
---------- ---------- ---------- ---------- ----------
Net earnings $ 238 $ 316 $ 384 $ 489 $ 11
========== ========== ========== ========== ==========
Total assets
at quarter
end $ 9,242 $ 9,219 $ 9,101 $ 9,278 $ 8,231
========== ========== ========== ========== ==========
Other
-----
Net interest
expense $ (368)$ (368)$ (373)$ (455)$ (443)
Noninterest
income 5 1 9 14 (11)
Noninterest
expense -- -- 391 -- --
---------- ---------- ---------- ---------- ----------
Loss before
income taxes (363) (367) (755) (441) (454)
Income tax
benefit (182) (117) (258) (137) (297)
---------- ---------- ---------- ---------- ----------
Net loss $ (181)$ (250)$ (497)$ (304)$ (157)
========== ========== ========== ========== ==========
Total assets
at quarter
end $ (66,249)$ (63,668)$ (58,407)$ (59,788)$ (56,518)
========== ========== ========== ========== ==========
Consolidated
------------
Net interest
income $ 9,431 $ 9,066 $ 7,998 $ 7,680 $ 7,388
Provision for
loan losses 1,176 1,008 945 900 1,204
Noninterest
income 6,269 7,521 8,721 8,455 8,244
Noninterest
expense 12,367 12,489 13,289 12,462 12,649
---------- ---------- ---------- ---------- ----------
Earnings
before
income taxes 2,157 3,090 2,485 2,773 1,779
Income tax
expense 454 842 827 998 615
---------- ---------- ---------- ---------- ----------
Net earnings $ 1,703 $ 2,248 $ 1,658 $ 1,775 $ 1,164
========== ========== ========== ========== ==========
Total assets
at quarter
end $1,401,197 $1,383,132 $1,287,201 $1,294,987 $1,336,843
========== ========== ========== ========== ==========
Encore Bancshares, Inc. and Subsidiaries
YIELD ANALYSIS
(Unaudited, dollars in thousands)
For the Three Months Ended December 31,
------------------------------------------------------
2007 2006
-------------------------- --------------------------
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
---------- ---------- ---- ---------- ---------- ----
Assets:
Interest-
earning
assets:
Loans $1,060,927 $ 18,536 6.93% $ 887,439 $ 15,283 6.83%
Mortgages
held-for-
sale 2,693 64 9.43% 59,042 1,442 9.69%
Securities 148,912 1,442 3.84% 262,873 2,583 3.90%
Federal funds
sold and
other 98,789 1,198 4.81% 18,448 282 6.06%
---------- ---------- ---------- ----------
Total interest-
earning
assets 1,311,321 21,240 6.43% 1,227,802 19,590 6.33%
Less:
Allowance for
loan losses (10,754) (10,110)
Noninterest-
earning
assets 101,783 104,350
---------- ----------
Total assets $1,402,350 $1,322,042
========== ==========
Liabilities,
shareholders'
equity and
puttable
common
stock:
Interest-
bearing
liabilities:
Interest
checking $ 169,823 $ 1,216 2.84% $ 175,640 $ 1,251 2.83%
Money market
and savings 359,217 3,553 3.92% 331,517 3,719 4.45%
Time deposits 399,224 4,962 4.93% 369,385 4,471 4.80%
---------- ---------- ---------- ----------
Total
interest-
bearing
deposits 928,264 9,731 4.16% 876,542 9,441 4.27%
Borrowings
and
repurchase
agreements 170,141 1,710 3.99% 205,667 2,318 4.47%
Junior
subordinated
debentures 20,619 368 7.08% 20,619 443 8.52%
---------- ---------- ---------- ----------
Total
interest-
bearing
liabilities 1,119,024 11,809 4.19% 1,102,828 12,202 4.39%
---------- ---------- ---------- ----------
Noninterest-
bearing
liabilities:
Noninterest-
bearing
deposits 113,849 100,773
Other
liabilities 13,428 14,091
---------- ----------
Total
liabilities 1,246,301 1,217,692
Shareholders'
equity and
puttable
common
stock 156,049 104,350
---------- ----------
Total
liabilities,
shareholders'
equity and
puttable
common
stock $1,402,350 $1,322,042
========== ==========
Net interest
income $ 9,431 $ 7,388
========== ==========
Net interest
spread 2.24% 1.94%
Net interest
margin 2.85% 2.39%
Encore Bancshares, Inc. and Subsidiaries
YIELD ANALYSIS
(Unaudited, dollars in thousands)
For the Years Ended December 31,
---------------------------------------------------------
2007 2006
----------------------------- --------------------------
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
----------- ------- ------- -------- ------- --------
Assets:
Interest-
earning
assets:
Loans $ 972,760 $67,999 6.99% $ 840,330 $56,753 6.75%
Mortgages
held-for-
sale 42,379 3,733 8.81% 72,977 6,546 8.97%
Securities 179,767 6,923 3.85% 288,082 11,239 3.90%
Federal
funds sold
and other 53,880 2,772 5.14% 24,127 1,272 5.27%
---------- ------- ---------- -------
Total interest-
earning
assets 1,248,786 81,427 6.52% 1,225,516 75,810 6.19%
Less:
Allowance for
loan losses (10,069) (9,442)
Noninterest-
earning
assets 102,388 100,498
---------- ----------
Total assets $1,341,105 $1,316,572
========== ==========
Liabilities,
shareholders'
equity and
puttable
common stock:
Interest-
bearing
liabilities:
Interest
checking $ 172,701 $ 5,131 2.97% $ 168,881 $ 4,220 2.50%
Money market
and savings 348,567 14,756 4.23% 264,219 10,457 3.96%
Time deposits 380,847 18,772 4.93% 361,693 15,843 4.38%
---------- ------- ---------- -------
Total
interest-
bearing
deposits 902,115 38,659 4.29% 794,793 30,520 3.84%
Borrowings
and
repurchase
agreements 165,647 7,029 4.24% 298,907 13,378 4.48%
Junior
subordinated
debentures 20,712 1,564 7.55% 20,619 1,739 8.43%
---------- ------- ---------- -------
Total
interest-
bearing
liabil-
ities 1,088,474 47,252 4.34% 1,114,319 45,637 4.10%
---------- ------- ---------- -------
Noninterest-
bearing
liabilities:
Noninterest-
bearing
deposits 109,448 87,788
Other
liabilities 13,867 13,638
---------- ----------
Total
liabil-
ities 1,211,789 1,215,745
Shareholders'
equity and
puttable
common stock 129,316 100,827
---------- ----------
Total
liabilities,
shareholders'
equity and
puttable
common stock $1,341,105 $1,316,572
========== ==========
Net interest
income $34,175 $30,173
======= =======
Net interest
spread 2.18% 2.09%
Net interest
margin 2.74% 2.46%