Tower Financial Corporation Reports Record Annual Income of $8.1 Million and Announces Dividend

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| Source: Tower Financial Corporation

FORT WAYNE, Ind., Feb. 4, 2014 (GLOBE NEWSWIRE) -- Tower Financial Corporation (Nasdaq:TOFC) reported net income of $2.4 million or $0.52 per diluted share for the fourth quarter of 2013, compared with net income of $1.7 million, or $0.36 per diluted share, reported for the fourth quarter of 2012. Year to date earnings for calendar year 2013 were $8.1 million, or $1.73 per diluted share, compared to $5.7 million, or $1.18 per diluted share, for the calendar year 2012.

Our highlights include:

  • Our 2013 earnings of $8.1 million are the highest amount in our history. This represents a 41.2 percent increase from our 2012 earnings of $5.7 million.
     
  • Fourth quarter 2013 earnings of $2.4 million represent an increase of 40.4 percent from the fourth quarter 2012 and 16.5 percent from the third quarter of 2013.
     
  • Our trust and brokerage annual fee income was the highest in our history at $4.5 million, a 16.3 percent increase from 2012. Assets under management were $742.7 million at December 31, 2013, an increase of $70.4 million or 10.5 percent from December 31, 2012.
     
  • Asset quality continues its improvement, as our classified assets ratio was 25.7 percent as of December 31, 2013 compared to 32.2 percent at September 30, 2013 and 44.8 percent at December 31, 2012. 
     
  • Our board declared a dividend of $0.08 per share to be paid on March 4, 2014 to all shareholders of record as of February 18, 2014. Total dividends paid since we reinstated dividends in August 2012 are $1.24 per common share.

Mike Cahill, President and Chief Executive Officer of Tower Financial Corporation stated, "We believe these record numbers are a reflection of the talent of our team members who have worked tirelessly to make Tower successful. The last three years have resulted in the highest net incomes in our company's fourteen years of existence. 2013 is by far the highest annual net income in our history."

Asset Quality

Our nonperforming assets were $12.9 million, or 1.89 percent of total assets compared to $9.9 million at September 30, 2013 and $18.8 million at December 31, 2012. We had net recoveries for the fourth quarter of $360,000, or 0.31 percent of average loans outstanding compared to net charge-offs of $134,000, or 0.12 percent of average loans outstanding for the third quarter 2013 and $451,000, or 0.39 percent of average loans outstanding for the fourth quarter 2012. During the fourth quarter of 2013, our loan loss provision resulted in a benefit of $1.2 million compared to a benefit in the amount of $850,000 for the third quarter of 2013 and an expense in the amount of $200,000 for the fourth quarter of 2012.

The current and historical breakdown of our non-performing assets is as follows:

           
($000's omitted) 12/31/13 9/30/13 6/30/13 3/31/13 12/31/12
Non-Accrual loans          
Commercial  $ 8,642  $ 4,269  $ 5,792  $ 7,758  $ 8,897
Acquisition & Development  778  1,123  2,064  3,912  2,789
Commercial Real Estate  385  734  738  749  753
Residential Real Estate  443  444  2,190  2,124  2,447
Home Equity  204  192  194  82  82
Total Non-accrual loans  10,452  6,762  10,978  14,625  14,968
Trouble-debt restructured (TDR) *  --   --   --   446  1,645
OREO & Other impaired assets  2,298  2,402  1,759  1,922  2,038
Delinquencies greater than 90 days  138  743  559  133  110
Impaired Securities  --   --   --   --   -- 
           
Total Non-Performing Assets  $ 12,888  $ 9,907  $ 13,296  $ 17,126  $ 18,761
           
Allowance for Loan Losses (ALLL)  $ 5,715  $ 6,808  $ 7,792  $ 7,664  $ 8,289
           
ALLL / Non-accrual loans 54.7% 100.7% 71.0% 52.4% 55.4%
           
* Non-performing TDR's

The $3.0 million increase in nonperforming assets during the fourth quarter of 2013 relates to two commercial loans to the same borrower in the amount of $4.3 million that were taken to non-accrual status. This loan has been on our substandard loan list in previous quarters with a specific reserve put in place for any potential loan losses. The move to non-accrual status did not cause any changes to the specific reserve. 

When a loan has deteriorated to the point that it is classified as impaired and/or placed on nonaccrual status, a specific reserve or charge-off is recommended utilizing one of three impairment measurement methods (present value of expected cash flows, fair value of the collateral or observable market price). A charge-off will be taken in the place of a specific reserve at the point when facts and recent events support a reliable estimate of the extent and probability of loss. During the fourth quarter, a $4.3 million commercial loan relationship deemed impaired in previous quarters further deteriorated in the final quarter of 2013 to nonaccrual status.  As a result of this movement, our ALLL to nonaccrual ratio dropped to 56.6 percent in the fourth quarter.  Of the $10.5 million loans in nonaccrual status, we have already experienced approximately $400,000 of charge-offs.

Our classified assets, defined as substandard, non-accrual loans, impaired investments, and OREO, decreased by $3.6 million during the fourth quarter to $23.0 million at December 31, 2013 compared to $26.6 million at September 30, 2013 and $35.9 million at December 31, 2012. Our classified assets were 25.7 percent of tier 1 capital plus ALLL (classified assets ratio) as of December 31, 2013 compared to 32.2 percent at September 30, 2013. 

Our total "watch list" loans were $27.1 million compared to $30.0 million at September 30, 2013 and $39.4 million at December 31, 2012. Watch list loans now comprise 5.95 percent of the total loan portfolio. The watch list comprises all non "pass" rated credits. The following table presents the watch list by risk category:

           
  12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
Watch  $ 951  $ 1,695  $ 7,294  $ 1,871  $ 1,232
Special mention  5,013  4,848  10,690  4,641  5,493
Total non-classified loans  5,964  6,543  17,984  6,512  6,725
           
Substandard  10,084  17,304  15,119  13,645  18,293
Doubtful/Loss*  9,888  6,200  10,599  14,418  14,393
Total classified loans  19,972  23,504  25,718  28,063  32,686
           
Total watch list loans  $ 25,936  $ 30,047  $ 43,702  $ 34,575  $ 39,411
           
Watchlist loan/total loans 5.69% 6.65% 9.96% 7.86% 8.75%
           
Total classified assets  $ 23,029  $ 26,625  $ 28,641  $ 30,931  $ 35,894
           
*All loans in this risk rating are non-accrual.

The allowance for loan losses was $5.7 million at December 31, 2013 compared to $6.8 million at September 30, 2013 and $8.3 million at December 31, 2012. Impacting the allowance during the quarter were net recoveries of $360,000 and a loan loss benefit of $1.2 million. The allowance for loan losses was 1.25 percent of total loans at December 31, 2013. This was a decrease from 1.51 percent at September 30, 2013 and from 1.84 percent at December 31, 2012. The allowance for loan losses was 54.7 percent of non-accrual loans as of December 31, 2013 compared to 100.7 percent at September 30, 2013.

Balance Sheet

Our assets were $690.6 million at December 31, 2013, an increase of $6.6 million, or 1.0 percent, from December 31, 2012. The increase is primarily the result of an increase in total loans of $5.3 million, an increase in cash and short-term investments of $27.5 million and the purchase of additional bank owned life insurance policies for $2.8 million, offset by a decrease in long-term investments of $30.6 million.

Our total loans were $455.8 million at December 31, 2013. This was a $5.3 million increase from $450.5 million at December 31, 2012 and a $4.3 million increase from $451.5 million at September 30, 2013. The $5.3 million increase in total loans from December 31, 2012 was the result of an increase in commercial loans of $28.0 million, offset by decreases in commercial real estate loans, residential real estate loans, home equity loans, and consumer loans of $10.6 million, $6.0 million, $4.4 million, and $1.7 million, respectively.

Our investment securities at December 31, 2013 were $143.8 million, a decrease of $30.6 million from December 31, 2012. Investment securities comprise 20.8 percent of total assets. Due to our pending merger transaction with Old National Bank, we sold off $41.8 million in investment securities during the fourth quarter. We recognized a net gain on these sales of $872,000. The sales were completed in order to realize gains and to increase our liquidity heading into the merger transaction. The gains helped offset approximately $500,000 of merger related expenses incurred during the third and fourth quarters of 2013.

Our total deposits increased $37.4 million, or 6.7 percent, to $598.4 million at December 31, 2013 compared to $561.0 million at December 31, 2012. Health Savings Accounts ("HSAs") continue to be the primary driver of deposit growth with an increase of $15.6 million from December 31, 2012. We also experienced growth of $10.1 million in our money market saving accounts, $4.3 million in interest-bearing checking accounts, and $3.9 million in savings accounts. 

Our borrowings were $23.0 million at December 31, 2013 and were comprised of $17.5 million in trust preferred debt and $5.5 million in a fixed rate term borrowing from the Federal Home Loan Bank of Indianapolis ("FHLBI"). This represents a decrease of $31.9 million from our borrowings at the FHLBI at December 31, 2012, as we utilized excess cash from investment sales and deposit growth to reduce our borrowings. 

Our shareholders' equity was $63.3 million at December 31, 2013, a decrease of 0.8 percent from the $63.7 million reported at December 31, 2012. The primary reason for the decrease was a decrease in the unrealized gains, net of tax, on our investment portfolio in the amount of $5.4 million from December 31, 2012. This decrease relates primarily to market value fluctuations in our fixed rate municipal bond investments as a result of an increase in long-term interest rates. Additionally, we paid four quarterly dividends totaling $0.30 per common share, or $1.4 million, one special dividend of $0.25 per common share, or $1.2 million, and used $862,000 of capital to repurchase 70,000 shares of our common stock at average price of $12.32 per share during the first quarter of 2013. Offsetting the decreases in shareholders' equity was net income of $8.1 million. Currently, we have 4,680,551 common shares outstanding. Tangible book value at December 31, 2013 was $13.52 per common share, an increase of 0.5 percent from the $13.46 reported at December 31, 2012.  

Income Statement

Our total revenue, consisting of net interest income and noninterest income, was $8.3 million for the fourth quarter of 2013 compared to $7.3 million for the third quarter of 2013 and $7.6 million for the fourth quarter of 2012. The $1.0 million increase from the prior quarter was primarily due to $872,000 in gains on sales of investment securities during the quarter. 

Net interest income increased $91,000 from the third quarter of 2013 due to an increase of five basis points in our net interest margin to 3.51 percent.  Earning assets remained relatively flat quarter over quarter. Average loans grew by $16.1 million, but were offset by sales on investment securities. 

Noninterest income was $3.1 million for the fourth quarter of 2013, compared to $2.2 million for the third quarter of 2013 and $2.2 million for the fourth quarter of 2012. The primary factor for the large increase was $872,000 of gains on sales of investment securities that occurred during the fourth quarter 2013 compared to $73,000 of gains in the fourth quarter of 2012 and no gains during the third quarter of 2013. Trust and brokerage fees grew to $1.2 million for the fourth quarter of 2013, an increase from the $1.1 million and $962,000 posted for the third quarter 2013 and fourth quarter 2012 respectively. The remainder of the fee income categories remained basically unchanged during the fourth quarter. 

Noninterest expenses were $5.9 million for the fourth quarter of 2013 compared to $5.3 million for the third quarter of 2013 and $5.6 million for the fourth quarter of 2012. The $535,000 increase from the third quarter was primarily due to a $386,000 increase in our OREO expense and a $133,000 increase in employment expenses. The main cause of the change in our OREO expense was that we recorded a $264,000 gain from the sale of a property during the third quarter, and incurred $122,000 of expenses during the fourth quarter. Employment expenses increased primarily due to an increase in profit sharing, as our annual results were better than expected causing an increase in the liability at December 31, 2013. We incurred $229,000 of expenses during the fourth quarter related to the pending merger transaction with Old National Bancorp, compared to $279,000 incurred during the third quarter 2013.

INFORMATION ON PENDING MERGER

In connection with a pending merger between Tower Financial Corporation ("TOFC") and Old National Bancorp ("ONB"), ONB has filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4, which was declared effective by the SEC on December 19, 2013, and includes TOFC's Proxy Statement and a Prospectus of ONB, and each of TOFC and ONB have filed and will file other documents with respect to the proposed merger. A definitive Proxy Statement/Prospectus was mailed to shareholders of TOFC on or about December 19, 2013. Shareholders are urged to read the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information. A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about TOFC and ONB, may be obtained at the SEC's Internet site (http://www.sec.gov). You may also obtain these documents, free of charge, by accessing ONB's website at www.oldnational.com under the tab "Investor Relations" and then under the heading "Financial Information" or from TOFC's website at www.towerbank.net under the tab "Investor Relations" and then under the heading "SEC Filings."

TOFC and ONB and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of TOFC in connection with the proposed merger. Information about the directors and executive officers of TOFC is set forth in the proxy statement for TOFC's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 28, 2013. Information about the directors and executive officers of ONB is set forth in the proxy statement for ONB's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 15, 2013. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger. Free copies of this document may be obtained as described in the preceding paragraph.

ABOUT THE COMPANY

Headquartered in Fort Wayne, Indiana, Tower Financial Corporation is a financial services holding company with one subsidiary; Tower Bank & Trust Company (Tower Bank), a community bank headquartered in Fort Wayne. Tower Bank provides a wide variety of financial services to businesses and consumers through its six full-service financial centers in Fort Wayne, and one in Warsaw, Indiana. Tower Bank has a wholly-owned subsidiary, Tower Trust Company, which is a state-chartered wealth services firm doing business as Tower Private Advisors. Tower Bank also markets under the HSA Authority brand, which provides Health Savings Accounts to clients in 50 states. Tower Financial Corporation's common stock is listed on the NASDAQ Global Market under the symbol "TOFC." For further information, visit Tower's web site at www.towerbank.net

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements that, by their nature, are predictive and are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about our company.

These forward-looking statements are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, speak only as of this date, and involve risks and uncertainties related to our banking business, to general business and economic conditions that may affect our business, and to consummation of the pending merger between TOFC and ONB, any or all of which may cause actual results to turn out differently. More detailed information about such risks and uncertainties may be found in our most recent Annual Report on Form 10-K, or, if applicable, in subsequently filed Quarterly Reports on Forms 10-Q, under the captions "Forward-Looking Statements" and "Risk Factors," which we file from time to time with the SEC, as well as in the definitive Proxy Statement/Prospectus mailed to TOFC's shareholders on or about December 19, 2013 and any amendments or supplements to the definitive Proxy Statement/Prospectus under similar captions. These reports are available on the SEC's website at www.sec.gov, as well as on our website at www.towerbank.net.

 
Tower Financial Corporation
Consolidated Balance Sheets
At December 31, 2013 and 2012
 
  (unaudited)  
  December 31 December 31
  2013 2012
ASSETS    
Cash and due from banks  $ 37,682,577  $ 11,958,507
Short-term investments and interest-earning deposits  1,435,203  159,866
Federal funds sold  3,050,740  2,727,928
Total cash and cash equivalents  42,168,520  14,846,301
     
Interest bearing deposits  603,684  457,000
Trading Securities, at fair value  252,876  -- 
Securities available for sale, at fair value  143,553,908  174,383,499
FHLBI and FRB stock  3,807,700  3,807,700
Loans Held for Sale  2,169,067  4,933,299
     
Loans  455,795,160  450,465,610
Allowance for loan losses  (5,715,120)  (8,288,644)
Net loans  450,080,040  442,176,966
     
Premises and equipment, net  8,575,985  8,904,214
Accrued interest receivable  2,685,762  2,564,503
Bank owned life insurance (BOLI)  21,066,198  17,672,783
Other real estate owned (OREO)  2,154,813  1,908,010
Prepaid FDIC insurance  --   925,337
Other assets  13,434,923  11,393,469
     
Total assets  $ 690,553,476  $ 683,973,081
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES    
Deposits:    
Noninterest-bearing  $ 110,715,005  $ 108,147,229
Interest-bearing  487,684,684  452,860,109
Total deposits  598,399,689  561,007,338
     
Short-term borrowings  --   9,093,652
Federal Home Loan Bank advances  5,500,000  28,300,000
Junior subordinated debt  17,527,000  17,527,000
Accrued interest payable  103,942  107,943
Other liabilities  5,771,693  4,191,237
Total liabilities  627,302,324  620,227,170
     
STOCKHOLDERS' EQUITY    
Common stock and paid-in-capital, no par value, 6,000,000 shares authorized; 4,957,401 and 4,941,994 shares issued at December 31, 2013 and and December 31, 2012; and 4,680,551 and 4,735,144 shares outstanding at December 31, 2013 and December 31, 2012, respectivley  45,038,581  44,834,605
Retained earnings  23,421,087  17,880,539
Accumulated other comprehensive income (loss), net of tax of ($889,568) at December 31, 2013 and $1,880,433 at December 31, 2012  (1,726,808)  3,650,253
Treasury stock, at cost, 276,850 and 206,850 shares at December 31, 2013 and December 31, 2012, respectively  (3,481,708)  (2,619,486)
Total stockholders' equity  63,251,152  63,745,911
     
Total liabilities and stockholders' equity  $ 690,553,476  $ 683,973,081
 
 
Tower Financial Corporation
Consolidated Statements of Operations
For the three and twelve months ended December 31, 2013 and 2012
  (unaudited) (unaudited)
  For the Three Months Ended For the Twelve Months ended
  December 31 December 31
  2013 2012 2013 2012
Interest income:        
Loans, including fees  $ 4,800,181  $ 5,299,343  $ 19,362,002  $ 22,063,567
Securities - taxable  356,411  371,044  1,216,294  1,837,958
Securities - tax exempt  745,821  561,244  2,873,877  2,027,131
Other interest income  10,869  9,026  22,907  45,559
Total interest income  5,913,282  6,240,657  23,475,080  25,974,215
Interest expense:        
Deposits  576,325  640,929  2,370,512  3,157,522
Fed Funds Purchased  --   132  3  388
FHLB advances  20,049  43,602  108,578  160,836
Trust preferred securities  78,688  84,466  319,963  451,265
Total interest expense  675,062  769,129  2,799,056  3,770,011
         
Net interest income  5,238,220  5,471,528  20,676,024  22,204,204
Provision for loan losses  (1,150,000)  200,000  (1,975,000)  2,493,000
         
Net interest income after provision for loan losses  6,388,220  5,271,528  22,651,024  19,711,204
         
Noninterest income:        
Trust and brokerage fees  1,224,958  961,721  4,451,684  3,828,291
Service charges  270,634  261,658  1,106,527  1,090,028
Mortgage banking income  183,253  396,346  1,075,461  1,478,486
Gain/(Loss) on sale of securities  872,318  73,289  1,313,714  149,098
Net debit card interchange income  186,697  161,631  821,995  725,564
Bank owned life insurance income  169,535  146,353  643,415  587,925
Impairment on AFS securities  --   (688)  --   (688)
Other fees  170,958  170,026  849,471  655,210
Total noninterest income  3,078,353  2,170,336  10,262,267  8,513,914
         
Noninterest expense:        
Salaries and benefits  3,293,919  2,827,700  12,294,446  11,342,508
Occupancy and equipment  633,056  707,018  2,509,501  2,598,996
Marketing  126,725  176,386  522,035  483,573
Data processing  412,586  452,775  1,660,192  1,444,309
Loan and professional costs  520,803  478,396  1,829,721  1,497,000
Office supplies and postage  41,104  42,200  169,380  202,565
Courier service  51,277  56,505  214,810  232,179
Business Development  174,508  191,817  571,175  522,964
Communication Expense  44,908  49,666  181,681  217,901
FDIC Insurance Premiums  126,363  143,061  511,373  664,770
OREO Expenses  121,898  192,168  (121,533)  641,190
Other expense  303,218  257,489  1,137,592  1,020,558
Total noninterest expense  5,850,365  5,575,181  21,480,373  20,868,513
         
Income/(loss) before income taxes/(benefit)  3,616,208  1,866,683  11,432,918  7,356,605
Income taxes expense/(benefit)  1,188,261  137,869  3,321,879  1,612,439
         
Net income/(loss)  $ 2,427,947  $ 1,728,814  $ 8,111,039  $ 5,744,166
Less: Preferred Stock Dividends  --   --   --   -- 
Net income/(loss) available to common shareholders  $ 2,427,947  $ 1,728,814  $ 8,111,039  $ 4,015,350
         
Basic earnings/(loss) per common share  $ 0.52  $ 0.36  $ 1.73  $ 1.18
Diluted earnings/(loss) per common share  $ 0.52  $ 0.36  $ 1.73  $ 1.18
Average common shares outstanding  4,675,147  4,855,557  4,677,897  4,859,155
Average common shares and dilutive potential common shares outstanding  4,675,545  4,855,557  4,682,890  4,859,155
         
Total Shares outstanding at end of period  4,680,551  4,735,144  4,680,551  4,735,144
Dividends declared per common share  $ 0.080  $ 0.555  $ 0.550  $ 0.610
 
 
Tower Financial Corporation
Consolidated Financial Highlights
 
(unaudited)
 
  Quarterly Year-To-Date
  4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr    
($ in thousands except for share data) 2013 2013 2013 2013 2012 2012 2012 2012 2011 2013 2012
                       
EARNINGS                      
Net interest income $ 5,238 5,147 5,205 5,086 5,472 5,615 5,706 5,412 5,707  20,676  22,205
Provision for loan loss  $ (1,150)  (850)  300 (275) 200 618 925 750 975  (1,975)  2,493
NonInterest income $ 3,078 2,176 2,311 2,697 2,170 2,202 2,126 2,016 2,059  10,262  8,514
NonInterest expense $ 5,850 5,315 5,088 5,227 5,575 5,019 5,025 5,249 5,826  21,480  20,868
Net income/(loss) $ 2,428 2,084 1,599 2,000 1,729 1,563 1,365 1,088 3,422  8,111  5,745
Basic earnings per share $ 0.52 0.45 0.34 0.43 0.36 0.32 0.28 0.22 0.71  1.73  1.18
Diluted earnings per share $ 0.52 0.45 0.34 0.43 0.36 0.32 0.28 0.22 0.71  1.73  1.18
Average shares outstanding 4,675,147 4,672,496 4,667,807 4,696,432 4,855,557 4,874,660 4,853,136 4,853,136 4,853,645  4,677,897 4,859,155
Average diluted shares outstanding 4,675,545 4,672,673 4,668,104 4,696,432 4,855,557 4,874,660 4,853,136 4,853,136 4,853,645  4,682,890 4,859,155
                       
PERFORMANCE RATIOS                      
Return on average assets * 1.37% 1.20% 0.94% 1.19% 1.01% 0.96% 0.84% 0.65% 2.02% 1.18% 0.87%
Return on average common equity * 15.40% 13.64% 10.04% 12.75% 10.24% 9.43% 8.53% 6.92% 23.22% 12.94% 8.80%
Net interest margin (fully-tax equivalent) * 3.51% 3.46% 3.52% 3.49% 3.65% 3.87% 3.98% 3.76% 3.90% 3.50% 3.81%
Efficiency ratio 70.35% 72.58% 67.70% 67.16% 72.95% 64.21% 64.16% 70.67% 75.02% 69.43% 67.93%
Full-time equivalent employees  151.00  165.25  166.25  155.00  155.25  154.50  157.00  158.00  151.00  151.00  155.25
                       
CAPITAL                      
Equity to assets 9.16% 8.83% 9.03% 9.35% 9.32% 10.34% 9.97% 9.76% 8.86% 9.16% 9.32%
Regulatory leverage ratio 11.47% 11.39% 11.47% 11.25% 11.18% 12.00% 11.71% 11.13% 10.97% 11.47% 11.18%
Tier 1 capital ratio 15.29% 14.76% 15.14% 15.04% 14.65% 15.20% 14.87% 14.74% 13.91% 15.29% 14.65%
Total risk-based capital ratio $ 16.38% 16.01% 16.39% 16.29% 15.90% 16.46% 16.13% 15.99% 15.16% 16.38% 15.90%
Book value per share  $ 13.51  13.27  13.16 13.60 13.46 13.77 13.38 13.06 12.79 13.51  13.46
Cash dividend per share  $ 0.080  0.330  0.070 0.070 0.555 0.055 0.000 0.000 0.000 0.550 0.610
                       
ASSET QUALITY                      
Net charge-offs $ (360) 134 172 350 451 1,111 1,001 1,050 1,632 296  3,613
Net charge-offs to average loans * -0.31% 0.12% 0.16% 0.32% 0.39% 0.95% 0.86% 0.91% 1.38% 0.07% 0.78%
Allowance for loan losses $ 5,919 6,808 7,792 7,664 8,289 8,539 9,032 9,108 9,408 5,919 8,289
Allowance for loan losses to total loans 1.30% 1.51% 1.78% 1.74% 1.84% 1.86% 1.95% 1.99% 2.03% 1.30% 1.84%
Other real estate owned (OREO) $ 2,248 2,352 1,709 1,833 1,908 2,245 2,562 2,878 3,129 2,248 1,908
Non-accrual Loans $ 10,452 6,762 10,978  14,625  14,968  12,083  13,275  14,375  8,682 10,452 14,968
90+ Day delinquencies $ 138 743 559 133 110 913 472 902 2,007 138 110
Restructured Loans $ 781 3,437 4,531  4,254  4,683  4,242  3,692  1,802  1,805 781 4,683
Total Nonperforming Loans 10,590 7,505 11,537  15,204  16,723  14,553  14,107  15,277  12,494 10,590 16,723
Impaired Securities (Market Value)  --   --   --   --   --   317  307  314  331  --  0
Other Impaired Assets 51 51 51  88  130  130  --   --   --  51 130
Total Nonperforming Assets 12,888 9,907 13,296  17,125  18,761  17,245  16,976  18,469  15,954 12,888 18,761
NPLs to Total loans 2.32% 1.66% 2.63% 3.45% 3.71% 3.18% 3.04% 3.34% 2.70% 2.32% 3.71%
NPAs (w/o 90+) to Total assets 1.85% 1.31% 1.87% 2.50% 2.73% 2.51% 2.53% 2.71% 1.99% 1.85% 2.73%
NPAs+90 to Total assets 1.87% 1.41% 1.95% 2.52% 2.74% 2.66% 2.61% 2.84% 2.28% 1.87% 2.74%
                       
END OF PERIOD BALANCES                      
Total assets $ 690,553 701,875 680,941 679,069 683,973 649,466 651,239 649,343 700,681 690,553 683,973
Total earning assets $ 610,668 647,170 631,099 632,185 636,935 607,484 601,014 601,190 606,888 610,668 636,935
Total loans $ 455,795 451,516 438,565 440,075 450,466 457,865 463,833 457,260 462,561 455,795 450,466
Total deposits $ 598,400 590,236 581,591 585,277 561,007 530,278 551,486 552,191 602,037 598,400 561,007
Stockholders' equity $ 63,251 61,991 61,507 63,468 63,746 67,140 64,934 63,374 62,097 63,251 63,746
                       
AVERAGE BALANCES                      
Total assets $ 703,384 688,776 679,649 680,645 678,885 647,999 650,713 671,686 671,384 688,114  662,321
Total earning assets $ 634,618 634,003 634,611 631,674 628,333 603,004 603,119 605,429 606,775 633,727  609,971
Total loans $ 454,436 438,312 439,076 438,959 454,925 464,046 464,802 462,661 467,932 442,696  461,609
Total deposits $ 608,195 589,039 575,801 581,480 565,105 544,142 550,441 572,134 576,898 588,629  557,956
Stockholders' equity $ 62,552 60,602 63,867 63,640 67,168 65,927 64,180 63,021 58,468 62,665  65,074
                       
* annualized for quarterly data
FOR INVESTORS:
Richard R. Sawyer
Chief Financial Officer
260-427-7150


FOR MEDIA:
Tina M. Farrington
Executive Vice President
260-427-7155