Highlights for the third quarter of 2008 include: * Core business operations absent the OTTI charge continued to improve, driven by net interest income of $16.7 million for the third quarter, which increased $559 thousand from the second quarter and $1.9 million from the third quarter of last year. The increase reflects improved net interest margin and growth of the loan portfolio. * Retained a "well-capitalized" equity position with total equity capital of $153 million, a leverage capital ratio of 7.37% and a total risk-based capital ratio of 12.35% at September 30, 2008. * Incurred a non-cash charge of $34.6 million for other-than-temporary impairment ("OTTI") on certain investment securities. * Net interest margin increased 4 basis points, to 3.98%, compared with 3.94% for the second quarter of 2008 and has increased 35 basis points from 3.63% for the third quarter of 2007. The improved net interest margin resulted principally from lower funding costs and the benefits associated with a higher percentage of earning assets being deployed in higher yielding loan assets. * Loans increased $67 million to $1.078 billion at September 30, 2008 compared with $1.011 billion at June 30, 2008. Consumer indirect auto loans account for $50 million and commercial-related loans account for $15 million of the third quarter increase in loans. * The provision for loan losses was $1.9 million, or $1.4 million more than third quarter net charge offs of $509 thousand, which represented 0.20% of average loans. The allowance for loan losses at September 30, 2008 was $17.4 million or 1.62% of total loans. * Actively considering participation in the U.S. Treasury Department's Capital Purchase Program as an attractive source of capital. * Opened a new branch in Henrietta (metro-Rochester area) with a very strong start; second new branch opening in Greece (also metro-Rochester area) is expected to open in the fourth quarter of 2008.
WARSAW, N.Y., Oct. 29, 2008 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (Nasdaq:FISI), the parent company of Five Star Bank, today reported a net loss of $28.4 million (or $2.68 diluted loss per share) for the quarter ended September 30, 2008, compared to net income of $5.3 million (or $0.44 diluted earnings per share) for the 2007 third quarter. For the nine months ended September 30, 2008, the Company's net loss totaled $23.0 million (or $2.22 diluted loss per share), compared to net income of $12.3 million (or $1.00 diluted earnings per share) for the comparable 2007 period.
Peter G. Humphrey, President and CEO of FII, commented, "Our third quarter results are reflective of the challenges presented by disruption in the financial and capital markets. The other-than-temporary impairment charge of certain securities in our portfolio reflects our recognition of specific exposures in our investment portfolio and is consistent with the exposures highlighted in our September 10, 2008 press release. We are disappointed in our third quarter results, but remain confident in the strength of our community banking franchise and our opportunities that lie ahead. Our core operations continue to perform well, driven by an expanding net interest margin, solid loan portfolio quality and effective cost controls. We are well positioned to weather this difficult period due to our core banking franchise and core earnings capacity that is built on a foundation of diversified and prudent lending, stable core deposits, and a strong capital position. The Company remains "well capitalized," and we are actively considering participation in the U.S. Treasury Department's Capital Purchase Program as an attractive source of capital to support our marketplace opportunities."
Included in the third quarter 2008 results is an other-than-temporary impairment ("OTTI") non-cash charge on certain investment securities of $34.6 million pre-tax and $33.2 million after-tax (or $3.09 per diluted share) related to auction rate preferred equity securities collateralized by preferred stock of Fannie Mae and Freddie Mac and pooled trust preferred securities issued principally by financial institutions. For the first nine months of 2008, OTTI charges were $38.3 million pre-tax and $35.5 million after-tax (or $3.27 per diluted share). The tax benefit recognized on the OTTI charge was based on the treatment of a substantial portion of the OTTI charge incurred in the third quarter being classified as a capital loss for tax purposes, which significantly limited the tax benefit. Subsequently, on October 3, 2008, the Emergency Economic Stabilization Act (the "Act") was enacted, which included a provision permitting banks, under certain circumstances, to recognize losses relating to Fannie Mae and Freddie Mac preferred stock as an ordinary loss, potentially increasing the tax benefit to the Company in the fourth quarter. Contingent upon the U.S. Treasury Department favorably interpreting and implementing certain provisions of the Act, the Company anticipates that it will recognize an additional tax benefit of $12.0 million (or $1.12 per diluted share) in the fourth quarter of 2008. Prior to this OTTI charge, impairment was considered temporary and was recorded as an unrealized loss on securities available-for-sale, which resulted in an equity reduction recognized in other comprehensive income (loss).
Net Interest Income
Net interest income was $16.7 million for the third quarter of 2008, up $559 thousand from the second quarter of 2008 and $1.9 million compared with the third quarter of 2007. Net interest margin improved to 3.98% in the third quarter of 2008 compared with 3.94% in the second quarter of 2008 and 3.63% in the third quarter of 2007. For the first nine months of 2008 net interest income was $48.0 million compared with $42.9 million for the same period in 2007. Net interest margin improved to 3.88% versus 3.45% on a year to date comparative basis. The improved net interest income and net interest margin resulted principally from lower funding costs and the benefits associated with a higher percentage of earning assets being deployed in higher yielding loan assets.
Noninterest Income (Loss)
Noninterest income (loss) for the third quarter of 2008 was $(29.3) million, compared with $932 thousand and $6.3 million in the second quarter of 2008 and the third quarter of 2007, respectively. For the nine months ended September 30, 2008 noninterest income (loss) was $(23.7) million compared with $15.7 million for the same period in 2007. The 2008 periods reflect OTTI charges on investment securities totaling $34.6 million and $3.8 million in the third and second quarters, respectively. Absent the OTTI charges in 2008, noninterest income would have been $5.2 million in the third quarter versus $4.7 million in the second quarter. The increase, exclusive of OTTI charges, is primarily the result of higher income from company owned life insurance due to a $20.0 million investment in bank owned life insurance made during the third quarter of 2008, coupled with an increase in service charges on deposits. The higher level of noninterest income in the third quarter of 2007 included $1.1 million in proceeds from company owned life insurance.
Noninterest Expense
Noninterest expense for the third quarter of 2008 was $13.4 million, compared with $14.4 million and $14.6 million in the second quarter of 2008 and the third quarter of 2007, respectively. The third quarter of 2008 includes a $1.0 million reversal of accrued compensation expense that recognized financial results for 2008 will not meet certain annual incentive targets. Absent this reversal, noninterest expense for the third quarter would have been $14.4 million, basically flat in comparison with the second quarter of 2008 and down slightly from the same quarter last year. For the nine months ended September 30, 2008, noninterest expense was $42.1 million compared with $42.9 million for the same period in 2007. The decreases in both the three and nine-month periods of 2008 compared to those in 2007 are primarily due to lower salaries and benefits expense as previously discussed, partially offset by an increase in occupancy and equipment costs.
Balance Sheet
Total assets at September 30, 2008 were $1.946 billion, up $87.9 million from $1.858 billion at December 31, 2007. Total loans were $1.078 billion at September 30, 2008, an increase of $114.0 million from $964.2 million at December 31, 2007, principally from a $93.0 million increase in indirect auto loans. Total deposits increased $84.4 million to $1.660 billion at September 30, 2008 versus $1.576 billion at December 31, 2007. Total borrowings, including junior subordinated debentures, increased $46.5 million to $114.7 million at September 30, 2008, up from $68.2 million at December 31, 2007. Total shareholders' equity at September 30, 2008 was $152.8 million compared with $195.3 million at December 31, 2007. The Company's leverage ratio was 7.37% and total risk-based capital ratio was 12.35% at September 30, 2008 which is within the regulatory standard to be deemed a well-capitalized institution.
Asset Quality
The Company recorded a provision for loan losses of $1.9 million for the third quarter of 2008 compared with a credit for loan losses of $82 thousand in the third quarter of 2007. The increase in the provision for loan losses is primarily due to growth and the changing mix of the loan portfolio, partially offset by reduced nonperforming loans from the year ago period. Net charge-offs of $509 thousand for the third quarter of 2008 represented 20 basis points (annualized) of average loans. For the first nine months of 2008 net charge-offs were $2.1 million, or 28 basis points (annualized) of average loans, compared with $1.2 million, or 17 basis points (annualized) of average loans, for the first nine months of 2007. The increase in net charge-offs in 2008 related principally to the commercial mortgage and consumer indirect loan portfolios.
The allowance for loan losses was $17.4 million at September 30, 2008 compared with $15.5 million December 31, 2007. Nonperforming loans were $7.6 million at September 30, 2008 compared with $6.3 million and $8.1 million at June 30, 2008 and December 31, 2007, respectively. The ratio of allowance for loans losses to nonperforming loans improved to 228% at September 30, 2008 versus 192% at December 31, 2007.
About Financial Institutions, Inc.
With $1.9 billion in assets, Financial Institutions, Inc. provides diversified financial services through its subsidiaries, Five Star Bank and Five Star Investment Services, Inc. Five Star Bank provides a wide range of consumer and commercial banking services to individuals, municipalities and businesses through a network of 51 offices and 71 ATMs in Western and Central New York State. Five Star Investment Services provides brokerage and insurance products and services within the same New York State markets. The consolidated entity includes approximately 670 employees. The Company's stock is listed on the Nasdaq Global Select Market under the symbol FISI. Additional information is available at the Company's website: www.fiiwarsaw.com.
Safe Harbor Statement
This press release may contain forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current beliefs or projections. There are a number of important factors that could affect the Company's forward-looking statements which include its ability to implement its strategic plan, its ability to redeploy investment assets into loan assets, the attitudes and preferences of its customers, the competitive environment, fluctuations in the fair value of securities in the investment portfolio, general economic and credit market conditions nationally and regionally, availability of capital under the U.S. Treasury Department's Capital Purchase Program, final determination of the tax treatment of losses relating to Fannie Mae and Freddie Mac preferred stock and other factors discussed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise these statements following the date of this press release.
FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) Nine months ended September 30, ------------------ 2008 2007 -------- -------- ===================================================================== SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) ===================================================================== Interest income $ 74,366 78,816 Interest expense 26,348 35,947 -------- -------- Net interest income 48,018 42,869 Provision (credit) for loan losses 3,965 (235) -------- -------- Net interest income after provision (credit) for loan losses 44,053 43,104 -------- -------- Noninterest income (loss): Service charges on deposits 7,812 8,114 ATM and debit card 2,460 2,079 Broker-dealer fees and commissions 1,223 1,053 Loan servicing 530 707 Company owned life insurance 269 1,139 Net gain on sale of loans held for sale 304 589 Net gain (loss) on sale of other assets 254 160 Net gain on investment securities 232 118 Impairment charge on investment securities (38,345) -- Other 1,589 1,719 -------- -------- Total noninterest income (loss) (23,672) 15,678 -------- -------- Noninterest expense: Salaries and employee benefits 23,626 24,935 Occupancy and equipment 7,789 7,321 Computer and data processing 1,764 1,593 Professional services 1,504 1,548 Supplies and postage 1,353 1,283 Advertising and promotions 905 1,006 Other 5,126 5,200 -------- -------- Total noninterest expense 42,067 42,886 -------- -------- (Loss) income before income taxes (21,686) 15,896 Income tax expense (benefit) 1,330 3,585 -------- -------- Net (loss) income $(23,016) 12,311 ======== ======== Less: Preferred stock dividends 1,112 1,113 Net (loss) income available to common shareholders $(24,128) 11,198 ===================================================================== STOCK AND RELATED PER SHARE DATA ===================================================================== Net (loss) income per share - basic $ (2.22) 1.00 Net (loss) income per share - diluted $ (2.22) 1.00 Cash dividends declared $ 0.44 0.33 Common dividend payout ratio(7) NA% 33.00 Dividend yield (annualized) 2.94% 2.46 Stock price (Nasdaq:FISI): High $ 22.50 23.71 Low $ 14.82 16.18 Close $ 20.01 17.94 Quarterly Trends ------------------------------------------------ 2008 2007 ---------------------------- ------------------ Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- ===================================================================== SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) ===================================================================== Interest income $ 24,558 24,536 25,272 26,397 26,553 Interest expense 7,812 8,349 10,187 11,192 11,692 -------- -------- -------- -------- -------- Net interest income 16,746 16,187 15,085 15,205 14,861 Provision (credit) for loan losses 1,891 1,358 716 351 (82) -------- -------- -------- -------- -------- Net interest income after provision (credit) for loan losses 14,855 14,829 14,369 14,854 14,943 -------- -------- -------- -------- -------- Noninterest income (loss): Service charges on deposits 2,794 2,518 2,500 2,818 2,778 ATM and debit card 852 856 752 805 735 Broker-dealer fees and commissions 363 401 459 343 323 Loan servicing 112 232 186 221 259 Company owned life insurance 223 27 19 116 1,090 Net gain on sale of loans held for sale 48 92 164 190 313 Net gain (loss) on sale of other assets 102 115 37 (58) 59 Net gain on investment securities 12 47 173 88 67 Impairment charge on investment securities (34,554) (3,791) -- -- -- Other 700 435 454 479 710 -------- -------- -------- -------- -------- Total noninterest income (loss) (29,348) 932 4,744 5,002 6,334 -------- -------- -------- -------- -------- Noninterest expense: Salaries and employee benefits 7,021 8,169 8,436 8,240 8,574 Occupancy and equipment 2,642 2,567 2,580 2,582 2,422 Computer and data processing 603 580 581 533 547 Professional services 467 480 557 533 476 Supplies and postage 475 437 441 379 443 Advertising and promotions 472 283 150 396 322 Other 1,729 1,869 1,528 1,880 1,825 -------- -------- -------- -------- -------- Total noninterest expense 13,409 14,385 14,273 14,543 14,609 -------- -------- -------- -------- -------- (Loss) income before income taxes (27,902) 1,376 4,840 5,313 6,668 Income tax expense (benefit) 524 (255) 1,061 1,215 1,414 -------- -------- -------- -------- -------- Net (loss) income $(28,426) 1,631 3,779 4,098 5,254 ======== ======== ======== ======== ======== Less: Preferred stock dividends 371 370 371 370 371 Net (loss) income available to common shareholders $(28,797) 1,261 3,408 3,728 4,883 ===================================================================== STOCK AND RELATED PER SHARE DATA ===================================================================== Net (loss) income per share - basic $ (2.68) 0.12 0.31 0.34 0.44 Net (loss) income per share - diluted $ (2.68) 0.12 0.31 0.34 0.44 Cash dividends declared $ 0.15 0.15 0.14 0.13 0.12 Common dividend payout ratio(7) NA% 125.00 45.16 38.24 27.27 Dividend yield (annualized) 2.98% 3.76 2.97 2.89 2.65 Stock price (Nasdaq:FISI): High $ 22.50 20.00 20.78 19.80 20.46 Low $ 14.82 15.25 15.10 16.42 16.18 Close $ 20.01 16.06 18.95 17.82 17.94 FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) Nine months ended September 30, ---------------------- 2008 2007 ---------- ---------- ===================================================================== SELECTED AVERAGE BALANCES (Amounts in thousands) ===================================================================== Investment securities(1) $ 739,896 819,467 Loans(2): Commercial 147,044 116,582 Commercial real estate 245,560 245,038 Agriculture 45,283 54,336 Residential real estate 169,939 164,443 Consumer indirect 165,153 113,360 Consumer direct and home equity 225,050 238,488 ---------- ---------- Total loans 998,029 932,247 Total interest-earning assets 1,768,567 1,789,995 Total assets 1,899,023 1,914,561 Interest-bearing liabilities: Interest-bearing demand 343,247 338,713 Savings and money market 368,882 342,064 Certificates of deposit 613,443 684,510 Borrowings 87,200 83,817 ---------- ---------- Total interest-bearing liabilities 1,412,772 1,449,104 Noninterest-bearing demand deposits 279,064 262,769 Total deposits 1,604,636 1,628,056 Total liabilities 1,707,733 1,730,682 Net earning assets 355,795 340,891 Shareholders' equity 191,290 183,879 Common equity(3) 173,710 166,284 Tangible common equity(4) $ 135,861 128,129 Common shares outstanding: Basic 10,852 11,198 Diluted 10,852 11,231 ===================================================================== SELECTED AVERAGE YIELDS/RATES AND RATIOS (Tax equivalent basis) ===================================================================== Investment securities 4.87% 4.83 Loans 6.71% 7.32 Total interest-earning assets 5.87% 6.14 Interest-bearing demand 1.02% 1.73 Savings and money market 1.13% 1.69 Certificates of deposit 3.80% 4.65 Borrowings 4.83% 5.45 Total interest-bearing liabilities 2.49% 3.32 Net interest rate spread 3.38% 2.82 Net interest rate margin 3.88% 3.45 Net (loss) income (annualized returns on): Average assets -1.62% 0.86 Average equity -16.07% 8.95 Average common equity(5) -18.55% 9.00 Average tangible common equity(6) -23.72% 11.69 Efficiency ratio(8) 63.17% 69.41 Equity to assets 10.07% 9.60 Common equity to assets(5) 9.15% 8.69 Tangible common equity to tangible assets(6) 7.30% 6.83 Quarterly Trends -------------------------------------------------- 2008 2007 ------------------------------ ------------------- Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter ---------- --------- --------- --------- --------- ===================================================================== SELECTED AVERAGE BALANCES (Amounts in thousands) ===================================================================== Investment securities(1) $ 721,419 744,648 753,823 786,343 810,792 Loans(2): Commercial 150,373 150,380 140,340 129,438 121,258 Commercial real estate 246,746 244,688 245,232 242,336 243,230 Agriculture 45,965 44,504 45,373 50,448 54,017 Residential real estate 173,175 169,925 166,682 167,551 166,589 Consumer indirect 200,586 156,728 137,756 132,372 122,095 Consumer direct and home equity 222,241 223,906 229,035 232,228 235,205 ---------- --------- --------- --------- --------- Total loans 1,039,086 990,131 964,418 954,373 942,394 Total interest- earning assets 1,774,201 1,771,801 1,759,635 1,756,169 1,766,511 Total assets 1,908,577 1,897,514 1,890,874 1,884,712 1,890,669 Interest-bearing liabilities: Interest-bearing demand 342,188 342,463 345,102 337,179 325,675 Savings and money market 366,449 378,799 361,425 358,198 333,895 Certificates of deposit 591,025 615,950 633,599 635,825 663,845 Borrowings 118,023 73,902 69,335 71,092 90,312 ---------- --------- --------- --------- --------- Total interest- bearing liabilities 1,417,685 1,411,114 1,409,461 1,402,294 1,413,727 Noninterest- bearing demand deposits 294,136 275,570 267,322 276,535 275,228 Total deposits 1,593,798 1,612,782 1,607,448 1,607,737 1,598,643 Total liabilities 1,727,473 1,702,211 1,693,300 1,694,297 1,706,111 Net earning assets 356,516 360,687 350,174 353,875 352,784 Shareholders' equity 181,104 195,303 197,574 190,415 184,558 Common equity(3) 163,527 177,722 179,993 172,834 166,977 Tangible common equity(4) $ 125,754 139,872 142,067 134,832 128,899 Common shares outstanding: Basic 10,738 10,879 10,938 11,022 11,091 Diluted 10,738 10,928 10,975 11,043 11,114 ===================================================================== SELECTED AVERAGE YIELDS/RATES AND RATIOS (Tax equivalent basis) ===================================================================== Investment securities 4.66% 4.92 5.05 5.13 4.93 Loans 6.52% 6.65 6.97 7.25 7.40 Total interest- earning assets 5.73% 5.83 6.05 6.28 6.25 Interest-bearing demand 0.86% 0.89 1.30 1.61 1.63 Savings and money market 0.93% 1.02 1.47 1.70 1.60 Certificates of deposit 3.33% 3.72 4.31 4.54 4.63 Borrowings 4.30% 5.05 5.51 5.63 5.57 Total interest- bearing liabilities 2.19% 2.38 2.91 3.17 3.28 Net interest rate spread 3.54% 3.45 3.14 3.11 2.97 Net interest rate margin 3.98% 3.94 3.73 3.75 3.63 Net (loss) income (annualized returns on): Average assets -5.93% 0.35 0.80 0.86 1.10 Average equity -62.44% 3.36 7.69 8.54 11.29 Average common equity(5) -70.06% 2.85 7.62 8.56 11.60 Average tangible common equity(6) -91.10% 3.63 9.65 10.97 15.03 Efficiency ratio(8) 58.10% 64.21 67.64 66.84 67.07 Equity to assets 9.49% 10.29 10.45 10.10 9.76 Common equity to assets(5) 8.57% 9.37 9.52 9.17 8.83 Tangible common equity to tangible assets(6) 6.72% 7.52 7.67 7.30 6.96 FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) 2008 2007 ------------------------------ ------------------- Sept. 30, June 30, March 31, Dec. 31, Sept. 30, ===================================================================== SELECTED BALANCE SHEET DATA (Amounts in thousands) ===================================================================== Cash and cash equivalents $ 76,704 63,049 102,999 46,673 58,421 Investment securities: Available for sale 607,357 669,752 688,504 695,241 742,716 Held-to-maturity 64,434 56,508 57,631 59,479 56,885 ---------- --------- --------- --------- --------- Total investment securities 671,791 726,260 746,135 754,720 799,601 Loans held for sale 1,008 926 1,099 906 107 Loans: Commercial 156,809 140,745 144,976 136,780 123,226 Commercial real estate 248,267 250,872 245,148 245,797 241,981 Agriculture 46,490 45,231 44,162 47,367 53,877 Residential real estate 173,893 172,396 168,738 166,863 167,771 Consumer indirect 227,971 177,967 142,565 134,977 128,016 Consumer direct and home equity 224,693 223,538 226,855 232,389 234,800 ---------- --------- --------- --------- --------- Total loans 1,078,123 1,010,749 972,444 964,173 949,671 Allowance for loan losses 17,420 16,038 15,549 15,521 15,611 ---------- --------- --------- --------- --------- Total loans, net 1,060,703 994,711 956,895 948,652 934,060 Total assets 1,945,819 1,895,448 1,912,652 1,857,876 1,902,985 Total interest- earning assets 1,789,499 1,749,808 1,771,676 1,722,122 1,757,904 Deposits: Noninterest- bearing demand 293,027 288,258 268,419 286,362 284,252 Interest-bearing demand 376,098 338,290 356,758 335,314 346,652 Savings and money market 383,456 372,317 380,167 346,639 346,338 Certificates of deposit 607,833 596,890 622,628 607,656 639,020 ---------- --------- --------- --------- --------- Total deposits 1,660,414 1,595,755 1,627,972 1,575,971 1,616,262 Borrowings 114,684 89,465 70,336 68,210 79,221 Total interest- bearing liabilities 1,482,071 1,396,962 1,429,889 1,357,819 1,411,231 Net interest- earning assets 307,428 352,846 341,787 364,303 346,673 Shareholders' equity 152,770 188,998 197,364 195,322 188,324 Common shareholders' equity(3) 135,195 171,417 179,783 177,741 170,743 Tangible common shareholders' equity(4) 97,468 133,614 141,903 139,786 132,711 Securities available for sale - fair value adjustment included in shareholders' equity $ (9,797) (5,803) 944 (500) (3,581) Common shares outstanding 10,806 10,913 10,992 11,011 11,082 Treasury shares 542 435 356 337 266 FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) 2008 2007 ---------------------------- ------------------ Sept. 30, June 30, March 31, Dec. 31, Sept. 30, -------- -------- -------- -------- -------- ===================================================================== CAPITAL RATIOS ===================================================================== Leverage ratio 7.37% 9.17 9.38 9.35 9.23 Tier 1 risk-based capital 11.10% 14.58 15.34 15.74 15.71 Total risk based capital 12.35% 15.83 16.59 16.99 16.96 Common equity to assets 6.95% 9.04 9.40 9.57 8.97 Tangible common equity to tangible assets(4) 5.11% 7.19 7.57 7.68 7.12 Common book value per share $ 12.51 15.71 16.36 16.14 15.41 Tangible common book value per share(4) $ 9.02 12.24 12.91 12.69 11.98 ===================================================================== ASSET QUALITY DATA (Dollar amounts in thousands) ===================================================================== Nonaccrual loans $ 7,609 6,254 7,353 8,075 8,295 Accruing loans past due 90 days or more 32 1 2 2 -- -------- -------- -------- -------- -------- Total non-performing loans 7,641 6,255 7,355 8,077 8,295 Foreclosed assets 1,009 1,235 1,257 1,421 1,625 -------- -------- -------- -------- -------- Total non-performing assets $ 8,650 7,490 8,612 9,498 9,920 ======== ======== ======== ======== ======== Net loan charge-offs $ 509 869 687 441 829 Net charge-offs to average loans (annualized) 0.20% 0.35 0.29 0.18 0.35 Total non-performing loans to total loans 0.71% 0.62 0.76 0.84 0.87 Total non-performing assets to total assets 0.44% 0.40 0.45 0.51 0.52 Allowance for loan losses to total loans 1.62% 1.59 1.60 1.61 1.64 Allowance for loan losses to non-performing loans 228% 256 211 192 188 ------ (1) Average investment securities shown at amortized cost. (2) Includes nonaccrual loans. (3) Excludes preferred shareholders' equity. (4) Excludes preferred shareholders' equity, goodwill and other intangible assets. (5) Net income available to common shareholders divided by average common equity. (6) Net income available to common shareholders divided by average tangible equity. (7) Common dividend payout ratio equals dividends declared during the period divided by earnings per share for the equivalent period. There is no ratio shown for periods where the Company both declares a dividend and incurs a loss during the period because the ratio would result in a negative payout since the dividend declared (paid out) will always be greater than 100% of earnings. (8) Efficiency ratio equals noninterest expense less other real estate expense and amortization of intangible assets as a percentage of net revenue, defined as the sum of tax-equivalent net interest income and noninterest income before net gains and impairment charges on investment securities, proceeds from company owned life insurance included in income and net gain on sale of trust relationships.