SAN JOSE, Calif., July 23, 2009 (GLOBE NEWSWIRE) -- Heritage Commerce Corp (Nasdaq:HTBK), parent company of Heritage Bank of Commerce, today reported a second quarter 2009 net loss available to common shareholders of $6.0 million, or $(0.51) per diluted common share, which included a $10.7 million provision for loan losses and $591,000 in dividends and discount accretion on preferred stock. In the second quarter a year ago, the net loss available to common shareholders was $3.1 million, or $(0.26) per diluted common share, which included a $7.8 million provision for loan losses and no preferred dividends.
For the first half of 2009, the Company reported a net loss available to common shareholders of $10.5 million, or $(0.89) per diluted common share, which included a $21.1 million provision for loan losses and $1.2 million in dividends and discount accretion on preferred stock. For the first half of 2008, the net loss available to common shareholders was $1.4 million, or $(0.11) per diluted common share, which included a $9.5 million provision for loan losses and no preferred dividends.
Second Quarter Developments
* The net interest margin increased 20 basis points to 3.55% in the second quarter of 2009 from 3.35% in the first quarter of 2009. * The leverage ratio was 9.8% at June 30, 2009. * Total assets were $1.44 billion, a decrease of 3% from a year ago and a decrease of 2% over the past quarter. * $20.5 million of SBA loans were transferred to loans held-for- sale at June 30, 2009 in anticipation of loan sales. * Loans, excluding loans held-for-sale, decreased 4% to $1.16 billion from $1.21 billion a year ago and March 31, 2009, with land and construction loans down $13.4 million to $230.8 million from March 31, 2009. * Deposits remained flat at $1.16 billion at June 30, 2009, compared to $1.17 billion at the end of the prior quarter. * Nonperforming assets increased $4.9 million to $61.7 million, or 4.30% of total assets, from $56.9 million, or 3.89% of total assets at March 31, 2009. * The allowance for loan losses increased to $31.4 million, or 2.70% of total loans, compared to $20.9 million, or 1.73%, a year ago, and $23.9 million, or 1.97%, at March 31, 2009.
"While nonperforming assets increased in the quarter, the rate of increase slowed from earlier this year. The substantial provision for loan losses resulted in a loss for the second quarter," said Walter Kaczmarek, President and Chief Executive Officer. "However, we are seeing increased sales activity in our residential housing portfolio, which is reflected in paydowns on our land and construction loans. With low mortgage rates, the tax incentives for home buyers and rising affordability, we are seeing buyers entering the market." According to the California Association of Realtors, the unsold inventory of single-family homes in May fell to a 4.2 months supply -- less than half the 8.7 month supply a year ago.
"We continue to focus on preserving capital, credit quality and improving the net interest margin in what continues to be a very challenging economic environment," Mr. Kaczmarek continued. "We are proceeding cautiously in the execution of our business plan. We have filed a shelf registration statement with the SEC to provide more options and flexibility to raise capital in the future in the event strategic opportunities and/or favorable market conditions present themselves."
Balance Sheet, Capital Management and Credit Quality
At June 30, 2009, the Company's assets totaled $1.44 billion, compared to $1.49 billion a year ago and $1.46 billion at March 31, 2009. The Company transferred $20.5 million of SBA loans to loans held-for-sale in the second quarter of 2009. The Company plans to sell these loans, as well as at least a portion of new SBA loans, to enhance its liquidity position and improve noninterest income in future periods. Loans, excluding loans held-for-sale, totaled $1.16 billion at June 30, 2009, compared to $1.21 billion at June 30, 2008 and $1.21 billion at March 31, 2009. Deposits remained essentially flat at $1.16 billion at June 30, 2009, compared to June 30, 2008 and March 31, 2009. Commercial loans account for 39% of the total loan portfolio and commercial real estate loans, of which more than half are owner occupied, account for 36% of the portfolio. Land and construction loans decreased $13.4 million from March 31, 2009 and account for 20% of the portfolio, and consumer and home equity loans account for the remaining 5% of the total.
The securities portfolio of $101.8 million at June 30, 2009 consisted primarily of U.S. government sponsored entities' debt securities, short-term U.S. Treasury securities, mortgage-backed securities, collateralized mortgage obligations, and municipal bonds.
Nonperforming assets totaled $61.7 million, or 4.30% of total assets at June 30, 2009, compared to $14.3 million, or 0.96% of total assets a year ago, and $56.9 million, or 3.89% of total assets at March 31, 2009. The majority of nonperforming assets are in the construction and land development portfolio, accounting for 63% of nonperforming assets, with commercial and industrial loans accounting for 18%, commercial real estate loans accounting for 4%, SBA loans at 10% and other real estate owned ("OREO") at 5%.
Total OREO was $3.1 million, comprised of six properties, at June 30, 2009, up from $802,000, comprised of two properties, at March 31, 2009. In the second quarter of 2009, five properties moved from nonaccrual status into OREO and one property was sold. The increase in OREO during the quarter was primarily from a small commercial building in Santa Clara County, and a land parcel in Contra Costa County.
The allowance for loan losses at June 30, 2009 was $31.4 million, or 2.70% of total loans, and represented 53.51% of nonperforming loans. The allowance for loan losses a year ago was $20.9 million, or 1.73% of total loans and 152.14% of nonperforming loans. The allowance for loan losses at March 31, 2009, was $23.9 million, or 1.97% of total loans and 42.63% of nonperforming loans.
Shareholders' equity was $174.6 million, or $11.55 book value per common share, at June 30, 2009, compared to $141.7 million, or $12.01 book value per common share, a year ago. The increase in shareholders' equity was due to the issuance of $40 million in preferred stock to the U.S. Treasury as a participant in its Capital Purchase Program during the fourth quarter of 2008. Shareholders' equity was $180.3 million, or $12.04 book value per common share, at March 31, 2009. The Company's consolidated leverage ratio at June 30, 2009, was 9.80%, compared to 8.36% at June 30, 2008, and 10.41% at March 31, 2009.
Operating Results
Net interest income decreased 10% to $11.7 million for the second quarter of 2009, compared to $13.0 million for the second quarter of 2008, but increased 5% from $11.2 million for the first quarter of 2009. The net interest margin was 3.55% for the second quarter of 2009, compared to 4.00% for the second quarter a year ago and 3.35% for the first quarter of 2009. The 20 basis point increase in the net interest margin for the second quarter of 2009 compared to the first quarter of 2009 was primarily due to lower cost of funds. The decrease in the net interest margin from the second quarter of 2008 was primarily the result of the 275 basis point decline in short-term interest rates from March 18, 2008 through December 16, 2008.
Noninterest income was $1.6 million for the second quarter of 2009, compared to $1.8 million for the second quarter of 2008 and $1.6 million for the first quarter of 2009. In the first six months of 2009, noninterest income was $3.2 million, compared to $3.3 million in the first six months a year ago.
Noninterest expense was $12.1 million for the second quarter of 2009, compared to $11.0 million in the second quarter of 2008 and $11.4 million in the first quarter of 2009. In the first six months of 2009, noninterest expense was $23.4 million, compared to $21.6 million in the first six months a year ago. Regulatory assessments were $1.2 million in the second quarter of 2009, including a $657,000 charge for the FDIC special assessment levied on all FDIC insured banks, compared to $196,000 in the second quarter of 2008, and $739,000 in the first quarter of 2009. Professional fees were $1.2 million in the second quarter of 2009, compared to $980,000 in the second quarter of 2008, and $913,000 in the first quarter of 2009. The increase in professional fees was primarily due to legal fees related to problem loans and the branch acquisition transaction that was terminated in the second quarter of 2009. Other noninterest expense increased primarily due to problem loan expense. Problem loan expense was $298,000 in the second quarter of 2009, compared to $5,000 in the second quarter of 2008, and $6,000 in the first quarter of 2009.
The income tax benefit for the quarter ended June 30, 2009 was $4.1 million, as compared to $955,000 in the second quarter a year ago, and $5.1 million in the first quarter of 2009. In the first six months of 2009, the income tax benefit was $9.2 million, compared to $271,000 in the first six months a year ago. The negative effective income tax rates are due to the loss before income taxes. The difference in the effective tax rate compared to the combined federal and state statutory tax rate of 42% is primarily the result of the Company's investment in life insurance policies whose earnings are not subject to taxes, tax credits related to investments in low income housing limited partnerships and interest income from tax-free municipal securities.
The efficiency ratio was 90.90% in the second quarter of 2009, compared to 74.51% in the second quarter of 2008 and 88.94% in the first quarter of 2009. The efficiency ratio for the first six months of 2009 increased to 89.94% from 73.45% a year ago. The efficiency ratio increased in 2009 primarily due to compression of the net interest margin and an increase in noninterest expense, as discussed above.
Investor Conference
Heritage Commerce Corp is scheduled to present at the Keefe, Bruyette & Woods 10th Annual Community Bank Investor Conference in New York. Walter T. Kaczmarek, President and Chief Executive Officer, and Lawrence D. McGovern, Chief Financial Officer, are scheduled to present on Tuesday, July 28th at 11:00 a.m. EDT. The presentation will be archived for 60 days after the conference, and can be viewed at http://www.kbw.com/news/conferences.html.
Heritage Commerce Corp, a bank holding company established in February 1998, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose with full-service branches in Los Gatos, Fremont, Danville, Pleasanton, Walnut Creek, Morgan Hill, Gilroy, Mountain View, and Los Altos. Heritage Bank of Commerce is an SBA Preferred Lender with Loan Production Offices in Sacramento, Oakland and Santa Rosa, California. For more information, please visit www.heritagecommercecorp.com.
Forward Looking Statement Disclaimer
Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the Company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) difficult and adverse conditions in the global and domestic capital and credit markets, (2) continued volatility and further deterioration of the capital and credit markets, (3) significant changes in banking laws or regulations, including, without limitation, as a result of the Emergency Economic Stabilization Act, the American Reinvestment and Recovery Act, and possible amendments to the Troubled Asset Relief Program (TARP), including the Capital Purchase Program and related executive compensation requirements, (4) continued uncertainty about the impact of TARP and other recent federal programs on the financial markets including levels of volatility and credit availability, (5) a more adverse than expected decline or continued weakness in general business and economic conditions, either nationally, regionally or locally in areas where the Company conducts its business, which may affect, among other things, the level of nonperforming assets, charge-offs and loan provision expense, (6) changes in interest rates, reducing interest rate margins or increasing interest rate risks, (7) changes in market liquidity which may reduce interest margins and impact funding sources, (8) increased competition in the Company's markets, (9) changes in the financial performance and/or condition of the Company's borrowers, (10) current and further deterioration in the housing and commercial real estate markets particularly in California, and (11) increases in Federal Deposit Insurance Corporation premiums due to market developments and regulatory changes. For a discussion of factors which could cause results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company's press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
Percent
For the Three Months Ended: Change From:
------------------------------------ -----------------
CONSOLIDATED
INCOME
STATEMENTS
(in $000's, June 30, Mar. 31, June 30, Mar. 31, June 30,
unaudited) 2009 2009 2008 2009 2008
--------------------------------------------------- -----------------
Interest
Income $ 15,824 $ 16,033 $ 18,699 -1% -15%
Interest
Expense 4,135 4,881 5,731 -15% -28%
------------------------------------
Net
Interest
Income 11,689 11,152 12,968 5% -10%
Provision for
Loan Losses 10,704 10,420 7,800 3% 37%
------------------------------------
Net
Interest
income
after
Provision
for Loan
Losses 985 732 5,168 35% -81%
Noninterest
Income:
Servicing
Income 408 420 377 -3% 8%
Increase in
Cash
Surrender
Value of
Life
Insurance 415 412 418 1% -1%
Service
Charges
and Other
Fees on
Deposit
Accounts 537 571 537 -6% 0%
Other 241 220 460 10% -48%
------------------------------------
Total
Noninterest
Income 1,601 1,623 1,792 -1% -11%
------------------------------------
Noninterest
Expense:
Salaries
and
Employee
Benefits 5,643 6,458 5,970 -13% -5%
Professional
Fees 1,229 913 980 35% 25%
Regulatory
Assessments 1,220 739 196 65% 522%
Occupancy
and
Equipment 972 916 1,044 6% -7%
Other 3,016 2,336 2,808 29% 7%
------------------------------------
Total
Noninterest
Expense 12,080 11,362 10,998 6% 10%
------------------------------------
Income (Loss)
Before
Income
Taxes (9,494) (9,007) (4,038) 5% 135%
Income Tax
Expense
(Benefit) (4,113) (5,052) (955) -19% 331%
------------------------------------
Net Income
(Loss) $ (5,381) $ (3,955) $ (3,083) 36% 75%
Dividends
and Discount
Accretion on
Preferred
Stock (591) (585) -- 1% N/A
------------------------------------
Net Income
(Loss)
Available to
Common
Shareholders $ (5,972) $ (4,540) $ (3,083) 32% 94%
====================================
PER COMMON
SHARE DATA
(unaudited)
Basic
Earnings
(Loss) Per
Share $ (0.51) $ (0.38) $ (0.26) 34% 96%
Diluted
Earnings
(Loss) Per
Share $ (0.51) $ (0.38) $ (0.26) 34% 96%
Common
Shares
Outstanding
at
Period-End 11,820,509 11,820,509 11,806,167 0% 0%
Book Value
Per Share $ 11.55 $ 12.04 $ 12.01 -4% -4%
Tangible
Book Value
Per Share $ 7.56 $ 8.04 $ 7.96 -6% -5%
KEY
FINANCIAL
RATIOS
(unaudited)
Annualized
Return on
Average
Equity -11.90% -8.65% -8.34% -38% -43%
Annualized
Return on
Average
Tangible
Equity -16.08% -11.62% -12.30% -38% -31%
Annualized
Return on
Average
Assets -1.48% -1.08% -0.85% -37% -74%
Annualized
Return on
Average
Tangible
Assets -1.53% -1.12% -0.88% -37% -74%
Net Interest
Margin 3.55% 3.35% 4.00% 6% -11%
Efficiency
Ratio 90.90% 88.94% 74.51% 2% 22%
AVERAGE
BALANCES
(in $000's,
unaudited)
Average
Assets $1,457,162 $1,484,544 $1,456,396 -2% 0%
Average
Tangible
Assets $1,409,973 $1,437,195 $1,408,536 -2% 0%
Average
Earning
Assets $1,320,604 $1,351,921 $1,304,987 -2% 1%
Average
Loans Held-
for-Sale $ 225 $ -- $ -- N/A N/A
Average
Total Loans $1,206,254 $1,236,361 $1,170,274 -2% 3%
Average
Deposits $1,150,220 $1,163,552 $1,169,860 -1% -2%
Average
Demand
Deposits -
Noninterest
Bearing $ 255,011 $ 253,481 $ 260,361 1% -2%
Average
Interest
Bearing
Deposits $ 895,209 $ 910,071 $ 909,499 -2% -2%
Average
Interest
Bearing
Liabilities $ 992,010 $1,016,395 $1,018,685 -2% -3%
Average
Equity $ 181,396 $ 185,424 $ 148,660 -2% 22%
Average
Tangible
Equity $ 134,207 $ 138,075 $ 100,800 -3% 33%
For the Six Months Ended:
-------------------------
CONSOLIDATED
INCOME
STATEMENTS
(in $000's, June 30, June 30, Percent
unaudited) 2009 2008 Change
------------------------- -------
Interest
Income $ 31,857 $ 38,594 -17%
Interest
Expense 9,016 12,522 -28%
-------------------------
Net
Interest
Income 22,841 26,072 -12%
Provision for
Loan Losses 21,124 9,450 124%
-------------------------
Net
Interest
income
after
Provision
for Loan
Losses 1,717 16,622 -90%
Noninterest
Income:
Servicing
Income 828 856 -3%
Increase in
Cash
Surrender
Value of
Life
Insurance 827 816 1%
Service
Charges
and Other
Fees on
Deposit
Accounts 1,108 952 16%
Other 461 682 -32%
-------------------------
Total
Noninterest
Income 3,224 3,306 -2%
-------------------------
Noninterest
Expense:
Salaries
and
Employee
Benefits 12,101 12,029 1%
Professional
Fees 2,142 1,644 30%
Regulatory
Assessments 1,959 388 405%
Occupancy
and
Equipment 1,888 2,163 -13%
Other 5,352 5,354 0%
-------------------------
Total
Noninterest
Expense 23,442 21,578 9%
-------------------------
Income (Loss)
Before
Income
Taxes (18,501) (1,650) 1021%
Income Tax
Expense
(Benefit) (9,165) (271) 3282%
-------------------------
Net Income
(Loss) $ (9,336) $ (1,379) 577%
Dividends
and Discount
Accretion on
Preferred
Stock (1,176) -- N/A
-------------------------
Net Income
(Loss)
Available to
Common
Shareholders $ (10,512) $ (1,379) 662%
=========================
PER COMMON
SHARE DATA
(unaudited)
Basic
Earnings
(Loss) Per
Share $ (0.89) $ (0.11) 709%
Diluted
Earnings
(Loss) Per
Share $ (0.89) $ (0.11) 709%
Common
Shares
Outstanding
at
Period-End 11,820,509 11,806,167 0%
Book Value
Per Share $ 11.55 $ 12.01 -4%
Tangible
Book Value
Per Share $ 7.56 $ 7.96 -5%
KEY
FINANCIAL
RATIOS
(unaudited)
Annualized
Return on
Average
Equity -10.27% -1.81% -467%
Annualized
Return on
Average
Tangible
Equity -13.83% -2.63% -426%
Annualized
Return on
Average
Assets -1.28% -0.20% -540%
Annualized
Return on
Average
Tangible
Assets -1.32% -0.20% -560%
Net Interest
Margin 3.45% 4.15% -17%
Efficiency
Ratio 89.94% 73.45% 22%
AVERAGE
BALANCES
(in $000's,
unaudited)
Average
Assets $1,470,782 $1,415,295 4%
Average
Tangible
Assets $1,423,513 $1,367,319 4%
Average
Earning
Assets $1,336,162 $1,261,938 6%
Average
Loans Held-
for-Sale $ 113 $ -- N/A
Average
Total Loans $1,221,216 $1,122,940 9%
Average
Deposits $1,156,848 $1,136,283 2%
Average
Demand
Deposits -
Noninterest
Bearing $ 254,250 $ 254,767 0%
Average
Interest
Bearing
Deposits $ 902,598 $ 881,516 2%
Average
Interest
Bearing
Liabilities $1,004,134 $ 979,591 3%
Average
Equity $ 183,401 $ 153,544 19%
Average
Tangible
Equity $ 136,132 $ 105,568 29%
Percent
CONSOLIDATED End of Period: Change From:
BALANCE SHEETS --------------------------------- -----------------
(in $000's, June 30, March 31, June 30, March 31, June 30,
unaudited) 2009 2009 2008 2009 2008
--------------------------------------------------- -----------------
ASSETS
Cash and Due
from Banks $ 31,315 $ 30,720 $ 42,642 2% -27%
Federal Funds
Sold 150 100 150 50% 0%
Securities
Available-
for-Sale,
at Fair
Value 101,837 97,340 116,594 5% -13%
Loans Held-
for-Sale 20,506 -- -- N/A N/A
Loans:
Commercial
Loans 457,981 500,616 509,887 -9% -10%
Real
Estate-
Mortgage 412,430 406,182 403,526 2% 2%
Real Estate
-Land and
Construction 230,798 244,181 243,731 -5% -5%
Home Equity 55,372 54,011 45,991 3% 20%
Consumer Loans 3,596 4,025 4,686 -11% -23%
----------------------------------
Loans 1,160,177 1,209,015 1,207,821 -4% -4%
Deferred Loan
Costs, net 1,489 1,556 1,301 -4% 14%
----------------------------------
Total Loans,
Net of
Deferred
Costs 1,161,666 1,210,571 1,209,122 -4% -4%
Allowance for
Loan Losses (31,398) (23,900) (20,865) 31% 50%
----------------------------------
Net Loans 1,130,268 1,186,671 1,188,257 -5% -5%
Company Owned
Life Insurance 41,476 41,061 39,819 1% 4%
Premises &
Equipment,
net 9,312 9,383 9,052 -1% 3%
Goodwill 43,181 43,181 43,181 0% 0%
Intangible
Assets 3,910 4,071 4,584 -4% -15%
Accrued
Interest
Receivable
and Other
Assets 55,069 48,216 42,708 14% 29%
-----------------------------------
Total Assets $1,437,024 $1,460,743 $1,486,987 -2% -3%
===================================
LIABILITIES & SHAREHOLDERS'
EQUITY
Liabilities:
Deposits
Demand Deposits
-Noninterest
Bearing $ 258,464 $ 254,823 $ 262,813 1% -2%
Demand Deposits
-Interest
Bearing 134,318 133,183 145,151 1% -7%
Savings and
Money Market 331,444 358,848 435,754 -8% -24%
Time Deposits,
Under $100 43,772 46,078 33,911 -5% 29%
Time Deposits,
$100 and
Over 170,858 177,308 173,766 -4% -2%
Brokered
Deposits 224,691 195,763 108,623 15% 107%
----------------------------------
Total Deposits 1,163,547 1,166,003 1,160,018 0% 0%
Securities
Sold under
Agreement to
Repurchase 30,000 30,000 35,000 0% -14%
Note payable -- -- 12,000 N/A -100%
Other
Short-term
Borrowing 15,000 32,000 86,000 -53% -83%
Notes Payable
To Subsidiary
Grantor
Trusts 23,702 23,702 23,702 0% 0%
Accrued Interest
Payable and
Other
Liabilities 30,193 28,757 28,518 5% 6%
----------------------------------
Total
Liabilities 1,262,442 1,280,462 1,345,238 -1% -6%
Shareholders' Equity:
Preferred
Stock, Net 38,070 37,985 -- 0% N/A
Common Stock 79,524 79,153 75,941 0% 5%
Accumulated
Other
Comprehensive
Income
(Loss) (68) 115 (930) -159% -93%
Retained
Earnings 57,056 63,028 66,738 -9% -15%
----------------------------------
Total
Shareholders'
Equity 174,582 180,281 141,749 -3% 23%
----------------------------------
Total Liabilities
& Shareholders'
Equity $1,437,024 $1,460,743 $1,486,987 -2% -3%
===================================
CREDIT QUALITY DATA
(in $000's, unaudited)
Nonaccrual
Loans $ 57,889 $ 54,291 $ 12,226 7% 373%
Loans Over
90 Days Past
Due and Still
Accruing 786 1,774 1,488 -56% -47%
----------------------------------
Total
Nonperforming
Loans 58,675 56,065 13,714 5% 328%
Other Real
Estate Owned 3,062 802 580 282% 428%
----------------------------------
Total
Nonperforming
Assets $ 61,737 $ 56,867 $ 14,294 9% 332%
===================================
Net
Charge-offs
(Recoveries) $ 3,206 $ 11,527 $ 370 -72% 766%
Allowance for
Loan Losses
to Total
Loans 2.70% 1.97% 1.73% 37% 56%
Allowance for
Loan Losses
to Nonperforming
Loans 53.51% 42.63% 152.14% 26% -65%
Nonperforming
Assets to
Total Assets 4.30% 3.89% 0.96% 11% 348%
Nonperforming
Loans to
Total Loans 5.05% 4.63% 1.13% 9% 347%
OTHER PERIOD-END
STATISTICS
(unaudited)
Shareholders'
Equity/Total
Assets 12.15% 12.34% 9.53% -2% 27%
Loan to
Deposit Ratio 99.84% 103.82% 104.23% -4% -4%
Noninterest
Bearing Deposits
/Total Deposits 22.21% 21.85% 22.66% 2% -2%
Leverage Ratio 9.80% 10.41% 8.36% -6% 17%
For the Three Months Ended For the Three Months Ended
June 30, 2009 June 30, 2008
--------------------------- --------------------------
NET INTEREST
INCOME AND
NET INTEREST
MARGIN Interest Average Interest Average
(in $000's, Average Income/ Yield/ Average Income/ Yield/
unaudited) Balance Expense Rate Balance Expense Rate
---------- ------- ------ ---------- ------- ------
Assets:
Loans, gross $1,206,479 $14,862 4.94% $1,170,274 $17,250 5.93%
Securities 107,158 958 3.59% 131,428 1,433 4.39%
Interest
bearing
deposits
in other
financial
institutions 6,828 4 0.23% 470 2 1.71%
Federal
funds sold 139 -- 0.00% 2,815 14 2.00%
---------- ------- ---------- -------
Total
interest
earning
assets 1,320,604 15,824 4.81% 1,304,987 18,699 5.76%
------- -------
Cash and due
from banks 23,090 35,476
Premises and
equipment,
net 9,380 9,144
Goodwill and
other
intangible
assets 47,189 47,860
Other assets 56,899 58,929
---------- ----------
Total
assets $1,457,162 $1,456,396
========== ==========
Liabilities
and
shareholders'
equity:
Deposits:
Demand,
interest
bearing $ 134,141 79 0.24% $ 155,130 367 0.95%
Savings and
money market 346,847 662 0.77% 467,428 1,862 1.60%
Time
deposits,
under $100 44,612 259 2.33% 34,507 271 3.16%
Time
deposits,
$100 and
over 169,954 718 1.69% 174,534 1,363 3.14%
Brokered
time
deposits 199,655 1,676 3.37% 77,900 793 4.09%
Notes
payable to
subsidiary
grantor
trusts 23,702 487 8.24% 23,702 526 8.93%
Securities
sold under
agreement to
repurchase 30,000 227 3.03% 35,890 255 2.86%
Note payable -- -- N/A 10,407 75 2.90%
Other
short-term
borrowings 43,099 27 0.25% 39,187 219 2.25%
---------- ------- ---------- -------
Total
interest
bearing
lia-
bilities 992,010 4,135 1.67% 1,018,685 5,731 2.26%
------- -------
Demand,
noninterest
bearing 255,011 260,361
Other
liabilities 28,745 28,690
---------- ----------
Total
lia-
bilities 1,275,766 1,307,736
Shareholders'
equity 181,396 148,660
---------- ----------
Total
liabilities
and
share-
holders'
equity $1,457,162 $1,456,396
========== ==========
Net interest
income /
margin $11,689 3.55% $12,968 4.00%
======= =======
For the Six Months Ended For the Six Months Ended
June 30, 2009 June 30, 2008
--------------------------- --------------------------
NET INTEREST
INCOME AND
NET INTEREST
MARGIN Interest Average Interest Average
(in $000's, Average Income/ Yield/ Average Income/ Yield/
unaudited) Balance Expense Rate Balance Expense Rate
---------- ------- ------ ---------- ------- ------
Assets:
Loans, gross $1,221,329 $29,892 4.94% $1,122,940 $35,605 6.38%
Securities 108,655 1,957 3.63% 134,619 2,934 4.38%
Interest
bearing
deposits in
other
financial
institutions 6,021 8 0.27% 768 9 2.36%
Federal
funds sold 157 -- 0.00% 3,611 46 2.56%
---------- ------- ---------- -------
Total
interest
earning
assets 1,336,162 31,857 4.81% 1,261,938 38,594 6.15%
------- -------
Cash and
due from
banks 23,786 37,017
Premises and
equipment,
net 9,424 9,208
Goodwill and
other
intangible
assets 47,269 47,976
Other assets 54,141 59,156
---------- ----------
Total
assets $1,470,782 $1,415,295
========== ==========
Liabilities
and
share-
holders'
equity:
Deposits:
Demand,
interest
bearing $ 135,223 178 0.27% $ 151,800 968 1.28%
Savings and
money market 346,851 1,454 0.85% 472,009 4,751 2.02%
Time
deposits,
under $100 45,356 555 2.47% 34,566 591 3.44%
Time
deposits,
$100 and
over 173,377 1,592 1.85% 160,633 2,753 3.45%
Brokered
time
deposits 201,791 3,645 3.64% 62,508 1,311 4.22%
Notes
payable to
subsidiary
grantor
trusts 23,702 987 8.40% 23,702 1,083 9.19%
Securities
sold under
agreement to
repurchase 31,354 469 3.02% 29,027 410 2.84%
Note payable 5,110 82 3.24% 5,780 84 2.92%
Other short-
term
borrowings 41,370 54 0.26% 39,566 571 2.90%
---------- ------- ---------- -------
Total
interest
bearing
lia-
bilities 1,004,134 9,016 1.81% 979,591 12,522 2.57%
------- -------
Demand,
noninterest
bearing 254,250 254,767
Other
liabilities 28,997 27,393
---------- ----------
Total
lia-
bilities 1,287,381 1,261,751
Shareholders'
equity 183,401 153,544
---------- ----------
Total
liabilities
and
share-
holders'
equity $1,470,782 $1,415,295
========== ==========
Net interest
income /
margin $22,841 3.45% $26,072 4.15%
======= =======