WARSAW, N.Y., Jan. 28, 2009 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (Nasdaq:FISI) (the "Company"), the parent company of Five Star Bank, today reported a net loss of $3.1 million (or $0.33 loss per share) for the quarter ended December 31, 2008, compared to net income of $4.1 million (or $0.34 earnings per diluted share) for the 2007 fourth quarter. For the year ended December 31, 2008, the Company's net loss totaled $26.2 million (or $2.56 loss per share), compared to net income of $16.4 million (or $1.33 diluted earnings per share) in 2007.
Highlights for the fourth quarter of 2008 include:
* Core business operations absent the other-than-temporary impairment ("OTTI") charge continued to improve, driven by net interest income of $17.3 million for the fourth quarter, which increased $567 thousand from the third quarter of 2008 and $2.1 million from the fourth quarter of last year. On a year-to-date basis net interest income increased to $65.3 million in 2008, a $7.3 million or 12% increase compared to 2007. The increases reflect improved net interest margin and growth of the loan portfolio. * Incurred a pre-tax non-cash charge of $29.9 million during the fourth quarter and $68.2 million for the year ended December 31, 2008 for OTTI on certain investment securities. * Retained a "well-capitalized" equity position with total equity capital of $190.3 million, which includes $37.5 million in preferred equity issued in December 2008 under the U.S. Treasury Department's Capital Purchase Program. As of December 31, 2008, the leverage capital ratio was 8.05% and total risk-based capital ratio was 13.08%. * During the fourth quarter, loans increased $43.0 million to $1.121 billion at December 31, 2008 compared with $1.078 billion at September 30, 2008. Consumer indirect auto loans accounted for $27.1 million and commercial-related loans accounted for $13.9 million of the fourth quarter increase in loans. Total loans increased $156.9 million or 16% for the one year period ending December 31, 2008. Indirect auto loans increased $120.1 million or 89%, and commercial-related increased $35.5 million or 8% during that same one year period. * Net interest margin increased 9 basis points, to 4.07% for the fourth quarter of 2008, compared with 3.98% for the third quarter of 2008. For the year ended December 31, 2008, net interest margin improved to 3.93%, 40 basis points higher than the comparable prior year period. 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. * The provision for loan losses for the fourth quarter was $2.6 million, or $1.3 million more than fourth quarter net charge offs of $1.3 million, which represented 0.46% (annualized) of average loans. For the year ended December 31, 2008, the provision for loan losses was $6.6 million and net charge offs were $3.3 million or 0.32% of average loans. The allowance for loan losses at December 31, 2008 was $18.7 million or 1.67% of total loans, as compared to 1.61% of total loans at December 31, 2007.
Peter G. Humphrey, President and CEO of FII, commented, "Our fourth quarter results are reflective of the challenges presented by the disruption in the financial and capital markets. The other-than-temporary impairment charge reflects our recognition of the deterioration of specific securities in our investment portfolio. We are obviously disappointed in our annual 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 has utilized the U.S. Treasury Department's Capital Purchase Program as an attractive source of capital to support our marketplace opportunities."
Included in the fourth quarter 2008 results is a pre-tax non-cash OTTI charge on certain investment securities of $29.9 million, comprised principally of pooled trust preferred securities, and to a lesser extent, privately issued whole loan collateralized mortgage obligations and charges on auction rate preferred equity securities collateralized by preferred stock of Fannie Mae and Freddie Mac. For the year ended December 31, 2008, OTTI charges totaled $68.2 million.
In the third quarter, a tax benefit recognized on the OTTI charge was based on the treatment of a substantial portion of the charge 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 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, therefore the fourth quarter results reflect the recognition of a $12.0 million tax benefit associated with the third quarter OTTI charge.
Net Interest Income
Net interest income was $17.3 million for the fourth quarter of 2008, up $567 thousand or 3% from the third quarter of 2008 and $2.1 million or 14% compared with the fourth quarter of 2007. Net interest margin improved to 4.07% in the fourth quarter of 2008, compared with 3.98% in the third quarter of 2008 and 3.75% in the fourth quarter of 2007. For the year ended 2008, net interest income was $65.3 million, compared with $58.1 million for the same period in 2007. Net interest margin improved to 3.93% versus 3.53% 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 fourth quarter of 2008 was $(25.1) million, compared with $(29.3) million and $5.0 million in the third quarter of 2008 and the fourth quarter of 2007, respectively. For the year ended December 31, 2008, noninterest income (loss) was $(48.8) million, compared with $20.7 million for the same period in 2007. The 2008 periods reflect OTTI charges on investment securities totaling $29.9 million for the fourth quarter and $68.2 million for the year ended December 31, 2008. Absent the OTTI charges in 2008, noninterest income would have been $4.8 million in the fourth quarter versus $5.2 million in the third quarter of 2008 and $5.0 million in the fourth quarter of 2007. The decrease, exclusive of OTTI charges, is primarily the result of lower service charges on deposits and broker-dealer fees and commissions offset by higher income from company owned life insurance due to a $20.0 million purchase of company owned life insurance made during the third quarter of 2008. For the full year 2008 noninterest income exclusive of OTTI charges was $19.4 million, compared with $20.7 million for full year 2007. The decrease is attributable to lower service charges on deposit accounts and 2007 including proceeds from corporate owned life insurance.
Noninterest Expense
Noninterest expense for the fourth quarter of 2008 was $15.4 million, compared with $14.5 million in the fourth quarter of 2007, respectively. The fourth quarter of 2008 results include a $557 thousand prepayment charge on the early repayment of borrowed funds and also a $259 thousand increase in FDIC insurance expense compared with the fourth quarter of last year. For the year ended December 31, 2008, noninterest expense was $57.5 million compared with $57.4 million for the same period in 2007. Total salaries and benefits cost declined $1.7 million for the full year 2008 compared with 2007, and was offset by a $599 thousand increase in occupancy and equipment expense, a $385 thousand increase in FDIC insurance cost, and the $557 thousand prepayment charge on borrowed finds.
Balance Sheet
Total assets at December 31, 2008 were $1.917 billion, up $59.0 million from $1.858 billion at December 31, 2007. Total loans were $1.121 billion at December 31, 2008, an increase of $156.9 million from $964.2 million at December 31, 2007, principally from a $120.1 million increase in indirect auto loans. Total deposits increased $57.3 million to $1.633 billion at December 31, 2008, versus $1.576 billion at December 31, 2007. Total borrowings, including junior subordinated debentures, increased $2.6 million to $70.8 million at December 31, 2008, up from $68.2 million at December 31, 2007. Total shareholders' equity at December 31, 2008 was $190.3 million, compared with $195.3 million at December 31, 2007. The Company's leverage ratio was 8.05% and total risk-based capital ratio was 13.08% at December 31, 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 $2.6 million for the fourth quarter of 2008, compared with $351 thousand in the fourth quarter of 2007. The increase in the provision for loan losses is primarily due to growth in the loan portfolio and the changing mix of the loan portfolio together with higher net charge offs. Net charge offs of $1.3 million for the fourth quarter of 2008 represented 46 basis points (annualized) of average loans. For the year ended December 31, 2008, net charge-offs were $3.3 million, or 32 basis points of average loans, compared with $1.6 million, or 18 basis points of average loans, for the year ended December 31, 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 $18.7 million at December 31, 2008, compared with $15.5 million at December 31, 2007. Non-performing loans were $8.2 million at December 31, 2008, compared with $7.6 million and $8.1 million at September 30, 2008 and December 31, 2007, respectively. The ratio of allowance for loan losses to non-performing loans improved to 229% at December 31, 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 over 50 offices and more than 70 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, and general economic and credit market conditions nationally and regionally. 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) 2008 2007 ---------------------------------------- --------- Dec. 31, Sept. 30, June 30, March 31, Dec. 31, ---------- --------- --------- --------- --------- SELECTED BALANCE SHEET DATA (Amounts in thousands) Cash and cash equivalents $ 55,187 76,704 63,049 102,999 46,673 Investment securities: Available for sale 547,506 607,357 669,752 688,504 695,241 Held-to-maturity 58,532 64,434 56,508 57,631 59,479 ---------- --------- --------- --------- --------- Total investment securities 606,038 671,791 726,260 746,135 754,720 Loans held for sale 1,013 1,008 926 1,099 906 Loans: Commercial 158,543 156,809 140,745 144,976 136,780 Commercial real estate 262,234 248,267 250,872 245,148 245,797 Agriculture 44,706 46,490 45,231 44,162 47,367 Residential real estate 177,683 173,893 172,396 168,738 166,863 Consumer indirect 255,054 227,971 177,967 142,565 134,977 Consumer direct and home equity 222,859 224,693 223,538 226,855 232,389 ---------- --------- --------- --------- --------- Total loans 1,121,079 1,078,123 1,010,749 972,444 964,173 Allowance for loan losses 18,749 17,420 16,038 15,549 15,521 ---------- --------- --------- --------- --------- Total loans, net 1,102,330 1,060,703 994,711 956,895 948,652 Total assets 1,916,919 1,945,819 1,895,448 1,912,652 1,857,876 Total interest- earning assets 1,743,141 1,789,499 1,749,808 1,771,676 1,722,122 Deposits: Noninterest- bearing demand 292,586 293,027 288,258 268,419 286,362 Interest-bearing demand 344,616 376,098 338,290 356,758 335,314 Savings and money market 348,594 383,456 372,317 380,167 346,639 Certificates of deposit 647,467 607,833 596,890 622,628 607,656 ---------- --------- --------- --------- --------- Total deposits 1,633,263 1,660,414 1,595,755 1,627,972 1,575,971 Borrowings 70,820 114,684 89,465 70,336 68,210 Total interest- bearing liabilities 1,411,497 1,482,071 1,396,962 1,429,889 1,357,819 Net interest- earning assets 331,644 307,428 352,846 341,787 364,303 Shareholders' equity 190,300 152,770 188,998 197,364 195,322 Common shareholders' equity (1) 137,226 135,195 171,417 179,783 177,741 Tangible common shareholders' equity (2) 99,577 97,468 133,614 141,903 139,786 Securities available for sale - fair value adjustment included in shareholders' equity, net of tax $ 3,463 (9,797) (5,803) 944 (500) Common shares outstanding 10,798 10,806 10,913 10,992 11,011 Treasury shares 550 542 435 356 337 CAPITAL RATIOS Leverage ratio 8.05% 7.37 9.17 9.38 9.35 Tier 1 risk-based capital 11.83% 11.10 14.58 15.34 15.74 Total risk based capital 13.08% 12.35 15.83 16.59 16.99 Common equity to assets 7.16% 6.95 9.04 9.40 9.57 Tangible common equity to tangible assets (2) 5.30% 5.11 7.19 7.57 7.68 Common book value per share $ 12.71 12.51 15.71 16.36 16.14 Tangible common book value per share (2) $ 9.22 9.02 12.24 12.91 12.69 FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) Years ended December 31, --------------------- 2008 2007 -------- -------- SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) Interest income $ 98,948 105,212 Interest expense 33,617 47,139 -------- -------- Net interest income 65,331 58,073 Provision for loan losses 6,551 116 -------- -------- Net interest income after provision for loan losses 58,780 57,957 -------- -------- Noninterest income (loss): Service charges on deposits 10,497 10,932 ATM and debit card 3,313 2,883 Broker-dealer fees and commissions 1,458 1,396 Loan servicing 664 928 Company owned life insurance 563 1,255 Net gain on sale of loans held for sale 339 779 Net gain (loss) on sale of other assets 305 102 Net gain on investment securities 288 207 Impairment charge on investment securities (68,215) -- Other 2,010 2,198 -------- -------- Total noninterest income (loss) (48,778) 20,680 -------- -------- Noninterest expense: Salaries and employee benefits 31,437 33,175 Occupancy and equipment 10,502 9,903 Computer and data processing 2,433 2,126 Professional services 2,141 2,080 Supplies and postage 1,800 1,662 Advertising and promotions 1,453 1,402 Other 7,695 7,080 -------- -------- Total noninterest expense 57,461 57,428 -------- -------- (Loss) income before income taxes (47,459) 21,209 Income tax expense (benefit) (21,301) 4,800 -------- -------- Net (loss) income $(26,158) 16,409 ======== ======== Preferred stock dividends 1,538 1,483 Net (loss) income applicable to common shareholders $(27,696) 14,926 ======== ======== STOCK AND RELATED PER SHARE DATA Net (loss) income per share - basic $ (2.56) 1.34 Net (loss) income per share - diluted $ (2.56) 1.33 Cash dividends declared $ 0.54 0.46 Common dividend payout ratio (3) NA% 34.33 Dividend yield (annualized) 3.76% 2.58 Stock price (Nasdaq:FISI): High $ 22.50 23.71 Low $ 10.06 16.18 Close $ 14.35 17.82 Quarterly Trends ------------------------------------------------ 2008 2007 -------------------------------------- -------- Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter -------- -------- -------- -------- -------- SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) Interest income $ 24,582 24,558 24,536 25,272 26,397 Interest expense 7,269 7,812 8,349 10,187 11,192 -------- -------- -------- -------- -------- Net interest income 17,313 16,746 16,187 15,085 15,205 Provision for loan losses 2,586 1,891 1,358 716 351 -------- -------- -------- -------- -------- Net interest income after provision for loan losses 14,727 14,855 14,829 14,369 14,854 -------- -------- -------- -------- -------- Noninterest income (loss): Service charges on deposits 2,685 2,794 2,518 2,500 2,818 ATM and debit card 853 852 856 752 805 Broker-dealer fees and commissions 235 363 401 459 343 Loan servicing 134 112 232 186 221 Company owned life insurance 294 223 27 19 116 Net gain on sale of loans held for sale 35 48 92 164 190 Net gain (loss) on sale of other assets 51 102 115 37 (58) Net gain on investment securities 56 12 47 173 88 Impairment charge on investment securities (29,870) (34,554) (3,791) -- -- Other 421 700 435 454 479 -------- -------- -------- -------- -------- Total noninterest income (loss) (25,106) (29,348) 932 4,744 5,002 -------- -------- -------- -------- -------- Noninterest expense: Salaries and employee benefits 7,811 7,021 8,169 8,436 8,240 Occupancy and equipment 2,713 2,642 2,567 2,580 2,582 Computer and data processing 669 603 580 581 533 Professional services 637 467 480 557 533 Supplies and postage 447 475 437 441 379 Advertising and promotions 548 472 283 150 396 Other 2,569 1,729 1,869 1,528 1,880 -------- -------- -------- -------- -------- Total noninterest expense 15,394 13,409 14,385 14,273 14,543 -------- -------- -------- -------- -------- (Loss) income before income taxes (25,773) (27,902) 1,376 4,840 5,313 Income tax expense (benefit) (22,631) 524 (255) 1,061 1,215 -------- -------- -------- -------- -------- Net (loss) income $ (3,142) (28,426) 1,631 3,779 4,098 ======== ======== ======== ======== ======== Preferred stock dividends 426 371 370 371 370 Net (loss) income applicable to common shareholders $ (3,568) (28,797) 1,261 3,408 3,728 ======== ======== ======== ======== ======== STOCK AND RELATED PER SHARE DATA Net (loss) income per share - basic $ (0.33) (2.68) 0.12 0.31 0.34 Net (loss) income per share - diluted $ (0.33) (2.68) 0.12 0.31 0.34 Cash dividends declared $ 0.10 0.15 0.15 0.14 0.13 Common dividend payout ratio (3) NA% NA 125.00 45.16 38.24 Dividend yield (annualized) 2.77% 2.98 3.76 2.97 2.89 Stock price (Nasdaq:FISI): High $ 20.27 22.50 20.00 20.78 19.80 Low $ 10.06 14.82 15.25 15.10 16.42 Close $ 14.35 20.01 16.06 18.95 17.82 FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) Years ended December 31, ------------------------ 2008 2007 ---------- ---------- SELECTED AVERAGE BALANCES (Amounts in thousands) Investment securities (4) $ 721,551 811,118 Loans (5): Commercial 149,927 119,823 Commercial real estate 247,475 244,357 Agriculture 45,035 53,356 Residential real estate 171,262 165,226 Consumer indirect 185,197 118,152 Consumer direct and home equity 224,343 236,910 ---------- ---------- Total loans 1,023,239 937,824 Total interest-earning assets 1,772,179 1,781,468 Total assets 1,905,345 1,907,037 Interest-bearing liabilities: Interest-bearing demand 347,702 338,326 Savings and money market 369,926 346,131 Certificates of deposit 617,381 672,239 Borrowings 91,715 80,609 ---------- ---------- Total interest-bearing liabilities 1,426,724 1,437,305 Noninterest-bearing demand deposits 280,467 266,239 Total deposits 1,615,476 1,622,935 Total liabilities 1,722,440 1,721,510 Net earning assets 345,455 344,163 Shareholders' equity 182,905 185,527 Common equity (1) 164,454 167,935 Tangible common equity (2) $ 126,643 129,818 Common shares outstanding: Basic 10,818 11,154 Diluted 10,818 11,184 SELECTED AVERAGE YIELDS/ RATES AND RATIOS (Tax equivalent basis) Investment securities 4.84% 4.90 Loans 6.61% 7.30 Total interest-earning assets 5.83% 6.17 Interest-bearing demand 0.93% 1.70 Savings and money market 1.02% 1.69 Certificates of deposit 3.62% 4.63 Borrowings 4.65% 5.49 Total interest-bearing liabilities 2.36% 3.28 Net interest rate spread 3.47% 2.89 Net interest rate margin 3.93% 3.53 Net (loss) income (annualized returns on): Average assets -1.37% 0.86 Average equity -14.30% 8.84 Average common equity (6) -16.84% 8.89 Average tangible common equity (7) -21.87% 11.50 Efficiency ratio (8) 64.07% 71.57 Equity to assets 9.60% 9.73 Common equity to assets (6) 8.63% 8.81 Tangible common equity to tangible assets (7) 6.78% 6.95 Quarterly Trends ------------------------------------------------------ 2008 2007 ------------------------------------------- ---------- Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter ---------- ---------- ---------- ---------- ---------- SELECTED AVERAGE BALANCES (Amounts in thousands) Investment securities (4) $ 666,917 721,419 744,648 753,823 786,343 Loans (5): Commercial 158,517 150,373 150,380 140,340 129,438 Commercial real estate 253,179 246,746 244,688 245,232 242,336 Agriculture 44,299 45,965 44,504 45,373 50,448 Residential real estate 175,200 173,175 169,925 166,682 167,551 Consumer indirect 244,891 200,586 156,728 137,756 132,372 Consumer direct and home equity 222,235 222,241 223,906 229,035 232,228 ---------- ---------- ---------- ---------- ---------- Total loans 1,098,321 1,039,086 990,131 964,418 954,373 Total interest -earning assets 1,782,938 1,774,201 1,771,801 1,759,635 1,756,169 Total assets 1,924,174 1,908,577 1,897,514 1,890,874 1,884,712 Interest- bearing liabilities: Interest- bearing demand 360,970 342,188 342,463 345,102 337,179 Savings and money market 373,034 366,449 378,799 361,425 358,198 Certificates of deposit 629,111 591,025 615,950 633,599 635,825 Borrowings 105,164 118,023 73,902 69,335 71,092 ---------- ---------- ---------- ---------- ---------- Total interest- bearing liabilities 1,468,279 1,417,685 1,411,114 1,409,461 1,402,294 Noninterest- bearing demand deposits 284,643 294,136 275,570 267,322 276,535 Total deposits 1,647,758 1,593,798 1,612,782 1,607,448 1,607,737 Total liabilities 1,766,239 1,727,473 1,702,211 1,693,300 1,694,297 Net earning assets 314,659 356,516 360,687 350,174 353,875 Shareholders' equity 157,935 181,104 195,303 197,574 190,415 Common equity (1) 136,887 163,527 177,722 179,993 172,834 Tangible common equity (2) $ 99,191 125,754 139,872 142,067 134,832 Common shares outstanding: Basic 10,717 10,738 10,879 10,938 11,022 Diluted 10,717 10,738 10,928 10,975 11,043 SELECTED AVERAGE YIELDS/ RATES AND RATIOS (Tax equivalent basis) Investment securities 4.72% 4.66 4.92 5.05 5.13 Loans 6.35% 6.52 6.65 6.97 7.25 Total interest -earning assets 5.69% 5.73 5.83 6.05 6.28 Interest- bearing demand 0.69% 0.86 0.89 1.30 1.61 Savings and money market 0.68% 0.93 1.02 1.47 1.70 Certificates of deposit 3.09% 3.33 3.72 4.31 4.54 Borrowings 4.23% 4.30 5.05 5.51 5.63 Total interest -bearing liabilities 1.97% 2.19 2.38 2.91 3.17 Net interest rate spread 3.72% 3.54 3.45 3.14 3.11 Net interest rate margin 4.07% 3.98 3.94 3.73 3.75 Net (loss) income (annualized returns on): Average assets -0.65% -5.93 0.35 0.80 0.86 Average equity -7.91% -62.44 3.36 7.69 8.54 Average common equity (6) -10.37% -70.06 2.85 7.62 8.56 Average tangible common equity (7) -14.31% -91.10 3.63 9.65 10.97 Efficiency ratio (8) 66.65% 58.10 64.21 67.64 66.84 Equity to assets 8.21% 9.49 10.29 10.45 10.10 Common equity to assets (6) 7.11% 8.57 9.37 9.52 9.17 Tangible common equity to tangible assets (7) 5.26% 6.72 7.52 7.67 7.30 FINANCIAL INSTITUTIONS, INC. Summary of Quarterly Financial Data (Unaudited) Years ended December 31, -------------------- 2008 2007 -------- -------- ASSET QUALITY DATA (Dollar amounts in thousands) Nonaccrual loans $ 8,189 8,075 Accruing loans past due 90 days or more 7 2 -------- -------- Total non-performing loans 8,196 8,077 Foreclosed assets 1,007 1,421 Non-performing investment securities 49 -- -------- -------- Total non-performing assets 9,252 9,498 ======== ======== Net loan charge-offs $ 3,323 1,643 Net charge-offs to average loans (annualized) 0.32% 0.18 Total non-performing loans to total loans 0.73% 0.84 Total non-performing assets to total assets 0.48% 0.51 Allowance for loan losses to total loans 1.67% 1.61 Allowance for loan losses to non-performing loans 229% 192 Quarterly Trends --------------------------------------- 2008 2007 ------------------------------- ------- Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter ------- ------- ------- ------- ------- ASSET QUALITY DATA (Dollar amounts in thousands) Nonaccrual loans $ 8,189 7,609 6,254 7,353 8,075 Accruing loans past due 90 days or more 7 32 1 2 2 ------- ------- ------- ------- ------- Total non-performing loans 8,196 7,641 6,255 7,355 8,077 Foreclosed assets 1,007 1,009 1,235 1,257 1,421 Non-performing investment securities 49 -- -- -- -- ------- ------- ------- ------- ------- Total non-performing assets 9,252 8,650 7,490 8,612 9,498 ======= ======= ======= ======= ======= Net loan charge-offs $ 1,257 509 869 687 441 Net charge-offs to average loans (annualized) 0.46% 0.20 0.35 0.29 0.18 Total non-performing loans to total loans 0.73% 0.71 0.62 0.76 0.84 Total non-performing assets to total assets 0.48% 0.44 0.40 0.45 0.51 Allowance for loan losses to total loans 1.67% 1.62 1.59 1.60 1.61 Allowance for loan losses to non-performing loans 229% 228 256 211 192 (1) Excludes preferred shareholders' equity. (2) Excludes preferred shareholders' equity, goodwill and other intangible assets. (3) 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. (4) Average investment securities shown at amortized cost. (5) Includes nonaccrual loans. (6) Net income available to common shareholders divided by average common equity. (7) Net income available to common shareholders divided by average tangible equity. (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.