HOUSTON, April 24, 2009 (GLOBE NEWSWIRE) -- Encore Bancshares, Inc. (Nasdaq:EBTX) today announced its financial results for the first quarter of 2009.
Improved earnings metrics * Revenue of $17.3 million improved 4.5% compared with the first quarter of 2008 * Pre-tax, pre-provision earnings grew 47.2% to $4.8 million compared with the first quarter of 2008 * Net interest income of $11.5 million on a fully tax equivalent basis (TE) was up 16.8% over the first quarter of 2008 * Net interest margin of 3.13% (TE) expanded 19 basis points compared with the first quarter of 2008 Continued to grow franchise * Loan growth of $22.6 million, or 2.0%, compared with March 31, 2008 * Noninterest bearing deposits grew $29.0 million, or 22.3% compared with March 31, 2008 Maintained strong capital position * Tier 1 capital of $174.0 million, or 14.83% tier 1 risk based capital ratio * $125.3 million of tangible common equity, or $12.24 per share * Tangible common equity ratio increased to 8.11% from 7.94% at December 31, 2008 Increased allowance for loan losses by $1.6 million to 2.26% of total loans, compared with 2.06% at December 31, 2008 Extended $38.4 million in new credit to businesses and consumers during the first quarter of 2009.
"In the first quarter of 2009, we earned $1.1 million and grew revenue and deposits, while increasing our allowance for loan losses," said James S. D'Agostino, Jr., Chairman and Chief Executive Officer. "Our strong capital and allowance position combined with our increased pre-provision pre-tax earnings, should enable us to withstand a further deterioration in economic conditions. At the same time, our experienced team continues to provide superior service to our clients, increase noninterest-bearing deposits, make sound loans, attract assets to manage, and maintain expense control, all of which provides us momentum for the future."
Earnings
For the three months ended March 31, 2009, net earnings were $1.1 million, or $0.05 per diluted common share, compared with $1.2 million, or $0.11 per diluted common share for the same period of 2008. The decrease in diluted earnings per share was due to the accrual of dividends on preferred stock which was issued in the fourth quarter of 2008. Results for the first quarter of 2009 include an improvement in net interest income (TE) of $1.7 million, or 16.8%, and a decrease in expenses of $807,000 due primarily to lower compensation expenses and professional fees. Offsetting these improvements were a $1.5 million increase in the provision for loan losses and lower noninterest income resulting from lower trust and investment management fees.
Net Interest Income
Net interest income (TE) for the first quarter of 2009 was $11.5 million, an increase of $1.7 million, or 16.8%, compared with the first quarter of 2008. The net interest margin (TE) improved 19 basis points to 3.13%. The growth in the margin was due in part to the falling rate environment as the yield on the loan portfolio fell less than the rate paid on deposits. In addition, we benefited from a $33.9 million, or 31.7%, increase in average noninterest-bearing deposits. On a linked quarter basis (compared with immediately preceding quarter), net interest income (TE) decreased $405,000, or 3.4%, and the net interest margin (TE) contracted 18 basis points. During the fourth quarter of 2008, the prime rate fell an extraordinary 1.75%, which immediately affected our variable rate loans. However, our deposits, particularly our certificates of deposit, were not able to fully capture this reduction in interest rates during the first quarter.
Noninterest Income
Noninterest income was $5.8 million for the first quarter of 2009, a decrease of $840,000, or 12.6%, compared with the same period of 2008. The decrease was due primarily to lower trust and investment management fees as assets under management fell 21.9% due to the sharp drop in equity markets. In addition, real estate operations decreased $300,000 compared with the first quarter of 2008 due primarily to taxes and legal fees.
Noninterest Expense
Noninterest expense was $12.5 million for the first quarter of 2009, a decrease of $807,000, or 6.1%, compared with the same period of 2008. The decrease was due primarily to a reduction in compensation and professional fees. The first quarter of 2008 included a $635,000 severance expense to a former executive of the bank, and $415,000 for legal fees associated with an arbitration matter that has since been resolved. Excluding these items, expenses for the first quarter of 2009 increased $243,000, or 2.0%, compared with adjusted expenses for the same period of 2008.
Segment Earnings
On a segment basis, our banking operation showed net earnings of $461,000 for the first quarter of 2009, an increase of $401,000, compared with the same period of 2008. Net interest income increased $1.6 million, or 15.9%, but this increase was largely offset by higher credit costs. Noninterest expense decreased $764,000, or 8.4%, which was due primarily to severance expense paid in 2008. Wealth management had net earnings of $446,000 for the first quarter of 2009, a decrease of $451,000, or 50.3%, compared with the same period of 2008. Revenue for this segment decreased due primarily to lower assets under management, which declined 21.9% as discussed above. Expenses were essentially flat. Our insurance agency had net earnings of $431,000 for the first quarter of 2009, essentially unchanged from the same period of 2008. Revenue decreased $38,000, or 2.2%, due primarily to a soft property and casualty market. Expenses decreased $71,000, or 6.4%, reflecting lower compensation expenses.
Loans
Period end loans were $1.2 billion at March 31, 2009, an increase of $22.6 million, or 2.0%, compared with March 31, 2008. In March, we sold a pool of approximately $4.8 million of second mortgage loans, recognizing a gain of $75,000. We extended approximately $38.4 million in new credit during the first quarter of 2009 to consumers and businesses.
Deposits
Period end deposits were $1.1 billion at March 31, 2009, an increase of $5.4 million, or 0.5%, compared with March 31, 2008. Noninterest-bearing deposits grew to $159.0 million at March 31, 2009, an increase of $29.0 million, or 22.3%, compared with March 31, 2008. Average deposits were $1.1 billion for the first quarter of 2009, an increase of $49.0 million, or 4.6%, compared with the same period of 2008.
Credit Quality and Capital Ratios
The provision for loan losses was $3.0 million for the first quarter of 2009, an increase of $1.5 million from the same period of 2008. The increase in the provision reflected the recessionary economic environment, weakness in our Florida market, and the higher net charge-offs compared with the first quarter of 2008. The provision for loan losses was $1.6 million greater than net charge-offs for the quarter, and increased our allowance for loan losses to total loans from 2.06% at December 31, 2008 to 2.26% at March 31, 2009. Net charge-offs for the first quarter of 2009 were $1.5 million, or 0.50% of average total loans on an annualized basis, compared with $1.1 million, or 0.38% of average total loans on an annualized basis for the first quarter of 2008. The increase in net charge-offs resulted primarily from consumer loans, which includes residential real estate loans.
At March 31, 2009, nonperforming assets were $40.2 million, or 3.40% of total loans and investment in real estate, compared with $34.0 million, or 2.78% of total loans and investment in real estate at December 31, 2008 and $16.5 million, or 1.42% of total loans and investment in real estate at March 31, 2008. At March 31, 2009, nonaccrual loans were $34.7 million, compared with $30.5 million at December 31, 2008. Most of this increase was due to commercial real estate loans in Florida. Investment in real estate was $5.5 million at March 31, 2009, compared with $2.8 million at December 31, 2008. The increase was due primarily to the repossession of commercial real estate property in Florida and several homes under construction in Houston.
As of March 31, 2009, our estimated Tier 1 risk-based, total risk-based, and leverage capital ratios were 14.83%, 16.09% and 11.26%, respectively, and Encore Bank was considered "well capitalized" pursuant to regulatory capital definitions.
Conference Call
A conference call will be held on Friday, April 24, 2009 at 10:00 a.m., Central time, to discuss first quarter 2009 results. A question and answer session will follow the prepared remarks. Individuals may access the call by dialing 1-877-591-4949, or access the live webcast by visiting www.encorebank.com/investorrelations.shtml
About Encore Bancshares, Inc.
Encore Bancshares, Inc. is a financial holding company headquartered in Houston, Texas and offers a broad range of banking, wealth management and insurance services through Encore Bank, N.A., and its affiliated companies. Encore Bank operates 11 private client offices in the Greater Houston area and six in southwest Florida. Headquartered in Houston and with $1.6 billion in assets, Encore Bank builds relationships with professional firms, privately-owned businesses, investors and affluent individuals. Encore Bank offers a full range of business and personal banking products and services, as well as financial planning, wealth management, trust and insurance products through its trust division, Encore Trust, and its affiliated companies, Linscomb & Williams and Town & Country Insurance. Products and services offered by Encore Bank's affiliates are not FDIC insured. The Company's common stock is listed on the NASDAQ Global Market under the symbol "EBTX".
The Encore Bancshares, Inc. logo is available athttp://www.globenewswire.com/newsroom/prs/?pkgid=4257
This press release contains certain financial information determined by methods other than in accordance with GAAP. Encore's management believes these non-GAAP financial measures provide information useful to investors in understanding our financial results and facilitates comparisons with the performance of peers within the financial services industry. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.
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. Such risks and uncertainties include, but are not limited to: competitive pressure among financial institutions; volatility and disruption in national and international financial markets; government intervention in the U.S. financial system; 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; changes in availability of funds; 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 from time to time in our 2008 Annual Report on Form 10-K and other reports and documents filed with the Securities and Exchange Commission.
Encore Bancshares, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Unaudited, amounts in thousands, except per share data)
As of and for the Three Months Ended
------------------------------------
March 31, Dec. 31,
------------------------ --------
2009 2008 2008
-------- -------- --------
Operations Statement Data:
Interest income $ 19,625 $ 20,532 $ 20,193
Interest expense 8,164 10,653 8,251
-------- -------- --------
Net interest income 11,461 9,879 11,942
Provision for loan losses 3,039 1,501 18,648
-------- -------- --------
Net interest income after provision
for loan losses 8,422 8,378 (6,706)
Noninterest income 5,837 6,677 3,488
Noninterest expense 12,470 13,277 12,414
-------- -------- --------
Net earnings (loss) before income
taxes 1,789 1,778 (15,632)
Income tax expense (benefit) 654 608 (5,679)
-------- -------- --------
Net earnings (loss) $ 1,135 $ 1,170 $ (9,953)
======== ======== ========
Earnings (loss) available to common
shareholders (1) $ 582 $ 1,170 $(10,119)
======== ======== ========
Common Share Data:
Basic earnings (loss) per share (2) $ 0.06 $ 0.12 $ (0.99)
Diluted earnings (loss) per share (2) 0.05 0.11 (0.99)
Book value per share 15.54 15.70 15.36
Tangible book value per share 12.24 12.30 12.05
Average common shares outstanding (2) 10,205 10,118 10,206
Diluted average common shares
outstanding (2) 10,852 10,827 10,206
Shares outstanding at end of period 10,233 10,154 10,241
Selected Performance Ratios:
Return on average assets 0.29% 0.33% (2.60)%
Return on average common equity (3) 1.49% 2.97% (25.03)%
Return on average tangible common
equity (3) 1.90% 3.80% (31.77)%
Net interest margin (4) 3.13% 2.94% 3.31%
Efficiency ratio 71.10% 79.06% 70.21%
Noninterest income to total revenue 33.74% 40.33% 22.61%
(1) Net earnings (loss) after deducting preferred dividends. The
shares of preferred stock were issued on December 5, 2008.
(2) Prior periods adjusted to include nonvested restricted stock in
average common shares outstanding as required by EITF 03-6-1.
(3) Using earnings (loss) available to common shareholders.
(4) On taxable-equivalent basis in 2009. Taxable-equivalent amounts
in 2008 were immaterial.
Encore Bancshares, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands, except per share data)
March 31, Dec 31, Sept 30, June 30, March 31,
2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
ASSETS
Cash and
due from
banks $ 19,313 $ 23,044 $ 21,005 $ 21,954 $ 16,608
Interest-
bearing
deposits
in banks 100,982 91,459 13,471 28,297 40,328
Federal
funds sold
and other 3,290 3,549 5,562 10,716 58,769
---------- ---------- ---------- ---------- ----------
Cash and
cash
equival-
ents 123,585 118,052 40,038 60,967 115,705
Securities
available-
for-sale,
at
estimated
fair value 77,875 78,816 57,077 41,508 12,108
Securities
held-to-
maturity,
at
amortized
cost 114,706 95,875 100,329 107,424 123,133
Mortgages
held-for-
sale 6,340 150 448 -- 1,928
Loans
receivable 1,179,083 1,218,404 1,198,445 1,169,151 1,156,501
Allowance
for loan
losses (26,664) (25,105) (14,620) (12,054) (11,603)
---------- ---------- ---------- ---------- ----------
Net loans
receiv-
able 1,152,419 1,193,299 1,183,825 1,157,097 1,144,898
Federal
Home Loan
Bank of
Dallas
stock, at
cost 9,547 9,534 10,513 7,943 6,987
Investment
in real
estate 5,537 2,781 2,215 2,063 2,078
Premises
and
equipment,
net 16,901 17,362 17,688 17,050 16,789
Goodwill 27,873 27,873 27,975 27,975 27,969
Other
intangible
assets,
net 5,861 6,031 6,218 6,406 6,592
Cash
surrender
value of
life
insurance
policies 14,870 14,686 14,539 14,398 14,256
Accrued
interest
receivable
and other
assets 22,210 23,385 17,358 17,882 16,183
---------- ---------- ---------- ---------- ----------
$1,577,724 $1,587,844 $1,478,223 $1,460,713 $1,488,626
========== ========== ========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-
interest-
bearing $ 158,994 $ 131,709 $ 121,100 $ 123,594 $ 129,983
Interest-
bearing 957,602 969,088 917,379 931,149 981,164
---------- ---------- ---------- ---------- ----------
Total
deposits 1,116,596 1,100,797 1,038,479 1,054,743 1,111,147
Borrowings
and
repurchase
agreements 244,999 272,026 249,426 212,257 188,845
Junior
subordi-
nated
debentures 20,619 20,619 20,619 20,619 20,619
Accrued
interest
payable
and other
liabilities 7,926 8,660 8,690 12,882 8,604
---------- ---------- ---------- ---------- ----------
Total
liabil-
ities 1,390,140 1,402,102 1,317,214 1,300,501 1,329,215
Commitments
and
contingen-
cies -- -- -- -- --
Share-
holders'
equity:
Preferred
stock 28,590 28,461 -- -- --
Common
stock 10,240 10,247 10,243 10,240 10,158
Additi-
onal
paid-in
capital 115,743 115,489 109,488 109,169 108,813
Retained
earnings 32,105 31,523 41,642 41,414 40,933
Common
stock
in
treasury,
at cost (109) (98) (98) (98) (69)
Accumu-
lated
other
compre-
hensive
income
(loss) 1,015 120 (266) (513) (424)
---------- ---------- ---------- ---------- ----------
Share-
holders'
equity 187,584 185,742 161,009 160,212 159,411
---------- ---------- ---------- ---------- ----------
$1,577,724 $1,587,844 $1,478,223 $1,460,713 $1,488,626
========== ========== ========== ========== ==========
Ratios and
Per Share
Data:
Leverage
ratio* 11.26% 11.61% 10.18% 10.07% 10.31%
Tier 1
risk-based
capital
ratio* 14.83% 14.58% 12.58% 12.82% 12.91%
Total
risk-based
capital
ratio* 16.09% 15.84% 13.87% 13.87% 13.94%
Book value
per share $ 15.54 $ 15.36 $ 15.73 $ 15.65 $ 15.70
Tangible
book value
per share 12.24 12.05 12.39 12.30 12.30
Tangible
common
equity to
tangible
assets 8.11% 7.94% 8.78% 8.82% 8.59%
* Estimated at March 31, 2009.
Encore Bancshares, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)
Three Months Ended
------------------------------------------------
March 31, Dec 31, Sept 30, June 30, March 31,
2009 2008 2008 2008 2008
-------- -------- -------- -------- --------
Interest income:
Loans, including
fees $ 17,479 $ 18,394 $ 18,738 $ 18,238 $ 18,378
Mortgages
held-for-sale 28 9 13 25 32
Securities 1,962 1,585 1,469 1,250 1,319
Federal funds sold
and other 156 205 261 552 803
-------- -------- -------- -------- --------
Total interest
income 19,625 20,193 20,481 20,065 20,532
Interest expense:
Deposits 5,732 5,748 6,458 7,123 8,542
Borrowings and
repurchase
agreements 2,116 2,174 2,085 1,767 1,755
Junior subordinated
debentures 316 329 330 330 356
-------- -------- -------- -------- --------
Total interest
expense 8,164 8,251 8,873 9,220 10,653
-------- -------- -------- -------- --------
Net interest income 11,461 11,942 11,608 10,845 9,879
Provision for
loan losses 3,039 18,648 5,249 3,777 1,501
-------- -------- -------- -------- --------
Net interest income
after provision
for loan losses 8,422 (6,706) 6,359 7,068 8,378
Noninterest income:
Trust and investment
management fees 3,749 3,985 4,277 4,660 4,407
Mortgage banking 151 34 28 135 54
Insurance
commissions
and fees 1,610 1,184 1,385 1,385 1,727
Real estate
operations (245) (50) (103) (452) 55
Net loss on sale of
available-for-sale
securities -- (1) (2) -- --
Impairment write
down on securities -- (1,984) -- -- --
Other 572 320 390 432 434
-------- -------- -------- -------- --------
Total noninterest
income 5,837 3,488 5,975 6,160 6,677
Noninterest expense:
Compensation 7,514 6,781 6,991 7,467 8,078
Occupancy 1,454 1,645 1,477 1,485 1,438
Equipment 433 448 494 487 531
Advertising
and promotion 216 232 187 219 204
Outside data
processing 764 797 762 717 694
Professional fees 936 904 671 739 1,156
Intangible
amortization 171 187 187 188 187
Other 982 1,420 1,304 1,295 989
-------- -------- -------- -------- --------
Total noninterest
expense 12,470 12,414 12,073 12,597 13,277
-------- -------- -------- -------- --------
Net earnings (loss)
before income
taxes 1,789 (15,632) 261 631 1,778
Income tax expense
(benefit) 654 (5,679) 33 150 608
-------- -------- -------- -------- --------
Net earnings (loss) $ 1,135 $ (9,953) $ 228 $ 481 $ 1,170
======== ======== ======== ======== ========
Earnings (loss)
available to common
shareholders $ 582 $(10,119) $ 228 $ 481 $ 1,170
======== ======== ======== ======== ========
Earnings (loss)
per common share:
Basic* $ 0.06 $ (0.99) $ 0.02 $ 0.05 $ 0.12
Diluted* 0.05 (0.99) 0.02 0.04 0.11
Average common shares
outstanding* 10,205 10,206 10,206 10,173 10,118
Diluted average
common shares
outstanding* 10,852 10,206 10,903 10,897 10,827
* Prior periods adjusted to include nonvested restricted stock in
average common shares outstanding as required by EITF 03-6-1.
Encore Bancshares, Inc. and Subsidiaries
AVERAGE CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands)
Three Months Ended
------------------------------------------------------
March 31, Dec 31, Sept 30, June 30, March 31,
2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Assets:
Interest-earning
assets:
Loans $1,208,697 $1,205,310 $1,186,606 $1,170,959 $1,119,439
Mortgages
held-for-sale 1,391 405 596 1,151 1,465
Securities 187,953 162,221 156,354 139,510 142,098
Federal funds
sold and
other 95,314 66,057 40,128 82,841 89,419
---------- ---------- ---------- ---------- ----------
Total interest
-earning
assets 1,493,355 1,433,993 1,383,684 1,394,461 1,352,421
Less: Allowance
for loan
losses (25,181) (14,275) (12,630) (11,526) (11,178)
Noninterest
-earning
assets 111,018 102,341 108,224 103,918 102,266
---------- ---------- ---------- ---------- ----------
Total assets $1,579,192 $1,522,059 $1,479,278 $1,486,853 $1,443,509
========== ========== ========== ========== ==========
Liabilities and
shareholders'
equity:
Interest
-bearing
liabilities:
Interest
checking $ 181,976 $ 179,797 $ 192,424 $ 194,973 $ 182,483
Money market
and savings 228,402 244,195 283,130 307,047 333,241
Time deposits 555,006 495,880 448,983 466,199 434,597
---------- ---------- ---------- ---------- ----------
Total
interest
-bearing
deposits 965,384 919,872 924,537 968,219 950,321
Borrowings and
repurchase
agreements 255,526 267,081 240,104 202,229 193,855
Junior
subordinated
debentures 20,619 20,619 20,619 20,619 20,619
---------- ---------- ---------- ---------- ----------
Total
interest
-bearing
liabilities 1,241,529 1,207,572 1,185,260 1,191,067 1,164,795
---------- ---------- ---------- ---------- ----------
Noninterest
-bearing
liabilities:
Noninterest
-bearing
deposits 140,821 133,226 119,024 123,453 106,905
Other
liabilities 10,269 11,244 12,186 12,015 13,313
---------- ---------- ---------- ---------- ----------
Total
liabilities 1,392,619 1,352,042 1,316,470 1,326,535 1,285,013
Shareholders'
equity 186,573 170,017 162,808 160,318 158,496
---------- ---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity $1,579,192 $1,522,059 $1,479,278 $1,486,853 $1,443,509
========== ========== ========== ========== ==========
Encore Bancshares, Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(Unaudited, dollars in thousands)
March 31, Dec 31, Sept 30, June 30, March 31,
Loan Portfolio: 2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Commercial:
Commercial $ 127,279 $ 135,534 $ 130,484 $ 127,639 $ 142,259
Commercial
real estate 315,090 311,909 305,570 298,562 291,543
Real estate
construction 87,352 95,668 96,450 91,371 97,807
---------- ---------- ---------- ---------- ----------
Total
commercial 529,721 543,111 532,504 517,572 531,609
Consumer:
Residential
real estate
first lien 229,981 241,969 247,765 256,201 264,445
Residential
real estate
second lien 294,994 302,141 291,933 269,409 234,623
Home equity
lines 80,099 82,555 79,888 79,913 78,860
Consumer
installment
- indirect 12,643 14,409 16,461 18,806 21,917
Consumer other 31,645 34,219 29,894 27,250 25,047
---------- ---------- ---------- ---------- ----------
Total consumer 649,362 675,293 665,941 651,579 624,892
---------- ---------- ---------- ---------- ----------
Total loans
receivable $1,179,083 $1,218,404 $1,198,445 $1,169,151 $1,156,501
========== ========== ========== ========== ==========
Nonperforming
Assets:
Nonaccrual
loans $ 34,698 $ 30,531 $ 21,142 $ 12,118 $ 14,131
Accruing loans
past due 90
days or more* -- 646 23 240 283
Restructured
loans** -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total
nonperforming
loans 34,698 31,177 21,165 12,358 14,414
---------- ---------- ---------- ---------- ----------
Investment in
real estate 5,537 2,781 2,215 2,063 2,078
---------- ---------- ---------- ---------- ----------
Total
nonperforming
assets $ 40,235 $ 33,958 $ 23,380 $ 14,421 $ 16,492
========== ========== ========== ========== ==========
Asset Quality
Ratios:
Nonperforming
assets to
total loans
and investment
in real estate 3.40% 2.78% 1.95% 1.23% 1.42%
Net charge-offs
to average
loans 0.50% 2.69% 0.90% 1.14% 0.38%
Allowance for
loan losses to
period end
loans 2.26% 2.06% 1.22% 1.03% 1.00%
Allowance for
loan losses to
nonperforming
loans 76.85% 80.52% 69.08% 97.54% 80.50%
Deposits:
Noninterest
-bearing
deposits $ 158,994 $ 131,709 $ 121,100 $ 123,594 $ 129,983
Interest
checking 171,881 197,384 182,456 186,902 190,633
Money market
and savings 215,726 252,571 268,969 292,631 338,386
Time deposits
less than
$100,000 207,648 188,302 192,603 198,603 201,735
---------- ---------- ---------- ---------- ----------
Core deposits 754,249 769,966 765,128 801,730 860,737
---------- ---------- ---------- ---------- ----------
Time deposits
$100,000 and
greater 330,919 274,903 245,018 239,556 233,462
Brokered
deposits 31,428 55,928 28,333 13,457 16,948
---------- ---------- ---------- ---------- ----------
Total
deposits $1,116,596 $1,100,797 $1,038,479 $1,054,743 $1,111,147
========== ========== ========== ========== ==========
Assets Under
Management $2,137,137 $2,248,047 $2,607,702 $2,736,790 $2,737,603
========== ========== ========== ========== ==========
* As of March 31, 2009, loans past due 90 days or more are either
charged-off or included in nonaccrual loans. ** All troubled debt
restructurings are included in nonaccrual loans.
Encore Bancshares, Inc. and Subsidiaries
ALLOWANCE FOR LOAN LOSSES
(Unaudited, dollars in thousands)
Three Months Ended
------------------------------------------------
March 31, Dec 31, Sept 30, June 30, March 31,
2009 2008 2008 2008 2008
-------- -------- -------- -------- --------
Allowance for loan
losses at beginning
of quarter $ 25,105 $ 14,620 $ 12,054 $ 11,603 $ 11,161
Charge-offs:
Commercial:
Commercial (236) (5,950) (301) (2,119) (231)
Commercial real
estate (99) (751) (407) (289) (80)
Real estate
construction (239) (408) (356) (57) (9)
-------- -------- -------- -------- --------
Total commercial (574) (7,109) (1,064) (2,465) (320)
-------- -------- -------- -------- --------
Consumer:
Residential real
estate first lien (34) (142) (256) (193) (43)
Residential real
estate second lien (454) (378) (417) (151) (377)
Home equity lines (282) (477) (831) (463) (42)
Consumer installment
- indirect (261) (265) (254) (200) (297)
Consumer other (48) (23) (23) (5) (29)
-------- -------- -------- -------- --------
Total consumer (1,079) (1,285) (1,781) (1,012) (788)
-------- -------- -------- -------- --------
Total charge-offs (1,653) (8,394) (2,845) (3,477) (1,108)
-------- -------- -------- -------- --------
Recoveries:
Commercial:
Commercial 22 111 8 9 11
Commercial
real estate -- -- -- 6 --
Real estate
construction -- -- -- -- --
-------- -------- -------- -------- --------
Total commercial 22 111 8 15 11
-------- -------- -------- -------- --------
Consumer:
Residential real
estate first lien 34 18 3 19 1
Residential real
estate second lien 17 71 54 3 2
Home equity lines 24 3 4 -- 2
Consumer installment
- indirect 76 15 81 37 6
Consumer other - 13 12 77 27
-------- -------- -------- -------- --------
Total consumer 151 120 154 136 38
-------- -------- -------- -------- --------
Total recoveries 173 231 162 151 49
-------- -------- -------- -------- --------
Net charge-offs (1,480) (8,163) (2,683) (3,326) (1,059)
-------- -------- -------- -------- --------
Provision for
loan losses 3,039 18,648 5,249 3,777 1,501
-------- -------- -------- -------- --------
Allowance for loan
losses at end
of quarter $ 26,664 $ 25,105 $ 14,620 $ 12,054 $ 11,603
======== ======== ======== ======== ========
Encore Bancshares, Inc. and Subsidiaries
SEGMENT OPERATIONS
(Unaudited, dollars in thousands)
As of and for the Three Months Ended
------------------------------------------------------
March 31, Dec 31, Sept 30, June 30, March 31,
2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Banking
-------
Net interest
income $ 11,736 $ 12,223 $ 11,871 $ 11,116 $ 10,130
Provision for
loan losses 3,039 18,648 5,249 3,777 1,501
Noninterest
income 394 (1,669) 300 66 519
Noninterest
expense 8,339 9,234 7,988 8,823 9,103
---------- ---------- ---------- ---------- ----------
Earnings
(loss) before
income taxes 752 (17,328) (1,066) (1,418) 45
Income tax
expense
(benefit) 291 (6,251) (446) (586) (15)
---------- ---------- ---------- ---------- ----------
Net earnings
(loss) $ 461 $ (11,077)$ (620)$ (832)$ 60
========== ========== ========== ========== ==========
Total assets
at quarter
end $1,584,698 $1,592,933 $1,481,311 $1,472,045 $1,500,462
========== ========== ========== ========== ==========
Wealth
Management
-----------
Net interest
income $ 38 $ 44 $ 51 $ 37 $ 64
Noninterest
income 3,749 3,985 4,277 4,660 4,407
Noninterest
expense 3,098 2,179 3,083 2,725 3,070
---------- ---------- ---------- ---------- ----------
Earnings
before income
taxes 689 1,850 1,245 1,972 1,401
Income tax
expense 243 606 451 709 504
---------- ---------- ---------- ---------- ----------
Net earnings $ 446 $ 1,244 $ 794 $ 1,263 $ 897
========== ========== ========== ========== ==========
Total assets
at quarter
end $ 48,648 $ 47,879 $ 49,263 $ 48,146 $ 47,444
========== ========== ========== ========== ==========
Insurance
---------
Net interest
income $ 3 $ 4 $ 16 $ 22 $ 41
Noninterest
income 1,694 1,172 1,398 1,458 1,732
Noninterest
expense 1,033 1,001 1,002 1,049 1,104
---------- ---------- ---------- ---------- ----------
Earnings
before income
taxes 664 175 412 431 669
Income tax
expense 233 85 147 154 240
---------- ---------- ---------- ---------- ----------
Net earnings $ 431 $ 90 $ 265 $ 277 $ 429
========== ========== ========== ========== ==========
Total assets
at quarter
end $ 7,695 $ 6,738 $ 6,997 $ 13,188 $ 10,143
========== ========== ========== ========== ==========
Other
-----
Net interest
expense $ (316)$ (329)$ (330)$ (330)$ (356)
Noninterest
income -- -- -- (24) 19
---------- ---------- ---------- ---------- ----------
Loss before
income taxes (316) (329) (330) (354) (337)
Income
tax benefit (113) (119) (119) (127) (121)
---------- ---------- ---------- ---------- ----------
Net loss $ (203)$ (210)$ (211)$ (227)$ (216)
========== ========== ========== ========== ==========
Total assets
at quarter
end $ (63,317)$ (59,706)$ (59,348)$ (72,666)$ (69,423)
========== ========== ========== ========== ==========
Consolidated
------------
Net interest
income $ 11,461 $ 11,942 $ 11,608 $ 10,845 $ 9,879
Provision for
loan losses 3,039 18,648 5,249 3,777 1,501
Noninterest
income 5,837 3,488 5,975 6,160 6,677
Noninterest
expense 12,470 12,414 12,073 12,597 13,277
---------- ---------- ---------- ---------- ----------
Earnings
(loss) before
income taxes 1,789 (15,632) 261 631 1,778
Income tax
expense
(benefit) 654 (5,679) 33 150 608
---------- ---------- ---------- ---------- ----------
Net earnings
(loss) $ 1,135 $ (9,953)$ 228 $ 481 $ 1,170
========== ========== ========== ========== ==========
Total assets
at quarter
end $1,577,724 $1,587,844 $1,478,223 $1,460,713 $1,488,626
========== ========== ========== ========== ==========
Encore Bancshares, Inc. and Subsidiaries
YIELD ANALYSIS
(Unaudited, dollars in thousands)
Three Months Ended March 31,
----------------------------------------------------
2009 2008
------------------------- -------------------------
Avg Interest Avg Avg Interest Avg
Outstanding Income/ Yield/ Outstanding Income/ Yield/
Balance Expense Rate Balance Expense Rate
---------- ------- ---- ---------- ------- ----
Assets:
Interest-earning
assets:
Loans* $1,208,697 $17,544 5.89% $1,119,439 $18,378 6.60%
Mortgages
held-for-sale 1,391 28 8.16% 1,465 32 8.79%
Securities* 187,953 1,973 4.26% 142,098 1,319 3.73%
Federal funds
sold and other 95,314 156 0.66% 89,419 803 3.61%
---------- ------- ---------- -------
Total
interest-earning
assets* 1,493,355 19,701 5.35% 1,352,421 20,532 6.11%
Less:
Allowance for
loan losses (25,181) (11,178)
Noninterest-
earning assets 111,018 102,266
---------- ----------
Total assets $1,579,192 $1,443,509
========== ==========
Liabilities and
shareholders'
equity:
Interest-bearing
liabilities:
Interest
checking $ 181,976 $ 213 0.47% $ 182,483 $ 953 2.10%
Money market
and savings 228,402 678 1.20% 333,241 2,380 2.87%
Time deposits 555,006 4,841 3.54% 434,597 5,209 4.82%
---------- ------- ---------- -------
Total
interest-
bearing
deposits 965,384 5,732 2.41% 950,321 8,542 3.62%
Borrowings and
repurchase
agreements 255,526 2,116 3.36% 193,855 1,755 3.64%
Junior
subordinated
debentures 20,619 316 6.22% 20,619 356 6.94%
---------- ------- ---------- -------
Total
interest-
bearing
liabilities 1,241,529 8,164 2.67% 1,164,795 10,653 3.68%
---------- ------- ---------- -------
Noninterest-
bearing
liabilities:
Noninterest-
bearing
deposits 140,821 106,905
Other
liabilities 10,269 13,313
---------- ----------
Total
liabilities 1,392,619 1,285,013
Shareholders'
equity 186,573 158,496
---------- ----------
Total
liabilities and
shareholders'
equity $1,579,192 $1,443,509
========== ==========
Net interest
income* $11,537 $ 9,879
======= =======
Net interest
spread* 2.68% 2.43%
Net interest
margin* 3.13% 2.94%
* On taxable-equivalent basis in 2009. Taxable-equivalent amounts in
2008 were immaterial.